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ARCHIVED DISCUSSION FROM 1/1/2003 All times are U.S. Mountain Time (Yesterday's Discussion.) ski (01/01/03; 23:58:25MT - usagold.com msg#: 93169) More on Silver erayboy #93161 "Is there any online repository of this collected wisdom?"Not yet that I can share that I am aware of..................R. Powell #93163 "We (silver bulls) are in reality, a small group."A little story to confirm this observation. While I was at the San Francisco Gold Conference a month ago, I sat down to compare silver notes with the primary public relations rep from one of two silver miners there. Just in passing, I mentioned to him that in recent "Daily Market Report" at Finaancial Sense.Com, Jim Puplava had done a piece on a huge short position that had developed in all of the silver mining stocks. I noted that at some point these shorts were going to have to cover and that would help all of the silver stocks. The rep then told me that HE HAD BEEN THE ONE THAT HAD ORIGINALLY DISCUSSED THIS WITH JIM PUPLAVA. As the story went, the rep had been polking around and had done a routine check on the "short interest" in his companies stock. He discovered the unusually large number and had mentioned this to Puplava. Evidently Puplava ran the numbers for the other silver miners that were posted in his "Daily Market Report."Upon taking part in the above, my first thought was that the universe of knowledgeable, silver market experts is much smaller than I had previously believed! Certainly, this one story doesn't entirely PROVE-OUT our suspicions, but it does shed some interesting light on the subject.............It has been noted in the past that several of the world's wisest/wealthiest investors have taken large positions in silver. But what hasn't been noted is that it appears as though several of the WISEST FINANCIAL NEWSLETTER WRITERS have also chosen silver over gold. There are probably a couple hundred financial newsletter writers out there. In my book, there is only a handful that are at the top of their industry and should be listened too. I greatly value the conclusions and recommendations of the following writers (in no particular order): Jim Dines, Doug Casey, Bob Chapman and Jim Puplava. (I also like Bob Prechter but only on the stock market.) These leading professionals all appear to have chosen silver over gold yet few seem to have noticed. Incidently, think of the above as an editorial. steady (01/01/03; 23:45:16MT - usagold.com msg#: 93168) piling on got gold, give it a silver lining! silver and gold honest money for honest people! Carl H (01/01/03; 23:29:34MT - usagold.com msg#: 93167) R Powell: Devil's Advocate Against Silver You ask a very good question: What are we overlooking? Are we wrong because we're missing something?For the sake of discussion here, I will play the opposite side as Ski and speak out against silver. For the record, 50% of our net worth is in silver bullion or silver mining stocks.So what could we be missing....First, consider that The Powers That Be are probably better informed than we are as to what the situtation is in silver.Second, consider that because of the psycological connection to gold and the existance of the gold derivatives bomb, they do not want the price of silver to rise.Third, please grant me the assumption that The Powers That Be are very very clever, and very ruthless.Ok, now let me step into their shoes for a moment and see what I would do in their shoes to keep silver under control. I would view the problem as having three components, supply, demand and stockpiles.1. Supply is very difficult to increase. About 80% comes as a byproduct of mining base metals. Under modest price fluctuations this supply is price insensitive. I can think of two ways to increase production. First, some of the primary silver miners could be subsidized (covertly or overtly) to reduce their cost of production. Second, the management of the primary silver miners could be pressured/bribed into making decisions to increase production that might not be in the long term interests of the shareholders.2. Much of the demand is price inelastic because the silver is needed for one or more of it's remarkable properties. The only significant application that I see where this is not the case is jewlry/tableware. Hence, I would encourage the sale of fake silver jewlry. (I believe that this has already been detected. -- Anyone know the status?)Longer term, I would be actively pushing digital photography. Technologies tend to be adopted in what is called an S-curve formation. That is to say that the first few people adopt slowly and then there is a rush and the last few adopt slowly. I think that in the US digital photography is definitely in the rush stage. For TPTB this is goodness.Also longer term, I would make sure that the legislation for silver impreginated lumber tests dies a horrible death. Preferrably with it's sponsors.3. Stockpiles -- Well, I recall reading that Mr. Buffett was coerced out of his first corner on the silver market due to his involvement with Solomon Bros. and that mess. Were I TPTB, I would be again putting pressure on him. I would also be identifying any other stockpiles and figuring out how to put pressure on the appropriate people to bring them to market. (The Vatican comes to mind as a likely holder of silver.)I would also keep tabs on anyone accumulating a large stockpile and -- discourage it. (A millionaire that had 46tons of Silver recently wound of dead...)Finally, I would, above all, try to maintain the perception of everything being OK and trying to keep investors disinterested. PHYSICAL Investment demand could blow this whole thing up in no time.OK, fire away, no rotten eggs please... physicalman (01/01/03; 23:11:52MT - usagold.com msg#: 93166) more silver In 79 i went through approx. 350 bags of silver plus bars, gold and jewelry, 95% was sold by me to be melted. I stopped dealing after being robbed in Ken. for over 6 figures. It got to dangerous to advertise. Some of the larger dealers i know went through 100 bags a day and lots of that got melted. I would say that 75% of the bags that are left were bought at the top and are only sold by those who have got to old,died (heirs sold it) or those who have given up. In the late 70's lots of mid-size dealers would have dozens of bags in stock, very few of today's dealers do, mostly the market-makers. physicalman (01/01/03; 22:51:49MT - usagold.com msg#: 93165) everybody--silver I wanted to give some more figures on silver to complement what i have already posted earlier. Even though everyone agrees that widespread 3rd level( or modern) industrialization came about after WWII there was heavy use of silver for industrial, photographic and electrical uses from just after the Civil War up until WWII. Thanks to technology a roll of 24exp. film has about 1/100 oz. of ag. compared to earlier films with 1/5 to 1/16 oz. at earlier times for comparable films. Up until the mid-seventies most industrial silver was not recycled so all that film, ind. switches, wires, contacts, plus all the war equipment that was shot down, sank, blown up and abandoned in all the conflicts of the 20th century. As i stated earlier in the 1880's to the start of WWII America electrified, first in the cities, then industrial plants and don't forget all the telephones and telegraph and teletype machines and switching devices. So there was a lot of industrial use of silver before 1945 and most of it is long buried in the dump, at sea etc. etc. As for the 6 billion oz. that US had at the end of WWII 90% of that was used to mint coinage and redeem silver cert. in the early sixties. When the modern commerative coin program was started in 1982 there was only143 million oz. left and in 1986 when the eagles started to be minted there was only 126 million oz. that is almost gone. When i was buying silver in 1979 all the bags that i filled up were sold to a refiner (they paid more because ind. users were calling up and guaranteeing to buy anything the refiners were contracting for ( I weighed the bags and deducted 10% for alloy, called them up, they quoted a price, i delivered in 3 days and they had it sold before they had even smelted it) a lot of the bags only figured out to 620 to 665 oz. of silver because of wear. Another thing to look at is that recycling is much more efficient in the last 20 years and with that we still have a 10 million an oz. shortage per month. Even with a slowing economy the deficit will still be there because base metal mining accounts for the large majority of new mine production. Large worldwide copper producers shut down 30% of world copper mine production to stem surplus and price declines in late 2000 and 2001. As for what is left available in the world you can go by known large stockpiles or estimated holdings of all types.India by far has the largest silver stockpile (est. 3 billion oz.) but it is in the hands of 100's of millions and is not feasonably available at current prices. Say there are 1 billion oz. in the US in small private hands in the form of older 90% coinage, Obsolete coll. coins from early 20th and 19th centuries and in coll. bars, rounds, large bars and modern comm. coinage. We will give China credit for 1 billion oz. (they have valued silver historically) Say 300 million for Buffet, the Comex and another large unknown holder. 200 million oz. in South America and a 1/2 billion in Europe, Russia, Central Asia, Africa and Austrialia. Plus we will throw in another 1/2 billion for good measure. Thats 6.5 billion oz. about an oz. for everyone on the planet. Plus another variable to consider is there has been a 10-12 million oz. per month deficit for the last 12 years and there were mining deficits to new demand since 1965. Alot of production of silver then was remelting of existing coinage because it was worth more than face. These are rough est. of mine but i have been in silver for 35 years (don't claim to know everything but i have learned a few things) What happens when fiat paper starts to burn and gold and silver starts to be seen as money to more and more people all over the world. If all the silver and gold ever mined in the history of modern man was still available do you think it would be enough to satisfy modern monetary demands Silver-41 billion oz. 6.7oz. per person Gold-4.3 billion oz. 2/3 oz. per person Remember that strategically formed lead may be just as important in the future for those of us that understand history and have some vision. IMVHO Goldrush (01/01/03; 22:13:07MT - usagold.com msg#: 93164) Can you believe this???? OUTRAGEOUS! washingtonpost.com U.S. Drops Report On Mass Layoffs Data Helped States Track Patterns of Industrial Demise By Kirstin DowneyWashington Post Staff WriterThursday, January 2, 2003; Page D11 Citing a shortage of money, the Bureau of Labor Statistics will stop publishing information about factory closings across the country, a decision that some state officials and labor leaders are protesting.The monthly Labor Department analysis, known as the Mass Layoffs Statistics report, detailed where workplaces with more than 50 employees closed and what kinds of workers were affected. "We have finite resources," said Mason M. Bishop, deputy assistant secretary for the Labor Department's Employment and Training Administration, which has been paying about $6.6 million a year for the BLS report. The department made the announcement on Christmas Eve, as a note on its November -- and final -- report.The report said U.S. employers initiated 2,150 mass layoffs in November, with workers in manufacturing most affected. About 240,000 workers lost their jobs, it said.Bishop said that the Labor Department had only $30 million for its dislocated-worker demonstration project, and that it could no longer afford the report. "We believe we need to be funding programs that get people back to work," he said.Some state officials, who help compile data for the report, criticized the decision. They said the monthly reports helped them steer unemployed people to jobs in new industries."In the current recession, MLS data have increased in value and are being followed and evaluated more closely," Catherine B. Leapheart, president of the National Association of State Work Force Agencies, wrote in a letter to Labor Secretary Elaine L. Chao. "The states have come to rely on this information as an economic indicator and a tool for operational decisions on service delivery and funding allocations for dislocated-worker programs."State officials around the country said they were surprised and unhappy to hear the report was canceled."In these times when the economy is in transition, knowing what's going on and who it's going on to, is critical," said Harry E. Payne Jr., chairman of the North Carolina Employment Security Commission. "It's an axiom of human nature that you focus on what you can measure. Now they are taking away a measure."Payne said North Carolina has been hard hit by plant closings, including those by textile and fiber-optics companies that have moved jobs overseas. He said the program was the only national, standardized source of data tracking plant closings, allowing states to compare their manufacturing layoffs with those of other states."To give it up is just awful," said Beverly Gumola of the Illinois Department of Employment Security. State officials use the data to determine "which occupations are going kaput," she said.Christine L. Owens, director of public policy for the AFL-CIO, whose member unions have been hard hit by the loss of manufacturing jobs, said eliminating the report is an example of a "let-them-eat-cake approach" by the Bush administration.___________Hide the bone pile!!! Welcome to 1984 all over agin.Geeez R Powell (01/01/03; 22:06:48MT - usagold.com msg#: 93163) Ski (93160) In regard to #64, I've come to exactly the same conclusion, namely, that we are, in reality, a small group. Even those that do trade are mostly totally unaware of even a small number from your list. They simply try to read the charts, waves, the heavens or chicken entrails (Rhode Island Reds work best) or just follow the trend. It's been my attempt to analysis the analysts that caused me to ask the forum for help in searching for any worthwhile fundamental news. It would not surprise me to see POS double before the market wakes up to the laws of supply and demand. I don't mean to sound cocky and arrogant in this belief but I still have not found any plausible explanation to change my opinion that silver is and has been in a deficit situation. Its use is inelastic and supply is tight enough that some analysts are guessing at the time when existing supplies will be completely exhausted! Gold is finally getting some attention in the mainstream press as it should but silver....? What are we overlooking? Are we wrong because we're missing something? Thanks, Rich R Powell (01/01/03; 21:43:44MT - usagold.com msg#: 93162) Missing silver There is still an unknown and unknowable amount of silver in this world in coins, silverware, jewelry, works of art, old electronic equipment, old photographic records, etc. Who can say or even guess how much has been mined during the last 5000 years or longer? I don't think anyone was even interested enough to venture a guess at this question until relatively recently. The CPM group first published a Silver Survey in 1971. I'm sceptical of their numbers but after asking silver analysts to back up the numbers they have been using, they all cited this source. Silver, as Mr. Bill says, certainly exists but in what forms? At what price do coins get melted down? Perhaps Physicalman can help here as he mentioned he was involved with coin melt years ago. How much higher does POS go before grandma's tea set goes for melt? How many coins got melted during the 1979-1980 price spike? How many remaining are held for nummismatic value (much higher than melt value)? At what price do fine antique silver art pieces go? And, assuming POS reaches the "collect and melt" value, how long will this take in a market starved for immediate supply? From the Survey (sorry to keep refering here but it's about the only source)... "At the end of 2001, bullion banks are estimated to have totaled 311.2-496.2 million ounces, while investor holdings of silver coins totaled 467.5 million ounces." And again (page 13).. "Extensive efforts over many years to identify errors in these estimates and to improve on them has led to the conclusion that, while relatively small corrections may be made, there are no massive, untold, secret inventories of silver anywhere in the world that have not been taken into account in these statistics." Also, the U.S. government held silver now gone, although an impressive number, does not include normal production, recovery or the coins melted already. When analysing existing supply, Buffett's 1997-1998 purchase of 129.7 million ounces is always counted but did he get the whole load or, after taking delivery of 89 million ounces (which initiated a lawsuit), did he take paper leases for the remainder? Does he still hold this stash? So many questions, so little knownledge! Thoughts? Rich erayboy (01/01/03; 21:27:07MT - usagold.com msg#: 93161) SKI - Silver Facts / Rules - Approaching Silver Forces #61-64 Ski:Is there any online repository of this collected wisdom?I'm adding silver since I, also, believe it will surpass GOLD percentage-wise, and perhaps even price-wise as it may become a rather scarce but essential industrial metal for its antibiotic and super-conductive properties -- and it is consumed not stored as is GOLD.Thx.ER ski (01/01/03; 21:02:44MT - usagold.com msg#: 93160) Approaching Silver Forces #61-64 Carl H #93148When I add a new "Approaching Force For Higher Silver Prices", I sometimes "plug them in" to my own list where they "read logically" rather then just adding them the end. With this in mind, I THINK, (but am not positive), that this is what you want....................61. For eons, top brokerage houses, astute financial advisors and professional money managers have RECOMMENDED a baseline 5-20% PORTFOLIO DIVERSIFICATION into precious metals. Partly due to the lengthy, worldwide bull market in equities and the extended bear market in precious metals, this sage advice has been largely ignored in recent years. A return to this prudent guideline will equate to an increase in PM demand.62. The prophecy that "China is a sleeping giant" is certainly proving to be true. As a group, CHINESE PEOPLE are not only extremely hard-working but they also RANK AT THE TOP AS SAVERS. Furthermore, they have more experience with the pitfalls of paper currency than any other nation. The combination of the above factors clearly suggest a future, high level of precious metal demand.63. A great speculator looks for "REVERSE BUBBLES." (the exact opposite of BUBBLES or MANIAS), where everything that can possibly go wrong over an extended period of time (at least several years) HAS and the bear has fed upon itself to a point of hyper pessimism. The still viable investment will be on sale for 90% off or more. All competing market forces are ultimaely reflected in one single measurment; the price. The primary evidence of a reverse bubble in silver is that it has been priced below its worldwide cost of production on a multi-year basis. Therefore, SILVER EASILY QUALIFIES AS A REVERSE BUBBLE.64. By all CONTRARIAN AND PSYCHOLOGICAL MEASURES, the outlook for silver just doesn't get any better. This essential ingredient of all modern societies is thoroughy un-loved, un-wanted, un-appreciated and un-heard of by the mainstream. (Who can name a single silver mining company?) Its stellar investment merits are un-popular and completely un-recognized in the investment community at large to the point that nobody cares and nobody wants to know. Profound, unwarranted pessimism is at the heart of all historically important bull markets................miscellaneous info:At the recent PM conference in San Francisco, a consensus of the experts said that the only people in the PM markets so far are the professionals.I recently read that only 1% of portfolios contain a position in PM's. This should be confirmed by other sources before it is believed.I recall way back when that when the Chinese gold market was going to open. It was mentioned that platinum and silver would also trade. Does anyone have any info on this possibility?It was reported that banning certain wood preservatives is being DISCUSSED (and is not yet law). A silver based preservative with a projected annual usage of 100 million ounces was given. I don't think this has happened yet but worth watching.Where has every ounce of the historically, mined silver gone? No human being could ever answer a question like this. The next best approach is to look for worldwide, stored silver inventories. Ted Butler has proposed this question for years and no large, previously unknown inventories have ever turned up. Only the KNOWN inventories are showing depleation.The only two sources of a large supply of silver that I could DREAM UP are: 1. Russia ..... How much did they stockpile during the Cold War era? How much has not been smuggled out of the country and sold on the open market. 2. Will someone ever figure out how to get silver out of seawater?When history books are written about the coming PM price boom, what bull market started first ... gold or silver? We have forgotten that silver bottomed at $3.50 some years back and has slowly been working its way up since then. Strict textbook, technical analysis says that silver led gold higher.I've said enough ..... mikal (01/01/03; 20:44:33MT - usagold.com msg#: 93159) @sector You have short memory and put words in my mouth. It was "traded silver for gold" that was being discussed, not whether he sold any. Don't count on tooth fairies. sector (01/01/03; 20:35:45MT - usagold.com msg#: 93158) @mikel "Clinton Didn't have the authority to sell silver?" Who had the authority to sell it? Perhaps... ...you imagine it was sold by the Tooth Fairy? It's gone...or perhaps you are going to disput that fact?Check the USGS site for the years and tonnage of US silver export. The Defense Silver Stockpile was sold by order of the resident just as the coming purchase of silver has been approved by order of the President. Post your e-mail and I will send you a nice chart of the relevant periods of silver loss.As for Presidential precious metals sales and/or loans or swaps see the goldensextant.com for the full history of gold swaps complete with FOMC tracnscript testimony from three Federal Reserve officials, Angell, Mattingly and others. The Fed reports it has 8,000 tonnes but they have swapped a portion of it. No one knows how much has been swapped and with whom.[Mr. Bill] the greatest single user of silver is the medical and consumer photography sector. If you need a clue as to the amout involved, visit your nearest mid-sized hospital and peek at their film library...there's your silver. In case you haven't noticed the world population is a bit larger than it was in 1960.I'm sorry Mr. Bill if that fact disturbs you. I didn't mention the pre-WWII era as a user of silver...I didn't need to.There isn't any mountain of silver just waiting to crush a silver rally...anywhere. I'm also sorry if that fact disturbs you.There may be deals with Mexican producers but no huge stash in Vienna or Genova or even Budapest. Black Blade (01/01/03; 20:10:10MT - usagold.com msg#: 93157) Re: silvercollector Actually I hold shares of only a few NatGas companies such as Devon Energy (DVN), and Questar (STR) as well as the Fidelity Natural Gas Select Fund (FSNGX), and NatGas trusts such as Dominion Resources (DOM) and San Juan Basin Trust (SJT). I have shares in other energy sectors as well such as USEC (USU), Amerigas Partners (APU), Ferrell Gas Partners (FGP), Northern Border Partners (NBP), as well as a few Utes, and recently El Paso (EP) and Williams Co. (WMB). However, I don't have any shares of companies that are specific to Canada. Most of what I do have pay out good dividends and funds from operations (FFOs) for current income – though I probably should actively look for work one of these days, but that would cut into my gym time and my hunting and fishing. Cheers!- Black Blade mikal (01/01/03; 20:04:54MT - usagold.com msg#: 93156) (No Subject) Re: Ag strategic stockpile You: "wager that he traded some or all of it for gold..." I do not wager with my investments if I can help it. But I cannot imagine that Clinton would have the authority or motive to do that. And even a coalition of U.S. officials is powerless against the wishes of the puppetmasters, who yield a full compliment of "tools of persuasion".More likely it dissappeared directly to the stockpiles of those most knowledgable of it's strategic value, most able to ration it and further accumulate and "manage" it. Mr. Bill (01/01/03; 19:48:30MT - usagold.com msg#: 93155) @sector msg#: 93153 Not likely. Prior to WWII the world was not overly industrialized. So, much consumption of silver could not have occurred. In fact, it took almost 60 years of massive industrialization just to get rid of 6 to 10 billion ounces. Prior to WWII virtually no silver was consumed in the industrial sense. It is still out there. silvercollector (01/01/03; 19:46:14MT - usagold.com msg#: 93154) Black Blade Dear Sir,May I ask if you hold shares of any Canadian natural gas companies? sector (01/01/03; 19:32:03MT - usagold.com msg#: 93153) Mr. Bill: "Where did the silver go?" A good portion of it was permanently consumed... ...by the largest single application useful for silver. The photosensitization of imaging film. Silver halide in double-sided X-Ray film and consumer photography applications constitute the largest group of marginally recoverable silver.Due to archival regulations stipulating long medical file holding periods [Most five years, many lifetime] medical silver recovery is not a significant pool of scrap metal that affects the market as central bank holdings do for gold.Why did the US sell its once mammoth stockpile? Ask former President Clinton. Wager that he traded some or all of it for gold at 50 to 1 ratios...gold that he then sold below market prices.The LBMA silver trading volume intersects zero late in the first Quarter of 2003.There is only one metric that can raise this LBMA trading volume…a rising price. slingshot (01/01/03; 19:10:32MT - usagold.com msg#: 93152) Happy New Year Happy New Year to all at the forum.Congratulations to the Winners of the Contest.Slingshot-----------------<> mikal (01/01/03; 19:07:14MT - usagold.com msg#: 93151) @Mr. Bill Good points. And "where went the 25 - 30 billion ounces of Ag that were money prior to WWII?" I have a couple of those ;) Great keepsakes when they're not melted and a piece of history.But what business does the U.S. government have in depleting the strategic silver stockpile down to nothing? In a nation #1 in munitions production, high-tech and security consciousness? You and I know. R Powell (01/01/03; 18:51:21MT - usagold.com msg#: 93150) Ski // Black Blade // Goldrush Thanks guys for the heads up on silver news. Ski, I have your impressive list printed out and will add the latest additions. I agree with the "wall of worry" theory and have found myself trading more cautiously of late. Maybe I still can't really believe it's REALLY starting. Tuesday's trading saw a 20 cent range in silver. I need to steel myself for wider swings and the inevitable pullbacks that we'll see. Black Blade, supply shortages, real or perceived, will probably be the strongest of all factors in the up/down equation, at least until an all out mania ensues. If so, that will be something to behold! Goldrush, your info sent me to my trusty Silver Survey where I found (page 149) Poland listed as having produced over 37 million ounces in 2001 and over 30 million every year from 1995 on. The company you mentioned is listed (page 152) as the second largest supplier (second to Industrias Penoles). I remember (from somewhere?) that this Polish company is primarily a copper producer so this silver is by-product. This is not unusual. Thanks again to all Rich Carl H (01/01/03; 18:51:10MT - usagold.com msg#: 93149) Ski: Reasons #61-64 Ski, Could you post reasons 61-64. Thanks! donnemuir (01/01/03; 18:48:07MT - usagold.com msg#: 93148) Contest WOW!!! what a lucky guess...and great way to start the New Year...Thanks to MK our host and to Sir Gandalf for his play-by-play. And Thanks to all the regular posters; they have made this the premier forum on the net. Have prosperous New Year...get a load of gold (& silver).donnemuir Black Blade (01/01/03; 18:44:13MT - usagold.com msg#: 93147) Petroleum Runs Higher, Gold Lower http://www.crbtrader.com/data/mktcom.asp The USD is lower as is Gold, but Oil and NatGas surge as the New Year starts. Should be interesting when a real market opens.- Black Blade Mr. Bill (01/01/03; 18:39:24MT - usagold.com msg#: 93146) @ski msg#: 93136 – Silver mountains Now I can understand your many points about how silver just has to go to the moon. But I do have one minor problem. It seems like the total amount of silver produced since day one is in the neighborhood of 40 billion ounces. After WWII there was somewhere around 6 to 10 billion ounces around. And I will give you the point that it was all consumed, although I still believe things like silver eagles are not consumed.Now silver was always money, just like gold. And I believe everyone accepts the fact that most of the gold mined is still around somewhere. After all, you do not throw precious metals in the garbage. So where is the 25 to 30 billion ounces of silver that were money prior to WWII. Christian (01/01/03; 18:31:00MT - usagold.com msg#: 93145) Massive deflation is invitable The creation of $ trillions, created $ trillions of debt, and now the interest and principal on those debts is killing the economy. In 1997 interest cost took 23% of profits and in 2002 it took 100%. We have a national declining income and a rising debt service. We have a rising GDP measure which can not measure nor make a distiction between what is good for a society and what is bad. Turning this country into an economic concentration camp on tax payers expense will increase the GDP. Bush Senior is right when he said the American people are fodder units. You know what happens to fodder. Debt sure can reduce a persons net worth when collateral is falling in price. Greenspan is now forced to monetize gold in an attempt to save the real economy that is not even in the GDP measure. Monetizing homes will turn into a disaster just like monetizing other countries was. Monetizing Iraq will turn into a disaster. Gettin rid of the Iraqi dictator would be a good thing if only we didn't need the their oil to add to our GDP. Arcticfox (01/01/03; 18:02:33MT - usagold.com msg#: 93144) Prepare for the Meltup - Gold http://www.goldseek.com/cgi-bin/market/news/CliveMaund/1041453016.php Snip..By: Clive Maund, Diploma Technical Analysis Gold's impressive breakout in December provided the final confirmation, if any were needed, that it is in a bull market. Goldrush (01/01/03; 18:01:10MT - usagold.com msg#: 93143) Company claims to be 2nd largest producer of silver http://www.kghm.pl/en/oferta02-5.php KGHM Polska Miedz S.A.http://www.kghm.pl/en/oferta02-5.phpLink above takes you to the web pagethat makes the claim. Black Blade (01/01/03; 18:01:09MT - usagold.com msg#: 93142) Gold Starts Year Off Negative http://informer2.comdirect.de/de/detail/_pages/charts/main.html?sSymbol=GLD.FX1&sRange=1&sBackUrl=&dbrushwidth=&charttype=&gd1=&gd2=&benchmark=&infos=&indtype1=&indtype2=&volumen= Gold took a quick spike lower in OZ tonight (see link) as most players are out of the market until next week. The Tocom will open on Monday. Should be fun to watch the few players not nursing hangovers puch the POG around.- Black Blade Goldrush (01/01/03; 17:55:00MT - usagold.com msg#: 93141) R Powell http://news.bbc.co.uk/2/hi/europe/2619997.stm I also watch for news on silver and have come across a storyon silver boards that has been making the rounds.It says a threatened mining industry strike in Poland hasjuiced silver prices recently. I have had trouble tracking thisdown as I never realized Poland was a big silver producer.Here is what I found> apparently Poland produces about35 million oz of silver. Perhaps others could clarify thisnumber. In any case here are some sites to view.http://www.kghm.pl/en/firma05.phphttp://news.bbc.co.uk/2/hi/europe/2619997.stmI own gold and silver. I have heard also the saying thatplatinum goes first, then gold, and lastly silver.As gold gets more expensive "poor mans" gold becomesa more affordable substitute. Black Blade (01/01/03; 17:40:56MT - usagold.com msg#: 93140) Re: ski Having never smoked Tarringtons I see no reason to switch, however, I use the phrase "New Great Depression" for lack of any mainstream phrase to identify the deepening recession and economic shocks that are sure to rip through the economy going forward. Some may be saying much the same when they refer the the "Secular Bear Market" as stated by David Tice among others when referring to the declining stock markets. But it may be true that we are closing in on a "The Greater Depression". Actually I like it! - The phrase that is.Cheers!- Black Blade Black Blade (01/01/03; 17:34:06MT - usagold.com msg#: 93139) Silver shoots up on reduced arrival http://www.outlookindia.com/pti_news.asp?id=108747 Snippit:Silver prices shot up on the bullion market today on fresh buying by local parties amidst restricted arrival which created tight stocks position and closed with significant gains. Gold, on the other hand, after showing losses in the last two trading sessions on stockists selling, emerged with moderate gains on local buying. Marketmen said silver gained strength on fresh buying amidst tight stocks postiions as most of the overseas market remained closed for winter break and new year celebrations and blocked the supply. They said gold was better on reports of hightened tension between US allies and Iraq and triggered buying by stockists considering it to be a safe haven during such type of crisis.Black Blade: This one's for the Silver Bugs. Demand continues to be strong in India and will strengthen for all PMs as we enter the Asian Wedding Season. ski (01/01/03; 17:30:12MT - usagold.com msg#: 93138) What will we ultimately call the depression?? Black Blade ... always enjoy your posts .... but I have an issue .... I'm such a pain.CATCH PHRASES appear all over history: "The War to End All Wars", "I Have a Dream", "Hippies", "Stock Market Bubble", "Bubblevision", "New Ager's", "Generation X", "Read My Lips", "Follow the Money", "The Great Depression" etc. In most cases, the CATCH PHRASE that stays in usage is the one that "say's it best". Black Blade, you see the hard times and have called it the "New Great Depression". However, you may not be aware of it, but, around 15 years ago, Doug Casey also saw the coming problems and gave it the name, "The Greater Depression". His catch phrase imples depression and that it will be more intense than the last.Which "say's it best"??? 1. New Great Depression2. The Greater DepressionI like you ....... but I also like #2 better!! "Would You Rather Fight or Switch?" (catch phrase from an old cigarette commercial) Goldrush (01/01/03; 16:47:18MT - usagold.com msg#: 93137) Oil shocker 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=APhNzOxO6Q3J1ZGUg Sydney, Jan. 2 (Bloomberg) -- Crude oil futures may rise when trading opens later today, after the American Petroleum Institute reported the biggest decline in U.S. inventories in 13 weeks. Supplies last week dropped 9.1 million barrels, or 3.2 percent, to 277.5 million barrels, the report showed. Analysts surveyed by Bloomberg expected a decline of between 2.1 million and 2.6 million barrels, after a strike in Venezuela disrupted shipments from the fourth-biggest source of U.S. oil imports. The decline left inventories close to a 26-year low reached in October. ``This move is entirely attributable to the strike in Venezuela,'' said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York. ``Inventories had held up well until now. Finally, we're seeing evidence of the missing oil in the inventory reports.'' ______Goes along with BB forecast ski (01/01/03; 16:43:36MT - usagold.com msg#: 93136) Silver thoughts ....... Have greatly enjoyed the recent silver discussion. "You haven't seen anything yet" seems to be the appropriate title for the POS at the start of this new year.Some of you may have been following my posts on silver. (example: 5-20-02 #76064). I started a personal project to document a list of approaching forces that are going to impact the POS. Over the years I have learned to trust the FACTS and ignore the OPINIONS. To qualify for my list, the APPROACHING FORCE had to meet two requirements. First, it hasn't yet happened. Second, it has to be fairly large in scope.The result of this work radically CHANGED even my own bullishness on silver and I had been following the this commodity for nearly 20 years. This came as a surprise. I could not believe the great length of the list to date. (Over time, I have posted the original list and updates on this forum.) Before I began this work I had thought that I had already done all of my silver buying. I was already well overweighted in AU by any measure. But as the list grew and grew, my personal CONCLUSION from the assembled FACTS told me to resume aggressive buying.Another operational principle that I penned and use says, "It makes no sense to purchase good economic advice (or spend valuable time on the web etc.) and not make purchases, adjustments, or otherwise heed the advice by putting at least some of it into practice." Again, I followed my own advice.How credible is the APPROACHING FORCES work? As of December first, the list had grown to 65 forces. (3 more will be listed below for a new total of 68) Bob Chapman, from the International Forecaster, saw the list and asked for permission to reprint it in his newsletter. This was done on one of his December issues. Credibility? You be the judge.I sure that someone will say that they don't agree with 10 of the forces listed. Fine. Take any 10 from the list of 68 and you are still faced 58 forces that are almost certain to move silver higher. It seems like someone is always bringing up some kind of phantom or incomplete information about silver to shoot holes in the bullish arguments. (ex. digital photography). THIS DOUBT IS AN EVER-PRESENT FORCE IN ALL BULL MARKETS. It is said that markets climb a WALL OF WORRY and fall down a SLOPE OF HOPE. Both statements imply ever-present DOUBT.In investing, I find it useful to reduce complex problems into simple questions. Is there a loch ness monster? Does bigfoot live or not? Are UFO's and aliens for real? Is silver going to appreciate more than gold on a percentage basis? These simple questions are answered with a simple YES or NO period!! There is a great body of information to support both sides of the above issues. I think of them as two huge mountains. Two mountrains of scientific reports, eye witnesses, expert commentary, video clips, zodiac charts, rumors, public opinion polls etc. There are YES and NO mountains. BUT ULTIMATELY, ONLY ONE OF THE MOUNTAINS IS VALID. The other is wrong and should be trashed. In practice, I am always opened to some outside force entering the equation and use stop loss strategies. (Whenever anyone in life has shown me that my thinking has been wrong about anything, I wholeheartedly thank them and immediately latch on to the new-improved information.) But, I also force myself to ACT on my yes or no questions instead of just debating them forever.My personal conclusion: Silver is still in the very early stages of a giant bull market and will outperform gold before it's over; even surpassing gold in price for a time...................Especially for R Powell65. As the worldwide bear market in equities grinds onward, advisory services, brokerage houses, pension fund managers, mutal fund managers, certified financial planners and investment advisors will increasingly come under the gun for non-performance. More and more, if these PAID PROFESSIONAL INVESTMENT ADVISORS want to keep their accounts, jobs, commissions and bonuses they WILL BE COMPELLED TO BUY THE POSITIVE PERFORMANCE OF THE PM SECTOR (whether they like it or not). For them, the new mantra will be, "Buy or Die".66. With rare exceptions, all of the PM's (gold, silver and platinum), appear to be "joined at the hip" and have historically moved together in price. The market outlook for platinum is presently neutral (1-03). However, gold appears to be in the early stages of a strong bull market that is supported by excellent fundamentals. DUE TO THE INTERRELATIONSHIP OF THE PM FAMILY, A MAJOR MOVE INTO GOLD WILL AUTOMATICALLY FUEL A CORRESPONDING BUYING INTEREST N SISTER SILVER.67. A precious metals INVESTOR is an individual who buys precious metals with the expectation of selling in the future for a profit. There are genearally three classes of precious metal investors that will emerge: the un-informed-wealthy, the smart-wealthy, and *joe-sixpack-amateur-investor. When the inevitable wave of PM investment buyuing begins, the un-informed-wealthy will buy gold because it is going up and that's what they always buy. The smart-wealthy will buy a higher percentage of silver over gold-platinum because SILVER WILL OFFER A HIGHER PERCENTAGE RETURN. When JOE-SIXPACK-amateur-investor starts is investment buying, he will choose silver over gold-platinum because he GETS MORE FOR HIS MONEY. Conclusion: By all accounts, SILVER WILL WIN THE PM INVESTMENT POPULARITY CONTEST. Evidence of this scenario playing out wil be observed in a narrowing of the gold-silver ratio.*Footnote to Joe-Sixpack: In 15 years of talking the stock market with novice investors, one particular phenomenon has happened virtually 100% of the time. Given the same industry, tell Joe about company X selling for $1 per share and company Y selling for $30 a share. He will want to buy the one dollar stock EVERY SINGLE TIME even though the higher priced stock may, for any number of concrete reasons, holds exceptional promise for a greater PERCENTAGE return. (I have never been a stockbroker ... but I talk the market)..................Constructive criticisms welcomed. Happy New Year to us! Leigh (01/01/03; 16:43:16MT - usagold.com msg#: 93135) Old Yeller re Grant Article Old Yeller, if that's the kind of talk that goes on during Fed Christmas parties, it's no tragedy that a plane crashed into the Florida building last month during exactly such an event! Black Blade (01/01/03; 15:52:40MT - usagold.com msg#: 93134) Gold glows as tension grows http://finance.news.com.au/common/story_page/0,4057,5787164%255E462,00.html Snippit:A PALL of gloom hanging over global financial markets has given gold a New Year's Day rally, cementing the precious metal's safe-haven status. In 2002, gold was a favoured alternative investment in financial markets dogged by economic weakness and corporate disappointments. Market watchers said gold would remain an investor sanctuary for some time, with stocks set to start 2003 in the same fashion they ended 2002 – with sluggish, uninspired trade amid dull global sentiment. Overnight Tuesday, Wall Street ended its third yearly loss in a row – its longest losing streak since World War II. "It's been a tragic three years for most stock investors, and we're all looking forward to 2003," American analyst Kevin Carey of Indiana's 1st Source Bank said. Black Blade: I have no sympathy for those who lost it all in the stock markets. If they did not take prudent steps to protect themselves from the economic downturn, then too bad. Precious metals are a form of portfolio insurance. Who but the most irresponsible would rive without auto insurance? Or buy a home without homeowners insurance? Or not have medical insurance? The same goes for portfolio insurance. I have no sympathy for irresponsible investors. 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. Old Yeller (01/01/03; 15:41:13MT - usagold.com msg#: 93133) Deconstructing Bernanke http://csf.colorado.edu/mail/longwaves/2002/msg02856.html Who better than Jim Grant?Happy New Year,USAGOLD and all the fine purveyors ofgold tinged news and opinions who post here.The year of gold's revenge;sounds delightful.Let's get physical. Black Blade (01/01/03; 15:40:57MT - usagold.com msg#: 93132) Gold price rises as miners stop hedging http://afr.com/companies/2003/01/02/FFXXWLT3EAD.html Snippit:A key factor helping push gold prices to five-year highs is that miners have stopped betting the price will fall, according to Deutsche Bank. While fears of a Middle East war have been blamed for gold's run to almost $US350 an ounce, the change of thinking by miners is just as important but not as obvious. Gold is now 30 per cent higher than the prices below $US260 seen early in 2001. "Historically, at these prices, the producers would have been very active in the hedge market," Deutsche said. "The belief that we are in a bull market has led to negative sentiment towards the hedged producers. Very little new hedging is being put in place." Central bank selling was also a key reason for slumping gold prices in the late 1990s, but buying by China, the Philippines and Venezuela helped offset selling by European central bankers. Deutsche said another major factor in the gold price rise in 2002 was the decline in the US dollar.Black Blade: I would expect to see much higher Gold prices in the New Year. Aristotle (01/01/03; 15:34:50MT - usagold.com msg#: 93131) ax, I'm sorry to be such a pain in your side about this I still think your proposed Gold-buying scheme for the Treasury is a muddle. Do you *really* think there are another 8,000 tonnes out there in the marketplace so easily had in exchange for the Treasury's dollars??? While facing that puzzle, through what mechanics do you then envision that the Treasury may come up with the vast amount of dollars as necessary to compete for (purchase) this 8,000 tonnes of Gold in the present marketplace?To make a long story short, I can see how your scheme would rocket the price of Gold, but I can't see how it could do anything beneficial for the fate of the dollar. It's one thing to just *say* such and such and end result may be done or built, but it's quite another thing to appreciate the mechanics involved, recognizing that the blueprint can't possible be drawn and implemented.Can you offer up anything more to address the nuts and bolts of this Treasury Department scheme of yours?Gold. Get you some. --- Aristotle Black Blade (01/01/03; 15:30:03MT - usagold.com msg#: 93130) Energy Business Watch Report Black Blade: The "Coming Natural Gas Crisis" report posted by Boilermaker has some serious implications for US energy needs. This is a short synopsis of the report's conclusions: Even for an industry long accustomed to high price volatility, the last two years have been awild ride:· In 2000, spot-market prices quadrupled in less than nine months peaking at $8.72/MMBtu in January 2001 - at a time when no one in the industry was predicting steep increases· Less than three months later prices began to plummet – dropping below $2.00/MMBtueven before the September 11 th terrorist attacks· In March of 2002, prices again unexpectedly sky-rocketed for the second time in 18 months – doubling at a time when consumption was at a seasonal low and the amount of natural gas in storage was at record levelsWhat is driving this volatility? Are we at a critical turning point, in which the forward delivery price curve is again likely to shift? If so, when? How sharply? And in what direction? Over the past six months, EBW has sponsored a path-breaking analysis to get to the bottom, once and for all, of the fundamental drivers of both supply and demand in the North American market and predict more accurately likely near and mid-term price levels.The results of this analysis are stunning. In particular, EBW's report—which will be released publicly in November—concludes that:· While it is possible that spot market prices could take one last short-term dive this fall, when unused storage capacity may be reduced to zero, by no later than December or earlyJanuary, the forward delivery price curve will shift sharply upward· Further, this upward shift will not be a short-lived event; instead it will mark the beginning of a period of at least 36-48 months in which prices are likely to be consistently well-above current levels· This upward price pressure stems in part from a huge shortfall in supplies available to the U.S. market, which are likely to be at least 1.0 Tcf short of next year's needs even if there is zero increase in demand.· Further, at the same time that available supplies are dropping to the lowest in more than a decade, demand is virtually certain to exceed current forecasts—due in part to the impact of the 200,000 MW of natural gas-fired generating capacity that has been added since 1999 and tightened NOx restrictions that go into effect in 2003 and 2004. These sustained much higher-than-expected prices in turn could have far-reaching implications for every sector of the industry, including the future direction of merchant generation, the value of existing coal and nuclear capacity, the future role of power marketers, and the ability to refinance. ax (01/01/03; 13:57:25MT - usagold.com msg#: 93129) The New World Financial System with Gold at its Center The New World Financial System with Gold at its CenterTrends can be reversed. There is no reason why the USD must relinquishits role as the world's reference and reserve currency. This role willnot be relinquished if the U.S. Treasury recognizes the supreme valueof gold in world finance.1. The United States must double its Treasury tonnage of Gold Reserves from 8k ton to 16 k ton2. Step 1 accomplishes mainly the purchase of TIME. 3. The TIME to (while giving the USD stability and credibility by being backed by instead of approximately 90 billion USDs of gold at current prices, 180 billion of same) : a. maintain very low interest rates and increased money supply b. use the increased money supply with low lending rates to fund increased research and venture capitalism within the United States that will: a. gradually reestablish a manufacturing economy of not only high tech goods and system, but also low tech goods to use a. domestically b. for export Basically, this is what China is doing. What applies to the United States also applies to Europe. Europe is ahead of the U.S. in this regard in that its gold reserves ( in proportion to the size of its economy and overall debt)is higher. Also Europe is diversified and more self sufficient in termsof production of high and low tech goods, both for domestic use andfor export. Oil and natural gas , their temporary shortgages and price swings,just as the threat of war in the middle east and North Korea, play a rolein how gold relates in price to the USD. But this is not the long rangerelationship. All the various factors that affect the price of these energycommodities as well as the world political situation must be analyzedcarefully, but they should not obscure this future stronger relationship that gold will have as it is used within a new world economic system.AX Goldrush (01/01/03; 13:25:45MT - usagold.com msg#: 93128) More info on Pak incident BAGRAM AIR BASE, Afghanistan (CNN) -- A U.S. soldier -- grazed on his head by a bullet near the Afghanistan-Pakistan border -- was shot by a Pakistani border guard, U.S. military officials said Tuesday. The officials said the border guard is in Pakistani custody. Brig. Saulat Raza, a Pakistani armed forces spokesman, said "We are investigating the incident." Previously, Sunday's incident was described as an exchange of enemy gunfire. He was hit by an AK-47 automatic rifle. The soldier was transferred to Landstuhl Regional Medical Center in Germany for further examination and neurological testing, a statement said. His condition is listed as stable. The incident occurred near Shkin in eastern Afghanistan, a report by American Forces Press Service said. U.S. soldiers were observing Pakistani border guards destroy inert missiles found in the area. The border in the region is in dispute, but U.S. officials said the American soldiers were within Afghanistan. According to officials, one of the border guards approached the U.S. patrol and was asked by the American soldiers to return to his side of the boundary. As he began to walk back, the border guard turned, dropped to one knee and fired on the Americans, wounding the U.S. soldier. After the border guard ran into a nearby abandoned religious school, U.S. soldiers said they took more fire from the building and called in close-air support. An AV-8B Harrier jet dropped a 500-pound precision-guided bomb on the building, according to the report. American officials said U.S. and Pakistani troops continue to work closely together to patrol the border area between Afghanistan and Pakistan. Goldrush (01/01/03; 13:05:29MT - usagold.com msg#: 93127) This is bad news for Afghanistan deployment http://www.washingtonpost.com/wp-dyn/articles/A60833-2002Dec31.html U.S. Reports Clash With Pakistani Border Unit American Wounded; Bomb Ends Skirmish By Marc KaufmanWashington Post Staff WriterWednesday, January 1, 2003; Page A01 BAGRAM AIR BASE, Afghanistan, Dec. 31 -- U.S. military authorities announced today that a brief shootout erupted between U.S. and Pakistani troops along the Afghan border Sunday, prompting the U.S. forces to call in an F-16 warplane that dropped a 500-pound bomb on the Pakistanis to end the clash.One U.S. soldier was shot and wounded as the encounter began, the U.S. military said in a statement at Bagram, just north of Kabul, the capital. The soldier, whose identity was withheld, was flown to Germany for medical treatment and was listed in stable condition at a military facility there, the statement said.Reports from Pakistani officials in South Waziristan, the tribal administrative zone on the Pakistani side of the border, said at least two members of the Pakistani Border Scouts were killed in the bombing, which they said hit a Muslim religious school on the Pakistani side of the border in which some of the Border Scouts had taken refuge.U.S. and Pakistani military authorities sought to play down the clash and stressed that both sides remain determined to cooperate in hunting down remnants of Taliban and al Qaeda forces who have redoubts in the isolated border hills and move back and forth across a tense and loosely policed frontier. But the shooting raised again the question of whether some Pakistani soldiers and tribal leaders still sympathize with their Taliban neighbors, whom they long supported until the Sept. 11, 2001, attacks on the World Trade Center and the Pentagon.___________________Pakistan is not really an ally. PM just needs our financialhelp, billions are going to Pak, but the people support bin Laden.Not to mention the fact Pak has been dealing with NK.Pak gave NK nuclear tech in exchange for Missile tech.Bagram air base is a trap just like it was for the Soviets.Morale of troops is low, its a quagmire situation and the military types know it. Belgian (01/01/03; 12:54:23MT - usagold.com msg#: 93126) @ elevator guy The oil for euro transition is not the kind of hiphop-1-2-3 enterprise. It is an event with HUUUUUGE implications and a dramatic change. That's why I'm hyper-focused on Saudi Arabia. Making the euro the "new" oil-currency can only happen with The Biggest oil-swing brother who has tremendous oil-taps and huge, available, cheap reserves.All other oil producers simply watch if this euro/oil/gold-cat can come down safely from its three. For the time being there is no other alternative than to sell oil for dollars under whatever conditions.It is only because the Saudi Kingdom is (and will remain) attached to the yellow wealth that this concept can get airborne and is, at the same time, offering an ideal solution to the coming financial/monetary-collapse.We couldn't get much further anyway (economically) with the suffocating dollar-debt. Or is it because salvage is in the air that so much debt and confetti is produced (printing presses) ? Think it is both of the arguments.I must admit that I'm still searching for the deepioest of clues on the Venezuela events. Maybe the US wants to capture/control more oil than necessary for its consumption at home as to sell the excess for its future needed euro-reserves, next to the remaining Gold-reserves (exchange reserves that is). Who knows ?The same will probably apply for all underground Gold (anywhere) that might be sold to the BIS in exchange for euro-reserves.The 75% of Global dollar-reserves exchanged for still to be mined Gold at enormous prices. This under full "regulation" of course. As oil in the ground is of "national/international" importance. See China and Russia (Japan-Jipangu) stepping up their Gold-explorations.The whole situation in South Africa might change (for the good) dramatically and start acting as the developping engine for the development of the black continent...at last !? All this on the basis of underground Gold that now will (can be) me mined, under strict control, as pure wealth instead of an ordinarry commodity. That's how South Africa's prosperity started anyway with dear old Cecil Rhodes. Remember that the rand once equaled the dollar in exchange-value. It decimated since then (10 rand to the dollar). ax (01/01/03; 12:22:36MT - usagold.com msg#: 93125) THE ECONOMY AS 2003 BEGINS http://biz.yahoo.com/rb/030101/economy_newyear_2.html Story:ReutersEconomy Begins 2003 on Fretful NoteWednesday January 1, 10:56 am ET By Glenn Somerville WASHINGTON (Reuters) - As it did a year ago, the U.S. economy is entering 2003 in a fretful state.Concern about the consequences of potential war with Iraq cast a pall over 2003 prospects much as the aftershock of the Sept. 11, 2001, terror attacks did on 2002 -- a year many Americans may wish to forget.ADVERTISEMENTU.S. stock prices closed out 2002 with their first three-year losing streak since 1939 to 1941, the year-end holiday shopping season held little cheer, companies still were shedding jobs by the thousands and data showed consumer moods were souring.War with Iraq -- whether and when it happens and how long it lasts -- is the key to changing the economy's fortunes in the New Year, economists say.The Conference Board, a private business research group, said on Tuesday its Consumer Confidence Index dropped to 80.3 in December from a revised 84.9 in November, a far steeper fall than economists had expected.Consumers, whose spending drives two-thirds of U.S. economic growth, were worried about rising unemployment, up to 6 percent in November from 5.7 percent in October. But analysts said the underlying cause of sagging confidence was war fear."The war risks are just enormous and it's causing people and businesses to just sit and wait," said economist Douglas Lee of the forecasting firm Economics from Washington. "It's the uncertainty of the situation that is the problem and if that was resolved then business could begin to move forward."The Bush administration has steadily ratcheted up pressure on Iraq, declaring it in breach of a U.N. Security Council resolution on disarmament and positioning forces for a strike while leaving vague when one might occur, if at all. DURATION OF WAR MATTERSEconomist Sung Won Sohn of Wells Fargo Bank in Minneapolis said the potential impact on the U.S. economy varied widely, depending on whether a war ends with swift success -- as did the 1991 Gulf War -- or becomes protracted and nasty."A quick and decisive war against Iraq would boost confidence and slash oil prices," Sohn said."On the other hand, a messy and costly war with terrorist attacks on oil facilities here and abroad could send oil prices to $80 a barrel, equivalent to the price of oil during the Iranian revolution of the 1970s," he added.Oil prices fell on Tuesday for a second straight day to about $31.20 a barrel for crude futures, down about $2.50 from two-year highs set on Monday, but still finished out the year 56 percent above average prices at the start of 2002.Speaking to reporters at his Texas ranch on Tuesday, President Bush again emphasized his dissatisfaction with Iraqi President Saddam Hussein's level of compliance with disarmament resolutions and warned Iraq was a threat to U.S. economic well-being."An attack from Saddam Hussein or a surrogate of Saddam Hussein would cripple our economy," said Bush, who is expected to propose tax cuts and other measures later this month in a bid to reinvigorate the economy.Aside from Iraq, there has been growing strain with North Korea over its renewed pursuit of a nuclear arsenal, although Bush insisted on Tuesday this amounted to a "diplomatic showdown" rather than a military one. NOT ALL GLOOMYIf some of the cloud cover lifts on the international front, analysts say several factors augur well for a pickup.Economist John Silvia of First Union Corp. in Charlotte, North Carolina, says corporate profits are relatively steady and personal income growth is solid even though consumers clearly are saving more.Sohn agreed, noting, "As we enter 2003, the key is to have the consumer hang in there, not necessarily go on a spending binge, but most of all we want business confidence to pick up and that is being held back by geopolitical concerns."Interest rates are already the lowest in four decades, and Federal Reserve Chairman Alan Greenspan said earlier this month the economy was still working through a "soft patch" that should become easier to navigate if global tensions ease.Like private analysts, Greenspan said it was vital that business spending improve, saying "any significant fall in the current geopolitical and other risks should noticeably improve capital outlays, the indispensable spur to a path of increased economic growth."That brings the scenario back to Iraq, as was the case more than a decade ago when Bush's father was president and James Baker was secretary of state. Then, as now, Americans were suffering a crisis of confidence as they worried about the consequences of war with Iraq, which had invaded Kuwait.At a news conference, Baker explained the economic impact of Iraq's actions on the United States as "jobs, jobs, jobs."That Gulf War, from Jan. 17, 1991, until Iraq surrendered 42 days later, was short and tidy. Oil prices, up on war fears, tumbled soon after the first bombs fell. Stock markets rose.The brief conflict lifted a fog of uncertainty over the U.S. economy and helped usher in the longest peacetime economic expansion in American history. --------------------ax: The United States and world economy will not begin any significant recovery based on the outcome of any Middle Eastern or North Korean issue. Nor will the the price of gold be permanently affected by such outcomes. The economy and gold will be affected in a significant way only by the reincorporation of gold into the U.S. and world financial systems. This has already been hinted at by Alan Greenspan, talked about by some of us on this forum, and predicted by some essay writers on other forums. The year 2003 shall see a major change in the relationship of gold to economic life. Belgian (01/01/03; 12:16:12MT - usagold.com msg#: 93124) @ Pizz Mister Gold(miner)-Sinclair's POG=1,250$ is the simpliest of Fibonacci-math (1.618 factor) on the POG-30 yrs chart.Sinclair's POG projections miss the following :The euro wants to *displace* the US$ : Is in progress and probably irreversable when having passed parity. Next target for €/$ = 1.07 to 1.10.The euro wants to become the new reserve-currency and in order to achieve this the euro must become an *oil-currency*. This will happen with the backing of Saudi Arabia (and Iran). Guess why nobody touches Saudi Arabia (and Osama bin Laden) !!! Yes Saudi Arabia is left alone ! Iraq (and Yemen) is the scapegoat.Saudi Arabia will make or break the euro as an oil-currency on the condition that the euro makes "the" Free Physical Gold Market, IN EURO, happen and is aligned to it ! Fair deal isn't it ?POG will never see the EW-Prechter sub 200$ because the euro made it already to its first phase (dollar-displacement).Have a nice trip to Reno, Pizz ! Boilermaker (01/01/03; 11:58:06MT - usagold.com msg#: 93123) Natural Gas Supply/Demand http://www.energypulse.net/centers/article/article_display.cfm?a_id=121 snip:"As a result of this rapidly-growing imbalance, supplies of natural gas available to the U.S. market are virtually certain to fall at least 1.5 TCf below EIA's most recent (12/9/02) ‘03 consumption forecast of 23.11 TCf, forcing sharp price increases to drive out-of-the market at least 5-7% of expected ’03 demand. This imbalance in turn is the direct of result of a head-on collision of two "tectonic plates" set in motion long ago:1.The rapid decline, after more than three decades of development, of almost every major conventional source of natural gas supply in the U.S. and the Albertan fields in Canada. 2.The rapid shift, as a result of the long-delayed impact of Clean Air Act requirements enacted in the early 1990's, to natural gas-fired generating units as the marginal source of supply to serve virtually all of the incremental electricity needs of the U.S. economy (by far the most electricity-intensive economy in the world) for many years to come."comment: This author has the same message that BB has been preaching. I do believe, however, that we may dodge a serious NG shortage this winter due to the recent warm spell that has brought some relief to storage draws. With respect to NG the US is approaching the same supply/demand situation that it was approching in 1970 with the oil market. We had gone (with oil) from a net exporter to a significant importer and became vulnerable to a supply and price shock that put our economy in the dumper. If you read the linked article above be sure to read the "readers comments" some of which are also very worthwhile.Cheers and Happy New Year to allBoilermaker Genoo (01/01/03; 11:27:52MT - usagold.com msg#: 93122) LULA appears doomed...a case of desperation and excessive expectations... 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=APhMiaRQoQnJhemls Since Lula's election, the real strengthened 5 percent and Brazil's benchmark 8 percent bond due in 2014 climbed 16 percent, cutting the year's decline to about 14 percent. With the economy choked by benchmark domestic interest rates of 25 percent and annual inflation accelerating at its fastest annual pace in more than six years, it may be difficult for Lula to raise the $61 billion he needs to pay debt in his first six months in office, MFS Investment's Dow said. Joao Carlos Goncalves, secretary-general of Brazil's 16 million-member Forca Sindical labor federation, said Lula may lose allies if he doesn't deliver quickly on promises for higher wages. ``We will be there to hold him to his promises,'' said Antonio Bento de Oliveira, 38, a government worker in Bahia, said as he waited to get a glimpse of Lula outside congress. Comment: As Lula falters it will be the beginning of the further spread of the South American econoomic illness.... hmmm, I wonder to what degree this disease might be contagious.....for Citibank amoung others it must a helpless feeling having just one option... endlessly looking at the weathervane and wondering just when the strong northerlies will begin to blow. ax (01/01/03; 11:12:38MT - usagold.com msg#: 93121) HAPPY NEW YEAR 2003 Happy New Year to the Gold Forum and to its many knowledgeable participants. I appreciate the opportunity that the Forum offers me to learn. May 2003 bring an improvement in the United States andworld economy with gold playing the pivotal role for whichit was designed.ax Paper Avalanche (01/01/03; 11:06:43MT - usagold.com msg#: 93120) First CHINA goes for the gold, now dumping ties with dollar 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=APhMS2BX4Q2hpbmEg My new years resolution is to provide snips with my link, so here goes:"Beijing, Jan. 2 (Bloomberg) -- China, whose economy has outgrown its biggest rivals' for the past seven years, may no longer need a weak currency to keep its edge. Executives and analysts say a stronger yuan would lift company earnings and economic growth. Since China pegged the yuan at 8.3 to the dollar in 1995, cheap exports have fueled a $199 billion trade surplus and low manufacturing costs have drawn $308 billion in foreign investment. China's growing clout as the world's largest consumer market may help it sustain last year's 8 percent economic growth rate, even with a stronger yuan making exports costlier. Some of China's biggest companies say they'd gain from a stronger currency as they import more and expand overseas. China Eastern Airlines Corp.'s fuel bill and foreign debt burden would shrink. China Unicom Ltd. could buy imported phone equipment more cheaply. Oilfields from Indonesia to Algeria would cost less for Sinopec, the nation's largest listed company. ``Overseas assets would be cheaper for us if the yuan gained in value,'' said Shao Jingyang, a deputy director at China Petroleum & Chemical Corp., known as Sinopec. A 5 percent gain in the yuan would also cut the cost of Sinopec's planned 2003 oil imports by more than $100 million, based on current prices. Motorola Inc. and other foreign investors say a stronger yuan wouldn't make them leave. While costs would rise and their exports would become more expensive in the U.S. and elsewhere, China's market of 1.3 billion consumers is reason enough to stay. Boeing, Wal-Mart A stronger yuan would make Boeing Co. planes and General Electric Co. turbine engines cheaper in China, boosting their exports and helping to narrow the U.S.'s largest trade deficit with any country. Companies such as Wal-Mart Stores Inc., which buys $10 billion in goods from China each year, may suffer as China-made clothes, computer parts and other goods became pricier. Goldman Sachs Group Inc. estimates that the yuan is undervalued by 15 percent. China is growing more open to calls from Japanese Finance Minister Masajuro Shiokawa and other foreign officials to let the currency appreciate, analysts say. Chinese Finance Minister Xiang Huaicheng said in November calls for a stronger yuan have increased. ``I personally feel some pressure, and this is something the U.S. is pondering,'' Xiang said. The U.S. trade deficit with China widened to $83.1 billion in the first 10 months of 2002 from $70.4 billion a year earlier."THIS IS HUGE.China has set the course for the rest of the world to follow in its renunciation of the US peso. How long until this causes a mass sell off of us treasuries? Things are accelerating IMO.Happy new year!Paper AVALANCHE elevator guy (01/01/03; 10:53:03MT - usagold.com msg#: 93119) checking out for a while, catch ya later . elevator guy (01/01/03; 10:51:31MT - usagold.com msg#: 93118) @erayboy, post# 93116 Thanks for that chart! Looking at the chart for the small traders, it is like a mirror image of the commercials, where the commercials are short, the small traders are long.Seems like the little folk hope expectantly, almost romantically, for gold to go up, where the big players are willing to gouge out the eyes of those who take the long side of the bet, counting on the bull move to peak out soon? elevator guy (01/01/03; 10:44:37MT - usagold.com msg#: 93117) Belgian, 93106 Sir Belgian, thank you kindly for your reply."Will oil for euro, prevent (nuclear) drama or will oil for euro come after the dust has settled?"Or is there still another possibility that the oil-for-dollars system can be propped up for a while longer with "small" conventional wars? Or political medling? (like what's going on in Venezuela?) erayboy (01/01/03; 10:42:27MT - usagold.com msg#: 93116) Chart of GOLD COTs - Commercials Shorted Entire BULL MOVE - Link http://www.sharelynx.net/Markets/Charts/COTAU.htm Seems the Commercials have been shorting the entire BULL MOVE in POG. The graph appears to be rolling over. The RISK control programs have them buying actuals -- critical mass -- as the NOTIONAL values become real pricing influences.A push to $400 and they are TOAST. elevator guy (01/01/03; 10:35:38MT - usagold.com msg#: 93115) @Hipplebeck, 93104 "The Mother of All Wars"?That has a dismal, forebodeing ring to it.Thank you for your reply. elevator guy (01/01/03; 10:32:07MT - usagold.com msg#: 93114) @Black Blade I understand your meaning as this: That the Iraq war will not be able to save our economy alone.I'm gonna take a little more time to mull it over, but I just wanted to thank you now for your response.-Vic Belgian (01/01/03; 09:12:33MT - usagold.com msg#: 93113) @ Mikal and Silvercollector : President Bush.... Yes gentlemen, Mister President was highly confused ! Something decisive must have happened that might (!) be reason for a 180° turn (repeat : might) ?The pope did not mentioned "Iraq" but with the ME , he ment clearly : Iraq !When Bush said : dammage our "economy"...did he ment : the "US$" ? North Korea seems to increase its nuke-pressure in proportion to the US>Iraq war-threath ? Funny isn't it ?Who's next in line of the axis of evil ? Iran ? Also a would be nuclear power ? Action = Reaction ! Pizz (01/01/03; 08:55:51MT - usagold.com msg#: 93112) R Powell Rich,The after hours move I was referring to was in domestic silver stocks - three or four large blocks on a .10 uptick.This was prior to the dime or so increase in spot Friday.With regards to Sinclair, IMHO his technical analysis is second to none, and his opinion of the Elliot people (short term) is put your money where your mouth is. He's offered 100K of his own money in 1000 dollar lots to any Elliot follower that Gold will trade at 401 next year before their continually bearish stance that gold is heading back to 200.Any Elliot follower has to e-mail the acceptance and he'll sent them a binding contract - no BS.As far as his fundamentals and track record, it's about the best I've seen. I just went back and listened to his July interview on Financial Sense, and this guy is dead on in his analysis. I also agree with his outlook of going back to a quasi gold standard. . .the paper pushers will not have too much choice. . . ., but I think his 500 dollar figure may be a bit conservative and his July prediction of 1250 gold at the top of this bull - years out- may be a bit low also.Thanks for the response - I'm off to Reno for a few days R & R. Need a different casino to rest the mind a bit. . .Pizz Belgian (01/01/03; 08:52:17MT - usagold.com msg#: 93111) Shroder (Germany) NOT Bush...in Shangai ! While President Bush expresses some hot and cold, confusing, hints about the US-ME policies (newyear-interview)...the old Euroland continent dreams (again) about the ancient Orient Express (a magnetic one this time) as the new China/Euroland, *mutual* tradeline. Next is the re-opening of the Eurasian silk-route (Germany/France print the new afghani-currency).Euroland even offered to attach the afghani to the euro.These euro-dynamics are unmistakably in progress and say much more about the *future* euro-currency than about the present dollar, from an economical standpoint. The US will never be excluded from world-trade but will slowly lose its preferential status for the only reason of the mis-management of its currency, totally damaged and irreparable. Originally the euro was builded on a 5% Gold backing only. At that time the euro was not "that" ambitious and desired to buy oil for euro "only" for Euroland. Later on the BIS wanted 80% of the world's oil to be bought with euro and therefore needed a gold-backing with 15% > 30% (France/Germany/Italy). (Another #60253)Is the above responsible for the US's seemingly hesitation on ME-war as I do percept it, today, and suspected it months ago ??? This,co-incidentally, together with Gold (POG) shining a bit brighter with the breakthrough of 334$ and reaching the 354$/360$ BIS ceiling.Remember that Another's timing of the Big POG Gap was around 2000/2001. He also "cautiously" mentioned the unknown outcome of geo-political events. In other words..."money" decides on peace and war !Don't buy the Gold-Strength argument on the media's boring explanations about war and oil-prices. That is past blablabla and only for page/screen-filling ! THE GOLD MARKET HAS CHANGED !!!Another aspect about the ME's monetary initiative, never gets the "WHY" question by western, complacent, well paid, observers : The Gold-dinar. Why does the ME suddenly wants a Gold-dinar when the euro is definitely and irreversably into real existance ? They (ME) must surely be well-informed about and highly-inspired by, the euro/gold/oil-concept. They want to copy the model.Another #60253 : The selling of old dollar-reserves (quite a stash), "alone", will reprise Gold in terms of US$ at least " 6000$/oz ". It's present *** INTERBANK *** Reseve-Value !!! The euro will reach 100% gold-backing at these prices. The US will have to take euro (not zeuro) as exchange-reserve !Can the *euro-concept* avoid ME-war ? Have central bankers ever started or stopped wars ? Does there really exist a threath to "Weimarise" the dollar-currency ? Hahaaaaa !Can the euro's present fortunes been halted and reversed ?Woeeeeeejjjjiiii !Will see... mikal (01/01/03; 08:37:20MT - usagold.com msg#: 93110) @silvercollector Re: Bushes statement. In the context of all the words he spoke yesterday, he meant that a terrorist incident "attack" would "cripple the economy". So as to justify disarming the Iraqi WMD capability to damage the U.S. economy, he will not allow it to weaken our "strong economy". silvercollector (01/01/03; 08:27:13MT - usagold.com msg#: 93109) Headline News I was checking for posts/links on this one."Iraq attack will cripple US economy", Bush.I don't get this one. If Bush says (knows) this why attack? I thought the premise was to improve the economy. With Annan's statement yesterday (Iraq co-operating) do I sense the easing of ME tension? USAGOLD / Centennial Precious Metals, Inc. (01/01/03; 07:14:32MT - usagold.com msg#: 93108) A complete gold education -- in bookstores for $14.95, get it here for $5.95 http://www.usagold.com/cpm/abcs.html
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