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ARCHIVED DISCUSSION FROM 12/21/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) TownCrier (12/21/06; 19:06:06MT - usagold.com msg#: 150407) *NEW* at The Gilded Opinion: 'The Triple Decade Effect' by John Richardson http://www.usagold.com/gildedopinion/richardson.html The Triple Decade Impact is predicated on ideas that throughout the entire history of the 20th Century there have been the resounding themes of some three decades of increasing prosperity, followed by a lean period lasting about one decade that's either a contracting or stagnating period of very high inflation and where Gold has tended to mitigate uncertainty by its increasing percentage dominance of financial reserves....the future looks likely to be a time of great opportunity where some deft investing could potentially have the best of both Worlds... A continuing boom in stocks for some or much of the coming year, that could very well be accompanied by an inexorable rise in Gold and Silver prices, but what investors should be deftly aware of and watch for, are the signs of what looks to us, what will become an inevitable impending inflexion point, where stocks will peak out, and Gold and Silver prices will keep going higher. What we should be reading from this is that the coming boom in Gold and Silver could be monumentally greater, than perhaps anyone can imagine...^---(see url for full commentary)---Thanks to John for his kind permission to republish this report in which he is not shy about predictions of $7500 gold.R. Sundeck (12/21/06; 16:52:40MT - usagold.com msg#: 150406) Christmas listening for The Forum http://www.abc.net.au/rn/boyerlectures/default.htm Ho ho ho ho....That time is almost upon us again.The attached link provides some easy listening for forum members...the outgoing Governor of the Reserve Bank of Australia, Ian McFarlane, gives this year's Boyer Lectures...six in number...entitled "The Search for Stability".Snip:"The 2006 Boyer lectures, delivered by Ian Macfarlane AC, are about how we have struggled to find a means of ensuring a stable growth path for the economy. We thought we had it, we lost it disastrously, we half-regained it, then we fully regained it. But is it permanent, or is there a new set of challenges waiting to trap us?"Settle back in your favourite chir with your full belly and glass of port and listen to what the good ex-governor, the Australian contemporary of Big Al, has to say about world monetary affairs, with emphasis on Australia...Happy listening...Ho ho ho ho:-) Thoreauly (12/21/06; 16:12:28MT - usagold.com msg#: 150405) "Clueless in China" (and in the US) http://commentisfree.guardian.co.uk/james_k_galbraith/2006/12/clueless_in_china.html The author's irksome professional snobbery aside, his assessment is right on the money regarding Sino-Us relations, not to mention the absurdity of the welfare state:____________Next, having credited Chinese growth partly to its high savings, Bernanke made his second argument: China should now bring its savings rate down. This he said should be achieved by improving China's social safety net, so that Chinese families would feel less need to squirrel away funds to cover health care and old age [i.e., take care of themselves and their own]. Apart from the direct benefits, Bernanke argued that this would reduce China's trade surplus by increasing Chinese household consumption.Finally, as the US delegation left town, Paulson rather gratuitously promised to try to increase private savings rates in the United States, which Paulson wants to do, of course, by cutting Social Security and Medicare.So here's the Bernanke-Paulson position in brief summary:1) China's currency strategy has helped produce rapid growth for 30 years; therefore it should be abandoned.2) China's high savings rates have been a key to this success; therefore they should be reduced.3) China, a country emerging from communism, should spend more on public health and social security, so that ordinary Chinese can save less. 4) The United States, a capitalist country, should spend less on social security and public health, so that ordinary Americans will be forced to save more.5) Somehow, all this will reduce the deficit in the US-China balance of trade, a goal whose importance everyone agrees on but that no one can actually explain.__________"No one can actually explain"? Chris Powell (12/21/06; 15:15:18MT - usagold.com msg#: 150404) Paulson and Bernanke were clueless in China http://commentisfree.guardian.co.uk/james_k_galbraith/2006/12/clueless_in_china.html By James K. GalbraithThe Guardian, Manchester, England, UKMonday, December 18, 2006Speaking as I rarely feel entitled to do, on behalf of all my fellow professional economists, I felt true, true sympathy last week for Ben Bernanke, as he trailed after Henry Paulson in China.Paulson's China policy is easily understood. In the United States government the Treasury represents the interests of Wall Street, as Joe Stiglitz has written eloquently from direct observation. An alumnus of Goldman Sachs, Secretary Paulson is ideally suited to his job. And what Wall Street wants from China is what Wall Street always wants: the freedom to speculate (excuse me, invest) in currency, corporate stocks and bonds, and real estate. Wall Street loves risk, uncertainty and volatility. The Chinese don't. This is a conflict. It is not in any sense a complicated question.Paulson made a power play, based on a threat: open up or we'll shoot. More precisely, it was a power play based on a bluff. Since the bluff was transparent, the Chinese called it. And when they did, the US side folded. The Chinese then completed the hand by giving back a few symbolic concessions, so that Paulson's team would not have to admit to the obvious fact, that the trip had accomplished nothing at all.For Paulson, a business negotiator, it was pretty much routine stuff: sometimes you win and sometimes you don't. But Bernanke is an economist. Despite his high public position, he is at heart an academic. In other words, he has standards, and a certain amount of professional dignity to maintain.And last week he had the sorry job of putting economic lipstick on Paulson's pig. More than that: Bernanke had to argue that it was in China's economic interests to go along with Paulson's plan. Worst of all, he had to talk past the Chinese officials, who somehow seemed to feel that they have a better understanding of their own interests. It must have been dreadfully embarrassing. Bernanke gave it a good college try, with an impressively wonkish speech, replete with 22 footnotes, delivered to the Chinese Academy of Social Sciences. On no evidence at all, he argued that a higher RMB would help China maintain its economic growth. The trouble with this that current policy has given China world-beating economic growth for three decades. Bernanke knows this (and said so), so he couldn't press this argument very far. Next, having credited Chinese growth partly to its high savings, Bernanke made his second argument: China should now bring its savings rate down. This he said should be achieved by improving China's social safety net, so that Chinese families would feel less need to squirrel away funds to cover health care and old age. Apart from the direct benefits, Bernanke argued that this would reduce China's trade surplus by increasing Chinese household consumption. Finally, as the US delegation left town, Paulson rather gratuitously promised to try to increase private savings rates in the United States, which Paulson wants to do, of course, by cutting Social Security and Medicare.So here's the Bernanke-Paulson position in brief summary:1) China's currency strategy has helped produce rapid growth for 30 years; therefore it should be abandoned.2) China's high savings rates have been a key to this success; therefore they should be reduced. 3) China, a country emerging from communism, should spend more on public health and social security, so that ordinary Chinese can save less. (This is actually a good point, as far as it goes.)4) The United States, a capitalist country, should spend less on social security and public health, so that ordinary Americans will be forced to save more. 5) Somehow, all this will reduce the deficit in the US-China balance of trade, a goal whose importance everyone agrees on but that no one can actually explain.Adam Smith wrote it; I only quote it:"Such as they were, however, those arguments convinced the people to whom they were addressed. They were addressed by merchants to parliaments and to the councils of princes, to nobles and to country gentlemen, by those who were supposed to understand trade to those who were conscious to themselves that they knew nothing about the matter. ... Those arguments therefore produced the wished-for effect. ... The attention of government was turned from guarding against the exportation of gold and silver to watch over the balance of trade. ... From one fruitless care it was turned away to another care much more intricate, much more embarrassing, and just equally fruitless."-------James K. Galbraith holds the Lloyd M. Bentsen Jr. chair of government/business relations at the Lyndon B. Johnson school of public affairs at the University of Texas at Austin. He is a senior scholar with the Levy Economics Institute and chair of the board of Economists for Peace and Security, an international association of professional economists. His new book is "Unbearable Cost: Bush, Greenspan, and the Economics of Empire" (Palgrave MacMillan, 2006). USAGOLD Daily Market Report (12/21/06; 15:12:35MT - usagold.com msg#: 150403) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.THURSDAY Market ExcerptsDecember 21 (from Reuters) -- Gold futures extended their losses by Thursday's close as short-term speculators took a late cue from falling crude oil prices and liquidated their long positions, traders said. "Tomorrow's the last day before a long holiday and some people were probably liquidating long positions. Nothing major. If it closed anywhere within today's range, it would not have been a big deal," said one gold trader.Benchmark February gold at the COMEX division of the NYMEX fell $2.70 to finish at $621.60 in a trading band between $620.60 and $625.40. The contract held well above above Monday's low of $615.10, which was last seen on Nov. 1st.Traders emphasized that business was very slow on the last full trading day before the long Christmas weekend. "It was dead quiet and staying in a tight range. I think it came off when people who were long during the day or last night just hung on to sell at the end of the day," said one dealer.In early business, gold advanced when the final reading of third-quarter U.S. growth came in below expectations. The U.S. economy grew at a less vigorous rate during the third quarter than previously reported, according to the final reading of U.S. gross domestic product. Growth was slowed by the sharpest slump in housing activity in more than 15 years.But some late gold sellers used falling oil prices as their cue to liquidate precious metal holdings. U.S. crude oil futures ended sharply lower on Thursday on pre-holiday profit-taking, a day after the government reported ample refined product supplies as the U.S. Northeast basked in mild temperatures at the start of winter.---(see url for full news, 24-hr newswire)--- Goldilox (12/21/06; 14:15:38MT - usagold.com msg#: 150402) Emerging from the wreckage @ Gandalf,Glad to hear you're OK. I moved to Lake City from South Bend, IN, in 1962, after having gone through a serious tornado that fall. When twisters hit Elliot Bay, we were blamed for bringing them with us, although those twisters were nothing like the F3 we had just experienced.Sounds like there will be some major rebuilding and cleanup going on for a while. mikal (12/21/06; 13:45:39MT - usagold.com msg#: 150401) @Gandalph http://www.drachenbande.de/fantasy/wizard1.htm Back in FULL uniform(now that the skies have cleared somewhat) :)http://www.drachenbande.de/fantasy/wizard1.htm mikal (12/21/06; 13:42:33MT - usagold.com msg#: 150400) @Gandy http://www.gandynet.com/art/Virgil_Elliott/The_Wizard.htm Welcome back. Matthew (12/21/06; 13:29:05MT - usagold.com msg#: 150399) Negotiations with the Headmaster show few signs of progress on discipline issues. http://www.nytimes.com/2006/12/15/business/15trade.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1166728614-KWkZrp22jMD8UbRxtlQBtA Don't you just love the lapel badges? mikal (12/21/06; 13:25:13MT - usagold.com msg#: 150398) More holiday floats on parade in NY http://www.ny.frb.org/markets/seclend/sec_lendop.cfm NY Fed Daily Securities Lending Activity | December 21, 2006 Matthew (12/21/06; 13:17:55MT - usagold.com msg#: 150397) Silver looking healthy? http://ww2.samsung.co.za/silvernano/silvernano/washingmachine.html The re-emergence of silver as an effective anti-microbial can only be positive for the value in the long term. Gandalf the White (12/21/06; 13:17:45MT - usagold.com msg#: 150396) WOWSERS !!!! <;-) WHAT a storm ! Finally, I am back online !YES, this was the first major test of Black Blade's recomendations, in the Western portion of the GREAT Pacific Northwest.November was the MONSOON season of the Century, with all time RECORD rainfall for the month!The rain (as seen in the Thursday night TV broadcast of the Seahawk's football game) and the following windstorms darkened the homes of over one million CUSTOMERS of the four major electrical suppliers in the Seattle-Tacoma area of Western Washington. (and there are still about 100,000 still without power.)I see now that SIR MK's Denver area is experiencing some of the same challenges with a heavy dose of SNOW !Happy Holidays, All.<;-) mikal (12/21/06; 12:44:54MT - usagold.com msg#: 150395) Why wild market action? http://www.geocities.com/tbhpolitoon/628.JPG Because it's a jungle out there, in spite of Tarzan, Jane and the boy: http://www.geocities.com/tbhpolitoon/628.JPG mikal (12/21/06; 12:34:41MT - usagold.com msg#: 150394) Fed adds http://www.ny.frb.org/markets/omo/dmm/temp.cfm Repo stuff mikal (12/21/06; 12:31:00MT - usagold.com msg#: 150393) Do the CB thing, print your own Ameros http://www.amerocurrency.com/images/bush_peso.jpg "Free at last. Free at last. Good God Almighty, free at last!" - MLK http://www.amerocurrency.com/images/bush_peso.jpg mikal (12/21/06; 12:24:31MT - usagold.com msg#: 150392) Musings on the road to "the day after" http://www.financialsense.com/editorials/phillips/2006/1220.html Confidence in the U.S. $ is fallingExcerpts from GLOBAL WATCH:THE GOLD FORECASTERby Julian D.W. Phillips - December 20, 2006 - Snippits:"As the continued deficit continues to command somewhat myopic attention [it was less than expected but still around $60 billion a month], we do well to look at the impact on confidence in the unit as the Trade deficit rolls on month after month year after year."*Phillips combines good analysis with some banal but obligatory reports on dressed-up government deficit figures.The following remarks are very predictive (and thus in character with a subscription advisory letter), but still insightful IMO:"An inevitable and unstoppable trend is that all non-emerging nations are subject to a draining of wealth either to the oil producers or to the emerging East as it provides cheap, but often equal quality goods to West. The efforts to retain such wealth cannot succeed without protectionism or direct blocks on the imports of such goods. This is unlikely to happen until it has already reached crisis proportions. Such moves have to be preceded by Capital Controls which in turn will be preceded by a major U.S.$ fall. Gold will be above four figures by that time and probably have been there for a while." mikal (12/21/06; 12:13:34MT - usagold.com msg#: 150391) Russell has more reasons to avoid equities http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5ED28EFF%2D6A10%2D47C8%2D84C9%2DA03449C3AC02%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo PETER BRIMELOWRussell's stingy with holiday cheerPeter Brimelow, MarketWatchLast Update: 1:34 AM ET Dec 21, 2006NEW YORK (MarketWatch) -- Excerpt: "Santa Claus may have come and gone. But the Grinch is still here. The Dow industrials' stall after making a new high Tuesday upset some commentators. Stocks have been strong for six months. How long can it go on? In circumstances like this, I like checking with Dow Theory Letters' octogenarian Richard Russell because of his record of calling major market turns, his strong market timing performance as measured by the Hulbert Financial Digest, and his endlessly active mind."Mikal-- Don't be without gold in this phase of theworld economic crisis. The list of valid reasons the Dowis a safe place to be is inversely proportional to a lofty quantity of excuses for investing there. Survivor (12/21/06; 11:40:24MT - usagold.com msg#: 150390) More Pacific Storm We just came back on-line also. Six+ days of self-reliance is always a wake-up call. As part of this discussion community, no one will be surprised that six days did not stress our ability to be on our own. We used all 15 gallons of fuel stored with the small generator, but did not start the big generator or use any of the 90+ gallons of fuel stored there. The stored fuel and the frozen food would have lasted another 20 days or so. It is sobering to consider the food scenario after 30 days.Heat and water were not a problem as the wood shed is full and the lake is only a short walk.After the first day, the downed trees were cleared from the only road and we could get out for supplies, but it was very nice to know we didn't really need anything.The long quiet evenings left plenty of time to contemplate the importance of Black Blade's wise words about being prepared for the worst.It was interesting to realize that while we would never be without it, a stash of the shiny was not going to help with the immediate need for emergency heat, food, and water.- Survivor Goldilox (12/21/06; 10:31:44MT - usagold.com msg#: 150389) How bad was the Pacific NW storm? Here's ring-side view from Cliff, of the Web-bots.Salve omnes,Well, we're back, sort of. Electricity returned to our street last night at midnight after 6 days , 12 hours without any. My efforts at rebuilding the diesel generator were successful in the main, however, only a few hours later, the local electrical utility showed up to work the street. It was so bad that 2/two trailers of power poles were required on our street alone, and it took 7/seven crews over 18 hours to repair the damage here and return the spark to life. Igor is not so lucky. He and wife and 2/two cats have been camped out at either his office (from 1/one of his other 3/three jobs) or over at friends. Her school is off on break, so no worries there. Igor says they will have electricity back on late Sun or Monday. It was indeed nasty out here. On a road of only 2.25 miles in length, there were over 50/fifty down trees. And these are not small critters, but each a large fir over 100/one hundred feet in length. The wind meters on a local fence were ripped off in a 88 mile gust (last recorded speed before failure).My growdome of some 1900/nineteen hundred pounds weight was lifted 8/eight feet off the ground and smashed 10/ten feet away. This is just a small part of the damage. ???? Goldilox (12/21/06; 08:50:58MT - usagold.com msg#: 150388) MIlitary "budgets" @ Thoreauly,Gotta wonder if there are as many billionaires slopping at the trough of China's military budget as there are feeding in DC. We got so tired of hearing about $700 hammers and toilet seats during the Reagan buildup, that no one bats an eye when a few $billion go missing these days.Of course, my favorite is the domestic rip-off of 85% of the New Orleans reconstruction funds by many layers of well-connected "subcontractors". It's tragic to watch them the "low contractor on the totem pole" bus in aliens to "make ends meet", leaving the American citizens who most need work in refugee status of their own. IMHO, this is Globalism at its worst!If we assume similar levels of graft and waste in our impressive military expenditures and not so well documented foreign "adventures", the budgets are hardly a reasonable comparison of battlefield readiness, as Viet-Nam and Iraq have clearly demonstrated. We have the power to annihilate, but obviously lack the power to control. Thoreauly (12/21/06; 06:58:52MT - usagold.com msg#: 150387) US military buildup http://towardfreedom.com/home/content/view/911 And with Bush having recently suspended the Posse Comitatus Act (see link), the way is now open not only for greater military intervention abroad (i.e., in the Middle East) but for martial law at home.As for the world's largest armies (Federal_Reserves #150379), when "defense" departments as a whole are compared, there's already no comparison, as the US military budget "is larger than the military budgets of the next twenty largest spenders combined, and six times larger than China's" -- http://en.wikipedia.org/wiki/Military_of_the_United_States#ExpendituresLet's face it, what we are witnessing is the desperate attempt of a collapsing empire to save itself from itself, which history has gone out of its way to prove cannot be done. ViewYesterday's Discussion.
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