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Welcome to the USAGOLD Gold Discussion Archives. Looking to buy gold coins and bullion? The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets. To join the debate request a discussion password here.

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ARCHIVED DISCUSSION FROM 11/18/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

GratefulForGold (11/18/02; 23:47:43MT - usagold.com msg#: 89864)
"Investment Return" and "Saving"

My dear Mr G,

Because you've been so nice to me, my heart warms when I see you post!

Question: How is the purchase/owning of gold classified? Initially, I looked upon it as something to invest in, with an expected "investment return." Now, I tend to look on it more as "saving." Just better than saving in fiat.

I'm not sure I understood your entire post. I do know that I've grown up in the social security era. But I think my generation (maybe I'm too all-inclusive here) has more or less approached it as paying for our elders but not expecting it to be there when we retire. It's been a "write off" in my book. I'm glad to do my part in providing for those who came before me, but don't try to kid me that it'll be there when my time comes.

Do you think our children or grandchildren will "save with a vengeance?" I don't have any children, hence no grandchildren (and therefore no expectation that I will be "taken care of"), but if I did, I would still have trouble fathoming the current or next generations "saving" for anything! IMO we have become an increasingly instant gratification people and the concept of saving or delayed gratification seems to fly in the face of reality. Maybe the most fiscally conservative ones will save, but that is not the norm. And if the economic downtrend continues, it seems to me there won't be anything left to save, even for the frugal!

I am sort of viewing my PM "investment/saving" as a future life-line that I will probably end up throwing to loved ones who didn't pay attention. So, rather than "retirement," I envision ME taking care of THEM!

That sure wreaks havoc with my preconceived notions of enjoying sunsets, somewhere, with someone special! Oh well, life really is what it is, isn't it?

BTW, I like your grandfather's style...especially with the freedom a couple of "clink-clinks" in the pocket offers!


mikal (11/18/02; 23:43:41MT - usagold.com msg#: 89863)
@Mr Gresham
Your grandfather IS a great role model. Like PM investors, standing tall by standing on your own two feet. Claiming your human franchise of health, harmony and happiness means seizing more self-responsibility and self-reliance through self-discovery and self-determination independent from bureaucratic, socialistic and fraudulent paternalizing, bullying and indoctrination. To emulate him is to reject poisonous enticements, disinformational blitzreigs and costly negative-reinforcement that sustains no balance in people, families or societies, but the cruel and rank "pension security" dinosaur.

Mr Gresham (11/18/02; 22:30:45MT - usagold.com msg#: 89862)
Retirement
http://www.chron.com/cs/CDA/story.hts/business/1664247
Good catches today, ElGordo -- especially the second half of the National Century piece this morning, showing all the different bookkeeping scams they pulled. A version of each of these is probably being played out at higher levels.

The crucial one -- can we say mega-Leverage? -- are the retirement calculations that presumed 9% growth, forever, and then some negative years which then require more accelerated catchup rates -- never gonna happen.

Then Amazon puts an offer in the inbox -- "What If Boomers Can't Retire? How to Build Real Security, Not Phantom Wealth ", by Thornton Parker. Hmmmm, I wonder what that's about??? I'll check it out when I'm done.

So the link above, to the Houston Chronicle, shows some real SIMPLE calculations about working and retirement. Roughly that the ratio of retired years to working years implies a savings percentage you just gotta DO. Well, duhhhhh. But -- it beats all those Quicken spreadsheets that got everybody all juiced, and seduced, and then abandoned.

"Suppose we lived in a simple society with no investment returns. Suppose also that we worked until age 65 and then lived in retirement for 12.6 years. That was our life expectancy at age 65 when Social Security was created.

"How much of our income would we have to save?

"Easy. Working for 40 years, we'd have to put aside 24 percent of our income each year, leaving only 76 percent for consumption. At age 65 we'd have 12.6 years of consumption put aside.

"Life expectancies, however, have been increasing. By 2000, expectancy at 65 was 17.6 years. By 2040 it's expected to be 20.6 years.

"Without a return on investment, you'd need to save about 31 percent of income to provide 17.6 years of income. You'd need to save 34 percent to put aside 20.6 years of income."

G: Then he loses it all, sorta, going into the "investment returns" outhouse and falling down the crapper. Why? Well, at least he gives us the option to look at the lower return savings requirements, and they stay at around the 25% mark for the 2% return. (At 7% real return, you only need to save 9% of earnings.)

Why is "investment return" bogus thinking? Well, Social Security and other income transfer programs are schemes to get somebody else (young people) to support you out of their limited earnings. So is investment return, only it's cloaked in the transmission mechanism of profits earned from their (and your) daily spending. If you invest in the right businesses, those young'uns might just give you a little more support than if you pick the wrong ones.

But they're still gonna keep a tight fist on their wallet, because by then, they'll have the shining example right in front of them of their frugal papa, who either (1) saved 25% all his life, and is just getting by in retirement, or (2) saved 10-20% but lost it all in the stock market, or (3) didn't even save 10% and is living in a cardboard box somewhere.

They're going to save with a vengeance, looking for their own "investment return" perhaps, but mostly just to conserve principal. Me, I can't see more than 3% as being a long-term economically-justified "investment return", and that is for WISE investors, not the fleeceable flock we've just been watching.

Getting young people to support you, one way or another, that's what (fiat) retirement's all about.

Another way of looking at it: Saving is what YOU do and what YOU have control over. Investment return is very much under the influence of other people and hardly in your control at all. No wonder 90's America looked at the latter for its final fiat fantasia.

Then there was my Grandfather, who made weekly office calls on his sales clients until he was 83. The city walking was good for him, the socializing with old friends even better, and the pride in earning his way immeasurable. That's my example, though having a few clink-clinks around would be agreeable, in case I want to ease off to two or three days a week.



ElGordo (11/18/02; 19:46:42MT - usagold.com msg#: 89861)
Nikkei chart to 1984
http://finance.yahoo.com/q?s=^N225&d=c&k=c1&a=v&p=s&t=my&l=on&z=m&q=l
How low will it go???

ElGordo (11/18/02; 19:45:17MT - usagold.com msg#: 89860)
Nikkei at 1984 level
Tokyo, Nov. 19 (Bloomberg) -- Japanese stocks fell, driving the Topix index to an 18-year low. UFJ Holdings Inc. and Mizuho Holdings Inc. slid on concern that a government plan this month may set tougher standards for assessing banks' bad loans, leading the nation to seize control of them.

Nippon Telegraph & Telephone Corp. dropped after the country's biggest telephone company reported that fiscal first- half sales declined for the first time in five decades as demand for fixed-line services slid.

``The market is nervous about the government's plan, which may result in the nationalization of banks and lower the value of their shares to zero,'' said Shuichi Hida, who helps manage $1.3 billion of assets at Sanyo Investment Trust Management Co. ``NTT is not considered to be a growth company anymore.''


ElGordo (11/18/02; 19:21:33MT - usagold.com msg#: 89859)
Clash with al qaida in Riyadh
http://www.arabicnews.com/ansub/Daily/Day/021118/2002111816.html
Some 8 Saudi security men were wounded, many of them in critical health conditions on Saturday in Riyadh in a clashes with persons suspected to be supporters for Osama Bin Laden, one of them was wounded and then arrested, according to a source for the Saudi opposition and one eye witness

The spokesman for the Islamic movement for reforms in Saudi Arabia, Saad al-Faqih, an opposition which takes London as a headquarters, said that the clash took place when the Saudi security forces tried to arrest a group of 50 armed "Jihad young men" of al-Qaida partisans who were meeting in a house in al-Shafaa quarters to the south of the capital.

The other members of the group were able to flee and the police is mopping up the quarters to arrest them, according to the spokesman who added that he got his information from citizens.
--------------
European diplomatic sources in Beirut unveiled that the Qatari regime on October 13, night was exposed to a coupe attempt led by several members of the royal family, Islamic organizations and several army officers of Yemeni and Pakistani origins, but the interference of the American forces existed in al-Aides base was able foil this coupe attempt in which some 140 military and civilian men were arrested.

The sources told the Lebanese al-Kifah al-Arabi daily in its yesterday's issue that the attempt involved officials who sympathy with the Islamists in Qatar and that Qatar accuses Saudi Arabia to be behind the failed coupe movement.
_______________
Found these 2 stories at arabic news web site.
Don't know how accurate this source is.


Sundeck (11/18/02; 18:27:53MT - usagold.com msg#: 89858)
UK Boardroom Gloom comments
http://www.timesonline.co.uk/article/0,,5-484619,00.html
Oops - link to the timesonline article

ElGordo (11/18/02; 18:09:34MT - usagold.com msg#: 89857)
S Korea on credit card binge
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APdkczBVCUy4gS29y
Korean consumers, encouraged by fast growth, low interest rates and easily available credit cards, are borrowing beyond their means. Surging defaults are sapping banks' share prices, and investors say they may fuel a consumer-driven version of the 1997 corporate debt crisis that caused Korea's economy to collapse.

``There is legitimate concern because there's been a rather excessive buildup of household debt,'' said Julian Mayo, who helps manage $120 million of Asian assets, including Korean bank shares, at Regent Financial Services Ltd. in Hong Kong. ``This has caused some very big falls in the banking sector.''

South Korean household debt has surged to 73 percent of gross domestic product, surpassing Japan, from about half in 1999. The Bank of Korea says that's among the highest of any major economy except the U.S., where the rate is about 77 percent.

Overdue credit-card debt at 17 Korean banks climbed to 11 percent of total loans in September -- twice the U.S. level -- from 7 percent last December.

`Unprecedented'

``The rise of household debt in Korea is unprecedented by any standards,'' said Andy Xie, Morgan Stanley's chief economist for Asia, in a recent report. ``It's quite troublesome that household debt is rising much faster than GDP.''


Sundeck (11/18/02; 18:08:49MT - usagold.com msg#: 89856)
Gloom in the UK Boardroom too - from The Times Online
Snips:

"
Gloom in the boardroom
by David Smith, the sunday times



ANYBODY looking for a good example of Britain's two-tier economy need look no further than the Bank of England's latest inflation report.
House prices, the Bank's big worry, have risen by between 25% and 30% in the past 12 months. They may be due for a crash, or they may carry on rising strongly for some time yet...."

...

"In some cases funds earmarked for investment projects were diverted to top up company pension schemes."

...

"Private-sector employment now appears to be falling. Figures last week showed overall employment down 36,000 in the July-September quarter, with full-time jobs down by 72,000. The government's broadest measure of unemployment is rising. Only the public sector is recruiting aggressively."

...

"More generally, corporate gloom carries another big danger. Will consumers be made fearful by lay-offs (let alone the risk of a house-price crash) and take fright? Or will they hang on until the global business environment improves? Therein lies the greatest test to the economy over the next year. I am assuming consumers will keep spending. The risk is that they will stop."

Sundeck:

An interesting summary of business sentiment in the Mother Land.

UK business investment down, funds used to top up pension schemes, employment falling, concerns about consumers throwing in the towel...

Sound familiar?

Sundeck




ElGordo (11/18/02; 17:57:10MT - usagold.com msg#: 89855)
Venezuela fighting intensifies
CARACAS, Venezuela (Reuters) - Venezuelan National Guard troops firing tear gas and shotgun pellets skirmished with anti-government demonstrators in Caracas on Monday as the political conflict between leftist President Hugo Chavez and his foes flared into violence.

Four people were wounded by shotgun pellets after the heavily-armed troops riding motorcycles and wearing gas masks swooped on anti-Chavez protesters who were blocking major highways in the east of the capital.

The demonstrators were protesting against what they said was a military crackdown on his opponents by Chavez, a former paratrooper who was elected in 1998 and survived a military coup in April. He is resisting opposition pressure to step down and call an early referendum on his rule in the world's No. 5 oil exporter.

After scattering to avoid the gas, which enveloped the highways and their backed-up lines of cars, the protesters regrouped and briefly set up barricades of burning tires and garbage across streets in eastern Caracas.

Monday's clashes came after similar disturbances over the weekend following the government's decision on Saturday to take control of the Caracas city police from the capital's mayor, Alfredo Pena, an outspoken political foe of the president.

The weekend takeover of the Caracas police, enforced by hundreds of heavily armed troops and armored vehicles, infuriated opposition leaders who said it greatly increased the likelihood that a threatened general strike could be called.

They accused the Venezuelan leader, who staged a botched coup bid in 1992 six years before being elected, of running roughshod over the country's laws and constitution and of using military force to bolster his powers and quell opposition.

"We are protesting against the government's violation of human rights. ... We are creating chaos," one of Monday's protesters, 25-year-old Armando Morante, told Reuters.


R Powell (11/18/02; 17:00:42MT - usagold.com msg#: 89854)
sector
Hard to sell what isn't there, I guess. I have a friend who wanted to order some silver eagle proof coins from the mint but was told, "Sorry, all gone" I refered him to M.K. but don't know if he called.

The president did sign into law the bill authorizing a 10 million ounce purchase of silver to continue the coin program in silver. However, even though the supplier (Sunshine Mint Co.) is now producing the one ounce "rounds" needed to strike coins, I believe the government can't start buying until Jan. 1, 2003.

The silver market is so oblivious to the supply and demand situation that we will probably have to actually use up the last of existing supply before the so-called analysts realize there's none left. ??
Rich


CoBra(too) (11/18/02; 16:51:13MT - usagold.com msg#: 89853)
The Eagle has Landed? ... @ Sector
You don't sa; No Way! The Mint can't have run out of mints or Life Savers. I've always used to pick up a roll with my WSJ stepping off the Subway every morning.

Don't tell me they're not selling these breathalizers anymore. They can't have run out in such a short period of time. It would be ... well almost, come to think of it ... as scandalous as my favorite street vendor on the corner of Broad and Pine would tell me he ran out of hot dogs for the rest of the month. Or, quelle horreur, my favorite downtown barkeep can't stand up to serve a straight Vodka-Martini -sans the twist - and of course the rocks - as some may find that rocks are better off if you can't even see a tarce of 'em in the gold nugget. Not even in the McChicken, Man!

Interestingly - or not - I've tried to buy some eagles over here in old Central Europe ... and only got 30% filled! Buy Philharmonics as the Japanese ... and no shortages, or just a perceived abundance; Please ... yourself, though I want to be diversified in my physical holdings - as I love the Eagle, the Panda, the Maple, the Kruger and even any true and blue ounce of real value. - cb2








TownCrier (11/18/02; 16:21:58MT - usagold.com msg#: 89852)
Comments from the latest WGC gold market overview
http://www.usagold.com/wgc.html
Trading has been reasonably lively, with good two-way interest. The physical market remains supportive, and contained the currency-induced weakness on Friday, when dollar prices tested the $317/ounce level.

[O]ne dealer pointed out this morning (Monday 18th), there is now a regular pattern off "per-weekend insurance buying" which is generally tending to lead to some liquidation at the start of the week.

...reports that the US government could be preparing to mobilise up to a quarter of a million troops...

Merrill Lynch's latest fund manager survey has found that the majority are expecting global nominal GDP growth to be only 3% in the next twelve months, and that most would also prefer to see companies using cash flow to reduce debt rather than increase capital expenditure. Merrill concludes that if the emphasis continues to shift towards cost-cutting and capital expenditure reductions then this could lead to increasing unemployment, reductions in sales and potential deflation.

[However, as noted earlier from his congressional testimony, "Dr. Greenspan ... countered those observers who foresee deflation, with the words "We are not close to a deflationary cliff," and that there is no "meaningful limit" to the Fed's power to inject money into the economy.]

Click url for addtional excerpts of this week's commentary.

R.


sector (11/18/02; 15:54:38MT - usagold.com msg#: 89851)
Zero American Eagle US Mint Sales for November
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2002
Silver Eagles at 75,000 ounces -- 92% below 2001 November levels.

Reported before but very interesting never the less. In 2001 November totaled over 1 million ounces of silver eagle sales.

Either someone has dropped the ball, the supply of metal really IS tight or this is part of a nifty, too-clever and crafty plan to suck buyers in for an ambush in Late December and January.

An ambush where the Treasury fakes being out of metal then floods the market with coins while the COMEX hoods pile on the paper.

Upon further review, I'm not about to ascribe to conspiracy that which can be explained by simple government clerk's punch-the-time clock stupidity.

The idiots at the Mint just ran out.

How I wish I were a fly on Mr. Peter Fischer's wall at Treasury. I can hear him now...

" You did WHAT?!!!", "You ran out of GOLD?!!!", "Say that again ...slowly".

"Do you know how long it TAKES to get new requisitions for physical through the BIS?", " Why it took 8 weeks for a lousy tonne for that bomb throwing radical CEO at Gold Corp, McEwen...less than 2 cubic feet...EIGHT WEEKS!!". Now you are telling me you RAN OUT of GOLD....AND Silver?!!"

" Hello.....[On the phone now]..get me Ridge....Ridge...jeeze.....T-O-M RIDGE"

"Hi Tom,...say, would you mind taking the US Mint guys in with the INS and all the other dopes in the ATF and Coast Guard and DEA and all that?"

"Look at it this way, how can your new "Homeland Security" people manage to bribe illeagal immagrants, druggies and FBI informants unless you have TOTAL control of the money custody?"

"Yeah, Greenspan is on board too...that much more distance for the Treasury away from the Fed.

So...what do you say?",.... "I knew you'd see it my way".

"Oh...one last thing...any room down in Guantanamo for a real special mint guy...I know one who is arm-waving for a warm weather transfer."


Black Blade (11/18/02; 15:32:24MT - usagold.com msg#: 89850)
Smart money is on saving
http://www.boston.com/dailyglobe2/321/business/Smart_money_is_on_saving+.shtml

Snippit:

The stock market collapse that began in March 2000 was like a nuclear explosion: Not only did it do plenty of initial damage, but the fallout is still seeping through the economy, spreading misery wherever it goes. For big American companies with traditional pension plans, the bull market that lasted from 1982 to 2000 was a godsend. Because their investments were growing so rapidly, many companies had to contribute little or nothing to their pension plans for years at a time. ''The market was doing all the heavy lifting for them,'' said Jan Hatzius, senior economist at Goldman Sachs.

According to Hatzius, corporate America this year will contribute about $40 billion to defined benefit plans, the formal name for traditional pensions. Remarkably, that $40 billion is roughly the same amount companies contributed to their pensions in 1979. Over the same stretch, pension benefits - the money paid out each year to retirees - climbed sevenfold. The difference was made up by a stock market that rose at a double-digit clip.

But those days are gone. The stock market has come down and few expect it to return to its old peak anytime soon. Using conservative assumptions, Hatzius estimates that businesses will have to boost their annual pension contributions from $40 billion to $120 billion to meet their obligations to retirees. If he is right, that means corporate America will have $80 billion a year less to spend on everything from giving raises to buying capital equipment.

The bottom line for everyone here is pretty basic and pretty depressing. In the bull market years, no one had to save any money because the market did it for them. Now, both individuals and companies have to reacquire the saving habit. ''There are only two ways to build wealth,'' said Hatzius. ''You can earn returns on your assets or you can contribute fresh savings.'' More saving means less spending. Less spending means a less vibrant economy.


Black Blade: Under funded pension plans are the next scandal to come to light. That will be the story for this next year. It will gain more coverage in light of all the corporate scandals where workers have seen their retirement dreams vaporize (i.e. Enron and WorldCon for example). In the end it really is up to the individual to look out for number one. The feast is over and now comes the famine.



Pizz (11/18/02; 15:25:15MT - usagold.com msg#: 89849)
Cash flow
Just a brief note confirming the real time scramble for cash from overleveraged companies.

The public overleveraged corportions that I deal with on a monthly basis (telecom, finance, insurnace, etc.) and most of private corporations related to our industry, are scrambling for cash like I have never seen in 30 years of business.

I have companies that appear to be holding their books open a few extra days, mailing statements on the 5th that are due on the tenth and have you on cash by the 11th, with no regard for the normal processing of payables that the most creditworthy companies have normally paid by the 25th on a consistant basis (called 30 day open accounts).

I have checks clearing our bank accounts an average of 2 days quicker, with a great many small to medium size companies sending runners to pick up checks and depositing them the same hour or day.

Trying to get a small insurance settlement turns in to a 60 to 90 day marathon for items that were normally paid in 10 days, with minimal red tape.

And the biggest headache has been the administrative staff reductions in nearly all companies. We have fewer and fewer admin people to handle all the problems associated with recessions and cash crunches. There are even some companies that to save a few extra bucks, have layed off their experienced people (who were paid more) leaving inexperienced people to handle recession related problems when they have no experience with recessions (or problems for that matter).

It's been building for over a year, but the problems are getting to the extreme in a lot of areas.

My feeling is something needs to give real quick, and it appears to me like snowballing bankrupsies over the next few months.

Pizz



Kev (11/18/02; 14:44:10MT - usagold.com msg#: 89848)
Gold Dinar: An Economic and Strategic Response to Chaos
http://www.khilafah.com/home/category.php?DocumentID=5556&TagID=2#

Black Blade (11/18/02; 14:31:32MT - usagold.com msg#: 89847)
Companies chisel away at workers' benefits
http://www.usatoday.com/money/workplace/2002-11-17-takeback_x.htm
Snippit:

Employers say the cuts are necessary because of mounting pension expenses, the dismal economy and soaring health care costs. But critics say companies are taking back too much. For the first time in four years, more workers saw their health insurance benefits reduced than increased. Seventeen percent of employees worked for a company that reduced health care benefits in 2002, compared with 7% in 2000, according to a study by the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust. Those who still get coverage are paying more: Premiums jumped 12.7% this year, the largest increase in 12 years. Meanwhile, pay raises — which are averaging less than 4% — haven't been this paltry in nearly a decade. Employers' overall budget for pay raises will drop to a projected 3.8% in 2003 from 4.4% in 2001. Employment experts predict the seesawing of power will have employees emerging from this downturn more skeptical, more demoralized and less loyal to employers than before.

Black Blade: So much for a "second half recovery". The "recovery" fairy tale is getting old when workers are losing benefits and getting laid off. As always, get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.



Black Blade (11/18/02; 13:36:20MT - usagold.com msg#: 89846)
Analysis Finds Tape 'Almost Certainly' Bin Laden
http://www.reuters.com/newsArticle.jhtml;jsessionid=ATNOR5H03KQ5SCRBAEOCFFA?type=topNews&storyID=1761281

Snippit:

WASHINGTON (Reuters) - A U.S. intelligence analysis has concluded that an audio recording broadcast last week was almost certainly the voice of al Qaeda leader Osama bin Laden and the tape was genuine, U.S. officials said on Monday. The audiotape broadcast on the Qatar-based al-Jazeera television channel praised attacks that took place in October, showing the speaker was alive as recently as late last month. It was the hardest evidence that the United States has had since December 2001 that bin Laden was alive. "Our intelligence experts do believe that the tape is genuine. It cannot be stated with 100 percent certainty. It is clear that the tape was made in the last several weeks," White House spokesman Scott McClellan said.


Black Blade: So the hunt is on. Meanwhile al Qaeda appears to be back in business.



TownCrier (11/18/02; 13:04:19MT - usagold.com msg#: 89844)
A word to the wise...
http://finance.canada.com/bin/story?StoryId=CpDxq0d8bmZCWmJa5&FQ
From Saturday's Financial Post (CAN) on the words and deeds of sector notable John Ing, president of broker Maison Placements Canada Inc.

----------
Ing says he doesn't own any of the stocks he recommends to his institutional clients to avoid conflicts of interest.
+
"I prefer to buy gold bullion physically," he says, rather than own the certificates.

-----(article at url)--------

Consider Richard Russell's emphasis on "quiet accumulation" among "knowledgeable investors" before you buy completely into "conflicts of interest" as the only reason driving Ing's decision to buy metal instead of company stock.

Ing knows what time it is.

Time to call Centennial for your insider's piece of the pie. ching ching

R.


GratefulForGold (11/18/02; 13:01:18MT - usagold.com msg#: 89843)
TownCrier #89842 – Gold Accumulation

Randy,

"The public doesn't even know how or where to buy gold coins...."

Dumb question: does USAGOLD advertise in any of the print media that mainstream investors read? I think those of us who are Internet users tend to forget that many top executives and professionals don't use the Internet as we do. (Since I don't read the print media myself, I can't answer this question). But, I sure would recommend a few well-placed ads for the next few months, if it's in the budget. Perhaps doing the Christmas/coin gift theme, if it's not too late.


TownCrier (11/18/02; 12:44:22MT - usagold.com msg#: 89842)
Gold in the accumulation phase
I found these comments from Richard Russell's Dow Theory Letters to be of particular merit.

Excerpts:

"I've been having new thoughts about the gold situation. The new thoughts are that I don't think serious gold buyers are at all eager to see gold surge to new highs -- at least not at this time. No, I think gold is under serious, quiet ACCUMULATION, and the accumulators are actually hoping that gold takes it slow."

[Randy's note: Can you hear the echoing "footsteps of giants" in this? I sure can. Now skipping ahead to Russell's concluding remarks...]

"The points I am making is that those who buy gold here must be patient. This is the accumulation phase of the gold bull market.

"The funds have no gold shares. The public doesn't even know how or where to buy gold coins. Gold metal and gold shares are being bought by knowledgeable investors who have a vision of the future."

Repeat: "The public doesn't even know how or where to buy gold coins...."

The good news is that, unlike the public in general who will likely come up against a steep learning curve, you already know how and where to buy gold coins. Right here at USAGOLD -Centennial. We've been keeping you ahead of the curve for years and we count on your consideration for business along with your endorsements to friends and family. Thanks!

R.


Black Blade (11/18/02; 12:28:27MT - usagold.com msg#: 89841)
Crude Oil Rises on Concern Iraq Will Impede Weapons Inspectors
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APdkauBZiQ3J1ZGUg

Snippit:

New York, Nov. 18 (Bloomberg) -- Crude oil rose for a third session on concern that Iraq will obstruct United Nations weapons inspectors, sparking a military conflict with the U.S. that might disrupt Persian Gulf oil shipments. UN inspectors have returned to Iraq for the first time in four years to search for biological, chemical and nuclear weapons. Traders are skeptical that Iraq will allow unfettered access to suspected weapons sites as required by a UN resolution passed earlier this month. Iraq and its Persian Gulf neighbors pump more than a quarter of global oil supplies. ``The concern is over Iraq and the potential for that situation to introduce instability into a key oil-producing region,'' said Jonathan Leak, senior vice president of risk management at World Fuel Services Corp. in Atlanta. ``What nobody knows is whether Saddam will torch his own oilfields or lob Scud missiles'' into neighboring countries.

The U.S. has been building up its Strategic Petroleum Reserve, an emergency stockpile held in underground caverns for use in times of national emergency. The reserve rose to 592 million barrels last week, the highest level in its 25-year history, Energy Department figures showed. The amount is equal to 324 days worth of shipments from Persian Gulf countries, based on department figures for August imports. U.S. imports from the region dropped 31 percent in the year through August, mostly because of a decline from Iraq. The government wants to fill the reserve to its 700 million- barrel capacity to strengthen U.S. energy security. At the current pace of deliveries, the reserve will be full by 2005, the department said.

Black Blade: Looks a lot like war preparations to me. What's the point of going to such lengths for nothing. Such a large build up in the SPR means that some may expect the war in Iraq and oil disruptions to last a long time. Europe is in the process of building up their strategic reserves as well.



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a nation of one (11/18/02; 11:20:28MT - usagold.com msg#: 89839)
Re: Hipplebeck (11/18/02; 08:38:04MT - usagold.com msg#: 89828)

You say: "Prices are manipulated through the use of derivatives. You can control the perception of plenty for awhile in the face of an impending shortfall, but no amount of derivative structure can fix the problem when the shortfall actually arrives. Derivative notational values must continually expand as the crises gets closer."

You have hit the nail right on the head.


a nation of one (11/18/02; 11:14:17MT - usagold.com msg#: 89838)
Re: Black Blade (11/18/02; 03:09:35MT - usagold.com msg#: 89821)

You say: "...politicians are chosen from the lower rungs of the evolutionary ladder."

This phrase should ring loudly throughout eternity.


goldfool (11/18/02; 11:08:17MT - usagold.com msg#: 89837)
A poster suitable for framing
http://www.markpoyser.com/diagrams.htm
On the lighter side.

a nation of one (11/18/02; 11:04:01MT - usagold.com msg#: 89836)
sip sip
http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=i&w=15&t=c&a=2

Gold seems to be being bought up on minor dips. I think that means it is strong.


Black Blade (11/18/02; 10:56:38MT - usagold.com msg#: 89835)
Re: Hoople - CNBC

The very rare few times that there is a guest who is bearish, that is the only time I see the CNBC "journalists" really get the hairs up on the back of their necks. They tend to deride and intimidate the guest. The usual tactic is to barage the guest and to not let him answer before they cut him off. I have seen them pull this stunt with David Tice of Prudent Bear Fund for example. And God forbid anyone even mention Gold.

NBC is nothing more than a non-stop commercial for Wall Street, but the viewers are just getting fed up and are changing the station. I haven't watched CNBC for about three weeks now. In fact I only watch webfn or Bloomberg online occasionally while surfing and that's only because they have financial info I can click on for immediate access to data and it's free. But I have had it as far as CNBC and CNNfn are concerned. That carnival barker mentality was raising my blood pressure. Cheers!

- Black Blade


goldfool (11/18/02; 10:53:06MT - usagold.com msg#: 89834)
Black Blade - CNBC Bartiromo Quote Generator
http://www.markpoyser.com/bartiromotalks/qg.htm
Looking at the numbers, the Dow would be up today if we just took out MSFT and the stocks that were down. In other news, a guy who thinks Graham and Dodd is obsolete begged us to say on-air that there will be another speech by Greenspan praising Service Corp International. Coming up next, why the BLS is justified in tweaking the CPI formulas.

USAGOLD / Centennial Precious Metals, Inc. (11/18/02; 10:38:36MT - usagold.com msg#: 89833)
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The Hoople (11/18/02; 10:26:57MT - usagold.com msg#: 89832)
Black Blade, re:CNBC
I remember a couple years ago CNBC was interviewing Bill Fleckenstein. (note too the dearth of bears being interviewed lately, in spite of bearish being the correct call for 3 years) Fleckenstein was asked what it would take for him to become bullish on the market. He replied, "when financial cable stations like this go off the air". That was brilliant.

Leigh (11/18/02; 09:22:17MT - usagold.com msg#: 89831)
sector
I'm always thrilled and inspired when I see Gretchen Morgenson's name above an piece of financial investigative reporting. She was a colleague of the late "suicide victim" Allen Myerson and wrote a couple of books with him. Mr. Myerson's "suicide" apparently has not dampened her determination to get the truth out.

sector (11/18/02; 09:12:46MT - usagold.com msg#: 89830)
Does the Rot on Wall Street Reach Right to the Top?
New York Times
By GRETCHEN MORGENSON

As the latest in a long line of Wall Street morality plays, the one involving Sanford I. Weill, the chairman of Citigroup, and Jack B. Grubman, his firm's former star telecommunications analyst, is unfolding in depressingly familiar fashion. But it differs too from some other dramas involving brokerage firm titans: thousands of individual investors lost millions of dollars because of what appear to have been self-interested actions by Mr. Grubman and Mr. Weill.

The story so far: in early 1999 Mr. Weill asked Mr. Grubman, a man whose job it is to monitor by the minute what is happening at telecom companies, to "take a fresh look" at AT&T. Mr. Grubman, who had been negative on the stock, coincidentally upgraded it to a buy in November 1999. A few months later, Mr. Weill's firm helped AT& T sell shares in its wireless division to investors, reaping bountiful fees. And Mr. Grubman got help from Mr. Weill securing spots in a prestigious Manhattan nursery school for his twins.

In October 2000, Mr. Grubman downgraded the shares again after the stock had lost 50 percent of its value.

Recall past Wall Street shows. The infractions and hubris of Michael Milken at Drexel Burnham Lambert in the 1980's did not wipe out armies of small investors. And individual investors were largely unaffected by the attempt of a Salomon Brothers trader to corner the market in United States Treasury securities, a power play that cost John H. Gutfreund, the firm's chairman, his job in 1991.

Mr. Weill said last week that he did not mean to pressure Mr. Grubman into changing his view on AT& T, and that he assumed Mr. Grubman would rate the stock on its merits. But his argument is unpersuasive.

The fact is, Mr. Weill's request of Mr. Grubman draws him into the circle of people that investors can consider at least partly responsible for losses they incurred by following the analyst's advice. Between his upgrade of AT&T when the stock was at $57.43, and his downgrade, at $28.88, some $80 billion in market value vanished.

To be sure, Mr. Grubman was not the only analyst who was bullish on AT&T in 1999. This column quoted one in May 1999 who incorrectly projected a positive future for the company and its shareholders. What a bad call of mine that column was!

It may not come as a surprise to people on Wall Street or those accustomed to its ways, that Mr. Weill inserted himself into the research process relating to AT&T. But that doesn't mean it looks good. In fact, it looks awful. Sufficiently so that some large investors have dumped Citigroup shares as a result.

BILL DIERKER, vice president of equity securities at Nationwide Insurance in Columbus, Ohio, said he had sold the last of his company's roughly 1.5 million Citigroup shares last Thursday. That was the day after Mr. Weill owned up to contacting Mr. Grubman about his AT&T rating.

Mr. Dierker's reason? "The quality of management is a big variable in my decision-making process and Citigroup went from having a reasonable score to having a low score," he said. "For investors, it used to be we didn't know what we didn't know. Now, I think there's a sense that there's a lot we don't know."

Mr. Weill's position at the top of Citigroup may yet be secure. But his legacy as an impressive manager who has created significant shareholder value has been severely damaged.

Bill Fleckenstein, president of Fleckenstein Capital in Seattle, said the incident showed "that it wasn't just the analysts and the corporate finance guys on Wall Street who would do whatever it took to make a buck. The C.E.O.'s did, too." But this was standard practice on Wall Street in the 90's, he noted. "The only reason we get to know about this is there was a paper trail," he said. And a doozy of a trail at that.

Why is it so hard for smart people who have been around awhile — Mr. Weill and Mr. Grubman qualify on both counts — to see that if the road to instant gratification requires taking a wrong moral turn, such a turn is inadvisable? I really and truly want to know.
+++++++++++++++++++++

This woman is on a mission and Wall Street is finally realizing that they are nearing the moment of capitulation...dumping the top CEOs at JPM and Citi Bank.

THAT will be interesting.



Black Blade (11/18/02; 09:07:54MT - usagold.com msg#: 89829)
The Non-Stop CNBC Infomercial

In the early 1980's there was a television network called The Financial News Network (FNN). It was actually quite good and just presented the facts and there was little salesmanship as far as financial instruments were concerned. However, this network was acquired by NBC and the rest is history, or is it?

For the last several years CNBC has become the opiate of the Lemming masses. The network parades guests before the cameras to opine on various companies and the state of the economy. Frequent guests include corporate CEO's of Fortune 500 companies, fund managers and securities analysts. The set is surrounded by various props such as lit monitors and computers. There are even the friendly used car salesmen types passing themselves off as serious journalists who have evolved into cult personalities. These ever faithful carnival barkers confidently cheered on the soaring dot.com, tech and telecom bubble. Is this serious journalism or is it simply an infomercial to sell stocks?

A typical day on CNBC (and CNNfn for that matter) will have any number of paraded before the cameras exhorting everyone to buy stocks. Yet as for every buyer there is a seller for each and every share that trades. Curiously every man, woman, and even sometimes child presented is uniformly bullish on stocks. Yet no one says to sell a stock. There is no recommendation to buy real estate, bonds, commodities, precious metals, collectables, or simply saving money in the bank. Rise or fall on the equities markets it does not matter. The message is always the same – buy stocks – buy any stocks.

Corporate executives come on stage to promote their company's stock – fair enough as that is what their job is. However, they rarely get skewered with the "hard" questions. In fact they are "thrown softball" questions and they can rest assured that these "journalists" will go through the carefully prepared talking points. Occasionally the end of the segment will not get completely cut off or the sound is left on as the segment begins and under the faded volume the executive can be heard to say "thanks for the help guys", or something similar.

Wall Street research (and I use the term very loosely) analysts are supposed to look out for the interests of the stockholder by making an objective analysis of the company and the corporate balance sheet. Instead we get "Buy" recommendations and no "Sell" recommendations. "Sell" is simply not in the vocabulary for these pimps. While CNBC presents the "analysis" as "news", in reality it is simply a commercial. CNBC is nothing more than a silly ad to buy stocks. They would do just as well to have "Mr. Whipple" come out and tell everyone "don't squeeze the stock certificates".

Lately CNBC has been doing some damage control as it now is fashionable to lower the boom on analysts since it was "discovered" that they were pumping stocks favored by the investment side of their investment houses in return for obscene bonuses. Of course CNBC was complicit in the whole sordid affair helping these pimps to sell "pigs wearing lipstick". Curiously CNBC does not present a track record of the security or the analyst's performance from previous recommendations. Apparently CNBC is unable to produce charts that trace stock prices and show where the analyst made his Delphic buy, sell, and hold calls (yes I know that they don't issue "sell" calls). It would even be better if CNBC presented a table of how the typical investor fared if he invested based on the analyst's recommendations.

The carnival barking is so shameless that it borders on the absurd. Typical reasons for buying are "stocks are down and therefore cheap", never mind that the PE ratio is lodged somewhere in the stratosphere (provided that there even is one – PE that is). My favorite reason still is that people should buy stocks because the will be positioned for the "second half recovery". Yeah right, we have been waiting for this supposed "second half recovery" going on 3 years now. Eventually they will get a second half recovery if they wait long enough. Of course if these "experts" are so good at seeing into the future how come they didn't see the grizzly carnage of the current bear market? Then these pimps usually top it off with some "witty" remark like "we outperformed the benchmark S&P 500". Thank God they didn't use the NASDAQ!!!

One recommendation would be for CNBC to keep a running track record on these clowns stock tips. That would be asking a bit much I guess. After all CNBC relies on advertising from the sponsors and those sponsors are the Wall Street investment community. Their viewers are fleeing though as the bear market growls on. CNBC's ratings are falling fast. One would notice that there are fewer commercials for mutual funds and investment services and more for recordings of dead musicians (not sold in stores of course), ads for sexual potency, weight loss, and hair restoration, and exercise devices. Hey – wait a minute – I guess this does fit in. After all, CNBC is just a non-stop day long infomercial.

Then there is the Heckel and Jeckel show (a.k.a. Kudlow and Cramer) featuring trolls Larry Kudlow (a former cocaine addict and alcoholic) and James Cramer (a former hedge fund manager accused of using CNBC to tout his positions just before selling in a classic "pump and dump" scheme). But that's for another write up some other time.

- Black Blade


Hipplebeck (11/18/02; 08:38:04MT - usagold.com msg#: 89828)
On Derivatives
Prices are manipulated through the use of derivatives.
You can control the perception of plenty for awhile in the face of an impending shortfall, but no amount of derivative structure can fix the problem when the shortfall actually arrives. Derivative notational values must continually expand as the crises gets closer.


Waverider (11/18/02; 06:55:07MT - usagold.com msg#: 89827)
U.S. Luxury Home Sales Slip, a Sign the Housing Boom May Fizzle
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APdh1hhV6VS5TLiBM
Snippit:
"While homes across the U.S. are selling at a record pace this year, sales in the luxury segment of the market -- houses priced at more than $1 million -- have slowed. They fell 10 percent to 4,890 in the third quarter after having climbed 68 percent in the second quarter. The decline means the overall housing market may have peaked, economists said. ``If luxury sales slow, the rest of the market will follow,'' said Michael Sklarz, chief valuation officer for Santa Barbara, California-based research company Fidelity National Information Solutions. ``A slowdown at the high end is a clear sign that prices are at a turning point for the entire market.''

Waverider: More on the deflating real estate bubble which caught Mr. Grasshopper, and others apparently, by suprise.


Boilermaker (11/18/02; 06:33:24MT - usagold.com msg#: 89826)
Spam for Grasshopper's Thanksgiving
Black Blade- Liked your Mr. Ant/Mr. Grasshopper tale and Steve Roach is about the only main stream economics commentator who speaks the truth. I wonder how he survives with Morgan Stanley.

I've been watching the energy situation closely and I just saw some story lines that support the theory that we may be a few short weeks away from a serious NG shortage. Here are the snips;

GAS GROUPS WARN FERC NOT TO WORSEN FRAGILE MARKETS
Natural gas trade groups urged the US Federal Energy Regulatory
Commission Oct. 25 to be mindful that energy markets and the
financial community need "appropriate" price signals to ensure
that gas infrastructure will be built to meet future demand. -
(YellowBrix, LENGTH=781 words)
-->http://www.energycentral.com/global/news.cfm?t=g&id=3461022


AGA URGES FERC TO LET MARKET OPERATE
The American Gas Association recently asked the Federal Energy
Regulatory Commission (FERC) to let the economic laws of supply
and demand continue determining the value of short-term capacity
on interstate natural gas pipelines that is resold by natural gas
utilities, via comments filed with the Commission. - (YellowBrix,
LENGTH=365 words)
-->http://www.energycentral.com/global/news.cfm?t=g&id=3461027


GAS ASSOCIATIONS DISPUTE OPS COST ESTIMATES
Although neither Congress nor the DOT has yet finalized an
integrity management program, natural gas trade associations are
laying the groundwork so they can say "I told you so" when the
program of choice results in a spike in natural gas prices. -
(YellowBrix, LENGTH=615 words)
-->http://www.energycentral.com/global/news.cfm?t=g&id=3461122


comment- I'm not sure why NG prices have retreated this fall but I suspect there's some data manipulation and/or derivitive shenanigans involved.

Boilermaker


Black Blade (11/18/02; 05:01:47MT - usagold.com msg#: 89825)
The Asset-Liability Mismatch - Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20021115-fri.html#anchor0

Snippit:

The transition to a post-bubble era is daunting, to say the least. To the extent that return expectations of consumers, companies, governments, and investors were set during the days of froth, a rude awakening is now in order. That especially pertains to a wide array of contingent liabilities in the system – the funding of which was predicated on a pace of asset appreciation we may never see again. The resolution of this mismatch could well be the central challenge of the post-bubble era.

To oversimplify, assets are about today, whereas liabilities are about tomorrow. During the Roaring 1990s, financial assets – especially equities – were valued as if they would keep yielding bubble-like returns in perpetuity. The actors in the system became true believers in the legitimacy of these valuations. They established liabilities – such as pensions, retirement lifestyles, and debt-service obligations – that could only be funded if returns held to these new norms. The gap between assets and liabilities was presumed to be closed by a steady stream of reinvestment at high nominal yields. Few ever contemplated what would happen to this equation in a low yield environment. The asset-liability mismatch is all about the New Math of a low-return post-bubble era.


Black Blade: One hell of a depressing assessment by Stephen Roach. Though he is likely right about how the Baby Boomers will have to rethink their retirement plans. In the meantime get prepared.

As always, get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. Imagine two families (the Ant family and the Grasshopper family). Mr. Ant and Mr. Grasshopper work for the same company. Mr. Ant stays debt free and paid off his mortgage, has cash and physical precious metals, and he has a pantry full of canned and dry goods. Mr. Grasshopper invested in dot.coms, and instead of paying off the mortgage he refinanced with a third mortgage on his home for about 125% of the values and is paying huge monthly payments. He also bout a new minivan with all the perks because of zero percent financing and he just put in a swimming pool. One day the boss drops by their offices and says, "sorry guys but the company just went belly up and we're out of a job…… oh yeah, and the pension plan was raided by the company to pay creditors so it's under funded". Mr. Ant and Mr. Grasshopper are feeling really bummed. But Mr. Ant figures that he can get by for several months while looking for another job. Mr. Grasshopper is in a panic and sweating profusely worried about the mortgage payment, the car payment, the swimming pool payment, etc. He is punching his calculator to see how far his $150 a week unemployment check will last. Mr. Ant considers looking for work or maybe getting some job training for a new career while his family gets by on their food stores, paying minor bills from the cash stash, secure that they preserved their wealth with precious metals. Mr. Grasshopper is in the state mental health facility after suffering a nervous breakdown after his wife leaves him with the kids and files for divorce while petitioning for alimony and child support, the bank threatens foreclosure on his home, the utilities are shut off and the car dealership repossesses his minivan (as soon as they track down Mrs. Grasshopper). To make matters worse he can't sell the house as the real estate bubbles is deflating and his credit cards are maxed out. While Mr. Ant and his family are sitting down to a turkey dinner and counting their blessings, Mr. Grasshopper is opening a can of spam. As I said, get prepared because it will get a lot worse before it gets better.



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Belgian (11/18/02; 03:45:57MT - usagold.com msg#: 89823)
Reflexion on BB's FT- Gold's Midas touch leaves banks cold # 89801
No more Gold-analysts (pushers/bashers) needed ! Analysts are not supposed to "analyse". It is getting extremely difficult to rock the gold-market up and down, at the brotherhood's convenience (profitability).
The gold-brothers (club) are losing their manipulative grip(s). No more fun to derivatize at the expense of the ignorant.
Not so for the stock-markets that are "solely" moving (moved-!) in function of the derivative-colossus. The dog's tail (derivatives) swinging the dog (stocks/bonds).

You can NOT fool around at eternity with REAL VALUE GOLD. In contrast with WORTHLESNESS that can be swinged from one corner to the next, ad infinitum. That's the game folks. Or better "the" perpetual lie !

In a serious and responsible world, real, tangible values, are not supposed to swing like hell in pricing. Real values move orderly in a natural cadanse. But gamblers have no message on this laws, because they want it all and now, no matter what.

The longer these idiotic financial *plays* continue, the more the underlying left overs of real industrial values, detoriate and rot under the overwhelming stupidness of confetti/virtual digits hysteria. Price-changes of 4%/5%/6% are happening in a matter of minutes now on a daily basis !
How do we have to name such action ? This has absolutely nothing to do with "volatility" anymore. This is "mania" as the expression of death-stupors.



ElGordo (11/18/02; 03:17:32MT - usagold.com msg#: 89822)
Iraq faces early confrontation
http://news.bbc.co.uk/2/hi/middle_east/2477527.stm
But the first test will be the declaration Iraq has to make within three weeks of all its chemical, biological, nuclear and missile programmes.

US Secretary of State Colin Powell took a different view from Mr Annan: he told BBC News Online that members of the Security Council, not just the inspectors, could judge whether the declaration bore some relation to the truth.

British officials have also said they would not accept an Iraqi declaration that it had no weapons of mass destruction, as they would not believe it.

Stage set?

But the letter from Iraq accepting the resolution said almost precisely that: it denied US and British allegations that it had produced more such weapons since UN inspectors left four years ago.

So the stage seems set for an early confrontation.


Black Blade (11/18/02; 03:09:35MT - usagold.com msg#: 89821)
Brown hails 'success' of cut-price gold sale
http://money.telegraph.co.uk/money/main.jhtml?xml=/money/2002/11/18/cngold18.xml&sSheet=/money/2002/11/18/ixcity.html

Snippit:

Chancellor Gordon Brown and his Treasury officials have used an internal review to pat themselves on the back for selling more than half of Britain's gold reserves, despite the fact the process lost the taxpayer around £175m. Peter Hambro, who runs the eponymous gold company, said: "The idea the auction was a success is completely ridiculous. The point is the Treasury called the bottom of the market with uncanny accuracy. They have forgotten that gold is meant for times of trouble."

Black Blade: I agree with Peter Hambro on this one. After suffering horrific losses during these "auctions", Gordie Brown is trying the "hard sell" in a pathetic attempt to spin a story. He has a lot to learn from the Wall Street boys on how to spin a story. He must be feeling the heat as he is continuously spinning this tale of "success" instead of letting it lie and hoping that it will just "go away" and not attract attention. But then what else can he do? He and Tony Blair blundered very badly and everyone knows it. Worse yet, they invested the proceeds in foreign currencies and the value has deteriorated even more. Then the excuse that the gold is expensive to store is a hoot as well. Just leave it in a corner of the vault, lock it up, and be secure in the knowledge that there is at least some "insurance" for the people and the country. As I have always said, politicians are chosen from the lower rungs of the evolutionary ladder.



Black Blade (11/18/02; 02:33:18MT - usagold.com msg#: 89820)
London analysts get the boot
http://www.mips1.net/MGFin.nsf/Current/4225685F0043D37A42256C7400599234?OpenDocument

By: Ken Gooding
Posted: 2002/11/17 Sun 18:18 ZE2 | © Mineweb 1997-2002

LONDON - Some of London's best-known and respected mining analysts are being laid off in the latest round of bloodletting by investment banks, sending tremors through the sector and leaving some of their colleagues wondering where the axe will fall next.

Latest analysts to be shown the door include Peter Davey, head of the mining team at SG Securities, part of Society Generale, the French banking group. SG has shut down all of its mining analysis and Davey's colleague, Jonathan Copus, is also leaving. It is not just mining that is suffering. SG insiders suggest about 50 people are being laid off, including two thirds of all the SG equity analysts based in London. "It's carnage here," was one comment. However, Societe Generale will continue to cover the mining and metals markets through analyst Stephen Briggs, who is part of the commodities trading operation.

Over at Schroeder Salamon Smith Barney, Fiona Perrott-Humphries, like Davey a trenchant and outspoken analyst and head of the mining team, has left. City bar gossip suggests that Perrott-Humphries was told that there had to be cuts and the choice was between her job and those of some of her team. She decided to go.

Investment banks are cutting back on all fronts because weak markets have left corporate financing activity at a low ebb. "There is an almost complete lack of business on the corporate front," one banker explained.

However, some recruiting is still going on. This has resulted in a further blow to HSBC which as recently as April had its mining team – Jon Bergtheil, Daniel Major and Albert Minassiam - poached by J P Morgan. Now Georges Lequime, brought in to help replace the lost talent as head of global metals and mining and formerly with Old Mutual, is moving to RBC Capital Markets, part of Royal Bank of Canada group. There he will be specialising in South African stocks, gold and diamonds. Stephen Foss, head of RBC Capital Markets’ equities division, says: "We are very, very pleased to have got him." To some extent Lequime is replacing John Barker, a long time mining specialist with RBC in London who recently decided to move to SouthernEra Resources, the Canadian mining company.

Meanwhile, the AIM-listed London investment house, NUMIS Securities, is breaking into the mining business and has recruited a new team headed by John Meyer. He, with fortuitous timing, moved from SG Securities in September.


Black Blade: Recently several well known precious metals analysts have been allowed to "pursue other interests". That should not be surprising as PM analysts cannot expect to keep their jobs if they miss a raging bull market and then continue to ignore the market while it rises or remains quite strong. On the other hand, some who have turned bullish on Gold have been seen headed for the growing "Bone Pile". However, base metals will continue to struggle until the economy really does recover. Basic raw materials will recover ahead of the general economy as manufacturers gear up for expected increased sales in a "recovering economy". I don't see that happening yet so I still see the U.S. economy far from any recovery. Now that mining analysts are being led to the "Bone Pile", it does not look good at all for the economy.



Belgian (11/18/02; 02:22:18MT - usagold.com msg#: 89819)
@ ElGordo : pensionplans > demographics !
Great you brought this subject on the forum, Sir !
Because it unfortunately is, a frightening reality, already in full swing. In other words : how *credible* is your future 20 years of pensioners-income and its purchasing power ? How many "actives" will provide your prosperity as an "inactive" ? Voila, ElGordo, you touched "the" nerf !

As I suggested already before, 1 Trillion $ per year as rent-income for Americans and none of them raising questions on the durability of this. All pensioners living on their income from savings are lured into the financial-systemic of multiplying their confetti as to stay ahead of the present and future, unknown, PERMANENT DEPRECIATION of their confetti. None of these individuals has any clue about the wealth of Gold in possession.

This growing number of pensioners must be convinced for as long as possible that they remain "creditworthy" with their confetti savings and that "hidden", permanent depreciation of their confetti will be compensated with more virtual digits, provided by the financial brotherhood.
This topic is a tabu in Euroland, because of being considered as "irresponsible" and un-necesarry incitation to panic ?

Is there any better reason for having prepared a FREE MARKET IN PHYSICAL GOLD !!! ???

Those who presume they are still creditworthy with their stashes of confetti, should interrogate themselves about this. It is avoided by all means as to avert a gigantic confidence-shock. Or better, rightout panic !

The workers/savers of the past will be sacrificed at the advantage of the young who cannot and will not be supportive.

The above is part of the explanation why *financials* are as they are. Have a look at the losses of all the major pension-funds ! Minus 75% for this year !!! And this is applicable for the whole western sphere, US and Euroland as well.

SAVERS WAKE UP !


ElGordo (11/18/02; 01:43:26MT - usagold.com msg#: 89818)
JP Morgan in trouble again (red Alert)
NY Times story
F.B.I. agents raided the headquarters of National Century Financial Enterprises Inc. in Dublin, Ohio, on Saturday, seizing the books and computer records of the troubled health care finance company.

The raid came as the company has been struggling with financial problems that began in late October and that may force it to file for bankruptcy as early as today.

Documents from court actions against the company have accused National Century of gross mismanagement and of hiding information. What is becoming clear is that for clients and investors, millions of health care receivables supposedly backing $3.35 billion in bonds, once AAA rated, may have never existed.

The former chairman and chief executive of National Century, Lance K. Poulsen, resigned both posts under pressure on Nov. 8 and could not be reached for comment.

Lawyers for the company's board, which is led by two bankers from J. P. Morgan Chase, said National Century and Alvarez & Marsal, a turnaround firm the board has hired, would cooperate with the F.B.I.

One of the lawyers, Paul E. Harner, said F.B.I. agents seized a number of records and computers on Saturday from National Century.

National Century is one of the largest health care finance companies in the country. It lends money to cash-short health care companies in return for taking over rights to their receivables — payments expected from insurers and government programs like Medicare and Medicaid. It then packages those receivables into bonds and sells them to investors, who receive interest derived from the insurance payments. National Century gets a part of each transaction.

But last spring, new investors started to shy away from National Century bonds, depriving it of new capital. In response, the company took money from reserve accounts backing two bond trusts worth $3.35 billion. When investors discovered that almost $350 million was missing from a trust called NPF XII, they protested and National Century's finances began to fall apart.

Facing a liquidity crisis, National Century stopped making payments to hundreds of hospital and home health care clients. That, in turn, led two large clients — PhyAmerica Physician Group in Durham, N.C., and Tender Loving Care, a unit of Med Diversified in Andover, Mass. — to seek bankruptcy protection.

Now, National Century's clients and its bondholders, including Pacific Investment Management Company or Pimco, are battling for control of the remaining receivables.

But millions of those receivables may not exist. Instead, the company appears to have been using its bonds to prop up troubled companies like Med Diversified in which National Century or its officers — including Mr. Poulsen and his wife, Barbara, — either have an ownership interest or own outright. The bonds were underwritten by Credit Suisse First Boston and rated AAA until Oct. 25 by Moody's Investors Service.

One window to the company's operations is an affidavit filed on Friday in the Franklin County Court of Common Pleas in Columbus, Ohio. In the filing, Kenneth J. Phelan, a managing director of Bank One, which served as trustee for the NPF XII transaction, described a discussion with Sherry Gibson, an executive vice president at National Century. According to the affidavit, Ms. Gibson said that National Century lent more money to clients than it could support with patient receivables.

Rather, the company accepted real estate and even artwork as collateral, which violated the bond indenture. NPF XII is supposed to have about $2 billion in collateral. Of that, according to the affidavit, Ms. Gibson told Mr. Phelan that $800 million was in "nonpatient specific receivables." In other words, 40 percent of the bonds are backed by collateral that has nothing to do with insurance payments.

According to the affidavit, Ms. Gibson also said that National Century failed to write off receivables that were more than 180 days past due, as required by the bond indentures. She explained that executives often reclassified the bonds as collateral in a category called "150+ day." Likewise, Ms. Gibson said executives advanced monies to companies that provided receivables for services that had yet to be performed. If the service was never performed, this was not reflected in the books. And National Century kept lending the client money anyway, according to the affidavit.

As for the reserve funds securing the bond transactions, Ms. Gibson told Mr. Phelan that executives routinely moved money in and out of the accounts. They staggered the reporting days of the reserves so that they could make sure one was full on a given day, even if the other was not. As trustee, Bank One was supposed to monitor the activity, as was J. P. Morgan, which acted as trustee for a sister transaction called NPF VI.

Both banks have been sued by Med Diversified, which has accused trustees of not monitoring the bonds. But according to the affidavit, Ms. Gibson said that National Century had provided false information to Bank One "to get it past the trustees or the trustees would not move the cash."

Mr. Harner, the company's lawyer, said, "We expect that all of these types of allegations will be fully investigated by independent parties."

Until now, the extent of National Century's ownership in its clients was not known. But other papers in the bondholder suit outline that the company and its affiliates have major stakes in 10 of its biggest customers. As much as 56 percent of the receivables come from affiliated companies, giving National Century an economic interest in both sides of a bond transaction — a clear conflict of interest.
______________
I'm surprised Bloomberg not covering this story yet.
JPM will have to cut dividend soon. Lots of bad news coming
up on JPM more and more. Lots of bad debt to write off.
Downgrades coming. Management may be replaced by
angry shareholders. Big changes needed to survive.


Belgian (11/18/02; 01:32:06MT - usagold.com msg#: 89817)
About * CREDIT* and *DEBT*
Two complete different notions ! Credit can be, proportionaly, given, to who "owns" something credible.
More Debt must be created as there is less credibility, simply to replace tangible credit for worthless debt.

The whole magic about our past prosperity, comes from the fantastic tric of having replaced, "credit" for "debt".
Credit-cards are debt-cards !

DEBT = NOTHING >>> CREDIT = SOMETHING !!!

W've simply landed, there, where no questions should be asked about your "creditworthness" or your "indebtness" !

Simply to add more on debt and destroy what's left of credit !

Individuals, corporations and states don't dare to face what's left of their *credibility* , anymore. That's why GOLD will GLOW !


ElGordo (11/18/02; 01:23:48MT - usagold.com msg#: 89816)
Aging populations a global problem for pension plans
http://www.marketwatch.com/news/print_story.asp?print=1&guid={26F96582-04EC-4C69-A36A-797F6DD19FDD}&siteid=myyahoo
SAN FRANCISCO (CBS.MW) -- France, Spain and Italy are heading for an economic and political meltdown unless they change their public benefit programs for the elderly -- and fast, according to a new report.

In those countries, a large and growing population of older people, generous government programs, and a dearth of private pensions will push public pension and health-care costs to 29 percent or more of GDP by 2040, more than double today's average, the study by the Center for Strategic and International Studies found.

"Some countries are going to have an extremely hard time trying to maintain their social guarantees," said Paul Hewitt, director of CSIS' Global Aging Initiative. "Private pensions are virtually nonexistent in the Continental economies. It's all tax-and-spend -- tax the workers to pay the retirees."

With a ballooning number of seniors, "it's going to place intolerable burdens on the economy," he said.

Of 12 countries studied, Australia, the United Kingdom and the United States are best able to meet the needs of their swelling ranks of retirees, mainly because of stronger private pension programs, according to the study.

The demographic shifts highlighted by the report are staggering. Over the next few decades, the number of seniors per 100 working-age adults will jump to 70, from 30 today, in developed countries. Seniors are considered 60-years-old and older in the study.

And in Japan, Italy and Spain, that number will rise to 100, meaning one retiree per worker. But Japan's demographics -- the country's median age will be 50 in 2025-- are offset by seniors who are willing to work well into their seventies, and by less generous public benefits than most European countries.
___________
They fail to mention those private pension plans in the US
for example are way underfunded.


ElGordo (11/18/02; 01:13:57MT - usagold.com msg#: 89815)
Iraq may have "dusty" weapons
http://www.washtimes.com/national/20021118-96845891.htm
Iraqi scientists know how to make chemical weapons that can penetrate military protective clothing, and Iraq imported up to 25 metric tons last month of a powder that is a crucial ingredient to such "dusty" weapons.

Iraq told the United Nations the powder was destined for a pharmaceutical company. A former weapons inspector says that company was ordered by President Saddam Hussein before the 1991 Persian Gulf war to work on chemical and biological weapons.

The powder, sold under the brand name Aerosil, has particles so small that, when coated with deadly poisons, they can pass through the tiniest gaps in protective suits.

Researchers inside and outside the U.S. government say they are not certain Iraq has dusty chemical weapons. Declassified U.S. intelligence documents say Iraq produced a dusty form of the blister agent mustard gas in the 1980s and used it during its eight-year war with Iran.


Black Blade (11/18/02; 01:03:36MT - usagold.com msg#: 89814)
Oil, Air, Energy Laws in Play
http://www.washingtonpost.com/wp-dyn/articles/A3220-2002Nov17.html

Environmentalists Fear New Senate

Snippit:

Suddenly, President Bush's proposals to drill for oil in an Alaskan wilderness, boost energy exploration in the Rockies and consider changes to some major environmental laws are back in play, following the Republicans' resounding success in last week's congressional elections. Sen. Pete V. Domenici (R-N.M.) says he plans to vigorously promote energy exploration on federal lands -- including ANWR -- after he replaces Democrat Jeff Bingaman (N.M.) as committee chairman. "Absolutely," Domenici said in a recent interview, "ANWR's got to be looked at." A senior Domenici aide went further, saying, "Any new energy bill would include ANWR." Diemer True, chairman of the Independent Petroleum Association of America, which represents 8,000 producers, said: "Clearly a Republican majority in the Senate will be more focused on domestic energy production, and we think that bodes well for domestic oil and gas producers."

Energy exploration isn't the only issue the new Republican-controlled Congress will revisit. GOP leaders say they will challenge or review a handful of key environmental laws that govern power-plant emissions, water quality, endangered species, mining and other subjects. Those laws sometimes pose unnecessary impediments to production, Bush administration officials have said. Domenici, 70, also would like to restrict environmentalists' ability to go to court to block mining, drilling, logging and grazing on federal lands, saying those decisions should be left to Congress and federal agencies. He said in an interview he will launch a comprehensive review of government management practices of "the entire public domain," with an eye to seeking management changes. "I'm concerned about how those who don't like the laws of our land find loopholes and other ways to get the land into court because they want their way," Domenici said.


Black Blade: This is going to be an "interesting" year. The Teamsters Union is happy though. It would be interesting to see domestic exploration in petroleum and mining back on track again, though it would take several years to explore and develop these natural resources.


Black Blade (11/18/02; 00:23:22MT - usagold.com msg#: 89813)
Street plays same old game, invites another fall
http://moneycentral.msn.com/content/P33628.asp?special=msn

Snippit:

It's a new day but you'd think it was early 2000 by the way The Street still plays 'beat the number.' I believe the reality is that valuations are still too high -- and October's lows won't hold. - By Bill Fleckenstein

If Rip van Winkle had lain down for a nap at the height of our stock-market mania and overslept to the present, he would be hard-pressed to notice much change. Portfolios, of course, have shriveled. The Street has been swept clean of a few crooked chieftains. But otherwise, it's business as usual. Corporate America and its lackey analysts continue to play beat-the-number. The media assign this coverage to the financial pages, rather than the funnies.

Black Blade: This issue has been addressed here before, but Fleckenstein does good commentary on the subject. The whole mindless CNBC tripe over "beat the number" is just a distraction to focus attention away from the real problem – the "number" keeps getting progressively lower. That way it is assured that earnings will "beat the number". Even if the "number" is negative, it isn't as negative as the analysts supposedly "predicted". Hmmm…



Black Blade (11/18/02; 00:04:07MT - usagold.com msg#: 89812)
Market Index Futures Lower
http://www.mrci.com/qpnight.asp

US market index futures are lower, the USD and Gold are flat, and petroleum is higher. Not much to go on yet but shaping up to be an "interesting" day on Wall Street.

- Black Blade




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