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.

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".

http://www.usagold.com/gold/special/angel.htmlThis offering is as "angelic" as it gets! Plus, a great gift idea!

R.

http://www.usagold-jewelry.com/pendants/gold.html

Anniversary - Birthday - Holiday - Any day!

 

Show your good sense and show how much you care.
Give the Gift that Keeps Giving Year after Year!

Always GOLD. Always.

1-800-869-5115; Marie at Ext. 106

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 ?

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.....?

@ 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?

pig�gies too~

I do like the Angles also

Dear Santa,

I WANT GOLD!

GOLD!!

....and MORE GOLD!!

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.

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.

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

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"?

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?

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.

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.

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.

Can you please elaborate in what way and how the Euro died ?

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.

http://www.usagold.com/amk/news-group.html

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.

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.

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!

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.

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.

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 ?

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."

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)---

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.

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.

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 ;-)

@ 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".

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.)

Many thanks to Bill Murphy for an important heads up.

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!}

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!

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"!

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."

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!

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.

Let there be FREEGOLD and all will cooperate on re-harmonization of the floating currency regime. TINA.

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

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".

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.

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.

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?"

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

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.

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.

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.

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)?

"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

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."

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!

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.

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.

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.

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.

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

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."

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.

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.

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.

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".

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.

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.

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.

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

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: Any of you watching the "GOV'T GOLD" Infomercial on ABC right now. Wow! The herd is being directed.

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

Was that a commercial or a show? I missed it. What was the main theme that was being sold? Thanks! PA

http://www.deesillustration.com/Pics1.htm"Ask not what your country can do for you, but what you can do..." JFK

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.

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

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!

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.

@ 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: 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.

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 . . .

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!

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.

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".

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.

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

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.

@ 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.

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.

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

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 ........

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."

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! ?

@ 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!

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.

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)---

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.

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.

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.

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.

@ TC,

Puplava already defines California millionaires as "homeowners", though many own naught but a lot of debt paper against that home.

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.

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!

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

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.

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.

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.

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."

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 ?

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.

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!

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.

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.

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.

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

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

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 )

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.

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.

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?

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

Holiday Buyers' Group

"Angels We Have Heard on High"


600 Uncirc. French Angel coins, specially priced!

1-800-869-5115

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

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.

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.

@ 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.

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.

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!

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

http://energybulletin.net/23259.html
Click on the link for one of the most interesting articles I have come upon, this year.

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.

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)---

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.

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.

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...

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.

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.

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

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!"

http://finance.yahoo.com/q/bc?s=USDCNY=X&t=2y&l=on&z=m&q=l&c=What is happening?

http://finance.yahoo.com/q/bc?s=USDCNY=X&t=1y&l=on&z=m&q=l&c=Yuan is steadily gaining value.

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.

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...

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!

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

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

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.

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)---

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.

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.

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.

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...

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."

http://energybulletin.net/23259.htmlSome great one-liners amid pretty serious implications.
...via jesse, tks.

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 !

http://www.elastoplast.com.au/products_silver_how.aspHere's the link again

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

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."

Please change all references concerning FDA to EPA. Sorry.

@ 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.

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.

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).

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.

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 ?

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.

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.

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.

@ 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."

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...

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.

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.

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.

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

http://www.usagold.com/gold/special/angel.html
Purchase online or by phone -- speak with Marie at Ext. 106

@ Sierra Madre,

Your Iran scenario is not unlike what the Chinese discovered in their attempted purchase of UnoCal.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteNice post-COMIX bump. Let's see if it holds.

@ 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.

@ 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.

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.

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."

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.

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....?

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)---^

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.

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)---

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.

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.

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.

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".

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.

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

***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. "

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."

I'll be there the 15th thru the 17th........just an observing PARTY............AMF

@ 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.

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!

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!

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.

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

:-)

@ 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.

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!

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.

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.

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

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.

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.

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.

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.

http://www.usagold.com/gold/special/angel.html
Purchase online or by phone -- speak with Marie at Ext. 106

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.

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.

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."

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)

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.

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."

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)---

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.

"Gold is magnificent at the museum but is no museum piece"


Druid: Thank you.

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.

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. . . .

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.

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.

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.

Well, they're just proposing it. Just another possibility
or hypothesis. Please don't shoot the messenger. :)

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."

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."

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: 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.

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."

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.

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

@ 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!

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."

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.

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

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.

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."

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.

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

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

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%.

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.

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.

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

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

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.

@ 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!

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

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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)---

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.

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."

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.

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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.