Gold Today!
ARCHIVED DISCUSSION FROM 8/20/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Blackjack
(08/20/02; 23:53:54MT - usagold.com msg#: 83447)
European economic confidence falls
Munich, Aug. 21 (Bloomberg) -- Economic confidence in the dozen countries sharing the euro worsened in July compared with three months ago, the Ifo economic institute said, suggesting growth this year will be weaker than expected.
The institute's growth index fell to 94.9 in July from 101.7 in April, the first decline since the fourth quarter of last year. The results are based on the answers of 257 ``economic experts,'' Ifo said.
``The decline of the Ifo euro-area indicator results exclusively from somewhat less favorable expectations for the economic situation,'' said Ifo President Hans-Werner Sinn in a faxed statement. Worsening expectations ``point to a continuation of the economic recovery in the euro area, though at a slower pace than thought some months ago.''
The European Commission earlier this month said the euro economy will expand between 0.6 percent and 0.9 percent in the third quarter, shaving a 10th of a percentage point off a previous estimate. The German economy, Europe's largest, barely grew in the second quarter, the Bundesbank said yesterday.
Rising unemployment has been damping consumer spending. The European unemployment rate rose to its highest level in two years in June as companies including Fiat SpA and Siemens AG have shed more than a quarter of a million jobs this year, according to Credit Suisse First Boston.
Gandalf the White
(08/20/02; 23:50:07MT - usagold.com msg#: 83446)
WELCOME Sir Galerider !!
Trying to understand the Oriental Mind is SUCH a challenge!
Please advise of progress OFTEN !
<;-)
Blackjack
(08/20/02; 23:18:39MT - usagold.com msg#: 83445)
Saudis sue US governemnt, lawyers counter-attack, lawyer heaven
RIYADH, 21 August - A Saudi lawyer is planning to file more than 15 lawsuits against the US government and other parties for causing physical and psychological damages to his clients, preventing them from completing their studies and damaging their reputation through the media.
Katib Fahd Al-Shammary, the lawyer, told Arab News that he had collected powers of attorney from Saudi victims and that he would file the suits within two months, seeking damages.
He spelled out the reasons that delayed the filing of suits, saying there was lack of clarity about procedures at US courts and prisons, disappearance of certain evidence and confiscation of the victims' IDs.
"Another important reason is lack of money to follow up court proceedings," Shammary said and called upon Saudi authorities and charities to support the plan.
"We need money to appoint American lawyers to defend our cases and ensure good media coverage to influence US public opinion," he added.
Shammary's clients include Saudi students who have been prevented from continuing their studies in the United States and jailed in US prisons for different durations without leveling any charges against them.
He said he would file lawsuits on behalf of those Saudis whose names and pictures were published in US media as suspects in the Sept. 11 terror attacks while they were outside the US at the time of attacks.
Shammary said the compensations to be sought through the lawsuits would be realistic.
"We have been contacting law offices in the Kingdom, Qatar, Kuwait and even in the US to make use of their expertise in support of the case," he explained.
Shammary is a member of the committee of lawyers appointed to defend Arab prisoners in Guantanamo. The committee, which is chaired by Najeeb Al-Nuaimi, a Qatari, plans to file 80 lawsuits next month.
The Saudi lawsuits come in the wake of a lawsuit filed by relatives of the victims of Sept. 11 attacks against Saudi charities and foreign organizations and individuals seeking trillions of dollars in damages.
"This is yet another part of a series of accusations which started after Sept. 11 against Islamic charities," Secretary-General of the International Islamic Relief Organization (IIRO) Adnan Basha said about the US lawsuit.
IIRO, one of several Islamic organizations charged in the lawsuit filed on Thursday, says it is active in the field of charity and relief works mostly for orphans in about 95 countries.
"Our work is official. Our financial records are well monitored and audited by international auditors and in cooperation with governments," Basha added.
Last year, IIRO spent some $33 million on 2,800 projects and more than 44,000 orphans. It maintains offices in many countries, mostly in Africa and Asia.
_________
This is getting rediculous, lawyers will feast!
Also,I understand bankruptcy law is the booming field these days.
Lawyers coming out of retirement to make extra $cash$.
To Mikal: yes lets see what happens AFTER the elections.
Especially in Brazil. That ones in October. October surprise?
Mr Gresham
(08/20/02; 23:03:47MT - usagold.com msg#: 83444)
Galerider
Welcome! Each of our international posters takes me on a 2-minute trip to that country, and I walk those streets and try to see through the eyes of other peoples of the world, and see what actions they might take that will affect me and my family here. Please, give us your most personalized, street-level views of economic life in a place I and most others have never been. Be our eyes and ears -- Arigato!
MO VER MEG
(08/20/02; 22:17:01MT - usagold.com msg#: 83443)
Goldquest
Thanks. I hope he is doing well in Switzerland and that the heirs didn't take away his checkbook for buying a gold mining company.
MOVERMEG
Black Blade
(08/20/02; 22:10:41MT - usagold.com msg#: 83442)
Re: White Hills
Oh yeah, I know what you mean. I have a friend in California (Bay Area) who along with his wife recently took out a mortgage on their house. Get this – the house was paid off and they had very little debt. So what do they do? They mortgage the house and go on a spending spree. It's people like these who are propping up this market. When the cash is gone and only the bills are left we are likely to see some real pain. When the real estate bubble bursts then what are these people going to do? Will they simply walk away from overvalued real estate leaving the banks with bad loans and property they can't sell for anything close to covering the mortgage debt? There is only one way that this will play out and that is a disaster that will make the economic collapse in Japan look like a picnic. Remember Texas in the 1980's when the S&L crisis hit and oil prices fell? Can you say Argentina? I knew you could. Cheers!
- Black Blade
goldquest
(08/20/02; 22:09:30MT - usagold.com msg#: 83441)
@ MO VER MEG
http://www.isyours.com/E/FA/IND/fink.htm
At one time, August Von Fink owned 13% of Homestake.
White Hills
(08/20/02; 21:47:49MT - usagold.com msg#: 83440)
Black Blade#83421
Black Blade, I also watched the report about no interest Mortgages. I think you may have come upon the financial event that sends the stock market crashing. Why would lenders even mess with such a loan? Like no interest car loans they are given to boost sales and to allow people who otherwise couldn't afford the down payment or the monthly payment to buy. The real estate market in California has inflated to the point that there are not enough buyers at current price levels that can really afford such a high payment. All sellers no buyers a receipt for disaster in the high flying housing markets. You think the Savings and Loan scandal of a few years back was bad? Wait until this baby crashes. White Hills
MO VER MEG
(08/20/02; 21:39:26MT - usagold.com msg#: 83439)
(No Subject)
Does anyone know what ever happened to the old boy (Von something or the other) that bought a huge amount of Homestake a couple of years ago? Just wondering what happened to him.
Black Blade
(08/20/02; 21:09:05MT - usagold.com msg#: 83438)
Top Performing Gold Fund
http://www.quicken.com/investments/holdings/?symbol=SGGDX
The top performing gold fund FIRST EAGLE SOGEN GOLD outperforms, and Barrick is nowhere to be seen. Hmmm...
Galerider
(08/20/02; 21:06:14MT - usagold.com msg#: 83437)
NEW MEMBER
Greetings to All,
I'm new to the discussion forum and am impressed by the ideas and thoughts you all bring to the table. My frustration came to a peak with the recent market activities which are very contrary to indicators (and every day observations seen here in Japan) of reality that you all exploit in your postings. Been riding the storm for years in the financial markets and have had enough. Cold hard cash and now, hard assets (Gold coins, silver coins, bars) are my portfolio. Have savings bonds but am thinking of cashing those in. Looking forward to viewing your postings daily and will try to keep you posted on gleanings from Japanese press items. Will the Japanese people wake up to their government's manipulations to allay the few or is daily suffering part of their accepted pysche? Still trying to figure my neighbors out over here.
Horatio
(08/20/02; 20:48:47MT - usagold.com msg#: 83436)
Newmont vs Barrick
I noticed one analyst advocated buying Barrick and holding Newmont, expecting Newmont to go down and Barrick to go up in the near term.
I also noticed Tocqueville Gold fund has included Barrick as no 5 in its list of major holdings.
All this from a fund that don?t believe in holding hedgers !
Vanguards gold fund has Barrick as its no 1 holding.
What?s going on? Has Hedging found new converts?
Graham
(08/20/02; 20:29:20MT - usagold.com msg#: 83435)
A currency backed by oil and wheat?
http://www.agriculture.com/worldwide/IDS/2002-08-20T034058Z_01_SP67065_RTRIDST_0_FINANCIAL-MALAYSIA-LIETAER.html
INTERVIEW-Belgian currency ideas man puts faith in commodities
2002-08-20 03:40:58 GMT (Reuters)
By Jalil Hamid
KUALA LUMPUR, Aug 20 (Reuters) - Dr. Bernard Lietaer says he thinks he has found a better answer to the instability of the world's financial markets -- a new global currency fully backed by a basket of physical commodities such as crude oil or wheat.
Lietaer, who helped create the single European currency when working for the Belgian central bank, says his Terra currency is inflation-proof, more stable and can be created either by nation states or by an alliance of big corporations.
The 60-year-old author of the best-selling book "The Future of Money" said the Terra could be developed much faster than the 23 years it took to come up with the European Currency Unit (ECU) -- the precursor of the euro.
"It took us 23 years from the design of the ECU to the euro implementation," he told Reuters in an interview. "I think we are going to be faster on this (the Terra) because the time is less flexible. I think the pressures are higher."
Lietaer, who is now a fellow at the Center for Sustainable Resources at the University of California at Berkeley, is in Malaysia this week for a conference on the viability of Islamic gold dinar as trade payments system.
Once named "the world's top currency trader" by Business Week, Lietaer's speciality is monetary innovations which he elaborated upon in the book, already published in English, German and Japanese.
Lietaer said the current world monetary system has several systemic flaws, such as the lack of an international standard of value, and the pro-cyclical money creation by the banking system.
-----------------
sector - thanks for earlier response - Graham
misetich
(08/20/02; 20:11:29MT - usagold.com msg#: 83434)
Brazil's leftist Lula increases lead in poll
http://www.forbes.com/newswire/2002/08/20/rtr700774.html
Snip:
RIO DE JANEIRO, Brazil, Aug 20 (Reuters) - Brazil's latest presidential poll showed front runner Luiz Inacio da Silva, leader of the Workers' Party, increasing his lead, Ibope pollsters said on Tuesday.
The survey carried out for local Globo Television showed Lula gaining one percentage point to 35 percent of voters support.
Second placed populist Ciro Gomes slipped one point to 26 percent and government backed candidate and market favorite Jose Serra also eased one point to 11 percent of the vote.
*********
Misetich
Lets wait for the markets reaction - (hint- its not what they wanted to hear)
Got gold?
Horatio
(08/20/02; 20:03:43MT - usagold.com msg#: 83433)
The New World Odor
Is it true the Brits are preparing a government in exile for Iraq ? Was that get together in Waco with the Russians a plan for Russian control over Iraq Oil 'something they wanted for years and we prevented.Now that Dubya has looked into his ole blue eyes and sees a new friend in Russia will we give them that control and hope they will use thier military to control the Muslims and sell Iraq oil to us at reasonable prices ,after thier cut of course.
The question is can we trust the Russians and can we trust Dubya to restore our civil freedoms and dismantle the office of Homeland Security after oil supplies are secured.
Security could have been achieved simply by control of our borders and kicking ass at the INS,but no, the Democrats woulden't have that ,cause most immigrants vote liberal at least until they acquire some assets and don't want them taxed away. Republicans and Democrats have chosen to take more power from the American people in the name of "Security".Why not kill two birds with one stone ,give the illusion of security and grab more power at the same time?.
Its easy to take "rights" away from the people ,all you have to do is "scare 'em",then "Save 'em" by convincing them giving up thier civil rights are required.
Restoring those rights will require nothing less than a revolution.
And what will become of our "friends" the Saudi's ?. Will they be redefined as terriorists and justify confiscation
of thier financial assets ? Thats one way of balancing the budget. ....Just an observation....I don't advocate anything
misetich
(08/20/02; 20:02:24MT - usagold.com msg#: 83432)
Should Old Folks Be Concerned About the New CPI?: Caroline Baum
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Caroline%20Baum&touch=1&s1=baum&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APWKBExVyU2hvdWxk
Snip:
New York, Aug. 20 (Bloomberg) -- With little fanfare, the Bureau of Labor Statistics introduced an alternative consumer price index last Friday, along with the old CPI we have come to know and love. While the CPI rose 1.5 percent in the 12 months ended July, the new ``chained'' CPI for all urban consumers, or C- CPI-U, registered a smaller 1.1 percent increase.
When one considers that some 30 percent of all government expenditures have a cost-of-living adjustment attached to them, the 0.4 percentage point difference between the two indexes starts to be a big deal.
In case you missed its subdued debut, the C-CPI-U ``will employ a Tornqvist formula and utilize expenditure data in adjacent time periods in order to reflect the effect of any substitution that consumers make across item categories in response to changes in relative prices,'' according to the BLS. (Clear? I had a hell of a time with chain weighting; you're on your own with Tornqvist.)
...........
``There's a long history of that,'' says Pete Davis, president of Davis Capital Investment Ideas in Washington, citing the Boskin Commission and earlier changes to the CPI, such as a shift to rental equivalency measures instead of home prices in the early 1980s.
Another downshift in cost-of-living adjustments would be a blow to the old folks, who don't spend heavily on ever-cheaper computers but instead devote a good portion of their income to expensive health-care services and medications.
``A product based cost-of-living index doesn't reflect the cost of living for health care,'' Davis says. ``That's why a lot of senators are finding out they can't go home without passing a prescription drug benefit.''
As it happens, the BLS maintains a consumer price index for the elderly, defined as those 62 years of age or older. ``It began in 1982 when Congress was interested in generating the index,'' says Pat Jackman, an economist at the BLS.
...........
Congress lost interest; the BLS kept the index up. Despite the greater weighting on services for the elderly, the old-folks CPI typically runs just 0.2 or 0.3 percentage points higher than the regular CPI on a 12-month basis, Jackman says.
For the year ended July, the OF-CPI-U was up 1.7 percent versus 1.5 percent for the CPI.
*********
Misetich
Amazing how the US reduces "inflation" as the money supply keeps on getting bigger and bigger
Lies, deceit, and fraudlent reporting and manipulation - who's better at it - Governments or Corporations
Got gold?
mikal
(08/20/02; 20:00:10MT - usagold.com msg#: 83431)
@Blackjack
"...an art of mortgaging nation's futures so they can get their stinking butts reelected today." Well said, and for campaign contributions, they will do that and more. With upcoming congressional elections, corporate fraud will be treated lightly, as any bad news under their watch impacts faith in the political process. Unless there are plans for a world government this year, to what extent will vested interests go to paper over losses, whitewash scandal, and postpone rebuilding?
Waverider
(08/20/02; 19:56:37MT - usagold.com msg#: 83430)
Sirs Gandalf / Slingshot
Yes - best wishes for a speedy recovery Sir Gandalf! Good to see you back. Slingshot - "Golden Angels" must have been an inspired blessing and I only the messenger - I too thought it was part of the story! Gotta run - off to prepare for a dance (really!) Cheers,
Waverider
misetich
(08/20/02; 19:46:48MT - usagold.com msg#: 83429)
Investors head for bonds as US trade gap widens
http://www.guardian.co.uk/usa/story/0,12271,778014,00.html
Snip:
Investors scurried for the safe haven of government bonds yesterday, unsettled by official figures underlining the size of America's gaping trade deficit.
The US is on course to notch up a $400bn (£262bn) shortfall between exports and imports this year, with the June deficit of $37.2bn only slightly lower than the record of $37.8bn set in May, according to figures published by the commerce department.
Wall Street fell 130 points on the news, and the gloomy mood infected share trading in London. The FTSE 100 index of leading shares closed 57.9 points, or 1.3%, lower at 4,368.9, its first loss in four trading days.
"Investors are still very hesitant to enter the market," said Diane Garnick, global investment strategist, State Street Global Advisors.
"What we're seeing is almost no new dollars being invested in the market, and, at the same time, lots of dollars leaving the market."
Some analysts suggested increases in both exports and imports in June could be a sign of a recovering American and world economy.
"The trade deficit may be outrageously wide, but the rise in both exports and imports point to continued economic growth both in the United States and around the world," said Joel Naroff, head of an economic forecasting firm in Pennsylvania.
But with the US having notched up its three largest ever deficits between April and June, most economists be lieve the dollar is set for a renewed fall against the currencies of its trading partners.
"US treasury secretary O'Neill is banking on stronger trade to give third quarter growth a lift," said David Brown, chief economist at Bear Stearns in London.
"This seems a forlorn hope as the US economy's recent nosedive has spread abroad. As long as this happens US trade will not improve; the only way it will improve is if the dollar slides."
***********
Misetich
Worth repeating
"What we're seeing is almost no new dollars being invested in the market, and, at the same time, lots of dollars leaving the market."
Got gold?
slingshot
(08/20/02; 19:46:30MT - usagold.com msg#: 83428)
Sweet Sixteen
******************
Outstanding!
Slingshot------------------<><><>
sector
(08/20/02; 19:45:44MT - usagold.com msg#: 83427)
@BlackJack The German Finance Minister Mr. Hans Eichel...
...opposes the sale of Bundesbank gold to possibly aid flood-ravaged regions.
He said "For the good of the German people".
There is another reason for him to oppose the sale of German gold...
It has ALREADY BEEN SOLD.
In the Washington Agreement pog run-up to $338 and subsequent knockdown.
No wonder the good minister is so frugal with the German people's gold.
Fix in your mind the political situation IF the news of that supposition were released to the public in the wake of Europe's devastating 2002 floods.
silvercollector
(08/20/02; 19:44:46MT - usagold.com msg#: 83426)
What does this mean.............bullish/bearish (for gold)
Quote:
"Hedge funds and other large speculators have sold more gold futures contracts than they have bought for the first time since the beginning of the year, a commodity Futures Trading Commission report showed.
The "short" position amassed by large speculators outnumbered their "long" positons by 476 contracts as of Tuesday, making it the first net-short position since January 1, the weekly report showed.
Speculators' gold futures purchases had contributed to a surge in prices to a 2 1/2 year high of #331.50 an ounce on June 4, two weeks after their net-long position peaked at 46,914 contracts. Gold traded at #315.40 yesterday on the Comex division of the New York Mercantile Exchange. Bloomberg "
Blackjack
(08/20/02; 19:31:51MT - usagold.com msg#: 83425)
Germany will NOT sell Gold to help with flood damage
BERLIN, Aug 20 (Reuters) - German Finance Minister Hans Eichel said on Tuesday he was ruling out any suggestion of selling Bundesbank gold reserves to help finance government efforts to help the victims of devastating floods.
Eichel also reiterated to journalists after a budget committee meeting in Berlin that Germany would fulfill the European Union budget deficit criteria despite the financial burdens from the worst-ever floods that hit have the eastern region in the last week.
"This would violate international agreements and moreover it would lead to a fall of gold prices which is not in the interests of the government," Eichel said.
The Bundesbank has about 3,500 tonnes of gold worth about 39 billion euros. The Bundesbank is the world's second-largest official holder of bullion after the United States.
__________________
My ,my ,my Gold Bugs in der bundasbank?
Usually governments and banks are senile.
I wonder how many banks wish they had not sold all that gold
back in the roaring tuliptech days?
Can't wait for the Gold Dinar next year.
Real money free of debt liabilities of bankrupt,lying,thieving
politicians who make an art of mortgaging nations futures so
they can get their stinking butts re-elected today.
slingshot
(08/20/02; 19:30:50MT - usagold.com msg#: 83424)
Gandalf the White
*****************************
Well you slid one by me Gandalf the White. I thought this "Operation" was part of the story. Was even more confused by Waveriders, "Golden Angels". Said to myself, Alright where do we go from here. Never claimed to be the sharpest knife in the kitchen. Glad to see you are alright and wish you a speedy recovery.
Slingshot-----------------<>
Waverider
(08/20/02; 19:16:41MT - usagold.com msg#: 83423)
Lady Sweet Sixteen
Way to go!!! You are both an example and an inspiration. Never let anyone tell you that your voice doesn't matter - it DOES! Hmmm...I sense true leadership qualities in you - Wall Street had better watch out! :)
Lady Waverider
Black Blade
(08/20/02; 19:06:03MT - usagold.com msg#: 83422)
Trade Deficit Remains Near Record
http://www.washingtonpost.com/wp-dyn/articles/A39092-2002Aug20.html
Snippit:
WASHINGTON –– The U.S. trade deficit narrowed only slightly in June to $37.2 billion, still the second biggest deficit on record, as an improving economy pushed demand for imports to the highest level in 15 months. The Commerce Department reported that the June imbalance between what America sells abroad and what the country imports was down a tiny 1.8 percent from the record high of $37.8 billion set in May.
Black Blade: The deficit is still running at an all time record pace. Why not more? Attribute that to the ongoing "Currency War". The global economy is in trouble – not just a few isolated countries.
Black Blade
(08/20/02; 18:57:28MT - usagold.com msg#: 83421)
Market Wrap Up – Puplava
http://www.financialsense.com/Market/wrapup.htm
Snippit:
What is even more disconcerting for Wall Street and Washington is the upcoming September/October reporting season. This is traditionally one of the worst periods of the year to be invested in stocks, and this year will be even worse. If I was a betting man, I believe that we are more likely to get a full-blown market crash, triggered by an unseen event, either geo-political or financial, that could send the markets into the abyss. Add to this all of the upcoming disappointments heading our way in the form of profit shortfalls and another recession, and it isn't hard to see the next leg or turn in the markets is going to be "hard down;" in other words, a stock market crash. This crash should be strong, fast and deep enough to shake the very core of the markets and shake the remaining apples from the trees. The next leg is going to be a seminal event. If investors haven't realized that we are in a bear market, they will certainly realize it after the next leg down. That is when the real fear factor comes into play. Up to this point, investors have been hanging on in the belief that the markets would recover and another bull market would develop. Most investors, even though the Nasdaq has lost over 70% and the S&P 500 over 40%, have viewed the first leg down as a correction and not a bear market. Everyone still believes that better times are ahead.
Most people can't remember what a real bear market is like. We've had only two major bear cycles in the last century; one in the 30's and the other one in the 70's. Most experts and investors feel what happened in the 30's and the 70's in the US, and the 90's in Japan, can't happen here again. They are about to get a painful history lesson. This one will be more painful than the bear markets in the 30's and the 70's in that there are more Americans invested in stocks today than in any other period of history in the markets. Instead of facing these realities, most investors are in a state of denial. The WSJ and CNN recently did a story on why investors are phased by the downturn. Most are complacent and have stopped looking at statements, refusing to deal with reality. That is why the next leg down, which I believe starts this fall, will be a powerful one because it will be driven by fear. Fear has been one of the missing ingredients in this bear market. Years of rising markets and financial advertising have done their job. They have left investors in stocks while insiders have fled the markets. They know more than anybody else what is happening to their companies, which is why they have exited the markets.
Black Blade: I agree. There is absolutely nothing to give any hope short of a massive intervention. Now we have Congress and the SEC thumping their chests in a big "dog and pony show" designed to show that "they care". Crooked corporate executives are being trotted out for the weekly "perp walk" while most of America ignores the weakness in the global economy. We see booming bankruptcy filings, record levels of corporate and consumer debt. Everyone is on the verge of being tapped out and the real estate bubble is already showing some cracks as income levels simply cannot keep up with the rapid rise in real estate values. Today I watched a report on "interest only mortgages". This is where only interest is paid but not the principal so there is no equity buildup. After a few years the loans are readjusted with accompanying "balloon payments". That is a recipe for disaster – it is also in sane! However, this also puts lenders on the hook for when the bubble bursts and these "renters" walk away from overvalued homes. As always, get out of debt now (or as soon as possible), stash enough cash for several months expenses, get Gold and Silver portfolio insurance (before investments completely implode), and start a storage program of nonperishable food (given the worsening drought and declining grain supply) and get stores of basic necessities. It could get very ugly, even more so than I thought possible a few months ago.
Max Rabbitz
(08/20/02; 18:53:18MT - usagold.com msg#: 83420)
Sounds like Sweet 16 made the NY Post
http://www.nypost.com/business/55072.htm
EVEN 15-YEAR-OLD KID IS MAD AT WALL ST. FAT CATS By JOHN CRUDELE
Of course this letter was before the birthday and pink car. She is no longer just a kid but a young lady and a few steps ahead of her class.
sector
(08/20/02; 18:50:00MT - usagold.com msg#: 83419)
@Graham - How Inflation/Deflation Effects Fixed Income Folks
It All Depends At What Interest RateYour Income Has Been "Fixed"
AND What vehicles that "Fixed" income derives from.
AAA Corporate bonds are fine...for now. Even in severe deflation those corps will survive and their bonds will have trustworthy yields.
With inflation your AAA income coupons will be severely eroded. Their face value stays the same everything else that matters goes up in price.
The risk of a massive credit accident in the US grows and the only way to survive that will be through precious metals or its unhedged, debt-free shares. Mind you there are very few precious metals miners in THAT category. The example of Argentina should not be dismissed. Depositors lost 75% of their life savings practically over night. They trusted their government...their elected officials.
With the recession looking like a multi-year phenomenon, the stress on non-AAA rated bonds will be rising and their survival can be called into question.
goldquest
(08/20/02; 18:25:25MT - usagold.com msg#: 83418)
@Gandalf the White
Best wishes for a speedy recovery and a smooth shift into high gear! Good to see you posting. goldquest
misetich
(08/20/02; 18:04:09MT - usagold.com msg#: 83417)
Reality Check: US Cargo Execs See Wicked Trade Deficits Ahead Aug 19 / 8:57 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=62&banner=mainwire_features
Snip:
Reality Check: US Cargo Execs See Wicked Trade Deficits Ahead Aug 19 / 8:57 EDT
By Gary Rosenberger
NEW YORK, Aug. 19 (MktNews) - The record-breaking import tide of
the past few months abated briefly in early July before roaring back by
mid-month and into early August, say U.S. cargo and port executives.
Wickedly huge trade deficits are expected for both June and July,
most officials say.
One driver of inbound flows had been nervousness ahead of a West
Coast longshoremen's contract that expired at the end of June. But the
deadline came and went without a contract renewal and, more importantly,
without incident, and steamships continue to come in heavily laden,
officials say.
June is almost certain to set another trade deficit record, and
July, August and beyond are likely to remain at around June's elevated
levels as imports surge and exports decline, cargo officials predict.
A lull in July was anticipated, but it proved transitory. The
renewed import wave suggests retailers are betting on the consumers'
version of the economy, rather than the stock market's reading of it.
Byron Miller, a spokesman for the Port of Charleston, foresees
startling trade deficit data ahead for June and July.
"I think we're going to see some incredible trade deficit numbers
based on the import growth we've seen and the total lack of movement on
exports," Miller said.
"July blows me away, not only for the pitiful amount of exports
going out through Charleston -- the worst we had in six years -- but
also the volume of outgoing empty containers, which was just
tremendous," he said.
Outgoing empties reflect the gap between imports and exports, and
often anticipate the quantity of inbound volumes to come. Over June and
July, outgoing empties were above 26,000, versus previous benchmarks of
12,000 to 17,000 "with highs in the low 20s," Miller said.
"Conversely, inbound empties are at record lows, which is not
favorable to an export position," he said.
"The chain stores are still bringing in heavily," said Guy Fox, an
executive vice president of customs services at Global Transportation
Service, a division of Stonepath Logistics Group, in Los Angeles.
"What's happening is they're paying more attention to what
consumers want than what the stock market is doing," he said. Based on
the amount of cargo he's handling, Fox expects stores to fully stock up
for back-to-school, Halloween, Thanksgiving and Christmas.
"July will be very strong," Fox said. "We had some of the biggest
weeks we ever had since we've been in business." Global Transportation
saw inbound volumes rise 20% from last July and about 5% over the prior
month.
"Retailers will have a lot of stock on their shelves this
Christmas, no matter what. That I can tell you," Fox said.
Jitters over potential dockworker slowdowns, lockouts and strikes
that never materialized did push back the peak shipping season this
summer as steamship companies and their customers brought in goods ahead
of the June 30 expiration of the West Coast longshoremen's contract.
"Unions and employers all whine and rattle their sabers, but so far
there's been no work slowdown and no strike, even though the bargaining
committee has strike approval," Fox said. Nor has there been a lockout
despite repeated threats by employers.
Fox is connected to both the longshoremen and the Pacific Maritime
Association, which represents steamships and ports, and he sees neither
seem bent on a course of mutually assured destruction.
"I know the longshoremen don't want to strike and the PMA is
willing to delay some technology issues until the next negotiation five
years from now," he said.
Meanwhile, early August imports "seem to be holding up," Fox
continued. "There is a steady flow of documentation coming in, and I
think volumes will hold at current levels until October or November."
The only bottleneck he sees at this juncture is airfreight, which
is particularly tight. "Payload space is shrinking as airlines reduce
fleets and international flight schedules," Fox said.
Art Wong, a spokesman for the Port of Long Beach, described a surge
in June inbound cargos, up 16% from the year prior, which he attributed
in part to pre-shipping ahead of the expiration of the longshoremen's
contract.
July is a tougher call because it started out slow but then quickly
bounced back to around June's levels. Wong had no preliminary data for
July at this writing.
Wong sees no connection between the tribulations of the stock
market and the amount of consumer goods being brought in. "We're still
hopeful of growth" during the peak season, he said.
But he also suggests retailers this fall would quickly respond to
any evidence of a drop in consumer confidence. "They might be a little
more cautious going into the fall," he said. "Imports might not be as
strong as they were in May and June, and things could level off until
retailers see better signs that the economy will bounce back."
July data at the Port of Los Angeles, the nation's largest, is
ambiguous. On the one hand inbound container volumes eased 11% from a
record-shattering June, but rose 9% versus last July.
Outbound volumes declined 4% versus a year ago.
Theresa Adams Lopez, a port spokeswoman, said the downturn from
June could be attributed to heavy pre-shipping ahead of the contract
talks, while the upturn from a year ago suggests continuing strength in
the consumer economy -- especially for merchandise related to a robust
housing market.
A steamship company official saw a drifting off in inbound cargos
early in July that soon after came steamrolling back.
"Right now the prognosis is that it will continue. Wal-Mart and
Target are bringing in a staggering amount of cargo," said the official,
who spoke on condition of anonymity.
Part of the reason is "cheap freight," he said. But steamship
companies are hoping to profit from the demand for freight, with a move
afoot to increase rates from their current bottoms. A general rate
increase set for Aug. 19 will raise the cost of a 40-foot container from
Hong Kong to Los Angeles to $1,200 from $900, a 33% increase, should it
stick.
"I can also tell you that no one makes money shipping for Wal-Mart.
They drive a hard bargain," he said.
He credited the strong imports to inventory building ahead of the
holiday retail season on top of a need to replenish inventories that
were depleted earlier this year.
The U.S. Commerce Department is scheduled to release international
trade data for June on Tuesday at 8:30 a.m. EDT. May's trade deficit was
a record-breaking $37.6 billion. The above commentary referred to June,
July and early August.
Editor's Note: Reality Check stories survey sentiment among
business people and their trade associations. They are intended to
complement and anticipate economic data and to provide a sounding into
specific sectors of the U.S. economy.
[TOPICS: MAURC$,M$U$$$]
************
Misetich
Reprinted in full for educational and fair use only -
Trade deficit is going to get worse - Retail sales growth is falling - inventories are rising -
Got gold?
misetich
(08/20/02; 17:57:18MT - usagold.com msg#: 83416)
Talk From The Trenches: Wall Street Journal where an article entitled "The Global Economic Outlook Appears Shaky for Rest of Year
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029854700000&sn=1&banner=mainwire
Snip:
Meanwhile, folks are not getting any reassurance from the Wall
Street Journal where an article entitled "The Global Economic Outlook
Appears Shaky for Rest of Year" is getting noticed. The story warns that
the outlook is deteriorating amid fading optimism. It cites losses in
U.S. leading indicators, the weak outlook issued by Germany's Bundesbank
and lower private growth forecasts. And it has former Fed Governor
Meyer, a most respected forecaster, saying we are in a "vicious cycle"
where no country has taken on responsibility for growth leadership.
..............
A number of economists commented on the Fed's Senior Loan Officers'
survey released Monday. They say current financial market problems are
related to credit. Economists at Goldman, Sachs say the survey indicates
banks tightened their standards at a slower rate but "in contrast, bond
markets remain very reluctant to extend credit to lower-rated firms."
They find there is no full-blown credit crunch. Economists at Salomon
Smith Barney say they were surprised the Fed study improved from April.
But "the latest few quarters of data appear very similar to the lending
thaw evident in the first few quarters of the last recovery," SSB says.
**************
Misetich
Wall Street Journal Reporters must be reading the BEST FORUM IN THE WORLD
Thank you - USA GOLD and all the staff
Got gold?
misetich
(08/20/02; 17:47:08MT - usagold.com msg#: 83415)
Junk bond default rate edges down in July-Moody's- In terms of dollar default volumes, July hit a record, surpassing the $19.1 billion in April, Moody's said.
http://www.forbes.com/newswire/2002/08/20/rtr700682.html
Snip:
NEW YORK, Aug 20 (Reuters) - The global junk bond default rate edged down for a second straight month in July but remained above 10 percent as soft economic conditions kept credit quality in a slump, Moody's Investors Service said on Tuesday.
Worldwide, 16 issuers defaulted on a total of $33.4 billion of debt in July, rating agency Moody's said. The global junk bond default rate, which is based on the number of issuers defaulting, fell to 10.1 percent in July from 10.3 percent in June, Moody's said.
***********
Misetich
Telecom debt is in the trillions and the industry isn't going anywhere but down - defaults will keep on being dragged out
Got gold?
misetich
(08/20/02; 17:43:17MT - usagold.com msg#: 83414)
Bill Gates says expensing options won't hurt techs-But Gates, co-founder of the world's largest software maker and one of the world's richest men, reiterated Microsoft's stance that it has no plans to join the growing ranks of companies that have begun expensing options in a bid to improve investor confidence.
http://www.forbes.com/newswire/2002/08/20/rtr700729.html
Snip:
By Jeffrey Hodgson
TORONTO, Aug 20 (Reuters) - Microsoft Corp. (nasdaq: MSFT - news - people) Chairman Bill Gates said on Tuesday there would be little impact on technological innovation if hi-tech firms began accounting for employee stock options as an expense.
But Gates, co-founder of the world's largest software maker and one of the world's richest men, reiterated Microsoft's stance that it has no plans to join the growing ranks of companies that have begun expensing options in a bid to improve investor confidence.
"I don't think a change in the way the accounts are done would have some major impact on technology. The numbers are there in every quarterly report. There's full disclosure. So it's hard to think: would that make some dramatic change in behavior?" Gates told a news conference in Toronto.
...........
In its latest earnings statement, Microsoft said fourth quarter net income would have been $903 million instead of $1.53 billion if it had to expense stock options. Microsoft said last month it would stick with the tech sector's practice of not listing employee options.
*********
Misetich
There you have it - "leadership" of the new and improved corporate governance and reporting
and no wonder, here's why
Quote
"Some industry watchers have said small tech companies in particular could see their bottom lines pushed deep into the red by the policy"
End of quote
Business lobby groups are powerful - they won't change their ways - but economic reality will
Got gold?
Graham
(08/20/02; 17:41:14MT - usagold.com msg#: 83413)
Depression/Recession - What it means to me.
I've quit believing in the 36,000 Dow. I'm definitely a gold convert, though not a buy and hold gold stocks fan with the wild moves lately. I'm getting to know more about finance and the economy than I ever thought I would.
But, I do not really understand what a severe recession/depression would mean to me. As a no-debt fixed income retiree, inflation has been more of my long term concern. What can I expect from the alternative?
Graham
misetich
(08/20/02; 17:34:11MT - usagold.com msg#: 83412)
GM says pension obligations "manageable" - Feldstein also said that, under accounting rules, GM is not required to make any contributions to its pension until late 2006.
http://www.forbes.com/newswire/2002/08/20/rtr700746.html
Snip:
By Michael Ellis
DETROIT, Aug 20 (Reuters) - General Motors Corp. (nyse: GM - news - people) Treasurer Eric Feldstein said on Tuesday that the company's hefty U.S. pension obligations are manageable, and the company is still targeting earnings of $10 per share by mid-decade.
"GM's funding obligations appear quite manageable," Feldstein told analysts and reporters on Tuesday. "GM continues to target its $10 (earnings per share) by mid-decade," he said.
.............
Due to the sharp sell-off of the stock market, GM's U.S. pension fund has lost three percent on its investment during the first six months this year. GM's $67 billion pension plan covering more than 630,000 active and retired U.S. workers began the year underfunded by $9 billion.
But the pension plan is very sensitive to interest rates, Feldstein said, and a rise in rates could dramatically improve the funded status of the plan.
Feldstein said expenses for the pension plan will likely rise this year, but will be offset by further cost cutting and more contributions to the plan. GM has already contributed $2.2 billion to the plan this year.
............
Depending upon the return of its pension investments, GM could expect to have to contribute, before taxes, between $6 billion to $12 billion to the plan through 2007, GM officials said
***********
Misetich
GM is hoping for a return of the good times rather than a "recovery Japanese style"
Got gold?
misetich
(08/20/02; 17:27:38MT - usagold.com msg#: 83411)
Oil's Rally to $30 Poses Limited Threat to Growth
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APWK0TBPJT2lsJ3Mg
Snip:
By Stephen Voss
New York, Aug. 20 (Bloomberg) -- Crude oil's rally above $30 a barrel for the first time in 15 months will raise costs for importers and consumers without derailing a U.S. economic recovery, economists and analysts said
............
The increase in oil prices of about $9 a barrel this year will take time to be reflected in the economy, said Gemma Wright, director of research at Barclays Capital Inc. in New York.
``We use a rule that for every $10 jump in the oil price it slows the economy by about 0.3 percentage point of GDP annual growth, with a six-to-twelve-month lag,'' she said.
*********
Misetich
I guess $29.99 won't do it for this "economists and analysts"
Shipping costs, etc will increase corporate costs - reducing earnings- reducing stock market value, increasing defaults etc etc etc
Got gold?
misetich
(08/20/02; 17:22:07MT - usagold.com msg#: 83410)
U.S. Budget in July Shows $29.2 Billion Deficit
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APWKxfBJEVS5TLiBC
Snip:
By Brendan Murray
Washington, Aug. 20 (Bloomberg) -- The U.S. government budget deficit in July was the widest for that month since 1994, as a slow economy limited tax revenue and spending increased to boost growth and wage the war against terrorism.
Last month's $29.2 billion deficit compared with a $2.8 billion surplus in July 2001, the Treasury Department said. It was the biggest for July since a $33.2 billion shortfall eight years ago.
.............
``One of the foundations of the strong economic performance of the 1990s was perception that the U.S. had its fiscal house in order,'' said Louis Crandall, chief economist at Wrightson Associates, a New York research firm. ``With many of the other elements of the strong economy having disappeared, it would be a further blow to confidence if that pillar were taken away.''
Ten months into the current fiscal year, the deficit is $147.2 billion, a $319 billion swing from a surplus of $171.8 billion for the same period a year ago. The government recorded surpluses for the past four years, the longest string since 1920- 30, before the Great Depression.
************
Misetich
Perception is not reality - though it can con a lot of people and it did -
Enron typifies this "illusion, perception" - at the end it was an empty shell -
However the ponzi scheme is falling apart -
Got gold?
Belgian
(08/20/02; 16:40:24MT - usagold.com msg#: 83409)
@ SM
Right you are amigo. Notes and coins in circulation are only a ***VERY*** tiny fraction of the total confetti piles !!! But our excercises on Gold and Goldreserves are relative ones, as on the comparaisons between two competing currencies (total management) with reserve-ambitions (euro and dollar). Don't forget that 38 TRILLION US$-Bond (debt)figure. Or 4 times the dollar issuer's (US) GDP ! This is certainly not the case for total euro debt in the same proportions.
Wich total debt on dollar or euro is still servicable/managable ? And to wich currency will a revaluing POG be at the most help ? 12.000 tonnes of Euroland Goldreserves or 8.000 tonnes US Goldreserves ?
Why do you think that M. Friedman is advising the UK not to join EMU ? Ignoring the euro is at the dollar's peril, sooner or later. And the euro is still ignored, stubbornly and purposely by the dollarblock. The geopolitical situation would have been much simplier if the dollar's supremacy was left unchallenged. See you tomorrow.
Gandalf the White
(08/20/02; 16:36:42MT - usagold.com msg#: 83408)
WELCOME Sir Remooz !! Here is my thought on JPM Ex "Gifts"
Remooz (08/20/02; 15:06:09MT - usagold.com msg#: 83391)
Insider purchases of JPM stock
===
The story that the Hobbits heard, was that the "Execs" planned a "show of FAITH" in their company by the purchase of stock ! OF COURSE they did this on-camera and fully understanding that new Stock Purchase Offer agreements were around the corner for all that joined the party ! BUT, we here all know like Sir Black Blade says, "Putting lipstick on PIGS, is the Game" !!
++
AND, yes all -- MY operation was a success and the Wiz is WHITE again, BUT operating in only first gear !
<;-)
Sierra Madre
(08/20/02; 16:29:43MT - usagold.com msg#: 83407)
Oui, M. Belgian!
Et, apres tout, le denouement est tres, tres claire.
L'or vaincra, sans dout aucune. Question du temps, seulment.
Laissons jouer les petits enfants.
Sierra
Boilermaker
(08/20/02; 16:27:38MT - usagold.com msg#: 83406)
Bush Plan "B" for ME?
With an Iraqi pre-emptive strike dropping from favor why not find a new target? A target with strong al Queda presence, with lots of oil and maybe lots of gold. Hey! That sounds like Saudi Arabia.
Now, how can we make it look legit?
Maybe we can create a crisis. Yes! Let's whack the king and put some aQ fingerprints on it. Everyone knows the royal family is up for grabs and the radicals are gaining. Let's just accelerate the process to create a "window of opportunity" to intervene and "stabilize" this long time ally. After all, we already have bases there and don't need an invasion to take control. We install some "friendly" Princes and "guide" their governance to our benefit. Now we have secure oil and the base we need to keep the pressure on Saddam.
Sounds like a plan.
Blackjack
(08/20/02; 16:25:20MT - usagold.com msg#: 83405)
Saudi money leaving US
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185908113&p=1012571727088
Disgruntled Saudis have pulled tens of billions of dollars out of the US, signalling a deep alienation from America.
One analyst said the total funds withdrawn by individual investors amount to $200bn. Other bankers put the figure nearer to $100bn.
The US-Saudi alliance was put under severe strain after September 11, when 15 of the aeroplanes' 19 hijackers were Saudi nationals.
Accusations that Saudi Arabia's austere brand of Islam breeds terrorism and its charities finance Osama bin Laden's al-Qaeda network have been perceived in the kingdom as attacks on Saudi society and its religion.
An analyst from the Rand Corporation said at a Pentagon briefing this month that Saudi Arabia was the "kernel of evil", exacerbating concerns among the country's elite that they have become demonised in the US and their money is no longer safe there.
As part of the fight against terrorism, the US and Saudi authorities have been monitoring the accounts of dozens of Saudi companies and individuals, a move that alarmed Saudi merchants. Youssef Ibrahim, a senior fellow at the Council on Foreign Relations working on a project re-examining US-Saudi relations, said Saudis had withdrawn at least $200bn from the US in recent months. He said the move has been driven by hawkish US commentators' calls for the freezing of Saudi assets.
The trend, he added, can be expected to accelerate with last week's trillion-dollar lawsuit by relative of the victims of September 11. The lawsuit accuses several Saudi institutions and charities and three members of the royal family, including the defence minister, of financing terrorism.
Details of Saudi investments in the US are sketchy but financial analysts believe they range between $400bn and $600bn. The funds are invested in private equity, the stock and bond markets and real estate. The figures include investments by members of the royal family.
Investors are not thought to be closing down their US accounts. Instead they are moving money into European accounts. Bankers in London said the largest established Saudi investors did not yet seem to be following the trend.
One said: "I'm sceptical about a mass exodus. But there was a lot of Saudi money with American banks that was not diversified, now they [the Saudis] are spreading their wings. Perhaps 30 per cent to 50 per cent of the money that was with US banks is seeking diversification."
The Saudi money shifts may have contributed to the recent downward pressure on the dollar.
"People no longer have any confidence in the US economy or in US foreign policy," said Bishr Bakheet, a financial consultant in Riyadh.
"And if the latest lawsuit is not thrown out in court, it will mean no more Saudi money in the US."
__________________
The saudi's are angry over a huge lawsuit filed against the entire
Saudi nation. This lawsuit was designed to create more friction
between the US and Saudi. The US media is trying to provoke a war
between the US and several moslem nations. I can't think of worse
news for the US. This could lead to the end of the US dollar as
the world benchmark currency. US occupation of millions of square
miles of the middle east is the fantasy of madmen.
Waverider
(08/20/02; 16:23:38MT - usagold.com msg#: 83404)
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
Best Gold Market Report on the Web....
Belgian
(08/20/02; 16:12:42MT - usagold.com msg#: 83403)
@ SM : cheap oil/cheap Gold
OK Sir, let us leave the eventual agreement(s) on the Gold/oil flows, open and neutral up until evidence of it pops up.
But...Australia's second biggest export/product/volume = GOLD TO THE EMIRATES !!! This Gold must be paid for with oil profits and they have bottomless boxes to fill with the precious portable. Their appetite for Gold isn't declining, regardless of whatever degree of modernization. Gold they want and Gold they must get. As much Gold as there is oil-reserve under their sand. Replacing the depleting black precious for the eternal yellow one, at increasing pace.
Aussie Gold export figures are evidence. Dubai Gold Bazars are bathing in bullion. Agreement or not, oil and Gold are related anyhow. D'accordo amigo ?
Sierra Madre
(08/20/02; 16:02:25MT - usagold.com msg#: 83402)
Touché, Belgian! I am hit!
BUT, if you would be so kind, tell us the total M1 of Euros: that means, coins, bills, plus checking accounts and other demand deposits. I don't think the percentage would look so impressive against that total.
This, apart from the fact that reserves are for the moment, only "window dressing" as there is not any sign of a commitment to redeemability, which is the purpose of reserves after all.
IF gold should rise very strongly, then the redeemability might come into being. For the moment, it is out of the question.
Sorry, I have no data for the U.S.- Irrelevant in any case!
Saludos
Sierra
sector
(08/20/02; 15:51:05MT - usagold.com msg#: 83401)
@remooz The JPM "Buys" were on the day that the stock...
...barely held $20, closing at $20.08
The insiders were "Encouraged" to buy shares by senior management since a failure to do so would have led to quick bankruptcy as their derivatives are reliably reported to be linked to a $20 JPM closing price. In other words, if the stock had closed at $19.99 their derivatives with that risk stipulation would have become callable. JPM doesn't have the cash to pay those "Derivative calls". Such a state is equivalent to a bond default. The contribution amount was about $27 million.
Welcome aboard!
Remooz
(08/20/02; 15:49:50MT - usagold.com msg#: 83400)
Reply to Socrates
Dates of JPM Insider purchases were July 24,25,26. Thanks for your comments!
Belgian
(08/20/02; 15:46:04MT - usagold.com msg#: 83399)
Re :
@ Sierra Madre: ECB issued : 642 billion € notes + 15,7 billion € coins = 657,7 billion €.
The EMU-12 have 12.000 Tonnes of Goldreserves in the CB's vaults à 10.000 € / Kg = 120 billion € on Goldreserves for a total of 657,7 billion € issued = 18 % Gold reserves on the total notes/coins in circulation for the EMU-12.
Can you do the same for total dollar notes and coins in circulation ? TIA
@ Remooz : Hi Sir. When JPM, recently, was valued lower than its bookvalue (21$)...there was an exceptional huge volume under the 20$. Now 27$. All theories are open here. But a valuation of JPM under bookvalue is claimed to be extremely dangerous for their financial health. We will never know who was behind these 100.000 shares buys ? But the reasons why so much shares were bought on that particular value, seem obvious.
Black Blade
(08/20/02; 15:35:05MT - usagold.com msg#: 83398)
Egypt will not let US warships pass through Suez Canal
http://www.ipsnews.net/interna.asp?idnews=11683
Snippit:
AMMAN, Aug. 17 (IPS) - Dr. Oasma Al Baz, political advisor to the Egyptian president, said Egypt will not allow passage through the Suez Canal of US ships headed to strike Iraq. In statements published here Saturday he added Egypt rejects any military operation against Iraq, its territorial unity, independence and safety of Iraqi people, adding any military attack on Iraq represents a vary dangerous step endangering the security of the region.
Black Blade: The stakes are rising in the Middle East.
BTW, oil inventory rose 6.6 million barrels last week and the POO is falling back tonight.
sector
(08/20/02; 15:34:46MT - usagold.com msg#: 83397)
Egypt will not let US warships pass through Suez Canal
What will Iran do?
IRAQ:
Att.Editors: The following item is from the Qatar News Agency (QNA)
AMMAN, Aug. 17 (IPS) - Dr. Oasma Al Baz, political advisor to the Egyptian president, said Egypt will not allow passage through the Suez Canal of US ships headed to strike Iraq.
In statements published here Saturday he added Egypt rejects any military operation against Iraq, its territorial unity, independence and safety of Iraqi people, adding any military attack on Iraq represents a vary dangerous step endangering the security of the region.
Dr. Al Baz said the question of UN weapons inspectors is an issue which concerns the UN and the Security Council and not Washington and the US has no right to take any military action against Iraq nor has the right to interfere in the internal affairs of another country and impose a set-up of new leadership on its people. (QNA)
= 08171520 ORP011 NNNN
(END/2002)
++++++++++++++++
When one thinks about Iraqi War ripple effects, this is only one.
@Belgian - When strangers pop up here to quickly sooth everyone's fevered brow about a possible devaluation, you know that somebody at a .gov domain is watching and worrying that the cat may be out of the bag.
The top two Fed banks [C, JPM] are hanging by a thread, waiting for the litigation death sentence to be delivered and everybody on the street knows it. JPM's $29 Trillion derivatives book doesn't pass the smell test with a .2% capital to notional value ratio where the industry standards are 2%. That means that the industry buys $100 worth of derivatives for $2 while JPM slips gets the same derivatives for twenty cents. The smoke is billowing out of their headquarters.
Is a deval possible? In the last 68 years the US has already had two. The 1934 Gold Reserve Act and Richard Nixon's 1971 repudiation of gold debt. Nixon's was a ten X devaluation of the dollar in relation to the months later equilibrium price level of gold.
The list of pure bearish macroeconomic facts is so long that one tires of reading it. At the end of the day the debt has risen to unsupportable levels in Japan AND the US. Can anybody imagine the reaction to a tax INCREASE proposal in these times?
The UK once tried to hold a two-tier gold system. It will fail in today's internet world.
If the US cannot afford to inspect incoming container shipments for terror weapons they cannot afford to inspect incoming gold shipments either.
The key is to accept the premise that the government is not out to help its citizens. It is out to aide the banking cronies on Wall Street and the Congressional cronies in Washington. The latest IMF/ Brazil flap is the most noticeable corruption. Mr. Rubin is once again at the core of the scandal.
Sierra Madre
(08/20/02; 15:28:27MT - usagold.com msg#: 83396)
Belgian, regarding Cheap Oil for Cheap Gold.
"Entre nous", I don't think that any such arrangement would be likely, notwithstanding the arguments of venerable posters at this Forum.
Gold cannot be used to "pay for oil", even in part, because there is not enough of it, even at cheap present prices.
Gold was, in the past, used for settling small amounts in trade balances, not for payment of goods, for the same reason.
The oil exporters have taken dollars, period. Thought they were excellent and loved getting them. "Invested" in Gov't securities, shares of Western companies, interest-bearing deposits, also direct investments. Yachts. Planes.
For the most part, as handlers of large amounts of money, they have behaved like their Western counterparts. Dumb!
That's my feeling, FWIW
Sierra
Socrates964
(08/20/02; 15:25:47MT - usagold.com msg#: 83395)
Remooz
a) When were the purchases done (surely not at the 7/24 low, surely not)?
b) Only $2m or so between 10 people - not exactly a huge amount.
c) Did JPM lend them the money (public relations exercise - look our top execs are really confident about our derivatives biz) or did they know that their stock was about to hit the critical $20 level and bounce (surely not?)? Or did they just read Citibank research and decide that JPM was a great fundamental investment (most likely IMHO ;))?
Black Blade
(08/20/02; 15:21:29MT - usagold.com msg#: 83394)
Cingular to cut 3,000 jobs
http://money.cnn.com/2002/08/20/news/companies/cingular_layoffs/index.htm
Snippit:
NEW YORK (CNN/Money) - Cingular Wireless said Tuesday it will cut as many as 3,000 jobs, or 7.5 percent of its work force, as the No 2 wireless provider, facing a tough time for the telecom business, tries to cuts costs and streamline operations.
Black Blade: The "Bone Pile" is set to grow some more.
mikal
(08/20/02; 15:20:08MT - usagold.com msg#: 83393)
@Remooz
Welcome to the forum! I would be surprised if the ten insiders would make such purchases with their own money.
Socrates964
(08/20/02; 15:15:14MT - usagold.com msg#: 83392)
Sierra
Sierra -I stand corrected -was merely arguing theoretically from Another's discussion.
Remooz
(08/20/02; 15:06:09MT - usagold.com msg#: 83391)
Insider purchases of JPM stock
Long-time lurker;first-time poster.Thread much appreciated.
According to my source ("Vickers Weekly Insider"---www.vickers-stock.com August 7 issue) ten different J P Morgan Chase insiders BOUGHT a total of over 100,000 company shares in late July.
IMHO,unless this is terminal stupidity or a collective psychosis on their part, it does not coincide with a company presumably in dire straits as regards gold derivatives
or any other serious difficulties. As a long-time gold devotee I find this somewhat disquieting. Any thoughts?
Black Blade
(08/20/02; 15:05:36MT - usagold.com msg#: 83390)
Is it really the heat?
http://money.cnn.com/2002/08/19/news/retail/index.htm
Retail sales are drying up, and companies are blaming the weather. Is that the only problem?
Snippit:
NEW YORK (CNN/Money) - It was too dry. It was too wet. The snowstorm kept customers away. The thaw cut into Flexible Flyer sales. Blaming the weather is one of the great traditions of America's retailers. Now it's the heat that's stifled sales, of course. Despite strong quarterly results on Monday from home-improvement retailer Lowe's, there are signs that with the mercury rising, customers' desire for new merchandise has evaporated. In its weekly sales call Monday, Wal-Mart (WMT), the nation's largest retailer, said that back-to-school-sales were "off to a slow start as warm weather has affected apparel sales," and that overall sales were near the low end of its expected range. (Fun fact: Wal-Mart accounted for over 9 percent of U.S. non-auto sales last year.)
Let's hope that it really is the heat that's got sales wilting. If not, the sharp slowing the economy saw in July may have been something worse than an air pocket in the ascent to recovery. With business spending still flagging, a slowdown in consumer spending could send the economy back into recession.
Black Blade: Yeah, right. I remember Abby Jo of Goldman Sachs and Dana Telsey of Bear Stearns saying last year that is was too cold. It is sounding more like "Goldilocks and the Three Bears" story. No, it is simply that consumers are tapped out. They see their friends and relatives being tossed upon the growing "Bone Pile", their stock and retirement accounts under water, and are unable to draw upon anymore plastic debt or add a third (or more) mortgage to finance spending. It's the end of the road for many. The only heat is that which is being applied by the creditors. Besides, cars are air conditioned and malls are air conditioned. What a lame excuse – can people really be that lazy? Hmmm…
Belgian
(08/20/02; 14:59:55MT - usagold.com msg#: 83389)
Thanks Socrates964
Cheap oil flow from ME in exchange for cheap Gold flow to ME. Nice peacefull deal.
What happens when physical Gold becomes scarce and hardly available for flow to ME ? The ME cannot accumulate enough cheap Gold, whithout forcing POG higher themselves and have no other choice than to raise POO to be exchanged for endagered US$. The oil/Gold flows become disproportionate and not conform to the deal anymore ? More income from higher POO, makes it possible to pay a higher price for the same amount of physical Gold, wanted to be accumulated by the oil producers. This provokes more pressure on the already tapped available Goldreserves, be it private / official or mine forward sales.
Higher POO and constant uptake of physical Gold is a positive price-spiral for both oil and Gold. With both precious tangibles under positive price pressure...the dollar's real value comes under scrutiny and add, finally, also to higher oil/Gold pricing ! Then the gold-derivative house of cards, suddenly collapses, because low Gold prices cannot possibly be paper-"engineered" anymore ?
Will lower oil prices signal that new available physical has been found to satisfy the flows ? Or will the golden euro, stop the past oil/Gold flow deal ? This when the dollar has given up ?
Any RELIABLE statistics available on the evolution of ME Gold stashes ? Could be a nice piece of evidence for the theory. Any Gold Sherlocks out there ?
Sierra Madre
(08/20/02; 14:55:57MT - usagold.com msg#: 83388)
Euro and its reserves
The Euro is NOT backed by reserves of 15% in gold. That would be an enormous reserve.
It is backed by a relatively small percentage of reserves, OF WHICH 15% is in gold, the rest is junk.
Repeat: "15% OF THE RESERVES are in gold". Only a small amount. If gold goes up enormously, the gold reserve would be meaningful. Not at present prices.
Sierra
Black Blade
(08/20/02; 14:45:32MT - usagold.com msg#: 83387)
Gloomy Words From Stephen Roach
http://www.morganstanley.com/GEFdata/digests/20020819-mon.html#anchor0
Snippit:
I must confess that it's particularly difficult to disengage in the summer of 2002. The debate has been more intense than I can remember in a long time. Yet I must also confess that the tedium of bearishness has started to get to me as well. Who wouldn't want to get up in the morning and see the glass as more than half full? Yet I've long been taught to stay with your discipline. After all, what else do we really have? At this point in time, the lens of my post-bubble analytics continues to see rough times ahead for the US economy — a greater risk of multiple dips than a mere double, and a higher probability of deflation than inflation. Needless to say, for a US-centric global economy, those are not encouraging words. Lacking a growth engine, America's dip could easily be the world's dip.
Black Blade: This is not encouraging news for stock market bulls. However, those who are in a defensive posture now should fare well as the global economy falters. There are a lot of cracks in the system and it is looking like the stock market rally is about to run out of steam. There is not much in terms of economic data this week and that more than anything else has contributed to the latest "suckers rally".
Sierra Madre
(08/20/02; 14:43:49MT - usagold.com msg#: 83386)
Aristotle: regarding your investment advice
May I add that gold is the substance with the lowest declining marginal utility, as quantity increases, of any substance on earth?
What this means, in plain English, is:
MORE is ALWAYS better!
Sierra
mikal
(08/20/02; 14:30:17MT - usagold.com msg#: 83385)
@Socrates964
Sorry for the confused rush job. I was at a library internet terminal. Posting just as my time ran out. Now you are exactly right about the portfolio of currencies. But since gold forms a large part of the ECB's reserve assets, each mark to market revaluation brings the reserves higher, not the euro per se directly. The value and strength of euros rise internationally, as the gold reserves approach higher and higher percentages of the total, (as POG rises).
Socrates964
(08/20/02; 14:04:26MT - usagold.com msg#: 83384)
Mikal
Agreed, but is this an explicit design feature? (Not aware of any explicit gold backing for the euro, but this may be ignorance on my part). My point was that the Euro is like a portfolio of paper and gold. The weighting of gold in the basket could rise due to rising POG, but the overall value of the portfolio in another currency - e.g. US$ would go down due to perceptions of the market value of the paper.
mikal
(08/20/02; 13:38:24MT - usagold.com msg#: 83383)
@Socrates
"Clearly the relationship is not linear, because since the euro is 15% backed by gold, you have to ask about the other 85%." The euro's value is marketed to the market price of gold ("marked to market") So, theoretically and practically speaking, at each quarterly, (or more frequent) revaluation of the euro, you get a greater percentage gold backing as gold rises in price!
Shapur
(08/20/02; 13:22:55MT - usagold.com msg#: 83382)
War
It seems that with the recent media focus against a move on Iraq--allies backing off, republican party splits, etc., Bush needs more acceptable reasons for his move.
We are seeing more of that now--videos, embassy, etc. It would also appear to me that if the EURO/OIL/DOLLAR switch is on--Iran trial balloon as of last Sunday--Iraq mentioned it about 9 months ago --That BUSH would Want the Switch to happen before he moved on Iraq. Why let high oil prices due to dumped dollars be a symptom of a Bush strike? Let it be a reason TO STRIKE!
So push em into it--push the lawsuits, push the fighting words---let the war be a just one, save the gasoline price from the price gouging axis of evil.
Socrates964
(08/20/02; 13:16:57MT - usagold.com msg#: 83381)
Euro/oil/gold
My views are as follows:
-Europeans are terrified by Dubya acting unilaterally, because they can see the consequences of such actions on their own countries which are a) oil dependent, b) much closer to the ME, c) have large Muslim populations.
-I wonder about the Europeans' wish to see a large revaluation of the Euro, which is a necessary consequence of putting forward your currency as a reserve currency. It was one thing for the DM to revalue after 1971, another for the Euro to revalue given that politically important sections of the economy depend on exports/tourism - even if you can argue that a lot of such trade flows are internal to the EU, and that the political donwside of a strong euro must have been thought through a long time ago.
-I thus presume that it comes down to Another's hypothesis that the US pays for its oil in a mixture of dollars and bullion. A priori, if the bullion part goes up in value due to an appreciation of POG, then the de facto oil price received by ME producers goes up, even if the $ price need not do so. If I have understood his ideas correctly, there is no direct exchange of bullion, it is more like transfer pricing in that the ME create a false market in which oil trades well below its true value, and the US reciprocates by creating a false market in gold that lets the ME producers buy it well below its true value.
-Another then seems to suggest that oil producers distinguish between the Euro as a gold-backed currency and the dollar as pure paper. If this is true, then the Euro should move in line with gold. Clearly, the relationship is not linear, since even if the euro is 15% backed by gold, you have to ask about the other 85% - which presumably, like the dollar, is composed of promises, hot air, claims on future tax receipts, etc. The euro is also complicated by the unresolved question of whether the ECB has automatic access to the national reserves of individual countries.
In my view, therefore, and assuming Another's oil-bullion-$ link, the best scenario for gold bugs is that the weakness of the US$ is worked out through a rising gold price, in so far as the US government perceives that it is necessary to let the JPMs of this world fall into the abyss of their own making in order to keep cheap oil flowing.
With regard to the euro, on the other hand, it is probably politically expedient for the ECB for it to underperform POG by a significant margin - this will avoid the political fall out from overvaluation relative to other currencies and give it an expanding reserve base (gold) in real terms.
Belgian
(08/20/02; 12:42:00MT - usagold.com msg#: 83380)
Hello Ari
Is your "wealth" box, still, easely "portable" ? Yeah, know...it's a bit indiscrete...but the future holders of those wealth boxes will experience very little discomfort, whilst carrying them. They had to fill much smaller (match)boxes with the exchange of devalued confetti for featherweight Gold. Your opinion on the devaluation is...? Much appreciated and TIA.
Belgian
(08/20/02; 12:22:04MT - usagold.com msg#: 83379)
@ Socrates964 #83372
Great summary and imo very Gold related. Thanks.
Allow me to reflect on it.
The Kissinger way is : Make friends and manipulate through (NWO) economical commitments. This in contrast with WB's confrontation(s) and overmight.
Sorry for the repetition, but Arabian oil wants (and desperately needs) much higher prices as main objective.
The present 25$/barril is OK with the defacto purchasing power of the present US$. But they (we/all) know that the US$ is way overvalued and that this is unsustainable.
It is in this framework that the choices on the equilibrum- POO and a dollar-devaluation must been seen. A very difficult job/choice. A political retreat might give the owners of the cheap Arabian oil-reserves, the "advantage" on that dollar/oil choice. To dethrone or abdicate ? Not funny alternatives.
Euroland pressuring Turkey with "tourism" favors. Abu Nidal, killed in Bagdad. Israel forces, retreating.Iraqi embassy in Germany. Evidence of rising tensions on what is at stake. And the (eventual) war's aftermath will have the final impact on the oil/dollar matter.
Will the POO moderate when Washington, changes its tunes ?
Yes, the POO will show some goodwill and give some breathing space...very temporary, though !
Question : Is Euroland's ME-sidetaking (sympathy), evidence of the euro/gold/oil concept ? I'm inclined to answer : Yes ! And you ?
Aristotle
(08/20/02; 12:19:07MT - usagold.com msg#: 83378)
Specific investment advice for anybody and everybody
Get a very little box. A size like a little matchbox or what engagement rings come in. Preferably a nicely crafted wooden one; it adds to the charm.
Fill it with Gold coins. It won't take much to reach the overflow point. Depending on your box, anywhere from 4 to 10 coins ought to do the trick.
Success! You've now become so wealthy in REAL terms that you need to remodel and expand the size of your Treasury's storeroom.
Replace your very small box with one that is a little larger, maybe the size of those nice little wooden boxes that some brands of tea are packaged in.
Continue to apply your skills and talents in the wide world. Pursue your passions and your career to addto your savings. In short order you will fill this box with Gold to overflowing. When you can no longer get the lid on, success! You must expand once again.
Get a bigger box. Maybe a cigar box. Enjoy your life and keep adding to your Treasury.
Someday... someday, you may find yourself struggling to fit the lid on a nice wooden wine case long after the memory of the original bottled contents has left your palate. On that day you are surely your own master and wise in the ways of the world. You have my respect and admiration and I'll buy you a pint of what-you-like when we meet and share friendship as chance may allow.
All great fortune starts with humble beginnings. Set a goal for yourself and then DON'T STOP when you reach it, for it's onward and upward for you!
Gold. Get you some. --- Aristotle
davefinger
(08/20/02; 12:16:32MT - usagold.com msg#: 83377)
My bad - linked article mis-attributed
It was the head of the ANA that was testifying, there was simply a quote from the head of the BEP near the top of it. No wonder he sounded go genuinely concerned for the collector/dealer! :) Sorry about that.
davefinger
(08/20/02; 12:07:58MT - usagold.com msg#: 83376)
Devaluation beyond unlikely
http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&oe=UTF-8&threadm=Pine.3.88.9407151034.A9863-0100000%40athena.csdco.com&rnum=6&prev=/groups%3Fhl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26q%3Dcounterfeiting%2Bstatistics%26sa%3DN%26tab%3Dwg
If the US Dollar is devalued, my single-celled brain tells me that all of the following are likely to occur:
1 - foreign countries USD reserves blown away
2 - US citizens dollar assets blown away
3 - severe damage to the US Gov ability to borrow
4 - the USD losing world reserve currency status
Now that one cell isn't terribly powerful, so please someone, point out how/why any of the above could be prevented. And really it seems that unless _all_ could be prevented, it ain't gonna happen, because they are still really nasty individually.
Is it only a limited number of asset classes held by just the CB's that need to be revalued or what? Now <that> I could see the powers-that-be wanting to try if they could get away with it...
In general, I see no reason to immediately pre-suppose a nefarious purpose behind everything the gov does. When they say they are changing the format of the currency to stem counterfeiting, they may just really mean it. I've been a collector for years, and for years I've heard rumblings about how easy it is to copy our money, how ugly our money is, how other materials just perform better than our cotton-paper hybrid, how computers are making it even easier still to dupe our money, etc. And it's that last one that I think has finally forced a move. No, the measures they want to implement will probably do nothing more than inconvenience the real hard-core criminals. But if they can knock out 80% of the small-timers created in the last few years due to color laser printers, etc., hell even just 50%, it's worth it from a purely reductionist POV of their case-load.
The link at the top is to a Google cache of a Usenet posting from 1994(!) with the testimony of the then head of the Bureau of Engraving and Printing to the House Banking Committee concerning the urgent need for a change in our paper money to stem counterfeiting. He appears genuinely concerned over how this could be done and the impact it would have, and that's _without_ the additional wierdness of a deval happening simultaneously.
Belgian
(08/20/02; 11:27:15MT - usagold.com msg#: 83375)
@ Sector : $USD-Devaluation
Very interesting post #83365. Thanks !
You :They don't want citizens (US citizens-?) buying Gold so we can expect barriers to be erected (two tier gold price-UK).
In other words, present UNfree Gold >>> a bit less UNfree ?
This might be the case when looked at it from the dollarblock's standpoint as radically opposed to Gold for the people. But there is a euro now ! An alternatif (concept) that never existed during the past Gold interventions.
All dollar-holders outside the dollarblock (Americas/Japan/even UK) must have the possibility to escape or compensate for the $USD devaluation. Only two main choices : euro or Gold.
So I don't see a high probability of barriers to be erected, outside the dollarblock. On the contrary ! A dollar-debacle with a flight to Gold would benefit to those suffering from this devaluation.
Maybe US citizens might not experience, rightout, confiscation, again, but what if Goldsales/trade should become highly regulated with heavy taxing as an desencouragement ? And as an alternatif to the outdated two tier gold price barrier.
While in the rest of the world, goldtrade and prices flourish much more or absolutely freely. Kind of a, selferected, Berlin wall, around the inside-US$ ? It was Nixon who abondened the dollar's convertibility and the rest of the world who took the Gold !?
Correct me, please, if my conclusion is wrong :
American citizens and US-block locked up dollars will have to pay much more for Gold (in devalued $) than the outside float of also devalued dollars ? Gold still UNFREE in the dollarblock and FREE in the rest of the world ? Thanks Sector.
Operative
(08/20/02; 11:14:05MT - usagold.com msg#: 83374)
@ Horatio
"I suspect something else other than Defence is afoot."
Dear Horatio, Did you not sit and watch the video played over and over again this weekend? How those evil ones used poison gas to kill those poor, innocent, want to cuddle in my arms, puppy dogs? It is obvious to me that you require additional education to correct your thinking. For if you had responded as the players of said video had hoped, as your properly adjusted mental state should have, you would have phoned the White House demanding the attack on Iraq begin immediately! I suppose you also think there has/is some type of conspiracy to keep gold prices down as well.
Soon enough there will be help for people like you. The camps are a little behind schedule so please try to hang in there, help will soon be on the way. In the meantime, you want to get rid of any gold in your home, a new scientific report soon to be released after being discovered buried in the desert for a year next to the doggy video, shows that gold has an electromagnetic effect on the brain and leads to an unhealthy process called individual thought pattern.
Wishing you a full recovery soon.
Best, Operative.
USAGOLD / Centennial Precious Metals, Inc.
(08/20/02; 10:22:45MT - usagold.com msg#: 83373)
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