Gold Today!
ARCHIVED DISCUSSION FROM 7/1/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Golden Bear
(7/1/02; 22:40:16MT - usagold.com msg#: 79663)
Black Blade (msg#: 79648)
Good article BB,
Kurt Richebacher has stated that corporate profits peaked in 1997. So from 1998-2002, corporations have been cooking the books to keep this bull market alive in the minds of investors (todays' further revelations from Worldcom), and provide time for them to sell their stakes to these same investors, thus cashing out billions of dollars...
For the stock market, the fat lady has been singing for over 2 years now...
YGM
(7/1/02; 22:37:48MT - usagold.com msg#: 79662)
More on US Troop Activity in N Iraq..
http://www.fpp.co.uk/online/02/06/Safir290602.html
We wait and see if nothing else....
YGM
(7/1/02; 22:30:36MT - usagold.com msg#: 79661)
US Troops Supposedly in Iraq.....
http://news.com.au/common/story_page/0,4057,4610298%255E401,00.html
Excerpt:
US troops in Iraq: report
From AFP
01jul02
BEIRUT: Dozens of US troops and intelligence services had been sent into northern Iraq from Jordan under a plan to overthrow President Saddam Hussein, a Lebanese newspaper reported yesterday.
In a story datelined London, As-Safir daily quoted "well informed diplomatic sources" as saying Washington "has launched a security and military operation in Iraq".
Central Intelligence Agency chief George Tenet had "personally visited northern Iraq during his last tour of the region and had given orders to start the security plan after US President George W. Bush (recently) approved a decision to ask the CIA to overthrow Saddam", the source said.
The paper, which maintains close relations with the Syrian leadership, said forward bases for US troops had been set up in Jordan.
"Jordanian King Abdullah has given orders to clear two military airports in Jordan for the US forces. About 2000 US troops have been deployed in Jordan so far," the newspaper said.
"Dozens of those US soldiers, along with CIA agents, have been sent into Iraqi territory."
The sources said the US had started a "flurry of contacts with various forces among the Iraqi opposition, and there are great difficulties in forming a coalition similar to the Northern Alliance in Afghanistan".
"Intensive contacts are being held with both the Kurdish and Shi'ite opposition in order to establish springboards for potential operations," sources said.
They added that Washington had first approached Saudi Arabia, which "refused to let its territory be used for any military attack against Iraq".
Jordan vehemently denied the newspaper report. Cont'd...
Black Blade
(7/1/02; 22:28:31MT - usagold.com msg#: 79660)
Asia Awash In Red
http://quote.yahoo.com/m2?u
Looks like Asia is starting off on a negative note tonight.
- Black Blade
YGM
(7/1/02; 22:25:29MT - usagold.com msg#: 79659)
Iraq & Egypt sign Oil Deal......."InViolation of UN Sanctions"
http://www.menewsline.com/stories/2002/july/07_02_1.html
EGYPT, IRAQ SIGN MAJOR OIL ACCORD
LONDON [MENL] -- Egypt and Iraq have signed a multi-billion dollar oil deal that Western diplomats assert has violated United Nations sanctions on the regime of President Saddam Hussein.
The deal signed last year and which has been implemented over the last few months calls for Iraqi export of an estimated 300 million barrels of oil to Egypt during 2002. The oil has been delivered through both Jordan and Syria.
Industry sources and Western diplomats said Baghdad and Cairo have agreed to split the revenues from the sale of the Iraqi oil. One industry source said the agreement calls for Iraq to receive at least $11 per barrel with Egypt receiving another $7.
Under the terms of the accord, Jordan or Syria would receive another $4 per barrel for allowing deliveries through their territory.
--------------------------------------------------------------------------------
NOTE: The above is not the full item.
YGM
(7/1/02; 22:17:48MT - usagold.com msg#: 79658)
Silver Stockpiles...USA......Charts...
http://www.sharelynx.net/Papers/SilverStocks.htm
NIL, ZILCH, NADA....Hang on to your hat cause Gold ain't the only game in town...YGM
Horatio
(7/1/02; 22:09:56MT - usagold.com msg#: 79657)
Nigeria SCAMS
The SCAM capital of the world.Beware of appeals sent out from Nigeria to please help some former government offical or some widow get money out of Nigeria.They want to use your bank account ,your name ,and sometimes your money to help them get money out of the country by promiseing you 10,20,even 30 per cent of what they claim they have in exchange for your help.
I use to get RANDOM faxes where I used to work from Nigeria.I have a friend that gets appeals from CHURCHES and from people he doesen't know claiming to be church people that need to get a widows money out of Nigeria if only you could help by supplying your bank account number and send some money
that could be used to secure bribery favors.
Be fore warned !!
Horatio
(7/1/02; 21:50:26MT - usagold.com msg#: 79656)
Silver
Just to give an example of being consistant ,I own shares in Apex,cde and Hecla .They all are headquarted in stable political locations and all have put great efforts in S.American mines for development.The mines are rich'some have over 140 oz of Silver / ton mined AND 4-5 oz of gold /ton.
All have cheap labor costs because of devaluations.
In some cases the Government is helping to pay for some developement costs such as road building and electricity distribution costs just to bring jobs in.(Peru,Bolivia,Argentina )Thats a enviornment friendly to the mining industry!
I believe thats where the future of mining is,not S.Africa,but thats just my humble opinion.
Horatio
(7/1/02; 21:33:38MT - usagold.com msg#: 79655)
Vanguard Gold Fund
I am a long time holder of Vanguard gold fund ,but I say "shame on you Vanguard".It looks like you yielded to Gumment pressure to help keep the lid on Gold prices.
Even the appearance of yielding to pressure should be avoided.It doesen't matter if there are a limited number gold mines to invest in.(I don't believe that)You didn't use that excuse when you were selling the "Dot Coms" did you? You were happy to take investor money and invest in stocks with no earning's selling at 150/share. Why use selective reasoning for one industry.?You should have taken all investors money and invested in Gold mines as THEY WOULD HAVE YOU DO.
Bid up the price if necessary, its thier money isn't it?
TheJuniorMiner
(7/1/02; 21:26:47MT - usagold.com msg#: 79654)
gimli/silver
Been researching Silver for 'bout 2 months. Best I can come up with is we (world) use about 100 million ounces a year over what is produced and scrapped. Silver demand in industrial use alone is = to mine production.
So all that said, why 5$ an ounce. Your guess is as good as mine. But my research leads me to belive there is MUCH less avaiable silver than gold. Silver cannot keep coming out of warehouses forever, can it?
For a great place to start research, try silver-investor.com
and then let me know what you think. Could be a bigger story than gold.
TheJuniorMiner
(7/1/02; 21:15:33MT - usagold.com msg#: 79653)
Gold and the Financial Times
Gold slips as safe-haven status loses appeal
By Adrienne Roberts in London and agenciesFT.com site;
Jul 01, 2002
Gold prices slipped to six-week lows in Europe on Monday as a stronger US dollar and firmer stock markets reduced the precious metal's appeal as a safe haven.
This taken from the Financial Times web page
In the last 6 weeks Dow -12%, NASD -14%, US$ index 6%. Gold? Only down 4.5 %.
Is this stuff written out of ignorance or purpose. I'd like some opinions.
Horatio
(7/1/02; 21:10:09MT - usagold.com msg#: 79652)
Hedging
Why are some investors surprised when S.African mines hedge ?If I owned Anglo,Durban et al ,I would hedge as far forward as I possibly could.I would borrow from central banks sell the gold and get the cash out of S.Africa .My country of choice would be Canada for investment in gold stocks.Why are some of you so inclined to believe that Mandela government is a benevelent government.Not one self governing people in Africa has a record of protection of Capitalism or Protection of private property,not even those that are rich in resources such as Nigeria (oil),also the SCAM capital of the world. Then there is Rhodesia that used to export food,now inports it.
You are just fooling yourself if you believe S.Africa is a safe investment.I believe this hedging business started in S.Africa and will continue as long as private property is at risk.If those communists in S.Africa want to confiscate mines ,they will have to deal with the banks that hold the mortgages and forward sales contracts that say the gold in the ground has a lein on it. If I owned those mines I would sell 30 years production forward and get the cash out.
Putting blame on those miners is like blaming the victum of a crime for his part,for without a victum there is no crime.
I believe the future in mining lies in Canada as a home base.The best place to mine is S.America where the mines are rich and labor costs are low because of devaluations.My idle cash would be left in Euros.
I realize my comments may be unpopular with some but if free speech has any value you must support my right to use it in order to protect your own.IMHO
Gimli_
(7/1/02; 21:02:27MT - usagold.com msg#: 79651)
Above Ground Silver Really Almost Gone??
http://www.sharelynx.net/Papers/SilverStocks.htm
I understand most silver goes into film processing, and that reclamation of silver in spent film is significant. So I just find it hard to believe that the world is really so close to being out of silver--the US have 'permanently' consumed 96.5% of all its silver over the past decades.
Can anyone else offer tangible proof this is all true?
mikal
(7/1/02; 20:56:24MT - usagold.com msg#: 79650)
Re: Currency intervention via Fed to assist Japan
Whatever the means that was used, the affect was to assist the Japan CB politically through dollar support(purchase) and yen weakening(sale). The Fed was widely seen to be using only token intervention, as noted in news reports this past weekend. Also at least one or two other major CB's participated; the total amount was less than 10% of a typical Japanese 1-day sale.
barnaclebob
(7/1/02; 20:55:44MT - usagold.com msg#: 79649)
@R Powell, Canuck
http://www.prudentbear.com/archive_comm_article.asp?category=Market+Summary&content_idx=13084
I speculate that the GE $2.1 billion referenced is related to the current essay appearing at PrudentBear.com, whereas GE has claimed $2 billion in nonexistent pension fund profits, to wit;
Nasdaq breaks down: PrudentBear.com
GE's name has been tossed about as a company where a closer look at the financials may be in order. It appears that GE recorded more than $2 billion from pension fund profits in 99 and 00 even though its pension investments were losing money. There's nothing non-GAAP about that, lots of assumptions are involved in pension accounting, a lot of them wrong, especially at the end of bull market. CNBC and Wall Street may have overlooked that risk in 99 and 00 however*****
This would be my guess! Caveat Emptor
Black Blade
(7/1/02; 20:51:35MT - usagold.com msg#: 79648)
The prosperous '90s -- a hoax?
http://money.cnn.com/2002/06/28/news/economy/90s_mirage/index.htm
Snippit:
NEW YORK (CNN/Money) - U.S. investors, learning every day that some of the same companies that swept them off their feet in the 1990s were cheating on them all along, are so jaded they're even starting to wonder if the '90s economic boom, a rock-steady source of comfort, was a big lie, too.
Black Blade: A lot of people are licking their wounds these days. Too many investors are "gun shy" now that they have seen their hopes and dreams disappear. As always, get outta debt (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. Prepare for the worst and hope for the best.
Canuck
(7/1/02; 20:45:13MT - usagold.com msg#: 79647)
For the debt followers, great essay
http://www.contraryinvestor.com/mo.htm
Black Blade
(7/1/02; 20:41:55MT - usagold.com msg#: 79646)
Re: Jimbo - Foriegn CB Interactions
Typically foriegn central banks will act on behalf of other banks. This is actually common. The Federal Reserve also keeps funds on account for several banks, including the Bank of Japan. These funds may be in the form of bonds, treasuries, cash, and even (gulp) gold. This is really nothing special though. When the BOJ asks that certain holdings be sold or bought they can do so through foriegn accounts held by other nations central banks (in this latest instance the ECB and Fed).
This is a simplistic answer of course, but I don't know all the gory details either. Cheers!
- Black Blade
Black Blade
(7/1/02; 20:35:28MT - usagold.com msg#: 79645)
Tough Year Sinks Pundits Forecasts
http://www.nationalpost.com/financialpost/story.html?id={952EF5D4-6CF1-4FFD-A7AB-859A27470C40}
Snippit:
The S&P 500 index is now in its 27th month of bear market territory, the longest since the early 1970s and the deepest drop, 35%, in five decades. Most major indexes, other than the Dow Jones and S&P/TSX composite, which are stacked with Old Economy and so-called slow-growth firms, have pierced Sept. 21 lows.
Six months ago, strategists were confident the worst was over. "Down markets don't last very long. In the past 60 years, the S&P 500 has never fallen three years in a row," said Standard & Poor's The Outlook at the end of 2001. Well, with the S&P down 14% in 2002, it is looking like another down year. Of course the soothsayers weren't expecting Enron, WorldCom, or Adelphia, or the staining of Martha Stewart's apron to sour investors' taste for equities. A whopping US$4.1-billion was pulled from U.S. mutual funds this week, a level of redemptions not seen since the five-week period after Sept. 11, when US$20-billion was siphoned from the markets.
Also this:
Scott Walters, a partner at Toronto-based hedge fund Delta One Capital Partners, passed along a new definition of EBITDA - Earnings Before I Trick Da' Auditors.
A few of the others we received:
EBIT = Earnings Before Irregularities and Tampering
CEO = Chief Embezzlement Officer
CFO = Corporate Fraud Officer
NAV = Normal Andersen Valuation
EPS = Eventual Prison Sentence
Black Blade: The pundits were saying that it will get better (always next quarter of course). It will actually get worse It's a "no brainer" because earnings are declining, corporations are buried under crushing debt, corporate scandals galore, Accounting scandals galore, reduced capital expenditures, lost consumer and investor confidence, etc. We live in "interesting times".
Speedy
(7/1/02; 20:30:32MT - usagold.com msg#: 79644)
8 seconds
I just want to thank you guys for all the info you guys put on the screen!!!I spend 1 hour a day learning about the things you guys talk about, so keep the info coming!!!! GO GOLD!!!!!
Waverider
(7/1/02; 20:25:01MT - usagold.com msg#: 79643)
Currency intervention costs 3.3 trillion yen
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020702a2.htm
Snip:
"Japanese monetary authorities have spent more than 3 trillion yen intervening in the currency market since late May, according to statistics compiled by the Finance Ministry. During the yen-weakening campaign, the exchange rate has gone from 125 yen.61-64 to the dollar on May 21, the day before the intervention began, to 119 yen.55-57 at 5 p.m. Monday.
Vice Finance Minister for International Affairs Haruhiko Kuroda said Monday the nation's exchange rate policy remains unchanged, hinting the ministry is prepared to continue intervening in the currency markets as the dollar continues to drop in value. A weak dollar and strong yen saps overseas earnings of Japanese companies, the main driver of the recent economic uptick."
Waverider: ~Jimbo - my apologies but I don't have the depth of understanding to explain the details of how the FR intervened in concert with the ECB. Maybe BB will comment. Cheers!
R Powell
(7/1/02; 20:11:50MT - usagold.com msg#: 79642)
Canuck
GE's cooked books
That "GE overstates profits by 2.1 billion" remark comes from a reliable poster who claims she heard it from Bill Murphy. This should not be difficult to verify although I tend to believe Goldilocks from the get-go!
How many times are we going to hear the disclaimer tomorrow, "the parent company of CNBC"....?
Kernian will be more tougue tied than usual. Maria will be downright POed.
Car manufactures next? Or should that be auto finance companies? Is it General Motors or GMAC? Maybe the BLS will have to restate some numbers? For them it's Revisions, not cooked books.
Anyone got any confirmation on this GE rumor??
Rich
Black Blade
(7/1/02; 20:05:16MT - usagold.com msg#: 79641)
Market Wrap Up - Puplava
http://www.financialsense.com/Market/wrapup.htm
What Happens When More Want What There's Less Of?
Snippit:
Gold funds were by far the stellar performer this quarter and since the beginning of the year, followed by short-selling funds. Where people have made money in this type of market is gold, shorts and foreign currencies, such as the Euro. Gold funds are finally starting to catch on with Main Street investors as more than a passing fancy. However, gold investing is still relatively obscure as a means of investment. Total funds invested into gold are only about $4 billion compared to the $3 trillion invested in all equity funds. The market's availability for investing in gold and silver stocks is so small it recently forced Vanguard to close its Precious Metals Fund, which took in $124 million of new cash this year, and now has $628 million under management. The consolidation in the gold mining industry has limited the number of stocks to invest in according to company officials. The fund only holds just 28 stocks, and 10 of its holdings account for 74% of the fund's assets.
You can imagine just how explosive these markets will become if only a fraction of that $3 trillion decides to move in the nation's 41, $4 billion in asset-sized gold mutual funds. This is a very select and thin market. That is why when gold and silver move, these companies will explode to the upside. It isn't because of a mania as so many idiots on Wall Street caution. It is because of scarcity of supply. Common sense tells you that when demand is greater than supply, prices rise. When that supply is scarce, as is the case with physical metals or with the choice of mining stocks, the price goes up. In this case, if even 5-10% of that mutual fund money moves into gold and silver, the prices of bullion and the equities are headed north of the moon.
Black Blade: I posted on the Vanguard Gold Fund closure this weekend. There are only a handful of PM funds and the overflow of frightened investors will push these funds and PM stocks beyond reasonable valuations. That leaves under priced physical metals as the remaining value for potential PM investors. PM shares typically run ahead of the PM metals so I would expect to see at the very least some "catch up" and in the current market an explosive march to higher levels.
Interstate
(7/1/02; 20:01:38MT - usagold.com msg#: 79640)
@ Slingshot - coin dealers
A real twist came my way today. My broker called me and asked if I wanted to sell any of my PMs. I said, "Are you kidding?" He was not kidding, but was in desperate need of gold. It is his opinion that there will not be confiscation, because "the regular people" are much more defiant than they were in 1933. Already, some municipalities have voted to not accept and be under The Patriot Act.
Interstate
YGM
(7/1/02; 19:44:22MT - usagold.com msg#: 79639)
S African News,...... re: Mining Regs.
http://news.independent.co.uk/business/news/story.jsp?story=310469
Mining giants dig heels in over South African seizures
By Leo Lewis
30 June 2002
The South African government is heading for a major fight with the country's biggest mining companies such as Anglo American and De Beers after proceeding with a controversial new law.
The showdown centres on a minerals Bill that would transfer historic ownership of mining rights to the state. It means the government could seize land if companies cannot prove they plan to use their deposit.
Mining companies have protested vigorously. Although all minerals are covered, the biggest effects will be felt by miners of platinum, diamonds and gold. Companies fear years of hard work could be undone and the country will become unappealing to foreign investors.
Anglo American Platinum and De Beers and other firms are understood to be attempting to prevent the Bill passing in its current form, though time is running out. They have criticised its lack of detail, saying it leaves too many questions unanswered for them to accept something so radical.
Despite court actions and intense lobbying by the miners, the law brainchild of the country's minerals minister, Phumzile Mlambo-Ngcuka has sailed over the first two major hurdles, and now only needs the endorsement of the Constitutional Court. Its aim to increase black empowerment has given the Bill considerable public approval.
Canuck
(7/1/02; 19:35:19MT - usagold.com msg#: 79638)
Nasdaq closes below 9-11
http://www.washingtonpost.com/wp-dyn/articles/A9389-2002Jul1.html
"The broader market also dropped sharply. The Nasdaq fell 59.38, or 4.1 percent, to 1,403.83 below its post Sept. 11 low of 1,423.19 on Sept. 21. It was the lowest close for the index since June 10, 1997, when it finished at 1,401.69."
Aristotle
(7/1/02; 19:31:50MT - usagold.com msg#: 79637)
USAGOLD
The pleasure, my good Sir, is entirely mine.
English/Comp was always my weak area. Prabably explains a lot... in all my life I've succeeded in getting across only two points, and those were both in shuffleboard!
Ari
Canuck
(7/1/02; 19:21:24MT - usagold.com msg#: 79636)
Monster 5-yr. 'Head & Shoulders' for the S&P
http://www.depression2.tv/chronicles/chronicles-big.html
Break 944 and it may be freefall time.
Golden Bear
(7/1/02; 19:19:37MT - usagold.com msg#: 79635)
Belgian (msg#: 79623)
"...As explained before, I still do believe that POG is used by many different "interests" for different purposes,..."
Well said Sir Belgium,
and it should be remembered that this applies without exception to all tradable goods and commodities. This is the cause for the shifting of value vs price of goods and creates confusion amongst market participants. This is the reason we have witnessed the simultaneous fall of US dollar and POG - which seems absurd and inexplicable to so many, but is normal market action, no matter how much we "gold advocates" want to blame the cabal for the recent so called suppression of the POG.
As Sir Ari might say, Gold - just got more inconveniently heavy for the price, temporarily...
USAGOLD
(7/1/02; 19:16:04MT - usagold.com msg#: 79634)
Aristotle. . .
As I remember it:
" Gold - - the investment "for" a lifetime!"
That preposition being an important one.
By the way, if I haven't said it as yet, thanks for returning. One of my favorite all time posters, and one I quote frequently to new clientele.
MK
Aristotle
(7/1/02; 19:11:58MT - usagold.com msg#: 79633)
Sir Belgian, I'll join you
Belgian (msg#: 79623)
You concluded your commentary with the following comment and question:
"up until now, most (all) commentators just see Gold (POG) as an automatic dollar-exchange, *compensator* . I think they have it wrong, this time ? Am I really alone with this upside down vieuw ?"
Not alone, my dear friend, not alone! I, too, see Gold as something much more than merely an "anti-dollar" (i.e., with each being like a small child on either end of a teeter-totter.) Gold will surely rise against all *all* ALL currencies, making it <*gasp!*> not money, but rather, <big smile for Belgian> an Investment of a lifetime. Make that, THE Investment of a lifetime.
So, now that I've done my part to answer your question -- "No, you're not alone, and not without a friend," let me move onward to the substantive part of your post.
I applaud your "two fly" observation, and want to draw it out for further notice and appreciation.
---START---
The euro has no less ambition than to dethrone the US$. Therefore the euro-builders prefer to "guide" the dollar-leavers into the euro-currency as dollar alternative. So it is very convenient, at present, to block (?) to a certain extend the VOG alternative, up until a more appropiate moment (dollar-loss-compensation)!?
Two flies in one slam. POG rise (290$ > 326$) urged/signaled dollar-weakness and the desire to enhance its downtrend against the euro. Once the dollar-holders understood the message (Soros), the Gold-alternative (dollar-escape) should, temporary, remain less attractive. At the same time (fly 2), the 330$/354$ forward sales, danger zone has been respected (postponed-slowed down).
As explained before, I still do believe that POG is used by many different "interests" for different purposes, but serving, temporary, mutual interests...FOR THE TIME BEING !!!
----END----
And naturally, here's where we are wise to heed Sir Townie's advice today:
"Prepare your portfolio for what will likely be the greatest monetary transition the world has ever seen."
Belgian, you go onward to make the very important point that, in relative terms, the supply of physical Gold we are capable of concentrating above ground has largely been acheived, whereas the modern financial and economic activities in a (best case scenario) peaceful and prosperous world have only just scratched the surface of printing money on terms of credit, collateral, and debt. While you've focused on the outstanding dollar float, this isn't limited to a dollar-only phenomenon. Although I'll grant you, the dollar surely dominates. To be sure, there's a world of nondollar-denominated debt also that may be added to the buying pressure on Gold's grand "coming of age" in an enlightened world. The Investment of a lifetime.
Gold. Get you some. --- Aristotle
USAGOLD
(7/1/02; 19:10:43MT - usagold.com msg#: 79632)
Congrats. . .
Congrats to my old friend, Lenny Kaplan, on a good call.
Gold up $4 from a trader induced correction. Off by four hours, Lenny. You're slipping. MK
Shapur
(7/1/02; 19:02:44MT - usagold.com msg#: 79631)
Gold
"Gold-- its just a reverse split on the US Buck"
Canuck
(7/1/02; 19:00:02MT - usagold.com msg#: 79630)
Check the 18:53 over at next castle
G.E. overstated profits by 2.1 billion.
Let's find out about this one!!
R Powell
(7/1/02; 18:30:07MT - usagold.com msg#: 79629)
Belgian
Interesting thought, "It was Gold (POG) that forced the dollar down!"
Most would say it was the dollar's decline that forced the POG up, no? And why did the dollar decline against other (also fiat) currencies? Many would point to lower real interest rate returns in dollar denominated investments after the Fed. lowered rates. The dollar's decline is also connected somehow to a declining inflow of dollars entering the US economy and stock markets but whether the dollar's decline is now a cause or effect of the declining markets is not clear, at least in my cloudy brain. Likewise, does the up in POG cause the down in the dollar or is it the down in the dollar that causes the up in POG? Do we have a chicken and egg question?
I don't have any answer but will add another question. (evil smile!) The price of mining company stocks (XAU or HUI) started rising before either the POG started up or the dollar started down. They started after the Nasdog cracked in early 2000. What was known to start these before any POG up or dollar down? I don't see the XAU upside as causing anything but as foretelling something. But how did they know? Did the lowering of interest rates (induced by the bubble burst)indicate the coming of a weakening dollar and POG upsurge both of which were then predicted by the mining stocks?
Can we then say that a bursting market bubble caused by "irrational exuberance" or mania will beget a rally in precious metals? Or was it the Fed's response to the bursting bubble that will determine if a rally is forthcoming? But the response (monetary inflation) indicated price of goods inflation to some while others saw deflation (money gone to the big vault in the sky). Now I'm getting thoroughly confused. Cause and/or effect?
Belgian, I'm not disagreeing with your statement. It makes perfect sense that when $1000 are needed to purchase one ounce gold, then the old buck just ain't gona be what she used to be! By then the dollar probably won't be a "green"back anymore either. I think I'll save a few green ones to show to the next generation.
Rich
slingshot
(7/1/02; 18:23:44MT - usagold.com msg#: 79628)
Coin Dealers Wanting.
****************************
Went to two coin dealers today and they both were out of 1oz Gold Eagles. One half oz and lower were limited supply at both stores. The first dealer was completely out of silver and the second had 1 ozs waffers but all those Silver Eagles I have talked about in the past were gone. 1986- 2002 sold at the book price and I know some dates went for $16.00 plus. Both dealers said no body is selling them anything, business is good and waiting on their orders to come in the mail.
Slingshot-----------------<>
Canuck
(7/1/02; 18:18:23MT - usagold.com msg#: 79627)
@ sector @ Belgian
Good post (79604)
"How much gold is "Left" to continue the manipulation? "
Care to hazard a guess? The RBC report again mentioned the 'double counting' by CB's. It seems to me that some CB's report their gold holdings more visibly than others. Also, going by BB's recent (a month or so ago) about offical held gold (via the WGC) is there any way to guessimate the proportion of gold 'in the vault' and gold 'on loan'. The 'offical' held gold of some 29,000 tonnes may be split into the 2 above fractions at an alarming figure.
Belgian:
"Whatever the real debt figure might be...6 Trillion or 38 trillion dollars or any other un-official figure or estimate (virtual digits). DEBT KEEPS GROWING AND NO FUTURE PROFITS CAN EVER REPAY (or even service) A FRACTION OF THIS GROWING DEBT !!!"
I remember as a kid (19 yrs) hearing about millionaires. A million bucks was a unheard of amount of money. When was the first billionaire declared? In the same year (1980) gold had its stellar run. So millionaires in the 60's, 70's and now billionaires, and lots of them in the '90's, yet let's say for simplicity that gold is 'flat'. How does that happen? Money has piled on with reckless abandon, in the case of millionaire to billionaire a thousand times, and gold is still X hundred dollars. It doesn't seem to make alot of sense. Pop, candy, groceries, gas, cars, houses, EVERYTHING has gone up 5-fold, 10-fold, MORE and gold is 'flat'.
I don't understand this?
Even taking out the 1980 spike and using the $42 number, a 10-fold increase is $420. Why is gold so cheap?
I'd like to see an inflation 'graph' of items over the last 30 years, something like this:
1972............2002......................Multiple
$30.............$300 week of groceries.....10
$0.15...........$1.50 gas..................10
$2000...........$20,000 car................10
$20,000.........$200,000 house.............10
$5000...........$50,000 salary.............10
$42.............$294 gold...................7
A nice BIG, ACCURATE list. Have you seen such a thing?
What's that 7 crap?
;)
Mr Gresham
(7/1/02; 18:12:18MT - usagold.com msg#: 79626)
Belgian
In FOA's absence, you sure pack a strong punch! Keep it up, and thanks.
(Isn't it the interesting mark of a mature commentator, when he's ahead of the curve, to keep on exploring and reaching for understanding, and cogent expression. And then, when things are confirming what he's said -- when events are making his early "thoughts" into bygone histories -- he holds silent. No need to rush in and claim the laurels of "victory".)
We'll be seeing, soon enough, the accuracy or otherwise of those "thoughts", on such original ideas as paper/physical separation, and on oil for Euro changeover. (Amazing, too, the reticence of other commentators to take on these topics for corroborative examination. You would think they'd be the first?)
How long? Not long now...
aussie
(7/1/02; 18:10:43MT - usagold.com msg#: 79625)
West Australian Newspaper Article
Just sat down to breakfast and opened the West Australian Newspaper July 2nd. In the Business and Market Section the report said, "Gold stocks fell with the gold price. Mr. Turkington (WA State Manager of Tolhurst Noall) said the decline in gold was an indication of strength in the US dollar and that US market was possibly on the mend".
Just thought this would be of interest to demonstrate how Mum and Dad investors in WA are presented with the market forces.
As an aside, I received Placer Dome Inc. offer dated 27th June to AurionGold shareholders yesterday. Still appears they are positive about the transaction which is scheduled to close on 12th July.
Aristotle
(7/1/02; 18:08:07MT - usagold.com msg#: 79624)
Two questions from today's discussion
Hipplebleck (msg#: 79603)
Regarding the little dip in the price of Gold, you said you "suspect that some South African miners are selling forward to cash in on reserves that they fear they will lose."
How would that work in practice (what's the settlement and cashflow) and who's buying? For that matter, what exactly are they buying? (Maybe I'd be a buyer too if the discount were deep enough, but hell, I can still get Physical Gold at these prices.)
goldquest (msg#: 79610)
Regarding the Fed's intervention "on behalf of the Bank of Japan," you said, "thought the FR was formed to look out for the U S interests, but I guess they will work for the highest bidder. The Fed should be disbanded immediately!"
Please forgive me if I don't quite follow your meaning. Will you explain?
As I see it, if we are to buy into the so called "strong dollar policy" and the associated rhetoric, since when is it NOT in the U.S. interest to seize upon the Japanese's excuse for a little dirty float action to prop up the value of the dollar at the expense of the yen; done more than likely through reciprocal currency arrangements -- or let's call them CB "swap facilites" if you prefer?
Seen this way, is it any wonder the ECB was not to be left out, saying something like "Hey, we want in on some of that sweet action, too. Ahhh... er, we mean, there's a larger market trend of euro appreciation that has to be addressed within the context of your dollar/yen shenanigans. Yeah, that's the ticket!"
My point is this: go easy on the boys in the marble shack. They're buying you time to get your mind around worldly financial events and to buy Gold cheaply if you have the wherewithal.
Our government knows, as well as any other, that no nation ever rises to (or maintains) greatness on the backs of impoverished citizens.
Gold. Do your multipurpose duty and get you some. Good for you, good for your country. --- Aristotle
Belgian
(7/1/02; 17:37:11MT - usagold.com msg#: 79623)
Weak US$ AND weak POG......hahaaaaa
A contradictio in terminis or paradox ? No, not from my lilliputan standpoint ! It is the "euro" that makes it different today...
The dollar exchange-rate (dollar-index) is on its way to the 1995 lows, in phase I. Doubts anyone ? If yes, then explain the swift and vigorous decline of recent. Sign on the wall for an irreversable trend. But...
Where to hide ? And here we land at Euroland's ivory tower concept builders. The euro's top priority (recently firmly restated), is its expansion from the present 300 million Eurolanders to 500 million...and this IN ONE BIG GO !? The euro has no less ambition than to dethrone the US$. Therefore the euro-builders prefer to "guide" the dollar-leavers into the euro-currency as dollar alternative. So it is very convenient, at present, to block (?) to a certain extend the VOG alternative, up until a more appropiate moment (dollar-loss-compensation)!?
Two flies in one slam. POG rise (290$ > 326$) urged/signaled dollar-weakness and the desire to enhance its downtrend against the euro. Once the dollar-holders understood the message (Soros), the Gold-alternative (dollar-escape) should, temporary, remain less attractive. At the same time (fly 2), the 330$/354$ forward sales, danger zone has been respected (postponed-slowed down).
As explained before, I still do believe that POG is used by many different "interests" for different purposes, but serving, temporary, mutual interests...FOR THE TIME BEING !!!
Forward sales possible debacle...extension for US$ lifetime...and the subtle "dept" building for the expansionist euro, still aiming at oil for euro (part of it).
On top of all this, Gold's basic fundamentals, have landed in pole position : Again I want to refer to the past 30 years (1971 > 2002). First of all, the bulk of underground Gold has been mined and not much (percentage wise) is to be added for decades to come. The in-accurate figure of total aboveground refined of 144.000 (must be more) is nicely distributed amongst 1/Official Giants (CBs) - 2/Private Giants (discrete) - 3/Jewelry (scrap provider) - 4/Underground Gold, variable amounts to be mined profitable in function of POG and mining currency costs (10 years ???).
May we conclude that the existing stashes of Physical in Possession will "percentage wise", not change dramatically in the next decades !? BUT...the globe's total population, debts and fiat stashes have been growing at astronomical proportions against the yellow, becoming scarcer and scarcer. There is NOT enough Gold to keep on distributing the Physical, amongst the growing billions of economic actives and/or the existing different Giants. Price changes will cause re-distribution patterns (concentration).
Is it co-incidence that since 1971 up until now, POG and DOW, multiplied by ten (10) (give and take a little) ???
1971 : POG=41$ and zigzagged to a balanced pricing around the 400$ (1995) when the biggest manipulation started and replaced normal *management*. The DOW going from the 1960-1980 horizontal-average of 1.000 to 10.000 plus !
And here we are at this very crossing point (2000-2002), where, inevitable, *DRAMATIC AND FUNDAMENTAL CHANGE* is in the air !
Gold, the REAL store of wealth and the REAL future, purchasing power, shall be valued, proportionate to the accumulated DEBT (TOTAL DEBT) ...US$ debt. Whatever the real debt figure might be...6 Trillion or 38 trillion dollars or any other un-official figure or estimate (virtual digits). DEBT KEEPS GROWING AND NO FUTURE PROFITS CAN EVER REPAY (or even service) A FRACTION OF THIS GROWING DEBT !!! Yes, indeed Sir Douglas.
But it is that (approximate) factor-10 for DOW and POG that caught my attention when staring at those LT-charts. As if the Giants, organized their VOG in function and lockstep with other (more speculative) opportunities (stocks/bonds).
This regardless of the offer/demand fluctuations of the commodity gold, during these 30 years. Isn't this evidence that Gold as an Investment does exists (always has) !? And that the WA was (still is) the action taken by the Official Giants...when things (POG) went out of hand and too far from that x10 factor ?
Isn't this a kind of evidence that the Golden store of wealth and Real future purchasing power has always been there to compensate, gradually, in anticipation, for that final reckoning/collision, with THE Debtberg ?
The WA emergency action wanted to prevent Gold dissapearing fom the radars and make too many (little) Giants, possibly panic ? The *Washington*, thing in the agreement, meaning that a POG below 200$, could have broken Gold's spine ? Not even wanted by Gold's antithesis : the US$.
It was Gold (POG) that forced the dollar down ! And up until now, most (all) commentators just see Gold (POG) as an automatic dollar-exchange, *compensator* . I think they have it wrong, this time ? Am I really alone with this upside down vieuw ?
misetich
(7/1/02; 16:23:06MT - usagold.com msg#: 79622)
Global Corporate Defaults Spike During First Quarter of 2002
http://www1.standardandpoors.com/Forum/MarketAnalysis/GlobalDefaultAndRecovery/Articles/050702_firstquarterdefault.html
Snip:
The rate of global corporate default spiked during the first quarter of 2002 due to 38 defaults in Argentina, driving the quarterly issuer-based speculative grade default rate to 4.11%, its highest level ever. The Argentine corporate defaults were largely the result of pesification, the term used to describe the Argentine government's de-dollarization of all transactions and redenomination of those transactions in pesos. Excluding the Argentine corporate defaults, the global rate of default sustained the high pitch reached in 2001 with 2.25% of speculative-grade issuers defaulting. Defaults are expected to continue at their current level through mid- 2002, at which time the default rate should begin to gradually diminish. By year- end the annual rate of default is expected to exceed that of 2001.
............
First Quarter 2002 Results
Globally, 94 companies defaulted on $32.4 billion of rated corporate bonds during the first quarter of 2002 (see table 1). This is the largest number of issuers ever to default during a single quarter (see chart 1), exceeding the previous high of 59 defaulters during the fourth quarter of 2001. The dollar amount is lower than the record $36.9 billion that defaulted during the first quarter of 2001 (see chart 2). Historically speaking, both of these quarterly numbers are extremely high, as they both exceeded all annual default figures for years previous to 1999 (see charts 3 and 4). The 38 first quarter Argentine defaulters represented $1.5 billion of rated debt.
...........
When Will Defaults Peak?
The first quarter of 2002 was unique in that more than half of the rated companies from Argentina defaulted. This came on top of global default rates that were already very high, creating a temporary spike. As the Argentine defaults were a one-time event, Standard & Poor's does not expect to see a repeat of the first quarter's exceedingly high default rate. Taking Argentina into account, it is safe to say that defaults peaked during the first quarter of 2002.
Misetich
OK S&P back to your research - and this time don't forget to include Brazil, and the wipeout of 1 1/2 trillions in US market value in the last few weeks and continued deterioriation of investor confidence in corporate America, and the continued Japanese recession
Got gold?
misetich
(7/1/02; 16:06:07MT - usagold.com msg#: 79621)
Relax: Japan Won't Bring on Financial Armageddon
http://www.businessweek.com/magazine/content/02_27/b3790082.htm
Snip:
In global finance, it has long been the sum of all fears. What if one of Tokyo's $1 trillion money- center banks keels over, triggering a cascade of other failures among Japanese companies and lenders. Banks, life insurers, and companies frantically shore up their balance sheets by cashing out their U.S. Treasuries and stocks, causing the dollar to crater and U.S. interest rates to spike. Big Japanese lenders default on their end of complex derivative transactions, exposing U.S. and European banks to horrendous losses. Chaos ensues.
That prospect is why big guns in Washington such as Treasury Secretary Paul H. O'Neill and Federal Reserve Chairman Alan Greenspan nag Tokyo about fixing its decade-long banking crisis before it's too late. With signs that Prime Minister Junichiro Koizumi's government has lost interest in reform, the calls have become more shrill. "The time for half-measures and postponement has passed," warned O'Neill last month.
............
Take U.S. Treasuries. The Japanese do own 27% of the $1.2 trillion in Treasury bills, bonds, and notes held by foreigners, but other big players such as Britain, Germany, China, and the deep pool of U.S. pension and mutual funds, could pick up the slack if the Japanese pulled out. Also, only the most cash-strapped Japanese banks would forsake the healthy returns on U.S. Treasuries. And foreign investors hold only a measly 5% of Japan's $4-trillion bond market, which could take a beating if the Japanese sold their domestic bond holdings to raise cash.
As for the stock market, a bank-induced crash in the Nikkei would hurt but wouldn't be catastrophic. Back in 1990, the Japanese markets represented 30% of global market capitalization. Now, it's only 10%. And there are only 36 foreign companies listed on the first section of the Tokyo Stock Exchange, vs. 127 in 1991.
What about the loans foreign banks made to highly indebted Japanese companies that could get cut off at the knees by their cash-strapped domestic bankers? Well, in a two-year period ending last September, international banks' loans outstanding to Japanese borrowers fell by 16%, to about $513 billion, and the loans are mostly to blue chips with strong balance sheets. As for the big, highly leveraged derivatives deals that might leave foreign banks burned if a Japanese counterparty bank defaulted, Japanese banks represent only 10%, or $100 billion, of that market.
It's true that by dithering over its banking mess and keeping its economy in low gear, Japan is robbing the rest of the world of potential trade and investment. O'Neill figures that Japan sacrificed $5 trillion worth of economic output over the past decade by growing an average of 1% instead of 3%. But forget those overwrought predictions of a global market firestorm touched off by a failure in Japan's financial system. It just isn't going to happen.
JULY 8, 2002
INTERNATIONAL BUSINESS
By Brian Bremner
Misetich
It sounds like Bremmer is tailored made for either US Treasury or Federal Reserve- A court jester
"Take U.S. Treasuries. The Japanese do own 27% of the $1.2 trillion in Treasury bills, bonds, and notes held by foreigners, but other big players such as Britain, Germany, China, and the deep pool of U.S. pension and mutual funds, could pick up the slack if the Japanese pulled out"
OK - now that you've had your -daily funny - get going and
get some gold!
YGM
(7/1/02; 15:54:19MT - usagold.com msg#: 79620)
RBC Report Re-Visited......Because it needs to be......(FOR THOSE WITH DOUBTS ON GOLD OWNERSHIP)
Keep it uppermost in mind...THIS IS WHAT THE INSIDERS REALLY THINK ABOUT GOLD
***NOTEWORTHY IN PARTICULAR, IS THE SECOND LAST PARAGRAPH**
RBC GLOBAL INVESTMENT MANAGEMENT INC June 21, 2002
Clearly, with gold stocks on a tear as the gold price moves laboriously forward battling the fervent attempts to suppress it, one must be comfortable with the notion that the gold price is going to overcome the forces that are aligned against it. What is happening today is no different than what was happening in the late '60s and the very early '70s, when the Gold Pool was in existence and the gold price was contained at $35 per oz. by a consortium of central banks that dumped a considerable amount of gold to keep prices down. Today, instead of the overt action of yesteryear, it is covert because the market is allegedly free, and it has entailed a different mechanism, which has resulted in a humongous physical short position. In addition, there has been an enormous amount of derivatives piled on top, which could make the ultimate upside explosion all the more spectacular.
So the question obviously is: "Will the gold rally ever begin?" The following arguments emphatically suggest that it will more than rally; it will explode to the upside.
1.Unsustainable Supply/Demand Imbalance
Mine production has flattened out at 2,600 tonnes and is beginning to fall due to a lack of exploration, falling grade at many mines due to previous high-grading, and the closing of older mines as they run out of ore. It has been estimated by Beacon & Associates in an exhaustive study that if gold prices were to remain under $300/oz., production will fall in the neighborhood of 25% over the next 5 to 7 years. Scrap supply tends to average about 600 tonnes annually. Demand is currently estimated to be roughly 4800 tons (primarily jewelry) without any investment demand from the Western world. The present deficit has been met by direct central bank sales (roughly 400 tonnes per year) and central bank leasing for mining hedges and financial speculation.
2) Unsustainable Short Position
Central banks have ostensibly lent increasing amounts of gold to earn interest on their reserves. However, when one lends at an rate (less than 1% generally), the question arises as to whether there may be another motivation. As a rising gold price stands as a direct repudiation of their alleged responsible monetary policy, perhaps this is the real reason they have been so aggressive in this area. Bullion banks have borrowed gold from the central banks for their own accounts and those of various speculators, such as hedge funds and financial institutions (the carry trade) and for producers (mine hedging) and have used derivatives to limit their risks and generate additional income. The loaned gold has been sold into the physical market and is now in jewelry, primarily in the Middle East, India, and other parts of the Far East. The size of the short position, officially acknowledged to be more than 5,000 tonness by the bullion bank apologists, is thought to be well over 10,000 tonnes and may exceed 15,000 tonnes. To put this in context, this constitutes between one-third and one-half of all central bank gold, and the vast majority of it is no longer accessible.
3) Unsustainable Low Inflation
The gold price has a tendency to rise at the first whiff of accelerating inflation. CPI inflation has been unrealistically low due to the very strong dollar, which has underwritten vicious foreign competition and removed pricing power in many sectors. However, in the final analysis, inflation is a monetary phenomenon and the aggressive interest rate cuts and monetary expansion to avoid recession/deflation is expected to result in re-inflation. Year-to-date, the liquidity injection is more than $1 trillion and MZM has grown by 16.5% in the past year. To avoid debt default, the Fed must err on the side of ease, virtually ensuring upside pressure on the CPI. In addition, the "war on terror" superimposed on Bush's mammoth tax cuts and a four-year government real rate of spending increases that is the greatest since the '60s portends large U.S. government deficits, yet another recipe for inflation.
4) Unsustainable U.S. Dollar
The U.S. dollar has been levitating for a long time, but the underlying fundamentals continue to erode. The U.S. current account deficit exceeds $400 billion annually, and the continuation of this chronic deficit turned the U.S. into the world's largest debtor as most of these deficits are being recycled into U.S. debt instruments. However, foreign appetite for U.S. securities appears to be ebbing and the chart on the U.S. dollar looks very toppy . Gold is already in a bull market in U.S. dollars, and an established bull market in every other currency. If the reserve currency, the U.S. dollar, falters, gold could well be launched on the upside as people recognize its status as the only "true currency."
5) Unsustainable Prices for Financial Assets
Western world investment demand will be the true fundamental that drives gold much higher. Gold tends to be counter-cyclical and investors buy it when financial assets begin to lose credibility. Ownership and pricing (P/E) of financial assets are at historic highs and if inflation accelerates, the U.S. stock market is extremely vulnerable. The ratio of the S & P 500 Index to the price of gold reached an all-time high, by a considerable margin, in 2000, but this parabola have been broken and a downward trend is in effect. At the margin, if a small amount of money is moved from financial assets into gold, the price effect on gold will be dramatic and the ratio will continue to move in gold's favor.
6) Increasing Evidence of Unsustainable Gold Price Manipulation
a. Aggressive gold lending, which from an economic perspective is indefensible, has filled the supply/demand gap.
b. NY Fed gold has been mobilized when the gold price is rising.
c. Timing of Exchange Stabilization Fund gains/losses corresponds to gold price movements.
d. Audited reports of U.S. gold reserves show unexplained variances.
e. Minutes of Fed meetings confirm officially denied gold swaps.
f. Rules on gold swaps revised but subsequently denied. However, individual central banks have repudiated the denial.
g. U.S. gold reserves have recently been re-designated twice, initially to "custodial gold" and latterly to "deep storage gold."
h. Statistical analysis of unusual gold price movements since 1994 indicate high probability of price suppression. The invalidation since 1995 of Gibson's Paradox -- that gold prices rise when real interest rates fall -- suggests that the real manipulation began then.
i. NY gold price movements versus London trading defy odds.
j. Timing of huge increases in bullion bank gold derivatives is consistent with gold price declines.
k. Rapid decline in U.S. Treasury holdings of gold-backed SDR certificates is not explained.
One or two of these factors could be viewed as random, but the full body of evidence is overwhelming.
It would appear that gold is beginning to be viewed as money again. Gold is the only monetary asset that doesn't represent somebody else's liability, and with U.S. real short-term interest rates now in negative territory, there is no disadvantage in holding gold. Those with a vested interest in containing the price of gold -- central banks, bullion banks, heavily hedged gold companies -- will not die easily, but the tide is moving strongly against them and the embedded short positions could catapult the gold price higher while imperiling the future of those holding the short positions.
The great rallying cry of the bears is the mobilization of even more central bank gold to the tide. Recently, Ernst Welteke of the Bundesbank has spoken publicly of the Germans selling gold after the initial Washington Agreement limiting European central bank gold sales to 400 tonnes per year expires in late 2004 with the intention of redeploying into stocks and bonds. Formerly, commentary and action of this sort by central banks (the announcement of Swiss sales, the initiation of English gold auctions, etc.) devastated the gold market but this elicited little more than a yawn. An astute gold analyst in South Africa postulated the reason why, perhaps. There are strong rumors that Deutschebank has borrowed an enormous amount of gold (more than $10 billion worth) from the Bundesbank over the years to facilitate the carry trade, producer hedging, etc. and it is becoming apparent that there is no way they will be able to pay it back. Perhaps, to make good on their gold loans, they will reimburse the Bundesbank with stocks and bonds and Mr. Welteke is readying the German public for with his statements.
In addition, there are enormous dollar reserves building up in the Far East, particularly in China, and the Far East has acknowledged being significant buyers of gold. So the flow of central bank gold is not only one-way. Even the Russian Central Bank is on the buy side. The shibboleth of central bank sales will undoubtedly be trotted out again, but it is losing its sting, particularly if the possibility that as much as half of all the central bank gold may already be in the market starts to become more widely recognized.
In addition, in the '70s, when gold was rising sharply in price, central banks, after having been heavy sellers at $35/oz., sold little or none at higher prices. Central bankers are no different than the momentum players; if the price is rising, they are more likely to be buyers than sellers.
One last observation concerns the gold share price action prior to the explosion of gold prices in the '70s. Then, as now, gold stocks rose to prices that made no sense to observers who had a static view on gold prices, but the stock buyers knew that sharply higher gold prices were inevitable. I suspect that is the case today, particularly when one examines the foregoing evidence.
**How much convincing does the Gold Shy spec need beyond this???....YGM.
mdgc
(7/1/02; 15:53:16MT - usagold.com msg#: 79619)
Tibet
Re: Tibet
I cannot tell the Chinese tourists from the Chinese residents in Tibet. They all look the same to me. There are lots of Western tourists: older Americans and Europeans in group tours; college girls with tattoos; Aussies and New Zealand trekkers, folks like me.
There was plenty of destruction during the Cultural Revolution; my understanding is that it was not Chinese, but Tibetan Red Guards that did the destruction, no doubt following what was happening elsewhere in China.
Yes, the people are very poor. My sense is what the Chinese first goal is to improve the standard of living of Tibetan in order to reduce the support for the Dalai Lama and Tibetan independence.
mdgc
Jimbo
(7/1/02; 15:37:52MT - usagold.com msg#: 79618)
@Waverider & Black Blade
Help me understand, please, exactly how the U.S. Federal Reserve intervened in foreign exchange markets on Friday. (The Globe and Mail article really doesn't specify.) Let's see, if I read correctly, Black Blade, the Japanese Central Bank fiddled with the Yen to retain a cheaper exchange rate relative to the dollar. (Which, in turn, stalled the dollar's slide and depressed the price of gold.) Is that correct? Could you or anyone else surmise how the Fed worked with the Japanese Central Bank to accomplish this task? And how could it be good for the U.S? After all, wouldn't a somewhat devalued dollar help U.S. exporters make more money? Of course, the Japanese exporters would make less. But, if memory serves, the Japanese exporters screwed us in this regard during the early to mid-90s?
Nomad
(07/01/02; 15:17:02MT - usagold.com msg#: 79617)
China
re : mdgc You're welcome and thank you ! :)
I should mention one thing about Tibet. I have never been there so I do NOT speak from experience ... but when I confront my Chinese friends about Tibet, something I have done many times in PUBLIC in my classes, their explanation is that the Tibet people are VERY poor and that it is the economic help of the Chinese government which keeps them going.
They also point out that better than 90 percent of all tourists to Tibet are Chinese and this is the principal economic activity in the region. This is probably true, in that all the Chinese cities I have been in are regularly visited by itinerant bands of Tibetans selling knives and jewelry and cow skulls, the women ususally also with a baby strapped to the back.
As an example, the mother of one of my best students is off to Tibet to do the tourist thing this weekend.
My basic impression is that the (Chinese) government would love to preserve Tibet the way it is, as during the Cultural Revolution the Chinese managed to destroy 99 percent of all antiquities that they had and not much is left to look at, whereas many parts of Tibet are still intact.
Waverider
(07/01/02; 15:07:17MT - usagold.com msg#: 79616)
YGM - Solar Eruption
The eruption today was 30 times the length of Earth's diameter. If aimed at Earth, it could destroy the magnetosphere. I believe that Black Blade posted a story on one some time back with a title that read..."Sun Farts but Earth not Downwind". Thanks for the photo!
Pizz
(07/01/02; 15:03:35MT - usagold.com msg#: 79615)
Detterance
Just watched the HBO movie Deterrance this weekend. Good flick with a not so subtile message. For those who haven't seen it, the basis is a nonelected president who has to make a nuclear decision from a diner in Colorado (he's snowed in during a crisis)after Iraq makes a move on Kuwait with the US undermanned and concentraiting on the Eastern Pacific.
Thought of it again when I read a comment on another board stating kind of tongue in cheek that the way things are going we need another major terrorist event inside the US to be able to explain away all the current problems and blame for the upcoming (further) collapse.
Not so tongue in cheek with me,
Pizz
YGM
(07/01/02; 14:43:46MT - usagold.com msg#: 79614)
Canada Day Fireworks Display ........(real time)
http://sohowww.nascom.nasa.gov/data/realtime/javagif/gifs/20020701_1319_eit_304.gif
Awesome solar event today....check out lower left of Sol.
MO VER MEG
(07/01/02; 14:32:49MT - usagold.com msg#: 79613)
the hoople
On a hot, windy, drought stricken day on the high plains, your post was just what I needed - thanks for the uplift.
The Hoople
(07/01/02; 14:11:33MT - usagold.com msg#: 79612)
Martha Stewart in Hell's Kitchen
I just thought I would beat the New York Post to that headline. I look at the gold bashing the last few weeks and wonder what would be happening right now if it were hanging around $330. Worldcom would have maybe just done the trick to force the cabal off the cliff. Wonder how GE, IBM, AOL,Cisco, JPM, and the titans will survive possible re-statements? I've never seen a more favorable climate for gold ownership in my lifetime. Like the old saying a paranoid is someone who truly understands the situation.
Waverider
(07/01/02; 14:06:13MT - usagold.com msg#: 79611)
U.S. intervened for Japan, O'Neill says
http://globeandmail.com/servlet/RTGAMArticleHTMLTemplate/C/20020701/woneill?hub=businessBN&tf=tgam%252Frealtime%252Ffullstory_Bus.html&cf=tgam/realtime/config-neutral&vg=BigAdVariableGenerator&slug=woneill&date=20020701&archive=RTGAM&site=Business&ad_page_name=breakingnews-business
Snip:
"Treasury Secretary Paul O'Neill confirmed on Monday that the U.S. Federal Reserve Board had intervened in foreign exchange markets on Friday on behalf of the Japanese government.
The Japanese Ministry of Finance said on Friday that the Bank of Japan had intervened in the foreign exchange market, with the European Central Bank and the U.S. Federal Reserve also intervening on its behalf."
Waverider: Goldquest - I just read that too. Here's a link.
goldquest
(07/01/02; 13:49:57MT - usagold.com msg#: 79610)
The Federal Reserve
intervened on behalf of the Bank of Japan, last Friday, says Paul O'Neill. I thought the FR was formed to look out for the U S interests, but I guess they will work for the highest bidder. The Fed should be disbanded immediately!
sector
(07/01/02; 13:49:02MT - usagold.com msg#: 79609)
The Friday Close...Current Spin
Why Would Any Investment House Wait Until an Illiquid Time Slot...
...to sell their 20,000 contracts?
The obvious answer is that they wished gold to fall and didn't care about losses [Which were doubtless reimbursed by the Fed]. It isn't rocket science.
The cabal didn't have the jack to carry through today due to what Leonard Kaplan calls the "Resolute large spec longs". Who BTW seem to be growing in number and volume played as time passes. We shall see as the week progresses.
Looks like the Dow and Nasdaq are doing a pretty good Mike Tyson imitation right about now.
Also the XAU [Complete with GFI added] and the HUI are up over 3%...shhhh better not say it too loudly.
Black Blade
(07/01/02; 13:37:48MT - usagold.com msg#: 79608)
Don't panic, gold's run still intact
http://www.mips1.net/MGGold.nsf/Current/BAC5A45CCAF111F1C2256BE90053134D?OpenDocument
Snippit:
Stuart Leslie, chief bullion trader at Standard Corporate and Merchant Bank in Johannesburg, said the fall in gold late Friday in New York trade, was caused by one of the large bullion banks exiting a long position on Comex. Analysts and bankers would not divulge the identity of the mystery seller, but one rumour doing the rounds was that Morgan Stanley had cashed in on a stale position after lacklustre bullion price action over recent weeks. Funds remain 3.8 million ounces long on Comex, a potential overhang that remains a bearish indicator for the time being while the metal struggles to gain upside momentum.
Metal analysts believe the fall in the price of Friday, which triggered a series of long liquidations, was helped along by the Japanese Central Bank massaging currency crosses to retain a favourable (read cheaper) exchange rate relative to the dollar, to keep exporters competitive. They argue that the resultant firmer dollar helped depress gold.
Black Blade: In Friday's DGMR I presented a similar explanation. However, the rumor then was that the large bank seller was likely JP Morgan Chase though Morgan Stanley would not be a surprising seller. It was assumed to be an American bank.
Black Blade
(07/01/02; 13:26:35MT - usagold.com msg#: 79607)
Re: alanka and Hipplebeck
You may find your answer in the Daily Gold Market Report (just updated). There are numerous opinions, however, they tend to lead in the same direction. Cheers!
- Black Blade
mdgc
(07/01/02; 13:14:26MT - usagold.com msg#: 79606)
correcting typo in paragraph five
I recently returned from two months in China five weeks in Shenzhen. Shenzhen is a boomtown just north of Hong Kong. I took several excursions to Hong Kong by ferry from Shekou port in the west end of Shezhen.
Last week I attended a seminar given by one of the deputy HK city planners who mentioned that they are building a highway and bridge from HK to Shekou. The Hong Kong/Shenzhen border crossings are the busiest in the world. Many Hong Kong people choose to live in Shenzhen and commute from what they feel is more open and relaxed than Hong Kong.
Surprisingly, 200,000 Taiwanese now live in Shanghai, preferring the big city life to provincial Taipei. Even though China is still a one-party state, it is becoming ever more open. China is now more open than ever in its history.
Leaving Shenzhen I flew to Chengdu en route to ten days in Tibet. The cities I visited in Tibet (Lhasa, Shigaze, Gyantze and Tse Dong) were not tense. There was lots of new private construction, both Tibetan and Chinese homes and businesses. The government is building new roads and bridges that they sorely need. They are reconstructing temples and monasteries.
At Tashilhunpo Monastery in Shigaze the stupa (statue) to the 10th Panchen Lama. He died in 1985. The central government (those godless commie bastards in Peking) built it. It took several years and was completed it in 1989. The stupa is a sitting Buddha, thirty or forty feet tall, decorated with thousands of semi-precious stones and 617 kilograms of gold, lots of silver too.
Thanks to Nomad for several of his postings yesterday and today that prompted this first time posting.
MDGC
mdgc
(07/01/02; 13:09:50MT - usagold.com msg#: 79605)
China
I recently returned from two months in China five weeks in Shenzhen. Shenzhen is a boomtown just north of Hong Kong. I took several excursions to Hong Kong by ferry from Shekou port in the west end of Shezhen.
Last week I attended a seminar given by one of the deputy HK city planners who mentioned that they are building a highway and bridge from HK to Shekou. The Hong Kong/Shenzhen border crossings are the busiest in the world. Many Hong Kong people choose to live in Shenzhen and commute from what they feel is more open and relaxed than Hong Kong.
Surprisingly, 200,000 Taiwanese now live in Shanghai, preferring the big city life to provincial Taipei. Even though China is still a one-party state, it is becoming ever more open. China is now more open than ever in its history.
Leaving Shenzhen I flew to Chengdu en route to ten days in Tibet. The cities I visited in Tibet (Lhasa, Shigaze, Gyantze and Tse Dong) were not tense. There was lots of new private construction, both Tibetan and Chinese homes and businesses. The government is building new roads and bridges that they sorely need. They are reconstructing temples and monasteries.
At Tashilhunpo Monastery in Shigaze the stupa (statue) to the 10th Panchen Lama. He died in 1985. The central government (those godless commie bastards in Peking) built it. It took several years and was completed it in 1989. The stupa is a sitting Buddha, thirty or forty feet tall, decorated with thousands of semi-precious stones and 617 kilograms of gold, lots of silver too.
Thanks to Nomad for several of his postings yesterday and today that prompted this first time posting.
MDGC
sector
(07/01/02; 12:59:16MT - usagold.com msg#: 79604)
Don't Ask.....Don't Tell
How Much Central Bank Gold is "Left"?
The BIS and US gold derivative reports reveal that over 32,000 tonnes of metal has been converted to derivatives. Much of that gold has been sold and is irretrievable at the original sale or loan per ounce price.
So one can easily appreciate why Treasury and Federal Reserve officials "Change the Subject" when it come to questions like "Where's the Gold?". Uhmmm..."It's in ...Uhmmm...Deep Storage...THAT's it....Deep Storage...yes...Dou need some?
Congress is all in on the scam. Today JC Watts announced his departure from Congress. My, My, My... so soon? He must have been having a barrel of fun OR else he is just sneaking down the ropes to beat a retreat before the ship rolls over as did the Banking twins Senator Phil and CFTC Whiz [What silver short?], Wendy Gramm.
How much gold is "Left" to continue the manipulation? Don't know.
But the cabal had a great opportunity to smash gold under $300 but failed so far to follow through ahead of a long, nervous weekend. This time around, meethinks the bulls will be waiting at the bell on Wednesday...AND again at the open on the following Manday.
Central bank gold reserves are inexorably flowing away from Western bank vaults and towards the EAST. This appears to be a simple manifestation of the gaining economic strength in the ME, China and India and obvious failing Western vigor.
Really, when the President is required to say in effect "We will punish the wrong doers" Excuse me? The SEC laws were THERE all the time. Two administrations simply shoved them aside because they wanted juicey cap gains taxes and NOW you ask the World to believe that a few scapegoats will turn the tide of corruption?
The world doesn't buy it any more than Mom and Pop in Peoria.
Hipplebeck
(07/01/02; 12:56:50MT - usagold.com msg#: 79603)
alanka
I have been wondering about that too. The dollar losing value at the same time that the gold price goes down seems an anomaly to me.
I suspect that there are derivatives that protect against the dollar exchange rate by selling puts on gold. I also suspect that some South African miners are selling forward to cash in on reserves that they fear they will lose.
There is a pretty big movement going on in Africa to take assets and put them back in the hands of the indigenous people
TownCrier
(07/01/02; 12:55:09MT - usagold.com msg#: 79602)
Answer for alanka
Here's a bright piece of explanation for the witnessed price movements by the WGC's Rhona O'Connell...
------
"After a steady morning in London, and opening in New York in a reasonably buoyant condition, the mood changed in gold at the end of New York trading last Friday with a rapid fall in prices towards the close of trading.
"Dealers report that volume was light, but the move was extremely fast and involved some stop-loss selling as key technical levels were severed. Prices fell by $5/ounce and regained $3 in as many minutes, before further liquidation developed in the Far East.
"The sell-off was fund-led and was effectively triggered by international official intervention against the yen and euro.
"It is worth noting in this context that it cannot always be guaranteed that stop-loss orders will actually be filled in a fast moving market and there is therefore some nervousness that there is more waiting in the wings, although the trading in Asia over the weekend may have washed out some remaining selling.
"Equally, there is some suggestion that since the week will be skewed by the Independence Day holiday in the US on Thursday, there is the possibility of some short covering developing."
---------
I hope that helps a bit. Did you think for even a minute that it was (or could possibly be) anything other than a paper-led event? Such is the effect of leverage against small hands, it seems.
R.
alanka
(07/01/02; 12:41:36MT - usagold.com msg#: 79601)
Gold Price
Why do you think that the gold price has fallen so quickly from $320 on friday to $310 today?
Black Blade
(07/01/02; 12:32:15MT - usagold.com msg#: 79600)
Double Dip Tedium Stephen Roach
http://www.morganstanley.com/GEFdata/digests/20020701-mon.html#anchor0
Snippit:
The only new insight I have into this possibility is the possible link to America's rapidly unfolding corporate governance shock. The credibility of US businesses is being challenged as never before. What keeps me awake at night is how, and under what circumstances, the bleeding stops. Each time there is a major revelation, overwrought investors want to conclude that it's the last. The post-WorldCom rally is but the latest example of such hopes. Maybe this is as bad as it gets, but it's hard to accept those odds at this point. Trevor Harris, our in-house accounting guru, has been clear in stressing that this story is far from over -- that Corporate America has been slow to get the message and that it may be another 12 months until most of the dirty laundry is finally aired.
Here's where the story could take a new and different twist -- one that could heighten the chances of a double dip. In this increasingly populist climate, Corporate America needs to become far more aggressive in clearing the decks and restoring its credibility. As I see it, biting the bullet on the disclosure of lingering earnings distortions is a distinct possibility. But such a shift won't occur in a vacuum. Such earnings capitulation would undoubtedly accelerate much of the cost cutting that is still being deferred today. Headcount reductions -- especially in the bloated managerial ranks -- would probably increase sharply. The outcome would be strikingly reminiscent of the white-collar job shedding that significantly restrained economic recovery in the early 1990s. In my view, another managerial shakeout has the potential to boost national unemployment toward 7% -- high enough to trigger heightened concerns of job and insecurity that I believe would derail an already vulnerable American consumer. Avoiding a double dip under such circumstances would take nothing short of a miracle.
Black Blade: It appears that the markets have a long way to go. Notice the market ticker on CNBC has had a stream of sell orders all day long. Institutional investors that got caught flat-footed are dumping shares en masse as they are running for the exits. Some of that cash has to go to work (although it is much less cash now). If it wasn't for that cash going back into the market, then we could have seen greater losses on the DOW today in today's rather low trading volume. "Interesting Times"
sector
(07/01/02; 11:56:02MT - usagold.com msg#: 79599)
Bankruptcies Near All Time High
http://www.cfo.com/article/1,5309,7402,00.html
One of the biggest surprises, according to Pate, is that telecom is still one of the weakest industries. Many had expected the sector to recover by now, but Pate doesn't see that happening until late this year or early next year. "The 2002 telecom bankruptcies will include some surprises," he says. In April, Williams Communications Group Inc., a Tulsa-based network services provider, unexpectedly filed for bankruptcy. The company was considered more solid than its telecom peers.
[
Public bankruptcies in 2001
Sector______________________________Bankruptcies
Mining and construction_______________________5
Manufacturing_____________________________66
Transportation, communications, electric, gas_______29
Wholesale and retail trade____________________37
Financial, insurance, real estate__________________6
Services_________________________________53
++++++++++++++++++++++++++++++++++++++
Ask YOUR pension manager if he has some of the "Solid" Telcos or better yet, the "On fuego" chip stocks.
If he says "Yes" place a specially embroidered cap with the word "Chump" on his head and snap a digital picture for company distribution.
As for a "Recovery" we are on a one-way slide downward wherein the consumer has lost the capital and savings capacity to create a "Recovery".
sector
(07/01/02; 11:42:00MT - usagold.com msg#: 79598)
U.S. Bombs Kill or Wound at Least 120 Afghans
http://www.reuters.com/news_article.jhtml;jsessionid=2AKX3AMSFC5GACRBAE0CFFAKEEATGIWD?type=worldnews&StoryID=1152967
July 01, 2002 12:20 PM ET
KABUL (Reuters) - A U.S. plane killed or wounded at least 120 members of an Afghan wedding party in an attack on a village in Uruzgan province on Monday, residents said.
They said the bombing occurred 105 miles northeast of the southwestern city of Kandahar at about 1 a.m. local time.
Afghan President Hamid Karzai told the local Bakhtar Information Agency the "sudden attack" happened in the Dehrawud district of Uruzgan province.
"We are trying to organize aid and a commission has gone there headed by the ministry of frontiers affairs," he said.
+++++++++++++++++++++++++++++++++++++
Another black eye for US "Intelligence". Humint would have prevented this tradgey.
TownCrier
(07/01/02; 11:36:11MT - usagold.com msg#: 79597)
South American Affliction...
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_currency&s=APSCBwxUHVmVuZXp1
HEADLINE: Venezuelan Bolivar Falls Below 1,400 to Dollar for First Time
Caracas, July 1 (Bloomberg) -- Venezuela's currency fell 1.4 percent against the dollar, falling below 1,400 for the first time ever, on speculation that the government won't be able to reduce its budget deficit.
...The bolivar is the third-worst performing currency against the dollar this year among 59 tracked by Bloomberg.
-------(click URL for full article)-------
Of course, these problems of pesky market discipline upon budget deficits are problems for "other people". Surely, the United States will never have to dance to the tune...
How do you spell facetious...?
R.
TownCrier
(07/01/02; 11:28:29MT - usagold.com msg#: 79596)
From the "It's the thought that counts" Dept.
http://www.ananova.com/business/story/sm_619768.html?menu=
HEADLINE: Gold higher in late London as dollar remains weak
Gold prices were higher in late trade as the dollar remained weak ... Dealers said however that today's better-than-expected US manufacturing purchasing managers' index for June, following Friday's positive US data, limited gold's gains.
"This is perhaps a quantum leap into the future, but there is no doubting that the markets clearly believe that a recovery is under way," GNI commodities analyst Lawrence Eagles said. "In the long run, this should be good news for gold, which after all, will benefit from increased fabrication demand," Eagles said.
------
Tongue-in-cheek: Yes. Jewelry and industrial demand. Good. Good. God-forbid that INVESTMENT demand under ANY scenario (economic recovery or not) should ever have a chance to factor into the gold market and pricing. Right, Belgian?
:-)
R.
TownCrier
(07/01/02; 11:06:21MT - usagold.com msg#: 79595)
R U prepared for long weekends in unsettled times?
http://biz.yahoo.com/rf/020701/markets_precious_1.html
NEW YORK, July 1 (Reuters) - ...Dealers were looking toward Thursday's U.S. Fourth of July public holiday and the closure of New York commodity exchanges Friday for a four-day weekend.
---
Call USAGOLD/Centennial today for assistance with your diversification strategy. Lock in and get your order in the pipeline, then sit back and enjoy the holiday with greater peace of mine, come what may.
R.
TownCrier
(07/01/02; 11:00:28MT - usagold.com msg#: 79594)
Transition of power...
http://biz.yahoo.com/rf/020701/economy_trichet_euro_1.html
Bank of France Governor Jean-Claude Trichet told a news conference today, "A strong, solid euro that inspires confidence is good for Europe."
Strong euro AND a strong dollar? Hardly...
Prepare your portfolio for what will likely be the greatest monetary transition the world has ever seen.
R.
USAGOLD / Centennial Precious Metals, Inc.
(07/01/02; 10:51:21MT - usagold.com msg#: 79593)
Don't be fooled by inflatable paper substitutes
http://www.usagold.com/ProductsPage.html
In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance-credibility value of the commercial positions within your investment portfolio.
Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.
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