Home Gold Primer Q&A Daily Market Report Gold IRA Gold Coin Prices Charts Stats Essays Site Overview High Net Worth How to Buy Gold Live Gold Price Breaking Gold News Mobile Gold Price Gold Coin Images About Us-Contact Search Video Round Tables

Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

FORUM ARCHIVES

Select date of the archive you wish to view Month 1 2 3 4 5 6 7 8 9 10 11 12 Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Archives date back to September 22, 1998

WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 2/17/2005
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Waverider (2/17/05; 21:49:33MT - usagold.com msg#: 129440)
Sir MK
"How do I love thee
let me count the waves. . . ."

ROTFL!! You do flatter me!! No...you think I made a gracious withdrawal so that others may have a chance at winning?? Not on your life! My gracious withdrawal was purely self-motivated....haven't lived up to my reputation the past few contests and there were others bracketing me and losing....oh woe was me at letting a fellow Goldmeister down! :) Yes...life is safest as an outlier at times. In all seriousness, thanks kindly for the acknowledgement. AND...congratulations to all the winners! Cheers!

USAGOLD Daily Market Report (2/17/05; 19:22:38MT - usagold.com msg#: 129439)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has been updated.

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

Thursday Market Excerpts

Gold futures moved clear of the $428-an-ounce mark Thursday, as traders talking up bullish price targets for the precious metal. Metals traders picked through a second day of testimony by Federal Reserve chief Alan Greenspan on Capitol Hill.

"Gold has resumed its major uptrend because it realizes talk is cheap -- even if it's out of the mouth of Alan Greenspan," said market analyst Peter Grandich, noting "enormous U.S. deficits and debt loads."

Grandich said it's "realistic" to think that gold can climb to $500 an ounce and higher this year.

COMEX April gold futures ended up $1.70 to $428.60. From a technical standpoint, analyst Dale Doelling believes gold is "overbought" and due for a pullback, potentially back to its January lows around $420.

"This would allow gold to work off some of the froth here and set the market up for a big rally in March and April," said Doelling, chief market technician for Trends In Commodities.

---(see url for 24-hr newswire, market prices)----

TownCrier (2/17/05; 19:18:21MT - usagold.com msg#: 129438)
Toolie, on 'tireless efforts'
It's anything but 'tireless', I assure you. Right now I feel fully exhausted and empty in the belly -- in need of dinner and sleep. I could probably pack enough gear into the sizable bags under my eyes to survive a month in the wilderness.

Hmmm... doesn't sound like such a bad idea...
:-)

Anyway, the occassional thanks, like yours, and the fellowship in worthwhile conversation and thought make the hours and efforts all seem a joy.

R.

Toolie (2/17/05; 18:51:23MT - usagold.com msg#: 129437)
oops
No, I have *NOT* seen info that confirms a sale.

Toolie (2/17/05; 18:48:56MT - usagold.com msg#: 129436)
@ Townie
No, I have seen info that confirms a sale. I did look last week when I first saw the article.
You may well have a valid point about the "marked" price of Indian gold reserves accounting for the over 4% drop in their statement. What I hadn't considered is that their marked price may trail the market by a month or so.
It struck me as an unusually large figure for a weekly revaluation, after what had been a week of flat POG.

Thanks for your tireless efforts.


TownCrier (2/17/05; 18:25:28MT - usagold.com msg#: 129435)
'Ownership' key Social Security goal - Greenspan
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh58933_2005-02-17_22-55-02_n1717864_newsml
WASHINGTON, Feb 17 (Reuters) - U.S. Federal Reserve Chairman Alan Greenspan embraced President George W. Bush's vision of an "ownership society" on Thursday, saying private accounts could foster feelings of wealth among poor Americans.

While he did not specifically endorse Bush's plan and admitted private accounts, in and of themselves, would not improve Social Security's shaky finances, he said such accounts could importantly create "a sense of ownership."

"These accounts, properly constructed and managed, will create ... a sense of increased wealth on the part of middle and lower-income classes of this society, who have had to struggle with very little capital," Greenspan told the House of Representatives Financial Services Committee.

"While they do have a claim against the Social Security system ... as best I can judge, they don't feel it is personal wealth the way they would with personal accounts," he said as he took questions from the panel.

"Whatever type of structure we have for retirement, it has to be fully funded," he said. "One of the reasons that I think we have to move towards a private individual account system is they, by their nature, tend to be significantly fully funded."

"Individuals know what they need for the future and they tend to put monies away adequately," Greenspan added.

But Greenspan said the issue of private accounts went "beyond the economics" of simply fixing a creaky system to the larger issue of preserving a stable democracy.

"It's crucial to our stability that people all have a stake in this system," he said. "I don't perceive that Social Security is conceived that way and I think it is very important to people to have a sense of ownership."

^------(from url)------^

Taking care with words, for the headline to have any logical merit it would be best to interpret "Social Security" in a more general sense, like a secure civilization or "stable democracy", rather than as the formal government-sponsored program of the same name.

As in, "(Gold) Ownership is a Key to Preserving Stable Society". By contrast, the default of etherial "un-ownable" financial contracts as happens in the time of crisis only tends to deepen society's sense of uncertainty and unrest. When a man sees that his paper savings has been wiped out, he is more inclined to be moved to drastic measures to procure and provide for the physical needs of himself and his family.

What Greenspan says about ownership is good, it's just that he didn't take it far enough to delve into the real essence of OWNERSHIP.

Ownership is not a paper claim, it is tangible property in hand.

Ignore the shortcomings of the presentation and follow the spirit of the message. Choose physical gold for the road ahead.

R.

melda laure (2/17/05; 18:12:56MT - usagold.com msg#: 129434)
Balance, vs stability.
Always it is a question of first principles. A "centered" pendulum is balanced whther it is hanging mass down, or straight up. However, the one with the mass on the bottom is stable, and the one with the mass on top is NOT.

What critical 21'st century item does France produce? What unique (or at least RARE) technology does it posess?

And let's not forget the mirror questions: what critical 21'st century item does France lack? Not for naught do they have so much nuclear generated power as they have no domestic oil.

Henry, it is (in my opinion) a great fault of capitalism that those who, having won by honest means, are then tempted to hold those commanding heights by dishonest means - and so the cycle of tyranny is re-born; though perhaps this is a fault of very imperfect actors.

Boilermaker! Well said: "I agree with the big lines in it. The details don't matter" To quote the little giant: "to get rich is glorious". Between Oil and Gold probably gold has the staying power. The removal of cheap energy will change the carrying capacity of the planet. That 1 or 2 barrels of oil per Chinaman/yr may not be much, but it is the difference between 2004 A.D. and 2004 B.C.

Since all the above ground silver is gone, it seems that silver IS a commodity and has no high Stocks/Flows ratio like gold; this is the only beliveable reason I have found why silver has no near term future as money (and that may change!). Gold will be key, Silver will merely be volatile; though it may be a critical resource. In that sense, for China, the US and the dollars we vomit their way, are expendable. Those imbalances will not be corrected, rather trade will be completely cut off.

Henri, your dimly distopic vision may come to pass. My one true nightmare is that those "free engergy" technologies turn out to be reality: men have not managed oil and uranium too well. Belgian, why do I get the distinct impression that you are saying the Japanese have saved nothing at all? Buckminster Fuller comes to mind: "you are RICH when your WEALTH base can provide more than 100% of your needs."

Credit revulsion means my fruit trees will only be for sale for gold.

Gandalf the White (2/17/05; 17:38:21MT - usagold.com msg#: 129433)
THANKS Sir GAB !
http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTBDANRBO[PA][D][F1!3!!!2!20]&pref=G
Sooooo busy that I missed that new LITTLE GREEN "X" today.
POG is HEADED UP !
<;-)

Great Albino Bat (2/17/05; 17:22:44MT - usagold.com msg#: 129432)
Encouraging...

Another "X" at $428 on the Stockcharts P&F chart today.

Boilermaker (2/17/05; 16:43:53MT - usagold.com msg#: 129431)
Barrick's 4th Quarter Announced Today
http://www.barrick.com/index.aspx?usesid=-1&sid=1404&itemid=753
Barrick's 4th Quarter results that look OK on the surface are loaded with one time credits and charges that all but eliminate net operating earnings. But what I was looking for was their change in hedge position. Here's what they had to say about that:

"During the quarter, Barrick reduced its fixed-price gold forward sales position by about 200,000 ounces, bringing the reduction for the year to 2 million ounces, in excess of the targeted 1.5 million ounces for 2004.

Barrick has also allocated 6.5 million ounces of its existing gold sales contracts to Pascua-Lama during the quarter in support of anticipated financing for the project. The Pascua-Lama gold sales position represents just over 35% of currently identified gold reserves at the project and does not impact any of the 643 million ounces of silver contained within the gold reserves. Barrick expects the allocation of these contracts will preclude any requirement by lenders for any incremental gold sales contracts.

At quarter end, the Company''s Corporate gold sales contract position, which excludes Pascua-Lama contracts, was 7.0 million ounces, representing just over one year of future expected gold production and approximately 10% of the Company''s reported non-Pascua-Lama proven and probable gold reserves."

comment;
Clearly Barrick slowed down their hedge buybacks in the 4th quarter. The "allocation" of about half their remaining hedges to the Pascua-Lama project "in support of anticipated financing for the project" suggests one or more of their counter parties has forced the issue of where their gold is coming from. Reading further between the lines it may occur to cynics like me that these counter parties want their golden promises to come from a source outside the US and they have some "enforcement" provisions that Barrick does not want to trigger.
I'm sure there's other possibilities and I'd like to hear what ya'll thinkin.


Black Blade (2/17/05; 16:02:55MT - usagold.com msg#: 129430)
Boomers to Delay Retirement
http://www.energypulse.net/centers/article/article_display.cfm?a_id=937

Snippit:

The traditional notion of retirement -- a period of time to enjoy rest, relaxation, hobbies and favorite activities during the Golden Years -- is rapidly becoming a mirage for most baby boomers. The bull market meltdown, stratospheric deficit levels, rising life expectancy, surging health care costs, lack of retirement savings and a brewing labor market shortage, are forming a "perfect storm" that will force or entice boomers to work during their golden years.

Black Blade: And speaking of "Golden Years"... OK, so ya saw that one coming (grin). Get a start on secure savings for the future with the precious metals. You can see a decent selection in the USAGOLD Castle Treasury and talk to one of the Castle Guards about how to go about it.


TownCrier (2/17/05; 13:11:27MT - usagold.com msg#: 129428)
HEADLINE: Dollar slips as Greenspan says nothing new
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh54714_2005-02-17_18-54-03_n17495336_newsml
NEW YORK, Feb 17 (Reuters) - Fed chairman Alan Greenspan, in a second day of congressional testimony, reiterated that U.S. interest rates remain "fairly low," in a signal that they will keep rising.

"I think that the market has seen what it wants to see (in Greenspan's testimony), and the market's bias is still pessimistic," said Jeremy Friesen, senior currency strategist at RBC Capital Markets...

^----(from url)----^

R.

MK (2/17/05; 12:19:22MT - usagold.com msg#: 129427)
Gandalfa: Contest comment

Though I do not want to diminish the price guessing prowess of Sir Yellow Jacket, Black Blade and the Hoople (as their efforts were noble indeed), I think it needs to be pointed out that the only reason they won is because Lady Waverider let them (posting a guess of $7000 to relieve Sir Invisible Hand of loneliness at the top of the guessing grid). <smile & wink> For those of you who are not aware, Lady Waverider has won metal in three or four of our contests. One of them surely would have finished fourth, but for the gracious withdrawal of the Lady.

"How do I love thee
let me count the waves. . . .



Belgian (2/17/05; 12:16:08MT - usagold.com msg#: 129426)
Greenspan in a nutshell....
" The Owner Society " : Borrow to save !?

Gandalf the White (2/17/05; 12:07:23MT - usagold.com msg#: 129425)
WOWSERS ! Thanks Sir GE !!!
ge (2/17/05; 11:45:08MT - usagold.com msg#: 129423)
R Powell
http://stockcharts.com/charts/YieldCurve.html
Here is a nice tool - dynamic yield curve.
===
Throw that into "ANIMATE" and stand back and enjoy the "SHOW" !
<;-)

Gandalf the White (2/17/05; 12:01:27MT - usagold.com msg#: 129424)
The SPOT gold price chart of today has caught the YOYO effect also !
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1
CONGRATULATIONS to Sir Yellow Jacket for WINNING the GOLD and Sirs Black Blade and The Hoople for SQUEEZING Sir Yellow Jacket and winning the SILVER Eagles in the POG Contest !

(Really, Sir Yellow Jacket jumped in between them and STOLE the YELLOW from them, but I would NEVER even think to say anything about THAT !)

GREAT POG CONTEST !

(and note to Sir YGM --- SIR MK times these CONTESTS to be at the START of an UPTREND in the POG! HINT HINT !)

Now, I must go back to seeing about "getting" Sir Smeagol some more of his favorite FOOD !
LATER all,
<;-)


ge (2/17/05; 11:45:08MT - usagold.com msg#: 129423)
R Powell
http://stockcharts.com/charts/YieldCurve.html
Here is a nice tool - dynamic yield curve.

About the yield curve conundrum, some say that Greenspan may be buying the longer term bonds and thus causing the inversion. If true, the bond sellers do not rush into commodities, other currencies and gold.

Another possibility is that, a stockmarket decline is now being expected, after which a series of rate cuts would be done to "revive" the economy; and those positioned in long bonds would benefit. If true, the players are somewhat assured that the dollar would remain stable during this "play".

Buying physical gold is the easiest way to go thru this mess. As O'Higgins remarked some time ago, "Not too many things you can buy today half the price of 24 years ago".

Gandalf the White (2/17/05; 11:37:15MT - usagold.com msg#: 129422)
Sir GAB <;-)
What the GAB thinks the CHINESE are thinking:
===
YES, AND that is why they CHINESE have a BIG SMILE and nothing to say !
<;-)

Great Albino Bat (2/17/05; 11:19:32MT - usagold.com msg#: 129421)
Some more intuitions...on China

What the GAB thinks the CHINESE are thinking:

"Great USA, you give us your opinion that we should revalue our Yuan. Thank you so much for the advice!

"You devised the world monetary system at Bretton Woods; you built it to suit you, not to suit the rest of the world; not to suit us, the very poor Chinese.

"Now your precious wealth-gathering system is working against you. You have become lazy; we are used to working for a few dimes a day.

"Now you have second thoughts about the convenience of your own system, which you imposed on the world.

"Now, you want us, the Chinese, to change the value of our money, to suit your desires.

"Please understand, USA: China is not going to change to suit you, who designed the system that now works against you.

"You built the monetary system, so YOU are the one that is going to change, not us."


USAGOLD / Centennial Precious Metals, Inc. (2/17/05; 11:02:09MT - usagold.com msg#: 129420)
Experience first-hand the unifying power, security, and staying-power of gold
http://www.usagold.com/gold/special/grp.html





Gandalf the White (2/17/05; 10:56:54MT - usagold.com msg#: 129419)
Poor ESF Boyz are not creating the GREENSPAN effect today either !
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
Not as easy as it used to be !
Things are CHANGING !
<;-)

Great Albino Bat (2/17/05; 10:48:02MT - usagold.com msg#: 129418)
Druid: It's called "CHUTZPAH".

"Greenspan, with a straight face, tried to suggest that central banks have done as comparable a job as the gold standard in administering monetary policy over the years."

I.e., Greenspan is shameless.

Let us remember, however, that people always get the government they deserve.





Gandalf the White (2/17/05; 10:43:52MT - usagold.com msg#: 129417)
The GOLD P&F Chart is now starting to "LOOK GOOD" <;-)
http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTBDANRBO[PA][D][F1!3!!!2!20]&pref=G
On the WAY UP now !
<;-)

Druid (2/17/05; 10:09:44MT - usagold.com msg#: 129416)
@BB

Druid: Them !#$% cut away right at the moment that Congressmen Paul was attempting to chip away at Greenspan's credibility by quoting a part of Greenspan's own words in his famous Essay on Gold and Economic Freedom. It was at this point that CNBC cut away to Rocky and Bullwinkle. Greenspan, with a straight face, tried to suggest that central banks have done as comparable a job as the gold standard in administering monetary policy over the years.

goldquest (2/17/05; 10:06:17MT - usagold.com msg#: 129415)
P.S.
Congrats to Black Blade and the other contest winners!
Thanks to MK and Gandy for another fun contest. goldquest

goldquest (2/17/05; 09:55:23MT - usagold.com msg#: 129414)
BB: Greenspan Cut-away
I waited patiently for Ron Paul's questioning only to get totally irritated at CNBC ( CutNowBeCute) for their interruption!

Black Blade (2/17/05; 09:35:50MT - usagold.com msg#: 129413)
Greenspan Testimony Cut-Away

I am watching Alan Greenspan give his semi-annual Humphrey-Hawkins testimony to the House today. Of course it is rather curious that it is not on C-Span but on CNBC. When Rep. Ron Paul gets his chance to ask questions he begins talking about the twin deficits, inflation and as soon as he begins to mention the "Gold Standard" - CNBC cuts away for some meaningless drivel only to return when time is up for Rep. Paul and the other monkeys get to chatter away. It looked rather timed. "Interesting"

- Black Blade


Henri (2/17/05; 09:03:09MT - usagold.com msg#: 129412)
MK
I think that dangerous is an understatement. Perilous may more aptly describe the circumstance in the Asian Pacific.

I do not understand (nor does anyone with access only to the media hype) the full situation. It is my hope that some people somewhere do and that they are essentially sane individuals who do not put the opportunity for profit or momentary political advantage ahead of their concern for innocent lives.

But then again they human. Do these individuals actually make the decisions or do they answer to others in the orchestration of events. As a casual observer I think I can make the bold statement that what we are observing here is a lack of orchestration. This is a large change from the 60's seventies and eighties.

I do not know which is the foulest of alternatives, an orchestrated peace that suppresses the injustice of the enforced peace or an evolving and unconstrained venting of hostilities and struggle for resources in the open, but an uncertain and frightened world in possession of WMDs is by far an undesirable circumstance.

So far I see no overt signs of trouble like Kruschev banging his shoe, and NK (North Korea not Nikita) is saying they were forced to develop WMD's in self defense begs the question against what threat and if so why did you feel compelled to sell the technology to others (or did they?) Now Japan's case is actually compelling that they need to be allowed to militarize against this credible threat. This is what used to be referred to as nuclear proliferation and escalation of international tension.

I personally prefer it out in the open rather than supressed and concealed...a far more dangerous circumstance. So how does the world move forward to a circumstance of global peace? I submit that it cannot be done while its people are focused on who has what and how they got it and what can be done to extract vengence or to balance the scales of justice religeous or otherwise.

I think a world in balance is not a suitable model of peace to strive for where sustainable growth is promised to all. This model presumes that the temptation to tip the scale is non-existent. The closer we come to a balance, the smaller the scale of events that can tip the world out of balance.

My intuition tells me that there will not be true peace until such a time as territorial boundaries are again defined by hunting rights and agrarian pursuits with peace loving chieftans in charge and the scourge of war lords are limited by their inability to reach very far. Their only weaponry stone age vintage and not enough people on the planet for it to make a difference.

That said, the only viable alternative is currently enforced ceasefire and for those troublesome elements, disarmament. There also must be an atmosphere of justice or the whole model becomes a mockery. This begs the question enforced by whom?

Superior firepower has always been the answer here. What happens when the ideology of the planet shifts away from political organizations in possession of this element of superior firepower? Voluntary disarmament is called for and in fact is being executed in a reasonably controlled way. The world is actually following this path and must now deal with the margins of error introduced by such a course of action...subversion of WMD materials is the most visible threat at this point.

Now, how is the world going to accomodate the most recent release of rampant capitalism (China). They are meddling in some areas of resource acquisition that is making the US administration nervous. The handing over of the Panama canal to Chinese interests must have forseen a move to usurp the petroleum resources of the Gulf of Mexico by a purely capitalistic approch. It probably did not forsee a simultaneous move on the Canadian oil sands.

In the case of the Panama canal, how could we possibly blockade our own business interest. The likelihood that if the US had retained the canal and then placed a surcharge/tariff on passage of petroleum products moving through it would be successful in stemming the flow of oil to China or the Asian Pacific in general is ludicrous since they would pay us with our own worthless dollars.

Hmmm...did we give up the canal as part of a contingency plan being executed to counterbalance the play of the china card by Nixon? Would such a plan even be revelant in todays world?

I am inclined to believe that none of this is orchestrated and that China has simply out capitalized us using abundant and cheap labor at home and taken the proceeds to corral the resources it will need to satisfy the growing hunger for material wealth within its borders. Such a hunger cannot be constrained without risking civil unrest. Considering that China was "civilized" well before Europe, I am hoping that they are actually reasonable people to deal with.

What would happen if the world decided to use the chinese currency as the global reserve currency? For the US, it turned us into a service oriented economy that produces little on its own. Those that do produce manufactured goods here have been internationalized (bought by foreign interests with our own dollars...read this as subsidized by the US taxpayer).

Is this the way to tame the tiger? I am beginning to think that we are the ones who have been tamed. Does this make me angry? No. I look at it as just yet another event in the continuing struggle for global survival.



MK (2/17/05; 07:46:54MT - usagold.com msg#: 129410)
Belgian, Boilermaker
Interesting that France feels comfortable arming China and the talk in Japan is of remilitarization (Koizumi has mentioned reworking the constitution to eliminate the non-militarization clauses). So Europe arms China and the U.S. supports rearming Japan. Nothing like an arms race to boost stagnant economies -- European, Japanese, Chinese and American. Few people talk about the struggle for dominance in the Pacific, but it is a real thing and between old adversaries that have not forgotten the past. It will be difficult for Japan to stand idly by when North Korea has the bomb.

We are right at this moment witnessing some extraordinary changes in the world balance of power and power alignments. I saw a story last night on CNN about Syria and Iran making a pact. This will force Egypt and others to reconsider their positions as well. If destabilization of this sort suits someone, I don't know who it is. And it goes from there. . .

Things are considerably more dangerous now than they were 30 days ago and I think you will begin to see the results of this in the financial markets - including gold - as the potential realities sink in. Polarization is a word I think we are going to see start popping up in the debate. It reminds me of the years before World War I when a network of alliances and pacts pulled much of the world into the gravity of war. (And don't forget some modern scholars see World Wars I and II as essentially the same war - the war that defined the 20th century.)

Boilermaker (2/17/05; 07:05:30MT - usagold.com msg#: 129409)
Belgian
Thanks for the feedback. The way I see it the Euro zone is not interested in destroying America's economy but sees the need to defeat $ hegemony gradually. I think China's intentions are to defeat the US economically to the point it can no longer support far flung unilateral nterventions.

This would explain Europe's slow and measured pace for building the Euro while I think that China's refusal to gradually revalue its currency suggests the possibility of a more abrupt and sinister plan.

Belgian (2/17/05; 06:52:15MT - usagold.com msg#: 129408)
@Boilermaker
Thanks for the hot water post. I agree with the big lines in it. The details don't matter.
Do you remember the period of Big Trader, the Hong Kong gold Giants !? They had to refrain themselves from rushing into gold...like Trichet had to please, "publicly", for NOT rushing into the euro !!!

I, nor anybody else, don't know "when" it (floating goldprice) will happen. But did we know in advance that the $-POO would rush from $10 ('99) to ('04)$55 ? Did we know that in 1980 we had a few significant all time highs (IRs-Gold). Did we know that POG=$253 was the low before the WAG ? Etc...

Has China already "secured" enough energy for its expansionary plans ? Does the dollar already shows signs of hegemonial retreat on the geopolitical front ? Has Iraq already been stabilized (second biggest oilreserves) ?

This technical breakpoint (breakthrough) of freepricedgold will happen when all prospects (idle hopes) for correcting the imbalances have evaporated.

Last night, I saw a documentary on Saudi Arabia's history of the past 35 years. Yes, even SA is changing fast...but they haven't forgotten their history. They just started to understand what exactly happened to them, during all these years. They are in the process of making a 180° turn (flipflop). This change will happen in cooperation with pragmatic euro assistance. They are fed up with the ME wars.

In the mean time we, here at CPM, keep working on our gold-understanding. Some more patience mate.

Belgian (2/17/05; 06:21:54MT - usagold.com msg#: 129407)
@Druid
In my opinion, Prudent Bear and many others, refuse to accept (see) the marvellous collusion between Greenspan and the financial industry leaders. Central banks do act in concert...market-leaders, the movers in the financial industry, do the same. That's why I prefer to call the whole a "fraternity". Once one accepts this as a given, one can leave a lot of yadayada for what it is.
The above is a reflection on reading PB (your link). O. Issing is simply repeating what the ECB stands for and to what extend the ECB evolves further "away" from the FED...WHO CANNOT AFFORD ANYMORE TO COPY THE POLICIES OF THE ECB !!!
Hereout follows that the change in the coming new goldmarket, will be the result of "political will". It took me a very long time to understand what this was exactly meaning.

Boilermaker (2/17/05; 06:15:57MT - usagold.com msg#: 129406)
China Strategy vis-a-vis US Power
I think that the continued refusal of the Chinese to revalue/float their currency with the dollar can be explained this way. China witnessed the implosion of the USSR nearly 20 years ago and saw that it was economics and not armies that won the day. Simply said, the US, having the benefit of the world's reserve currency and the attendent priviledge of printing it at will, forced the Russians to the "wall" by pumping billions into its Star Wars strategic missile defense system. The USSR just didn't have the resources to compete on this level because its currency would have and nearly did disintegrate. The US won the cold war with its superior currency.

Now come the Chinese, seeing the cold war lesson, looking to turn the tables using their own unique strategy of economic pressure. Here is my theory; China is building its physical industrial structure and huge reserves of $ by maintaining spartan domestic consumption and offering goods to Americans at prices that are too good to refuse. Sort of like force feeding the goose till its ready to be cooked. Then comes the axe, a few trillion US$ dumped like confetti into the winds of the market. The $ is downed, the emperor has no clothes, darn few factories and not enough energy. Asset based wealth disappears and commodity inflation takes off.

One would logically ask why China would deliberately destroy their $ hoard and torpedo their biggest customer. I think its a small price to pay to accomplish what militarily might be far more expensive and dangerous.

I'm also sure that there are two other facets to this ecomomic strategy, oil and gold. China is busily courting oil exporting countries and buying offshore natural resource companies. We can only speculate that China is also building its gold reserves to offset the instantaneous loss in their $ reserves. What we don't know is when they will feel it's time to cook the goose.

Belgian (2/17/05; 05:43:09MT - usagold.com msg#: 129405)
Indeed Sundeck !!!
http://www.gold-eagle.com/editorials_04/images/petch121604a.gif
Let's take it one single step further...WHAT ABOUT THE GOLDPRICES !!!??? WHY did the precious metal lagged so blatantly. Please, take into account that the POG low of $253 was an intentional aberration and does not count as any point of reference.
Pick up the gold/CRB-chart + gold/dollarindex-chart.
Conclude how the goldprice is being "abused" to obscure the real desintegration of the dollar-unit. Watch the dollar exchange rate against Swiss Fr/Can $ over the past 35 years. The containment of the gold-price served to mask the dollar detoriation...that is becoming more and more visible in other indicators, except gold.

The one and only worry that ECB and FED, both express publicly, is the $-€-POO. The POO is now doing what gold (the POG) should have been doing and is now absolutely forbidden to do !!!
Look at this Producer Price Index (PPI) chart from '48 (link), and you will understand WHY.

No wonder that the liquidity/velocity of paper and metal gold goes down. The "makers" will be "broken". Don't take the present period of calm as a lazy hot summer. Thanks Sundeck.



Belgian (2/17/05; 05:09:54MT - usagold.com msg#: 129404)
@968
*** Correction of the imbalances *** !? How nice and gentle, this consensus is "worded". Knowing very well that nothing can be done to restore the balances, without a real "technical" breakdown of the dollar-engine and causing a dramatical change.
We are all to believe that "time" will correct and restore the "particular" established imbalance !?
Greenspan tried to tell us that we simply had to sweat it out. The real hard problems will pop up in 2008...when the present administration leaves. Don't worry, "yet" about a few TRILLION more or less. Americans are going to "SAVE" it from now on...in the famous objective unit of exchange.
Aren't the Japanese the biggest savers on the planet ?

The complete financial industry is now reflecting this "wait and see" policy...as never before. Silence before the storm ! The longer it remains silent, the more devastating the coming storm will be. *Anchor* yourself with as most metal as you can...as you understand...as you suspect intuitively that is good for you.

Even Greenspan is copying more frequently the notion of "stability", whilst he was the one who created (encouraged) instability in the first place. Easy money and its aftermaths are NO anchor...never provided a real genuine anchor...up until now.



Sundeck (02/17/05; 03:08:13MT - usagold.com msg#: 129403)
Metal price charts - last few years
http://www.lme.co.uk/dataprices_pricegraphs.asp
Of general interest...

Take a look at the metal price charts for the last few years at the links provided... Choose base metals (copper, zinc, lead, nickel and aluminium) for last two years from the LME site, and precious metals for last five years from Comdirect.

Note the initial "speculative surge" in the base metals and especially in silver... Now prices appear to be settling down into a steady growth pattern...

Prices "fueled" by demand in a growing world economy (especially China) and by a depreciating US dollar (the unit for pricing).

Are we at the beginning of a "commodities super-cycle"???

It is not just oil that is "valueing" the dollar...

Gold 5yr:

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1&sTimeframe=5Y&useSettings=0&showSettings=&sid=&hiddenTimeFrame=1&sOrdType=price&sScale=linear&sMarket=GLD.FX1&iType=1&sAv1=na&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=na&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=2&iInd2=na&iIndcount=1&sSettings=na

Silver 5yr:

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=SLV.FX1&sTimeframe=5Y&useSettings=0&showSettings=&sid=&hiddenTimeFrame=1&sOrdType=price&sScale=linear&sMarket=SLV.FX1&iType=1&sAv1=na&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=na&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=2&iInd2=na&iIndcount=1&sSettings=na



Belgian (02/17/05; 02:35:19MT - usagold.com msg#: 129402)
Sundeck/Flaccus/GAB
WGC-India >>> gold-paperization : Same old stinking rat.
Simply illustrates how illiquid the metal market is becoming. Not only the metal, but also paper contract gold volume keeps on shrinking.
The "old" dollar-gold-market must and shall lose its former function...quietly...steadily...gradually...without fanfare.

We all should welcome all evidence that physical gold does change hands !!! We should advocate a lively goldmetal market and not at all take this as any sign of a gold-negative. Real goldmetal sales and buys are VERY POSITIVE, from whatever corner they come. Those who keep on dreaming about an ever expanding paperization of gold, want to "immobilize" the metal and "control" its price/pricing.


Flaccus : GAB got it !!! It was the dollar who "made" this goldmarket...it will be the euro who will "change" (break) it.
Allow me to repeat the following : The existing goldmarket can (and will) break in a fraction of time and the new goldmarket can (and will) emerge extremely fast. There is nothing as evident as another "goldrush" !!! The rush for the universal metal will be "global" this time.
Keep on asking yourself...WHY...these $-€-goldprices remain as freezed as they are !!!??? WHAT IS GOING ON HERE !!!???

Think, WHY the yuan doesn't wish to decouple (float) from the dollar !!! A pure strategic measure. Emperor dollar must be dethroned, discreetly and step by step. As an amateur observer, I can't see any other alternatives, as to explain (understand) what is going on.

Remember the times we were speculating about the UK coming into EMU, and the big breakthrough that would cause. See HOW the UK is being "isolated" from the EU (and EMU) for very good dollar-reasons of course. But the UK will always remain a trading partner with the continent and that's why the continent doesn't want to isolate (break) the UK.
Who forced the UK and why...not to underscribe WAGII ???
And then Gordon and the IMF-gold idea + the US' "pro forma" protest !
Can one conclude that nothing golden is going on ?
WHY is it that the goldprice must remain contained by all means ? WHY must the levels of global tension continiously be raised (CIA/FBI) intentionally ? Who is trying to calm things down ? Etc...

We continue to head for "escalation" for a purpose. And in the mean time, the world's second biggest economy, Japan, is in its fourth recession within a decade. They are forced to keep on buying into dollar-debt (UST) because of the IR differentials. Not a word (anymore) about gold going into Japan ? China knows what it is doing and where it is going.





Druid (02/17/05; 01:45:08MT - usagold.com msg#: 129401)
TownCrier (2/16/05; 14:15:54MT - usagold.com msg#: 129379)
http://www.prudentbear.com/creditbubblebulletin.asp
Belgian, on the "objective" unit of account



Druid: TC, still in class going over Miner's work (incredible!). I came across what I've posted below a few minutes ago and as I was reading it, the enormity of what you and many of the intellectual giants that have posted in the past and presently post at this forum reference your thoughts as it pertains to economics and gold's role in that discipline, finally hit me. Yes I'm slow and I don't know that I'm bright enough to put into words what is bouncing through my mind as I type this post.

People, take a look at the snip below and recognize the inherit dogma that is used to describe money. And this coming from a very powerful and influential leader to the ECB. The body of work in the archives at this wonderful institution of learning IS CHALLENGING THIS DOGMA AND LITERALLY RE-WRITING ECONOMIC THOUGHT IN REAL TIME. This body of work should be in college textbooks all across this land. TC, when I read yours and MK's essay on the Eagle not to long ago, I found myself literally cheering because this was a different point of view challenging the status quo of gold thought. My understanding is now better today then at the time of that post. Yes, the sun is beginning to pierce the darkness. Thank you good sir.




More from Mr. Otmar Issing

We are this week provided a few moments of central bank sanity from our old favorite ECB Chief Economist, Mr. Otmar Issing. I have excerpted from his short paper "Monetary Policy and Asset Prices," available online at www.boersen-zeitung.com.



"With stable prices money serves society best as a unit of account, medium of exchange, and store of value. Any index of consumer prices covers only a segment of prices in an economy – although an important one. Prices of assets like real estate or equities are excluded from the definition."

"We have learned on many occasions that excess liquidity can show up in excessive asset valuations and not only in consumer price inflation. Sooner or later, then, unsustainable asset price trajectories may translate into sizeable risks to price stability -- in either direction -- and often much further down the road as the long-run fallout of the Japanese bubble of the late 1980s has shown."



968 (02/17/05; 01:39:10MT - usagold.com msg#: 129400)
Interview with Mr Tommaso Padoa-Schioppa, Member of the Executive Board of the ECB
http://www.ecb.int/press/key/date/2005/html/sp050217.en.html
Q :How do you assess developments in the economic situation in the euro area?

A: Currently, the European economy is growing at faster a rate than that recorded in 2003, 2002 and 2001, but this growth is accompanied by a sluggishness, in particular in consumption, above all in Italy and Germany. In this respect, the situation has not improved compared with three months ago. Although it cannot be said that growth is strengthening, neither can it be described as having petered out.

Q : Fourth quarter data for Germany and Italy have been very negative. What is the reason for this? Are the economies of these two countries slowing down temporarily?

A : We do not really know why this is the case. The low levels of growth in Italy and Germany have certain common features, such as long duration, demographic decline, consumer weakness, the existence of a large region with an assisted economy which burdens public accounts and does not succeed in taking off (the Mezzogiorno in Italy and the East in Germany). However, there are also differences. For example, in recent years Germany has made a formidable recovery in terms of its competitivity, while Italy has lost ground.

Q : In the past few weeks, the ECB has been drawing attention to the abundant liquidity, as if it were preparing the way for a hike in interest rates in the near future.

A : There is nothing new in emphasizing the abundance of liquidity. For several years now, our monetary analysis has revealed significant growth in liquidity. Exceptionally low interest rates have pushed investors towards certain forms of investment and have led to a strong increase in prices in certain asset markets, principally in the real estate sector in some countries, including Italy. The novelty lies in the fact that attention has been drawn to this aspect during the last ECB press conference. We are in a typical situation of a prolonged monetary expansion to which close attention is being paid.

Q : But do you think it is right to anticipate tightening monetary policy at a time when recovery is, after all, only modest?

A : The ECB does not pre-announce its own moves; it makes moves, at the time they become necessary. The stance of monetary policy is determined by the level of interest rates rather than the variation in interest rates.

Q : Let's take a look at the situation in the United States. In 2004, concerns focused on the US deficits in the public and trade accounts and on global imbalances and the possibility of the latter quickly declining. It seems like a more optimistic outlook now prevails. Is this the correct impression?

A : It is perhaps true that at the recent G7 meeting fewer concerns were voiced about the imbalances in the world economy and the deficits of the United States. This may reflect the fact that the weeks preceding the meeting were relatively quiet on both the foreign exchange and the oil market fronts. The G7 is also influenced by the mood of the moment.

Q : So, does the US debt situation continue to be an issue in your opinion?

A : This issue will keep us busy for the rest of, I guess, and perhaps beyond this decade. There are two polar ways of looking at it. One way is to expect that the imbalances will be reabsorbed entirely through a market process and that this will occur without a significant loss of growth. The other way is that the correction of this imbalance calls for economic policy measures and that this will inevitably curb growth.

Q : Is the first opinion that of the United States and the second one that of Europe?

A : It is not so clear cut. In discussions among the G7 there is no black and white. There are rather many shades of grey: perhaps the lighter shade of grey is to be found in the United States, and the darker shade of grey in Europe. This debate came up again in London in February much in the same way as in Washington and Boca Raton in 2004. The latest communiqué from the G7 seemed more reassuring because the atmosphere was calmer and because, with the exception of specific situations, this kind of document is not used to sound the alarm.

Q : In recent months, the ECB has called for the US administration to adopt a more cautious policy on public finances, also to ease pressure on the falling dollar. How do you assess the 2006 budget presented a few days ago and President George W. Bush's pledge to reduce the public deficit?

A : We haven't yet fully analysed the draft budget, also because we don't have all the elements. For example, the text presented in Washington does not include the announced reform of social security or the spending on America's presence in Iraq. But I do see that the intentions are encouraging and that the deficit problem has not been underestimated.

Q : To what extent, in your opinion, has European pressure influenced the American decision to begin to tackle the government deficit?

A : I don't think it's been much of an influence. I'm more inclined to think that President Bush's pledge is the result of the internal American debate. Pressure has come from the establishment. The Republican party has traditionally been prudent on the government budget: its position was perhaps abnormal a year ago; it's less so today. Still, the budget debate has hardly got under way and the outcome in Congress isn't to be taken for granted.

Q : Besides the American public deficit, how do you think that the decline in the international imbalances can take place?

A : The world economy will have to reckon for many years with two basic problems: the external imbalances and the energy question. The scale of the American trade imbalance is unsustainable over time. The imbalance is so ingrained in the structure of production and in the consumption habits of the US economy that it's difficult to imagine an immediate correction. My own view is that the correction will come about with a reduction in American growth and in global growth, because I don't see other regions in the world that could replace, one for one, a reduced speed of the American motor.

Q : Many observers are convinced that the correction of the global imbalances will be a game played between the United States and Asia, in other words, between the debtor country and the creditor region. Is it like that?

A : This perspective seems illusory to me: the correction will also involve Europe, which now has its trade accounts more or less in balance. Personally I believe that the correction of the imbalances will take time, that it will be hard-won in terms of growth and that it will affect all regions of the world simply because the US deficit is so large.

Q : Having considered the situation in Europe and America, let's turn to Asia. You have just attended, together with ECB President Jean-Claude Trichet, a meeting in Hong Kong with the governors of the Asian central banks. What impressions have you gained from that?

A : Japan doesn't seem to be fully out of its long stagnation, as was hoped six to eight months ago: the strength of the Japanese recovery is today modest, whereas China and India keep showing remarkable economic dynamism. Compared to the early part of 2004, it seems that China has a better control of the risks of overheating and that worries about inflationary pressures have diminished.

Q : How would you define economic growth in these two countries?

A : It seems to me that their dynamism is a phenomenon that will continue to dominate the decade. They are transforming their way of life and of production. Chinese and Indian people are moving from an agricultural to an industrial system; they are leaving the countryside to live in the city; they are getting affluent and change their habits. In this sense, the process of modernization is like a wind blowing through the whole of society. Financial tensions are always possible, but the social and economic transformation will not stop.

Q : Let's consider the most recent G7 meeting, which the Chinese government attended for the second time: would the ECB favour China's formal membership of this international grouping?

A : It's not up to the ECB to comment on a decision that is truly political. I can say that the channels of communication with Asia, and with China in particular, are open and that the ECB itself has close bilateral ties with the Chinese monetary authorities. The G7 cannot afford not to have direct channels of communication with the Chinese government: the meetings in Washington in October and London in early February confirm this.

Q : So Chinese participation in an informal dialogue in the G7 is a fait accompli ?

A : I would say so. The Chinese authorities are able to express their views whether they are members of the G7 or not. It is a very positive fact. From this perspective, it is difficult to imagine the configuration we had in London earlier this month taking a step backwards.
------------------------------------------------------------------------------------------------------------------------
Very interesting interview with Mr. Tommaso Padoa-Schioppa. He makes it very clear that the US situation can not continue like this.
"My own view is that the correction will come about with a reduction in American growth and in global growth, because I don't see other regions in the world that could replace, one for one, a reduced speed of the American motor."
>>>> Compare this to Alan's statements yesterday. What a contrast !



ViewYesterday's Discussion.

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

Thursday February 9
website support: sitemaster@usagold.com
Site Map - Privacy- Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved