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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...

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ARCHIVED DISCUSSION FROM 9/19/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Blackjack (9/19/02; 23:57:52MT - usagold.com msg#: 85573)
@ Ag Mountain
A person's portfolio reveals their motivation. It does not make your opinion more or less valid. Sorry you fell under Butler's spell.
Are you under any spells now?

Black Blade (9/19/02; 23:32:31MT - usagold.com msg#: 85572)
Saddam is warned: We'd nuke Baghdad
http://www.thesun.co.uk/article/0,,2-2002431528,00.html

Snippit:

AMERICA will NUKE Baghdad if Saddam Hussein dares unleash weapons of mass destruction, it emerged last night. The chilling warning to Iraq was revealed by former Tory Premier John Major, who led Britain in the 1991 Gulf War. During that conflict, allied forces were armed with "battlefield" nuclear weapons and prepared to use them in a counter attack, he said. Saddam was privately warned his capital would be obliterated if he used weapons of mass destruction against allied troops or Middle East targets � including Israel. And senior security sources last night confirmed Saddam has been warned AGAIN of the consequences if he breaks the ban on using terror weapons. Mr Major wrote of the Gulf War: "In private, Saddam Hussein received an unmistakable warning about the immediate and catastrophic consequences for Iraq of any such attack on civilians. "I knew that if he did use these diabolical weapons we would have to escalate our response to bring the war to a speedy and conclusive end before too many of our troops were exposed to them."

Black Blade: "Interesting" revelation.

Black Blade (9/19/02; 23:23:28MT - usagold.com msg#: 85571)
U.S. ambassador: Militant infiltration into Indian Kashmir is up
http://www.usatoday.com/news/world/2002-09-19-kashmir_x.htm

Snippit:

NEW DELHI, India (AP) � Infiltration of militants from Pakistan's portion of Kashmir into Indian territory has increased in the past two months, the U.S. ambassador said Thursday. "Infiltration is going on, and in our judgment it increased in August and September," Ambassador Robert Blackwill said in an interview to Star News and Aaj Tak television channels. "In June and July it was down." An end to infiltration is one of India's main demands for creating a climate to renew dialogue with Pakistan, its nuclear-armed rival and neighbor. India accuses Pakistan of training, funding, arming and helping the Islamic militants cross into India to fight for merger of the Muslim-majority region with Pakistan.

Black Blade: Geopolitical tensions are on the rise again. Pakistani guerillas attacked and killed a regional Indian politician and his aides a few days ago. There have also been several more grenade and armed attacks on local as well as occasional artillery exchanges across the border. It looks like it's back to normal. Eventually full scale war will likely break out.

Gandalf the White (9/19/02; 23:12:18MT - usagold.com msg#: 85570)
THANK YOU Sir "A Nation of One" !!! < ; - )
a nation of one (9/19/02; 21:43:44MT - usagold.com msg#: 85560)
*****Happy Birthday O' Mighty Oaken Table of Yore*****
====
Thanks for breaking the ice in the Essay Contest ! WELL DONE, and with the Addendum ALSO !! NICE !!
--- Ok All, you now have something to try and better, BUT let me remind you that Lady Leigh posted the first entry in a former BD essay contest and NO ONE could top it !
I know that it takes you "LURKERS" a while to register and get your "PASSWORD" by hitting the "here" Link atop this "Post a New Message" page, but you can be drafting your entry ESSAY as you await the USAGOLD Staff reply !
DO NOT WAIT tooooo long in requesting your PASSWORD !!
<;-)

Blackjack (9/19/02; 23:07:12MT - usagold.com msg#: 85569)
Soros making friends for us around the world
http://www.guardian.co.uk/brazil/story/0,12462,795565,00.html
Lest anyone miss the message, the world's most celebrated currency speculator, George Soros, spelled it out in letters 10 feet high.

In an interview with the Folha de Sao Paulo, Brazil's leading financial newspaper, in August, Soros argued bluntly that Brazil would not be allowed to elect Lula president.

As long as Lula led the polls, Soros predicted, and even more should he win, the Brazilian real would be under speculative attack. Therefore, if elected, Lula would be forced to declare a moratorium on Brazil's debt, precipitating a much larger version of the catastrophe that has been played out, to the general indifference of the world, in neighbouring Argentina.

That prospect alone, Soros said, would prevent Brazilians from electing Lula. It was tough, he said, but added: "In the Roman empire, only the Romans voted. In modern global capitalism, only the Americans vote. Not the Brazilians."

His remarks were judged so outrageous in Brazil that even President Cardoso was forced to come to Lula's defence.

In the past, Brazilians appeared to think along lines similar to Soros's bleak analysis. But today things are different. At this stage in the great neo-liberal experiment, there are few voters in Latin America who have failed to notice that the net result of those policies has been that the gap between rich and poor, already preposterously wide in Brazil, has grown wider.
_________________
Brazil will be in the news this Fall. Stay tuned.

Waverider (9/19/02; 22:58:04MT - usagold.com msg#: 85568)
Bank of Japan intervention begs the eight trillion yen question
http://www.guardian.co.uk/japan/story/0,7369,795525,00.html
Snippit:
"The central bank stunned observers...by announcing plans to buy up stock held by 10-20 commercial and regional banks over the next two years. That drastic proposal left many analysts wondering whether the stronger than expected remedy signalled a worse than feared diagnosis of Japan's financial woes. "For a developed country's central bank to jump out and buy equities is completely bizarre," said Garry Evans, strategist at HSBC Securities. "Reading between the lines, the Bank of Japan sees some sort of crisis looming." So fragile is the system that the settlement of accounts in March and September has become a half-yearly trauma for banks worried that a late slide in stock prices could erode what is left of their capital bases.

Waverider: Article on BOJ intervention shoots straight until the last paragraph...guess they had to try to end on a positive note!

Black Blade (9/19/02; 22:44:59MT - usagold.com msg#: 85567)
Kozlowski's ex-wife puts up $10m bail
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1031119485005&p=1012571727088

Snippit:

Dennis Kozlowski's ex-wife has agreed to post the $10m that will guarantee the former Tyco chief executive's freedom while he awaits trial on corruption charges. But prosecutors from the Manhattan district attorney's office still want to check that the $10m does not come from assets they froze last week, when Mr Kozlowski was indicted on charges of stealing from the conglomerate. Mr Kozlowski's bail was set at $100m, of which $10m had to be secured by Thursday's state court hearing. Mr Kozlowski and his first wife, Angela, were divorced in July 2000 and he remarried. Her decision to back her husband - in effect keeping him out of the tough New York prison at Rikers Island - comes in spite of revelations about the Tyco money that Mr Kozlowski allegedly lavished on his new wife, Karen.

Black Blade: And as I was just about to send him a "soap on a rope". Hmmm�

Black Blade (9/19/02; 22:24:03MT - usagold.com msg#: 85566)
Home Construction Drops for Third Month
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APYnptRXhVS5TLiBF

Snippit:

Washington, Sept. 19 (Bloomberg) -- U.S. home construction unexpectedly fell in August for a third straight month, putting a crack in one pillar of the economic recovery. Builders broke ground on new homes at an annual rate of 1.609 million units last month, the Commerce Department said. That was down 2.2 percent from July's 1.645 million pace and mostly due to a slump in the Midwest. Initial jobless claims held above a level that suggests a sluggish labor market, the Labor Department said. ``Weaker housing starts and persistently high jobless claims continue to point toward a modest economic recovery,'' said Edgar Peters, chief investment officer at PanAgora Asset Management, where he helps manage $15 billion.

Black Blade: "modest economic recovery" eh? After three months of declines we just might see a trend starting to develop here. The housing industry talks of increased numbers of permits � that's fine but a hand full of permits do not necessarily translate into new homes unless those currently being built are sold. I have seen real estate busts where many new subdivisions sat unoccupied.

Black Blade (9/19/02; 22:10:26MT - usagold.com msg#: 85565)
Jobless claims still high
http://money.cnn.com/2002/09/19/news/economy/jobless/index.htm

New weekly claims for unemployment benefits stay above 400,000 level; housing starts fall.

Snippit:

NEW YORK (CNN/Money) - New weekly claims for jobless benefits in the United States dipped last week, the government said Thursday, but were higher than expected and stayed above the benchmark 400,000 level, as the labor market struggled to recover from heavy job cuts last year. The Labor Department said the number of Americans filing new claims for unemployment benefits fell to 424,000 in the week ended Sept. 14 from an upwardly revised 433,000 the prior week. Economists, on average, expected 415,000 new claims, according to Briefing.com. It was the fourth straight week in which the number of claims exceeded 400,000, a benchmark level indicating weakness in the labor market.

In a separate report, the Commerce Department said housing starts fell 2.2 percent in August to an annual rate of 1.609 million units after falling 2.7 percent in July. Economists, on average, expected housing starts to rise to a 1.67 million-unit pace, according to Briefing.com.

Black Blade: "Economic Recovery"? I think not. First the "Bone Pile" continues to grow even as many are not counted for various reasons. Sort of a "hedonic unemployment" maybe? Who knows. The fact is that many more are unemployed and are not "officially" unemployed. The fact that even a sustained level of unemployment running at a weekly 400,000+ clip of new unemployment claims is definitely cause for concern, not to mention the consistent upward revisions of prior weeks claims. Secondly, are we seeing the first cracks of the real estate bubble here? Three straight months of declines in "housing starts" is not promising. Remember that real estate bubbles lag stock market bubbles by several months and the stock market bubble is still deflating with a long way to go. Hmmm�

As always, get out of debt, stash enough cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program.

Black Blade (9/19/02; 22:08:39MT - usagold.com msg#: 85564)
IMF warning on world economy
http://news.bbc.co.uk/2/hi/business/2269758.stm

Snippit:

The world economy is facing more risks than it did a few months ago, according to the head of the International Monetary Fund (IMF). The global economy has shown remarkable resilience in the face of multiple shocks But Horst Koehler said the IMF still expected the world recovery to continue. He made his comments in a speech in advance of the IMF's annual meeting in Washington next week. In a speech to the Council on Foreign Relations he said: "Risks to the global economic outlook today are clearly tilted more to the downside than they were a few months ago. Mr Koehler said the heightened risks included the continued fallout from the collapse of the equity bubble, corporate scandals that have undermined investor confidence, crises in some emerging economies such as Brazil and Argentina, regional political tensions and volatility in world oil prices.

Black Blade: Truth be told, it is going to get very ugly before it gets any better. The world's major economies have fallen under deficit spending, crushing government debt (that will never ever be paid), depleting resources, the end of "cheap energy", etc. The problems are so great that the IMF is essentially irrelevant.

kasperjack (9/19/02; 22:07:00MT - usagold.com msg#: 85563)
Murphy At His Blowhard Best
http://www.mips1.net/MGGold.nsf/Current/F364196CC2C86D1985256C39001F741E?OpenDocument
Murphy is building up a head of steam and rightly so. He and Hamilton were more than a year ahead of the pack on the JPM story.

LimitUp (9/19/02; 22:01:47MT - usagold.com msg#: 85562)
Did Someone Mention My Name?
Having been a GoldBug for 50 years ,I can feel the rocket engines warming up - to the Moon!

Black Blade (9/19/02; 21:52:09MT - usagold.com msg#: 85561)
Re: Operative and silvercollector

Operative - thanks for the tips. I knew I was doing something wrong. Just got in, the weather is starting to turn brisk and the beasts are on the move. I have seen several nice specimens though they are on private and Federal land. The Federal land opens next month. Any nice "butterball" will do to fill the freezer and help to add to my food storage program. I think I will pass on using silver tipped arrows though and rely on my lead bullets and Weatherby. Thanks - Cheers!

Silvercollector - You're right, I have been a bit busy stomping in the hills and a couple of hours in the gym. "Healthy Mind - Healthy Body", well.... "Healthy Body" anyway. Cheers!

- Black Blade

a nation of one (9/19/02; 21:43:44MT - usagold.com msg#: 85560)
*****Happy Birthday O' Mighty Oaken Table of Yore*****

Why do I keep coming back here? I can't help it. I don't
know the reason. It's just a need I have to gratify. It may
not be possible for a human being to understand it. It's
harder to quit than gambling, or alcohol, or smoking, or
women (listed in increasing order of their difficulty to
stop). Nature abhors a vacuum (And a vacuum probably abhors
nature). There's all that space begging to be filled, so
many thoughts and words around here that I need to get rid
of. Maybe they will be useful to somebody. Maybe a heart
will be touched. Maybe a mind will be moved. Maybe another
dollar will be deflected from its wicked course and put into
gold. Then gold will go up. Why not? It's possible. Stranger
things have happened. Then too, I might learn something.
It's happened before. At least once. When I was ten. One afternoon on an old wood bridge, off in the middle of an ancient forest somewhere, a man and a woman met. One said something to the other. The sky was gray. The moment tender. The clouds gray. The river was troubled and moving slowly. Gold was down. But the woman smiled. Then suddenly a lost word was seen moving over the water. It was about gold and going upstream to find its place in the gold forum. I have seen this many times in dreams. Only a visit to the goldforum will satisfy it. It has gigantic teeth, this word I speak of. Big, long ribs along its side, and many tails, some of them purple and green. Yet it knows full well that once it reaches its destination, someone will make sense of it. Someone will tell others. Another child will be made happy. The world will go on turning. The sun will shine. And the moon will keep being the moon forever. Or nearly so. The man and the woman can be seen no longer. For they have walked off together arm-in-arm. And the word has gone home. The bridge is still there, under the rain-pregnant sky. But look! The mists part, the blue sky appears, the multi-tailed word has risen! Hallalueliahay! Yippy Yippy Kiyoo! And a rootin� tootin� salutin� quickly follows. That's why I come here. There ain't no place but. What a question!

Oh, right. The bonus part:

$$$BIG BREAKOUT -- "TRUE" or "FALSE" $$$$

"We are now at the beginning stages of the BIG BREAKOUT in
gold. . .True or False."

True. There can be no doubt about this. The recent move to
just below 300, without going farther, and without
repeating, and without being able to stay there but instead
having to move up, very confidently and strongly, can only
mean that sellers to the 300 level have been very adequately de-motivated. Gold's quick return to the 320 level and above establishes without question the validity of this renewed, and firm, area as the now proximate low, perhaps to be tested sometime after gold has moved up to 350. How do I know this? Why it's all over the goldforum, in posts and links. And that's another reason I go there. But now just you watch. Buyers have been acquiring at every point. Medium selling doesn't move the price down very much. And there is not a whole lot of major selling now. Purchase activity is increasing. Selling activity is getting more puny. Chartwise, gold has been trading in a triangle since shortly after the middle of July. The triangle has a slightly declined top and a steep upward bottom side, with a slight flash out the top on the right-hand side, and this is consistent with the likelihood of a very strong upward jolt soon to come, followed by a perhaps slower but still sturdy move to a higher price. Furthermore, things are getting mushy in the economy, which is a main reason to buy gold (it is something you can stand on), and more people are realizing this and taking action on the perception. It all adds up to one thing. The clouds are going to part. The sun will shine. The day will be blue again. The lost word will resurrect. Men and women will walk away together arm-in-arm. And everyone who bought gold is going to be very glad that they own some.

silvercollector (9/19/02; 21:19:20MT - usagold.com msg#: 85559)
Gold is circling the 325/328 again......
...watch for break-outs, will be extreme. On the other hand if gold flirts with 325 too long, it will be punished extremely.

DYOD.

silvercollector (9/19/02; 21:05:10MT - usagold.com msg#: 85558)
Consumer trends.........
http://www.prudentbear.com/archive_comm_article.asp?category=Mid%2DWeek+Analysis&content_idx=15544
Another indication of a weakening consumer came from NCO Group, which is the largest accounts receivable collection service company in the world. Tuesday, the company said it will earn between 28 and 33 cents per share, quite a bit lower than the 41 cents analysts� had been estimating. In the press release the company said:

"During the first half of the third quarter, we have seen a further deceleration of consumer payment patterns. While we have adjusted our spending to adapt to the current levels, we have not executed material changes to our expense structure given the fact that our client volumes are beginning to increase. While the planned increases in client volumes could signal an improving operating environment for our company, we are approaching the next several months cautiously. We will control expenses wherever possible, and spend incremental costs only when necessary to accommodate client growth."

Ag Mountain (9/19/02; 21:04:55MT - usagold.com msg#: 85557)
RPowell, reasons to part company with Butler
At the risk of oversimplification, we tend to operate based on our experiences, so the memorable past usually plays heavily on our choices for present actions. For investment purposes, it is at our own risk that we would let our sentimentalities occupy the drivers seat while we ignore the latest developments and news of the day. Butler's stuck back in the good old days where silver and gold had similar or nearly parallel markets. To cut a very long and elaborate story short enough to make my point, that was then and this is now. They have fundamentally parted ways for good.

Most fundamentally you don't have to look any into anything any more obscure than the very obvious changes to gold rules required by the EU under the common market treaty and most especially 1999 Washington agreement on gold. In case anyone had any lingering doubts remaining during the past few decades, gold has finally and clearly emerged from the old days as the primary financial asset of the two, and Butler never responded to the wake-up call served right under our noses in the daily news. I don't know if he's sentimental or what, but he's apparently got his niche and he's sticking to it even if the environment has changed under his feet. He reminds me of the dinosaur if you know what I mean. We can adapt and do better than that.

silvercollector (9/19/02; 20:50:34MT - usagold.com msg#: 85556)
Several of the intermediates had great pops in the last half hour...
....hope they roll into tomorrow favorably.

R Powell (9/19/02; 20:44:54MT - usagold.com msg#: 85555)
M.K. // The Reaper
I've heard you mention R.E. McMaster before and know that you enjoy his work. He had an unusually good article written on Sept. 4th and published in the Sept 6th issue of "Consensus". It's quite long, mentions many of the issues talked over here recently and, as is his custom, of course, talks of gold. I don't know his reprint policy but perhaps he'd post some thoughts here.
Anyway, you asked about him a while ago so I thought I'd mention that Sept. 6th article. It's a keeper!
Rich

silvercollector (9/19/02; 20:37:15MT - usagold.com msg#: 85554)
Operative
I've noticed that BB has been too busy of late.

G-khan (9/19/02; 20:36:00MT - usagold.com msg#: 85553)
@Galearis Silver Scam
First I must say I am sorry for my false post on little data when I said it was BS. Galearis I have read many a fine posts from you and I should have taken it more serious just because it came from you. I went to Wal-Mart with a weak paper holder magnet from the fridge. I tested about 8 chains one seemed to have a small amount of attraction to it. I was upset as I had read that most of wal-Marts stuff was magnetic - I came back here and posted it was BS. I then started getting reports from others that they were finding magnetic Sterling at almost every spot they went. I was also told that I should retry my test because the person "Galearis" is not some one to start a pure hoax.

Well I went out to JC Penny in St. Cloud MN and started testing with a good strong magnet. I tested about 25 pair of Sterling earrings and all of them jumped up to the magnet and I tested 4 chains and only one was magnetic and two of the others the clasps were magnetic. The manager then came and took my name and said they would report it and get back to me. I then went to Sears in St. Cloud and was getting about the same results when the manager came and asked me to leave. I then called the St. Cloud police and was told by the sergeant on duty that I should file a complaint to the MN Attorney Generals - I called them and they are sending me the papers. I also called the St. Cloud times paper and they are checking into it.

All I can say if you have a problem with Sterling Silver being magnetic don't buy it at JC Penny or Sears in St Cloud unless you bring a magnet with you to test it first. Even if you do you may end up with Silver plated Brass..

One other thing - if you do plan to own physical Silver and need to buy it I would not wait much longer or you'll be paying a lot more..

Sorry Galearis - you were right and I was an impulsive dumb sh*t

Silver is King

R Powell (9/19/02; 20:24:48MT - usagold.com msg#: 85552)
A pile of silver !!
A nation of one, I do hope you're right!

Ag Mountain, did you ever find any logical or fundamental fault with Butler's reasoning other than that the POS has not reacted (other than to Buffett's buying in 1997-1998) as many would think it should. The lack of price rationing does indeed throw doubt on the deficit issue. This doubt caused me to look beyond Butler's and other silverbugs' editorial offerings to look for primary source information. This search led to the Silver Survey and other "official" numbers which only verify that POS is long overdue to rise. Did you find anything to contradict the fundamentals that Butler mentions??
That was quite a pile of silver you once owned. Gold or silver, imho both will cost much more in dollar terms before too much longer. I can't bring myself to part with the actual metal but I paper trade for the potential profit so, hopefully, I'll never have to.
Rich

silvercollector (9/19/02; 20:23:36MT - usagold.com msg#: 85551)
G-Khan
I am not 'supply' knowledgeable but the 'local-yocal' told me today that physical silver is non-existant and gold is scarce.

This is a first in 4 years.

Hmmmm!!!!!

silvercollector (9/19/02; 20:20:00MT - usagold.com msg#: 85550)
USD reversing.........
watch for 104, 104.5...........

Bush is 'pushing', isn't he? Weird. For the first time in years, about 2, I envisioned 'limit up'!

a nation of one (9/19/02; 20:07:11MT - usagold.com msg#: 85549)
to misetich (9/19/02; 05:30:30MT - usagold.com msg#: 85497)

Misetich, I have read post # 85497 several times. I may have more to say about it later. Right now all I can fairly say is that those men should not be allowed to be in charge of anything significant.

R Powell (9/19/02; 20:05:24MT - usagold.com msg#: 85548)
Galearis
And thank you for the research and for explaining it to us and others interested in silver. It will be interesting to see what effect, if any, this will have on the silver market. I would think it may increase the sale of coins, stealing those customers who now buy jewelry partly as an investment.
Pizz has also mentioned possible future problems with the melt value of plated jewelry. If sterling returns to 925 parts silver per 1000, then more silver will be consumed. Question? How does GFMS and others determine the amount of silver used yearly for jewelry? Are the numbers derived from the sale of raw silver OR is the amount of silver consumed derived from the amount of jewelry reported produced? Have the amounts of silver consumed in jewelry over the past ? number of years been accurate??
More ponderously placed puzzle pieces to peskily perturb and perplex.
Rich

a nation of one (9/19/02; 20:02:15MT - usagold.com msg#: 85547)
to R Powell (9/19/02; 18:51:33MT - usagold.com msg#: 85542)

To me it seems there has been a change. I agree there will be movement back and forth. But not to a terrible extent. I think there may be reason to believe that sellers have exerted their major force for some time to come.

Ag Mountain (9/19/02; 20:00:10MT - usagold.com msg#: 85546)
Blackjack, nothing glib at all
Following the less than friendly tone of your note to me your questioning of my investments strikes me especially indiscreet and unbecoming. Like you're trying to say who am I to speak my mind. Will my portfolio one way or another make my observations any more or less valid?

If you must know I will admit that I somehow fell too easily under Butler's influence. I guess his passion, however singularly misguided as I now see it to be, appealed to me at the time. A rookie mistake. It was probably late 1997 or early 98 if I remember right. There's nothing quite like having your own money on the line to inspire a quest for better understanding, so lots of research later and help from various internet forums helped be to break free of Butler's spell. My posting handle is a result from those old days. Since then I've dumped something close to twenty thousand ounces of silver for a much more handy and thoughtfully conceived briefcase full of gold. My other investments are not related to the topic of this forum and so will remain my business and not yours, with all due respect.

Want glib? You won't hear me say "Put that in your pipe and smoke it." Now that would be glib.

Slowman (9/19/02; 19:54:54MT - usagold.com msg#: 85545)
Sterling
Been buying sterling for several years, 23, to be exact:

so with all the comments about bad stuff in the stores, I , got out my strong magnet and went to Walmart today. Checked 150 plus pieces and found NONE that were not as marked!!!!!

Went to Meijer yesterday and found NONE there either. Just wonder where you all are finding this stuff.

I take a pre 1935 silver dollar, strong magnet, and a gold plated watch case so I can educate while there and it gives you less resistance . Everyone so far has been very helpful.

The Invisible Hand (9/19/02; 19:53:06MT - usagold.com msg#: 85544)
Now it's Credit Suisse First Bostom
http://news.bbc.co.uk/2/hi/business/2269722.stm
snippets:
The New York state attorney general's office is considering bringing charges against Credit Suisse First Boston (CSFB) following an investigation by Massachusetts state officials.
A probe conducted by the Massachusetts Secretary of State revealed evidence that suggests CSFB research analysts rated stocks favourably in order to keep clients and secure new ones.
�
The allegations of tainted ratings are the same charges that led to the dismissal of star Merrill Lynch analyst Henry Blodget, who gained fame in the late 1990s for his bullish ratings of dot.com stocks.
Mr Spitzer's office is amidst an investigation into the actions of analysts at Salomon Smith Barney, a unit of Citigroup.
�
==
sorry if this has been posted before.

Galearis (9/19/02; 19:22:30MT - usagold.com msg#: 85543)
@ all responding to the sterling post
Maybe a "simplicity" will help.
I have little to add to the commentary posted since my speculation post. Except this:

I first discovered indications of this fraud in the middle of nowhere, wilderness - about 80 miles from Timmins, Ontario - during the first 2 weeks of August. I discovered it with my own bracelet that I wear constantly and that I had purchased in January of the same year. I am not very careful with it in rough terrain doing field work and it began to show the affects. It showed that:

It was obviously silver plated.

And when I put it to the magnet test it revealed an attraction.

The plated metal under was not silver.

The plated metal is not very ductile, and very much harder than silver.

Note: I collect silver scrap and bullion. I have done so for years. I KNOW this area. I have a mineralogical background and even know the silver mineral(s) in situ.

When one tests other chains of like design made by the same manufacturer (by mark) and one finds the same magnetism, it requires no great intellect to conclude that these other objects have a great deal in common. I did this in the north and I did it in the south. Others clear across two countries (and one in Europe) duplicated my findings.

I reported this to my brother (rhody), Ted Butler, Bill Murphy and on another precious metals forum and the (Canada) Competition Bureau on about the 30th of August. What has transpired since has snowballed on its own same merits.

My great personal embarrassment is that what I do to verify scrap and other collectibles I failed to do with a brand new piece of jewellery right off the shelf. So I add that to my list of personal stupidities.

Why COMEX silver stock totals have remained virtually unchanged for so long may now be, at least partially, explained.

Pennies are cheap. Why not let them fall without so much resistance and thrift shots. It is not pleasant to read perjorative words on this fine forum; I am only asking reasonable reasoning people to THINK a little objectively.

That is all I wish to say - and thanks for the support from those who know.

Regards,

G.

R Powell (9/19/02; 18:51:33MT - usagold.com msg#: 85542)
A nation of one
Just one man's opinion but I'll wager from here to $350 will be a battle. Perhaps a little easier from 350 to 400. I'll guess POG may just glide from 400 on up with no one trying to slow it down and half the world pushing from behind. Goldbugs who pushed, grunted and shoved to first get her moving are allowed to jump on and ride once she's moving free. What a ride it will be. Maybe the only thing moving faster will be the silver streak.
Rich

R Powell (9/19/02; 18:42:56MT - usagold.com msg#: 85541)
Silver fraud in jewelry
When the numbers in USDA reports do not make sense, the government bureau simply states that the carryover numbers from previous years were obviously wrong and arbitrarily changes them, sometimes changing numbers from many years back. Often year end leftover numbers from another country may be targeted for revision, especially a country like China where numbers like the total remaining bales of cotton are state secrets. (the USA and China are the two largest cotton producers by far in the world) The WASDE reports simply take the official number as gospel, and then change them when necessary years latter to explain current conditions.

The GFMS reports in silver from many years ago, assuming an average continuing deficit, indicated that remaining silver supply should decrease more than it has. The 2002 Survey, with numbers through end of 2001, still estimate roughly 300 to 500 million ounces of "carryover" or leftover after the 2001 year. Many of us guessed that this number would have been smaller, basing our judgement on the fact that this carryover number has been bandied about for many years now even tho the deficit continues and should be lowering this leftover. Perhaps the amount of silver in jewelry that has been substituted with base metal amounts to substantial amounts over however long this deceit has been going on???
Thoughts?
Rich

a nation of one (9/19/02; 18:42:21MT - usagold.com msg#: 85540)
no subject. just up.

I expect there will be little serious resistance from here to 350.

Blackjack (9/19/02; 18:41:34MT - usagold.com msg#: 85539)
@ Ag Mountain
"cartwheels of joy","undies in a bunch", "fishing off another bridge"
you must be the King of Glib!
I don't know if there is a silver shortage or not, but why would
anyone put a small amount of real silver in fake jewelry?
BTW Ag Mountain, what are you invested in?

R Powell (9/19/02; 18:21:24MT - usagold.com msg#: 85538)
Ag Mountain / silver
I think I'd agree that less than advertised silver content in jewelry most likely is not the result of any silver conspiracy but simply fraud.

Now, as you say, what's this got to do with investing? Maybe very little, maybe a whole lot. I'm often amazed by different markets reactions to current news releases. Sometimes markets go up on bullish news, sometimes not. Sometimes market reactions seem logical to me and sometimes not. Any analyst who claims to be able to predict market reactions from breaking news items relevant to that market and with great accuracy is probably hoping you don't remember all his missed or wrong opinions. He or she will certainly remind you of thosed called correctly. My point, how will the silver market react to widespread news items about jewelry fraud? This may amount to nothing and then again it may move the market.

Also, as an investor, I've been puzzled for years about reports from individuals and GFMS numbers that clearly indicate that there has been and still is an ongoing deficit in silver on the most basic supply/demand basis. It would have seemed from the estimates of just a few years ago that the deficit should have consumed all supply other that provided by the current year's mining production. This has not happened. Why?????....?????
Perhaps even the small amounts shaved by jewelry fraud over many years could account for what does now remain. As an investor, verifying numbers and opinions is always a great satisfaction and sign that our analysis is not flawed by bad reasoning, bad fundamental information or the existence of unknown and/or unknowable factors. The truth about sterling is anything but unrelevant. Besides being sought after as truth, it is a very important part of the silver market puzzle. It may explain why the POS is not $50.00 TODAY! If true and verifiable, it will releave a constant and dreadful doubt from my mind as I have been looking for just what numbers or reasoning has been flawed in the analysis of so many silver enthusiasts.

I sense your disgust with so many calling for so long that the silver market is right on the edge of severe shortage. What commodity can you name than runs a deficit without price rationing? Maybe as no one has ever thought to check on remaining supply in silver. After all, there has always been uncountable amounts for as long as anyone can remember and, there have been silver nuts shouting about running out for years and years. Ignore them, the world will not end tomorrow and the silver supply will never run low no matter how much more is consumed than produced. No matter how many years the deficit goes on. This situation can go on forever- that's just one of silver's characteristics. There's always plenty.
One of these days...
Rich

Blackjack (9/19/02; 18:16:42MT - usagold.com msg#: 85537)
@ Mikal
Well said.

mikal (9/19/02; 17:44:42MT - usagold.com msg#: 85536)
@Galearis
Excellent job, and thank you for your persistance in the face of ridicule and statism. From your earlier post, the Canadian competition bureau overlooks their assaying duties? Hmmm. What else is new, when the cat's away the mice will play. Strange coincidence they intend to change the bureau's name now. What goes around comes around and responsibility will fall on someone's shoulders while metals will defy Earth's gravity. P.S. I tested some 8 year old "Italian" .925 chains, and all 4 were VERY sticky. @R. Powell- Can you believe it? And something tell's me a gold jewelry scandal brewed in this regulatory environment(we take for granted as competent and functional).

slingshot (9/19/02; 17:28:39MT - usagold.com msg#: 85535)
MK, Gandalf the White
Siege Engine
Adjustments being made.:0)
Slingshot------------<>

Paper Avalanche (9/19/02; 17:27:40MT - usagold.com msg#: 85534)
@ Ag Mountain
You are probably correct in that there is no silver shortage. Great post.

Paper Avalanche

Ag Mountain (9/19/02; 17:08:31MT - usagold.com msg#: 85533)
Galearis: Butler's numbers assume too much
If its legitimate then each ounce of sterling jewelry would absorb .925 ounces of silver bullion from the market.

As Butler makes his assumptions about the percentage of magnetic sterling jewelry, when he runs the numbers on the millions of ounces of silver being illicitly "conserved" he appears to assume that each ounce of "bad" jewelry contains absolutely no percentage of real silver at all. His exercise in speculation is of little real worth to an investor. I'dsuggest you wait until the assay results come in before getting your undies in a bunch.

I doubt this is any kind of organized coverup where manufacturers are knowingly using bogus sterling as a favor to the cabal. I can't imagine they would risk their business on substandard material as a favor to others. It's probably just a rogue fabricator (or several) that are trying to cut corners. It happens in practically every business out there. That doesn't make it right, but it certainly doesn't do anything to support allegations of a silver shortage either. You'll have to go fishing off another bridge.

Voyager (9/19/02; 16:54:30MT - usagold.com msg#: 85532)
Black Blade & Tex
My son is a sophomre at CSM working on a degree in Mining and Economics. He really likes it there.

HOOSIER GOLDBUG (9/19/02; 16:20:18MT - usagold.com msg#: 85531)
RELIEF!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thanks Belgian!!!!!!!!!!!!!!!!
Revaluation of Gold!!!! I believe you are completely correct in your assessment for the time frame (decades, I believe you are referring???????) we will be experiencing in wait for the revaluation of GOLD at higher prices than the current price range. With the acquisition of all IRAG OIL RESERVES, the government will be relieved of ANOTHER'S OIL FOR GOLD existing business format/loss of central bank gold, and the price of GOLD in the THOUSANDS will have to wait until all those oil reserves are gone. I bet ANOTHER did not think about the option of the U.S. Oil aquisition possibility when he wrote his treatise. I personally am relieved. I DO NOT want to live in a chaotic world with GOLD at $10,000 or $20,000 or $30,000. I just want to accumulate real money for fiat money until I die for my sons, or maybe my grandchildren, who will have to deal with more extreme economic conditions. I love GAS at less than $1.50 a gallon and interest rates below 7%. I'm swamped with real estate appraisal work! Wait till the banks collect interest only! Just 12 more years and I am RETIRED! May just another two rounds of consumer refinancing, and I will be at the finish line. Maybe one round of refinacing and one round of liquidations. WHATEVER, GOLD IN THE THOUSANDS IS A LONG WAY OFF IN THE FUTURE!!!!!!!!!!!!! I LOVE BUYING GOLD AT $356.00 AN OUNCE FOR PRE-1933 COINS!!!

Operative (9/19/02; 15:49:38MT - usagold.com msg#: 85530)
@ Black Blade - A Few Tips
It seems the beast you seek has been very elusive, so Im sending a few tips:

* Skip the Ben Gay Rub Down after the workout, it's giving the beast an unfair advantage
* Change your schedule, it seems the elk have your pattern down pat. Go to the elk, then slay the gym.
* Take all those gold coins out of your pockets, you are clinking too much.
* While I know you think a slingshot with Gold Eagles is sporting, take the rifle next time with Silver Tips.

Just trying to help out.
Operative

Pizz (9/19/02; 15:40:57MT - usagold.com msg#: 85529)
Galeris
This little silver problem, if widespread, could probably put a crimp in the melt issue silver will have in a hyper inflationary run, don't you think?

Pizz

Pizz (9/19/02; 15:19:15MT - usagold.com msg#: 85528)
Paper Avalanche
Re: JPM's $20 price.

Now one except JPM really knows for sure, but it has been speculated that JPM may have stock trigger prices in some of their derivative or counterparty risk contracts that would call for contract buybacks, excalation clauses, or the like.

Big money center banks broker many different sofisticated (translated risky) programs. They may guarantee the principle on a package of sub-prime loans and resell it to insurance company B, but the insurance company may put a clause in that says if the bank's stock drops below a certain dollar amount, the bank has to buy them back. The rational from the insurance company's position is that if the bank's stock falls they may not be as good a credit risk.

Something similar happened to Enron, and Enron did not have the cash to buy back their obligations, and filed BK.

If there is enough of this stuff out there, it could put even a large bank at risk, especially when nothing else seems to be going right for the banks.

As the Coin Guy and I observed earlier, we've watched a lot of price action in stocks over the years, and the action around 20 in JPM at least gives me the impression that there may be some truth to the supposedly $20 trigger price.
I find it very difficult to believe that there were huge volume sales of JPM between the bid and ask @ around 19.85 + or -. If some one was accumulating this stock for investment in anticipation of higher prices later in the year or so, they could have gotten in a lot cheaper by puttin bids in at various levels below the market, rather than swallow a few million shares of selling within a nickel or so range. It appeared to me that a large entity told the specialist in the stock at the exchange to take any and all large blocks offered above 19.80. There were very few professional traders playing the spreads in the last 15 minutes.

Pizz

Leigh (9/19/02; 15:12:47MT - usagold.com msg#: 85527)
TEX
Didn't Randy graduate from the Colorado School of Mines? I think I remember reading that.

Black Blade (9/19/02; 15:06:43MT - usagold.com msg#: 85526)
Re: TEX � School of Mines

I did not attend the school of mines though I have several friends and acquaintances who did not to mention having some friends on staff at a couple of these schools. I assume you may be referring to the Colorado School of Mines in Boulder, though there are others such as the Mackay School of Mines at University of Nevada Reno, South Dakota School of Mines and Technology, School of Mines at University of Missouri-Rolla, Montana Tech School of Mines and Engineering, and the New Mexico School of Mines. All have excellent reputations. I started out as an underground hard rock miner in the 1970's (Anaconda Copper Mining Co.) and realized early on that it was very physically demanding work. I eventually decided on Geology as a career. I attended University of Utah, Idaho State University, and University of Montana. All are fine schools and I recommend them highly. BTW, which school is your son attending? It is possible that I know someone on staff or who is a professor (emeritus most likely). Cheers!

- Black Blade

Off to the gym and hopefully slay a beast.

misetich (9/19/02; 14:58:57MT - usagold.com msg#: 85525)
Fitch Downgrades 35 Life Insurers
http://abcnews.go.com/wire/Business/reuters20020919_527.html
Snip:

NEW YORK (Reuters) - Fitch Ratings on Thursday downgraded 35 North American life insurance groups that have combined assets of $1.1 trillion.

The cuts affect 42 percent of the 83 life insurers that Fitch rates and might increase borrowing costs as insurers lose money on many stocks and bonds in their portfolios.
********
Misetich

Fund managers will think twice in aggressive investing in the stock market - a lot of BUYERS are disappearing from the SM

Got gold?

Galearis (9/19/02; 14:57:07MT - usagold.com msg#: 85524)
@ Ag Mountain on a silver "side show" fraud
Well, you asked for it and....
Before I paste this essay on, I would like to quote Ted Butler in a recent email. He said that "it is not necessary to go into so much detail." He too was referring to my earlier post. He said, "The situation is black and white".

But apparently not for everyone:
snip******

Speculations on Affects of Fraudulent sterling jewellery on the Structural Fundamentals of the Silver Market.

Right at the outset I must state that certain assumptions have to be made and this makes this only an exercise in speculation.

This discussion is essentially related to the supply and deficit side of silver consumption. I have taken the liberty, for reasons of consistency (if not accuracy), of using the data provided by the Silver Institute. Their researches cover the consumption side and most usefully break down the jewellery industry into various easily digested mouthfuls of what the sectors are and what they consume. The overall conclusions may only indicate trends and may be a distance from acceptable accountancy � but even so may be better than pro-forma efforts of certain corporations.

The Silver Institute states that the retail jewellery market is made up of 1) "high end" designer/ custom retail outlets and specialty stores, 2) the "bridge market", middle quality name brands sold in more expensive department stores and jewellery chain retailers and 3) "low level" retailers that deal in mass-produced and imported wares in discount department stores, mall kiosks to flea markets.

According to the Silver institute the United States consumed more than 39 m.o. of silver in jewellery form in 1998. Similar demographics and affluence levels and 10% of the population for Canada would bring this total to more than 43 m.o. (Assuming that the buying trends have continued to increase, this figure is likely low now by a few million ounces.) In 1999 the retail industry netted approximately 3 billion dollars. Compare this to sterling flatware sales at approximately $300 M. (+ approx. $30M for the same period including Canada).

According to the Silver Institute one can break the consumption pattern down for various jewellery item category, i.e. earrings: about 33%, rings: 22%, and neckwear and bracelets at 47%.

According to the Silver Institute: over 80% of this is imported, and most of this comes from Thailand, Italy and Mexico.

PREAMBLE AND DISCUSSION

Pertaining to the magnetic "sterling" chain environment we can make some interesting speculations on what the consumption affect will have on silver stockpiles. The first assumption that must be made is that the rough totals in millions of ounces of "silver" involved would represent silver that is NOT being consumed in the jewellery industry. That is a given. However, one cannot assume that this silver is not being consumed elsewhere,. It may not affect the deficit situation at all. It only probably does. This may (and a very tentative "may") also be implied by the seemingly stable totals published out of COMEX on its "visible" silver stocks.
My efforts in surveying the extent of magnetic sterling in two separate geographical areas, south central Ontario, and north eastern Ontario, in a dozen or so jewellery stores � even when they are several hundred kilometres distant from each other � are not large enough samples to make definitive statements that there is a real problem. Circumstantially, a problem is certainly implied, but the evidence, as strong as it is for this writer, would probably still be dismissed as a regional anomaly. This argument begins to break down, however, when others find similar results in very much more widely flung surveys in US cities from one end of the country to the other. Percentage differences of magnetic jewellery stock in jewellery stores can be explained, but not explained away. The situation exists. The fact is that the percentage of magnetic jewellery found in each instance reported is still significant.

In my locale 50% is the total average of magnetic chain jewellery of all stores surveyed. My own survey, as "local" as it may be, is showing that the percentage of magnetic jewellery is somewhat tied in with volume of sales of chain jewellery. At the very least, this implies that restocking of newer chains is diluting those that are non-magnetic. Most of the jewellery stores visited were "bridge market" and "low-level" jewellery outlets. These retail outlets, of course, represent the majority of outlets for most of the public. Freshly restocked chain jewellery fresh in from the distributor in two cases were found to be 90% magnetic.

In other locales 25% magnetic chains in stock have been found in various stores surveyed. Again, the retail jewellery outlets were of the "bridge market" and "low-level" categories. These individual differences in proportions of magnetic jewellery stock could be the result of recent changes of the distributor company for the store, or in the case of larger department stores, a re-supply of older manufactured chains mixed in with newer chains or simply due to the individual checking just half dozen chains (a small sample) of the stock available to check. There also are a number of variables possible for these results in the distribution end. However, on the whole the results would seem to be alarmingly consistent anecdotal evidence that there is widespread systemic level fraud in the sterling silver jewellery industry. Based on this anecdotal evidence, the fraud is already of historic proportions. Recently some individuals have also been looking closely at imported earrings and rings and reporting alarming results.

The problem would seem to be growing in size and extent.

Problems have been found in Thailand "sterling" and Italian "sterling". There has been no mention of problems with Mexican imports � and I can say that one sees very little of these products in Canada except in specialty shops (which are rarer).

SPECULATIONS ON THE IMPACT TO THE SILVER MARKET

As previously stated the use of a silver substitute for jewellery must have an influence on remaining silver stocks supply side.

According to the Silver Institute department stores have 25% (SALES IN DOLLARS) of sterling jewellery stores have 17% of the industry, mass merchandisers, 10% and mail order companies 11%. For obvious reasons I am going to combine these totals to get 63%.

That leaves approximately 37% of retailers handling the higher end sterling jewellery.
The other assumption that I have no choice in making in this exercise is that this percentage of the jewellery business translates unequally in actual bullion weight. If one assumes that a "designer" chain may cost more because of the name and/or design qualities from a high end shop, the percentage sales for this sector of the industry would not reflect as well the weight of metal sold but be skewed downward, - that 37% of the high end sector would represent less weight of silver consumed. However, the 63% would likely be rather more uniform in terms of weight. In other words, the 63% of the market accounting for the lower end retailer could (and surely does) account for a disproportionately higher percentage of the 43 million ounces silver per year actually consumed. In other words at least around 2/3 level of consumption.
Already we are in a problem area. The high end retailer probably has very few quality problems with his jewellery. He is a consumer of silver, and we have no idea of how much is consumed � except he has 37% market share percentage of sales of the whole industry.

So let us go back to the import numbers. 80% of this jewellery is imported.

We also do not know what proportion chains make up of the sterling jewellery in the average shop. 47% (representing the necklace/bracelet etc. stock) of total sales would likely amount to much more than half the weight of sterling jewellery found in an average jewellery store. The remaining earrings and rings make up another 30%. That is roughly 80% of the stock in stores.

Remember, the total silver bullion used for the industry represents approximately 43 million ounces per year. We know that 63% of this is distributed by retailers in the category sector selling suspect stock.

63% of 43 m.o. is 27 m.o. If 80% is imported that brings the number down to 21.6 m.o. If 50% of this is magnetic � my findings and others then- it is still over 10 m.o. of questionable sterling silver jewellery out there. The metal value is about $90 M(USD). Multiply by 6 to 10 fold for the sales damage to the consumer.

Another simpler way of looking at this:
if 80% of the jewellery is imported we get .8 X 43 m. = 34 m.o. If 50% of this is bad then the problem is 17 m.o. per year.

Multiply this by 5, if the problem is world wide, and one gets 85 m.o. Even if the Mexican import sterling is all good, and the Italian and Thai jewellery 50% bad, then a good proportion of the deficit is still looked after.

CONCLUSION

This situation could look after much of the structural deficit in the silver market if the problem is a world wide one. If not, it would likely look after one fifth of the yearly deficit. This extends the time-line for all above ground stocks to be depleted which would explode the manipulated silver market a la Hunt brothers situation in the late 1970s. Instead of next summer, it would be next winter. (PRChina is still the wild card, though) However, unlike the 1980 Hunt Bros. Spike � a corner on the paper market did that � this time the spike would be a response to a depletion of the actual metal.

There WOULD NOT BE SILVER AVAILABLE this time. Silver would take gold with it. The paper futures markets would collapse, COMEX would default, the USD would decline very rapidly and the whole financial system would have a severe balance problem.

I believe it was Chris Powell over at USAGOLD that said one popular figure for the deficit was 83.8 m.o/year.

FWIW, and I hope my thinking was linear, my math unrushed.

***************

I post this at the risk of adding a little "gray" to the palette. To sum up in an area that you state that you want to know about I should add that some 300 million ounces of silver (again Ted Butler's figures) are involved in sterlingwear. If you do not consider a good proportion of fraud in this area is significant, I do not know what is.... My speculations above are VERY conservative.

Regards,

Galearis

Ten Bears (9/19/02; 14:56:06MT - usagold.com msg#: 85523)
Henry C K Liu
http://www.atimes.com/atimes/Global_Economy/DI14Dj01.html
Great read.

kasperjack (9/19/02; 14:53:34MT - usagold.com msg#: 85522)
AG Mountain
Are you a Paper Hanger?
Sounds like you work out of the Comex. I particularily enjoyed your thoughts on the piddly amount of silver that would be consumed if the authorities determine a silver scam is in play. Why did you expend so much effort pursuing the subject then? Could it be that a sovereign nations investigation into the magnetic silver scam might trigger a realization that silver is in short supply. And after all those years of using the silver shortage stories to draw in gullible investors and then fleecing them out of their money the silver supply shortage story is coming back to bite you in the a...... huh?

misetich (9/19/02; 14:46:21MT - usagold.com msg#: 85521)
JP Morgan - TOO BIG TO FAIL?
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APYnkaRNsSi5QLiBN
Snip:

U.S. consumers have missed or delayed so many credit card payments lately that some of these securities have run into trouble. In June, income from credit card loans backing $3.3 billion of securities issued by J.P. Morgan and FleetBoston Financial Corp. fell so low that Daniel Castro, head of asset- backed research at Merrill, warned that soon there might not be enough cash to pay ABS investors. In the end, collections rebounded in July. If they hadn't, Morgan and Fleet might've been forced to repay the $3.3 billion in principal immediately. Like many asset backeds, these securities have early-redemption clauses obliging the issuers to redeem the bonds if the loans no longer generate more than enough interest to cover bond payments.

`Sacrosanct AAA'

While Morgan and Fleet avoided the early payout, the experience suggests that even the highest classes of card securities may no longer be ensured of AAA ratings, Castro says. ``Sacrosanct AAA has become quite vulnerable,'' he says.

These days, many consumers aren't paying their bills, and people in the U.S. are going bankrupt at a record pace. Nearly 391,000 people filed for bankruptcy in the second quarter alone, according to the American Bankruptcy Institute. The percentage of U.S. credit card debt that banks label uncollectible ran at a record 7 percent from March to June, according to S&P.
*******
Misetich

JP Morgan downfall the gateway to freegold!

Got gold?

TEX (9/19/02; 14:40:00MT - usagold.com msg#: 85520)
Black Blade
Black Blade:
Just read your profile on the commentary page. By chance, did you attend the School of Mines? Just curious as my son just started this semester as a freshman.
Tex

Paper Avalanche (9/19/02; 14:24:05MT - usagold.com msg#: 85519)
JPM closed below $20 today
What happens as a result of this?

Thanks in advance for any and all input!

Paper Avalanche

Waverider (9/19/02; 14:08:11MT - usagold.com msg#: 85518)
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
Not to be missed....

Ag Mountain (9/19/02; 14:04:41MT - usagold.com msg#: 85517)
Galearis silver jewelry
I think you are rash to call this a case of precious metals fraud. If this pans out as you've described, it's more properly termed retail fraud in a narrow sector. To keep it all in perspective, most of these items in question would contain less than five bucks of real silver even if they were full-bodied legitimate sterling. They retail for prices far more than that.

If it's found that the sterling jewelry industry is cutting corners like some of the gold jewelers in India, they are single-handedly taking a big risk with seemingly very little to gain. If it's all about curbing retail cost, why not make the pieces smaller? But again, the producer's overhead of actual silver content is almost insignificant compared to the final sale price.

Are you saying the manufacturers are "in" on a larger silver-shortage coverup? That's almost laughable.

Please don't waste precious space walking us INVESTORS through what might be just another case of consumer fraud like counterfeit designer clothing or accessories. If this seems important to you why don't you use your time and talents to tell us how this might ultimately pan out to affect us as precious metals investors. No one here is INVESTING $150 on a white bracelet that may or may not have about five bucks of silver.

Tell us what happens in the event a manufacturer's fraud is exposed. Will the resulting full-bodied jewelry cut into their profit margins, or will retail jewelry prices rise? And if prices rise, then by how much? Will it be enough to cut into consumer demand? Looking at the overall silver market, will the decline in silver jewelry sales be enough to offset the increased silver demand needed to make the remaining items with full-bodied sterling?

What is the bottom line for investors in the precious metal? My hunch, if this manufacturer's fraud is true, is that given the markups at the counter the retail price won't have to move much to accommodate the extra silver needed in the manufacture. As a result, retail demand won't be affected, and simply put, slightly more silver will have to be used to bring the standard back up to 925 from whatever shortcuts might be in place. A marginal impact on silver at best. As an investor in metal I'm not going to do any cartwheels of joy over this because its probably a non event whatever the findings may be. Am I wrong in thinking this kind of treatment is on topic while your retail fraud focus is not?

Pizz (9/19/02; 14:04:27MT - usagold.com msg#: 85516)
Well, JPM appears to close @ 19.87
They managed to hold JPM to a few pennies down while the dow tanked 75 points, but couldn't get it above 20.

Lot's, and lot's of volume.

Probably won't know if the're are any ramifications for a few months, but it was one heck of a fight.

Pizz

The Hoople (9/19/02; 13:42:45MT - usagold.com msg#: 85515)
Breakdowns, breakouts
It's been a while since I've seen so many stocks, indices, and commodities sitting on crucial numbers. JPM $20, DOW 8000, NASDAQ 1200, Dollar 107, Gold $325,Oil $30 to name a few. Even the foreign indexes are eerily the same. The last few times this happened the Fed blasted the equity shorts with a surprise rate cut. Would it even matter this time? Barring such Fed shenanigans this feels set up for a monster breakdown in stocks and huge rally in PM's and commodities. Will Atlas schrug ? Will Joe Sixpack blink? The answer seems nye at hand.

Pizz (9/19/02; 13:28:02MT - usagold.com msg#: 85514)
The Coin Guy
Was watching the tape on JPM while the Dow broke 8000.

Extremely thin bid and ask prices on level II, with about a .10 average spread. but the tape tells the tale, as I watched over 250,000 shares trade between the bid and ask, and that is nothing more than the specialist swallowing the sales, cause you can bet they we'ren't buy orders.

Wondering if the ink was dry on the money. Bet the FED window has a conveyor belt attached. . . .

Pizz

P.S. Wonder if Kowloski heard the rumor that the investment club at Rikers was long TYC @ 50????? Didn't hear that he put gold up for bail. . . in a few weeks the stock and fiat might just be worth skipping over. . . .

Pizz

The CoinGuy (9/19/02; 12:55:32MT - usagold.com msg#: 85513)
Hello Pizz
Pizz,

I believe others who follow this derivatives/credit bubble mess, would agree with your assumptions.

A quote from Doug Noland seems proper:

"I think you have me confused with someone else. I think gold not only provides an excellent "store of value" in this very risky environment, but I also believe it offers a once in a lifetime risk vs. reward opportunity. The downside seems very limited, the upside could be substantial. I don't discuss the gold market that much because others know the market so much better than I and are doing an exceptional job of following developments. But, for the record, I have 35% of my net worth in bullion and would like to go to 40-45%."

I watched the Bartiroma interview with Harrison. He didn't seem to have any concrete answers to the lobbed softballs she was throwing his way. What also concerns/ed me is the artificial support JPM has been receiving on their stock price. This confirms the rumour of $20, and it's in the drink sailor(at least in my book). I took notice when we first slid off into this territory, there WAS a lot of commotion(artificial support) to get this stock stable, and moving north. Another telling sign. I'll continue to watch with interest on this one.

Perhaps another small quote from Doug:

I actually believe I have addressed these issues in my past writings, but I will jot down a few thoughts. Right now, the faltering dollar is THE critical issue. As long as the dollar remained in its protracted bull market, King Dollar kept speculative interest/forces for many "things" in check. We now have a whole new ballgame. As we are beginning to observe, a weak dollar sets in motion inflationary forces in many commodities priced in dollars.

Perhaps a primer to a (not-to-distant)future discussion?

The CoinGuy

Galearis (9/19/02; 12:01:19MT - usagold.com msg#: 85512)
Update on problem sterling
Just in, a phone contact from the Competition Bureau (they also inform me that they have changed their name):

I spent an hour and a half on their precious metals department supervisor and he categorically stated that they are going through with a thorough investigation. The contact stated that, even when they require two qualifying complaints from different sources, they are acting immediately on what I stated in my initial contacts. An apology was extended to the tardiness of response (he was on a leave of absence). The second point he wanted to make was that he expected that the investigation was going to go national � across Canada (and only starting in Ontario), and he carefully explained the procedures. I was requested to help fill in the knowledge gaps in a phone conference call involving some local investigators in the near future about what they should look for in their samplings. The purchases (samplings) are to be sent to the Canada Mint for assay. He fully expects that this initial survey will be expanded to the rest of the provinces, AND that given the findings (he does expect to find what I have found), the United States Federal Trade Commission will be informed and invited to participate in their area of jurisdiction.

When I asked him what he was going to do when he verified my findings, however, he was somewhat less forthcoming (although he may not ever have participated in a fraud of this magnitude before and the question posed a few conceptual problems fro him), but the gist of his words was that the bureau would inform and request action from within the industry. One can appreciate the quandary that something of this scale presents to the bureau. I have to say that the fellow sounded like he takes his job seriously. He (said) that he was always pressing his upper management to have regular spot checks (assays) done on gold and silver jewellery. It never happened. Maybe now it will. In fact, I would bank on this happening now. This man seemed truly concerned about this sterling problem and takes his job seriously.

He also knows (now) just how much political turmoil could come from this should his political masters consider all the ramifications of this thing in general to the precious metals markets. At this point there was a pregnant pause in the conversation....

Obviously there was a lot we discussed that I cannot put down here, but rest assured the fellow now knows a lot more about the structural fundamentals of the silver market than he did before, and did not disagree to my statement that this jewellery situation was both a systemic problem and the largest case of precious metal fraud that they had ever dealt with before. (Actually I said ANY fraud he had ever dealt with before.)

He also requested whatever (anecdotal or otherwise) evidence others may have found in Canada OR the United States. He requested that this be sent (to be held in strictest confidence) to compbureau@ic.gc.ca. "Sterling jewellery fraud" would be a good subject title. He is collecting a background file of information for the person who will be conducting the investigation for him. He will be on the watch for these. I guess I am (please) asking for help from the forum in this.

This is really happening folks!

Best regards,

G.

kasperjack (9/19/02; 11:23:30MT - usagold.com msg#: 85511)
Come Gather Round Lowlifes And Hear What They Say
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256C3900042D55?OpenDoc
Aren't you tired of them giving of our gold away?
ld - Murenbeeld & Associates, Victoria, BC
Posted: 2002/09/18 Wed 20:45 | � Miningweb 1997-2002
Wow! I had not realized just how much "hate" there is out there in gold internet-land. I think
some commentators should get a life. Why must Tim Wood be personally insulted? [I confess
this is my favourite abuse and a cartoon is being prepared around the theme - your vampire
correspondent, TW]. I guess there are some real lowlifes at the edges of the gold market � no
doubt huddled in their bomb shelters awaiting Armageddon.

ument
@@@@
Not being interested in a libel suit I'll keep my opinion to myself

Gandalf the White (9/19/02; 11:04:54MT - usagold.com msg#: 85510)
***** Happy Birthday O' Mighty Oaken Table of Yore *****
TA TA TAT TAT TAT TAAAAAAAAAAAAAAAAAAA !!! <;-)
REPOST of the announcement on SIR MK's BIG CALL TO CONTEST -- The "Happy Birthday" Essay Contest
---
MK (09/18/02; 22:11:09MT - usagold.com msg#: 85483)
. . . .What to do?. . . .What to do?. . . . .Here's the dilemma: Is now the time for a contest? With so much extraordinary energy already emanating from in and around this sturdy table? What more can be said about it that hasn't already been said. How will a contest now make a difference? Yet. . . .wait a minute. . ."The Contest" has played an important role in attracting many of the very people who have made such an important and on-going contribution to this table that they have put the concept of a posting contest on the second shelf. Do I dare intrude? I visit here time and again, day after day, week after week, month after month. . . . .Oh my. . . .Well, you get the idea my fellow knights and ladies. . . . .There is a reason for all this. There is a reason why we are all here. Isn't there?

So the Call to Contest goes out: Yes!! ---Hear ye! Hear ye! Be it known that we will have a contest calling upon your most erudite and well-honed skills. And here's the Contest Question to be answered: ----Why do I return to this exalted place? Why do I keep coming back here? Hey, I watch CNBC. I read the Wall Street Journal. Barrons'. Forbes magazine. A half-down or so newsletters. But for some reason I keep coming back here. Why? ----

In your own words, and in as many as it takes: Why is that I find this Mightly Oaken Table of Yore so important? Why do I keep coming back??

Each post must have as the SUBJECT and be headed with:
*****Happy Birthday O' Mighty Oaken Table of Yore*****

ALSO -- each poster may wish to gain EXTRA POINTS and add "An ADDENDUM" !!!
Extra bonus points will be awarded to those who post an addendum to their "Happy Birthday" entry which answers this question: "We are now at the beginning stages of the BIG BREAKOUT in gold. . .True or False." The bonus entries do not have to be long, but they have to make a solid point. Please add the bonus entry to your Birthday post and start it with $$$BIG BREAKOUT -- "TRUE" or "FALSE" $$$$ (surrounded by dollar signs) -- depending on how you see it. The bonus points will not be awarded on where you stand as much as how well you state your case.

The contest begins now, (Wednesday evening, 9/18/02) goes through our OFFICIAL Birthdate (September 21st), and ends Wednesday September 25th at 12 noon Mountain time (HIGH NOON in Denver).
Gandalf, the great wizard at this Table Round, will serve as contest master, arbiter and "answerer" of all contest related questions. Gandalf, please post this call to contest daily.

The WINNING prize will be a one ounce PURE COLD Austrian Philharmonic. The runners-up (two will be chosen) will receive a Queen Victoria British GOLDEN sovereign (which carries some scarcity value) -- a representative of the old world when gold was the primary form of international settlement. As always the prizes will go to those who best weave gold into their narrative. That is essential. (Perhaps even Slingshot can weave the Table into his final installment of the "Siege" epic!! We will count it as an entry, if he does. Ha Ha, Slingshot a challenge to your very credible story-telling skills.)

BONUS for First Time Posters !!
All first time posters will receive a one-ounce Silver Maple Leaf, but your post must be a contest entry. To receive your silver Maple Leaf you must e-mail marie@usagold.com telling her of your first time post and contest entry. We will check to make sure that your entry is truly your first post. Those found trying to circumvent the rules will be asked to send us a Silver Maple Leaf.

Good luck to all and may the best poster win!!
Let the Contest begin. . . . . .

Happy Birthday, my fellow Goldmeisters and Table members.
Thanks, all. MK
===
<;-)

Pizz (9/19/02; 10:21:28MT - usagold.com msg#: 85509)
Derivatives and Expiration
As we approach Friday Expiration, several rather extreme situations could develop, especially if the markets stay weak.

I'll use JPM as an example. Three weeks ago JPM looked somewhat solid over 25 bucks a share. The hedge funds and big boys were writing $20 puts for Sep expiration like mad.
Who would think JPM would lose 33% of it's value in three weeks. Especially after you CEO goes on the tube and says everthing is A-OK. An event like this is an example of an extreme event out on the tail of the bell curve as Pulpalva explains in his Perfect Storm Series.

Stocks with options usually tend to close out an option series pretty close to a strike price, especially if there is a lot of open interest in a specific put or call. In other words, there is a lot of pressure at times by writers of naked options to make sure the options they are short stay reasonable in price or expire worthless.

Now, with all the pressure for profits (i.e. JPM's lackluster trading profits in the third quarter) bank's, hedge funds, etc are taking more risk than ever to try to show a buck or two million. I have to think that there has been a lot of "doubling down" or at least pushing the envelope a bit. With all the press (and companies)having forcast or implied a second half recovery, not too many put option writers have had negative earnings warnings in their plans. More reasons to justify that writing naked puts were a safe bet.

Now in the past, it has been pretty common knowledge that any major move in a stock on expiration day usually reversed on Monday. The reason being that if you had a large naked put position threatening to go into the money, you buy the stock and push up the price, and Monday you sell the stock. Works in real deep markets, and at the worst you just lose a little bit.

Now what happens in thin markets, that are gapping down, and with a real negative bias? This is what can be a trigger for a black Monday, as these positions that were accumulated to support the derivatives, are unwound with few bids to support the selling.

Now, taking it one step further, if there is a PPT, or a stock cabal that uses their emence resources to support the markets, these guys accumulate a lot of stock, and they are losing overall, since the markets are all down. The combination of dervatives, and thin markets being supported by the major players, can be a real leathal combination.

Now, lets add the war retoric and middle east situation. does anyone think there might be a little foreign money out there that would like to see the US implode?

We're just talking stocks right now, but we have gold derivatives as we know, and then the big one, the bonds and interest rate derivatives.

Our situation now, IMHO, is about as bad as the Cuban Missle Crisis of the 60's. I'm giving it about a 70 - 30 chance we'll have a Friday, options expiration FED rate cut, especially if these markets get more out of hand. Just a guess, but Greenspan's done it before.

Another reason I'm concerned, is that Bush is moving just a little bit too fast for congressional approval for Iraq.

Being in gold is not a bad position to be in, and if I'm even half right, it will be the place to be for the next decade.

Pizz

goldfool (9/19/02; 10:02:43MT - usagold.com msg#: 85508)
Macroeconomics For Dummies - Greenspew ad nauseum
http://www.dailyreckoning.com/body_index.cfm
We urge readers to invest in gold - not because we know what will happen next, but because we don't. Gold rose $3.60 yesterday. J.P. Morgan, the world's largest holder of derivative contracts and one of many proxies for Greenspan's reputation, fell. The stock - which was as high as $67 when "Maestro" was on the bookstore shelves - has lost 40% of its value this year and recently dropped below $19. Yesterday, the House of Morgan disclosed that it would lose $1.4 billion from bad loans.

TownCrier (9/19/02; 09:52:51MT - usagold.com msg#: 85507)
Turning the corner when gold becomes a campaign issue...
From WGC Rhona O'Connell's London view of the market developments today:

"Comments from German Presidential candidate Edmond Stoiber, carried on Reuters this morning to the effect that he is against Bundesbank gold sales (in the context of cutting the budget deficit), have helped an already reasonably buoyant market to a renewed test of the resistance at $323-324/ounce.

"Stoiber, the Conservative candidate in this Sunday's German election, and currently running neck-and-neck with incumbent President Gerhard Schroeder, apparently last night ruled out the potential sale of gold reserves as a means of cutting the budget deficit.

"He also said that he expected growth of at least 1.5% in Europe's largest economy next year, but did not say whether he would reduce the budget deficit through cuts in spending. The German budget deficit reached 2.7% of GDP last year, almost earning an EU "rebuke". The EU budget deficit limit is 3% of GDP. He talked of raising funds through cutting spending at the Federal Labour Office, reorganising the federal budget and sales of government shares in major utilities. It was not made clear whether his dismissal of potential gold reserve sales was a refusal to sell outright, or refusal to sell with the express purpose of cutting the deficit."

Stay tuned.

sector (9/19/02; 09:45:16MT - usagold.com msg#: 85506)
@Belgian: Deutsche Bank is losing 10% of its value (price) today. Indicatif for JPM/C ?
Good Observation
Deutsche Bank, at last check, carried about $50 Billion in gold derivatives. Perhaps these guys [JPM and DB] are beginning to close their gold shorts?...Reclaiming their gold loans?

Or at least reduce them in an orderly manner. Today's pog action is running counter to past quarters when the day before an expiration would see pog smashed.

So maybe we have another "dot"...time will tell.

barnaclebob (9/19/02; 09:37:41MT - usagold.com msg#: 85505)
U.S. swap spreads pop wider on JP Morgan's blues
http://biz.yahoo.com/rf/020918/markets_swaps_1.html
NEW YORK, Sept 18 (Reuters) - Spreads on U.S. dollar
interest rate swaps widened on Wednesday as credit rating
downgrades to J.P. Morgan Chase raised new worries about credit quality at the nation's second largest banking company.
After a profit warning on Tuesday, J.P. Morgan's (NYSE:JPM - News) ratings were cut by Standard & Poor's and Fitch. Because the bank plays such a huge role in the swaps market, with more than $14 trillion of outstanding contracts according to SwapsMonitor research, spreads take a hit when worries heat up about the bank's credit quality.
But traders said the pop in spreads was not significant.
Many market players remain focused on news of Fannie Mae's
(NYSE:FNM - News) hefty need to buy duration -- either through swaps, Treasuries or mortgages -- to correct its swelling mismatch that hit an all-time month-end high in August at minus 14 months.
Some analysts estimated that Fannie Mae would have to
purchase as much as $110 billion in the equivalent of 10-year exposure to get its duration gap back within its stated target of minus six to plus six months.
"You've got to worry about Fannie," said trader at a U.S.
bank. "The view is that Fannie has to go long a lot of
duration."

Golden Bear (9/19/02; 08:12:08MT - usagold.com msg#: 85504)
The Hubris in Monetary Policy Award
posted on a neighbouring board...
by Christopher Westley

Due to some incredible competition over the last two weeks, this year's Hubris in Monetary Policy award will go to someone other than Alan Greenspan.

To be sure, it looked like Greenspan would retain his trophy after his now-notorious speech in Jackson Hole, Wyo. It was here that The Chairman pulled out the big guns by arguing that monetary policy is impotent to deflate sector- specific bubbles that lead to long-lasting recessions.

Sure, it can keep government price indices in line, and in his mind, this is the equivalent of taming inflation. But proscribing yet more fiduciary stimulus to address persisting bubbles beyond what has already been proscribed can end up damaging the economy as a whole. In such a situation, Greenspan argued, any Fed chairman's hands would be tied. The only monetary cure available would kill the patient in the process.

With an alibi such as this, we all thought that Sir Alan would retain his title. Greenspan surely knew that many economists were already discussing his recently released remarks at a 1996 Fed meeting about possible cures to the asset bubble that had then been identified.

In the subsequent years, Greenspan punted on implementing any of these cures for reasons at which we can only guess. Did they obstruct his ability to help out his friends at Long-Term Capital? Did the Monica scandal require extra liquidity to allow the Feds to shore up political support on economic grounds? Or was it simply the case that Greenspan was enjoying his run as Master of the Universe and wanted to extend it?

Who knows; but the Jackson Hole remarks were indicative of a master hubricist. We were in awe of him. Again.

That is, until 12 days later, on September 11, when New York Fed Governor William McDonough gave a little speech at Trinity Church in New York City, just a short walk away from the World Trade Center site. Governor Bill packed a one-two punch that leveled Greenspan and let the world know that there is now an aspiring Master on the block.

Bill argued that the current recession continues to linger because of excessive CEO pay, so CEOs should volunteer to cut their pay to reasonable and justifiable levels. "We must recognize that the leadership of the American economy has made a large number of American citizens, and countless more around the world, question our judgment and/or our ethics," McDonough said in his speech. The inflated levels of executive pay, in particular, require corrective action.

"It is hard to find somebody more convinced than I of the superiority of the American economic system, but I can find nothing in economic theory that justifies this development," McDonough said. Even worse (he later said), this development reflects "bad morals."

Needless to say, the engraver of the 2002 trophy was given new instructions after these remarks hit the airwaves. If Chairman Alan's remarks were brilliant, then these remarks were exquisitely so. It appeared that it was time for the Great Alan, who had outwitted three presidents and counting, to take a bow.

The reason is simple. Many who follow the economy were slowly focusing attention on Fed policies throughout the late 1990s, taking their cues from popular business writers such as The Street's Peter Eavis and CNBC's Bill Fleckenstein.

The idea was taking root that increasing the money supply beyond the point necessary to facilitate transactions confers no social benefit. While this practice may cause the economy to look good around election time, as extra liquidity finances business expansion, it soon looks bad when consumers decline to purchase the added output. After all, why should they save to purchase this output when it was facilitated with low interest rates?

So, in the midst of a recession, and with the credibility of central banking itself being called into question, what is a central banker to do? Why, blame executive pay, of course, and impugn the morality of anyone who might believe that Fed governors are a greater threat to economic stability than shareholders that make wage decisions. In so doing, McDonough realized what Greenspan hadn't: the present climate required hubris to protect the system as a whole.

The Greenspanian response is weak. It says, "Don't blame me. I never had the power to deal with this in the first place."

The McDonoughan response brings hubris to a new level, not only because it provided intellectual cover to those whose goal is to re-establish federal wage boards, but also because it says, "The recession has everything to do with greedy guys in charge of big companies. It has nothing to do with the doubling of broad monetary aggregates from 1996 to 2001. And, by the way, wouldn't I make a good Fed chairman in 2004?"

Such statements raise the award standards to heights unheard of. Bill McD., you are our new champion. Please come to the federal sewage treatment facility in Washington to claim your prize.

Buena Fe (9/19/02; 07:49:21MT - usagold.com msg#: 85503)
tiny bubbles
I find it hard to believe that "5mdow-boy" Bill Gross (Pimco) can't see that he is in a bond bubble the likes of Godzilla!

As many OTHERS have noted, the only way out of this mess is "hyperinflation", or "bond roasting", pass the barbie sauce please.

my bet ... gold to slay 335 by monday.

Waverider (9/19/02; 07:38:24MT - usagold.com msg#: 85502)
POG
I see that Kitco has now corrected the error. Nevertheless, SPOT is frisky this morning....and Pizz, you have a great day!

Pizz (9/19/02; 07:18:56MT - usagold.com msg#: 85501)
Waverider
Thanks for the update on Kitco.

After one miserable day in the trenches, a half nights sleep, a major fight with the owner, and I get up this morning, hit the computer, and am subconsciencely PRAYING for a massive spike in gold so I can tell the %$^^&*** what he can do with his job, and the first thing I see after Kitco, is your post . . . .

Just kidding. . . . .

Pizz

Belgian (9/19/02; 07:15:34MT - usagold.com msg#: 85500)
After the Iraq invasion and occupation.....
....a lot of crude oil will be cheaply available for the consumers and POO will find its equilibrum at a much lower nominal price or at the present pricelevel of a devaluated dollar ?
The main problem however is that other oil-producers (OPEC + non OPEC) shall be forced to decline their output to balance the abundant flow that will be extracted from Iraq ! They are not going to like this and more especially, Russia, second biggest producer after OPEC !
Is this their opportunity to exchange their resources for euro and leave Iraqi oil for dollars ?
Iraqi oil costs 2$ to pump it up and most other oil (Russian/Northsea/Latinam/African) is costing 3 to 6 times more ! How will Iran + Saudi Arabia react to this (supposedly) new situation ?

Hard to believe that when all the Iraqi dust has settled it will be back to business as usual.
This to illustrate that the revaluation of Gold, still has a very long way to go.

BTW : Deutsche Bank is losing 10% of its value (price) today. Indicatif for JPM/C ?

Waverider (9/19/02; 06:40:10MT - usagold.com msg#: 85499)
POG
If anyone is looking at Kitco this morning, be aware that there's an error in their posting - it seems yesterdays $3.50 increase somehow got rolled over and is included in todays "change" calculation.

Black Blade (9/19/02; 05:44:55MT - usagold.com msg#: 85498)
Euro Markets Extend Damage
http://quote.yahoo.com/m2?u

Euro markets are getting thrashed again. CAC40 goes sub 3,000 and Xetra DAX looks to follow as Euro indices bounce around 5 year lows. Looks "interesting".
- Black Blade

misetich (9/19/02; 05:30:30MT - usagold.com msg#: 85497)
a nation of one -
http://www.imf.org/external/pubs/ft/weo/2002/02/index.htm
Snip: "A tighter fiscal policy appears to diminish the likelihood of a rapid adjustment of large current account deficits," the IMF said.

FWIW here's a link to the IMF "Transcript of a Press Conference Call on the World Economic Outlook Analytic Chapters" which goes into further details than the news article

MR. BAYOUMI: The presumption of the chapter is not that current account deficits or surpluses are per se a problem. In fact, as we know from the last period of globalization, large imbalances across countries were sustained for a long time in the classical gold standard. The issue that we sort of confront is therefore not is there a deficit per se or a surplus per se a problem, but rather do we see it as being sustainable, and for the reasons that we lay out in the chapter in some detail, mainly associated with the implied path of the net foreign assets, and the experience of other countries running these kind of deficits. We do not see these as sustainable. So it's not that a deficit is always wrong. It's that in these particular circumstances we believe that these imbalances will be difficult to sustain over the medium term.

MR. ROGOFF: I just might add to that, I mean, any given level of the current account, deficit or surplus, is not an end in itself. The goal of policy is to raise growth and the welfare of citizens in the country and in the world. That said, the current account imbalances, especially when sustained current account imbalances lead to a large negative or positive net foreign assets position, there's a risk that they'll be reversed rapidly and lead to large changes in financial markets that could have broader consequences. So it's a risk to bear in mind. It's something to look at when you set policy. In the chapter we've particularly emphasized medium term fiscal policy, but it's certainly not the sole goal of policy.
.............
MR. ROGOFF: There are several things that we learn by looking at it from a global perspective. One issue which is emphasized in the chapter is that if the U.S. current account were to shrink suddenly, that it could lead to a lowering in global demand absent strong improvement in underlying medium growth in Europe and Japan, that a sudden change in the United States, it might not be possible to pick up the demand right away in Europe and Japan due to structural rigidities of those two. And we partly got that by looking at a multi-country model and looking at the global analysis. Looking at it from a global perspective, particularly important when thinking about the United States, because the United States, which is one of the [inaudible] countries we look at, is large. And the earlier examples that we have of countries running sustained current account deficits of 4 percent for 3 years and more are almost exclusively smaller countries, where they're not affecting the world interest rate when they have big shifts in their policy. When the United States has a big change, it affects world market and you have to take it into account, and that turns out to make the sustainability more problematic. I think that shouldn't be particularly surprising that when a small country like New Zealand has met external negative liabilities that are well over 60 percent, perhaps even 80 percent of GDP, but it's very small, it's not moving world market, whereas United States, when it has a number of 20 percent and it rises to 25 percent, has a much bigger impact on world market and we take those into account in our analysis. Tam Bayoumi, did you want to add to that?

MR. BAYOUMI: Well, I think the other thing that we probably gained from looking at the multinational analysis is the importance of looking at relative rather than absolute movements since they've been [inaudible]. As you know, the current accounts is parallel [inaudible] investment within countries. And there's been a tendency, particularly in the U.S., to look at development in, for example, U.S. saving on its own. But of course, a current account has two people involved. And in order to really look at what's going on, you have to really look at what's happening to one country versus another, and that's something we do. And that issue comes out with some significantly disparate looking results than if you just look at a country like the U.S. on its own, and in particular it does point to, you know, the role of investment and more recently private savings in the sense of being the driving forces for some of the imbalance.
...........
http://www.imf.org/external/np/tr/2002/tr020918.htm

and here's ANOTHER good question asked - with no answer

QUESTION: Good morning. My question is about Mexico, of course. Is Mexico in a dangerous situation about compassion from Brazil and Argentina? What can we do here in Mexico, I mean the authorities, about [inaudible] our economy while we wait for they do some recovery.

MR. ROBINSON: Well, I'm afraid that that really is a question about the conjunction. I would ask you to maybe come back on Wednesday and ask--next Wednesday and ask that question again. I don't think we would want to address it until Chapter 1 is available. I'm sorry. So let's move on to the next question.

Black Blade (9/19/02; 05:11:13MT - usagold.com msg#: 85496)
Gold May Test $324 Resistence?

Hey, who knows - with all the bad news, several earnings warnings, crumbling stock indices, no oil production increase, etc. we could just retest $330 an ounce. We are only about $7 away.

- Black Blade

Pete (9/19/02; 05:06:59MT - usagold.com msg#: 85495)
Belgian (9/19/02; 02:04:38MT - usagold.com msg#: 85490)
Great post Belgian. Chairs will be shuffled until the election. You must remember, the party comes first before our nation. Sad, sad indeed.

Black Blade (9/19/02; 04:46:53MT - usagold.com msg#: 85494)
Gold Spiking On OPEC Oil Production
http://www.kitco.com/charts/livegold.html

Gold is rising sharply on OPEC and maybe Israel bus bombing (5 dead and 40 hurt - so far). Market futures are crumbling too. Looks like a lot of "entertainment" when Wall Street opens.

- Black Blade

Black Blade (9/19/02; 04:30:21MT - usagold.com msg#: 85493)
"Scandal of the Day" - WorldCom SEC report could add $2 bln in errors
http://biz.yahoo.com/rc/020919/telecoms_worldcom_report_1.html

Snippit:

NEW YORK, Sept 19 (Reuters) - WorldCom Inc. (Other OTC:WCOEQ.PK) is preparing a further revision of its financial results that could add about $2 billion to the $7 billion in accounting problems it has already disclosed, The Wall Street Journal reported.

Black Blade: Let's see � fire accountant Arthur Andersen and then find a $2 billion oversight. Hmmm�

Black Blade (9/19/02; 04:10:25MT - usagold.com msg#: 85492)
Breaking News - Middle East

Bus Bombing in Israel. No details yet, however, rumors are that there are casualities.

OPEC keeps production cuts in place at 21.7 million bbl/day. There is up to 2 million extra bbl/day in cheating on quotas, however, only Saudi has excess capacity and Iran has little excess capacity.

- Black Blade

Spartacus (9/19/02; 03:15:41MT - usagold.com msg#: 85491)
Japan
http://www.ntrs.com/library/econ_research/daily/intl/020918.html

Victoria Marklew
"the Central Bank Throws a Hail Mary"
September 18, 2002

" The Bank of Japan (BoJ) has taken what S&P's managing director called a "shocking" step - a move that has stunned the markets, boosted (temporarily) banking sector share prices, but may backfire hideously without concomitant action from the government.
-------------------
What are we to make of this? Only recently Hayami had ruled out the BoJ's purchasing Exchange Traded Funds, and he has said in the past that buying bank shares would hurt the central bank's credibility and be taken as overt market manipulation. Today, he reiterated that the plan was not a banking sector bailout, and it certainly does not seem comprehensive enough to qualify as such. Given that purchases will be restricted and only made for a limited time, it also does not seem to be a bid to trigger inflation. Hayami said the move is not aimed at boosting share prices, but what else could it be? We know that, with the half-year book closing approaching (September 30) and the Nikkei plumbing 19-year lows, the banks are carrying large losses on their shareholdings. Is the BoJ, fearful of the government's inability to act, taking this step as a desperate "Hail Mary" to prevent a systemic collapse after September 30?

We have argued for a long time that, without a comprehensive plan of public fund injections and wholesale reform, the banking sector will remain paralyzed under its non-performing loan (NPL) burden, lending will continue to shrink, and deflation will continue to seriously cripple the economy. The BoJ has taken a gamble that this plan will place a floor under stock prices and restore some investor confidence in the short term, while allowing the banks to reallocate at least some of their funds to deal with their NPLs. However, the plan will not boost the banks' capital bases enough to really make a difference to their dud loan levels, given that the recession is creating new NPLs faster than they can write off the old ones. More to the point, it does not require the banks to restructure in any way.
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One more thought: the government created the Banks' Shareholdings Purchasing Corp (BSPC) earlier this year, a state-backed stock buying body, to help banks unload unwanted shares. But the BSPC has had little impact, apparently because the rules on what shares it can buy, and how, have kept the banks away. Although the details of the BoJ's plan are lacking, is there any reason to believe that the central bank would be more willing to buy poorer quality stocks than the BSPC?

In sum, the ball has been thrown firmly back into the government's court. And, unless the government picks up this ball and runs with it - i.e., accelerates its mediocre reform efforts - the resultant damage to the BoJ's credibility could trigger a stock market collapse. Disappointment with the government's response could set in quickly. It is expected to come out with a set of emergency economic steps focusing on tax and banking sector reforms tomorrow."

Belgian (9/19/02; 02:04:38MT - usagold.com msg#: 85490)
To the globe's Central Bankers.....
Bravo for having done such a great job of containing the currency-depreciation ! But you have reached the limits at the point where it has become impossible for any economic activity to produce sustanied profits anymore !

NO PROFITS = NO ECONOMY !

You, Central Bankers, will all be forced to inflate > HYPERINFLATE, as to restore profitability.

It is the corporate world that is panicking and not the consumer, for the time being. It is (was) the globe's consumer who lived in Alice's land for the past decades.
You will be forced, by the events, to disappoint the consumer with a mega depreciation of your confetti, so eagerly fostered.

INFLATE / DEVALUE and STOP reshuffling the chairs on the deck ! Open the confetti floods and all engines will restart. You have no other choice left, dearest central bankers. Amen.

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