http://www.resourceinvestor.com/pebble.asp?relid=28416Seems to be a case of counting your chickens before they're hatched as per below! Or a case of "he said, she said".

"IMF Has Not Adopted Accounting Changes to Gold Loans

By Jon A. Nones
25 Jan 2007 at 04:06 PM EST


St. LOUIS (ResourceInvestor.com) -- Earlier this week Blanchard & Co., a New Orleans-based bullion and coin dealer, released a press statement saying the International Monetary Fund (IMF) has adopted a number of accounting changes to the lending of gold reserves by central banks, and will begin implementing those changes in the coming year. IMF told Resource Investor today otherwise.

In response to press queries about a January 22 press release from Blanchard, claiming the IMF made accounting changes for recording gold loans, IMF spokeswoman Conny Lotze sent the following statement to RI:

'At this time the IMF has not adopted any new accounting changes for the recording of gold loans. A review is taking place in the context of the update of the fifth edition of the IMF's Balance of Payments Manual and has involved experts from the Fund, other international agencies, and a number of member countries,' said Lotze.

The IMF's Balance of Payments Manual governs the accounting and reporting functions of central banks through a set of rules and regulations. The manual regulates how reporting should be handled across a large spectrum of issues, which includes gold swaps and loans.

Blanchard's statement was a follow-up to a paper by the company published on December 14, 2006, entitled "Gold Market Lending," which prompted a debate with Kitco's Jon Nadler. Within the paper, Blanchard's Director of Economic Research Neal Ryan alleged that unaccounted amounts of gold loaned into the market had a direct impact on the price.

He said the IMF had been reviewing all aspects of their Balance of Payments Manual so that proper updates to the Manual can be implemented in the near future. This week's statement by Blanchard said that the IMF had indeed made the decision to go ahead with changes to the way central banks account for gold loaned in the market.

Blanchard Chairman and CEO Donald W. Doyle, Jr. said the newly adopted accounting change means that central banks will no longer include the amount of gold they have loaned and sold into the market as part of their reserve total assets.

He added, 'this decision by the IMF will greatly redress that issue as these accounting changes are implemented.'

However, Lotze said there has not been any decision made and papers on this and other issues are "being addressed" and have been posted on the Fund's external website.

'We anticipate posting a draft version of the whole Manual for world-wide comment within the next two months,' said Lotze.

Ryan told RI today that the public stance by the IMF press officer is in direct contrast to what was posted by the Reserve Asset Committee (RESTEG) as a concluded issue for them from their October meeting in Frankfurt, Germany.

'I have been told directly by members of the Reserve Asset team that the only issues left are to decide how to implement the change and allow public comment.'

Within the meeting notes of the 'Nineteenth Meeting of the IMF Committee on Balance of Payments Statistics,' Ryan pointed to a list of concluded issues beginning on page 4, where on page 7, No. 27, it reads: 'In this treatment, unallocated gold accounts held with residents (such as bullion banks) are excluded from reserve assets.'

'As you can see in the paper, the issues on changes to gold lending as far as the IMF RESTEG Committee is concerned is a concluded issue,' he said.

But according to the IMF, consultations are still on-going and this is just a summary of outcomes. On page 19 of the document, the IMF states:

'There was a clear majority in favor of maintaining the current treatment of monetary gold. Further consultation with Committee members is needed on unallocated gold accounts held by monetary authorities (paragraph 27 of the paper). This issue will involve further consultation with Committee members.'

But Ryan said the committee has made its conclusions and is continuing to work on how to implement, not if to implement.

'This is where I think the disconnect exists with the press officer and the committee,' he said.

IMF has laid out many of the issues on gold loans and gold deposits prepared for the technical expert group on reserves in a paper, entitled "Treatment of Allocated/Unallocated Gold Held as Reserve Assets and Gold Swaps and Gold Deposits."

The latest full-scale review of the manual began in 2005 and is scheduled for full implementation in 2008."

http://news.bbc.co.uk/2/hi/americas/6319093.stmsnip:

Tens of thousands of people have marched through Mexico City in a protest against the rising price of tortillas.
The price of the flat corn bread, the main source of calories for many poor Mexicans, recently rose by over 400%.

President Felipe Calderon has said the government will clamp down on hoarding and speculation to ease the problem.

But some blame the rise on demand for corn to make environmentally-friendly biofuels in the United States.

Agreement ignored

The BBC's Duncan Kennedy in Mexico City says the protest was noisy, passionate and angry.

The recent tortilla price rises have been the worst in decades, sparking fears that some could face malnourishment.

For many of Mexico's poorest people the tortilla is a staple of their diet, with as much as a third of their wages being spent on the bread.

Mr Calderon has ordered his agriculture secretary to import corn to try to ease the problem.

And earlier this month he signed a pact with a number of business groups that they would cap the price of tortillas at 8.5 pesos (77 US cents) per kilogram, but many have chosen to ignore the agreement, which is not legally binding.

Under the 1994 North American Free Trade Agreement, Mexico used to get cheap corn imports from the US, but Mexico's Economy Minister Eduardo Sojo has said that with more US corn being diverted into ethanol production, supply is dwindling.

-Goldilox

Looks like corn is also a "finite resource". Whodathunkit?

Next we'll see rising whiskey prices. That won't make for happy campers!

http://www.forexrate.co.uk/news/index.php?itemid=1384Between the end of August and the end of November Russia, according to the I.M.F., increased its �Official� holdings of gold by 9.2 tonnes, which...

... averaged a cautious 1 tonne a week.


For them to reach the targets implied by government officials as high as President Putin wanted at 10% of reserves, they will have to increase the pace of these purchases dramatically. With oil exports roaring along with the higher oil price and Russian reserves burgeoning, a gold price rise cannot, at this stage, be expected to rise fast enough to make this figure a reality all by itself. Much heavier purchases need to be made.
------------------------------------------------------------------------------------------------------------------------
Thoughts anyone ?

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-02-01T163958Z_01_NOOTR_RTRJONC_0_India-285956-1.xml&archived=FalseANALYSIS - Paper gold may face long haul to success in India�|�Reuters | February 1, 2007

http://www.interfax.ru/e/B/finances/26.html?id_issue=11669588MOSCOW. Feb 1 (Interfax) - Russian President Vladimir Putin considers the setting up of a gas OPEC to be an interesting idea and promises to think about it.

"A gas OPEC is an interesting idea, we will think about it," Putin said at a press conference on Thursday.

He said that Russia is trying to coordinate its actions on fuel consumption markets with other production countries.

"We are in agreement with Iranian specialists, Iranian partners, with some other countries that produce and supply a lot of hydrocarbons to the world market - we are already trying to coordinate our actions on markets in third countries and plan to continue to do this in the future," he said.

Putin said that Russia is not planning "to set up some sort of cartel, but it would be correct to coordinate activities."

"The main task is the unconditional and reliable supply of fuel," he said.
------------------------------------------------------------------------------------------------------------------------
WOW, heavy stuff !!! A NLG-cartel with 'axis of evil'-partner Iran.

http://www.bloomberg.com/apps/news?pid=20601012&sid=a_FqcD4nctIs&refer=commodities World Gold Council Urges China to Cut Tax to Boost Gold Trading by Helen Yuan - Bloomberg - February 1

"Increased flexibility in the short run is absolutely necessary, but it is not sufficient," Paulson said, "My goal is to make significant progress toward a fully market-determined, floating Chinese currency."

My immediate interpretation of this is...

Our goal is to lure the Yuan into the kind of open environment where we can can affect its value to our advantage at will as we do the other currencies by chaining it to massive derivative plays and other manipulative practices. Our goal is to sink the Yuan as we have our own currency...for profit.

http://www.bloomberg.com/apps/news?pid=20601012&sid=a_FqcD4nctIs&refer=commodities"We see a huge demand potential given the Chinese people's large bank deposits", valued at about $2 trillion, Cheng said...

The London-based World Gold Council plans to launch gold exchange-traded funds, enabling investors to trade without taking physical delivery, in India, Italy, Germany, Belgium and the Netherlands, Chief Executive James Burton said Jan. 12.
+
The Council's strategy in China is to boost physical transactions among individuals, rather than introduce the securities, Cheng said.

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

Is the marketing difference (ETF vs. physical) because one doesn't dare risk promoting a scheme (like poking a hornet's nest) that could eventually leave over 1.3 billion people holding a dodgy paper bag?

R.

http://www.usagold.com/gold-price.htmlPlease enjoy a view of the two euro charts at the page bottom (see link).

With the euro-denominated price of gold now pressing nicely above 500, we're basically in new territory (except for the spike in May 2006).

Is it your intuition that the EUR500 pricetag will attract public notice or in any other way prove to be psychologically signficant to potential investors over there in Euroland?

R.

Good point. Even in the "People's" Republic, people will still be people.

http://www.fmnn.com/WorldNews.asp?nid=33092 Personal Savings Drop New Low - FMNN - Associated Press

Is someone manipulating the miner's " disbelief" ...too bad because the dollar tells the story ......

It apparently has begun its decsent or is that descent ...

and the hui will be playing catchup soon ......i would imagine

No Sir TC. Euroland's investing general public attention is not at all alarmed (attracted) by the recent �-goldprice rise. With the exception of the hard core of gold-loyalists (smile). These people continue to accumulate the precious.

The general public only moves when the goldprice behavior becomes spectacular and the media report about it on their frontpages.

But,...there is indeed some remarquable news : Banks, now sell the precious at spotprice and skip their 1% profit !

Maybe because WGC wants to introduce (promote) gold-paper products (ETF) in Euroland ...and banks are anticipating this ???

http://stockcharts.com/h-sc/ui?c=$usd,uu[w,a]daclyyay[pb50!b200][vc60][iup5,3,3!la12,26,9]Oil after getting bopped is also recovering some .....
Looks like OLe man winter has arrived in the NE

http://stockcharts.com/h-sc/ui?s=$USD&p=D&b=3&g=0&id=p61546981074sorry blip

http://www.cfr.org/publication/12346/Hi Belgian, Can you explain your thinking with regards to the ETF anticipation and giving up 1% profit? And, I am curious what your thoughts are with regards to the "Digital gold and a flawed global order" article posted on the CFR site and if you think it might be connected to what you notice?

http://www.ft.com/cms/s/eae38d36-b198-11db-b901-0000779e2340.htmlDerivatives bring drama to Davos By Gillian Tett
Published: February 1 2007 02:00 | Last updated: February 1 2007 02:00 | Excerpts: "...Nevertheless, the focus on structured products does mark something of a departure for the Davos group, given that these issues have generally been ignored in previous years. The public and private meetings re-vealed sharp disagreement about three key points.
The first is whether regulators needed to worry about the fact that the structured finance and derivatives world is often opaque, particularly given the dominant role of unregulated hedge funds...

Howard Davies, former head of the Financial Services Authority and now an academic, said: "We all know that the reality of the financial markets is that risk is being parcelled up and paced around. But international regulatory architecture is still organised as if the world had not changed. As a result, we have a regulatory architecture designed for a bygone age.""
Mikal- They're passing gas, passing the buck(shifting blame). But very little time is left to pass before TSHTF.

US January Planned Layoffs Rise 15 % From Dec

Announced layoffs rose 15 percent to 62,975 jobs in Jan. from 54,643 in Dec., according to Challenger, Gray & Christmas.

>>>>>>

IBM Headcount In India Tops 50,000

If the current growth rate continues, IBM will have more than 70,000 workers in India in 2007.

http://www.usagold.com/amk/newsgroup-form.htmlWhat does the yen carry trade have to do with gold? Why do we believe it is the "funds" that are driving this market?

To find out, we invite you to join us as a member of the USAGOLD NewsGroup. We sort through the avalanche of gold related news to find the stories we believe most pertinent to gold-owners at any given point in time. We then rate the articles on a five star basis, and apply our many years knowledge and experience to an interpretation. If you would like to stay on top the gold market, this will help you do it.

It's informative.
It cuts through.
It's gold owner friendly.
It's free.

http://www.msnbc.msn.com/id/16922582/I LOVE GOLD!

To bad more people are not willing to invest in gold. Maybe then they would be less tempted to use up their home equity as a back up to float their extravagant life styles. Looks like keeping up with the "Jones's" has America going full throttle.

Gold....the uncommon valentines gift...or is it?? :-)

GF

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

February 1 (MarketWatch) -- Gold futures closed Thursday at their highest level since August, extending their winning streak to three sessions as recent strength in oil prices and a slight dip in the value of the dollar helped lift prices past $660 during the session.

Indeed, "there appears to be enough thrust behind this move to take us to and beyond $700 over the next few weeks, months," said Peter Spina, chief investment strategist at GoldSeek.com.

"The market is readjusting itself based off strong fundamental factors and with rising energy prices and a weakening dollar, this just accelerates the process," he said.

April gold futures closed up $5.10 to $663 after a high of $667, the contract's strongest intraday level since Aug. 9.

"As expected, gold has broken above key resistance at $650 and now appears to be making a beeline toward $700," said Peter Grandich, editor of the Grandich Letter.

He predicted it could see that price level before the end of the first quarter.

At the same time, "there is no denying the underlying strength gold is seeing here," said Spina, pointing out that even when energy prices drop and the dollar strengthens, gold's been holding up.

"It is difficult to deny that gold is trading more independent of prior-market correlations," he said. "The metal is in demand and accumulation is driving it back to its 2006 peak."

That gold prices climbed past $650 "in the face of reported talks to sell some IMF gold holdings is yet another indicator of how strong gold really is," said Grandich.

On Wednesday, the International Monetary Fund proposed the sale of about 400 metric tons of gold to help fund its activities. Futures prices for gold had ended Wednesday's regular trading session nearly $8 higher.

"Having pushed on through the resistance we noted at or near the $650/ounce level, we have added to our outright long positions," said Dennis Gartman, editor of The Gartman Letter early Thursday.

"We remain long of gold also relative to crude oil, and despite the massive rally in U.S. equities yesterday, we remain long of gold relative to stocks."

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

http://business.guardian.co.uk/story/0,,2003100,00.htmlDerivatives: the risk factor is frightening
Nils Pratley - The Guardian - Thursday February 1, 2007
Now would be a bad moment for financial markets to have an accident, said the Financial Services Authority yesterday. The shock to the system would be "much greater now than two or three years ago". Regulators are paid to be cautious, so at one level this pronouncement is unsurprising, but "two or three years" is not long ago. Can things really have changed so much?
Well, yes, in spades. The biggest change is the growth of credit derivatives, the process by which securities such as corporate debt, mortgages and shares are sliced, diced, packaged and repackaged. Investment banks house too much creative computing power these days, and the face value of credit derivative contracts is reckoned to be about $30 trillion - yes, trillion. It's an enormous number and about eight times as much as in 2003. So something very big has changed very significantly.
Reading between the lines, the FSA seems to be admitting that it has inadequate insight into this world of "increasingly complex financial markets." Again, that is not a surprise because credit derivatives are the domain of the trading desks of investment banks and specialist hedge funds.
Nor is the FSA alone. Jean-Claude Trichet, president of the European Central Bank, said last week that "there is now such creativity of new and very sophisticated financial instruments ... that we don't know fully where the risks are located. We are trying to understand what is going on but it is a big, big challenge."
Trichet sounded like a man witnessing an accident but unable to do anything, which hasn't always been the attitude of central bankers towards derivatives. Many used to argue that these instruments do important work in spreading risk and reducing the cost of borrowing.
Now, though, there seems to be a change of tone. Timothy Geithner, the US Federal Reserve's man in New York, said last year that the derivatives revolution may make financial crises less common, but more severe when they do occur. You may not be reassured.

As John Law once said -- "How was I supposed to know this was going to be a problem."

@ Flaccus,

"Problem, who has a problem?

Pass the cake, please."

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070201:MTFH66481_2007-02-01_22-32-17_N01356944&type=comktNews&rpc=44From Reuters
Thursday, February 1, 2007

WASHINGTON -- Investigators for the U.S. Congress on Thursday pledged to issue a report by June 27 on the use of information technology in the credit derivatives market, responding to a request from lawmakers concerned about trade confirmation backlogs and economic stability.

Serious problems with information infrastructure could "trigger financial calamities with repercussions for the whole economy," Michigan Democratic Rep. John Dingell said in a statement.

Dingell, who is chairman of the House Energy and Commerce Committee, and a half-dozen other lawmakers requested the report from the Government Accountability Office.

The credit derivatives market includes contracts such as credit default swaps that are reached between institutions to manage credit risk.

The credit derivatives market grew 52 percent in the first six months of 2006 to $26 trillion, according to the International Swaps and Derivatives Association.

On Wednesday, Britain's Financial Services Authority (FSA) said the volume of outstanding trade confirmations in the equity derivatives markets has grown in the past year, resulting in a significant backlog.

The FSA urged firms to address the problem, while praising the credit derivatives market for largely resolving operational backlogs, which in the past two years drew regulator warnings.

The Federal Reserve Bank of New York said in late September that U.S. credit derivative dealers have doubled the number of trades processed electronically and sharply reduced backlogs.

The New York Fed has held meetings on the matter with major dealers, including Bank of America, Bear Stearns, Citigroup, Deutsche Bank, Goldman Sachs, Merrill Lynch, and others.

http://www.galmarley.com/Chart_pages/currency_charts.htmAs we patiently await someone (ANYONE!) to come along and buy a Bond so PoG can move on up, it might be worth guessing which Currencies ...or in which order, PoG will rally above their recent multi-year highs.

I'll go first: - Japan (that ones easy), Canada (um! maybe tonight) ...now it gets a bit trickier, Swissie, Euro, Dollar, Aussie and lastly Pound.

All done well and truly by next Fri!

I do remember that at a given period, Belgium introduced (briefly) 1% VAT on bullion and stopped it very rapidly because Luxemburg immediately got all the gold-trade (taxfree). Belgian Eurolanders do buy their goldmetal directly from their banks and never bothered about the 1% bankprofit on top of the spotprice. Simply because the main gold-dealer for Belgium (who provides the goldmetal to all banks) is located in Brussels.

Point is : Who is giving those directives about gold VAT tax and 1% bankprofit margin...and WHY the sudden changes ?

Belgian (conservative) savers still want the goldmetal when they finally decide to protect their portfolios loaded with digits/papers. Our gold-governors most probably want it to keep it this way, for obvious reasons and want to avoid that these conservative savers are "lured" into (WGC) digital gold...without excluding the possibility to do so, if desired.

Belgian banks stopped selling silver (21% VAT) long ago.
Who ordered them to stop it and why !?

WHY do Belgian banks bother to deliver (keep on delivering) gold-bullion WITHOUT even that tiny 1% profit margin ???

My interpretation of this descision is the wide "opening" of the euro goldmetal gate...for the many good reasons we discovered here at CPM since 1999.

Yes, 1% is a miniscule step and therefore so principally important...as a (surprising) change in (freegold) policy.
Free competition with soon to be introduced digital gold. As if the fysical gold-trade (wealth saving) should not be abandoned whilst goldmetal and paper-gold pricing are not yet explicitely separated (severed link).

I conclude seeing this miniscule step as a tremendous positive indication in the process towards euro-freegold.

http://business.timesonline.co.uk/article/0,,9063-2580931,00.html Debt crisis as 100,000 declared insolvent - Industry sectors - Times Online - Steve Hawkes | 02-02-07

http://www.weather.com/Idon't remember a winter like this ; I was commenting the other day about our neighborhood ; most of this usuallly is confined to Gunnison where I have wintered briefly before; also I sated to a client that this weather is reserved mostly for the area of the twin cities area in the plains......


a map is included the front is heading toward the east coast and the winter is liable to be a humdinger as some weather analyst stated yesterday

Oil prices moving higher on demand ........reason enough to stagger the sypmathetic move coming the metals with a slap down today

It's 4 degrees in Carbondale as we speak .......

hope it warms up soon ....

No matter the weather be ready in season and out of season
with TRUTH and GOLD


If this happens again next year , i would say that we might be in trouble

The last couple of days looked really promising. Gold went over $650 and actually STAYED there more than a day. But now today they've managed to stomp it back down to where they think it belongs. Gotta love the central banks! :-(

@ Titan,

I've gotten so used to the predictable Friday gold attacks that I have a name for them. No doubt the B(L)S fantasy employment numbers will get the credit for igniting the US $ on its "E-ticket ride".

If PoG creeps back to near $650 by COB today, next week might just floor some folks. The short sellers can mainpulate PoG pretty well, but they usually do not stand in front of a moving train.

http://blogs.wsj.com/washwire/2007/02/02/top-treasury-official-resigns/Top Treasury Official Resigns | Washington Wire | WSJ.com
Elizabeth Price | February 2, 2007
IMF "accomplishments", talk of "turf battles" and no word yet on the successor.

That is to say, it's like stepping back in time two days -- to enjoy Wednesday's prices again.

(Two days, hmmmmm.... I wonder if this means I didn't really need to shave today...)

R.

test

http://www.nytimes.com/2007/02/01/world/europe/01climate.html?ei=5090&en=718095d16a7c2e7f&ex=1327986000∂ner=rssuserland&emc=rss&pagewanted=printOk that's overstating it a little bit, just rumblings so far.

Can't seem to post a snip for some reason...
Here is the headline.

France Tells U.S. to Sign Climate Pacts or Face Tax.

Comment:
As the dollar teeters under pressure from its trade and budget deficits, it's economy stripped productive capacity. France paves the way for a stronger Euro. By applying tariffs under the guise of a "carbon tax" the Euro gains latitude to strengthen further while protecting its industrial base. Putting further pressure on holders of US debt. Some in the Middle East have already been grumbling that while most of their trade is conducted with Europe, their oil is sold for dollars. Add the European carbon tax to that and it makes matters worse, not to mention what it does to the US airplane er... export sector.

On the tube this morning I half-heard a talking head mention a gold hedge fund that is in trouble and putting downward pressure on PoG.

Has anyone else heard this?

Have a golden Friday!

- Survivor

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=will be seen as an annoying gnat bite in an otherwise totally enjoyable stroll in the park once the cross-over trend resumes next week.

IMO of course!

I am wondering specifically about your statement, which seems more of a conclusion than anything else, "Free competition with soon to be introduced digital gold." It seems that the dropping of the 1% VAT would translate the "Free" part literally, so as to make physical gold purchases even with anything that is based on spot in your neck-of-the-woods. The real question that I have stems from the idea that there is some �competition� pending between physical gold and a coming digital gold.

Thus, I would like to understand this �digital gold� idea just a little better so as to see how it might actually compete and if it can actually compete (and the details therein).

It's my understanding that digital gold is a financial widget exactly like what is stated at GoldMoney's website "GoldMoney is like online banking, but your account is denominated in goldgrams and mils, not dollars and cents. Each GoldMoney goldgram� you own is safely stored for you in allocated storage in a specialised bullion vault near London, England, and is insured through a policy underwritten at Lloyd's of London. When you buy goldgrams, you own pure gold in a secure vault." Effectively, what they are trying to sell is a 100% gold backed currency system. Rather than issuing receipts (paper currency), they issue a digital balance and rely on a plastic card (or computer access) as a means for exchange. The other thing to notice here is that when you convert into this particular type of currency, the bank (in this case GoldMoney) claims to have 100% backing.

But we all know that not all bankers work this way. Bankers always try to go fractional with their reserves in order to maximize profit by gambling that only a fraction of the reserves will be withdrawn at any one time. With this in mind, it would lead me to believe that if there were a move (in the dollar controlled world) towards digital gold, there would be a strong move towards not allowing access to the reserve in order for the bankers to maximize their profits. We might expect the system to be backed by all that yellow hiding out in Fort Knox or other locations that are not regularly audited and that it, too, would be insured by the most credible of sources. The question is, will this type of system work towards honest trade or away from honest trade? I lean towards �away from� and towards confiscation to kick start the system.

The actions of the banks in Brussels or Luxembourg committing to the honest flow of physical seems to take a completely different stand towards the function of gold in the economy. One might read their stand as � if gold is used as a reserve, there must be a clear understanding of its physical demand. In other words, gold must trade in the economy and be present in the economy. The key difference here is that it must remain in the economy.

Does anyone else see this? Specifically, a move towards a digital gold currency system may be a move further away from open gold trade in the economy and one where rules can be formed, in the name of the system, to provide more limits to physical trading.

Anyone interested in sharing their options about �digital gold� will find me most willing to read.

http://www.marketwatch.com/news/story/red-kite-extend-redemption-notice/story.aspx?guid=%7B24F9FEE5-9AD5-49E8-9FC6-1D14852C7D19%7DSnip: Red Kite to extend redemption notice period
High-flying, $1 bln metals trading hedge fund lost as much as 15% in January (end snip)

http://money.cnn.com/2007/02/02/markets/gold.reut/index.htm?postversion=2007020211Gold tumbles on Iran news
U.S. says it has no plans to go to war with Iran, technical selling send futures lower.
February 2 2007: 11:48 AM EST

NEW YORK (Reuters) -- Gold futures fell nearly 2 percent in New York Friday, a day after they hit a 5-1/2-month high, hurt by a jump in the dollar and news that the United States had no plans to go to war with Iran.

Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange sank $10.60, or 1.6 percent, at $652.40 an ounce, trading between $655.30 and $665.30 an ounce.
Gold futures hit a low of $650 after U.S. Defense Secretary Robert Gates told reporters that "we are not planning a war with Iran."
Gold prices usually rise with geopolitical tensions because of the precious metal's safe-haven appeal.

'Terror-free' oil makes U.S. debut
Leonard Kaplan, president of Prospector Asset Management, said that a technical sell-off, primarily by funds, was triggered once the April contract fell below $660 an ounce.
One futures commission merchant attributed gold's strength Thursday to a technical breakout and added that it was important to climb above the $660 an ounce level.
"But this kind of reversal that we're looking at right now certainly appears like it may have been reversed," he said.
He added that the reverse in the dollar's strength was one of the reasons why gold and silver fell early Friday. The dollar rose in a technical rebound. The euro fell against the dollar, trading below the psychologically important $1.3000 level.

The U.S. Commerce Department said that the economy added a weaker-than-expected 111,000 jobs in January, and the unemployment rate rose to 4.6 percent for the month, the highest since a matching rate in September of last year.
George Gero, vice president at RBC Capital Markets Global Futures, described the job data as "anti-inflationary." Gero also said that Friday's selling was related to profit taking before the weekend.

Thursday, gold futures hit their loftiest level since August, and they have also finished higher for the last three consecutive sessions before Friday's decline.

http://seattletimes.nwsource.com/html/nationworld/2003552323_daylight02.html?syndication=rssTime change: Y2K all over again?
By Charles Babington
The Washington Post - Friday, February 2, 2007
WASHINGTON � It seemed so simple and familiar: Spring forward, fall back. For 20 years, that's what Americans � and their technology � have done with their clocks on the first Sunday in April and the last Sunday in October.
No longer. When few people were paying attention in August 2005, Congress lengthened daylight-saving time by four weeks in the name of energy efficiency. The change starts this year � on March 11 � and it has angered airlines, delighted candy makers, and sent thousands of technicians scrambling to make sure countless automated systems switch their clocks at the right moment.

Unless changed by one method or another, many systems will remain programmed to read the calendar and start daylight-saving time on its old Sunday start date in April, not its new one in March.
It's one thing to arrive an hour late for church on the first day of daylight saving. It's another for a security system to log the wrong time of crucial events, for pilots to misunderstand their takeoff times or international communications components to stop synchronizing. But such scenarios are possible without the fix to vast numbers of the nation's technical systems.

As IBM notes on its Web site: "Any time-sensitive functions could be impacted by this change. ... It is important for users to assess their environments and develop appropriate plans for applying the necessary changes."

The challenge carries faint echoes of the Y2K scare, when governments and corporations feared computer systems would go berserk the instant 1999 flipped to 2000. But it has received nothing near the same level of attention. Indeed, large swaths of America seem oblivious to the approaching change, according to analysts and technicians who track Web sites and swap information with colleagues nationwide.

"After building bunkers in the desert for Y2K, we're not even talking about this, and it's happening in less than two months," said Matthew Kozak, an information-technology specialist at Rutgers University.
Even in the banking industry, where ATMs time-stamp every customer transaction, awareness of the March 11 change is limited.

"I haven't heard about it," said Barry Koling, spokesman for Atlanta-based SunTrust Banks. "It seems to me, we managed to get through Y2K. If we can accomplish the change of the millennium, we can handle a change in daylight-saving time."

Warning from Microsoft

For many widely used devices, automatic updates should prove easy. Cellphones should flash the correct date and time because they receive such information directly from service providers' networks. Similarly, the Internet will automatically update clocks on many personal computers that use relatively up-to-date software.

But Microsoft cautions that some older products � including Windows XP SP1 and Windows NT4 � will require manual updates. The company's Web site provides detailed instructions on how to update various products, although it is pushing against the deadline in some cases. Updates and tools "are being developed and tested," the Web site says, and some will "be released through early March 2007."

As a fallback, Microsoft urges customers to double-check meetings scheduled during the four weeks being added to daylight-saving time this year.

Similarly, network equipment maker Cisco Systems "has undertaken a companywide initiative to supply documentation that describes how to update each product," the firm said in a recent online notice. "Customers should contact any vendor that uses time-sensitive messaging or other time-stamped communications in order to determine the impact."

The congressional debate over expanding daylight-saving time barely caused a ripple in spring and summer 2005. It was in a wide-ranging energy bill better known for granting tax breaks to oil and gas companies.
Advocates said the nation could save about 100,000 barrels of oil a day by extending daylight-saving time, pushing more human activity into sunlight hours and reducing the use of light bulbs. So lawmakers agreed to start daylight-saving time three weeks earlier and end it a week later, the first Sunday in November.

Some airlines fought the change, saying it would cost millions of dollars to change domestic schedules to match landing and takeoff slots at international airports. But President Bush signed the measure in August 2005, and the matter seemed to hibernate until corporate and government officials began realizing what the March 11 onset might entail.

Changes, resistance

If the change is prompting confusion and consternation, it's in keeping with daylight-saving time's history. First proposed by Benjamin Franklin, it was briefly adopted by Congress during World War I. In 1966, Congress set daylight-saving time to begin in April and end in October but temporarily extended the period during the mid-1970s energy crisis.

In 1986, Congress set daylight-saving to start at 2 a.m. on the first Sunday in April and to end the last Sunday in October.
After resisting for years, Indiana adopted daylight-saving time last year. But Hawaii does not recognize it, nor does Arizona, except on its large Navajo reservation.

Candy manufacturers lobbied for years to stretch daylight-saving time to encompass Halloween. Not only will children in some time zones have more daylight hours to consume treats, they contend, but they will be safer zipping across streets in their costumes.
And if Nov. 1 seems unusually dark and cold when the first school bell rings, perhaps they can warm themselves with thoughts of unused barrels of oil.

http://www.azcentral.com/business/articles/0202PriceyDessert02-ON.htmlTalk about rich! Gold-dusted brownie costs $1,000
Associated Press | Feb. 2, 2007 08:11 AM
ATLANTIC CITY, N.J. - For $1,000 in Monopoly, you can buy Boardwalk and Park Place and still have $250 left over. In the real Atlantic City, here's what $1,000 will get you these days: dessert. And that's not even counting the tip.
Hyper-expensive desserts are the latest way increasingly upscale Atlantic City has found to separate casino winners from their winnings.

Calling the four-figure offering at Brulee: The Dessert Experience, just a brownie is a bit of an understatement. After all, you could get 371 boxes of Betty Crocker Supreme Ultimate Fudge Brownie mix for a grand. The brownie at dessert-only restaurant in The Quarter at Tropicana Casino and Resort is made with hazelnuts imported from Italy, topped with gold dust, served with a vintage port wine in a $750 Baccarat crystal that the dessert-eater gets to keep as a souvenir. Like the other offerings at the restaurant, it's served with two other courses of dessert.

"You have this beautiful atomizer filled with the finest port known to man, pastry chef Jemal Edwards told The Press of Atlantic City. You take a bite of the brownie, and as the flavors are coating your palate, your partner squirts the port onto your tongue. The acidity and sweetness from the port are hitting your mouth at the same time."

Who would make such a gamble on dessert?
Big casino winners, of course, Edwards said. The offering has not been a huge seller. In a year, Brulee has sold just three.

But that's not discouraging Red Square, a Russian-themed restaurant also in The Quarter, from offering another dessert at the same price, starting on Valentine's Day. It's a chocolate pound cake with a raspberry chambord "bellini" and a plate of black tapioca pearls made to look like caviar, along with real caviar, shaved chocolate, fresh fruits, chopped candied nuts and two shots of super-pricey vodka served in Russian Faberge eggs, which the customer keeps.

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

February 2 (DowJones) -- Long liquidation after a big run-up the prior two days sent gold futures and other precious metals sharply lower on Friday, traders and analysts said. Funds were among the noted sellers.

The COMEX April gold contract fell $11.50 to $651.50.

"To me, this is just a profit-taking move," said Frank Lesh, broker and futures analyst with Future Path Trading.

"We have had a really great run in the gold. It's up $50 almost in a month."

Comex April gold previously had run up from a close of $650.20 Tuesday to a 5 1/2-month high Thursday $667.20, a $17 gain, before correcting lower. The metal had triggered chart buying on a breakout Thursday around the $661 area, and a pullback back below this on Friday probably triggered some chart selling, one trader said.

However, at the $648 low, the contract held chart support around a series of daily lows from Friday through Tuesday between $646.60 and $646.90.

Much of the selling was from funds, said Lesh and others. "You can pretty much count on them all the time when you get a big move like this," said Lesh. "They're the big traders now."

Despite gold's pullback, the upward trend appears to remain in tact on the charts, Lesh said. "It's still a bull market. It hasn't really changed the outlook for the gold at this point," he said.

"You've got to have some back-and-forth action. It can't just go straight up here. I think people will come in next week, see where we get to and want to buy again."

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

First of all, I am curious to know how shall the international trade balances between major power blocks be settled: By US Dollar, by digital gold or by physical gold? Specifically, it would be interesting to know the US vs. Russia and US vs. China trade balance settling mechanisms. If they are settled in physical gold, then it is a completely different world; it would mean that US has withdrawn the claim to issue the world's reserve currency. In other words, US would no longer be issuing imperial tax to China & Russia. This will also ensure that physical gold shall be fairly priced.

Secondly, what shall be the trade balance settling mechanisms *within* power blocks? US may settle the Russian trade with physical gold, but how shall the Australian trade be settled: by physical gold or by digital gold? In other words, shall US issue imperial tax to Australia? Stated differently, US may not be able to tax Russia but may tax Australia. Inversely, Russia may not be able tax USA but may tax Belarus.

Finally, at the individual level, gold banking shall always degenerate into fractional reserve banking; that is my firm conviction. However, the insistence on removing silver from the monetary system, actually encourages individual usage of digital gold. Daily transactions would demand making payments in milligrams of gold; therefore in the absence of monetary silver, usage of digital gold is the only alternative to paper money. After living through a hyper-inflation, one may be tempted into a two pillared system, long term savings in physical while current account in digital. This system may survive for two generations; but in the third generation a bank run is guarantied. The third generation would in fact forget to make savings in physical gold; wouldn't they?!

In the financial news this week, we see that savings are below 1933 levels. This seems to be another misleading statistic.

In 1933 average folks did not have money in equities. Savings were in the bank or in the mattress. Today the tax deferred 401 carrot is used to lure savings away from cash and in into equities. Since income placed in a 401 becomes shares rather than 'money', I don't think it is counted as savings.

Because shares in a 401 aren't accessible as cash, folks in need of cash borrow it however they can (home equity refis to payday loans). The only cash seen by many is a series of digits moving along in front of them with nary a digit to hold.

So, savings are negative, and cash is available to most only by borrowing. This looks to me like another factor that will support the effort to lead us into a cashless future.

Seems a bit ironic that those few who have put away some real (gold) savings are also counted among those without "savings" :)

- Survivor

Thanks for thinking about this with me (smile). I too have similar questions, but form the question from what might be a little different perspective. Upon reviewing your first paragraph a couple times, it seems that it is assumed that the digital currency might be developed on country boundaries � say, for the US. What if it's not? GoldMoney is used internationally. What if they copy that functionality? Let's say, some big collection of banks come together and form a New World Reserve currency based on gold that they have on reserve in their unaudited vaults. They might call it a NeWR and issue debit cards for function of their digits. At this point, a collection of banks has created a currency that they offer to the world to compete against all other currencies and they sell it as the globalization currency � the currency that is good in any country because it's backed by a claim to gold. With a NeWR, you wouldn't need take it to your central bank to exchange it for local currency because it is an acceptable local currency. Because it's not exchanged for local currency, the central bank doesn't build a reserve in this currency. I'm just thinking out loud, but wonder if such a system could be setup � or, better yet � endorsed (GoldMoney and many others have already proven the concept).

Power blocks and settling. Why would you settle if you already have the international reserve currency? If everyone takes the currency, why settle?

I also agree that what might start out as 100% backed always seems to degrade into fractional reserve banking. I would expect that whatever bank started this type of process would turn it fractional over time in order to increase bankers profits AND because banks make loans. As we all know, when you loan currency into existence, the reserve is replace with a debt service promise.

Thus, would someone be able to get a loan against a NeWR? Will countries be able to go into debt to acquire NeWRs? Or, will countries continue to use their local currency? Or, might a country offer up physical gold for NeWRs?

Seeing that the game of banker control has gone on so long, I'm starting to see that they might be willing to support something like this which is not a national currency, but a global one. Also, leveraging typical banker tricks, they might be able to make it look like it's really backed by gold � knowing that only a small fraction of the currency is ever really redeemed for gold while the rest remains in circulation to function for trade.

If something like this is in the works, how might it affect physical gold holders? How might it affect miners? How might it affect the derivative markets? More importantly, how might it affect me?

Also, would a NeWR provide an environment that would be favorable, unfavorable or neutral for physical gold?

"In the financial news this week, we see that savings are below 1933 levels. This seems to be another misleading statistic."

I believe you are right. It is rather misleading to say that Americans have no savings or very little if you exclude all retirement accounts, social security, home equity, etc.

I remember the old passbook savings account book from my youth but I'd rather build savings almost anywhere than in a simple savings account. Even with the current softening in the housing market, money invested in real estate (home ownership) would have been much better place to hold savings than in a bank savings account. I hold some savings in the form of silver coins. These too have done quite well compared to bank savings, even with years of compound interest.
happy weekend...!

@ R Powell,

Let's examine that one!

My last statement from SSI said I had contributed about $87,000 over my 30 year career. Had globalism not halted my earnings at the height of my "earning curve", I would have contributed another $5500 or so over the past 3 and next 4 years until I reach 59.5 years. That would have put my contribution level at about $130K.

At 59.5 years, I am eligible to collect about $1100/mo, and at 62.5, I can collect about $1300/mo.

If I collect for about 9 years, I get my principle back intact, with no interest. After 18 years, I double my money, and my magic of compound interest calculator says that over 18 years, that amounts to about 3% per annum.

Here's the kicker. The majority of my "contributions" were made in 1980 thru 2000 dollars, worth a lot more than 2007 dollars.

What's worse, is that the COLA increases are moving with the bastardized CPI, and Congress will probably raise the eligibility requirements right before I reach them, as I am in the first four years of the Baby Boom. Double screwed.

On top of that, SSI money is completely taxable, so even if inflation adds anything substantial to my "benefit amount", the IRS will just take a bigger chunk back. With the top tax rate starting at $62K, even fixed income retirees will be considered "rich" according to the Tax code at the current inflation rate.

Savings? HA HA HA!

http://www.cftc.gov/dea/options/deacmxsof.htmTHe commercials for the week as of last report

in SIlver were net short 4060 contracts

in Copper were net short 78 contracts

and in Gold were net short 16800 contracts

I'd like to see a graphic of this .....

Maybe we get another buying opportunity next week after
the blackboxes and the dopes finish

this looks like a two day deal to me .....

However after the cold hits the trading pits ......the plunge may be short lived .....because all sorts of energy products will be surging in price

The dollar is probably getting a lift out of this nonsense

http://www.marketwatch.com/News/Story/Story.aspx?guid={7090F484-EE2E-49AB-B08F-94102F7E13AB}&siteid=mktw&dist=bnbWhy Commodities Are So Contrary - MarketWatch - Myra Saefong's Commodities Corner - Myra Saefong - Feb 2 07
"There's logic behind recent moves in orange juice, natural gas"

I suspect that Trichet and others comments about derivitives are, well, spin, and disinformation.
I suspect that democrat and republican political fighting is much more orchestrated than any evidence would suggest.
I suspect that beating swords into plowshares has no backing in international power, financial, political circles because we are a long way from figureing out how to have some other financial system.
I suspect that the lord has his hands full if he is trying to manipulate us towards a goal.
I suspect that the forum will be heathier with some parameters.

http://www.financialsense.com/Market/wrapup.htmsnips:

Although I'm pretty darn guilty of this personally, I can't turn around these days without hearing the words, "it's a liquidity driven market." Trust me, this is not about to go off into yet another discussion of the macro credit cycle. Collectively, we know global central bankers are "sponsoring" excess liquidity. We know Wall Street is capable of the same and is fully in gear at this point. We know the derivatives markets underpin excessive risk taking on the part of investors. We know private equity is the new fountain of youth for the institutional investment community. And we know leveraged hedge funds are not about to change their collective ways any time soon.

But what we don't know is how households/consumers will react ahead as, very much unlike the financial markets, they are not swimming in liquidity. Not by a long shot. At least not relative to the context of history. Given my fixation on the residential real estate cycle being an asset class capable of behavior modification when it comes to the US consumer, it highlights the need to fully recognize that US household excess liquidity availability has largely been driven by the monetization of asset inflation in both equities late last decade and residential real estate in the current, to say nothing of additional leverage assumption. In literally point blank terms, the following chart documents just how important stock and real estate asset inflation has been to growth in household net worth by the decade over the last half century-plus. As is clear, real estate and equities have never been more meaningful to aggregate household net worth expansion than is the case in the current decade. Hence, incredibly meaningful to consumer behavior. . .

Boom, Boom, Out Go The Lights?

So why is all of this discussion about household liquidity important? What does it mean to our investing activities ahead and the broad economy in general? Although this is somewhat of a generic comment, I believe the significance of these trends find their meaning in demographics. In very simple terms, we know that the baby boom generation is moving full speed ahead into retirement years. Point blank, assuming the boomers in aggregate actually do retire, their need for real liquidity will be meaningful. Very meaningful. Remember, I'm referring to a baby boom generation who has "learned" to become relatively dependent on asset inflation for a good many years now to generate household "liquidity;" asset inflation that has truly acted to underpin consumption.

Unless we can bank on asset inflation continuing, implying that asset inflation will "fund" boomer retirements as it has clearly funded their lifestyles for at least a good decade now, just where will retirement funds/liquidity come from? This is the issue, and it's clearly of longer-term importance as opposed to being something influencing the open of trading tomorrow morning. Can the Fed fund boomer retirements by simply printing money and inciting ever-greater household asset inflation?

Can the boomers "borrow" their retirement lifestyles as they have done up to this point by taking on ever greater household leverage?

-Goldilox

Some fairly credible analysis of the precarious position of the US consumer and homeowner.

http://www.financialsense.com/editorials/cooke/2007/0202.htmlsnips:

Corn is the most widely produced feed grain in the United States, accounting for more than 90 percent of total feed grain production. Around 80 million acres of land are planted to corn, with the majority of the crop grown in the Heartland region. Although most of the crop is used to feed livestock, corn is also processed into food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, and fuel ethanol. The United States is a major player in the world corn market. Approximately 20 percent of its corn crop is currently exported to other countries.

The United States Department of Agriculture (USDA) has announced American farmers are expected to get 55 percent more for a bushel of corn in the 2006/2007 growing season than they received in the 2005/2006 growing season. Average annual prices are expected to increase from $2.00 per bushel to about $3.10 per bushel.

Thanks to Federal mandates and subsidies, corn used for the production of corn ethanol is expected to increase from ~ 700 M Bushels in 2000/2001, to 3.2 B bushels in 2007/2008 � an increase of 357 percent. On December 11, 2006, the USDA estimated 2006-2007 U.S. ending stocks would be 935 million bushels, down from 1.97 billion bushels in 2005-2006. That decreases the ending stocks by more than 50 percent and puts the ending stocks to use ratio at 8%, - the lowest in 11 years. It should be obvious to all, we are going to need a lot more acreage and big yield improvements if corn production is going to keep up to demand. Prices could exceed $4.50 per Bu by the end of 2008. That's a price increase of 125% over 2005/2006 season prices. . .

Cleaner Air

When most cars had a carburetor, adding corn ethanol to gasoline tricked the fuel system into delivering a leaner mixture to the engine. Since proponents tended to ignore the loss of fuel economy, it was assumed that all vehicles running on a 2 to 5 % mix would cause less air pollution. But that was 20 years ago. Today's fuel injected engines self-adjust to the fuel mixture regardless of fuel composition. Sensors tell the fuel system computer if the mix needs to be rich (when the engine is warming up), or can be lean (for increased fuel efficiency and lower emissions). Corn ethanol does little, if anything, to reduce the tailpipe emissions of late model cars.[v]

The environmental benefits of E85 are both uncertain and confusing. Test results vary depending on water contamination, engine temperature, test vehicle fuel system design, ignition system performance, and the ideological convictions of the tester. It is likely E85, when compared with standard gasoline, will reduce tailpipe emissions from oxides of nitrogen, 1,3-butadiene, and benzene. Methane and total organic gas emissions are greater. Carbon monoxide ad CO2 results vary from reasonably good to really terrible. The real eye opener is a large increase in formaldehyde (isn't that the stuff they use to embalm dead people?), and a huge increase in acetaldehyde emissions. A suspected neurotoxin, exposure to acetaldehyde vapor will irritate the victims eyes, skin and respiratory tract. The State of California has determined that acetaldehyde is a carcinogen.

And we should consider this concept. Do we release far more pollution into the environment during the production and processing of corn into corn ethanol than we save in act of consuming corn ethanol as a motor fuel? Probably. Corn is monoculture cultivation on a massive scale, requiring copious quantities of oil and natural gas for herbicides, pesticides, and fertilizers. These � along with tons of eroded soils � are deposited as a polluted waste in our rivers and oceans. If the agribusiness industry attempts to increase current levels of food production by deforestation and the use of marginal land, the net result is an acceleration of greenhouse gases and a decrease in biodiversity. Corn derived animal feeds are a potent source of methane, a greenhouse gas.

In my trusty Honda Accord, straight gasoline gave me roughly 31 MPG. When California added a low percentage of corn ethanol to the mix, my mileage dropped to 28 MPG. I had to use 9.7% more fuel to go the same distance. I just completed a like comparison in my Honda Pilot. My mileage dropped from an average of 22.5 MPG, to 20.4 MPG, a reduction of 9.3%. If the improvement in air quality is marginal (at best!), then doesn't the energy loss of corn ethanol actually increase the release of CO2? Perhaps it is time to challenge our obsolete assumptions. This is 2007. Does corn ethanol in the mix continue to make any sense?

That, of course, is a rhetorical question. If we evaluate corn ethanol as a fuel system, we must add the hydrocarbon and poisons produced during planting, growing, harvesting, conversion, transportation, blending, distribution, and consumption to the additional hydrocarbons released by corn ethanol waste, and the hydrocarbon penalty from energy inefficiency.

-Goldilox

His analysis on corn costs lean toward some very credible questions, but he asks more questions than he answers verifiably - not always a bad thing.

At the end of the article, he goes off into a rant about "greenhouse gases", picking up the popular banter of a subject that the media and "textbook science" assume to be "fact", but is actually a Carl Sagan theory that was put into serious doubt by NASA's own probes to Venus 25 years ago. Not one of these "greenhouse gas" evangelists ever notices the other planets in the Solar System are ALL experiencing global warming, and then asks if the cause really is greenhouse gasses from hydrocarbon reduction.

Are we the victims of "misdirection" once again?

There is no doubt that energy is politicized even more (if that's possible) than gold.

Liquidity seems to be working quite well for the present. There are so many unknowns in the economic equation. Every day, I am amaised that the "baseless" economy keeps doing as well as it does. All reason is defied again and again. It will be a sad day when there are no more bunnies to be extracted from the Top Hat.

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

Although the Washington Post headlines that "Humans Faulted for Global Warming" we have to note with climate change being noticed on other planets, there's probably also something else going on that MSS (mainstream science) hasn't fully explained to our satisfaction.

-Goldilox

Nor is the MSM (mainstream media) likely to pick up the difference between science "theory" and "dogma", any more than they can with religion and its centuries of hiding evidence in the Vatican vaults and robbing archaeological evidence for storage in "private collections".Too many powerful political interests to fight, and stilll keep your media "licence".

Anyone who suggests that the Kings, Banksters and Religious War Promoters are deliberately manipulating and/or suppressing data to line their pockets and maintain their "God-ordained" privilege is immediately branded a "radical kook!"

I often wonder just how much "misdirection" we endure in the gold market, for no other reason than to maintain someone's "inherited" position in what is still very much a "class-based society".

11:58a ET Saturday, February 3, 2007

Dear Friend of GATA and Gold:

GATA's friend Mark Wallace writes:

"I think that what is instructive and lends support to GATA's hypothesis is the way gold has been advancing.

"The advances come in sudden bursts, with little opportunity to get on board. The powers that be are making sure that there is no steady advance, because that would garner widespread support from ordinary investors.

"In 1989 I bought gold eagles for about $389 per coin. Sixteen years later, in April 2005, gold was about $430 per ounce and I was barely breaking even. Then gold shot up to $725 over a 10-month period.

"The point here is that over 16 years virtually all the appreciation occurred in less than one-sixteenth of the holding period. Try catching that move unless you were in the gold sector for the entire time.

"Contrast this with the stock market, where there has been a slow but steady rise in the S&P with no serious setbacks to shake out nervous Nellies. The contrast could not be greater.

"Only people who believe in the Tooth Fairy could believe that this difference is coincidental."

Wallace's observation is consistent with a central bank program of controlled retreat with the gold price -- setting staggered levels of defense against free-market forces, dishoarding of central bank gold reserves and smashing the gold market at strategic points to prevent a stampede out of the fiat-money system and into the monetary metals.

As GATA, Jim Sinclair, and others -- even former Federal Reserve Chairman Alan Greenspan, really -- have noted, central bank gold sales are undertaken precisely when gold demand is threatening to overwhelm the fiat system, undertaken precisely when gold is about to be revalued dramatically upward. Central bank gold sales are NOT undertaken for the reason long given by central banks -- to earn a little money on a supposedly dead asset by exchanging it for interest-bearing securities like government bonds or even top-rated corporate bonds.

For, in the first place, having the power to make money by decree, central banks have no need to make it by more strenuous means. And second, the price of gold has increased over the last five years at an average rate of 23 percent -- four or five times the interest rate paid by government and top-rated corporate bonds. If "making money" as it is commonly understood was really the objective of central banks, they would be BUYING gold, not selling it.

No, selling gold, leasing and swapping gold, selling gold options, and such are the central bank mechanisms for deceiving and interfering with the markets in support of the central banks' own ever-depreciating currencies and in support of ever-increasing government power over the individual -- that's all.

This central bank scheme has worked for a while but its failure is inevitable; the gold of the central banks will be exhausted and they will turn to other methods of supporting their own currencies. Since modern central banking is built on deception, since deception is the very PREMISE of modern central banking -- as Fed Vice Chairman Alan Blinder remarked in 1994, "The last duty of a central banker is to tell the public the truth" -- the central banks probably will run out of gold a lot faster than their official figures suggest. After all, even the International Monetary Fund has just admitted that the central banks have been double-counting their gold, counting leased and swapped gold as if it is still in the vault. This double-counting has been done so that the markets might believe that the central banks remain in absolute control of the world.

GATA's purpose is to hasten the day when the gold price suppression scheme is understood and acted upon by people everywhere so that they may protect themselves against the sometimes slow and invisible expropriation and the sometimes sudden and rude expropriation that are basic to modern central banking. Every little purchase of the monetary metals strikes a blow for a new world order that is quite different from the one being contemplated by the financial elites.

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

Fishy stuff in gold market is making it into news reports
Submitted by cpowell - Friday, February 2, 2007. Section: Daily Dispatches - Gata.org
Dear Friend of GATA and Gold:
Even as gold is down, it's a great day when GATA sympathizers constitute the majority of analysts quoted in the CBSMarketWatch report on the gold market, as was the case today in the report appended here, quoting, among others, GoldSeek's Peter Spina, Blanchard & Co.'s Neal Ryan, and Peter Grandich of the Grandich Letter. Ryan notes the "counter-intuitive moves" in gold -- that is, fishy stuff -- and Grandich cites the enduring coincidence of bear raids on gold whenever U.S. employment figures are announced. With a little help from our friends, the world is figuring it out.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Gold Drops But Still Ends Higher on Week | Myra P. Saefong
CBSMarketWatch.com | Friday, February 2, 2007
http://www.marketwatch.com/news/story/gold-futures-drop-still-poised/sto...
SAN FRANCISCO -- Gold futures dropped nearly $12 an ounce Friday as growth in fourth-quarter U.S. payrolls sent the U.S. dollar higher, but the metal still ended slightly higher for the week. Gold had climbed to a six-month high in the previous session.
After seeing such strength during the last several sessions, "the market could not extend itself and quickly, the nervous buyers have exited seeking to book profits as the U.S. dollar found some strength," said Peter Spina, chief investment strategist at GoldSeek.com. "There is no reason to believe this is nothing more than just a temporary pullback to shake out some weak hands," he said.
And the decline will offer an opportunity investors, according to Ned Schmidt, editor of the Value View Gold Report. "This selling will set up the gold market for an oversold condition, which will create a buying opportunity for true investors next week," he said.
Gold for April delivery closed down 1.7%, or $11.50, at $651.50 an ounce on the New York Mercantile Exchange, following a drop to $648. The contract had gained $5.10 on Thursday to mark its third-straight winning session, trading as high as $667, the contract's strongest intraday level since Aug. 9.
"Today we find the funds making the play," said Julian Phillips, an analyst at GoldForecaster.com, in an e-mail Friday morning. "Seeing no follow through from the physical side and from the long-term investor, the funds are hesitant to move in, so demand has dropped ahead of the weekend," he said. "The fall below support in the mid-$650s could pull it back a little further, but we are now in consolidation mode for the weekend at least."
"Nothing has changed except the dollar has firmed back up, he said. "This is enough to make the funds hesitate to make new long positions."
Putting pressure on gold, the dollar traded higher against other major currencies Friday, reversing early losses sparked by a government report showing the U.S. economy created fewer-than-expected jobs last month. Payroll growth in the fourth quarter was stronger than expected.
"Sometimes investors have to get used to these counter-intuitive moves in the metals and currencies markets," said Neal Ryan, director of economic Research at Blanchard, pointing out that analysts have been blaming gold's retreat on profit taking and other factors even though "every other indicator" should be pushing the price higher. "These types of moves should be looked at as the perfect entry point for an investor," he said.
The Labor Department said Friday that job growth rose moderately in January and the unemployment rate ticked higher. Nonfarm payrolls expanded by 111,000 in January, lower than the 170,000 expected by economists surveyed by MarketWatch. The unemployment rate rose to 4.6% in January from 4.5% in the previous month. Economists had forecast the unemployment rate to hold steady at 4.5%.
"Gold has once again succumbed to a bear attack, a feat that coincidentally continues to happen on the day U.S. employment figures are released," said Peter Grandich, editor of the Grandich Letter. "I believe it will be a bear trap and we shall see a reversal next week that leads us to a rally to $700," he said.
Elsewhere on the commodity markets, crude-oil futures climbed above $58 a barrel as forecasts suggested the cold snap in the northeastern U.S. will continue well into February. Prices had climbed near $59 a barrel Thursday to their highest level in a month, before falling back to end that day with a loss. See Futures Movers.
Moves in commodity prices have been particularly volatile lately, but a closer look at the fundamentals can help to clear up the confusion, analysts say. See Commodities Corner.
Economists at research firm Action Economics noted that many commodities have been performing strongly in recent weeks, finding strength in part from signs of generally robust global growth. Against this backdrop, other metals prices dropped on Friday. March silver dropped 2.6%, or 35 cents, to close at $13.375 an ounce, unchanged from the level it closed at a week ago. March copper declined 14.3%, or 10.75 cents, to end at $2.423 a pound, down 8.2% from a week ago. April platinum closed down 2.5%, or $29.30, at $1,163.50 an ounce. March palladium fell $6.65 to close at $338.25 an ounce. Both contracts ended lower for the week.
On the supply side, gold inventories increased 32,150 troy ounces to stand at 7.49 million troy ounces as of late Thursday, according to Nymex data. Silver supplies dropped 34,164 troy ounces to 113.93 million troy ounces, while copper stockpiles added 200 short tons to stand at 36,169 troy ounces. Over on the London Metal Exchange, zinc prices touched their lowest price in seven months Friday as concerns over supply levels eased.

A report that Red Kite Management, a $1 billion metals trading hedge fund, wants to extend the notice period for investor redemptions after losses of as much as 15% in January, may be affecting metals trading as well, analysts said Friday. Red Kite, run by Michael Farmer, Oskar Lewnowski, and David Lilley, asked investors in its metals fund to approve an amendment that would require 45 days notice before money can be withdrawn, according to a copy of a Jan. 31 letter from the firm obtained by MarketWatch.
"If anything, that makes things look even more bullish in my mind," Ryan said of the news. "The more information that hits metals markets of Refco and Amaranth type blowups, the more bullish I think it looks for precious metals," he said. "I can't imagine any investor is going to willingly say yes to extending redemption dates that only ends up hurting them in the long run."
When asked, Grandich said that it's possible that the decline in gold is related to this news on Red Kite, "but I suspect with gold at its highest level in months, any losses they could have related to gold would be from the short side," he said. "I do think it's an indication of what can happen in the overall hedge-fund industry when the bubble bursts in the stock and credit-derivatives markets," he said. And hedge-fund concern is "far more possible in regards to copper, given how much the hedge funds were long that market, the big decline and the further sell off today," Grandich said.
In equities trading Friday, the main benchmarks tracking metals and mining stocks fell along with the metals prices, poised for their first broad loss in four sessions.

http://streettracksgoldshares.com/us/value/gb_value_usa.php#2Looks like there is some interest in the ETF side of things over the last couple days. I wonder if this trend will continue?

23 Jan 2007 450.30
24 Jan 2007 450.30
25 Jan 2007 450.30
26 Jan 2007 450.30
29 Jan 2007 450.30
30 Jan 2007 450.30
31 Jan 2007 450.30
01 Feb 2007 454.00
02 Feb 2007 458.63

http://www.atimes.com/atimes/China_Business/IB03Cb08.htmlBy Zhou Jiangong

SHANGHAI - The Chinese government is taking action to implement a new policy of diversifying the disposal of the country's over US$1 trillion foreign exchange reserves which was initiated by the Central Conference on Financial Affairs three weeks ago.
----------------------------------------------------------------------------------------------------------------------
See URL for the complete article.

Taking a look at a POG chart of the last several years, I pegged the duration of the big recent spike from July 2005 through May 2006.

So, what were we talking about way back at the beginning of that spike? Hmmm....

THEN
GOLD about $430 Euro 350
Cnooc was bidding for Unocal.
IMF was considering selling gold to help the poor.
Talk of Germany and Italy diching the Euro.
The forum sure is quit lately
On the Yuan; Greenspan -- It'll move soon, China � don't expect much change.

NOW
Gold about $650 Euro 500
Grumbling about China locking up African recourses
IMF pushing another gold sale
France talks of issuing it's own currency, more recently a carbon tax (tariff)
On the Yuan: China � don't expect much change

A "new age" for IMF gold

As Michael Kosares has explained, talk of IMF sales (and it is just talk) is market bullish for POG.
Too, the U.S. Congress would have to approve any sale because they wield final veto power(17%) over decision making in which an 85% consensus is needed.

Cutting IMF spending & budget items would go a long way towards alleviating it's bureaucratic (governmental) gaps in operating budgets every year of late. This would set a better example for the poor nations trying to make a living mining gold and feeding their people than divesting the supposed "people's" gold the IMF needs to legitimize their
funding and global assistance mandates and charter.

In the past, the IMF sold gold at the bottom of the gold market, likely to central banks. This time, it would be no different, as relatively speaking, we're still at
the bottom of what's about to come.

I agree with those like MK who assert that any IMF gold
distribution would bypass the market and end up swapped or
sold at a favorable price and without dealers
commissions to any one or more of the numerous central banks
known to be actively buying more gold.


As we noted, the IMF Crocker Report determined that sales must stay spread out over a lengthy period of time.
As if that wasn't enough, they stipulated that tonnage also would stay confined to sales quotas of the Central Bank Gold Agreement(CBGA)aka 'Washington Agreement'!
And this is likely a second straight year of signatory banks missing sales quotas, significantly I should add, after having completely filled sales quotas for seven straight years.

http://www.nytimes.com/2007/02/01/health/01cnd-flu.html?ei=5065&en=cdb820c97dd329e6&ex=1170997200&adxnnl=1∂ner=MYWAY&pagewanted=print&adxnnlx=1170379085-Ttgi/fUCxm7xJ0Y/evbOswU.S. Issues Guidelines in Case of Flu Pandemic
By Donald G. McNeil Jr. - New York Times - 02/01/07
ATLANTA, Feb. 1 � Excerpts: "Cities should close schools for up to three months in the event of a severe flu outbreak, ball games and movies should be canceled and working hours staggered so subways and buses are less crowded, the federal government advised today in issuing new pandemic flu guidelines to states and cities.
Health officials acknowledged that such measures would hugely disrupt public life, but they argued that these measure would buy the time needed to produce vaccines and would save lives because flu viruses attack in waves lasting about two months.
"We have to be prepared for a Category 5 pandemic," said Dr. Martin Cetron, director of global migration and quarantine for the Centers for Disease Control and Prevention, in releasing the guidelines. "It's not easy. The only thing that's harder is facing the consequences. That will be intolerable.""

"The historian John Barry, author of "The Great Influenza," a history of the 1918 flu, questioned an idea underpinning the study's conclusions. There is evidence, he said, that some cities with low sickness and death rates in 1918, including St. Louis and Cincinnati, were hit by a milder spring wave of the virus. That would have, in effect, inoculated their citizens against the more severe fall wave and might have been more important than their public health measures.
The guidelines did not suggest using the military to enforce quarantines, as President Bush said he might do when he first mentioned avian flu in 2005.
Dr. Levi said that using the National Guard to set up temporary clinics or move pharmaceutical supplies might make sense. "But they're not there," he said. "The people who know how to run field hospitals are in Iraq.""

http://news.yahoo.com/s/ap/20070203/ap_on_re_la_am_ca/amazon_gold_rush;_ylt=Ai2G5vwc1NCZLKaN2wVRsztw24cA;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--By Michael Astor
Associated Press
Saturday, February 3, 2007

It's a gold rush in the Amazon jungle, driven by the Internet.

Speeding past unbroken walls of foliage, a motorboat packed with gritty prospectors veers toward the shore of the Juma river and spills its passengers into a city of black plastic lean-tos veiled by greasy smoke.

All around them are newly dug pits, felled trees, misery and tales of striking it rich.

This is Eldorado do Juma, scene of Brazil's biggest gold rush in more than 20 years.

Drawn by a Brazilian math teacher's Web site descriptions of miners scooping up thousands of dollars in gold, between 3,000 and 10,000 people have poured in since December, cutting down huge trees, diverting streams, and digging ever-deeper wildcat mines, in an area that only months ago was pristine rain forest.

Hundreds of mud-covered men with picks and shovels hack at the earth, marking their tiny plots with tree branches and string. Others feed dirt into wooden troughs and the residue into pans. A lucky few will end up with tiny nuggets and flakes of gold to sell for $530 an ounce in the town of Apui, about 50 miles north.

Even the cooks, cleaners and porters serving the new industry are making about six times the minimum wage.

It's reminiscent of Serra Pelada, a mountain that became a gargantuan hole in the jungle floor after a gold rush in the early 1980s, immortalized in Sebastiao Salgado's photos of what looked like a hellish human anthill.

"This is even better than Serra Pelada. I've been mining all around the Amazon since 1978 and this is the best I've ever seen," said Joao Leandro de Azedo, 70, overlooking his stake from a hammock.

Azedo said he has panned some 70 ounces of gold worth a total of $19,000 since arriving 17 days ago, including 17 ounces in a single day.

Half the proceeds went to the man who staked out his plot, and 8 percent more to Jose Ferreira da Silva Filho, who claims to own the entire "garimpo," or wildcat mine.

Already, too many people are chasing too little gold and there isn't enough space for all the miners at the eight main digging sites.

Price-gouging (chain saws costing around $400 in gold) is rampant and malaria is spreading in the makeshift city, nicknamed Eldorado do Juma after the Amazon's mythical Eldorado, or city of gold. It already has bars, restaurants, barbershops, bakeries, equipment shops and jewelry stores, most of them constructed out of tree branches and tarps. A 16-room brothel is under construction.

Federal police armed with automatic weapons arrived last month, imposing a nightly curfew and cracking down on shootings but making it harder to get rich quick.

"Luckily, we caught it right at the beginning. It is a concern for everyone ... that this doesn't become another Serra Pelada," said Walter Arcoverde of the National Department of Mineral Production.

Local people had been mining this area of the jungle state of Amazonas in relative peace until Ivani Valentin da Silva, a math teacher in Apui, posted their pictures and stories on the Internet, said Antonio Roque Longo, the mayor of Apui.

"Perhaps he didn't have any idea of the impact it would have," said Longo. "People see this on the Internet and they think they're going to do the same thing. But the truth is, for every one person who strikes it rich there are 30 who go home penniless."

Da Silva said he clearly wrote that the gold would soon run out.

"Unfortunately, no one read the article," he said, denying any responsibility for the environmental damage being done by the thousands of fortune-seekers. His Internet posting forced federal police to pay attention, he said, and without that, "the area would be totally devastated."

Government geologists are trying to measure the deposits, while environmental regulators struggle to prevent miners from using heavy equipment or mercury, which joins gold particles together but can ruin the rivers. The fear is that like Serra Pelada, Eldorado do Juma will end up a scarred wasteland.

Already, small rivers of mud gush from streambeds at night, suggesting that heavy-duty water jets are being used illegally, despite promises to wait for permits.

"Most of the gold that can be mined manually has already been found, but if they start using heavy machinery this place is going to explode all over again," said Luiz Gonzaga da Conceicao, 51, a miner from Brazil's far west.

The land reform agency says the land actually belongs to the federal government, but now that the miners are here, there's talk of compromise -- authorities say they will permit pressure hoses, rock crushers and other machinery if miners police themselves and stick to an environmental protection plan.

But da Silva, the man who claims to own the whole area, says he's working on exactly that.

"This place has a great future. There are other minerals here besides gold. We have to get organized to exploit it," he said.

Off the record, many miners talk of threats and intimidation that ensure they pay da Silva's 8 percent cut. Da Silva denies it and says he has his own share of headaches and unseen costs.

So far, the federal government and most miners seem content to leave him in charge, if only to provide some order.

Meanwhile, prospectors travel up and down the river and deeper into the jungle looking for "fofocas," new finds.

"There's gold here for sure, the problem is finding an area to work. Every spot has three or four owners now. I'm just waiting for a new fofoca and I'll be right in the middle of it," said Jose Francisco Mendes dos Santos, 32, who came from the neighboring state of Rondonia. "A prospector's motto is hope, and his friend is luck."

Gilmar Predebon reckons his gold store in Apui buys about 70 ounces of gold a day and molds them into gold ingots. He figures the mines generate between 200 and 230 ounces a day overall �" "a good amount of gold but nowhere near as much as you'd expect, considering all the talk."

Gold is fetching around $650 an ounce on world markets.

Mayor Longo thinks his city of 20,000 would be better off without the mine: "Sure, it's been good for the merchants but we have major health problems. Before the garimpo, we had malaria mostly under control here; now it's a huge problem again."

Others say the garimpo has improved things.

"This was a door God opened for Apui. Today the city has grown fivefold and people are flooding in from every corner of the country," said Antonio Carlos Santos, 48, who quit his policeman job to work the mines.

Probably most of us here would agree that it would be tough to get by on $225 per week , the current minimum wage (before taxes), so probably a raise in the minimum wage would be benificial , at least for them.

Might even put more puchasing power into hands where it would turn over quickly, but will it be inflationary ,adding pressure towards higher prices.............having to pay $2 for a single dipped cone at Dairy Queen? Wage inflation is one of the worst kinds..... ask any Wall Street exec.

http://www.agorafinancial.com/RudeAwakening/RAissues/2007/JanFeb/RA020207.htmlTough? Well, how about just not comfortable? All it takes is 3 roommates to pay the rent, not having health insurance and living on rice and beans (you wont be able to afford beer).


SNIP: "Eric Fry, who burns less alcohol than he drinks, reports...

"Unsustainable subsidized food-burning."

That's how David Pimental, a researcher at Cornell University, characterizes corn-based ethanol production.
"Ethanol does not provide energy security for the future," he says. "It is not a renewable energy source, is costly in terms of production and subsidies, and its production causes serious environmental degradation."


Ethanol is no silver bullet, it isn't even a lead bullet, more like a lead balloon. Therefore oil will rise painfully and so too will gold rise gloriously.... eventually.... real soon now.

I also dislike the EROEI metric as it is tricksy and slippery, showing false "profits" and missing useful alternatives.

Supposing one has a cheap source of energy that is not useful as motor fuel, it could be turned into motor fuel at a huge loss and still yield a profit. Likewise, the process might have intermedite byproducts that could provide energy outputs, but those outputs are so unuseable that their "value" is in reality zero.

It is analogous to the "gold equivalent" outputs of a mine that produces gold/silver/basemetals. Figuring a portion of the silver outputs as "gold equivalents" may make some sense for PM's. It is hardly justified for base metals however.

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

I never said that paying into social security was a good form of savings. I never said that. I, too, would love to be free to put my own money into my own retirement rather than be forced to pay into the governments social security system. The issue in question was American savings, NOT how well each + every investment might turn out.

However, to claim that American savings is at an all time low while looking only at the old savings vehicle of passbook (or digital) money deposited in a bank while excluding all other forms of savings, including social security, is simply fraudulent. That is what I said. Reread my post if you need to.
happy weekend....

@ RP,

I wasn't trying to put words in your mouth, just laughing at the thought of anyone even considering SSI as "savings".

"However, to claim that American savings is at an all time low while looking only at the old savings vehicle of passbook (or digital) money deposited in a bank while excluding all other forms of savings, including social security, is simply fraudulent."

Quit right. But consider what this means. If traditional savings are low, then the availability of liquidity to the individual saver is also low. The flood of liquidity in the economy is not readily available to those individuals. For example, home equity is only available as debt, and shares in a 401 are not available at all.

Traditional savings in fiat dollars is already one level of abstraction away from real money. When those savings exist only as equity, it is an abstraction of an abstraction. I think that the average person has no concept of what its like to have money in hand to purchase anything more than a Big Mac. This is as scary as anything I see out there. These folks are the proverbial frog in the kettle of water that is slowly heating to a boil. (Recite the Black Blade Mantra here.)

The point is that low traditional saving levels may not reflect the true paper net worth of individuals, but what it says about the changing perception of monetary wealth is important.

Of course, 'real' saving in the form of something shiney does not appear in traditional savings levels either, but we know the rest of that story.

- Survivor

http://www.healthtruthrevealed.com/full-page.php?id=1037362501&&page=article Sloth, Gluttony & The Coming Medical/Financial Tsunami - Devvy Kidd - Jan 25, 2007, Feb 4, 2007
One topic- implications for medicare funding - reminded me of cuts to medicare in the president's proposed budget Congress will shortly vote on.
As this and other entitlement spending is coming into focus especially on this forum, the need for gold is magnified many fold. After reading this all seems more certain, that though many will slim down, turn to folk remedies and home remedies and fall back on equity, gold, and other assets such as community and hard work,
this engaging article broadened my appreciation of the predicament facing the US, and other industrialized countries, of soaring health costs and rapid increases in older populations and their maladies. A decline in living standards must be relatively sudden and far-reaching as gov't cuts would be forced by any one of dozens of possible
emergencies and as asset values tumble, or are otherwise lquidated, revalued, unmarketable, overtaxed, and/or fall prey to chain defaults and leverage.
As Devvy Kidd implies, overextension of health payments
reaches further than to just the unqualified and illegal immigrants.
Handouts of many kind have been plagued by overreliance on unsustainable budgets, punitive payroll taxes for medicare, medicaid and SS, and "mathematical" models and wizardry.
Goldilox post yesterday on SS was especially apropo.
Here again many Americans and Europeans etc will adapt- cut back on spending and consumption, fall back on personal and local resources, slim down and trim down, turn to more 'basics', especially those with homes and workable land, computers etc.
Perhaps the majority of private pensions will survive intact in the best case scenario- certainly sizable holdings of gold and perhaps silver would more than offset problems elsewhere in the portfolio (but realistically few westerners own much beyond small jewelry items)-
including personal portfolios and managed funds of equities, money market instruments, CD's, cash & bonds. Hopefully these retain a modicum, if not most integrity, after crisis, further inflation, currency(dollar, euro, etc.) devaluation, and years of 'recovery'.

http://www.rense.com/general75/our.htmIt's Our Turn, Our Time�- Joan M. Veon - Feb 07
Less a warning of the NWO than an inspirational missive on the power of right positioning, will and the human spirit.

http://stockcharts.com/def/servlet/SC.pnf?chart=$silver,PLTADANRBO[PA][D][F1!3!!!2!20]⪯f=G,http://stockcharts.com/def/servlet/SC.pnf?chart=$gold,PLTADANRBO[PA][D][F1!3!!!2!20]⪯f=G,http://stockcharts.com/def/servlet/SC.pnf?chart=$hui,PLTADANRBO[PA][D][F1!3!!!2!20]⪯f=G
The three charts are interesting in that footnote at the top indicating expectation of direction and amplitude by the individual that interprets the numbers and formation


GOLD and SILVER both indicated dramatically higher
Hui indicated dramatically lower..

WHy is this so ??????


It's an indicator of what can happen in the paper markets.
because of persons of question who have at their disposal unlimited supply of PAPER FIAT with which to Jam stocks .
(suppressed value shorting )


I grow weary of these games. THe games these players play will eventually lead to shortages ....brought on by the need for truth and REAL ECONOMICs to overtake those in these markets that want to use their paper to bluff with .

Musical chairs goes on until there is no SILVER LEFT on the shelves.


These companies have been under pressure for some time although it is more amplified than the actual corresponding movements in the price of the metals.

Many things about these companies are subject to variation
and makes them vulnerable to assaults ......

The metal in possession is not subject to these variables .

To overcome the effects of these suppressors , It might be necessary to obtain leverage in the metals markets in a way that is not hindered by these charlatans of darkness.

http://www.europe2020.org/en/section_global/230107_part2.htm
A very interesting read,unique charts too.

Sell the house in Zurich and board the golden bus,tally ho.

http://stockcharts.com/h-sc/ui?c=$hgx,uu[w,a]daclyyay[pb50!b200][vc60][iup5,3,3!la12,26,9]Pray TELL : WHO IS BUYING THIS POOPICAH

http://stockcharts.com/h-sc/ui?c=iyr,uu[w,a]daclyyay[pb50!b200][vc60][iup5,3,3!la12,26,9]another disconnect from reality

Same as the people buying our bonds to keep the TIC data in line to supress GOld and KEEP EVERYBODY under the impression that
everything is HAPPY in THE LAND OF OZ .......

DERIVITIVES BOYS employed by your FED Chairman

NEVER HAVE SO MANY BEEN EXPOSED TO SO MUCH DANGER by so FEW

Never has so much power been vested in the hands of so few.
( there is no more representative gov't ; it's the skeleton of the model set up here in 1776)

It seems so obvious .........that we all need to be establishing community self sufficiency / independence......

Like BLACK BLADE SAYS ........

WE are in Lemming CITY ..........Everything you have been taught and now take for granted may turn out illusionary

WE have been taught to trust the people that talk to us through the TV .......THEY are today's ' ROYAL HIGHNESSES"
and we are their subjects.

What if they are wrong and we get caught unawares because they over abuse a system that was never designed to do what they are now doing with money supply to socially engineer planned outcomes.

This is the picture that is drawn in CODE
: Daniel . THe reforming of a WORLD EMPIRE will not come to fruition ........SOmething is going to break .

http://www.cato.org/pubs/journal/cj24n1-2/cj24n1-2-7.pdf
If I can put my two cents in: I seem to remember most of the SS contributions are immediately borrowed and spend by federal government in the general fund. (In a deceptive reporting practice, these dollars have been used to reduce the amount claimed for the annual deficit.) A few years ago, when Paul O�Neil was Secretary of Treasury, he requested a study that would calculate the total national debt of the US. The study was halted when it totaled $45 trillion dollars. You can review a CATO paper at the attached website that reviews the study and read how it results in an inflationary environment. (This is why owning gold is now so important).

Goldilox is right. SS isn't part of the US's savings, it is already spent. All that is left is debt.

Silver Fox

http://www.indiadaily.com/editorial/15414.asp Gold price depends on American tax cuts for the rich � gold prices can reach a new high this year as Bush vetoes any increased tax by Democrats for the rich - Marla Guthrie - India Daily - February 3, 2007

http://news.yahoo.com/s/afp/20070204/bs_afp/syriaeconomycurrency_070204212729From Agence France Presse
via Yahoo News
Sunday, February 4, 2007

Syria has replaced the dollar with the euro for half of its foreign currency reserves as part of efforts to counter possible U.S. sanctions, Prime Minister Mohammed Naji Otri said.

"The Syrian pound is sheltered from crises because of its large foreign currency reserves and because the euro has replaced the dollar in the case of about half of this money," Otri said, quoted by the state news agency SANA.

At the start of 2006 the premier sent out a circular instructing all ministries and state companies to adopt the euro instead of the dollar to repay foreign debts and for import-export contracts.

Since May 2004, Syria has been under U.S. economic sanctions banning imports of American goods apart from food and medicine.

"The pressure exerted on Syria because of its Arab and nationalist stand has somewhat slowed economic reforms and lessened some investments, but they will never halt the process" of reforms, said Otri.

He said that almost 2,500 laws and decrees had been passed between 2003 and the end of 2006 as part of the government's efforts to modernise and develop state organizations.

http://quote.bloomberg.com/apps/news?pid=20601109&sid=aduhExm26rvgReal Making Brazil a Haven for Capital

By Adriana Brasileiro and Alexander Ragir
Bloomberg News Service
Monday, February 5, 2007

Joao de Matos, whose travel agency has been a fixture in Manhattan's Little Brazil neighborhood since the 1970s, stared at a chart showing a surge in Brazil's currency against the dollar and fretted about his business.

"There's nothing I can do," said de Matos, punching numbers into a calculator to determine how much to raise prices on tour packages to Rio de Janeiro. "Brazil used to be a cheap place. It isn't any more."

As de Matos, 59, watched, the real strengthened as much as 1.1 percent on Feb. 1, its biggest rally since September. The gain is the latest spurt in a four-year, 69 percent advance that made it the world's best-performing currency against the dollar. This year, the real has risen against every one of 70 currencies tracked by Bloomberg except Iceland's krona.

A boom in exports of orange juice, sugar, coffee, soybeans, and iron ore, as well as interest rates at 12.9 percent, are luring investors to the real. The currency ended last week at 2.105 per dollar, near its highest level since May.

The gains have hurt profits at manufacturers such as Volkswagen AG, which exports to 30 countries from its Brazilian plants, and made the country increasingly expensive for visitors. A taxi ride to Rio's Copacabana beach from the airport almost doubled to $34 from $18 four years ago.

A penthouse room overlooking the Atlantic Ocean at the Copacabana Palace, a hangout for jetsetters from Frank Sinatra to Mick Jagger, costs $2,480 a night. The rooms went for $1,840 in 2005.

Demand for the currency has risen as international investors buy the country's debt. Yields on two-year benchmark government securities are 7.4 percentage points more than comparable U.S. Treasuries and 8.55 points higher than German bunds.

Brazil's benchmark local-currency, zero-coupon bond due January 2008 returned 18.1 percent during the past 12 months. Converted into dollars, the bonds returned 25.2 percent

The higher yields have made Brazil popular with investors borrowing in Japanese yen -- where the benchmark lending rate is 0.25 percent -- and reinvesting in Brazilian real debt, the so-called carry trade. Foreign investors boosted holdings of real debt more than five-fold last year to 38.4 billion reals ($18 billion).

"The Brazil trade has been one of the best trades over the last two years," said Claudia Calich, who manages $900 million in emerging-market debt for Invesco Inc. in New York. "The biggest gains are behind us, but I don't think it's over yet."

Flows of funds into Brazil have overwhelmed central bank efforts to contain the currency's advance. Banco Central do Brasil has sold reals for dollars every day since July. That has pushed foreign reserves to a record high of $91.6 billion from $56.8 billion a year ago and $32.4 billion in June 2002.

In September, Volkswagen said it would fire 3,600 workers from the 12,000-member workforce at its plant outside of Sao Paulo because the real's rally was cutting into exports. Usinas Siderurgicas de Minas Gerais SA, Brazil's second-largest steelmaker, said third-quarter profit fell 9 percent in part because the currency's gains eroded export earnings.

The stronger real has damped growth in Latin America's biggest economy. The central bank estimates gross domestic product expanded 3 percent in 2006, the slowest pace among the nine biggest countries in the region.

President Luiz Inacio Lula da Silva tries to discourage the gains. "The government doesn't have the commitment to an exchange rate target, but this doesn't mean that the government won't intervene in the exchange rate market and that it's unaware of the currency level," Lula said during an Oct. 23 online interview arranged by British Broadcasting Corp.

Brazilian exports rose 16 percent in 2006 to a record $137 billion, buoyed by the surge in commodity prices. Exports may climb another 11 percent this year to $152 billion, Ivan Ramalho, Brazil's deputy trade minister, said last month.

The steady gains in the currency over such a long period are unusual in Brazil, a country that has had eight currencies since World War II and suffered a 35 percent plunge in the real as recently as 2002. The real is now less volatile than the Japanese yen, Australian dollar and Norwegian krone, based on prices quoted by options traders.

"The currency here is a yo-yo; it's always going up and down," said Michael John Moran, a 72-year-old retired businessman who sits on the board of the U.S.-Brazil Chamber of Commerce. "That's one of the reasons American companies like to send executives here. If you can survive in Brazil, you're ready for bigger responsibilities."

Brazilians are heading overseas in record numbers. They spent $5.8 billion on trips abroad in 2006, the most since the central bank began keeping track in 1947. The previous record was $5.7 billion in 1998, when vacationers took advantage of a policy that pegged the real at almost 1-to-1 with the dollar.

The Tourism Ministry forecasts that 5 million people will travel abroad this year, up from last year's record of 4.5 million. Many are opting for more expensive destinations such as China, India and South Africa, said Virgilio Carvalho, a spokesman for Sao Paulo-based CVC Turismo, Latin America's biggest tour operator.

Wine-tasting trips to France, Italy, Argentina and Chile are rising as well, said Ricardo Farias, vice president of the Sommeliers Association in Rio. Membership in the association, which gives classes on wines, has climbed 20 percent a year for the past three years, he said.

A growing number are also making their way to New York and visiting Little Brazil, according to Regina Silva, who runs the Emporium Restaurant & Bar Brasil.

"It's excellent," said Silva, whose restaurant is located across the street from de Matos's travel agency, on 46th Street in midtown Manhattan. "Business has gone up a lot."

@ Comatose,

The HUI-PM disconnect makes Rob McEwen's plan of witholding mine output a few years back look pretty smart.

Hedged miners are under obligation to either deliver or unwind the hedge, but non-hedgies can hoard IT during a rising market, and only need cover their operations and storage costs.

Great move.
Brings to mind, what motive underpins the designation of "official" US gold from 'Gold in Reserve' to 'Allocated Gold' to 'Deep Storage Gold'?
(If history is any guide, this may be one of those "coincidences" that will survive only as folklore and inside information to be passed from generation to generation.)
What's to prevent the gov't from issuing their own gold ETF? Cornering the market? Colluding?
Goodness no! Just normal day-to-day 'commercial operations' that could be contracted out to the Fed! With
a little help of course from money center banks, bullion banks and/or brokerage houses as proxies on the world's markets and exchanges.

http://www.wsws.org/articles/2007/feb2007/brze-f03.shtml'Nuf said. Yet another reason to stock up. They don't have your best interests in mind. And definitely don't print the "news that's fit to print". Yet another outlet for the dual citizenship neocons (tread softly or be accused of hate crime!).

Why is the US press silent on Brzezinski's warnings of war against Iran?
By Barry Grey in Washington DC
3 February 2007

The major national newspapers and most broadcast outlets failed even to report Thursday's stunning testimony by former national security adviser Zbigniew Brzezinski before the Senate Foreign Relations Committee.

Brzezinski, national security adviser to President Jimmy Carter, is among the most prominent figures within the US foreign policy establishment. He delivered a scathing critique of the war in Iraq and warned that the policy of the Bush administration was leading inevitably to a military confrontation with Iran which would have disastrous consequences for US imperialism.

Most significant and disturbing was Brzezinski's suggestion that the Bush administration might manufacture a pretext to justify a military attack on Iran. Presenting what he called a "plausible scenario for a military collision with Iran," Brzezinski laid out the following series of events: "Iraqi failure to meet the benchmarks, followed by accusations of Iranian responsibility for the failure, then by some provocation in Iraq or a terrorist act in the US blamed on Iran, culminating in, quote/unquote, �defensive� US military action against Iran..." [Emphasis added].

Thus Brzezinski opined that a US military attack on Iran would be an aggressive action, presented as though it were a defensive response to alleged Iranian provocations, and came close to suggesting, without explicitly stating as much, that the White House was capable of manufacturing or allowing a terrorist attack within the US to provide a casus belli for war.

It is self-evident that such testimony at an open congressional hearing from someone with decades of experience in the US foreign policy establishment and the closest ties to the military and intelligence apparatus is not only newsworthy, but of the most immense and grave import. Any objective and conscientious newspaper or news channel would consider it an obligation to inform the public of such a development.

Yet neither the New York Times nor the Washington Post carried so much as a news brief on Brzezinski's testimony in their Friday editions. Nor did USA Today or the Wall Street Journal. All of these publications, of course, have well-staffed Washington bureaus and regularly cover congressional hearings�especially those dealing with such burning political questions as the war in Iraq.

There is no innocent explanation for their decision to suppress this story. The Washington Post on Thursday published a large page-two column and photo on Henry Kissinger's appearance the previous day before the same Senate committee. The former secretary of state under Richard Nixon gave testimony that was generally supportive of the Bush administration's war policy.

Moreover, the Post's web edition carried an Associated Press report on Brzezinski's appearance. That article introduced subtle but significant changes to Brzezinski's speculative scenario of the road to war with Iran which had the effect of underplaying the sharpness and urgency of Brzezinski's critique of the Bush administration. It omitted the suggestion that a terrorist attack within the US could become the justification for war, and it removed the quotation marks from Brzezinski's talk of a "defensive" war against Iran.

The World Socialist Web Site on Friday telephoned the New York Times, the Washington Post, the Wall Street Journal and USA Today to ask for an explanation for their failure to report Brzezinski's testimony. None of the newspapers returned our calls.

As for the television news outlets, the "News Hour with Jim Lehrer" on PBS showed a clip of Brzezinski laying out his war scenario before the Senate committee, without making any comment. "NBC Nightly News" ignored the story entirely.

The suppression of this damning critique of the Iraq war, the conspiratorial methods of the Bush administration, and its drive to an even wider war in the Middle East is one more demonstration of the corrupt and reactionary character of the American mass media. It indicates that the establishment media is preparing once again, as in the run-up to the invasion of Iraq, to serve as a sounding board for the administration's war propaganda and lies.

http://www.gold-eagle.com/gold_digest_05/droke020407.htmlOnce again, don't believe the hype. The Dow is like a hospitalized terminally ill cancer patient on Valium and steroids, attended by a fleet of nurses (Federal Reserve member investment banks). It's a casio rigged by the players, whose fortunes are now directly tied to the health of the stock market, given that a large part of their profits are derived from their internal trading desks (and playing with client's moneys as hedge funds).

I know everyone keeps expecting a crash, but iappears the bull market in stocks WILL continue, but not for the right reasons!

Dow Transports Confirm The Bull Market

Cliff Droke

The first week of February was a memorable one for the stock market in many ways. From seeing the President make a rare appearance on the exchange floor of the NYSE, to the all-time high in the Dow Industrial index, to the breakouts in the small cap and mid cap sectors. But most memorable from a technical standpoint was the new all-time high in the Dow Jones Transportation Average (DJTA). That will be the focus of this commentary.

Every one of the eight major sectors that are part of the Group Movement Index (GMI) closed higher for the week ending Feb. 2, putting the GMI reading at a new high for the year as well as a 52-week high. The GMI is what is used to measure the strength or weakness behind the broad market, and it's arguably the simplest definition of whether stocks are in a bull market or a bear market.

What was especially gratifying to see this week were the breakouts in the Russell 2000 small cap index (RUT), the S&P 400 mid cap index (MID) and of course the Dow Jones Transportation Average (DJTA). Equally good to see was the Dow Jones Utilities Average (DJUA) turning up strongly this week and closing at just below its all-time high.

A bullish confirmation signal was generated in the Dow Jones Transportation Average on Friday. The DJTA finally closed above the 5,000 resistance level, which makes for an all-time high in this economically sensitive proxy. I've stated previously that a close above the 5,000 level would be a highly significant event, technically, and that it further holds the promise of further economic recovery as well as a continuation of the bull market in stocks.

http://how-the-world-really-works.prosperitydoctor.com/output.php?position=42104&LastCount=1506&ChapterID=48&BookID=5One of golds active uses is in the smuggling markets.
Heroin and other illegal drugs account for, what, 500 billion a year? How does that amount get laundered without the big boys involved?

"The issue in question was American savings, NOT how well each + every investment might turn out."

But exactly that is what savings are about!The value of savings are derived on what they will be worth at the time intended for spending.

Physical Gold in a FreeGold environment is the best savings vehicle.

http://www.lewrockwell.com/rozeff/rozeff136.htmlHmmm. interesting link sir ROok. Of course geopolitical shell games are one thing, physics is a bit less difficult: it is easy to weigh a pile of gold coins and hard to weigh the words of wizards (or scientists looking for BIG grant money).

So while I have some doubts about the utility of such expository stories (and I have my doubts about Mr Rozeff's comments) , I am quite certain the government has not won the war on drugs, or poverty, or inflation, or other inanities, and I can safely say they will lose the WOT and the war on climate change.

Gold is no more criminal than drugs, both are inert. Evil is a web woven by hands, it's essence is in its intention, not its materiel. In every orc flows the blood of the eldar; in every demon, the wind of angels.

@ Rook,

Many of the contraband transactions are way too large to be transacted in physical gold.

The question is not just how are they laundered, but distributed, as well.

When I hear about the resurgence of the Afghan heroin trade, I gotta ask:

"With border guards, air and transport manifests, evesdropping, account watching, and cash tracking, how does someone manage to find "new" distribution channels for literally thousands of tons of heroin? or $Millions of dollars of illegal arms? These quantities cannot just "materialize" with no traceable source of funding, and the amount of gold required for some of these transactions would choke COMIX.

Big Boys MUST be involved, as these amounts are too large even for suitcases full of $100 bills. They must be handled by digital transactions, or the deposit trail of cash would stick out like a sore thumb. Bankers are "trained" to ask questions if even a few $thousand show up in cash.

It's too much like the 911 airline puts or multi-national "charities". If word comes from the right office, investigation stalls immediately.

A curiosity needs to be resolved here ...and it will be!
Bond strength equates to dollar weakness equates to PoG strength however, Euro has balked at 1.29 as if it were the devil incarnate.
A PoG spike in all currencies is ONE outcome I'd consider a real possibility.

http://www.technologyreview.com/Biztech/18086/@ melda laure,

You are right to doubt Rozeff's comments: anthropogenic climate change is very real. But there is indeed something artificial about the issue being hyped now after having been neglected before. The neglect and peak-oil BS served to keep the petrodollar going for a while longer. The hype is because the problem is serious, imminent, and an excellent common cause for uniting the world.

Do not be cynical about the sudden proactivity in Washington as to reducing dependence on oil and switching to new energy technologies. The technologies are already waiting in the wings. See for example the link above. But there is much more to come.

http://www.marketwatch.com/News/Story/Story.aspx?guid={7B057E5F-A1BE-49ED-9ACF-01720C5F524A}&siteid=mktw&dist=bnb Golden suspicions
Commentary - Newsletters wonder about manipulation
Peter Brimelow - MarketWatch - February 5

Golden suspicions
Commentary: Newsletters wonder about market manipulation
By Peter Brimelow, MarketWatch
Last Update: 1:04 AM ET Feb 5, 2007
NEW YORK (MarketWatch) - The past week was dramatic for gold. And the letters smell manipulation.
At Thursday's close, the yellow metal had risen to a high not seen since July last year (briefly). Then heavy selling in New York on Friday eradicated almost the entire week's gain.
Which is more significant the metal's ability to reach a new 2007 high, or its inability to hold it?
Veteran Market watcher Richard Russell of Dow Theory Letters thinks the former. Presenting a weekly chart, he says, in techspeak: "I've drawn the chart along with trendlines to illustrate the 'fanline principle.' The fanline thesis is as follows when three successive and less acute fanlines are drawn, if the item breaks above the third fanline, the item has reversed its trend to the upside. That's what I believe gold has done over the past two weeks. If so, we should see new highs in gold before the year 2007 is out."
Russell does not hesitate to question the character of Friday's sell-off: "Ironically, no sooner did gold bullishly break out of its fanline pattern, than the metals were whacked. And I wonder, was this just the action of traders taking profits on a breakout or was this the result of someone or some group dumping a load of gold on the market in an attempt to 'stem the bullish gold tide'? In the end, it really doesn't matte r..."
Bill Murphy's thesis that gold is subject to manipulation, advanced in his site http://www.lemetropolecafe.com/, seems to me to be gaining ground. Earlier this week The Gartman Letter made virtually identical comments as Russell, while doubling its recommended gold exposure.
I like to gain perspective from the authoritative 5x3 point and figure chart available on the public portion of Australian site http://www.the-privateer.com/. This gained another notch this past week and was unmoved by Friday's failure.
The Privateer is another service becoming ruder about the integrity of gold trading. On its analysis, a $660 close signals a decisive breakout. It writes: "On Feb. 1, the London PM Gold Fix was $US 660.20 ... The next day, Feb. 2, the spot future Comex contract closed down $US 11.20 at $US 646.20. Gold 'bugs' are not the only ones who can read Gold charts."
Martin Pring in www. Pring.com's Technical commentary does not concern itself with the whys of markets. So it serves as a good illustration of how serious Thursday's close was. Pring focuses on the Goldman Sachs Precious Metal Index: "The Goldman Sachs Precious Metal Index is breaking to the upside. The critical level appears to be that around 915 ... a more decisive upside breakout is quite likely now."
This was written on Thursday, after a 918.08 close. But Friday's was 901.23. Hmmm
Gold and commodity bulls received a crucial increase in support this past week when 13-D Research, written by my old friend Kiril Sokoloff, went bullish. This service, similar to The Gartman Letter in being very expensive and marketed to institutions, publishes weekly and concentrates on matters of grand strategy. It's not followed by the HFD. But its fans say its record is formidable.
Buying an outright oil position for what it says is only the second time in its history, 13-D suggests commodities could be starting a "huge rally, led by gold."
Once again this is illustrated by a gold chart as of Thursday's close. But 13-D is not likely to be shaken by one day's action.

http://financial.seekingalpha.com/article/26057 World Economic Forum: Optimists and Pessimists Battle It Out - SeekingAlpha - Feb 5 07

Sorry for the length as it is not linkable.

On January 24, Mr Michel Pento penned an article entitled "Gross Analysis" for 321Gold.com. Here is an item in that article:

On January 6 on Fox business, a PhD economist stated that the US would be better off if it manufactured NOTHING and imported 100 percent of its (economic) goods from abroad. As things presently stand, manufactured goods account for less than 14 percent of US GDP, with consumer SPENDING accounting for 70-75 percent of the US "economy". The good Doctor would prefer that the US produces no economic goods at all. Why bother, just "buy" them from foreigners.

Totally ignored in this harebrained scheme (it takes a PhD in the humanities to come up with REALLY harebrained schemes), is a very simple question: "Buy them from foreigners, you say?" "WHAT WITH?"

Undoubtedly, our esteemed economist's answer would be - "MONEY, you dolt. US Dollars".

Welcome to the twenty-first century. Why bother producing economic goods when you can produce "money", in any quantity, out of the thinnest of air? Why bother any more with the old wives tale that money is a "medium of exchange", an economic mechanism which makes the trading of GOODS for GOODS much easier. Why bother with economic GOODS at all, just add "money" and stir. Presto, instant economic "growth". If it was not so tragic, it would be screamingly funny.

What if we were to conduct an experiment? Let us, for the sake of whimsy, bring back one of our cave man ancestors and sit him in front of us. Then let us produce, for his interest and edification, four identically sized pieces of paper. One has a recipe for chocolate cake written on it. One is a picture of the New York skyline. One is blank. And the fourth is a US 100 Dollar bill.

Our cave man friend would instantly discern that the pieces of paper were all the same size. He would also discern that each one was different in appearance. He would have no idea what the differences represented, nor would any explanations we could give him make much difference to him. He would not retain much interest in any of the pieces of paper for long.

But let us go further. Let us, by means of some very crafty sign language, convey to him the suggestion that he should offer us each piece of paper in turn to find out what happens. He offers us the recipe for chocolate cake - and gets a sharp elbow in the ribs. He offers us the picture of New York, and we leave the room. He offers us the blank piece of paper, and we burst out into gales of hysterical laughter. Finally, he offers us the $US 100 bill. We instantly sieze it out of his hand and offer him in return a two pound steak perfectly cooked.

If he is merely hungry, our cave man will instantly grab the steak and devour it. If he is a bit less hungry and a bit more intelligent, he will still grab the steak, but he will do something else. He will try with all his might to ask us a simple question. Waving the $100 bill around in front of us, he will want to know: "Where can I get some more of THESE?"

Our cave man friend has no inkling that this particular piece of paper is what we call "money". He does know about "exchange", but he has certainly never encountered a situation where something which he can see no practical or "economic" value in can be so effortlessly exchanged for something he wants. He reckons that we must be pretty crazy to want the piece of paper, but he isn't going to argue, he's just going to enjoy his meal.

Move that scenario forward to January 2007 and pin a PhD on the caveman and you have the mentality of those who think that the production of economic goods is wasteful and unnecessary when all that is required to gain anything one wants or needs is to wave what you call "money" in front of the nose of those who DO produce REAL economic goods.

Ignorance of what money is, of how it was discovered and incorporated into economic life, and of what is required in order for it to function to maintain and improve economic life is RAMPANT today. It covers all "strata" of society, but finds its most virulent peaks in the halls of academe and in the boardrooms of organisations whose sole function is to manipulate money.

This level of ignorance, and its attendant contempt for money, is a product of the "fiat money" era. Since that era began in mid 1971, two generations of Central Bankers, "economists", politicians, bankers, and market analysts and players of all descriptions have grown up. All of them, whether they are consciously aware of it or not, have the attitude that the only thing required to acquire economic goods of any and all varieties and magnitudes is to wave that $100 bill in front of the noses of those who are producing the economic goods.

Americans (and most others in the "developed" world) have good reason to have gained that attitude. Two generations of their professors, teachers, poltical representatives, bankers, brokers, and advisors have explicitly or implicitly assured them that it is true. And most people today, up to and including the "baby boomers" who are now on the verge of retirement, have based their entire adult lives on this assumed fact. None of them can see any difference between "money" and wealth. And Americans in particular have never suffered any repercussions from the fact that their nation has all but ceased to produce GOODS and now produces almost nothing but "money".

The danger that almost nobody foresees is that the day will come when waving those $100 bills around will no longer get you that two pound steak. All it will get you is the gales of laughter that our cave man friend in the experiment experienced when proffering the blank piece of paper. And that day will come when all the hot air exhumed by all the PhDs in all the banks (Central or otherwise) in all the world will no longer be enough to disguise a simple fact. The US is no longer producing ANYTHING the rest of the world wants. That being the case, of what VALUE are these pieces of paper they persist in calling "money"?

Such a bizarre twisting of economic truth could and would never take place in a nation which uses Gold as money. Amongst many reasons for this is the simplest one of all. Unlike pieces of paper or entries on computer hard disks, Gold cannot be created out of thin air. It is in itself a TANGIBLE economic good. It's special distinction over all other economic goods is that it is the most "tradeable" good. As such it has become the good that people want to hold in order to exchange for other goods. THAT IS WHAT MONEY IS. It is a medium of exchange. And in order to become a medium of exchange, an economic good must first be an ECONOMIC GOOD.

When one sees "arguments" like the one presented by our PhD economist being presented and taken SERIOUSLY, one may know that the fate of what is presently used as "money" is sealed. No cave man, or civilised man for that matter, would ever consider the possibility that one could produce nothing and simply "import" one's goods from those who do. It takes a politician, a banker, or an "economist" to harbour such notions.

Gold became a "barbarous relic" in our "modern times" more than three decades ago. Now, the ideas which Gold underpinned in its role as money - freedom and liberty, political and economic - are well on the way to suffering the same fate. Ignorance breeds contempt of a lot of things. The more profound the ignorance, the more contemptible the result.

Whenever a person finds themself with a surplus of spendible/investable dollars, he stands at the blessed crossroads of Decision. "Shall I enjoy the real fruits of this economic game, or shall I merely keep score?"

Ture of every thinking man -- from the hunter/gatherer to the agriculturalist to the industrialist to the entrepreneur -- he knows, right down to the core of his being, that the vital objective in the game of life is toward the obtaining(ownership) and enjoyment(use) of the tangible fruits.

To be sure, the function of money is merely that of digital scorekeeper along the way -- marking out ones POTENTIAL (no guarantee) progress toward an actual realization of fruits at each blessed crossroads of Decision.

Some of the fruits we've gathered at each step along the way:
- - Food
- - Functional (and Fashionable) Clothing
- - Cars and Trucks and Bikes
- - A Home
- - Books
- - Art
- - Toys
- - Tools, Tractors, and other Tangible Capital

Some of the older participants remember this long-past signpost, "GOLD: $100/oz"

Standing at that crossroads, money was society's favorite digit to create and manipulate (hello depreciation), while physical gold was an unprintable asset.

And so, with satisfaction to the core of our being, we made our decision. We bought gold.

Some younger participants remember this more recent signpost, "GOLD: $260/oz"

Standing at that crossroads, money was still society's favorite digit to create and manipulate (ever weaker), while physical gold was an unprintable asset.

And so, with satisfaction to the core of our being, we made our decision. We bought more gold.

Our very youngest participants now may look upon the current signpost, "GOLD: $650/oz"

Standing at this crossroads, money REMAINS society's favorite digit to create and manipulate (unrelenting slide against tangibles), while physical gold EVER SHALL BE an unprintable asset, an item of portable property/wealth.

And so, with satisfaction to the core of our being, we made our decision. We bought more gold.

Good news... YOU determine the quality of your life by the Decisions YOU make at the crossroads. Every moment of every day gives you ANOTHER opportunity to correct your wayward strategy. Life is definitely one example where 'high score' is NOT what matters most -- gather ye fruits while you may!

R.

http://www.financialsense.com/editorials/navarro/2007/0204.htmlIt seems that China will soon be deciding what we manufacture and pretty much everything else we do, as we are quickly becoming little more than a colony (see link) whose titular rulers don't have a clue what's happening or the will to do anything about it if they did.

In Gold We Trust.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_lite$650 / oz sure seems to bring on some serious short action each time it is breached. It's becoming quite a "line in the sand".

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

Hi Goldilox,

I agree entirely that $650 is the final line in the sand. Beyond that lies the great abyss of POG that has rarely been breeched before. In fact, the the entire history of POG, it has closed above $650 a total of only 50 days (27 days in 1980, 21 days in 2006 and 2 days in 2007 so far).

I wonder if when the dollar faction sold very heavily into the market in 1980 if the majority of their sales were sold into the $650-$750 range to get gold under control of the dollar, and if those contracts have simply been rolled forward since that time for a nominal fee / interest. If so, $650 may mark the tipping point that precipitates much of what Another and FOA discussed. Also if so, I wonder which big banks may be holding the bag.

Take care,
PA

http://stockcharts.com/h-sc/uiWhilst it is all good for gold in the coming days, we need to be mindful of what lies ahead (assuming the wheels don't fall off in the mean time)
Comex Gold, rolling through the delivery month, loses it's traction with each passing Oz delivered, whereas Silver otoh, anticipating it's moment in the sun, starts to get all frisky.
The accompanying Ratio Chart identifies how the lead-up and consequent delivery window through March has been good for Silver visavee Gold more often than not ...good luck!

You may have to configure it for 3 yr's to get the drift.

http://stockcharts.com/h-sc/ui?s=$gold:$Silver&p=D&b=5&g=0&id=0...this should be the Ratio Chart.

http://quotes.ino.com/chart/?s=FOREX_EURUSD&v=d1Continental paleface edict: New wampum heap big on sale at 1.30+

http://aslwww.cr.usgs.gov/Seismic_Data/telemetry_data/map_sta_eq.shtmlAs the 6.2 mag quake in Cuba drifts off into cyber-oblivion, it's curious to note the lack of any aftershocks associated with this event.
Almost without exception, a quake of this magnitude produces some form of post-rattle! hmmm?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/05/ccview05.xmlMonday view: The West must handle with care China's growing interest in Africa
By Ambrose Evans Pritchard | 05/02/2007 | Excerpt:
"The new Cold War between China and the United States is taking shape, in Africa. Last week the US Defence Department quietly launched its first military command dedicated to black Africa and the Sahara - until now a forgotten annex of the Pentagon's European and Mid East operations.
Known as "AFRICOM" it is ostensibly designed to fight al-Qa'eda and cope with natural disasters. It is equally aimed at Beijing, a warning that the Communist regime will meet resistance if it tries to bottle up a large chunk of the world's oil, gas, and mineral reserves - not to mention its arable land, the strategic prize a decade hence as food runs short.
Over 10pc of America's oil imports now come from Africa, a figure expected to rise to 25pc in short order. Much of the world's scarce uranium, platinum, chromium, cobalt, and copper are to be found there."

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

February 5 (DowJones, MarketWatch) -- Comex gold futures gained momentum on Monday amid an early firmness in oil prices and geopolitical talk, traders and analysts said. At settlement, most-active April gold was up $4.60 at $656.10.

An analyst at MKS Finance said after the open the yellow metal regained some momentum on firm oil prices and stronger language by U.S. Secretary of State Condoleezza Rice against Iran.

Crude oil at the Nymex traded to a high of $59.95 a barrel - its best level in a month - after a forecast of cold weather for the U.S. Northeast. According to the National Weather Service, U.S. heating demand is expected to be about 20% above normal in the week ending Feb. 10, which will boost consumer demand for heating fuels, the analyst noted.

Analysts at Natexis Commodity Markets said in a research note released Monday that most of the key drivers behind the bull market for gold and for the other precious metals remain in place.

A report last week that Red Kite Management, a $1 billion metals trading hedge fund, wants to extend the notice period for investor redemptions after losses of as much as 15% in January, may further affect metals trading.

Red Kite, run by Michael Farmer, Oskar Lewnowski and David Lilley, asked investors in its metals fund to approve an amendment that would require 45 days notice before money can be withdrawn, according to a copy of a Jan. 31 letter from the firm obtained by MarketWatch.

"All eyes seem to be on whether funds are in trouble with another Amaranth-type sell-off, and given the sell-off in oil and the metals in early January, this would not be a surprise," said William Adams, an analyst at BaseMetals.com.

"However, if the damage was done in January, then this may well be a 'sell the rumor, buy the fact' situation..."

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

http://www.businessinafrica.net/news/southern_africa/614447.htm05-FEB-07
Chinese President Hu Jintao's visit to the African continent offers the potential for more aid, trade and business.

Hu is currently in Namibia, the fifth stop of his African trip after Cameroon, Liberia, Sudan and Zambia.

Cameroon president Paul Biya welcomed Chinese investment in his country and signed several economic agreements with Hu on the first leg of his visit. In Liberia, the goal was to write-off Chinese debt with Hu and sign key infrastructure contracts in return for its mineral wealth.

During his visit to Zambia, Hu visited the Chinese-owned Chambishi Mine in Zambia's Copper Belt region north of Lusaka where a new $200mn smelter is planned.

Some 200 Chinese firms already have investments in Zambia. Chinese firms will operate free of import duties and VAT in the economic zone.

After his visit in Namibia, Hu will be heading to South Africa, Seychelles and Mozambique.

... skeptics are worried that Jintao is on the prowl for a one-sided investment bonanza that will continue to fuel China's rapid growth rate. They say Africa may get the short end of the stick in a skewed trade relationship that has seen the rate of exploitation of African labour by Chinese firms increase in the past decade...

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

"Skeptics"... does that mean "the West"? Since when has the West cared two hoots about exploitation of cheap foreign labor???

Are you holding mere paper? Or mineral wealth? Remember, when lines are drawn in the sand, it's always because it's the "fruit" that matters.

R.

http://www.quamnet.com/fcgi-bin/news.fpl?par2=2∥3=1∥4=20070205091659Spot Gold Outlook Strong, GS Keeps Upper Limit
Dow Jones Newswires - February 5, 2007

http://www.bloomberg.com/apps/news?pid=20601012&sid=ak7I420muT1k&refer=commoditiesFeb. 5 (Bloomberg) -- Jim Rogers, who predicted the start of the commodities rally in 1999, said more hedge funds may collapse after the demise of Amaranth Advisors LLC and losses by metals-trading hedge fund Red Kite Management Ltd.

``There are lots of hedge funds that are going to be in trouble,'' Rogers told journalists at a briefing in Sydney today. He didn't know which funds may be affected or when. ``We're going to see many, many more explosions.'' Rogers also forecast a shakeout amongst some private equity groups.

``I don't know who has got what positions and in what, but I know when some of them start blowing up, it's going to have huge ramifications,'' Rogers said. ``When Amaranth blew up, it drove natural gas down to absurd prices and it was a spectacular buying opportunity for those that were still solvent and had their wits about them.''

Rogers, 64, created a series of commodities indexes and last month predicted oil will rise to $100 a barrel. He's in Australia briefing clients of UBS AG.

``There's going to be a gigantic shakeout when that whole mess starts coming apart. This has to end badly.''

Hedge funds are largely unregistered pools of capital that let managers participate substantially in gains on investments. Hedge funds globally control more than $1.3 trillion, more than double the figure five years ago, according to Hedge Fund Research Inc. in Chicago.

Rogers, chairman of Beeland Interests Inc., traveled the world by motorcycle and car in the 1990s researching investment ideas for his books, which include ``Adventure Capitalist'' and ``Hot Commodities.''

He said he had no money invested with hedge funds.

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

"... NO MONEY invested with hedge funds..."

R.

http://www.iii.co.uk/news/?type=afxnews&articleid=5962481⊂ject=general∾tion=articleMOSCOW (AFX) - Russian billionaire Vladimir Potanin, who controls mining giant Norilsk Nickel, has not ruled out that the metals group could be nationalised by the government, in an interview published in the Russian edition of US weekly magazine Newsweek.

"I hope that the law on private property can be sorted out. I am convinced that the State should resolve the problems that society is incapable of solving by itself, and not take on problems that the business world can handle successfully", he said.

"If that happens, I will not see it as a personal tragedy, but as a change in the business climate."

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

Are you a mine(share) holder, or are you a metal owner? In this era of strategic nationalizations, the free-and-clear metal owners will continue to sleep better than the miners of in-ground resources. Warn your friends. We've been saying this for years, folks...

R.

http://english.peopledaily.com.cn/200702/06/eng20070206_347897.htmlEcuador will not pay "illegitimate" debt, economy minister says - People's Daily Online - February 6, 2006

Roach at Stanley
''...it begs the question of why -- why the developed world is pushing back so hard against the very process of global integration it has so long espoused. Granted, motives are always open to subjective interpretation. But I suspect that on one of the most important, but overlooked issues in the current global debate -- that the rich countries of the developed world are simply unprepared for the stunning successes of an IT-enabled globalization. Lacking in preparation, the developed world is now on the defensive -- and, unfortunately, ripe for a politically-driven backlash.'
Protectionism here we come?

'..one of the great mysteries of the past two years: why the cost of borrowing in the capital markets has remained low even though central banks have been raising rates.
"Rising policy interest rates have had no effect on slowing the expansion of liquidity . . . because increases in short-term rates did not cascade into the pricing of the bigger . . . tranches of the liquidity pyramid," the group says in a research report. "Now new-fangled financial instruments create liquidity independent of central bank control."
Does the above indicate a decoupleing of parts of the economic system, to enough of an extent, that in time it could allow the US to raise interest rates to support the dollar, if some Volcker type moment arrives, and have the liquidity train continue to operate at a lower interest rate? Is there any sense in this speculation?

http://www.mineyourownbusiness.org/about/about.htm10:05p ET Monday, February 5, 2007

Dear Friend of GATA and Gold:

GATA's old friend and world traveler George Roche (he has attended GATA events in Vancouver, New Orleans, New York, and Geneva) reports that the film "Mine Your Own Business," which criticizes the so-called environmental movement and defends the extractive industries, will be shown at noon Sunday, February 18, at the International Dublin Film Festival. Roche will be in Ireland that week, plans to attend the festival and see the movie, and would like to get together then for coffee or a pint or two with any GATA sympathizers in the neighborhood. If you're interested, please e-mail Roche at GRoche8095@aol.com and he'll arrange something.

No one denies that the extractive industries can damage the environment. But the solution is not to shut them down -- soon no one would have a roof over his head or clothes on his back -- but to ensure remediation of the damage by building the price of remediation into the price of the product, perhaps by requiring the extractive industries to post remediation bonds.

To do this the extractive industries have to be given a better chance of making a decent profit, something that will be so much harder as long as central banks are inciting and subsidizing investment houses in shorting all sorts of commodities. That is, if you're sore that, for example, an open pit gold mine wasn't closed up or that a mine's heap leach pad failed from negligence, you might blame the gold price suppression scheme as much as the mine operators, for it is the price suppression scheme that can put unbearable pressure on the industry to cut corners.

Look around: Only prosperous societies can afford environmental protection. Compare, say, Oregon and Haiti -- logging being a sustainable industry in the former even as it was allowed to denude the latter. For subsistence societies don't care how much they damage the environment; all they care about is surviving one more day, the planet be damned. As the extractive industries move to the developing world with its subsistence societies, better prices for commodities become a matter of international social justice. Indeed, the gold price suppression scheme has killed tens of thousands and condemned millions more to poverty throughout the developing world. Blind environmentalism there is just another form of colonial oppression.

You can learn more about "Mine Your Own Business" here:

http://www.mineyourownbusiness.org/about/about.htm

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

@ Rook.

Simple notions of supply/demand only give the "usual" effect where one or the other is held constant, or where the increase in one measure is enough to overwhelm any simultaneous increase in the other. In real life both are moving targets.

Since demand for credit (especially in housing, but also derivativized securitiztionized sausage-debt-obligations) is growing at ABSURD rates, it is hardly surprising that even enormous SUPPLY can be absorbed at higher prices.

The same is happening in the oil markets. Higher prices have not "reduced" total demand (yet). But the rate of increase in demand is off a bit.

A better question might be: what part of the credit-consuming market is "Price inelastic"?

Furthermore, every spring has its breaking point.
Prices, (like earthquakes) lurch. Tension builds then "pops"- (likely to happen soon for POG)

http://www.business-standard.com/common/storypage.php?autono=273759≤ftnm=0⊂Left=0&chkFlg=By Reena Zachariah
Business Standard, Mumbai
Tuesday, February 6, 2007

MUMBAI -- Nearly a month after acquiring 5 percent in the National Stock Exchange, Goldman Sachs has proposed to buy a stake in the Multi Commodity Exchange (MCX), India's largest commodity bourse.

Sources said Goldman Sachs, which holds 7 percent in the National Commodity and Derivatives Exchange Ltd (NCDEX), the other leading commodity bourse, said the MCX buy would be considered an investment and not a strategic acquisition.

An official spokesperson for Goldman Sachs said, "We would not like to comment on market speculations. But there are a lot of things on the company's agenda in the days to come."

Apart from the New York Mercantile Exchange, London Metal Exchange and The Tokyo Commodity Exchange have also initiated talks with MCX.

The talks were being initiated ahead of the publication of final guidelines on foreign shareholding in Indian commodity exchanges. The idea is to firm up plans in readiness for the guidelines.

The Forward Markets Commission has told all commodity exchanges not to change shareholding patterns until the new guidelines are issued.

The shareholders of MCX include Financial Technologies (I) Ltd., State Bank of India and its associates, National Bank for Agriculture and Rural Development (Nabard), National Stock Exchange of India, Fidelity International, Corporation Bank, Union Bank of India, Canara Bank, Bank of India, Bank of Baroda, HDFC Bank, and SBI Life Insurance.

http://news.yahoo.com/s/ft/20070205/bs_ft/fto020520071619273517;_ylt=As8BJYdW8A6TcItVo9VGNnv2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--By John Dizard
Financial Times, London
via Yahoo News
Monday, February 5, 2007

http://news.yahoo.com/s/ft/20070205/bs_ft/fto020520071619273517;_ylt=As8BJYdW8A6TcItVo9VGNnv2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--

Two weeks ago I unfairly profiled the Chicago speculator community. "Profiling," in the sense of accusing or convicting a suspect based on race or general appearances, is wrong, even in the case of such a rich and privileged group as the "locals," or speculators in the commodities pits.

I was describing the practice known as index roll congestion, or "date rape." This involves profiting from the requirement that public investors' positions in commodities indices be "rolled over" from one contract month to another over a known five-day period. The price of the old month's contract is depressed and the price of the new month's contract is inflated. This can be a huge source of profit for those ready to take advantage of the naive public.

In the column, I was correct to point out that index roll congestion costs people who use indices such as the Goldman Sachs Commodity Index something in the order of 150 basis points of return a year. Given that formula-managed commodities index funds have $100 billion in assets, of which GSCI-linked funds account for $60 billion, a lot of money is being lost by the public to someone.

My mistake was to look at a line-up of the participants in trading on the floors of the exchanges and point out the suspects who wear gold chains, mink coats and alligator shoes, instead of the clean-cut, polo-shirted, Harvard graduate working for the famous public company.

Jim Bianco of Chicago's Arbor Trading, understood why I would have made that assumption. "The locals are one of the few groups on the planet who are guilty until proven innocent," he said.

The economic function of the locals, or speculators, in the view of public policy, is to provide liquidity for hedgers who want to offset the risk of a future requirement to buy or sell a commodity. For a price, the speculator commits his capital to taking the risk the hedger is unwilling to assume. Hedgers are supposed to be nice people who act for consumers; speculators are supposed to be non-nice people who wear pinky rings, buy magnums of champagne in nightclubs, run the exchanges and bet against the public.

I had thought that the mountain of index fund money, with its fixed, known periods of buying and selling, would be a source of profit principally for the speculators.

Actually, the problem is that there probably isn't enough speculative capital relative to the huge weight of the index funds. And, one might add, firms that manage the index funds. Firms such as Goldman Sachs.

Locals besieged me with e-mails insisting on their innocence and said that Goldman was likely to be the principal beneficiary from the index roll. I finally did get a response from the firm. First, Goldman pointed out that it was not the only seller of funds -- or notes or swaps -- linked to the GSCI. (It is, however, the largest user of GSCI-linked product). The firm said it was obligated only to deliver the closing price on the reference days for each commodity contract in the index.

That means Goldman knows the size and position of the target it must hit and can, as its people say, "manage our corresponding position". That means that it has to deliver a price at the end of the roll period. If it can cover that obligation at a better price, it will, and pocket the difference.

While Goldman won't disclose just how good a business this is, it agrees the business is consistently profitable. Given that Goldman knows how many contracts it has to buy and sell on certain dates, that in many pits the GSCI is the biggest single factor in the market and that it has many trading hours to cover its positions at advantageous moments, its profitability is not surprising.

The GSCI has not been as profitable for all the investors who use it to get commodities exposure. Last year it lost about 15 per cent on a total return basis. Goldman itself had a record year. The customers' yachts weren't just small, they were under water.

There is no failure to disclose here since Goldman lays out the GSCI's terms and conditions on its website and in customer contracts. The real failure is with the institutional investing community that still does not understand how commodity markets work.

Goldman's people and its shareholders aren't the only winners in the game with institutional commodity investors. As one local said: "Grain companies [and other physical dealers] are winners too because they own storage and are short hedgers."

Also commodities funds that give some freedom to their managers to roll their positions on dates other than when the index rolls take place can earn a significantly better return.

But that requires the investor to concede some discretion to the manager. And too many want a magic, automatic box that prints money. Sadly, that doesn't exist. Unless, that is, you own an investment bank that has an ingenious marketing department.

* * *

S&P to Acquire Some Goldman Sachs Indexes

By John Spence
CBSMarketWatch.com
Tuesday, February 6, 2007

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bCD2CFB80-DB48-49E2-BC8B-80A919E68493%7d&siteid=

BOSTON -- Standard & Poor's said Tuesday it will acquire a commodity index and two stock-benchmark families from Goldman Sachs Group Inc. Financial terms of the deal were not disclosed, the McGraw-Hill Cos. unit said. S&P is acquiring the Goldman Sachs Commodity Index, the Goldman Sachs Sector Indexes, and the Goldman Sachs Technology Index, and six technology sub-indexes, according to a statement.

http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&b=3&g=0&id=p23774335652Jimmy Rogers made some commentary recently on "when oil corrects" .....

Today or yesterday WTIC crossed over its 50 dma ....

If crude is a bearing on the outcome of the precious and
If symetry plays out in this reverse head and shoulders
chart pattern sizing up in WTIC

THe road to the races might be a little subdued until after tax season is over

........that is barring any mitigating circumsatances and there could be many ....which might cause CRUDE RECOVERY to launch in an unprictable manner ....independenct of TA indicators

Thats my ground hog analysis .... perhaps 2-3more months of consolidation in here

We can also anticipate and look forward to the prospect of those MITIGATIONS....dropping by

You already know about the unregulated derivitive issues, my question is, have any of you come across any logics, or come up with your own, on the subject of, well, I know some make the case of why haveing these financial instruments is good for us at this point, but what is the planning by the big boys for after a financial -accident-?
The fed must have come to some figureing before they went the road of derivitives this way. OK, perhaps they saw it as a way to extend fiat, but a breakdown must have been assumed by them as happening eventually, so what does that foresight consist of? What is it that allows them to so casually steer a planet full of people in this risky way?
Putting aside "madness", as an explanation, or -blind greed-, and assuming that they are not just "winging it", my limited (to qoute from the movie Madagascar,) "the brain type thingees in my head" cant see their thinking.

"Hedge funds � as the Long Term Capital Management meltdown showed us in 1998 - are almost entirely unregulated since there is no regulatory body either with access to data in relation to their transactions (particularly "off-exchange") or with the capability to take enforcement action over off-shore entities typically used by hedge funds.

Due to the lack of transparency in "off-exchange" trading, oil producers and consumers do not even know that they are losing - a phenomenon which J K Galbraith memorably described as the "bezzle". However, while oil producers and consumers have now woken up to the bezzle, the problem they have is what they can do about it."

http://www.usagold.com/cpmforum/archives/3020071/default.htmlDuring the past week one Eurosystem CB was a gold seller under the terms of the CBGA while another was a buyer of gold coins. The net result was a decrease in Eurosystem gold and gold receivables by a value of 39 million euro.

Meanwhile, the net position in foreign currency was allowed to decrease by a value of 100 million euro.

Gold reserves stand at EUR 176.7 billion.
Foreign currency stands at a new low of EUR 145.3 billion.

Although the next MTM operation is not until March 30th, were it to be done today the value of those Eurosystem gold reserves listed above would jump a further 5% higher based on gold's price gains since the previous revaluation one month ago.

For a brief overview of the recent (prior three weeks) activity regarding the significant ongoing discharge of foreign paper (-3.4 billion), look at last week's update at the given archive URL, and scroll to

TownCrier (1/30/07; 12:44 - msg#: 151641)

R.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/06/cnmerr06.xml Merrill sounds alarm on global liquidity | Business | Money | Telegraph | Ambrose Evans Pritchard - 2/06/07

It's hard to get your complete context with no referencing of sources. Are you quoting yourself in yesterday's postings?

It is interesting that when we look, we see the train racing towards the end of the track that hangs over a bottomless ravine. Surely, it will eventually meet the end of the line and there will be a tragic, emotionally packed, fiery show that all others had no idea they'd bought a ticket to see. But, seemly, the end of the track is continually extended through application of derivatives as they constantly come into play skewing the time-space window that we look through. Derivatives, held by someone that is legally accountable and subject to punishment, are treated completely different than derivatives held by those that are unaccountable (the big boys). The motives of the unaccountable can clearly been seen directly related to the business cycle, or the milking of the populous, but more importantly as a tool to make things �appear� as if they are functioning correctly.

My advice is to watch the derivatives with a keen eye towards how they are applied and how they function but know that when the system really does start to breakdown, it will be like turning up the pain level for the average Joe. Life will get harder and the average Joe will tearfully give up what he thought was his hard earned assets because of legal debt obligations that he will not be able to afford. To prepare, position yourself to reduce you legal obligations and increase your store of non-derivatives. When the price of gold jumps, the rest of the world effectively deflates against the metal. If a house price jumps from 350k (@ 538 ounces gold), to 450k (@ 150 ounces gold) you're going to be in a position to go investment shopping for the next bull market if you're holding metal.

Time is on the side of he who sees that derivatives are used to hold commodities down and functioning. As long as derivatives do this, one should gather the undervalued commodities as an investment option. But always, get out of debt to free yourself from undesirable obligations .

"Time is on the side of he who sees that derivatives are used to hold commodities down and functioning."

***********

Many who trade in the above-board, transparent derivatives markets wonder how much the prices of many commodities (including precious metals) have been inflated (as opposed to held down + functioning) with the increasing influence of huge amounts of capital invested by the "long only" commodity funds. These relatively new to the commodity markets buyers have probably skewed prices enough to have become a market metric all by themselves.

I guess when I think of derivative players, I think of commodity funds along with those that counter commodity funds. For every player there is a counter player. What is the counter player's motive?

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=DX&a=D&z=610x300&d=LOW&b=LINE&st=A comparison is slightly non-valid as one is linear, the other exponential however, what IS valid is the "current-future" correlation of Comex (Paper) Gold with one OR the other (Y or DX)
Sooo ...we are quickly approaching that point in the month where "current" Gold succumbs to quazi-future pricing as the deliveries get done.
What this will (imo) mean is Gold will give up on tracking (or reacting to) DX (current) and will instead track (future) Yield.
If Europe has it's way, this will mean Gold:Yield will rise, as will DX however, US interests seem intent on Yield:DX dropping ...as will imo Gold.

Good news? ...Ag:- Our Sword of Damocles represented by the cloud build-up at (roughly) 48 on the Au:Ag ratio chart needs to be resolved. I'm thinking a "reasonable" outcome might find it at high 30's within a month.

Educated guesswork ...totally not applicable if wheels fall off.

http://www.ft.com/cms/s/5769e350-b546-11db-a5a5-0000779e2340.htmlMarket Insight: Danger of equities being infected by risk mispricing
By Tony Jackson
Published: February 5 2007 18:31 | Last updated: February 5 2007 18:31 -- Snippits:
"The past few weeks have brought a drumbeat of warnings from central banks and regulators about the dangers of a credit crunch � or a "reappraisal of risk", as one of them more delicately put it. The odds of such an event or its timing are unknowable. But what would it do to other asset classes, equities in particular?
Before we get to that, notice that those august bodies have something of an agenda. Central banks cannot individually control the tide of global liquidity that is so deforming the credit markets. And neither they nor the regulators know where the risk is sitting in the financial system, so they cannot control that either. Their subtext, therefore, is: if things go pear-shaped, don't blame us. We did warn you...

The real worry is that last year it was widely assumed that big public-to-private deals were off the table: that the investing institutions had been been burnt too often.
Now that idea seems to have been dropped. Any stock is a bid target again.
If so, stocks will increasingly be priced according to the risk levels underlying the Sainsbury proposition. For many months, the credit markets have been asking � begging � for trouble. It would be a pity if equities wound up doing the same."

http://www.mises.org/story/2461SNIP :

"The performance of the US economy in the 20th century owes much to the predominant role of the US dollar in the international monetary system, and a large part of attaining this role was the result of the political and military supremacy that the United States had gained after World War I. The position of the US dollar in the world today represents a major underpinning of the prosperity at home, and provides the basis for the expansion of the US military presence around the globe."

----------------------------------------------------------------------------------------------------------------------
Flatliner, any thoughts on this article ?

http://www.mises.org/story/2462
"When economic systems grow in complexity and diversity, central planning and interventionism become exponentially inefficient, and the need arises for more decentralized coordination mechanisms. Modern economies, and in particular modern financial markets, have become too complex for active central banking. Monetary policy cannot be improved by more research and better central bankers. What is needed is something quite different: a monetary system that can do without an active central bank."

Gee, I wonder what THAT would be.

When Merrill puts out a statement like that, you can pretty much bank on the alternative scenario. What they are saying is that the liquidity of industrial metals stock is drying up and they can't get enough in size to satisfy their "good" clients. Just trying to free some up...for purchase.

Spot on, if viewed from a particular vantage point. My lazy boy, non-educated, internet theorized point of view is that the �prosperity at home� is directly related to the function of the dollar in Open Public Markets around the world. The function of the dollar in Open Public Markets is enforced by laws, and more importantly, backed up by the military. Because dollars support the military, a strong dollar empowers a military that can enforce dollar settlement (circular). Ultimately, the forced function of using dollars as the settlement currency completes the function of the currency � much like income taxes do for local currencies � that gives the inflation taxation power to the dollar controllers and leaves everyone else feeling shafted through taxation without representation.

Now I will apologize, for the paragraph above came into being before venturing off to read the article. It is now time to follow the link and see if there is something new for me to learn.

http://biz.yahoo.com/ft/070206/fto020620071349313629.html?.v=1Goldman Sachs Sells Top Commodity Index

By Kevin Morrison
Financial Times, London
via Yahoo News
Tuesday, February 6, 2007

Goldman Sachs has agreed to sell its GSCI commodity index to Standard & Poor's for an undisclosed amount.

The move will give S&P a potentially powerful influence on commodity markets as any changes to the index composition can have wide ramifications for underlying commodity prices.

The GSCI, the world's leading commodity index, has about $60 billion tracking it. Most of these funds are managed by Goldman, which is the largest commodities trader among investment banks. The management of these funds will not change as a result of the transaction. Funds trading the index have become the most popular route for investors wanting exposure to commodities.

However, the GSCI underperformed last year, falling about 15 percent, even though most of the 24 commodities in the index recorded a price increase. The fall was mainly attributable to the higher forward prices for crude oil futures versus the spot price. This meant investors rolling forward their exposure to oil futures had to pay more than the price they received for selling the spot contract before expiry. This is known as the negative roll yield.

The GSCI, which was launched in 1991, under-performed against other commodity indices including those provided by Dow Jones-AIG and Deutsche Bank.

"The sale of the GSCI is a strategic decision to reduce our management of indices. It has nothing to do with the underperformance last year of the GSCI," said Goldman Sachs.

Last year, Goldman Sachs attracted criticism for the reconfiguration of the GSCI when it dropped the Nymex unleaded gasoline futures contract and did not replace it immediately with another gasoline contract.

The change was a big factor behind the steep fall in the price of unleaded gasoline, which accounted for more than 5 per cent of the GSCI before its exclusion.

David Guarino, a spokesperson for S&P, said it had no plans to change the configuration of the index, which has been criticised for being too weighted towards the energy sector.

Goldman will also sell its sector indices for healthcare, financial services, utilities, consumer companies and cyclical industries and the Goldman Sachs Technology Index. Goldman will license the GSCI from S&P so it can continue to provide investment products to clients based on the index. Licensing of the GSCI is the only revenue stream for the index.

S&P, best known as a credit-rating agency, said that once the acquisition was completed, it would not continue its two existing commodity indices.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lynn&sid=aiHst3LSdON0Europe Suffers Worrying Wave of Financial Chaos: Matthew Lynn
July 5 (Bloomberg) --Excerpts: "First Iceland. Now Turkey. And Hungary is looking wobbly.
Europe is increasingly encircled by financial woes. Its emerging markets are being hit by a wave of speculative selling, pushing currencies into freefall, and prompting big increases in interest rates.
The worrying questions now are: Will those crises turn out to be contagious, as they did in Asia in the last decade?
And, if that is a risk, is there anything the rest of Europe should be doing to support those economies?"

"European Contagion
True, by the end of the week the markets were rallying as it looked as if the Federal Reserve may be coming to the end of the current round of interest-rate increases. And while all the emerging markets have been volatile, it is around the peripheries of Europe that the worst of the turmoil is being felt.
For the rest of Europe, trouble in markets such as Iceland, Turkey and Hungary has two important consequences.
First, it might be contagious.
In the Asian financial crisis of 1997, crashes rippled out from one country to another in a domino effect. As investors lose confidence in one nation, they start to question the finances of another. Very quickly, a whole region is in trouble.
There are plenty of differences between the Asian crash almost a decade ago and the volatility of the past few weeks --yet there is little doubt that a domino effect is emerging. When will it stop? Nobody can say for certain...

Intervention in the markets is notoriously tricky. It ends in failure more often than not. The trouble is, doing nothing may not be a very attractive option either."

http://news.goldseek.com/CliveMaund/1170780898.php5:20p ET Tuesday, February 6, 2007

Dear Friend of GATA and Gold:

Gold market and technical analyst Clive Maund's new commentary asks the musical question: "Gold price manipulation -- Does it matter?" He concludes that the answer is no more important than whether the chewing gum loses its flavor on the bedpost overnight.

But Maund's commentary itself is important for signifying that manipulation of the gold market is increasingly accepted as a given by analysts, if only grudgingly, since, of course, manipulation makes a mockery of analysis and analysts alike. Indeed, technical analysis of a manipulated market is worthless if it takes no account of the manipulation. That is, despite their conscientiousness, people like Maund have been largely wasting their time.

In his new commentary Maund sounds just like another technical analyst, Dennis Gartman of The Gartman Letter, who even just a few days ago was not only expressing indifference to manipulation of the gold market but also was arguing fatuously that suppression of the gold price should be welcomed by gold advocates and investors because it gives them a chance to accumulate more metal at a discount. Of course this opportunity does nothing for those who are already fully invested in gold and shares of gold mining companies and want fair valuation of their investment now. Nor does this opportunity avail those gold investors who will die today or tomorrow or soon after having been long deprived of fair value for their investment. For manipulation of the gold price expropriates ALL gold investors EVERY day.

Maund writes that the gold price suppression scheme is sure to be beaten by the market eventually. Maybe, but eventually really isn't soon enough. And Maund fails to note the purposes of the gold price manipulation outside the gold market -- the deception of investors in stocks, bonds, commodities, real estate, and everything else.

Those who have been exposing the manipulation of the gold market may be glad that Maund is coming around a bit. But it's really not enough if Maund himself is starting to figure things out. There's still a whole world that may not be as complacent about its screwing as Maund is.

In any case, you can find Maund's new commentary at GoldSeek here:

http://news.goldseek.com/CliveMaund/1170780898.php

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

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

February 6 (Reuters) -- U.S. gold futures ended higher for a second straight day on Tuesday, boosted by a weaker dollar, rising oil prices and a firmer base metal market, and traders said the precious metal could retest its peak reached last week.

Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange settled up $2.60 at $658.70. The contract hit a session high of $663.70 in the morning as U.S. crude oil touched a one-month peak of $59.99 a barrel. However, gold later erased early gains as it dipped as low as $653.0.

Greg Weldon, chief executive of weldononline.com, attributed gold's pullback to the dollar's weakness. "The global monetary situation right now remains very stimulative to gold," as a result of the lower short-term rate environment and increased money supply and credit for many economies around the world, Weldon said. Weldon also cited the weaker interest rates of many currencies compared with the U.S. dollar.

"That really does provide the impetus for people to want to own gold," he said.

The euro extended its gain against the dollar by midafternoon, while the Japanese yen slipped after U.S. Treasury Secretary Henry Paulson said the yen's value is set by market fundamentals, suggesting the U.S. government sees no problem with the yen's weakness.

An ailing dollar tends to prop up dollar-denominated assets like gold in overseas markets as speculators take advantage of price differentials.

"We were up with the strength in crude (oil) this morning and with the strength in base metals as well and the weakness in the U.S. dollar. They all were contributors to our upside momentum," said one COMEX floor trader.

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

http://www.mineweb.net/gold_silver/618887.htm06-FEB-07

CAPE TOWN (Mineweb.com) -- Respected metals price and currency forecaster Dr. Martin Murenbeeld Tuesday predicted a stronger gold price in 2007, an overvalued U.S. dollar currency, limited supply and higher gold investment demand.

During a presentation at 2007 Mining Indaba in Cape Town, Murenbeeld, Chief Economist of Canada's Dundee Group, forecast a 2007 gold price ranging from $674 to $707 to $755 per ounce.

He asserted that the U.S. dollar exchange rate was significantly overvalued, ranging between 15% and 35%...

He asserted that international U.S. dollar reserves were excessive as $4.8 trillion in currency reserves were estimated to be held globally. Asia now holds more than half of the world's currency reserves.

"Diversification from U.S. dollar reserves would do wonders for the gold price, even if Asia does not increase their gold investments to an unlikely 15% of reserves, but only decides to buy a portion of the 500 tonnes of gold annually available from the Central Bank Gold Agreement (CBGA)," Murenbeeld said.

Also supporting the gold price is OPEC's current account surplus that is rising � putting great pressure on the organization to diversify...

"Indications are that there will be further diversification away from dollars, as there are fears of further dollar currency declines and geopolitical trends, such as anti-US sentiment in the Middle East, do not exactly support the currency," Murenbeeld explained. "But other markets are not cheap, and gold is now cheap at ten barrels of oil for an ounce and in terms of the cost of financial assets."

U.S. monetary policy is likely to be eased in future, as budgets are stretched as the baby boomers retire, causing fears that the US economy will slow down, he said.

Murenbeeld said that gold price cycles generally lasted a minimum of 10 years, and that he was bullish on the price for at least the next four years. However, he cautioned, that one had to remember that a counter year occurred in each 10-year cycle...

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

No comment.

R.

http://www.atimes.com/atimes/Global_Economy/IB07Dj01.htmlRISKY BUSINESS
Another nail in the US dollar's coffin
By Jephraim P Gundzik - Feb 7, 2007 - Snippit:
"Growing political instability in the US will weigh heavily on the dollar during 2007. This weight, combined with growing political pressure for dollar devaluation and a slew of negative economic factors, is likely to prompt significant dollar depreciation against most other currencies. The dollar's decline will help send asset values in the US sharply lower and precious metals prices soaring."

Russia, Iran, Qatar to Assess Need for Gas OPEC in March
http://www.mosnews.com/money/2007/02/06/gasopec.shtml

War on energy currency continues
-----------
U.S. to create new military command for Africa
http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2007-02-06T165225Z_01_WBT006532_RTRUKOC_0_US-USA-PENTAGON-AFRICA.xml&src=rsse.com

Resource wars - Obviously targeting Chinese entry to Africa

China, Africa, and Oil
http://www.cfr.org/publication/9557/
-----------
New Russian Oil Pipeline to Bypass Belarus
http://www.mosnews.com/money/2007/02/06/newpipeline.shtml

"The crisis ended on Jan. 12 with a deal in which Russia agreed to cut the duty on oil exports to Belarus, while Minsk promised to share with Moscow a substantial amount of the profits from the refined oil products it sells to Europe. However, as MosNews has reported on Monday, Minsk decided to raise oil transit duties for Russian oil by several times, making export of crude through Belarus economically unfeasible."
---------
Head of Russia's Largest Oil Company Says Crude Exports Must Be Stopped
http://www.mosnews.com/money/2007/02/06/crudeexportstop.shtml

"The president of Russia's largest private oil company Lukoil said on Tuesday, Feb. 6, that all Russian crude must be refined inside the country."

"What is the counter player's motive?"

*******
My understanding of the markets; there are many producers and endusers who buy or sell commodities (including the precious metals) in order to lock in profits OR control costs + expenses. True hedgers do NOT look or expect to profit from futures or derivatives.

Everyone else is there to make money. Those "long only" funds that I refered to earlier hold long positions + will continue to do so until + unless investors withdraw funds.

Thanx Flatliner, the quotes were not mine, you have to be right, in the murk of the derivitive world, the big boys will watch out for themselves.

Indonesian Mining Stalls

Disputes Over Control
Halt Development Steps,
Pressure Commodities

By Tom Wright and Patrick Barta
The Wall Street Journal
Wednesday, February 7, 2007

JAKARTA, Indonesia -- Indonesia has some of the world's largest reserves of gold, coal, nickel, and other valuable commodities, many of which have seen their prices soar in recent years. Yet mining companies haven't broken ground on a single large new mine here since Asia's 1997-98 financial crisis.

The reason: a fight between national and local authorities for control of the country's natural resources. That battle, part of a wider struggle for local autonomy in Indonesia, could have important implications for global mining companies and world commodity prices in the years ahead.

Indonesia isn't the only country that's struggling to get mining projects on track. Other promising mining centers, including Mongolia and the Democratic Republic of Congo, are confronting similar debates over who should benefit from resources.

Whether these countries can get new ventures under way will be crucial in determining if commodity prices remain high for several more years or continue slipping as some have in recent months. Copper, for instance, is down more than 25% over the past six months, in part because of expectations of weaker global economic growth, though its price remains high by historical standards.

Opening more of Indonesia's major deposits could add significant new commodity supplies to the world market, especially for in-demand raw materials such as nickel and coal. Rio Tinto Ltd., for instance, wants to build a $1 billion nickel mine on Sulawesi island, and estimates output could reach 46,000 metric tons a year. A large development like that could help reduce pressures at a time when nickel is near record prices. But the development remains on hold as Indonesia tries to resolve its regulatory problems.

Mining has been one of Indonesia's top industries for foreign investment, and the windfall from selling rights and taxing profits on new mines would be a badly needed economic boost -- if the country can just determine who gets the proceeds.

For more than 30 years, there was little to debate. Indonesia's authoritarian former leader, President Suharto, kept a tight grip on mining, selecting foreign investors and setting royalties and taxation regimes by decree. Investors such as Freeport-McMoRan Copper & Gold Inc., a U.S. company that in the 1970s began operating one of the world's largest gold and copper mines in Indonesia, enjoyed the certainty of this system.

But after Mr. Suharto was driven from power in 1998 and democracy was established, local authorities across the 4,800 kilometer-long archipelago of more than 13,000 islands began to demand a larger share of the wealth generated by minerals, oil, and gas.

The resulting friction between Jakarta and outlying regions has increased uncertainty over who is in control, deterring foreign investors. In some areas, small-scale mining operations mushroomed without central government sanction, and some provinces levied illegal taxes on mining projects, the central government says.

The central government has been trying to finalize a new mining law it hopes will settle such issues. But the process has bogged down amid disputes, many of them revolving around whether the central government or local governments closer to the resources should set terms and conditions for mining operations.

Politicians concede the law is now unlikely to be enacted by Parliament before the end of 2007. The draft law is now before a parliamentary committee, which has discussed only about a fifth of the bill's 414 provisions since it began deliberations in January last year.

In the meantime, Indonesia's mining industry "is going nowhere," complains Priyo Soemarno, executive director of the Indonesian Mining Association, whose members include Rio Tinto as well as other foreign and Indonesian companies. "We need somebody strong to say, this is right, this is wrong," to provide clarity for mining companies. "It has to be done quickly."

As politicians squabble over the law, international mining companies are keeping potentially large projects on hold. This includes Rio Tinto's nickel venture. The law could also affect BHP Billiton Ltd., which is considering developing two new coal mines on the island of Borneo.

The delays mean Indonesia is missing out on a golden opportunity. Mining companies spent a record $7 billion on exploration globally in 2006, Metals Economics Group, a Canadian advisory firm, said in a report. Countries such as Russia and China attracted significantly greater levels of investment than in previous years, the report said.

By comparison, exploration outlays in Indonesia have dwindled. Before the Asian financial crisis, local and foreign companies spent an average $40 million each year on exploration for new mines in Indonesia, according to PricewaterhouseCoopers. That figure had slumped to $7 million by 2004, a tiny fraction of the $1.6 billion spent that year on new mine exploration.

Since President Susilo Bambang Yudhoyono took office in 2004, he has tried to cut Indonesian red tape and attract more foreign money to the resources sector. He has made some headway, most notably in resolving a prolonged deadlock between Indonesia's state oil company and Exxon Mobil Corp. to develop the $2 billion Cepu oil field in Java.

But mining executives and analysts say Mr. Yudhoyono's efforts are being undermined in Indonesia's convoluted bureaucracy, a problem compounded by the unresolved power struggles between Jakarta and local governments. "There is a disconnect between what the leadership wants and what others want," says Alex Gorbansky, managing director of Frontier Strategy Group, a Cambridge, Massachusetts, advisory firm.

The draft version of Indonesia's new law would give provincial authorities the right in some instances to issue licenses directly to foreign investors and oversee mining projects.

Indonesia's Energy Ministry, which drew up the draft, says the law is in line with legislation passed in 1999 that devolved more political and economic clout to the provinces to reverse the steady accumulation of power in Jakarta during the Suharto era.

But critics, including some big foreign and local mining companies, fear giving power to local officials who lack expertise in regulating mining and have little knowledge of international commodity markets will make the system unworkable.

Leaving decisions to local governments would also give more power to Indonesia's expanding cadre of domestic mining companies, foreign and local miners complain.

Charlie Lenegan, a managing director at Rio Tinto, which began talks with the government in 2005 about the Sulawesi nickel project, says the tug-of-war between local and central authorities has created problems.

Rio Tinto, he says, has faced various tax requests from different layers of government, making it difficult to assess the overall costs of the project. The Anglo-Australian company would like to see a new draft law that allows large, foreign investments to establish individual, long-term contracts that settle outstanding issues related to a mine in a single document.

"We're saying to the government of Indonesia, you have to look at taxes as a whole package, not from multiple sources," Mr. Lenegan says.

The debate over who should control resources isn't the sole obstacle to foreign miners seeking unfettered access in Indonesia. In the case of Rio Tinto, the Forestry Ministry has declined to provide anything more than short-term permits for work in protected forest areas. The Energy Ministry says Rio Tinto should get the permits, but there is little sign the disagreement between ministries is close to a resolution.

http://www.chicagofed.org/publications/fedletter/cflfebruary2007_235a.pdfHere is one economist's solution to the dilemma facing the US Mint regarding the intrinsic value of the 1 cent US coin exceeding its nominal value.
snip:
"The traditional solution since medival times is to debase the threatened coin, that is make it of a cheaper material.This cannot be done under current law and congressional action is required to redesign our coinage. Another solution is to discontinue the one cent denomination and rebase pennies to be five cents."
"The new value would be instantly established by the Treasury's standing ready to exchange 20 pennies for a dollar bill"
Author Francois R. Velde senior economist writing for the Chicago Fed Letter (pdf)

R.Powell, Thanks for your continued important imput. You mention derivitives used for commodities, I know I will reread your posts to more fully learn about that. I guess I have been reacting to the reading I have done on the debt derivitives. The trillions of that stuff that give so many writers the (again with the movie Madagascar..) heebe jeebies.

Pennies from Heaven. The throw aways not worthy to pick up off the ground. Twenty coppers to the dollar. Wow! Suddeny pennies will be worth something again but will the public see that the dollar is only worth 20 cents or less? Will they change rolls of nickles, dimes and quarters for pennies? Just having fun with this thought ;0)
Good to see you post.

I am looking at my penny jar. Hmmmm.

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

That twenty pennies for a buck sounds great to me. My penny jar is what people used to call a steamer trunk, with a small hole drilled through the top. That's there so I can dump my pennies in without having to open the top. It is now, after decades of contributions, too heavy for one man to move.

I guess a much more favorable currency exchange rate is what precious metals (and pennies!) savings is all about, with the added value of having something of value for the unlikely event that a gold or silver coin is worth more paper than one man can move.

be glad to see em change pennies to nickels, (got 2-53 gal steel barrels full of wheaties plus 3 others full of newer pennies) could get me a heckuva nice piece of bottomland for the exchange rate to frn (federal reserve notes) but dread the rolling process to take em to local bank!!

@ otish mountain,

"Law" is not the barrier to debasing the penny any further, as the FED RESERVE act proves. They can debase anything they want with enough clout.

The problem is two-fold.

1) There is no commodity left that can replace the current alloys cost-effectively. Most of the copper was already removed over 20 years ago.

2) The dollar has been debased to the point that it is no longer worth the effort to transact business at the granularity of 1/100 of a dollar - thus the "penny" trays in many retail businesses.

Hard to believe that in a Society "protected" by the FED inflation fighters, we are discussing the problem of "over-valued" coinage.

The only solution might be a third-world style dollar revaluation, that revalues the coinage on a different scale than paper and electronic assets, or discontinue coinage altogether. This fits well into the "electronic only" money dreams of the NWO and banksters. If "wealth" can only be defined by their "virtual decree", then only the "in crowd" will ever have access to it. Any dissenters will have their assets frozen and "confiscated" as contraband.

Who needs a Constitution once "permission to buy and sell" exists only at the "pleasure" of the Emperor? At that point, owning gold or anything without "state permission" could easily become "criminal", just as squatting on unoccupied land that was bequeathed to some absentee Noble by some Conqueror King still is in many parts of the world.

The media is darn quick to criticize Chavez for re-grabbing assets from foreign corporations, but mostly because he is voiding the usurous "contracts" that were initiated by the IMF and their "economic hitmen" to do the same thing themselves. "Do as I say, not as I do".

It's true that he is offering no "ownership" solution. We probably shouldn't expect it, since the foreign corporations and colonial churches have helped themselves to third-world land and resources for centuries, placing their own corrupt military dictatorships in power to maintain "lawn order". It's "business as usual".

Goldi;
Agree with your last post and have pondered the horrors of a cashless society.
We all watch intensely for a sign or indictions of the crumbling of our financial system. Study hedge funds, derivatives, watch currencies, price of oil, wars. How ironic it would be if the lowly penny was the catalyst which causes the cascading of a currency melt down.

slingshot;
Hey Buddy still here most everyday. Take care.

http://quotes.ino.com/chart/?s=FOREX_EURUSDSome serious "management" going on this eve in e-Bond
land as Euro fends off a run at 1.30. Gold caught up in the crossfire as of this. Will come out the other side smiling I think.
No biggie!

@ otish moutain,

The penny, IMHO, is no tipping point, as the issue revolves completely around the "value", or lack thereof, of the dollar itself.

I see it more as an important warning sign along the trail. We've seen the same thing in other coinage: 50 Peso pieces, $20 gold pieces, silver dollars and fractions, etc.

If we think electronic voting machines can empower some nasty shenanigans, wait until you see the opportunity for abuse in a completely electronic marketplace - especially one where encryption is outlawed, without first giving some "authority figure" the "keys" to the back door.

Gold may well offer the option to be a "criminal currency", but unfortunately, that is BECAUSE it offers the alternative of a free, non-virtual wealth, NOT just an expression of someone else's power over society.

Just as 100% freedom is only found in chaos, 100% security is only found in complete subjugation. Where on that curve are we heading?

my own prediction: US will launch war with Iran on Feb. 16th 2007 at 6:15 pm.

There is a new moon from Feb 15th through the 18th. Friday at 6:15 pm is the point of maximum dis-array of the Eastern Establishment. At 15 minutes before the "nightly news" broadcasts, the news people cannot do anything except say that "war is on". It takes until Sunday morning until the pundits can gather. The weekend makes it difficult to raise voices against the newest war over resources.

Using logic like this, I was able to predict the exact time to the minute of the start of Iraq War I.

Fasten your seatbelts. This one will be a very rough ride. When it is all over, it will probably be treason to say it was all a mistake. Let me take the opportunity to say so now.

http://www.ynetnews.com/articles/0,7340,L-3360816,00.html@ White Rose

War with Iran? Rumsfeld is out and Cheney is down. Aside from some token rethoric, the recent and novel policy statements of the White House signal diplomacy and a libertarian economic bent. Ron Paul should be proud.

Besides, who would want to attack the chaps that are about to announce a cure for AIDS? See the link above. Well, OK, the Israelis maybe:
http://www.willthomas.net/Convergence/Weekly/Israeli_Nuclear_Strike_On_Iran.htm

If this is the case, this implicates that a discussion about the international monetary system and gold is a 'political discussion' ?

Rented this movie the other night where Selma Hayek and Penelope Cruz play Mexican Robin Hoods who have been successfully robbing Mexican banks that have been taken over by American counterparts and stealing farms from the people. The American bank convinces the Mexican Governor to move its gold to Texas for safety. Penelope (the farm girl) tells Selma that its OK that they move the gold because "we'll have all the money". To which Selma (the European educated sophisticate) responds that it's the gold that gives the money value---without the gold its just paper-stupid.

The writers must have been reading USAG. Anyway it was nice to see this concept on the screen. The more seeds that are planted, the more crops that will grow.

Noble1

http://biz.yahoo.com/ap/070206/bolivia_miners_protests.html?.v=1By Dan Keane
Associated Press
Tuesday, February 6, 2007

LA PAZ, Bolivia -- More than 20,000 miners from across Bolivia marched into La Paz on Tuesday, tossing bits of dynamite that sent booming explosions echoing through the streets in a protest of President Evo Morales' plans for a steep hike in mining taxes.

The hard-hatted miners whistled and chanted as they filed through the center of the capital city in the protest against the tax proposal, which they say would unfairly burden hundreds of small independent miners' cooperatives.

Police said they had confiscated some 284 sticks of dynamite from the protesters, along with hundreds of detonators and rolls of fuse -- all sold in Bolivia without restrictions.

After negotiations with the miners Monday night, the government announced that the cooperatives' taxes would be frozen at current levels until further notice. The proposed tax increase would be directed instead at larger private mining companies operating in Bolivia, officials said.

But the concession failed to deter the thousands of miners already gathered in La Paz's poorer twin city El Alto from marching down the hill into the capital Tuesday morning.

The tax freeze "seems reasonable to us," Interior Government Minister Alfredo Rada said at a news conference Tuesday. "We hope that this proposal will not continue to be met with intolerance and irrational actions like those of the cooperative miners this morning."

The miners' cooperatives argue that the government should not penalize their labor with higher taxes but instead focus on the mineral dealers who buy and sell their ore.

"We have asked the government not to impose this tax," Andres Villca, leader of National Federation of Mining Cooperatives, known by its Spanish acronym Fencomin. "Instead, we have asked them to look for a way to control the sale of the minerals, which is the fundamental part."

Rising international metal prices, fed in part by spiraling demand from China, have doubled the value of Bolivia's mineral exports, from $547 million in 2005 to over $1 billion last year, with cooperatives accounting for just over a third. The metals -- mostly zinc, silver, gold, and tin -- together represent Bolivia's largest export after natural gas.

But the Bolivian government collected only $45.5 million in mining taxes in 2006 and aims to dramatically increase its collections this year, perhaps to as much as $300 million.

The proposed tax increase is a first step toward Morales' announced goal of "nationalizing" Bolivia's mining sector, though how the process will proceed beyond the tax increase is unclear.

Bolivia's extensive mineral deposits are already owned by the state, which operates a handful of mines through state mining company Comibol. The rest are mined through concessions granted to the cooperatives or to international companies such as U.S.-based Coeur d'Alene Mines Corp. and Apex Silver Mines, Limited.

Morales has said that any concessions left idle or lacking in investment should be returned to the state.

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

Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
USAGOLD-Centennial has over three decades of experience in the field!

http://news.yahoo.com/s/nm/iraq_usa_cash_dc;_ylt=Av7gdHW2aTiIYET3IakldLPMWM0F;_ylu=X3oDMTA3ODdxdHBhBHNlYwM5NjQ-Spread the inflation tax to the corners of the empire the crude and simple way: just fly out loads of cash.

HIGHLIGHTS:
"The U.S. Federal Reserve sent record payouts of more than $4 billion in cash to Baghdad on giant pallets aboard military planes shortly before the United States gave control back to Iraqis..."
&
"Bills weighing a total of 363 tons were loaded onto military aircraft in the largest cash shipments ever made by the Federal Reserve..."
&
"The money, which had been held by the United States, came from Iraqi oil exports..."

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

This very effectively illustrates how the "exorbitant privilege" exists in which the U.S. has been able to simply print (limitless supplies of) its own money to balance/offset our trade deficit from our net-surplus imports of goods and services.

Without requiring too much thought, you instinctively know that this political asymmetry will not be tolerated by the rest of the world forever. And in fact, change is already underway...

R.

Anyone know . . . Does it cost more than 5 cents to produce a nickel?

Thanks
- Survivor

Do the reported numbers add up? Following the maths below, 360 tonnes is approximately $36 billion which is far more than the numbers cited in the Reuters article mentioned in a previous post below.

----
Excerpted from the 3/31/97, Monday Business Section of the Washington Post:

Just how big is $20 billion? Here are two creative ways of visualizing the size of this wealth. First let's weigh the money. To make the weight more interesting, lets weigh $100 bills. A friend of mine with a scientific scale tells me that $100 bills weigh about one gram each. It takes just a few steps to calculate how many tons of $100 bills there are in $20 billion.

There are 200,000,000 one hundred dollar bills in $20 billion. For simplicity sake, let's say that 500 grams equals one pound. Dividing 200,000,000 by 500 gives 400,000 pounds of $100 bills. Dividing this by 2000 pounds/ton gives 200 tons of $100 bills.

http://www.mises.org/story/2461968, you have shared much in this forum over the years so it will be interesting to see exactly what is slowing unfolding through your questioning. I am always up to learn something new.

Looking closer at your conclusion, I would say that I lean more towards any discussion about currency or the PoG is a political discussion. It seems that there is a clear direct political (or business) relationship between a government and its central bank over the issuance of the state controlled currency. The right to loan currency into existence is so tempting (and dangerous) that is would seem that the politicians would want unlimited creative powers while a banker �might� want a non-political backing to provide stability for business function. We witness this display during every Fed meeting and it's overlooked that the banker always seems to point out the dangers of the political situation that threatens the currency. Likewise, bankers around the world clearly demonstrate the power of gold by holding it on reserve even though it gathers no interest. The bankers are well aware of the Strong Dollar Policy that is a political desire and know that marking their gold reserves (or nationalized resources) to market provides a counter balance to boundless currency creation (by the state). The State, knowing that gold functions as competition for the controlled currency, will do everything that it can to discredit conversion, out of the currency, into gold. Thus the PoG is carefully monitored to make sure the currency monopoly is not lost. The best defense in this area is much like interest rates � short the paper gold market and take a loss in order to maintain function of the currency which is worth Trillions (as seen with the latest �on the books� budget from the executive branch). Currencies are created by politicians and executed through banks. I would say that politics plays a very big role with regards to how the currency is perceived and how it functions.

The article that you pointed to yesterday is a good read. There is a lot in it that seems to match what I have learned and observed.

"It is not economic strength that provides the foundation of the role of the US dollar in the international monetary system, but it is the US dollar's role that provides the basis for the United States to maintain and extend its global activities."
�
"While after the two world wars, it was the US industrial base that laid the foundation for the role of the US dollar, now it was not the superiority of the US industrial base that provided the basis for the global role of the United States but its insatiable appetite for private and public consumption."
�
"While other countries have to export in order to pay for their imports, the sovereign who emits a global currency is exempt from adhering to the most fundamental law of economic exchange. This sets domestic resources free for the expansion of the state, particularly military power. The more such an imperial power extends its military presence around the globe, the more its currency becomes a global currency, and thereby new expansionary steps can be financed. Expansion becomes a necessity."

This last paragraph brings up a good point, the privilege of the global reserve currency benefits the state through its ability to fund the military and the military is strategically controlled by politicians through the right to declare war which will support the interests of the country around the world.

To me, one of the biggest political stands a person can make is to convert into gold � or out of gold into a currency. That is truly voting with your pocketbook. If you like the management of a currency, buy it with your gold. If you don't, buy gold with that currency. Just like companies that have good or bad managements, the stock exchange value is correlated. Management that is good will see more future value, management that is bad will see less future value. My observations show that dollar management has been extremely strong (against gold) but is starting to break down. If the management continues as it is, we will see a mild increase in the currency/gold exchange. If management breaks down more, we will see a higher increase.

So, it would seem to me that, yes, understanding politics is vital to understanding currencies and sense gold is exchanged for currencies, one should expect gold should experience political influences. Sorry for the long winded response.

http://www.coinflation.com/If this helps, conflation gives the metal value. I'm sure the treasury has overhead on top of this.

Given that they probably sent mixed denominations, the actual amount must fall somewhere between $360M (all $1 bills) to $36B (all $100 bills) to fit the given weight parameters.

That's a lot of trees, in any instance.

http://www.coinflation.com/Survivor;
Linked is a calculator and as of Feb 06 the US 5 cent piece had an intrinsic value of 6.85193 cents.
Of course what is not calculated is the minting costs which would increase the price to produce as well.

It's interesting that given our approximations, one ton of $1 bills equals a cool $1 million. It makes the conversion to $5, $10, $20 and $100 denominations into pretty simple arithmetic.

I wonder when (or if) the $1000 bill will be re-introduced. "Small bills" are getting to be quite a wad in the wallet, but of course, bankers would prefer us all to use "Mylar Money", so they can skim their 2-4% on EVERY single transaction.

Many retailers, like ARCO, pass on a "debit card fee" at the register, and as we all know, ATMs also charge "convenience fees" for non-members.

Retail "processing fees" are not cheap, either, so strong volume is necessary to amortize these across many transactions.

Advocatus and White Rose--
I would only comment...think about the significance of how recently on CNN, for the first time, we were treated to the spectacle of dead soldiers returning from Iraq--ostensibly killed in Kabul with involvement by Iran. And how all pictures of returning caskets from Iraq have been suppressed until now. I think that, more than anything else, may be a harbinger of what is to come.

Also, one may learn also more by what is NOT said than what is said, or what is NOT done rather than done. Then note how Brezinski's recent important and extremely significant testimony on Capitol Hill was completely ignored by the major media.

But then you don't expect them to proclaim a major gold bull market to the high heavens! 'Nuf said!

@ Contrarian,

"soldiers returning from Iraq--ostensibly killed in Kabul with involvement by Iran"

Isn't Kabul in Afghanistan, not Iraq?

Sounds like they were either in the "clear the way for the Condi's pipeline" or the "protect Ollie's poppyfields" assignments, not the "liberate Iraq" assignment, although with 720 bases in 130 countries, it's difficult to keep the "theaters" straight.

The reason we are in IRAQ is to assure that the current govt stays in power because they are giving the lucrative oil development contracts to US and British Oil interests (friends of Bush and Cheney). If this coalition democracy fails, the legitimacy of the contracts fail with it. How much profit is to be made? Is the profit much greater than or equal to the cost of the war and the forward projection of it? Do the american people get the oil and the iraqi's get worthless imperial credits? If we pulled out tomorrow would the oil fields be developed by others...(not Bush's friends). Would this oil still not be on the market for US to buy? It is surely more complicated than this and I realize that the very underpinning of the US dollar...the petrodollar is at stake here. Without the Bush war, the oil would be traded in Euros or maybe even roubles.

... or NO forum.

(Just a friendly reminder of our imminent danger.)

R.

http://news.independent.co.uk/world/middle_east/article2132569.eceHas anything surfaced in these iminant (Feb 7-10) hearings before the Iraqi legislature? Have they been scuttled into secret commitee?

The messages of Another and FOA foretold of the pricing of oil in euros or currencies other than the petrodollar are key signposts along the trail to higher gold pricing leading to eventual freegold. The failure of the Iraqi electorate to endorse the Bush/Cheney directives as to who will get the oil development contracts have direct bearing on the POG. Perhaps the recent rise of POG is attributable in part to these discussions in the Iraqi legislature.

http://www.forbes.com/business/feeds/afx/2007/02/05/afx3397212.htmlBEIJING (XFN-ASIA) - The China National Development and Reform Commission said in a statement on its website that it has set the country's total gold output objective at 1,300 tons for the 2006 -2010 period.

China's gold output last year was 240.078 tons, up 7.15 pct compared from 2005.

very, very nice and an interesting fellow. Came to power in france with the defeat and internment/exile of Napolean Bonaparte to Elba and when Napolean returned he somehow escaped execution and was again restored to the throne after Napoleans ultimate defeat.

http://quotes.ino.com/chart/?s=FOREX_EURUSDThe 1.30 battleground certainly is throwing no favours in the direction of PM's at present as each side seems hell-bent on reduction.
Tomorrow MAY be different.

@ Henri

Well, yes, oil and petrodollar are part of it, but they figure into the equation somewhat differently. The petrodollar agreement, primarily with the Saudi's, forced other countries to use more dollars, and recycled oil payments back into US investments, particularly treasury bonds. This allowed the US to create more money with relative impunity: the bond balance found guaranteed demand, and the broadening of the monetary base beyond US borders dampened the inflationary effect of money creation at home while taxing those abroad.

Saddam endangered this by switching oil payments to euros in 2000. So one immediate goal for the invasion was to revert that back to dollars. From that perspective, Bush was right when he said "mission accomplished". But the amount of petrodollars can be increased as well by inflating the oil price. The uncertainties of war combined with oil producers throttling production and bogus tales selling "peak oil" did just that. It is no surprise that the Iraqi oil production was almost halved.

I believe though that it was not so much about an indefinite continuation of the petrodollar. Rather, it seems to have been a final squeeze of gain out of the petrodollar so as to smooth the transition to a new system of universal fiat liquidity at low interest rates.

Of course, such a system must be stabilized and balanced. That begs the question: what is the USA going to do without an unlimited credit card. The huge current account deficit means that exports must go way up and imports down. I think that is the reason for the sudden change of White House policy to reduce the dependence on foreign oil and switch to new energy technologies (which can in principle be exported).

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/07/cnusecon07.xmlSpending spree over as Americans walk without safety net
By Ambrose Evans-Pritchard
Last Updated: 11:59pm GMT 06/02/2007
Excerpt:
"Americans are drawing down their personal savings at the fastest rate since the depths of the Great Depression, suggesting that US household finances may be more fragile than they look."

@ Henri and Advocatus

If gold is relevant to oil, then Iraq is relevant to gold.

News media rhetoric aside, the only retrospective way to view the Iraq debacle is as an attempt by the US to set up a puppet regime that would be favorable to US oil interests. (Remember those reports of contrete and steel US "cities" going up under the guise of military bases?) This thesis is consistent with the thought that Saddam's oil-for-Euros trade was the real reason for the invasion.

If the Iraq electorate successfully rejects its intended role as a US puppet, then the Iraq failure will be even worse than the current perception.

As the world's biggest oil consumer, the US should hope that the scope of Iraq policy failure does not extend so far as to scuttle the plan for Iraq oil. But if that does occur I predict it will be positive for gold valued in US dollars.

- Survivor

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sIt's curious to note the Euro was left holding the bag today (apart from that other galoot currency, the A$) as all the other main scrip rushed to the exits visavee Buck early in the going.
What IS interesting and will require resolution going forward is that Buck/Bond should be technically dropping here, which "should" be positive for PM's.
We await tomorrow with bated breath!

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=That of course was Buck/Bond "yield" should be dropping ;-)

It will! ....just watch!

http://www.mises.org/web/3071Dying of Money:
Lessons of the Great German and American Inflations
by Jens O. Parsson

Is now available as html (I copied the entire book at the Boston Public Library, then scanned and cleaned up the text at home).

This important book explains why the beginnings of a hyper-inflation is benificial, and how the subsequent events are so painful to endure. This is a vital part of "The Gold Trail".

This book is in the public domain, and if our hosts would like it, I can arrange for a copy to be located on this site as well.

http://www.sweetliberty.org/issues/environment/energy/@Survivor

Control over Iraqi oil is no doubt a goal since their reserves are large, high-quality, and easy to tap. But I doubt it is a crucial goal, particularly in a post petrodollar era.

For one, there is reason to believe (see link) that the domestic oil reserves are actually much larger than reported. A misdirection that, if true, makes sense from a petrodollar perspective.

For another, climate change is a pressing problem. The measures being talked about now are nowhere near sufficient. The world must move to alternative energy sources. Such a future can be much closer than it appears since, like the gold price, alternative energy technologies have been suppressed. Once they are allowed to surface, control over Iraqi oil is no longer that relevant.

http://news.goldseek.com/InternationalForecaster/1170879609.phpInternational Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
-- Posted Wednesday, 7 February 2007 | Excerpt:
"Gold production continues to fall in South Africa and now in Peru. That will continue for several more years. All indications are that the shortfall to consumption will persist for several more years. Gold is headed higher no matter what the elitists do, so hold on for the ride of a lifetime.
In the last issue we pointed out that the commercial gold traders were shorting heavily in order to impede the upward progress of gold. Gold isn't about to plunge � they just don't want it going higher. Someone might get the idea that there are problems in the world economy. At the same time the gold ETF buyers are loading up.
The commercials have added almost 50,000 short contracts over the past three weeks net 25, 6 and 17 or an actual total of 48,000. That is an increase in less than one month was 53,937 contracts. This has happened as gold rose $33.00, which certainly was not encouraging for the commercials. Some believe the commercial shorts believe something bearish is going to affect the gold market. We think just the opposite. We believe the commercials are being driven by elitist forces that want to hold gold back because something very bad is going to happen. This is borne out by the wider spectrum physical gold buyers that inhabit the ETFS. They continue to buy, 1.54 tons the week before last and 8.33 tons last week. Barclay's was unchanged, but the UK Lyxor Gold Bullion Securities rose 0.61 tons. We'll bet on the physical buyers.
In silver Barclay's IShares Silver Trust jumped 108.5 tons at a cost of $1.63 billion.
The bottom line is the commercials are not always right and when they are wrong they are very wrong."
Mikal-- In this one Chapman covers gold, mortgages, derivatives in a way a that is sometimes familiar, sometimes shocking, always convincing IMO.

The book certainly looks like it would be a nice thing to have around.

You've stated that it's in the public domain, and yet I see an indication of copyright 1974. Can you shed more definitive light on its status? Thanks.

R.

http://www.lewrockwell.com/higgs/higgs54.html
Here's how historian Robert Higgs puts it (see link):

"[T]he U.S. military presence in the Gulf serves not to ensure that the oil keeps flowing; it merely ensures that U.S. corporations (oil and weapons companies in particular), banks, insurance companies, and so forth will be the specific parties raking in the profits from dealing in the Gulf oil. If they didn't do these jobs, the jobs would still get done, but they would get done by the efforts of other firms (European, Chinese, Japanese, and so forth), which is precisely the point: U.S. foreign policy in the Middle East serves the purposes of specific U.S. economic entities, which in turn more or less control the policies by the way they exercise their financial muscle in U.S. politics."

As for alternative energy sources, the galloping advance of technology stands to free us from dependence on fossil fuels in twenty years, no government intervention required:

"We are awash in energy (10,000 times more than required to meet all our needs falls on Earth), but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we'll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we'll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years. Almost all the discussions I've seen about energy and its consequences, such as global warming, fail to consider the ability of future nanotechnology-based solutions to solve this problem." -- http://www.kurzweilai.net/meme/frame.html?main=/articles/art0692.html

Global warming hysteria, however, will see to it that massive government intervention takes place, which in fact has already started -- http://news.bbc.co.uk/2/hi/europe/6339915.stm -- the effect of which will be to expand the debt bubble even more, with gold being the ultimate beneficiary.

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

February 7 (Reuters) -- U.S. gold futures finished slightly lower despite lacking a definite direction on Wednesday, whipsawed by a weaker dollar and lower oil prices.

Analysts said that gold could retest new highs because of renewed investment demand if the precious metal moved above key resistance levels.

Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange settled down $1.40 at $657.30, traded in a tight $5 range between $656.40 and $662.00. The April contract had closed higher in each of the previous two sessions.

"The market has found some investment interest again here in the last couple of weeks ... And this general sense of building inflation has seemed to catch hold once again in gold" because of rising crude oil prices, said Darin Newsom, markets analyst at DTN.

Newsom said that gold was in a long consolidation phase and there was reallocation of index-fund money and investment money back into the bullion market.

Oil prices initially rose to above $59 a barrel as a blast of cold weather boosted heating oil demand in the United States, but they later fell more than a dollar because of profit taking.

The dollar traded near a session low against the euro, after data showed higher fourth-quarter U.S. business activity had little impact on the greenback. Gold often moves in the opposite direction to the dollar, as an ailing greenback makes dollar-denominated assets like gold less expensive for holders of other currencies.

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

http://english.donga.com/srv/service.php3?bicode=020000&biid=2007020857898FEBRUARY 08, 2007 -- Mr. Lee (34), who is working for a big company, got into gold investing early last year. He is investing 300,000 won a month in [...] a gold commodity of Shinhan Bank

He said that it is really fun to check the gold price and its earning ratio everyday. After hearing news that the International Monetary Fund will sell off a 400ton lump of gold early this month, he looked for analysis articles about how this would affect the international gold price.

Lee said, "a year of investment led to 12 percent profits. Since investing in gold, I got interested in the international economy and now, I think my eyes have become wide open."

He meets members of a gold investment club once or twice a month and exchanges investment information. Most of them are 30-something office workers.
...
Yu Yu-jeong, head of the commodity development team at Shinhan, said, "Taditionally, wealthy people in their 50s or older have been interested in gold, but recently, the number of young people who invest in gold by putting a certain amount monthly has drastically jumped."

With the sale of Shinhan's convenient gold commodity in the form of non-physical transactions, young people have started to show interest in gold investment...

Physical transactions mean purchases of gold bars in 100g, 500g and 1kg units in person ... purchase of the actual article comes with a five percent trade commission and a ten percent value added tax.

On the other hand, in the case of non-physical transactions, investors put money in their account, the bank buys gold in their name and returns profits according to the gold price when they withdraw the investment. There is a commission of 1.2 percent of net price received when selling the investment. Still, this is far more profitable as there is no tax on investment profits.

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

Sounds to me like a group in firm need of a Trail Guide...

R.

http://www.alternet.org/waroniraq/43045/This looks to be a lot of unexplored/exploited potential. WHO gets the development rights is very much an issue as the undermining of OPEC is projected with the bonanza not so far beneath the sands oh so easily vitrified sands of Iraq.

Mint planning million-dollar coin
Last Updated: Wednesday, February 7, 2007 | 12:46 PM CT
CBC News
You'd need mighty deep pockets to jingle the new coins planned by the Royal Canadian Mint: Canada's official money-maker wants to stamp out a $1-million coin.

Coin experts say it would likely be made of gold, be the size of a pizza and be extremely heavy. Some numismatists wonder if it would be a good idea.

The federal cabinet passed an order earlier this month at the recommendation of the transport minister allowing the mint to stamp out the non-circulation coins.

The editor of Canadian Coin News, Bret Evans, said if it goes forward it would be the first of its kind in the world, the mint's attempt to create a record-breaking coin.

"The coin becomes an event," Evans said. "It's purely being done to get attention. To throw something on the market, to make a statement which is, 'Here we are.'"

There's no word on how many coins the mint is looking at stamping out. Mint officials acknowledge they have permission to make a $1-million coin, but will not comment beyond that.

Continue Article

Coin experts are talking, though, and among those questioning the project is Regina dealer George Manz, who wonders who would buy the mint's mega-loonie.

"The people that I know, if they're going to go and spend $1 million on a coin, they want something that is extremely rare," he said.

On the other hand, Evans notes that the last time such a special coin was made � �100,000 from Austria � all 15 sold out in less than a month.

The $1-million loonie, he figures, would weigh around 100 kilograms � about the weight of a typical hockey player.

http://corporate.hosted.inet.co.za/news/story/2204630By Evan Pickworth
I-Net Bridge, South Africa
Wednesday, February 7, 2007

The South African Reserve Bank's holdings of gold reserves increased markedly in January to 4.684 million ounces from 3.990 million ounces in December 2006, and according to a leading economist, this could be due to the bank's taking the opportunity to build up reserves when it is "hard to argue against a long-term bullish view on gold."

"Keep in mind that they do not declare the constituents of the portfolio, so whatever we say is speculation. You could, however, look at gold as another reserve currency and it is hard to argue against a long-term bullish view on gold," explained Goolam Ballim, chief economist from Standard Bank.

"There is a cautionary motive to some of the South African Reserve Bank activities and this is in line with the constructive view that it is an opportunity to build up reserves," he concluded.

The SARB's gold and foreign assets total 187.696 billion rand at the end of January from 178.318 billion rand at the end of December, the SARB announced on Wednesday.

The gold component was valued at an average price of 4,684.15 rand an ounce.

http://www.canada.com/victoriatimescolonist/story.html?id=4d25dcb8-a70a-4f9e-9625-6d150d0249c8&k=21769Mint Planning Million-Dollar Loonie - Tim Naumetz, CanWest News Service - Ottawa Citizen - February 7, 2007
This is not a bad idea,
especially if it's the start of a new trend.
But as they say it's premature to speculate on their final plans. Maybe they'll (feel obligated to) wait for higher POG.

The Royal Canadian Mint should wait for an international financial crisis caused by a derivatives collapse and the ensuing flight to quality(GOLD) before creating a million dollar coin... they would only need a fraction of the ounces currently needed.

-Pal

PS-Perhaps they know this and are preparing the general public for much higher Gold prices ;)

I'd go into bat for the negative on this issue as I believe size DOES matter ...but not in the "more is better" sense, in fact quite the opposite.
After a certain size is reached, Coins imo suffer a crassness crisis which gets worse the bigger they get.

In what may forever be subjective, my personal size preference for statement purposes is, packing a Panama 20 Balboa in 1 pocket (4ozAg) ...and a French 50 Franc in the other (3.5ozAu)
To me this announces to nobody in particular but yourself, that you've arrived ...even before you get there!

http://quotes.ino.com/chart/?s=FOREX_EURUSDUnder pressure again in the early going as Euro resumes it's battle for sub $1.30
AirBus in the news displaying a fitted-out version of the A-380 today. With Comex delivery now reduced to a trickle for Feb, we can toss them a bone in the form of sub-$650PaperPoG . It's the least we can do!
They won't get the same consideration from Aggie imo though as she firms up for a spectacular March delivery period the likes of which will be talked about well into this Century.

Bring it on!

http://switch3.castup.net/cunet/gm.asp?ai=214&ar=1351wmv&ak=null Iraqi MP Lyad Jamal Al-Din: �Democracy is religion of the dollar and serves its global interests�

(0.59 seconds in interview)

http://www.business-standard.com/common/storypage_c.php?leftnm=10&autono=273931(excerpts) Mumbai February 08, 2007 --

The yellow metal, the safe haven for global speculators, remained volatile amid strong buying sentiment and profit-bookings at higher levels.

Bloomberg adds: UBS AG, Europe's biggest bank by assets, expects gold to climb to $700 in the next three months.

The forecast was raised from $650 because of "firm underlying retail demand for gold jewellery," John Reade, head of metals strategy at the UBS Investment Bank unit in London said in an e-mailed report today. Investors are also "very positive for gold's prospects."

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

Three months puts us at May. The price vaulted above $700 last year in May, too. What's with the new May mania, are people suddenly spending their post Tax-Day cash on gold?

Also, did you notice the use of the phrase in which gold is cited as "the safe haven for global speculators" by which it is made volatile between sprees of buying and profit-bookings?

Again, "safe haven for speculators"... is that some sort of oxymoron?

It seems to me that a true safe haven is secure entity into which your various profits-takings ought to flow -- a consolidation into wealth of the gaming chips that are being taken off the table.

R.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=9EF39772-17A4-1130-F5436756CB29972AThe latest IMF Statistics indicate that 4 Central Banks are buying gold :

Russia : +7,45 tonnes
Kazakhstan : +7,38 tonnes
Greece : +3,56 tonnes
Philippines : +1,4 tonnes

Euro trims losses as more ECB hikes seen - CBS Marketwatch - 02/08/2007
Hedge Fund's Heavy Metal - WSJ - 02/08/2007
Housing still sliding - Dallas MN - 02/08/2007
Deals Raise Debt Risk - WSJ - 02/08/2007
HSBC Says Bad-Loan Charges to Exceed Analysts' Estimates by 20% - Bloomberg 02/07/2007
Rocky road seen for housing industry - Chi. Trib - 02/08/2007
Toll's Revenue Drops 19% as Customers Cancel Orders - Bloomberg - 02/08/2007
Plummeting commissions thin real estate's ranks - Orange Co. Reg. - 02/08/2007
Developing nations poised to challenge USA as king of the hill - USAToday - 02/08/2007
BOJ Doesn't Need to Hastily Raise Rates, Haru Says - Bloomberg - 02/08/2007
Biofuels Will Make China, India More Thirsty - Bloomberg - 02/08/2007
German exports surge to new high - BBC - 02/08/2007

http://www.ecb.int/press/pr/date/2007/html/pr070208.en.htmlAt today's meeting, the Governing Council of the ECB decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 3.50%, 4.50% and 2.50% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. (CET) today.

European Central Bank
Directorate Communications
Press and Information Division
Kaiserstrasse 29, D-60311 Frankfurt am Main
Tel.: +49 69 1344 8304, Fax: +49 69 1344 7404
Internet: http://www.ecb.int

Blast-off?

http://www.financialsense.com/editorials/phillips/2007/0207.htmlI.M.F. PAST & FUTURE GOLD SALES
THE EFFECTS PART 1 + GOLD
IN THE � & THE YEN


"Proposals have been put forward to sell 400 tonnes of gold from the I.M.F. holdings. The extra money is needed to help plug an estimated shortfall of $400m a year in the I.M.F.' current income and expenses by 2010.

The IMF has 3,217 metric tons of gold and the sale of 400 tonnes could raise $8.4 billion at current market prices.

This is one of several proposals put forward by a committee of carefully selected eminent persons who have now issued a report, attempting to provide solutions to the I.M.F. as to how to solve the cash flow problems that have led this august monetary body to recommend a new �income model� including nominal gold sales by the International Monetary Fund. The Committee comprised the following eminent persons; Andrew Crockett, former director general of the Bank for International Settlements and currently president of J.P. Morgan Chase International; Mohamed A. El-Erian, president and CEO of Harvard Management Co.; Alan Greenspan; Tito Mboweni, governor of the South African Reserve Bank; Guillermo Ortiz, governor of the Bank of Mexico; Hamad Al-Sayari, governor of the Saudi Arabian Monetary Agency; Jean-Claude Trichet, president of the European Central Bank; and Zhou Xiaochuan, governor of the People's Bank of China.

Commentary

In our opinion none of these figures, whilst highly respectable, have the power to influence the diverse national Central Banks who actually own the I.M.F. gold. The Executive Officials of the I.M.F. cannot act independently of the Member states comprising the I.M.F.

The governor of the People's Bank of China [which holds a tiny percentage of its reserves in gold -1% or less now] is suspected of wanting to increase these holding and would only be too happy to use some of the $ trillion they currently hold in their reserves to purchase any I.M.F. gold direct from the I.M.F.

M. Trichet, whilst president of the European Central Bank is not a President of a National Central Bank, so must be perceived as a professional bureaucrat, advising other people on how to use their money well.

Tito Mboweni is a Central Banker, but of a nation with a currency regarded as soft, despite it being one of the world's gold producers. We believe he will not hold sufficient sway to persuade the world's Central Bankers to sell their gold held by the I.M.F.

The rest, with all due respect are qualified consultants, not owners of the gold that is being recommended for sale.

However, Managing Director Rodrigo de Rato, the head of the I.M.F, submitted the report to the I.M.F. executive board. In essence then, we see this as simply a recommendation by consultants to a body whose members have the task of approving it, not the Officials of the I.M.F. This is important for the present I.M.F. policy on gold is very clear

Present I.M.F. Gold Policy

The I.M.F.' current policy on gold is governed by the following principles: -

As an undervalued asset held by the IMF, gold provides fundamental strength to its balance sheet. Any mobilization of IMF gold should avoid weakening its overall financial position.

Gold holdings provide the IMF with operational maneuverability both as regards the use of its resources and through adding credibility to its precautionary balances. In these respects, the benefits of the I.M.F.' gold holdings are passed on to the membership at large, to both creditors and debtors.

The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies.

The IMF has a systemic responsibility to avoid causing disruptions to the functioning of the gold market.

Profits from any gold sales should be used whenever feasible to create an investment fund, of which only the income should be used."

Druid: Great read.

This move by central banks to physically acquire gold rather than simply threaten to physically acquire gold, IMO, is a clear signal as to loss of confidence with their previous reserve currency system. It is also a conscious strategic shift in philosophy, by a few, that will surely make all the other currency systems quake in their boots. Will this open defiance trigger more banks to convert into physical? Will the rest of Asia take notice?

Even though we read that the weight of reserves is climbing, one has to wonder where it is coming from. Is it coming from within, or outside of the boarders of these countries? Is it coming from the Open Public Markets or through private contracts? In other words, is the delivery traceable?

There are many questions that can be asked, but the net affect will most likely be � a higher respect for gold as a monetary metal.

If recent history is any guide, today's nice run up will be hit with a $10-$15 downward spike during the last two hours of Friday's trading.

If that should not occur tomorrow, then this may be the launch pad.

PA

http://www.interfax.ru/e/B/finances/26.html?id_issue=11674187MOSCOW. Feb 8 (Interfax) - The Central Bank changed the structure of its bi-currency basket on February 8 to 0.45 euros and $0.55, the Central Bank said in a statement.

The CB last adjusted the basket in December 2005, increasing the euro's weighting from 0.35 to 0.4 and reducing the dollar's from 0.65 to 0.6.

The CB started using the bi-currency basket to determine its exchange-rate policy on February 1, 2005.

http://www.streettracksgoldshares.com/us/value/gb_value_usa.phpLooks like a few more investors are seeking safe haven in this ETF.

06 Feb 2007 458.63
07 Feb 2007 461.71

I'm happy!

Gold is up 1%.

Let us be thankful for the Lord's tender mercies.

SIERRA

That IMF Committee of Eminent Persons that advises the IMF to sell 400 tons of gold was certainly VERY carefully selected - to make sure they all approved the measure previously decided upon.

SIERRA

The Russian revaluation stuff is a little complex. From what I understand it is trade related and is intended to reflect a higher composition of their trade these days is in eur than usd, NOT that they are going to go into the market and buy more eur. This in theory brings the RUB more in line with the RUBs trade weighted basket. Thus todays move reflects the new trade weights. This also has trade weighted inflation and REER implications.

With all the enormous amounts of liquidity sloshing around, the world, where collectors are paying sums of $100 million dollars plus for junk art, and risk premiums are at all-time lows, why does the IMF, the most august institution ever created by a bunch of bandits, have to SELL GOLD?

I shall not insult the membership of this Forum, by giving the obvious answer.

SIERRA

http://www.cfo.com/article.cfm/8651541/c_8668196?f=home_todayinfinance&x=1What Keeps Bankers Awake at Night?
The more people worry about risks within the financial system, the better.
Economist Staff, The Economist - FEB 08, 2007 - Excerpt:
"When the great, the good and the media assembled in Davos for the World Economic Forum in January, one topic dominated the financial agenda � risk. That ought to be a good sign. For it is when those in charge are feeling complacent that disaster is most likely to happen. Investors also seem nervous. A survey of fund managers by Merrill Lynch, an investment bank, found 82% expected volatility to rise this year.

However, as the Bible says, "by their fruits ye shall know them". Banks are still financing leveraged buy-outs, junk bonds are offering their lowest spreads since March 2005, and the cost of insuring against a share-price fall, as measured by the Chicago Board Options Exchange Volatility Index (Vix), is low (see chart at the bottom of the page). Financiers may be worrying about risk, but they do not seem to be doing much about it."

http://www.bloomberg.com/apps/news?pid=20601103&sid=avxemW08upao&refer=usSubprime Mortgage Bond Risk Surges, Credit-Swap Index Suggests
By Jody Shenn and Shannon D. Harrington
Feb. 8 (Bloomberg) -- Excerpt:
"The perceived risk of owning low-rated subprime mortgage bonds surged today after the two largest U.S. lenders reported growing problems stemming from the loans, an index of credit-default swaps suggests.
An index used to create swaps based on 20 BBB- rated bonds sold in the second half of 2006 and consisting of home loans to the riskiest borrowers fell 2.3 percent to about 88.5 today, the lowest since it was created Jan. 18, according to Deutsche Bank AG. The so-called ABX index was down 10 percent before today.
HSBC Holdings Plc, the world's third-largest bank, late yesterday said more of its U.S. home mortgages were going bad than it expected. Irvine, California-based New Century Financial Corp. said it would post a fourth-quarter loss, restate other 2006 earnings lower and make fewer loans this year.

IMF. Sell to whom?

Perhaps they will sell back to the countries that contributed goldbricks in the first place.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aYZHFIjhF5uwU.S. Hurts Asia With Addiction to Dollar Status: William Pesek
By William Pesek
Feb. 9 (Bloomberg) -- Excerpt: "The financial-blog community is abuzz over a recent Financial Times item urging Japan to reduce its vast currency reserves.
The risk that Asian nations might direct central banks to reduce dollar reserves has tantalized markets in recent years. Mass dollar-selling would drive up U.S. interest rates and Asian currencies, testing a global economy riddled with imbalances.

While such questions have hovered over markets for years, the FT editorial on Feb. 7 hit a nerve with investors. The reason: It would indeed make sense for Japan to act now to reduce its foreign-exchange reserves.

In the 15 months through March 2004, Japan spent the equivalent of Indonesia's gross domestic product to keep the yen from rising against the dollar. The effort has much to do with why the Bank of Japan has $875 billion of currency reserves and why the weak yen is unnerving Europeans.

``Those reserves,'' the FT argued, ``are dead money that the BOJ could better employ elsewhere: other central banks, like that of China, would love such an opportunity. But most of all, selling down reserves would demonstrate to the world that Japan's currency interventions work both ways, and that it is interested in the stability of the yen rather than in keeping it permanently undervalued.''"

http://news.goldseek.com/GoldenJackass/1170950581.phpIMO, this article by Jim Willie CB directly addresses the �tone� of the forum over the last few weeks. It's an amazingly clear summary of the key interconnected aspects of the monetary system that we all struggle to understand.

Snips:
"One should always remain aware that gold, oil, and the military are connected by zero degrees of separation."
"Gold thrives on the conflict and regular shake-up to the system."
"Goldman Sachs has been at the controls on most of the master machinery."

And much more at the link�

http://www.marketoracle.co.uk/Article328.html4:13p ET Thursday, February 8, 2007

Dear Friend of GATA and Gold:

Gold market analyst Clive Maund has responded to Tuesday's GATA dispatch (www.gata.org/node/4789) criticizing his grudging acknowledgement of and hearty indifference to manipulation of the gold market.

Maund calls that criticism a "personal attack" and declines to answer any of it. But he does quote approvingly another analyst who writes that "markets being managed is nothing strange or evil."

Of course a market that is "managed" is not really a market at all, and when it is presented as being a market, it is a fraud.

But since Maund refuses to engage on the issues, taking refuge in his hurt feelings, there's no harm in letting him have the last word, which can be found at his Internet site here:

http://www.marketoracle.co.uk/Article328.html

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

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

February 8 (Reuters, DowJones) -- U.S. gold futures closed nearly 1 percent higher on technical buying on Thursday as the dollar fell against the euro and oil firmed, and traders said gold was poised to set new highs in the near term.

Increasing tensions between Tehran and Washington over Iran's nuclear program also boosted gold's safe-haven appeal. Iran's top authority Supreme Leader Ayatollah Ali Khamenei said on Thursday Iran would target U.S. interests around the world if it came under attack.

The White House reiterated that it had no plans to invade Iran, as a second U.S. carrier is now heading to the Gulf.

Gold prices often rise with geopolitical tensions because of safe-haven bids, and bullion is used by investors as a hedge against oil-led inflation.

The COMEX April contract settled up $5.50 at $662.80 after hitting a session high of $665.40.

Gold initially fell and traded as low as $652.50 due to trade selling, but the contract quickly found underlying support at lower prices and later rebounded.

James Quinn, commodities commentator at A.G. Edwards, said the lower dollar after the European Central Bank's pro-euro comments and firmer oil encouraged value hunting in gold. "I think $660 is a big pivot. If we can get a couple of closes above $660 the market will probably try to gravitate a little bit higher," he said.

The dollar extended its losses against the euro after ECB President Jean-Claude Trichet said the bank will show "strong vigilance" in monitoring euro zone inflation, signaling a potential rate hike in March.

Analysts added that gold might also acquire some gains backed by the physical demand ahead of the Chinese New Year holiday that begins later this month.

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

Neil Cavuto briefly steered his interview with Clint Eastwood around to economics, and asked him frankly which investment choice he would prefer -- real estate or stocks.

Clint smoothly reframed the question, emphasizing the wisdom of diversification, and continued onward to say that he appreciated the reality of tangibles, saying that real estate was certainly a tangible choice whereas stocks, as near as I can quote him, "are not quite so tangible".

Sounds like a man who is in sync with gold ownership. And given such classic gold-related movies under his belt as "Paint Your Wagon", "Pale Rider" and especially "The Good, the Bad & the Ugly" and "Kelly's Heros" early in his career, I'd wager that he would be counted among gold advocates were that the question put to him by Neil.

Trivia question: Who remembers the value of the golden treasure sought after during the Civil War era in "The Good, the Bad & the Ugly"? ("I do! I do!!")

Bonus question: What would be the value of that same gold at today's market price?

R.

http://www.wtv-zone.com/Mary/FEDERALRESERVE.HTMLA friend that I introduced to this forum two or three years ago sent me an email quoting White Rose's post here and asking whether I was aware of anything to support the idea.

I managed to let off a fair amount of steam in drafting the following response...

***text follows***
RE: prospect for Iran attack mid Feb. Yes, war talk is all over the place. I hear DoD uniforms and civilians are getting lots of mandatory "training" lately with uniforms advised to prepare paperwork for possible unpleasant eventualities. Sinclair had link to story of Russia sending a troupe of ambassadors to Iran, with implication they'll be human shield to forestall US attack (so Israel does it a bit later?) and another link to Iran's ambassador to Syria addressing the feasibility of destroying Israel. Everybody is talking about US naval carriers being concentrated near Iran (which recently demonstrated ship-destroying missile). George Ure had link to the low visibility story of first ever out-of-CONUS deployment of long range radar-evading F-22 Raptor aircraft with logistics troops having departed Norfolk earlier this week and flight crews showing up two days from now on the 10th.. Finally, for what it's worth, for more than a year now George's friends with the "creaky time machine" have been predicting a period of rising tensions beginning autumn of 2006 and culminating with a "release" of some sort around mid-March of 2007.

So, yeah, we're approaching the edge of a precipice, but the powers pulling the puppet strings aren't the ones being talked about. You can look for the culprits by asking a few questions....

* Why it is that US government pays interest to the Federal Reserve for all those green pieces of paper (Federal Reserve Notes) that the Treasury has printed using the Federal Reserve's printing dies? What would be wrong with having Treasury print US notes the way Kennedy did for a short period of time when he took a lot of power away from the Federal Reserve before he was killed? At least we wouldn't have to pay interest on them. Note, by the way, that LBJ signed executive order ending US notes and resuming Federal Reserve notes while flying back from Dallas with Jackie still wearing her bloodied dress.

* Why are the few national governments that manage to get along without a central bank so unpopular? Seems few people like the governments of Iran, North Korea, Venezuela, or Red China. Could it be because they don't have to play footsie with the International Monetary Fund and the World Bank? Or is it just because they don't let the banksters wet their beaks a bit with every piece of currency?

* Speaking of internationally oriented banksters (a "den of vipers" as Andrew Jackson called them), how did the US manage to prosper so well without them from 1836 when Jackson killed the US's second central bank up until 1913, when we set up the Federal Reserve and implemented an income tax? True, it's a shame what has happened to the US dollar since 1913, but simply going into debt doesn't raise enough money for really big wars. You also need to be able to inflate the currency and tax away those inflated dollars.

If what's implied above is enough to make you angry, compare your response to Andrew Jackson's. Here's the full quotation: "You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out... If people only understood the rank injustice of the money and banking system, there would be a revolution by morning." Do a Google search for some of those phrases and you get interesting results. One of the best has background data on the aristocratic Alexander Hamilton's desire for a central bank and Thomas Jefferson's opposition as shown by the following: " I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies."

Personal opinion: when Rome was actually under attack by the child-sacrificing, sun-worshipping Carthaginians Hannibal ("Grace of Baal" Barca and his younger brother Hasdrubal
http://traumwerk.stanford.edu/archaeolog/2006/12/hannibal_barcas_theophoric_des.html , it may have made sense to cry "Dulce et decorum est..." while charging into battle. Hard to figure they'd be able to whip up the same enthusiasm if not under attack and going into harm's way on behalf of the local contingent of banking vipers and thieves.
***end of text***

Note that I once posted an obviously mocking reference to gold manipulation as being a plot hatched by British bankers to tap the wealth of the midwest. I got asked how much of that [excrement] I believed. Sadly, now that America's industrial heartland is called the Rust Belt, I have to acknowledge that the answer to that question is "More and more of it."

Caradoc

@ Caradoc,

Don't feel like the Lone Stranger. I was accused in this forum of fomenting my "personal view" of the "Stink of the Economy" as one reporter on CNBC inadvertantly called it today. However, with patience, I have found that most of the information I have spelunkered and posted here has been cross-verified within about 6 months of initial posting. I am certainly no "prophet", but perhaps I do have just a little more time to dig than the average working Joe, and typically stay ahead of the curve.

The charade continues - the banksters conduct business as usual even while patriots like GATA pull their covers publicly. What do they care, when the CIA "economic hitmen", the courts, the police, and now even the US Army "work for them" under "Executive Decree". Blow a whistle, and go directly to IRS Hell like Catherine Austin Fitts, or maybe take the next plane to Wellstone!!

Everyone said it was crazy to suggest that Cheney wined and dined Scalia just to keep the names on his "Energy Policy Committee" secret, but when Ken Lay, rumored to be a strong participant by the very number of his White House visits, was tried and convicted, then expired prior to sentencing, the haze actually became a lot clearer. Our "National Energy Policy" was being formulated by the very guys ripping the public off with their energy scams.

If the SEC actually had the power to audit anyone but ordinary citizens and White House political enemies, we would not only know who placed the 911 airline puts, but we would also know who sold ENRON stock and options "at the top". My bets are on the "private" members of the PPT, as those funds are now busily propping up the Treasury markets from numbered Caribbean accounts, while China and Japan phase back the volume of their purchases.

How does that relate to gold? The same BS is rampant. We don't get to hear who actually buys Central Bank gold rumored for sale, even though that information is much more useful than the announcement of a "pending sale". Nor do we ever see Western Banks acquring gold, as if the gold they sell materializes out of "thin air" (or war and contraband booty, as it may be).

"Stink of the Economy", INDEED. The first true statement heard on CNBC in years!

Interestingly, much of the "eminent person" IMF panel represents incipient physical gold buyers [though the long term goals of some might be slightly different than others]:

JP Morgan -- perennially short and well aware of the need for a steady supply

Saudi Arabia -- oil for gold [sooner rather than later]

China -- "where do you want us to wire the money?"

The ECB -- "better the IMF than us' - - let's just say Trichet might have been representing "European" interests [familiar names]

South Africa -- at first I was stumped by this, then I saw CP's post last night; that was a fairly large purchase; SA is in the market which more or less bottles up a big chunk of the supply

Harvard Fund -- more muscle than most countries and suddenly interested in gold availability??

Mexico -- more oil for gold??

And. . .

Alan Greenspan -- for his personal collection [just kidding] -- the "nostalgia" continues

The treasure, 10,000 ounces worth $200,000 then and $6.6 million now. More importantly (for me at least) I acquired a golden crown today on molar #3 making me more valuable dead than alive. :-)

Gold remains a valuable asset through the ages. It's best (but not so exciting) to obtain it gradually by purchase not by treasure hunting. 24K teeth are a start.

http://news.yahoo.com/s/ft/20070209/bs_ft/fto020820071921434000By Song Jung-a and Florian Gimbel
Financial Times, London
via Yahoo News
Friday, February 9, 2007

South Korea's central bank said yesterday it was considering investing part of the nation's huge international reserves in overseas stocks, and especially the blue chips of advanced countries, in an effort to gain higher returns.

The announcement comes as the Bank of Korea faces increasing calls for better management of $240 billion (E185 billion, �122 billion) in foreign exchange reserves, the world's fifth largest, after nine years of growth.

The BoK said it had invited foreign asset managers to pitch for potential mandates to manage its overseas stock investments and was considering entrusting them with investments.

"There is no change in the central bank's basic principle that it will invest in liquid assets yet improve returns on foreign-exchange reserves," Lee Seong-tae, the BoK's governor, said after the bank held its benchmark interest rate steady at 4.5 percent for the sixth consecutive month.

"We are considering managing international reserves through overseas investment banks. That may include buying blue chips in advanced countries," he said.

Mr. Lee said the size and timing of any foreign stock investment had not been decided and that, when it happened, the initial amount invested would not be very big given the need to maintain stability in the management of the reserves.

One Hong Kong-based investment consultant said: "Managing money for the South Korean central bank is on the radar screen of all the big institutional fund managers. It's a trophy mandate that none of them would want to miss out on."

The BoK's move follows a policy switch in China, which also wants to diversify its more than $1,000 billion of foreign reserves, 70 percent of which are believed to be held in dollar-denominated assets.

To generate higher returns, the People's Bank of China, the central bank, is in the process of hiring international fund managers specialising in equities, although any investment mandates are likely to remain secret for fear of revealing the bank's investment strategy and reserve composition.

Lim Ji-won, at JPMorgan, said: "It is a global trend that central banks are trying to diversify their assets towards higher-yielding investments. But I think the BoK's investment in overseas stocks will happen only gradually, given its lack of experience and its original purpose of securing enough liquidity."

http://biz.yahoo.com/ap/070208/bolivia_mining_nationalization.html?.v=3By Carlos Valdez
Associated Press
via Yahoo News
Thursday, February 8, 2007

LA PAZ, Bolivia -- President Evo Morales said Thursday he would nationalize a mineral processing plant owned by the Swiss mining company Glencore International AG, the first step of his plan to take control over a larger share of Bolivia's mineral wealth.

Morales did not state the terms under which his government would take over the Vinto plant on the outskirts of the city of Oruro, 110 miles southeast of La Paz.

But the president said the plant would be nationalized by a decree to be issued Friday, saying there had been a lack of transparency in its financial dealings without providing details.

"Companies that respect Bolivian laws, that do not steal money from the Bolivian people, will be respected," Morales said Thursday to community leaders in Oruro ahead of the city's Carvinal celebration next week. "But if the companies do not respect the laws, I have no other alternative than to recover those companies."

Offices of Glencore's Bolivian affiliate Sinchi Wayra were closed Thursday evening and company officials could not immediately reached for comment.

The announcement marks the first step in Morales' plans to nationalize Bolivia's mining industry, though how the process will continue still remains unclear.

All of Bolivia's extensive mineral deposits are already owned by the government, which operates a handful of mines through the state mining company Comibol. The rest are mined through concessions granted by the state to independent miners' cooperatives or international companies, including Glencore and U.S.-based companies Coeur d'Alene Mines and Apex Silver Mines Ltd.

Rising international metal prices, fed in part by demand from China, doubled the value of Bolivia's mineral exports to more than $1 billion last year from $547 million in 2005. The metals -- mostly zinc, silver, gold and tin -- together represent Bolivia's largest export after natural gas.

Despite the sharp increase, the Bolivian government collected only $45.5 million in mining taxes last year. Morales has proposed a tax hike that aims to boost the government's take to as much as $300 million.

Earlier this week more than 20,000 members of independent miners' cooperatives marched into the capital of La Paz to protest the tax increase, hurling dynamite and blocking traffic in the city center. Morales agreed to freeze the miners' taxes and instead direct the tax hike at larger private mining companies operating in Bolivia.

The Vinto plant -- which refines ore containing tin, lead, and silver -- has a strong symbolic value in Bolivia. After its 1996 privatization, the plant was bought by Comsur, a private mining company whose largest stockholder at the time was former Bolivian President Gonzalo Sanchez de Lozada.

Lozada fled Bolivia in October 2003 during riots against his administration, and is still sought by the Bolivian authorities in connection with a crackdown on the protests that left more than 60 Bolivians dead.

Glencore bought the plant from Comsur in 2004.

Rule number one of any Pyramid scheme is "look for a bigger fool to be left without a chair when the music stops".

It seems to me that under the guise of "propping up the markets", the larger CBs are turning the smaller ones into those "bigger fools", perhaps with behind-the-scenes political pressure.

Have they finally tapped out all the insurance and pension fund "investors" seeking greater returns for their gubmint and union employees? IRAs and 401k accounts are way down since Y2K and the accompanying "Internet bubble", so greater fools are getting more scarce.

The second rule is that each level of a pyramid must be larger than the previous one, to maintain the appearance of "growth", and justify dividends to the upper layers using incoming "investments" to pay the previous investors.

Unless 1.3 billion Chinese are chomping at the bit to become Wall St. gamblers, the stock market may be in for trouble. When the bankers themselves are buying the goods to prop up the prices, it doesn't bode well.

That's about like selling street numbers back to the Mob. Someone is gonna get hurt!

http://globaleconomicanalysis.blogspot.com/
Here is something interesting to read:

Snip:

"Money itself (however one defines it) is a claim on real savings (a placeholder for saved goods). For example, a baker makes bread, so what he actually saves is bread. The baker only transforms his savings into money (typically a monetary commodity that has a prior demand for other uses, such as gold) because that's far more convenient. The baker cannot actually save bread, as it would get old.

Therefore money, as such, is a claim on real goods. Credit by contrast, is a claim on money itself, which in turn is a claim on real goods. In our present system, credit claims on money to be paid back in the future masquerade as actual money and can thus be termed "synthetic money". In addition there is a "multiplier" effect. Someone gets a loan and spends it on goods. That money is deposited and is treated as money regardless of whether or not it is backed by real goods. Via sweeps and still more lending, the same money is lent out time and time again (the multiplier effect). This is the failure of the central bank administered fiat system: monetary claims proliferate beyond actual production of goods to back them up. In a honest system, only actual savings would be transferred from savers to borrowers (with banks acting as middlemen).

This "credit inflation" is thus fundamentally different from the "Weimarian printing press inflation". The Weimar situation brings about hyperinflation as the monetary unit itself is inflated in its physical form, as banknotes. By contrast, a credit inflation that creates claims that masquerade as money is prone to deflation because the money needed to pay back the credit is in a shortage (relatively speaking) compared to the outstanding credit claims.

This does not entirely preclude an inflationary outcome. After all, the Fed could in theory decide to monetize just about anything. It could monetize defaulted bonds and loans, it could even go and buy up foreclosed houses if it is prepared to go the Weimar route in order to avert what it would deem a deflationary calamity. As we have discussed in the past, this is unlikely to happen for a variety of reasons. In addition to the ideas expressed in those articles there is bureaucratic inertia to the fear of losing wealth and power. One key point in this regard is the fact that the Federal Reserve system is made up of creditors. Those creditors will not like the Weimar solution because it would debase their credit claims."

This I believe is the message Trichet, Poole, and Weber were attempting to convey in Central Bankers Cry Wolf.

Weber: European Central Bank council member Axel Weber said investors shouldn't expect central banks to bail them out in the event of an "abrupt" drop in financial markets. "If you misprice risk, don't come looking to us for liquidity assistance," Weber said in an interview in Davos, Switzerland at the annual meeting of the World Economic Forum. "The longer this goes on and the more risky positions are built up over time, the more luck you need."

Trichet: Current conditions in global financial markets look potentially "unstable", suggesting that investors need to prepare themselves for a significant "repricing" of some assets, Jean-Claude Trichet, president of the European Central Bank. "We are currently seeing elements in global financial markets which are not necessarily stable," he said, pointing to the "low level of rates, spreads and risk premiums" as factors that could trigger a repricing.

Poole: "The Fed can provide liquidity support but not capital".
The most important facet of all of this is that monetary claims very likely exceed the pool of real funding by several orders of magnitude. When push comes to shove, this house of cards will eventually collapse in some way.

It is important to recognize that what is happening right now with stock buybacks, leveraged buyouts, and various carry trades for what it is: one giant Ponzi scheme. This will end the way all Ponzi schemes end: when the willingness or ability of consumers or businesses to take on more debt stops and/or when the willingness to further speculate stops. When either of those happens there will be a mad rush for the exits and no more buyers for �overpriced tulips� will be found. Be prepared."

Nobody is rushing for the doors, yet, but is seems that more and more people & countries are getting nervous.

Hope this helps,

SF

Nicely done. And my hat is off to the props department that did a good job representing/simulating the appropriate volume (the size of those eight bags) for that quantity of gold. (But at approx 100 lbs. each, "Blondie" must have had an adrenalin boost to help him lift them onto his horse with such a modest sign of struggle. Tuco's evacuation of the grave seemed closer to the needed effort.)

R.

http://www.mineweb.net/gold_silver/622518.htmsnip:

LONDON (Mineweb.com) --Pioneering pyjamas and bed linen made with silver cloth could prove the key to limiting MRSA (a bacteria which has caused a number of illnesses and deaths to patients in UK hospitals) infections if a multi-centre trial being run by St Bartholomews Hospital in London and The London NHS Trust proves successful. If the trial is successful this could provide another outlet for silver metal. An effective trial could lead to such pyjamas and bedsheets being specified thoughout UK hospitals, and doubtless in other countries too, and have a positive impact on the silver market

Dr Peter Wilson, a Consultant Microbiologist at the Trust, believes there is strong anecdotal evidence to suggest that silver can be used to clear MRSA on the skin and therefore protect vulnerable patients. To prove his case he has enlisted the help of the Lister Hospital in Stevenage, UK and is in discussion with The Queen Elizabeth Hospital in Woolwich, UK to run two separate clinical trials which will take place over the next 12 months.

Silver which has an excellent safety profile, is one of the oldest anti-microbial agents known to mankind, with records stretching back to ancient Greece. It is currently used more extensively in many other parts of the world � for example the US military use silver in socks to keep them odour-free.

Dr Wilson, said: "Silver is known to be a very efficient agent against infection and also very safe. These trials will mean we can prove its effectiveness. It is already being used in a number of medical products such as plasters and even in washing machines so this is just the next logical step. If it is successful it will transform the way we tackle certain infections, particularly MRSA, and also help to cut costs as this would be a very cost effective solution compared to traditional methods."

MRSA is a bacterium that can live completely harmlessly on the skin and in the nose of about one third of healthy people without causing any problems. However it can lead to serious infection if it enters the bloodstream.

The trial at the Lister Hospital, was started early this month. The hospital will seek to recruit 300 patients, who have tested positive for carrying MRSA on their skin, from the hospital's general medicine and elderly care departments. They will all continue to receive their normal infection control care but in addition 150 patients will receive the silver-lined pyjamas and linen and 150 others will receive standard materials. At the end of the trial, in approximately six to twelve months, the results of the two groups will be compared to see if the silver enhanced pyjamas led to increased MRSA eradication than traditional methods.

Noel Scanlon, Acting Director of Infection Prevention and Control at East and North Hertfordshire Trust, said: "The idea behind silver in bed linen and pyjamas, which is used already in a wide range of wound dressings and in cement used during bone operations, is that its contact with the skin may help to get rid of bacteria like MRSA, thus reducing the chance of that patient, or others elsewhere in the hospital, becoming infected.

"This is an exciting project and we are very pleased to be one of the hospitals involved. While time will tell as to whether or not silver-containing bed linen and pyjamas will have the positive effect anticipated by the researchers, it cannot ever be viewed as a magic bullet that will solve the problem of healthcare-acquired infections forever. aseptic medical procedures, careful use of antibiotics and keeping the patient environment clean."

It is hoped a second trial will take place at The Queen Elizabeth Hospital where patients who are carrying the bacterium but do not have an MRSA infection will again be split between silver-lined materials and the placebo pyjamas and sheets. The difference in this case will be that patients will not receive any additional antibiotics or other treatments to remove the MRSA bacteria from their skin. By comparing the different trials evidence should be produced to prove or refute silver's effectiveness.

Nothing like a little tiff amongst the experts. If the proof is so off-base regarding "deliberate manipulative interference", why then this deliberate attempt by the banking powers that be, to demonetise hard money, from forex to commodities say. Did they ask their customers if that was what they, the customer, wanted, or did they just go and do it, in connived collusion perhaps? A little like demonising tobacco whilst taxing it, having your cake and gobble it, hey? Cash, of course, is next in line, judging by the moratoriums on maximums and those convenient terror laundering controls out there.

Service costs, after all, are peanuts, we need to rehire-out debt and collect a usage-fee without any alternatives, that's where the money is. Once you've become accustomed to $5000 plonk with the sushi it's understandably difficult to rehabilitate. Heaven forbid any current or future savings by the rank and file out there. I'd agree with the concept of "deliberate manipulative interference" per se being a little far fetched, but that's hardly the point, it's enough for the donkey to wonder why he can't reach the carrot in front of his face.

Just like the housing bubble sprang from the need to re-balance dickey balance-sheets of debt-drenched corporates (with a little help from the appraising community), so will the drive to pure digital medium of exchange not accept any God beside himself, and that by any if advertorial means. (in case of doubt, I side with Powell)
Lebieque

http://www.mineweb.net/events/conferences/2007/622109.htmsnip:

CAPE TOWN (Mineweb.com) --U.S. Economist David Hale warned Thursday that a crisis in the New York hedge fund community over the next few months could cause a larger than "moderate" fall in commodity prices.

Speaking at the 2007 Mining Indaba, the Hale Advisors expert said that continued economic growth expected in the United States, Europe and Asia this year may see commodity prices dip between 20 and 25%. A slide in this range could be described as "moderate� when compared against historic price trends.

However, he cautioned that there were signs of crisis in the hedge fund community that has invested large sums of money in commodities. Hale suggested that stakeholders had to remember that hedge funds do not always have good risk controls in place, and could cause major problems in commodity markets.

"Hedge funds could cause large amounts of money to be withdrawn from the markets, we all have to watch very carefully what transpires in New York," he advised.

One of the most critical issues pertained to how distressed hedge funds would manage redemption of pension funds, and what spillover this would have in the rest of hedge fund community, according to Hale.

The good news for commodities was based on the fact that fears about a recession in the American economy have subsided, Hale said, with the country expecting modest growth of between 2% and 3% this year.

"With a gross domestic product of over $13 trillion, the U.S. is still an important consumer," Hale explained. "Its economy also has a spillover effect on regions such as Canada, China, Latin-America and East-Asia."

He added that prosperity in Africa, a by-product of larger changes in the global economy, was very broad-based, as developing worlds have exciting growth stories to tell, noting that China showed "spectacular" economic growth of 10.5% last year.

The strong economic growth in developing countries was driven by commodity prices, Hale asserted.

-Goldilox

Chicken Little, anti-gold spin, or legitimate warning? It's hard to tell!

http://www.mineweb.net/african_renaissance/621710.htmsnip:

CAPE TOWN (Mineweb.com) -- China's drive into Africa is not only motivated by the acquisition of commodity assets and securing energy supply on the continent, but also focused on creating a new global commodities market, opening trade and expanding agricultural production.

Dr. Martyn Davies, Chief Executive Officer of Emerging Market Focus, a South African-based research and strategy consultant, said Wednesday that Chinese presence on the continent was driven by a clear political strategy from Beijing. Davies is considered to be an expert on China.

In a presentation to the 2007 Mining Indaba, Davies said that China was seeking to extract itself from international commodity pricing strategy as the nation believed the existing market was manipulating commodity prices.

"The Chinese perceive the metals exchange as a rather expensive enemy that they can circumvent by buying direct from the source," Davies asserted. "Although we will see how this plays out over the next 20 to 30 years, I believe that we will see a parallel global commodity market established by the Chinese."

Davies suggested that factors such as the United States invasion of Iraq have fueled China's "paranoia" about energy supply, and have accelerated market entry and the acquisition of commodity and energy assets in Africa.

Trade-related issues also played a role, he said, as trade between African and China would soon exceed $100 billion dollars. He forecast that Africa would become China's largest trade partner within five years.

Davies said that Chinese capital was often better used and invested in Africa, and that the Chinese were not "overpaying" for assets in African countries. However, he added, one had to take into account that 65% of China's outward investment was owned by Chinese state-owned enterprises, which provided "political" capital for investment on the continent.

In contrast with Europe, which could view Africa as a burden, China and India regarded the continent as a commercial opportunity, he stated.

Davies said Africa was still very na�ve about Chinese involvement in Africa. Nonetheless, South Africa is calling for more multi-lateral engagement with countries about the commercial and political implications of an increased Chinese presence on the continent.

Asked about the absence of Chinese delegates at the Indaba event, Davies claimed the China did not engage in traditional modes of business and was not familiar with the notion of information sharing. Mineweb, however, has previously reported on the attendance of Chinese delegations at other mining conferences in the Americas. Chinese Central Government and provincial government officials have made presentations at several events.

Davies explained that the Chinese were succeeding in establishing a strong presence in countries such as Sudan and Zimbabwe, as deals in these countries were viewed as very political. Some African countries were also more open than South Africa that had regulations and requirements in place.

"China wants to broaden its soft power on the continent � it has a long term strategy of two to three decades in place," Davies said. "The country sees Africa as a training ground for operating in risky environments and managing natural supply chains."

Davies stressed that the Chinese were very pragmatic and tended to see matters in black and white. "They don't see why they should buy diamonds mined in Africa from Europe and therefore simply cut out the middleman."

-Goldilox

China is using its privilege of wealth one step better than Western "investors", by using its state status to "influence" deals and long term relationships. Unlike the West, which tends to cloaks its politics behind the machinations of the WB/IMF, China, as majority owner in its businesses, can deal "direct". It's just one more way the western "banking" metaphor is being outmaneuvered by a strong and wealthy China.

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

http://stockcharts.com/h-sc/ui?s=$CRB&p=W&b=3&g=0&id=p56093444173Since last may there has been already (looking in the rearview mirror ) a close to 25% drop in the CRB...

Interesting to not that this drop in the CRB happened to a very large degree because of Goldman's rejiggering of it CRUDE oil Component in that MEASURE .

( There will be continued and relentless attempts by "bnakers" to attempt to keep smily faces stuck to all fronts as they massage /manage the numbers to their own ends and the ends of BIG GOVERNMENT). That rejiggering of the OIl Component in THE CRB happened just in time for the big drop in OIL last summer.

There was a Hedge fund crack up in the fall of 2005 (it seemed to loom large in the news ; Refco was involved and Jim ROGERS got burned, if memory serves , big time ).

If one looks at the charts of gold and the crb at tht time of that hedge fund crack up , there was little if any significance on the price of GOLD OR SILVER except perhaps a little sideways chopping .

I think it interesting that Jim Rogers has already spoken relative to the issue of where commodities are going and why .

I don't know who Mr Hale is but over the years I've become accustomed to parrots getting in front of the microphone and speaking .........and saying things.........

I was mentored by a person whom I have great admiration for and because of his influence in my life , I came to know that NO MAN OR WOMAN has any AUTHORITY to speak out on any subject that HE OR SHE hasn't DONE...YOU DO and then you can speak with AUTHORITY ...

I can speak with authority about launching business....
I succesfully have done that on multiple occasions .
from ground ZERO . There are details involved that you come to understand that you can teach to others.
Your actions in the field make you an authority . Your success makes you an authority .

Mr JIM ROGERS and MR JIM SINCLAIR are two individuals that I have come to respect ........because of their experiential knowledge with respect to MARKETS , specifically commodities markets......

WHEN they speak , they speak with authority because they have authority based on experience in the field and success.

Jim Rogers said that "after the correction in the OIl Market" ,,,,,,,,,,Oil is going to $100 a barrel.

THE TRAINED AND ASTUTE who are WALL STREETS FINEST are going to stick their heads in the sand and run from the commodities markets .... if the HEDGE FUND COMMUNITY has a few knockdowns while THE PRICE OF OIL (the rejiggered component of the CRB : CLEAN UP HITTER FOR THE CRB : THE HEAVY WEIGHT OF THE COMPLEX) is going to $100.


There are a many things that would have to happen for commodities to go down another 25%......The CRB would be reading 205 .....HOW IN THE WORLD COULD WE SEE SUCH A DROP ?

WOULD SUCH a plunge happen in a time of war?

WOULD such a plunge happen during times of robust economic
growth (SEE CHINA INDIA )

WOULD Such a pluge happen in KONDRATIEFF WINTER

Would such a plunge happen in a LIQUDITY BOOM of the vastness that we have been witnessing ....to avert a deflationary spiral....

LOOKING in a Global Context at just these issues , Mr Hale's comments look like STATEMENTS given TO SCARE PEOPLE OFF the BALL

A Severe about face in all of the above circumstances can happen in a MELT DOWN ..

A SEVERE ABOUT FACE in all of the above contexts might take us back to 1929.......

THE FEAR caused by such instability in that DEPRESSION caused GOLD (HOMESTAKE MINING increased 10 fold and its dividends increased in like measure )

I don't know Mr Hale's background or his experience , but I know putting his statements in the context of Present Global Circumstances makes him look like a " PAID/made
CARNIVAL BARKER"


There are simple principles that rule ......what is ......

One of them is the production of MASS MONEY CREATION which is a cause .......

Money supply is growing faster than ever before ....15% per annum . Using the rule of 72 , in four years plus , we will double the amount of $$$ in the world....

SUPPLIES of commodities are not coming out of the ground that fast ..

I don't understand it completelty but I believe it is true, and I believe it is a rule .

WHen you grow your money in this fashion , You are making move dollars in existence CHASE limited RAWMATERIALS (which cannot be created out of thin air as money is now being created) . DEMAND for those RAW MATERIALS with and increased supply of MONEY is going to force the price of those limited supplies UP (KONDRATIEFF WINTER CHINA is holding big supplies of US FRNS and like many other countries has DECIDED TO DIVERSIFY OUT OF DOLLARS .....to INVEST IN RESOURCES )

Further CONTEXT CLUES make clear that the dollar is losing it's preeminence in the affairs of GLOBAL TRADE and therefore the demand for dollars is waining ......in the midnight hour of its reign .....Power Legitimacy and Authority go hand in hand on the global political front.

THE AUTHORITY AND LEGITIMACY associated with the dollar il lost on the actions of our leaders.......

Based upon what I hear him saying ........I think Mr HALE must be a dollar buff. People who stand with him in this vein are all going to be in the BUFF.....

It's very subtle but ,,,,,,,that's what he is promoting
His comments are completely without context economically and on a global level ........

He must be a TBOND SALESMAN .........
BUY YOUR TBONDS RIGHT HERE .....HEDGE AGAINST THE COMMODITY CRASH TO COME


A few weeks ago , TOUTS were saying that the commodity boom was over .......NOW WE ARE GOING TO HAVE A CRASH after a 25% CRUDE GUIDED CRASH ........

KEEP EATING YOUR GRUEL MR HALE ,,,,,,,,and good luck in your endeavors .......

You've risen as far as your going to go in the NETWORK that you are owned by.......

Make sure the establishment pays you well for your blurbs now ,,,,,,, No one will listen to you again .


WHO WILL THEY TROTT OUT TOMORROW to SPEAK INTO THE MICROPHONE?

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_gilbert&sid=aBDouX0a6h6o If Hedge Funds Kept Cows, Your Milk Would go Sour - Mark Gilbert - Bloomberg.com: Opinion | February 9, 2007
The famous joke about two cows used to define political systems, here is applied to the financial markets. Can you say brilliant?

http://stockcharts.com/h-sc/ui?s=$cci&p=W&b=3&g=0&id=p56093444173Cometose--look at the unrejiggered Continuous Commodity Index, which represents the commodity index without all the recent bogus changes, and you'll see through the deception, and that the commodity bull is actually alive and well.

Where is the smart money going ..... THe smart money is actually RUNNING TO THIS (not away from it )

THink Physics ; THe Law of Gravity ......

THINK PAPER vs REAL VALUE ?

I hope MR HALE's comments convince some invested the HEDGE FUNDS to Withdraw their money and seek other more REPUTABLE arenas toward investing their money in COMMODITIES.

Maybe his comments will convince those having second thoughts about having their money with professional gambler managers to relocate their funds and manage their risk themselves.........

Quit giving your money to SLICK GREASEBALLS who promise to make you 50% per annum using leverage .....

Manage your own assets ; BUY some bullion , coins , etc and then buy GOOD JUNIOR MINING COMPANIES that will give you all the leverage you need.
YOU CAN MANAGE YOUR MONEY BETTER than someone promising to take the responsiblity away from you and promising you BLUE SKY RETURNS......That'S the EXPRESS ROUTE TO THE POOR HOUSE......

Maybe that is what MR Hale meant when he tried to PUT THE SCARE ON THE COMMODITIES BULL.

I SAY TO THE BULL , HOOK EM HORNS!


HERE'S a WARNING ............

IF YOU DON'T GET ON THIS NOW and use this soft spot in this market to establish positions ,,,,

It's going to look like you missed the biggest bull of the decade(s) when GOLD GOES OVER $1000 ........ by that time It will have just knocked off its training wheels....and you'll be set for the ride .

PAPER SUCKS and MEN LIE ,, the TRUTH OF SILVER AND GOLD (as a hedge against the empty promises of PAPER PANDERING MONEY PRINTING BANKERS taking us to the outer limits of fiscal irresponsibility) ABIDE.

NICE ONE

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_gilbert&sid=aBDouX0a6h6oVery good for a laugh, and educational, too.

My only complaint is that under the heading "gold" he really didn't focus on gold, but rather played for laughs and took an easy (and probably well-deserved) potshot at society's lunatic fringe.

To rewrite his last section with a proper emphasis on education, as was largely done with the other entries, it would appear something like this:

-------------------
Gold

You have two cows. (And I mean you REALLY have them.) This is more cattle ownership than all of the above-mentioned schemes combined. Your position counts as true WEALTH; the others do not.
-------------------

Recommended reading for all.

R.

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

My friend Ehor ("The Mazurok-Ure Correlation" 2001) sent along this snip making it's rounds on the net:
"Political Math
The next time you hear a politician use the word "billion" in a casual manner, think about whether you want the "politicians" spending your tax money.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases.
a. A billion seconds ago it was 1959.
b. A billion minutes ago Jesus was alive.
c. A billion hours ago our ancestors were living in the Stone Age.
d. A billion days ago no one walked on the earth on two feet.
e. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

While this thought is still fresh in our brain, let's take a look at New Orleans. It's amazing what you can learn with some simple division...

Louisiana Senator, Mary Landrius (D),is presently asking Congress for $250 billion to rebuild New Orleans . Interesting number, what does it mean?

a. Well if you are one of the 484,674 residents of New Orleans, every man, woman and child would each get $516,528.
b. Or, if you have one of the 188,251 homes in New Orleans, your home gets $1,329,787.
c. Or, if you are a family of four, your family gets $2,066,012.

Washington, DC. Hello!!!!! Are all of your calculators broken?"

-Goldilox

But of course, as the GAO has revealed only 15% of the money "earmarked" for New Orleans actually gets put to use, so muliply the above by 0.15, and assume 85% for political chronies.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteWell, the PPT (Paddle packin' team) has arrived on schedule, but so far, they're only able to deliver $663 and change.

Agree. He rounded out his satirical summary with an oblique assent to gold by including gold, goldbugs and the "cattle standard" however variously misinterpreted, misunderstood and denigrated up to now- so the pointy hats "pointedly"
and starkly contrast the rest of his hapless sketches.

It's 10:00, time for the $15 smack down.

Betting that gold closes at $652.70 today. If not, as I said yesterday, this may be a brave new world that we are about to enter.

PA

I think there may be a job opening at the PPT in an hour or so if someone doesn't stem today's POG surge.

PA

@ PA,

Sinclair posted a Black Box trader job (temp) opening the other day - LOL

If not their job, they'r certainly losing their shirts, or shorts, as it were . . .

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=In what so far is a vain attempt at maintaining sub $1.30 EuroX, they (the Continentals) have been throwing both T's and Euros at the market today with gay abandon.
PM's saw right through the subterfuge and smoked, confirming the Grand cross-over, ID'd here on the 01/26th, is firing on all fours.
Curiously the INO box atop the page is now reporting decimals ..a-la red .62 on Bond whereas in the past, it's been in thirty-tooths ...probably another conspiracy!!

@ Cometose,

Some say it originated with "Kilroy was here", the grafittus left by US soldiers on their march to Berlin in '44 and '45.

If not originating then, it was certainly proliferated.

(8^) - Goldilox

http://news.goldseek.com/GoldSeek/1171037050.php2:55p ET Friday, February 9, 2007

Dear Friend of GATA and Gold:

Doug Hornig of Doug Casey's International Speculator letter cites GATA and our friend Mike Kosares of USAGold.com/Centennial Precious Metals in an analysis "About Those IMF Gold Sales." Hornig concludes:

"If IMF sales do happen and if they depress gold's price, that's a buying opportunity ... for bullion and especially for the high-quality junior exploration stocks that pack the most punch in a rising gold market."

You can find Hornig's analysis at GoldSeek here:

http://news.goldseek.com/GoldSeek/1171037050.php

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

http://en.wikipedia.org/wiki/The_writing_on_the_wall"...Using these holy items, the King and his court praise 'the gods of gold and silver, bronze, iron, wood, and stone'. Immediately, the disembodied fingers of a human hand appear and write on the wall of the royal palace the words "MENE", "MENE", "TEKEL", "PARSIN" (or "UPHARSIN" in a slightly different interpretation of the word)...."

...and read on...

:-)

...Australia has been running a trade deficit for as long as I can remember...even though our terms of trade are at record levels (in our favour).

We do run a fiscal surplus (lately), however, unlike the USA...but some would say that the fiscal surplus is at the expense of widespread indebtedness amongst the general public and in the corporate sector...

We do have a vibrant mining/exploration community however...

:-)

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

February 9 (Reuters) -- U.S. gold futures rallied on Friday to end more than 1 percent higher after hitting a seven-month peak amid strengthening oil prices, buying by funds and short-covering ahead of the weekend.

The COMEX April contract settled up $9.50 at $672.30 after peaking at $673.90, the loftiest level since Aug. 10.

David Meger, metals analyst at Alaron Trading, said gold rallied because of fund buying and higher energy prices. "It's not surprising that when we get these breakouts from a technical perspective, you do see fund buying on those breakouts," Meger said. Meger also noted that gold had been in a "nice, aggressive rally" since its pullback in early January when it was trading below $610 an ounce.

The April contract has gained almost 11 percent since it hit a low of $607.20 on Jan. 5

George Gero, vice president at RBC Capital Markets Global Futures, said gains came as investors positioned themselves ahead of the weekend's G7 meeting in Germany of finance ministers and central bankers of industrialized nations.

Gero said gold benefited from short-covering, buying back of futures previously sold to close out short positions, and strong energy prices and a weak yen.

The yen extended losses as doubts grew about whether finance officials at the Group of Seven in Germany this weekend would take any action to stem the Japanese currency's decline.

The dollar, however, was up against the euro, retracing some of its Thursday losses.

Oil breached the psychological mark of $60 per barrel for the first time in more than a month, driven by tightening supplies and worries about rising U.S. tensions with Iran. Iran's top authority Supreme Leader Ayatollah Ali Khamenei said Thursday Iran would target U.S. interests around the world if it came under attack.

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

http://www.gulfnews.com/business/Commodities/10103084.html10Feb07 (The Christian Science Monitor) -- More than a century after American mining engineers first opened up North Korea's gold mines, a fortune in gold and other metals and minerals offers the prospect for North Korea to ease the pressures of financial sanctions. The question, however, is whether North Korea can navigate around a US Treasury order that forbids institutions doing business in the United States from dealing with Banco Delta Asia in Macao, the main avenue for North Korean fin-ancial dealings.

The ban, first promulgated in 2002, has effectively frozen Pyongyang's efforts to conduct international business. While it doesn't extend to gold, experts say that US officials have made it clear that banks should not buy North Korean gold.

"The US has been using sheer force to intimidate banks from dealing with North Korea," says Colin McAskill, chairman of Koryo Asia Ltd, which invests in North Korea through the Chosun Development & Investment Fund. ... "We're at a very delicate stage." North Korea, says McAskill, "wants to move back into legitimate business."

Selling gold on the London market "is one way they can prove that," he adds.

One indication of North Korea's need to sell gold was its decision to provide information needed by the London Bullion Market Association (LBMA) to list the North's central bank as a 'good deliverer' of gold and silver. Listing with the LBMA is essential for refiners who want to sell their products in London. The bank's listing was suspended two-and-a-half years ago when it failed to respond to LBMA requests for "proactive monitoring".

Despite the listing, experts say the big banks that are major buyers of gold - and form the LBMA's core membership - are not likely to flout the spirit of the US Treasury order...

At the same time, the North has sold relatively small amounts of gold in Thailand, with which it has developed a strong trading relationship in recent years. Last spring, North Korea exported 1.3 tonnes of gold to Thailand for nearly $30 million while also looking for markets elsewhere in the region.

"Why would you go to the trouble of going to London," asks Roger Barrett, whose firm, Korea Business Consultants in Beijing, is helping to develop gold mining in North Korea. "They are totally entitled to sell their gold."

With foreign expertise, North Korean mining may return to the period between 1983 to 1993, when its central bank sold an average of one tonne a month on the London market. "What we are doing is normal business," says Barrett in Beijing, explaining the efforts at reviving the mining industry. "We are creating jobs for people, in line with the UN basic charter, in line with economic growth."

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

R.

http://www.usagold.com/gold-price.htmlProbably the most fundamentally sound bull market to be seen in many generations. And frankly, he's still just pawing (hoofing?) the ground. Too bad most folks will be sidelined when the real charge occurs...

R.

from the Wikipedia entry posted by Sundeck:

The Oxford English Dictionary entry on writing has literary references to this phrase in English, including the following verse from the poem "The Run Upon The Bankers" by Jonathan Swift:

"A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall."

http://stockcharts.com/h-sc/ui?s=$CRB&p=W&b=3&g=0&id=p56093444173Didn't like that gold move today .......think the HUI smells a rat ...........

How did the CRB like it Interesting chart below

Must have been a reaction to Hales scary Commodity story

Meanwhile in the Pits what did the commercials have to do this week trading futures and options

IN SIlver the commercials
were net short 2000 contracts

IN Copper the commercials were net short 300 contracts

In GOld the commercials were net short another 13000 contracts.


I think the HUI smells a rat ...........

Rat may come to call on Monday this week.

and of all places to be found in this context.......

Goldilox, I like that idea. And are they disposable?......
happy weekend..

Druid: The paper cartel is scaling up and regulating the price much like a relief valve. Until China and Russia can clearly demonstrate a military superiority, the price will hit the next defined level. Iran is the wild card and could provide the justification for paper chaos, especially directed into our paper markets. We'll all think we're rich.

Happy Golden week-----end~

It was interesting to find out how some stock brokers pegged this week as "BORING" I wonder why? Could it possible be that people are catching on to the biggest_____ going?

I think it might seem odd that they did not make the big commissions that they have been use to.

I've also heard that many Blue Chip companies have had some good performance ratings and so on. Well, if this was the case why did the stocks simple stall this week? For having such good company ratings and lack luster stock performance I wonder if the pause finally gave away to GOLD'S great performance!

I would say that this week for gold was far from boring. Now I wonder why?

All I want for my love.....IS GOLD!!

GF

February 6 � Bloomberg (Steve Rothwell): "Credit derivatives, the fastest-growing business on Wall Street, are squeezing returns for bondholders to an all-time low. Contracts that protect investors against defaults are being sold in record numbers and then bundled into securities known as collateralized debt obligations. CDOs are driving down the cost to protect against non-payment so much that even the government of Argentina, which reneged on $95 billion of debt five years ago, is paying less than ever to borrow. �CDOs are changing the economics of investing in corporate bonds,� said Lorenzo Isla, head of structured credit research at Barclays Capital in London. �By expanding the investor base for corporate credit risk, they compress the spreads available to corporate bond investors.� Bondholders have halved the amount they charge high-risk companies in the past four years to a record-low 2.6 percentage points on average over U.S. Treasury notes� CDOs that invest in derivatives of investment-grade bonds return as much as 12 percent a year, three times more than the yields on the underlying notes, according to data compiled by Barclays Capital."

http://www.bloomberg.com/apps/news?pid=20601083&sid=aSmnVIJKw0L4&refer=currency ECB's Trichet Says Carry Trade Poses Financial Risk
Bloomberg - Currencies - Feb 10, 2007
Edited, short statements from Trichet and (shallow) contradictory assessments of economic outlook out of the G7

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

http://www.galmarley.com/Chart_pages/currency_charts.htmAs the paper sages chow down in Davos it's curious to note Loonie resistance to breaching it's recent PoG high.
All other currencies were happy to soften up on Friday with the exception of Can$. (the Pound is a bad read I think).
Of course the Yen, who capitulated to PoG earlier in the week and has continued to soften, has come in for a good deal of potty-mouthing out of G7.
So the trick is to stealthily weaken your currency visavee all the others BUT somehow better or best PoG?

No wonder these blokes are so well fed.

http://www.xe.com/ucc/convert.cgiThe GBP PoG chart at galmarley looked a bit sus, so I went to find the REAL GBPPoG ...hmmm?
Galmarley = 335.39 ..the Yahoo's tell me it's 314.56 ..and the one I put my faith in (linked) is at 341.62
So I'd be buying from Yahoo ...and selling via XECom eh!

http://www.voy.com/64855/From another gold blog yesterday:
@stock market -- trotsky, 15:34:57 02/09/07 Fri
a few data points:
1. the mutual fund cash to assets ratio is at an all time low of 3.9%
2. NYSE margin debt is only a shade below its March 2000 all time high, having expanded back to over $270 bn., from the 2002 low at about $140bn.
3. the bullish consensus is off the charts in many respects (measures such as Market Vane or Consensus Inc. have hovered close to all time record territory for weeks, and speculators hold extremely large net long positions in all stock index futures combined).

conclusion: the stock market echo-bubble will end sometime this year. the only question is when exactly. if the collapse in mortgage bonds isn't a sufficient trigger, the coming blow-up of the yen carry trade may well be. the speculative net short position in yen futures is at yet another all time record high of nearly 165,000 contracts. the underlying value of this position is staggering. when it unwinds, it will imo trigger a chain reaction across all risk assets."
Mikal-- Not much different conclusions from others we've seen. He also remains open to numerous outcomes,
a necessary perspective increasingly difficult to abide
during increasing complexity. Gold is one of the world's forces, like gravity, that gently, invisibly contain the whole financial/economic works and discipline it from becoming completely unmanagable.

http://www.gold-eagle.com/gold_digest_05/hamilton020907.htmlWe are pleased to announce that this august forum is the primary source all the news that's fit to print, especially with respect to the CRB (or shall we say CCI). The hot scoop on the CCI as the true measure of the commodities trend (versus the doctored CRB) was first posted here several days ago. This information then drifted over to Jsminset.com a day or two later, and now it has apparently just landed in the creases of the referenced article below--much to the surprise of the distinguished prognisticator author (and his subscribers I imagine as well), but NOT to the surprise of any regular reader of this excellent forum! And I might add, this forum is FREE! Isn't it nice to get SOMETHING for NOTHING! 'Nuf said!

"...we strongly suspected that the CRBr10 was not faithfully telling the story of commodities, but we had no way to prove it until I was told about the CCI last week. Despite this, since the October lows we have been aggressively buying elite high-potential commodities stocks in our newsletters to take advantage of the low prices and rotten sentiment. Most of our new trades since then have been gold-stock trades since we feel gold's young upleg has particularly exciting potential...

The bottom line is the Continuous Commodity Index, an extension of the old ninth-revision CRB's calculation methodology, components, and weighting, decisively shatters the false notion that there has been some catastrophic commodities breakdown. It is a myth. A new never-before-seen "CRB" index was driven lower by oil, but it wasn't the same index that made the secular uptrend in the first place by a long shot.

All bull markets climb an endless wall of worries and this one is no exception. Some worries are valid, others are not. Next time someone tries to get you to buy into a bearish theory based on the CRB breakdown, realize that it is utter nonsense. The true CRB never broke down and instead broke out to achieve new all-time highs recently. There is nothing remotely bearish about the ninth-revision CRB's behavior over the past six months."

Appears that the POG suppression forces are giving the market the "GOLD FINGER" over the weekend per the INO charts above.

Rats need the darkness to operate in abandon. As it relates to this forum, they sometimes send an underling to preannounce the resumption of their nefarious doings.

Be wary of those that wear their emotions on their sleeve (i.e. "I love gold!!!!!"). They may be agents of those who seek the opposite of what they outwardly embrace.

Take care,
PA

Don't be so cynical. I am sincere in my quest and ideals on gold. I wish more would be and if a small correction here and there happens it's not to worry. The statistics speak for gold. Most markets will be in for some bumpy rides. But the sparkle of my eye is the timelessness and enduring shine of GOLD!

My true love is....GOLD!

http://news.bbc.co.uk/2/hi/in_depth/south_asia/2007/india_rising/I have one more thought. I was reading and/or listening to the BBC series on India.

Most fascinating how you claim that one should "be wary of those that wear their emotions on their sleeve". From what I can gather many in India do just that. It was fascinating to know how many in this most populated country view wealth, banking and the their own government and taxation.

The so called "Black market" is an underground movement that has a duel accounting system. The books are cooked to show what "they" want others to know and see (usually very modest income if not near poor).

The other is a means on how they actually accumulate their wealth and measure it. It is kept in private. It would not be unusual to find an Indian house hold hording or stashing gold, silver or other precious objects. Gold and silver are sometime melted down and stored in convenience this way. I gained some interesting insight on the Indian people. It would not surprise me one bit that most Indian people have much more than meets or MELTS in the eye. Who fooled who here?

Don't rat's like shinny objects to carry home?

I take great comfort in the fact that I am planning my future that is wrapped in gold. It's not a lie or a myth, but sheer fact that this one day will be what I have always said......the sparkle of my eye!

Have a golden weekend.
GF

http://english.people.com.cn/200702/11/eng20070211_349197.htmlChinese finance minister discusses world economy with G7 in Germany | People's Daily Online | February 11. 2007
This short article tries to cover a lot of ground AND cover someone's butt AT THE SAME TIME- because in the short page it mentions "global economic imbalance" three times,
"stability" three times, "economic crisis" once and peppers "developed", "developing nations" and "development"
throughout. It seems like the translator, writer and/or editor effort to mince their words(soften the message, speak euphemistically, politely) did just the opposite.

:-)

One day you will really kick your self in the pants when gold hits well above 1,000.00 USD.

Now, up or down gold is undervalued and always a great time to buy. Take the opportunity when it's down "a few" to get some!!

In other words less talk and more do is appropriate!

Ensure your spot in gold's future.

GF.

This was a gold market in no hurry,
'Cause it loved to climb the wall of worry:
"I'll take a small rest,
Then resume my quest,
Until bears will no longer be furry.
You may take this in jest,
But keep it close to your vest-
When it's underway it will all look blurry."

This IS curious, we've now got a $10 drop in PoG and all currencies now in agreement.
It's 1815hrs on Sunday eve here in OZ ...where is Gold trading on a Sunday that can tank PoG 10 Bucks?

I know ebay of late has been coughing up the odd bargain over the weekend as PoG/S climb the wall of worry, but this is rediculous!

Never Fear....

Perhaps some bank sold a 100 + tons to cover some bad debt. With all the activity in various fiat I would not be surprised. Maybe some needed to cover losses in hedge funds now that the Price of OIL is marching up. Worry.?.just a bump in my book~

GF

http://quotes.ino.com/chart/?s=FOREX_XAUUSDOLooking here, there's no worries, mate.

R.

I agree. It's very fishy.
Smells like another twisted imitation of Christ's 'Miracle of the Fish'. But the loan sharks have about run out of feeding time; weekends don't satisfy them any more. Their ribs are showing...

Randy etal,

I looked at the INO which didn't confirm the drop as Randy points out but the Galmarley Charts AND the XE.com have both dropped ...admittedly K is still showing 666 and another (live) site I watch is at 665.1

We'll see in the morning.

http://www.taipeitimes.com/News/biz/archives/2007/02/11/2003348586AFP AND CNA, NEW YORK AND TAIPEI
Sunday, Feb 11, 2007, Page 10

The yen lost ground on Friday as G7 finance ministers met to debate European demands for action to propel the Japanese currency higher.
Traders said, however, that US and Japanese opposition was likely to see the G7 powers fail to adopt a common position on the yen's weakness.

The US dollar rose to ?21.71 around 10pm GMT from ?21.04 late in New York on Thursday.

The euro moved up to ?58.28 from ?57.82 on Thursday.

The US currency dropped against the New Taiwan dollar in Taipei on Friday, losing NT$0.039 to close at NT$32.971.

A total of US$757 million changed hands during the day's trading. The US dollar opened at NT$33.010 and fluctuated between NT$32.950 and NT$33.025.

The euro fell to US$1.3003, from US$1.3038 on Thursday.

G7 ministers and central bankers, joined by officials from key economies such as China, convened in Germany on Friday to take stock of the global economy. Disagreement seemed likely over the enfeebled yen.

The yen has fallen by 9 percent against the euro since last April, prompting fears in Europe that eurozone exports will become less competitive, so hurting a nascent economic recovery.

"It is self-evident that we will talk about exchange rates," German Finance Minister Peer Steinbrueck told an opening news conference at the G7 meeting in the city of Essen.

The 13-nation eurozone is pressing for concerted action to drive the Japanese currency higher, but the United States and Japan do not see the yen's exchange rate as a problem.

"The market thinking is that while the yen will be discussed at the G7 meeting, it will be difficult to get a consensus opinion, and so no action will be taken," said Ian Stannard, currency strategist at BNP Paribas.

Both Washington and Tokyo have suggested the Japanese currency is fairly valued by competitive markets as the world's second-largest economy is still struggling to shake off deflation.

Japanese Finance Minister Koji Omi has said that foreign exchange rates "should reflect fundamentals" of each economy, reflecting the government's view that Japan's economic recovery remains fragile.

The yen has fallen to a four-year low point against the dollar and an all-time nadir versus the euro since the Bank of Japan decided to leave its super-low interest rates on hold at 0.25 percent last month.

Commonwealth Bank of Australian senior currency strategist Richard Grace said the dollar would continue to find support over the next six months because US interest rates will remain higher than those in the eurozone and Japan.

The pound bought US$1.9493 at 10pm GMT, from US$1.9584 late on Thursday.

The US dollar stood at 1.2475 Swiss francs, from SF1.2459 on Thursday.



Hmmmm....continued.....

I am not sure that I trust anything that has G or 7 In it let alone together!

GF....to be continued since I am reading a bazillion things~

http://isht.comdirect.de/html/detail/main.html?hist=1d&sSym=GLD.FX1&C_Underlying=GLD.FX1&C_WntTyp=C&C_basis=C_Underlying&DEBUG=0∈d0=VOLUME&sCat=IND&sIsin=n%2fa&sTab=bigchart&sWkn=n%2fa&type=CONNECTLINE Einzelwert Chart is unchanged also.

I've see this stuff happen before on weekends.
Usually it's a smaller amount that goes back up Sun. night and Monday morning into Australia and Asia.

Yep, the odd 0.50 here and there but $10 is a bit much eh? Galmarley recovering now but GBP/PoG still looking recalcitrant.
I wonder if this is the start of it?
Recently PoG has been thumbing it's nose at LBMA Fixes and running amok on Paper.
Real metal types might have had enough ...
...that'd be fun, but MAY not be conducive to a higher PoG in the short-term!

http://www.galmarley.com/Chart_pages/currency_charts.htmI'd think the two Charts below (mikal and Randy) have stalled for the weekend whereas the Galmarley Chart (linked) is still huffing and puffing.

http://www.page88.co.za/cr/weekend.shtmlThere is no real trading over the weekend. Quite a few retail platforms are merely streaming out arbitrary or old data automatically.

"The market opens in Wellington in the morning. Anything in between New York close on Friday, and the Wellington open is not real. Anyone who wants to tell you different should go back to Macau, Vegas, or Atlantic City..."

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

http://news.yahoo.com/s/ap/20070211/ap_on_bi_ge/money_ap_pollHere's the new dollar coin being minted.

We'll know soon enough CR as Wellington kicks off in a couple of hr's.
The issue seems to be related to a late Friday dump in GBP PoG from 341 to 335. There was no corresponding FX adjustment.
At Midnight Sat (GMT) the Currencies all re-adjusted their PoG to synchronise with GBP.
We NOW see GBP PoG drifting still lower @ 333 and US$ PoG bopping between 655 and 661.
On this basis you'd get the impression that Gold is trading "primarily" in GBP rather than USD ...and GOLD has a much larger say in things than the masters of the universe would have us believe.

...it COULD be all related to the Wanta settlement, or Tony Blair/ Cheney arrest or Niburu or whatever but bottom line, I for one put off a multi-Oz Gold purchase over the weekend due to these PoG shennanigans ...and I'd be just one of Thousands imo.

Sinclair has mentioned this a number of times. It seems one of their favorite PPT trick is to report a small sale after the bell below the closing price.

Nothing new here.

I find it noteworthy that the well-known site, www.rense.com has been down for several days now.

SIERRA

http://www.acnnewswire.net/press/en/35190/Australasian-Investment-Review.htmlsnip:

Sydney, Feb 12, 2007 (ACN Newswire) - Another six month high for gold in New York as oil priceshit $US60 a barrel and worries continued to mount about the health of some parts of the US mortgage industry and some of the participants.

And it's not just gold which is reacting to the rising oil prices.

The prices of wheat, corn and sugar, raw materials for popular alternative fuels, are also becoming more volatile.

Oil rose above $US60 a barrel before settling a touch lower while the prices of some base metals, such as copper jumped as well. Gold prices roses just over three per cent last week in the US.

It's the sort of finish the Australian market likes to hear when trading starts Mondays, but Wall Street was down because of the worries about the impact of higher oil prices on inflation and those fears about the mortgage market.

New York gold for April delivery rose $US9.50, to $US672.30 an ounce on Comex division of the New York Mercantile Exchange: that almost matched the $US673.90 reached earlier in the week. That was in turn the highest price since July 17 last year.

-Goldilox

Still holding strong in the early hours of Sydney market.

Giving Credit where Credit is Due.

Thanks Sir TownCrier, Msg. #151975, for the Forex chart showing one heck of a gap.

USAGOLD, Msg.# 151984, POG adjusted for inflation.

Remember the $2.00 up days. Then the $6.00 up days. Add to this the $10.00 up days. Oh yes the reversals but lets keep it positive.
POG at $260.00 then $330.00 Hitting $500.00 and the spike to $725.00.

VOLATILITY! I love it! I am sure that Gold will exceed $850 yet have to rethink future plans as it approaches $1000 per ounce. Those that feel uneasy as this progresses should not feel that way.For it was them who started it all. We were just smart enough fortunate to see the signs and find this Forum.

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

...green 12 looks a lot better than green 1 eh?

How they rationalise GBP/USD will be fun to watch!

The transformatiom from pollywog to Shellback has indeed been a long endurance.

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

I do not know if I am going to get my point across because as the subject states, Processing Information, for anyone can be the Make or Brake point. I spend hours reviewing editorials from this and other castles only scratching my head as to a possible outcome in the Precious Metals Market. The eradication of the M3 report and the adjustment of the CPI to name a couple that were at one time, stable and you could count on the numbers. Now I drift towards other indications oF DISTRESS amoung the people as Gasoline/ Heating oil is in a state of flux. In Mexico there was a protest as to the price of Tortillas. The price being 8 pesos and I thought this to be as the Colonist of the First 13 colonies we angered at the price of Tea and the Stamp Act. My question is, Will there be more uprisings as the inflated price of goods becomes unbearable. To say that a 50 lb. sack of rice or corn as a commodity is eqivilant to a half ounce of gold. Which is eqivalant to two goats or 100 fiat dollars. I do not know but expect that the POG reverberates from top to bottom around the world in some from or another. No one person or culture is untouched. While the IMF is off selling gold to save its skin or the CB's sell gold sell gold to surpress, there are many who wonder just what is happening to them. After all there are more misfortunates in this world. So I am thinking if the dollar is the Reserve of the World. What is going to happen when the multitudes (and I mean the down trodened) finally had enough.

I am a little off center on this topic but if you use Trickle Down Economics on a world scale, I am sure it fits.

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

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=goldMktRpt&storyID=2007-02-12T010110Z_01_SP115791_RTRIDST_0_MARKETS-PRECIOUS.XML Gold Extends Gains, Hits 7-Month High�|�Markets�|�Reuters.co.uk - Singapore - February 12, 2007

http://www.gata.org/node/48118:38p ET Sunday, February 11, 2007

Dear Friend of GATA and Gold:

The satirical column by Bloomberg News Service's Mark Gilbert, appended here, may be important mainly for showing that Bloomberg has heard vaguely of complaints about manipulation of the gold market, which may be a start. Your secretary/treasurer has written to Gilbert tonight with a request that he look into the issue a little more. That appeal is appended as well.

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

* * *

If Hedge Funds Kept Cows,
Your Milk Would Go Sour

By Mark Gilbert
Bloomberg News Service
Friday, February 9, 2007

http://quote.bloomberg.com/apps/news?pid=20601039&sid=aBDouX0a6h6o

A famous series of jokes attempts to define political systems.

In communism, for example, you have two cows and your commune seizes them and charges you for milk. In a democracy, you have two cows, the cows outvote you 2-1 to ban all meat and dairy products, and you go bankrupt and starve to death.

Similar thinking can be applied to financial markets. Here, then, is the world of money recast in bovine terms.

Leveraged buyouts: You have two cows. You come home from the fields one day to find Henry Kravis chatting to your spouse at the dining-room table. Two days later you have no spouse, no farm, and no table. Two guys the size of sumo wrestlers have saddled up the cows and are riding them around the farmyard.

Currency market: You have two cows. China has 1 trillion cows. Guess who sets the price of milk?

Bond market: You have two cows. One is Brazilian, one is Australian. They yield 25 quarts of milk per day. That's half as much as three years ago, when you traded your less-lactiferous German and U.S. cows for them. You are thinking of swapping for a pair of Namibian cows. They only have three legs but, hey, they produce 26 quarts per day.

Derivatives: You have two cows. You repackage five of them into a Collateralized Lactating Obligation, pay for a AAA credit rating, and slice the CLO into 10 pieces and sell it to investors, skimming the cream from the milk for yourself. Three of the cows fall ill and the credit rating plummets. You get to keep the cream.

Hedge funds: You have two cows. A guy in an open-necked shirt drives up in his Bentley and offers to take care of them for you in return for a year's supply of steak and 50 percent of their milk. They won't be allowed to leave his compound for two years. Six months later, you have half a cow, producing sour milk. "You have to be willing to lose rump today to get rib-eye tomorrow," the hedge-fund guy mumbles through a mouthful of sirloin and champagne.

Economics: Assume two cows.

Carbon-emissions trading: You have two cows. They produce 1.2 tons of methane gas per day. After a hefty donation to the re-election campaign of your local representative, the government gives you enough emission permits for six cows. You sell three permits, buy another cow, and apply for a European Commission grant to build a methane-gas power station.

Microsoft Corp.: You have one old, tired cow. A recent heart transplant may have come too late to save the beast.

Google Inc.: You have no cows. You slap advertisements on everyone else's cows. The milk floods in. You use the proceeds to reinvent the cow.

Apple Inc.: Nobody wants your cows. You design the cutest little milk bottle. Now everybody wants your cows.

Goldman Sachs Group Inc.: You have 26,467 cows. They are strapped into the milking machines 24/7. Some of them have more hay than they could ever hope to eat. Others aspire to one day having more hay than they could ever hope to eat. The cows with the most hay end up with big government jobs.

Pension-fund management: You have two cows. How boring is that? You pay a month's supply of milk to a consultant, who advises you to sell one cow and buy two aardvarks instead. The aardvarks die. The consultant charges you four months of your (now reduced) milk supply and advises you to sell half of your remaining cow and buy a wombat. The wombat dies. The consultant charges eight months of milk for a copy of his new report, "Two-Cow Strategies for Alleviating the Impending Pensions Crisis."

Russian energy: You have two cows. Comrade, those cows are an environmental hazard. We suggest you hand one of them over to us.

Credit-default swaps: You have two cows. You buy insurance against them dying and tuck the contracts into the middle of that tottering pile of documentation on your desk. One dark night Henry Kravis sneaks off with your cows. By the time you track down the paperwork, your now-worthless contracts have expired.

Interest-rate swaps: You have two cows. You pledge one of them to me as collateral in a swap for some of my pigs. I pledge the cow to my neighbor as collateral in a swap for some of his sheep. He pledges the cow to his cousin as collateral in a swap for some of his cousin's goats. Better pray the livestock market doesn't crash and we have to try and round up that cow.

Commodities: You have lots of stocks and bonds but no cows. Are you crazy? Cows are the hot new market. Here, buy this exchange-traded cow futures contract. It can't lose. It gained 40 percent in the past six months.

Gold: You have two cows. You wear a cap you made out of tin foil so that the tiny black helicopters can't read your thoughts. You spend your days blogging about how the government's decision to abandon the cattle standard in 1933 was part of a global conspiracy by the world's central banks to destroy the value of your herd.

----------

Mark Gilbert is a Bloomberg News columnist. The opinions expressed are his own.

* * *

Sunday, February 11, 2007

Dear Mr. Gilbert:

When I read your Feb. 9 column's crack at those who complain about central bank manipulation of the gold market, I had to wonder whether you were aware of the speech given in June 2005 by William S. White, head of the Monetary and Economic Department of the Bank for International Settlements in Basel, Switzerland.

White said that manipulating the gold market is a primary purpose of international central bank cooperation:

http://www.gata.org/node/4279

I'll attach an original copy of White's speech.

The manipulation of the gold market by central banks is far more than the hallucination of people who wear tin-foil hats; it is simply a matter of public policy and public record, ascertainable in any number of ways, even as it has yet to provoke much interest from financial journalists.

If you managed to interview White about what he and the BIS know about the gold market and what central banks do there and why they do it, it might make a very interesting story, even if it would require a little more effort than making fun of an issue you may not know as much about as you think.

With good wishes.

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

I need one of those "Tin Foil Hats"
My Mickey Mouse Hat don"t work anymore.
Slingshot---------<>

http://www.ft.com/cms/s/022c1294-ba3e-11db-89c8-0000779e2340.html How an ECB Intervention Could Help - FT.com / Comment & analysis / Letters / 02-12-07

Mikal--> This sort of CB intervention "to lower the euro/yen exchange rate cross" is nothing new as the writer documents.
The fact remains, inflation/devaluaton of currencies through official money supply and the rapid acceleration of it's proxies such as corporate bond issuance mortgages and derivatives, ensures the cheapening of the euro and the yen vs gold- almost making the US $ look good!
POG in euros continues to demonstrate outsized returns
while (it's chart is)signalling favorable new entry points again and again.

I did enjoy your post but wanted to ask you if gold has different prices for the same commodity from different parts of the world. Example sweet crude. One barrel from Saudi Arabia and another from Africa. Why I ask is that one barrel may have more taxes or whaterver, even as the POO on the international market may be lower.
You can use Beef if you want too.
Slingshot--------<>

http://www.ft.com/cms/s/27711804-b8ab-11db-be2e-0000779e2340.html Four dangerous words we must remember as false warnings of financial crisis lead to overconfidence
FT.com / Comment & analysis / Letters - Saturday, Feb 10 07

I am spooling up over a few points that cascade in my mind. Some I have control over, while others I do not. What I do take offense to is the ever ending hype given to certain products. Over speculation at its finest. Price gauging at the least. The only answer is Supply and Demand with a Moral foundation. It use to be you could buy something without no hidden costs. Now it is the norm.
Call it taxes.

To point out I did make note to another Knights post about taxes and though we do not say it, Gold is the answer.
Slingshot-----------<>

The U.S. had a net liquidity deficit in every year since 1950 (with the exception of 1957), Up to 1976 (when the private sector contributed its first trade deficit ) these deficits were entirely the consequence of excessive U.S. government unilateral transfers to foreigners (re: foreign policy � solely our far flung military bases and personnel). During all this time the private sector was running a surplus in all accounts: merchandise, services and financial. The Vietnam Ten-year War administered the coup d�etat to our gold bullion standard. By 1968, in an effort to keep the dollar at the $35 par, we had exhausted nearly two thirds of our monetary gold stocks, or approximately 700 million ounces to about 260 million ounces.

First Time Poster?
Hope to see more from you. That also goes for the rest of you lurkers. Newbies and first time investors. I want to hear from you. This Forum is the best. I have been posting for close to Five years? The responses to my questions have been most informative. They have a passive eye to my poor punctuation and spelling ;0)
Welcome.
Slingshot-----------<>

OK?
Slingshot------<>

There are increasing numbers of advocates for the adoption of some form of gold standard. Gold standards of whatever type, gold coin, bullion or some modification of the gold bullion standard, all require that the unit of account be defined in terms of gold of a certain fineness, e.g., one dollar equals 25 grains, 9/10 fine, thus establishing the mint price. The other sine-qua-non requires the government, acting directly or through the agency of a central bank, to stand ready at all times to buy or sell gold at the mint price.

An operating old standard creates, or is associated with, many advantages: 1) stable foreign exchange rates; 2) free multilateral clearing of currencies among nations; 3) the maximization of multilateral foreign trade; and, 4) relatively stable price levels e.g., no chronic inflation. All that is required to achieve this economic utopia is a 1) world free of major wars, depressions and cartels (OPECs); 2) markets with downward price flexibility, that is , true price competition; 3) creditor nations which impose no significant restraints on imports; 4) monetary authorities who abide by the "rules of the game", i.e., the central banks expand credit (create commercial bank legal reserves) when gold stocks expand, and vice versa; 5) monetary authorities who restrict the expansion an d contraction of central bank credit within a very narrow range, thus preventing the commercial banks from creating an unsupportable volume of credit money (demand deposits); and, finally, 6) a world where the reserve currency countries (those countries whose currency serves as a store and standard of value as well as a transactions currency) never operate with chronic deficits in their balance of payments.

Note: deficits or surpluses refer to changes in a country's gold stocks and net short-term claims (demand deposits, CDs, commercial paper, etc. � the "balancing items" in the balance of payments.) deficits result from gold exports and/or a decrease in short-term claims against foreigners relative to the short-term claims held by foreigners. The reverse is true for surpluses.

From 1816-1914 these conditions were achieved under the aegis of the Bank of England to an extent sufficient to provide international trade, and the British domestic economy, with all the advantages of a free gold standard. This period marked the heyday of the gold standard. The British pound sterling was the reserve and transactions currency of the world. International transactions were financed largely by transfers on the books of the "big five" London banks, thus minimizing the necessity to transport gold. So great was the faith in the convertibility of the pound sterling, that the Bank of England could, and did, operate with relatively small gold reserves. A change in the central bank's discount rate, or a small change in the buying price of gold (not a devaluation or a revaluation, but simply a change in the price sufficient to offset implicit interest and shipping costs) usually was enough to prevent significant or unnecessary outflows of gold.

World War I ended all this. Attempts to restore the gold standard in the 1920's were swallowed up in the Great Depression. For most of the period from the end of World War I to 1968, the world was on a U.S. dollar standard, but never a free gold standard. World War I transformed the U.S. into a creditor nation, left our industrial capacity expanded and intact, and set in motion forces which made our economy the safest haven for foreign capital seeking escape from foreign nationalization. World War II and the Great Depression accentuated these trends. But the U.S. tended to ignore its responsibilities as the world's principal creditor nation and reserve currency custodian. We severely restricted imports through sky-high tariffs (Hawley-Smoot, 1931, for example), customs red tape, commodity classifications and other devices. The volume of Federal Reserve Bank credit was determined more by domestic considerations than by gold flows.
In April, 1933 we nationalized gold, made the dollar inconvertible and by administrative fiat capriciously raised the dollar price of gold in a series of steps from $20.67 to $35 per ounce. All of this was done even though were a creditor nation and had a chronic surplus in our balance of payments. In January, 1934 the Congress codified these administrative actions into law. Under this modified gold b bullion standard, the dollar was convertible on foreign, but not domestic account at $35 per ounce.

Before we commit ourselves to the na�ve proposition that a successful gold standard requires only an Act of Congress, we should examine the reasons for the abandonment of gold convertibility in March, 1968. That was the month and year the U.S. Treasury ceased to sell gold on the open market. No longer could foreigners buy gold and the London or any other exchange at $35 per once.

The U.S. Treasury held approximately two thirds of the world's monetary fold stocks in 1949. They resulted from years of surpluses in our balance of trade and "flights" from foreign currencies. In 1949, the U.S. dollar was not only as "good as gold", but it was also preferred over gold. There were not enough dollars to finance the legitimate needs of the world economy.

With the outbreak of the Korean War in 1950 surpluses turned to deficits. With the sole exception of 1957, these deficits (usually of increasing magnitude) have characterized our balance of pay6ments in every year since. For the first few years, the deficits were beneficial. But a good thing can be over done and we did it. In our efforts to police the world, we overcommitted ourselves. This zealotry finally leg to the escalation of the Vietnam War in 1965 and the subsequent demise of the dollar as the reserve currency of the world.

Note: Until 1971, the private sector always operated with a surplus. These surpluses were more than offset by the excessive unilateral foreign transfers by the Federal Government. Since 1971, the Federal Government can share the blame. U.S. industry has become less competitive, but the principal villain (since 1973) has been OPEC.

By the mid 1960's foreigners found themselves in possession of excessive dollar balances, excessive in terms of the n needs of trade. Some of these excess dollars came to be used as "prudential" reserves in the formation and growth of the Euro-dollar banking system. Other excess dollars were used to buy our under priced gold (under priced as a consequence of chronic inflation). Our gold stocks, which were about 700 million ounces in 1949, had fallen to about 260 million ounces by March, 1968. Had the Treasury not abandoned its effects to maintain the equality of the market price with the mint price, our entire monetary gold stocks probably would have been depleted by the end of 1968.

Paradoxically, the Euro-dollar System, (now a foreign-dollar prudential reserve banking system) which was established both because the dollar was in excess supply and the reserve currency of the world, is now one of the principal factors militating against any attempt to reestablish the convertibility of the dollar into gold's at a fixed price. We are not even willing to give the Fed the degree of control over our own domestic money creating institutions.

Regardless of whether or not our objective is establishing a gold standard, the situation requires measures be taken which well reverse the deterioration of the dollar's integrity. What is required is no less than an end to the chronic liquidity deficits in our balance of payments, and a halt to the excessive creation of U.S. and Euro-credit/ Foreign-credit dollars. But the alternative is, at some point in time, a flight from the U.S. dollar and, therefore, the Euro-dollar/Foreign-dollar. This will generate hyperinflation in terms of U.S. and Euro/Yen/Yaun/Petro/-dollars, etc., and an international financial crisis of unprecedented proportions

Would somebody explain to me why it is so hard to talk about GOLD?
We talk about cars, taxes, world events,gas, price of meat, booze, cigs and so forth. Mention gold and everyone clams up! Heck USAGOLD has over 10 thousand entries and just a few hundred post. I talk about gold and my wife hears me every day. (you have to know me) There are plenty of things that are important in this world and gold is one of them. Especially for financial survival.

This may be a contest question. Sir M.K. I would not validate this contest unless there was at least 150 entries or 10% of the total listed posters.

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

The reason is: because it is so important.

Social life revolves around the trivial. Talk about what is important, and you are being anti-social.

A phrase from a Cole Porter song comes to mind: "Most men don't like love, they just like to kick it around."

People - the little man, who represents the multitude, is afraid, terribly afraid. Fear is in the air. The little man does not want to talk about that which brings his fear into his consciousness. He wants to keep it out of his mind, he does not want to face his fear.

Gold makes him think, and the little man does not want to think. Thinking would bring up his fear, which he is trying to forget.

That's why it is so hard to talk about gold - to little men. And most men are little men - little in spirit.

SIERRA

Your discription of the little man is wide open. I do agree with you is that fear is a driving force.
The little man around the world recognizes gold for what it is eventhough not understanding the dollar price set upon it. While the stock market investor fears that his paper weath can desintergrate if he can not sell his stock before the buyers dry up.But the individual, Little in Spirit, will not see or refuse to see, what lies on the horizon.

Thank you Sierra Madre for your reply. I am trying to sort out who will be buyers of gold as it progresses higher.

That is, will there be more smaller buyers than big buyers.
Slingshot----------<>

If USAGOLD finds this offensive. Please delete.
I only ask this as to acquire some reassurance as the rush to gold accelerates.
It has been stated that there is less than one ounce of gold per person in the world. To state that, we at USAGOLD are most fortunate. But I want to extend. To reach out to the world on the web and ask, "Does I.Q. have anything to do with the acqisition of gold wealth?"

We have always talked about higher classes. I want know about the underlying factors.

Is there some PhD that can fill in the blanks.

It's the things that come out of nowhere that get you!
Slingshot----<>

FEAR!

Oh yes, this is perhaps an area of huge discussion. Imagine if tomorrow morning you opened up your favorite new article to find this.

GOLD reaches an all time high of 1,000.00 per ounce.

What do you think people will FEELING? I bet they will be wondering what calamity has just hit!

Now, this is all tied up in the emotional gold. I have always said gold was an emotional metal and I do think you hit it on the dot or spot.

FEAR!

That's why you only hear the happy chimes or music being played when the stock market is up or down. I guess it would kill them to every talk about gold this way? I do believe they are afraid to promote it one once further! I need to ponder on this one!!

GF

You miss the point.
Gold from $254 to $665 is remarkable. Consider the implecations when gold hits $2000 and that is not inflation adjusted.
Slingshot---------<>

Forget the spelling!

I Slingshot want to have a contest. I Slingshot, will purchase TWO (2) America Silver Eagles for a contest from USAGOLD/CPM Precious Metals. Those wanting to up the ante may do so by buying from CPM.

They have gave alot. Its time we gave back.

USAGOLD has the right to call the contest question.
Slingshot---------<>

http://www.chinanews.cn//news/2005/2007-02-10/33301.htmlChinanews, Beijing, Feb. 10 � In 2006, China's gold output exceeded 240 tons, increasing by 7.1% from 2005. During the same period, China consumed 300 tons of gold, said Lu Wenyuan, deputy chairman of the China Gold Association on Thursday.

Since China opened its gold market in 2002, the country's gold output has grown by 6% year on year. At the same time, gold consumption has also increased. In 2005, China became the world's fourth biggest gold producer and the world's third biggest country for gold consumer.

Due to backward techniques, there are also some problems in China's gold consumption. Although China is a large country in gold consumption, it is not actually a strong country in this aspect, since most of Chinese gold enterprises merely process gold jewelleries for Italy and other Western countries. China processes a lot of gold products without much designing work.

In China, most of the gold products are bought by elderly people, since they are the group that are influenced by the Chinese tradition by which gold and silver jewellries are regarded as symbols of wealth. Not many young people in China favor these gold products, because they are not designed in fashionable styles and also because many young people think that wearing gold is a manifestation of low taste.

In order to change the situation, the China Gold Association will begin to launch a series of new gold products from March. All these products, which share the common name of "China fashion", are all designed by Chinese designers, who incorporate traditional elements and modern styles in their designs. It is hoped that the new products will stimulate the gold consumption market in China.

Hello 968. It has been a long night.
Slingshot --------------<>

http://quotes.ino.com/chart/?s=FOREX_XAUUSDODon't want to labour the point too much but INO PoG and Euro charts now showing a precis version of the w-end frolics,
Euro again seeking to get below 1.30 ...I wish them well!

Are you out there?
Slingshot--------<>

http://quotes.ino.com/chart/?s=FOREX_GBPUSDG'day Mr Shot ...you coaxed a good effort out of Sir flow5 eh? welcome FF.

Hey Mate,
Missed you buy less than a minute in the time travel.
What say you about my contest?
Slingshot-------<>

http://www.kitco.com/images/live/gold.gif...K's graph has stalled at London open ...I can't watch!!

http://in.today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2007-02-12T111733Z_01_NOOTR_RTRJONC_0_India-287302-1.xml&archived=FalseSHANGHAI (Reuters Life!) - Golden hogs are flying off the shelves as China prepares to welcome the Year of the Pig.

Chinese consumers are thronging jewellery stores to buy gold trinkets and accessories to usher in the lunar new year, which starts on Feb. 18, in style -- and with lots of luck.

You might need your sleep mate, it could get interesting today.

@ 968,

Not to mention, them golden piggies are darn cute!

You want to talk about Hogs? Wild Hogs. I can tell you they are the most deadly creatures on earth. Forget about Porky Pig. Have a 300lb with 6 in. tusks charge you and that changes everything.I know for sure. If this is the year of the Hog. Look OUT!
Slingshot--------<>

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteat Netdania out of Oz.

http://quotes.ino.com/chart/?s=FOREX_EURGBPThere was hell to pay over the w-end Goldie.

I'm looking at them with major gaps
Slingshot---------<><

Data feed from secondary source I think (Comstock Lite), notice there's no weekends, INO had to fill theirs after the event.
Swings too big to be irrelevant imo.

http://news.bbc.co.uk/2/hi/business/6353183.stmsnip:

China's trade surplus jumped 67% in January, a development that is likely to increase pressure on Beijing to allow its currency to float freely.
Last month China exported $15.9bn (�8.2bn) more goods and services than it imported, compared with $9.5bn for the same month a year earlier.

Although the rise was inflated by seasonal factors, the West has long said the yuan is undervalued.

While Beijing denies this, a low yuan makes Chinese exports cheaper.

Growing pressure

On Friday, the G7 finance minister from the world's leading industrial countries called on China to increase its currency flexibility.

At present China only allows the yuan to trade in a very narrow field against the dollar, but it has long pledged to allow the yuan to trade more freely as and when this is possible.

China says it needs to be cautious about this to prevent unsettling its economy.

Its exports rose 33% in January compared to the same month a year earlier, while its imports grew 27.5%, both beating market expectations.

The figures for January 2007 were inflated by the late running this year of the Chinese New Year.

This is not taking place this year until later this month, which meant more January trading days.

China's trade surplus with the European Union reached $26.4bn in January, while that with the US totalled $23.41bn.

Its overall trade suplus for 2006 hit a new record of $177.47, up 74% on 2005.

-Goldilox

Good thing Globalism is "managing" those imbalances.

Let me tell you my friend, As the POG goes I may be down to see you if you will have me?
Slingshot------------------<>

What is it you want of me sire/ma'am?
It is late and I must sleep shortly.
I'm done jousting, but per chance if you are of the fairer sex we might move to the back row and do kissing eh?

...as PoG goes of course.
My last visit say me part with many hundreds of FRN's to acquire a Bellagio $10 Limited edition Silver Token.
I think I got the better of em!

I stand by my word for two american silver eagles for a contest. The question to be asked By USAGOLD.
Slingshot----------<>

With every thousand yardstick,we're getting closer to FreeGold.So its hope which grows with the numbers,not fear.Fear will have only those short Gold and all Goldhaters!

Good Morning.
Slingshot------<>

Oh Lord I got to thinking. I know I can asked for my own contest but to ask others to contribute may be gambling. I am stupid and in no way want to jepardise this forum, forgive me.
Slingshot----<>

As the great French philosopher Blaise Pascal said, "Ordinary people have the ability not to think about things they do not want to think about." And it is this, in fact, that makes them ordinary. Ask the man of the street what money is, and he'll stand there slack-jawed, having been brainwashed into believing that money is such a mysterious thing that only temple priests can understand it and therefore disseminate it.

Or as one of those who benefitted from the mystery put it many decades ago: "It is well enough that people of the nation do not understand our banking and monetary sytem, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

Oil slips on Saudi, Qatar comments - Reuters 2-12-07
The Currency Foil - Morgan Stanley Feb 11
Fed's Fisher won't rule out further rate hikes - Reuters 2/09/07
It's a Great Country, Especially if You're Rich - NY Times 2/11/07
Wall Street Waits for Bernanke - AP 2-11-07
U.S. Inquiry on Bonds at Big Bank - NY Times 2/10/07
Economic Powers to Study Growing Influence of Hedge Funds - NY Times 2-11-07
The Short View: On junk bonds - FT Feb 11
SEC slammed over hedge fund 'wealth' test - CNN/Money
2-11-07
Hedge Funds Start to Look Like Risky Bets - WSJ 2-12-07
G-7 Officials Urge Investors to Avoid `One-Way� Bets - Bloomberg Feb 12
Germany's hedge fund plan wins G7 support - FT Feb 11
US slowdown looms as groups miss targets - FT 2/11/07
Pressure's rising for Ford dealers - Dallas MN 02/12/07 Apartment, condo construction to slow - Dallas MN Feb 11
India Finds Its Economy on the Verge of Overheating - NY Times 02/10/07
China's January Trade Surplus Swells to $15.9 Billion - Bloomberg 02-12-2007
India Industrial Production Surged 11.1% in December - Bloomberg - Feb 12, 2007

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

http://www.channelnewsasia.com/stories/eastasia/view/258096/1/.html Chinese Investors Snapping up Gold Ahead of Lunar New Year
ChannelNewsAsia | February 12, 2007

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=aYZHFIjhF5uw US Hurts Asia With Addiction to Dollar Status - William
Pesek - Bloomberg.com / Business / Opinion / Feb 12, 2007

http://www.bbj.hu/main/news_22488_imfs+de+rato+says+g-7+countries+open+minded+on+gold+sales.html11 Feb 2007 -- International Monetary Fund Managing Director Rodrigo Rato said the Group of Seven leading industrialized nations were "open-minded" about allowing the fund to sell part of its gold reserves.

An advisory panel said last month the fund should sell 400 metric tons of gold, valued at about $6.6 billion, and invest the proceeds in interest-bearing assets.

De Rato said he discussed a new income model for the IMF, which has seen its loan portfolio shrink, while attending the meeting of G-7 finance ministers and central bankers in Essen, Germany, yesterday. "There is an open-minded attitude toward the report," de Rato said.

IMF Managing Director Rodrigo Rato is seeking to reduce the fund's financial dependence on loans to crisis-stricken nations. The IMF forecasts a loss of $102 million this financial year after countries including Brazil and Argentina repaid loans early.

The IMF is the world's third-largest holder of gold, after the US and Germany, with reserves of 103 million ounces, worth about $65 billion.

Proponents of gold sales must overcome opposition from the US, the world's third-largest producer of gold, which has veto power over the decision. In November, Treasury spokeswoman Brookly McLaughlin, said gold sales aren't "the appropriate option at this time for dealing with funding issues at the IMF."

Treasury Secretary Henry Paulson sounded a more conciliatory note on Friday, saying: "We are still in listening and studying mode."

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

Regarding cash flow, the IMF's income model would shift as its lending efforts are essentially redirected from Third World/developing nations with crisis economies toward lending it's financial support instead to the more industrialized/developed world. After all, that's precisely what "investing in interest-bearing assets" here represents -- the purchase of bonds. Will they be primarily U.S. and/or Dollar-denominated bonds?

Regarding the flow of gold, if this reaches the open market, it will buy us a little time. If, however, it is delivered to China's official (reserve) doorstep, it will hasten the world's readiness to transition out of the generally out-of-favor dollar-centric reserve structure of the international monetary system.

The level playing field pivots and adjusts upon a golden fulcrum.

R.

Not to speak prematurely, but it seems to me that the anticipated hit to the PoG - as telegraphed by the swoon in the miner share prices on Friday afternoon - has been remarkably feeble so far. The two key times - NY open and London close - are easily discernable in the PoS, but show hardly a ripple on the PoG.

C!

PS. OK, now watch it fall like a rock .......

http://gold.seekingalpha.com/article/26726Feb 12th, 2007 -- Timing is everything and now is the time to be positioned in gold, silver and energy.

We are about witness the largest upleg of the gold bull, wave III, which will make the gains of the dotcom boom seem like minor blips on the radar...

...considering the population of India, their improving economic conditions (i.e. more capital and discretionary income available for investment) and love for shiny metal, we are anticipating significant upward pressure on the price of gold.
...
The Russian Central Bank ... have been discussing such a move for a while and are amongst a growing list of countries diversifying their foreign reserves away from U.S. dollars. Bad for the greenback - good for gold.

Technicals Forecast Big Move Up

For the past 10 months, the price chart for gold has been compressing (making lower highs and higher lows). Think of it as a spring, which has been pushed continually tighter and is now coiled and loaded with high levels of potential energy. When the spring finally releases, the floodgates will be let loose and the price will explode upwards.

The gold price is above both the 50-day and 200-day moving averages and both of these averages are trending upwards. We are in the midst of a rally that typically follows the golden crossover (50-day moving average crossing through 200-day moving average) and it is our opinion that the rally is just getting started. If gold can hold above $650 a few more days, we are set for a major move back towards $720. There is literally no resistance between these two points.

While gold above $720 will be a welcome event, we are still sticking to our forecast for gold reaching above the $1,000 mark sometime in 2007. Tall order? One needs only remember that gold today would be priced near $2,000 per ounce if it were adjusted for inflation.

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

In speaking of inflation adjustments, rather than saying "gold today would be priced..." doesn't he mean that the PRIOR high-water-mark in gold would be $2,000 if it were adjusted for inflation?

Of equal or more importance, however, is the understanding that gold today could/would be priced near or beyond $2,000 if the physical market were liberated from the price-suppressing effect of the tidal wave of paper gold that has artificially inflated the apparent supply of yellow assets to satisfy the market's widespread needs for a dollar antidote.

Spread so remarkably thin, the effect wrought by this paper will fall away as confidence in the shell-game wanes. More to the point, this is more truly what will lead to the "fireworks" on the horizon.

Choose your gold in PHYSICAL form, sit back, and calmly take in the view.

R.

I would worry more if Paulsen said that the US was "behind" IMF gold sales, as it would suggest to me that they were considering Rooseveltian methods to re-acquire it.

Just MHO.

-G'lox

http://www.project-syndicate.org/commentary/rogoff27Betting With the House's Money

Many people have been asking why the dollar hasn't crashed yet. Will the United States ever face a bill for the string of massive trade deficits that it has been running for more than a decade? Including interest payments on past deficits, the tab for 2006 alone was over $800 billion dollars � roughly 6.5% of US gross national product. Even more staggeringly, US borrowing now soaks up more than two-thirds of the combined excess savings of all the surplus countries in the world, including China, Japan, Germany, and the OPEC states.

Foreigners are hardly reaping great returns on investing in the US. On the contrary, they typically get significantly lower returns than Americans get on their investments abroad. In an era in which stock and housing prices are soaring, the central banks of Japan and China are holding almost two trillion dollars worth of low-interest bonds. A very large share of these are US treasury bonds and mortgages. This enormous subsidy to American taxpayers is, in many ways, the world's largest foreign aid program.

Overall, after almost 25 years of stunning prosperity, punctuated by only two mild recessions, most Americans feel pretty confident about their economic situation. ... People have enjoyed such huge capital gains over the past decade that most feel like gamblers on a long winning streak. By now, they see themselves as playing with the house's (or their houses�) money.

...this cannot be the long-run trend.

...it is not hard to imagine scenarios in which the dollar collapses. Nuclear terrorism, a slowdown in China, or a sharp escalation of violence in the Middle East could all blow the lid off the current economic dynamic.

...some day, the US may well have to pay the bill for its spendthrift ways. When that day arrives, Americans had better pray that their creditors will be as happy to accept dollars as they are now.

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

Thanks for the link, G.

That final sentence, very calmly delivered, is nonetheless the most sobering single thought a person could dwell on to properly wrap their mind around the nature of this whole gold/savings/reserve affair.

Call USAGOLD-Centennial for an insightful consultation on a gold-diversification strategy that's right for you. 1-800-869-5115 (Also, be sure to avail yourself of the very very FREE and EASY Gold Info Packet made available to you at the link atop this page.)

R.

In foreign trade, imports decrease the money supply of the importing country (U.S.) while exports increase the money supply, and the potential money supply, of the exporting country (China). Purchasing the deficit countries currency and then purchasing U.S. treasury bills (1.05 trillion by year ending 2006), will reduce the dollar's supply, but it is important to know that sooner or later the Chinese central bank will have to reverse their positions and the foreign exchange dealers know this (gold will rise at this juncture).
The trade-off of reducing the pressure on the global dollar by temporarily decreasing the volume of the dollars requiring conversion into Yaun, is the cost of foisting an inflationary policy on China. Obviously, and for good reason, the Chinese have reason to resist this kind of assistance. But in order to keep a competitive advantage, and the Yaun low, and exports high, as China is export dependent for full employment, the Chinese "sterilize" their foreign exchange reserves. That is, the Chinese "mop up" the increase in the Yaun money supply by selling government bonds. This converts surplus Yaun into government debt and delays the inflationary impact of an otherwise increase in the volume of Yuan. But at some future point, as exchange rate reserves grow, the Chinese capital markets will lose their ability to absorb new debt. China's protectionism (currency peg) will crack, and the volume of Yuan will fuel inflation.
The Chinese have been desperately 1) selling lots of government bonds to their domestic credit markets, and 2) raising commercial bank reserve ratios (to monetize the debt). Both 1 & 2 are to "sterilize" their foreign exchange reserves, and postpone the inevitable. If there is a flight from the dollar, it will be because the Chinese waited too long to realign the Yuan. The NAM believes that the Yuan is undervalued by as much as 40 percent.

Until July 2005, China's currency had been fixed at an exchange rate of 8.27 yuan per dollar - since 1994. As of Jan 2007, its currency has risen 6.2% since the currency peg ended July 2005 (to 7.7949 per dollar). Real GDP has grown an average of 9.6 percent in the past five years. With an export driven economy, China's foreign-exchange reserves have risen to $1 trillion. Shanghai and Shenzhen stock exchanges were up over 300% in 2006 to 35x earnings and a $1.01 trillion valuation.

You said, "Purchasing the deficit countries' currency and then purchasing U.S. treasury bills (1.05 trillion by year ending 2006), will reduce the dollar's supply..."

Upon giving it a bit more consideration, wouldn't you rather conclude that the purchase of the U.S. Treasuries actually serves very effectively to facilitate the recycling of those same dollars back to U.S. shores, thus nullifying the reduction in (our) money supply as you've posited in your presentation?

R.

Braking on the metals ...............letting the air out of the CRude oil baloon .............

This could go on for a while till it gets down to 55 maybe lower..........

propping up mr Dollar or


The metals may just decide to take off on their own in honor of this festive YEAR OF THE PIG ( that's svine to the Pigs at PPT GOLD MAN SACHS , THE FED , JP MORGAN and the pitiful pit poindexters that help them .........

Beware to whom ye sell yer souls , he it is who holds your bonds,,,,,,,,,and beware of the CRACKING.........and DAVY JONES LOCKER

Be it known to you lads , that THE PROPHET hath said that the crooked ways, they shall be straightened........and on that day ,,,,, you might well have a shards of lightnin to cure your rheumatism in your LOST PATHWAY

GOLD may have a whack at your first .........in the here and now ...and give you over to a personal prolonged MAALOX DECADE

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteThe COMIX smack down did not breach $660, so we're already seeing some rebuilding in after-hours.

http://www.gulf-times.com/site/topics/article.asp?cu_no=2⁢em_no=132088&version=1&template_id=57∥ent_id=56QATAR, the world's largest shipper of natural gas, will consider selling gas in euros, instead of dollars, HE the Finance Minister Yousef Hussain Kamal said, reducing global demand for the US currency.

Thank you, yes, didn't think it through, forgot a step.
Shouldn't gold be consolidating? There should be downward pressure from the seasonals. Otherwise gold is showing real strenght. Gold's price should accelerate after the middle of March.

First, there is no ambiguity in forecasts. Forecasts are mathematically "precise" (1) nominal GDP is measured by monetary flows (MVt); (2) Income velocity is a contrived figure (fabricated); it's the transactions velocity (bank debits, demand deposit turnover) that matters; (3) money is the measure of liquidity; & (4) the rates-of-change used by the Fed are specious (always at an annualized rate; which never coincides with an economic lag). Economists have learned their catechisms; .

Friedman became famous using only half the equation, leaving his believers with the labor of Sisyphus.

The lags for monetary flows (MVt) � real GDP and the deflator are exact, always the same --- 10 months and 24 months respectively. Rates of change are always measured with the same length of time as the economic lag (as its influence approaches its maximum impact). Not surprisingly, member commercial bank legal reserves rates of change corroborate the lags for monetary flows (MVt) � they are of identical length. The BEA uses quarterly accounting periods for real GDP and deflator. The accounting periods for GDP should correspond to the economic lag, 10 months, and 24 months, not quarterly. They should represent a rolling moving average.

Monetary policy objectives should not be in terms of any particular rate or rate of growth of any monetary aggregate. Rather, policy should be formulated in terms of desired rates of change in monetary flows (MVt) relative to rates of change in real GDP. Note: rates of change in nominal GDP can serve as a proxy figure for rates of change in all transactions. Rates of change in real GDP have to be used, of course, as a policy standard.

Because of monopoly elements and other structural defects which raise costs and prices unnecessarily and inhibit downward price flexibility in our markets (housing being most notable), it is probably advisable to follow a monetary policy which will permit the rate of change in monetary flows to exceed the rate of change in real GDP by 2-3 percentage points. In other words, some inflation is inevitable given our present market structure and the commitment of the federal government to hold unemployment rates at tolerable levels.

95.8 -0.38 0.01 2005-10-01 5.35
97.1 0.12 0.01 2005-11-01 5.42
97.4 0.24 -0.01 2005-12-01 5.37
101.5 0.58 0.31 2006-01-01 5.29
95.0 0.04 0.05 2006-02-01 5.35
93.5 -0.20 -0.08 2006-03-01 5.53
93.8 -0.17 -0.08 2006-04-01 5.84
94.5 -0.03 -0.07 2006-05-01 5.95
95.2 -0.23 -0.02 2006-06-01 5.89
94.8 -0.11 -0.02 2006-07-01 5.85
93.8 -0.33 -0.19 2006-08-01 5.68
94.7 -0.27 -0.06 2006-09-01 5.51
93.0 -0.85 -0.17 2006-10-01 5.51
93.6 -0.14 -0.14 2006-11-01 5.33
95.7 0.22 -0.16 2006-12-01 5.32
98.5 0.47 0.11 2007-01-01 5.40

Legal 10 roc 24 roc AAA corporates
Reserves

I believe this time series will be of some value up until, either or both, 1) deposit classification or 2) reserve ratios change. The 10 ROC (proxy for real GDP) reversed in Dec 2006. The 24 ROC (proxy for inflation) reversed in Jan 2007. Reversed meaning changed from negative rates of change to positive rates of change. However, for trading purposes, real GDP bottomed in Oct (lowest value) & probably inflation as well (if the data was smoothed). Order execution has nothing to do with positive or negative numbers. You trade or measure with statistics, using rates of change, not absolutes.

http://quotes.ino.com/chart/?s=CBOT_US.H07US T Bond March 2007 - CBOT - February 12, 2007
Address: http://quotes.ino.com/chart/?s=CBOT_US.H07

http://www.prudentbear.com/articles/show/347Guest Commentary, by Dan Amoss
Who's been sleeping in our beds?
February 12, 2007
Dan Amoss, CFA is managing editor for Strategic Investment
Excerpt:
A recently popularized concept dubbed the "Goldilocks economy" sounds nice in theory, but sorely lacks historical precedent. But Wall Street and the financial media have hijacked the children's bedtime story of "Goldilocks and the Three Bears," using it as a metaphor to explain the current economic environment. If we take this metaphor to its logical conclusion, we see that it has big, positive implications for precious metals investors.
Here's how the story goes: Fed Chairman Ben Bernanke, having broken into the three bears� house, is faced with a choice of three bowls of porridge: one "too hot," one "just right," and one "too cold." His academic background gave him the knowledge to choose this "just right" bowl � a bowl characterized by low inflation and 2�3% economic growth.

Had Bernanke chosen Papa Bear's "too hot" bowl, maintaining an easy monetary policy too long, inflation would now be out of control and the economy would be growing 5�7%. Had he chosen Mama Bear's "too cold" bowl, he would have tightened monetary policy too much, inflation would now be turning negative, and the economy would be heading into recession.

So what is the moral of Wall Street's story, now that we are in the midst of a "just right" economy? We should all invest in index funds and watch our savings yield real returns above 10% per year all the way to retirement.
But it's interesting how the nonmetaphorical version of this bedtime story actually ends. Wikipedia provides a synopsis:

"Goldilocks is still asleep in the baby's bed when the bears return home..."
Mikal -- You didn't expect me to give away the ending did you?
A nice read on the economy and the future(here and now) of gold.

"Regardless of whether or not our objective is �" we are contained therein and look towards gold for historical reassurance.

Your words are English, but your thoughts are that of another language. They come across partly political, but all is forgiven if one speaks truthfully.

The Gold Standard post seems to hit that you believe there is action underway to reduce liquidity that may strengthen the dollar's integrity. No? But, it seems that if you read between the lines one might see that there is not the political will to do so. No? Thus, you're leaning towards "an international financial crisis of unprecedented proportions" (side note, did you mean to leave out the period? It's as if there could have been more following this.)

Today's Monetary Flow5 leaves me a little mixed up. Do you conclude that inflation as bottomed, or that the rate of inflation, that had appeared to be decreasing for months, may have hit bottom and stands ready to accelerate again?

These first posts show real thought. I look forward to learning your point of view.

We've never had anybody like Bernanke. He's a very smart man. He won't make any errors.

The low levels of inflation (CPI), etc., currently being reported, have all been statistically exaggerated by the present practice of calculating the rates of change in terms of a base one year earlier, rather than from the base period of the index/market basket (currently 1982-84). The base period when I started driving was 1967 (1967=100). The calculation rationale stems from indexing substantial portions of the federal budget to the CPI, etc. In terms of the 1967 base year prices we are experiencing very substantial absolute increases in current prices. If we go back far enough with the base year some people might conclude we are approaching hyperinflation.

http://www.powerinvestor.com/Primer/Dollar-Now-Versus-Dollar-Later/Erosion-of-Dollar-Buying-Power-by-Inflation.htm@ Flow5,

One look at the government debt chart confirms a text-book hyperbolic curve since 1913, when the FED took "office". I've noted this here, but perhaps before your visits.

The deceiving thing about a hyperbola is the appearance of a slow increase in slope up to the point of crossing unity (1:1). Those who perform their hedonistic magic on it can convince many that the rate is near "linear", but only for a time.

After the point that the geometric increases start showing themselves as integer multiples, those who still don't recognize the long-term hyperbolic flow, will suggest "parabolic anomalies", rather than call the hyperbola a hyperbola. I think they hope to cloud the fact that it is an on-going process (in place from day one by definition) by diverting attention to some fictional "parabolic anomaly".

After all, it's more "politically correct" to try to fix an "anomaly" than admit the system is performing exactly as designed.

The URL is a link to another interpretation of dollar demise.

Yes, inflation has bottomed. No, gold won't rise in a straight line. The Fed uses seasonally mal-adjusted data. They also seasonally accommodate commercial bankers at x-mas (which is a policy tantamount to using the fallacious real-bills doctrine)

According to this "real bills doctrine," commercial banks should confine their lending to short-term, self-liquidating paper � paper originating out of the financing of "goods-in-process." The doctrine held that if this procedure were adhered to there could be no inflation of credit since an expansion of credit would be offset by a concomitant expansion in the flow of goods. Furthermore, credit would expand and contract according to the "needs of trade." In the terms of the original Federal Reserve Act, the Reserve banks were adjured to take only "short-term self-liquidating agricultural, industrial or commercial paper which was originally created for the purpose of providing funds for producing, purchasing, carrying or marketing goods....

Of course, with this seasonally adjusted policy, the Fed is now an indian giver, and that's why gold should fall now, and resume climbing, starting approximately, the 2nd week of March.

That's what I trade with. Maybe the Fed can't reduce the world's maelstrom to a few small partial derivaties, but my friend did - Leland James Pritchard, Ph.D., Economics, Chicago 1933.

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

February 12 (Reuters) -- U.S. gold futures ended lower on Monday, as a firmer dollar and weaker oil prices cut into last week's solid gains, but buying by funds and geopolitical tensions lent some support to the precious metal. Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange settled down $5.00 at $667.30 after peaking at $673.50 in early electronic trade, near its six-month high of $673.90.

Carlos Perez-Santalla at Hudson River Futures said gold came off early because of weakness in the euro and crude oil. He added that things had stabilized as the G7 meeting did not produce any worrying news for gold.

"But there does seem to be some interest in the gold market, keeping it from going too far to the downside. Fund interest, and buyers have been seen in the market," Perez-Santalla said.

The dollar rose against the euro and neared a four-year peak against the yen. The greenback drew support after G7 finance ministers and central bankers concluded a weekend meeting without singling out the Japanese currency's persistent weakness as a threat to global financial stability.

Oil dropped more than $2 to below $58 a barrel on Monday after leading exporter Saudi Arabia, fellow OPEC member Qatar and OPEC's head of research said the organization may steer away from further supply cuts at its March 15 meeting.

Gold is used by investors as a hedge against oil-led inflation.

Bullion investors are bracing for several key U.S. economic indicators due later this week, including Tuesday's U.S. trade balance data, and Friday's Producer Price Index.

"The dollar's reaction to U.S. economic data is likely to be a feature in the week ahead, while further oil price gains will add inflationary support," wrote James Moore, analyst at TheBullionDesk. Moore added that geopolitical concerns in the Middle East were providing background support to gold, as investors bought the precious metal because of its safe-haven appeal.

The European Union agreed on Monday to implement U.N. sanctions on Iran while holding a door open to fresh talks on defusing a standoff over what Western powers suspect is a covert Iranian bid to make nuclear bombs.

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

There will come a time ( unpredictable ) when it will be impossible for the government ( federal ) to collect enough in taxes to pay all of its expenses, including interest on the national debt. The Gov't can of course borrow an indefinite amount through the Fed. ( concealed greenbacking ) given a few changes in existing law. But that would lead to hyper inflation - i.e., a collapse in the credit of the Gov't. So the easy way, is the way the French did it in 1960. Simply say that beginning Jan 1 ( or any other date ), new dollars will be issued, and that each new dollar is worth 100 old dollars. Then follow that up with a largely state controlled economy.

In 1960, the French economist / mathmetician Jacques Rueff, during Charles de Gaulle's presidency, converted the old franc, to a nouveau franc, equal to 100 of the old franc. However, even with this substitution, inflation continued to erode the currency's value, though at lower rates of change, in comparison to other countries. And this new franc equaled 20 cents to a U.S. dollar. The old rate was 5.00 to a dollar.

In 1960, the French franc, which was one of the weakest currencies, overnight, became one of the strongest. Correcting policies included plans to 1) balance the budget, 2) stablize the currency, and 3) eliminate currency controls.

The gold content of the franc increased 100%, & 1) foreign exchange rates, and 2) France's internal prices, reflected the conversion overnight. Internally, prices dropped about 90 per cent, and the foreign exchange value rose from about 0.238 cents per franc, to about 20.389 cents per franc.

Domestically, France was on a managed paper standard; externally, on a modified gold bullion standard. With the new policies, France's economy strengthened, and the franc became fully convertible @ approximately its gold par, into gold for foreign exchange and into foreign currencies.

With the introduction of the euro, the franc in Jan. 1, 1999, was worth less than 1/8 of its Jan. 1, 1960 value

*IF* there were a US$ revaluation, what would happen to rest of the picture? For the sake of discussion, assume a 100:1 revaluation.

Will the domestic federal debt also be divided by 100, or would it now be payable at $0.10 on the "dollar"?

Would private debt also be payable at $0.10?

If it happened today, would gold be valued at $66/oz?

What would the expectation be for foreign held US bonds now valued in the trillions of dollars?

Does anyone think that $1.00 would buy a widget from China that now sells for $100.00?

I wouldn't expect revaluation to change anything except the thickness of one's wallet unless ONLY currency gets revalued, but not debt.

What I WOULD expect in a revaluation is a mammoth shell-game where so many things change so quickly that no one understands what really happened until long after TPTB has benefited and most everyone else has been hosed.

In any case, the thing that will NOT change is ongoing monetary inflation since that is the master plan.

- Survivor

I meant to say assume a 10:1 revaluation for the sake of discussion.

-Survivor

Is this avenue of revaluation possible for the US Dollar in the face of new competition with regards to world reserve status? If I was forced to give up a collection of 10 of yesterday's dollars in order to get 1, today, in order to purchase oil, that yesterday traded for 60 but today trades for 6 � I would convert into Euro's and take another drink for my head would be spinning.

To me, the kicker is that the US Dollar is the principle form of measurement for commodities around the world. It doesn't matter what that commodity is, it just matters that the world deals in commodities in reference to the US Dollar. If the Dollar managers go playing hanky-panky by dropping zeros, they will find that absolutely no one outside the US will trade their commodities for US Dollars. The dollar would die faster than Al Gore could say Global Warming!

Amongst all the possible games that might be played/are being played, gold stands as the roadblock against total destruction. It's too important to outlaw and it's too important to legitimize. Currency gets its support through rule of law, gold gets its support through knowledge.

I have a hard time seeing the French type revaluation in the face of a problem that is generally someone else's.

conduit to dollar markets unwound ......un plugged
unraveled ..............

It's soon to become the UN CURRENCY ..........

The songs the writers write have prophetic .....clauses in them


SLIP SLIDIN AWAY comes to mind

established that his studies point to a possible scenario in which the Equities markets turn / these effects would be another unwinding of sorts leading to a reshuffling and conduiting paper into metals .........ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh THAT SUCKING SOUND ...............clearly beautiful and reflecting the beauty of BALANCE CATCHIng FIRE TO BANKERS BRITCHES and the VANITIES they embrace ; UP IN SMOKE UP THE FLU.....POOF and they are gone ........but what of the effects of what they have done .......Sling Shot alluded to this morning ......

Dang Flatliner, this next qoute from you just below is, well, if the Slingshot funded usagold contest was..."Say it all as consise as possible"....this might have been the winner.

"Amongst all the possible games that might be played/are being played, gold stands as the roadblock against total destruction. It's too important to outlaw and it's too important to legitimize. Currency gets its support through rule of law, gold gets its support through knowledge."

http://www.informationclearinghouse.info/article17035.htmsnip
If the rest of the world would simply stop purchasing US Treasuries, and instead dump their surplus dollars into the foreign exchange market, the Bush Regime would be overwhelmed with economic crisis and unable to wage war. The arrogant hubris associated with the "sole superpower" myth would burst like the bubble it is.

The collapse of the dollar would also end the US government's ability to subvert other countries by purchasing their leaders to do America's will.

The demise of the US dollar is only a question of time. It would save the world from war and devastation if the dollar is brought to its demise before the Bush Regime launches its planned attack on Iran.

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

Me thinkst they would.

Got gold?

Best Wishes

@ Survivor,

The last thing TPTB (banks and gubmint) want is a revaluation that allows the consumer to carry more cash.

Way too much data mining (market snooping) and highly profitable obligatory interest charges are wrapped up in "credit" and "debit" accounting. Plastic is "their friend".

I would venture that if the USA were to even consider a zero cancelling scheme that the banksters would be up in arms, and the IRS would then require require even more restrictive reporting of cash transactions.

The act will also allow the Federal Reserve to pay interest on contractual clearing balances and excess reserve balances, two types of balances that depository institutions hold voluntarily at Reserve Banks. By helping to stabilize the demand for voluntary reserve balances, this authority may allow the Federal Reserve to implement monetary policy without the need for required reserve balances. In these circumstances, the Board--as authorized by the act--could consider reducing or even eliminating reserve requirements, thereby reducing a regulatory burden for all depository institutions.

...a number of countries, including Canada, Switzerland Sweden, Australia, & New Zealand conduct monetary policy without reserve requirements. These banks operate on a prudential or liquidity reserve basis. Using the "Taylor Rule", the central banks conduct open market operations to manipulate interest rates � and thus their money supply. THESE COUNTRIES ALL REPORT M3.

http://www.usagold.com/gold/coins/liberty.htmlI have been buying some rare coins, 10 times melt, and would be very interested to know what will happen to the prices of these coins when the spot market explodes.
Historically the prices have exceeded the rate of increase in spot, in some cases by many times, but this has been a gradual increase, not a sudden one, and no other major changes.
Any interest?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=With a little rejigging of scalings on the Chart, we can pretty well put to bed any suggestion that Gold and Currencies are even on the same planet nowadays.
Stage one of the separation was the 05/06 roll-over with the blow off Mar '06 ...things really got interesting around Aug/Sept '05.
Stage 2 began mid-late Jan '07 and will probably extend well into '08.
The ONLY relevant yardstick referencing Gold right now is Silver ...watch Silver like a hawk into Mar/Apr.

RAP, my opinion, for what it's worth, is that buying old coins is a variety of buying antiques. You might be OK with your investment in antiques, but - you might not.

The antiques market is not as liquid and everpresent as the market for bullion coins, selling for close to their intrinsic value.

Right after 9/11 of 2001, there were practically no buyers and those who did buy, got fabulous bargains those days.
Same might happen to you, as a seller - hard to find a buyer.

If we're talking about providing reserves for REALLY tough times, I'd stick with bullion coins. It just seems to me that in a great crisis, as seems to be building, people will not be thinking too much about adding to their rare coin collections.

Just my two bits - it's your decision!

SIERRA

Large federal deficits cause an increase in the demand for loan funds, and because of the inflationary impact of the deficits, a decrease in the supply of loan funds. This follows from the fact that increases in the deficits will be almost entirely attributable to increases in defense spending. Defense spending adds nothing to civilian productive capacity or to the supply of goods available in the marketplace. And the magnitude of the deficits $116 billion for Iran/Iraq, ($784 billion for DOD), qualify as war economy budgets (31% of net stock of federally financed physical capital (1)). Unless the payments gap is filled by foreigners, the deficits require the controls dictated by a war economy. Bush's solution?...substitute cuts in medicare and medicaid ($550 billion last year) - as a means to prosecute the war.
(1) http://www.whitehouse.gov/omb/budget/fy2007/pdf/spec.pdf

Joseph Stiglitz of Columbia University (prominent war statistician), using CBO basic assumptions, calculates the Middle East wars will ultimately cost 1.27 trillion.

How much is that in barrels of oil? Answer = 21,166,666,667 billion barrels @ $60.00/barrel
http://tonto.eia.doe.gov/dnav/pet/pet_move_imp_dc_NUS-Z00_mbbl_a.htm

2005 imports/barrels/year = 3,695,971,000 barrels. = 5.72 years supply of imported oil @ $60.00/barrel
(at same consumption rate, i.e., 3,695,971,000 barrels/year)

Give an Iranian a loaded AK 47, and he's thinks he's hit the lottery. His yearly salary is less than cost of his gun. That's what's Jihad is all about, defence against poverty. For Allah or a will?

Author of "the Coming China Wars, Where They Will be Fought, and How They Can be Won" http://www.peternavarro.com/sitebuildercontent/sitebuilderfiles/chinapricereport.pdf

"China applies a series of measures that, by allowing for refunds, reductions, or exemptions from taxes and other payments owed to the government, appear designed to subsidize exports of manufactured goods or to support the purchase of domestic over imported equipment and certain other manufacturing inputs. These measures appear to be contrary to a number of WTO rules, including the explicit prohibitions against export subsidies and import substitution subsidies set forth in the WTO Agreement on Subsidies and Countervailing Measures." Susan Schwab - UST
http://www.ustr.gov

RAP, one way to understand how rare coins could hold up in a more hyperinflationary enviroment would be to go back to 1979/1980 during the inflation -plagued time when i was buying/selling bullion. don't know how it was in the whole country, but in mid-atlantic and lower midwest a lot of your scarcer coins/90% and silver dollars lost all their premiums when taken to dealers or brokers for scrapping or sale.
Dealers had to protect themselves from volitilaty in the day-to-day price back then which fluctuated quite severely at times. plus the technology was much more primitive so you could not instantaneously move a purchase to a smelter refiner with an e-mail. long distance in a motel/hotel back then was .40-to 1.50 a minute. remember buying 20.00 double eagles at 625.00 when gold was near 700.00. had big swings in price and you had to cover your rear if the price dropped the next morning till you got through to your smelter. same was true with silver. bought morgans/peace dollars at 25 when silver was 35 cause you had 1-2 dollar a day moves and it took me 2 weeks to get clear payment after coins were delivered. our host was well established by then and probably had a better turnaround time.
Say you bought some ms-64 liberty gold pieces at 3-4 grand apiece in slabs. If gold goes to 2000 an oz. those coins may not bring more than their melt value as the market may flip to a purely bullion value one. say silver goes from todays 13.66 to 125.0 an oz.you will probably see a 1996 silver eagle, which go for 60-80 dollars now not bring anymore than a 1992,1999 etc.
Now, if you have the means to collect rarer coins, then by all means do so. I don't think any other hobby delivers the history and monetary discipline that numismatics do. but if you are of average means you can still collect scarcer coins and not pay a massive premium and still protect yourself from a possible confiscation scenario in the future. buying silver eagles, pre-1933 foreign gold (which are quite scarce) and some 20.00 liberty and st. gaudens graded ms-61,62 or 63. our host is the finest in the business and can serve your needs on any of these as well or better than anyone in the country
just my humble opinion

http://www.financialsense.com/Market/kirby/2007/0212.htmlAs in Gold (forward hedges), so too in oil? From Mr. Rob Kirby's market wrapup (the given link is to his archive so it ought to be good after today also).


Snip:
The authors use CFTC data on futures trader positions to document major changes in the size and term structure of the U.S. crude oil (WTI) futures market. The authors find that as recently as 2000, trading activity in this market was heavily concentrated in nearby contracts. Since then, overall open interest has grown two-fold, with trader activity at the back end of the term structure increasing more than twice as much as the market as a whole.

The market growth in long-term (more than three years) positions generally started in 2004, which coincides with the growth in participation by commodity swap dealers....

I wonder how many of you might now be scratching your heads, wondering why � all of a sudden � in 2004, everybody and their mother decided to start "fiddling around" with crude oil contracts dated > 3 years?...

The "IT" that I'm referring to is something I remember reading a couple of years ago � about J.P. Morgan Chase being chosen by the Coalition Provisional Authority [CPA] to "set up" the NEW Central Bank of Iraq [specifically, the Trade Bank of Iraq]. Take note how this TRADE BANK only became operational in December of 2003:
End Snip:


Some day maybe we'll get an OPEC oil agreement. "We agree to limit sales to X mbpy in the interest of keeping oil reserves as an important reserve asset." Naah, couldn't happen.

For those a bit slow on the uptake, my impression is that he suggests POO is being held down and stabilized via expectations of forward deliveries (in dollars).

http://www.financialsense.com/Market/wrapup.htmEven greenspan commented on this, (if I recall). I always assumed the market was giving some weight to peak oil ideas, I never considered the possibility of discounting future "guaranteed" sales a la bullion banking swaps.

If so, then a great deal of market strain is now being hidden in a magic stress "potential."

snip:
Funny, isn't it; that this "COLLATERALIZATION" just happened to coincide with an "explosion" in trading volume of "LONG DATED" [greater than 3 years maturity] crude oil futures contracts.

http://www.ft.com/cms/s/0852a900-b7e4-11db-bfb3-0000779e2340.html"The Japanese government should be selling the massive reserves it has accumulated thereby changing the imbalances with the dollar and euro," the letter adds.

I'd concur with those posters who see a deterioration in premium going up Sir RAP.
I rely on getting an impression of the current market by keeping a weather eye on ebay.
Admittedly the RARE Coins generally don't trade but the ones identified as commanding a premium of say 1.5 Spot + seldom even attract a bid.
The other consideration is that IF it's faith in currency generally that is propelling PoG (as might be the case now with full tilt global paper ...as opposed to historic Gold standard paper) any percieved multiple spot premium carried through in the past might now just dissolve away completely...given the current full spectrum Fiat state of play.

Hope to have been some help.

http://www.kitco.com/images/live/silver.gifA little too big a coincidence for mine, both Au and Ag running up and stalling at the exact same amounts as yesterday at London open.
We're under full management now I'd say.

http://quotes.ino.com/chart/?s=FOREX_EURUSD..but fear not, I'm not going to waste time and bandwidth tonight tossing my stuff up to an unreceptive audience.

http://www.ft.com/cms/s/ae2d5d24-badd-11db-bbf3-0000779e2340.htmlThe news war is heating up from the Anglosaxions.If for this reason (Iran war) Gold is up,or that the market just doesen't buy the IMF Gold sale is up for guesses.I suspect the latter,the Iranian cause just accompanying noise.

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

The future of UrbanSurvival seems to remain bright thanks to a decision when I founded the site not to merely pick and repost whole news stories from other media. Rather, the goal around here is to present a larger context of the days events, from the admittedly quirky perspective of the People's Economist persona, and use available news sources (with links for reference) as a scholarly effort. Whether you agrees with my "scholaring" is neither here, nor there. It's a key point to munch for breakfast because the decision was made early on in order to steer well clear of potential copyright violations.

No, I don't know what happened to Jeff Rense's site, but I was often curious about how they viewed copyright works. "I wonder how they can get away with having people reposting whole articles" I asked myself, time and time again.

Today, we can report that Google has lost a key copyright case in Europe that involves a string of Belgian newspapers that complained about how Google linked to their sites and they have - at least for now - have won, reports Business Week..

If you look at Google's news site, http://news.google.com, you'll see that what Google seems to do is grab a headline from a source, take the first paragraph of the headline, and offer a link via the headline (or related stories). Thus, it would appear that what Google is doing, it could be argued, it presenting a short citation with a link to a source. And, absent any commercial (e.g. for profit) content on their news headline page, it could be argued that this is within the "fair use" provisions of the Digital Millennium Copyright Act.

The other side of the argument however, it could be argued that Google is not engaging in any original works, and is merely "piggy backing" on the original works of the Belgian papers. One could argue that minus some what's called in the old world of newspapering, some "enterprise" beyond cutting genius level spidering code, sites that allow large scale cutting and pasting of whole stories as the bulk of their content, could be in trouble. Google will no doubt appeal.

-Goldilox

For the reasons cited above, TC has often exhorted us to snip only the portion of an article that relates to our own premise. That looks like it is coming to a head elsewhere in the blog world. It is NOT legal to copy a complete article or the bulk of one, only for the sake of copying. Good reminder from George!

Another side of the Iranian Nuke question was brought up by Jim McCanney.

With the resurgence of demand for nuclear power, the western momopoly on supplying it is threatened by processes that exist outside the realm of the big five. The nuclear fuel business is likely to go ballistic (pun not intended) soon.

This could be supported by the fact that Rummy's Swiss consortium sold the North Koreans their reactor, with little concern about placing nuclear fuel in the hands of a known "Rogue state".

So, might the unspoken concern not be access to the technology, but rather, access to the markets, especially for owners of fewer in-ground petroleum reserves?

Is U fuel the next generation oil-gold relationship?

Topaz--not sure if I understand how "faith in currency" can propel the price of gold upward. Shouldn't LOSS of faith in currency do this? Would enjoy clarification.

Re numismatics, some anectodal evidence. I can vaguely remember the 1980/81 timeframe. I knew a 17 year old kid who owned a coin shop and was making $20K a pop on rare coins. This was before grading of course, and it was a very difficult market--you really had to know what you were doing. I remember my amazement at the money he was making. Of course $20K was worth much more back then!

I don't know if EBay is exactly the guidepost for all this. I think it's about the big money deciding to enter the market for numismatics, like they've already entered the market for art--and then prices go to the roof. Of course they will have access to a wall of paper money versus a limited supply of precious coins.

I also think that if one were to go back to the Weimar hyperinflationary period, people were desperate to get their hands on anything physical in the final throes--real estate, art work, factories, etc. There's a book called "When Money Dies: the Nightmare of the Weimar Collapse" by Adam Fergusson, I've been meaning to get my hands on at the library. It's a rare book and out of print. But this is an extreme case and we're not there yet.

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

I've mentioned previously about the inflation in Zimbabwe. You'll be shocked with the latest reports that inflation there is running 1,594% on an annual basis, reports an AP dispatch in the International Herald Tribune. .On the other hand, just think what that would be doing to stock prices. Oh? Did I say something? You seem a bit pale....Take comfort my friend that the latest reconstruction of M3 (M3b) by Bart over at www.nowandfutures.com looks like its loafing along at an annual rate of only 11.2%, or so.
---
Well, not to kick sand in your face, although we do own a gold coin which ought to fare well through any inflation, but according to Yahoo's figures, the Dow closed the first day of trading this year at 12,474.52. In order to just keep even with inflation at the M3 (digidollars counted) rate, the Dow ought to be at about 12,600, or it won't even retain its purchasing power. That's admittedly ignoring dividends, but that also ignores commissions and fund costs if you play that game. Now you can explain to your friends why the Fed played "hide the sausage" with M-3 last year.

-Goldilox

I still think the DOW vs gold equation speaks VOLUMES!

DOW 2000 = 12K = 48 oz Au
DOW 2007 =12.5K = <19 oz Au

The DOW that has "held up nicely" with the support of massive liquidity, seems to have misplaced about 29 oz of GOLD! No inflation here, Ollie.

By my calculations, for the DOW to have "retained" its purchasing power from Y2K, it should be at 32000!

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteThe 10:00 spankin' has materialized, right after a run on $670 at the open.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aLb8zy30.EX0&refer=news
The U.S. trade deficit widened to a record for a fifth straight year in 2006 as American purchases of Chinese goods and imported oil overwhelmed an increase in exports.

The gap between imports and exports expanded 6.5 percent to $763.6 billion last year, the Commerce Department said today in Washington. The shortfall increased to $61.2 billion in December from a month earlier, more than economists forecast...
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Consumer spending now accounts for about 70% of U.S. GDP. Does spending money - particularly borrowed money - give evidence to healthy economic growth?

@ Goldendome,

Good thing we had a warm autumn and early winter. Just think how wide that gap might have been with greater fuel demand.

A brief "run down" will indicate just how costless, indeed how profitable � to the participants, is the creation of new money. If the Fed puts through buy orders in the open market, the Federal Reserve Banks acquire earning assets by creating new inter-bank demand deposits. The U.S. Treasury recaptures about 95% of the net income from these assets. The commercial banks acquire free legal reserves, yet the bankers complain that they are not earning any interest on their balances in the Federal Reserve Banks. On the basis of these newly acquired reserves, the commercial banks can, and do, create a multiple volume of credit and money. And, through this money, they acquire a concomitant volume of additional earnings assets.
How much is this multiple expansion of money, credit, and bank earning assets? Thanks to fractional reserve banking (an essential characteristic of commercial banking) for every dollar of legal reserves pumped into the member banks by the Fed, the banking system can, and does, acquire about 208 dollars in earning assets through credit creation, Initially, all credit creation involving dealing with the non-bank public results in a concomitant expansion of means-of-payment money. Over time, due principally to the trend increase in the public's holdings of currency, and the diversion of saved demand deposits into time and savings deposits, the multiplier for money (m1) declines to about 31. That is for every dollar of open market purchases by the Fed, $31 are added to the means-of-payment money supply (m1). Unfortunately for the rest of us, this money creation does not provide the remotest assurance or possibility that the dollars created will be matched in the marketplace by an offsetting addition to the volume of goods and services offered.
The recent nadir of the U.S. dollar originates from central bank mismanagement. An irresponsible central banking policy permitted the determination of the volume of legal reserves of the member banks to be dictated, by the profit proclivities of commercial bankers (the fallacious real-bills doctrine). During the Christmas season, the central bank should (1) deny additional and excessive reserves to the banking system that restrains the federal funds rate (the bracket-racket), (2) defers ending our protracted inflation, and (3) encourages free wheeling speculation. This would eliminate false signals to all markets and the "trading desk's" need to unwind excess liquidity beginning 2007.
Then, the level of interest rates should be left to the highly interdependent global financial markets. Central bank accommodation should not extend to helping a banker meet their obligations under their lines of credit and other "extra" demands on their clearing balances. Bankers should know they have to hold sufficient liquid assets to meet contingencies, or meet their obligations through their "managed liabilities". As it is, the FOMC accommodates the commercial banker's "seasonal needs", but not financial intermediaries... Beginning November 22, 2006 just prior to Thanksgiving, the central bank added 1.72 billon dollars of "holiday-reserves", knowing that ever since 1942, commercial banks have responded immediately to an injection of reserves. This volume of "holiday-reserves" allowed commercial bankers to expand their loans and investments by $357 billion (using the multiplier) - an oversupply of liquidity, which in turn, was responsible for the dollars wild gyration and downdraft.
"Incredibly wild night of action in FX markets as both Euro and pound verticalized in thin holiday trade to take out multiple option barriers and triggered a torrent of stops. Once the EUR/USD crossed the psychologically important 1.3000 level it invited massive inflows of speculative capital as momentum players, option sellers and wrong footed dollar bulls all scrambled for euros sending the pair higher by 70 points in a matter of seconds
Inflation in this country will never be brought under control until the Fed ceases these policies of accommodation and assumes the full money management responsibilities of a central bank. The pre-xmas expansion of reserves (the multiple expansion of money and credit) and the post-xmas contraction of reserves (the multiple contraction of money and credit) has been destabilizing to world wide markets (exchange rates & commodities). The dollars post-holiday retracement was accomplished without foreign exchange intervention. It was the result of our "Indian Giver". As any Fed watcher should know, ignore the seasonally mal-adjusted data.

For example, the Federal Reserve forced the currency pair EUR/USD downward, beginning 11/22/06;(from 128.16 to 133.67), bottoming on 12/02/06. Then forced the dollar upward beginning 12/02/06 (from 133.67 to 129.00 on 1/12/07). All of this took place without foreign exchange intervention

Gold has an inverse relationship to the dollar: PPP expresses, in relative terms, the purchasing power of currencies within their respective countries. For example: Assume the U.S. dollar/U.K. pound PPP (from our stand point) was equal to $1.50. This indicates that $1.50 could buy commodities in the U.S. having an exchange equivalence to the volume of commodities that could be purchased in the U.K. for one pound. The commodities involved are those included in the weighted price indexes of the respective countries. Obviously comparison of identical commodities with identical weights is not being made.

The equation is: PPP = Base year rate of exchange X Current U.S. index/Current U.K. index X Base year U.K. index/Base year U.S. index. Bilateral calculations yield correct cross rates. The base year rate represents a "normal" or equilibrium rate. The equation adjusts the indexes of the two countries to the same base period, i.e,., 1982 = 100.

Tariffs & currency pegs alter these relationships.

@Goldilox -Right- The report goes on to say (somebody) expects the figure (might?) improve this year as the $ drops in value (?) ...
The report also points out that we can expect 4th quarter Gdp to be adjusted down .7% from 3.5% to 2.2% - quite an adjustment, I think.

http://www.usagold.com/gold-coins.htmlThank you very much for that tactful reminder/admonition to all for the preservation of our health and welfare.

And really, the news is merely the frosting on the cake, so we ought not need that terrible much of it (i.e., whole articles) -- after all, it is the thought and action of PEOPLE who make the news and drive the markets, therefore it is the free and candid opinion of PEOPLE that we ought to be most interested in seeing shared (the cake) at this forum.

Case in point, this post was ALL cake (thought) and NO frosting (news). And yet, even in it's admittedly limited scope to address this topic, it probably contained a microscopic kernal of insight that might help someone frame their personal philosophy better than any mainstream article might have done.

Power to the PEOPLE, baby! Choose gold.

R.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteSomeone wants gold to close below Sinclair's plateau rather badly, but the buyers keep stepping up to bat around $663-4.

The final 30 minutes of COMIX should be "vedy interesting"!

http://goldnews.bullionvault.com/fine_art_inflationYes, it was LACK of Faith or a decline in LoF I meant Sire.
The whole Numismatic spectrum seems to me to be very subjective and a lot of "faith" is shown the respective gurus in deciding value here.
I personally can relate to a rarity value component for a Gold Coin of (say) 10X Spot when we're on a Gold standard ...but in the here and now, ??
Linked is an article by Adrian Ash relating to the explosion in high-end Art, there's no lack of faith in Fiat in this realm, yet!

http://www.physorg.com/news90510324.htmlLooks like monetary pressure is not the only kind of pressure affecting gold. why would someone be investigating the properties of gold at the center of the earth? Hmmm....
Yes its heavy would it sink in the molten core?

There appears to be a lot of anger in the cross-rate market of late Sir to wit, the GBP/EUR action over the weekend and consequent EUR/USD action at 1.30. Can you comment on this as time permits?
Given the obvious stresses a high Euro imparts, do you consider or foresee a breach in the Eurozone Pact, where they revert to national currencies, any time (soon)?

@Goldi

Think I count 4 whacks today. Guess they win this round with 0.15% gain on a day that saw more than 1% for a while.

But the day's trade is just entertainment. Its the big picture ($262 > $663) that matters.

Just sitting here watching the digits go by. . .

- Survivor

He shows the platform at $660, well above the major breakout level of $650. Mr. Sinclair says, "We are going for three closes above the Platform."

It would then appear that Mr. Sinclair's next price objective will be his, $682. price Angel (if you've seen his angels) and then $750 and on up... in fits and starts of course.

We will all see; looks like we're holding above $660 again today.

@ Survivor,

I'm trying to focus on the forward-looking "big picture".

Will Sinclair's 682 "magnet" be the next stop, or will we blow through that to test last May's highs in the 720's, before resting at the magnet?

Not terribly important to my physical stash, but I also gamble with some "paper" gold.

that we gold bugs are NOT the ones that are "looking into the Abyss"?

The gold-price managers have their hands full and are desperate, probably drops on perspiration on their brows, and all of them, "looking into the Abyss" every day now.

Gold wants UP, that's undeniable, and the Abyss lies there, for once it breaks loose just a little too much, it will be jumping from there and - the Abyss will swallow up the gold managers.

Thank goodness, we are not stuck in that responsibility - an impossible task. All we have to do, is just sit tight. And buy more, if possible, in the meantime. Actually, those hacks are being very kind to us.

SIERRA

Re: 'Old Resistance', 'old highs', 'support', 'platform',
etc.
There are numerous interpretations and plenty of excellent technical analysis available. Adding to the credibility of some of these forecasts are when they corroborate those of others who derived the same outcome independently, using different method(s).
I prefer the 'buy-and-hold approach', in which all possible short term and medium-term outcomes are given equal consideration, if not weighting, and based on fundamentals AND technicals.
Also, the last high in May should be inflation adjusted upwards, for the rapid depreciation of the dollar or
lower exchange rates.

http://www.ft.com/cms/s/f2b7d52c-bb06-11db-bbf3-0000779e2340.htmlImperial sunset? America the all-powerful finds its hands tied by new rivals
By Daniel Dombey
Published: February 13 2007 02:00 | Last updated: February 13 2007 02:00 -Excerpts:
"The world that was born with the end of the cold war is dead and buried. Today, America's sole superpower status, which steeled the Bush administration in its determination to go to war in Iraq, is losing relevance. Instead, the US has an ungovernable new world on its hands."

Mikal-- We are hearing much more of this one world rhetoric. As we hear of the 'new world' and it's 'order' as the only alternative, due to us misbehaving("ugly") americans( or global warming or others), socialism
is sold as tasteful and in vogue and corporate fascism is given a new face.

"This, at least, is the outlook of some of the world's most seasoned officials and international affairs experts, who believe that the US has lost power and influence and that an uncertain era is about to begin. The age they describe is one dominated neither by Washington's matchless military strength nor the old international -institutions."

Mikal-- Here the deliberate deception is extended by again blaming certain "institutions" which, in any case will undergo superficial reform or be merged into other more "benign" bodies without the tarnish.

""We are going through systemic change," Madeleine Albright, the former US secretary of state, says in an interview. "What has happened in the past six years has been a lessening of respect for American power . . . The world is going to be multipolar," she adds, referring to the growing influence of countries such as China and India and the likelihood that they will have greater roles in deciding the world's affairs."

Mikal-- Leave it to the baltic butcher Albright to tell us about "multipolar"! Does that mean justice will be served and she and her ilk will do hard labor at the poles?

http://www.wsj.comFREE PREVIEW
Credit-History Jitters Hit Derivatives
By Aparajita Saha-Bubna and Anusha Shrivastava
Word Count: 896
Mortgage lenders aren't the only ones losing sleep over loans to home buyers with shaky credit histories.
A corner of the derivatives market is caught in a high-stakes game that places two powerful camps on opposing ends of the table.
On one side are mostly hedge funds and banks betting on the deteriorating creditworthiness of subprime mortgages by buying credit protection through derivatives such as the ABX index or individual credit-default swaps based on loan deals.
On the other side are the sellers of protection, mostly managers of collateralized debt obligations, or CDOs, who are counting on these riskier loans ...

� THE FULL WSJ.com ARTICLE IS ONLY AVAILABLE TO SUBSCRIBERS.�

http://www.ft.com/cms/s/bb7866b2-bb06-11db-bbf3-0000779e2340.htmlDefault would send shockwaves round world
By Joanna Chung in London and Richard Beales in New York
Published: February 13 2007 02:00 | Last updated: February 13 2007 02:00 -Excerpts:
"If Ecuador fails to pay interest on its debt this week the move could resonate far beyond its borders.
Investment bankers, hedge funds and other investors around the world are watching developments closely - for the potential impact on the broader emerging markets and on a new, but fast-growing, sector of the financial world known as credit derivatives."

Mikal-- More fallout from the latest experiment in social
and financial engineering. "The waiting is the hardest part." - Tom Petty

"Some analysts doubt that missing this week's interest payment would have more than a limited effect on broader emerging markets sentiment, because Ecuador's debt counts for only a small portion of the market. But investors are on alert in case a default creates ripples elsewhere, particularly since markets are trading at levels that suggest investors do not expect to see defaults occur."
Mikal-- These warnings are becoming so old that they resemble cliches. But well written.

http://www.ecb.int/press/pr/wfs/2007/html/fs070213.en.htmlDuring the week endend Feb 9th, the Eurosystem trimmed its net postition in foreign currency by EUR 400 million to a new low of EUR 144.8 billion.

At the same time, under terms of the CBGA, their more significant gold reserves were lightened by EUR 70 million to EUR 176.6 billion.

Over the course of the past seven years, among paper and metal reserves, the Eurosystem demonstration continues to be that of an official preference for gold. Foreign paper holdings had previously been greater than EUR 200 billion, and gold had been under EUR 99 billion.

An example of right-minded policy.

R.

http://www.msnbc.msn.com/id/17130792/Bank credit card aimed at illegal immigrants
Bank of America's card for those with no Social Security number, credit - CNBC- Reuters - 11:49 a.m. ET Feb 13, 2007
NEW YORK - Snippit: "Bank of America Corp. has begun offering credit cards to customers without Social Security numbers, typically illegal immigrants, the Wall Street Journal reported on Tuesday.
In recent years, banks across the country have been offering checking accounts and even mortgages to the nation's fast-growing ranks of undocumented immigrants, most of whom are Hispanic, the paper said, adding these immigrants generally have not been able to get major credit cards."
Mikal-- Expanding the concept of "land of opportunity",
carries with it what some prefer to call 'ramifications".
But within environments of pervasive economic, social & financial neglect, distortions, dislocations or imbalances breed unlimited 'golden opportunities'.

The truth is inviolate and sacrosanct, otherwise known as the gospel.

Monetary flows (MVt) mirror their source: member commercial bank free legal reserves. Their lags and impact are identical. It is mathematically impossible to miss forecasts for real, nominal, or the GDP deflator.

Homeboys, this is worth billions. Subsequent to William McChesney Martin, Jr. (April 2, 1951 � January 31, 1970),
every other chairman was both ignorant and arrogant, i.e.,
Arthur F. Burns (February 1, 1970 � January 31, 1978)
G. William Miller (March 8, 1978 � August 6, 1979)
Paul A. Volcker (August 6, 1979 � August 11, 1987)
Alan Greenspan� (August 11, 1987 � January 31, 2006)
Ben Bernanke (February 1, 2006 � ). Bernanke is the best of the lot, he is intelligent.

Notwithstanding, no one understands money and central banking.

It is beyond the comprehension of the Fed's technical staff, academia, etc., etc. The mammoth misconception in economics is that in almost every instance in which John Maynard Keynes wrote the term bank in the General Theory of Employment, Interest & Money in 1936 it is necessary to substitute the term financial intermediary in order to make the statement correct: the Gurley-Shaw thesis, Reg Q, the DIDMCA of March 31st, 1980, the Garn-St. Germain Depository Institutions Act of 1982, etc.

The dollar is doomed, our government broke. No country has become and remained a world power if it is a world debtor and has a weak currency. From these unwanted events we can expect a vicious level of stagflation that will become an enduring feature of our economic landscape. And the United States will be forced into a high degree of economic isolation and perhaps into an increasingly totalitarian mold. Unless we are willing to make those fundamental reforms requisite to successfully competing in international markets, the continued decline of the dollar will finally force a payments balance on us. Under these circumstances, we can expect long term deterioration in the standard of living of the vast majority of the people in this country. And gold will be the beneficiary.



�

Hi Dave,

He is correct�most of the coins trade just above spot (on eBay) with the occasional, perhaps not necessarily rare, but hard to get�trading for a higher premium. Because my main quota (hoard) has been satisfied, I am one of the ones who sometimes bids on higher priced coins. The only real justification for this is basically because I WANT IT!....and I have the money. If I don't get an equivalent value back when I sell it sometime in the future�.oh well�it won't break me :)

On the other hand, I suspect what he is referring to are the American coins which generally go for 1.5+spot. I avoid those because I think that these are being pushed as a good investment. Reading about this same thing from the mid to late 1970's this was going on and lots of people were burnt as they began to collect supposedly rare coins in the ensuing collector coin bubble as gold went to 850. These same collector coin prices crashed with gold.

The majority of coins I buy are close to spot, the occassional one that is 'supposedly rare' I buy 'cause I want it. This is the same with banknotes�.I think they too are being pushed higher and higher�..but some of them I want so I shell out the cash. I don't necessarily believe that I might get my full money back or make lots of money on them. They are partially for investment, but not a requirement for my future�..again�I just like some of them. I have the cash and sort of disregard any outrageous notes and buy the ones I'd really like to own.

The so called rare coins and banknotes are more like speculation (to me) and bullion at spot will always be number one.

What do you think??? :)



Topaz (2/13/07; 02:08:31MT - usagold.com msg#: 152091)
RAP Numismatic appreciation.
I'd concur with those posters who see a deterioration in premium going up Sir RAP.
I rely on getting an impression of the current market by keeping a weather eye on ebay.
Admittedly the RARE Coins generally don't trade but the ones identified as commanding a premium of say 1.5 Spot + seldom even attract a bid.
The other consideration is that IF it's faith in currency generally that is propelling PoG (as might be the case now with full tilt global paper ...as opposed to historic Gold standard paper) any percieved multiple spot premium carried through in the past might now just dissolve away completely...given the current full spectrum Fiat state of play.

Hope to have been some help.

So I can't speak to his mental capacity. However, from what sources indicate about him, he's done pretty well over the years, regardless your opinion.

I doubt that anyone here takes his technical talk as gospel, as we've all seen errors in his calls. One thing that Mr. Sinclair has been loyal to, however, is his consistant opinion that gold will move higher over the years and his opinion that we all should be holders. (A view very similar to those expressed here.) --Best.

I've done the same thing with 20 dollar "Saints". If I had a couple of 14-s, I'd spend a little more for a 14-d or a 14 philly (where the mintage was only a tenth of the 14-s). Same applies on some of the other Saints the 13 and 15 come to mind. As you suggest, we do it just because we want it. As a collector of smaller demonination coins by date and mintmark, it can be a somewhat expensive habit to break. And while we know that we can't collect anywhere near a full set of "Saints", it's fun to have some diversity of samples.

A weak currency is not a cause; rather it is a symptom of a weak, noncompetitive economy. For a declining dollar, time will eliminate the deficit in our balance-of-trade. But the price exacted will be a sharp decline in imports, principally oil, and the purchase of foreign services, reflecting our relative poverty and inability to compete in the international economy. The fact that we are the world's number one producer of smart bombs will not arrest that trend.

It is economically advantageous for creditor nations, and for the world economy, if creditor nations operate with trade deficits: deficits proportionate to their creditor status. This is, the deficits should be large enough to enable the nationals of debtor nations to acquire a sufficient amount of foreign exchange to enable them to service their international debts.

It is difficult, and important, to know and be able to evaluate all of the significant economic forces operating through supply and demand and if possible their prospective, relative importance.

If the Euro were overvalued, speculators would quickly drive its price down to approximately its purchasing power parity (PPP) level.

"Excess" demand for the Euro has been fueled by foreigners who regard its land, urban and rural, and real estate, office buildings, condos, etc., as under priced at present exchange rates. Common stocks and bonds and various short-term creditor ship obligations are also attractive at present prices and yields. Interest rates have become one of the highest risk-adjusted rates in the world.

Lower nominal rates of interest would make equity investment in the Euro more attractive both here and abroad. While the demand for Euros to finance creditor ship obligations would decrease, the demand for Euros to finance equities would be on the increase. Price/earnings ratios would rise along with the higher earnings and profits derived from a more robust economy, both the consequence of lower interest rates.

Foreigners consider the Euro, a safe haven, and a currency with enough depth, to park exchange reserves, without worrying about foreign exchange losses.

In terms of the relationship of population to natural resources, Japan is a very poor country, poorer than Great Britain and much poorer than the U.S., yet Britain has, for the mass of their people, one of the lowest standards of living, compared to other nations in the European Common Market.

The real culprit for Great Britian seems to be the cost of their products relative to their quality. Inferior quality is not a good buy at any price.

And why would the European states want to pay more money for oil?

I fed-exed Sinclair the analysis showing long term bonds would peak Sept. 81. If you remember I was right. I don't think he was any different than Ed Yardeni buying gold at $800/oz. Gold fell after the first of 80. Who do you think was shorting?

Dennis Gartman: "Indeed, in debates on IMF gold sales previously, the Democrats have been the most ardent opponents. With the Democrats in control of the Congress, we can expect that opposition to remain intact. Finally, even if the gold sales were enacted by the 85% majority necessary to do so, we think it is quite reasonable to expect the Chinese to take the entire issue. It is not without reason that Mr. Zhou is on the Crockett Committee, is it?"

MK comment: I will say again that the natural position of nearly all the members of the IMF "eminent persons" panel (Crockett Committee) is, for one reason or another, as buyers. Not just China, but nearly all. And, yes, as I stated here at the time of the IMF press release, China would willingly take it all. (So DG and I are in complete agreement.) There is no need for anyone to make an issue of it. Simply make the call, arrange the exchange and load the plane. The wire would be prepared straightaway and delivered to the account of the IMF instanteously.

"A weak currency is not a cause; rather it is a symptom of a weak, noncompetitive economy. For a declining dollar, time will eliminate the deficit in our balance-of-trade. But the price exacted will be a sharp decline in imports, principally oil, and the purchase of foreign services, reflecting our relative poverty and inability to compete in the international economy. The fact that we are the world's number one producer of smart bombs will not arrest that trend."

****

May I ask your opinion as to what degree a currency's strength is determined by it's economy? Certainly political stability, varying interest rates of different countries, carry trades, etc are some factors of exchange rates but I do agree that paramount among these is the underlying economy. Could you list what you consider the most important factors that decide a currency's strength, and give some indication of the importance of each...sort of a weighted list of factors?

I know, at least for me, this would not be an easy undertaking but perhaps you already have a clear view on this and would be willing to share it. Thanks for whatever you can offer.

********

Also, other than a safe haven for wealth storage (and a good one at that) do you view gold as having a direct connection to currencies? Most everything bartered is priced in dollars...corn, cars, cotton, cantalopes + gold...but other than gold's trading value daily determined in a dollar amount (as are many commodities)...is there still a direct connection between the dollar + gold? Again, I'm a persistent lurker here so reply if you can + whenever is convenient for yourself. Thanks

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

February 13 (Reuters) -- Most-active gold for April delivery on the COMEX division of the New York Mercantile Exchange settled up $1.20 at $668.50 after peaking at $673.90, a six-month high.

"We are still seeing some pretty good buying interest. Yesterday's break was somewhat short-lived. We saw some renewed buying coming in off the weaker dollar," said Stephen Platt, analyst at Archer Financials.

Platt said that gold prices were helped by the notion that China was planning to diversify its dollar-based foreign exchange reserves. In January, China's premier, Wen Jiabao, told a conference of top policymakers that it would aim to expand the use of its $1.07 trillion in foreign exchange reserves, the world's biggest stockpile.

Platt said he expected the gold market was going to continue to track underlying support, but that it might hit resistance at the $678 an ounce area.

The dollar fell against the euro after solid euro zone growth data boosted chances of a European Central Bank rate hike next month. A separate report showed the U.S. trade deficit [$62.2 billion] widened more than expected in December, raising worries about the growth outlook, further weighing on the greenback.

Citigroup said it expected gold to test the $700-an-ounce level in coming months, citing strong physical and fabrication demand and decreased net central bank sales.

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

From Flow5's 152119 post...

"Notwithstanding, no one understands money and central banking."

Now then, that does make me feel a whole lot better. I have been trying to figure this one out for years + years. I often putting myself to sleep at night thinking of exactly how different monetary currencies are valued against each other + against resources used worldwide. And, I came to the conclusion that I probably would never understand it well enough, if at all. It's nice to know that my ignorance is shared by the best of us. Sometimes I think the chart readers disdain of fundamentals may be right, except that they don't often beat the coin toss odds either! But the gold price from 252 to the current 660s or so looks right nice on any chart, no?

As to the above quote, thanks, now I don't feel as ignorant. But even if the quote is absolute truth, we certainly don't lack opinions. What a great puzzle... and the POG somehow connected. I'm not sure how, but......

Thank you all for the varied opinions. This was not a request for advice, just opinions on the tracking. My total rare coin investments so far are less than .5% of my bullion, so it won't break me if it all goes bust.
I have started a registry set and it is the most addictive thing I have ever done!
I have not invested a cent, just traded for bullion, and have already made a profit from it, and it is sure better than watching boring bullion gather dust.
RAP

Get Prepared For Inevitable Inflationary Pressures Should This PassClean Energy Act of 2007

Having finally reviewed the "Clean Energy Act of 2007" presented by House Democrats introduced on January 12th, all I can say is that these people are complete idiots. It will do nothing to help the US become "Energy Independent? Nor will it do anything positive for the environment. Some of the more insane elements of the bill are as follows:

1. Takes away the ability of the oil and gas producers to use the manufacturing tax deduction that is available to all other industries and is a part of the "American Job Creation Act of 2004".

2. Force leaseholders in the deepwater Outer Continental Shelf block leases issued from 1998 to 1999 into renegotiation of contracts to reset oil and gas price limits on royalty relief. Under the proposed bill companies don't renegotiate the terms of their leases will be forced to pay stiff fines or be excluded from future leases in the Gulf of Mexico.

3. Disallow the expensing of geological and geophysical costs under the life of the producing properties. The bill would shorten the period to a 2-year amortization period for most producers and to 5 years for large integrated companies.

4. Repeal incentives for high cost and high risk deepwater gas production on the Gulf of Mexico Shelf and for oil and gas production in deepwater.

5. Shorten lease periods for the Alaska National Petroleum Reserve and withdraw incentives for exploration and production in the reserve.

6. Impose new taxes to pay for federal renewable and alternative energy sources and conservation measures.

These sociopathic politicians are more interested in punishing the energy industry rather than finding ways to achieve energy independence. It is also perceived as a way to punish oil and gas companies for making a profit (well within the average return on investment compared to the average return in the S&P 500 index).

If the bill passes the House and becomes law, the end result is the write down of many domestic projects and degradation of US energy investments. Domestic energy production will dry up and we will become even more dependent on foreign oil and natural gas. Currently we supply 63% of our own energy needs.

Just as happened in the late 1970's with the passage of the Windfall Profits Tax on energy, the price of oil and petroleum products will rise with the addition of the US demand for foreign oil sources. In the end, the US government actually got less income from wellhead royalties and taxes than they did before the punitive measure. Ultimately consumers are the ones who paid the price.

It is doubtful that the US Senate will stop the House proposal. The Senate has their own simplistic measure introduced on January 4th to "eliminate tax giveaways" and "prevent price gouging". The only "line in the sand" is likely to be a presidential veto. However, now that George W. Bush is a born-again environmentalist we will probably see much higher energy prices in our near future.

Should this energy bill pass, we can actually profit from this by taking profits on energy shares of companies that rely on domestic production. That would put us on track to invest in foreign energy production (domestic and foreign companies), some high yielding Canroys, Amroys, and limited partnerships. While the politicians "fiddle while Rome burns" we can take advantage of the resulting high inflation and profit by investing in precious metals and precious metal mining shares. (Physical precious metals as a most imperative "portfolio insurance" and unhedged shares as a speculative play)

That said, first things first - "get out of debt and stay out of debt, stash enough emergency cash for several months' household expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities"

We live in "interesting times".

- Black Blade

Today's dialogue on rare coins, numismatics and bullion
contained some great points (and counterpoints). Essential reading for those with collecting proclivities IMO.
I have often commented on blogs how I feel economic crisis
is coming and will affect "rarity" perceptions.
But I'm reminded that some markets are, like segments of numismatics, often deep enough to withstand downturns.
Like some homegrown institutions that prosper on patronage and comraderie, loyalty in 'hard times' can make a big difference.
Add in all the new interest in coin collecting in the US, generated by new 'state quarters', new nickels and now new dollar coins including gold commmemoratives.
Lastly, I'm nearly certain registry collecting will be hot, as the investment appeal of rare coins as an alternative to Wall Street takes on an entirely different meaning in this age, notwthstanding the tech/internret bubble burst of 2000, and the appeal of gold Buffalo and Eagle bullion now in four sizes. Proofs and silver dollars as well.
Anyways congratulations on your hobby and good luck!

R.Powell, I know you were responding to flow5,
methinks the Fed chairmen have played a chess game that is not a stumbling around in ignorance.
I would say that I have 2 views. One, that perhaps planet earth and history would have been better if we had not had the banker boys playing geopolitical games for the last 100 years, and we still had the old mostly small farm based communities.
However, how would that have handled 6 billion people around the globe?
The other view I have, is that self interest, and opportunity, good or bad, brought us to the point where here we are with a shot at planetary globalization on the first try. The Fed did not sleepwalk during these last decades, and geopolitical action, religion, resources, chance, gives us a chance at a global cooperative structure that will have to look different than what we have now, but may very well be a structure that the top central bankers are at present trying to achieve.
I think those who see only -empire, or hedgeonomy-, miss the possiblility, that the globalists, the top ones, the central bankers, and the very top of the political guys, are trying to actually bring something about that for all its drawbacks, is at least realistic and dealing with real issues, in trying to end the history of trouble amongst us humans, to whatever extent we can, by cooperation.
If we time it right, when the Klingons or Jedi show up for tea, we wont look like such a mess.
Or perhaps the lord will show up or send some staff to help bring it that last mile.

http://news.goldseek.com/GoldSeek/1171386000.php Gold Shocker! "Rising Prices a Bullish Sign" - Adrian Ash - February 13, 2007
Short essay pokes fun at mainstream news accounts of gold activity & uses some good quotes and statistics, such as the POG in different currencies, e.g. the POG in YEN recently touched a 23 yr high! A perspective on money expansion around the world.

http://www.bloomberg.com/apps/news?pid=20601083&sid=aNN.qICa8TZA&refer=currency Carry Trades to Unwind as US Slows, Dresdner Says - Bloomberg - 02-14-07

http://www.reuters.com/article/reutersEdge/idUSL1380121620070213?src=021307_1222_INVESTING_comment_n_analysisAnxiety simmers about financial Krakatoa | Reuters | Feb 13
A European financial 'correspondent' for Reuters has a concise (don't let the 4 pages fool you)and distinctive
take on some major issues economic.
Breakthrough reporting, this time it's Reuters.

http://www.kitco.com/images/live/gold.gifLooms large on the horizon for Au and Ag.
0845hrs GMT and the boys, having been for a bit of a romp, are bought back to their masters in good shape.
We must then have the ritualistic "cup of tea" before letting them loose again.
MVP? ...hard to pick in this arena just now.

@BB,

I agree with your assessment of the House measure, if not with your analysis of big oil's profit margins.

The measure certainly lacks in any focus on energy "research", and only passes tax loopholes from one lobbyist group to another, as that's about the most that Washington AC/DC can accomplish. "OK, it's time to hand the Halliburton subsidies over to ADM for burnable corn whisky. Some solution.

As to serious ALT Energy, the current lobbies and disinfo campaigns have so demonized any non-mainstream "research" that no one dares support it for fear of being branded "kook".

When I studied Natural Sciences (in the dark ages), we were told that if some of our research didn't lead us down a rat hole or two, we weren't really on the "bleeding edge". What passes for research today is really just product development, using well worn technologies to "stretch a buck", and shunning fundamental research as "too financially risky".

Since CONgress is all about trading tax benefits for campaign contributions, it's unlikely that they care a whit about "research". Worse yet, they are completely clueless as to who is even doing any, since most have been branded as politically incorrect "kooks" already.

This is nothing new. It dates back (in this country) to Edison and Westinghouse demonizing Tesla as soon as he challenged their "sacred cows", which they might not have even implemented without him.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_lite$670 broken at 12:20PST

Let's see if it holds in Merry Old!

http://www.mineweb.net/mining_finance/628738.htmBy Dorothy Kosich
MineWeb.com
Wednesday, February 14, 2007

RENO, Nevada -- Citigroup metals analysts John H. Hill and Graham Wark urged Barrick Gold to aggressively reduce its hedge book or repurchase the entire hedge book, an action that "could be one of the most compelling re-rating catalysts in the metals industry." ...

* * *

For the full story, please use the link above.

Barrick will need to find some serious selling to unload it's hedge book into, otherwise, Barrick will be cutting its own throat buying into a rising market. Sometimes it is not easy to offset huge positions without jolting the market but maybe they can position elsewhere (other than Comex or other then gold) to hedge....? Interesting problem, no?
Maybe physical delivery into contracts is their best option, depending upon their financial situation. Maybe the $$ they borrowed through hedging has increased production enough to compensate for delivery (of a percentage of their now greater production) into lower hedged prices. I don't know, of course.
Maybe a hedge (say long silver) and then standing orders to buy gold just below the market or..? There are ways but I don't believe they will just offset in mass.

From your post...

"The other view I have, is that self interest, and opportunity, good or bad, brought us to the point where here we are with a shot at planetary globalization on the first try."

I'll agree. Pragmatic self-interest is a strong force....putting to good use the available capital in "capitalism". I favor this politically + as a means to improve the lot of humanity, worldwide. This is a major tenet supporting the freedom + right to hold gold. Unfortunately, our Republic may be evolving into a centralist Empire....so hide some of that gold!

down 45

Do you remember the days of sub $300/ounce gold and $4-6.00 silver? Do you remember the days when a $2.00 gold gain for the day was exciting? And now we have $2.00 ticks in gold and 20-40 cent days with silver! Are we having fun now? There is liquidity yet, and currency to invest. But I, for one, would not invest wealth in currency for savings.

http://www.thestreet.com/newsanalysis/investing/10338309.html Not-So-Little Lies in Inflation Data - Doug Kass - TheStreet.com - Feb 14, 07
Compares some of the different indexes used by the Fed and regional Fed banks and suggests ways to determine price inflation.

down 58

Nice swan diver


The markets are ignoring this latest move
and silver and gold are now in pullback mode after climing over 8 bucks this morning.

MOre bloodletting to go.

as the PPT tries to back and fill what seems to be

a resistance bunker buster coming .

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteSpot hit $670 last night and 671 this morning, and each time bounced like a bird off a plate glass window, but each retreat reforms at higher lows.

Sir Gandalf, release the hounds! Roo meat for all.

The days when PoG was a reliable proxy for the Basket of currencies on the opposite side of the DX equation are but a fond and quickly fading memory of those who attempt to control such things however ...
...just recently, you'd be forgiven for thinking we'd returned to the bad 'ol days of UP in Dollars, squat in alts.

Rest assured, WE Haven't!

(just tried to link to the Galmarley site ...it's having a lie down, but those who watch such things will know where to look)

Of course, if the Fed has been sleepwalking, and just winging it trying to lengthen the dollar US advantage, and globalization is just a ruse, then fibbing by Bernanke exampled just below, has no hidden merit, and is just lying.

Ben Bernanke, the chairman of the Federal Reserve, saying, "there is little evidence that the weakness in housing markets is spilling over more broadly to consumer spending or aggregate employment"
"private households have drastically curbed their mortgage borrowing. It amounted to $672.7 billion in the third quarter 2006, sharply down from $1,223.6 billion in the same quarter of last year. Mortgage equity withdrawal peaked at an annual rate of about $730 billion, or 8.1% of GDP, in the third quarter 2005. One year later, in the third quarter 2006, it was sharply down to $214 billion."
So roughly $500 billion has been taken out of the growth in spending from borrowing? How can this NOT spill over "more broadly to consumer spending or aggregate employment"?

Mogumbo"So while Bernanke may be thus left in the dark, we are not, as we are right there as Dr. Richeb�cher says, "Considering the dramatic reversal in the housing bubble, a virtual collapse of consumer borrowing is definitely in the cards for the United States."

"More frightening, he reports, "In a study conducted by Credit Suisse First Boston, the Chinese consumer will likely have displaced the U.S. consumer as the engine of growth in the global economy by 2014." In only seven years! Less than two Presidential terms!

And that means (counting on my fingers) that in only six years, they will "almost" replace the United States. And that means that in five years, China will be "nearing the time" to replace the United States. And that means that in four years China will be "well on the way" to replacing the United States. And all of that means that, starting right now, and for every year from now until the rest of your life, the Chinese will be gobbling up more and more commodities.

And if there is one thing that can make it possible to have this much growth without the usual attendant inflation in prices, it is to export the inflation. How pleasant to send inflation to, for instance, the United States, by letting the dollar and the idiotic American economy collapse, taking with it all the other idiotic economies so similarly arranged.

Thus China would emerge as the economic colossus of the world, and will be able to buy anything they want, as much as they want, any time they want, paying bargain-sale prices as the yuan becomes stronger, and continues to get stronger and stronger, and thus all of the imported inputs to Chinese industry will be (thanks to the strong and strengthening yuan) relatively cheap, and always getting cheaper! And that's how you can export some serious inflation, dude! Hell, we have been doing it for decades ourselves!

The flip side of the coin is that somebody has to import that inflation, and that will now be us. But don't get me started about price inflation, or about how we are all freaking doomed, because you know how I am about that stuff. Ugh."
If globalization is a ruse, or if the chinese decide to play it as a ruse, then this next data supports the actions of our belief in gold insurance.
"The DJIA in terms of gold has seen the index fall by 64%, and when the DJIA is calculated in terms of the CRB, it is off 50%"

That \/ was almost all quotes from mogumbo guru

PoG would seem to be more a proxy for the combined Dollar/Bond composite at present, which explains it's lacklustre performance visavee the wilting Buck. (Bonds are big time green today)
This evolved, it would appear, as a natural follow-on from the growing influence of Futures pricing on the current/Spot landscape.
In fact, with Futures/Derivatives playing such a large role in "current" pricing right across the spectrum (Commodities etc) when a situation arises that commands a "current" price adjustment, all hells gonna break loose.

http://www.atimes.com/atimes/China_Business/IB15Cb03.htmlIn the wake of Tuesday's announcement of yet another record-smashing US trade deficit, the usual chorus of moans about China's currency is in full voice. China must stop "manipulating" the yuan to keep it undervalued, we hear. Yet, argues Henry C K Liu, no government leaves the exchange rate of its currency to market forces. This is particularly true of the US, which sings free-trade lyrics to protectionist music. The trade distortions have been created by US policies, and the China critics are in effect telling Beijing to pay for American errors.
----------------------------------------------------------------------------------------------------------------------
See URL for full text.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1368960.ece"Turning to the pricing of risk in the markets, the big event of last week was not the G7, but a well-sourced story in China's Southern Weekend newspaper, reporting that the Finance Ministry had approved the creation of a new institution, the State Foreign Exchange Investment Corporation, to manage China's $1.1 trillion of foreign exchange reserves.


These reserves, growing by nearly $200 billion a year, have so far been managed by a department of China's central bank, the State Administration for Foreign Exchange, and invested almost entirely in government bonds and other low-yielding but supposedly risk-free assets.

The new State Foreign Exchange Investment Corporation will have a very different mandate, including a diversity of assets such as overseas shares, and perhaps even property and direct investments in the West. Reportedly, an initial $210 billion in equity investments has already been approved. If the reports are correct, this could represent a sea change in global markets, and especially in the relative valuations of bonds and equities. �..

� China's decision to shift part of its reserves from bonds to equities could prove far more important to markets than anything on the G7's agenda."

----------------------------------------------------------------------------------------------------------------------
See URL for full text.

http://www.kommersant.com/p742503/VAT_Mining_Tax_Cut/HEADLINE: Finance Ministry OKs a VAT Cut

(Feb 14) -- Russia's Finance Minister Alexey Kudrin said Tuesday VAT may be cut from 18 to 15 percent in return for an increase in the mining tax. The ministry will thus respond to President Putin's request...

Finance Minister Alexey Kudrin said the ministry would be willing to cut VAT to 15 percent in 2009 or as early as this year. Prime Minister Mikhail Fradkov insisted on a further reduction of VAT down to 13 percent.
...
The VAT reduction to 15 percent will cut 357 billion rubles ($13 billion) from the Russian budget, under early estimates. To replenish the coffers the Finance Ministry proposed to increase the mining tax. As the state annually collects 1.1 trillion rubles in the tax, its rate is likely to be increased by 30 percent with additional 400 billion rubles coming to the budget.

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

First, thanks again to my friend G. for providing the link.

What this article demonstrates is merely a small yet typical step down the trail that a few of us for a couple yearns now have been commenting about here at the forum regarding a political eventuality toward an altered economic paradigm that will emerge as distinctly favorable for physical gold ownership. Additionally, and equally importantly, as you should be able to see here, there is predictably little joy to be had for investors who might try to gain leverage into this eventuality by positioning themselves in paper proximities such as shares of taxable mining operations or else defaultable papergold contracts.

If nothing else, please build your awareness that mining shares are quite likely NOT the place to be when the natural resource in question elevates in status to that of an asset having strategic national importance. Be it through outright nationalization as currently witnessed in our Latin neighbors or through (more P.C.) taxation, the public at large (i.e., via congress or parliament or dictator) will not stand aside letting bonny windfall profits continue to acrue to a private enterprise harvesting the national treasure.

Reality bites? Whether or not this bites you depends where on the dinner-plate you choose to stand.

R.

Author of "the Coming China Wars, Where They Will be Fought, and How They Can be Won" http://www.peternavarro.com/sitebuildercontent/sitebuilderfiles/chinapricereport.pdf

China applies a series of measures that, by allowing for refunds, reductions, or exemptions from taxes and other payments owed to the government, appear designed to subsidize exports of manufactured goods or to support the purchase of domestic over imported equipment and certain other manufacturing inputs. These measures appear to be contrary to a number of WTO rules, including the explicit prohibitions against export subsidies and import substitution subsidies set forth in the WTO Agreement on Subsidies and Countervailing Measures. Susan Schwab - UST

Susan Schwab United States Trade Representative
http://www.ustr.gov

The NAM believes that the yuan is undervalued by as much as 40 percent (as of 7/05).
http://www.msci.org/GovtAffairs/chinatradeagendajanuary2005%20final.doc

Until July 2005, China's currency had been fixed at an exchange rate of 8.27 yuan per dollar since 1994. As of Jan 2007, the currency rose 6.2% since the currency peg ended July 2005 (to 7.7949 per dollar). Real GDP has grown an average of 9.6 percent in the past five years. With an export driven economy, China's foreign-exchange reserves have risen to $1 trillion. Shanghai and Shenzhen stock exchanges were up over 300% in 2006 to 35x earnings and a $1.01 trillion valuation.
http://www.wto.org/

http://www.heritage.org/Research/TradeandForeignAid/BG1698.cfm --- piracy/protectionism

http://www.ajc.com/business/content/business/stories/2007/02/14/0214bizchinalabor.html China's Besieged Factories
Activists Seek to Expose Unscrupulous Labor Practices to Shame Companies | Craig Simons - Atlanta Journal-Constitution - February 14, 2007

http://www.usagold.com/amk/newsgroup-form.htmlWhat is motivating the gold market?

Why is the on-going yen devaluation so important to gold? (Two reasons)

For U.S.-based gold owners: Is something going on in the gold market while we sleep?

Citigroup says $700, then $850. . . .We'll let them tell the story.

* * * * * * * * * * *

To keep up with what we believe to be the most important articles on gold, we invite you to join the USAGOLD NewsGroup.

It's cutting edge.

It separates the wheat from the chaffe.

It's free. . . .

We invite you go to the link above to join our inclusive, informative, incisive and rapidly growing NewsGroup.

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

And Happy Valentine's day to all. . . .

If things work out as planned, our distinguished and honored castle wizard might have a Happy surprise later on. . . . . . . .

<;-) Notice !!!
Get perpared for a CONTEST in the near future !
(see that Sir Slingshot ?)

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

February 14 (DowJones) -- Gold futures rose Wednesday, helped by a softer U.S. dollar that was in part due to congressional testimony from Federal Reserve Chairman Ben Bernanke, analysts said. The COMEX April contract rose $3.50 to $672, hitting its strongest level since early August ($676.60) before backing down.

Much of the impetus for the metals' gains came from a softer U.S. dollar, said John Person, president of National Futures Advisory Service. Remarks from Bernanke, before the Senate Banking Committee, left the financial markets thinking U.S. interest rates are likely to remain on hold for the foreseeable future, said Person.

The Fed chairman said current monetary policy "is likely to foster sustainable economic growth and a gradual ebbing of core inflation." Still, he said, inflation remains the Fed's "predominant" concern and policy-makers are "prepared to take action" if necessary.

Person listed the next major resistance area for April gold around $680, followed by $700 and $720.

Commercials are actually short the market," said Person. "But there is a lot of fund buying. It's very consistent, not giving up anything on breaks." Buyers do not appear to be constantly going "in and out," he said. "They're staying in and adding on."

He later added, "I think people are coming into the gold market because they don't trust the equity markets and they keep seeing the (gold) market steadily making gains."

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

http://www.usagold.com/gildedopinion/rocketschool/20070214.htmlIn this Valentine's Day lecture von Braun writes:

Since Aug. 15, 1971, the world's monetary system has been divorced from reality, ever since President Nixon closed the gold window. The reality I'm referring to is the one that allows one to settle one's account.
...
The comedy routine is now in full swing as the comedians try to out-do each other, while confusing the general public with flashing lights, sound bites, color coded stage sets and figures and, oh yes, lots of fancy numbers flowing across people's screens. The one thing missing is of course settlement.
...
At what point does the rest of the world wake up to the fact that the mountain of debt created by the US banking system cannot be paid? What this implies is that all of these so called transactions are not transactions at all, since, for there to be a transaction, there needs to be an acceptable method of settlement.

The "official" means of settling these transactions was divorced from the transactions themselves when the gold window was closed.
...
Since Aug. of 1971 gold quoted in US dollar terms has increased from $35 per ounce to its current level of $660, which suggests that 'unofficially' it is still the favored principal unit of account and is likely to continue to remain as such.

^___(see commentary at url)___^

http://www.mg.co.za/articlePage.aspx?articleid=298761&area=/insight/insight__comment_and_analysis/(excerpts) 13 February 2007 -- ...the rules of the game China is playing in its unprecedented drive to industrialise a 1.3-billion strong population ... requires it to establish massive and sustainable supply lines to secure resources that fuel its vast factory-floor economic model.

...this is the major pillar behind African-Chinese trade. ...much has been said about China's new "colonial" role in Africa...

There are a couple of interesting factors that make up China's drive to secure mineral resources and energy assets. The first is the sheer scale of the undertaking.

The other is the role of the state in securing these resources... the Chinese government plays a prominent role in meeting these strategic requirements, while most other governments rely largely on the invisible hand to meet a rising supply and demand needs.

******A sign of things to come is the Belinga Project in Gabon. Purported to be the largest untapped iron-ore reserves in the world, a Chinese consortium came head to head in the contract bidding with Brazil's CVRD -- the world's largest iron-ore producer.

Because Gabon's iron-ore reserves are situated deep in equatorial forests, massive infrastructural costs have excluded previous iron-ore suitors. Enter the Chinese consortium, which offered to a) build a new railway line 560km into the jungle, b) construct a deep-water harbour from which to export the iron ore, c) develop a hydro-electric dam to supply electricity to the project, d) finance the initiative, e) bring in Chinese labourers to build it and f) offer to buy the entire mined output.

Not surprisingly, CVRD got blown out of the water in the bidding process...

...Bear in mind that China has more than a trillion dollars in foreign reserves... One of the reasons it is reluctant to completely open its currency to market forces is the inevitable appreciation of the Chinese yuan against major currencies such as the United States dollar. Even a "small" 10% depreciation will wipe off $100-billion from Chinese reserves -- enough to finance the estimated project costs of Gabon's Belinga Project 169 times over.

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

Stats like this can give you an idea of the magnitude involved in our discussions of reserves versus wealth. Gold metal is a tangible wealth that not merely 'represents' payment in full, it IS payment in full. Bond holdings, on the other hand, merely represent the tally of transactions that have yet to be settled. And from the paragraph above, you can definitely see the scope of the outstanding issue.

The bottom line is that it is the tangible wealth that truly matters, and these figures demonstrate that there is massive upside potential for gold to move (revalue) in order to mitigate the outstanding (im)balances represented by the bond holdings among international reserves.

R.

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

The word on the street is 13,000 is far less than the real number.

Chrysler to Cut 13,000 Jobs in Overhaul
By MICHELINE MAYNARD
Published: February 15, 2007

AUBURN HILLS, Mich., Feb. 14 � DaimlerChrysler said today that it was leaving all options open for the future of its struggling Chrysler Group, which announced a plan to close all or part of four plants and eliminate 13,000 jobs in North America.

The announcements came as DaimlerChrysler said it earned nearly $7.3 billion last year, despite a loss of nearly $1.5 billion for Chrysler. The Chrysler loss compared with a profit of just more than $2 billion in 2005.

"It was a strong year at three of our divisions, but it's been a difficult and disappointing one here at the Chrysler Group," Dieter Zetsche, the chief executive of the German parent, said this morning.

The restructuring plan marked a dramatic swing for a company that had seemed to avoid the same declines as its Detroit rivals.

Goldilox

dem bones, dem bones . . .

Our communist containment deficit was the exclusive reason the U.S. dollar ceased to be freely convertible into gold on March, 1968 (i.e., U.S. unilateral transfers of funds by the Federal Government to foreigners.) The private sector didn't run a deficit until 1976

After the Bretton Woods System collapsed in Feb 1973, the dollar continued to depreciate relative to other major currencies, -- 1970 to July 1980. By 1976 all of the world's currencies were floating. The dollar's current account deficits continued, however dollar weakness, was temporarily interrupted, in July 1980, by large favorable interest rate differentials - until February 1985 (the consequence of Paul Volcker's extremely flawed monetary policy). But our burgeoning trade deficits eventually transformed this country from this world's largest creditor to the world's largest debtor in 1985 � for the first time since 1917.

The trade deficit's principle villain (since 1973) has been our dependence on foreign oil. Moreover "Hubbert's Peak" contends that world oil production, has passed its peak, and 1) that the future course of production will fall along a bell shaped curve, and 2) the U.S. price of imported oil per barrel will rise, and 3) and that the U.S. dollar's decline, along with the price of gold (its exchange weight equivalence - PPP) will rise inversely proportional to higher prices at the pump.

From 1950 to 1967, our military industrial complex and its foreign arm, finally broke the dollar. Nowadays, we have never ending foreign trade deficits due to (1) an insatiable appetite for oil ($474 billion in 2006), and (2) the continued rise in the price of a barrel of oil (its scarcity), and (3) the continuing decline in the exchange value of the U.S. dollar 3) the wars in Afghanistan and Iraq along with our foreign military bases ($116 billion for Afghanistan/Iraq, $784 billion (DOD) ---war economy budgets), and 4) by our trading partners, who are export dependent for full employment, shifting their allocation of foreign-exchange-reserves.

Without compensating for these drains on the dollar, its foreign exchange value will be relentlessly, and inexorably downward, say vis-a�-vis, the St. Louis broad trade weighted index (see TWEXM, Trade Weighted Exchange Index" Major Currencies) http://research.stlouisfed.org/fred2/series/TWEXM?&cid=15 This will inevitably, increase the number of depreciating, unwanted, dollars, and magnify our trade deficits (5.815 trillion dollar deficit since 1985) . In the long run, there will be fewer dollars to recycle globally (fewer imports), higher interest rates, and higher prices, unavoidably, a vicious cycle.

International events exacerbate our dilemma. The development and growth of the unregulated prudential reserve foreign-dollar banking system (formally referred to as euro-dollar, yen-dollar, yuan-dollar, petro-dollar, or foreign-dollar denominated claims, etc.), has resulted in a superfluous addition to the world's dollar glut.

What the historical record demonstrates is that all prudential reserve banking systems, and all currency peg efforts, have heretofore "come a cropper". Note: One-third of our countries 2006 deficit, over $232.5 billion, consists of the U.S. bilateral trade deficit with China. China achieved this with the piracy of intellectual property, theft of advanced technology, capital controls, stringent protectionism and currency pegs.

What our Country requires, is no less than an end to the chronic liquidity deficits in our balance of payments, and a halt to the excessive creation of foreign-credit dollars. But this is all too much to ask for, and we can expect more of the same, only worse. It is inevitable that at some point, there will be a flight from the U.S. dollar, and therefore, the foreign-dollar. This will generate hyperinflation in terms of foreign and domestic dollar denominate assets, something that no consortium of central bankers will be able to stop.

1) Until July 2005, China's currency had been fixed at an exchange rate of -- 8.27 yuan per dollar(since 1994). As of Jan 2007, the currency rose 6.2% since the currency peg ended July 2005 (to 7.7565 per dollar). Real GDP has averaged 9.6 percent in the past five years. With an export driven economy, China's foreign-exchange reserves rose to $1 trillion. Shanghai and Shenzhen stock exchanges rose over 300% in 2006 to 35x earnings, and a $1.01 trillion valuation. China posts low government deficits, c. -1.4 percent in 2004. It averages under a 2% inflation. Long term interest rates (5 years) were 6.84% in Aug. 2006.

2) In contradistinction, there was a lot of hoopla over Clinton administration running federal budget surpluses from 1998 to 2001 (4,015 billion dollars). While the U.S. economy was smoking (real GDP over 4% 1997- 2000) the foreign exchange value of the dollar rose 25%. At the same time (1997-2001) the current account deficit accelerated by 1.458 trillion dollars. The CPI rose 10 percent during this period.

=What's to be learned? In the short run, the most important factor determining the foreign exchange value of the dollar seems to be a rapidly growing economy and interest rate differentials (albeit absent floating exchange rates for our trading partners). However, in the long run, a strong U.S. economy and high trade deficits don't correspond with dollar strength. Dollar strength corresponds to competitive production and pricing. A collapse of the dollar? Not as long as we have trading partners that are export dependent for full employment.

http://streettracksgoldshares.com/us/value/gb_value_usa.php#2The ants go marching one by one�

09 Feb 2007 461.58
12 Feb 2007 466.20
13 Feb 2007 467.74
14 Feb 2007 467.74

http://www.crbtrader.com/data/default.asp?page=defaultshows Buck and eBond both red and by my reckoning, $PoG should be a good bit higher.
Silver is building nicely into firstly, the 22nd (OpEx) then the delivery roll-over.
C'arn the Dogs!

$$$$$$$$$$$$$$ A "PRICE of GOLD" (POG) GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the April COMEX Contract (GCJ07) on the last day of this month. Wednesday, February 28, 2007, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, February 24th, AND ALL ENTRIES must answer "THE QUESTION" !!

Based on numerous prognostications from both recognized metals industrial companies executives, financial "experts", taxi drivers, and "idiots" � that the price of gold this year will be somewhere between $500 and $2,000, the QUESTION is:

What do you think the price of gold (POG) will be this year, AND, in thirty words or more, Why????

This POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a rather rare collectors piece, a Danish 20 Kroner goldpiece, having the likeness of King Christian IX on the obverse, but commonly known as a "Mermaid" for the content of the reverse side of the coin !

The "Mermaid" 20 Kronor goldpiece had a total mintage of only 1.5 million, as compared to the nearly 110 million mintage of its period cousin, the English Queen Victoria sovereigns. It gets its name from the blend of a stoic Lady Liberty, enthroned with what I think is a porpoise or dolphin, swimming at her feet. Christian IX, pictured on the obverse of the coin, was known as the 'father-in-law' of Europe because two of his daughters and one son married into the royal lines of England, Russia and Greece respectively, and his grandson became the King of Norway. This coin is exceedingly popular with the people of Denmark in that the "Mermaid" is the national symbol of the country. These beautiful gold pieces were minted between the years of 1873 and 1900, have a Fineness of 0.900, and Actual Gold Content of 0.2592 troy ounce. This prize coin was minted in the first year of production, 1873 !


There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure Silver U.S. Eagle.



====
THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) April 2007 Gold Contract (GCJ07) on the date of Wednesday, February 28, 2007.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $666.6)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $666.6 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on Saturday, February 24, 2007.

6) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication) --- In order for your entry to be valid, entries will need to have a full answer to the QUESTION, in 30 words, OR MORE. <===== NOTE !!!
---
LET the CONTEST begin !
<;-)

http://www.usagold.com/gold/coins/den20mermaid.html

The main driver for the American market will be the acceleration of outsourcing high wage work that will cause the more inquisitive among the newly "liberated" to seek answers. They'll be drawn, bit by bit to understand this iron law; the world will configure all facets of their respective economies to undercut the tradable goods and services produced by the issuer of the world's reserve fiat currency. Currency controls, tariffs and quotas are Band-Aids that will ONLY temporarily slow the bleeding. Globalization is indeed unstoppable, and to the surprise of many that will mean the globalization of central bank reserve assets, with gold becoming the common denominator.

Count your blessings you newly liberated. You are given reason to understand the workings of a dying dollar system while the metal of kings is still affordable.

POG HIGH>>> $860
POG END OF YEAR>>> $860

In connection with the contest we have acquired a small grouping of Scandinavian gold coins -- Denmark and Sweden -- which we are making available to our clientele. These are some of the best performing items in the pre-1933 gold coin arena and very difficult to obtain. We know there is a rather large group among our clientele interested in the Scandinavian coins, and this post is the first notice of their availability.

We ask interested clients to contact their representative with the firm.

1-800-869-5115

George Cooper -- Extension #102
Jonathan Kosares -- Extension #110

And myself -- Extension #101 (My clients can talk with Marie Ballard at #106 if I'm not in.)

************* A CALL TO CONTEST!! Bring your best price guessing skills!!! And tell us all what you think gold is going to do in 2007!!!**************

Gold's off to a good start for 2007 and this is our first contest of the year. It should be a good one. Those of you with an artistic bent will note the beauty of the Denmark 20 kroner "Mermaid" contest prize, but note also the outstanding photographic representation by our sitemaster, Randy Strauss. What a treat for the gold coin connoiseur! And as always, many thanks to our goodly wizard, Gandalf the White, for conducting the contest. Good luck to all.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070215/AUTO01/702150405What is the driver of your local economy? How will it be affected by the necessity to live within our means once the dollar is dethroned and THINGS must be created again?

Questions worth pondering. Prepare for the answer.

As prognosticating idiot, in manipulative matters such as in an idiosyncratic and politically hopeless incorrect financial commodity, I don't buck the trend until it bucks. The ruler predicts my choice, although inflationary common sense would add another full digit and then some.
Lebieque

I wanted to emphasize something Gandalf pointed out in our telephone conversation today. . . .

Contestants should note that we are using the April Comex price, not the spot price, for this contest. We do that because April is where most of the action in gold pricing is taking place at the moment. Therefore, you must add the contract mark-up to your guess. At yesterday's close there was a $4.60 differential between Feb and April and that will narrow somewhat between now and the 28th.

We're into Stage Two of zee Bull and I'd like to think "sometime" this year we should see $PoG hit a high of 1400, then perhaps retrace back to 1100ish.

I want to Thank those at USAGOLD for having another contest. To Gandalf the White, thanks for your time and effort, Keeping The Rules of the contest.

To all Contestants.

This may be the last contest with POG and POS marching higher. Maybe the Newbies and Lurkers will join in with their 2 cents and get a lot more back.
Good Luck to All.
Slingshot-----------<>

Dollar falls to 6-week lows on capital flows data - AFX Mixed start for stocks - CNN/Money
Treasurys higher after a largely weak data batch - CBS Marketwatch - Feb 15
U.S. January Industrial Output Falls 0.5 Percent, Most in More Than a Year - Bloomberg - Feb 15
Capital flowing out of U.S. - CBS Marketwatch - Feb 15
Jobless claims jump 44,000 to 357,000 - CBS Marketwatch What's up with the slow growth in workers' pay? - USAToday Bernanke Pitches Slower Inflation Without Harm to Employment - Bloomberg - Feb 15
Bernanke Says Nothing New, the Markets Love It - Feb 15
Bernanke Says Fed Unlikely to Alter Rates - Wash. Post
Dark side of the housing boom: Shoddy work - CNN/Money Mortgage Hot Potatoes - WSJ Feb 15
India bans wheat exports on inflation worries - FT
Pension funds switch to derivatives - FT - Feb 15
Convertible arbitrage resurfaces - FT - Feb 15
Foreclosures rip neighborhoods - Rocky Mtn News - Feb 15
Chrysler to cut 13,000 jobs under restructuring plan - IHT Nokia Cutting Jobs - Feb 15
Hershey to cut 1,500 jobs as part of shakeup - CNET.com
Slower Growth In Earnings Is Already Here - WSJ Feb 15
China May Get More Daring With Its $1.07 Trillion Stash - WSJ Feb 15
Rate rise likely as eurozone growth surges - FT Feb 15
Japan's Economy Grows 4.8%, Fastest in Almost 3 Years - Bloomberg Feb 15
U.K. January Retail Sales Decline the Most Since 2003 - Bloomberg Feb 15
ECB Says `Vigilance� Required, Signals Rate Increase - Bloomberg Feb 15
Germany Battling Rising Tide of Corporate Corruption - NY Times Feb 15

I wish to thank all that make this TableRound such an important beacon of "LIGHT" in this era of challenges.

Thanks to Sir Mikal for the following --

mikal (2/15/07; 08:43:00MT - usagold.com msg#: 152179)
Headlines update

"Jobless claims jump 44,000 to 357,000 - CBS Marketwatch"

Does not the above item make anyone a bit worried ?
Plan for YOUR future ---- GOLD !!!!
<;-)

"THERE" is the sound of the Royal Trumpeters again !! <;-)

$$$$$$$$$$$$$$ THE FEBRUARY 2007 "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$


OFFICIAL ENTRY LISTING

Entries as of DAY #1 (2/15/07) at just about 10:01 Denver time !!!

Listed in order of decreasing values !
----

$$$$ $724.6 $$$$ Topaz (2/15/07; 04:55:38MT - usagold.com msg#: 152177)

$$$$ $687.8 $$$$ Lebieque (2/15/07; 03:55:18MT - usagold.com msg#: 152174)

$$$$ $685.0 $$$$ Toolie (2/15/07; 03:10:40MT - usagold.com msg#: 152170)

===
<;-)

There have been only three prior instances in the history of POG that it eclipsed $660 for more than a day. These include:

Mid January 1980: On 1/14/80 POG hits $660. Five trading days later it reaches the current record of $850. Five trading days after that it was back at $624.

Early February 1980: On 1/29/80 POG again passes by $660 to close at $674.25. Nine trading days later is reaches $710.50. Six trading days theafter it was back to $652. It would not see $660 for another sixteen years and a few months.

May 2006: On 5/2/06 POG closes at $661. Eight trading days later it hit the high for the year at $725. Five trading days after that it was back at $651.50.

So what?

It feels different this time. It appears that POG is building a base with $660 as the new floor for the time being. There has not been a big spike since we quietly eclipsed $660 at the end of last week - just consitent closes between $660 and $670. I believe that $660 may be the launch pad for POG in 2007.

I may be wrong, I often am. The above are all closing prices for POG and do not reflect intra-day highs, FWIW.

PA

Thanks for the chronicle of $660 gold.

R.

$$$$ $658.00 $$$$

The seasonals used by the FOMC, are an contemporary application of the fallacious "real bills" doctrine - commercial bank accommodation. The post-xmas contraction of reserves (the multiple contraction of money and credit and commercial bank loans and investments), has been and will continue to be, (until the 2nd week of March)destabilizing to world wide markets (exchange rates & commodities). The dollars post-holiday retracement was accomplished without changes to the fed funds "bracket racket" or by foreign exchange intervention. It was the reversal of commercial bank seasonal accommodation. This time of year the FOMC or "indian giver" agressively removes liquidity (holiday reserves). In order for the FOMC to get back on track, they conduct open market operations designed to remove legal reserves. This is accomplished by frequent repo settlements/redemptions or open market sales of government securities. This in turn, almost always, puts pressure on Gold, and bolsters the exchange value of the dollar, during this time of the year.

daily low high
02/14* 5.27 5 6 1/2

02/13 5.26 5 3/16 5 3/8

02/12 5.28 5.19 5

02/09 5.25 5 5 7/16

02/08 5.25 5 5 3/8

02/07 5.23 5 1/8 5 13/32

02/06 5.24 5.18 5 3/8

02/05 5.25 5.13 5 3/8

02/02 5.24 5 1/8 5 7/16

02/01 5.29 5 5 1/2

01/31* 5.33 5 3/16 6 3/4

01/30 5.23 5.18 5 3/4

01/29 5.26 5 5 1/2

01/26 5.26 5 5 3/8

01/25 5.31 5.19 6

01/24 5.27 5.19 5 3/4

01/23 5.26 5.13 6

01/22 5.24 5 1/8 5 7/16

01/19 5.25 5 1/8 6 3/4

01/18 5.23 5 5/32 5 3/8

01/17* 5.25 5 7

01/16 5.28 5 5 3/8

01/15 Holiday - No data.

01/12 5.22 4 5 3/8

01/11 5.27 5.19 5 3/8

* Indicates the last day of a maintenance period (the last minute scrambling for reserves on bank squaring day produces higher than normal fed funds rate (7%, 6 3/4%, 6 1/2%). It also is indicative of draining reserves.

The daily effective federal funds rate is a volume-weighted average of rates on trades arranged by major brokers. The effective rate is calculated by the Federal Reserve Bank of New York using data provided by the brokers and is subject to revision.

No problem Randy. It is also interesting to note that we have now closed five consecutive days between $660 and $670. This has never occured before and lends itself to my theory that a base is being formed at this price range.

In each of the three previous times that gold punched through $660, it then spiked within five to six trading days to $850, $709 and $700 respectively for each of the time periods listed below. Not this time.

Given that this most recent eclipsing of $660 does not appear to be part of a 10-20 day spike in POG as the three prior instances were, I cannot help but think that this time may mark the start of a far bigger movement in POG, a turning point in monetary history.

PA

Uh..ohhh...Sir PA, that sounded a bit like: "This time it's different!"

;-)

...but I think you're right...largely because The Dollar is barely the rustle of it's former papery self...

:-)

http://www.usagold.com/gold/price.htmlThe $660-$670 range also happens to correspond to the spot level at which the popular (Western civ.) 1oz bullion items start to cross the $700 price mark.

At the link (currently showing yesterday's closing prices) we can see that half of those six popular 1oz items have surmounted the $700 bar, while the cheaper half are just under that level.

Interesting as this observation of mine is, I would hasten to add that I would almost completely discount it as having contributed anything to the psychological factor observed in the present "stickiness" or "gravity" of the current spot range -- mostly because we are in a market environment in which Eastern civ. physical demand is more important than Western, and they use different standard weights and currencies. Also, and this is key, our market environment is one in which our financial funhouses set the price of gold with paper instruments -- completely taking the physical item out of the equation.

Cheers!

R.

@ Paper Avalanche

The forces of evil manipulate the gold price. That is why it is gravitating to $666.

but bernanke will probably raise rates 1 more time to cool things off. the FOMC just can't go with the flow as they did at x-mas that's what the "real bills" doctrine is all about.

You said, RE: $660, "...I cannot help but think that this time may mark the start of a far bigger movement in POG, a turning point in monetary history."

Normally I don't engage in interim price predictions, nor, therefore, do I ever get emotionally involved in gold's wayward price spikes or dips. You'll never find me acting giddy as a schoolgirl on spikes, nor will I be a crybaby on dips -- unlike _______ [a long list of names omitted].

However, fresh in the spirit of MK's newly-announced price guessing contest, when I read your quote above, I found myself uncharacteristically inspired to 'go public' with my own price-related view of gold's future.

While I'll differ with you regarding where (and why) the turning point in monetary history was significantly marked and made (I can say it was marked in 1999, but for reasons that I'm not allowed to say), I'm in full agreement regarding a bigger movement at being at hand and acknowledge the supreme significance it shall represent in monetary history.

So, with that said, and to relate this to our $660 talking point, looking out into the mid-distance I shall not be surprised when today's price represents merely one-tenth of the future price -- as recently as 2010. That is to say, at the start of the new decade, my expectations are for gold to be moving through $6,000 to $7,000 per ounce. And I'm not going to be emotional about that, either. It's as right as rain.

R.

@ PA,

One might suspect that there is a more concerted effort by the short side traders to ""nip this rise in the bud" more quickly than the previous episodes, as the gold community, while still small, has a bit more financial press attention these days.

Even so, every attempt to knock it down has also brought buyers out of the woodwork just above $660.

If $660-70 is a platform, as you surmise, it cetainly looks like it's building a strong foundation.

If a major launch occurs soon, I would look for pull backs to test this platform.

Just my hypothesis. I might be very wrong!

I agree whole heartedly with your assessment and I like your philosophy regarding the day-to-day swings in the marketplace so as not to be reactionary or too emotional.

I would like to re-phrase the ending to my last post. I think that it would have been better stated a "siginicant change in the behavior of paper gold" as opposed to a "turning point in moetary history." I agree that the events around and since 1999 (WAG, MTM-Euro, liberalization of physical gold trade in Eastern Asia, continual shedding of the dollar holdings by CB's) constitute the long-term turning point in monetary history which, IMO, is the transition from the Bretton-Woods Accord from the mid 1940's to a new system whereby the wealth of a nation held by its central bank is not the paper currency of another nation, but rather physical gold in possession.

PA

Could we get a spell checker with the posting software on the forum? Without fail I miss one to two words with every post.

PA

"but for reasons that I'm not allowed to say" � In order to enjoy one's life savings, one must protect one's life! We all ride this train together, and hopefully, will build upon our knowledge to build a tolerable future built on a tangible foundation.

Did anyone else see Peter Schiff on with Mark Haines this morning? Peter had some insightful things to say, but Haines could not get past his dogmatic Wall Street blather.

Mr. Schiff wanted to make the point that gold's ascent is an indicator of overbought equities and overblown equity indexes. Haines' only apparent reason for having Schiff on was to belittle his point of view.

There was a silver lining: Haines was even less convincing than usual. He absolutey squirmed in his chair while tossing jabs at Schiff. It was well worth the viewing time to realize how really uncomfortable a talking head can become in the face of economic truth that is contrary to their on-air agenda.

Gold: No smoke, no mirrors, just inherent truth. Get you some.

-S

The transition, which appears to be just beginning, from a fiat (predominantly dollar) dominated world, where central banks hold fiat paper as their reserves, to a world where central banks hold gold in increasing quantities, is in effect a world where power is no longer unilateral, but is becoming slowly "multipolar".

Gold in Central Bank vaults is a symbol of distribution of power; a de-centralization of power and distribution of power to national entities.

This is the reason that US/UK/International Banking is fighting gold tooth and nail. They are dead set against a distribution of power as it goes against their objective, which is to dominate the world.

GOLD goes with Freedom and Independenceat all levels, private to public.

SIERRA

@PA

Easily done. Just compose your post in Word (or your editor of choice having spell check) and then copy/paste into the forum message window.

Than yous kan spel joost lycke me :)

- S

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070215:MTFH22918_2007-02-15_20-25-53_N15481756&type=comktNews&rpc=44From Reuters
via Yahoo News
Thursday, February 16, 2007

NEW YORK -- Freeport-McMoRan Copper & Gold Inc.will end Phelps Dodge Corp.'s policy of hedging on copper prices when it acquires the rival miner, Freeport's chief executive said on Thursday.

"We have no intentions to hedge copper," Richard Adkerson told Reuters in an interview.

Freeport-McMoRan expects its $25.9 billion acquisition of Phelps Dodge to be completed in March.

Phoenix-based Phelps' financial results have been hurt in recent quarters because the company locked in portions of its 2006 and 2007 copper production at prices below market prices, which have soared six-fold in the last three years.

Asked if the new combined company would continue such "copper collars" to hedge against sharp turns in the metal's price, Adkerson said: "You should not expect the new Freeport to sell copper forward or sell options or take steps to limit the upside of copper."

The company would honor Phelps' existing contracts through the end of 2007, but after that, no prices would be locked in, he said, noting that Freeport did not hedge.

"That has not been our approach, our philosophy, and I don't expect that to change. It's not a requirement of our financing.

"My personal view is that different companies can be in a position where they have a need to use derivatives to support their business," Adkerson said.

"But I believe our investors want us to drive their exposure to the copper. If investors want to hedge that exposure, they can do that on their own."

His comments came as U.S. copper futures closed at their highest level since early January amid speculative buying sparked by Chinese import data that signaled a possible demand recovery in the world's leading metals consumer.

Copper for March delivery ended 8.70 cents firmer at $2.6640 per pound on the New York Mercantile Exchange's COMEX division, its priciest close since Jan. 10.

You wrote: "[After Early February 1980 when POG passed $660]...it would not see $660 for another SIXTEEN years and a few months."

Wait a minute, Paper, it was not sixteen years, it was TWENTY SIX l-o-n-g, l-o-n-g years before it hit $660 again!

Talk about patience! Twenty six years passed...and from a young man of 48 I became an old man of 74! And an unrepentant goldbug all those years.

"Good things come to those who wait" - but, it's been an awfully long wait. I am still waiting, and shall continue to wait.

SIERRA

It's a toss up as to which I am worse at, spelling or math. Even after six years of doing so, I still get excited when posting to this astute forum and often miss things. : )

Thanks for the heads up on the spell check short cut.

PA

Re: msg#152195 - Mark Haines hosts Peter Schiff
Thanks for the anecdote. Mark Haines will now be on record as having 'gone through the motions', his assent(ordeal)
to the legitimacy of gold.

Since 1970, the "western" world has functioned within a system of essentially free exchanges. Some effort has been made, notably in the European community, to use various administrative devices to stabilize rate fluctuations within the community. These, and other efforts, have had limited success. Exchange rates seem to fluctuate capriciously and by their magnitude have had serious and debilitating effects on trade and commerce. What can be done? The choice obviously is not between the present fluctuating rates and the stable rates of a free gold standard. The latter is simply not attainable. Rather the choice is between: 1) A modified gold bullion standard involving periodic changes in adjustable rates, supplemented by occasional exchange controls necessary to the adjustments to new parities; and 2) the present unstable system, the consequence of the free-wheeling speculation that prevails in the foreign exchange markets.

The Friedman "school" espouses the present unregulated system on the assumption that freely fluctuating rates are less destabilizing than the pegged, but adjustable rates. (Milton has always been loath to grant central bankers much discretion in formulating and executing monetary policy.).

Before 1970, exchange rates were in terms of a "fixed target". Now the dollar is a "moving target". I think there is a middle way. It would involve a slight change of the previous modified gold bullion standards. All monetary gold would be held in bullion form in the vaults of the IMF and central banks. All transfers of gold would be made among these institutions. No gold would be made available to the private sector by participating banks. The private sector would acquire gold for necessary purposes under restrictions similar to those imposed on U.S. nationals after January, 1934.

The international monetary reserves of the "western" world would therefore consist of IMF SDR's and gold bullion held by the IMF and the member central banks. This would be a reserve that could not decrease, but could increase. The IMF would act more in the capacity of a central bank of central banks, and would act on all major matters with the advice and consent of the member central banks.
This system would not produce stable exchange rates, but we could reasonably expect less destabilizing rates.

Thanks for the spell check solution.

PA

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

February 15 (DowJones) -- Gold finished with little change Thursday in markets that ran into profit-taking after a recent rally but also attracted buying on pullbacks, traders and analysts said.

April gold futures dipped 60 cents to $671.40 on the Comex division of the New York Mercantile Exchange. On Wednesday, gold at both exchanges [+CBOT] hit its highest levels since August.

"They have had a nice uptrend," said Patrick Lafferty, Commodity Trading Advisor with Fox Investments, a division of Man Financial. "The rally is being met with profit-taking." However, he continued, the uptrend remains in tact on the charts.

"There is still a lot of buying any time you pull back to minor support," he continued. "It still looks positive."

A floor trader blamed the metals' inability to keep rising to a decline in crude oil. March crude at one point was as soft as $56.62 a barrel, a loss of $1.38 at the time and its weakest level since Jan. 31.

"Copper made a strong move up and was up a little over 10 cents at one point," the floor trader said. "The gold and silver would have followed, but the oil was down today. That has held us back from really rallying strongly."

Overall, however, the floor trader characterized the technical picture as remaining constructive for gold and silver. In recent weeks, they have been tending to make a low for the week on Mondays and then rise for the rest of the week. "To me, that sounds very bullish," he said.

Initial resistance for April gold is around the $680 area, said Lafferty. "Then there is a big psychological target at $700 that the bulls are eying," he continued. "If pressure on the dollar remains negative, like it has the last few days, then there should be no problem with gold testing that $700 level again.

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

MZM has been growing at a 24% annual rate of change in Q4-2006 (not seasonally mal-adjusted).

The fallacious seasonal adjustments are every bit as inflationary as the application of the fallacious real bills doctrine. You can't back out of an expansion of credit and money without a concomitant rise in prices.

http://www.canada.com/theprovince/news/money/story.html?id=a3062b1e-1695-4274-b019-66fddafdf252Thursday, February 15, 2007 -- A deluge of paper money will float the price of gold to $800 US this year and spike it even higher down the road, Goldcorp chairman Ian Telfer says.

Gold's investment magnetism is strengthening as governments around the world scramble to print money, Telfer told a Vancouver Board of Trade luncheon yesterday.

"We're awash in liquidity and gold, in our view, is going to start to look more and more to people as a store of value and more and more like a currency," Telfer said.

"And it's the only one they can't print."

...for the first time, production from gold mines has flattened out and is starting to fall, he said.

That decline is under way even as the growing middle class of China and India is stoking demand, he said.

"It has a different role in their lives than it does in ours," Telfer said. "It's a store of value. It's almost a currency.

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

Good for getting the beginners up to speed...

R.

http://www.ft.com/cms/s/6ff2a310-bceb-11db-90ae-0000779e2340.html
Snip

Gold sales hit record $65.3bn
ByChris Flood

Published: February 15 2007 13:30 | Last updated: February 15 2007 21:58

Gold sales jumped 22.4 per cent to a record $65.3bn last year in spite of a 10 per cent fall in demand in tonnage terms, according to the World Gold Council, which released its fourth-quarter report on the market on Thursday.

Rapid growth in the popularity of gold exchange traded funds means that ETFs have become the main driver of investment demand growth.

End Snip

http://www.bloomberg.com/apps/news?pid=20601103&sid=am1HUmiECR1I&refer=newsHuh? Why would bad weather spike job claims? What, it gets cold and the boss gets cranky and cans everybody?

Or, are we finally starting to see the impact of layoffs due in the housing, construction, and auto industries.

@PA,

Doesn't your browser offer a spell checker? My typing (it's a stretch to call it that) is so bad, my posts look encrypted without first checking them.

-G'lox

Oil and other commodities have been bouncing around and I do find it interesting how gold is holding its own and is quite stable. I do know that demand for oil will surge again...when? Hmmm maybe after the next us presidential elections?


"A floor trader blamed the metals' inability to keep rising to a decline in crude oil. March crude at one point was as soft as $56.62 a barrel, a loss of $1.38 at the time and its weakest level since Jan. 31"

The above quote was taken from the from page of this website....

Soft now, but not for long....when is dose increase again one should be prepared with gold in hand.

My goodness, Randy, what could you know that you would not be ALLOWED to say on this forum? Curriosity is killing me here. Is your information something that came from Another or FOA, Hummmmmmm?

Something tells me that the $660-$670 POG range of the past five trading days will be heavily assaulted on Friday. I think that someone may try to give POG the "gold finger."

GF postings and smackdowns seem to follow one another rather closely.

While I'm at it, I will further divine that here will be a $5 smackdown before the US open at 8:30 EST followed by another $5-$7 waterfall sell off around 11:00 EST.

I may be wrong. Recent history suggests that the above scenario is the likely outcome.

I would love nothing more than for POG to close at or above $672 tomorrow. If so, IMO, it is a completely new game and the days of temporary 10-20 day spikes through $700 are being replaced with a permanently increasing POG.

We will know in about 15 hours.

PA

The world is in its precarious condition thanks to so many very, very brainy, and oh-so-bright world-improvers who have been able to reach the corridors of power and have imposed their various types of remedies to "improve" the world, upon the suffering masses of people who just had to "put up and shut up".

The only thing left, practically speaking, for the suffering masses to protect themselves from the world-improvers is � gold and silver.

It's really so simple. Paper money is a fraud. The Brightest and Best, trained in the most prestigious universities of the world, write thousands of theses and thousands of books and studies every year, welcoming the pecuniary handouts and advantages offered by the paper-pushing banking systems and the Central Banks of the world, who prostitute the Brightest and the Best so that they will go-along and cover up the enormous fraud.

Nature cannot be defrauded. You either get your 70 grams of protein a day, or you die. You either drink the necessary water, or you die even sooner. You can't eat paper bread. (You can't eat gold, either, but of course, if you have it, you stand at the head of the breadline.)

Flow5, this Forum is a refuge for the otherwise voiceless masses, or that part of the voiceless masses which is still thinking about survival. We are not here to listen to more nostrums from one of the Brightest and Best. We are here because we know that Nature will assert herself sooner or later, and � our survival will be at stake.

Let's keep it simple. Expert world-improvers with numbers, charts, graphs, statistics and everything but common sense have just about turned our world upside down and inside out. The macroeconomists have destroyed sanity in our world. Paper money is unworkable and there is no way to fix it; so come down to our level, and dispense some practical wisdom, please!

SIERRA

It is not a bother to skip over that which is not understood, but to cut off the avenue of communication before it's hit a point, could prove to be disappointing to all. I would have to agree that this new poster has an intellectual �air� about him/her that stands out amongst the crowd (well, except for TownCrier). It may be that we all have to learn how to communicate with our new poster rather than the new poster learning to communicate with us. But, at the same time, if no one can pick up on the subtleties to help bridge the gap, the wisdom may be lost to us.

Flow5, bear with us. If there is a point and we will find it. If it's just a matter of learning, it just may take a little time and helpful guidance.

Meanwhile, we buy gold. Do you?

@PA,

I tend to agree with you, with a couple of observations to support the hypothesis.

1) It certainly seems that Fridays have become the most consistent battle day for the short crowd, even though the long weekend offers more opportunities for geopolitical upset than my gastro-intestinals would care to ride on the short side.

2) Pondering the long-term gold chart today, I noticed how closely Jan and Feb resemble last year at the same time, a prelude to an almost uninterrupted 180 point rise.

That being said, I am still encouraged by the pattern of higher highs and higher lows we are currently experiencing, as none of the short attacks has amounted to much more than a $10 pullback since early January.

No doubt we are climbing the "wall of worry" associated with 60 unanswered points in barely five weeks, but they have also not been without resistance.

Tomorrow could be a very important psychological day in the gold pit. The question is not "Will they attack", but more likely, "Will the bulls take profits and capitulate to the shorts, or continue to buy up their wagers"?

$660 seems to have put in a strong foundation so far, and its ability to hold up tomorrow may offer some hints about the "readiness" for a next leg up.

I am not an expert, so these are but "gut reactions", based on what I have been seeing, hearing, and reading lately. The price compression created by a battle between $660 and $670 may very well be setting up a return of the conditions that brought us the April and May frenzy in '06.

Dear Friends of GOLD,

REF:Paper Avalanche (2/15/07; 21:53:54MT - usagold.com msg#: 152212)


Is there a difference between Genius and Brilliance?

Who has more smarts the self made or the Ivy League trained? Is there something to be worried about in a typo or a misspelled word to have to go back and apologize for it?

Can anyone just move on and figure things out?

There are many animals in nature who can navigate with their so called "sixth" instinct. The ability to know when to run or hide or move with the wind.

I wonder if us humans can be so instinctive like the animals who live with us on the planet. Do you remember when the tsunami hit? Did you hear how the animals ran for the hills? Even the "rats" knew when to reach for higher grounds.

If I am good at predicting a so called "smack Down" like Sir Paper Avalanche stupendously points out, I would then suggest that when others decide to either "SELL" or take profits, it would then seem clear to me, like that sixth instinct an animal has to run in an take advantage.

POINT: When gold drops, however brief, BUY!

SO dose this make me anti-GOLD Sirs?

Getting rich fast with gold? Hmmmm maybe not....guarantee safety and progressively increasing in value? A sure thing!

Have a GOLDEN weekend~

GF

$$$$$$$$$$$$$$ A "PRICE of GOLD" (POG) GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the April COMEX Contract (GCJ07) on the last day of this month. Wednesday, February 28, 2007, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, February 24th, AND ALL ENTRIES must answer "THE QUESTION" !!

Based on numerous prognostications from both recognized metals industrial companies executives, financial "experts", taxi drivers, and "politicians" � that the price of gold this year will be somewhere between $500 and $2,000, the QUESTION is:

What do you think the price of gold (POG) will be this year, AND, in thirty words or more, Why????

This POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a rather rare collectors piece, a Danish 20 Kroner goldpiece, having the likeness of King Christian IX on the obverse, but commonly known as a "Mermaid" for the content of the reverse side of the coin !

The "Mermaid" 20 Kronor goldpiece had a total mintage of only 1.5 million, as compared to the nearly 110 million mintage of its period cousin, the English Queen Victoria sovereigns. It gets its name from the blend of a stoic Lady Liberty, enthroned with what I think is a porpoise or dolphin, swimming at her feet. Christian IX, pictured on the obverse of the coin, was known as the 'father-in-law' of Europe because two of his daughters and one son married into the royal lines of England, Russia and Greece respectively, and his grandson became the King of Norway. This coin is exceedingly popular with the people of Denmark in that the "Mermaid" is the national symbol of the country. These beautiful gold pieces were minted between the years of 1873 and 1900, have a Fineness of 0.900, and Actual Gold Content of 0.2592 troy ounce. This prize coin was minted in the first year of production, 1873 !


There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure Silver U.S. Eagle.



====
THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) April 2007 Gold Contract (GCJ07) on the date of Wednesday, February 28, 2007.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $666.6)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $666.6 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on Saturday, February 24, 2007.

6) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication) --- In order for your entry to be valid, entries will need to have a full answer to the QUESTION, in 30 words, OR MORE. <===== NOTE !!!
---
LET the CONTEST continue !!
<;-)

http://www.usagold.com/gold/coins/den20mermaid.html

I must have it...either I will win it or I will buy it!!

P.S.

Since I am Danish it makes "cents"

Gandalf's composite question:

"Based on numerous prognostications from both recognized metals industrial companies executives, financial "experts", taxi drivers, and "politicians" � that the price of gold this year will be somewhere between $500 and $2,000, the QUESTION is:

What do you think the price of gold (POG) will be this year, AND, in thirty words or more, Why????"

.................................................
c c
c c

c c
c c


Clipperty, clipperty, clipperty, clop, clop, clop...

"Whoa Rocinante! Oh noble beast! What's all this then? A castle offering a gold-guessing game? Real gold prizes too? Just think, oh wonderous steed, with that gold we could have you in a set of new shoes in a flash...and buy a curry-comb for Squire Sancho to groom your hide until it shines like the hair of Dulcinea del Tebosa... And Don Sundeck could restock his alforjas with the best victuals...and the best wine for his bota..."

[Dreams a little longer]

"Ahh...but first there is work to be done in 30 words or more..."

"Mmmmmm....let me see..."

"Well, Spot presently sits..."

"No, No, NO Sancho...NOT on the tuckerbox five miles from Gundagai!"

".... around $670, so that's a good start. But there are ten and a half months to go! Oh me, oh my, so much uncertainty! Where are my derivative pills Sancho? Ahh yes, I feel better now...and the wine is a reassuring counterparty."

"Mmmm...if the upslope on the ten-year chart is maintained, then gold should sit around $740 come the New Year. But suppose bold Rocinante is startled upward by some unforseen event...perhaps a flying Chinese Golden Pig trailing a cloud of dollar bills; or a Biblical Burning Bush sputtering and stuttering 'Dubya down and the Devil take all!'...or some even scarier apparition (although, in truth Dear Sancho, it is hard to imagine such a one). But if such were to happen, the muscles in bold Rocinante's thighs might well propel the golden steed much higher in a momentary leap...perhaps to $800 or more, before he regains his composure and settles again to his normal stride. Ahhh, yes! So $800 is perhaps not too high..."

"But on the other hand, Loyal Sancho, even Rocinante may tire from Don Sundeck's ceasless commands and seek to slumber for a while in a low-lying and windless glade, dreaming of conquests-past while girding his loins still more for the future climb. Ahh yes, so perhaps $640, say, may still be revisited (although methinks it is improbable)."

"So there you have it, Sancho. I feel we have complied with all the demands set out by the castle wizzard...what is his name? Ahhh yes, Gandalf the Inquisitor? Ooops...no, no...Gandalf the White. (Sorry, oh Noble Wizzard.) Let us post our entry in the castle mailbox and repair to yonder wood to await the great sounding of the trumpets that will announce the winner..."

Clipperty, clipperty, clipperty...

;-)

i was a commodity broker when i got out of school during 79 - 83. i've never lost in money in treasury bond nor gold futures. i've not been very good with oil and have been bad with currencies. i know a few things milton friedman doesn't know.

One's opinion depends on the degree of ignorance or collection of prejudice the advocate is laboring under.

1) Friedman couldn't define/kept changing the definition of the "money" supply -- to target. Money is the measure of liquidity, the "yardstick" by which the liquidity of all other assets is measured.
1) the "monetary base/high powered money" [sic] is not a base for the expansion of the money supply.
2) the "multiplier" is derived from "money" divided by member commercial bank free legal reserves, not the monetary base.
3) aggregate demand is measured by monetary flows (MVt), i.e., income velocity is a contrived figure (WSJ, Sept. 1, 1983)
4) the rates of change used by the Fed are specious (always at an annualized rate having no nexus with economic lags; Friedman pontificates variable lags; economic lags are unvarying)

A. Friedman didn't know the difference between the supply of money and the supply of loan funds.
B. didn't know the difference between means-of-payment money and liquid assets.
C. didn't know the difference between financial intermediaries and money creating institutions.
D. didn't recognize aggregate monetary demand is measured by the monetary flows (MVt) not nominal GDP.
And the technicians at the Fed:
E. don't recognize that interest rates are the price of loan-funds, not the price of money
F. don't recognize that the price of money is represented by the price (CPI) level.
G. don't realize that inflation is the most important factor determining interest rates, operating as it does through both the demand for and the supply of loan-funds.

holding one's wet finger in the air to tell the wind's direction? trading is boring. there is no anxiety. you don't have to check COMEX prices, read the WSJ, or call your broker. But you do have to know the gospel - to keep out of trouble.

my friend used to tell me "go easy, easy". but i don't have any sense of ettiquette. I got kicked out of the 5th grade (in 65, prior to the escalation of the Viet Nam war) for dying my hair green (the principal had told me to cut my hair; I was the first). last year i saw this guy stomping his boot on someone's head - who was on the ground. I thought he was going to kill him. I took a few blows inorder to stop it. then i learned that i was wrong, because the guy on the ground had cut a piece of flesh out of his attacker's head.

When I was a kid, Dr. Dodge told me that everybody, no matter who they were (even the janitor), has something important to say. Listening is an art. And I am the gate keeper.

http://www.MarketWatch.comSource: MarketWatch / Friday, February 16, 2007
U.S. consumer sentiment declines more than predicted in January

U.S. stocks open lower after mixed data

U.S. consumer sentiment declines more than predicted in January

U.S. housing starts plunge 14.3% to lowest rate in 10 years

PPI falls 0.6% in January, core rate rises 0.2%

Corn-based ethanol's a flawed concept

flow5--for what it's worth, I've heard that 90% of currency traders (futures I imagine) lose their shirts. I'd be curious to hear if others know this is the case. And yet, there always these ads on TV and on the internet about making huge profits with futures trading systems. For the sophisticated suckers...there's no such thing as a free lunch!

"Listening is an art" as is speaking. Learning can happen during the exchange, but it is not guaranteed. I have observed that there is a subtle substance, or key understanding, that seems to only live between the words and if both people cannot align their thoughts, the idea behind the communication is not conveyed. Another way of looking at it is that it's not always the words that are used, but how they are used that conveys the bulk of the meaning. Unfortunately, if you can't figure out the way in which they are said, the real beauty behind the art is not heard.

In an effort to discover the intent behind your words, I must ask, what gate do you keep and how? When you dyed your hair, did you use an Acqua regia solution? When you contemplate Monetary flows does it enhance your gold understanding or is it the other way around?

In the end, time will play out a solution one way or the other. Hopefully, a subtly golden substance will elevate out of your words in such a way to enhance the lives of those in this great forum.

I'm looking to clarify your "I'm not going to be emotional about that" post from yesterday. In the face of a hyperinflationary situation, a 10x price increase could come within a (�)x purchasing power situation. For some reason, I do not get the feeling that your comments were built on this scenario, thus I ask. When you wrote �price� in your posting did you mean to say �purchasing power�? I would have written purchasing power.

I am more than happy to be wrong (yet again) about my prediction last night. If we close above $660 again in an hour and half we will continue in uncharted waters.

PA

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=Without the option of choosing a scale it's a bit difficult to properly ID the situation as it stands but blind Freddy can see the spread increasing as we watch.
Rest assured, Stage Two of the Gold Bull is alive and kicking. Week 2-3 delivery month action in gold completely consistent and ..given a short month, augurs really well going forward.
Next week will see Silver take up the cudgels and should throw a buoyancy vest around PoG ...Ag is a far more "honest" read and will not disappoint ...ALL MONTH!

Most of the AltPog's have fallen back to support here with perhaps the LooniePoG giving back more than it should've. To be expected however as it ($CAN) really looked pathetic these past few weeks.
Yen otoh has taken the bad-mouthing from Essen to heart and punched it's way out of the wet paperGold bag. Tough hombre-san!
GBP suffering the familiar Saturday nite bravado - shame all next week syndrome.
Bottom line, they're all ready to roll over to the upside again next week ...IMHO.

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

The background is that many of my Chinese friends exchange gifts (gifting is very important in Chinese culture) and in my circle, Godiva chocolates were/are favored. So when I read that Hershey, the famous Pennsylvania chocolate maker is laying off 1,500 workers, I begin to wonder if life is losing some of its sweetness. Maybe there's more impact from the corn-for-ethanol than just rising high fructose corn syrup prices than I thought.

-Goldilox

OK, already. This bonepile thang is getting serious.

so when you say that you are the gatekeeper, do you mean that you are the one who determines what types of information/knowledge are admissable to your brain for analyzing against your current framework of reality?

@ PA,

I don't know that you were wrong in your prediction. It just looks like there are enough buyers at $663 to hold them off. That's probably god news for gold moving forward.

(:^) Goldilox

I see by your outfit that you may be an Aussie...does your Mabel wait for ye...and a winedot...does the pub have no Beer!?!
:-)

Seriously...I loved your "stream of consciousness" post. Way to Go for the GOLD! my entry to follow

http://www.streettracksgoldshares.com/us/value/gb_value_usa.phpLooks like someone got a golden valentines� present.
13 Feb 2007 467.74
14 Feb 2007 467.74
15 Feb 2007 475.76

As encouraged as I am that the battle for physical is driving the price higher lately, the spigots of the global dollar flow are being cranked ever wider lately and such easy flow will be brought to bear against the futures contract for gold in the near term. Unless a real source of the shiny becomes apparent and attainable on the so called market exchanges, the futures price (as opposed to the POG)will continue to diverge until it matches the value of the contracts for delivery. No real gold available for delivery means a falling exchange based price. What I have posted in the subject line is my guess at the comex April Gold futures contract closing price on Feb 28, 2007 and NOT the POG. My guess for the POG in this year? I believe it is already demonstrated to be unavailable in size and therefore priceless. That which is obtainable from govts as bullion coin products will continue as long as possible to reflect the exchange futures delivery price...until it runs out. Then that which is obtainable from private sources will set the price. If that happens this year, the POG will be in the range of $1040/troy content. (It is a guess purely influenced by my current endeavor of reconciling with TPTB at the level of their cut for my activities in the previous year.