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ARCHIVED DISCUSSION FROM 7/14/2001 All times are U.S. Mountain Time (Yesterday's Discussion.) SHIFTY (07/14/01; 23:32:09MT - usagold.com msg#: 58104) $100/oz. below replacement cost. http://www.businessweek.com/investor/content/jul2001/pi20010712_478.htm INDUSTRY IN FOCUS From S&P By Leo Larkin Gold Fundamentals Still StrongS&P is positive on select gold mining stocks because of lower output, weak financial markets and increasing demand for the metal Industry in Focus Archive Find More Stories Like This Gold futures -- and stocks of gold mining companies -- sold off after Wednesday's Bank of England auction of gold reserves. S&P believes the recent drop in the price of the metal - and of stocks of producers -- reflects lower lease rates and a sell-off in the Chicago CRB Commodities Index. S&P thinks a break below the recent low price of $252 per ounce reached in August 1999 is unlikely, and that any such break is unsustainable since the current price is some $100/oz. below replacement cost. Fundamentals for gold mining stocks, and the metal itself, are positive on lower output, weak financial markets and a deficit in supply versus demand. S&P is still positive on selected gold stocks and has 4 STARS (accumulate) recommendations on Barrick Gold (ABX ) and Newmont Mining (NEM ). S&P also has 3 STARS (hold) recommendations on Homestake Mining (HM ) and Placer Dome Inc. (PDG ). END darkhorse (07/14/01; 22:41:08MT - usagold.com msg#: 58103) USAGOLD (07/14/01; 12:32:39MT - usagold.com msg#: 58079) "Who is Another?" Almost a Zen thing... :) DIRECTOR (07/14/01; 22:25:29MT - usagold.com msg#: 58102) Back on the Trail Hello FOA. It is GREAT to see you back on the TRAIL. Sure hope we do a lot of hiking. Very anxious to see what is just up ahead of us.Thank You for all the time you spend trying to keep us from wandering off the Trail, and getting lost. Old Yeller (07/14/01; 21:54:48MT - usagold.com msg#: 58101) Bejing lands the Olympics The cynic in me says there are about 170 billion reasons,(held in US$ reserves),why this little bit of international acceptance came to pass. Christian (07/14/01; 21:36:11MT - usagold.com msg#: 58100) Deep Storage Deep Storage gold = forward sold gold by Barrick + Homestake but still in the ground. Gold cartel is the USA+ most European countries entering the Euro and Swiss government. Swiss government will stay neutral, sell some of its gold to buy Euro's for investment purposes. Most governments including USA are selling gold to support their respected currencies and financial markets. Last week the ESF sold a lot of gold futures to buy stock indexes. Most likely soon if not this comming week they will sell those stock indexes to cover the gold futures. In the USA and England the Euro is taking on more and more debt. Even now it is cheaper to borrow in Euro $'s then in our $'s. It is only a matter of time many of our banks will simply fall and be purchased with Euros. Note that Euro currency is not going into our stock market.It is going into corporate bonds. We are being invaded not by troops but by financial conquest. The very rich in industrialized countries and the poor in India and others are buying the gold. Our FED is selling gold still in the ground to cover the trade deficit. This gold short position is increasing. Many eastern states who have in their state constitution to have a balanced budget every year are using the gold short position to get around that law. The increase in the FEDERAl gold short position makes a joke of our so called financial surplus. If a nation is going to go broke like we are we just as well go with style. The FED has unlimited amount of paper gold or paper $'s. The problem is it has to be loaned into circulation. There is a shortage of borrowers with security to back the loans. Securities must be backed by assets. Because of the lack of private borrowers with assets, the backing of money will have to be based on the ability for government to go into debt. Like WW1+2, war is the best way. A WW3 may be the ticket for higher gold price. Netking (07/14/01; 21:25:43MT - usagold.com msg#: 58099) Latin Turmoil Deepens . . . . http://www.washingtonpost.com/wp-dyn/articles/A55928-2001Jul13.html With resounding pessimism, financial markets are delivering the verdict that Argentina will be forced to default sooner or later on its massive foreign debt. That is bad news for Latin America -- all the worse because it comes amid an already sharp economic slowdown afflicting the region.In a dramatic sign of the rapidly evaporating confidence in Buenos Aires's ability to fulfill its obligations, one of Argentina's benchmark government bonds plunged yesterday from $66 to $56 per $100 in face value, indicating that investors believe they will eventually receive barely more than half of what they are owed. The deepening crisis in Latin America's third-largest economy has sent currencies sliding and stocks tumbling in neighboring countries in recent days.Such developments would be painful at any time. But they hurt even more during this period of economic sluggishness in Chile, recession in Peru, increasing economic softness in Mexico and an energy crisis in Brazil, prompting economists to further slash their growth forecasts for almost all Latin American countries. . . .. . . Is is not TIME you bought Gold!-----------------------------------------------------------US_Army(RET)(58095)Sir, "Bless you" for that post! sector (7/14/01; 21:03:59MT - usagold.com msg#: 58098) Meyer, Epstein, Anderson,"The FED" and the 800 lb. Gorilla The index of "The Fed" does not list the word "Derivative" although it does appear thinly in the text. Gold is tangentially followed.Whatever " view" these learned gentlemen present, it is analysis that ignores the largest concentration of risk capital in the history of the World...the $17.7 Trillion Dollar interest rate derivatives of JPMC...the Fed's bank. This stupendous positional growth began...you guessed it in 1995. These "views" also glibly suggest that free markets still exist. In currency? How then does one maintain a "Strong Dollar" POLICY? By decree? With the tiny $40 Billion funded ESF? Not likely. The float from daily interest rate derivatives trading yields a staggering sum with which to create mischief all over Wall Street...as we have seen.Mr. Meyer may be the darling of Wall Street's banking "journalists" but writing a book like "Ther Fed" without mentioning the cancer-like JPMC IRD position is akin to "Laurence of Arabia" skipping the desert.The interest rate derivatives of JPMC are a symptom of systemic financial deformations. The IRDs exist because they MUST exist in order to temporarily refract threats. The larger they grow the more unstable the system becomes. Black Blade (7/14/01; 20:19:12MT - usagold.com msg#: 58097) IEA Again Cuts Oil Demand Forecast http://biz.yahoo.com/apf/010713/world_oil_6.html IEA Again Cuts Forecast for Oil Demand, Due to Weak Economies and Costly CrudeSnippit:LONDON (AP) -- Faltering economies and high oil prices have lessened the world's thirst for crude, leading a respected energy study Friday to again cut its estimate for annual growth in demand. The International Energy Agency reduced its projected demand growth by 510,000 barrels of oil a day -- the seventh downward revision in its forecast since last summer, when the prospects for U.S. and global economic activity looked much brighter.Black Blade: Of course if OPEC maintains discipline over production quotas and adjusts for demand, then oil prices could remain stable even as the global economies plunge into global recession. Time for a little gold insurance I think. Black Blade (7/14/01; 20:09:45MT - usagold.com msg#: 58096) Calif. Residents Cut Power Usage http://dailynews.yahoo.com/h/ap/20010713/us/power_rebates_1.html Snippit: SACRAMENTO, Calif. (AP) - About 30 percent of customers buying power from the state's two largest utilities cut energy usage in June to qualify for state-subsidized rebates, surprising officials who thought fewer would comply. Black Blade: State subsidized? Does this mean that state tax payers are in effect paying out rebates to themselves? "Interesting" plan. Hmmm BTW, cooler temperatures just might give the Western region some breathing room. Question is whether they will use this time wisely and build up generating capacity and hydrocarbon supply. I seriously doubt it. US_Army(RET) (7/14/01; 17:45:10MT - usagold.com msg#: 58095) Silver Fans... http://english.hk.dailynews.yahoo.com/headlines/sport/afp/article.html?s=hke/headlines/010714/sport/afp/Chinese_press_jubilant_at_Beijing_Olympic_victory.html Chinese press jubilant at Beijing Olympic victoryBEIJING, July 14 (AFP) - The People's Bank of China, the nation's central bank, said it would issue 60,000 commemorative silver coins Sunday, selling at 10 yuan (1.2 dollars) a piece.The coin would sport the letter "V" for victory on the one side, while the reverse would show the Hall of Prayer for Good Harvest at Beijing's Temple of Heaven -- a hint at achievements made and achievements still to come..........................................Should bring a "sparkle" to the eyes of all Ag fans Expect more of this to come If silver comm. coins sell well might gold ones be next?---- Lots of Chinese out there to buy (and others of us)USAGOLD...Can get???Regards,Sld Tree in the Forest (7/14/01; 17:40:52MT - usagold.com msg#: 58094) What life in a global NWO would be like As the Euro gains hegemony (and the UN gains hegemony) we need to ask ourselves what life would be like if the dollar (and the US along with it) collapsed and we wound up living in a New World Order.Here's a look at what life in Euroland would be like: Ananova :Fight looms over EU peach size orderA disagreement over the best size of a peach may be about to trigger a fight between the European Union and the UK Government.The EU has issued a directive that peaches sold from July 1 to October 31 must be at least 56mm in diameter. MP Sir Teddy Taylor has described the order as "ridiculous bureaucratic nonsense".Environment officials have already met fruit retailers to discuss the two-and-a-quarter-inch directive and are waiting to hear if organic fruit is included before making a possible challenge to the European Commission.Labour peer Lord Morris of Manchester told the House of Lords: "I don't usually have a measuring tape to hand when I eat peaches."Sir Teddy Taylor, Conservative MP for Southend East and Rochford, commented: "It is very encouraging if we are to challenge this ridiculous bureaucratic nonsense. It should be up to the customer what size of peaches he wants to buy."Me: Ah yes...life in Euroland! I can't wait! Sort of gives new meaning to the word "ungovernable" right? Tree in the Forest (7/14/01; 17:30:19MT - usagold.com msg#: 58093) Leigh Glad to see you here! You too HBM. CoBra(too) (7/14/01; 16:56:08MT - usagold.com msg#: 58092) @ CM - re - Salami at Genoa ... Or the Sea Battle of Salamis - ... Salami has two ends ... Genoa ... history ... to be re-visited ... portends these ends to never meet ... as long as the mega $ supremacy pretends - to be the comptroller of all lose ends ... as in pricing products or productivity in paper $'s hegemony - draining any sense of reality by papering over via derivative futures is blasphemy - akin the vultures circling in ... for the kill of the monetary spin of the new admin - who'll be blamed for the sin of the Rubin et al harlequin, grotesque bubbleionan incest to infest ... what's left to (mal) - invest. Sorry - seems to be an elongated sentence ... as in the prolonged lifeline of the US$ - a sentence, hard to define in view of a jury, being in a hurry to spend every cent and some more, as long as the paper pays the rent ... or is it the rant? ... CM - Salami - I'd settle for some Pastrami ... and as you may defend some slices - spices will - like mustard or other vices - I feel a little "forlorn" that this forum has lost some of its decorum: As a gentle gathering place around the fire place, where the ladies and knights could have been discussing their insights! And as I would appeal, please all of you gentle people come back on track - and Randy, you may be right in your plight to the definition of money - though to insist on a definition is tantamount to resist re-classification ... ... Anyway, I would like to say, I'm very disturbed about the way some posters have been banished for just not accepting Randy's way to explain what money is ...if that's been the sway - keen to have an answer - and if not that's what may be a self explanatory plot ...cb2 PS: I've always said that in the end the 'goldbugs' who may still stand will be decimated, denigrated and forfeited - before the true value shines through ... USAGOLD (7/14/01; 16:16:06MT - usagold.com msg#: 58091) Leigh. . . You always put a smile on my face.Welcome back, Lady. . . .Now I know who to recommend to the people over at the World Gold Council to head up their $55 million branding program. Editor, The Gilded Opinion (7/14/01; 15:59:45MT - usagold.com msg#: 58090) ANNOUNCING.... http://www.usagold.com/gildedopinion/goldpieces.html THREE EASY PIECES APPEARING AT THE GILDED OPINIONTHE GILDED OPINION is pleased to announce a series of three timely, informative articles which examine the changing powers of the Federal Reserve at this time of troubles for the U.S. economy. The first piece, by renowned economist Martin Mayer, discusses the inflationary implications of an emasculated central bank, one whose bag of tools has greatly diminished since days-gone-by. In the second piece, Gene Epstein of "BARRON'S" magazine takes Mayer to task for some of his views. None-the-less, Epstein concludes by recommending one consider the "Austrian" view of how central banking almost inevitably devolves into a world where gold and silver prevail. Finally, we offer a well-reasoned review of Martin Mayer's book from the "Austrian" perspective by Dr. William Anderson, an economist whose work has appeared at the Ludwig von Mises Institute. We feel fortunate in being able to bring these timely essays to our readers and hope all will avail themselves of this outstanding opportunity. Thanks. Black Blade (7/14/01; 15:48:26MT - usagold.com msg#: 58089) US Debt http://www.publicdebt.treas.gov/opd/opdpenny.htm Lately I have been hearing more and more media speech about the US government budget surplus. The national debt keeps rising so where is there a surplus? A quick glance at the US Treasury numbers will reveal a disturbing trend. Hmmm - Black Blade Leigh (7/14/01; 15:47:05MT - usagold.com msg#: 58088) USAGOLD T-Shirt Slogan Ideas 1. USAGOLD - The only gold left in the U.S.2. USAGOLD - Ahead of its time.3. "All paper will burn." Another (USAGOLD)4. Gold - Accepted worldwide for over 5,000 years.5. I'm a man of sophisticated taste - I buy gold. (Kid version) I'm a kid of sophisticated taste - my parents put gold in my trust fund.6. Put gold in your IRA! Call George at USAGOLD.7. Gold - the investment cycle has turned.8. Walk in the Footsteps of Giants! Diversify into gold! Black Blade (7/14/01; 15:38:00MT - usagold.com msg#: 58087) Intern Position for Rep. Gary Condit (D-CA) http://www.house.gov/gcondit/intern_opportunities.htm Would you let your daughter take this job? I understand that there's an opening. Note the link for missing children at the bottom of the page. Democrat Condit is one of our rulers, yet I heard on FOX that estimates of our rulers engaging in questionable activities with young interns (and pages) range from 40% to 60%. Personally I think that this ad is quite tacky under the circumstances. Meanwhile, awaiting the opening of the markets and to see what fallout occurs as the Argentine situation continues to develop. Cheers!- Black Blade auspec (7/14/01; 15:09:43MT - usagold.com msg#: 58086) Belgian I think it must have worked, Belgian, check out the gold trail!Hope you had a good holiday! Belgian (07/14/01; 14:45:11MT - usagold.com msg#: 58085) Another and FOA Sirs,Back from holidays and facing your radical decission.During vacation, I took the opportunity to study, your complete vision "very intensively". Outstanding and Genial.Altough I don't agree for the full 100% on all aspects.With much respect and admiration as a critical student...PLEASE, Don't go ! Please, Gentlemen !Belgian R Powell (07/14/01; 14:34:54MT - usagold.com msg#: 58084) USAGold Yes, there is a market for good quality cotton t-shirts with a pocket. Mostly large sizes as real cotton shrinks a little. Maybe some advertisement and a logo or saying on the other side. May I suggest "Got Gold" Future newswire headline, "Gold ownership craze enhanced with popular CPM T-shirts. Gold prices soar." Hula-hoops, transistor radios and gold. Rich Netking (07/14/01; 14:17:38MT - usagold.com msg#: 58083) Auspec / US_Army(RET) auspec(58063)US_Army(RET)(58061)Eating Gold. . . Like silver, I guess if it's good for you and if you can pay the dollars(for the moment!) on the menu . . . saw something on TV a while back. . . top establishments were dishing up a rat dish, very popular & not cheap . . . Israeli/Palestinian ominous ramifications: A case of "wars and rumors of wars. . ." I know who wins at the end of the book, but not an easy one to solve for either side. megatron (07/14/01; 13:40:08MT - usagold.com msg#: 58082) Gold items I'd like to place an order for a large gold rope with the USAGOLD insignia attached. Much like an 80's LL Cool J kind of thing. Or gold licenceplate surround. Cavan Man (07/14/01; 13:05:08MT - usagold.com msg#: 58081) USAGOLD Your subtlety and wit is duly noted. Back is out--no golf for awhile but would enjoy a walk thru the bookstore to the cafe. Hope it's finished. See you then. Turnaround (07/14/01; 12:48:28MT - usagold.com msg#: 58080) nickel62- Deep Throat's immortal words: "follow the money" nickel62 (7/14/01; 04:04:24MT - usagold.com msg#: 58059)A request from GATA for some help in motivating congress to actually ask some tough questions!!!All of these commentaries have relevance to gold."Otherwise, they would have not renamed the West Point gold the ridiculous, B movie name that they did. ...*Why was 1700 tonnes of "Gold Bullion Reserve" at West Point reclassified to "Custodial Gold Bullion" in September 2000?*Why was Treasury owned gold in the Denver Mint, Fort Knox and at the West Point Mint reclassified at all three locations to read "Deep Storage Gold" as of May 31, 2001?* What does "Deep Storage Gold" mean?"Deep Storage is the place where the government hides the truth, for safekeeping. USAGOLD (07/14/01; 12:32:39MT - usagold.com msg#: 58079) Cavan Man. . . .Golf shirts Oddly enough I was thinking about that this morning as I wrote my previous post. We've talked about it off and on. Golf shirts. Tee shirts. Bumper stickers. I think a USAGOLD baseball cap would be cool. What does the Table think? Is there a market? If so, we'll look into getting them made. USAGOLDparaphernalia. I like it. How about this for a bumper sticker: Who is Another?Will be here on the 24th. Are you bringing your sticks? Let me know. We'll sneak out for nine. megatron (07/14/01; 12:23:56MT - usagold.com msg#: 58078) Part 2 I mean, where are all the angry Bre-x investor types who should be scaling the walls of these brokers and investment councellors for 'selling them that crap', not that they didn't deserve it. megatron (07/14/01; 12:20:56MT - usagold.com msg#: 58077) Reality check I'm waiting for the class action lawsuit against Cohen by the customers of her corporation. Black Blade (07/14/01; 12:01:59MT - usagold.com msg#: 58076) RE: Canuck - Placer Dome sells Las Cristinas gold project http://www.newswire.ca/releases/July2001/13/c2195.html Snippit:VANCOUVER, July 13 /CNW/ - Placer Dome Inc. is pleased to announce that its indirect wholly owned subsidiary, Placer B-V Limited (PBV), has entered into an agreement to sell all of the shares of Placer Dome de Venezuela C.A. (PDV) to a subsidiary of Vannessa Ventures Ltd. of Vancouver, Canada. PDV holds a majority interest in Minera Las Cristinas (Minca), the corporation formed to develop the Las Cristinas property in Bolivar State, Venezuela. PBV will retain an interest in the gold and copper revenues generated by the Las Cristinas property and will, under certain circumstances, have the right to re-acquire the shares. If PBV re-acquires the shares, Vannessa will be entitled to an interest in the gold and copper revenues. Minca suspended construction on Las Cristinas in 1999 due to low metal prices and Placer Dome wrote off the carrying value of its investment in mid 2000. Black Blade: I had missed this, however, it still looks risky. PDG had until July 15th, that's tomorrow to commit or lose all rights to Las Cristinas. Looks like they got out just under the wire. They took a huge bath on this one. Black Blade (07/14/01; 11:23:54MT - usagold.com msg#: 58075) Buy. Sell. Cheat. Lie. http://chicagotribune.com/news/editorial/printedition/article/0,2669,SAV-0107120042,FF.html Snippit:So some hotshot Wall Street analysts rate a dotcom stock as a "strong buy," urging investors to snap it up . . . until it drops like a lead balloon from $60 a share straight into bankruptcy. Was it rank stupidity on the part of the analysts? Or something more sinister -- rank conflict of interest?Good questions, and ones being asked by angry investors, Congress, the Securities and Exchange Commission, the National Association of Securities Dealers and the Securities Industry Association. The powerhouse Wall Street firms profess they have been stunned to discover that analysts' self-interest may have more to do with stock recommendations than does their burning desire to help their customers get rich.Black Blade: I had written of these "Pied Pipers" of Wall Street in the past and how they were always late to the party. They recommend a stock after a huge run up, and then rate a "hold" or "market perform" when it crashes into oblivion. Some of the worst offenders were Henry Blogett of Merrill Lynch, and Mary Meeker of Morgan Stanley. Perhaps the lemmings (or rats in this case) got their just deserts when the "Pied Pipers" led them to their demise. It now looks as if there may have been something of a more criminal nature at work. All the more reason to add some PMs to the portfolio for ballast to ship the good ship balanced and afloat. Meanwhile, I am holding Abby Jo of Goldman Sachs to her original forecasts for year end 2001:S&P 500 at 1650, DOW at 12500, and NASDAQ at 6500. This is going to be fun! Cavan Man (07/14/01; 11:10:20MT - usagold.com msg#: 58074) USAGOLD MK: Hope to see you on the 24th.Have you ever considered adding to your retail offerings with a nicely designed golf shirt? I'd be the first customer. Kind regards 2U.....CM Black Blade (07/14/01; 11:09:52MT - usagold.com msg#: 58073) Don't Cry For Me http://www.economist.com/agenda/displayStory.cfm?story_id=698129 Snippit:The world's financial markets are now very nervous about the country's financial prospects. The government was forced to pay interest rates of 14% at an auction of three-month Treasury bills this week, up from 9% last month, and investors have no appetite for longer-term bonds. On July 12th, Standard & Poor's, a credit-rating agency, cut Argentina's long-term sovereign credit rating. The government has embarked on another round of public-spending cuts which are bound to be difficult to sell politically. Black Blade: This is getting more ugly all the time. Argentine officials are acting more like cops at the blood-splattered crime scene, pushing back the crowds saying "nothing to see here." Cavan Man (07/14/01; 11:08:18MT - usagold.com msg#: 58072) @CB(too) RE: Genoa They're not going there for the salami eh? Black Blade (07/14/01; 10:52:54MT - usagold.com msg#: 58071) Is the world prepared to deal with the global economic downturn? http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?eo20010712a1.htm Snippit:Economic policymakers must stand ready to take timely and decisive actions when incoming information suggests that the economy is most likely to significantly deviate from the targeted course for a sustained period. And in the uncertain world in which we live, they have to deal with both upside and downside risks to the economy. In the current setting, downside risks are far greater than upside risks. In the United States, household balance sheets have become stretched. Companies remain more generously valued relative to earnings than they were before the mid-1990s. Further falls in stock prices on top of the sustained corrections that have taken place could produce adverse wealth and confidence effects on spending by the household sector.Black Blade: The answer to the headline is "No." What would happen if we had to go through a 1929 style crash and ensuing depression? I venture to say that it would be much much worse. Then we were a more agrarian society and people had real world skills. Now there would likely be complete mayhem and societal breakdown. Then families would stick together and struggle together. Now we just shuffle off the older parents to a "home," and the kids to some "camp" or "re-education center." Families are also spread out far and wide. I think that this next time around will be - how should I say it? "Interesting." Black Blade (07/14/01; 10:39:44MT - usagold.com msg#: 58070) Argentina's Woes Spur Fears of New Crises http://www.washingtonpost.com/wp-dyn/articles/A48822-2001Jul11.html Snippit:Latin American markets were hit the hardest yesterday as the Brazilian currency, the real, and the Chilean peso fell one point to record lows, and Argentina's main stock index dropped 2.2 percent to a new 2001 low, after the Argentine government encountered severe difficulty inducing investors to buy its treasury bills Tuesday. Black Blade: No kidding. Good article. Black Blade (07/14/01; 10:26:50MT - usagold.com msg#: 58069) RE: Canuck - usagold.com msg#: 58043) - Las Cristinas and PDG Placer Dome - No opinions regarding Placer's selling of Las Cristinas?Heard at least 3 minors fighting over rights, KRY seemingly in the front row.I am a little puzzled why PDG would let this go. I would have bet, if they believed in higher prices, that the 'operation under care' scenario would have played out. Mind you I also heard that Las Cristinas is only viable with gold approaching $400. Maybe PDG views the Venezualan headache not worth it?Black Blade: Those who I know ho were connected with Place Dome's work at Las Cristinas say that the project has huge reserves, yet it is only marginal at $320.00/oz to $350.00/oz. Placer also is a bit cash strapped after buying out SA Western Areas as well as buying Getchell and trying to bring the mine to production with a lot of costly improvements. Cortez - Pipeline is a shining bright spot of profitability for PDG though. But Getchell will require a lot of capital for improvements and new infrastructure, such as new larger mills and autoclaves. The Western energy crisis has hit Nevada mining country very hard and several mines are on the ropes, especially high cost underground operations with sulfide and carbonaceous ores. Recently rumors are running rampant that Newmont's Gold Quarry may close. There are also rumors that AngloGold's Independence mine and Barrick's Goldstrike may layoff over half of their remaining workforce and even may shut down operations placing these mining operations on "Care and Maintenance." Much of the concern is the rising costs of production - primarily due to the energy crisis.As far as Las Cristinas, Placer's management had been waiting for some sign that Venezuelan government does not slip into nationalizing foreign company assets as President Hugo Chavez is a closet communist who is an avid admirer of Fidel Castro of Cuba. This has been a concern since the inauguration of Las Cristinas when John Wilson was Placer's CEO. Hugo Chavez continues to make such threats as nationalization and he constantly against corporations (even Venezuelan corporations). This does not give a lot of confidence to companies that would invest billions of dollars in a more stable environment. Just as important is that Placer is trying to hold onto all the cash they can and that means after the write off of Las Cristinas, the project is no longer under consideration. If Crystalex or anyone else wants to pursue the project it could prove to be one hell of a long shot. I guess nothing ventured - nothing gained. I happened to surf through the TV channels this morning and I saw the Forbes investment show on FOX. They were discussing gold stocks and they focused on ABX. On who calls himself the "Pig" says he likes ABX. Another concurred about gold in general as a diversifier, and the third along with the hostess gave the typical "Central banks are selling gold" refrain and they will do so forever. One must be very selective with gold stocks - like buying those that are "profitable" for example. Maybe even those that are reasonably valued perhaps? Oh well, physical gold is the anchor that steadies the portfolio in while waiting for the coming storm. turkey hunter (07/14/01; 09:35:47MT - usagold.com msg#: 58068) gold and bankers I had the opportunity to do some work for 2 small mid-western town banks. Population in one town is around 5000 and the other 2000. I asked the financial advisors what they thought about opening a gold IRA account? They both said you can't, and if you could why would you choose gold? I said because of the financial chaos that is taking place. They were both oblivious to the fact of what is going on in the financial world. The older gentleman seemed to think the US $ will always be #1 and everything will be ok for America for the rest of eternity; he even boasted how none of his clients have gold in their portfolios. They were in their late 40's and early 50's it appeared. His last words to me were "Good Luck" I said you too. USAGOLD (07/14/01; 09:24:42MT - usagold.com msg#: 58067) Correction In the fourth paragraph. . . ."Here's a snippet fromm our June 23,2002 report with reference to the Argentina/Brazil situation . . . "should read"Here's a snippet fromm our June 23,2001 report with reference to the Argentina/Brazil situation. . . . "Oh my. . . . USAGOLD (07/14/01; 09:19:56MT - usagold.com msg#: 58066) Sector. . . . http://www.usagold.com/DailyQuotes.html Thanks for you revealing list of headlines. It brings it all home, doesn't it? As we hear about secret Fed meetings, fidgety New York bankers and economic fear spreading in LatAm, we continue to believe that the unexpected systemic failure will be the out-of-the-box event that sends the teetering stock and bond markets into a violent tailspin and the dollar into severe retrograde. Once again, gold is not \important so much for what it will gain you but for what it will preserve. I would encourage all our new visitors coming here this weekend because they sense that LatAm problem to be substantially more of a problem than what we are being told to read the essay " Overview: Why Gold, Why Now" linked above. (You will have to scroll through the Daily Market Report a bit to find it.) As you scroll, please note the important snippets as you move along. We believe that information untainted by mainstream press political and financial bias is the key to proper positioning for what's ahead. As our Commentary and Review masthead quote from Thomas Baily Alrich suggests, a gold diversification never hurt anyone, and you might sleep better at night knowing you have some yellow metal stored nearby.Finally, we think you will find our Commentary & Review page (available by private access only), at the cutting edge of international financial event analysis. To register for C&R, go to the "Request Info" link at the top of this page. Here's a snippet fromm our June 23, 2002 report with reference to the Argentina/Brazil situation: USAGOLD COMMENTARY & REVIEW (6/23/01) "We are also watching the situation in South America where Brazil has defaulted on $1.8 billion payment to the International Monetary Fund and the devaluation of the Argentina peso. Quite often devaluations and loan defaults go hand in hand in South America. These maladies transform quickly to the crisis mode which in turn spills over to Wall Street where the stocks of the international banks affected by this sort of thing are traded on a daily basis. Brazil is seeking more money from the IMF and it won't be long until Argentina finds itself in similar straights. After years of trying to maintain a peg against the dollar, it appears that Argentina may be in for a weaker currency, inflation, bank runs, loan defaults and economic stagnation. In other words, Argentina may resurrect fears of the Asian contagion in places where American banks have significant exposure. That came back to the United States in various forms in the late 1990s during the last contagion -- most notably the Russian defaults which took down Long Term Capital Management and nearly precipitated a stock market crash. This financial storm forming up in South America as you read this Commentary may carry similar implications."That speaks for itself. . . .Recent headlines and press treatments which can be found on the internet if one looks hard enough (like through our News Feed on the Daily Market Report page), now bespeak a situation we suggested nearly three weeks ago. Sadly, I would wager that you have to look hard to find anything on Argentina in your local newspaper. Those who read these reports regularly can tell you that the Argentina warning is not an isolated lucky call. We are consistently in the vanguard and what we miss our fine corps of posters picks up. (As a matter of fact quite often they lead the way -- Hello Black Blade.) Our advice remains the same. Own gold (fully owned and delivered), become a USAGOLDer (for the sheer comfort of being among friends), and watch the show with the rest of us. You'll find the atmosphere here pleasant and the information and discussion timely. MKThanks again, Sector -- good post. lamprey_65 (07/14/01; 09:15:21MT - usagold.com msg#: 58065) Gold Weekly http://minerals.usgs.gov/pubs/of96-96/ This post from yesterday intrigued me:Max Rabbitz (07/13/01; 16:30:49MT - usagold.com msg#: 58038)Deep Storage "Deep Storage" could mean it is still in the mines. The Treasury may indeed own it but just hasn't mined it yet.---I noticed a year or so ago that the U.S. Geologic Survey seemed very interested in precious metals estmates for federal government owned property (such as National Forests).Hmmm. nickel62 (07/14/01; 08:46:25MT - usagold.com msg#: 58064) For those stock investors among us who don't want to feel more pain... US Equities: A Strategic Perspective Throughout the long and bloody military history of humanity, the value of information and intelligence has proved to be absolutely priceless for winning any military engagement or campaign. Information and intelligence allows generals to precisely plan and tailor their offensive thrusts or defensive stands to counter whatever specific threats they may be facing. There are innumerable examples in the history of warfare of underdogs winning decisive military engagements simply because they had access to better information and intelligence than their foes. In Tom Clancy's incredible book "The Bear and the Dragon", he provides a magnificent modern example of the power of information in the endeavor of war. In his excellent book, a vast invading force faces an overwhelmed and relatively under-equipped tattered defensive array. The outnumbered defensive forces, however, are able to deploy new technology to have a virtually real-time strategic view of the battlefield. This critical marginal flow of information provides the defenses with such a huge advantage that they utterly destroy the massive and far superior invading force. The vast power of information on the battlefield was also proven beyond any doubts in the Gulf War against Saddam Hussein's Iraqi forces that invaded and razed Kuwait. Although US armor on the ground faced seemingly endless waves of the best Russian tanks available at the time, US armored cavalry command was able to rout the elite Iraqi forces with scarcely any allied casualties partially because of an enormous advantage in information. Every tank platoon knew exactly where it was relative to the earth and other hostile and friendly forces thanks to the modern technological wonder of the US Department of Defense's Global Positioning System satellite constellation. The generals commanding the US and allied forces could quickly and easily direct US armored columns to the precise spot of the endless and formless desert wastelands to ambush and annihilate Iraqi armor. Information, when used wisely in modern warfare, can prove far more important than raw firepower. In the broadest sense, valuable information for battle can be broken down into two types, strategic and tactical information. Strategic information is broad, overview, "God's eye" type of data. It is the big picture of the entire theater of operations. Tactical information is much more focused and narrow and provides far more battlefield detail but on a much more limited area. As an example of this critical difference, imagine a tank platoon commander's four tanks approaching a hill, sending a scout up the hill, peeking over, and spotting four enemy tanks. What should he do? The fact that the scout sees four enemy tanks is tactical information. Tactical information is very necessary and can be highly valuable, but only when colored with the true macro perspective provided by relevant strategic information. For instance, if those four enemy tanks over the hill are all the enemy armor in the area, it may be a good opportunity for a little skirmish to take out some of the opposition. The tank commander may choose to load up his platoon with high-explosive anti-tank or sabot rounds, pop over the hill, and send some bad guys to meet their Creator. If, however, those four enemy tanks are lead elements of an entire advancing enemy armored division, it is most likely time to get the heck out of dodge fast. It would be the height of lunacy for the tank commander's four tanks to attempt a firefight with dozens or hundreds of enemy tanks. The strategic perspective on the tactical battlefield situation makes all the difference in the world on the appropriate course of action to undertake. The big strategic perspective, the "God's eye" view of the battlefield, puts tactical information into proper perspective. Without a valid strategic perspective, battles and wars are lost as mistakes are made when tactical data is acted upon alone. Another interesting attribute of strategic and tactical information is that it only flows one way. Our tank commander behind the hill cannot alone extrapolate the data provided by his scout to provide a strategic picture, even if he is the best tank commander in world history and has infinite computing power. Being on the ground at the battlefield in a tactical situation, there is no way to gain the strategic picture unless someone outside his range of perception provides it to him via radio or data link. The tank commander doesn't have any idea what he is missing because he has no concept of the big picture. On the contrary, a general back in headquarters with a strategic view of the battlefield can see everything at once. He may not be able to discern details to the degree of our tank commander behind the hill, but he can certainly glean the big picture. With that broad perspective, he can always zoom in and drill down and easily flesh out the tactical picture for any small area of a strategic perspective. Since the general has the big picture, he knows where he needs to look to find more relevant tactical information if necessary. Information can flow naturally from a strategic to a tactical view, but not from a tactical to a strategic view. If one is mired in the tactics, they have no concept of the strategic big picture and cannot discern it without outside information. On the other hand, if one has access to the strategic big picture, they can easily find out where to look to obtain more tactical details if necessary. A strategic perspective is priceless. Information and intelligence on the US equity markets can also be broken down into strategic and tactical perspectives. In our strange new era of endless information flows, real-time quotations and trading, bubblevision, and the pervasive ultra-short-term quarter-to-quarter focus, the investment world seems hopelessly mired in a tactical environment and buffeted by effectively infinite information flows. Down in the pits watching the current market action on a minute-by-minute basis, it can be almost impossible for investors to discern the big picture. The trees of the financial forest are in sharp detail, but few have a concept of what the strategic forest looks like. An investor who lacks a strategic perspective on the markets places his or her capital in no less danger than a tank platoon commander who has spotted the enemy but does not know if it is some lone armor platoon or the lead element of a huge enemy division. Strategic perspective is incredibly valuable and can make the difference between glowing success and crushing failure in the unforgiving and potentially lethal modern investment arena. As the bulls and bears alike these days are all standing around scratching their heads in confusion over market behavior and wondering what is careening down the pike next, it feels like there is an amazing amount of uncertainty surrounding the equity markets. Virtually everyone seems to be married to a very-short term tactical perspective, lost in the forest but not caring because they are too busy intensely studying the individual trees. In this essay we will zoom way back out in an attempt to gain a valuable strategic perspective on the current state of the US equity markets. For a military commander a strategic perspective usually entails understanding troop movements and unit positions over a much broader geographic area. For an investor, the strategic perspective is defined not by distance, but by the fourth dimension of time. Rather than looking at the markets in terms of a few months or a year, as is common practice these days in all the mainstream financial media, we decided to take a decade-long strategic perspective in this essay. We constructed graphs of the NASDAQ, Dow Jones Industrial Average, and S&P 500 indices with daily closing data beginning on the first trading day of 1990. This longer view of the markets helps a great deal in gaining priceless strategic perspective on the current levels of the major US equity indices. The last datapoint in all the graphs is Wednesday July 11, so the spectacular Microsoft/Motorola blue skies mega rally of July 12 is not shown. With a longview type strategic perspective, a couple additional up days or down days are immaterial in the overall scope of things and ultimately not important. As a further tool to hone strategic perspective on the US equity markets, we plotted a 7.5% compounded return in each graph beginning with the first data point in 1990. This red line in all the following graphs defines where each equity index would be today if it conformed to the average annual 7.5% compounded return beginning in 1990. Throughout all US equity market history, common stocks have averaged a return of roughly 7.5% per annum. This corresponds with the incredibly important historical average equity P/E ratio of 13.5 that we have discussed ad infinitum in previous essays. A P/E ratio of 13.5 implies a return of roughly 7.5% over the long haul. (1 divided by 13.5 is approximately 7.5%) Sometimes equity markets return more than 7.5%, sometimes less, but over a strategic timescale they always regress back to their long-term average rates of return after boom periods of extraordinary returns or bust periods of dismal returns. Mean regression is well documented in market history and leads to one of the lowest risk and most successful methodologies available to play the markets. We begin with a strategic perspective on the notorious NASDAQ bubble, which even the endless line-up of Wall Street shills paraded on bubblevision now admit was a classical speculative mania. Viewed from a long strategic perspective, it is hard to believe that anyone truly thought the NASDAQ mania of late 1999 and early 2000 was a sustainable event. Yet, as we all know, virtually everyone was sucked into the mania and the vast majority of investors have lost colossal amounts of capital as it began to burst. The dotted white arrow outlines the parabolic arc the NASDAQ bravely launched on in the mid and late 1990s. Parabolic growth curves like this almost always end in sharp tops and terminal-velocity fast declines, whether in the financial markets or natural world. If biologists were studying a population of animals whose numbers rocketed up like this, the biologists would immediately know the equilibrium is out of balance in the ecosystem and a population collapse is imminent because a parabolic exponential increase is inherently unsustainable. As we mentioned above, the red line shows what the NASDAQ would have done if it had followed the normal expected 7.5% compounded equity growth curve. At this moment in time, it would have led to a NASDAQ composite index valued at only 1100, not the lofty levels we saw in the bubble. It is VERY intriguing to note that the NASDAQ jumped the tracks and headed on its rocket ride to the moon around late 1994-early 1995 as marked by the white arrow. As we have also discussed in past essays, the late 1994-early 1995 timeframe marks the advent of all kinds of strange financial discontinuities. Around that time, the US Federal Reserve started to aggressively ramp up its rate of fiat currency debasement, firing up the printing presses and ballooning US money supplies at dizzying rates far above economic growth. Also, Fed Chairman Alan Greenspan and New York Fed President William McDonough made a stealthy end-run around the United States Congress and decided to unilaterally take seats on the secretive Bank for International Settlements in Switzerland around this time, contrary to original American intentions regarding the BIS. This anomalous period in the mid-1990s also marked the beginning point of strange and illogical trading patterns in the global gold market. The Gold Anti-Trust Action Committee (www.gata.org) has done extensive research on the nefarious fun and games in the gold market hatching around the same odd time when the NASDAQ jumped its rails and roared through the stratosphere. It is always interesting and highly educational to observe the interrelationships and causal chains among various seemingly unconnected on the surface market events. Make a big mental note of this strange late 1994-early 1995 timeframe, as you will see it again in our Dow Jones Industrial Average and S&P 500 graphs below. The yellow dotted line above marks the early April lows in the NASDAQ, when virtually every professional and amateur market prognosticator in the known universe emphatically declared a bottom was laid in. We have always thought that notion is pretty fanciful, however, as in all historic bubbles we have studied the ultimate bottom is far, far below fair value, not way, way above it. If this NASDAQ bubble burst ends at a stellar valuation after only wiping out a few years of bubble gains, it will be the first time that has ever happened in history and will challenge the very fundamental laws of finance. Armed with a longview strategic perspective on the NASDAQ, it is incredibly audacious to make the case that we are at the very verge of an exciting new bull market. In light of market history and past experience, there is a very large probability that the next large down-leg is rapidly approaching. The ultimate bottom will likely be at levels one-half the valuation of the red normal return line, around 500, and not twice the normal return levels. As a second witness to what the perma-bulls consider a heretical idea, that bubbles have consequences, the NASDAQ 100 had a market capitalization weighted average P/E ratio of an astonishing 74.3 at the end of June. If you are a realist, fair value is around 13.5, and if you are a raging optimist you could possibly make the case of a normal NASDAQ 100 valuation around 20.0. Either way, the NASDAQ darling big-caps remain grossly overvalued for the earnings and cashflows they are able to spin off. Yet Wall Street continues to herd naive investors into these traps like sheep to the slaughter. Fair value for the NASDAQ is deep down in the three-digit abyss nowhere near current lofty index valuations hovering around NASDAQ 2000. Before we move on to the DJIA and S&P 500, we want to briefly zoom in on the NASDAQ since January 2000. This is one ugly chart, no doubt about it. It is incredible to witness this broad index comprised of many thousands of stocks swan dive off this steep of cliff in so short of time. The six arrows mark the individual interest rate cuts that defined the single most-aggressive six-month period of Federal Reserve easing in its entire dismal 88-year history. The red arrows mark the two hurried and frantic inter-meeting emergency rate cuts, both of which were so incredible that we hammered out individual essays on each one at the time they were launched at the struggling markets. Truly extraordinary times in which we live and trade! It is very ominous that the NASDAQ and other US equity markets continue to fall even with the Fed doing its darnedest to inject vast amounts of liquidity into the stressed system. We vividly remember all the euphoric bullish joy in early January when bubblevision and the pundits assured the frightened American investor that stock markets ALWAYS rally on interest rates cuts. Really? Sure doesn't look like that is the case this time, eh. The dotted yellow line marks the top trendline defined by the NASDAQ super-top in March 2000 and the initial big bounce following the NASDAQ crash. Interestingly, this trendline has only been briefly broken twice, once following the initial bounce and once in recent weeks. While the perma-bulls staunchly believe we are going to chainsaw through this resistance line and launch a roaring new rally into year end, we don't believe the popular hype for a second. Never in history has a bubble recovered and been re-inflated before the bust has fully run its course and unwound almost all of the speculative excesses of the preceding bubble. If fundamentals, history, and cashflows still mean anything, and we are sure they do, then the next big move out of this frustrating NASDAQ trading range will be down, not up. Finally, the dotted red curved resistance line on the right notes the incredibly difficult time the NASDAQ rallies have had since April. Even with Greenspan's three latest fervent rate cut ritual sacrifices to the false gods of the New Era, all the rallies have been small and have been quickly smashed before they can grow legs and run higher to 2500. It is also an ominous portent that the red resistance line has curled over and looks like an inverted bowl. Every successive NASDAQ rally is shattered after it only marches north a few percent, even with the accommodative Fed, trillions of dollars of money market "cash" sloshing around seeking an equity home, and incredibly bullish sentiment. The whole formation looks very toppy and we believe the NASDAQ remains incredibly risky with the vast weight of probability suggesting the next big move is down again. When divorced from the short-term tactical mire and viewed from a strategic perspective, the current muddled tactical situation of the NASDAQ is greatly clarified and danger signals abound. Caveat Emptor. Moving on to a strategic perspective on the Dow Jones Industrial Average, we see many similarities with the bubblicious NASDAQ. Note the exact same type of disconnect with the 7.5% average return line around late 1994-early 1995 as we observed above in the NASDAQ bubble, marked here with the white arrow. Also we can see a dashed red heavy defensive resistance line around 11,500 on the upper right corner of the graph. Although there are not yet a lot of folks around who think of the Dow as a bubble, it sure looks like one with the benefit of a broader strategic perspective. Since the Fed began its fiery injections of money into the capital engines of the US equity markets, the DJIA has traded far above where it would be expected to trade in a period of normal returns. Interestingly, fundamental valuations provide important confirmation that the DJIA is trading at bubble-type levels nowhere near normal based on the underlying cashflows and earnings its 30 blue-chip companies are able to spin off. As of the end of June, the DJIA had a market capitalization weighted average P/E ratio of 27.5, over twice the normal historical valuation levels. With plummeting profits and the economy shaky and likely already recessionary, the meager earnings now precariously supporting the Dow are likely to plunge even further in the second half of 2001 pushing its P/E to even more breathtaking extremes. We expect to see the Dow Jones Industrial Average ultimately swoon to levels well below the red 7.5% return trend line above. In historical episodes when the Dow approached this degree of overvaluation it soon collapsed and valuations were ground down to around one half of normal or a 7.0 P/E before a significant uptrend began again. Like the NASDAQ, the DJIA looks incredibly toppy, it has a very weak fundamental foundation, and the global business environment is turning more ugly by the day. The highest probability for the next major Dow move is a significant down-leg, just like the imploding NASDAQ. Finally, no strategic reconnaissance of the US equity markets would be complete without a peek at the venerable Standard & Poor's 500, the 500 best and biggest companies in the United States of America. Is this chart pattern looking familiar by now? All the broad US equity markets followed normal growth patterns until late 1994-early 1995 and then mysteriously took off like intercontinental ballistic missiles in their ascent leg. It continues to intrigue us greatly that at about the same time the Clinton Administration's policy of aggressive market intervention under Robert Rubin commenced (he was sworn in as Secretary of the Treasury on January 10, 1995), the US financial markets all roared towards the ethereal heavens in unison. Returns and valuations were driven to lofty levels far beyond sanity in all US equity markets as the deluge of newly minted fiat capital competed for destinations. The fundamentals for the S&P 500 are also dismal, as it had a market capitalization weighted average P/E ratio of 37.5 in late June, far overvalued by all historical norms. This week we had to chuckle at Queen Bull "Gabby" Abby Joseph Cohen's reiterated end of year target on the S&P 500 of 1550. Holy cow! Hath she not a calculator? With the S&P 500 trading around 1200 today, we would need to see this huge broad index roar up by 29% in six short months to meet her target. Annualized, Ms. Cohen is boldly predicting a 58% rate of return from now to the end of the year in the S&P 500. Talk about irrational exuberance! Ubiquitous bullish propaganda aside, the case can be made that the S&P 500 has now already embarked upon a bear market down-leg. Notice the dome-shaped yellow dotted line marking its super top in 2000. Many mainstream market analysts claim the S&P 500's poor performance is explained entirely by the tech stocks in the index, but we have our doubts. With an ever-increasing phalanx of layoffs, earnings warnings, and horrible performance in corporate America, it would not be at all surprising if a bear market is already stealthily underway in the S&P 500. We will all have to patiently wait six months or so to have enough datapoints to know for sure, but odds are the S&P 500 has initiated its mean regression to painfully migrate to more normal valuation levels. Just as a strategic battlefield perspective can prove decisive for a military commander, it can also be worth its weight in gold for investors and traders in the turbulent financial markets. While watching the financial media, reading the papers, and surfing the Net, it rapidly becomes apparent that the overwhelming popular focus on the US equity markets is highly tactical in nature. Only by soaring above the crowd and taking into account history, valuations, and long-term perspectives can savvy contrarians gain an enormous advantage over their peers by seeking out and obtaining the priceless strategic worldview of the US equity markets. Like computer operators touching the glass of their CRT monitors with their noses and only seeing a confusing mosaic of big colored pixels in exquisite detail, market participants who are caught up in the short-term Wall Street hype are missing the big strategic picture. Only by pulling far back away from the screen do the individual datapoints, the pixels, form into a coherent, understandable whole. Instead of focusing exclusively on day-to-day gains and losses and trading minutiae, the prudent investor continually searches for the longview, that crucial strategic perspective that enables true market discernment. As we strive to transcend the market battlefield today and soar to the heavens for the God's eye view of the action, the strategic big picture continues to look disturbing. Something strange and anomalous occurred in the second half of the 1990s in all the major US equity indices. The returns we all witnessed, the lofty valuations, and the disconnect with underlying cashflow reality are not healthy and normal. The strategic picture continues to point to markets poised for a huge fall or a long, grinding bear marke 0 @@ §` TP °p X P u ž /td> š^g" </tr> }§° }§° -[ ” ' Č 'pĀŻ’’’’ 0B ( @@ @l h2 ? P 0 \ž ^g" auspec (07/14/01; 08:23:50MT - usagold.com msg#: 58063) Netking #58056 I have known of "colloidal gold" much as colloidal silver for quite some time, but never knew it to be used very extensively. It puts a new twist to the phrase "let them eat cake", no?Your Israeli/Palestinian post has very ominous ramifications. sector (07/14/01; 08:17:12MT - usagold.com msg#: 58062) The Futility of Trying to Spin Reality We need not concern ourselves too much over the manipulation of economic news for the purpose of prolonging the various Wall Street "bubbles". The reality of a world-wide recession paralleling the 1930's will easily crush the spinsters.Here are the headlines of Economic Reality...from the Petroboard:------ headines/links located at site above --------Argentina minister appeals for calm - BBC (7/13/01) Argentina's Austerity Unnerves Neighbors - IHT (7/13/01) Investors in Argentina worry as stocks plunge there - Seattle Times (7/13/01) Italy Triples Its Deficit Forecast - IHT (7/13/01) Argentine Bonds, Stocks Plunge as Default Concern Shakes Emerging Markets - Bloomberg (7/12/01) Argentina's financial crisis deepens - BBC (7/12/01) Argentina's Woes Spur Fears of New Crises - Wash. Post (7/12/01) Argentine Bonds Plunge on Concern Over Spending Cuts - Bloomberg (7/12/01) Brazil Real, Bonds Tumble on Concern Argentina's Cuts Will Fail - Bloomberg (7/12/01) Moody's questions Koizumi's reforms - FT (7/12/01) UK industry is on the brink of recession, says survey - FT (7/12/01) Argentina debt sparks foreign fears - BBC (7/12/01) May current account surplus falls by 45.9% to 444 billion yen - Japan Times (7/12/01) Turkish Stocks Dive Amid Jitters - IHT (7/12/01) Argentina debt sparks foreign fears - BBC (7/11/01) Argentine Bonds Fall as Cavallo Vows to Cut Deficit - Bloomberg (7/11/01) Brazil Real Tumbles to Record Low on Argentine Default Concern - Bloomberg (7/11/01) Latin American Markets Ravaged by Argentine Woes - NY Times (7/11/01) Argentines Switch to Dollars as Currency Risk Climbs - Bloomberg (7/11/01) German imports and retail sales fall as slowdown hits - FT (7/11/01) I.M.F. Warning on Asian Recovery - NY Times (7/11/01) Japan's economy falters - BBC (7/11/01) Turkish Financial Markets Fall - AP (7/11/01) Argentina Pays Record 14% to Sell Three-Month Debt - Bloomberg (7/10/01) European Loans Fall 34% in First Half to $190 Bln - Bloomberg (7/10/01) Argentina planning new round of spending cuts - FT (7/10/01) Chilean Currency Plummets to New Low on Argentine Debt Concern - Bloomberg (7/10/01) Economic Slowdown Forces Europe to Scale Back Ambitions - IHT (7/10/01) German economic woes increase - BBC (7/10/01) Machinery orders suffer 2.1% drop - Japan Times (7/10/01) Singapore Dollar Falls to 11-Year Low; Report Shows Recession - Bloomberg (7/10/01) Singapore Enters Recession in Second Quarter as Electronics Exports Slide - Bloomberg (7/10/01) Singapore falls into recession - BBC (7/10/01) Singapore teetering on brink of recession as GDP falls - FT (7/10/01) G7 ministers cautiously upbeat about prospects - FT (7/9/01) Argentine Bonds Slide Ahead of Treasury Bill Auction Tomorrow - Bloomberg (7/9/01) Brazilian real falls to record low - BBC (7/9/01) Brown sees more trouble ahead for economy - FT (7/9/01) Difficult Year for Brazil's Economy - IHT (7/9/01) Japanese machinery orders give little cause for optimism - FT (7/9/01) Stability concerns rattle emerging markets - FT (7/7/01) Dot-Bomb in China - IHT (7/7/01) Turkish markets buckle on IMF loan delay - FT (7/7/01) Turkish leader rounds on IMF - BBC (7/7/01) Euro plunges on rate decision - BBC (7/6/01) French economy shows unexpected softness in first quarter - BridgeNews (7/6/01) G-7 meeting to confirm moves to lift economy - Japan Times (7/6/01) Imported vehicle sales drop 3.5% - Japan Times (7/6/01) US_Army(RET) (07/14/01; 08:15:56MT - usagold.com msg#: 58061) NetKing...Eating Gold... Netking (7/14/01; 01:17:31MT - usagold.com msg#: 58056) NetKing London's rich eat gold So do millions of "poor" Asian's Gold is a very common ingredient (albeit, in very small quantities) in hundreds of common homeopathic therapies used in the Far East. I often saw used in Pakistan/Egypt for mental and physical remedies. A good Pakistani friend of mind has taken an "Au metal" concoction routinely since birth.I must admit to trying such years ago and now recall that the only "observed" effect of taking for some time was "strange dreams " Might be time to try again. Am giving my friend a call today!Thanks for reminder and for post to reference on Israel's long planned and well-known ultimate intentions. Sounds like they are blindly and ignorantly running into another "holocaust" situation to me. Netking (7/14/01; 04:21:29MT - usagold.com msg#: 58060) "Israel Plans Massive Palestinian Invasion" - Report http://www.7am.com/cgi-bin/wires02.cgi?1000_2001071301.htm Israeli generals are planning a large-scale invasion of Palestinian territories in an effort to end the nearly year-long struggle with forces loyal to leader Yasser Arafat, though officials in Tel Aviv are denying it, CBS News reported Friday.The plan calls for air strikes by F-15 and F-16 fighter-bombers, a heavy artillery bombardment, and then an attack by a combined force of 30,000 men, including paratroopers, tank brigades and infantry, CBS News said, quoting a report published by Jane's Information Group in London. nickel62 (7/14/01; 04:04:24MT - usagold.com msg#: 58059) A request from GATA for some help in motivating congress to actually ask some tough questions!!! All of these commentaries have relevance to gold.The bottom line is things are falling apart in the economic world and there are numerous factors giving rise to gold demand such as the exploding money supply in the U.S. and the financial crisis in Latin America. In addition, Wall Street has been harping that the U.S. consumer has held up spending and must continue to do so for there to be an economic recovery in America because consumer activity is 67% of the GDP. The stock market can rally all it wants into LaLa land in the short term, but the news on the consumer front is worsening. Jobless claims were the highest this week in the U.S. in 9 years while the retail sales and chain store sales figures were weaker than anticipated. Consumer debt in the U.S. remains at historically high and dangerous levels.The pressure on the Fed to lower rates is going to accelerate as the stock market turns lower. Lower rates in the U.S. will be gold positive in and of itself, as well as it will most certainly start to begin to put pressure on the dollar.And that is where the dilemma lies for The Gold Cartel, which includes the U.S. Treasury and The Fed. The "strong dollar" policy of the U.S. is going to come back to haunt our government. By the way, whatever happened to the U.S. "free market" policies?There is a 17.7 trillion dollar interest rate derivative position at J.P. Morgan Chase. Their derivative position in relation to assets is very close to that of Long Term Capital Management when it blew up. J.P. Morgan is the bank most favored by our government and it is a bank, not a hedge fund. It is hard to conceive positions of this size are not guaranteed in some way by the U.S. Government - just as it is as hard not to believe that their massive gold derivative position is also guaranteed in part. That is to say that if the U.S. Government has guaranteed much of the derivative positions at J.P. Morgan/Chase, the risk is not what it appears to be at all TO THE BANK. A certain amount of the risk has most likely been transferred to the U.S. GOVERNMENT.One of the most likely scenarios for the manipulation of the gold market is one put forth by Mike Bolser who contends gold must be pacified to foster the "strong dollar" policy in order to keep the huge Morgan/Chase (U.S. Government) derivative position from blowing up and causing a financial crises. Mike's theory is that the government is using the float on this position to manipulate the markets. Something like when you purchase a stock from a broker, you have 3 days to get your payment to him. The difference in time is the float. The float on 17.7 trillion dollars is quite a bit of chump change to throw around.The details of this sort of operation are quite complicated, but it is very understandable what Mike is driving at. With this kind of operation, the management and calming of the price of gold is critical.The problem the cabal has is with the physical gold market. Unlike the other paper markets, they need physical gold to continue this scheme. In addition to the surging demand from the Mid East, China and now Europe, Indian demand has taken a dramatic turn for the better.Sources close to the Café tell me that most ALL the bullion dealers have orders from India between $265 and $266. They are enormous. It is the feeling of the sources that any price dips in this area will be short lived. With this in mind, the risk to the downside is $2 and the upside is unlimited. Pretty fair risk to reward ratio.The other comment passed to me today from a bullion dealer was most intriguing and that is "the central banks are drawing a line in the sand up to $275 and the physical market is taking them on." What does this mean - as in Alan Greenspan's "central banks stand ready to lease gold in increasing quantity should the price rise" infamous line? He sure nailed that one 3 years ago. How did he know that then?This brings us to what our camp knows. As a result of Senators, Congressmen and individuals all over the world querying the Secretary of the Treasury in the U.S. about the meaning of the reclassification of 1700 tonnes of Gold Bullion Reserve at West Point to Custodial Gold Bullion, the Treasury has further reclassified both categories as "Deep Storage Gold."Our tactics have clearly worked and we have them trying to dodge bullets. The serious issue for all Americans is what is the U.S. Treasury doing with America's gold? Under the Washington Agreement, the Europeans are limited to what gold they can sell and their leasing of gold is limited to that as of the signing of the agreement.To hold the price of gold down, The Gold Cartel must come up with 1500 tonnes of gold per year (or so) to meet the supply/demand deficit. The Washington Agreement is nearly two years old. There are few sources that could be supplying 1100 tonnes (1500 minus the 400 tonnes the ECB can sell under the agreement) of gold for this long a time. The IMF and the US come to mind.Since the GATA camp discovered that 1700 tonnes of Gold Bullion Reserve was reclassified as "Custodial Gold Bullion," one has to be very suspicious of a covert US gold swapping operation. After all, we already know that the Fed's Mattingly referred to "the gold swaps" in the 1995 Fed minutes.Hard as it is to fathom, the US might be disposing of its gold in a secretive, unconstitutional manner in order to preserve the ongoing financial market manipulation scheme. It is most likely that they are so far into the scheme that they do not know how to unravel it.What other explanation can there be for "central banks" to be so aggressive to keep gold below $275 per ounce? Years ago it was $295 to $300 per ounce. They have to know what this kind of activity is doing to the sub-Saharan African economies. These are very ruthless people - pardon me, gutless, snobby sheep is more like it.The point of all of this is that you are going to make a fortune soon in the gold arena, unless the U.S. gets away with their plans to defraud America's citizens and sell our gold. And I mean sell because there is no way the U.S. can get it back without paying 3 to 10 times more than what they lent it out for. Who pays for the difference?If the U.S. plans to deep storage gold and sell thousands of more tonnes of gold over the next few years, they can continue the fraud. Your investments in the gold arena will go nowhere. We must not let them get away with it.There are Café members in every state. GATA would like Treasury Secretary O'Neill to receive a letter, at minimum, from a Senator or Congressman from all of those states. I know of 7 that have gone out already.Not a week goes by when I don't receive good suggestions about what GATA can do. They are much appreciated, but now is the time to focus on THIS ONE BECAUSE WE KNOW IT HAS WORKED ALREADY AND IT HAS THE US TREASURY FEELING THE PRESSURE.Otherwise, they would have not renamed the West Point gold the ridiculous, B movie name that they did. So, if you have not done so yet, please take a small amount of time this weekend to write your Congressman or Senator. If out of the U.S., please write to Secretary O'Neill himself at:The Honorable Paul H. O'NeillSecretary of the Treasury1500 Pennsylvania Ave., NWWashington DC 20220Yes, I know I am beating this one to death. Actually, not yet. Just warming up! We should all stay on this until The Gold Cartel is dead. This can be their Achilles Heel. Start shooting your arrows. We should stay on this until Secretary O'Neill is forced to give Congress answers he should have given them months ago. You can sit there stewing and complaining about what The Gold Cartel is doing to you, or you can do something about it by taking it to them. It is time to mobilize in a very serious way.Sample questions:*DOES THE TREASURY OF THE UNITED STATES OWN 54,067,331 OUNCES OF GOLD AT U.S. MINT IN WEST POINT, NEW YORK, WHICH ARE CLASSIFIED IN F.M.S. STATUS REPORT OF SEPTEMBER 30, 2000, AS "CUSTODIAL GOLD BULLION"? YES OR NO?*Why was 1700 tonnes of "Gold Bullion Reserve" at West Point reclassified to "Custodial Gold Bullion" in September 2000?*Why was Treasury owned gold in the Denver Mint, Fort Knox and at the West Point Mint reclassified at all three locations to read "Deep Storage Gold" as of May 31, 2001?* What does "Deep Storage Gold" mean?For reference, these reports can be found at:http://www.fms.treas.gov/gold/index.htmlIf every one does so little, it can mean so much - that we have evidence of already.MIDAS ORO (7/14/01; 01:56:25MT - usagold.com msg#: 58058) Canuck - Noland is both He is both alarmist and puts forward alarming info. I believe he tends to focus a little too much on the volumes rather than on their meanings. His calling for restrictive regulations indicates he has missed the mark on the most fundumental level. His analysis of the credit bubble does not include a deep look at international credit creation - the kind of "inflate thy neighbor" dynamics that I like to point out. I believe that the fact of banks retaining great market shares in EU and Japanese credit markets is evidence enough of their central banks being far greater inflators than US counterparts.The US demand situation continues quite healthily because of our rather balanced demographic and the coming into the labor market of the echo boom generation "Y" that will provide the US with an extra 1 to 1.5 mil new workers per year more than in the bulk of the 80s and 90s (the 70s and early 80s saw an enormous baby boom and early bust generation come in - which led to a temporary drop in real wages). Having their whole lives ahead of them, these youngsters will discount an average cumulative lifetime future income of about $500,000 in today's dollars each. They will need places to work and live, electricity, cars, gadgets, and even furniture. This generation will have borrowed to fund their education, their first cars, and probably will do this with every purchase of size. Having come of age during the relatively deflationary late 80s and 90s, and the tech boom and bust, they will find monetary savings somewhat more attractive than equity was to their predecessor generation "X" who came of age during the inflationary 70s and had an aversion to cash as a result. It is the combination of American demographics and Asian debt, funded by Japanese creditors and European creditors before them that have created the low prices that bring Americans to buy foreign goods, and it is the payment of debt to these creditors and their unwillingness of Asians to borrow further that has brought Americans to borrow so much. The low interest rates from Japan being the most substantial cause for global credit inflation and the enormous boom and bust in America, and in Emerging markets. The fragile finance Noland speaks of extensively is very much there with many playing the borrow short lend long game that was the dominant financial strategy of the 90s but had (re)started in the late 80s. This game can only continue profitably when a short term lending source is pushing money out the door as fast as anyone is willing to pick it up. 15 years of this are an indication of trouble in the financial markets and an indication of "malinvestment" in the physical economy. Noland still missed this part of the game in his criticism of the Fed, which is far from perfect, but not as far than any of its counterparts. The international "hot money" he talks about is seeking the highest return it can find and the lowest cost it can get. It is that cost which Noland does not see. US workers borrow for home purchases at an artificially low rate dictated by the tax system, and the higher one's income (up to a point) the higher the subsidy. For this middle class borrower, the real estate and SUV bubble is exactly what Noland sees. What he does not see very well, is where this money comes from - where it is lent its "leverage". Long term private bonds in Japan are yielding 1%. Banks in Japan can and have borrowed at 0,15%-0.5% from 98 onwards and bought these long bonds to pocket a 50% to 250% "emergency" return, but their depositors and international borrowers could also just lend and borrow (respectively) in Japan, buy yen options from Japanese banks (nicely profitable), and invest these funds in every place on earth. Which is exactly what they are doing. Thus the PE of major world equity indices are roughly sitting at equal valuations for 1 year projected future earnings, and particularly 2 year. In his latest piece he drew attention to US borrowers taking up borrowings from abroad, now at 7% long term rates, but what is the alternative for the international investor? 1% in yen? 5.5% in euro? Asians are nearly completely unwilling to borrow and after market rates are at 7% in Korea. How about pesos at 10-12%? International borrowing in euro had a bout of high volumes, but quieted down very quickly as the ECB recoiled and raised rates, and reforms remained slow in coming. Netking (7/14/01; 01:24:20MT - usagold.com msg#: 58057) Rand's Slide Won't Save South African Gold Miners http://library.northernlight.com/FD20010712420000069.html?cb=229&dx=1006&sc=0#doc Further to post 58054 . . . They(the miners) would not have a prayer of their demands being met, this bodes a prolonged affair with no immediate resolution in sight - Netking.-----------------------------------------------------------South Africa's gold mining companies stand to add two to three per cent to their operating margins following this week's weakening of the South African rand. Rand weakness has seen the rand gold price nearing record levels of about R2'207 per ounce, equal to about R71'000 per kilogram of gold produced. The all-time high for the rand gold price is R2'299 per ounce, or about R73'500 per kilogram, achieved in May this year.However, analysts don't think there are grounds for jubilation on the potential effects of rand weakness. This is because the track record of South Africa's gold miners suggests that they will not be able to capitalise on the currency weakness. The rand has depreciated about 35 per cent since 1998, but industry-wide cash flows, after capital expenditure, are still at levels recorded three years ago - about R600 million to R700 million per quarter. There was a spike in cash flow during the third quarter of 1998 when about R1 billion was generated from South Africa's gold producers. "The big question is whether the South African gold miners can keep control of their cost base," says JP Morgan's gold analyst James Wellsted. The performance of South African gold mines in the last quarter of 2000 was typical: "Costs in Q4 1999 of R1'473 per ounce have risen to R1'613 for Q4 2000, eroding much of the benefit the industry should have derived from a 14 per cent rise in the average rand gold price over the same period," Wellsted wrote in a report. Netking (7/14/01; 01:17:31MT - usagold.com msg#: 58056) London's rich eat gold to keep in health http://www.fingaz.co.zw/fingaz/2001/July/July12/2266.shtml Snippit:"Gold is worn usually as a sign of wealth, but the well-heeled of London and its environs have been eating it for years for health reasons and now believe it has anti-ageing benefits when used in facial treatments. "In the last four or five months there has been an upsurge in what people do with gold," said Bruce Alexander, joint owner of the Archipelago restaurant in London's West End. "We have been using it for many years here we try to do something different with food," he added. A lot of the food prepared at Archipelago is geared towards healthy eating such as kangaroo meat, scorpions and locusts and gold is used for the same reasons. Alexander said the metal, when consumed regularly, was good for circulation, cleared the blood and enhanced the mind . . . . SHIFTY (7/14/01; 01:00:14MT - usagold.com msg#: 58055) The National Union of Mineworkers http://allafrica.com/stories/200107130327.html The Sowetan (Johannesburg)July 13, 2001 Posted to the web July 13, 2001 The National Union of Mineworkers (NUM) has started balloting its members for a national strike after third-party facilitation ffailed to resolve the wage dispute between the union and the Chamber of Mines.The Commission for Conciliation, Mediation and Arbitration (CCMA) were brought in after the two parties deadlocked on a number of issues since wage negotiations began in April.If the strike goes ahead it will be the second time in 14 years that the industry is hit by such action since the 1987 strike, which saw both parties lose millions in wages and profits.NUM spokesman Mr Moferefere Lekorotsoana said yesterday that a national strike was "inevitable" now that the union had been awarded a CCMA certificate enabling it to embark on a legal strike."It is in this context that the union has informed all its regions and branches to begin a ballot of its membership for the purposes of calling a national strike," he said.Lekorotsoana said that only a change of stance by gold industry employers would stop the strike. The union is demanding a guaranteed 8,5 percent wage increase (down from 20 percent) and a minimum R2 000 a month salary against the employer's offers of between seven and 7,5 percent (up from 6 percent).That disparities still exist on wage and annual leave along racial lines also formed part of the dispute. The the union charges that black employees still get 21 days' leave, while their white colleagues enjoy a full calendar month.He said the union was still open to negotiations and had allowed the collieries to reconsider their offers on outstanding issues."We have further indicated that we will meet with both collieries and gold on Tuesday next week."Lekorotsoana said the issues at stake did not just affect the union and the employer but the entire industry.Chamber of Mines spokesman Mr Peter Bunkell is on leave. He referred inquiries to the company's offices where nobody was immediately available for comment. - Sapa Netking (07/14/01; 00:09:52MT - usagold.com msg#: 58054) Mine shutdown - Strike action looming? Johannesburg - A strike, which could bring the mining industry to its knees, loomed closer last night after the National Union of Mineworkers (NUM) and the Chamber of Mines failed to avert a dispute over wages, leave and medical incapacity.The 220 000-strong union last month declared a dispute with the chamber, which represents most big mining companies. The wage talks affect about 155 000 miners working for gold giants AngloGold, Gold Fields, Harmony Gold and several collieries. Gwede Mantashe,the union's secretary-general, said: "We have deadlocked with gold (mines) on wages, leave and medical incapacitation. Legally, we can now give a 48-hour notice for strike action, but organisationally we are going to a ballot on Monday."----------------------------------------------------------Shifty: . . . that reminds me of the joke, how do you confuse a Scotsman? You put him in a round room & tell him there's a penny in the corner! SHIFTY (07/14/01; 00:03:30MT - usagold.com msg#: 58053) Gandalf the White I did not know a Round Table / Table Round had an end. I learn stuff here all the time !It's good to see you !:-)$hifty ViewYesterday's Discussion.
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