USAGOLD Discussion - December 2006

All times are U.S. Mountain Time

968
(12/01/2006; 06:28:51 MDT - Msg ID: 149878)
PRESS RELEASE : 1 December 2006 - The ECB's gold sales
http://www.ecb.int/press/pr/date/2006/html/pr061201.en.htmlOn 30 November 2006, the European Central Bank (ECB) has completed gold sales amounting to 23 tons of gold. These sales are in full conformity with the Central Banks� Gold Agreement, dated 27 September 2004, of which the ECB is a signatory.

Goldilox
(12/01/2006; 08:56:28 MDT - Msg ID: 149879)
PoG pressures resistance
http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_lite$650 is under seige this morning, with a number of attempts to "breach the wall".
TownCrier
(12/01/2006; 09:32:20 MDT - Msg ID: 149880)
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R.
USAGOLD / Centennial Precious Metals, Inc.
(12/01/2006; 09:39:36 MDT - Msg ID: 149881)
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968
(12/01/2006; 09:44:16 MDT - Msg ID: 149882)
Russian Authorities Set Sights on Foreign Gold Producers, Plan to Recall Licenses
http://en.redtram.com/go/50825951/November 29, 2006 12:10

Snip :
Russia's environmental oversight agency (Rosprirodnadzor) plans to recall five licenses from subsidiary companies of British firm Peter Hambro Mining, which mines for gold in Russia.
----------------------------------------------------------------------------------------------------------------------
Wow, first oil-nationalization, now gold-nationalization...
I don't think the Russians see gold as just a dollar-hedge.
Thoughts anyone ?
GOLD FINGER
(12/01/2006; 10:30:44 MDT - Msg ID: 149883)
On ice or straight up?
REF:968 (12/1/06; 09:44:16MT - usagold.com msg#: 149882)


Now, this gives new meaning to "if you stand in my way I will have to kill you!" I see the Russian Federation wanting and demanding its world power back. I also see the current Government seeking to do whatever it takes to get it back. Naturalization of the countries natural resources is one way to keep control and the M O N E Y..... Here drink this 007 it will make you feel better!!

GF

Is this something to look deeper into.....?
Goldilox
(12/01/2006; 10:36:16 MDT - Msg ID: 149884)
Angels and Pigs
@ MK and staff,

The "angels" are really swell, but I was wondering if you're gonna get ahold of any of those cute golden Chinese piglets?
GOLD FINGER
(12/01/2006; 10:43:15 MDT - Msg ID: 149885)
I want sum....
pig�gies too~

I do like the Angles also

Dear Santa,

I WANT GOLD!

GOLD!!

....and MORE GOLD!!
TownCrier
(12/01/2006; 10:52:58 MDT - Msg ID: 149886)
Are the bullion bankers aware of their own fate?
http://www.lbma.org.uk/publications/forecast%202006/forecast2006_gold.htmAt the URL is a nice tabulation of the latest annual gold-price forecast as sponsored each year by the LBMA.

These forecasts, by the "Who's Who" of the bullion banking world, were submitted at the start of the year, and as you'll see, are for the most part embarrassingly out of touch with reality as it is unfolding.

For last year's contest, eleven of the participants had predictions at least within $10 of the the final average price for 2005 of $444.

This year, however, so far the running average for the price of gold is at $602, and as the current price sits $648, it is sure to pull the average for the year higher still. And yet among all 25 contestants, Ross Norman alone (with a predicted high of $760; and $618 average) had the good wits to foresee (or should I say, the pluck to publicly admit to) the potential for significantly higher highs for the year.

This is particularly notable because, even when ignoring the May runup to the $725 level, none of the other contestants offered a high forecast anywhere near were we currently sit at the doorstep of $650. The next highest HIGH prediction was $630 by Jeffrey Rhodes at Standard Bank in Dubai, and yet his average price was a very meek $522.50.

In fact, the average prediction by the group for the year's HIGH tops out at a very wimpy $607... which really only manages to match what this year's daily prices have actually AVERAGED, to say nothing of the $725 high that we've actually seen thus far.

And in regard to the average, the average prediction for this group was that the daily average would be only $534.9 -- and again, the current actual daily price average is sitting at $602, and we still have a month to go from our current position.

Are we to conclude that most of these guys don't know their stuff, or is this almost universal low-ball price prognostication an example of whistling past the graveyard? Of the bullion banking managers among them, are they actually making strategic business decisions based on their own forecasts which might come back to haunt them given this wide disparity with the unfolding reality? Or is this all just a superficial face for public consumption, whereas secretly they know that gold is headed much, much higher?

Free from all that potentially hidden agenda management nonsense, you can see what our own Michael Kosares predicted to unfold for the year 2006 at this URL below. (copy and paste)

http://www.usagold.com/analysis/2006-kosares.html

If you're too lazy to cut and paste, here's a clue. He predicted "an interim top in the $760 range" even before Ross Norman went public with his own prediction at that level.

Are there not but these scant two isolated beacons amid these so-called 'experts' and active professionals who are all so apparently lost in their sea of fog?

R.
Topaz
(12/01/2006; 11:39:58 MDT - Msg ID: 149887)
ECB Gold sales?
The image emerging is that of the ECB adopting a seller of last resort position re: the WAG.
These actions completely defy (my percieved) logic ...as a supposed eurozone manager, could we not expect them (ECB) to perhaps fanfare a sale of UST's rather than Gold?
We might then expect a US Bond rate rise, a DX rise and exchange relief for the Euro which, by all accounts is sorely needed on the Continent, Airbus being the most public of disaffected parties.
Clearly NOT in the interests of the Globalists though.
mikal
(12/01/2006; 11:55:30 MDT - Msg ID: 149888)
More on the ancient "computer" masterpiece
http://www.guardian.co.uk/science/story/0,,1960316,00.htmlMysteries of computer from 65BC are solved
� Mechanism hailed as more valuable than Mona Lisa
� Device with gear wheels tracked sun and moon
Ian Sample, science correspondent
Thursday November 30, 2006
The Guardian
A reconstruction of the Antikythera mechanism. Photograph: Louisa Gouliamaki/AFP/Getty -- Excerpts:
"A 2,000-year-old mechanical computer salvaged from a Roman shipwreck has astounded scientists who have finally unravelled the secrets of how the sophisticated device works."

Mikal-- The story and accompanying photograph serve to compliment yesterday's article and my comments(post msg#149861) on this enigmatic and mind-bending discovery.

"Remarkably, scans showed the device uses a differential gear, which was previously believed to have been invented in the 16th century. The level of miniaturisation and complexity of its parts is comparable to that of 18th century clocks.
Some researchers believe the machine, known as the Antikythera Mechanism, may have been among other treasure looted from Rhodes that was en route to Rome for a celebration staged by Julius Caesar.
One of the remaining mysteries is why the Greek technology invented for the machine seemed to disappear. No other civilisation is believed to have created anything as complex for another 1,000 years. One explanation could be that bronze was often recycled in the period the device was made, so many artefacts from that time have long ago been melted down and erased from the archaelogical record. The fateful sinking of the ship carrying the Antikythera Mechanism may have inadvertently preserved it. "This device is extraordinary, the only thing of its kind," said Professor Edmunds. "The astronomy is exactly right ... in terms of historic and scarcity value, I have to regard this mechanism as being more valuable than the Mona Lisa." The research, which appears in the journal Nature today, was carried out with scientists at the National Archaeological Museum of Athens where the mechanism is held and the universities of Athens and Thessaloniki."

Mikal-- Like old gold "relics", an old masterpiece
similarly arises from the depths to assume this
outstanding representation of "value", not to mention genius
Goldilox
(12/01/2006; 11:56:12 MDT - Msg ID: 149889)
US $ vs. Gold
It's interesting that while the PoG is getting bounced back from $650 today, the dollar is seeing NO relief in the FOREX. Disconnection or just a "strain in the relationship"?
Topaz
(12/01/2006; 12:11:30 MDT - Msg ID: 149890)
all-currency PoG/S.
http://www.galmarley.com/Chart_pages/currency_charts.htmDespite scaring the bejesus out of $650 and a pretty good run-up into the rollover, PoG/S have been rather disappointing this week.
At "put to bed" prices of $645/$14 the masters appear well in control of the universe despite growing their respective future OI's substancially. We'll worry about that later!
Chinks are appearing in the armor though, WHERE's MY COMEX DELIVERY UPDATE??

Apart from the top three $US clone factories, PoG has been pummelled this week. Thank goodness it's only paper eh?
TownCrier
(12/01/2006; 12:16:54 MDT - Msg ID: 149892)
Topaz, "could we not expect them (ECB) to perhaps fanfare a sale of UST's rather than Gold?"
http://www.ecb.int/press/pr/date/2000/html/pr000914_1.en.htmlThe interpretation really hinges upon which word you place your emphasis.

Excerpt from the Press Release:
"On 30 November 2006, the European Central Bank (ECB) has completed gold sales amounting to 23 tons of gold.

Your initial take was apparently to emphasize the word SALE, which to any gold minded body would be a bit of a physchological downer.

However, if you were to put a tighter focus upon the word COMPLETED, the message becomes quite positive. And to be sure, the ECB cannot in this same fashion fanfare its U.S. Treasuries operations because all signs point that their dishording of USTs are far from complete -- there has been much shedding done and much yet to accomplish.

In fact, remember that old press release of 14 September 2000 in which the announcement was made that interest earned on these foreign securities would no longer be reinvested and rolled forward, but rather would be liquidated for euro on an ongoing basis?

An almost "unprecedented" policy action in the modern world of central bank reserve management... such that the ECB sent notice. To wit, "The Federal Reserve Bank of New York and the Bank of Japan have been informed of these planned foreign exchange operations."

R.
Topaz
(12/01/2006; 12:26:01 MDT - Msg ID: 149893)
Randy.
It's all fine and large (the ECB) pussy footing around with long-term asset reallocations, Gold sale announcements, grand scale obfuscations and whatnot TC. The rubber-on-road facts clearly indicate that: Despite the best intentions of the brightest monetary minds heregathered, the patient (Euro) died!

They need to cohone up a bit I think, or so may go the E.
968
(12/01/2006; 12:37:34 MDT - Msg ID: 149894)
Here is the complete text and URL for msg#: 149882
http://mosnews.com/money/2006/11/29/goldlicense.shtmlRussia's environmental oversight agency (Rosprirodnadzor) plans to recall five licenses from subsidiary companies of British firm Peter Hambro Mining, which mines for gold in Russia. Foreign gold producers join the ranks of Shell, Exxon and Total, whose activities in Russia have already come under a lot of pressure from the authorities, which seek to regain control over the country's natural riches.

RIA Novosti agency quoted the deputy head of Rosprirodnadzor Oleg Mitvol on Wednesday, Nov. 29, as saying that Peter Hambro's subsidiaries either do nothing to develop the deposits or conduct their activities violating environmental rules. The Russian official said that the agency has no plans to forget its claims against Sakhalin Energy, Shell-led operator of Sakhalin-2 oil and gas project in the Far East. Moreover, it became known that the environmental oversight agency is ready to make claims against state-controlled gas monopoly Gazprom.

Speaking about Peter Hambro Mining and its subsidiary Yamalzoloto, Mitvol said: "This is one of those companies that simply take licenses to keep them on their balance, thus increasing capitalization, but in reality they do not develop the deposits." The official explained that Rosprirodnadzor is concerned about two of the company's licenses for Novogodnee-Monto and Toupugol-Khameisholrsky deposits. "For example, out of 30 provisions of the licensing agreement for Novogodnee-Monto deposit, 21 have been unfulfilled," Mitvol said. He also explained that "based on the zero natural resource production tax paid from this deposit, no gold production is taking place, although forecasted reserves of gold amount to 29 tons there".

Interfax agency also reported that within two days Rosprirodnadzor will file the documents to the Agency on subsoil use (Rosnedra) demanding license recall from Kongor-khrom company, which the agency also considers to be one of Peter Hambro's subsidiaries. This company is accused of various environmental violations.

Oleg Mitvol stressed that Rosprirodnadzor will conduct special checks of Peter Hambro's remaining 43 licenses in Yamalo-Nenets autonomous district and Amur and Magadan region.

Meanwhile, the representatives of the British company refuted all of the Russian government agency's accusations. "The checks that were conducted at our deposits have shown no significant violations. We are fulfilling all of investment conditions," the company's co-owner and top manager Pavel Maslovsky was quoted by Interfax. Maslovsky also said that Kongor-khrom company has no relation to Peter Hambro Mining.

968
(12/01/2006; 12:39:08 MDT - Msg ID: 149895)
@ Topaz msg#: 149893
Can you please elaborate in what way and how the Euro died ?
TownCrier
(12/01/2006; 12:50:33 MDT - Msg ID: 149896)
Hi again, Topaz
I'll have to echo 968's question about the euro patient dying.

Maybe my problem is I'm not looking broadly enough to see your point, for all that was on my mind when I made my reserve-related post was that since the birth of the euro, the value of eurosystem gold holdings have very approximately doubled (from a starting point less than EUR 100 billion) whereas at the same time the foreign treasury holdings have been dumped by nearly a third (from a starting point over EUR 200 billion).

Somewhere in there I guess I missed a funeral, for the only thing I see the Grim Reaper attending to is the bedside of the paradigm of international dollar-centric reserves.

Cheers to the weekend -- already upon you!

R.
USAGOLD / Centennial Precious Metals, Inc.
(12/01/2006; 13:03:23 MDT - Msg ID: 149897)
View the archive to see what you've been missing -- and be sure to sign up for timely email updates. It's FREE!
http://www.usagold.com/amk/news-group.html

join the newsgroup
Goldendome
(12/01/2006; 13:06:02 MDT - Msg ID: 149898)
Falling dollar--falling interest rates
While the dollar's getting crushed, gold's rising some-- but longer bonds have been soaring with interest rates flagging over the past few months.

Could this be a part of a master plan? A way to cushion the real estate downturn and all of the ARM re-fi's? Get those long rates down.
Topaz
(12/01/2006; 13:08:35 MDT - Msg ID: 149899)
968.
In English 968 there is an expression, "Despite our (the Doctors) best efforts, the patient died", implying their efforts weren't sufficient to resusitate the patient. Their best was not good enough.

Whilst the Euro isn't "dead" YET, ...imo if they (ECB) don't take a more proactive approach shortly, the indications are that disaffected sovereign components of the Eurozone will abandon ship and revert to previous arrangements.
That would have to be seen as in the best interest of the Dollar bloc globalist status-quo and indications currently are they (ECB) are making no overt response to correct this.

The world needs a front-page, neon sign example of commitment to a new paradigm from the ECB imo 968, for to continue mealy-mouthing seems to be sealing the Euro's fate.
Topaz
(12/01/2006; 13:32:20 MDT - Msg ID: 149900)
Randy, 968.
To clarify I hope ;-), the RotW, under the current $ reserve paradigm, can ill afford DX sub 85 WITHOUT a marked decrease in the Bond.
IF (big if) we are to continue with a Dollar-centric system, they (ECB) really need imo to get the EuroX down. clearly they (Eurozone) cannot function efficiently at $1.30 ...alternately, get pro-active on a NEW paradigm whereby the current arrangements are made redundant ...PooF!
mikal
(12/01/2006; 13:34:42 MDT - Msg ID: 149901)
@Topaz
Your points are well taken. The discussion you have engendered is most enlightening. Indeed your concern for the Euro could well initiate more valid criticisms of the euro and dollar fiat hegemons. To say nothing of their benefits.
Speaking of which, the dollar benefit to most Americans has been most copious and reliable. So much so, that it's decline in purchasing power of 98% since 1913 has not prevented many such as myself to achieve a reasonably comfortable standard of living.
But this is becoming more difficult to most Americans and the cost of living is also changing more rapidly, so what you suggest "The world needs a front-page, neon sign example of commitment to a new paradigm from the ECB imo 968, for to continue mealy-mouthing seems to be sealing the Euro's fate.", could occur at some point(when gold is poised to take a much more realistic and prominent role), hastening changes in the US$, US and world markets almost overnight and perhaps "sealing THEIR fate" unless the dollar also utilizes a MTM central bank gold reserve model similar to the ECB to prevent a "Mad Max" USA.
mikal
(12/01/2006; 13:49:49 MDT - Msg ID: 149902)
@Topaz
Re: msg 149900
Good points. Indeed, the discussion here often takes the form of puzzling, even marveling over how much longer
the world's most "successful" and ubiquitous currencies
can keep up the fight of "Beggar thy neighbor" policies of competitive devaluation and trade skirmishes.
968
(12/01/2006; 13:52:35 MDT - Msg ID: 149903)
@ Topaz Sultan Bin Nasser Al-Suwaidi: The extended importance of the euro
http://www.bis.org/review/r061128d.pdfIt seems that oil doesn't see it your way Topaz...

"With this I come to the conclusion of my short speech. Finally I would say that the Euro will definitely grow to dominate trade outside the Euro Area.
The Euro Area will harmonize further its labor, tax and financial services laws, i.e. will become more competitive in attracting investments, which will help the Euro to become the currency of international investments.
I expect the Euro to become the currency of international trade and investments in ten years. If we add to that tourism, the Euro will surpass the US Dollar, as the first currency in the world by 2015."

Time will tell us. BTW the dollar was already overprinted in 1971. Are they gonna make it healthy again, or what ?
mikal
(12/01/2006; 14:07:14 MDT - Msg ID: 149904)
Dollar waits on distant cavalry, exchange rate moves to lower supports
http://money.cnn.com/2006/12/01/news/economy/dollar.fortune/index.htm?section=money_news_economyA good read and reality check on the dollar and economic imbalances, especially if you read between the lines and understand the implications of the casual comments here:
Beware the falling dollar
Sure, it's good for Detroit, U.S. exporters and the tourism biz. But it could boost oil prices - hello, $3-a-gallon gas again - and tie the Fed's hands, leading to recession or even stagflation.
By Jon Birger, Fortune senior writer
December 1 2006: 3:03 PM EST - Snippit:
"(Fortune) -- Given the sorry state of U.S. manufacturing and the widening trade gap between U.S. and the rest of the world, it's understandable why there's been little hand-wringing over the falling value of the U.S. dollar. Since October, the dollar has fallen 4% against both the euro and the Japanese yen. And this week, the dollar hit the lowest it's been against the euro since March 2005."
USAGOLD Daily Market Report
(12/01/2006; 14:20:53 MDT - Msg ID: 149905)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

FRIDAY Market Excerpts

Gold up 2.5% on week, up 7% for month

December 1 (from DowJones) -- Gold futures gave up midday gains on profit-taking to finish with a modest loss Friday as February gold settled down $2.30 to $650.60 on the Comex division of the New York Mercantile Exchange.

"You were probably seeing a little end-of-week profit-taking," said Michael Gross, broker and futures analyst with Liberty Trading. This was occurring toward the end of a week when gold and silver had made big upward moves, he said. Much of the activity has been speculative in nature. "It looks like speculators are pushing this around," Gross said. "You have pretty big open interest by large and small specs in both gold and silver. When you get that type of open interest in an uptrend, and you're going to get sell-offs here and there."

This weekend will mark a historic change for Comex metals business.

Gold, silver, copper and aluminum futures are scheduled to start trading nearly 24 hours a day on the Chicago Mercantile Exchange's Globex electronic platform and will trade "side by side" with the open-outcry session in New York, a contrast from in the past.

Furthermore, nine new metals contracts will begin trading on CME Globex this weekend.

These include London grade A copper, primary aluminum and zinc, Asian gold, platinum and palladium, plus Comex miNYs -- with a smaller amount of metal than the traditional contracts -- for gold, silver and copper.

---(see url for full news, 24-hr newswire)---
Goldilox
(12/01/2006; 14:22:49 MDT - Msg ID: 149906)
New title and new predictions
Wow Topaz,

One solidly controversial statement and you are suddenly endowed with the title of "Sultan". Great work if you can get it!

As to: "The world needs a front-page, neon sign example of commitment to a new paradigm from the ECB imo 968, for to continue mealy-mouthing seems to be sealing the Euro's fate."

Odd that this thought should arise today, as the latest web-bot output suggests just this as unidentified "group of five" are predicted to renounce dollar hegemony in unison soon (presumably in unison for its protective value).

Might this "group of five" perhaps be the G8 minus the US, Canada, and Japan? GB is already bemoaning a post-Iraq US aloof attitude in today's BBC.

Or another possibility, might a group of resource rich and/or manufacturing companies including Russia, China, Iran, Venezuela, and South Africa be considering this particular point of US dollar weakness an opportunity to wield their economic and resource power in unison?

Interesting times, indeed, as BB often quips.
Topaz
(12/01/2006; 14:39:19 MDT - Msg ID: 149907)
968
Ivory tower types the world over love the concept, they don't see the day to day impost of US$1.30 EuroX 968, they don't face the prospect of being retrenched due to international pricing issues ...and they don't VOTE!
An economic powerhouse takes more than pulling down a few border check-points imo. Anyone who has watched a Discovery Channel Airbus show will appreciate the difficulties associated with multi-country co-operation on a grand scale. The associated difficulties are magnified immensely at US$1.30 ...similar issues are repeating all over the Zone.
In fact the Dollar of late is acting in response to just such issues as they surfaced late last century (1990's) and if we keep on this course, USA will benefit immensely, to the detriment of the E-Zone.
The Euro reminds me of an Ice Hockey player in full garb arriving at (say) Dodger Stadium expecting to play. ...he's simply not dressed right ...for Baseball.
Put in an Ice rink though, throw in a (Golden) puck ...and lookout!

IMHO of course.
Topaz
(12/01/2006; 15:15:39 MDT - Msg ID: 149908)
mikal ...$3-a-gallon gas again
http://www.futuresource.com/charts/charts.jsp?s=CL&o=DX&a=W&z=610x300&d=LOW&b=LINE&st=Hi mikal,
Your correspondent implying a lower DX automatically relating to higher PoO is pretty close of late however,
The other consideration ...$3/Gal is STILL cheaper than the litre equivalent price most of the RotW has to endure given the impost of Taxes, levies and whatnot imposed by(our)foreign Gov'ts.
Provided the thing (paradigm) doesn't change mikal, in the US, sub 85 is Party-Time!
I'm booking my trip already ;-)
Goldilox
(12/01/2006; 16:27:06 MDT - Msg ID: 149909)
A gallon of gas
@ Topaz,

Comparing the pump prices of a gallon of gas in the US with RotW is more "apples vs. oranges" than most suspect.

The price of US gas is heavily "supported" by the use of US military and "off-budget contractors" to procure it from locations like Iraq for "prices" that have no real relationship to the NYMEX OI futures.

Given that upwards of 50% of our tax base goes directly to funding "foreign adventures" (counting the off-budget portions), a real comparison should also add 50% of each citizen's tax liability directly to his/her fuel bill! The obvious difference is that other nations add that tax at the pump, where the US hides it in a zillion different taxes that aren't visibly linked to fuel in order to confuse John Q Voter and benefit the Oil Czars.

Ask any aware military mother what the "cost of a gallon of gas really is".
MK
(12/01/2006; 16:39:48 MDT - Msg ID: 149911)
Paulson believes a major crisis is overdue, so does Pres. Bush and Josh Bolten, White House Chief of Staff
http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&CFID=11171047&CFTOKEN=88162966&category=Market%20Commentary≠wsletterid=1274%3Cbr%3E&menugroup=HomeI picked this story up in Bill Murphy's daily column at LeMetropoleCafe.com. Paulson and Bolten are both out of Goldman Sachs. This analysis was published by Comstock Partners and it passes along insights from a Fred Barnes article in the Weekly Standard. Barnes, as many of you know, has strong connections in the White House and the upper echelons of the Republican Party.

"Paulson believes a financial crisis is overdue�a serious crisis that would be a body blow to the U.S. economy.� This fear is shared to some extent by Bush and Bolten, who wanted a major Wall Street player at Treasury in case an economic emergency occurs. Barnes then details Paulson's activation of the financial working group 'to prepare for the crisis.'"

I've linked the Comstock article above. Bill Murphy's site is www.LeMetropoleCafe.com.

MK comment: As far as the general public is concerned this crisis will come like a thunderbolt out of the blue without warning. But as you can see by the small, but important, snippet above, it won't come out of the blue as far as the Bush administration is concerned. "What form it will take" and "how it will affect the financial markets" are major question marks even for those in the seat of power despite having at their disposal all the analytical tools and information gathering prowess of the U.S. government and the Federal Reserve.

All they know is that something is coming and the government had better get ready for it -- an economic Katrina if you will. And invoking Katrina in this context is the right analogy. I have always considered economic calamity not unlike a force of Nature or perhaps Nature itself. It cannot be forestalled forever. (You will recall, in an article featured in a recent USAGOLD NewsGroup, that both Paul Volcker and Robert Rubin came public recently with similar concerns. It seems that there are those in the Bush administration, including the President himself, who harbor similar fears, and this is the first time I have seen those fears surfaced (and by a credible journalist like Fred Barnes.)
MK
(12/01/2006; 16:44:54 MDT - Msg ID: 149912)
By the way. . .
Many thanks to Bill Murphy for an important heads up.
mikal
(12/01/2006; 22:00:11 MDT - Msg ID: 149913)
More Thursday/Friday business news
U.S. November ISM Manufacturing Index Falls to 49.5 From 51.2 - Bloomberg{A key level triggers rate concerns}
As Dollar Weakens, Paulson Faces Challenge of Tempering Its Decline - WSJ ($){More on Paulson- by subscription only}
U.S. Construction Spending Fell 1% in October, Led by Housing - Bloomberg{Another of the week's sorry statistics}
States want a piece of Indian gaming - CFO.com{States in dire straits?}
US inflation remains stubbornly high - FT{After reading this, I say if FT worries over micromanaged, understated official inflation, what must the editors be thinking behind closed doors?}
Drivers' habits still reflecting price run-up - Houston Chronicle{Gas hogs not yet threatened with extinction though}
Mortgage Bonds Hurt by Delinquencies, Housing Slump - Bloomberg{Still on life support.There must be a spy poisoning their IV's}
Mercury rises on natural gas prices - USAToday{Hot air helps traders play the market both ways}
Better oversight of 401(k) plans urged - LA Times{So THAT'S what street corner webcams are for- better late than never!}
European Manufacturing Expands, Unemployment Declines - Bloomberg{They couldn't possibly be at risk?}
India's real estate boom - FT{The great divide- east and west or poor and rich? India may have it's own western style probem?}
Japan may use public money to bail out banks - CBS Marketwatch{Isn't this what happens when they prop(up) the Nikkei?}
Asia Finding Rich Partners in Mideast - NY Times{Like this just started yesterday!}
Japan's Unemployment Rate Falls Near Eight-Year Low - Bloomberg{As in India, appearances may be deceiving}
Why Paulson Will Face Disappointment in China - Pesek, Bloomberg{Paulson wouldn't go if it meant dissappointment as a result of his trip. His dissappontment lies and will lie in the uncertainty of the future as delineated by MK!}
Goldilox
(12/01/2006; 23:06:13 MDT - Msg ID: 149914)
Afghanistan: a chance or a trap for NATO?
http://en.rian.ru/analysis/20061201/56326680.htmlsnip:

MOSCOW. (RIA Novosti military commentator Alexander Bogatyrev) - Afghanistan is one country where Russia is ready to cooperate with NATO, as the latest meeting of the NATO-Russia Council showed. The bloc, however, needed time to mull the offer over.

The first day of the NATO summit in Riga, Latvia, which discussed Afghanistan, provided the answer.

Afghanistan is a complicated and painful problem for the organization. Some say the country will decide its future. Five years after the beginning of the operation, NATO is coordinating the international effort in Afghanistan. This removes the ambiguity that prevailed when U.S. and NATO troops acted separately even though the Untied States is a NATO member.

The operation in Afghanistan was expected to give NATO a second lease on life after the end of the Cold War. The Taliban seemed to be the answer to the question of the bloc's objectives and adversaries.

But the meeting in Riga showed that Afghanistan is turning out to be an unbearably high price to pay for the preservation and expansion of the bloc.

At present NATO has to ensure security both in the relatively calm northern provinces of the country and in the south and southeast, where the Taliban are the true masters. Their autumn offensive proved that they have reinforced their positions and are gradually changing their tactics, going over from a guerrilla war to well-organized offensive and defensive operations. Moreover, they are now more frequently attacking in large groups of 300-400.

Foreign troops and Afghan government forces are sustaining heavy losses, increasingly as a result of terrorist attacks by suicide bombers, which is a new element. This year, suicide bombers have staged more than 140 attacks, which makes Afghanistan increasingly reminiscent of Iraq.

NATO does not have enough forces to deal with this new situation, and therefore its troops are mostly hiding in their bases and strongholds, only rarely staging raids against the enemy.

Some participants in the Riga summit called for increasing NATO forces in Afghanistan, but such entreaties by the U.S., Britain and Canada have been rejected by the European NATO members (Germany, France, Spain, Turkey, Italy, Norway and Denmark).

-Goldilox

Russia wants back into Afghanistan? Some lessons come really hard!
Goldilox
(12/01/2006; 23:11:02 MDT - Msg ID: 149915)
DJIA Compared To the Dow/Gold Ratio
http://www.jsmineset.com/snip:

Dear Jim;

Below is a chart with a side by side comparison of the Dow Jones Industrial Average as over against the Dow/Gold ratio.

This chart came out of an email exchange of mine with a good friend named Eric D. who is a terrific statistician along with being a good student of the markets. Eric regularly tracks these sorts of things and sends them my way in the course of our exchanges.

I thought that by putting in chart form the gist of our conversation that the readers of our site would be benefited and might better come to understand the true role of gold as a store of value and the one way that they can protect their wealth from the stealthy onslaught made upon it by the lords and masters of all fiat currencies.

The charts are fairly straightforward and need little explanation. The first details the Dow Jones Industrial Average since 1990 when it embarked on what most agree was the beginning of a massive bull run. It then peaked in early 2000 plummeting into a low in the fall of 2002. From that point onward it has been a case of onward and upward. The buy and hold guys who stuck it out during the nasty two years from 2000-2002 must no doubt be patting themselves on the back for their true grit and for ignoring us equity bears who kept and still keep warning of nasty things coming our way. However, before they get too giddy, they should take a long, hard, thoughtful look at the latter chart of the Dow/Gold ratio.

Notice that it follows pretty much the same pattern from 1990 all the way up to 2000. What happens from that point on however is stunning � it drops sharply but then stages a recovery rally into the summer of 2001. From then on the chart pretty much heads in the exact opposite direction from the Dow chart. While the Dow goes on to make a new record high late this year, the Dow/Gold ratio chart barely manages to break the downtrend line before dropping back down below it again.

My take on this is pretty succinct � what we are witnessing is the debauchery of the US dollar and its insidious effect on the store of wealth of the average US citizen. When compared to a constant store of value, namely gold, the average equity investor is actually falling further and further behind as inflation pumps up the dollar value of their paper assets while simultaneously making the same worth less and less in the real terms.

For me gold is not a matter of a means of diversifying my portfolio � it is a matter of survival and the only means to keep what I have earned from being systematically destroyed by a fiat currency system that is not only unconstitutional, but is grossly immoral at best and downright evil at worst.

Goldilox

The DOW/Gold chart is definitely a "keeper"!
Chris Powell
(12/01/2006; 23:22:24 MDT - Msg ID: 149916)
Volatile dollar may not be so scary to Washington
http://www.nytimes.com/2006/12/02/business/02dollar.htmlBy Steven R. Weisman
The New York Times
Friday, December 1, 2006

WASHINGTON, Dec. 1 -- As the dollar tumbled against the euro this week, reflecting fresh concern about a possible weakening of the American economy, Treasury Secretary Henry M. Paulson Jr. issued the usual phrase from the catechism: "A strong dollar is clearly in our nation's best interest."

Treasury secretaries since Robert E. Rubin in the 1990s have, with rare exceptions, offered precisely that formula whenever the subject comes up.

But many economists say that Mr. Paulson's statement does not reflect what the United States actually seeks right now. For one thing, the Bush administration is in active pursuit of a weaker dollar against China's currency, which would probably encourage similar changes with other Asian competitors. The goal would be making American exports there less expensive, and imports more expensive, helping to spur an industrial revival at home. And though there are high risks if the dollar were to continue to fall rapidly against the euro and the British pound, the United States is generally seen as hoping for the economic gains delivered by a lower dollar as American exports become more competitive against planes, machinery and other goods produced in Europe.

"Paulson has got to like a euro that's appreciating in value," said C. Fred Bergsten, director of the Peterson Institute of International Economics and a longtime advocate of a weak dollar. "He came into office facing an overall American trade deficit that is close to $1 trillion a year. He's got to welcome something that shows the trade deficit likely to go down."

Still, the fluctuations of the dollar have unsettled many in the world of finance this last week, when it sagged about 2 percent against the euro, bringing its decline this year to more than 12 percent. On Friday, the dollar fell to 1.33 euros; it dropped against the British pound as well, with it now taking $1.98 to buy a pound.

By contrast, against the Japanese currency, the dollar has slipped much less, closing Friday at 115.35 yen.

In Europe, the French finance minister, Thierry Breton, has expressed concern about a weakening dollar, noting that exports have helped Europe's recent economic recovery.

But other European finance ministers said this week that at least for now, gains in the euro do not appear to threaten prospects for growth in Europe.

The gyrations of the dollar highlight the sensitivity of Mr. Paulson's role at this particular moment, as he prepares for his biggest overseas trip so far as Treasury chief: a veritable expedition to China, accompanied by five cabinet members and by Ben S. Bernanke, the Federal Reserve chairman.

The goal of the trip, which starts Dec. 14, is to engage China on a range of economic issues but most particularly to press Beijing to let its currency, the yuan, rise in value against the dollar. That would help, American officials hope, to narrow a Chinese trade surplus with the United States that soared past $200 billion last year.

As a former investment banker who lived and breathed the logic of international markets for decades at Goldman Sachs, Mr. Paulson is trying to engineer a kind of correction in which China would cease what American officials say have been currency manipulations aimed at pumping out exports.

Against the background of the rise of the euro, the China trip illustrates the three-cornered complexities of the world economy and of Mr. Paulson's dollar diplomacy. Suddenly with a declining dollar, Europeans are stepping up their purchases of American goods, and it has become more expensive for Americans to visit Europe as tourists or business officials. American investors overseas, meanwhile, are enjoying the extra kick that a falling dollar delivers on their foreign profits.

The decline of the dollar against the euro, while the dollar-to-yuan ration remains stable, also has the effect of increasing tensions between Europe and China. European businesses, like their American counterparts, are already upset about cheap Chinese exports to Europe. Now these goods are even cheaper because the yuan is declining against the euro, pulled down by the dollar.

The Chinese, meanwhile, are likely to get more nervous than ever that a decline in the dollar against the yuan will damp their exports and reduce the value of their dollar-denominated assets, putting pressure on Chinese banks that are holding those assets.

China has resisted American appeals to let the yuan rise in value, arguing that China is already undertaking painful economic reforms -- writing off bad loans and closing money-losing state enterprises -- and cannot afford further social disturbance brought on by new difficulties in exports.

"We are committed to a market-based exchange-rate mechanism," said a senior Chinese official, speaking anonymously under Chinese ground rules. "But we will do it in a responsible way -- responsible to the health of our country, the United States, Asia, and beyond."

Part of the reason for the dollar sell-off, many analysts say, has been a recent sense of disappointment about the American economy even as Europe has picked up some momentum, prompting traders to look for more promising investments in markets overseas. The prospect of higher interest rates in Europe while rates remain stuck or drift lower in the United States has also drawn funds out of the dollar.

Some analysts also say that the dollar decline has been partly seasonal -- that there is always a decline in investment in dollar-denominated investments at the end of the year, despite the huge need by the United States to finance its current-account and budget deficits.

"There's always a little seasonal weakening of the dollar at year-end," said Robert Sinche, head of global currency research and strategy at Bank of America. "With its large imbalances, the United States needs to attract capital every day. Capital flows tend to slow down at this time, because people go on holidays or are closing their books."

"It's like musical chairs," he added. "When the music stops, those who have deficits are going to suffer."

If American policy makers are pleased about the prospect of the dollar's providing a kick for exports, they fear a dollar falling so far and fast that it fuels inflation in the United States. Higher inflation might force the Federal Reserve, which is still concerned that price increases are outside its comfort zone, to raise interest rates, slowing the American economy further.

"The fall of the dollar has both benefits and risks," said Nouriel Roubini, chairman of Roubini Global Economics. "The danger is that the willingness of foreign investors to buy dollars is shrinking. If the fall of the dollar accelerates, investors could start dumping U.S. assets, and you'll get a hard landing for the economy."

The fear of a loss in the value of its assets is a factor in China's rebuffing American imprecations to let its currency float more flexibly against the dollar, many analysts say. China has amassed $1 trillion in foreign exchange reserves after years of trade surpluses with Europe and the United States.

About $700 billion of those reserves are said by many economists to be in dollars. One reason China does not want a cheaper dollar against the yuan, these economists say, is that the value of its holdings would decrease, limiting the lending ability of its banks. Nevertheless, Mr. Paulson’s trip is organized around the principle that China needs a bit of a weaker dollar now because its current path of binging on exports will overheat the Chinese economy -- it is growing at 10 percent a year -- and cause a collapse sooner or later if it is not cooled off slowly.

The dollar has declined about 5 percent against the yuan in the last year and a half, but American policy makers say that the yuan is still artificially low. That is also the view of leading members of Congress, especially Rep. Nancy Pelosi, the California Democrat who becomes the speaker of the House in January.

Not all economists agree that am upward revaluation of the yuan will benefit the American economy. They note that cheap exports from China are desired by American consumers, and that Chinese imports have not led to rising unemployment, as critics charge.

"Let's say China revalues by 10 percent overnight," Mr. Sinche said. "Then prices at Wal-Mart go up by 10 percent. So we then see worse inflation numbers, the Fed tightens monetary policies, and we end up with higher inflation, higher prices, and higher interest rates. Remind me again why that's what we want."
Goldilox
(12/01/2006; 23:24:49 MDT - Msg ID: 149917)
DOW/GOLD ratio
My Favorite example!

DOW 2000 = 12K = 45 oz Au
DOW 2006 = 12K = 18 oz Au

Like I explained to another motorcyclist yesterday, he could have sold $12K of DOW index in 2000, traded the paper for gold and held it (with NO interest, by golly), and bought that paper all back today for the same $12K- along with a BRAND SPANKING NEW TOP-OF-THE-LINE MOTORCYCLE!

Or a free car, for the more cager inclined . . .

I think it's starting to sink in!
Druid
(12/01/2006; 23:28:52 MDT - Msg ID: 149918)
GERMANY GOES BANKRUPT TOO!
http://www.gold-eagle.com/editorials_05/hennecke112806.html


"Regular readers of websites like this one will already be well informed of the onrushing financial collapse and national bankruptcy of the United States, as this topic is receiving ample coverage nowadays from an abundance of writers and economists, including unmistakable warnings from many former senior government officials and central bankers as well as from the very institutions that are presently in charge, such as the International Monetary Fund, the Bank of International Settlements or the US Federal Reserve. So I will save myself repeating the obvious here, suffice to say that anyone who is new to the real world and would scoff at such notion may want to start educating himself/herself by reading some introductory books such as Bill Bonner's 'Empire of Debt', or browse the Federal Reserve Bank of St. Louis' report 'Is the United States Bankrupt?' published earlier this year.

What a large number of even the more educated US Dollar bear-and US financial crisis expectation camp however do NOT seem to be aware of is the global nature of the problem. It is completely wrong to assume, for example, that the Euro or the British Pound are inherently 'hard' and healthy currencies that would provide protection from a plunging US Dollar. It is not known by most, that in fact the majority of the Western 'developed' world and not just the United States is facing national bankruptcy shortly ahead, and that this has been officially predicted by the world's leading rating agency, Standard & Poor's."


Druid: An excellent read.

Belgian
(12/02/2006; 02:08:11 MDT - Msg ID: 149919)
FLOATING CURRENCIES REGIME :
Let there be FREEGOLD and all will cooperate on re-harmonization of the floating currency regime. TINA.
Cometose
(12/02/2006; 07:38:26 MDT - Msg ID: 149920)
COT
http://www.cftc.gov/dea/futures/deacmxsf.htmThe commercials in the Metals this week
in
Silver were net short 1400 contracts

Copper were net long 1400 contracts and

GOld were net long 1200 contracts
Goldilox
(12/02/2006; 09:51:38 MDT - Msg ID: 149921)
Same Old, Same Old
http://www.commondreams.org/views06/1201-28.htmsnip:

House Speaker-to-be Nancy Pelosi ought to find a quiet place where she can sit down and recount the election. She was not chosen by her friends in Silicon Valley or by the friendly investment bankers on both coasts. They no doubt contributed generously to the party's candidates. But her House majority was made possible by millions of fed-up Americans ready to gamble that Democrats might try something new--on Iraq, on the soggy economy for working people and other grievances.

So why does Pelosi begin the education of her freshman members with a seminar on Rubinomics? Robert Rubin, the Citigroup executive and former Treasury secretary, will appear solo next week before the party caucus to explain the economy. Pelosi has scheduled another caucus briefing on Iraq, but that includes five expert voices of varying viewpoints. Rubin gets the stage to himself.

When labor officials heard about this, they asked to be included since they have very different ideas about what Democrats need to do in behalf of struggling workers and middle-class families. Pelosi decided against it. This session, her spokesman explains, is only about "fiscal responsibility," not globalization and trade, not the deterioration of wages and disappearing jobs. Yet those subjects are sure to come up for discussion. Rubin gets to preach his "free trade" dogma with no one present to rebut his facts and theories.

A fundamental debate is growing within the party around these economic issues and Pelosi knows this. It is seriously unwise for this new Speaker to leave an impression she has already chosen sides. The interpretation by Washington insiders will be: Pelosi is "safe;" she is not going to threaten Rubin's Wall Street orthodoxy. Far-flung voters will begin to conclude Democrats are the same-old, same-old money party.
This is the sort of party "unity" that can earn Pelosi a very short honeymoon.

-Goldilox

Not the least bit surprising to those who understand that all the election did is bring in the "B" squad of the same duopolist party. And we laughed at the USSR, who only presented "party members" at the ballot. The laugh's on us - hahaha!

As Bill and Ted would say, "Party on, Dude".

Or, as they remind members of 12-step groups, nothing changes if "nothing changes".
Goldilox
(12/02/2006; 10:00:30 MDT - Msg ID: 149922)
On Calling Bullshit, by Dan Froomkin
http://www.commondreams.org/views06/1201-35.htmsnip:

Mainstream-media political journalism is in danger of becoming increasingly irrelevant, but not because of the Internet, or even Comedy Central. The threat comes from inside. It comes from journalists being afraid to do what journalists were put on this green earth to do.

What is it about Jon Stewart and Stephen Colbert that makes them so refreshing and attractive to a wide variety of viewers (including those so-important younger ones)? I would argue that, more than anything else, it is that they enthusiastically call bullshit.

Calling bullshit, of course, used to be central to journalism as well as to comedy. And we happen to be in a period in our history in which the substance in question is running particularly deep. The relentless spinning is enough to make anyone dizzy, and some of our most important political battles are about competing views of reality more than they are about policy choices. Calling bullshit has never been more vital to our democracy.

It also resonates with readers and viewers a lot more than passionless stenography. I'm convinced that my enthusiasm for calling bullshit is the main reason for the considerable success of my White House Briefing column, which has turned into a significant traffic-driver for The Washington Post's Web site.

I'm not sure why calling bullshit has gone out of vogue in so many newsrooms � why, in fact, it's so often consciously avoided. There are lots of possible reasons. There's the increased corporate stultification of our industry, to the point where rocking the boat is seen as threatening rather than invigorating. There's the intense pressure to maintain access to insider sources, even as those sources become ridiculously unrevealing and oversensitive. There's the fear of being labeled partisan if one's bullshit-calling isn't meted out in precisely equal increments along the political spectrum.

The return of Democrats to political power and relevancy gives us the opportunity to call bullshit in a more bipartisan manner, which is certainly healthy. But there are different kinds of bullshit. Republican political leaders these past six years have built up a massive, unprecedented credibility deficit, such that even their most straightforward assertions invite close bullshit inspection. By contrast, Democratic bullshit tends to center more around hypocrisy and political cowardice. Trying to find equivalency between the two would still be a mistake � and could lead to catty, inside-baseball gotcha journalism rather than genuine bullshit-calling.

If mainstream-media political journalists don't start calling bullshit more often, then we do risk losing our primacy � if not to the comedians then to the bloggers.

But here's the good news for you newsroom managers wringing your hands over new technologies and the loss of younger audiences: Because the Internet so values calling bullshit, you are sitting on an as-yet largely untapped gold mine. I still believe that no one is fundamentally more capable of first-rate bullshit-calling than a well-informed beat reporter - whatever their beat. We just need to get the editors, or the corporate culture, or the self-censorship � or whatever it is � out of the way.

� 2006 by the President and Fellows of Harvard College

-Goldilox

That's one journalistic failing that's rarely seen around this castle, but then, most of us see through the phoniness of Ollie North, "Journalist", pretty well.
Goldilox
(12/02/2006; 10:08:32 MDT - Msg ID: 149923)
Wary of Monday
http://www.urbansurvival.com/week.htmsnip:

Our friends the time monks at www.halfpasthuman.com told their subscribers that they are sort of expecting a big news event tomorrow which will impact markets Monday and Tuesday of this coming week, and to put it politely, we almost see the outline of a "perfect financial storm" shaping up for early in the week.

Not only has the Midwest just been slammed with a major winter storm that is blamed for at least 10-deaths so far, but we now expect the seriousness of winter to slam into upstate New York on Sunday. The New York City area looks to be spared any direct impact, but the weather doesn't have to close streets and businesses to make a mess of things; it need only tone down the holiday spirit of spending.

Other factors may weigh on the market in the coming week as well. It's the time of year when seasonal tax-selling takes place. Investors want to lock in profits (or losses) to derive the best possible tax position by year end. As Humberto Cruz writes in the (LA) Daily News: "All this maneuvering is part of a year-end tax planning ritual that regularly keeps hundreds, if not thousands, of dollars in our pockets."

Not that it ends there. Another factor which is weighing on the market is the dropping value of the dollar, which from an economist's perspective, represents something of an international, or "hot money" paradox. The two titanic forces at play here are the cooling prospects for the US economy, which in a US-centric world would drive the stock market's down versus the view that equities in American companies represent ownership of a marketing niche, such that it becomes relatively cheaper for foreigners (think Asian) to buy US assets.

When you read reports like "Gold his 16-week high on weak dollar, silver firms" you have to remember that gold can go up valued in US currency at the same time it is going down valued in some other currency. Such is the difficulty of predicting market moves, although by reckoning long term puts are extremely cheap and I am seriously tempted to wade in to some long term positions. Some gamblers never learn? For now, I've managed to resist.

One reason is "Bart's" work over at NowandFutures.com which offers a recreation of the Fed's gone-since-March-06 M-3, the broadest measure of the money supply, By his figuring the annual rate of change of M3 is running just about 10%, underscoring out long held belief that since 9/11 which coincided with the first leg down of the Second Depression, but misdirected public attention from that fact, the central banksters have been flooding the markets with liquidity on the theory that deflation can be exactly and precisely counteracted by driving offsetting inflation into the system.

Thus, when M-3 disappeared in March for no legitimate reason, the Fed, in my view, tipped its hand that for sure, that was the game. And, it has worked out for a while which is a good thing, but it all ends badly before the end of 2007 due to the dollars now obviously developing big leg down. We'll explore some of the implications of this for our Peoplenomics subscribers this week in our Annual Forecast issue, but you should see the game clear enough to draw your own conclusions. The worry about money is that everyone sobers up at the same time and realizes the jig is up.
Goldilox
(12/02/2006; 10:12:55 MDT - Msg ID: 149924)
OPEC sends conflicting signal on need for deeper cut
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/02/AR2006120200311.htmlsnip:

CAIRO (Reuters) - OPEC ministers sent conflicting signals on Saturday on whether the group needed to reduce oil production further to bring markets back into equilibrium.

Most ministers in OPEC, which pumps more than a third of the world's oil, are concerned about swelling fuel inventories but others seem to feel the group would be hard-pressed to justify fresh supply curbs with oil prices firmly above $60 a barrel.

Libya's top energy official said markets seemed to be nearing a balance and he did not feel there was a need for OPEC to add to the 1.2 million barrel per day cuts agreed in October.

"For me, it doesn't look at this moment that a cut is necessary, but we have to see," Shokri Ghanem told reporters.

But influential Saudi Oil Minister Ali al-Naimi reiterated that the market was out of balance because of high stockpiles and that 100 million barrels should be removed.

Naimi, speaking in Cairo ahead of a meeting of Arab exporters, did not say if a deeper OPEC cut was needed to remove any overhang or if the group should carry on with existing cuts.

He previously said the Organization of the Petroleum Exporting Countries will need to tighten supply when it meets on December 14 in Nigeria if existing curbs did not remove the slack.

Qatari Energy Minister Abdullah bin Hamad al-Attiyah agreed with the Saudi assessment that inventories were "very high," but also did not say whether deeper cuts were needed in December.

Since OPEC agreed its cut, U.S. crude stockpiles have risen by about five million barrels to 340 million, U.S. data shows.

OPEC President Edmund Daukoru said on Friday the group would probably trim again, but the size of the reduction would depend on prices and inventory levels. Venezuela's oil minister has said Caracas could propose a further cut of 500,000 bpd.

WATCHING PRICES

Iran's oil minister was quoted by student news agency ISNA on Saturday as saying OPEC may cut output again if oil prices fell. "There is such a possibility if the prices fall," Kazem Vaziri-Hamaneh said. "This cannot be predicted right now."

-Goldilox

"First you say you will, and then you won't.
Then you say you do, and then you don't.
You're undecided now, so what're we gonna do?"
USAGOLD / Centennial Precious Metals, Inc.
(12/02/2006; 10:58:41 MDT - Msg ID: 149925)
A solid combo of assets and info especially for those who are taking their first step...
http://www.usagold.com/gold/special/starter.html

gold ownership starter kit
Chris Powell
(12/02/2006; 11:50:17 MDT - Msg ID: 149926)
Aside from France, euro nations don't mind dollar's fall
http://www.baltimoresun.com/business/investing/bal-bz.dollar02dec02,0,414205.story?track=rssDollar Falls Quietly;
Aside from France,
Euro Nations Seem
Little Concerned

By the Associated Press
via Baltimore Sun
Saturday, December 2, 2006

BERLIN -- With the European economy on the upswing, companies and governments are shrugging off the dollar's renewed slide against the euro this week -- a phenomenon once dreaded as potential poison for the continent's many exporters. Companies appear to have made their peace with a stronger currency for the moment, especially in export champion Germany, which is helped by stronger growth at home, currency hedging, and increasingly globalized production practices.

The euro reached $1.3335 in European trading yesterday, up from $1.3250 in New York late Thursday, a 20-month high. The pound hit $1.9805, its strongest close since September 1992, with analysts saying the British currency could reach $2 by the end of the year.

A stronger euro makes American goods cheaper in Europe while making European exports more expensive in the U.S. But European policymakers -- except for the French -- have issued a collective yawn.

"I am not concerned," said Dutch central bank head Nout Wellink. Bernd Pfaffenbach, Germany's deputy economics minister, said the stronger euro "reflects the strength of the European economy" -- but conceded it was not particularly helpful for exports.

Jean-Claude Trichet, president of the European Central Bank, who decried the dollar's slide in 2004 as "sudden and brutal," did not bother to try to talk the euro down. He declined to comment on the exchange rate after a speech Wednesday.

Reasons for the calm are several. Many companies have at least some production in the United States, eliminating exchange rate issues for products sold in the world's largest economy, while others have limited their exposure to currency swings through complex hedging deals.

Stronger economic growth, with the countries that use the euro expected to see expansion of 2.6 percent this year over 1.4 percent in 2005, reduces the pain as people remember that predictions of doom did not come true in December 2004, when the euro hit its record $1.3667.

"People have gotten used to the stronger euro," said economist Christian Dreger at the German Institute for Economic Research in Berlin. "That is the difference from two years ago."

He pointed out that in late 2004, the dollar had completed a dizzying two-year slide from its abnormally high levels in 2000-2002, while the current drop is relatively modest, with the euro rising from levels of about $1.25 for much of the year.

The stronger euro also reduces inflation by making imports cheaper, Dreger added. That in turn reduces the need for the European Central Bank to continue with interest rate increases that fight inflation but can dampen growth.

In any case, European policymakers can do little about the exchange rate except live with it, since rates are determined on the world's trillion-dollar-a-day currency market, blown by the whims of fear and greed. Or, as U.S. Treasury Secretary John B. Connally once famously put it, the dollar is "our currency and your problem."

Economists say the large U.S. trade and budget deficits are putting long-term pressure on the dollar. The most recent dollar slide accelerated after Trichet's comments in October that the European Central Bank might need to raise its key rate from 3.25 percent to combat inflationary pressures from an increasing money supply.

At the same time, expectations have grown that the Federal Reserve may cut interest rates sometime next year. Higher rates in Europe relative to the United States drive the euro up by increasing the yield on some euro investments.
Camel
(12/02/2006; 13:43:01 MDT - Msg ID: 149927)
Middle class gutted !
http://news.yahoo.com/s/afp/20061201/bs_afp/chinaworldbankpoverty_061201112518
"The average American drove 13,657 miles last year, down slightly from 13,711 miles in 2004"

Middle class gutted? ...... good.... they are all obese anyway ..... let them live on a dollar a day for awhile and see how they like it.

Snip:

Overall, however, the World Bank characterized China's economic policies as a success story, with 70 million people being lifted out of poverty in just three years.

In the period from 2001 to 2004, China reduced the number of people living in poverty -- defined as spending less than a dollar a day -- from 16 percent to 10 percent, according to the World Bank.

mikal
(12/02/2006; 14:38:38 MDT - Msg ID: 149928)
Disrespecting, disqualifying diversity
http://www.lewrockwell.com/hein/hein148.htmlThe Abnormality of Unity - Paul Hein - December 2, 2006
Excerpts: "In unity, as we all know, there is strength. But strength for whom? Well, the unifiers, of course. When a collection of squabbling states become united"
[The historical record is weighted towards failure when gratuitous unification replaces cooperation and coexistance]

"The subjugation of people to the procession of rulers has traditionally been accomplished by violence � the use of which is sanctioned by governments for their own purposes. A simple ploy by which governments gain the loyalty of their subjects is by assuring them that without government protection, they will be seized and ruled by some other group with a different language and different � and repellant, of course � customs.

The picture is different today. One might almost conclude that military skirmishes that so fill our airwaves constitute a diversion, a distraction from the real conflict, which is: who shall issue the money for the unified world? Make no mistake: the intention to bring more and more people under a single government's control � the One World Government � is the desire of ambitious men. If it is good to govern 50 states, why not 100? And it can be accomplished without firing a shot, by manipulation of the currency. First it was the dollar vs. the yen; the dollar won that battle. Now the dollar battles the euro, and is doing badly. But the yuan has come on strong, and may overwhelm both. Perhaps, in the background, the rupee is waiting its turn. The winner will be the banking system whose fiat survives longest.

The words of President James A. Garfield shed light: "Whoever controls the volume of money in any country is absolute master of all industry and commerce." Master, in other words, of everyone, directly or indirectly.

Have you heard of the Amero? It has been proposed as a new currency for Canada, the United States, and Mexico. Who made the proposal? Robert Pastor, a member of the Council on Foreign Relations, and author of "Toward A North American Community." The U.S. Congress would be replaced � not by nothing, unfortunately!!! � but by something even worse: a "North American Parliamentary Group." And who would control the "volume of money" in this union? The creators and issuers of the Amero. It would enter the ring to do battle with the yuan and the euro. The winner would be "absolute master of all industry and commerce" in most of the industrialized world. The centralization of power would have taken a giant step toward totality."
Bankers and financial barons themselves have gone on record admitting these very things. Most methods to inveigle political power usually originate from these players. Gold's importance is as much insurance from their
molestations as it is a strategic high ground to be fought over.
Topaz
(12/02/2006; 14:44:46 MDT - Msg ID: 149929)
Buck, Bond, gold etc.
http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWThe compound $/Bond took a value hit late last week and this was reflected as a pop in Oil.
Gold, as mentioned earlier dogged it visavee currencies.
Comex finally got around to putting up a delivery notice ...ntr apart from Ag a bit slow out this month, Good physical volume to date should support the $PoG/S through next week.
@ Chris P.
"Apart from California, US states don't mind dollars fall"
We'd dismiss the above statement as being but 1 of 50odd of the collective.
I wouldn't dis France re. Eurozone so readily though.

Perhaps the Dollars last 12 Mth holding pattern action was to allow those parties adversely affected by a precipitous decline in Buck, time to get hedged prior to act 2 (now)?
Liberty Head
(12/02/2006; 15:01:36 MDT - Msg ID: 149930)
Except We Don't Grow Any Bananas

"Banana republic is a pejorative term for a country with an extremely corrupt government, a primitive economy and its political environment controlled by a major power."

Best Wishes


Ten Bears
(12/02/2006; 15:09:20 MDT - Msg ID: 149931)
@ Camel
http://news.yahoo.com/s/afp/20061201/bs_afp/chinaworldbankpoverty_061201112518#: 149927 exhibits some disparity in interpretation from source document quoted below.

http://news.yahoo.com/s/afp/20061201/bs_afp/chinaworldbankpoverty_061201112518

China's poor getting poorer and more dispersed: World Bank
by Peter Harmsen Fri Dec 1, 6:25 AM ET

"As China's roaring economy runs ahead at breakneck speed, its poor are getting even poorer, more dispersed and harder to reach, a ranking World Bank official said.
China's leadership is increasingly worried about a widening income gap brought about by market reforms which have rewarded people with skills and personal connections, and punished those without."
Ten Bears
(12/02/2006; 15:22:01 MDT - Msg ID: 149932)
LITTLE BIG BUBBLES
http://www.financialsense.com/editorials/daily/2006/1202.htmlby Bill Bonner

Snippets:
The derivatives market has reached a face value of $480 trillion...30 times the size of the U.S. economy...and 12 times the size of the entire world economy.

In this late, degenerate imperial age, no one gets richer faster than hedge fund managers.

Every penny had to come from clients� money. Investors in leading hedge funds must be among the richest, smartest people in the world. Still, with no gun to their heads, they turned over billions of dollars� worth of earnings to slick hedge fund promoters.

The twitty quants at big investment firms invent the complex derivative contracts...give them a jolt of juice...and then the abominations spring to life. The next thing you know, the hedge fund whizzes are building big houses in Greenwich, Connecticut - and there are billions of dollars...no trillions...in CPDO and other contracts, in the hands of buyers who don't quite understand the elaborate equations behind the contract...and (here we are just guessing) who will be surprised when they find out.

CME is where futures and derivatives trade. The stock came out three years ago at $39. Since then it's gone up 14 times, to more than $550. In New York, meanwhile, the NYSE gets half its daily volume from hedge fund trading.

Someday - perhaps someday soon - a peak in the credit cycle will come. The mother of all bubbles will finally pop and then the �little big bubbles� in the financial industry will pop. The Dow will come down - the dollar too. Junk bonds will sink. Builders in Greenwich will notice that their phones aren't ringing as often. NYX and CME will crash. And 5,000 hedge fund managers will be on the streets...looking for the next big thing. When will it happen? How? We don't know. But our guess is that when the history of this bubble cycle is finally written, derivatives will get a special �tipping point� place...like the Hindenburg in the history of the Zeppelin business...or the Little Big Horn in the life of George Armstrong Custer.

Bill Bonner... on target!
Topaz
(12/02/2006; 16:43:20 MDT - Msg ID: 149933)
Au:Ag.
http://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339Those of us with little more than a cursory interest in Fiat currency valuations of PM's might like to watch the Ratio this coming week as a technical exercise.
The RSI indicates a reversal is imminent however, in the past, this has lingered in overbought for several weeks (see Chart).
I'd be inclined to think "lingering" might well be in the cards this time through.
TownCrier
(12/02/2006; 16:46:12 MDT - Msg ID: 149934)
Chartists see gold and silver scaling new peaks
http://today.reuters.co.uk/news/articleinvesting.aspx?type=fundsNews&storyID=2006-12-01T135637Z_01_NOA150049_RTRUKOC_0_MARKETS-GOLD.xml&WTmodLoc=HP-C8-Funds-2LONDON (Reuters) - Gold is expected to close the year on a stronger note and has potential to set new highs in 2007, but the market will continue to remain choppy in the near term, chartists said on Friday.

"I think we are going to go back initially to the $690-an-ounce area and at some stage to revisit that peak (set) in May this year," said independent metals analyst Cliff Green.

"There would still be plenty of short-term dips in this market," he said, but added that any near-term weakness should be aggressively bought.

...Gold rallied to a 26-year high of $730 in mid-May as funds poured money into commodities amid worries about rising energy costs, tensions in the Middle East and uncertainties in the dollar's outlook.

It hit an all-time high of $850 an ounce in January 1980.

Robin Wilkin, technical analyst at J.P. Morgan, said gold's broad trading range of $550-$700 in 2006 was going to give way for a move towards the record high.

"(But) half of the problem is that a lot of gamma trading is going on. So every time it rallies, all the options guys are just selling loads and it's dampening the effect," he added.

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

Despite thousands of years of shining history, gold remains the "best-kept investment secret" among traditional investors. Meaning, most of them don't quite "get it" just yet.

They will.

R.
Camel
(12/02/2006; 17:10:36 MDT - Msg ID: 149935)
Ten Bears

I agree . The author of the article seems to be interpreting the figures two different ways . I think what he is trying to say is that while the absolute numbers of these very poor people has substantially decreased , the ones that are left are poorer than before.
Druid
(12/02/2006; 18:10:51 MDT - Msg ID: 149936)
Henry Paulson and the Five Circles of Economic Hell
http://www.commondreams.org/views06/0705-30.htm
"In his book, The Divine Comedy: Inferno, Dante describes successive circles of Hell intended for successively villainous sinners. The higher circles punish only minor sins: gluttony; lust; avarice. The deeper circles are reserved for those who have committed more egregious sins: adultery; usury; betrayal. It is the archetypal rendering of the Medieval taxonomy of Punishment.

Our modern world has its own circles of hell. But, as befits a secular society, our schema is tailored to our modern, secular obsession: money. It is just as surely progressive as Dante's Inferno in the depths to which the sinner must descend, but, without the moral freighting that only religion can provide, its punishments are clinical, mundane. They bespeak not shades of Eternal Damnation but, rather, the stages of National Decline.

Henry Paulson, Bush's new Secretary of the Treasury, must soon begin his own dutiful descent into the Depths, if not for his own sins, then as a witness, a voyeur for the sins of his economic brethren. He will quickly pass beyond the stations of Bush's economic transgressions and into the very center of Tribulation. There, in Dante's world, Satan himself lurked. In today's world � but wait! Follow me through Paulson's Ordeal to see what perilous Fate awaits him at the Innermost Circle of Economic Hell."


Druid: An excellent refresher as our Treasury Secretary heads off to China.

Ten Bears
(12/02/2006; 20:06:01 MDT - Msg ID: 149937)
And now for something completely different
http://www.commondreams.org/views06/1202-23.htmHampering the Efforts of Corporate Crime Reporting
by Ralph Nader

Snippets:
It is clear, in the midst of a seven year corporate financial crime wave, that the business moguls and their academic apologists, who make up the Committee on Capital Markets Regulation (CCMG) have no sense of irony. It is not enough that the CCMG's new report is recommending less law enforcement and accountability after years of Republican regimes addicted to de-regulation. The Big Boys want to make lower standards overseas an argument for starting a race to the bottom, in order for the U.S. financial markets to remain "competitive."

1. Limit how and when state enforcement agencies can pursue cases of financial fraud on investors.
2. Governments should sue the corporations themselves only as a last resort
3. Make it more difficult to convict defendants
4. Weaken the post-Enron Sarbanes-Oxley law
5. Stricter cost-benefit analysis to any new SEC rules
6. In a broader context, CCMG opposes giving shareholders the power to vote on these gargantuan executive compensation packages that often amount to looting company assets
7. Either cap liability for auditors or give them outright immunity.

"If you take every single step on their list," declared Barbara Roper, director of investor protection at the Consumer Federation of America, "you would have made it significantly more difficult to hold corporate criminals accountable for their crimes."

These corporate criminals have looted or drained trillions of dollars from workers, their pensions and millions of investors since 2000. Not 5 cents on the dollar have been recovered for their victims. Many of these recoveries have come through private litigation - investor class actions mostly - which the Big Boys want to restrict even more than their restrictive victory -- through the Securities Act of 1995. The more crimes, the more they drive for privileges and immunities from the rule of law.

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."
Frederic Bastiat

Chris Powell
(12/02/2006; 20:38:23 MDT - Msg ID: 149938)
Market retreat will force shady deals 'out of the woodwork'
http://observer.guardian.co.uk/business/story/0,,1962449,00.htmlPlunging Dollar Will Set
World Markets Reeling

Heather Stewart
The Observer, London
Sunday, December 3, 2006

The slowdown in the US economy, which has sent the dollar into freefall over the past fortnight, will have devastating knock-on effects in markets around the world, analysts warn.

As the US slows and consumers in the world's biggest economy feel the buying power of the dollar in their pocket declining, global growth will be hit hard, economists say. The greenback took yet another turn for the worse on Friday, after a survey of the US manufacturing sector showed output declining for the first time in more than three years.

Wall Street is now betting that Federal Reserve chairman Ben Bernanke will slash interest rates to stave off a recession. The dollar ended the week at $1.98 against the pound and $1.32 to the euro, but analysts say there is further weakness to come.

"I think the dollar's going to hell in a handbag," said David Bloom, currency strategist at HSBC. "The market is starting to think that the US is going from a soft landing to a hard landing."

Some analysts have argued that a more balanced global economy, with strong growth in Asia and Europe, means the impact of a US slowdown will be limited. But Stephen Roach, chief economist at Morgan Stanley, believes China -- and in turn the rest of Asia -- will follow.

"America is China's largest export market, accounting for 21 percent of its total exports over the past five years," he said, adding that economies such as Japan, Korea, and Taiwan, which export directly to the US but also sell components to China that are assembled before being sent on to the US, will be hit.

Eurozone finance ministers have expressed alarm at the strength of the euro against the dollar, fearing that their exporters will suffer; but the European Central Bank is expected to push up interest rates by another quarter-point on Thursday, as it frets about inflation.

Despite increasing signs of weakening demand in the world's biggest economy, ECB chairman Jean-Claude Trichet has insisted the 12-member single currency zone can shrug off a US slowdown.

"The ECB's in a complete state of denial," said Paul Mortimer-Lee, global head of market economics at BNP Paribas. "Quite a lot depends on how Trichet plays it at the ECB press conference next week. They're hankering after raising rates again next year."

Wall Street will also be watching Bernanke for signals of a change. The Fed has left rates on hold at 5.25 percent since the summer, after increasing them 17 times over the previous two years as the US economy recovered from the post-dot-com downturn. Bernanke sought to reassure the currency markets last week by stressing that the Fed is still concerned about inflation, but his words failed to stem the selloff. "It's as though the markets are saying, 'you central bankers are worrying about inflation, we're worrying about the reality of life,'" said Bloom.

Mortimer-Lee said the Fed would wait for definitive evidence before making a move. "At the end of the tightening cycle, you know you've got an inflation problem, and it's only when the evidence is overwhelming that you move." However, he believes that evidence will come soon: with investment in construction already falling as the housing boom turns to bust, BNP Paribas is predicting that a million jobs will be lost in the building industry alone over the coming 18 months.

Equity markets are already wobbling as investors weigh the cost of a US slowdown. Graham Turner of GFC Economics said a shake-out would raise questions about this year's merger frenzy.

"We have had an absolute monster year in terms of leveraged transactions," he said. "A lot of them looked quite dubious in terms of their economic value. Once the market starts to retreat, all the suspect things that went on come out of the woodwork."
Chris Powell
(12/02/2006; 20:40:21 MDT - Msg ID: 149939)
Dollar's fall aids London's drive for financial supremacy
http://business.timesonline.co.uk/article/0,,8209-2483663,00.htmlBy David Smith
The Times, London
Sunday, December 3, 2006

The dollar's fall, which accelerated last week, will further boost the City of London in its battle with New York for supremacy in the financial markets.

London is already the biggest market for foreign exchange, foreign equities, international insurance, and international bank lending. This year it has handled a third more market listings than New York, $40 billion (�20 billion) versus $30 billion.

Analysts believe that worries about the dollar's stability will add to London's advantages, including its lighter regulation in comparison with America's Sarbanes-Oxley rules.

Sterling closed at a 14-year high of $1.98 on Friday after weak American growth figures. It is expected to hit $2 in days.

The strong pound is a headache for Britain's exporters, but it is likely to reinforce international confidence in the City.

The prospect of a further dollar fall could undermine the willingness of investors to put their funds into American assets.

It comes as figures from the Centre for Economic and Business Research point to record levels of employment in the Square Mile and Canary Wharf.

There are currently 335,000 City-type jobs in London compared with 324,000 last year.

Meanwhile, the lord mayor of London, John Stuttard, will tomorrow announce an international marketing push on behalf of City companies. He will unveil plans to lead an unprecedented blitz of visits to foreign financial centres over the next six months.

The campaign will start with a visit to Kuwait in the middle of this month.
Ten Bears
(12/02/2006; 20:48:04 MDT - Msg ID: 149940)
@ Druid #: 149936
Thanks for the reference� I do believe that there is at least one, and probably several PHD dissertations in the information exchanged at this site in the last few years.
Goldilox
(12/03/2006; 06:20:35 MDT - Msg ID: 149941)
Sales slide adds to Ford pressure
http://news.bbc.co.uk/2/hi/business/6200526.stmsnip:

The pressure on Ford bosses has intensified after the carmaker suffered a 10% fall in US sales last month.
The drop marks an end to a temporary upswing in Ford's performance in its home market, which saw its sales rise in both September and October.

In contrast, rival US car giant General Motors saw total sales increase 6%.

Ford and GM have struggled in the face of competition from more efficient foreign producers like Toyota, whose US sales rose 16% last month.

'Disappointing'

Toyota outsold Ford last month for the second time in the past six months.

Ford analyst George Pipas said its performance had been "disappointing".

The firm is trying to overhaul its business structure to save costs and channel resources into manufacturing more competitive models.


The pressure is on Ford's new boss Alan Mulally to deliver

It emerged recently that 38,000 staff had accepted voluntary redundancy.

But in a fresh setback, Ford saw its car sales fall 3% last month while overall sales - including trucks - dropped 10%.

The unexpected decline reflected reduced deliveries to business customers, Ford said.

More encouragingly, retail sales to individual buyers rose due to strong demand for mid-size sedans such as the Ford Fusion and Lincoln MKZ.

Tired models?

Ford is focusing its attention on new models, with 85% of its existing stock going on the market for the first time next year.

The company is reducing output in response to the fall in demand.

In the first three months of 2007, it plans to produce 750,000 vehicles, 126,000 fewer than in the corresponding period this year.

Ford and GM have been criticised for their over-reliance on old models, including several sports utility vehicle (SUV) brands, which have lost their appeal to US buyers.

GM said sales of new SUV models such as the Chevrolet Tahoe had been extremely strong last month. But although the world's largest carmaker saw total sales rise 5.8%, its car sales actually fell 8%.

Chrysler fared better last month, seeing total sales rise 3%.

This represented the first year-on-year sales increase for the firm - the US arm of Daimler-Chrysler - in nine months.

-Goldilox

More evidence that the consumer is not able to hold up the US economy indefinitely.
Goldilox
(12/03/2006; 06:30:01 MDT - Msg ID: 149942)
Qatar 'to pay Palestinian wages'
http://news.bbc.co.uk/2/hi/middle_east/6203940.stmsnip:

Qatar has agreed to pay the salaries of 40,000 Palestinian education workers for several months, Palestinian Prime Minister Ismail Haniya has said.
Mr Haniya said the amount would total more than $22m (�11.1m) a month.

The Hamas-led Palestinian government has been struggling to pay its workforce since March when Western donors suspended direct aid.

They want Hamas to renounce violence and to recognise Israel. Hamas has rejected the demands.

The US and the European Union regard Hamas as a terrorist organisation.


FOREIGN AID
April 2006 - September 2006: $420m
April 2005 - September 2005: $230m
Source: IMF

The Israeli authorities have also been withholding tens of millions of dollars in tax revenues they collect for the Palestinian government.

Palestinian teachers in the West Bank and Gaza Strip returned to work last month after ending a two-month strike over unpaid wages.

Mr Haniya made the announcement in the Qatari capital, Doha.

He said Qatar was also studying giving an additional $7m per month to the Palestinian health sector.

Qatar has not commented.

Aid increase?

Foreign aid - despite the economic boycott - has still been reaching both the Palestinian Authority and the Palestinians.

In September, the International Monetary Fund (IMF) said more foreign aid had been received by the PA over six months - April to September 2006 - than in the same period last year.

The bulk of this aid came from Arab donors - even though most of the money did not go directly to the Hamas-led administration.

Donors deposited the funds in the bank account of the Palestinian Authority President Mahmoud Abbas.

Mr Abbas is the head of the Fatah organisation, which recognises Israel, and is not subject to the economic boycott.

-Goldilox

The "good cop, bad cop" game with Palistinian tax revenues is wearing thin. Perhaps the Las Vegas boyz should go in and help them set up casinos to get their money back from the Israeli people as has been the US answer to two centuries of "what to do with the indigenous peoples".
Goldilox
(12/03/2006; 06:36:37 MDT - Msg ID: 149943)
Department of Redundancy Department
http://news.bbc.co.uk/2/hi/business/6149830.stmsnip:

UK unemployment is continuing to rise - climbing by 27,000 to 1.71 million in the three months to September, the highest level in seven years.
The jobless rate rose to 5.6%, up from 5.5% in the previous quarter, the Office for National Statistics said.

The number of people out of work and claiming Jobseekers Allowance rose by 1,200 in October to 961,300.

Average earnings grew by 3.9% in the year to September, down from 4.2% in the previous month.

Other Office for National Statistics (ONS) data showed that that 141,000 people were made redundant in quarter, up by 3,000 from the previous three months.
Q
(12/03/2006; 06:42:44 MDT - Msg ID: 149944)
Israeli aid

Perhaps if the n billions in Israeli aid was made contingent on

1) Renouncing violence

2) Recognising Palestinian right to exist

the mid-east "crisis" would take a different slant.
Chris Powell
(12/03/2006; 09:33:22 MDT - Msg ID: 149945)
James Turk: The breakout gains momentum
http://goldmoney.com/11:25a ET Sunday, December 3, 2006

Dear Friend of GATA and Gold:

GoldMoney's James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, reports that gold continues its rise not just against the dollar but also against most major currencies as the markets begin to realize the scope of the monetary debasement under way worldwide. Turk's new commentary is titled "The Breakout Gains Momentum" and you can find it in the "Founder's Commentary" box at the top left of the GoldMoney home page here:

http://goldmoney.com/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

mikal
(12/03/2006; 10:03:28 MDT - Msg ID: 149946)
Oil and gov't expose
http://www.nytimes.com/2006/12/03/business/yourmoney/03whistle.html?_r=2&ref=business∨ef=slogin∨ef=sloginBlowing the Whistle on Big Oil | New York Times | Edmund L. Andrews - December 3, 2006
Chris Powell
(12/03/2006; 10:07:06 MDT - Msg ID: 149947)
William Pesek: Why Paulson faces disappointment in China
http://www.bloomberg.com/apps/news?pid=20601039&sid=aNlktVN07lps&refer=homeBy William Pesek
Bloomberg News Service
Friday, December 1, 2006

If imitation is the highest form of flattery, then perhaps piracy is a globalization-age sign that you have made it in the world.

John Chan, a Shanghai-based business consultant, knows something about the phenomenon. Early this year, a businessman in Shanghai asked Chan to sign a copy of his 2003 book, "China Streetsmart." The 42-year-old was flabbergasted to see it was a pirated copy -- one made in China and bought in the U.S.

"Of course, now I can laugh about it," Chan told me in Beijing recently. "But it's a real wake-up call about just how far counterfeiters will go to make money and how big their operations are getting."

Step into a Beijing shopping center and you will be surrounded by names such as Louis Vuitton, Tiffany, Sony, Gucci, Nike, Microsoft, Rolex, Burberry -- you name it. Chances are that many are fakes, and very good ones at that. It makes you wonder how luxury-goods, sports, technology, and publishing companies will make money in the world's most-promising economy.

There's a reason that China doesn't clamp down aggressively on intellectual-property-rights violators: their operations, for better or worse, create jobs. The untold thousands of people employed by counterfeiters aren't likely to gather in Tiananmen Square and challenge the Communist Party.

While piracy and currency policy seem worlds apart, such logic applies to the yuan too. All the excitement about China allowing its currency to rise versus the dollar ignores a basic fact: China's main focus is on creating millions of jobs, and that augers against a sharp rise in the yuan.

The yuan has been edging higher and will continue to do so before a Dec. 14-15 visit to China by U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. This week, the yuan rose to its highest level since China ended its decade-old link with the U.S. currency in July 2005. The increase in value occurred after Paulson said yuan gains will help resolve "tension" in trade relations.

Currency traders' reaction to so ambiguous and obvious a statement shows how much they are betting on Paulson's and Bernanke's visit. Yet markets are forgetting how good China has become at appearing to let the yuan rise, while giving up virtually nothing.

China showed what it could do when it scrapped its dollar peg. Its teensy-weensy 2.1 percent revaluation elated global heads of state, who issued press releases about it.

It was sheer brilliance. China's baby step convinced the world that the Asian country was making a major accommodation. And since then, nothing. While China is tolerating a somewhat stronger yuan, gains haven't been anything close to what economists and politicians had hoped.

There are two basic reasons that Asia's No. 2 economy isn't about to let the yuan shoot higher.

One, it would impede job creation in the world's most-populous nation at a time when the gap between extremely rich and extremely poor is growing.

Two, it may be too late.

"Central to China's growth and economic modernization is to maintain their currency at a level that allows them to export ever more manufactured goods to the developed world," says Donald Straszheim, vice chairman of Roth Capital Partners LLC in Newport Beach, California. As such, he sees "zero chance that they will do another discreet revaluation again, like on July 21, 2005."

It's a stability issue. China's efforts to maintain peace while 1.3 billion people aim to grow richer by the day are focused on offering an ever-increasing number of employment opportunities. At this stage of China's development, that means jobs supported by exports.

"There's no way manufacturing, trade, industrialization, infrastructure, and migration from rural to urban could have worked" without a weak currency, Straszheim says. "These are all the core of their 9.7 percent growth from 1978 to 2005."

China also missed its best opportunities to boost the yuan. Now that growth in the U.S. is expected to slow and Japan has recovered with more of a whimper than a roar, it's hardly an ideal time for China to risk damaging its export industries. There's also increasing pressure on China to begin addressing its worsening pollution problems.

Nor is it in the world's interest to see Chinese growth decline in 2007. With the U.S. set to slow and Europe and Japan expanding about 2 percent, the global economy needs the rapid growth emanating from China, India, and Southeast Asia.

"In the emerging countries, conditions are pretty buoyant," Jean-Philippe Cotis, chief economist at the Paris- based Organization for Economic Cooperation and Development, said on Nov. 28. "These growth rates are pretty strong and should support the world economy."

Besides, a 20 percent or even 40 percent increase in the yuan's value wouldn't change U.S. consumers' passion for bargains or low-cost goods. It also wouldn't reverse massive U.S. budget and current-account deficits.

The so-called Plaza Accord of 1985 sharply weakened the dollar versus the yen. It did little to improve the U.S.'s balance of payments, yet it contributed to the asset bubbles that led to Japan's lost decade in the 1990s. The unintended consequences of Chinese revaluations could be even more extreme.

U.S. politicians will continue to find a convenient scapegoat -- and punching bag -- in China. That doesn't mean traders should be expecting big steps on the nation's currency.

-----------

William Pesek is a Bloomberg News columnist.
Druid
(12/03/2006; 11:10:00 MDT - Msg ID: 149948)
FreeGold on the way..

Druid: Any of you watching the "GOV'T GOLD" Infomercial on ABC right now. Wow! The herd is being directed.
USAGOLD / Centennial Precious Metals, Inc.
(12/03/2006; 12:21:56 MDT - Msg ID: 149949)
A world of golden treasure is at your fingertips...
http://www.usagold.com/buy-gold-coins.html

gold -- a global calling card
Paper Avalanche
(12/03/2006; 14:05:12 MDT - Msg ID: 149950)
@ Druid

Was that a commercial or a show? I missed it. What was the main theme that was being sold? Thanks! PA
mikal
(12/03/2006; 14:20:35 MDT - Msg ID: 149951)
Pics worth a thousand words
http://www.deesillustration.com/Pics1.htm"Ask not what your country can do for you, but what you can do..." JFK
mikal
(12/03/2006; 14:29:58 MDT - Msg ID: 149952)
@PA, Druid
Commercial. And by the sound of it, "if you've seen one, you've seen them all." Thanks Druid for the heads up. Paper ads have been cranking up too for lesser knowns "opportunists" lacking reliability, and a few established firms with a history of aggressive marketing. They all share markups that suffice to more than make up for big-time adv. rates and fees.
Sierra Madre
(12/03/2006; 19:02:45 MDT - Msg ID: 149953)
Interesting comments on COUNTERFEITING!

Last week I was offered some very attractive copies of PATEK PHILIPPE watches. These watches are usually sold in HIGH five figures (dollars). (Practically any brand is available, in several models).

These were evidently copies, but good copies. Asking price was $300 bucks each. Lookalike to a $50,000 original.

The watches said "Swiss Made" on the dials. Maybe they were not made in Switzerland, but, What if they were?

There is a principle in commerce: "Do what your competitor is going to do to you, but do it first."

In other words, would it not be intelligent policy for a prestigious watch company, to have a department devoted to putting out CHEAP IMITATIONS of its own fine watches?

If the competition is going to do it to you, do it yourself. Thus, sell a few watches for enormous prices, and a great many COUNTERFEIT copies at very low prices. Might as well sell the copies yourself, if some Chinaman is going to be doing it anyway. Service problems? The company can always say, "No service for counterfeits!"

But, no, the Swiss would not do such a thing, would they?

SIERRA
Goldilox
(12/03/2006; 19:03:01 MDT - Msg ID: 149954)
Gold Ads
The unitiated also need to watch out for the "100% gold clad" trinkets that are being passed off as "investments".

The idiot box is ripe with them!
Flaccus
(12/03/2006; 19:06:17 MDT - Msg ID: 149955)
Dear London; dear New York>>Exercise caution
with your overnight session shorts to big Asian money. Prepare for the probability of being asked to make delivery in .9999 100 ounce gold bars. Things have changed. It's going to get nasty. Hope your counterparties are inventoried and can deliver.
Goldilox
(12/03/2006; 19:08:52 MDT - Msg ID: 149956)
Counterfeits
@ Sierra Madre,

The brand name food and beverage companies have been doing it legally for years. Look closely at your Supermarket "brands" of everything from sodas to peanut butter to mayonnaise.

The difference is they offer brand name quality under different branding, instead of questionable quality under a pirated brand name.
Druid
(12/03/2006; 19:54:55 MDT - Msg ID: 149957)
@PA, Mikal

Druid: I was in and out throughout the day and had the TV on as background noise when all of a sudden I heard the word gold coming from the strange box. I stopped to listen for a few minutes to discern what was being sold and, if I'm not mistaken, the sales pitch was for $66 a coin limit 10. Among other claims in the presentation, there was a very clear message about the concept of purchasing power, which blew me away. It's this concept that most "investors" (much less Joe six pack) don't have a clue about when comparing apples to apples. Here I am at noon Texas time, viewing comparative charts and graphs reference savings accounts, etc being presented versus gold, and by far, the better investment decision for the time frame being discussed was gold coins. One of the better points that was made was when the presenter held a Bank Statement discussing what was reflected versus the safety of holding gold bullion. However, he did suggest holding bullion in a Bank's safety deposit box.

These are just snips. Of what I caught and I'm sure there are others that caught it and could provide a more detailed account.

I was pleasantly surprised to see this type of 30 minute infomercial on ABC on a Sunday afternoon discussing gold bullion. I'm from the school of thought that suggests TV, as a medium, has taken the place of any type of serious study or research for a huge segment of our society regardless of education or lack thereof, and as such, today was a HUGE step toward "FreeGold". My best guess is that probably ninety percent of our population doesn't have a clue about who Hank Paulson is or his upcoming travel plans (nor would they care). However, one way you begin to gradually chip away at this level of ignorance is via TV like today.

If you want to cause a stampede, squeeze a commercial in with some blonde bombshell between NFL football games holding a gold bullion coin reading a simple but well written script off of a teleprompter (CNBC style of reporting) reference the concept of purchasing power and just sit back and watch those PPT boys really earn their FRN's.
Goldilox
(12/03/2006; 20:01:04 MDT - Msg ID: 149958)
Silver and health
With all the claims about silver's health benefits I have yet to see anyone advocate trading in our stainless dinner ware for the real silver stuff of the past. Hmmm . . .
Goldilox
(12/03/2006; 23:07:00 MDT - Msg ID: 149959)
Brits close some tax loopholes
http://observer.guardian.co.uk/business/story/0,,1962454,00.htmlsnip:

the Treasury has won legal victories that prevent City firms paying bonuses in antique coins to their bankers and traders in order to reduce their VAT bills.

The ruse - known as the 'Gold Napoleon' after the well-known 19th-century coin - was the latest novel attempt by some firms to circumvent VAT payments by rewarding staff with selected low-VAT items. In the past, firms have paid employees with fine wine, gold bars and other exotic commodities.

The Gold Napoleon scheme's removal will disappoint some City stars, who already face a decline in the real value of their bonuses, which are usually dollar-denominated, because of the US currency's slide in value against the pound.

-Goldilox

It would suck to be a Brit paid in US $ right about now!
Goldilox
(12/03/2006; 23:16:49 MDT - Msg ID: 149960)
Paulson Believes a Financial Crisis is Overdue
http://www.investorshub.com/boards/read_msg.asp?message_id=15199469snip:

While a complacent Wall Street, oblivious to all risks, continues to drive the market higher, it seems that Treasury Secretary Henry Paulson believes that a financial crisis is overdue. Our suspicions were first aroused by a Wall Street Journal article on October 23, and confirmed by Fred Barnes in The Weekly Standard on November 27.

Although the WSJ article dealt mainly with lessening the financial regulations hurting U.S. competitiveness in the financial markets, it also included the following. Referring to Paulson, it stated, "Since taking the reins in July, the Wall Street veteran has reinvigorated the President's Working Group on Financial Markets, which had languished�Mr. Paulson is chairman of the Working Group, which coordinates government policy on financial markets and includes the heads of the Federal Reserve, Securities and Exchange Commission, and Commodity Futures Trading Commission. Mr. Paulson has insisted that they meet about every six weeks. Before his arrival, the group met every few months and sometimes as infrequently as once a quarter." Many of you may know that this is the group commonly referred to as the Plunge Protection Team.

The WSJ article went on to say that "Mr. Paulson is having the Working Group look at the systemic risk posed by hedge funds and derivatives, and the government's ability to respond to a financial crisis, officials said. He has ordered his chief of staff, Jim Wilkinson, to oversee the creation of a Treasury command center to track markets world-wide and serve as an operations base in a crisis. The center would revive a market-monitoring room closed in a 2003 budget cut."

Although we had some suspicions about Paulson's motivation in reviving the Group in the midst of perceived prosperity and market complacency, we did not comment at the time in the absence of additional information. Our suspicions were basically confirmed, however, a few days ago by the Barnes article in The Weekly Standard. Barnes is a veteran columnist with good sources in the current administration, and a reading of the article seems to indicate that the information comes directly from Josh Bolten, the White House chief of staff, who previously worked for Goldman Sachs, which Paulson headed prior to becoming Treasury Secretary.

The Barnes article dealt both with Paulson's surprisingly contrary views on China and with the serious potential of a financial crisis, presumably related to the systemic risk posed by hedge funds and derivatives discussed in the WSJ piece. Barnes stated that "unlike members of Congress, Paulson is more worried about the possibility of an economic stumble in China whose ripple effects would quickly reach the United States than he is about Chinese manipulation of its currency to promote exports and limit imports�Paulson takes exception to the popular notion that China's rapid economic ascent will continue unimpeded�he said China's future growth should not be extrapolated �from its past performance, as if China somehow found a way to immunize itself from business cycles and all other economic problems�. His concern is not that China will overtake the United States economically but that Chinese leaders �won't move ahead with reforms to sustain growth�. That's a polite explanation for what might cause an economic slowdown, or worse, in China. And �because it is a global leader, what happens in China will affect the well-being of the United States and the rest of the world�."

Barnes then goes on to say that "Paulson's fear of a significant Chinese recession dovetails with another of the major tasks assigned to him by Bush: crisis management. Paulson believes a financial crisis is overdue�a serious crisis that would be a body blow to the U.S. economy. This fear is shared to some extent by Bush and Bolten, who wanted a major Wall Street player at Treasury in case an economic emergency occurs." Barnes then details Paulson's activation of the financial working group "to prepare for the crisis".

All in all, it does not seem that Secretary Paulson shares the sanguine Wall Street view of the market and the economy. Indeed, now that he is no longer in the securities business, Paulson is acting very much like a man who is looking ahead and does not like what he sees.
mikal
(12/04/2006; 08:25:40 MDT - Msg ID: 149961)
Speaking of trends...
http://www.marketwatch.com/News/Story/Story.aspx?guid={16AB07C8-17BF-4806-94CF-771A5BF8D5AD}&siteid=mktw&dist=bnb Bank of New York to buy Mellon, create top asset custodian | MarketWatch | December 4, 2006
The deal will create a "giant", "the world's largest custodian of financial assets", that will be "the 11th largest U.S. financial institution".
mikal
(12/04/2006; 09:00:46 MDT - Msg ID: 149962)
SURPRISE! Britain's inflation measures don't measure up:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/12/04/ninflation04.xml Revealed: The Real Rate of Inflation | Edmund Conway
12/04/06
The indices used by Britain lean to the
"politically correct" nature found in USA.
Gold is home:
Wherever centrally controlled currency becomes too
expensive to patronize wholeheartedly.
Wherever promises to pay reveal little but perfidy.
Wherever conspicuous consumption cycles come full circle.
Cometose
(12/04/2006; 11:50:19 MDT - Msg ID: 149963)
Energy / winter heating
I suspect the traders are going to feel trigger happy if the front that is here over western co moves their way over the next couple of days .....it'been 0 F every morning and sub 0 one of those last 5 mornings and the weather man has been lying about the expected temps for 4 of the last 5 days . My furnace was discovered to be faulty last monday .....I havent been able to get anyone out here to respond to replace it because they are all busy ........Silver Lining : I haven't bothered to try to do any work since last monday either...

Nice to catch up on the markets......

SIlver and GOld will GO as will Oil ........soon

As USUAL , Mark Faber's comments on Financialsense over the weekend were focused, salient, succinct, and clear ; CLEAR AS A BELL.

He also said what I have also observed.......and concluded (great minds think alike) ..........that George Bush and his family are a GANG ...."gangsters" was the term he used
Topaz
(12/04/2006; 12:08:38 MDT - Msg ID: 149964)
Delivery day 3.
http://www.nymex.com/media/delivery.pdfA good bit of churning evident in todays numbers but the totals are nice and healthy ...Silver still a little slow though, probably accounting for the still positive Au/Ag ratio move.
We can usually rely on PoAg to be supported throughout a delivery month and THAT should support PoG through Dec ...even if Gold gets sorted early delivery-wise.
Goldilox
(12/04/2006; 12:12:27 MDT - Msg ID: 149965)
Stay warm
@ Cometose,

Most of all, stay warm! Hypothermia is nothing to mess with!

Being in HK, Faber is able to enunciate the kinds of things that put US analysts, preachers, and auditors under the IRS microscope.

The scary thing is that the "gang" seems to have hoodwinked the Demos into supporting their Arkansas subsidiary once again, and if successful, will have logged 32 years and counting in control of the White House.

Google "MENA AR DRUGS" for a wealth of references to Barry Seal and the "gang", all connected to Ollie North's CIA "drugs for arms" trade back in the 1980s.

Pretty sleazy stuff, when you figure they are labeled "patriots" while their prize "customers" earn prison sentences in place of badly needed addiction treatment.
mikal
(12/04/2006; 12:36:22 MDT - Msg ID: 149966)
Dollar tagged for discounting
http://www.theglobeandmail.com/servlet/story/RTGAM.20061203.wbell1203/BNStory/Business/homeU.S. dollar tipped to keep on sliding
CAROLYN LEITCH | DEC 4 2006
Globe and Mail Update -- Excerpt:
"The U.S. dollar's tone is decidedly negative, and it feels as if the market is looking for virtually any excuse to sell dollars," Peter Frank, currency strategist at ABN Amro, said in a note to clients.
Excuses this week could include Monday's report by the National Association of Realtors on pending home sales, along with productivity data and the Institute of Supply Management's non-manufacturing index on Tuesday.
But the most significant market-moving number will be U.S. non-farm payrolls on Friday.
Michael Gregory, senior economist at BMO Nesbitt Burns Inc., says three developments must fall into place to start the clock ticking for an interest rate cut by the U.S. Federal Reserve Board: a falling trend in core consumer inflation, a three-month downturn in manufacturing, and a rising trend in the unemployment rate.
Numbers reported last week indicated sticky inflation and the first monthly contraction in manufacturing in three years. Therefore, Mr. Gregory says, he will be watching closely this Friday's non-farm payrolls report.
At ABN Amro, Mr. Frank warns that weak showings in new factory orders, due Wednesday, and employment on Friday could lead the U.S. currency to dangerous technical levels that trigger a further cascade of selling.
In Canada, the loonie has also been on the skids, making it one of the few currencies to lose ground against the U.S. dollar in November.
David Watt of BMO Nesbitt Burns predicts the Canadian dollar will continue to weaken as the country's economy slows, and the Bank of Canada appears likely to cut interest rates in the first half of 2007."

Mikal-- In Canada "beggar thy neighbor" currency policy seems doubly true, as North Americans toe the line
of cross-border congeniality while blurring the lines
involving borders and laws.
As the continental currencies get marked for discounting,
denominating trade with a "clearance" tag, sales volumes
pulsate at exponential orders.
Money goes out the door of the digital warehouses as fast as it can be loaded.
Central banks, GSE's, financial institutions
and brokerages record record revenues that erase the wage and tax base in simple strokes.
USAGOLD - Centennial Precious Metals, Inc.
(12/04/2006; 12:46:21 MDT - Msg ID: 149967)
Holiday Shoppers! A quick Christmas note...
http://www.usagold.com/gold/special/angel.htmlAfter a rapid sellout of the 16 Angel bezel/chain/coin pendants, Marie has secured 25 more. This inventory will be available for pre-Christmas delivery if you order before they sell out or by this Friday, December 8th (4pm MST), whichever comes first!

At only $300 each, these make a lovely, golden gift! Best of all, you won't have to wait in line at the crowded mall, PLUS, no hassle over the right size -- the 18" gold chain fits all!

1-800-869-5115 Extension 106
Cometose
(12/04/2006; 12:47:04 MDT - Msg ID: 149968)
metals
the chart of gold over at K site which looks like a failed attempt at a

Knock down this morning .........

and the Creeping action in the HUI this morning (up over 5) and the

Silver price up 8 cents on the day ..........

all seem to be telling a tell .........time only stands between us in the here and now and when the

(Cold front moves into NY) door on the SILVER CAGE is opened ........and SILVER begins its flight .......

along with Gold

Silver and Gold look like they are bumbing resistance and are GRAVITATING HIGHER.........THE MAGNETS PULLING THEM HIGHER ARE WINNING ........
mikal
(12/04/2006; 13:20:08 MDT - Msg ID: 149969)
(No Subject)
http://news.yahoo.com/s/ft/20061203/bs_ft/fto120320061653056819Banks face investigation of collateral By Peter Thal Larsen, Banking Editor
Sun Dec 3, 4:45 PM ET | Excerpts:
"London's largest investment banks are to face a wide-ranging probe into their measurement and management of collateral amid concerns that some may not be properly prepared for a sudden market downturn."
Mikal-- The stage is set. The lights are dimmed. The sound sets and stage props in place. Only the costume and makeup people are still fussing...

"Other regulators around the world are likely to pay close attention to the outcome of the investigation, which may involve co-operation with the US Federal Reserve."

"Mr Huertas said the FSA would look at how banks value collateral and whether they can get it back quickly in a crisis. The regulator would also examine in what circumstances the collateral accepted by banks might be linked to the value of the bank's underlying exposure.
Mr Huertas pointed out that collateral is often pledged across borders, can continue to be traded after it is pledged, and that banks which have received collateral from one institution increasingly pass it on to another institution. "Will all this work, and will it work in a stressed environment? That is the key question," he said."
Topaz
(12/04/2006; 13:24:25 MDT - Msg ID: 149970)
The Gold leash.
http://www.galmarley.com/Chart_pages/currency_charts.htmGold "currency" is scaring the daylights out of officialdom as PoG action this last week or so shows ...the Dollar drop was "directly" Gold related imo looking at the chart.
Gold has NO friends in official circles ...NONE!

Can Gold overcome this official disdain? ...does a Bowling Ball, hurtling down an alley give two hoots for the "structured array" laid out before it?

Gutter-Ball ...or STRIKE! ?
Goldilox
(12/04/2006; 13:42:00 MDT - Msg ID: 149971)
Gold / Currencies
@ Topaz,

No specific references, just a gut reaction, tells me when gold again crosses �500, it's "Back up the truck!", as Puplava likes to say.

Maybe, maybe not!
TownCrier
(12/04/2006; 15:00:21 MDT - Msg ID: 149972)
COMEX poised to win back e-metals share from CBOT
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061204:MTFH57858_2006-12-04_21-39-45_N04475279&type=comktNews&rpc=44NEW YORK, Dec 4 (Reuters) - The New York Mercantile Exchange's new 24-hour screen traded gold and silver futures service should win back market share from the Chicago Board of Trade's electronic contracts, market watchers said, because combining electronic and open outcry trading at a single exchange will boost efficiency.

The New York Mercantile Exchange on Sunday migrated COMEX electronic trading in gold, silver, copper and aluminum futures contracts to the Chicago Mercantile Exchange's Globex platform, retiring the outdated NYMEX ACCESS electronic trade system.

The move by NYMEX, which for years boasted the benchmark U.S. metals contracts, posed a big challenge to CBOT's precious metals complex. Dealers questioned if two competing electronic platforms offering essentially the same contracts could co-exist for long.

"There will be an initial drop-off in CBOT liquidity," Meyers said. "I think ultimately COMEX, which is known for metals, will eventually win the battle."

...A COMEX trader said that before eCBOT launched in Oct. 2004, 120,000 lots used to change hands every day on the COMEX floor, but lately COMEX volume averaged only about 30,000 to 35,000, and eCBOT was trading 70,000 contracts. "It's a ridiculous shift," he lamented.

..."The contracts are pretty identical. Now they are both trading electronically, I don't know what's going to differentiate them," said another New York metals analyst.

...A NYMEX spokeswoman [said] "One of the things I guess people measure when they look at the depth of a contract and success of a contract is open interest, and 93 percent of the open interest in the gold futures contracts still lies with the COMEX."

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

Bottom line: It's all basically the same old dance of paper gold... around this brass pole or that one.

R.
USAGOLD Daily Market Report
(12/04/2006; 16:08:17 MDT - Msg ID: 149973)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

MONDAY Market Excerpts

Gold up, choppy, as traders watch Globex, dollar

December 4 (from Reuters, MarketWatch) -- Gold futures ended a touch higher in choppy trade on Monday, erasing early losses on improved investment interest as traders deciphered the debut of COMEX metals contracts on the Globex electronic platform.

February gold at the COMEX division of the New York Mercantile Exchange finished up 30 cents at $650.90 after falling as low as $645.70 in the earlier session.

"As we started the week here, there was certainly a bullish (sentiment) going to the market place," said Paul McLeod, vice president of precious metals at Commerzbank. He added that the market was poised to go higher, although some profit taking might be seen at $650.

The dollar edged up against most major currencies as investors took profit following a dollar decline that have shaved some 3 percent off its value in less than two weeks. Coming into the week, the dollar had tumbled to a 20-month low versus the euro and a 14-year trough against sterling as weak data fanned fears U.S. interest rates could soon fall even as euro zone and U.K. rates were headed higher.

Growing expectations the U.S. economy is slowing enough for the Federal Reserve to lower interest rates soon has put pressure on the dollar in recent days and helped fuel gold's recent climb.

"Much would have to change in the American economic picture, fiscal and especially monetary policy, and ultimately even in its foreign policy, for the U.S. currency to make a strong comeback and do away with most of the reasons for which more and more investors have been friendly towards gold," said Kitco's Jon Nadler.

With many analysts expecting further declines in the greenback, analysts have remained upbeat about gold's prospects.

"Dollar diversification will continue to be the main theme of the market with recent gains in ETF holdings showing investors are keen to hold the yellow metal," said James Moore, an analyst at TheBullionDesk.

Beginning Sunday night, the NYMEX started to offer COMEX contracts electronically through the Chicago Mercantile Exchange's Globex system. Estimated COMEX volume was 25,000 contracts, and options turnover was 15,000. Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 37,684 contracts as of 4:01 p.m. EST. The new COMEX electronic contracts were trading on CME Globex during open-outcry hours.

York Commodities' Edward Daly said that the volume on the COMEX floor was "just dead" in early sessions and the migration of COMEX contracts had added a level of uncertainty for traders.

"It's going to be a little bit difficult here today. We are watching the electronic platform today. I think a lot of minds are on the electronic platform," said one floor trader.

Commerzbank's McLeod said the launch of COMEX futures on CME Globex could lower volume a little because people were adopting to the new approach.

---(see url for full news, 24-hr newswire)---
TownCrier
(12/04/2006; 16:37:31 MDT - Msg ID: 149974)
Asian central banks learn to live with dollar fall
http://www.ft.com/cms/s/b3cc51cc-83c9-11db-9e95-0000779e2340,_i_rssPage=144c6c90-506c-11da-bbd7-0000779e2340.html(FT) December 4 2006 -- Asian central banks appear divided on how to respond to the falling US dollar. Several countries, including Thailand, South Korea and Singapore, appear to have intervened to curb its decline against their currencies, while heavyweights Japan and China are taking a more benign approach.

"There is a degree of acceptance in Asia about the downward drift of the dollar..."

Some countries are more worried than others. South Korean financial officials are concerned about the rapid rise of the won, which on Monday hit a nine-year high against the dollar.

Traders say the Bank of Korea appeared to have intervened heavily last month to try to stem its ascent.

Thailand fears that its export competitiveness will be harmed by a rise of the baht, which has appreciated by 15 per cent against the dollar this year.

The central bank has turned to administrative measures...

...CAPITAL CONTROLS

In an attempt to deter short-term speculation on the currency, the Bank of Thailand on Monday announced that non-residents holding Thai treasury bills, government or central bank bonds without underlying businesses in the country must retain them for at least three months before selling them on.

Bigger economies appear better able to withstand the effects of a falling dollar...

China has been in effect supporting the dollar for a number of years due to its purchases of US Treasuries and other financial instruments, which make up an estimated 70 per cent of its $1,000bn foreign exchange reserves.

...One challenge facing Asian central bankers, however, are signs of inflation that could force them to raise interest rates and the value of their currencies as a result.

Mr Foster said: "The central banks must balance the need to keep inflation under control without causing their currencies to appreciate sharply."

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

To keep some of the multi-faceted pressures off the local currency, central banks will increasing find rising gold to be a useful and productive avenue into which the flaming hot money of speculative flows can be guided.

Until then, load up on the cheap!

R.
David Linkley
(12/04/2006; 16:41:24 MDT - Msg ID: 149975)
Gold panic?
Deep storage gold, IMF sales, Germany being asked to do swaps, falling production, $dollar in trouble, Administration officials scurrying around the globe, etc. Me thinks the physical gold needed to contain prices is about gone and the West is in deep trouble. Once the dollar closes several times below 80 (US dollar index) we enter into the great unknown. The entire world economic system is a house of cards built on a fragile confidence that "tommorrow" will look similiar to today. After Nixon closed the international gold window it took 10 years to for the system to stabilize and oil prices to calm down. With so much more debt and $300 trillion in derivatives today only god knows the outcome. Make sure you have physical gold in your position as none of us know if gold will be available at any price once we break 30 years of dollar support.
mikal
(12/04/2006; 16:43:15 MDT - Msg ID: 149976)
Wind device aids shipping
http://www.eweek.com/article2/0,1759,2067590,00.asp?kc=EWRSS03119TX1K0000594German High-Tech Sky Sail May Cut Costs, Emissions
By Erik Kirschbaum, Reuters
December 4, 2006
BREMEN, Germany (Reuters)�Excerpts: "Putting a harness on ocean winds, a German shipping company plans to unfurl a giant high-tech kite over a cargo ship next year to boost the vessel's propulsion and to conserve fuel. The "SkySail," a 160 square-meter (191 square-yard) kite tethered to a mast, has successfully undergone years of trial runs and Bremen shipowner Beluga Shipping believes it will help its vessels cut fuel use by 15 to 20 percent.
The "MV Beluga SkySails," now being built and fitted with a paraglider-shaped sail and a "smart" central steerage unit, will make its maiden voyage in early 2007."

Mikal-- Fascinating and very promising. Sounds like something that would grace the cover of an old Popular Mechanics magazine in it's innocent years. And I think the inventer and this article underestimate it's potential application(see rest of story @link).

"The technology he has developed is a throwback to an earlier age of maritime travel when ships relied solely on wind. But it also addresses a key concern of the modern age: climate change...

He said his fuel prices have more than doubled from about $150 per ton in 2004 to between $300 and $400 per ton this year and he fears prices may soon rise to $450. Prices have, however, retreated somewhat in recent months.
"We can't sit back and ignore the market pressures and wait until fuel hits $500," said Stolberg, whose nine-year-old firm ships everything from giant turbine engines to locomotives for customers including Siemens and General Electric. On top of that, European Union restrictions on greenhouse gas emissions threaten penalties for those who fail to act to curb them, and the heavy fuels that ships use are deemed especially dirty.
"From the European Union point of view, you will have restrictions with CO2 emissions and they'll fine you," said Frank. "You've got to find ways to avoid that. As restrictions are coming, every shipper must rethink their strategy.""

Mikal-- This reveals that many businesses will be hit by a double whammy from higher fuel costs and pollution regulations, on top of any other business concerns. Innovating with your investments will help you cope as much as shippers using new tech wind sails or the latest engines with state of the art computerized controllers, the newest hulls, etc.
TownCrier
(12/04/2006; 16:52:01 MDT - Msg ID: 149977)
Dollar millionaire boom by 2016
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=personalFinanceNews&storyID=2006-12-04T105910Z_01_NOA727385_RTRUKOC_0_BRITAIN-MILLIONAIRES-LIST.xml&WTmodLoc=HP-C9-PF-3LONDON (Reuters) - A quarter of British households will have assets worth over $1 million in 10 years, largely driven by the strength of the property market, according to a report.

The report by Barclays Wealth, the wealth management arm of Barclays, said 8 million UK households [26 percent!] will own more than $1 million (510,000 pounds) in property, land, savings and investments by 2016.

"People from all walks of life are becoming wealthy, which presents new opportunities and challenges," said Mark Kibblewhite, managing director of Barclays Wealth's private banking division.

"IT phenomena such as eBay trading, and the boom in buy-to-let property and property prices has meant that people can make more money without high start-up costs or expensive education," said Kibblewhite.

Furthermore, within the next decade, the UK will also see a huge rise in the number of �nearlionaires'. Almost half of all UK households (49 per cent) will hold aggregate wealth between $500,000 and $1million, with all annual household incomes set to increase on average by 67 per cent over the next ten years.

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

Those percentages does not bode well. A wise man once observed, "We can't ALL be millionaires."

What he meant was that there is not enough inventory of real goods to give credibility to the sort of consumer lifestyles that we typically associate with people of "millionaire" status and means. Because, to be sure, at the end of the day, it isn't the size of the numerical account that matters, but rather what matters is what you are actually able to do with it.

Put it this way. I know of plenty countries where most of its citizens have been millionaires and billionaires, but they live in mere shacks and shanties. In these countries, the currency notes typically have many zeros on them, as does the price tag for a simple loaf of bread.

To ensure that your savings truly matters, that you are among those "from all walks of life [who] are [TRULY] becoming wealthy", choose tangible property -- choose gold instead of zero-laden accounts of domestic or foreign currency.

Amen.

R.
Goldilox
(12/04/2006; 17:08:43 MDT - Msg ID: 149978)
Millionaire boom
@ TC,

Puplava already defines California millionaires as "homeowners", though many own naught but a lot of debt paper against that home.
Chris Powell
(12/04/2006; 18:20:57 MDT - Msg ID: 149979)
China seeks direct talks with OPEC
http://news.yahoo.com/s/ap/20061204/ap_on_bi_ge/china_opecBy Jim Krane
Associated Press
Monday, December 4, 2006

China wants to start direct negotiations with OPEC to secure a stable oil supply and an equitable share of the oil market, a top official said here Monday, in comments that underline the Chinese economy's rapidly growing energy needs.

Zhai Jun, China's assistant minister of foreign affairs, told conference participants in Dubai that his country was trying to develop "a negotiating mechanism with OPEC."

"Only through this can we maintain security and stability of our oil imports," Zhai said in a speech to the Arab Strategy Forum here.

Soaring demand for oil in rapidly industrializing China has been blamed as one of the chief causes for oil prices that have spiraled higher over the past two years. China is the world's third largest importer, behind Japan and the United States.

Zhai, speaking in Chinese, appeared to refer to another cause for higher prices � instability in oil producing countries like Iraq and Nigeria � when he said China wants to step up efforts to end strife that destabilized the oil marketplace.

"We need to eliminate these hot spot issues," he said.

China is an increasingly big consumer of raw materials and has been seeking a greater voice in pricing of several commodities. The country, which Zhai said imports six percent of the crude traded globally, has been setting up strategic oil reserves and aggressively seeking new suppliers in Africa and South America to help diversify its crude supply. Zhai termed it the "global race for energy."

"China's influence is growing in the Arab world," he said.

He said the Asian giant was opening its energy sector to outside investment and looking to cooperate with foreign partners across its oil sector. Zhai said the country was looking for more formal ties with the Organization of Petroleum Exporting Countries, but didn't elaborate.

"Currently we're making preparations to establish a dialogue mechanism with oil producers," the Chinese diplomat said. "We want to participate as much as possible in some of the big decision processes on the world stage."

During a visit by OPEC president Sheik Ahmad Fahad Al Ahmad Al-Sabah to China last year, the two sides discussed "institutionalizing" a dialogue, acknowledging China's increasing importance as an importer of oil and gas.

China imported 3.1 million barrels a day of crude oil in 2005, and consumed 6.9 million barrels a day, according to U.S. Energy Department data.

The Arab Strategy Forum that lasts through Wednesday brings together business, academic and political leaders from around the world to discuss development and political issues of global interest.
Chris Powell
(12/04/2006; 18:22:13 MDT - Msg ID: 149980)
What a wonderful forum this is
Thanks to all and particularly our hosts
for this forum, from which I appropriate
so much for GATA's use. That includes
you particularly, TC, MK, and Mikal!
USAGOLD / Centennial Precious Metals, Inc.
(12/04/2006; 20:00:19 MDT - Msg ID: 149981)
Give the gift of GOLD!
http://www.usagold.com/gold/special/angel.html

Angel gold coin pendant
Goldilox
(12/04/2006; 21:23:06 MDT - Msg ID: 149982)
HIGHWAY ROBBERY OR TRICKS AT THE TROUGH?
http://www.financialsense.com/Market/wrapup.htmsnip:

Way back on Sept. 25 � in this very space � we were "early to the party" with a piece titled Running On Empty where we examined the effect of Goldman Sachs recalibrating their vaunted Commodity Index [GSCI] to have a lower weighting.

We pointed out how this thinly veiled attempt at partisan financial engineering was well timed with the run-up to the mid-term elections. In the month since the election, here's a quick summary of what's occurred in the energy complex:

since falling from a high of 78.00 and subsequently bottoming at approximately 55.00 per barrel, crude oil has rebounded quite sharply in the weeks following the election to 63.00 per barrel at the time of writing.

the wholesale price of gasoline which found a "bottom" at 1.46 per gallon just before the election has now recovered to 1.69.

even natural gas, which saw its price plunge to the 4 dollar range [in the process bankrupting hedge-fund behemoth, Amaranth] before recovering to this morning's 8.26.

If any lesson is to be gained from any of this, one of the most pertinent and poignant is that it magnifies the short comings of Central Planning. On that note, we should all be aware that history reminds us that one of the most distinguishing hallmarks of a Central Planned Economy is "bottlenecks" and chronic shortages of base commodities; much like the developing and ongoing shortages that are manifesting themselves in the base metals copper, aluminum, nickel, zinc and lead.

We can only hope that lawmakers and regulators have taken note.

With Black Friday and Thanksgiving festivities now in the rear-view-mirror, Wall Street's and the main steam financial press's attention has expressly turned toward holiday [retail] sales. This data is closely monitored by analysts because it accurately measures the willingness of the average Jane and Joe to spend money [or go further into debt, perhaps].

Never in the history of Wall Street have so many earned so much in so little time.

Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. are about to reward their 173,000 employees with $36 billion in bonuses. That's a 30 percent increase from last year's record, and it doesn't include the billions more that will be paid by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, as well as the hundreds of hedge funds and private-equity firms that constitute the financial industry�

-Goldilox

Of course, Wall St. bonuses show up in the FED wage calculations as an increase in average salaries for the millions in the working class. Median wage calculations would be a lot more demonstrative.
Goldilox
(12/04/2006; 23:31:25 MDT - Msg ID: 149983)
UN envoy a victim of Bush weakness
http://news.bbc.co.uk/2/hi/americas/6207968.stmsnip:

President Bush's UN ambassador is resigning his post because he cannot get Senate backing to stay in the job.


Bolton was appointed on a temporary basis

If Mr Bush's Republican Party had kept control of the Senate in last month's elections, they might have been able to get John Bolton confirmed.

But those Democrats who oppose him have the wind in their sails and they made it clear that the nomination was dead.

Mr Bolton's departure was announced by the White House on Monday morning - to the enormous satisfaction of those who believed he was too acerbic and too focused on American power to be a good ambassador for the nation.

On hearing the news, the UN Secretary General Kofi Annan chose his words carefully - but did not seem to suggest he had lost a friend

"I think Ambassador Bolton did the job he was expected to do," was all he could manage.


The president appointed ambassador Bolton because he knew he would represent America's values and would take head-on problems at the United Nations
White House spokeswoman

Profile: John Bolton
Bolton quits: Have Your Say
But although Mr Annan was plainly unconverted there was equally plainly a case to be made that Mr Bolton should stay.

President Bush said he accepted Mr Bolton's resignation with deep regret.

That regret will be shared by many Republicans who see this as the culmination of a vindictive and personal campaign against a man who was widely acknowledged to be doing a good job at the UN.

The Chinese ambassador - with whom Mr Bolton worked closely on North Korea - said he had been hard-working and effective, and expressed regret that he was leaving.

Mr Bolton does seem to have impressed those who feel that the UN is too flaccid and politicised an organisation.

But he was also working for a president whose political power has been seeping away: He is a casualty of the wider weakness of the Bush White House.
Goldilox
(12/04/2006; 23:39:34 MDT - Msg ID: 149984)
Senator's wife in hiding after deportation threat
http://www.cnn.com/2006/POLITICS/12/04/congressman.wife.ap/index.htmlsnip:

ATLANTA, Georgia (AP) -- State Sen. Curt Thompson has been a strong advocate of immigration rights, once speaking in Spanish from the steps of the Georgia Capitol against the adoption of some of the nation's strictest immigration controls.

Now Thompson's Colombian-born wife is in hiding as federal immigration officials try to deport her.

Sascha Herrera, 28, has been in hiding since Immigration and Customs Enforcement officers arrived at her home November 28 with an order to remove her from the U.S. She was not home at the time.

Her attorney, Charles Kuck, claims she was duped by a man handling her immigration requests and that she never received the immigration notices that triggered her deportation order. While Kuck says neither he nor her husband know where Herrera is, he said that she will turn herself in Tuesday.

"It's the right thing to do. She needs to get the law to work for her," Kuck said.

Kuck filed a petition Monday to halt her deportation order and reopen her case, arguing that a man filed an asylum petition on her behalf without her knowledge and before her husband sponsored her green card application based on their April marriage.

The deportation order stems from Herrera's repeated failure to appear before a judge on the asylum application, which Kuck said she did not know had been filed.

The case hinges on whether Herrera received a notice to appear in court, and whether the asylum application could have been filed without her knowledge, said Victor Cerda, former general counsel for Immigration and Customs Enforcement.

According to Kuck, Herrera came to the U.S. -- where her parents have been living -- on a visitor visa in 2003. She applied for an extension to the visa through a "notario" -- a man who claimed he was qualified to handle legal immigration matters -- but did not get it until 20 days before the extension was due to expire.

The notario then suggested an asylum application, which Herrera signed, but she got a "bad vibe" from the man and decided not to proceed, Kuck said.

Later in 2004, she was accepted as a student at Kennesaw State University, which earned her a student visa. She then told the notario she did not want anything to do with him.

She met Thompson last year and they got married in April, when he applied for her to become a permanent resident. Kuck said Herrera's husband, a Democrat and attorney, would not comment on the case.

But in the meantime, the notario filed the asylum application, listing his address as hers. A telephone number listed for the notario, identified as Tomas Vilela, was being answered Monday by a fax machine.

Cerda said the deportation order in the asylum case would trump any pending green card application and trigger mandatory detention.

Her decision to hide could hurt her request for a judge's stay on deportation, Cerda said. If she turns herself in, she could remain in the U.S. while her petition is pending, either in jail or released on bond.

-Goldilox

Man, what horse-hooey! She's married to a state senator, and no one in immigration can see that she would be the ripest kind of kidnap bait back in Columbia. Sounds way too political to me.
968
(12/05/2006; 02:45:37 MDT - Msg ID: 149985)
Is the United States Bankrupt?
http://research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf"There are 77 million baby boomers now ranging from age 41 to age 59. All are hoping to collect tens of thousands of dollars in pension and healthcare benefits from the next generation. These claimants aren't going away. In three years, the oldest boomers will be eligible for early Social
Security benefits. In six years, the boomer vanguard will start collecting Medicare. Our nation has done nothing to prepare for this onslaught of obligation. Instead, it has continued to focus on a completely meaningless fiscal metric�"the" federal deficit�censored and studiously ignored
long-term fiscal analyses that are scientifically coherent, and dramatically expanded the benefit levels being explicitly or implicitly promised to the baby boomers.
Countries can and do go bankrupt. The United States, with its $65.9 trillion fiscal gap, seems clearly headed down that path. The country needs to stop shooting itself in the foot. It needs to adopt generational accounting as its standard method of budgeting and fiscal analysis, and it needs to adopt fundamental tax, Social Security, and healthcare reforms that will redeem our children's future."
968
(12/05/2006; 03:29:39 MDT - Msg ID: 149986)
Kazakhstan buying gold ???
http://www.interfax.ru/e/B/finances/26.html?id_issue=11641249The National Bank's assets in gold rose $167.9 million in November, partly (!!!) due to a 6.24%-rise in world gold prices, the press release said.
------------------------------------------------------------------------------------------------------------------------
Why does Kazakhstan wants to publish the increase in its goldreserves, while at the same time the US is trying to hide its M3, and remains silent about its goldreserves ?
Topaz
(12/05/2006; 04:25:32 MDT - Msg ID: 149987)
@968 Kazak Gold.
http://www.lbma.org.uk/conf2003/1e.marchenkoLBMAConf2003.pdfMr Marchenko with a 2003 summary of KNB/Gold/hedging/and generally warding off the parasites ...hopefully to come out the other end somewhat intact.
Goldilox
(12/05/2006; 07:45:43 MDT - Msg ID: 149988)
Toll Brothers sees next year's profit down up to 62%
http://www.marketwatch.com/news/story/toll-brothers-profit-slide-has/story.aspx?guid=%7B576AC195%2DA14F%2D4A41%2DAC48%2DAB41FFA6BAD7%7D&siteId=snip:

LONDON (MarketWatch) -- Luxury home builder Toll Brothers on Tuesday said next year's annual profit may fall up to 62%, but also raised hopes that it's seen a turn in the housing market.
Toll Brothers said net income in the fourth-quarter ending Oct. 31 fell to $174 million, or $1.07 a share, from $310 million, or $1.84 a share, in the same period last year, with revenue falling to $1.81 billion from $2.02 billion.
Excluding 42 cents in writedowns, the company said it would've earned $1.49 a share.

The Horsham, Pa.-based builder said it's suffered through 15 months of a home building slowdown, and has seen a higher than normal 585 cancellations.

-Goldilox

Bubble, bubble, Toll in trouble!
Goldilox
(12/05/2006; 07:48:36 MDT - Msg ID: 149989)
Layoff plans rise 11%, showing Ford worker buyouts
http://www.marketwatch.com/news/story/us-job-cuts-rise-11/story.aspx?guid=%7B190ECF52%2D24E4%2D42B3%2D8201%2D53F682DC90D6%7D&siteId=snip:

WASHINGTON (MarketWatch) -- Planned job reductions rose by 11% in November to 76,773 as more than 20,000 jobs were eliminated in the automotive sector, according to a monthly tally released on Tuesday.
So far in 2006, planned layoffs total 785,179, outplacement firm Challenger Gray & Christmas said. That's down 19% from the 964,232 announced last year at this time.

This year is on pace to be the first since 2000 that Challenger counts fewer than 1 million job reductions.

November's job reductions were down 23% from November 2005. It's the eighth month this year with smaller layoffs than the same month last year.

"Right now the job market appears to be relatively stable, with low unemployment, moderate job cutting and steady, if not spectacular, job creation," said John Challenger, head of the outplacement firm, in a written statement.

"There is no question that the economy is slowing," he said. "Weakness in the housing market is expected to continue and higher paying jobs in manufacturing and construction continue to shrink."

The auto industry announced 20,318 job reductions in November. Ford said about 38,000 hourly workers had accepted its early-retirement offer, but most of those job cuts were counted earlier in the year, when Ford announced those plans.

So far in 2006, a record 151,457 jobs have been eliminated in the auto sector, breaking the previous high of 133,686 set in 2001.
The government's payroll figures don't show such a severe decline in employment in the auto industry yet. According to the Labor Department, the number of workers in the sector is down about 35,000, or 3.2%, since the first of the year to 1.06 million.

Companies in the industrial-goods sector announced 17,255 job cuts in November, while consumer-product employers cut 4,766. Construction companies announced 3,562 reductions.
mikal
(12/05/2006; 08:01:01 MDT - Msg ID: 149990)
(No Subject)
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061205\ACQDJON200612050903DOWJONESDJONLINE000390.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.na German FinMin: Dollar's Level Must Be Set By Market Forces Paris - Dow Jones - DEC 05 06
German Finance Minister and his French counterpart
offer their rationale for brushing off $ weakness & euro strength concerns.
mikal
(12/05/2006; 08:24:08 MDT - Msg ID: 149991)
Rep. Paul takes Fed, Treasury to task
http://www.lewrockwell.com/paul/paul354.html Monetary Inflation Is the Problem by Ron Paul | Dec 5
Dr. Paul offers a very short, simplified summary of monetary inflation created by the Fed and US Treasury.
Cometose
(12/05/2006; 08:39:13 MDT - Msg ID: 149992)
Latest GOLD take down this morning
has been interpreted by the Oil market and the players in that market as inflationary

Try and try as they might the central bank planners could not put humpty dumpty back together again , they couldn't contain the effect after opening pandora's box and they couldn't put the genie back into the bottle ...........

they created a MONSTER....and the Monster grew with increasing nutritious paper throw his direction ....

and THE MONSTER then turned on his creators and consumed them
mikal
(12/05/2006; 09:03:23 MDT - Msg ID: 149993)
Officials say they can deal with another increase
http://www.bloomberg.com/apps/news?pid=20601100&sid=apTmvbewPOi8&refer=germany Trichet, Set to Lift Rates, Ignores Call to Curb Euro | Simon Kennedy | December 5, 2006
Cometose
(12/05/2006; 09:16:32 MDT - Msg ID: 149994)
Frozen
Looks like the gold market has frozen still temporarily..
while our friends at the fed go into the back room and fill their trading accounts with more electronic digitized virtual money .........so they can have another go at manipulating markets in whatever way they see suitable....

What happens when the world of fantasy runs head on to the world of REALITY .........where paper is powerless to contend with SHORTAGES......

If I were someone who could ...........I would send a message to some of these GAMERS ( this is a contemporary word to describe people who play video games ; I extend the definition to those who deal in another realm of fantasy [creating money to manipulate markets]} to persuade them through conditioned response thereapy that they should get a grip on REALITY in REAL TERMS while dealing with their economic and financial reponsibilities in conjunction with engaging with the rest of the REAL WORLD Players.

Fortunately in the realm of economics and finance there are rules that are safeguards that (absent global ignorance of Austrian Economics : see Mises) automatically surface in systems when ..........those drunk with power and omnipresence try to OPERATE AND ADMINSITRATE GLOBAL BANKING INFLUENCE ...........without authority based in sound funamentals (or values for that matter) ..........This is where the "buck" stops and this is where the influence (propaganda prop) riding atop the WORLD RESERVE CURRENCY status ends (read: LEGITAMACY LOST )

Goldilox
(12/05/2006; 09:49:42 MDT - Msg ID: 149995)
Breakfast Slam - not the "Lenny's" variety
I left my desk to prepare a morning repast, and returned to find the "slam" in progress. Fortunately, I was able to pick up some bargains, as half the damage has already reversed itself.

I fully expect another slam before next week's equity options expiry, but this is probably too soon to be it - as they can't hold IT static for 10 full trading days.
Druid
(12/05/2006; 09:51:33 MDT - Msg ID: 149996)
I.M.F. - Gold Sales or No Sales?
http://www.financialsense.com/editorials/phillips/2006/1204.html

"We were surprised to hear that the employees of the International Monetary Fund have actually suggested sales of gold from their stocks to cover income shortfalls they have. We are even more surprised to hear silence from the Members of the International Monetary Fund. The calls they made echoed the calls from the German government and the French government to sell national gold for the same reasons, to shore up shortfalls of income.

Of course in the case of the I.M.F. the calls were made by people completely unqualified to make the call, as the gold is the property of their individual members and not the I.M.F. per se.

Permission of the members is needed before such sales can take place to the extent of 85% of the votes of the members including the U.S. Hence they well know that there are virtually zero chances of this happening.

The IMF holds 3,217 tonnes of gold [103.4million ounces of gold], valued at today's prices at over U.S.$66 billion. The I.M.F. acquired its holdings from member states through the original Articles of Agreement. [The Articles were amended in 1978, eliminating the direct use of gold in the exchange rate system]. The Articles of Agreement require any gold transaction to have an 85% majority of total voting power. The U.S. alone has 16.83% of the voting rights. For the US to support a sale, Senate approval is necessary. They have rejected any such call in the past and are more so likely to do so now. Other countries are also known to be against any sale. So these calls are likely to be ignored as ere the last calls."


Druid: An excellent read pointing out the diminishing relevancy and role of this antiquated financial body.

sage
(12/05/2006; 11:22:06 MDT - Msg ID: 149999)
Groundhogs Day
Like the movie, I have watched the gold and silver market act the same way for the last 6 years, So I am seeking the guilded opinion of those lurking here as I value it. What's so different this time? every year at this time we have gold and silver rising and all the pundents rush with the same articles and charts on how this is it. Why is this year different?
USAGOLD / Centennial Precious Metals, Inc.
(12/05/2006; 11:31:49 MDT - Msg ID: 150001)
For Christmas Delivery, be sure to order pendants by Friday, Dec. 8th.
http://www.usagold.com/gold/special/angel.html

Gold -- a fine gift idea!
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Cometose
(12/05/2006; 11:55:41 MDT - Msg ID: 150002)
OOPS
Oil moving over 63 again ..........in a twinkling of an eye

Smack down attempt today may turn out to be a catapult....

as antigravity (inflation forces) assumes its will over

its detractors....who seem to be trying to put NIAGRA

FALLS IN A TEA CUP..........

I fear the repercussions of the bankers nonsensical

activities are going to seize on those bankers in such a

way that they never foresaw; there is not preparation /

ointment that they can put on this to make it go away.

Their buddies over in PHARMA don't have a symptom chaser

allay the effects or remove the cause of the plague that

they are producing............

There is a movie Red October where the Russian Sub fired a

torpedo at one of ours and the the torpedo lost its target

and then went in search of a new target which wound up

its source. In my script for how this movie turns out ,

the bankers recieve the torpedo up theirs ........

Goldman Sachs

J P Morgan

Barrick

AIG

etal

In all good movies , the villain always gets it in the end. Ultimately , this will also be so........

Those that DECIDED to LOVE MONEY and PURSUE that VIEN at ALL COSTS are going to meet their maker .........

EVERY KNEE WILL BOW.........

Sheep separate from the GOATS.......

THE CURTAIN IS RISING ........all the masks are coming off

THE WIZARD AND his puny slaves are going to answer for

games that have been played in the name of seeking MONEY

and Power (their gods) which they have made their HOLY

GRAIL....

...."it may be the devil or it may be the Lord , but you gotta serve somebody"........

BOB DYLAN .....from the album SAVED.....circa 1979

"out of the mouth of babes, THOU hast perfected praise"...
............ GOD of the Bible....circa 50 ad
MK
(12/05/2006; 12:08:28 MDT - Msg ID: 150003)
Druid/Julian: The IMF Correlation
I want to first of all thank Julian Phillips for the fine work he does in consistently documenting official sector gold mobilizations, contemplations of mobilizations, and the behind the scenes politics that shades both.

The current talk of IMF mobilizations only tells us that there are still those short gold out there who have the ear of the bureaucrats in that illustrious organization, and in turn that those bureaucrats have an ear in the financial press. One recalls the heavy pressure from Gordon Brown for IMF sales back in the late 1990s before the Bank of England was finally forced to sell gold (after the possibility of IMF sales was turned back). The fact that Brown was pressuring the IMF (and by proxy the United States) and others hinted that British bullion banks might be in trouble on gold -- something that was never proven by our side but still lingers over the ECB reserve dissolution even to this day.

So what does this pressure really mean? Where is it coming from?

I can't answer the latter question with the information available, but the pressure's presence infers that someone might be in trouble and that's how this attempt to throw cold water on the gold market can transform itself to a positive. Gordon Brown's problems and near hysterical pursuit of physical gold before the BoE sales foreshadowed a major breakout. For those of you who like correlations, there may be one between a gold market breakout and pressure for IMF (and/or central bank) sales -- precisely the opposite of what the opposition intends.
TownCrier
(12/05/2006; 12:21:38 MDT - Msg ID: 150004)
CHINA: Size of minimum bullion trade cut by 90%
http://www.shanghaidaily.com/art/2006/12/05/298983/Minimum_bullion_trade_volume_cut_by_90_.htm(Dec 5, 2006) -- The minimum trade volume of gold bullion in Shanghai will soon be cut down from 1,000 grams per transaction to 100 grams, said the Shanghai Gold Exchange yesterday.

The People's Bank of China, the country's central bank, has approved the decrease...

Meanwhile, the bourse plans to authorize more banks to participate in gold bullion transactions...

"We are preparing for the new regulation, which may come over the weekend," said an official with the ICBC in Shanghai. "Our system has already been prepped for the reduction."

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

Preparing for higher prices, maybe? The smaller size of the standard transactions is certainly a faciltation of gold's utility for the greatest possible number of users.

This 'downsizing' move toward liquidity dovetails nicely with Dubai's own initiative toward smaller standard bars as we discussed here several months ago.

It is useful to consider the contrast by which the American answer to the same liquidity issue is through the use of buying/selling via margin payments, thus keeping the transaction largely in the paper realm -- that is, more theoretical than physical.

Obviously, in China and Dubai the greater focus is on transactions of actual metal.

R.
Goldilox
(12/05/2006; 12:28:42 MDT - Msg ID: 150005)
China bullion limit decrease
@ TC,

Preparing for price increase, or possibly preparing to increase volume and a target a larger potential customer list.

Obviously 100 gms is within reach of a lot more customers than a kilogram.

No matter which incentive is more important, it's sure to be a good driver for the retail biz.
TownCrier
(12/05/2006; 12:33:53 MDT - Msg ID: 150006)
RELATED: Gold consumption continues to surge in China
http://news.xinhuanet.com/english/2006-12/05/content_5437014.htmSHANGHAI, Dec. 5 (Xinhua) -- The consumption of gold across China will top 350 tons this year, a record high, according to Cheng Fumin, chairman of China Gold Association.

Addressing an ongoing forum on gold and precious metals held in Shanghai, Cheng said rising gold prices since the beginning of the year had restrained sales of gold jewellery, which accounts for the bulk of gold consumption, but gold bullion -- seen as a way of preserving value -- has been selling like hot cakes.

China now ranks third in the world in terms of gold consumption, after India and the United States.

"During the 11th five-year-plan period (2006-2010), China's conventional practice of operating gold mining entities will undergo major changes," said Cheng.

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

A gold rush of sorts is gradually taking form in China.

And, 2010 appears yet again consistently as a pivot point or threshold between what will be likely be deemed in hindsight as the defining point in time between two distinctly different eras in the use/importance of gold.

Time is slowly but surely running out to load up as cheaply as possible.

R.
mikal
(12/05/2006; 13:05:20 MDT - Msg ID: 150007)
@TC
Re: ""During the 11th five-year-plan period (2006-2010), China's conventional practice of operating gold mining entities will undergo major changes," said Cheng."

IMO, Cheng says changes will occur "during" the period, not at year 2010.
Re: "A gold rush of sorts is gradually taking form in China."
and "Time is slowly but surely running out to load up as cheaply as possible."
I emphatically concur!
Sierra Madre
(12/05/2006; 14:19:00 MDT - Msg ID: 150008)
This is a MUST READ...

Dmitri Orlov, Russian who lived through collapse of USSR and now lives in the US, talks about what it was like in the USSR when its economy collapsed, and what it will be like when the US economy collapses.

http://energybulletin.net/23259.html

Orlov says the collapse will hit Americans much, much harder.

Read this excellent piece. All the reasons you can think of to BUY GOLD, NOW.

SIERRA
Sierra Madre
(12/05/2006; 14:20:36 MDT - Msg ID: 150009)
The link needs to be in the right place....
http://energybulletin.net/23259.html
Click on the link for one of the most interesting articles I have come upon, this year.
TownCrier
(12/05/2006; 15:47:39 MDT - Msg ID: 150010)
HSBC warning ominous for U.S. lenders
http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20061205:MTFH85361_2006-12-05_20-48-56_N05315059&pageNumber=0ℑid=∩=&sz=13&WTModLoc=HybArt-C1-ArticlePage3NEW YORK, Dec 5 (Reuters) - Experts have warned all year that a slowing U.S. economy and rising borrowing costs would lead to an increase in bad loans by homeowners and other borrowers.

"We think the sky may be falling," said Mark Fitzgibbon, director of research at Sandler O'Neill & Partners LP. "Credit quality has been deteriorating for two quarters and we think the pace of deterioration will accelerate this quarter."

HSBC, the world's third largest bank, on Tuesday said U.S. lending results may worsen from the third quarter, when higher loan losses crimped overall revenue growth.

...what particularly worries analysts is how many borrowers will skip payments as rates on many adjustable-rate mortgages (ARMs) reset higher in 2007.

Many borrowers obtained ARMs earlier this decade, when borrowing costs were at or near multi-decade lows, helping them afford costlier homes as prices soared.

About one-third of U.S. single-family home loans in 2004 and 2005 were ARMs, up from 12 percent in 2001...

"I've never seen a soft landing in 53 years," said Angelo Mozilo, chief executive of Countrywide Financial Corp.

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

Prepare yourself for an inflationary wave of easy money. This sort of environment is a large part of the political raison d'�tre for our Federal Reserve System and the system of paper currency it manages.

Helicopter Ben Bernanke will earn his wings by showering America with as much liquidity as necessary to float away the current problem.

So prepare! Roll up your trousers and head to higher, solid ground.

R.
USAGOLD Daily Market Report
(12/05/2006; 16:21:47 MDT - Msg ID: 150011)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

TUESDAY Market Excerpts

December 5 (from Reuters) -- Gold fell below $650 an ounce on Tuesday, reversing earlier gains as the dollar rebounded after a report showed the U.S. service sector grew at its fastest pace since May. February gold at the COMEX division of the New York Mercantile Exchange finished down $3.0 to $647.90. It traded in a range between $643.7 and $654.2.

Greg Weldon, chief exeutive of weldononline, said gold seemed to encounter some selling at the current level because of the dollar's strength. Weldon also noted that a trend was being formed for gold.

"Generally speaking, what you have seen developed over the last several weeks remained intact, and that is simply the gold market appreciates against all paper currencies, debt and stock indexes," which was a very bullish signal for gold, Weldon said.

The U.S. Institute for Supply Management (ISM) said its monthly non-manufacturing index, which measures the services sector of the economy, rose to 58.9 in November, above its median forecast of 56.0. A number above 50 indicates growth while a lower number denotes contraction.

The data cast doubt on the view that the Federal Reserve will cut interest rates in early 2007.

The dollar, which has slid sharply since late November, rebounded against the euro and sterling and pared losses versus the yen.

"We have been stuck in a range recently with resistance as we approach the $650 level on gold," said Andy Montano, a director at bullion dealer ScotiaMocatta.

"We are seeing modeately light physical buying on gold around the $640 area," said Montano, adding that it was normally a time of seasonal strength for gold because of the Indian wedding season.

---(see url for full news, 24-hr newswire)---
MarkeTalk
(12/05/2006; 19:24:49 MDT - Msg ID: 150012)
China to Take Over Foreign Banks
One of my phone calls today hinted strongly that China, through its banking system, is going to rid itself of its mountain of US Dollars by taking over foreign rival banks. This is really a clever way to recycle the overhang of US Dollars and also to buy an incoming-producing asset, provided however that the bank has a relatively clean balance sheet. Such a strategy would also give China more clout in foreign banking markets. I don't think Chinese banks will be shopping for the likes of Bank of America or any other banks with huge derivatives positions and a bunch of nonperforming loans (real estate foreclosures and credit card defaults). It should be interesting to see how it all plays out.
mikal
(12/05/2006; 22:21:47 MDT - Msg ID: 150013)
Leverage "running out"
http://www.ft.com/cms/s/65b2c29e-84a2-11db-87e0-0000779e2340.htmlBanks Warned on Extreme Leverage | Gillian Tett - London - Financial Times | 12 05 06 21:57
The author and Pimco's Bill Gross explain why even the newest leverged instruments are spreading themselves very thin.
Knallgold
(12/05/2006; 22:53:42 MDT - Msg ID: 150014)
Gold ETF Prompts Lawsuit
http://www.thestreet.com/_yahoo/markets/metals/10325953.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NAYou can't steal the idea of simple physical Gold trading'so why makes things more complicate...
Goldendome
(12/05/2006; 23:02:15 MDT - Msg ID: 150015)
Unfunded liabilities
968: When the man comes with the "Means Tester" to see if you glow, that hidden gold will shield you. Gold will not show up on the tester--you'll be able to get your old age bennies--for what they will be worth.

Lotsa changes in the next years. Bankrupt? Only if you can't pay YOUR debts! U.S.? Shucks no. All the debt is owed in dollars. The U.S. Government prints the dollars...They won't run out. They'll pay their debts. Though we may look like Argentina, Brazil, or some other Banana Republic.
Knallgold
(12/06/2006; 00:40:41 MDT - Msg ID: 150016)
Colloidal Silver
http://www.economist.com/science/displaystory.cfm?story_id=8369911"Last week America's Environmental Protection Agency reversed its policy on the use of extremely small particles of silver for killing germs. Henceforth manufacturers seeking to use "nanosilver" in consumer products will have to prove scientifically that it doesn't cause harm to public health."

Ist this true?The article goes on to spread false facts about Silver,"extremely poisonous Silver compounds" "carcinogenic" "any other toxic heavy metal".The term heavy metal is dead because too vague,carcinogenic Silver compounds just doesen't come to my mind,unless if its accompanied by a carcinogenic counterion or organic template.The latter holds also true for extremely poisonous Silver compounds.And wheres the accumulation proved?

The worry about the nano small particles seems unfounded here as well,the technical progress didn't leave Silver behind,its possible to produce colloids with a very high metal to ion ratio,and the size of the particles can go as low as 1nm.One company even has a patent on a process and many are taking the product with NO adverse effect.

The economist article is like those anti-Gold pamphlets we are all used to.

Knallgold
(12/06/2006; 05:48:05 MDT - Msg ID: 150017)
Bloomberg again talking the SGE into Gold derivatives?
http://www.bloomberg.com/apps/news?pid=20601012&sid=a5F5F9p.BXCg&refer=commoditiesChinese Jewelers Welcome Exchange Moves to Launch Derivatives

By Helen Yuan

Dec. 6 (Bloomberg) -- Chinese jewelers, including Zhejiang Sun & Moon Jewelry Co., the country's biggest platinum jewelry maker, welcome moves by local commodity exchanges to launch derivatives trading to help them hedge against volatile prices.

The Shanghai Gold Exchange is seeking regulatory approval for derivatives to trade along with its current cash and cash- deferred contracts for gold, platinum and silver. Derivatives are instruments such as futures and options, whose value is based on, and determined by, another security or benchmark.

``We don't have many ways out when the platinum price surges,'' said Hu Xinhai, vice managing director of the Shaoxing, Zhejiang province-based Sun & Moon Jewelry, in an interview yesterday. ``Derivatives such as a futures contract and gold loans offered by banks will help us.''

Platinum for immediate delivery has risen 16 percent this year and gold has jumped 24 percent, with speculation of supply shortages leading to wide price fluctuations. Platinum price volatility over the past 10 days was 37 percent in the past 10 days, Bloomberg data showed. Gold's volatility was 12 percent.

China, which overtook Japan in 2000 as the world's biggest platinum jewelry consumer, is the biggest gold market following India and the U.S.

The Shanghai Gold Exchange, established in 2002 as part of China's deregulation of its precious metals market, has 22 bank members and 128 gold miners, jewelers and traders. Foreign miners, jewelers and investors are banned from trading.

Price Protection

Sun & Moon has to re-melt jewelry from stockpiles to keep producing when they reduce purchases of the raw material from the exchange when prices surge, said Hu.

Global gold prices have at times dropped overnight and forced Shanghai Lao Miao Jewelry Co. and other companies to sell jewelry at lower than production costs.

``That happened frequently this year, giving us big challenges in cost-control,'' said Dong Jianfei at Lao Miao, one of the city's biggest jewelers. ``I think this situation will be improved if we have more hedge tools.''

In addition to derivatives, the Shanghai exchange is also considering introducing short selling, which enables investors to bet on price declines, Song Yuqin, vice president of the exchange, said Dec. 4.

The Shanghai Gold Exchange has been vying with the Shanghai Futures Exchange for listing of gold futures. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

The existing cash-deferred contracts allow an investor to pay for a contract a few days after the transaction date.

To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

Last Updated: December 6, 2006 05:29 EST
Goldilox
(12/06/2006; 09:57:49 MDT - Msg ID: 150018)
Housing Hollowed out?
from EWI newslettersnip:

The housing market is beginning to resemble a watermelon I once floated in a pond overnight to cool. The next day a small hole was in one end and the red interior was completely gone, hollowed out to the sour green rind, sculpted by little teeth. Some muskrat had a feast.

That memory returned when I saw a chart in this month's Elliott Wave Financial Forecast titled, "A Historic Hollowing of the Housing Stock." It shows a recent near-vertical rise to a half-century record high in the percentage of unoccupied U.S. homes. No stealthy muskrats at work in this case; it's a bear market in plain sight.

During the housing mania, the risky, sub-prime segment of the mortgage industry grew 520% between 2001 and 2005. Lenders ceased demanding full documentation of income and assets. They offered "piggyback" loans financed at 90% to 100% of the home price, and didn't require private mortgage insurance on profitable, high-risk, "sub-prime" mortgages. Loan officers and mortgage brokers coached borrowers to inflate their incomes, and many couldn't even make their first payment. After short-term rates began rising, lenders kept "teaser" rates low, meaning that the first payment adjustment would be big. Then, in further arcane chicanery, many of these loans were packaged and sold to investors in collateralized debt obligations (CDO's), glazing another pane in the glass house of derivatives.

Newspaper articles today describe an accelerating wave of mortgage defaults. As bankers, asset managers and the credit-poor awake from easy-credit dreamland, they find the sub-prime ship submerging. "We are a bit surprised at how fast this has unraveled," said the head of asset-backed securities research at U.B.S.

Sleepyheads are still soothed by the lullabies of economists� the pseudo-savvy seers don't "expect any significant harm to the nation's economy or financial systems." That said, the news articles continue like a Klaxon alarm in the Nautilus:

H&R Block is considering the sale of its sub-prime lending company that lost $39 million in the second quarter.
KeyCorp "changing strategic priorities," and selling its sub-prime Champion Mortgage for 40% below what they expected.
The National Association of Realtor's index for pending home sales fell 1.7% from September to October and was down 13.2% from a year earlier.
Delinquency rates rose steadily in the last half of 2005 and spiked in 2006. The figures don't include quickly defaulted loans that lenders were forced to repurchase.
In October, borrowers were 60 days or more behind on payments on nearly 4% of the sub-prime loans packaged in mortgage securities.
Toll Brothers, the largest builder of luxury homes in the US has seen its stock price slide 45 % over the last 18 months, and said fourth-quarter net income plunged 44%.

Believing that the real estate decline will be confined to certain regions and sectors -- like the new ghost towns near Phoenix -- and that effects of it won't spread through our financial house of cards� may be like trusting a muskrat with a watermelon.

-Goldilox

from a Doc Watson ditty . . .

"Muskrat, muskrat,
What makes you smell so bad?
Sitting around the farmer's patch
Eatin' up all he had, yeah,
Eatin' up all he had!"
ge
(12/06/2006; 10:44:10 MDT - Msg ID: 150019)
Dollar - Yuan Chart
http://finance.yahoo.com/q/bc?s=USDCNY=X&t=2y&l=on&z=m&q=l&c=What is happening?
ge
(12/06/2006; 10:54:05 MDT - Msg ID: 150020)
May be this link works
http://finance.yahoo.com/q/bc?s=USDCNY=X&t=1y&l=on&z=m&q=l&c=Yuan is steadily gaining value.
Druid
(12/06/2006; 11:10:08 MDT - Msg ID: 150021)
A TALE IN THREE E-MAILS
http://www.financialsense.com/fsu/editorials/kirby/2006/1206.html
"And These Are The Implications if Deep Gold Has Actually Been Swapped:

If this un-mined gold has been used as collateral for the swaps of good delivery bars with other central banks, and then sold it to cap the gold price; then as a corollary of this - the un-mined gold is the property of the Treasury Dept. even though Barrick Gold and others are presently mining the deposits.

If my supposition is correct, gold mines in the United States will be expropriated should the USD implode. If gold mines are expropriated in the US, the so-called center of free market philosophy, what chance have gold share owners elsewhere in the world of "cashing in" on the gold price explosion?

All the mines will be nationalized or sur-taxed to death.

This is why you all need to "own" physical gold and silver � bars and / or coins."



Druid: Kirby, doing Sherlock Holmes proud. He's proving up what ANOTHER & FOA stipulated at this site so very long ago.

@MK, thanks for expanding on my post of Julian Phillip's article concerning IMF gold. For those of you who are new to the site here at the castle, I encourage you to peruse the site archives for some of the most, if not the most, insightful commentaries about gold bullion you will ever come across on the net or in mainstream media print, unless of course, you are an insider.

Also, for an excellent read on some background supporting MK's point, read this great article:


http://www.gold-eagle.com/editorials_05/kosares020405.html

Why is Gordon Brown obsessed with IMF gold?
by Michael J. Kosares

I don't completely understand this obsession Gordon Brown has with the IMF gold. Why does he always target gold in his third world debt schemes? He could just as easily call for a multi-nation bond issue or simply ask the various nations for a U.S. Treasuries donation to cover the third world debt.

I'm sorry, but I don't believe for a minute that the chancellor of the exchequer is motivated solely by his concern for Third World indebtedness. I think we all remember that the last time Brown stumped for IMF gold sales, he failed. The IMF opted for revaluation. The result was that the Bank of England let go of a good portion of the British people's gold reserve at cycle low prices. Now Brown is at it again.

What is really behind all this volley and thunder?

In my view Brown's activity now signals the same thing it signaled in 1999 -- the beginning of a major move upward in the gold price.





968
(12/06/2006; 11:20:39 MDT - Msg ID: 150022)
Iran May Reduce Use of Dollar, Tehran Papers Say
http://www.bloomberg.com/apps/news?pid=20601087&sid=a616zL9v6It0&refer=worldwideDec. 6 (Bloomberg) -- Iran, the world's fourth-largest oil exporter, plans to reduce its use of the U.S. dollar in world trade and increase use of the euro, two Tehran-based newspapers reported.
----------------------------------------------------------------------------------------------------------------------
See url for full text...
Topaz
(12/06/2006; 11:31:35 MDT - Msg ID: 150023)
Delivery-PoG drop correlation.
http://www.nymex.com/media/delivery.pdfYou can almost set your watch by the various Pog declines and completion of the bulk of deliveries at Comex, which by association effectively means PoG is dictated by not physical S/D, but by PaperGold S/D.
Curiously, a drop in Papergold demand, despite, or irrespective of Physical demand, will equate to a drop in price.
Tread warily Goldbugs!
USAGOLD / Centennial Precious Metals, Inc.
(12/06/2006; 11:33:01 MDT - Msg ID: 150024)
THREE regions, ONE convenient shopping experience...
http://www.usagold.com/buy-gold-coins.html

shop for gold coins
Sierra Madre
(12/06/2006; 14:35:46 MDT - Msg ID: 150025)
Barrick is PROBABLY a Para-statal Entity

Druid:

What is a para-statal entity? It is a corporation (it can also have a "Trust" constitution) that is owned by a government.

For political reasons - very frequently in socialistic oriented countries - governments want to enter a business; they of course do not go a good job of running any business, but, that is not the purpose of the politicians. The purposes of the politicians are various - having jobs to offer their supporters; closing access to foreign competition; providing a service or a good at lower prices; protecting a field from control by foreign interests...

Anyway, a para-statal company - except perhaps in places like Denamrk or Sweden or Finland or Swizerland - is almost always a moneyloser. The pols don't care much about that - it's not their money, and they get to make political hay out of the "benefits to the people" of the para-statal company, while there are no books to show the COSTS.

Fannie Mae and Freddy Mac are, in fact if not legally, para-statal companies.

And I believe this is the case with Barrick. AS I SEE IT, Barrick is actually under the control of the US government, through the intermediation of credit contracts which place the control in surrogates for the government - the Bullion Banks. The stockholders do not count; the owners of Barrick debt call the shots.

That is why Barrick has an absolutely huge underwater short position, for which they NEVER get a margin call, as happens to ordinary corporations or flesh and blood mortals.

Under this scenario, I believe that Barrick is working with the Financial Power to suppress the price of gold. Am I wrong, or did they settle the lawsuit brought against them by Blanchard, alleging that they acted for the Treasury?

The powers that be require MORE GOLD, so, what does Barrick do? It goes after other producers to buy them out, so that the "para-statal Barrick" can provide more gold to dump on the market.

Maximizing return to the stockholders is not part of the Barrick plan. That's not what it's for. Its function is to provide ammunition to crash the gold price.

The losses - in my humble opinion - are to be found in the enormous short position, which it never will be able to cover, and for which it never has to provide margin.

If we think of Barrick as a "normal" mining company, we are mistaken. It is in fact, a PARA-STATAL COMPANY.

Oh, and by the way, the founder, Peter Munk, a Hungarian Jew, selected the name "American Barrick"; in Magyar, the language that the Hungarians speak, "Barrick" means:

"To f..k" So says Antal E. Fekete, a Hungarian himself.

SIERRA
Goldilox
(12/06/2006; 15:06:23 MDT - Msg ID: 150026)
Para-statal companies
Another was Capital Cities, which once owned ABC, founded by former CIA director Bill Casey. During the Regean administration, ABC News took its marching orders rather directly from the administration, much like FOX (which was an Australian company until quite recently) does today.

One might wonder how many of the PPT "affiliates" and no-bid contractors conform to this definition in this age of revolving doors between top government positions and certain "private" sector entities.

It seems the distinction between government and private is, probably by design, quite blurred when one starts looking more closely at boards of directors, since one of the percs of "government retirement" is often solicitation for board memberships.
USAGOLD Daily Market Report
(12/06/2006; 16:20:57 MDT - Msg ID: 150027)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

WEDNESDAY Market Excerpts

Gold declines as traders book profits

December 6 (from Reuters) -- Profit-taking continued to send gold and silver futures lower on Wednesday, with analysts tending to describe the situation as a correction rather than a reversal of the uptrend that had been in place.

COMEX February gold settled down $12 to $635.90.

"We came into more profit-taking in gold," said Jim Steel, metals analyst with HSBC. "It was inspired by a bounce in the dollar, which has given the market another excuse to take profits from what had been a long-running rally."

On Monday, the single European currency had hit a 20-month high of $1.3367 against the U.S. dollar. At the time, the euro had gained more than eight cents against the dollar since mid-October.

This prompted buying of gold that carried the February futures from an early-October low of $568 to a high on Friday of $655.50 that was its strongest level since the middle of August.

Steel characterized the pullback in gold and silver the last couple of days as a "powerful retreat" but a correction more-so than start of a sustained downward move. "My feeling is the market needed a correction, and that the underlying fundamentals are bullish and remain in tact," he said.

"There is a generally weaker dollar and rising physical demand."

The market's main focus for the remainder of the week will be Thursday's European Central Bank decision on interest rates and Friday's monthly U.S. employment report, observers said. Traders will be watching to see how these events influence the dollar, which in turn often sets the tone for gold due to their inverse relationship.

---(see url for full news, 24-hr newswire)---
mikal
(12/06/2006; 16:23:18 MDT - Msg ID: 150028)
Vultures scramble for "restructuring" business, to pick the bones clean
http://news.yahoo.com/s/ft/20061206/bs_ft/fto120620061446357321Banks Brace for Slew of Defaults By Gillian Tett and Chris Hughes - Wed Dec 6, 2:25 PM EST - Financial Times
Snippits:
"When Goldman Sachs (NYSE:GS - news) poached Lachlan Edwards, one of Europe's financial restructuring gurus, from N.M. Rothschild, the British investment bank, the news set the banking world abuzz in London and beyond.
The big US group is famously adept at spotting where markets are moving. So the July hire suggested that some of the savviest banking brains were quietly preparing for a wave of corporate defaults in Europe - and the associated restructuring work, which can be intensely lucrative.
But five months on, Mr Edwards' move to Goldman is still provoking industry gossip. That is because Rothschild has so far failed to find a high-profile replacement. Senior restructuring officials are in such demand that they are ever harder to come by."

Mikal-- Rothschild, Goldman, you'll find them here, and
other birds of a feather. The author has great talent, no doubt having studied the animal kingdom or even worked
in the field. But a warning is in order- this is NOT
family-oriented material:

""Right now, there is a real war for talent in restructuring," says Antonio Alvarez III, head of Alvarez & Marsal, an advisory boutique. "The smart money is definitely gearing up [for restructuring work]...

Nonetheless, history suggests that rising debt levels will sooner or later trigger problems. While debt-laden private-equity deals - just like huge retail mortgages - might make financial sense at present, the picture could quickly change. Companies would struggle to repay the debt if the cost of borrowing suddenly rose or their earnings declined. Significantly, central bankers in Europe are already raising rates, while some economists are forecasting an economic slowdown in the US - which would hurt.
Indeed, some private-equity deals are running into problems...

This is prompting the restructuring industry to ready itself for a busy period, on both sides of the Atlantic. History shows that when restructuring waves occur, they tend to do so very rapidly - often triggered by an unexpected economic downturn or political shock. Consequently, operators in the sector that wait until the shock hits before they act to expand their restructuring staff tend to be too late. In the next downturn, moreover, super-smart restructuring experts who can navigate the rising complexity of corporate finance will be doubly in demand.
Why so? The reason is that, behind the scenes, the bankruptcy game has changed in recent years, particularly in Europe. While the implications of this shift are not widely visible yet - precisely because the economic climate has been so benign - these shifts could deliver nasty shocks for companies and investors when the next downturn hits.
One of these changes concerns the nature of the investor base...
Either way, both sides agree that this shift will create huge demand for restructuring advice in the future - and probably a shortage of suitably experienced lawyers, accountants and bankers. "Businesses in distress now find that their senior debt is being bought by distress investors such as hedge funds," says Andrew Wollaston, corporate restructuring partner at Ernst & Young. "This type of investor has differing agendas to par holders [the original owners of the debt], so companies will need to turn to specialist restructuring advisers to help them."
"There is now real competition for staff," echoes Mr Alvarez, who has doubled the size of his operation in the past 18 months and has recently been attempting to hire more expertise - only to see potential candidates poached by hedge funds.
This will be good news for the restructuring advisers at the boutiques, law firms and banks, whose fees and salaries are likely to increase. But the losers may turn out to be companies or those who invest in them. After all, the more in fees that is paid out for restructuring advice, the less value there is left in a troubled company.
"You have got so many hedge funds in the market that will be knocking on the doors of a finite number of quality restructuring professionals," says Mr Fennessy. "That means that fees and salaries are going up... At the end of the day, enterprise value [of troubled companies] is sure to diminish.""

Mikal-- Ok, I have edited out much of the gore to keep it legally within the Fair Use Doctrine of International Copyright Law. But don't show post this to your kids. It's still obviously explicitly revealing TOO much of the dirty business of rapacious shareholder and pension pillage, the blatant gluttony and scavenging of "restructuring" monopolies and graphic equity plunder.
Sierra Madre
(12/06/2006; 17:23:10 MDT - Msg ID: 150029)
The model for Great Big Business...

GBB - Great Big Business - has a model for operations:

"Privatize the Profits and
Socialize the Losses".

In other words, the insiders take the obscene profits and leave the carcass with its losses, for the taxpayers to pick up.
TownCrier
(12/06/2006; 17:24:31 MDT - Msg ID: 150030)
CHINA: Gold market more open to local investors
http://www.cctv.com/program/bizchina/20061206/101683.shtml(CCTV) 12-06-2006 -- More local investors will soon be able to personally invest in gold bullion, as the previous metal's investment threshold is expected to fall sharply this week. The new threshold will be from 16,000 yuan upwards for a single investor, a mere tenth of the current standard.

At present, personal investors in pure gold must purchase a minimum of a thousand grams valued at least 160,000 yuan. Gold investors can buy gold contracts, gold bullion and gold jewelry. So far, only the Shanghai branch of the Industrial and Commercial Bank of China can offer investment programs in gold bullion. The branch said they are ready to accommodate the new threshold. Meanwhile, the local base price for gold jewelry rose by 4 yuan on Tuesday, following a price hike in the international gold market.

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

A bit more on yesterday's topic of the Chinese gold market evolution to become more citizen-friendly and conducive to wider personal ownership.

Taking us Another step further down the 'Gold Trail'.

R.
mikal
(12/06/2006; 17:30:37 MDT - Msg ID: 150031)
Gold investors "in for long haul", await inevitable vindication
http://www.businessweek.com/ap/financialnews/D8LRL7K80.htmMining leader sees gold boom continuing | Scott Sonner
The Associated Press - December 6, 2006, 6:35PM EST - SPARKS, Nev. | Excerpt: "Buoyed by high prices, demand from Asia and a weak U.S. dollar, the gold industry has flourished since prices bottomed out in 2000 and probably is only halfway through the current boom, a leading industry official said Wednesday.
"Overall, our market is strong and will remain strong for some time to come," said Ronald Stewart, senior vice president for exploration for Canada-based Kinross Gold Corp., the eighth-largest gold producing company in the world.
"We're probably in the middle innings of this current route," he said in a keynote address to the 112th annual meeting of the Northwest Mining Association."
Mikal-- Business Week and AP readers would have some of this optimism rub off on them after reviewing this attractive story. Also, mining costs rising as indicated here is further proof that the sector has been neglected and ripe for a long rally and rebound as gold's
respectibility returns in spades...
Goldilox
(12/06/2006; 18:08:36 MDT - Msg ID: 150032)
Why The Public Can't Do Anything About The Two Biggest Public Issues
http://www.commondreams.org/views06/1206-21.htmsnip:

by Robert B. Reich

Democrats won control of Congress on two big issues � the war in Iraq and the economy. Yet both issues will remain almost completely out of their control, at least for the next two years.

The President remains commander-in-chief until January 2009. And in that role, according to the Constitution, he has the authority to decide defense policy and military strategy. Unlike Lyndon Johnson, who felt the pressure in 1967 when public opinion turned against the Vietnam War, President Bush is not up for reelection, so public opinion won't sway him. The President said recently he'll stay the course in Iraq � even though the administration's own intelligence review says our presence there is causing more terrorism, not less.

The economy is also out of the hands of Democrats or the American electorate, notwithstanding that most Americans say they don't like the way it's being handled. Because of the huge budget deficits, fiscal policy can't be used to fine tune the economy. The only lever that counts any more is monetary policy, which means Ben Bernanke and the Federal Reserve Board's Open Market Committee are the only game in town.

Bernanke said last week that outside of the automobile and housing sectors, economic growth remains solid, and a tight labor market could spur inflation. Translated, this means the Fed won't lower interest rates. It may even raise them.

Bernanke is wrong. Most peoples� wages are going nowhere, and the auto and housing slumps could turn into a recession, especially if the Fed raises rates and chokes off demand. But there's nothing anybody can do about Bernanke's wrong-headedness.

Like the decisions of George Bush as commander-in-chief of the military, the decisions of Ben Bernanke and his Open Market Committee � the commanders-in-chief of the economy � are beyond democratic control.

That's democratic with a small "d."
Topaz
(12/06/2006; 19:13:32 MDT - Msg ID: 150033)
Dmitry Orlov on collapse preparedness.
http://energybulletin.net/23259.htmlSome great one-liners amid pretty serious implications.
...via jesse, tks.
Paddington
(12/06/2006; 20:08:01 MDT - Msg ID: 150034)
Colloidal Silver & The Economist
Hi Knallgold, I started reading the Economist when I was 14 years old at school doing Business Studies O/A level and I was a loyal subscriber for many years until I started to notice a bias in their reporting. As everyone on this board surely knows, the Economist hardly ever talks about gold even as the price has more than doubled

mmmmmmmmmm......

Put it this way, I wouldn't subscribe to that flimsy paper magazine even if they paid me. They are 50% owned by the Financial Times, another newspaper that is not exactly pro the metals.

As Ron Paul pointed out, if they invaded Iraq because Saddam Hussein switched to Euro's, don't you think they will try every last trick in the book especially now that silver is rising ? Silver is, I am sure, one of the first lines of defence against the US$.

I have also done quite a lot of research into CS and from what I can see the number 1 pioneers in this area are Beiersdorf AG, a �10 billion multinational corporation whose research and development is based on more than 120 years of expertise. Beiersdorf own the Elastoplast Silver Healing Bandage that is placed on open wounds. You can see for yourself how the silver ions destroy germs at this webpage: http://www.elastoplast.com.au/products_silver_how.asp

I doubt very much that Beiersdorf would risk the integrity of such a prominent and established brand by providing false information because they have too much to lose. Elastoplast has been around since the 1930's

The short silver traders on the other hand have already lost too much......... including their honour !

Paddington
(12/06/2006; 20:13:22 MDT - Msg ID: 150035)
Colloidal Silver & The Economist
http://www.elastoplast.com.au/products_silver_how.aspHere's the link again
Noble1
(12/06/2006; 20:23:36 MDT - Msg ID: 150036)
@Topaz msg#150023

Your message rings loud and clear and echoes throughout these great stone halls. MK, TC and others have preached this to us for years trying to get it through some of our thick skulls. Interesting that it was recently confirmed in the mainsteam by Mr. Kelvin Williams, former director of Ashanti Goldfields, in an address before the London Bullion Market Association's Biennial(sp?) Dinner on November 2, 2006.

His Words:

"Another distinctive feature is that the balance of supply and demand for the metal plays only a minor role in the pricing of the metal. This is a market where price direction is determined largely by investors or speculators in the derivative sector of the gold market, and not by physical consumers or physical sellers of the metal."


Disclaimer: I still am at odds with most at this forum regarding the ETFs and their potential effect on pricing in the market.

Remember:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Alan Greenspan 1966

AG reminds me of that eccentric billionare in the movie CONTACT that was accused of orchestrating the greatest hoax in the history of mankind. When I read his writings I can only think that he knew exactly what he was doing and funneled as much of the world's wealth, goods, and labor into US hands as he possibly could before the final endgame.

Best Regards,

Noble1
Gonlyold
(12/06/2006; 21:25:17 MDT - Msg ID: 150037)
FDA Positioning Against Silver Coins?
Ref: Knallgold, msg #150016

Since the FDA appears to be going after collodial silver, this is circumstantial proof that CS works. I'm not a doctor and I don't give medical advice, but I feel CS works. Cost is probably the reason the FDA doesn't like it. Imagine treating your own infections and staying away from doctors' fees. After all, We the people cannot have control of anything, even our health.

The article attempts to smear CS by bringing up argyria, the grey or blue skin condition supposedly caused by CS. My research seems to indicate that some compound, I think made from a certain salt, and silver is the culprit. My chemistry class escapes me presently. Some people use salts to expedite the process of making CS. I stay away from salts altogether: I only use pure silver and distilled water to make CS. It's hard for me to imagine that pure silver and distilled water would cause any problem.

But the real issue of concern for USAgold against the FDA's policy ought to be over the nanotechnology issue. The article brings out that "Over 350 products containing nanomaterials are now on the market, with silver as the most common ingredient by far." and "...nanoparticles make it easier for them to slip through the skin...". Now consider silver or silver clad coins. These coins wear out just like any other coins. And when coins wear out, where do all those nanoparticles go? How about on and through the skin of your fingers, or your clothing. H-m-m-m-m....

The statement, "Henceforth manufacturers seeking to use "nanosilver" in consumer products will have to prove scientifically that it doesn't cause harm to public health." identifies a possible bad policy for silver collectors. Does that mean the henceforth silver coin manufacturers will have to prove scientifically that silver coins don't cause harm to public health."
Gonlyold
(12/06/2006; 21:54:31 MDT - Msg ID: 150038)
Correction
Please change all references concerning FDA to EPA. Sorry.
Goldilox
(12/06/2006; 22:19:58 MDT - Msg ID: 150039)
Ag Skin discoloration
@ Gonlyold,

My Chemistry was also many years ago, but I recall that Silver Nitrate (AgNO3) was the skin-offending culprit.

Totally benign, but not washable. We could always identify novice Chem and Bio students in the fall semester.
Goldilox
(12/06/2006; 22:28:10 MDT - Msg ID: 150040)
Infinite Liquidity?
http://64.29.208.119/archive_comm_article.asp?category=Guest+Commentary&content_idx=59374snip:

The question above emerges from the clear picture of a global economy still awash in credit availability and liquidity. By any historic measure, this appears to be the case AFTER 17 rate increases by the Federal Reserve Bank. These increases are referred to in the conventional media as TIGHTENING. Some other central banks such as the ECB have also raised rates a little. Liquidity in such countries across the globe is still ample in spite of such pathetic efforts.

Each quarter, the Federal Reserve publishes a curious report called the Z1. It is otherwise known as "The Flow of Funds Report". This may be one of the few of the more honest statistics available from our usually statistic spinning government. This report includes numbers available from other central banks around the globe, and blatant rigging of the numbers as found in the CPI or GDP would show up in differences nakedly.

The Bank for International Settlements collects the flow of funds information between nations and would question the discrepancies. One area subject to this quarterly reporting is what is known as ROW. Translated, this stands for "Rest of the World". This interesting number tell us how much U.S. dollar Financial Assets the ROW holds. At the end of the 2nd quarter, this number has mounted to $11.6 TRILLION! At the beginning of 2003, this number was in the $7.6 Trillion range. This willingness to accumulate enormous incremental amounts of U.S dollar assets is one of the primary sources of liquidity. The largest percentage of such assets is in the form of debt with increasing willingness on the part of ROW to buy corporate paper, in addition to their longstanding accumulation of Government and Agency debt.

The third quarter running rate for the year for the expansion of ROW was in the $1.3 TRILLION range. This was slightly down from the record $1.4 Trillion the previous qtr but exponentially up from the mere hundreds of billions a few years ago.

The author, with a rapidly depleting cadre of bears, has caviled at this expanded borrowing as unsustainable for an inordinately long time. Obviously, this analysis has, so far, been incorrect. What has occurred in, not only the growth of ROW, but also other measures, has been phenomenal. Example: Reserve holdings of the ROW are over $4.5 Trillion. Reserve holdings of Russia, a 1999 bankrupt, exceed $300 billion. China will, in the next month, pass the $1 Trillion mark, having exceeded the massive $900 Billion plus the Japanese hold. The most recent accumulations have been in the petroleum states as the price of energy advanced, although there has been a near term diminishing of this as energy fell off slightly. In contrast U.S. reserves are $78 billion.

What is apparent several years after the Federal Reserve took rates to near 0% and engineered a consumer borrowing driven recovery in the U.S. is the gigantic expansion in the Trade Deficit. This resulted in humongous U.S. dollar flows into the exporting nation's selling entities. They, in turn, sold the U.S. dollar to their banks and, in turn, to the central banks in these countries. Virtually all of the central banks purchased these U.S. dollar through a concomitant issuance/increase in their local currency. This expanded local currency money supply obviously spurred local economies and consumption and investment. This beneficial result has persuaded the various central banks to continue the cycle. The largest players, China and Japan, along with many of the Asian and other surplus states, have also been more able to hold their currencies from appreciating, continuing the export boom and completing the "virtuous" circle. The Greenspan theory that the U.S. uses a "global savings surplus" is not quite correct but the ROW using the offset currency created to foster internal booms is the case. The ROW have recently had the benefit of rising local house prices due to excess money supply creation and low interest rates in their economies nearly universally. Their stock markets, in recent times, have even surpassed the U.S. equity markets in rising prices. Unemployment globally hits new lows and consumption new highs.

The reflow of credit into the U.S. occasioned by the central bank repatriation of the borrowed trade surplus dollar went largely into U.S.Treasuries and Agencies. This has "freed up" the finance sector (banks, investment banks, hedge funds, private equity etc). in the U.S. to stoke the fires of "private equity deals" (formerly the invidious "leveraged buy-outs" of the 1980's), the burgeoning world of structured finance and commercial real estate as well as the much publicized residential real estate expansion and price climb.

All across the credit spectrum globally there has been an historic shrinkage in risk spreads. Global excess liquidity is certain to cause such shrinkage as the current era of unrestricted global money flows and yield/return seeking financial institutions searches out any modicum of increased return.


There has also been a global diminution in credit problems. With rampant liquidity and tremendous creation of unregulated pools of finance, the bad deals get refinanced by less risk averse entities rather than being allowed to find their economic demise as might have been the case in more normal liquidity environments.

Underwriting standards have also been considerably relaxed in this era of abundant liquidity. Perhaps the area most benefiting from excess liquidity has been the wondrous multi-trillion dollar area of financially engineered structured finance. Back in the middle ages, the transmutation of lead into gold was the alchemist's dream. No evidence of success in history. Modern alchemy in the form of financial engineering seems to have broken that barrier. While we understand all of the methodology and development of ratings which transforms a pool of mortgages (double A would be a high rating for the best and BBB- not a bad rating for a sub-prime in spite of the collateral) into 70% AAA and another 7-14% into AA. These trillions of new product in this cycle are yet to be tested in a bad economic environment. Financially engineered product is not restricted to the U.S.; Europe and the "Anglo" nations are increasingly adept in their utilization of it. The "Anglo" nations (Britain, Australia, New Zealand etc) are a bit ahead of the U.S. in the interest rate cycle. They saw housing excess and incipient inflation earlier and instituted rate increases as much as several years ago. Some of them "paused" earlier in their increases and re-ignited house price inflation and are now grappling with the results.

Also new in the current economic expansion is the wondrous product known as the credit default swap. If a buyer of credit product should have any concern about underwriting or spread compression, the over the counter market of cds can structure comfort on demand. There has been little written to document it but the development of this "risk management" product has to also contribute to the burgeoning liquidity as a collateral enhancement should holders of debt instruments wish to borrow, a spread narrowing device and a heightening of liquidity for all existing debt given the willingness of over the counter providers to provide "bespoke" or tailored protection on demand. Should this theorem be correct, it is also global and immense as the cds market is over $27 TRILLION and growing exponentially.

As mentioned at the outset, the oceans of liquidity already and yet to be created are certainly dependent on the willingness of creditors to continue to accept newly generated U.S Dollar debt. This acceptance must be on both the quality of the credit, the stance of the issuer, governmental or non-governmental and the market view of the currency of issuance; in this case the U.S. dollar To date that has not been a problem. The debt, in the last 18 months has also had the advantage of constantly rising rates/yield to the buyer. This has provided a differential and continues to provide a differential against debt denominated in most of the few other "global" currencies. There is still a 1.75% advantage against the euro and 5% against the yen on the short end with lesser but still significant favorable differences on the longer end.

-Goldilox

Too long to post all the excellent points here. Click the URL for more.
Knallgold
(12/06/2006; 23:39:14 MDT - Msg ID: 150041)
Colloidal Silver
Thanks for responding,Gonlyold,G-Lox and Paddington (haven't seen you posting for a long time).

"Does that mean the henceforth silver coin manufacturers will have to prove scientifically that silver coins don't cause harm to public health." ---- Don't tell them,Gonlyold,they might expand this to Gold coins...

Working myself in (organic) Chemistry,I put this up just in case my knowledge has bigger holes than I am aware of ,particularly the carcinogenic quote hit me flabberglasted,but hey,almost anything is labeled carcinogenic these days.These health-and-security masspsychosis is starting to get on my nerves (the anti-smoking fascism being the most prominent playground of all the poor failed politicos)

Its indeed Silvernitrate which is used as a "skin marker",you can easily spot someone which had his hands on a prepared surface :-) But this is external,I doubt that small amounts will get beyond the stomachs hydrochlorid acid which will precipitate it almost quantitatively as Silverchloride.

Being the experimenter that I am,I used a few times the hot tub Silver which is much more concentrated (500ml treats a 440gallon tub-its totally black!).No adverse reaction noted,no bad reaction in the tummy,maybe you can provoke a fever reaction when ill,but certainly I'm as white as before.Silver is indeed harmless-btw someone did question the FDA with a FOIA (its somewhere on the net) about documented cases of deaths,argyrie,ill reactions etc. and got the response:we can't report anything.

Curiously with Gold, the people still attribute it to a positive health (Rheumathitis,Gold injections).


Topaz
(12/07/2006; 00:02:54 MDT - Msg ID: 150042)
@Noble 1.

As simply a voyeuristic market watcher wasting an hour or two/day on this stuff, I'm sure sharper pencils than I are all over this and consequently thus prepared ...the rest we can only hope for.

Good luck to you N1.
968
(12/07/2006; 00:55:50 MDT - Msg ID: 150043)
Iran replaces dollar with euro in most oil dealings
http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=416994TEHRAN, Dec. 5 (MNA) � Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, an informed source with Iran's Oil Ministry said here on Tuesday.
Oil Ministry has taken the policy to substitute dollar with euro, and begun to implement it for most of its oil dealings, the source who spoke on the condition of anonymity told the Mehr News Agency.

"This can maintain the real value of Iranian oil," he added.
------------------------------------------------------------------------------------------------------------------------
Does this source mean that a euro or a 'gold-euro' in a monetary system with a Freegold reserve-paradigm can maintain or replace the real value of oil ? Real value for real (tangible) value instead of real value for worthless paper ?
Knallgold
(12/07/2006; 01:42:00 MDT - Msg ID: 150044)
968
For me,this is the first big official oil for euro announcement.A marker on the trail.And it gets clearer why all the pressure on Iran the last months happened-the article also suggests "the last several months",now that the Bush administration got two legs amputated,they felt secure to announce it.
mikal
(12/07/2006; 06:06:08 MDT - Msg ID: 150046)
Credit environment is different, bankers insist
http://www.ft.com/cms/s/78d1c660-8554-11db-b12c-0000779e2340.html Credit markets reach turning point | FT.com - Capital markets | David Oakley - Dec 6
Good, short article quoting analysts from Dresdner Bank and Morgan Stanley. One of them notes the prevalent denial and complacency on what has happened. But some of the comments, like nearly all found in corporate media, are based on U.S. official GDP allegations, even where they claim to depart from conventional wisdom.
mikal
(12/07/2006; 06:29:17 MDT - Msg ID: 150047)
(No Subject)
http://www.ft.com/cms/s/41305eac-85ee-11db-86d5-0000779e2340,_i_rssPage=7c485a38-2f7a-11da-8b51-00000e2511c8.html ECB Raises Interest Rates to 3.5% | FT.com / World / Europe
- Ralph Atkins - Dec 7, 2006
After BOE leaves rates unchanged, ECB raises again.
ECB head Trichet's comments will later be taken in by market observers, but he's widely expected to
continue "vigilant stance" against inflation with corresponding rate hikes next year.
Goldilox
(12/07/2006; 06:29:17 MDT - Msg ID: 150048)
Euro for oil
@ Knallgold,

Actually, the very FIRST announced "Euro for oil" dollar displacement was a formal request from Saddam Hussein to the UN "food for oil programme" circa 2000. That was pretty much the "last straw" for his "benefactors" Rumsfeld and Cheney.

With their protoge Gates wallking through Senate confirmation with nary a question of his involvement in the Iran Contra drugs for guns scandal (they still haven't told us who they sell the heroin and cocaine to), Iran is likely to be treated similarly, unless others join ranks soon. Narco-politics still seems to rule the roost in Washington AC/DC.

I'm waiting to see if this is the first salvo of the web bot's "group of five renounce dollar hegemony."
968
(12/07/2006; 06:56:53 MDT - Msg ID: 150049)
Fannie Mae erases $6.3 billion in profit
http://news.yahoo.com/s/ap/20061206/ap_on_bi_ge/fannie_maeWASHINGTON - Fannie Mae erased $6.3 billion in profit in a long-awaited restatement Wednesday capping the accounting scandal that stunned financial markets and brought the ouster of top executives and a record fine against the government-sponsored mortgage leader.
------------------------------------------------------------------------------------------------------------------------
...without comment...
968
(12/07/2006; 07:01:23 MDT - Msg ID: 150050)
To put Fannie Maes' $6 billion in perspective...
http://www.interfax.ru/e/B/politics/28.html?id_issue=11643667Russian arms exports to hit $6Bln mark in 2006

MOSCOW. Dec 7 (Interfax) - Russia's military-technical cooperation with foreign countries will reach new levels in 2006, Russian President Vladimir Putin announced Thursday.

"This year we will reach $6 billion," Putin told the government commission for military-technical cooperation with foreign states.

Russian weapons and hardware are in high demand worldwide, he said.

968
(12/07/2006; 08:36:29 MDT - Msg ID: 150051)
EU says Iran free to sell oil in any currency
http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=47848&NewsKind=Current%20AffairsLONDON, December 7 (IranMania) - A spokesperson for the European Commission declined to comment on media reports that Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, IRNA reported.

"I have no comment. This would be a free decision for a government or company to use a particular currency than its own for invoicing the products that it sells," said EU spokesperson for economic affairs Amelia Torres.

She was replying to a question on the issue by a reporter during the daily Commission news conference in Brussels.

"It is not something we encourage or discourage. We leave it to the markets and the forces in the market," added Torres.


Goldilox
(12/07/2006; 09:23:07 MDT - Msg ID: 150052)
Oil for Euros
You'd think this story merits some attention, but a cursory check of the business sections at CNN, BBC, and CBS Marketwatch found NO MENTION at all.
Sierra Madre
(12/07/2006; 09:51:39 MDT - Msg ID: 150053)
968 - Yesterday the dollar, today the euro, tomorrow - ?

Well, Iran may decide to receive Euros in exchange for oil, instead of Dollars as has been the recent history.

However, true payment cannot be effected with Dollars, nor with Euros. These are means of exchange, yes, but not of PAYMENT. Payment is the delivery of something in exchange for something. Dollars and Euros are nothings - no real content to them, at all.

The Chinese and other Central Banks will eventually discover that they have been accumulating simple digits in payment of real stuff. Central Bankers are rather dense people, but finally, the truth will break out upon them: "We have been had!"

Our ideas filter Reality into our minds. Mistaken ideas produce mistaken perceptions of Reality. It takes a functioning mind to see through the fallacy of "money" that consists of nothing at all - money that is only pure NUMBER.

Now, when Iran gets the bomb - which they most probably will, sooner or later, now they have put their mind to it - then they will be able to reject both Dollar and Euro, and ask for real payment of their oil. Real payment will require trade (sending tangible stuff to Iran), or tendering that "barbarous metal" for the favorable or adverse trade balance. (Not for all the oil!)

That would require a very much higher valuation for gold, not in terms of Dollars or Euros, but in terms of what things one can buy with it.

I wrote "[Iran]will be able to...ask for real payment..." Of course, they might not want to; they might not yet understand the present money fraud. But at least, the countries that are sufficiently well-armed will be able to think more clearly regarding their real interests.

The movie of life moves at one frame per day.

SIERRA
USAGOLD / Centennial Precious Metals, Inc.
(12/07/2006; 11:04:09 MDT - Msg ID: 150054)
Give the gift of GOLD! -- Order before TOMORROW at 4:00pm Denver Time
http://www.usagold.com/gold/special/angel.html
Purchase online or by phone -- speak with Marie at Ext. 106

Angel gold coin pendant
Goldilox
(12/07/2006; 11:25:35 MDT - Msg ID: 150055)
Real value
@ Sierra Madre,

Your Iran scenario is not unlike what the Chinese discovered in their attempted purchase of UnoCal.
Goldilox
(12/07/2006; 11:38:04 MDT - Msg ID: 150056)
After-market
http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteNice post-COMIX bump. Let's see if it holds.
arbyh
(12/07/2006; 11:47:39 MDT - Msg ID: 150057)
Very strange friends and bed-fellows.
@ Sierra Guiness - Brilliant!!!! You out did yourself.

It is true a hungry man wouldn't trade away food for paper, nor water for weapons. Apply same principal on up all the commodity scenarios and there you have it.

Perhaps those are pretty much all of USA strong suits in export: food, paper currency, (should be) water, and (shouldn't be, but is) weapons.
The promise is only as good as the promisor. So why would the holder of real commodity oil trade for paper promises?

How well are we prepared for collapse? Will we collapse at all, or just consolidate? If we collapse, will we collapse suddenly, or will we just economically sort of waste away like a rudderless ship? A mining town that just closed the mine. If it takes on that look, how long would it remain? Until what happens? Gung-ho efforts, or goat screw cluster fack?
The writer of compare and contrast SU to USA in economic collapse prep, culture etc. did an interesting job. I though a little too much flattery to SU. He did point out some very truthful short comings in our way of life though that would amplify difficulty.


SU has come along way since their bankruptcy. They seem to be entrenched in weapons sales, oil market development, and setting up political opposition to us as they develop allies where ever they wish to be opposed to the USA position...as in Iraq. Iran, Venezuela, Cuba, and N. Korea.
Russian Weapon sales: Subs and all sorts to China; Anti-aircraft weapons (plus what else) to Iran; all sorts of small arms and such (aircraft too?) to Chavez's Venezuela. That is just what we see and hear about, what other levels of intrigue are they up too? - Russian spy poisoned with Uranium radiation.
Very strange friends and bed-fellows.
Thoreauly
(12/07/2006; 12:56:28 MDT - Msg ID: 150058)
Closing the 'Collapse Gap'
@ arbyh

While I fear that that Dmitri Orlov's predictions regarding a US collapse may well come true, he misses the mark (Marx?) when he designates our system as capitalist. For to read The Communist Manifesto and reflect upon the ten components of its hoped-for utopia is to understand that the US has adopted them all, whether directly -- "A heavy progressive or graduated income tax," "Centralization of credit in the hands of the state...", "Free education for all in public schools" -- or indirectly -- "Abolition of property in land" (think property taxes and eminent domain), "Centralization of the means of communication and transport in the hands of the state" (think the FCC, the ICC, the USA PATRIOT Act).

In other words, what will collapse is not a society built on free market capitalism but a welfare-warfare state propped up by the complete and utter corruption of money.
mikal
(12/07/2006; 13:04:35 MDT - Msg ID: 150059)
Musing on posible futures
http://business.guardian.co.uk/story/0,,1963092,00.htmlForget shopping, this could turn into a crash
As the dollar's fall continues, the US must decide between growth or curbing inflation
Larry Elliott, economics editor
Monday December 4, 2006 - The Guardian - Excerpts:

"Bernanke's problem, however, is that there is the world of difference between a gentle but steady decline in the dollar and a pell-mell crash. A controlled depreciation would ease strains caused by global imbalances - US trade deficits, Asian trade surpluses - and insulate the US economy a little from the impact of a severe housing market downturn. A crash in the dollar would lead to turmoil on the world's markets, an increase in long-term US interest rates and a vastly increased risk of a hard landing."

"All in all, the prognosis is not good for the dollar. The economy is weak, policymakers seem paralysed and speculators look ready to stampede for the exit. Doing nothing is sometimes the least bad option; it is hard to see that it will be this time. There is a risk that the Fed will get badly behind the curve, and that every bit of gloomy economic news triggers more selling of dollars. Bernanke needs to start preparing the markets for rate cuts or he could be facing a real panic."

Mikal- Some good basic economics and observations from this Guardian editor. Also, interesting comparisons are made between Britain and US.
mikal
(12/07/2006; 13:44:19 MDT - Msg ID: 150060)
Fed now between a rock and a bullet train
http://www.ft.com/cms/s/e60b53b4-855d-11db-b12c-0000779e2340.htmlCautious Fed adopts wait-and-see policy
By Krishna Guha in Washington - December 6 2006 -

Mikal-- This is a terse, yet broad outline of
certain key economic conditions having direct financial, social, political etc. effects. A conundrum you should read (and likely appreciate)in full:
Excerpts: "The Federal Reserve is keeping a watchful eye on volatile markets, as it seeks to understand why the dollar and interest rate futures reacted so dramatically to a spate of weak economic data."

"Moreover, the Fed is not sure the market is wrong. Policymakers simply see other scenarios as plausible too.
Therefore, the Fed will wait, keep updating the market on its own thinking and hope that incoming data either confirm the market view or pull market pricing back towards its own base case.
If, however, Mr Bernanke gets to March and the gap remains as wide as it is today, he will face a tough choice: bow to the market and cut rates, or surprise investors and risk the consequences."
TownCrier
(12/07/2006; 14:10:13 MDT - Msg ID: 150061)
Deutsche Bank plans Islamic instruments
http://www.gulfnews.com/business/Banking_and_Finance/10087578.htmlDubai: Deutsche Bank, through its global mutual fund arm DWS Investments, announced yesterday it would launch five Sharia-compliant mutual funds for investors in the UAE and Bahrain.

A specialist fund range, to be marketed as DWS Noor Islamic Funds, has been developed to meet the specific needs of Islamic investors, Deutsche Bank said in a statement.

"We aim to continually expand the DWS Noor offering into further asset classes and investment styles, delivering a range of Islamic products with the same breadth and depth as our conventional mutual fund range."

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

Have you ever thought of equating investment banks with Baskin-Robbins, with at least 31 flavors, there's surely something that can to appeal to each and every one.

But that's just dealing on the pedestrian level.

Upon the day Zeus, atop his mountain, takes an active interest in the details of my puny investment decisions, I'd just as soon scrap altogether the petty dabbling with thunder and lightning bolts. I'd consolidate the earnings of my personal productivity through simple yet solid savings in the form of gold coins and thumb my nose at Olympus should ever those prying eyes bother to look my way.

One easy flavor and you're off the radar screen. For anyone who gives a hoot about lightning bolts, is that so difficult?

R.
arbyh
(12/07/2006; 14:15:05 MDT - Msg ID: 150062)
Question:
What happens to Las Vegas and the casino's in the event of severe economic contraction? They just chase a new market with overseas flight specials, or mega vacances, or we as American's just keep going trying to win where most other aspects of normalcy have been altered? Perhaps Las Vegas Casinos will be the shining institution that will not falter. Will the neon glow on....?
TownCrier
(12/07/2006; 14:18:50 MDT - Msg ID: 150063)
After The Correction, Gold At US$700/oz
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=5AA7E773-17A4-1130-F5F76C1333D47FE3FN Arena News - December 07 2006

(excerpts) --- According to ABN Amro, forecasting a weaker US dollar in the year ahead doesn't necessarily have to go hand in hand with expectations of falling US interest rates. ABN Amro maintains the Federal Reserve Bank will raise further towards the end of 2007. But the US dollar is going south nevertheless, the bank argues.

ABN Amro thinks this is likely to provide precious metals with an extra pair of wings next year which should see the likes of gold, silver and platinum perform much better than their industrial peers who should experience downward price pressure because of slowing economic growth.

The broker notes gold has even outperformed the euro throughout 2006. This is seen as further testament to the metal's revived role in the monetary system. Where other experts are calling for a top in the EUR/USD cross next year of up to 1.40, ABN Amro economists believe the dollar/euro could surge as high as 1.45 in 2007.

Taking a current euro gold price of EUR485/oz on currency conversion alone this would imply a US$705/oz gold price, or further upside of circa 10%.

ABN Amro's current forecast is that gold bullion will average US$610/oz in 2006 and rise a further 11% to an average US$675/oz in 2007 and 2008.

The equity broker does highlight this should be regarded a directional call only because, should a US dollar rout eventuate, nothing would stop gold from reaching higher.

ABN Amro believes investors and gold enthusiasts should also keep an eye on oil for possible extra support.

UBS forecasts gold at US$660/oz by year end and at US$690/oz in three months. ... UBS expects gold to average US$700/oz in 2007.

^---(from url)---^
Shermag
(12/07/2006; 14:49:15 MDT - Msg ID: 150064)
What happens to the casinos?
They are in for a big hurt. They are huge, and need high volume to remain viable, and cannot rely only on the international wealthy.
USAGOLD Daily Market Report
(12/07/2006; 15:11:52 MDT - Msg ID: 150065)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

THURSDAY Market Excerpts

December 7 (from MarketWatch, Reuters) -- Gold futures closed higher for the first time in three sessions, as a two-session decline of $15 an ounce translated into a buying opportunity for some traders.

The market also digested news that the European Central Bank lifted its key interest rate and awaited U.S. data on employment due at the end of the week.

"The correction that we've seen over the past few days has essentially been profit taking, and it's run its course," said James Steel, metals analyst at HSBC.

"Gold has fully corrected an overbought condition and is now preparing to make a run above key resistance at $650," said Peter Grandich, editor of the Grandich Letter. "Continuous weakness in the U.S. dollar should be the main driving force," he said.

The February gold contract rose $1.10 to close at $637 on the New York Mercantile Exchange, after falling to a low of $629.40, a level it hasn't seen since Nov. 20.

Providing support Thrusday, the dollar traded a touch lower versus the euro after the head of the European Central Bank signaled further interest-rate increases for 2007, but dented hopes for a rate hike in February. But gold traders also awaited the Friday morning government report on U.S. nonfarm payrolls for November to see what effect the data would have on the dollar.

Ned Schmidt, editor of the Value View Gold Report, said Thursday's decline offered an "incredible opportunity" -- a "short-term buy signal on gold."

He said, "Buy gold when [the] Street is inebriated on paper asset bullishness," noting that he expects "U.S. economy will enter [a] recession in January."

---(see url for full news, 24-hr newswire)---
TownCrier
(12/07/2006; 15:21:23 MDT - Msg ID: 150066)
Treasury moves against terror financiers, facilitators
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564854123145857509December 7, 2006

WASHINGTON (AP) - The Treasury Department took action Thursday against five people it accused of providing financial support to terror groups as well as facilitating terrorist acts in Iraq, Kuwait and elsewhere.

The department's action means that any financial assets belonging to these people found in the United States are frozen, and Americans are barred from doing business with them.

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

To be sure, "Zeus" takes many forms -- some of them mythological, and some of them very earthly.

R.
Sierra Madre
(12/07/2006; 15:34:51 MDT - Msg ID: 150067)
Thoreauly and Arbyh: your comments

Thanks Arbyh for the comment! Indeed, Orlov tends to paint the USSR as a happier place than it was, or so it seemed to me, too.

Thoreauly - the USA is certainly well on the way to the Marxian state, as you point out. Here, a few thoughts which might be of interest to some lurkers at this excellent Forum.

Reading "Red Symphony" - the purported confession of Christian Rakovsky, real name Chaim Rakover, made in the Lubianka prison from whence he was taken out to be shot, during the time of Stalin - appears to make it clear to me that the Stalin/Trotsky fight was about whether control of the Soviet Union should be by a Nationalist Communist (which Stalin was) or by International Communism run by International Banking, which was behind Trostky (Lev
Bronstein, from the Bronx). (Red Symphony is available at www.savethemales.com (or org.) run by Makow.)

Putin appears to me to represent Russian Nationalism rising from the ashes of 70 years of Communism. And who are Putin's enemies? The Internationalists whom he ably ousted, such as Berezhovky, a billionaire refugee, and the other guy, whom he has in jail - and whose shares in Yukos the oil company, now appear to have been mysteriously "ceded" previous to his arrest, to Mr. Rothschild in Great Britain.(How convenient!) No wonder the "British" press (F.T. et al) is after Mr. Putin's hide. Place your bets: Putin or Rothschild prevails?

Now it seems to me that, when, not if, the Crash outlined by Orlov takes place in the US, the American People will be screaming for Socialism to take care of them, since conditions will be so terribly extreme. But, given who runs things in the good old U.S. of A., it will be International Communism (not necessarily called that, perhaps it will be given another name) run by all the types we know too well, Trotsky's kin, now known as "neo-cons" and who were formerly Trotskyites.

Excuse me for being so brutally pessimistic, but if that takes place, I expect at least 5% of the 300 million people in the U.S.A. to either migrate - where to? Maybe Russis of all places! - or be "liquidated", a mechanistic term used to avoid saying, "murdered". That would be some 15 million Americans. All readers of this Forum would likely be on the list, myself and family included.

This enormous persecution would give rise to a resurgence of deep religious belief and in that, there would be some hope for the future. Pardon me for writing:

"A mighty fortress is our God
A bulwark never failing.
Our shelter from the stormy blast
And our Eternal Home."

Rakovsky stated in his confession that Christianity was the only real obstacle to Communism. Whether the document is authentic, is not ascertained, but it may be authentic.

So what does all this have to do with GOLD? Everything!

SIERRA

M.K.: if you want me to lay off, please say so, I'll be happy to oblige.
Chris Powell
(12/07/2006; 15:55:41 MDT - Msg ID: 150068)
IMF said ready to propose proper accounting for central bank gold
http://publish.vx.roo.com/thestreet/portal/?clipId=1373_10326627&channel=Market+Strategy&puc=yahoo5:30p ET Thursday, December 7, 2006

Dear Friend of GATA and Gold:

Neal Ryan, research director for New Orleans coin and bullion dealer Blanchard & Co., plaintiff in the heroic and rather successful gold price-rigging lawsuit against Barrick Gold, reports in an interview today with TheStreet.com that the International Monetary Fund is about to propose proper and transparent accounting practices for leased and swapped central bank gold.

Ryan tells TheStreet.com's Simon Constable that he has written a study about the misleading accounting of central bank gold reserves, that he has made recommendations to the IMF, that the IMF has replied favorably, and that he expects an announcement from the IMF this month.

Of course the misleading accounting of central bank gold long has been a big issue for GATA, thanks largely to the investigation done by GATA consultants James Turk, editor of the Freemarket Gold & Money Report and founder of GoldMoney, and Andrew Hepburn of Sprott Asset Management in Toronto.

You can view TheStreet.com's interview with Ryan here:

http://publish.vx.roo.com/thestreet/portal/?clipId=1373_10326627&channel=Market+Strategy&puc=yahoo

But it seems that the link is likely to become outdated soon, so hurry.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Goldilox
(12/07/2006; 16:18:11 MDT - Msg ID: 150069)
Foreclosure Day
from EWI newslettersnip:

By Alan Hall

The first Tuesday of every month is Foreclosure Day in Atlanta.

In a scene that could be a storyboard right out of Conquer the Crash, an article in the Atlanta Journal on Wednesday showed a Dickensian photo of "investors" crowding the Fulton County Courthouse steps, scribbling in books as they bid for homes foreclosed on by mortgage lenders.

Georgia foreclosures jumped by 99% year-to-year, to the third highest in the nation. The article says not all of October's 6895 foreclosures were auctioned -- because owners came up with a payment, or renegotiated schedules. Banks would rather have the payment than the property, although Georgia is one of three states in which lenders can take houses in as little as five weeks.

(remember MLK's famous RE usury speech, right before his assassination? - G'lox)

Let's walk through the Act One in this Foreclosure Day play:

Interest rates fell in 2001 and the Fed extended cheap credit at record levels, inflating the money supply, essentially stealing wealth from everyone.
Banks relaxed loan qualification requirements in a dozen ways, enticing marginally qualified buyers to sign up for variable rate mortgages.
Atlanta was a national leader in the in the percentage of adjustable rate or interest-only mortgages. Many borrowers made no down payment.

Banks loaned for efficient new construction equipment. Homebuilding sped up even more, and construction tools began to resemble colorful racecars and toys.

Rates fell further and homeowners refinanced their houses to the max to raise cash for consumption.

"Teaser" interest rates ended, payments went up, borrowers couldn't pay, and courthouse steps all over the state became crowded on Foreclosure Day.
Now let's walk through upcoming Act Two:

There is no poorhouse today -- in fact some states have made it illegal for a bank to seize a bankrupt individual's home or assets � possibly bad news for depositors.

Many people have little equity in their homes, thus less to lose by walking away.

A few sellers lower home prices, forcing others to follow, prompting buyers to postpone purchases. Houses flood the market.

Regulators tighten lending standards; creditors and debtors become more conservative as the easiest money environment in history� becomes history.
Widespread mortgage fraud investigations begin.

Bankrupt individuals lose their home and credit, and face higher future borrowing costs.

Banks that loaned their reserves out for real estate are weak. Many banks packaged and sold their mortgages to investors who don't understand what they've bought.

The crisis spreads to other areas of the economy.

In Conquer the Crash Bob Prechter described the character of the first two acts very well. He also described his expectations for Act Three and offered good advice for preparing yourself.

Many think commercial real estate will cushion the effect of the housing slump. But consider this quote from the December Elliott Wave Financial Forecast

"The underlying fragility of the commercial real estate market is readily apparent here in Atlanta where some of the city's signature office buildings sit virtually empty. With a vacancy rate close to 30%, landlords are offering discounts of up to 30% to new tenants. Less than 10 years ago, Atlanta was one of the leading office markets in the country. It still is, but no one wants to admit it. Now that it is leading the way down, it is labeled an aberration."

-Goldilox

I think there are some nasty ramifications to RE slowdown that will not rear their ugly heads right away. The $6B Fannie restatement may just be "the beginning".
Chris Powell
(12/07/2006; 16:54:30 MDT - Msg ID: 150070)
Asian Development Bank official calls for management of dollar's fall
http://www.iht.com/articles/2006/12/07/business/adb.phpBy Keith Bradsher
International Herald Tribune, Paris
Thursday, December 7, 2006

HONG KONG -- A senior Asian Development Bank official predicted Thursday that the dollar was likely to decline further and called for East Asian countries to make sure that their currencies appreciate in unison -- and do not start swinging sharply in value relative to one another.

The remarks by the official, Masahiro Kawai, represent the first time that the multilateral bank -- or for that matter, any prominent Asian monetary institution -- has urged collective action by East Asian countries to manage the current slide of the dollar.

The East Asian monetary authorities together hold more than $3 trillion in foreign exchange reserves, most of it in dollars, and their large purchases of dollars this year have played a crucial role in stemming the dollar's decline until now.

"We believe that some U.S. dollar depreciation would be necessary and collective joint appreciation of the East Asian countries could be needed" to manage the decline, Kawai said. "It's very important for the East Asian currencies to appreciate collectively against the U.S. dollar."

Kawai also said that China had accumulated excessive foreign exchange reserves by intervening in markets to hold down the value of its currency, known as the yuan or renminbi.

Oversized foreign exchange reserves in China -- they exceeded $1 trillion in October, according to the state news media -- and elsewhere in East Asia are also making it harder for countries to control their own monetary policies and run the risk of incurring losses in the management of these reserves, Kawai said.

"If there had been no foreign exchange market intervention, the renminbi would have been appreciating at a much faster rate," he added.

That stance is likely to be welcomed and echoed next week by the U.S. Treasury secretary, Henry Paulson Jr., who will be in Beijing next week with Ben Bernanke, the Federal Reserve chairman, and an unusually large delegation of cabinet officials.

Currency experts said that while the coordination suggested by Kawai would be useful, it would be hard to achieve given the competing interests of countries in the region, their differing relationships with the United States, and their varying domestic economic challenges.

Kawai was the deputy vice minister of finance for international affairs in Japan from 2001 to 2003. He is now the special adviser to the president of the Asian Development Bank and is the head of its office of regional economic integration.

Kawai said the consensus of economists was that the dollar would need to decline by 30 percent to 40 percent in trade-weighted terms in order for the United States to trim substantially its current account deficit -- although he cautioned that the Asian Development Bank was not making its own forecast for the value of the dollar.

East Asian economies can withstand a 20 percent decline in the trade-weighted value of the dollar provided their currencies appreciate together, Kawai said. The U.S. market accounts for no more than a fifth of the exports of even the biggest Asian exporters, he noted.

So if East Asian currencies kept roughly the same value against each other and currencies other than the dollar, their overall, trade-weighted appreciation would be no more than 4 percent in this outlook -- a fifth of 20 percent, Kawai said. This would be manageable, he added, while cautioning that the Asian Development Bank already expected a slight slowing of growth in East Asia next year because of slowing growth in exports, especially to the United States.

East Asian economies "can cope with a significant appreciation vis-�-vis the United States if it's managed in an appropriate way," he said.

Yet currency experts point to difficulties in achieving that goal.

If the dollar seems certain to fall, then a central bank that sells a large part of its dollar reserves first might preserve more of the value of its foreign exchange reserves than other central banks in the region. But if every Asian central bank rushed to sell dollar reserves, then the value of all their reserves and the dollar would drop sharply, said Dariusz Kowalczyk, an analyst at CFC Seymour in Hong Kong.

The opposite approach could also be a problem: If each Asian country tries to prevent its own currency from rising against the dollar so as to preserve the competitiveness of its exports in U.S. markets, then the result could be a broad weakness in Asian currencies and a rapid accumulation of currency reserves. Many economists say this is what is already happening.
frosty 1
(12/07/2006; 17:00:30 MDT - Msg ID: 150071)
goldie!! (you and that wave guy) eh!!
have it all figgered out?
not really.....You see,the vultures are present,yes?
This is halftime..(in the residential realestate price explosion game.) No one here can see the controlled hyperinflation coming.I repeat!! THE US CONSUMER WILL NOT BE STOPPED!
The global economy can not stomach a U.S.deflation,the chinese and others will go along with the ever inflating U.S.The interest rates will not move much from here,we are at the top end of the killing range.
Yes..weak realestate hands are being shaken from the system.This is to be expected.
Going forward...expect the fed to be secrectly buying thier own bonds ,via offshore entities.
frosty1
arbyh
(12/07/2006; 17:00:41 MDT - Msg ID: 150072)
There in lies the solution for compliance.
***The department's action means that any financial assets belonging to these people found in the United States are frozen, and Americans are barred from doing business with them.***

Freezing of assets, confiscation of property and jail time (prisoners reported and unreported).... there in lies the solution to win the public's compliance in all matters great and small standing in difference to matters of the states eminent domain.

1 year after the consolidation of power was needed to protect and support the interests of the wealthy, banking, and industry power base:
A wealthy loyalist:
"Who is that group down by the front gate? Eh call security they will take care of it. Tell them to turn the hose on them.

"Why not disappoint a few idealists. They talk too much anyway, spreading their dream of freedom. We don't need that type of instigation right now. After all those others will do the work we need."

A poor freedom finder:
"Good to see you too Joe...No I'm not getting involved in that BS!!! I'm moving on if I can get by the road patrol. Then I'm going to build again some where else. BTW...got any weed... ok if I find some I'll let you know too. "
arbyh
(12/07/2006; 17:34:28 MDT - Msg ID: 150073)
Alladin
Going to the den of forty thieves to play poker from the 10th thru the 15th. Anyone else going?
You will know me by my constitution mint 1973 USS Constitution silver round coin as a card placer.

"Hey maybe if I win at poker tournaments I'll go pro and hit the pro poker circuit....on second thought better leave the credit cards at home, and only take 1 debit card. The plane ticket home is paid for?...better check again."
osa104c
(12/07/2006; 17:56:16 MDT - Msg ID: 150074)
ReLUCtance TOO
I'll be there the 15th thru the 17th........just an observing PARTY............AMF
Goldilox
(12/07/2006; 18:09:39 MDT - Msg ID: 150075)
Figgered Out?
@ frosty1,

Far from it! I don't necessarily always agree with every author I post. If I did, well, I would not post much at all.

I'm not one for limiting myself to "preaching to the choir", as experience leads me to believe that when I think I have it "all figgered" out, I have omitted too many factors to even be close.

I am convinced of one thing. However it all works out, the easy times for the western consumer are rapidly coming to a close.
Clink!
(12/07/2006; 20:11:25 MDT - Msg ID: 150076)
What's happening in the post-M3 world ?
http://www.nowandfutures.com/key_stats.htmlI was tidying up the clutter in my browser bookmarks and came across this link. I seem to remember posting it here just as M3 was about to be discontinued. I hadn't been there in months, and the M3 clone graph has been updated. As expected, the curve continues to rise in a smooth curve. Two things jumped out at me. Firstly, there was no dramatic change of slope when the official reporting was terminated earlier this year. Secondly, not only is M3 increasing, but its rate of increase is increasing too, and has been since the beginning of '04. However, a trip to the second graph shows that things are still calmer than they were in '01.
But wait ! There's more ! In fact, lot's more interesting stuff.
C!
Chris Powell
(12/07/2006; 21:10:42 MDT - Msg ID: 150077)
Gold is magnificent at the museum but is no museum piece
http://www.gata.org/node/4584Remarks by Chris Powell
Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Educators' Evening -- Gold Exhibition
American Museum of Natural History
79th Street at Central Park West
New York, New York
Wednesday, December 6, 2006


I was touched by your invitation because 50 years ago my beloved great aunt would bring me to this wonderful place and the Hayden Planetarium. (Tonight I have brought my daughter with me in the faint hope that someday she also may think well of her father.) You have instilled in generations of young people a great wonder about the natural world and the love of learning. I'm lucky to have this chance to thank you.

Your gold exhibition is magnificent, but its inevitable implication is that gold is an antique, a museum piece, a relic -- like the dinosaurs just down the hall.

To the contrary -- gold is central to the world financial system even today, even as the shroud of antiquity is so painstakingly woven around it to deceive. Indeed, gold is not just central but the very center of the world financial system.

Why is this?

The question was examined by the Gold Anti-Trust Action Committee in August 2005 at its Gold Rush 21 conference, held in Dawson City, Yukon Territory, Canada, scene of the gold rush of the late 1800s and early 1900s. I'd like to show you a brief video of excerpts from that conference.

[VIDEO]

Gold is at the center of things even now because it is, has been, and probably always will be MONEY -- and not just money but the only independent money, the only money of intrinsic value, the only money that is not also someone else's liability, the only money that, once in possession, cannot default.

As such gold is the deadly competitor of the money issued by governments. Every bit of strength in government currencies comes at the expense of gold, and every bit of strength in gold comes at the expense of government currencies. That is, gold is a measure of inflation, monetary debasement.

Governments always have been at war with gold to some extent -- the more so since the 1970s, when the International Monetary Fund forbade member nations from fixing their currencies to a fixed amount of gold, thereby escaping gold's restraint on the money supply.

This gold war intensified in the 1990s as Western governments began to dishoard their gold reserves or lend them, openly and surreptitiously, to suppress gold's price.

If we had more time tonight or if anyone here was interested, I could review with you the mechanisms by which governments lately have been suppressing the gold price -- or, to be more accurate, controlling the rise of the gold price as the central banks begin to exhaust their gold reserves.

Maybe it is enough to note that annual gold mine production is estimated at 2,600 tonnes and is FALLING, while annual world gold demand is estimated at 3,600 tonnes and is RISING. That gap of about 1,000 tonnes is being filled only by central bank dishoarding and lending. Central banks claim to hold 32,000 tonnes of gold but much and perhaps most of that has been sold or lent out and for practical purposes is simply gone. This year central bank gold sales began to decline -- and the price of gold rose sharply.

That is, gold is remonetizing itself, despite the great pressure against it from the central banks, because the ratio between the gold supply and the supply of government-issued money and money substitutes is now so explosively out of whack.

When central banks stop their dishoarding or simply run out of gold, there may not be enough zeroes to put behind the gold price -- for gold is the world's refuge from the vast monetary debasement that already has been accomplished.

The next gold rush is already under way.

Is this gold rush good or bad?

From the previous speakers tonight we have heard a lot about the environmental damage that can be done by gold mining. There's no denying it. I saw some of it myself in the Yukon last year.

But we don't hear about the damage done to the world by the CURRENT financial system, a system of virtually infinite money and inflation so rampant that government must constantly change its consumer price index formulas and even then must falsify the data.

Don't believe me? Then, if you own your own home, calculate the increase in its value over the last five years and see how it compares with a Consumer Price Index of only 2 percent. Then ask yourself about the half of the population that has been priced out of home ownership by inflation in that time, priced out by the great gap between the increase in housing prices and the decline in real wages.

But housing is only a small part of it.

The gold issue is actually just the old issue of money, which was the main political issue of the United States a little more than a hundred years ago: What IS money? How much should there be? Who should control its creation?

Few Americans have a clue about these questions anymore. Money comes out of the ATM machine -- end of story.

The United States has led the world into the Age of Infinite Money, enabling pervasive government and what U.S. Rep Ron Paul has called the "welfare-warfare state," That is, with infinite money government is empowered to do things the people would never permit it to do if money was more real to them, more scarce, and had to be drawn from taxes in the here and now -- do things like subsidizing childbearing outside marriage and waging imperial wars.

If you disagree, look at Iraq and ask yourself: Would the American people have let that disaster continue so long if they had had to pay for it, if the money for it was not being borrowed into existence -- and from foreigners besides -- worsening the debasement of all world currencies?

Anyway, some governments around the world, particularly Russia's and China's, and a few conscientious investors are realizing that, far from being a quaint antique, gold remains not just basic to the world financial system but, in fact, the secret knowledge of the financial universe -- the substance by which everything else financial is revealed and measured. As gold breaks the chains that laboriously have been imposed on it, others may come to see how everything that has been considered normal has actually been distorted grotesquely by central bank intervention in markets and really doesn't add up -- may see, to their shock, that, as Kipling wrote in "The Gods of the Copybook Headings," "all is NOT gold that glitters, and two and two make FOUR."

When that day comes and the real world reasserts itself with a vengeance, people will need the real thing -- or the real things, ANYTHING that is real. Kipling foresaw it this way:

... Then the Gods of the Market tumbled,
...... and their smooth-tongued wizards withdrew,
... And the hearts of the meanest were humbled
...... and began to believe it was true
... That All is not Gold that Glitters,
...... and Two and Two make Four --
... And the Gods of the Copybook Headings
...... limped up to explain it once more.
... As it will be in the future,
...... it was at the birth of Man --
... There are only four things certain
...... since Social Progress began: --
... That the Dog returns to his Vomit
...... and the Sow returns to her Mire,
... And the burnt Fool's bandaged finger
...... goes wabbling back to the Fire;
... And that after this is accomplished,
...... and the brave new world begins
... When all men are paid for existing
...... and no man must pay for his sins,
... As surely as Water will wet us,
...... as surely as Fire will burn,
... The Gods of the Copybook Headings
...... with terror and slaughter return!
Liberty Head
(12/07/2006; 21:20:42 MDT - Msg ID: 150078)
Vignette
http://economyandmarkets.blogspot.com/2006/12/whats-dollar.html
For every ounce of gold added to the world supply over the last three years,$240,000 has been added to the world currency supply.
Sundeck
(12/07/2006; 22:35:11 MDT - Msg ID: 150079)
Paulson's and Bernanke's Journey to the East
I haven't had time lately to follow the build-up to this visit in much detail, but the more I look and listen the more I get the feeling that there will be much pleading with Big Panda to loosen the strings on the yuan, just a teensy-weensy bit...PULEEAASE!

Reading between the lines, we may have most other SE Asian countries happy to see their currencies float up in unison, but I cannot imagine them being willing to do this if they become uncompetitive with Big Panda's currency...

With the strain building up on Uncle Sam and with a headless chook (or is it a lame duck) at the helm, I suspect that Big Panda may just...may just indeed... go along and loosen controls on the yuan. A "generous gesture" in these times of need...

Europe appears to be "happy" to let the euro float up some more (although the French and Italians will probably squeal). Japan is largely joined at the hip with the US and will go along no-matter what (to keep their defence umbrella and high-tech relationship with Uncle Sam)...

...but, make no mistake, Uncle Sam is a-hurtin' real bad and the shots fired in Iraq are being heard around the world...

This could get even more interesting by Christmas...

FWIW

:-)
Goldilox
(12/07/2006; 23:52:17 MDT - Msg ID: 150080)
Museum speech
@ Chris,

I don't know if your museum audience "got it", but you did your daughter and the GATA cause proud!

I'm sorry I wasn't in the audience.
Clink!
(12/08/2006; 06:13:24 MDT - Msg ID: 150081)
@ Chris Powell
I have to second Goldilox' last post. Nicely done. But do tell - what was the audience's reaction ? Polite applause or something deeper ? I get the feeling that you may have gotten some people to think about things that they had been comfortably ignoring.
C!
Chris Powell
(12/08/2006; 06:56:17 MDT - Msg ID: 150082)
Goldilox and Clink
Thanks for the compliments about my
attempt to make the gold case at the
American Museum of Natural History.
(Its gold exhibition really is
overwhelming, worth an effort to
see.)

There were about 50 people in the
audience, mostly teachers but also
about a half-dozen financial people,
some of whom knew about GATA and are
gold investors, and they spoke with
me afterward. They certainly either
understand what is happening or are
starting to and very curious and
interested. As for the others ...
well, there were quite a few questions
for the panelists from the audience,
and I think half or more of them
involved the gold-as-money issue.
Nobody in the auditorium ran back to
the exhibition hall, smashed the
plexiglass, and tried running off
with any of the artifacts, coins,
or bars, but I hope some of them went
home with an idea of buying a little
gold. I think the exhibit alone would
have encouraged them to do that.
Gonlyold
(12/08/2006; 07:32:09 MDT - Msg ID: 150083)
Pricing Control
An excerpt from Eustace Mullins' book, The Secrets of the Federal Reserve, p. 68:

The control over Federal Reserve System decisions is also founded in another unique stiuation. Each day, representatives of four other London banking firms meet in the offices of N.M. Rothschild Company in London to fix the price of gold for that day...Despite the huge tide of paper pyramided currency and notes which are now flooding the world, at some point, every credit extension must return to be based, in however minuscle a fashion, on some deposit of gold in some bank somewhere in the world. Because of this factor, the London merchant bankers, with their power to set the price of gold each day, become the final arbiters of the volume of money and the price of money in those countries which must bow to their power. Not the least of which is the United States. No official of the Federal Reserve Bank of New York, or of the Federal Reserve Board of Governors, can command the power over the money of the world which is held by these London merchant bankers. Great Britain, while waning in political and military power, today exercises the greatest financial power. It is for this reason that London is the present financial center of the world."

My initial synopsis...

For credit to increase, the quantity, not necessarily the price, of gold must increase.
mikal
(12/08/2006; 08:38:21 MDT - Msg ID: 150084)
2000 yr old gold reborn
http://www.telegraph.co.uk/news/main.jhtml;jsessionid=IQXIP4M0JHDLNQFIQMFSFGGAVCBQ0IV0?xml=/news/2006/12/07/wgold07.xml Lost Hoard of 2,000-Year-Old Gold Refound - Henry Samuel
Telegraph | December 7, 2006
Goldendome
(12/08/2006; 08:45:36 MDT - Msg ID: 150085)
Sir Chris

I add my applause for your speech. It's certainly true that government's ability to create and place purchasing power where THEY desire it, has so distorted the fabric of life, that Gods of the Copybook will certainly return to re-teach lessons forgotten.
Lackluster
(12/08/2006; 09:11:45 MDT - Msg ID: 150086)
2000 yr old gold
http://www.telegraph.co.uk/news/main.jhtml;jsessionid=IQXIP4M0JHDLNQFIQMFSFGGAVCBQ0IV0?xml=/news/2006/12/07/wgold07.xmlFrom URL:

"For years, experts feared the objects had been spirited out of the country to be sold to private collectors from the bazaars of Peshawar, or melted down and sold to fund Islamic Jihad."

Right. Naturally, ANY gold that gets melted MUST be funding Islamic jihad. Beware, citizens, law abiding types should use credit cards only.

Goldilox
(12/08/2006; 09:33:59 MDT - Msg ID: 150087)
Figuring Out the Jobs Report
http://urbansurvival.com/week.htmsnip:

All good quests start with a clearly stated question. This morning, I've pinned up the question from a reader who asks:
"George, if this isn't too stupid a question - because I must be missing something.... Claims from newly laid off workers in the U.S. for unemployment are averaging around 325K a week, or 1.3M a month new claims a month, while we're supposedly only adding around 100K to 200K new jobs every month. Isn't that a discrepancy of over 1M jobs a month - in increasing unemployment?"
Let's begin with the day's headline from the Labor Department:
"Nonfarm payroll employment rose by 132,000 in November, and the unemployment rate was essentially unchanged at 4.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job gains continued in several service-providing industries, including professional and business services, food services, and health care. Employment declined in construction and manufacturing.
Unemployment (Household Survey Data)

Both the number of unemployed persons (6.8 million) and the unemployment rate (4.5 percent) were about unchanged in November. Over the year, these measures have declined from 7.6 million and 5.0 percent, respectively.

In November, unemployment rates for all major worker groups--adult men (3.9 percent), adult women (4.0 percent), teenagers (15.1 percent), whites (3.9 per- cent), blacks (8.6 percent), and Hispanics (4.9 percent)--showed little or no change over the month. The unemployment rate for Asians was 3.2 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

In November, total employment, at 145.6 million, was essentially unchanged, and the employment-population ratio remained at 63.3 percent. The civilian labor force rose by 383,000 to 152.4 million; the labor force participation rate, at 66.3 percent, was about the same as in October.

Next, let's put up a little data: First the CES Birth Death Model. This is where the Labor Department gets to make what I'd call a "statistically edjumacated" guess as to what new jobs have been created by small and work-at-home folks, which are not captured by the usual means because such businesses might not be required to file state returns.

We continue our adventure in truth-questing by then looking at the new jobs supposedly created in the country during since December of 2005:

CES Birth Death Model (Job Creation Guess)
2005/06 Data (Thousands)
Apr 206
May 191
Jun 176
Jul -72
Aug 125
Sep 50
Oct 57
Nov 21
Dec 63
Jan -193
Feb 116
Mar 135
Apr 271
May 211
Jun 175
Jul -57
Aug 121
Sep 28
Oct 73
Nov 29
2006 YTD ? 880
Year onYear 972

Remember that number: 972,000 jobs that are 'estimated" to have been created. Now, let's look at non-farm job growth over the past year for the sake of comparison:

BLS Claimed Job Growth Labor Force
Nov-05 215 150176
Dec-05 108 150153
Jan-06 193 150114
Feb-06 243 150449
Mar-06 211 150652
Apr-06 138 150811
May-06 75 150991
Jun-06 121 151321
Jul-06 113 151534
Aug-06 128 151698
Sep-06 51 151799
Oct-06 92 151998
Nov-06 132 152381
1 Yr Total 1605

So let's think about this logically for a minute: Non-farm job creation reported for the past year added 1.605 million new jobs by the Labor Department's own numbers. Yet the size of the workforce has grown by 2.205 million. And yet, when we look at November of 2005, we read that the claimed unemployment rate was 5.0% (click for source press release). Or, if we want to look at the December 2005 press release (click here for this gem) we read the unemployment rate was 4.9%.

So let's put on our thinking caps, and forget the claimed unemployment rates out today for a minute.

How can we add fewer jobs (1.605 million) than growth of the workforce (2.205 million) and see the unemployment rate go down?

Perhaps there's some mojo in here about returning workers, known to BLS but not footnoted that I missed, but for me, the unemployment numbers simply don't hang together. And when you back out the 0.972 million from the CES "adjustments" we read find that only 633,000 non-inferred jobs were created for the 2.2 million new workers. Figured this way, only 28% of the new workers would have gotten jobs - and for the rest of the added workers, the unemployment rate would have been something over 70%

So I have to table this as making no sense to me - and perhaps the Mogambo Guru, or someone at the Labor Department can explain it. But this is so far into new math that it gives me a headache just thinking about it.

Oh, the underutilized folks increased from 7.6% to 7.8% of the workforce in the A-12, U-6 metric. More engineers and IT types flipping burgers is what that means - and that seems to square with what we see locally.

Maybe there are half a million new farm jobs hidden in here somewhere....hmmm...

-Goldilox

George gets a headache from analyzing the BLS' NEW math.
arbyh
(12/08/2006; 10:48:30 MDT - Msg ID: 150088)
Now that is what I call power.
Paulson Sec of Treasury, says a few words and markets reverse themselves. but is he so powerful that he can reverse a trend too.

"Thats Greenland Bill....you don't even know where China is do you?" Bill pulls map from the wall in a seemingly accidental spaz move, while all others stand with folded arms and irate disillusionment.
Oh damn that commercial already exists. Shoot I'll just have to write another.

USAGOLD / Centennial Precious Metals, Inc.
(12/08/2006; 11:25:34 MDT - Msg ID: 150090)
For Christmas delivery of ANGEL PENDANTS -- offer extended to December 15th
http://www.usagold.com/gold/special/angel.html
Purchase online or by phone -- speak with Marie at Ext. 106

Angel gold coin pendant
Goldilox
(12/08/2006; 11:43:05 MDT - Msg ID: 150091)
U.S. Criminal Probe Rattles $2 Trillion Municipal Bond Market
http://www.bloomberg.com/apps/news?pid=20601103&sid=awq77C8cUwZA&refer=newssnip:

Dec. 7 (Bloomberg) -- The first-ever antitrust probe of the municipal bond market is roiling an industry that states and cities depend on to finance everything from garbage trucks to schools.

U.S. Justice Department prosecutors subpoenaed more than a dozen banks and insurers three weeks ago, seizing documents from three brokers in a search for evidence of bid rigging. Lawyers say it's the biggest criminal investigation of the almost 200- year-old market, where municipalities have more than $2 trillion of debt outstanding.

``You don't want to have something like this going on,'' said Robert Doty, a Sacramento, California-based adviser with American Governmental Financial Services Co., who is the vice chairman of the National Association of Independent Public Finance Advisors. ``It's just bad for the reputation of the market.''

JPMorgan Chase & Co., the third-largest bank in the U.S., American International Group Inc., the world's largest insurance company, and Financial Security Assurance Holdings Ltd., a unit of Brussels-based financial services company Dexia SA, are among the companies that received subpoenas. JPMorgan declined to comment. AIG and Financial Security spokespeople said the companies are cooperating with the probe.

The investigation stems from an Internal Revenue Service review that found scores of municipal bond deals robbed federal taxpayers of more than $100 million. Banks and other financial firms arranged to sell guaranteed investment contracts in a way that increased their fees at the expense of the U.S. government, said Charlie Anderson, manager of field operations for the IRS's tax-exempt bond division.

Courtesy Bids

The IRS in 2005 told Atlanta officials that the city may have overpaid for a $453 million guaranteed investment contract from Bank of America Corp. The IRS asked whether banks arranged to submit ``courtesy losing bids'' at an auction held to win the city's investment business, according to a Feb. 5, 2005 letter obtained by Bloomberg News. The contract was for money raised by a 1999 water and sewer bond.

Bank of America spokeswoman Shirley Norton declined to comment.

Amelia Bond, who ended her one-year term in October as chairman of the Municipal Securities Rulemaking Board, a self- regulatory body based in Alexandria, Virginia, said in a speech to the Bond Market Association in May that the IRS probe has left the industry ``vulnerable.''

``Any time the IRS is involved you worry about the integrity of the marketplace,'' Bond said. ``It sounds like they're finding something.'' The Justice Department opened its criminal investigation six months later. The Securities and Exchange Commission also joined the probe.

Unprecedented

C. Willis Ritter, a Washington-based bond attorney for Ungaretti & Harris who has worked in the industry for 35 years, said in a Nov. 16 interview that the probe marked ``the first time I have ever seen the antitrust division of the DOJ get involved in public finance.''

State and local governments in 2005 sold a record $408 billion of long-term debt in more than 13,000 separate offerings, according to Thomson Financial. The bonds raise money for roads, hospitals and sewage plants, attracting investors by providing income exempt from taxes.

Prosecutors are trying to determine whether banks and brokers conspired to fix prices on so-called GICs, which municipalities buy with bond proceeds that aren't spent immediately.
Goldilox
(12/08/2006; 12:03:12 MDT - Msg ID: 150092)
Fannie Mae debacle continues
http://www.jsmineset.com/snip:

Look at this Jim. This Fannie Mae fiasco and the media are really putting it on us.

http://www.sptimes.com/2006/12/07/Business/Fannie_Mae_wipes_away.shtml

This article tells us how about 60% of the earnings of Fannie Mae were removed from profits and they are not done yet. Then the media cheerleaders come out with the "buy" signal.

http://www.businessweek.com/ap/financialnews/D8LS3B4O0.htm

It's amazing how the system works. I wonder whose selling the shares to the unsuspecting public.
mikal
(12/08/2006; 12:19:35 MDT - Msg ID: 150093)
What's that about dollars?
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/07/AR2006120701442.htmlDangers in a Dollar on the Edge | By Robert J. Samuelson
Friday, December 8, 2006; Page A39
Snippittses: "Let's face it. Foreign exchange markets are not mass entertainment. They're not the NFL, MTV or MySpace. So you might have missed the latest excitement of the sliding dollar. Who cares if the euro is now worth $1.33 instead of the $1.28 it was worth on Nov. 20 -- a 4 percent loss for the dollar? Well, we all should. The dollar's mysterious movements pose one of the thorniest economic questions of our time: Can the world economy thrive without the massive stimulus of ever-increasing U.S. trade deficits?"
:) Mikal-- Foreign exchange markets ARE mass entertainment, as indoctrination, er stories like this amply demonstrate.
As for the question, Who cares what the euro is worth?,
it seems they care less for what it's worth now than for what it was when the silence and censorship and other pieces of the new monetary system were being put into place. Now that it's on our doorstep, they can laugh and mock at and dance around the predestined, hapless dollar and the U.S.A. for that matter. All in good fun, especially if you can travel like a world citizen whenever the plight of your neighborhood offends you.

"It's no secret that Asia, Europe and Latin America have feasted on the U.S. trade gap."
Mikal-- No "secrets", just "all the news that's fit to print". "Can you handle it?"

"In effect, the United States provides a service to the rest of the world -- a global currency -- and is repaid with imports. American consumers benefit; American producers don't. But the system may now be shaky. The U.S. economic advantages may be narrowing as other countries grow richer and develop better financial markets. Or, at some point, the big trade deficits may spill more dollars abroad than foreigners want to hold."
Mikal-- Samuelson overlooks who REALLY "benefits" from lopsided trade, imbalanced currencies and money creation and easy credit terms.The tensions play out on the foreign exchange markets. So it's not surprising he also overlooks the obvious denouement to these distortions and nascent dislocations.

"The recent dollar sell-off, says Kathy Lien of FXCM, a brokerage service, was triggered by two events: speculation that the Federal Reserve might cut interest rates in early 2007 (that would make holding dollars less profitable) and signs that China might diversify its currency holdings."
Mikal-- Samuelson is painting the currency market as much simpler and safer than it is. But there IS a fresh direction in his vague, uneasy warning given us about the future economy:

"A gradual dollar drop would be desirable, especially if China relaxed its tight control over its own currency. Bloated U.S. trade deficits don't inspire confidence. They could provoke a panicky flight from the dollar, or protectionism.
But even this begs the harder questions. The dollar-based global economy has been kind to countries such as Japan, China and Germany, whose prosperity rests heavily on their export industries. Economists talk glibly about "rebalancing" the world economy. That means that export-dependent nations would rely more on domestic growth, and deficit countries -- mainly the United States --would shift to more exports.
It sounds easy, but, especially for major exporters, the needed changes go well beyond twisting a few simple economic dials. They involve altering government policies, industrial structures and even popular attitudes. It's unclear whether these changes can be made. If not, a weak dollar might herald a weak global economy -- which would be bad for everyone."
mikal
(12/08/2006; 12:54:59 MDT - Msg ID: 150094)
Dollar must put on good face, costume for world consumption
http://www.ft.com/cms/s/887db51c-86a6-11db-9ad5-0000779e2340,_i_rssPage=08373e22-506b-11da-bbd7-0000779e2340.htmlPaulson helps dollar recover
By Peter Garnham | Published: December 8 2006 11:11 | Last updated: December 8 2006 17:59 | Financial Times

"The dollar wiped out earlier losses against the euro on Friday after Hank Paulson, US Treasury Secretary, brushed off concerns about its recent slide.
"I believe very strongly that a strong dollar is in our nation's best interest and I feel very good about the strength of our economy right now," said Mr Paulson."
Mikal-- The dollar seems to be front and center, but it is gold and the new monetary system and it's newfangled
currency order which is impatiently rustling the curtains offstage. The stage is set. The strings are pulled tight. Props in place. And makeup artists almost satisfied.

"The comments came in thin trading conditions as traders in London were leaving work, helping the dollar rise 0.5 per cent against the euro to $1.3220."
Mikal-- If you're going to run the stops, panic the shorts, and stage a weekend $ rally, you need all the deviousness you can get such as thin trading and magic job presto.
Buck also got help from technical conditions and sentiment surrounding the euro, the yen and the pound as this article details.(See link)
mikal
(12/08/2006; 13:59:16 MDT - Msg ID: 150095)
Banks to accomodate currency traders
http://www.fxweek.com/public/showPage.html?validate=0&page=fx_login2&url=%2Fpublic%2FshowPage.html%3Fpage%3D356677Banks team up to launch benchmark currency indexes
NEWS - 11 December 2006
LONDON & FRANKFURT � Deutsche Bank, UBS and Barclays Capital have signed up with iBoxx to launch currency indexes that they say will act as an industry-wide benchmark.
iBoxx, a bank-owned consortium that was established in 2001 to provide multiple-contributor fixed-income indexes, said the trade-weighted indexes will increase accessibility of currency investing to the wider market.
David ...
You must login to continue reading this story"
Mikal-- As derivatives and exchanges multiply in number, so too have more new indices been introduced than ever before.
Not gold but paper proxies for wealth, such as these new
currency contracts, benefit banks and brokers and a small handful of lucky gamblers at the same time they will
help bring gold to acceptance. All of this as an integral
feature of the new fiat regimes and global int'l monetary system and help insure it's smooth introduction. Every component must act as a remedy including public perception.
Whether it's Paulson or Greenspan
or Bernanke or Bush giving the PR, or even Blair,
Trichet, Wolfensohn or Yakayaka, when the new spin and
political management expresses the direction dictated by big money and big business it will be the same modus operendi to the seasoned gold advocate.
Federal_Reserves
(12/08/2006; 15:44:28 MDT - Msg ID: 150096)
Strong Dollar Speech
News WASHINGTON (Hooters) - U.S. Treasury Secretary Pat Paulson said on Friday he supported the strong dollar policy. Paulson reiterated, "The value of the dollar is defintely worth the paper it is printed on."
USAGOLD Daily Market Report
(12/08/2006; 15:54:32 MDT - Msg ID: 150097)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

FRIDAY Market Excerpts

December 8 (from MarketWatch) -- Gold futures closed lower Friday, with the February contract ending near its weakest level in three weeks, as the dollar rallied sharply Friday after U.S. Treasury Secretary Henry Paulson described Friday's nonfarm payrolls report as "very, very good news" for the economy.

He welcomed wage growth that has supplemented job gains and reiterated that a strong dollar is in the U.S. interest.

The dollar also gained against the yen on press reports that the Bank of Japan will not hike interest rates in December.

Against this backdrop, the February gold contract fell $6 to close at $631 on the New York Mercantile Exchange. The contract gained $1.10 on Thursday, but tallied a loss of $15 in the two sessions before that.

"Book-squaring is one factor (as usual before holiday periods), but the aggressive sellers have the upper hand at the moment," said Kitco's investment-products analyst, Jon Nadler.

The dollar had fallen earlier Friday as traders digested the latest U.S. economic data. A U.S. government report Friday on employment was mixed, with something to bolster nearly every theory about where the economy is heading, from boom to bust.

The dollar also saw pressure earlier after a report from U.S. consumer sentiment eroded in December.

Despite gold's decline Friday, many analysts remained upbeat out the metal's longer-term prospects.

"We remain positive on gold," said John Hill, an analyst at Citigroup, adding that he expects gold to climb above $700 an ounce in 2007.

In a research note Friday, Merrill Lynch cut its 2006 gold-price forecast to $603.35 from $625, but left its 2007 forecast unchanged at $675, and upped its 2008-2010 gold forecasts.

The brokerage attributed the higher year-over-year gold price forecast in 2007 to "a rebound in fabrication demand for bullion, lower central bank sales and continued growth in investment demand," according to Analyst Michael Jalonen.

---(see url for full news, 24-hr newswire)---
TownCrier
(12/08/2006; 18:33:24 MDT - Msg ID: 150098)
Gold ... is no museum piece
http://www.usagold.com/gildedopinion/museum.html(excerpt) From Chris Powell's speech at the American Museum of Natural History:

"Your gold exhibition is magnificent, but its inevitable implication is that gold is an antique, a museum piece, a relic -- like the dinosaurs just down the hall. To the contrary -- gold is central to the world financial system even today, even as the shroud of antiquity is so painstakingly woven around it to deceive. Indeed, gold is not just central but the very center of the world financial system..."

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

Newly baked into a page at The Gilded Opinion here at USAGOLD, Chris's speech has been lightly seasoned with some relevant links to nearby commentary that may serve as useful reminders to some, and as essential reading for others.

R.
Druid
(12/08/2006; 18:56:33 MDT - Msg ID: 150099)
Chris Powell (12/7/06; 21:10:42MT - usagold.com msg#: 150077)

"Gold is magnificent at the museum but is no museum piece"


Druid: Thank you.
TownCrier
(12/08/2006; 19:36:08 MDT - Msg ID: 150100)
On force-feeding ones currency down the market's transactional throat, versus . . .
http://www.ecb.int/press/pressconf/2006/html/is061207.en.htmlQuestion:
At what point, if any, would you possibly rethink the policy of not encouraging or discouraging third-party use of the euro if a possible disorderly development owing to global imbalances suddenly occurs? And by that I honestly mean a run on the US dollar.

Trichet:
As I have always said, our position -- which has been our position since the very beginning of the euro, and is the firm position of the ECB -- is that we do not encourage the use of the euro. We let the operators, markets participants, investors and savers judge the various financial and monetary instruments � tradable or not � and it is up to them to make their judgements. We do not encourage the international use of the euro.

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

Gold metal -- especially for use as an avenue of SAVINGS -- projects that same general laissez-faire attitude, the same attitude that it has projected for the past 5,000 years.

The lesson, not surprisingly, is that even after all this time, the market continues to reward it for this "willingness to serve" in a decidedly non-provocative manner.

R.
MK
(12/08/2006; 20:06:16 MDT - Msg ID: 150101)
Congratulations, Chris
An extraordinary, highly influential piece. One of the criteria we employ for Gilded Opinion entries is that they contain an element of permanency -- that they serve to further an individual's fundamental education. Another is that if a young person were directed here, we would like the entry to be the sort of treatment you would like to have them read. We hope, in this way, to keep the Gilded Opinion page a sacred place. Your speech fits those criteria in all respects. Just the powerful statement Randy cited in his inclusion announcement alone speaks volumes -- and is stand alone. We are proud to have this speech here at our Gilded Opinion page, Chris, and thanks for the permission.

P.S. And it was quite a stroke to get to use that remarkable Rudyard Kipling poem as a bonus. . . .
Chris Powell
(12/08/2006; 21:40:36 MDT - Msg ID: 150102)
Museum speech
Thanks, M.K., Randy, and all. If my speech at the museum really does come to serve as an introduction to the gold issue, I can't think of a better place for it to reside than in the archives of this forum, from which I have learned so much and from which I continue to learn.

Still, the best part of that speech was the Kipling. My credit is only in knowing where to borrow from. Thanks again.
Chris Powell
(12/09/2006; 09:54:19 MDT - Msg ID: 150103)
Dollar may rise even as U.S. economy falls, research firm says
http://today.reuters.co.uk/news/articlenews.aspx?type=allBreakingNews&storyid=2006-12-08T214451Z_01_N08435269_RTRIDST_0_USA-DOLLAR-OUTLOOK.XML&WTmodLoc=SportsLanding-R6-MostRead-2By Steven C. Johnson
Reuters
Friday, December 8, 2006

NEW YORK -- The dollar will rise in 2007 even as the U.S. economy slows sharply, a top U.K. research firm said on Friday, as Asian central banks continue buying greenbacks to keep their currencies down and their exports competitive.

A housing slump in the United States will finally cause Americans to cut back on spending, while rising labor costs will prevent the Federal Reserve from cutting interest rates until the second half of the year, said Diana Choyleva, director at Lombard Street, a London-based research firm.

But she said Asian states with large surpluses and export-driven economies will still need to recycle savings into U.S. assets and keep their currencies from rising too rapidly against the dollar.

And with Americans saving more, "the supply of dollars will shrink at a time when demand for the dollar will be going up," Choyleva said at a conference in New York, and that will put upward pressure on the dollar.

The outlook runs counter to a widespread FX market view that the dollar will weaken in 2007 amid slower U.S. growth and an expected decline in U.S. interest rates.

Choyleva said markets are pricing in a rate cut too soon.

"There's a big chance growth will be high enough in the near-term to exacerbate the inflation outlook than low enough to help with inflation," she said, adding, "The Fed will need to engineer a hard landing to get inflation back on target."

U.S. consumer spending will fall, though, as home prices continue to slide. The National Association of Realtors reported last week that existing home prices fell 3.5 percent in October for the third straight month.

Rapid gains in home prices had been the main driver in recent years of U.S. consumption, which comprises some two-thirds of U.S. gross domestic product.

The result over the next 12 months to 24 months, she said, will be a gradual unraveling of global financial imbalances caused by excessive American spending and excessive saving in Asia.

And even if the U.S. spending spree ends, Asian states have assets to spare, said Brian Reading, head of Lombard Street's world service. That's especially true of China, with a stash of foreign exchange reserves that recently topped $1 trillion.

Chipping away at imbalances is a top priority of the U.S. Treasury Department, too, though its preferred method is for China's yuan to rise against the dollar, making Chinese imports more costly to U.S. consumers and boosting Chinese demand.

The only Asian currency likely to rise against the dollar in 2007 is the yen, Reading added, as Japan is one of the few Asian countries with rising domestic demand.
Chris Powell
(12/09/2006; 10:02:21 MDT - Msg ID: 150104)
Iran's parliament said to favor switching from dollars to euros
http://www.irna.ir/en/news/view/menu-236/0612095743145955.htmFrom Islamic Republic News Agency
Saturday, December 9, 2006

The Islamic Consultative Assembly (Majlis) is agreable to replacing the US dollar with the euro in Iranian foreign transactions, a member of the Majlis Planning and Budget Commission, Morteza Tamaddon, said Saturday.

Speaking to IRNA, the MP said the move is part of Iran's general policy toward the West, as dependence on the US currency would have negative consequences for Iran in the long term.

Reducing Iran's dependence on the US dollar would eventually make the country less vulnerable to the dollar, argued the MP.

Referring to the move as a "positive approach," Tamaddon said Iran's decision to replace the US dollar with the euro was not politically motivated.

"It has nothing to do with political issues. Even European countries have concluded that they should replace the US dollar with a stronger currency," said the MP.

He said that although some problems could arise as a result of the shift to the euro, Tehran would enjoy monetary flexibility in its international transactions.

In case the West pulls through with its planned economic sanctions on Iran, Tamaddon said, the country would still have access to its monetary accounts based on the euro.

Iran's minister of finance announced last week that the government had decided to replace the US dollar with the euro in its international transactions.

He said that the move was in response to the Bush administration's hostile policies toward Iran.
mikal
(12/09/2006; 13:35:14 MDT - Msg ID: 150105)
More doom and gloom?
Well, they're just proposing it. Just another possibility
or hypothesis. Please don't shoot the messenger. :)
mikal
(12/09/2006; 13:38:03 MDT - Msg ID: 150106)
Story
http://www.timesonline.co.uk/article/0,,5-2494730,00.html#cid=OTC-RSS&attr=BusinessHere's the story for the last post:

American economy under threat from notes on a scandal
The Times | December 09, 2006 | Tom Bawden in New York
Excerpt: "In March it was merely a scandal, laid bare by the news that the Securities and Exchange Commission (SEC) was investigatng suspected cases of stock-option back-dating at a dozen companies in the United States. Now that scandal, itself getting bigger and deeper almost by the day, is threatening to do real damage to the American economy."
mikal
(12/09/2006; 13:46:23 MDT - Msg ID: 150107)
More on that options mess
http://www.timesonline.co.uk/article/0,,5-2494730,00.html#cid=OTC-RSS&attr=BusinessMore from The Times Online:
""It has been going on at much larger firms and for much longer than we thought. It is bound to put some foreign investors off the US as they draw the conclusion that the US is more corrupt than they previously thought.""
Mikal-- How can this BE? In a world where most everyone believes the official line about 911, JFK, RFK, etc!
Well, just maybe there will be some heads rolling in high places for a change. Sadly, the whole world is steeped in tumult.

"The practice of back-dating has accounting implications for companies because "in-the- money" stock options must be treated as compensation and accounted for as an expense, since they are, essentially, income. As a result, scores of companies are likely to have to restate several years of earnings. Normally stock options are not accounted for in this way, because when they are granted nobody knows whether the share price will rise or fall so their value cannot be calculated. "
Mikal--Again, in the same vein, what's to keep people from beleiving the stock market is not perpetually immortal?
Like TC's "Zeus", for example. The black hole of mass ignorance.

"It is not clear, either, if the practice is a thing of the past. While the manipulation of stock options is more difficult since a law was introduced in 2002 requiring companies to inform the SEC within two days of granting an employee share options, Professor Brown says that it will be difficult to police effectively. What remains of greatest concern, however, is just how pervasive the practice has been in the recent past and how much of a public relations blow this will be for the American economy."
mikal
(12/09/2006; 14:15:33 MDT - Msg ID: 150108)
Asia looks inward for export growth
http://www.iran-daily.com/1385/2729/html/ieconomy.htm#s194265ASEAN has taken further steps beyond those outlined here this year to radically reduce dependence on saturated, overextended western export markets. This will reduce dollar-denominated transactions and dollar dependence
as Another foresaw throughout the world's trading regions:
ASEAN Speeding Up Economic Union
CEBU, Philippines, Dec. 9-- Excerpts: "Southeast Asian trade ministers late on Friday hastily signed four agreements aimed at speeding up regional economic union after the high-profile summit of Asian leaders this weekend was postponed due to a typhoon, Reuters reported.
The ministers also signed two pacts with China, including one that reduces tariffs on an expanded list of goods, but left out an agreement on trade in services. They said the services pact would be signed when their leaders meet next month.
Japan, keen to strengthen its own economic ties with the Association of Southeast Asian Nations (ASEAN), said on Saturday it would provide $52 million of fresh grant aid to support the grouping's integration efforts and to promote its economic partnership with Japan."
Mikal- Many more details on these agreements than we've seen in the past are here. Obviously this is an extensive committment and agreement in the number of signatories, the population of workers involved, and it's evolving impact on the regions investment wealth, prosperity, innovation, investment potential and world influence.

"Philippine Trade Secretary Peter Favila said the 10-member ASEAN recognized the need to speed up integration of its markets to compete for foreign capital with faster-growing neighbors China and India. But some industries, such as farming, still needed protection.
The Economist Intelligence Unit (EIU) said in a study on ASEAN exports that the region needed to create a genuinely, integrated market and lessen its dependence on trade with outside the trading bloc to fuel growth in its manufacturing sector.
"For ASEAN to become more attractive as a location for investors to set up manufacturing plants, tariffs must continue to be lowered and non-tariff barriers dismantled," the EIU said.
The trade ministers of ASEAN, home to more than 560 million people and with a combined economy bigger than India's, have agreed to eliminate duties on 3,523 tariff lines on January 1, 2007, and simplify customs procedures, ASEAN said in a statement."
Druid
(12/09/2006; 14:30:18 MDT - Msg ID: 150109)
Goldilox (12/8/06; 11:43:05MT - usagold.com msg#: 150091)

Druid: G, great find. It appears that these kind of problems are converging towards an inflection point where it's becoming more and more difficult to sweep under the proverbial rug. The bureaucrats will either be blamed or, such as the case of your posted article, start shifting blame.
mikal
(12/09/2006; 14:35:57 MDT - Msg ID: 150110)
Consumer mood coincidences
http://www.indiadaily.com/editorial/14655.aspA Steady Michigan Consumer Sentiment Index with Lower Retails Sales Bearish for Stocks � 1928-29 Parallels
Sunny Peora | 12-08-06 | Excerpt:
"Consumer sentiment index stay steady last month. But there is a sense of stealth nervousness. People are slowly losing confidence on corporations and the credit based monetary system."
mikal
(12/09/2006; 14:52:55 MDT - Msg ID: 150111)
Bonds, Fed trapped by monetizations, liquidity addiction
http://www.gold-eagle.com/editorials_05/schiff120806.htmlWhat's Really Going On With Bonds
Peter Schiff | December 8, 2006 | Snippet:
"Given that foreigners are the primary purchasers of US Treasury bonds (snapping up 56% of inventory in the last auction), a declining dollar is supposed to be a major drag on bond prices. But the market has shrugged of the recent dollar slump without so much as a hiccup. What gives? If foreigners are selling their dollars, why are they simultaneously buying dollar denominated bonds? From an investor's perspective, the only thing worse than owning current dollars is owning receipts for future dollars. If ever there was a true conundrum, the bond market is it.

One popular explanation on Wall Street is that bond investors are bidding up prices because they are confident that the Fed will keep inflation under control. In my view this requires taking a huge leap of faith that is out of character for historically cautious bond investors. With massive trade and budget deficits looming far into the future, trillions in unfunded liabilities coming home to roost, the bursting of the housing bubble, the retirement of millions of baby boomers, and insufficient domestic savings and productive capacity to fund any of it, I can't fathom how bond investors could be so sanguine."
Mikal-- Solid, original thinking on the bonds and economy
in a consise format. Enjoy.
USAGOLD / Centennial Precious Metals, Inc.
(12/09/2006; 16:17:11 MDT - Msg ID: 150112)
Step inside and shop at your convenience. Open 24/seven.
http://www.usagold.com/buy-gold-coins.html

shop for gold coins
Goldilox
(12/09/2006; 16:39:51 MDT - Msg ID: 150113)
Bond Conundrum
@ mikal,

The other conundrum is that Caribbean banking centers have recently attained #3 in Bond and Treasury purchases, suggesting that perhaps the missing ENRON, 911, Worldcom, and dot-com "short profits" are all sitting there acting on behalf of the PPT.

If the PPT was really only $50B as advertised, like Sinclair reminds us, that is truly NOT EVEN a drop in the bucket at FOREX and COMEX. With only $50B in slush funds, they would be sucked up like a slurpie in desert during any real market slam!
mikal
(12/09/2006; 22:33:47 MDT - Msg ID: 150114)
Goldilox, thanks, here's more "drops in the bucket":
http://www.prudentbear.com/creditbubblebulletin.aspThe Carribean and lately increasingly Gr.Britain
are taking up the slack as shown in the TIC report.
This meshes with the way liquidity is being exploded
in corporate bond issuance, ABS, MBS(Asset Backed Securities and Mortgage Backed Securities) GSE's, Fed Funds, Repos, global and Treasury securities etc. as Doug Noland explains this week as he emphasizes the "Securities market-based Credit instruments"("bubblings") in the Flow of Funds, as the major counterpart to Corporate Debt issuance:

Credit Bubble Bulletin - Doug Noland - December 8, 2006
Excerpt-- "Q3 2006 Flow of Funds:

Akin to current economic and market analysis, skillful examination of the Fed's quarterly "Flow of Funds" report has become a more challenging endeavor.�Yet one might be tempted to glance at the broad Credit aggregates and find little cause for delving into the detail. Total Credit Market Debt (Non-financial and Financial) increased $755 billion during the quarter (7.1% annualized), down from Q2's $820 billion (7.8%) and little changed from Q3 2005's $760 billion.�Over the past year, Total Credit Market Debt increased $3.526 Trillion, or 8.8%.� For perspective, Total Credit Market Borrowings increased $2.352 Trillion during 2002, $2.729 Trillion in 2003, $3.003 Trillion in 2004, and $3.436 Trillion in 2005.
Total Non-Financial Credit expanded at a 6.7% seasonally-adjusted annual rate (SAAR), unchanged from Q2 and down from Q1's 9.5%.� Importantly, however - and this pertains to the entire "Z.1" analysis � Credit and financial flow data trends should be contemplated in the context of the marked deceleration in nominal GDP growth over the past three quarters - from 9.0% to 5.9% to the third quarter's 4.0%.� And does the Flow of Funds provide insight to further our understanding of the paradox between reduced borrowings in the real economy and heightened liquidity in financial markets at home and abroad?
With home mortgage debt growth decelerating, Total Household Borrowings slowed to 6.8% SAAR, down from Q2's 9.2%, Q1's 9.7%, and Q4 2005's 11.6%.� Total Business Borrowings slipped somewhat to a 7.7% pace, down from Q2's 8.4%, Q1's 9.6% and Q4 2005's 7.7%. Bucking the trend, State & Local Government Borrowings jumped to a 9.3% rate, up from Q2's 6.6%, Q1's 3.5%, and Q4 2005's 9.7%.� Enjoying booming receipts, Federal Government Borrowings nonetheless bounced back somewhat to a moderate 3.3% rate, reversing Q2's negative 2.4% but below Q1's 11.3% and Q4 2005's 8.0%.

Continuing a prominent Q2 "Flow of Funds" development, the more intriguing aspect of Q3 data is buried in the nature of Financial Sphere ballooning.� Don't be fooled by the sharp slowdown in Credit market borrowings from the Fed's aggregate "Domestic Financial Sectors" -� which slowed to 5.6% from Q2's 10.5% and Q1's 8.6% pace.� The contraction of GSE balance sheets is a partial explanation.��Additionally, key funding sources for the unrelenting Financial Sphere expansion are not captured within "Credit Market Borrowings."�

I'll posit that ballooning securities finance (in particular, speculative securities leveraging along with booming M&A financings) has developed into a key force in ongoing system liquidity creation.� Cutting to the chase a bit, "Fed Funds & Repos" expanded at a 26.9% rate during the quarter and "Funding Corps" grew 25% annualized.� Broker/Dealer Assets ballooned at a blistering 28% pace during the quarter, expanding balance sheets much more rapidly than the Banks ($168.3bn vs. $39.5bn).� Why the need for such aggressive expansion in the face of a slowing economy?

The impetus to Financial Sphere expansion provided by the U.S. housing slowdown and resulting economic moderation has been the major financial development of 2006.� Or, stated differently, Wall Street has been eagerly prepared to take full advantage of the conclusion of a "tightening" cycle that never approached imposing actual financial tightening.� The "Flow of Funds" clearly captures this major inflation of securities market-based Credit instruments.

During the first three quarters of the year, Broker/Dealer Assets expanded $427 billion, or 27% annualized, to $2.57 Trillion.� For comparison, assets expanded on average $170 billion during the first half of the decade.� Broker/Dealer Assets have now ballooned�$750 billion, or 45%, in just the past two years.� During Q3, Broker/Deader Financial Assets expanded $601 billion SAAR.� Miscellaneous Assets ballooned $432 billion SAAR to $1.539 Trillion (up 54% y-o-y).� Holdings of "Credit Market Instruments" expanded $192 billion SAAR during the quarter (to $546bn), the largest increase since Q4 2005.� By major category, Treasuries increased SAAR $96 billion, Agency/GSE MBS $23 billion, and Corporate Bonds $65 billion.

Financing the historic Broker/Dealer Bubble, "Security Repos (net)" expanded $509 billion SAAR and Securities Credit from Banks $101 billion SAAR during the quarter.� Year-to-date, the Liability "Repos" has expanded at a 41% rate to $965 billion and the Liability "Security Credit" 21.5% to $282 billion.� In contrast, so far this year Broker/Dealer Credit Market Bond borrowings have increased $11.6 billion to $74 billion.

At the epicenter of securities finance, "Funding Corporations" ("Funding subsidiaries, nonbank financial holding companies, and custodial accounts for reinvested collateral of securities lending operations") expanded assets $473 billion SAAR during the quarter, or 25% annualized, to $2.012 Trillion.� Year-to-date, Funding Corps have grown at a 13.8% rate.� Funding Corp Assets have ballooned almost a third in seven quarters.� Their largest Asset � "Investment in Brokers and Dealers" � expanded $303 billion SAAR during the quarter to $902 billion (up 21% annualized y-t-d).� On the "Funding Corp" Liability side, "Securities Loaned (Net)" expanded $336 billion SAAR during the quarter.� Year-to-date, "Securities Loaned" has ballooned at a 36% rate to $1.214 Trillion.� Notably, the Securities Loaned Liability has increased 59% since December 2004.� Also on the Liability side, "Open Market Paper" (largely commercial paper) expanded $210 billion SAAR during the quarter.� Year-to-date, Open Market Paper has grown at a 19% rate to $563 billion.�

The Fed's category "Federal Funds and Securities Repurchase Agreements" expanded $606 billion SAAR during the third quarter ($509 billion SAAR lent to the Broker/Dealers).� Year-to-date, Fed Funds & Repo has ballooned $366 billion, or 24% annualized, to $2.371 Trillion, with a two-year gain of 42%.� On the Liability side (the entities holding these Credit instruments), owed to Money Market Mutual Funds increased $266 billion SAAR during the quarter (to $368bn) and Rest of World $144 billion SAAR (to $805bn).� ROW Fund Funds & Repo holdings have expanded at a 17% rate y-t-d.

Bubbling Securities Finance is certainly taking up any slack created from slowing mortgage debt growth.� Total Mortgage Debt (TMD) expanded at an 8.4% rate to $13.033 Trillion.� TMD was up $1.282 Trillion y-o-y, or 10.9%.� For comparison, TMD increased $562 billion during 2000, $690 billion in 2001, $881 billion in 2002, $1.007 Trillion in 2003, $1.304 Trillion in 2004, and $1.468 Trillion last year, after annual growth averaged $269 billion during the nineties.� During the third quarter, Home Mortgage Borrowings slowed to a 7.4% rate (to $10.029 Trillion), reducing y-o-y growth to 10.4%.� At 13.4% annualized, Commercial Mortgage debt growth was little changed from Q2, with y-o-y growth of 14.8% (to $2.130 Trillion).

Impacted by slower mortgage borrowings, the booming Asset-Backed Securities (ABS) marketplace saw growth reduced to a still robust 10.6% annualized during the quarter to $3.323 Trillion, down from Q2's 12.7% growth rate.� ABS has expanded $468 billion, or 16.4%, over the past year and $1.011 Trillion, or 42%, during the past two years.� GSE balance sheets contracted at a 3.7% rate during the quarter to $2.837 Trillion, a reversal from Q2's 7.1% growth rate (GSE assets up 3% y-o-y).� Outstanding GSE MBS expanded at an 8.3% rate during the quarter to $3.892 Trillion (up 7.6% y-o-y).�

Certainly playing a prominent role in the intermediation of rapidly inflating "repo" and "Fed funds" Credit instruments (financing the Securities Finance Bubble), Money Market Funds (MMF) expanded at a 19% rate during the quarter to $2.167 Trillion.� On a seasonally-adjusted and annualized basis, MMF assets increased $439 billion during the quarter, with Security Repos up $161 billion and Open Market Paper up $266 billion.� MMF assets were up $290 billion, or 15.4%, over the past year.�

Elsewhere, REIT liabilities expanded at a 9.2% pace to $607 billion (up 11% y-o-y).� Savings Institution assets expanded at a 14.5% rate to $1.833 Trillion (up 9.8% y-o-y).� Finance Company assets expanded at a 3.2% rate to $1.872 Trillion (up 5.3% y-o-y).� And Credit Union assets grew at a 4.0% pace to $711 billion (up 3.7% y-o-y).

Bank balance sheet growth was sharply reduced during the quarter, impacted by the housing slowdown as well as the likely increased securitizing and selling of various types of loans (some into CDOs and other "structured finance" vehicles).� Bank Mortgages expanded at a 6.7% rate, down from Q2's 12.7% and Q1's 8.8% pace.� MBS holdings dropped $62 billion during the quarter, reducing y-o-y growth in MBS and Treasuries to 2.1%.� Contracting Securities Credit reduced overall Bank Credit growth to 3.7% during the quarter, although keep in mind that many of the securities unloaded by the Banks ended up on the balance sheets of the Broker/Dealers and their hedge fund clients.� ��

The "Rest of World" (ROW) continues to "recycle" extraordinary liquidity into the top-tier U.S. securities markets.� ROW holdings of U.S. financial assets increased $343 billion during the quarter, or 11.8%, to $11.946 Trillion.� On a seasonally-adjusted and annualized basis, ROW holdings ballooned $1.439 Trillion.� In nominal dollars, Treasury holdings increased $41 billion to $2.070 Trillion, Agencies $53 billion to $1.131 Trillion, and Corporate Bonds $86 billion to $2.597 Trillion. Better illustrating the scope of foreign purchases in key markets during the quarter, on a seasonally-adjusted and annualized basis Treasury holdings increased $163 billion, Agency/MBS $213 billion, and Corporate Bonds $344 billion.� Over the past year, holdings of Agency/MBS have increased $247 billion (28%) to $1.131 Trillion and Corporate Bonds $301 billion (13.1%) to $2.597 Trillion.� Little wonder there has been such downward pressure on market yields (no "conundrum").� Over the same period, Foreign Direct Investment was up $111 billion (6.5%) to $1.820 Trillion.
The Household Balance Sheet continues to provide insight into consumer resiliency.� Household Net Worth increased $775 billion during the quarter, up sharply from Q2's $27 billion rise.� Total Household Assets inflated $1.044 Trillion (6.3% annualized) during the quarter to $67.058 Trillion, while Liabilities increased $268 billion (8.4% ann.) to $12.995 Trillion.� On the Asset side, Financial Assets increased $747 billion (7.5% ann.), with Deposits rising $158 billion (10.1% ann.).� Household Real Estate increased $242 billion, or 4.4% annualized, to $22.42 Trillion.� Over the past year, Household Assets inflated $4.608 Trillion, or 7.4%.� Real Estate increased $1.781 Trillion (8.6%) and Financial Assets $2.616 Trillion (6.9%).� Household Liabilities expanded "only" $1.106 Trillion, or 9.3%, over the past year.� Household Net Worth, then, inflated $3.502 Trillion, or 6.9%, over the past year to $54.06 Trillion.� Net Worth has inflated 40% in four years.����
I certainly see strong support from the Flow of Funds data for my view that Financial Sphere ballooning has this year assumed a prominent role in sustaining system liquidity excesses.� Ultra-loose financial conditions can be recognized particularly in the huge expansion in money market instruments (i.e. "repos," "Fed funds," and commercial paper), the process of intermediation through money market funds, and the ballooning of Wall Street balance sheets.� The resulting liquidity deluge has inflated securities prices at home and abroad, in the process fostering self-reinforcing global M&A and stock market booms.� Global liquidity excess is fueled by the confluence of massive U.S. Current Account Deficits, enormous outgoing speculative flows from the U.S., and unchecked domestic Credit excess around the world.�

Traditionally, economists examine only the expansion of Non-Financial debt; the thought being that taking into account financial sector borrowings would result in double-counting.� Well, there is certainly an issue with double-counting, but to these days ignore the Credit creation associated with financial system leveraging is to remain oblivious to history's greatest liquidity engine.� For years, Credit Bubble lending excesses (i.e. mortgages, telecom and corporate debt, Treasuries, etc.) have created system liquidity abundance.� Of late, the more aggressive speculative leveraging of this edifice of tens of Trillions of securities and loans has provided Wall Street with yet another profit and liquidity-creating windfall.� Recently, I've referred to the Global Corporate Debt Bubble. Global Securities and Corporate Debt Bubbles would be more explanatory."
mikal
(12/10/2006; 08:48:09 MDT - Msg ID: 150115)
Tight spot
http://www.stltoday.com/stltoday/business/stories.nsf/story/445FEDD9D2F549FF8625723E007C9B3E?OpenDocumentGo and Catch a Falling Dollar, Chairman Bernake | Mark Kasen | St. Louis Today | December 10, 2006
This is a pretty good short history of the U.S. dollar's exchange rate in recent years from it's high to it's recent low in 2005 of 80. Kasen aims to just sum up the Fed's predicament and the most basic economic implications.
The best parts are his whimsical title, "Go and Catch a Falling Dollar, Chairman Bernanke" and close:
"In other words, a falling dollar places the U.S.
economy at risk, and it leaves the Fed little room to maneuver. Happy New Year, Chairman Bernanke. Lots of luck."
Between a rock and a steam engine, the dollar needs something tried and true to spirit her off the track of danger and certain death, a young knight in shining yellow armor.
frosty 1
(12/10/2006; 10:32:32 MDT - Msg ID: 150116)
housing equity..fuel for the consumer
Hello!,
After reading Jim Willie's very long report on housing, I think most here must think I am nuts. Or invested big-time in residential realestate,witch is also nuts,in the opinion of most doom and gloomers.
I assure you that I have plenty irons in that old fire.
I can remember my folks fighting about buying into the (golden) arch franchise when it first appeared on the screen....My pops said....."Are you nuts? Why would anyone want to eat FAST food." Pops won and payed for it till the end.
The point I am trying to make is that you can have all the stats in the world why something should happen the way the facts are leaning,but then the world changes a bit ..Jim is a big thinker on K-winter around the corner. I do not think we are even close to this junction. Some day, just not soon.
The fed, (IMHO) will print and the world will go along, for lack of alternatives.
The fear of not having your wealth in something real and touchable, will sweep the nation and then the world THIS...will happen long before any deflation 'stagflation , or GOD forbid any K-winter.The housing bull will be again in the news,and many so called experts will have egg on thier face.
Call me nuts,but I see the only card left for our country, is to keep the consumer going and the only way THAT will happen is a new round of equity extraction.With all the perks of a realestate bull going forward.We have all the power to do this now,in the future this will not be the case......NOT INVESTMENT ADVICE..just the way I see it.
frosty1
Thoreauly
(12/10/2006; 11:54:36 MDT - Msg ID: 150117)
@ frosty 1 re: housing equity...fuel for the consumer

Forget lowering interest rates, Bernanke could undertake his famous helicopter dump and shower consumers with dollars if it weren't for the fact that foreigners keep the US economy afloat with their massive purchases of dollar-denominated bonds, the price of which will eventualy start declining amid a dollar glut. This in turn will exacerbate a process that is already underway -- i.e., foreign banks diversifying out of the dollar -- leading to ever-rising bond yields that will translate into ever-rising interest rates, even as the economy falters.

In other words, the world will go along until it doesn't, this being the card that will trump whatever ones the government has left.

mikal
(12/10/2006; 14:51:04 MDT - Msg ID: 150118)
Diversions amidst asset diversification
http://www.ft.com/cms/s/277471c2-8889-11db-b485-0000779e2340,_i_rssPage=7c485a38-2f7a-11da-8b51-00000e2511c8.htmlOil producers shun dollar
By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London
Published: December 10 2006 20:11 | Last updated: December 10 2006 20:11 | Excerpts:

"Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.
The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency."

Mikal--It seems I've heard this news before. Time will tell what effect, if any it has. Or there could be a whipsaw if the news is followed by a denial.

"Market liquidity is traditionally low in December, and many traders have locked in profits, potentially reinforcing volatility."

Mikal-- Overall changes in $ exposure shown in this article are less than in something like a TIC report or a Doug Noland future projection. Steady as she goes is the hope,
such that the author actually acknowledges all this:
"Such shifts may be modest compared with the total assets held, but they provide a crucial indication on future thinking.
Currency switches are likely to be progressive, subtle and discreet, as untoward attention could hit the dollar, lowering the value of depositors� remaining dollar-denominated assets."
White Rose
(12/10/2006; 14:59:13 MDT - Msg ID: 150119)
The crucial role of derivatives
To understand the world financial system right now, you need to understand derivatives. I regard derivatives as illogical massive bets designed to change the behavior of the system.

As an example, it is obvious to all that Ford and GM will go bankrupt. It is only a matter of time. It would be logical to shed all Ford and GM stocks and bonds. The problem is that the bonds are larger than the sovereign debt of Canada. If these were shed, it would cause a wipeout of financial assets worldwide.

Right now, the world is flooded with inexpensive credit derivatives that act as insurance against default in these and other bonds. The result is a demand for these risky bonds since the combination of the bonds and the insurance gives a cheap "guarenteed return".

Why does the financial world trust this insurance? Because it is offered on such a massive scale as to dwarf all other considerations. Who ever is the ultimate offerer of this insurance knows the "big lie". If you offer cheap insurance on a truely massive scale, then it is believed that all is well. As you look around the financial world, you will notice that no one seems very concerned about the bankrupcy of Ford and GM.

We who are "derivative-blind" look around the financial world and knows that the dollar is doomed, that all who buy dollar debt will be wiped out, that real estate and the debtor fantasy of the western world and all going to crash.

Yet Wall Street sees the vast insurance offered by derivatives. That gives them the confidence to keep playing the game as if the game were going on forever. We can argue forever about the coming flood. The counter argument is very simple "no storm is coming, I know because flood insurance is available in mass quantity real, real cheap".

Derivatives offer a floor for the stock market and the bond market. They offer a ceiling for the gold, silver, copper, and oil markets.

Until they don't.
USAGOLD / Centennial Precious Metals, Inc.
(12/10/2006; 15:19:54 MDT - Msg ID: 150120)
Hard assets, easy access!
http://www.usagold.com/buy-gold-coins.html

gold -- a global calling card
Cometose
(12/10/2006; 22:01:46 MDT - Msg ID: 150122)
oil and the dollar
dollar up and and oil down ...............

as per Grandich ........after another week .........good time to go on vacation ..........

Clint Eastwood in one of his better pictures with Sondra Locke said to his commanding officer in .....a Noreaster accent ........

" I don't need a vucation " ............


I always need a vucation..........and if things clear up and the windows of heaven open .........I PROMISE that I am going to go on a VUCATION .............

zsx/d/csx//////////////////

AMEN
Topaz
(12/11/2006; 01:28:54 MDT - Msg ID: 150123)
13 week T.
http://www.freebuck.com/bonds.shtmlLooks to be hovering mid the 50-200 and keen to begin the descent into Zool. If they work it below the 200 today ...or, heaven forbid sub 47.5 we might just get Mr B to acknowledge the markets control of things and cut a quarter%.
Federal_Reserves
(12/11/2006; 12:18:05 MDT - Msg ID: 150124)
Greenspan see's weak dollar
Greenspan says expects more dollar weakness


TEL AVIV (Reuters) - Former U.S. Federal Reserve Chairman Alan Greenspan said on Monday he expected the dollar to stay weak for the next few years and will continue to drift down, weighed by the U.S. balance of payments deficit.

"I expect that the dollar will continue to drift downwards until there will be a change in the U.S. balance of payments," Greenspan told a business conference here via video-link from the United States.

"There has been some evidence that OPEC nations are beginning to switch their reserves out of dollars and into euro and yen," Greenspan said.

"It is imprudent to hold everything in one currency," he said, adding that at some point the dollar will be moving lower.

"That will be the experience of the next few years," Greenspan said.

Greenspan said markets were so sophisticated it was very difficult to forecast the short term direction of the dollar.

mikal
(12/11/2006; 12:54:07 MDT - Msg ID: 150125)
China splits pose challenges
http://www.ft.com/cms/s/031a6d88-8869-11db-b485-0000779e2340.htmlChinese voices that oppose reform grow louder
Susan Schwab, U.S. Trade Representative | Financial Times
December 10 2006 18:02 | Excerpts:
"One of the most important events in modern economic history occurred five years ago on Monday when China joined the World Trade Organisation. This anniversary provides the opportunity to take stock � through a congressionally mandated report issued on Monday by the office of the US Trade Representative � of China's integration into the global economy and its compliance with WTO obligations.

The record is profoundly mixed...

WTO accession has also helped promote the rule of law in China and subjected the country to binding international dispute settlement procedures. Nevertheless, looking back on the past year, we see troubling indications that China's momentum towards reform has begun to slow. Voices in China opposing further market liberalisation have grown louder and government intervention in the economy, especially at the provincial level, has increased."
Mikal-- Uh, oh, more warning signs. China's geopolitics such as support for N. Korea's Kim, the leader of
Zimbabwe and other ruthless, genocidal dictators is also
drawing ire. Read on:

"While facing fewer blanket prohibitions or prohibitive tariffs, US companies face an array of regulatory obstacles and government policies that make doing business in China uncertain.
Later this week, I will join other administration officials on a trip to China as part of the new strategic economic dialogue led by Treasury secretary Hank Paulson. As part of this dialogue, we will clearly convey our view that a slowdown in reform hinders China's development and undermines the health of our bilateral ties.
One of the most serious challenges identified by USTR is the rampant infringement of intellectual property rights that persists in China in spite of efforts by central government officials to move against this illegal practice. Counterfeiting, piracy and inadequate enforcement of intellectual property protections rob US businesses of billions of dollars a year in legitimate sales and weaken China's development of its own knowledge-based industries.
Of equal concern is China's continued use of industrial policies that limit imports of goods, government subsidies that encourage exports and protect non-competitive industries, and regulatory barriers that impede participation in China's market by US service providers. There are many other areas, from steel to telecommunications, where China's incomplete move away from a centrally-planned to a market-based economy is creating massive distortions that could leave the Chinese and global economies at risk."
Mikal-- It seems now that the world economy is at the precipice, our leaders feel they've milked the current system and status quo as far as they can. Now tough talk
and tough choices will emanate from both the U.S. and China
Hopefully reforms and trade adjustments
will be instituted peacefully and not escalate into civil war in China, trouble over Taiwan or offshore oil and gas
or other violence.
Cometose
(12/11/2006; 13:35:15 MDT - Msg ID: 150126)
Greenspan see's weak dollar
Golden words from the MR MAGOO of BANKING , ECONOMICS, and FINANCE.........

He's trying to give us all a headfake .....but his words will come true

He's Mr Magoo
mikal
(12/11/2006; 13:35:53 MDT - Msg ID: 150127)
China, US promote private and public exchange
http://www.ft.com/cms/s/6e167700-894d-11db-a876-0000779e2340.htmlUS vocal in run up to China trade talks
By Richard McGregor and Krishna Guha
Published: December 11 2006 19:47 | Last updated: December 11 2006 19:47
Boilermaker
(12/11/2006; 15:49:54 MDT - Msg ID: 150128)
Paulsen vs Greenspan on the $
http://quotes.ino.com/chart/?s=NYBOT_DX&v=iLast Friday Paulsen propelled the $ index 1% higher in minutes after his "strong dollar" statement. Today in Israel Greenspan spoke of a weaker $ and the market drifted lower. Hank's got the $ baton and is leading the US financial orchestra. AG wants to sound the alarm but hasn't the guts to blow the whistle full blast.
Goldilox
(12/11/2006; 17:02:38 MDT - Msg ID: 150129)
Greenspan and the full whistle
@ Boilermaker,

SLIM:

"You know how to whistle, don't you, Steve? You just put your lips together and... blow."

Watched it again on AMC the other night. Only the sexiest scene EVER!
USAGOLD Daily Market Report
(12/11/2006; 17:28:35 MDT - Msg ID: 150130)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

MONDAY Market Excerpts

December 11 (from Reuters) -- Gold ended higher in quiet trade after seesawing earlier on Monday, as investors used the falling dollar as an excuse to bargain-hunt while looking for cues from U.S. economic indicators expected later this week.

Benchmark February gold at the COMEX division of the New York Mercantile Exchange settled up $3.8 at $634.8, traded in a tight range between $627.3 and $635.2.

Gold lacked a definite direction early, touching a low of $627.3, last seen on Nov. 20. The precious metal turned higher by midmorning as the dollar reversed course and dropped.

"Most of that was being done on a slightly weaker dollar against the major currencies, particularly the euro and the pounds," said David Meger, metals analyst at Alaron Trading, referring to gold's gain.

The dollar fell against the euro and pared gains versus the yen after ex-Federal Reserve chief Alan Greenspan warned investors to expect "a few years of dollar weakness."

---(see url for full news, 24-hr newswire)---
TownCrier
(12/11/2006; 17:48:23 MDT - Msg ID: 150131)
Short and to the point -- Russia, Opec move away from dollar reserves
http://www.dawn.com/2006/12/12/ebr11.htmGENEVA, Dec 11: Major oil-exporting countries have been moving away from dollar deposits to accumulate reserves in other currencies including the euro and the Japanese yen, the Bank for International Settlements said on Monday.

---(from url)---

This news item was already posted by mikal yesterday from a more comprehensive FT article.

The future has caught up with us... there's no need for theory and speculation when the reality is unfolding at our feet.

As the dollar-centric reserve structure of the international monetary system slips from preeminence, choose gold as the secure repository of your life's accumulated purchasing power -- that is, as the safe and sure consolidation of your savings.

And choose a gold firm you can trust. Choose USAGOLD-Centennial Precious Metals, Inc. -- serving investors since 1973.

R.
Chris Powell
(12/11/2006; 17:50:36 MDT - Msg ID: 150132)
Mortgage delinquencies threatening U.S. borrowers and banks
http://news.yahoo.com/s/ap/20061211/ap_on_bi_ge/home_mortgagesBy Marcy Gordon
Associated Press
Monday, December 11, 2006

Mortgage delinquency and foreclosure rates are on the rise, and the impact could be greatest on low-income families that took out higher-interest loans for risky borrowers, some experts said Monday.

Treasury Secretary Henry Paulson said the government wants to issue guidelines to banks and savings and loans that will allow people to get home loans "without taking unnecessary risks."

"Expanding opportunities for more people to buy a home is a good thing. But we do not want Americans to become overextended and see their dream end in foreclosure," Paulson said at a conference on the housing market organized by the Office of Thrift Supervision, a Treasury Department agency.

Some experts are concerned that the increase in mortgage foreclosure rates could affect the banking system's financial health.

There have started to be "early signs of credit distress" in financial institutions' holdings of so-called "subprime" mortgages, especially in California, Richard Brown, chief economist for the Federal Deposit Insurance Corp., said at the conference.

In the sizzling housing boom that waned in the latter half of last year, many people took out subprime mortgages -- higher-interest loans for people with blemished credit records who are considered higher risks -- with adjustable interest rates.

When interest rates rise, as happened last spring, it can raise monthly payments for people with adjustable-rate mortgages, potentially creating a strain if they stretched to buy a home and don't have a financial cushion in their savings.

William Longbrake, a senior policy adviser to the Financial Services Roundtable, an industry group, said he is among a minority of experts "who believe the worst is still ahead in the housing market" for home prices to continue to fall.

"There is worse to come. ... The bottom is probably still many months ahead," Longbrake said. He noted that the rise in delinquencies and foreclosures in subprime mortgages particularly affects low-income families.

Mortgage defaults could snowball in the coming months, a situation that bears close watching, he said.

The Mortgage Bankers Association reported in September that mortgage foreclosures climbed in the second quarter as higher interest rates and energy prices made monthly payments harder for some homeowners.

The percentage of mortgages that went into the first stages of the foreclosure process in the April-to-June quarter rose to 0.43 percent, up from 0.41 percent in the first quarter and the highest level in just over a year. Foreclosure rates were highest for subprime borrowers.

Also in September, the federal banking regulators directed financial institutions to properly explain the risks posed to borrowers from interest-only and other nontraditional mortgages. Such mortgages have exploded in popularity in recent years and raised concern that there could be a sizable number of defaults if borrowers cannot meet rising mortgage payments.

The regulators also said banks must make sure the loans they made were "consistent with prudent lending practices, including consideration of a borrower's repayment capacity."

Paulson said Monday the Treasury Department wants to "make sure that we have the right guidance in place to help people access home financing without taking unnecessary risks."
TownCrier
(12/11/2006; 18:05:46 MDT - Msg ID: 150133)
Wealthy Americans Divided on Economy
http://www.620ktar.com/?nid=48&sid=283881NEW YORK (AP) - Wealthy Americans are divided on the outlook for the U.S. economy next year, but they're more optimistic than pessimistic about prospects for the stock market, according to a survey released Monday.

The study of individuals with at least $500,000 in investable assets ... found that high net worth individuals believed the market would perform well next year, with 50 percent saying they were more optimistic, 16 percent more pessimistic and 34 percent neither more optimistic or more pessimistic.

Ultrahigh net worth individuals _ those with $10 million or more in assets _ were a bit less comfortable with stock market prospects, with 23 percent saying they were more optimistic, 27 percent more pessimistic and 50 percent neither more optimistic or more pessimistic.

...Asked how their portfolios currently were invested, the wealthy Americans gave this breakdown: 43.7 percent in stocks, 15.6 percent in bonds, 54.4 percent in cash, 1.6 percent in hedge funds, 7.5 percent in private equity pools and 11.6 percent in real estate.

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

Interesting... from the above info, with 135.4 percent of their porfolios invested in stocks, bonds, cash, real estate... it would seem that gold has more than doubled in price these past five years without the pressure/support of these so-called wealthy Americans.

How much higher could gold run if these massive, goldless portfolios were reallocated in a more prudential fashion to contain even a very meager 5-10% gold?

R.
Lackluster
Wealthy Americans
Towncrier, it's that extra 35.4% that makes them wealthy, you see!
mikal
China takes some heat
http://www.telegraph.co.uk/money/main.jhtml;jsessionid=XMNWBU5YZ44FPQFIQMFCFFOAVCBQYIV0?xml=/money/2006/12/11/ccview11.xmlMonday view: China's banks are the Achilles heel of the global boom By Ambrose Evans- Pritchard
Last Updated: 3:08pm GMT - 11/12/2006 -- Excerpts:
"If you are not keeping a close eye on the Chinese banking system, perhaps you should be. Bill McDonough, the ex-chief of New York Federal Reserve, let slip at a conference in Italy this week that China's rickety credit structure was the biggest single menace to the world economy. It was Mr McDonough, now an adviser to Lehman Brothers, who rescued the hedge fund Long Term Capital Management after it made an $80bn bad bet on Danish, Swedish and south European bonds in August 1998."
Mikal-- The pot loves to call the kettle black. More attention should be given to the fraud heating both pots to the boiling point.

"Beijing admits that the banks are the "soft underbelly" of its booming economy, but says the system has been cleaned up after an estimated $400bn in bail-outs since 1998. Critics reply that fresh money has been wasted by Communist bosses meting out credit for political ends, digging the country into a deeper hole.
Investment is running at 43pc of GDP, leaving an oversupply of factories and office blocks, like Japan in the 1980s, but with even less market discipline. Ernst & Young calculated the bad debts at more than $900bn in a report this year but was forced to recant by Beijing.
Gordon Chang, author of The Coming Collapse of China, said the regime had embarked on a suicidal course, living from one day to the next from fear that 140m footloose urban migrants could turn violent."
Mikal-- Hard to deny that prosperity and western capitalism aren't as ubiquitous in China as the number of "Made in China" labels. Evans- Pritchard digs deeper:

"China is just piling up more and more non-performing loans, and eventually it's going to come crashing down, because economically this doesn't make any sense," he said. "You can't blow up your balance sheet at 20pc to 25pc a year with a well-managed bank in a well-regulated society. How the devil can you do it in China? This is just ludicrous," he said.
Charles Calomiris, finance professor at New York's Columbia University, warns in the journal Central Banking that Beijing cannot change course because it faces "political revolution" if it cuts off the flow of credit.
"Bad loans are not some little problem a good regulator can take care of; they are part of the whole way the system functions. Looking into the crystal ball, there will be a crisis in the financial sector in China in 2009-2010," he said. Some say sooner."
Mikal-- I'm one of those who say sooner, unless it's avoided entirely using pragmatic approaches currently considered threatening to the juggernaut of global hegemony pursued by the corporate/banking/media institutionalized consortium.

"It is a fear shared by experts on the ground, if not by foreign banks now buying "pay-to-play" blocs of the Big Four state behemoths. The prospectuses of these Chinese banks are a "comedy show", says Kent McCarthy from the hedge fund Jayhawk Capital."
Mikal-- There's more in this soap opera/"comedy"- the rest of the article gives a preview of the next episodes and the author finishes well with this comment on the outcome:

"In the end, China's bubbling energy and mass of people will likely send it vaulting up the economic league. Much like America's stunning emergence in the 1920s � another tale of over-investment and bank abuse. That is a parallel that should give pause for thought."
TownCrier
Lackluster,
And thus we see the miracle of margin and leverage at work...

;-D

Or else, in the math we see the educational system at work.

R.
TownCrier
"...generations..."
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061211:MTFH16725_2006-12-11_21-15-24_N11235711&type=comktNews&rpc=44HEADLINE: Paulson tamps down U.S. hopes for China talks

WASHINGTON, Dec 11 (Reuters) - U.S. Treasury Secretary Henry Paulson on Monday played down hopes for quick solutions to sensitive currency and trade issues...

Chinese authorities also were pushing back against any prospect the Asian export powerhouse was about to alter its policies soon to accommodate U.S. lawmakers' and businessmen's anger over soaring U.S. deficits...

Paulson, the former Goldman Sachs chairman who likes to joke that he is "not known for being patient," was counseling just that as he discussed his trip, which begins on Tuesday.

"There is a tendency in Washington to want immediate answers, but a relationship this important will have consequences for our economy and for our nation over generations," he told a housing conference, so the best hope is to lay the groundwork...

U.S. critics frequently point to Chinese currency policy as a major irritant, alleging Beijing manipulates its yuan, also known as the renminbi, to keep its value low and gain an unfair trade advantage in America's consumer markets.

But Chinese officials on Monday, while repeating they will let market forces play a greater role in setting the yuan's exchange rate, laid down their own marker by saying exchange rates were "a sovereign issue" for China to decide.

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

And as always left unspoken in the middle of this, at the end of the day there resides the solid domain of gold as the final arbiter of the value of any given national currency unit.

Dismiss that truism at your own financial peril.

R.
RAP
U.S. dollar facing imminent collapse?
Chris Powell
Having the U.S. government as a subsidiary is good business
http://biz.yahoo.com/ap/061212/goldman_earns.html?.v=1Goldman Sachs 4th-Quarter Profit Doubles

From The Associated Press
Tuesday, December 12, 2006

NEW YORK -- Goldman Sachs Group Inc., the biggest investment bank on Wall Street, reported fourth-quarter profit doubled from last year on record takeover activity and robust stock market trading.The company reported a profit of $3.15 billion, or $6.59 per share, compared with $1.63 billion, or $3.35 per share, in the year-ago period. Revenue soared to $9.41 billion, up from $6.4 billion last year.

This easily surpassed Wall Street projections for earnings of $6.04 per share on $8.96 billion of revenues, according to analysts polled by Thomson Financial.

"We are very pleased with this year's performance," said Chairman and Chief Executive Lloyd C. Blankfein in a statement. "The breadth of our franchise, the diversity of our businesses, and the performance of our people enabled us to serve our clients around the world."

The stock closed at $202.52 on Monday, near its 52-week high of $206.70. Shares picked up another $1.08 in premarket electronic trading.
Clink!
Musings on the COIN Act
I happened to be gloating over my horde of The Shiny at the weekend (both coins, sigh) and a thought struck me. There has been a lot of chatter recently that one of the (minor) provisions of the proposed COIN Act is the suppression of the 1 cent coin. Part of the grumbling says that prices will increase because of rounding. However, if we assume that the dollar is worth, for sake of argument, 4% of what it was worth a hundred years ago, that means that the smallest denomination coin available, the 1 cent, was worth 25 cents by today's standards. Yet no-one back then was complaining too hard as the half-cent coin had been discontinued in 1857 - fifty years previously.
And then at the other end of the spectrum, the largest FRN is currently the $100, which would be less than a $5 half eagle, a coin which I assume was in current usage, along with the eagle and the double eagle. Not to mention notes of much larger denomination ($10,000 from 1865, and then $100,000 in 1929).
C!
Clink!
Those Goldman Sachs numbers
I'll say those are good numbers ! Where else can you make $3.15B profit on $9.41B revenue ?!

C!
mikal
Boston Tea Party goes global
http://www.fmnn.com/WorldNews.asp?nid=28910TEA PARTY FOR 9/11 TRUTH GOES VIRAL
Tuesday, December 12, 2006 - FreeMarketNews.com
Staff Reports - Free-Market News Network

On Saturday, December 16th, the anniversary of the Boston Tea Party, there will be a gathering in front of Lafayette Park in Washington, DC, between 11 a.m. and noon. The occasion: the shredding of the report from the 9/11 Commission on the "official" version of those events.

At the same time, similar activities will be taking place in Boston, MA and San Francisco, CA (with other sites possible as well), involving speeches, demonstrations, teach-ins and similar actions. The Boston gathering will feature a series of speakers at the legendary Faneiul Hall, followed by a march to the sea, and the "casting of the 9/11 'Omission' report into Boston Harbor.

The West Coast rally, held at approximately the same time, will be concluded with the similar tossing of "a large replica of the flawed Report" into the San Francisco Bay. It is all designed to highlight the many discrepancies and oversights in the Commission's report, whose detractors call a "whitewash" of what really happened on September 11, 2001. The intention is to show the "Connected Dots" among all the conflicting accounts of the disaster, so that this information the organizers say should be "Heard Round the World" is made more widely known. [Sources: Infowars.com, boston911truth.org and indybay.org.] - ST
USAGOLD / Centennial Precious Metals, Inc.
Only THREE DAYS to place your pendant order for timely Christmas delivery!
TownCrier
FOMC leaves rates UNCHANGED at 5.25 percent
http://www.federalreserve.gov/BoardDocs/press/monetary/2006/20061212/default.htmPRESS RELEASE -- Dec 12, 2006

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market. Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.

Readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; William Poole; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

^---(from url)---^
TownCrier
Vietnam: gold giant reports record gold sales, revenues
http://www.thanhniennews.com/business/?catid=2≠wsid=23156December 12, 2006 -- Vietnam's largest gold company, Saigon Jewelry, said it has sold over 1.69 million taels (1.25 oz each) of gold this year, the highest-ever.

With gold prices ruling very high almost through the year, it also announced its highest-ever annual turnover of VND16.15 trillion (US$1 billion).

Gold demand is forecast to rise during Christmas and New Year.

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

Prices are not slowing down savers from exchanging their dubious paper money for tangible enduring wealth. When Time is the referee, the declared winner in these contests is always gold.

R.
mikal
Japan gets rare visit, new role
http://english.people.com.cn/200612/12/eng20061212_331636.htmlChina, Japan, India should work for regional stability, prosperity | Xinhua | UPDATED: 19:53, December 12, 2006
"China, India and Japan should make joint efforts to promote regional stability and prosperity, said Foreign Ministry spokesman Qin Gang Tuesday. When asked to comment on the upcoming Japan visit of Indian Prime Minister Manmohan Singh at a regular press conference, Qin said the three countries have broad common interest in promoting common development and realizing common prosperity in the region.
He said he hopes the three as well as other countries in this region can strengthen dialogue, exchanges and cooperation. Qin said a new concept of security and development, namely peace, development and cooperation, should be set up.
It is reported that Singh is scheduled to start a four-day visit to Japan on Wednesday, the first visit by an Indian prime minister to Tokyo in five years."
Mikal-- Japan gets a rare visit to kick off an apparent
new chapter of relations with the region's other heavies. Besides (expected) talk on trade, "prosperity" and "common development", joint efforts seem well underway in "regional stability", "peace" and "security".
mikal
Politics and profits
http://www.iht.com/articles/2006/12/12/opinion/edbowring.phpIt's Not Just China, Mr. Paulson
Philip Bowring - Published: December 12, 2006 - Excerpts:
"HONG KONG: The current American obsession with China, reflected in the size and weight of the U.S. team being led to Beijing this week by Treasury Secretary Henry Paulson, may be the economic equivalent of an earlier one with Iraq. It is worrying that the United States is once again focusing on a single country while ignoring the regional � and global � context."

Very good and concise opinion piece that everyone should read. Mr. Bowring makes a valid comparison to the recent trip to Iraq where bilateral negotiations failed because the issues were multilateral. This context is developed with various excellent examples such as these:

"Or perhaps Paulson could have stayed at home and studied some numbers on how much of China's accumulation of foreign exchange reserves � now more than $1 trillion � was the result not of its trade surplus but the inflow of capital. That, in turn, has been the result of the very liberalization that China has been urged to adopt, and the huge sums that banks � not least Paulson's old firm Goldman Sachs � have been prepared to pay for positions in China.
Paulson could equally have asked the Federal Reserve chairman, Ben Bernanke, who is also traveling to Beijing this week, to explain why they should be so fussed about China when the biggest surplus countries by far are now the oil exporters, such as Saudi Arabia and Russia.
Or he could ask another member of the team, Commerce Secretary Carlos Gutierrez, why he is so concerned about China's current account surplus when it is of roughly the same magnitude as those of its Asian neighbors who mostly enjoy big trade surpluses with China � which is often just an assembler of their products.
The U.S. trade representative, Susan Schwab, could explain why she is so keen on signing up bilateral trade deals that undercut the nonpreferential basis of the World Trade Organization at the same time that China is being accused of failing to live up to its WTO obligations."
tejbear
Silver verses Gold
Something to think about:

Readers of this forum are all too aware of the declining strength of the dollar. We also know that precious metals have always been a place to protect one's wealth in these financially turbulent times. But what is the best investment all around: gold, silver or both? To make a decision, I decided to look back at relative purchasing powers and tried to determine what the value of both gold and silver would be worth today, in order to have the same purchasing power as in 1900.

It seems to me that in many articles, it is stated that the dollar has lost 97% of its purchasing power since 1900. For easy math, assume one silver dollar is one ounce of silver; one 20 dollar gold coin is one ounce of gold. (They are reasonably close.) It turns out you merely divide 0.03; you can to convert 1900 buying power to today's purchasing power. Therefore, for a silver dollar: $1.00/0.03=$33.333. For a $20.00 dollar gold piece: $20.00/0.03=$666.66

By this logic, gold, at ~$630, is selling roughly at its 1900 purchasing power. On the other hand, silver, at ~$13.45, is selling at only 40% of its 1900 purchasing power. That is, 60% undervalued!!! One would deduce from this that silver's upside potential is significantly higher than gold's.

But then again, for buyers who take possession, storing silver is always a pain when you invest a significant amount, where as gold fits neatly into a bank's safety deposit box.

By the way, I am not getting rid of my gold�

The Bear


USAGOLD Daily Market Report
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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

Trade deficit dampens, gold pares loss after Fed holds

December 12 (from MarketWatch) -- On Tuesday, the dollar rose against the yen after the Commerce Department said the U.S. trade deficit narrowed by 8.4% in October to $58.9 billion, its lowest level since Aug. 2005. The reading was well below the consensus forecast of Wall Street economists of a deficit of $63.1 billion.

Gold futures extended their losses from Tuesday's regular session into electronic trading, but pared declines after the U.S. Federal Reserve decided to leave overnight interest rates unchanged at 5.25%.

The decision came 45 minutes after the official close of regular-session metals trading in New York.

Ahead of the Fed decision Tuesday, gold for February delivery had ended its regular trading session at $631.70 on the New York Mercantile Exchange, down $3.10.

Shortly after the announcement, the February contract for gold futures traded at $632.90 in electronic trading.

"Gold's reaction was slightly positive as it gives investors a reason to want to hold long positions," said John Person, president of National Futures Advisory Service.

"The economy is still at risk to inflation, the Fed did not raise rates and thus it can foster the opportunity to fall behind the inflation fighting campaign, especially if the inventory of homes decreases and if energy prices escalate," he explained.

"Gold should be a buying opportunity based on today's announcement," he said.

---(see url for full news, 24-hr newswire)---
TownCrier
IMF Officials Express Bafflement At Zimbabwean Economy
http://www.voanews.com/english/africa/zimbabwe/2006-12-12-voa67.cfm?rss=economy12 December 2006 -- International Monetary Fund officials in Zimbabwe for consultations and assessment of the country's economic plight met Tuesday with civic leaders and told them that it is a mystery to them how the country has survived under current conditions.

The IMF team is in Harare for so-called Article IV consultations and assessments that will prepare the ground for a meeting in February of the Fund's executive board, which will again examine Zimbabwe's status as an IMF member nation.

...They told civil society activists that the IMF still does not know the source of US$175 million that Harare paid to the Fund in 2005 against arrears to stave off expulsion.

The IMF officials said it remained a mystery how Zimbabweans have survived in an environment of hyperinflation and chronic shortages of the essentials of life.

The comments on Harare's debt payments came after NGO officials asked the team why the IMF had pressed Harare to pay debt arrears when many Zimbabweans did not have enough to eat. NGO sources said the officials responded that they had only demanded Harare make policy changes, and that money was never an issue.

But Harare insisted on paying down debt arrears while ignoring IMF urgings that the government's fundamental economic approach be overhauled.

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

According to another article, inflation in Zimbabwe is now at 1,100 percent.

Figures like that really hammer home the message that currency is not a firm foundation of wealth. For that, a person should convert his or her excess currency, while it's still able to function, into enduring tangible wealth.

Bottom line: On the international stage Zimbabwe's currency is no good, but the value of its physical gold stands as equal with all others.

R.
Goldilox
OT-The $2 Bill
Just got this from my Dad, and had to share it, but I'm amazed that anyone thinks $2 still buys a meal!

STORY:
On my way home from work, I stopped at Taco Bell for a quick bite to eat. In my billfold are a $50 bill and a $2 bill.�I figure that with a $2 bill, I can get something to eat and not� have to worry about anyone getting irritated at me for trying to break a $50 bill.

Me:
"Hi, I'd like one seven-layer burrito please, to go "

Server:
"That'll be $1.04. Eat in?"

Me:
"No, it's to go." At this point, I open my billfold and hand him� the $2 bill. He looks at it kind of funny.

Server:�
�"Uh, hang on a sec, I'll be right back."

He goes to talk to his manager, who is still within my earshot.��
The following conversation occurs between the two of them:

Server:
"Hey, you ever see a $2 bill?"

Manager:
"No. A what?"

Server:
"A $2 bill. This guy just gave it to me."

Manager:
"Ask for something else. There's no such thing as a $2 bill."

Server:
"Yeah, thought so."

He comes back to me and says, "We don't take these. Do you have anything else?"

Me:�
"Just this fifty.� You don't take $2 bills?�� Why?"

Server:�
�"I don't know."

Me:
"See here where it says legal tender?"

Server:
"Yeah."

Me:
"So, why won't you take it?"

Server:�
�"Well, hang on a sec."

He goes back to his manager, who has been watching me like I'm a shoplifter, and says to him, "He says I have to take it."

Manager:
"Doesn't he have anything else?"

Server:
"Yeah, a fifty.� I'll get it and you can open the safe and get change "

Manager:
�"I'm not opening the safe with him in here."

Server:
"What should I do?"

Manager:
�"Tell him to come back later when he has real money."

Server:�
"I can't tell him that! You tell him."

Manager:
�"Just tell him."

Server:�
"No way! This is weird. I'm going in back."

The manager approaches me and says, "I'm sorry, but we don't take big bills this time of night."

Me:
"It's only seven o'clock!� Well then, here's a two dollar bill."

Manager:
"We don't take those, either."

Me:
"Why not?"

Manager:
"I think you know why."

Me:
"No really, tell me why."

Manager:
�"Please leave before I call mall security."

Me:
"Excuse me?"

Manager:
�"Please leave before I call mall security."

Me:
"What on earth for?"

Manager:
"Please, sir."

Me:
"Uh, go ahead, call them."

Manager:
"Would you please just leave?"

Me:
"No."

Manager:
"Fine -- have it your way then."

Me:
"Hey, that's from Burger King, isn't it?"

At this point, he backs away from me and calls mall security on the phone around the corner. I have two people staring at me from the dining area, and I begin laughing out loud, just for effect.�� A few minutes later this 45-year-oldish guy Comes in.

Guard:
"Yeah, Mike, what's up?"

Manager (whispering):
"This guy is trying to give me some (pause) funny money."

Guard:
"No kidding!�� What?"

Manager:
"Get this .. A two dollar bill."

Guard (incredulous): "Why would a guy fake a two dollar bill?"

Manager:
"I don't know.� He's kinda weird.� He says the only other thing he has is a fifty."

Guard:
"Oh, so the fifty's fake!"

Manager:
"No, the two dollar bill is."

Guard:
"Why would he fake a two dollar bill?"

Manager:
"I don't know! Can you talk to him, and get him out of here?"

Guard:
"Yeah."

Security Guard walks over to me and......

Guard:
"Mike here tells me you have some fake bills you're trying to use."

Me:
"Uh, no."

Guard:
�"Lemme see 'em."

Me:
"Why?"

Guard:
�"Do you want me to get the cops in here?"

At this point I am ready to say, "Sure, please!" but I want to eat, so I say "I'm just trying to buy a burrito and pay for it with this two dollar bill.
I put the bill up near his face, and he flinches like I'm taking a swing at him.��He takes the bill, turns it over a few times in his hands, and says, "Hey, Mike, what's wrong with this bill?"

Manager:
"It's fake."

Guard:
"It doesn't look fake to me."

Manager:
�"But it's a two dollar bill."

Guard:
"Yeah?"

Manager:
"Well, there's no such thing, is there?"

The security guard and I both look at him like he's an idiot, and it dawns on the guy that he has no clue.
So, it turns out that my burrito was free, and he threw in a small drink and some of those cinnamon thingies, too.
Made me want to get a whole stack of two dollar bills just to see what happens when I try to buy stuff. �If I got the right group of people, I could probably end up in jail. You get free food there, too.


Just think...those two will be voting soon.........................................
Flatliner
@tejbear
I love these dollar puzzles. Here is another way of looking at it.

In 1900, gold functioned as money. Each gold coin not only had intrinsic value (metal) but it also had a demand based on use as a medium of exchange and a coining premium. Another way of looking at is was that the mint needed to buy the gold from the miner for the going market price, pay the mint for coining the metal and then cover profit for the treasury in the remaining value of the 20 dollar denomination. A little math shows an equation similar to Intrinsic Value + Coining Cost + Monetary Use = 20 dollars. I have no idea what percentages each of these areas were with each coin, but logic has it that coining cost might be about 5% leaving no more than about 95% for the other two areas. If the politicians were honest, one might believe that the Monetary Use value of the coin would be close to zero and the Intrinsic Value would be close to 95%.

Also, when you look at the Monetary Use portion of the coin, you have to consider Monetary demands like How much is saved vrs how much is in circulation. If there is a high amount of gold in circulation, the monetary premium may be lower than when there is a lot of gold in circulation. Thus, even though it may appear that the monetary portion of the coin's value was low, it is all a matter of how coins circulated in the economy all those years ago. I would contend that the Monetary Use portion of the function of the coin was not zero (but I have no idea how much of the coin it was).

Today, when we look at a gold coin we see it differently. We see it as Intrinsic Value + Coining Cost + Speculation Demand = Spot Price. It is a different equation with a missing element; Monetary Use. Where is Monetary Use today? It's been replaced with Federal Reserve Notes. This is very interesting because Federal Reserve Notes (FRNs) did not exist in 1900. But, today, they function around the globe handling the Monetary Use function that the gold coins once did. If FRNs lost their Monetary Use function in the world economies only to be replaced by gold, than we could use the old formula Intrinsic Value +Coining Cost + Monetary Use = some dollar denomination. Anyone that thinks about this just a little will discover that if gold were to circulate as a means of exchange, the Monetary Use demand would be HUGE. How huge? Well, gold that is currency carved up in ounce size pieces would have to be cut up in atom size pieces to handle all the little trades that occur. And, well, that just doesn't seem feasible.

The whole point here was to point out that gold's Monetary Use value is not factored into the value of gold coins today as it was in one point in time. At the same time, bringing gold back into circulation to replace currency is not realistic due to the size in which you would have to carve it up. When it's carved up that small, it ceases to retain its gold like feel. The coins become some other metal.

We are at a point in the evolution of the world economies where gold may start acting like a store of wealth or pick up the Reserve Asset premium held by FRNs. In this case, we may have something like Intrinsic Value + Coining Costs + Reserve Asset = Market Value in any currency.

If the strength of the US Dollar relative to gold is any indication as to the value of the Reserve Asset premium, we may find that this part of the future equation of gold is bigger than most people think.

Sorry for skipping over Silver. There is no political movement, at hand, that indicates that silver may be used as a reserve asset. Thus the Monetary premium that silver once had may not return. But, who knows? I'm not getting rid of my silver. ;)
Goldilox
Intrinsic Value and confiscation
@ Flatliner and tejbear,

In the days when money was more than "floating promises to pay", "reserves" were measured in intrinsic value.

Today, CB monetary reserves are no more that a "credit rating", that can be changed in a heartbeat. How much easier is confiscation when it only requires a political agreement to "freeze assets" in a virtual accounting system?

The problems arise, like Iran in 1980, when one governement decides to freeze the assets of another, and hold them for a puppet governor like the Shah. While Iran never got its "money" back, the resutling rise in oil prices (their real store of value) more than compensated Iran and the OPEC neighbors who participated in the resulting embargo, while the complicit banksters got a "$15B bonus" in frozen 1980 funds that they never had to give back to anyone.

It works kinda like the "fines" imposed on Brokerages by the SEC and courts for their illicit dealings. The broker gets a "slap on the wrist", the courts and SEC get "windfall funding", and the people who were actually screwed by the original deal stay screwed.
Chris Powell
Al Jazeera joins ROB-TV in exposing the gold price suppression scheme
http://www.youtube.com/watch?v=GbPetrK_6Lc&mode=related&search=8:45p ET Tuesday, December 12, 2006

Dear Friend of GATA and Gold:

Al Jazeera, the international news organization based in Qatar and owned by the emir of that Arabian Gulf country (an ally of the United States recently visited by your secretary/treasurer in another capacity), has just joined Canada's Report on Business Television in what might as well be called Radio (and Television) Free America.

Al Jazeera's English-language service, which was started a few months ago to bring to the West a long-neglected Middle Eastern perspective on the news, has just broadcast a rollicking 10-minute analysis about gold and the dollar. It is called "Death of the Dollar" and is part of Al Jazeera's "People and Power" investigative program. Among other things, the segment:

-- Examines the gold price suppression scheme of the Western central banks.

-- Interviews GATA Chairman Bill Murphy and GATA consultant James Turk, founder of GoldMoney and editor of the Freemarket Gold & Money Report.

-- And cites the report vindicating GATA by the Cheuvreux brokerage house of the French bank Credit Agricole, the rigging of the U.S. Consumer Price Index, and the Federal Reserve's discontinuation of the M3 money supply figures to conceal the explosion of the U.S. money supply.

The segment is introduced by Shereen El Feki, host of "People and Power," and is written and narrated by Max Kaiser, formerly a broker on Wall Street and now, it seems, a talented international troublemaker.

We haven't been able to locate a direct link for the program at Al Jazeera's Internet site but the program has been copied at YouTube here:

http://www.youtube.com/watch?v=GbPetrK_6Lc&mode=related&search=

The video reproduction at YouTube isn't great but the audio is fine and you won't miss anything even as you may want to watch the program two or three times out of amazement. It's the sort of TV news analysis you'd expect to see in a free country -- or one whose news media weren't dominated by financial interests.

Media technology is liberating the developing world. Thanks to ROB-TV and Al Jazeera, it just might help liberate the developed world as well.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Chris Powell
MorganChase buys protection against SEC actions
J.P. Morgan Names Cutler Counsel

By Peter Lattman
The Wall Street Journal
Wednesday, December 13, 2006

Stephen M. Cutler, a partner at Wilmer Cutler Pickering Hale & Dorr LLP and a former enforcement chief at the Securities and Exchange Commission, was named general counsel for J.P. Morgan Chase & Co.

Mr. Cutler, who plans to join the company in February, will also head the bank's legal and compliance activities worldwide. He succeeds Joan Guggenheimer, who died this year.

The 45-year-old securities lawyer leaves WilmerHale, where he co-headed the firm's securities practice out of its Washington office. He joined the law firm in 2005 from the SEC, where he led the agency's enforcement division during a wave of financial fraud and presided over some of the biggest cases in the agency's history, including a $750 million settlement with WorldCom Inc. and a $1.4 billion settlement with Wall Street firms over conflicts of interest involving stock research.

Prior to joining the SEC in 1999, Mr. Cutler was a partner at Wilmer, Cutler & Pickering in Washington. (Wilmer, Cutler and Boston's Hale & Dorr merged in 2004. Mr. Cutler is no relation to founding partner Lloyd Cutler.)

The Cutler news comes amid several other partner departures in WilmerHale's securities practice. Yesterday, law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP announced Charles Davidow will join as a partner in the firm's litigation department in Washington. Mr. Davidow has been a partner at WilmerHale for about 20 years.

Last week, investment bank Cowen Group Inc. announced J. Kevin McCarthy will become its general counsel. Mr. McCarthy joined WilmerHale in 2004 after spending nine years at Credit Suisse Group's then-named Credit Suisse First Boston, where he headed up that bank's litigation department.

Paul Eckert left the firm this month to work for President Bush in the White House Counsel's office. This summer, Andrew Vollmer left WilmerHale to serve as deputy general counsel of the SEC.

William McLucas, the co-chair of WilmerHale's securities practice, said that because of the group's prominence, it often loses top lawyers to government and financial-services industry posts.
tejbear
Flatliner #150153
Flatliner,

I concede all of you points, but you miss my point. Yes the dollar is ripe for value reduction. But dig a little deeper and tell me what will generate the highest returns: silver or gold?

The Bear
osa104c
LIMIT.....less.........SILVERless
http://articles.moneycentral.msn.com/Investing/Dispatch/061212MarketsClose.aspx


Tues. Mon. Chg. Month chg. YTD chg.

Gold $631.70 $634.80 -$3.10 4.10% 21.74%

Copper $3.0945 $3.1335 -$0.04 -7.47% 43.16%

Silver $13.9800 $14.0250 -$0.04 13.94% 57.26%

I don't have all the facts.. But, it appears deprecating dollars would better be applied to the rapidly appreciating commodity that may have additional monetary applications. Both public and geriatric applications are going to be HUGE>>>>>>>>>>>>>>>>>>>>....AMF
TownCrier
tejbear, digging to a moderate depth...

Don't overlook that Flatliner said the following: "There is no political movement, at hand, that indicates that silver may be used as a reserve asset."

Since USAGE has a profound impact upon a thing's VALUE (and ultimately is reflected in its price), we dare not ignore that evolutions underway in the structure of the world's central banks' reserves (i.e., MTM accounting of gold holdings) have the potential to completely redefine the rules of the game (as we know it) and with it redefine the usage of gold.

As for estimating the potential for higher returns (future prices on silver versus gold), what is there on the horizon that could redefine the usage of silver in any order of magnitude as profoundly as conditions appear to be shaping up for a redefinition of gold usage?

My money >>> my savings >>> are 'betting' on gold all the way. But then, maybe I've been digging in all the wrong places...

R.
Flatliner
@tejbear
Missing the point is what leads to better conversation. From a pure investment point of view, it's hard to argue with osa104c's posting that shows percent gains. Also, when you think historically, both metals have performed monetary functions. I believe that any usage demand for either metal that comes from monetary demand will drive a premium for that metal above and beyond its intrinsic value.

I guess the most important point that differentiates the two metals is that central banks around the world use gold as a monetary reserve. This is a clear indication that gold has a distinctly different future ahead of it in the near term. The banks already treat gold as a currency and it's clearly on the books. Silver does not have this privilege.

Another key fact is this. When holding dollars as a reserve asset turns out to no longer be fashionable, which metal will central banks buy? An investor thinks � the metal that gives the highest return. But the central banker has already told you which one they will buy. They will buy the one that acts like a currency that is already on their books and already in possession. In other words, the act of buying gold will immediately strengthen their position on the books. Thus, as dollars fall, gold jumps. Losses taken through weak dollars is regained by strong gold.

If you're still not sold, think of it this way. If there were plentiful amounts of physical gold, would central banks be holding depreciating assets? The answer here is an astounding no. They would convert to gold in a heartbeat. Thus, the supply of physical gold is extremely narrow. Any move to convert will drive the price and halt the physical markets as people scrounge to find a new supply. In other words, central banks will not find the metal that they want during this conversion. Thus to profit from the conversion, they must already be holding what they plan to make a profit on! Make sense?

Silver may also react in a similar manor as dollars flood into the metal. In the end, it may even have better returns than gold. But, I just can't see it. Ultimately the fact that central banks hold gold and stand to gain from a revaluation in the high side and actually have incentive to drive the price up makes a strong case to not leave gold out of one's portfolio.
TownCrier
Unusual Ending to Gold Suit
http://www.thestreet.com/markets/metals/10327510.html12/12/2006 -- The man who charged the World Gold Council with stealing his idea for the streetTRACKS Gold Shares exchanged-traded fund is making an unusual mea culpa.

As part of an agreement to dismiss the three-year-old lawsuit, Dan Ascani now says in a court filing that his lawsuit against the WGC "was entirely without merit.''

"I have learned through the trial of this action that my lawsuit against World Gold Council was entirely without merit and I apologize to World Gold Council for suing them," says Ascani, in the sworn statement dated Dec. 7, a copy of which was distributed by WGC.

In 2003, Ascani sued the WGC, seeking $450,000 in damages. In the lawsuit, filed in New York state court, Ascani claimed that in 2000 he met with WGC officials and told them about his idea for an ETF that holds bars of gold.

...But three years later, just as the dispute was being heard by a judge, Ascani is singing a different tune.

The WGC "did not misappropriate any trade secret belonging to me" and "did not breach any confidentiality agreement with me," his statement reads.

...Justice Carol Edmead agreed to dismiss the matter.

Still, there may be more to this story. But for now the parties are keeping quiet.

"I cannot reveal the other terms of the settlement with you," Ascani says. Likewise Ascani's attorney, Charles Hecht of Hecht & Associates, also declined to comment.

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

And to think that I thought the OCEAN was fishy...

R.
TownCrier
The IMF's finances
http://www.euro2day.gr/articlesfna/25409090/(FT) 12/12/2006 -- Don't say it too loudly but the International Monetary Fund, used to whipping fiscal miscreants into shape, had a profit warning itself last year. Things have deteriorated since. In the first quarter of this fiscal year, it made an operating loss.

...As a bank, the IMF meets its $1bn of annual operating costs from the spread earned between the interest rate it charges borrowing countries and the risk-free interest rate it pays to wealthy lending states.

...outstanding general IMF credit has shrunk from a peak of $82bn in 1999 to just $23bn, of which half is lent to troubled Turkey.

For a bank with fixed costs, a rapidly vanishing balance sheet poses a more immediate threat than debates over China's voting quota. Is the institution doomed? Its difficulties do reflect cyclical factors .... Still, waiting for a bond market meltdown is an impolitic strategy for an institution intent on assisting emerging economies.

The IMF owns $65bn of gold but its use is legally restricted. Instead, since the summer, an elegant financial device has been used. Some $9bn of retained earnings, previously used to subsidise loans, is now invested in government securities and the income used to cover operating shortfalls.

Some cost-cutting is probably on the agenda too � a third of the IMF's overheads reflect lending activities rather than its healthier surveillance and advisory functions.

The credit cycle will turn eventually. Until then, when it comes to "structural adjustment", the IMF may have to swallow its own medicine.

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

Should such a turn in the credit cycle arise in a timely fashion to offer salvation to the IMF, the IMF will stand ready and eager to lend... BUT... will nations stand in line for that brand of assistance?

Who would've thought that an international bureaucratic institution of 60 years could be so easily put to sleep? It's a major coup, but done as gentle as a lullaby!

A tip o' the hat to the engineer of this one!

R.
Goldilox
IMF
"the IMF meets its $1bn of annual operating costs. . . "

A billion? Man, those "economic hitmen" obviously don't come cheap!
Lackluster
Gold v Silver
The gold v silver debate is boring. No one knows the future. Many here suspect the dollar will depreciate, maybe soon, and owners of precious metals will benefit. Which one will benefit most? Who cares? Just own both!
mikal
Slow growth made by Fed and Treasury choices, Prof says
http://www.finfacts.com/irelandbusinessnews/publish/article_10008440.shtmlDr Peter Morici: US November Retail Sales register a decent advance - Not enough to power robust growth | Professor Peter Morici | December 13, 2006
contrarian
Druggies Are Ruining the Country
http://www.gold-eagle.com/cgi-bin/gn/get/forum.html?date=2006%3A12%3A13%3A10%3A00%3A00Brilliant post at Gold-Eagle that exposes the game for what it is:

"Yes that is what is happening to us here in the US. Druggies are ruining our way of life, our jobs, our currency and our future. What druggies you ask? One of the most destructive class of druggies are the greedy, manipulating self-interest bankers. What drugs you ask? The sad truth is it is not just one drug, but a smorgasbord of drugs each destructive and more evil than the next.

The first drug is the creation of fiat at an unchecked rate. This is the most obvious and the "gateway drug" that leads to more types and more dangerous drugs. They need to keep printing more dollars, drams, guilders, yon, yuan, rupees, rubbles, pesos, krones, franks, euros, dalasis, bolivianos, reals, lempuras, ringgits, colons, escudos, mantas, birrs, etc. But especially they need to keep printing more and more US $s. The $ is the opiate of the bankers. It blinds them to truth, to honesty, to integrity, to humanity. It keeps them stupid, unbalanced, and hooked.

An enabling drug is manipulation of honest money and things of value that may compete with the ability to have the money they need to create accepted. Otherwise it would lose its potency and the druggies would go through withdrawl. Thus it becomes an dependency, an addiction to keep manipulating things like gold, silver, copper, even their own currency. Of course the manipulation is to increase the desire for money and decrease the desire for things of intrinsic value. This manipulation is a drug that would never have become an addiction if it weren't for the primary addiction of the bankers.

Another drug is bought and paid for politicians. Oh, this isn't always the cash under the table kind of payment, but it includes a number of other legal and not so legal methods. Campaign contributions are the obvious and most ubiquitous, though by no means the only method. A s an illustration take a fictitious major banking drug house, call them goldscum, Goldscum contributes for example, to both senatorial candidates in a given race (congressional, presidential candidates etc are all included). It doesn�t mater if it is democrap or repulsican, which ever wins is indebted to the contributor, especially if they want to be elected again next cycle. You see the incidious feature of this drug is the creation of the next class of druggies, the bought off politicians themselves. They are hooked on the contributions and other forms of "pay off". There becomes an unholy synergism betwen the two classes of adicts.

Regulatory agencies. Ah, this is a "derivative" drug that happens to come to the addicts free as a by product of the bought off politicians. You see the politicians are also druggies who need money (drug #1) to gain power which is the opiate of politicians.

The next drug is secrecy and distributed ignorance. They obtain this drug by trading propaganda, obfuscation, and institutional infestation. Universities are controlled through the feeding them the product of their first drug; fiat currencies. In the US dollars are fed to the universities via endowments that need to grow to feed more dollars to the new druggies so that they can graduate and become the next generation of druggies. There are also grants from the third drug. News media is controlled most easily either through direct purchase and therefore control, or via large advertising accounts which provide the gateway drug (money) to the media to keep them hooked and dependent. The creation of financial derivatives is a rather sophisticated and deceiving form of distributed ignorance. Derivatives are not possible with our propaganda, and the next drug, bought off politicians. Derivatives have no intrinsic value. Like fiat, they are created out of thin air and are just valuable because of the integrity of the shared ignorance and mutual trust. Of course certain types of derivative are benign and even beneficial. For example a futures contract between a producer and a consumer of a given commodity, where the producer actually has or is in the business of producing the commodity, and the consumer has the ability to pay for the commodity is an example of a non abused drug. A derivative contract between two gamblers that is so obscure and so complicated that its "market value" cannot be reliably determined is an example of destructive abuse of the drug. This drug needs to be covered in a veil of obfuscation and must re3main protected by bought off politicians to keep the regulatory agencies from interfering with the pushers.


Like all addicts, it takes only one thing to keep them going; MORE drugs! The bankers need more money, the politicians need more money to get more power to get more money etc etc etc. The bankers need to keep buying and controlling politicians. They all need to keep spewing propaganda and suppress any truth that is inconvenient or that might expose their habits. But the need to defeat the truth leads to the manipulation of things of value; gold and silver primarily.

If it ever got out that fiat created by druggies was not as good as gold, it would spell the end of an entire generation of druggies!!

A recent example of propaganda was the effectively distributed notion that once the political elections were over the druggies would quit their manipulation of things of value. If you fell for this one, you do not understand the addict. There is always a next reason for the manipulation. Options expiry, FOMC meeting, visiting dignitaries, elections, war, end of war, good news, bad news, ground hog saw his shadow. The point is that the druggie needs excuses when is habit becomes public. He needs to keep his vile habit from being seen for what it is.

Rest assured, all of the habits will continue until the druggies are locked away in a rehab center or jail."
mikal
Selling U.S.A.(and the world) by the pound
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9E0687BC%2D0A5F%2D4EE9%2DA67E%2DCDA5C4B83DB2%7D&dist=rss&siteid=mktwdist%3Drss&siteid=mktw10-year Treasury auction attracts tepid demand
By Leslie Wines
Last Update: 1:12 PM ET Dec 13, 2006
NEW YORK (MarketWatch) - Excerpt: "A Treasury Department auction of reopened 10-year benchmark notes Wednesday afternoon attracted tepid demand, including a low 12.6% indirect bid, the carefully watched category that includes foreign central banks. The bid-to-cover - or bids rendered to bids accepted - ratio also was below average for a 10-year note sale, coming in at 2.48. The median yield was 4.566% and the high yield was 4.580%. After the auction news, Treasury prices extended their daily losses."

Mikal-- Well you can't have your cake and eat it too, or your coke. What goes around comes around, and that's making yields higher though not doing much for the inverted yield curve.
Speaking of trends, would you think these bonds would come in higher after the "decider" unveils the new game in January? I think any fresh approach to Iraq would impact the markets only as long as it's distracted by spin- less than a day. Which is why there is a PPT and affiliated gov't subsidiaries and banking "innovators" to fulfill hourly, daily and long-term objectives. They know you use these opportunities to get positioned for the inevitable, even when there's slight adjustments to the gameplan.
Minero
@ contrarian, G-lox, and other frustrated Knights
I see a lot of frustration being demonstrated of late. Many of us with the ability to see and reason are feeling the same pain. The sad part is that other than owning a bit of MP, and possibly doing a little home preparation, food storage, a couple of firearms, etc., there isn't much that we can do about anything. My brother says "Sit back and watch the Greatest Show on Earth".
It really makes me grin when I hear the financial advisors talk about your portfolio. The ultra conservative guys recommend holding 5% or 10% in PM in a safe-deposit box(where it can easily be located). I took their advice and bought some Kugarands.
After seeing how easy it was to deal with our host, I decided that 80%, was a better number. I then decided that a hole in the ground would also be a better choice. I now sleep reasonably well.
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tejbear
Flatliner # 150160
Flatliner,

I will concede your second point also, that is that the central banks prefer gold and have little respect for silver. But then one has to question why the central banks prefer gold, over silver. Four or five months ago, I watched the video called Money Masters. I hope you also watched this video. One of the points in the video was the deliberate undermining of silver as a precious metal by the central bankers.

The reasoning given was that central bankers wanted tight control over money. This was difficult to do with silver. One hundred years ago, silver could be mined, coined, and circulated, without the manipulations and control of the central bankers. As long as the silver content in the coin was correct, it was money and is still defined as money in the constitution. But this ability to produce silver coins by "regular folk" undermined the absolute control of the currency by the central bankers.

Let us not forget that the Federal Reserve, like most central banks, is a for profit, PRIVATELY OWNED bank, and the men controlling the Federal Reserve are not satisfied with merely controlling the US currency, they want to complete control of all of the world's currencies. And correct me if I am wrong, but there are very few central banks actually controlled by their local government.

So Flatliner, it seems to me you have bought into the "central bankers" spin. I suggest you take a look at silver in much longer, historical view as silver has always been the poor man's gold. The lower class guy was paid in silver and bought & sold just about everything in silver, not gold. Even Judas sold out Jesus for 30 pieces of silver.

As such, I still believe that when the collapse hits, (in what, 2 to 3 years?), silver will generate a much higher return than gold. On the other hand, if you want to carry $10,000 in your pocket, gold is much easier than silver. But then, platinum is even easier to carry than gold�

The Bear
USAGOLD Daily Market Report
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

WEDNESDAY Market Excerpts

December 13 (from MarketWatch) -- Gold futures gained Wednesday, finishing above $630 an ounce, as strength in the U.S. dollar following upbeat retail-sales data was offset by higher prices for crude oil, which raised concerns over higher energy prices and fueled some investment demand for gold.

Cuts in oil production that may materialize from Wednesday's meeting of the Organization of the Petroleum Exporting Countries would be "gold-positive," said Julian Phillips, an analyst at GoldForecaster.com. Members of the oil cartel are preparing to meet in Nigeria.

Crude futures climbed, with the January contract price last up 43 cents at $61.45 a barrel after the Energy Department reported that U.S. crude supplies dropped for the third week in a row.

Strength in oil prices tends to raise worries about the economic impact of high energy prices, which in turn renews gold's attraction as a safe-haven investment.

The February gold contract closed up 70 cents at $632.40 on the New York Mercantile Exchange, recovering from a low of $627.50.

Early Wednesday, the Commerce Department said seasonally adjusted U.S. retail sales increased by 1% in November, the largest gain since July. Excluding a 0.9% gain in motor vehicle sales, retail sales rose 1.1%, the largest gain since January. The dollar rallied on the report.

There are "two camps of investors," said Ned Schmidt, editor of the Value View Gold Report. One large camp outside the U.S. is bearish on the dollar, while a small camp in New York is bullish on the dollar and "buys [Federal Reserve Chief Ben] Bernanke's blarney," he said.

Small selloffs similar to the one seen earlier Wednesday should be used to buy gold, he said. "Gold should be bought at today's prices" because it's "oversold," he said.

Overall, "thin market conditions are aggravating moves both on the up and downside and can even increase in the last two weeks of the year," said Peter Grandich, editor of the Grandich Letter. "Gold's fundamentals remain strongly bullish," he said, forecasting that "a run to $700 appears in the cards for early 2007."

---(see url for full news, 24-hr newswire)---
TownCrier
tejbear, on 'control' of banking/currencies...
You made the remark, "...there are very few central banks actually controlled by their local government," within a context that implies this is a very bad thing.

In the interest of a balanced assessment, however, we must bear in mind that our world's rich history of hyperinflationary experiences have greatly gone hand in hand with those very situations in which the government exercised a wide latitude of control over the central bank and the issuance of money.

When left in their own hands, governments have repeatedly shown that they can quickly become fiscally irresponsible and then are equally imprudent in the monetization of their own debt.

Cutting very very crudely here, government control generally stands for SOCIALISM, whereas private control is generally the hallmark of market capitalism.

Are you desiring that our banking/financial/monetary system be even MORE socialistic than it already is?

R.
mikal
@tejbear
Re: "But this ability to produce silver coins by "regular folk" undermined the absolute control of the currency by the central bankers."

Gold coins, ingots and base metal tokens were also produced, in all manner of sizes and circulated widely in restricted areas, states or territories especially in the south and west.
Called private, state and territorial gold, these (and the tokens) are highly collectable and listed in many of the popular numismatic guidebooks.
mikal
Another bank blows hard
http://www.thehimalayantimes.com/fullstory.asp?filename=aBXaza0sgqzpa4a6Va9ta.axamal&folder=aBDasaian729&Name=Business&sImageFileName=&dtSiteDate=20061214Global Economy Facing �Turning Point�: WB
Agence France Presse
Washington, December 13, 2006 | Excerpts:
"The global economy has reached a potentially dangerous "turning point" with the United States at risk of recession if the housing market crashes, the World Bank warned Wednesday."
The World Bank report summarized here gives little new to ponder, except the stance of the WB itself, rosy forecasts juxtaposed with dire warnings.
Further along in the report it's policy prescriptions
for the "global economy" are more self-sure and arrogant, if such a thing were possible. As if to say "The WB will NOT be marginalized!"
"After its latest policy meeting Tuesday, the Federal Reserve cautioned that the US housing downturn has now become "substantial." Among other major risks identified for the global economy, the World Bank report said an economic "overheating" could provoke a sharper slowdown, while "further inflationary pressure may yet emerge." A supply shock in oil markets could also disrupt world growth, while a "disorderly unwinding" of global imbalances remains possible. In the medium term, the risk remains that investors could "rapidly lose confidence in the dollar" as the US economy slows and its current account deficit mounts.
Government data showed the US trade deficit fell to a 14-month low of 58.9 billion dollars in October, thanks to a retreat by oil prices from summer highs.
But the trade gap with China surged to a new high of 24.4 billion dollars, underlining a political controversy as Treasury Secretary Henry Paulson and other top US officials headed to Beijing for economic talks this week.
The World Bank and International Monetary Fund have repeatedly warned that the global economy is dangerously out of kilter as China runs up mammoth surpluses and the United States devours imported goods.
Such stresses have sparked disquiet, in US and elsewhere, about the impact of globalisation. The World Bank report devoted its largest section to how to best manage the integration of the international economy."
MK
The latest USAGOLD NewsGroup is in your e-mail box
http://www.usagold.com/amk/newsgroup-form.htmlHow much gold is required in a bond only portfolio to immunize it against serious inflation?

How much gold would be required in a portfolio of 60% stocks and 40% bonds to immunize it against serious inflation?

And what is the real inflation rate anyway?

Also, who said:

"There's information in gold prices as there is in other commodity prices, but clearly, a factor in the gold price has got to be global geopolitical uncertainty and the view of some investors that, given what's going on in the world today, that gold is a safe haven investment.''

We think you will be surprised. Another latent gold bug in an important economic policy position?? Time will tell.

_________

Find out by receiving the latest USAGOLD NewsGroup linked above. It's absolutely free, completely pro-gold ownership, and it neatly bundles the news you can use as a gold owner.

One of our most satisfying successes this past year has been the USAGOLD NewsGroup. In fact, we are very surprised at the large number of participants this service has attracted from around the world.

We invite you to join our newsgroup by going to the registration page above.
mikal
Germany, G8, and bankers and hedge funds
http://www.signonsandiego.com/news/business/20061213-1044-internationalfinance.htmlIncoming G8 Head Germany Wants Economic Powers to Look Into Hedge Funds By Jeannine Aversa | ASSOCIATED PRESS
10:44 a.m. December 13, 2006
WASHINGTON � Excerpts: "Germany wants major economic powers to explore ways to make it easier for investors and others to obtain information about hedge funds, whose rapid growth has brought worries that they could pose a risk to the worldwide financial system. Germany takes over the presidency of the group of highly industrialized countries next year and examining the hedge fund matter is among its priorities, Thomas Mirow, Germany's deputy finance minister, told reporters Wednesday.
Hedge funds � high-risk, largely unregulated and secretive investment pools � have traditionally been the investment domain of the wealthy but have become popular with small investors in recent years. Debate about their benefits and their risks has increased along with their fast growth.
Mirow said that while hedge funds do make "positive contributions," there is concern about the "potential for systemic risk.""
Mikal-- It's not often you get to see an AP writer call hedge funds "high-risk" and quote someone else saying they're a "systemic risk" all in the same article!
And there's that phrase "the wealthy" again.

"In the United States, hedge funds now number more than 9,000 with assets estimated to exceed $1 trillion.
Federal Reserve Chairman Ben Bernanke has made a case for close monitoring of hedge funds but has shied away from advocating that they be directly and more heavily regulated like banks.
The issue of hedge funds and the opacity of their operations is considered so critical that it was the focus of a meeting Tuesday of a special presidential advisory group and has been "on the front burner" at the group's last few meetings, Securities and Exchange Commission Chairman Christopher Cox said. The group includes Cox, Fed chief Bernanke and Treasury Secretary Henry Paulson.
Under its presidency, Germany hopes to bring the group of major industrial powers "back to its roots," meaning concentrating on economic matters and financial issues, Mirow said."
Mikal-- Another international effort. No locals can be trusted to do the self-regulating or money/fiancial management jobs anymore. At least, not alone.

"The Group of Seven economic powers are Germany, the United States, Japan, France, Britain, Italy and Canada. The Group of Eight economic power includes those countries plus Russia.
Other matters Germany wants those countries to examine include looking at how fiscal policy � such as tax changes � can be used to promote energy efficiency and combat climate change; developing strategies for countries to deal with challenges raised by aging populations; advancing good financial governance in Africa; promoting bond market development in emerging markets; and moving ahead on reforming the International Monetary Fund.
During his Washington visit, Mirow scheduled meetings with officials from the Federal Reserve and the Treasury Department as well as the chiefs of the IMF and the World Bank."
Mikal-- World Bank, IMF and G8 are complimentary organizations of the new world order within the umbrella
of the BIS, the UN etc.
When the IMF prepares a special report such as below, it does so carefully in the wake of the G8 meeting,
where it's fate depends on "moving ahead on reforming the International Monetary Fund". I sleep soundly knowing
gold in my hands is not the same as our markets in
centralized dominion.
mikal
Gold and inflation
http://www.canada.com/nationalpost/financialpost/story.html?id=2f254b6d-c441-48ad-b283-8de41c0a4251Gold's Rise Points to Inflation - Jonathan Chevreau
Financial Post | December 13, 2006
Chris Powell
Jeffrey Saut on our unnatural markets and the mysterious buyers from Mars
http://www.gata.org/node/4606Someone at the top of the financial
establishment writes once again
acknowledges the ever-more-blatant
signs of market manipulation.
otish mountain
Another economist who does not believe the govenment inflation figures
Chris Powell
Secrecy of central bank gold lending condemned in new study
http://www.blanchardonline.com/pdfs/Gold_Market_Lending.pdf9:37p ET Wednesday, December 13, 2006

Dear Friend of GATA and Gold:

Lending of gold by central banks depresses the price and the only possible reasons for the secrecy around it are manipulation of the gold market and the enrichment, through inside information, of the financial houses to which central banks lend their gold, a study by New Orleans coin and bullion dealer Blanchard & Co. has found.

The study, written by Blanchard's vice president and director of economic research, Neal R. Ryan, published today, calls on the International Monetary Fund to require central banks to make complete and frequent disclosure of their gold lending and thereby equalize information in the gold market.

In its own studies this year, the IMF already had acknowledged the inadequacy of central bank gold accounting, and Ryan says he has forwarded his study's recommendations to the IMF and has been told he will receive a response soon.

Among the Blanchard study's findings:

-- No accurate statistics about loaned central bank gold are published by individual countries or the IMF. Instead gold loans are estimated by outside sources and these estimates vary.

-- Gold loaned into the market can significantly affect the price.

-- Central banks actively manage their gold loans even as they deprive the market of information about them.

-- Bullion banks, the borrowers of central bank gold, have a huge advantage over the investing public in the gold market, inside information acquired in their dealings with the central banks.

-- The IMF could start a transparent gold market by requiring accounting changes for central bank gold.

"Why," the Blanchard study asks, "aren't gold loans made public? Good question. There is no reason (save the argument made by some that central banks are using gold loans to manipulate the gold price) Blanchard's research has been able to unearth that explains why gold lending information is not made public, except for the unconscionable advantage it gives to bullion banks."

"For the market to be transparent for all, central bank loaned gold levels need to be reported to ALL market participants on a quarterly if not monthly basis. Loan
information is AVAILABLE to be published; it is simply not REQUIRED to be published. The IMF has the ability to make this requirement and change the gold market for the better for all participants.

"Blanchard and Co. believes that this simple change to our market will allow all market participants to begin to realize not only greater gains in their gold investments but the ability to make smarter decisions on when and how to invest. Gold has made incredible gains in the past few years in a market that is still not completely transparent. This change has the ability to increase those gains immeasurably. ...

"Level the playing field for all market participants, bring an end to proprietary information within the market for an exclusive few, and allow the bullion market to function in a fair and equitable manner, ridding itself of conspiracy theories that diminish its relevance and stability. By ending opaque transactions and accounting procedures, the gold market then becomes accessible to all participants and ends the 'clubhouse' attitude that governs the London [Bullion Market] Exchange.

"The gold market has made great advances in the past few years not only in terms of price increases but also in the availability of gold to purchase for all market participants and the transparency of information. It is time to continue those advances and make the last few steps to having a truly open and free marketplace."

The Blanchard study reports that the World Gold Council, which claims to be the representative of gold producers and investors, has no position on whether central bank gold loan data should be published. As for the two major gold market analysis firms, Gold Fields Mineral Services and Virtual Metals, the study says the former declined to express an opinion and the latter failed to respond to Blanchard's inquiries.

As wonderful and scholarly as the Blanchard study is and as much as it seems to have engaged the IMF, GATA and gold's other partisans may not be able to keep from laughing at any suggestion that central banks would ever cooperate in bringing transparency to the gold market and that any gold lending data made public by central banks would be truthful.

For having come to intervene in the currency, bond, precious metals, commodity, and even equity markets on an hourly basis, governments today would sooner publish the plans for the construction of nuclear weapons than disclose the actual disposition of their gold reserves. As much as it SHOULD be done, transparency for gold loans probably could NOT be done without risking the unraveling all the other surreptitious market manipulations by the central banks.

And the World Gold Council, GFMS, and Virtual Metals are some advocates for the gold industry, eh? Once again they have nothing to say about the biggest issues in their business. It took GATA and now Blanchard to raise and press the gold lending and transparency issues. Gold's official "advocates" are actually just stooges for the central banks, in business precisely to try to ensure that nothing serious is ever done on gold's behalf.

But there's no harm in pressing the gold lending and transparency issues with official agencies and news organizations, only good. Indeed, this is crucial. There is always the chance, however remote, that the IMF will try to come clean and drag the central banks along with it. After all, there are growing indications that the rest of the world is tiring of working and producing real goods for the sake of the parasitism of the United States, achieved through the rigging of the currency, bond, and metals markets to support the U.S. dollar. And if the IMF and central banks don't come clean, the world still will have been shown that there really are no financial markets anymore, just manipulations by governments. Eventually such markets will lose their participants and investors will go elsewhere.

So thanks to Blanchard and Neal Ryan for the heroic work of their report, "Gold Market Lending," which can be found in PDF format at Blanchard's Internet site here:

http://www.blanchardonline.com/pdfs/Gold_Market_Lending.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Flaccus
Blanchard
Perenially late to the dinner table, but, hey, at least they show up with a big smile on their face. Weren't the rest of us at this point almost ten years ago? Oh, well, keep pushing, Blanchard. One of these days you'll catch up.
tejbear
TownCrier #: 150172

I want the government to be more socialistic than it already is? With 50% of the US money being spent by government or complying with government regulations, trust me, I am nothing, if not against big, intrusive, expensive government. No doubt the government Jack Boot Squad is reviewing this email and this forum. That is what they do.

In my view, government, by definition, is evil. On the other hand, if you don't have the local police patrolling the streets, things can get quickly out of hand. There is a balance there somewhere. My focus has been on the currency, and the declining value of dollars. Up until the central bankers malevolently took control of the US currency, silver and gold coins, as defined by in the constitution, work reasonably well. That is, no hyperinflation or hyper-deflation.

You are well aware of the eroding foundation of the dollar, and with the forth-coming baby boomer retirement on slough, and the woefully unfunded liabilities of the US preclude any course but debasement of the dollar. How far will it drop: some experts see the dollar index dropping to 50, others, like the Mogambo Guru, expect the dollar to become worthless. Your guess is as good as mine, but a drop in value IS coming.

Now if you see this "event horizon" rapidly approaching, where do you, as an individual, do you put your savings for the safest and possibly the best profits? Yes, profits. Every crash has a profit opportunity for those who are prepared.

My "discussion" with Flatliner was pointedly at the difference in potential profit opportunities between gold and silver. By my simple math, it appears that a "worn" $20 gold coin, like an ounce of gold, with little numismatic value, is reasonably priced near its 1900 purchasing power, which is $666 in today's 97% devalued dollars. On the other hand, silver appears undervalued by ~60%, as it should be closer to $33 per ounce. Both metals will skyrocket when the collapse begins in earnest, but because of the purchasing power disparity, it appears to me that silver will out perform gold. This does not include an assessment of the impact of silver's declining inventories or industrial uses.

But of course, there can't really be an apple to apples analysis between the two metals, as gold has many advantages over silver. Like carrying $10,000 worth of gold in your pocket. Even if silver were to basically triple in value, you still couldn't carry $10,000 inconspicuously in your front pocket. Since gold is much smaller, it is easier to hide, or stored in a safety deposit box at the bank. Use several banks, and you have stored a lot on dollars. But then you have to trust the banks�

Basically, with gold, it is much easier to carry a lot of "money" on your person. Also, as Flatliner pointed out, central bankers prefer gold� My view of central bankers: I adhere to the Mogambo Guru's distaste for these worthless scumbags.

Silver isn't money? Judas sold out Jesus Christ for 30 pieces of silver, not gold. Silver has ALWAYS been money. If you want to believe the central banker's spin, that is your problem. But I believe that both metals are precious and ARE MONEY. Although it sounds like I am pushing silver, I am not getting rid my gold� (You never know when you need to carry a lot of $$ in one pocket.)

But I would also suggest that it is prudent, and will probably be very profitable to have some silver stored in your lair, with your gold.

The Bear
Chris Powell
Flaccus, you're too tough on Blanchard
GATA got to the gold price suppression
issue earlier than most and, I hope,
has made more of it than most, but if
people who didn't get to the issue first
are going to be disqualified from
contributing, we'll never get anywhere.
Blanchard got to it after GATA did and
others will get to it after Blanchard
did.

And Blanchard has made some HUGE
contributions, mainly through its
lawsuit against Barrick and MorganChase.
Blanchard's lawsuit build on GATA's and
incorporated much of GATA's work but had
what proved to be a superior legal
strategy -- the omission of government
defendants, the inclusion of which
created the jurisdictional issue on
which GATA's lawsuit failed.

Blanchard's lawsuit survived Barrick's
motion for dismissal via summary
judgment, elicited Barrick's motion to
dismiss claiming that the company was
the agent of the central banks in the
gold market -- a bold, public confession
of the gold price suppression scheme --
and forced Barrick into a settlement
that apparently codified Barrick's
pledge to stop hedging for 10 years.

As far as I can see, after GATA nobody
has done more than Blanchard to expose
and inconvenience the gold price
suppression scheme. And now we have
their report on gold lending. I think
it's a wonderful report and will have
an impact on the gold community and
maybe the market. Please read it and
see what you think before knocking
them.



Goldendome
Implications for Gold, Silver, Oil?

Saudi's are Suni's...She-ite's are Persian. U.S. soldiers sit in the middle and can't move. Should they--we will back the Suni's as Iran backs the She-ite's.

The King of Saudi Arabia
Flatliner
@tejbear
Maybe I took too strong a stance with a central bank point of view approach. I cannot predict the future, but I felt compelled to bring up something that I feel is a critical piece of information that a prudent investor should investigate.

The only thing I might want to change is to confirm that what I wrote and what I meant to write are one in the same. You mentioned that my point was "that the central banks prefer gold and have little respect for silver." I was hoping that the point would be that central banks already hold gold, thus in a loss of confidence situation they would be motivated to see this particular resource obtain a maximum value irregardless to what anything else might do.

No matter which way you look at these metals, I believe that the primary objective is to not get cleaned out as time erodes the value of dollars. Thus, to me, it would be prudent to hold as much gold as silver as one is willing to carry.
Chris Powell
No inflation? U.S. Mint would ban melting pennies, nickels
http://news.yahoo.com/s/ap/20061214/ap_on_bi_ge/mint_coinsBy Matin Crutsinger
Associated Press
Thursday, December 14, 2006

Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value -- and that has the government worried.

U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins. The rules also limit the number of coins that can be shipped out of the country.

"We are taking this action because the nation needs its coinage for commerce. We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," Mint Director Edmund Moy said in a statement.

Officials said they had received a number of inquiries from the public in recent months concerning the value of the metal in the coins and whether it was legal to melt them.

The new regulations prohibit the melting of 1-cent and 5-cent coins, with a penalty of up to five years in prison and a fine of up to $10,000 for people convicted of violating the rule.

The rules also require that shipments of the coins out of the country be for legitimate coinage and numismatic purposes and cap the size of any one shipment to $100 worth of the coins.

Because of the prevailing prices of copper, zinc, and nickel, the cost of producing pennies and nickels exceeds the face value of the coins.

A nickel is 25 percent nickel and 75 percent copper. The metal in one coin costs 6.99 cents for each 5-cent coin. When the mint's cost of producing the coins is added, the total cost for each nickel is 8.34 cents.

Modern pennies have 2.5 percent copper content with zinc making up the rest of the coin. The current copper and zinc in a penny are worth 1.12 cents. The cost of production drives the cost of each penny up to 1.73 cents.

Pennies made before 1982, which are still in circulation, would be even more lucrative to melt down because they contain 95 percent copper and only 5 percent zinc. The metal value in those coins is 2.13 cents per coin, mint officials said.

The new regulations are being published in the Federal Register and will go into effect as interim rules that will not become final until the government has a chance to consider possible modifications based on public comments.
Chris Powell
U.S. mortgage delinquency rate rises sharply
http://news.yahoo.com/s/ap/20061213/ap_on_bi_ge/late_mortgagesLate Mortgage Payments Jump in Summer

By Jeannine Aversa
Associated Press
Wednesday, December 13, 2006

Late mortgage payments shot up in the third quarter as higher interest rates squeezed budgets and made it harder for homeowners -- especially those with weaker credit records -- to keep up with their monthly obligations.

The Mortgage Bankers Association, in its quarterly snapshot of the mortgage market released Wednesday, reported that the percentage of mortgage payments that were 30 or more days past due for all loans tracked jumped to 4.67 percent in the July-to-September quarter.

That marked a sharp rise from the second quarter's delinquency rate of 4.39 percent and was the worst showing since the final quarter of last year, when delinquent payments climbed to a 2 1/2-year high in the aftermath of the devastating Gulf Coast hurricanes.

The association's survey covers 42.6 million loans.

Delinquency rates in the third quarter were considerably higher for "subprime" borrowers -- people with weaker credit records who are considered higher risks -- especially those who have adjustable-rate mortgages.

Subprime borrowers had a delinquency rate of 12.56 percent in the third quarter, the highest in more than three years. The delinquency rate for these borrowers holding adjustable-rate mortgages was even higher -- at 13.22 percent in the third quarter, also the worst reading in more than three years.

People holding adjustable-rate mortgages have seen their payments rise as the Federal Reserve ratcheted up short-term interest rates over the last two-plus years.

Experts say the this has particularly strained people who stretched financially to buy a home during the housing boom, when home prices were lofty. This year the housing market is in a deep slump. In some markets home prices have dropped; in others they haven't gone up nearly as much as they had during the go-go days.

For those financially strapped homeowners, the combination of slumping prices and rising interest rates can be painful. If the value of their homes drops, their loans could be worth more than their property. If their interest rates rise, their loans would become more expensive to pay off.

"Increases in delinquency rates were noticeably larger for subprime loans, particularly for subprime ARMs. This is not surprising given that subprime borrowers are more likely to be susceptible to the cumulative increases in rates we've experienced, and the slowing of home price appreciation that has resulted," said Doug Duncan, chief economist at the Mortgage Bankers Association. "It is important to remember that delinquency and foreclosure rates have been quite low the last two years."

The association's survey also showed that the percentage of mortgages that started the foreclosure process in the third quarter climbed to 0.46 percent. That was up from 0.43 percent in the prior quarter and was the highest in nearly two years. Foreclosure rates were the highest for subprime borrowers.
Flatliner
@Goldendome
It was very interesting seeing the strong message from the King of Saudi Arabia in the press today. It seemed that the issue of security is being questioned and alternative plans are being drawn up. It's been my feeling for some time now that the relationship between Saudi Arabia and the US has been one where they supply oil for dollars and the US supplies security in the region. If the security side of the relationship breaks down, it would make sense that there would be implications for gold, silver and oil.

This is a most troubling development. I hope everyone remembers Black Blades advice.
Topaz
Silver-v-Gold.
http://www.gold-eagle.com/editorials_03/sanders030703.htmlTrawl the net and you'll find dozens of similar opinions as that linked ...in favour of Silver.
The Ratio is currently indicating overbought Ag but it'd be a brave soul who'd pull the trigger on Ag at this juncture, the fundamentals are "so" outstanding.


Officially, Ag is to be frowned upon, but in a knock down - drag out situation, Ag will re-emerge as the exchange token du-jour.

All imo of course.
Topaz
GS Ratio, on a fly.
Matthew
Rising Metal Prices Prompt Ban on Melting and Export of Coins
http://www.nytimes.com/2006/12/14/business/14pennies.html?_r=1&adxnnl=1∨ef=slogin&ref=business&adxnnlx=1166096296-/WSm9mRykACeK9R/Qli/UA
Matthew
(No Subject)
Lackluster
Melting Pennies, Nickels
"U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins. The rules also limit the number of coins that can be shipped out of the country."


Is a "rule" the same thing as a "law"?
Clink!
Those pennies and nickels
You have to wonder why it has taken them so long to react to this situation. Anyone normal would have been sounding alarm bells long before the manufacturing costs got to be 70% greater than the supposed value. I am not aware of any other case where the currency token has not been changed long before this eventuality. Is Gresham's Law finally coming into effect ?

C!
Lackluster
pennies, nickels
They have been cheapening the tokens. At some point they won't be able to make them cheap enough, quickly enough. Maybe we are there already.
mikal
(No Subject)
mikal
Euro rates to rise more
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061214\ACQDJON200612141229DOWJONESDJONLINE000991.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.naECB Weber: Econ No Longer Needs Supportive Policy-Report
By Ulrike Dauer, Dow Jones Newswires - 12/14/06
FRANKFURT -(Dow Jones)- Snippits: "The euro-zone economy is standing on its feet and doesn't need support from monetary policy any longer, ECB governing council member Axel Weber was quoted as saying by German daily Frankfurter Allgemeine Zeitung."

[The euro rates have been too low. They'll be catching up
more in 2007. An altogether different set of circumstances encompasses U.S. rates.]

""Weber, who is also the president of the Deutsche Bundesbank, said euro-zone interest rates accommodate the euro-zone economy, despite recent rises, and " continue to be on a low level."
The ECB raised interest rates 25 basis points Dec. 7, for the sixth time since its tightening campaign began in December 2005, bringing the policy rate to 3.50%. Opinions are divided on the timing of the ECB's next move, but most economists expect the ECB to increase rates during the first half of 2007...
Weber said he "should firmly counter" recent criticism of the ECB by French politicians, who said the ECB should focus more on growth and become less autonomous. "Independent central banks and a stability oriented monetary policy are the basic framework of the currency union," Weber said. "It is absolutely unacceptable to question this framework," he said.""

[Well chosen quotes here underscore what we've been saying about rates. Many will extrapolate this further to other, far more indelible ideas.]
Flatliner
Energy ministers meeting again.
http://www.spectator.org/dsp_article.asp?art_id=10756Teaser: "Oil analysts understand that public oil inventories to some extent displace private oil inventories, so it's unclear to what extent -- if any -- total inventories are increased by public inventory build-ups. Regardless, the history of the U.S. Strategic Petroleum Reserve demonstrates that public officials are pretty poor inventory managers. They tend to buy high and sell never. What makes anyone think that politicians know better than businessmen when to buy, when to hold, and when to release?

Fully 96 percent of all proved reserves are controlled by state-owned oil companies that for the most part take their orders regarding how much to drill and how much to invest from their respective governments."

Flatliner � it's an interesting concept that businessmen in charge of private resources want to maximize their profits. Seems that those that hold gold also want to do the same thing with their resources. I wonder if there is any correlation between public oil inventories and public gold inventories? Or public copper inventories in light of the new �penny� rules. When it comes to the penny, it just makes good sense to look for change.
Goldilox
True deficit: 3.5 $Trillion
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53366snip:

A report scheduled to be released by the Treasury Department tomorrow is expected to show the true deficit in the Bush administration's 2006 federal budget to be an astounding $3.5 trillion in the red, not $248.2 billion as previously reported.
"The Bush administration is running a federal budget deficit at an unsustainable, system-dooming pace of about $3.5 trillion a year, econometrician John Williams, who publishes the website Shadow Government Statistics, told WND.

Williams' argument is fully validated in the Financial Report of the United States, a little-known report Congress has mandated that the Treasury Department publishes each year, reporting the federal budget on a GAAP accounting basis, not on a cash accrual basis. . . .

The 2006 edition of the Financial Report of the United States is due out tomorrow.

"Typically, the Treasury reports the budget deficit on current accounts basis. That's why Treasury announced recently that the 2006 federal budget deficit was going to be $248.2 billion. But it is a gimmick," Williams claimed.

"When we see the Treasury report on Friday we are probably going to find out that the real 2006 federal budget deficit is more like $3.5 trillion."

Williams predicts, however, the mainstream media won't report it.

"It's not the type of news Reuters, Bloomberg and the Wall Street Journal like to broadcast to investors and the American public," he said. "Besides, the financial press won't take the time and effort to analyze the figures and comb through the footnotes. The report is going to be released on Friday and most financial reporters aren't accountants."

Why the huge discrepancy between the two figures?

"The $248 billion federal budget deficit figure results from what basically amounts to a cash flow analysis," Williams explained. "On a cash basis, the Treasury takes all the tax revenue, including Social Security taxes, as current income. The trick is that Treasury essentially steals the money that comes in on Social Security taxes, without accounting for any offsetting Social Security liability. When you run your accounting that way, the Treasury gets to report a federal budget deficit that dramatically reduces the real figure."

What's different about the anticipated 2006 Financial Report of the United States?

"Congress a few years ago mandated that the Treasury had to report one report each year that used GAAP accounting," Williams told WND. "Then, when you figure in all liabilities including Social Security and Medicare, the real 2006 deficit is huge by comparison. What I expect to show up on Friday is a real federal budget deficit of $3.5 trillion or more, not the $248.2 billion earlier reported."

"Even worse," Williams continued, "the U.S. Government's negative net worth widened to $49.4 trillion in 2005. For the first time, total government liabilities have topped $50 trillion, and the number is continuing to grow. The United States is bankrupt, whether the Bush administration wants to admit it or not."

How serious a problem are federal deficits of this magnitude?

"A federal budget deficit in the trillions of dollars is beyond the reach of fiscal control," Williams answered. "Even if the federal government raised individual and corporate income taxes to 100 percent, simply confiscating every penny every business and person in the U.S. made, we would still have a federal deficit."

"There are lots of people who know that the federal deficit is in the trillions," Williams continued. "The problem is that few dare sound the alarm. The magnitude of the budget deficit problem is just too enormous and neither political party has the courage to address the problem."

Williams is clear about the coming danger.

"The United States is bankrupt," he insisted. "With less than one-tenth of the actual deficit being reported each year, a cumulative negative net worth exceeding $50 trillion has built up in stealth to where the total obligations of the U.S. government are now more than four times our annual gross domestic product.

"The Treasury numbers in the Financial Report of the United States are hard," Williams insisted, "and the doomsday is not far off. Still, the Treasury is going to report the numbers on a Friday and I don't expect you will hear much about it."

Williams' website issues a dire warning to WND:

"Indeed the unfolding fiscal nightmare likely will entail a U.S. hyperinflation and a resulting collapse in the value of the world's primary reserve currency, the dollar. When this starts to unravel it will unravel fast. I don't know whether it will be the dominant issue in the 2008 presidential election, but I believe it will be by 2012."
The Treasury Department confirmed to WND the 2006 Financial Report of the United States will be issued tomorrow at 11:00 a.m. Eastern time at a Treasury Department press conference. The Treasury Department declined to comment on the content of the report.

When the report is released, Treasury Secretary Henry Paulsen and Federal Reserve chairman Ben Bernanke will still be in China. Just before Thanksgiving, China started a dollar sell-off by suggesting Beijing wanted to hold less than the current 70 percent of its $1 trillion in foreign exchange reserves in U.S. dollars. Paulsen and Bernanke plan to explore with China ways the U.S. can reduce the large and growing U.S. trade deficit.

-Goldilox

Like, WOW!
Federal_Reserves
The US Mint
is putting in place rules that prohibit the melting down of 1 and 5 cent coins. The rules also limit the amount of these coins that can be shipped out of the country.
The metal in these coins is worth more than the face value. A penny is worth 1.73 cents and a nickel 8.34 cents.
If new rules come with penalty of 5 years in prison and fine of $10,000. You can still hoard them however in your piggy bank.
Moegold
Nickels & pennies
Anyone care to venture a guess of the date a current nickel will have the same value of one paper dollar? I think, unfortunitely, it may happen soon than many think. What will gold be worth then! Probaby priceless in dollar terms.
Thoreauly
"Can the Second Coming of Paul Volker Save the Dolla?"
http://www.financialsense.com/editorials/fekete/2006/1214.html
While I agree that the answer to the question is a resounding no, I disagree that "History is not made by men, tall or short; rather, events are the product of cycles, in particular, Kondratieff's long-wave cycle (K-cycle)."

Beyond that, I'm not sure what to make of Fekete's piece, as he says on the one hand that an economy that is "on a life-supporting system" with "China's hand...on the switch," while on the other hand he says that the powers that be will nonetheless use "clandestine official intervention... to limit the rise in the gold price."

Is he saying that as long as China doesn't flip the switch, gold price suppression will prevail? If so, then what about Bernanke lowering interest rates to forestall the housing collapse, thus further devaluing the dollar? How long can China (or any other central bank) stand by and watch its dollar holdings go down the tube? True, they all want to keep the charade going as long as they can, but neither does any of them want to be the last on out the door.

In other words, they ALL have their hands on the switch, and the sweatier their palms get . . .
Federal_Reserves
US Bankruptcy
http://research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdfThe Federal Reserve bank of St Louis has concluded the US is bankrupt.
Lackluster
coinflation.com
http://www.coinflation.com/turn_off_the_smelters.htmlInterestingly, coinflation.com, a website that tracks the melt value of current coins, is reporting increased visits from the US Gov.
Druid
(No Subject)
Thoreauly
Sol Palha on the "Gold Outlook"
http://www.safehaven.com/article-6498.htm
Is it true that "Gold did not react strongly to the massive pull back in the dollar" because "initially it is going to trade in the same direction as the Dollar and/or it has one more corrective wave to undergo"?

Or is Fekete (and GATA) right about government gold price suppression?

And does it really matter, given my post below and the increasingly sweaty hands that are on the switch?
Ag-geek
Deception!
http://www.federalreserve.gov/kids/Wow, talk about starting 'em when their young! Looks like the Fed wants to baffle our kids with BS too!

Too much. All I can say is WOW!
Goldilox
Mint Rules
I think it's pretty interesting that the Mint can initiate "rules" that include fines and incarceration without legislation to back it up, but I'm sure some enterprising "representative" will sponsor a near-invisible rider to some appropriations bill to gain browny points from his massas!
Goldilox
FED for Kids
@ Ag-geek,

No mention of the FED Open Mouth Commitee in the FOMC description?

No mention of Heckle and Jekyll Island either!

I bet some enterprising bureaucrat got a great big attaboy for this wonderful example of fluff!
ge
Thoreauly - my interpretation of Fekete
"to limit the rise in the gold price" ==> gold will not be revalued to $10,000 instantly in one night, but an attempt shall be made to maintain an outward appearance of an orderly advance.

"Gyrations of gold will assume galactic dimensions"==> as the interventions lighten up gold would explode to the upside, then, as the intervention strengthens sharp corrections will be observed. Expect $50, $100, $300 etc daily swings as the market advances.

The market failure predicted by Another/FOA could come at the tail end, just after everyone becomes convinced that this market would not fail; thus harming the greatest number of investors....my 2 cents on this subject...
Federal_Reserves
Penny Pinching
There's about 150billion pennies in circulation about $15/bucks per person. Got yours? I heard of one person who collected about 1 million of them. I remember the days when a post card cost 1 penny to mail. I think very soon they'll pass a law and eliminate pennies, you will have to round up/down to the nearest 5 or 0. .(.00, .05, .10, .15)......This could lead to a penny panic where everbody holding pennies takes a loss, or maybe the governmint will sponsor a smelter for everyone to turn in their pennies..



Matthew
Melting Coins
http://www.nytimes.com/2006/12/14/business/14pennies.html?_r=2&adxnnl=1∨ef=slogin&ref=business&adxnnlx=1166135308-GiRsZJhBp5N//2Gc7Qua0gTo go back to this article, I feel the important message is the US government is banning the EXPORT of these coins....
"the United States Mint, concerned that rising metal prices could lead to widespread recycling of pennies and nickels, has banned melting or EXPORTING them."
"The new ban also forbids EXPORTING pennies or nickels in any significant quantities".
(my emphasis)
Maybe the first sign of currency collapse is currency control... physical control?
Think online gambling - easy way to get money out - so ban it.
Chip dollar bills in for change - one dollar equals $1.40 in scrap, and this will get worse. Better ban it now before the herd catches on.
Methinks desperation.
Tate
bans and lies
U.S. Mint bans melting pennies, nickels�..
What an interesting times we live on. Laws of nature are invalidated. Wall street Alchemists busy printing paper gold. Mercenaries attack independent countries and declare Freedom fighters to be terrorists.
Can U.S. Mint ban Dow Jones from going down?
Sorry this is done by PPT � working group.
How about falsifying economic statistics?
Is US deficit 200 billion or 3 trillion ?
Astounding $3.5 trillion in the red, not $248.2 billion. Uuuups.
tejbear
Flatliner #: 150185

I agree with your last message. My rebuttal was that I don't trust the central bankers because these are the same guys who deliberately undermined the value of silver in order to enhance their control over currencies. That is, their actions are for their own profit and power, not for the common good our country obtained with a stable value in the currency.

But the worst-case scenario, these same central banks will be sidelined as there will be a stampede by the masses to get "whatever they can grab". This is when silver could rocket. But the masses will be too late as I am inclined to think that the people who have safely stored gold and silver will sit on the sidelines waiting for things to stabilize, then they will sell. So like in Argentina a few years ago, the masses will just have to sit on the sidelines and watch as their life savings become worthless.

The unanswerable question is will the central banks completely lose control, or will they be able to continue to orchestrate a "controlled" reduction in value of the dollar.

So far, the central bankers are doing OK. But the markets are approaching 1/2 quadrillion dollars in derivatives. But there are just too many things getting to out of balance. The world is way past due for a correction. When this dam breaks, things will get real ugly around the world, real fast. (This will be a good time for one or two guns at home, and the willingness to use them.)

The Bear
Matthew
How about CGT?
In the UK, gold sovereigns are 'coin of the realm', that is they are seen as money, whatever the intrinsic value of the gold. As such, they are exempt from capital gains tax.
No tax on holding gold as sovereigns is a no brainer.
How about the US & other countries?
If gold is due to go through the roof, maybe we should be looking at the tax implications now?
Flatliner
Archeologist discovers first reference?
Digging around, I came across words from Aristotle (http://www.usagold.com/goldenchalkboard/gc_ariCOMEX.html) msg#: 77570, where he says:

"I believe that it was at this same time, in his first response to my series of posts, that FOA first introduced his term of "Free Gold" (and variant "Free Gold Market") to me and the rest of us here.

These posts touched of a whirlwind of discussions on all sides of the matter, much of which was kindly captured for posterity at some pages that have been indexed in the Hall of Fame. (I've just checked, and yes, it's still there. The link above will take you directly to the start of it all.) Lots of reading!!! Or scrolling???? Ha ha!! Skip my tireless blather if you will, but be sure to give attention to FOA's input. Let's see... you'll need to scroll halfway down the page to find it. Oooops, wait-a-minute, he was posting at the forum as Trail Guide then. (I forgot that the moniker FOA became reserved for his Gold Trail posts.)"

Following the link referenced with his words (http://www.usagold.com/halldiscussion.html) we find Msg ID:24996:

"�seek to understand it's meaning. Once fully understood, I think most would then agree with it's inevitable outcome. Indeed, a "free gold market", based only on physical holdings would impact the world economic system unlike anything seen before it. And Yes, it's impact on the relative value of gold will make that metal the monetary wealth investment for the next thousand years!"


It's funny how things work out. It was not long ago that I enquired about the source of the term "Free Gold." To the authors here, the concept directly related to gold trading in a physical only market free of the derivative overhang.

That's simple enough.

Thus, that complicated "concept of Freegold" that I was looking for really shouldn't be tagged with the Freegold term. What I see has more to do with key resources being leveraged to support local currencies much like oil has supported the dollar. To someone that understands the "Strong Dollar Policy", it might be likened to a "Strong Currency Policy."

After digging around with Google to see if "Strong Currency Policy" is already well known, I find that the only place where it's referenced is in relations to the "Strong Dollar Policy." It's funny how some concepts never find a definition. Thus, I will attempt here, a "Strong Currency Policy" is a political situation where a key commodity is used as a tool to give function to a local currency by requiring those who want access to the commodity to first acquire the currency. Yep, I think that is what I was looking for.

Hum, now I think I'll look at local currencies for a while and see how they will find strength in the years ahead. Maybe there is an investment opportunity here that can be capitalized on.
Thoreauly
Freegold
http://www.cipe.org/publications/ert/e32/e32_2.pdf
Though it is "based only on physical holdings," "trade will be executed by instantaneous and simultaneous debiting and crediting to and from liquid wealth accounts" (see link) as the privatization of commodity money supercedes government fiat currencies.

How soon?

Back to the central bankers sweaty palms.
Flatliner
@tejbear
I believe that we are in agreement with regards to �trust� and central bankers. To me, it's not simply because of your claim with silver, but because, if someone looks hard enough, they may find the same evidence regarding all openly traded commodities denominated in dollars. At least, it's kind of looking that way to me (see previous posting).

When it comes to the conversion to resources stampede, I'm starting to lean towards a situation where those who have resources will only trade them for local currencies (not US dollars) and those that hold dollars will convert as fast as possible into their local currency. I'm not sure the repercussions of this conversion, but I'm sure that I'll think about it for a while.
USAGOLD / Centennial Precious Metals, Inc.
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Clink!
Who'da thunk it ?
There was an interesting reflection sent in by a reader included at the end of today's Midas. The market capitalization of the two largest US gold miners, Newmont and Goldcorp, is $20B and $12.2B respectively, while for GM and Ford it is 16.9B and $13.4B.
C!
Boilermaker
Ben & Hank Getting Stuffed in Beijing
http://www.nytimes.com/2006/12/14/world/asia/15chinacnd.html?ref=worldsnip
"In marathon meetings at the Great Hall of the People, Treasury Secretary Henry Paulson led a team that included six cabinet colleagues and Ben Bernanke, the Federal Reserve chairman, in the most elaborate effort made by an American government to persuade China to reform its policies.

American officials argued that a faster pace of reform is in China's interest. Chinese officials countered firmly that their country must proceed at its own pace, given its history of poverty, colonial subjugation and civil wars, and that American officials must try harder to understand China's achievements and constraints.

The divergent perspectives were recounted during and after the day-long session by American officials briefing reporters, but they were also reflected in the formal statements made by Mr. Paulson and his counterpart, Wu Yi, a vice premier, who gave a lengthy talk that was both defensive and defiant about Chinese policies.

"We have had the genuine feeling that some American friends are not only having limited knowledge of, but harboring much misunderstanding about, the reality in China," Ms. Wu said in her presentation, according to a text released by her government.

"Our particular hope," she added, "is to let people in the world know that China's development is an opportunity, instead of a threat to the world � that it is a propelling force behind the growth of the world economy."

comment;
China's not buying what Ben & Hank are selling.
USAGOLD Daily Market Report
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

THURSDAY Market Excerpts

December 14 (from Reuters) -- U.S. gold futures finished slightly lower in thin range-bound trading on Thursday, as a rising dollar and the bullish stock market prompted investors to lock in profits and ignore firmer oil prices.

Oil rose nearly $1 to above $62 a barrel after OPEC decided to cut its output by 2 percent starting in February. OPEC's action came a day after a U.S. government report showed the country's crude oil stockpile fell sharply last week, much more than analyst expectations.

Benchmark February gold at the COMEX division of the New York Mercantile Exchange settled down $1.50 at $630.90, trading a narrow four-dollar range between $629.20 and $634.00.

Stephen Platt, analyst at Archer Financial, said that the gold market has been consolidating into a very tight range while it was searching for a more definite direction. "The stock market was certainly bringing some light profit taking in given its strength today, in terms of competing assets," Platt said.

U.S. stocks climbed in midafternoon, boosted by stellar earnings from a range of companies. The Dow Jones industrial average hit a record high and the broad-based Standard & Poor's 500 Index also touched a six-year high. Platt said that the gold market overall was not doing a lot, but that was impressive given the stocks' gains and the dollar's strength.

"There does appear to be some underlying support up at these levels," because any selling in gold tended to dry up fairly quickly, said Platt.

The dollar firmed after the latest around of U.S. economic data showed resilience in the economy. The U.S. government said the number of people filing initial unemployment claims last week fell more sharply than economists had expected. That underpinned the dollar as it supported the view of a robust labor market. The greenback often moves in the opposite direction of gold, which is denominated in U.S. dollars. A stronger dollar makes gold more expensive for holders of other currencies.

---(see url for full news, 24-hr newswire)---
Boilermaker
@ Clink
Speaking of market cap, Ebay, the electronic flea market, has a market cap of $45B that exceeds the combined cap of Ford and GM which is $30B. Ebay has 12,300 employees. Ford and GM have a total of 635,000. Employees have become a terrible burden for US business.
Paper Avalanche
Big fan

Someone is a big fan of POG $625 and POS $13.75.

Any ideas from the folks smarter than me on this board (that would be everyone) as to whether this may be TPTB's Maginot Line? Is it at all possible that in the early 1980's a number of big players sold many, many gold contracts at $700, $650, $625 to restore confidence in the federal reserve note and those contracts have simply been rolled over continually for the last 25 years?

$625 feels like the launch pad for POG to me.

Take care,
PA
Clink!
@ Boilermaker
http://www.forbes.com/2006/03/29/06f2k_worlds-largest-public-companies_land.htmlIt's also instructive to look at the biggest companies such as the Forbes Top Ten. Of these, five are banks, one is an insurance company and three are oil companies. Only one makes anything, and even then a large part of GE's profits are due to its financial services.
C!
TownCrier
Paper Avalanche, construction of a launch pad seems closer to right to me
http://www.usagold.com/reference/prices/history.htmlIf you look at the historical record, 25 years ago $625 in no way stands out as a level any more or less significant that $650 or $600... it was just a level that came and went.

This time around, however, if $625 seems familiar, well... it should! We've seen an awful lot of it recurring again and again as it has served as the 'centroid' around which the last eight months of price consolidation has occurred.

Cut and paste this following url to see a snapshot of the current one-year pricegraph, and note the many inflections near the $625 mark.

http://www.usagold.com/mkpics/forum/14dec2006.gif

I don't think it is particularly $625 for any reason. It could have as easily been fluctuating upon $690 as the centroid... in which case you would now be asking "What's the historic significance of $690?"

It's just a passing thing, and to me, this looks like it merely happens to be the level to have shaken out as the platform or staging area in prep for the next phase higher. And in terms of another currency, it doesn't even exist...

R.
Ten Bears
Words of wisdom from Henry C K Liu
http://www.atimes.com/atimes/China_Business/HL14Cb04.htmlPaulson, China and the turmoil beneath, Dec 14, 2006
Snippets:

The US economy now is dependent on foreign trade as much as, if not more than, the exporting economies. Victims of addiction are usually not in any position to dictate the terms of supply.

Dollar hegemony, a term that describes the effect of the US dollar, a fiat currency, assuming the unmerited role of the key reserve currency for international trade, enables the US to use its capital account surplus to fund its trade deficit. For this reason, a balanced trade with the rest of the world would dry up the capital account surplus and create serious structural problem for the US financial system that needs US$3 billion of net capital inflow a day to keep afloat.

The United States is the only nation in the world whose foreign debt is denominated in its own currency. In that sense, the US has no real foreign debt as all its debts are sovereign debts payable in currency it can issue at will.
If foreigners holding US sovereign debt want to cash them in, the US can print as many dollars as it needs to satisfy them.
Therefore the US does not face risks of default on its foreign debts. This is what makes US sovereign debts relatively safe investments, as sovereign debts are not exposed to default risk,

The key behind the intrinsic value of the dollar is that dollars, and only dollars, are accepted by the US government for payment of taxes and all other governmental receipts. These characteristics, known as the State Theory of Money, make the dollar a political instrument exempted from rules that govern financial instruments.

China is not about to drive its economy further down any road that leads to an economic equivalent of a dangerous cliff merely to appease US ideological displeasure.

China's 11th Five-Year Plan, the roadmap for the country's development in the next five years, will bring revolutionary changes, moving from the "get rich first" phase to the "common prosperity" phase so as to bridge the growing income and wealth disparity that threatens to polarize of society.

Economists fail to understand that the dollar, since was taken off gold backing, is no longer a financial instrument subject to market laws of supply and demand. Under dollar hegemony, the dollar is really a political instrument. When viewed as a political instrument, everything that Larry Summers considered odd about the dollar falls in place logically.

When China holds more than $1 trillion in foreign reserves, it is moving closer to become a US financial colony.

The US economy is being held up by dollar asset appreciation, which allows higher debt without changing the debt-to-equity ratio.

China has been holding back its GDP by more than $200 billion every year, sending the earnings to finance US trade deficits, earnings from slave wages and toxic pollution.

What China needs to do is to keep export to the US at the same level as imports from the US. This is easily done. Every three months, as soon as exports to the US exceed import levels, exports are stopped until imports from the US catch up.

What China needs is to reduce its dollar income and shift that income to yuan by selling more of its products in the domestic market. But the entire neo-liberal globalized trade is built on all exporting economies thinking that earning foreign exchange is a good thing.

There is a mismatch between the democratic process in US politics and the dislocation in the US economy created by US-led globalization which no amount of China bashing can resolve.

For China, US protectionism will force it to turn from export toward domestic development. Mao Zedong said that bad things could be turned into good things.

The populist tidal wave may well build up to a tsunami. As outsourcing moves up the skill ladder, threatening the job security of not just assembly-line workers, but highly educated, resourceful and active workers in high tech, information technology, medicine and finance, the democratic process will turn against neo-liberal globalization. The backlash can turn ugly, mixing xenophobia with anti-Semitism.




Chris Powell
Don't resent coin melting ban; it's a great victory for gold and silver
http://www.gata.org/node/461310p ET Thursday, December 14, 2006

Dear Friend of GATA and Gold:

People are questioning the authority of the United States Mint to ban the melting and export of U.S. coins, as the Mint today proclaimed its intent to do in regard to pennies and nickels:

http://www.gata.org/node/4609

Most of the news stories on the subject seem not to have specified this authority, and neither did the mint's own statement, appended here.

But that authority is no mystery. It long has been part of federal law, United States Code Section 31, Subtitle IV, Chapter 51, Subchapter II, Section 5111(d)1, 2, and 3, which, referring to the secretary of the treasury, reads:

"1) The secretary may prohibit or limit the exportation, melting, or treatment of United States coins when the secretary decides the prohibition or limitation is necessary to protect the coinage of the United States.

"2) A person knowingly violating an order or license issued or regulation prescribed under paragraph (1) of this subsection shall be fined not more than $10,000, imprisoned not more than five years, or both.

"3) Coins exported, melted, or treated in violation of an order or license issued or regulation prescribed, and metal resulting from the melting or treatment, shall be forfeited to the United States Government."

Thanks to Cornell University Law School, you can find it all here:

http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00005111----000-.html

Of course as many governments, including the U.S. Government itself, have found before, making proclamations about coinage that defy the inherent economics of the situation is one thing and enforcing them is quite something else. After all, all those U.S. gold coins that were minted before 1933 and now reside proudly (and legally) in the collections of so many numismatists and gold bugs were supposed to have been surrendered to Federal Reserve banks around the country in 1933 because of a proclamation by President Franklin Roosevelt. Instead, it seems, most of the gold coins went underground, emerging again in a happier time.

But GATA isn't urging civil disobedience of the proclamation against coin melting. To the contrary, we may delight in it as a proclamation of monetary debasement. Now gold isn't alone, a matter of distant history in monetary debasement, what with U.S. gold reserves long having been officially valued by the Treasury Department at only $42.22 per ounce even as the market price (rigged as that market is) now exceeds $600. To most people, gold is an antique of no special relevance. But now even the hunble pennies and nickels in the pockets of EVERYONE are screaming "debasement" and proving an inflation rate far above the official rate.

This is sure to give people ideas that go far beyond the prospects for illegally making money by melting it down. So the mint's proclamation is nothing for gold's partisans to resent. To the contrary, it is a great victory for gold -- and of course for silver too.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

U.S. Mint Press Release
Thursday, December 14, 2006

http://www.usmint.gov/pressroom/index.cfm?action=press_release&ID=724

United States Mint Moves to Limit
Exportation & Melting of Coins;
Interim Rule Goes Into Effect Immediately

WASHINGTON -- The United States Mint has implemented regulations to limit the exportation, melting, or treatment of one-cent (penny) and 5-cent (nickel) United States coins, to safeguard against a potential shortage of these coins in circulation. The United States Mint is soliciting public comment on the interim rule, which is being published in the Federal Register.

Prevailing prices of copper, nickel and zinc have caused the production costs of pennies and nickels to significantly exceed their respective face values. The United States Mint also has received a steady flow of inquiries from the public over the past several months concerning the metal value of these coins and whether it is legal to melt them.

"We are taking this action because the Nation needs its coinage for commerce," said Director Ed Moy. "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers."

Specifically, the new regulations prohibit, with certain exceptions, the melting or treatment of all one-cent and 5-cent coins. The regulations also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in these coins out of the country, and individuals may ship up to $100 in these coins out of the country in any one shipment for legitimate coinage and numismatic purposes. In all essential respects, these regulations are patterned after the Department of the Treasury's regulations prohibiting the exportation, melting, or treatment of silver coins between 1967 and 1969, and the regulations prohibiting the exportation, melting, or treatment of one-cent coins between 1974 and 1978.

The new regulations authorize a fine of not more than $10,000, or imprisonment of not more than five years, or both, against a person who knowingly violates the regulations. In addition, by law, any coins exported, melted, or treated in violation of the regulation shall be forfeited to the United States Government.

The regulations are being issued in the form of an interim rule, to be effective for a period of 120 days from the time of publication. The interim rule states that during a 30-day period from the date of publication, the public can submit written comments to the United States Mint on the regulations. Upon consideration of such comments, the Director of the United States Mint would then issue the final rule.

Those interested in providing comments to the United States Mint regarding this interim rule must submit them in writing to the Office of Chief Counsel, United States Mint, 801 9th Street, N.W., Washington D.C. 20220, by January 14, 2007. The interim rule appears on the United States Mint website at www.usmint.gov. The United States Mint will make public all comments it receives regarding this interim rule, and may not consider confidential any information contained in comments.
Topaz
@Matthew.
Here in Oz, the Sovereigns attract a GST of 10% due to the fact they're not 999Gold.
It's a pity because the size and familiarity of Sovs and their 1/4 Oz ilk are universally accepted as "just right".
TownCrier
Last minute Christmas gift solutions
http://www.usagold.com/gold/special/angel.htmlMarie dropped me an e-mail that only 9 pendants remain available, with tomorrow before 4:00 pm being the last opportunity to order for Christmas delivery.

The best deal going, gentlemen, is... ONE size FITS ALL! No worries on that score.

R.
Ten Bears
Promoting Goldman on Govt. Tab, Jim Willie CB
http://www.321gold.com/editorials/willie/willie121406.htmlMore about China and US Treasury Sec. and US Fed Chairman trip to China:
Snippets:

The foreign central bank revolt is entering full swing across Asia, joined by the Persian Gulf nations in the Middle East.

An old but reliable book claims that the debtor becomes the slave to the credit master, and this arrangement is no different. Sovereignty of the United States is in deep jeopardy.

At the time of the last China mission by Paulson, the US Senate was threatening to pass the Schumer-Graham bill to impose a 27.5% trade tariff on Chinese goods entering the country. Well, what a coincidence that two weeks later, the giant ICBC bank initial public offering was completed, which netted Goldman Sachs a hefty profit of $3.9 billion,

Paulson will act once more as the Wall Street investment banker ambassador, to strike secret deals on stock issuance and public offerings. The pressure to open up their financial sector comes with unspoken mega-million$ in fees for the Manhattan insiders, who will surely not share their booty with small fry Wall Street firms, not with Paulson at guard.

Wall Street lusts and drools over the prospect of investment banker fees. This is the immediate opportunity, with many zeros on pay checks and coveted bonuses.
In addition, major Manhattan firms are putting their initial positions in place BEFORE the initial public offerings to sell the stock.

The losers are the US workers and investors. Systemically, global village forces continue to exert pressures, both to level the wage playing field and to provide exploitation opportunities for those in power.

The dirty little secret inside China is that a tremendous amount of wealth is concentrated within the Communist Party leadership. They own a big proportion of the banks and other companies offered in IPO stock launches.

Such collusive practices between government and private industry are precisely where the Mussolini Fascist Business Model profits for the connected insiders, apart from any public participation. Expect more compromises which sell out the US Economy, the US workers, and future financial health of our nation, so that Wall Street can continue to earn billion$ which ordinary people cannot earn.
Sundeck
Hank's and Ben's Journey to the East
http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nBJB000103ℑid=2006-12-15T021621Z_01_BEJ105_RTRIDSP_2_CHINA-USA-INFLATION.jpg∩=U.S.%20Treasury%20Secretary%20Henry%20Paulson%20(R)%20shakes%20hands%20with%20Chinese%20Finance%20Minister%20Jin%20Renqing%20before%20a%20group%20photo%20of%20the%20U.S.%20and%20Chinese%20delegations%20at%20the%20Strategic%20Economic%20Dialogue,%20in%20Beijing's%20Great%20Hall%20of%20the%20People%20December%2015,%202006.%20China's%20torrent%20of%20cheap%20exports%20has%20helped%20suppress%20inflation%20in%20the%20United%20States,%20an%20official%20Chinese%20newspaper%20said%20on%20Friday,%20as%20Beijing%20officials%20fended%20off%20U.S.%20pressure%20going%20into%20a%20second%20day%20of%20economic%20talks.%20REUTERS/Greg%20Baker/Pool%20(CHINA)&from=businessSnip:

"...
"We will each take measures to address global imbalances, notably through greater national savings in the United States and through increased domestic consumption and exchange rate flexibility in China, and maintaining open investment in both countries," Paulson said.
..."

Sundeck: STOP Press! A decision has been reached in The East! By Jove, two days of hard-fought negotiations have lead to this monumental achievement - to preserve the status quo.

I declare I feel a bit like poor old Khayyam of Rubaiyat fame:

"Myself when young did eagerly frequent

Doctor and Saint, and heard great Argument

About it and about: but evermore

Came out by the same Door as in I went."

Mmmm...I wonder what they pay a Treasury Secretary to travel the world to such great effect?

:-(



TownCrier
tejbear, (yesterday msg#: 150182)
Thanks for the dialog.

To recap your main issue:

"""My "discussion" with Flatliner was pointedly at the difference in potential profit opportunities between gold and silver. By my simple math, it appears that a "worn" $20 gold coin, like an ounce of gold, with little numismatic value, is reasonably priced near its 1900 purchasing power, which is $666 in today's 97% devalued dollars. On the other hand, silver appears undervalued by ~60%, as it should be closer to $33 per ounce. Both metals will skyrocket when the collapse begins in earnest, but because of the purchasing power disparity, it appears to me that silver will out perform gold."""


My primary caution for you in this line of thinking is that while trying to imagine what the future might hold, you seem very eager to dismiss what the past and present conditions are trying to tell you.

Let me put it this way.

Imagine yourself as a young man, standing at the threshold of the turn of the last century, mulling over this very same topic.

You would say, "OK, so here we are at a convenient baseline from which we can consider future returns on silver and gold, whereby the starting point shows us an ounce of gold is officially stamped $20 and an ounce of silver is stamped $1. I shall now pose the question to myself and everyone, as the bimetallic standard shall inevitably come undone, ownership of which metal will provide the best future returns?"

And 'lo, through the magic of immortality and a good historical record, the passage of the past 106 years lets you now sit back and truly evaluate the current status with regard to your question.

You would have to be impressed with gold's "returns" from $20 to $640 (3200% climb) versus silver's lackluster returns from $1 to $14 (1400% climb).

This surely begs to be appreciated on its own merit.

However, it seems you are very much wanting to go beyond a simple dismissal of this 100 years of dispassionate instruction; you are wanting to cite this as an underperformance of silver as a sort of justification that's its day of reckoning (catching up) is somehow sure to come.

I would propose the following alternative to your view. I would suggest that perhaps the true reckoning is being revealed to us.

I would go further in suggesting that the 1900 date which you chose as the gold/silver baseline was actually a time at which silver was likely OVERvalued against gold, and might, in fact, have significantly farther to lag behind as time continues to tick forward on our clock. That is to say, at $20/$1 in the gold/silver ratio, the past 100 years seems eager to tell us unequivocally that silver was overvalued.

Going forward, I'm not trying to say absolutely one way or the other, but I AM suggesting to you that this alternative perspective ought not be summarily dismissed as you seem so readlily inclined to do. To be sure, it isn't their physical quantities, but rather the past usage and the evolving current and future usages of these metals which hold the key to their relative valuations.

And coming at this particularly from a central banking perspective, I'd like especially to impress upon you the idea that there is a bold new utility in store for gold ownership, whereas silver usage remains very much on the path its traditional industrial trajectory -- bumpy and upward, but nothing that will compare with what's in store for gold.

R.
Knallgold
Axel Webers Message
"...The euro-zone economy is standing on its feet and doesn't need support from monetary policy any longer, ECB governing council member Axel Weber was quoted..."

"the euro must standing firmly on its feet" was one of PandaGolds prominent pre-requisites for Gold being let run.
Goldilox
Ag-Au ratio
@ TC, tejbear,

Not to cast dispersions on either scenario, but if PoG reaches beyond "perceived affordability" for Joe Sixpack, the "new utility" paradigm MIGHT also be experienced in silver.

If the $ reaches some point of popular disregard, even temporarily, silver may be the only reasonable commodity for making "change" if/when PoG emulates a Moon launch.

Even at today's gold exchange level, I find many things I want to acquire are valued well below a single oz of gold, the most widely held unit.

I also have no crystal ball to assess the actual feasibililty of this.
Topaz
Au-Ag. feeding the flame.
http://goldinfo.net/silver600.htmlRecent (100yr) action has largely been motivated by the centralist agenda, ergo a 16:1 ratio looks to be a "natural" target ...overshoot to 8ish then cash out to Gold ;-).
Sundeck
OPEC to cut production in February
http://www.nytimes.com/2006/12/15/business/worldbusiness/15opec.html?_r=1&th&emc=th∨ef=sloginSnip:

"...
The OPEC oil cartel said yesterday that it planned to reduce its output by nearly 2 percent in February, the group's second production cut in two months and its strongest indication yet that it would seek to keep oil prices above $60 a barrel next year.
..."

Sundeck: Goodness, gracious...why would OPEC want to do that? Perhaps dollars just aint what they used to be..."Here, I give you this bit of paper with $60 IGWT written on it and you give me a nice big, fat barrel of oil that I can make into all sorts of things. Sounds OK to me. What's your problem? Don't you believe in a free market?"

:-(
Toolie
Silver vs. Gold
Which is the greater threat to the US dollar?
Whichever one that is would be more likely to be held in check.
If you believe that the free market will win the day and the restraints will come off the metals, then gold is a no brainer.


My holdings 4au to 1ag at current dollar value.
frosty 1
Goldie...your opinion please
I do value your common sense outlook,it is most pleasing in a sea of folk who do not look more then 2 days ahead.
That said...It seems to me the dams leak on the dollar is a small river now ...leading to an international dollar plunge,despite the cayman island help.
What do you think the price of Gold'silver,and a $250,000.home,will be with the buck at 65?
slingshot
Great Day to be a Goldbug
I did take the Forums advise and brought silver, now that gold is moving up. I have the say the Woulda, Coulda, ,Shoulda has settled in my mindset. A tube of Silver Eagles cost $330 to $345 if you buy a tube. One cost $18.00. The Silver Dollar Morgan's still at $24-$26 a pop. Yet the biggest price increase was found at the neighborhood flea market where Silver Eagles were going for $30.00 a coin.Love Chrismas specials. The vender made sure to tell me they were .999 fine. I'm thinking, "Thirty Bucks". , They were $7.50 not so long ago.
Are you wondering if this is it? I say No. And if not when? All the charts ,figures and editorials are just pointing us in the right direction. When "When" finally strikes it will be your friends coming to you to find out about Precious metals. My friends ,who are in their thirties, are worried about retirement. IRA's bonds CD's and stock Market and not one mention of PM's. I say nothing to them anymore for they are too wrapped up in paper money. Things are changing fast and they smell the smoke. Maybe I was lucky to find this site.
The Knights and Ladies that have provided and continue to provide valued information to this Forum, are LIGHT YEARS ahead of the public.
Thank You, USAGOLD and all those at this Forum.

Slingshot----------<>
Goldilox
Prognostications
@frosty1,

I'm not so good at guesses, and currently, I'm most interested in the battle to best $650, but here goes. . .

If the dollar DX slips below 80 and makes its way toward the next predicted support at 72, I predict some nasty goobermint reprisals against dollar holders who wish to dump. As to prices, expecially things like RE, who knows? Here in CA, though RE prices are falling, rents are rising as more previous homeowners are punting and joining the rental market. That's to be expected, as rents had not followed the RE boom prices equivalently.

Will that be the time of panic in the streets? Probably not, as TPTB will have some contingency (war, etc.) to convince the sheeple that their desired course is the ONLY viable one.

To me, the unfactored variable is another mismanged NO event, where the masses not only lose more faith in the goobermint, but actually react to that loss. Martial law contingencies are in place, but they also require complicity of the enforcement bodies, who may or may not believe their massa's stories. Recent polls have shown that about 50% of our uniformed forces would be hesitant about firing on fellow citizens during a Kent State type event, so they would need to have their fear factor raised considerably to be effective tools of Martial Law. Maybe that's why so many foreign troops are currently stationed on US soil, something the mainstream media NEVER questions.
Goldilox
General mood on the street (main street, not Wall St)
http://urbansurvival.com/week.htm@ frosty1,

I came across in my morning readings - AFTER my last post.

snip:

Elections? What Elections?
A number of months back, probably a year without going to the files to look it up, our friends with the time predictive software came up with an amazing read of the future that included references to "rebellion" and "revolution" as the ruling meme for Winter 2006/2007. At the time it was a pretty outlandish thing to consider. The economy was cooling, Iraq was devolving, but there was a sense of - for lack of a better term - normalcy. Remember, this was long before the November elections.

Fast forward to today. Despite the election, the military is asking for more active troops to be rotated into Iraq, John McCain says another 15 to 30-thousand are needed, and Secretary of State Condi Rice has ruled out asking neighboring countries (they're Arab states) for help in getting the sectarian violence under control. And when coupled with the surgery this week on one key democrat, who could make the difference between an effective republicorp majority in the Senate, or democorp control, I was still surprised to get an angry email from a reader yesterday that spell out why a lot of Americans are starting to feel like events are no longer under control of the electorate:

"IMHO, the U.S. government, both the Legislative and Executive branches, have, by virtue of their f'ait accompli decision to "double down" in Iraq, given the American public license to openly rebel against the government. The voters mandate was clearly opposed to any increase in military activities in Iraq. What we have right now in Washington is essentially a rogue government, and Senator Johnson's fate is meaningless in such a context since the two parties are one and elections clearly don't work as a means for voter self determination.
REVOLT NOW!"

Just so we're clear for the various government agencies that read this site I (the editor here) am NOT CALLING FOR REVOLUTION. I'm a rabid Constitutionalist, legal process guy. And I assume the irate reader means by peaceful means at the voting booth. What I am reporting on in the above email is key because it points to a developing mood which we've seen in event predictive linguistics. It seems to be here.
---
There are lots of drivers to this propagating mood shift. Let me give you some of the most obvious: A well informed reader sent us the following analysis:

"What the Administration is really trying to do is lift the TWO-YEAR cap on deploying Reserve/National Guard. The President is only allowed a two year limit on deployments under a Partial Mobilization Order. Quite frankly, the interpretation of the Partial Mob has been severely abused as it is.

What this administration is really trying to do is exercise what would be considered a Full Mobilization. The Full Mob requires that Congress DELCARE WAR. This has not been done. It is highly unlikely that the Congress would do this given the general attitude of the American people right now.

What kind of government do we have, George, when the Executive branch under a single leader can continue to conduct war and can use people and resources without seeking the consent of Congress? It is no longer a government following the Constitution which I SWORE AN OATH to!"

But the public anger below the surface of contemporary events is not limited to abdication of lawmakers to the corporate-executive alliance (what Ike called the "military-industrial complex, which now includes big pharma as well). There's the whole economic dimension. We'll get to this morning's job report in a moment, but to put it in context, let's quickly review the two biggest developments of the week that are virtually invisible in Mainstream Media. . .

-Goldilox

I'm sure some enterprising Neo-CON brown-nosers will cry that George is inciting disobedience, but then, those who really believe in our Constitution would respond that the government is the one who's supposed to be "obedient" to the will of the electorate, not the other way around!
Thoreauly
Revolt? Sorry, but the Task Force has other plans.
http://www.cfr.org/content/publications/attachments/NorthAmerica_TF_final.pdf"The Task Force proposes the creation by 2010 of a North American community to enhance security, prosperity, and opportunity. We propose a community based on the principle affirmed in the March 2005 Joint Statement of the three leaders that �'our security and prosperity are mutually dependent and complementary.�' Its boundaries will be defined by a common external tariff and an outer security perimeter within which the movement of people, products, and capital will be legal, orderly, and safe. Its goal will be to guarantee a free, secure, just, and prosperous North America."

Task Force? What Task Force? That would the Task Force of the secretive but enormously influential Council on Foreign Relations, current members of which include: David Rockefeller, Thomas Foley, Paul A. Volcker, Prince Edward, Prince Charles of Wales, Madeleine K. Albright, Zbigniew Brzezinski, George H.W. Bush, William Jefferson Clinton, Donald E. Graham, Henry A. Kissinger, Richard N. Perle, George Soros, Lawrence H. Summers, Robert S. McNamara, and John D. Rockefeller IV.

Why do I bring this up? Because, as we connect the dots that run from World War I to the present -- http://www.commondreams.org/views06/1211-26.htm -- it is important to understand how the world's power brokers respond to the mayhem that continually lies in their wake, not least of which is the "political fiction" that is Iraq and the "unraveling of the Middle East," as a century of Western neo-colonialism come to an end amid a spasm of terror that the colonizers themselves instigated.

Thus will the resultant "War on Terror" be used as the pretext for creating a "common security perimeter" around Canada, the US, and Mexico (see link), the ultimate objective of which is to "lay the groundwork for the freer flow of people within North America." Which is to say, the free flow of Mexicans north, in order to simultaneously rescue the US welfare system from bankruptcy and provide enough cheap labor to make up for the loss of inexpensive imports from China (which will have turned inward following its refusal to provide the massive but increasingly costly vendor financing of US consumption).

Whether the Bush administration will be successful in a desperate, last-ditch effort to take control of Persian Gulf oil via a lock-down of Iraq and an invasion of Iran (the Bush cabal can't just pull out, after all, and let history trash them) remains to be seen. If so, then the dollar should be able to cling to its status as the world's reserve currency long enough to morph into the euro-like amero -- http://www.americanfreepress.net/html/cfr_making_moves.html. If not, then the ghastly scenario that Dmitri Orlov outlines -- http://www.energybulletin.net/23259.html -- will likely become a reality. Either way, however, We the People lose, the only question being who among us will have exercised enough forethought to escape the worst of what each scenario will have to offer.
TownCrier
Goldilox (msg#: 150235), I think we might be talking about slightly different things
http://www.usagold.com/gold/coins/britkings.htmlYou said, "...silver may be the only reasonable commodity for making "change" if/when PoG emulates a Moon launch." And, "...Even at today's gold exchange level, I find many things I want to acquire are valued well below a single oz of gold, the most widely held unit."


Your emphasis seems to be on a barter-based scenario as a future motivator of people's behavior.

If that is what I thought things would come down to, then I would agree with you on the additional boost silver would likely get from that hand-to-hand economic paradigm.

However, using what has played out in other countries as a guide to human behavior at times when the local currency goes bad and gold becomes priced into the many multiples of its former local price, the outcome follows a recognizable path. As the value of the currency goes down, the price of everything goes up, but people do still continue to conduct transactions in their local currency, and (to a lessor extent) in foreign currency, and gold continues to be sought as the primary tangible consolidation of people's monetary surplus (i.e., their savings).

To be sure, gold is available on the market the world over in all shapes and sizes, so there's every reason to expect people shall continue to find the size or combination of sizes which is the right fit for their life savings, regardless of elevated price levels. And while saving up cash to enablethe purchase of their next gram, experience and intuition tends to inform us that they will likely hold their margin of surplus money in an interest-bearing account as a more efficient behavior than an interim staging in silver.

Of course, the next time COULD be different... maybe things will be so fouled up we'll all be bartering with old copper pennies. But I tend to have little expectation for that scenario. We shall in greatest likelihood continue to have a system of digital money and paper currency for routine transactions, and in parallel with this will be a continuing shift toward a greater demarcation in the use of gold as a reserve assets and as the consolidation of an individual's life savings. Such is the human tendency to gravitate toward efficiency in all things.

R.
Goldilox
Barter vs. More of the same
@ TC,

I agree that all of this depends a lot on the magnitude of dollar demand destruction. Is modern civilization approaching a major "turning point"? Some think so, some not, but I think we agree that in either scenario a strong PM holding is quite prudent, given the obvious changes that we CAN see taking place.

The question that remains is what the reaction of the RoW will be during a potential dollar collapse. As the US is now a net food importer, net energy importer, and net manufacturing importer, with little but derivatives and "economic services" to export in return, the backlash to a few decades of dollar dominence may or may not be somewhat reactionary, even if only for a temporary period of "rebalancing".

I personally am of the camp that believes hyperinflation in the US will be much more difficult to manage than in Zambia or even Argentina, or even Weimar Germany, due to modern global economic inter-reliances.

Should the globalist model experience major disruption, transportation, JIT manufacturing, fuel and food importation will all require some major adjustment for the masses to survive, and much of what we think of as "status quo" may not be as useful as it is in a transport-based world economy.

I certainly don't claim to know if Ag or Au is the better bet, but I expect either to be a good bet, with the final determination depending very much on "how the dominos fall".

What I meant by "making change" with silver or some other commodity of lessor value pertains to retaining value. If gold attains a four or five figure value, and I need to redeem some of my stash for necessities, will I want to take change in some rapidly depreciating paper, or would I prefer my "change" in something of more tangible value?
USAGOLD / Centennial Precious Metals, Inc.
Order yours before 4pm (Denver time) TODAY
TownCrier
Goldilox, on "making change"
http://www.usagold.com/gold/coins/stgaudens.htmlI definitely catch your tangible point. The drift of my comments in this same regard, however, was that most people would probably simply use a traditional bank account for their marginal surpluses. I think it is a safe assumption that the banks, although falling short of the real pace of inflation as they ever do, will offer an interest rate sufficiently high enough to at least keep the currency "in play", keeping the game alive. People in general are willing to pay a modest price in inflationary losses for this transactional efficiency.

R.
frosty 1
thanks for the thoughts
I do think in a massive crash-run, out of the buck,the U.S. consumer will be slow to take steps to protect themselves.Most I know, are so conditioned to let the government handle problems of this nature.I think when the dust clears,the rage that might be present will be channeled into a third party candidate,come 2008.
We are now more like the London sect, then a take to the streets kent state affair.We as a nation have allowed the big business interest to dumb us down.
With Hillary or obama types as our choice alternative'some smart go getter(knowing the vote-splitting unelectability of these two) will appear and rally all the unrest to HIS advantage. This I believe will come to pass..IMHO
frosty1
Goldilox
Interest vs. tangible
@ TC,

While I would like to think more people see through this, I remember in 1980 when my brother bought a CD paying 15%. I reminded him inflation was at 18%, and he replied, "It's closer to 18 than zero percent."
Cometose
Silver
Don't look the gift horse in the mouth !

Be careful .........

The Hui and Xau aren't buying this BAD B(*& S(&U.

Silver is down in a notoriously unbalanced way today .....
( out of parralled with current moves in dollar and gold ).
Perhaps Paulsen's Pre saturnalia present to his counterparts in China to recieve in return an orderly fall off of the dollar per China.

This looks like a two day knockdown to me , a controlled slide if you will.......If planned with an up move in the dollar , there should be some more metal whacking on monday; that might be a good time to sell the dollar as it approaches 85 or buy gas or sell the stock market or sell real estate or buy the barbarous relic.

It SMELLS.........like the PPT( paulsen's paper traders)......

don't look (open your perception) now, but (on a global level) there are 50 PAPER MACHE ELEPHANTS standing in the living room ......and there are individuals (international dignitiaries) walking around barbeque lighters in the living room with miniature flame throwers in hand
who are tempted to let free the PYROMANIAC .

Is that why SILVER IS ON SALE TODAY in such an IN YOUR FACE KIND OF WAY .....?
Druid
@Goldi & TC

"People in general are willing to pay a modest price in inflationary losses for this transactional efficiency."

Druid: If I might add to this TC and Goldi, people by-in-large will choose something they perceive as secure then not. Another words they will choose a continued interest rate kicker which they think they understand and forego a repricing of an asset that they don't understand(keep watching the DOW and Bonds). I constantly come across people that think they made out well during the seventies because they were paid a higher interest rate for a paper asset that was marked down not realizing the full extent of what they lost in real purchasing power during that time. To this day they are still happy with what they perceived they came away with in holding government backed bonds that paid a GUARANTEED interest rate versus what they could have made versus the percentage gains gold achieved.
Goldilox
Today's smack-down
@ Druid,

I also think today's smackdown is tied to the very heavy imbalance of calls over puts in the mining equities. Today is options expiry, and the miners I watch are all settling near an exercise price.
mikal
Weber and bank independence
http://news.yahoo.com/s/afp/20061215/ts_afp/germanyfranceeu_061215101123ECB ready to raise rates further, says Bundesbank Fri Dec 15, 5:19 AM ET
FRANKFURT (AFP) - Snippits: "The European Central Bank is ready to raise eurozone interest rates further and will not put off any such moves to avoid potential clashes with politicians, Bundesbank President Axel Weber has said.
Quizzed by the daily Frankfurter Allgemeine Zeitung Friday about recent attacks by top French politicians on the ECB's independence, Weber insisted that the guardian of the euro would not bow to political pressure and would press ahead with further rate rises if necessary.
As the head of the German central bank, Weber sits on the ECB's decision-making governing council."

Mikal-- Weber adds another voice to the chorus calling for
inflationary vigilance, higher rates, a stronger euro and independent, proactive monetary policy.

""I warn against eurozone countries, whose competitiveness is suffering (under the strong euro), to look for external scapegoats," the Bundesbank chief continued.
"The right way is to look inwards, to analyse the shortcomings of their own economic policies and work to correct those political shortcomings," Weber said.
The Bundesbank chief also gave strong hints that further rate rises were on the cards.
"We have made clear that monetary policy is continuing to stimulate the economy and that key rates are still at a low level," Weber said."

It seems these points get emphasized most when US$ index stages any comeback or ceases it's descent. Weber says many things besides these excerpts. For example, he's won't
give away all the script like some want:

"Pressed by the Frankfurter Allgemeine Zeitung whether rates could rise beyond 3.75 percent, Weber refused to be pinned down. "I don't want to speculate about concrete monetary policy measures," he said. "We must be ready to act. In order to anchor inflation expectations at a level compatible with price stability it is necessary to counter inflation risks decisively," Weber said.
Asked whether there was a pain barrier within the ECB with regard to the current strength of the euro, Weber replied: "Pain barriers aren't part of our monetary policy strategy.""
Federal_Reserves
Don't fence me in
http://www.texasreddirtmusic.com/slthm.htmlCalifornia fencing company to plead to immigration charges
By ELLIOT SPAGAT, Associated Press Writer
Thursday, December 14, 2006

A Southern California fence-building company and two executives have agreed to plead guilty to knowingly hiring illegal immigrants and pay a combined penalty of $5 million, two people close to the case said Thursday, marking a rare victory for the federal government in prosecuting employers for immigration crimes.

Golden State Fence Co. agreed to plead guilty to harboring illegal aliens and pay $4.7 million to the federal government, according to the two people, who spoke on condition of anonymity because the plea was in the process of being entered.

> Maybe they'll get the contract for building
> the immigrant fence on the CalMex/Texico border.
Topaz
Bond Gold.
http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=The am yield drop is usually an alignment with electronic (o-nite) trading. Not today though!
This drop, it appears, along with concurrent Buck drop, was unpalatible to some and a reversal to unch took place.
Silver, through the futures in Comex took the brunt of the reaction as our G/S Ratio will no doubt show.
A similar move with real metal up for grabs would've failed miserably.
BuyOp par excellence imo.
Sundeck
Silver
Uh...oh....looks like silver is in another of its "desperate correction" phases...just like back in Sep06, Apr06, and c.Mar04.

7% in a day! Silver's down-drafts are characterised by drama. Remember the big correction in 04, when silver slumped from above $8 to below $6 (not in one day, though)...and many hearts slumped with it? But look at it now...slumping from $14 to $13...big deal. Take a look at the 10-year charts if you need to have your faith renewed.

I notice that other metals (Cu, Zn, Pb, etc) do not appear to be responding to the same silvery signal this time around. ...and gold has scarcely rolled over in bed...a 7% "correction" in gold would have it down around $580.

:-)
contrarian
Is This Is Friday
If this is Friday, then I must be in La La Land and the manipulators must smash down gold and silver, especially after the COMEX close, along with boosting the dollar. We know what you're up to!
TownCrier
Reuters on today's market action
http://www.usagold.com/gold/coins/swisshelv.htmlNEW YORK/LONDON (Reuters) - Silver plunged about 7 percent... as a rallying dollar, weaker base metals and the bullish stock market triggered heavy selling by funds ahead of the weekend...

"When the dollar started to turn around, all the funds got out at the same time, creating enormous volatility," said Kaplan.

"You see the funds liquidating everything. They are selling grain. They are selling copper, everything," Kaplan said.

Gold has fallen steadily since rallying to a 16-week high of $649.50 on December 1 as players locked in profits ahead of the Christmas and New Year holidays.

^---(end excerpts)---^

You know... it takes ALL types to make a market. The fund managers play a game in which the winning score is determined by the number of dollars in their account. That's why they can so casually fall all over themselves in a year-end rush to sell their "tangibles" in exchange for official tally marks of dollars on their scorecard.

On the other side of the equation are the peoples of the world who are actually doing something PRODUCTIVE with their time throughout the year. They build our houses, our cabinets, our funiture. They are the farmers and ranchers who grow our food. They are the drivers who distribute our goods, the mechanics who repair our cars. They are the engineers and equipment operators who design and build our infrastructure, they are the policemen, firefighters and soldiers who give us peace of mind, and the doctors and nurses who attend to our health. They are also the accountants who know that all this scorecard monkeybusiness is merely a business tool to aid in our decisionmaking and to calculate how many dollars must be rendered quarterly unto Uncle Sam's tax collector.

When the year-end reckoning reveals to these industrious people how much surplus earnings they have acquired throughout the year, the wisest among them lock in their profits by doing the opposite of the hedge funds -- they eagerly step away from the silliness of excess dollars by converting them into safe, long-term tangibles -- actual wealth such as physical gold which will retain meaningful value into and beyond the needs of their retirement years.

Unfortunately, the selling by the hedge funds does nothing to contribute actual tangibles to the marketplace -- they are selling only the same bogus paper derivatives which they bought earlier in their papery game. Their motto is, "All paper, all the time."

What a life!

R.
RAP
2006 Financial Report of the United States Government
http://fms.treas.gov/fr/index.htmlHere is the report WND mentioned yesterday would be out today.
The actual report is at:
http://fms.treas.gov/fr/06frusg/06frusg.pdf
Page 152 is very interesting, $50 Trillion fiscal exposure, 4 times GDP!
USAGOLD Daily Market Report
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

FRIDAY Market Excerpts

Metal slips, dollar up on Gov't reports

December 15 (from Bloomberg, MarketWatch) -- Gold fell to the lowest in five weeks as a gain in the value of the dollar reduced the appeal of precious metals as alternative investments.

The metal is still up 19 percent this year, while the dollar has fallen 9.4 percent against the euro. Gold has gained every year since 2001, moving in tandem with the euro from 2002 to 2004. Last year, gold gained 18 percent even as the dollar rose 14 percent against the euro.

Gold futures for February delivery fell $11.80, or 1.9 percent, to $619.10 on the Comex division of the New York Mercantile Exchange, the lowest since Nov. 8.

"Gold's got this obsession with the dollar," said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. "The dollar's going to end the week higher. The longs in gold are liquidating."

The dollar gained after a report showed international investors boosted holdings of U.S. securities by $82.3 billion in October, after a $70.2 billion jump in September. Official institutions such as central banks added $18.5 billion, the most in almost two years, U.S. Treasury data showed.

High U.S. interest rates are still attracting investment, said Leonard Kaplan, president of Prospector Asset Management.

The Federal reserve has kept its benchmark rate at 5.25 percent since June. The European Central Bank on Dec. 7 raised rates to 3.5 percent.

Fresh economic reports reinforced market expectations the U.S. economy is likely headed for a soft landing. U.S. industrial production rose by an overall 0.2% in November, as the auto sector showed signs of life after sharp declines in the prior two months, the Federal Reserve said.

The Labor Department surprised the market early Friday with a report showing consumer prices were unchanged in November as lower energy and car prices offset higher costs for homeownership and medical care. Capacity utilization remained steady in November at 81.8% from October.

The flat readings could encourage the Federal Reserve to begin to relax about inflation. Earlier in the week, the Federal Open Market Committee said it judged inflation risks to be its greatest concern even as it held interest rates steady.

The gold market "looks vulnerable to ... liquidation as the dollar claws back [out] of its recent weakness," said James Moore, an analyst at TheBullionDesk, in a note to clients. Still, "the mid- to longer-term outlook for gold remains bullish due to increasing investor interest and speculation of institutional dollar diversification," he said, in a note to clients.

Ned Schmidt, editor of the Value View Gold Report had a bit of advice for metals traders Friday: "Don't let the paper-asset pushers on the Street muddle your thinking. Inflation in the U.S. hit a low in October, and is headed up."

Given that, "excessive and emotional selling by Street of metals is creating buying opportunity," he said, warning that "Monday [will] likely to be low for rest of year."

---(see url for full news, 24-hr newswire)---
TownCrier
Monetary analysis by Otmar Issing
http://www.dailytimes.com.pk/default.asp?page=2006\12\16\story_16-12-2006_pg5_24(excerpts)
"In the standard model of the neo-keynesian approach, which has become more and more "state-of-the-art", the usefulness of money to monetary policy analysis is challenged; there is no need for monetary cross-checking, monetary analysis has no value-added and is superfluous.

I am not convinced by these arguments.

Customary inflation forecasts and economic analysis alone are not a sufficient basis for monetary policy decisions. While such decisions must not ignore longer-term developments, the time horizon for inflation forecasts is usually only one to two years, beyond it gets highly uncertain."


"In this highly uncertain environment, monetary policy decisions which did not rely on a solid framework could have been misguided. This posed a risk of substantial policy errors, which would have constituted a deadly blow on reputation, the most important capital of any central bank.

Thus the ECB needed to rely on the few robust results theory and experience can provide. The long-run connection between money and price developments is among the most robust economic relationships. "Inflation is always and everywhere a monetary phenomenon". This statement by the late Nobel laureate Milton Friedman has never lost its validity. And who would deny that monetary policy has to do with money? Certainly, monetary analysis is no easy task, though this is true for all relevant economic explanations."


"It would be strange to suggest that any central bank could ignore the information from money. Many studies have also shown that there is hardly any major asset price inflation episode which was not accompanied if not preceded by strong growth of money and/or credit.

The question is not whether or not to include monetary analysis in the monetary policy strategy, but how to reconcile the results from the monetary and the economic analyses to achieve a comprehensive and consistent assessment of the risks to price stability. In the strategy of the ECB this is the role of crosschecking.

It is not surprising that in a world of low inflation central banks as well as academics have lost interest in "money". One can only hope that the world does not have to go through the same process of pathological learning via high inflation which followed the neglect of money during the fifties and sixties of the last century. After all, is it not premature � if not plainly arrogant- to claim that all this evidence collected over many centuries and across numerous countries has lost any meaning for the present and the future?"


"The ECB has never claimed that its strategy is the ultimate solution to the challenges monetary policy is confronted with. But, it has recognised the need to include monetary analysis � in a very broad sense � into its policy considerations."

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

Without naming names, Issing takes a tactful jab at the U.S. Fed policy to abandon reporting of the broad monetary measure of money supply, M3, and in doing so helps to further differentiate the ECB's operational style as superior to the lumbering green dollar dinosaur.

For you savings to survive the various ice ages and meltdowns, choose gold -- it demonstrates incredible powers of permanence even when measured over the most vast, geologic timespans. Good as gold!

R.
TownCrier
Brazil, Argentina sign deal, reduce need for U.S. dollars
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564858538372237436December 15, 2006

BRASILIA, Brazil (AP) - Brazil and Argentina agreed Friday to directly convert their currencies in trade transactions, reducing the need for U.S. dollars.

Currently, both importers and exporters in the two countries must purchase foreign exchange contracts in dollars, creating additional intermediary fees, Brazilian Central Bank President Henrique Meirelles said.

Under the new system - which will not replace the current one - exchange contracts for trade will be registered with each country's central bank and settled within 24 hours. Any additional foreign exchange conversion costs will be settled in dollars between the two banks.

''What we're talking about is the evolution of an idea to enhance commercial flows,'' Meirelles said. ''There's a series of complexities in the current system that generate extra costs.''

The new conversion system will take effect by mid-2007, officials said. Importers and exporters will have the option of using either system.

The new system will be offered later to other countries in the Mercosur trade bloc.

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

Another step in the dollar's drift from preeminence. Bad for green, good for gold.

R.
Cometose
COT
Report this week shows

Silver net short 2300 contracts


and

GOLD long 3400

based on Futures and options positions logged as of WEDnesday


Today gold was down somewhat (about 1.7%) and SILVER WAS DOWN ....

about 7 %

I believe that this is about the third week of consecutive net long postions with Commercials for Gold .....

Cometose
COT
Goldilox
The Consumer Crunch Update: Party Over?
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=61350snip:

Our latest research shows that American consumers are out of cash and up to their eyeballs in debt. However, it is possible for consumers to keep pushing the economic envelope.

The growth of real-estate based debt is slowing and is causing lower consumer liquidity. The slowdown in household mortgage debt flow SHOULD lead to a recession - BUT the Federal Reserve is determined to prevent one.

The latest economic statistics show that consumers depended on new debt for 90% of their cash flow during 2006. Any decline in debt flow will constrain liquidity and should cause a decline in the growth of consumption and household investment.

We demonstrated in our March, 2006 update and confirmed in our June and September, 2006 updates that consumer liquidity was falling sharply. This report shows that consumers could be setting historic liquidity lows on all of our measures by January 1, 2007.

Our preferred measure of consumer liquidity already shows dramatic deterioration over the last 2 years. This measure shows that consumer liquidity is about 20% below the liquidity level at the start of the last recession in 2001. It also shows that liquidity is still declining!
Goldilox
Bear's Lair: The future won't resemble the past
http://www.prudentbear.com/internationalperspective.aspsnip:

The hollowing out of U.S. manufacturing has proceeded further than it needed to, as foreign capital has propped up the dollar artificially, being attracted by the U.S. asset bubble. Since 2001, interest cost differentials between low risk and high risk credits have been artificially reduced, producing a wave of investment in doubtfully creditworthy Third World countries and an acceleration of outsourcing from the American heartland. Profits have been artificially raised, as asset price increases and operating cost reductions have flowed to corporate income statements, further boosted by the artificially low cost of capital.

This has been enormously beneficial to some within the United States, and has hurt others. Most obviously, it has benefited Wall Street, rentiers and top corporate management. High asset prices, low interest rates and an ever increasing speculative flow of capital round the world all act to boost Wall Street profits and bonuses. Conversely, it has damaged Middle America, whose jobs have been outsourced, it has damaged savers, who have been unable to get a decent return on their money except by speculation and it has damaged the asset-poor, who have been priced out of the housing market.

Those who expect current conditions to continue, money to remain loose, asset prices to remain inflated or even inflate further, and inflation to remain quiescent are equally deluded today. (This group would include most of Wall Street, Fed Chairman Ben Bernanke and the Chief Executive of luxury homebuilder Toll Brothers, who announced Thursday that the housing market had definitely bottomed out.) They are expecting the future to be like the past, and for continuing outsourcing of goods and services to Asia to keep suppressing prices in the West, allowing cheap money speculation to continue.

At some stage, however, outsourcing's artificial suppression of price inflation will stop. The enabling of outsourcing by telecoms and the Internet is a step change. It has already happened, no further major improvements are in store, and the remaining difficulties of international sourcing, primarily language/cultural barriers and transportation logistics, will remain in place and not enjoy more than modest improvement. Like the manufacturing revolution produced by electric power, or the transportation revolution produced by the automobile, it will continue to increase efficiency at a gradually reducing pace, but its enormous effect on the prices of outsourced goods will no longer dominate the world economy and suppress Western inflation. Wage rates are rising rapidly in China and India, a sure sign that the workers in those countries are gaining the bargaining power they deserve, in turn pushing up the prices of their output and reducing the exceptional cost gains achievable through outsourcing.

Once this happens, either inflation will reappear or, in the unlikely event that money creation is held back to prevent inflation reappearing, the Western economies will decline and asset prices, in particular, will collapse. Probably both. In either case, the U.S. trade deficit will reverse, the dollar will decline sharply, U.S. consumers will start saving again and U.S. demand will go into a multi-year slowdown.

This may currently be happening. Long term bond yields have dropped unexpectedly in the past few months, signaling a sharp slowdown in domestic demand. While factory output remains buoyant, retail sales are weak. Labor productivity had been propped up by cheap money which has produced capital investment bubbles, first in tech then in housing, thus increasing the capital to labor ratio. Labor productivity growth has now fallen back sharply, as demonstrated by Friday's employment figures, which showed good jobs growth in an economy that is barely expanding.

Far from a "soft landing" the U.S. economy appears to be about to dive headfirst below the water, only to emerge after several years of negative growth and high unemployment. The Japanese malaise of the 1990s (but probably not the Great Depression) will thus repeat itself in the United States, albeit with a different pattern, as asset values return to normal.

And what of Fannie Mae? It has enjoyed 25 years of declining interest rates, which have boosted house prices (thereby reducing loan defaults), while allowing it to benefit from borrowing cheap short term money and investing in long term home mortgages. Analysts and its own management therefore forecast its future by extrapolating its past, assuming continuation of the exceptionally favorable environment it has enjoyed.

That environment is about to become much darker -- house prices will decline and long term interest rates will rise. The result will be far greater loan losses than Fannie Mae is used to, "gapping" losses between old low mortgage yields and suddenly more expensive funding and a sudden lengthening in the maturity of its mortgage portfolio, as consumers stop refinancing. That in turn will cause Fannie's derivative portfolio to stop working as a hedge again � just when they thought they had got it in order. The savings and loan industry went bust in the 1970s because of rising interest rates; Fannie Mae will have to show unanticipated bursts of management intelligence and good luck to avoid that industry's fate.

Watch Fannie Mae's 2005 and 2006 results, if and when it produces any. If they are unexpectedly poor, you will know that the world has changed � Fannie Mae, in this case, can act as the canary in the US economic coal mine, telling you when the air has become un-breathable.

If Fannie's auditors don't move fast, however, economic asphyxiation will have arrived in other sectors before Fannie can report its distress. That would be a pity. Fannie Mae would otherwise for the first time in its existence have served a genuinely useful purpose.
Goldilox
Zinc supplies are quietly running out
http://www.marketwatch.com/news/story/zinc-supplies-quietly-running-out/story.aspx?guid=%7B665D425C%2D2280%2D42D8%2D9BDC%2D78FDB342005E%7Dsnip:

Spot prices for high-grade zinc have more than tripled on the London Metal Exchange in the last two years -- and the price rally won't likely end soon with demand for the industrial metal far outpacing supplies, analysts said.

After many years of languishing at low levels caused by abundant supplies, spot prices for high-grade zinc climbed to over $4,400 per metric ton as of Wednesday on the LME -- up almost 270% from 2004's levels.
That's quite a change for the metal that's mostly used to coat steel and to act as a rust inhibitor.

"Zinc has been perhaps the worst investment in major metals during the past several decades, which has resulted in significant underinvestment in exploration," said Dr. Harlan Meade, president and chief executive officer of both Pacifica Resources Ltd. and Yukon Zinc Corp.

"The addition of several large mines in the mid 1990s simply flooded the market with zinc," he said.

New zinc output, in part, was made possible because of byproduct credits such as copper and silver that sometimes provided enough added revenue to offset zinc prices that really weren't high enough to encourage exploration or development, he said.

Now the zinc market faces a supply deficit, "caused by the depletion of many of our large mines," Meade said.

Exacerbating the problem, China, "who dumped zinc on the market during the 1980s and 1990s, became a net importer of the metal in 2003 as the country's consumption took off," he said.

-Goldilox

Maybe the Treasury read this report before issuing their latest coinage rules?
Goldilox
Black & Decker warns, citing housing pressure
http://www.marketwatch.com/News/Story/black--decker-falls-earnings/story.aspx?guid=%7B63AFEE85%2DB54E%2D435A%2D8EF0%2D547C83F6EDC3%7Dsnip:

SAN FRANCISCO (MarketWatch) - Black & Decker shares plunged as much as 10% Friday after the tool maker said a slowdown in the housing market and weakening demand for discretionary goods will pose stiff headwinds in the coming year.

"Considering this environment, ongoing commodity cost pressure and the strong results we posted in early 2006, we face significant challenges in the first half of 2007," said Chairman and CEO Nolan Archibald in a statement
In midday trading, shares of the Towson, Md.-based company were down $7.79 at $79.13, sitting out an advance in the broader market.

Black & Decker, which makes Price Pfister faucets, Kwikset locks and DeWalt drills, also cut its fourth-quarter earnings forecast to $1.30 to $1.35 a share and slashed its full-year profit outlook to about $6.50 a share.

Analysts polled by Thomson First Call had been looking for earnings of $1.86 a share in the fourth quarter and $7.01 a share for 2006. The company also said it expects to see a sales decline of about 8% for the fourth quarter.

"The demand environment has weakened compared to recent quarters," Archibald said. "In addition, orders from key retailers have decreased much more sharply than sell-through. Therefore, our U.S. sales have been significantly lower than we anticipated."

Goldilox

Keep your FEDDIE, FANNIE, and FREDDIE numbers. This one story tells me what I need to know about housing and construction.
Sundeck
Paulson's and Bernanke's hot wash-up
http://www.nytimes.com/2006/12/16/business/worldbusiness/16trade.html?_r=1&th&emc=th∨ef=sloginThis summary in the NYT is one of the better assessments of outcomes from Hank's and Ben's journey to the east (in my view)...

I think the Chinese will permit the yuan to appreciate more rapidly, but it is probably going to take several years to turn the trade balance issue around...but that is probably ok, so long as no-one panics...

:-)
contrarian
Wanka--the Real Deal or No?
http://www.worldreports.org/newsI was initially skeptical about this Wanta stuff, but some of it is starting to ring true, especially about the Bank of America being insolvent. I do know that Bank of America last month merged with MBNA, and mergers mean financial problems for one or both parties, so if Bank of America is now wanting to merge with Barclays, and the BOA's CFO resigned last week...they must be in desperate straits.

This is from www.lemetropolecafe.com, which is a fee-based subscription site.

And the link above is the original source of all the Wanka stuff.

"Last evening I had the pleasure of dining with the smartest hedge fund manager I know and a very successful fund manager. After we chewed over the gold and stock markets, the conversation drifted into the Leo Wanta stuff. BOTH believe it is real and so is he. One of them knows a fellow named Christopher Story. It stunned me a bit to receive the following when I returned home after dinner:

Hi Bill.......From various commentary on your boards, I know this Wanta matter can be hard to wrap ones hands around. However, I just received this e-mail from Christopher Story over at World Reports. He's in the U.S. now and has allowed this information to be released. This is just an FYI, but if this scenario plays out as expected, I think we will be able to finally understand the fact that the story is real.
Best,
Rich �

Very quick initial response (as I am about to go out and get some split pea soup: I'm in the US!). Unfortunately there has been a slanging match in China and Paulson has antagonised them (as we expected). There have been promises of payment by 5.00 pm EST tomorrow but the LW/MC high-lervel UST contacts in Peking have indicated that these fools are not going to yield. So the trouble will start immediately, with the $ going down and down and the derivatives assets being turned into dust. Cottrell states that the Europeans have had enough and will be responding immediately. He also passed word via high-level US Treasury associates that Paulson must call him personally tomorrow and release the funds, or LW/MC will OWN Goldman Sachs. I am standing by for a new briefing and of course there is always the possibility that they will come to their senses tomorrow but our assumption is that they will not. The ONLY good money is the $4.5 T plus interest. The above information is about 50 minutes old, and comes from MC. (We KNOW that the $4.5T is there because a UST expert coded the CHIP in question and knows the code: it is in place).

Bear in mind also that Basle II requires all the European banks to comply with SOURCE AND USE OF FUNDS norms effective 1 Jan 2007, and that the new electronic settlement system is to be TRANSPARENT (already up and running in Europe) so that the game is over. It transpires that the stolen Wanta $27.5 T has been used to support the banks with the collaboration of the crooks. MC has now ordered these funds to be called, effective this evening. Lawyers have been activated and the banks' worst nightmare is about to unfold. It is likely that there will be high-level changes so that the obtuseness at the top is reversed, otherwise we are entering an unprecedented crisis. The banks will ditch the dollar in an attempt to save themselves, another factor.

The IMMEDIATE choice is: an orderly rearrangement of the global financial system, as planned (Wanta Settlement) or a disorderly meltdown (no Settlement and meltdown, with the derivatives assets going to zero). You may reproduce this and quote me, as this all comes from the horse's mouth. If Paulson calls and fixes it tomorrow, fine. But the slide will already have started, I understand. More later! Best, CS.

Bill,
FYI, I read some more of Christopher Story's writings. http://www.worldreports.org/news. He is either the luckiest and most imaginative writer since the woman who stayed alive by telling stories in 1001 Arabian Nights, or as I believe he knows his stuff. The Paulson/Bernake trip to China fits right in. His articles in early September predicted an imminent dollar slide. His reasons for this is that the European banks want the Wanta deal (4.5 trillion) to go thru because if it does not then they may be exposed for their part in pilfering the other 27.5 trillion. China wants it to go thru because a healthy U.S. is in their interests plus they are owed other monies by U.S. Hence because of frustration with U.S. gangsters they are teaming up on the dollar. Then in CS's December 7, 2006 article he wrote that Bank of America and Wachovia are insolvent and just had emergency talks about a merger. As significant proof that this is accurate, the UK Times penned this article http://business.timesonline.co.uk/article/0,,9063-2494766,00.html. . on September 9 that BoA is considering a takeover of Barclays (60 Billion pounds sterling) and that BoA's chief financial officer resigned last week. I am not a paying subscriber to his newsletters but he just sent a 400 page plus volume to his subscribers who pay big bucks for his knowledge. He also has descriptions of who created the 27.5 trillion in the late 80's, who bought it, and the interest rates. Barclays was one of the issuers. The bonds were written for 20 years and come due soon. I don't know what would motivate someone to do so much work, except that he believes he is doing good."

Lackluster
Willy Wanta
I was initially skeptical about this Wanta stuff, and still am!
Goldilox
Wanta story
@ Contrarian, Lackluster,

Sounds like the makings of a plot for "Swordfish II, Bait and Hook".

Someone better call John Travolta, now that he's done with "Wild Hogs".
Druid
Goldilox (12/16/06; 09:45:49MT - usagold.com msg#: 150276)

Druid: I still think there is more to this Wanta story then what the gold community at large may not want to embrace. Why would the Treasury issue a report restating a much more dire predicament involving government finances at a time the boss is over in China trying to make lemonade from lemons? Me thinks there is some infighting over at Treasury.
Liberty Head
Enter the amero
There is an economic corollary to Einstein's theory.
Fiat can be substituted for light since it behaves like a particle and like a wave.
A powerful vacuum is already in place, the result of a planet largely divided between socialists and fascists, both devoid of any substance.

Energy = Mass x (speed of fiat in a vacuum) squared


In the global fiat wars, he who has the most mass prevails.
Like it or not, the amero is going to replace the dollar very soon.
It will be a slam-dunk to sell the amero to the idiot masses after some type of big crash.


Stay out of debt.
Hold the precious.
Stay out of the way of idiot drivers talking on their cell phone.
Ten Bears
History rhymes: Gold, invasions, and new starts
Some southerners in the nineteenth century had the foresight to hold a sufficient amount of sound money (gold) to make a new start in western states after the northern invasion.

Following the war the confederate money became valueless, southerners lands were overrun by carpetbaggers, and the occupation government passed laws confiscating their property.

The reconstruction government in Washington was not at all sympathetic to the plight of southern citizens. After all, those who advocated a "new order� of an all powerful central government had prevailed, and to the victors go the spoils.

Is the current situation really so dissimilar? Financial capitalist have created a �new order� based on slave labor arbitrage, rapidly expanding ,and depreciating debt fiat, and an invasion of millions of poor laborers across the southern US border.

The current Washington government is not at all sympathetic to the plight of the majority of US citizens. After all their allegiance is to those with the money creation franchise and their cohorts whose �contributions� pay for the elections. Plans are for a feudal system (corporate controlled) for all of North America.

Enough gold for a new start was a very good idea in the nineteenth century, and it is a very good idea now. However it is now more difficult to find an appropriate place to go since the new world order aspires to be all encompassing.

The above is based on discussions with a member of a prosperous southwest family whose founders moved west after the "war of northern aggression".
Topaz
Gold:Silver.
http://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339The poor old Au:Ag ratio chart @ StockCharts just can't seem to bring itself to update given Aggies dismal display friday.
Quick math has it currently at 48 however the glaring point is that RSI again proved an efficient tell-tale.
I was caught with the "this time it's different" mentality and suffered the consequences although it brings to mind how much this modern world, with it's black-box trading programs are more inclined to a herd mentality than ever before.

That, or "management" has some serious issues dead ahead with Aggie!

Let it be the latter God ...just this once!
Goldilox
Stealing The Internet
http://urbansurvival.com/week.htmsnip:

There goes the internet. At least that's what some reports would make it appear. The word is that John McCain has introduced a bill which would fine internet users up to $300,000 for offensive statements, photos, and videos posted on discussion groups.
---
I've been saying for a long time (years) that as the unsustainable economics of the planet become readily apparent to governments, there will be an obvious need for regulation of, if not the outright shut down of the internet. Constitutionally free people don't put up with government crap in unending measures without some darn good reasons.

I think what we will see will not be a single sweeping attack on the net, but rather a slow "
gradualist" attack which will first take rights from those least able to defend them and then scale on to the rest of us.

The McCain bill, co-sponsored by Charles Shumer of NY, supposedly is aimed at the posting of kiddie porn on sites like MySpace and other social networking sites. But, as the Washington Post notes today:
"About a fifth of MySpace.com's users are under 18. But apart from anecdotal accounts, there is no evidence -- no studies, no statistics, nothing but inference -- to show that many of the loathsome predators who have victimized children and young people online are convicted sex offenders. "
McCain and Shumer are off dangerously grandstanding on this one. We already have rules and regulations about child porn on the internet - and perhaps enforcement of existing laws is needed before the corporatist agenda to "own the internet" gets too far advanced.
---
What's curious above all, though, is not that McCain and Shumer want big headlines on net regulation; they're politicians, after all.

But please notice the timing on this one: The FCC Agenda for its meeting next Wednesday is out and is does not have the AT&T-Bellsouth merger on it. What does this have to do with the internet? The Information Week article tells us that: "Much of the resistance [to the merger] centers on the issue of net neutrality in which AT&T and other broadband providers seek to levy additional Internet charges according to bandwidth consumption. In recent weeks, AT&T has indicated it will make some concessions to reduce the impact of any net neutrality concerns. "

Now, whether there's deliberate orchestration, or this is just how chaotic systems operate is open to discussion. However, the timing is just damn curious.

What do I think will happen? Frankly, nothing would surprise me less than for the FCC to make a last-minute addition to its agenda - putting the AT&T-Bellsouth merger back on the agenda. That'd be right in line with the FCC's role lately in promoting the corporatist agenda of taxing or tariffing anything that can add a few cents to corporate bottom lines. Care to bet on a last minute agenda change to keep those pesky public interest groups off balance?

-Goldilox

Internet regulation stands to give big corp interests a larger share of "control" than they already have. Pay extra for needed bandwidth, etc. Change is definitely in the air. I'm often confounded by the fact that it is "illegal" to spam potential customers with unsolicited ads, but my postal box is stuffed with them daily, to the tune of about a pound or two of junk mail advertising.
Thoreauly
Freudian gold

Funny how the unconscious works. Take the cover of Fortune magazine's "Investor's Guide 2007." While it touts 30 hot stock and mutual funds, still-rising real estate markets, offers tax tips and get-rich rules, it makes no mention of that which it uses for the cover's backdrop.

You guessed it: gleaming bars of gold.
USAGOLD / Centennial Precious Metals, Inc.
THREE shops, ONE convenient shopping experience!
Goldilox
Vaccuum
@ Liberty Head,

"A powerful vacuum is already in place, the result of a planet largely divided between socialists and fascists, both devoid of any substance."

Sadder still, the endless "whizzing in the wind" about which is better for the "people".

A friend who passed away recently described them both as the type who's greatest thrill in life is to rise, head for their morning mirror session, and sigh, "Ah, ME!" - all while masquerading as caring about "the people".

Wilhelm Reich, in his book "The Mass Psychology of Fascism", was less kind, but it cost him an oft-questioned death in a US prison during the McCarthy era.
TownCrier
How Dangerous is the Dollar Drop?
http://www.spiegel.de/international/spiegel/0%2C1518%2C453906%2C00.htmlSPIEGEL Magazine (snips) --

Experts have been predicting for some time that the dollar would eventually go into a nosedive, and now that time seems to have come. The US currency has lost five percent of its value against the euro since late October, and 13 percent since the beginning of the year. The euro is currently fluctuating around a value of $1.33, which is only 3 cents away from its all-time high in 2004. And yet Trichet's counterpart Ben Bernanke, the chairman of the US Federal Reserve, has done nothing but look on as the dollar plunges.

A sea change appears to be taking place on the international financial markets. For years, global capital flowed in only one direction, with $2 billion going into the United States every day. Investors viewed the world's largest economy not only as a bastion of stability, but also as a place that promised the best deals, the most lucrative returns and the highest growth rates.

The Americans, for their part, welcomed foreign investment. For them, it was almost a tradition to save very little and spend more than they earned -- essentially achieving affluence on credit.

Because the US government was unable to fall back on the savings of its citizens, it too was forced to finance its budget deficit with foreign capital. Both consumer spending and the federal deficit kept the dollar high, because the rest of the world was practically scrambling to invest in the United States.

This phase seems to have come to an end...

Investors worldwide are becoming sceptical and starting to pull their money out of the United States. They have realized that a people and a country cannot live beyond their means in the long term.
...
Pessimists are quick to come out of the woodwork whenever a major shift in the financial markets approaches. Many economists and bank analysts, especially in the United States, believe that the correction will happen very suddenly, with the dollar depreciating by 10 to 30 percent within a short period of time.

This would inevitably cause an adjustment crisis. Growth rates would plunge worldwide and a global recession, coupled with a drastic jump in unemployment, could follow.

This doomsday scenario is by no means the majority view. Some experts, especially in Germany, are more optimistic. ......the dollar zone is no longer as important for German exports as it was only a few decades ago. Leaving aside exceptions such as the auto industry, other regions of the world have long since become more important to the German economy than the United States, where Germany now sells less than one-tenth of its exports. Germany exports more than 40 percent of its goods and services to other countries within the euro zone, 13 percent to eastern Europe and nine percent to Asia. The turbulence surrounding the dollar has had virtually no effect on German exports to neighboring European countries. Most of the EU's new members have tied their currencies to the euro, and exchange rate risks evaporated for western Europe with the introduction of the euro.

The consequences of a declining dollar for the German and European economy will be determined in large part by the way other currencies develop relative to the dollar. "It would be fatal if only the euro were to rise," says DIW analyst Steinherr. "Then it would only be the euro zone that would have to bear the burden of adjustment." But the foreign currency markets suggest a different development, as the dollar is also losing value in relation to other important currencies.

...Gone are the days when an American finance minister could boast: "The dollar is our currency, but it's your problem."

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

Thanks for the link, G.

R.
melda laure
Cryptocracy
@ Signior Ten Bears

neo-feudalism, how quaint.
melda laure
Christmas Goblins.
@ Liberty Head.

Money and special relativity? What about general relativity? Does the einstein-cartan-evans theory have an analogue in finance? We wonders, yes?

As David Hilbert pointed out, conservation of energy is a bit dodgy in general relativity. Conservation of credit, on the other hand, is a complete farce: thus if the dollar seems to float in defiance of all known laws of physics then perhaps it is because our model is just not sufficiently advanced to explain the shennanigans in rigorous fashion.

If every electron in the universe is a "free engergy" machine curving its local spacetime, then similarly: every fiat dollar on the FED's books is a "free money" machine sucking the Precious Bodily Fluids of the body politic.

Or something like that, though it is not the season for garlic and oak stakes.
Goldilox
New monetary physics?
@melda laure,

Perhaps the new monetary physicists will also have to rely on "Heaviside" approximations, if the dollar issues reach more "gravitic" proportions.
melda laure
the Electrogravitic "relativivity" Bond Market Conundrum
http://www.financialsense.com/editorials/fekete/2006/1214.html"I think most commentators on the bond market got it wrong...What then is the explanation of the mystery? It is the $400 quadrillion derivatives market growing exponentially. That's what. It represents a latent demand for new bonds, unlimited quantities of it, so that the game of musical chairs could go on and on..."


Dr Feteke seems to think the derivatives are the new interventionist "man behind the curtain" though calling it "latent demand" is a bit of a euphemism. Dr North over at LRC.com had a similar piece where he basically said that gold will go nowhere fast for at least a few years more- so at least we'll be able to collect samples of all the first ladies that US mint is supposedly about to strike.


"Although they will be able to limit the rise in the gold price, the powers-that-be will not be able to limit the rise in its volatilility. Gyrations of gold will assume galactic dimensions..."


Volatilility? Hmmm, sounds like trying to figure out who's in charge in Baghdad, as once the pressure is too high to be contained by price alone, it must be contained by more coercive medicines: galactic indeed, they'll need Aule's angainor (aka "iron chain of the gods") to wrangle the hubble constant.

A golden chain is just unthinkable... for now.
tejbear
TownCrier #: 150233
Thanks for the come back.

You wrote: "You would have to be impressed with gold's "returns" from $20 to $640 (3200% climb) versus silver's lackluster returns from $1 to $14 (1400% climb)." The differential in the returns is significant. However, I would suggest that there is a reason for this difference. If you watch the Money Masters video, there is a section were they review a central banker's strategy to consolidate their control of the US currency by debasing and eliminating silver as money. The problem with silver was that it could be mined and coined legally, outside the control of the central bankers. To eliminate this threat from silver, the Money Masters "makers" assert that the central bankers, after consolidating their control of printing the dollars, began an earnest campaign to debasing and eliminating silver as currency in the US. Regional mints could no longer coin locally supplied silver. And yet, silver is defined in the constitution as "three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver" in the Coinage Act of 1792. Even funnier: Section 19 of the Coinage Act prescribes the death penalty for anyone who debases the value of the dollar. Unfortunately, the list of people who quality for the death penalty is now so large, and of the many principals have already died, that it is useless.

So, if the Money Masters "makers" are correct, today's differential in returns from 1900 between gold and silver is a product of a successful spin and manipulation.

As for today's industrial over monetary uses of silver, when the dollar collapses, I think most Americans will remember that silver is money. Yes, gold WILL sky rocket in value. But as gold is scarce, it will probably be unavailable to most people. This is when silver also skyrockets in value.

As for the debasement of the dollar, it is unavoidable. Sorry TownCrier, I appreciate your points, but I still think that it is wiser to have gold and silver.

The Bear
mikal
Goldilox- "Stealing the internet"
http://www.freemarketnews.com/WorldNews.asp?nid=29274 Good post. Alex Jones site has a short piece on McCain and Internet1 and 2 prospects. What's next?
McCain Prepares 'Lethal Internet Injection' | Prison Planet
mikal
Headline for Fox news in Year 2016
http://www.domain-b.com/economy/general/2006/20061216_upgrade.htmIndia, Japan to Upgrade Economic and Political Ties
domain-B | Indian business | The Information Company
December 16, 2006
These giants just signed major agreements in the economic, political and defense areas". The timing is notable. A summit will be held soon. Japanese plan investment and partnering in infrastructure, energy plants etc in India whose labor force can supplant Japan's shrinking population. The competitive advantage of Asia
in the world markets for cars, appliances is well known by many western firms who have there, plants and in some cases headquarters.
I saw some shirts on sale at Sears this week from another developing country- Cambodia. I was wearing a coat made in Vietnam, cargos from Russia, underwear from El Salvador and a tee shirt from Jamaica, mostly brand names.
Druid
Report - China To Dump One Trillion In US Reserves
http://www.rense.com/general74/report.htm"Chinese tell visiting Bush administration officials they will not sit back
and lose their shirts as U.S. Dollar collapses; they are getting out fast and large.
HalTurnerShow.com
12-15-6


BEIJING -- Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China's Currency Reserves and convert those funds into Euros, gold and silver!

China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.

According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:

1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.

2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.

3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.

For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts."

Early this week, in an unusual move, the Bush administration sent virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.

The Bush administration wanted to get China's cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.

According to the source, Fed Chairman Bernanke left the meeting "pale and in a cold sweat" as the implications of China's decision seemed to sink in.

The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.

This would cause a worldwide sell-off of dollars, create almost immediate "hyper-inflation" in the US and also impact world markets at a level "worse than the Great Depression of 1929.""


Druid: It's getting crazy out there. Interesting read.

Goldilox
War and other abuse victims
While one can appreciate McCain's "release" from enemy incarceration, it's a mystery why someone who "so dearly loved freedom" adopts anti-free stances in every single issue, be it the Internet, the CANAMEX highway, or sending 30,000 more invaders to Iraq to enforce "democracy" with deadly depleted Uranium shells and their multi-generational carcinogenic sentence.

Psychiatrists who study cycles of abuse report that it becomes "natural" for victims to perpetuate the inhumanity of their experience on their own victims in turn, and feel it is perfectly acceptible. Until that cycle is therapeutically broken, it "visits the sins of the fathers upon multiple generations", as so aptly described in ancient writings.

Sadly, this may be why generation after generation must repeatedly force the horrors of war on their own children, lest they forget how to continue that cycle of abuse / control. While VA doctors struggle to help those whose psyche is shattered by war, no attempt is ever made to address the "conqueror syndrome", and its toll on society in general.
melda laure
(No Subject)
That;s about the deepest wisdom uttered here in at least a year, maybe longer
contrarian
Dollar Dumping? Is the S Hitting the F?
http://www.gold-eagle.com/cgi-bin/gn/get/forum.htmlThere is now talk on Gold-Eagle forum about this at this very moment. Have been following minute by minute. I don't think both Paulson and Bernanke went there together for nothing. This is unprecedented them going over there together. It reeks of last minute desperation.

They must have been called to the carpet before the S hits the F. And Hank the Hammer (as he is known) may have overplayed his hand. I think I believe this. This seems to ring true. Euro 2020 said the crisis phase began in November, and the Web bots (www.urbansurvival.com) dhave been predicting some sort of shock I think.

It may be the vindication we've all dreamed of. I have to say the people who are on this board are up to snuff, as I thought I was going to be the first to post these rumors, but was preempted!
contrarian
The Danger of Weekends
http://www.gold-eagle.com/cgi-bin/gn/get/forum.htmlYou know, I've warned on this forum before (several months ago), that usually the S hits the F on weekends when it comes to banks. Come Monday, you'll discover banks closed and safety deposit boxes sealed. So it's actually not surprising that the S may very well be hitting the F as we speak--literally NOW, so as to give the banksters adequate forwarning to prepare to close down and prevent a run on deposits come Monday.

This was a post from Gold-Eagle:
"I just received an e-mail with the following newmax
link. I have not been able to read it.
http://www.newsmax.com/money/signup.cfm?goto=/money/archives/st/2006/12/4/92238.cfm&PROMO_CODE=0&s=st

Same e-mail had a photo: (no link)
Folks at New Jersey Bank before it opened at 9:00 AM
today

Word is spreading rapidly about potential collapse of
U.S. Dollar as early as Monday. This was the scene
outside one NJ Bank just minutes before it opened today
(Saturday, December 16, 2006). Word in the crowd was
that they wanted to make certain they have eneough cash
if things get rough next week and banks are ordered to
close!!!!"
contrarian
BREAKING NEWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
http://www.halturnershow.com/index.htmlAssuming this is true, better load up ASAP

"Published December 16, 2006 11:13 AM EST

*** BREAKING NEWS ***
OPEC ANNOUNCES IT WILL ABANDON U.S. DOLLAR!
EVENTS MOVING WITH STUNNING SPEED AFTER CHINA SAYS IT WILL DUMP ONE TRILLION IN U.S. CASH RESERVES!
OPEC is worried by a fall in the dollar that is eroding member states' oil revenue and ministers will take up the issue when they meet next week to discuss new output curbs.

Last week, the dollar hit a 20-month low against the euro - a bonus for non-dollar oil consumers but a threat to producers.
Click Here


Comments so far on this story (28)




Published December 16, 2006 11:01 AM EST

*** BREAKING NEWS ***
BANKS "CAPPING" WITHDRAWALS AT $1,000 MAX!!
REPORTS COMING IN THAT PEOPLE ON LINE FOR AN HOUR; TOLD THEY COULD ONLY WITHDRAW ONE THOUSAND DOLLARS!
Word of a possible collapse of the U.S. Dollar has apparently spread far enough and fast enough that the banking industry is reportedly LIMITING the amount a person can withdraw! More details as they become available.


Comments so far on this story (19)




Published December 16, 2006 10:31 AM EST

*** BREAKING NEWS ***
U.S. CONGRESS MOVES TO LABEL CHINA "CURRENCY MANIPULATOR"!
FURY AND FEAR IN WASHINGTON OVER CHINA SELL-OFF OF ONE TRILLION IN U.S. DOLLAR CASH RESERVES!
Fallout from failed meetings in Beijing is already becoming heated just hours after news broke that China intends to sell-off One Trillion of its U.S. Dollar cash reserves. Senator Charles Schumer from New York is already publicly calling for China to be declared a "currency manipulator" as events unfold threatening the collpase of the U.S. dollar as a currency.
Click Here


Comments so far on this story (11)




Published December 16, 2006 9:53 AM EST

PEOPLE LINING UP AT BANKS TO WITHDRAW MONEY FEARING DOLLAR COLLAPSE!

Folks at New Jersey Bank before it opened at 9:00 AM today
Word is spreading rapidly about potential collapse of U.S. Dollar as early as Monday. This was the scene outside one NJ Bank just minutes before it opened today (Saturday, December 16, 2006). Word in the crowd was that they wanted to make certain they have eneough cash if things get rough next week and banks are ordered to close!!!!


Comments so far on this story (20)




Published December 15, 2006 7:27 PM EST

CHINA TO DUMP ONE TRILLION IN U.S. DOLLAR CURRENCY RESERVES!!!!
Tells Visiting Bush administration officials they will not sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large!!!!!!
China withheld their announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices; Want to give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction!!!

UPDATES AVAILABLE as of 9:18 AM EST Saturday, Dec. 16, 2007
* Washington Post story on Currency Clash with China

* Other Sources in Treasury & Commerce Depts, Pentagon, weigh-in

* Congress Threatens to Declare China "Currency Manipulator"

contrarian
EVENTS
I think the Wanka story may be for real, I think the outlawing of export of nickels and pennies is real (which it is), I think the post Thanksgiving day dollar drop was a watershed, I think events in the post below are happening, and finally that events are rapidly spinning out of control.

There was something in the Wanka story that claimed that the Chinese were giving Hanky Panky an ultimatum this trip--something about the 3.7 trillion interest they were owed through Wanka (Goldman Sachs being involved in this or course)--and that he didn't give them the answer they wanted, and so now we have this. They must have been furious with Hanky Panky, even more so given that he's former CEO of Goldman, so they're dealing directly with the perpetrator, who now, as US emissary, takes the body blow.

Perhaps they see Goldman=US Government and feel perfectly justified in collapsing the dollar. How could they not? Apparently I remember reading (on LeMetropole Cafe) that a few months back the introductory meetings of Paulson and his Treasury team with the Chinese in China did not go so well. He's apparently hired scads of Goldman employees onto his Treasury team, and the Chinese looked at this with a jaundiced eye, that the whole charade of the US Treasury team seemed like some sort of Goldman corporate conference. So their kicking him to the curb this weekend, giving him the finger and the boot, does not entirely seem surprising--sort of like killing two birds with one stone.

It's starting to make some sense. The Wanka thing may have been the catalyst. Apparently the guy at worldreports.org may have the real deal. He supposedly predicted the upcoming dollar drop this September.
Toolie
Re: Breaking News
FWIW, I poked around the discussion form on the site that originated (as best I can tell) those sorties about; people lining up at banks, China and OPEC dropping the dollar. In my opinion, the originator of those is playing on some ***loosely wrapped*** people. Aryan superiority seems to be the common thread.

On the bright side, gold is still a great place to put your savings, even if the neighborhood is going to hell.

Anyway, thanks for the heads-up contrarian.
White Rose
I'm blowing the whistle on this crazy discussion
STOP!!!

Lets think about this.

1) Hal Turner is a rasist nutcase. Do a Google search. He has organized anti-black rallies. He has threatened the lives of "half of the US Congress".

2) Hal Turner claims that as a consequence of this "financial crisis" banks are limiting withdrawls to only $1000 per day. It turns out that lots of banks already have that as a daily limit on how much cash you can take out in a day.

3) There is no story here. Period.

4) What is the Wanta story? That there is a mysterious pile of money somewhere that is so vast as to make bankers faint? My own opinion is that it is a dark mirror to the vast pile of derivatives that drive the marketplace. As I have said in this forum last week, I believe that derivatives are vast multi-trillion dollar bets with phoney money used to alter the behavior of the marketplace.

5) So ... what if some players, frustrated by this wall of phoney money are inventing a story about vast **real money** to mock the derivative players. It is a way of saying (to a high school poker game) "so ... Goldman Sacks .. you just bet a million dollars ... OK, and I raise you a nickel"

6) I will wager that what ever truth there is about the Wanta story is that the dollar sums that need to "make the system work" are so large that they cannot ever be used on real things. This is precisely the argument to buy gold.

7) Yes, we will watch the dollar exchange rate on Sunday night (US time) and Monday morning. My guess is that nothing unusual will happen on Monday ... even though the arumor is that Ben B. is turning pale in China.

8) Prez Bush is about to send 50,000 to 70,000 more troops to Bahgdad so that they can occupy the difficult neighborhoods and declare victory. Meanwhile they are large scale mutinies of our troops already in Iraq. This is the real story we should be watching this weekend.

9) Have a good weekend.
Goldilox
Whistle blower
@ White Rose,

Hal Turner's purported racist tendencies have nothing to do with the story itself when many other reporting vehicles have been mentioning it for well over a year. The question a researcher needs to ask is not "Is he a racist", but "Is the story verifiable"?

It's easy to assume that because someone has certain questionable agendas that every word they publish is wrong, but in reality, it is rarely the case. The opposite is also true. Someone with "impeccable social credentials" is also subject to getting their facts completely wrong. Such is the nature of the information and disinformation game.

Principles before personalities is a much healthier practice.

I have been hearing and reading the Wanta story for quite a while and suspect it has taken on a life of its own by now. But while many reported facts may be completely garbled, from the Mena Drug/Arms trade to Capital Cities to ENRON, there is ample evidence that the shadow government has its financial hooks in much of "private enterprise", both legal and illicit.

Sorting out the blurred lines of distinction between fact and rumor takes a lot more work than deciding one of the reporters is "racist" and dismissing all evidence on that basis.
Goldilox
Bank of China Buys Aircraft Lessor for $965 Million
http://quote.bloomberg.com/apps/news?pid=20601080&sid=aJioQSSiqfWg&refer=asiasnip:

Dec. 15 (Bloomberg) -- Bank of China Ltd., the nation's second-biggest bank, said it will buy all shares of Singapore Aircraft Leasing Enterprise for $965 million, the first major acquisition made by a state-owned Chinese bank.

The Beijing-based bank will buy 100 percent of Asia's largest plane lessor from the existing shareholders and assume $2.28 billion of debt, according to its press release today. The price represents 1.8 times to the company's equity value of $535 million as of Sept. 30.

China's commercial airline fleet flew 133 million people, more than the population of Japan, in the first 10 months of this year and will probably more than triple in size to 3,900 planes in the next two decades, according to Boeing Co. Leasing aircraft lets airlines expand and replace aging planes quicker with less of their own money.

"In the long run, there must be some sort of aircraft leasing company to serve the country's demand,'' said Winson Fong, who helps manage about $2.3 billion of assets at SG Asset Management in Singapore. "Aircraft leasing will grow along with the fleet expansion in China.''

Bank of China said the acquisition is part of its strategy to diversify into non-interest income, and will provide a platform for it to expand into aircraft leasing. The lender will also get cross-selling opportunities with airline companies.

"Bank of China will leverage on its global client resources and institutional network in China and overseas to support Singapore Aircraft's global business development, and particularly in the Chinese aviation sector,'' the bank said.

-Goldilox

While we've long known that China wants to diversify assets, here is a major acquisition NOT being blocked by a foreign government, as they are nearly doubling the current market cap for the privilege.
Goldilox
My error
@ White Rose,

After re-reading your post, I now realize you were talking about the bank run story, not the Wanta mess. My apologies for the mistake. I would certainly want to see more evidence of this assertion before buying into it, as well.
otish mountain
Barrick moving into copper?
http://www.theglobeandmail.com/servlet/story/RTGAM.20061215.wbarrick1215/BNStory/BusinessOur favorite miner now is rumored to be bidding for Freeport McMoRan whose major asset is copper.
Ofcourse we are made aware that there is a gold component as well.

Maybe they plan on doing to copper what they have done to gold with their forward selling. Get the value of the penny back to where it belongs.
Druid
China nixes US calls to fluctuate yuan
http://www.bruneitimes.com.bn/details.php?shape_ID=14174"P Parameswaran

NEW YORK


17-Dec-06

THE US government has come under new pressure to take stern action against China after failing to win firm assurance from Beijing on revaluing its currency.

The first high-level economic dialogue between the two powers in Beijing ended on Friday with China refusing to budge on American demands that it allow its currency to appreciate.

This has led to calls in Washington for punitive action, including branding China a "currency manipulator" that could lead to possible sanctions against the Asian powerhouse.

"I think they should start with declaring China as a currency manipulator in the US Treasury report to Congress," Morris Goldstein, a former senior official at the International Monetary Fund (IMF), told AFP.

"We keep constantly saying this is a problem and in the end, they continue to say they couldn't do it. I just think that it is just ridiculous. The facts are clear and I think they would be better off calling a spade a spade."
"


Druid: Good read.
Druid
Balancing Act With Beijing
http://www.tuscaloosanews.com/apps/pbcs.dll/article?AID=/20061216/ZNYT01/612160369/1001/NEWS06"Lawmakers are unlikely to be satisfied with the inconclusive results Treasury Secretary Henry M. Paulson Jr. achieved in Beijing.
BEIJING, Dec. 15 � Treasury Secretary Henry M. Paulson Jr. went to China with a team of heavyweights, including an array of Bush administration cabinet members and the Federal Reserve chairman.

But he is returning home to a more critical audience that is unlikely to be satisfied with the inconclusive results he achieved in opening a new economic dialogue with Beijing.

The problem is that Mr. Paulson faces a growing number of lawmakers � and behind them powerful but divided business constituencies, along with a politically energized labor movement � who are not counseling patience right now, especially after an election where China-bashing was a bipartisan sport.
While no members of Congress were actually in Beijing, they might as well have been sitting at the rows of tables at the Great Hall of the People surrounded by red, gold and green d�cor and even more ornate rhetoric. The antitrade sentiment in Congress lurked over the meeting, and certainly was felt by the Chinese.

One sign that the American delegation was playing to an audience both here and at home came in the speech delivered by the Fed chairman, Ben S. Bernanke, on Friday to the Chinese Academy of Social Sciences, in which he made a strong case for China to let the value of its currency rise against the dollar.

Mr. Bernanke's advance text, replete with 22 footnotes, called China's undervalued currency an "effective subsidy" of exports. In the end, though, he omitted that term, taking a more diplomatic approach, possibly because the term might feed protectionist sentiments on Capitol Hill while ruffling more feathers among the Chinese."


Druid: Another good read.

Druid
US, China agree to tackle global imbalances
http://www.dailytimes.com.pk/default.asp?page=2006%5C12%5C17%5Cstory_17-12-2006_pg5_19"US, China agree to tackle global imbalances

BEIJING: China and the United States agreed on Friday that Beijing will pursue currency flexibility, while Washington will aim to increase national savings as part of joint efforts to reduce global economic imbalances.

Wrapping up two days of high-level talks with with Chinese leaders in Beijing that were part of an inaugural strategic economic dialogue, US Treasury Secretary Henry Paulson said his discussions had been "very frank and productive".

"The United States and China know that our economic relationship is best when it produces benefits for both our countries. And we know that balanced sustainable growth in China is vital to the strength of the global economy," Paulson said.

"We will each take measures to address global imbalances, notably through greater national savings in the United States and through increased domestic consumption and exchange rate flexibility in China, and maintaining open investment in both countries," he added.

Chinese Vice-Premier Wu Yi said the talks had been very successful and would help to boost bilateral trade and economic relations.

She said the two sides had not seen eye to eye on every issue, but that was understandable given the economic differences between China and America.

The two governments also pledged to explore how to boost bilateral investment and to ease travel restrictions.

They will also form working groups to discuss how to boost services trade and improve health care. The groups will report to the second session of the dialogue in Washington next May.

The agreements come as US lawmakers stepped up pressure for China to boost the value of its currency, expressing impatience at the idea of waiting for China to let the yuan's exchange rate float in the long term.

No punching bag: But China is not ready to be a punching bag. A day after Wu questioned Americans� "limited knowledge" of China's efforts to give market forces greater sway over the economy, the People's Daily, the official paper of the ruling Communist Party, said the United States had China to thank for a long period of low inflation."


Druid: Good luck.


Chris Powell
A Wall Street Christmas story
http://www.stltoday.com/stltoday/news/columnists.nsf/kevinhorrigan/story/C8B459C19A73BCC786257246000231AE?OpenDocumentBy Kevin Horrigan
St. Louis Post-Dispatch
Sunday, Dec. 17 2006

The child snuggled on my lap, the lights of the tree twinkling in her bright eyes. "Grandpa," she said, "tell me a Christmas story."

The one about the baby in the manger, the angels, and the shepherds?

"Not that one."

The one about the reindeer with the red nose?

"Borr-ring."

Then what story, child?

"The one about the investment bankers in New York who get their annual bonuses every year at Christmas time and buy yachts and BMWs and real estate."

It is her favorite story. It never grows old.

Once upon a time, in a place called Wall Street, in a city called New York, there lived several thousand men and women called investment bankers. They worked in tall buildings in fancy offices and spent their days yelling into the phone and staring into computers. Think of them as elves in expensive suits.

"What do they make?" she said. "Toys?"

No, they don't actually make anything. Making things is old economy. Some people make cars. Some people make beer. Some people make hamburgers. I make
paragraphs, as a wise man once said. But investment bankers don't make anything you can touch. They make deals.

"And money!" she laughed, bouncing on my lap. She knows the story by heart.

Yes. Lots and lots of money. And every year at this time, the investment banks count up all the deals they've made, and how much money they earned on each one, and they divide it among the elves who work there.

"Do all the elves get the same amount of money?"

Silly girl. You know how they divide the money.

"You eat what you kill!" she squealed.

Yes! That's just right! You eat what you kill. The bigshot elves who make the biggest deals get the mostest money. The medium shots get middle money. And the elves who do the typing and filing, they might get only 20 grand or so.

The elves spend all year long calling people up and trading money back and forth. They lay off risk with hedge funds. They help finance mergers and acquisitions. They buy Abu Dhabi bank notes with Brazilian reals. They buy seven-year LukOil non-convertibles in Euros and Ford Motor six-years.

They trade them to other people for credit derivatives and catch the float on Russian Aluminum construction debt on a plant in Kazakhstan. They buy T-bills and zero coupons for foreign banks and investment trusts.

"Is it hard work?" she asked. "Do their mommies and daddies help?"

No, they're all alone, except for their lawyers.

They work 70 hours a week, buying, buying, buying, selling, selling, selling. They get lots of stress.

They get ulcers, which are like sores inside their tummies. They take lots and lots of risk, because if a deal flops, they won't get so much money and might have to take a different job that doesn't pay so much money.

"But when it works," she teased, eager with anticipation. ...

When it works, it's a beautiful thing. And what's the best part?

"They do this with other people's money, and they don't make anything but deals!" she said, squirming with delight.

That's right. People who work for companies that actually make things might lose their jobs. Many other jobs might be sent overseas. Lots of little boys and girls whose mommies and daddies work for companies that get nuked in the deals won't get so many toys at Christmas. But what do we call that?

"The wisdom of the marketplace!" she giggled.

That's right. But (she loves this part) what happens to the boys and girls whose mommies and daddies work for investment banks? What happens to the boys and girls whose mommies and daddies sell yachts and Jaguars and $10 million condos to the investment bankers?

"They make out like bandits!" she chortled.

And what do we call that?

"Trickle-down economics!"

What a smart girl you are. What's your favorite investment bank?

"Goldman Sachs!"

Did you know Goldman Sachs set all kinds of records this year?

"Really?" Her eyes grew wide.

Quarterly profits were up 93 percent. Earnings per share were nearly double what they were last year.

"And last year was a record year!" she pointed out.

That's right, Honey. This year Goldman had revenue of $37.7 billion and profits of $9.5 billion, which is nearly $20 a share. And of that $37.7 billion in revenue, $16.5 billion goes for compensation, most of it in bonuses. That's $623,418 for each employee, if they shared it equally.

"Which they don't!" she said. "You eat what you kill, and the elves that kill the most, eat the most.

They don't make much in salary, maybe a lousy 300 K. But with bonuses. ...

"Maybe $50 million for a trader who hustles and books big profits," she said, counting on her chubby little fingers.

You are such a tricky kid, I said proudly. What do you want for Christmas?

"Forget Christmas," she said. "Just give me my bonus."
mikal
Intemperate money fabrication and lies
http://www.businessweek.com/magazine/content/06_52/b4015132.htm Inflation: Two Price Gauges That Hardly Look Tame
Business Week - December 17, 2006
Inflation gauges can be made to show some of the
excess price pressure bankers introduce, always sanitized
of all traces of origination.
The story here is about two politically correct
"price gauges". Custom made to order. To take the opposite side of the same political/financial agenda to satisfy naysayers scoffing at CPI and PPI.
The spin at the article end is to endorse the case
that the Fed is legitimate
and capably managing the economy- because they're NOT between a rock and a hard place if they can't lower rates right away- so says the two "price gauges"!
Chris Powell
Honest accounting would put U.S. budget deficit 81% higher
http://www.mercurynews.com/mld/mercurynews/business/financial_markets/16250846.htmBy Martin Crutsinger
Associated Press
via San Jose (Calif.) Mercury News
Friday, December 15, 2006

WASHINGTON -- The federal deficit for 2006 would have been 81 percent higher than the $247.7 billion that was reported two months ago if the government had to use the same accounting methods as private companies.

That was the finding Friday when the administration released a 166-page "Financial Report of the United States Government" for the 2006 budget year that ended on Sept. 30.

The report, released by the Treasury Department and the president's Office of Management and Budget, found that under the accrual method of accounting, the deficit for 2006 would have totaled $449.5 billion, not the widely reported $247.7 billion incurred under the cash system of accounting.

Under the accrual method, expenses are recorded when they are incurred rather than when they are paid. That tends to raise costs for liabilities such as pensions and health insurance.

Ten years ago, Congress ordered the government to start issuing annual reports using the accrual method of accounting in an effort to show the finances in a way that was comparable with the private sector.

In this year's report, as in every one that has been issued, Congress' auditing arm, the Government Accountability Office, said that it could not sign off on the books because of problems in the reporting.

Comptroller General David M. Walker, the head of GAO, said in a letter included in the report that 53 percent of the government's total assets were included in agencies that could not be audited properly.

These problems included what Walker described as "serious financial management problems at the Department of Defense," repeating criticism previous reports have made about the Pentagon's bookkeeping.

The report, citing information from the trustees of the Social Security and Medicare programs, said that the shortfall in funding those two programs would total $44 trillion over the next 75 years.

"This report shows we are making progress getting our fiscal house in order in the near term," White House Budget Director Rob Portman said in a statement. "But it also puts in stark terms the necessity of addressing the rapid increase in entitlement spending over time."
mikal
More dollar "diversifying"
http://www.bloomberg.com/apps/news?pid=20601103&sid=aCVBzwWdstPk&refer=usVenezuela, Oil Producers Buy More Euros as Dollar, Oil Slump | Bloomberg | December 17, 2006
Ned
@ White Rose, contrarian
http://www.foolmeonce....foolmetwice.conWhite Rose,

Good job on the whistle blowing. I ran my cross-reference, no one confirms "Fed Chairman Bernanke left the meeting "pale and in a cold sweat"".

Contrarian,

Remember the discussion a few weeks ago about the "largest military buildup ever" ? Not a word out of a single human since.

** Be careful what you read. Half the lies you hear aren't true !!

arbyh
Tiapan
Ben and Paulson in the orient to deal for the life of the dollar. It reminds me of two things.
First is from the movie "Tiapan" in Dirks deal with the triads. Where he cuts 3 coins in half as must honored promise to the bearer upon being presented to the Tiapan. Thus he continues his family business survival, while risking his family business future.
The second is when Pres G. Bush up-chucked all over the Prime Minister of Japan during dinner, while Pres was in trade talks. I felt at that time that Japan had told Pres Bush in that way that the orientals are famous for, "Yes we understand what you wish in our opening trade and will do so at our great loss... ... It is so unfortunate that we must now reduce Japan's financial reserves in the dollar and treasury in order to offset this great loss to some Japanese markets that will suffer as the great USA expands into our traditional markets...what will the Japanese rice farmer do?"
In was discussed in Econ circles even back then that if Japan held back just 5% in purchasing treasurys it would cripple our GNP for a year.

I'm sure the dragons are not being kind, even though they are smiling. As they say in the Army "Damn good training" for our boys.
Clink!
Honest accounting - a reflection
It seems a little strange to me that, considering how many of the political class (particularly Republicans) believe in the essential goodness and efficiency of the private sector relative to the public, that none seem to think that it would be a good idea for government to adopt the accounting practices of the private sector. Curious that .....
C!
Druid
U.S., China Clash on Currency
dyn/content/article/2006/12/14/AR2006121400681.html
"By Ariana Eunjung Cha
Washington Post Foreign Service
Friday, December 15, 2006; Page D01

BEIJING, Dec. 14 -- U.S. and Chinese leaders clashed publicly on the opening day of strategic economic talks, with Treasury Secretary Henry M. Paulson Jr. pushing China to revalue its currency and Chinese Vice Premier Wu Yi saying Americans do not have a full understanding of the situation.

After standing by as U.S. officials criticized her country's economic policies in the media during the past week, Wu set the tone for the meeting with assertive introductory remarks that spanned 20 typed pages and 5,000 years of Chinese history.

"Some American friends are not only having limited knowledge of, but harboring much misunderstanding about, the reality in China," Wu said, according to a copy of her remarks provided by the Ministry of Foreign Affairs. For example, Wu noted that China needed to create enough jobs to absorb an estimated 300 million rural workers -- equal to the entire population of the United States -- into its urban economy in the next two decades.

Paulson was equally aggressive in his follow-up speech, saying that the U.S. government's "strong view" is that China should allow its currency, the yuan, to be more flexible. Most countries allow the value of their currencies to be set in global markets, but China intervenes to keep its currency pegged to the dollar at an exchange rate that many Western economists regard as skewed in China's favor.

The Chinese economy "would be more effective under a regime where currency values are determined in a competitive, open marketplace based upon economic fundamentals," Paulson said. A revaluation of the yuan upward would make U.S. goods cheaper in China and Chinese goods more expensive in the United States.

Throughout the day, U.S. officials pushed on issues such as trying to resolve the huge trade imbalance between the two countries and making sure that China lives up to commitments it made five years ago when it joined the World Trade Organization. By the afternoon, they said they were optimistic.

"They were very much in a receiving mode," Labor Secretary Elaine L. Chao said in an interview with reporters. "They were listening very carefully."

Commerce Secretary Carlos M. Gutierrez said that the meeting "exceeded expectations" and that "it was a very candid . . . honest, solid dialogue."

High-level U.S. officials, interviewed after the close of meetings for the day, said the two sides agreed on many things in principle, such as the need to keep their economies open to other countries. But specific measures and a timetable were less clear, with the United States pushing for rapid change and China seeking to move cautiously."


Druid: Same beat same song.

Goldilox
White House Tightens Publishing Rules for USGS Scientists
http://www.livescience.com/forcesofnature/061214_ap_usgs_screening.htmlsnip:

WASHINGTON (AP) � The Bush administration is clamping down on scientists at the U.S. Geological Survey, who study everything from caribou mating to global warming, subjecting them to controls on research that might go against official policy.

New rules require screening of all facts and interpretations by agency scientists. The rules apply to all scientific papers and other public documents, even minor reports or prepared talks, according to documents obtained by The Associated Press.

Top officials at the Interior Department's scientific arm say the rules only standardize what scientists must do to ensure the quality of their work and give a heads-up to the agency's public relations staff.

"This is not about stifling or suppressing our science, or politicizing our science in any way,'' Barbara Wainman, the agency's director of communications, said Wednesday. "I don't have approval authority. What it was designed to do is to improve our product flow.''

Some agency scientists, who until now have felt free from any political interference, worry that the objectivity of their work could be compromised.

"I feel as though we've got someone looking over our shoulder at every damn thing we do. And to me that's a very scary thing. I worry that it borders on censorship,'' said Jim Estes, an internationally recognized marine biologist who works for the geological unit. "The explanation was that this was intended to ensure the highest possible quality research,'' said Estes, a researcher at the agency for more than 30 years. "But to me it feels like they're doing this to keep us under their thumbs. It seems like they're afraid of science. Our findings could be embarrassing to the administration.''

The new requirements state that the USGS's communications office must be "alerted about information products containing high-visibility topics or topics of a policy-sensitive nature.''

The agency's director, Mark Myers, and its communications office also must be told � prior to any submission for publication � "of findings or data that may be especially newsworthy, have an impact on government policy, or contradict previous public understanding to ensure that proper officials are notified and that communication strategies are developed.''

Patrick Leahy, USGS's head of geology and its acting director until September, said Wednesday that the new procedures would improve scientists' accountability and "harmonize'' the review process. He said they are intended to maintain scientists' neutrality.

"Our scientific staff is second to none,'' he said. "This notion of scientific gotcha is something we do not want to participate in. That does not mean to avoid contentious issues.''

The changes amount to an overhaul of commonly accepted procedures for all scientists, not just those in government, based on anonymous peer reviews. In that process, scientists critique each other's findings to determine whether they deserve to be published.

From now on, USGS supervisors will demand to see the comments of outside peer reviewers' as well any exchanges between the scientists who are seeking to publish their findings and the reviewers.

The Bush administration, as well as the Clinton administration before it, has been criticized over scientific integrity issues. In 2002, the USGS was forced to reverse course after warning that oil and gas drilling in Alaska's Arctic National Wildlife Refuge would harm the Porcupine caribou herd. One week later a new report followed, this time saying the caribou would not be affected.

-Goldilox

Like studies in "human origination", scientists and educators must now avoid alternative theory and pass political muster by "anonymous review" before they are allowed to publish. Since this comes from the USGS, I suspect that oil depletion studies will definitely fall under this political censorship.

Looks like the First Amendment is the next victim of political rights confiscation. Someone explain to me how this differs from the 17th Century PTB telling Galileo he couldn't publish his "wild theories" that the world was round, or better yet, how censorship aids the performance of "free markets".

Scientific method is supposed to be the study of principles defined by empirical analysis, but if conducted with goobermint funds, it must first and foremost meet the political agenda of the ruling Skull and Bones club! Talk about dogmatic "scientism". Dark Ages, full speed ahead!
Gonlyold
Moving Towards a Cashless System
Goldilox
In China's Pocket
http://www.commondreams.org/views06/1216-25.htmsnip:

The high-profile mission to China of key administration economic officials looks like another predictable fizzle. The delegation, headed by Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke, is long on state dinners and photo ops, short on real progress.

That's because the Chinese have learned to play their American trading partners like a soothing violin, and the Americans are all too willing to dance to the tune. Despite the precarious condition of the U S dollar, the Chinese central bank keeps lending us dollars by the hundreds of billions, so that we can keep buying their cheap products. The more we owe them, the less leverage we have.

As the clich� used to have it, damn clever, these Chinese. A better interpretation would be: Damn stupid, these Americans.

Bernanke, Paulson and company make a big deal of China's deliberately undervalued currency. By intervening in money markets to keep the yuan cheap, China makes its products artificially discounted.

But the yuan is the least of our problems. If the Chinese actually did what Paulson and Bernanke say they want and stop pegging the yuan to the dollar, it could trigger an international run on the dollar. What the U S officials really want is the appearance of progress, and very gradual appreciation of the yuan, to head off pressure from Congress for tougher measures.

However, slow adjustment of the yuan, which is already occurring, will hardly make a dent in the trade deficit with China. The far bigger problem is China's entire economic system.

China has managed to combine something that in theory can't exist: a Leninist one-party state, and a fiercely efficient pseudo-capitalist economy. Since President Bush I, American leaders have insisted that as China becomes more capitalist, it will become more politically liberal. But tell that to opposition leaders who keep being jailed. China is no closer to a Western style democracy than it was on the day of the Tiananmen Square massacre of 1989.

China's mercantilist economy defies norms of free trade. But American industry finds it too convenient to use China as a low-wage production zone to complain very much.

So our government goes through the motions of protesting China's subsidies to industry, its theft of American intellectual property, its coercive demands for the transfer of sensitive technologies by U S business partners and hardly bothers to protest the slave-like labor conditions in many Chinese factories. The Chinese make soothing noises, not much changes, and the U S -China trade imbalance keeps going through the roof.

Last June, the AFL-CIO filed a petition under Sec. 301 of the 1974 Trade Act, which makes brutal labor conditions in an exporting country an unfair trade practice, just as theft of intellectual property is an unfair trade practice. The petition described: a nightmare of 12-hour to 18- hour work days with no day of rest, earning meager wages that may be withheld or unpaid altogether.

The factories are often sweltering, dusty, and damp. Workers are widely exposed to chemical toxins and hazardous machines, and suffer sickness, disfiguration, and death at the highest rates in world history. They live in cramped concrete-block dormitories, up to 20 to a room, with each worker's space limited to a bed in a two-tiered bunk -- comparable in space, discomfort, and privacy to prison cells in the United States. . ..Ten to 20 million workers in China are children. No one knows the precise number, because statistics of that kind are state secrets, and anyone disseminating such data is subject to criminal punishment . . .The severe exploitation of China's factory workers and the contraction of the American middle class are two sides of a coin.

In rejecting the petition, the Bush administration did not deny the conditions, but cited ongoing consultations. Yet, last year's annual Report of the U S Congressional-Executive Commission on China declared that the Beijing government had simply "avoided discussions with the international labor community on Chinese workers' rights." And labor conditions are not even on the Paulson - Bernanke agenda.

In the early 1990s, China was a lot weaker economically, we were a lot less dependent on Chinese lending, and China eagerly wanted entry into the World Trade Organizations. But three administrations Bush I, Clinton, Bush II gave up that diplomatic leverage and worked to welcome China into the WTO in exchange for mostly empty promises. Why? Because American business elites were so eager to make more deals.

So, when the final toasts are held, once again nothing much will change, and we will be deeper in hock to Beijing than ever.

-Goldilox

Of course labor conditions are NOT on Hank and Ben's agenda, when you consider the lip service paid back home by an administration that waxes poetic about immigration issues. They quietly support their no-bid friends who pocket 85% of the New Orleans reconstruction funds and subcontract the remaining 15% to those who bus illegals in to undercut US construction workers. If they care so little for US labor, why would they give a hoot about Chinese kiddies who finally "got a job".

They'd much rather publicize the fact that Rolls-Royce is doing a boarding house business with the Nouveau Riche in the "new" China.
Chris Powell
Lawsuit targets 'first strike' coins
http://news.yahoo.com/s/ap/20061218/ap_on_bi_ge/first_strike_lawsuitBy Curt Anderson
Associated Press
Sunday, December 17, 2006

To avid collectors, coins that stand out as rare or of exceptional quality are worth more than their weight in platinum, silver or gold.

Numismatic enthusiasts are often willing to pay a premium for American Eagle, American Buffalo and other specialty coins labeled "first strikes" because they are billed as among the first of that year's batch produced by the U.S. Mint.

But some collectors say the label is misleading and that the coins aren't special at all. Now, a Miami attorney has filed class-action federal lawsuits on behalf of potentially thousands of collectors claiming that the "first strike" designation is unfair and deceptive. More than $10 million in damages could be at stake.

"Basically, what we are saying is that it's impossible to know which coin is the 'first strike,'" said attorney Charles Lipcon, who filed the lawsuits on behalf of Broward County collector Thomas Francisco and others. "People are paying a lot of money and not getting a better coin. Really, there's no difference between those coins and any other coins."

For example, a silver American Eagle dubbed "first strike" might fetch an additional $30. But a gold American Buffalo coin with that label could sell for $2,200 more, Lipcon said.

The lawsuits name as defendants two of the nation's leading coin grading and authentication services: Numismatic Guaranty Corp., based in Sarasota, and Newport Beach, Calif.-based Professional Coin Grading Service.

About 150,000 coins labeled "first strike" by PCGS or NGC have been sold since Jan. 1, 2005, to collectors and investors in all 50 states, according to the lawsuits. The implication, according to Lipcon, is that these particular coins were among the first "struck" by the U.S. Mint from a certain die set, leading purchasers to think they are of far higher quality than those created later when the die is allegedly worn.

"There are tens of thousands of people who have been duped," Lipcon said. "People think they are getting something more valuable, and they're not."

On its Internet site, the U.S. Mint says that it does not keep track of the date individual coins were created and that the dates on 500-ounce boxes of coins represent only when they were packed, weighed, and sealed.

In fact, according to the Mint, about half of a given year's production of these collectible coins are finished before they are actually released. Thousands of coins are minted before each die set is replaced.

"This means that coins may be minted from new die sets at any point and at multiple times while production of a coin is ongoing, not just the first day," the Mint statement said.

For their part, NGC and PCGS say they have not misled any collectors and that their definitions of "first strike" coins are clear. Both companies are paid fees to grade, authenticate, and designate coins.

"We are the friend of the consumer. We are there to make sure they get a fair deal," said Michael Haynes, chief executive officer at PCGS. "We give the consumer peace of mind."

To PCGS, a "first strike" coin is one that is delivered by the Mint within 30 days of its initial sales date. American Silver Eagles, for example, usually go on sale Jan. 1, so a first strike would be any coin delivered by Jan. 31.

Lipcon, however, said PCGS previously used a definition indicating that a "first strike" was one of the first coins produced by a certain die.

NGC says it will designate a coin "first strike" if it arrives with the proper documentation at the company within the first month of release or is submitted in sealed U.S. Mint packaging at a later date.

"We have had a very clear definition the entire time. It was based on timing," said Steve Eichenbaum, chief executive officer at NGC. "Everything we have done is very transparent. We made no representation with regard to rarity or no representation with regard to value."

The cases have been assigned to U.S. District Judge Jose Martinez of Miami, who has not yet ruled on whether class-action status is appropriate. If Martinez approves class-action status, the twin cases could involve $10 million or more in potential damages because it would cover anyone in the United States who bought a "first strike" coin in 2005 and 2006.
TownCrier
Our August 22nd Bulletin Board entry offered a cautionary word on "First Strikes"
http://www.usagold.com/bulletin/board.htmlIn order to help investors steer through the hoopla, hype, and shady marketing mayhem that we heard being bandied about in conjuction with this summer's release of the new American Buffalo bullion coins, we diligently passed along this advisory from the U.S. Mint to help our visitors and clients steer clear of dubious and, dare I say, shark-infested waters.

Clink link and scroll down a click or two to the 8/22/06 bulletin entry.

R.
Goldilox
Protesters march in New York against police shooting
http://news.xinhuanet.com/english/2006-12/17/content_5498482.htmsnip:


Thousands of protestors angry over the November 2006 New York City police shooting death of Sean Bell, a groom on his wedding day, march down New York's Fifith Avenue in Midtown, Manhattan, Dec. 16, 2006. (Xinhua/Reuters Photo)
Photo Gallery >>> (pretty good picture)

NEW YORK, Dec. 16 (Xinhua) -- Thousands of protesters marched through streets in New York City's business district of Manhattan on Saturday in protest of the police shooting last month that left one man dead and two others wounded.

The march took protesters through the heart of New York City's famous shopping district during one of the busiest shopping days of the holiday season.

Trent Benefield, one of the survivors of the shooting that killed Sean Bell, led the march, dubbed "Shopping for Justice," in his wheelchair. He was encircled by bodyguards, and followed by a group of clergy and elected officials.

Protesters counted in unison the number from one to 50 to symbolize the number of shots fired by police in Bell's death. The march was seen as an expression of anger by the local black community and civil right groups at the slaying of Bell, killed just hours before his scheduled wedding. Five police officers fired 50 shots at his car, killing him and wounding Benefield and Joseph Guzman.

The march was organized by the civil right activists Rev. Al Sharpton and other community leaders, and was intended to contrast the slaying of Bell with the holiday spending spree along Manhattan's busiest shopping district.

Police have said that undercover officers were conducting a vice operation at a club before the shooting, and they claimed that the victims were going to retrieve a gun, although no weapons were found later. Police have also said Bell's car struck an officer and crashed into an unmarked police van.

But civil right activists said the shooting demonstrates the disregard of New York police for the city's black residents. Activists say they will not remain silent if the city's police department refuses to make some changes in the way it operates.

-Goldilox

This story would not be unusual, except that I failed to find a single mention of it when I sorted US and UK media, including the NYTimes online. Either the Chinese media is making up stories about marches in NYC or the US media is ignoring them.

What was it someone said during the cold war? "For Russian News, read the NY Times. For US News, go to Pravda."
Goldilox
China to continue prudent fiscal policies next year
http://news.xinhuanet.com/english/2006-12/17/content_5499880.htmsnip:

BEIJING, Dec. 17 (Xinhua) -- China will continue the prudent fiscal policies that it has taken since 2005, according to sources with the Ministry of Finance (MOF).

Zhang Tong, spokesman of the MOF, told Xinhua before the holding of the MOF work conference that in contrast to outspreading or austerity fiscal policies, prudent fiscal policies are more moderate and are generally taken when the total supply and demand are balanced but there are some structural imbalances.

China saw rising inflation threats, excessive rapid growth of investment in some regions or industries and bottlenecks of coal, electricity, petroleum and transportation supply in 2003.

Since 2005, the Chinese government began to take prudent fiscal policies that are different from the pro-active policies it has taken since 1998 to avoid the overheating of the economy, said Zhang Tong.

The prudent fiscal policies of the Chinese government focus on controlling deficit, improving economic structure, promoting reform, increasing revenue and decreasing expenditure, he said.

The Chinese government began to transfer the direction of the fiscal policies by adjusting the scale of the long-term treasury bonds for development and optimizing use of treasury bonds in investing projects.

According to statistics of the MOF, the deficit in the central budget decrease by 19.23 billion yuan (2.47 billion US dollars) last year with a year-on-year decline of 0.4 percentage points.

Zhang said China has been expanding its fiscal expenditure in sectors of agriculture, education, public health and social security in recent years.

-Goldilox

Chinese Media take on their fiscal directions. No mention of any changes inspired by bilateral talks.
contrarian
Jumped the Gun
http://www.gold-eagle.com/cgi-bin/gn/get/forum.htmlMay have jumped the guy on this one, as per posting at Gold-Eagle, but weekends can give time to worry!

"BEFORE WE RUN TO OUR BANKS TO BEAT CHINA TO ALL THE VAULT CASH, WE NEED TO PAUSE AND UNDERSTAND FEW THINGS:
(tlaga) Dec 17, 23:47

First, we need to know the difference between cash and cash deposit.

Rather than write this explanation from the scratch, let us utilize an excerpt from a three year old editorial:

---
The argument "gold yields no interest while its credit substitutes do" is a sophistic argument, based on deliberate blurring of the meaning of "gold" and the meaning of "credit substitutes". To erase sophistry from this statement and to make it uniformly true, its narrow term "gold" must be replaced with a broader term "cash", and its overbroad "credit substitutes" must be narrowed to a more specific category "investment assets".

Cash, whether in the form of gold or in the form of Federal Reserve notes, will yield no interest if you will hold on to it. If you want to earn interest on anything at all, you have to give it to those from whom you expect your interest. Both gold dollars and their "credit substitutes", Federal Reserve paper "dollars", when kept under a mattress will yield no interest. Interest is the price of liquidity. Those who want to stay liquid and have their wealth instantly available for any unforeseeable contingency must keep their wealth in cash - again, it makes no difference if it is gold or Federal Reserve notes - but the price of keeping your wealth in cash is the loss of interest. In order to earn interest, cash must be invested, i.e., converted into less liquid assets. It is only because the general rule, that the less liquid the investment asset is the higher interest it pays, has been perverted by the unfortunate proliferation under fiat dollar regime of Treasury bonds, notes and bills - which are perfectly liquid but pay interest by courtesy of American taxpayers - it became possible for professors of economics to circulate their sophistry that "gold yields no interest and credit substitutes do". If central banks gold cash would be converted solely into fiat cash, such as Federal Reserve notes, and not into "investment assets", such as Treasury bonds, notes and bills, it would yield no interest either.

With this distinction in mind, the ostensibly plausible and self evident statement "gold yields no interest and credit substitutes do" becomes as preposterous as a statement "coin dollars yield no interest, and paper dollars do".
---


With this information in mind, let us ask ourself a question...

...in what form the Chinese current account surplus is kept? Is it kept as cash, or is it kept as cash deposit?

The answer to this question is...

... the Chinese current account surplus is kept in the form of US Treasury securities (bills, notes & bonds), which are deposits maintained at Federal Reserve Bank of New York.

To do anything at all with their reserves, to buy gold or to exchange them for anything else, the Chinese first have to call the Federal Reserve Bank of New York, and either transfer particular deposit to another party or cash it through one of the Fed's "primary dealers".

The same constraint applies to over a trillion dollars in hedge funds. These are not dollars in cash, these are dollar denominated assets that first must be converted to dollars to be used for buying gold or anything else.

Notwithstanding all the announcements to the contrary, there is no compelling reason for China to diversify her reserves into gold at this time."
Thoreauly
"In China's Pocket"
http://www.commondreams.org/views06/1216-25.htm
"So, when the final toasts are held, once again nothing much will change, and we will be deeper in hock to Beijing than ever."

Sounds like "stay the coure," if you know what I mean.

Thoreauly
"In China's Pocket"

Make that "the new way forward."
Chris Powell
Iran announces switch from dollars to euros
http://news.yahoo.com/s/afp/20061218/wl_mideast_afp/iranforexbank_061218100958From Agence France-Presse
Monday, December 18, 2006

Iran announced it has ordered the central bank to use euros for foreign transactions and transform the state's dollar-denominated assets held abroad into the single European currency.

"The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions," government spokesman Gholam Hossein Elham told reporters Monday.

"We will also employ this change for Iranian assets (in dollars) held abroad."

Elham implied that the move would apply to oil revenues from the world's number four crude producer, although it remains to be seen how this would be received by the market.

"Foreign income sources and oil revenues will be calculated in euros and we will receive them in euros in order to put an end to our dependence on the dollar," Elham said.

The move comes amid mounting pressure from the United States for the UN Security Council to agree sanctions against Iran over its controversial nuclear programme.

Bankers in Iran have complained in recent weeks that it was becoming increasingly difficult to receive Iranian-held money denominated in dollars from European bank accounts.

They said that this was because of US pressure on European banking giants not to allow dollar-denominated funds to be sent into, or out of, the Islamic republic.

Elham added that Iran's budget would in future be calculated in euros.

"Until now the budget has been calculated according to revenues in dollars, but this calculation will now change," he said.
968
Venezuela, Oil Producers Buy More Euros as Dollar, Oil Slump
http://www.bloomberg.com/apps/news?pid=20601103&sid=aCVBzwWdstPk&refer=newsSNIPS :

Dec. 18 (Bloomberg) -- Venezuelan leader Hugo Chavez is directing a growing share of the country's oil profits into euros as the dollar and crude prices fall.

Bank Indonesia is boosting euro holdings, said Senior Deputy Governor Miranda S Goeltom in a Dec. 13 interview in Jakarta. Indonesia has $39.9 billion in reserves. Sultan Bin Nasser al-Suwaidi, the governor of the Central Bank of the UAE, last month said he was considering when to shift as much as 8 percent of the nation's $24.9 billion in reserves into euros.

``A rising euro is a source of capital gain for central banks and a source for offsetting the capital loss created by the dollar'' decline, said Bankim Chadha, Deutsche Bank AG's head of macro foreign-exchange in New York and a former International Monetary Fund official. This gives ``an incentive to buy euros.''
Knallgold
Could it be?
The recent terrible weakness in Gold,has it anything to do with abandoning of the $ by oil?
Topaz
13 week T's, 4.75% tomorrow?.
http://stockcharts.com/h-sc/uiThe RSI in this case would be a good potential direction indicator and as such it seems the Fed are losing control of this market.
They used to be all over the 3mo but with so many irons in the fire, it appears they simply can't be everywhere.

A cut in the FFR? ...by New Year imho.
Topaz
try that!
mikal
Dear dear, what it costs to shear!
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564860153279940463@Topaz-- I hope you are right. They've got to pay up sometime. The Fed is boxed in between a rock and a train.

Treasury rates rise at weekly auction | December 18, 2006 12:20 PM | WASHINGTON (AP) | "Interest rates on short-term Treasury bills rose in Monday's auction with the rate on six-month bills climbing to the highest level in three weeks.
The Treasury Department auctioned $17 billion in three-month bills at a discount rate of 4.825 percent, up from 4.800 percent last week. Another $15 billion in six-month bills was auctioned at a discount rate of 4.885 percent, up from 4.865 percent last week.
The three-month rate was the highest since three-month bills averaged 4.870 percent two weeks ago. The six-month rate was the highest since 4.935 percent on Nov. 27.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,878.03 while a six-month bill sold for $9,753.04."
Goldilox
YOU - Person of This Year but Next Year's Toast?
http://www.freepress.net/news/19842snip:

Alas, the incredible euphoria of Time Magazine picking You and Me as their Person(s) of the Year for 2006 can't last forever. No more all night parties. No more dancing in the virtual streets. Time to sober up and realize how all this wonderful � and less wonderful � user created content celebrated by Time almost didn't happen; how fragile our ability to post our content on the Internet really is; and, how the telephone and cable companies that monopolize broadband Internet access want 2007 to be the year not of Us, but of Them.

The entire phenomenon of a huge audience reaching home brewed content created by Us relies upon consumers having the right � and opportunity � to choose what websites they visit. Today, we have that, and it's called "Net Neutrality." But the handful of telephone and cable companies that control the market for broadband Internet access � over 98 percent market share for cable and DSL! � have spent hundreds of millions of dollars this year to persuade Congress and the Federal Communications Commission (FCC) that they should be able to control what content streams over their "pipes" and what websites their captive customers can visit.

The companies� plan is to force content producers to pay extra fees and tolls for so-called "priority" service, while relegating those who don't pay to the Digital Dirt Road. Who will pay those fees and tolls? Those who can afford to � the already fat, established, and constipated Big Media and Old Media � at the expense of the creative, hustling, innovative, and entrepreneurial. Had this Pay to Play on the Net System been permitted a few years ago, Google would still be in a garage. Rocketboom would be Rocketbust. YouTube? Try TheirTube.

Time's Person of the Year � those of us who rely on an open Internet to create and distribute our content � would be stillborn.

And, of course, one delicious irony in all this is that Time Magazine's parent company owns Time Warner Cable, one of the key opponents of Net Neutrality, confirming the adage that bedfellows make strange politics.
mikal
"First ladies" coins first females
http://www.wyff4.com/money/10561198/detail.htmlFirst Ladies Honored On Gold Coins
Mint To Feature Women For First Time | Associated Press
POSTED: 2:34 pm EST December 18, 2006 UPDATED: 2:54 pm EST December 18, 2006 | WASHINGTON | Snippit: "The U.S. Mint is calling it a first for the nation's first ladies. Starting next year, Martha Washington, Abigail Adams and all the other presidential spouses will begin appearing on a special series of gold coins. It will be the first time in history that the U.S. Mint has produced a series featuring women. The first ladies will be on half-ounce gold coins, with each likely to sell for more than $300."

Mikal- How morbid. These accompany the 4 yearly(quarterly) rollouts of Presidential base metal clad $ coins. They should have used Lady Liberty and other symbols and icons and adhered to the law.
But aside from garnering inordinate profits for the Mint,
these coins may spark a bit more interest in collecting and metals among the public, at least those who can afford it...
Goldilox
Trade deficit soars to record
http://www.mercurynews.com/mld/mercurynews/business/financial_markets/16266732.htmsnip:

WASHINGTON - Pushed up by soaring oil prices, America's trade deficit surged to a record high in the summer, but analysts predicted a slowly improving imbalance in the months ahead.

The current account trade deficit increased 3.9 percent to an all-time high of $225.6 billion in the July-September quarter, the Commerce Department reported Monday.

That third-quarter deficit was equal to 6.8 percent of the total economy, up from 6.6 percent of gross domestic product in the second quarter.

The current account is the broadest measure of trade because it tracks not only the flow of goods and services across borders but also investment flows. It represents the amount of money that must be borrowed from foreigners to make up the difference between imports and exports.

At current levels, the United States is borrowing more than $2 billion a day from foreigners to finance the trade deficit.

While foreigners have been happy to sell their cars, clothing and computers to Americans and hold dollars in return, the worry is that at some point the desire for dollar-denominated assets could weaken, triggering sharp declines in the value of the dollar and pushing interest rates higher.

Analysts noted that for the third straight quarter, foreigners earned more on their U.S. investments than Americans did on their foreign holdings, sending the deficit in investment flows to a record of $3.8 billion.

The current account deficit is expected to hit a new record for the full year, far surpassing last year's record of $791.5 billion although some analysts said they believed the third-quarter figure would represent the worst of the deficit numbers.

"Lower oil prices, robust export growth and some cooling in import growth should bring the deficit down, beginning in the fourth quarter," said Nigel Gault, an economist with Global Insight, a private forecasting firm.

He predicted the deficit would average around $866 billion this year but shrink moderately to $816 billion next year.

But imbalances at this level will still leave U.S. financial markets vulnerable to foreign investment patterns, economists said.
Federal_Reserves
Persona of the year was a wall street banker
They made out like bandits. Never have so few taken so much from so many.

The lower and middle class were "person"a non grata.


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

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

MONDAY Market Excerpts

December 18 (from MarketWatch) -- Gold futures closed lower Monday to tally a third consecutive losing session as silver prices dropped nearly 4% to register their weakest closing level in seven weeks.

"With dollar sentiment improving and fund players still positioned long ahead of year-end, and the market set to thin out over the next two weeks over the Christmas/New Year holiday period, the market remains at most risk to further long liquidation," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.

The February gold contract closed down $1.20 at $617.90 on the New York Mercantile Exchange, its weakest closing level since Oct. 31. Still, the contract managed to close off its earlier low of $615.10 Monday.

"Gold is incredibly oversold on [the] Street's fascination with exchanging paper assets," said Ned Schmidt, editor of the Value View Gold Report.

"Each time gold has got this oversold it has rallied $50+," he said. "Doing that this time would be a major breakout to the upside."

U.S. economic data was mixed Monday. The current account deficit widened to $225.6 billion in the third quarter, or 6.8% of gross domestic product, the Commerce Department reported. The National Association of Home Builders said its seasonally adjusted housing market index fell to 32 in December from 33 in November. But home builders are growing more hopeful that home sales could perk up in six months, the report showed.

For the metals market, "trading conditions continue to be volatile and the ebb and flow of sizable trades can throw the entire equation into exacerbated curves without notice," said Kitco's investment-products analyst Jon Nadler.

---(see url for full news, 24-hr newswire)---
Clink!
@ Mikal
Morbid isn't all bad. Just think about what would have happened to the "greatest democracy on Earth" if they started having portraits of LIVING people on the U.S. coinage. Last time I checked, countries that did that were either monarchies or empires !! I still find calling Houston's airport after Bush Senior in pretty bad taste. Just ain't proper !
C!
Knallgold
Chinese $ dump?
http://www.freemarketnews.com/Analysis/134/6593/high.asp?wid=134∋d=6593CHINA DOLLAR DUMP? � TODAY'S HIGH ALERT

Monday, December 18, 2006


A recent report circulating through the Net, "China To Dump One Trillion In US Reserves" deals with the outcome of the visit of the Bush Administration's "A team" to China this past week. According to an article at HalTurnerShow.com, the Chinese have told Bush administration officials they will not "sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large."

The article adds, "China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse � "

Well, this may be the case. As this article is scheduled for a Monday post, we will all know at the same time. But still, let us take a deep breath amidst the rumors of an impending dollar debacle and examine the reality of the Chinese position. Here are the reasons, according to the article, that the Chinese are ready to dump the dollar "fast and large."

1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.

2) The U.S. dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 billion simply by holding U.S. dollars in its reserves.

3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.

Again, the article: "For these reasons China has decided to implement an aggressive sell-off of U.S. dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.' "

What would be the implications of such a sell-off? "This would cause a worldwide sell-off of dollars, create almost immediate �hyper-inflation' in the US and also impact world markets at a level "worse than the Great Depression of 1929."

Other Opinions

Yet, there are other opinions that do not exactly concur with the above. Here we have a recent article by Reuters' Chris Buckley with the headline "Manage Reserves But Avoid Yuan Jump - China Official"

The article states, "A surging balance-of-payments surplus is China's biggest economic problem, but Beijing must avoid the �turbulence' that a sharp rise in the yuan would bring, according to a senior banking regulator. � Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, estimated that China needs no more than $700 billion in foreign currency reserves and, with the country facing losses on its dollar bond holdings, proposed exploring alternative channels for investing its $1 trillion stockpile."

So, what do we derive from the above? Perhaps, that long-term (at least long-term-ish) gold and silver could move up "large" as a result of China's currency activities. How large? Gold could perhaps go as high as $2,000 an ounce or more and silver going perhaps to $100 an ounce. But, amidst the exhortations to ruin that began this piece, we are impelled to offer the perspective that it may not happen overnight (though, yes, perhaps it could). The reason may be as simple as this: The dollar is still the world's dominant currency and all the major players, OPEC, the EU and, of course, Asia and China have a stake in making sure it does not decline too fast. Additionally, the United States is a major consumer nation, and crippling such a large market without a replacement is not likely a positive move for producing nations such as China, or even Japan.

China does not exist in a vacuum. The leadership has its own problems - nearly half a billion impoverished, rural Chinese who seemingly do not believe they are getting their "fair share" of the current prosperity and continue to present the threat of civil destabilization. China needs to continue its industrial expansion until it can move more of these rural dissidents into cities where they can find work other than hand-to-mouth farming (an ongoing program). In the meantime, terminally undermining the economy of one of China's major trading partners is not likely going to help bring about the continued prosperity China's leaders believe is necessary to "modernize" while maintaining the current, fairly unstable system, Perhaps that is why the senior Chinese official above emphasizes the gradualism with which China intends to decrease its position in American dollars.

Finally, as the initial article, above, itself points out, China can act unilaterally, but it will be neither easy to do so, nor especially comfortable. If China's leaders make economic decisions that are unfavorable to its trading partners � such as dumping the dollar all at once - it may find itself at odds with nations that supply it with energy and raw materials, which also hold dollars. This is, perhaps, truly a case of "too big to fail," � or at least in one swoop.

ECONOMIC PERSPECTIVE

The business cycle: I have written in my book, "High Alert," that the overspending and overprinting of dollars by the Bush administration is pushing America toward what may turn out to be a deep depression. Chinese dumping of the dollar would obviously accelerate such a trend � but an impending dump of dollars may not be so immediate for reasons we have seen above. On the other hand, I am in no way subscribing to the dominant social theme, see below.

Dominant social theme: The American economy is incredibly healthy and resilient. This rosy scenario may be no more valid than the dollar dump argument. In fact, I far more sure of the former than the latter. Part of the mumbo-jumbo that keeps fiat money of all denominations alive is the massive network of economists and Wall Street investors and traders who are willing to play along with the charade. As the dollar continues to decline, bringing with it the potential for very real economic ruin, the babble will thicken. Those who can see through it, and continue to purchase gold and silver at what are still fairly low prices, will do a lot better than those who continue to be "snowed" by economic happy talk.

Free-markets analysis: Are you going to bet on an immediate collapse of the dollar? Buy as much gold and silver as fast as possible. If you don't believe a dollar collapse is imminent, you still need to buy gold and silver. But don't panic while doing so. There may be more battles to be fought before the dollar finally surrenders. And when it does, if it does, there may be a new currency standing in the wings, ready to make its appearance. �

Conclusion: More and more you hear calls for a currency called the "Amero" � which would be an amalgam of Mexican, Canadian and American dollars and pesos. American opposition might be overcome if the dollar weakens enough, and that may be the plan. You never know, when it comes to the money elite, what exactly they have in mind. But whether the dollar collapses in a day, a year or a decade, gold and silver hold their value. Trust money or trust politicians. Your choice.
Paper Avalanche
Somebody forgot to apply the hedonic deflator....
http://news.yahoo.com/s/ap/20061219/ap_on_bi_go_ec_fi/economysnip

"WASHINGTON - Inflation at the wholesale level surged by the largest amount in more than three decades in November, reflecting higher prices for gasoline and a host of other items.

The Producer Price Index, which measures inflation pressures before they reach the consumer, was up 2 percent last month, the biggest advance since a similar increase in November 1974, the Labor Department reported Tuesday.

Economists had been expecting a rebound in wholesale prices following two months of big declines. However, the 2 percent jump was four times bigger than the 0.5 percent increase they had forecast. Even excluding volatile energy and food prices, core inflation posted a 1.3 percent advance, the biggest jump in 26 years.

end snip

mikal
@Paper Avalanche
They must have downsized it using the wrong "imputations". Let's see what happens with the coming hedonic revisor...
mikal
Trouble with the "tigers"?
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=agrKSFDgCHDo Why 2007 Is A Make-Or-Break Year For China, Asia
William Pesek - Bloomberg | Dec 19 2006
Goldilox
US Dollar
http://www.netdania.com/QuoteList.aspThe Dollar and Yen are getting hammered in unison today, specifcally starting in the London market.

Quite a number of FOREX traders would sure rather have euros this morning.
Druid
Thailand triggers another Asian contagion
http://www.atimes.com/atimes/Southeast_Asia/HL20Ae02.html"Thailand triggers another Asian contagion
By David Fullbrook

BANGKOK - After months of playing down a fast-appreciating baht, Thailand's central bank lashed out against speculators on Monday by introducing capital controls. These caused the currency to dip slightly, but had the apparently unintended consequence of sending stocks crashing in the biggest single-day drop in the Thai bourse's 31-year history.

Reminiscent of the "Asian contagion" triggered by Thailand in 1997 and which became a full-blown Asian financial crisis, other



Asian stock indices reacted to the Thai news with sharp falls on Tuesday. The Bombay Stock Exchange's Sensitive Index dropped 2.5% and Indonesia's Jakarta Composite Index lost 2.9%. Malaysia's Kuala Lumpur Composite Index fell 2% and the Karachi Stock Exchange 100 Index was off 2.8%. Singapore was also down, by about 1%.

"There is a general question about who might be next in following Thailand's move and so people are focusing on, could it be the Philippines, Malaysia, perhaps Korea?" Adrian Mowat, JPMorgan Chase & Co's regional equities strategist in Hong Kong, was quoted by Bloomberg as saying.

Thailand's central bank governor Tarisa Watanagase announced on Monday that foreign investors would have to lock up 30% of foreign-exchange deposits for a one-year period. The new rules affect all sums over US$20,000 that are not linked to trade or foreign direct investment, and investors who wish to repatriate their money within a year will face a stiff financial penalty.

Thailand's dramatic move raises hard questions about the new military-appointed government's economic stewardship. It has given rise to speculation that the controls may have been imposed preemptively to temper the impact of bad economic news ahead. Some analysts are concerned that recently ousted prime minister Thaksin Shinawatra may have hidden old financial problems or accumulated new ones off balance sheet, which the new government will need to deal with publicly.

It is probable, though, that the government has reacted to growing political pressure from exporters and the farming sector in particular to stem the rise of the baht, lending credence to the theory in some quarters that the Bank of Thailand's move was not independent of government pressure.

The baht slipped back on Tuesday from a nine-year high of 35.12 against the US dollar, while stocks fell more than 11.76%, or 85.89 points, prompting stock-exchange officials to ask the central bank to reconsider the move. Stock-market analysts consider a single-day fall of 10% a full-blown crash. Whatever the motivation and whoever was behind the central bank's action, it appears to be an overreaction to the appreciation of the baht, which had gained more than 19% against the greenback since January, making it one of Asia's best-performing currencies this year."


Druid: It will be interesting to see how this event plays out. Keep buying shiny to ward off these types of stressful unpredictable events.
mikal
Market musings
http://www.foxnews.com/story/0,2933,237434,00.htmlExamining an 'Unnatural' Market - Herb Greenberg
Marketwatch | December 19, 2006
Druid
Thailand Lifts Investment Controls
http://biz.yahoo.com/ap/061219/thailand_markets.html?.v=19"Tuesday December 19, 9:57 am ET
By Michael Casey, Associated Press Writer
Thai Government Lifts Controls on Foreign Investment After Market Plunges 15 Percent


BANGKOK, Thailand (AP) -- The Thai government said it would lift controls on foreign investment in stocks after the market plunged nearly 15 percent on Tuesday, rattling regional bourses amid worries about a repeat of the 1997 Asian financial crisis.

Finance Minister Pridiyathorn Devakula said that the controls -- announced just a day earlier -- would remain on foreign investments in bonds and commercial paper as part of central bank's measures to stem the surge in the Thai baht, which had risen to a nine-year high versus the dollar on Monday.

Investors dumped stocks in Hong Kong, India, Indonesia, Malaysia, South Korea and the Philippines amid contagion concerns that the plunge might to spread through the region and trigger the kind of slump that enveloped Asia nearly ten years ago.

The Stock Exchange of Thailand's benchmark SET Index tumbled 14.8 percent to close at 622.14, after plunging as much as 19.5 percent earlier.

It was the market's biggest one-day drop ever, and brought the benchmark index to its lowest since October 2004. The hardest hit sectors were banking, energy and telecommunications.

The plunge came after the Bank of Thailand late Monday announced its toughest measures yet to clamp down on speculative inflows that have lifted the Thai currency, the baht, to a nine-year high of 35.09 to the dollar.

The measures said that starting Tuesday, all banks were required to hold in reserve for one year 30 percent of capital inflows that aren't trade- or services-related, or repatriation of Thai residents' investments abroad. Also, foreign investors must pay a 10 percent penalty unless they keep funds in the country for a year.

Effectively, the central bank's new rules meant that if a foreign investor allocated the equivalent of 100 million baht to the Thai bond market, the investor could only buy 70 million baht of bonds, while the remainder would be withheld by the central bank, earning no interest."


Druid: Oops. It must have been a real time experiment to see what would happen.

Ag-geek
Look at First Ladies
http://money.cnn.com/2006/12/19/lifestyle/coins/index.htm?cnn=yesNice look at the First Ladies series coins.
mikal
Golden piggybanks among giveaways
http://news.mk.co.kr/newsReadEnglish.php?sc=30800004&cm=Company&year=2006&no=552387&selFlag=sc&relatedcode=&wonNo=&sID=308Banks Busy with 'Gold Marketing'
Dong-eun Lee / CJB - December 19 | Snippits:
"Greeting the upcoming "Year of the Pig" in 2007, domestic banks are enthusiastically unfolding "gold marketing" strategies, while customers are busy buying up gold for their financial portfolios with the New Year just ahead.
According to the banking industry on Dec. 19, Shinhan Bank was able to sell 69.9 billion won worth of its "Gold Riche" by Dec. 15, a product that deposits gold in the bank account. This figure has already surpassed November's monthly total sales of 68.5 billion won...
Goo Hyun-su of Shinhan Bank's Product Development Division stated, "With the price of gold rising slightly due to the recent weakening dollar, interest in gold has increased. Moreover, the preference for gold jumped with the next year being the year of the golden pig."
Banks are currently promoting various gold-related events, offering gold for free or at discounted prices to customers who subscribe to savings or installed-savings products.
Meanwhile, Industrial Bank of Korea is offering a 0.5 percent discount for a gold bar to the first 60 subscribers of its "2007 New Year's Resolution Savings" product.
The bank is to also present golden piggybanks to a total of 25,000 customers."
Goldilox
Year of the "Golden Pig"
@ mikal,

Suuu-WEEEE! Here, little piggie!
mikal
@Goldilox
http://times.hankooki.com/lpage/biz/200612/kt2006121917590111890.htmOINK!
Gold Marketing in Full Swing By Na Jeong-ju, Staff Reporter
Korea Times | 12-19-2006 17:59
Excerpt: "Open new accounts at banks and get gold.
Banks are presenting gold to a select few lucky customers to mark the ``Year of the Golden Pig (a symbol of good fortune) next year that comes around every 60 years on the lunar calendar.
Demand for gold is also increasing as more people are trying to present gold to relatives and friends to wish for their good luck.
``In recent months, the price of gold has surged as the global economy is exposed to more uncertainties amid a weaker dollar and high oil prices, a Shinhan Bank official said. ``In some Asian countries, gold sales are heating up because of the belief that gold will bring special luck next year.
To meet the growing demand for gold, Shinhan has launched some specialized accounts, at which customers can save gold, instead of money. For the first 15 days of this month, the accounts drew 70 billion won of new savings, surpassing the full-month opening of accounts worth 68.5 billion won in November.
When economic uncertainties grow, demand for gold, seen as safer than other investment items, tends to increase. Next year, people have one more reason to keep gold, the official said."
Federal_Reserves
The LongView ....he he he he
LONGVIEW, Texas (Reuters) - U.S. inflation pressures have stabilized but are still too high and may warrant further interest rate hikes to bring them back down, Dallas Federal Reserve Bank President Richard Fisher said on Tuesday.

"I would have to say that the risk of unacceptably high inflation still outweighs the risk of substandard economic growth," said Fisher, who is not a voting member of the Fed's policy-setting committee this year.

"On the inflation front, the good news is inflationary pressures appear to have reached a stasis, despite the labor shortages in certain sectors," he said.

"The bad news is that the stasis is at too high a level for party poopers like me who will have no choice but to advocate tightening monetary policy further if inflation does not ratchet downward," he said.

Lackluster
First Spouse Coins
http://money.cnn.com/2006/12/19/lifestyle/coins/index.htm?cnn=yesHow come the First Lady coins have a lower denomination than a 1/2 ounce Gold Eagle?

$10 vs $25
mikal
@Lackluster
Amero Standard Compliant?
Lackluster
@ Mikal
I was thinking maybe deflation?
mikal
@Lackluster
Interesting thoughts. Maybe revaluation is getting a head start.
Thoreauly
From the dollar to the amero

I would seriously be interested in others' thoughts about this, however early in the conversation it might be (or not).

That is, assuming it could only happen via government edict under a state of emergency that created the proposed North American Union:

1) How exactly would the amero replace the $US, the $CAN, and the peso (how exactly did the euro replace its predecessor?), and

2) Can the amero really be anything else but a smokescreen for a massive currency devaluation to bail out a bankrupt US government and rescue its welfare Ponzi with a flood of newly "naturalized" Mexican workers?
Goldilox
Inflation's Still around
http://urbansurvival.com/week.htmsnip:

New figures out from the government seem to be showing that inflation is far from dead as prices of finished goods at the producer level jumped dramatically:

"The Producer Price Index for Finished Goods advanced 2.0 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This gain followed declines of 1.6 percent in October and 1.3 percent in September. The index for finished goods other than foods and energy rose 1.3 percent in November compared with a 0.9-percent decrease in the previous month. At the earlier stages of processing, prices for intermediate goods moved up 0.7 percent after falling 1.1 percent in the prior month, and the crude goods index increased 15.7 percent following a 10.5-percent decline in October. "

For those who were cheer-leading a Fed rate cut, the 2% rise in total finished goods (led by a 6.1% increase in energy prices) should serve as a reality check. When (now hidden) M-3 is going up at about 10% a year (on a reconstructed basis), what in heaven's name do you expect prices to do?
Chris Powell
No country manipulates its currency, Bush tells Congress
http://news.yahoo.com/s/ap/20061219/ap_on_bi_ge/china_currencyChina Isn't a Currency Manipulator, Report Says

By Martin Crutsinger
Associated Press
Tuesday, December 19, 2006

The Bush administration said Tuesday that China does not meet the technical requirements of a country that is manipulating its currency to gain unfair trade advantages.

The administration did say Tuesday that "more flexibility in China's exchange rate will help it achieve more balanced growth" and promote a number of other outcomes that would be economically beneficial.

But in the report it is required to deliver to Congress every six months, the administration said that no country met the "technical requirements for designation" as a currency manipulator.

Such a designation could trigger negotiations that could ultimately lead to trade sanctions.

The new report was released four days after a Cabinet delegation led by Treasury Secretary Henry Paulson concluded high-level talks in Beijing aimed at resolving the root causes of America's huge and growing trade deficit with China.

The report did not please China's harshest critics in Congress.

"The administration continues to use technical and legalistic dodges to avoid saying what everyone knows to be true -- the Chinese manipulate their currency. It's as plain as the nose on your face," Sens. Chuck Schumer, D-N.Y., and Lindsey Graham, R-S.C., said in a joint statement.

"If the administration still won't call China a manipulator, how can we ever expect them to get China to play fair?" they asked.

Schumer and Graham were the lead sponsors of legislation last year that would have imposed 27.5 percent penalty tariffs on all Chinese imports if China did not move more quickly to allow its currency to rise in value against the dollar.

The administration opposed the legislation on the grounds that it would raise the price of Chinese imports to American consumers.

Sen. Max Baucus (news, bio, voting record), D-Mont., said he believed the requirement for a report every six months had outlived its usefulness and he planned to pursue legislation that would mandate a different approach in the new Congress.

Baucus, who next year will head the Senate Finance Committee, which has jurisdiction over trade, has proposed legislation that would offer milder sanctions against countries with "misaligned" currencies.

America's trade deficit with China is expected to easily surpass last year's $202 billion record, the highest trade gap the United States ever recorded with a single country.

The administration is under heavy political pressure to do something about America's record trade deficits, which critics charge have been a major factor in the loss of nearly 3 million manufacturing jobs since Bush took office in 2001.

No country has been cited as a currency manipulator in the Treasury Department report since China was cited in 1994 by the Clinton administration.

While the Bush administration in the past has hinted that it was getting close to naming China, the new report seemed to take a more muted tone in its criticism in keeping with Paulson's efforts to lessen outward pressure on Chinese officials in hopes of producing better results.

The latest report, which was delivered to Congress two months late, was released without a public briefing in contrast to the spring report in which then-Treasury Secretary John Snow told reporters that the administration was "extremely dissatisfied with the slow and disappointing pace of reform of the Chinese currency system."

Paulson did not comment on the new report, which contained milder criticism of China than Snow's remarks last May.

"China's economy needs a more balanced pattern of growth that is more consumption-based with a flexible exchange rate regime and a modernized financial sector," the new report stated.

The report also cited the goals of the newly launched "Strategic Economic Dialogue," which is designed to be a two-year effort to resolve some of the most contentious economic issues between the two countries through twice-a-year high-level meetings.

The report said the goals of the dialogue were to help China achieve balanced growth without large trade imbalances by pursuing exchange rate flexibility, protection of intellectual property rights, boosting domestic consumption and opening up China's service sector to participation by U.S. and other foreign firms.

"China's currency policy is a core issue in the China-United States economic relationship," the currency report stated.

If the administration had deemed China a currency manipulator, that would have triggered talks between the two countries.

China also might have faced trade sanctions � but first the United States would have had to win a case on the issue before the World Trade Organization.

American manufacturers contend China undervalues its currency by as much as 40 percent against the dollar, which makes Chinese goods cheaper for American consumers and American goods more expensive in China.
Chris Powell
Let them tax cake: IMF tells Zambia to put VAT on food
http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-12-19T143724Z_01_BAN952623_RTRIDST_0_OZABS-ZAMBIA-ECONOMY-IMF-20061219.XMLIMF Says Zambia Should Increase Taxes on Copper Mines

By Shapi Shacinda
Reuters
Tuesday, December 19, 2006

LUSAKA, Zambia -- The IMF has suggested Zambia raise taxes on copper mines and reintroduce taxes on food and other agricultural products to plug holes in its government budget, a document by an IMF mission has indicated.

Apart from raising taxes paid by copper mines, Zambia's main economic lifeblood, the International Monetary Fund said President Levy Mwanawasa's government needed to ditch its promises of tax relief and consider a wide range of new taxes to keep government coffers full.

A document containing the IMF proposals seen by Reuters on Tuesday said Zambia should introduce VAT on food and other agricultural products, domestic transportation, water and sewage services, magazines, newspapers and books in 2007.

Zambia's VAT is pegged at 17.5 percent.

"Although Zambia has a modern and well-designed tax system, it nevertheless has several weaknesses," the IMF document said.

The Fund said tax revenue had declined to 17 percent of gross domestic product (GDP) in 2005 from 18.4 percent of GDP in 1996, mostly due to VAT exemptions and tax fee zones.

The Treasury was not immediately available for comment.

Chileshe Mulenga, the head of the Institute for Economic and Social Research, a Lusaka think-tank, said Mwanawasa would be facing "political suicide" if he raised taxes after a tough presidential campaign in September that saw his government attacked for failing to care for Zambia's poor majority.

"The national consensus is that taxes must come down and this was exhibited by the urban centres which did not vote for the ruling party during the elections. It is not politically tenable and is unrealistic," Mulenga said.

The IMF said company income tax rates, which vary between 33 percent and 35 percent, distorted economic decisions and misallocated resources because they differed by sector.

The Fund proposed that existing copper mines should pay 25 percent company tax while the new mines should pay 30 percent.

The mines, which account for about 65 percent of Zambia's total export revenues, have paid no corporate tax since the early 2000s when Zambia was actively seeking foreign investment in the sector after a sharp decline in world copper prices.

Major foreign investors in Zambia's copper mines include London-listed Vedanta, Canada's First Quantum Minerals and Australia's Equinox Minerals Ltd.

Finance Minister Ng'andu Magande told Reuters in October that the government planned to raise mineral royalty tax to 2.5 percent from 0.6 percent in the next budget due to be presented to parliament in January.

The Fund also proposed eliminating a tax break on hotel accommodation in Zambia's tourism city Livingstone at Victoria Falls, an incentive which has helped to raise foreign tourist arrivals to more than 600,000 in 2005 from just about 100,000 five years ago.

The document showed that the Fund also wanted Zambia to introduce 25 percent customs duty on imported raw materials for building products and to raise excise duty on imported beer to 85 percent from 70 percent.
Chris Powell
Brunei Times takes note of GATA and FAME
http://www.bruneitimes.com.bn/section/opinion/19Dec2006-3.phpThe Dollar Has Fallen;
When Is Gold Dinar Coming?

By Dzikrullah W. Pramudya
The Brunei Times (Brunei Darussalam)
Tuesday, December 19, 2006

The veteran samurai of capitalism has acknowledged that his sword is no longer sharp enough to rule the world. Last week former US Federal Reserve Chairman Alan Greenspan said he expected the dollar to stay weak for the next few years and will continue to drift down, weighed by the US balance of payments deficit.

"I expect that the dollar will continue to drift downwards until there will be a change in the US balance of payments," Greenspan told a business conference via video-link from the United States to Israel. He said markets were so sophisticated it was very difficult to forecast the short term direction of the dollar.

Greenspan also noticed that OPEC nations were switching their reserves out of dollars and into euro and yen. "It is imprudent to hold everything in one currency," he said, adding that at some point the dollar will be moving lower.

What Greenspan failed to acknowledge was, in fact, that for such a long time it had been an imprudent act to hold ANYTHING in any conventional currency, any fiat money -- which is the paper money that is made legal and valued by the law. Dollar, euro, franc, mark, pound sterling, rupee, ringgit, peso, rupiah, bath -- none are backed by a real value. Fiat money has no intrinsic value, as opposed to commodity money such as gold dinar.

If tomorrow, for any reason, the US government declares its intention to devalue US$100 notes into US$10, then billions of people would not be able to do anything but submit and accept the reality that in the next 24 hours they would be much poorer.

No such threat with regard to gold dinar. Even if all governments under the sun declare that gold is valueless, not many people would even blink. Gold is gold, and people will always appreciate it as something highly precious.

The value of a 22-carrat gold dinar coin during the time of the Prophet Muhammad (peace be upon him) more than 1,400 years ago was exactly the same with its value today. Burn a piece of gold or melt it, its value would remain. Try to burn a bagful of US dollar notes and use the charred remnants to buy a plate of rice. A burnt piece of fiat money is useless. Worse, you do not even need to burn fiat money to render it useless. All you need to do is save it in a bank and never touch it; after several years the value of your money would certainly drop. In fact, the dollar value has kept sliding downwards against gold since 1970s until today.

Many people think that it is the nature of money and that inflation is to blame. But pressure groups in the US such as FAME (Foundation for the Advancement of Monetary Education) and GATA (Gold Anti-Trust Action Committee) have different thoughts. They are speaking out against the fiat money-based monetary system. "Because of material misrepresentations and nondisclosure regarding our fiat dollar, it is prima facie fraudulent," says Lawrence Parks, executive director of FAME.

Both organisations have long pursued a congressional reform in the monetary system. According to the FAME fact sheet, Congress has improperly delegated to the US banking system a power Congress does not have under the US Constitution: the power to create legal-tender-irredeemable-paper-ticket/electronic-fiat-token money out of nothing.

Since 1946, on a base of about US$150 billion, the U.S. banking system has created US$9.4 trillion up to 2005. About US$ 700 billion was created by the Federal Reserve, and the balance, about US$8.7 trillion, was created by private companies, banks. "Why should private companies be empowered to create money?" asks Parks.

We will let the Americans respond to the confusion that has influenced the world economy through their fiat money system. This article will focus on a solution -- namely the commodity money. In this case, the gold dinar currency is a solution.

Many people in Southeast Asia would usually see the gold dinar issue as political, launched in 2003 by then-Malaysian Prime Minister Mahathir Mohammad. In fact, Mahathir had been responding to the issue a long time after it was first raised by many Muslims. Mahathir said Malaysia would take the initiative to overhaul the international financial system by establishing the gold dinar as an alternative currency.

He criticised the current financial system as one that that was "skewed toward rich countries and speculators." He also stated that Malaysia would exert efforts to use the gold dinar for its trade with Iran for starters. If the initiative proved to be successful, Malaysia would extend it to cover 32 countries having bilateral payment arrangements with Malaysia.

Now the dollar has fallen. Why hasn't the gold dinar emerged yet, the way Mahathir and many other people have wished?

An answer came from the Jakarta-based Dinar Club president, Muhaimin Iqbal, who is also CEO of the oldest insurance company in Indonesia. Iqbal said it would be very difficult for the gold dinar to establish itself as an alternative currency without the support from sharia or Islamic banking. He said, "The only institution that can facilitate modern payment, transfer of the dinar, etc., is the sharia bank."

He pointed out how opening a gold dinar account would benefit the sharia bank as it protects people who save their gold dinar from interest (usury, riba). The important element that is still missing, said Iqbal, is the "niyat" or the political will of sharia banking and governments.

Iqbal specifically suggested that the wisest investment step for Bruneians, following the fall of the dollar (which will continue to fall, according to Greenspan's prediction), would be to keep their wealth in gold dinar. An alternative for the dinar currency, Iqbal said, would be to have pure gold bullion.

Iqbal said, however, that the gold dinar is not even the ultimate aim of an economic system. Wealthy people, especially if they are Muslim, should not let their wealth sit idle in the banks for a long time. It would still be better to invest in the real sector, or distribute it as "infaq" or "sadaqa" in the path of Allah, as this would be the best investment indeed. In the name of justice, Islam has forbidden the circulation of wealth only among the wealthy. This would be the best solution, indeed, for a world beset by chaotic financial systems.

-----------

The writer is managing editor of ISLAMIA, a journal for Islamic thought and civilisation, published in Jakarta, Indonesia.
Chris Powell
Where would gold be without last week's �410 million in ECB sales?
htttp://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061219%5cACQDJON200612190924DOWJONESDJONLINE000354.htm&ECB Gold Reserve
-�410 Million,
Forex +�200 Million
In Week to Dec. 15

By Saadia Hashmy
Dow Jones Newswires
Tuesday, December 19, 2006

LONDON -- The Eurosystem's reserves of gold and gold receivables fell �410 million to �174.056 billion in the week ended Dec. 15, the European Central Bank said Tuesday.

The Eurosystem's reserves of net foreign-currency increased �200 million to �152.8 billion during the period.

The ECB said cash in circulation rose �3.7 billion to �613.9 billion.

Meanwhile, liabilities to the general government fell �20.7 billion to �44.3 billion.

The Eurosystem consists of the Frankfurt-based ECB and the 12 euro-zone national central banks.
Chris Powell
These people will be TOASTING the IMF
http://news.yahoo.com/s/ap/20061219/ap_on_bi_ge/wall_street_bonusesWall Street Bonuses
Flood NYC's Economy

By Adam Goldman
Associated Press
Tuesday, December 19, 2006

When Michael Aaron learned that Wall Street investment banks were going to be shelling out record bonuses this holiday season, the savvy wine merchant uncorked his own plan to make serious dough. He paid for a double-page advertisement in The New York Times, boasting a rare bottle of 1995 Dom Perignon. The price tag -- $14,950.

"We thought we'd put this temptation out there," said Aaron, chairman of Sherry-Lehmann wine store on Madison Avenue.

The $15,000 bottle of bubbly is just one example of how record Wall Street bonuses this year can trickle through New York City's economy. People are buying multimillion-dollar apartments. They are driving $40,000 BMWs out of the showroom.

A report released Tuesday by the state comptroller said Wall Street is expected to pay out $23.9 billion in bonuses, shattering last year's record by 17 percent.

The impact of such bonuses on the New York economy is profound.

Bonuses are expected to generate $1.6 billion in tax revenues for New York state and another $500 million for New York City. For every job created on Wall Street, three other jobs are created in the city and suburbs.

"Wall Street jobs create jobs," said Ken Bleiwas, deputy comptroller. "Why? Because they are pumping money into the economy. They're going out restaurants, they are purchasing all kinds of consumer goods."

The most jaw-dropping bonuses are being doled out by Goldman Sachs Group Inc., the world's largest investment bank. The company reported a staggering profit last week of $9.4 billion and said it was dedicating $16.5 billion for salaries, bonuses and benefits at the end of the year.

The upper echelon of Goldman Sachs -- called the "golden 25" -- could get at least $25 million each.

Lehman Brothers Holdings Inc. and Bear Stearns Cos. said they would pay out about $12 billion in compensation -- more than $300,000 per employee.

Morgan Stanley Inc., the second-largest U.S. investment house, gave chief executive John Mack $40 million in stock and options for 2006, reflecting one of the largest bonuses awarded to a Wall Street CEO.

The bonus numbers are especially mind-boggling when compared with the salaries of average New Yorkers.

The comptroller estimated that bonuses will average $137,580 in 2006, although most Wall Streeters make much more than that. Excluding people working on Wall Street, the average New Yorker earned $56,634 in 2005. Wall Street accounts for less than 5 percent of all the jobs in the city but more than 20 percent of the wages.

"When Wall Street does well, New York City and New York state do well," Comptroller Alan Hevesi said. "Wall Street bonuses are spent in the city and in surrounding suburbs on entertainment, real estate, automobiles, and other consumer goods, all of which generates jobs and tax revenues."

Real estate is a big beneficiary of bonuses, as plenty of bankers look to upgrade their digs or buy their first pad.

"A lot of my Wall Streeters have been pounding the pavement anticipating the bonuses," said Louise Phillips Forbes of Halstead Property. "They're prepared to pay a tremendous amount of money."

Earlier this month, Forbes said, she sold 11 apartments. More than half of those buyers worked on Wall Street. Forbes says she has about 200 apartments for sale ranging from $500,000 to $6 million. Many of those, she said, will go to bankers.

Forbes said the bonuses heat up the market in another way. Those who do not work on the Street try to close on new homes before those beefy bonuses arrive.

"People started buying before bonuses were even announced so they wouldn't compete with Wall Streeters," Forbes said.

Gregory J. Heym, chief economist for Brown Harris Stevens, said it's difficult to say whether bonuses cause real eastate prices to spike in certain neighborhoods.

"I think a lot of it is going to get masked in the fact that the sales won't close for a long time because they're in new developments," he said. "That sort of makes it hard to attribute any increase to bonuses."

Jeff Falk, president of BMW of Manhattan, has an advantage over real estate brokers.

They can't bring their wares to doorstep of the investment and banking community, but he can.

In July 2005 BMW of Manhattan opened a second showroom on Wall Street. He said his company plans for bonuses, ensuring it has enough inventory to satisfy any urges to buy a sleek BMW.

Falk said he's running an ad that says: "My bonus is faster than your bonus."

And you can't forget that Wall Street essential -- the fancy suit.

"It definitely means business," said Phil Kornblatt, director of retail for Hickey Freeman, a maker of fine suits that are popular on Wall Street and routinely cost $1,500. "We noticed a big increase in sales, and I believe most of it is due to the bonuses."

Charles de Rancher, 24, works in New York for Bayern LB, a German financial institution. The conservative Frenchman says he has no intention of running out and buying a car or taking a trip to Las Vegas.

Like many young financial whizzes, Rancher is going to invest his money in a safe place, one that promises a decent return over the long haul.

"I'm sorry; I'm a pragmatic guy," he said. "The bonus goes to repayment of the principal on my new mortgage."

So far nobody has snapped up Aaron's "Methuselah," a 6-liter bottle of champagne.

But he's hoping. Hoping some Wall Street executive with multimillion-dollar bonus buys it for a New Year's party, making it the most expensive bottle of any wine he's ever sold.

"It would be one hell of a New Year's party," Aaron said.

And one heck of a bonus for Aaron.

USAGOLD Daily Market Report
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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.

December 19 (from MarketWatch) -- Gold futures closed with a more than $7-an-ounce gain Tuesday, marking their first winning session in four. "Today's surprisingly high inflation figures are spurring the metal markets higher as the U.S. dollar drops on the news," said Peter Spina, chief investment strategist at GoldSeek.

"It is not hard to get into the market which has corrected back to the low $600s; bargain hunters were delighted by the sell off," he said.

The February contract rose $7.50 to close at $625.40 on the New York Mercantile Exchange. The contract, which closed Monday under $618 at a seven-week low, had tallied a loss of $14.50 over the past three sessions.

The dollar fell against the euro Tuesday after a key survey of Germany's business climate rose to its highest level in 16 years, boosting expectations interest rates in the eurozone would climb further next year.

The weakness allowed precious metals to rebound from Monday's lows -- levels gold and silver prices haven't seen since the end of October. The decline in the dollar comes even after U.S. government reports showed producer prices soared in November, rising at the fastest pace in decades, while construction of new homes rebounded last month.

Producer prices rose much more than expected in November, as the core producer price index rose by the most since July 1980, the Labor Department said.

The November producer price index climbed by 2%, the biggest rise since November 1974, according to statistics.

Meanwhile, construction on new homes rebounded in November, rising 6.7% after a whopping 14% drop in October, the Commerce Department said.

Building permits, meanwhile, fell 3% to a fresh nine-year low.

---(see url for full news, 24-hr newswire)---
Topaz
PoG.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=Having watched this now for several years, it has occurred to me that "no-one" knows how to trade Gold at this level ...hence the erratic price behaviour inclined to the downside.
She's beaconless in a sea of paper, and could, at any time do wonders.
mikal
Deeper and deepa
http://economictimes.indiatimes.com/Markets/Commodities/Gold_could_hit_800_in_near_term_Paul_Walker/articleshow/856578.cmsGold could hit $800 in near term: Paul Walker
Interview by Deepa Krishnan | The Economic Times
Wednesday, December 20, 2006
Easily a pass over, skip over article rating a 2 out of 10 IMO. GFMS's Walker doesn't go much deeper than Deepa's
questions allow.
But this gold organization big cheese does acknowledge
a bull market,
though little else. Walker makes some obvious, minor points as he works in misrepresentations and deprecations almost like Jessica Cross. And tries oh so hard to sound like a goldbug, which he may in real life be. But like ex-Chairman Greenspeal, his lecture is purely academic and rated for public consumption.
Lackluster
Thoreauly @ Amero ?
Disclaimer: I know verty little about currencies, trading etc. I also have not been folowing the "Amero" rumors to sense how real they might be.


Someone posting on another site suggested that if the Amero were to be introduced, it might first be used for international transactions, or transactions between the US, Mexico, and Canada, leaving the Dollars and Peso for domestic use.
Thoreauly
The Mogambo Guru on the amero
http://www.safehaven.com/article-6550.htm-- Susan asks "With the collapse of the dollar on the horizon and the 'Amero' lining up to take its place, how will this new currency affect our gold and silver?"

For one thing, the Amero is supposedly a proposed new common currency for (at least) Canada, the U.S. and Mexico that will replace our individual moneys, including the dollar, and morph us all seamlessly into one big, happy, multi-lingual, multi-cultural family with vast income and wealth disparities, which is funny enough in itself that rational people would even contemplate such preposterous stupidity.

But the economic mess that is engulfing us, precipitated by the dollar getting destroyed by the actions and inactions of the Federal Reserve and Congress for so many years, has to be resolved somehow! Why not the Amero? And if not the Amero, my Darling Mogambo Cherub (DMC), then what?

And with a worthless dollar, soaring inflation and a grumpy electorate, what better solution than to (like most other countries in history have done in times of their own well-deserved economic crises caused exactly like ours) expropriate the resources and assets of some other countries, such as Canada and Mexico? Hahaha! America at its finest hour! We have evolved to the point where we Americans can now, literally, conquer other countries, and acquire their assets and resources to bail us out of the economic mess we created (which is the impetus for all wars), all without firing a shot! Or even threatening to! A miracle of modern politics and corruption!

As to whether or not it is true, there surely are people who desperately want it to be true because they are all lining themselves up to make a big profit from it somehow.

And for how it affects gold, it will have, at worst, no effect, as that is the beauty of gold; it is impervious to currencies and their depredations, and its buying-power value over the last 4,000 years is almost a constant, which is the whole point of how gold "preserves wealth"!

In the best-case scenario, gold (and silver, and all commodities) will soar like they always have in the inevitable bust at the end of long booms, which are always financed by the massively excessive creation of money and credit, via the historically timeless and brainless expedient of a fiat currency, a reckless banking system and a complicit, intellectually-corrupt government.

And with the absolute, 100% certainty of a bust happening again, just like it always has, without exception, for thousands of countries and thousands of currencies in the last thousands of years, gold will rise triumphant, just as gold has always risen triumphant! And that one fact, alone, explains why I am always strongly suggesting, in a very loud and irritating voice, for you to get silver and gold right (pause) freaking (pause) now, if not sooner.
Minero
"Amero" North American Union, etc.
http://www.amerocurrency.com/index.htmlIt looks as though the White House has started a concerted effort to move us toward a "North American Union". I see this as another contention plan to be used only in the event of an economic crisis. Whenever the "Dollar Crisis" finally occurs, it will be quite convenient to invoke a totally new monetary unit with a new set of partners. This will facilitate our negating all "dollar" debt. Our "new union" can get off scott free.

This may sound very outlandish, but the world is now in totally untested waters. Anything can occur, and anything now flies. Realistically, are we going to pay our debts?
Thoreauly
It's only just begun
http://www.commondreams.org/headlines06/1219-10.htm
The precursor to the NAU, the Orwellian named Security and Prosperity Partnership (i.e., security and prosperity for whom) only came into existence last year -- http://www.spp.gov -- and so has so far received very little attention. But as it lays the necessary groundwork for both the NAU and the amero, developments both at home and abroad need to be watched closely amid the dollar's decline.

Who knows what the tipping point will be, but again, as the American people would never vote the NAU into existence, it will have to come about via a government edict of some kind, which in turn will require additional government authority.

My guess is that it will come in the form of martial law established amid a national emergency relating to the invasion of Iran that the theocons remain so hungry for and that the Bush-Cheney cabal may view as the only alternative to a legacy of unmitigated failure. After all, there's no way they can turn the fiasco in Iraq over to a successor, even a Republican one, without being savaged by history for what some have rightly called the greatest foreign policy disaster in the history of the country.

What to do in the meantime?

Follow the Mogambo Guru's advice, of course and "get silver and gold right (pause) freaking (pause) now, if not sooner."
ge
Amero
I guess the introduction of Amero would not affect the bull market in gold. I have a feeling that everyone is resigned to the fact that the gold bull cannot be stopped. The question appears to me, "who shall control the next fiat money expansion, after the gold bull is concluded?" If true, this would indicate that, an astronomical gold price should be preferred by everyone, so that the currency manipulators should be free from worrying about the gold price in the initial phases of next credit expansion; provided of course other people (asians, muslims, ufo's etc) can be blamed for what happened to the currency.

Amero area appears to be well positioned for the next inflationary cycle, with Mexican demographics, Canadian resources and US management.

Can one entity (amero, euro, yuan, ruble etc) govern the world as Pound did in the 19th century and Dollar did in the 20th? I guess not. May be Amero is just for survival in the post-crisis era.
Thoreauly
"Gold and Deflation"
http://www.lewrockwell.com/north/north497.html
I'm an admirer of Garth North but confess I'm a bit surprised by his latest offering (see link), not because of his assessment of gold's performance over the last several decades) but of his agreement with Robert Anderson, his successor at the Foundation for Economic Education, who writes:

"Perhaps you are more optimistic about the future direction of the world's economies than I am, but I simply cannot imagine central bankers in hampered market economies anytime soon engaging in hyper-inflation, followed by a return to gold as money. We live today in an age of fiat monies manipulated by government central bankers who know it would be an act of utter irrationality to destroy their fiat monies and, further, know a return to gold as money would destroy their monetary power."

Well, who CAN imagine the banksters doing that, but that's not the point. The point is that because inflation is the name of the game in central banking, and because the banking cartel is nothing more than a den of thieves, with no honor among them, it's only a matter of time before one of them panics, not to return to a gold standard but simply to flee the dollar as it inevitably inflates itself out of existence. It's the nature of the game, after all, and thus not a question of how the game will end but when. And since central banks, among others, are already starting to diversify out of the dollar, surely "when" will be sooner rather than later.

As for resorting to "direct controls," no doubt this will be attempted, but like all such controls -- for which the NAU and the amero will be no exception -- all they can do is postpone the inevitable and indeed make the return to Earth that much worse for postponing it.

So while Anderson concludes by saying, "Of course gold as money will eventually evolve but, unfortunately, it will be in some far distant free society beyond our time," I say horse-hockey, simply because, for all their power, the central banks aren't omnipotent and that just because they've managed to perpetuate their fraud this long hardly means that they will be able to do so into the far distant future.

Hell, it may end tomorrow morning.
Thoreauly
Why banks love inflation
http://www.financialsense.com/editorials/saxena/2006/1220.html
As Puru Saxena writes (see link):

"You must understand that banks are in the business of lending money and inflation benefits them immensely. The higher the rate of inflation (money-supply and credit growth), the bigger their profits from collecting interest on the issued loans. Moreover, inflation also keeps a segment of the public happy (at least those who have the ability to invest) as their assets continue to rise, thereby giving the illusion of prosperity. So, the hidden agenda of the central banks and politicians is to create and encourage inflation, whilst telling the public that they are in fact fighting inflation!"

Simply put, since inflation is the sword banks live by, it is the sword they will die by.

In Gold We Trust.
Topaz
Au:Ag.
http://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339Rather than sitting around knitting beanies as we await the next Gold uptick, it might be a worthwhile exercise to track the ratio.
When it updates today the line will be hard up on RSI 70, indicating the upper limit for Silver ...previous indications show a reversal in Aggies fortunes, as compared to Gold, is imminent.

Lets watch!
Goldilox
Global systemic crisis in 2007 - Financial sector: � Another bubble � close to bursting
http://www.leap2020.eu/GEAB-N-10-is-available!-Global-systemic-crisis-in-2007-Financial-sector-Another-bubble-close-to-bursting_a317.htmlsnip:

A large number of events - whose importance began to appear clearly at the end of 2006 - is about to thrust the world's financial sector into a process of deep crisis: depreciation of US dollar-denominated assets, monetisation of US debt, fast degradation of US banks' and of some EU banks' balance-sheets, low level of banks' reserves, fast depreciation of housing loans (2) and recession of the US economy.

For example, the value of US dollar-denominated assets worldwide (3) compared to the composite basket of currencies of the US main trade partners, decreased by USD 2,000 billion only because of the US currency's loss in value. Another example, because of the same devaluation, the US debt fell by more than the US trade deficit's worth (forecast: USD 750 billion) or than the balance of payment deficit's worth (forecast: USD 900 billion) (4).


The monetisation of the US debt (anticipated in February 2006 by LEAP/E2020 (5)) directly affects the balance sheets of the big international financial players, with some effects that should become more obvious in 2007.

In the United States, a growing number of financial institutions is beginning to announce that the bursting of the real-estate bubble and the increasing amount of default on housing loan repayments has started to impact on banks' (6) and loaning institutions' results. For instance, due to the market's fast degradation, the US government non longer even tries to look into Fanny Mae's and Freddy Mac's accounts, the two giant quasi-government financial institutions who together weigh more than half of the US mortgage market (7). Thus Fanny Mae has not presented any quarterly or yearly report since 2004 and must ask for an exemption in order to remain listed on the New York Stock Exchange (8) and continue to increase its market share. Less than a month ago, Kevin M. Warsh, governor of the New York Federal Reserve, warned against risks of systemic crisis for the US loan mortgage market due to Fanny Mae and Freddy Mac accounting practices (9). Those risks are likely to cross US boarders since foreign investors, namely Asian, who walked away from US Treasury Bonds, have started a few months ago to buy Fanny Mae and Freddy Mac stocks.

Moreover, for many years, the US authorities have allowed banks to diminish drastically their asset reserves while making massive bets on the derivatives market where the risks are high. The chart below shows how those Wall Street's giants (such as JPMorgan/Chase or CityBank or Bank of America, who were on top of all financial news in the past months), with counterparties close to none, are in fact doomed to bankruptcy in case a big crisis occurs. This provides a rather eloquent image of the frailty of the hedging sector banks invested in so massively.

-Goldilox

See the URL for some good charts and noted references.
mikal
The "high-yield" emporer wears no clothes!
http://www.ft.com/cms/s/3ebf8ce4-8fce-11db-9ba3-0000779e2340.htmlHigh-Yield Risk Looks Riskier By Richard Beales and Saskia Scholtes | Published: December 20 2006 02:00 | Last updated: December 20 2006 02:00 -- Excerpts:
"The corporate high-yield bond market has been riding high this year. Investors enjoyed low volatility and healthy returns of about 11 per cent - more than any other category of fixed-income assets. Issuers and private equity groups have benefited from easy access to capital as high demand pushed risk premiums lower.
This led to record issuance of $122.7bn of bonds in the US and $66.2bn in Europe, according to Dealogic. Leveraged loan volumes also spiked, with a record $629bn originated across the US and Europe, according to Standard & Poor's LCD, the information provider. "Every single milestone in high-yield has been exceeded this year," says Jim Casey, co-head of leveraged finance at JPMorgan.
However, analysts say there are signs that the buoyancy of 2006 has left little headroom for further gains. Some warn that this year's ample liquidity has spawned increasingly aggressive leveraged buy-outs and looser lending standards that may have suppressed early symptoms of distress in the market."
Mikal-- Heads up on more signs of the times. Like the replication of derivatives themselves, dark developments turn up in the media despite themselves.

"Thomas Haag, portfolio manager at Seneca Capital Management, says: "We are starting to have concerns about 2008 and beyond - with higher leverage and riskier debt, there is a chance that today's speculation and LBO activity will come back to haunt the market.""
Mikal-- Time and time again they come back to feed on obligatory public offerings made acceptable and fresh.
But gold is the only real protection against the sudden exposure to the rank and decayed core beneath the surface:

"Analysts across the street say that low defaults appear to have reduced investors' risk aversion, as shown by low equity market volatility readings and the low cost of insuring against corporate defaults in the derivatives market.
The problem is that investors may not be adequately pricing risk, since market liquidity has made it possible for risky companies to borrow on increasingly favourable terms, often using the proceeds to boost their share prices.
As a result, leverage levels for high-yield bond deals have been creeping higher, with US companies issuing debt worth on average 4.4 times their earnings before interest, tax, depreciation and amortisation.
According to data from Standard & Poor's, the ratings mix of new deals in 2006 saw a steady deterioration. In the US market, a sizeable $39bn of debt, accounting for about 30 per cent of total issuance, was rated B- or lower.
And while thus far there have been few signs of an abrupt reversal of fortune for high-yield in 2007, analysts say that the market may have priced in too much good news."
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WEDNESDAY Market Excerpts

December 20 (from MarketWatch, Reuters) -- Gold futures fell Wednesday to close under $625 an ounce following a more than $7 gain in the previous session, while rising supplies pushed copper prices to their lowest level in six months. "Increased volatility due to the holiday season will keep the metal vulnerable to sharp downward movements," said James Moore, an analyst at TheBullionDesk.com in London.

February gold contracts closed down $1.10 at $624.30 on the New York Mercantile Exchange. On Tuesday, the contract closed up more than $7 an ounce, marking its first winning session in four.

"Gold recovered well before the euro did against the dollar because of a fundamental tide of favorable factors outweighing the recent fund selling," said Julian Phillips, an analyst at GoldForecaster.com.

Gold started higher in early business when the dollar continued to show weakness against the euro and the yen. The euro climbed to a fresh record high against the yen and gained on the dollar after European Central Bank President Jean-Claude Trichet warned of higher inflation next year.

"With some more consolidation expected before the next direction is clear, what is clear is gold's attractiveness to investment demand in this area of consolidation, whereas previously this demand was seen only when gold prices rose," said Phillips.

Overall, "traders and investors appear to be ignoring the report that wholesale prices jumped in November by the largest amount in 32 years, led by increases in energy prices and new vehicles," said Kitco's Jon Nadler, an investment-products analyst.

"They also seem to be paying little attention to the unfolding Thai financial crisis although there surely must be significant gold buying going on internally in that country in the wake of a 20% drop in the stock market," he said.

Traders said they expect conditions to remain quiet for the rest of 2006.

"The liquidity is quite a bit reduced now going into Christmas. So I don't think we're going to see a lot of things happening in the metals unless it happens right at the year end, like the last day or two," said one metals dealer.

At this point, traders said they thought most precious metals participants were just waiting for 2006 to run out. One broker noted that this Friday will effectively be a half day with many players leaving early for the long holiday weekend, and London traders will already be leaving early for their holidays at the time New York opens.

Noting that Monday is Christmas and Tuesday is Boxing Day in the U.K., he said, "London won't be back to establish any kind of market until Wednesday. At this point, the market is just waiting to turn the calendar page to January."

---(see url for full news, 24-hr newswire)---
melda laure
SPP Myth vs. Fact.... vs "we're just talking"
http://www.spp.gov/myths_vs_facts.aspSNIP:

Myth vs. Fact
Myth: The SPP was an agreement signed by Presidents Bush and his Mexican and Canadian counterparts in Waco, TX, on March 23, 2005.

Fact: The SPP is a dialogue to increase security and enhance prosperity among the three countries. The SPP is not an agreement nor is it a treaty. In fact, no agreement was ever signed.

Myth: The SPP is a movement to merge the United States, Mexico, and Canada into a North American Union and establish a common currency.

Fact: The cooperative efforts under the SPP, which can be found in detail at www.spp.gov, seek to make the United States, Canada and Mexico open to legitimate trade and closed to terrorism and crime. It does not change our courts or legislative processes and respects the sovereignty of the United States, Mexico, and Canada. The SPP in no way, shape or form considers the creation of a European Union-like structure or a common currency. The SPP does not attempt to modify our sovereignty or currency or change the American system of government designed by our Founding Fathers.

Myth: The SPP is being undertaken without the knowledge of the U.S. Congress.

Fact: U.S. agencies involved with SPP regularly update and consult with members of Congress on our efforts and plans.

Myth: The SPP infringes on the sovereignty of the United States.

Fact: The SPP respects and leaves the unique cultural and legal framework of each of the three countries intact. Nothing in the SPP undermines the U.S. Constitution. In no way does the SPP infringe upon the sovereignty of the United States.

Myth: The SPP is illegal and violates the Constitution.

Fact: The SPP is legal and in no way violates the Constitution or affects the legal authorities of the participating executive agencies. Indeed, the SPP is an opportunity for the governments of the United States, Canada, and Mexico to discuss common goals and identify ways to enhance each nation's security and prosperity. If an action is identified, U.S. federal agencies can only operate within U.S. law to address these issues. The Departments of Commerce and Homeland Security coordinate the efforts of the agencies responsible for the various initiatives under the prosperity and security pillars of the SPP. If an agency were to decide a regulatory change is desirable through the cooperative efforts of SPP, that agency is required to conform to all existing U.S. laws and administrative procedures, including an opportunity to comment.

Myth: The SPP will cost U.S. taxpayers ...

END SNIP...

Daro! Yerch! Gaaaa!
It's not an agreement, not a treaty, we're just shootin' the breeze and playing horseshoes down on the ol' ranch.

I see, it is "just dialog" in the same way that the income tax is "voluntary" - that is to say "for suitably worded definitions of voluntary"

And gold is "only metal" for suitable definitions of "only". The customer can have any color as long as it's black, and the condemed may have any choice of activities as long as he chooses a noose.

On the bright side, once congress is eliminated, we can have an old fashioned rebellion and finish the "war against Washington's Aggression" properly. Maybe we can get rid of Ottowa and the DF (mexican federal district) while we're at it.

I hear Gaelic is a popular language in Scotland these days.
Thoreauly
@ melda laure re: SPP Myth vs. Fact

Yes, and speakng of the income tax, let's not forget that when it was instituted in 1913, it only affected the richest 1% of Americans, with a top rate of 7%, which it was never to have exceeded, only to soon rise above 90% and affect all but the poorest Americans.

Myth vs. Fact? You decide.
Federal_Reserves
The world's largest armies
* People's Republic of China: 2,225,000 troops
* United States: 1,426,713
* India: 1,325,000
* North Korea: 1,106,000
* Russia: 1,037,000
* South Korea: 687,000
* Pakistan: 619,000
* Turkey: 514,850
* Vietnam: 484,000
* Egypt: 450,000

mikal
"Monetary policy screwup" to be official trigger?
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_gilbert&sid=ady1Bv15X8zMBonds, Stocks, Gold Can't All Subsist in Nirvana: Mark Gilbert
By Mark Gilbert
Dec. 21 (Bloomberg) --Excerpts: "Financial markets have achieved something akin to Nirvana in the past six months. The U.S. bond futures contract has climbed 6 percent. The Standard & Poor's 500 Index has surged 14 percent. Gold has gained 8 percent. In the argot of traders, securities are priced for perfection.
They also look poised to dichotomize. Investors typically buy bonds when slowing growth curbs consumer-price gains and central banks cut interest rates. Equities are in vogue when economic growth is fast enough to bolster earnings. Rising gold prices are usually evidence of people seeking an inflation haven."

Mikal-- A short, unique frame of reference on the U.S. economy comparing bonds, equities and gold.
Despite ignoring many U.S. and world markets, global debt, trade imbalances & competitive currency devaluation, pension shortfalls, market manipulation etc, much insight is given on establishment thinking.
Now read the final, gold segment of this opinion piece for entertainment and sublime edification as an ironic endorsement of gold. You'll see how trivializing and misrepresenting gold's past, present and future roles is
actually fun if you end with "it's hard to see why gold will glitter unless central banks screw up on monetary policy."!
Also, note that more than ONE(U.S.)"central banks" suddenly coming into the picture in a big way, by implication, undeniably:

"Can Gold Still Glitter When Inflation Looks Dormant?
``Some have argued that globalization and the move toward more competitive markets have reduced inflationary pressures, thus making inflation targets easier to reach,'' Swiss National Bank President Jean-Pierre Roth said last week. ``As long as this continues, and central banks succeed in keeping inflation under control, the appeal of the gold standard will remain limited.''
Prices in the inflation-linked government-bond markets suggest rising consumer prices aren't a concern to investors. In the U.S., yields indicate an average inflation rate of just 2.3 percent in the coming decade, while in Europe the figure is about 2.2 percent.
Switzerland has sold about half of its gold since May 2000, leaving it with about 1,290 tonnes, according to the World Gold Council. Total gold reserves held by the world's central banks have dropped by more than 8 percent in the past six years, according to data compiled by the International Monetary Fund.
Gold is still an important store of wealth for individuals in Asia. As growth explodes in China, India and their neighbors, gold will still find a bid from wealthy entrepreneurs with a mistrust of banks or a disinclination to pay taxes. At the risk of offending the gold bugs, who are numerous and apt to hurl abuse at commentators who opine on their precious metal, it's hard to see why gold will glitter unless central banks screw up on monetary policy."
TownCrier
Thai official calls for global action on the dollar -- Central banker asks global regulators to help
http://www.iht.com/articles/2006/12/20/business/baht.phpDecember 20, 2006, BANGKOK: ...the governor of the Thai central bank, Tarisa Watanagase, Wednesday ... portrayed Thailand as a victim of the large imbalances in trade and savings that send trillions of dollars sloshing in and out of developing countries.

"This is not a problem unique to Thailand," Tarisa said during an interview. "I'm sure that if this sort of problem is not cured in a cooperative manner, we could see similar measures elsewhere."

By imposing capital controls on Monday, Thailand sought to slow inflows of foreign money because it had resulted in a double-digit appreciation of its currency against the dollar since the start of the year. Tarisa urged the International Monetary Fund or the Asian Development Bank to find a solution to the problem. Otherwise, she said, "The smaller, open economies will have to take the issue into their own hands."

Tarisa and other top Thai finance officials have come under strong criticism here after the sharp drop in the market was followed by the reversal on the capital controls.

...Tarisa said the biggest failing was a lack of communication with investors when the new rules were announced Monday. "There was not enough communication in English in terms of the details of the regulation," she said. "That was the major problem."

The bank had been battling to contain a surge of short-term investments into the baht, she said, particularly into the country's market for corporate bonds and commercial paper. On Dec. 4, the bank issued restrictions on foreign investment in the bond market, but the measures failed to have any impact.

The bank then decided to issue blanket measures on all foreign investment ... But the response in the market was more than the bank had anticipated, Tarisa said. "Investors overreacted well beyond our expectations," she said.

"We know very well that we cannot go against the market," she said.

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

Two points come to mind in the growing role of gold in both the public and private sector.

First, with regard to tangible ownership of the metal as property rather than as a derivative contract, a "failure of communication", in English or otherwise, is largely a non-issue.

Second, for many coalescing reasons, gold holds the market's eye, has done so for centuries, and as Tarisa says, there's no going against it, depsite recently-failed reserve experiments to the contrary.

R.
TownCrier
More news on price-discovery, markets, and bilateral trade negotiation...
http://www.mineweb.net/whats_new/527968.htmHEADLINE: China to create second global commodity market

20-DEC-06, JOHANNESBURG (Mineweb.com) --China might create a second global commodity market in the next 15 to 20 years in order to exercise more control over commodity prices that are currently being determined in Paris, New York and London.

Sanu Sha Naidu, research fellow at the Chinese Centre of the University of Stellenbosch, says that Chinese concern over prices determined in markets that they have no control over, may give rise to a second market joined by emerging players and Asian drivers of commodity demand.

Naidu said the Chinese were asking themselves why they would pay a steep price for commodities such as iron ore if they could bilaterally negotiate a more competitive price.

"They feel that commodities are unfairly priced and that they are paying too much. The view is that countries that are sourcing the resources, or those that supply it, do not determine the price.

"This creates a problem and raises the question of do we disengage and create our own, second commodities market."

...Naidu said the argument made is similar to the argument around the pricing of coffee beans that was raised in the 1980s.

"The coffee beans were produced on the African continent, while prices were determined and depressed by markets elsewhere.

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

In that final bit, the lesson comes when you substitute the word "gold" in place of "coffee", and the reference to 'markets elsewhere' could easily be taken as the derivative-based COMEX gold trading pits in New York or the paper-gold intensive LBMA affairs in London.

Participants in the REAL economy are increasingly heard to say, "Enough (paper) is enough already!"

R.
Chris Powell
Reg Howe: Gold derivatives -- elephant in the boardroom
http://www.goldensextant.com/commentary33.html9:25p ET Wednesday, December 20, 2006

Dear Friend of GATA and Gold:

Reginald H. Howe, plaintiff and litigator in the first federal gold price-fixing lawsuit and consultant to GATA, has studied the latest figures on derivatives in gold, silver, and commodities, as compiled by the Bank for International Settlements. He concludes that the Western central banks and their agents are using fewer forwards and swaps and more options to restrain prices. Maybe this is because the real goods are running out, leaving only paper to deceive the markets with.

Howe also raises the question raised in GATA's dispatches recently as to whether the bull market in commodities is a matter not only of growth in the developing world but also the monetization of commodities there and in the developed world -- the onset of what von Mises called "the crack-up boom," when people begin to realize that there will be no restraint on the money supply and that holding anything real is infinitely preferable to holding ordinary currency sure to depreciate quickly.

Howe concludes:

"The scourge of unlimited paper money is an addiction, operating on society much as alcohol or drug addiction does on an individual, and just as hard to shake. Derivatives are more like a malignant cancer. In scarcely more than a decade, they have rapidly metastasized to exert a controlling influence on the fundamentals of world finance, particularly interest rates. An international financial system beset by both afflictions cannot have a bright future.

"Dreams of four- or even five-digit gold prices are thus in the cards. But when this house of cards collapses, even gold bugs are unlikely to enjoy the world that follows, proving once more the wisdom of the old adage: 'Be careful what you wish for; you may receive it.'"

Howe's essay is titled "Gold Derivatives: Elephant in the Boardroom," and you can find it at the GoldenSextant Internet site here:

http://www.goldensextant.com/commentary33.html

It is probably the best and best-documented description of what is happening in the financial world at the moment. Of course GATA is working on averting the disaster whose outlines are becoming plain, but, just in case, you might want to check the classifieds for condos on Mars -- or in Tibet anyway.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Chris Powell
James Turk: Three strikes against the dollar
http://goldmoney.com/9:45p ET Wednesday, December 20, 2006

Dear Friend of GATA and Gold:

James Turk, founder of GoldMoney, editor of the Freemarket Gold and Money Report, and consultant to GATA, has just called a third strike against the U.S. dollar.

The first strike, Turk writes, was Iran's conversion from dollars to euros. The second was the U.S. government's proclamation of a ban on melting one-cent and five-cent coins now that their metal value exceeds their currency value. And the third -- a strike against not only the dollar but also the euro and the yen -- is an expansion of government control over economies, including the prospect of capital controls such as Thailand briefly experimented with this week.

Turk's new analysis is titled "Three Strikes Against the Dollar" and you can find it in the "Founder's Commentary" box at the top left of the GoldMoney home page here:

http://goldmoney.com/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
RAP
Coincidence or preparing?
http://www.ynetnews.com/articles/0%2C7340%2CL-3342489%2C00.htmlBush says bigger military size is necessary
http://news.xinhuanet.com/english/2006-12/21/content_5513646.htm
Ahmadinejad: Iran now nuclear power
Thoreauly
US military buildup
http://towardfreedom.com/home/content/view/911
And with Bush having recently suspended the Posse Comitatus Act (see link), the way is now open not only for greater military intervention abroad (i.e., in the Middle East) but for martial law at home.

As for the world's largest armies (Federal_Reserves #150379), when "defense" departments as a whole are compared, there's already no comparison, as the US military budget "is larger than the military budgets of the next twenty largest spenders combined, and six times larger than China's" -- http://en.wikipedia.org/wiki/Military_of_the_United_States#Expenditures

Let's face it, what we are witnessing is the desperate attempt of a collapsing empire to save itself from itself, which history has gone out of its way to prove cannot be done.
Goldilox
MIlitary "budgets"
@ Thoreauly,

Gotta wonder if there are as many billionaires slopping at the trough of China's military budget as there are feeding in DC. We got so tired of hearing about $700 hammers and toilet seats during the Reagan buildup, that no one bats an eye when a few $billion go missing these days.

Of course, my favorite is the domestic rip-off of 85% of the New Orleans reconstruction funds by many layers of well-connected "subcontractors". It's tragic to watch them the "low contractor on the totem pole" bus in aliens to "make ends meet", leaving the American citizens who most need work in refugee status of their own. IMHO, this is Globalism at its worst!

If we assume similar levels of graft and waste in our impressive military expenditures and not so well documented foreign "adventures", the budgets are hardly a reasonable comparison of battlefield readiness, as Viet-Nam and Iraq have clearly demonstrated. We have the power to annihilate, but obviously lack the power to control.
Goldilox
How bad was the Pacific NW storm?
Here's ring-side view from Cliff, of the Web-bots.

Salve omnes,

Well, we're back, sort of. Electricity returned to our
street last night at midnight after 6 days , 12
hours without any. My efforts at rebuilding the
diesel generator were successful in the main,
however, only a few hours later, the local
electrical utility showed up to work the street.

It was so bad that 2/two trailers of power poles
were required on our street alone, and it took
7/seven crews over 18 hours to repair the
damage here and return the spark to life.

Igor is not so lucky. He and wife and 2/two cats
have been camped out at either his office (from
1/one of his other 3/three jobs) or over at friends.
Her school is off on break, so no worries there.
Igor says they will have electricity back on late
Sun or Monday.

It was indeed nasty out here. On a road of only
2.25 miles in length, there were over 50/fifty down
trees. And these are not small critters, but each a
large fir over 100/one hundred feet in length. The
wind meters on a local fence were ripped off in a
88 mile gust (last recorded speed before failure).

My growdome of some 1900/nineteen hundred
pounds weight was lifted 8/eight feet off the
ground and smashed 10/ten feet away. This is
just a small part of the damage.



????
Survivor
More Pacific Storm

We just came back on-line also. Six+ days of self-reliance is always a wake-up call. As part of this discussion community, no one will be surprised that six days did not stress our ability to be on our own. We used all 15 gallons of fuel stored with the small generator, but did not start the big generator or use any of the 90+ gallons of fuel stored there. The stored fuel and the frozen food would have lasted another 20 days or so. It is sobering to consider the food scenario after 30 days.

Heat and water were not a problem as the wood shed is full and the lake is only a short walk.

After the first day, the downed trees were cleared from the only road and we could get out for supplies, but it was very nice to know we didn't really need anything.

The long quiet evenings left plenty of time to contemplate the importance of Black Blade's wise words about being prepared for the worst.

It was interesting to realize that while we would never be without it, a stash of the shiny was not going to help with the immediate need for emergency heat, food, and water.

- Survivor
mikal
Russell has more reasons to avoid equities
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5ED28EFF%2D6A10%2D47C8%2D84C9%2DA03449C3AC02%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhooPETER BRIMELOW
Russell's stingy with holiday cheer
Peter Brimelow, MarketWatch
Last Update: 1:34 AM ET Dec 21, 2006
NEW YORK (MarketWatch) -- Excerpt: "Santa Claus may have come and gone. But the Grinch is still here.
The Dow industrials' stall after making a new high Tuesday upset some commentators. Stocks have been strong for six months. How long can it go on?
In circumstances like this, I like checking with Dow Theory Letters' octogenarian Richard Russell because of his record of calling major market turns, his strong market timing performance as measured by the Hulbert Financial Digest, and his endlessly active mind."
Mikal-- Don't be without gold in this phase of the
world economic crisis. The list of valid reasons the Dow
is a safe place to be is inversely proportional to a lofty quantity of excuses for investing there.
mikal
Musings on the road to "the day after"
http://www.financialsense.com/editorials/phillips/2006/1220.htmlConfidence in the U.S. $ is falling
Excerpts from GLOBAL WATCH:
THE GOLD FORECASTER
by Julian D.W. Phillips - December 20, 2006 - Snippits:

"As the continued deficit continues to command somewhat myopic attention [it was less than expected but still around $60 billion a month], we do well to look at the impact on confidence in the unit as the Trade deficit rolls on month after month year after year."

*Phillips combines good analysis with some banal but obligatory reports on dressed-up government deficit figures.
The following remarks are very predictive (and thus in character with a subscription advisory letter), but still insightful IMO:

"An inevitable and unstoppable trend is that all non-emerging nations are subject to a draining of wealth either to the oil producers or to the emerging East as it provides cheap, but often equal quality goods to West. The efforts to retain such wealth cannot succeed without protectionism or direct blocks on the imports of such goods. This is unlikely to happen until it has already reached crisis proportions. Such moves have to be preceded by Capital Controls which in turn will be preceded by a major U.S.$ fall. Gold will be above four figures by that time and probably have been there for a while."
mikal
Do the CB thing, print your own Ameros
http://www.amerocurrency.com/images/bush_peso.jpg"Free at last. Free at last. Good God Almighty, free at last!" - MLK http://www.amerocurrency.com/images/bush_peso.jpg
mikal
Fed adds
mikal
Why wild market action?
http://www.geocities.com/tbhpolitoon/628.JPGBecause it's a jungle out there, in spite of Tarzan, Jane and the boy: http://www.geocities.com/tbhpolitoon/628.JPG
Gandalf the White
WOWSERS !!!! <;-) WHAT a storm !
Finally, I am back online !
YES, this was the first major test of Black Blade's recomendations, in the Western portion of the GREAT Pacific Northwest.
November was the MONSOON season of the Century, with all time RECORD rainfall for the month!
The rain (as seen in the Thursday night TV broadcast of the Seahawk's football game) and the following windstorms darkened the homes of over one million CUSTOMERS of the four major electrical suppliers in the Seattle-Tacoma area of Western Washington. (and there are still about 100,000 still without power.)
I see now that SIR MK's Denver area is experiencing some of the same challenges with a heavy dose of SNOW !
Happy Holidays, All.
<;-)


Matthew
Silver looking healthy?
http://ww2.samsung.co.za/silvernano/silvernano/washingmachine.htmlThe re-emergence of silver as an effective anti-microbial can only be positive for the value in the long term.
mikal
More holiday floats on parade in NY
http://www.ny.frb.org/markets/seclend/sec_lendop.cfmNY Fed Daily Securities Lending Activity | December 21, 2006
Matthew
Negotiations with the Headmaster show few signs of progress on discipline issues.
mikal
@Gandy
mikal
@Gandalph
http://www.drachenbande.de/fantasy/wizard1.htmBack in FULL uniform(now that the skies have cleared somewhat) :)
http://www.drachenbande.de/fantasy/wizard1.htm
Goldilox
Emerging from the wreckage
@ Gandalf,

Glad to hear you're OK. I moved to Lake City from South Bend, IN, in 1962, after having gone through a serious tornado that fall. When twisters hit Elliot Bay, we were blamed for bringing them with us, although those twisters were nothing like the F3 we had just experienced.

Sounds like there will be some major rebuilding and cleanup going on for a while.
USAGOLD Daily Market Report
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

THURSDAY Market Excerpts

December 21 (from Reuters) -- Gold futures extended their losses by Thursday's close as short-term speculators took a late cue from falling crude oil prices and liquidated their long positions, traders said. "Tomorrow's the last day before a long holiday and some people were probably liquidating long positions. Nothing major. If it closed anywhere within today's range, it would not have been a big deal," said one gold trader.

Benchmark February gold at the COMEX division of the NYMEX fell $2.70 to finish at $621.60 in a trading band between $620.60 and $625.40. The contract held well above above Monday's low of $615.10, which was last seen on Nov. 1st.

Traders emphasized that business was very slow on the last full trading day before the long Christmas weekend. "It was dead quiet and staying in a tight range. I think it came off when people who were long during the day or last night just hung on to sell at the end of the day," said one dealer.

In early business, gold advanced when the final reading of third-quarter U.S. growth came in below expectations. The U.S. economy grew at a less vigorous rate during the third quarter than previously reported, according to the final reading of U.S. gross domestic product. Growth was slowed by the sharpest slump in housing activity in more than 15 years.

But some late gold sellers used falling oil prices as their cue to liquidate precious metal holdings. U.S. crude oil futures ended sharply lower on Thursday on pre-holiday profit-taking, a day after the government reported ample refined product supplies as the U.S. Northeast basked in mild temperatures at the start of winter.

---(see url for full news, 24-hr newswire)---
Chris Powell
Paulson and Bernanke were clueless in China
http://commentisfree.guardian.co.uk/james_k_galbraith/2006/12/clueless_in_china.htmlBy James K. Galbraith
The Guardian, Manchester, England, UK
Monday, December 18, 2006

Speaking as I rarely feel entitled to do, on behalf of all my fellow professional economists, I felt true, true sympathy last week for Ben Bernanke, as he trailed after Henry Paulson in China.

Paulson's China policy is easily understood. In the United States government the Treasury represents the interests of Wall Street, as Joe Stiglitz has written eloquently from direct observation. An alumnus of Goldman Sachs, Secretary Paulson is ideally suited to his job.

And what Wall Street wants from China is what Wall Street always wants: the freedom to speculate (excuse me, invest) in currency, corporate stocks and bonds, and real estate. Wall Street loves risk, uncertainty and volatility. The Chinese don't. This is a conflict. It is not in any sense a complicated question.

Paulson made a power play, based on a threat: open up or we'll shoot. More precisely, it was a power play based on a bluff. Since the bluff was transparent, the Chinese called it. And when they did, the US side folded. The Chinese then completed the hand by giving back a few symbolic concessions, so that Paulson's team would not have to admit to the obvious fact, that the trip had accomplished nothing at all.

For Paulson, a business negotiator, it was pretty much routine stuff: sometimes you win and sometimes you don't. But Bernanke is an economist. Despite his high public position, he is at heart an academic. In other words, he has standards, and a certain amount of professional dignity to maintain.

And last week he had the sorry job of putting economic lipstick on Paulson's pig. More than that: Bernanke had to argue that it was in China's economic interests to go along with Paulson's plan. Worst of all, he had to talk past the Chinese officials, who somehow seemed to feel that they have a better understanding of their own interests. It must have been dreadfully embarrassing.

Bernanke gave it a good college try, with an impressively wonkish speech, replete with 22 footnotes, delivered to the Chinese Academy of Social Sciences. On no evidence at all, he argued that a higher RMB would help China maintain its economic growth. The trouble with this that current policy has given China world-beating economic growth for three decades. Bernanke knows this (and said so), so he couldn't press this argument very far.

Next, having credited Chinese growth partly to its high savings, Bernanke made his second argument: China should now bring its savings rate down. This he said should be achieved by improving China's social safety net, so that Chinese families would feel less need to squirrel away funds to cover health care and old age. Apart from the direct benefits, Bernanke argued that this would reduce China's trade surplus by increasing Chinese household consumption.

Finally, as the US delegation left town, Paulson rather gratuitously promised to try to increase private savings rates in the United States, which Paulson wants to do, of course, by cutting Social Security and Medicare.

So here's the Bernanke-Paulson position in brief summary:

1) China's currency strategy has helped produce rapid growth for 30 years; therefore it should be abandoned.

2) China's high savings rates have been a key to this success; therefore they should be reduced.

3) China, a country emerging from communism, should spend more on public health and social security, so that ordinary Chinese can save less. (This is actually a good point, as far as it goes.)

4) The United States, a capitalist country, should spend less on social security and public health, so that ordinary Americans will be forced to save more.

5) Somehow, all this will reduce the deficit in the US-China balance of trade, a goal whose importance everyone agrees on but that no one can actually explain.

Adam Smith wrote it; I only quote it:

"Such as they were, however, those arguments convinced the people to whom they were addressed. They were addressed by merchants to parliaments and to the councils of princes, to nobles and to country gentlemen, by those who were supposed to understand trade to those who were conscious to themselves that they knew nothing about the matter. ... Those arguments therefore produced the wished-for effect. ... The attention of government was turned from guarding against the exportation of gold and silver to watch over the balance of trade. ... From one fruitless care it was turned away to another care much more intricate, much more embarrassing, and just equally fruitless."

-------

James K. Galbraith holds the Lloyd M. Bentsen Jr. chair of government/business relations at the Lyndon B. Johnson school of public affairs at the University of Texas at Austin. He is a senior scholar with the Levy Economics Institute and chair of the board of Economists for Peace and Security, an international association of professional economists. His new book is "Unbearable Cost: Bush, Greenspan, and the Economics of Empire" (Palgrave MacMillan, 2006).
Thoreauly
"Clueless in China" (and in the US)
http://commentisfree.guardian.co.uk/james_k_galbraith/2006/12/clueless_in_china.html
The author's irksome professional snobbery aside, his assessment is right on the money regarding Sino-Us relations, not to mention the absurdity of the welfare state:
____________

Next, having credited Chinese growth partly to its high savings, Bernanke made his second argument: China should now bring its savings rate down. This he said should be achieved by improving China's social safety net, so that Chinese families would feel less need to squirrel away funds to cover health care and old age [i.e., take care of themselves and their own]. Apart from the direct benefits, Bernanke argued that this would reduce China's trade surplus by increasing Chinese household consumption.

Finally, as the US delegation left town, Paulson rather gratuitously promised to try to increase private savings rates in the United States, which Paulson wants to do, of course, by cutting Social Security and Medicare.

So here's the Bernanke-Paulson position in brief summary:

1) China's currency strategy has helped produce rapid growth for 30 years; therefore it should be abandoned.

2) China's high savings rates have been a key to this success; therefore they should be reduced.

3) China, a country emerging from communism, should spend more on public health and social security, so that ordinary Chinese can save less.

4) The United States, a capitalist country, should spend less on social security and public health, so that ordinary Americans will be forced to save more.

5) Somehow, all this will reduce the deficit in the US-China balance of trade, a goal whose importance everyone agrees on but that no one can actually explain.
__________

"No one can actually explain"?




Sundeck
Christmas listening for The Forum
http://www.abc.net.au/rn/boyerlectures/default.htmHo ho ho ho....

That time is almost upon us again.

The attached link provides some easy listening for forum members...the outgoing Governor of the Reserve Bank of Australia, Ian McFarlane, gives this year's Boyer Lectures...six in number...entitled "The Search for Stability".

Snip:

"The 2006 Boyer lectures, delivered by Ian Macfarlane AC, are about how we have struggled to find a means of ensuring a stable growth path for the economy. We thought we had it, we lost it disastrously, we half-regained it, then we fully regained it. But is it permanent, or is there a new set of challenges waiting to trap us?"



Settle back in your favourite chir with your full belly and glass of port and listen to what the good ex-governor, the Australian contemporary of Big Al, has to say about world monetary affairs, with emphasis on Australia...

Happy listening...

Ho ho ho ho

:-)
TownCrier
*NEW* at The Gilded Opinion: 'The Triple Decade Effect' by John Richardson
http://www.usagold.com/gildedopinion/richardson.htmlThe Triple Decade Impact is predicated on ideas that throughout the entire history of the 20th Century there have been the resounding themes of some three decades of increasing prosperity, followed by a lean period lasting about one decade that's either a contracting or stagnating period of very high inflation and where Gold has tended to mitigate uncertainty by its increasing percentage dominance of financial reserves.

...the future looks likely to be a time of great opportunity where some deft investing could potentially have the best of both Worlds... A continuing boom in stocks for some or much of the coming year, that could very well be accompanied by an inexorable rise in Gold and Silver prices, but what investors should be deftly aware of and watch for, are the signs of what looks to us, what will become an inevitable impending inflexion point, where stocks will peak out, and Gold and Silver prices will keep going higher. What we should be reading from this is that the coming boom in Gold and Silver could be monumentally greater, than perhaps anyone can imagine...

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

Thanks to John for his kind permission to republish this report in which he is not shy about predictions of $7500 gold.

R.
mikal
Is internet becoming too big?
http://www.freemarketnews.com/WorldNews.asp?nid=29641 Is It Illegal To Link To Other Websites? | FMNN | Dec 22
Winter solstice, first day of winter. The days get brighter and brighter, though longer.
mikal
Another case made for gold
http://drmss.com/wordpress/?cat=1The United States is Insolvent - Dr. Chris Martenson - The End of Money - Dec 17
The author presents the case, the United States is insolvent, then recommends precious metals.
frosty 1
If everyone knows the state of the dollar....
Not to beat a dead pony, but...
When indeed the dollar swoons downward,will not most available investment funds search for something real and solid? Such as REAL ESTATE,or Gold ,or silver, copper, oil,or any other item that they are not making any more of?
Seems to me most predictions on housing, ect,do not factor in what a run from the dollar will do to the mindset of average joe.Lets face it average joe is the trend maker,all others are just the fleas on the dog going for the free ride.I am going on record as the only voice out there that is touting housing,yes housing, as not the (falling Knife) some think it is,but the savior of the middle class.Poke at me if you will,but in 2009,when the min. wage is $23.and the average home price is not $160,000.,but close to $500,000.I do believe some might think back to this post.Argentina here we come!! Merry holiday all!
frosty1
not investment advice...just MHO
Goldilox
Trend makers
@ frosty1,

"Lets face it average joe is the trend maker,all others are just the fleas on the dog going for the free ride."

Actually, 95% of US wealth rests in 5% of the hands, so "Ave Joe's" 5% really only matters in retail, where it makes up a larger proportion of the total.

While it may be enough to help move some trends, by itself it is not necessarily enough to sustain them.

That may be one of the reasons that the SM is still "performing" while Ave Joe is floundering in UE lines.
USAGOLD / Centennial Precious Metals, Inc.
Step inside and shop at your convenience. Open 24/seven, regardless of winter storms!
Lackluster
Paulson's China trip
It does strike me as odd that there seemed to be little official explanation for such a high powered entourage. Much of what I have read regarding the trip is speculation, there seems to be little public information in regards to the purpose of the trip, or its results.

I think the drop in gold price was no coincedence.
Chris Powell
Even little Slovenia gets roped into the gold price-fixing scheme
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061222%5cACQDJON200612220439DOWJONESDJONLINE000455.htm&Slovenia Joins Central Bank Gold Agreement

By Christian Vits
Dow Jones Newswires
Friday, December 22, 2006

FRANKFURT -- The Slovenian central bank will become a party to the European gold agreement, the European Central Bank said Friday.

"In the interest of clarifying its intentions with respect to its gold holdings, Banka Slovenije agrees with and becomes a party to the joint statement dated March 8, 2004," the ECB said.

The maximum annual sales of the Slovenian central bank, as well as the total sales, both as specified in this agreement by its signatories, will remain unchanged over the period of the agreement.

The central bank also agreed not to expand its gold leasing and its use of gold futures and options during the period of the agreement, the ECB said.
Goldilox
China Remarks
@MK,

I heartily concur with your observations and analysis on the China visit. It seems China's answer to the P & B team was, "Maintain the status quo, and we win".

While the US absorbs about 20% of China's exports, China's imports are a lot more important to the US, who is no longer energy, food, nor manufacturing independent. China stands a much better chance of replacing its markets internally than the US does of replacing its suppliers, thanks to the gutting of US manufacturing for cheep global wages. Skillsand infrastructures just aren't all replaced "overnight".

The Chinese have been between a rock and hard place before, and learned how to make a pillow from said rock. Americans can only ask their dying great-grandparents "what it was like" to be hungry.
Chris Powell
Government's one unlimited power: to debase the currency
http://news.yahoo.com/s/afp/20061222/bs_afp/skoreaforexeconomy_06122203041511:49p ET Friday, December 22, 2006

Dear Friend of GATA and Gold:

Here's a case of a government financial official telling the truth -- that government has unlimited power in one respect, the power to debase its own currency, and that currency debasement has become virtually international policy.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

S. Korea Has 'Unlimited Resources'
to Prevent Rise in its Currency

From Agence France-Presse
Thursday, December 21, 2006

South Korea has "unlimited resources" if it decides to curb the local currency's rise against the dollar which is hurting exporters, a senior government official has announced.

The won has risen nearly 10 percent against the dollar this year, raising concern among exporters who fear their goods will be priced out of overseas markets. It hit a nine-year high against the Japanese yen this month.

"To stabilize the economy, it is essential to maintain the currency at a certain level and the government will make its best efforts to achieve that," Kim Sung-Jin, a deputy finance minister, was quoted by Yonhap news agency as telling a radio programme. "If the government consults with the central bank and intervenes in the currency market, our resources are unlimited."

The nation's foreign reserves totalled $234.3 billion as of the end of November.

Kim also said investors may make a mistake if they assume the won will continue to rise lopsidely next year.

"In 2007 the US twin (fiscal and trade) deficits and the ascent of the yen and the yuan will put upward pressure on the won, while the shrinking current account surplus may be a downward factor," Kim said. "Investors may make a mistake if they expect a lopsided ascent by the Korean currency next year, as seen in recent months."

On Thursday, Lim Young-Rok, another deputy finance minister, said business leaders had urged the government to stabilise the local unit.

"As the won rose sharply since 2004, South Korea's small- and medium-sized businesses have been struggling to maintain their bottom lines," he said.

South Korea's comments echo others elsewhere in Asia where governments are increasingly concerned that their export-driven economies could be hit if their currencies continue to rise against the dollar.

Earlier this week Thailand introduced stringent capital controls in an effort to halt a sharp rise in the baht but the government was then forced to backtrack when the measures sparked a stockmarket collapse.

Despite the chaos, the Thai government insisted it was right in acting to limit the baht's gains and said many other countries face the same problem.
Chris Powell
Here's one thing China can do with all those dollars: Buy Zimbabwe
http://news.yahoo.com/s/afp/20061222/bs_afp/zimbabwechinaeconomyaid_061222083735Zimbabwe, China Negotiate $2 Billion Loan

From Agence France-Presse
Friday, December 22, 2006

Zimbabwe and China are expected to begin negotiations for a two-billion US dollar loan agreement to help stabilise the economy, a state-run daily reported.

"China's government is ready to negotiate with the government (of Zimbabwe) for a two-billion US dollars loan facility to help it fight inflation and other aspects of the economy," Zimbabwe's Ambassador to China, Chris Mutsvangwa, told the Herald newspaper.

The daily said the Chinese government had appointed a project officer to handle the negotiations who would soon open talks with Zimbabwe's Finance Minister Herbert Murerwa and central bank governor Gideon Gono.

Mutsvangwa made the remarks in Harare at a ceremony at which the Chinese government handed over more than 22,000 metric tonnes of compound D fertilizer that will be used to help revive Zimbabwe's ailing agricultural sector.

China's assistance to Zimbabwe would help dispel the myth perpetuated by the United States and Europe that Zimbabwe's economy had collapsed beyond redemption, Mutsvangwsa said.

Speaking at the same event, Vice President Joyce Mujuru commended the Chinese government for its concerted efforts and support aimed at stabilising Zimbabwe.

"The support being extended to us by the People's Republic of China is critical as it comes at a time when we have embarked on an agricultural revival programme," she said.

"The timely delivery of agricultural inputs and good rains we are receiving will ensure the achievement of the projected growth rate of 9.4 percent in the agricultural sector in 2007."

Isolated by Western governments over the political crisis in Zimbabwe, President Robert Mugabe's government has looked to foster new relations with Asian countries such as China and Malaysia as part of a so-called "Look East" policy.

But despite a stream of high-profile agreements with its new allies, Zimbabwe has so far been unable to revive its ailing economy.

Inflation is currently running at 1,098 percent and unemployment is believed to have passed the 70 percent mark. Food staples such as bread and cooking oil are now in short supply in a country that was regarded as southern Africa's bread basket little more than a decade ago.

In August last year, reports claimed that South Africa had agreed to lend up to 500 million dollars to Zimbabwe on condition that its troubled neighbour agree to reforms to bolster stability. The money however never materialised.

Thoreauly
@ MK
http://www.safehaven.com/article-5205.htm
"All the world's citizens should be gold owners, and I do not exaggerate by saying that."

No, you do not, as precious metals have become a "Nash equlilbrium" (see link), such that it is "an ideal financial strategy for everyone on Earth is to buy as much gold and silver as they can, as soon as possible."

Chris Powell
Diamond market is next target for derivatives
http://www.miningmx.com/diamonds/522710.htm12:15p ET Friday, December 22, 2006

Dear Friend of GATA and Gold:

MineWeb's David McKay reports that the Netherlands bank ABN Amro is planning a derivatives market for diamonds. Good grief -- is the real thing running out there as well, so much so that speculative and investment demand must be diverted from the real thing into paper?

You can find the MineWeb report here:

http://www.miningmx.com/diamonds/522710.htm

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Chris Powell
MK on China ... and life, the universe, and everything
MK, your analysis of the world financial situation
in light of the failure of Paulson's mission to
China is as good as anything I've read on the
subject. I think the statement of the South Korean
finance ministry official quoted in the AFP story
posted below is your confirmation.

The illusion of infinite money and thus infinite
power has spoiled the governments and elites that
could have kept things on an even keel. Derivatives
have extended that power by diverting much
inflationary/speculative/investment demand away
from real things and into paper. But eventually
even real things run out, as seems to be happening
now in many respects.

In theory fiat money can work and indeed it HAS
worked for 35 or 70 years or so, depending on
exactly how you want to do the chronology. But fiat
money requires something of human nature -- the
virtue of restraint.

I'm no ideologue, nor an advocate of returning to
the gold standard. If I'd been around in 1896 I
would have voted for Bryan and bimetallism. I don't
like the idea that the growth in the world's real
economy should necessarily be a function of the
amount of metal that can be dug out of the ground.

But it would be hard for me to deny that such a
system comes closer to reality than the current
system of controlling the money supply through
human judgment and the political influence of
special interests -- a system in which there now
is really NO control and one imperial power
plunders the world.

That the central banks have been so desperate to
stamp out free markets in the precious metals and
now, it seems, to stamp out free markets in all
basic commodities as well suggests that free markets
may be the antidote, the best guarantors of
civilization and prosperity. (And the purpose of
anti-trust law is to preserve free markets, markets
in which no one gets big enough to control any
market.)

But will any free markets break out before the
commodities involved run out?

Judging from the little restraint and virtue that
seem to be available in government and financial
circles lately, I'd have to guess to the contrary
-- and I hate to sound like an apocalyptic
reactionary.

In addition to the brotherhood of man and fair
dealing everywhere, I'd like some wonderful
capital gains on my metal and my mining shares,
and I'd like not to have to spend those gains on
guns, ammunition, freeze-dried food, and
ventilation equipment.
Federal_Reserves
On China - our grandkids will
http://www.shanghairickshaw.com/be in poverty by 2030, the best job they can hope for will be hand pulling Chinese nationals in rickshaw's along the streets of LA and NYC. Of course by that time, the rich elites who haven't revoked their citizenship and still call themselves US citizens will be paying 80-90% income tax rates to help pay the interest on the debt. After all, the debt we are running up is backed by the ability to tax rich people. Until such time as sanity returns I'm hold gold as an offset to protect against inevitable rebalancing.
Thoreauly
@ Chris Powell re a gold standard vs. freegold
http://www.cipe.org/publications/ert/e32/e32_2.pdf
My understanding is that while a gold standard would fix government currencies to the gold price, freegold would preclude the use of government currencies altogether and would in fact monetize any metal (silver, copper, zinc, etc.) that was sufficiently scarce to warrant its use as such. Thus, if gold were too expensive to own, less expensive metals could fill the void, just as they have throughout history.

Furthermore, digital, gold-backed, 100%-reserve currencies could universalize and fully streamline this process (see link), freeing all markets as never before, even as the state retreated to the vanishing point.

Hey, I can dream, can't I?
White Hills
Golden Christmas
It wasn't Santa Claus coming through the pass to a little community called White Hills rather it was the Fedex man delivering the Gold French Angel necklace as promised by USA gold in time for Xmas. Needless to say ,after giving my Angel her Birthday-Xmas present I am really in for a wonderful Xmas. I also attended to business by taking delivery of 15 stampeding Golden Buffaloes at the Post Office(it is a 110 mile roundtrip) in Kingman, Arizona. In addition as I type this post it is snowing outside which fairly unusual in this part of the country. I would like to thank USA Gold for another profitable year as all my previous investments in gold have doubled and are now headed to double again, of which I have no doubt. Merry Xmas and Happy Holidays to all that visit here and to everybody at USA Gold. White Hills and his Angel
MK
Chris Powell, Thoreauly. . . With the failure of the China mission, we have crossed a modern economic Rubicon. The die is cast.
http://www.usagold.com/germannightmare.htmlNote: This modified post appears out of sequence and might be confusing to our visitors. Trying to deal with the snowstorm here in Colorado, a sick dog who had to go to the vet, and get that post out didn't work out too well for me. I didn't take the time to develop the second half of the post which dealt with an inferred sale of gold simultaneous to the end of talks in China. It needs work and I'll try to come back with something a little more solid than an opinion based on supposition. The rest of the piece stands as is. Many thanks for the kind comments which followed. Please excuse the inconvenience of seeing this post out of sequence. The original post number was #150410. Happy holidays to all. . . .

_____________


"If history teaches anything, it is that government cannot be trusted to manage money." The Nightmare German Inflation, Scientific Market Analysis
____

I read the Galbraith article you posted with a great deal of interest. As most of you already know, I consider the China/US relationship -- flawed as it is -- the Achilles heel of the world economy. Now, I believe, with the failure of the Paulson-Bernanke mission, the arrow has found its target. Gold ownership globally, as a result, is not just an important aspect of the private investment portfolio. For reasons outlined below, it has become essential.

The China visit by a large and influential American entourage marks a watershed. Now, certain long proscribed outcomes are not simply assured in some obscure future; they are immediate -- launched and in progress. There will be no turning back. In fact, there has been no turning back for a very long time. The failure in China confirms what many of us have suspected for some time now. China and the United States have trapped themselves in their own policies. There is no way out.

The visit will be a subject of discussion for historians probably for generations. Ultimately, in my view, that discussion will revolve around what role the mission played in the early 21st century international economic maelstrom which followed. It will question why no one in power on either side did anything substantive to alter the outcome. Those of you who are students of history will remember Barbara Tuchman's book on how World War I was actually launched (The Guns of August). You will recall that she concluded that the war began not so much because anyone or anything actually "started" it. The war began because no one tried to "stop" it. Now, almost 100 years since August, 1914, we have come to a similar place but this time in the less violent arena of modern economic history.

Let me come to the point:

If China is going to more or less allow its currency to decline in purchasing power in concert with the U.S. dollar (which seems to be the final outcome of the meeting), the other major trading nations will take their cue from this policy and force their currency to depreciate as well. Essentially, they have no choice. Only Europe, at this time, is attempting to increase demand for its currency (by raising interest rates) while all others head in the other direction, that is, the direction of deliberate currency depreciation and inflation. All currencies, whether or not they make half-hearted attempts at letting the dollar go down, will depreciate markedly against goods and services nearly in concert. (I expect the European position to change next year as pressure builds from the left of the political spectrum and finance ministers step up their attacks on the European Central Banks, and by proxy, the union itself.)

The net effect of these policies will be international inflation and in some places, most notably the United States, double digit inflation -- at least in the beginning. It could get much worse from there if the dollar becomes anathema in the portfolios of the world, and, as the saying goes, a crowd gathers at the exit. We got a dose of the future last week when out of the clear blue wholesale prices jumped 2% in the United States for no apparent reason. That was quickly swept under the carpet by Washington and Wall Street and the markets hardly reacted. I believe the reaction, though meager and, I am certain, heartening in certain sectors of the financial markets, has only been delayed.

Last week's inflation numbers, however, are only a luke warm warning of what's to come. If allowed to go unchecked, the natural progression, pushed by the U.S. and China's deadly tango, would be to ignite an international hyperinflation as each nation attempts to cheapen its currency against all others in a mad game of one upsmanship -- a deadly game of economic Russian roulette which builds to critical mass and a final core meltdown. The United States, in this scenario, might lead the way on inflation but it will be far from alone. All the world's citizens should be gold owners, and I do not exaggerate by saying that.

For those with a penchant for historical example, the Weimar experience will serve as a educational template and good study of how quickly and inexorably things can get out of control. What we are about to experience will be unprecedented historically. For the first time in the planet's history, the scale and implications are global. For those who wish to understand how these things tend to work out, an interesting link has been provided at top. (To give you an idea what people are thinking, this page is among the most widely linked USAGOLD pages on the web.) It could happen -- a internation hyperinflationary blow-off, that is. Furthermore, the politicians and economic bureaucrats responsible for currency policy are likely to continue denying the logical outcome of their policies both to themselves and the electorates they serve and/or represent. This is playing with fire.
______________

When is the last time half the United States government, including its chief central banker, showed-up at anyone's doorstep to discuss anything. Just the appearance of so many high-ranking American politicians and bureaucrats alone should have been enough to send the opposition into a compliant mood. China, under the circumstances, should have been impressed. It should have been convinced to do the RIGHT thing by the speeches, the toasts, the pleas of the Secretary of the Treasury and the long academic presentation from Bernanke including footnotes.

One problem. It wasn't. As Ms. Wu pointed out, the visitors did not truly understand China's history. They didn't know what its like to starve. They didn't know what it's like to impose one-child families on a population -- as a prerequisite to survival. They didn't understand what it is like to struggle out of utter poverty. Not by a long shot. Now that China had enjoyed basic economic security, why would it do anything to jeopardize it?

And we cannot forget that after Paulson's last visit to China, the Financial Times published a lengthy article on its prestigious opinion page wherein Chinese academics and high government officials made a series of public warnings. (Visit the USAGOLD NewsGroup linked from the Daily Market Repot page) One of them was that China would not fold to American pressure like Japan did in the 1980s creating a depression from which that country still suffers. Officials also said that they stood ready to trade U.S. Treasuries for oil and gold as a way to balance its inordinately high stake in the dollar -- some $700 trillion in U.S. government paper.

But, alas, the delegation failed. Momentum was lost -- probably forever. China will stand in contemporary history alongside that other notable failure -- Iraq. The big chill descends. It will be business as usual on the economic front and the Paulson-Bernanke China mission will serve as just another marker -- albeit an important one -- on a long road that started in 1971 with the first official devaluation of the dollar and its severance from gold. Perhaps the die was cast back then, but be assured we have now crossed an important economic Rubicon from which there can be no turning back. Under the circumstances, there will be no slowing down the international scramble for anything tangible -- most notably. . . gold.
.
______________

This concludes my series on China. I look forward to the comments of my fellow posters and gold owners on these important matters.
Survivor
China, Zimbabwe, and US Dollars

And so the US dollar becomes the "hot potato" of world currencies.

"Hot potato, hot potato. Who will take the hot potato?"

If they can't sell it, they may as well give it away. These "loans" often end up being gifts.


- Survivor

Chris Powell
Ecuador bonds tumble amid talk of default
http://www.bloomberg.com/apps/news?pid=20601087&sid=ak87KbrTbFyk&refer=homeBy Lester Pimentel and Helen Murphy
Bloomberg News Service
Friday, December 22, 2006

Ecuador's bonds had their biggest-ever decline after the incoming finance minister said the government may restructure its $11 billion debt in a way similar to Argentina, which included a $95 billion default in 2001.

Ecuador's benchmark 10 percent bonds due 2030 tumbled after Ricardo Patino said yesterday president-elect Rafael Correa's administration will meet with bondholders next month to discuss a plan that "may be more like what happened in Argentina."

Correa, meeting yesterday in Caracas with Venezuelan President Hugo Chavez, said he "won't hesitate" to default on debt payments if he deems spending on social programs more important. Correa also has vowed to strengthen trade ties with countries such as Argentina and Brazil, governed by socialist politicians, rather than the U.S.

"Slowly the market is starting to realize that they mean what they say," said Alberto Ramos, a senior Latin America economist with Goldman Sachs Group Inc., of Ecuador's leadership. "This is an ideological view. This is about a willingness to pay."

The yield on the bonds surged 184 basis points to 13.32 percent at 1 p.m. in New York, according to JPMorgan Chase & Co. A basis point is 0.01 percentage point. The bond's price, which moves inversely to the yield, fell 11.75 cents on the dollar to 76.25 cents, its largest decline since the government issued the security in 2000.

The perceived risk of owning Ecuador's bonds surged today. Credit-default swaps based on $10 million of the nation's U.S. dollar-denominated bonds jumped 35 percent to $950,000 from $705,000 yesterday, according to data compiled by Credit Market Analysis in London. An increase in price indicates deterioration in the perception of credit quality; a decline suggests improvement.

Correa won a Nov. 26 presidential runoff election after advocating that his government cut ties with international lenders such as the World Bank and consider forfeiting or delaying what he called "corrupt and unfair" debt payments. Correa takes office on Jan. 15.

"If our moral duty to provide health, education and housing to our people impedes us from paying debt, we won't hesitate two seconds," Correa said at a news conference with Venezuela's Chavez. "We don't rule out a unilateral moratorium on our external debt."

Argentina's default was the biggest in history by a sovereign government. Last year the country completed restructuring $104 billion of bonds. Neighboring Uruguay exchanged $4.9 billion of its debt for longer-term, lower-interest securities in 2003, a move that Standard & Poor's also classified a default.

Under Argentina's 2005 debt restructuring plan, the government offered to compensate bondholders with new debt worth about 27 percent of their initial holdings, about half the recovery rate typically offered in government restructurings.

Patino said Ecuador will talk to all creditors, including bondholders and multilateral agencies, and may announce a restructuring in February.

Chavez said Venezuela, which bought $25 million of Ecuadorean bonds last year, may buy more of the country's debt. Argentina has raised about $4.5 billion by selling bonds to Venezuela since early 2005, helping it avoid turning to U.S. and European markets after its 2005 debt restructuring prompted several lawsuits from bondholders in international courts.

"We could support Ecuador just like we have supported Argentina," Chavez said during the news conference.

The average spread on Ecuador's dollar bonds today rose 159 basis points to 834 basis points or 8.34 percentage points, the highest since June 9, 2005, according to data compiled by JPMorgan.

Spread, or the amount of extra yield a bond offers over U.S. Treasuries, is a barometer of investors' confidence about being paid on time. Larger spreads mean investors are less confident and demand more extra yield to compensate them for the risk of default, relative to risk-free U.S. government debt.

In 1999, Ecuador defaulted on $6.5 billion of debt.

The 10 percent bond due 2030 is one of the two securities the government gave investors during a restructuring in 2000 of the defaulted securities.
TownCrier
MK on China
http://www.usagold.com/analysis/kosares-20060929.htmlFor some of our newer readers, "This concludes my series on China," may leave you feeling in the lurch... whatever that means.

To bring you up to date, the hyperlinked URL given above will take you to MK's previous commentary on China, within which you'll find yet another hyperlink which will take you to the original NewsGroup commentary (wherein there will be a link to the FT article that kick-started it all.)

Happy browsing!

R.
Sierra Madre
Thank you very much, MK!

Thank you for your excellent article on the US/China relationship!

I have been away for a week sans Internet but this piece of yours is all the reading I need have done in the interim.

Sir, I thought earlier today that perhaps the Paulson/Bernanke visit might have also dealt with other matters, of a military nature: namely, sounding out China with regard to a pre-emptive strike (another one!) on Iran after the UN Sanctions to be voted on today fail - if they do fail - because of a veto by China or Russia.

At this juncture, when the overtures of the P/B team failed to sway the Chinese leadership, I shudder to think that the US leadership, influenced by AIPAC, may decide that since all is lost, there is no option but a strike on Iran with all the consequences, however terrifying they may be.

Nothing but fears on my part, but I think that desperation is a very poor counsellor for a cornered Emperor, and I refer to GWB, not a Chinese Emperor.

Let us hope these fears DO NOT materialize!

SIERRA
mikal
Earthlings' economy rates notice
http://www.atimes.com/atimes/Global_Economy/HL23Dj01.htmlRISKY BUSINESS
Global economy faces a dangerous year
By Jephraim P Gundzik - Asia Times - Dec 23 | Excerpts:

"Rising inflation and falling home prices are likely to push the US economy into recession by the second half of 2007. Gathering economic weakness, combined with negative real yields on US Treasury securities and growing political pressure to weaken the dollar will lead to significant dollar depreciation against most currencies.
Economic growth in Asia, Europe and Latin America will also weaken in 2007. Slowing global economic growth will be very bad news for equity markets around the world. Dollar depreciation and rising international energy and grain prices will be good news for precious metals.
Impact of instability on commodity prices
While global geopolitical instability has ratcheted higher every year since the terrorist attacks on the US in September 2001, global asset markets have hardly responded. In 2006, many of the world's stock markets, including America's, reached record highs. As geopolitical instability increases further in 2007 the probability of major disruptions in energy supplies will grow."

Mikal-- 2007 on the planet earth. Sometimes the author comments less than predicts, such as geopolitical events, Aside from subjectivity, there is interesting oil analysis, good currency insight and more with the aim of summarizing global markets for 2007. And there's explicit mention of "precious metals", so all is not doom. ;)

"With the notable exception of Turkey, economic growth in Europe should suffer the least from slowing US economic growth in 2007. Monetary policy in the EU will tighten further, underpinning currency appreciation. Economic interdependence between EU members will insulate the region somewhat from slowing economic growth in the rest of the world. Russia will benefit from rising commodity prices. Despite more promising economic prospects, equities across Europe will follow US equities in a sharp correction.
Bond markets around the world are likely to be very volatile in 2007. Rapidly changing economic growth and inflation expectations will produce wide price swings. This volatility will be led by US bonds, which will see falling yields in early 2007 be replaced by rising yields in mid-2007 as inflation increases and foreign capital flight accelerates. Spreads on emerging market bonds will widen with falling equity markets around the world. Commodities, including energy, grains and precious metals, will probably perform much better than traditional investment assets as both investors and central banks speed diversification."
Mikal-- You can take issue with the details but much of this is old news. A good compliation of insights nonetheless, with an obvious absence of criticism of bankers when blaming homeowners for overconsuming "easy credit".
Some of the exacting predictions and timing, are highly speculative, and perhaps conservative or understatements
of a greatly tangled web. Gold looks better and better in the face of it. The author recommends gold at the very beginning of this essay.






Boilermaker
MK 150425
Well put and Amen!

The Hank and Ben troupe to China would be like my banker coming over to see me after learning I had invested in precious metals. Here's how it would go;

Banker;
Ah, dear Boilermaker, I have come to explain some things and show you how to emerge from the dark ages of gold idolatry into the bright sunlight of financial prosperity.

Me;
How nice of you. Thank you and come in.

Banker;
Now let me show you this little presentation I have loaded on my laptop to explain to you the magical world of compound interest and fractional reserve banking.................(finish) Would you believe that your little stash of gold, lying unused and unproductive in a dismal box buried in some God forsaken place could be brought to blossom into a large new piece of Americana? If you are a real patriot you will release this mouldering relic of the past and give new life to yourself, your family and countless others. Of course I would want you to keep a few coins as keepsakes of the long dead past.
What say you!?

Me;
I don't think so.

Banker;
My dear man, what possible reason can you have for refusing to do what makes so much sense?

Me;
A knowledge of history and my father's advice on how to survive the next depression.

Banker;
Depression? You're planning for a depression? The economy is now managed by the Federal Reserve to regulate inflation, eliminate depressions and maximize growth. Have you not heard about the Fed?

Me;
Yes. It has allowed our country to become owned or sold by the bankers. Bankers rule is predatory. They feed on many small people to enrich their own and the politicians who facilitate the public plunder.

Banker;
Good Lord man, you must have been lurking on those crazy internet sites that talk about world collapse and financial calamity!

Me; Yes.

Banker;
Well, I've done my best but here's my card and call me when you come to your senses.

Me;
Merry Christmas Banker!!
USAGOLD Daily Market Report
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

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

FRIDAY Market Excerpts

December 22 (from MarketWatch, Reuters) -- Gold futures closed higher Friday and even after falling over the past two sessions, prices finished the week with a gain of more than $3-an-ounce as traders showed reluctance to sell the precious metal ahead of the Christmas holiday.

Some participants added to positions after U.S. economic data bolstered the case for an interest rate cut, analysts said. "I think there's still a lot of speculative length in the market in both gold and silver ... and you do still have participants who want to add to positions," said Mike Guido, director of hedge fund marketing at Societe Generale.

"But we're right in the middle of the holiday season and the participation rates are very low. The volumes and liquidity are just not there," said one gold dealer.

Precious metals participants left early for the three-day Christmas weekend. COMEX resumes metals trading on Tuesday. Most traders in the London bullion market also left early and London traders return on Wednesday.

"We can expect prices to be jumpy until the start of 2007, with a slight upward bias during next week's abbreviated trading," said Peter Spina, chief investment strategist at GoldSeek. "Dips in the metals are finding buyers and the price seems to come right back up after any minor selling," he said.

And "as long as key technical supports are not violated, the market should continue to hold this floor," he said.

February gold closed up 70 cents at $622.30. The contract had lost $3.80 over the past two sessions, but it still finished $3.20, or 0.5%, above last week's closing level of $619.10.

"As we close out this year, there are many unresolved issues still lingering in the global background picture," said Kitco's Jon Nadler, an investment-products analyst, noting concerns related to North Korea and the Middle East. And "on the economic front, schools of thought are equally divided on whether a serious slowdown is in the making or if inflation and overheating are the more imminent dangers," he said.

Given all that, "we remain of the opinion that an unwelcome combination of both forces may dominate the better part of 2007, and that such conditions will be superimposed upon a still-deteriorating U.S. dollar," he said.

---(see url for full news, 24-hr newswire)----
frosty 1
Goldie..pplease,your killing me!
You will have me believe that the U.S. consumer only matters about ...hmm ..say 5% ,to the game??
come away from the charts and smell the common sense!
If the consumption game is not allowed to continue,the game is OVER.Did you here me? OVER!!
For just that reason,the game will continue till the(tipping point).The T.P. is still years off.I ask you ,who will do the job the U.S. consumer has been doing for the world economy? As the rules exist today, there are no others willing to step up to the consumption plate.In the future...the rules will change, but now we still have the option of printing the hell out of our world reserve currency.This WILL come to pass.The question is how do you get the worlds best consumer to keep buying China?The only way that will happen is if you give him easy home equity money.A short term answer...yes..but the one you know they will make available.They do have the power to do this right now. Tell me where I am wrong....All doomer housing articles are not valid, as the dollar DUMP has not played out yet.Only after the revaluation can one see the true value of something REAL...As in Argentina 'so will the U.S. housing value go.
Remember..3 peso before debacle,now worth 1 peso in the aftermath.This happened in a VERY short time span.Housing prices dipped but soon shot back to pre-debacle levels.
frosty1
MK
Sierra Madre
I share your fears about Iran. As do many Americans.
Thoreauly
@ frosty 1
Goldilox
Consumer and Third-world resource nations
@ frosty1,

I have no doubt that your inflationary scenario is a valid option, but you didn't read my post carefully before responding. I said the consumer "owns" 5% of the wealth, but specifically mentioned that it amounted to more than 5% of consumption. However, I only believe the consumption game to be just one of the bubble troubles of the current system. It is designed with only ONE purpose in mind - to maintain the elite advantage for those who currently rule by it. Money is power, ultimately much more important than wealth, as it carries with it the privilege of "changing the rules" mid-game.

When the consumer's "credit" is played out, there will probably be a new resource game instituted in its place, most likely an even more directly socialist "hot potato" betwixt goobermint and the high and mighty "ownership society" as Dubya so fondly refers to them. The serfs don't rule the elites. The closest they have ever come is the French Revolution, which merely paved the way for Napolean (whose rise to power was not so unlike Hitlers).

Cheney tells the tale when he says, "deficits don't matter". All that matters is "who owes whom". His long-time assn with the IMF-IMS money machine has taught him that from drugs to arms, mortgages to new cars, "the first one's free, then I OWN your ass!" Cheep loans are no different than drug fronts to the junkie. When the loan effects its expected instability, the borrower will be back for more, with whatever they have of value for collateral.
Cometose
COT
The commercials postions for last week changed in dramatic manner:

SIlver:

Commercials were net long 8600 contracts

Copper

Commercials were net long 1869 contracts

GOld:

Commercials were net long 14500 contracts .......

That's a lotta contracts moving into the long category .........

This has to show up sometime in related evidence ,I would suspect soon.
frosty 1
Goldie...The forest thru the trees
"5% consumer actions will not change the game."????
I still feel you are not grasping WHAT the american consumer means to the global picture.
lets look ahead to a future outcome.
First..the dollar sinks to an awfull low of say 60,despite raising interest rates to the 10-12% range, it is wellknown the worlds hot money wants out.
Prices on most everything have increased 2 ,3 fold.
The U.S. consumer must continue to be able to buy pizza,gadgets,cars,ect.or the owners of these consumer outlets,will fail to BE the wealthy or the 95% of wealth.
With all this at stake...do you think that deflation will even be on the table???
frosty1
Chris Powell
Spending China's dollars: $16 billion gas project in Iran
http://www.chinadaily.com.cn/bizchina/2006-12/22/content_765293.htmCNOOC to Develop Iranian Gas Field

By Wang Yu
China Daily, Beijing
Friday, December 22, 2006

A press official with the Iranian Embassy yesterday confirmed to China Daily that an initial agreement on a gigantic natural gas project has been signed by China's top offshore oil producer and its Iranian counterpart.

"A big deal was hammered out on Wednesday between the two countries to jointly produce natural gas in Iran," the Iranian diplomat revealed on condition of anonymity.

He said more details on the agreement still needed endorsement from the ambassador.

According to Iran Daily, the National Iranian Oil Co. and China National Offshore Oil Corp (CNOOC) signed a memorandum of understanding on the development of the North Pars gas field on Wednesday.

The field contains an estimated 80 trillion cubic feet of natural gas, according to the paper.

The project involves an investment of more than US$16 billion, of which US$11 billion will be spent on the downstream segment and the rest on the upstream segment.

According to the preliminary agreement, gas from the field will be liquefied and divided equally between the two companies.

The project is expected to take eight years to bear fruit, Iran Daily reported.

CNOOC would not confirm the deal yesterday, saying only the firm has been in touch with its Iranian counterpart on such a project for a long time.

"We have been in close contact for a while. But it is premature to release the results of any negotiations at the present time," spokesman Liu Junshan told China Daily.

An industry insider told China Daily that under the terms of a planned agreement signed as early as October, the National Iranian Oil Company offered CNOOC a 25-year gas supply from the North Pars field.

Lee Meileng, chief analyst of Platts' Beijing office, said the reported deal will be a shot in the arm for both CNOOC and China as a whole from business and energy supply perspectives. Platts is the world's largest provider of energy information and market research.

"By participating in and having ownership of overseas energy projects, Chinese oil companies can better safeguard energy safety for China as a major energy consumer. They themselves can also benefit from this kind of participation by taking advantage of hefty global energy prices," said Lee.

The Platts analyst explained that CNOOC's share of gas from the reported joint programme in Iran could either meet robust demand from liquefied natural gas (LNG) terminals built by CNOOC in the coastal areas of China, or be sold on the global market.

"Either will be positive for CNOOC and China. Therefore, I see this move as good from both a business and energy supply perspective," said Lee.

Agreeing with Lee, Zhou Dadi, former director of the National Development and Reform Commission's Energy Research Institute, commented that compared with simply importing oil or gas from abroad, investing and getting involved in overseas projects was more cost-effective and a safer way of ensuring consistent energy supplies.

CNOOC, as China's largest offshore oil supplier, plans to build as many as seven LNG-importing terminals in six provinces and municipalities.

By the end of October, only two of them had obtained government approval.

"Only with a secure and consistent gas supply, can LNG terminal construction be meaningful and gain approval," said Lee.
968
Bias in Federal Reserve Inflation Forecasts: Is the Federal Reserve Irrational or Just Cautious?
http://www.banxico.org.mx/publicadorFileDownload/download?documentId={CF195B12-B079-7BD5-B572-93AE35BDE700}This paper documents two facts about Federal Reserve inflation forecasts. The first is that there was a systematic under-prediction of inflation during the sixties and the seventies and a systematic over-prediction of inflation during the eighties and nineties.
Ned
@ Chris Powell
Thanks for the info on the new diamond deriv/paper market....yes, it is a "good grief" !

One thing to be sure, the last derivative market will be manure because there is no physical shortage of this commodity.

Happy holidays to you and all of the GATA crew and your associates.

May the New Year be properous and truthful !

Take care
Goldilox
b94bccd
frosty1,

Please don't mis-quote me to make your point. I NEVER posted "5% consumer actions will not change the game."????", but your quotes suggest I did.

1) I don't think that the consumer game is as important as you seem to believe. As "freedoms" are falling like dominoes, so goes the importance of the consumer. Serfs may not get to choose what they purchase, as food and energy might eventually be allotted through government austerity programs, a la New Orleans. Tchochkis and personal electronics are likely to give way to RFIDs and more "surveillance gear", purchased by the goobermint.

2) I also never said I thought massive deflation was the end-result, although it may possibly occur after a hyper-inflationary period.

Perhaps you inferred that conclusion from the fact that I posted a Prechtor article, but I also stated that I don't have to believe everything in an article to post it. IMHO, resources are better for aiding the exploration of ideas, not so good for swallowing wholesale sans examination.

As for what I "believe", I have stated once before that I do not have a very clear crystal ball, but I'm sure it won't be "pretty" for Joe Ave!
Goldilox
Don't Worry, Be Happy!
http://www.financialsense.com/Market/wrapup.htmsnip:

The market escaped the fall decline, the summer rally has stretched right over into the Santa Claus rally, we are now in the "best six months of the year" for the stock market. The Wall Street analysts are all rapidly bullish and the market is at new highs. So, why worry?

The advance out of the 2002 low has created an environment in which there is basically no fear in the market place whatsoever. Yes, I know the arguments as to why. I guess the number one reason I hear is that we are now in a new paradigm and that the markets are perfectly controlled by the invisible hand. I will admit that I have been surprised by the market's resilience. I will also admit that I do believe in market manipulation, but I do not believe that such manipulation can continue indefinitely or that "they" have perfect control of the market. I do believe that "they" have a great interest in trying to control the markets on an ongoing basis. But, at some point I believe that the weight of the market will become great enough that whatever the degree of control over the market really exists will be lost.

The following text on Manipulation was taken from Robert Rhea's book, The Dow Theory.

"Manipulation is possible in the day to day movement of the averages, and secondary reactions are subject to such an influence to a more limited degree, but, the primary trend can never be manipulated."

Hamilton frequently discussed the subject of stock market manipulation. There are many who will disagree with his belief that manipulation is a negligible factor in primary movements, but it should always be remembered that he had, as a background for his opinions, a most intimate acquaintance with the veterans of Wall Street, and the advantage of having spent his life in accumulating facts pertaining to financial matters.

The following comment, taken at random from his many editorials, affords convincing proof that his views on the subject of manipulation did not vary and I will add that even today I feel that these views are not too far from the truth.

�The average amateur trader believes the stock market is guided in its trends by a certain mysterious �power,� this belief being the one factor, next to impatience, most responsible for his losses. He reads tipster sheets avidly; he scans the newspapers industriously for news likely, in his opinion, to change the trend of the market. He does not seem to realize that by the time the news of real importance is printed, its effect, so far as the basic trend of the market is concerned, has long ago been discounted.�

�A limited number of stocks may be manipulated at one time, and may give an entirely false view of the situation. It is impossible, however, to manipulate the whole list so that the average price of 20 active stocks will show changes sufficiently important to draw market deductions from them.� (Nov. 29, 1908)

�Anybody will admit that while manipulation is possible in the day-to-day market movement, and the short swing is subject to such an influence in a more limited degree, the great market movement must be beyond the manipulation of the combined financial interests of the world.� (Feb.26, 1909)

��the market itself is bigger than all the �pools� and �insiders� put together.� (May 8, 1922)

�One of the greatest of misconceptions, that which has militated most against the usefulness of the stock market barometer, is the belief that manipulation can falsify stock market movements otherwise authoritative and instructive. The writer claims no more authority than may come from twenty-two years of stark intimacy with Wall Street, preceded by practical acquaintance with the London Stock Exchange, the Paris Bourse and even that wildly speculative market in gold shares, �Between the Chains,� in Johannesburg in 1895. But in all that experience, for what it may be worth, it is impossible to recall a single instance of a major market movement which depended for its impetus, or even for its genesis, upon manipulation. These discussions have been made in vain if they have failed to show that all the primary bull markets and every primary bear market have been vindicated, in the course of their development and before their close, by the facts of general business, however much over-speculations or over-liquidation may have tended to excess, as they always do, in the last stage of the primary swing.� (The Stock Market Barometer) ��no power, not the U. S. Treasury and the Federal Reserve System combined, could usefully manipulate forty active stocks or deflect their record to any but a negligible extent.� (April 27, 1923)

�It is true that a flurry in the price of wheat or cotton may influence the day to day movement of stock prices. Moreover, sometimes newspaper headlines contain news which is construed as bullish or bearish by market dabblers, who collectively rush in to buy or sell, thus influencing or �manipulating� the market for a short period. The professional speculator is always ready to help the movement along by �placing his line� while the little fellow timidly �lays out� a few shares; then, when the little fellow decides to increase his commitments, the professional begins to unload and the reaction ends, and the primary movement is again resumed. It is doubtful if many of these reactions would ever be caused by newspaper headlines alone unless the market was either overbought or oversold at the time---the �technical situation� so dear to the hearts of financial news reporters.�

�Those who believe the primary trend can be manipulated could, no doubt, study the subject for a few days and be convinced that such a thing is impossible. For instance, on September 1, 1929, the total market value of all stocks listed on the New York Stock Exchange was reported to have amounted to more than $89,000,000,000. Imagine the money which would have been involved in depressing such a mass of values even 10 per cent!�

This article was written on Thursday, December 21, 2006, and the volume for that day on the NYSE, the Nasdaq, the NDX, the S&P 100, the S&P 400, the S&P 500, the S&P 600, the Industrials, the Transports and the Utilities totaled some 7.53 billion shares from around the planet. If the thickness of one sheet of printer paper was equivalent to one share traded or one unit of volume, then Thursday's volume would equate to a stack of printer paper over 424 miles high. As I hope you can see from this example, for the market to be controlled in a significant and continuous way, it would require unimaginable volume and money. Now this is not to say that it can't be done under the right circumstances. But, what I am saying is that once the tide really does turn, I believe that whatever the degree of control over the market may exist will be lost by the shear volume or weight of the market.

Next, I want to address the complacency in the market place. Below I have included a weekly chart of the Industrials as of Thursday's close, along with the Investors Intelligence readings in the upper window. The blue line at the 50 percent line represents the same number of bulls as bears. In other words, at that level, market sentiment is such that there are just as many bulls as there are bears. We have just completed the 217th consecutive week with this reading at or above the 50% level. This indicator moved above the 50% level the week of October 25, 2002. The week of June 23, 2006 this indicator did move to the 50% level. But nonetheless, it has been either at or above the 50% level now for an unprecedented 217 consecutive weeks. These numbers are telling us that the market place simply is fearless and complacent about a market decline. . .

Now let me connect the dots. Here we sit with a Fed that certainly has an interest in keeping things afloat and quite honestly, has done a very good job of it. We also have a public with virtually no fear or worry whatsoever. As the market was deflating into 2001 and 2002 the Fed began to flood the system with liquidity. In doing so, they ignited the housing boom, saved the stock market from what began as the initial leg down of a much nastier bear market and instilled a complete sense of complacency onto the public. As a result, everything floated higher on the back of the excessive liquidity that was pumped into the system and now here we sit fat, dumb and happy.

First, the housing and commodity dominos fell. Now, here we sit with the stock market still holding up at this point and everybody seems to be oblivious to the fact that it is among the very next of the dominos to fall. Well, as I have been explaining, we continue to see the warnings from the ongoing Dow theory non-confirmations. This non-confirmation is telling us that something is wrong just as it did in 2000, and just as the non-confirmation between lumber, the housing indexes and copper did more recently. Also, my statistical data surrounding the 4-year cycle continues to suggest, contrary to popular belief, that the 4-year cycle did not bottom this past summer. On top of that, we are now beginning to see the poor economic data continuing to stream out with the latest example of this being the Philadelphia Fed Survey and Industrial Production on Thursday.

Yes, at this time the advance out of the summer low is still intact according to Dow theory. But two of the previous reinflation bubbles have already begun deflating and we are seeing technical cracks appearing in the stock market. Thus, things are not as rosy as they appear. All the while the public is numb.

Personally, I have my doubts about the "powers that be" being able to pump the economy enough to save it again. After all, we are still seeing the deflating of the bubbles in housing and commodities from the last, or really the ongoing, reinflation effort. All the while, the stock market is still hanging on from these reinflation efforts but is increasingly moving on to thinner and thinner ice. I believe that the housing and commodity markets were the first dominos to topple and that the stock market will likely be the next. We are certainly seeing indications of this anyway. Also, the sentiment data tells me that the public is fearlessly complacent and obliviously numb to the real danger here. So, in light of these warnings and in spite of the fact that the stock market is at all time highs, I don't like what I see and the overall picture here makes me nervous.

-Goldilox

Perhaps part of the message from P&B to China was the global need to use their trade imbalance to keep markets for both stocks and bonds propped up and thus keep the consumer game going, but will it work?
MK
Chris. . .
You're right about the South Korean reaction. Japan is also on hold as far as raising interest rates goes.

More. . .

The recent monetary crisis and stock market crash in Thailand will make a major impression on other Asian states. We forget that the infamous Asian contagion in 1997 began in Thailand and spread quickly throughout Asia. In its wake, it nearly bankrupted several countries including Indonesia and South Korea (where citizens were asked to turn in their gold as a patriotic gesture) and led to actual debt defaults in Russia and Brazil. The concern in the West at the time was that cascading debt defaults would eventually spread to Wall Street banks and financial houses. This created a huge market for gold in the United States. Odd that you don't hear many MSP (mainstream press) types making those references now when the similarities are so obvious.

At the root, the problem today is very much the same problem we had in 1997. Hot speculative money looking for a home finds a currency which pays a premium interest rate. They buy that currency in the form of stocks and bonds to maximize returns. That drives up the currency and kills the internal economy. (These are all export driven economies.) The government reacts. In this case, Thailand imposed capital controls in an attempt to keep the hot money out. Bingo! The next that happens is that the stock market collapses.

Thailand serves as warning of the net effect of the current international economic structure. This is another manifestation of globalized bubblenomics at work. The bubble is pumped up by hot speculative money; then exhausted at the first sign of trouble leaving a mess behind which the local central bank then attempts to clean up by printing money making things worse.

The potential for a major problem in Asia is something very few people are thinking about as we unwind into the December holiday season. But it is there. And it is the direct result of the "deadly tango" I discussed yesterday.

Add in:

One other item, people keep forgetting - When interest rates are low in a particular currency like the yen or the won, it encourages carrry trades. The currency is borrowed then dumped for higher paying currencies like the dollar, the pound and the euro. This weakens the Asian currency and strengthens the target currencies in what might be described as a compounding effect of keeping your currency relatively cheap -- and a nuance in this age of financial engineering. The incentive, of course, is for the target countries competitively devalue their currencies.

All of this in the end contributes to the inflationary wave building in the world economy, as discussed in my previous post.
Druid
Hmmmm...
http://www.raremoneysheets.com/
Druid: My father sent me a copy of a full page ad that ran in his local newspaper. Check the site out. My guess is bigfloat is in the pipeline and heading home. Is the AMERO a done deal and now we're off to collector's additions?
mikal
Where does the tax assessor go next?
http://www.freemarketnews.com/Analysis/118/6625/knapp.asp?wid=118∋d=6625 Property Values, Real and Imagined - Tom Knapp - Dec 22
A pointed and explicit look at a few of the many aspects of today's housing market. Knapp has a certain feel for cities, and having lived and worked in more than a few myself, I appreciate his humor and concur with his main premise.
How much is that city or town house worth after all those years in which tax assessors and government policies may have adversely affected most neighborhoods and the business district(s)?
Shall you measure the value of your home not in dollars, perks or market attractiveness but in it's
basic utility to you and your family?
And at the lowest cost in crime, tax, maintenance and insurance (and with a minimum quality of life such as utilities and other public services, amenities and/or business conveniences)?
As Knapp points out, the tax assessors are on the move,
with help from larger bureaucracy & new gov't inventions
like preferential tax incentives, regulations and rules.
Our markets seem anathema to agencies like HUD, SEC and CFTC.
frosty 1
Goldi...sorry to ruffle your feathers
You are very good at seeing all sides,thats what I like about your posts.
I do like your own take on matters though.
Anyway,you said "Actually 95% of U.S. wealth rests in 5% of the hands, so ave. joes 5% only matters in retail....where it makes up a larger portion of the total,by itself not enough to sustain said trend."
I disagree, with your take on the role of joe in the game,without ave. joe doing his consumption thing,the whole game stops.You see...ave. joe IS the game,he is not only retail but energy,raw materials'speculation,lodging,dining education,ect.
Take joes punch bowl away and you now have a lot of the (5% club of the wealthy) in trouble,the U.S.
Average joe is going to feel pain,but he is not near done being used. IMHO.
USAGOLD / Centennial Precious Metals, Inc.
Step inside and shop at your convenience. Open 24/seven.
Topaz
G'lox: IMF $94B Gold sales?
Couldn't google any info re: this G'lox, can you cite a source pls?
Frankly talk of IMF sales is right on queue here as it's my feeling the Physical Market is struggling for liquidity.
Recent EU sales seem to me to be far too early in the "Wag2C" year as they (EU) are perceived in my opinion to be a seller of last resort.

We'll see soon enough.
Topaz
d-uh!
Of course EU should be ECB ...under duress the ECB has had to pony up metal so early in the year "because" EU subsidiaries don't want to ...or can't! IMO.
Matthew
IMF gold
http://en.wikipedia.org/wiki/Official_gold_reservesG'lox, $94billion of gold is about 4700 tonnes, taking gold at about $20k a kilo.
IMF reserves are stated at 3217 tonnes (see below).
If we can verify this announcement, things may get interesting!
Goldilox
Ghost of Christmas post
@ Topaz,

As TC graciously pointed out, my fumble fingers posted my (previous) password in Post @ 150442, so the gold sales info in post #150444 came not from me, but an enterprising imposter who also noticed my faux paux!

Thanks to quick Admin response, I am back with a new password.

-G'lox

frosty1,

I didn't think you were misquoting me maliciously, but your synopsis of my statement changes its meaning a little more than I am comfortable with.

Suffice to say we disagree about the ramifications of changes in the consumer factor in this "economic miracle", but it seems we have both thought it out and come to different conclusions . . . viva la difference!
Goldilox
Indian gold jewellery may lose duty-free access to US
http://www.tribuneindia.com/2006/20061223/biz.htm#11snip:

Washington, December 22
Six countries, including Brazil, India and Venezuela � could lose duty-free access to the US market in 2007 for some of their key exports under a revamped U.S. trade programme signed into law on Wednesday by President George W. Bush, U.S. trade officials said.

Thailand, Ivory Coast and the Philippines could also lose trade benefits because of recent changes Congress made to the US Generalised System of Preferences programme for developing countries, the U.S. Trade Representative's (USTR) office said.

Under previous law, the six countries received a waiver to continue exporting certain goods to the US on a duty-free basis despite exceeding thresholds that otherwise would have ended those benefits.

But motivated in large part by US frustration with India and Brazil in world trade talks, the revamped GSP programme allows the Bush Administration to revoke such waivers when one of two conditions are met: imports of a certain item from one country exceed an annual cap of about $187.5 million, or comprise 75 per cent of the total U.S. imports of that item.

The USTR said its preliminary assessment indicated India would lose duty-free access for gold jewellery and brass lamps. India shipped $1.6 billion in gold jewellery and $20 million in brass lamps to the US under the GSP programme in the first 10 months of 2006, the USTR said.

The 32-year-old GSP program provides duty-free treatment for thousands of goods from 133 developing countries. � Reuters

-Goldilox

When governments disagree, first response usually takes the form of "protectionism", appropriately or not.
slingshot
Cramer, Garbage or Gold Nugget
http:tinyurl.com/ya4wlw
Video of Cramer making some unusual statements.
Slingshot------<>
slingshot
(No Subject)
http://tinyurl.com/ya4wlwNever get them right.
Goldilox
Cramer on Hedge Funds
@ slingshot,

I especially like "It's all fiction, fiction, fiction," and "Spitzer's off to Albany, and the SEC doesn't really understand . . ."
Chris Powell
Like S. Korea, Thailand cites power to debase its currency
http://biz.yahoo.com/ap/061224/thailand_embattled_minister.html?.v=2Thai Official Explains Capital Controls

By Rungrawee C. Pinyorat
Associated Press
Sunday December 24, 2006

BANGKOK, Thailand -- Thailand's Finance Minister Pridiyathorn Devakula has called for China to allow its currency to rise against the dollar and has defended foreign currency controls he said were imposed to save the country's export-dependent economy.

"If currencies of our (export) competitors appreciate more or less at the same level as ours, I don't think we would need this measure any more," Pridiyathorn told The Associated Press.

"It would help a lot" if China revalued the yuan," he said, "but it would depend on the degree of revaluation."

Pridiyathorn, the former central bank governor and U.S.-trained economist, said he watched with alarm as foreign investors poured three times more cash into the country in the first week of December than in a typical week in November, sending the baht to a nine-year high against the U.S. dollar.

"A small nation like ourselves -- if we don't protect ourselves, who else will protect us?" he said.

With exporters complaining about the strengthening baht, he said, something had to be done to rein in speculators who were behind the surge and protect the economy.

"We have to save our country. We have to save one of the growth engines, which is exports," he said.

While the measures imposed Monday inflicted pain on investors, failing to stem the baht's rise would have had even worse negative long-term consequences for economic growth and the stock market, he said.

"If we didn't do anything, the stock exchange would have plunged further and the catastrophe would have been more severe," he said.

Still, Pridiyathorn -- who until now has courted little controversy -- and the Thai central bank have faced a barrage of criticism from investors inside and outside the country who endured a wild financial ride since the controls were announced Monday night.

Thai shares plunged nearly 15 percent Tuesday -- rattling regional bourses -- but then bounced back 11 percent Wednesday after authorities rescinded the curbs on foreign stock investing while retaining them on bonds and other debt instruments. The market flattened out the rest of the week.

The baht, meanwhile, weakened more than 3 percent over the course of the week since hitting a nine-year high Monday of 35.09 per U.S. dollar. Pridiayathorn pronounced himself satisfied Friday that the measures had achieved their desired effect on the currency.

No financial greenhorn, Pridiyathorn is one of the most respected members of the interim Cabinet appointed by the military after the September military coup that ousted elected Prime Minister Thaksin Shinawatra.

After getting an MBA from Wharton School of Business at the University of Pennsylvania, he spent the next three decades in the country's commercial banking sector, including the Thai Farmer Bank and Export-Import Bank of Thailand, before becoming the country's central bank chief in 2001.

But this week's events -- particularly the policy flip-flop -- have tarnished Pridiyathorn's reputation a bit.

"The measures were too strong and beyond the comprehension of investors," said Teerana Bhongmakapat, an economist of Bangkok's Chulalongkorn University. "It shows that the policy was made without thorough consideration. Foreign investors may think the authorities in this country will just do whatever they want."

Thitinan Pongsudhirak, political scientist at Chulalongkorn University, said he expected strong pressure on the government to change its finance minister.

"The mistake has seriously undermined the government's credibility," he said. "The pressure will keep increasing and Pridiyathorn will be a liability that continues to undermine the government's credibility."

But for now that appears unlikely with markets stabilizing and Prime Minister Surayud Chulanont on Thursday expressing full support for his economic team, including Bank of Thailand Gov. Tarisa Watanagase.

Pridiayathorn also said during the interview that the capital curbs were temporary but gave no timeframe for when they would all be lifted.

"This is a short-term measure. It's not supposed to stay for life," he said. "Once we get rid of the measure, the problem will be over, and I think the whole world will understand us."

But pointing out that Thailand has $63 billion in foreign currency reserves, he said the central bank could continue to intervene in the currency market to buy dollars to help weaken the baht.

For his part, Pridiyathorn appears unruffled by all the controversy and said that time would show that authorities had acted wisely.

"Credibility and integrity is the thing that you should observe. Not just one move," he said. "We're doing the right thing."
slingshot
Dollar/Dinar
http://www.bruneitimes.com.bn/section/opinion/19dec2006-3.phpWorried about the US dollar.
Slingshot-------<>
Chris Powell
ETF investors buying the dip in silver
mikal
Good vibrations resonate for the holidays
http://www.iht.com/articles/2006/12/24/america/web.1224hiphop.php Fan asks hard questions about rap music - Americas - International Herald Tribune - Erik Eckholm - Dec 24
A documentary film is just beginning to circulate
on hi-hop music that we will be hearing much more about.
This excellent article is two pages but very short.
Most will find the social and cultural issues familiar
except for the recent backlash within the black(and white) community, among hip-hop fans and from some practicing rap artists.
The problem gets defined to a great extent here
not just in the effect on youth of numerous prevailing themes of violence, sexism, hedonism and crime, but where they question large "corporate sponsorship".
They don't mention heavy metal or television or media advertising but at least the article focuses on this
new film and it's beginning implications.
All these concerns resemble the impact of big money
distortions and dislocations on the world's political processes, financial markets and social, academic, religious and scientific institutions.
contrarian
Shenanigans
http://www.globalresearch.ca/articles/SCH502A.htmlCramer Video: excellent exposee on what really happens behind the scenes in the stock market. In similar truth-telling vein, for those that have eyes that want to see and ears that want to hear, here's a link to a video that dispassionately lay out what happens when the oligarchy (military-industrial complex) runs out of enemies.
Golden Lionheart
Happy Christmas and a Prosperous New Year
I send the Seasons Greetings to all the Posters and Lurkers on this great Forum.

I have seen little mention of Christmas on the forum so it looks like it has been left to a devout born again Atheist to spread the word. Its Christmas! Remember?

I hope in 2007 we will have more posts about what gold is actually doing and is likely to do. I scan through the posts every day and quite honestly a lot of it bores me to tears.

I would assume that most of us are investors in PM's, whether it is in the physical (good stuff) or stocks(where we can make money)so guys how about some input on how you see gold performing in 2007.

Personally I see the gold price starting to climb again early in 2007 and supassing the $730 mark in short time.
Eventually a year or two down the track I suspect it will double that price.

Enough said. Its 38C where I live and I am off to the baech for a few hours. Cheers.
Goldilox
Christmas Eve battle
@ Gandalf,

Are you watching this? Your Microsoft Hawks just took the lead. Maybe the SuperChargers aren't so "invincible".
Sierra Madre
This is Christmas, so this is OFF TOPIC, sort of...

How do you see the Universe when you look up at the starry sky?

Do you see it as a vast mystery of inconceivable masses of stars, and do you see humans as insignificant microbes, the product of chance, populating a planet lost in the immensity of space; a planet in itself of microscopic size in comparison with the giant stars out there...Do you consider the Universe as essential dead, empy except for us meaningless humans?

I do NOT see it what way. When I "look upon the night's starred face.." I see a Universe teeming with an infinite number of humans whose habitation it is. All of whom yearn with more or less faith, for an extension of our lives in a world of Spirit.

The importance of humans cannot be degraded by a comparison of their physical insignificance regarding their size when compared to the giant stars and vast galaxies of the Universe. Because we are endowed with souls, "whose faculties can comprehend the wondrous architcture of the world, and follow every wandering planets course, still climbing after knowledge infinite..."

Our souls do not live in Time and Space, nor can they be measured in such terms, and our souls transcend Space and Time and do not come to an end with death. "Oh Death! Where is thy sting?" A marvel it is, that insignificant as we are physically with regard to a vast Universe, our souls and minds are capable of comprehending it.

We humans are created beings, created according to a Design, a plan, a System, and not the result of chance. We are as Universal as salt, as water, as any chemical compound, and thus, we inhabit the whole Universe, and the whole Universe of humans prays to its Creator, at every instant.

God rest you Merry, Gentlemen!

SIERRA

slingshot
Ho, Ho, Ho
http://members.aol.com/melizo/midi/bells_gm.midMerry Christmas to All, and to All a Good Night!

****** A Little Music Maestro *******
TownCrier
A beginner's guide to investing in gold
http://www.moneyweek.com/file/23315/a-beginners-guide-to-investing-in-gold.html22 December 2006; (MoneyWeek) -- For centuries gold has been coveted for its unique blend of near indestructibility, beauty, rarity and because of its status as a universal currency. Empires and nations have sought to possess gold as a medium of international exchange, as a store of wealth and in order to increase and preserve power. Individuals have used gold as a store of wealth and as insurance against the fluctuations and depreciation of paper money and other macroeconomic and geopolitical risks. Perhaps no other market in the world has the universal appeal of the gold market.

Successful investing is about the diversification and management of risk. In layman's terms this means not having all your eggs in one basket. We know from history that markets can and do crash and if you are not diversified your entire nest egg can be wiped out.

So a healthy portfolio includes a wide range of assets including a variety of equities with exposures to different market sectors and regions; a variety of different countries� bonds; a diversified property portfolio; a cash component and a 5-15% allocation to gold-related investments and gold bullion. The key is to determine what amount of each asset class to have. In a globalised and increasingly integrated global economy, a portfolio should be compiled based upon current global macroeconomic fundamentals.

Some exposure to gold should be included in all diversified portfolios. A good rule of thumb would be a minimum allocation of around 10% to gold and related gold-investments.

One's motivation for buying gold is fundamental to deciding in which form you should buy it. Are you a speculator, investor or saver? Do you wish to take a short term speculative position in gold? Are you investing for the short, medium or long term? Or are you diversifying, saving or using gold as a form of financial insurance?

Investing in physical gold

Physical gold should form a part of every properly diversified portfolio. It is a universal finite currency, held by every central bank of note in the world.

It is to be taken possession of or stored with a secure third party and should not be traded. One does not trade an insurance policy and thus as a form of financial insurance, physical gold should not be traded.

Gold bullion is the ultimate safe haven asset and a great way, if not the best way, of ensuring wealth preservation and for passing wealth from one generation to the next. Once the solid base or core holding of gold bullion is achieved in a portfolio then other investments in gold such as mining stocks and mutual funds and other more speculative gold investments can be considered.

Numismatic or older and rare coins are bought not solely for their precious metal content but also for their rarity and their historical, aesthetic appeal. They are leveraged to the gold price which means that the price of these coins will generally surpass and increase faster than the gold price in a bull market (due to their historical and aesthetic value and to their rarity) and will decrease by more when gold is in a bear market.

Many investors opt for high-quality pre-1933 gold coins graded MS-65 or better by either the Professional Coin Grading Service or the Numismatic Guaranty Corporation. They are bought by both collectors and investors and most investors opt to take possession of these older coins unless they have invested in significant quantities.

...

Experienced and knowledgeable investors have long known that gold and gold related investments can be solid investment choices. Gold is stable in times of global geopolitical instability and when there is economic uncertainty, recessions and depressions. It is important that investors look at their portfolios holistically. Used correctly, gold and gold related investments can be highly effective components of a properly diversified investment portfolio.

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

A nice article for the newbies... featuring two helpful graphics of the investment/risk pyramid.

Enjoy.

R.
Goldilox
Ethiopia: NBE Buys Over 600 Kgs of Gold
http://allafrica.com/stories/200612240089.htmlsnip:

The National Bank of Ethiopia (NBE) in the past five months (July-November) bought 612 kg of gold from traders, it was learnt. The gold which NBE purchased is mined by artisanal miners in southwest Ethiopia.

In a bid to legalize the illicit gold trade in different parts of the country, two years ago the government enacted a proclamation which enables individuals to buy gold from artisanal miners and to either export it or sell it to the NBE. The directive was jointly prepared by the Ministry of Trade and Industry, Ministry of Mines and Energy and Ministry of Revenue.

Since the introduction of the new law that liberalized the gold trade, the amount of gold sold to NBE has been increasing. In 2004-2005 it bought 339 kg of gold from traders. In 2005-2006 the bank bought 749 kg. This figure does not include the 612 kg of gold that NBE bought in the past five months.

When the traders sell gold to NBE, the bank deducts one percent of the selling price as service charge. However, upon the request made by the Ministry of Mines and Energy, NBE has reduced the service charge to 0.25 percent. The new tariff went effective last week.

The mining operation department with the ministry is encouraging artisanal miners to increase production. It is assisting them in forming associations. So far MIDROC Gold is the only company which has been mining primary gold. The company produces four tonnes of gold per annum. West Wellega Explorations, a company licensed by the ministry to produce placer gold in west Wellega, will start production in February 2007. West Wellega, owned by Ethiopian and Russian business people, has been prospecting for primary gold in the region. In the 2005-2006 fiscal year Ethiopia exported 4.97 tons of gold valued at 64.7 million US dollars.

-Goldilox

A CB that understands the prudence of keeping some of its gold product at home.
Goldilox
Exxon posts fresh bumper profits
http://news.bbc.co.uk/2/hi/business/5220954.stmsnip:

Oil giant Exxon Mobil has posted the second-largest quarterly profit ever recorded by a publicly-traded US firm.
Helped by high oil prices, the company earned $10.4bn (�5.6bn) in the second quarter of 2006 - a 36% increase on the same period of 2005.

Exxon, which is the world's biggest oil company, said its quarterly revenues rose by 12% to $99bn.

Global oil prices are at record highs because of ongoing concern about the security situation in the Middle East.

Windfall taxes

With Exxon and the other oil giants continuing to set fresh record profits, some analysts say there might be a backlash against the sector.

Critics argue that it is unfair for the oil firms to pass on the high price of crude oil to motorists at the same time as pocketing record earnings, leading to calls for the introduction of windfall taxes.

Exxon's results beat Wall Street expectations, but came in just behind its record profit of $10.7bn set in the fourth quarter of 2005.

Its trading statement comes a month after investors defied the Exxon board and approved a resolution saying directors should be chosen by a majority vote.

It represented a victory for Exxon investors angered by the near-$400m retirement package of ex-chairman and chief executive Lee Raymond.
Goldilox
Venezuela gives Exxon ultimatum
http://news.bbc.co.uk/2/hi/americas/4544390.stmsnip:

Venezuela has given the world's biggest oil company, ExxonMobil, until the end of this year to enter a joint venture with the state.

Failure to do so will almost certainly result in Exxon losing its oil field concessions in the country.

Venezuela's socialist government has now signed new agreements with almost all foreign petroleum companies.

After months of pressure from left- wing leader Hugo Chavez most foreign oil firms working there have caved in.

They have agreed to hand over a controlling stake of their oil interests to the Venezuelan state.

This means that Venezuela now calls the shots in what the foreign guests can and cannot do.

In addition, the companies which have signed the new contracts - such as Chevron, BP, Shell and Total - will in future be presented with much higher tax bills by the government.

Foreign unease

But Venezuela says it is only fair that the foreigners are made to pay up as they have got away lightly in the past.

Much of the oil revenue in Venezuela goes into social projects in shanty towns and poor rural areas.

But the US oil giant, ExxonMobil, is digging in its heels and is so far refusing to agree to the terms of the new deal.

Exxon risks losing Venezuelan operations if it fails to comply.

There is growing unease among foreign energy companies based Latin America that they may be forced to become junior partners by a string of left wing governments.

In the case of Bolivia and the apparent shift to the left there following elections on Sunday, it is possible that the new government will decide to follow Venezuela's example and renegotiate oil and gas contracts with foreign investors.

- Goldilox

Resource rich South American governments continue to pressure Exxon, who again announced record profits, for a bigger piece of the pie.
Goldilox
Court halves Exxon spill damages
http://news.bbc.co.uk/2/hi/business/6204819.stmsnip:

wildlife
A US court has almost halved the damages oil giant Exxon Mobil must pay for a 1989 oil spill off Alaska.
The San Francisco Federal appeals court reduced the payment from $4.5bn (�2.3bn) to $2.5bn (�1.3bn), saying the previous decision had been excessive.

It is the third time damages in the case have been reduced.

The case - started in 1994 by more than 32,000 fishermen, native Alaskans and property owners - is one of the longest non-criminal ones in US history.

In the original court ruling, Exxon was ordered to pay out $5bn.

Later decisions ordered the lower Alaskan court to set a lower limit for the penalty, but refused to say how much the penalty should be cut by.

However, in the latest 2-1 judgement, Chief Judge Mary Schroeder and Judge Andrew Kleinfeld declared it was "time for this protracted litigation to end."

-Goldilox

While Chavez and his neighbors press Exxon to share more of its billions of profit with the territorial owners of the oil, US courts continue to hack away at Valzez spill penalties.
contrarian
The Last Stage of Capitalism
http://www.rumormillnews.com/cgi-bin/forum.cgi?read=97064Here's where we're at--the last stage of capitalism.

"Thank you for the informative post. We have transferred our assets, our industries,our capital (money, labor, and industry) and our employment overseas for quite a period of time now. It's called "monopoly capitalism." It tends to enrich a very few individuals and entitities and impoverish the public at large. It tends to concentrate political and economic power in a small number of individuals and entitities. It has been called the last stage of capitalism by some economic and political theorists."

Conclusion: More and more you hear calls for a currency called the "Amero" - which would be an amalgam of Mexican, Canadian and American dollars and pesos. American opposition might be overcome if the dollar weakens enough, and that may be the plan. You never know, when it comes to the money elite, what exactly they have in mind. But whether the dollar collapses in a day, a year or a decade, gold and silver hold their value. Trust money or trust politicians. Your choice."

mikal
Suit up!
http://www.msnbc.msn.com/id/16347865Company Says Copper Clothes, Fabrics Heal - U.S. Business - MSNBC.com - December 24, 2006
Skeptics abound, and even the author manages to reveal numerous biases towards cutting edge science.
But as mainstream media must be behind the curve about the world's most tantalizing stories, this article still grudgingly gives away some valuable input in the process of grappling with "the other precious metal", copper.
Suit up, "variety is the spice of life" ;)
LimitUp
Happy Holidays to you all
& a Golden New Year.
Druid
contrarian (12/24/06; 21:36:02MT - usagold.com msg#: 150472)


Druid: Real capitalism ended prior to 1913. The rest is well crafted mythology.
Golden Lionheart
Ho Ho Ho from Aussielanders
"http://www.kenduncan.com/echristmas"

Not so many bells here, more beer and BBQ's....but is nearly 40C.
melda laure
i aran aranion, i heru herion
Mythology, that's all that economics is anymore. My my. I've been much too busy of late (sometimes I get shanghaied into special detail duties up north), but I see that I haven't missed much.

I've no idea what to make of the failed Paulsen Mission to China, I shall have to think on it a bit more. I am also suprised that the markets do not seem to be interested in discounting our lack of decisive progress in the ME.

No bag of silver for the boy king, only gold will do. May your stockings be as heavy!
melda laure
come thou long expected bear market
http://www.financialsense.com/editorials/cederholm/2006/1224.html@ sir Golden Lionheart

SNIP
So many times in my years spent working on litigation and investigations for the FDIC and the RTC on failed banks and savings and loans, I saw "alleged" guilty parties walk from all their misdeeds, responsibilities, and liabilities. When confronted with evidence against them and given a choice between being crooked or stupid, we so frequently heard: "Boy, was I dumb!" Costs for the problems, misdeeds, and inactions I've been chronicling will run in the mega-billions - even trillions of dollars. There is now potential to destroy this nation as we know it for generations to come.
END

If we have the downturn (at last) mining equities will tank with the rest of them (possibly a buying opportunity- hard to say). I could easily imagine physical experiencing a 10 to 20% drop temporarily.

Maybe.

We have already digested most of the blow off from $700 I think. Eventually, those factories will have to be "recapitalized".

Eventually the world will end too I've been told.
BillinOregon
Merry Christmas
Merry Christmas to you all and may God Bless you in the new year.

BillinOregon
contrarian
Federal Reserve
Druid--Good point. I could not agree more. A monster that charades as a governmental entity yet enriches the private interests behind it, the private interests you predictably never hear about. A viler creature could not be imagined--a monster that begets wars, death, destruction, poverty, and continual inflation. And given the increasing value of pennies and nickels, a monster that reveals itself for the paper tiger and fool it is.
ge
Insider Selling Ratio Near a 20-Year High
http://www.businessweek.com/investing/insights/blog/archives/2006/12/insider_selling.html"According to the the CCH Washington Service Bureau, an SEC data miner, November saw US company executives offload $8.4 billion in stock and make just $133 million in purchases. The resulting sell-to-buy ratio of 63.18 has not been seen since January 1987, when the Dow Jones Industrial Average was wowing investors by breaking 2,000 for the first time (it's now at 12,300)."
Chris Powell
China says it will continue stable monetary policy
http://news.yahoo.com/s/nm/20061225/bs_nm/china_economy_cbank_dcFrom Reuters
Monday, December 25, 2006

China's central bank said on Monday that it would continue to take steps to keep investment and credit growth in check, while pressing ahead with efforts to make the value of its currency more market-driven.

In a brief statement on its Internet site (www.pbc.gov.cn) summing up the proceedings of a meeting of its monetary policy committee, the People's Bank of China said that while the economy was generally functioning well, it still encountered some challenges.

"The economic situation is good overall, but it still faces problems such as an structural imbalances, an overly resource-intensive growth model and imbalanced international payments," the central bank said.

It said that it would continue to implement a stable monetary policy, while trying to improve its control over liquidity in the banking system. It did not elaborate.

The central bank has raised interest rates twice this year and banks' reserve requirement ratios three times, as part of a broader campaign to rein in a credit-fuelled investment boom. That campaign has also involved administrative measures such as stricter approval procedures for new investment projects.

In response, annual growth in fixed-asset investment slowed to 26.6 percent in the first 11 months from a peak of 31.3 percent in the first half.

The central bank also reiterated its long-standing vow to allow market forces to play a greater role in determining the value of the yuan, while keeping the currency "basically stable at a reasonable, balanced level."

Since it revalued the yuan by 2.1 percent and decoupled it from a dollar peg in July 2005, Beijing has frequently said that it was committed to letting the yuan become more flexible over time, but that it must do so at its own pace, despite U.S. pressure to allow it to appreciate more quickly.

The yuan has now appreciated a further 3.7 percent since the revaluation, with the pace having picked up in recent months, but many U.S. critics say it remains seriously undervalued, giving Chinese exports an unfair advantage in global markets.

The central bank also said that it would actively promote domestic consumption while working to keep prices stable. It did not mention any details of such plans.

Many economists and officials have said that the economy relies too much on fickle investment and exports, and not enough on household consumption, exposing it to greater risks of a downturn and contributing to trade friction.

Chris Powell
China lowers gold-trading threshold for small investors
http://english.people.com.cn/200612/25/eng20061225_335691.htmlFrom Xinhua News Agency
via People's Daily Online, Beijing
Monday, December 25, 2006

In an effort to attract small private investors, China on Monday lowered the trading threshold at the Shanghai Gold Exchange (SGE) from 1 kilogram to 100 grams.

SGE sources said 100-gram gold bars, which debuted on Monday at an initial price of 160 yuan per gram, started spot trading at an opening price of 157 yuan per gram and then remained flat for the entire trading session, closing at 157 yuan per gram, a drop of three yuan.

During Monday's trading, only 0.4 kg or four gold bars of this type changed hands, and transactions amounted to only 62,800 yuan.

However, business was brisk for other types of gold. A total of 2,359 kg of two other conventional types of gold were traded and 1,506 kg of gold listed for trading delay.

An SGE spokesman blamed the poor market performance of the newly premiered 100-gram gold bars on the Christmas holiday season.

Industry experts still believe China's latest move will help diversify gold investment channels in the country and standardize the market for gold transactions.

In July last year the SGE proposed spot trading of gold by private investors in cooperation with the Industrial and Commercial Bank of China. However, the 1-kg, 160,000 yuan ($20,000) threshold turned off many private investors.

The volume of spot transactions by private investors in the first 10 months accounted for just 0.57 percent of total trading.

The Provisional Measures Regarding the Administration of Spot Trading of Gold by Private Investors published by the SGE stipulate that a private investor can participate in spot trading and even claim gold at designated warehouses in Shanghai, Beijing, and Shenzhen via any SGE financial members or other agents approved by the People's Bank of China.

Cheng Fumin, president of the China Gold Association, said sales of gold had risen since the beginning of the year.

Sales of gold bullion and gold bars account for more than a tenth of gross gold consumption in China.

"I think more investors will be attracted to spot trading and the number of transactions will increase as the SGE opens its doors wider," said Cheng.

China's gold market is currently restricted to spot trading, but the SGE has been developing derivatives such as futures, options, and investment funds.
Chris Powell
Wall St. bonuses: So much money, so few Ferraris
http://www.nytimes.com/2006/12/25/business/25bonus.html?hp&ex=1167109200&en=7fa2fa9c03cc90e3&ei=5094∂ner=homepageBy Jenny Anderson
The New York Times
Monday, December 25, 2006

It's a brisk Wednesday morning in the windy caverns of Wall Street and Sarah Clark's toes are cold.

Dressed in a purple flight attendant outfit, Ms. Clark, a 26-year-old model, is trying to entice recent bonus recipients at Goldman Sachs into using a charter plane service, handing out $1,000 discount coupons to people in front of the investment bank's Broad Street headquarters.

"Where am I going?" asks one man, heading toward the Goldman building. "It's your own private jet," says Ms. Clark with a smile. "You can go wherever you like."

For Wall Street's elite, the sky may well be the limit.

In recent weeks, immense riches have been rained upon the top bankers and traders. After a year of record profits, investment houses like Goldman Sachs, Lehman Brothers and Morgan Stanley are awarding bonuses as high as $60 million. And a select group of hedge fund managers and private equity executives may be taking home even more.

That is serious money. And the serious luxury goods markets are feeling the impact.

Miller Motorcars in Greenwich, Conn., is fielding more requests for the $250,000 Ferrari 599 GTB Fiorano than it can possibly fill. One real estate broker laments a dearth of listings for two clients trying to spend $20 million on Manhattan properties. Financiers already comfortably settled in multimillion-dollar apartments and town houses are buying $5 million apartments for their children. Vacation homes, usually bought and sold in the spring, are now hot this winter, including ones in private resorts like the Yellowstone Club in Montana near Yellowstone National Park.

"Last year, everybody bought Ducatis," said one investment banker, referring to the Italian motorcycle. "This year it's vacations. I'm on my way to St. Bart's," he said, en route to the airport. Like most bankers, he spoke on the condition that he not be identified, because he was not authorized to talk to a reporter by his company.

The 2006 bonus gold rush has re-energized some luxury markets. The Manhattan real estate market, for example, had softened; sales of apartments fell 17 percent in the third quarter this year compared with a year ago, according to the Corcoran Group.

Then came bonus day. Last week, Michele Kleier, president of Gumley Haft Kleier, received a call from a hedge fund manager in his late 30s. He had spent $6 million on an apartment two years ago and, with his bonus, wanted to upgrade. His new price range? "Not more than $20 million."

Ed Petrie, a broker at Sotheby's in East Hampton, N.Y., is now fielding two bids for $8 million to $10 million properties in exclusive Georgica Pond -- properties that have been on the market since the spring. "The fall was relatively slow and then suddenly, with news on bonuses, there has been quite a bit of activity," he said.

Many brokers noticed not just the bonus effect, but the bonus-anticipation effect. Buyers who sat on the sidelines in 2006, waiting for real estate prices to come down, saw news of outsized bonuses and started signing deals to pre-empt any price increase driven by new Wall Street payouts.

"Part of our recent increase in sales activity has been buyers not in financial services trying to beat the bonus rush," said James Lansill, senior managing director at the Corcoran Sunshine Marketing Group.

Once the bonus rush started, Mr. Lansill witnessed a trend he had never seen in his 14 years in the business: People who had signed contracts for apartments under construction 5 to 6 months ago were doubling the size of the properties they were purchasing.

In the last three weeks, the Corcoran Sunshine Marketing group sold the last four apartments in the Richard Meier apartments at 165 Charles St. in Greenwich Village. The last one to go: a two-bedroom, two-bathroom apartment with 2,350 square feet that sold for just under $7 million.

Patricia Warburg Cliff, senior vice president and director for European sales at the Corcoran Group, said that until recently 2006 had been characterized by calmer, more informed buyers. "Now there's a feeling, 'I need to sign because I don't want it snatched away,'" she said.

Adding to the spending spree is a rash of young hedge fund analysts, first big bonus checks in hand, scooping up the $2 million to $3 million starter apartments (most popular features: glass walls, marble bathrooms, and kitchens -- likely to go unused -- with top-flight appliances).

"We love hedge funds. They are our favorite people," Ms. Kleier said. "They don't feel like the money is real and they don't mind spending it -- they don't mind going up by $500,000 or $1 million increments."

Hedge fund analysts are not the only ones celebrating bonus season. Private equity firms like the Blackstone Group and Kohlberg Kravis & Roberts helped fuel a record deal-making year.

Private equity's deal-making has trickled down to Wall Street in two ways. For one, the banks served as advisers on the deals and financed them, raking in enormous fees. (Kohlberg Kravis is said to pay more than $700 million a year in fees to the Street.)

But bankers also see a pay effect: Top executives insist they must pay up because of the danger that their best dealmakers could leave for higher-paying private equity firms or other hedge funds considered more flexible and fun.

Those young, single hedge fund managers are bringing holiday cheer to car dealerships as well. This year, drama surrounds the very limited production of the Ferrari 599 GTB Fiorano, a car with 612 horsepower that can go from zero to 60 miles an hour in 3.6 seconds. "It is the most sought-after car ever made," said Richard Koppelman, president of Miller Motorcars. With a waiting list of 50, Mr. Koppelman expects to get only one.

Who will be the lucky customer? "It's very difficult," he said. "We try to take care of our best clients."

Private planes, or shares of them, are also on the rise, with demand for charter planes at one company up 40 percent to 50 percent among financial services executives. "There is a noticeable difference this year compared to the past, especially in the financial sector," said Jeffrey Menaged, founder and head of Chief Executive Air, the company that hired Ms. Clark for the day. A typical price for a charter flight is $30,000.

Sales of "jet cards," a sort of debit card for private flying, increase during bonus season, Mr. Menaged said, as executives lock in last year's gains with guaranteed comfort for the new year.

Exotic destinations are also being pitched to the Wall Street ultra-rich. Unlimited Speed started Victory Lane in November, a 3,000-acre development in Georgia for motor racing aficionados. Along with a 4.5-mile racetrack, the development also has a 1,600-acre nature preserve, equestrian facilities, a golf course, and a spa. It already has 27 reservations, a quarter of them coming from Wall Street, said Andrew Goggin, president of Unlimited Speed.

Not everyone on Wall Street is getting multimillion-dollar bonuses. The average managing director -- who stands at the top of Wall Street's hierarchical food chain but far from rock-star status -- will be getting $1 million to $3 million, which will likely be stashed in savings as memories of the 2001 bear market remain fresh.

"I'm putting it in the bank because I know next year I could be out of a job," said one managing director at a leading bank.

For hedge fund traders and managers, markets were rough in the spring and summer, and some did not make gains until stocks rallied this fall.

"It was a terrible year," said one young hedge fund professional. "I am going to the movies with my bonus. By myself."

At cocktail parties, comparisons to 1999 abound. That year marked the height of the technology boom and the eve of a painful crash. "It feels a little bit like the top," said another banker.

The morning Goldman Sachs announced record fourth-quarter and 2006 earnings, Lloyd C. Blankfein, chairman and chief executive, implored his employees -- many whom would directly benefit from the bountiful earnings -- to avoid excess.

"As stewards of the firm's reputation, I ask each of you to remember that our actions -- inside and outside of the office -- reflect on Goldman Sachs. Even a perception of arrogance hurts all of us," he said in a voice-mail sent to the entire firm.

Back handing out vouchers in front of Goldman, Ms. Clark wondered why there weren't more people coming to work during the early hours.

Then, at 7:30 a.m., a black Mercedes pulled up, depositing Mr. Blankfein in front of Ms. Clark. The night before he had been awarded a $53.4 million bonus.

She offered him a voucher. "How are you?" he said, smiling quickly but refusing the voucher.

"I guess he didn't want it," she lamented.
Goldilox
Ducatis
@ CP,

"Last year, everybody bought Ducatis," said one investment banker, referring to the Italian motorcycle."

Ducati has been busily bringing out motorcycles for the average rider and budget this year (some nice ones, too), so that probably renders them too "gauche" for Wall St's Nuoveau Riche.

I was hoping Santa put a shiny new Duc GT1000 under my tree, but it turned out to be new shocks for the Beemer, instead.
Goldilox
Jewellery complex eyes $10bn revenues
http://www.tradearabia.com/tanews/newsdetails_snIND_article116644_cnt.htmlsnip:

Istanbul's huge Jewellery City complex, housing workshops, offices and stores, aims to generate $10 billion in annual revenues after becoming fully operational by end-2007.

With an investment of $200 million, the complex has an annual production capacity of 750 tonnes of jewellery and aims to combine the manufacturing and marketing processes of small and medium jewellers at a single site.

Gold jewellery exports by Turkey, the world's second largest exporter after Italy, reached $874.5 million in the first 11 months of 2006, down on last year due to volatile world prices.

'During 2007 we believe we can see our complex becoming 100 per cent operational,' Ercan Ozgur, chairman of the complex called Kuyumcukent in Turkish, said.

Ozgur said 30 per cent of the 196,000 square metres of workshop area was already operational and another 20 per cent was set to start production in three to four months.

But according to data distributed during the news conference, only 319 of a total 2,191 sites -- including shops, offices and production areas -- were working.

Ozgur said Jewellery City targeted annual revenues of $10 billion at full capacity.

'Turkey aims to increase its jewellery exports to $5 billion in the coming years. With our complex working this target can be reached sooner,' he said, referring to an exporters' target.

Ozgur said the primary target was to move small and medium factories from the historic Grand Bazaar to the complex.

But he said the complex was not targetting so much the retailers, who are reluctant to move out of the