Sir Slingshot, you certainly are right about the truckers not liking the fact that Mexican trucks will be allowed on our highways. Having a little expertise on the subject expect some resistance when it actually happens. Some years ago in El Paso, TX two or three hundred truckers shut down the border crossing between El Paso and Juarez, Mexico. Their complaints were many and dealt mostly with Mexican trucks bringing containers and trailers from the twin plants in Juarez. After dropping their loads in El Paso they would then work all day hauling loads from the railroads to many businesses in the area, cheaper than the local truckers would do it. Against the law? Yes. But did they do it? Yes.

In that part of the country when you do business with the Mexicans you are either bribing them or they are bribing you. Worst of the problem was that most of the vehicles weren't licensed properly, had unlicensed drivers (had a Mexican license they bought from the police, probably in someone else's name) and they were not properly insured. The equipment was not maintained and was dangerous to everyone on the roads. Whatever system they come up with to regulate these trucks coming from Mexico, the Mexicans will find some way around the regulations. And, as usual, there will not be enough people to enforce the laws. In those days there were only 2 Commercial Public Safety Officers to cover 300 miles from El Paso east, and they spent most of their time giving tickets to the American truckers for various reasons, none of which were dangerous infractions. They liked giving the America truckers tickets because the Mexicans would not pay the fines, and the Americans had to.

One of the truckers I was working with had his rig stolen. He knew who stole it and where it was located, but could not recover the vehicle unless he paid bribes to both the thief and the police. If he had tried to recover the vehicle any other way, they would have killed him and no one would have asked any questions.

There is another story I would like to mention briefly...if only to remember Enrique Salazar, a DEA agent kidnapped by the Mexican police, tortured for 2 days, kept alive by a Mexican doctor during the torture, and then killed. His pilot, a Mexican national, was also murdered. The DEA eventually, by putting so much pressure on the locals, found the graves and the bodies were recovered. Later the DEA master-minded a kidnapping of the doctor and brought him to the USA and charged him with murder. Needless to say, the local court let him go, not because he was innocent, but because the manner in which he was captured and brought into the country was not legal. No one was ever punished for the crime. I thought we should just remember his name as he was as much a martyr for this country as any soldier that dies on the battlefield.

Lexx

http://www.brillig.com/debt_clock/CONgress raised the debt limit just one year ago from $8.2T to $8.9T, and we're only about $120B short of reaching the arbitrary limit once again - about 80 days at the current deficit rate. Just right for running before FYE.

Remember, this only covers the "on-budget items", so "special" war expenditures and bribes for staging bases don't even show up here.

Here are a couple links to stories from a year ago about the current limit being passed. "Just one last time", they pleaded.

http://www.npr.org/templates/story/story.php?storyId=5282521

http://www.npr.org/templates/story/story.php?storyId=5282918

http://www.netcastdaily.com/fsnewshour.htm
Druid: Enjoy the 2nd hour. Here's your black box problem. It has to be this way because to many currency units are chasing to few stock units so you have to debase the stock units to try and maintain some type of price range equilibrium throughout the entire equity markets. Think of it as a regulating valve of sorts.

http://www.abcs-of-gold-investing.com/

http://news.goldseek.com/InternationalForecaster/1175439840.phpInternational Forecaster March 2007 (#5) - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
-- Posted Sunday, 1 April 2007 - Excerpts:
"For all of its success China is a problem waiting to explode. The entry of the government into the stock market recently, which dropped the Shanghai averages some 9%, we see as only the beginning. The government is incapable of controlling economic growth and we expect the government will again and again hit their stock market in order to cool speculation. Interest rates are up and liquidity is being drained from the system. Next is the attack on the market again, which in turn will affect markets worldwide again."
Mikal-- I wonder if this is a version of what Druid posted:
"Druid: Enjoy the 2nd hour. Here's your black box problem. It has to be this way because to many currency units are chasing to few stock units so you have to debase the stock units to try and maintain some type of price range equilibrium throughout the entire equity markets. Think of it as a regulating valve of sorts."

"Open interest nosedived off 11.543 contracts to 345,876 and that is 75,000 less contracts than at its high. We are back where we were a month ago. The economic sanctions against China to protect American paper producers will be followed by many other industries, which can only help gold and silver."
Mikal-- Tit for tat will follow not only because the US gov't is committed to further selective tariffs, but (from an article posted Wednesday) to also address the "intentionally weak yuan", and if that action spreads to the yen as well then the dollar can go lower, faster.

"The only answer as all these so-called geniuses will finally realize, is that only overall tariffs will solve our trade problem and bring industry and services back home to employ Americans. Any tariff legislation has to include services. Gold and silver fundamentals and technicals are very strong so get ready for a rally. On the other hand we are starting to see some real resistance to American domination of world economic and political issues. It first started in Mexico, Central and South America and has spread from there. Eighty-two percent of foreigners do not agree with US foreign policy, the war in Iraq nor the commercial arrogance displayed in business. George and the neocons were the last straw. There is no question that China and others will do some dollar asset selling. That became apparent two weeks ago when the 10-year Treasury note came out of its 9-month inversion that had been caused by the carry trades purchase of US 10-year notes and other leveraged investments. This is the beginning of the long slide down in the dollar that will send gold much higher. We have serious problems when Saudi Arabia tells our President that we are illegally in Iraq. We also have the Fed with its Treasury tricks doing something. There were $46 billion in Treasuries sold last month. We do not know who bought them, but we suspect it was the Fed and that is monetization and that is immediately inflationary. Commercial paper jumped $58 billion, which has Fed liquidity written all over it. If they keep this up Weimer can't be far away."

http://www.bloomberg.com/apps/news?pid=20601009&sid=a4jLzz.P2XV0&refer=bondFutures to Surpass Bonds as Investor Appetite for Risk Rises
By Elizabeth Stanton
April 2 (Bloomberg) --Excerpts:
"Treasury futures, the most active contracts on the Chicago Board of Trade, may surpass trading in notes and bonds for the first time next year as money managers use more derivatives to boost returns.
A record 60.5 million contracts changed hands in February, the equivalent of $6.62 trillion of Treasuries. Wall Street's biggest firms handled about $9.57 trillion of bonds, according to Federal Reserve data. Futures more than doubled in the past five years and, at the current pace, will overtake trading in the cash securities during 2008.

``Fund sponsors who had in the past not allowed investment managers to use derivatives are more eager to do so,'' said Greg DeForrest, senior vice president at Callan Associates in San Francisco. The second-biggest adviser to U.S. pension funds has about 266 clients with a combined $1 trillion of assets.
Almost all of Mellon Capital Management's customers for global asset-allocation products allow the money manager to use derivatives, up from 64 percent of assets in 2003 and 10 percent in 1999, spokesman Mike Dunn said. The San Francisco-based company is buying futures, providing more cash for investments in stock, bond and currency derivatives."
Mikal-- This info-mmercial for paper markets' products and services sees nothing but blue sky and green pastures for
certain leveraged schemes. There seems to be no moral hazard as long as you're one of the priviliged with guarantees of immunity from prosecution, risk, and loss of any kind.

"Efforts to boost returns ``have really made futures much more valuable than cash bonds,'' said William Hoskins, Mellon's director of fixed-income research. Futures costing $500 to $1,485 allow investors to capture price changes on $100,000 of underlying five- to 30-year Treasuries or $200,000 of two-year notes...

``Fixed-income managers are catching up to what hedge funds have to offer,'' said Hussey. More managers are aiming, with the aid of derivatives, to beat a benchmark by 2 percentage points annually, double the typical objective, he said.
Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in interest rates or the weather.

Lagging Returns

Low bond yields are encouraging pension funds and other investors to take more risks in order to meet their targets for returns, Hussey said...

Anonymity

While futures don't produce income like bonds, they are faster and easier to trade. More than 90 percent of Treasury futures change hands electronically.

``Futures offer a degree of anonymity to customers and allow them to meet their fiduciary obligation to get the best price,'' said Brian Varga, co-head of U.S. Treasury trading at Countrywide Securities Corp. in Calabasas, California...

``Derivatives is the place to be right now,'' said Jim Bianco, president of Bianco Reseach LLC in Chicago. ``It's a booming business, and so is the futures exchange.''"
Mikal-- You can say that again, and again, but I repeat myself. :)

http://www.forbes.com/markets/feeds/afx/2007/04/01/afx3571266.html4:50p ET Sunday, April 1, 2007

Dear Friend of GATA and Gold:

Here are more comments from China suggesting that China's objective should be (or maybe already is) to trade its U.S. government bonds for assets in other countries without actually selling the bonds -- to exchange the bonds for real property and producing assets so that when hyperinflation and debt repudiation explode in the United States, someone else will be holding China's bag.

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

* * *

China's Diversification
Away from Dollar Would Cause
Losses in Reserves: Economist

From AFX News
via Forbes.com
Sunday, April 1, 2007

BEIJING -- China won't be able to follow a growing trend among countries to reduce their dollar exposure because of the threat this would pose to the value of the country's existing large holdings of dollar-denominated assets, a senior government economist said.

Xia Bin, an economist with the Development Research Center and a vocal proponent of more aggressive foreign exchange reserve management, noted the increasing shift out of dollars around the world, particularly by oil exporters.

"Everyone knows that they should try to cut their US dollar assets. But, of course, if China wanted to make such a move, a big cut, our losses would be large as well. That would be very difficult to do," he said.

Some 70 percent of China's more than $1 trillion in foreign exchange reserves is estimated to be held in US dollar-denominated assets and most of that is parked in low-yielding but safe US Treasury or government-sponsored agency paper.

Xia said that the ability of the People's Bank of China, the central bank, to control money supply growth is weak, and that the government should speed up the creation of a new foreign exchange reserve vehicle to ease pressure on the central bank.

"We should speed up the research, preparation, and operation of the new foreign exchange reserve investment company to ease pressure on the central bank's macro-economic controls during this special period," Xia said.

He suggested that bonds be issued to soak up liquidity and purchase foreign exchange reserves from the central bank for overseas investment, arguing that such a transaction wouldn't add to inflationary pressure.

State media reported last week that Xia was one of five government economists called in by the committee tasked with setting up the new foreign exchange reserve vehicle to canvas his opinion.

Xia also said that China should stick to its own pace in opening up its financial markets and "not bow to Paulson's pressure."

US Treasury Secretary Henry Paulson called on China to speed up the liberalization of its financial markets in a speech in Shanghai last month.

http://www.marketwatch.com/news/story/seven-reasons-why-gold-should/story.aspx?guid=%7B5BDBAEE4-C634-444C-92BE-347A372194F5%7DIn reality, there are probably 77 reasons why gold should surge, but here's a start...

:-)

http://www.gulfnews.com/business/Business_Feature/10115250.htmlYesteryear's tailings...today's new mine...

...making money from mullock.

:-)

http://www.canada.com/nationalpost/financialpost/story.html?id=11651f6a-f0ee-4055-a8e4-54192d0b50ae&k=21326Financial Post:
Where do you see gold prices heading?

Former Goldcorp CEO and founder Rob McEwen:
I've been saying for a number of years now I thought it would go through US$850 an ounce before then end of 2008 and I thought it would be significantly higher by the end of 2010, north of US$2000 an ounce.

I see no reason to believe we've altered course. The world is awash with liquidity.

You just look for how many dollars you need today to buy a house, food costs are going up, there's tightening all over the place. The net effect is that the dollar in your wallet buys less today than it did last year and much than ten year ago. Our governments are printing lots of money, they've
encouraged a lot of debt and incurred a lot of debt on their own behalf, flooding the system. But one day, you have to pay it back.

Gold is money[?????] and a lot of people don't really think about it, but it's an asset that can be converted into cash, if you want paper currency, in two days. You can't convert a house into cash in two days, you can't convert some stocks into cash in two days. But gold is accepted around the world and
it has a two day settlement period if you're going through the banks.

If you're doing it on the street, you can probably do it immediately. And that's the one really big thing.

In the 1930s, it was all about liquidity. In the 1970s, when you had inflation, it was all about the purchasing power moving up as inflation eroded the value of our currency. That's what we're going to see again. I just think there is too much money floating around right now that was created by cheap borrowing costs and an appetite for yield.

^___(from url)___^

I'd say he's focusing on the right timeframe for significant development of the goldprice, but anyone's who's made note of my own thoughts on the matter will not be surprised to hear me say that I think McEwen has too conservatively underestimated the figure by at least two-thirds. Assuming certain international evolutions remain generally on track, I deem it likely that the goldmarket in 2010 will come to an "understanding" regarding the propriety of gold firmly above $6000 -- and that's not even accounting for any intervening inflation of the currency unit between now and then.

R.

http://www.abs-cbnnews.com/Storypage.aspx?Storyid=72201Asia's economic sleuths hunt for clues in odd places
Reuters- April 1, 2007 /�abs-cbn.com / Business
Excerpt:
"SINGAPORE�- The truth is out there -- but economists in Asia have to look in some strange places to find it.
Faced with irregular, sometimes dodgy economic data,� analysts turn to cement sales, fast food, newspaper sizes or just about anything that helps them understand the fast-growing and often volatile region.
While those who track economies such as France and Britain receive a regular diet of numbers which officials have gone through with fine-toothed combs, analysts in Asia find statistics are patchy or even open to manipulation.
"No single piece of data tells the whole story," said Rajeev Malik, an economist at J.P. Morgan Chase, who looks at India's gold purchases, air traffic and restaurant queues to get a feel for sentiment in an economy that is surging.
"One has to be a detective and piece things together."
Some unusual numbers reveal trends sooner than official data.
Take, for example, motorbikes in Indonesia. They're a cheap alternative to unreliable public transportation. As such, they serve as a barometer of consumer spending across the sprawling archipelago, as well as a leading indicator for growth.
Last September, economists such as Song Seng Wun noticed a big pick-up in motorcycle sales following months of weak sales because of high fuel costs and interest rates.
The change was an early sign that a central bank move to trim rates was finally affecting consumers. The gains eventually showed up in fourth-quarter gross domestic product, which had its fastest growth rate in two years.
"It's about finding an indicator that captures economic activities at the simplest level," said Song of CIMB-GK Research.
USE YOUR IMAGINATION
Official data may fail to capture some informal activity -- the smuggling of pirated discs, for example -- for countries such as the Philippines, Indonesia and China, Song said.
HSBC Asia-Pacific economist Frederic Neumann, who also watches Indonesian motorcycle sales, said that with so many holes in data across Asia, economists need to be creative.
Neumann designed a "champagne indicator", a gauge based on French champagne exports, which he says foreshadowed Thailand's 1997 currency crisis, the one that started the Asia crisis.
"Champagne consumption tends to peak about two quarters before a crisis hits. People become risk seekers, and they are more likely to make mistakes."
[Mikal - This is having have your champagne bubbles and drinking them too.]
Indeed, he says, champagne consumption soared in Thailand just before the country's collapse.
At the other end of the food and beverage spectrum is the world's most famous odd economic indicator, the Big Mac index. Created by The Economist magazine, it estimates how much currencies are overvalued or undervalued by comparing the price of a McDonalds Big Mac in different countries.
In China, where investment is pouring in, many economists cross-check official data with unofficial figures such as freight volumes or steel prices.
In fact, Beijing recently took back local governments' rights to calculate regional GDP data after many figures were found to be fabricated.
[Mikal- It's about time they did something. Now, about that political prisoner datasheet...]
The need for such cross-checking is not confined to Asia. In the United States, economists joke that the monthly payroll report is more like a monthly raffle because of heavy revisions.
"If you have trouble with the U.S., you can imagine the trouble you have with China," said Jan Lambregts, head of Asia research for Rabobank.
Alan Greenspan, possibly the most celebrated economic analyst in modern times, was an avid crosschecker. The former Federal Reserve chairman was fond of poring over steel scrap prices or supplier delivery times to stress-test his views."

REY GAMBOA/The Philippine Star (4/2/2007 4:17:21 AM)
China, US head for fresh trade row over sanctions
BEIJING (AFP) - China appears headed for a fresh trade spat with the United States, denouncing new US pressure on its trade policies after Washington said it would slap sanctions on imports of Chinese coated paper.

The Philippine Star (4/1/2007 2:17:42 AM)
OFW, hot money inflows fuel surge in liquidity
Domestic liquidity, a broad measure of money supply and deposit levels in banks, continued to surge in February, fueled by the steady inflow of remittances from overseas Filipino workers (OFWs) and foreign portfolio investments.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sGiven the changes in value, it looks like the PPT is at work again today naked short selling bullion. Both the POG & POS are tanking at the same time the dollar index is UP... Looks like "our pals" don't want the dollar index below 83.

***
On a separate note: On Goldseek Radio this weekend, Chris Waltzek & Bob Chapman were talking about a Russian General who wants a meeting at the UN to stop a "scheduled" attack on Iran by the US this coming Friday, 4/6/07. Oh, that attack would be scheduled for "Good Friday". Ironic, no? Has anyone heard about this attack from any other sources?

SF

The dollar index has reversed and who wil want be long the dollar and short gold starting a fresh new month and quarter? Certainly not the cabal? Actually they will cover soon IMO and we will go into the holiday weekend with the $ significantly lower and/or gold significantly higher.
If Jim Sinclair is right, "we have 5000 more chances" to trade this gold bull market before it's finished. Now I'm assuming that's days or even weeks, which is enough
time for most to forget about "revaluation" and a new IMS and even Jim's oft repeated "gold cover certificate" such as he mentioned last week would be needed very soon. Not the first time he's contradited himself, but hey we've seen the awesome fundamentals- now let's look at some math:
Let's assume that Randy's article yesterday where the mining exec calls for $ 850 or thereabouts for next year's thriller is courageous pandering or just ignorance.
The numbers don't lie- if there are 250 open NY Comex trading days per year(50 nonholiday weeks X 5 days/wk), then it seems absurd to assume that gold will rise less than $1 per day for a full year from today doesn't it? That is where we'd be because 250 days X $1 = $250($250 + $660 = $910).
That would put us OVER the projected high for the year and we'd STILL have another 9 MONTHS to go before year end!

The cacophony in the Wall Street aviary is once again reaching fever pitch. Scrambling amongst themselves for position at the feeding trough - see the Cramer plant amongst others - anticipating the next run-up of the gold price. Years ago, just as gold started its resurrection from its Sleeping Beauty sleep, someone with the handle (Bullrider) wrote a delightful essay on a parallel forum. Thought, the Sirs and Ladies might find it equally enlightening once more, as a fitting perspective.
Lebieque

Investing in Gold and Silver: For the Birds? Through a circuitous turn of events, I was asked several weeks ago by some acquaintances of a friend of mine in my city of residence in Texas if I would be willing to come out to New Mexico for a month or so and "housesit" their rock-and-log-cabin home in the mountains just east of Santa Fe. Since I recently left a small business I started some 7 years ago and have not proceeded on to the next "career," -- whatever that turns out to be! -- I agreed to do it.

The cabin, originally built around 1940 as a blacksmith shop, is situated on about 100 acres in the middle of the piney woods which are so common throughout this beautiful region, and one of the pleasures of this little adventure, which began around January 20th, has been to enjoy the non-stop activity of the area's abundant wildlife.

Before the couple left the day I arrived, the woman asked me if I would try to keep their three birdfeeders full of seed, especially since there's still a lot of snow on the ground and it's pretty cold here in the mountains. Though I've never been much of a birdwatcher, the request seemed important to her and I told her I would make the effort to keep the feeders stocked.

Although the three feeders, which hang in the trees only about 20 feet from the cabin's front door, were full the day the couple left, it only took two or three days for the local avian (and squirrel) populations to empty them. I've since filled them several more times, as I've now been here for about three weeks.

Today, however, after filling the emptied feeders once again, I came back inside the cabin, sat on the floor just inside the two French-style doors at the entrance and decided to simply observe. Native peoples have for centuries known that man can learn a great deal by observing the animal kingdom, so I waited to see how long it would take the local bird populace to once again commence flocking around the presently deserted feeder area.

Keep in mind that, for several days now (a span of time which must seem an eternity to a bird!) this particular area -- and I emphasize this point -- has held no value from the birds' perspective, despite the fact it has repeatedly shown itself to be of extremely high value at fairly regular, though not precisely predictable, intervals.

Although several birds were in the vicinity of the feeders after I filled them, none seemed to bother checking it out. Since the feeders had "lost" their value days ago, the birds mistakenly concluded that the situation was static and had nothing further to offer. No doubt they viewed the last filling as an "aberration" never to be repeated.

Again, the feeders had been empty and un-inviting for days -- even a dodo could deduce that they were now a useless relic of the past! "The feeders? Don't be silly! No one who knows anything about profitable food-gathering goes there anymore!"

After a few minutes, I noticed one, lone sparrow make its way to one of the branches protruding about nine or ten inches from the three feeders, all of which were now chock-full of fresh birdseed. I naturally assumed the bird would jump immediately onto one of the vessels like a duck on a June bug (yes, ducks really do jump on June bugs!) but, to my amazement, the sparrow just sat there on the branch, nervously looking around and surveying the situation.

I wondered, as the little sparrow evaluated the feeder status, what might be going through its mind. Normally, when the feeders contain food, the entire area is a cacophony of chirping, fluttering, pecking and squawking as birds of many feathers and sizes jostle and fight for position on the feeders and on the ground below, where lie the spilled riches of the swinging containers' bounty.

It's possible, I guess, that this particular "early bird" was so dumbfounded at having happened upon the mother lode -- without the usual accompanying pandemonium -- that it simply couldn't believe its incredible good fortune. Or perhaps it was looking around guiltily, as a man might do who has just hit upon a treasure box while digging for a buried water main. It's also possible, I suppose, the little fellow was just instinctively obeying the always-obligatory pecking order, which, at this particular auspicious moment, was happily moot.

A more likely explanation, of course, was the simple, requisite checking for predators; after all, one can't be too careful when situated near the lower end of the food chain, a fact sadly reconfirmed recently by non-management Enron employees.

Now into the fifth paragraph of this cyber version of Animal Planet, the reader is no doubt mentally exclaiming (and rightfully so), "OK, Dr. Doolittle: what does all this have to do with the gold and silver situation!?" To which I would courteously reply, "Plenty." Please bear with me, then, while I continue my story.

After a minute of so of pondering, the solitary sparrow apparently decided that, merely because no other birds were currently appreciating the value of the feeding area was not a good reason to pass up the opportunity to do so himself. In other words, the sparrow could readily grasp that the number of creatures presently seizing the opportunity was no reflection of its actual value. Thus did that first sparrow bravely prove himself (or herself -- hey, Marlin Perkins I ain't!) to be a true natural contrarian, not waiting for the crowd to confirm the choice before deciding to act. To continue this riveting account of nature's own economy lesson, our fine, feathered friend quickly began making his instinctive noises and gestures indicating to his comrades that substantial food had been located.

It wasn't long before a few more sparrows came fluttering in to check out the situation for themselves. Again, most of the newcomers were cautious about their initial approach, but the great majority of them decided the opportunity was too good to pass by and they, too, began descending on the new-found bonanza. The sparrows moved quickly and nervously, devouring as much seed as possible in as little time as possible, for they seemed to understand clearly what would happen next.

In a very short time, realizing the newly established trend, the "big boys" would be arriving. And, sure enough, minutes after hearing of the feeding area's renewed "value," the much larger and more powerful blue jays arrived. Soon after, the still-larger and equally aggressive black birds entered the market, along with a couple of gray squirrels, now busily packing away the easiest of the pickings: the interspersed sunflower seeds. By now the sparrows, far more nimble but much smaller and less powerful than the other players, were being harassed and muscled out of the scene by the larger animals, who are far better equipped to compete at the food-gathering game.

The sparrows who arrived earliest to the party were, of course, the ones who "profited" most, for they could never be denied that which they managed to acquire before the bullies arrived. Were the smaller animals provided by nature with some means of storing their initial acquisitions, they would no doubt have been able to command an extremely high premium for their holdings at some future point -- especially if the ensuing winter proved unusually harsh.

For a while, the cackling commotion was a textbook lesson in gluttonous greed, with each participating member of the animal "community" mindlessly consuming as much of the available, but limited, commodity as possible. As far as I could ascertain, with my limited knowledge of "animal-speak," at no time during the hoarding frenzy did any of the creatures feel that the now-universally-coveted feed lacked "inherent value" or stood as a mere "barbarous relic." On the contrary: the worth of the precious commodity, along with the participants' behavior, seemed to speak for itself.

At this point, I hope it is safe to assume the astute reader has seen through this thinly veiled analogy of our animal brothers' wilderness activities and connected it with the present-day circumstances of the world's fiat-money-based financial system and the opportunity that lies begging to be seized in the precious metals markets. The opportunity itself seems obvious. But homo sapiens is a strange bird, indeed, and many, it seems, would prefer to scavenge with the vultures, hunting for near-lifeless NASDAQ corpses or paralyzed, earnings-depleted DOW dogs than to soar in the flight to safety with the gold and silver eagles of the coming precious metals migration northward.

When capital takes flight, it usually does so in large flocks, and the last ones to the watering hole will either pay a dear price for a drink or find the reservoir is dry once they arrive. Following the pecking order and waiting to see what the "commercials" do can be instructive at times, but the strategy is almost always an expensive one. In the wild kingdom of financial markets, by the time a trend is so obvious that even a blind bat can spot it, it's probably too late to jump in. At any rate, it will be far more expensive than it would have been before the notion became popular.

The early bird catches the trend, and, when investing, it is far better to be a year early than a month late! We find ourselves at a crossroads of financial history. Companies previously envied by the corporate world are now extinct or, at best, on the endangered species list. Trillions of investor dollars have been wiped out. As evidenced by fiat-finance geniuses who run Argentina, we now know it is possible for entire countries to go bankrupt, almost without warning. Nearly every currency on the planet struggles to find shelter in the storm, and nearly every major world economy is engulfed in "recession."

The smart birds will quickly feather their nests with gold and silver equities of unhedged producers. This requires owl-like wisdom, since the Wall Street clucks are still squawking about their once-stellar tech picks or their stodgy, old fallbacks of yesteryear. But soon, the "pros," many of whom evidently cannot see the forest for the trees, may be caught napping as the stock prices of a select group of precious metals mining companies will begin rising above the clouds, whose gold and silver linings will then be so obvious that even an Andersen auditor could not overlook them.

And the "wise," old birds on Wall Street, along with millions of previously sleeping-hen investors around the world, will suddenly be asking, "What's all the flap about!!??" By then, of course, those of us "sparrows" who arrived early at the "feeder" will be perched high above the ensuing investor cockfight, crowing about our previously acquired resource stock holdings, for which we paid mere bird feed in the months and years prior to the Great Migration. So take courage and beat the flocks to the feeder, and don't make the mistake of assuming that because you don't find it crowded when you arrive that you must be in the wrong place.

Remember, no one wanted oil a few years ago at $10 per barrel. "It's worth less than bottled water!" they exclaimed. Little did most investors suspect that fewer than 24 months later, the price of crude would triple. Today we find gold and silver occupying that same lowly assessment among most investors. "Metals pay no dividends!" they shout. But were gold to perform similarly to oil, the price would soar to more than $750 per ounce -- or nearly as much as bottled water.

Even long-suffering silver, "the poor man's gold", would be selling for at least $12 to $15 per ounce, and possibly much, much more. We can only imagine where such explosive price movements of the metals themselves would send the stock prices of the unhedged companies which produce them. Naturally, no one can say for sure exactly when this historic shift in sentiment will occur, but it sure feels like it will be sooner rather than later. One thing is certain: it will happen.

http://www.jsmineset.com/The most understated in terms of impact on the economy is the sub prime mortgage collapse. The ramifications thrust the Formula forward.

New Century Files for Bankruptcy Following Subprime Defaults
By Christopher Scinta and Bradley Keoun

April 2 (Bloomberg) -- New Century Financial Corp. filed for bankruptcy in Delaware today, becoming the biggest mortgage lender for people with bad credit to seek court protection over the past year after delinquencies hit a four-year high.

New Century, based in Irvine, California, was the biggest independent U.S. provider of mortgages to borrowers with low credit ratings in 2006, second only to London-based HSBC Holdings Plc in total U.S. ``subprime'' loans granted. The company employed about 7,200 people at the end of 2005.

Late payments on subprime mortgages reached a four-year high in the fourth quarter, the Mortgage Bankers Association reported. At least 30 home lenders have halted operations or sought buyers in the past 12 months, including four that have gone bankrupt since last November, according to data compiled by Bloomberg.

Ownit Mortgage Solutions Inc. of Agoura Hills, California; Mortgage Lenders Network USA Inc. of Middletown, Connecticut; ResMae Mortgage Corp. of Brea, California; and People's Choice Financial Corp. of Irvine are among companies that have filed for Chapter 11 protection.

-Goldilox

Dem bones, dem bones . . .

http://www.usagold.com/amk/newsgroup-form.html The latest issue of the USAGOLD MarketUpdate is newly published and on its way to your e-mail box.

If you aren't a member of our NewsGroup (to which our MarketUpdate is an occasional inclusion), here's what you're missing:

Snip: "We put the Strauss and Howe quote in the masthead this week because so many have expressed to us their concern about the sheer volume of bad news of late -- on the economy, the domestic political scene, the financial markets, international affairs, and so on. Perhaps it's just our perception that there's more than the average amount of negativity floating about. Then again, maybe we are in the "unraveling" period -- "America's winter" as described by Strauss and Howe, and these are the bumps and bruises that go along with it. If we are in the unravelling, you can take comfort that you are a gold owner. . . ."

Also: What happens when the U.S. government loses over one-half what's needed to pay its bills annually??

And: How do China, Venezuela and the Panama Canal tie together and what does it mean for U.S. energy security?

See: A great Ed Stein cartoon. . . .Bulls, bears and dragons......

Consider: Merrill Lynch economist says gold going to $1500 in stagflationary environment. . . . .


And more. . . .

Join our NewsGroup. It's free and you get one of the better newsletters on gold along with it.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteLooks like the COMIX is giving back this morning's losses as we approach the pit close.

Agree with the "long term" fundamentals of Gold. Especially with too many "current events" that can drive the POG up. These include the anticipated war with Iran, sub-prime spilling over into Alt A loans, home builder's increasing losses, Naked Short Selling fiasco in the stock market becoming "public knowledge", the US threatening China with tariffs (all the while we borrow piles of cash from China every day), CB's around the world reducing their US dollar reserves, more and more oil being sold in Euros, peak oil issues, global warming increasing the ferocity of hurricanes and typhoons. There seems to be some new bad news thing every day.

Probably one of the scariest things is that throughout history, fiat currencies were only used in one country at a time, resulting in a hyper-inflationary collapse being limited to in the one country. Today, the ENTIRE WORLD is printing fiat currency. The M3 numbers from the various counties indicate that the CD's printing presses are increasing the amount of "funny money".

There is one thing to be thankful. The coordinated effort of the world's CBs to keep the down precious metal costs have been successful. Although the prices have increased, when the "fiat dam" finally breaks, it will result in a huge increase in POG & POS. The Mogambo Guru expects this burst in pricing to be completed in one month. If you aren't holding physical gold & silver when it hits, you will miss this once in a life time opportunity.

SF

http://abcnews.go.com/Business/story?id=3001180&page=1Metals and Petroleum got a nice bound when the news hit the wires. Geopolitics plays more of a role today as markets are already on edge with 15 Brit marines held hostage in Iran. Memories of 1979-1980 are obviously bringing Gold and Oil back into focus.

http://earthquake.usgs.gov/eqcenter/recenteqsww/Maps/10/155_-10.phpI'm not one given to continually blaming manip for market moves (or lack thereof) that defy logic however these last two days (in)-action simply defy belief ...;-(
Linked is the recent seismic activity in the Sth Pacific, the initiator of a Tsunami alert in the region.
Curious in that the initial Mag8 shock spawned "aftershocks" for the next 12 hrs up the road apiece (like 150km away) ...before re-establishing "locally"

We can but watch!

Re: Good points. "The Mogambo Guru expects this burst in pricing to be completed in one month." I assume he means one month from commencement of extraordinary upside volatility until completion, and NOT "to be completed in one month" from TODAY? Thanks.
Re: Mucho newses. The media tends to be tightlipped, but today I concur, when it rains it pours- here is a sample of some news AND opinions in headlines:
Stocks Mixed on Weak Manufacturing Data - AP (04/02/2007 11:41 AM)
Crops -- and our wallets - may get stung by bee problems - CBS Marketwatch (04/01/2007 5:39 AM)
Oil Rises Above $66 as Iran-U.K. Dispute Boosts Supply Concern - Bloomberg (04/02/2007 12:55 PM)
Americans don't believe in rainy days - Arizona Republic (04/02/2007 8:36 AM)
Commodities Trounce Stocks, Bonds on Oil, Copper, Soy Revival - Bloomberg (04/01/2007 7:21 PM)
The Ghost of Reed Smoot - Morgan Stanley (04/02/2007 4:41 AM)
Manufacturing Growth Slackens, Costs Increase - Bloomberg (04/02/2007 11:44 AM)
Pruductivity lull might signal growth is easing - WSJ ($) (04/01/2007 9:45 PM)

Subprime woes to drag '07 market - Houston Chronicle (04/02/2007 8:29 AM)
Mortgage woes seen holding US growth "below trend" - Reuters (04/02/2007 4:49 AM)
Housing Crisis Knocks Loudly in Michigan - Wash. Post (04/01/2007 5:18 AM)
Subprime Mortgage Bond Sales Plunge as Loan Delinquencies Soar - Bloomberg (04/02/2007 6:47 AM)
Seven reasons why gold should surge - CBS Marketwatch (04/01/2007 7:20 PM)
Hedge funds lead US junk sector lending - FT ($) (04/01/2007 9:03 PM)
Pushing loans and fees - NY Times (04/02/2007 10:58 AM)
Bank of America Warns of New `Correlation Crisis' - Bloomberg (04/02/2007 11:13 AM)
Finding protection in hedge fund investments - FT ($) (04/01/2007 9:09 PM)
Sour aftertaste of subprime exuberance - FT ($) (04/01/2007 9:12 PM)

Industry tightens standards on 'no proof' loans - San Diego UT (04/01/2007 9:14 PM)
US workers saddled by houses that won't sell - CSM (04/02/2007 4:58 AM)
Home builders' loans feel heat - USAToday (04/02/2007 4:57 AM)

China demands US rethink on duties - FT (04/01/2007 5:00 AM)
China Recycles Its Trade Dollars - Forbes (04/02/2007 5:04 AM)
China Has $1 Trillion to Fight a U.S. Trade War - Bloomberg (04/02/2007 6:58 AM)

Well said. I think gold has been taken prisoner and the jailer has lustful designs upon it.
The world must be accusing the less than saintly "empire" of taking it hostage, ostensibly for trespassing on it's sovereign reserve dominion and rights of first tribute.
But they're not going to buy that line and will take shelter under a golden umbrella.

Also the more unnaturally POG acts- it's now behaving like it's sedated or hogtied- the more suspicion and interest it attracts.
Can the gold short cabal afford to be so bold or is there no other choice LOL?

snip:

Sources tell ABC News that the missing American was a former FBI agent, although they stressed that he was now a private citizen and that his trip to Iran was on "private business" and not associated with official U.S. matters.

-Goldilox

I doubt he was "vacationing" in a country we're sanctioning and preparing to level with nuclear weapons, so it's kinda silly to "stress" that he was there on "private business". The failure of private business "contractors" to maintain security is what sent the armed forces to Iraq in the first place.

The stupified media is still trying to convince us that "spies" and "mercenaries" are but simple "businessmen", so we're whooped into war fever when they are caught across enemy lines.

http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html
You were right. Mogambo one month period is when the collapse of the dollar moves to high speed, the bottom will be hit in "one month". Your list of depressing news is larger than mine�

I really don't pay too much attention to the short term movement of the POG & POS. Because of manipulation by insiders, CBs, naked short selling, the price remains volatile. However, given the up swing in prices since 2000, those few people with the "long view" are positioning themselves for the big price spike. The increase in the POG is inversely proportional to the drop in the value of the dollar. If the dollar drops to an index value of 50, I would imagine the POG at $1,000 to $1,200. But if the dollar becomes worthless, (as Mogambo anticipates), then using the recent history of the Weimar Mark in a PBS article:

snip:

"In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar"

As a consequence, it is not unreasonable to foresee a string of terrible events that lead to a conservative POG at $1,000,000,000 per ounce and POS at $62,500,000 per ounce.

Ridiculous? I don't think so. Given that the entire world is now using fiat money and the strategic stock piles of gold and silver have been depressed by the long-term (30+ years) steady campaign by governments and businesses to keep the POG and POS low, reducing mining efforts, the precious metal inventories are low, creating the smallest precious metals to world population ratio in history.

So, who knows how high, high is?

As such, I believe we are on the edge of a once in a life time opportunity with gold and silver. But besides investing in in these metals, you better have some guns, food stores and other misc. survival gear, as we will probably be in for a bad year or decade.

SF

"Worth". It's NOT what gold is, but what the dollar ain't.

8^)

Kilo

Drumming up the gold component of the Eurosystem's international reserves is MUCH easier than getting a bead on the foreign currency component. Let's just wait until Wednesday, OK? They'll do the hard part for us -- I promise. Thanks for your continuing interest in this evolution.

R.

http://seattletimes.nwsource.com/html/businesstechnology/2003647534_webkoreatrade02.html?syndication=rssU.S., S. Korea OK biggest free-trade deal since NAFTA
By KELLY OLSEN - Apr 2, 07 - The Associated Press
Snippits: "SEOUL, South Korea � The United States and South Korea concluded a landmark free trade agreement today, officials said, culminating 10 months of negotiations in a final week of intense haggling that just beat a key U.S. legislative deadline.
The deal, which requires approval by lawmakers in both countries, is the biggest for the United States since the North American Free Trade Agreement, which took effect in 1994. It is the largest ever for South Korea.
South Korea and the U.S. agreed to lower trade barriers in a wide range of industrial goods and services, including financial services. The agreement also covered sectors such as e-commerce...

"The agreement will also further enhance the strong United States-Korea partnership, which has served as a force for stability and prosperity in Asia," Bush said.

But South Korean labor and farm groups have denounced the deal, demonstrating on the streets of the country, especially the capital Seoul, saying an influx of U.S. imports will cost jobs and harm livelihoods.
A protester set himself on fire Sunday shouting "Stop the Korea-U.S. FTA" outside the hotel where negotiators were meeting. He was being treated for third-degree burns, police said.
U.S. businesses welcomed the agreement.
"For (South) Korea, this FTA is not only the largest deal ever completed, but it also ensures Korean products will have preferential access in the U.S. market, the largest in the world, ahead of its competitors, most notably Japan and China," the American Chamber of Commerce in Korea said in a statement."
Mikal-- Though we may have "China marts", perhaps we should have more US marts and every country produce locally and consume locally to minimize waste and transport costs, before S. Korea gets a bad rep. Electronics production is often outsourced from Japan to China or Singapore for example, and the same with clothing and cars financed anonymously, everywhere ubiquitous.
But the most distinct and effective languages and cultures
may be the only ones to remain relevant as social tools for the survival of the globe's fittest.

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

April 2 (DowJones) -- Gold futures bounced from liquidation pressure late Monday to post a gain, with traders citing comments from the Bush administration that it was looking into reports of an American said to be missing in Iran.

June gold rose $2.50 to $671.50 on the Comex division of the New York Mercantile Exchange.

The metals were softer much of the day.

Generally, analysts blamed this on liquidation of long positions that had been built up ahead of the weekend in case the U.K.-Iran situation had deteriorated. Instead, there was a perception of improvement in the situation when Iran radio indicated the country would stop airing alleged confessions of U.K. sailors due to "positive change" in the U.K. negotiating stance.

However, gold bounced into the close.

A daily research note from MKS Finance said initially softer prices were having difficulty recovering, until news of U.S. officials stating that they are seeking information about a missing American in Iran. "The news pushed the yellow metal to slightly extend top side of the intraday range and closed there," said MKS.

"We are moving to a traditionally strong period of physical demand and we believe that that, along with the firm oil prices and geopolitical tensions, will continue to provide a support."

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

test

test

New Century, Biggest Subprime Casualty, Goes Bankrupt (Update4)

By Bradley Keoun and Steven Church

April 2 (Bloomberg) -- New Century Financial Corp., overwhelmed by rising defaults from borrowers with poor credit records, became the largest subprime mortgage lender ever to fail as it filed for bankruptcy today.

**********************************************************
Rest of article at Bloomberg site.
Slingshot----------<>

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

Smoke & Mirrors Won't Pay Your Bills
BY TONY ALLISON

Inflation is one of those issues that concerns people, but the normal reaction is a shrug of the shoulders, and shake of the head. It's a problem that affects lives and futures, but most see it as a murky, complex subject beyond their control. And the media seems to think it's "well under control," even if our wallets argue otherwise.

For those who grew up in the 1950's and 1960's, the world was a different place. An average guy with a high school education could support a large family. His wife didn't have to work. He could save for retirement. He could pay down, or even pay off his mortgage by retirement. According to the US Census Bureau, Department of Commerce, the average family income in 1950 was $3,300. But then the average cost of a loaf of bread was 14 cents. That wouldn't pay the sales tax on a loaf of bread today.

These days you need two paychecks to support a family, usually with no more than one or two kids. Both parents need college degrees to get good jobs. They have little or no savings and their kids will be saddled with student debt if they go college. How can a middle class family be worse off today than 50 years ago with a booming economy, low interest rates and "minimal" inflation?

These are complex issues, and globalization and the exporting of a large portion of our manufacturing base play a role. But inflation has not gone away, and is not as "quiescent" as the Fed would like us to believe. In the early 1990's, the government was watching inflation rise and adversely affect federal deficits and what it paid out in entitlements. To bring down the cost of entitlements, the inflation rate was adjusted lower, but not by cutting government spending, or raising interest rates. No, inflation was lowered simply by changing the way in which it is measured. . .

"As long ago as the Kennedy Administration," noted Williams, "the government believed people would rather hear good news, even if it's false. Unemployment statistics were easy. First they created the �discouraged worker� category and counted them separately. Then under Clinton, they quit counting them at all. Upwards of 5 million people were no longer unemployed. Both the Clinton and Bush Administrations have continued to tinker with �hedonic adjustments� and other dubious offsets in the CPI to mask the real rate of inflation."

Based on today's numbers, Williams believes that the current inflation rate is approximately 10%, given the way inflation was measured prior to the 1990's. Williams also reconstitutes M3 (the money supply), which the government no longer reports. "It's growing 11% on a year over year basis." Williams notes with dismay that Fed Chairman Bernanke is already planning to change the current CPI index to even more of a substitution basis, instead of a fixed-weight basis.

"The original intent of the CPI was to measure a constant standard of living," said Williams. "They are moving toward a declining standard of living, where you substitute hamburger for steak in the CPI because steak is getting too expensive. The next (comparison) may go to dog food."

Most regular readers of Financialsense.com are not surprised that inflation may be much greater than is reported. Unfortunately, many, many others are unaware of the pervasive nature of inflation and how this "invisible tax" is wreaking havoc with our economy, our retirements, and potentially our societal fabric.

You can't get rid of inflation by changing how it's calculated. And no nation in recorded history has ever been able to create prosperity by printing increasing amounts of its currency. Smoke and mirrors only buys time for elected officials to gain reelection and sweep the problem temporarily under the rug. However, more Americans are discovering their quality of life is in retreat. If the CPI is really 10% as John Williams believes, then those 4.5% Treasury Bond yields don't look so good on a real return basis.

While the cost of many consumer goods has fallen over the last few decades, especially electronics, the cost of living has risen relentlessly. The easier availability of credit has helped many to survive, but ultimately the debt load becomes a burden that cannot continue.

-Goldilox

It'so much easier to change the rules than change the circumstances.

http://www.globalresearch.ca/index.php?context=viewArticle&code=HAL20070220&articleId=4869I dont think china is looking to upend thier best customer, and I think, in reality, thier banker, at this time. However they view the israel/american globalists, china is in no position to fight.
I think I have to look at the economic political situation from the angle of haves, and have nots.
The rich and the poor in each country. The rich will bond with the rich in other countries despite what happens to the serfs in thier midst. If the rich in some countries will not lord it over the poor in thier midst, then I belive the globalists will use the old british technique of division and forment trouble in those countries to keep those countries in turmoil in thier own borders so that they do not grow strong. The model is the british method used in Ireland for hundreds of years. See link for that approach.
If a country will obey the globalists, and the elite in that country will control thier poor, the globalists will leave them alone. As long as they dont get any big ideas.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aDwMjnauuvFgBy Matthew Walter and Theresa Bradley
Bloomberg News Service
Monday, April 2, 2007

GUAYAQUIL, Ecuador -- Ecuador's decision to adopt the U.S. dollar has been "a complete failure," benefiting the wealthy while creating too few jobs, President Rafael Correa said.

"We've stabilized at price levels that are far too high," Correa said in Guayaquil, where he is providing details about his economic plan. "The dollar has been a complete failure."

Ecuador adopted the U.S. dollar as its official currency in 2000, a year after defaulting on $6.5 billion in debt. The U.S. currency offered a stability that attracted investors, revived the banking system, and helped slash inflation to 2.9 percent last year from 108 percent in 2000.

Hey man, no problem. I will look forward to seeing the numbers come Wednesday.

Thanks for your diligent reporting of this data. I believe that we may see the ECB's gold component go from 54% to 55% to 59% to 65% to eventually representing 90%+ of official reserves upon the big fiat "burn off" to take place in the not too distant future.

PA

@ Rook,

I think you may have that bass-ackwards. China is the US' banker at this point.

Something I tried to post earlier unsuccessfully, is that the current ROW in the ME is about reducing (or maintaining from the US stance) Anglo-American hegemony in the resource sector, an idea which is collecting proponents world-wide. While other nations might not jump in front of a US invasion of Iran, many of them will be quite happy to watch the powerful war machine continue to be whittled down by constant engagement and declining logistical support.

It's true that the US is China's "best customer", but at less than 20% of their output, hardly their ONLY customer. A 50% drop in Chinese output to the US amounts to only a 10% drop in total market to the Chinese. Who do you think bears the brunt of that scenario?

On top of which, energy costs are one of China's greatest impediments. A bankrupt USA cuts world energy usage and prices drastically.

There is a lot more parallelism between the Weimar and the US than most people yet recognize.

http://www.ft.com/cms/s/bf6a00e4-e14b-11db-bd73-000b5df10621,_i_rssPage=6700d4e4-6714-11da-a650-0000779e2340.html Europe Tops US in Stock Market Value
Financial Times | Markets | UK - 4/03/07

Given the investments the bankers and the military/security/industrial complex has in NATO, Anglo, Zionist and UN forces including bases, equipment, NASA, research and development, intelligence and logistics support, do you think it will pay them to maintain their investment using whatever force is needed?
There is credible intelligence from military analysts that the Israeli/Lebanon war could reignite.
More importantly, the US could unilaterally or with support from the UK, Australia, Israel or others invade Syria and/or Saudi Arabia.
Both of these states are currenty undergoing internal political turmoil that is barely being contained while it is know that after Iraq and Afghanistan, these two states are the CFR's next targets for invasion, followed by Sudan, Libya, Iran and two others. I do not doubt this, or the clout bankers' wield through international financial resources that, for example, cause nearly 65% of China's (unfairly subsidized and envirionmentally ruinous) exports to be from foreign-owned business and pimp the politicians, economists and central bankers from most countries who pay lip service to reform while talking from both sides of their mouths.

Greetings Sir Golilox, is the china trade out...the exports, does that mostly go to japan, us, euro?
Cant japan buy 1 trillion of dollars, just because?
And cant the EU take extra euros and buy dollars because they dont want the euro too high, whatever Too High is...
And cant the us just have mystery offshore buyers fill in the buying as needed? By any of this, I dont mean I find fault with your Wiermer comments, but doesnt China have little to gain and everything to lose by trying to buck the wall street/fed masters? Perhaps the new world order boys will refuse to lose. Come what may.
http://www.vialls.com/subliminalsuggestion/tsunami2.html
http://www.vialls.com/

@ Rook,

"but doesn't China have little to gain and everything to lose by trying to buck the wall street/FED masters?"

I don't pretend to know the answer to this, but at a time when many seem to be "bucking the Wall St masters", China will certainly have contingency plans in place for a number of scenarios.

A power play to "capture everything" is probably not in their best interest, but neither would standing down and assenting to the West's dismantling of the resource rich nations one regime at a time.

Somewhere in the middle lies a more likely answer, and they are certainly opportunistic enough to have their reactions planned.

http://www.freemarketnews.com/WorldNews.asp?nid=37665 Gold Prices Entering a "Sweet Spot"? | FreeMarketNews.com
Staff selections - April 2, 2007
Mentions GATA, Neil Ryan and Aubie Baltin

http://www.galmarley.com/Chart_pages/currency_charts.htmWe seem poised @ 3am ish for another dump 'n pump day to let a bit of metal loose for the Comex shorts, so it might pay to reflect on the March that really wasn't one ...more of a mark time really!
The Testosterone Yen displayed earlier seems to have all but subsided and we're again poised to enter uncharted YenPoG waters ...this time I'll shut up and see what treanspires.
The REAL PoG story is that it appears to be entirely a Dollar/Bond v Gold thing now as the others (Currencies) seem to be all over the shop. Buck and Bond though, dependent completely on the Del'y or non-Del'y timetable, are each taking it in turns to contra Gold.
What should've been a SM down, Buck down Bond (yield) down, PoG UP start to the week has provided the opposite :-( ...
,,,it is only Tuesday though!

http://www.newswithviews.com/Devvy/kidd260.htmsnip:

"You know, if you let me write $200 billion worth of hot checks every year, I could give you an illusion of prosperity, too." Senator Lloyd Bensten, presidential debates 1988

The audience laughed and thought Bensten's statement was funny. There's nothing funny about what Bensten said. Fast forward nineteen years and now Congress wants to write $2 TRILLION "dollars" in hot checks. There's no money in the treasury. As I write this column, the people's purse is $8,842,131,926,483.53 in the hole. That's close to nine TRILLION "dollars." Two days ago it was $8,836,852,277,711.67 - a 48-hour increase of over $5 BILLION dollars that doesn't even exist! Those who rely on the nightly "news" ("mainstream and cable) don't have a clue about what's coming and the inescapable fact that all the components are now firmly in place for a complete and total systemic financial breakdown. The financial policies coming out of Washington, DC since LBJ have not only been reckless, unless Americans begin immediately to protect what they have left, the middle class will retire in poverty while trying to keep their heads above bankruptcy along the way.

Michael Panzner is author of a book titled Financial Armageddon, which has a clear message no one wants to hear: "Unable to cope with the harsh new economic environment, growing numbers of Americans will end up on the streets - confused, homeless and hungry. With that, begging will increase to previously unseen levels. So too will a range of other social ills, especially when those who have lost hope seek solace in drugs or alcohol�Even once-model citizens will have little choice but to break the law to take care of themselves and their families." Panzner isn't blowing smoke, he's trying to warn unsuspecting Americans poised to lose everything. While Mr. Bush and his underlings attempt to sell you a bill of goods about how our economy is strong and growing, the reality is a far cry from such lies:

Appears that $665 will be defended at all costs. It has been a while since we've seen this much resistence (and gold trading in such a tight range).

PA

http://www.house.gov/paul/tst/tst2007/tst040207.htmsnip:

The fiscal year 2008 budget, passed in the House of Representative last week, is a monument to irresponsibility and profligacy. It shows that Congress remains oblivious to the economic troubles facing the nation, and that political expediency trumps all common sense in Washington. To the extent that proponents and supporters of these unsustainable budget increases continue to win reelection, it also shows that many Americans unfortunately continue to believe government can provide them with a free lunch.

To summarize, Congress proposes spending roughly $3 trillion in 2008. When I first came to Congress in 1976, the federal government spent only about $300 billion. So spending has increased tenfold in thirty years, and tripled just since 1990.

About one-third of this $3 trillion is so-called discretionary spending; the remaining two-thirds is deemed "mandatory" entitlement spending, which means mostly Social Security and Medicare. I'm sure many American voters would be shocked to know their elected representatives essentially have no say over two-thirds of the federal budget, but that is indeed the case. In fact the most disturbing problem with the budget is the utter lack of concern for the coming entitlement meltdown.

For those who thought a Democratic congress would end the war in Iraq, think again: their new budget proposes supplemental funds totaling about $150 billion in 2008 and $50 billion in 2009 for Iraq. This is in addition to the ordinary Department of Defense budget of more than $500 billion, which the Democrats propose increasing each year just like the Republicans.

The substitute Republican budget is not much better: while it does call for freezing some discretionary spending next year, it increases military spending to make up the difference. The bottom line is that both the Democratic and Republican budget proposals call for more total spending in 2008 than 2007.

My message to my colleagues is simple: If you claim to support smaller government, don't introduce budgets that increase spending over the previous year. Can any fiscal conservative in Congress honestly believe that overall federal spending cannot be cut 25%? We could cut spending by two-thirds and still have a federal government as large as it was in 1990.

Congressional budgets essentially are meaningless documents, with no force of law beyond the coming fiscal year. Thus budget projections are nothing more than political posturing, designed to justify deficit spending in the near term by promising fiscal restraint in the future. But the time for thrift never seems to arrive: there is always some new domestic or foreign emergency that requires more spending than projected.

The only certainty when it comes to federal budgets is that Congress will spend every penny budgeted and more during the fiscal year in question. All projections about revenues, tax rates, and spending in the future are nothing more than empty promises. Congress will pay no attention whatsoever to the 2008 budget in coming years.

-Goldilox

"A voice, crying in the wilderness . . ."

@ PA,

No previous POG "line in the sand" has been defended even remotely so vigorously, ever since the reversal at $250. I wonder what makes this one so much more vitally important? Might it be timing?

After weeks of "war build-up", the news from the ME is eerily quiet - like the calm before the storm. Beyond the daily body counts from suicide bombers, the escalated "fronts" of Western navies and Iranian "war games" have all but disappeared from the headlines. Perhaps not a good sign, as no one has suggested that either has actually "stood down".

With Condi and Dick on whirlwind tours to establish "staging bases" only last week, how does all related news just "go away", unless perhaps, by unspoken official decree?

From an economic standpoint, only interest is "untouchable".

http://www.nypost.com/seven/04032007/business/hank__why_are_you_ignoring_my_foia_requests__business_john_crudele.htmHank, Why Are You
Ignoring My FOI Requests?

By John Crudele
New York Post
Tuesday, April 3, 2007

I've decided to send a very public letter to Treasury Secretary Hank Paulson.

Dear Mr. Paulson:

How ya doing?

I think you're doing a wonderful job as Treasury secretary. And don't think I'm saying that just because I'm looking for a favor.

You have been pretty invisible compared with others in that job and, frankly, that worries me a little. It also gets me to the point of this letter.

Hank, I don't trust you. There are just too many ways for you and your former Wall Street firm, Goldman Sachs, to cheat the financial markets.

But don't think I'm picking on just Goldman -- I'm a little suspicious of any firm that can make billions on a single trade with the right connections.

So on July 25, 2006, my lawyer drafted a request under Section 552 of the Federal Code called the Freedom of Information Act asking for documents generated by the President's Working Group on Financial Markets.

Around here we call it the Plunge Protection Team.

That request was ignored, although we did get a phone call from someone many months back saying they were working on it.

So on Feb. 28 I had my lawyer file another request. This time we asked for minutes of meetings that might have taken place that day and the day before.

My poor lawyer is getting a little frustrated, but I told him maybe the requests got lost in the mail. That's why I'm sending this parcel-Post -- pardon the pun.

It's only April, but I get the feeling that you're going to ignore me again.

Perhaps you missed it, but around the time of the first FOIA request, I documented what I believed the Plunge Protection Team was up to.

I believe that this group you head, and which includes regulators, brokerage firm chiefs as well as major market players, tries to protect the stock market.

George Stephanopoulos explained it -- although not very eloquently -- when he was a guest on "Good Morning America" on Sept. 17, 2001.

"And perhaps the most important, there's been -- the Fed in 1989 created what is called the Plunge Protection Team ..." and they "have plans in place to consider if the stock market starts to fall."

Poor George was a little discombobulated. It was right after the 9/11 terrorist attacks. But since he was a very close adviser to President Clinton, Stephanopoulos would have known if something as important as this was happening.

Don't get me wrong. I think rigging the financial markets is a good thing when the nation's security is at risk.

I'm a little leery of putting the likes of hedge funds, Wall Street firms, and others with very vested interests in charge of this effort -- how could that possibly go wrong?

If you want everyone to be aware that Treasury is on the ball and ready to come to Wall Street's rescue, why not turn over the documents I've requested?

Could it be because you don't want us to know about some very odd trading patterns on Feb. 27 and 28 this year that saved the stock market from having a truly ugly day?

Maybe you'd prefer not to explain why traders such as Paul Tudor Jones are reportedly being consulted by the Plunge Protection Team.

Anyway, I hope you can get that stuff to me pronto. At the very least, please have your lawyers call my lawyer and give him the usual runaround.

Have a nice day printing money.

Sincerely,

John Crudele

http://news.bbc.co.uk/2/hi/middle_east/6514897.stmsnip:

Iraqi Justice Minister Hashem al-Shibli has resigned, the first cabinet member to do so since the current government took office nearly a year ago. . .

Political sources suggested that one of his issues with the government had been over the manner in which Saddam Hussein was hanged at the end of December.

As justice minister, Mr Shibli, who is a Sunni Arab, believed the death sentence should have gone to the Iraqi presidency for approval, a step which was skipped.

As for his differences with the Iraqi List, they seem to have been over the issue of Kirkuk, the oil-rich province which the Kurds would like to see join the three others currently making up Iraqi Kurdistan, an autonomous federal region.

Arrangements for determining Kirkuk's future are contained in Article 140 of the new Iraqi constitution.

Mr Shibli was head of the commission in charge of implementing that article.

It made recommendations for proceeding which were endorsed by the cabinet on Thursday.

But the Iraqi List is against the Kirkuk process, putting Mr Shibli in a contradictory position.

-Goldilox

It seems, in the new "democratic" Iraq, that the politically correct thing to do if you differ with the mob mentality, is just resign before the truck bombers visit your neighborhood.

http://stockcharts.com/h-sc/ui?s=$HUI&p=W&b=5&g=0&id=p37762157077&a=101090133worth keeping in mimd

http://news.yahoo.com/s/ft/20070402/bs_ft/fto040220071740210792;_ylt=AuODz_Am2n0tZfBWiBFIbCz2ULEF Banks traded heavily in CDS market | David Oakley in London and Saskia Scholtes in New York 04-02-07 | Financial Times
A Bloomberg article yesterday quoted a trader: "Futures and derivatives are the place to be".
Chris Powell said it best, "the US economy has become one big service charge".
This FT article highlights banks frantic "flurry" of CDS trading, done last month over mortgage concerns - underscoring the banks' (and economy's) overexposed dependence on largely over-the-counter(OTC) derivatives - highly vulnerable to rate assumptions, counterpartys' individual and collective performances, market confidence, returns, models, profits and outlooks, etc.

In my last post I was happy to "quote" Chris Powell, but was actually closely paraphrasing him and the gentleman quoted by Bloomberg on derivatives. Their quotes follow
(I have excerpted from a GATA dispatch):
From: gata@lists.gata.org(Gold�Anti-Trust�Action�Committee) Date: Sun, Apr 1... To: dispatch@lists.gata.org Subject: [GATA] Derivatives soon may overwhelm trading even in Treasury bonds...
Submitted by cpowell on Sunday, April 1... 5:15p ET Monday, April 1, 2007
Dear Friend of GATA and Gold:
A week ago the Financial Times reported that an exchange-traded fund in credit derivatives was being started in Europe (http://www.gata.org/node/4933). Now Bloomberg News Service reports in the story appended here that futures trading in U.S. government bonds soon may exceed trading in the bonds themselves on the Chicago Board of Trade -- because the futures allow investors far greater leverage.
This is Chapter Umpteen in the financialization of the United States, where hardly anybody makes anything anymore, where the economy is mostly one big service charge.
Speaking Friday night in Hartford, Connecticut, the political agitator Ralph Nader referred to the unprecedented level of financial speculation in the United States. Nader remarked that there would be no need to tax the income of Americans earning less than $100,000 per year and no need to tax the purchase of any ordinary necessities if the U.S. government applied a 1 percent sales tax to futures and derivatives trading.
But maybe these days the full faith and credit of the United States aren't as trustworthy as the full faith and credit of the Chicago Board of Trade.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Futures to Surpass Bonds
As Appetite for Risk Rises
By Elizabeth Stanton
Bloomberg News Service
Monday, April 2, 2007
http://www.bloomberg.com/apps/news?pid=20601009&sid=a4jLzz.P2XV0&refer=b...
NEW YORK --Snippits: "Treasury futures, the most active contracts on the Chicago Board of Trade, may surpass trading in notes and bonds for the first time next year as money managers use more derivatives to boost returns...
"Fixed-income managers are catching up to what hedge funds have to offer," said Hussey. More managers are aiming, with the aid of derivatives, to beat a benchmark by 2 percentage points annually, double the typical objective, he said.
Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies, and commodities, or linked to specific events such as changes in interest rates or the weather.
Low bond yields are encouraging pension funds and other investors to take more risks in order to meet their targets for returns, Hussey said.
The yield on the 4 5/8 percent Treasury note due in February 2017 rose 0.03 percentage point last week to 4.65 percent. The price of the securities fell 1/4, or $2.50 per $1,000 face amount, to 99 26/32.
The yield on benchmark 10-year notes, which averaged 6.7 percent during the 1990s, hasn't been higher than 6 percent since August 2000.
Corporate bond yields also are low by historical standards. For investment-grade debt, the average yield is about 93 basis points higher than the comparable Treasury yield, according to Merrill Lynch & Co. It's been lower than 100 basis points since December 2003, after averaging 168 the previous three years.
Treasury futures contracts, introduced by the Board of Trade in 1977, require buyers and sellers to receive or deliver securities on a specific future date.
The average daily volume in Treasury futures listed on the Board of Trade in February was a record 3,184,429, equal to underlying securities worth $348.3 billion, according to the exchange. The amount is almost 37 percent higher than a year earlier. The 21 primary U.S. government securities dealers that underwrite Treasury auctions handled an average of $503.7 billion during the month, a 0.4 percent increase from the previous February.
Ten-year U.S. note futures are the biggest contract traded on the Board of Trade. Transaction fees from interest-rate agreements totaled $345.9 million last year, accounting for 56 percent of the exchange's revenue. Fees from all products accounted for 77 percent of revenue.
The Board of Trade's pending $8.9 billion acquisition by the Chicago Mercantile Exchange was topped by an unsolicited $9.9 billion offer by Intercontinental Exchange Inc. on March 15. The Merc lists Eurodollar futures, the world's biggest futures contract.
"It's a very important portfolio management tool," said Michael Materasso, senior portfolio manager in New York for Franklin Templeton Investments Inc., which oversees $124 billion. He has increased his use of Treasuries futures by about 20 percent in the past year after implementing strategies that compete with hedge funds. Franklin Templeton sells futures to reduce the interest-rate risk in corporate bonds.
While futures don't produce income like bonds, they are faster and easier to trade. More than 90 percent of Treasury futures change hands electronically.
"Futures offer a degree of anonymity to customers and allow them to meet their fiduciary obligation to get the best price," said Brian Varga, co-head of U.S. Treasury trading at Countrywide Securities Corp. in Calabasas, California.
Trading by the primary dealers, including Countrywide, fell last year for the first time in central bank data going back to 2001. After 17 interest-rate increases by the Fed pushed financing rates higher than Treasury yields and depressed volatility, investors found fewer opportunities to trade.
"Derivatives is the place to be right now," said Jim Bianco, president of Bianco Reseach LLC in Chicago. "It's a booming business, and so is the futures exchange."

Yup, that $660 line is some "not to exceed" figure no doubt thrown down by Paulson's brigades. If you look at a 1 year chart the failures occur over and over in that area. Usually the physical resolve to overcome the management becomes dramatic at some point. I believe the next retrenchment will be closer to $800 judging by when the $400 and $500 lines got erased. We live in a new era of in-your-face corruption and greed, no? If the pharmaceutical lobby can literally write their own laws in Congress who knows what JPM and GS are getting for their enrichment.

The big unknown is whether TPTB are buying time to close out substantial positions that would result in catastrophic losses for some of the big money banks OR if it is the intent of TPTB to stop gold's ascent in its tracks (making $665 the official market price / cap ad infintum).

If the latter, I believe that some big players may have forgotten one key aspect of inevitability... that it is inevitable.

I further believe that this last Herculean stand at the $665 level may be the the final significant obstacle between where we are today and four digit POG.

I may be wrong. I often am.

PA

@ PA,

If the Chinese wanted to really spank some bankers, they could use some of that $T toilet paper to manage some "volatility" of their own!

The PPT would probably wet themselves!

http://business.timesonline.co.uk/tol/business/money/mortgages/article1564480.ece
snip...

Man, 102, takes out 25-year mortgage

Brendan Montague

A pensioner aged 102 has been granted a 25-year mortgage despite the fact he would have to live until 127 to pay the loan back.

end snip.... see link

I agree that $665 might be the last significant obstacle before 4 digit POG denomination. It was suppressed so hard at the $300 level, for so long, that once it gave way a doubling, and more, was in order. I'm sure too when it happens Kaplan, Nadler, and the bunch will attribute it to "global tensions" and "excessive speculation", rather than the real cause- a failed suppression scheme and a fiat dollar spiraling out of control.

Sinclair sees another "pausing zone" in the 882 neighborhood (one of his angels), before heading into four digit territory.

Sometimes JSinclair is a good contrarian indicator.
I don't think we''ll have "5000 more opportunities to trade this secular gold bull" but everyone's entitled to their opinion. He's been more specific about gold "angels" before but I see him occasionally contradicting himself as he alternates back and forth from conservatively bullish to a contained sort of ecstatism.
Now we have more news of the weird: ;)
ABC News-World-Wire - Iraq Curtails Baghdad Curfew by 2 Hours Tue Apr 3, 2007 2:10 PM EDT
USA Today - World - Sudden release of Iranian diplomat raises hope for end to British standoff
Tue Apr 3, 2007 2:00 PM EDT

Yahoo! - Reuters - More Headlines
Bush, Democrats clash over Iraq war funding
Tue Apr 3, 2007 1:50 PM EDT

CBS News-National - More Headlines
Very Active Hurricane Season Predicted
Tue Apr 3, 2007 1:40 PM EDT

UK-BBC-World - More Headlines
Europeans plan new oil pipeline
Tue Apr 3, 2007 1:30 PM EDT

MSNBC - International - More Headlines
Pelosi tours Damascus, rebuffing criticism
Tue Apr 3, 2007 1:30 PM EDT

MSNBC - U.S. - More Headlines
California condor lays precious egg
Tue Apr 3, 2007 1:30 PM EDT

Washington (DC) Times-World - More Headlines
French train hits record 357.2 mph (Ingrid Rousseau)
Tue Apr 3, 2007 1:00 PM EDT

Washington (DC) Times-World - More Headlines
Christians seek visas to flee from Lebanon
Tue Apr 3, 2007 12:40 AM EDT

"The powers that be
Like six sixty three..."

SIERRA

Looks like a fair amount of effort was invested in making paper gold look like it hadn't done as well as the other metals in today's COMEX session. When you consider that the COMEX pricing mechanism arrives at a number acceptable to both the sellers (who don't actually have any gold to sell because they're only selling short) and the buyers (who don't really want to buy/ own any gold), there's not a lot of relationship between today's number and the longterm value of what you may have stashed away. Further, the fact that you can take possession of the real thing and add to that stash at a price set partly by COMEX's so-called "buyers" sounds like a bargain to me.

Those who have researched this forum's posts from the late 90s are aware of a predicted scenario that the "official" price of paper gold may approach/ reach zero at about the time the price of actually taking possession of a single ounce will seem absurdly high compared to today's number. We're already seeing a foreshadowing of this situation in what's called the premium between paper gold and real gold. Extrapolate from today's "pay a premium if you want to buy the real thing" to the predicted scenario may seem like reaching too far, but there's a certain symmetry between the following two positions...

COMEX: "This paper gold isn't worth a X#%Xing thing. You should buy stocks and mutual funds instead."

Prudent gold holder: "Well, you're right about paper gold being worthless, but there aren't enough federal reserve notes in the world to tempt me to let go of a single ounce."

As many here have noted, most people don't want to talk about gold at all, and I've discovered that -- among the few who are willing to discuss it -- introducing the idea of paper gold at zero almost automatically triggers speculation about what happens next; i.e., bartering an ounce of gold for how many of whatever or perhaps having one- and ten-gram slivers of gold embedded in clear plastic to use as money. Maybe I'm greedy, but instead of wondering about the days immediately after Paper-Gold-At-Zero, I'm curious about the days immediately prior to PGAZ.

I see two scenarios, both beginning with the premium between paper gold and real gold approaching $50 per ounce.

* At this point, the more likely scenario is the one that involves guessing whether it's closer to 12 hours or 48 hours before COMEX makes surprise announcement reneging on delivery and offering cash settlement only. True, the cash settlement number will be high enough that COMEX longs will double or triple their investment, but they'll be howling about losing out on returns orders of magnitude higher and we arrive at PGAZ a day or two after those longs start walking around mumbling to themselves "Fool me once, shame on you. Fool me twice, shame on me." I can't think of any way to benefit from this scenario other than by having bought gold before it happens.

* The less likely scenario does offer the possibility of being played for longterm advantage. This version results from those interested in stability artificially propping up the price of paper gold even as the premium for real gold approaches/ surpasses $100 per ounce. In the unlikely event that this happens, there might be the possibility to acquire a few more ounces for a price (COMEX's number of the day plus what will seem like a high premium) that will turn out to have been a fantastic bargain.

Caradoc

The way gold has been moving the passed thirty to sixty days is reminisent of Trench Warfare. Each side gaining ground only to be pushed back on the inevitable counter-attack. A game of attrition where those who have succeded in learning and have applied the rules of survival, escape the inflictions of the enemy. The inflictions are many.

Sir Goldilox,MSG.# 153938 and Sir M.K.'s newsletter.


So, my Fellow Goldbugs, as we await the whistle, we shall be confident for we know the enemy,his tactics and the lay of the land. Most of all, We Shall Prevail!
Slingshot-------<>

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

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

TUESDAY Market Excerpts

April 3 (MarketWatch, DowJones) -- Copper futures climbed more than 4% Tuesday to close at their highest level in five months, piggybacking on growing global demand and concerns over falling supplies.

At the same time, gold futures finished lower in a volatile session on the New York Mercantile Exchange, with traders tracking weakness in the oil market and shrugging off strength in other metals.

On the London Metal Exchange, copper prices traded well above the 200-day moving average around the $6,900 mark and closed at $6,970, according to Martin Hayes, an analyst at BaseMetals.com, "...with fundamental support seen from falling inventories and expectations of increased consumption in the seasonally strong second quarter, notably from China," he said.

June gold declined by $1.80 to close at $669.70 in New York, after reaching a high of $673.20 as traders remained focused on developments surrounding standoff between Iran and the U.K. over the fate of 15 sailors and marines in Iranian custody.

"For the moment, dips are still being viewed as a good buying opportunity, a theme likely to continue as we approach the wedding/monsoon season in India," said James Moore, a metals analyst at TheBullionDesk.com.

In a note to clients, he called "encouraging" the emergence of technical support around the $656 chart line. However, "with the market still largely long, there remains the risk of a deeper correction short-term," Moore said.

Movements in the price of crude oil also filtered into metals trading. Crude for May delivery closed 2% lower with tensions between Iran and the U.K. easing slightly.

George Gero, vice president with RBC Capital Markets Global Futures, said good demand for gold helped prices bounce back from earlier lows for the day and may be the focus of the market even more than the U.K.-Iran situation.

"We think demand for gold in India and elsewhere in the world continues unabated." Thus, the metals remain generally underpinned despite short-term fluctuations due to Middle East developments, he said.

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

http://en.wikipedia.org/wiki/Chinese_currencyIt's the ratio folks!
50:1
These are currencies, closely traded.
Real money; Au adopted by the West, Ag by the East.
The US played hell with the PoS in the 1930s, to undermine the Chinese currency - which was still linked to Ag.
The UK adopted the Au standard (officially) mid C19.
Europe followed, then the US at the end of the C19.
All have abandoned an Ag standard.
The Chinese have been through fiat currency collapse (see URL).
Their re-monetarization with silver contributed to the rise of Spain's wealth, via Ag mining in the New World.
What if China has an awful lot of Ag, say far more than Ted Butler's presumed 1 billion ounces?
What if this amount is known (approximately) to the Western powers, as the level of our Au reserves may be known to China.
Real money, on each side.
Horse trading on the relative value would sort out trade deficits / exchange problems etc....
Might explain a lot?

http://www.gold-eagle.com/editorials_05/swagell040207.htmlEntertaining and informative little essay with some familiar quotes. Interconnected world markets' performance relies on daily economic stats, liquidity, confidence and so on, and are subject to changes such as "Joe" suggests,
in greater contrast to the security of gold:

Itchy Trigger Fingers
By Joe Average
April, 2007
www.lifetoday.com.au - Excerpts:

"In his new book "FINANCIAL ARMAGEDDON" ( www.financialarmageddon.com ) Michael Panzner paints a chilling picture of how he sees the current global asset and credit bubbles climaxing. Need I say it� not at all well!
Panzner, is "a 25-year veteran of the global stock, bond, and currency markets�(who) has worked in New York and London for HSBC, Soros Funds, ABN Amro, Dresdner Bank. and JPMorgan Chase".

The author believes "The explosive growth of derivatives trading and leveraged hedge fund investing, hidden behind a shroud of lightly regulated secrecy, means that few people will have a handle on where dangerous risk is concentrated�until it's too late� no one can be sure how new or exotic instruments and markets will behave when conditions take an ominous turn.
Instead, complexity, unfamiliarity, uncertainty, misplaced complacency, and newfound prudence will trigger a broadly reactive response -- the kind that has fostered numerous panics, bank runs, and market crashes through the years.
This time, however, a vast and efficient global communications network will ensure that destructive energies are rapidly transmitted to billions of people. So, too, will trading technology that facilitates and encourages traders and investors to act on their impulses. Many will find it too easy to shoot first -- or point and click -- and ask questions later in a 21st-century rush for the exits... the fastest or sharpest operators(will) look to get out."
In Panzner's scenario, a sudden major market plunge will see startled investors lunging for mobile phones and lap-tops to execute "sell" orders, while hot-shot hedge-fund jocks click away frantically on computer keyboards with lightning fast reflexes as they also attemp to bail out.

The problem is �if everyone hits the "sell" button and tries to unload all at once, who are they going to sell all that "stuff" to?
To quote Nigel Jenkinson (Bank of England director)�"There is a dark side connected to financial integration. If shocks are large enough, the financial system becomes a risk transmitter rather than a risk disburser."
And Robert Prechter ( www.elliottwave.com ) sure believes that the "shocks" will be "large enough."

In his latest Elliott Wave Theorist Prechter states "the size of today's credit bubble is so huge that it dwarfs, by many multiples, all previous bubbles in history�. It's not the "Goldilocks" 1950s. It's not the inflationary 1970s. And it's not a "business as usual" extension of the 1980s-1990s bull market. It's 1929 times ten. Those who can't see the difference will suffer the consequences. Those who see it�will survive and prosper."
Sobering thoughts...

Commodities investment guru Jim Rogers has recently joined the likes of Robert Shiller and Robert Prechter in predicting a real estate crash. He is selling up his Manhattan mansion and pulling most of his money out of emerging markets in anticipation of an imminent crash in both. Rogers believes "Real estate prices will go down 40-50 percent in bubble areas."
Rogers also told Elif Kaban (Reuters March 14th, 2007) that "I've sold out of emerging markets except for China" (even though he believes Chinese stocks are overvalued and could drop 30-40%). "This is the end of the liquidity party. Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."
So hang in there Generation Y. The economic cycle may once again kick back in and come to your rescue."

The $660-$665 range has become a limbo of sorts for POG. It meanders aimlessly in this channel awaiting a trigger event (random or by design) that will allow it to loose its chains and bring about one of Caradoc's eventualities below.

BTW, Caradoc, very nice summation of the likely outcome of POG's future. I believe that we are on the precipice of paper separating from physical.

I may be wrong, but my gut tells me that I may be close to the mark this time.

PA

she's on fiire

@ Caradoc,

Interesting scenarios, but I fail to see how gold ownership remains advantageous once you reach a point where no one can buy or sell it.

Outside of a pure barter system, the vehicle for leveraging your gold ownership is lost once there is no vehicle for monetary exchange, not unlike holding a "collector" painting in a population which no longer values art.

Please elaborate your scenario to include a mechanism of exchange that will establish gold's value when it is separated from the paper market.

From your earlier description, I extrapolate a scenario where those who have food, water, and other necessities say to the gold owner who is wanting of these "so what?" Somehow, I don't think that is what you meant.

The total volume for this Tuesday's Comex was a scant 75,580 contracts (bought & sold). Options volume exceeded it at 344,000 (100oz units). Behind the scenes a rapidly rising use of derivative options are also used in capping any recent rallies.
The commercial interests have basically three major obstacles in crating POG once again. The recent Iran hostage capture of a naval boat, a bullish POO scenario (long oversold)and a very bearish USD$ outlook. Anyone one problem could spark an instant short squeeze.
The commercials know this and are patient, they will wait intil Iran resolves, Oil rallies wane(already $6) and the oversold USD$ on a technical basis can mount a rally (maybe to 85.4 area). PPT has voraciously defended the USD$ at 82.5.
It now appears that Iran & Britain will settle, Oil may have finished it's rally temporarily and the USD$ is now over 83.10 on a technical bounce.
Do not wait for a massive charge by a Russian, China or Japanese Central Banks to purchase bullion. This would only exaserbate the USD$ weakness for them and cause loses to their huge reserves. Expect yet a slow US govt USD$ devaluation. They must show they are in charge and inflation is only a mere fly in the ointment. Afterall 99% US citizens are deficient in anything economic except taxes.
The commercials acting for the bullion banks (govt backed & inspired) have scarce bullion reserves to force a large selloff in the POG.
Commercials have turned instead to the use of securitized inerest rate swaps and maybe even credit default swaps. The same way the house and auto loans are merchandised.Transfer of risk to hedge funds (the public really). Options at 4-5x times daily volume can for a short time work to cap POG.
Last Tuesday's COT showed yet another increase in commercial net shorts that total -146,902 (futures & options combined). Their intent is to soak up all fund buying at current levels and when one bearish factor enters the market they will precipatate a fund inspired programmed selling wave.
For me as an analyst, I have chosen the bottom of that sellof to be $618 area. The trade needs to liquidate some 70,000 shorts on the next move down. WHY? The answer is the trade has 75,000 legitimate mining hedge shorts. These shorts WILL be lifted in 2007/08 as part of a Barrick ( & others DRD, AAU, NXG etc.) dehedging program before POG ratchets to the next level. That level looks to me to be in the $833 area. Then corrections will come (less than 8-10% usually) driving to the next plateau that should be about $1,200. Events can overshading and amplify any of these moves.
For instance, EWI analysis has one possible scenario that brings POG to $560 from here (a current Alf Field study). Gann studies (by R. Rosen indicate a similar possiblity). My own studies show $588 as an extreme impulsive selloff that could possibly occur from a wholesale sell off in common stocks, POOil or a USD$ technical rally and will from simply from trade manipulation.
One thing is for sure "Gold always hurts the MOST amount of investors before it shines"
Currently, almost all the POG indicators are near or are overbought. With the commercials strategy from Paulsen and crew expect this sell off to complete before May/June 07!
There will come a time when POG will rocket and stay overbought as it has sometimes for weeks at a time.
What all posters here should want is a slow rising bull with sharp corrections accerating in a staircase fashion. This staircase could shoot for the moon Alice and inadvertantly hit the Milky Way, LOL. A rally such as last one in May/06 would not be beneficial exemplified in June/06 terminal selloff and subsequent slow recovery. Rgds/Peter

Second paragraph should read "cratering" POG NOT crating POG/Peter

http://www.financialsense.com/MARKET/archive/2004/1122.htmlPA: Your sense of timing on paper separating from physical isn't far off from mine. Further, the recent increase in premium above official spot price may indicate that we've already stepped off the edge of the precipice. If so, it won't be a matter of months; we'll know within days or weeks.

Goldilox: I wish Another or FOA were here to respond to you. In their absence, I'll venture a guess that the point where paper gold is worth zero and real gold is worth an infinite number of what we call dollars will be just that: a point in time. Afterwards, a new pricing mechanism will arise, probably preceded by a period of barter.

True, during the first few days of barter, those who have stashed a certain amount of food, water, etc. may be loathe to trade for gold or silver; but even on day one of bartering those with a continuing supply of necessities should be willing to trade.

For example, those who looked into the merits of buying a couple of solar panels and a DC pump for their well should have a certain amount of water beyond their immediate needs and be willing to barter. Those who managed to find a place with an artesian spring located above the house will have more water than needed for household use and for irrigating a nice vegetable garden. I'm getting artesian flow of slightly over 30 gallons of mountain spring water per minute (despite California having received the least rain in over a hundred years) and a neighbor who uses a pump is getting 55 gallons per minute. I suspect either one of us would be willing to let people fill up a couple of five-gallon jugs for a very small number of silver dimes.

Anyone interested in the geopolitical and/or financial implications of the water shortage which has already begun should read Jim Puplava's prediction from 1994 linked above.

Caradoc

Has anyone actually noticed this phenomenon as yet?

I notice some posting regarding the "separation" and I am wondering if I have missed something???

The appearance of PREMIUMS would indeed be a strong signal. The gold price plus premium is the REAL price. All the rest is BS.

SIERRA

We all know that the worst possible thing anybody can do, when not coping with a given situation, is to whinge, lament or otherwise acknowledge defeat. Rant and rave to your hearts content, never whinge though. Better still, don't get mad, get even, as they say.

If the big boys begrudge you a safe haven because it runs contrary to their scheme of things, such as their latest ploy "the credit game", play it, make hay, disprove that two wrongs don't make a right. The wherewithal for the enormous credit expansion comes from your fiat savings resulting from toil rather than speculation after all. And the inability of the regulator to afford you the protection you are entitled to gives you all the moral support you need to paddle alongside and in the slipstream of the organized financial crime steamer. Screw them. The more like-minded the less the likelihood of easy credit peddlers to come to their ill-gotten right and the quicker the end to this money-flood that is deflating our savings.

Take every credit card or car financing with initial loss-leader repayment scheme, milk it and forget it. In their greed they don't even check your name or number properly any more. Ethics? Accountability? If your supposed role model doesn't have it how can you little speck of dust be so presumptuous as to lay claim to it. Was Enron's fall fortuity or orchestrated? Allow THEM to laugh at your seeming gullibility and enjoy for as long as it lasts. It won't be forever. Secure your real worth in anything but fiat, protect your identity, and throw yourself headlong into the reigning mess.

The scenario you describe (PoGaZ or ANY PoG sub $100) can develop as a result of a Global Fiat liquidity crisis and I'd be thinking we'd get a few taps on the shoulder beforehand.
Sad to say there are but a handful of souls who can differentiate Gold in its many guises ...this will all change with time imo, as will percieved value inherent in Sur-Real Estate etc.
Having spent the first 4 yr's "this century" anticipating just such a scenario, I'm surprised it hasn't happened yet. Much smarter Gold advocates than I have canned the concept as, under a Fiat regime, a liquidity crisis can't develop.

We'll see about that ...I'm still keeping a weather eye as ultimately the thing MUST collapse inward ...Fiat or otherwise.

http://www.nytimes.com/2007/04/04/opinion/04weds2.html?_r=1&th&emc=th∨ef=sloginFrom the NYT...another parallel with 1929...income disparities.

Snip:

"...
Not since the Roaring Twenties have the rich been so much richer than everyone else. In 2005, the latest year for which figures are available, the top 1 percent of Americans � whose average income was $1.1 million a year � received 21.8 percent of the nation's income, their largest share since 1929.

Over all, the top 10 percent of Americans � those making more than about $100,000 a year � collected 48.5 percent, also a share last seen before the Great Depression.
..."

Sundeck: Mmmm...I wonder what the situation is in China? India? Brazil? and Russia? Probably not a lot different, if accurate data were obtainable...

:-)

"Anyone interested in the geopolitical and/or financial implications of the water shortage which has already begun should read Jim Puplava's prediction from 1994 linked above."

On a planet whose surface is 3/4 water, the very idea of a "water shortage" should outrage the population, more so even than the contrived oil shortages of the 1970's.

It's not like we're waiting for "technology" to invent water purification or distillation all over again. These technologies have been part of the mainstream for decades.

What we're seeing is the Corptocracy buying up the public delivery systems world-wide to invent a reason to "sell" us water. Once they own enough of the infrastructure, thanks to communities that are bankrupted and forced to sell everything to meet the failure of the FIAT "miracle", they can play "GOD" with water like the cattle barons of the 19th Century.

Why must local governments rely on Corp/FED money or go bankrupt? The all-too-easy answer is profligate spending. The complete answer is that they are as subject to the vagaries of "deficit financing" as the Federal government and the consumer, but like the consumer, are unable to "print" their way to prosperity. Only those who control the FIAT and FIAT casinos can prosper in that formula. The "savers" and "frugal spenders" are eaten alive by invisible, and more lately, unacknowledged inflation.

As long as they can contain the "official" PoG, even it will not save anyone, as all it has been allowed to do so far is barely meet the "unofficial" inflation rate.

"But it's more than doubled from 2000!", you cry out in defense. Yes, but if the "real" inflation rate, as some have surmised, is 10% (or greater), $100 of purchasing power in 2000 money requires $214.35 of 2007 money to equal it. Sort of the "miracle of compound interest" in reverse.

Where is gold in all this? A simple calculation is $665/$250 = 2.66, not far above the 2.14 factor of 10% inflation.

Until we see a serious breakout, PoG has been successfully contained within the range of real inflation.

@ Sundeck,

Income disparities is only the tip of the iceberg. Unbalanced tax codes hide most of the "real" income unequally for those at the top, and rob those in the middle of any real wealth accumulation.

A better measurement is "net worth", albeit harder to ascertain. Many of those $100K income recipients the author describes have little or no "net worth", as their indebtedness and debt service outweigh the income proposition.

http://earthquake.usgs.gov/eqcenter/recenteqsww/@249, world seismicity is in "active" phase to say the least.
Western Pacific fault line occurrences not slowing down. The Solomons Mag8 has spawned a series of aftershocks the likes of which is reminiscent of the Indonesian Tsunami quake of X'mas 2004.
No doubt an unnerving time in Paradise.

http://www.kitco.com/images/live/gold.gifNow THATS covering a short!

http://gold.seekingalpha.com/article/31410The Long View of Gold and the U.S. Dollar - Seeking Alpha
- Bill Cara
If you haven't seen the latest new Fed comic book, I will post a link later today when I have time. Allegedly there is a picture with the GATA banner and it is pro gold and gold coins. I have not been able to access PDF files with my home computer so I will view it later at another terminal.

http://www.bos.frb.org.education/pubs/banking2.pdfThe new Fed comic "Banking Basics", which the author of an article at lemetropolecafe.com says includes gold coins and art from GATA (by GATA's artist).

link doesn't work... :(

http://news.yahoo.com/s/ft/20070403/bs_ft/fto040320071433120910;_ylt=At0O49x7OFzRVzQnr_jNMyf2ULEFFund issues dire equities warning - Yahoo! News - Financial Times - April 3, 2007

http://www.bos.frb.org/education/pubs/banking2.pdfThanks for letting me know. I made an error so the link should work now.
Here is the story(excerpts) on the FIRST gold-friendly comic with the middle section excised:

""The Road To Roota"
or
The Implementation of the Gold Standard
Here's a gold bug brain teaser...
Did the 1981 Gold Commission begin the implementation of the gold standard and not tell anyone?
My latest adventure into uncovering "TRUTH" started when I found the very cryptic Federal Reserve Board COMIC on their educational website called "Wishes and Rainbows" as well as the teachers guide called "The Road to Roota". Both of these were originally issued back in 1981 when Reagan's Gold Commission was meeting to find a way to a gold standard. This comic had not been seen since...until it was re-posted and updated on the Federal Reserve website on January 1, 2007 in the electronic version.
1981
2007
�
http://ecedweb.unomaha.edu/ve/library/WISH.PDF http://www.bos.frb.org/education/pubs/wishes.pdf
TEACHERS GUIDE "THE ROAD TO ROOTA" http://www.bos.frb.org/education/pubs/roota.pdf
The Federal Reserve Bank of Boston released the first and only Fed comic back in 1981 but mysteriously started printing them since mid 2005. As of today there have been many comics released but "Wishes and Rainbows" is the only one that was updated, re-released and is the only one with a teachers guide (The Road to Roota). Clearly there was/is something special about this comic. First, note the emphasis added to important words in the comic including BOLD type, underlining and "quotations". It is my intention to prove that this comic is more than just a children's learning tool designed to teach kids about scarcity, but a window into the secretive world of the Federal Reserve Bank and monetary policy.
First a little fun, read the comic and the teachers guide (without any of my suggestive hints) and get a first impression. Fairly strange even cryptic comic isn't it? If you don't think so read the other ones which are fairly straight forward and you'll see that it's easy to grasp the teaching concepts behind them. Now, here is a list of words to substitute into the comic to find another meaning for what the Fed is trying to tell us in this comic:
Colorland = Gold Standard (or commodity based currency)
Boulder Ridge = Canada
Gopher Junction = Mexico
Pebbleton = USA
Pebblepeople = US Citizens
Grey Flowers = Fiat Currency
World of No Color = Fiat Money System
Color Flowers = Commodity Backed Treasury Notes
Cobblestone Canyon = (Chocolate Mountain? http://www.uhuh.com/1calfraud/stacks/bixman.htm)
The Mayor = President Reagan or Carter
Golden Sunlight = Gold Reserves
Black Tears = Oil Backed Currency (http://www.lewrockwell.com/paul/paul303.html)
A new meaning jumps out doesn't it? Now walk with me down this "yellow brick road" of monetary policy and let's see what else we can discover!
http://www.halcyon.com/piglet/Populism.htm
ANALYSIS
Let's start with this background article:
http://www.polyconomics.com/searchbase/gp3.htm
Now add these tidbits to your understanding:
1) In 1981 Greenspan (and/or others) developed a plan to return to the gold standard...the question was implementation. http://www.time.com/time/magazine/article/0,9171,921073,00.html?promoid=googlep
2) Stephen Devaux, the person who "adapted" the cartoon "Wishes and Rainbows", worked for the Federal Reserve in Boston...Mr. Devaux is now a world renowned author and trainer on "Project Management and Implementation" There is NO information about him available on the internet until the release of his Total Project Control concept. http://www.brandeis.edu/facguide/faculty.php?emplid
=5b9e13d1a2dd57c57f3a5b245247d2601337b7ea)
3) Stephen Devaux would have been the perfect person to implement the Greenspan plan. His teachings talk about long implementation time frames, necessity of profit enhancement during the process of change and he was a computer expert in the early 1980's. http://www.maxwideman.com/papers/totalcontrol/totalcontrol.pdf
4) The main character of the story "Roota" struck me as a very odd name until I found this on the internet:
"ROOTA" or "rootA" was one of the key programming concepts in financial computing using DOS in the late 1970s early 1980's. (HP Document entitled Numerical Analysis Library � Volume 1 http://www.hpmuseum.net/exhibit.php?swdoc=223). I assume Devaux was one of the few people at the time who knew this financial computing language. RootA could also be understood as the ultimate basis for a backed currency (such as the "golden light" in the comic).
5) Mr. Devaux worked for the Federal Reserve Bank for 9 years during the Gold Commission crisis. The 1980's is when many gold bugs believe Citicorp and Goldman Sachs (and friends...see Devaux's resume) implemented the trading programs for "managing" the markets http://www.interventionalanalysis.com/. Devaux went to work for Citicorp right after his stint at The Federal Reserve Bank of Boston. His job at Citi was described as: "Developed and taught customer seminars in the implementation and use of Citicorp banking software." Oil and Gold were just the beginning. Then he went on to Fidelity to train them how to use his software in the share market.
His last job before moving on to his own consulting firm was for Project Software and Development Inc or PSDI (supplied the software Maximo to the US Mint and almost every other high value asset business)...

MY CONCLUSIONS:
Stephen Devaux "adopted" Wishes and Rainbows with a full understanding of the dilemma of the implementation of the Gold Standard.
In my opinion, it is no coincidence that "Wishes and Rainbows" and "The Road To Roota" were released again in January 2007. I think the Gold Commission DID enact the "Gold Standard" in 1981 but the implementation process, designed and coordinated by Stephen Devaux, continues to this day, but the end game is close at hand due to the "BIG" players within the US government and the 911 tragedy.
As the final summary of the cartoon "Wishes and Rainbows" states:
"But the townspeople are still not content. Many want two, three, and even four flowers of their own. Since Roota cannot grow that many in only two sunlit caves, she and Rockie still search for another opening to Colorland. So don't be surprised if some summer day when you're lying on the green grass and looking at the blue sky, you hear voices coming from underground. It could be Rockie and Roota searching for the entrance to Colorland."
These are my thoughts and I KNOW there is a lot more than what was presented here but it's quite enlightening.
Remaining questions I can't quite get my hands around:
1) Who/what is Roota? (Devaux, Devaux's Market Rigging program, Greenspan, the Federal Reserve, Gold Standard or someone else?)
2) Who/what is Rockie? (Burns, Sullivan, Greenspan, someone else?)
3) Who/what is Grandma? (Roosa, Burns, Volker, founding fathers?)
4) The pebblepeople are afraid of the BIG people of Colorland because they might get stepped on...Is the Federal Reserve on the side of the US Citizen? (wouldn't that be a shocker!)...Who are these BIG people (shadow gov't? Rothschilds? illuminati? Etc� Was it the same group that took out Kennedy and tried to take out Reagan? (Bush/Hinkley link: http://www.geocities.com/northstarzone/HINCKLEY.html)
5) Has the Devaux implementation plan gone astray with all the physical gold going to Asia/Russia? Did Bush Sr., Clinton, Bush Jr. divest the peoples gold to stay in power?
6) Why did the original "Wishes and Rainbows" depict the characters as Asian? Why was it updated to Caucasian?
7) What did Roota "find" behind the large bolder in the caves near Cobblestone Canyon? What was the "rockslide" that cut off the canyon?
COMIC ALERT!
ANOTHER COMIC WAS JUST RELEASED BY THE BOSTON FEDERAL RESERVE BANK CALLED "BANKING BASICS"
http://www.bos.frb.org/education/pubs/banking2.pdf
(Look for gold coins in the pictures and what is being done with them�and this!)"

I must add, my last post also excludes many excellent photo reproductions from GATA and the FED comics (2 recent comics + 1981 original).

Goldilox. Your message#: 153972
states the above. I am convinced
the 95% of all small gold owners
will be a resounding success by
"only" matching the unofficial
inflation rate. Most of the small
owners either will sell too soon
or too late to make a "killing" in
the precious metals. Just the nature
of the creature...
The resounding success will be the
comparative keeping of, ok, wealth
if you will. The rest of the middle
class will have to start over again.
Happens all the time, all over the
planet; only here in the US of A
this was avoided due to being the
victor in the last big'o war.
The fact will emerge that the gold-
owner will stay or enter the middle-
class, while the rest will destruct.
Row row row your boat...Cheers...OvS

@ OvS,

Only matching the Inflation rate "protects" the percentage of assets one has in gold but sees the other lose regularly. In order to "stay with inflation" at the current rates of increase, one needs 100% exposure to Gold, but still does not increase "wealth".

Every single Argentinian family which still enjoys a "comfortable" life, has had, for decades, important capital reserves OUTSIDE the country. Deposits in foreign banks and investments in dollars, pounds, German marks, French francs, and (lately) euros, has been vitally important to economic survival for these families.

Since 1930, Argentina has eliminated 22 zeros from its currency. The US is doing what Argentina has been doing since 1930. Be warned!

The financial contact has been through Montevideo, Uruguay, which has prospered as a financial center for that reason.

Today, even the Uruguayans are worried because they have a leftist government either in power or about to come into power. 40 years ago, Uruguay was known as "the Switzerland of South America".

I think that today, this policy for Argentinians will no longer be as effective; they may be swept away by the huge financial speculation that is going on all over the world - see "Daily Reckoning" at www.dailyreckoning.com where Bill Bonner gives wise advice.

The same goes for Americans; they have not yet caught on to the fact of that the enormous and dangerous pyramid of financial speculation can be their doom.

Both Americans and Argentinians, and indeed, all who are concerned with preservation of wealth, must now go OUTSIDE of current monies into another FOREIGN MONEY, and the only non-fiat foreign money that exists is: GOLD. At least a part of present wealth should be in that "foreign money" which has no nationality, GOLD. That will be the factor that will allow the rich to retain a part of their wealth, and that will allow the middle class to remain in a much reduced number of middle class.

"Some learn by reading, some by listening to those who read, and the rest have to learn by peeing on the electric fence for themselves."

SIERRA

@ Sierra Madre,

Of course, the Argentines had the luxury of foreign currencies not undergoing identical devaluation at the same time.

This time, it really is different, as the euro, $, and Yen asymptotically race to ZERO.

REAL wealth accumulation may be even more important with no foreign currency havens available, but it may also be a more tempting target to TPTB and such other unscrupulous characters.

As long as they contain IT within inflationary growth rates, IT is probably safe, but watch out if a Moon shot ever occurs in PMs, as the scavengers, legal and not, will abound!

Your comment about contemporary currencies depreciating in tandem is very important -- more important than many realize. Gold is the only real safe haven these days.

Wanted to say also, that we have a few clients who lived in Argentina at the time of bank closings, depreciation, inflation, etc and now live in the United States. One, who's family was fairly well off, recalled that it is a very scary thing to go to bed at night thinking you are worth something, and waking up the next morning only to find out that you have been basically wiped out. And there was nothing to be done about it. The whole family essentially lost everything it had. No telephone call could be made. No demand. Everything, as in EVERYTHING, was frozen by decree and you could only withdraw your government mandated allowance. It needs to be added that this individual is a gold owner now.

You also have a strong sense of gold's safe haven role among people of German descent in the U.S. whose family memory has never been freed of the Weimar experience. I have heard more than one story about Grandma telling the family of the wipe-out and how important gold ownership was to family wealth continuity. That's why to this day so many successful people of German descent are gold-owners.

http://news.goldseek.com/InternationalForecaster/1175709760.phpInternational Forecaster MidWeek Reading - Gold, Silver, Economy + More
Bob Chapman - TheInternationalForecaster.com
Posted Wednesday, 4 April 2007 -- Excerpts:
"US MARKETS

Free trade and globalization is the new imperialism, the re-colonization of sovereign nations. In America the ramrod for destruction of what has come to be known as the American system is the Council on Foreign Relations. They have been instrumental in the development of GATT, WTO, NAFTA, CAFTA, FTAA and now SPP or the North American Union...

The moment of truth for the dollar is upon us. We are looking at a classic reverse head and shoulders in the euro versus the dollar. This year and perhaps very soon, the euro will break out against the dollar and move into the $1.40 to $1.45 area taking gold and silver higher with it. This will be in part the markets reaction to duties on coated paper of 10.9% to 20.35 with a legion of other industries in tow. Steel will lead the pack. This will be accompanied by not only duties on China, but also all currency manipulators. This means that soon 80 on the dollar index will be tested and in all likelihood broken. The first stop is 78.33, then 70-75 with an ultimate goal of 45 to 55. Adding fuel to this fire is that the ECB and the Bank of England will be raising interest rates again in April or May. The selling we have seen in gold to interrupt its forward progress by what we suspect is a European central bank at $664 to $668 will soon be absorbed and gold will be on its merry way again. Business, economic, fiscal and monetary news has been manifestly bullish for gold and it is obvious that the central banks want to retard gold's upward movement, so that the world public, particularly the professionals, won't be able to use gold as a barometer to gauge economies and markets that are about to collapse around them.

This is extremely important. Slashdot and Cryptome report that the US Department of Homeland Security is demanding the master key for DNS root zone, a demand that has other nations deeply alarmed. With the master key, DHS would have control over the Internet.
The key will play an important role in the new DNSSEC Security extension, because it will make spoofing IF-addresses impossible. By forcing the Internet Assigned Numbers Authority to handout a copy of the master key, the US government will be the only institution that is able to spoof ID addresses and be able to break into computers connected to the Internet without much effort.

The issue surfaced at ICANN at a meeting in Lisbon, Portugal last Friday. The US media has not reported what the US is up too. They only reported on a proposal to create a domain specifically for adult web sites. The EU Commission said that the matter is being discussed with EU member states. Our DHS is itself sponsoring a campaign to support the implementation of DNSSEC. Autonomica of Sweden, which operates one root server, pointed out the political implications last year and said ICANN should be the supervisory functionality.
When other nations are worried, Americans, too, should be concerned. The Bush neocon corporatist fascist administration has demonstrated that it is unable to wield power responsibly. There is no question if DHS is successful in getting this key they will further expand their police state and publications like the IF will be banned."

http://www.bloomberg.com/apps/news?pid=20601012&sid=a9Jsqr2CXYdI&refer=commoditiesApril 4 (Bloomberg) -- Gold may exceed a 26-year high this year, driven by increased investor demand and declines in supply, London-based researcher GFMS Ltd. said in the 40th annual report on the gold market.

Demand from fabricators including jewelers, the biggest users, will keep the price from falling below this year's low, $602.46 an ounce in January, according to the report released today...

``It's quite possible we'll see an all-time high'' in 2008, GFMS Executive Chairman Philip Klapwijk said at a conference today in London. ``If we start 2008 above $700, then $850 isn't that far away for the speculators to go after.''

The metal may advance to $740 an ounce in the second half, exceeding the high of $730.40 last year, Klapwijk said in a phone interview from Madrid yesterday...

Investors will be attracted to gold because of ``global fears about the sustainability about the current state of affairs in the U.S. market,'' GFMS Chief Executive Officer Paul Walter said in a phone interview from Johannesburg today.

Iran's nuclear program will also prompt demand for a hedge because the solution will be military and not diplomatic, Klapwijk said at the conference today.

^___(from url)___^

R.

http://www.moneycontrol.com/india/news/fiiview/clsajimwalker/usmarketsheaded/market/stocks/article/274329Kinda happy about it isn't he.

http://www.gold-eagle.com/editorials_05/schicht040307htmlsnip:

People will not be able to spend one single cent without the Merchant of Debt knowing where it was spent, for what it was spent and how much it amounted to. People will not be able any longer to buy gold, silver or foreign currencies freely, as the Merchant of Debt will keep such unpatriotic electronic transactions blocked on his computers in the national interest, his interest! People will not be able to do anything, travel anywhere, transact anything etc without the Merchant's consent. In the same way business will be allotted dedicated electronic financial channels for all transactions. Every action will be registered and controlled

http://www.gold-eagle.com/editorials_05/schicht040307.htmlSorry.
Slingshot---<>

http://www.ecb.int/press/pr/wfs/2007/html/fs070404.en.htmlNow that the official numbers are in today, this post will build on the submission from last Friday's forum:
____________________________________________________________________________
TownCrier (3/30/07; 17:33:01MT - usagold.com msg#: 153867)
Today [Friday, March 30th] was quarterly MTM Day in Euroland

At the end of the previous quarter, Eurosystem gold reserves (11390.4 tonnes) marked at then market value of 482.688 euro per ounce dominated the international reserve portion of the balance sheet, totalling EUR 176.8 billion.

Today, the market value of gold weighs in at approximately 498 euro per ounce, a valuation increase of 3%. This stands against the slimmer 0.4% net tonnage decline (50 tonnes) that had occurred over the quarter -- up to but not including any gold operations of this current week.

As a result, despite (or arguably, as enhanced by) the Eurosystem's strategic trickle of gold reallocations, the gold market continues to enjoy robust gains, subsequently making the Eurosystem gold reserve even more strategically important (valuable) than they were during previous quarters.

By preliminary estimates, the valuation of these slightly lighter gold reserves has now risen to EUR 181.7 billion

And so we go, onward and upward, in the footsteps of giants.
____________________________________________________________________________

As it turned out, during that final week, there was a small flurry of gold activity among the Eurosystem central banks. Two members registered sales while another registered a purchase for a weekly transactional net decline of 273 million euro in gold reserves.

However, this was dwarfed by the revaluation effect as gold climbed over the quarter from 482.688 euro per ounce to the latest official book value of 498.198 euro per ounce, bringing gains of EUR 5.676 Billion to the Eurosystem goldpile.

Weighing in at a current MTM value of EUR 181.4 billion, Eurosystem gold reserves now enjoy an even more massive portion of total Int'l reserves.

Over the same 3-month quarter:
the value of each dollar in reserves has fallen from EUR .7593 to .7509
the value of each yen in reserves has fallen from EUR .006372 to .006356
the value of each SDR in reserves has fallen from EUR 1.1416 to 1.1343

Including the effects of net transactions and a general revaluation loss of approximately EUR 1 billion, the Eurosystem's net position in foreign currency is only EUR 144.7 billion.

Thus, the gold component of their Int'l reserves now stands at 55.6 percent of the total -- nicely (and not accidentally) up from the 30% level at which the Eurosystem was launched back in January 1999.

Footsteps... can you follow in them? Choose your savings in yellow!

R.

Sorry, I asumed everyone
on board is one hundred
percent invested in gold and
silver... :-) ... Where else
do you park your extra?
Keep it going. You are a
valuable contributer here.OvS

Probably not if you do not visit flea markets/swap meets.
This may not mean anything for you can just about find anything you want at one. I have been going for years. It's a good way to exercise and talking to a few of the regulars you find a pulse of the market. Yes, the coin dealers are still active. But things have changed as high ticket items are for sale. Ski Doos, Cars, Name brand tooling,furniture, RV's motorcycles. China flooded this market with cheap items and if you have been to the Daytona market, it became filled with people filling a nitch. Same here in north Florida. That is, it's all over as the novelty of buying novelty items has declined. Sure there are booths doing business. There has been a shift. Meaning that Joe Sixpack is struggling in one form or another.

Does anyone go to auctions? That may be another indicator.

The flea market is the bottom of the barrel. As people seek bargains instead of going to Wal-Mart consumer buying may not be as strong as stated.
What has this to do with gold? Joe Sixpack will not have it in his plans and in so may be doomed to the ravishes of inflation. I think also there will be a huge attempt to throw of debt or consolidate expenditures.
Slingshot-------<>

Building on your post...

"Thus, the gold component of their Int'l reserves now stands at 55.6 percent of the total -- nicely (and not accidentally) up from the 30% level at which the Eurosystem was launched back in January 1999."

Please note that on 3/7/07 the percetage of the ECB's total reserves in gold stood at 54.9%. That is a 0.7% increase in the last 30 days.

I will leave future trend analysis to everyone with a calculator.

Tick tock.

PA

@ Slingshot,

I don't frequent swaps or flea markets too often, but the best example of the recycle trend is that stellar survivor of the dot.com boom, eBay!

Their business just keeps growing, as Joe and Jane six-pack unload their unwanteds, and many even pick up a few bucks flipping collectables.

I sometimes bid on motorcycle parts, if I can get them at a bargain-basement prices. More and more, however, I'm watching the bidding exceed my pre-established limit. Even dealers get into the fray, as they often find overstocks for less than dealer wholesale.

http://quotes.ino.com/chart/?s=NYBOT_DXUS $ Index (NYBOT : DX) 8.29
Click link while the plunge is still showing

Ouch 74 point drop. :) Hmmm...

Right now I am seeing a 90% drop in the dollar on INO's charts. Can anyone confirm if this is an error or not?

Probably is an error unless some people are dropping the dollar in response to an coming attack on Iran Friday??

Not showing up on NetDania, so I suspect it's a decimal point error, a la 8.2 in place of 82.

-G'lox

That's right, "We'll just move the decimal point
one or two places and all our deficit problems will be solved!" $1.00 = $.10? Someone at INO practicing? ;)

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

April 4 (MarketWatch,Reuters) -- Gold futures climbed Wednesday to close at a five-week high, underpinned by weakness in the dollar and physical demand, even as Iranian President Mahmoud Ahmadinejad triggered a decline in crude-oil prices by saying captured British sailors would be freed.

"Gold bullion received quite a surprise vote of confidence during Wednesday's trading session," said Kitco's analyst Jon Nadler in e-mailed commentary. "Just when the bulls expected to see a large decline in prices due to the resolution of the Iran-U.K. crisis, they instead got their long-standing wish of seeing gold surpass $672 per ounce come true."

The COMEX June contract rose $7.70 to close at $677.40. It climbed to $681 earlier, its strongest intraday level since March 1.

"The current rise in the gold price is overdue, but overhead resistance got in the way," said Julian Phillips, an analyst at GoldForecaster.com. "It is now out of the way so the jump is happening now. This is caused not solely by the situation in Iran but a combination of factors," he said in e-mailed comments.

The factors include the fall in the dollar and expectations for more declines, oil prices holding above $60 a barrel, strong physical demand for gold at just under $660 and overall "global uncertainty," especially in the Middle East, he said.

Indeed, "there has been an aggressive shorting campaign to keep gold below $666," said Peter Grandich, editor of the Grandich Letter, in e-mailed comments. But "like all previous capping exercises, this one is failing also thanks to an incredibly strong physical market."

The dollar fell against the euro and yen Wednesday after reports showed non-manufacturing sectors of the U.S. economy expanded at a slower pace in March while factory orders rose less than forecast in February. The weakness in the greenback helped fuel investment demand for gold.

Greg Weldon, chief executive of weldononline.com, said in a note that gold was appreciating against most all paper currencies and asset classes, helped by expanding U.S. bank credit and the fact that the European currencies continued to rise against the dollar.

Precious metals consultant GFMS Ltd. said gold prices will set a record high this year in terms of their annual average and may scale new absolute peaks on a weaker dollar outlook, a slowdown in the U.S. economy and geopolitical tensions.

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

Would not be surprised to wake up one day and find that "gold" is now spelled "groceries".......

8^)

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sIT is an ERROR, but what IT were REAL ?
A little after 5 pm EST and the BOTTOM drops out of your US$ fortune ---- not even a chance to do anything about it either !! --- Don't think it could not happen here !
IT HAS happened to many other people at numerous times !!
IT has happened to me too. (when I had a large business investment in Thailand in the mid 90's, and OVERNIGHT the Baht devalued and was only worth half it's previous value)
There went my investment !
Remember -- Yellow in the hand is REAL !
gw

.... and raise you a....

COMMA!

http://www.nymex.com/media/delivery.pdf"Again", when it would be of interest to compare the daily delivery number with PoG action, we are stymied by them failing to update the page.

On purpose? ...just plain ornery ...or maybe simply forgetful!

http://www.indiaenews.com/middle-east/20070404/45848.htm US to attack Iran by end of April: report | Xinhua | Apr 4

http://www.bloomberg.com/apps/news?pid=20601009&sid=aszosOrxVmjk&refer=bond Overlapping Subprime Exposure Mask Risks of CDO's, Moody's Says | Jody Shenn | Bloomberg.com - Bonds - Apr 4
"Structured finance CDO's also may contain bonds backed by credit-cards and auto loan paymemts."

http://www.netdania.com/ChartApplet.asp?symbol=EURUSDis approaching its previous "line in the sand" at 1.35, currently around 1.343

got infected yesterday ..........had to spend 4 hours trying to download Antivirus .......

Inoperable .......

So I dumped my system and restored to original state.....
With restore discs that came with major Virus outbreak that came two springs ago.

It's the insurance racket(eering) allover again applied to Computers; Virtual Insurance .....Gates JOKE...
Perhaps he'll find an EGG for Easter .....or he will have
a Spiritual Epiphany ( I will pray for that).

My antivirus is working fine now .......for three months

Got to start working on my taxes now
perhaps a little poker ....

Gold ........seems to have been developing some INFECTIOUS SUPPORT ......

NIce

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sHow far is the dollar going to drop today???

Right now, the index is at ~ 82.65, and dropping.

SF

@ Cometose,

My sympathies indeed . . .

My new Intel core duo Mac Mini (for less than one golden oz) is on the UPS truck, headed this way. I can't wait to set it up, as my trusty 400MHz "Blue and White" is just working too hard to keep up with all the Java and video content on the web these days!

They say I can run Native XP on it, although horror stories like yours remind me that the "Natives are still restless".

(:^) G'lox

Is on fire..........the last couple of weeks ...
quite interesting ......It seems there's a lot of buying going on .....irregardless of the swings in the Gold price .


It may be a tell tale sign and a leading indicator.....
because of not only .......the launchpad we are apparently on but also

a sign post of Pre Launch Rush .......that is showing here because of the the double hedged punch that CANADIAN COs are going to get if we have precipitous move in
Herr Dollar.

http://www.usagold.com/gold/special/dutch2.html

April 2007 Buyers' Group

Dutch Gold, Bullion Pricing!

http://www.usagold.com/live.htmlToday we are launching an important, new page.

USAGOLDLive!

[Please go to the link above.]

This page offers real time precious metals quotes, oil and currency
quotes. It updates automatically while your session is in progress. It
also offers a live gold graph with many features including various time
scales, chart types and analytical tools.

We welcome your visit to our new page and would appreciate any feedback.

cpm@usagold.com

Remember, it is your patronage of USAGOLD-Centennial Precious Metals
that makes services like our Live! page possible.

Please contact us for your next gold purchase or for quotes and further
information.

USAGOLD-Centennial Precious Metals
Your friend in the gold business since 1973

1-800-869-5115
Extension #100

http://www.prudentbear.com/articles/show/1955Guest Commentary, by Krassimir Petrov
Effects of inflation | April 5, 2007
Krassimir Petrov, Ph. D. is a professor at the American University in Bulgaria

This is a summary of my own research and compilation over many years of the various effects of inflation. Some of these are widely recognized in mainstream economics, some are elaborated by the Austrian School, and some are rarely mentioned or not even acknowledged. Watch the 60 min. video for a concise explanation of each.
Watch the Video at http://video.google.com/videoplay?docid=-6484061137769305763

SUMMARY
No positive social or economic effect
Increase the level of prices
Distorts relative prices
Creates risk and uncertainty
Income diffusion effect � early comers gain at the expense of late comers
Benefits inflators (inflators=recipients of the inflation tax)
Hurts fixed income groups
Hurts existing creditors
Hurts all holders of money � Inflation Tax
Increases the consumption-investment ratio
Lowers national savings
Reduces economic growth & standards of living
Creates illusion of increased business profits
Consumes capital
Imposes "menu costs"
Imposes "shoeleather costs"
Causes a bracket creep
Creates Malinvestments
Causes Business Cycles
Causes currency debasement = currency devaluation
Causes more expensive imports
Strengthens industrial cartelization (predominantly for inputs/resources)
Causes speculation and bubbles

After three weeks of short-covering in the USD, State Street Global Markets sees aggressive selling of the greenback in its prop data. Six-month USD flows have fallen to the 18th percentile -- meaning flows have been higher 82 percent of all previous 6-month periods -- the lowest since late January, SSGM says. The macro strategy team at the bank has its largest short USD position in its portfolio of recommended trades since April 2005. Furthermore, SSGM data shows persistent selling of Treasuries by real money even during the surge in risk reduction in late Feb and early March. "Institutional investors are selling US assets and are showing no signs of stopping anytime soon," SSGM says.

Also, 60-day equity flows into the United States have been higher in 99 pct of previous 3-month periods in the decade-long history of the data. SSGM's equity strategy team is sticking with an underweight US position in its model portfolio, which was established in Sept 2006. "Institutions are shunning the UK, US and Pacific ex Japan and flows are accelerating in Europe ex UK and Japan," State Street says.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/04/cnusmort04.xmlUS Home Loan Woes Threaten Debt Crisis By James Quinn, Business Correspondent - Last Updated: 1:01am BST
05/04/2007 -- Excerpt:
"A leading fund manager has warned the continued collapse of the US sub-prime mortgage market is likely to lead to a "massive" rate of defaults in certain parts of the CDO market.
Francois Bartholemy, a senior fund manager at F&C Partners, believes the market, once famously described as "toxic waste", will be severely impacted by the current problems in the US.
The CDO - or collateralised debt obligation - market is worth more than �2,000bn globally.
A CDO is basically a pool of different types of debt which is sliced into portions of -varying risk and return to appeal to a broad range of investors.
Typically investors tend to be traditional institutions such as fund managers, as well as hedge funds.
They are a key part of the investment cycle, as they are commonly used by investment banks to slice and repackage balance sheet risk.

A series of defaults in the CDO sector could have a knock-on effect for other parts of the market - and trigger serious losses in certain quarters.
Mr Bartholemy warns: "Given the amount of sub-prime loans issued last year, and that a lot of that ended up in the CDO market, it could have a large impact.
"I think there will be a -massive rate of default of CDOs which have invested in sub-prime mortgages."

He believes that certain parts of the market could be in danger: "We think the CDO market has been used as a depository for weak credit, in fact the weakest credit.
"Not all CDOs are bad, but bad credits do tend to end up in CDOs. In particular, in the US sub-prime mortgages have found a home in the CDO market."

He also warned that although the risk is present, it may take some time to trickle through and create defaults.
"Part of the market is not reflecting what is going on in sub-prime in the US. There are a lot of good CDOs - particularly those that invest in European corporates - but those who are not aware of the structure may end up owning things that they do not understand."

He also predicts that the sub-prime problem is likely to worsen as US home-owners begin to be faced with higher rates: "The 2006 vintage of sub-prime mortgages have not yet adjusted to interest rates," he says, because most such mortgages tend to start with a low introductory rate which is subsequently increased.
"But even before that adjustment has been made, they're already experiencing levels of default that are unprecedented - with 5pc-10pc late payment of interest. And that's before interest rates ratched up, so expect late payment to go up a lot more."

The US sub-prime mortgage crisis has already had a serious impact on both sides of the Atlantic, hitting banks such as HSBC hard, and leading to the -collapse of a number of sub-prime specialists such as New Century Financial, which was once the second largest sub-prime lender in America."

The new live quotes page is a nice touch indeed! Many thanks to CPM/USA and their Web team for the great new page and for this site in general.

- Survivor

(...ie: a Comex chit with "gold" written on it) can't find a meaning for it's existance at present. Whilst it ramps up nicely in $, A$, and Y, she's struggling against the rest!
Comex del'y finally updated and we'd be tentatively expectant of >$700 next week on anticipation of a +12K month...
...but REALLY speaking, Gold, or pricing thereof and thus value perception, remains firmly a controlled substance.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=TYXY&a=D&z=610x300&d=LOW&b=LINE&st=We're at crossed purposes in this the first week of April and I think a Bond reversal is imminent.
We'd be also looking at a SM rout, Buck down and PoG up.
Didn't happen last week ...maybe next!

http://ca.news.yahoo.com/s/capress/070405/business/barrick_gold_novagold_1Barrick Seeks to Sell Shares
in Former Takeover Target

By Canadian Press
via Yahoo News
Thursday, April 5, 2007

TORONTO -- Barrick Gold Corp., the world's largest gold producer, says it intends to sell its shares in failed takeover target NovaGold Resources Inc., a stake worth nearly $273 million at the latest stock price.

Toronto-based Barrick said late Thursday it "intends to explore opportunities to dispose of all or a portion" of the 13.6 million NovaGold shares the company acquired last year in its failed bid to take over the Vancouver junior gold explorer.

Barrick had wanted to acquire NovaGold's Galore Creek copper-gold-silver project in northwestern British Columbia, where construction is expected to begin this spring at a projected cost of US$1.8 billion.

In addition to Galore Creek, NovaGold owns a 70 percent stake in Donlin Creek, a promising Alaska gold project described as one of the largest undeveloped gold resources in the world. Barrick holds the remaining 30 percent.

NovaGold had urged shareholders to spurn Barrick's hostile US$1.7 billion offer, calling it inadequate and opportunistic.

At the end of Barrick's failed bidding attempt last December, the company had acquired only 13.6 million shares, making it NovaGold's largest single shareholder with 14.8 percent of the stock.

At Thursday's closing NovaGold share price, the Barrick stake has a current market value of $272.7 million.

Earlier this year, NovaGold said it expects to begin Phase 1 construction, building access road, tunnel, and power lines soon and have the Galore Creek project completed by 2009 with production beginning in 2011-2012.

Galore Creek will be developed as an open-pit mine at a 65,000 tonnes-per-day processing rate over a minimum 20-year mine life.

In trading Thursday on the Toronto Stock Exchange, NovaGold shares fell six cents to close at $20.05, while Barrick stock fell 27 cents to $33.71 in trading of more than 2.5 million shares.

http://www.forbes.com/business/feeds/afx/2007/04/05/afx3586352.htmlSilver 'Significantly Overvalued,'
Investment Bank Fortis Cautions

By Angel Maytaal
AFX News
via Forbes.com
Thursday, April 5, 2007

LONDON -- Silver is "significantly overvalued" and should retreat below 10 usd an ounce in the longer term, investment bank Fortis said in a monthly review of the metals market.

The bank said while a weak dollar and "investment marketing froth" might lead the metal toward the $15 an ounce level in the short term, this will not be sustained in the longer term.

"Reports from India suggest this key physical market may be growing disenchanted with silver jewellery. Meanwhile new mine supply ... is rapidly increasing," said the bank.

It noted Indian demand for silver slipped last year. Citing a report in India's Financial Express, the bank said demand for silver jewellery fell 33 percent last year while demand for silver for all fabrication purposes fell 9 percent.

At 1.30 p.m. spot silver was quoted up at $13.57 an ounce against the $13.56 level seen in late New York trades yesterday.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1610364.eceNew Century Collapse Sends Shockwaves
Through Wall Street's Biggest Lenders

By Robert Lindsay
The Times, London
Wednesday, April 4, 2007

Goldman Sachs has emerged as the single biggest creditor of New Century, the American sub-prime mortgage lender, which filed for Chapter 11 bankruptcy last night, after writing $60 billion (£30.4 billion) of American home loans.

Barclays, the British bank, is at No. 15 in the list of top 50 creditors.

HSBC, which is already directly exposed to turmoil in the sub-prime market through its US sub-prime lending subsidiary, is at No 22.

Although the amounts that the banks are owed are not revealed in the New Century's Chapter 11 filing, analysts believe that Barclays has lent about $1 billion to the collapsed bank and had been seeking to withdraw its loan before yesterday's bankruptcy.

The creditors' list is a who's who of Wall Street bankers, with Credit Suisse at No. 2, Morgan Stanley at No. 4 and Deutsche Bank, Bank of America, UBS, and Lehman brothers also in the top 10.

Worryingly for the health of the entire US sub-prime market, Countrywide Financial, another sub-prime lender, is the No. 10 creditor.

Shares in Countrywide, America's biggest mortgage lender, were hit last night by growing fears over sub-prime lending and it emerged that two directors had quit its board.

Kathleen Brown, who is also a Goldman Sachs executive, left late last Friday without any explanation. Michael Dough-erty, another board member, is not standing for reelection at the company's next annual meeting.

New Century was the one of biggest sub-prime lenders in the United States, originating $60 billion in mortgages last year, second only to HSBC. It is unclear how much creditors will recover in the bankruptcy proceeding.

The company has said that it had $17.4 billion in credit lines from investment banks, but most of those debts are secured on New Century's loans to customers, which are of uncertain value. Creditors such as Barclays, which declared New Century in default this month, had begun to seize the loans or auction them off in the past two weeks.

The demand for these packages of loans and the price that they receive will indicate how much creditors such as Goldman and Barclays will have to write off.

Barclays said: "The vast majority of our exposure to all US sub-prime lenders is fully collateralised and short-term, pending distribution. We do not anticipate any material losses to arise from our exposure to the sector."

In the front line:

1. Goldman Sachs Mortgage Co.

2. Credit Suisse First Boston Mortgage Capital LLC.

3. Credit-Based Asset Servicing and Securitization LLC.

4. Morgan Stanley Mortgage Capital.

5. DB Structured Products.

6. Deutsche Bank.

7. Bank of America.

8. UBS Real Estate Securities.

9. Lehman Brothers Bank FSB.

10. Countrywide.

11. Citigroup Global Markets Realty.

12. Residential Funding Corp.

13. SG Mortgage Finance.

14. IXIS Real Estate Capital.

15. Barclays Bank.

http://www.theglobeandmail.com/servlet/story/LAC.20070330.RTICKER30-3/TPStory/Barrick CEO Got Big Boost
in Compensation in 2006

By Andy Hoffman
The Globe and Mail, Toronto
Friday, March 30, 2007

Barrick Gold Corp. president and chief executive officer Greg Wilkins' pay package nearly doubled to US$9.4 million in 2006, a year that saw the gold giant's share price lag the increase in the price of gold. The mining executive took home $1.2 million in salary, a $3 million bonus, $1.7 million worth of stock options, and $2.65 million in restricted share units, according to a filing with U.S. and Canadian securities regulators. Including $707,381 in company contributions to his retirement plan, Mr. Wilkins' compensation totalled $9.4 million last year, a 90-percent increase from $4.9 million in 2005. Spot gold prices rose 30 percent in 2006, and Barrick shares 13 percent. ...

Why do i get the distinct impression that buing Ag at 12$ the ounce in 2007 is equivalent to buying it at 4$ the ounce in 2000? "Faster faster," shouted the Red Queen, "or we'll never keep up!"

It certainly isn't a "better" ounce, nor in any way "improved" hedonically or otherwise, and the petrol isn't any "better", sulfur or no. In fact the CRB isn't a more "flavorful" index nor is it now more "nutritious" after numerous re-formulations.

Today's gold prices are just as outrageously "cheap" as they were back in 1999. Only the average paycheck hasn't kept up.

Sir Mikal, I have no idea what menu costs or shoe leather costs are, unless this entire gold cheering is costing the castle a pretty penny by forcing the proprietors to keep changing the numbers on the markee. Perhaps their shoes will wear out with all the walking.

I suppose the only workout the puter gets around here is choking on DigiPan 2.0, as if squeezing bits from the noise were different than squeezing dollars from derivatives. (the one is honest, the other is asymetric regauging.)

@ Sundeck,

"Part of this increase in the floor is due the eroding value/credibility of the dollar, and another part is the genuine supply/demand fundamentals"

Basically, silver was stuck in $4-5 sideways movement for a LONG time.

So, just for funsies, applying the post-911 liquidity guestimated 10% per annum inflation to the PoS over the last 7 years yields the following snapshot (my sci notation is probably incorrect):

$5 x (1.1 E6) = $7.32

ROUGHLY 57% of silver's $13.50 can be attributed to monetary devaluation, with 43% left over for fundamental and/or spec-driven increases.

Gold, as I posted earlier, began its assent earlier, in 2001, so applying the same guestimated inflafla yields:

$250 x (1.1 E6) = $443

ROUGHLY 66% of gold's price can be attributed purely to monetary devaluation, with 34% left over for fundamental / spec causation.

These are based on very rough estimates of monetary inflation, and a lot depends on the point at which you begin to apply the multiplier. I have actually seen higher numbers for monetary growth (13%), but the more conservative 10% allows that some of that growth was real rather than purely inflationary.

As PA quips, I may be wrong. . .

U.S. Treasuries Fall as Economy Adds More Jobs Than Forecast - Bloomberg (04/06/2007 7:54 AM)
Initial Jobless Claims in U.S. Rise More Than Forecast to 321,000 Filings - Bloomberg (04/05/2007 8:10 AM)
Start saving, a new period of 'stagflation' may be just around the corner - Boston Globe (04/06/2007 8:25 AM)
Stop Inflation - Newsweek (04/06/2007 6:06 AM)

Total, Shell Chief Executives Say `Easy Oil� Is Gone - Bloomberg (04/05/2007 5:05 PM)
Navigating the Hedge Fund Maze in a Leveraged World - NY Times (04/06/2007 5:47 AM)
Pink slips litter loan industry - LA Times (04/06/2007 8:20 AM)

Citigroup tightens mortgage lending standards - Reuters (04/06/2007 6:01 AM)
Foreclosures weighing in - Dallas MN (04/06/2007 8:23 AM)
Citigroup to Get 950 Billion Yen From Japanese Banks - Bloomberg (04/06/2007 5:42 AM)
U.S. Plans WTO Case Against China on Movies, Books - Bloomberg (04/06/2007 6:00 AM)

http://federaltimes.com/index.php?S=2670900snip:

Agencies with the biggest budgets are the least transparent when it comes to explaining their results to the public, according to a study released April 3.
The Mercatus Center at George Mason University, a government watchdog, has analyzed the annual performance and accountability reports issued by 24 major federal agencies for the last eight years. The group rates whether the reports are easy to find and read, communicate the benefits of agency work and help drive management changes.

Nearly 90 percent of federal funds in 2006 were spent by agencies with unsatisfactory performance reports, according to Mercatus. The four lowest-ranking agencies alone � the Office of Personnel Management and the Housing and Urban Development, Homeland Security, and Health and Human Services departments � accounted for almost $800 billion in federal spending in 2006.

That's a problem since trust and transparency are essential in a democracy, said Comptroller General David Walker at a press conference announcing the results.

"Transparency encourages positive results, discourages abuse of power and facilitates public accountability," said Walker, who heads the Government Accountability Office. "In most cases we have no idea whether programs, policies or regulations demonstrate any results.

The Mercatus ratings paint a dimmer picture of government accountability than the Office of Management and Budget's Program Assessment Rating Tool (PART). Less than 6 percent of federal spending that has been analyzed through the PART tool has been rated "results not demonstrated," according to Mercatus research. But almost 80 percent of federal spending analyzed through the Mercatus process failed to communicate public benefits for government work.

-Goldilox

Shades of Catherine Austin Fitts - whodathunkit?

http://news.bbc.co.uk/2/hi/business/6528797.stmsnip:

A coalition of civil rights groups in the US has called on sub-prime lenders to stop repossessing borrowers' homes.
They want a six-month moratorium on foreclosures and say the industry should move borrowers onto loans with more favourable terms.

Sub-prime lenders provide loans such as mortgages to people with poor credit records, but they tend to charge higher rates of interest.

US sub-prime lender New Century filed for bankruptcy protection on Monday.

'Reckless and unaffordable'

The civil rights groups say that a predicted wave of foreclosures stems from "reckless and unaffordable loans", for which the lenders must bear some responsibility.

Without intervention, sub-prime foreclosures will impose the greatest drain on African-American and Latino wealth ever experienced in this country
Hilary Shelton, National Association for the Advancement of Colored People

The National Council of La Raza, which campaigns on behalf of Hispanic Americans, says the problem is that most sub-prime loans start with favourable fixed interest rates that later change into adjustable-rate mortgages.

The group says that higher risk borrowers should be moved into sustainable 30-year fixed rates.

Adjustable rates have caused particular problems following two years of interest rate rises from the Federal Reserve between 2004 and 2006.

The slowing housing market has also reduced the amount of new business for sub-prime lenders.

-Goldilox

Sub-prime failures are being politicized, for what it's worth.

http://www.iht.com/articles/2007/04/05/bloomberg/bxinvest.phpsnip:

Gold fund to trade on Osaka exchange

Osaka Securities Exchange, which operates the second-largest Japanese stock market, may list an exchange-traded gold fund as early as this month as it taps rising interest in commodities from investors looking to diversify their portfolios.

The fund, which is linked to gold prices, was being created by one of the largest investment trusts in Japan, and would have net assets under management of �3 billion to �5 billion, or $25 million to $42 million, said Kotaro Yamazawa, an executive at the exchange.

Rising commodity prices have stirred institutional and retail investor interest in the sector, and has led to an expansion in exchange-traded funds, known as ETFs. Gold prices reached a 26-year high of $730.40 an ounce in May 2006, while futures prices for the metal on the Tokyo Commodity Exchange reached a 21-year peak Feb. 26. The Osaka exchange would be the first in Japan to introduce an ETF for gold.

"Listing gold-linked ETFs in Japan will allow institutional investors more opportunities to meet their hedging needs, and may get more individuals interested in gold investments," said Masaaki Nangaku, the chairman of the Tokyo Commodity Exchange.

-Goldilox

Another large fund wants to capitalize on the growing popularity of the "barbarous relic". I guess the investment community needs to convince more people that "paper gold" is "as good as gold", but behind the curtain, it probably means they need additional ammo to continue suppressing the gold price.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=iIt looks like the TPTB took the days slow trading to make up for yesterdays losses.
This would'nt be manipulating would it? Oh no, they don't do that do they?

http://www.marketwatch.com/News/Story/Story.aspx?guid={2CECF2CE-B6E0-43CC-8D89-97C1BF952242}&siteid=mktw&dist=bnb American Home Mortgage Cuts Profits Forecast
Warning suggests subprime woes spreading to other home loans - Alistair Barr - Marketwatch - Apr 6 07

China gets some Iraq contracts.
You know, to do economic analysis on globalization without a frank look at the part jews play is limiting. There is no getting beyond that limit unless one is willing to research the struggles between factions of globalists. Putin referred to Russia as "Carthage" recently.
Putin is now surrounded by "extreme conservatives" according to Russians who support the present Russia with Putin. Those Extreme conservatives are deeply suspicious of other countries because many of them are run by groups of families. 50 or so in Iran, 50 or so in isreal, and on and on in other countries. By conservative, they mean those that are deeply suspicious of the actions and intents of other self interested groups. At one point, Rome had assimilated Goths into its army. And Goths were also in Rome itself. After 2 major defeats, includeing one where the emperor was killed, Rome had its armies kill all the Goths in its forces. And they killed all the Goths in Rome. Goths were Goths and didnt assimilate into Roman culture totally. Russia conservatives view themselves in a similar situation with 2 kinds of goths. Globalisation is threatened by the same old divisions as always. We do the -birds of a feather- thing, and break apart. How can globalization work without a strong tyranny in the long run?
Short of -kingdom of heaven-, on earth, how do you escape the rule of the elite in the long run? Or even for a short while? Even the constitution is under assault.
I asked my wife if -peace on earth- would be too boring, she said no. But, looking at the shows she watches on tv, they are all heavy in drama and misbehaviour and violence.
So, I do not belive she is right. The new money has threads in it that are able to be picked up by types of radars, or eletromagnetic fields. Cash is findable. Gold is not.

http://www.rumormillnews.com/cgi-bin/forum.cgi?read=102237A post that tells it like it really is. What's really going on in the good 'ole US of A.

"I can sympathize with the frustration anyone feels about the various economic crises going on in America today and I don't know what the solutions might be. I have no expertise in this area but a few things come to mind. Questions more than answers.

1. Multinational corporations control the government

First, it seems to me that more and more these giant multinational corporations control the government now far more than the "people" or their representatives. They have no allegiance to any country, only allegiance to profit and power. This is the "military-industrial complex" Eisenhower warned about so long ago.

When I was growing up the "liberty" and "democracy" of America was directly equated to "free enterprise system" and "capitalism." That translated to a system of corporations and now those corporations have us by the balls.

2. Lower standard of living

The thing no one wants to talk about is the possibility that Americans are going to have to accept a much lower standard of living than they have been used to. For a century we were on top of the world. Now that is changing and people are angry.

In our capitalistic system it simply good business practice to move production to where labor is the cheapest. That's how competative capitalism works. So our jobs are flowing out of the country like a river to places where people can exist at a much lower standard of living, like India. In a way, this seems only fair.

Americans can complain but are they willing to live at a lower standard of living to keep their jobs and their homes? If not then the nation is no longer competitive and the lower standard will be forced on us anyway.

3. The rich ARE getting richer

We accept a system of usury by which anyone who is rich automatically gets richer without lifting a finger. World usury has reached obscene proportions. It guarantees the rich get richer and the poor get poorer.

People are now losing their homes due to voracious usury. If we don't like it we must reexamine the whole system.

4. Self destruction of capitalism

Didn't Karl Marx predict that capitalism would devour itself? If corporations finally suck up all the wealth and the people have no money, who's going to buy all their stuff?"

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

Please notice how the poster of that opinion at rumormillnews.com FAILS to notice the outstanding, fundamental and controlling factor in all the declines we are witnessing today:

"That we do not use true money in the world today; we use fiat money."

Everything else is connected to this fact, it is the root problem. But, it is suprising how this FACT eludes so many people. They can think of everything but that. This is very curious!

The quality of money is ignored. Rather like breathing CO, one is not conscious of the deadly effects. The brain just goes to sleep.

Or, rather like talking about that strange phenomenon the Ocean Tides, and ignoring the MOON.

People are funny!

SIERRA

@ Contrarian,

"If corporations finally suck up all the wealth and the people have no money, who's going to buy all their stuff?"

Walter Reuther once quipped something like that to Henry Ford.

"If you don't pay your workers a living wage, who's going to buy all those cars?"

Unfortunately, the end result of Weimar was Facism, where the government was the customer and implements of destruction were the major product. Not a healthy scenario at all.

http://www.foxnews.com/story/0,2933,263966,00.htmlWhy the U.S. No Longer Leads
By Jonathan Hoenig - AP - April 7
Excerpt: "It's no coincidence that the underperformance of U.S. markets began not long after the passage of Sarbanes-Oxley, a comprehensive suite of anti-business legislation cooked up in the wake of the Enron scandal. Instead of merely prosecuting the tiny minority of businessmen guilty of a crime, the government burdened all businesses with a slew of regulatory hurdles that have dramatically increased costs and undercut competitiveness. Not surprisingly, more corporations have decided to leave the public markets, or in many cases, the United States altogether.

But it's not simply legislation that is retarding the U.S. economy, but the philosophy from which it stems. After all, America's historical economic dominance hasn't come from vast natural resources, but the productive talents of profit-seeking individuals. Yet that's exactly what Sarbanes-Oxley, along with so many other elements of today's political environment, seeks to diminish.

For example, take the recent outrage over the so-called "income inequality" gap that separates the rich and poor. To varying degrees, both political parties support programs either to aid lower income workers or punish those who make more.

This sort of class-warfare is diametrically opposed to the foundation of individual achievement on which this country was based. In a free nation, one is permitted to rise as high as his ability will allow. The fact of the matter is that some folks are simply more productive than others. It's the free market, not the government, which should determine how much anybody gets paid.

Wealth is created by the productive efforts of hardworking businessmen. It is not "taken" from the poor. Yet, now we permit the government to regularly redistribute lawfully earned profits in a more "fair" manner. Private earnings have become "public" property to be passed out based on the prevailing political winds.

The distrust of achievement prompted society to expect government to function as a free-for-all service provider charged with everything from running schools to pioneering hydrogen fuel cells to supporting the price of sugar. From drug research to onerous gas taxes, the "free market" barely even exists.

You need not be a millionaire business owner to relate. Look around: from the now-ubiquitous smoking bans, to prohibition on Internet gambling and reproductive rights, we've come to accept that politicians, provided they get enough votes, can do just about anything they damn well please. Democrats and Republicans are equally guilty: both appear perfectly willing to substitute a constitutional republic with institutionalized mob rule.

The honest businessman, per usual, has become the most obvious target. And until that's changed, the economy and country at large will continue to be left far behind."

In times like now /extreme market movements I find great comfort in going back to read Another {thoughts} page 4 and think to myself, it's all happening just as he said it should giving it time. Just follow the Yellow brick road and no harm will come to your pocketbook.

Methinks Mr. Hoenig doth protest too much .....

Item :-
"The fact of the matter is that some folks are simply more productive than others. It's the free market, not the government, which should determine how much anybody gets paid."
This coming from the "managing member at Capitalistpig Hedge Fund LLC". I wonder just what he is producing ?

Item :-
"we've come to accept that politicians, provided they get enough votes, can do just about anything they damn well please. Democrats and Republicans are equally guilty: both appear perfectly willing to substitute a constitutional republic with institutionalized mob rule."
That's funny, I thought it was institutionalized corporate rule.

Oh, there's the odd grain of truth here and there, but he strikes me as a whinger who's miffed after having done his taxes. (Yes, just ten days to go ....)

Ah, well, back to TurboTax. Shame there's no deduction for financial intelligence - buying a car gets me money back but buying gold .....?

C!

C!

C!

You're right, working a hedge fund is not productive in the usual sense but their is something to be said for someone who's not afraid to call himself a capitalist pig, yes?
Any free market exhortations gain added weight with such finance industry perspectives IMO. Especially today with such things as accounting scandals, offshoring, options backdating fraud, allegations of undue corporate lobby influence on politicians (and gov't) and monopolistic takeovers sullying the concepts of fair trade, free enterprise and local business.
Re: "institutionalized mob rule"- I interpret as 'institutionalized mafia rule' in the context it's used.

http://money.cnn.com/2007/04/07/news/international/trade_china/index.htm?section=money_topstories Report: U.S.�to file�piracy case against China - CNN/Money
April 7, 2007
As it's said "likely to escalate trade tensions", why isn't the press asking how it came to this.
This year seems patterned after several other event-filled years, not just one.

It may sound strange, but Jonathon Hoenig was a Goldbug and very much a proponent of owning physical gold when the gold bears like Andy Smith and Ted Arnold were featured in the financial media. In the early days of FOX network's "Cashin In" he would always hold up a one ounce gold eagle round and look right in the camera and say "buy gold". He was right because this was when Gold was at it's bottom well below $300/oz. He hasn't been hammering away that message much these days but he held up well against the other panel members on the show including Wayne Rogers and Dagen McDowell who almost would foam at the mouth at any suggestion of owning gold. I think we all know who came out looking like a genius and who came out looking like fools.

- Black Blade

@mikal,

'As it's said "likely to escalate trade tensions", why isn't the press asking how it came to this.'

Which press would you think this interests more - the Murdocks, Hearsts, Knight-Ridders, or the Luce's?

These folks have billion dollar empires to manage, so they're not in a hurry to investigate "their neighbor's empire". The independent press writes about this stuff all the time, but of course, we are programmed by the corporate press not to pay attention to any of them, as they "may have an agenda" beyond being "fair and balanced"- HaHa!

Next time you visit a non-corporate coffee shop (if you ever do), check out the local "independent" press. They may very well have an agenda, but just try and find a press outlet that doesn't. To ignore all press outlets with an "agenda" is to ignore ALL press outlets.

All press has an agenda, so the trick is to identify the agenda and recognize the point of view it's coming from. Once that is accomplished, with reasonable filters in place, much can be gleaned from the content of any "independent press", no matter what their "leanings" might be.

Good post. Hoenig's name rang a bell when I posted his article. It now occurs to me that you posted about him years ago at least a couple times in a favorable light.

Well said. I have been reading independent press for over 30 years.
Barnes and Noble bookstore used to carry the magazines The Free American and Media Bypass and a great alternative newspaper before somone became 'offended'. The Utne Reader and Nexus magazine are still available but not as good, as are many 'pseudo-alternatives' with catchy titles- you know what they are- so heavily politically correct that their publishers/editors agenda rarely deviates: "The Progressive", "The Humanist", "In These Times", "The Nation", "The New Yorker", "The National Review", etc.
This "truth is stranger than fiction" isn't it?
Smaller stores and coffeeshops only carry local independents with heavy liberal (only occasionally right-wing) "agendas" that rarely satisfy beyond a glance at the cover, except for health and spirituality oriented local press. And that's growing into both more magazines and newspapers and outlets.

http://www.timesofmalta.com/core/article.php?id=257554 Currency Outlook - U.S. Dollar's Judgement Day by
Peter Callaya, HSBC - The Times & The Sunday Times, Malta - Sunday, April 8, 2007

@ mikal,

The local independent mags usually carry stories about local corptocracy swindles - probably what nets them the label of "liberal". My experience in 40 years of checking these out is that anyone with the cajones to challenge TPTB gets the label "liberal", which may be fair, since one of the definitions of "conservative" is maintaining the status quo.

Most of the national rags you mentioned are owned by big corporations, as well, so their bias is toward the corptocracy.

It's much more difficult to get both sides of the issues in the US than in many other countries, as our media is so heavily owned by and slanted toward the corptocracy that few alternative voices penetrate, especially in print.

The "free press" is only free for those who own one." I forgot who said this.

http://www.quotationspage.comA.J. Liebling

Can you remember what life was like B.S.E. (Before Search Engines) ?!

C!

A Happy Easter, Happy Passover

Cold & snowy here in Colorado. Not what you would want for Easter. Hope you all have a very nice holiday.

"Coprocracy" - the rule of crap.

Fitting definition for our times.

SIERRA

http://www.reuters.com/article/ousiv/idUSLAU86960620070408From Reuters
Sunday, April 8, 2007

LONDON -- A consortium of Middle Eastern investors and American buyout firms is preparing a $50 billion approach for Dow Chemical Co. in what could be the world's biggest-ever leveraged buyout, a newspaper said on Sunday.

Quoting sources close to the deal, The Sunday Express, a UK tabloid, said a financing package has been put in place for a breakup bid of between $52 to $58 a share, and an approach valuing the company at least $50 billion could come by the end of this week.

Dow's shares closed up 35 cents at $44.47 on the New York Stock Exchange on Thursday.

At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, UAE, and Oman, with the rest contributed by a number of U.S. buyout firms including Kohlberg Kravis Roberts, it said.

Representatives of Dow Chemical and Kohlberg Kravis Roberts were not immediately available for comment.

The story follows reports in recent months that strategic changes were afoot at Dow, which has been moving toward a focus on specialty chemicals.

In March the Wall Street Journal said Dow was in talks with India's Reliance Industries Ltd. about a potential joint venture, citing people familiar with the matter.

Analysts had said they were unsurprised at the report and expected Dow to split off its basic chemicals and plastics business as part of what it has called its "asset light" strategy, which would give it a more nimble and higher-margin profile focusing on specialty chemicals.

In late February the Sunday Express reported that Dow could get a takeover offer of as much as $54 billion from buyout funds, without naming any sources.

The paper had said the approach was likely to come from a combination of global investors and American private equity giants, who intended to break up the group into smaller companies through a highly leveraged buyout.

http://www.nytimes.com/2007/04/08/business/mutfund/08bear.html?_r=3∨ef=slogin∨ef=slogin∨ef=slogin Ready for the Worst: Here Come the Bears - New York Times
- Apr 8

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKGp4kEjHa9E&refer=worldwide Stagflation Deja' Vu Prompts TIPS Demand. Loss of Fed Respect - Bloomberg - Apr 8, 07

http://news.goldseek.com/Grandich/1176084000.php The Year of the Pig: The March to the Slaughterhouse Continues | Grandich Letter Special Alert by Peter Grandich | GoldSeek.com | Apr 8, 07
There's very little to not like about this assessment. Delivered appropriately upbeat and direct.

http://economictimes.indiatimes.com/Markets/Commodities/Gold-buying_gets_a_day_as_bonus/articleshow/1876768.cmsGold-buying gets a day as bonus - Commodities - Markets - The Economic Times - Apr 9
Come one, come all... I take that back!
Some inflation stat is due out today and the Fed will release meeting minutes if they can take time out of their busy schedule struggling somewhere
between the devil and the deep blue sea.

That's for India(whose masses are chasing supply in a temporary buyer's market), not for forumers.
But we both share the risk of someday encountering
a sudden, shocking & severely restricted supply of available bullion.
In India, the gap between gold supply and demand hardly draws notice, whereas their new economic growth rates
must combine with the sheer size of growing gold demand
to deliver a harsh verdict.

I reread my last post and should have said I'm unsure where this gold market is going- will higher prices continue to attract some investors and deter others in a sort of equilibrium? Or is there going to be a limit to available supply such as I postulated may occur in India, the world's largest consumer of gold?
On this and the related aspects there's room for many valid opinions and great posts. Though a search through the archives could answer my question I invite anyone who hasn't weighed in recently to visit although it's always difficult to guage whether and how much feedback to give especially when you've already contributed so much and sometimes after making many paragraphs in a single post, you wish you were not so pressed for time. The hundreds of posters and all the lurkers have the advantage that they're always there and ready to chip in whatever is needed.

So we won't sell the Asian Unocal properties to the Chinese, but ME oil money can buy Dow Chemical, lock, stock, and barrel of napalm, dioxin, and chlorine gas.

What am I missing here? Do we all of a sudden trust the OPEC leaders more than the Chinese?

There is a message in this, but I'm probably "not getting it".

http://www.news.com.au/business/story/0,23636,21525547-462,00.htmlsnip:

VENEZUELA and Iran have said that they strongly backed the formation of an OPEC-like cartel for the natural gas exporting countries, saying this would defend their interests.

"We are here to support gas OPEC. Its a very good idea ... Its very important for (gas) producers to have some agreement," Venezuelan Energy Minister Rafael Ramirez said overnight.

"We are here to discuss the issue ... That kind of organisation has to be prepared," Ramirez said on arrival in Doha to attend a two-day meeting for the Gas Exporting Countries Forum (GECF) opening today.

Iranian Oil Minister Kazem Vaziri Hamaneh said he believed that forming a cartel would strengthen the forum. "We also think that if the forum moves in that direction (forming a cartel), it will strengthen the forum," the Iranian minister said.

Mr Hamaneh said other ministers of the forum were "favourable" to the idea.

Both ministers however said it was still unclear whether the cartel would be announced during this meeting. Mr Ramirez also shrugged off opposition from Western nations to such a cartel.

"Consumer countries are always against our interests. We are trying to defend our interests," he said.

Egyptian Energy Minister Sameh Fahmi earlier told reporters his country opposed the formation of a gas cartel, saying the world is not prepared for the formation of a new energy organisation.

GCEF, a loose grouping of gas producers and exporters, was founded in 2001 and has 15 members, including Russia, Iran and Qatar, the world's top gas countries in terms of reserves.

-Goldilox

Sellers think it's peachy, but buyers think it's the pits. No surprises here.

http://www.usagold.com/gold/special/dutch2.html

April 2007 Buyers' Group

Dutch Gold, Bullion Pricing!

http://www.rockymountainnews.com/drmn/news_columnists/article/0,1299,DRMN_86_4051709,00.htmlBlack blade

Can you or another expert in the field comment on the feasibility of economic extraction of oil from shale in situ by heating the rock and extracting the oil without blasting and removing the shale? The article at the link below indicates that this may be cost effective and feasible if oil is at least $30 per barrel. It would appear that perhaps Peak Oil is a real worry if this is not feasible and that if feasible, these shale oil deposits could solve the crisis for at least a few decades. This article was dated September 2, 2005 and I was wondering what is the latest information on this topic.

http://www.grinningplanet.com/2005/12-13/oil-shale-article.htm@Curious:
BB may have a better take on this subject but the linked article offers what seems to be a balanced review of the Shell process. The devil's in the details. What doesn't appear in the article you posted is the electrical energy system needed to support the extraction process. An energy balance suggests positive output but the capital investment needed for a large scale facility and the associated environmental approvals would deter most investors.
Hope this is useful.

http://www.cftc.gov/dea/futures/deacmxsf.htmCOmmercials last week
in SIlver were net long 600 contracts

In copper were net short 2100 contracts

in Gold were net long 9000 contracts

Well, I have seen enough. And, enough is too much. At this time, and I am guessing, for only a limited time only, the internet holds info that is some of the dirty laundry of big boys, and, I am sure they have no intention of letting that remain the case.
I now plan to refocus my self on immediate surroundings and good cheer. Here is a little speculation; israel attacks iran, iran sends off some missles, the israelis send off a missle of thier own, but send it from waters off iran, from thier sub, and it flys to jerusalem, and hits the temple mount, blows the mosque to smithereens, and wala, a religious "miracle" has happened. The iranians destroyed the mosque.
Well, I dont know if that will happen, no one told me that certainly, but, I think it is too tempting a possiblity for israel to pass up. Reading big boy bad behaviour on the interet twists your thinking. And in that twisted thinking, this speculation seems likely.
Anyway, I do respect usagold and its many posters who are regular guys with great insights. I am bailing off the internet, and will only go on the internet for specific info and to do that, I will go to the library. Occasionally. The newspaper just got cancelled, I think I will read the "decade in review" in 2010. Randy, I havent gone to NJ for the last year. I am going soon, and will see that man about the gold coins. I will give him the usagold web info. I will try to make the sale. Best to you and MK and all.

http://money.guardian.co.uk/news_/story/0,,2052241,00.htmlWatchdog fears hedge funds behind 'phantom' takeover talk by Richard Wachman | Guardian Unlimited Money | April 8, 2007
The abuse of rumors, insider trading and "strange share price movements" challenge the FSA.

http://news.bbc.co.uk/1/hi/world/middle_east/6538957.stm BBC NEWS | World | Middle East | Iran 'enters new nuclear phase' - Apr 9, 07
This is THE news of the day. It's turning up everywhere in various guises at all the media outlets

http://www.futuresource.com/charts/charts.jsp?s=GC&o=&a=M&z=610x300&d=medium&b=bar&st=where do people turn to raise money
what's the first payment that can be forgone in an attempt to shore up one's personal financial dams......

The insurance companies are bigger than the banks .....


the banks and banker policies are not only for the Politicians but also for the Insurance companies....

People are less likely to raid the Insurance Policy Cash Value cookie Jar if ..................

If the economy doesn't start looking weak ........

If the government lies about the economy and jiggers all the inflation numbers and allows the dollar to fall ....
it has a seemingly negligible effect on the consumer for an extended period of time ......especially with the Chinese propping us up with purchasing power at Chinamart..

This also explains to some extent why the CARNIVAL BARKERS continue to talk down to gold .......

I will bet that over the last 100 years the masses have been talked out of saving in gold (to their financial undoing) which has given bigger rise to the savings being held in INSURANCE COMPANIES........in Cash Value Life insurance........

I have a clue for you ........We have FDIC (insurance) today but that won't prevent your dollars from going to zero value (because of the mismanagement of our politicians and the FEDERAL RESERVE printing it to death to underwrite promises that the Politicians are already WELCHING ON (social security).

I wonder if anybody has some figures on the number of INSURANCE FINANCIAL INSTITUTIONS that went bankrupt during the last depression and left the holders of cash value life insurance with nothing ................

I know .......WE SHOULDN"T go to gloom and doom .......So why don't we just deal with recent past financial facts ..
to show what the opportunity cost of holding cash value life insurance (cash) to investing in GOLD for say the past 4 years....

Below is a monthly chart of Gold .........

Gold has about doubled in the last 4 years .....It gets more interesting the further back you go ......

I first started investing cash value life insurance in after the last stock market debacle began .....After paying off the first loan ........I couldn't resist doing it again .....(going all in with my cash value )

It's been simply marvelous......

So what would I have got with my cash at 1 to 2 % in the insurance fund.....

Did you know that insurance companies work just like banks ; they can take your cash value an invest it with leverage from their banking buddies and most anything they invest in ......the sheer number of dollars they have to chase value with will make their targets go up ....as will printing money which will just make the dollars worth less and the whole ..........DRAMA IN THE THEATER of the Stock market and Bond Markets ........more believable but UNSUBSTANTIATED FOR TRUE VALUE>...

Considering the circumstances and they are myriad .....but many of them are INELASTIC like PEAK OIL ......and LIKE CHINA GROWTH ...( CARS GOING INTO THE POSSESSION OF THE MIDDLE CLASS WHO ARE GOING TO BE PUTTING MORE pressure on the OIL SUPPLY)...and THERE IS THE DOLLAR (which has a sickness related to the bond market).......

it looks like GOLD COULD BE STUCK IN AN UPWARD SPIRAL FOR A LONG TIME ......

AT least another 150 PER CENT ....where it might just level off....unless we are headed to another GOLD STANDARD.

Between now and 2010........you have to weigh the opportunity cost of holding a promise from and INsurance company ..........and the possibility of holding GOld and a loan to the insurance company which you may pay back in ever depreciating dollars in the future.......

It's a no brainer , but the insurance companies will not be happy with your decision .....
But they are probably not going to pay much attention to your withdrawal as they are busy with their actuarial tables and derivitive markets.....THey might be BUYING GOLD DERIVITIVES with your CASH VALUE since they know that their buying will surely aid in them DOUBLING UP on their investment .......

Much of the above monologue .......also includes reasons which I believe are inescapable which point to the future direction of liquidity and Stock market indexes.....

Banking and Insurance are probably most exposed to problems in the mortgage industry .....THEY ARE GOING TO HELP EACH OTHER WITH THIS PROBLEM (maybe they have already passed the risk on ) by keeping markets liquid and with the aid of the PPT .......moving them much higher as in the days of old (WEIMAR REPUBLIC STYLE).......
TO further aid the goal of GLOBALIzation .......

There will undoubtedly be bumps in the road but they will continue to print and spend their way out of these problems until they can't (who knows when that will be) .In the meantime the markets will go up like they have for the past 6 years with the metals far outpacing the DOW SP AND NASDAQ.....the NIKKEI is starting to look intereesting.......

and the DOLLAR WILL undoubtedly go down ......So in a couple of decades what will you Cash value at INSURANCE AND COMPANY be worth ......it's a wild guess.....

but i have a secret for you .........

You will be glad you have gold ......
instead of promises from an insurance company or BOTH
If what we have been seeing lately is any indication of what's coming over the horizon ......

But let's not dwell on doom and gloom ......

Last time the Stock market collapsed it was because of tight money .........which has been deemed a FED MISTAKE because back in the late 20's .....the FED WAS IN CONTROL OF THE MONEY SUPPLY AND THEY COULD HAVE flooded the system with liquidity but someone over there decided that would be a bad idea.......

TODAY ......WHO IS IN CONTROL OF LIQUIDITY .......??????
THE PEOPLE WHO BUY OUR BONDS ........? That's part of the answer......

History RHYMES.........

Intersting to watch ........

Somethings are constant......

Politicians making promises that they can't keep ..
and Bankers bowing to their wishes to accomodate VOTER CONSTITUENT expectations.......RUNNING CURRENCIES INTO THE GROUND........(FIAT)
to their intrinsic value : ZERO..........

GOLD has served as a hedge against this unscrupulous practice to protect individuals from BANKERS AND POLITICIANS for 5000 years.........

Separate yourself from the CROWD or the CROWD following instructions from the MEDIA HACKS that serve BANKING and INSURANCE INDUSTRIES may separate you from your WEALTH

According to Reuters, in its latest draft World Economic Outlook the IMF argued "extraordinarily aggressively" for a correction in exchange rates (i.e. for the dollar to fall) to reduce the massive US current account deficit.

If it wasn't for the dollar's outlook, I would still be expecting gold to correct.

And to complicate things, as our dollar declines our real estate, bonds, stocks, etc. become more attractive in terms of our major trading partners e.g., Petro dollars for Dow Chemical Co.

We are a financial hostage to the "Pacific Rim", and the Mideast, and increasingly their plantation.

Incidentally , I was just looking at the chart

a) the march monthly close is higher that the May close of last year and is a relatively (recent) monthy high

b) that monthly chart shows a FLAG.........doesn't it ?


THAT IS ONE BIG *** FLAG FORMATION ........

It looks like the base is at 250.........

which might explain some posters projections of the HUI over the WEEKEND .....going to 720......between now and December............


I can see that happening .........


This set up reminds me of going to the amusement park when i was a kid ,,,when there wasn't anyone there......You got finished riding the roller coaster and when it came to a stop you didn't have to get out (didn't have to wait in line for the next opportunity)........you just got to ride it again ......

You can hear them shout, Defend 83 or Bleed! Kinda like the grocery store question. Would you like plastic or paper? Save a tree, kill a dinosaur. Choices. Raise interset rates or lower them. Fix the car or buy a new one. Put food on the table or pay the mortgage.
Choices.Some will not mean a hill of beans. While others will determined if we have a roof over our heads in our golden years.
Slingshot-----------<>

http://money.cnn.com/2007/04/09/news/newsmakers/occidental.reut/index.htm?cnn=yessnip:

CHICAGO (Reuters) -- Occidental Petroleum Corp.'s chairman and chief executive took in more than $400 million in compensation last year, the company said in a filing, one of the biggest single-year payouts in U.S. corporate history.

The largest part of Ray Irani's 2006 payout was $270.2 million from the exercise of options awarded from 1997 to 2006, representing more than 7.1 million shares, according to the company's annual proxy statement, which was filed with the Securities and Exchange Commission in March.

Irani also received $93.3 million in stock and dividends from a deferred stock program when the company closed the plan in October due to increases in liability and expenses for the program, the company said.

Irani's salary in 2006 was $1.3 million and his cash bonus was $1.4 million, according to the filing. But stock and option awards and other benefits lifted his 2006 compensation to $55.6 million, the proxy said.

In the proxy, the company said that from December 1990 - when Irani succeeded Armand Hammer as chief executive - through 2005, the company's stock rose to about $40 a share from $9 and its total shareholder return was 699 percent.

"When you look at this, this is solid pay for performance," said Richard Kline, an Occidental spokesman. "It serves the best interest of the corporation and the best interest of the shareholder."

-Goldilox

I'm not knocking his individual earning power, but when looking at the BLS earnings stats, one must factor this and the Wall St 7-figure bonuses against the statement that "individual earnings rose". An increase of $350M for one person can offset a decrease of $3500 for 100,000 people. If 10,000 CEOs, officers, and Wall St Geeks did 10% of this, it can offset a similar decrease for the entire US labor force, and still show "wages rising".

Wealth imbalance?

http://www.thestreet.com/funds/openbook/10348516.htmlFinancial Disasters Will Keep Coming
By Richard Bookstaber
Special to TheStreet.com
4/5/2007 10:16 AM EDT
Excerpt: "While I didn't cause the two great financial crises of the late 20th century -- the 1987 stock market crash and the Long Term Capital Management hedge fund debacle 11 years later -- let's just say I was in the vicinity. My actions, which seemed insignificant at the time and their consequences unintended, did help get the ball rolling.
And that's why I wrote A Demon of Our Own Design. Not so much to recount those disasters -- although that is part of the story -- but to raise a red flag: Those stunning financial disasters are not isolated incidents. More are on their way.
In fact, they're inevitable.
As I explain in A Demon of Our Own Design, today's financial markets are so complex and the speed of transactions so fast that apparently isolated actions and even minor events can cascade to have unexpected and even catastrophic consequences.
Indeed, my role in those two outsized 20th-century debacles came about more or less by happenstance. Shortly after I completed my doctorate in economics at MIT and settled into the academic world, my area of interest -- option theory -- became the center of a Wall Street revolution. I was persuaded to join what would turn out to be an unending stream of nerdy academics who headed to New York City to quench the thirst for quantitative talent. On Wall Street, I got my nose out of the data and started developing derivatives and other new financial products. Later, I managed firm-wide risk at Morgan Stanley and then at Salomon Brothers. It was at Morgan that I participated in knocking the legs out from under the market in October 1987 and at Solly that I helped to start things rolling in the LTCM crisis in 1998."
Mikal- This comes highly recommended. There are many gems of knowledge here. You almost can say it's come straight from the horse's mouth.

Bookstaber concludes:

"The question posed by my book is simple: Why can't the financial markets get their act together? Why, in spite of reduced risk in the underlying economy, in spite of the march of innovation and financial engineering, do we not enjoy reductions in financial risk that we find in other areas of our lives? Why are markets actually becoming more crisis-prone? It would seem there is a demon unleashed, haunting the market and casting our efforts awry -- a demon of our own design."

That would be fiat currencies, as they are not a good and are therefore not real money. Thus, there is ultimately no controlling the issuance of these non-asset-based (work-free) financial instruments.

Or as Ayn Rank said, "We can evade reality, but we cannot evade the consequences of evading reality."

http://www.usatoday.com/money/world/2007-04-09-us-china-trade_N.htm?csp=34Yes, good quote. Ayn Rand knew there'd be consequences. But what she didn't see was how far we'd go to 'evade reality'.
It's not just fiat, but the use of it including fraud, denial, greed, sloth, etc among the entire world populace:
U.S. files two trade protests against China
WASHINGTON (AP) � The Bush administration announced Monday that it is filing two new trade cases against China over copyright piracy and restrictions on the sale of U.S. movies, music and books there.
The action, announced by U.S. Trade Representative Susan Schwab, represents the latest move by the administration to respond to growing political pressure at home to do something about soaring U.S. trade deficits.

Schwab said the United States is filing with the World Trade Organization a case that will challenge Beijing's lax enforcement of violations of copyrights and trademarks on a wide range of products. American companies contend they are losing billions of dollars in sales because of rampant copyright piracy.
The second case will challenge China's barriers to the sale of U.S.-produced movies, music and books.

"Piracy and counterfeiting levels in China remain unacceptably high," Schwab said in announcing the cases. "Inadequate protection of intellectual property rights in China costs U.S. firms and workers billions of dollars each year."

The two cases represent the latest effort by the administration to increase pressure on China after Democrats, many highly critical of China's trade practices, won control of the House and the Senate.
The U.S. trade deficit set a record for a fifth consecutive year in 2006 � at $765.3 billion. The imbalance with China climbed to $232.5 billion, highest ever with a single country.
In late March, the administration announced it was imposing penalty tariffs on Chinese glossy paper imports in a case that broke a 23-year precedent that had barred U.S. companies from seeking protection from unfair subsidies provided by the Chinese government.
In February, Schwab announced the administration was bringing a WTO case against China on the government subsidy issue.

The decision to go to the WTO with the two new trade cases will trigger a 60-day consultation period during which trade negotiators from both countries will try to resolve the two disputes.
If that fails, WTO hearing panels would be convened. If the U.S. wins the cases, it would be allowed to impose penalty economic sanctions on Chinese products.
The Motion Picture Association of America said American industries lost an estimated $2.3 billion in revenue to copyright pirates in China in 2005 with only one out of every 10 DVDs sold in China a legal copy.

"China is, by virtually any and every measure, the world's largest marketplace for pirated goods," said MPA chairman Dan Glickman.
Mitch Bainwol, chairman of the Recording Industry Association of America, said his industry welcomes the administration's decision to file the WTO cases. "The theft of music is pervasive in China and takes place virtually without meaningful consequence," he said.

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

April 9 (DowJones, Reuters) -- A late-day slide in crude oil, plus dollar strength, prompted some profit-taking in gold futures that left the metal lower when trading resumed after a three-day holiday weekend Monday, analysts said. The metal was modestly higher much of the day, which a couple of traders linked to light speculative buying in thin conditions. Gold then faltered during the last two hours of the pit session.

The COMEX June gold contract fell $2.50 to $676.90.

"The decline in oil prices is having a considerable impact on gold," said Jim Steel, metals analyst with HSBC. As the gold pit was closing, May crude oil was down $1.97 to $62.31 a barrel. "We also had a dollar rally," said Steel. "Those two factors together are pretty powerful reasons for gold to fall."

Jim Quinn, commodity floor analyst with A.G. Edwards cited "some profit-taking late in the session."

The decline in gold occurred in light volume, with many trading operations around the globe remaining shuttered for Easter on Monday. "A lot of this is being done in rather thin conditions, which can exaggerate a price move one way or the other," said Steel.

There were no London fixes for gold on Monday, as London and some European and Asian markets remained closed because of the Easter Monday holiday. Normal trade resumes Tuesday.

Iran announced on Monday it had begun industrial-scale nuclear fuel production, in a fresh snub to the U.N. Security Council.

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

http://www.bloomberg.com/apps/news?pid=20601012&sid=at.vNY0azqBU&refer=commoditiesApril 9 (Bloomberg) -- Gold may rise for a sixth straight week on speculation that a slowing U.S. economy will weaken the dollar, boosting the appeal of the precious metal as an alternative investment.

Twenty of the 31 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on April 4 and April 5 advised buying gold...

Bullion has moved mostly in the opposite direction of the U.S. currency, which last week traded at a two-year low against the euro. Gold is up 6.5 percent this year while the dollar has fallen 1.7 percent against the euro.

^___(from url)___^

Although shown small here at approximately 4:1, gold's future gains should continue to be attractively leveraged against the dollar's fall.

R.

http://www.fool.com/investing/general/2007/04/09/dueling-fools-gold-bull.aspxTheMotleyFool, April 9 -- Over the past five years, returns in precious metals have left those of the stock market in the dust. In that time, gold has advanced 140% versus a gain of only 29% in the S&P 500.

Gold's returns have been strong over the past 18 months as well -- the metal is up by roughly 41% during that time. Looking beyond the recent gains, we see other reasons to be bullish about gold for the foreseeable future.

First, paper currencies will continue to decline in value and continually erode returns from cash investments. Second, while gold has historically underperformed the market, the current environment has all the ingredients for continued gains in gold....

The world is awash in cash, and the result will be higher prices for everything -- except stocks. For investors in the stock market, gold has a wonderful attribute -- when stocks slide, gold often shines.

As shown above, this has been true during the past five years, and it was true in the '70s, when gold investors made big money and stock investors faced big losses. This is why I love gold as a compliment to my portfolio of stocks.

Furthermore, current investment in gold is a tiny fraction of the total investment universe. If the market experiences a bit of fear or increased inflation, I expect this demand to increase dramatically.

...the price of gold is still far from its all-time high of $850 per ounce, set in 1980. On an inflation-corrected basis, gold would have to soar to around $2,275 an ounce to reach the same level of exuberance.

^___(from url)---^

This is part of a series of dueling articles and rebuttals that provide moderate food for thought for newbies, but on the whole are too rife with flaws to properly address with my limited time. So, I roundly encourage you all to tackle them insofar as your own conditions may allow.

R.

http://economictimes.indiatimes.com/Euro_may_rally_to_record_traders_and_analysts_clash/RssArticleShow/articleshow/1881499.cmsLONDON/NEW YORK: The euro's rise has taken analysts by surprise and traders expect more gains as the region's economy grows and interest rates climb.

The euro is up 1.9% against the dollar...

The currency's strength likely will be addressed at the Group of Seven industrialised nations meeting starting April 13 in Washington, said Jim O�Neill, head of global economic research in London at Goldman Sachs Group.

Niels From, a currency strategist at Dresdner Kleinwort in Frankfurt, who predicted the euro will rally in the Bloomberg survey: "Analysts will raise their forecasts for the euro. We're confident it will break previous record levels."

^___(from url)___^

Climbing Euro = Falling Dollar > > > and with this shall continue the leveraged gains in Gold Metal.

R.

http://business.timesonline.co.uk/tol/business/economics/article1632765.eceWashington -- Finance ministers and central bank governors [jet] into Washington this week for the spring meetings of the International Monetary Fund and World Bank...

Behind closed doors, the finance ministers and central bank chiefs, particularly those from the Group of Seven leading economies, who meet on Friday, will debate whether they have more to worry about than they are prepared to say in public. Yet with global markets still on edge after last month's turbulence, the G7 is likely to send a soothing message to investors.

Policymakers will confront issues about the future of the institutions through which they try to steer the world economy. Both the IMF and the G7 are becoming outdated and toothless as the economic landscape is transformed by the rise of China, India and other emerging powers. Yet attempts to overhaul the old order are hampered by disagreements on the shape of any new model.

Financially, the IMF is in trouble. It expects to be in the red by $370 million (�189 million) a year by 2010. The reason is that its role in providing emergency foreign exchange to crisis-hit countries has been evaporating. Many potential client countries have built up big reserves to avoid having to turn to the IMF � a problem for the fund, since its money comes from interest on its loans.

Recommendations on funding from an earlier inquiry are likely to prove contentious. These called for the IMF to invest $9 billion of its reserves more aggressively, to tap member governments, and to sell 400 tonnes of its gold to create an endowment.

^___(from url)___^

Why does this sound familiar to us? Because we've been on this Trail for some considerable time...

R.

http://www.resourceinvestor.com/pebble.asp?relid=30700SHANGHAI (Interfax-China) -- China produced 36.18 tonnes of gold in January and February, 2007, up 14.34% from the same period last year, according to statistics released by the China Gold Association last Friday.

...The Shanghai Gold Exchange, China's sole precious metals trading platform, reported a gold trade volume of 242,639.8 kilograms in the first two months of 2007, up 67.80%.

Trade turnover stood at RMB39.17 billion ($5.07 billion), up 90.22%.

^___(from url)___^

Should any proposed sale of IMF gold reserves actually materialize (see previous article), between potential restitution to members and China's appetite, there will be no lack of audience and bid.

R.

OK Randy,

I'll fire the first shots.

"...the price of gold is still far from its all-time high of $850 per ounce, set in 1980. On an inflation-corrected basis, gold would have to soar to around $2,275 an ounce to reach the same level of exuberance."

That calculation, of course, uses "official" inflation numbers. A second look using monetary inflation numbers (closer to 10% pa since 9-11-01) would put gold well above $10,000 per ounce.

For the pitiful DOW to match that, against 10% inflation, would mean a new high would value the DOW at 26795.

How are your assets holding up under monetary inflation?

Boilermaker

Thank you for the prompt response. I was not aware of that link that also discussed the Shell project. It appears that shale oil could be a good moneymaker for any company that invests substantial capital in the project but it will not even begin to increase the supply of oil in a meaningful way. The first article did not even discuss the problem of adequate supplies of electricity to the site needed to run the process.

Ref:

1. Chris Powell #154055 Dow Chemical leveraged buy-out

2. TC #154081 "...world is awash with cash, and the result will be higher prices for everything..."


Sundeck: "Private equity" takeovers are all the rage in Australia at the moment. The term is basically a synonym for "leveraged buy-out" in which a few "private" players borrow large sums and buy-out the equity hitherto held by "public" interests like you, me and countless other individuals, trusts, investment funds, etc, in the public domain.

The question that arises in my mind is: "Why now?"

A year ago, there was very little talk of "private equity" and although one or two deals would have gone through un-noticed, lately it seems as though there is a mad scramble to acquire high-profile and profitable companies (like Dow) using large sums of borrowed money.

Presumeably, the people involved in this activity are not stupid novices. They appear to be shrewd professionals backed by financial institutions that have been around for many decades and are in the front-line of the financial world.

So...what do they know that the average Jow Blow is ignorant of? What is going on?

Could it be linked to a growing loss of confidence in the US dollar: a break-down in recycling of petro-dollars (and Chinese trade-surplus dollars..."Sino-dollars"), back into US dollar-denominated assets (treasuries, corporate bonds, etc). Is there a scramble by the big-boys to get rid of their dollars into "hard assets" that they know are going to retain value (and appreciate in dollar terms) as the US dollar depreciates? Is it a case of the "smart money" making the first move before all the other players catch on, the music stops and there are only half as many chairs as there were before?

I'd be interested to get the comments of others here on the forum on this issue...Chris Powell, TC, MK, flow5...others?

Thanks

:-)

http://news.silverseek.com/SilverSeek/1176161794.php11:15p ET Monday, April 9, 2007

Dear Friend of GATA and Gold:

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, has studied the SEC filings and prospectus of the silver exchange-traded fund on the American Stock Exchange (SLV) and has discovered that they go out of their way to provide for not actually having allocated silver to back the shares sold in the fund. Turk's research revives the long-simmering question of whether the precious metals ETFs are secure investments or just more mechanisms to be used by the financial powers and the central banks behind them to short the metals.

You can find Turk's new report, "Can We Trust the Silver ETF?," at Dollar Collapse here:

http://dollarcollapse.com/iNP/view.asp?ID=52

And at GoldSeek's companion site, SilverSeek, here:

http://news.silverseek.com/SilverSeek/1176161794.php

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

Sundeck asks: Why all these "private equity" leveraged buyouts now?

Maybe:

1) All the money floating around has to go somewhere, and the institutions creating it and lending it, central banks and investment banks, surely don't want more of it to go into commodities, where it will contribute to visible price inflation of consumer products and interfere with the central bank campaign to deceive the working class.

2) Maybe the people behind these deals figure that the dollar devaluation ahead is going to outrun interest rates by a comfortable margin, so that the nominal increase in value of the companies being acquired will far exceed the cost of servicing the debt incurred by the leveraged buyouts.

That is, cash is to be trash and deflation is a mere hobgoblin.

On the whole I'm inclined toward Von Mises and the other Austrians (especially if we can discuss these things over Viennese coffee and pastries), but the crackup of Von Mises' "crackup boom" may not be for quite a bit down the road. And given the several alternatives to the dollar that are already available -- the euro, the yuan, and good old gold and silver -- and the ease of moving money across international borders, maybe a crash in the dollar really would not require a crash in any economies except that of the United States itself. The internal demand yet to be stimulated in China and India dwarfs any potential growth in the U.S. economy and, really, even current U.S. demand for the world's goods and resources.

That is, the world may not need the U.S. economy anymore. At least I don't see what the United States is contributing, only that it is consuming the fruit of the world's labor. The world surely DOES need to figure out how to preserve some value for all those foreign exchange reserves held in dollars.

I think it was Antal Fekete who observed that people really haven't been paid unless they have gotten something tangible or inherently useable as payment or spent their payments on something tangible or inherently useful. Merely holding ever-increasing dollar reserves isn't payment at all. Holding dollar reserves when the supply of dollars is growing faster than not only the U.S. economy but the economy of the whole world would seem to be a good way to be expropriated.

Hence what seems to be the carefully staged move out of the dollar, with everyone moving out slowly at the same pace and keeping an eye on everyone else to make sure that no one cashes everything in first.

Anyway, just some musings for whatever they're worth.

Lonnnnnnnng time lurker, first time poster. Many, many, thanks to MK for providing this wonderful fount of information.
I have never before felt that I have had anything useful enough to add to any thread, but the question posed by Sundeck has struck a chord, and the stock markets are my area of (limited) expertise.
Historically, acquiring companies use their stock as takeover currency if said stock is expensive. If their stock is cheap, then they use cash (or borrow the cash).
The private equity phenomenon is not unique to Australia; it has been happening with great frequency in the US, as well. As US stock prices are anything but cheap, I was, at first, at a loss to explain the preponderance of leveraged buyouts (LBOs) by supposed financial insiders. Typically, with stock prices at these levels, takeovers would be done using the inflated shares as the currency of acquisition (witness the AOL takeover of Time Warner).
Possible explanations are that: 1)Financial insiders have completelly lost their minds (highly unlikely). 2)Stocks are actually cheap (even more unlikely). 3)The asset being acquired will far outpace (nominally) the debt being used to acquire it (most likely). In other words, according to stock market insiders, there is a massive inflation on the horizon.
This, of course, brings the connection to gold ownership. If the brightest minds on Wall Street, with the best information to be had, see a rather significant inflation of US dollars, then gold, as priced in US dollars, is most likely headed higher.

(Not intended as investment advice, just one man's opinion).

http://www.theglobeandmail.com/servlet/story/LAC.20070407.CHEMICAL07/TPStory/NationalI've got a slightly different take on this subject.
According to Chris Powell's post yesterday analysts had expected Dow to split off its basic chemical and plastics business anyway.

Now with this information stored away I find today that GE wants to sell off their plastics division as well.
Why? Not profitable enough or is there some other reason ie natural gas supplies-prices, global warming backlash, greening etc.

Then I come across this article (see link) and I come to a conclusion that this industry is now a hot potato.
Better to sell now before the class action lawsuits pile up.

Whats this got to do with gold. Well when "The Graduate" was release plastics was "the" business. How long ago was that anyway 35 years+-, now compare that time frame to gold's 5000 year history and still going strong.

Apart from the purely financial pressure of having to do SOMETHING with the large gobs of cash being thrust at the funds in order to justify their weighty fees, there might also be :-
1/ How much more efficiently (no, I won't define efficient !) can a company be run if it is private and therefore does not have to meet the requirements and restrictions of Sarbanes-Oxley ? Of course, there are other ways around this e.g. Tyco, Halliburton offshoring themselves.
2/ What percentage of these businesses are actually offshore already ? Dow, for instance, may be a very familiar name here, but what percentage of its business is based in the strictly dollar world, as opposed to the non-dollar world that just uses the dollar for pricing ?
3/ Fashion. Last year the semiconductor arms of Philips and Motorola both were privatized (although the latter had spent a few years in the public sector after the spin-off). These were $10-15B deals. The reason ? Both the parent and the child thought that it would be mutually beneficial. Eyes were raised about the amounts involved, but, hey, if everyone is doing it, it can't be wrong, can it ?

FWIW, I don't think that large corporations are too concerned by product and process liabilities. Taking just GE as an example, there is the town of Rome, Georgia, which has been royally blighted by the presence of PCBs from their transformer factory. Everyone has heard about GE's clean-up of the Hudson (after many years' lobbying), but other, less influential places, are left to rot.

C!

@ Otish Mtn,

Interesting take. Isn't the latest pet food bruhaha about a poisonous plastic ingredient?

Might we see a recommendation for a return to glass food containers?

http://www.netdania.com/QuoteList.aspis getting hammered in all currencies overseas tonight.

Thought struck this morning, that SIERRA and Cap. Ahab have a lot in common.

They are both obsessed with the mission of making the big killing, SIERRA with gold at $3,000 US and on up thereafter, and Captain Ahab with slaughtering Moby Dick, the great white whale that leads Ahab on and on, in an endless chase.

When Captain Ahab finally captures and kills Moby Dick, the creature takes him down with it...

If that is SIERRA's fate, So be it!

Thar she blows, Captain. Two points off the starboard bow!
Slingshot-----:0)

http://www.msnbc.msn.com/id/17929461/Mortgage woes could be 'tip of the iceberg'
Fraud, abusive lending crushes dreams for millions of home owners
By John W. Schoen - Senior Producer
MSNBC - Updated: 10:31 a.m. ET April 10, 2007

http://www.voltairenet.org/article146942.html#article146942.

http://www.ft.com/cms/s/b6fdd054-e6cb-11db-9034-000b5df10621.htmlUS braces for sharp profits slowdown
By Francesco Guerrera in New York and Eoin Callan in Washington - Financial Times
Published: April 9 2007 20:13 | Last updated: April 9 2007 20:13 - Snippit:
"US companies are bracing themselves for a sharp fall in profit growth this year, amid rising fears that corporate America's woes will exacerbate the expected economic slowdown.

Wall Street analysts and economists are warning that the end to a record run of profit increases along with already anaemic business investment by US companies could have serious repercussions on the domestic economy."

http://www.prudentbear.com/articles/show/1960Guest Commentary, by Michael J. Panzner
Cliff-Risk Nation - April 10, 2007
Excerpt: "In the credit derivatives market, certain instruments are exposed to what is known as "cliff risk." This ominous sounding phrase describes a situation where the last in a series of adverse developments obliterates the value of what was only recently viewed as a triple-A-rated security. Up until that point, however, rating agencies, investors, and bankers assume that circumstances will eventually right themselves and that the principal will be paid in full, in spite of whatever bad news might have come along beforehand.

This latter way of thinking is not confined to the nether world of complex securities with tongue-twisting names like CDOs-squared. In many respects, it describes a point-of-view that permeates many aspects of modern financial life. Increasingly, Americans have taken it for granted that good times beget more of the same and they have acted accordingly. If bad news comes along, the damage is absorbed. Unlike with some toxic derivatives, however, many believe that if circumstances do manage to take a turn for the worse, something can always be done about it.

The massive build-up of public and private debts, unfunded pension promises, and other obligations underscores this perspective. Rather than coming to terms with untenable liabilities taken on because of past miscalculations, the mindset has been "don't worry about it now." If financial problems don't disappear of their own accord, they can be restructured, rolled over, refinanced, or even renamed. One way or another, the thinking goes, the situation will be resolved, because there are any number of options that are readily available.

This mindset probably explains why we haven't seen the type of response to a growing list of negatives that wizened old-timers would have expected. In the past, significant trade deficits and other unstable imbalances, myriad signs of a looming recession, talk of a subprime meltdown-inspired credit crunch, and the inevitability of down cycles following periods of historically high profit-margins and overextended uptrends would have had money managers scrambling to batten down the hatches by now.

Instead, mutual fund cash levels are near record lows, margin debt and leverage-based speculation are at euphoric extremes, and risk spreads reflect an extraordinary degree of complacency. Every data point, whether good or bad, is seen as another reason for heads-I-win, tails-you-lose optimism."

I don't think Mr Adam Hamilton will mind me here using his name and info in his latest Zeal Report to add enlightement to Readers here unaware of some specifics that will have to be dealt with to successfully deal with Iran .....

High Stakes Hold Em ........and might be NO NUTS..Holdem ..

An excerpt very germane to this discussion of INSANITY...
from Adam Hamilton's latest Zeal Intelligence Report

"With two US aircraft carriers in the Per-sian Gulf, the first time since Washingtoninvaded Iraq, concerns are growing overa deadly Russian anti-ship cruise missile. The SS-N-27B, known as the "Sizzler" inthe West, was designed specifically to hitand destroy US aircraft carriers and there are no proven countermeasures. Sizzlerstarts out flying at subsonic speeds, likenormal cruise missiles, where it could beshot down by Aegis guns. But within 10miles of its target carrier, the rocket-pro-pelled warhead separates. It accelerates to 3x the speed of sound while flying lessthan 30 feet above the water! Then on itsfinal approach, when it would face gettingshot down if it was not moving so fast, it is able to perform defensive maneuvers likeextreme sharp-angled dodges. The head of the Pentagon's weapons testing officeis so concerned about the Sizzler threatthat he said his office would not approveother major new Navy test plans until it isaddressed. The Russian company that ismaking the Sizzler, Novator, is marketing it aggressively at arms shows. In case ofa future Taiwan conflict, China bought themissiles and eight diesel submarines fromwhich to fire them in 2002. If Beijing cantake out US aircraft carriers at will then itcan walk into Taiwan. More interestingly, Russia offered this missile to Iran back inthe 1990s. If Iran has Sizzlers, then thereis no way Washington can defend its car-riers or even keep 25% of the world's oilflowing through the Strait of Hormuz in afuture conflict. It is interesting one piece of technology can negate a $5b carrier."

http://www.lewrockwell.com/paul/paul380.htmlThe Federal Reserve Monopoly Over Money
by Congressman Dr. Ron Paul
Excerpts:
"Recently I had the opportunity to question Federal Reserve Chairman Ben Bernanke when he appeared before the congressional Joint Economic committee. The topic that morning was the state of the American economy, and many of my colleagues raised questions about how the Fed might better "regulate" things to ease fears of an economic downturn. The tenor of my colleagues' questions suggested that Mr. Bernanke's job is nothing less than to run the U.S. economy, like some kind of Soviet central planner.

Certainly it's true that Mr. Bernanke can drastically affect the economy at the drop of a hat, simply by making decisions about the money supply and interest rates. But why do members of Congress assume this is good? Why do we accept without objection that a small group of people on the Federal Reserve Board wields so much power over our economic well-being? Is centralized, monopoly control over our money even compatible with a supposedly free-market economy?"

"The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch � Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference � that threatens to impoverish us by further destroying the value of our dollars.

The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement.

The financial press sometimes criticizes Federal Reserve policy, but the validity of the fiat system itself is never challenged. Both political parties want the Fed to print more money, either to support social spending or military adventurism. Politicians want the printing presses to run faster and create more credit, so that the economy will be healed like magic � or so they believe.

Fiat dollars allow us to live beyond our means, but only for so long. History shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic and political structure becomes unstable. Spendthrift politicians may love a system that generates more and more money for their special interest projects, but the rest of us have good reason to be concerned about our monetary system and the future value of our dollars."

Did you see the piece today, where one of S. Hussein's henchmen said that neutron bombs were used on Iraq just prior to the invasion?

If the general areas housing the Sizzlers - supposing Iran has them - are hit with neutron bombs, the bombs will stay quietly in their bunkers. All the operators will be dead.

If I were in Ahmedinajad's position, I'd be thinking A LOT about a "pre-emptive strike" on US carriers now or soon.

If the US can be pre-emptive, surely another country about to be demolished with gigantic air & missile attacks is perfectly justified in acting to preserve its existence.

Or is this not so?

See Moscow News where a Russian general is saying that the war plans of the US against Iran are still going forward.

Sorry, MK, this post is not about gold, it's ONLY about something that can affect our whole civilization.

SIERRA a.k.a. Captain Ahab.

Jim Turk, in his latest "Freemarket and Gold Money Report" (one of only two newsletters I subscribe to) points out that the European CB's expended 45 tons of gold during March, to keep the price down.

The top which was attacked in March was $680, about where we are now, and all the Cartel got for its gold was to bring down gold to $630-645. And - here we are a month later, and we're back at $680 level.

They are not getting enough bang for their gold. Bad deal.

The 45 tons vanished in three weeks, says Turk. At 15 tons per week (this is my thinking) and some 24 weeks to go of the WGA2, they would far exceed their quota for the year.

Besides that, it isn't having an appreciable effect any longer. Gold wants UP!

My take is that the Cartel will have to pull back from its present trenches under $700, for a renewed rear-guard action on the gold price, when its sales may be more effective. Say, at $730, again? But not with the same vigorours results as last time.

SIERRA

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

April 10 (MarketWatch) -- Gold futures climbed to a five-week high Tuesday, as renewed trade tensions between the U.S. and China and a slide in the U.S. dollar boosted demand for the precious metal.

The COMEX June contract settled up $4.60 at $681.50. It reached a high of $686.80 in intraday trading, the highest price seen for that contract since Feb. 28.

China's trade surplus widened to $46.4 billion from $23.3 billion. U.S. trade officials on Monday filed two cases against China before the World Trade Organization, charging that Beijing has failed to crack down on copyright violations on a wide range of products and maintaining barriers to trade in books, music, videos and movies.

China on Tuesday expressed "great regret and strong dissatisfaction" at the decision.

"The decision runs contrary to the consensus between the leaders of the two nations about strengthening bilateral economic and trade ties and properly solving trade disputes," said Wang Xinpei, a spokesman for China's Ministry of Commerce, in a news release.

The dollar fell across the board Tuesday, hitting a two-year low vs. the euro.

The dollar "enters a new selling wave" as the U.S. trade action "is fuelling speculation of retaliatory acts from Beijing , which has already reported it will not attend this week's [Group of Seven] meeting in Washington, D.C.," said Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in New York.

"The gold market is being driven by investment demand, which saw another 6.15 tons of gold bought in the last two days," said Julian Phillips, an analyst at GoldForecaster.com.

"Add to this the start up of more Indian gold exchange-traded funds and now an announcement of one to come in Japan. All these represent long-term buyers of gold, but they have set a pattern of being particularly vigorous buyers when the gold price rises," Phillips said.

"Global uncertainty as represented by the dollar, oil, China, political pressures, acts as a tide encouraging investment into gold, as an underlying driving force," he said.

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

http://quote.bloomberg.com/apps/news?pid=20601087&sid=aUZTaoFd5x6gForeign Bonds to Top
Dollar Denomination
in 2007, Lehman Says

By Bryan Keogh
Bloomberg News Service
Monday, April 9, 2007

NEW YORK -- Bonds sold in non-U.S. currencies will surpass dollar-denominated debt this year for the first time since at least 1995 as foreign governments and corporations boost local issuance, Lehman Brothers Holdings Inc. predicts.

About $4.9 trillion of bonds sold worldwide this year will be in currencies other than U.S. dollars, while $4.8 trillion will be sold in dollars, New York-based Lehman said in a report released today. It would be the first year dollar debt trailed foreign issues since Lehman began tracking the data in 1995.

Issuance in currencies used in the U.K., Canada, and Asian nations other than Japan will likely set new origination records in 2007 as non-U.S. investors shift money out of intermediary accounts and into higher-yielding, local fixed-income investments, analysts led by Jack Malvey wrote in the report.

The "globalization trends under way in fixed-income origination suggest a more regionally diversified debt base with deeper local capital markets -- not a gravity shift from one country to another," wrote Malvey, who is Lehman's global fixed-income strategist.

About $1.39 trillion of bonds were sold in currencies other than dollars in the first quarter, or 18 percent more than the year-earlier period. That compares to a 10 percent jump in bonds sold in dollars to $1.36 trillion, Lehman said. It was the second-straight quarter, and fourth time in two years, in which non-dollar debt exceeded bonds sold in the U.S. currency.

Most governments other than in Japan and Eastern Europe sold more debt in the first quarter than a year earlier, the report said. Countries using the euro and Japan were the second- and third-biggest markets for government debt, after the U.S.

Fixed-rate corporate bonds sold in euros jumped 49 percent to $110 billion, surpassing such debt denominated in dollars for the first time since the European currency began, Lehman said. Floating-rate issuance climbed in Japan, Europe, and the U.K. as their central banks raised interest rates.

Government bonds sold in the euro zone exceeded the amount of such debt issued by Japan for the first time since 2000, according to the report.

"Depending on the quality composition of issuance and currency fluctuations, even the broadest global debt benchmarks may have a European leaning by the end of this decade," Malvey wrote.

http://www.ft.com/cms/s/5017c514-e74f-11db-8098-000b5df10621.htmlBy Neil Dennis
Financial Times, London
Tuesday, April 10, 2007

The dollar fell sharply Tuesday as trade tensions between the US and China intensified. The fall reversed the gains prompted by Friday's stronger-than-expected non-farm payrolls data.

China Tuesday declined an invitation to take part in the G7 meeting to be held in Washington this weekend. This followed earlier comments from the country's commerce ministry that it was "strongly displeased" that the US had complained to the World Trade Organisation over what was described as Beijing's failure to protect intellectual property rights.

The US trade department also complained about Chinese restrictions on the sale of foreign books and films.

Ashraf Laidi at CMC Markets said: "History has shown nations pursuing protectionist rhetoric will experience declines in the value of their currencies."

Mr Laidi indicated that Bill Clinton's trade war with Japan in the late 1990s and, more recently, in 2002, when President George Bush pressed tariffs on foreign steel.

"Recall also that the dollar dropped sharply one week ago on news of Washington's decision to impose tariffs on China's subsidised paper industry," he said.

China said the complaints would "severely damage" trade relations and economists said the comments added to fears that the Chinese treasury may reduce its purchases of US bonds.

The US currency fell 0.6 percent against the euro to $1.3439 and by 0.6 percent to $1.9740 against sterling.

The dollar gained slightly against the yen to Y119.07, however, as the Japanese currency was hit by the Bank of Japan's decision to leave interest rates at 0.5 per cent.

After a 0.25-point increase in February, few economists had expected the BoJ to lift overnight rates so soon. With recent data showing lower inflation and a negative core consumer price index, the central bank was expected to maintain its "very gradual" approach to monetary tightening.

Most currency strategists said they expected the yen to continue weakening as investors funded high-yielding strategies by selling the low-yielding yen.

"The carry trade is alive and well," said Mike Berg at 4Cast, the economic consultancy. He added: "With the BoJ leaving rates on hold, the yen is likely to continue sliding, led by domestic and international investors searching for yield."

The euro hit a record high against the yen, climbing to Y160.10, and was 0.3 percent higher by midday in New York at Y159.91. The yen fell 0.5 percent against sterling to Y235.05.

China's renminbi eased against the dollar on the second day the currency was traded against the US and Hong Kong dollars, the yen, euro and sterling on the new China Foreign Exchange Trade System. The new system was developed jointly by CFETS and Reuters, aimed at providing greater transparency in trading renminbi crosses. The renminbi closed at Rmb7.7352 against the dollar on the exchange-traded market, down from Rmb7.7328 in the previous session.

Sterling, although higher against both the yen and the dollar, fell to a three-week low against the euro following last Thursday's decision by the Bank of England to keep UK interest rates on hold. The pound was down 0.1 percent against the single currency to �0.6814.

Norway's krone gained 0.4 per cent against the dollar to NKr6.0811 and rose 0.5 per cent against the euro to NKr8.1130 after consumer prices rose well above Norges Bank forecasts.

Headline consumer price inflation rose 0.6 per cent month-on-month and by an annualised 1.1 in March.

Henrik Gullberg, strategist at Calyon, said: "Combined with the bullish development elsewhere in the economy and, in the labour market in particular, this is likely to trigger yet another rate hike at the next Norges Bank policy meeting."

You are going to get a lot of opinion but I will point out two important facts:

1. China isn't buying U.S. Treasuries any longer.

2. Neither is Japan.

I don't think that people really understand the implications. For Paulson, Bernanke & Co. For themselves. . . .

If there is any genuine interest we'll go down this road.

You bring up some interesting points.

How many see the London/NewYork gold game as something more complicated than a simple banker-depositor relationship? From there, you can begin to talk about the lender of last resort that provides 45 tonnes to keep some commercial bullion bank or banks from imploding. This is what I would call the Gordon Brown syndrome. (No, I haven't forgotten, nor do I think that anyone sells gold because they want to. In nearly every instance, official gold is sold because they have to.)

Second, I doubt seriously that we will come anywhere near the 500 tonne CBGA number by the end of its fiscal year.

Another reason gold is gaining a head of steam.

http://video.google.com/videoplay?docid=-596805984521272213By all means, let's go down this road, as I for one believe it's the road to hell for the US. For if China, el al., pull out of the US bond market, there will be a shortfall of well over $2 billion a day to finance the USG's operations. Thus will the Fed have no choice but to step in and make up the difference, doing so by printing money that can only send inflation soaring and, with it, interest rates, delivering a body blow for the already reeling housing market and a consequent decline in consumer spending, followed by a comensurate decline in an economy that is 70% dependent on the latter.

Factor in Peak Oil (see link), and you've got the perfect scenario for stagflation on steroids -- i.e., a hyperinflationary depression -- the only question being to what lengths the USG will go to stave it off.

I say the North American Union and the amero, however short-lived this last-ditch effort will be.

What say you and others.

The US$ dollar need not fall at all- gold has risen
for extensive periods as the dollar rose or chopped sideways.
Gold will not plummet out of it's ascending multi-year channel on account of rumors, government decrees, or heavenly UFO sightings.
At the same time, gold's performance will excel in all currencies on account of it's intrinsic, immutable qualities and society's incorrigable faith in it's premier value(s).
But still, the US dollar index is technically, precariously balanced above several important numbers, lines or levels if you will.
Certain dollar index supports and resistances represent economic, financial and monetary triggers (fundamental indications). Policy changes around the world in CB's and Treasury departments and ministries often affect and are affected by currency fluctuations. Implications extend to corporate, institutional and individual liquidity, cash flow, debts and repayment schedules, margin calls, currency repatriation, investments and profits and earnings forecasts etc.
Of course, I am oversimplifying the dollar and other fiat currencies, especially historical background, the matter of foreign ownership of US debt, US public and private deficits and other issues. But I say and have always said the greenback is overbought by a wide margin.
Gold likes to rise in all currencies, and investors in Europe and Japan are every bit as up to the challenge of
patiently watching POG overtake key levels as their US counterparts & the motley crew here at the forum. :)

I enjoyed your post on the "inflation-adjusted" price of gold yesterday. There have been many references to the inflation-adjusted POG here and elsewhere as you know.
Whether the posts or essays or articles dealt
with this subject primarily, or tangentially, they're
nearly always informative and close to the mark.
But what is the 'mark's' eventual or even interim configuration?
Jim Sinclair, Another and FOA for example, opine with such tags as "orders of magnitude" and "giant" moves in POG in 'dollars', implying that we would need to go further back than most have been doing with their "inflation-adjusted" calculations- such as to 1933 or earlier.
Recognizing this, other aspects crowd into focus:
*Surplus money supply in other currencies, particularly the *Pound, the Yen, the Yuan and the Euro.
*Derivatives, Treasuries and other "official" components, and compliments of money supply including several (global) asset bubbles, junk bonds and OTC derivatives.

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-04-11T080215Z_01_NOOTR_RTRJONC_0_India-293799-2.xml&archived=False China to miss G7 economy talks - Germany�|�Reuters.com | Dave Graham | Apr 11, 07

http://www.galmarley.com/Chart_pages/currency_charts.htmYup, thats right, buy the $A for your long-term security ...sure mateys! It's the EWE-raineum. Aust was born on a Sheeps Back ...and Coblat 'n Molly etc etc. No Gold though. It's spoken for 'till 2099 ...D a lot of yoDDing though.
Theres a bit of juice leaching out of some of the others ...Yen-san looks like going into the abyss AGAIN real soon and I don't like the look of the others ...'cept of course the L'il Aussie Bleeder.
Man, what a rock-hard Currency this A$ pup is ...woo-hoo ...buy 'n hold Freaks ...BUY 'N HOLD!!

...and then there was Silver. Looking the goods lately and "smashing" through 48 on the Au:Ag Ratio Chart ...47 by Xmas I'd reckon ;-)

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

http://www.cnn.com/2007/WORLD/meast/04/10/iran.nuclear/index.htmlsnip:

TEHRAN, Iran (CNN) -- A day after Iran announced it had begun production of nuclear fuel on an "industrial level," the head of the country's atomic energy organization said Iran had plans to greatly expand its nuclear program.

"Iran's uranium enrichment program in Natanz does not only aim to install 3,000 centrifuges, but 50,000 centrifuges," Iran's Atomic Energy Organization chief, Gholam Reza Aghazadeh said, according to the state-run IRNA news agency. Centrifuges are used in the process of enriching uranium.

The Natanz nuclear facility is located in central Iran, about 200 miles (320 kilometers) south of Tehran.

Iranian plans to expand its enrichment process to 50,000 centrifuges goes well beyond any previously announced aspirations by Tehran.

"I did not want to create any uncertainty about the nuclear program," Aghazadeh said. "But it is a fact that all of our infrastructure (in Natanz) ... is planned for 50,000 centrifuges."

According to Aghazadeh, Iran's Atomic Energy Organization "intends to develop, optimize and update nuclear technology in the future," including an international tender for construction of two 1,000-megawatt power plants, which he said will be announced in the coming days.

On Monday, Iranian President Mahmoud Ahmadinejad announced his country has begun production of nuclear fuel on an "industrial level." (Timeline: Iran's nuclear program)

"Iran has succeeded in development to attain production at an industrial level," Ahmadinejad said in a speech at Natanz to mark the anniversary of the start of uranium enrichment at the plant.

"With great pride, I announce that as of today, our dear country, Iran, is among the countries of the world that produces the industrial level of nuclear fuel."

He vowed the fuel would be used for energy "and for the expansion of peace and stability," adding that the goal of "progress" for Iran was "irreversible."

Ahmadinejad's speech came on what Iran called its National Nuclear Feast, designed to send a message to the world that the nation would not halt its nuclear activities despite calls for it to do so from many Western governments, particularly the United States, and sanctions imposed by the U.N. Security Council.

-Goldilox

While the western powers brandish thousands of nuclear warheads and fear-monger over the possibility that Iran may be trying to duplicate Israel's covert nuclear weapons program, others suggest that creating competition in the nuclear fuel market may be enough to PO the western nuclear "cartel". Isn't it interesting that Iran's PR highlights that exactly. Whether they have weaponry intentions or not, they are certainly thumbing their noses at the West's nuclear monopoly.

Don't know if the current PTB will eventually use their nuclear death machines or not, but the way people are running around calling nuclear power "green" energy, it would surely be ironic if we avoided nuclear confrontation and poisoned ourselves with "clean" power instead.

P.S. Before anyone accuses me of being a mis-informed "tree hugger", let it be known that I was employed in a major US firm's Nuclear Reload Engineering team during the Brown's Ferry reactor fire. I'm not a bona fide "expert" on all the hazards of nuclear energy, but I have professional experience with some of the pitfalls.

http://www.netdania.com/QuoteList.aspWe'll see how it holds up in the NYMEX, but Uncle Sam's sawbuck is receiving a resounding "no confidence" vote in overseas trading.

Thanks Chris Powell #154089, GoldFeather #154090, otish mountain #154091 and Clink! #154092 for your thoughts and comments.

Reference also MK's #154108 on the implications of Japan and China ceasing treasury purchases and...

Thoreauly's #154110 comment: "...Thus will the Fed have no choice but to step in and make up the difference, doing so by printing money that can only send inflation soaring and, with it, interest rates, delivering a body blow for the already reeling housing market and a consequent decline in consumer spending, followed by a comensurate decline in an economy that is 70% dependent on the latter..."

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

Sir GoldFeather, I am inclined to think that you are right, that "...according to stock market insiders, there is a massive inflation on the horizon." and as Sir Chris Powell remarks: "...cash is to be trash and deflation is a mere hobgoblin."

Perhaps a proportion of those players who might previously have been content to pursue dollar recycling and yen carry trades now realise that the "risk free" government assets into which they may hitherto have converted their borrowings are anything but "risk free"; and are descending too rapidly in absolute value (relative to gold, housing, commodities, or other tangibles - yes, Sir Chris Powell, I think Fekete is right here) to justify this gambit any longer. Hence, the scramble to control assets "of permanent value", as Warren Buffett might have put it...

In this scenario, private equity LBOs are another canary in the coalmine, signalling the monetary inflation that is already upon us and all around us although, like methane, it is flavourless and odourless and colourless at present...

...which brings me to MK's comment about Japan's and China's reluctance to continue buying US treasuries and Sir Thoreauly's comment about interest rates...

Yes, the FED probably has to monetise the governments requests for funds "out of thin air", because it dare not raise rates much higher, which it would need to do in order to continue to attract funds from abroad. There may be another "token" interest rate rise to come, so that the FED may be seen to be "tough on inflation", but this will be a limp gesture indeed compared to the rise that would truly be needed to genuinely keep China and Japan interested in acquiring more treasuries. Such a large rise would spell death and destruction in the housing mortgage markets (not just the sub-prime sector), and that is probably toooo unpalatable for everyone at present. So, Sir Thoreauly, I don't think that high interest rates are on the horizon, just yet anyway, as you suggest...


Sooo....FWIW, I think the FED will just quietly sit back and monetise government requests and hope that the housing slump will sort itself out over time and watch "price increases" manifest elsewhere...aided by LBOs all over the place.

"Trade imbalance!" did someone say? Oh...that's another problem... Perhaps tariff increases will work on that one???

Anyway, the net effect will be depreciation of the dollar and concomitant depreciation of global currencies generally...hence the scramble to exchange paper for tangibles...

Just a few somewhat chaotic thoughts before bed-time in Oz...

:-)

http://timesofindia.indiatimes.com/NEWS/India_Business/Inflation_a_global_problem_says_FM/rssarticleshow/1893547.cmsInflation a Global Problem, Says FM | The Times of India -
Mumbai - April 11, 2007

Mortgage applications down for fourth week - CBS Marketwatch (04/11/2007 6:05 AM)
Most Americans Fear Recession in the Next 12 Months, Poll Finds - Bloomberg (04/11/2007 6:00 AM)
Alt-A Mortgage Market Showing Weakness - AP (04/10/2007 11:35 AM)
Equity derivatives tipped for dramatic growth - FT (04/10/2007 9:08 PM)
Subprime Losers Blame Bear, Credit Suisse, JPM, Morgan Stanley - Bloomberg (04/11/2007 5:59 AM)
Mad Money Is Piling Into Margin Accounts - Forbes (04/11/2007 6:01 AM)
IMF frets over boom in private buyouts - AFX (04/11/2007 6:02 AM)
HUD auditors find widespread mortgage fraud - MSNBC (04/11/2007 6:02 AM)
Nickel and lead peak amid supply concerns - FT (04/10/2007 8:55 PM)
Risky loans - alive and well - CNN/Money (04/10/2007 4:19 PM)
Citigroup to hack 17,000 jobs - CNN/Money (04/11/2007 6:19 AM)
Freddie, Fannie a 'Concern' To OFHEO - Wash. Post (04/11/2007 6:03 AM)
GM executive describes carbon standard as `extreme� - San Jose MN (04/11/2007 6:19 AM)
High Stakes: Ch�vez Plays the Oil Card - NY Times (04/10/2007 5:24 AM)
China hits back at US piracy complaint - AFP (04/10/2007 5:28 AM)
UK looks at repatriating profits tax-free - FT ($) (04/10/2007 8:53 PM)

from reading the posts on goldbug forums and hearing comments from goldbugs, one gets the impression that prices ONLY go up; look at all the inflation all around, everywhere, just sniff it... can't sniff it? well better believe it's there, and inflation leads to higher prices ... and that means gold will ALWAYS go up up uP uP UP UP ... so the argument goes

and i do agree, inflation does lead to higher prices

HOWEVER

and i don't mean to burst anyone's bubble but here's my take on the situation:

"wealth" today is borrowed, everyone is leveraged; when house of cards falls, "wealth" will disappear
and prices of commodities and all assets will go south
because everone got credit and NO ONE HAS EQUITY

inflation was more or less contained in the everyday because no one had any of that money on hand
inflation mostly touched electronic highly leveraged products (everything financial)

but sound money economics (austrian school) teaches that contraction follows inflation
this contraction will not be as bad as the great depression because then the money was tied to gold
but money is arbitrary now so no one really knows how big the house of cards really is
and the fed will be inflating out of the recession, which will set the stage for higher prices in assets (basic goods too, probably) LATER ON
(judging from greenspan's testimonies, central bankers are ok with mild recessions - they balance inflation with economic growth (stable price or controlled fraud) so that they can rob but keep the robbery just below the radar ... no panic -> game goes on)

so my take is that we're not yet done with the deflationary period

all constructive comments are welcome

I see it as you do. It's hard to envision who would step to the plate with enough muscle to finance the U.S. government under present circumstances. The sheer magnitude of the hole left by China and Japan opens the door to all sorts of concerns. Chris Powell posted a link today which suggests that TreasSec Paulson and other officials in the U.S. government are secretly pleased with diminution of the dollar. How does that square with getting people to buy the debt which is denominated in dollars?

It doesn't and Paulson's primary job is selling the debt.

There are only so many economies capable of buying the debt. (I note that the Treasury figures on British support in the Treasuries market was greatly exaggerated and the oil exporters are also getting skiitish) Soon the list get's thin. Then it just gets filed in some bureaucratic drawer because it doesn't matter any more. How do all the arguments about the necessity of certain countries honoring the long-held quid pro quo stack up against the reality of China and Japan no longer buying U.S. Treasuries?

This is not some small thing. It carries enormous implications. Not only must we entertain the prospect of printing money to finance the U.S. government. We must also consider how it will affect America's ability to project itself militarily on a global basis. It's difficult to assess what this is going to mean for the G-7 "industrial" countries which have depended on American military superiority over the years. If the military cannot be financed, it cannot be fielded. When you look back in history, there are a couple examples of military might which existed one day and then almost completely disappeared the next. Rome comes to mind. So does Great Britain. How much the U.S. Navy will have to be mothballed, for example, if it cannot be fueled and operated? I would suggest that America's critics though might hold their applause. The instability to the world economy which will come as a result could usher-in a very unpleasant set of circumstances. The Dark Ages did not have their effect on Rome alone.

Given all this, I believe that the seeds are being sown this spring for a crisis of enormous proportion in both the near and medium term futures, and none of the pundits in the mainstream media have given this problem proper attention. When faced with a long list of negative scenarios, the problem of financing the American government to many observers takes on the importance of all the rest. But let me say again, this is not your run of the mill "crisis." None of us are immune to the results of this crisis quietly building behind the scenes.

I note in this morning's paper that China will not take part in the upcoming G-7 conferences on the international economy, trade, etc. Is this a boycott? Or is it another political stratagem on the part of the Chinese to avoid a commitment to free currency exchange rates and pressure to support the U.S. Treasuries market? If nothing else, it sends a message of digging in its heels. Positions are being honed to a sharp edge, and that, at some point, will be viewed with alarm in the world's capitals.

In short the dollar-based quid pro quo which has fueled the world economy over the past half century appears to be breaking down and all of us had better do something to cushion the upcoming shocks.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteThe PPT "shorts team" seems to be coming out when we hit 680 now, which just happens to bring the June contract above Sinclair's 682 "angel".

http://www.chron.com/disp/story.mpl/headline/biz/4702512.htmlsnip:

-FORT WORTH -- D.R. Horton, the nation's largest homebuilder by deliveries, said today its second-quarter sales orders fell 37 percent, led by even steeper declines in California and the Southwest.

"We continue to sell more homes than any other builder, even though the spring selling season has not gotten off to its usual strong start," Chairman Donald R. Horton said in a statement.

Net sales orders for the quarter ended March 31 totaled 9,983 homes, down from 15,771 homes during the prior-year quarter. The value of the orders dropped to $2.6 billion from $4.4 billion in the previous year.

Net sales orders for the first six months fell to $4.9 billion, or 18,754 homes, from $7.5 billion, or 27,234 homes during the same period in fiscal 2006.

Cancellation rate for the second quarter was 32 percent.

"Our cancellation rate is essentially unchanged from the prior quarter, but it remains above our historical range as we continue to see an increase in the use of sales incentives in many of our markets," Donald Horton said.

He said inventory levels of new and existing homes remain high, as market conditions remain challenging.

The Fort Worth-based company saw declines in every region, but experienced the largest quarterly drop in California, where orders fell 59 percent to 1,107 homes from 2,697 in the prior year. Orders in the Southwest fell 39 percent.

Home orders in the Northeast declined the least, falling 21 percent to 1,564 homes from 1,990 a year earlier.

-Goldilox

"Ouch"

http://www.financialsense.com/fsu/editorials/dorsch/2007/0410.htmlDruid: More signs along the trail that old relationships are being strained. The last paragraph sums it up. Just maybe the situation is playing into the ECB's hand of a rising gold price in tandem with a strong Euro. Does "Freegold" sum it up?



"Euro /Yen Carry Traders wreck Havoc on ECB

Because of Tokyo's refusal to raise its interest rates, supported by the US Treasury, European central bankers find themselves in a dilemma. The Euro M3 money supply is exploding at a 10% growth rate, and requires a tighter ECB money policy to head-off inflationary pressures in the Euro zone economy. Yet unilateral ECB rate hikes that are not matched by the BoJ could send the "Euro /yen" rate much higher.

European finance ministers are staunchly opposed to Tokyo's cheap yen policy, and drew a line in the sand for the Euro at 160-yen at the Essen G-7 meeting. European finance ministers view Tokyo's weak yen policy as a clandestine attempt to aid Japanese exporters in grabbing market share around the globe at the expense of European exporters. On March 20th, EU finance chief Jean-Claude Juncker said the Japanese yen must reflect the fundamentals of the Japanese economy.

"The fact that the Bank of Japan didn't raise interest rates hardly surprises me," after the BOJ left its overnight call rate target at 0.50% on March 20th. "I think that some people in Europe and elsewhere had got their hopes up after the recent interest rate rise. We stick to the message that we sent at the Essen G-7 meeting," Juncker said.

"We think that Japanese growth is without doubt picking up. We think that the exchange rate must reflect the fundamental facts of the Japanese economy. Our Japanese friends know that. And we are watching them," Juncker warned. But without higher Japanese interest rates, European "jawboning" is losing its potency.

It won't be the first time that Tokyo has broken a pledge to cooperate with the G-7 on foreign currency issues. On Sept 20, 2003, the G-7 finance ministers called for Japan to reduce its sales of the yen, after it had already sold an unprecedented 9-trillion yen ($76.8 billion) from January through July 2003. But Tokyo resumed massive yen sales within a few weeks, dumping 26 trillion yen on the market from November 2003 thru March 2004, to prevent the dollar from tumbling to 100-yen.
The "Euro /Yen" carry trade is starting to turn the ECB's monetary policy upside down. The Euro's recovery from 151-yen on March 5th to a record high of 160-yen on April 10th, enabled gold to rebound from a low of 480 euros /oz to 506 euros /oz. European traders can borrow yen at roughly 1% and buy gold, while pocketing the Euro's gains against the yen. At the same time, Germany's 10-year bund yield briefly rose to a 3-� year high of 4.15%, reflecting higher gold prices.

The Euro's strong recovery to a record high of 160-yen is linked to ideas that the European Central Bank will hike its repo lending rate by 50 basis points in the months ahead, and won't be matched by the Bank of Japan. Thus, in a strange twist of logic, signals of a tighter ECB money policy are actually elevating European gold prices, because of the distorting impact of the "Euro /yen" carry trade.

Gold would be about 3% higher if the ECB hadn't stepped up its sales in March, by dumping 45.5 tons into the gold market. Yet gold still managed to climb against the Euro last month, despite the ECB's stepped up sales. In Sept 2006, when the ECB dumped 50 tons of gold in the spot market and sold 100 tons in the forward market, gold plummeted by 40 euros to 440 euros /oz. In May 2006, when the ECB dumped 75 tons, gold plunged 120 euros /oz to 430 euros.


What's fascinating about the Euro /yen exchange rate these days, is that tiny moves in interest rate differentials between Europe and Japan are leading to explosive moves in the cross rate. The Euro's recovery from 151-yen to as high as 160-yen today, was accompanied by a mere 16 basis point increase in the Euro Libor rate over the Yen Libor rate. If the ECB has to lift its repo rate by at least 50 basis points to control the M3 money supply, without a similar increase by the Bank of Japan, the Euro /yen rate could soar, and in a strange twist, lift gold prices and German bund yields much higher, just the opposite of what the ECB would like to accomplish."

http://www.guardian.co.uk/russia/article/0,,2054142,00.htmlThis is one of several excellent new articles on this topic:
Russia threatening new cold war over missile defence
Kremlin accuses US of deception on east European interceptor bases | The Guardian - Luke Harding in Moscow
Wednesday April 11, 2007
Excerpt:
"Russia is preparing its own military response to the US's controversial plans to build a new missile defence system in eastern Europe, according to Kremlin officials, in a move likely to increase fears of a cold war-style arms race.
The Kremlin is considering active counter-measures in response to Washington's decision to base interceptor missiles and radar installations in Poland and the Czech Republic, a move Russia says will change "the world's strategic stability".

The Kremlin has not publicly spelt out its plans. But defence experts said its response is likely to include upgrading its nuclear missile arsenal so that it is harder to shoot down, putting more missiles on mobile launchers, and moving its fleet of nuclear submarines to the north pole, where they are virtually undetectable.
Russia could also bring the new US silos within the range of its Iskander missiles launched potentially from the nearby Russian enclave of Kaliningrad, they add.

In an interview with the Guardian, the Kremlin's chief spokesman, Dmitry Peskov, said Moscow felt betrayed by the Pentagon's move. "We were extremely concerned and disappointed. We were never informed in advance about these plans. It brings tremendous change to the strategic balance in Europe, and to the world's strategic stability."

He added: "We feel ourselves deceived. Potentially we will have to create alternatives to this but with low cost and higher efficiency." Any response would be within "existing technologies", he said. As well as military counter-measures, Russia's president, Vladimir Putin, also wanted "dialogue" and "negotiations", he added."

http://news.goldseek.com/GoldSeek/1176303721.phpBlanchard Economic Research Note - Neil Ryan
Posted Wednesday, 11 April 2007 | Snippit:
"Another set of bullet points about the market today:

ECB gold sales were updated again this morning and the increases in sales have continued. This past week there were roughly 12.1 tonnes of sales into the marketplace from two captive central banks in Europe. In the last month, the gold market has seen 57.6 tonnes of sales. This compares to the previous month of less than about 10 tonnes of sales in total. The gold market hasn't seen this level of sales since 75 tonnes were sold into the market in May '06 and the gold price cratered over $100 per ounce. In the month since the increases in sales began, gold has increased in price by over $40 per ounce. In the past, significantly increased sales meant the market would have a bout of price weakness. This has been the opposite case the last month. There is no more bullish factor for this market in our opinion than to see how robust the physical demand is at present while it continues to gobble up the major increases in bank sales and trend higher."

@ mikal,

Think where PoG would be without those 65 tonnes entering the "market" - that is if they really hit any "public" market.

My sniffing the breeze has reached a similar conclusion as you have re: deflation zeev, a couple of points if I might?

They (inf and def) are not necessarily two sides of the same coin though imo. I particularly like the "Log-jam" analogy where upstream you literally can't move for logs and downstream nary a log can be found.

This is being reflected in "all things financial" where those close to the "forest" ie: Banks etc. are "enjoying" boom times (record bonuses and whatnot), whilst the further away you get from the "source" the harder it is to wallow in it.

The more logs they cut (hyperinf), the greater the pressure on those reliant on the reduced trickle "downstream", witness the low and lower Yields ...def).

There is no, ABSOLUTELY NO remedy zeev ...we've just got to watch it happen (the Dam will ultimately burst) ...preferably with Gold in hand.

"Think where PoG would be without those 65 tonnes..."

Your caveat use of " " and the phrase 'that is if' are especially important.

Why?

Because, like a magic act, not everything on this stage is exactly as it is meant to appear to the general audience. The view is quite different if you are among the fortunate few loitering backstage or working in the wings with an eye on the trap doors, the mirrors, the ropes, and the pulleys.

The audience gasps one of two things, depending on the short-term price performance: "These sales are drowning gold!" or else, "Look at gold's strength despite this weight of sales!"

The backstage truth of the matter is that the absolute turnaround in gold's behavior/fate was orchestrated the very day that the European Central Bank Gold Agreement was made public in September 1999 (although the planning took place for months/years prior).

That is to say, in the big picture, gold's rise of this past half decade has been part and parcel with the European Central Bank proactive gold maneuvers.

We might even be so bold to say that if Europe had instead simply sat on its thumbs (and on its gold) in the business-as-usual paradigm of the past couple decades, the general audience today might likely be looking upon gold as an obsolete relic -- an asset wallowing somewhere in the $200 - $250 range -- a continuing victim of the rivalling Uncle Sam Magic Show.

Happily, however, that was not the decision adopted in Euroland and elsewhere. Like a dove pulled from a cage beneath a scarf, gold is being set free. Everything else is just a necessary part of the act to keep the audience spell-bound, riveted to their seats.

Get up out of your chair and go buy gold while it remains on sale nicely priced in the uncrowded lobby.

R.

You've got it. And then there's the invisible sales. Bill Murphy's Midas reported on Monday that the Stalker says the IMF is selling gold and that China's buying gold.
And then there's the paper shorts on the Comex, TOCOM
which have yet to cover, unless they're granted immunity.
Keeping POG down indirectly is the Exchange Stabilization Fund, the PPT and counterparts in London, Tokyo etc.
Last night I asked myself how the retirees and welfare recipients in a few years trying to collect SS benefits and Medicare, confront the entitlements and pension situation which could crumble at any time and which Greenspan spoke of as at great risk.
Well they'll have lots of company for one thing.
Job losses and collateral shutdowns and closures translate into more private pension defaults, cutbacks and shortfalls.

http://mises.org/story/2532...in a similar vein ...via trotsky next door tks.

re mssg 154125.

It used to be "speak softly and carry a big stick". now we seem to speak loudly and cut up the big stick into so many chopsticks: it hasn't improved our image- and we dont seem as meanacing as before.

Printing money isn't the only option. We have seen numerous creative solutions, from mysterious "Wanta-like" carribean hedge fund "buyers" to short busting raids. These are hardly a long term solution, but neither was the unsustainable "asian banker-sugar daddy" model.

Clearly, global banking, at some point, requires the credible threat of force. As the consequences of the emasculation you forsee are dire, perhaps there will be a reorganisation to forestall it?

Perhaps this is the reason for so much delay over the persian issue: we have stopped the chess match and are arguing over the thermostat and the room lighting. So much money and firepower, and yet so little to show for it.

And amidst all this, the real prizes may still be bought for trifling bit of paper.

http://news.yahoo.com/s/ap/20070411/ap_on_bi_ge/bernanke_hedge_funds;_ylt=ApEky3rD3RPd2GDufXV7b.rMWM0FAll market riggers will be delighted.

* * *
Bernanke: Current Hedge Fund System OK

By Martin Crutsinger
Associated Press
Wednesday, April 11, 2007

WASHINGTON -- The current market-based system is the best way to regulate the trillion-dollar hedge fund industry although improvements can be made, Federal Reserve Chairman Ben Bernanke said Wednesday.

Bernanke, speaking to a conference on global economics in New York City, said that the current system is superior to increased government regulation. That view is at odds with critics who say large failures in recent years highlight the need for greater supervision.

"Thus far, the market-based approach to the regulation of hedge funds seems to have worked well, although many improvements can be made," Bernanke said in remarks prepared for delivery to a global economic conference sponsored by the New York University law school.

Bernanke noted that the collapse of a Connecticut hedge fund, Long-Term Capital Management, came during a period of severe financial stress in 1998.

He said Congress correctly rejected suggestions after that failure to impose greater government regulations. He said in the last 10 years the ways investors have to manage risks "have become considerably more sophisticated."

Bernanke did not mention in his speech last fall's collapse of another hedge fund, Amaranth Advisors, which critics contend shows the need for greater government oversight.

Instead, Bernanke said he supported the conclusions reached by the President's Working Group in February, which stated that what the hedge fund industry needed was increased vigilance on the part of investors rather than new government rules.

"To be clear, market discipline does not prevent hedge funds from taking risks, suffering loses or even failing � nor should it," Bernanke said.

"If hedge funds did not take risks, their social benefits � the provision of market liquidity, improved risk-sharing and support for financial and economic innovation, among others � would largely disappear," he said.

Bernanke is a member of the President's Working Group, which was formed in the wake of the 1987 stock market crash. He has previously stated worries that the government could over-regulate hedge funds.

There are more than 9,000 hedge funds with assets that now top $1 trillion in the United States. They traditionally have catered to the rich but smaller investors can be exposed through holdings of pension funds.

The funds, which operate with minimal government supervision, can invest in anything from commodities to real estate. Some hedge funds buy entire companies while others buy and sell stocks like day traders but with billions of dollars at stake.

http://www.ft.com/cms/s/cc7cf5ce-e84a-11db-b2c3-000b5df10621.htmlHedge Fund Report to Split Views

By Ralph Atkins and Mark Schieritz
Financial Times, London
Wednesday, April 11, 2007

An international task force charged with investigating the fast-growing hedge fund industry will stop short of proposing concrete steps to beef up its policing by financial regulators.

The draft conclusions of a report due to be presented next month to finance ministers and central bank governors from leading industrial nations are likely to disappoint continental European governments worried about risks to financial stability posed by the sector. The report highlights the complexity of the possible risks involved, according to information obtained by the Financial Times.

Details of its draft conclusions have emerged as hedge fund representatives prepare to meet deputy finance ministers from G7 advanced industrial countries this weekend to discuss ways of increasing transparency in the sector.

In February, G7 finance ministers meeting in Essen, Germany, asked for an updated report on hedge funds from the Financial Stability Forum, an international grouping of regulators and central bankers chaired by Mario Draghi, Italy's central bank governor and a former vice-chairman of Goldman Sachs International.

The initiative has helped the Berlin government drive forward the debate on how to encourage transparency in the sector without calling into question its economic benefits. Britain and the US remain wary about creating any additional regulatory hurdles. Germany holds the G7 presidency.

The draft version of the Financial Stability Forum's report circulating among finance ministries argues that supervisors have a role in setting expectations regarding risk management practices by banks and financial institutions dealing with hedge funds. But it does not mention ideas floated in Germany for a global database of hedge fund investments, a code of conduct for the sector or enhanced public scrutiny by rating agencies.

Instead, the report cites steps under way by supervisory organisations to improve the measurement of possible exposure to risks and to strengthen financial market infrastructure.

Nevertheless, the Berlin government is likely to believe its case for pressing ahead with its hedge fund initiative has been strengthened by the report's warnings on the risks involved with increasingly complicated hedge fund activities. The report notes how these activities account for a significant part of the turnover of many financial markets.

The report also says its rapid growth has so far coincided with a beneficial global macroeconomic environment. However, increased product and trading complexity has created additional difficulties in measuring risk, and the report argues that financial markets are showing signs of complacency about the possible risks, which may have been underpriced.

The debate on hedge funds initiated by Peer Steinbruck, Germany's finance minister, is expected to culminate ahead of this year's G8 summit in Heiligendamm, on Germany's Baltic Sea coast.

http://www.jsmineset.com/cwsimages/Miscfiles/4467_Gold_ETF_Chart_4-10-2007.pdfAnother relief-valve factor on POG:
Streettracks(GLD) Gold Holdings (Closing in on 500 tons w/100 tons added in just over the last 5 months alone)
http://www.jsmineset.com/cwsimages/Miscfiles/4467_Gold_ETF_Chart_4-10-2007.pdf

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=The after Gold market spike in Bond Yield and Buck today is interesting and requires resolution.
Whilst Buck came and went as the a'noon wore on, Bond was left in "soft" territory.
This "should" give cause for a Gold "spike" in the offing imo, unless of course the e-Bond brigade buy it up in the o'nite session.
Lately however, they're not in the habit of doing that.

Lets watch!

New ETF's popping up all the time. Even Japan's getting into the act. So far, so good, but it's not going to do much to quench the gold thirst when things hot up.

My msg #154134 was replying to your msg#154131. Sorry.

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

April 11 (MarketWatch) -- Gold futures closed marginally higher Wednesday, as the dollar recouped some of its prior-session losses and crude-oil futures traded flat on conflicting supply data. Gold for June delivery ended up 20 cents at $681.70 on the New York Mercantile Exchange.

"[There are] some reports of profit-taking ahead of the G-7 meeting later this week, but traders still see a bullish trend as lingering geo-political tensions and inflation pressures are likely to attract bargain hunters and support gold prices," said analysts at Action Economics.

The dollar edged up against the euro and yen Wednesday, stabilizing after a sharp decline in the previous session. Traders focused on the minutes from the March 20-21 meeting released Wednesday after the gold market had closed.

U.S. Federal Reserve members were very uncertain about the economic outlook and changed their policy statement to gain more flexibility to respond to the incoming data, the minutes said.

"The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the FOMC minutes said.

"Instead the statement should indicate that future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the minutes said.

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

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News⊂section=market+news&month=April2007&file=Business_News20070412201.xml(Reuters) 4/12/2007; DUBAI -- The futures exchange in the Gulf Arab emirate of Dubai said yesterday it would begin trading Indian rupee contracts within two months to cater for India's growing share of international trade and investment.

..."The Indian rupee futures contract will be of use to traders who import into, and export from, India, together with others who remit funds to India," DGCX said.

The UAE, the Arab world's second-largest economy, now ranks third after the United States and China in terms of India's annual two-way trade.

It wants to become India's leading trading partner, its prime minister said in March. Foreigners make up 85 percent of the UAE's population of about 4.1 million, most of them from South Asia.

^___(from url)___^

This stands to reason. Focusing on the gold perspective...

Dubai is striving to be a foremost gateway of gold in the world. India is currently the foremost gold importer.

R.

http://www.gold-eagle.com/editorials_05/zihlmann011005.html
An assessment of the rate of decent in the dollar index seems to indicate that since February, the dollar has declined an average of one whole point each month. If this trend stays the course, the dollar index will fall below 80 sometime in the middle of June.

There have been several articles stating that the dollar will no longer be the world's trade unit if the 80-index threshold is broken.

snip from an 2005 article:

"A drop of the US Dollar Index below the 80 level could signal the end of the US Dollar's status as the world's single and undisputed reserve currency. The longer it stays below the 80 level, the clearer the world will recognize that fact -- and act on it."

Given the basically "linear rate" of decent, it appears that the PPT are losing their ability to "significantly" move this market, or, they are working in step, with their new "masters". Either way, if the rate of decent remains constant, the month of June should prove to be interesting.

SF

http://wjz.com/businesswire/Norway-OilFundEthics_f_f_9----/resources_news_htmlApril 11, 2007
OSLO, Norway (AP) -- Norway's government dropped the South African company DRD Gold Ltd. from its global investment fund due to concerns about its environmental practices, the finance minister announced Wednesday.

...Norway is the world's third largest oil exporter, after Saudi Arabia and Russia. The Nordic nation of 4.6 million people sets aside surplus petroleum revenue in the Government Pension Fund Global (formerly the oil fund) that was worth 1.784 trillion kroner ($291 billion) at the end of 2006.

A national Council of Ethics routinely reviews investments by the fund, and, acting on its findings, the finance ministry on Jan. 29 ordered the fund to secretly sell off all 4 million kroner ($655 million) of its DRD Gold shares.

Since the government imposed the ethical guidelines in 2004, 18 other companies remain excluded. One other, the U.S. group Freeport McMoRan Copper and Gold Inc. was excluded for environmental reasons in June 2006, while most of the others were dropped because of their role in producing weapon types that Norway opposes.

^___(from URL)___^

Another in a long list of reasons to choose the metal over the miner in the construction of your portfolio.

[If your sympathies are indeed with the responsible miners of the world (as mine generally are as a CSM alum), you can take comfort knowing that your physical purchase provides them with the best kind of support -- via the market mechanisms which are set into motion through demand for the finished product.]

R.

Somewhere along the line I did read there would be a well orchestrated decline of the dollar. The world is slowly turning against it as the demand for payment in Euros for Oil by each small producer. Hubberts Peak plays into this as the major oil fields decline and no major finds come to light, compounded by heavy crude as compared to light sweet. I might add as to the devalued dollar heads south the cost will rise per barrel. Americans do not care where it comes from. Whether it be from Alaska or the ME. One thing I do Know is that things are going to change. Waiting for the day when I have nobody climbing up my butt on the interstate and the fool who drives like a mad man in and out of traffic can't pay for his gas.
Slingshot--------<>

slingshot #: 154147

Sir Slingshot

I live in SoCal, where the pace of life is too fast, and so are the cars on the freeway. Traffic is a nightmare, and being a long time biker, (35+ yrs), I now ride a motorcycle everyday to work in order to cut through the traffic jams. I too agree that within the next 3 years, traffic on SoCal freeways will probably drop by 35 to 50% as the POO skyrockets.

Given that the rate of decline of the dollar looks fairly linear, it is hard not to believe that the decline isn't orchestrated by "the powers".

Live well and long Sir Slingshot.

SF

http://www.gasbuddy.com/gb_gastemperaturemap.aspx@ Slingshot,

As SilverFox and I have discovered, the SoCal "parking lots" are best countered with 40+ MPG bi-wheelers. Fortunately, our weather also supports this switch, although today's electric-lined clothing and waterproof kevlar fabrics make riding in cold, soggy jeans only a fashion option. I even have a pair of steel fabric lined jeans for safety with a traditional look.

At $3.65/gal, it already pays dividends beyond the odd bit of entomological protein to accompany one's smile.

The other thing I notice is that the motorcycle dealerships seem to be a lot busier than the auto showrooms, so more boomers are returning to their younger "roots".

Ref zeev #154122

Ahhh yes, Sir/Lady zeev, you are indeed right to be cautious. A couple of comments if I may...

1. There is no doubt that there is a lot of debt out there, which is all the more reason why the Fed will be reluctant to tighten the spiggots too vigorously. Somehow it has to get people to "behave more responsibly" without either spooking the lead cow or suffocating the herd hollus bollus with higher rates. In a scenario with runaway defaults in the housing market, leading to plummeting house prices and erosion of people's equity in their homes and widescale "wealth evaporation", major economic slowdown, falling commodity prices etc. etc., then cash will be king.

The reason house prices may fall is that people try rushing to the safety of cash in a world with insufficient liquidity to comply with everyone's demands/wishes. (Liquidity is the combination of funds-availability and a general willingness to spend.) The availability of credit alone does not guarantee that people will actually avail themselves of it and spend it. This is the deflationary situation that the Fed will attempt to avoid at all costs.

Whether the price of gold goes up or down in this deflationary scenario depends largely on the balance of people's perceptions: (a) some will see gold as the paragon of safety, like cash, (b) while others will see gold as just another commodity to be consumed industrially in a faltering economy...

It is important, in this scenario, to remember that "the world" involves more than "the USA"; and people's perceptions of "gold" differ from place to place.


2. The massive creation of dollars that has been occurring over the last 50 years, and especially the last 20 years and their "export" in return for oil and consumer goods, has been fine while-ever the perception in the minds of foreigners has been that the USA represented a good place to reinvest your profits.

However, with US fiscal and trade deficits now at record levels and not looking good in the future, military gambits in Iraq and Afghanistan struggling (and likely to fail in their initial objectives), and with the Fed clearly having to monetise government debt going forward, perceptions have changed. The change has been signalled loud and clear by China and Japan, and by numerous other entities who have been overtly (or covertly) diversifying out of dollars and into euros, gold and commodities.

An economic slowdown in the USA will be a serious enough event, but perhaps not as important as it once would have been, because now we have the domestic growth in the BRIC countries to take up a lot of the slack. However, what will be important will be the ongoing flood of new dollars that will no longer be resting contentedly under the trusteeship of Uncle Sam and will seek productive purposes elsewhere in the world. Is the rest of the world going to be able to absorb these flows PRODUCTIVELY? If it does, then maybe all will be well. However, if it cannot, then we might expect price "bulges" here and there brought on by a combination of many dollars bidding up the price of a limited number of good assets, accentuated by the very clear and widespread perception that those very same dollars are depreciating rapidly in absolute exchange value...

3. Lots of words here and probably very little meaning...but the upshot, Sir/Lady zeev, is that I agree with you. We are not out of the deflation woods yet, but I think the Fed and monetary authorities in the rest of the world will do all in their powers to avoid it, and err strongly on the side of inflation...

Comments welcome...

Cheers

:-)

Bi-wheelers:

As you know, bi-wheelers rule the roads in SoCal. Recently, I modified my strategy. I just purchased a used BMW1150RTP, which had been a CHP motorcycle. While wearing my white open-faced Bell helmet, as I am splitting the difference through the daily afternoon traffic jams, I seem to get a little more respect & clearance. At 43 mpg & a 6.6-gallon tank, I have range approaching most of my 4 wheelers. Even with that fuel economy, the bike accelerates from 0 to 60 mph in 4.0 seconds, which is way faster than I need.

Downside of new bike: when in regular traffic, most cars slow down to the speed limit, slowing me down. Ride safe Goldilox.

SF

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=Worked it's magic to apply pressure on PoG ...contrary to expectations.

Bugger!

U.S. stock futures edge lower - CBS Marketwatch (04/12/2007 5:12 AM)[Does that mean someone's edgy or is something on the edge?]
Euro Builds on Gains Against U.S. Dollar - AP (04/12/2007 5:15 AM)[Building a better fiat]
Gold Gains on Demand for Alternative to Dollar; Silver Declines - Bloomberg (04/12/2007 5:40 AM)[Gold gains for a many good reasons like CB debauchery, but we prefer euphemisms and fantasy]
Oil rises toward $63 on inventory concerns - CNN/Money (04/12/2007 5:14 AM)[Oil markets- so simple a child could be on top of it]
U.S. Import Prices Rise 1.7 Percent, Increase 0.3 Percent Excluding Oil - Bloomberg (04/12/2007 7:58 AM)[Is there any redeeming feature to this laughable monthly ritual?]
U.S. Initial Jobless Claims Rose 19,000 Last Week to 342,000 - Bloomberg (04/12/2007 8:00 AM)[Is that using roman numerals or some other system?]
Record federal spending in March - CBS Marketwatch (04/11/2007 1:46 PM)[Good on 'em!]
Fed views inflation as biggest risk - FT (04/11/2007 10:04 PM)[Yes, how can you not when you see a Freight Train's nose on one side of you but it dissappears when you turn to 'view' inflation on the other?]
US plans curbs on subprime lenders - FT (04/11/2007 10:01 PM)[Big government- where would we be without it?]
Wage inflation might spell trouble for bonds - Reuters (04/11/2007 1:47 PM)[Trouble for bonds? Who would imagine?]
Concerns mount over commercial MBS market - FT (04/11/2007 10:07 PM)[How high does the pile of concerns have to 'mount' anyway?]
Private Equity May Be Circling Buyout Drain - WSJ ($) (04/12/2007 4:54 AM)[Hey, they stole our analogy!]
Nestle to buy Gerber for $5.5 billion - Houston Chronicle (04/12/2007 8:19 AM)[Kids deserve SOME chocolate, but let's be realistic]
Weakening US economy hits truckmakers - FT ($) (04/11/2007 10:08 PM)[Another industry kamitsueed]
U.S. eliminates duties on steel imports - Chi. Trib (04/12/2007 4:41 AM)[Who said we're not generous? Could this mean we really are a colony?]
Senators demand rules to prevent air passenger strandings - Houston Chronicle (04/12/2007 8:21 AM)[Well stopgap measures are fine, but when Big Brother wants to kidnap someone, that won't stop them.]
Summer dairy prices headed up - Boston Globe (04/12/2007 4:50 AM)[And meat and gas and steel and ...]
China: Foreign Reserves Above $1.2 T - AP (04/12/2007 5:15 AM)[Now that's a windfall by any measure... except gold]
China's Money-Supply Growth Holds Higher Than Target - Bloomberg (04/12/2007 5:26 AM)[Is this what they call 'fringe benefits'?]

Headlines tell it all. Good work.
Slingshot------<>

Well, let's sum it up today: oil up 2%, the dollar severely breaking down below the 82.40 long-term low, the bond in comatose bliss, SA gold production down 8%- perfect day for a gold smackdown. Can there be any doubt we have an intervention culture of corruption firmly in charge at the Fed? It's weird as I now know instinctively any really bullish gold day will almost ALWAYS result in a sell-off.

Just because the warning blinker light has been deliberately broken doesn't mean the engine isn't ready to blow up. I think I can already see the smoke billowing out of the hood....

Wow, someone galdly bought up everything that was thrown at them during the traditional 10:00 am POG smack down this mornnig.

"Keep the rising gold price under control; fall back to higher prices as necessary, but expend GOLD to keep the rise as slow as possible, so as to deflect general attention away from the TREND, which will be up. Subject gold to dips, so that the MEDIA can talk about the VOLATILITY of gold and repeat again and again, that gold is a risky asset, only for the stout of heart."

"Public attention must be drawn away from gold and on to paper assets as the easier, faster and surer way to wealth."

SIERRA

@ Silver Fox,

I rode an R1150RTP loaner when my Cruiser was in the shop for new brakes and tires, and experienced the same uptight reaction from other drivers. I bought my second Cruiser from an OC geologist who also bought an RTP at auction.

I guess we're conditioned to "behave" when we think the law is watching. Now if the SEC can get Wall St to believe they are watching the naked shorting for something other than "entertainment", we might see some of the illegal Wall St practices "slow down". SarbOx did almost nothing, as everyone seems to believe that the "sacrificial lambs" have already been slaughtered, and few additional prosecutions will result from it.

I tend to agree, since anything that sputters this market put the US$ at major risk. My group hosted a SarbOx technical conference in OC a couple years ago, but changed the topic quickly afterward, as interest waned.

When I lose at Poker sometimes......

THE DOLLAR? Well you don't think we are going to see any mofe fallout from this debacle ........


Read GRandich .....He pretty well summarizes.....what this way comes......

THE IRS / Yes I'm disgusted I'm accounting for my business to a a bunch of HUCHSTERS.......


but there is hope ...........to dissappear into a NEW LAND
Of discression after the Fallout

Thanks as always to my friend, G, for the tips to news items that are often below the radar.

To long-time readers here, it shouldn't come as a surprise that the traditional channel for acquisition, the interbank market, is proving too thin to meet the objectives of the Central Bank of Russa.

Interfax is reporting that "a source familiar with the bank's plans" says the bank is now contemplating acquisition directly from the source -- from Russian extraction companies.

And why not? After all, if forex cash is simply absorbed into reserves and used to bid on foreign bonds, the Central Bank is effectively throwing its support behind the foreign economies that (may or may not) ultimately stand behind those bonds. So, instead of empowering foreign interests by acquiring and monetizing those foreign IOUs, it makes better political sense to support the participants in the domestic economy -- and ultimately have undefaultable GOLD in your CB reserves to show for the effort.

It's slightly more complex than this, but this outline should give you a head start on your thinking. And maybe you'll gain an insight into the offically-supported amped-up gold production efforts currently underway in China and elsewhere.

R.

http://www.nymex.com/media/delivery.pdfSadly, we appear to be in that time of the del'y month when gold (or the pricing thereof) comes once again under the direct influence of Bond ...and all that that entails.
The period where Gold (pricing) can be aligned to alt Dollar ie: acting in it's alt CASH role, has diminished to a couple of weeks/Dely mth ...thanks (and I do sincerely mean "thanks") to trading volume via Comex/Access.
The most encouraging aspect of this "pricing" arrangement as I see it is that it doesn't in any way reflect the upserge in Physical offtake ...ultimately, great chunks of humanity are and will come to this REAL-isation real shortly!

No concerns heard in the press, magazines or the tv news as the dollar continues to slowly decline. (A quick check, nope, still no mention). You can't blame the herd for believing that all is well in fantasy land as it is the only thing in the press. Sadly, this isn't just the USA that has this happy press. Around the world, most countries are busily printing fiat money, while the "big" herd keeps dancing to the music. :-(

SF

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

April 12 (DowJones) -- Gold futures managed to bounce back from their earlier lows Thursday when physical buying emerged on a pullback, plus crude oil rose but the dollar fell, traders said.

June gold fell $2 to $679.70 on the Comex division of the New York Mercantile Exchange. Comex gold at one point fell as far as $675.50.

A couple of traders at the time blamed this largely on long liquidation, perhaps with some spillover effect from the weakness occurring in copper. But the precious metal recouped much of the earlier decline.

"We do see a good underpinning of physical buying when we get to about $675-ish," said Paul McLeod, vice president for precious metals with Commerzbank.

"There is the view that physical demand is there and willing to provide a floor right now, at least on the gold side."

Analysts with TheBullionDesk.com also noted that physical buying appears to be occurring on dips lately.

The moves in crude oil may be offering some support, observers said. "But I think it (gold) is trying to make a move on its own fundamentals," said McLeod.

Shortly after Comex gold closed, May crude oil was up 93 cents to $62.94 and the euro had risen to $1.3478 from $1.3430 late Wednesday. The single European currency managed to touch $1.3500 for the first time since January 2005.

In other news, a meeting of Group of Seven finance ministers and central bankers is to begin at 2:30 p.m. EDT Friday in Washington.

Spring meetings of the International Monetary Fund and World Bank are set for Saturday and Sunday in Washington.

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

What happens when the dollar falls below 82?
Or was it 82.20 only .0001 away.
Slingshot----------<>

No account on M3
CPI adjusted.
Derivatives
Hedgefunds
Carnival Barkers/Economy is fine.
Trade deficet
GDP out of balance.
SDR's
You can get anything you want at Alice's Restaurant.
Excepting Alice.
Slingshot--------<>

Again as always I ask that those that lurk, post upon the forum. Again I tell you I am a small time investor and that those who posts here I hold in high reguard and respect. Yes I do read your posts.
Hey Lexx, about your truckers. Hang in there and thanks.

Although there may be no immediate response, you may find your thoughts at a later date. They have long memories here.
Lets hear from you.
Slingshot----------<>

Hahahahaha!
The new Governor promises property tax cuts.
One week later they came out to check it out. My Home that is.
Have to make up for the shortfall.
Those Dirty ********.
Slingshot-------<>

Lets say the bankers got together and brought all the gold mines. Whereby they never have to sell from the vaults but have real metal to sell into the market and cap the POG.
Plausable?
Slingshot--------<>
P.S. they make their own rules. hedge funds /derivatives/ SDR's. And the government is not involved.

"Everywhere you go, There you are." Kind of Funny.
Yet there is more than meets the eye. There are two ways to find where you are. That is you can read the signs that tell you, or on a larger scale, deduce all the places you are not. Therefore you can be at one place. Which is more dependable? Wondering if your doing the right thing with gold.
Slingshot---------<>

Wants to bail out the subprime mortgages. Who is at fault? Greenspan/Brake the Bank Ben/ Major Banks/ Real estate agents? Is it a ploy to subsidise the failing subprime banks so the fed does not lower interest rates but maybe raise interest rates to make the dollar more acceptable in the world markets.
Slingshot-----<>

Want to thank you for all you have done in the Gold Arena.You have provided a castle from which all can express their veiws and with the forums investigative nature, overlayed with Another's and Friend of Another have provided a passable Trail. At times I think that those who come and go do not fully understand this Castle Realm. I may myself may not but know to stay within the castle walls. Let us not decieve ourselves as with gold once at $250 will not have the same parameters at $850 or the adjusted price of $2000. Your forum has evolved, withstanding political, social and geographical strife.
And for most of us do not understand why gold reacts as it does. You may sell gold but I think you ,and your employees, have much more to play out in the future.
Slingshot--------<>

Slingshot, you wrote:

"Lets say the bankers got together and bought all the gold mines. Whereby they never have to sell from the vaults but have real metal to sell into the market and cap the POG."

Yes, they could do that, and I think that Barrick-Newmont (did the merger go through?) together would do that under the PTB management to cap the gold price.

Suppose they gathered in all the gold mines in the world, they would have up to, at present, 2,350 tonnes per year to put on the market.

Problem is, the longer they cap the gold price, the harder it is to keep it down. The moment would inevitably come, when even all 2,350 tonnes of production plus what the CB's might want to sell into the market, would not be sufficient to supply demand at the ever more attractive, low price of gold.

For a while the scheme would work, but not in the long run.

The longer the price is capped, while the printing presses are going ahead full-bore, the more attractive the price of gold appears. So, demand soars. Game over. The price HAS to rise in spite of everything.

That's the way I see it.

SIERRA

I am trying to think how they can BUY TIME. Buying time is crucial to world dominance, To throw down all we have worked for. A reversal,although unlikely, where gold plummets and is brought up. Disillusment as when gold first dived. A long range tactic to discredit gold. We must not think months but years. As I have learned in a short span to hold the line. Example: Call me a SOB to my face and I will respect you more. But these people lie through their teeth. IMO.
Slingshot----------<>

The climb from $250 To $650 is spectacular. Without much disturbance. What do you see as the POG soars to even $1000. Low Balling.
Slingshot---------<>

Dollar at 82.202. .002 Not much. .002 rotating at 17,700 rpm and the jet engine comes apart.
Slingshot-------<>

82.176 Somebody please tell me that is low for the dollar.
Slingshot-------<>

Going back as far as I conveniently can with resources immediately at hand, I see that the dollar index has traded as low as 80.39 during the week of December 26, 2004, and the low prior to that was a trade at 80.36 during the week of April 16, 1995.

R.

Now that is a term I know.

My fellow gold bugs it would seem it has been a lifetime to get where we are. The key word is tolerance. How much can the market tolerate. Whatever the market can asborb before it declines. Well let me tell you that it depends. As my pass post I will associate it with Jet Engines. The tolerances, close as the load bearing items come into play. Oh Yes gold is on the perifery. You can build a jet engine within tolerance. But the tolerance you built it to will give the engine its life. I'm talking about weapons systems and not straight and level flight. And so it is as the market spools up ( Increase engine speed) it will depend on all the components built to tolerance. Gold is like a new built jet. If we have built it tight , meaning, we have done our home work, it will perform with great thrust and remain in service for a long time.
Slingshot----------<>

Thank you T.C for the info. Gee Wiz, has it been that long. There was something that stuck in my head saying 82.20 was a key point. Egg on my face but I will wipe it off and continue on. Doesn't matter how many hits you sites gets. It is the caliber of hits that counts.
Slingshot-----------<>
P.S. I'm still on the learning curve ;0)

I think it was Topaz that coined the term. A very descriptive term. Calm and unabrasive for those that prowel the site into the wee hours.
Slingshot----------<>

Going back to the next-lowest low compared to today's low trade of 82.26, we are taken to the date of December 4, 2006 when the intraday low was 82.24 on the dollar index.

The next significant low prior to that brings us to the December 2004 figure of 80.39 that I previously mentioned, which itself was not undercut until traveling back in time to the April 1995 figure of 80.36.

R.

Well, obviously it's traded lower today... according to INO it's lower than that even as we speak.

R.

I read close to twenty to Thirty articles per day. I find that all I read is Wishy Washy. Lets call a spade a spade and if the dollar drops below 80.36 it's done and stick a fork in it. I'm not angry with you but I would like to put a certian individual in a headlock and ask him whats thinks.
Slingshot--------<>

http://www.jsmineset.com/cwsimages/Miscfiles/4483_Chart_for_4-12-2007.pdf@TC & Slingshot,

Jim Sinclair has also been tracking the importance of the range the US Dollar is getting into. He said on Thursday,
"When the euro equaled the dollar in outstanding value, the dollar slipped over the crevasse of the Black Hole of Calcutta, defined as .8230 support." The link above illustrates TC's point about recent support at the current low. The other castle is reporting the Dollar at .8192 right now. Maybe the Dollar is a little superstitious about the day we just passed into;)
I'm interested to see how the battle at .8050 unfolds.

Good night gentlemen.

-Pal

CPM/USAGOLD Colorado, USA.

Centennial Precious Metals finally closed its doors today as there was no available precious metal to be transacted. In an interveiw, the owner stated he had done all he could to filled his orders only to be twarthed by the inability to obtain PM's on the open market.

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

thanks for your info.
Slingshot---------<>
Good Night.

Never thought you to be a Night Owl. I have never lost my sleep time. Working 12 -16 hours on a carrier. The 15 minute sleep, I still wake up on the run. But I do not move as fast ;0)
Slingshot------------<>

Slingshot,
One more thing... I first heard the quote, "No matter where you go, there you are" by Peter Weller in the movie Buckaroo Banzai. I'm sure it wasn't the first usage and probably has roots in Zen Buddhism. I think it refers to living in the moment. I find following the global economic picture on a daily basis can be stressful sometimes and whatever helps to keep perspective is beneficial.

-Pal

I do agree with Zen. A centering of ones self.
May I ask what side of the world are you from?
Slingshot----------<>

http://quotes.ino.com/chart/?s=NYBOT_DX&v=wLooks like the rate of decent of the value of the dollar is accelerating. Where is the corresponding bump in the POG and POS?

SF

Sorry Sir slingshot, I 'been out 4 dinner, but I see you have kept the fires alight...thanks.

The dollar has just slipped below 82...I expect some big spenders will appear on the scene soon with wallets laden with euros and yens, and when you get up in the morning old buckaroo will be sitting pretty at around 82.6. You see if I'm wrong...

Anyway, as buck slips, Spot and Spike seem to be slumbering...not a yeep out of either of them, which is strange, and goes to convince me that people are expecting a dollar-rally soon...

But, you must understand, that when Col. Travis drew his 80 "line in the sand" back in 1995, houses cost less than half as much as they do now, and gold too was probably only about half as much in dollar terms. So the "80 barrier" is not really what it used to be... (Perhaps Col. Travis did not understand global warming and rising sea levels and all that.) The other currencies have been inflated in unison with old buckaroo so as to preserve the perception of wealth (and so as to preserve other nations' export viability relative to Uncle Sam and the dollar).

The race to the bottom continues...

Sleep tight, Sir slingshot...

;-)

Looks as if PoG was waiting for a genuine sub 82 move before lighting up ..as were the e-10 and e-5 Bonds.
Things will get "interlesting" if e-big old 30 goes red pre-open.

It hasn't been but a few weeks and we have passed yet another POG milestone FWIW.

In 1980, POG closed above $660 twenty-five times. In 2006 it did so just 15 times.

With over eight months to go in 2007, POG has closed over $660 twenty-eight times.

We have a ways to go to break the record number of closes above the $675 level.

PA

Finally, the POG and POS are on the move.

POG crossed the $680.00 & POS crossed $14.00.

Mean while, the dollar is still struggling at 82.

SF

http://www.forbes.com/markets/feeds/afx/2007/04/13/afx3609548.htmlAlthough acknowledging that the PPI for March is 1.0%, Forbes only extrapolated out the "core PPI" is for an annualized 3.0%.

Question: Has anyone on this forum seen any article in the "main stream media", i.e. Wall St. Journal, Fortune, Businessweek, Barron's, etc., were the actual annual PPI extrapolated out is posted?

Last night, I listened as a retired guy complained about his lost buying power. Most retired Americans know they are being screwed, but "the" screw job isn't expounded on by our government's (The Corporatocracy), manipulated media.

SF

http://quotes.ino.com/chart/?s=NYBOT_DX&v=w INO Charts and Quotes - U.S $ INDEX (NYBOT:DX) Price Chart -- The chart shows the 52 wk low (82.24)has been bested, but Friday the 13th is known in darker occult circles to have unmistakable psychological potential. It could add volatility but will not predict the outcome.

http://www.marketwatch.com/news/story/gold-rises-dollar-declines-against/story.aspx?guid=%7BC29E8B7C%2D725C%2D4937%2D8917%2D2D9E0299359E%7D Gold rises, as dollar declines against rivals by Polya Lesova | MarketWatch | April 13, 2007

http://www.netdania.com/QuoteList.aspEuro breaks thru $1.35
GBP "nears" $1.99
AUD breaks $0.83
NZD "nears" $0.74
US$/CHF nears 1.21

CANDO seems to be the only instrument down against the sawbuck this morning.

Producer Prices in U.S. Increased 1 Percent in March; Core Rate Unchanged - Bloomberg (04/13/2007 7:34 AM)
U.S. February Trade Deficit Narrows 0.7% to $58.4 Billion - Bloomberg (04/13/2007 7:35 AM)
Consumer sentiment falls to 8-month low - CBS Marketwatch (04/13/2007 9:22 AM)
Record federal spending in March - CBS Marketwatch (04/11/2007 1:46 PM)
Fed Says What It Means -- No Interest Rate Cut - Bloomberg (04/13/2007 5:04 AM)
Economy Enemy No.1: Soft Capital Spending - WSJ ($) (04/13/2007 5:04 AM)

Tech earnings estimates falling on eve of reporting season - CBS Marketwatch (04/12/2007 9:18 PM)
Retailers report solid March sales but say consumers might cut back - Boston Globe (04/13/2007 4:49 AM)
Sallie Mae may be in buyout talks - CNN/Money (04/13/2007 8:35 AM)
Pier 1 Pulls Plug On 60 Stores - N.Y. Post (04/13/2007 8:25 AM)
China's Money-Supply Growth Holds Higher Than Target - Bloomberg (04/12/2007 5:26 AM)
India Industrial Output Growth Slows for Third Month - Bloomberg (04/12/2007 5:24 AM)
Japan Producer-Price Inflation Quickens on Oil Costs - Bloomberg (04/12/2007 5:25 AM)
Student-Loan Shenanigans - Time (04/13/2007 5:19 AM)

Just like the movie, every day is the same with the 10:00 a.m. smack down.

Now to watch the reversal over the next 30 minutes.

Big question is up or down into the close.

PA

I think the average person know he's getting screwed but doesn't realize how truly bad it really is. I like to use the "restaurant chatter" barometer to see what's going on. Back in the 90's when you went out to eat the unmistakable buzz of the Nasdaq and overall stock market was in the air. Words like "tech funds", "IPO", and "Intel" filled the room. Later when housing was roaring words like "flipping", "investment property", and "REIT's" replaced those arcane 90's conversations.

Last night I went out to a local Italian restaurant and decided things have changed dramatically. I was one of only 2 customers there at 6:30, and heard a conversation between the owner, a guy that owned an upholstery business, and a manager of another restaurant in a larger city.

Owner: "Boy it's slow, I'll be glad when the weather finally breaks".

Manager: "Yeah, we've been slow since the first of the year, I think everybody is just hibernating".

Upholterer: "I'm dead too, thank God that Dairy Queen let me re-do their dining room. They said they only let me do it because they were dead and wanted to shake things up a bit".

Manager: "The trouble is my food costs are going through the roof. I raised my menu 10% but my food costs are up more like 20%".

Upholsterer: "I know, my Canadian Fabrics are up 20% and the Chinese stuff is up 50%. I think it has something to do with those tariffs they announced".

Manager: "We're looking to move closer to (City), this $3 gas is killing me".

Conclusion? Big time stagflation, crummy business with inflation running 10 - 50%. This conversation helps me know gold is a one-way elevator up no matter how hard the PPT tries to stop it.

Did you see that? We just had $ intervention,but Gold just spiked up in synchronicity with $ ! As a holder of sFR./euro Gold I get a double boost.The other side of the coin is foreign buyers are hit with more cost.

Btw,now that the cabal has lost the fight for 666,can we reasonably conclude the devil has lost?

http://www.netdania.com/ChartApplet.asp?symbol=XAGUSDOZ%7Ccomstock_litehas blown thru $14 in the noise of today's "volatility".

I guess the PTB are savin' up for a big attack, prolly early next week so.
*******
Slingshot, you raised some interesting questions on the LONG TERM effort to discredit gold.

We've got to face the terrible fact that there are, in power in the world today, men moving under the influence of certain ideas regarding the establishment of World Power on the back of a degraded and impoverished humanity.

The mindset of these power hungry animals is not to elevate humanity to a higher level of civilization and prosperity. No! They do not want self-reliant mankind rising to a higher level of life and understanding. All to the contrary, because such a humanity would not be a slave humanity willing to accept orders implicitly.

This theory of government is what moves the "neocons" who were primed to this way of thinking, by Leo Strauss. The idea of these ambitious bastards is to achieve "power through deception". Talk "democracy" but degrade and confuse with WORDS which only the few who are in on the plan, can decode to mean something entirely different: slavery.

Some years ago, I posted either here or elsewhere, the idea that the objective of the would-be world rulers is to destroy the regard of mankind for GOLD, as they have, successfully, destroyed the regard of mankind for KINGS.

And yet, humanity still uses the word "king" to denote something excellent - in spite of the banishment of kings from thrones around the world. Today kings are only a sort of toy figures with the power to attract tourism. Nothing more. But we still have, commercially, "the king of this" and "the king of that - (mufflers?)"

And we have "gold" used for selling stuff. "Gold" cards, "gold" label, "gold standard" lard, etc. Scrubbing out the idea of gold as high quality, from the mind of humanity - that's going to take some doing! Long time required!

But, the objective with GOLD is the same as with KINGS: "Move out the idea as old-fashioned, pass�, obsolete, retrograde, anti-progress, etc etc"

This is a very, very great struggle going on within humanity today: the destruction of the idea of gold.

Will the enemies of humanity prevail and enslave us all? Can such an abomination take place?

I do not believe it can take place. I believe that humanity will turn, like the pointer of a magnetic compass, to the North Star of gold sooner or later and for ages to come. It is built into humanity!

Paradoxically, it is the simpler people of the world - the undeveloped country masses - who are least susceptible to this manipulation against GOLD. Being poorer, less "educated" (brain washed would be a better term), they can recognize gold as a symbol of excellence and something endowed with a mystical significance. While Americans are disregarding gold - the rest of the world IS NOT. So, there is hope - not coming from high places, but from the great unwashed masses of the world.

Enough rant! Thanks for reading, all who did!

SIERRA

http://www.jmccanneyscience.com/WeeklyRadioShowArchivesSubPage.HTMJim McCanney has some interesting comments how the "Global Warming" spinsters are using their incredible PR machine to drive tax increases, water restrictions, and more Patriot Acts, while the coming "water crisis" is no more than gross water mismanagement.

If fresh water is going to be in short supply, why are we not capturing the fresh water from the melting ice caps?

Are tradable "environmental exemptions" no more than an opportunity for polluters to buy legal immunity?

Bee's dying off? Einstein once said that the loss of bee populations would kill off the populations who depend on agriculture within four years.

Listen to last night's radio archive for these and other related comments. While I listen to Jim's radio show regularly, this is one of his better discussions on current science issues and their relationship to the the political undertones.

http://edition.cnn.com/2007/POLITICS/04/13/war.czar/index.htmlsnip:

WASHINGTON (CNN) -- White House aides, with U.S. President George W. Bush's blessing, are actively trying to hire a new point person to help pilot the wars in Iraq and Afghanistan, an administration official told CNN.

"There's an urgency to get this done," the official said, in referring to the administration's new security plan for Iraq. "Implementation and execution are critical now."

The "war czar" would report directly to Bush with the power to tell Cabinet secretaries what to do -- and yet have the diplomatic skills not "to use that tone of voice," the official said. (Watch why the proposal has drawn critics )

The official title would be assistant to the president for Iraq and Afghanistan policy implementation, the official added. The idea behind the post is to make sure "Washington is responsive to military and civilian needs" on a timely basis and reduce bureaucratic problems that have hampered war efforts, the official said.

Pressed on why the new position is being created now, after more than five years of war in Afghanistan and four years in Iraq, the official acknowledged that "implementation and execution is as important" as "policy development."

With Bush's plan to increase troop levels in Iraq under way and a new team of generals in place, the creation of one point of contact for all the agencies and departments involved is timely, the official said.

While implementation work "is being done now," not enough is getting done because National Security Adviser Stephen Hadley is stretched thin, the official said.

Speaking of the pace of the job search, the administration official said the desire would be to have it filled "yesterday -- if that's not available, then the day before."

While a candidate for the post has not been presented to Bush, Hadley has sounded out a "handful" of people who might fill the job, the official said.

The White House has insisted nobody has yet been formally offered the post.

Hadley is considering retired and active-duty military officers as well as civilians, the official said. The immediate goal is to find two or three interested candidates and then have them spend time with Bush, Defense Secretary Robert Gates and Secretary of State Condoleezza Rice, before making a final selection, the official said.

At least three four-star generals approached by the White House about the job have declined consideration, The Washington Post reported Wednesday.

-Goldilox

While Guy Fawkes Day gets a revival in Iraq, the US reverts to "military totalitarianism" to revive its failing conquest. No more illusions about "spreading democracy", as they draw upon pre-Soviet Russia for a description of the new Anglo-American-Iraqi "leader".

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteLot's of PPT effort at 10AM and Noon to confront buyers in the COMIX, but they don't seem to be backing down from "Paulson's Pirates".

http://events.startcast.com/events/199/B0003/code/eventframe.asp
In his webcast today - linked below - Don Coxe - BMO Nesbitt Burns - for the first time, advocates gold going forward. He's of course missed the first $400 of the move since 2001, but he says that there has now been a significant change in the thinking of large world wide money managers, as seen in the financial charts. Don said that he had been a bond advocate since 1981, but that's over. He has long been an advocate of oil and base metals, that continues.

Don stated that the dollar as a source of return is likely to continue to weaken - particularily, if the dollar breaks it's longterm support at about 79.5 to 80.

A lot of his epiphany is old news to those here. The significance, I think, is that this advisor is privy to the ears of many, many big money managers. His reasoning is in depth and encompasing in many areas. A worthwhile listen if you have a half hour.

Conan O'Brien said it best:

"The White House wants to appoint a high-powered official to oversee the wars in Iraq and Afghanistan and issue directions to the Pentagon and the State Department . . . This person would be called the President of the United States."

http://www.msnbc.msn.com/id/18052305/NASD issues rare warning to investors
By Michael Mackenzie and Richard Beales in New York
Financial Times | 11:42 a.m. ET April 11, 2007
A leading US securities regulator Tuesday issued a rare warning to investors over the record $321bn of debt being used to buy stocks and bonds.
The move highlights broader concerns expressed by financial watchdogs in the US and Europe about leverage used by investors of all kinds, including hedge funds.

NASD, which regulates brokers and trading, said the amount of debt taken on by investors to buy securities � known as margin � reached a new high of $321bn in February. Since December, the figure has exceeded the previous peak of $300bn set in March 2000, near the top of the internet stock bubble.

"We are concerned too many investors are unaware they could suffer substantial financial losses by using debt to purchase securities," said Mary Schapiro, chief executive officer of NASD. "By updating our alert on this topic, we hope to remind investors not to underestimate the risks involved."
The regulator's last such alert came in 2003.
An investor who uses margin borrows money, with interest, from a broker to buy securities. When the value of an investment falls, the broker can demand that the investor pay additional cash � known as a margin call � or sell securities to cover the call.

Jim Paulsen, chief market strategist at Wells Capital, said the greater use of margin reflected the growth of sophisticated trading strategies. But he noted that investors now use margin both to buy stocks and to sell them short, meaning the net risk could be lower than during earlier periods.
Stocks tumbled in late February and early March, resulting in margin calls being made to investors. In recent weeks, stocks have recouped most of their losses.
In a sign of broader concern over margin borrowing, watchdogs from the US and Europe are jointly examining whether the collateral that banks require of big clients such as hedge funds is sufficient.

Timothy Geithner, president of the Federal Reserve Bank of New York, said last year that allowing hedge funds to borrow too aggressively could weaken the financial system. Dealers and big banks should take "a cold, hard look" at the amount they lend to hedge funds and their margin practices for derivatives transactions, he said. Mr Paulsen, however, said today's market practices did not seem excessive.
"We are a long way off the frothiness that typified the bull run of the late 1990s," he said.

But Jack Ablin, chief investment officer at Harris Private Bank said the rise in margin was still a good indicator that investors were taking more risk.
"Stocks have had a terrific run and the recent rebound in the market has probably encouraged further risk taking," he said.

http://www.usagold.com/gold/special/dutch2.html

April 2007 Buyers' Group

Dutch Gold, Bullion Pricing!

"Europeans squeal about the rise in the Euro against the Dollar."

So? Now what? Competitive devaluations are in order?

Politicians will be running around like chickens with their heads cut off, promising to fix what cannot be fixed.

Good for gold, for one thing.

SIERRA

http://www.fmnn.com/WorldNews.asp?nid=38669INDIA NOW A NUCLEAR SUPER POWER
Friday, April 13, 2007 - FreeMarketNews.com

On Thursday, April 12, 2007, India announced that it now had long-range nuclear capabilities. The Agni III missile was launched from Wheeler Island, 110 miles (180 kilometers) northeast of Bhubaneswar, the capital of the eastern state of Orissa. The missile was in the air for approximately 15 minutes, and according to Indian officials, it reached all of its objectives. -Raiders News Network

http://www.platinum.matthey.com/media_room/1176458405.html(excerpts) -- Zimbabwe's ongoing economic meltdown has left its mining companies facing a crisis, according to the country's mining chamber.

...according to the Chamber of Mines the distorted exchange rate and heavy borrowing are now set to hit the mining industry.

Non-gold metals mining companies are legally bound to pay a third of their earnings derived from abroad to the central bank at a rate of Z$250 to the greenback, compared to a black market rate of Z$16,000.

^___(from url)___^

Just another example that shares in mining companies may likely not provide you with the sort of portfolio diversity and security you were looking for in the event of a monetary/economic crisis. Generally, companies of all stripes are in similar boats tossed about on the stormy sea -- vulnerable to legislative whim and economic hardship. Tangible wealth, on the other hand, IS the safe harbor that the wise mariner ultimately strives for.

R.

http://www.usagold.com/webads/gold-coins-13.jpgWill your dollars maintain their purchasing power through your own generation, not to mention those that follow?

Choose the form of savings that has proven itself throughout the history of mankind. Choose gold.

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.

FRIDAY Market Excerpts

April 13 (MarketWatch,DowJones) -- Gold futures rose sharply Friday, as the dollar fell to a more than two-year low versus the euro, boosting demand for the precious metal. Weakness in the dollar, firmer crude-oil prices and strong physical demand for gold have supported gold prices, said James Moore, metals analyst at TheBullionDesk.com.

Gold for June delivery closed up $10.20 at $689.90 on the New York Mercantile Exchange. The contract gained 1.5% on the week.

The dollar fell to a more than two-year low versus the euro, on expectations this weekend's meetings of G7 and International Monetary Fund will call for a weaker dollar to help adjust global imbalances. Fears that the U.S. will intensify recent trade tensions with China also weighed on the dollar.

Technically, gold has been drawing buying interest since spot metal broke up through resistance around $666 earlier this spring, said Peter Grandich, analyst and publisher of the Grandich Letter. "It has attracted a combination of additional fund buying and very strong physical buying," he said.

"At the same time, we're seeing the continuing death march of the U.S. dollar." The euro hit a peak of $1.3551 that was its strongest level against the dollar in more than two years.

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

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=For the best part of a month now, this comparison Chart has been broken.
It'd be nice if the Futuresource boffins could correct the scalings pls ...todays action would've shown a well needed uptick against the alts.

FYI this Chart, prior to 2005 was as one line, pretty much since 2000.
In Jan '06 the lines started to separate as the alt currencies gave it back to the Dollar and gold marked time.
During '06 and spectacularly in Sept-Oct, we saw PoG "really" distance itself from currencies in general ...and all they (TPTB) can do "now" is to attempt to "re-create" an illusion of an attachment.

Once again, it would be "NICE" to watch their pitiful efforts and eventual capitulation in REAL-time Mr Futuresource ...TIA.

http://archive.gulfnews.com/articles/07/04/13/10117799.htmlWell, look at that. Someone made a valiant attempt to arrest slide in old dollar as it crossed below 82. After the upward spike there is still an upward trend. It will be interesting to see if this carries into next week.

Spot and Spike finally woke up, but they took a lot of prodding...

Meanwhile, over in China (see link), Big Panda is adding to his reserve of bamboo shoots...now over $US1.2T... preparing for that rainy day. I think Big Panda is overdoing it a bit... There is gonna be a lot of pressure on him to let his currency rise a bit more rapidly. Some of the surprising recent influx of money, I suspect, is "laundered" capital looking for a quick gain in the currency markets when and if Big Panda relents on the yuan...

Incidentally...

...we know Uncle Sam has a whopping trade deficit with China, but as a matter of interest, does anyone know of any country with which Uncle Sam has a trade surplus??? Even if China lets its currency rise against the dollar, does this necessarily mean that Sam's deficits with other countries will go away??

Cheers

:-)

http://www.aei.org/publications/filter.all,pubID.25952/pub_detail.aspMmmm...seems like this "relic" of yesteryear has been superceded in its main function and is now seeking a purpose in life...while bleeding $200M p. a.

Mmmm...maybe it could bail-out Uncle Sam...

:-(

Randy,

That picture makes me want to swap all of my Krugerrands for Sovereigns......... ;)

Kilo

http://www.atlanticfreepress.com/content/view/1350/81/...as Mike Whitney sees it...

:-(

http://www.usagold.com/webads/gold-coins.jpgIt's an assortment comprised of this subset of the pile.

[And I'm speaking as an authority here... I snapped the photo!]

;-)

BTW... what you're feeling is completely natural. I gave in to it long ago. Trips through airports are more comfortable with a mere "coin collection" than they are with BULLION.

The less said, the better.

R.

http://www.nationmaster.com/graph/eco_cur_acc_bal-economy-current-account-balanceYou can read more about this here:

http://www.raisethehammer.org/blog.asp?id=581

and that link contains another one (see attached nationmaster link) that details which countries are running current account deficits and surpluses, and at what levels.

:-(

Snippet from Stars and Stripes,
European edition, Saturday, April 14, 2007


FRANKFURT, Germany � Less than two weeks after U.S. troops in Germany learned they would be losing more than 14 percent of their cost-of-living allowance, the euro reached a two-year high against the dollar on Friday.

The euro climbed above $1.35 on foreign trading Friday, moving close to its all-time record amid expectations of a European interest rate hike in June and persistent uncertainty over the U.S. economy's strength.

The military "accommodation" rate � the exchange rate used by military banking facilities in Europe � will be $1.3885 on Monday, meaning 1 euro is worth $1.38.

Conversely, $1 will be worth 0.7202 euros on Monday at those same military banks, the lowest rate since Dec. 29, 2004, when $1 was worth 0.7149 euros.

The weakening dollar is particularly bad news for U.S. servicemembers in Germany, who learned March 31 that their COLA � aimed at making sure troops� purchasing power is equal to their stateside counterparts� � would fall 14 percent by June 1. For many troops, that would mean about $100 a month.

Calidore - since off post housing is denominated in Euros, the pain of the exchange rate will continue as well as purchases on the economy. Although it shouldn't hinder my consumption of Kristallweizens.

BTW Sir TC - that's a great photo of a handsome assortment of precious. And thank you for the verbal reference of AU as a collection. When it is time to move back to the states in 12 months, I'll declare that I posess a "mere coin collection". More semantics to de-emphasize the worth of my "barbarous relics" will be greatly appreciated too.

Seems to me that this time the dollar is REALLY going to collapse to 50.00 or lower. China now has 1.2 trillion in dollar reserves and has said publicly it doesn't need any more and in fact needs to GET RID OF the excess in order to control appreciation of the yuan. Because of this I don't think Japan is going to support the value of the dollar since all this is doing is supporting the buying power of rival China as China starts buying commodities like copper, silver, and gold. This is similar to a person lending his savings to a company where the CEO is selling huge sums of his company stock and cashing in his company bonds while they are still worth something and taking the money to buy a mansion and expensive cars.

Also, the recent decline has gone mostly unnoticed by the media and the public which is a good contrarian indicator.

Anyone else have any opinions on this?

http://news.goldseek.com/EuroCapital/1176485456.phpPerched Precariously on a Precipice by Peter Schiff - April 13, 2007
P. Schiff and certain other analysts speak of next key resistance at 80 on the Forex $index when in reality it is about 80.65 or so. What's more, unlike many who think it certainly a struggling area, JSinclair and others feel it may put up little fight- so the outcome seems a toss up.
Also, Peter Schiff closes the piece with a dire forecast based on the dollar below the 80 mark, when it
may take longer than he's implied.
Or depend on derivatives, a big bank, hedge funds, world events, bonds, stock markets, etc. and could take less time.
His short piece does omit unnecessary details and predictions. But the systemic crisis we slowly entered
now grows more obvious providing more evidence of conditions- deficits, surpluses, excess, deficiency, policies, methods, assumptions, decisions, practices etc.) and their effects (chain reaction, dominoes- overvaluations, undervaluations, imbalances, distortions, denial, censorships, unwindings, adjustments, revaluations, modifications, reprogrammings).

How can it be a soft landing in these days of accelerated information dispersal--internet, cable, etc. Or is it going to be another five years of dilly dallying? I don't think so. Risk is like a bag of popcorns. A few kernels pop unnoticed here or there but eventually it reaches a turning point, the S hits the F, and you have a full bag of trouble.

Certainly the powers that be want a controlled descent, but really they're just like children playing in the sandbox. Are they gonna get what they want, or what they really deserve?!

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/13/bcndollar13.xml Dollar slide accelerates by Richard Blackden | Business | Money | Telegraph - Apr 13, 07

Re: Risk is like a bag of popcorns.
That's a great pun that popped up out of nowhere. ;)

Armageddon: You are dead on. It's bad enough we have a dollar glut worldwide when in addition we are needing to print trillions more just to cover deficit spending. Then there's the 70 trillion unfunded liabilities coming down the pike. And what about the housing collapse and Fannie, throw in another trillion or two for a bailout. Bad to worse, and the only outcome is a dramatic devaluation of USA Inc.

Contrarian: dittos, Turkmenistan probably knew about Anna Nicole's death 2 minutes after it happened. It does seem odd that somehow an "orderly" decline in the dollar could happen when markets are so instantaneous. Or maybe like the past several years with gold and the dollar, it's orderly.... until one day out of the blue it's not.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/13/cnecb13.xml"Currency War"?
We may know more than we wish did, like that competetive currency devaluation isn't very good for them without gold, but what if he's right about an overt, recognized "Currency War", on top of growing trade wars, the wars on 'terrorism', 'the war on drugs', and the rest of it?

Super-Euro May Spark a Currency War While French Battle the ECB | Dollar Slide Accelerates by Ambrose Evans-Pritchard - Telegraph - April 13

http://www.reuters.com/article/bondsNews/idUSWAT00734820070414ECB'S Liebscher: Good that G7 focused on inflation - 12:00PM EDT | WASHINGTON, April 14 (Reuters) - European Central Bank governing council member Klaus Liebscher on Saturday welcomed the stiffer position against inflation taken by Group of Seven finance leaders at their meeting here on Friday.

"As central banker I appreciate that," he told reporters on the sidelines of the spring International Monetary Fund meeting here. "This is an issue for all parties involved and this is a very important message," said Liebscher, who is also head of the Austrian central bank.

"The potential risks are there. There is no doubt about it, either here (in the United States), or in Europe," he said.

The G7 communique stated the group's commitment to maintaining price stability as the best contribution to sustainable global growth -- an addition from its previous statement in Essen in February.

http://www.atlanticfreepress.com/content/view/1350/81/
Doomsday for the Greenback:

Thanks for posting this web address Sundeck. It appears that the Free Press isn't part of the corporatocracy as they accurately describe the desperate condition of the US dollar.

SF

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/13/cnoil13.xmlSome more reasons cited for tight energy markets this year:

Risk of oil crunch as OPEC squeezes tightening market
By Ambrose Evans-Pritchard
Last Updated: 8:31pm BST 13/04/2007 - Snippits:

"The world faces the growing risk of an oil crunch this summer as OPEC supply falls to the lowest level in two years and stocks held by wealthy nations tumbled at the fastest rate in a decade.
The International Energy Agency said the oil-exporting cartel had taken 1.2m barrels a day off the markets since last September in a move to support prices through the unusually mild winter, but had now pushed the pendulum too far the other way.
Inventories held by the OECD club of rich states have fallen by 1.1m barrels a day over the first quarter, with continued falls in March, a time of year when countries normally replenish reserves.
Brent crude oil prices in New York rose 35 cents to $68.16 a barrel yesterday on the report, up 20pc from January lows. Brent crude rose above $58 a barrel in London.
"US gasoline stocks are the lowest in five years because of a very cold spate of weather in February so markets are going to get tighter over the next six months, even if there aren't any seasonal disruptions," said Lawrence Eagles, the IEA's head of oil market analysis.
"OPEC has cut supplies to the market and we're very concerned that this is already causing tightening at this stage of the year. The issue is whether refineries are going to be able to find the oil they need..

John Hoffmeister, head of Shell's US operations, said the world would have to learn to live under the permanent threat of higher oil prices until it reorganised its whole approach to energy."

@ Mikal,

"US gasoline stocks are the lowest in five years because of a very cold spate of weather in February so markets are going to get tighter over the next six months, even if there aren't any seasonal disruptions," said Lawrence Eagles, the IEA's head of oil market analysis.

-Goldilox

Is this clown suggesting that more people drive when the streets are full of snow? I don't know anyone who heats their home with gasoline.

Some of these "ANALysts" just love to hear the sound of their own voice, no matter how lame the statement might be.

I think the analyst was referring to how crude distillates are diverted from gasoline production to be refined into heating oil (so they could fill that cold-weather spike in demand). Not very straightforward.

P.S. Good question and thanks for asking it. I had to do a double-take when I first saw that statement.

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

http://www.jsmineset.comYou are on the right track with this IEA outfit IMO:
A Note From Monty Guild | Author: Monty Guild | Posted On: Saturday, April 14, 2007, 4:29:00 PM EST

OIL PRICES WILL RISE -- Excerpt:

"I get a kick out of some of these official estimates in various areas. For example, the IEA is assuming Chinese demand for energy will grow by 6.8% in 2007. That number does not jibe with the economic numbers China is experiencing, such as Chinese industrial growth, which will be about 18% for the first three months of the year. Who are these guys? Why do they always miss the data points? Could it be because the people who give them the forecast demand data have a vested interest in keeping the estimates of their demand low, so they can buy cheaper? It may also be, because the people who give them the supply data, for national pride reasons over-estimate how much they can produce. In either case, it makes the forecast data pretty inaccurate.

It is highly probable that demand for energy from China will grow by over 9% this year. In addition, as we have mentioned before, non-OPEC producers usually over-estimate the amount they can produce. Both of these events (lower supply and larger demand) put upward pressure on oil prices.

In our opinion, whether there is fighting in the oil producing regions or not, oil prices will rise. We expect them to be above $70 per barrel by the end of 2007."

@ mikal,

Your explanation "sounds" plausible, but do they really halt other distillation processes to "focus" just on heating oil? That sounds terribly inefficient. I thought they used "fractional distillation" to extract the distillates into specific gravity ranges all at once.

Maybe BB or someone closer to the process can enlighten us about the actual practice.

-G'lox

http://www.usagold.com/webads/gold-coins.jpgThats a feast for the eyes Randy, so much history, so much Gold content can be had for such a small amount above todays "Spot" price.
The Sovs will always remain my favourites ...however "all" the others (particularly the Roosters) are stunningly beautiful examples of timeless wealth-in-hand.
My kids STILL laugh at "DaD" for packing a few Sovs when travelling ..."you never know" I tell them, ...whatsmore, you surely DON'T!

NICE Photo TC.

As I've opined here on numerous occasions, the latest and possibly the LAST (we can but hope) reincarnation of Gold as a barometric Fiat indicator sees PoG taking the opposite side of the Bond/Dollar "package".
This is quite a step in the right direction for Freegold, but we're not there YET.
Fridays action saw PoG reacting to a dual Red Buck and Bond ...and if anything, it came up short.
The "highlight" on Fri was not so much Golds move ...the double-red state of the Dollar composite took that for mine.
There's a lot of room to move to the upside on Bonds from here, don't be too surprised to see it head in that direction next week ...particularly with a droopy Dollar to support.

THe only thing supporting (backing )the Dollar since Nixon first closed the Gold window in 71 was Oil .....because of the Reserve currencies unique relationship to OIL.....

It is becoming more apparent by the day that this Union is now being interdependtly disected...leaving nothing backing the dollar ..........unless the Gold , the 8,ooo tonnes is still in Possession ..........

We might get a raising curtain soon revealing .............. our underweight condition re Gold reserves.....

The question is Whether we have half of a predicament or a full blown predicament .........

Then nearterm future is holding many openings available for anyone who wants to speak fresh new ideas with viable backing arguments to the voting public..........

green is looking good

our

http://www.larouchepub.com/other/2007/3416mortgage_crisis.htmlA quick read and a worthy accompaniment to similar material we see more and more of at the roundtable.
Ties together many ( some surprising) events swirling around banks and certain derivatives
involved in mortgage fraud and predatory practices in housing.
Using data & quotes from some key knowledgable figures, it lays bare a massive tsunami is beginning to rapidly swell, no one can stop it and no one tell where it ends:

Mortgage Crisis Threat to System Dawning on Congressmen?
Paul Gallagher | Executive Intelligence Review [April 20 Issue]

http://www.channel4.com/news/articles/uk/gordon+brown+faces+new+allegations/431247Snip:

"...Gordon Brown is facing new allegations that he disregarded Bank of England advice when selling half the country's gold stocks.
..."

Sundeck: Oh dear...this incident does not look good on Gordon's CV...but the treasury still insists that the English public got "value for money" by selling when they did...

Well, they would say that wouldn't they!

;-)

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=7a7e1488-00b9-4b13-9189-c88af9f83ce7Snip:

"...Omi's proposal is in line with Japan's long-held stance as well as recommendations made earlier this year by a high-level panel at the IMF. In late January, the panel, chaired by Andrew Crockett, president of JPMorgan Chase & Co. (JPM), urged the fund to sell some of its vast gold reserves and invest the proceeds to raise income...."

Sundeck: Mmmmm..."raise income" ehh? Maybe they should sell the gold and buy US Treasuries...now that would earn some income!

Honestly...which vegetable patch did these guys get washed out of. Gold's returns over the last five years have exceeded just about all other asset classes and these wizzards are talking about investing the proceeds of gold sales to "raise income"!

All at a time when the IMF is bleeding $200M per annum! So they keep losing dough and they keep selling gold...!103.4 M.Oz. should keep them all in good salaries for a few years more until someone decides that the IMF is no longer relevant. Really!

I'm afraid that the IMF may have become a "barbarous relic"....

:-(

(1) Lessons From FDR's Handling Of the Housing Crisis
by L. Wolfe
(2) Mortgage Crisis Threat to System Dawning on Congressmen? by Paul Gallagher

This is what the STUPID people of the world cannot grasp:

the source of all time deposits is demand deposits directly via the currency route or through the commercial banks undivided profits accounts. Money flowing "to" the intermediaries actually never leaves the commercial banking system as anybody who has applied double-entry book-keeping on a national scale should know. The growth of the intermediaries cannot be at the expense of the commercial banks. And why should the commercial banks pay for something they already have? I.e., interest on time deposits

I believe that banking institutions are more dangerous to our liberties than standing armies.

"In a letter of Marchy 15, 1981, Willis Alexander of the American Bankers Association claims that: 'Depository Institutions have lost an estimated $100b in potential consumer deposits alone to the unregulated money market mutual funds.'
As any unbiased banker should know, all the money taken in by the money funds goes right back into the banks, in the form of CDs or bankers acceptances or other money market instruments; there is no net loss of deposits to the banking system.
Complete deregulation of interest rates would simply allow a further escalation of rates by the banks, all of which compete against each other for the same total of deposits."

Written by Louis Stone whom the movie "Wall Street" was dedicated to - Vice President Shearson/American Express

http://www.ucsusa.org/scientific_integrity/interference/a-to-z-guide-to-political.html@flow5,

or just ignorant by design? My "secondary education" required classes in wood shop and PE, but not a single Econ class was offered, perhaps rendering it truly "secondary".

The US educational "babysitting service" is abysmal. The only people expected to get an education in banking are those planning a career as beholden insiders.

Unlike the Fullers and Heinleins of the world, who promoted cross-disciplinary education, our modern system stresses "specialization". This is particularly effective when TPTB want to discredit a thinking person for daring to connect the dots outside their "specialty".

McCanney, Sheldrake, and Ron Paul come to mind, among many others like the Union of Concerned Scientists.

http://www.cftc.gov/dea/futures/deacmxsf.htmTHe commercials in silver were net short 4400 contracts

The commercials in copper were net short 2600 contracts
and
The commercials in gold were net short 23000 contracts

Observe that these sales positions were adopted during a week when the dollar plummeted.........

This type of temporary fix for the price of commodities suppression strategem will be what ultimately opens the door to dramatic launch in the prices of these

The groundswell of wise investors buying physical continues ........because of the mitigating factors which are well known to anyone who takes the time to study .....
WHAT IS REALLY transpiring ......around the globe

WE live in a GLOBAL COMMUNITY ......and many of the World's people are adopting a new stance ......which may simply be stated " THE BUCK STOPS HERE......"

and it is becoming Fiat Non Grata.......

Little Children : Two wrongs do not make a Right.......

Running the Currency into the ground by Printing unlimited numbers of dollars to Pay Deficits ..........(very inflationary) cannot be undone by SELLING massive quantities of PAPER GOLD to suppress the price .....of Gold and Silver the prices of which are Inflation barometers.

Engaging in these practices doesn't create an illusion to trick those in control of financing our Defecits.....and who thereby control TIC FLOWS..

One step forward , two steps back ........the dialectic

THE MUMBO JUMBO continues ......and defence against such irresponsible behavior continues to evidence /manifest itself.

BUY GOLD ..........Everyone around you Geographically outside the US is already doing so .......As the game of musical chairs continues ........

When the music stops , WILL YOU HAVE A CHAIR in the COURT of the metal of KINGS .......Or will you be marching to the tune of the CARNIVAL BARKER MEDIA TROLL HACKS singing DON'T WORRY , BE HAPPY... still

both my parents were educators: my dad was alpha omega alpha in med school, an endocrinologist, started the intern residency program at St.Lukes where he was director of medical education & reseach. my mom was phi beta kappa, a pathologist, her students did the autopsies on Nicole & Cato

enviroment helps. my mom gave me the "Jewelers Eye" by William Buckley when i was in junior high school. then i ended up reading all his nonfiction (to the exclusion of my homework). i never let anyone decide for me what i was going to learn. i didn't follow a curriculum. i just pursed my interests. it cost me, but i also benefited from it.

http://www.signonsandiego.com/news/business/20070415-9999-1n15loans.html Lending to students 'a gold mine' for creditors - SignOnSanDiego.com - Business - April 15
Another situation like the astronomical unfunded gov't obigations, the uncollectable debt sold to pension funds or
the savings of anyone without gold. Is it any surprise last week Sally Mae began soliciting offers?

@ Flow5,

DId any of Bill Buckley's writings describe the Haitian/Dominican slavery his family holdings (United Fruit Co.) perpetuated in Cuba that inspired the Castro revolution? Most of what I've read by him celebrates the "fruits" of their generations of oppression, much of which was "enforced" by CIA weapons and torture schools.

Learning about that was a big part of my "education", but no "educators" had the cajones to bring it up in formal classes.

Only lately have some authors ("Confessions of an Economic Hitman" and "The Disapppered" come to mind) begun to touch on how brutally the Buckleys and their ilk treated our neighbors. It's no wonder Chavez and Lula have such an easy time winning support from their indigenous populations, when you consider that the Buckleys and Bushes "sponsored" the kidnapping and slaughter of thousands of "educated" South Americans by their paramilitary hit squads.

http://www.dailyreckoning.com/Featured/Rothbard041307.htmlsnip:

April 15, that dreaded Income Tax day, is around again, and gives us a chance to ruminate on the nature of taxes and of the government itself.

The first great lesson to learn about taxation is that taxation is simply robbery. No more and no less. For what is "robbery"? Robbery is the taking of a man's property by the use of violence or the threat thereof, and therefore without the victim's consent. And yet what else is taxation?

Those who claim that taxation is, in some mystical sense, really "voluntary" should then have no qualms about getting rid of that vital feature of the law which says that failure to pay one's taxes is criminal and subject to appropriate penalty.

But does anyone seriously believe that if the payment of taxation were really made voluntary, say in the sense of contributing to the American Cancer Society, that any appreciable revenue would find itself into the coffers of government? Then why don't we try it as an experiment for a few years, or a few decades, and find out?

But if taxation is robbery, then it follows as the night the day that those people who engage in, and live off robbery are a gang of thieves. Hence the government is a group of thieves, and deserves, morally, aesthetically, and philosophically, to be treated exactly as a group of less socially respectable ruffians would be treated.

"To force a man to pay for the violation of his own liberty is indeed an addition of insult to injury. But that is exactly what the State is doing."
- Benjamin R. Tucker, 1893

This is dedicated to that growing legion of Americans who are engaging in various forms of that one weapon, that one act of the public which our rulers fear the most: Tax rebellion, the cutting off the funds by which the host public is sapped to maintain the parasitic ruling classes.

Here is a burning issue which could appeal to everyone, young and old, poor and wealthy, "working class" and middle class, regardless of race, color, or creed. Here is an issue which everyone understands, only too well. Taxation.

-Goldilox

Only appropriate for April 15th.

@ Goldi

"I don't like the income tax. Every time we talk about these taxes we get around to the idea of 'from each according to his capacity and to each according to his needs.' That's socialism. It's written in the Communist Manifesto. Maybe we ought to see that every person who gets a tax return receives a copy of the Communist Manifesto with it so he can see what's happening to him." -- T. Coleman Andrews, Commissioner of Internal Revenue, U.S. News & World Report, May 25, 1956

Something tells me that the IRS commissar wouldn't say that today.

http://www.prudentbear.com/articles/show/1960 Cliff-Risk Nation | Michael J. Panzner - Guest Commentary
Like my post on Gallagher, here is another on-topic post, offered in the spirit of respect, applied with competence.

@ Thoreauly,

Taxes in one form or another are a necessary evil to fund government, another necessary evil. No one will ever be particularly fond of their implementation, but it's particular egregious when the legislators mire the tax code with a maze of misdirection and "special interest" discounts that make it nearly impossible for the taxpayer to comprehend.

Income taxes themselves were highly eschewed by the framers of the constitution, who planned commerce taxes for the Federal government and left property taxes to local entities, as protection of property was in their "sphere".

Income tax became "necessary" when the US Government decided to play "police force" for the rest of the world, by creating a false flag 911-type event to justify "bailing out" JP Morgan for the billions he "bet" on England vs. Germany in the build-up to WWI.

That wealth confiscation worked so well, that it was expanded to include gold when WWI 'reconstruction" didn't work out as planned.

The Money Masters video contains a pretty good description of that mechanism, and how US confiscated gold was used to fund Hitler's rapid reconstruction of devastated Germany.

http://www.franz-oppenheimer.de/state1.htm@ Goldi

On a philosophical note (hey, it's the weekend), I don't see how any evil can be necessary, since necessity justfies any action. And since what is just is by definition morally right, it can't also be evil. Thus is the state evil -- being a creature of "the political means" (see link) -- and therefore unnecessary.

This isn't to say that government -- i.e., the rule of law -- isn't necessary, as society cannot function without it. But it IS to say that the state is the worst possible form of government in that a territorial monopoly on the use of force (the minimal definition of the state) invariably oversteps its bounds.

Thus did a republic based on sound money and limited government degenerate into a welfare-warfare colossus that is now exhausting itself in an orgy of overindulgence at home and overextension abroad -- which would have been impossible without the complete corruption of money.

http://tech.groups.yahoo.com/group/hydrino/message/12383A perception of scarcity drives up the oil price. Has the perception been manipulated? See link, and this follow up:
http://tech.groups.yahoo.com/group/hydrino/message/12399

the tell is Tbonds vs. equities -- Bullishonbronze, 09:51:21 04/15/07 Sun
we might be at a point (again) where the Fed needs to crash stocks in order to try and rally Tbonds.

Monday we have the TIC report and this likely will show a decrease in foreign inflows into the USA. This because of the US$ weakness, but also the bizaar strength in all world stock markets.

Last week the bank stocks have not been keeping pace with DJIA and the long end of yield curve has been rising, which will hurt mortgagees even more. http://stockcharts.com/h-sc/ui?s=$BKX&p=D&yr=0&mn=6&dy=0&id=p36047831158

Fed needs to crash stocks in order to try and rally Tbonds. -- Bullishonbronze, 10:16:02 04/15/07 Sun
http://stockcharts.com/h-sc/ui?s=$USB&p=D&yr=0&mn=3&dy=0&id=p05455025262

the friends of Bernanke&Paulson got the tip to go long Tbonds in Feb, causing its initial rise. Then Tbonds rallied as the DJIA tanked at end of Feb.

The following plan seems a very plausible way of supporting the US currency. Except where is the way to deal with excess liquidity or currency inflation in other countries?What becomes of deficits and debts and derivatives?
Trail Guide(FOA) and Another are among those expecting something like this for gold and silver:

Posted On: Friday, April 13, 2007, 3:17:00 PM EST
The Final Chapter For The Generational Bull Market Gold Price May Surprise You!
Author: Jim Sinclair
Dear CIGAs,

Now that the die is cast for $761 on gold and .8057 on the USDX the time has come to examine further characteristics that gold adopts in order to define the time a top is in creation.
It is wise to review what we have already defined so that this missive will have an entire dissertation on the character of gold from the birth of a generational bull market as well as to what comes next.
Having discussed this at the request of the AMEX at their symposium, I owe it to you to both review and expand on the topic in order to bring you all the way.

1. Gold as a commodity:

This is the condition that was experienced during the 21 year bear market in gold in which it steadily declines until it hit the real cost of extraction. When gold bottomed at $248 it was quite close to the average full price of production, not the cash price of production. The dull price of production is number of ounces produced equal to cash costs of production plus all corporate overhead from the Chairman's perks to scrap paper.
The simple statement is that gold as a commodity is worth less.

2. Gold as a Barometer:

During a period of general comfort in the minds of new gold owners, regardless of if it justified or not, gold will perform as a barometer of inflationary expectations. Gold's price will rise and fall according generally to a round number settling back to the near $50 level by historical precedent.
Gold can be used as a tool of the Federal Reserve and is when there are few new investors involved and it has no currency roll. This was true in the early 30s as well as late 2002 and early 2003. When deflation in terms of financial failures was possible, an expanding gold price will speak to inflation, relieving the fear of zero bound.

3. Gold as a currency:

Gold is defined as a currency when it is rising faster than the premier strong significant international currency. In today's case the most likely candidate is the euro because it has an outstanding value equal to the US dollar. When gold rises in percentage terms more than the euro, gold has become the currency of preference.
Gold will combine the functions, but generally moves in a series as above from #1 to #3 as the primary cause of price.
Since gold is and has been for thousands of years a subjectively valued item in its appreciating form, understanding the above will help you know if after selling of strength it is wise or foolish to buy on reaction.
Gold is today a barometer moving definitively into the currency definition. Buying weakness, selling strength, and repeating the process is justified.

After assuming the position of currency of choice by appreciating in a greater percentage than the strongest currency, gold takes on the characteristic of an accepted, welcomed, new national cash asset. It is at this time that gold tries to balance the balance sheet of the United States, at least now. This may well change as other nations replace the USA as number one economy and their currency as the accepted universal reserve currency. What currency that is may surprise those who fear the foreign.
The formula creating the magnet pulling at the gold price from the front is the ounces of gold times the gold price to equal the market value of the total amount of US treasury instruments held by international central banks. Should one equal the other then the balance sheet of the USA would balance. That is what would make the then low of the US dollar and start a dollar bull market.
This formula will be fluid as US treasuries will be liquidated by these central banks. Another point of interest is that in the early 70s it was easy to predict $900 because the numbers were smaller.
Today's number is so high it tests my rationality. I am therefore standing with the $1650 number.

What Comes Next:

Here is where the circumstances change. I doubt you will have a repeat of 1980 wherein gold began its return to commodity valuation and declined in stages from $887.50 to $248.
You have to realize that in the age of Authoritarian Free Enterprise, a PPT and a more active Exchange Stabilization Fund, circumstances will change.
If you, as I do, assume all major markets are creations of the unseen dirty hand, it follows that when gold reaches the characteristic mentioned above that the unseen dirty hand will have most all the capital there is to have. That capital due to the nature of the beasts will be paper assets. The time will have come to protect that value.

Gold has always functioned primarily as a CONTROL item and convertibility is simply impossible. It is too inefficient to settle world trade without causing serious difficulties regardless of the price.
Gold would again function as a control item in the US dollar in the form of a revitalized, modernized Federal Reserve Gold Certificate Ratio tied to a measure of international liquidity as measured by the ounces of gold held by the USA times the price of gold equaling the market value of the international central bank's holding of US Treasuries. In the 1930 this item was tied to an automatic adjustment of interest rates; practical then and totally impractical now.
It stands to reason that those with most of the US dollars would wish to start a dollar bull market to profit even more. Control over desires is not a virtue at the Bilderberger Hotel.
Further explanation of the construction and function of the Federal Reserve Gold Certificate Ratio can be found in:

"Gold to be Remonitized" January 8,2003
"More on the Federal Reserve Gold Certificate total Value Ratio" Wednesday, May 28, 2003
"Gold and Dollar Market Summary" Thursday, June 09, 2005

All available here on the Compendium.

If a modernized Federal Reserve Gold Certificate Ratio is adopted, gold will trade $100 above and below the gold price of that day, be it $1000, $1650 or some other price. The US Treasury will not have to do anything as derivatives will first be listed to wager on this change thereby changing the gold price itself.
Like a company coming out of bankruptcy with a balance sheet balanced and some mechanism to permanently control that situation, the US dollar as the common share of USA Inc. will enter a long term bull market.
Here is where Gold and Silver disconnect in direction. Silver goes up like a rocket and down like a rocket. Gold goes up like a rocket and stays there."

http://www.jsmineset.comURL to last article.

http://www.timesonline.co.uk/tol/news/politics/article1655001.ecesnip:

Gordon Brown had decided to sell off more than half of the country's centuries-old gold reserves and the chancellor was intending to announce his plan later that day.

It was May 1999 and the gold price had stagnated for much of the decade. The traders present � including senior executives from at least two big investment banks � warned that Brown, who was not at the meeting, could barely have chosen a worse moment . . .

According to other sources, however, Bank of England officials told those present they had "little say" about what was going to happen and that they were "doing what they were told". This was a decision made by Brown and his inner circle, who appeared uninterested in their expert advice.

-Goldilox

Even more interesting is the published reactions of readers, most of whom are less inclined to believe it was an honest mistake than pure oligarchic favoritism. "Follow the money" is the trend of responses - the "money", of course, being the gold itself, not the loo paper exchanged for it.

A longer selection was selected for quoting, but rejected a couple times by the host server. (Copy protection?)

http://www.netdania.com/QuoteList.aspThe euro is climbing to 1.36, while the GBP is approaching 2 bucks!

The Yen and Cando are holding the Sawbuck back from a complete rout!

Just read the story of the dying bee population and my conspiratorial radar went haywire.

Suppose you knew that hyper-inflation was immenent. You (international bankers) know this because you created it with the intent of bringing about the inevitable "all paper will burn" scenario foretold by Another (just not in accordance with his projected time frame). After all, only global hyper-inflation will properly set the stage for a new global monetary paradigm (physical gold) and, in turn, a global government.

You would need two things. One, a catalyst to initiate the hyper-inflationary burn-off and, two, a scapegoat upon which to blame the hyper-inflation. If the impact of the dying bees should be as dire as predicted by Einstein whereby human kind would die of starvation in just four years, and this story evolves in the next few months to impact global crop production, the bee story would accomplish both objectives in a single stroke.

If global crop production is significantly diminished by lack of bee pollenation, food prices will go through the roof. This will provide cover for the inevitable inflation that has been building to a crescendo when our trading partners decide to redeem their amassed foreign exchange reserves. When the masses complain that they are unable to afford food the politicians will blame the bees. One might also go so far as to speculate that the bee population may have been intentionally compromised at this juncture to bring about this political cover.

Needless to say, the price of gold would go through the roof in such a scenario. I have always thought that the really big players (giants) are as much if not more pro-gold than all of us here at this forum. They have been quietly positioning themselves behind the scenes for the past few years acquiring positions in physical gold that will ensure that they and their line continue to be the governing elite for many generations to come. They have simply been very patient as the trap has been carefully set. IMO, a tiny bee may spring the trap.

What really scares me is that I think I may be right on this one. Call it a gut feeling. It will be interesting to watch how this unfolds.

PA

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

"As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless."
--U.S. President Abraham Lincoln, Nov. 21, 1864 - (letter to Col. William F. Elkins) - Ref: The Lincoln Encyclopedia, Archer H. Shaw (Macmillan, 1950, NY)

-Goldilox

Considering Lincoln's sharp criticism of Reconstruction, a plan for the victor corporations to absorb as much Confederate wealth as they could by "kicking them while they were down", and his concern for a fair "reunification", it's no wonder the Money Masters began their story with the financing of the War between the States.

One thing that has been consistent in all wars hence. The financiers profit mightily while their ideological serfs bleed real blood in payment.

http://www.usatoday.com/tech/science/columnist/vergano/2007-04-15-nuclear-attack_N.htm?csp=34 There's been a great deal of scientific literature from studies done on the bee dyoff since the honeybees began dying off about 10 yrs ago from Asian mites and a virus that the mites made them susceptible to. Various theories have been advanced on the cause of the latest surge in mortality including cell phone transmissions, certain new pesticides, the lag effect of the mites, crazy weather patterns like droughts and floods(and resultant starvation), mold, 'chem trails' and others.
The issue strays less into speculation when it
focuses on how reliant on honeybees we really are, or need be on honeybees. Not very.
There is a wealth of background and history on the subject,
in spite of the spate of new articles appearing.
Many crops are field pollinated and many more could be by using the right growing methods including leaving a portion of the fields fallow to permit habitat for pollinators, rotating crops and fields, integrated pest management, organic pest control, complimentary plantings including herbs and flowers.
Since many insects, birds and the wind act as pollinators, especially on crops field pollinated or grown traditionally, and since these growing methods preclude the use of honeybee rentals, the early years of farming (before the late 20th century) were natural and sustainable even as pesticides and nitrate-dominant fertilizers were widely introduced.
There is no reason why, barring another US 'dustbowl'(which is possible via recent regional climate trends), this particular bee's decline should be anything other than a warning and opportunity to adapt and improve growing methods and land and water management.
Should the situation be exploited like the ethanol
industry, it would reveal the degree to which control over food has passed to interests antagonistic to society and the general welfare.
Should the recent influx of illegal immigrants result in some disease like bird flu, a terrorist attack, or some 'false flag event', the PTB would become more of a household word:
Study: Hospitals would be 'overloaded' by nuclear attack on U.S. - Vergano | USATODAY.com - Apr 15, 07

http://www.marketwatch.com/news/story/story.aspx?guid=%7B87D8C029%2DAD82%2D4E28%2D8723%2DD1BA76F87CBD%7D&dist=rss Gold jumps, but gold bugs still suspicious
Peter Brimelow - MarketWatch | Apr 16

"Various theories have been advanced on the cause of the latest surge in mortality"

Unfortunately, the "latest surge" is off the charts, with some bee keepers reporting total losses.

Not what you'd call a "slow die-off".

I wonder if anyone has tried colloidal silver for bees?

Moreover, does anyone have a better idea? Radionics? Hmmm. Nobody knows. And what exactly DID cause all the pet food poisinings? Do we REALLY know? Not to mention we never did catch the perps on the antrax chain letters.

Somehow I find the whole business to be disgusting in the extreme. It smacks of genocide.

But of course we have to have more inane distractions, Ms Smith is about panned out. Imus was just a flash in the pan. Tamiflu, cipro, dont worry, Bernanke will fix it. The surge is working. Here have some more Lipitor, you look a bit blue around the gills. Try these little blue pills.

"People Act" said Mises.
"Giants act" said FOA.

Yes, they do, and they dont say please nor "may I". I was amused by Bill Bramwell's little piece on LRC that "not all debt is bad". The one thing I came away from it is that debt is inescapable. Either you owe, or you are a creditor. This "tax" is waiting for you regardless of which side of the ledger you sit upon.

That is why bankers sit in the middle, and own the ledger. It sure beats farming. I wonder how someone prepares a homeopathic isode of CCD toxin? What ever will they think of next, GM bees? Terminator bees? Gangster capitalism- somehow it sounds like the petrie dish is getting to the easter island stage.

At least gold doesn't rust.

But others aren't following suit. A glich ?

There is still a $5 difference between the K-Co chart and the INO number after 30 minutes. POG showing at $692 on the K-Co chart.

?

PA

http://www.forex-markets.com/quotes.htmI'd be expecting another uptick into the -95 region on the basis of red 04 e-Bond ...but it hasn't happened yet.
Spot via tenfore shows -87ish as of this.

http://www.galmarley.com/Chart_pages/currency_charts.htmSomeone I'm sure will have the exact number, but "sometime" today, Yen-san will once again get to sniff the rare air of a multi-year high PoG imo.
Will Y puff up it's chest and, showing much bravado, charge the Forex markets a-la last time through?
We shall see soon enough!

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=Bond baton got handed over at red 0.01 and is giving a little more back at the outset.
PoG's immediate destiny seems hip-jointed to Bond Yield here which in no small way is also co-linked to SM and PoO.
Who'da thought Bugs'd be cheering for a SM uptick?
"tis a strange World it is, it is!

Showing $690.90 at 81.80
Slingshot-----------<>

Re: Your sarcasm on "latest surge". Take your attitude someplace else.

The bees are very specialise insects. I think a few items come to mind that can basicly destroy them. Genetic altered pollen from plants. Mutated forms of molds. Predatory bugs as mites. Solar flares as they navigate by sun. Shift of the magnet field of the earth.
Lots of volcanes pumping gases that may affect them.

Man always has to "FIX IT TIll IT'S BROKE"
Slingshot-----<>

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20070416\ACQDJON200704160906DOWJONESDJONLINE000283.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.na March Retail Sales Rise 0.7% on Gas, Clothing - Rex Nutting - Dow Jones - April 16, 2007
This account gives rare detail on spending & factors that
make the numbers. Gas and inflation and seasonal adjustments for example.
An aspect not included is the drastic clearance pricing on winter clothing as every drop of spending power
is wrung from debt-strapped consumers.

Goldilox:

It was a lesson in grammer, style, & conviction. He would just write, informed or not. I should have said my point was that by reading very little, I acquired the vocabulary of a senior in college by the time I was a senior in high school. Just like skiing, I started on the black diamond, not the green square.

I didn't know about "United Fruit Co.", etc. It doesn't surprise me. Immorality & corruption is often associated with "old money".

@ mikal,

Here it is more simply put for those who can't abide humor in their posts.

The evidence presented by George Ure suggests that the latest "bee death surge" has no arithmetic relationship to previous bee death rates.

G'lox

P.S. If you are just now noticing that sarcasm is my literary tool of choice, you've missed about five years worth of my previous posts, many of which have been lauded by other posters.

http://www.counterpunch.org/whitney04112007.htmlsnip
The American people are in La-la land. If they had any idea of what the Federal Reserve was up to they'd be out on the streets waving fists and pitchforks. Instead, we go our business like nothing is wrong.

Are we really that stupid?

@ Flow5,

If you are interested, much has been written about UFC's role in Latin American politics. A simple Internet search will yield over 10 million hits. Many not as verbose as Bill's flowery style, but quite enlightening, just the same. A good intro to follow-up works like "Confessions of an Economic Hitman".

Also good background to elucidate the "political risk factors" of mining in South America that TC reminds us of regularly.

Monetary flows (MVt) peaked Oct. 1974 (the stock market bottom)
Monetary flows (MVt) peaked Oct. 1982 (the stock market bottom).
MVt)'s lag for long-term rates peaked Sept. 1981 (this century's peak in long-term interest rates).
Monetary flows (MVt) peaked in Jun 1984 (the stock market bottom)
(Bond lag) monetary flows (MVt) peaked Sept 81 with the decades long term peak in long term yields.
etc., etc.

@ Slingshot,

Many political theorists (I think Marx usually gets the credit) have opined that full bellies make for weak revolutions. If the commerce and agricultural institutions break down dramatically, popular apathy may be replaced by rage.

Unfortunately for the masses, they are so far behind in their homework and misled by the corporate press, that most will have no clue where to appropriately direct their anger.

Jefferson's admonitions about "informed electorate" come to mind.

"Black Monday" Oct. 19, 1987, coincided with the sharpest and fastest decline in the roc for real GDP since 1915 The Fed is clueless.
Feb 27, 2007 coincided with the sharpest, and fastest decline in 1) the absolute level of reserves, & 2) a large reversal of roc's for real GDP & the deflator. The Fed is clueless.
1938-1940 roc's in reserves pulled us out of the depression.
Inflation in 1951 (Korean War) corresponded with highest roc's in reserves since WWII.
1973 had the highest roc's in inflation & the highest roc's of reserves since 1915.
1979-1980 had the highest rates of inflation & the highest roc's of reserves since 1915

Both reserves & debits are required for accurate forecasts

First, there is no ambiguity in forecasts. In contradistinction to Bernanke ; forecasts are mathematically "precise" (1) nominal GDP is measured by monetary flows (MVt); (2) "money" is the measure of liquidity; (3) income velocity is a contrived figure (fabricated); it's the transactions velocity (bank debits, demand deposit turnover) that matters; & (4) the rates-of-change (roc's) used by the Fed are specious (always at an annualized rate; which never coincides with an economic lag). The FOMC, the Fed's research staff, etc., have all learned their catechisms;
Friedman became famous for using only half the equation, leaving his believers with the labor of Sisyphus.
The lags for monetary flows (MVt), i.e., real GDP and the deflator are exact, unvarying, constant --- 10 months and 24 months respectively. Roc's (rates of change) in (MVt) are always measured with the same length of time as the economic lag (as its influence approaches its maximum impact; as demonstrated by a scatter plot diagram). Not surprisingly, adjusted member commercial bank "free" legal reserves (their roc's) corroborate/mirror both of monetary flows� (MVt) lags--- their lengths are identical.
The BEA uses quarterly accounting periods for real GDP and deflator. To improve reporting accuracy, the accounting periods for GDP should correspond to the economic lag, 10 months, and 24 months, not quarterly. Then, surprising revisions in the data would be eliminated, as would adjustments thereto monetary policy. GDP measurements should represent a rolling moving average.
Monetary policy objectives should not be in terms of any particular rate or range of growth of any monetary aggregate. Rather, policy should be formulated in terms of desired roc's in monetary flows (MVt) relative to roc's in real GDP. Note: roc's in nominal GDP can serve as a proxy figure for roc's in all transactions. Roc's in real GDP have to be used, of course, as a policy standard.
Because of monopoly elements and other structural defects which raise costs and prices unnecessarily and inhibit downward price flexibility in our markets (housing being most notable), it is probably advisable to follow a monetary policy which will permit the roc in monetary flows to exceed the roc 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.
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 "asked" prices were they not "validated" by (MVt).

No thanks.

That is what makes it all the more dangerous. Never happen they say. Too big to fall.
Slingshot--------<>

I don't use words like surge because some other poster uses them. Their meaning is clear in the context I use them and particularly the spirit I offer them.
Nor are shrill attacks on posters blind anyone to lazy reading and dissembling.

"Full bellies make for weak revolutions..." - I don't think so.

When the hoi polloi are well satisfied is when they have the time and energy to get into mischief like violent revolution.

Think about those contemptible football "hooligans" in Britain. These beasts are rowdy because they are well fed and have money to spend. These are the trouble-makers, those who are first to overturn cars, smash windows, set fire to buildings.

Now, if they are starving, as they deserve to be, they will be quite docile and willing to take orders in return for a crust of bread.

Revolutions are made by ideas based on ENVY, plus full stomachs and consequently, time for idlenesss.

SIERRA

1) Ben S. Bernanke
Chairman and a member of the Board of Governors of the Federal Reserve System. Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body.
At the same time, because economic forecasting is far from a precise science, we have no choice but to regard all our forecasts as provisional and subject to revision as the facts demand. Thus, policy must be flexible and ready to adjust to changes in economic projections.

2) European Central Bank (ECB) Central Bank for the EURO

The transmission mechanism is characterised by long, variable and uncertain time lags. Thus it is difficult to predict the precise effect of monetary policy actions on the economy and price level�

3) Janet L. Yellen, President and CEO of the Federal Reserve Bank of San
Francisco

You will note that I am casting my statements about the stance of policy and the outlook in very conditional terms. I do this because of the great uncertainty that surrounds these issues. Frankly, all approaches to assessing the stance of policy are inherently imprecise. Just as imprecise is our understanding of how long the lags will be between our policy actions and their impacts on the economy and inflation. This uncertainty argues, then, for policy to be responsive to the data as it emerges, especially as we get within range of the especially as we get within range of the desired policy setting.

You can't construct a time series without comparable figures. The Fed certainly is not cooperative in supplying comparable figures. E.g., for a time a figure is seasonally or not seasonally adjusted, then only seasonally adjusted data are available. One, or several of the variables' definitions is changed, or is revised. The data is reconstructed. The data collection changes. The reporting changes - is further delayed. The reporting becomes infrequent or contains errors. The new data overlays (wipes out) the old data. One Reserve bank reports a figure different than the Board of Governors. Then the Reserve bank with the most accurate figure discontinues publishing the data, etc., etc.

In fact, there is almost nothing left that the Fed could do, to corrupt the currently reported figures. You adjust the best you can. So, it's a wonder to observe any reliable economic relationship.

Richard Fisher, November 2, 2006:
"In retrospect [because of faulty data] the real funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer than it should have been. In this case, poor data led to policy action that amplified speculative activity in housing and other markets. The point is that we need to continue to develop and work with better data."

Some data, e.g., bank legal reserves, works even with bad data. Bad theory makes bad data.

Goldilox--I have absolutely no problem with your sense of humor. And think that some folks should loosen up (Flax seeds and mineral oil can help, really!).

I have read that some believe cell phone transmissions may be the problem, disorienting bees and making them unable to find their nests to return to.

This issue, if unresolved, could make Bird Flu look like a walk in the park. You're talking about widespread famine (on top of scarcity induced by the Ethanol boondoggle). Certainly sky high food prices here (and inflation), if not the famine that occurs in countries dependent upon US grain exports. MAJOR MAJOR problem. Certainly not for gold though, as it will fortunately only benefit.

But why now? Who knows? What will the powers that be cook up next to blame the coming economic calamity on, so as to avert the retribution that they so justifiably deserve?

Forgive the free flow chain of thought, nevertheless, through it all, don't believe everything you read (like Don Imus was fired for a few poorly chosen words from a familiar repertoire, rather than the real reason, his threat to reveal the truth about THAT day.) It's always the same: there's always two reasons for everything, the reason people tell you, and then the REAL reason they don't tell you.

The outlook? The trend rate of legal reserves has been sharply broken. Now the roc is dis-inflationary. And if you remember in 2006 the FOMC tightened in Feb and it took until July for interest rates and commodities to turn around. When the FOMC tightens there is both a short run and a long run monetary policy effect.

I don't have the same confidence I once had in the legal reserve figures. That's because from 1947-1977, the multiplier doubled in (30 years). Then from 1977-2005 the multiplier doubled again (35 years). At its current pace the multiplier will double in 6 years. The specified volume and type of deposit liabilities that depository institutions have to hold reserves against has been dramatically reduced. The decline in reservable liabilities has accelerated. The link between reserves and bank credit is not as close as it once was or should be.

@ Sierra Madre,

Perhaps it's important to differentiate between hooliganism and revolution. Where the former is probably idle hands starting trouble from boredom, the latter is more likely an action to invoke major change.

TPTB and their lap-dog media often confuse the two, calling revolutionaries "terrorists and/or anarchists", but closer analysis suggests a clearer dicotomy between the two.

Envy may well be a factor, but so may a desire for more equitable distributions, which only the "haves" would call "envy".

Your points are well taken, although this discussion is much more complex than we can go into here.

@ Flow5,

"Bad theory makes bad data"

A reasonable corollary is that "bad data makes for bad theory", as well, since so much of "theory" evolves from interpretation of available data.

I see you've brought your mineral oil out of the closet for some "humor", but this isn't the other gold forums where you practice your duplicity bashing USAGOLD.

@ mikal,

"I don't use words like surge because some other poster uses them. Their meaning is clear in the context I use them and particularly the spirit I offer them.
Nor are shrill attacks on posters blind anyone to lazy reading and dissembling."

I really don't understand what you are trying to say here.

If you thought I was attacking you for posting about the "bee death surge", you are mistaken, and I apologize for any such inference. I was simply stating that the current bee death rate "surge" is probably NOT very corelatable to previous rates.

My defensive response was in regard to you deciding that I need your permission to be sarcastic, as sarcasm has been my style of choice for about 50 years.

@ Flow5,

I have wondered if the reserves requirements are not even more to blame than rampant currency creation for "bubbles", but perhaps they are incarnations of the same banking "excesses".

Would RE defaults be a problem if the lender banks held adequate "reserves"?

Law Passed to Pay Interest on Reserves, Effective in 2011:

The Financial Services Regulatory Relief Act of 2006 authorized the Federal Reserve banks to pay
interest on reserve balances and gave the Board of Governors authority to lower reserve
requirements on all transaction deposits (applied to deposits above a certain threshold level) to as low
as ZERO PERCENT, from their previous minimum top marginal requirement ratio of eight percent.

If the Fed can't control monetary flows (MVt) through attempting to control the cost of credit now (using the fed funds "bracket racket"), then I hold no hope if the Fed eliminates required reserves and reserve ratios altogether.

(1) Using contractual clearing balances + vault cash(prudential reserves), is the same mechanism used with the Euro-dollar (foreign-dollar) banking system. And (2) all those countries using this procedure (e.g., the "Taylor Rule") report M3 (but the US discontinued). This was one reason China gave for wanting to dump dollar reserves.

"bad data makes for bad theory" the market is the crucible

I notice the Dollars bouyancy at 82 is holding gold just above Sinclairs $682 Angel. Another drop from 82 may very likely inspire bids near or above $700/ oz.

The only tool at the disposal of the monetary authorities in a free capitalistic system through which the volume of money can be controlled is legal reserves.

The monetary authorities use two tools to control the money supply, legal reserves and reserve ratios. Furthermore, the reserve assets that all money creating institutions are required to hold, should be of a type the monetary authorities can quickly ascertain and absolutely control. The only type of bank asset that fulfills this requirement is interbank demand deposits in the Federal Reserve Banks owned by the member banks. This was the original definition of the legal reserves of member banks in the Federal Reserve Act of Dec. 23, 1913 �(Owen-Glass Act) and it is still the only viable definition (pre-Dec 1959 requirements pertaining to assets). The time is long past for the Congress to require that balances (IBDDs) in the Federal Reserve Banks be the sole legal reserves of all banks. If this reform is not made all other reforms will be of little consequence.

Similarly the monetary authorities have to have complete discretion over changes in reserve ratios. Note: required reserves were 20 percent of demand deposits (for central reserve cities) from 1937 - 1958 and are 10 percent today. This is essential since under fractional reserve banking (the essence of commercial banking) these ratios determine the minimum volume of legal reserves a bank must hold against a specified volume and type of deposit liability.

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.

Monetarism involves controlling the volume of total reserves, not the volume of non-borrowed reserves as administered by Paul Volcker. At times, 10 percent of all reserves were borrowed during Oct. 79 - Oct 82. Monetarism has never been tried. If the money supply is controlled properly, the determination of interest rates can be left to market forces.

Sierra Madre--I beg to differ. Look at the recent tortilla demonstrations in Mexico, when the corn price quadrupled. Hundreds of thousands of people in the streets.

That is what brings people in the streets, not getting stuffed with Pizza Hut, McDonalds, and KFC. Excess carb consumption causes obesity and loss of energy, plus diabetes.

A hungry person, on the other hand, can still be a healthy person and an angry person.

The first rule of reserves and reserve ratios should be to require that all money creating institutions have the same legal reserve requirements, both as to types of assets eligible for reserves, as well as the level of reserve ratios. Ideally, monetary policy should limit all reserves to balances in the Federal Reserve banks (IBDDs), and have uniform reserve ratios for all deposits, in all banks, irrespective of size.

Further evidence that the Fed 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), 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 the rationale behind discontinuing publishing M3.

http://fraser.stlouisfed.org/docs/MeltzerPDFs/bogsub020538.pdf Artical: Member Bank Reserve Requirements -- Analysis of Committee Proposal; published -- Feb, 5, 1938.
"In 1931 this committee recommended a radical change in the method of computing reserve requirements, the most important features of which were�"(2) uniform percentage requirements against the volume of deposits of both types and in all classes of cities; and (3) requirements against debits to deposits"
"the establishment of a low reserve against time deposits in 1914 has facilitated the growth of bank credit without a corresponding growth in reserves"
"the committee recommends that all member banks and all deposits be treated alike for reserve purposes"
"the committee propsed that reserve requirements be based upon the turnover of deposits"
Opposition to:
(1) "They question, however, the validity of the basic principle that total debits against deposit accounts provide a significant standard for control of the business cycle. Such a large portion of debits reflect financial transactions"
(2) "reserve requirements against debits would unduly increase required reserves for banks at times whn increases could not be justified on the basis of current monetary policy. These include variations caused by seasonal activity"

The objections are valid in their literal sense, however, with a few changes in the committe's proposals, the committee would have established a timeless FOMC policy. The committee should have discovered that rates of change in monetary flows (MVt) correspond to rates of change in Nominal GDP. That's not a contemporaneous relationship. They didn't need to base reserve requirements on the turnover of deposits. It can't be done in the manner the committee suggested (by ignoring financial transactions). But financial transactions could be minimized by excluding money center banks).
Monetary policy should require uniform reserve ratios for all deposits, in all banks, irrespective of size (the committee's recommendation). However the committee recommended allowing the banks to count vault cash as reserves. This was a mistake. And when it was finally passed, and became effective (1960), the FOMC lost control.

Sorry for monopolizing the board.

http://urbansurvival.com/week.htmGeorge has posted an interesting composition tying the Web bot flood predictions with the current unseasonal weather patterns.

In my experience, outside of massive rainfall, two other culprits in flood potential are early thaw and late snowfall, the latter of which seems to affecting much of the country this week.

It reminds me of my first winter in Reno, in 1996, when we experienced three feet of snow in December, followed by warm rain in January. Most of the highways to CA (all built along river beds) and the Reno airport all ended up closed for days as that massive melt wound its way back to the Pacific Ocean.

By the way, here on the SW coast today, it is chilly and quite cloudy, all of which heads directly for AZ and CO from here.

Anyone know why K-co is still reporting POG about $4-$5 higher than INO?

PA

But, please consider that in our age, repression of the masses through SCARCITY and further control, through ANXIETY has been, and is, an effective means of quelling riotous behavior. (Aids, Asian Flu, Terrorism, World Heating Up, etc.)

When people of the lower classes (how else should I say it?) are worried about where the next meal is coming from, perhaps having missed the previous meal, they are hardly in the mood to go about "revolutioning". What is foremost on their minds is to keep their present job, or find a job, or beg borrow or steal the money to feed their families.

The MIDDLE CLASSES are the most revolutionary. They have the half-baked mental equipment that gives them some excuse to go on a rampage, and they are not exactly about to starve. Further, they are envious of all those above them. All, a dangerous mix!

So, I am of the opinion that it is not hunger that drives revolutions, it is, as I said, ENVY and a full belly combined with idle time to go a-rioting.

But, let's leave it at that, OK?

SIERRA

PS tortilla demonstrations in Mexico were organized politically and hardly a revolutionary manifestation.

"PS tortilla demonstrations in Mexico were organized politically and hardly a revolutionary manifestation."

But you consider Soccer hooligans revolutionaries?

Something is not computing here.

I agree that middle classes drive revolutions, but not necessarily from envy. Perhaps they are tired of being swindled by those who claim "a divine right" to do so with impunity, and find unequal application of law no longer acceptable.

Revolutions "happen" when the middle classes sway the lower classes to support them instead of the "ordained" Kings and Oligarchs.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteWhatever was holding back the PoG rise in early trading seems to have been successfully beaten back in later hours.

"Knock, knock, knockin' on 690's Door"

I am inclined to violate Pat Robertson's copyright, and start my own "700 Club"!

http://www.eweek.com/article2/0,1895,2114109,00.asp?kc=EWNAVEMNL041607EOADIt seems that dot.com companies, so reviled in 2001, are reasserting themselves as true commerce contenders again, now that the bubble has burst and the fluff expended.

As our host would probably attest, Internet commerce continues to grow despite the bubble bursting set back pre-911.

http://www.jsmineset.com/cwsimages/Miscfiles/4509_April1607GoldAM.pdfSee Trader Dan's PDF and interesting remarks at JSMineset.

$690 or $694 Either is fine. I'm just numerically challenged ;0)
Slingshot---------<>

http://www.informationclearinghouse.info/article17516.htmsnip:

I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies.Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That's not the promise of America my parents and yours traveled across the ocean for.


-Goldilox

Short on solutions, but definitely not short of political finger-pointing.

@ Slingshot,

Yes, that is certainly more "margin of difference" than I am used to seeing as well.

I thought you were talking about spot vs. Futures at first.

http://www.usagold.com/live.htmlIf you want the real-time chart to display greater (or fewer) data points, simply click the chart's button item that looks like this "#" and choose up to 1000 points of data. (The default is set at #250 points).

Another key adjustment that works in tandem with the "#" button is the menu item above it labelled "Time Scale" -- this determines how much time each individual one of those aforementioned data points represent.

The default timescale is set at 2 hours. This means, in tandem with the #250 data points, the chart is displaying the latest 500 hours of market data.

If, for example, you change the TimeScale from "2hrs" to "Daily", the chart would display the latest 250 DAYS of market data. (And naturally, if you then change the "#" setting to something else, such as 600, you would see the latest 600 days of market data.)

Another VERY useful tip, especially when you want to examine a greater number of data points or else enjoy a less-compressed vertical and horizontal scale, is to click the chart's little icon that looks like a tack (or a pin). This will detach the chart, thus allowing you to resize it by using your mouse to drag it's lower right-hand corner.

GIVE IT A TRY! ! ! You'll like it. And be adventurous... use the "Instruments" menu item to view other markets, or use the other buttons and menu items to construct lines for your own technical analysis!

Most of all, have fun -- you'll likely learn something very useful in the process!

Thanks, of course, to USAGOLD-Centennial's president MK (and to brokers Jonathan and George) for electing to partner up with the good folks at Netdania in order to put this useful service right at their client's fingertips. Enjoy!

Randy

FOMC has shifted its emphasis on collateral types accepted for repurchase agreements. More mortgage backed securites have been substituted.

With the chronic depreciation of the dollar, the chronic shortage in supply, & perpetual inflation: the Got Gold Game is now how fast & how liquid?

Yup, that's a really nice charting application - thank you, USAGOLD, for providing it. Not to sound churlish about a new toy, but would it be possible to add the USDX to the instruments ?

http://www.usagold.com/live.htmlI've already explored that a bit, and came to an understanding that it's not part of our data feed; sort of like an upper tier cable channel -- it might be available if someone is willing to pony up the extra cash.

If enough of us support the fine folks at USAGOLD-Centennial Precious metals both directly and by word-of-mouth and word-of-web, there's a very good chance we'll continue to be rewarded with more toys and tools (such as this Forum and the Live page, to cite two examples).

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

April 16 (DowJones, MarketWatch) -- A softer tone in the U.S. dollar and physical buying enabled gold futures to close higher Monday, traders and analysts said. Some gyrations over the course of the day were linked to crude oil, which initially tumbled but then bounced back.

The COMEX June gold contract rose $4.60 to $694.50.

"The U.S. dollar obviously remains very weak," said Bernard Hunter, director of precious metals with Scotia Mocatta. "And we have seen a lot of physical buying underneath the market. Overall the sentiment remains very, very bullish and the uptrend is certainly in tact."

The metal opened the day stronger after the euro peaked overnight at $1.3578, its strongest level since January 2005.

The metals subsequently sagged before recovering again, however, with the oscillations blamed in large part on crude oil. May crude at one point fell as far as $62.55. "Then a pop back in the spot-month crude put a bid in the precious-metals sector as well," said Mike Zarembski, futures analyst with XPRESSTRADE.

The yen fell to a record low against the euro and a seven-week low against the dollar on Monday. That pullback stemmed from the Group of Seven leading industrial nations failing to address weakness in the Japanese currency, prompting investors to reestablish carry trades.

At the same time, the British pound rose to a 15-year high against the dollar. Strong U.K. house prices and hotter-than-expected wholesale-inflation data increased the chances of a further interest-rate increase by the Bank of England in May.

Overall, however, the U.S. Dollar Index has weakened since the end of last year, losing 1.9% as of Friday's close. [Ed. note: Over this same period, gold has gained 8%.]

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

http://www.usagold.com/gold/special/dutch2.htmlWord just in from Jonathan is that only around 100 coins remain available from the 1200 coin allotment of gold Guilders in this month's offering of the Buyers' Group.

Call today (or tomorrow at the latest) to get while the getting's good.

See url for details.

R.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=There seems to be a pall settling over the entire landscape of late (say Jan 2007>) where a lack of attention to detail and poor quality is being accepted as the norm ...kind of a chronic Post-modernism engulfing all facets of life ...Weird!
One such example is the alt-Gold comparison Chart whereby, if you're lucky, you'll see how PoG and the alts are NOW in complete sync.
This of course is an illusory construct to give the casual observer the impression Gold and Paper are on the same Planet, we all (here) know thats not the case eh?

ANOTHER example of post-modernist behaviour is becoming resigned to the continual "Windows has encountered an error and needs to shut down ...send error report? ...don't send?". After about 10 of these in a row I have found myself reverting unconciously to that quaint pastime of lolling back in the lounge-chair and watching 3hrs of TV ...how old-fashioned of mois...
...where I'm confronted with yet another post-modern enigma. My 25ft wide, ultra high definition, Plasma spectacular beams a glorious picture ...of the rolls of Fat dripping off the "Biggest Loser" contestants.

Something needs fixing ...but quick!

Great addition that live feed TC.

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business%5FNews⊂section=market+news&month=April2007&file=Business_News200704171455.xmlDUBAI -- Qatar central bank gold holdings rose more than fivefold during January and February, central bank data showed, even though gold prices only climbed 4.5 per cent during the same period.

Qatar, which said last year it wanted to diversify its foreign exchange reserves away from the dollar, held QR240m ($65.97m) of gold on February 28, compared with QR44.3m at the end of December, the data on the central bank website showed.

...Like other Gulf Arab oil producers, Qatar pegs its currency to the dollar, which declined about 10 per cent against the euro last year. That helped spur Qatari inflation to 11.83 per cent last year, the highest rate on record.

"The gold purchases are part of a diversification strategy designed to reduce exposure to the USD, the weakness of which is a concern to the QCB and others in the region," said Simon Williams, Middle East economist for HSBC in Dubai.

...Qatar's central bank said last April it was buying euros as part of its diversification programme.

^___(From url)___^

Tip of a iceberg.

R.

Gold has done real well and has come back from the Smack Down. But just how much convincing does it take to get people on the train. Yen going up and the US is messing with China on trade. India has the gold festivals on the horizon and with gold at $690 I just have to asked where are the speculative investors. Do they need $700 exactly?Lots of Fishy stuff. Are the gold sites working off of London Spot or Futures? Countries increasing their gold and the USA doesn't have a clue. The 700 club was talking about gold and the Dollar today. Pat Robinson sure made it a point for a closeup of golds 183 percent rise from 2001 on the chart.
A watched pot never boils.
Slingshot---------<>

As a parent, our heart goes out to all the victims of this horrible crime. . . . .There is no real comfort that any of us can offer except that we all know that it could be any of one of us at any time. . . . . . May God give you strength in your hour of need. I wish I could offer more. . . What is this evil that lurks among us?

Thank you mr kosares for that, tech is my school. live not very far from campus. one of the professors that was shot in the arm i know fairly well. i am beyond being in shock. it is a very beautiful campus and even though it is a world-renowned engineering university the place has always seemed isolated from big metro-area problems. not any more

@ physicalman,

Senseless slaughter is just so hard to fathom!

http://www.bloomberg.com/apps/news?pid=20601081&sid=avNDK.76FIKA&refer=australiaA quick calculation suggests that the total
to be spent here just to close the hedge book
will be about US$535 million.

* * *

Lihir to Sell A$1.2 Billion
in Shares to End Hedging

By Jesse Riseborough
Bloomberg News Service
Tuesday, April 17, 2007

http://www.bloomberg.com/apps/news?pid=20601081&sid=avNDK.76FIKA&refer=a...

Lihir Gold Ltd., a Papua New Guinea gold-mining company, plans to sell A$1.2 billion ($998 million) in shares to close its hedge book, repay debt, and fund expansion.

Existing shareholders can buy one new share for every three shares held at A$2.30 each, a 32 percent discount to yesterday's closing price, the Port Moresby-based company said today in a statement to the Australian Stock Exchange.

Lihir joins global gold mining companies, including the world's largest, Barrick Gold Corp., that have been reducing gold sold in forward contracts to take advantage of prices that have more than doubled over the past five years.

"That Lihir will move into a completely unhedged position is a significant positive for the company," said Greg Canavan, an analyst at Fat Prophets Fund Management Ltd. in Sydney. "They have obviously taken a positive view on the gold price and it is an endorsement for the gold market as well."

The shares rose 16 cents, or 5 percent, to A$3.36 yesterday before they were halted on the exchange. The company expects the new shares to begin trading on April 27.

"This restructure we have announced today enables us to reorganize our balance sheet, improve our financial structure, and create a solid platform for the future," Chief Executive Officer Arthur Hood said in the statement.

Existing institutional investors will account for about 80 percent of the sale, or A$856 million, and individual holders will be offered A$214 million, the company said. A further sale to institutions will seek to raise A$120 million.

The funds raised will close out Lihir's hedge contracts of 934,500 ounces of gold at a contract price of $343 an ounce and repay a 480,000-ounce gold loan at $449 an ounce, it said.

Gold for immediate delivery fell 66 cents, or 0.1 percent, to $689.55 an ounce at 12:33 p.m. Sydney time. It rose to an 11-month high yesterday of $690.20.

Gold sold by mining companies in forward contracts fell 25 percent in 2006, the biggest decline in at least five years, Mitsui & Co. said in its annual global survey of 118 producers Feb. 23. Sales dropped 13.4 million ounces, 9 million ounces more than the reduction in 2005, led by a cutback in hedges by Barrick Gold Corp., Mitsui said in the February report.

"They are obviously getting a lot of shareholder feedback saying 'we would prefer you as an unhedged gold company' and it says management are obviously very optimistic on the gold price," said Canavan of Fat Prophets, who holds the stock and recommends it as a buy.

Many producers increased forward sales when gold fell to a 20-year low in 1999, to hedge against further declines in prices Since then, the gold price has more than doubled, forcing mining companies to buy on the spot market to unwind hedges.

Funds raised from the A$1.2 billion share sale will also help boost total production to more than 1 million ounces a year, the company said.

Production from the company's Lihir Mine in Papua New Guinea was 193,300 ounces during the three months ended March 31, a 5 percent increase compared with a year earlier and the second-highest, the company said in a separate statement. Sales for the quarter were $96.4 million, down from $100.8 million a year earlier.

The company increased it first-half production forecast to between 375,000 and 400,000 ounces, Lihir's Hood said. The company expects to meet its full-year production forecast of between 800,000 and 830,000 ounces of gold, he said.

http://www.csmonitor.com/2007/0416/p01s04-usec.htmlAs US Tax Rates Drop,
Government's Reach Grows

By Mark Trumbull
Christian Science Monitor
Monday, April 16, 2007

Maybe the era of big government isn't over after all.

As Americans finish their annual tax-filing flurry to meet a Tuesday deadline, it is true that tax rates are lower than they were a few years ago. But according to a different yardstick, the federal government's reach is expanding.

Slightly over half of all Americans -- 52.6 percent -- now receive significant income from government programs, according to an analysis by Gary Shilling, an economist in Springfield, N.J. That's up from 49.4 percent in 2000 and far above the 28.3 percent of Americans in 1950. If the trend continues, the percentage could rise within 10 in
years to pass 55 percent, where it stood in 1980 on the eve of President's Reagan's move to scale back the size of government.

That two-decade shrink-the-government trend now appears over, if for no other reason than demographics. The aging baby-boomer generation is poised to receive big payments from Social Security and government healthcare programs.

"New Deal programs persist" despite the Reagan revolution and its aftermath, says James Galbraith, an economist at the University of Texas in Austin. "They persist because they are largely successful and highly popular."

Shilling's analysis found that about 1 in 5 Americans holds a government job or a job reliant on federal spending. A similar number receives Social Security or a government pension. About 19 million others get food stamps, 2 million get subsidized housing, and 5 million get education grants. For all these categories, Shilling
counted dependents as well as the direct recipients of government income.

Many Americans, in surveys, say they don't like the way their tax money is spent. And a majority now says, in a reversal from a year ago, that their federal income taxes are too high, according to an April Gallup poll.

Yet at the same time much of the US population is on the receiving end of that tax-revenue stream.

Government has always created jobs, of course, as it provides everything from national defense to roads and schools. It is another type of spending, however, that is really growing in scale: Government is in the insurance business.

Health care and Social Security are the big programs poised for growth, thanks to the arc of the baby-boom generation, longer lifespans, and rising medical costs. Insurance-style programs also include farm subsidies and efforts to relieve poverty.

The list could grow.

Some lawmakers hope to offer "wage insurance," a temporary benefit to cushion the transition toward new jobs for workers laid off due to global competition. At the state and federal levels, politicians are also considering government's role in extending health care coverage to more of those who are now uninsured.

All this reflects an ambivalent America. The nation prides itself on the benefits of economic freedom. "The era of big government is over," President Clinton declared as he prepared to put new limits on welfare spending in 1996.

Yet as a rich nation, America also sees the opportunity to offset financial risks faced by its citizens.

"You do have the yearning for cradle-to-grave paternalism, but as Americans you also have the carry-over of the frontier spirit" of individual opportunity, says Shilling. That's the trade-off that will define the scope of government, he says.

This balance will be tested in the years ahead.

The Congressional Budget Office, in a long-range forecast prepared in 2005, outlined a baseline scenario in which entitlement programs push federal spending to 25.3 percent of GDP by mid-century, up from about 18.4 percent today. That number could go higher still if medical inflation doesn't edge downward.

Similarly, Shilling predicts that the number of "government
beneficiaries," as he defines them, will grow to 60 percent of the US population by 2040. Against this backdrop, many Americans are understandably uneasy about the fiscal path of their politicians.

Some want to scale back the federal budget. Others see new priorities for spending, such as scientific research and global warming.

"It pays to invest in early education programs," says Fran Smith, who works for an education-oriented community organization in Boston.

To afford it, she says, government needs to use money more wisely, more for public goods and less for what she says are the "profit motives" that now pervade Washington.

"For ... working-class people, the last thing we want is more taxes," Smith says as she hurries to an afternoon meeting.

One challenge for the nation is to define what is wise spending and what is not. Some government largess is showered more on the well-to-do than the needy. By giving a tax break for the interest homeowners pay on their mortgage, for example, the government is effectively spending money to encourage homeownership. But the
deduction is far more valuable to people in higher tax brackets than low ones.

"Arguably the mortgage interest deduction actually reduces the number of homeowners, because it pushes up the price of housing," Len Burman of the Urban Institute said last week in a seminar titled "Stupid Tax Tricks."

But, stupid or not, don't expect that popular deduction to bite the dust any time soon.

By some other measures -- such as taxes or spending as a share of the overall economy -- the federal government isn't particularly large now. Even a controversial war in Iraq hasn't changed that.

But as insurance programs embrace an aging population, government is on track to grow.

For his analysis of government beneficiaries in the US, done last year, Shilling looked at data from 1950 through 2004. His tally was conservative on several fronts -- including the care he took to avoid double-counting anyone.

He added up the number of federal, state, and local government workers, plus private-sector workers who owe their jobs to government. He then tallied the recipients of transfer payments (like pensions) and a few other substantial programs (like food stamps). And he tacked on the dependents of these direct beneficiaries.

He divided his total by the US population to get a "government beneficiary" ratio for each decade. The ratio has risen, he found, from 28.3 percent in 1950 to a peak of 55.0 percent in 1980. It edged down in 1990 and again in 2000, and now has begun climbing again.

Looking at the big picture, especially entitlements for older Americans, some experts worry about a fiscal undertow.

"I fear that we may be on the path to becoming a decrepit,
high-unemployment welfare state," says Daniel Mitchell, an economist at the libertarian Cato Institute in Washington. Economists differ regarding whether, or at what level, a high tax burden acts to dampen economic growth. European nations have shown, for example, that advanced economies can maintain generous social-welfare programs.

But Mitchell says these nations pay a price of more tepid growth. Sweden, he says, has in recent years dropped off the global Top 10 list for per-capita output. Ireland, by contrast, has kept the government burden low and enjoyed rapid economic growth.

-END-

The flowers all wilted, the fields turned to dust.
Budding trees frozen, mortgages bust.

Hearts now are frozen, or lusting for blood,
Travail of the Bankers, Return of the Flood.

.

Sir 'Lox, excuse me if I seem a bit cryptic, my only other recourse is to be a bit absurd; economics is dismal enough already, it almost begs to be made into a source of humor.

Having read several recent articles on the bee issue, it seems so similar to other mysteries like gulf war disease: multifaceted and impossible to pin down. The scientists will find a solution in a few years, I am sure.

"Fix it until it breaks" has of course one proviso: one must willfully ignore fundamental causes. This is easy to do via simple appeals to our emotions. After all, murder is already illegal, and it is obvious that no new laws are needed. But of course we live in an ignorant age, and absurdity is our only hope: I propose that we pass a law making crime illegal- THAT should stop all the killing!

But that makes about as much sense as trying to outlaw price inflation while allowing the fiat to grow like topsy.

Amidst the travail of ages, gold proves its worth as the remnants of Rome squabble with the barbarians over it.

Today, the human race faces more dally stresses than ever before. The over all crime rate may be down in some areas, but violent crimes are on the rise. I have noticed that pre 911 and even post 911 that the stress bubble for our race seems to be starting to EXPLODE!

It seems that the day to day grind for some seems to become more and more intolerable. Families are financially stressed and breaking up. Divorce rates are at an all time high. Individuals are more and more lost in the "I give up" mode and are unmotivated to better themselves and settle for mediocrity or less.

I wonder why?

Do you feel that excessive redundant laws and over taxation with loops of unfairness could be an issue?

Could it be the narrowing of the middle class who is on a fast tract of extinction?

What's causing the breakdown of the US standard of living?

As each of us try to plan and prepare for the future can we really be immune from any of the world issues that could hit at any second?

How do we prepare our selves for this new century of challenges?

If I could offer one thought it would be this. Sit back people and take a deep breath and ponder and meditate. Solutions come to a clear mind.

Security? means gold for me.

Have a great day!
:-)

$25 smackdown today

PA

We hit 82.8K Y/Oz and it's been all hands to the pumps to stop Gold since.
With a red Buck and red e-Bond I can't see them keeping the dog(s) down much longer ...sub $700 looks so yesterday for mine ...giddy up^ dogs!

@ CP,

While the Turnbull article focuses on the recipients of "Government Banking", he almost completely glosses over the issue of government's own usury until the very end. He seems to treat SSI and pensions as "welfare", neglecting how much money has been confiscated by those programs and redirected to other hands. Even the 401k bucket has been a "windfall" for Wall St vultures, while "excess" SSI has been wasted on everything BUT retirement.

I guess its only fitting that as the covert banksters run the "shadow government", the government becomes the ultimate "failed bank" in the public's eye, bailing out the confidence players and letting their "marks" take the fall.

http://www.netdania.com/ChartApplet.asp?symbol=GBPUSDbreaks thru $2 strongly.

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

The single thing that stands out to me, especially after the revisions when Treasury gets a better feel for who is actually doing the buying, is that China appears to be almost single-handedly carrying the US. It seems that much of Chinese buying is being filtered through London perhaps for reasons of privacy. There was a sizeable adjustment made in the Great Britain holdings which saw a sharp drop and a corresponding big rise in the Chinese holdings number. Also noteworthy is the drop off in the rate of US Treasury purchases from OPEC nations. Perhaps some of this is due to Arab and Iranian reluctance to hold too large a portion of their reserves in dollars and their desire to move more of those reserves to euros. Were it not for Chinese buying, I doubt seriously that the US would have sufficient funding for our trade imbalance.

This is even more alarming considering the escalating trade tensions between the two nations.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/17/cngold17.xmlBy Ambrose Evans-Pritchard
The Telegraph, London
Tuesday, April 17, 2007

As Gordon Brown prepares for a grilling in the Commons over his fire-sale auction of Britain's gold at the bottom of the market, concern is mounting that the Treasury may have lost control over the small amount still left in its vaults.

Peter Hambro, head of Britain's largest pure gold mining company, said he believed the Bank of England may have leased out its bullion to earn extra yield.

"The real risk is that the Treasury has lent out the remainder of the gold. It is very important to know whether the bank's gold lending is on a secured basis," he said. The concern is that counter-parties could default in a crisis such as the LTCM-Ashanti affair in 1998.

"The whole point of gold is that it's not somebody else's paper currency. It's the stuff that keeps you alive when everything else goes wrong," he said.

Central banks around the world have routinely lent out gold over the years to bullion banks such as Goldman Sachs and JP Morgan. The IMF last year questioned if they had lent out more gold than publicly revealed, a situation that would leave the market a large overhang of "short" positions. The Treasury said last night that it would look into any possible gold loans.

With gold now trading at $690 an ounce, Mr Brown's decision to break ranks with the US, Japan, France, and Germany by selling off 395 tonnes of gold has cost taxpayers more than �2 billion.

In a move that astonished dealers, Mr Brown insisted on selling the gold in open auctions. The first sale drove the price down to $254, the low-point of an 18-year slide. There were 17 auctions between July 1999 and March 2002 yielding an average of $274.9 an ounce.

Ross Norman, director of TheBullionDesk.com, said the reason for the sales was to support the fledgling euro. The proceeds were switched into 40pc euros, 40pc dollars, and 20pc yen. "His motives were political, but it was carried out in an incredibly foolish way, just as the market was turning up."

Good grief ! That came out in the Telegraph ?! For those on the western side of the Atlantic, imagine that article in, say, the Washington Post. With GS and JPM clearly named and associated with shorting, too. It's a little tangential to the "real" story, which is, as far as the paper is concerned, to see how much dirt can be splattered about the UK's No.2 politician, when moves are being made to make him No.1, but it will be fascinating to see if it "has legs", as they say in the business. How long before someone in the financial press really starts wondering why you would want to lease bullion in large quantities .......... ?

C!

Looks like the rate of descent of the value of the US Dollar is accelerating. If it keeps going, the bonds, treasuries and stocks are going to have a downside correction, SOON.

In response, the POG & the POS will have an upside correction, SOON.

(I thought this was supposed to be a "controlled descent".)

SF

2005-10-01 199.200
2005-11-01 197.600
2005-12-01 196.800
2006-01-01 198.300
2006-02-01 198.700
2006-03-01 199.800
2006-04-01 201.500
2006-05-01 202.500
2006-06-01 202.900
2006-07-01 203.500
2006-08-01 203.900
2006-09-01 202.900
2006-10-01 201.800
2006-11-01 201.500
2006-12-01 201.800
2007-01-01 202.416
2007-02-01 203.499
2007-03-01 205.352

The seasonally mal-adjusted data originates from the Federal Reserve's fallacious "real bills" policy.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s&w=5&t=f&a=2ANOTHER beautiful WATERFALL in the US$ today !
<;-)

http://urbansurvival.com/week.htmIncluding an interview with JS.

Good read.

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_liteSome rather powerful forces attempting to keep POG in check while the $ drops.

The FOMC's policy of seasonal accommodation has its roots in the fallacious "Real Bills Doctrine" (i.e., the injection of new bank credit for financing inventories or any other phase of merchandising or processing is obviously inflationary when the theory applied under the assumption that labor and facilities are fully employed).

The wild gyrations of this policy are responsible for the resurgence of inflation and an increase in inflationary expectations in the first quarter of 2007. During this period the short-term peak-to-trough rate-of-change in commercial bank legal reserves vaulted to 75 percent. Similarly the long-term peak-to-trough rate-of-change in commercial bank legal reserves vaulted to 25 percent. Thus was laid the basis for increased money flows, higher prices and larger inflation premiums.

In other words, the Fed's technical staff, by adhering to the false Keynesian theory � that the money supply could be properly controlled through the manipulation of interest rates, specifically the federal funds rate � lost control of monetary flows (MVt).

Inflation is a monetary phenomenon. Inflation occurs when there is a chronic across-the-board increase in prices. Inflation is not a temporary increase in the price level, nor a long-term increase in any particular prices. Inflation simply results from a long-term excessive flow of money relative to the volume of real output of goods and services offered in the markets.

At the culmination of this seasonal period, the Manager of the Open Market Account may reverse their operations, by selling securities, thereby reducing the volume of legal reserves added during the holidays, but they now have started another price spiral from a higher plateau.

The Fed has always been motivated by an overwhelming desire to accommodate bankers and their borrowing customers. Unfortunately we live in an excessively permissive society, and this permissiveness extends into the area of central bank administration. Inflation in this country will never be brought under control until the Fed assumes the full money management responsibilities of a central bank In any event the Fed unknowingly acted irresponsibly

The existence of exact economic lags is the most important discovery in the history of economics. The lags for bank debits & legal reserves are both the same; they have the same length, all the time. The adjustments/corrections for the variables in a "Taylor like Rule" are always reactive. The adjustments/corrections for the variables in bank debits & legal reserves are always proactive. The impact of adjustments for a "Taylor like Rule" are always unknown. The impact of adjustments for bank debits & legal reserves are always known.

Inflation is the most important factor determining long-term rates operating as it does through both the demand for and the supply of loan-funds. The FOMC is responsible for maintaining stable prices but the market place should be left with the responsibility for the determining interest rates.

http://www.stlouisfed.org/news/speeches/2007/04_02_07.html
The rational expectations literature makes clear that policy regimes are the correct way to interpret policy. Tom Sargent has defined a regime as "a function or rule for repeatedly selecting settings for economic policy variables as a function of the state of the economy."(5) Others have labeled this "rule-like behavior." A policy regime, in some cases, might be as simple as a single equation; an example is the Taylor Rule, which I and many others have discussed elsewhere. In this case, the policy rule, rather than federal funds rate, is the instrument of monetary policy�the federal funds target is an endogenous variable within the larger model. The precise form of the rule, so long as it is consistent with price stability, is less important than policymakers displaying rule-like behavior. The "rule" certainly need not be a simple linear equation. Rather, the rule is a method of decision-making and a commitment to a specific, articulated objective. Nobel laureate Robert Lucas (1981) credits the introduction of this concept to Milton Friedman in his 1948 "A Monetary and Fiscal Framework for Economic Stability."(6) In the same article, Lucas notes that Friedman's maxim was lost to policymakers during the two decades of prosperity that followed the 1948 Employment Act, setting the stage for the Great Inflation.
Actual policymaking, of course, requires large doses of experience and judgment�former Chairman Alan Greenspan argued that model uncertainty counseled caution in policymaking. Models omit many real-world problems such as incomplete and asymmetric information, the high cost of information and the value to both workers and firms of multi-period contracts. Nevertheless, the essential insight of rational expectations survives�a sound policy rule or regime is essential for a good outcome.
Some analysts have argued against rules for monetary policymaking, viewing them as straitjackets for policy. If policymakers adopt a model, how do they respond when the economy changes significantly? Modern models clarify that the benefits of "rule-like" behavior accrue even if the central bank from time to time changes its policy regime or rule.(7) What is required is that at each instance when policymakers decide to take an action that is not consistent with their extant rule, the new action must be consistent with some policy rule that, in the medium- to long-term, will achieve the stated policy objective. Surely it cannot be the case that an optimal policy response to a new set of circumstances could be determined by consulting a table of random numbers.
When policy departs from usual practice, it is incumbent that policymakers communicate the change�its nature and rationale�carefully to the public. Monetary policy is more powerful, and better able to achieve its goals, if the forward-looking behavior of consumers and businesses is consistent with the forward-looking behavior suggested by the policy rule or regime. For several years, I have referred to this as "synching" the markets and monetary policy. The fundamental mechanism for making synching work is communicating the policy regime or rule�but rule-like behavior must be adopted by policymakers in the first place before it can be communicated to the public.

Your understanding of the "Real Bills Doctrine" - in its original form and before it was prostituted by the banks - is flawed.

The Bill drawn by a seller on a buyer at a term of 90 days maximum, was a credit entirely independent of the banking system. I am speaking of the ORIGIN of the "Real Bills".

It was a credit granted by the seller to the buyer, for 90 days, to pay for the buyer's purchase.

The banks had nothing to do with the creation of this credit. The banks BOUGHT the bills as short-term investments, guaranteed by the ownership of the merchandise sold, and by the net worth of both the seller and the buyer, until the merchandise was paid.

*****

The rest of your post is unobjectionable.

SIERRA

@ Flow5, Sierra Madre,

I do not doubt that what you are discussing is relevant, but it is couched so deeply in econom-ese and lega-lese that I haven't a clue what any of it means. I can only speak for myself, but I doubt that I am alone in this condition.

Any attempt to summarize all this stuff and its relevance in layman's terms would be greatly appreciated.

http://www.futuresource.com/charts/charts.jsp?s=TYXY&o=&a=V%3A15&z=610x300&d=LOW&b=CANDLE&st=Today saw Iron Fist step up to the plate to wring Bonds neck 'till it turned green ...the rest is history as they say.
For those watching, Bond pricing (reporting) has changed recently. The old "thirty second increments" have given way to "ten thousandths increments" ...so 0.5138 green equals approx 16/32th's ..or the old 0.16. Getting ready for the Hyperinflation I 'spose.
Comparing the early action on Bonds and the "arrested spike" in Gold at NY Open reveals all.

http://www.galmarley.com/Chart_pages/currency_charts.htmWhilst you "guys" eke out an unch on PoG today, spare a thought for we mere mortals abroad.
Thanks to the "new" method of Global Gold price discovery via Comex paper futures, we (foreigners) have to suffer the indignity of watching "our" Spot PoG wither on the vine.
The Composite Dollar (perhaps Compost might be more apt) can strengthen via Bond even with a sagging Buck, which in turn drops all the alt PoG's.
The $PoG "drop" everyone is looking for at present can materialise in a delivery month ONLY when the threat of Delivery has subsided ie: after OpEx imo, when the Bond component comes to the fore.

Ultimately these mackarainas WILL lead to FreeGold I'd reckon.

87.0 0.09 0.15 1999-09-01 7.82
89.0 0.05 0.14 1999-10-01 7.85
100.7 1.73 0.50 1999-11-01 7.74
115.4 3.24 1.09 1999-12-01 7.91
98.1 1.54 0.62 2000-01-01 8.21
82.2 -0.32 -0.08 2000-02-01 8.33
80.4 -0.43 -0.22 2000-03-01 8.24
81.6 -0.13 -0.08 2000-04-01 8.15
84.4 0.21 -0.01 2000-05-01 8.52
83.4 -0.36 0.06 2000-06-01 8.29
83.7 -0.53 0.07 2000-07-01 8.15
82.6 -1.81 -0.01 2000-08-01 8.03
83.1 -3.23 0.06 2000-09-01 7.91
82.4 -1.56 -0.05 2000-10-01 7.80
84.5 0.22 -0.07 2000-11-01 7.75
85.9 0.55 -0.11 2000-12-01 7.38
87.2 0.56 0.16 2001-01-01 7.03
80.7 -0.37 -0.10 2001-02-01 7.05
80.1 -0.34 -0.11 2001-03-01 6.95
80.5 -0.33 -0.21 2001-04-01 7.08
83.8 0.13 -0.04 2001-05-01 7.15
82.8 -0.03 -0.01 2001-06-01 7.16
84.2 0.18 0.08 2001-07-01 7.13
83.2 -0.13 -0.16 2001-08-01 6.95
105.1 1.92 0.67 2001-09-01 6.82
90.4 0.32 -0.43 2001-10-01 6.62
86.8 0.61 -1.19 2001-11-01 6.66
89.5 0.95 -0.36 2001-12-01 7.07
91.7 1.13 0.40 2002-01-01 7.00
87.8 0.40 0.31 2002-02-01 6.89
86.2 0.35 0.19 2002-03-01 7.01
87.1 0.28 0.11 2002-04-01 6.99
86.9 0.37 0.14 2002-05-01 6.81
85.5 -1.95 0.07 2002-06-01 6.65
86.2 -0.42 0.15 2002-07-01 6.49
85.8 -0.09 0.11 2002-08-01 6.29
87.9 -0.16 0.23 2002-09-01 6.09
88.7 -0.30 0.18 2002-10-01 6.11
90.4 0.26 0.19 2002-11-01 6.07
93.6 0.74 0.27 2002-12-01 6.05
94.1 0.71 0.56 2003-01-01 5.92
90.4 0.36 0.43 2003-02-01 5.84
89.6 0.41 0.38 2003-03-01 5.75
91.0 0.48 0.30 2003-04-01 5.81
91.8 0.60 0.38 2003-05-01 5.48
91.3 0.34 0.30 2003-06-01 5.23
94.0 0.53 0.45 2003-07-01 5.63
95.1 0.47 -0.41 2003-08-01 6.26
95.3 0.17 0.21 2003-09-01 6.15
94.4 0.03 0.32 2003-10-01 5.95
95.7 0.52 0.26 2003-11-01 5.93
96.8 0.72 0.21 2003-12-01 5.88
97.7 0.67 0.41 2004-01-01 5.74
94.1 0.23 0.33 2004-02-01 5.64
93.9 0.25 0.28 2004-03-01 5.45
95.4 0.14 0.36 2004-04-01 5.83
95.8 0.07 0.43 2004-05-01 6.27
96.2 0.09 0.42 2004-06-01 6.29
95.7 0.12 0.41 2004-07-01 6.06
95.2 -0.05 0.30 2004-08-01 5.87
98.4 0.16 0.41 2004-09-01 5.75
96.1 -0.16 0.24 2004-10-01 5.72
97.1 0.30 0.14 2004-11-01 5.73
96.9 0.30 0.12 2004-12-01 5.75
99.7 0.43 0.39 2005-01-01 5.71
96.0 0.01 0.26 2005-02-01 5.63
95.0 -0.13 0.17 2005-03-01 5.93
95.7 0.01 0.16 2005-04-01 5.86
94.6 -0.05 0.14 2005-05-01 5.72
95.5 -0.30 0.06 2005-06-01 5.58
95.5 -0.06 0.01 2005-07-01 5.70
94.8 -0.23 -0.02 2005-08-01 5.82
97.5 0.06 0.13 2005-09-01 5.77
95.8 -0.38 0.01 2005-10-01 6.07
97.1 0.12 0.01 2005-11-01 6.33
97.4 0.24 -0.01 2005-12-01 6.27
101.5 0.58 0.31 2006-01-01 6.15
95.0 0.04 0.05 2006-02-01 6.25
93.5 -0.20 -0.08 2006-03-01 6.32
93.8 -0.17 -0.08 2006-04-01 6.51
94.5 -0.03 -0.07 2006-05-01 6.60
95.2 -0.23 -0.02 2006-06-01 6.68
94.8 -0.11 -0.02 2006-07-01 6.76
93.8 -0.33 -0.19 2006-08-01 6.52
94.7 -0.27 -0.06 2006-09-01 6.40
93.0 -0.85 -0.17 2006-10-01 6.36
93.6 -0.14 -0.14 2006-11-01 6.24
95.7 0.22 -0.16 2006-12-01 6.14
97.6 0.38 0.07 2007-01-01 6.22
92.9 -0.15 -0.08 2007-02-01 6.29
91.5 -0.37 -0.18 2007-03-01 6.16
95.5 0.07 0.04 2007-04-01
95.5 0.17 0.00 2007-05-01
95.5 0.08 0.00 2007-06-01
95.5 0.25 0.03 2007-07-01
97.4 0.38 0.00 2007-08-01
96.5 0.08 0.03 2007-09-01
97.0 -0.06 0.00 2007-10-01
97.4 0.45 0.00 2007-11-01
101.5 1.00 0.00 2007-12-01
Adjusted 10 mon roc 24 mon roc 30 year mortgages

www.financialsense.com/editorials/fekete/2007/0111.html and 0115.html
I can't see that MY post had any complicated econom-ese or legal-ese in it. It seems quite straightforward to me.

Real Bills: Goldilox sells something to Joe, and grants him 90 days to pay. After delivering the merchandise, Goldilox draws up a bill for the merchandise, and Joe signs it thereby binding himself to pay up in full, in 90 days.

If Goldilox needs money now, he can - at his option - go to a bank and discount the bill. Goldilox countersigns the bill and hands it to the bank. The bank buys the note from him, discounting the 90 days of interest.

The bank had nothing to do with the creation of the bill. The bank WANTS the bill and BUYS it, because that is the safest way of investing otherwise idle funds for 90 days: the bill guarantees ownership of the merchandise sold, plus it is guaranteed with Goldilox's net worth and Joe's net worth. Non payment would entitle the bank to put Joe's business or Goldilox's business, or both, under the hammer unless payment is forthcoming within 48 hours maxismum.

That's the way it WAS. No longer is.

For a wider understanding, go to Antal Fekete's seminal work on the highly misunderstood Real Bills; the Misesians who believe that Von MIses was superhuman and beyond all possibility of error, are pissed off by Fekete's views which dare to point out where the venerable Mises erred.

No question, Mises was a great thinker, but - not above error in some points.

All of Fekete's reasoning falls on deaf ears in the case of Sir Flow5, who qualifies it all as: "tripe".

Invective is not an answer.

See link, for Fekete's own words, in two articles.

SIERRA

(1)March's legal reserve figure is 91.5. Both rates of change for this figure are disinflationary. Last year it took 5 months of declining roc's to turn the tide. There are both short & long run monetary policy impacts.
(2)As long as the volume of reserves remains below 95, inflation should subside.
(3)The Euro turned up as soon as the Federal Reserve initiated an easy money policy (10/2002), i.e., rates of change in the volume of legal reserves accelerated.
(4)Gold took off about 1/2001 when long term monetary flows took off.
(5)Reserves dived from 1/2007 to 2/2007. The absolute drop was surgically sharp and the peak-to-trough rate-of-change vaulted. Naturally the markets then collapsed.

As previously stated, the level of reservable liabilities is declining. The multiplier is increasing faster. Thus the link between reserves & bank credit is becoming weaker.

As I see it:

1. Mises held that Real Bills were additions to the money supply and therefore, inflationary.

2. Fekete says they were not inflationary in any way. The bills provided a clearing mechanism for the market, which could not possibly be provided by GOLD coin exclusively.

A 100% gold economy is not possible UNLESS complemented by Real Bills, according to Fekete.

******

Since we are in no danger at all, of going to a 100% gold economy, the problem of Real Bills is quite hypothetical at present.

My opinion: no amount of research and theorizing, is going to bring back what once WAS. We - the world - are going to have to go through our own experiences and slowly and painfully work out for ourselves, a system of social collaboration in the peaceful division labor. And when we have done that - Wala! (Voila!) we will be using gold as money complemented with Real Bills.

And not one in a million will know that this already existed, long, long ago!

SIERRA

@ Sierra Madre,

"That's the way it WAS. No longer is."

So why not tell me the way it now is, instead of recommending I check out volumes of work by von Mises and Fetake to wade through in my "spare time".

"Real bills" as you call them, are then just promissory notes. Why not call them that?

All I am asking is that you guys summarize your statements in layman's terms for those of us who do not have an advanced degree in ECON.

Most of what I have read today is "interesting", but is always followed by the thought "and this means what?"

You read: http://en.wikipedia.org/wiki/Real_bills_doctrine
(described therein as the consensus)
MODERN MONEY MECHANICS:
It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their "deposit receipts" whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.
Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time. Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was presented for payment

The EURO-DOLLAR MARKET:
the E-D bankers discovered that the E-D deposits they created for borrowers often did not result in any diminution of their U.S. dollar balances � the System was merely shifting balances within itself. That is, drafts drawn on E-D banks increasingly were deposited in other E-D banks. Thus was laid the economic basis of an international system of "prudential" reserve banking � the discovery that the amount of actual U.S. dollar reserves required to support the E-D loans made � and E-D deposits (money) created.

Currency School: If the issuance of notes, and the acceptance of deposits, were kept separate, and the notes issued were limited to the amount of gold held by the issuing bank (100-per cent gold reserve), the deposit phase as well as the note-isssuing phase of banking functions would be self-regulatory.
Banking School: Tooke - (1) borrowing by merchants from the banks resulted in an increase in deposit accounts; (2)the increase in deposits was followed by an increase in check payments and in total money demand; (3) the increase in payments caused prices to rise at all levels; and (4) in order to cope with the higher prices, the public had to increase its holdings of bank notes.
See Thomas Tooke, An Inquiry into the Currency Principle, the Connexion of the Currency with Prices, and the Expediency of a Separation of Issue from Banking (London, 1844). This is probably one the eariest recognitions of the credit creating functions of commercial banks. It was imperfectly understood by Tooke, as indeed it is by most people today.

This is not an Economics page, I goofed!

It is a GOLD page.

Sorry about that. Now, "What does it all mean?".

"Buy gold in May and go away. In fact, buy in January, February, March, April, June, July, August, September, October, November and December. And go away."

That's my investment advice, no charge.

SIERRA

EUR/USD
(1) http://www.dailyfx.com/charts/Chart.html?symbol=EUR/USD
Trade Weighted Exchange Index: Broad
(2) http://research.stlouisfed.org/fred2/series/TWEXBMTH?&cid=15
Trade Weighted Exchange Index: Major Currencies
(3)http://research.stlouisfed.org/fred2/series/TWEXMMTH?&cid=15
Trade Weighted Exchange Index: Other Important Trading Partners
(4)http://research.stlouisfed.org/fred2/series/TWEXOMTH?&cid=15

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

April 17 (Reuters) -- Gold futures ended $2 lower on Tuesday, ignoring a weak dollar, as falling energy prices prompted jittery investors to lock in profits as prices were within sight of the psychological $700 level.

Most-active gold futures for June delivery on the COMEX division of the New York Mercantile Exchange were down $2.00 at $692.50, traded in a tight $5 band from $690.20 to $695.50.

Joseph Guzzardi at Sabin Commodities said that he was surprised that gold fell given that the dollar dropped against the euro. Guzzardi, however, said that gold was able to stage a nice rally and came back in the previous session.

Guzzardi said that trading was quiet and prices seemed to be stuck in a range between $693 and $695.50. He expected the contract to retest $695 in the short run.

One New York precious metals dealer said that spot gold prices had broken above resistance levels on Monday. "The market is still long. We are still anticipating $700," the dealer said.

Meanwhile, two government reports showed that U.S. core inflation dipped in March and groundbreaking for new homes rose slightly as the economy demonstrated anew an ability to keep growing without generating surging prices.

The Labor Department said that monthly core prices, which exclude food and energy, were up only 0.1 percent after larger gains of 0.2 percent in February and 0.3 percent in January.

The dollar fell to a two-year low against the euro. The euro was trading up at $1.3568 after touching a two-year high of $1.3595, less than 1 cent below a record high of $1.3670.

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

I guess that FED would need a crash like stock market event in order to start cutting the interest rates. Rate cuts may be badly needed due to interest sensitive contracts such as mortgages gone wrong. As Sierra Madre has observed, according to bankers' logic, gold has to fall in tandem with the stock market so that masses would not think of escaping into the safety of gold. My speculation is that, currently, falling heights of gold and stock markets are now being adjusted. To illustrate this with a numerical example, if they want gold to fall, say, $100 during the stock market event (so as to frighten the unsuspecting souls) and if they do not want gold to fall below, say, $650, they first drive it to $750. Pure speculation on my part...

@ Flow5 and Sierra Madre,

I'm not complaining that you post that info, just trying to figure out what it means, as I haven't clue what you're talking about.

What made gold stay put while the dollar jumped without a parachute today?

+ / - $24

Forbes.com
Business News Bulletin
U.S. CPI Tame At Core
Jennifer Lee, 04.17.07, 10:20 AM ET

Wall Street was slumping toward the open, but better than expected economic news may give trading a spark.

Americans paid more for gasoline and other energy-related items last month--but no surprises for the Consumer Price Index, which rose an expected 0.6%. However, the core index came in lower than expected, at just 0.1%. The results show inflation is still a concern, but it's not quite high enough for a rate hike.

A declining rate of change in the core CPI put domestic pressure on U.S. dollar price of gold. And the foreign exchange value of the dollar is falling because foreigners have become sated with dollar investments, and the U.S. is losing its safe haven luster.

Gold is above 690 in London at 1:10 PST.

See INO chart at the top of the page.

http://www.youtube.com/watch?v=AeHAR5Sc1No

Now more than ever with all the hype of stocks....do not be fooled!!

GET YOUR GOLD!!

http://www.sia.com/research/other/NYSEFirmsTotals.xls

http://www.thesanitycheck.com/

Just some ideas for your information!

How do I explain the price of gold falling at the same time the exchange value of the dollar was falling yesterday?
The consensus forecast for the CPI (less food & energy) was .2-per cent; but the CPI index for all items less food and energy advanced 0.1 percent in March, following a 0.2 percent rise in February.
The surprising decline in inflation, and inflation expectations is a "double edged sword". At the same time the "average change in prices of goods and services purchased by households" declines, the domestic U.S. dollar price of gold declines.
And declining inflation expectations, change the outlook for future interest rate differentials, and create expectations of further declines in the exchange value of the dollar.

Can the Gold/Dollar Relationship Decouple?

No. What is happening is the manipulation of the POG through intervention. But even these efforts are losing their grip on the POG. The POG in April �01 was under $300, now it is almost $700. Clearly, the "powers" are fighting the advance of the POG, but they are losing.

Remember, the driving force is NOT the POG, but the devaluation of the dollar. Today's drop in the value of the dollar WILL eventually result in another jump in the POG.

With an eroding manufacturing base, the financial foundation for a strong military is disappearing. Without a strong military, the era of the US dollar hegemony is coming to a close. The only questions are how fall will the dollar fall, and AS A RESULT, how high will the POG rise.

SF

Everytime I now see statistics on inflation, I just want to laugh or cry or just puke. It is to the point you can believe nothing you see these days.

At this point, about the only thing keeping the economy going is the printing press. I say that true inflation for the yaar will end up about 16%. I watch prices on individual items go up by 20% to 30% almost on a daily basis.

I am now stockpiling the basics, things will be getting nasty soon!

http://www.321gold.com/editorials/russo/russo041707.htmlFrankly, we are quite done with attempts at making sense of this age-old madness. It is very old hat, and "is what it is." Until the paradigm shifts, we play the hand as dealt.

http://www.europe2020.org/spip.php?article457⟨=en.

http://www.usagold.com/live.htmlIt's quite interesting to watch Y's reaction to a multi-year high ...I've linked a $PoG-$/Yen comparison via USAGolds new "live" Chart ...but I don't think the settings will stand the journey from back office to centre stage.
The "spread" is quite profound at present and is no doubt influencing $PoG in general here.

With the same tool ie: the "live" chart, you're able to expand the view up to 1000 x 2hr increments ...which gives us a good comparison of Y/$/Gold these past 4 odd months.

Quite the reveal imo!

The line that struck me as most poignant from his article is:

"Nobody cares so long as the majority feels no pain. So long as the global system alongside the majority of its citizenry remains flush with the sensation of wealth, everything else sells itself."

While we are feeling some pain with higher prices everywhere (especially including food and energy!&?#*&%!!!) our culture and society will not truly change its overall course until things are very painful. Cudos to the many who have recognized the coming problems and taken action to protect themselves, but for the most part, our message is not completely sinking in. Nor will it until a much greater degree of financial chaos hits, at which time we will have no option but to accept our lumps. Its like the drunk who refuses to go to rehab until he hits rock-bottom. But how bad will it get before we hit rock-bottom????

People are thirsty. Thirsty for all the human desires and needs.
The mirage is the fake puffery from all the politicians and the
feelings that go with it. Soon this will all seem very surreal
as we sit in the vast wastelands empty of all our recourses
and stand alone in the world that used to be. The only thing
left will be to try to find the next sunny watering hole.

@ ge. I read that article. Everyone else sees that there is a problem but us.

@rimh. It doesn't have to be painful. I have taken a few lumps in this gold arena telling my friends to take a look at USAGOLD forum. We can talk about inflation/taxes etc and all is well till you mention gold. For the early bugs the rise of gold, although slow and steady, has been a cakewalk. No major disruptions. When it passes above the $850 high things are going to change in a heartbeat. We had had plenty of time to react and choose carefully buying the dips and study the market. We will have our hands full for sure with other concerns.
Slingshot----------<>

Dollar

I am not sure I agree with you on the $850 Sir Slingshot. Given the total disconnect by the US herd and the 98% control of the media by the Corporatocracy, I am afraid that they will not know they are up s- -t creek, without a paddle, until it is too late. Credit our malevolent Corporatocracy for doing a great Orwellian job.

As such, like you, my friends all think I am some kinda of wacko for being into gold. However, I only started watching bullion after the Oracle of Omaha purchased silver in 2002. It still took me another three years before I moved.

I am inclined to think it will take some "MAJOR" incident that awakens the herd. It will need to be an incident that transcends the Corporatocracie's hand on the media. What kind, I do not know. Once the herd is a wake, and aggressively seeking bullion, then it is probably the time to start thinking about selling silver, and go to some kind of gold & cash scenario. (What say you on this point?) The key to watch will be how fast the dollar is dropping. If it doesn't stop, then sell silver (at 16 to 1 ratio) and add more to my gold.

Good luck and good returns to you sir.

SF

http://www.usagold.com/live.htmlTo display just the latest 24 hours of gold market action:


click the Time Scale menu item, and select 10 minutes

then, click the chart's #-button, and enter 144 as the time period

Alternatively, you could have selected a 5-minute interval along with 288 data points to reach the 24-hr total of 1440 minutes.


This should help get you started. Ample TA features also extist, and don't forget to use the chart's user-friendly detach/resize feature!

R.

I agree there will need to be a major incident to change the minds of those who perpetually spend more than they earn. As Rimh pointed out, "Feel no Pain" There is no accountance for the deeds. I have a bad feeling about this Sir Silver Fox. For so long we have had too much and abused everything to the limit that we obtain what we don't need. Gold/Silver and cash will be all that is left and I say this because gold/silver will be used to keep us in contact with the (collasped) finacial world and cash will be the median that the general public has ever used. Althought ration books might be a thing in the future. Silver for gold. I would always hold a core of both. I almost made the jump trading silver for gold. But I want something else and silver will do it. To sum it up, Buy and hold gold and use silver to trade for cash or items you want.
Slingshot-----------<>

...has all the hallmarks of a Treadmill at present as PoG once again gets mired in a tight range.
...and it's walking on Eggshells now until the next smackdown it seems.
Both $/Yen and Bond strength would have it lower here if it were not for delivery/ physical off-take imo.

Randy,
Mate, I'm really enjoying the "live" charting tool ...did-ya see the Yen comparison over the last four months? ...scary!
What I'd like to know ...as time permits, is how to cancel and revert back to the basic PoG window without having to shut it and reopen ...TIA.

http://www.usagold.com/amk/newsgroup-form.htmlIs the dollar about to "literally fall off a cliff?" And if so what does it mean for gold?

Why is Gordon Brown being called on the carpet by the British parliament?

Gold at 11-month high!!

Get the news that tells you what's going on in the gold market now. We find it; rate it; comment on it; and deliver it to your e-mail box at no charge.

We welcome you to join our USAGOLD NewsGroup. Growing fast and for good reason.

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http://stockcharts.com/h-sc/ui?s=$gold:$silver&p=D&b=5&g=0&id=0
I'm currently in the "too much Silver is never enough" mindset SF ...and plan, as you do, to divest going down (ratio) however...
...the fact that the Silver Eagle is facestamped $1 and the Gold Eagle is $50 appears to be weighing heavily on the Ratio here.
All the funnymentals would have Ag a lot lower but "decree" seems to be outweighing these facts.

Keeps the blood circulating don't it? ...and much more responsible than Shares, Bonds and whatnot imo.

Truth in advertising! Yeah, that's a joke. Used to be that canned vegetables were 1 pound. Now they weigh 14 to 15 ounces. How about the new and improved. Only thing I say is the increase in price. Seem to be always swindled some way or another. But if you look at the US Silver Eagle it says 1 dollar and the gold eagle 50 dollar I just smile. For once the price is going OUR WAY.
Smile everyone ;0)
Slingshot--------<>

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

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

WEDNESDAY Market Excerpts

April 18 (Reuters) -- U.S. gold futures finished a touch higher in choppy trade on Wednesday, as the dollar dropped to new lows against the euro and sterling and as nervous investors took a breather as prices were within $10 of the psychological $700 level.

The COMEX June contract settled up 80 cents at $693.30, traded in a tight $6 band from $689.00 to $695.40.

Bernard Hunter, director of precious metals marketing at bullion dealer ScotiaMocatta, said that gold was trading sideways after a run-up in the last week and a half, and that it was regrouping ahead of a possible test of resistance later. The June contract has gained more than 7 percent after it hit a low of $643.80 on March 14.

Hunter said that spot gold was stuck in a range beneath resistance of $690 to $691, but physical buying supported prices below $686. "I think, overall, the upward trend is still intact, probably going to be trying $700 some time in the next week or so," he said.

Hunter said there was a growing realization among the physical buyers that bullion would test $700 soon.

"So prices at these levels, while it might be a short-term overbought situation, still probably represents decent value for those who believe that $700 is an inevitability," Hunter said.

The dollar dropped to a 26-year low against sterling and traded near a record low versus the euro on Wednesday as expectations for U.S. interest rate cuts contrasted with prospects for monetary tightening in Europe and Asia.

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

http://www.dailytimes.com.pk/default.asp?page=2007\04\19\story_19-4-2007_pg5_21MUMBAI -- India's central bank appears to have stepped out of the way of a rising rupee, after buying almost $20 billion in four months trying to cap it, and is instead using the currency's strength to help fight inflation.

...Worried about a widening trade deficit and fearing a sudden destabilising reversal of capital inflows, the central bank had kept the rupee in a broad range of 43-47 per dollar for the past three years by intervening whenever it neared those limits.

When the RBI sold rupees for dollars, it added funds to the local banking system - fuel for the rampant credit and money supply growth it was trying to rein in with interest rate rises.

..."Keeping the currency weak exacerbated inflationary pressures so you got a vicious cycle," said Shahab Jalinoos, currency strategist at ABN AMRO in Singapore.

^___(from url)___^

As you'll come to find out, there is a limit to which our Federal Reserve's international CB counterparts are willing to follow the dollar into a black hole of failing purchasing power. Consider, if a dollar can't be counted on to buy a loaf of bread, then it probably won't be a very good reserve asset, either.

The transition to a new international reserve paradigm continues...

R.

http://www.gold-eagle.com/gold_digest_05/taylor041707.htmlsnip:
The good news for you and me is that the longer most Americans remain stupid about money, the more chance those who get it have for acquiring more gold, which will one day-perhaps very soon-rise to levels that even the most ardent gold bugs cannot perceive.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=I hope the scalings on this Futuresource Chart carry as it depicts the Unholy Grail or Bankster Nirvana. Contrary to Stage-2 expectations, since mid-March PoG has re-acquired a limpet-like attachment to the alt Dollar.

It won't last ...it CAN'T last ...do NOT be impressed! It has ALL to do with the scalings.

Dollar

I certainly agree with you on gold & silver Sir Slingshot. But I am heavy in silver and Bob Chapman, Harry Schultz & others feel that during the on coming hyperinflationary period, silver will soon out perform gold. However, during the subsequent deflationary collapse, Bob advises that silver will fall much faster and farther than gold. I plan to ride the "rollercoaster" up and then move a majority of my silver into gold.

But cash is questionable. The competing factions, whether political, business or dark fraternal groups are all vying for control and are certainly out of the press/public eye. China and Russia seem to be playing together in an effort to undermine the dollar hegemony that has been in play for 35+ years. The Illuminati appear to be trying to manipulate the different political groups around the world. The Rothschild's banking group are pushing for a single world's currency, in order to control profits from around the world. And let's not forget all of the various ethnic & religious groups, each with an agenda.

It seems to me that sometimes these groups work together, sometimes they don't. The devaluation of cash now appears now to be a well organized. The media in the US is doing the "masters" bidding by keeping the herd in the dark. Outside of the US, the press is more efficient, but again, most people outside of the US are not terribly concerned with the current events.

But with all of these "groups" are battling each other, the dollar may inadvertently be dropped to the floor, and may end up looling like the post WWI Weimar Mark. If it is, you will not want to remain heavily invested in dollars. Remember: one silver US dollar was worth one trillion German Marks in 1922.

Unfortunately, there isn't enough information available now to predict the out come of the dollar's devaluation. It is one of those things that you have to watch and react when confident that you can accurately assess the upside and downside risk potentials.

Sorry if this sounds kind of paranoid, but I have learned to be leery.

SF

Rule on the side of caution.
Slingshot--------<>

http://www.presstv.ir/detail.aspx?id=5668§ionid=351020108Snip:

"...

The Golden-eyed Woman

In December 2006, archaeologists discovered the world's earliest artificial eyeball in the city's necropolis, thought to have been worn by a female resident of the Burnt City. The artificial eye is a hemisphere with a diameter of just over 2.5 cm (1 inch). It consists of very light material, probably bitumen paste. The surface of the artificial eye is covered with a thin layer of gilding and is engraved with a circle at its center to represent the iris. The eye includes gold lines patterned like the rays of the sun. A hole has been drilled through the eyeball, through which a golden thread is thought to have held the eyeball in place.

Microscopic research has revealed that the eye socket of the female remains bear clear imprints of the golden thread, suggesting that the woman must have worn the eyeball during her lifetime. With her shining golden eye she must have been a striking figure, perhaps a soothsayer or an oracle. The woman with the artificial eye was 1.82 m tall (6 feet), much taller than the average women of her time. She was aged between 25 and 30 and had dark, exotic skin. Her Africanoid cranial structure suggests her origins were the Arabian Peninsula.

Experts say that her skeleton dates to between 2900 and 2800 BC, when the Burnt City was a bustling, wealthy city and trading post at the crossroads of the East and the West. It is thought that the woman may have arrived at the city on a caravan from Arabia. Archeologists have not yet revealed the cause of the woman's death.

..."

Sundeck: Interesting that some people had an eye for gold even in those times...

;-)

http://www.ft.com/cms/s/23bedd7e-edd8-11db-8584-000b5df10621.html...as previously thought. Mmmm, what a surprise that is...

:-)

http://edition.cnn.com/2007/BUSINESS/04/19/indonesia.freeport.reut/...at the vast Grasberg copper/gold mine in West Papua.

:-)

...like a cork in the ocean. Gold and silver mildly hammered and recovering...what will happen when NY opens???

Nail-bighting times for the currency traders...

:-(

http://en.rian.ru/world/20070418/63881878.html"The candidate most likely to become the next French president said Wednesday that he would prefer forging closer relations with the United States rather than Russia."

... First Germany (Merkel), now France (Sarkozy), Europe becoming fully controlled by USA...

Looking at the chart for the past 12 hours it appears that a smakdown around 2:00 am was met with significant buying. The question is whether that was assault attempt #1 with other attempts to follow later this morning. I guess we will know at 10:00 am and / or noon CST since they are the traditional smackdown times.

PA

Looks like it just happened - POG knocked down about $10. I've been wondering how long they'd let it sit up there in the $690 range. Will be interesting to see how soon it tops $700. Do you all think it will take some extraordinary world event to make that happen, or is it inevitable with the normal course that's been occuring in recent weeks?

Everybody jumping on the bandwagon?
I'm reading India and Switzerland are starting up silver ETF's When will there be Palladium and platinum ETF's. Sucking the metal off the market and handing out paper. Wonder what the boyz at the comex think about this?
Slingshot---------<>

I've seen an accurate model that suggests the current price of gold should be c. +714.

I have seen a model that suggests POG should be $10,000+ at this time.

PA

what's the correlation coefficent?

gold & oil moving together today

My POG model says that an ounce would buy a good suit of clothes in 1907, and it still does in 2007.

When an ounce of gold commands $10,000 fiat dollars, a suit of clothes will probably cost $10,000 also.

To buy gold is to forget about dollars. By owning gold, you can forget about dollars sooner than the rest of the world ultimately will.

Buy an ounce today for $700 and you have preserved your ability (your wealth) to buy what you need in the future. Today a loaf of bread costs around 1/280 of an ounce. In the future when a single loaf costs $700 your ounce will still be worth 280 loaves.

Don't over-think this. It is absurdly simple. Own gold. Be happy.

Best wishes
- Survivor

$10,000+ POG would be the extrapolated, estimated value of physical gold today had market forces been allowed to continue in their original direction and under their own volition in the 1970's / 80's. Instead paper futures contracts were immediately introduced when POG began to compromise the dollar's perceived ability to simultaneously serve as both an international banking reserve AND a store of value. Said futures were sold in untold amounts via forced hedging by miners and / or naked short selling by the money center banks to manage the "gold problem."

Stating that gold should be $650, $700, $714 or any other arbitrary number given the reality of where it would otherwise be today absent above-cited interbention is analogous to arranging deck chairs on the Titanic. Such models are relevant only to those in the paper gold world, IMO. The fundamental tennant behind the free gold concept is that the paper and physical gold worlds will inevitabley diverge and, as history has shown in every instance prior, physical gold will be the only one of the two to have retained its value.

PA

@ Survivor,

Well put. I think the suit analogy goes all the way back to Roman togas.

I wonder if Belucci paid an ounce for his Animal House "Toga, toga, toga!"

http://www.safehaven.com/article-5205.htmBut what about "John Law's" comment (see link) regarding precious metals becoming a "Nash equilibrium" wherein "an ideal financial strategy for everyone on Earth is to buy as much gold and silver as they can, as soon as possible."

Given the miniscule supply of these metals relative to a world population of 6.5 billion, how could they not zoom to unheard of prices and stay there?

Conditions like the Nash Equalibrium tend to be transient and temporary. There could also be a temporary condition where all your gold won't buy a tank of gas or a loaf of bread simply because none is available. At the same time, there could be a brief window when a small portion of your stash might buy that property you've coveted for years.

These are extreme situations, and one or another *could* happen at some point in the future. There is no way to predict them with certainty.

But, with or without these anomalies, your gold *will* serve as a store for tomorrow of the wealth you have today. Gold has served in this role for thousands of years and there is little reason to think it will change anytime soon.

Even if gold goes down in terms of fiat currency, do not worry because this means the fiat has greater viability to meet your immediate needs (AKA: fiat currency deflation).

I really enjoy the thoughts and intellectual jousting on this board, but where your own personal wealth is concerned, it is good to remember that this is all founded in some pretty basic principles.

- Survivor

I have seen Another model at these pages; which divide M3 money supply, $11.5 trillion; by gold reserves, 262 million ounces to arrive at $44,000/troy ounce.

Since M3 money supply series is discontinued, I used the stats supplied by;
http://nowandfutures.com/key_stats.html

For gold reserves the following site was referred:
http://www.fms.treas.gov/gold/current.html

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

April 19 (MarketWatch) -- Gold futures dropped $5 an ounce Thursday as news of faster-than-expected growth in China in the first quarter triggered worries that the government will have to take measures to slow down its economy. The COMEX June gold contract finished down 0.7% at $688.30 after a low of $682.50.

The metals had "a very negative session in Shanghai, where copper closed limit down," said Edward Meir, analyst at Man Financial, in a note to clients. "Negative sentiment in Shanghai was fueled by talk that the Chinese may once again raise interest rates in light of reports that China's economy grew at a faster-than-forecast 11.1% pace in the first quarter of this year," Meir said.

In Asia overnight, stocks fell sharply Thursday, led lower by China's Shanghai Composite Index, which shed 4.5% on renewed concerns that rapid growth may lead to higher interest rates.

A nearly 9% decline of the Shanghai index triggered a global markets sell-off in late February, which affected a number of asset classes, including metals. Most markets have since recovered from that sell-off.

European stocks also fell Thursday, following the declines in Asia, and U.S. stocks were headed for losses on Wall Street. Against this backdrop, the price of gold has climbed more than 150% since early 2001, so it's not surprising that many financial advisers and money managers are adding the yellow metal to their clients' portfolios. But whether that's also the right move for you depends on your taste for adventure.

John Person, president of National Futures Advisory Service, believes the current weakness in gold is a "strong" buying opportunity.

"The most important factor that may be the catalyst to push gold higher next week will be the Fed's Beige book report -- this may show stronger business conditions throughout most of the feds reportable districts," he said in e-mailed comments.

"That combined with good earning news and positive guidance from the majority of corporations during earnings season so far just might give gold bulls reason to not only hang on. Gold could spike sharply higher on evidence of continued strength in the economy from next week's reports and when you combine the fact that global stock prices are at or near multi and all time highs, it certainly will give good reason for inflation watchers to add gold to their portfolios," he explained.

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

http://www.321gold.com/editorials/russo/russo041707.htmlThe most recent time that the dollar index touched the 80 level was about December 2004 (see link). Over the following year the index recovered strongly to about 90 at the end of 2005. This merely means that the dollar itself was stronger against the euro and the yen, in particular.

Interestingly, gold in US dollars did not decline during this recovery period. Instead,it was during this recovery phase that gold rocketed higher IN ALL CURRENCIES. This link:

http://fx.sauder.ubc.ca/cgi/fxplot?b=XAU&c=AUD&rd=*&fd=1&fm=1&fy=2000&ld=31&lm=12&ly=2007&y=daily&q=volume&f=png&a=lin&m=0&x=

shows this rapid rise in Australian dollars, but you can play around with other currencies and see the similarities.

What evoked the rapid upsurge in price of gold, in all currencies, during the dollar index's "recovery" from its impending swoon below 80 at the end of 2004?

It certainly looks as though there was a globally concerted weakening of all other currencies at that time, permitting the index to climb away from 80 to around the 90-level... countries deliberately weakening their currencies to preserve trade competitiveness etc., or perhaps just to "preserve appearances" for the dollar.

What will happen this time? Given that the US trade and fiscal positions have only gotten worse in recent years, will there again be a weakening of global currencies to preserve appearances; or will the global community let the index slide below 80...?

And what will gold do this time around?

:-)

http://www.financialsense.com/fsu/editorials/willie/2007/0419.html
"The challenge for the Dept of Treasury and US Federal Reserve is that in order to defend the USDollar, they must keep numerous fingers well placed in the dikes for the gold market, the oil market, the housing & mortgage market, the China trade war, the hedge fund mushroom, the credit derivative market, and the foreign central bank revolt. The USTreasury market is surrounded by several bands of hostile barbarians."

Dikes? Yikes!

Gold? Bold!

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=0C2022BF-17A4-1130-F5AD664C5BBC4A7B...going gang-busters at 11% growth...

Where will it all end?

:-(

...will be decided in the next few hours whilst you (guys) sleep.
A softer Y/$ and softer e-bond could do wonders for our pets, otoh firmer issues will wreak havoc.

Let's watch!

Greetings....

Is it really that bad the USD is falling?

Won't this ultimately be good for all gold holders?

Making US goods cheaper for the rest of the world is good right?

Imagine a fabiolus resort is being sold for 200 million. This is chump change

to those billionaires holding Euros/Pounds or any other currency RIGHT?

The real-estate market plummets making it even more attractive for foreign investors

to swoop up deals. The real wealth is obviously not here in this country and if it is it's

moving OUT! That's right. It's my understanding that many companies including Halliburton, Trump enterprises and

others have moved to a place of real wealth. The UAE (United Arab Emirates).

So let the dollar fall......

See ya in the Middel East!

GF

http://www.fms.treas.gov/gold/current.htmlI thought that no one really knew how much gold the Feds are still holding onto. Rumors that Fort Knox is empty and all that. But the linked site which was posted in a message here yesterday looks like the gov't is actually pretty transparent about what it has. Is this to be believed or do you all think they're loose in their reporting here?

http://www.usagold.com/live.htmlYour question strikes at the very heart of a sometimes hotly contested debate among outsiders, onlookers, and (understandably, to a very-much lesser extent) "insiders".

At the risk of alienating myself from all of those who have staked out hard fought-for territory on either of the two sides of this battleline, it would be my pleasure to share with you my own conclusion following approximately 15 years of critical analysis of the issue.

Alas, the answer is at once elegant and obvious and accessible to even the dimmest of laymen, and as such it is met with objections by those aforementioned combatants who might rather carve out a livelihood selling arcane newsletters to either incite or further befuddle their superficially-inquisitive audiences.

So here it is, and I make no apologies that such a profound truth is elegant in its simplicity. The truth is that the actual veracity of the static or shifting numbers on the Treasury's gold page which you've pointed to matters not a whit as compared to the singular importance of Another evolutionary number -- the spot gold price (such as featured on the page URL I've provided above).

That is to say (slightly reframed), the importance of a spot price as the legitimate basis upon which physical transaction/delivery is successfully had in the marketplace will ever and always, at any given moment, trump the perceived importance of the Treasury-reported figures (regardless of their actual fact or fiction or degree of transparency).

Add to this little truism the additional, widely-accepted truism among central bankers, that gold reserves can be counted upon to perform more reliably than any given foreign bond, and you are now basically in possession of the fundamentals you need to know to increase your wealth in conjunction with the gold market.

Cheers!

R.

"Actions speak louder than words."

Or, more poetically: "The proof of the pudding is in the eating."

i.e., 'The test of national/currency worthiness is in the transaction' >>> it either works or it doesn't, and all else (Gov't statistics included) is subtext.

Amen.

R.

http://www.usagold.com/live.html...is playing PoG like a Violin at present, Bond at unch is out of it and buck was never IN it ...won't be now 'till June-01.
So is the way of PaperGold "these days".

Go watch at the "live" link.