http://www.bloomberg.com/apps/news?pid=20601012&sid=aZls5D8KycJg&refer=commoditiesMarch 1 (Bloomberg) -- Gold rose in Asia for the fourth day in five as the prospect of United Nations sanctions against Iran spurred demand from investors buying bullion as a haven.


Tensions surrounding Iran's nuclear program have heightened this week with the U.S., the U.K., Russia, China, France and Germany set to discuss by telephone later today elements of a new UN resolution against Iran...

"Fundamentally, nothing much has changed for gold, the geopolitical tensions remain, if anything it is a safe haven," said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. "I think the expectations are it will head towards the highs of yesterday, around the $679 level again."

Gold for immediate delivery rose as much as $8.20, or 1.2 percent, to $677.55 an ounce and traded at 676.96 at 12:11 p.m. Sydney time, extending the metal's 0.9 percent gain late yesterday in New York.

^___(from url)___^

It's almost comical -- that the very same 24-hr gold market can look so completely positive when viewed from the Oriental timeframe as compared to the gloomier paintjob in the Occident.

R.

http://usmarket.seekingalpha.com/article/28360(Mar 1st, 2007) Tim Iacono submits: The title of this post is not something you're likely to hear from the U.S. Postal Regulatory Commission as their rationale ... but that's the reality.

A new "forever" stamp -- good for mailing a letter no matter how much rates rise -- was recommended Monday by the independent Postal Regulatory Commission. The panel also called for a 2-cent increase in first-class rates to 41 cents...

"Adoption of this proposal is good for the Postal Service, postal customers and our postal system," commission chairman Dan G. Blair said at a briefing.
A forever stamp would not carry a denomination, but would sell for whatever the first-class rate was at the time.

For example, if the 41-cent rate takes effect, forever stamps would sell for 41 cents. If rates later climbed to 45 cents or more, the price of the forever stamp would also go up at the counter or machine, but those purchased before the change would still be valid to mail a letter.

If the forever stamp ever sees the light of day, get ready for a real, unambiguous indicator of "inflation expectations" from the American public.

The various data collectors who calculate inflation expectations may be able to stop asking people whether they think consumer prices will rise 3.2 percent or 4.1 percent or 2.6 percent in the year ahead and just watch the Postal Service printing presses as they struggle to keep up with demand for the new stamp where mailers can lock in current postal rates -- forever.

It seems that postal rates are rising much more rapidly than the government's Consumer Price Index.

Just like the U.S. Mint, offering $700 gold coins with a face value of $50, the postal service appears to be undoing the hard work of the Federal Reserve in establishing "inflation expectations" far different than those that exist in the real world.

^___(from url)___^

When this idea was first floated (a year or so ago) a few of our forum's very astute posters were clearly way ahead of the learning curve -- having fully discussed this and arrived at the same assessment that has been so eloquently presented in this current piece by Tim Iacono.

Keep up the good work, Forumers!

R.

Some time ago here in Massachusetts, the Registry of Motor Vehicles implemented a new registration scheme, where one could, for a higher fee, register ones car for as long as you owned it. Normally one has to re-register every two years. It seemed like a good deal, I remember my Father registering his car that way.

Well, guess how long that new scheme lasted? Three or four years, then the Commonwealth needed money, so it went out the window. Even if one had signed up for it, one was forced to start registering the old way. I don't think the Registry reimbursed any of the people for their higher registration fee they had paid for the "forever registration."

Thank you Sir MK and Sir Gandolf for sponsoring the price of gold guessing contest. I am a faithful lurker. Without going into long-winded detail, I can say that this site has had a great, positive impact on me. Again, thank you for the contest and the wonderful site.

Oh, my secret for winning--Just as Tuco would do in "The Good, The Bad, and The Ugly", I just spotted my target and fired from the hip.

Tuco

Gold Rises in Asia as Possible Iran Sanctions Spur Haven Buying - Bloomberg
Yen Rises as Foreign Investors Boost Purchases of Japan's Debt - Bloomberg
Chicago manufacturing losing momentum - Chi. Trib
Fed Doesn't See Subprime Mortgages as Threat - Bloomberg Greenspan Says U.S. Recession Possible, Not Probable - Bloomberg
Commerce Department Says U.S. Economy Is Weaker Than Expected - NY Times
Mortgage Defaults Start to Spread - WSJ
Waning Appetite for Risk Poses Challenges - WSJ
Agencies issue subprime guidance: sources - Reuters
Is the S.E.C. Changing Course? - NY Times
Freddie Mac Tightens Standards - NY Times
Asian stocks wobble as aftershocks continue - AFP
Foreigners in for steep tax rises as China's parliament meets - AFP

http://www.bloomberg.com/apps/news?pid=20601103&sid=aQ0qHPdvLDxc&refer=us U.S. January Personal Spending Rises 0.5%, Core Prices Up 0.3% - Bloomberg.com - March 1, 2007 -- Excerpt:
"Personal spending in the U.S. increased more than forecast
in January and the Federal Reserve's preferred price guage accelerated, suggesting inflation wil remain the central bank's biggest concern."
The "CB's biggest concern" may be that we'll find out what their biggest concern really is.
The article goes on to admit that consumer spending is needed to fill the gap left by slowing manufacturing and housing, but does not question the methodology of sampling and measurement in the spending 'guage'.
Though this gap is addressed indirectly with the inclusion of anecdotes of disappointing results at some large retailers.

Congrats to the Winners. Thanks again to USAGOLD and Sir M.K. for hosting it. To all the participants, thanks for all the great posts. To Gandalf the White, for his time and patience a special thanks. Rules! We must have Rules! :0) I do not know for sure but I'm beginning to suspect this may have been the last contest. Too many warning signs and the majority of the expectations are positive for gold to rise. We all have thrown a piece of the puzzle into a blender and for some people that mixture will be a deadly drink who stay in the FIAT REALM.
This contest was at a turning point.Things are not as good in the market as it seems. Greed and Fear have raised their ugly heads. We are far ahead on the learning curve. Enough along that we all can weather the coming storm.

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

http://www.marketwatch.com/news/story/maybe-russell-right/story.aspx?guid=%7BAC4832B0%2DFA1A%2D47D3%2D8BFB%2D1FADE5387B7C%7D Maybe Russell is Right - Peter Brimelow and Edwin S. Rubenstein - MarketWatch
Maybe P.E.'s and stock prices are too high

Congratulations to the winners and a BIG Thank You to our gracious sponsor and his wizardly umpire. After a hesitant start because it was a pretty thought-provoking question, I was favorably impressed by some of the responses.

@ Goldi, I think you underestimate MK's knowledge of the market. He always chooses a moment when things look about ready to go crazy with volatility. After all, why have they always been called price-GUESSING contests, not price-ESTIMATING ones !!

@ Placer Gold - that was an interesting find you made in the bottle.

C!

FIAT REALM

Although the world's economy is indeed on the "edge", I wouldn't be surprised to see "them" pull the rabbit out of the hat again. It seems that all of the major players are working at keeping the "house of cards" standing. Mean while, each player maneuvers their position on the board; i.e. China & Russia chumming up with Iran, Europe entering into long term contracts for oil with "exporters". Given Rice's recent surprise announcement of the invitation of Iran and Syria to Iraq for negotiating, it may well be another dangerous "turn" has been averted.

One thing for sure, when the baby boomers begin to retire in earnest, the subsequent impact of reducing Federal tax receipts and while expenses explode will not be able to be avoided. Therefore, even if we avoid the immediate problems, derivatives, baby boomers and other issues WILL certainly collapse the dollar in the NEAR future.

SF

"Second verse, same as the first!"

@Silver Fox

"One thing for sure, when the baby boomers begin to retire in earnest, the subsequent impact of reducing Federal tax receipts and while expenses explode will not be able to be avoided."

There has ALWAYS been a surplus in SSI, that the lawmakers have eagerly absconded with for wars and other pork-laden activities. Why do you think that those who work for the government are NOT dependent on SSI for their retirement? They KNOW they are stealing it, that's why!

Blaming the Baby boomers for "draining the swamp" is just what the media wants us to believe.

Boomer retirement

Worse, I believe it was on Goldseek Radio were I heard that � of all US baby boomers have no savings and will be 100% dependent on SS. If the politicians, (what am I saying, they don't control the government), if our "masters" try to significantly reduce the SS payments, I would bet on seriously angry boomer protests in the streets. That might be why the "masters" are debasing our currency so quickly.

SF

@ Silver Fox,

Worse yet, of the 50% who do have savings, if they aren't listening to the "paper will burn" warnings, they probably won't have any soon.

Got gold?

My landlord called me at 6:32 and asked "What's happening to this market."

My reply? "The chickens are coming home to roost."

Don't know if he "gets it" yet, but he was mumbling something about buying some farmland near water.

I keep exhorting him to turn off CNBC and get on the Net, but he has a million excuses why he has no time.

TV: "Opiate of the Masses"

The six companies that control the media feed the masses a daily "dumbing down" of worthless, happyonomics: inflation is low, global warming isn't real, there is an unlimited amount of oil, the US economy is strong, the DOW is at a record high, bonds and treasuries are good investments, etc.

Karl Marx had it right last century, but anymore, it seems like the TV is replacing religion as the "opiate of the masses". Like your neighbor, when I try to talk "sense" to my friends, it is like I am speaking a foreign language that they just don't understand.

When the party is over, the Mogambo advises that "the collapse" will be over in a month. If at that time, you are not "holding" gold, it will then be too late. As such, I am afraid for my friends. Telling them "I told you so" will not bring me any joy.

SF

I started on my friends about 1989, by 1999 I was hounding, being ridiculed etc. Sure buddy I'll buy physical Gold @ $265.00 or Glamis Gold @ $3.00...NOT! GATA? What would I want to join those goldnuts for? Well hey, I had the last laugh there also.
Well nowadays they're still working 9-5 for the bank loans on everything they "think" they own, and I owe not one red cent with all my assets paid for in cash. I seldom waste my time anymore, even tho there's still so much unseen upside to real hard in your hand 'Yellow' money!

MK sits at his desk thinking simple contest thoughts. All is quiet for it is the beginning of the day and the castle mainframe (there is more to this castle than many think) boots up to the USAGOLD page. As he clicks to see the current gold price, the telephone rings with a lound trumpet like sound:

MK (loudly to the outer room, letting the phone ring): Marie, Marie. . . . .Can you please contact our great and wondrous wizard? He's programmed the phone ring on "trumpets" again. He must be having one of those infernal price guessing contests again at the forum. I was just thinking about that. . . .

Marie (picking up the phone): Good morning. This is the Castle. Yes, he's in. May I tell him who's calling. (Pause) The PPT? Can I ask the nature of the call?You can't say except that it is a matter of utmost importance to the nation? Very well, I'll put you through. (Puts the phone on hold.) It's the PPT, they would like to ask you a question.

MK: The PPT? What is that?

Marie: The Plunge Protection Team.

MK: The Plunge Protection Team? Who are they?

Marie: They are the organization that protects the kingdom against plunges.

MK: Plunges? What kind of plunges? OK. OK. I'll take the call. . . .(Picking up the phone) This is MK how can I help you?

PPT (Gruffly): MK, we understand that you are having one of your forum is having one of those famous gold price guessing contests.

MK: Well, yes. . .I believe so. . .at least Gandalf, our esteemed and noble wizard of at least 150 years, called the other day to see if the Castle Treasury still had. . . .

PPT (Interrupting): We don't need to hear all that. We know you are having a price guessing contest and we fear it is responsible for disrupting the markets!

MK: The markets? All of them??

PPT: Yes, all of them. And you probably know, if you read your own forum, that the PPT is charged with the possibility of keeping the markets stable, confidence up and liquidity flowing like the mighty Mississippi.

MK: The mighty Mississippi. Yes. I like that.

PPT: Occasionally we deem it necessary to take overt action when someone or something threatens market stability.

MK (with a chuckle): Have you talked to Alan Greenspan lately? No, No. . .just kidding of course. Now who did you say you represented again?

PPT: The PPT. The Plunge Protection Team. Let me get to the purpose of my call. These contests of yours cause volatility in the gold market which spills over to the stock market, then to the bond market, the housing market and finally the economy as a whole. We call it the USAGOLD Price Guessing Contest Falling Dominoe Effect and Syndrome, or USAGOLDPGCFDEAS for short. In short these contests endanger the public well-being, and we've come to the conclusion that something needs to be done.

MK (Excitedly): Aha! I knew it! And what about those trumpets. Those loud, blaring, mind-numbing trumpets. I've talked with Gandalf about that many times. . . . many times. The PPT needs to do something about that as well and let me say that I am 100% behind it.

PPT (Impatiently): We didn't call to discuss trumpets and wizards we called to discuss volatility and why there is market volatility across the boards every time you call the USAGOLD forum to contest.

MK: Well, I guess we all have our priorities.

PPT: We, the Plunge Protection Team, would like to know if you would mind if we manipulated your contests. You see, this is what we do. We manipulate things. Let me rephrase that -- we "manage" things. And this contest of yours keeps upsetting the apple cart. We are talking simple cause and effect here. The Team came to the conclusion that it would be the simplest, straight-line solution to simply manage your contests and then the gold market, stock market, bond market, the economy and the inflation rate will all fall into line. We won't need Bernanke anymore and Paulson can spend as much time in China as he wants. . . .and. . .well. . . . you get the picture.

MK: Incredible. All because of our contests? Oh my. . .So how do you propose to accomplish this?

PPT: You will make a new rule that everyone has to make the same price guess. That would eliminate the volatility.

MK: The same price guess? But, you see, the purpose of the contest is to. . .

PPT (Interrupting again): How can you care about contests when we are talking the whole world economy. What say you?

MK (thinking quickly): I'm not sure. Let me put you on hold.

MK: Marie. . .Marrrrrrrrrie. . . Please bring the portable extension, we must go to the vault and find that last Mermaid coin I've specially hidden for Tuco. You won't believe who I'm talking to on the phone. . . .Oh you say you know, who it is. You were the one who put them through to me. Yes. Odd isn't it. They are asking if they can manipulate the contests. . . .Did you bring the keys?

(Voices fade)

To be continued. . . .

Thanks everyone. Enjoyed the discussion in and around contest time.

@ MK,

Next time they call, have Marie ask for the caller's home phone number, and tell them you'll get back to them at dinner time!

LOL!

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070212/COLUMNIST21/702120338(Excerpt)
First bank failure in years happens in Pittsburgh


The streak is over.

After nearly 21/2 years without a bank failure, a small Pennsylvania bank collapsed this month.

Metropolitan Savings Bank of Pittsburgh was closed by its state banking department. About $12 million in deposits were assumed by Allegheny Valley Bank of Pittsburgh.

The Federal Deposit Insurance Corp. said Metropolitan had about $1.2 million in deposits in 70 accounts that could exceed the federal insurance limit.

The last bank failure occurred in June 2004, the longest period without a failure since the FDIC was formed in 1934.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteQuite the battle raging on the trading floor around $670.

The chart resembles a condition that inspired new shocks on my motorcycle.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sAND see what they have done now after you spoke to them at 0930 East Coast Time ! (CLICK on the chart LINK !)
To get even, maybe USAGOLD should have MORE POG CONTESTS !!!
<;-)

Maybe you've coined a new term for PPT operations at the Comex- "the shock absorber shorts".

Watching today's 200 point Dow drop, followed by recovery into a comatose state reminds me of someone facing an armed intruder wanting to terrorize them. The solution obviously is to take a tranquilizer and pretend he isn't there. After all if you can't remember him being there, he isn't, right?

Humor comes not oft from Ssir MK's pen! BWAHAHAHAAA! Sss! That one should be saved!

"MK: Incredible. All because of our contests? Oh my. . .So how do you propose to accomplish this?

PPT: You will make a new rule that everyone has to make the same price guess. That would eliminate the volatility."

we likes thiss... O yess we does... next Contesst, we'll all jusst guess... ssay, FRN30,000 per ounce of IT! That ought to "fix" things!

Trebuchets indeed! (cackle!) >8-)

By the way, Congratulations to the Contesst winners! ~8-)

@ the Hoople,

That would never do. In the world of gubmint/military acronyms, SAS is already spoken for, at least in hush circles, not to mention Scandinavian Airlines, and Serial Atached SCSI.

I still prefer "Paulson's Pirate Team", or SGIF (Spank Gold it's Friday).

-G'lox


From Wikipedia, the free encyclopedia

Special Air Service

The Special Air Service Regiment (SAS) is the principal special forces unit of the British Army. A small and secretive institution, it sometimes attracts a disproportionate amount of media coverage. The SAS was formed in 1941 with British volunteers to conduct raids behind enemy lines in North Africa, and today serves as a model for similar units fielded by other countries.

The SAS forms part of the United Kingdom Special Forces, alongside the Special Boat Service (SBS), Special Reconnaissance Regiment (SRR), and Special Forces Support Group (SFSG). The SAS is the oldest special forces unit in the world, tracing its existence back to 1941 and the North African Campaign of the Second World War. It is renowned for its elitism and is widely viewed as the best trained special forces unit in the world. It has been and is currently employed to train other elite units such as Mossad.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteThe after lunch crowd is dumping gold paper just to tick us off, I'm sure.

They're using the last trading hour to dump-and-run, like the cowards they are.

Spot and Spike, sic 'em!

Yes Sir Smeagol - I would like to second your vote that Sir MK's PPT pose be entred into The Hall of Fame! Precious pieces MUST be kept in the Golden Archives!

Congratulations to all contest winners and another big thank you to Sir MK and Sir Gandalf for running the contest. Cheers,

Waverider

Call for the question.....All in favor aye!

Aye! MK's post of that phone call is a keeper.

Caradoc

http://www.nymex.com/media/delivery.pdfThis is becoming the norm now, they neglect to post the Delivery Notice on the first day ...soften the blow I 'spose.
With 3100odd yesterday plus 800 today Ag might have nothing left (we'll get a better idea when they update the vol/OI) to give, inspiring this current drop-off.
Ag is normally a lot more honest than this ...particularly during delivery mth and I'd reckon this action is more a desperation measure than any wholesale loss of faith in Aggie ...we'll see!

SH: what's that? Who goes there?

PTB: it's me, Henri...the sheriff.

SH: What you again? what do you want now?

PTB: Well sir its about your chip. It seems to have gone missing again.

SH: What my chip? umm, I had it yeshterday...yesheree ahm sureofit. where did that leedle rashcal go anyway...I don know why itsho impotent anyhow ...wayt da minute...howd you know my chip is gone anyhow?

PTB: Well our TV camera had you walking by with a bag of tagged groceries and we got no blip of who was carrying them so it recorded you and sent it in to central and they sent it to me nad well you know how the drill goes. Say how did you get those groceries anyway???

SH: Dang it you guys have gone too far now...I spect you have finally infiltrated the Amish now too. Did someone plant a tag in my groceries?! They were shposed ta be clean...I don't know where that chip is...ahhh hey wait a minute...those guys who beat me up last night mustve taken it...ya know thats the fourth one they got this winter... they trade.em ya know their good for so many of dem Imperial credits a month ya know...I wouldn't be sprised if they were sellin 'em.

PTB: Yeah, Yeah Henri, I've heard it all before...come to think of it your credits were being used in more than one spot at a time and and we wondered how you could be in three places at once when you're not anywhere at all out here in the camp. Say you wouldn't have sold yer chip ya know thats agin the law...

SH: An just exactly what would somebody have that I would want to sell my chip fer anyway??? I walk 20 miles to the farm in the mornin cause you took my license the first time they stole my chip...i work all day to get a meesly bag of veggies fer me stew pot and some rabbit meat that I got wi me snare...I spose thats agin the law too...hows a feller sposed ta survive anyway with all this chipotle merrygoroun'fest...I don..need no stinkin' chip anyway!

PTB: Alright Henri, you know the drill (He pulls the implanter from his holster)...

SH: Dang it sheriff you poke so many holes in me with that thing they think I'm a drug addict down at the railroad stop. Git that thing away from me... git back ye ahhhhhhRGH crap...that better not git infected again...

A big big thanks to USA GOLD for allowing me to win a Silver Eagle.
I enjoyed this contest all the more for the volatility and the commentary.


Best Wishes

Are you saying that people are finally recognizing that the paper is no good without metal to back it? That the paper price is separating from the physical pricing???

Time Magazine has released their top 25 of Crimes Of The [20th] Century.

I looked through the list, but did not find the 1913 act creating the Federal Reserve. Hmmm.

- Survivor (with tongue firmly planted in cheek)

Thats my greatest concern Henri, that as this evolves (devolves), a lot of good honest types will be caught divesting themselves of metal thinking the "price" is dropping. In reality, given the current price discovery mechanism, that couldn't be further from the truth, as what is being (or will be) discounted will be the ability of the paper receipt to "eventually" represent metal-in-hand.

Paper-Metal separation? These recent stealth actions on Comex (PoG/PoS) will give rise to more and more metal simply being witheld from market as metal-holders see through the P-D ruse imo.

...by not posting Wednesdays delivery notice the world was deprived of seeing what in fact caused the PoG price to hold up right into the close (last delivery for Feb) only to plummet in access trade shortly thereafter.

Answer: a handful of Au deliveries imo.

Hold your Metal close ...and TRY not to be influenced by these S/T price jolts.

The buying and selling of Treasury bills, etc., under the auspices of the Manager of the Open Market Account through the New York Federal Reserve Bank for the accounts of all Federal Reserve Banks are tied to federal funds rates. As a guide to open market operations the rates are used as follows: a rise in the federal funds rate above the rate triggers open market selling operations. ; A fall below the rate, open market purchases. Open market operations of the buying type add (free gratis) legal reserves to the banking system; selling operations reduce reserves.
The technicians in charge of the hour-to-hour administration of open market operations apparently believe that there is, at any given time, a federal funds rate that is consonant with a proper rate of change in the money supply. They have in fact plugged this concept into a computer model. (e.g., the Taylor rule). What they have actually "plugged in" is an open ended device through which the commercial banks can decide whether or not there should be an expansion in the legal lending capacity of the banking system � the capacity to create credit (money) and to acquire additional earning assets. That this expansion in money and credit will always take place is attested to by the insignificant amount of excess reserves held at all times by the member banks.
A clear distinction should be made between the temporary and the longer term effects of open market operations on the level of interest rates. To hold down the Fed Funds rate (and other rates through this key rate), the Manager of the Open Market Account puts through buy orders for T-Bills or other eligible securities sufficient to yield a net increase in free, member bank reserves and free excess reserves. The Fed acquires these earning assets by creating free, new interbank demand deposits in the Federal Reserve Banks�that is by creating free, new legal reserves at the disposal of the member banks (IBDDs).
Assume the buy order is for T-Bills. The effect is to bid up their prices, reduce their discounts (interest rates) and add to free member bank legal and excess reserves. The expansion of free excess reserves increases the quantity of loan able "federal" funds thereby pegging or retarding the increase in the Fed Funds rate but the longer term effects of these operations are to fuel the fires of inflation.
An understanding of these temporary and longer term effects reveals why the tight money policy initiated in February 2006 brought about a continued upsurge in interest rates until 07/20/06.. But it had the longer term effect of bringing inflation and interest rates down, until the end of the FOMC's tight money policy in Dec..
Approximately 75 percent of the inflation between 1965 and the early 1980's was due to an irresponsible easy monetary policy. Since 1965, the operations of the trading desk has been dictated by the federal funds "bracket racket". This has assured the bankers that no matter what lines of credit they extend, they can always honor them since the Fed assures the banks access to free legal reserves whenever the banks need to cover their expanding loans � deposits.
Our monetary mismanagement has been the assumption that the money supply can be managed through interest rates. We should have learned the falsity of that assumption in the Dec. 1941-Mar. 1951 period. That was what the Treas. � Fed. Res. Accord of Mar. 1951 was all about The effect of tying open market policy to a fed Funds rate is to supply additional (and excessive free legal reserves) to the banking system when loan demand increases. Since the member banks have no excess reserves of significance the banks have to acquire additional, free, reserves to support the expansion of deposits resulting from their loan expansion. This has assured the bankers that no matter what lines of credit they extend, they can always honor them since the Fed assures the banks access to free legal reserves whenever the banks need to cover their expanding loans � deposits.
Apparently, the Fed's technical staff either never learned, or forgot, how Roosevelt got his "2 percent war". This was achieved by having the Fed stand ready to buy (or sell) all Treasury obligations at a price which would keep the interest rate on "T" bills below one percent, and long-term bonds around 2 -1/2 percent, and all other obligations in between. This was achieved through totalitarian means, involving the control of total bank credit and the specific rationing of that credit We had official price stability and "black market" inflation. This was reflected in the price indices as soon as price controls were removed.
The Fed cannot control interest rates, even in the short end of the market except temporarily. By attempting to slow the rise in the federal funds rate the Fed will pump an excessive volume of free legal reserves into the member banks.
The manager of the open market account uses a "creeping peg" inorder to add or drain bank reserves . The Manager of the Open Market Account should ignore the fed funds "bracket racket". A "Taylor like Rule" is responsible for our bubbles in stocks, oil, and residential and commercial real estate.

There is only one interest rate that the Fed can directly control: the discount rate charged to bank borrowers. The effect of Fed operations on all other interest rates is indirect, and varies widely over time, and in magnitude. In the last several months it's decoupled from legal reserves, inflation rates, and short term and long term interest rates.
As long as it is profitable for borrowers to borrow and commercial banks to lend, money creation is not self regulatory. This observation would be valid even though the Fed did not use the federal funds bracket device as a guide to open market operations. With the use of this device the Fed has actually pursued a policy of automatic accommodation. That is, additional free reserves and free excess reserves were made available to the banking system whenever the bankers and their customers saw an advantage in expanding loans. The member banks, lacking excess reserves, would bid up the federal funds rate to the top of the bracket thus triggering open market purchases, free bank reserves, more money creation, larger monetary flows (MVt), higher rates of inflation � and higher federal funds rates, more open market purchases, etc., etc.
Unfortunately, the effect of FOMC operations on the federal funds rate is unknown for an indefinite length of time. Using the fed funds rate, lags are variable. Likewise, the Fed cannot calculate the level of interest rates associated with the ROC in nominal gdp, as historically, they vary.
Monetarism involves controlling the volume of total reserves, not the volume of non-borrowed reserves as administered by Paul Volcker in Oct 1979 � 1982. Monetarism involves more than watching the aggregates, it also involves properly controlling them.. Monetarism has never been tried. If the money supply is controlled properly, the determination of interest rates can be left to market forces.
Because the Feds technical staff has based its policies on the incorrect assumption (that in their time deposits activities the commercial banks act as intermediaries in the savings-investment process), and the evidence is the elimination of all interest ceilings and reserve requirements on time deposits. Apparently, the Fed's technical staff believes commercial banks create new money, only in their transaction deposit operations, and not in their savings or time deposit operations. This must be their rationale behind discontinuing publishing M3. This will impact us in the long term, because it (the DIDMCA), will eventually cause our means-of-payment money to approximate M3
The "Taylor Rule"
R= P + .5Y + .5(P � 2) + 2
Where r = the fed funds rate
P is the rate of inflation over the previous four quarters
Y is the percentage deviation of real gdp from a target

Guess what happened on bank squaring day, i.e., last day of the systems maintenance period? Banks postponed meeting a larger than normal part of their reserve requirements, until the last day of the reserve maintenance period, as the rate fluctuation data suggests.
So much for lagged reserve accounting. That happened to be one reason why contemporaneous reserve accounting, was favored over lagged reserve accounting. The volume of holiday transactions deposits was much higher 30 days ago, yet depository institutions had to meet their reserve requirements on those liabilities by Feb. 28, 2007. And because the volume of reserves supplied to the banking system by the FOMC was exceptionally low, the banks were unable to meet them.
As it happened, the funds "bracket racket" failed again. If the FOMC had been targeting the total member commercial bank adjusted legal reserve figure, there would not have been a panic in the financial markets. Consequently, to stabilize the financial markets, 17.25 bill of temporary repurchase agreements, consisting of treasury and agency securities, were issued on Feb. 28, 2007 (open market operations of the New York trading desk which added to the Federal Reserves portfolio -- SOMA). And because depository institutions total reserves had been drained beyond justification, I suspect that a significant number of depository institutions carried a 2% reserve shortage, into the next reserve maintenance period.
It has been repeatedly stated that the only tool at the disposal of the monetary authority in a free capitalistic system through which the volume of money can be controlled is legal reserves. If the FOMC ever came to grips with the historical experience, they would realize that the only type of bank asset that Fed can constantly monitored and absolutely control, are interbank demand deposits (IBDDs) held in the Reserve banks, owned by the commercial banks. This was the original definition of legal reserves in 1913, and it is the only viable definition.

A reserve maintenance period is a period over which the daily average reserves of a depository institution must equal or exceed its required reserves. Required reserves are based on daily average deposit liabilities in the reserve computation period

@ Flow5,

"Approximately 75 percent of the inflation between 1965 and the early 1980's was due to an irresponsible easy monetary policy."

My guess is you're only off by about 25%, or one third of the total.

Ain't statistics marvelous?

"The United States has the largest national economy in the world, with a GDP for 2006 of 12.98 trillion dollars" If we hiccup, it resonates around the world. In contradistinction, never, has it been any other way. So which do you think came first, the chicken or the egg?

fool me once, shame on you. fool me twice, shame on me.

Globalization isn't chic. There's no alternative. Imported oil, + U.S. foreign & domestic military policies will rapidly transform this country into one that has the highest poverty rate in the world. The exchange value of the dollar will perpetually, inexorably, relentlessly, depreciate, to where the U.S. will no longer have foreign policy choices.

http://www.crbtrader.com/data/default.asp?page=quote&sym=SIH6&mode=dTodays Vol/OI is posted and I'm encouraged by OI in the current month ...assuming it's not ALL market-maker churn we might get back on track.
In trading vernacular being seriously overweight might ultimately be injurous to your health ...it's fun while it lasts tho!

http://money.cnn.com/2007/03/01/markets/insider_trading.reut/index.htmEven the article downplays the fact that 24, not 13 charges were laid.
Love the part where the plot was uncovered and, rather than reporting it, they opted to blackmail the marks.
Can you say all-pervasive.

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

March 1 (Reuters) -- COMEX gold futures dropped about 1 percent by late Thursday afternoon in New York as jitters set in after sellers returned to the stock markets. Even though gold is often seen as a safe haven in times of financial instability, analysts expected some investors to unload holdings and opt for liquidity as a wave of risk aversion swept through global markets for a second time this week.

Investors cashed in bullion holdings to pay for losses on equities.

The most-active April contract settled down $7.40 at $665.10, traded in a wide range of $664.40 to $680.20.

"It's just nervous, jittery type of trading right now. Gold is still pretty steady, although it's certainly run into some resistance between $675 to $680. So I still think you have that hangover from the Chinese news," said Bruce Dunn at Auramet Trading.

Dunn said gold would remain under pressure because of the volatile stock markets unless things turn around.

U.S. stocks tumbled early as a strengthening yen stirred concern that investors were being forced to unwind carry trades in a repeat of the risk aversion that sparked Tuesday's global market rout.

The Dow Jones industrial average and the benchmark Standard & Poor's 500 Index both sank nearly 2 percent in early morning trade. Both indexes finished just slightly down.

Gold hit a nine-month high of $689 on Monday as firm crude oil, tensions between Iran and the United States and a weaker dollar raised the metal's appeal as a haven and a hedge against inflation.

But it was hit, along with other financial markets, by heavy selling triggered by the biggest drop in China's main stock index in a decade.

Most analysts retain their friendly stance toward gold, with many looking for a move in coming weeks to $700 and above.

"Sentiment toward gold is still bullish, what happened this week is a blip, it coincided with a period when gold needed a consolidation period," said Stephen Briggs, analyst at SGCIB.

"The gold price is going to head toward $700, that's what people want it to do."

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

Greetings,

I've enjoyed this site for the last few months, ever since a private wake-up call guided me into buy physical gold for the first time. And, although the inner voice that's always been pretty accurate in the past shouted at me to get my money out of the stock market and park it for spell, I didn't listen (again).

What is most frightening to me about all of the posts and articles I read about the reasons to get out of the stock market and buy gold is that they all basically confirm each other. The following 1-hour video/slide presentation, which was sent to me by a friend is a little different and worth a look. It presents insidiously cancerous fail-to-delivery shorting practices within the stock market that enables crooks to trade billions of dollars worth of stock without money. It also paints THE most unnerving picture of the SEC ever. The weirdest part is that, for all of the incredible information-packed content, the presenter is never identified. Here it is -- see what you make of it:

http://www.businessjive.com/nss/darkside.html

http://news.yahoo.com/s/ft/20070302/bs_ft/fto030120071936076619;_ylt=AgTd5DdZrbafn0hZfYQLmXT2ULEFFears over launch of trading law By Anuj Gangahar in New York, Doug Cameron in Chicago and Jeremy Grant in Washington - 03/02/07
1 hour, 13 minutes ago -- Snippits:
"The US stock and options market will come under fresh pressure next week with the introduction of a controversial securities law that will push trading volumes to levels far higher than those that caused systems to crash during Tuesday's market sell-off.
The law, known as Regulation National Market System, or Reg NMS, is aimed at levelling the playing field in the US equity market, meaning trades must be routed to the exchange that offers the best price.
Reg NMS will shake up the trading environment and has forced exchanges to build new electronic trading systems or update existing ones to comply with the rule in time for next Monday's deadline.
It also means brokers must look for the fastest trades at the best price...

Some fear that the rapid development of electronic trading in the run-up toReg NMS means the systems might not have been sufficiently tested and that the spike in volumes that is widely predicted could ex-pose weak points. In Tuesday's sell-off some volume records were smashed, led by electronic trading, across almost all asset classes."

>> Daylight saving tech changeover coming later this month and now this all of a sudden. Good job probing some possible scenarios for the layman.
Tuesday was different and they're entitled to their opinion. What stands out is the original reporting AND the linkage to this week's event. This invites further exploration and speculation of all kinds. Bits and pieces.

It's amusing to me how the media will go to great lengths to tell others how it's "OK" to not really worry about the current market conditions.

If it was me I would be doing just the opposite. GET OUT AND STAY OUT!!

I hold NO paper investments other than fiat in stupid banks which I am converting ALL to hard assets by the end of this year.

NO MORE PAPER!!

This illusion is created by corporate staff writers to hold up the corporate torch! How sad that they can not get off the "feel good" bandwagon and report on the true state of economic affairs like greenspan has the balls to do. Maybe he wants to make a reversal and FINALLY stand up to the old school of doing business.

2007 will go down in history with some remarkable financial happenings!!

Here are some snippets from the good ole msn staff writers....guess they need to be concerned about MSN stocks too....


Americans hold on despite market

By Bradley Meacham
This week's global stock sell-off erased billions of dollars of market value.

But most Americans did exactly what investing experts advise in such a scenario: nothing.

According to a new MSN-Zogby poll, just 5% of Americans said they see a decline like this week's as an opportunity to buy, and only 1% said the slumping stock market causes them to sell.

Thirty-four percent said they either don't own stocks or are unsure how to react to a downturn.

Tuesday's around-the-world stock-market plunge trimmed more than $1 trillion from global equities. The Dow Jones Industrial Average ($INDU), which has recovered some of that day's 416-point fall, is still on pace for its biggest weekly drop since January 2003. The Standard & Poor's 500 Index ($INX) is on pace for the biggest weekly drop since September 2002.

Some sophisticated traders managed to profit handsomely from this week's chaos with complicated bets on bonds, foreign currencies and risky investments. Yet most investors who trade amid a market frenzy report losses, analysts said.

GF>>>>Again the only ones who really profit here are the investment bankers who win at others fall and the stock brokers. I read more and more how the little guy is being crushed and how the new babe boomers will retire to NOTHING!! This is not asset preservation!! What did they really expect?? To make a fortune? In today's political unrest? NOT!!



According to the poll, most Americans have heeded that lesson.

GF>>>>(SHAME)When a boat is sinking would you not want to get out or find something to float on? True you can't float on gold, but is a safety insurance for rotten times or ANYTIME!!


Among those (41%) who identify themselves as members of the investor class, 85% said they hold steady during market upheavals and don't make changes to their portfolios. But 8% of self-described investors say they buy, and 2% say they sell during a market downturn.

Men (61%) and women (59%) are about equally likely to hold onto their stocks during volatile shocks in the stock market.

The interactive survey was conducted Feb. 28 and March 1, and carries a margin of error of plus or minus 2.6 percentage points.


GF>>>>I WOULD HAVE JUMPED THE MOMENT I MADE THE "BIG GAINES " In this economy holding on would make no sence!! At least in some PAPER stocks.


PERHAPS HE REALLY IS TRYING...to help this time!

Much in demand
At the same time, Greenspan's outspokenness remains unusual for a former head of the world's top central bank. A year after erstwhile Fed chief Paul Volcker stepped down in 1987, he wasn't making similar market-moving statements. By contrast, Greenspan remains much in demand on the public speaking circuit and has seized the spotlight with other economic pronouncements since his retirement. The highly visible former chairman could prove a challenge for his successor even when their outlooks don't widely differ.

Get tuff!!
Get Smart!!
Get your gold!!

GF

"THE PRICE IS RIGHT"

http://news.yahoo.com/s/ft/20070302/bs_ft/fto030120071951076622Frenzied trading takes its toll on markets By Christopher Brown-Humes and Gillian Tett in London
1 hour, 16 minutes ago - 03/02/07 - FT.com - Snippits:
"Financial markets swung wildly on Thursday in volatile trading marked by further selling of equities and fears about an unravelling of the global carry trade...

At the same time, trading in US and European credit markets was exceptionally heavy for a third consecutive day. London trading was marked by particularly wild swings in the prices of credit derivatives, used to insure investors against corporate defaults...

Although the scale of market movements remain relatively small compared with historical crises, the spike in volatility now appears to be forcing investors to reassess their positions. Asset prices have been so stable that investors have adopted trading strategies based on the assumption that volatility will remain low - an assumption undermined this week.
Ronan Carr, European equity strategist at Morgan Stanley, said: "People initially thought we were only going to see a small pullback in equity markets, with no major correction. But it seems they are starting to doubt that."
Albert Edwards, at Dresdner Kleinwort, said: "We believe the long and widely awaited equity correction is upon us. We expect government bonds to be the safe haven."
The credit market moves suggest that the sentiment shift now under way in that sector could be more violent than anything occurring in the equity world."
Mikal-- I need to comment on this generous and motivated article due to Interantional Fair Use Copyright Laws. What you are seeing is little different than the scenario reprised over and over here. Lots of bluff, noise and "fury" as Jim Sinclair has stated. All in the name of stability, rolling seas notwithstanding. And if turbulence and volatility aren't
overused until we're all inured by them, we can enjoy the serenity afforded by a real safe haven...

If the words 'turbulence' and 'volatility' aren't
"reported" so often that they lose effectiveness as a warning, remaining objective on the markets and the often opposing news would come easier to some.
Thank you

http://www.financialsense.com/fsu/editorials/willie/2007/0301.htmlsnip:

One can find a safe bet, that whenever gold flirts with the $700 mark, expect the unexpected. Silver was leading the way, moving into the mid-$14 level. Gold investors seem to require assurance to reinforce bravery. The events this week undercut that built bravery. As a result, gold and silver must climb a tougher wall of worry. My view regarding gold and monetary policy (central bank rate decisions) and stock/bond markets, against the backdrop of economic recession threats can be stated here simply. If over the next several months, gold fails to surpass $700, if silver fails to surpass $15, then we will be treated to a whopper recession. Why? Because the USEconomy has become driven by the financial sector in a truly bizarre display of a sick perversion. This is more than a tail wagging the dog. This is a Goldman tail wagging a dog sled team. In order to "control" gold, the powers must do irreparable harm to the entire economic system. They will therefore only permit little shocks. This accomplishes a concomitant fear factor to assist in the control of the gold price. My sure bet is that Goldman Sachs is behind the scenes working on the events this week. With Alan Greenspan gone from behind the curtain, Gentle Ben is not up to the task of pulling hidden levers. That job goes to the Team Goldman. The gold price was issuing loud shrill alarms. It will again, but fear must be quieted among the gold players. They must conclude once again, and they will, that gold will rise unless a painful recession is permitted from restricting the monetary spigot. The US cannot restrict that spigot, since its life blood is credit and not legitimate income from the manufacturing or other tangible sector. My gut tells me that the phrase "inflate or die" applies very aptly right now. The powers know it, so they shocked the system. Rates must rise in some global corners. Shocks might occur in other corners. But the flow of money which is constantly reflected in the gold price will remain brisk enough to lift that gold price. Is Goldman playing games, exploiting the cheaper gold price for large new long positions? Methinks probably yes

THE HEADACHE

If all this gives you a headache, you are not alone. Rest assured that unless a global recession led by the crippled USEconomy is desired, gold will thrive in the months ahead. The gold price reflects the abuse of money, and in order to prevent a meltdown on the financial side and on the economic side and within the banking arena, money must flow briskly so as to conceal the damage and to fill the gaps, not to mention restore the losses by insiders on Wall Street. Gold will only falter persistently if the entire system crashes after permitting it to crash. As long as clownish desperate central banks are on the job, at the controls, you can count on monetary inflation. Printing money and perverting the statistics is what they do best. They live to inflate tomorrow's bubble in order to become heroes once again. They act as accident event underwriters of last resort in today's accident ridden world. Their jobs will not go away. Gold took a hit as it danced next to the $690 line, but it is stabilizing above the $660 line. That is not a bad place to rest and recover and regroup for the next skirmishes. Fires rage everywhere one turns. Gold rises from the heat.

-Goldilox

JimWillie belives that nothing short of major recession will hold back PoG as things move forward.

http://www.businessjive.com/nss/darkside.htmlMost deserving of a re-post in it's rightful spot in the link box ...scary huh?
Thank you.

The dollar is approaching its new resistance at .8378

TO night 's THE NIGHT ........maybe ...............

CHEAP SILVER

CHEAP GOLD


Next stop for SILVER WILL BE
21

YAHOOO

Email from a stepbrother who is a senior:
"Maybe you've read this one....I know this feeling all too well...
Senior's Moment
A 98 year old woman wrote this to her bank. The bank manager thought it amusing enough to have it published in the New York Times:
Dear Sir:
I am writing to thank you for bouncing my check with which I endeavored to pay my plumber last month.
By my calculations, three 'nanoseconds' must have elapsed between his presenting the check and the arrival in my account of the funds needed to honor it. I refer, of course, to the automatic monthly deposit of my entire salary, an arrangement which, I admit, has been in place for only eight years.
You are to be commended for seizing that brief window of opportunity, and also for debiting my account $30 by way of penalty for the inconvenience caused to your bank.
My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways.
I noticed that whereas I personally attend to your
telephone calls and letters, when I try to contact
you, I am confronted by the impersonal, overcharging,
pre-recorded, faceless entity which your bank has become.
From now on, I, like you, choose only to deal with a flesh-and-blood person. My mortgage and loan payments will therefore and hereafter no longer be automatic,
but will arrive at your bank by check, addressed
personally and confidentially to an employee at your
bank whom you must nominate.
Be aware that it is an offense under the Postal Act
for any other person to open such an envelope. Please find attached an Application Contact Status which I
require your chosen employee to complete.
I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative.
Please note that all copies of his or her medical
history must be countersigned by a Notary Public, and the mandatory details of his/her financial situation
(income, debts, assets and liabilities) must be
accompanied by documented proof.
In due course, I will issue your employee with a PIN
number which he/she must quote in dealings with me.
I regret that it cannot be shorter than 28 digits but, again, I have modeled it on the number of button
presses required of me to access my account balance on your phone bank service. As they say, imitation is
the sincerest form of flattery.
Let me level the playing field even further.
When you call me, press buttons as follows:
1. To make an appointment to see me.
2. To query a missing payment.
3. To transfer the call to my living room in case I
am there.
4. To transfer the call to my bedroom in case I am
sleeping.
5. To transfer the call to my toilet in case I am
attending to nature.
6. To transfer the call to my mobile phone if I am not at home.
7. To leave a message on my computer. (A password to access my computer is required. A password will be
communicated to you at a later date to the Authorized Contact.)
8. To return to the main menu and to listen to
options 1 through 7.
9. To make a general complaint or inquiry, the
contact will then be put on hold, pending the
attention of my automated answering service.
While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call.� Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.
May I wish you a happy, if ever so slightly less prosperous, New Year.
Your Humble Client (Remember: This was written by a 98 year old woman)
JUST GOTTA LOVE SENIORS"

http://news.yahoo.com/s/nm/insidertrading_dc;_ylt=AgRK8Ao_kHxUc4pdHcPontIDW7oFNEW YORK (Reuters) - Employees of some of Wall Street's top banks were among more than a dozen people charged on Thursday in what authorities called one of the most pervasive insider trading rings since the 1980s, accused of using leaked information and even blackmail to make millions of dollars.

Imagine how many more who have not and NEVER will be caught. Stealing the money of hard working American's~

Good time to buy Physical gold and keep it in YOUR hands.

GF

they say never to catch a falling knife.

This doesn't apply to gold, as it can never break- and even if it did, it would be unchanged.

Of course, the average investor is more likely to try to catch a falling index. Given the fundamentals, that may not be a good idea- besides, unless you are a Buffet, you could never take delivery.

http://quotes.ino.com/chart/?s=FOREX_USDJPYAfter recently besting it's multi-year PoG high, Yen, following criticism from fellow G8 members at their recent knees-up in Essen, has reacted most out-of-character and plunged ...or better skyrocketed visavee everything!

BoJ are usually all over this sort of strength "managing" it back down. ...Hu knows why they're absent now?

http://www.kitco.com/images/live/gold.gifOdd little flurry in virtual SpotPoG just now. It popped up to accomodate the London "fix" @ $664 ...and now is settling back down.
I'd find the "fix" more credible if it popped $20 or $30 bucks and settled back down again to better reflect the Papermarket PoG.
It will one day ...count on it!

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

WHat a Party !!!

It looks like something's wrong with this picture .......

Someone paying homage to almighty dollar ..........

Funny that it is still bumping resistance this morning that was once support at .8380 and the silver and gold complex(s) are down 5.98% and 11% respectively....

since the drop began ....

WTIC .....not moved by all the monkey business ...maybe getting ready to roll over

WHO'S SELLING ......?

How many billions were cashed out the other day at the fall of Mr Dow and SP and NASDAQ....

Good Cash to go on a buying spree at rock bottom prices after a precipitous and unlikely crash in metals.....

THE STENCH is going up my nose.....and smells of ROTTENNEESS.....

SPOILED RETARDS.......from IVY LEAGUE SCHOOLS that got in while the NETWORKING WAS GOOD ....NOW THEY DO ANYTHING THEY ARE TOLD for the security the FRN represents to them since they have NO OTHER KNOWHOW than to do what they are told ....to be accepted by the crowd they married....and have given their souls to die for......

I am sure that everytime they do this ........
people who are a threat to national security and homeland security buy up the gold .......

PRESTO CHANGO .....and LOOK KIDS .......

GOLD AND SILVER DOWN.....

GUESS THERE'S NO INFLATION ........

DID any fundamental change happen in the last week to
alter the BASIC OUTLOOK for the DEFICITS , DOLLAR, WAR,
ENERGY COMPLEX, the FAILING status of the RESERVE CURRENCY .

WHAT you gonna do ......
Who you gonna call .....
What do people buy in times of global financial political instability ...
Do YOU think that the BIG BOYS are NOT POSITIONING THEMSELVES in allignment with this SEA CHANGE that relates to K WINTER ....inspite of having the neurotic bent to stay in control via unlimited PRINTING PRESS ABILITY...

When wars are waged, to the VICTOR go the SPOILS.....and I believe that the one trick pony show has arrived again ...
and we are on the verge of a STAND OFF or a WAR..
I believe banker's who finance war's require GOLD as COLLATERAL .....when these situations transpire.

Last night there was some IRREGULAR REPORTING OF PRICES at KITCO ......
THERE'S no limit to the mischief these people have to use at their disposal ......and it's a good CUT .....

IN TIMES LIKE THESE, PAPER burns and METALS SHINE .......
REAL MONEY IS LIKE THE TRUTH , its the same yesterday today and forever....standing watch and serving its mission .....

IT REMAINS when the BANKER'S HOUSES and the CURRENCIES burn ........BOND HOUSES FAIL ....STOCKEXCHANGES COLLAPSE.

The battle rages .........and skirmishes come and go and their casualties......but the longterm affects of inflation are embedded in the fundamental science of money and its distribution .....ever increasing supply of frns chasing limited supply increases of Natural resources required to sustain PEOPLES wants and needs causes PRICES of the RESOURCES to go up .

ONe has to decide if one wants to have GOLD OR SILVER IN ONES POSSESSION when the music stops and their are no more CHAIRS......just frns'''''' weimar germany style frns....

WHAT IS WRONG with the WEST ....the BANKER"S , POLITICIANS, and MEDIA , is that their time hozizon for doing things is not more than a few years ; it has to do with the next election or the year end botoom line ...
THEIR IS NO GUIDING LIGHT , vision , plan that THESE PEOPLE NAVIGATE BY,( excepting the social engineering programs that may or may not be leading to a NEW WORLD ORDER : a plan that is not in the interests of the people) . THE CHINESE are planning in 100 year increments . don't know what their plan is but long term given their population and buying power ....their plan is probably going to have more bearing on the future and global banking , politics .... than the activity taking place in the west.

I think , another cureency crisis their is not a destabilizing factor.......they will not be subjugated in this manner again .....Maybe the CIA will scare them into subjection by bringing more GERM WARFARE DIRTY TRICKS out of the closet .....again ...Maybe the ARABS and all of the far east and CHINA will get on board the NEW WORLD ORDER (BANKER CANCER) TRAIN ....and peace unity and harmony will grow out of a vacuum .........I DON'T THINK SO.....
TRUE RESPECT IS A SEED SOWN and REQUIRED for these CULTURES TO BE UNDERMINED IN THIS WAY ....and THERE IS NO RESPECT ...just bankers taking coup ........

as long as this is the state of affairs in the world ....
there will be no peace or trust ,,,,,,and GOLD WILL DO WHAT GOLD DOES ........acts as a WATCHMAN and it will be used as a tool from the EAST to KEEP WESTERN BANKERS and currency systems and governments HONEST.

http://www.bloomberg.com/apps/news?pid=20601087&sid=apJK4zygVGjQ&refer=worldwideDresdner recommends aggressive underweight in equities
Bloomberg | March 02, 2007

"It has been repeatedly stated that the only tool at the disposal of the monetary authority in a free capitalistic system through which the volume of money can be controlled is legal reserves. If the FOMC ever came to grips with the historical experience, they would realize that the only type of bank asset that Fed can constantly monitored and absolutely control, are interbank demand deposits (IBDDs) held in the Reserve banks, owned by the commercial banks. This was the original definition of legal reserves in 1913, and it is the only viable definition.

A reserve maintenance period is a period over which the daily average reserves of a depository institution must equal or exceed its required reserves. Required reserves are based on daily average deposit liabilities in the reserve computation period."



Druid: Are some very large market participants beginning to realize this and adjusting their portfolios accordingly or, and probably a combination of both, is the CB banking cartel relationship(London, New York, Tokyo) beginnig to splinter which is feeding into this most recent volatility?
I would think, that through the interdependence that these CB's weaved together, someone would step up and cover any shortages.

@Cometose. You asked:
"DID any fundamental change happen in the last week to
alter the BASIC OUTLOOK for the DEFICITS , DOLLAR, WAR,
ENERGY COMPLEX, the FAILING status of the RESERVE CURRENCY?"

Now, don't get me wrong. . . I agree with GATA's perspective on gold pricing as much as anyone here, but in this case I think natural market forces are playing into the hands of those who prefer a lower gold price.

The reason is the Yen carry trade. Boatloads of Yen have been borrowed at almost zero interest. The currency is then "carried" to other markets around the world where it is invested (maybe "leveraged" is a better term) at higher rates of return.

I think it is inevitable that some of the carry trade funds have been invested in gold - probably paper gold (futures or ETF). We know the gold market is relatively small, so it would not take a lot of carry trade money to have a significant impact on the gold market.

The Yen carry trade operates on a spread of maybe 3% or so. During the last week, the Yen value has increased just enough to erase that spread. So what happens? Speculators get out of their positions and sell those Yen back ASAP. This is the unwinding of a leverage play which affects markets all over the planet.

I believe gold has been impacted by these currency moves. If I am correct, then the effect may be temporary.

- Survivor

When they have stocks to sell, "Equities are the best place to be......"

When they need to support the dollar, "Liquidity is the best place to be......."

Nothing new under the sun !

http://www.moneyandmarkets.com/press.asp?rls_id=709&cat_id=6&"If you think stock markets were the only ones that went haywire this week, look again:

The dollar fell sharply, especially against the yen ... Treasury bonds soared, with the long bond gaining almost a point and a half on February 27 alone ... and gold prices swung all over the place.

In other words, volatility went off the charts in almost every market I track. A volatility gauge maintained by the Chicago Board Options Exchange, for example, exploded 63% in a single day, the biggest increase in U.S. market history.

What single force links all this action? What little (or big!) beast could possibly be behind so many seemingly disparate market moves? Here's my answer � "

Businessjive.com

Topaz: thank you for that posting the Internet link to businessjive. I have known for over a decade that the stock market was rigged, I just didn't know how the game was played. I also always thought that the SEC was just another clueless federal agency. But this site does a great job of explaining how the "game" is rigged and that "our" SEC is a willing participant in the scam. Real scary...

All the more reason to own gold.

SF

http://www.businessjive.com/nss/darkside.html
Terrific presentation that I highly recommend everyone watch.

What's it boil down to?

First we had fractional reserve banking, and now we've got fractional reserve trading.

Or to put it another way, the Mother of All Bubbles has birthed a new one.

In Gold We Trust (buying the dips accordingly).

@ Thoreauly,

I remember watching this presentation a few months back, when we were discussing "Naked Shorting". What a racket.

Seems to me that the FOREX is similar, as commercial banks that want to short a currency can borrow unlimited funds from the FED to do so, under their "relaxed" reserve rules.

If this is the case, it is one more "weapon of financial mass destruction" that can be weilded against those who challenge Dollar hegemony.

I believe this is why some state that commodities may divorce themselves from the paper trade at some point, as an FTD in paper is not quite the same as an FTD (force majore?) in goods.

Correct me if I am wrong . . .

http://www.marketwatch.com/news/story/gold-prices-drop-pace-over/story.aspx?guid=%7BF9467C75%2D1D43%2D499A%2DB349%2D16C878D25E3C%7DGold's steep sell-off was exaggerated by heavy short selling. But numerous factors point towards gold's inclination to rapidly make up for lost time - surprises now will come only on the upside IMHO.
Opinions vary.
But all in all the following two articles, though dead wrong in such places as some assertions by Nadler and Gartman, should help fill any voids of understanding just what I'm saying:
Gold prices drop, on pace for an over $40 weekly loss
Marketwatch - 03-02-07 - Linked
See next post for next article

http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564974468129423377Gold's safe-haven status put to test on recent stock scare
LISA YURIKO THOMAS
March 2, 2007 10:08 AM
Dow Jones Newswires - LONDON (Dow Jones/AP)

http://stockcharts.com/h-sc/ui?s=$gold:$silver&p=D&b=5&g=0&id=0It's one thing to wake up to another down day in virtual metals (ho-hum) ...it's a complete mystery though, in an Ag delivery mth, why the G-S Ratio is backpeddling.
The RSI 30 got me again (it's becoming a far too reliable turn indicator imo and will fail on the next visit) ...surely we'll come back with a vengance next week.

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/03/01/neclipse01.xmlAll eyes on eclipse of the Moon
By Roger Highfield, Science Editor
Last Updated: 2:28am GMT 02/03/2007
Snippits:
"If the sky is clear on Saturday night the first total eclipse of the Moon for three years should be visible.
The Moon will appear a shade of brown, coppery-red or orange, an effect that will be visible from all continents.
During the period of totality, from 10.24pm to 11.58pm, the Moon will only be illuminated by light filtered through the Earth's atmosphere.
Its precise appearance depends on the amount of dust in the atmosphere: following the eruption of Mount Pinatubo in 1992, which released large amounts of volcanic ash, the eclipsed Moon was nearly invisible.
As the Earth has not had a major eruption for some years "we can expect an impressive sight", said Ian Morison of the University of Manchester's Jodrell Bank Observatory...

Such an eclipse described in the Bible as the Moon "turned to blood" helped scientists to fix the date of the Crucifixion as Friday, April 3, AD 33."

Mikal--Looking for portents? This eclipse should put on a special show if clouds don't obscure it.
Historic correlations with astronomical events are
often called 'portents' or 'omens'.
But this eclipse may also herald a marvel.

@ Mikal,

Totally "yellow press" journalism. Gold had gained over 13% in two months and gave back about half of those gains, and that brings its safe-haven status into question?

My Gawd, what claptrap! The shills are out in force, but then again, they are referring to the "losses" incurred by paper-gold holders much more so than physical advocates.

Re: "The shills are out in force"
- Think of the mastheads that many of the large papers around the world pride themselves on. The motto part, like "All the news that's fit to print" or the "Mission Statement": "Our purpose...", "We promise...", etc.
They should all at least contain this disclaimer: "May the shill be with you."

I particularly liked his absolute dismissal of the mainstream financial media. After all, what incentive do they have to publish the truth, when doing so will only crash the economy and send their advertisers fleeing?

And yes, the FOREX the unholy trinity of fractional resserve banking and trading.

And the bigger the bubble gets . . .

Golds Course 2/22/07
Stagflation is on the horizon. The stock market is vulnerable.

Gold will retrace until the middle of March.
Gold will then rebound.
Central Bankers cannot fix golds price.
Golds allure overrides its intrinsic value.

Suckers Rally 2/26/07
If gold doesn't fall, then there's a new paradigm. The drop in member commercial bank adjusted "free" legal reserves is unprecedented

Everything is copasetic. This retracement is identical to what happend on Black Monday 1987.

First, there is no one on this earth that understands money & central banking. That includes me.

But some people can lose money even if the get tommorrows WSJ today. Everyone pursues their own interests. And everybody has something important to say. I can't think of everything, so I like to read other peoples view points.

I gave you something worth billions. No one else understands, nor is aware of, or believes in the concept of monetary flows (MVt) And since I discovered it, I've never lost any money in gold nor in bonds in 30 + years. I'm not too good in oil, or currencies though.

I'll leave your sanctuary alone.

Just one more thing....

The transactions concept of money velocity (Vt) has its roots in Irving Fischer's equation of exchange (PT = MV), where (1) M equals the volume of means-of-payment money; (2) V, the rate of turnover of this money; (3) T, the volume of transactions units. The "econometric" people don't like the equation because it is impossible to calculate P and T. Presumably therefore the equation lacks validity. Actually the equation is a truism � to sell 100 bushels of wheat (T) at $4 a bushel (P) requires the exchange of $400 (M) once (V), or $200 twice, etc.

The real impact of monetary demand on the prices of goods and serves requires the analysis of "monetary flows", and the only valid velocity figure in calculating monetary flows is Vt. Income velocity (Vi) is a contrived figure (Vi = Nominal GDP/M). The product of MVI is obviously nominal GDP. So where does that leave us? In an economic sea without a rudder or an anchor. A rise in nominal GDP can be the result of (1) an increased rate of monetary flows (MVt) (which by definition the Keynesians have excluded from their analysis), (2) an increase in real GDP, (3) an increasing number of housewives selling their labor in the marketplace, etc. The income velocity approach obviously provides no tool by which we can dissect and explain the inflation process. Income velocity is used in the Fed's model, the model responsible for our roller coaster economy.

To the Keynesians, aggregate demand is nominal GDP, the demand for serves (human) and final goods. This concept excludes the common sense conclusion that the inflation process begins at the beginning (with raw material prices and processing costs at all stages of production) and continues through to the end.

Admittedly the data for Vt are flowed. So are nearly all economic statistics, but that does not preclude us from using them. An educated estimate is better than no estimate at all. For example, we know that the international balance of payments balances � debits equal credits, payments equal receipts, etc. The Department of Commerce statistics do not prove this, so in order to make their statistics balance, they put in an "errors and omission "balance figure. The triumph of good theory over inadequate facts.

The Fed first calculated deposit turnover in 1919. It reported weekly until 1941 (like M3, the series was also discontinued, in Oct. 1996). The figure "other banks�� was used until 1996. Prior to this revision Vt included all banks located in 232 SMSA's excluding N.Y. City. This was the best that could be done to eliminate the influence on prices of purely financial and speculative transactions. Obviously funds used for short selling do not contribute to a rise in prices. The Fed calculates these velocity figures by dividing the aggregate volume of debits of these banks against their demand deposits.

In calculating the flow of funds (MVt), I am assuming that the Vt figure calculated by the Fed is not only representative all commercial banks in the United States, but that the velocity of currency is the same as for demand deposits. Is this valid? Nobody knows. But we do know that to ignore the aggregate effect of money flows on prices is to ignore the inflation process. And to dismiss the concept of Vt by saying it is meaningless (that people can only spend their income once) is to ignore the fact that Vt is a function of three factors: (1) the number of transactions; (2) the prices of goods and services; (3) the volume of M. Inflation analysis cannot be limited to the volume of wages and salaries spent. To do so is to overlook the principal "engine" of inflation - which is of course, the volume of credit (new money) created by the Reserve and the commercial banks, plus the expenditure rate (velocity) of these funds. Also overlooked is the effect of the expenditure of the savings of the non-bank public on prices. The (MVt) figure encompasses the total effect of all these money flows.

Some people prefer the devil theory of inflation: "It's all OPEC's fault." This approach ignores the fact that the evidence of inflation is represented by actual prices in the marketplace. The administered prices of OPEC would not be the actual market prices were they not "validated" by (MVt)

@ Flow5,

Anyone "following the money" knows that the largest "royalty" paid any OPEC nation is 15% to the Saudis. The other 85% goes directly to the oil companies for their costs, logistics, and profit.

Filled up mike bike with premium yesterday for $3.26 /gal at the local cut-rate station. Now that the Oil Czars have experienced losses in the elections, they are not the least bit shy about gouging all the people who voted against their princes and princesses.

mikal,

I called and emailed every San Diego news outlet when the Amaranth story broke, to see who was covering the major losses by the County Employees Union Retirement Fund.

The excuse I got was "It doesn't affect enough of our viewers."

How many of their viewers are affected by the Circus Court proceedings on where Anna Nichole Smith's body is buried?

Major Claptrap and Infotainment!

Well, congratulations, you were right about the fall. You connect it to the fall in required reserves, if I got it right - as I recall, from about $209 bil to about $90 bil.

Your predictions were correct about gold setting up for a fall. Credit where credit is due.

Interesting that you said this corection will endure to mid-March.

Now, could you PLEASE explain - as if you were talking to a twelve-year-old - WHY money flows had to affect gold the way they did? And WHY bonds rallied?

I am genuinely interested, but somewhat slow on the uptake.

SIERRA

because it stands as the price-discovery market for all general forms of gold, the paper sellers in the gold futures pits are making it painless for those of us who are exiting the stock market and wanting to move into the better security of metal at this time.

thank you comex. and thanks also for all the other forms of paper gold that reduce the actual competition from ever reaching metal's doorstep. thank you!

and sincerely thank you forum for the education!

Ditto on what Sierra said.

Thank you for the amount of effort that you put into your posts.

PA

http://www.usagold.com/gold-price.htmlThe report indicated that jitters set in and gold was hit, along with other financial markets, triggered by the biggest drop in China's main stock index in a decade.

Now here's the key part. Reuters quoted Stephen Briggs, analyst at SGCIB, who said, "Sentiment toward gold is still bullish, what happened this week is a blip, it coincided with a period when gold needed a consolidation period."

Sentiment toward gold is still bullish,
what happened this week is a blip,
it coincided with a period when gold needed a consolidation period.


what happened this week is a blip...

it COINCIDED with a PERIOD when gold NEEDED a CONSOLIDATION period.

Period. Exclamation point.

. . . . . . . . . . . . .

And indeed, if you look at the page of charts at the URL above, focus especially on the long term charts -- the 1-yr, the 5-yr and the 20-yr charts -- and you'll see that there is NOTHING out of the ordinary about this latest price retracement; it fits in perfectly with the established pattern.


A burger and fries with a beer: $12.50

A gold British sovereign: $176

An accurate 'big picture' perspective: Priceless

R.

http://www.usagold.com/analysis/j-kosares-20061017.htmlGold market volatility: Has it changed the fundamental reasons for physical gold ownership?

(J. Kosares 10/17) -- Volatility in the gold market is here to stay. Thus far in 2006 gold has been as low as $525 and as high as $725, sometimes changing $50 or more in a single week.

Friday, October 13th's price rise of $12 marks the 50th day this year that gold has moved more than $10 in a single day in either direction.

By comparison, only nine days in all of 2005 showed moves of more than $10, and all nine occurred in the last three months of the year.

This essay offers one possible explanation for this erratic price movement related to the rapid growth of hedge funds and their investment tactics, and also speaks to the mounting systemic risk if these practices continue to proliferate...

^___(click URL to read the full text)___^

R.

I know there are reasons why the POG did what it did this week. But it's hard not to be a little blue about seeing it back below 650 again when it was on such a nice upward path! Well, I guess we just get to watch it start climbing up again. Here we come, 700... 800...

For options and futures for the the week the Commercials

in SIlver were net short 10000 contracts

in COpper were net short 1600 contracts

in GOld were net short 14000 contracts

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

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

FRIDAY Market Excerpts

Gold sold to raise cash for other market losses

March 2 (Reuters) -- The global flight from risk knocked gold and silver hard for a third straight day on Friday, with bullion falling below $640 an ounce for the first time in 1-1/2 months as funds and currency investors cashed out on precious metals to pay for losses in other markets.

Many investment funds were seen to have bought commodities, including gold, over the past month with the proceeds from stocks as Wall Street reached record highs last month.

The COMEX April gold futures contract settled down $21.00, or 3.2 percent, at $644.10, after bottoming at $641.30, a 1-1/2-month low. It hit a session high of $668.20.

Carry trades, in which investors use low-yielding currencies like the yen as a cheap source of funds to buy higher-yielding currencies and assets, were largely to blame for Friday's sell-out in gold futures, analysts said.

This is because the yen rose to an 11-week high versus the dollar, and currency traders needed to close out their positions in gold futures to unwind bets on riskier assets that were financed by borrowing the Japanese currency.

"It seems that traders that are in the carry trade are obviously continuing their mass exodus. The money is coming out of gold and silver, mostly futures, where many of the carry traders have used gold and silver to park some of their carry trade profits," said Phil Flynn, vice president and senior market analyst at Alaron Trading.

James Steel, analyst at HSBC, said that general weakness in the emerging markets was a big factor in gold's decline. "Near term, I am still a little bearish. But I think it's going to be fundamentally very attractive quite soon. We will have to see how much further the correction has got to go."

Gold is often used by investors as a safe haven in times of financial uncertainties, but analysts said that this time funds opted for cash and to pay off losses because of the equities rout.

"It's one thing for people to run around and say it's a great diversifier and a safe haven to all the risks. But the fact is, when things start going bad, people tend to liquidate their gold holdings in order to pay for the bad stuff," said Bernard Hunter, director of precious metals at ScotiaMocatta.

"When equity markets start going down badly in particular, and people start getting calls for margins, gold seems to be one of the first things that people liquidate in order to raise cash to pay for losses on other products," Hunter said.

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

http://news.yahoo.com/s/afp/20070302/bs_afp/useconomystocksWASHINGTON (AFP) - US Treasury Secretary Henry Paulson said Friday that the global and US economies were "strong" and that volatility is a facet of stock markets following heavy losses on Wall Street.

Paulson, in an interview with National Public Radio, said the US economy was shifting gears into a more sustainable pace of growth.

He spoke as a fresh wave of selling hit Wall Street Friday afternoon as economic concerns resurfaced and investors retrenched ahead of the weekend break.

It marked the third day of losses in the past four sessions and followed Tuesday's global stock rout which triggered the worst slump in US shares since the aftermath of the September 11, 2001 terror attacks.

The Dow Jones Industrial Average closed down a hefty 120.24 points as investors remained nervous over US economic growth.

^___(from url)___^

The lesson here is that metal volatility is not unique. Stock investors are feeling some pinches, too.

R.

321gold.comComatose, I think this week's gold COT report is highly misleading. Let me explain. Thru Tuesday the Commercial total net shorts stood at -194,000.(321Gold Hot COTs)
Normally that would be a signpost showing the trade feels a market down turn is iminent(but not). It takes weeks for them to build up their position. The net Big speculators (read hedge funds) added 10,600 contracts for a total of +149,000.
The worrying part is the trade had perfect cover story by the Tuesday delayed statistics which is always case. Wed thru Friday the Comex traded 353,000 contracts (very large volume).The POG ranged on those days $680 down to a close of $642 almost a $40.
My point is these Commercials buy on dips and sell rallies and it is virtually impossible that their selling continued thru Wed-Fri. In my experience a 3 day volume move like that would generate anywhere from 10,000 to 20,000 contracts being covered each day. This would drop net shorts to aproximately to -140,000. The inclusion of next Monday & Tuesday's figures could include (assuming the market is lower and hedge funds sell as they always do on selloffs)an additional 20,000 to 40,000 lower shorts to the 100,000 total net short area.
The Commercials have about a 70,000 fixed(never below) short hedge positions for miner's (this figure has been relatively constant lately). This would mean that with an additional covering of 30-50,000 shorts Wed-Fri next the POG correction could culminate. But from what price everyone is asking?
Tradionally, POG stops at about the 200 day EMA(expotential moving average) or somewhere in between the 200 & 300EMAs.
The 200EMA is currently $620 & the 300EMA at $600. I feel somewhere in between POG will bottom $610-$615.
The RSI should be 35 or below(under 30 best), a MacD at -0-to -5 area,a CCI -300 to -400, an ROC -15 to -20, and most importantly an Aroons # should be near -95 to -100( -100 is best). So far the indicators have dropped nicely towards those targets./Peter

http://www.cnbc.com/id/17425026In an interview with National Public Radio, U.S. Treasury Secretary Henry Paulson said,

"For at least as long as I have been looking at markets, there is volatility in markets."

"Markets at any one time don't necessarily reflect the economic fundamentals in markets - certainly you don't move in a straight line one way or the other forever."

"So as long as you have markets, you're going to have volatility."

Paulson said the United States was "really pressing" China to move forward with financial market reforms to enable markets to determine the valuation of the yuan currency.

"We would like their currency to appreciate. We would like it to more adequately reflect the economic fundamentals."

^___(from url)___^

Do you REALLY want to be holding dollars as your long-term form of savings when U.S. monetary authorities are openly and actively pressing for the dollar to beceome relatively weaker?

Tangibles are where it's at. Choose gold. As a reliable source of ready, liquid funds, this week it is simply doing its job for those wrong-footed folks that are being massively squeezed for cash from one direction or another.

Randy, MK or Admin,

I want to make that I don't break a forum rule.

His graph this week puts it all in perspective.

Please advise.

PA

Wow,

Great weekend to plan my gold purchases...it's a deal!!

Take this oppertunity when this is low to stock up!

GF

Very frankly, I'm embarrassed to admit that I really don't know. In all things, it's ultimately MK's call. Maybe he's nearby and can chime in.

R.

Are you watching the POG & POS?

The "insiders" are really on a roll this week.

Sooner or later, their transaction will be in the "light".

Talk about a buying oppurtunity!!!

SF

http://news.goldseek.com/Grandich/1172872793.php Thanks for the GATA dispatch linking to Peter Grandich
Grandich Letter Special Alert - Goldseek - 02-02-07 4 pm ET

http://www.jsmineset.comChris Powell and myself are not the only ones that
value the opinions, advice and humor of James Sinclair.
I must say he is one of the few that can approach gold and relevant world events objectively, from multiple perspectives and disciplines, and articulate it freely, clearly and casually.
With such fresh developments an essentially daily routine
it frames his unique approach to gold commentary and it's very special place in a fast-changing world.
"Market Summary", gold and silver analysis, currencies, and much more (even linked through a GATA dispatch Friday): http://www.jsmineset.com

I said JS has an "objective approach". I did forget to add that sometimes he is subjective- I don't agree with everything JS writes or speaks when he appears on the tele(such as the Bloomberg tv interview), on radio, etc.
Over time though, our views have merged like many bulls
and web surfers, lurkers, posters, chatters etc.
In this day and age, as Peter Schiff just recently commented, there has been information evolutions, internet revolutions and communication transfers unprecedented and unstoppable.
As difficult as it is for us all to come to terms with, everyone must have their own
unique, completely subjective vantage point from which to assess the world and it's
most puzzling aspects, such as the gold market- so that the seed of our lives remain vibrant and fresh, not barren and infertile- within the mutual parameters of objectivity, this place we call ego, self, me.
Subject or object- which comes first?
Neither and both.
"There is nothing new under the sun."
In the final analysis, we are one. All things go out from HIM and return thereto.

http://news.yahoo.com/s/nm/20070303/pl_nm/bush_veterans_dc Army secretary removed amid veterans' scandal
Kristin Roberts - Reuters - Feb 02, 2007 Yahoo! News
The reputation of the dollar takes another blow

http://news.bbc.co.uk/1/hi/sci/tech/6411991.stm Eclipse set to be 'best in years' | BBC NEWS | Science/Nature | March 2, 2007
Details such as when, where the best view is seen(map included) & stages of eclipse.

http://www.cnn.com/2007/TECH/space/03/02/lunar.eclipse.ap/index.html?eref=rss_world Total lunar eclipse Saturday night - CNN.com - Mar 02, 07
A short one mainly for the N.American experience, with times in EST and other specifics. Enjoy.

http://www.bloomberg.com/apps/news?pid=20601109&sid=azrxhCZbHMLk&refer=exclusiveGoldman Sachs, Morgan Stanley, Merril Lynch Almost 'Junk' Their Own Traders Say | Bloomberg.com: Exclusive - March 02

Best viewing is a couple hours east of the GMT time zone, so most of the US will miss this. Should be quite nice in Rome or Athens.

It occurs from Noon to 4PM PST.

"Go EAST, young man." ;)

http://www.msnbc.msn.com/id/17424866/ U.S. investors, meet the rest of the world - Stocks & Economy - MSNBC.com - AP - March 2, 2007
This article advocates for, or at least expects Fed easing, lower interest rates as a means of supporting the stock markets.
But in closing, it maintains that the yen carry had a large role in the global stock selloff and that the yen will continue to rise and the dollar to fall.
So lowering rates wouldn't work for stocks either way.
A catch 22 right under the author's nose.

http://en.wikipedia.org/wiki/Lunar_eclipseIt is not commonly realised, but there are always at least two lunar eclipses every year, in contrast to solar eclipses, that are relatively uncommon.

Most lunar eclipses are "partial", but the one tonight will be total. They can only be viewed from the night hemisphere of the Earth; except for the comparitively rare selenehelion events (see link).

Nothing to do with gold, of course, except for the Moon's colour...

Cheers

:-)

the junior sector held up considerably better
than the road more traveled......... this week

that is very encouraging .....

indicating to me that this business is a blip

Hopefully the bargainhunters with fresh (equity) cash will find gold and silver irresistable come Monday morning

http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&b=3&g=0&id=p26821412816I might be trying to sound too positive , but the divergence and discrepancy indicates to me , we might have gotten a little overdone on the down side in silver......

Hope springs eternal from the fountain of hope inside and the endorphins in my brain that rally forth therefrom

i will be buying more silver some day ; two road diverged in a yellow wood , and I took the one less traveled by ...

Do you think that Robert Frost was a GOLD BUG TOO......

perhaps yellow is a reference in symbolism .......to
GOLD ........

GOOD WEEKEND TO ALL

163.9 86.1 0.19 -0.09 1998-12-01 6.72
164.3 88.5 0.29 0.21 1999-01-01 6.79
164.5 83.4 0.00 0.03 1999-02-01 6.81
165.0 83.0 -0.17 -0.08 1999-03-01 7.04
166.2 82.6 0.07 -0.02 1999-04-01 6.92
166.2 85.4 0.33 0.10 1999-05-01 7.15
166.2 84.7 0.18 0.00 1999-06-01 7.55
166.7 82.9 0.13 -0.04 1999-07-01 7.63
167.1 82.2 -0.15 -0.10 1999-08-01 7.94
167.9 87.0 0.09 0.15 1999-09-01 7.82
168.2 89.0 0.05 0.14 1999-10-01 7.85
168.3 100.7 1.73 0.50 1999-11-01 7.74
168.3 115.4 3.24 1.09 1999-12-01 7.91
168.8 98.1 1.54 0.62 2000-01-01 8.21
169.8 82.2 -0.32 -0.08 2000-02-01 8.33
171.2 80.4 -0.43 -0.22 2000-03-01 8.24
171.3 81.6 -0.13 -0.08 2000-04-01 8.15
171.5 84.4 0.21 -0.01 2000-05-01 8.52
172.4 83.4 -0.36 0.06 2000-06-01 8.29
172.8 83.7 -0.53 0.07 2000-07-01 8.15
172.8 82.6 -1.81 -0.01 2000-08-01 8.03
173.7 83.1 -3.23 0.06 2000-09-01 7.91
174.0 82.4 -1.56 -0.05 2000-10-01 7.80
174.1 84.5 0.22 -0.07 2000-11-01 7.75
174.0 85.9 0.55 -0.11 2000-12-01 7.38
175.1 87.2 0.56 0.16 2001-01-01 7.03
175.8 80.7 -0.37 -0.10 2001-02-01 7.05
176.2 80.1 -0.34 -0.11 2001-03-01 6.95
176.9 80.5 -0.33 -0.21 2001-04-01 7.08
177.7 83.8 0.13 -0.04 2001-05-01 7.15
178.0 82.8 -0.03 -0.01 2001-06-01 7.16
177.5 84.2 0.18 0.08 2001-07-01 7.13
177.5 83.2 -0.13 -0.16 2001-08-01 6.95
178.3 105.1 1.92 0.67 2001-09-01 6.82
177.7 90.4 0.32 -0.43 2001-10-01 6.62
177.4 86.8 0.61 -1.19 2001-11-01 6.66
176.7 89.5 0.95 -0.36 2001-12-01 7.07
177.1 91.7 1.13 0.40 2002-01-01 7.00
177.8 87.8 0.40 0.31 2002-02-01 6.89
178.8 86.2 0.35 0.19 2002-03-01 7.01
179.8 87.1 0.28 0.11 2002-04-01 6.99
179.8 86.9 0.37 0.14 2002-05-01 6.81
179.9 85.5 -1.95 0.07 2002-06-01 6.65
180.1 86.2 -0.42 0.15 2002-07-01 6.49
180.7 85.8 -0.09 0.11 2002-08-01 6.29
181.0 87.9 -0.16 0.23 2002-09-01 6.09
181.3 88.7 -0.30 0.18 2002-10-01 6.11
181.3 90.4 0.26 0.19 2002-11-01 6.07
180.9 93.6 0.74 0.27 2002-12-01 6.05
181.7 94.1 0.71 0.56 2003-01-01 5.92
183.1 90.4 0.36 0.43 2003-02-01 5.84
184.2 89.6 0.41 0.38 2003-03-01 5.75
183.8 91.0 0.48 0.30 2003-04-01 5.81
183.5 91.8 0.60 0.38 2003-05-01 5.48
183.7 91.3 0.34 0.30 2003-06-01 5.23
183.9 94.0 0.53 0.45 2003-07-01 5.63
184.6 95.1 0.47 -0.41 2003-08-01 6.26
185.2 95.3 0.17 0.21 2003-09-01 6.15
185.0 94.4 0.03 0.32 2003-10-01 5.95
184.5 95.7 0.52 0.26 2003-11-01 5.93
184.3 96.8 0.72 0.21 2003-12-01 5.88
185.2 97.7 0.67 0.41 2004-01-01 5.74
186.2 94.1 0.23 0.33 2004-02-01 5.64
187.4 93.9 0.25 0.28 2004-03-01 5.45
188.0 95.4 0.14 0.36 2004-04-01 5.83
189.1 95.8 0.07 0.43 2004-05-01 6.27
189.7 96.2 0.09 0.42 2004-06-01 6.29
189.4 95.7 0.12 0.41 2004-07-01 6.06
189.5 95.2 -0.05 0.30 2004-08-01 5.87
189.9 98.4 0.16 0.41 2004-09-01 5.75
190.9 96.1 -0.16 0.24 2004-10-01 5.72
191.0 97.1 0.30 0.14 2004-11-01 5.73
190.3 96.9 0.30 0.12 2004-12-01 5.75
190.7 99.7 0.43 0.39 2005-01-01 5.71
191.8 96.0 0.01 0.26 2005-02-01 5.63
193.3 95.0 -0.13 0.17 2005-03-01 5.93
194.6 95.7 0.01 0.16 2005-04-01 5.86
194.4 94.6 -0.05 0.14 2005-05-01 5.72
194.5 95.5 -0.30 0.06 2005-06-01 5.58
195.4 95.5 -0.06 0.01 2005-07-01 5.70
196.4 94.8 -0.23 -0.02 2005-08-01 5.82
198.8 97.5 0.06 0.13 2005-09-01 5.77
199.2 95.8 -0.38 0.01 2005-10-01 6.07
197.6 97.1 0.12 0.01 2005-11-01 6.33
196.8 97.4 0.24 -0.01 2005-12-01 6.27
198.3 101.5 0.58 0.31 2006-01-01 6.15
198.7 95.0 0.04 0.05 2006-02-01 6.25
199.8 93.5 -0.20 -0.08 2006-03-01 6.32
201.5 93.8 -0.17 -0.08 2006-04-01 6.51
202.5 94.5 -0.03 -0.07 2006-05-01 6.60
202.9 95.2 -0.23 -0.02 2006-06-01 6.68
203.5 94.8 -0.11 -0.02 2006-07-01 6.76
203.9 93.8 -0.33 -0.19 2006-08-01 6.52
202.9 94.7 -0.27 -0.06 2006-09-01 6.40
201.8 93.0 -0.85 -0.17 2006-10-01 6.36
201.5 93.6 -0.14 -0.14 2006-11-01 6.24
201.8 95.7 0.22 -0.16 2006-12-01 5.32
202.4 97.6 0.38 0.07 2007-01-01 6.22
90.9 -0.36 -0.17

http://www.cbc.ca/canada/story/2007/03/02/truckingrules.htmlA harbinger of things to come?

@ Flow5,

Do you have labels for the columns of reserve data you posted? I can guess a couple of them, but I often guess wrong.

Sorry, posting the numbers, squeezes the data. The examples are not comprehensive, just some -- turning points.

(1) The stock market rebounded in Oct. 2002. Coinciding with the rebound was a turn in the rate of change (roc) in (Monetary Flows (MVt); for all historical purposes, debits corroborate -- "Free" Legal Reserves). They are symmetrical. I can't explain the lags, it's just an observation, but they've been constant since 1919.

I originated the roc's, but not the theory. No one else uses the info. And if you know Joseph Granville, of the Granville letter, you might remember in Sept. 1981, his on-balance-volume data, were set to register a market bottom, but so many subsribers anticipated this, that they bought into the market and prevented his prediction from coming true. The lesson is, you can't tell everyone the gospel, or it will stop working.

(2) The stock markets top in the first quarter of 2000 conincided with a +3.24 (roc) in Dec. 1999, which subsequently fell to -.32 in Feb 2000. Now that's an historic reversal!

(3) In Oct. 2002, the stock market hit a bottom. "Free" Legal Reserves (roc) reversed from -30 to a +26 beginning in Oct. 2002 and never looked back. That's not a conicidence. That's called a (roc) of real money in excess of real inflation - CPI, etc.

(4) When Bernanke was appointed Chairman, he initiated a tightening process. There was a succession negative real GDP (roc's) from Feb. 2006 until Dec. 2006, but inflation persisted, and the Fed was still trying to wring inflation out up until Jan. 2007. That was the motivation for sopping up reserves (the largest decline in history). Bernanke wouldn't have had a problem, but his technical staff still adhere's to the fallacious real bills doctrine.

(5) Black Monday in 1987 was the direct result of the fed soaking up reserves. Reserves declined at their steepest rate since 1915.

The (roc's) for both real GDP & inflation reversed to the downside in Feb. 2007.

(6) Bonds turned around in July 2006, a reflection of the fed tightening. Tightening reserves raises long-term rates in the short run, but lowers long-term rates in the long-run.

(7) This year, Feb. 2007, reserves declined at their sharpest rate ever. The Fed's staff, which didn't understand "Black Money" made the same mistake this year. The market decline in China was the direct result of Bernanke's policies. I love him. He's a sly dog.

And you can't always use the numbers because of changes in reserve requirements and changes in assets eligible for reserve ratios. And so it is obvious no one at the Fed, no professional economist, and no university professor has caught on.

@ FLOW5,

I understand about squeezing the data when moving from one application to another, but what does each column of data represent? There looks to be about 4 or 5 columns there of pure numbers with NO LABELS.

Please elaborate.

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

http://www.iol.co.za/index.php?set_id=1&click_id=84&art_id=nw20070302140957397C670878Harare - Zimbabwe's gold mining companies have been pushed to the brink of collapse due to a fixed exchange rate and soaring production costs, a leading gold producer said on Friday.

Miners sell gold to the Reserve Bank at ZIM$16 000 per gram, which is about $64 (about R470) at the official exchange rate...

The Zimbabwe dollar is officially pegged at ZIM$250 against the US dollar, but trades more than 30 times weaker on the black market, while the ZIM$16 000 per gramme price for gold has been fixed at current levels for five months during which inflation has risen by almost 400 percent.

...a Zimbabwe Stock Exchange listed mining company, warned in a statement to shareholders that the industry could no longer sustain operations in the face of rising costs and falling revenues.

"Without a realistic increase implemented shortly, this company, in fact, the whole gold mining industry in Zimbabwe, faces imminent collapse," FalGold chairperson Gary Perotti said in the statement. "No business can sustain an environment where rapidly increasing costs are matched against fixed revenue."

...Several mines have closed amid a worsening business environment characterised by exchange rate problems, inflation at almost 1 600 percent and serious foreign currency shortages that have made it difficult to import equipment...

Jitters over President Robert Mugabe government's plans to take control of foreign-owned mines have also seen limited exploration and mine development.

Mining output declined by 14.4 percent, while gold deliveries to the central bank were 18 percent down to just under 11 tonnes last year.

^___(from URL___^

Sending thanks once again to my friend, G, for this link to a highly instructive article. Read it at least twice, folks, and then make a decision to choose freely floating metal over mining shares and other market regime.

R.

http://www.gata.org/node/48791:41p ET Saturday, March 3, 2007

Dear Friend of GATA and Gold:

The U.S. Treasury Department this week announced that Secretary Henry Paulson will visit Asia next week. Here is Treasury's press release.

* * *

U.S. Treasury Department Press Release
Thursday, March 1, 2007

http://www.treas.gov/press/releases/hp291.htm

Treasury Secretary Paulson
to Visit Tokyo, Seoul, Beijing,
and Deliver Speech
in Shanghai Next Week

Treasury Secretary Henry M. Paulson Jr. will travel to Tokyo, Seoul, Beijing, and Shanghai next week to meet with government officials and local business leaders. The secretary will deliver a speech in Shanghai on March 8 at the Shanghai Futures Exchange.

The secretary will be in Tokyo on March 5-6 to hold bilateral meetings with Prime Minister Abe, Finance Minister Omi, Bank of Japan Governor Fukui, Minister for Economic and Fiscal Policy Ota, and Financial Services Minister Yamamoto, among others.

He will travel to Seoul on March 6, where he will hold bilateral meetings with President Roh, Deputy Prime Minister and Minister of Finance and Economy Kwon, and Trade Minister Kim.

He will meet with Vice Premier Wu Yi in Beijing on March 7 before going on to Shanghai. While in Shanghai, Secretary Paulson will meet with financial sector leaders and local government officials, and deliver a speech on Chinese financial markets reform on March 8.

* * *

GATA's friend Peter Berry imagines Secretary Paulson's remarks to the Asian officials this way:

To Prime Minister Abe and his colleagues in Japan: "Good job. Your profits are waiting as agreed. Now please weaken the yen again, as the unwinding of the yen carry trade is making us dizzy and I need to return to the United States with something positive."

To President Roh and his colleagues in South Korea: "We think that our rapprochement with your family members across the 38th Parallel will provide you excellent markets for your (over)production. (While our own markets freeze up and will be closing soon. Sorry about that)."

To Chinese Vice Premier Wu Yi and the apparatchiks in Shanghai: "This is win-win. With your help, we've succeeded in lowering the price of gold and obtaining scarce physical by shaking the GLD tree to the tune of more than 3 million ounces in the last week. No one in the West believes in the metals anymore, and we will continue to beat back the price as well as we can to meet your reasonable demands to exchange our paper and electronic credits for something tangible. And now, if you will allow my colleagues and me, we can rig your markets for you better even than you can for yourselves."

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

* * *

To subscribe to GATA's dispatches, go to:

http://www.gata.org/

http://www.marketwatch.com/news/story/fed-ready-act-if-financial/story.aspx?guid=%7B5289F407-DD28-429C-841F-688897A39CA7%7DWASHINGTON (MarketWatch) -- The Federal Reserve stands ready to lower interest rates if a financial crisis erupts, said Tim Geithner, the president of the New York Fed, on Wednesday.

"As always, central banks need to stand prepared to make appropriate monetary policy adjustments if changes in financial conditions would otherwise threaten the achievement of the goals of price stability and sustainable economic growth," Geithner said in a speech about liquidity in financial markets to a business group.

^___(from url)___^

Just gotta love that elastic money supply -- when the business climate and investments hit the skids, the Fed is not shy about sacrificing the value of the dollar in order to help refloat everyone's boats.

With unlimited waves of cash always looming on every horizon, a flood ever-ready to be unleashed, the wise person does not use the dollar for savings. He or she chooses gold -- because Mother Nature does NOTHING to sacrifice its value (that is, does NOT increase its supply) as the wayward monetary tides rolls the wreckage to and fro, buoyed as it all is on a sea of ever-devaluing dollars.

R.

But Towncrier, from your URL:

"Geithner said his remarks were general in nature and not related to "the specific conditions of the moment" where the stock prices plunged around the world."

Sounds like cold comfort.

Of course. God forbid that a Fed official ever provide anything more SPECIFICALLY relevant to a current event than "The Fed does not comment on current market events."

However, the general lesson to be generally gained about the Fed's general policy toward life in general is generally that the quantity of money in the system will be generally goosed (and its value generally sacrificed) whenever specific conditions generally warrant as guaged by a generally political assessment of conditions.

When this lesson is learned to the deepest fibre of your being, the only choice for savings becomes tangibles -- with gold chosen specifically as the liquid component of ones accumulation of wealth.

R.

No, I know. My post was tongue in cheek. I am not sure how Geithner expects anyone to believe "...his remarks were general in nature..."

Cpi, legal reserves, 10 month rate of change, 24 month rate of change, date - year, month, 30 year mortgage yield

http://research.stlouisfed.org/fred2/series/ADJRESN/123/5yrs?cs=Medium&crb=on

sometimes you don't want to swim upstream (if everyone else uses seasonally mal-adjusted data).

figure is not seasaonlly mal-adjusted.

...as well as this morning, a flood of press reports
appeared about Bernanke's speech last night.
Most of them were headlined with some variation of:
Bernanke says globalization is causing inflation
Some others were restatements from the past about "the good economy" or "Bernanke is satisfied".
This is little different than Geithner and the Fed circle's "achievement of the goals of price stability and sustainable economic growth", wielded in various settings as a universal, one size fits all slogan!
With GDP revisions after GNP revisions after original productivity measures, there is no semblance of concern
about the economy actually shrinking outside of an elite intelligentsia that know better and mostly don't live here.
Same with "price stability", which is no less a fiction in Switzerland or Japan or EU or Britain than the US of A.

Is actually 'after original growth and productivity
measures'. Both of these are fictions, and more are due out this coming week, among other things. Interesting also that these kinds of figures get played up and any other stats get little or no mention.
An article in Bloomberg this week made mention of the contrast between 'anecdotal evidence' and stats showing slowing vs. other reports and that Fed and investment decisions relied upon a resolution of this.

@ Flow5,

THANKS!

I would have guessed one or more of them wrong!

G'lox

While everyone loves to expound how decreased labor costs are the great benefit of Globalism, not a word is ever heard about how increased transport and security costs may offset or even exceed the savings generated.

As fuel prices rise drastically, the cost of transportation has dwarfed the cost of labor as a component of production and distribution.

Example, the $1 tennis shoes from China that still adorn US retail shelves at $100 or more contain much more than that $1 manufacturing cost in transportation, security, and marketing costs. I have no figures as to the precise comparison, but I am sure they would be interesting, if anyone does.

At what point does the rising transport and international security cost start to again favor local manufacturing?

The bulging Iraq war budget essentially puts a heavy toll on "raw materials" that is never amortized in any reports.

As Bucky Fuller once quipped (paraphrasing), "A society whose security and maintenance costs out-weigh its actual productivity, is experiencing regression, rather than progression."

How lucky are you?

I think the hidden truth is many of the big bankers and others in political power try keeping the poor class in that state is good for the economy...correct?

This may be a general idea and maybe even a broad thought, but, I do feel that some of the ingenious things that Mr. Bernanke says and dose and will YET do, will be in effect to knock down the world economies.

I think that when Mr. Greenspan commented last week on the idea that we might be headed for a recession was not to far off from the truth and I didn't hear Bernanke say it was incorrect.

I think depressions and recessions and high inflations are all cyclical. The goal is to keep enough people hungry who will work for peanuts and thus keep making the "excess" that many GLOBALLY GOBBLE UP!!

This is not just an American issue! It's a World Wide issue.

I think we will hit a recession and maybe even a depression!! Buckle down the hatches boys, it's going to be a rough ride. History repeats it's self right?

Happy Golden Weekend~

GF

This leprechaun has a wee pile of gold (physical) and I am feeling even more lucky knowing so!!

@ Gold Finger,

Try these on for size, courtesy of Kilo, posted 2-17-06

Money Masters Part 1:

http://www.propagandamatrix.com/multimedia/Money_Masters_Tape1_Part1_all.wmv

Money Masters Part 2:

http://www.propagandamatrix.com/multimedia/Money_Masters_Tape2_128KBps.wmv

The other really good one is Smitty's "Wizards of Money", which is a little older and has "made the rounds" of websites, so to speak. Haven't been able to find the original version lately.

They are both excellent primers to the point that "economics" is but a fiction designed to keep the same "privileged few" in power generation after generation.

http://www.lewrockwell.com/north/north512.html The Gold-Plated Sting by Gary North - March 3, 2007
The sting institutuionalized around the world by insider bankers/central bankers confiscated honest money permanently says Gary North.
In the U.S. he insists, it was because two lies gave us a government-guaranteed, gold plated, gold standard.
But I agree with him you can't get "something for nothing" forever.
Therefore, what lies ahead is not so much a multi-year bull market in gold( if such a market in gold really exists in the classic sense), but a new paradigm in the midst of, or the incipient stages of, or on the doorstep of implimentation. Simply, a paradigm shift is occurring as we speak.
The stable state of the global economies cannot survive relentless exponential debt growth coupled with derivative
growth and inevitable, progressive failure(starting now with MBS's, hedge funds, junk bonds)- precipitated by both flawed CB and gov't policy and current dependence on the fraud of leveraged, unbacked paper promises- CB interest rate and money supply decisions are being exposed as naked shorting of citizens' savings and leaving only months or perhaps weeks bfre large institutions and fund managers
reach the limit of confidence in the IMS and it's reserve model.
IMHO and NIA. Do your own due diligence and good luck.

Typo: before, NOT "bfre"

@ Gold Finger,

Two excellently researched treatises to that effect are:

Money Masters videos (linked by Kilo on 2-17-06)

and Smitty's "Wizards of Money", which has made the internet rounds, but landed I don't know where.

Both support the theory that "economics" as we experience it, is but a fiction designed to enable major political power to pass from generation to generation in the same bloodlines.

I thought the first one didn't make it.

- Department of Redundancy Department

Well TPTP sure beat us up the past couple of days.Yet I'm not worried about it. Nothing really has changed that I can see. This story is true for it happened today. My hot water heater gave up the ghost with a vengence. Not only did it stop heating but began to leak. What has this to do with GOLD? Hang on, I will get to it. Only after major frustration and the need to fix the problem does one see a coalation. Before I continue I would like to say if your have a plumber,electrician,car mechanic or carpenter for a friend they are like gold. I treat them with respect when they make house calls. But for me I always give it a try first and hope I do not do too much damage before I call in the calvary. If you are a do it your self type, you understand the learning curve and equate the education of gold is par with any trade. Lots of variables and even with my long trips to and from the supply house I find I learn something new each time. And so it is with gold as each retracement occurs we learn more about the markets.
My point is that when it all goes down will you have the time to repair it (Financial). This is just an inconveinence (Cold Showers) but a great motivation to get the job done.
Another good point is you have all the info at USAGOLD about Gold and you don't have to make many trips.
An admission that I did feel the hot water was cooling in the shower long before the incident.
The writing is on the wall. Like my hot water heater. Sooner or later the FED has got to do something! Doing nothing is not gonna make it.
Smile everyone ;0)

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

Well Good Knight, I think that is what it is all about.
One only has to recall the comment of Ford and especially Rockerfeller's comment about serfs, that you can see they don't give a damn and are Hell Bent to the New World Order.
You can see that more and more others in the backgroud(Like Kissenger) are brought back into the picture for advise. WHY? Do we not have any upcoming people who have newer ideas or are we staying the course. Refusing any new paths. Such is Greenspan. If he wanted to stay on scene then he should of held the job and not undermind Bernacke. If Paulson is running the show with the plunge protection team ,why do we have Bernacke? So it all comes down to Who Is Running The Show!

Gold Finger that is a Great Question but I am afarid I might run outside of the parameters of Forum Rules.

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

http://news.xinhuanet.com/english/2007-03/03/content_5795362.htm This could just as well be India, Taiwan, Turkey, Russia etc.
China Seeks More Channels to Use it's Foreign Exchange Reserves - ChinaView - Xinhua - March 3, 2007
Reserves "quintupling in the last five years" are "still growing".
China "is seeking MORE (emphasis mine)channels to use it's massive foreign exchange reserves, economists said" before the 12 day, annual meeting begins(today) of "the country's TOP political body".
This meeting closes in 12 days, so that puts them two weeks(approx) shy of the end of the fiscal year for many Asian nations,
and two weeks (approx.) from now.

There are times we post and we feel nobody is paying attention to what we write. I wanted to say I read your posts. Sometimes don't understand it, but read it the same as to one day I might catch on.
Topaz,melda laure, cometose,flow5,mikal Druid,kilo,AuSome,
Silver Fox,msiwantitall,Goldilox Thoreauly,Sierra Madra,Quixote PaperAlvalanche,Smiles45,Gold Finger.Black Blade, Gandalf the White, Waverider,and Belgian.

**** Sir M.K., Towncrier, Marketalk ****

There are a Noble Bunch ;0)

Come on your Lurkers and Newbies. Join the fun.
Slingshot---------<>

I happen to run across a link which involved our neighboring castle,as to WHO is looking at their posts. Lots of firms and people. I had to wonder why as we make up such a small percentage pertaining to gold. Surely if we are a small percentage, why would they have concern? And I am sure, as we are in only bullion, they have turned an eye towards our forum. While the media and market shrills downplay gold, it is odd that so many companies visit our sites. The mantra is gold is dead, and barbaric sounds aloud, while the undercurrent is to accumulate.
Strange indeed.
Slingshot----------<>

Your on the wire?
Slingshot-----<>

Don't know if your see George from Urbansurvival on the History channel but he may be on to something concerning 2012. But Bennie and the Fed, has electric boots, a mohair suit, and you read it in a magazine. Oh, Oh.
Bennie and the Fed. Has him Beat.
Slingshot---------<>

Good posts. Thanks for the info on GE site. I like to hear what's happening around the web. I wonder what the web bot Goldi visits said about the past week(did it predict any or all the goings on?).
Mother Goose was the name for an anonymous collection of folk nursery rhymes. One very short one is called The Crooked Sixpence. Mother's goosing the house of cards?

The Crooked Sixpence
There was a crooked man, and he went a crooked mile,
He found a crooked sixpence beside a crooked stile;
He bought a crooked cat, which caught a crooked mouse,
And they all lived together in a little crooked house.

Here's the plan (modus operendi, secret hidden agenda, code of honor):
If we get to the year 2012 and NOTHING happens(at all),
it's plan B, the Y2K routine- we make like we knew it all along and then predict IT happens a couple more years out, it'll keep us employed and the subjects happy. I assume you're going to be aboard. ;)

One of my problems is that I do not make the connection between pivitol points as fast as others. This financial game is hard for me as it gets more complex as the it progresses. This may be what scares those who are at a point to enter the gold arena. It is hard and I have been at this Forum for a few years. I am for the Small time investor for I am one.
Slingshot----------<>

...that anyone would like to read?

I am not sure other then I sometimes write for myself in a way of therapy and perhaps a form of venting.

Good? Bad?

I am not sure. I can understand many points of views and I do like the economic trivia and charts and graphs.

I try to stay clear of to may chat url's and write down what I may be feeling in regards to current economic times and how we are all being effected with this new globalization.

I think this is a new word for my generation. In the old days things were different. Now days so many other issues are at hand and I never realized what happens in India or China could have such a huge impact on me and others.

The working class are being stampeded away. Who's going to be left to provide for all the entitlements?

I am a hard working person. Self made and I push to be more innovating at what I do. I am pro fairness, but not complete socialization of our society. I feel that in this day it's extremely important to keep up and be prepared and keep that hot water FLOWing~

Cheers,
GF

One post at a time ;0)
Slingshot-----<>

I am going to make a statement.

I do not think they can fool us for long. That is those who are stating to think twice.
Slingshot-------<>

http://news.goldseek.com/DollarCollapse/1173024060.phpYup. You're staying ahead of the game, as hard as it is.
This is a good one, short and to the point:
Banks and Bubbles IV: Sudden Junk - John Rubino GoldSeek.com - March 4, 2007

We are not distant in our points of veiw and I find most Goldbugs are within a channnel which runs from doom and gloom to eurphoric. But a more realistic veiw may be from Hands On to Virtual Reality.
Slingshot------<>

You on the wire?
Slingshot-------<>

http://news.goldseek.com/GoldSeek/1173024300.php Re: "Benny and the Jets"
Benny and the Jets Hueys - Gary Tanashian - March 4, 2007 - GoldSeek

Yepper they are monitoring this site ;0)
Man was that fast.
Slingshot----------<>

Over the span that I have been at this site there has been a notable statement as to the age of our posters.
Sixty years plus? Well let me set the record straight to those WIPPER SNAPPERS.
Experience (OLD AGE) will overcome Skill and Youth.
Slingshot------Hahahaha

@ Slingshot,

I did catch George's appearance on the History Channel, but found the overall show as shallow as a lot of their shows on the ancient world.

The producers didn't do their homework very well, IMHO.

George did not embarrass himself, but there was no where near enough time alloted to explain the mechanics of the web bot project. The best explanation I've heard is from the inventor, Cliff, in a series of interviews with Alex Merklinger before Alex went "dark". The archives of those interviews can be found at:

http://www.mysteriesofthemind.com/archives.htm

While they tried to rally around the "doomsday scenarios" in many of the surviving ancient texts, they did not mention Neil Freer or any of the other folks who are doing some very interesting work to tie those ancient civilizations together, with some plausible theories on why certain themes appear in all the surviving manuscripts.

They also went off on a segment about flipping magnetic poles, and confused it with the effects of flipping geographic poles, NOT AT ALL the same thing. Then they brought up some yahoo's premise that crossing the Galactic plane might "flip" the atomic spin of all matter and destroy it. Whoo-weee! That's as silly as the assertion that toilets must flush clockwise below the equator and counter-clockwise above it.

I have to agree with Jim McCanney. Every time social balance deviates from the "bland", the doomsday prophets all start waving the Mayan or Vedic calender at us, looking for their 15 minutes of fame, and touting some pretty massive extrapolations of what we really "know" about any ancient civilizations.

But, it keeps the masses from "paying attention to the man behind the curtain" once again, so I imagine TPTB relish the "info-tainment" in true Marshall McLuhan style.

http://www.tradearabia.com/news/newsdetails.asp?Sn=INTBIZ&artid=119862 Just pulled this off MK's newswire. It's looks to be the same story Tanashian covered below.
But THE PHOTO!
A noose? A puppet string? A halo? ;) LOL Good night.

Picture is worth a thousand words, but preception much more.
Chow.
Slingshot--------<>

In my past posts I stated I wanted to meet some of the Great Posters on this Forum. Well, I can understand the reserve not to. But, you can even ask my wife, I have the strangest ability to meet people in the most Arkward circumstances. So one day, in a crowd or resturant or what ever,a word, name will prompt me to say. Hey Are you so and so?
What a nice day that will be.
Slingshot---------<>

Just got back from giving the g-daughter her first horse-riding lesson ...getting her instructed I mean ...wow, that "pirelli" (sp?) method sure is user friendly both for Horse and fledgeling rider ;-)

A while back the subject of the Price of Oil came up. We identified that, in fact there were approx 20 P's of O dependant on factors as diverse as crude quality, transport etc and the PRICE generally quoted (say Brent) was but a reflection of the overall market.
It takes some stopping and thinking about eh? ...but once you've done it, it's filed away as only mildly relevant in the scheme of things.
Mildly relevant largely because Oil is consumed as fast as it's pulled from the ground. (give or take)
The same basic process for price discovery is also applied to Gold and Silver except that a whole lot of different circumstances come into play.
SO DIFFERENT is it that it could be said that the Price of Gold is determined by, on one hand a group who doesn't possess gold supplying the ASK side of the arrangement ...and a group who doesn't want gold, coming into the market to provide the BID...
...and via this quaint little arrangement, they expect ME to value my Gold in Hand accordingly?

Ain't gonna happen at MY place ...and many thousands of other places elsewhere I'd imagine.

Nope, I don't have anything to say, just lurking by.

Good to hear from down under and your Grand daughters ride on a horse. Great beast they are and most intelligent.
I did have the priviledge to ride a working horse and had the most wonderful time,(terrifying) as to using the reigns and heels directing the animal. Ocala was her name and was most acute to each movement. There is nothing to discribe when man and beast act as one. Not your usual D*** A** Yankee.
Now to oil. there is nothing much more to say as the race to claim the resources that are finite Only the POG to POO.
Slingshot-------<>

http://www.galmarley.com/Chart_pages/currency_charts.htmThere was a time when I used to refer to "alt-currency" Gold ...where $PoG was a genuine proxy for the "others" namely currencies on the opposite side of DX.
As can be seen in the accompanying Charts, this is no longer the case as Gold NOW represents an alternative to ALL currencies.
We can rest assured this is but a means to an end compadre's ...not an end in itself.

Giddy-up aggie next week imo.

Nice to see your out there, Chime in when you want. But there must be something that is bugging you?
Slingshot----------;0)

"the Price of Gold is determined by, on one hand a group who doesn't possess gold supplying the ASK side of the arrangement ...and a group who doesn't want gold, coming into the market to provide the BID..."

Alton Brown would readily identify that as a recipe designed to serve up deliciously cheap prices for all comers savvy enough to dine on the metal.

To borrow the words of one of our greats... "Get you some."

R.

Gold 'enjoys' THE most perverse price discovery mechanism know to the modern marketplace.

Veritible "Good Eats" for the intelligent diner (-- to carry forward the A.B. theme).

Amen.

R.

Did I not center on oil and missed the whole message.
Slingshot-----<>

There are generally two types of poster GF. Those who can draw a bead from 3000yds and hit the bullseye with one shot ...then there's those who, although arguably equally adept in the end, prefer to use a 12 gauge from 25yds and blow the sucker to kingdom come.

The important thing imo is: just keep shootin 'till they don't shoot back!

Thank you. I'm the shotgun type.
Slingshot---------<>

No mate, I'd just used Oil as an example where market participants are (largely) suppliers and "demanders" whereas with Gold (particularly) no such parties are in evidence ...or not nearly in the same proportions.

Can you still have a weapon in OZ?
Slingy----<>

No ...or they make it real difficult, restricting you to target pistols, members of shooting clubs etc.
Of course, like all restrictions, it only applies to the honest types who willingly handed in their guns on request.

NZ doesn't have any restrictions as yet I'm told ...and there are still places in OZ where "the Law" hasn't quite caught up.

These places are like "Oases of Freedom" downunder slingy.

Posting-wise, I'm content to spray away in close too.

I am sorry to hear that your have major restrictions. I want to tell you over the years of my military service, I have no better comrade to be with than a Brit, Goofy Newfy or Aussie on Liberty. They just do not run from a fight. But on another accord you are peaceful people. I will not give up my guns. I will not give up my gold. I will not Give up my LIBERTY and there are 250 thousand gun owners in the USA that say the same. Wait till they call us TERRORIST.
Slingshot-----------<>

Sundeck and Cometose.
Slingshot-------<>

You da man ..........
Night owling it again .......
Sorry , I was bit late getting up ........
Enjoy your rest ......

As in all good cycle work a lot of FA is builds the base. Whith the world in an ever growing debt trap - in particular the Western world Chopper Ben may be forced to upon all spigots soon. All bets for a soft landing will be off by then - for the economy, the currency system crashing under the $'s de(bt)ad weight, taking every and all financial assets, mortgages and hedge funds down along with it.

Guess you all know what to do in the next few months, but read my friend's memo carefully and stay calm, cool and collected as in time who will care if he bought his bulllion
a little on the high side when it's again the only value of importance.
cb2
.....

"Here are my thoughts after Tuesday and Friday. We still believe that a GOLDEN opportunity awaits us at lower prices...the $450 level is theoretically doable...but watch $526 as this may be the bottom...to be safe and not too smart, anything under $500 is a must buy...who cares if it drops to the worst possible level foreseen of $410. At $3,000 an ounce we will not be arguing about 50 to 90 dollars on the buy price! The important thing will be...are we there at all?


The bull market is/was 52 months old....the cycle must complete by the end of April...the next two months are going to create financial turmoil if we are to arrive at under 8000 on the Dow in the stated timeframe. May, we see distress selling and the possibility of picking up the bargains.


While we are 70% liquid...the 30% are largely...about 29% in precious metals and base metal stocks...


So dust off your buy orders and wait patiently poised like a rattlesnake ready to pounce on its prey...


I understand that at Beranke Helicopters Inc they are getting the helicopters ready for takeoff full of those pieces of green paper...however, there are so many to load that takeoff is not expected momentarily...but in a few months' time. Yes as we predicted ...an inflationary depression...and Notley saw this in 1979 when he trained me...amazing insight!

....

This week has brought a big change to the markets...a very major turning point which cannot be ignored. We expected it and we have planned for it. It was no surprise to us.


As of last night, the OBVs on some stocks have turned very ugly...Yamana, Coeur d'Al�ne, Northern Dynasty...to name but three
The big drop in Yamana of 19.1 million shares last evening has certainly got the alarm bells ringing. Even Kinross went into a downturn OBV wise. Remember volume always precedes price.


It is for this reason that I have had certain misgivings about Granville's buy signal of 4 January...we did respect it and moved some funds back to the market but not anywhere near our commitment in May 2005 or November 2000 when we were virtually 100% long in the precious metals and commodity sectors.


Here Ian Notley's work provided invaluable insight into where we were on the cycle...an extension...always higher risk..to be followed by the D phase of the cycle...which can be a nasty down or a painful patience testing sideways movement...


But I have these several Niagara Falls type OBV charts to look at where several huge down days are causing me to ponder long and hard...that just maybe our price objectives on the downside will be achieved setting up the fabulous buying opportunity which many will miss because of the fear factor which will prevail at the moment of opportunity. Take note from our Chinese friends...CRISIS is made up of two symbols..."fear" and "opportunity" in their sign language...sage thinking!


A clear mind, independent and aloof from the daily noise wlll be important together with Notley's charts and continued input from Granville and Prechter.


There is a certain amount of divergent opinion at the moment among the three...Granville being bullish on the gold stocks, Notley and Prechter being somewhat more cautious and looking for some downside action here.


This is now where the sheep and the goats will separate...


We need wisdom, discernment and courage over the next few weeks (months) to ascertain the moment to buy...it is conceivable we first have a few days of rebound and then another thumping. The months of March and April look particularly difficult and probably we may see some extreme turbulence in both directions as the war between the bulls and the bears moves up to a final major pitched battle. The outcome we believe to be a Dow en route to below 11,000 and then below 8,000...so the bears will win.


However with Tuesday's breakdown now in place and yesterday showing further weakness, will there be a rebound? Again 1929 is useful history material...we first had the Dow break from 384 to 290, the rebound to 340 before the grand smash to 190...followed by a 6 month recovery to April 1930 and after that it was curtains for 95% of the market EXCEPT the gold and silver stocks.


So there is the picture at the moment...a real challenge to those of us who try and do our homework and dismiss the trivial excuses of the media who offer China as the reason for this meltdown...that is a woeful and painful and trite explanation to find a scapegoat for serious problems at the very heart of the financial system particularly in the USA.


Here liquidity and freedom from debt are going to be vital to the financial survival of many people as finally the hedge fund and mutual fund mentality meets the real world.


Long term we firmly believe and have not changed our stance...commodity based (particularly gold and silver) investments will be a great place to be. Canada promises to have a great future for the next five years...but first we have to cross this hurdle. For those who have read my recommended reading list then the near future will cause you no difficulty since you have read and studied for this precipitous moment in financial history. If you have not already read Prechter's "Conquer the crash" (published 2002) this would be a good time to take crash course in its contents"!

....

What a nice term. Now to finish the hot water heater. Night Owling ;0)
Slingshot------------<>

http://www.foreignaffairs.org/20060301faessay85204-p0/keir-a-lieber-daryl-g-press/the-rise-of-u-s-nuclear-primacy.htmlDuring the last 2 weeks, I have begun to change my -walk on the sunny side of the street- view of what possible end games the big boys have in mind.
To save you link time, one of the end games of the big boys is to have the US as the only nuke power. This link provides info on the actual state of china/russia nuke deterrent. Thier nuke forces would not survive a US limited first strike.
The game that really changed America from gold to fiat, and the founding of the fed, is being steered by 2 factors from the view of those boys, thier preplanned actions, and the -murphys law- that interrupts them, temporarily.

The Danish 20 Kroner coin arrived. It is beautiful! MK, Gandalf, thank you for hosting the contest and offering such a wonderful prize.

Thank you, I cannot elaborate on the Council on Foreign Relations position paper you linked.
Aside from the happy economy of words, a mere summary statement can be seen to be both salutary to the prevailing tone of the gold forum and most effective in rebuttal.
Neocon warmongering and isolationism in service of the military/security/industrial complex and it's affiliated illegal arms, drug and slave trade, cannot substitute for actual progress and enlightened governance in support of continuing the life of the universe and incraesing the good life of all lives.

http://news.goldseek.com/InternationalForecaster/1173024180.phpInternational Forecaster March 2007 (#1) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecast - Posted Sunday, 4 March 2007 |



Snips:

The nation's manufacturing sector, or what is left of it, slipped into recession over the past year, but our media, Wall Street, our government and corporate America somehow didn't notice it. Now we are told, after multiple revisions, that GDP growth in the third quarter of 2006 was 3% and in the fourth quarter 2.2%. The later only two weeks ago was revised from 2.6%, up to 3.5%. Obviously the government is either hopelessly incompetent or was lying. We defer to the latter. Our Commerce Department tells us orders for durable goods, like computers, vehicles, aircraft and factory machines, plunged almost 8%.



These factors add fuel to the fire as markets in Europe and Japan fell as the Chinese stock market plummeted some 10%. US markets fell 3 to 4 percent, the worst fall since 2003. This is significant because with all their funds the "Working Group on Financial Markets" could not arrest the downward tidal wave even with the help of the Fed, although they found time and money to again viciously attack gold and silver. Of course, the market problems were the result of a computer glitch and if you believe that we have a bridge for sale you should take a look at.



We are in a recession, a real recession and not only manufacturing is telling us that, but so are the credit and housing markets. We have been in recession for a year and few professionals and investors know it yet. Can they be that dumb? We do not think so. They are in denial. They do not want their money feast to end.



Bad numbers have been coming for six months, but with market manipulation the players figured the elitists could keep the game going indefinitely. Even though manufacturing is only 12-14% of GDP, if it is in recession it is problematic for the entire economy. We also have high home inventories and foreclosures and a housing slump. We see GDP falling three quarters in a row, which sets a trend, a downward trend. The Street is again betting that there is a 52% chance of an interest rate cut. Maybe, that is if the Fed wants the dollar to collapse. Foreigners are not going to roll Treasuries and agencies if US yields fall as other rates are rising in England, Europe and in other countries.



The housing problems are approaching a crisis that will play itself out over the next 2-1/2 years as we predicted so long ago. The economy is facing major risks and most people are oblivious to them or in denial. This is human nature and it is natural, but it does nothing to make the problem go away.



The cartel in spite of their recent success in knocking gold and silver lower again is losing power. Their behavior is blatant and that of someone disparate. The US Treasury is trying to control the unwinding and sale of US dollar positions and at the same time orchestrating a flight into Treasuries. This is bullish, especially when they have to use the access market to try to control gold. In their arrogance they want you to know they are screwing you and the world investing public. This is not the central banks of other countries, this is the go it alone now US Treasury and our Fed. This is not control � it is illusion of control by delusional people. This is their final act. We are about to become another Zimbabwe, so get ready for real hyperinflation as the Illuminati tries to keep the game going."

I have no faith in someone that can't even get their 800 number right.

With the exception of hyperinflation, all the "flations" are the consequence of "too much money chasing too few goods and services", or the opposite. Inflation represents a chronic "across-the-board" increase in prices, or, looking at the other side of the coin, depreciation in money. If the depreciation of money is the consequence of a loss of confidence in the credit worthiness of the government, we have hyperinflation. The ultimate hyperinflations result when the existing government is destroyed, making its currency worthless - a 100 percent depreciation. There are, of course, degrees of hyperinflation.

It is a truism that if the flow of money in the market place increases relative to the flow of goods and services offered for sale, prices on the average will rise. Therefore, to say that a cartel or monopoly that posts a higher administered price causes inflation has to be premised on the assumption that the monetary authorities respond to such price fixing practices by increasing the volume of money and/or the public responds by increasing the rate of flow (transactions velocity) of money. The same reasoning applies to increases in wages achieved through the monopoly powers of a union. These price increases will result in a transfer of purchasing power and wealth to the groups with dominant economic powers. The resulting price distortions will weaken and depress the economy, increasing unemployment and ultimately creating a deflationary effect.

If the response of the monetary authorities is to provide additional legal reserves to the banking system, resulting in an expansion of bank credit and the money supply, other prices will rise and the monopolistically created prices will be "validated". This obviously may lead to an administered price ---credit money spiral, and we have the core of chronic inflation. If the monetary authorities try to compromise the situation and reduce the rate of inflation, we end up with stagflation. But this is preferable to an all out monetary effort to create full employment irrespective of the inflationary effects. For if the rates of inflation increase, so will interest rates; and high interest rates alone are a sufficient factor to induce a severe recession or even a depression.

In other words, the powers of the Fed are limited. The solution to this problem is to eliminate, or sharply reduce the economic powers of monopolies, oligopolies and any other form of concentration of economic power. How to do this without the creation of an authoritarian state has yet to be discovered.

http://today.reuters.com/investing/worldmarkets.aspxThe Nikkei is in free fall at the open, the Aussie and Kiwi markets are following and the Hang Seng is expected to crumble at the open. Looks grim outta the gate.

Gold and Silver "portfolio insurance" is looking good about now even after the hedgies sell off last week to scrounge up cash to cover huge losses in the equities and mortgage securities markets.

As always, get outta debt and stay outta debt, stash enough emergency cash for several months' expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities.

- Black Blade

His predictions haven't been right either

He didn't make any money on his hunches that were in book form ......

only made money on his books ...........

Probably not an authority that one should take at his word ,because he didn't get results based on his VERBAL AFFIRMATIONS..

His talk in his books is the only medium through which he can make up for losses he sustained on his MISCALLS

http://www.nowandfutures.com/buscycle.htmbut look at 2007.15 on the graph...

The volume or velocity of money doesn't matter. What matters is that the human effort to produce whatever is used as money is equal to the value of the human effort it is traded for.

http://money.cnn.com/data/premarket/index.htmlU.S. market index futures are down sharply (especially compared to "fair value"). At the current levels we are looking at a continuance of a tumbling market. We might be looking at "Black Monday" unless "The President's Working Group on Financial Markets" can step in overnight and flood some liquidity into the markets. Right now it looks rather grim.

- Black Blade

RECESSION IS IMINENT!

Have a glorious tomorrow!

GF

The history of pegged exchange rates, is that eventually, they collapse. Far East countries, which are export dependent, must at some juncture, reverse their foreign exchange positions.

For the U.S., imported oil, combined with unilateral transfers of funds by the Federal government to foreigners, ensure perpetual mammoth trade deficits, and an inexorable decline in the exchange value of the dollar.

Inevitably, the declining exchange value of the dollar vis-'vis the major currencies, will increase the number of depreciating, unwanted U.S. dollars, and magnify our trade deficits. Ultimately, there will be fewer dollars to recycle globally (fewer imports), higher interest rates, and higher prices.

Articfox--yes, I follow Armstrong's work, and posted here a few days ago the info about the amazing call he made for a turning point on 2007.15, which came to Feb 27, the day the Dow crashed 400 points. I think his work is brilliant and should be followed. My posting elicited no comment at the time, perhaps because this isn't a stock site, but actually the cycle can be useful for perusers of this site. It can be used as a guidepost for entering and exiting precious metals, as Urban Survival once posited, I believe--this global business cycle. It would be a contrary play.

Holy toledo! What kind of drugs are these guys on?

http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml
Snippit:

CBS) When the stock market plunges like it did this week, everyone pays attention. The man you're about to meet says hardly anyone is paying attention to what really threatens our financial future. Like an Old Testament prophet, David Walker has been traveling the country, urging people to "wake up before it's too late."

But David Walker is no wild-eyed zealot. As Steve Kroft reports, David Walker is an accountant, the nation's top accountant to be exact, the comptroller general of the United States. He has totaled up our government's income, liabilities, and future obligations and concluded the numbers simply don't add up. And he's not alone. Its been called the "dirty little secret everyone in Washington knows" � a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.


Black Blade: Too bad this article is narrowly focussed. I would like him or the Treasury Sec. to discuss our national debt that now is in excess of $56 Trillion (on and off budget items). The last Treasury Sec. to spill the beans was Paul O'Neill, and he only did that to get back at the insiders who got him fired.

Well boys, hold on to your hats. We all know that the economic floor is made of wood, and it isinfested with termites. Now, the question becomes, does the s--t hit the fan this month, or as some well informed pundits believe, we only have a minor dip, and watch the dive in 6 to 8 months in the future...

One thing for sure, March is going to be an interesting month.

(Damn, this is so much better than any action packed adventure!!!)

Hope you are holding gold & silver.

Good luck & good fortune.

SF

http://finance.yahoo.com/intlindices?e=asia
Black Blade: Looks especially grim in Asian trade. "Red" across the board.

Hello Gold Bugs.....

How many points will the DOW loose tomorrow after it closes?

100 points?

200 points?

300 points?

Over 400 points?

I guess over 400 points!!

What's the prize you maybe wondering??

ANYONE WHO OWNS PHYSICAL GOLD WILL BE A WINNER!!

GET SUM NOW WHILE IT'S A DEAL!!

GF

http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2007-03-05T051223Z_01_T305852_RTRIDST_0_MARKETS-JAPAN-STOCKS-UPDATE-7.XML&rpc=66&type=qcnasnip:

"If New York continues to slide and the yen continues to strengthen at this pace, there is no bottom in sight for Japan," said Kirby Daley, a strategist at brokerage Fimat.

-Goldilox


"Falling, yes I am falling,

And she keeps calling . . . me back again."

The web bot report for the week came out today, and it is BLEAK!

An' they'll be a grabbin' anythin that gets jostled out o your nasty little pocketses.

Hmm... the flations? Well I suppose... yet when things get bumpy it often seems to me that the money becomes more reactive than resistive, and reactances can be negative... that is to say they often behave in non-newtonian fashion. Best to carry the battle to the enemy, with lots o green.

Fill the pot.

Remember that chart back about October 2006, showing how the stock market follows so closely the housing market, with a 12 month lag?

Maybe that lag is finally making itself felt.

Does anyone have that chart? Would be interesting to take a look at it now.

SIERRA

Nikkei now down 3.7%

Aiyee! Panic!

SIERRA

https://us.etrade.com/e/t/invest/globalstory?articleid=2816339snip:

SHANGHAI, March 5 (Reuters) - Chinese shares fell 3.5 percent by early afternoon trade on Monday, led by blue chips, as the market was hit by weakness on global markets and a cautious mood during the country's annual parliament session.

The Shanghai Composite Index was down 3.5 percent at 2,732.423 at 0526 GMT. Turnover in Shanghai A shares was a heavy 51.8 billion yuan ($6.7 billion) by midday.

Shanghai's fall was in line with a 3 percent drop in the Hong Kong benchmark index.

"The market was affected by weak global markets, including falls in Hong kong and Japan today," said analyst Yang Weicong at United Securities. "Also, the NPC session is a sensitive period as it brings many kinds of news -- both good and bad."

This year's meeting of the National People's Congress (NPC), China's parliament, kicked off on Monday.

Investors continued to sell financial stocks, which led a plunge in stocks last week.

https://us.etrade.com/e/t/invest/globalstory?articleid=2816338snip:

HONG KONG, March 5 (Reuters) - Short selling transactions
amounted to HK$2.01 billion by midsession on Monday, compared
with HK$1.26 billion at the same time on Friday, the Stock
Exchange of Hong Kong said.

A total of 181.08 million shares of 162 companies were sold
short.

-Goldilox

The caca is being "spread".

http://www.netdania.com/ChartApplet.asp?symbol=GBPUSDThe pound, which was threatening a 2:1 $ ratio not long ago, is also not fairing well.

It's back down under 1,93.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070305:MTFH13549_2007-03-05_06-11-53_T285432&type=comktNews&rpc=44
The sell off is accelerating. When the Mikkei closes for mid-session it should be interesting to see what the reaction is in the second daily trading session. So far it appears that a pervasive weakness exists in the Asian markets. The European markets appear set to open sharply lower and the US market futures are sharply off indicating a possible sharp drop in the opening minutes of trade on Wall Street.

- Black Blade

While global stock markets are in general decline, WEYERHAEUSER stock was going up.
Looks like somebody is expecting a higher demand for paper products. Ah ha ha ha ha ha ha ha ha ha ha ha

Best Wishes

Black Blade: The Nikkei was down 624 points at 1 a.m. & the Dow Jones futures slipped to minus 114. The world is definitely coming to an end. Looking even worse now.

In a word - "Grim"

CBS MarketWatch:

Hong Kong's Hang Seng Index was down 2.9% at 18,882.74. The Hang Seng China Enterprises Index, a gauge of Hong Kong-listed shares of mainland companies, tumbled 5.7% at 8,475.36.

China's Shanghai Composite Index reversed early gains to trade 3% lower at 2,744.71.

"I'm not upbeat about the market direction," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong. "The global markets have been moving higher over the past year without any pause, so we are now paying for it."

Tang said the Hang Seng Index could decline another 500 to 1,000 points in the short term, but is likely to trend lower until reaching the 17,000 level around mid-year.

"We advise clients to offload shares on any rebound, the market is moving lower," Tang said.

http://news.bbc.co.uk/2/hi/business/6396487.stmsnip:

In recent weeks, UK High Street banks have been announcing record profits. Are these figures to be criticised or welcomed?
Two commentators from opposite sides of the argument go head-to-head over the issue.

-Goldilox

Nothing new in this debate, but the fact that it headlines the BBC Business section speaks volumes.

http://news.bbc.co.uk/2/hi/business/6412391.stmsnip:

Lloyds TSB, the UK's fifth biggest bank, has said it is closing its call centre in Mumbai - but that back office work will still be outsourced to India.
Customer phone calls will now be answered in its 10 UK call centres and the numbers of branches made available.

Lloyds TSB said that calls had previously only been directed to Mumbai when its UK operators were busy.

It added an automated call-handling system had cut the number of callers who needed to speak to an operator.

This meant there was no need to continue to answer calls in its Indian call centre, which at its peak employed 600 people but now employs about 180 people.

The bank employs around 2,800 people in India, and staff at the call centre will be given new roles.

Lloyds TSB Group Union, which represents many staff at the bank, welcomed the move saying that outsourcing calls to India had proved "a costly failure".

-Goldilox

Unhappiness with international "assistance calls" is not limited to the high-tech world. Globalism is losing some of its "charm".

http://www.businessweek.com/the_thread/hotproperty/archives/2006/09/merrill_lynchs.htmlThat chart last Autumn...

http://www.netdania.com/ChartApplet.asp?symbol=USDJPYLooking at the yen strengthen vs the us dollar there are the occasional sudden +/- 0.50 yen surges but nothing really to indicate capitulation at this stage.

I don't know how long this carry trade has been going on (years ?) or how big it is, but the FX graph seems to indicate the current unwinding as moderately orderly.

One presumes that so much money has been made with this speculation over the years that even the move from 121.50 to 115.50 in 6 trading days is not worrying too many.

As more funds liquidate however the yen is forced upwards further squeezing the margins of those still onboard creating a potential capitulation scenario further down the track.

Perhaps the occasional sudden +/- 1.00 yen surge going forward will be evidence of the snow ball effect moving closer to capitulation.

http://www.netdania.com/ChartApplet.asp?symbol=USDJPY

http://www.themoneyblogs.com/millionairenow/my.blog/nahb-housing-market-index-and-the-sp-500-79-correlation.htmlSierra,

I think this may be the chart to which you refer (see link).

The S&P500 index currently sits at about the same level as it did back in November last year when this correlation was reported (by Sir Thoreauly, I think). But the S&P index is certainly headed in a direction that suggests that the correlation may be sustained a bit longer.

http://finance.yahoo.com/q/bc?s=%5EGSPC&t=1y

One must be cautious not to read too much into these charts...correlations do not necessarily imply hard and fast causal linkages.

Cheers

:-)

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

On Tuesday for the first time in modern history China became a world financial trendsetter. The Chinese stock markets declined (the Shanghai Composite Index fell 8.84% and the Shenzhen Composite Index fell 8.54%) and stock markets around the world fell like dominos.



That China is important to the world's economies and financial well-being should not have caught anyone by surprise. China has been credited, or accused, depending on your point of view, with the increase in commodity prices for several years now and the ascent of its vast population to middle class is supposedly going to convert hundreds of millions of investors all over the world into millionaires. So when China's stock markets fell, the world took notice.



The reason for the markets' fall was China's government's announcement the previous day of a top-level task force to clamp down on illegal activities in the securities markets. Chinese investors have been flocking to stocks hoping to get rich, just as North American and European investors have been snapping up anything to do with China hoping not to get left behind. Chinese capitalism is today's Wild Wild West where just about anything can and will happen, where for every greedy investor there is an appropriately constructed plan to part him from his money and now the government wants to put an end to it.



The Chinese banking system is rife with bad loans made to well-connected people who set up unprofitable businesses. Corporations borrowed money to build factories, offices and apartments, many of which are empty or operating at a loss. The boom in China's stock markets was, to some extent, also driven by debt, although I suspect it would be near impossible to figure out just how much of the speculation had been undertaken with borrowed money. When markets are debt-driven they are massively volatile both during the upswing, as an inordinate amount of money chases limited stocks, and during the down-cycle, as investors panic and fret about losing all they have and more, so it is not really surprising that China's stock markets took a plunge.



The only explanation for the contagion caused by China this week is that investors across the globe have entrusted their money to mutual fund and hedge fund managers that are gambling on the greater fool theory with their clients' capital. When the markets around the world fell in sympathy with China it illustrated loud and clear that many investors have no interest or faith in the companies they own; they are merely holding them in the hope of trading the stocks to another fool in the future.



According to the World Bank approximately one third of all of China's production is exported, and if you consider the flow through effect then perhaps more than half of China's economy is export dependent. As a bellwether, the USA being the world's largest economy and largest consumer is therefore far more indicative.



Unfortunately the United States is not in good shape. The latest from the Commerce Department is that durable goods orders fell 7.8% in January; the National Association of Realtors reported that January new home sales were down 4.3% from last year and the median sales price was down 3.1%; the Commerce Department revised gross domestic production for the last quarter of 2006 down to 2.2% from an earlier estimate of 3.5%; business spending fell 2.4% in the last quarter although consumers did their part by increasing their spending by 4.2% yet residential fixed investment fell 19.1%.



Consumer spending accounts for more than 75% of US economic activity and the US accounts for more than a third of all the economic activity in the world. The US consumer accounts for about 25% to 30% of global economic activity, meaning that if US consumer spending fell by only 5% there would be a 1.25% to 1.5% reduction in world-wide economic activity. There is no other single more important economic factor than the US consumer. Because the US consumer has been financing his spending with borrowed money generated mostly due to rising real estate values, we should look at the US real estate market for future guidance - not to the Chinese stock market.

The ultimate hyperinflations result when the existing government is destroyed, making its currency worthless - a 100 percent depreciation.


In the extreme, gold metal in hand has value for barter.

Does history speak to the fate of stocks that represent gold mines or metal during hyperinflation? Will companies survive the singularity and come out the other side re-valued in other currencies? I can find no precedent.

--------
$636.70
On another note, it is amazing how quiet this forum gets when we are taking a bath. If you came here for sage advice on timing this market you have my sympathy. If you are doing it with leverage, you have my condolences, I know that margin call really hurt.

For those of us with physical for cash this is an annoyance at worst or a huge opportunity if still liquid. Careful you aren't dashed on the rocks by the breakers while waiting for the tide.

Existing home sales fell 8.4% in 2006, the sharpest decline in home sales in 24 years. 30-year mortgage rates are still only at 6.14%, and so homes should be very affordable, but because of rising real estate values home buyers are battling to meet mortgage payments. Falling real estate prices have reduced some home values below their outstanding mortgages, making the homeowners prone to default on their mortgage payments. Nearly 6% of all sub-prime home loans were more than two months in arrears by the end of last year and first-year delinquency rates are up about 200% in little over two years.
Approximately 16% of all mortgages issued last year were to sub-prime borrowers and with falling real estate prices the money available to these borrowers is drying up. That will reduce demand for homes.
There is an index (part of the ABX family of indices) that tracks how much it costs to insure BBB-minus rated bonds backed by mortgages to sub-prime borrowers. When the index falls it means such mortgages cost more to insure, which in turn is a proxy for the risk and value of these mortgages (as risk increases, insurance increases and value decreases). The index is down almost 30% since the beginning of the year. More than 20 sub-prime lenders have closed shop after having to repurchase bad loans they originated.
Mortgage defaults are now the highest in five years and rising with many of the problems tracing back to adjustable rate mortgages - what a surprise! Mortgage lenders such as Bank of America and Citigroup are now trying to get borrowers with adjustable rate mortgage to switch to fixed rate mortgages. That's a smart move for both parties: the US budget deficit will eventually cause interest rates to rise to much higher levels. Some banks are now also allowing borrowers to sell their homes for less than the outstanding mortgage and then forgive the shortfall since it is often less costly and time consuming than foreclosing on the homes. The catch is that borrowers may find they have to pay income tax on the forgiven debt. Sales of homes for less than their outstanding mortgage debt increased by 25% during 2006 according to Bank of America.
Keep in mind that the increase in bad loans is broad based and is occurring during exceptionally strong economic conditions, at least if you believe the authorities and talking heads. US consumer confidence is still at a five year high indicating that the collapse of the US real estate market has not had a major effect on consumer spending yet. What is going to happen when consumer confidence finally does fade and economic growth does stall?
As more and more home owners get into financial trouble and more and more homes go on sale it puts downward pressure on house prices. Home prices fell in about half of all metropolitan areas during the fourth quarter of 2006. For the first time since the National Association of Realtors started recording home prices in 1979 home prices fell in the majority of the cities surveyed.
Home construction has fallen to its lowest level in ten years. Housing starts in January fell 14.3% and building permits fell 2.8%. Luxury home builder, Toll Brothers, reported a 67% decline in its last quarter's profit as it wrote down inventory. The company also lowered its earnings outlook for 2007 based on fewer orders and rising cancellations. The company's net orders are down 33% from a year earlier as it struggles with a 30% cancellation rate.
It's not just real estate loans that are going sour. Wells Fargo, the 4th largest bank in the US by market value, reported $726 million in net credit losses for the fourth quarter and most of these were concentrated in its auto-lending portfolio. Consumers are increasingly unable to pay for all those new cars they bought when the car companies were running specials to get rid of inventory. US Bancorp, the 6th largest bank, saw a 25% increase in charge-offs and predicted that writing off retail loans will continue to increase during 2007. These are by no means the only banks seeing an increase in loan defaults, merely an example of what is happening.
The problems don't end with autos and homes either - the economy is integrated. Home Depot expects earnings during 2007 to fall between 4% and 9% as it doesn't expect the residential and housing markets to improve during the year. Manufacturing output fell 0.7% in January with manufacturing capacity utilization at only 79.6%. Manufacturing of automobiles fell 6% in January and excluding autos, industrial production was still down 0.2% for the month.
Is this all not more worrisome than the pullback of an over-bought Chinese stock market?
The dollar lost about 2.5% against the yen during the week. I wrote about the yen carry trade and how, when it unwinds, it will cause the dollar to fall. Last month Japan raised its overnight interest rate from 0.25% to 0.5% and this is potentially far more significant than what happened in China this week. Higher Japanese interest rates will cause the yen to appreciate on foreign exchange markets and will put pressure on the yen carry trade. On Tuesday of this week the dollar recorded its largest decline versus the yen in over a year as investors sold dollars to buy yen.
It is somewhat incorrect to say that the dollar is falling since it is actually the yen that is rising. The dollar has been reasonably steady against most major currencies this week but the yen rose against almost all of them. I suspect that over time the yen will rise against most currencies and the dollar will fall against most currencies because much of the yen carry trade involves being long dollars and the US still has an enormous trade deficit that has to be addressed.
From my perspective as an investor primarily interested in gold, the events of the week were very interesting because the gold price in US dollars fell even though the dollar was down sharply against the yen.
Unlike the investors who panicked and sold this week, I was happy to see falling gold stocks. Share certificates are certificates of fractional ownership in a business and I only buy stocks of companies that I really want to own, so I don't mind if the share prices fall because it means that I can increase my ownership at a lower cost than before the decline. When I look at my portfolio and see a stock that I would not like to see fall in price I sell it immediately, before it has a chance to decline.
With gold and gold shares falling I am quite content to wait and see what happens. Nobody can predict the future so to sit and debate whether this is going to be a big decline, a long decline, a short decline, a non-event, is pointless. The markets are so emotionally driven and far removed from any sense of value that there is no telling what will happen or how long it will take. Fortunately, if the carnage is short lived then stock prices will soon recover and everyone will be happy. If the declines continue then we will find much better buying opportunities going forward and I'll be very happy.
At some point I think the US dollar is going to come under serious pressure and when that happens the dollar and the gold price will decouple, with the gold price rising and the dollar falling. I am actually hoping that the gold price continues to fall in the interim as it only means there will be more money to be made in the longer term.

Good points. That would also ascertain its value during, say, revolution, war, etc.

Watching Liz Clayman discuss a CNBC Alert entitled "Gold Losing 'Safe' Status."

This is over the top propaganda even for CNBC (and that's saying a lot).

They said that $700 gold is now out of the question. I guess that there is no need to worry with gold anymore. Time to take my ball and go home.

PA

looks like it is going into abatement

Imported oil, + U.S. foreign & domestic military policies will rapidly transform this country into one with the highest poverty rate in the world. The exchange value of the dollar will perpetually, inexorably, relentlessly, depreciate, to where the U.S. will have no foreign policy choices.

Besides, the world consumes 4,000 tons of gold per year, but mine production is 2,500.

They're so desperate for tv ad revenue, they're using sensationalism on top of infomercials.
But this isn't the first time they(or their guests) flipflopped either, and it won't be there last.
Good catch Paper Avalanche. We likes to see contrarian newses, we do! ;)

Yes, now we can cover our shorts whilst everyone thinks we're permabears. I'll meet you at the Hilton for dinner and cocktails at 2PM.

Our friends were up all night preparing their strategies and getting ready for market manipulation. They have gone to work placing long orders and avoiding a market crash. How many more times can they extract the rabbit from the hat? They really are good at what they do! One can breathe easier for the rest of the day.

Re: "One can breathe easier the rest of the day"
Tell that to the guy breathing down Hank Paulson's neck- the poor man has fled to Asia.
Re: "PPT and the PTB". I won't breathe a word of it to anyone, I promise. ;)

Did he get arrested again?

Thank you to both, for the chart - SnP vs. HOUSING lagged one year.

SnP still fat and happy, no problema!

SIERRA

@ PA,

Watching Liz Clayman discuss a CNBC Alert entitled "Gold Losing 'Safe' Status."

So Lizzie has graduated from being the on-screen cupcake to actually "analyzing" stories? I guess it helps to be married to the producer.

Contrary indicator?

But did you see Peter Schiff on with Mark Haynes again this morning? Did you see Haynes' face when Peter explained to the audience that the DOW has not been anywhere close to the 2000 peak when inflation is taken into account?

Schiff was on a roll today. His comments more than offset anything Clayman could bring to the table.

Meanwhile, what's up with spot gold and equity indexes tracking each other this morning? Too strange! There may well be a price conspiracy with respect to gold, but that doesn't explain everything we have seen in the last week or so.

- Survivor

Schiff crushed Mark Haines as he normally does. I find it remarkable that CNBC still has him on as a regular guest. You would think that they would rather have someone who is less convincing, articulate, fact based and certain of the inevitable so as not to upset the end goal of the infomercial.

I believe that you are correct that Schiff's piece more than offset the tripe about gold that followed.

PA

I mixed up Mark Haines with Haynes auto repair manuals. Oh well, I guess one bunch of nuts and broken parts is about the same as the next. :)

- Survivor

It seems to me that people are reading a lot more into what is really just run of the mill corrections in both stocks and bonds than they need to. The dynamics here haven't really changed except for one aspect -- the volatility in most of the markets. And by volatility I mean the yo-yo effect that you see on the charts. I see it only increasing going forward due to the concentration of too much capital into too few hands - a circumstance we discussed on these pages long before it became CNBC fashionable. Combine the volatility, financial engineering (huge structured derivatives' plays of all sorts including now property derivatives on the way) and with dollar woes, the markets are now inherently unstable by their very definition. (Note Sec Paulsen's description of markets over the weekend as being "volatile" by nature.)

Physical gold, through all of this, comes out a winner because sooner or later the investing public will turn to it out of frustration with standard markets.

First, its primary function in the portfolio remains a representation of stability, liquidity and enduring value in an increasingly uncertain and hostile market environment. No one, not even CNBC, can that away from gold though its opponents will take even the scantest opportunity to club it. That hasn't changed.

Second, even the correction we just went through adds up to an insignificant blip on the long term charts (this was the heart of Jonathan's analysis a couple of months ago) and there are those (like myself) who would view this it as a healthy sign for the future. Therefore, the growing ranks of gold owners is not likely to shrink noticeably anytime soon, no matter how much anti gold propaganda CNBC telecasts on a daily basis. (No one believes them anymore.)

The people who will get hurt in this are the speculators and leverage players who are going to find themselves subjected to much whipsawing in the future as the overall market volatility gains velocity -- to what end I don't think any of us really know at this time. If you don't have the capital to play a position, then stay away from it. Going forward, leverage will not be the way to riches, but to decreased wealth. One is reminded of the example of the Nightmare German inflation and what happened to speculators then. Don't forget after all was said and all their winnings counted (assuming there were any), even the adept 1920s German investor still ended up with an eroding, valueless currency.

For peace of mind and restful nights, stick with the physical, my fellow goldmeisters.

@ MK, all -

In addition to my Sculptor friend last week, I had a house painter and a retired mover asking me specifically about gold on Saturday. I think the shift in public thinking is beginning, although you are probably in the cat seat for analyzing that based on your "new accounts".

Interesting to me is that these are "savings" types, not the investment crowd.

... of people some bad news and immediately 80% of the gathering will dismiss you and not like what you say.
If you happen to be right, the other 20% will loathe you...

What a great truism - and then you just have to wait for the things to fall in place, the dust settles and pick up what's real in the mad scramble for liquidity to rescue whatever's left or underwater in your financial assets.

This time it's different is starting to get a little long in the tooth; Though it really is, at least in comparison to 1929, where people could still survive - barely - and the US was still a creditor nation. Well, yes today it's really different in every aspect.

In this context I've posted a note from a friend the other day and with the lack of response, I assume my contention is totally, if not politically correct.

That's it for now - cb2

PS: Cheers, Lady Waverider - J.Turk is a personal friend and his chart is as beautiful as MK's and I stronly believe the outcome will be even stratopheric. Just be careful in the next few month's but get all your reserve resources ready to employ once we hit way lower lows for the move - and then get ready for the ride of a lifetime. My opinion only!

Sorry, haven't seen your input.

So just a thought; This correction may be more severe than any we've witnessed in decades, what with the hedge funds scrambling to survive in this beginning nosedive, which IMHO is long from over.

Gold will ultimately be seen as real security instead of US and other bonds - as it seems a lot of scared investors are still running to a totally doomed safe haven. That'll change as the scramble for liquidity pauses to re-evaluate the situation and then they come to the only conclusion left ... Got'ta Have GOLD!

Best to youse and I'll back off again ... Just thought to give a li'l warning as BB has done as well - cb2

That's been the case ever since I can remember. People with a little wealth see gold as a form of savings that's not the dollar (or euro, or yen, etc). When I decided to make the theme of the first ABCs of Gold Investing "asset preservation," it was not a creative assumption on my part, or an attempt to convert people to that way of thinking. It's what our clients had been telling us for many years. So in a sense our clientele created the theme of the book.

In terms of the DJIA I agree with you. When you think about, we haven't seen a real correction in the Dow in many years. In fact, there is a case that can be made that this last upswing was really a bear market correction for stocks. I think the correction in gold, although it was sudden and strong, is in line with previous corrections along the road in this bull market - a correction in a bull market.

I totally agree with you:

...MK "In terms of the DJIA I agree with you. When you think about, we haven't seen a real correction in the Dow in many years. In fact, there is a case that can be made that this last upswing was really a bear market correction for stocks. I think the correction in gold, although it was sudden and strong, is in line with previous corrections along the road in this bull market - a correction in a bull market". ...

... Well, dear MK I sure do. In the short term we may have a problem as I've characterized as mad scramble for liquidity and that's not the end. What we're seeing is a mad scramble to the perceived security of bonds and even to the Dollar. If it wouldn't be so "terrifficly" outlandish - to "coin" a new phrase, as the new paradigms have become in tight supply - the severance from both the former safe harbours will surely do the trick.

... And yes, I'm with you on former corrections on PM gold markets - just go back to 1974 - that's where I think we are and it doesn't mean not to go on accumulating - it just means accelerate your acquisition on every downtick.

... And what would a few bucks more or less mean in A/FOA's scenario of 30.000 $/oz of Au. OK, since we're not there yet, I guess there's a big chance out there to even beat the oldtimers to their game and acquire reality at even better averages ...

Thanks and see you in a golden future (with some silver lining) ... cb2

http://www.melissadata.com/lists/ezlists/ezhomeowners.aspxFolks are starting to SELL THINGS to make their payments. This is the reverse from just last year when they could hold on to things as they went up and just rollover the debt and take cash out. In my neighboor last summer average selling price of a home 550k, this last month 435k. Things are collapsing fast, and much faster than most people realize. Rich folk don't feel it yet. You can check your zip code and monitor your neighboorhood on the attached website.

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=Provided we accept that PoG represents only a paper claim on Gold in the future, a clear pattern can be identified vis PoG and the Buck/Yield composite.
What we poor sad Goldphiles need to happen is for Bonds to sell-off without ratcheting Buck up "too much".

"Gold" nowadays simply can't exist in speech without a qualifier ...or better put, the term gold has become merely a qualifier (adjective) in itself.

Pathetic little buggers we are!

If they remade "Paint your Wagon", the opening scene with Lee Marvin uttering the word "Gold" would be totally different ...he'd now be saying: Gold-metal, No no, not stocks ...or April Contracts, not unallocated ...or for that matter allocated, not certificates ...real honest to goodness Gold in hand.
Welcome to the 21st century!

I think I'll rent it this weekend ...for old times sake!

http://stockcharts.com/h-sc/ui?s=$gold:$silver&p=D&b=5&g=0&id=0We're getting creamed here with the only positive being an almost complete retracement from 30-70 on the RSI without too much damage along the way.
It's still early days in March so I'd be not too keen to bail out on Aggie just yet.

@ Topaz,

TCM has been running PYW this month. Check the listings. I watched it a couple days ago, Partner.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=Without too much difficulty we can identify on the accompanying Chart, 5 times during '07 (so far) where $PoG and altDX have headed in different directions.
This is the signature of a Stage 2 GoldBull ...and we're due for another cracker separation real soon imo.
DX 90-92, $PoG 1000 here we come!
...and Aggie? ...you don't wanna know!

The MelissaData site referenced by below is an example of why we should always be careful to take data on the Internet with a grain of salt.

For my zip code, MelissaData shows that real estate prices have gone up by 465% since December 2006, and the average price is $446,000. Neither of these data points is even close.

Our real estate transactions and statistics are regularly posted in the local paper. For reasons driven by the local economy, prices are relatively stable and average prices are around $300,000.

There is no doubt the real estate and credit bubble is loosing gas rapidly in many areas, but MelissaData may not be the best place to learn the details about your area.

- Survivor

http://www.jsmineset.comHere is a small sampling of the many good comments Jim Sinclair and Monty Guild made on this and related subjects, since last week:
"What has turned gold into a fearful thing for the unthinking is threefold:

1)The unwinding of the Yen Carry Trade. This is a hot one. It assumes that major clients, hedge funds, have borrowed yen in order to buy gold thereby improving their leverage and profit on the long side. The leverage for floor traders, which is what most hedge funds get, is 95% credit. To improve 95% credit is a trick that borrowed yen will not even do for you. The long side is played to a degree by every black box, but that is about all needed to get a 25 to 35 year old schooled to hate gold, turning them into an enemy thereof. The last point is nobody has knowledge of the size of the so-called gold/yen/carry. Therefore it becomes the best of fear makers because like the expert in the field where there is no expert, they cannot be wrong.
2)The collapse of the Chinese gold demand interpolated from a regulator-engineered liquidation of speculation."

"Do you not realize the minute the false yen bull move ends, motivated by panicked carry trade shorts to the loan covering, that gold will parade right back up to and through $690?

Do you really believe a 7% growth in China is a debacle?"

"The answer is simple. As the momentum of the Yen upwards move slows, and internal indicators indicate so, then putting the yen for qualified speculators is rational.

The minute the up trend on the yen breaks down then the down trend on gold break out and up.

Review the inner working of the economic Gordian Knot tied and unmovable by economic management for political advantage by as many administrations as one can recall."


"Monty Guild's Commentary

As predicted by many, Venezuela's oil output is faltering under the wise and able leadership of Hugo Chavez. Today it was announced they are cutting production by 40,000 barrels a day at the famous Boscan field.

On another note, according to my wise friend Larry Jeddeloh, the money supply growth in the last 12 months for the UK M4 is up 13%, Eurozone M3 is up 10.6%, China M2 is up 15.9% ,South Korea M3 is up 10.6% , Australia's M3 is up 13% and Russia's M2 is up 48%.

With numbers like this it is obvious that global central banks are continuing to provide a lot of liquidity to the markets.

For this reason and others, we expect this correction to be relatively short, after which gold and foreign stocks should rally strongly.

Yours,
Monty"

"The Carry Trade is huge in gold, except no one can know.
The standard argument is that a slowing economy is bad for gold because inflation will decline. It will not! The Formula speaks for itself.
I have already suggested to you the carry trade and bullion buyers are a contradiction of terms. It is like saying the meeting of NASCAR fans will be held at the Westchester Country Club. They simply are not the same people. The carry trade is in equities and thereupon derivatives first and further, currencies, but primarily government paper. The scam commercials pull under cover is completed by hammering the silver price to tip off the Black Boxes both in silver and gold. The Black Boxes then do the work for the commercials..."

Melissa Data offers an opportunity to download the list of sales used in the calculation month by month. Most zip codes contain more than one style of home, so the list should show if the data is skewed by over-weighted proportions of lower or higher priced units.

My zip code showed a peak in late 2005, early 2006. Probably about right, but my zip code is heavily populated, so anomalies tend to get lost in the sheer volume.

Quantity of units sold is another dropping trend in my zip.

http://disc.server.com/discussion.cgi?disc=149495;article=109686;title=APFNThe dollar index may be popping nicely the past week or so, but it's technically no where near staging a bull run to the upside. Topaz could be right and the index clear some technical barriers. We all remember the lengthy period last year where POG and $ index rallied together- maybe for a few days this year- and now some calling for some more. Maybe they'll chop around but then they'd better hurry because this things heading for a climax soon IMHO.(You know my timetable). Thank you.
Sun Mar 4, 2007 19:06
72.201.70.108
The Condition of the Dollar
By Lindsey Williams
http://www.lwoil.com/newsletters/march_2007.htm
Excerpt: "There is so much to touch on regarding the dollar this month, I hardly know where to start. Regardless of where I begin, the news is not good and affects all of us.
First on our list is China. They have now announced that they are refusing to accept American Corporations purchasing into their stock market any longer as they did in the past. China also said that they are no longer going to be purchasing our securities as they have in the past, including bonds and T-bills. China's decisions and subsequent announcements at the beginning of the week has sent a panic across the World's markets.
Additionally, OPEC met recently and they have also stated they will be diversifying into other currencies instead of just the American dollar. They will now begin accepting other currencies and limit the trade of oil via the American dollar.

March 21st 2007 will be one of the most significant dates this month. Iran has outlawed the American dollar and will put anyone in jail that uses it in their country after that date."

http://www.the-privateer.com/chart/gold-pf.htmlI find that the best thing to get a perspective on things is to look at a long term chart. The URL attached is a beaut covering 25 years. TA tends to be more reliable the longer a trend continues. If you look at the green lines drawn from 2000, you can see that this is, so far, part of a normal pullback. The support line appears to be around $625-630, which is where we are coasting to. If the PoG breaks this, then, yes, it may be different this time.

I mentioned when I posted for the competition that the uptrend appears to be getting steeper, and this is clearly shown by the second green line. I saw this on the log(PoG) vs. time chart, but I'm not sure how this correlates to a linear P&F one. One thing that the P&F definitely DOESN'T show is that the speed of the falls is 10 times the speed of the rises !

C!

Evident is the GLOBAL LIQUIDITY surge...

Globalization = the goal until the NEW WORLD ORDER

to get all the players on board including CHINA and the Middle East ......

Banking eventually HOOKS every one in

LIQUIDITY is VASELINE to enable this process ....to continue without mishap .... keep everybody in line and on que


Since Globalization is PRIMARY OBJECTIVE to the New WOrld Order , and LIQUIDITY IS THE GREASE .....and this is a long term goal .......

SEE GOLD RUN
SEE SILVER RUN

"On Wednesday, Bernanke told the House Budget Committee he could see no single factor that caused the market's pullback a day earlier."

This is, of course, economic nonsense. We saw in the first two months of this year, Jan. & Feb. 2007, the sharpest, and largest, draining of legal reserves in the history of the Federal Reserve. (for an explaination of legal reserves see Modern Money Mechanics: http://landru.i-link-2.net/monques/mmm2.html)

What happened? The Manager of the Open Market Account uses the federal funds "bracket racket" as a "trigger" to guide open market operations. The FOMC maintained their interest rate target, but disregarded the level of legal reserves. This is another, of an endless examples, of an extremely flawed monetary policy. Our money supply can never be managed by any attempt to control the cost of credit, that was what the Treasury Federal Reserve Accord of 1951 was all about.

If monopolistic powers "administer" an upward shift in a price, the long-term effect will not be inflationary, but will be deflationary unless monetary flows (MVt) "validate" these specific price changes.

The monetary authorities use two tools to control the money supply--free legal reserves and reserve ratios. If these tools are to be effective, all legal reserves of all money creating institutions have to be in a form which the monetary authorities can quickly ascertain and absolute control. The only type of bank asset that fulfills this requirement is interbank demand deposists in the Federal Reserve Banks owned by the member banks. Similarly, the monetary authorities have to have complete discretion over changes in reserve ratios. This is essential since under fractional reserve banking (the essence of commerical banking) these ratios determine the minimum volume of legal reserves a bank must hold against a specific volume and type of deposit liability.

Congress should "bite the bullet" and require all commercial banks to have the same reserve ratio and reserve asset requirments (pre-1959 requirements pertaining to assets). And as a long-term proposition, get the commercial banks out of the savings business. Never are the commercial banks intermediaries in their lending process.

See: Reserve Requirements: History,Current Practice, and Potential Reform. http://www.federalreserve.gov/monetarypolicy/0693lead.pdf

There has always been a seasonal consolidation period. This historically ends mid March.

http://www.lemetropolecafe.comMidas Report by Bill Murphy - March 5, 2007
Snippit: "For the skeptics out there who remain clueless on all this market management stuff, one only need go to the public record. For example:

Bill,
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFkGFnSxyPjo&refer=home

In Bernanke's speech at Stanford on Friday he admitted that the FED manipulates markets:

QUOTE

``Given their scale, capital inflows and outflows certainly influence long-term U.S. interest rates and other key asset prices,'' Bernanke said. Still, ``the Federal Reserve retains considerable leverage over longer-term rates and key asset prices.''

END

How many times do key officials have to confess to manipulating markets before the main stream press will acknowledge it happens?
Cheers
Adrian"
Mikal-- Way to go Bill! Way to go Adrian!

http://www.financialsense.com/editorials/au/2007/0305.htmlyes it is most definitely a garden variety correction... so far...

SNIP: Are subprime mortgage lenders like New Century Financial and Novastar taking it on the chin?...

No, more like a bullet wound in the aorta. Do not mistake the twitching for signs of life.

been in surplus since 2002..huh?

I like to create a list of movies with a gold bullion/gold plot line of some sort.
Have quite a few good choices and am wanting all posters to help add to this list.
My list so far in no particular order:
The Good, the Bad, and the Ugly (A search for gold by the 3 adversaries)
McKenna's Gold (That vein of gold on the moutainside would give you a heart attack)
Goldfinger (A how to on robbing Fort Knox, 1st-disable an army, 2nd-radiate the gold)
Treasure of the Sierra Madre (The Prospectors Bible Movie)
Kelly's Heroes (A lot of nice gold bars!)
A Fistful of Dollars (Clint seems to do a lot of gold movies)
Paint your Wagon! (Pardner!!!! Is that Clint aggin?)
The Maltese Falcon
All the Kings Men
Die Hard III (Need a lot of Trucks to hual all that gold under New York)

Im hoping to have all of these on dvd eventually

I would add the relatively recent "Italian Job" to that esteemed list. Good plot, action and plenty of gold to look at.

PA

There was a Hackman movie not too long ago, where he steals some gold off an airplane. Can't remember the title, it had a surprise ending, I won't give it away here.

Seems like a common theme to a lot of these gold movies is theft. Why would that be?

http://www.forbes.com/business/businesstech/2007/03/02/nyse-sec-nasdaq-biz-cx_lm_0305nyse.htmlFinancial Services
A New Worry For Wall Street
Liz Moyer, 03.05.07, 6:00 AM ET - Forbes.com - Excerpts:

"Last week's market turbulence and technical glitches have overshadowed an important regulatory change that kicks in this week. Beginning today, all trade orders are supposed to be routed to whatever exchange offers the best price, meaning markets like the NYSE Group's (nyse: NYX - news - people ) Big Board could lose share to smaller regional exchanges and electronic networks.

The impact won't be completely felt for another month, courtesy of a delaying action from the NYSE. Last week, the exchange received an extension from the Securities and Exchange Commission that gives it until April 5 before it has to comply with all of the new rules, which are called Regulation NMS...

The chief executive of one relatively new network, BATS Trading in Kansas City, said in an e-mail to a regular group of some 1400 readers that he was "concerned about the stability of the public markets in the transition to Reg. NMS."
David Cummings, the BATS chief executive, added, "I would urge all participants across the industry, especially those with high-speed automated trading models, to be mindful of any unnecessary loads their orders could place on the markets."

The messaging snafus were enough to pique the interest of the SEC, which has been talking to NYSE about what happened. Thain has denied news reports that a bigger investigation into this week's events is underway."
Mikal-- This doesn't seem to be so much 'much ado about nothing' as incompetence. The coming weeks(or days) should reveal just how negligent or consequential 'glitches'
figure to be in 'the program'.

He said that he has been watching CNBC all day. After Liz Clayman's story this morning, along with the other compelling reports on gold, he is rethinking diversifying the PBOC's reserves into gold. He said that he may go with an ETF (if anything) if he wants to get back into the gold market in the future.

He also said that he will be calling Shanghai later this morning (it is early morning in Beijing) to recommend that they mothball the Shanghai Gold Exchange since gold is no longer a safe haven and the need for a formal gold exchange in China would appear to be useless going forward. He is looking for a more productive use of the country's FOREX reserves such as Fannie Mae or Freddie Mac common stock / bonds.

I know that many here think that gold will go up in the future, but after speaking with Mr. Xiaochuan and learning that China has no further interest in gold as a reserve asset, I am leaning toward cashing out my gold bullion position and possibly moving that capital into something that yields a dividend such as Ford or General Motors stock.

I wish everyone the best, but I think that gold's run is over and now is the time to get back into the market while stocks are cheap since that is what the Chinese appear to be doing.

PA

Physical gold at these prices may never be seen again in our lifetimes. Only huge liquidity increases from the already high levels we are experiencing at this point in time can prolong the the current economic cycle. The desperation of the New World Order was indicated with repeated IMF begging to sell gold. The Euro offers no haven and all other paper currencies will decline vs. gold. Good luck all as additional liquidity may buy a little more time (keeping averages up) but the tranquil investing periods we have known are over. The subprime lending defaults are just one of many battles to be lost by consumers from this point on. The battle between the bankers and gold has now reached the point of no return. The winner will take all. Slavery vs. freedom is now on deck. What will you chose?

REF:Paper Avalanche (3/5/07; 18:25:18MT - usagold.com msg#: 153091)
Zhou Xiaochuan just called me.... this is big news


Your not serious...a joke??

....now I wonder who uses the anti gold cloaking devise.

Gold's low price is an opportunity to buy and get into the market. The demand for oil will continue. Gold will soon rise again!

GF

It's true. He somehow got my home phone number and called me to discuss the items in my post below.

I appreciate your concern. I hope that other central bank presidents don't take this as an open invitation to call me whenever they want.

I love you man. You are the reason I get up in the morning.

Take care,
PA

I highly recommend it.

R.

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

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

MONDAY Market Excerpts

Gold piggybanks tapped on global market weakness

March 5 (MarketWatch) -- Gold for April delivery closed down $4.90 at $639.20 an ounce on the New York Mercantile Exchange. Prices climbed briefly Monday to touch a high of $645.30.

U.S. stocks saw another tumultuous session on Monday, as the yen rallied against major currencies, while stocks across Asia ended sharply lower, with indexes in Japan, Malaysia, Hong Kong, and Singapore retreating more than 3%.

"Gold traders see the stock market recovery off the days lows and are growing more bullish that a financial meltdown is not in the works," said John Person, president of NationalFutures.com.

"If this stock market continued lower, then I would have expected gold to fall as well -- mainly because hedge funds and others who are cashed strapped would be liquidating holdings to meet potential margin calls [and] one holding might have included gold," he said.

"For some who believe the global economy is still vibrant, buying gold is a bargain near the $640 level," said Person, pointing out that gold prices were at $690 just a few days ago.

The contract has lost $50.60, or 7.3%, from the closing level of $689.80 on Feb. 26.

"It certainly presents a lower risk to buy today than it did last Friday."

So contrary to the expectations of some market observers who believe that gold absolutely must rise during periods of duress, gold has been under pressure, Dennis Gartman, publisher of the Gartman Letter said.

"Gold remains a source of liquidity that can be tapped when it must be tapped," Gartman said.

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

REF:
Paper Avalanche (3/5/07; 19:03:05MT - usagold.com msg#: 153094)

Sarcasm is not very becoming nor is it very courteous.

I thinks CHINA will never devoid it's self of gold and neither will it's people. As far as choosing a stock that pays meager dividends...they can have it. Why would anyone choose to invest in a company that is going down to begin with?

I love you man.

PA

This is a nebulous concept as anyone who studies the tables can attest. Gold is never in surplus; never in dearth. On the contrary, it is always in balance with price the final arbiter. One can make a case though whether the suppliers or the demanders were more aggressive. In the current time period, the demanders are more aggressive and the shorts will do all they can to tilt the balance in their favor, including manipulate the press. In that respect, nothing has changed for more than a decade.

Hi All, well, if there ever was a reason for Kennedy to meet his maker, according to Fed backers, the following would be reason enough. Surprised to find this, but here it is.

"As the Federal Reserve overprints more money, the money supply inflates, and too much money starts chasing too few goods and services, which means prices go up. But contrary to the charade put on by the Federal Reserve, inflation doesn't just come and go due to some arcane sorcery. The Federal Reserve can halt inflation any time it wants to by simply shutting down those printing presses. It therefore follows that both inflation and recession are fully under the control of the Federal Reserve.

Over time, that excess of printing has destroyed the value of that dollar you think you have. If you want to know by just how much, go out and try to purchase 371.25 in silver right now. Usually, the deterioration is gradual. Sometimes, it has to be obvious, such as the 1985 devaluation (done to halt the trade imbalance) which triggered the Japanese real-estate grab in this country.

Many politicians have attempted to reverse this process. John F. Kennedy issued an Executive Order 11110, requiring the Treasury Department to start printing and issuing silver certificates for the silver then remaining in the US Treasury.

Kennedy decided that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. This was the reason he signed Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System.



John F. Kennedy's United States Note.

That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.

Kennedy's comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks".

Kennedy's executive order was never implemented following his assassination, and shortly afterwards, United States silver coins were taken out of circulation and replaced with the copper clad slugs in use today. These two events, the failure to print new silver certificates, and the substitution of worthless slugs for our silver coins, may explain why the Warren Commission included on its panel John J. McCloy, a man with no experience in crime, law enforcement, or national security, but who had been the President of the Chase Manhattan Bank.

Thanks guys, I knew the Italian Job should have been on my list but could not remember the name of the movie for the life of me, thanks! I never seen the movie Heist and will look for it in the DvD movie rentals for a night entertainment.
Every one of these movies someone was trying to steal the gold, bankers must of financed the movies!

http://www.kamron.com/economics/kennedy.htm
I may be mistaken, but it is my understanding that the EO was actually carried out a few days before he was shot in Dallas. Immediately thereafter all US silver notes were removed from circulation. I am not sure if many ever saw the light of day, but I want to say that about $4 million worth got into the banking system only to be recalled a week or so later. Please see link below for a better review of the topic.

I may be wrong. I often am.

PA

http://www.house.gov/paul/tst/tst2007/tst030507.htmThe Coming Entitlement Meltdown

By U.S. Rep. Ron Paul
Monday, March 5, 2007

David Walker, comptroller general at the U.S. Government Accountability Office, appeared on the television show "60 Minutes" last evening to discuss the federal budget outlook. If you saw the show, you know that he painted a very sobering picture regarding the federal government's ability to meet its future obligations.

If you didn't see the show, Mr. Walker's theme was simple: Government entitlement spending is like a runaway freight train headed straight at American taxpayers. He singled out the Medicare prescription drug bill, passed by Congress at the end of 2003, as "probably the most fiscally irresponsible piece of legislation since the 1960s."

When it comes to Social Security and Medicare, the federal government simply won't be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers.

Our entitlement system can't be reformed -- it's too late. And the Medicare prescription drug bill is the final nail in the coffin.

The financial impact of the drug bill cannot be overstated. Government projections that the program would cost $400 billion over the next decade were a joke, as everyone in Congress knew even as they voted for the bill. The real cost will be at least $1 trillion in the first decade alone, and much more in following decades as the American population grows older.

The Medicare "trust fund" is already badly in the red, and the only solution will be a dramatic increase in payroll taxes for younger workers. The National Taxpayers Union reports that Medicare will consume nearly 40 percent of the nation's GDP after several decades because of the new drug benefit. That's not 40 percent of federal revenues or 40 percent of federal spending, but rather 40 percent of the nation's entire private sector output!

The politicians who get reelected by passing such incredibly shortsighted legislation will never have to answer to future generations saddled with huge federal deficits. Those generations are the real victims, as they cannot object to the debts being incurred today in their names.

The official national debt figure, now approaching $9 trillion, reflects only what the federal government owes in current debts on money already borrowed. It does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at roughly $50 trillion -- a staggering sum that is about as large as the total household net worth of the entire United States. Your share of this $50 trillion amounts to about $175,000.

Don't believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare alone.

The only options for balancing the budget would be cutting total federal spending by about 60 percent or doubling federal taxes. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.

The answer to these critical financial realities is simple, but not easy: We must rethink the very role of government in our society. Anything less, any tinkering or "reform," won't cut it. A good start would be for Congress to repeal the Medicare prescription drug bill.

http://www.rense.com/general44/exec.htm
Here is a more detailed look into EO 11110.

PA

http://www.marketwatch.com/news/story/mysterious-movement-gold-market/story.aspx?guid=%7B0233E1E3%2D809B%2D4E9A%2D819C%2DC976C1C09077%7DBy Peter Brimelow
CBSMarketWatch.com
Monday, March 5, 2007

NEW YORK -- Gold had a tough time in the past week too.

No stock market enthusiasts will have any sympathy, but gold's friends are aggrieved. A week ago gold bullion closed at a 2007 high, and early this past week made highs in several major currencies, a favored sign of bulls. But furious selling, starting rather strangely in the thin aftermarket after Tuesday's close in New York, ultimately sent the metal reeling to a $39 per-ounce loss on the week.

Not all gold observers were caught. Pring.com's Martin Pring, who places great faith in the predicative power of gold equities, was worrying in his Weekly InfoMovie Report about their nonconfirmation of the metal. And several old hands were suspicious about the ballooning "open interest" in gold on the New York Commodity Exchange. In essence, this is a measure of the size of the bet laid down by speculators in gold futures. Seeing it pass 2005's record high without a new high in gold set off alarm bells.

How big was the seller?

The Gartman Letter, which for a loudly self-proclaimed non-membership in the gold fraternity spends a lot of time thinking about the metal and is actually quite a successful trader of it got the message on Thursday morning: "We find it disconcerting that spot gold has seemingly badly failed in the past two or three days to push upward through $685-690. Whoever, or whatever, the seller is at that level, it has been formidable indeed."

The Gartman Letter acted, halving its quite substantial holding and converting the rest into a long-gold, short-Nasdaq spread, consequently avoiding two-thirds of the week's loss.

The size of the blocking operation which stopped gold imitating oil this past week in making and holding new 2007 highs, perhaps paradoxically, encourages the considerable school of gold followers who believe gold is subject to heavy but surreptitious manipulation by the authorities. This is because of their theory of the mechanism involved.

As one of their leaders, GoldMoney.com's James Turk, says in the new edition of his Free Market Gold & Money newsletter: "As gold climbed in price, we witnessed in recent weeks the huge buildup of open interest on the Comex. The gold cartel ... was selling whatever ... it felt... needed to try slowing and then capping gold's advance ... the gold cartel finally succeeded in capping gold. ... Fortunately, there was no serious long-term technical damage to gold's chart -- nor do I expect any in the days and weeks ahead. Any reversal of gold's major uptrend is unlikely because the gold cartel is already covering short positions at these prices, which will provide underlying support for gold."

This concept that the "enemy" trades around the gold price, and are not just constant sellers, is a sophisticated point that open interest behavior in the past can be interpreted to support.

Others, of course, presume that gold was just caught in the general stampede for cash. This must be true to some degree, but the latest open interest data (Thursday evening's, with half the week's losses booked) do not really show it.

Gold, of course, is not just part of the spectrum of financial assets seen from the West. It is also of great interest to the Indian population, easily the world's biggest buyer of physical gold. Over at LeMetropoleCafe.com, Bill Murphy is expecting the Indians will step in and stop the slide. His proprietary Indian premium numbers (full disclosure: Once provided by my brother John) have not so far shown this is happening. But after Friday's losses perhaps they will.

http://www.financialsense.com/editorials/turk/2007/0305.html5:30p ET Monday, March 5, 2007

Dear Friend of GATA and Gold:

Buying shares of the gold exchange-traded fund sponsored by the World Gold Council isn't quite buying gold itself, GoldMoney founder James Turk writes in an essay adapted from the latest issue of his Freemarket Gold & Money Report (www.fgmr.com). Turk's essay is titled "The Paper Game" and you can find it at Jim and Mary Puplava's Financial Sense site here:

http://www.financialsense.com/editorials/turk/2007/0305.html

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

http://news.silverseek.com/SilverSeek/1171925694.php"A seminal moment during our brief soir�e into Orlando came when a curmudgeonly sort sauntered up to our booth and demanded why, when he sought to retrieve the silver bars he had laid into receipted warehouse storage at this nation's most premiere repository in New Orleans, they could not produce them but, per contract, would happily replace with new bars. They were not deadbeats, this New Orleans outfit. They would honour the contract. He would get bars of equal value. "Why cannot I get my own silver back from your storage?" he asked.

"We leased your silver," they told him. His bars were gone. That was his story to us. And then along comes, just Sunday, a missive from Bill Murphy of GATA and LeMetropole Cafe, alerting us to an article by Tom Lauricella, dipping out of the Wall Street Journal (not to be confused with the Wallace Street Journal) to the effect that Barclays ETFs, which make owning silver so painless and easy, may have a more nefarious agenda: turns out the reason that their ETF schemes are so inexpensive and transparent is that there's a back-door to the money. Says Lauricella, "Another aspect of its business that is less well-known to ETF investors: Barclays actively engages in securities lending -- loaning out the stocks and bonds in its iShares ETF portfolios. The loans are highly lucrative, bringing in millions of dollars a year for Barclays in addition to the fees it gets for managing the funds."

In other words, there's just a niggling chance that the silver Barclays claims to be holding on your behalf may already be leased to somebody else. May already have ceased to exist. But because you are so confident in your investment in iShares, you'll not demand delivery of the physical because you are so far just enjoying the ride. After all, why would a bank lie to you? And this is the nut of a Ponzi scheme: as long as only a few make physical demand, the game continueth. Ponzi schemes unravel not because of their size, but because they run out of trusting players."

Sun- or Moon-metal, if you don't hold the Precious, precious, It might not be there when you need It most. WHEN will people learn?? ~8-(

Since they are already public domain, I think it's acceptable to reproduce them here. See Geo Ure's urbansurvival.com for authorized elaboration.

"Beware the Ides of March!"

I think I'm beginning to see why physical may well sever its connection to paper gold at some point.

As long as the paper gold commitment is to deliver "like value", the short sellers can manipulate the price down whenever either delivery or liquidity put them behind the proverbial 8-ball.

However, at the point that real sellers completely dry up, they then dictate a fictitious "settlement" price and make the buyer go away with only FRNs.

Their line in the Kangaroo Courts will be, "If it were selling, this is how we would determine the "price".

They better hope they don't meet up with a Judge who is fond of the metallic critters, or if they do, better hope he is also fond of Executive Hunting Junkets.

http://www.treasury.gov/education/faq/currency/sales.shtmlMy grandfather gave me a one dollar silver certificate on my 18th birthday. It was circulated and was part of the 1957 series so it has no numismatic value. The link above states...
"On March 25, 1964, C. Douglas Dillon, the 57th Secretary of the Treasury announced that silver certificates would no longer be redeemable in silver dollars. This decision was pursuant to the Act of June 4, 1963 (31 U.S.C. 405a-1). The Act allowed the exchange of silver certificates for silver bullion until June 24, 1968. This was the deadline set by the Congress. Since that date, there has been no obligation to issue silver in any form in exchange for these certificates. You may be interested to know that the Congress took this action because there were approximately three million silver dollars remaining in the Treasury Department's vaults. These coins had high numismatic values, and there was no way to make an equitable distribution of them among the many people holding silver certificates.

Silver certificates are still legal tender and do still circulate at their face value. Depending upon the age and condition of the certificates, however, they may have a numismatic value to collectors and dealers."

...that last part gets me where it points out its worth at 'face value'. If I had been given a physical silver coin then it would be worth 13x face value. Just Another example of how paper money should only be used as a transactional unit and not a store of wealth.

-Pal

The separation that is.
As we watch, PoG is only permitted to rise "with" the mainstream markets.
When ALL market machinations are factored in, the conclusion that MUST be drawn is that, one day, PoG will be called on to "price" that which it represents ie: nothing more than a promise to deliver "something" (not necessarily Bullion) at some point in the future ...usually at the discretion of the promiser.
Naturally that "price" will be a sad reflection on Gold per-se.
Rather than poo-pooing Golds inability to provide a safe haven in shaky times, CNBC should focus on the flawed mechanism that prevents Gold ..or the pricing thereof, from functioning in it's historical capacity.

The recent downturn highlights the need for just such an Island of Tranquility in a futuristic genuine Market Maelstrom imo.

Australia Coal Queue at Record High (1 March 07)
http://seanews.ru/default.asp?l=e&a=l&v=d&g=1&i=30906&n=1

Baltic Dry Index rising
http://www.rubbernet.com.sg/baltic_indices.htm

Is this the way the world economy slows down? Strange?!

http://bullnotbull.blogspot.com/2007/03/jones-on-money-gold-and-silver.html
six minute video

http://news.yahoo.com/s/nm/20070306/bs_nm/japan_economy_paulson_housing_dc;_ylt=Anly86fIWQjI_KtJ0xJO8uy573QAFrom Reuters
via Yahoo News
Tuesday, March 6, 2007

TOKYO -- U.S. Treasury Secretary Henry Paulson said on Tuesday that a weakened housing market will not have a major impact on the U.S. financial sector, which he described as quite healthy.

In a roundtable session with reporters during a visit to Tokyo, Paulson said the housing downturn had had some impact on certain types of mortgages but he did not see it as a major problem.

"Some of the credit issues are there, but they're largely contained," Paulson said.

The U.S. Treasury chief was on the first leg of a three-country trip that will also take him to South Korea and China before he returns to Washington on Thursday.

He described global economic conditions as very healthy and played down recent drops in global equity prices.

"The global economy is more than sound," Paulson said. "It's as strong in the last couple of years as I've seen in a lifetime.

"All the economies are growing, inflation is low, and liquidity is high," he said.

Global equity markets have been roiled over the past week and a half by several factors, including the Chinese stock market's sharp drop last week and a comment by former Federal Reserve Chairman Alan Greenspan that a recession was possible.

Another factor cited in recent market declines was a reversal of support from a long-running phenomenon known as the carry trade, which involves using Japanese yen to invest in global equities and other higher-yielding assets.

Asked whether an unwinding of such trades was a concern, Paulson said he had no comment on yen carry trade.

Paulson described the Japanese economy as being on "a very good trajectory" but said it was very important for Japan to continue with economic reforms.

He said Japanese financial institutions were offering a wider variety of investment options so that savers were less dependent on low-yielding bank savings, and he said that was a promising development.

Paulson was also asked whether there would soon be an unfreezing of North Korean accounts held in Banco Delta Asia, the Macau bank that the U.S. Treasury identified as a "primary money laundering concern" in 2005, calling the bank a "willing pawn" in aiding illicit North Korean activities.

"We've had a lot of bilateral sessions with the North Koreans, and I believe it'll be resolved in an appropriate way," Paulson said.

"No one who runs a respectable bank wants to be unwittingly duped into financing illegal activity. We are going to continue to be vigilant."

Our Federal debt 8.7 trill. is so high in terms of available taxable resources, disposable income of consumers, and business income, we dare not have a severe recession; nor can we stimulate the economy for fear of higher rates of inflation and interest rates. We are currently in a balancing act that we cannot long endure.

http://www.informationclearinghouse.info/article11613.htmiran oil bourse threat -splained-.
Scenerio for gold to find another function, again.

http://www.whitehouse.gov/news/releases/2007/03/20070305-6.html"You know, not far from the White House is a statue of the great liberator, Simon Bolivar. He's often compared to George Washington -- Jorge W."

"Like Washington, he was a general who fought for the right of his people to govern themselves. Like Washington, he succeeded in defeating a much stronger colonial power, and like Washington, he belongs to all of us who love liberty."

----

Up is down. Black is white. The evil emperor is
an anti-imperialist liberator of the people.

Vive la revoluci--n! Vive Jorge!

http://www.house.gov/paul/tst/tst2007/tst030507.htmWell, not entirely.

Snip:-
David Walker, Comptroller General at the Government Accountability Office, appeared on the show "60 Minutes" last evening to discuss the federal budget outlook. If you saw the show, you know that he painted a very sobering picture regarding the federal government's ability to meet its future obligations.

If you didn't see the show, Mr. Walker's theme was simple: government entitlement spending is like a runaway freight train headed straight at American taxpayers. He singled out the Medicare prescription drug bill, passed by Congress at the end of 2003, as "probably the most fiscally irresponsible piece of legislation since the 1960s."

When it comes to Social Security and Medicare, the federal government simply won't be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers. Our entitlement system can't be reformed- it's too late. And the Medicare prescription drug bill is the final nail in the coffin.

End snip.

Everything he says is true, except that I think we can guarantee that the government will honor every cent of the promise. Quite what it will be worth at that point is anyone's guess, however.

But it does bring to mind (yet again) the curious fact that people in positions of power seem unable to act in the face of the blindingly obvious. One can say that an elected official is only interested in keeping the electors happy until he or she is no longer seeking office, and it can also be pointed out that government retirement and health schemes are not the same as for the masses. But don't these folk at least have brothers, sisters and children who will be royally bilked ?

Of course, the cynical (or better informed/educated) may realize that the positions of power are not where the real power lies, but you have to think that occasionally the PTB would make a few more mistakes and let a few loose canons shoot their mouths off. But the case of the admirable David Walker, who has been pretty loud and unequivocal for some time now, shows that people don't want to see the really bad news. I guess that's what's known as hysterical blindness.

C!

"Housing slide won't hurt financial sector, treasury secretary says"

I got a sudden flash of the Mogambo screaming "HaHaHaHaHA!" at the top of his voice, while twin streams of tears of laughter course down his face, which is purpling in hypoxia, due to his having difficulty in pulling a breath.

C!

Is the flaw with the plans of the iran bourse/euro dreamers, is the flaw the reality(?) that the euro has, as one of its functions, the function of a release valve for those that oppose the us, but in reality, the euro top guys are on the same team as the us elites, and will not upend the dollar riegn as perhaps china/russia, and some middle eastern nations would like. Opponents of the us run to the euro, which in reality is a partner of the us while posing as an opponent.
How do you upend a reserve currency anyway?
Cant the us destroy a competitor by printing dollars by the gazillions and buying, in this scenerio, euros?
The euro boys dont want to have the euro rated high anyway do they? And for what? The Iranians? What benefit is the trade off? So even if the iran oil bourse gets to start, and many nations change over to euro, wouldnt the euro boys themselves just buy dollars with all the extra euros?
Thereby keeping the game of the dollar alive?
MK said once that the euro is/will take a turn, I wonder his, or anyones thought on the structure of the currencies to be able to handle even a large switch to oil/euro trading. Before iraq, was chirac really pushing for the euro/oil behaviour of saddam, or was it actually a front because his elites are part of the us dollar elite boys.
And, either way, did the fall of saddam make it so the euro is now fully tied to the NWO and it is just appearences, for the sake of the NWO end game, that makes them appear to the iranians as a non dollar, non "empire-hedgeonomy" ally?

Good informative video.
Slingshot----------<>

I see that my good friend
CB2 is still alive and
kicking which, somehow,
makes my trigger-finger
itch. But, easy, OvS, he
sometimes is alright, really.

One thing has troubled me
since I'm part of the USAGold
forum.In order to be a sustain-
able business it has to practice
"feast and famine" marketing. I
mean, it HAS to do that in order
to just generate enough income
to be able to support this forum.
Meaning: Get the members buying
while the excitement is high, though
we "old, wise" fellows know that
it be three-steps-forward-and-two
steps-back-kind-of-a-struggle to
get the gold-price where it belongs.
Rather than step on the bandwagon
when the sap runs strong or is about
to, and rather then offer a beautiful
gold coin for dumb luck guessing, be-
cause that's what it is, rather, offer
a price as in good times past, for the
most effective essay to stimulate our
membership (especially the new ones)
to just keep investing steadfastly one
coin at a time, perhaps, but, stead-
fastly, and never look back, and never
count the worth of it, but just like
taking a breath, and then another one,
on and on, accumulate, no matter what
the price of paper gold is doing. This
not only will give each member a lasting
worth, but will build up a national
treasure that in time will be the back-
bone of America when the chips REALLY are
down.
Every organic entity has various centers
for various functions and the US of A
definitely is the center of finance. On
a global scale, and that is the game now,
if we like it or not, it has earned that
distinction and I must agree, no other
place would have the drive or knowhow, yes,
and singleminded one-upsmanship-kind of
mind to challenge it for the forseeable
future. So be it.USAGold should feel that
it has a holy mission to fulfill. And for
that I'd recommend that it starts branching
out in a network, all over America. I'd bet,
that most members would be interested in an
equity position in a branch near them, if
USAGold would become a true dealer-ship kind
of organization, buying and selling, instead
of being a broker.
Sorry knights, I just wanted to make a small
point and here I'm rattling off. Restrain
yourself, OvS. Instead of loading up when
you get excited, give it to them, little by
little, steadfastly. OK?

Is/was it a false flag. When the iraq "threat" to swith to the euro was ongoing, was it part of a ruse by big boys, that saddam did not understand, that by making it seem like they were really a threat to the us dollar by swithing to the euro, it would telegraph to other nations, iran for one, the idea that the euro really was a threat to the us, however, if push ever comes, the reality would be revealed, that the two, euro and dollar, are controlled by the same guys, and so opposition to the us, as the nwo unfolds, will rally around the euro, and howling european govt leaders, but it will all be a ruse.
just guessing.
These guys have been playing chess for a long time.

sorry about multiple postings, final one.
IF that is the case, then indeed the NWO guys really dont have an achilles heel do they?

Wow,

OvS is ready to "derivatize" MK's castle.

Having been through one successful IPO, I can tell you that it instantly requires a doubling of staff, just to handle the IR and IPO support capacity.

Then MK would have to get his wardrobe ready for that famous Wall St "tour".

http://www.bloomberg.com/apps/news?pid=20601103&sid=a0j4oiYE3Bfw&refer=usRe "Housing slide won't hurt financial sector". Yeah right! Amazing nowadays how everything is spin and nothing about the truth. The subprime real estate collapse is the final nail in the coffin of the American economy and will propagate through the system over the next two years if not sooner.

"The last duty of a central banker is to tell the public the truth." - Alan Blinder, Vice Chairman of the Federal Reserve, on the PBS Nightly Business Report, 1994

Goldman, Merrill Almost `Junk,' Their Own Traders Say (Update2)

By Shannon D. Harrington

March 2 (Bloomberg) -- Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds.

Prices for credit-default swaps linked to the bonds of the New York investment banks this week traded at levels that equate to debt ratings of Baa2, according to Moody's Investors Service. For Goldman, Morgan Stanley and Merrill that's five levels below the actual Aa3 rating on their senior unsecured notes and two steps above non-investment grade, or junk...

USAGOLD is a business and with any investment you must do your research. Is there any other site that offers gold for your thoughts? Have you benefited from the information on this board. If the Newbies want to get into gold let them call and talk and after decide if it is a good deal.
Yes your question is one to think about but you came up short somewhere.

Just answering your question.
Slingshot--------<>

You got your points. Though,
how about joining of forces
with Sinclair? His seasoning
would complement MK's and his
playmoney could provide the
initial funds... Hey, I'm
dreaming of course, but its
minus 13 outside and with the
windchillfactor minus 35. My
1982 Volvo with 246,000 miles
has a slight problem (probably
the fuelpump relay has to be
replaced) so I can't even get
to the nearest liquor store to
get a refill of brandy. Just
proves one can't plan enough
ahead, and not everyone is
like our BB. But, I'm learning,
slingshot, yes sir. OvS

Risks? You bet.
Nicholas Deak comes to
mind. A big man one
year finito the next.
I actually sold them
a goldcoin ages ago.
They attached it to
a string, pinched it with
a fingernail and could
tell by the sound of it
that it was pure.
And Mr.Safra, oh boy. Gold
is a high-stakes game
and I don't know if MK
has a little 007 in him,
or, better, Mr.Goldfinger
in his gut. But, who knows,
what about Mr. Straus, and
I'm not talking about the
Waltz-Master; could he rally
the Knights?
OvS

Me? Able to rally the Knights???

First-hand experience answers that matter with a decisive "No!"

In fact, it reverberates among these walls so definitively that I'm nearly convinced that neither could I successfully lead a 3-year-old to the sandbox.

:-(

R.

He's in the fareast;

What is he supposed to say ......

He has to market ....

(that's advertise) with a further view toward SELLING ..

Guys that far up the ladder aren't supposed to have to sell

continued buying(bonds and securities) will continue to act as a cushion and a support ..

The Constitution has proven to be for sale ; Perhaps Paulson is trading something else to get continued support for our bond market........

As a dealmaker ; he's showing them the deal , they must be getting something else....

1st option on DEISTRESSED PROPERTY , when the hammer falls.

THERE is going to be ANOTHER (savings and loan ype) debacle
imo.

Maybe last weeks fall in the equity markets was part or the deal to show the Chineze how GOLDMAN managet markets. It's unlike the big boys to let the markets fall like they did last week ...

Where did they put all those bundles of SECURITIZED mortgages (trillions worth) .....Securities , hence they went into MUTUAL FUNDS,,,,,and other (poop shoots) of the stock market........and as ocllateral backs to BONB ISSUES
bon bon BOND BOMB ISSUES.......

If the Chinese would just keep kindly buying these issues , we promise to continues to help maintain an orderly market in these worthless peices of paper.....

BETTER for the U S to hold these peices of CACA over the heads of the CHINEZE than for the CHinese to hold them over the HEADs of the WASHINGTON WHORE BANKING ESTABLISHEMENT......

Who's going to eat the cheese banana...carrot....

who's leading who...?

WHo's sold what ?

THE MAKING OF A WORLD GOVERNTMENT

I PRAY THE CHINESe aren't buying the BAD BS from PAULSON.

WE caused the currency crises of the last decade to try to stop them

Since then we have threatened them with the rumor of GERM WARFARE....

and now we are trying to sell them something to help prop of the consumer side of their economic equation .....

GAY

IF i was in a the last round of a poker tournament and I was holding two aces in Texas Holdem and there was an Ace and two kings on the flop and my opponent came offering me a deal

I'd probably do what the Chinese are doing .....

GRIN inside and keep playing .....

I heard that they like our beautiful country and that they haven't enough land or clean water......


Picture Paulson in a MAID UNIFORM waiting on CHinese dignitaries with a silver tray ....covered with WHORES D'OEVRES

Has anyone else noticed the skepticism displayed by the talking heads? Reminds me of the line in BLAZZING SADDLES when Mel Brooks character stated "We must do something to save our phony-baloney jobs."

Any bets on the equities tanking during/after Bernanke speaks��.?�HM?�.AMF

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/03/06/cngold06.xmlGoldman Sachs warns of 'dead bodies' after market turmoil
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:19am GMT 06/03/2007
Excerpts:
"The global currency storm of the past week is starting to infect the corporate bond markets and may prove harder to contain than last year's May sell-off, Goldman Sachs has warned.
Jim O'Neill, the bank's chief global economist, said investment firms playing the "carry trade" had been caught on the wrong side of huge leveraged bets against the Japanese yen."
Mikal-- Just the first in a series of opinions I am sampling from this article. Great simplification occurs
with regularity in the media and these comments reflect this. For example, no mention of leveraged derivatives, the gold carry, the swiss franc carry, and a great deal more risks or more accurately, time bombs.
And the article hasn't been updated to reflect the recent "stabilization" in the yen and global equities, though it does warn that it will take time to assess the damage.

""There has been an amazing amount of leverage on currency markets that has nothing to do with real economic activity. I think there are going to be dead bodies around when this is over," he said. "The yen carry trade has reached 5pc of Japan's GDP. This is enormous and highly risky, as we are now seeing.""

"Mr O'Neill said the danger was contagion to low-tier bonds, driving up the cost of borrowing for business.
"Our concern is that the repricing of risk we are seeing could spread to the credit markets. This is potentially more difficult to deal with, and needs watching," he said.
The Itraxx Crossover index used to take the pulse of corporate bonds shows that spreads have widened 43 basis points in a week."

"Stephen King, chief economist for HSBC, said it would take two or three weeks to gauge the severity of this shake-out. "The world economy is fundamentally strong, but this reversal of one-way bets built up over years creates great uncertainty. The key worry is that this could reveal a weakness in the architecture of financial markets. We just don't know who is trying to liquidate positions," he said."

Mikal-- Sublime understatement:
"Steve Pearson, currency strategist at HBOS, said global markets were waking up to the reality that perma-growth with low inflation was not on the cards. "We're seeing a creeping reassessment of the trade-off between growth and inflation. This is going to weigh on asset prices and threaten risky assets all through the first half of this year."

@ Mikal,

"Stephen King, chief economist for HSBC, said it would take two or three weeks to gauge the severity of this shake-out. "The world economy is fundamentally strong, but this reversal of one-way bets built up over years creates great uncertainty. The key worry is that this could reveal a weakness in the architecture of financial markets. We just don't know who is trying to liquidate."

-Goldilox

Looks like someone besides the web bots is targeting the "Ides" and succeeding weeks.

The caca is hitting the revolving air circulation system, indeed.

Don't expect the real news to tell us who is getting hammered. It will take a lot of rumor investigation to actually figure it out.

http://www.marketwatch.com/news/story/gold-ends-7-gain-broad/story.aspx?guid=%7B634118C6%2D72C2%2D40DB%2D8B9B%2DF8DA83717AE4%7DI concur 100%. And so does gold, if you read this (and read between the lines), you're left asking what's up:

Gold breaks losing streak on Asia, Europe rebound
Myra P. Saefong & Polya Lesova, MarketWatch
Last Update: 2:02 PM ET Mar 6, 2007 -- Excerpts:
SAN FRANCISCO (MarketWatch) -- Gold futures closed higher Tuesday to register their first gain in six sessions as a rebound in Asian and European stocks as well as gains on Wall Street helped boost demand for the precious metal.
Gold "is looking at forming a base around the $640 level," Emanuel Balarie, senior market strategist at Wisdom Financial, said in e-mailed comments.
"The recent decline from the highs has put gold in an oversold position, and I would expect any type of stability in the global marketplace to spur an onslaught of fresh buying, especially out of Asia," he said.
Gold for April delivery closed up $7 at $646.20 an ounce on the New York Mercantile Exchange. The contract had declined 7.3% from the closing level on Feb. 26.
Some analysts believe that prices will return to their levels from two weeks ago.
"Investors that blink might be surprised to see the price of gold back at last month's highs within a relatively short period of time," said Balarie. "In light of continued inflationary pressures, a weak U.S. dollar, and geopolitical tensions, the decline of gold was fundamentally unwarranted."
'Investors that blink might be surprised to see the price of gold back at last month's highs within a relatively short period of time.'
� Emanuel Balarie, Wisdom Financial
In a note to clients, Neal Ryan, director of economic research at Blanchard said the "return of money to the precious metals' sector this week should be fast and furious, pushing prices back up to levels seen two weeks ago ($660-$680)."
"Volatility from the last week is settling out and money is being redeployed into markets," the European Central Bank will announce a decision on interest rates Thursday and U.S. employment data and international trade deficit figures will come out Friday, he said.
In the meantime, data on fourth-quarter productivity, housing sales and factory sales were released Tuesday, and "the numbers are weaker across the board than was expected," he said.
"All of the above should combine to push precious metals' prices back up in short order," he said.
Looking further ahead, Peter Spina, chief investment strategist at GoldSeek.com said he sees two scenarios for this month.
Gold could rebound strongly from these levels and consolidate around the mid-$600s, or it can reverse and power ahead -- ending the month "approaching or exceeding the $700 mark." But he said it seemed unlikely the retreat "will last very long."
Hesitation
Still, "questions and valid doubts remain about the near-term and intermediate time horizon prospects of the precious metal in the wake of recent events," said Jon Nadler, an analyst at Kitco Bullion Dealers, in emailed comments.
"A true resumption of the bullish march may have been set back by weeks, if not months," Nadler said. "Volatility will remain a defining feature for the time being, as investors are keeping a nervous grip on various triggers."
James Moore, analyst at TheBullionDesk.com, wrote in a note to clients: "Physical players and bargain hunters will be keen to take advantage of sub-$650 gold, but I think the yellow metal may have to weather a little more weakness before short-term sentiment improves."
"The long-term outlook remains strong though, with the current dip likely to be viewed favorably by investors seeking to enter the market," Moore said...

"Crazy as it might seem after watching a week in which prices were down $40 per ounce, last week's activity and subsequent flight to cash across the board will help to strengthen investor interest in the future for precious metals," said Ryan.
"Fundamentally, the supply/demand aspect of the precious metals markets couldn't look more bullish and investors have been presented with yet another nice dip in which to enter the market," Ryan said."

http://www.usatoday.com/money/economy/2007-03-06-greenspan_N.htmGreenspan sees 33% chance of recession
USATODAY - Bloomberg News - March 6, 2007 - Excerpt:
"Former Federal Reserve Chairman Alan Greenspan told Bloomberg News that there's a "one-third probability" of a U.S. recession this year and that the current expansion won't have the staying power of its decade-long predecessor.
"We are in the sixth year of a recovery; imbalances can emerge as a result," Greenspan, 81, said in an interview with Bloomberg News.
"Ten-year recoveries have been part of a much broader global phenomenon. The historically normal business cycle is much shorter" and is likely to be this time, he added."
-- Bernanke and the maestro, all in one neat package. But like a jack-in-the-box at the end of the song, these jacks of all trades lose some entertainment value as we mature.

"the maestro" NOT the maestro. Glory be, that was a close one. ;)

With both the POG and POS on the rebound, I am think'en that POG will go through $700 this time and the POS will go through $15. 'Bout' the time it does, Paulson & Bernanke will have to go back to work smacking them down again, with some more of the "high quality" paper...

SF

Not everyone on this forum will ever become a big player, and some who may just be venturing out into the world of physical ownership of gold and silver might want to go slow at first. The overhead when purchasing just a single gold buffalo is discouraging. I understand that a company like our host needs to make money and that selling one coin at a time requires them to charge a premium. Here is a suggestion. Continue to charge the necessary premium but for each small transaction allow the buyer to accumulate a "contingency credit" which will kick in on say the 10th coin purchased so that the buyer gets all or some of his single coin premium back. This will encourage a customer both to remain loyal and to want to accumulate more gold especially as he nears the point where the credit kicks in. It seems like a sound business practice to me.

PlacerGold

http://financialsense.com/fsu/editorials/laird/2007/0306.html@ Goldilox and Mikal

Laird in his article linked above made me think of the latest web bot warning from George Ure.

Christopher Laird:
"The other problem is the Yen carry trade is still very much out there, like water flooding our Aircraft carrier. Sooner or later, the weight of that will again cause successive waves of market liquidations.

Ultimately, it may turn over. (read great world stock collapse).

That remains to be seen, but it certainly is the big question of the day as to whether the ship fire fighters can put out the blazes, and the pumps keep ahead of the inrushing water, (ever pressuring Yen carry still outside the hull trying to get in) on our wounded market �Aircraft Carrier�.

In the Asian crisis of �97, that was barely done. (a world wide financial and liquidity collapse happened anyway).

This time, I consider the risks far greater. The Yen carry since has grown to incredible levels. And leverage in every market has also grown to incredible levels, and then add on top of that the explosion of the derivatives business � formerly at only $20 trillion about 1990, that is now, in my estimation over a $quadrillion in value (1000 trillion)."

Web Bot:
"However the actual [visible flip/roll] shows for February 27. The coming period of 8/eight days leading up to the Ides of March release period will also be presenting more [visible] (manifestations) of financial crumbling, but by that time, it is far too late to react to stem the process. In fact, as of this interpretation, ...alea jacta est/the die is cast. Start running now, just guess correctly as to which way the iceberg will roll."
http://www.urbansurvival.com/lastweek.htm#latesthit
http://www.halfpasthuman.com/

Pal:
Maybe we could join the two descriptions above and tell the tale thus...
A week ago the ship RMS Novus Ordo Seclorum sailed directly into the largest debtberg in all of recorded history. As we speak the great sea of liquidity is quickly entering the starboard side of the great ship and quickly rising to the first bulkhead, PPT. Giant chunks of derivatives, ARMs, and Yen-Carry are breaking off and causing further damage. The watchful individuals whose concern was raised by the speed of the ship were already on deck and saw the 'berg from afar. The party-goers did not heed the warning of those on deck and will soon find the ship without enough golden lifeboats to go around. There is still time though to find a golden boat and get to safety before the giant debterg reveals its true size and flips over to crush the mighty ship.

Pal, I, for one, like your hybrid tale!

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

Physical buying drives gold higher

March 6 (Reuters, DowJones) -- COMEX gold futures finished 1 percent higher on Tuesday, helped by renewed physical buying after sharp losses in previous sessions, as global shares rebounded after a tumultuous sell-off last week.

The most active April contract settled up $7.00 at $646.20 after bottoming at $634.50, a level last seen on Jan. 19. It hit a session high of $648.90.

David Meger, metals analyst at Alaron Trading, said that a rebound in the Asian and U.S. shares prompted physical buyers to enter the market.

Meger said that gold also got a reprieve from the selling pressure by funds that was seen in the last few sessions. He also cited short covering for gold's gain.

Bernard Hunter, director of precious metals marketing at ScotiaMocatta, cited bargain hunting and a stronger yen, which made prices relatively cheaper for bullion investors in the Tokyo market.

The yen last week posted its biggest weekly percentage gain against the dollar since December 2005. The Japanese currency dipped against the dollar on Tuesday.

The metals lately have been "money-flow markets" more so than markets moving on fundamentals, said Bill O'Neill, one of the principals with LOGIC Advisors.

"If there is one phrase I'd use for today, it's that there is clearly a different money-flow pattern than there has been in the last week," he said.

"But certainly these markets are not out of the water and we need to see more normalcy come in. The jury is out and it's premature to say that everything is over."

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

Why do foreigners invest in the
US stockmarket and trillions into
the US bond and treasury markets?
Are they really stupid? No, they
are clever and sharp like rasor-
blades.
The simple answer is:
They want to sell 10 billion of
whatever, or buy, the US market
will accomodate them. LIquidity!!
When you think about it: liquidity
equals to trust and confidence.
Let's say you are a successful
Chinese. Would you rather trust the
Japanese markets or Europeans, or
the US markets? When it comes to
the really big deals, there is no
equal to the United States Market.
Period.
All these Arab trillion, made with
oil revenues. Where do they wind up?
In Manhattan and London. Who else
can you trust with billions? Who is
the largest single investor in a
Jewish run Citi Bank Group? An Arab
Prince from Saudi Arabia. Get the
picture? (Yes, it used to be the
WASP money that dominated the banking
industry, but they have been margina-
lized by the more daring tribes, and
rightly so). That's not politically
correct, so ignore the previous
sentence. Anyways, trust and confi-
dence. In India, there are really
major problems with that. Lots of
fake jewellry, etc. That's why I think,
USAGold would do extraordianrily, on
a world-wide basis: it would beat hands-
down any other foreign gold-retailer
on that score: trust and confidence, and
foreigners would flock to its dealer
ship deals.
So what's the problem?
Well, liquidity and trust and confidence
only go so far. When liquidity (injec-
tions of the Federal Reserve) is used
to CREATE trust and confidence, then
watch out... There is a fine point in
blancing these entities and that balncing
act I leave to more accomplished jogleurs
and hope for the best. In order not to be
left out in left field, I have the safety
net of precious old-age verified assets.
I might be short on quick gains in quick
deals, but human nature usually reasserts
itself and my precaution will save my
needs and my childrens. OvS

I don't know why Greenspan thinks anyone respects his opinion. His conundrum (the payments gap that's filled by foreigners) was, at his helm, what produced the housing crisis.

Allan Greenspan discontinued publishing two important economic statistics; 1) M3 in March 23 2006 (all countries conducting monetary policy on a prudential reserve basis report M3), and 2) the debit series in October 1996 (elminating the only valid velocity figure)

Under Greenspan's tutelage the Federal Reserve caused the 87 stock market crash, thwarted Bush senior's re-election challenge, drove the Y2K stock market bubble, forced a bear market, created the subsequent recession and corresponding deficits (the war not withstanding) and sanctified our gross housing speculation (avg. price of house rose 83 percent in 5 years).

Dr. Greenspan presided over the Asian currency crisis. He completely ignored the most important reasons for the crisis � growing current-account deficits, excessive short-term foreign borrowing, banking sectors weighed down by speculative property loans, and pegged exchange rates.

Dr. Greenspan tenure covered the current account deficit, which from the time he was sworn in, to the time he left office, amounted to the collosal sum of 5,139 trillion.

To put the current account deficit in perspective, the cumulative deficit of 5 trillion, is equal to the "combined market capitalization of the following fifteen Dow Jones companies: Alcoa, American Express, Boeing, Caterpillar, Coca-Cola, DuPont, General Motors, Hewlett-Packard, Home Depot, Honeywell, 3M, McDonalds, Merck, SBC Communications, and Walt Disney".

For Dr. Greenspan to speculate that the U.S. could lapse into a recession is preposterous.

@ OVS

I would have thought the bidness sells itself when prices are high... When POG is floundering is when the old timers advice comes in handy.

Hello to ALL TRUE gold bugs!!

REF:flow5 (3/6/07; 17:46:29MT - usagold.com msg#: 153146)

I don't really like Greenspan either Flow. However, he gained the world's ear with his last calling as Chairman of the FED. Can anyone really do the job? Even with the current genius Ben? It was absurd for the Government to even create that department/branch/calling/ in the fist place.

This was only because most in Congress are to ignorant to handle it as a committee! To allow some man or for that matter any man to dictate the issuance of rates and other economic information is what's ridiculus.

He may have a point with "his recession" forecast. If the slump in the housing sector lasts long and the Price of OIL increases significantly we could slide right into one. I mean...we have had them in the past!

GF

http://www.rgemonitor.com/blog/roubini/181593/RGE - US and Global Financial Turmoil: Ten Observations on the Coming Financial and Economic Hard Landing by Noriel Roubini | March 5, 2007
Summary of a larger piece on the US and world economies. Very incisive with some original thinking and disturbing implications. (Peter Schiff just wrote a similar piece today, but was upbeat about prospects for some select, mostly foreign stocks, bonds, and currencies, unnamed, and strongly endorsed gold.)
You'll notice some high quality comments following Roubini's summary, especially immediately after it was posted(probably the first on the ball).

Explaining derivatives is often a long and tedious affair. But it doesn't have to be. Take that guy who bought and paid cash of a thousand Nam$ for a cow of his fancy, on the premise to have it delivered the next morning. Come next morning, prior to delivery, the cow died. On wanting his money back, he was informed that it was his own cow that had died. Nimble on his feet, printing and selling five hundred and (?, for service fees) raffle tickets of two Nam$ each, with a cow as first prize, was but a short mornings effort. The raffle winner, as sole complainant, got his money back unobtrusively.

Hello Friends,

I find it interesting how some so called investors in other countries and here in the US can at times be very jittery about their stock portfolio. I am often amazed at how they behave and act.

By owning stock and entering that market you might think your so called "prudent" investing would be something not to worry about or even tinker with. Yet, oddly, so many jumped when wolf was called out.

Now, if they could hold onto what they own and then add some gold to what they have and ENDURE maybe they could sleep at night.

I do think there is a tremendous difference in the way physical gold owners behave Vs. the way paper holders behave or act. It's like they have a nervous twitch and are always looking behind their backs and rolling over thinking while they try to sleep....will the Asian markets crash again tonight??

I take personal comfort that the gold I have is right at my feet and I know where it is and it sure helps me to BEHAVE!! Not to mention sleep.

Get some to calm your nerves today!! Better than Valium!

Cheers,
GF

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070302:MTFH84547_2007-03-02_21-32-37_L02460246&type=comktNews&rpc=44
These guys:

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

Gold piggybanks tapped for other market losses

March 2 (Reuters) -- The global flight from risk knocked gold and silver hard for a third straight day on Friday, with bullion falling below $640 an ounce for the first time in 1-1/2 months...

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

Flying from risky gold and silver.

http://www.reuters.com/article/domesticNews/idUSN0528561820070306

Yikes, I didn't know that!

Why don't these people get a little gold, no hidden fees there.

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

"More than $2 trillion is invested by U.S. workers in 401(k) plans, named after a section of the U.S. tax code. Money is invested into the plans through pretax payroll deductions. Withdrawals may be made around retirement time."

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYEyZpLbePHkJPMorgan, Wells Fargo May Receive Top Moody's Ratings
By Mark Pittman and Joseph N. DiStefano

March 2 (Bloomberg) -- JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. may have their credit ratings raised to the top Aaa level by Moody's Investors Service under a new system that assumes the government will bail out banks in a default, Credit Suisse Group said.

Full text at url

Copperfield: are they nuts? CreditSights thinks so:

CreditSights Ditches Moody's `Worthless' Bank Ratings
By John Glover

March 5 (Bloomberg) -- CreditSights Inc., an independent bond research firm with 700 subscribing institutions, says it stopped using European bank ratings from Moody's Investors Service because they're out of line with investor perception.

``Ratings agencies are sometimes accused of living in an ivory tower,'' CreditSights European bank analysts Simon Adamson and John Raymond wrote. ``Well, Moody's now seems to have rented the penthouse apartment there.''

Full text at url:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8hlR80M.D_k

http://www.leap2020.eu/GEAB-N-12-is-avaible!-Global-systemic-crisis-April-2007-Inflexion-point-of-the-phase-of-impact-US-economy-enters_a448.htmlIn April 2007, nine practical consequences of the unfolding crisis will converge:

1. Acceleration of the pace and size of bankruptcies among US financial organisations: from one per week today to one per day in April
2. Spectacular rise of US home foreclosures: 10 million Americans out on the street
3. Accelerating collapse of housing prices in the US: - 25%
4. Entry into recession of the US economy in April 2007
5. Precipitous rate cut by the US Federal Reserve
6. Growing importance of China-USA trade conflicts
7. China's shift out of US dollars / Yen carry trade reversal
8. Sudden drop of US dollar value against Euro, Yuan and Yen
9. Tumble of Sterling Pound

http://www.usagold.com/gold/coins/ger20mark.html

http://www.platts.com/Metals/News/8923152.xml?sub=Metals&p=Metals/News&?undefined&undefinedLondon (Platts)--7Mar2007

South Africa's gold output fell by 7% in 2006 to the lowest level in 84 years while the 2006 fourth quarter showed a near double-digit decline when compared on-year, the Chamber of Mines said on Wednesday.

The Chamber, which counts AngloGold Ashanti, Harmony and Barrick among its members, said that total South African gold production for 2006 fell to 275,119.40 kilograms, down by 7.5% on that produced in 2005.

"This is the lowest level of gold production since the strike in 1922 reduced production to 218,031 kilograms," the Chamber said in a statement.

...the fourth quarter 2006 figures which saw South Africa's gold production fall on a year-on-year basis by 9.3% in the fourth quarter compared to the 2.9% decline recorded in the third quarter of 2006.

There was even worse news... Total production costs showed an increase, before capital expenditure, of 11.9% on a year-on-year basis to Rand 99 725/kg ($13,471/kg), with the Chamber blaming higher input costs.

Total production costs including capital expenditure rose by 20.8% to Rand 125,030/kg.

^___(from url)___^

With trends like these, who needs enemies?

When you have money for investment or savings, here again we see reasons to choose metal in hand instead of shares in companies struggling to extract a dwindling underground supply in the face of rising production costs -- to say nothing of the looming risks of national taxation or nationalization in one form or another.

Call USAGOLD-Centennial Precious Metals today to get your piece of this latest price dip while it lasts. 1-800-869-5115

R.

http://www.leap2020.eu/Impact-phase-of-the-Global-Systemic-Crisis-Six-aspects-of-America-s-Very-Great-Depression-_a377.htmlRegrettably, I must agree with the links view.
Despite artful play acting, I also agree with conspiracy nuts who are not part of the link, but who say that global elites have a set of dominoes that they are pushing over, that will lead to a result they want. An absolutely unilateral drive to a one world structure. Order.
If they have an achilles heel, I do not see it.

http://www.321gold.com/editorials/price/price030707.html"The more important Central Banks are becoming skittish about the enormous amounts of "reserves" which they are accumulating. The Central Bankers are bureaucrats, but they are sensing that these enormous holdings are rather worrisome; however they do not know what to do about them. The fact is, they have been had. Their "reserves" are simply numerical and lack any substance. They are imaginary and as useless as castles in the air, unless they can manage to get rid of them by passing them on to some unsuspecting seller of tangible goods...

It appears that they have finally realized that the reserves that are actually worth something are the gold reserves, and not the "foreign currency" bond holdings which they were so eager to hold because they "provided earnings".

However, if they start to unload their imaginary holdings, the exchange value of the holdings will begin to fall. So they are in a dilemma, a choice between two distasteful alternatives: "Shall we hold on to the imaginary money and wait and see what happens, or shall we begin to unload it and risk collapsing the value of the larger part remaining with us?"

Up till now, the Central Bankers have been doing what bureaucrats usually do when they are faced with a difficult choice: nothing. They are waiting to see what happens.

More than half of the world's Central Bank "reserves" are held by the Central Banks of China, Japan, South Korea and Southeast Asia. These Central Banks ended up with these huge "reserves" because they accepted a means of exchange - which was no more than imaginary money, digits on computer discs - as if it was payment. In other words, they believed a fairy tale, like the one where Jack trades his cow for a handful of colored beans.

So, we are living in a fairy tale world, where money is not money at all. Alas, reality cannot be fooled by means of fairy tales. How we shall fare, when the dream has vanished into thin air and the last fool has had to recognize the difference between a payment and a fairy tale?"


Methinks we at this forum shall fare well, well indeed.

http://www.galmarley.com/Chart_pages/currency_charts.htmIt sure is interesting watching the various currencies as they wax and wane vis Gold.
In the period from 1/1/07 the Yen went from weakest to strongest of the bunch and now appears to be settling mid-field.
The Canuck thing is weakening as I type and will, in all probability be the first to best it's MYH this time through.

I don't think the SM rout is over and done with just yet and, given the favourable RSI on PoG, don't be too surprised to see PoG/S rise this next time.

Up..up..and away..??

Just a few days ago our wondrous state legislature took it upon themselves to make it more difficult for scrap metal dealers to collect the so called "SCRAP" from a seller.

The new restrictions make it now necessary to log each transaction, details of the seller with a photo id and on large transactions they have now wait a grace period prior to being paid.

Oh, CONTROLS will make all commodities go HIGHER!!

We know what there are trying to do...don't we?

P.S. Hint: I live in a very rich mineral state

GF

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=Since the Comex close today, we've been in $ freefall with concurrent strength in Bond.
No apparent SM action just yet, ...Put your helmets on ...just in case ...;-)

http://www.msnbc.msn.com/id/17501178/PHILADELPHIA - An unknown number of new George Washington dollar coins were mistakenly struck without their edge inscriptions, including "In God We Trust," and are fetching around $50 apiece online.

GF: I agree with you on our legislators. It's just that I think Bernanke is a very smart man, i.e., despite his recent catastrophic error. There should be no recession.

http://www.freebuck.com/today.shtmlDaffy, or for that matter his three nephews Hui-e, Dowie or SPewie, can't seem to get any traction above the water-line these days. ...Keep paddling boys!

If things in your state are going the way of ours, new laws are needed to slow the pace stolen metal products. Thieves are stealing everything from highway guard rails to brass statues. Wire and plumbing gets stripped right out of the walls of new construction. Even 'live' wire sometimes gets liberated.

This is an self sustaining loop. Higher metal price drives demand; demand leads to theft; theft results in new laws; new laws drive up metal prices.

Just another endless cloverleaf on the inflation highway.

- Survivor

@Flow5,

No doubt Choppa Ben is very smart, as was Greenspan. Neither is or will be in the position of Savior, any time soon.

Just ask Nikolai Tesla how far "smart" gets you in the cut-throat world of business and politics. He invented most of what made Westinghouse and GE the power giants they became, and his reward was "kook status" when he suggested evolving from their "fixed" media - after they cheated him out of contractual royalties.

One must play their cheaters' game, or watch the entire foundation erode beneath one's feet!

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

March 7 (DowJones) -- Gold futures on Wednesday continued their rebound from early Tuesday's decline to fresh six-week lows. Higher energy futures prices combined with a weaker US dollar to push the metal higher.

Prices closed near their daily highs Wednesday; April gold rose $6.70 to $652.90 on the Comex division of the New York Mercantile Exchange.

"Overnight, gold did perform well, despite the weakness seen in the crude oil market" during that timeframe, said Dan Vaught, futures analyst at A.G. Edwards. Then when the energy markets began to rally during the day session Wednesday, the precious metals were further boosted, he said.

Another analyst said short covering following the recent steep declines in gold and silver also has supported the markets' rebounds.

Early Tuesday, April gold dropped to a fresh six-week low of $634.50, marking a decline from last week's high of $692.50.

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

and all the HUI can do is WILT like lettuce .......

or for you ladies.......

fall like Soufle

GAY

had a stunning day .......thanks to OIL which is up handsomely ..........
SOme things just never change and BS NEVER STOPS

Yes some day the BS will stop ......

THAT WILL BE A NEW DAY

What you are talking about there with respect to Messrs. Bernanke and Greenspan is whether monetary policy - or perhaps central banking itself - is most successful when viewed as an art or a science. An interesting question. Bernanke, it seems, leans toward science (I am certain he is surrounded by reams of stats, charts and the like) and Greenspan (the old Greenwich Village trombone player) leans toward it being an art. It is interesting to see this new, unforeseen interplay between Bernanke and his old boss. I don't think AG liked being out of the limelight, so he's back, and his presence could be a continuing problem for Bernanke as we move along in these oddest of times.

Some interesting recent Greenspan quotes:

"I was aware of the problem that if I stayed public, I could make it difficult for Ben. For the most part it has worked. I was beginning to feel quite comfortable that I was fully back to the anonymity I was seeking.''

"I thought I had successfully moved into a state of anonymity that I cherish after being in the public domain for so long. I'm as much surprised that remarks I made supposedly affected the markets because I've been making those remarks for months and nobody noticed. I try as much as I can to avoid comments relevant to what the Fed is doing. But I have a profession and I'm a private citizen."

_______

This morning Greenspan grabbed headlines again by stating that the yen carry trade has limited room to run, that it "has to turn around" at some point. Mark my words, it won't be long until he's talking about gold again.

Looking at the Eurosystem's consolidated reserve movements, it was pretty-much business-as-usual.

Under the auspices of the CBGA, there was a decline in gold and gold receivables of only EUR 34 million in value (i.e., 2.2 tonnes).

Meanwhile, the Eurosystem's net position in foreign currency was off-loaded by yet another EUR 200 million.

To reemphasize a point made many times previously, gold (now 'weighing' in at EUR 176.45 billion, up from only EUR 99.6 at euro-launch) has evolved into position as the Eurosystem's primary reserve, whereas the once-dominant holdings of foreign currency have been pared by one-third of its former size to a minority position valued at only EUR 145 billion.

This evolution in the structure of reserve holdings is definitely one trend that IS your friend. You, too, can 'follow in the footsteps of giants'.

R.

HEAL SPOT.......

UMMHHH is Human Nature .......GREED and arrogance ....in a system that is run by men

REFERENCe to this is made in the Book of DANIEL ....

IRON mixed with Clay

Napoleon tried it
Hitler tried it ........

It's not going to happen again in the world that you and I know ........

Driving hard now toward a new world .....but NOT OF THE ORDER or DESIGN Counted on Expected or SCRipted

You will note that your serbian inventor was paid mostly in bank balances and stock certificates.... That he ended up with nothing is in part due to his determination to invent, as opposed to accquire permanent wealth which he had plenty of opportunity to do.

I doubt that many whom he helped build fortunes actually shared his goals. It is one thing to build up wealth, quite another to create freedom. Two ships pass in the night and may share the same course for a time, but ultimately have their own destinies, as Galadriel might have said: much gold will pass through your hands but it will have no power over you.

Many have walked the golden road to ruin, others have walked to fortune bound with great misery.

THAT STATEMENT IS GOLD ..........kind of BRINGS EVERYTHING INTO THE RIGHT PERSPECTIVE
DOESN"T IT

"Mark my words, it won't be long until he's talking about gold again."

No, it won't, as he will soon be giving full credence to his very unGreenspanesque candor before Congress in 1999:

"Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted."

Hi TC, thanks for the regular updates on the ECB numbers. It is both intriguing and remarkable to watch gold evolve as the ultimate wealth asset / reserve vis-a-vis the paper currencies per the ECB's continual adjustments.

Is there a historical table of the ECB numbers that you report to the forum? I would be curious to chart (and track going forward) the percentage moves in the ECB numbers. I am not sure what percent of the ECB's reserves gold comprised when the MTM mechanism was first introduced and these numbers were first reported, but it would interesting to see how the overall percentage of gold as reserves for the ECB changes going forward.

FWIW, per your numbers below, the ECB's gold holdings comprise 54.89% of its reserves.

Thanks in advance,
PA

http://www.larouchepub.com/other/2007/3410caymans_hedges.htmlThis article appears in the March 9, 2007 issue of Executive Intelligence Review.
London's Cayman Islands:
The Empire of the Hedge Funds
by Richard Freeman - Snippit:

On Feb. 27, the world's hedge funds, through their manipulation and miscalculation of the yen carry-trade, led to a violent unwinding of that carry-trade, which triggered disintegration of the world financial structure. Stock exchanges fell, from the Dow Jones exchange in the United States, to China's Shanghai composite index, to Brazil's Bovespa index, shedding more than $1.5 trillion in paper losses. Secondary incidents contributed to setting off the downturn. But hedge funds had already bled the major international commercial banks and corporations into absolute bankruptcy, and had leveraged borrowed funds and derivatives into the biggest financial tumor ever. That, combined with their yen carry-trade role, amplified the effect of the secondary incidents, and is now driving the financial system further into systemic breakdown.

And where are those hedge funds? Though they may have offices in locations like Greenwich, Connecticut, or New York City, 8,282 out of the total of 9,800 hedge funds operating at the end of the third quarter 2006 worldwide, were registered in the Cayman Islands, a British Overseas Territory, run like a dictatorship by a Royal Governor appointed by Queen Elizabeth II, with a total population of 57,000 people.

There is good reason for this. The Cayman Islands Monetary Authority (CIMA) is supposed to "regulate" the hedge funds, but instead runs a protection racket for their derivatives trading and tax sheltering. The CIMA gives each hedge fund, at registration, a 100-year exemption from any taxes; shelters the fund's activity behind a wall of official secrecy; allows the fund to self-regulate; and prevents other nations from regulating the funds by insisting on first and final authority in this area.

And the remainder of the world's hedge funds, not registered in the Cayman Islands? Most are registered in other British Overseas Territories and satrapies, such as the Bahamas, Bermuda, the British Virgin Islands, and the Isle of Man.

Global Financial Oligarchy's Instrument
Since mid-January, forces internationally�ranging from the Danish government, to German Vice Chancellor Franz M�ntefering (who has famously labeled hedge funds "locusts"), to U.S. Sen. Carl Levin (D-Mich.)�have directed initiatives geared to regulating, and potentially bringing under control the predatory activities of the world's hedge funds. For his efforts, M�ntefering was outrageously attacked on Feb. 14 by the German edition of the Financial Times, the London financier oligarchy's mouthpiece, as an "anti-Semite."

http://www.gata.org/node/48928p ET Wednesday, March 7, 2007

Dear Friend of GATA and Gold:

Back in 1999, not long after GATA was founded, the first personage of the financial establishment to engage us in cordial correspondence was Martin A. Armstrong of Princeton Economics International in New Jersey. Armstrong disputed our contention that the gold market was manipulated, a contention we now consider proven by the several admissions of central bankers and other major players in the gold market since that time. But we did credit Armstrong for an insight with which we increasingly have agreed over time -- that the central banks should sell all their gold and thereby remove the overhead supply and forfeit their power of market manipulation and unleash a lasting bull market for gold. We just wanted the central bank selling and leasing to be done openly and with proper accounting so the world would understand the manipulation.

Soon after our correspondence Armstrong ran into trouble with the U.S. government. We're not in a position to judge his culpability but his long imprisonment on a count of contempt of court -- now more than seven years -- is beginning to seem tyrannical, like too many other things recently in the United States. A few weeks ago The New York Times published a story updating Armstrong's situation. Thanks to our friend Mark Webber for bringing it to our attention. It is appended.

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

* * *

In Fraud Case, 7 Years in Jail for Contempt

By Gretchen Morgenson
The New York Times
Friday, February 16, 2007

On Jan. 14, 2000, Martin A. Armstrong, a globe-trotting investment manager, was told to produce $15 million in gold and antiquities, as well as documents, in response to a civil suit by the government accusing him of securities fraud involving hundreds of millions of dollars.

When he said that he did not have the items and could not produce them, a federal judge ordered him jailed for contempt of court.

Seven years later, Mr. Armstrong sits in the Metropolitan Correctional Center in Lower Manhattan.

Imprisoned two years before Enron and WorldCom brought corporate crime to center stage, Mr. Armstrong, 57, is the white-collar defendant time forgot. Over the years, the losses of his former clients have been repaid by a bank involved in his trades.

Still, he remains jailed on one of the longest-running charges of contempt. In many cases, a federal law limits to 18 months how long someone can be held under civil contempt while the court tries to coerce compliance with an order. Even in cases of criminal contempt, whose goal is punishment rather than coercion, an individual is entitled to the full protections of due process after six months.

"A legal proceeding is supposed to be the quest for truth," Mr. Armstrong said in a phone interview last week from the 12-story building, which is used mostly as a temporary holding site for prisoners. "But this contempt was used to stop me from going to trial, and it's been nothing but bad faith from the government ever since."

How Mr. Armstrong has been held for so many years without a trial is a tangled and bizarre tale. Mr. Armstrong, his lawyers say, has been stuck in a surreal situation in which criminal prosecutors have never had to prove their 24-count indictment at trial while the civil case tied him up. Nevertheless, they have gotten their desired result -- a lengthy prison term for Mr. Armstrong.

Last August, he pleaded guilty to one count of conspiracy in the criminal case. He struck that deal with federal prosecutors after he was moved from the 75-square-foot cell he shared with another prisoner into solitary confinement and had not slept for days, his lawyer said. Over the years, prosecutors have said that they were ready to proceed to trial and that civil contempt had nothing to do with their case. Mr. Armstrong countered that his detainment impeded his efforts to mount a proper defense, blocking his access to essential documents and computers as well as the assets to pay counsel.

Because there has been no jury trial in the case, it is impossible to say which side is right: the government, whose indictment in September 1999 contended that Mr. Armstrong misappropriated hundreds of millions in client funds; or Mr. Armstrong, who said that officials at the bank executing his trades generated temporary losses that could have been recovered in the market. (Two of those officials later pleaded guilty to fraud in a related case involving the bank.)

But this much is certain: Mr. Armstrong's years in jail for civil contempt will soon exceed the sentence of 6.5 to 8 years that he would have received if he had been convicted of all 24 criminal counts of securities fraud, commodities fraud, and wire fraud.

"The case sends a very bad signal," said Bernard V. Kleinman, a criminal lawyer in White Plains who represented Mr. Armstrong until 2004 and argued twice for his release before the U.S. Court of Appeals for the 2nd Circuit, in Lower Manhattan. "I think it bodes very ill for anybody held in civil contempt. District court judges can look at this case and feel that the likelihood of the circuit reversing them is small and that time is, in and of itself, no factor in determining whether civil contempt has lost its coercive effect and has become punitive."

John F. Keenan, the federal district court judge overseeing the criminal case, has not yet sentenced Mr. Armstrong. It is unclear whether the judge will give Mr. Armstrong credit for the time he has served. Under federal sentencing guidelines, his lawyers expect a sentence of about five years.

A spokeswoman for the U.S. attorney in Manhattan said the office did not comment on open cases.

Judge Richard Owen, the senior district judge who ordered Mr. Armstrong held in contempt, still sits on the bench in the Southern District of New York, where he has been for 34 years. When he ordered Mr. Armstrong taken away by federal marshals, he declared, "Mr. Armstrong has the keys to the jail cell in his pocket by production and telling people where to go to get it and dig it up and turn it over."

Over the years, Judge Owen would revisit the contempt order every 18 months, guided by the federal statute. He repeatedly said that Mr. Armstrong was motivated by greed and was awaiting his release from jail to retrieve the $15 million that the government said was missing. According to lawyers who worked on the case in the early days, the financier's headstrong manner irritated Judge Owen almost immediately.

But Judge Owen was moved off the case in November by a panel in the 2nd Circuit Court hearing Mr. Armstrong's third appeal on the contempt charge.

The three judges unanimously rejected the appeal to free Mr. Armstrong but found that on the seventh anniversary of his confinement, "his case deserves a fresh look by a different pair of eyes."

It was the second time in less than a year that the Second Circuit had ordered Judge Owen replaced on a high-profile case. In March a panel overturned the 2004 conviction of Frank P. Quattrone, the former investment banker at Credit Suisse, because Judge Owen failed to instruct the jury properly; the panel assigned the case to a new judge in the "interest of justice." Later the government decided not to retry Mr. Quattrone.

Judge P. Kevin Castel has taken over the Armstrong civil case. A hearing is scheduled on the contempt matter for March 15. A request to interview Mr. Armstrong in person was denied by corrections officials, and Judge Owen did not return a call seeking comment.

At the peak of his career in the mid-90s, Mr. Armstrong oversaw $3 billion in client assets. He was widely quoted in the financial news media, including The New York Times, on interest rate and currency movements. He began working at a coin and stamp dealership when he was 13 and opened a collectors' store when he was 21. He founded Princeton Economics International, based in Princeton, N.J., in 1981.

Mr. Armstrong, an intelligent and imperious man who claimed to have made his first million by age 15, seems to have begun having trouble in 1999 when trading losses turned up in accounts that were held for the firm at Republic Bank. The problems appeared as the HSBC Group conducted a financial review before acquiring Republic.

The government said that Mr. Armstrong had improperly commingled accounts and overstated the value of the account's securities in client statements.

Mr. Armstrong said that he did not authorize the transactions that produced losses and that he was not involved with commingling of the accounts. He was indicted in September and released on $5 million bond.

In January 2000 the receiver appointed by the court in the civil case said that Mr. Armstrong had purchased gold coins and other assets with his firm's money. His lawyers argued that the assets might have been purchased before the suspected wrongdoing.

When Judge Owen ordered the assets returned, Mr. Armstrong delivered four of the five computers sought, eight of the 11 requested boxes of documents, and gold coins worth $1.1 million. He said that was all he had. The receiver said assets worth about $15 million were missing. Mr. Armstrong's odyssey in the judicial system began.

His assets frozen, Mr. Armstrong has been unable to pay lawyers. He now relies upon David Cooper and Steven Z. Legon, two lawyers from the Criminal Justice Act panel, set up to help indigent defendants, and Thomas V. Sjoblom, a lawyer at Proskauer Rose, who has received nominal compensation.

"On what grounds can you tie up the system of criminal procedure and civil procedure and hold everything in abeyance during contempt?" Mr. Sjoblom asked. "What about your speedy trial rights? What about the government's need to move forward in the civil case? You're using the contempt process to wring a settlement or a plea out of the person. That, to me, is abuse of the process."

Over the years, more than half a dozen government lawyers have cycled through the case. In 2003, Mr. Armstrong changed his legal approach in challenging the contempt charge, saying that he did not have to produce the assets and citing his Fifth Amendment right.

The receiver, meanwhile, has recovered the vast majority of money said to have been lost by investors in the case. In January 2002, Republic New York Securities, a brokerage firm that housed Princeton Economics' accounts, pleaded guilty to conspiracy and securities fraud charges. Republic Bank paid $606 million to victims, all Japanese companies. It was "full restitution," the assistant United States attorney said at the time.

Alan M. Cohen, then a lawyer at O'Melveny & Myers and now executive vice president and global head of compliance at Goldman Sachs, is the court-appointed receiver.

His former colleague, Tancred V. Schiavoni, a lawyer at O'Melveny, said that all the victims had been satisfied. "We tried to do the right thing, and we've gotten nothing but grief," he said. "What this guy wants is to be given credit for time served on the contempt and leave with the money."

O'Melveny & Myers has received at least $3.9 million to cover its fees and disbursement over the years, according to court filings.

The discovery process was protracted partly because of the complexity -- hundreds of boxes of materials had to be examined and data transcribed into digital format -- and because Mr. Armstrong was in jail and relying on lawyers working pro bono.

In January 2006, criminal prosecutors said they were eager to put Mr. Armstrong on trial in October. Then in early August, federal prosecutors appeared at the correctional center to strike a plea deal. The visit, Mr. Sjoblom said, came a week after Mr. Armstrong had been ordered into solitary confinement -- known as "the hole" -- for damaging a vent in a common area.

Mr. Armstrong pleaded guilty to one count of conspiracy to commit securities fraud for failing to keep his investors informed about losses and for agreeing to make investor funds available to Republic to cover Princeton Economics' unrelated trading losses.

"I think the government just wore Marty out," Mr. Sjoblom said.

On Dec. 7, Stephen J. Obie, regional counsel for the Commodity Futures Trading Commission, visited Mr. Armstrong with a settlement offer in which he would sign over some $30 million as a penalty. Mr. Armstrong declined.

The Securities and Exchange Commission and the CFTC declined to comment on the case.

The government has said that $21 million is still owed. Even if that must be paid by Mr. Armstrong's firm and not Republic Bank, an estimated $40 million is left in what was once Princeton Economics: $30 million in the United States and $10 million in a British entity. Mr. Armstrong and his lawyers learned of the $10 million three weeks ago.

Mr. Armstrong, who is divorced, has two children and an elderly mother who await his release. His daughter, Victoria Armstrong, 30, visits most Wednesdays, spending about one hour with him in a common room with other visitors and prisoners.

"You never stop thinking about where he is and what he goes through," Ms. Armstrong said in an interview last week.

Her brother, Martin, 31, said he was bewildered at what he sees as the breakdown of due process in his father's case. "That you can keep someone in contempt for such a long time with so many unanswered questions -- that part of it has been a real eye-opener," he said.

Sonia Sotomayor, a judge on the 2nd Circuit panel that heard Mr. Armstrong's appeal last year, seemed to echo this point. "The district court's finding that Armstrong is motivated solely by greed is not enough to justify disregard for due process," she wrote. "Courts must exercise caution in their use of the contempt power and must recognize when it has reached the limits of its utility."

http://translate.google.com/translate?hl=en&sl=fr&u=http://secretebase.free.fr/complots/organisations/bohemian/bohemian.htm&sa=X&oi=translate&resnum=3&ct=result⪯v=/search%3Fq%3Dle%2Bsuis%2Blafitte%26hl%3Den%26sa%3DGThankx fer respondin Cometose.
Have you seen this link?

Cometose, if you scroll down to bottom, hit button, goes to where I meant to link.

I'm pleased to learn that there's someone else (beside just me) who's gaining some insight from this particular ritual of observing the evolution of the Eurosystem's reserve architecture.

To answer one of your questions, when the EMI transitioned into the ECB, on euro-launch day -- January 1, 1999 -- the Eurosystem's gold holdings (EUR 99.5 billion) represented only a slim third (30%) of total reserves. At that time, the net position in foreign currency was EUR 227.4 billion, making up 70% of their total Int'l reserves.

From my other post today, it is truly warranted to say, "My, look how far they've come," -- gold holdings now represent 55% of total reserves.

Structurally, the consequences of the monetary union created a unique circumstance regarding an opportunity of "excess" reserves among its member states, but the lesson remains valid regarding the shift in proportions of their holdings.

Now, can anyone imagine China beginning to follow in those giant footsteps? In the course of that affair, you can be sure that China won't be a CBGA-style gold distributor, but rather an accumulator.

Subsequently (these years following the euro-launch), even within the U.S.-dominated IMF we now see the majority of its participants following this European-style MTM accounting as the new standard in best practice. It's only a matter of time before the U.S. Govt, too, grudgingly but necessarily travels that golden trail.

To address your other question, no, I don't have a continuous table or chart of the evolution in Eurosystem reserves. I only have a handy set of periodic and notable benchmarks along the way. Having a continuous chart to show off would probably be a very useful instructional tool. I'll look into assembling one when time allows -- probably not until later this summer.

Thanks for the feedback.

R.

Mmmm....I'm well behind in my reading of The Forum, but noting Greenspan's "casual" remarks of late (about recessions and yen carry trades and the like) made me wonder what the consequences would be if the dear man were to make a few "casual" (positive) remarks about gold...

I wonder what his "release agreement" entailed when he left The Establishment?

I wonder if he is on a retainer with any particular lobby groups??

Just thinkin...

;-)

@ TC,

"Now, can anyone imagine China beginning to follow in those giant footsteps? In the course of that affair, you can be sure that China won't be a CBGA-style gold distributor, but rather an accumulator."

Not that I am specifically contradicting your guess, but watching China, one thing that stands out is NO ONE REALLY KNOWS what they are planning, and they seem to like it that way.

Politically speaking, a shroud of mystery or uncertainty certainly has its advantages.

But on the point of gold, did you see the notice given three weeks ago by its appropriate agency that China expects to develop something on the order of 1500 tonnes domestic reserves of gold by the year 2010?

It surely gives one reason to ponder why they felt a desire to divulge such info... and WHY THIS (odd???) TIMEFRAME?

I seem to recall a rather handsome fella speaking of 2010 as a political convergence point for gold's bright future. Was China signalling acquiescence with such a timeframe? They've certainly taken the schedule of liberalization of their gold market as a political priority during this decade for SOME reason or Another.

R.

http://www.rawstory.com/exclusives/steinberg/world_war_III_063005.htm

I think China is not as stealthy as everyone thinks.
They are building a massive army and from what
I gather our satellites are tracking many of their
moves.

What do they have to hide that we don't already know?

We will be in a dance with them for many more moons!

GF

@TC,

Again, I'm not quibbling with your reading of their "announcements", but others have noticed the Chinese are famous for announcing one intention on Monday, followed by a contrary one by a completely different source on Tuesday. They seem to have more than ample bureaucrats to match their gargantuan population, so there are innummerable "agencies" that may from the outside seem to overlap in jurisdiction.

Just the sort of hierarchy to embellish their "shroud of mystery".

http://www.usagold.com/cpmforum/archives/620073/default.htmlMy great gold-minded friend, G, asked me if I would care to help him out with an assessment of OvS's intriguing post about "Trust, etc." -- msg# 153145.

It began...

OvS (3/6/07; 16:36:24MT - usagold.com msg#: 153145)
Trust, ect.
Why do foreigners invest in the
US stockmarket and trillions into
the US bond and treasury markets?
Are they really stupid? No, they
are clever and sharp like rasor-
blades.
The simple answer is:
They want to sell 10 billion of
whatever, or buy, the US market
will accomodate them. LIquidity!!
When you think about it: liquidity
equals to trust and confidence.
Let's say you are a successful
Chinese. Would you rather trust the
Japanese markets or Europeans, or
the US markets? When it comes to
the really big deals, there is no
equal to the United States Market.
Period.
All these Arab trillion, made with
oil revenues. Where do they wind up?
In Manhattan and London. Who else
can you trust with billions?
. . .(continued)
---[see url for the full post]---

Upon getting my response, my friend requested that I post it, thinking it might be of benefit to a few others. Therefore, here is my (windy) critique -- the response to his emailed inquiry.
____________________________________

> Any thoughts on OVS mes # 153145 ?
------
...First of all, let me say I'm glad you took specific notice of it
and have called attention to it for full scrutiny.

OvS makes a very good point where he says up front,

"Liquidity!!
When you think about it: liquidity
equals to trust and confidence."

It sounds good on the surface, but an astute thinker will recognize
that there is more here than meets the eye.

Simple equality implies that both sides of the equation are simply equal,
and that further details are unnecessary.

Consider, 2 plus 3 equals 1 plus 4...

2+3 = 1+4

It would be just as valid to reverse order and say

1 plus 4 equals 2 plus 3...

1+4 = 2+3

It goes without saying that either half could be scrutinized as follows...

2+3 = 5
also
1+4 = 5

That order makes a natural presentation. However, you will note that even
though we are dealing in equivalency, it nonetheless seems a bit queer to
change the order and say it as follows...

Five equals two plus three
or
5 = 2+3.

Perhaps it seems odd in that order because it is sounds too definitive -- as
though it were the all- inclusive situation. However, we inherently know that
it isn't. We know as we read it that it could have been stated alternatively
with matching validity...

Five equals 1+4.

The essential point here boils down to Cause and Effect.

2+3 can be the Cause of the singular Effect we know as 5.

Similarly,
1+4 can Cause the singular Effect we know as 5.

In these examples of equality, we recognize that there tends to be
a natural assignment of Causes and Effects, each to its respective side.

That is to say, even though it is mathematically acceptible, it is not quite
natural to portray the reverse ordering

5 = 2+3

because it implies that, if we make a simple initial observation that "five" exists,
that it is a Cause of a predictable, singular Effect. But we know it isn't.

Thus, it is best to say it (and to order it) as so...

2+3 >> 5

Whereby my >> symbolism implyies that there is a (directional) natural progress
of Cause and Effect in the particular type of equivalency that is being scrutinized.

From the lesson above, OvS's opening statement would therefore be more
intuitively arranged if it were presented as the following equation.

trust and confidence >> liquidity!!

That progession of T+C giving rise to Liquidity should sit most naturally in our mind.

OvS does eventually make this subtle but very important point, although it
isn't completely made until the latter portion of his post. He says, astutely:

"So what's the problem?
Well, liquidity and trust and confidence
only go so far. When liquidity (injec-
tions of the Federal Reserve) is used
to CREATE trust and confidence, then
watch out..."

Interestingly, he goes on to say,

"There is a fine point in
balancing these entities and that balancing
act I leave to more accomplished jogleurs
and hope for the best."

So, I hope I've successfully juggled some good sense into a helpful
interpretation of his words.

All this is to say, the U.S. (with the Fed as its monetary agent) has been
benefiting by playing on the world's sloppy sense of equivalency regarding
Liquidity and Trust+Confidence vis-a-vis Cause and Effect.

Just as the world can, for a period, be inclined to believe strongly that, given FIVE,
it naturally follows that TWO+THREE is present.

OR, perhaps the world tends to believe almost as strongly that given FIVE,
it follows that ONE+FOUR is present.

We, however, are clever enough to know that an equally valid (but considerably
less popular) worldly interpretation could be, given FIVE,
the other side can simply be FIVE+ZERO.

Do you get the important difference?

We SHOULD say, with the PROPER ordering of Cause and Effect, that
Trust plus Confidence give us Liquidity as the payoff.

Trust + Confidence >> Liquidity.

However, by focusing on liquidty, the U.S. Fed is TRYING to turn around this
directional equivalency -- to engender a popular interpretation that Trust and Confidence follow as an effect. Presented graphically...

Liquidity >> Trust + Confidence.

What does this all mean? The appropriate word of caution in this backwards
focus should now be readily accessible. In the good company of our deeper
thinkers, we are keenly aware that Another very valid outcome of this
backwards presentation of liquidity as the given (i.e. as the Cause) could
certainly be this following sad hyperinflationary conclusion (Effect):

Liquidity >> Liquidity + ZERO

In other words, as the focus, a provision of liquidity can, in the extremis, be
liquidity and nothing else;
such as piles of cash (or accounts loaded with digits) having NO VALUE in trade.

Was this useful?

Randy

Good question. The syndicate.

Randy, you're a genius. The simplicity of your reasoning can be applied to EXPLAIN some things I considered illogical. Sincerely, Thank You.

http://glumbert.com/media/economics
Hey, let's keep it simple.

Here is a quick vid on economic principles.

NICE ONE

Simple ........and Lying there right underneath our noses
in the state of illusion /delusion

ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

Druid: TC, homerun that cleared the stadium. I nominate this one for HOF status. Thanks.

If the volume of demand for U.S. dollar denominated investments increases sharply while interest rates are falling in the U.S. and rising abroad, it cannot be explained in terms of nominal returns. What seems to be reflected here is a "risk-adjusted" return. In other words, the U.S. has become increasingly the world's "safe haven" for investments, made even more attractive by the depth and freedom of our markets.

We seconds! Thank you for that illuminating insight. ~8-)

You've postulated:

"Foreign Exchange Value of the Dollar
If the volume of demand for U.S. dollar denominated investments increases sharply while interest rates are falling in the U.S. and rising abroad, it cannot be explained in terms of nominal returns. What seems to be reflected here is a "risk-adjusted" return. In other words, the U.S. has become increasingly the world's "safe haven" for investments, made even more attractive by the depth and freedom of our markets".

I'm really in total disagreement with your statement; After all the US $ has lost about 30 - 40% in value vs some harder currencies in this scheme of a free floating currency regime, backed by nothing as promises to pay back... what?! The lender of the last resort used to be the IMF and its SDR's, which seem out of fashion, or altogether defunct. The purchasing power of all currencies and in particular the US Dollar has even surpassed its fall vis a vis other currencies.

What I see here is a mad scramble for liquidity to bail out underwater financial assets such as margin positions, hedges or plain buy the dips mantra.

No, Sir, IMHO this is just a dead cat bounce in the safe haven of attractive by the depth and freedom of the $- markets - well, maybe you've been meaning this ironically and in this case I rather not be tempted to even grin.

I guess - and I won't say again the time is near to repent as to redempt is only past tense from here on - so, the time of the pm complex to seperate smartly from all financial safe havens to the real safe haven of pm's is close - we only have to work off the few decades old mantra of the Dollar and floating rate delusion of debt backed paper and the need for constant growth within a finite world.

Someone a lot smarter than I said - as a holder of physical gold you'll only perish in the second row; It was by no means my friend OvS, who probably seduced Mr. Straus to over-interpret his latest missives.

Be that as it may - It's only over when it's over - and we're still in a young gold bull; Some fireworks may be seen even before summer, though probably not the last.

Cheers cb2

http://www.bis.org/review/r070308a.pdfRemarks by Mr Ben S Bernanke, Chairman of the Board of Governors of the US Federal Reserve System, before the Independent Community Bankers of America's Annual Convention and Techworld, Honolulu, Hawaii (via satellite), 6 March 2007.

SNIPS :

"This line of business has raised public concern because its fundamental source of profitability is the widespread perception by investors that the U.S. government would not allow a GSE to fail, notwithstanding the fact that � as numerous government officials have asserted � the government has given no such guarantees. The perception of government backing allows Fannie and Freddie to borrow in open capital markets at an interest rate only slightly above that paid by the U.S. Treasury and below that paid by other private participants in mortgage markets. By borrowing at this preferential rate and purchasing assets (including MBS) that pay returns considerably greater than the Treasury rate, the GSEs can enjoy profits of an effectively unlimited scale. Consequently, the GSEs� ability to borrow at a preferential rate provides them with strong incentives both to expand the range of assets that they acquire and to increase the size of their portfolios to the greatest extent possible."

"From the end of 1990 until the end of 2003, the combined portfolios of Fannie Mae and Freddie Mac grew more than tenfold, from $135 billion to $1.56 trillion, and the share they hold of outstanding residential mortgages increased from less than 5 percent to more than 20 percent.5 Moreover, to finance their own holdings of MBS and other assets, in 2005 the two GSEs together issued almost $3 trillion in debt. Today, the two companies have $5.2 trillion of debt and MBS obligations outstanding, exceeding the $4.9 trillion of publicly held debt of the U.S. government (Lockhart, 2007). The activities of the GSEs are not confined to debt markets; because the GSEs engage in extensive hedging activities, these companies are among the most active users of derivative instruments. Thus, by any measure, the GSEs have a significant presence in U.S. financial markets."

----------------------------------------------------------------------------------------------------------------------
See URL for full text...

Smeagol (3/8/07; 11:11:33MT - usagold.com msg#: 153197)
TownCrier (3/8/07; 02:47:54MT - usagold.com msg#: 153188)
We seconds! Thank you for that illuminating insight. ~8-)
===
The Hobbits "thirds" !
Go to the FORUM HOF, without passing GO !
<;-)

90.9 -0.36 -0.17
95.5 0.03 -0.01
95.5 0.07 0.04
95.5 0.17 0.00
95.5 0.08 0.00
95.5 0.25 0.03
97.4 0.38 0.00
96.5 0.08 0.03
97.0 -0.06 0.00
97.4 0.65 0.00
101.5 0.60 0.00

The table represents the volume of legal reserves required to sustain real gdp at c. 2% without inflation. A lower volume of reserves will result in declining rates of inflation and slower roc's of real gdp; higher roc's will produce increasing rates of both real gdp and inflation.

Aggregate monetary demand is measured by monetary flows (MVt), not nominal GDP.

The source of our means-of-payment money is legal reserves.

All of the variables needed to estimate the "multiplier" (the ratio of a given injection of new reserves into the member banks relative to the expansion of money) are well known and can be estimated with sufficient accuracy. These include: the ratio of currency held by the non-bank public to their holdings of transaction deposits, and the reserve ratios applicable to various classes of deposits within each size group.

----------------------------------------------------------------------------------------------------
1) 30 year mortgages
http://research.stlouisfed.org/fred2/series/MORTG?&cid=22

2) Trade weighted exchange rate � Broad
http://research.stlouisfed.org/fred2/series/TWEXBMTH?&cid=15

3) Trade weighted exchange rate � Major Trading Partners
http://research.stlouisfed.org/fred2/series/TWEXMMTH?&cid=15

http://money.cnn.com/2007/03/08/news/economy/inflation.reut/index.htm?section=money_news_economyEconomists warn Fed on inflation expectations
To judge if their policies are working, central banks often rely too much on inflation expectations, according to a paper.
March 8 2007: 4:52 PM EST
WASHINGTON (Reuters) -- Several economists warn the Federal Reserve and other central banks in a paper released Thursday against relying too much on inflation expectations to assess whether their policies are indeed keeping prices stable.

"Our data findings serve as something of a cautionary note for policy-makers against excessive reliance on measures of inflation expectations as indicators of policy effectiveness," wrote the economists in a paper on the inflation process to be presented at a conference Friday.

Some policy-makers focus intensively on inflation expectations as the primary determinant of inflation itself, the economists said.
"Our results suggest that this practice is misguided," the study's authors wrote.

The authors of the paper, "Understanding the Evolving Inflation Process," are Stephen Cecchetti, Peter Hooper, Bruce Kasman, Kermit Schoenholtz and Mark Watson.

Fed officials often cite the importance of keeping inflation expectations low as way to keep inflation itself under control. If inflation remains too high for too long, businesses and consumers begin to make future plans for spending and investing on the expectation that prices will rise by a certain amount, leading to inflationary pressures.
In the current situation, Fed officials are worried about higher than desirable core inflation levels but cite low inflation expectations as grounds for optimism that core inflation will recede.

"A further gradual decline [in core inflation] was seen as the most likely outcome, fostered in part by the continued stability of inflation expectations," minutes of the Fed's Jan. 30-31 meeting said.

The study says none of the various measures of inflation expectations appear to have been able to forecast U.S. core inflation in recent years."
Mikal-- Looking ahead, the vested Fed may wed a gold-plated bed, or in their stead a nested BIS dread or arrested.
Greenie plead, "I am well-bred, don't turn red- the dollar bled, we are well-rested".

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

March 8 (MarketWatch) -- Gold futures climbed for a third-straight session to end Thursday at their strongest level in a week, supported by a solid performance on international stock markets and strength on Wall Street.

"We received our expected bounce/reversal and that was the easy short-term call," said Peter Spina, chief investment strategist at GoldSeek.com. "Now we will watch in the coming sessions if these gains can extend." He said he believes "this momentum will continue to take us back to the upper $600s." But for now, "a move past $655 is the first step before moving back up to the $675 resistance area."

Friday's "economic reports may be the catalyst to help gold move past this initial $655 resistance," said Spina. Economic data due Friday include U.S. trade deficit numbers, non-farm payrolls and the unemployment rate for February.

"The next trading day looks favorable for gold, good bid support below at this time. An upward bias is seen even with a bit of jitteriness lingering from the recent sell-off," he said.

The COMEX April gold contract closed up $2.60 at $655.50. It's now gained $16.30 during a three-session climb, which followed a five-session losing streak that drew down prices by more than $50.

On the currency markets, the dollar rose against major counterparts, putting some pressure on April gold, which touched a low of $652 during Thursday's trading session. The euro fell against the dollar after the European Central Bank raised its key interest rate by a quarter-percentage point to 3.75%.

"Sentiment has improved dramatically across the metals spectrum in the past 24 hours through a combination of fundamentals and external factors such as the dollar and oil," said James Moore, an analyst at TheBullionDesk.

Still, "overall, the next few days are likely to be nervous as the [metals] market digests why the recent sell-off rippled through so many markets and what it was telling us," said William Adams, an analyst at BaseMetals.com.

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

Violent Crime across the nation is UP ......

THAT IS A LEADING ECONOMIC INDICATOR........

It indicates that there is nowhere near enough education

on PLANNING (short and longterm)

SELF SUFFICIENT THINKING

Multi dimensional approaches toward financial independence

Foundational survival skills .....

Goal Setting

and the act of focusing on Believing Images of victory.....

Proactive Thinking

It also indicates that the leaders in charge of compiling and reporting ECONOMIC NUMBERS ............

are LYING THROUGH THEIR TEETH

Dead on about soaring crime rates as proof of a declining economy. Another obvious dot mainstream media can't seem to ever connect.

The ficticious government numbers on the economy are skewed in SO many ways. Of the many is how as income disparity grows, 1 yacht that sells for 150 million can mask the general decline of an entire city, yet it's all GDP to beancounter eyes. I assume too for CPI purposes that yacht is hedonically deflated to reflect quality improvements. It was actually 200 million before hedonics, vs. 145 million a year ago. Voila! we have both a strong economy and low inflation at the same time. It's all a big steaming load.

Topaz, Silver Fox, Thoreauly, etal:

I'm glad you found the video/slide presentation (http://www.businessjive.com/nss/darkside.html) interesting and successful in raising some real concerns -- I actually found it so much as the straw-that-broke-the-camel's-back to make me liquidate half my holdings in the stock market.

This little video, although nowhere near as terrifying, is by its sheer existence telling us that the need for security that gold provides is permeating the mainstream (this is the third clip I've seen on gold on this site in two weeks). Do note the political innuendos:

http://videoplayer.thestreet.com/?clipId=1373_10343348&channel=Market+Strategy&puc=yahoo&ts=1173412471801&bt=NS&bp=MAC&bst=FF&biec=false&format=flash&bitrate=300

Thanks Randy, today I heard that china invested(?) 200 billion in fannie and freddie, and THAT was where the money came from to loan to all the marginal home buyers.
The loans that will be first perhaps to flounder in a downturn.

@ Comatose, the Hoople,

It's business as usual.

A CEO gets a multi-million dollar bonus for kicking 1000 workers to the street and demanding 60 hr weeks of his remaining workers, who must give up the vacation and health care benefits promised when they were hired. Despite his public self-effacing remarks, does he really care? Certainly not enough to pledge the bonus he got for sacking them to their welfare, nor enough to put his golden parachute on the line.

Banks create a zillion ways for people who can barely afford to live to mortgage their future, skimming hefty loan origination fees off the proceeds of the loan. Then they entice customers to borrow once again to get "caught up", jumping their rates to astronomical levels as "Credit risks". Risk? HAHA. The loan was generated from fractional reserve thin-air, and between the origination fees and the astronomical rates, it gets paid off three or four times. Poor, indigent banksters!

Captive utility customers see their rates double and triple to support "deregulation", only to find out it winds up in some ENRON political slush fund in a Caribbean Bankster haven. When word gets out, the "big cheeze" is "suicided" prior to sentencing, because he spent a few too many days visiting the White House while his company was bilking the public.

MNF viewers give $400M to "Katrina Relief" supported by their gridiron heroes and marketed by two ex-presidents, but not a penny went to any "victims". It is being earmarked to rebuild New Orleans for some politically-connected developers.

Gold is confiscated and forbidden to the American people for 40 years, because bankster "speculation" and margin debt has gambled away their savings. Then laws are passed so their own taxes must be used to bail the gamblers out and replace their losses in future scandals.

The Maine, the Lusitania, Pearl Harbor, and Gulf of Tonkin "intelligence" is hidden from the public and they are fed "rah rah" ideological horse hooey to get them aroused enough to use their children as human sacrifice to the gods of commerce, who are so greedy they must always challenge each other for control of more wealth than any human could ever spend. The modern world has elevated human sacrifice to assembly line proportions.

Yep, in the immortal word of Dubya's daddy, when describing the CIA planned and executed wholesale slaughter of 100,000 non-Europeans in South America with more than a third-grade education "on his watch",

"it's business as usual!"

Free markets? Ha! Name one!

OvS seduces Mr.Straus.
If it weren't so funny
I'd be outraged.
Still laughing.

I always knew that Straus
either is/was a talmudic
scholar or a jesuitic mind
or a grammar school math
teacher. But what the hell.
As long as he loves gold,
all is forgiven. OvS

If I understand this correctly, China announced today that they will be taxing US businesses in their country in order to prop up their value losses in the dollar. Sorry no URL. Maybe some of you people can research this. Just a heads up.

http://news.bbc.co.uk/2/hi/business/6430011.stm@ Gonlyold,

Is this what you are referring to?

snip:

Many foreign firms investing in China are to lose tax benefits they have over domestic firms as a result of reforms proposed by the government.
Tax paid by foreign and domestic firms will be unified at 25% under the plans.

China has also unveiled a series of tax breaks to promote high-technology business, energy saving and environmental protection.

It came as the US treasury secretary urged China to open its financial markets faster to boost the economy.

'Diverse economy'

On a visit to Shanghai, Henry Paulson said that open markets were the best way to ensure prosperity.

"The risks for China are greater in moving too slowly than in moving too quickly towards transparent, liquid, stable markets," he said.

He urged China to move away from low-cost manufacturing, which has caused major environmental damage.

"Your long-term economic strength requires a diverse economy with high value-added manufacturing and world-class services, including financial services," Mr Paulson said.

Domestic firms currently pay income tax of 33%, while foreign-funded businesses pay between 15% and 24%.

Under the reforms, China's finance ministry expects domestic forms will pay a total of 134bn yuan ($17.1bn; �9bn) less in tax, while the overall bill for foreign firms' tax bills will rise by 41bn yuan.

A controversial 50% tax break for foreign firms that focus on exports - which the US had said was anti-competitive - will be scrapped.

High-technology firms will be taxed at 15% under the reforms, which are set to be approved later this month.

"The reform of unifying the two income tax laws will not only promote improvements in China's economic structure and upgrading of is industries but help create a legal environment conducive to fair competition," said Finance Minister Jin Renqing.

Controversial

However, analysts did not expect an eradication of the preferential tax regime to deter foreign investment into China.

"A lot of foreign companies no longer regard these kind of so-called tax incentives as a major driving mechanism for them to continue to invest in China and work in China," said Edward Tse of consultants Booz Allen Hamilton.

The Chinese government's tax revenues jumped 22% in 2006, official figures show. In addition to the fast-growing economy, China's tax revenues have been boosted by increased efforts to collect taxes from private businesses.

http://news.bbc.co.uk/2/hi/science/nature/6430563.stmsnip:

According to a former Brazilian ambassador in Washington, Rubens Barbosa, the tour is a belated attempt by Mr Bush to regain ground lost to Mr Chavez as a result of the US administration's neglect of Latin America.

Sugarcane-derived ethanol provides 45% of Brazil's transport fuel

In the case of Brazil, Mr Barbosa says that while co-operation between the world's two largest ethanol producers is welcome, the real benefits will come only when the US lifts its steep tariffs on imports of biofuels.

"This is a limited proposition, because as far as Brazil is concerned, what matters is the reduction of the restrictions, the protectionist attitude that the US has towards ethanol," he told BBC News.

"The duties that the US imposes on ethanol is nearly equal to the price of production, yet Brazil is so competitive that we are exporting directly to the United States, despite the duty.

"To say in advance that this issue is not on the table shows how this matter is being dealt with by the administration, only in the area that is of US interest."

The big sugarcane growers of Brazil, who already supply some 45% of vehicle fuel in the country, have welcomed the initiative to expand the ethanol market in the Americas, but also argue that the US import tariffs make no sense.


Bioethanol is big business in Brazil

Alfred Szwarc of the Sao Paulo sugar growers' association (UNICA) says the current US trade position penalises renewable fuels while rewarding fossil fuels. It should, he said, be the other way around.

He believes that while tariffs are not on the official agenda of the presidential visit, moves are afoot in the US Congress that could eventually reduce or end the protectionist policies on biofuels.

-Goldilox

While Dubya trumpets his trip to Brazil as a "victory" for biofuel, the Brazilians remind him that the US taxes the snot out of biofuel imports to "protect" his oil czar "friends and family".

http://news.bbc.co.uk/2/hi/business/6432941.stmsnip:

Membership of the world's billionaire club has swelled to almost 1,000, while members' net worth has risen by 35% on last year, according to Forbes.
A record 946 billionaires - worth a total of $3.5 trillion (�1.82 trillion) - now exist, up from 793 last year.

Microsoft founder Bill Gates held the top spot for the 13th year in a row with a net worth of $56bn.

Forbes put the increase in wealth down to surging commodity prices, real estate and strong equity markets.

"In the last five years... despite all the turmoil in the world, all the conflict in the world, the global economy in real terms expanded over 25%," said Steve Forbes, the magazine's editor-in-chief.

"Never in history has there been such an advance."

-Goldilox

Hard to determine just how much this reflects "wealth transfer", and how much it demonstrates hyperinflation at work. More "statistics".

As Puplava reminds us, the defiinition of a millionare in California is "home-owner".

Minneapolis is sending KC 50 policeman to help curb gang violence. Were #1 in the nation in violent crime. There have been a string of gun battles. The chief of police held up a machine gun this morning that was used to fire on the police. It was from teenagers who were in a drive by shooting. They got caught murdering 2 of their rivals.

http://www.reuters.com/article/hotStocksNews/idUSN0823121220070308snip:

NEW YORK (Reuters) - New Century Financial Corp. shares fell as much as 34.1 percent Thursday on market speculation that the subprime mortgage lender would seek Chapter 11 bankruptcy protection, analysts said.

Laura Oberhelman, a spokeswoman for Irvine, California-based New Century, said the real estate investment trust does not comment on market rumors.

The rumors surfaced six days after New Century disclosed a criminal probe into securities trading and accounting, and said its survival might depend on getting help from its own lenders. Earlier Thursday, Greenlight Capital LLC, the REIT's second-largest shareholder, said its principal David Einhorn resigned on Wednesday night from New Century's board.

-Goldilox

Trouble in the RE "boom".

http://www.antiwar.com/roberts/?articleid=10635We all know that China has accumulated a vast store of electronic worth, which could become worthless at, literally, a key push. And that trying to get rid of it - or even just not adding to it - is likely to depress its value too. China is not alone in this, either.

So if you are a Chinese leader, what would you do ? How could you best use the dollars, even if their value does fall to zero ? This is a thought that has preoccupied many over the past few years, both at the Forum and elsewhere.

Assuming that you consider that the U.S. is your biggest threat (China's major oil supplier is Iran, after all), two items hit me over the last 24 hrs :-

The first is the tail-end of an article by Paul Craig Roberts which is interesting but off topic.

Snip:
China has announced a 17.8 percent increase in its military budget for 2007.

China is America's most important banker. How long will China fund America's wars and trade deficit when it finds itself so threatened by America's "leaders" that it has to accelerate its military spending?

End snip.

So, in other words, China can either risk losing the value of the dollars, or will have to spend them on something of only marginal economic value (defense).

The other comes from Sir Rook yesterday :-

Rook (3/8/07; 21:24:41MT - usagold.com msg#: 153207)
.,.
Thanks Randy, today I heard that china invested(?) 200 billion in fannie and freddie, and THAT was where the money came from to loan to all the marginal home buyers.
The loans that will be first perhaps to flounder in a downturn.

End snip

The old "build them up to knock them down" trick. After all, it worked in the USSR, which was a nice "controlled" implosion at its end, using overwhelming debt to stifle economic activity.

As China has experienced great hardship over the last seventy + years, and has managed to claw its way back to a degree of prosperity, I believe the first thing on the Chinese leader's mind would be to maintain the gains i.e. the economic system that has been rebuilt. The USA is in a totally different phase of its existence - decline leading to crisis - and may be totally blind to the risks it is running.

C!

Thanks to Mikal for posting this article. Bernanke's exhaustive effort to sound reassuring has sunk to new lows. By promoting "the importance of keeping inflation expectations low as way to keep inflation itself under control" is basically arguing to be allowed to perpetuate denial. How blatant can it get?

From one mouth of the government, you have David Walker, US Treasury Comtroller, going around spewing to anyone who will listen, including 60 Minutes, that the US is heading for financial trouble -- if Congress doesn't do something about it, as if it is all their fault; and from the opposite mouth, Bernanke is worried that if people get too scared about an impending inflation, they might (horrors) start spending less and saving their money, thereby inviting inflation!

This is as outrageous as if Kenneth Lay, just as Enron's unraveling was becoming evident to the Feds, had begged if he could keep things under wraps, lest it became known and all the employees started pulling out their money, possibly causing the collapse of the largest company in the world. Instead, he simply did not allow employees to take their stock out, and kept the money for himself.

Is there a lesson here?

Bernanke's technical staff uses a "Taylor-like Rule".

In 1992, Stanford University economist John Taylor developed a simple equation that, using grade school math and only three variables, told the Federal Reserve what to do:
r = p + .5y + .5(p - 2) + 2
where r is the federal funds rate
p is the rate of inflation over the previous four quarters
y is the percentage deviation of real GDP from a target.

The "r," of course, is what the Federal Open Market Committee deliberates at every meeting, and Taylor's formula not only described past Fed policy moves with startling precision, but also provided a systematic method for making future "r" decisions.

Ever since, scholars have been tweaking coefficients, modifying variables and debating its function, but Taylor's rule has remained the gold standard, so to speak�open to doubt and subject to discretion, but impossible to dismiss. "A simple equation that has proved remarkably useful as a rule-of-thumb description of monetary policy," wrote now-Fed Chairman Ben Bernanke in 2004. Or as Taylor observes in the following Region interview, "Staying close to the rule works pretty well."

The Fed's guru on legal reserves and the monetary base -- Richard Anderson

"well, yes, I suspect in part. The Fed's staff are all very sensitive to the Fisher equation and its implied spread between nominal market rates and "real" rates. Every economics class has taught about the Fisher equation for decades. But, of course, there are open issues -- which maturity of nominal rate to use? And which price deflator? Some folks would use an overnight rate, some a 90 day rate, some a government rate, some a private sector rate, some would use the 10-year bond rate, etc......

All monetary policymakers now understand what the academics call "Taylor's Rule" (due to John Taylor) -- when inflation increases and market interest rates rise with that inflation, the central bank must increase its target rate by more than the increase in market yields -- else, the central bank is just keeping abreast of the market and not leaning against the inflation. If such a rule is approximately correct, then it should also moderate the growth of the base and reserves (which of course are feeding the inflation). It would be a useful task to build such an empirical model and demonstrate how the process works, but I'm not aware of anyone doing so..."

rga

$640 look about right on a pullback

Back up the truck

http://www.reuters.com/article/economicNews/idUSN0834798820070309?pageNumber=1Am I missing something obvious?

Snip: The monthly trade gap shrank 3.8 percent from December and was less than the median forecast of $59.7 billion made by Wall Street analysts surveyed before the report.
....
U.S. exports, which have been aided by a weaker U.S. dollar and stronger foreign economic growth, rose 1.1 percent in January to $126.7 billion.
....
U.S. imports fell 0.5 percent to $185.8 billion, although two categories -- food, feed and beverages and capital goods -- set new records. (end snip)

If Imports fell by 0.5% and exports rose by 1.1% , isn't that a 1.6% change? What am I missing?

http://www.ft.com/cms/s/9f4f846e-cd0a-11db-a938-000b5df10621.htmlPaulson Urges China
to Deepen Reforms

By Geoff Dyer
Financial Times, London
Thursday, March 8, 2007

Hank Paulson, U.S. treasury secretary, outlined a new approach to economic and trade relations with China on Thursday in a speech calling on authorities in Beijing to deepen reforms of financial markets and let in more foreign investors and investment banks.

In a 45-minute address to financial executives in Shanghai, Paulson made only one indirect reference to China's policy for the renminbi, the economic issue that has dominated debate between the two countries in recent years.

Instead, he used his only public comments of a two-day trip to China to urge the country's leaders to speed financial reforms in order to create more balanced economic growth, encourage innovation, and make better use of natural resources -- all objectives that Beijing has itself recently emphasised.

"The risks for China are greater in moving too slowly than in moving too quickly toward transparent, liquid, stable capital markets," said Paulson, on the last leg of a three-country trip to Asia.

He added: "China is a large and powerful country and you should not limit your own potential by restricting your access to world-class financial expertise that can enhance your capital markets."

The message Paulson was sending, according to Andy Rothman, a Shanghai-based economist for CLSA, was: "If you give foreign firms much more access to your capital markets, that will enable us to dampen down protectionist sentiment in Congress and take a bit of pressure off the exchange rate issue."

Rothman said China might take some steps to open up its financial services market further before the next round of bilateral talks in Washington in May in order to reduce political pressure for measures against Beijing.

Since he became treasury secretary last summer, Paulson has repeated calls by other U.S. officials for China to allow the renminbi to appreciate more quickly against the U.S. dollar as pressure on Capitol Hill for retaliatory legislation against China has been mounting. But Thursday's speech, which detailed a set of capital markets reforms he said China should adopt, was part of an effort by Paulson to shift debate away from the short-term focus on Chinese currency policy, where pressure from the United States has so far had only modest results.

As well as letting in more foreign financial expertise, Paulson said China should take steps to boost its bond market, improve financial disclosure, and strengthen the base of institutional investors in its capital markets.

Paulson, a former Goldman Sachs chairman, urged China to let foreign companies take majority control of domestic investment banks and asset management companies -- where they were currently limited to 33 percent and 49 percent stakes respectively in joint ventures. He said Brazil, Russia, and India had all eliminated ownership caps in the securities industry.

"Experience demonstrates that the joint venture model does not work in the securities sector because investment banks are difficult to manage and control," he said. By letting foreign banks take controlling stakes in Chinese small and medium-sized banks, credit analysis skills in the banking sector would be also improved, he said.

http://news.yahoo.com/s/ap/20070309/ap_on_bi_ge/china_foreign_reserves;_ylt=AqF_a7vqnoH15bLifJ8YBg1u24cABy Joe McDonald
Associated Press
via Yahoo News
Friday, March 9, 2007

BEIJING -- China is creating an investment company to make more profitable use of its $1 trillion in foreign currency reserves, the finance minister said Friday, in a move that could change the flow of billions of dollars in global markets.

Finance Minister Jin Renqing gave no details of how the Cabinet-level company might invest the reserves, which are believed to be mostly in safe but low-yielding U.S. Treasury bonds. He also did not say what portion of the reserves might be channeled through the company or when it would start to operate.

"We can achieve more profit from the investments," Jin said at a news conference. "We are now preparing the organization of this new corporation."

Analysts have speculated for some time that China would create an investment company, and officials have said repeatedly they want to make better use of the country's reserves.

Economists have suggested Beijing might allocate as much as $200-400 billion to the new company, which in a single move could create one of the world's richest investment funds.

"They want to be more aggressive than what they do with current reserves," said economist Mingchun Sun at Lehman Brothers in Hong Kong.

"They could invest in higher-yield products -- stocks, corporate bonds, maybe even commodities," Sun said. "Basically, the returns would be higher because the risk is higher."

Jin said Beijing would try to learn from the experience of other governments. He cited the example of Singapore's Temasek Holdings, which manages nearly $90 billion in government pension funds and other assets.

Temasek owns stakes in Singapore Airlines and Singapore Telecom, as well as in banks, real estate, shipping, energy and other industries in India, China, South Korea and elsewhere.

Spokespeople for Jin's ministry and the central bank and foreign currency regulator declined to give any other details.

A shift in China's investment strategy could change its purchases of Treasuries, affecting a market that Washington relies on to help finance multibillion-dollar budget deficits.

But Sun said that with the reserves growing by as much as $20 billion a month, Beijing could afford to keep buying U.S. government bonds while also channeling billions into new investments.

U.S. Treasury Secretary Henry Paulson, in an interview this week on the U.S. television network ABC, rejected suggestions that changes in Chinese bond purchases could affect the United States.

Paulson said Beijing's entire holdings represent the equivalent of less than a single day's trading in Treasuries on global bond markets.

Chinese economists and media reports have suggested China might adopt more unusual investment approaches, ranging from stockpiling oil and other raw materials to spending more on social programs in order to encourage Chinese consumers to spend more and reduce dependence on exports.

The growth in China's reserves is driven by the rapid growth of its exports, which brings in dollars, euros and other foreign currency, and by the billions of investment dollars being poured into the country.

The surge in money flooding in from abroad forces the central bank to drain billions of dollars from the economy every month by selling bonds in order to reduce inflationary pressures.

The composition of China's foreign currency reserves is a secret. But economists believe that as much as 75 percent is believed to be in U.S. dollar-denominated instruments, mostly Treasuries, with the rest in euros and a small amount in yen.

Stephen Green, chief economist at Standard Chartered Bank in Shanghai, calculated that last year the central bank made a $29 billion profit on its Treasury holdings after paying interest on its own bonds and other expenses.

But even that represents a return of less than 3 percent on the $1 trillion in holdings.

By contrast, Singapore's Temasek says it has averaged an 18 percent annual return since it was created in 1974.

Jan Dec %
Balance -$59.1 -$61.5 3.8%
-------------------------------
Exports $126.7 $125.3 1.1%
-------------------------------
Imports $185.8 $186.7 -0.5%
-------------------------------
don't add percentages

http://www.census.gov/foreign-trade/statistics/highlights/monthly.html

http://www.bea.gov/international/index.htm

http://www.iht.com/articles/2007/03/08/business/ecb.phpECB raises benchmark interest rate as it warns of inflationary pressures
By Carter Dougherty Published: March 8, 2007
Snippits: "FRANKFURT: The European Central Bank on Thursday raised its benchmark interest rate a quarter percentage point, to 3.75 percent, as it made clear that it was willing to tighten credit even further � possibly by this summer � in a humming European economy that could generate higher inflation.

The ECB president, Jean-Claude Trichet, pointed to possible spikes in energy prices and, above all, big pay increases in major European wage settlements as reasons why the threat of higher inflation, its chief b�te noire, might require a response.
"I didn't say we are at a peak," Trichet said. "Full stop.""

Mikal-- Unlike yesterday's American reports that the ECB would almost certainly not raise beyond 4%, this diverges in every respect as well as with constant reports of tepid or sluggish euro-zone growth that aim to support the dollar vs the euro. You can't rely on mainstream media by and large wherever it comes from, but you jump at the chance when it hands you something, especially if it stands out like day vs night on a whole raft of issues.

"Having hinted strongly at more rate increases to come, Trichet left open the question of how much and when. Most analysts believe the answer depends on whether the euro-zone economy � which grew at a six-year-high rate of 2.6 percent last year � keeps up that pace this year.
On Thursday, the ECB forecast growth for 2007 to 2.9 percent from 2.1 percent, slightly higher than its prediction only three months ago, reflecting brisk economic growth toward the end of 2006.

The ECB's policy of tighter money reflects fears that a recovering euro- zone economy will generate more inflation, now hovering slightly under the bank's target of close to, but below, 2 percent.
Following the bank's seventh interest rate increase since it began raising rates in December 2005, the ECB is nearing the "neutral" rate which neither feeds nor hampers economic growth, which has experienced a sustained pickup over the past year in the 13-nation euro area...

Bank watchers generally agree that there will be at least one additional rate increase, and some expect two or more."

http://www.usagold.com/amk/newsgroup-form.htmlWell, if you aren't, we invite you to become one.

In our current issue, find out why.............

Goldman Sachs is warning of "dead bodies" after last week's market turmoil. What does it mean for the future? Why the sense of urgency?

Also,

Who is the prominent analysts who says "gold is dirt cheap here" and why is he saying it?

And,

How will South Africa go about keeping its position as the world's number one gold producer? You might be surprised at the answer.

Then,

Let's entertain for a moment the possibility that Alan Greenspan is on-the-money with his prediction of a one-third probability of a recession by the end of the year. How will gold fare?

Finally,

Goldman and Merrill Lynch see a U.S. rate cut coming before the end of the year. If so, how will it affect gold? The dollar? Your portfolio??

This particular NewsGroup was assembled FOR THE WEEKEND -- for those interested in developing the deep background behind the gold market headlines.

We invite you to become a full-fledged member at the link above. We find the news most important to gold owners, rate it's overall importance on 5-Star basis, throw-in our own gold-based interpretation and deliver free of charge to your personal e-mail box.

We invite you to join us at the USAGOLD NewsGroup.

@ Flow5,

While those are interesting as raw numbers, our actual "production" numbers look even more abysmal.

It looks like Paulson is lobbying to get GS and Chase more Chinese banking business to jury-rig the stats to appear that the US is actually producing something.

The Chinese will probably:

1) create their own pyramid schemes and see how GS likes them apples, or
2) tell them to "go pound sand".

The golden rule: "Them what has the gold, makes the rules."

http://www.freebuck.com/today.shtmlThere's certainly enough contrary activity in the Markets today to give one cause to suspect the carnage 'aint quite over just yet.
DX minnow the CAN$, along with it's bigger brother GBP ...and the little Aussie bleeder all rallied in support of the Buck whilst the others sold off heavily.
I'd have thought an E rally would have been a gimme on notice of a rate hike??

This from a bloke STILL waiting for the Au-Ag ratio to get to 30:1 over the next few weeks ...thank god I've got a good day-Job!

http://www.galmarley.com/Chart_pages/currency_charts.htmDon't want to labour the point but heres a view of the contrary activity today.
The various currency-PoG's

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1490202.eceLondon v New York: top US regulator attacks AIM �casino�
Tom Bawden in New York and Martin Waller in London
The Times Online | 03-09-07 | Excerpts: "The US Securities and Exchange Commission (SEC) launched an astonishing attack on the City's regulatory standards yesterday, just weeks after an American bidder failed in its quest to buy the London Stock Exchange...
"I'm concerned that 30 per cent of issuers that list on AIM are gone in a year. That feels like a casino to me," Mr Campos said on the sidelines of the SEC Regulation Outside the US conference in London. "It is a losing proposition to tout lower standards as a way to promote your markets."

As the competition to be the world's leading financial centre hots up between London and New York, Mr Campos upped the ante by suggesting that the LSE would also suffer as a result of the lax regulation of AIM. "There's also a danger with higher standards; if it's too affiliated with an exchange that has lower standards, it gets painted with the same brush."

Have your say - (Comments)Snippit:
"When comments like these come out, combined with various papers coming out recently about the competitive disadvantage US exchanges now have compared to elsewhere in the world....you know the US exchanges (and their regular) are concerned.
For this they only have themselves to blame - bringing in the hugely time-consuming and expensive Sarbanes-Oxley rules would not have stopped an Enron, but does have the effect of capital going to a more appropriate regulatory environment than the sledgehammer of SOX. The US regulators appeared to forget there are alternatives to listing in the US, but now they have been reminded by US companies listing there they complain.

Nicholas Hanes, Tunbridge Wells, UK"

Mikal-- Not necessarily a terminal pissing contest between these enormous entities. But as one letter writer comments, "This is meant to be the gold standard of stock market regulation?"

Thanks flow5

I know nothing about support & resistance, only about time and rocs.

Only March looks weak to me this year. Though when considering that short time frame, I wouldn't want to miss out on the overall trend. That said, it would be hard for me to expect any weakness from now on.

But I have no doubt, in the long run, it's impossible for the U.S. to continue to run huge current account deficits without the dollar falling, and conversely, gold appreciating.

What comes after Trillion?

Zillions??

Then what??

How far can this all go?

Maybe Flow5 has a point on this...or anyone??

GF!

Happy Spring

on stock touts. Be advised. The rules are the rules and they apply to ALL.

http://www.cftc.gov/cftc/cftccotreports.htmTHE COMMERCIALS in SIlver were NET long 17000 contracts
The commercials in Copper were net short 760 contracts
and the commercials in Gold were net long 48800 contracts

http://money.canoe.ca/PersonalFinance/2007/03/09/3721103.htmlGold likely to remain in up-trend for years to come
The Canadian Press - Business News
2007-03-09 14:15:00 - Snips:
(Special) - The rise in the price of gold is often attributed to world political factors, such as Iran's defiant stance on uranium enrichment.

But even when world political tensions concerning the Middle East eventually subside, there is one underlying cause - the re-pricing of U.S.-dollar assets because of that country's deficits - that is likely to continue to keep precious metals in an uptrend for years to come.

It's not just gold and silver that have been affected. The U.S.-dollar prices of many metals have climbed dramatically."

Mikal-- Good points throughout. Like glacial water, not much you can do to improve it. Like a good bracer, you
want to drink it though it would be tough against some faces.
If I may be overindulging with the reprinting here, I hope that the unrelenting, vital nature of these qualities would exonerate me in full measure.

"But the attraction of U.S. assets has been wearing thin. Holders of U.S. dollars worldwide, including some central banks, are instead now choosing more often than before to accumulate gold or alternative currencies such as the Euro.
It's just common sense. Why should they continue to prefer U.S.-dollar assets when their value is steadily dropping against virtually everything else?
The U.S. Federal Reserve may find it harder to navigate through the deficit mess in the coming years.
If the Fed were to continue to support the U.S. dollar with additional interest rate increases, U.S. stock and home prices would likely tumble, causing economic turmoil. If instead the Fed were supportive of stock and home prices (by holding down interest rates), the U.S. dollar would depreciate further.
Obviously, when the deficit problem turns into a crisis, the Federal Reserve will print money and keep interest rates on the low side in order to keep the economic wheels turning, even if it means higher inflation.
If you are sitting in the United States, you may conclude this is the right thing to do. But if you are anywhere else, you would be asking yourself why you should continue to hold U.S.-dollar assets if their fate is a further loss of value.

What has happened historically is that assets in a country with a high current account deficit lose value relative to the assets in countries that don't have such problems. As investors look for ways to preserve their wealth, the value of precious metals also goes up relative to the assets of the country with a high current account deficit.

Recent developments are indicating that history is repeating itself. U.S. assets, particularly financial assets, are losing ground against all others.
The process is likely to continue for many years to come, and precious metals will be among the beneficiaries."

Someone said volume precedes price .

If the volume spikes in some of the junior miners is any indication and some of the other activity including break outs............

Many of them are also flagging ......

Looks like something is brewing and bubbling hereunder ....

Looking over at yonder horizon , there appears to be a major eruption on the way .......

a geologist might think these indicators parrallel
Seismic activity....

Topaz (2/28/07; 01:05:59MT - usagold.com msg#: 152787)
@PA ...billion.
A Billion here a billiad there, pretty soon we're talking PaperMoney.

There is a quirk in accounting in Europe that you may or may not be aware of ...and it may or may not be relevant to ECB accounting.

American British
million 6 6
billion 9 12
trillion 12 18
quadrillion 15 24
quintillion 18 30
sextillion 21 36
septillion 24 42
octillion 27 48
nonillion 30 54
decillion 33 60
undecillion 36 66
duodecillion 39 72
tredecillion 42 78
quattuordecillion 45 84
quindecillion 48 90
sexdecillion 51 96
septendecillion 54 102
octodecillion 57 108
novemdecillion 60 114
vigintillion 63 120

Good to see the US SM's recover in that rarified vapor that is aftermarketAu Trading on a Friday.

...in that lot (the numbers represent Zeros) lurks a Googol ...of Google fame. It's claim is 10 to the 100th power, or 10 with 100 zeros.

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=One didn't have to look too far to account for the PoP in DX at 0800 this am.
Those pesky E-Bond traders in Europe and points east served up a doozie to the day traders ...who managed to eke out an unch on the day after all was said and done.

As of 7/1/06 the current account deficit was 5,563.78 trillion. http://research.stlouisfed.org/fred2/series/BOPBCA?&cid=125

By the PPP index, the dollar is overvalued against all of our trading partners.

To prop their economies and forestall exchange rate losses, the far-eastern countries peg their currencies against the U.S. dollar.

Their foreign-exchange reserves are in the trillions.

Throughout history, pegged exchange rates, sooner or later have always failed.

The Bush administration 1) ignores the consequences of our excessive U.S. government unilateral transfers to foreigners (the war in Iraq, etc.). This drain alone was enough to end the dollar's convertibility into gold. And 2) ignores our dependence on imported oil (65% of the 763 bill trade deficit in 2006? I think).

The Fed has nothing to do, and can't have anything to do, with exchange rate value of the dollar. The Fed is powerless in this regard.

The dollar has no where to go but down.

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

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

FRIDAY Market Report

March 9 (MarketWatch) -- Gold futures fell from a one-week high near $660 an ounce Friday as a rise U.S. payrolls met most market expectations and the trade deficit narrowed, boosting the dollar and easing investment demand for precious metals. But after climbing over the last three sessions, gold futures finished the week with a more than 1% gain.

Gold for April delivery closed down $3.50 at $652 on the New York Mercantile Exchange. The contract had traded as high as $659.80 earlier in the session.

Early Friday, the market was on its way higher "but the market perceived economic data as dollar friendly," said Peter Spina, chief investment strategist at GoldSeek.com.

U.S. jobs data showed that nonfarm payrolls increased by 97,000 in February, slightly lower than the 100,000 expected by economists surveyed by MarketWatch. It was the smallest job gain since January 2005. The unemployment rate fell back to 4.5% from 4.6%.

Following the jobs report, the dollar rallied against the yen and rose against the euro.

Goldman Sachs bullish on gold...

"The recent sell-off in gold and gold equities has created a good buying opportunity for gold, given strengthening fundamentals," said Oscar Cabrera, a Goldman Sachs analyst, in a Friday research note.

Goldman Sachs expects gold prices to end 2007 at $725 an ounce and to average $689 an ounce during the year, boosted by further declines in the dollar.

Expectations of widening interest rate differentials between the United States and the rest of the world will continue to weaken the dollar in 2007.

Factors that will provide support for the precious metal, Goldman Sachs said, include a weak U.S. January durable goods report; concerns over performance of sub-prime mortgage loans which could impact the U.S. financial system, further weakening of the dollar; concerns of an over-extended yen carry-trade, which if unwound could strengthen the yen versus the U.S. dollar; a 9% drop in Chinese equity markets, rising global risk concerns; and comments by former Federal Reserve Chairman Alan Greenspan that a recession was possible in 2007.

Demand for gold has also remained strong, while mine production has slipped in the last few years, as companies deal with mature ore bodies, lower grades and increasing costs for developments, Goldman Sachs said.

Finally, net central bank sales fell sharply in 2006, and the central banks of important emerging markets, like China and Russia, are adding to their gold holdings to diversify their reserves.

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

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

Paulson: China's entire
holding of US treasuries
represents less then the
daily total of US treasu-
ries traded each day on
the global bond-markets.

Globalization is going on
for a long time...you bet!

Mindbending. OvS

http://www.financialsense.com/editorials/casey/2007/0309.htmlAnd I Feel Fine.
by Doug Casey.

Slingshot--------<>

http://www.financialsense.com/fsu/editorials/schiff/2007/0309.htmlBy Peter Schiff.

Slingshot--------<>

From Peter Schiff's piece...

"Since 70% plus of the U.S. economy is based on consumer spending, how can we possibly avoid a recession if the credit well financing much of it runs dry? Since home equity has been the principal asset collateralizing that credit, how can consumers keep borrowing and spending when housing prices fall?"

I believe that the answer will be to simply fire up the helicopters to rain money down on the lumpentariat.

How do you do that?

Increase the minimum wage by 40% (from $5.25 to $7.50) over a 24 month period. This will serve to inject new "money" into the system as the refi / home loan ATM spiggot slowly becomes a memory.

On another note, the banks will enjoy having a new (and growing) sub-set within the borrowing population of the lumpentariat who are now forced to borrow at far higher rates as a result of their being ground up in the easy-money / real estate sting.

If I wanted to grind up a part of the most susceptible part of the population for profit I would do the following:

THE SET-UP

1. Lower interest rates to artificially low levels
2. Remove all viable borrowing qualifications (i.e. income verification, etc.) to suck in the stupid and the greedy
3. Actually fund television ads that run all day prompting people to take out big mortgages for new homes / assume more debt on their existing homes (it might ryhme with Hi-tech)
4. Instruct my paid whores in the financial media to endlessly promote a new bull market in real estate so as to prompt the average viewer to take advantage of items 1 and 2 above

THE STING

Once I was convinced that asset prices had peaked and that everyone who had a pulse was in hock as part of the grand scheme, I would lower the boom by doing the following:

5. Have my bought and paid for politicians reform the bankruptcy laws to ensure that there is no way out for the lumpen from a life as a chattel slave when the music stops
6. Have the same upstanding politicians pass additional legislation just a few months following doubling the minimum payment on credit card debt
7. Manufacture a crisis of confidence in subprime lenders to tip over the first domino (please see Peter Schiff's article for how the dominos will fall from bottom to top in the real estate market) such that lenders no longer provide easy money via such things as zero down mortgages (please see story on GMAC announcing today that it will be doing just that)
8. Simply wait for the inevitable to play itself out.

Were the above played out over a period of months intsead of years then maybe more people might see how ingeniously this trap was laid, executed and will ultimately be profitable for those whose agenda is to profit at the expense of the masses. Like shrub says, connect the dots.

PA

http://www.apfn.org/apfn/moon.htmI think the value of the napkin I have that was signed for me in 1969 by Neil Armstrong and the other feller who first walked on the moon, just went down.
I was a kid, and of course am surprised to have found a web site that shows some curious photos that seem to support thier claim that the first moon walk didnt happen.
EGAD.
I was ok finding out about the easter bunny, and of course Santa was a bit more of a dissapointment, then parents, police, president, all humanity, well, childhood is best served with innocence and some cheerful fantasy, however, I WOULD like the revealings to come to a stop. But, I suppose that aint in the cards.

According to Kiplingers Letter the International Money Fund (IMF) will soon start selling the $63 billion in gold it owns. Has anybody else heard that? Where did the IMF get that much gold?

Kiplinger's said it would be sold slowly so as not to affect the POG but there's no way anybody can sell that much without having an affect.

Gemstocks

Welcome. IMF sales must be approved by Congress( the 'swing vote' goes to Washington) but Congress will soon be overtly and directly marginalized and over ridden by the one world government, instead of covertly and less efficiently.
At the same time, some beleive the IMF doesn't actually have PHYSICAL GOLD even as a custodian, but rather, paper commitments or contracts etc.
If GATA is right about the amount of physical gold held by CB's, it doesn't matter whose gold they sell, Japanese WW2 gold from the Philipines or the CB's own allocated promises. Because of the supply/demand deficit, ongoing demand curve steepening, flight to quality and ultimate POG reappraisal by the financial establishment itself.
Any "sales" by the IMF will be offmarket transfers between CB's after the intentional collapse of the markets.
If this does not happen within months, it will not happen.

http://www.gold-eagle.com/editorials_05/rogers030707.html Thanks, good ones.
Bill Murphy's Midas report is on a roll lately also.
You may have seen this one, spot on in many regards
(it hasn't the length needed to fully develop and substantiate one or two of it's assertions),
but I agree with most of it thus far:
The Federal Reserve Will End in Bank Failure by Lee Rogers March 9, 2007

http://www.arabtimesonline.com/arabtimes/business/Viewdet.asp?ID=7685&cat=a Greenspan's recession comments on US spooks global stock market - Headache for Bernanke | AP | Arab Times - 3/10/07
Grrenspan will apparently exercise more precautions to prevent his paid, private remarks and investment tips from being leaked into the mainstream if this article is to be believed.
However, IMO such forecasts have value to CNBC and the PTB at the very least as they permit a sideshow to draw in viewers and satisfy investors with a diversion (excuse, alibi, rationale) for market happenings.

@ Rook,

One of the main themes of the web bot analysis is "secrets revealed" being the trojan horse in the wayward gubmint!

http://www.washtimes.com/business/20070309-102402-2159r.htmGreenspan still the guru, now with recession twist�-�Business�-�The Washington Times, America's Newspaper - AP - Martin Crutsinger - March 10, 2007
Here is a better link to the story

@ Rook,

One of the main themes of the web bot analysis for the last couple years has been "secrets revealed" as the Trojan Horse for the wayward PTB!

One of my favorite questions is:

If they really went to the Moon, why are they just now offering a "prize" to anyone who can design bio-protection from the van Allen radiation belts?

Ummmm . . . aren't those located somewhere between here and the Smiley Face in the night sky? There's a lot of "solar energetics" going on outside our comfy shield that low Earth orbits (like Space Stations and COMM satellites) are naturally protected from.

<(:^) G'lox

We are again below the resistance level of $660. The solid bashing downward to slow recovery has lots to say about gold. Everything that I read is geared to the ultimate outcome as the PTB invent new rules to prolong the game of FIAT. With each tremor (bashing) the fault line is letting us know that a huge earthquake is on the horizon.
I prepare for the major moves in price and expect them for that is what needs to happen to send gold higher.

As we prepare our necessities one should put away some luxuries like a few bottles of Good Brandy or a box of Fine Cigars. Not as items to gloat but items to reward ourselves for our labor.

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

http://www.silverbearcafe.com/private/futureofgold.htmlEverybodys talking about it ;0)
Slingshot--------<>

http://www.marketwatch.com/news/story/story.aspx?guid=%7B94D2F69D%2D3F0A%2D4D80%2D87FB%2DD75345D4E464%7D&dist=rss Re: Large price changes - You mean this month was just a warm-up? :)
Re: reward ourselves, 'There is no rest for the wicked.' ;)
Story from January that may be old news to some, but still current(unless we return to the stone-age, make that GLASS stone-age):
Bloggers - Fifth Estate of journalism - MarketWatch - 01/31

http://www.usagold.com/amk/newsgroup-form.htmlWell, if you aren't, we invite you to become one.

In our current issue, find out why.............

Goldman Sachs is warning of "dead bodies" after last week's market turmoil. What does it mean for the future? Why the sense of urgency?

Also,

Who is the prominent analysts who says "gold is dirt cheap here" and why is he saying it?

And,

How will South Africa go about keeping its position as the world's number one gold producer? You might be surprised at the answer.

Then,

Let's entertain for a moment the possibility that Alan Greenspan is on-the-money with his prediction of a one-third probability of a recession by the end of the year. How will gold fare?

Finally,

Goldman and Merrill Lynch see a U.S. rate cut coming before the end of the year. If so, how will it affect gold? The dollar? Your portfolio??

This particular NewsGroup was assembled FOR THE WEEKEND -- for those interested in developing the deep background behind the gold market headlines.

We invite you to become a full-fledged member at the link above. We find the news most important to gold owners, rate it's overall importance on 5-Star basis, throw-in our own gold-based interpretation and deliver free of charge to your personal e-mail box.

We invite you to join us at the USAGOLD NewsGroup.

Pay attention. I'm the only one on this planet that knows the Holy Grail. (I had a 6 pack before 9:00 am). It would be an historical break, and a theoretical break if the economy turned down.

97.6 0.38 0.07 Jan
92.9 -0.16 -0.09 Feb
95.5 0.03 -0.01 Mar
95.5 0.07 0.04
95.5 0.17 0.00
95.5 0.08 0.00
95.5 0.25 0.03
97.4 0.38 0.00
96.5 0.08 0.03
97.0 -0.06 0.00
97.4 0.45 0.00
101.5 0.60 0.00

legal 10 roc 24 roc
reserves

Riddle me this:

If commercial banks create money in the lending process (through fractional reserve banking)
Then why do commercial banks pay for savings (which they do not loan out)
Only Bernanke can take money out of the banking system.
Money flowing to the intermediaries actually never leaves the commercial banking system as anybody who has applied double entry booking on a nation scale should know. And why do commercial banks pay for something they already have? --- interest on their deposits?

http://www.nytimes.com/2007/03/10/business/10real.html?ex=1331182800&en=442d8daf6bf56cac&ei=5090∂ner=rssuserland&emc=rssApears that Peter Schiff's prediction of the real estate dominos falling from bottom to top is materializing more quickly than anticipated.

Snip

Troubles Hit Real Estate at High End
By CHRISTINE HAUGHNEY
Published: March 10, 2007

Until now, deep-pocketed Wall Street tycoons and foreign investors benefiting from a weak dollar seemed to be holding up the luxury real estate market even as the low-end fractured. But there are signs that some high-end real estate developers are also being hit by the slowdown.

Skip to next paragraph

John Loomis for The New York Times
A condo-hotel developer let the mortgage expire on the Royal Palm Hotel in South Beach, an area of Miami Beach.
Last night, a condo-hotel developer who was a partner with celebrities in selling luxury perches from Miami to Chicago let the mortgage on the Royal Palm Hotel in South Beach, a trendy section of Miami Beach, expire. The missed deadline places another luxury condo project into the hands of bankers specializing in troubled mortgages.

Jack McCabe, a real estate consultant in Deerfield Beach, Fla., said there would be more troubles for developers, lenders and title insurance companies.

End Snip

Commercial banks can not print money and so pay depositors for the use of their money. It is a small amount to pay deposits as the lending interest rate is higher.
Slingshot----

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since 1973

Paper Avalanche, rather than "hit" with the slowdown, I suspect they are taking advantage of the slowdown, and even collude with the guys they hand properties off too.
As a newbie to "conspiracy nut" status, I also imagine that the change in the yen last week was pre known by those in the know, the "our crowd" folks, and I would like to know just who got clobbered in the leverage trader carry trade wipeout. I suspect that who is NOT on that list, would tell us a lot.

Sir Slingshot, your link to silverbearcafe.com found me accepting the logic until I reached this line in qoutes;
"I do not believe that that we will enter into a World War for resources..."
I would like to see the analysis from someone who really does believe we absolutely will. Or perhaps more accurately, ARE.

http://www.thepowerhour.com/911_articles.htmResource wars.

Unfortunately, I am you man. First, lets establish the "situation" prior to the resource wars. The readers of this forum are aware that the "dollar" will, at some point, crash and become worthless. Hopefully, the rest of the world's economies will not follow. However, given how the rest of the world is following in the US's foot steps in printing increasing amounts of fiat money, it is also likely that their currencies will follow step. So this collapse will likely be a worldwide event.

Next step in assessment: The collapse of the currencies will result, for a time, the end of world trade. As the dollar becomes worthless, there will be a large disruption in domestic consumption. Food, gasoline and electricity will be permanently disrupted. You can anticipate the rioting in the streets when basic necessities are no longer available. No more oil from OPEC countries. No more cheap electronics from China. Basically, no more trade. You can't have international trade without an agreeable currency.

Next step, go forward 3 to 5 years. Machiavellian types will endeavor to seize political control in the different countries. These shysters will identify the "evil doers" who were the cause of "all our grief". This is usually when the war drum starts to beat. This is a fairly good assessment.

Unfortunately; DO YOU REALLY BELIEVE WE ARE IN IRAQ AND THREATENING IRAN because of weapons of mass destruction? One BIG clue is the lack of activity with (no oil) North Korea.

I believe that the US is ALREADY in a Resource War. The current administration jump-started the war "while" the US "still" has a military. As you are probably aware, in the next few years the baby boomers will begin to retire in masses, (that is 27% of the US population). Our government's tax receipts will plunge at the same time Social Security and Medicare costs skyrocket. There will be no money left for the military. As such, I doubt that the US's military in 2015 will be able to punch it's way out of a preverbal paper bag.

So, how do you start a resource war? I suggest you research the attached website for additional information. If you do the research, I think you will find that it looks like our "leaders" pulled the trigger on the twin towers as a psychological ploy to manipulate the "righteous" revenge minded US citizens into supporting a war. This is a stealth war for oil resources and dollar hegemony. It is no surprise that China & Russia are maneuvering against the US by selling high tech "defensive" weapons to Iran. With two, (soon to be three), aircraft carries task forces in the Persian Gulf, no wonder Representative Ron Paul is worried about another Gulf of Tonkin incident, resulting a war with Iran. You can just "see" this stuff coming our way�

When these bombs drop, you better be holding gold.

Sorry for this miserable assessment.

SF

PS: I hope I "didn't" cross the line with this posting.

Could you explain what your chart represents and what it means?

97.6 0.38 0.07 Jan
92.9 -0.16 -0.09 Feb
95.5 0.03 -0.01 Mar
95.5 0.07 0.04
95.5 0.17 0.00
95.5 0.08 0.00
95.5 0.25 0.03
97.4 0.38 0.00
96.5 0.08 0.03
97.0 -0.06 0.00
97.4 0.45 0.00
101.5 0.60 0.00
legal 10 roc 24 roc
reserves

Thanks,
PlacerGold

http://www.usagold.com/gold/coins/ger20mark.html

http://www.kitco.com/images/live/gold.gifPoG relates to the Bond/Dollar in concert and can currently be relied upon as a barometric indicator of the success or otherwise of composite Buck management.
I can imagine a scenario where PoG = $1000 ...and DX was 90, just as easily as I can PoG $400 and DX 80. In both instances the Yield on Bonds would be off the scale in either direction mind you ...but BOTH are doable!

http://www.futuresource.com/charts/charts.jsp?s=CL&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=PoO seems more inclined to "stick with the program" this year than it has in the past ...see Chart.
So Higher Dollar = Lower PoO ...so far in 2007 anyway!

http://news.goldseek.com/GoldSeek/1173456330.phpProfiting From Impending Stagflation and Equity Markets Breakdowns
Posted Friday, 9 March 2007 | DEEPCASTER LLC
www.deepcaster.com - Snippit:
"DEEPCASTER FORTRESS ASSETS LETTER
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
and a Precious Metals and Strategic Commodities Markets Warning

Deepcaster uses the term "Impending" qualifiedly since the Real Data shows that the U.S. economy has been in a stagflationary condition for some months now. But given the probable duration and depth of the Stagflation to come, the use of the word "impending" is nonetheless appropriate.

The Good News is that understanding the character and causes of Stagflation and the ongoing Markets Intervention allows the savvy investor to develop a Rational Strategy for Profits. For a Summary Overview of Markets Interventions and Data Manipulations see "Juiced Number IV: How the Government Gets the Statistics It Wants, Markets Get Manipulated, Citizens Get Deluded and Worse" available at www.deepcaster.com.
Lest there be any doubt that the U.S. economy is in fact in an Inflationary Recession (i.e. Stagflation) consider two key data - - the GDP and CPI as reported in Deepcaster's March Letter - - plus another recent key datum as reported below:"

How do Central Banks decide on the CURRENT exchange rate of currencies.......in RELATIVE worth to one another...........Is a short, simple answer or concept possible, as I may share with another?............gratitude in advance ............ AMF

http://www.nowandfutures.com/key_stats.html
Breathtaking.

@ osa104c,

If the currency is traded on the FOREX or other markets, the "market' determines the relative value, based on supply and demand. If not, some arbitrary "value", called a "peg" is maintained, as long as possible by internal banking machinations.

http://www.thestar.com/article/190390Rick Westhead
Toronto Star
Saturday, March 10, 2007

COPIAPO, Chile -- When mining speculator Rodolfo Villar discovered Canada's Barrick Gold Corp. wanted to buy his claim to a remote, rugged tract of land in the Andes mountains, he anticipated a million-dollar payday.

It was no secret that Toronto-based Barrick, which owned a sprawling mine in the mountain range called Pascua-Lama, was anxious to buy Villar's nearby claim, the 56-year-old said.

Located in the thin, frigid air of the Andes some 4,500 metres above sea level in northern Chile, the mine reportedly has gold and silver reserves worth US$12 billion. Lucky for Villar, the lone road to the mine snakes straight through his claim.

But days after he signed over mining rights to a 3,100-hectare plot, Villar said he learned what he had unwittingly agreed to.

"I got $20," said Villar, a pot-bellied and balding former miner with a round, bronzed face. "I felt sick and cheated."

A Chilean court agreed last fall that Villar had been wronged and ordered Barrick to return the rights to the plot.

The contentious court decision, which the company is appealing, now threatens to at least delay Barrick's efforts to tap one of the world's largest undeveloped deposits of gold, silver and copper, as it wrestles with the multi-million-dollar legal claim.

A spokesperson for Barrick, Vincent Borg, calls Villar's case a "nuisance suit" and said the company is appealing. Chile's appellate court could decide as soon as April whether to uphold the decision against Barrick. The company has received permission to proceed with plans to develop the mine until the ruling.

Like many mining ventures, Barrick's efforts at Pascua-Lama, which straddles Chile's border with Argentina, have been controversial.

Environmentalists have bristled over plans to move literally mountains of ice to access the coveted deposits. But what sets the Barrick dispute apart from most mining battles is its thorny, if unlikely, dispute with Villar.

Villar acquired the mining rights to the area in 1996 after a former rights-holder let the claim lapse. He owned them for a year before Barrick approached him with a purchase offer.

"My lawyer was my friend for a long time," Villar said from his hometown of Copiapo, Chile. "I drove down to Santiago to his office and he opened the contract to the last page and said sign here. I trusted him."

The same day he signed away his mining rights for land near Pascua-Lama, Villar's lawyer sold a much smaller parcel of land to Barrick for $650,000. Barrick spokesperson Borg says the company believed it had a package deal to buy both parcels of land.

Villar's new lawyer, Hernan Montealegre, is a prominent human rights advocate; in 1998, he travelled to London to assist prosecutors building a case against dictator Augusto Pinochet for genocide, terrorism and torture.

"There's no way to get trucks to the mine without going through Villar's concession, and there's nowhere to put waste rock without having that land," Montealegre said, motioning to maps showing the disputed territory. "We had first asked Barrick for $1 million to settle this, but after the court decision, we wouldn't take less than $300 million."

It's pointed out to Montealegre that his client's signature is clear on the photocopied sales contract he pulls from a ream of files.

"That doesn't mean anything," he said. "You think he would get in his car in Copiapo and drive 10 hours to Santiago for the day, staying over for the night, so that he could sell this land for $20? It doesn't make sense and the judge agreed with that. Rodolfo has an eagle eye for mining, but not for business."

Yet Barrick lawyer Patrick Garver said Villar made the trip because he eyed a much larger payday.

Both Villar and Montealegre have been trying to sell financial interest in their case against Barrick, "on the streets of Vancouver, on the Internet, and wherever else they can," Garver said.

For instance, a Dec. 1, 2006, email solicitation allegedly distributed by a German company offered Villar's "litigious rights" for $600 million. The email, provided by Garver, alleges that once Villar's claim is confirmed by Chile's high court, the value of his mining interest will eclipse $1 billion.

"Barrick Gold is trying to negotiate with us, but we are not prepared to subordinate our timing to theirs," the email said. "We are going to negotiate with the first investor that is willing to close this negotiation within the parameters expressed in this letter."

The tactic, Garver said, amounts to an "interesting marketing campaign.

"They're literally selling pieces of their litigation like lottery tickets," he said.

"The first time Villar raised his head and said anything about this was 2001. Where was he for four years if he thought he had been defrauded out of $1 million?"

Barrick also contends the judge's ruling in its case against Villar is replete with inconsistencies.

For starters, the judge, Maria Isabel Reyes Kokisch, was an interim on the bench and had access to the case file for mere days before issuing her decision, Garver said, adding that Kokisch issued her judgment without having heard any testimony on the case.

Garver said a Chilean appellate court judge commissioned to investigate Kokisch's conduct has recommended that the justice ministry take a closer look at the case. A justice ministry spokesperson couldn't be reached to comment.

Even if it fails in its legal battle against Villar, it won't thwart Barrick from using the narrow roads to Pascua-Lama, Garver said. That's because Villar would only control mining rights to the disputed territory, not surface rights.

Garver said surface rights are all the company needs to shuttle trucks to and from Pascua-Lama.

Its battle against Villar is just one vexing obstacle for Barrick in this mineral-rich South American country.

Chile's Huasco Valley is a strip of fertile farmland that stretches several hundred kilometres from the Andes to the Pacific Ocean. A few hours south of the world's driest desert, the Atacama, water that originates near Pascua-Lama is used throughout the valley for drinking and crop irrigation.

Environmental groups charge that a chemical spill could cripple farms that grow olives, tomatoes and grapes used to make wine and pisco, Chile's iconic colourless brandy.

Some critics say Pascua-Lama may never be developed because of a host of public-relations setbacks and growing opposition to the project.

"Barrick has totally botched this," said James Whalen, an adviser to the Canadian silver mining company Silver Standard Resources Inc., who also wrote Out of the Ashes: Life, Death and Transfiguration of Democracy in Chile.

"It's a fiasco," Whalen said. "Barrick is widely viewed as the bad guy here and they don't know how to manage it.

"People here have the mindset that the environmentalists are on the side of the angels. There are very serious questions about whether Barrick will be allowed to move forward."

Barrick's plans to mine Pascua-Lama have sparked a maelstrom of debate.

The company had planned to use dump trucks to move thousands of tonnes of ice from three glaciers sitting atop some of the gold, to a larger nearby glacier nearby that wasn't exposed to direct sunlight.

Under pressure from environmentalists, Chile's mining regulators rejected that plan and Barrick has since pledged that it won't disturb the majestic glaciers.

The Andes can be treacherous terrain. Forty-five Chilean soldiers froze to death last year while on manoeuvres in the mountains, where exposure to the open air can burn the skin in seconds and sear the eyes purple.

At least three years before Pascua-Lama is to produce its first gold and silver bars, 12 people have already have died in accidents related to the mine's preliminary construction.

The most recent were four workers in 2001 who were caught in a severe blizzard high in the mountains. As snow engulfed their pickup truck, the four left the engine idling to keep warm and died of carbon monoxide poisoning, Kettles said.

In the streets of Vallenar, a bucolic city of 20,000 replete with leafy plazas and bright-coloured, clay-roofed houses, opinion over Pascua-Lama is polarized.

The unemployment rate here hovers around 12.6 per cent, nearly double Chile's national average and Barrick has said Pascua-Lama, 119 kilometres away, would create 1,500 jobs.

"This project is going to give us a chance to grow up," Edgardo Toledo, president of the pro-Barrick Rural Communities Association of Vallenar, said in an interview at the firm's office.

The world's largest gold company already has bought an ambulance and radio equipment for the nearby village of Alto del Carmen, and says chances of a chemical spill are remote.

But Marcela Castaneda, a 32-year-old English teacher whose family has lived in the city for generations, offered a more skeptical view of the project as she gave a tour of the town.

"Many people think Barrick is going to poison the valley with chemicals," she said. "For Barrick, what's the worst thing that can happen if there is a spill and Vallenar becomes a dying town? They'll have filled their pockets with money and moved on, but we will still be living here."

Every ounce of gold requires 30 tonnes of rock to be taken from the earth. Before being bathed in cyanide, which leaches the gold from the rock so it can be milled, it is broken into small pieces.

Boulder-sized chunks of waste rock are discarded. Exposed to the rain and air, sulphides in the rock react with oxygen, making sulphuric acid. That can free heavy metals like cadmium, lead, and mercury.Barrick's Ron Kettles, the Canadian-born manager of the Pascua-Lama project, said waste rock at Pascua-Lama would be kept in a pair of covered pits lined with a 1.5-millimetre to 2-millimetre membrane that, he said, "You couldn't pierce with a knife."

Kettles said Barrick would set up intermittent emergency stations along the traffic route to deal with accidental spills and that cyanide, transported in 18-gram briquettes, could be easily cleaned up.

The Barrick imbroglio comes with the Canadian mining industry at a crossroads. For more than a year, eight federal ministries have been discussing with companies and their environmental adversaries how Canadian companies can be better held to account for their actions abroad.

A Foreign Affairs spokesperson declined to comment on the hearings or on Pascua-Lama. The ministries are expected to present to cabinet a final report with recommendations as early as this month.

Back in Vallenar, in the late afternoon shade of his small vineyard and with the sun fading fast, Rene Sandoval, a local homeowner who has spent years working in the fields near this city, likely spoke for many locals when he said he expects the Barrick mine to proceed despite the continued protests.

"It's not an easy thing to say that you should just stop mining, because that's not going to happen," he said. "But there are dangers, however, and no one should pretend that is not the case."

http://news.yahoo.com/s/nm/20070309/bs_nm/subprime_countrywide_dc;_ylt=AkkKAW4KkseHFYHJMzWixHLMWM0FFrom Reuters
Friday, March 9, 2007

Countrywide Financial Corp., the largest U.S. mortgage lender, on Friday told its brokers to stop offering borrowers the option of no-money-down home loans, according to a document obtained by Reuters.

Loans financing 100 percent of a home's value are among those that have led to a sharp rise in delinquencies at U.S. mortgage lenders. Such mortgages below "prime" quality have resulted in losses, sales and even closures at more than two dozen mortgage lenders, analysts say.

"Please get in any deals over 95 LTV (loan-to-value) today!" Countrywide said late on Friday in an urgent e-mail to brokers. "Countrywide BC will no longer be offering any 100 LTV products as of Monday, March 12."

Countrywide joins other large lenders that will require homeowners to have at least a 5 percent stake in their homes, including Washington Mutual Inc. and General Electric Co.'s WMC Mortgage. Fremont General Corp. last month stopped making "piggyback" loans that are often used to make up 100 percent LTV loans, and last week stopped lending altogether amid pressure from regulators.

The surge in delinquencies, due to loose underwriting standards and a cooling housing market, has alarmed financial markets in part because it has happened so quickly. The bulk of delinquencies is coming from loans made last year that are as little as one month old, making 2006 perhaps the worst ever in terms of mortgage credit quality, according to analysts at UBS Securities.

Countrywide Chief Financial Officer Eric Sieracki this week said the Calabasas, California-based company will survive the downturn in subprime mortgage credit quality since it has not been forced to sell loans into a turbulent market.

Monoline lenders such as Fremont and New Century Financial Corp., which focus on subprime mortgages rather than a broader line of lending, have to sell their loans to maintain cash flows. They are going through "a very dark time," Sieracki said at a Raymond James Financial conference in Orlando, Florida.

Countrywide is the largest subprime lender, with $38.5 billion originated in 2006, according to trade publication Inside B&C Lending. But the volume makes up less than 10 percent of the total $468.2 billion originated by Countrywide last year, Sieracki said.

The general pullback in credit to riskier borrowers will take a toll on the overall economy, economists at Goldman Sachs Group Inc. said in a research note this week.

More cautious lending could cut annual new home purchases by 200,000 units in "a relatively conservative scenario," the economists wrote. Higher defaults and foreclosures of existing loans will dump more supply on the market, they added.

http://www.theglobeandmail.com/servlet/story/LAC.20070308.RROGERS08/TPStory/BusinessCommodity Bull Takes Bearish View of U.S. Economy | Globeandmail.com | March 8, 2007 | Toronto
Jim Rogers sees $100+ oil, recession, commodities bull, outperforming loonie. See what he means when he says "they lie about these things".

@ Mikal,

Jim's response to Greenspan's remarks make me think of the TV meteorologist who clings steadfastly to his prediction of 30% chance of rain, all through the live broadcast of their "roaming street reporter" getting completely soaked!

Like, DUH! There's nothing more comical than someone "stuck" analyzing historical data, when the real-time data is making the conclusion brutally OBVIOUS!

Besides, I give special dispensation to a guy with the cajones to do 26 thousand miles of third-world market exploration on an R100LT, with his girlfriend on another old beemer - and NO chase vehicle.

The book is called "Investment Biker" for anyone interested. Out of print, but available at Amazon or Alibris used for peanuts.

http://news.goldseek.com/GoldSeek/1173456330.phpDeepCaster's analysis starts wisely; then routes into convoluted pathways.

They diagnose that inflationary recession has already started which may develop into hyperinflationary depression by the end of the decade.

Afterwards they say :
"the key to capital preservation and enhancement is to be intermittently long bonds (i.e. long-term Treasury Bonds) and intermittently short gold, silver and crude oil until The Interventional Landscape changes. And that is the third key to the puzzle: intermittently....Only when the prices of Gold, Silver and Crude Oil are at considerable risk of breaking loose from the shackles of Cartel Intervention will we see them climb, and likely explosively, to their “true market values.”"

Huh? Why not load up physical and sip my tea while the market "intermittently" gyrates?

As a side note they may have suggested a good play for the cash (anti-dollar cash, I mean) component of the portfolio. If the stock market is taken down too quickly, as DeepCaster suggests, a playable panic bottom may occur; or may be not!

http://globaleconomicanalysis.blogspot.com/ February Jobs/Employment Data | Mish's Global Economic Trend Analysis - Friday, March 9, 2007 - Mike Shedlock/Mish

http://www.theage.com.au/news/business/lowest-production-of-gold-in-years-but-value-is-up/2007/03/11/1173548021486.html Lowest production of gold in years, but value is up - Melbourne Age - Business - 03/11

http://www.etherzone.com/2007/beam030907.shtmlADVENTURES IN WELFARELAND (MOSTLY)
THROUGH THE SYSTEM DARKLY - March 9, 2007
By: Roderick T. Beaman
Over the years, I' ve witnessed and read about a number of events that have left an indelible impression on me about the welfare system.� In no particular order, here they are. I leave the reader to arrive at his own conclusions.�
When I was an intern, on my first surgical rotation, I was given the duty of discharging a post-surgical female.� The surgeon instructed me to tell her to take a good general vitamin.� When I told her, the patient demanded a prescription for it. She was actually indignant, saying "I'm on welfare.� I shouldn't have to pay for it."� When I told the attending that she was demanding a prescription, he told me to tell her that vitamins weren't covered.� He told me that he'd be damned if we should have to pay for something like that.� She, grudgingly, accepted.���
For a while during the 1960s, the welfare department of New York City was having trouble finding living quarters for their clients.� So, they put them up in hotels.� And if they couldn't find a spot in just any old hotel, why they'd put them up at The Waldorf-Astoria!� When one welfare client was asked how she felt about living at one of the most expensive hotels in the world, she responded, "The maid service could have been better."� Esquire Magazine gave it a dubious Achievement Award for the year with the caption, "What do they want?� What do they really want?"
When I used to work the emergency room, I'd often treat patients or their children.� It wouldn't be unusual to later go to some neighborhood Formica table top restaurant and see the mother working as a waitress.� She was working 'under the table', as the saying goes.� She wasn't supposed to be receiving any wages at all.� At least give her credit for trying to earn something but, if she had been found out, she would have had her monthly allowance reduced.���
Welfare patients used to come to the emergency room for routine medical visits.� Our hospital had no contract with the welfare department, so they'd pay the physician nothing for the visit because they maintained that it should have been treated in an office.� We'd have to treat the patient because if we didn't, the welfare department would withhold all payments to the hospital.� But if the recipient called them up and didn't know what to do about some minor medical complaint, they'd tell him to go to an emergency room.��
One day, I was looking out one of our windows overlooking the parking lot, when a Lincoln Town Car pulled up.� A woman, wearing an ankle length fur coat, got out and walked to the back entrance.� I said to myself that she was on welfare and was coming to the E.R. for a medical problem for which we'd get paid nothing.� .�
Sure enough, a few minutes later, I heard the receptionist's typewriter tapping.� When she handed the patient's information sheet through the window, I looked at it and could tell by the case number that she was on welfare because of ADC (Aid to Families with Dependent Children).� I asked the receptionist to get her case card so I could look at it.� She had five children with four different last names and she had a fifth.� That meant that she had five children by four different men who were either contributing nothing or nearly nothing to the costs of raising them.� So, it fell to the taxpayers.��

I knew a couple who got divorced because they couldn't afford health insurance for themselves and their three children.� When they divorced, she immediately qualified for ADC.� He worked but had no health coverage.� Three or four nights a week he'd stay at the house with her and the other nights, sleep elsewhere.� He couldn't stay all the time, because if it was discovered, she'd lose the welfare coverage.�
I know a woman who was sent to optometry school while on ADC.�
I know another woman who was went to hairdressing school while on welfare, after she had a child out of wedlock.� Since she graduated, she has never worked a day as a hairdresser.�
Another patient brought her son to the E.R. while I was an intern, and handed him to us, lifeless.� We tried to resuscitate him but he was Dead On Arrival.� She broke down into tears when we told her of it.� She sat in the E.R. crying that 'I only have six kids, now.'� The more children the recipient had, the higher her monthly grant.
We used to submit our payment claims for medical services on IBM cards.� We'd often have the cards returned to us for signatures, usually the physician's.� One colleague often told the story of how he had one returned and said, "Let's see if they'll pay it, if I sign it 'Donald Duck'."� He signed it 'D. Duck', sent it in and, sure enough, he got paid.
In my private practice, for a long time, I refused accept welfare patients because of the bureaucratic snafues and the length of time, often three or four months, that it took to get paid anything, that was if you got paid at all.� It wasn't unusual for them to 'lose' a bunch of claim forms.�
One of the departments at the hospital, had a woman who did volunteer work and was on Rhode Island Disability.� They asked me to treat her for her back problem and I relented.� I treated her at the hospital and she came to my office.� After I treated her, she asked me how I thought she would be.� I told her that I thought she was over the worst of it but she might have some more pain, but probably much less.� She thanked me, saying that she was glad because she was going to Bermuda the next week and she didn't want it to ruin her trip.�
We had another patient who was on General Public Assistance (GPA).� GPA is usually for some type of general problem, often mental such as retardation or psychosis, that renders the client incapable of work.� This one patient had a brown belt in karate, yet he was on GPA. � You should ask why someone with a brown belt in karate shouldn't be capable of some kind of gainful employment.� He was what we call a frequent flier.� He'd come in regularly for some kind of chronic problem that should have been seen in an office.��� �
One time he came in with his girl friend who had no coverage.� The physician, Bert, a no nonsense kind of a guy, examined her and gave her a prescription.� The Karate GPA Kid came in and asked Bert to give him a prescription on a welfare form in his name because he could get it for no charge.� Bert threw him out and called the welfare department to report it as fraud.� The woman there asked him why they were bothering them for something like that.�
There was another woman, a frequent flier, who had an asthmatic son.� He was truly sickly but the mother used to bring him in on a Friday night to have him admitted so that she and her boy friend could take off for the weekend. � She did it every five or six weeks. �� I fell for it a few times but finally wised up.� This one weekend, she brought him in and I told her that he wasn't sick enough to admit him.�
She went off on a sob story about how it was too much for her to take care of him.� She might have to stay up all night with him, crying for dramatic effect.� I told her, look lady, I have four kids and many a night my wife and I spent walking the floors with one or more of them, so her sobs fell on my deaf ears.� She didn't like it but shut up.� She went out into the waiting room as her boyfriend arrived with his suitcase packed.� So when she told him about her son not being admitted, he got mad.�������� ��������������������
These are some of the misadventures we had over the years in just this one man's experience with welfare.�� Your tax dollars at work.
�
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."
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Dr. Roderick T. Beaman is an osteopathic family physician practicing in Jacksonville, Florida. He was born in New York City and attended New York University as an undergraduate. He is a published poet, on-line columnist and is a recipient of a 2003 Ron Paul Liberty in Media Award. He has written an un-published novel about the abuse of government power. He is a regular columnist for Ether Zone.
He can be reached at: thefreedombeam@comcast.net
Published in the March 9, 2007 issue of� Ether Zone.
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http://www.news.com.au/adelaidenow/story/0,22606,21363195-913,00.html Trillion-dollar problem for China - AdelaideNow - March 11, 2007
Short synopsis of China's new fund, new direction in thinking and investment ventures abroad.

http://www.bloomberg.com/apps/news?pid=20601103&sid=apUPkopzkcV8&refer=us Greenspan is Wrong: Yields Say Recession Risk is 50% - Bloomberg | March 11, 07
Up is down, more is less, left is right are
truisms of a lending trade that seems inimical to stable interest rates and honest accounting.

@ mikal,

It's not too hard to come up with stories about gov't assistance abuse, but they all pale in comparison to the abuse of government funds by the military and Homeland Security establishments - if only because the of the size differential in their budgets. A full 30% of the Iraq reconstruction money (many billions) just "went missing". Eighty-five percent of the New Orleans refuse disposal money (hundreds of millions) was "absorbed" by layers of sub-contracting, according to the OMB. As with Nancy Grace and her ilk, the press spotlight is typically pointed at the individual abuser, and away from the corporate abusers, who reap much more.

Let's face it. At 95% dollar depreciation over 94 years, and loan reserve requirements all but a fiction, the banks have received the most "government assistance" of all. Lest we forget, they also received a free gift of confiscated gold in 1933 that was almost immediately "revalued" from $20 to $35.

While there is no doubt, also, that assistance programs (individual, military contractor, or relief contractor) do a lot of good, those who suggest that they become breeding grounds for fraud and waste by the nature of their very size have a good point. Only a week before he was silenced, Dr MLK talked publicly about the HUD fraud (in the TRILLIONS) that was "rediscovered" by Catherin Austin Fitts 20 years later.

But I find it most interesting that the most staunch supporters of "the survival of the fittest" welfare attitudes are the very same people who cringe at the thought of that theory being taught in their schools!

Reagan, who advocated small government, while accelerating spending more than any previous president except Roosevelt, had an interesting platform, but was totally inept at implementing it, since his support base was strongest on the military contractor "gravy train".

Unfortunately, besides Dr. Paul, the last Congressman who meant it when he talked about government limits was Davy Crockett, a LONG time ago.

http://www.financialsense.com/fsu/editorials/deepcaster/2007/0309.htmlHere's Deepcaster citing shadowstats.com on the subject:

Regarding real Gross Domestic Product, shadowstats.com (Deepcaster's choice for obtaining Real Statistics) indicated that "GDP declined" roughly 1.4% in 2006 versus the official 3.4% gain.

Similarly, Real Consumer Price Inflation, specifically, shadowstat.com's Alternate Consumer Inflation Measure, averaged 10.2% in 2006 rather than the 3.2% claimed by the Government Statistics masseurs. (Shadow Government Statistics January/February 2007 Edition issued February 20, 2007.)

The recent datum also reported by shadowstats.com relates to Annual Payroll Growth: "on an unadjusted year-to-year basis, Annual Payroll Growth slowed sharply in January, 2007to 1.61% from 1.70% in December."

In that same report, shadowstats.com summarizes our current and prospective condition: "the economic downturn already underway in the United States is an inflationary recession which could evolve into a hyperinflationary depression by the end of the decade."

Shadowstats.com ominously continues: "In terms of hyperinflation, the circumstance envisioned is not one of double or triple digit inflation but more along the lines of seven to ten digit inflation seen in other circumstances during the last century. Under these circumstances the currency becomes worthless as seen in Germany (Weimar Republic) in the early 1920's and Hungary after World War II, in the dismembered Yugoslavia of the early 1990's. The historical culprit has generally been massive printing of currency�."

@ Thoreauly, mikal,

George Ure's estimates are similar, perhaps because he reads the same source.

As long as TPTB and the media can hoodwink the public into believing that inflation is a linear curve, the Ponzi scheme is still "ON". "Whole Life" insurance had a 30-40 year run based on those crummy numbers.

Once the public gets the hyperbolic drift, the Wall St exits will be clogged with those seeking "real" assets.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5waLpE3W.zc&refer=homeBy Christina Soon
Bloomberg News Service
Sunday, March 11, 2007

BEIJING -- China will keep buying U.S. Treasuries after a new state investment agency begins operations to help the nation manage its $1.07 trillion foreign-exchange reserves, central bank Vice Governor Wu Xiaoling said.

China, the second-largest holder of U.S. government debt, wants to invest its reserves to support an economy that grew 10.7 percent last year, without causing large swings in global markets. The dollar slumped 1 percent against the euro in the week ended Nov. 11 after central bank Governor Zhou Xiaochuan said he plans to diversify holdings.

Asked today in Basel, Switzerland, whether China would continue to buy U.S. Treasuries, Wu told Bloomberg News: "Yes." Wu is attending the bi-monthly meeting of central bank governors from the Group of 10 nations.

The People's Bank of China had a 26 billion-yuan ($3.4 billion) loss from exchange rate movements in 2006, according to estimates by Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai.

The new agency will seek to "maximize the profits" of the reserves, Finance Minister Jin Renqing said March 9. The central bank's Wu on March 8 said "any area is possible as long as it will ensure and increase the return of our investment."

Wu told reporters in Basel that a timeframe for setting up the new reserves agency had yet to be set. "It's still under preparation," Wu said.

China is still studying what the agency will invest in, she said.

Wu said former Vice Finance Minister Lou Jiwei is leading a team in the preparations of the new agency. Lou was on March 6 promoted to deputy secretary general of the State Council, the cabinet.

China is unlikely to diversify "massively" away from U.S. Treasuries to prevent the yuan from strengthening, Jan Lambregts, head of research at Rabobank International in Hong Kong, said in an interview today.

The central bank buys dollars to prevent the value of the Chinese currency from rising from the inflows of export earnings. Diversifying away from U.S. Treasuries would mean selling dollars, Lambregts said.

"They have a policy that they will allow gradual appreciation of the yuan, but no more than that," Lambregts said. "They don't want to see the dollar crash. I continue to see the Chinese as substantial buyers of U.S. Treasuries."

The trade gap swelled 74 percent last year, driving reserves to a record. The surplus and China's foreign-currency holdings have left the economy awash with cash, making it difficult for the government to slow lending and investment to curb asset bubbles.

The yuan has been allowed to gain by as much as 0.3 percent against the dollar either side of a so-called central parity rate since the end of a fixed-exchange rate regime in July 2005.

The central bank calculates a daily rate by taking a weighted average of quotes from commercial banks designated to act as market makers in the currency.

U.S. Treasury Secretary Henry Paulson on March 8 urged China to reduce control over the exchange rate.

Some officials from the U.S. and Europe deem the more than 6 percent yuan appreciation since China dropped a dollar link on July 21, 2005, insufficient to balance the world's lopsided trade. They say the Asian nation deliberately keeps an undervalued currency to benefit Chinese exporters.

China will develop its yuan-denominated corporate bond market this year, Wu told reporters.

"That's part of the broader push to develop domestic financial markets, and a well-functioning bond market is at the heart of such a new financial system," Rabobank's Lambregts said.

The central bank in February ordered lenders to set aside more money as reserves for the fifth time in eight months. Lenders must set aside 10 percent of deposits, up from 9.5 percent.

The central bank has raised its benchmark interest rate twice since April. The current interest rates are "appropriate," Wu said.

The nation is trying to slow investment and lending to curb inflationary pressures and asset bubbles in property and stock markets. The economy expanded 10.7 percent in 2006, the fastest pace in 11 years.

Premier Wen Jiabao on March 5 said China is seeking slower economic growth of 8 percent this year. Ma Kai, director of China's top economic-planning agency, the National Development and Reform Commission, on March 7 said the target is just a guideline.

Maybe China will become the 52nd State or one of U S protectorates

Let's see, they want the Yaun to remain low, but they want the inherent value of the reserves that are backing it to increase "profitably".

Am I the only one that sees the contradiction here?

How can their value of their currency NOT rise if their reserves compound their own value?

Yes. what's the worry? The US doesn't worry about its currency becomming too expensive- we have a printing press for that.

http://www.cp.org/english/online/OnlineFullStory.aspx?filename=j030904au≠wsitemid=61235039⟨uageid=1(The Canadian Press) -- The rise in the price of gold is often attributed to world political factors, such as Iran's defiant stance on uranium enrichment.

But even when world political tensions concerning the Middle East eventually subside, there is one underlying cause - the re-pricing of U.S.-dollar assets because of that country's deficits - that is likely to continue to keep precious metals in an uptrend for years to come.

It's not just gold and silver that have been affected. The U.S.-dollar prices of many metals have climbed dramatically.

Countries that have these "hard assets" like Canada have seen their currencies appreciate against the U.S. dollar.

Even the rise in real estate prices worldwide can be traced to some degree to people's expectation that an upward swing in inflation, in other words, a devaluation of paper assets, is the natural consequence of the severe U.S. government and current account deficits.

...the attraction of U.S. assets has been wearing thin. Holders of U.S. dollars worldwide, including some central banks, are instead now choosing more often than before to accumulate gold or alternative currencies such as the Euro.

It's just common sense. Why should they continue to prefer U.S.-dollar assets when their value is steadily dropping against virtually everything else?

...The process is likely to continue for many years to come, and precious metals will be among the beneficiaries.

^___(see full text at url)___^

A rare presentation from the media.

R.

The Condition of the Dollar

By Lindsey Williams

There is so much to touch on regarding the dollar this month, I hardly know where to start. Regardless of where I begin, the news is not good and affects all of us.

First on our list is China. They have now announced that they are refusing to accept American Corporations purchasing into their stock market any longer as they did in the past. China also said that they are no longer going to be purchasing our securities as they have in the past, including bonds and T-bills. China's decisions and subsequent announcements at the beginning of the week has sent a panic across the World's markets.

Additionally, OPEC met recently and they have also stated they will be diversifying into other currencies instead of just the American dollar. They will now begin accepting other currencies and limit the trade of oil via the American dollar.

March 21st 2007 will be one of the most significant dates this month. Iran has outlawed the American dollar and will put anyone in jail that uses it in their country after that date. They have the ominous notoriety of being the first nation in the world to do such a thing. The real issue in Iran is NOT nuclear, but rather the decision to not use the American dollar for trade and the sale of oil. On the heels of Iran's decision, North Korea has followed suit and also outlawed the use of the American dollar in their country. Finally, Malaysia the next day did the same thing.

Central banks around the world are increasingly diversifying their reserves, including cutting holdings of American dollars, according to a survey sponsored by Royal Bank of Scotland Group PLC, the U.K.'s second-largest bank. Italy, Russia, Sweden and Switzerland have made "major adjustments" in foreign-exchange holdings favoring the Euro and the British pound, according to the poll conducted by Central Banking Publications Ltd. between September and December. "Central banks are open to saying they've been diversifying to improve returns and reduce exposure to any single currency," said Sean Callow, senior currency strategist at Westpac Banking Corp. in Singapore. There's no doubt that when they say 'diversification' they mean selling dollars.

Last week a friend of mine told me they called their bank president in Vancouver, BC and he agreed with everything I have been saying about the dollar. What amazed me the most was her comment that he told her his bank is currently making preparations for the crash of the American dollar!

My dear friends, I urge you to structure yourself and get out of the liquid dollar immediately. I suggest that you get out of stock markets and into international hard assets such as real estate, gold and other assets.

http://www.eurekalert.org/pub_releases/2007-03/ru-gna030907.php
"Rice University chemists have discovered that gold nanorods spontaneously assemble themselves into ring-like superstructures. The finding could potentially lead to the development of novel nanodevices like highly sensitive optical sensors, superlenses, and even invisible objects for use in the military.

http://news.yahoo.com/s/nm/20070312/bs_nm/china_economy_dc;_ylt=AuiGiQRWCIFzRLFiii.wzkO573QABig Trade Surplus Overshadows China's Reform Pledge

By Eadie Chen and Tamora Vidaillet
Reuters
via Yahoo News
Monday, March 12, 2007

BEIJING -- China pledged on Monday that 2007 would be another year of extensive financial reform but said there was no quick way to bring down its record trade surplus.

Central bank governor Zhou Xiaochuan said China would pursue reforms in areas including the exchange rate regime, interest rates, foreign exchange derivatives, and the gold market.

In a wide-ranging statement and accompanying news conference, Zhou set out the sort of market-orientated reform agenda that U.S. Treasury Secretary Henry Paulson urged on China during a keynote speech in Shanghai last Thursday.

But on the emotive issue of China's trade surplus, which is stirring protectionist sentiment in Washington, Zhou said the solution lay in deep-seated structural reforms that, by definition, would not have an impact overnight.

"The current trend of imbalanced trade will take some time to be adjusted and addressed," the central bank chief said.

As if to underline his point, China later reported a trade surplus for February of $23.76 billion, three times bigger than expected and the second-biggest monthly total on record.

That took the rolling 12-month surplus to a record $205.2 billion from $183.9 billion in January, providing fresh ammunition to U.S. critics who say China is deriving an unfair trade advantage by holding down the value of its currency.

Zhou said China would introduce more flexibility to the yuan, which has gained a further 4.7 percent since it was revalued by 2.1 percent in July 2005 and allowed to float in managed bands.

The central banker also promised that China, which retains strict capital controls, would let more money flow abroad.

But he added: "The most effective way of addressing imbalances in international payments is to enact policies aimed at bringing about structural adjustments to the economy. First is to encourage domestic demand, particularly consumption and growth in the services sector."

Sharing the podium with Zhou, Commerce Minister Bo Xilai said China was not pursuing a big trade surplus for its own sake. But he, too, cautioned against expecting instant cures.

"The trade surplus does not come about solely or mainly from trade but a result of the overall pattern of the industrial structure and international economy," he said.

The measures outlined by Zhou mark a further step toward a greater role for market forces in an economy that remains a mixture of unbridled capitalism and unreformed state planning.

In the same vein, parliament later this week is due to pass the first law enshrining private property rights since the Communist Party took power in 1949; it will also level the playing field for foreign and domestic firms by unifying the corporate income tax rates they pay.

Zhou said the central bank was studying introducing more currency derivatives so banks and firms can hedge the risks that come with a freer-floating exchange rate.

China would actively push to liberalize interest rates so the cost of money -- the most important price in any economy -- is determined by market supply and demand and responds to the monetary policy decisions of the central bank.

To reduce the dominant role of banks in providing finance to the economy, companies would be encouraged to issue more bonds; even China's gold market would be opened up further, though Zhou did not say how.

One of the headaches of China's huge trade surplus is that it floods the banking system with cash, and Zhou said the central bank would remain active in mopping up the excess money, which it fears will fuel a rebound in investment or speculation in shares.

Since last June Zhou has already increased 5 times the proportion of deposits that banks must tie up in reserve at the central bank, instead of lending out, and he said further increases were on the cards in the months ahead.

Zhou touched only briefly on the new investment agency that China is creating to help manage its $1.07 trillion in reserves.

"When reserves are high, the considerations involved in managing foreign exchange reserve portfolios may vary and there may be some adjustments," Zhou said.

"For example, when reserves are high, you may invest more in long-term assets and there might be some shift in the balance of risk and security of the products you invest in," he added.

@ Sir Slingshot.

Outlaw use of FRN's in-country? That only forces all the FRN's into hiding, or into the state banks.

Will the state bank be switching to euro or other alternative clearing currencies Ex-country? Moreover, will there now be a rise in demand for euro notes in these anti-dollar nations? The use of paper dollar notes in these countries persists for a reason; therefore, if they can't have dollars, what is the next best thing? (and is it yellow and shiney?)

http://www.freebuck.com/today.shtmlSeems just after 3pm today we had a minties moment where "everything" went south hard.
Thank God management were on their toes eh?

http://www.futuresource.com/charts/charts.jsp?s=TNXY&o=&a=V%3A5&z=610x300&d=LOW&b=CANDLE&st=Looks as if someone bought a few 10's to market circa 1440 triggering an across the board(s) adjustment.

Markets are VERY skittish at present.

The thing to take away from this afternoons little flurry (assuming I've got the timelines correct) is that in an SM rout, we'd expect the "flight-to-quality" to show up in Bonds ...right? So where is the retreat path when the so-called "quality" itself sells off?
If today's action is any sort of harbinger, the next stop after quality is "VAPOR", as it didn't show up/green ANYWHERE!

channel 5 spotlighted recent gang related wars tonight. 12th street (the old school, lead by a woman who has murdered 6 people), 31st street & 51st street gangs have had 4 battles in the last week. police confiscated dick tracy-like guns with 100 round clips. It's all about money made from rap music. A rapper was murdered. then revenge, & retaliation, until they are caught...

The Fed's technical staff is antagonistic towards the discussion of member commercial bank adjusted "free" legal reserves. Just review their research papers. Fed speak on bank reserves is heresy. Heaven forbid economists debating anything other than the proper level of the federal funds rate, which is supposedly consonate with the proper level of the adjusted monetary base [sic]. Richard Anderson (the Fed's guru on the adjusted monetary base and reserves) said no one at the Fed watches legal reserves.

However, the money supply can never be managed by any attempt to control the cost of credit. And the fed funds "bracket racket" is responsible for the boom bust characteristics of our economy since 1965.

I give you freely what was given me.

It is mid March.

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

March 12 (MarketWatch) -- Gold futures ended a volatile session Monday with a modest loss, pressured by uncertainty over global precious-metals demand and falling oil prices. Even so, gold still managed to finish above the $650-an-ounce level for a fourth session as dollar weakness and declining supplies of the metal provided support.

Gold for April delivery fell $1.70 to close at $650.30 on the New York Mercantile Exchange. It traded between $647 and $654.30 for the day, but it has closed above $650 in each of the trading sessions since Wednesday.

On the currency markets, the dollar declined against major rivals on Monday, raising the prospect of gold demand and providing some support for the metal's prices ahead of key economic data to be released later in the week.

The dollar was last down 0.6% at 117.61 yen, while the euro rose 0.6% at $1.3188.

Oil's weakness had contributed to gold's decline Monday. Crude futures fell near their lowest level in three weeks, with warm weather in parts of the U.S. leading heating-fuel prices lower and key oil producers unlikely to take any action to stem the slide in prices at a meeting later this week.

But all things considered, the decline in the dollar, Australian supply slumping, a Citigroup report calling for $700 gold soon and news that Buenaventura, a large gold mining company from Peru, has reduced its hedge book by nearly 500,000 ounces in the first quarter to 1.45 million ounces are "all very market positive," said Blanchard's Neal Ryan.

"After the gyrations of two weeks ago and the rebound and consolidation last week, this week may well see some more direction as each metal starts to trade its own fundamentals more," said William Adams, an analyst at BaseMetals.com.

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

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

There has always existed professional sanction for a variety of bias and ignorance:

1) For example, MSB's balances in the MCBss were designated as interbank demand deposits (IBDD's �balances maintained by customer banks in correspondent banks), presumably because MSBs were called banks (with the exception of 6 MSB banks that had MCB regulations) and were insured by the FDIC and not the FSLIC (and not counted in M1). At the same time S&L's deposits were insured by the FSLIC and their balances in the MCBs were not designated as IBDDs (were counted in M1); neither institution had the right to hold deposits transferable on demand, without notice, and without income penalty (the legal basis for becoming a MCB), prior to the DIDMCA; both were the customers of the MCBs; and neither had REQ Q restrictions prior to 1965.
2) From the standpoint of monetary authorities, charged with the responsibility of regulating the money supply, none of the current definitions of money make sense. The definitions include numerous items over which the Fed has little or no control (e.g., M2), including many the Fed need not and should not control (currency). The definitions also assume there are numerous degrees of "moneyness", thus confusing liquidity with money (money is the "yardstick" by which the liquidity of all other assets is measured). The definitions also ignore the fact that some liquid assets (time deposits) have a direct one-to-one relationship to the volume of demand deposits (DDs), while others affect only the velocity of DDs. The former requires direct regulation; the latter simply is important data for the Fed to use in regulating the money supply.
3) Money should be defined exclusively in terms of its means-of-payment attributes. The present array of interest-bearing checking accounts has confused the distinction between means-of-payment accounts and saving-investment accounts and created a dilemma as to what portion, if any, of these interest-bearing accounts should be considered as savings. This dilemma is resolved if transactions velocity is taken into account; i.e., M1 is analyzed in terms of monetary flows (MVt). No money supply figure standing alone is adequate as a guide to monetary policy.
4) It is inaccurate to exclude the Treasury's General Fund Account from the assets included in M1. No one has established any unique price effect of federal oulays as compared to state and local government outlays, or expenditures by the private sector. Of course, the shifting of funds to and out of the Federal Reserve banks has a dollar for dollar effect on member bank reserves, but that is another problem that can be, and is dealt with through open market operations.
5) It is ironic that professional economists, who confuse the supply of money with the supply of loan-funds, conclude that increases in "L" are inflationary. The conclusion is tantamount to saying, "don't save money" as savings (which we don't have enough of) adds to "L" and therefore has an inflationary bias, when in fact, savings (a large portion of "L") is evidence of money that has already been spent.
6) Monetary policy objectives should not be in terms of any particular rate or range of growth of any "M". rather, policy should be formulated in terms of desired rates of change in monetary flows (MVt) relative to rates of change in real GDP. Because of monopoly elements and other structural defects which raise costs and prices unnecessarily and inhibit downward price flexibility in our markets, it is probably advisable to follow a monetary policy which will permit the rate of monetary flows to exceed the rate of change in real GDP by c. 2 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 (there is evidence to prove 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.

CB disintermediation is not, and has not been, predicted on interest rate ceilings. Disintermediation for the CBs can only exist in a situation in which there is both a massive loss of faith in the credit of the banks and an inability on the part of the Federal Reserve to prevent bank credit contraction, as a consequence of currency withdrawals. The last period of disintermediation for the CBs occurred during the Great Depression, which had its most force in March 1933. Ever since 1933, the Federal Reserve has had the capacity to take unified action, through its "open market power", to prevent any outflow of currency from the banking system.
Disintermediation for the intermediaries-S&L, MSB, CUs, MMMFs, etc., is predicated on their loan inventory (and thus can be induced by the rates paid by the commercial banks); earning assets with historically lower rate and longer term structures. In other words competition among CBs for time deposits has: 1) increased the costs and diminished the profits of commercial banks; 2) induced disintermediation among the "thrifts" with devastating effects on housing and other areas of the economy; and 3) forced individual banks to pay higher and higher rates to acquire, or hold, funds.
The monetary authorities of the Federal Reserve System, through their control over the volume of Reserve Bank credit, and the reserve ratios applicable to member bank demand and time deposits (and Eurodollar borrowings) can control the size and rate of expansion of the nonmember banks � as long as the member banks hold a substantial majority of all commercial banks assets. Since 1942, money creation is a system process. No bank, or minority group of banks (from an asset standpoint) can expand credit (create money) significantly faster than the majority banks expand.
Under the Act the legal reserves of the member banks remain the same, namely, balances in the Federal Reserve banks plus vault cash. Nonmember banks, S&Ls, MSB, and CUs ultimately (after eight years) were subject to uniform reserve ratios as these pertain to size of institution and type of deposit. But there is this important difference in reserve asset requirements: The nonmember banks can hold a part of their legal reserves in the form of interbank demand deposits (IBDDs) in correspondent member banks; the S&Ls, as IBDDs in the Federal Home Loan Banks; and the Credit Unions, as IBDDs in the National Credit Union Administration Central Liquidity Facility. Presumably in order to prevent the pyramiding of reserves, the Act requires all institutions holding these particular IBDDs to redeposit the funds in Federal Reserve Banks. Unfortunately, pyramiding will not be eliminated unless the Fed imposes a 100 per cent reserve ratio on these accounts. But the Act specifically exempts all except correspondent member banks from any reserve requirements.
There is no possible way for the Fed to get a "handle" on the money supply unless it has (and properly exercises) direct control over the volume of legal reserves, and the reserve ratios, of all money creating institutions. This the Act does not provide. The legal reserves of all money creating institutions should consist of directly held balances in the Federal Reserve banks � that and that alone. This was the original definition of the legal reserves of member banks in the Federal Reserve Act of Dec. 23, 1913 � (Owens Glass Act) and it is still the only viable definition (pre-1959 requirements pertaining to assets).
In due course, under this Act, our means-of-payment money supply (now designated as M1A by the Board of Governors) will approximate M-3.

From the standpoint of the individual commercial banker, his institution is an intermediary. An inflow of deposits increases his bank's clearing balances, and probably its legal reserves - and thereby it's lending capacity. But all such inflows involve a decrease in the lending capacity of other banks, unless the inflow results from a return flow of currency to the banking system, or is a consequence of an expansion of Reserve Bank credit.
The source of time deposits to the commercial banking system is demand deposits, directly or indirectly via the currency route or through the banks undivided profits accounts. The financial intermediaries are the customers of the commercial banks. Money flowing to the intermediaries actually never leaves the commercial banking system as anyone who has applied double entry booking on a national scale should know. And why, from a systems standpoint, should the banks pay for something they already have. I.e., Interest on deposits? From the standpoint of the commercial banking system, CBs would be more profitable, if our legislators got the commercial bankers out of the savings business. The effect of allowing CBs to "compete" with MMFs and other intermediaries has been, and will be, to reduce the size of the intermediaries � reduce the supply of loan-funds (available savings), increase the proportion, and the total costs of CB time deposits.

flow, while your esoteric analyses of banking history / mechanics is deserving of thanks from the standpoint of volume alone, I would like to make a suggestion that would possibly make it even more valuable to those at this forum.

At the end of each posting, try ending with something to the effect of "and here's what this means for gold (or the dollar, or inflation, etc.)." Barring a direct tie-in to the topic at hand you give the impression that you are posting just to hear yourself speak.

PA

1) Because of the DIDMCA of March 31st 1980, the Fed cannot control the money supply. Our means-of-payment money supply is in transition. It will eventually evolve into a figure approximating M3. Then, reporting M3 will become increasingly important.

And a larger money supply, one which the Fed has chosen to ignore, will develop into one of the best indicators for the growth of GDP, and other things being equal, rates of change in M3 will become an even better predictor of the price of gold.

2) The "Ms". or what is money? The Fed isn't an expert in their own field. The Fed only tries to control the fed funds rate, and it can only do so in the short run. It will always overshoot its money targets, because its models use income velocity (Vi/GDP). Everything that I can think of will benefit the price of gold.

http://news.yahoo.com/s/ap/20070313/ap_on_bi_ge/subprime_lending;_ylt=AjqrK7XAOlcnDx9nJZy3Y81v24cALike, what else are they going to say? "It's a disaster and we're going to have to reduce interest rates fast, devalue the dollar by 40 percent, and impose currency and credit controls"?

* * *

By Marcy Gordon
Associated Press
via Yahoo News
Monday, March 12, 2007

The government is monitoring the distress in the subprime mortgage industry and believes the current situation is manageable, a Treasury Department official said Monday.

The comments by Robert Steel, the Treasury undersecretary for domestic finance, came as concern mounted on Wall Street and elsewhere that a blowup of companies that make higher-risk home loans to consumers with poor credit or low incomes could spill over into other industries.

"We monitor the markets all the time, and are hopefully pretty aware of market conditions," Steel told reporters in response to a question. "It seems to us that the situation is a manageable one, that we're watching."

Federal bank regulators, concerned about a spike in delinquencies and defaults on subprime home mortgages, earlier this month called on lenders to exercise caution in making the loans and to strictly evaluate borrowers' ability to repay them. The regulators said the guidelines, if formally adopted by the agencies and followed by lending institutions, could result in fewer borrowers qualifying for subprime loans.

Stocks rose on Wall Street on Monday as investors looked past widening cracks in the subprime lending sector. A warning from New Century Financial Corp. about its financial woes initially overshadowed positive merger news in the trading session.

The prospect of bankruptcy loomed over New Century, the nation's second-largest subprime mortgage maker, which scrambled to stay afloat after all its bank lenders cut off funding or informed the company of their intent to do so because of its failure to make payments. Irvine, Calif.-based New Century, which already has stopped accepting all new loan applications, said there is no guarantee it will receive additional financing.

Like other subprime lenders, New Century uses short-term borrowings to finance mortgage loans it makes and buys. Also like others, the company has been having difficulty obtaining the short-term lending needed to finance the mortgages.

The subprime sector has seen a sharp decline in banks' demand for potentially troublesome loans as the housing market has slowed since late 2005, grounding the high-flying real estate boom of earlier in the decade. As long as home prices were going up, borrowers who got into trouble could just refinance or sell their homes, sparing banks from being stuck with sour loans.

The fallout from the housing downturn has spurred several subprime lenders, including ResMae Mortgage Corp., Ownit Mortgage Solutions and Mortgage Lenders Network Inc., to file bankruptcy in recent months.

On Capitol Hill some mortgage industry executives told lawmakers that the subprime turmoil is a cause for concern but does not warrant government intervention, because the financial market can weed out the problem companies.

"There's absolutely no question that there were lenders with this product that got aggressive," John Robbins, chairman of the Mortgage Bankers Association, testified at a hearing of a House Financial Services panel. Those lenders are now being punished by the market as investors abandon them, he said.

Another witness, Karen Shaw Petrou, managing partner of Federal Financial Analytics, noted that subprime mortgages account for an estimated $1 trillion of the $8 trillion U.S. home-mortgage market.

"It is a very distressing picture at this point," she said. "People forgot that subprime means higher risk, higher risk means more losses."

A liberal think tank said Monday that the federal government should take new steps to protect low-income homeowners at risk of foreclosure.

The Center for American Progress said the government should consider grants to expand mortgage aid and foreclosure prevention programs for families falling behind on their monthly payments. As many as 2.2 million families around the country could lose their homes to foreclosure in the coming years, according to a 2006 report by the Durham, N.C.-based Center for Responsible Lending.

"Congress can't wait for that many families to foreclose," said Almas Sayeed, who wrote the report for the Center for American Progress. "The economic impacts for communities and for the country could be devastating."

I was talking to my wife. riddle me this, if these comments are tied to gold, then they should reflect the price of gold?

http://www.newsgd.com/business/prospective/200703130015.htmsss...and sspend it too! ~8-/

(news item from the Usagold Daily Market Report)

Ssnip:
"The government of Hong Kong Special Administrative Region (HKSAR) approved Monday to issue for trial a ten-dollar polymer note this year to circulate alongside the existing ten-dollar paper notes and coins, both of which will remain legal tender.

Hong Kong Financial Secretary Henry Tang said that the move aims to find out whether polymer notes are suitable for issue in Hong Kong and whether the community will accept them.

"Experience in countries that have introduced polymer notes suggests that they are cleaner, more durable and more secure. They are also more environmentally friendly, since they last longer and can be recycled for other use. As an international and vibrant city, there is a need for Hong Kong to explore this alternative technology for currency notes," Tang said."

(more at link)

...recyclable (cackle)...in other wordses, precious, when we need to add more zeroes, we can...sss... melt them down and reprint them! >8-)

Thank you for the cliff's notes versions of your earlier posts.

Regarding your riddle, absent any direct correlation from your posts via a bridge (i.e. "what this means to the price of gold is..." or "how this impacts inflation that will manifest itself in the near term is...") to a more direct statement, much of what you have submitted reads like a textbook of interest only to those who want to know how a watch is built, not what time it is.

I do appreciate your effort in putting your thoughts together in the way that you have. However, if it is your purpose to educate / instruct those on this forum as to the import of the machinations of banking, I would respectfully ask what you intend the end result to be. Do you wish forum participants to comprehend the inner workings of central banks or how the most recent actions by said central banks will affect them (and what actions they can take to best position themselves for a potential outcome)? I would submit that the latter would be the better desired outcome for posters at this forum.

My wife has called me away as well. I await your response.

PA

http://www.rba.gov.au/Museum/Displays/1988_onwards_polymer_currency_notes/first_polymer.htmlThe first poly notes were these, way back in '88. Their launch was not entirely without mishap though as the first batch had to be withdrawn due to a glitch with the holographic window as I recall.
I've got some AA prefix ones somewhere about the place and am told they are quite valuable nowadays ...fetching about $7US EACH!

flow5 (2/26/07; 14:34:35MT - usagold.com msg#: 152672)
Suckers Rally
If gold doesn't fall, then there's a new paradigm. The drop in member commercial bank adjusted "free" legal reserves is unprecedented.
--------------------------------------------------------
flow5 (2/22/07; 19:08:03MT - usagold.com msg#: 152471)
Golds Course
Stagflation is on the horizon. The stock market is vulnerable.

Gold will retrace until the middle of March.
Gold will then rebound.
Central Bankers cannot fix golds price.
Golds allure overrides its intrinsic value.
--------------------------------------------------------
This isn't fool's gold. But then, what is the likelihood that I know something that no one else does on this planet? And what would be the chance that I would share it? No, this is a gold mine.

There is something in this more than natural -- Hamlet

@ Flow5,

Web bots suggest we "beware the Ides", as well. Only 49 hours away on the Left Coast.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteThe last few posts inspired me to reference last year's Mar-Apr "gold rush".

Between Mar 25 and April 15, PoG rocketed up $180 from $550 to $730, a rather tasty 32% romp for Spot and Spike. Spike may have had the most fun, but Spot leveled out about 100 points higher on average, so romp they did.

"Historical precedent is no indication of future performance",

but then, again, why not?

Make that "between Mar 20 and MAY 15".

http://www.mineweb.com/mineweb/view/mineweb/en/page31?oid=15792&sn=Detailsnip:

"There is a good chance that metals prices move higher from current levels through at least mid-07," Citigroup's analysis suggested. "We expect copper to regain the psychologically significant $3.00/lb range in the coming months due to a combination of incremental U.S. consumption growth (rather than retrenchment), Europe and Japan continuing to turn the corner organically if modestly, solid Chinese re-stocking demand, and the supply side likely to undershoot 5.6& expectations."

"We regard the recent sell-off in commodities and emerging markets to be yet another contest between negative macro thematics and positive metals micro-indicators, such has been seen at least one per year in 2004-05-06," Hill and Wark indicated. "In each case, it has paid to dwell on the metals micro-indicators, which remain positive for copper in terms of inventories, merchant premia [prices], scrap prices, and smelter TC/RCs."

Citigroup also advised that "gold is quite likely to move to the $700/0z level or higher due to a mix of macro and supply/demand catalysts."

"Chinese resource regulatory and taxation changes, plus solid steel production growth in the 14.5% range, suggest that moly will stay above $20/lb," the analysis concluded.

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=with Bond, reminiscent of an old Pug who's had one too many bouts ...each time the bell sounds he comes out ...but at the end of the round he's more than happy to have just held station.
At this pit (0400) they're none too heavy on the punches and should reflect a droopy SM at the open. He might be able to manage a few airswings on his own account today!

Ah, but you should've seen him in his prime ...seconds out ...Ding, Ding!

Thank you for your response and for highlighting the thesis of your posts.

PA

Good observation. But that period shifts slightly every year. Its parameters usually fall between 3/12 - 5/5.

There are 3 different ways in which monetary policy can influence current prices. In order, 1) the most dominant is the current level of reserves, e.g., Y2K, 911, etc., 2) the second is the 24 month roc of in reserves (inflation), & 3) the last is the 10 month roc of in reserves (real gdp).

The relative strength or weakness of the seasonals can be calculated by comparing the same period of time in each of the preceding 20-30 years. However, this is deceiving, and it simply shows "asked" prices and doesn't presage prices or how far a swing may sway.

http://www.lenderimplode.com/Was 24. Now 36! A place to see them all.
Slingshot--------<>

http://www.ft.com/cms/s/406e649c-d0c5-11db-836a-000b5df10621,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F406e649c-d0c5-11db-836a-000b5df10621.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2FusThe New Century Financial problem has potential systemic implications. . .Also consider that the NCF problem doesn't begin and end with just that mortgage lender -- others are vulnerable. The real threat is not to the housing sector (though it will be affected) but the big banks, once again, through the web of counter-party contracts and automatically engaged reciprocal agreements. Many of Wall Street's biggest involved in this. We may get a chance to see if the counterparty system is capable of bailing itself out. . . .or not. More later.

The market is taking a turn for the worse as the afternoon gets underway. The Financials sector is now down sharply (-1.7%) after the Mortgage Bankers Association (MBA) recently said the rate of homes entering the foreclosure process hit a record 0.54% in Q4 and the delinquency rate on U.S. home loans jumped to 4.95% from 4.67% three months earlier. Delinquency rates rose in 49 states in Q4, foreclosure inventory rates grew in 44 states and the MBA pushed back its forecast for the housing market to regain footing from the middle of the year to the end of 2007.

http://www.interfax.ru/e/B/finances/26.html?id_issue=11692248MOSCOW. March 13 (Interfax) - The amount of gold in Russia's state reserves rose 2.2% to 402.8 tonnes, not including gold used for swap deals, between December and March, the World Gold Council (WGC) said.

The WGC said that 2.8% of Russia's gold and foreign exchange reserves consisted of gold, unchanged from December. Russia remained 13th in the world in terms of the amount of gold in its state reserves.

http://www.prudentbear.com/articles/show/1325Guest Commentary, by Michael J. Panzner

Rise of the (Selling) Machines
March 13, 2007
Michael J. Panzner is the author of Financial Armageddon: Protecting Your Future From Four Impending Catastrophes, published by Kaplan Business, and a 25-year veteran of the global stock, bond, and currency markets.
Excerpts:
"In the popular 1984 film, The Terminator, current California governor and former actor Arnold Schwarzenegger plays a cyborg sent back in time to eliminate the mother of future leader John Connor before he could be born. Single-minded and highly developed, the robotic killer relentlessly pursues his intended prey throughout the movie, despite strong resistance from the hero's supporters, although the good guys eventually win out in the end."

"Under the circumstances, index-related selling, for example, could transform markets in thinly-traded securities that have been unusually liquid and serene into boggy swamps of illiquidity. This would spur widespread fear and even a sense of panic, along with a substantial increase in volatility, as hordes of investors scramble nervously towards the exits.

The broad use of chart-based, trend-following, and momentum-driven trading and investing strategies is also likely to exacerbate the market's woes in the face of a sustained downturn. With fear a more powerful motivating force than greed, the herding behavior that such methods naturally encourage will likely create a snowball effect that will be hard for anyone�either those diving in or those bailing out�to resist.

Other modern risk-management methods and tactics will also fan the bearish flames once former long-term bull markets start coming apart at the seams. These include..."

Gold down $8.00 but the DOW down 220 points. Betcha they can not wait for the BELL TO RING. Overseas Markets looking RED. I have NO PITY for the banks selling mortages to those who should not have qualified. Can't blame people for trying to better themselves, but that predatory nature of banks and everyone is going to pay for it.
Slingshot--------<>

Lets see how much lipstick they put on this PIG?

Slingshot--------<>

http://www.denverpost.com/news/ci_5426638First a "Godless dollar," now a faceless one
By Chase Squires
The Associated Press
Article Last Updated: 03/13/2007 02:49:46 PM MDT
Snippit: "Denver - Mary and Ray Smith can't make heads or tails of a new presidential dollar coin they found last week. It doesn't have either.
A week after the revelation that some of the coins slipped out of the U.S. mint without "In God We Trust" stamped on the edge, the Smiths said Tuesday they found one with nothing stamped on either flat side.

It does have "In God We Trust" on the edge. What's missing is the image of George Washington on the front and the Statue of Liberty on the back. Instead, the Smith's coin is just smooth, shiny, golden metal.

"We're just so excited," Mary Smith told The Associated Press. "I'm just dumbfounded that we actually found something significant."
U.S. Mint spokesman Michael White said officials had not confirmed the Smiths' find. But Ron Guth, a professional coin authenticator in Newport Beach, Calif., said he is certain the coin is authentic.

"It's really pretty rare," Guth said. "It somehow slipped through several steps and inspections."

It could be worth thousands of dollars, maybe more, he said. The value will depend on how many similar misprints are found, but the Smiths' will always be worth more because it will be the first one to be independently authenitcated, Guth said.
The first "Godless" coins, which went into circulation Feb. 15, initially sold for $600 but were attracting bids of up to $152 on eBay Tuesday. It's not certain how many were made."

"Instead, the Smith's coin is just smooth, shiny, golden metal."

Choose golden metal.

A recession!!

If I am correct recession seems to loom when the Real Estate and Mortgage markets take a hit like they are now.

I wonder if Flow5 still believes that we are 100% clear of a recession hit? I bet he has a different opinion now! If not....just wait until the unemployment figures come out.

I think a lot of these investment bankers and mortgage bankers are just trying to keep their head above water by offering new "refinancing products" and they are STILL trying to reassure everyone that the economy is good.

Well, this time around what makes will make a big difference?

The PRICE OF OIL>>>> It's still high and going to go higher. Put all these indications together and I bet you can spell out some not so happy economic results.

Cheers!!

P.S.
Buying opportunity for PHYSICAL GOLD!!!

STILL A DEAL!!

http://www.usagold.com/gold/coins/frenchnapiii.htmlA special note from Jonathan:

As most of you know, this Thursday will mark the beginning of another NCAA basketball tournament. Others may or may not know that my beloved alma-mater, Notre Dame is making its first appearance in four years as a respectable six seed. Their achievement has encouraged a generous mood.

For two days only, until the first tip off on Thursday morning, we'll be offering some very nice discounts on pre-1933 Fr. Napoleon III gold coins. (The pricing is laid out at the URL posted above.)

As an additional incentive, should Notre Dame advance to the Sweet 16, requiring two wins on their part, all who purchase 5 or more coins through this offer will be given a free Silver US Eagle!

Great discounts, and I secretly get you rooting for the Irish. Cunning... I know.

--Jonathan Kosares

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

March 13 (Reuters) -- Gold futures finished Tuesday modestly lower, then extended their losses to nearly 1 percent in late electronic trade when U.S. equity markets were toppled across the board and oil fell.

US stocks fell sharply in afternoon trade, with the Dow Jones Industrial average ending down about 2 percent, all 88 components in the S&P financials index trading lower, and the Nasdaq Composite Index off more than 2 percent on news of mounting losses in the subprime mortgage sector.

"It was pretty quiet during exchange trading hours, but afterwards equities started to drop off and we're following them with the greater worries of the subprime mortgage sector," said one New York gold dealer.

Nervousness in the stock pits spread to gold investors, some of whom needed to sell out of precious metals to pay for holdings [losses] in other riskier assets, traders said.

"We believe people are liquidating gold in order to get capital together for other areas. And I think some people are just scared right now," said one trader.

The COMEX April gold contract lost 90 cents to close at $649.40, trading in a range of $648.80 to $653.50. After hours, April gold dropped $6.40, to $643.90, falling with U.S. stocks and other metals.

According to a Mortgage Bankers Association report, U.S. home owners initiated the foreclosure process in the fourth quarter of 2006 at the fastest pace since the MBA began its foreclosure survey 37 years ago.

The news undermined financial shares, the broader stock market, and then spilled over to commodities markets.

Earlier, gold moved definitively into positive territory after of a softer-than-forecast U.S. retail sales report and a Bundesbank announcement that it would not sell gold this year.

Crude oil prices, whose earlier rally pulled gold up to its session peak, reversed course, falling sharply in late trade as the stock slide rekindled worries over the health of the economy in the world's largest energy consumer. Some short-term gold players took that as their cue to grab quick profits as the day's early gains faded.

With a plethora of gold-supportive factors in the market both Monday and Tuesday, some traders said they thought gold would hold its earlier gains. But fears of loan delinquencies in the housing sector having a knock-on effect in other markets and in the economy caused some players to unload commodities, including gold.

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

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQOqLN4_DTV4What a clever marketing gimmick. Like those rare and fantastic mortgages with no documentation.... really a great marketing gimmick, once you examine what you have up close you see it is just a "blank", which the mint produces in large quantities and whose intrinsic value is zero- except for the dollar's worth of value that one exchanges to accquire it.

So it begins. With a good POG spanking. The lies and misdirection in subprime are just sickening.

Snippet:
March 9 (Bloomberg) -- Subprime mortgage bonds are falling in part because Wall Street dealers are lending less money to managers of collateralized debt obligations that buy the securities, according to investors.
END

Isn't that putting the cart before the horse, or perhaps, confusing the cart with the horse, and expecting the former to push the later?

Snippet:
Low-rated subprime mortgage bonds were ``relatively insulated'' from concerns about rising delinquencies until last month, Lehman said in March 5 report. Between August and February, spreads widened less rapidly than credit derivatives that provide bondholders protection against default.
END.

Isn't that because the credit insurance was WORKING? This is like blaming the fire on the fire extinguisher, if only it hadn't run out of gas!

Snippet:
The drop in CDO demand may be temporary as rising yields on subprime mortgage bonds make it possible to offer higher yields on CDO securities.
END.

This is like saying that the chaos in Iraq will make military recruiting easier because of the guaranteed hazard pay. Not only will there be a flood of volunteers, but on the other side of the trade, the Iraquis WANT their children to get blown up in the heavier cross fire too.

Just a bit logic challenged, but hardly unusual of late. There seems to be a lot of brave cheering going on. "We who are about to die salute you" BOSH! That would be courage. Instead these shills are saying "We who are about to watch you all get slaughtered salute your market savvy!"

Disgusting! Shameful! Cowardly!

Somebody get me a rope... I'll be back as soon as I finish cashing in my bank account at the coin shop.

And pin a medal on Doug Noland for bravery or something.

http://news.yahoo.com/s/nm/20070313/bs_nm/usa_subprime_paulson_dc;_ylt=AhdaPw6RzSUaK1k89J0x_bC573QAFrom Reuters
Tuesday, March 13, 2007

WASHINGTON -- U.S. Treasury Secretary Henry Paulson said on Tuesday a decline in U.S. housing activity has caused some damage in subprime mortgage markets but was not hurting the overall economy.

"I continue to believe the U.S. economy is healthy," Paulson said in an interview on CNBC Television when he was asked about a big drop in the stock market.

"We have had a significant housing correction in the U.S.," Paulson added. "You can't have a correction like that without causing some dislocations. It's too early to tell whether it's bottomed. I believe it has."

The U.S. Treasury chief said it "shouldn't be a surprise to anyone that there's some fallout in the subprime mortgage market ... but it's largely contained."

Paulson said the U.S. economy was "diverse" with growth in exports outstripping imports and consumers still spending.

"Inflation would appear to be contained so again I continue to believe we are making a successful transition from an economy that was growing at an unsustainable rate to one that is growing at a more sustainable rate," Paulson said.

After hosting a day-long session on capital markets and regulation, Paulson avoided a direct answer when asked whether the threat of rampant lawsuits was driving capital away from the United States to other centers.

"We have the best capital markets in the world. They're the most liquid, the most competitive capital markets in the world and they're very important to our economy," he said.

Paulson was interviewed on a day when U.S. stock markets posted their second-worst selloff of the year.

On another issue, he was asked whether pressuring China to let its yuan currency appreciate risks potential backfire if China becomes reluctant to buy U.S. debt securities.

But Paulson, who visited Beijing and Shanghai last week, said China does not yet have a market-determined currency exchange rate and indicated he was not about to back off in demanding that China move toward one.

"They need to show more flexibility," he said.