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ARCHIVED DISCUSSION FROM 8/16/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Horatio (08/16/02; 23:16:41MT - usagold.com msg#: 83155)
Newmont vs Barrick
RESEARCH ALERT-CSFB starts Newmont and Barrick coverage

NEW YORK, Aug 15 (Reuters) - Credit Suisse First Boston said on Thursday it started coverage of Newmont Mining Corp. <NEM.N> with a "hold" rating and Barrick Gold Corp. <ABX.N> <ABX.TO> with a "buy" rating.

CSFB analyst David Christensen said in a research note he began covering Newmont with a 12-month price target of $23.50.

Christensen said he set Barrick's year price target at $19. On wednesday, Newmont closed at $26.25 and Barrick at $15.50 in U.S. trading.

((Sinead Carew, New York news desk 1 646 223 6186))


R Powell (08/16/02; 21:19:39MT - usagold.com msg#: 83154)
Lease rates for gold
Much, much higher or, another Kitco glitch?

Our own link works but has no numbers yet for today. The folks next door are also wondering about this. Has anyone seen the higher rates confirmed elsewhere?

Sector, thanks again. Your conclusion of volume trading declining fits nicely with my theory of the same (conclusion arrived at through different means) with the actual business of buying and selling being done off Comex. With available supply declining, we should see market convulsions at some point as long as someone needs the metal whether obtained through an exchange or not, ??
Rich

sector (08/16/02; 20:47:34MT - usagold.com msg#: 83153)
@R(ich)Powell About the Silver Thing
The Users are Getting What they need...for now
But not much longer.

The LBMA seems to be where the volume deliveries arise.

There is a growing problem in silver at the LBMA. The volume is falling at a very predictable rate R^2 regression of .77 [0 is no predictive value and 1 is perfect predictive value]. July's volume was the second lowest since 1995.

The volume regression line falls to zero in the first quarter of 2003. That means the available silver will be exhausted at current price levels. In order to gain certainty we must see in the next few months a continued below the regression line fall. Such a pattern would almost guarantee a looming exhaustion [At current prices] event in early 2003.

The price will not just go up a little after exhaustion in so far as the holders will exact a heavy toll for the years of privation under manipulation.

The manipulators cannot be happy with the falling volume in both silver and gold. They know full well that speculators have already been drawn to the arena and are licking their chops waiting patiently to launch their attacks.

I have said several times here that those who wish to buy physical metal need to do so well ahead of the coming LBMA resource exhaution events. There will sinply be not time to arrange one's finances and then place orders.

Maurie Obstfelt is an macroeconomic expert [UC Berkeley] in currency and resource speculative attacks and his models show that ALL the available resource or currency at the manipulated price is consumed IN AN INSTANT.

In short, by the time you get to the phone it's too late for the "Old" prices. One MUST be positioned before the launch.

One's decision should not strain budgets or in any way sequester needed funds. If you want more in metal, find unused assets and convert them into metal but you need to act in your own comfort zone.

Blackjack (08/16/02; 20:11:26MT - usagold.com msg#: 83152)
Good article on PMs
http://www.goldseek.com/cgi-bin/news/Zealllc/1029534535.shtml
Speculators in the general US equity markets are not the only ones who have been entertained by an uncharacteristically wild summer this year. Gold and especially gold stocks have performed just about every kind of wild gyration imaginable during recent months.
While the volatile summer has certainly been emotionally challenging for all playing the markets, it was really a blessing for speculators. For those who are able to harness and suppress the inherent human greed and fear dwelling within their own hearts, this year has proven to be very profitable across the whole gold arena.
It has been about 4 months now since I hammered out my GoldTrends 2 essay, so this week felt like a good opportunity to take another look at the gold charts. We built some new graphs with current data in order to attempt to once again command the strategic perspective in the sometimes chaotic gold and gold stock action.
As daily volatility hammers investors and speculators alike and challenges worldviews and perceptions, it is incredibly easy to become mired down in the tactical daily market noise. Just as a good military general craves a satellite-level big-picture strategic overview of any unfolding campaign in war, gold speculators and investors can benefit tremendously by stepping back, ignoring the countless tactical day-to-day distractions, and focusing intently on the strategic big picture.
Gold's strategic fundamental picture is well known. It is believed that around 140,000 metric tonnes of gold have been mined in all of world history. Today about 30,000 of these tonnes are believed to be held by various central banks around the world. Most of the rest is in private hands, either in the form of pure investment gold like coins and bars or worn as jewelry.
Each year all the world's mines only manage to painstakingly chisel 2,500 tonnes of fresh gold out of the bowels of the earth. This number divided by the total gold supply yields an average annual gold "inflation" rate of about 1.8%, right in line with centuries-old historical averages. As long as fiat currency supplies around the world including the dollar are generally inflating faster than the total global gold supply, each ounce of gold will ultimately grow more valuable in currency terms.
Case in point, mega-inflationist Alan Greenspan has ballooned the US MZM money supply by an absolute 12.9% in the last 12 months. This hugely inflationary environment is fantastic for gold! Relatively more dollars chasing relatively fewer ounces of gold each year yields higher gold prices. Unfortunately, since sycophantic bureaucrats who hate freedom are running central banks all over the world, they too are inflating rapidly and intentionally destroying the savings of their people. Gold thrives in such environments of socialist government-sponsored theft through inflation.
As an added bonus, gold is also running a gaping natural annual supply and demand deficit. Today worldwide gold demand is believed to exceed 4,000 tonnes. Marginal new investment demand for gold, crucial for its price, is almost certain to continue increasing as the brutal supercycle Great Bear market in US equities continues to pour out its wrath upon the markets.
As more and more investors worldwide grow weary of their relentless general equity losses and they witness the magnificent gains the gold investors are reaping, a deluge of fresh capital is almost certain to flood into the very small and lightly-capitalized gold and gold stock markets.
Fundamentally, the gold market looks like an outstanding investment and speculation opportunity in coming years any way you slice it.


R Powell (08/16/02; 20:09:11MT - usagold.com msg#: 83151)
Blackjack
I see Adam Hamilton's name as a gold advocate in the article you just mentioned. His weekly essays are always interesting.

Blackjack (08/16/02; 19:48:24MT - usagold.com msg#: 83150)
Gold bar sales surge around the world
http://www.smh.com.au/articles/2002/08/16/1029114011350.html
The gold bugs are back. But the rush isn't just for gold coins or mining stocks. It is also for the hardcore gold bar, which can weigh as much as a concrete block and can cost as much as a small house.

"I bought the big brick-like things, doorstop size," says Crispin Odey, a London money manager who acquired a few 400-ounce gold bars (roughly 12.5 kilos) for himself about 18months ago.

Odey, who likes to feel the €125,000 ($225,000) gold bars in his hands, adds, "My wife hates them because she thinks they are ghastly and wonders why it can't be jewellery."

For years, gold buyers have been scorned as investment Neanderthals, and buying the bulky bars - more associated with central banks than with personal investment accounts - may be the most old-fashioned way to do it. Odey, 43, says that when he asked his private banker to purchase the gold bars for him, it was the first time the bank had bought any for 10 years.

But Odey isn't alone. Banks and gold refineries say gold-bar sales surged as stockmarkets tumbled. Overall sales of gold for investment rose 36 per cent during the first quarter from a year earlier in North America, Europe and Asia, according to the World Gold Council.


Blackjack (08/16/02; 19:34:35MT - usagold.com msg#: 83149)
Major Saudi paper calls for change in US relations
http://news.bbc.co.uk/2/hi/middle_east/2198156.stm
A Saudi newspaper close to the government has called for a review of the kingdom's long-standing and close relationship with the United States.

"We must question those who think that America is our strategic option that cannot be substituted "...

Al-Riyadh A front-page editorial in Al-Riyadh newspaper says there is a need to revise Saudi Arabia's international strategic relations.

The article comes only a day after relatives of victims of the 11 September attacks launched a big lawsuit against people they accuse of helping finance the al-Qaeda network, including members of the Saudi royal family.


slingshot (08/16/02; 19:20:20MT - usagold.com msg#: 83148)
Siege Engine
Gold above $300.00
Gandalf the White was drawing closer to the Valley of Clouds,leaving the Council at the castle in deep thought as to the meaning of the the Lord of the Castles words.
He had played his game of chess well. Although his Castle had fallen,he had checked their advance. He had dealt a blow to the mind of the Goldbugs. He made sure more and more entered the hall until he had a large audience and when his hall was filled invited his prey inside for the kill. Despair was his weapon. He knew depair could destroy any army better than axe or sword. That is why he chosed not to die in battle. So sure was he that he knew he would live eventhough asking Sir Howe for the Gallows.

The Council debated on The King with No Name.Who was he? How did he manage to fill the land with his castles and become powerful. Amass an army of willing followers and steal the wealth of his own people. The Council sent Gandalf the White to the Valley of Clouds. Hopefully to find answers to questions that had dulled their victory.


Gandalf the White was now entering the valley. Shadowfax pulled back and stopped. A loving pat to the side of his neck and Shadowfax stepped forward.


The Lord of the Castle'seated at a table, looked up at his guards and smiled.

R Powell (08/16/02; 18:51:39MT - usagold.com msg#: 83147)
Cousin Chris
What news of GATA?

R Powell (08/16/02; 18:44:50MT - usagold.com msg#: 83146)
Silver numbers
The same link I just put up also gives the numbers for silver. After the recent 60 cent drop in the POS I had expected to see that the big specs had reduced their long positions by much more than the numbers show. Again, these are totals through 8/13/02.
It appears that the silver market has become even more thinly traded so that even a little buying or selling (little in terms of % of contracts) can drastically move prices. There is silver being bought and sold in this world, I just don't think much of it moves through Comex. Many analysts (Butler and Morgan) have given the opinion that the silver market may use up all available supply before the shortage of silver is priced into the supply/demand equation. I find this extraordinary but quite probably true.

Had the silver market already priced in the fact that the government would soon become a large market buyer? The news gave no price support.
Did the presidential signing of the silver purchasing bill go completely unnoticed by the market? How long has the market ignored the declining remaining stores?
What is determining the POS? Is it simply the trend following speculative computer models? When was the last time any reason for a rise or fall in POS was given other than that POS was following gold or moved by technical trading? Actually, this is possibly the logical result of a market that has had a huge available (and always present) supply (5,000 years worth) for as long as anyone can remember. How else would it trade? Certainly not like corn or soybeans which have appreciated in price 25% very quickly on the threat of a possible 10% reduction (WASDE numbers) to this current year's supply. Imho, the beautiful white metal trades in a very lightly traded market, totally oblivious of supply and demand considerations, a fundamental information vacuum. This is volatile, dangerous, potentially profitable and great fun.
Any thoughts, news or opinions??
Happy weekend!
Rich


misetich (08/16/02; 18:21:05MT - usagold.com msg#: 83145)
Warnings of rising pension liabilities continued this week
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029529800000&sn=1&banner=mainwire
Snip:

Warnings of rising pension liabilities continued this week, a
result of the stock market's dramatic decline this year. Caterpillar
confirmed Thursday what it had previously warned, that pension costs
would cut after-tax income by $650 million. Analysts stress that pension
funding may prove to be a temporary problem, provided that the stock
market moves no lower.
**********

Misetich

Certification by all CEO, and CFO's is a total scam! Underfunded pension plans, off - balance sheet items - stock options (tech)

Nothing has changed - Investor Fraud Continues - but somehow it feels even worse as the SEC and US government have convinced the marketplace (the unsuspecting) to trust corporations

Got gold?



R Powell (08/16/02; 17:59:36MT - usagold.com msg#: 83144)
COT numbers
http://www.cftc.gov/dea/futures/deacmxsf.htm
Usually the Commercials and Non-commercials hold opposing positions as these two groups are the big boys in the game. So, if one group is long, the other will be short and vice-versa. It's not too often that both groups hold net short positions but that's the case now with the so-called Non-reportables (small speculative players) holding a net long position of approximately 30,000 contracts. This group is composed of those whose position is under the required limit for reporting. The totals of the Commercials and Large specs are

Combined longs = 103,538
shorts = 133,446

Subtracting these numbers from the total open interest gives the small players numbers. So, the producers, users and big fund managers are aligned on the short side with a vast number of small investors taking the opposite side. The numbers were reported as of 8/13/02.

What does this mean? I don't know other than that the stage might be set for a nice short covering rally.
Any thoughts?
Rich

Mr Gresham (08/16/02; 17:41:17MT - usagold.com msg#: 83143)
Sir Operative
Well said! We all have our stumblings, and mostly, we make our comebacks. This whole era is one of Psychology -- cynically keeping the flock moving toward the shearing, then the slaughterhouse.

As we watch this tragedy unfold, we must forgive ourselves for veering into the realm of emotionality on occasion, with all its pitfalls, for that is close to where our hearts are as well, and they are filled more with good will than with fear, and nary a hint of hatred here, that I can detect.

Keep on with your good presence, which I appreciate greatly.

R Powell (08/16/02; 17:32:53MT - usagold.com msg#: 83142)
Operative
Yes, indeedy, it is Friday!

Let me think,....no, neither you nor anyone has offended me this week except for that one lousy client who claims that my payment (for work nicely done) was mailed last week and simply can't understand why I haven't yet received it.
But it is Friday so Happy Weekend to all
Rich

misetich (08/16/02; 17:00:32MT - usagold.com msg#: 83141)
Can You Trust Your Fund Company?First it was the accountants, then the analysts and investment bankers. Is the mutual-fund industry rife with conflicts of interest, too?
http://story.news.yahoo.com/news?tmpl=story2&cid=66&ncid=66&e=4&u=/bw/20020815/bs_bw/nf20020887528
Snip:

That's the central charge of a campaign by the AFL-CIO, which is demanding reforms in the name of union members who are shareholders because of the billions of dollars invested through their retirement and other benefit plans. Labor argues that because mutual funds compete for companies' benefit business, including 401[k] plans, the funds kowtow to management while failing to vote proxies in the best interests of the millions of shareholders they represent.
.........
Plenty of experts don't buy these arguments. They say the mutual funds routinely vote with management -- a point Fidelity's general counsel recently confirmed in testimony before a New York Stock Exchange ( news - web sites) committee. And the woes of the stock market have heightened the potential for conflict. Like many large mutual funds, Fidelity has been trying to cut its dependence on money earned for managing individuals' investments, which fluctuates with stock prices, and concentrate more on such fee-based services as helping companies run 401[k]s and other benefit plans.

STOCK OPTIONS -- AGAIN. For example, Fidelity earned $2 million in 1999 [the last data available from Labor Dept. filings], for helping Tyco run $2.8 billion worth of 401[k] and other benefit funds. Fidelity is also the troubled company's second- largest institutional investor, owning 5.3% of Tyco's stock. "It's quite clear that [mutual] funds have to be very cautious in voting against their own [401[k]] clients," says John Bogle, founder of rival Vanguard Group.

A growth area for Fidelity is administering stock-option plans -- the same plans Roiter says Fidelity will vote against if they're too dilutive to shareholders. That means Fidelity could find itself voting against a plan it gets paid to administer.

Fidelity has large contracts to handle employee programs for companies such as Philip Morris, Ford, General Motors, and Shell. Overall, more than half of Fidelity's $9.8 billion in operating revenues last year came from such fee-based services, according to its current annual report. These fees, of course, are paid by the companies -- which could be ones in which Fidelity is a shareholder on behalf of its mutual-fund investors.

**********
Misetich

Conflicts of interests everywhere - and these managers get their fat bonuses at the expense of investors

There is a "few more rotten apples" that the Bush economic team admits -

The sham of certification is just that - ANOTHER scam!

Got gold?



Operative (08/16/02; 17:00:13MT - usagold.com msg#: 83140)
To Each and Everyone Here
The glowing lights of this mass of equipment here at my hobbit lodge are growing dim one by one. Silence invades the spaced carved out to be my office as the whirring of cooling fans fades away. It must be friday! (oh no, chores to take care of around the farm...)

I would call this week a win for gold. Taking some of the more pronounced blows that I can remember in recent weeks she continues to stand and in fact grown a little stronger for all the efforts.

If during this week I have offended anyone within the ranks I apologize. It was never meant to nor anything said in an ill tone. There may be times you have to overlook my stumblings on the trail as I have my days of rambling, disjointed, thought processes. Hopefully, I can improve with each posting.

I raise an ice covered cold one on high, (opps, getting water all over the papers) and I toast each and everyone who enters this place of mental nourishment and understanding.
Have a great weekend to all!!~

misetich (08/16/02; 16:52:16MT - usagold.com msg#: 83139)
Vivendi Shares Plunge for Third Straight Day
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=13&u=/dowjones/20020816/bs_dowjones/200208161259000394
Snip:

ARIS -- Vivendi Universal (NYSE: V - News) SA's shares plunged Friday for a third straight session in a selling spree sparked by the embattled French media and utility conglomerate's huge first-half loss.


Vivendi's shares closed down 12% in Paris at 9.30 euros ($9.13), after losing more than 30% of their value in the prior two sessions. Since the start of the year, the stock has fallen 85%.
.............
With the sale of Houghton Mifflin and other businesses, Vivendi said it aims to raise five billion euros over the next nine months. But S&P said it doubts that would be enough to avert a cash crunch, noting that Vivendi faces 5.6 billion euros in loan- refinancing requirements by March. S&P has cut its rating on Vivendi's debt to below investment grade, while Moody's, which also lowered its rating on Vivendi to junk last month, cut it three more notches this week to single-B1. Both agencies warned further downgrades were in store if Vivendi didn't raise cash quickly.
***********
Misetich

Vivendi shareholders and bondholders wish they had bought PHYSICAL GOLD
Vivendi is ANOTHER example of the paper ponzi scheme - much ado about nothing just like Enron

Who's the next Vivendi? Who are Vivendi's shareholder's, bondholders?

Got gold?

Belgian (08/16/02; 16:47:36MT - usagold.com msg#: 83138)
@ Operative
Right you are Sir ! I do know about those subtilities you are referring to. But we have to keep our postings readable and stick to Gold as close as possible. And indeed I do make mistakes with a lot of one-liners that could easely be mis-interpreted. Not an excuse but must be said nevertheless.
If we go along, all together, around a major teneur...I'm a happy student. After all, w're only balancing things, constantly. This to find out how close we are to the point that enough people do see Gold "as it is" and for "what" it is as it is. Some timing can do no harm.

Thanks for your attention and time spend. Bedtime for me.



misetich (08/16/02; 16:44:01MT - usagold.com msg#: 83137)
LatAm-dedicated funds data suggest sense of panic among US investors - Merrill
http://www.afxpress.com/afxpress2/afx/story_43570.xml.html
Snip:

LONDON (AFX) - Merrill Lynch said data on Latin America-dedicated mutual funds for the last four weeks suggest that for the first time, there is a sense of panic regarding investments in Latin American assets among US retail investors.

In the week ending Aug 14, Merrill Lynch said it "saw a significant deterioration in redemptions across all asset classes that we follow, with the worst pattern seen for Latin America dedicated funds."

Latin American fund net redemptions amounted to 23.8 mln usd, or 2.6 pct of assets, in the week ending Aug 14, while international Funds saw net redemptions in the past week amounting to 774.0 mln usd, or 0.7 pct of assets -- which was the largest redemption level for this asset class since May.

*********
Misetich

Investors seem unable to find places to hide. One investment - that has outpaced most investments and kept its value in the last little while is PHYSICAL GOLD - and it appears that the "bad times" are just ahead of us - which augments the reason to add 5- 20% PHYSICAL GOLD to any portfolio - as prudent portfolio insurance -

Got gold?

mikal (08/16/02; 16:35:55MT - usagold.com msg#: 83136)
Gold Derivatives peeking out of the closet
http://www.financialsense.com/editorials/sinclair/081602.htm
James E. Sinclair, www.tanrange.com
Chairman & CEO of Tan Range Exploration Corp
Downgrade Counterparty Risk: What's That?
by James Sinclair
August 16, 2002
 
There appears to be a forbidden word in established financial circles and the general media. The use of this name is such a blasphemy that it is comparable to the misuse of the name of God in the Old Testament. The utterance of this name in such a financial circle is so politically incorrect that it makes punishment by death almost is too kind for the transgressor. This horrible word is DERIVATIVES.
How many articles have you read in the Wall Street Journal or New York Times concerning the $72,000,000,000,000 of these items categorized by Buffett as "Sewage"? What talking head on financial TV stations has quoted the publicly available figures on total derivatives outstanding or any similar topic? The answer is ZERO. Can you image ZERO discussion in major media of the largest single item ever in world finance? Can you believe, ZERO discussion of the largest mountain of credit ever existing on this planet? Can you imagine, no significant discussion whatsoever in major media of the blatant market manipulation of gold to benefit the private interest of a group of dealers resulting in huge losses to the public?
So what is this Counterparty downgrade announced yesterday for major international investment banks? You got it. The forbidden word was not used. Yes, the downgrade of creditworthiness was referring to these international investment banker's obligations on DERIVATIVES. It certainly was not focusing on the banker's signature on the auto leases.
The same investment banks mentioned in the Downgrade as to Creditworthiness seems to be COUNTERPARTY on the majority of gold producer derivatives as well as the unnamed 89% of the $300,000,000,000 so-called Carry Trade derivative parties. In my opinion, that 89% so-called carry trade is nothing more than a bunch of Wise Guys, preferred clients of the international investment banks who got a rotten plum handed to them. These wise guys found (thanks to the gold dealer's cartel) a way to borrow the cheapest money ever lent to anyone, anywhere.
There is only one little problem. The "wise guys," as a result of this cheap money scheme, are short more gold than can be mined in the next twenty years, and more gold than is held in all the central banks on Earth. Central Banks will hear this downgrade of creditworthiness loud and clear. Watch the Gold Lease rate for a tip off on when this reaction in gold is going to turn into a slaughter of the gold bears and new highs in the gold price.
The Gold Lease rate, among other things, measures the supply and demand for gold leases. When the gold lease rate rises this time, it will be due to the central banks' reluctance to extend leasing and reluctance to renew already outstanding leases. The increase in the rate will be a product of reduced supply.
This is the KEY to the meltdown of the $300,000,000,000 in gold derivatives and may well be one of the reasons that the downgrade in credit worthiness was issued against the KINGS of the GOLD DERIVATIVES yesterday. WATCH THE ONE YEAR LEASE RATE to signal the demise of the investment bank parents of the "Mother of All Shorts," the $300,000,000,000 in gold derivatives that the gold dealer's cartel has been violently and publicly manipulating the gold market to protect.


misetich (08/16/02; 16:33:18MT - usagold.com msg#: 83135)
Junk bonds in distress surpass post-Sept. 11 peak
http://www.forbes.com/newswire/2002/08/16/rtr698338.html
Snip:

NEW YORK, Aug 16 (Reuters) - The percentage of junk bonds in "distress" has surged past the level immediately after the Sept. 11 attacks on the U.S. and is near an 11-year high, Merrill Lynch & Co. said on Friday.

Martin Fridson, Merrill Lynch's chief high-yield strategist, said in a report that the "distressed" percentage rose to 29.7 percent in August from 25.5 percent in July. The ratio is now just above the 29.6 percent level reached in September 2001 and not far from its recent 32.8 percent peak set in December 2000.

Junk, or high-yield, bonds carry lower credit ratings and higher yields because of their risks. Many analysts consider a bond "distressed" if it yields at least 10 percentage points more than U.S. Treasuries, which carry no credit risk.

Fridson said the jump in distressed debt is bad news for investors counting on a decline to put the brakes on what has been the worst year for high-yield bonds since Merrill Lynch started tracking them in 1986. He told Reuters this week that he saw no definitive evidence that investors are gaining appetite for the risky bonds.

"Investors must abandon any illusions that the rise in distress represents a mere statistical quirk related to fallen angels or some other such aberration," he said in a report. "Fallen angels" are companies such as WorldCom Inc.<WCOEQ.PK> whose bonds fall to junk status from investment-grade.

Fridson said the distress ratio often foreshadows changes in the high-yield bond default rate, which has fallen far more slowly this year than analysts expected.

"Investors will have to reconcile themselves to a continuation of the painfully slow pace of decline" in Moody's Investors Service's 12-month default rate, he said. The rate is now 10.3 percent and peaked at 10.7 percent in January. Moody's expects it to fall to 8.8 percent by year end.
**********
Misetich

Moody's expected the rate to fall in the first half of 2002 and it didn't - and it appears that the economy is slumping once again in the negative or barely in the positive (if government numbers can be trusted)

More pain ahead for bond holders. Who's the next Worldcom? Enron?
Lets rembember that most of the accounting shenanigans (hiding debt) of Enron are believed to be legally correct by investment bankers.

Got gold?


fang (08/16/02; 16:30:54MT - usagold.com msg#: 83134)
Moody's
It appears that they are the only ones reporting anything resembling the truth. Each time they downgrade a company it seems to get a fair amount of press and clout, which is beneficial to our cause, specifically the JPM 'concerns'. If I remember correctly, once it was rumoured they were going to dg Enron, there were some 'questionable' calls made to high gov officials to try and avoid the dg. My question is this: Are they the last bastion of truth or are they suceptible to the manipulation crowd's control too? If they can be 'touched', then why haven't they been brought in line already?

Operative (08/16/02; 16:27:18MT - usagold.com msg#: 83133)
@ waverider Re: War in Name
One of the greatest assests of this forum is formulating an environment producing thought. Before any action can be taken first a thought must appear. ANOTHER'S "Thoughts" have been the springboard for pausing, reflecting, and beginning to develop plans of action for most of us here. Part of this thought process has been attempting to see things for what they are. Money, not the name of, but what is it? We have learned to redefine value, wealth, security, in terms other
than what the word is associated with upon first glance. Is there anyone here who believes the Gold Eagle is worth $50.00? That is the "face" value is it not?

War is a word that has become outdated, perhaps overused. For most of my studies I have replaced war with objective.
Objectives usually remain steady. War, and the use of the word can conjur up differant meanings at differant times for each indiviual. Is America at war? Some say yes, others reply saying we have not legally declared such. We want to think of beginings and endings to wars. Even the "war with gold" we want there to be a beginning and at some point when gold has reached XXX value we want to say Gold is free at last. Objectives are easier for me to deal in. There is an obvious objective to Iraq. It probably began covertly some years back, had a flare up during Desert Storm, (at which point many thought the "war" was over) but I beg to say the first leg of the objective had been successfully reached. After the media's version of Desert Storm and ended, we sliced off no fly zones north and south in Iraq. We kept a small contingency to enforce/deny Saddam use of these areas for some purposes. Phase two of objective completed. It appears that soon another phase will begin and once again the media will throw the word war around, probably declare the war has started...and at some point write, the war has ended. I say, another part of the objective has been completed.

We have learned to view things differantly in regards to the gold issue. There are probably some other words/ideas/ that we should review and see things in a differant light and like gold, redefine our thoughts and language to reflect a greater understanding.

Thanks for the post yesterday you brought up something that I had not given thought to.(Told you I was dense at times)
Your mention of my use of God, Bible, etc. I have been thinking about that and what amount of wieght to give it. Thanks for pointing it out though. My first response was thinking that the minds allocated around this table are too big to get hung up on those terms. The bible tends to speak to the spiritual wanderer in all of us. It also happens to provide one of the best historical documents of mans adventures on this planet. And when one delves into its pages there is a good track record of predicting certain events yet to come. I have spent a good part of my life travelling this world and meeting its varied peoples. I have learned to appreciate varied taste in food, language, culture and "religion". I have studied far and middle east thoughts, read the Koran, and in more recent times studied some of the Hopi indians teachings. I have found all have some measure of truth or insight. I would hope I could use any of these terms without eliciting some sort of knee jerk reaction, in attempting to share my own thoughts of the many sides and complexities to the gold issue. Narrow minds here at the forum? I hope not. I take my posting here as as it is given by the host, a courtesy. I have reread the 11 Points as outlined on this site's pages and intend to do my best to adhere to all of them and to add to, not subtract from, not only the spirit of this group, but the flow thoughts.

Belgian (08/16/02; 16:25:05MT - usagold.com msg#: 83132)
Gold / US$ / euro / Oil
Aristotle # 83118 : What a fine syntax you made ! Bravo Sir ! If only more responsible individuals / institutions / fiat funds, could understand what is the essence. The US$ was able to create almost total inter-dependance and destroyed that healthy amount of necessary in-dependance.
A return to Gold's fundamentals and total recognition will make one *FREE* again.

Euroland will use its infamous experiences of two WWs as to promote a massive decline in global building of "hostility", counterproductive for balanced prosperity.
Euroland doesn't want a WWIII for whatever reason ! And Yes indeed, Waverider...war has already been installed and in a complete different manner. But if the globe's declining properity will be blamed on an increasing degree of hostility...camps will be divided more than ever before.
Not "against" a US$ hegemony, but "pro" stability and growth. It isn't an unfortunate co-incidence that Duisenberg's wife, provoked a row, about having expressed, explicitely, a pro-palestinian stance. Right or wrong is not the discussion here, but the fact that it is a semi-official act, does illustrate the fundamental difference in approaching "the" problem(s).

Sure, that young euro, hasn't yet a US$ track record. And it is not the euro-currency, as such, but rather the cargo it is covering, that is important to all of us. And as Ari pointed so well...it is not always a pure economical reason why a certain currency is preferred above another. Both currencies ($/€) have a very different philosophy and socio/economic orientation. And it must be seen against this background if the euro will make a chance to replace the dollar for oil. We simply can all live in peace if we want to and isolate, all together, those who remain evil for no reason !

Let the whole world trade with the whole Middle East, for an appropiate POO ! A POO that can be obtained for the same effort (regardless of currency) everywhere ! Euroland's expansion is an an equal euro-currency basis !!! Lady Waverider will never see a latin american common (dollar) currency !

Another war will expose the dollar in its reserve function, again, more and more critically. If half the globe must be bailed out again and again...something will snap. Again and again the IMF/Worldbank and other pro dollar-block official institutions will be criticized, repetitively. The euro will attrack more and more attention as a possible, suitable, alternative. And euro for oil will be a major step in this proces and make it irreversable.

Concentrating oneself on the military might associated with the dollar, might lead to un-flexibility and more hostility.
That's why the UK has so much difficulties in chosing camp.
A/FOA are surely watching, together with us, how things are working out. In the mean time, a direct assault of Gold, must never be excluded.

Apologize for not being able to put the correct nuances into the above text, due to language problems. Mothertongue is Dutch. Am confident that Ari will finetune and correct these mistakes. Thanks.

misetich (08/16/02; 16:22:41MT - usagold.com msg#: 83131)
US cities' financial picture darkens amid recession
http://www.forbes.com/newswire/2002/08/16/rtr698391.html
Snip:

WASHINGTON, Aug 16 (Reuters) - Most U.S. cities were worse off financially in their 2002 fiscal year than in the previous period, the first time in a decade they have fared so poorly, the National League of Cities reported on Friday.

The group, which represents 1,800 cities and towns, said that municipal tax revenue growth was expected to sink to 1.2 percent by the end of 2002 compared to six percent in 2001.

"Two-thirds of city officials believe that their city will be less able to address financial needs in fiscal year 2003," the report, which surveyed 308 municipalities, added. Fiscal 2002 ends for most cities between June 30 and September 30.

At the same time, healthcare costs and new security and infrastructure needs in the wake of the Sept. 11 attacks would push spending growth to 5.6 percent compared to just over 5 percent in 2001.

More than half of city finance chiefs who responded to the survey said that their metropolis was less able to meet its financial needs than it was the year before, the report said.

Cities have been hit by the same national economic recession that has hurt state and other local government budgets.

But the report said most cities had ended the fiscal year with good-sized reserves as a buffer for expected bad times ahead, and noted that most cities relied heavily on property tax revenues which were less volatile than other kinds.
**************
Misetich

Real estate bubble has assisted cities in raising revenues -through higher property taxes -however there's no doubt spending cuts have been made- thus prolonging the nation's economic slump
Also their investment portfolio has taken a huge hit.

Got gold?





mikal (08/16/02; 15:54:21MT - usagold.com msg#: 83130)
Gold lease rates
Major up moves today all across the board. Jim Sinclair believes an up move in the 1 yr. rate will signal real problems for the gold short-positioned major investment banks.

Operative (08/16/02; 14:55:45MT - usagold.com msg#: 83129)
@ Belgian
I have long agreed with not only your theories on $/oil/Gold but also with the writings of Another, Foa, and host of others. I agree in that, to the best of my ability to wrap my mind around this complex international exchange system, there are some here who appear to have a firm grasp on where it is headed and some of the implications thereof.

My original post concerning my own observation of current events now transpiring in the Middle East was not meant to be argumentative, nor was I questioning your theories. If inadvertently the Bush campaign forging into the heart of the oil fields has created a new fluid and dynamic change in your flow charts that is something only you can address since those issues are far beyond this hobbitt. Friends?
I hope so, I admire most of your writings even though oft I have to step on the stool in order to reach new levels of understanding.

Now, I am going to take you to task on part of your last post because of some dear friends of mine. You write:
"Euroland (and UK) never considered the option of wiping out, those directly or indirectly responsible for the (appaling) violence. It is the completely different approach on terror between Euroland and the US, that has something to do with Gold."

I happened to be in that neck of the woods (UK) and the middle east during much of the 1980's. I had the distinct privilege to work with some of the best counter-terrorism guys in the business. I can tell you first hand they would NOT agree with your statement, "never considered the option..." and indeed where activating some rather forcefull options of thier own. I am speaking of some remarkable men who only drank large copious amounts of heavy dark ale that members of the S.A.S forces hold so dear. They also sadly bemoan, being the highly motivated group that such training inspires, your other statement: "It is a completely different approach on terror between Euroland and the US, that has something to do with Gold."

The shortened version of thier story goes a little like this. Terrorism was alive and well in Europe with some of the more radical movements taking upon themselves to "terrorize". The problem for Europe was a bit more complex than what we have so far experienced in the US. In that, for decades the terrorists had lived and operated among a rather large muslim population that Europe had so openly extended thier arms to. This was problem one. Two was that Europe did not have the large pond seperating them from nearby Arabic countries that the US enjoys. According to my friends, who had every resource at thier hand and a "working" knowledge the UK decided that the best plan of action was to strike an agreement with the terrorist leadership. It went something like this. In accepting compensation (some of which you allude to in the form of gold?) you will discourage your radical brethern from blowing up things/people in our country. You will be allowed to have offices here, go about your business here, but will not cause havoc. Now of course the men sitting around my living room in Lebanon were not very happy with this "arrangement" and felt it would at best be a short term solution. It also left them wondering where else they might apply thier job skills? The years have shown it to have been a managable solution and at the time, was the only viable course of action that would leave the UK mostly unscathed. And it offered an advantage of being able to better track terrorist movements, agents, and gather intel on thier operations. Your statement implied that Europe had somehow found a magic wand to dismiss the terrorism threat. It boiled down to a simple "business deal". I doubt that it was even thought up by the UK, as other countries such as Italy and France and previously reached similar accords that had achieved promising results.
Yet even to this day it is no wonder why UK offers a token of of resistance forces to combat a growing problem. Is it because they are afraid of upsetting the deal made with the business partner? They appear to continually ride the fence. Publicly decree that the US should back off (appease the terrorist)
and send a token force to help the US fight the war.

You said it better than I, "Will see how it works out?"

The thin line of gold is weaved throughout all of man's history. Gold is niether good nor bad. It is not worthy of worship nor should it be thought of as a forgotten barbaric metal. It is what it is, Gold. And Gold has always and forever more have value. This Sir Belgian is something we both see eye to eye on.




sector (08/16/02; 14:48:28MT - usagold.com msg#: 83128)
Tokyo to put over 100 bil. yen in Citibank
It's Only about a $USD Billion but still...
Yomiuri Shimbun August 15, 2002

The Tokyo metropolitan government has decided to deposit more than 100 billion yen in public funds in Citibank, a U.S. bank, this fiscal year, to diversify risks, government sources said Saturday.

The metropolitan government, which currently deposits public funds only in major domestic banks, will be the first local government to keep its public funds in a foreign bank, the sources said.

It also plans to deposit for the first time several billion yen in Jonan Shinkin Bank, a major credit association, the sources said.

To diversify risks, 50 percent of the public funds--mostly kept in deposits until now--will be invested in bonds and debentures, the sources said.

If Citibank and Jonan Shinkin Bank are deemed safer institutions, the government will deposit public funds in institutions that it has not dealt with before, including foreign and shinkin banks, as they will be seen as a highly safe way to diversify risks, the sources said.

After the lifting in April of the freeze on the so-called payoff system in which account holders are guaranteed a maximum refund of 10 million yen in deposits initially accepted by a bank and interest on the principal if the bank fails, local governments' time deposits are also guaranteed a refund of only up to 10 million yen and interest.

The metropolitan government transferred most of about 1.28 trillion yen in time deposits in the 15 major banks to ordinary accounts. Ordinary accounts will also be subject to the payoff system in the next fiscal year.
+++++++++++++++++++++++++++++++++++++
One reason for a dollar that seems to be levitated these days. With more yen on deposit, lots of FOREX games can be played by the Master Rigger Rubin.

JCTex (08/16/02; 14:31:22MT - usagold.com msg#: 83127)
Old Yeller (08/16/02; 13:04:41MT - usagold.com msg#: 83124)
Me, too.

Black Blade (08/16/02; 14:15:01MT - usagold.com msg#: 83126)
Credit Suisse execs fined over IPO abuses
http://www.usatoday.com/money/industries/brokerage/2002-08-15-credit-suisse-execs-fined_x.htm

Snippit:

NEW YORK — Securities regulators fined and suspended two senior executives at Credit Suisse First Boston for offering shares in hot Internet companies to large investors in exchange for millions of dollars of kickbacks in the form of excessive commissions. The National Association of Securities Dealers (NASD) also fined and suspended four former CSFB brokers for their part in the trading abuses.


Black Blade: It reminds me of that Schwab commercial: "let's put some lipstick on this pig".

Off to the gym!!!


Black Blade (08/16/02; 14:13:52MT - usagold.com msg#: 83125)
Wall Street bank ratings may be cut
http://www.chron.com/cs/CDA/story.hts/business/1536596

Snippit:

NEW YORK -- Standard & Poor's said Thursday it may cut credit ratings of several Wall Street banking giants, including J.P. Morgan Chase & Co., Merrill Lynch & Co. and Morgan Stanley, because their investment banking revenue is falling.

Black Blade: Interesting



Old Yeller (08/16/02; 13:04:41MT - usagold.com msg#: 83124)
dag2g,oil for euros

All I can say is,I sure miss the postings of FOA and Oro
on this matter of critical importance.

In the meantime,I just read the archives.There is a wealth of prescient information in there that is so relevant today,
given the moves on the big chessboard we're seeing.

Sierra Madre (08/16/02; 11:51:35MT - usagold.com msg#: 83123)
A few facts on Cisco (CSCO)
I gleaned a few facts about CISCO from http://money.cnn.com and from the www.ino.com site.
It's selling at 57 times earnings.
Earnings are 25 cents per share.
Outstanding shares are 7.3 billion approx.
Its price when I checked a couple of days ago: $14.48 US
Highest price reached, in the Spring of 2000: $80.00 US
The market cap at that time (supposing the same 7.3 billion shares, which might not be the case): $584 billion
Present market cap: $106 billion.
Notwithstanding the loss in market cap of $478 billion (!) it STILL sells for 57 times earnings.
In "normal" times, a price of 15 times earnings has prevailed, which would give a "normal" price of $3.75 US (15 x .25cts).
An attractive "buy" price would be at a P/E of 8, which would give: $2.00

That is, supposing earnings of .25 cents per share hold up. Rather doubtful. A 50% fall in earnings would mean a "normal" price of $1.90, and a "buy" price of...$1.00

If cost of stock options is taken into account, which is not the case presently, I understand, there might be NO earnings. So perhaps even $1.00 is expensive.

So much for CISCO. Say a prayer for the chumps holding CISCO. (And buy GOLD!)

Sierra

sector (08/16/02; 09:27:15MT - usagold.com msg#: 83122)
CitiGroup's Grubman Gets $32 Million Severance
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVyztBZrQ2l0aWdy

Top Financial News

08/16 04:11
Citigroup Faces Probes Following Grubman's Departure (Update1)
By Rob Urban
New York, Aug. 16 (Bloomberg) -- Jack Grubman, the star telecommunications analyst at Citigroup Inc., resigned under pressure amid allegations he misled investors by issuing favorable stock ratings to win investment banking work. The legal challenges against his former employer his actions instigated remain.

Citigroup faces criminal probes, a congressional subpoena, regulatory investigations and more than two dozen lawsuits over allegations that Grubman violated rules by functioning as an investment banker while he was employed as an analyst at the firm's Salomon Smith Barney unit.

Grubman's resignation ``isn't going to change any liability that Salomon may have,'' said John Coffee, a securities law professor at Columbia University. ``No organization can avoid liability for conduct of their agents when they were in office by later seeing them resign.''

Investors allege Grubman published flattering research on companies such as WorldCom Inc. to win business for Salomon Smith Barney arranging stock sales and advising on mergers. Lawmakers also want to determine if he sought to curry favor with executives by allocating them shares in initial public offerings.

Citigroup, the largest financial services firm, said Thursday Grubman resigned by mutual agreement. He was given a $32.2 million severance package, including forgiveness of a $19 million loan he received in 1998, plus interest, and $12 million in restricted stock and options he received as previous compensation, people familiar with the matter said.
+++++++++++++++++++++++++++++++++++++
Grubman gets a $32 Million dollar severance. That says a great deal about the sweet relationship between Grubman and the senior management at CitiGroup [Robert Rubin].

Maybe Grubman knows something that must be kept hidden so he gets bought off?


da2g (08/16/02; 09:22:20MT - usagold.com msg#: 83121)
Oil for Dollars, Iraq, and Saudi Arabia
I find the current U.S. posturing towards Iraq to be interesting in light of the rumblings of a change in Saudi leadership, and an implied subsequent change in Saudi and U.S. relations. I wonder how much of the Iraqi initiative is catalyzed by the need to keep the flow of Saudi oil denominated in dollars? Wouldn't it be quite convenient for the U.S. to be in control of Iraqi oil fields, with a large military force in the region, should the current House of Saud crumble, or at least have its allegiances change?

I do recall FOA touching on the privilege of supplying defense to Saudi Arabia, in exchange for having one's currency as the denomination of oil exchange. If I recall correctly, he more or less implied that the EU would certainly not mind supplying Saudi Arabia with defense expertise should oil be traded in Euros. I do not recall, however, the line of reasoning to encompass defending Saudi Arabia against the threat from the nation whose currency oil is currently traded in, namely, the U.S.. I would be most curious to receive any insight in this matter (FOA- hint, hint!).

Oh, what a glorious chess game that must be going on behind the scenes! To only be privy to each move in person. I don't think that the dollar is going down without a whimper.


sector (08/16/02; 09:17:27MT - usagold.com msg#: 83120)
Tyco, Others Face $60 Bln in Payments on Convertibles (Update1)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVzIgxVPVHljbywg
Top Financial News
08/16 05:40

By John Glover

London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year.

That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can only be converted into stock at or above $115.05. The shares closed yesterday at $13.26.

``For any company in this situation the fact that markets are going down is not good news,'' said Pierre Sellier, treasurer of Lagardere SCA, France's second-largest media company, which may have to repay 768 million euros ($748 million) of convertible bonds in December 2003.
+++++++++++++++++++++++++++++++++++++++
My, my, my! ANOTHER $60Billion. I wonder who will eventually eat these convertable bond payments? Could their bankers be left holding the bags?

Can you say ANOTHER S&P downgrade of the already strapped banks? Jeeze! JPM and C face $36 Billion in Enron litigation awards. Who knows how high the claims could grow?


USAGOLD / Centennial Precious Metals, Inc. (08/16/02; 08:44:07MT - usagold.com msg#: 83119)
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