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ARCHIVED DISCUSSION FROM 12/19/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Topaz (12/19/06; 23:57:29MT - usagold.com msg#: 150364) PoG. http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st= Having watched this now for several years, it has occurred to me that "no-one" knows how to trade Gold at this level ...hence the erratic price behaviour inclined to the downside.She's beaconless in a sea of paper, and could, at any time do wonders. USAGOLD Daily Market Report (12/19/06; 20:54:26MT - usagold.com msg#: 150363) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.December 19 (from MarketWatch) -- Gold futures closed with a more than $7-an-ounce gain Tuesday, marking their first winning session in four. "Today's surprisingly high inflation figures are spurring the metal markets higher as the U.S. dollar drops on the news," said Peter Spina, chief investment strategist at GoldSeek."It is not hard to get into the market which has corrected back to the low $600s; bargain hunters were delighted by the sell off," he said.The February contract rose $7.50 to close at $625.40 on the New York Mercantile Exchange. The contract, which closed Monday under $618 at a seven-week low, had tallied a loss of $14.50 over the past three sessions.The dollar fell against the euro Tuesday after a key survey of Germany's business climate rose to its highest level in 16 years, boosting expectations interest rates in the eurozone would climb further next year.The weakness allowed precious metals to rebound from Monday's lows -- levels gold and silver prices haven't seen since the end of October. The decline in the dollar comes even after U.S. government reports showed producer prices soared in November, rising at the fastest pace in decades, while construction of new homes rebounded last month.Producer prices rose much more than expected in November, as the core producer price index rose by the most since July 1980, the Labor Department said.The November producer price index climbed by 2%, the biggest rise since November 1974, according to statistics.Meanwhile, construction on new homes rebounded in November, rising 6.7% after a whopping 14% drop in October, the Commerce Department said.Building permits, meanwhile, fell 3% to a fresh nine-year low.---(see url for full news, 24-hr newswire)--- Chris Powell (12/19/06; 20:29:34MT - usagold.com msg#: 150362) These people will be TOASTING the IMF http://news.yahoo.com/s/ap/20061219/ap_on_bi_ge/wall_street_bonuses Wall Street BonusesFlood NYC's EconomyBy Adam GoldmanAssociated PressTuesday, December 19, 2006When Michael Aaron learned that Wall Street investment banks were going to be shelling out record bonuses this holiday season, the savvy wine merchant uncorked his own plan to make serious dough. He paid for a double-page advertisement in The New York Times, boasting a rare bottle of 1995 Dom Perignon. The price tag -- $14,950."We thought we'd put this temptation out there," said Aaron, chairman of Sherry-Lehmann wine store on Madison Avenue.The $15,000 bottle of bubbly is just one example of how record Wall Street bonuses this year can trickle through New York City's economy. People are buying multimillion-dollar apartments. They are driving $40,000 BMWs out of the showroom.A report released Tuesday by the state comptroller said Wall Street is expected to pay out $23.9 billion in bonuses, shattering last year's record by 17 percent.The impact of such bonuses on the New York economy is profound.Bonuses are expected to generate $1.6 billion in tax revenues for New York state and another $500 million for New York City. For every job created on Wall Street, three other jobs are created in the city and suburbs."Wall Street jobs create jobs," said Ken Bleiwas, deputy comptroller. "Why? Because they are pumping money into the economy. They're going out restaurants, they are purchasing all kinds of consumer goods."The most jaw-dropping bonuses are being doled out by Goldman Sachs Group Inc., the world's largest investment bank. The company reported a staggering profit last week of $9.4 billion and said it was dedicating $16.5 billion for salaries, bonuses and benefits at the end of the year.The upper echelon of Goldman Sachs -- called the "golden 25" -- could get at least $25 million each.Lehman Brothers Holdings Inc. and Bear Stearns Cos. said they would pay out about $12 billion in compensation -- more than $300,000 per employee.Morgan Stanley Inc., the second-largest U.S. investment house, gave chief executive John Mack $40 million in stock and options for 2006, reflecting one of the largest bonuses awarded to a Wall Street CEO.The bonus numbers are especially mind-boggling when compared with the salaries of average New Yorkers.The comptroller estimated that bonuses will average $137,580 in 2006, although most Wall Streeters make much more than that. Excluding people working on Wall Street, the average New Yorker earned $56,634 in 2005. Wall Street accounts for less than 5 percent of all the jobs in the city but more than 20 percent of the wages."When Wall Street does well, New York City and New York state do well," Comptroller Alan Hevesi said. "Wall Street bonuses are spent in the city and in surrounding suburbs on entertainment, real estate, automobiles, and other consumer goods, all of which generates jobs and tax revenues."Real estate is a big beneficiary of bonuses, as plenty of bankers look to upgrade their digs or buy their first pad."A lot of my Wall Streeters have been pounding the pavement anticipating the bonuses," said Louise Phillips Forbes of Halstead Property. "They're prepared to pay a tremendous amount of money."Earlier this month, Forbes said, she sold 11 apartments. More than half of those buyers worked on Wall Street. Forbes says she has about 200 apartments for sale ranging from $500,000 to $6 million. Many of those, she said, will go to bankers.Forbes said the bonuses heat up the market in another way. Those who do not work on the Street try to close on new homes before those beefy bonuses arrive. "People started buying before bonuses were even announced so they wouldn't compete with Wall Streeters," Forbes said. Gregory J. Heym, chief economist for Brown Harris Stevens, said it's difficult to say whether bonuses cause real eastate prices to spike in certain neighborhoods. "I think a lot of it is going to get masked in the fact that the sales won't close for a long time because they're in new developments," he said. "That sort of makes it hard to attribute any increase to bonuses." Jeff Falk, president of BMW of Manhattan, has an advantage over real estate brokers. They can't bring their wares to doorstep of the investment and banking community, but he can. In July 2005 BMW of Manhattan opened a second showroom on Wall Street. He said his company plans for bonuses, ensuring it has enough inventory to satisfy any urges to buy a sleek BMW. Falk said he's running an ad that says: "My bonus is faster than your bonus." And you can't forget that Wall Street essential -- the fancy suit. "It definitely means business," said Phil Kornblatt, director of retail for Hickey Freeman, a maker of fine suits that are popular on Wall Street and routinely cost $1,500. "We noticed a big increase in sales, and I believe most of it is due to the bonuses." Charles de Rancher, 24, works in New York for Bayern LB, a German financial institution. The conservative Frenchman says he has no intention of running out and buying a car or taking a trip to Las Vegas. Like many young financial whizzes, Rancher is going to invest his money in a safe place, one that promises a decent return over the long haul. "I'm sorry; I'm a pragmatic guy," he said. "The bonus goes to repayment of the principal on my new mortgage." So far nobody has snapped up Aaron's "Methuselah," a 6-liter bottle of champagne. But he's hoping. Hoping some Wall Street executive with multimillion-dollar bonus buys it for a New Year's party, making it the most expensive bottle of any wine he's ever sold. "It would be one hell of a New Year's party," Aaron said. And one heck of a bonus for Aaron. Chris Powell (12/19/06; 19:07:16MT - usagold.com msg#: 150361) Where would gold be without last week's 410 million in ECB sales? htttp://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20061219%5cACQDJON200612190924DOWJONESDJONLINE000354.htm& ECB Gold Reserve-410 Million,Forex +200 MillionIn Week to Dec. 15 By Saadia HashmyDow Jones NewswiresTuesday, December 19, 2006LONDON -- The Eurosystem's reserves of gold and gold receivables fell 410 million to 174.056 billion in the week ended Dec. 15, the European Central Bank said Tuesday.The Eurosystem's reserves of net foreign-currency increased 200 million to 152.8 billion during the period.The ECB said cash in circulation rose 3.7 billion to 613.9 billion.Meanwhile, liabilities to the general government fell 20.7 billion to 44.3 billion.The Eurosystem consists of the Frankfurt-based ECB and the 12 euro-zone national central banks. Chris Powell (12/19/06; 18:23:45MT - usagold.com msg#: 150360) Brunei Times takes note of GATA and FAME http://www.bruneitimes.com.bn/section/opinion/19Dec2006-3.php The Dollar Has Fallen; When Is Gold Dinar Coming?By Dzikrullah W. PramudyaThe Brunei Times (Brunei Darussalam)Tuesday, December 19, 2006The veteran samurai of capitalism has acknowledged that his sword is no longer sharp enough to rule the world. Last week former US Federal Reserve Chairman Alan Greenspan said he expected the dollar to stay weak for the next few years and will continue to drift down, weighed by the US balance of payments deficit."I expect that the dollar will continue to drift downwards until there will be a change in the US balance of payments," Greenspan told a business conference via video-link from the United States to Israel. He said markets were so sophisticated it was very difficult to forecast the short term direction of the dollar.Greenspan also noticed that OPEC nations were switching their reserves out of dollars and into euro and yen. "It is imprudent to hold everything in one currency," he said, adding that at some point the dollar will be moving lower. What Greenspan failed to acknowledge was, in fact, that for such a long time it had been an imprudent act to hold ANYTHING in any conventional currency, any fiat money -- which is the paper money that is made legal and valued by the law. Dollar, euro, franc, mark, pound sterling, rupee, ringgit, peso, rupiah, bath -- none are backed by a real value. Fiat money has no intrinsic value, as opposed to commodity money such as gold dinar. If tomorrow, for any reason, the US government declares its intention to devalue US$100 notes into US$10, then billions of people would not be able to do anything but submit and accept the reality that in the next 24 hours they would be much poorer. No such threat with regard to gold dinar. Even if all governments under the sun declare that gold is valueless, not many people would even blink. Gold is gold, and people will always appreciate it as something highly precious.The value of a 22-carrat gold dinar coin during the time of the Prophet Muhammad (peace be upon him) more than 1,400 years ago was exactly the same with its value today. Burn a piece of gold or melt it, its value would remain. Try to burn a bagful of US dollar notes and use the charred remnants to buy a plate of rice. A burnt piece of fiat money is useless. Worse, you do not even need to burn fiat money to render it useless. All you need to do is save it in a bank and never touch it; after several years the value of your money would certainly drop. In fact, the dollar value has kept sliding downwards against gold since 1970s until today.Many people think that it is the nature of money and that inflation is to blame. But pressure groups in the US such as FAME (Foundation for the Advancement of Monetary Education) and GATA (Gold Anti-Trust Action Committee) have different thoughts. They are speaking out against the fiat money-based monetary system. "Because of material misrepresentations and nondisclosure regarding our fiat dollar, it is prima facie fraudulent," says Lawrence Parks, executive director of FAME.Both organisations have long pursued a congressional reform in the monetary system. According to the FAME fact sheet, Congress has improperly delegated to the US banking system a power Congress does not have under the US Constitution: the power to create legal-tender-irredeemable-paper-ticket/electronic-fiat-token money out of nothing.Since 1946, on a base of about US$150 billion, the U.S. banking system has created US$9.4 trillion up to 2005. About US$ 700 billion was created by the Federal Reserve, and the balance, about US$8.7 trillion, was created by private companies, banks. "Why should private companies be empowered to create money?" asks Parks.We will let the Americans respond to the confusion that has influenced the world economy through their fiat money system. This article will focus on a solution -- namely the commodity money. In this case, the gold dinar currency is a solution.Many people in Southeast Asia would usually see the gold dinar issue as political, launched in 2003 by then-Malaysian Prime Minister Mahathir Mohammad. In fact, Mahathir had been responding to the issue a long time after it was first raised by many Muslims. Mahathir said Malaysia would take the initiative to overhaul the international financial system by establishing the gold dinar as an alternative currency. He criticised the current financial system as one that that was "skewed toward rich countries and speculators." He also stated that Malaysia would exert efforts to use the gold dinar for its trade with Iran for starters. If the initiative proved to be successful, Malaysia would extend it to cover 32 countries having bilateral payment arrangements with Malaysia.Now the dollar has fallen. Why hasn't the gold dinar emerged yet, the way Mahathir and many other people have wished?An answer came from the Jakarta-based Dinar Club president, Muhaimin Iqbal, who is also CEO of the oldest insurance company in Indonesia. Iqbal said it would be very difficult for the gold dinar to establish itself as an alternative currency without the support from sharia or Islamic banking. He said, "The only institution that can facilitate modern payment, transfer of the dinar, etc., is the sharia bank." He pointed out how opening a gold dinar account would benefit the sharia bank as it protects people who save their gold dinar from interest (usury, riba). The important element that is still missing, said Iqbal, is the "niyat" or the political will of sharia banking and governments.Iqbal specifically suggested that the wisest investment step for Bruneians, following the fall of the dollar (which will continue to fall, according to Greenspan's prediction), would be to keep their wealth in gold dinar. An alternative for the dinar currency, Iqbal said, would be to have pure gold bullion.Iqbal said, however, that the gold dinar is not even the ultimate aim of an economic system. Wealthy people, especially if they are Muslim, should not let their wealth sit idle in the banks for a long time. It would still be better to invest in the real sector, or distribute it as "infaq" or "sadaqa" in the path of Allah, as this would be the best investment indeed. In the name of justice, Islam has forbidden the circulation of wealth only among the wealthy. This would be the best solution, indeed, for a world beset by chaotic financial systems.-----------The writer is managing editor of ISLAMIA, a journal for Islamic thought and civilisation, published in Jakarta, Indonesia. Chris Powell (12/19/06; 17:58:02MT - usagold.com msg#: 150359) Let them tax cake: IMF tells Zambia to put VAT on food http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-12-19T143724Z_01_BAN952623_RTRIDST_0_OZABS-ZAMBIA-ECONOMY-IMF-20061219.XML IMF Says Zambia Should Increase Taxes on Copper MinesBy Shapi ShacindaReutersTuesday, December 19, 2006LUSAKA, Zambia -- The IMF has suggested Zambia raise taxes on copper mines and reintroduce taxes on food and other agricultural products to plug holes in its government budget, a document by an IMF mission has indicated.Apart from raising taxes paid by copper mines, Zambia's main economic lifeblood, the International Monetary Fund said President Levy Mwanawasa's government needed to ditch its promises of tax relief and consider a wide range of new taxes to keep government coffers full.A document containing the IMF proposals seen by Reuters on Tuesday said Zambia should introduce VAT on food and other agricultural products, domestic transportation, water and sewage services, magazines, newspapers and books in 2007.Zambia's VAT is pegged at 17.5 percent."Although Zambia has a modern and well-designed tax system, it nevertheless has several weaknesses," the IMF document said.The Fund said tax revenue had declined to 17 percent of gross domestic product (GDP) in 2005 from 18.4 percent of GDP in 1996, mostly due to VAT exemptions and tax fee zones.The Treasury was not immediately available for comment.Chileshe Mulenga, the head of the Institute for Economic and Social Research, a Lusaka think-tank, said Mwanawasa would be facing "political suicide" if he raised taxes after a tough presidential campaign in September that saw his government attacked for failing to care for Zambia's poor majority."The national consensus is that taxes must come down and this was exhibited by the urban centres which did not vote for the ruling party during the elections. It is not politically tenable and is unrealistic," Mulenga said.The IMF said company income tax rates, which vary between 33 percent and 35 percent, distorted economic decisions and misallocated resources because they differed by sector.The Fund proposed that existing copper mines should pay 25 percent company tax while the new mines should pay 30 percent.The mines, which account for about 65 percent of Zambia's total export revenues, have paid no corporate tax since the early 2000s when Zambia was actively seeking foreign investment in the sector after a sharp decline in world copper prices.Major foreign investors in Zambia's copper mines include London-listed Vedanta, Canada's First Quantum Minerals and Australia's Equinox Minerals Ltd.Finance Minister Ng'andu Magande told Reuters in October that the government planned to raise mineral royalty tax to 2.5 percent from 0.6 percent in the next budget due to be presented to parliament in January.The Fund also proposed eliminating a tax break on hotel accommodation in Zambia's tourism city Livingstone at Victoria Falls, an incentive which has helped to raise foreign tourist arrivals to more than 600,000 in 2005 from just about 100,000 five years ago.The document showed that the Fund also wanted Zambia to introduce 25 percent customs duty on imported raw materials for building products and to raise excise duty on imported beer to 85 percent from 70 percent. Chris Powell (12/19/06; 17:49:29MT - usagold.com msg#: 150358) No country manipulates its currency, Bush tells Congress http://news.yahoo.com/s/ap/20061219/ap_on_bi_ge/china_currency China Isn't a Currency Manipulator, Report SaysBy Martin CrutsingerAssociated PressTuesday, December 19, 2006The Bush administration said Tuesday that China does not meet the technical requirements of a country that is manipulating its currency to gain unfair trade advantages.The administration did say Tuesday that "more flexibility in China's exchange rate will help it achieve more balanced growth" and promote a number of other outcomes that would be economically beneficial.But in the report it is required to deliver to Congress every six months, the administration said that no country met the "technical requirements for designation" as a currency manipulator.Such a designation could trigger negotiations that could ultimately lead to trade sanctions.The new report was released four days after a Cabinet delegation led by Treasury Secretary Henry Paulson concluded high-level talks in Beijing aimed at resolving the root causes of America's huge and growing trade deficit with China.The report did not please China's harshest critics in Congress."The administration continues to use technical and legalistic dodges to avoid saying what everyone knows to be true -- the Chinese manipulate their currency. It's as plain as the nose on your face," Sens. Chuck Schumer, D-N.Y., and Lindsey Graham, R-S.C., said in a joint statement."If the administration still won't call China a manipulator, how can we ever expect them to get China to play fair?" they asked.Schumer and Graham were the lead sponsors of legislation last year that would have imposed 27.5 percent penalty tariffs on all Chinese imports if China did not move more quickly to allow its currency to rise in value against the dollar.The administration opposed the legislation on the grounds that it would raise the price of Chinese imports to American consumers.Sen. Max Baucus (news, bio, voting record), D-Mont., said he believed the requirement for a report every six months had outlived its usefulness and he planned to pursue legislation that would mandate a different approach in the new Congress.Baucus, who next year will head the Senate Finance Committee, which has jurisdiction over trade, has proposed legislation that would offer milder sanctions against countries with "misaligned" currencies.America's trade deficit with China is expected to easily surpass last year's $202 billion record, the highest trade gap the United States ever recorded with a single country.The administration is under heavy political pressure to do something about America's record trade deficits, which critics charge have been a major factor in the loss of nearly 3 million manufacturing jobs since Bush took office in 2001.No country has been cited as a currency manipulator in the Treasury Department report since China was cited in 1994 by the Clinton administration.While the Bush administration in the past has hinted that it was getting close to naming China, the new report seemed to take a more muted tone in its criticism in keeping with Paulson's efforts to lessen outward pressure on Chinese officials in hopes of producing better results.The latest report, which was delivered to Congress two months late, was released without a public briefing in contrast to the spring report in which then-Treasury Secretary John Snow told reporters that the administration was "extremely dissatisfied with the slow and disappointing pace of reform of the Chinese currency system."Paulson did not comment on the new report, which contained milder criticism of China than Snow's remarks last May. "China's economy needs a more balanced pattern of growth that is more consumption-based with a flexible exchange rate regime and a modernized financial sector," the new report stated. The report also cited the goals of the newly launched "Strategic Economic Dialogue," which is designed to be a two-year effort to resolve some of the most contentious economic issues between the two countries through twice-a-year high-level meetings. The report said the goals of the dialogue were to help China achieve balanced growth without large trade imbalances by pursuing exchange rate flexibility, protection of intellectual property rights, boosting domestic consumption and opening up China's service sector to participation by U.S. and other foreign firms. "China's currency policy is a core issue in the China-United States economic relationship," the currency report stated. If the administration had deemed China a currency manipulator, that would have triggered talks between the two countries. China also might have faced trade sanctions but first the United States would have had to win a case on the issue before the World Trade Organization. American manufacturers contend China undervalues its currency by as much as 40 percent against the dollar, which makes Chinese goods cheaper for American consumers and American goods more expensive in China. Goldilox (12/19/06; 15:32:00MT - usagold.com msg#: 150357) Inflation's Still around http://urbansurvival.com/week.htm snip:New figures out from the government seem to be showing that inflation is far from dead as prices of finished goods at the producer level jumped dramatically:"The Producer Price Index for Finished Goods advanced 2.0 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This gain followed declines of 1.6 percent in October and 1.3 percent in September. The index for finished goods other than foods and energy rose 1.3 percent in November compared with a 0.9-percent decrease in the previous month. At the earlier stages of processing, prices for intermediate goods moved up 0.7 percent after falling 1.1 percent in the prior month, and the crude goods index increased 15.7 percent following a 10.5-percent decline in October. "For those who were cheer-leading a Fed rate cut, the 2% rise in total finished goods (led by a 6.1% increase in energy prices) should serve as a reality check. When (now hidden) M-3 is going up at about 10% a year (on a reconstructed basis), what in heaven's name do you expect prices to do? Thoreauly (12/19/06; 14:46:48MT - usagold.com msg#: 150356) From the dollar to the amero I would seriously be interested in others' thoughts about this, however early in the conversation it might be (or not). That is, assuming it could only happen via government edict under a state of emergency that created the proposed North American Union:1) How exactly would the amero replace the $US, the $CAN, and the peso (how exactly did the euro replace its predecessor?), and 2) Can the amero really be anything else but a smokescreen for a massive currency devaluation to bail out a bankrupt US government and rescue its welfare Ponzi with a flood of newly "naturalized" Mexican workers? mikal (12/19/06; 14:26:08MT - usagold.com msg#: 150355) @Lackluster Interesting thoughts. Maybe revaluation is getting a head start. Lackluster (12/19/06; 13:34:48MT - usagold.com msg#: 150354) @ Mikal I was thinking maybe deflation? mikal (12/19/06; 13:26:27MT - usagold.com msg#: 150353) @Lackluster Amero Standard Compliant? Lackluster (12/19/06; 12:49:56MT - usagold.com msg#: 150352) First Spouse Coins http://money.cnn.com/2006/12/19/lifestyle/coins/index.htm?cnn=yes How come the First Lady coins have a lower denomination than a 1/2 ounce Gold Eagle?$10 vs $25 Federal_Reserves (12/19/06; 12:10:53MT - usagold.com msg#: 150351) The LongView ....he he he he LONGVIEW, Texas (Reuters) - U.S. inflation pressures have stabilized but are still too high and may warrant further interest rate hikes to bring them back down, Dallas Federal Reserve Bank President Richard Fisher said on Tuesday."I would have to say that the risk of unacceptably high inflation still outweighs the risk of substandard economic growth," said Fisher, who is not a voting member of the Fed's policy-setting committee this year."On the inflation front, the good news is inflationary pressures appear to have reached a stasis, despite the labor shortages in certain sectors," he said."The bad news is that the stasis is at too high a level for party poopers like me who will have no choice but to advocate tightening monetary policy further if inflation does not ratchet downward," he said. mikal (12/19/06; 12:09:22MT - usagold.com msg#: 150350) @Goldilox http://times.hankooki.com/lpage/biz/200612/kt2006121917590111890.htm OINK!Gold Marketing in Full Swing By Na Jeong-ju, Staff ReporterKorea Times | 12-19-2006 17:59Excerpt: "Open new accounts at banks and get gold.Banks are presenting gold to a select few lucky customers to mark the ``Year of the Golden Pig (a symbol of good fortune) next year that comes around every 60 years on the lunar calendar.Demand for gold is also increasing as more people are trying to present gold to relatives and friends to wish for their good luck.``In recent months, the price of gold has surged as the global economy is exposed to more uncertainties amid a weaker dollar and high oil prices, a Shinhan Bank official said. ``In some Asian countries, gold sales are heating up because of the belief that gold will bring special luck next year.To meet the growing demand for gold, Shinhan has launched some specialized accounts, at which customers can save gold, instead of money. For the first 15 days of this month, the accounts drew 70 billion won of new savings, surpassing the full-month opening of accounts worth 68.5 billion won in November.When economic uncertainties grow, demand for gold, seen as safer than other investment items, tends to increase. Next year, people have one more reason to keep gold, the official said." Goldilox (12/19/06; 11:54:56MT - usagold.com msg#: 150349) Year of the "Golden Pig" @ mikal,Suuu-WEEEE! Here, little piggie! mikal (12/19/06; 11:12:22MT - usagold.com msg#: 150348) Golden piggybanks among giveaways http://news.mk.co.kr/newsReadEnglish.php?sc=30800004&cm=Company&year=2006&no=552387&selFlag=sc&relatedcode=&wonNo=&sID=308 Banks Busy with 'Gold Marketing' Dong-eun Lee / CJB - December 19 | Snippits:"Greeting the upcoming "Year of the Pig" in 2007, domestic banks are enthusiastically unfolding "gold marketing" strategies, while customers are busy buying up gold for their financial portfolios with the New Year just ahead.According to the banking industry on Dec. 19, Shinhan Bank was able to sell 69.9 billion won worth of its "Gold Riche" by Dec. 15, a product that deposits gold in the bank account. This figure has already surpassed November's monthly total sales of 68.5 billion won...Goo Hyun-su of Shinhan Bank's Product Development Division stated, "With the price of gold rising slightly due to the recent weakening dollar, interest in gold has increased. Moreover, the preference for gold jumped with the next year being the year of the golden pig."Banks are currently promoting various gold-related events, offering gold for free or at discounted prices to customers who subscribe to savings or installed-savings products.Meanwhile, Industrial Bank of Korea is offering a 0.5 percent discount for a gold bar to the first 60 subscribers of its "2007 New Year's Resolution Savings" product.The bank is to also present golden piggybanks to a total of 25,000 customers." Ag-geek (12/19/06; 11:01:29MT - usagold.com msg#: 150347) Look at First Ladies http://money.cnn.com/2006/12/19/lifestyle/coins/index.htm?cnn=yes Nice look at the First Ladies series coins. Druid (12/19/06; 09:14:07MT - usagold.com msg#: 150346) Thailand Lifts Investment Controls http://biz.yahoo.com/ap/061219/thailand_markets.html?.v=19 "Tuesday December 19, 9:57 am ET By Michael Casey, Associated Press Writer Thai Government Lifts Controls on Foreign Investment After Market Plunges 15 Percent BANGKOK, Thailand (AP) -- The Thai government said it would lift controls on foreign investment in stocks after the market plunged nearly 15 percent on Tuesday, rattling regional bourses amid worries about a repeat of the 1997 Asian financial crisis.Finance Minister Pridiyathorn Devakula said that the controls -- announced just a day earlier -- would remain on foreign investments in bonds and commercial paper as part of central bank's measures to stem the surge in the Thai baht, which had risen to a nine-year high versus the dollar on Monday.Investors dumped stocks in Hong Kong, India, Indonesia, Malaysia, South Korea and the Philippines amid contagion concerns that the plunge might to spread through the region and trigger the kind of slump that enveloped Asia nearly ten years ago.The Stock Exchange of Thailand's benchmark SET Index tumbled 14.8 percent to close at 622.14, after plunging as much as 19.5 percent earlier.It was the market's biggest one-day drop ever, and brought the benchmark index to its lowest since October 2004. The hardest hit sectors were banking, energy and telecommunications.The plunge came after the Bank of Thailand late Monday announced its toughest measures yet to clamp down on speculative inflows that have lifted the Thai currency, the baht, to a nine-year high of 35.09 to the dollar.The measures said that starting Tuesday, all banks were required to hold in reserve for one year 30 percent of capital inflows that aren't trade- or services-related, or repatriation of Thai residents' investments abroad. Also, foreign investors must pay a 10 percent penalty unless they keep funds in the country for a year.Effectively, the central bank's new rules meant that if a foreign investor allocated the equivalent of 100 million baht to the Thai bond market, the investor could only buy 70 million baht of bonds, while the remainder would be withheld by the central bank, earning no interest."Druid: Oops. It must have been a real time experiment to see what would happen. mikal (12/19/06; 09:06:27MT - usagold.com msg#: 150345) Market musings http://www.foxnews.com/story/0,2933,237434,00.html Examining an 'Unnatural' Market - Herb GreenbergMarketwatch | December 19, 2006 Druid (12/19/06; 08:51:19MT - usagold.com msg#: 150344) Thailand triggers another Asian contagion http://www.atimes.com/atimes/Southeast_Asia/HL20Ae02.html "Thailand triggers another Asian contagionBy David Fullbrook BANGKOK - After months of playing down a fast-appreciating baht, Thailand's central bank lashed out against speculators on Monday by introducing capital controls. These caused the currency to dip slightly, but had the apparently unintended consequence of sending stocks crashing in the biggest single-day drop in the Thai bourse's 31-year history. Reminiscent of the "Asian contagion" triggered by Thailand in 1997 and which became a full-blown Asian financial crisis, otherAsian stock indices reacted to the Thai news with sharp falls on Tuesday. The Bombay Stock Exchange's Sensitive Index dropped 2.5% and Indonesia's Jakarta Composite Index lost 2.9%. Malaysia's Kuala Lumpur Composite Index fell 2% and the Karachi Stock Exchange 100 Index was off 2.8%. Singapore was also down, by about 1%. "There is a general question about who might be next in following Thailand's move and so people are focusing on, could it be the Philippines, Malaysia, perhaps Korea?" Adrian Mowat, JPMorgan Chase & Co's regional equities strategist in Hong Kong, was quoted by Bloomberg as saying. Thailand's central bank governor Tarisa Watanagase announced on Monday that foreign investors would have to lock up 30% of foreign-exchange deposits for a one-year period. The new rules affect all sums over US$20,000 that are not linked to trade or foreign direct investment, and investors who wish to repatriate their money within a year will face a stiff financial penalty. Thailand's dramatic move raises hard questions about the new military-appointed government's economic stewardship. It has given rise to speculation that the controls may have been imposed preemptively to temper the impact of bad economic news ahead. Some analysts are concerned that recently ousted prime minister Thaksin Shinawatra may have hidden old financial problems or accumulated new ones off balance sheet, which the new government will need to deal with publicly. It is probable, though, that the government has reacted to growing political pressure from exporters and the farming sector in particular to stem the rise of the baht, lending credence to the theory in some quarters that the Bank of Thailand's move was not independent of government pressure. The baht slipped back on Tuesday from a nine-year high of 35.12 against the US dollar, while stocks fell more than 11.76%, or 85.89 points, prompting stock-exchange officials to ask the central bank to reconsider the move. Stock-market analysts consider a single-day fall of 10% a full-blown crash. Whatever the motivation and whoever was behind the central bank's action, it appears to be an overreaction to the appreciation of the baht, which had gained more than 19% against the greenback since January, making it one of Asia's best-performing currencies this year."Druid: It will be interesting to see how this event plays out. Keep buying shiny to ward off these types of stressful unpredictable events. Goldilox (12/19/06; 08:45:17MT - usagold.com msg#: 150343) US Dollar http://www.netdania.com/QuoteList.asp The Dollar and Yen are getting hammered in unison today, specifcally starting in the London market.Quite a number of FOREX traders would sure rather have euros this morning. mikal (12/19/06; 08:39:00MT - usagold.com msg#: 150342) Trouble with the "tigers"? http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pesek&sid=agrKSFDgCHDo Why 2007 Is A Make-Or-Break Year For China, AsiaWilliam Pesek - Bloomberg | Dec 19 2006 mikal (12/19/06; 08:02:44MT - usagold.com msg#: 150341) @Paper Avalanche They must have downsized it using the wrong "imputations". Let's see what happens with the coming hedonic revisor... Paper Avalanche (12/19/06; 06:49:44MT - usagold.com msg#: 150340) Somebody forgot to apply the hedonic deflator.... http://news.yahoo.com/s/ap/20061219/ap_on_bi_go_ec_fi/economy snip"WASHINGTON - Inflation at the wholesale level surged by the largest amount in more than three decades in November, reflecting higher prices for gasoline and a host of other items. The Producer Price Index, which measures inflation pressures before they reach the consumer, was up 2 percent last month, the biggest advance since a similar increase in November 1974, the Labor Department reported Tuesday.Economists had been expecting a rebound in wholesale prices following two months of big declines. However, the 2 percent jump was four times bigger than the 0.5 percent increase they had forecast. Even excluding volatile energy and food prices, core inflation posted a 1.3 percent advance, the biggest jump in 26 years.end snip Knallgold (12/19/06; 06:16:51MT - usagold.com msg#: 150339) Chinese $ dump? http://www.freemarketnews.com/Analysis/134/6593/high.asp?wid=134&nid=6593 CHINA DOLLAR DUMP? TODAY'S HIGH ALERTMonday, December 18, 2006 A recent report circulating through the Net, "China To Dump One Trillion In US Reserves" deals with the outcome of the visit of the Bush Administration's "A team" to China this past week. According to an article at HalTurnerShow.com, the Chinese have told Bush administration officials they will not "sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large."The article adds, "China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse "Well, this may be the case. As this article is scheduled for a Monday post, we will all know at the same time. But still, let us take a deep breath amidst the rumors of an impending dollar debacle and examine the reality of the Chinese position. Here are the reasons, according to the article, that the Chinese are ready to dump the dollar "fast and large."1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.2) The U.S. dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 billion simply by holding U.S. dollars in its reserves. 3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.Again, the article: "For these reasons China has decided to implement an aggressive sell-off of U.S. dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.' "What would be the implications of such a sell-off? "This would cause a worldwide sell-off of dollars, create almost immediate hyper-inflation' in the US and also impact world markets at a level "worse than the Great Depression of 1929." Other OpinionsYet, there are other opinions that do not exactly concur with the above. Here we have a recent article by Reuters' Chris Buckley with the headline "Manage Reserves But Avoid Yuan Jump - China Official"The article states, "A surging balance-of-payments surplus is China's biggest economic problem, but Beijing must avoid the turbulence' that a sharp rise in the yuan would bring, according to a senior banking regulator. Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, estimated that China needs no more than $700 billion in foreign currency reserves and, with the country facing losses on its dollar bond holdings, proposed exploring alternative channels for investing its $1 trillion stockpile."So, what do we derive from the above? Perhaps, that long-term (at least long-term-ish) gold and silver could move up "large" as a result of China's currency activities. How large? Gold could perhaps go as high as $2,000 an ounce or more and silver going perhaps to $100 an ounce. But, amidst the exhortations to ruin that began this piece, we are impelled to offer the perspective that it may not happen overnight (though, yes, perhaps it could). The reason may be as simple as this: The dollar is still the world's dominant currency and all the major players, OPEC, the EU and, of course, Asia and China have a stake in making sure it does not decline too fast. Additionally, the United States is a major consumer nation, and crippling such a large market without a replacement is not likely a positive move for producing nations such as China, or even Japan.China does not exist in a vacuum. The leadership has its own problems - nearly half a billion impoverished, rural Chinese who seemingly do not believe they are getting their "fair share" of the current prosperity and continue to present the threat of civil destabilization. China needs to continue its industrial expansion until it can move more of these rural dissidents into cities where they can find work other than hand-to-mouth farming (an ongoing program). In the meantime, terminally undermining the economy of one of China's major trading partners is not likely going to help bring about the continued prosperity China's leaders believe is necessary to "modernize" while maintaining the current, fairly unstable system, Perhaps that is why the senior Chinese official above emphasizes the gradualism with which China intends to decrease its position in American dollars. Finally, as the initial article, above, itself points out, China can act unilaterally, but it will be neither easy to do so, nor especially comfortable. If China's leaders make economic decisions that are unfavorable to its trading partners such as dumping the dollar all at once - it may find itself at odds with nations that supply it with energy and raw materials, which also hold dollars. This is, perhaps, truly a case of "too big to fail," or at least in one swoop.ECONOMIC PERSPECTIVEThe business cycle: I have written in my book, "High Alert," that the overspending and overprinting of dollars by the Bush administration is pushing America toward what may turn out to be a deep depression. Chinese dumping of the dollar would obviously accelerate such a trend but an impending dump of dollars may not be so immediate for reasons we have seen above. On the other hand, I am in no way subscribing to the dominant social theme, see below.Dominant social theme: The American economy is incredibly healthy and resilient. This rosy scenario may be no more valid than the dollar dump argument. In fact, I far more sure of the former than the latter. Part of the mumbo-jumbo that keeps fiat money of all denominations alive is the massive network of economists and Wall Street investors and traders who are willing to play along with the charade. As the dollar continues to decline, bringing with it the potential for very real economic ruin, the babble will thicken. Those who can see through it, and continue to purchase gold and silver at what are still fairly low prices, will do a lot better than those who continue to be "snowed" by economic happy talk.Free-markets analysis: Are you going to bet on an immediate collapse of the dollar? Buy as much gold and silver as fast as possible. If you don't believe a dollar collapse is imminent, you still need to buy gold and silver. But don't panic while doing so. There may be more battles to be fought before the dollar finally surrenders. And when it does, if it does, there may be a new currency standing in the wings, ready to make its appearance. Conclusion: More and more you hear calls for a currency called the "Amero" which would be an amalgam of Mexican, Canadian and American dollars and pesos. American opposition might be overcome if the dollar weakens enough, and that may be the plan. You never know, when it comes to the money elite, what exactly they have in mind. But whether the dollar collapses in a day, a year or a decade, gold and silver hold their value. Trust money or trust politicians. Your choice. ViewYesterday's Discussion.
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