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ARCHIVED DISCUSSION FROM 9/14/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Sierra Madre (9/14/06; 23:54:57MT - usagold.com msg#: 147474) BED TIME STORY Once upon a time there were three little pigs, and the time came when they had to go out into the world to make their own way.The first little pig made himself a house out of stocks. And the big bad wolf of financial collapse came, and he huffed and he puffed and blew the house down, and ate the first little pig.The second little pig made his house out of bonds. And the big bad wolf of monetary inflation came, and he huffed and he puffed and he blew the house down, and ate the second little pig.But the third little pig made his house out of gold. Then the big bad wolf of the PPT came and he growled at the little pig's door and said, "Little pig, little pig, sell your gold or I'll blow your house down!" And the little pig answered, "Not by the hair of my chinny chin chin!" So the big bad wolf he huffed and he puffed and he caused the price of gold to fall tremendously. But the little pig was still safe and warm in his house of fully-paid up physical gold. So the PPT wolf said, "I'm coming down the chimney!" So the little pig set a pot to boil on the fire in the chimney, and when the big bad PPT wolf came down the chimney, he fell into the boiling pot and the little pig had PPT wolf stew for supper.And the little pig lived happily ever after and his gold house became more and more valuable. Sundeck (9/14/06; 20:51:45MT - usagold.com msg#: 147473) Hank Paulson's China etude Ref mikal #147466Having been spectacularly unsuccessful in bashing into China with the stick of the Snowman, the US Treasury is now trying to woo China with flattery and reassuring, fatherly encouragement. Unfortunately Paulson comes across as being just a tad too paternal in his worldly acclaimations.Come now, Mr Paulson, we all know that America speaks with its own self-interest at heart...I know it, you know it and China knows it. And guess what? China is going to do exactly what it feels is in its best interest...although perhaps without reciprocating paternal advice for you.To the extent that it is able, China will progressively increase domestic consumption of its manufactures, as well as increase their export to countries from which it receives the raw materials and services that it uses to power its economy. These countries include a goodly bit of the developing world (Brazil, Venezuela, India, Africa and Russia, amoung others). Exports to these countries will likely grow to offset diminishing exports to the USA as the US consumer's home-equity is fully withdrawn and US domestic spending plateaus, or descends. The big question is whether these trends can march in time to avoid shocks and economic disruptions....The way the CRB index is behaving (major correction), it would seem that there is not a little concern amoungst investors that the transition is likely to be rough, rather than seamless...:-) The Invisible Hand (9/14/06; 20:49:33MT - usagold.com msg#: 147472) Hanky goes to Beijing ... FIRST STOP : MONKEY-POREhttp://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=2006-09-15T011613Z_01_SGA000019_RTRIDST_0_IMF-OUTLOOK-URGENT.XMLSINGAPORE, Sept 15 (Reuters) - IMF Managing Director Rodrigo Rato said on Friday that world policy makers needed to be ready to adapt to a "more challenging" economic outlook.http://www.finfacts.com/irelandbusinessnews/publish/article_10007293.shtmlMF fears global growth contraction in 2007; Urges ECB to move cautiously on interest rate hikeshttp://www.atimes.com/atimes/China/HI15Ad02.html"The United States has nothing to fear from China's emergence as a global economic power ... We want you to succeed ... The tasks faced by Beijing are so daunting that the biggest risk we face is not that China will overtake the US, but that China won't move ahead with the reforms necessary to sustain its growth and to address the very serious problems facing the nation." - US Treasury Secretary Henry Paulson, who is due in Beijing for two days of talks with Chinese officials next week. http://www.washingtonpost.com/wp-dyn/content/article/2006/09/13/AR2006091300931.htmlTREASURY SECRETARY REMARKS ON INTERNATIONAL ECONOMYCQ Transcripts WireWednesday, September 13, 2006; 11:48 AM SPEAKER: HENRY M. PAULSON, U.S. SECRETARY OF THE TREASURYOn energy, China, which was self sufficient in oil until 1993, is now the world's second largest oil consumer behind the United States. We clearly share an important interest in energy security with China and other nations, particularly those which are net importers of oil.That means developing new sources of supply, minimizing supply shocks, increasing conservation, and the developing alternative technologies. Since much of the oil we both need is found in troubled regions of the world, China and the U.S. have common incentives to minimize regional instability while reducing our dependence on foreign oil.http://www.atimes.com/atimes/China/HI15Ad02.htmlWHY A RISING CHINA CAN'T DOMINATE ASIA It has almost reached knee-jerk proportions: a powerful China will assume the leading position in Asia at a time of US decline. Officials in Beijing and a host of Asian countries paint a different picture. Flexible diplomacy by Asian governments supported by undiminished US security and economic power and influence precludes Chinese leadership or dominance in Asia, and in fact reinforces US leadership==1.Before Paulson goes to Beijing, he will stop in Singapore for the IMF.Gold and its pricing will certainly be informally discussed there.When currency exchange rates are being discussed, the discussion concerns not only the economic aspect but also the monetary (reserves) aspect (imbalances!).Then our masters will again be concerned with question what is the optimum of a central bank gold reserve and in what quality (freely-unfreely priced)?The answer to this question will determine the redistribution of the "excessive" gold reserves of Portugal, Algeria and Lebanon.Hence, the movement in monetary and non-monetary gold and the monetising or not of those reserves.It seems that the international financial and monetary administration (the central banks) have not yet reached a consensus on these matters.The paradox of the monetising (the coining into money or establishing as legal tender) of monetary gold (reserves) on the one hand and the severance of the link between gold and currency on the very visible.2.Hanky Panky says that China and the U.S. of A. have common incentives to minimise regional instability while reducing our dependence on foreign oil.How did the price of oil go from $10 (1999) to $80 (2006)?Only because of regional instability?What happened to peak-oil?Or … Is it permissible for the financial industry to negate the invisible hand with their dollar power?Is Hank going to try to dollar-americanise China?Is China letting the gold knock-down containment happen for the moment, just before it goes to Singapore? Does Paulson want to let the yuan float in order for the dollar International Financial and Monetary System (IFMS) to introduce price-inflation?How can Paulson, in face of the undeniable Chinese power, go to China to ask it to support the dollar-regime?If, as the Asia Times suggests, a rising China can't dominate Asia, because of US of A leadership,isn't it time to throw the child (the US of A) out with the bathwater (the dollar)?Hank should know that the Chinese language has no equivalent of "Monkey see, monkey do" and that the name "Singapore" does contain the French word "singe", "monkey". USAGOLD Daily Market Report (9/14/06; 18:56:40MT - usagold.com msg#: 147471) Page Update! http://www.usagold.com/DailyQuotes.htmlThe 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.THURSDAY Market UpdateGold futures dn $10, $700 rally forecastedSeptember 14 (from Reuters, MarketWatch) -- Gold futures in New York sank 1.7 percent to end at a three-month low Thursday, pummeled as oil prices hit a six-month nadir and as traders generally were reluctant to step in front of falling commodities markets.Gold retreated further from $600 an ounce resistance after briefly rallying in early trade, as few investors saw the market offering an immediate buying opportunity, due to expectations that it could soon test support near $570 to $580.The COMEX December gold contract fell $10.30 to $586, its lowest close since June 19.Gold has lost 10 percent on aggressive investment selling after it failed last week to get above resistance just shy of $650. "There are so many speculators and gold-bugs so materially 'hurt' in the course of the past several days that their margin clerks are going to make quite certain that they are sellers of gold, silver, platinum et al on this and any subsequent further rallies," said Dennis Gartman, author of The Gartman Letter."It may prove to be a costly mistake to urge people out of gold entirely, precisely during the time when its protective attributes are becoming very much needed -- the present era of uncertainty and turmoil," said Jon Nadler, an investment products analyst at Kitco.The drop in gold prices over the last few weeks was driven partly by easing concerns about inflation, as energy and commodities prices tumbled from their recent highs, analysts said.Separately, Europe's central banks have stepped up sales of bullion as the deadline for the current phase of an agreement limiting sales approaches. But analysts said that for the first time in seven years the banks are not likely to sell their full quotas. Markets expect sales to fall about 25 percent short of the 500 tonnes of gold that central banks are allowed to sell in this, the second year of a five-year Gold Sales Agreement, which ends in around two weeks.Meanwhile, precious metals consultancy GFMS said strong investor buying on a bleak outlook for the dollar and a volatile situation in the Middle East is likely to drive gold through $700 by year end.GFMS said in a half-yearly update to its Gold Survey 2006 that even higher prices could not be discounted, though that was perhaps possible in 2007.For now, "the negatives for the metals (strong financial markets, firm dollar) will probably remain for now but I expect to see the stock markets come undone soon and, if that were to occur, it should provide the necessary spark for the next leg up in the metals complex," said Dale Doelling, chief market technician at Trends In Commodities.---(see url for full news, 24-hr newswire)--- TownCrier (9/14/06; 17:15:08MT - usagold.com msg#: 147470) The joy of learning http://www.usagold.com/gildedopinion/oz.html In order to better comprehend the economic socio-political contests of the modern day, it is often helpful to learn enough history as context to grasp that the nature of these struggles is an on-going feature.A light introduction for those who are new to this area of exporation can be found in the latest arrival at our Gilded Opinion pages.Called "Money and Politics in the Land of Oz", in it author Quentin P. Taylor walks along with you down a fun and fanciful path (i.e., yellow brick road) to explore a few of the monetary and political intrigues at the turn of the previous century.A full and on-going education is important because the more you know, the better you are able to comprehend the big picture and to thus ensure that you make wise decisions in the course of your life.Bottom line: the more you know, the better you understand the comforts and benefits of gold ownership.R. Flatliner (9/14/06; 17:09:25MT - usagold.com msg#: 147469) Anyone notice? SLV is now in trust of 103,325,607 ounces silver.GLD has also jumped a couple tones from 390.7 to 393.79.There may be a panic in the paper markets, but when it comes to physical holding, investors seem solidly stable. Ten Bears (9/14/06; 16:13:24MT - usagold.com msg#: 147468) Equity Markets Approach Critical Mass http://www.safehaven.com/article-5883.htm by Joseph RussoSnippets:"Those who controlled the Money and Banking System had at their complete disposal the most robust and full spectrum instrument of power with which to control the course of the World Societies, and their inherent Internationally Trade Based Economies." If such revelations were not born of a sincere crisis related, solution based moment of recognition; one has only to assume that such motives were far more sinister and willfully engineered. Since abandoning the Gold Standard in 1971, The Federal Reserve has issued nothing but "make believe" worthless units of pure fiat debt/credit, vs any reasonable facsimile of "hard asset backed money." As such, dollars as we know them are not truly valid representative measures of wealth; rather they simply represent the current medium of exchange for essential goods and services as commanded by Government fiat. The more dollar (debt) units of exchange that are available, the less valuable they become. This is a flat out Debauchery of Sovereign Currency, camouflaged under the propaganda paradigm of inflation.At the end of the day, we are all in effect playing one big game of monopoly at the house of the spoiled rich kid who owns the game, always gets his way, insists on making up his own rules, always has to win, and who is always in charge of the money.It is common knowledge in both the financial and political communities that there is an overabundance of largely intractable fiscal and geopolitical minefields weighing upon the present and future landscape of Globalization as presently structured.As such, we shall continue to presume that easily manipulated illusory benchmarks of unequal measures alongside well managed maligned reporting of official statistics is likely attributable to rapidly diminishing levels of plausible denial rather than representative of any legitimate milestones of merit toward achieving a greater good. mikal (9/14/06; 14:29:36MT - usagold.com msg#: 147467) China/EU trade grows http://cbs.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BD75D38A9%2DEB55%2D45E6%2D8747%2D440A73E84EDB%7D&symbol= Chinese PM Wen Says Sino-German Trade to Reach $80 Bln in 2006 | Sep 14, 2006BERLIN (MarketWatch) -- Chinese Prime Minister Wen Jiabao sees trade with Germany growing this year with the value of goods probably reaching $80 billion. "Trade relations between China and Germany overall are very good," Wen told reporters after meeting with German Chancellor Angela Merkel. The value of trade goods flowing between the two countries "will probably reach the $80-billion mark this year," Wen added. Germany is one of China's most important trading partners within the European Union, with around EUR61.2 billion worth of goods flowing between the countries in 2005. At the current dollar rate, that's worth $77.8 billion. A spokesman for the BGA association of German traders and exporters said he's confident that the $80-billion level "will definitively be surpassed." He pointed to the 27.6% rise in German exports to China and the 28.8% rise in imports from China to Germany during the first half of 2006 compared with the same periods a year earlier.At the same event, official signed agreements between the two countries, which included a feasibility study between China's state-owned energy firm Sinopec Group and BASF AG (BF) about the Yangba project, a long-term cooperation agreement between Shanghai Chemical Industry Park Development Co. and Degussa (China) Co., a unit of German conglomerate Degussa AG (DGX.XE), as well as cooperation to protect intellectual property rights. Asked about China's demand for the European Union to treat it as a market economy, Merkel said she wants a continued dialogue between the E.U. and China about market economy status. "Once the Commission comes to the conclusion that talks have been successful, Germany will support the proposals," Merkel said. The E.U., which has so far been reluctant to grant China this status, will review the question again later this year. mikal (9/14/06; 13:55:03MT - usagold.com msg#: 147466) China/U.S. ties less ambiguous than fate of U.S. $! http://www.theaustralian.news.com.au/story/0,20867,20413685-36375,00.html US Wants China to Succeed: Paulson | Krishna Guha, Washington | September 15, 2006 | Excerpts:"US Treasury Secretary Hank Paulson has laid out the framework for a comprehensive new strategy towards China, emphasising the need to take a "generational" view of the US-China relationship.Mr Paulson told the Financial Times he wanted to "strike a balance" between tackling pressing short-term issues while maintaining a strategic perspective on China's emergence as a leading player in the global economy."["New perspective" etc. Code words for CHANGE. Watch how regional agreements flower with less emphasis on the dollar IMS and western consumer "growth and prosperity" drivers.] ""We have a common interest," he said, arguing that many of the steps the US wanted China to take were in its own best interest. The interview followed a landmark speech by the former Goldman Sachs chairman ahead of his first trip to China as Treasury Secretary, in which he said he would tell his counterparts in Beijing: "We want you to succeed." Mr Paulson said: "The United States has a huge stake in a prosperous, stable China - a China able and willing to play its part as a global economic leader." He said the US and China shared areas of economic interest, highlighting energy and the environment as two specific areas where the two nations should work together. He added that the US looked to China to be its "co-operative partner" in reviving the Doha trade talks. Officials said Mr Paulson would push hard on Doha in meetings with world finance ministers in Singapore later this week."[It seems these trade talks are subordinate to all "regional priorities" such as the NAmer. trade zone?]"For example, he said, on the currency front "the intermediate-term viewpoint is that it is very, very important to open up their capital markets, to have healthy competition within the domestic financial system, so they can have a currency that is freely tradeable". But he added: "They also need to show more flexibility in the short term." His speech did not dwell on the currency as a stand-alone issue, framing it as part of a necessary shift towards more market-based management of China's economy. But Mr Paulson warned the Beijing authorities that they underestimated "at China's own peril" the extent to which the currency was "viewed by their critics as a symbol of unfair competition". He called on China to press ahead with liberalisation across a broad front, including financial sector reform, fiscal and regulatory policies to reduce excess savings, market-based macroeconomic management and intellectual property rights."[China's savers will have no choice but to yield to official pressures and various incentives to spend more into the domestic and regional economy as the U.S. and Europe importation "miracle" becomes a mirage. Not how oblique references to the Chinese currency compliment US Treasury/administration/Fed opaque dollar policy. Clearly they say one thing and do another. So the dollar will get derivative rash and the scratching will be a worldwide contagion.]"In his speech, Mr Paulson praised China's record of economic reform, and said China already "deserves to be recognised as a leader". This, he said, was why the US backed plans to give China and other emerging markets a much bigger say in the International Monetary Fund."[Plenty of Paulson praise for China, unlike Bush who couldn't even afford traditional protocal during their leader's recent visit to DC.]"The speech positions Mr Paulson in the role of honest broker between China and its critics in Congress. He characterised the fundamental division as not one between the US and China, but between liberalisers in both the US and China, and their protectionist opponents."[The commercial banks and media fail only to supply the violins. They and the corporatocracy and shadow bureaucracy to the wealthiest globalists will decide as always the ground rules of trade- who, what, where, when and "why".] Ten Bears (9/14/06; 13:46:32MT - usagold.com msg#: 147465) Mogambo Guru http://www.321gold.com/editorials/daughty/daughty091306.html Very good Mogambo Guru commentary today! mikal (9/14/06; 13:16:33MT - usagold.com msg#: 147463) Headlines from People's Daily People's Daily Online headlines:Chinese army concludes first exercise involving long-range maneuvers Thu Sep 14, 2006 Chinese premier reiterates resolve to protect intellectual property rights Thu Sep 14, 2006 China mainly relies on domestic supply to meet energy need: Chinese premier Thu Sep 14, 2006Chinese premier says Sino-EU ties stronger than ever Thu Sep 14, 2006China committed to pursuing peaceful development: Chinese premier Thu Sep 14, 2006Let us not forget China is stockpiling moany months and in some cases, years worth of commodities of various forms.Their gold stockpiles on the other hand, should last even longer. Flatliner (9/14/06; 11:34:25MT - usagold.com msg#: 147462) @Why 3000 tons? Sierra Madre, you bring up a really good question. Why, in this day and age, would the Chinese need any gold reserves at all? As we have all learned, gold reserves have been used to fight gold rather then give it backing thus the real question is what you wrote "I don't see why any gold at all is needed."This is where we need to think about the function of gold. What if oil really only trades for a fiat if that fiat buys gold? What if, oil has been trading with US dollars because US dollars will buy gold anywhere in the world? Another wrote that this is true and that gold is flowing to just some players and it's vitally important that the physical gold make it to the appropriate destination. In other words, he implied that there is function to this gold that is above and beyond what we see in the public markets. What if, central banks of the world need the backing of oil in order to complete the function of the fiat currency that they print? In other words, sense oil's backing the US Dollar all countries find support from oil by holding US Dollar reserves. Now let's consider the Freegold concept where a central banks currency is freely convertible into gold on their open market. It is an interesting thing to think about. Here, the key thing to notice is that anyone that collects the central bank fiat can redeem it for gold within that country. If Oil collects too much of that one fiat, they can redeem it for gold in that country OR use it for economic trade, again, in that country. If trade gets out of balance, the country going in debt will find a rising price of gold as the debtor comes collecting. This lowers the value of the fiat and, in turn, increases export trade because the standard of living is falling in the country that is in debt. Now comes the function of gold. The trick for the central bank, at this point, is to manage it's fiat against gold rather then other currencies. Here, the debt of the country can be ‘forgiven’ as the fiat falls against gold, but, to maintain oil support, gold MUST continue to flow until a trading level is found for the fiat that improves international trade.If you look closely, the function of gold now not only gets the backing of oil, but it also becomes the measuring stick for the fiat currency. Without gold, the gold-less country will be forced to build fiat reserves with another country that is strong in gold. The weak country will be subject to the politics that rule trade in the strong country and, ultimately, the weak country will be economically enslaved to the strong one.Gold for China, gold for All of South America, gold for Russia, gold for Europe, gold for any central bank gives them the right to control their own fiat float. That is what the US Dollar has been doing for decades but is not widely understood (Strong dollar). Every central bank that has declared that they are building gold reserves and using the MTM concept has publicly said that we measure our fiat against gold – redeem our fiat in OUR gold, trade with us, because if gold is in low supply in our market, we will liquidate our reserves to support our fiat. In other words, gold provides the guarantee of fiat stability. As we watch the US trade imbalance grow to a crushing level, the world will discover the beauty of the Freegold concept as soon as the people of the world realize that the implicit strong dollar policy can not function under the growing debt load. It must be weakened. That is the point at which the world will see how gold behaves as a reserve asset and we'll see a functioning Freegold system without any words spoken. It will just happen.At the same time, it may not be that the central bank will need to by reserves before this transition, but without golden reserves, it will be REALLY hard for them to maintain confidence in their currency in the face of all the other currencies that will have gold support. In other words, the central bank will have to buy gold with their own fiat. Those that hold gold in that country will only part with the gold if the fiat has value (function) for trade. Thus, wow be it for any country that does not have gold reserves!Now a plug for our sponsor: Buy their physical gold for your reserves. Goldilox (9/14/06; 11:26:55MT - usagold.com msg#: 147461) Down into the close The attack on PMs is heightened into the Comix close. Whew! Goldilox (9/14/06; 11:00:32MT - usagold.com msg#: 147460) Gold futures fall; rally forecast weighed http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&dist=moreover&guid={1A624DEB-DD6B-4D5E-8A50-318BD4711528} snip:SAN FRANCISCO (MarketWatch) -- Gold futures fell Thursday as traders mulled a report from a key metals consultancy that predicted prices could surpass $700 by the end of 2006 but warned a downturn in the U.S. and Chinese economies could put that estimate at risk.Gold prices could top the $700 mark by year-end as investment purchases offset weaker demand for high-priced jewelry, said GFMS Ltd. Thursday.But it also said any severe downturn in the U.S. and China could sink the price of gold and other commodities. See full story.And gold demand faltered in the first half as prices reached a 26-year high, with jewelry fabrication fell by over 400 metric tons, or nearly 30%, with the biggest drops in India and the Mideast."The GFMS outlook seems to justify at least a portion of the September washout in prices," said Nell Sloane, analyst at NSFutures.com."One could also conclude that the failure to see renewed bargain hunting and investment buying would mean that the ... forecast generally favors the bear camp," she said in daily commentary.In midday dealings, gold for December delivery fell by $3.50 to $592.80 an ounce on the New York Mercantile Exchange, turning lower after earlier touching $600.30. The contract climbed $2 on Wednesday to break a five-session losing streak that caused prices to fall by a cumulative $52.60.Despite GFMS's prediction of $700 gold by the end of the year, "the gold market appears determined to complete a corrective phase that many misjudged as having ended during the most recent rally (from July 4th to last week) up to the $640 level," said Jon Nadler, an investment products analyst at Kitco.com.Still, "it may prove to be a costly mistake to urge people out of gold entirely, precisely during the time when its protective attributes are becoming very much needed -- the present era of uncertainty and turmoil," he said.-GoldiloxSounds like something Lewis Carroll might have penned. Chris Powell (9/14/06; 09:16:34MT - usagold.com msg#: 147459) Russian central banker murdered after attacking insolvencies and corruption http://news.yahoo.com/s/ap/20060914/ap_on_re_eu/russia_banker_shot By Steve GuttermanAssociated PressWednesday, September 14, 2006The top deputy chairman of Russia's Central Bank died Thursday, hours after being shot by unidentified assailants in an attack that officials suggested was prompted by his efforts to clean up the country's banking system.Andrei Kozlov, the bank's first deputy chairman, died hours after he was hospitalized in critical condition following the shooting late Wednesday, Moscow prosecutor's office spokeswoman Svetlana Petrenko said.Kozlov's driver was also killed in the attack, which Russian media said was carried out by two gunmen who fled after the shooting. It occurred outside a sports arena where bank employees were having a soccer game.While rarer than in the turbulent 1990s, contract killings of businessmen and bankers still regularly occur in Russia, where business conflicts often turn violent.Vice Premier Alexander Zhukov said the shooting was likely linked to Kozlov's duties, and suggested the possibility of a connection with the Central Bank's revocation of licenses of unreliable commercial banks, the Interfax news agency reported.Kozlov had been responsible for banking supervision, and had overseen an ambitious program to reduce criminality and money laundering in the banking system."His steps to cleanse the (banking) system and to build a normal, civilized system apparently strongly encroached upon somebody's interests," the head of the Association of Russian Banks, Garegin Tosunian, told Ekho Moskvy radio.Kozlov, 41, had been the Central Bank's first deputy chairman since 2002 after first holding that position from 1997-1999.His work had made him a potential target for the owners of the hundreds of unsound or criminal banks operating in Russia, and he had frequently been the target of smear campaigns in Russian newspapers and on Web sites.Kozlov's most conspicuous achievement had been the introduction of a deposit insurance program designed to restore faith in the banking system after widespread defaults in 1998, in which many Russians lost their savings.At Kozlov's initiative, bank licenses were revoked and others were effectively earmarked for closure when they were denied access to the deposit insurance program.Kozlov "repeatedly infringed upon the interests of dishonest financiers," the ITAR-Tass news agency quoted Finance Minister Alexei Kudrin as saying. Kudrin called him "a very courageous and honest person who was at the forefront of the struggle with financial crime."Opening a Cabinet meeting hours after Kozlov's death, Prime Minister Mikhail Fradkov expressed condolences to his wife and children and government officials stood for a moment of silence, shown on state television.Anatoly Chubais, a former prime minister who is now head of electricity monopoly RAO Unified Energy Systems and survived an assassination attempt last year, called Kozlov "an unquestionably honest, principled and absolutely noncommercial person.""His killing is an impudent challenge to all Russian authorities," Chubais said in a statement.Tim Ash, an analyst with the investment firm Bear Stearns, said the shooting was a direct affront to Putin's government and threatened a return to the violence that plagued Russia's chaotic business world following the 1991 Soviet collapse, Dow Jones Newswires reported."We would expect Putin to set the resolution of this case as an absolute priority for the country's security services," Ash was quoted as saying. "Failure to apprehend the killers would send a signal to others that intimidation of government officials is once again an option." Goldilox (9/14/06; 08:11:40MT - usagold.com msg#: 147458) Rogue Traders vs. Black Boxes I wonder which "Rogue Trader" gets the blame when a series of black box trades gets caught in the fan, or do they consider firing the "programmer", and rescinding his "Nobel Prize"?According to George Ure, over 92% of stock trades are of the program variety! I wonder how the commodities trades "stack up"?White hats vs. Black boxes?HA HA HA once again! Goldilox (9/14/06; 07:56:54MT - usagold.com msg#: 147457) PM Smack Down As soon as the CB gold-sales story was posted by Reuters, the WWF-style smack down of PMs began. Someone believes that tripe? or just coincidental that it was dropped on the market after a $5+ pre-Comix rise? Goldilox (9/14/06; 07:44:09MT - usagold.com msg#: 147456) Europe's central banks step up gold sales for now http://today.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2006-09-14T132016Z_01_L13918167_RTRUKOC_0_US-ECONOMY-CENBANKS-GOLD.xml snip:By Krista HughesFRANKFURT (Reuters) - Europe's central banks have stepped up sales of gold as the deadline for the current phase of an agreement limiting bullion sales approaches.But analysts said that for the first time in seven years the banks are not expected to sell their full gold quota.The steep rise in gold prices over the past five years may encourage some central banks to hold on to their treasure trove, while others are selling as they seek to diversify their reserve holdings.Central bankers meeting next week in Singapore for the International Monetary Fund sessions will have the opportunity to swap notes on the merits of gold versus other assets, as they review progress of the five-year Gold Sales Agreement.Markets expect sales to fall about 25 percent short of the 500 tonnes of gold that central banks are allowed to sell in this, the second year of the pact, which runs out in just under two weeks.And some wonder whether the pattern will be repeated in its final three years."Until this year they had sold the limit so it would be a departure...certainly the easy assumption that they will always sell the limit will have been shaken a bit," said Matthew Turner, analyst at precious metals consultancy Virtual Metals.-Goldilox"while others are selling as they seek to diversify their reserve holdings."And which CB holds so much shiney that trading it for dollars will "diversify" their portfolio? HA HA HA! Very funny! Clink! (9/14/06; 07:29:16MT - usagold.com msg#: 147455) @ Nathan Brazil I was about to make the same comment. I wonder when there will be the "discovery" that the main reason for all the gold shorting by entities such as Goldman Sachs turns out to be just a few "rogue traders" going against company policy. After all, wasn't that the problem with copper and Sumitomo a few years back ?C! Nathan Brazil (9/14/06; 06:23:35MT - usagold.com msg#: 147454) Trader lost $20 Million: Story emphasizes danger of gold I wonder how many people will carefully read the story notice that the trader lost $20 million SHORTING gold."By then, Edmonds had made commitments obliging the bank to deliver $331 million in gold and silver, the NYSE documents show."Most will read the headline and take away that GOLD=DANGER. The Invisible Hand (9/14/06; 04:06:05MT - usagold.com msg#: 147453) Dollar hegemony to be confirmed in Singapore http://www.cpa.org.au/garchve06/1290china.htmlSNIPYet, [Henry CK] Liu argues [writing in the influential Asia Times] forcefully that soon "the day will come when this technical issue" of the value of China's currency "will become moot, when the Chinese yuan will naturally become a reserve currency for trade, reflecting the reality of changing global trade patterns," challenging the current hegemony of the dollar. When that day arrives, the entire monetary and financial edifice of US imperialism will be subject to a major shock. The US will be unable to resort so easily to the printing press to deal with its pressing economic problems but, like most nations, will have to earn foreign currency the old-fashioned way — by working and producing. Moreover, taxing Chinese exports will simply drive up inflation in the US, particularly for consumer goods, and will hamstring corporations like Wal-Mart, KMart, Sears Roebuck and many morehttp://www.todayonline.com/articles/141916.aspSNIPIn the currency area, since China de-linked its currency from a decade-long peg to the dollar in favor of a basket of currencies, it has repeatedly promised to allow its forex regime to become more flexibility. But the yuan has since strengthened by only about two percent, rankling tempers, especially in Washington, where a soaring trade deficit with Beijing has sparked accusations of unfair trade practices and threats of punitive duties. +The IMF officials "noted that greater exchange rate flexibility, along with other policy changes and reforms in China, will aid in rebalancing the economy over the medium term, and will contribute to the orderly resolution of the global current account imbalance." — AFP ==All statements in advance of this week-end Singapore IMF meeting confirm that the dollar-International Financial and Monetary System (IFMS) wants to continue exercising its monopolisation of the determination of the monetary policies.Everybody has to comply with the US of A self-serving dollar-easy money policies, with its bubbles, booms and busts organisation.In this way, it is easy to continue arguing that the US of A and the dollar are the engines of the world economy.The US of A and the dollar want again easy commodities in spite of all resources nationalism, in order to render possible the dollar hegemonic policies. All exchange rates have to continue adapting themselves to the dollar whims in order to have continued global expansion under US of A and dollar leadership.Under such circumstances, it is barely surprising that the dollar-opposition is using the frozen price of gold to redistribute gold holdings among the members of the opposition who want a dollar-regime change.Even Japan with its $10 trillion of savings is being FORCED to remain loyal. Failing for Japan to do so would result in its loss of dollar-wealth.The easy dollar is losing its leadership because the dollar-IFMS is no longer considered by everybody to be worthy of being upheld. No pressure can force those who no longer want to uphold the System to uphold it.Most feign dollar-regime collaboration. The Chinese, for instance, talking about a controlled floating yuan experiment, but in reality:http://www.easybourse.com/Website/dynamic/News.php?NewsID=55990&lang=fra&NewsRubrique=2Japan may ask China to allow its currency to trade more flexibly at the G7 meeting scheduled to take place Saturday in Singapore, according to [Germany's Deputy Finance Minister Thomas Mirow]. "When a government tightly controls a currency's moves, it's difficult for investors to manage their risks and runs counter to the true meaning of a floating currency," the official said. "Sometimes the yuan moves in the opposite direction of its reference basket. Chinese officials should loosen controls to allow the yuan to move in the same direction as the basket," he said.Meanwhile, Rodrigo De Rato, the IMF managing director, is silent about the US of A's irresponsible monetary expansion – easy money – and the resulting housing bubble.Quite to the contrary, the culprits for the coming recession/depression are being indicated beforehand as being the yuan, the EU and Japan who don't want to grow enough, and China which does not want to slow down its growth. Goldilox (9/14/06; 00:40:17MT - usagold.com msg#: 147452) Citigroup Rogue Trader Lost $20 Million, NYSE Says http://www.bloomberg.com/apps/news?pid=20602060&sid=aVnvTc3RzYH4&refer=movers_by_index snip:Sept. 13 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, lost $20 million buying and selling gold and silver in 2002 and 2003 after a rogue trader hid contracts and reported bogus prices, New York Stock Exchange documents show.Gail Edmonds, 40, went as much as 75 times over her trading limit in the month before she was fired in January 2003, when Citigroup discovered the hidden positions, according to documents released today. The exchange fined Citigroup $500,000 for inadequate supervision of its precious-metals desk and released findings by a hearing board that investigated the trades.The case offers another example of lax controls that evolved at New York-based Citigroup under former Chairman and Chief Executive Officer Sanford Weill. Citigroup found in a 2000 internal audit that its precious-metals desk lacked proper supervision and price verification, and then didn't do enough to address the failings, the NYSE board said.The procedures Citigroup adopted "did not provide for reasonable supervision of the price-verification process,'' according to the July 17 NYSE hearing board decision released today. "As a result, the firm failed to discover Edmonds's misconduct for almost one year.''Citigroup learned of the trades on Jan. 8, 2003, after two customer inquiries about precious-metal prices. By then, Edmonds had made commitments obliging the bank to deliver $331 million in gold and silver, the NYSE documents show. At one point in December 2002, she had $373 million in open positions.Tighter ControlsCharles Prince, who succeeded Weill as CEO in 2003, imposed tighter controls last year after Citigroup paid more than $5 billion in regulatory and legal settlements. The U.S. Federal Reserve punished Citigroup for its regulatory lapses with a yearlong ban on mergers that ended in April, and the bank's shares have lagged behind peers such as JPMorgan Chase & Co. and Bank of America Corp.Edmonds also lied to a Citigroup clerk about her trading risks, the hearing board determined. She was barred from the securities industry for four years. Edmonds and Citigroup didn't admit or deny the board's findings.Attempts to reach Edmonds were unsuccessful, and her lawyer, Joan Secofsky, wasn't immediately available."We are pleased to have this matter resolved,'' said Citigroup spokeswoman Danielle Romero-Apsilos. "The firm took immediate action when the matter was discovered and we have since strengthened our internal controls.''Eagles, Maple LeafsAccording to the NYSE documents, Edmonds traded in gold and silver bullion and coins such as American Eagles, Canadian Maple Leafs, Chinese Pandas and South African Krugerrands. In January 2002, she started exceeding her $5 million overnight trading limit by concealing transactions and mispricing gold and silver positions, the NYSE investigation found.By the time she was fired, her trades obliged Citigroup to deliver about 903,300 ounces of gold and 4.3 million ounces of silver."As a result of Edmonds's misconduct, the firm incurred about $20 million in trading losses,'' the NYSE regulators said in a separate May 30 decision.Citigroup reported $6.73 billion in trading revenue for 2003, an increase of 4 percent from the previous year.Edmonds traded on behalf of retail and small institutional customers as well as for Citigroup. The hearing board said her trades on behalf of those customers used "fair and accurate prices'' and none suffered "quantifiable'' harm.Citigroup failed to notify customers it overstated the value of some precious-metals trading accounts after discovering the mistake in January 2003, the NYSE hearing board said. The firm instead corrected the accounts in the following month's statements, according to the NYSE. ViewYesterday's Discussion.
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