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ARCHIVED DISCUSSION FROM 9/13/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Sundeck (9/13/06; 23:57:40MT - usagold.com msg#: 147451)
Deputy Russian central bank chief dies after shooting
http://en.rian.ru/russia/20060914/53855496.html
Snip:

"...
MOSCOW, September 14 (RIA Novosti) - The first deputy chairman of the Central Bank of Russia died Thursday morning after gunmen opened fire on him with automatic weapons late Wednesday, hospital officials said.
..."

Sundeck: Mmmm...cleaning up the banking sector in Russia has its risks...

:-(

Armageddon (9/13/06; 23:02:24MT - usagold.com msg#: 147450)
@Sierra Madre - 3,000 tons of gold
I have read recently that top advisors to the Central Bank of China have said they need around 3,000 tons of gold to be in line with current European guidelines for gold ownership as a percentage of the economic output. China has also very recently stated that they do not want any more growth in their foreign exchange reserves (including dollar reserves) and they plan on spending those dollars on commodities and gold and also other imports. Furthermore the last article I posted here stated that a top legislator in China said that FULL yuan convertability might happen in 2008. As you said the reason China needs that gold is to maintain "CONFIDENCE" in the paper currency and to intervene in the gold market when their currency becomes weak against gold after the yuan is fully floated.

I just added 2 + 2 + 2 and got 6. :)

I think China is probably going to start buying gold in greater quantities in the next 2 years in order to be ready for the full convertability of the yuan on the international market and that gold will be used to stabablize the value of the yuan on the global market and to promote confidence in the yuan by foreigners.




Sierra Madre (9/13/06; 22:56:50MT - usagold.com msg#: 147449)
Mundell: where does he stand?

I spoke with Mundell a few years ago, and asked him about the Balance of Trade deficit (it was then, only a fraction of what it is today, but already quite worrisome at that level) and I was simply DUMBFOUNDED at his reply. Now get this:

He answered that there was a Balance of Trade deficit, because foreigners were so anxious to purchase stocks and bonds from the US. Foreigners were feverishly purchasing American stocks and bonds, and exports could just not keep up with the amounts of money coming into the country to buy stocks and bonds.. Thus, the Trade Deficit was the Foreigners fault. Not credit excess in the US!

I could not believe my ears! "The cart before the horse", is all I could think of. The man has "chutzpah", I may say.

The US line (and IMF, too) is essentially the same today. "China is responsible for the Trade Deficit because it won't revalue its currency". It's always convenient to point the finger at someone else, for one's own sins.

Take it from there.

SIERRA



Chris Powell (9/13/06; 22:48:45MT - usagold.com msg#: 147448)
Morgan Chase fined, censured for short-selling violations
NYSE Fines 3 Firms for Violations

From The Wall Street Journal
Thursday, September 14, 2006

NEW YORK -- NYSE Regulation Inc., the New York Stock Exchange's regulatory arm, said it fined Citigroup Inc., J.P. Morgan Chase & Co., and Wachovia Corp. a combined $3.1 million for separate violations of exchange rules.

J.P. Morgan was fined $400,000 and censured for violations of short-selling rules between 2001 and 2005. The NYSE said violations primarily involved the mismarking of orders.

Citigroup was fined $500,000 for supervisory failures on its precious-metals trading desk between January 2002 and January 2003. The NYSE said Citigroup's sole precious-metals trader at the time, Gail Edmonds, traded "in excess of her authorized limits."

Wachovia was fined $2.25 million for failing to retain and review email communications made between January 1999 and April 2006. The NYSE said $1.65 million of the fine will be waived in recognition of the payment as part of a regulatory settlement with the North American Securities Administrators Association relating to email communications.

In agreeing to the penalties, the companies neither admitted nor denied guilt.

A Citigroup spokeswoman said, "We are pleased to have this matter resolved. This settlement relates to an incident dating back to 2002; the firm took immediate action when the matter was discovered, and we have since strengthened our internal controls. Citigroup remains committed to the highest levels of governance and transparency."

A representative at Wachovia wasn't available to comment.

A J.P. Morgan spokesman declined to comment.

Sierra Madre (9/13/06; 22:43:34MT - usagold.com msg#: 147447)
Armageddon: Why 3000 tons?

Armageddon - you state that China would need 3,000 tons of gold to back up its currency if there was convertibility for the Yuan.

I don't see why any gold at all is needed. No currency in the world is redeemable in gold or anything else, for that matter. So - the gold is there more for window dressing than for anything else - insofar as "backing the currrency".

Now, if the politicians and Central Bankers and/or whoever runs things in this world, really did not care about gold anymore, no Central Bank would have to hold a single ounce. But, they do own gold, just how much we do not know; perhaps they hang on to some because they have to dish it out in doses to keep the price down and maintain confidence in their own currencies.

In other words, the purpose of gold held by C.B.s is - to fight gold, nothing else. Nothing to do with backing the currency!

So, China doesn't really need all that gold. What they have is quite sufficient. Heck, the USA probably hasn't any gold at all (no audit since Eisenhower)and look at how they carry on the fight against it.

It would be nice if the Chinese did buy the gold necessary to top up the vaults to 3,000 tons. But, it may be quite a while before it happens. For practical purposes, maybe never.

SIERRA

Goldilox (9/13/06; 21:59:44MT - usagold.com msg#: 147446)
Proton 21 - The New Fusion?
http://www.americanantigravity.com/articles/587/1/Proton-21---The-New-Fusion
@Ned,

snip:

By subjecting a copper electrode to a gigawatt pulse of energy, Dr. Stanislav Adamenko believes that he's found a new form of fusion that occurs inside a millimeter sized plasma that forms in the electrode. Has Adamenko finally cracked the code for solid-state fusion, and what potential for future energy does it hold? He joins us for the inside story on Proton 21's research in creating "The New Fusion"...

-Goldilox

Not your typical "cold fusion" claim, but some serious research into small scale nuclear reactions. Good after-hours reading.

Maybe "peak oil" is not the end of civilization, but the kick in the pants needed to move on!

The Invisible Hand (9/13/06; 20:29:03MT - usagold.com msg#: 147445)
IMF news from the British Press
http://money.guardian.co.uk/houseprices/story/0,,1872061,00.html
IMF WARNING FOR UK HOUSING
IMF warns that Britain's over-valued housing market is vulnerable to further increases in interest rates

http://politics.guardian.co.uk/economics/story/0,,1872002,00.html
BRITAIN ISSUES WORLD BANK £50M ULTIMATUM
· Benn ties extra funding to softer rules for poor states
· Wolfowitz's hard line on corruption also attacked

http://news.independent.co.uk/business/comment/article1578760.ece
Hamish McRae: IS THE MIGHTY CHINA STRONG ENOUGH TO SURVIVE A US-LED GLOBAL RECESSION?
China is vastly more important than it was six years ago during the last global downswing
SNIPS
This is the usual autumn meeting that takes place before the annual meetings of the International Monetary Fund and World Bank but the fact that it is in Asia gives the opportunity for the whole financial community to focus on what is happening in the region. Henry Paulson, the US Treasury Secretary, WILL GO ON TO CHINA after the meetings.
+
My own view, for what it is worth, is that the more likely trigger for the next downturn will be something happening to house prices worldwide. There is an element of "bubble" to prices in many markets, including the UK (as the new IMF Economic Outlook acknowledges). But the second most likely trigger will be some disruption in the Chinese economy, leading to disruption more generally throughout East Asia. But all this is, I think, still some way - perhaps a couple of years - in the future.

http://business.timesonline.co.uk/article/0,,13129-2357344,00.html
PAULSON WOOS MIGHTY CHINA
Henry Paulson, the US Treasury Secretary, has urged China to open up to market forces

http://business.timesonline.co.uk/article/0,,9072-2356826,00.html
CHÁVEZ SETS POLICING EXPERTISE AS PRICE OF CHEAP FUEL
PRESIDENT CHÁVEZ of Venezuela is striking a deal with Ken Livingstone, the Mayor of London, to supply Londoners with cheap fuel in return for access to London's CCTV and genetic fingerprinting expertise

==

I said in today's msg#: 147423:
If China does not want to submit voluntarily to dollar intervention,
it is useless for the Chinese to travel this week-end to Singapore.

Bad luck! Even if they don't go to Singapore, Paulson will come to China.

Heads you lose, tails I win!

Armageddon (9/13/06; 19:13:23MT - usagold.com msg#: 147444)
Chinese Yuan Full Convertability in 2008?
The following article states that the Chinese yuan may be fully convertable in 2008. I believe this further strengthens the arguement for a higher gold prices in the years ahead since the Chinese Central Bank is going to need at least 3,000 tons of gold to back up its fully convertable currency.

--------------------------------------------------------------
China to Start Yuan Convertibility Trial in Tianjin (Update2)

By Lee Spears and Jake Lee

Sept. 13 (Bloomberg) -- China will allow investors in the northern city of Tianjin greater freedom to buy and sell currencies as part of moves towards a fully convertible yuan.

China's State Administration of Foreign Exchange has approved Tianjin's plan for ``limited convertibility'' of the yuan at the Binhai economic area, the city's mayor Dai Xianglong said at a conference in Xianghe, outside Beijing. Tianjin will adopt a ``floating foreign exchange mechanism,'' he said.

The comments by Dai, a former governor of the People's Bank of China, add to signs that the government will use a more flexible exchange-rate to cool the world's fastest-growing major economy. A senior Chinese legislator today said 2008 may be ``the right time'' to allow full convertibility of the currency.

``China's reforms are always gradualist and now we're seeing a pilot program along the road of yuan reforms,'' said Wang Qing, head of China strategy at Bank of America in Hong Kong. ``They're creating an experiment in a physical environment that shows they're on the direction of moving the yuan to be convertible.''

Since ending a peg to the dollar on July 21, 2005, China's central bank has allowed the yuan to rise about 2 percent. The People's Bank of China's ability to control the market would be reduced were the yuan more widely convertible. The currency can now only be bought or sold for foreign trade purposes or to fund approved capital investment projects.

``Ultimate Goal''

``The ultimate goal is to make the yuan fully convertible,'' Cheng Siwei, the vice chairman of the Standing Committee of the National People's Congress, China's parliament, said at the forum. China's cabinet plays a greater role in setting currency policy than its parliament.

A more flexible yuan will help the central bank use its ``monetary policy instruments more effectively,'' the International Monetary Fund said Sept. 11. The fund is meeting this week and next in Singapore. The Group of Seven nations, which told China in April to let the yuan appreciate, also meets this week in Singapore.

U.S. Treasury Secretary Henry Paulson may use a speech today to pressure China to allow faster currency gains to curb its exports and help cut the U.S. trade deficit. Paulson will speak at the Treasury Department at 11 a.m. New York time.

Trading Band

Since ending the currency's peg, the central bank has allowed it to float with reference to a basket of currencies including the euro, yen and South Korea's won. It is not allowed to fluctuate more than 0.3 percent against the dollar from a rate set daily by the central bank.

The China Securities Journal said today China may widen the yuan's trading band, citing experts it did not name. Larger fluctuations would discourage inflows by increasing the risk for speculators, according to the Journal, affiliated with state-run news agency Xinhua.

The People's Bank of China, the country's central bank, said it has no plans to release any statement on a widening of the trading band for the yuan

``We have no press releases or statements for the moment,'' said an spokeswomen in Beijing, who declined to be identified.

The yuan weakened 0.03 percent to 7.9486 against the dollar as of 5:30 p.m. in Shanghai, according to the Web site of the China Foreign Exchange Trade System.

``There's a consensus that Asia including China will perhaps need to do more in order to address the trade imbalances and the global imbalances,'' said Tai Hui, an economist at Standard Chartered Bank in Hong Kong.

Trial Zone

The Binhai zone in Tianjin is replicating the financial services pioneered by Shanghai's Pudong financial district and Beijing's Finance Street area to attract overseas companies including HSBC Holdings Plc. Under World Trade Organization rules, China must let overseas lenders tap the nation's $1.9 trillion in savings through lending and taking deposits in the local currency by Jan. 1.

China Construction Bank Corp., the nation's fourth-largest lender, said it's been invited to take part in Binhai's trial relaxation of currency controls, the bank's chairman Guo Shuqing said in a Sept. 11 interview.

Companies will be granted ``preferential treatment'' to exchange ``small amounts'' of local currency into U.S. dollars for investment purposes, Guo said. The program will be extended to individuals later, he said, without giving a timetable.

The city will also adopt a ``floating foreign exchange management mechanism'' that is ``determined by market supply but regulated,'' Dai said, without giving details.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net
Last Updated: September 13, 2006 06:27 EDT

--------------------------------------------------------------

Ned (9/13/06; 19:12:37MT - usagold.com msg#: 147443)
Here's one of my mentor's saying's......................
"Our pending energy supply contraction= no economic growth= no debt service= chaos"

What this boils down to is this, if "peak oil" is here, it's over. If true, gold goes to the moon because US has the most to lose, peak oil = peak USA.

Identifing peak USA = recognizing peak USD

Hello Peak-Oil = Hello Peak USA

Have a nice after-life.

Flaccus (9/13/06; 18:37:10MT - usagold.com msg#: 147442)
Goldie
The real question is not who butters his bread (at the moment its China). Its at what price would the system have remained liquid

The Invisible Hand (9/13/06; 18:16:59MT - usagold.com msg#: 147441)
IMF's De Rato lacks any credibility
The housing market in the US cooling faster than anticipated, he says.

But he does not make any reference to the fact that the US of A artificially popped up its housing bubble to dangerous proportion.

And this dollar-freak is president of an international institute (and, like the central bankers who mark gold to market, is paid for his job with stolen tax money)?

http://news.bbc.co.uk/2/hi/business/5337770.stm
The International Monetary Fund (IMF) has warned that a GLOBAL SLOWDOWN is looking more likely because of high oil prices and a cooler US housing market.

http://www.ft.com/cms/s/368d44d2-42f6-11db-9574-0000779e2340,_i_rssPage=ff3cbaf6-3024-11da-ba9f-00000e2511c8.html
Mr Rato said high oil prices increased the risk of a worldwide ECONOMIC SLOWDOWN.
"With the housing market in the US cooling faster than anticipated, there is a risk of an abrupt slowdown in the US, which could derail the GLOBAL EXPANSION," he said.
Mr Rato warned oil producing-countries that oil nationalism and the recent trend towards increasing taxes on international energy companies would eventually backfire.

He's even confusing global slowdown with global expansion.

Goldilox (9/13/06; 18:16:32MT - usagold.com msg#: 147440)
"Nobel Prize" in Economics
"In 1968, Sveriges Riksbank (Sweden's central bank) instituted this Prize in memory of Alfred Nobel, founder of the Nobel Prize. The first Prize in Economics was awarded to Ragnar Frisch and Jan Tinbergen in 1969."

Not really a Nobel Foundation prize, but a look-alike sponsored wholly by the Swedish Central Bank.

I'll probably draw criticism from "banking fans" for this, but having a Central Bank sponsor this award is a bit of "the fox watching the hen house."

Goldilox (9/13/06; 18:06:48MT - usagold.com msg#: 147439)
Mundell's grasp of the obvious?
snip:

"Mundell argues that the system broke down in the early 1970s because the U.S. rejected the idea of increasing the price of gold-and thus made gold's relationship with the dollar untenable-not because fixed exchange rates were wrong. In fact, had the U.S. revalued gold, the system could have sailed along for another two or three decades."

-Goldilox

Well, the system did sail along for another three decades. It's the coming ones that look particularly shaky. He says nothing about the huge imbalances created by the reserve currency monopoly. I wonder who butters his bread?


TownCrier (9/13/06; 16:03:40MT - usagold.com msg#: 147438)
Gold in the mind of a recent Nobel Prize winner
http://www.usagold.com/gildedopinion/mundell.html
Excerpts from a recent biographical sketch of Robert Mundell:

When Robert Mundell received the Nobel Prize in economics in 1999, the Royal Swedish Academy of Sciences cited his "uncommon-almost prophetic-accuracy in predicting the future development of international monetary arrangements and capital markets" back in the 1960s. He's widely regarded as a pioneer of modern international economics....

Although the Canadian-born economist's work during the 1960s has now become mainstream, a number of policies that he's advocated at various times have not been embraced by the vast majority of his peers. These include his call for a return to a gold standard when U.S. inflation hit double digits in 1980; a return to the post World War II (1946 71) Bretton Woods fixed exchange rate system, modified to correct its defects; and the creation of a global currency...

...Actually, if Mundell could have his way, the entire world would be one big optimum currency area, sharing a global currency. But he admits that political rivalries make it difficult for this to happen because a necessary condition for the creation of a monetary union-global or otherwise-is the creation of a security area. He believes that, in a world where war is a possibility, an international monetary system based on a fiat world currency wouldn't work unless it were backed by one or more of the precious metals. Gold could still be used as a reserve asset in a reformed international monetary system in the 21st century, but it would be a far cry from the international gold standard that prevailed before World War I.

Mundell would be thrilled if the governors of the IMF would give more thought to finding an arrangement to get back to the goals of Bretton Woods. "There was nothing fundamentally wrong with the kind of monetary system we had in the postwar world."

It was a system in which other countries fixed their currencies to the dollar, while the U.S. fixed the price of gold. Gold was convertible but only for foreign monetary authorities. Mundell regards it as having been an ingenious accommodation to the reality of the United States as an economic superpower. In that regard, he quotes Joan Robinson as having once called the IMF an "episode in the history of the dollar."

Mundell argues that the system broke down in the early 1970s because the U.S. rejected the idea of increasing the price of gold-and thus made gold's relationship with the dollar untenable-not because fixed exchange rates were wrong. In fact, had the U.S. revalued gold, the system could have sailed along for another two or three decades.

Mundell believes the best way for a smaller country to achieve monetary stability is to fix its currency to a large and stable currency area. He also feels that the IMF is playing a "divisive role" by encouraging countries to move to flexible exchange rates, "balkanizing the monetary world into a ridiculously large number of tiny currency areas."

^---(full sketch at url)---^

Painted with such a broad brush, it's difficult to tell presicely where Mundell would choose to firmly stand in the real (rather than theoretical) world of geopolicial economics.

I am inclined to think we would have plenty to lock horns over, affording Mundell an opportunity to see further by standing on the shoulders of giants. That is to say, Gentle Reader, that you must not let yourself think for a minute that the "freegold" MTM reserve paradigm has diminished stature simply because you yourself have been treated to an insider's view of its evolution and development through this unique window we have offered here at USAGOLD featuring ANOTHER, FOA, and their supporting cast through the years.]

And while this missing details of Mundell's actual viewpoint are the make-or-break element of any such designs, this sketch is nevertheless important to the casual reader who would otherwise be overwhelmed and lost in discerning the meaning of such details. At a minimum, this article can help the casual reader gain a general appreciation for the fact that gold is indeed an important international asset -- as it can be seen residing prominently in the mind of a very recent Nobel Prize winner.

R.

USAGOLD Daily Market Report (9/13/06; 15:27:56MT - usagold.com msg#: 147437)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

WEDNESDAY Market Excerpts

Gold up after 6-session downdraft

September 13 (from MarketWatch) -- Gold futures closed higher Wednesday as a weaker dollar and stronger crude price gave traders the impetus to step back into the market after five days of losses shaved 8% off the metal's value.

"At the end of the day, we know that the major fundamentals have not changed," said Jon Nadler, investment analyst at bullion dealers Kitco.

"Absent oil and geopolitics, life in the gold market goes on -- albeit at perhaps 'saner' levels than before."

The COMEX December contract closed up $2 at $596.30, having earlier touched a high of $600.50. The contract had seen prices fall by a cumulative $52.60 over the prior five trading days, leaving it at its weakest level since late June on Tuesday.

Merrill Lynch strategist Richard Bernstein said recent dollar strength, sliding oil prices and lowered inflation expectations have all taken the shine off gold. However, while Merrill has never been a firm backer of gold, the investment bank has thought for some time that part of a portfolio should be in gold or gold shares as a hedge against inflation and political risk, said Bernstein.

"We think the hedge is still worth considering," he said.

At TheBullionDesk, analyst James Moore agreed.

"While some are calling the current correction the end of gold's bull run, little has changed in the longer-term picture with the market still seeing historically low mine output," he said.

Moreover, "geopolitical unrest and a questionable future for the U.S. economy make gold a viable safe-haven/anti-inflationary hedge," he said.

The dollar was last trading down 0.2% against the yen and down 0.1% against the euro.

Oil futures were higher for the first time in eight sessions, as traders weighed the latest government data on supplies, showing a bigger-than-expected decline in crude stocks...

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

mikal (9/13/06; 12:27:10MT - usagold.com msg#: 147436)
Environmental remediation with a reward
http://abcnews.go.com/Technology/story?id=97907&page=1
Scientists Mine Gold With Alfalfa | ABCNews | Sept 5, 2006

mikal (9/13/06; 12:18:25MT - usagold.com msg#: 147435)
Internet gaming for gold prize
http://news.yahoo.com/s/nm/20060913/wr_nm/burnett_dc_2
Reality-TV Guru Mogul Barnett Mines Multimedia Gold - Hollywood Reporter - 9/13/06 By Carly Mayberry
Wed Sep 13, 1:40 AM ET
LOS ANGELES (Hollywood Reporter) -
Excerpt: "What began for reality-TV producer Mark Burnett months ago as a mining expedition deeper into the online world is set to become Wednesday a race for $2 million in gold, with the success of his first interactive reality game, "Gold Rush," at stake.
The seven-week contest, which requires competitors to solve several pop culture trivia challenges embedded within CBS television programming and commercials and spanning across magazines, radio, song lyrics and the AOL Web site, was created through a three-way collaboration among Mark Burnett Prods., AOL and CBS.
Unlike Burnett reality projects like "Survivor" and "The Apprentice," which involved casting for their participants, "Gold Rush" is a free-for-all -- anyone over age 18 with an Internet connection is eligible to play.
"These days, you can't go into a workplace without finding people IM-ing or on the Web, therefore the question is: Are more people receiving broadband 9-to-5 or watching TV at night?" Burnett asked. "These activities prove we're heading into a different type of primetime, and the question for me was what to do.""
Mikal - Seems like a lot to ask for just to get into the qualifying round. But considering the prize, many will enter and many more will be tainted by some measure of lust for the "barbarous relic"! ;)

Psilver Psyched (9/13/06; 10:35:59MT - usagold.com msg#: 147432)
ge
Yes, refinery margins are definitely being squeezed. I am more than a bit nervous re:refiners as there are global refineries coming on stream in the next couple of years. If the world has indeed reached "peak oil", then all this new refinery capacity translates into excess refining capacity which will drive the cracking spead way down. I suspect that should that occur, the US refiners would probably lose profitability faster than offshore locations. So, holding drillers makes more sense than refiners at the moment assuming that oil will become less plentiful (assuming you are paying equally to the present value of both industries). Of course, imo...

Goldilox (9/13/06; 10:34:40MT - usagold.com msg#: 147431)
Amazonian tribe protests at oil pollution
http://news.bbc.co.uk/2/hi/americas/5337802.stm
snip:

Indigenous communities of the Peruvian Amazon are stepping up their campaign against oil companies, as the BBC's Dan Collyns reports from the capital, Lima.

Some feel the rights of indigenous populations are not taken seriously

Peru's Amazon state, Loreto, takes up almost a third of the entire country.

A vast expanse of rainforest divided by tributaries of the Amazon river, even its main city Iquitos is only accessible by boat or plane.

But its inaccessibility has not discouraged oil companies from hunting for black gold, and they have been doing so for the last 35 years.

During that time, the Achuar people, who have lived in harmony with their environment in this part of western Amazon for thousands of years, say their way of life has been systematically violated.

The Federation of Native Communities of the Corrientes' river (FECONACO) says that for every barrel of oil there are nine barrels of contaminated water produced as a by-product - a total of more than a million barrels a day.

The water contains high concentrations of hydrocarbons and heavy metals, like lead, cadmium, mercury and arsenic.

The Achuar people say it is destroying the fragile eco-system in which they live, killing the fish and wildlife, contaminating their water source and seriously damaging their health.

-Goldilox

In addition to the challenges of "resource nationalism", the corporations and local governments continue to face challenges from indigenous peoples claiming damage from the extraction activities. Lots of tugs on the old apron strings!

Resource extraction is not getting any easier.

Goldilox (9/13/06; 10:28:06MT - usagold.com msg#: 147430)
Brazil, South Africa, and India strengthen ties
http://news.bbc.co.uk/2/hi/americas/5340990.stm
snip:

Brazil and India have signed multi-million dollar trade deals to improve co-operation between the two major emerging economies.
The agreements were signed at the start of an official visit to Brazil by Indian Prime Minister Manmohan Singh.

The deals involve technology and alternative energy source development.

Brazilian President Luiz Inacio Lula da Silva said strengthening ties formed part of a vision to create a more just economic world order.

The new agreements came on the eve of a summit between India, Brazil and South Africa.

The summit in the capital Brasilia is aimed at improving links between what are three of the world's largest emerging economies.

Mutual praise

Mr Singh had nothing but praise for his host whom he described as a great statesman and a champion of the world's emerging economies.

For his part, the Brazilian president said trade between the two countries had grown from $400m in 1999 to more than $2bn in 2005.

The two men will be joined on Wednesday in Brasilia by the South African President, Thabo Mbeki, for the first summit of the so-called India-Brazil-South Africa Dialogue Forum.

The forum was created in 2003 to improve ties between the three countries.

For the Brazilian president, who is in the midst of a re-election campaign, the summit gives him an opportunity to get across to voters at home that his vision for a Brazil on the international stage is very much alive.

-Goldilox

The players on the globalism stage want more autonomy in their trade relationships, and perhaps less control by "first world" financiers.

ge (9/13/06; 09:09:01MT - usagold.com msg#: 147427)
Psilver Psyched
Thanks for the correction. I did not use as many words as I should to convey my message leading to misunderstanding. My point is that refinery margins are being squeezed. One example of refinery margin which is the widely used is the "3-2-1 crack spread," which assumes that 3 barrels of crude oil can be processed into 2 barrels of gasoline and 1 barrel of distillate fuel oil. This implies 1 barrel oil --> 2/3 barrel gasoline, although the yield is said to depend on the type of crude and refinery. Actually there are three variables in this equation, and, unfortunately I do not know a handy site with a chart in the net that I can link, so used the simpler oil/gas ratio. This may not be very off-topic since some people suggest that oil and gold prices are somehow linked.

Psilver Psyched (9/13/06; 07:30:54MT - usagold.com msg#: 147426)
ge
When crude oil is "cracked" to turn it into gasoline... the higher viscosity (density) crude becomes lower viscosity (density) gasoline. Typically 1 barrel of crude (42 US gal) "in" will yield the equivalent of 50 gallons of gasoline "out"... (Sorry for off topic posting).

The Invisible Hand (9/13/06; 06:44:45MT - usagold.com msg#: 147425)
Complex contradictions
http://www.mosnews.com/news/2006/09/13/sco.shtml
The Invisible Hand (9/13/06; 03:52:35MT - usagold.com msg#: 147420)
Ka-Poom and DDPE
SNIP
The breaking-point [of the IFMS] could be IRAN BEING ADMITTED TO THE SHANGHAI COOPERATION ORGANIZATION.
Another element which could lead Freegold is in the hands of the economic "psychology" of the sheeple.

LINK
SNIP
Russia has no plans to transform the Shanghai Cooperation Organization (SCO) into a military bloc, Russian President Vladimir Putin said at a meeting with foreign political scientists last Saturday, Interfax news agency reports.
"We are not going to turn the Shanghai Cooperation Organization into a military-political bloc. It is an open organization," he said in answers posted on his official website on Wednesday.
While tackling issues related to SCO ENLARGEMENT, it is necessary "to take into account a COMPLEX LINE-UP OF FORCES IN ASIA AND CONTRADICTIONS BETWEEN VARIOUS COUNTRIES," he said.

==

Could one of these contradictions relate to the fact of whether or not, they are MTM-ing their gold reserves?

But this is no joke. The MTM-concept is even appearing in Barrick articles.

ANALYSTS APPLAUD BARRICK'S BUY AND SELL DEALS
http://www.mineweb.net/mining_finance/165880.htm
SNIP
Although Tumazos noted that, "in effect, ABX sold 10% of its reserves for 4% of its enterprise value," nevertheless, he called it "a savvy move to marshal cash as ABX's remaining negative mark-to-market in its 12.3 million ounces total hedge position is near $4 billion."

Complex contradictions, said you?

The Invisible Hand (9/13/06; 06:15:47MT - usagold.com msg#: 147424)
Now we know
http://english.eastday.com/eastday/englishedition/business/userobject1ai2317989.html
ONLY
THE US OF A AND ITS DOLLAR
ARE ALLOWED TO
P L U N D E R


IMF official says "RESOURCES NATIONALISM" could backfire

SNIPS
While OPEC ministers and energy experts were trying to seek ways to protect their own interests under the precondition of stabilizing the international energy market, an IMF senior official voiced here on Tuesday a stern warning: resources nationalism could backfire.
+
Such oil producing countries as Venezuela, Bolivia, Chad, Algeria and Russia were adopting resources nationalism to seek more profit and control rights from multinational corporations, which drilled for energy in their oil and gas fields, the high-profile IMF official said.
+
Rato said that domestic fuel prices in all countries should be set to reflect economic and social costs, and to promote a response to an appropriate demand

The Invisible Hand (9/13/06; 05:56:12MT - usagold.com msg#: 147423)
If China does not want to submit voluntarily to dollar intervention,
http://www.bis.org/publ/qtrpdf/r_qt0609e.htm

IT IS USELESS FOR THE CHINESE TO TRAVEL THIS WEEK-END TO SINGAPORE


BIS Quarterly Review, September 2006
The changing composition of official reserves gold
http://www.bis.org/publ/qtrpdf/r_qt0609e.htm
http://www.bis.org/publ/qtrpdf/r_qt0609e.pdf

SNIPS (Disclaimer: I had to copy this by hand and then type it – errors are not impossible)

CONCLUSION
The liquidity and sophistication of the euro financial market are fast approaching those of US of A dollar market. This helps to strengthen the position of the euro as a possible alternative to the US of A dollar in official reserves.
+
pp. 30 -31
Historically, the bulk of reserves were held in gold. This has changed radically over the past three decades. Gold holdings, VALUED AT MARKET PRICES (emphasis mine), fell from about 60% of total reserves in 1980 to a low of 9% in 2005.
Today, the vast majority of reserves are invested in foreign currency assets, mainly deposits and securities.
Whereas foreign currency assets totaled $4.3 trillion at end-March 2006,
gold-holdings totaled only $0.5 trillion (AT MARKET PRICE)
The management of gold reserves has changed over time. Initially, they were segregated from other assets and physical holdings of gold were left unchanged even as prices fluctuated and reserves accumulated. Then, starting in the late 1980's, some central banks sold part or even all of their gold. The sharp rise in the price of gold in 2005-06 helped to boost gold's share of reserves above 10% in early 2006.
Nevertheless, physical holdings of gold fell further, continuing to contract at a rate of about 2% a year.
+
The shift from gold to foreign currency assets was part of a broader reallocation towards assets PERCEIVED (my emphasis) to offer more attractive risk-adjusted return.

==

1.
Why is it that the gold part of the reserves decreased from 60% in 1980 to 9% in 2005?

Because more currency is taken into reserve and because the price of gold (POG) is obscenely low.

Is the shift from gold to foreign currency assets part of a broader reallocation towards assets PERCEIVED (my emphasis) to offer more attractive risk-adjusted return, as the BIS Quarterly Review alleges, or is it that there are more than enough reserves which can if necessary be catapulted like a rocket through marking them to market (MTM)?

Philip D. Woolridge, the author of the report, continues to frame reserves as instruments for emergencies. Woolridge forgets that foreign reserves can be used by the financial industry to "intervene" in currency exchange rate markets.

When the dollar-International Financial and Monetary System (IFMS) will have exploded, the question will concern the proportionality or disproportionality of the gold parts in the respective central banks’ reserves.

EU –12,000 tons
US of A - 8,000 tons
This is FIFTY PERCENT DIFFERENCE, also after the reserves being MTD-d.
And I am not yet talking about China and Japan. But this disproportionality is also valid for the dollar-volume which is spread over different economic blocs which are, we are told, together managing the IFMS.

The IMF would then have a "surveillance" role instead of a role as intervening financier (money changer).

But how the heck will all these imbalances be corrected and what will happen to the US of A which is itself the producer of the (world) dollar reserve product and which can produce its own reserve?


2.
Woollridge concludes that the position of the euro as a possible alternative to the US of A dollar in official reserves is being strengthened.

China will never accept that the dollar breaks its centrally led financial-monetary system in order to achieve a yuan exchange-rate which pleases Washington so that Washington can determine what happens in the expanding Chinese economy.

Next week-end the IMF meets in Singapore. Currency exchange rate management (and disproportionally increasing reserves) will have to be discussed. The distribution of votes will also be discussed, it being clear beforehand that it is the US of A which will determine the criteria on the basis of which the votes will be redistributed. Those criteria will be: open trade and finance.

If China does not want to submit voluntarily to dollar intervention (regulation, control, dominance, etc.), it is useless for the Chinese to travel this week-end to Singapore.

This is a ticking time-bomb.

ge (9/13/06; 05:50:24MT - usagold.com msg#: 147422)
1 Barrel crude oil = 1 Barrel gasoline
http://stockcharts.com/gallery/?$WTIC:$GASO
Gasoline is quoted per gallon, while crude oil is quoted per barrel. Since, 1 American barrel = 42 American (US) gallons, when the oil/gasoline ratio is about 42, it means refineries are practically giving away gasoline. Greenspan might have characterized this observation as a conundrum wrapped in an enigma!?

Matthew (9/13/06; 05:39:47MT - usagold.com msg#: 147421)
Gold calculator
Useful site for calculating value of bullion; scroll down the first currency column to gold etc..
http://www.xe.com/ucc/

The Invisible Hand (9/13/06; 03:52:35MT - usagold.com msg#: 147420)
Ka-Poom and DDPE
http://www.itulip.com/kapoomtheory.htm

SINCE 1971, THERE IS NO GOLD MARKET


(Ka-Poom theory is the hyperinflation predictor)


In the Debt-Driven Political Economy (DDPE), the market events which occur ARE NO MARKET.

Ka-Poom is a big covered swimming pool in which surf waves are artificially being created.

Like the 9/11 thing, most people will never believe this.

The concept of DDPE is so all-encompassing that nobody thinks about it.

However when shocks disturb the DDPE in its management of everything, then this "everything" is again being referred to as "the market".

We have therefore to conclude that the invisible hand cannot be timed through a "timing" method, precisely because there is NO MARKET and because the DDPE operates according to its own -separate– logic which is dependent upon the whims of the politicians.

Sometimes, politics is anticipating, sometimes it decides not to be anticipating, then it anticipates the wrong thing etc.

How many different stock-exchange, financial, and economic theories did we have in the last fifteen years? Those theories turn with the political winds and thus not with the "essence" of the "market".

Paulson has been politically chosen because of his qualifications to run the DDPE.

Our masters want the system to continue standing on its head. They want the DDPE, which prevents market events from occurring, to serve the market-events. Nonsense, of course!

The crude political reality is of course the other way around. Economic activity constantly has to adapt itself to the hyper-changing whims of our masters and their so-called laws.

Nobody wants to understand this. Hence, everybody continues with her "wise" advice: "Buy some gold, … just in case".

The DDPE will probably still continue to exist for quite some time. But "changes" will have to be introduced in order to account for Freegold and in order to stop talking as if we were living in a "market" economy.

Everybody continues thinking there's a temporary conspiracy. Nobody understands that everything is part of the "system".

Thus the Ka-Poom man has the correct vision: Don't trade gold-metal, even if it falls to $500 - $400.

The DDPE-system has NO timing models.

This explains the suddenly resurfacing of the discussion of the Rubin/Summers policies and their effect on the price of gold (POG) and the Gibson paradox.

Nothing market driven, everything Politically Economised and focused on gold (and interest rates).

Goldbugs convincing themselves that this has been relegated to the past by the so-called market forces? How could that be? THERE IS NO MARKET!

If there had been a gold market after 1971, then the POG should at least have accounted for monetary depreciation and should be at $2000/Oz.

It's now THIRTY-FIVE YEARS that there has been NO MARKET FOR GOLD.

In those 35 years, the DDPE has behaved more and more perfectly. Once the DDPE will no longer behave, Freegold will be a fact. That's why the DDPE can also be referred to as the dollar-International Financial and Monetary System (IFMS).

A system is a game and once the players do no longer follow the rules of the game, the system breaks and new rules enter into force.

The breaking-point could be Iran being admitted to the Shanghai Cooperation Organization.

Another element which could lead Freegold is in the hands of the economic "psychology" of the sheeple. When their psychology will lead them to conclude that danger is coming and that they are in trouble because they don't have any savings, a confidence shock could arise.
As a result of this shock, the central banks could find themselves unable or unwilling to continue synchronising their policies and let gold, the dollar IFMS and the DDPE go.

On this other element, see my

The Invisible Hand (8/30/06; 23:45:29MT - usagold.com msg#: 147071)
Gold will explode when the sheeple will awake!
http://www.free-europe.org/blog/english.php?itemid=56

http://www.usagold.com/cpmforum/archives/3020068/default.html

968 (9/13/06; 02:53:00MT - usagold.com msg#: 147419)
Gold industry aflood with dollars
http://www.miningmx.com/gold_silver/149940.htm
Dollarloans provided to the goldindustry by the $-cartel, and their colluding banks keeps the goldmines working in favour of the dollar. High loans and low prices forces them to mine as much gold as they can, which can be used by the $-cartel to manage the POG, and the distribution of the mined gold.



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