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ARCHIVED DISCUSSION FROM 4/18/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) The Invisible Hand (4/18/06; 22:31:04MT - usagold.com msg#: 143346) 'Gold is a bitch' http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/04/19/cmgold19.xml&menuId=244&sSheet=/money/2006/04/19/ixperson.html SNIPS... the biggest risk to the gold price reversing is if the economic landscape is in decent shape. A strong dollar and benign inflation will give investors a reason not to buy gold; the reduced demand will soften the price.+People are saying the US dollar could collapse but they have been saying that for years and it hasn't materialised. Why weren't people buying gold when it was $250 but want to buy it at $600?" he says. "Gold has had a hell of run and it needs to take a breather - but I'm the lone wolf in the forest over here==Some are very frightened.The truth hurts or what? Why does the gold bashing continue? Chris Powell (4/18/06; 22:13:30MT - usagold.com msg#: 143345) Jim Rogers discovers gold, a couple hundred dollars late http://groups.yahoo.com/group/gata/message/3791 Latest GATA dispatch.To subscribe to GATA's dispatches, send an e-mail to:gata-subscribe@yahoogroups.com Goldendome (4/18/06; 21:42:22MT - usagold.com msg#: 143344) Long Brother: Where you gonna place your Shorts?....In the wash machine!--------------------------------------------If you're long the future's market and things go against you in the extreme, the price goes to zero; your loss is limited. If you're short the futures market and things go against you in the extreme, the price can go (theoretically anyway) to infinity ~ as can your loses. Some of these shorts in it for the long run, makes one wonder if the Fed is just handing them free money?Copper closed about $3.05/lb, today. And they said it wouldn't hold over a buck--then two... Three?Where can the shorts run? Nowhere seems safe now. The dollar? There's a bet. Bonds?maybe...but then...they'd be turning against themselves. The Invisible Hand (4/18/06; 20:32:05MT - usagold.com msg#: 143343) In two, maybe 3 or 4, months, high POO will be over http://news.inq7.net/nation/index.php?index=1&story_id=72990SNIP"While we are hoping that this [oil above $70 barrel] will be a temporary phenomenon, nevertheless we have to prepare for any eventuality that it will persist for a month or two or longer," the [Philippines] energy secretary [Raphael Lotilla] said.http://www.americanchronicle.com/articles/viewArticle.asp?articleID=8265SNIPSAny way you slice it, these next couple of years are going to be an utter DISASTER! From War to a failing economy, collapsing dollar, radical climatic changes, the outsourcing of American jobs, and terrorism on a global scale!+Thus I fear the paradigm edges ever closer to the Hitler years. All it will take will be a total collapse of the dollar, general depression AND domestic terrorism and a crazy man with balls the size of Tombstones, will step forward. Black Blade (4/18/06; 19:54:46MT - usagold.com msg#: 143342) Jim Rogers Says Gold Will Reach $1,000 as Commodity Prices Soar http://www.bloomberg.com/apps/news?pid=10000080&sid=aTBs9vlvviyU&refer=asia Snippit:April 19 (Bloomberg) -- Jim Rogers, the former George Soros partner who foresaw the start of a commodity rally in 1999, said the boom in energy and raw material prices will endure, driving gold to a record $1,000 an ounce. ``The shortest bull market for commodities lasted 15 years, the longest 23 years,'' Rogers, 63, said in an interview. So if history is any guide, ``they've got a long way to go.'' Black Blade: Sounds about right to me. This is a secular bull market! TownCrier (4/18/06; 19:39:36MT - usagold.com msg#: 143341) Hugh Hendry, et al, on gold http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=M3&xml=/money/2006/04/19/cmgold19.xml Telegraph 19/04/2006 --Maverick fund managers such as Hugh Hendry and William Littlewood are still betting on gold, while GMFS, the precious metals consultancy, has suggested that gold could surpass $850 a Troy ounce this year.Such is his enthusiasm for gold that Hendry has 10 per cent of his new European fund invested solely in the asset - in gold exchange traded funds or gold mining companies."...my job is to be ahead of the trends," says Hendry. "I'm allowed to invest 10 per cent of my fund outside Europe and I have taken gold to the max."Hendry has played the gold market for several years now... and he firmly believes the gold bull run - now six years old - is still in its infancy."Bull markets follow bear markets and vice versa. We have had the greatest bear market in gold, which lasted for 25 years until 2000. We have barely scratched the surface," he says.Hendry reckons we are about to mirror events of the 18th century when the gold standard (a monetary system that backs its currency with a reserve of gold) was introduced. It subsequently lasted for 200 years."The US closed the gold window in 1971 and the central banks were put in charge to rescue the economy," he says. "They have printed money for 35 years - greed assets such as equities, bonds and property have risen 20 times over that period and people are now becoming fearful of the consequences of easy credit - suddenly gold is alive."...For instance, the US current account deficit is causing much anxiety and a slowdown in its consumer consumption could have negative implications on the dollar with a knock-on effect on the world economy. Analysts reckon that if the dollar shows signs of weakening, Asian banks will bail out of dollars into gold as a safety valve, boosting demand further....Peter Hambro of Peter Hambro Mining says there is nothing but bad news around."It's all military and consumer debt in the US and Israel and bird flu," he says. He believes it makes sense to have around 3 to 5 per cent of a diversified portfolio in gold. "People think nothing of buying insurance when they buy a house and gold provides that for an investment portfolio."The gold bulls also highlight that while it may have doubled in price in the past three years it is still some way off its peak in real terms - in other words, allowing for inflation. Gold was priced at more than $800 an ounce at its peak in January 1981 and Jill Leyland, an economics adviser to the WGC, reckons it would have to hit $2,000 today to be as expensive."What's more, figures show that gold has held its real value since 1596," she adds....But predicting gold price movements is extremely difficult. Birch and Hambro won't be drawn on whether the price will break through the $800 barrier or beyond. Meanwhile, Harris reduced his exposure to gold from around 10 per cent to 2 per cent in December - a move he acknowledges was a mistake. "I thought the market had peaked, but I ended up buying funds [such as Craton Capital Melchior Precious Metals, MLIM Gold & General and ACDS Australia Natural Resources] again in February."^---(from url)---^Gold funds are buying other gold funds, selling funds "too early" and then buying them back again, but has any one of them given serious consideration to the strong hands who are quietly picking up the metal in the meanwhile? At substantially higher prices nobody will still want to be buying all this yellow paper as a surrogate for the sure thing -- metal. Those with actual ownership of coins and bullion will have the last laugh and the longest staying power. I'd wager than Hendry has some in his personal portfolio.R. TownCrier (4/18/06; 19:10:11MT - usagold.com msg#: 143340) Bankers press Brown to push through overhaul of IMF http://news.independent.co.uk/business/news/article358593.ece 19 April 2006 -- The world's leading banks urged Gordon Brown today to use his powerful role at the International Monetary Fund to drive through reform at the fund this week in time to avert a financial crisis.The Institute of International Finance, which represents hundreds of the world's largest financial institutions, said the growing risk of a major shock to the financial system made reform "crucial".The warning came as the Chancellor, who chairs the international monetary and financial committee (IMFC), prepares to fly to Washington for the spring meetings of the IMF and World Bank. The meetings are set to be dominated by fears of growing global imbalances and an intense debate over the role of the IMF in a globalised world.There have been calls for a shake-up in the voting system that would see Europe cede some of its representation to Asian economies to reflect the massive changes in the world economy.Mervyn King, the Governor of the Bank of England, said this year the IMF must embark on urgent reform to restore its legitimacy in a changing global economy.^---(from url)---^Throughout history, within the wide body of gold-minded people (advocates and investors) is always to be found a core (fringe(?!)) group of perma-gloomers who never have a positive thing to say about anything, regardless, and on the basis of no legitimate analysis. On the balance of wisdom it usually serves one well to ignore half of what they say and to take the other half with a grain of salt.Now where this gets interesting is when one takes inventory of bankers who, by nature of their position, tend to maintain a stiff upper lip and strive to have an even keel from which to navigate the uncertain waters ahead. And yet despite this, conditions sometimes arise in which the gloominess of bankers can, by comparison, make even the gloomiest of the small goldbug fringe look like pikers with training wheels.And lately, there's been plenty of gloomy unrest from the quarters of the banking fraternity."Harrrr! Batten down the hatches, me boys, there's a wicked storm a' brewin!"R. USAGOLD Daily Market Report (4/18/06; 15:33:18MT - usagold.com msg#: 143339) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.TUESDAY Market ExcerptsApril 18 (from DowJones) -- Gold futures once again climbed to fresh quarter-century highs Tuesday, helped by technical momentum, worries about Iran's nuclear intentions and higher crude oil, traders and analysts said.COMEX June gold settled with a gain of $4.50 to $623.30."The Iranian situation and all of the related strength we're seeing in the energy markets are adding to the general bullishness in the metals markets," said Dan Vaught, futures analyst with A.G. Edwards."Basically, every time the Iranian president makes a new statement, it increases the amount of tension, at least in the metals markets."And this in turn has prompted safe-haven buying of gold, continued Vaught.Market participants are thinking about several potential scenarios in the Middle East if Iran eventually should develop nuclear weapons, said Vaught. One worry is that Iran would be able to dominate Middle East and OPEC politics, he explained.But if the U.S. and/or Israel should take military action, "you are really talking about a potentially nasty conflict," added Vaught.As gold was closing, May crude was up 40 cents to $70.80. It has since hit a contract high of $71.40.The dollar remains on the defensive and this was yet another factor underpinning the metals, related Vaught. As gold was closing, the euro had risen to $1.2284---(see url for full news, 24-hr newswire)--- TownCrier (4/18/06; 14:21:04MT - usagold.com msg#: 143338) Gold glitters to new high --- reserve rebalancing http://www.thedailystar.net/2006/04/19/d60419050148.htm Price of the precious metal is soaring in domestic market, as its price is also increasing in international market, Anwar Hossain, president of Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA), said....gold is regarded as an alternative investment in times of rising inflation and political uncertainty.Big economies are also reserving gold as an alternative to US dollar, which is also responsible for high prices of the precious metal, the BJMEA president said.The gold prices have been witnessing continuous rise since the 9/11 incident as many countries especially Gulf states have resorted to gold reserves instead of US dollars...^---(from url)---^"...gold reserves instead of US dollars..." is a linchpin in the the leveling of the economic playing field so that future generations need not live in fear of their economic wheels suddenly falling off due to a buildup of excessively asymmetric loads being forever forced across uneven terrain.R. mikal (4/18/06; 14:10:49MT - usagold.com msg#: 143337) Banks, funds, families find future in gold http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564719398611715838 Gold, silver reach fresh multi-decade highs MADLEN READ, AP Business Writer April 18, 2006 12:32 PMNEW YORK (AP) - Snippits: "Gold and silver prices on Tuesday extended their rise to levels not seen in more than two decades, driven by turmoil in the Middle East, rising oil prices and a weakening U.S. dollar.""Driven" prices are as much in motion as redefining themselves towards more realistic levels, on a daily basis."Because gold is denominated in the dollar, its long-term performance will depend largely on that of the U.S. currency - which has been weakening due to concerns over the U.S. economy and the budget and trade deficits. ''Gold is going to turn more into a monetary concern ... the need for an alternative to the U.S. dollar will be evident,'' Grandich said."Various reasons the dollar is heading south have been seen for years, but may now be viewed at short range. Gold has also been heading higher in all currencies, reflecting global monetary and fiscal imbalances including debt, asset imbalances, revenue shortfalls and derivative risks."Because gold is now in territory not seen in 25 years, price resistance levels are more psychological than anything, Hunter said. Still, market watchers are saying the metal could soon be flirting with its all-time high of more than $800 an ounce from early 1980. ''We remain very firmly in an overall uptrend,'' Hunter said. ''The one caveat would be that given the rapid rise in prices we've seen in recent weeks, it opens the door for some periods of weakness ... but the underlying uptrend remains intact.'' ''We're only in the fourth or fifth inning in the bull market in gold,'' Grandich said, adding he expects gold will likely rise to $650 or $700 an ounce before seeing any big pullback, and that silver will easily reach levels of $14 to $15 an ounce."As "big pullbacks" become attenuated and less frequent, they are sometimes less unpredictable. TownCrier (4/18/06; 14:08:39MT - usagold.com msg#: 143336) High Gold Prices Will Worsen Inflation -- Dealers Blame Weakening Greenback http://www.iran-daily.com/1385/2540/html/economy.htm TEHRAN, April 18--Record high gold prices will negatively affect the already critical situation of inflation in Iran, said a senior Management and Planning Organization (MPO) official here on Tuesday.Mohammad Kordbachcheh, MPO director general for macroeconomic affairs, told Fars news agency that gold is a major consumer item in Iran, stressing that a rise in the prices of gold and gold coins will worsen inflation.He called on the Central Bank of Iran (CBI) to announce its figures on the status of the precious metal in the basket of consumer goods and services to enable analysts to determine the exact impact of high gold prices on other economic indices.^-----(from url)----^I am too stupid to find the sense in that, unless it it just a means to an (unstated) end. To be sure, I like Vietnam's latest initiative exploring implementation of official inflation indices for the purposes of central banking monetary policy that were NOT biased by gold's performance.When a significant revaluation of gold is foreseen as a necessary inevitability, it is best to simple cut the mooring and let it FREELY skyrocket rather than having it simultaneously rip a CB's attempt at a stable currency (vis à vis prices in the broader economy) to shreads.It wasn't lightly that FOA coined the phrase "free gold".R. Clink! (4/18/06; 14:00:17MT - usagold.com msg#: 143335) @ Flatliner Considering the POS behavior since your post, you might just as well have bemoaned the passing of $14 too ! ($14.07, as I type).C! TownCrier (4/18/06; 13:49:12MT - usagold.com msg#: 143334) There are fundamentals, and then there are Fundamentals http://today.reuters.co.uk/news/newsarticle.aspx?type=businessNews&storyid=2006-04-18T181922Z_01_L18460789_RTRUKOC_0_UK-MARKETS-PRECIOUS-EUROPE.xml&src=rss When John Reade, precious metals analyst at UBS, says as he does here, "We recognise that prices are above what is justifiable on the basis of supply and demand fundamentals -- but as the moves of the last nine months have demonstrated, fundamental factors do not seem to matter very much at the moment," we would all do well to recognize that he has taken only a very shallow view and that there is an undercurrent of deeper, central banking- driven fundamentals that he hasn't even begun to acknowledge as part of the scenario.R. mikal (4/18/06; 13:32:03MT - usagold.com msg#: 143333) @Flatliner http://www.gold-eagle.com/editorials_05/willettalway041706.html Re: "What happened to $13 Ag? Another missed opportunity." According to Brady Willet, you may have another chance:Why Not Squezze the Charmin - Brady Willet - April 18 Flatliner (4/18/06; 13:23:37MT - usagold.com msg#: 143332) What happened to 13 dollar silver? Another missed opportunity. Druid (4/18/06; 12:55:00MT - usagold.com msg#: 143331) Goldilox (4/18/06; 09:27:22MT - usagold.com msg#: 143328) Druid: Good read. My comment awhile back about oil and gold now serving as proxies for serious dollar devaluation are in lieu of the Dollar Index serving that role as a function of interest rates. The Dollar Index, like so many others, is antiquated and range bound but extremely useful as a tool for classic misdirection. The paper faction can still get a hell of a lot of mileage out this Index as they play up any type of noise they can muster to correlate with the direction. Goldilox (4/18/06; 10:44:34MT - usagold.com msg#: 143330) "Rally Caps" While the DOW broaches 11,200 for the umpteenth time, PoG continues its upward march, with "correction" so far, amounting to little more than a pause to catch its breath.Certainly not in the baseball sense, but 11,200 sure seems like a "rally cap" for Wall St. Goldilox (4/18/06; 10:39:09MT - usagold.com msg#: 143329) Wars and 'Rumors of Wars' http://www.jsmineset.com/ snip:To summarize a couple key points I got from the wise and experienced Larry Jeddeloh (www.tisgroup.net, a MUST HAVE service for those that can afford it) of the Institutional Strategist. Maybe you cannot afford NOT to get it. 1. Several more wars in the Middle East are happening as the battle for control of 4/5th of the world's light sweet crude continues. 2. Shia occupies the great majority of the land where this crude oil exists and Sunnis run the countries where most of it exists. On Shia-occupied land Sunnis are making a whole lot of money. Now some of your and my points 3. The Shia, Sunnis and Kurds, as well as smaller groups in the region, all fear annihilation at the hands of one another. There will be no mixed group governments that last. 4. As you and I have both pointed out in the past, the pipeline systems in Iraq and in Saudi Arabia are very vulnerable. Larry also makes this point. 5. As we have been mentioning for years, the demand for oil in China, Brazil, India and other emerging countries will continue for many years. Now that the growth genie is out of the bottle governments are under tremendous pressure to continue the growth and provide higher standards of living for their people. In China it means revolution if it does not occur. In India, Brazil and elsewhere it means loss of power for the ruling political class and the stopping of their income from the public trough and corruption.6. Last time I checked wars never did anything other than increase the debt and budget deficits of the countries involved in them. -Goldilox6.b. . . . and entrench the powers of them what rally for them while the masses scramble for survival. Goldilox (4/18/06; 09:27:22MT - usagold.com msg#: 143328) The Precious Metals vs. Interest Rates and Gibson's Paradox http://www.financialsense.com/fsu/editorials/gnazzo/2006/0415.html and one more- snip:Gold stands in the way of irresponsible bankers that will inflate and inflate, continually debasing and devaluing our currency of its purchasing power. Gold is the ever-watchful sentinel that gives first warning of the banker's misdeeds.The bankers know this – it is why they fear and shun gold. It keeps them honest, healthy, and wise. However, their desires seek out other shores more distant and alluring. The pull of nature is too strong – and they are too weak.As we stated in Gold Wars: Intervention and Manipulation during a conference organized by the World Gold Council in Paris on November 19, 1999, Robert Mundell, Professor at Columbia University and 1999 Nobel Prize Laureate in Economics, made the following remarks during the question and answer session after his speech on "The International Monetary System at the Turn of the Millennium":"Gold is subject to a lot of elements of instability, not the least of which is the attempt on the part of several big governments to make it unstable. [...] If you notice what happened in the past 20 years in government policy in respect to gold, nobody sold gold when the price was soaring to $800 an ounce. It would have been a good deal and it would have been stabilizing if they would have done so. But people sell it when it hits bottom; the British have been selling gold now that it seems to have hit the very bottom. That element – governments selling when the price is low or not selling when the price is high – makes it destabilizing. Governments should [...] buy low and sell high."If interest rates have been manipulated downward since 1995, and with them the price of gold, then it would seem to make perverted sense that now that interest rates are going up – that gold should go up as well.Therefore, does it still hold water that either gold or interest rates are wrong? Maybe – maybe not: maybe both.Which relationship is right – should bonds and gold march together or in opposite directions? In addition, might the present relationship change again in the future?I believe that those capable of such wizardry have persuaded interest rates to steadily fall as the charts indicate. Consequently, the long existing inverse ratio between gold and interest rates no longer holds sway – at least perhaps for a bit longer.Now gold is rising with interest rates. I do not believe the Fed and company want the long end of the yield curve to rise. It will destroy what has taken them decades to pull off. It might even destroy the real estate market and with it the economy.We have a dilemma: just what is the Fed up to? Do they want an inverted yield curve as we have repeatedly stated? Has the Fed lost control? Perhaps they no longer have the power to persuade interest rates to heed their beck and call.The most horrid of possibilities is that rising interest rates are the desired choice. Perhaps a big hit to the real estate market is in order, as who forecloses on the property?Who gets to keep whatever monies have been paid to date, and now gets to confiscate the property as well. A piece of property that cost him nothing to lend the money to, and which he can now lend to another – ad infinitum. Flatliner (4/18/06; 09:18:53MT - usagold.com msg#: 143327) Renaisance And Sir MK strikes first with a poetic incantation against the evil that stands on the great Oaken Table of Yore! Goldilox (4/18/06; 09:17:44MT - usagold.com msg#: 143326) It's Different this time - or NOT! http://www.financialsense.com/editorials/navarro/2006/0416.html snip:In 2000, the conventional wisdom said it's different this time when the yield curve inverted. The rationale then was it was an "artificial inversion" due to the low outstanding amount of thirty-year treasuries so no recession would be forthcoming. We all know what happened then.Today, we're again told that it's different this time. The new rationale is because China and Japan are buying US Treasuries, they are thereby keeping yields on long-term paper artificially low. This leads us to ask, If Europeans or Americans were the ones buying bonds instead of the Chinese or Japanese, would it still be artificial buying.The 10-year rates closed Friday at 5.036% and the 30-year is well over 5.12%. There is a clear "slowing" in real estate nationwide particularly in the fast moving west coast California markets and southwest Arizona and Nevada along with some of the stronger east coast markets in Florida, Washington, D.C., and Boston. Foreclosures are at 20-year highs and in places like Denver, it is downright ugly. Lending constraints are also beginning to tighten down. The jobs continue to come in "just right" according to the BLS numbers, but when you dig down and dirty, most of the jobs appear to be marginal at best, with the service and Real Estate sectors driving most opportunities.With manufacturing jobs disappearing and interest rates rising, here's my question: Is the growth in Real Estate, which has recently gone parabolic, going to continue? My bet is not.Wage growth in the US is flat at best. Higher interest rates will cause some major economic slowdowns in the next 3 months to a year as rates for ARMs and exotic mortgages are reset in a big way.Consider this: When a 400k home is reset at the higher interest rates of today, most people will see a full $1,000 a month difference in their payments. Where will the strapped consumer who used the housing ATM to finance purchases the past 4 years get this additional income? Maybe they will have to sell that house and downsize. Maybe, their neighbors will be doing the same thing.It really is a fine line that the Fed has drawn in some very thin sand. I hope Ben Bernanke is a true artist because I don't see how the higher interest rates and higher commodity price inflation will translate to anything but lower consumption over the next few years. The parabolic move we had in real estate is first going to slow and then revert to a mean. In this process, I would not be surprised to see Real Estate move swiftly down and cause a big ripple in the economy.The broader point here is to show that this certainly won't be the first or last time we ever hear the term it's different this time. However, we should be on guard, because whenever we hear it's different, it usually isn't. Goldilox (4/18/06; 09:14:16MT - usagold.com msg#: 143325) What to Make of it All? http://www.financialsense.com/fsu/editorials/marketpulses/2006/0416.html snip:Moving forward to the metals, both gold and silver remain en fuego. While both investors and traders have attempted to isolate "the top", those who have exited their positions are finding it extremely difficult to angle their way in for re-entry at lower levels thus far. Although both are overbought and in need of some consolidation, either through price, time, or a combination thereof, there's no doubt that the secular bull remains in tact. Interestingly, at today's prices, 1 ounce of Gold buys approximately 47 ounces of Silver. Historically, the ratio is in the 17-20:1 range, thus we would not be the least bit surprised to witness a further narrowing in the spread, albeit at much, much higher prices!!The world remains awash in liquidity. How is one to know, now that "Big Ben & Co." have done away with M-3? Did they not ask the masses for trust in "Team Transparency"? The price action in Gold and Silver are telling us. While the Fed and central banks worldwide contend that inflation is under control, or non-existent for that matter, the "whites" on their knuckles are starting to show, as they grip the stick and continue to force feed baby incremental rate increases, all the while they have both feet stomped on the pedal-to-the-mettle in an attempt to engineer the soft landing.What to make of it all? We're not quite sure. However, one thing is for certain from our perch, and that is the continued systemic destruction of the purchasing power of the dollar (i.e. inflation), or as we refer to it as the "transfer and confiscation" of wealth. Somehow, we get the feeling that this plane is coming down without any landing gear, thus buckle-up, close your eyes, and buy gold and silver with both hands!! slingshot (4/18/06; 08:58:40MT - usagold.com msg#: 143324) Goldilox Something about that word that makes you want to skip the letter "G"Sir Black Blade must be having a heck of a time teaching how to Build Brides.Slingshot----------<> MK (4/18/06; 08:48:53MT - usagold.com msg#: 143323) In an era. . . When the government manipulates the economic statistics to hide the true state of the world economy;When the fiat money system guarantees ever growing imbalances, debt and money creation with no end in sight;When the base components of the financial system (stocks, bonds and their derivatives) rely for value not on their individual merits but their appeal to highly organized and capitalized speculators;When no analyst or money advisor is required to ascertain the complexity of the economy and financial markets because they are all driven by a single principle -- speculative interest;When rational expectations become exacerbated to the point where chance, or luck, overrides intelligence;Then, be it resolved, that the only sensible course of action is to buy gold in the form of coin and bullion, sit back and let the tide of events take us where it will. If, indeed, the society has succumbed to a baser view of value as the evidence suggests, then we must know that for now there is no other rational alternative but gold ownership -- gold, which in the end, stands as the gaurantor of wealth no matter what happens to paper assets. Goldilox (4/18/06; 08:08:55MT - usagold.com msg#: 143322) Oops I meant "Bridge" derivative! Bride derivatives are WAY OFF TOPIC.Freudian slop! Goldilox (4/18/06; 07:24:14MT - usagold.com msg#: 143321) Bridge derivative @ TC,Is there a lease rate on the Bride derivative? TownCrier (4/18/06; 07:21:49MT - usagold.com msg#: 143320) Jubak's Journal: Why metals stocks haven't peaked http://moneycentral.msn.com/content/P148489.asp?Printer (4/18/2006) -- Call the theory Peak Metal. The price of gold and other metals, and related stocks, will keep rising as finding new sources gets harder and more expensive.Is it too late to buy into the boom in metals stocks -- everything from gold to silver to copper to iron to zinc? ...does the current boom in metals have longer to run, making this a good time to buy despite gains like these?Investors looking to answer questions like those should take a clue from the boom in oil prices and particularly from a theory called Peak Oil. The analogy isn't perfect -- the commodity markets for metals are much smaller and much more speculative than the market for crude oil. But applying a theory that I'm calling "Peak Metal" argues that while short-run risks have risen recently, the boom in the prices of metals and metal stocks is a long, long way from over....Twin peaks?Now look at the three similarities between Peak Oil and Peak Metal:** It's becoming harder and harder to find significant new deposits of everything from gold to copper. Gold production in South Africa, traditionally the world's biggest gold producer, is now just one-third of its peak because the country's deep underground mines are exhausted and mining companies haven't been able to find enough new gold deposits to make up the difference. Global gold production has actually tumbled as gold prices have spiked. After peaking in 2001 at 2,621 metric tons when gold sold for less than $260 an ounce, gold production fell in 2005 to under 2,500 tons.** When new deposits are discovered, they are in politically riskier countries. In gold and copper, that's meant replacing production from South Africa and the United States with production from Peru and Indonesia, for example.** Production costs are higher in newly discovered deposits. Part of that's a result of location: It's more expensive to produce copper if you have to build roads, railroads and ports from scratch in remote Indonesia than it is to produce copper from Arizona. And part of that is a result of the poorer quality of newly discovered deposits. Costs are rising at many gold-mining companies because the grade of ore -- the amount of gold per ton of rock -- is lower in newly discovered deposits than in older mines.To those, I'd add these factors that could produce even sharper and more sustained price increases for Peak Metal than for Peak Oil....^---(see url for full article)---^Not a bad little article, but it is too bad that the concept of physical ownership seems to be completely off of Jim Jubak's radar screen.It is nice, however, to see him run with the notion of Peak Gold on nearly the one-year anniversary of a post in which I offered up the analogy.(an excerpt of that post follows)__________________________________________TownCrier (4/11/05; 11:28:43MT - usagold.com msg#: 131075)HEADLINE: South Africa's golden sunsethttp://www.mineweb.net/sections/gold_silver/431741.htm11-APR-05JOHANNESBURG (Mineweb.com) -- Uncontrollable costs are adding inordinate pressures on South Africa's gold industry (the world's largest producer), which has accelerated the demise of older shafts, says the South African Chamber of Mines....There are no signs that the rate of decrease in production may be levelling out as the biggest tonnage fall came in the second half of 2004, where 20.2 tonnes less gold was produced compared to the last six months of 2003....in 10-years since 1995, South Africa's gold production has fallen 34.4% or by 179.7 tonnes.^----(from url)----^Peak oil got your undies in a bunch? Try "peak gold" on for size.When choosing between a gold bar (or coin) and a gold mining share, consider which one will definitely still be around in a thousand years. You'll then have a pretty good idea which one you can therefore also reliably count upon during the interim years -- the years that are especially relevant to your personal timeframe. Choose the metal. Choose peace of mind.R.________________________________Put a firm foundation under your portfolio. Choose gold -- it's a better material for the task than paper.R. mas (4/18/06; 07:08:40MT - usagold.com msg#: 143319) White Rose Can you tell me where it says that?That's the whole problem, seems a lot is said and then misinformed on.Sorry for my views. Just every one is into Koran bashing these days and yet they have never read. Remember he wrote the Koran for the Jews! First pages of the Koran.Go figure!Good luck all. White Rose (4/18/06; 06:57:36MT - usagold.com msg#: 143318) We have talked about these eggshells before The Koran prohibits the collecting of interest. This is very inconvenient. For some persons with religious convictions, it is appropriate to enter into contracts that offer the effect of interest without breaking any religious rules.If all parties agree, and there is no funny stuff going on, then there is nothing too remarkable going on.If you want to look at funny accounting, keep your focus on the structure of the US housing market. TownCrier (4/18/06; 06:38:20MT - usagold.com msg#: 143317) It's like walking on eggshells... http://www.bernama.com/bernama/v3/news_business.php?id=192332 HEADLINE: HSBC Offers First Islamic Dual Currency Structured InvestmentKUALA LUMPUR, April 18 (Bernama) -- HSBC Bank Malaysia Bhd has introduced the country's first Syariah-compliant structured investment product.According to the bank, the HSBC Amanah Islamic Dual Currency Structured Investment will further complement the success of its Islamic banking business which it has steadily built up since 1994....The product is made of two components, namely the Commodity Murabaha-i and the Unilateral Promise to Exchange Currencies, which offers investors the opportunity of earning enhanced returns on short-term surplus funds.The Commodity Murabaha-i, which is based on the concept of deferred payment sale, allows an investors to invest a sum of funds through the purchase and sale of an underlying commodity in which the commodities and the profit rate are agreed upon upfront.Under the second component, the investor will provide the bank with a unilateral promise to exchange currencies in which the amount of currencies to be exchanged is specified in the unilateral promise.^---(from url)---^"Pssst... hey buddy. I've got a derivative on a bridge I'd like to sell you."R. The Invisible Hand (4/18/06; 04:59:54MT - usagold.com msg#: 143316) Why didn't Gata tell us this? http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2006-04-18T054307Z_01_SYA002091_RTRUKOC_0_UK-MARKETS-PRECIOUS.xml SNIPGold has gained nearly 50 percent in the last two years, supported along the way by a collapse of FIXED-PRICE forward selling of bullion by producers and assurances by the world's central banks they would hold on to most of the 32,000 tonnes or so sitting idle in vaults worldwide. The Invisible Hand (4/18/06; 04:47:07MT - usagold.com msg#: 143315) There's hope for me and those from Antwerp http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42089&NewsKind=Current%20Affairs SNIPIran's armed forces must be at the ready and will "cut off the hand of any aggressor", hardline President Mahmoud Ahmadinejad said in a speech Tuesday to mark national army day, AFP reported.Antwerp is Antwerpen in Dutch. Werpen is to throw in Dutch. Legend has it that Ant is Old Dutch for hand. Ant-Werpen (Hand-Throwing).==Was Belgian not from Antwerp? No, IS Belgian not from Antwerp? The Invisible Hand (4/18/06; 04:34:39MT - usagold.com msg#: 143314) Let's return to our offices again, again and again - ad fundum http://www.moneyweb.co.za/shares/boardroom_talk/242146.htm SNIPIt's the best of times for gold bugs. Those returning to their offices after a short holiday are today being cheered by news of another gold price surge, this time to almost $620 an ounce.==Gold Herr, Gold Herr, oder ich fall um!(There's a song in German: Beer Sir, Beer Sir, otherwise I collapse!) Goldendome (4/18/06; 00:44:15MT - usagold.com msg#: 143313) Are the Chinese doing this already? Interesting that this week, the top dog of China is coming over to the U.S. to listen to carping about our trade deficit and the dollar/Renimbi. The Chinese even went to the lengths of having some advance men spread a few billion dollars around the U.S.buying things, in effort, to show us they're not so bad after all.Well-next month, I think we can all predict that the U.S. trade deficit will probably hit an all time high...May just blow through the old high like nothing. (Last weeks glee that the trade deficit had fallen from the previous month? Heck, that was for the 28 day month of February to begin with--and the amount was still the 3rd highest on record!) We can then look for presure to build once again on China to do something in the currency area or face a growing tariff threat.Now to the point! If I were the Chinese and were facing an increasing threat of tariff action, I think that I would begin to allow the U.S. currency to fall in value against the Renimbi. Yes- and while I was about it, I would take some of those trillion dollars U.S. and begin to buy futures contracts in ALL of the commodities that my country would be needing to further develop. Then I would pull back from buying further U.S. debt instruments--lighten up some on those I'm holding--and see what begins to happen. So--now I have futures contracts for all types of commodities contracted for when the dollar value of those commodities was lower due to a higher dollar at that time, and if --as the U.s. wants-- the dollar falls, causing the commodities to spike higher in dollar terms, I still have my contracted futures price to pay with my now, deflating in value--dollars.As the futures contracts in oil, copper, gold, silver, corn, wheat, ---whatever else---come due, I pay up with my dollars and take delivery of the commodities. Beats the political hassle, it would seem, of trying to acquire companies in sometimes unfriendly areas. ViewYesterday's Discussion.
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