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ARCHIVED DISCUSSION FROM 8/21/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Carl H
(08/21/02; 23:53:54MT - usagold.com msg#: 83485)
@Black Blade: SPR Numbers
Black Blade: Do you believe the Strategic Petrol. Res. numbers?
Cometose
(08/21/02; 23:38:11MT - usagold.com msg#: 83484)
POST 83480/ JPMORGAN CHASE RATINGS MAY BE CUT
Synopsis:
JPMORGAN CHASE ..........." hard to quantify "
misetich
(08/21/02; 22:40:07MT - usagold.com msg#: 83483)
U.S. Auto Sales Look Strong-But a number of observers are beginning to question how long new vehicle sales, a linchpin that accounts for roughly 10 percent of the U.S. economy, can thrive amid America's tepid economic recovery. A sudden drop in the automotive industry's strength could signal that the wheels of the economy have stopped moving.
http://abcnews.go.com/wire/Business/reuters20020821_523.html
Snip:
DETROIT (Reuters) - Automakers and auto industry experts see August shaping up as another hot month for U.S. vehicle sales, thanks to interest-free loans and other hefty rebates.
But a number of observers are beginning to question how long new vehicle sales, a linchpin that accounts for roughly 10 percent of the U.S. economy, can thrive amid America's tepid economic recovery. A sudden drop in the automotive industry's strength could signal that the wheels of the economy have stopped moving.
Analysts expect auto sales in August to run roughly 7 percent to 9 percent higher than last year, at a seasonally adjusted annual rate of about 17.6 million vehicles -- off from July's blockbuster pace of 18.1 million, but well ahead of the 16.4 million rate in August 2001.
The decline from July's pace would come as Detroit's Big Three automakers start to run low on the 2002 model year vehicles carrying the zero-percent loans and large rebates. Earlier this month, all three began offering far less generous rebates on the 2003 models just beginning to hit dealerships.
...........
Much of that has been thanks to incentives that averaged almost $2,900 on vehicles from Detroit's Big Three in July. But a number of other economic factors, including interest rates at 40-year lows, growing personal incomes and rising home values, may have also help prop up sales.
.............
"AUTOS, CRUISE MISSILES AND HOUSES"
"With the exception of autos, cruise missiles and houses ... it seems to me the economy is kind of stalling out," said Paul Kasriel, chief economist with Northern Trust securities.
"Corporations are still under tremendous pressure to improve their profits, the only way they're seeing to do it is through cutting costs, and the biggest part of their costs are people," he said. "I don't expect to see much hiring and maybe more firings."
...........
And the last income report from the U.S. Commerce Department found Americans boosted their savings rate in June to 4.2 percent of their income from 3 percent a year earlier, suggesting their bias against spending was strong.
"People are trying to save more after they finally realize they're poorer, their wealth has taken some substantial hits in past 2.5 years," Kasriel said. "They probably feel the need now to increase their net worth the old-fashioned way, by saving more."
************
Misetich
The auto, housing, government spending is red hot - yet the economy is not going anywhere - how long can this go on? Budget deficit is expected in excess of $200 billion and with "normalization" including off-budget items and interest costs the deficit is near $500 billion
Consumer debt, both housing and auto is staggering - and will only get worse if they continue on borrowing
They hope for a transitional leap from these industries to others however in most post-recessions it was the housing industry to spring out from the depths of the abyss -
Got gold?
Got gold?
Gold Hill
(08/21/02; 22:39:10MT - usagold.com msg#: 83482)
Black Blade
I've been lurking for quite a while, remember you mentioning Silverado and their clean coal process. I see that Silverado has applied for a $10 mil grant from DOE to help fund their progress. Any comments?
BTW (Disclaimer), I did buy Silverado and it has been very good to me. Off to see the Prez tomorrow, southern Oregon is going to get some press!!
misetich
(08/21/02; 22:29:36MT - usagold.com msg#: 83481)
Oil Price Hike Won't Spark Inflation: Fed
http://abcnews.go.com/wire/Business/reuters20020821_482.html
Snip:
— EMERYVILLE, Calif. (Reuters) - San Francisco Federal Reserve Bank President Robert Parry said on Wednesday he was not worried the recent spike in oil prices above $30 a barrel would stoke now dormant inflation.
............
Parry, who in an earlier speech said that the current level of interest rates is appropriate and quite stimulative, told reporters later he was comfortable with growth in the second half of the year of 3 percent or slightly under.
"If it didn't grow at a 3 percent rate, I'd be disappointed," he said, adding that such a growth rate should help improve the labor market.
***********
Misetich
OK we won't have "inflation" as defined by the Feds - I guess they mean CPI, etc but not the increase in money supply
Doubted if the economic growth will not be affected by an increase in energy costs with firms unable to pass on the increased costs -
Jawboning is the only thing Feds got left - no ammo left- game over
Got gold?
misetich
(08/21/02; 22:21:41MT - usagold.com msg#: 83480)
J.P. Morgan Chase Ratings May Be Cut
http://abcnews.go.com/wire/Business/reuters20020821_524.html
Snip:
Aug. 21
— By Jonathan Stempel
NEW YORK (Reuters) - Moody's Investors Service on Wednesday threatened to cut J.P. Morgan Chase & Co.'s <JPM.N> long-term ratings, expressing concern about the Wall Street bank's profits and the degree to which Enron Corp.'s<ENRNQ.PK> bankruptcy may hurt J.P. Morgan's reputation
The warning affects $42.4 billion of debt at the No. 2 U.S. bank holding company, formed in December 2000 from the merger of Chase Manhattan and J.P. Morgan, and follows a similar action last Thursday by Standard & Poor's Ratings Services.
Moody's said it may cut J.P. Morgan Chase's "Aa3" senior unsecured debt, its fourth highest grade. It affirmed J.P. Morgan's "Prime-1" short-term ratings. Downgrades often boost borrowing costs.
"The review is much more directly tied to financial performance and fundamental issues," said Peter Nerby, a Moody's senior vice president, in an interview. "The company has suffered from a profitability point of view over the last few quarters since the nerger, and that may continue."
Nerby added that "some of the reputational hits that J.P. Morgan has suffered could affect fundamental financial performance going forward, although that's very, very hard to quantify."
...............
Moody's said J.P. Morgan's strategy to combine commercial and investment banking "has met mixed success," and that its Enron ties might subject it to more regulatory scrutiny and expensive litigation.
*********
Misetich
JP Morgan - ANOTHER warning - preparing the markets for the inevitable -
Got gold?
Waverider
(08/21/02; 21:40:58MT - usagold.com msg#: 83479)
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
For anyone who otherwise may have missed it...the best on the web...
DOWNUNDER
(08/21/02; 20:17:59MT - usagold.com msg#: 83478)
US DOLLAR HEGEMONY HAS GOT TO GO - -
http://www.atimes.com/global-econ/DD11Dj01.html
Hegemony -(Dictionary defination)-"Leadership or predominant
influence exercised by ONE state over others.This article dated April 11th 2002 cuts right to the chase & gives an excellent overview, with clarity, as to why American domination of the whole world economy must cease. It's not a long read but it covers the history -and more importantly spells out reasons for the discerning reader as to why the USA Govt is loathed by so many nations.
SNIP- -
World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.
Blackjack
(08/21/02; 20:03:25MT - usagold.com msg#: 83477)
US Budget Deficit on track to worst in 6 years
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185910197&p=1012571727204
The federal budget deficit is on track to be the worst in at least six years, according to the latest official figures showing an ongoing erosion of tax revenue and ever-higher public spending in July.
The US Treasury reported on Tuesday that tax revenue fell short of government spending for the second time in three months, leading to a deficit of $29.2bn in July - in-line with expectations.
It leaves this year's deficit on-track to be the largest since the mid-1990's. From January to July, it amounts to a cumulative $110bn - the highest since the $119.7bn deficit of the January-to-July period of 1993.
For the first ten months of the fiscal year which ends in September, the federal government ran a budget deficit of $147bn compared to a $172bn surplus over the same period last year.
Aggravated by the economic slump, tax cuts, anti-terrorism and medical-care-related spending, the deficit threatens to complicate the Bush Administration's consideration of a new economic stimulus plan.
A Canadian
(08/21/02; 19:40:01MT - usagold.com msg#: 83476)
J.P. MORGAN TAKES ANOTHER SLAP
This time from Moody's.....this will eventually become the weakest link...goodbye!
Cavan Man
(8/21/02; 16:27:09MT - usagold.com msg#: 83475)
RPowell
Only massive buying or conversely, massive selling will set AU free. I hope for the former
Carl H
(8/21/02; 16:09:44MT - usagold.com msg#: 83474)
@Black Blade: Debt
You should have also pointed out that Personal debt loads are very high and the US Government debt just keeps growing and growing and growing...
I recall reading somehwere in the past year that historically, far more soverign debt has been repudiated or inflated away than has ever been paid back. Kinda makes you wonder about "risk free investments" like US treasuries.
Got Gold?
Black Blade
(8/21/02; 15:19:22MT - usagold.com msg#: 83473)
Corporate debt saps nation
http://www.denverpost.com/Stories/0,1413,36%257E33%257E801767,00.html?search=filter
Credit stress hits Depression level
Snippit:
Sunday, August 18, 2002 - U.S. corporate debt nearly doubled in the past five years - to $3.9 trillion by the month of May. The burden, already buckling many companies under the load, threatens to send the nation into a prolonged recession. "We're looking at an economic heart attack in front of us," said John Riley, president of Cornerstone Investment Services, a money management firm in Providence, R.I. "We're faced with owning up to the excesses of the late 1990s."
Black Blade: Corporate debt is at all time record highs and it is unlikely to ever be paid. Looks like the banks have a problem. In a word –"Grim".
R Powell
(8/21/02; 13:49:03MT - usagold.com msg#: 83472)
That strange cyberworld of POG changes
Kitco has added a new feature to their daily gold and silver charts. The bottom of each chart gives an indicator showing when the different exchanges are open. To the usual Sydney, Hong Kong, London and Comex markets, the New York access market has been added. This is an electronic (Globex) market, thinly traded, where prices may vary drastically.
If the day comes when a large, market moving amount of money is invested in silver or gold, this may be the place for driving the POG or POS upward. It is also a dangerous place where prices are vulnerable to attack. I believe Lips' "Gold Wars" explains that one large bank, through massive buying, once started a gold rush. This market access did not exist at that time. Perhaps we'll see another large institution break from the ranks one fine day. I'm ready!
Rich
Cavan Man
(8/21/02; 12:03:43MT - usagold.com msg#: 83471)
Looks like war (ongoing tug-o-war in admin)
washingtonpost.com
Bush: Iraq Change in World Interest
By Jennifer Loven
Associated Press Writer
Wednesday, August 21, 2002; 12:56 PM
CRAWFORD, Texas –– President Bush promised Wednesday to consult allies before any military action against Iraq and asserted that an end to Saddam Hussein's regime "is in the interest of the world."
"How we achieve that is a matter of consultation and deliberation," Bush told reporters.
Even so, Bush said the subject of a possible military strike on Iraq did not come up at a meeting on his ranch with his top military advisers. Instead, he said, long-range Pentagon issues were discussed.
© 2002 The Associated Press
Galerider
(8/21/02; 10:46:20MT - usagold.com msg#: 83470)
FED SPEAKS
Greetings,
Told everyone when I joined, the markets are frustrating. That the regional FEDS would hold the party line and talk of tame inflation, reasonable economic growth, yada, yada, yada......what puppets!
Sierra Madre
(8/21/02; 10:26:36MT - usagold.com msg#: 83469)
Welteke of the Bundesbank keeps wanting to sell CB gold...
There he goes again! Welteke wants to sell gold, to help "disaster victims". Yes, of course, we understand:
Weltie old boy, you vant to sell gold to get ze Cherman banks off ze hook, zey sold ze golt und now zey need it beck. Jah? Zeez are ze WICTIMS, (of their own foolishness and perversity).
Sierra Mutter
Socrates964
(8/21/02; 09:04:00MT - usagold.com msg#: 83468)
Enron
Let's hope they go after JPM while they're at it. If the $20 close on 7/24 was the trigger for a meltdown and a) this knowledge was not in the public domain, b) the top people knew that intervention was forthcoming to lift the stock above the fatal level, then what is the status of these purchases? No marks for guessing.
TownCrier
(8/21/02; 08:48:14MT - usagold.com msg#: 83467)
HEADLINE: IMF cuts Kyrgyz GDP outlook on gold mine accident
http://www.forbes.com/markets/newswire/2002/08/21/rtr701213.html
BISHKEK, Aug 21 (Reuters) - Kyrgyzstan's economy will grow by just 1.5 percent this year against an original forecast of 4.5 percent following an accident at the country's biggest firm, a gold mine ... Kumtor, a gold venture with Canada's Cameco Corp ... had to halt its work due to a gigantic landslide at its mine in the Tien Shan mountains.
"We have revised the real GDP forecast for this year because of the impact of the landslide in the Kumtor mine," Tapio Saavalainen, head of a visiting IMF mission.
Official data shows GDP shrank by 4.9 percent in the first half of this year, compared with the same period of 2001.
Kumtor accounts for some 40 percent of Kyrgyzstan's industrial output, and its gold comprises around half of all exports...
----------(click URL for full text)---------
As should be obvious from this report, gold can provide benefits reaching beyond the individual. Here is a case where an entire nation's economic health hinges on the export of newly mined gold.
It should also be obvious that the landslides did nothing to harm the value of anybody's investments in the gold that had been previously mined and shipped out, but investments in the mining company (Cameco) are down nearly 25% since the July 8th mine mishap -- a pit wall failure (200 meters in height). Take care where you stand, mate.
R.
USAGOLD / Centennial Precious Metals, Inc.
(8/21/02; 08:11:11MT - usagold.com msg#: 83466)
A good treasure never goes out of style
http://www.usagold.com/ProductsPage.html
 |
"Treasure chests throughout history
have been filled with gold, and not by idle choice."-- R. Strauss
|
sector
(8/21/02; 07:50:30MT - usagold.com msg#: 83465)
Ex-Enron Executive Kopper to Plead Guilty
http://biz.yahoo.com/rb/020821/enron_plea_3.html
Wednesday August 21, 5:50 am Eastern Time
Reuters Business Report
By Deborah Charles and C. Bryson Hull
WASHINGTON/HOUSTON (Reuters) - Former Enron Corp. executive Michael Kopper is to set to plead guilty on Wednesday and become the first employee to admit a criminal role in the energy giant's failure, sources close to the investigation said on Tuesday.
Kopper, the chief lieutenant to disgraced former Chief Financial Officer Andrew Fastow, will plead guilty to two charges of conspiring to commit wire fraud and money laundering and surrender $12 million in "criminally derived" assets, the sources said.
The 37-year-old Kopper will cooperate with prosecutors, the sources said. With his plea, federal prosecutors leading the sprawling investigation into Houston-based Enron have snared a high-ranking insider in a position to testify against Fastow and possibly other executives above him.
The plea may also alleviate public and congressional pressure to produce results in the long-running investigation. Although U.S. investigators have made several high-profile arrests of top executives of other companies accused of corporate wrongdoing, they had yet to charge anyone connected to Enron, which collapsed into bankruptcy on Dec. 2.
The deal marks a major shift in the strength of the government's case, said former federal prosecutor Robert Mintz.
"Here the government is taking the traditional route of applying tremendous pressure to individuals and striking deals with carefully selected insiders who will lead them through the Byzantine transactions," said Mintz, who now leads the white-collar criminal defense practice at the law firm of McCarter & English in Newark, New Jersey.
++++++++++++++++++++++++++++
My, My! Perhaps the trail to GoldGate just heated up.
Kopper must have been a bagman for Fastow and as such he would have known about energy/gold swaps.
It will be fun to see exactly when the President cuts off the prosecution "For the good of the country".
misetich
(8/21/02; 06:27:40MT - usagold.com msg#: 83464)
Area Recovery Shows New Signs of Stalling
http://www.washingtonpost.com/wp-dyn/articles/A41941-2002Aug20.html
Snip:
Maryland and Virginia lost large numbers of jobs in July, according to employment numbers released by the department. Many analysts thought the Washington area would be among the fastest to emerge from last year's recession. But the new data suggest that not only has the recovery stalled, but the local economy is getting worse.
"This is bad news," said Anirban Basu, chief economist of Towson University's Regional Economic Studies Institute. "All the data are starting to point in the same direction, which is that the economy is actually losing momentum rather than picking it up."
********
Misetich
Double dip or continuous recession?
Got gold?
misetich
(8/21/02; 06:22:11MT - usagold.com msg#: 83463)
Mind the Gap - The U.S. stock bubble in the second half of the 1990's was just as big as Japan's bubble in the second half of the 1980's. Will our two-year funk turn into a five-year or ten-year funk, the way Japan's did?
http://www.nytimes.com/2002/08/16/opinion/16KRUG.html
By PAUL KRUGMAN
How much has Japan's economy shrunk since its bubble burst? It's a trick question; Japan's economy hasn't shrunk. It had only two down years over the past decade, and on average it grew 1 percent per year.
.............
Now the non-trick question: What would a similar analysis say about the United States?
The U.S. economy's "potential output" — what it could produce at full employment — has lately been growing at about 3.5 percent per year, thanks to the productivity surge that began in the mid-1990's. But according to the revised figures released a couple of weeks ago, actual growth has fallen short of potential for seven of the last eight quarters.
............
Some readers have already guessed where I'm going with this. The U.S. stock bubble in the second half of the 1990's was just as big as Japan's bubble in the second half of the 1980's. Will our two-year funk turn into a five-year or ten-year funk, the way Japan's did?
A loud chorus is already shouting "We're not Japan!" Half the time, depending on what I had for breakfast (rice and pickles?), I'm part of that chorus. But let me share some disquieting thoughts.
Back when I first got professionally obsessed with Japan's problems, around four years ago, I made myself a mental checklist of reasons that Japan's decade of stagnation could not happen to the United States. It went like this:
1. The Fed has plenty of room to cut interest rates, which should be enough to deal with any eventuality.
2. The U.S. long-term budget position is very strong, so there's plenty of room for fiscal stimulus in the unlikely event interest rate cuts aren't enough.
3. We don't have to worry about an Asian-style loss of confidence in our business sector, because we have excellent corporate governance.
4. We may have a stock bubble, but we don't have a real estate bubble.
I've now had to strike the first three items off my list, and I'm getting worried about the fourth.
.........
House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.
If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort.
.............
Last year some economists began privately referring to the Fed chairman as "Greenspan-san." The joke faded out as optimism about recovery became conventional wisdom. But maybe it's not a bad nickname after all.
************
Misetich
Krugman made a great call on South East Asia several years before the bubble burst - he's getting agitated on the US economic direction
Got gold?
misetich
(8/21/02; 06:11:45MT - usagold.com msg#: 83462)
Fears That Lending to Brazil May Dry Up
http://www.nytimes.com/2002/08/21/business/worldbusiness/21BAIL.html
Snip:
By EDMUND L. ANDREWS
WASHINGTON, Aug. 20 — Nearly two weeks after the Bush administration threw its support behind a $30 billion loan to rescue the Brazilian government from financial collapse, American officials and the International Monetary Fund are worried about whether big international banks will keep lending to Brazilian private industry.
The president of Brazil's central bank, Arminio Fraga, is flying to New York for a meeting next week with some of the country's biggest creditors, including Citigroup, J. P. Morgan Chase and FleetBoston.
...........
Administration officials estimate that Brazilian companies have about $10 billion in loans and credit lines that come due before the end of this year. Much of that credit is being used to finance exports, which in turn are crucial in getting Brazil's overall financial condition back in balance.
Today, Brazil's central bank said it would try to fill the gap by providing up to $2 billion in loans to the country's exporters. But that strategy will force the government to use up precious foreign exchange reserves, which in turn will weaken its ability to defend the beleaguered currency, the real, from another downward spiral.
...........
"The numbers don't say the situation is necessarily hopeless," Mr. Mussa said today. "But if creditors think the risk is great enough that it is better to get out than to stay in, that becomes a self-fulfilling prophecy."
.............
***********
Misetich
Bush and Co have their hands full - US interests in Brazil are high
Got gold?
misetich
(8/21/02; 06:05:32MT - usagold.com msg#: 83461)
Subtracting capital sent abroad from the United States, the net inflow into the country fell 83 percent, or $16.4 billion, in the first quarter compared with figures in the period a year earlier.
http://www.nytimes.com/2002/08/21/business/21DOLL.html
Snip:
Yet foreign investment in the United States does appear to have suffered. Subtracting capital sent abroad from the United States, the net inflow into the country fell 83 percent, or $16.4 billion, in the first quarter compared with figures in the period a year earlier. Switzerland alone invested $11.1 billion in the United States in the first quarter of 2001; in the first quarter of this year, it withdrew $154 million worth of capital.
***********
Misetich
Poor personal savings rate in US - relying on foreigners to support the growing deficit
Each passing day for one reason or ANOTHER - foreigners including Europeans have less and less confidence in the US financial system
US Treasury O'Neil creditability is under scrutiny - here's a quote from the same article
"With the dollar having lost about 12 percent of its value against the euro and the yen since February, many politicians, most recently Treasury Secretary Paul H. O'Neill, have cheerily forecast a more drastic shift in trade favoring exports over imports."
O'Neil is proving to be a buffoon -
Got gold?
Black Blade
(8/21/02; 05:53:46MT - usagold.com msg#: 83460)
Americans file mortgage requests in record numbers
http://biz.yahoo.com/rf/020821/financial_mortgages_2.html
Snippit:
NEW YORK, Aug 21 (Reuters) - Americans flooded banks and mortgage lenders with a record number of home loan applications last week to lock in some of the lowest mortgage interest rates ever to refinance or to buy a home, a U.S. industry trade group reported on Wednesday.
Black Blade: Taking on more debt to keep on spending. Hmmm…
misetich
(8/21/02; 05:53:44MT - usagold.com msg#: 83459)
Dollar Falls vs Yen Amid Speculation Saudis Selling U.S. Assets
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=APWNukBY1RG9sbGFy
Snip:
London, Aug. 21 (Bloomberg) -- The dollar declined against the yen, snapping a four-day gain, on concern Saudi Arabian investors may sell more U.S. assets in coming months.
...........
Investors from oil-producing Persian Gulf countries hold about $1.2 trillion overseas, excluding property, according to Saudi American Bank. Middle East investors have sold as much as $200 billion of U.S. assets, the Financial Times newspaper reported, citing Youssef Ibrahim, a senior fellow at the Council on Foreign Relations.
``The concern is that Middle East investors could continue to sell,'' said Martin Bayntun, who helps oversee about 15 billion pounds ($23 billion) at Gartmore Investment Management. The dollar will also be ``vulnerable'' in coming months on concern U.S. economic ``growth will be below par,'' he added.
...........
``Undoubtedly the fear that this is happening is having an effect on the markets'' and is hurting the dollar, said Steve Englander, senior currency strategist at Citigroup Inc. In coming weeks, the dollar could weaken to $1.03 per euro, as investors weigh up the prospects for U.S. growth, he said.
.............
***********
Misetich
and this from Aug. 20 Financial Times article
""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."
US foreign policy is under fire - Iran, Iraq, Saudi Arabia, Venezuela, China - (Four major oil producing countries, and China a major oil importing country- who just last month had a peak month in oil imports)
Got gold?
Black Blade
(8/21/02; 05:29:46MT - usagold.com msg#: 83458)
Buba Welteke Mulling Gold Sales To Set Up Disaster Fund
http://www.futuresource.com/news/news.asp?story=i4280739775839731776
Snippit:
FRANKFURT (Dow Jones)--Deutsche Bundesbank President Ernst Welteke is proposing that the German central bank sell some of its gold reserves in the long term, to help victims of natural disasters, a Bundesbank spokesman said Wednesday.
Black Blade: It appears that the old Reich's Marshal is at it again. Yesterday Finance Minister Hans Eichel said "nein!" to such a ridiculous plan. Welteke has long been known to despise gold as most socialists and communists of days past. However, with a new government likely to come to power his days are probably numbered. Soon he will be crying in his beer with his old stasi friends.
Black Blade
(8/21/02; 04:37:21MT - usagold.com msg#: 83457)
Western World Would Be Unwise To Ignore Proposal For Gold Dinar Currency Among Islamic Countries.
http://www.minesite.com/archives/features_archive/2002/Aug-2002/dinar210802.htm
Snippit:
Just before the Organisation of Islamic Conference which is due to take place in Kuala Lumpur in October 2003 a number of Muslim countries, led by Malaysia, propose to introduce an electronic unit of value called a gold dinar to settle bilateral trade among themselves. The plan will be rubbished by members of the Bush administration who were brought up from birth to believe in the power of the almighty dollar, but the White House should reflect on the fact that there are 1.3 billion Muslims in the world and very few of them share America's view of the dollar. Moreover Asia was developing as an economic power house in its own right until the financial crisis of 1997/8 and many leaders in these countries believe that they were destabilised by an overly strong dollar.
Black Blade: Leading to an eventual gold standard and then to a gold and silver trading unit? Very possible owing to recent events. A very interesting article worth reading.
Galerider
(8/21/02; 04:36:52MT - usagold.com msg#: 83456)
Welcome
Mr Gresham, Gandalf The White,
Thank you for your welcoming words and will do my best to provide as much information as possible with regards to Japan and Asia.
Blackjack
(8/21/02; 03:42:52MT - usagold.com msg#: 83455)
UK housing market may have peaked
London, Aug. 21 (Bloomberg) -- Home prices in England and Wales rose at the slowest pace in five months in the quarter through July, a survey showed, suggesting the housing market may have peaked.
House prices, which gained 43 percent in the decade to 2001, have encouraged consumers to boost spending, helping prevent the U.K. from sinking into recession last year. The slide in stocks this year is leading some people to postpone purchases.
``People have their eye on the stock market,'' said Noel Flint, a surveyor at Knight Frank Grubb & Ellis, a real estate agent that oversees about 10 billion pounds ($15.3 billion) in sales a year. ``Many are hesitant to buy. The housing market is taking a breather.''
In a survey of 338 property appraisers by the Royal Institution of Chartered Surveyors, the balance of those reporting higher prices fell to 53 percent, from 63 percent in the three months to June.
The benchmark FTSE 100 Index has declined 15 percent this year and shed 9 percent in July. Stocks and pensions account for about 45 percent of household wealth in the U.K., about the same as the value of houses, according to HSBC Bank Plc.
Slowing property price growth gives the central bank another reason to keep its benchmark interest rate at 4 percent, the lowest level in 38 years. In June, Bank of England Governor Sir Edward George suggested policy makers would raise borrowing costs and said house prices were ``unsustainable.''
Manufacturing, which accounts for about a fifth of the economy, declined at the fastest pace in more than two decades in June. Higher borrowing costs may further damp spending and erode confidence.
Blackjack
(8/21/02; 02:59:09MT - usagold.com msg#: 83454)
Rolls warns of Bleak Outlook
Rolls-Royce will warn this week that it could be badly hit by the slump in civil aviation.
This warning comes after US Airways sought bankruptcy protection last week.
The company will warn of a bleak outlook when it publishes its interim results on Thursday. Rolls has already cut 5,000 jobs since September 11 to reduce costs.
The firm had a long-term engine maintenance contract with US Airways worth hundreds of millions of dollars.
_______________
Ripple effect from US Airways bankruptcy.
Civil Aviation business in a world of hurt.
Literally.
Blackjack
(8/21/02; 02:49:38MT - usagold.com msg#: 83453)
Deutsche Telekom cuts 22,000 jobs, capital spending
Bonn, Aug. 21 (Bloomberg) -- Deutsche Telekom AG, Europe's biggest phone company, posted a 3.9 billion-euro ($3.8 billion) loss in the first half because of costs tied to acquisitions.
The loss includes extraordinary gains and charges. Excluding one-time items, Deutsche Telekom had a loss of 3.1 billion euros compared with a loss of 1.3 billion euros a year earlier, said Chief Financial Officer Karl-Gerhard Eick at a press conference.
Chief Executive Officer Helmut Sihler said he plans to cut costs by 2.5 billion euros by reducing capital expenditure, eliminating 22,000 jobs and by slashing debt. Former CEO Ron Sommer was ousted last month after his expansion strategy failed.
``We are under pressure, but we mustn't allow ourselves to get nervous,'' Sihler said at the press conference in Bonn.
______________
Capital spending cuts, desperate to stay alive, service its debt.
This is why no recovery in Tech. No capital spending by big
telecoms, they are loaded with debt. It will take some time,
maybe years to work out from under that debt. In the mean time,
back at the ranch, many will fold. Like Worldcom. Bernie had the
biggest ranch in Canada. He is Canadian eh. They say he will lose
the ranch. These days they are coming after the CEOs LOL.
Galerider
(8/21/02; 01:55:39MT - usagold.com msg#: 83452)
REGIONAL FEDERAL RESERVE BANKERS AND DOLLAR
Read your posting on the dollar slide over concerns with Saudi withdrawing investment funds in U.S., Blackjack. Also interested in what regional FEDS (i.e. Phil, Chicago) will say about the chances of economic recovery. If they call it true, could add to the dollar slide. Got gold, will buy more.
Spartacus
(8/21/02; 01:50:28MT - usagold.com msg#: 83451)
Gold
http://www.dailyreckoning.com
A COLOSSAL DECEPTION
By Dr. Mark Faber
----Concerning the health of the financial system, I came across a comment by Len Williams about the hedging techniques of Barrick Gold. Len is the head of fixed-income and commodity research at Durlacher. His work highlights the risk inherent in the derivatives market.
According to Williams, trouble may arise in the gold market if gold prices rise to $400 and above. Such a rise could prove very bad for any big-name banks caught on the wrong side of this price move. He writes that the phenomenon revolves around a highly unusual form of gold derivatives, a market in which Citibank, Goldman Sachs, and JP Morgan are the major players. The particular form of derivative is a type of hedging pioneered by Barrick, one of the world's largest gold producers and a leader in innovative hedges.
Ordinarily, a hedge protects a producer or investor from the downside. Other things being equal, it does so by limiting their upside. Barrick, whose hedge book had assets of $5.5 billion at the end of 2001, however, has managed to construct a hedge that allows it considerable upside if gold rises. And one big bank could be caught very short. Apparently, Barrick has hedged part of its production through a spot deferred forward sale contract. Barrick makes a forward contract with a bank to deliver (unmined) gold at a certain price at a certain date. But what makes these contracts different, and also dangerous, for counter-parties is that Barrick has the right to defer the delivery of the gold for periods ranging from five to 10 years.
More recently, Barrick seems to have entered into contracts that allow it to defer delivery for 15 years. We don't know this for sure, but we do know that the total U.S. notional derivatives position of U.S. banks and trusts exceeds a staggering $44 trillion (GDP is $10.2 trillion) and that JP Morgan Chase controls over $26 trillion, or close to 60%, of that market with assets that only amount to 13% of total U.S. banking assets!
Somewhere, sometime, an accident in the financial system is bound to happen. It is unlikely that such huge positions can be constantly rebalanced without anyone taking a huge hit. ----
Blackjack
(8/21/02; 01:33:48MT - usagold.com msg#: 83450)
Dollar falls on Saudi selling concern
London, Aug. 21 (Bloomberg) -- The dollar declined against the yen, snapping a four-day gain, on concern Saudi Arabian investors may sell U.S. assets in coming months.
The dollar fell to 117.91 against the yen at 7:55 a.m. in London, from 118.83 late yesterday. Against the euro, it fell to 98.33 from 97.82. The dollar is down 10 percent against both currencies this year.
Investors from oil-producing Persian Gulf monarchies hold about $1.2 trillion overseas, excluding property, according to Saudi American Bank. Mideast investors sold up to $200 billion of U.S. assets after some American commentators called for a freeze on Saudi assets, the Financial Times newspaper reported yesterday, citing Youssef Ibrahim, a senior fellow at the Council on Foreign Relations.
``Undoubtedly the fear that this is happening is having an effect on the markets'' and is hurting the dollar, said Steve Englander, senior currency strategist at Citigroup Inc. In coming weeks the dollar could weaken to $1.03 per euro, as investors weigh up the prospects for U.S. growth, he said.
A lawsuit against Arab banks, individuals and Islamic charities filed on behalf of the families of those killed in the Sept. 11 attacks asked the courts in Washington to freeze U.S.- based assets of the defendants, including Saudi Arabia's biggest bank, National Commercial Bank, and Saudi Defense Minister Prince Sultan bin Abdulaziz al-Saud, a brother of Saudi Arabia's King Fahd.
Spartacus
(8/21/02; 01:06:36MT - usagold.com msg#: 83449)
Brazil woos nervous US banks
http://news.bbc.co.uk/1/hi/business/2205899.stm
---Brazil's top financial officials are pressing for a meeting with major American banks to ask them to continue to roll over loans to Brazilian firms.
Brazil's economy is suffering because overseas banks are cutting off loans or tightening their credit terms due to fears that Brazil may default on its foreign debts after the October presidential election.
"There's a lot of pressure because banks are reluctant to finance exports because they're losing money," said President Fernando Henrique Cardoso.
He said the delegation to New York would be led by Brazil's finance minister, Pedro Malan, and Arminio Fraga, president of the country's central bank.
------------
The mission to American banks, which is likely to take place next week, will be hosted by the US Federal Reserve.
US banks with significant exposure to Brazil include Citigroup, JP Morgan Chase and FleetBoston Financial.---
Blackjack
(8/21/02; 00:42:13MT - usagold.com msg#: 83448)
Trade War growing with Cina
BEIJING -(Dow Jones)- China's General Administration of Customs imposed retaliatory tariffs on imports of ordinary wire rod and hot-rolled ordinary steel plate of 15% and 26% respectively on Friday, after they exceeded their quotas.
The administration also applied retaliatory tariffs on imports of galvanized zinc plate and cold-rolled steel of 23% and 18% respectively, a statement on the administration's Web site said.
China imposed the new 180-day tariff regime on May 24 in retaliation against the U.S.'s March decision to impose steep tariffs on most steel products.
The retaliatory tariff regime imposes tariffs of 7% to 26% on steel products once those products exceed a designated quantity within the 180-day period.
China's imports of galvanized tin plate and colored steel plate from May 24 to Sunday exhausted 83% and 97% respectively of retaliatory steel quotas, the statement said.
China has joined other steel producers in protesting U.S. tariffs of up to 30% to the World Trade Organization.
China has also demanded U.S. compensation for damage to China's steel industry and threatened retaliatory tariffs of 24% on U.S. exports of waste paper, bean oil and electric compressors.
_________________
This is what happens in a deflation depression scenario.
Remember Taft Hartley? Countries try to protect their
dwindling job market. Expect more of this in coming years.
Gold, get you some.
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