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ARCHIVED DISCUSSION FROM 3/2/2004
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Jacob Marley (03/02/04; 23:15:07MT - usagold.com msg#: 117975)
Belgian - more oil/dollars/gold/euro
http://news.bbc.co.uk/2/hi/business/3516129.stm
Further kind Sir, you mentioned to TC: "Dollar doesn't say a word about the POO and is evidence to me that the dollar supports the POO-rise (oil-inflala), as long as it is priced in dollar !" --- Would you mind commenting what you think about what looks like a strategy of military and armtwisting diplomacy by US to have a greater say in oil pricing as we go forward? I mean the multi-pronged efforts: a) strong persuasion to bring Libya into their influence, b) carrot diplomacy in Central Asia (Kazakhstan, particularly), c) the discrete presence/involvement not only as you mention: Congo -> gold, but also in oil rich areas of Africa, d) military takeover of Iraq, e) cheerleading (and who knows what else) the protests in Venezuala to oust Chavez, f) continued pressure on Saud to toe the line in the name of fighting terrorism, g) etc.

If (IF) Iraq can be tamed (no "provoked" civil war as you posit), and if (IF) Venezuala falls in their favor (oust Chavez, and successfully (also big if) see a replacement be anti-OPEC, and pro-US), then with pressure still brought to bear on Saud -could they break the back of OPEC (???) So, where really is purely opportunistic Russia in all this? They historically play the Anglo axis against the continent since Peter.

What is your take on the (China-upsetting) probable decision to route a major pipeline in Siberia to the coast (good for Japan, and by extension US), instead of heartland China (see link)? I personally think that Russia wants its economic future tied to Euroland (at least short term, as we'll look at below), but will take advantage of the knowledge that E-land covets this notion, too, so they have the luxury of acting capriciously (as they always do). This amounts basically to Russia seeing that Europe needs Russia more than Russia needs Europe. Hence, a pipeline to the coast has as its Russian benefits: diversification (not only China as sole consumer), and as the article indicates, Japan "offered big financial incentives, and the prospect of energy cooperation with Russia." (Note also the pieces falling into place as to why Khodorkovsky (Yukos) is in jail.) But the disadvantages are tensions with China, as not only is this a business-wise disappointment to them, but also a public thumb the nose embarrassment to them, which is not good manners, surely.

In the end, it is another plus for sustaining an environment that supports dollar-oil pricing, by securing another decent daily quantity for US consumption (so long as the pricing is in dollars, who do we think will be able to outbid other market agents for this oil?). This aggravates the issue you discuss, whereby ME oil may be saying "As if oil was saying : Get that euro up against the dollar or face the reverse."

Is Russia playing both ends against the middle? On the one hand cooperating with beneficial US dollar strategy, on the other cooperating with Euroland just enough to get support from there, until the necessary portfolio adjustments are made. Does this self-serving activity, if carried too far, risk breaking the euro plan by helping prolong economic stagnation there to the point where politically the ECB (even though heretofore behaving very independently, and according to charter), is forced to take politically driven measures, and destroy the foundation it has built, causing it to behave just like another dollar extension currency, and relegating it to second-tier status? Even though the major structural difference of marking reserves to market would still be in place, this big break with the past in terms of currency credibility forces it to be a purely abstract mechanism, whose support is 100% based on faith in the issuing institution to be responsible with its currency, and not driven by parochial political motives.

In the current paradigm, this is allowable, so long as something else provides assurance of the currency's acceptability via something enforcing even a nominal semblance of an over-issuance restraint. In other words, how does it fare in terms of important things like gold and oil pricing. Since the mark2market mechanism risks visible and possibly volatile changes in the currency's value, a 100% abstract basis for credibility requires 100% unwavering years of trial and proof to demonstrate adherence to charter (principally price stability vis-a-vis HICP) -- even in the face of much temptation and pressure to accommodate local micro-economic needs. The goal of the US, who knows this, is to cause ECB to yield to pressure, since it makes the currency out to be politically prone just like any other, and would make global big players say, "the euro is acting just like the others, so why should I leave the devil I know? Also, this mark-to-market stuff is scary now cause it leaves too much uncertainty."

Is this perhaps, what hegemonic Russia REALLY wants? Since this would weaken Europe, and extend a dollar timeline and its economy further into the abyss of an overconsumption with no more productive growth blackhole - whereby the $ remains a "reserve" currency still, but only retains its strength on the basis of pure overwhelming derivative use requirements, which allows the US to hyperinflate, and overspend without any benchmark to reality, all the way into oblivion, but still without visible consequence (mega price increases) for a little bit longer?

If it is, then this explains a tendency to sow the seeds to disgrace China, as it would need them politically weaker. And Russia sidling up to Japan benefits both parties, as Japan also needs a contingency for a fall in US strength and status. Japan is unloved by China, we all know, but is currently exporting much bigger big time to them, and not only for goods to turn around and sell to the US, but for goods consumed in China. These numbers are impressive when compared to its exports to the US now, and indicates a diversification from reliance on the US consumer, but this is not the ideal trading partner for J for political reasons. So, they need a Russia to play off against them. Europe is too far away, historically not participant with Japan, and likely to favor its historic senses toward China, if a choice had to be made. So again, can/will J kiss and make up over those stupid islands, and deal in pure strategic cooperation with Russia? I think it's possible.

So, personally, I think Russia is in a pretty good seat. They need time to get their house in order. They can get Europe support for oil/gold price dynamics for quite a while yet, all the time getting favors from the US, if they at least give the apperance they are being team players. Russia must secure Japanese strategic alliance, and forget its past differences. Russia must try to weaken Chinese global leadership ascendancy. And. If Russia's intent is to be a peer in the European vision, then it must not spurn too long European good will, lest it risk destabilizing euro-monetary foundations. Or. If Russia really wants to rise ultimately to overall leadership in the region (more typical of its centuries old tendencies), it will try to cause this destabilization, and ultimately reduce European intentions, by forcing changes in the monetary nature of the euro, that take a lot of the steam out of their zone-expansion initiatives.

Just a few ramblings from my end. If you think it worthwhile, what do you see from your perspective? TIA.


Druid (03/02/04; 22:57:50MT - usagold.com msg#: 117974)
Money, Gold, and the Great Depression
http://www7.tamu-commerce.edu/ecofin/courses/funderburk/572/yesa.txt
Thanks goldquest for the link.

"If the present monetary structure were producing
satisfactory results, we would be well advised to leave
it alone. Tactics would then be the only topic. Howev-
er, the present monetary structure is not producing
satisfactory results. Indeed, in my opinion, no major
institution in the United States has so poor a record of
performance over so long a period yet so high a public
reputation as the Federal Reserve."
************************************************************
Druid: Psst, hey Ben "never know when to stop myth making" Bernanke, you omitted one of Milty's most recent salient discussions reference the torture chamber you hold so dear. At least, at a minimum, when developing and putting forth more myths, try to stay abreast of the most recent writings and interviews.

Topaz (03/02/04; 22:41:10MT - usagold.com msg#: 117973)
Euro/Gold
http://www.futuresource.com/charts/micro.jsp?d=LOW&go.y=13&r=&p=D&b=line&s=dx1%21&s=gc1%21&s=fvxy&s=tyxy&go.x=12&v=
...and for those whose interest in the "price" of Gold is purely academic, the Euro has once again found it's equilibrium @ 320 and a move upward could be expected...in fact $ could well outshine E AND Au in the short-term.

Liberty Head (03/02/04; 22:36:52MT - usagold.com msg#: 117972)
Darkness!

Unbridled government spending begets unbridled taxation.
Inflation is but another word for tax. Many folks are fooled by the inflation ruse, so accountability remains homeless, fights remain unfought. The enemy remains unseen.

Because we have a democratic government, we do have a choice.
Our choice for the next presidential election is between the party of high taxes with higher inflation, and the party of high inflation with higher taxes.
Sadly, the will and the way to contain government spending lack critical mass.
Within this type of situation, self-preservation is all-important.
Thankfully, gold can help us offset our losses. It may be a zero sum game, but these days zero is a relatively high number. Zero puts us ahead of lots of other folks.
With gold, one may not outrun the bear, but one can outrun the herd.

Best Wishes


steady (03/02/04; 22:19:17MT - usagold.com msg#: 117971)
peace!
borrowed!
That triumph of realpolitik over intellectual abstraction is worth remembering today.

goldquest (03/02/04; 20:28:55MT - usagold.com msg#: 117970)
Money, Gold, and the Great Depression
http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm
Gee, it sounds like Bernanke doesn't like gold!

Ag Mountain (03/02/04; 20:18:52MT - usagold.com msg#: 117969)
specie-man, why all the extra complexity?
If we keep our eyes on the real value everything else drops away like unnecessary balls in a mathematical juggling act.

Step 1. Venezuala has oil.

Step 2. Make sure it is sold at a market that provides something of equal value in return.

The End.

It's hard to accept the objective of your elaborate steps is to have a bigger pile of weaker dollars if there's no real end gain in total value. There'd have to be a deeper political objective going on.

Boilermaker (03/02/04; 19:26:49MT - usagold.com msg#: 117968)
Greenspan/Fedspeak
Goldilox-
Bill Murphy posted a letter from Dan Norcini at his Le Metropole site today that analyzes Alan's recent barrage of commentary (in part):
"One has got to hand it Sir Alan - he has become amazingly adept at speaking in such a manner that anyone listening can hear exactly what he or she wants to hear. I think he has "outpoliticianed" the politicians!"

The shear quantity and frequency of Fedspeak is giving me the impression of near panic. A confident Fed would not need to advertise its every thought or express that past decisions were correct and all is well. I prefer the T Roosevelt approach, speak softly and carry a big stick. The Fed is way out of bounds and Alan knows it.

Boilermaker

specie-man (03/02/04; 19:16:18MT - usagold.com msg#: 117967)
Venezuela's Revenge
Venezuela could do this:

1. Borrow large quantites of US Dollars.

2. Exchange those dollars for Euros (or whatever).

3. Stop (or reduce) shipments of oil to the US. The US Dollar would then surely decline in value.

4. Exchange the Euros (or whatever) for Dollars (and make a profit).

5. Pay back the loan with those devalued Dollars.

Not to mention that this would drive the price of oil higher.

Hmm... looking at the recent history of the Dollar (DX), maybe somebody in OPEC just did that !





Jacob Marley (03/02/04; 17:41:14MT - usagold.com msg#: 117965)
Belgian - death and taxes.
http://www.themoscowtimes.com/stories/2004/03/03/014.html
Mr. B - first thank you as always for your illuminating perspective. You mention to TC yesterday: "At present, Russia tries to organise serious Tax-collection-system..."

Curious the selection by Putin, no? (forgive, if this has already been noted here, but I am only able to glance the forum of late) -- from article:

President Vladimir Putin's surprise nomination of a low-profile bureaucrat as his new prime minister is intended to strengthen his already nearly absolute power, newspapers said Tuesday.

"The president's message is quite clear -- he is assuming even more powers and is going to decide things by himself," Vedomosti wrote about the nomination of former Tax Police chief Mikhail Fradkov.

"The first reaction to his name was shock. Many participants initially thought it was a joke," Izvestia said.


Goldilox (03/02/04; 17:33:50MT - usagold.com msg#: 117964)
GS reference
Actually, I was referring to his triple reminder that the FED discount rate could not remain "accomodative" forever. I think he said it in terms like, "I have stated, my collegues have stated, WE have stated . . ."

in an obvious apologetic appeal.

Boilermaker (3/2/04; 16:46:57MT - usagold.com msg#: 117963)
Greenspan Hints of Rate Hike
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20040302-001001-1624
snip
Mr. Greenspan seldom sends significant new signals on monetary policy in unscripted settings such as Tuesday's. Still, his remarks in the past month have played down the risks of inflation falling further. For example, he noted in his prepared remarks Tuesday that import prices have risen by far less than implied by the dollar's fall, in part because European exporters have hedged their exposure to the dollar's decline against the euro. As those hedges expire, "dollar prices of imports will surely rise."

Goldilox;
Is this what you're referring to in your msg 117962? I think he's seeing the liklihood of a new administration and starting to respond to that outcome. Here's a scenario: No more Mr. Nice Guy. Screw the retiree's and the big spenders. Look for a rate hike sooner than later to nail the wayward admin and send a Paul Volcker message to the markets. Help the $ commit suicide and recommend a Euro-like currency.
Not likely but possible?

Goldilox (3/2/04; 15:24:15MT - usagold.com msg#: 117962)
Venezuela Analysis
@ Boilermaker:

Thanks for the interesting take. I haven't been too impressed the protectionism talk coming from the demo front-runners, but improved foreign relations is sorely needed.

On another subject, notice how GS mentions "inflation" three times as soon as the $ rises. At least he's not missing that inevitability.

Boilermaker (3/2/04; 15:18:21MT - usagold.com msg#: 117961)
Sharks Circling Bush
Goldilox,
I think GWB is already seen as a lame duck by those chaffing to get out from under his judgemental disapproval. As the year wears on and the Dems get their act together (if that's not an oxymoron) the polls will diminish what little goodwill that "W" may have with friendly nations and reduce the fear factor with the likes of Chevez and others not so friendly.
Boilermaker

Boilermaker (3/2/04; 15:01:24MT - usagold.com msg#: 117960)
Deja vu
http://biz.yahoo.com/rf/040302/economy_homeprices_3.html
snip
NEW YORK, March 2 (Reuters) - U.S. home prices increased
8.4 percent last year, aided by historically low mortgage rates
and confidence in an improving U.S. economy, mortgage finance
company Freddie Mac said on Tuesday.
Prices rose 17.8 percent in the fourth quarter of 2003, the
fastest pace in 26 years, Freddie Mac (NYSE:FRE - News), the Number 2
buyer of mortgages in the United States said in a statement.
"The 17.8 percent gain is the largest quarterly growth rate
since 1977, when it was 21 percent," said Amy Crews Cutts,
deputy chief economist at Freddie Mac. This year, she added,
home values should rise between 6 percent and 8 percent.
That gain is "huge when you think that inflation is 1.5
percent. So, the real growth is tremendous in those home
values," Crews Cutts told Reuters

comment
Hmmm... "The 17.8 percent gain is the largest quarterly growth rate since 1977"
Gee, I remember 1977. That was a great year for real things but not so hot for stocks. LT interest rates were near 8%Short term interest rates were about 6% bonds were headed down. Inflation and unemployment were both at 6%. Gold went from $130 to $165 and silver was going from $4.30 to $5.00.
I also remember haggling with the National Park Service over my 100 acre farm they had condemned and taken for a new park. Thankfully I invested a lot of the $ in oil and gas stocks that were streaking. So I made out ok from the forced conversion.

Anyway, what's my point? 1977 was prelude to the biggest commodity run in my memory. Have you noticed some similarities with today? The only thing that's not the same is inflation. Thank God we've corralled that demon.

Goldilox (3/2/04; 14:57:17MT - usagold.com msg#: 117959)
oops -
"not lacking"

Goldilox (3/2/04; 14:56:11MT - usagold.com msg#: 117958)
Venezuela oil cut threat
http://finance.news.com.au/common/story_page/0,4057,8844185%255E462,00.html
snppet:

"BELEAGUERED Venezuelan President Hugo Chavez has sent a tremor across the international oil market with threats of cutting oil exports to the US.

Predictions the oil price could soar above $US40 a barrel if Venezuelan oil stopped being shipped to the US come as the rapid resurgence in the US economy is forcing a realisation high crude oil prices are here to stay in the medium term, at least.

The left-wing Venezuelan leader made the warning in a fiery speech to supporters in which he accused US President George W. Bush's administration of backing opposition attempts to oust him from the presidency of the world's No.5 oil exporter.

"Mr Bush must know that if he gets the mad idea of trying to blockade Venezuela, or, even worse, of invading Venezuela, if that happened, the people of the United States should know that not a drop of oil would reach them from Venezuela, not a drop more," Mr Chavez told tens of thousands of cheering supporters."

Goldilox:

The thot plickens! So far, Chavez has used a tactic of publicly addressing covert US intervention. Not too sure of the wisdom of his tactics, but he's lacking cojones.


Socrates964 (3/2/04; 14:48:54MT - usagold.com msg#: 117957)
Belgian
Actually, I was thinking more generally, but while we're on the subject of Schroeder, I remember that when he lost control of the SPD in early-Feb, die Welt (I think) pointed out that he was basically friendless, and his only hope was an economic recovery. Hence calling on the ECB to cut rates is just begging for charity.

There is a more profound point here:

Is the fixing of POO in Euros a done deal? If so, the ECB has much more latitude in using the Euro as a political weapon domestically, since it knows that its trading partners (mainly those in the Middle East) will not be unduly perturbed if $/E jumps around a bit.

I'll bet that the Euro is still on probation, which explains why Trichet made his remarks about excessive volatility.

A friend of mine nevertheless pointed out that Trichet is a far more complex and political creature than Duisenberg.

If Schroeder had asked Wim for a rate cut, he would just have told him to get stuffed, since Wim had no additional ambitions. Trichet, on the other hand, may want to be a finance minister one day or something like that, so he can't afford to antagonize the politicians and has to play a craftier game of appearing to agree, but being powerless to influence markets.

How does he do this? I can think of 2 ways: a) you cut a deal with the smaller member states who have excessive voting rights, and they blow hot and cold about their economies overheating while you just smile sweetly, or b) you tip off financial markets to give the inflationary warning signals that you need to avoid cutting rates without appearing partisan.

Commodity prices and POO are already doing the heavy lifting by themselves. If POG rises in Euros, I suggest that it shows the hand of the ECB at work behind the scenes.

The only doubt I have here is the stance of the Fed. We have a kind of null hypothesis of the form: Bush needs a weak dollar to get re-elected, so if anything a Euro rate cut goes against this.

Jim Sinclair may have got it right when he said that the dollar must show some ability to rally so that markets feel that yes, it's still overvalued, but it's not a disaster in the making. This is evidently the same line that they've taken with the economy - trying to pretend that, yes, the US may well be in recession, but it's only a periodic cyclical recession and not a generational structural recession. As always, this will work until the day that it doesn't work - probably on account of some banking system disaster.

What does this all add up to? Well, it looks good for gold short-term, for as long as POO doesn't tank.

Let's assume that the ECB needs gold at E350 as an inflationary bogeyman, and also needs Euro 1.29 to offset commodity price inflation, then you have POG at 450. It may nevertheless stay there for a while.




Belgian (3/2/04; 14:13:02MT - usagold.com msg#: 117956)
@Socrates
Most probably you are referring to the "pro forma" visit of Shroeder to the US ?
These little, politico entre-actes, are imo unimportant within the systemic broader perspectives of ECB's policies and targets. Hedging the $-€ decline is eroding profits in an already contracting (stagnant) euro-economy. A problem that is retarding the €-marching up.
Politico's are economy agnosts/incompetents. They only exist as to serve their electorate for their own survival.
The real stratego's are on a much higher level and I wonder if the $-€ competitors still need to play games and mask their rivalry ?

You were indeed the first one to post on the POO's behavior.
POO in euro higher as to put more pressure on the dollar exch.rate and signal the euro faction not to support the dollar in any way (IRs-other intervention)!?

Let us only watch the major trends and not pull hasty conclusion on these ST position liquidations. Stratego's work with LT-trends. Keep posting Socra.

Belgian (3/2/04; 13:24:10MT - usagold.com msg#: 117955)
New WAG >>> 2,500 tonnes CB-Gold/yr !?
SO WHAT....!?

Today, dollar up (+2%)...Whoooossshhh > position liquidation, immediately followed (not preceding) by convenient, optimistic, sounds from lalaland. But,...look at the POO, NOT declining (yet) with 2% !!!-???

Restudy FOA : 2000 msgs # 7 and 8 and 9 !!! The *** dollar-system *** and the impossibility of a "pure" gold-system, explained. Repeat, the dollar SYSTEM, not the currency.

Today, I met an old yeller (75 yrs), selling some of his precious yellow holdings. Offered him a cup of coffee and wanted to know the psychology behind his goldsale. €-Gold is doing nothing, he firmly stated ! I don't "believe" in Gold, anymore, he complained.

Impossible to suggest to this goldseller, that the €- goldprice containment from trending, was/is on purpose, as to "mobilise" more private Gold (small and big) due to an increasing Gold shortage. This paradox was too much for him to comprehend...and he sold a few coins more. Godmining increased to 2,500 tonnes a year from a steady 1,000 tonnes/yr on top of forward sales of 3,000 tonnes ! Where is all this Gold flowing to !!!-???

Whilst Greenie is having his complicated Forex (unsustainable interventions) talks, Eurolanders are facing rises at the pump. As if oil was saying : Get that euro up against the dollar or face the reverse (€-decline) consequences of the medal with price-inflating, rising €-oilprices ! Remember, that it was (is) EMU + OIL that organized WAG-I. Gold MUST flow,... keep flowing to the right place-places ! Maybe the UK might replace its sold goldreserves with newly mined South African (Aussie) Gold ?


FOA : Wouldn't it not be better to at least not shackle the "money" to "Gold". Indeed, a real Physical FreeGold Market will constantly be devaluing any fiat currency over a long term...while removing the need for CBs to maintain fixed exchange structure through a dirty float against Gold.
And here it comes...The most important aspect is in the *escape-valve-Gold* would provide to developing countries (oilstates,Asia)) with positive trade flows !!!

What would/could a WAG II with 2,500 tonnes, mean ? Provoke another round of goldmine forward sales ? More commitments between underground Gold and underground (Russian) oil ?
Extend the POG-containment (non-trend in €) ? Provide the right $-POG as to make goldmining in the goldstates with strong currencies versus the dollar, profitable as to be able to deliver the Gold for more directed flows ? We ($ + € + yen) keep on agreeing on an orderly deroulement (transition), don't we ? Is a looming (provoked) civil war in Iraq going to permit this "orderly" affair ? Who (what currency-system) can pay himself the luxuary of losing its nervs, prématurally ?

Main question remains, if "oil" is still backing the dollar-system and if yes, to what extend ? Maybe a (probable) WAG II might be put in place as to mobilize some more Gold that could become available when priced relatively low in € ? This, whilst dollar-inflation and devaluation will most probably not create real jobs and hurt the global profitability against rising debts. The very low IRs are making things worse for a wide range of reasons. Maybe we might continue to see low IRs for some time to come,...even up until another currency (gold)system is materialized that might make high IRs superfluous ???

Will see what happens at yearend.

steady (3/2/04; 12:57:42MT - usagold.com msg#: 117954)
surfer joes last request.
http://www.live365.com/cgi-bin/directory.cgi?searchfields=TAC&genre=new%20age
enoy the reactors wake!

Goldilox (3/2/04; 11:56:10MT - usagold.com msg#: 117953)
CB Gold sales
@ Glennh10:

Actually, I was the one who diverged from your point.

Perhaps the reason the sale is reported as such is that sellers are much more amenable to publicity than buyers, especially private buyers.

Socrates964 (3/2/04; 11:49:37MT - usagold.com msg#: 117952)
Thoughts on the Euro
Does anyone share my hunch that the decline in the Euro is being choreographed by an ECB that doesn't want to cut rates but wants to dress up its refusal as a prudent response to market behavior rather than deliberate opposition to politicians.

The evident way to do this is to get inflationary alarm bells ringing. It is thus notable that the Euro did nothing while oil/the CRB was tracking sideways. All of a sudden, when these go into orbit, it begins to weaken, more or less guaranteeing that commodity price inflation will start showing up in Euroland. This must be the best possible excuse for not cutting (or even raising) rates.

The other signal is a rising gold price in Euros. Since the trading range is at E300-50, Gold at E321 still has a lot of upside leeway. Gold has bounced off its low at E315 and now seems to be trudging higher in Euro terms.

Could the ECB be secretly pushing for higher gold???



glennh10 (3/2/04; 10:37:40MT - usagold.com msg#: 117951)
Goldilox - a misunderstanding about gov't gold sales
I'm apologize, but what I meant to say was that there are always buyers for the gold that the central banks have been selling. However, the media never report the transactions as gold purchases, but always as gold sales.

My opinion is that they want to "spin" that the central bank gold sale is causing a newly increased supply of gold to come to market, inferring that the demand side of the gold transaction is unchanged. Their objective in this biased reporting is the hope of lowering the dollar value of gold.

Of course, another factor in the more recent central bank sales (and I'm sure this has been pointed out by the more informed members of this great forum) is that the "gold" they are selling is likely already long gone from their vaults, having been leased. So, in many cases, the central bank gold "sales" that are being reported today are likely nothing more than a "balancing" of the books, a settling of the old gold loans.

So, these central banks are trying to "play the same hand" twice. Each time they loaned out the gold (since the early 1980's), it was sold into the market, while the central bank inventory records remained unchanged. The gold ended up in the market, and purchased into the hands of the new buyers, while that same gold also remained on the books of the central banks.

Now, they are reporting the sale of "gold", which in most cases, is in reality only a paper account of the gold they leased out long ago. They report it as a "gold" sale to the media, hoping to accomplish one final hurrah to suppress the price. As has been said, "Interesting times."

Just some thoughts.




Goldilox (3/2/04; 09:48:52MT - usagold.com msg#: 117950)
DX rally to 88.77
Still going. Puplava and Sinclair have both opined that a dollar rally is bad for exporters. Does this suggest that the profit arbitrage last quarter due to currency exchange rates is not as critical for this quarter's numbers?

steady (3/2/04; 09:38:53MT - usagold.com msg#: 117949)
surfer joe
"hes satisfyed with winning" ny
buoys reactivated, swells upcoming depth duratiuon and timing are unclear now but the data is streaming in, be prepared>

gold and silver
honest money for
honest people

CoBra(too) (3/2/04; 09:38:41MT - usagold.com msg#: 117948)
It's been snowing for days and no end in sight...
... reminding me of the Snow Job the sec trash, uh treas has had to do. Well, with all that shovelling your arms sure grow pretty strong - and that may be why the last G7 meeting was held in a place like Boca Raton. A place pretty safe from blizzards.
Now even being safe from blizzards, some thunderstorms against unilateral precipitation of the reserve currency may have - at least temporarily - shifted to a more "begnign" and accommodating sprinkle. In a way the soggy ground was left to dry off a bit. Only to be followed by renewed downpours - with a vengeance.
... and in the meantime, we're listening in awe as Sir Alan is handing out his treasured words of wisdom.
... and we're still in awe, perplexed and totally confused to hear the maestro's sage words wither government spending, reigning in social security and other measures to curb deficits. Wow, I'm kind'a lost, as I was led to believe to join hands with my neighbors and buy another SUV, another house and pay down less than nothing, after taking out the extra money to spend on other things I don't need, with the cash Freddie and Fannie so amply supplied.

After all, these GSE's are duly hedged for my and any other bankruptcy emerging from their seeming largesse! ... and after all, the only counterparty meeting their derivative hedge positions is - as the name implies - government sponsored. "What me care" - after all (again) the last counterparty standing is at least as broke as the entity it is supposed to sponsor.

Well, now even Sir Alan is alarmed, as he can't print or create enough liquidity from hot air, as the globe is moving towards "Indeflation (TM* Bill Bonner)".

In the next couple of days all listening devices are pointed towards the ECB equivalent of FOMC to see ... if they dare or not to cut their IR to smithereens, as well.

In the final examination it won't make any difference - as the true and blue currency of eons - Gold - will make a superb comeback against all confetti currencies. cb2

PS: @ Belgian - Balkan is more a state of mind, as a geographical area ... otherwise, I would suggest you take a look at Vienna's 2nd. district, where allegedly the Balkans begin... and have been located to the SE., though it also may be that the Balkans have spread in every other direction as well.

Goldilox (3/2/04; 09:36:38MT - usagold.com msg#: 117947)
DX
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s
The DX is screaming up. 88.44

Goldilox (3/2/04; 09:28:28MT - usagold.com msg#: 117946)
Reactions to your thoughts
@ $ Bill:

Buddy, two reactions to your last post.

1) Did the Russians say they would buy US$? Not really, although I would agree they have joined in the "jawboning" exercise, probably to extract or remit some favors. The EU leadership has an interesting "good cop - bad cop" play unfolding between pols and bankers.

2) Saddam as a poor choice of EU partner. Perhaps - Iraq and Eu have been redeveloping Iraq's oil structure since his 1991 spanking. Given the amount of creative intelligence data utilized, it's hard for me to believe any other choice of partner would not have been demonized and attacked as well. Perhaps most ego-offending was that Saddam had been placed in power and propped up by the neo-cons and they felt his dealing with EU was a slap in their face. Post-mortem, any choice of partner is poor if your "allies" dismantle the partnership as a world political announcement.

It's amazing that "globalism" has developed such a "godfather" approach to business. But then again, maybe not so much. The US "coup d' gras" was widely announced to the world on Nov. 22, 1963, with a reminder on election day in 2000.

Got gold? The proverbial fan gets ickier by the day.

TownCrier (3/2/04; 08:57:42MT - usagold.com msg#: 117945)
Eurosystem sheds more paper
According to the latest weekly release of the consolidated financial statement of the Eurosystem, the net position in foreign currency was reduced by 0.3 billion to EUR 171.7 billion, a new Stage Three low to my recollection. Meanwhile, the gold and gold-receivable asset portion of international reserves was held firm at EUR 130.34 billion.

R.

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