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USAGOLD 24-Hour Live News Wire Staff favorites www.usagold.com --WORTH READING-- What the pros say: Gold still going to $2,000 (Oct 14) Printing money = high commodities prices (Oct 14) Barron's: Golden opportunity (Oct 13) Gold will thrive on dollar flight (Oct 13) Banking on gold (Oct 8) US Mint halts some American Eagle coin production (Oct 7) [VIDEO] Gold (metal) prices may spike if/when COMEX paper fails (Oct 6) Royal Canadian Mint under 'strain' to meet demand for gold (Oct 3) Central banks favor gold as crisis unfolds (Oct 2) As crisis grows, investors look to gold (Oct 2) Wealthy investors hoard bullion (Sept 30) NEW in the last 5 minutes www.usagold.com --LIVE NEWS-- Fed shows slowed consumer spending and manufacturing 21:37 Kansas City Star, Ohio 5 to 10 minutes old www.usagold.com --LIVE NEWS-- TABLE-Bangladesh key economic indicators - Oct 16 21:34 Reuters - Business Indian rupee seen weakening on steep stock falls 21:34 Reuters - Business TABLE - Pakistan economic indicators - Oct 16 21:34 Reuters - Business Rupee seen weakening on steep stock falls 21:34 Reuters - Business South Korean won falls to 3-day low of 13.1485 against Japanese yen 21:31 Nasdaq - Global Markets New Zealand Dollar Recovers From Multi-day Lows Against Most Majors 21:31 Nasdaq - Global Markets South Korean won falls to 3-day low against Japanese yen 21:31 Nasdaq - Global Markets 10 to 15 minutes old www.usagold.com --LIVE NEWS-- Asian markets plunge on economic woes 21:29 The Age Markets tumble as recession fears trump bailout 21:25 Expressbuzz.com - Business 15 to 30 minutes old www.usagold.com --LIVE NEWS-- China's Stocks Drop to 22-Month Low; Jiangxi Copper, Citic, Air China Fall 21:22 Bloomberg - Market Yen Pares Early Gains Against Majors 21:18 Nasdaq - Global Markets Economy Takes Center Stage For McCain, Obama In Final Debate 21:18 Nasdaq - Global Markets POLL-NZ inflation seen at 18-yr high in 21:18 MoneyAM UPDATE 1-Gold dips despite slumping 21:18 MoneyAM Global economic confidence plunges 21:16 The Age Dollar down 4c to US66c 21:14 News.com.au - Business - Breaking News As Consumers Keep Wallets Shut, Economic Outlook Dims 21:14 Atlanta Journal-Constitution, Georgia - Business 30 minutes to 1 hour old www.usagold.com --LIVE NEWS-- ECB paves way to ‘reboot plumbing’ 21:10 FT.com - Economy POLL-NZ inflation seen at 18-yr high in Q3, but rates to fall 21:09 AFX News UPDATE 1-Gold dips despite slumping equities, oil weighs 21:09 Reuters - Business Economic Recovery Unlikely This Year, Fed's Kohn Says 21:05 Nasdaq - Global Markets US Treasury Calls Time On Executive Tax Perks Under Bailout Package 21:05 Tax-News.com Gold dips despite slumping equities, oil weighs 21:05 The Times of India - International Business Gold Falls First Day in Three as Investors Seek Out Cash Amid Turmoil 21:04 Bloomberg - Market U.S. stocks plunge as data point to recession 21:01 The Toledo Blade, Ohio - Business Recession fears return to the fore 21:00 China Daily - BizChina Japan's Bonds Are Little Changed as Recession Concerns Weigh on Equities 21:00 Bloomberg - Market Nikkei slides over 8 pct as economic gloom grows 20:52 Manorama online - Business Bernanke says credit crisis menacing U.S. economy 20:52 Manorama online - Business Nikkei slides over 10 pct, recession worry grows 20:52 Manorama online - Business U.S. must brace for long, deep recession 20:50 Tucson Citizen, Arizona - Business US Treasury Calls Time On Executive Tax Perks Under Bailout Package, 20:48 Lowtax.net Dollar drops to lower 99 yen in Tokyo 20:44 People's Daily - Business UPDATE 1-Base metals sink as Fed warns economy threatened 20:43 Reuters - Business 1 to 2 hours old www.usagold.com --LIVE NEWS-- Bernanke: Quick economic rebound not in cards 20:39 Herald-Sun, North Carolina - Business Fed: Economy sinks deeper into rut 20:39 Herald-Sun, North Carolina - Business US confronts possibility of long, deep recession 20:39 Herald-Sun, North Carolina - Business Reports showing recession on the way sink Dow; Silicon Valley would feel pinch of downturn 20:37 Mercury News, California - Business Recession fears hit global markets 20:37 The Bulletin - Money News Kiwi ironman champ takes on Coolangatta Gold 20:37 TV3 - Latest News Slowed economy could hurt auto racing 20:34 Daily Press, Virginia - Business Rory Robertson a lone voice on why inflation is not the issue 20:33 Crikey - Business US exports of economic gloom reaching record levels 20:33 Crikey - Business Gerry Harvey becomes a key adviser on economic policy 20:33 Crikey - Business Ethics must also apply to economy, West told 20:33 Dawn Pakistan, China sign 12 agreements, protocols: Beijing offers to boost economic cooperation, supports Islamabad’s efforts to safeguard sovereignty 20:33 Dawn Economic Data Preview: Swiss Retail Sales, ZEW Survey 20:31 Daily FX Bernanke says credit crisis menacing U.S. economy 20:31 Yahoo! 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USAGOLD Analysis & Commentary

The Big Bailout of 2008
The chickens come home to roost [Addendum]

Six Situations to Monitor for the Rest of 2008
A focus on what matters most to investors and gold owners

Annual Survey of Investments
Gold up 43% -- outshines Wall St.

An Historic Year for Gold
June 2007 - May 2008

Seasonal Gold Price Trends
Summer bargain hunting made simple

Has Europe declared war on the weak dollar?
Collateral damage for gold?

Golden Gut Check
Why gold is likely to keep moving higher over the long term

As gold crosses $1000...
A comment on gold as savings

Will Gold Catch Up With Crude Prices?
In the time ahead, gold will not only have to rise, it will have to rise faster than oil

7 Steps to Become a Happy 1st-time Gold Investor
How to make the right decisions
Gold Forecast for 2008
Kosares aims at fourth-straight annual success

Gold Price Relativity
What gold owners can learn from the stock bull market of the 1990s

Top 25 Quotes on the Credit Crisis of 2007
USAGOLD Market Update 8/27/07

Disturbing Trends 2007 Update
The Dollar Under Siege - Special Commentary

The Coming Dollar Devaluation
What it means to you as a gold owner

Gold Market Volatility
Has it changed the reasons for physical gold ownership?

USAGOLD PressRoom -- Article Archive

The Daily Gold Market Report

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A USAGOLD Market Update
The Big Bailout of 2008
The chickens come home to roost... [an Addendum]

USAGOLD VideoBrief [video]

-- featuring --
Pete Grant & Jonathan Kosares
Discussion Topics -- Oct. 3rd, 2008
The Financial Bailout & Gold Shortages

The Morning Gold Report by Peter A. Grant
Unlimited Money
Oct 13 a.m. (USAGOLD) -- The G7 met over the weekend with the hope of re-instilling confidence in global financial markets. The communiqué was the standard "we're prepared to do whatever is necessary" message. Of course no details were provided, but what is abundantly clear at this point is that they're prepared to throw as much money at the crisis as they possibly can.

The limits on dollar swap lines have been completely abandoned. According to this morning's press release, "swap lines between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures." (Emphasis added).

These latest measures come on the heels of last week's announcement by the ECB that they would provide unlimited euro funds to financial institutions. This morning there is also a Eurozone bank rescue package on the table that will be in excess of €1,400 bln.

The UK has already announced a £500 billion bailout of their banking sector. The plan includes provisions for the government to make direct investments in RBS, HBOS and Lloyds.

Unlimited dollars. Unlimited euros. All but unlimited sterling. We are talking about a global re-inflation on a massive scale. I think everyone would agree that stabilizing the current situation is of paramount importance, but we also must consider the longer-term implications of these actions.

After all, loose credit and expansionary monetary policy here in the US are arguably the root cause of the crisis. I'm not sure how reducing interest rates further and pumping massive amounts of liquidity into the system are going to do anything other than potentially forestall the day of reckoning. Of course the risk is that the delayed reckoning is even more cataclysmic than the one we are faced with now.

With all this newfound money sloshing around the system it's hard to imagine how we'll be able to avoid significant inflation. While the G7 is at least attempting a 'we're all in this together' tone, things could easily deteriorate into a competitive currency devaluation as countries scramble to mitigate the effects of the global recession that seems to be at hand.

We've recently seen gold set new all-time highs against euro and sterling. Gold nearly set a new record high against the Swiss franc. Given ongoing strong demand for physical gold and incredibly tight supplies, one has to wonder how long the dollar gold charade can be maintained.

Government intervention to prop up the global banking system comes at a price. Arguably the systemic risks remain, but there are increasing growth and price risks. Push on a balloon at one point and it bulges at another.

I'd like to think that the central banks are simply attempting to provide themselves some breathing room with the intention of finding a long-term solution for this crisis. Once the immediate storm has passed, that all of this liquidity will be systematically drained as market conditions provide the opportunity.

Of course, monetary discipline is one thing that has been sorely lacking over the past decade. Hence the predicament we find ourselves in today. I don't think newfound discipline is something that can be counted on. Therefore physical gold will remain the best choice for wealth preservation.

Gold Market Movers:

Germany unveils €500bn rescue plan

Spain provides up to €100bn of bank guarantees

UK launches £37bn bank rescue

Gold will thrive on dollar flight

Fannie, Freddie to buy $40 billion a month of troubled assets

Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. Centennial Precious Metals, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD - Centennial Precious Metals does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.

Afternoon Report
Gold consolidates, moves higher after-hours as stocks plunge

The COMEX December gold futures contract closed down 50¢ Wednesday at $839, trading between $833.10 and $859.20

October 15, p.m. excerpts:
(from DowJones) --
Gold finished steady but was the only base or precious metal to avoid a sell-off Wednesday, with flight-to-safety buying returning to gold as equities continue to give back some of their early-week gains, traders and analysts said. December gold dipped 50 cents to $839 an ounce on the Comex division of the New York Mercantile Exchange. It was several dollars higher going into the last quarter of an hour before a late blip lower. This was likely no more than some liquidation just ahead of the close, said one dealer. Trading conditions were "very illiquid" at the time, he added. Otherwise, he and others cited safe-haven buying as stocks fell. In fact, gold has ticked higher again in after-hours screen trading and was up $3.60 to $843.10 at 1:55 p.m. EDT. Other precious metals with greater industrial applications all tumbled on worries about demand prospects in a softening economy, analysts said. The moves occurred with the Dow industrials down more than 450 points as of the gold close. [The Dow industrials ended the day down 733.] "Gold has been holding its own," said Michael Gross, broker and futures analyst with OptionSellers.com. "It's still getting a lot of flight-to-quality buying. Nervous investors are buying bullion, coins and ETFs (exchange-traded funds), and that's been supporting gold prices."...more
(from Bloomberg) --
UBS metals strategist John Reade said in a report, "Comex traders seem almost sidelined as leveraged investors hoard cash." Total gold [futures] trading on the Comex yesterday was 97,369, compared with 126,405 a week earlier. The Standard & Poor's 500 Index tumbled [...] today [ending down 9%] after surging 12 percent on Oct. 13. "The reality is that the equities rally this week was a Band-Aid rally, and now you're seeing some buying coming back to gold on the wall of worry," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "The underlying problem in the credit markets is going to take a long time to work through." Gold may fare better than other assets as wide price swings in equities and other markets discourage investors, McGhee said. "You've had relative strength in gold," McGhee said. "It's going to be very volatile, very thin trading, very slippery. But if you look, gold is the strongest asset on the board." Gold is little changed this year, while the S&P Index is down 36 percent and the Reuters/Jefferies CRB Index of 19 raw materials has dropped 21 percent. U.S. 10-year Treasuries have returned 3 percent. The price [of silver] has fallen 32 percent this year...more

Gold ... Yearly Chart

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Central banks all but stop lending bullion (FT 10/7)
The one-month gold lease rate rocketed to 2.649 per cent, its highest level since May 2001 and significantly above its five-year average of 0.12 per cent, according to data from the LBMA. Traders said the jump reflects the fact that central banks ­ mostly European ­ have almost completely stopped lending gold in the last few days and are not rolling forward old leases after maturity. This is because of fears that some borrowers might not repay their bullion loans if they are engulfed by the financial crisis. "There is very little appetite for unsecured lending at the moment," said John Reade, a commodities strategist at UBS. Central banks usually do not ask borrowers to post any guarantee ­ or collateral ­ to secure bullion loans. "The key word now is safety," an official from a Europe-based central bank said.

US Mint halts some American Eagle coin production (Reuters 10/7)
"The U.S. Mint has worked diligently to attempt to meet demand, however, blank supplies are very limited and it is necessary for the U.S. Mint to focus remaining bullion production primarily on American Eagle Gold One Ounce and Silver One Ounce Coins," the Mint said. The Mint said it would continue to supply one-ounce American Eagle gold coins and one-ounce American Eagle silver coins on an allocation basis to coin dealers. For half-ounce and quarter-ounce American Eagles, the Mint said that inventory was depleted last week and no more coins would be produced for 2008.

Central banks favor gold as crisis unfolds (Reuters 10/2)
in the fourth year of the latest Central Bank Gold Agreement, which ended on Friday, sales fell well short of this [500t] ceiling, to just over 357 tonnes. With banks worried by the outlook for the financial sector, sales could be even lower in the final year of the pact. "Given the damage done to a lot of other paper assets that were formerly considered secure, there will be greater risk aversion among central banks," said Philip Klapwijk, executive chairman of metals consultancy GFMS. "This will only boost gold's status within central bank reserves." A key reason why central banks want to hold onto gold is the instability of their most common reserve asset, the dollar. The U.S. currency slipped to record lows against the euro earlier this year, and although it has since taken on a firmer tone, doubts remain over its outlook. "Gold assets have moved up in value in euro terms whereas dollar assets have fallen considerably," Klapwijk said. "There has been a reassessment of gold given developments in last few years. ... There are more and more questions being placed against the U.S. dollar and its role at center of existing international financial system."

Gold, manipulation and domination (Asia Times 10/2)
All over the world, trade in gold had been the favored device for evading national foreign exchange controls from the end of World War II to 1971. In 1946, the Bretton Woods regime adopted in 1944 became operational, thereby forbidding the importation of gold for private speculative purposes...

Wealthy investor hoard bullion (FT 9/30)
Investors in gold are demanding "unprecedented" amounts of bullion bars and coins and moving them into their own vaults as fears about the health of the global financial system deepen. Industry executives and bankers at the London Bullion Market Association annual meeting said the extent of the move into physical gold was unseen and driven by the very rich. Industry executives said gold refineries and government mints were working at full throttle to keep up with investor demand, but acknowledged they were suffering from shortages, particularly on coins.

Gold and silver dealer reports an 'unprecedented' shortage of metals (Post 9/28)
...the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies. ''It's absolutely unprecedented," said O'Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.

European central banks cut sales of gold (FT 9/28)
Institutions bound by the Central Bank Gold Agreement -- the banks of the eurozone plus Sweden and Switzerland -- sold about 343 tonnes of gold in the year that expired on Friday, the lowest amount since the first CBGA was signed in 1999. This compares with 475.8 tonnes in the year to the end of September 2007. Under the agreement, the banks are allowed to sell up to 500 tonnes of gold each year.

US Mint suspends Buffalo gold coins after depletion (Reuters 9/25)
"Demand has exceeded supply for American Buffalo 24-karat gold one-ounce bullion coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins," the Mint said in a memorandum to authorized American Buffalo dealers. In mid-August, a shortage of American Eagle one-ounce gold coins due to "unprecedented" demand had also forced the U.S. Mint to temporarily suspend sales of the popular coins. The Mint said Thursday it would continue to supply the American Eagle 22-karat gold one-ounce and American Eagle silver bullion coins on an allocation basis to coin dealers.

USAGOLD VideoBrief [video]

-- featuring --
P. Grant, J. Kosares & G. Cooper
Discussion Topics -- Sept. 16th, 2008
The Financial Crisis & Gold

A USAGOLD Market Update
Six Situations to Monitor for the Rest of 2008
A focus on what matters most to investors and gold owners

USAGOLD VideoBrief [video]
featuring -- Pete Grant, Jonathan Kosares
Discussion Topics -- Sept. 5th, 2008
Is $100 oil relatively cheap or expensive?
Int'l capital flows -- toward yield or safety?

Gold bull market set to resume on strong fundamentals (MktOracle 8/29)
As the precious metals summer doldrums come to a close, we need to assess the damage from another season of gold hatred and disdain. Like déjà vu for veteran gold investors, the mainstream financial media took advantage of gold's seasonal weakness to proclaim the death of the Ancient Metal of Kings. Gold's $190 plunge from mid-July to mid-August saw it knife through a number of key support levels. This caused blood to flow in the streets even for the gold faithful. Doldrums is an understatement for the rotten sentiment witnessed in the latter half of this summer...

Swiss clean out S Africa Krugerrand coin maker (Evening Standard 8/29)
The sole maker of South African Krugerrands today ran out of the iconic bullion coin after an 'unusually large' order from a buyer in Switzerland. An unnamed Swiss buyer ordered a massive 5000 ounces, cleaning out the Rand Refinery's gold stocks. Precious metal bullion is attracting investors as a haven against a sliding dollar and global conflict and has led to shortages. The US Mint has suspended sales of one-ounce American eagle gold coins, and Johnson Matthey has stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery. Heraeus holding has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.

A DAILY ARCHIVE:
Pete Grant reports from CHINA - August 2008

Rocket School of Economics -- Through the Looking Glass?
(Aug 23) -- The financial markets appear to be imploding and we hear that rescue plans and bail outs are the order of the day. But do we know exactly what is the problem? Now the housing debacle needs to be recognized for what it is, a banking debacle having its origins from within the fiat monetary system itself...

USAGOLD RoundTable Discussion [video]
featuring -- P. Grant, J. Kosares & G. Cooper
Discussion Topics -- Aug. 12th, 2008
Gold's price decline; The dollar's rally; What's next?

Hundreds of U.S. banks will fail, warns leading economist (Reuters 8/5)
The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron's this week. Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Mr. Roubini said -- at least US$1-trillion and more likely US$2-trillion. As for the banks that will go bankrupt, they will include community banks that finance homes, stores, downtown areas, commercial real estate and other mainstays of U.S. towns and cities.

Gold and the IMF (Business Line 8/5)
There is already a school of thought that the Reserve Bank of India should deploy a significant part of its reserves in gold as against relying purely on paper securities such as US treasury bonds. In the event of the IMF selling part of its gold holdings in the near future, India should grab such a rare opportunity to offer to buy part of the gold held by it on behalf of the IMF.

Rocket School of Economics -- Compounding to the Downside!
(Aug 2) -- We are currently witnessing the unraveling of the fiat monetary system, the one that began with the formation of the Federal Reserve in 1913 and was enhanced with President Roosevelt's confiscation of the capital of the American people in 1933, when gold ownership was made illegal. President Nixon's closing of the gold window in 1971 further unleashed the fiat system from any remaining constraints...

Sovereign funds cut exposure to weak dollar (FT 7/16)
Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency. One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China's State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings. Behind the scenes, fund officials are questioning the credibility of the Federal Reserve and US Treasury in defending the dollar and maintaining financial stability.

Citigroup says long-term gold price could double or even triple (mineweb 6/30)
Citigroup forecasts that "gold is likely to regain $1,000/oz by end-08 and to work higher through 2009-2010." In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that "longer term, we believe that gold is capable of doubling or tripling from current levels." The analysts said "secular and seasonal factors favor gold" during the second half of this year. "We remain positive on gold, based on macro and supply/demand factors. The forces that have propelled gold for 5 years are firmly in place." Citigroup's analysis also revealed that "gold shares have stalled as investors have flocked to physical bullion [...] The move in gold has been perhaps too sharp for the equities," the analysts said. "During a financial crisis, safe haven demand favors the simplicity of bullion."

Gilded Opinion -- How to invest in commodities... Our lives depend on commodities yet most are too afraid to invest in them. History is dotted with massive bull-markets in commodities, which occurred regularly. In fact, over the past 200 years, we had five major booms in natural resources. The shortest boom I could find lasted 15 years, and the longest one continued for 40 years!

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