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ARCHIVED DISCUSSION FROM 12/23/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Goldilox (12/23/06; 20:01:29MT - usagold.com msg#: 150454) Indian gold jewellery may lose duty-free access to US http://www.tribuneindia.com/2006/20061223/biz.htm#11 snip:Washington, December 22Six countries, including Brazil, India and Venezuela — could lose duty-free access to the US market in 2007 for some of their key exports under a revamped U.S. trade programme signed into law on Wednesday by President George W. Bush, U.S. trade officials said.Thailand, Ivory Coast and the Philippines could also lose trade benefits because of recent changes Congress made to the US Generalised System of Preferences programme for developing countries, the U.S. Trade Representative's (USTR) office said.Under previous law, the six countries received a waiver to continue exporting certain goods to the US on a duty-free basis despite exceeding thresholds that otherwise would have ended those benefits.But motivated in large part by US frustration with India and Brazil in world trade talks, the revamped GSP programme allows the Bush Administration to revoke such waivers when one of two conditions are met: imports of a certain item from one country exceed an annual cap of about $187.5 million, or comprise 75 per cent of the total U.S. imports of that item.The USTR said its preliminary assessment indicated India would lose duty-free access for gold jewellery and brass lamps. India shipped $1.6 billion in gold jewellery and $20 million in brass lamps to the US under the GSP programme in the first 10 months of 2006, the USTR said.The 32-year-old GSP program provides duty-free treatment for thousands of goods from 133 developing countries. — Reuters-GoldiloxWhen governments disagree, first response usually takes the form of "protectionism", appropriately or not. Goldilox (12/23/06; 19:51:51MT - usagold.com msg#: 150453) Ghost of Christmas post @ Topaz, As TC graciously pointed out, my fumble fingers posted my (previous) password in Post @ 150442, so the gold sales info in post #150444 came not from me, but an enterprising imposter who also noticed my faux paux!Thanks to quick Admin response, I am back with a new password.-G'loxfrosty1,I didn't think you were misquoting me maliciously, but your synopsis of my statement changes its meaning a little more than I am comfortable with. Suffice to say we disagree about the ramifications of changes in the consumer factor in this "economic miracle", but it seems we have both thought it out and come to different conclusions . . . viva la difference! Matthew (12/23/06; 17:41:34MT - usagold.com msg#: 150452) IMF gold http://en.wikipedia.org/wiki/Official_gold_reserves G'lox, $94billion of gold is about 4700 tonnes, taking gold at about $20k a kilo.IMF reserves are stated at 3217 tonnes (see below).If we can verify this announcement, things may get interesting! Topaz (12/23/06; 16:01:36MT - usagold.com msg#: 150451) d-uh! Of course EU should be ECB ...under duress the ECB has had to pony up metal so early in the year "because" EU subsidiaries don't want to ...or can't! IMO. Topaz (12/23/06; 15:39:23MT - usagold.com msg#: 150450) G'lox: IMF $94B Gold sales? Couldn't google any info re: this G'lox, can you cite a source pls?Frankly talk of IMF sales is right on queue here as it's my feeling the Physical Market is struggling for liquidity.Recent EU sales seem to me to be far too early in the "Wag2C" year as they (EU) are perceived in my opinion to be a seller of last resort.We'll see soon enough. USAGOLD / Centennial Precious Metals, Inc. (12/23/06; 14:39:45MT - usagold.com msg#: 150449) Step inside and shop at your convenience. Open 24/seven. http://www.usagold.com/buy-gold-coins.html frosty 1 (12/23/06; 13:38:45MT - usagold.com msg#: 150448) Goldi...sorry to ruffle your feathers You are very good at seeing all sides,thats what I like about your posts.I do like your own take on matters though.Anyway,you said "Actually 95% of U.S. wealth rests in 5% of the hands, so ave. joes 5% only matters in retail....where it makes up a larger portion of the total,by itself not enough to sustain said trend."I disagree, with your take on the role of joe in the game,without ave. joe doing his consumption thing,the whole game stops.You see...ave. joe IS the game,he is not only retail but energy,raw materials'speculation,lodging,dining education,ect.Take joes punch bowl away and you now have a lot of the (5% club of the wealthy) in trouble,the U.S.Average joe is going to feel pain,but he is not near done being used. IMHO. mikal (12/23/06; 12:25:43MT - usagold.com msg#: 150447) Where does the tax assessor go next? http://www.freemarketnews.com/Analysis/118/6625/knapp.asp?wid=118&nid=6625 Property Values, Real and Imagined - Tom Knapp - Dec 22A pointed and explicit look at a few of the many aspects of today's housing market. Knapp has a certain feel for cities, and having lived and worked in more than a few myself, I appreciate his humor and concur with his main premise.How much is that city or town house worth after all those years in which tax assessors and government policies may have adversely affected most neighborhoods and the business district(s)?Shall you measure the value of your home not in dollars, perks or market attractiveness but in it's basic utility to you and your family? And at the lowest cost in crime, tax, maintenance and insurance (and with a minimum quality of life such as utilities and other public services, amenities and/or business conveniences)?As Knapp points out, the tax assessors are on the move, with help from larger bureaucracy & new gov't inventionslike preferential tax incentives, regulations and rules. Our markets seem anathema to agencies like HUD, SEC and CFTC. Druid (12/23/06; 12:01:43MT - usagold.com msg#: 150446) Hmmmm... http://www.raremoneysheets.com/ Druid: My father sent me a copy of a full page ad that ran in his local newspaper. Check the site out. My guess is bigfloat is in the pipeline and heading home. Is the AMERO a done deal and now we're off to collector's additions? MK (12/23/06; 10:34:44MT - usagold.com msg#: 150445) Chris. . . You're right about the South Korean reaction. Japan is also on hold as far as raising interest rates goes. More. . .The recent monetary crisis and stock market crash in Thailand will make a major impression on other Asian states. We forget that the infamous Asian contagion in 1997 began in Thailand and spread quickly throughout Asia. In its wake, it nearly bankrupted several countries including Indonesia and South Korea (where citizens were asked to turn in their gold as a patriotic gesture) and led to actual debt defaults in Russia and Brazil. The concern in the West at the time was that cascading debt defaults would eventually spread to Wall Street banks and financial houses. This created a huge market for gold in the United States. Odd that you don't hear many MSP (mainstream press) types making those references now when the similarities are so obvious. At the root, the problem today is very much the same problem we had in 1997. Hot speculative money looking for a home finds a currency which pays a premium interest rate. They buy that currency in the form of stocks and bonds to maximize returns. That drives up the currency and kills the internal economy. (These are all export driven economies.) The government reacts. In this case, Thailand imposed capital controls in an attempt to keep the hot money out. Bingo! The next that happens is that the stock market collapses.Thailand serves as warning of the net effect of the current international economic structure. This is another manifestation of globalized bubblenomics at work. The bubble is pumped up by hot speculative money; then exhausted at the first sign of trouble leaving a mess behind which the local central bank then attempts to clean up by printing money making things worse. The potential for a major problem in Asia is something very few people are thinking about as we unwind into the December holiday season. But it is there. And it is the direct result of the "deadly tango" I discussed yesterday.Add in:One other item, people keep forgetting - When interest rates are low in a particular currency like the yen or the won, it encourages carrry trades. The currency is borrowed then dumped for higher paying currencies like the dollar, the pound and the euro. This weakens the Asian currency and strengthens the target currencies in what might be described as a compounding effect of keeping your currency relatively cheap -- and a nuance in this age of financial engineering. The incentive, of course, is for the target countries competitively devalue their currencies.All of this in the end contributes to the inflationary wave building in the world economy, as discussed in my previous post. Goldilox (12/23/06; 09:51:31MT - usagold.com msg#: 150443) Don't Worry, Be Happy! http://www.financialsense.com/Market/wrapup.htm snip:The market escaped the fall decline, the summer rally has stretched right over into the Santa Claus rally, we are now in the "best six months of the year" for the stock market. The Wall Street analysts are all rapidly bullish and the market is at new highs. So, why worry?The advance out of the 2002 low has created an environment in which there is basically no fear in the market place whatsoever. Yes, I know the arguments as to why. I guess the number one reason I hear is that we are now in a new paradigm and that the markets are perfectly controlled by the invisible hand. I will admit that I have been surprised by the market's resilience. I will also admit that I do believe in market manipulation, but I do not believe that such manipulation can continue indefinitely or that "they" have perfect control of the market. I do believe that "they" have a great interest in trying to control the markets on an ongoing basis. But, at some point I believe that the weight of the market will become great enough that whatever the degree of control over the market really exists will be lost.The following text on Manipulation was taken from Robert Rhea's book, The Dow Theory."Manipulation is possible in the day to day movement of the averages, and secondary reactions are subject to such an influence to a more limited degree, but, the primary trend can never be manipulated."Hamilton frequently discussed the subject of stock market manipulation. There are many who will disagree with his belief that manipulation is a negligible factor in primary movements, but it should always be remembered that he had, as a background for his opinions, a most intimate acquaintance with the veterans of Wall Street, and the advantage of having spent his life in accumulating facts pertaining to financial matters.The following comment, taken at random from his many editorials, affords convincing proof that his views on the subject of manipulation did not vary and I will add that even today I feel that these views are not too far from the truth.‘The average amateur trader believes the stock market is guided in its trends by a certain mysterious ‘power,’ this belief being the one factor, next to impatience, most responsible for his losses. He reads tipster sheets avidly; he scans the newspapers industriously for news likely, in his opinion, to change the trend of the market. He does not seem to realize that by the time the news of real importance is printed, its effect, so far as the basic trend of the market is concerned, has long ago been discounted.’‘A limited number of stocks may be manipulated at one time, and may give an entirely false view of the situation. It is impossible, however, to manipulate the whole list so that the average price of 20 active stocks will show changes sufficiently important to draw market deductions from them.’ (Nov. 29, 1908)‘Anybody will admit that while manipulation is possible in the day-to-day market movement, and the short swing is subject to such an influence in a more limited degree, the great market movement must be beyond the manipulation of the combined financial interests of the world.’ (Feb.26, 1909)‘…the market itself is bigger than all the ‘pools’ and ‘insiders’ put together.’ (May 8, 1922)‘One of the greatest of misconceptions, that which has militated most against the usefulness of the stock market barometer, is the belief that manipulation can falsify stock market movements otherwise authoritative and instructive. The writer claims no more authority than may come from twenty-two years of stark intimacy with Wall Street, preceded by practical acquaintance with the London Stock Exchange, the Paris Bourse and even that wildly speculative market in gold shares, ‘Between the Chains,’ in Johannesburg in 1895. But in all that experience, for what it may be worth, it is impossible to recall a single instance of a major market movement which depended for its impetus, or even for its genesis, upon manipulation. These discussions have been made in vain if they have failed to show that all the primary bull markets and every primary bear market have been vindicated, in the course of their development and before their close, by the facts of general business, however much over-speculations or over-liquidation may have tended to excess, as they always do, in the last stage of the primary swing.’ (The Stock Market Barometer) ‘…no power, not the U. S. Treasury and the Federal Reserve System combined, could usefully manipulate forty active stocks or deflect their record to any but a negligible extent.’ (April 27, 1923)‘It is true that a flurry in the price of wheat or cotton may influence the day to day movement of stock prices. Moreover, sometimes newspaper headlines contain news which is construed as bullish or bearish by market dabblers, who collectively rush in to buy or sell, thus influencing or ‘manipulating’ the market for a short period. The professional speculator is always ready to help the movement along by ‘placing his line’ while the little fellow timidly ‘lays out’ a few shares; then, when the little fellow decides to increase his commitments, the professional begins to unload and the reaction ends, and the primary movement is again resumed. It is doubtful if many of these reactions would ever be caused by newspaper headlines alone unless the market was either overbought or oversold at the time---the ‘technical situation’ so dear to the hearts of financial news reporters.’ ‘Those who believe the primary trend can be manipulated could, no doubt, study the subject for a few days and be convinced that such a thing is impossible. For instance, on September 1, 1929, the total market value of all stocks listed on the New York Stock Exchange was reported to have amounted to more than $89,000,000,000. Imagine the money which would have been involved in depressing such a mass of values even 10 per cent!’This article was written on Thursday, December 21, 2006, and the volume for that day on the NYSE, the Nasdaq, the NDX, the S&P 100, the S&P 400, the S&P 500, the S&P 600, the Industrials, the Transports and the Utilities totaled some 7.53 billion shares from around the planet. If the thickness of one sheet of printer paper was equivalent to one share traded or one unit of volume, then Thursday's volume would equate to a stack of printer paper over 424 miles high. As I hope you can see from this example, for the market to be controlled in a significant and continuous way, it would require unimaginable volume and money. Now this is not to say that it can't be done under the right circumstances. But, what I am saying is that once the tide really does turn, I believe that whatever the degree of control over the market may exist will be lost by the shear volume or weight of the market.Next, I want to address the complacency in the market place. Below I have included a weekly chart of the Industrials as of Thursday's close, along with the Investors Intelligence readings in the upper window. The blue line at the 50 percent line represents the same number of bulls as bears. In other words, at that level, market sentiment is such that there are just as many bulls as there are bears. We have just completed the 217th consecutive week with this reading at or above the 50% level. This indicator moved above the 50% level the week of October 25, 2002. The week of June 23, 2006 this indicator did move to the 50% level. But nonetheless, it has been either at or above the 50% level now for an unprecedented 217 consecutive weeks. These numbers are telling us that the market place simply is fearless and complacent about a market decline. . . Now let me connect the dots. Here we sit with a Fed that certainly has an interest in keeping things afloat and quite honestly, has done a very good job of it. We also have a public with virtually no fear or worry whatsoever. As the market was deflating into 2001 and 2002 the Fed began to flood the system with liquidity. In doing so, they ignited the housing boom, saved the stock market from what began as the initial leg down of a much nastier bear market and instilled a complete sense of complacency onto the public. As a result, everything floated higher on the back of the excessive liquidity that was pumped into the system and now here we sit fat, dumb and happy.First, the housing and commodity dominos fell. Now, here we sit with the stock market still holding up at this point and everybody seems to be oblivious to the fact that it is among the very next of the dominos to fall. Well, as I have been explaining, we continue to see the warnings from the ongoing Dow theory non-confirmations. This non-confirmation is telling us that something is wrong just as it did in 2000, and just as the non-confirmation between lumber, the housing indexes and copper did more recently. Also, my statistical data surrounding the 4-year cycle continues to suggest, contrary to popular belief, that the 4-year cycle did not bottom this past summer. On top of that, we are now beginning to see the poor economic data continuing to stream out with the latest example of this being the Philadelphia Fed Survey and Industrial Production on Thursday.Yes, at this time the advance out of the summer low is still intact according to Dow theory. But two of the previous reinflation bubbles have already begun deflating and we are seeing technical cracks appearing in the stock market. Thus, things are not as rosy as they appear. All the while the public is numb. Personally, I have my doubts about the "powers that be" being able to pump the economy enough to save it again. After all, we are still seeing the deflating of the bubbles in housing and commodities from the last, or really the ongoing, reinflation effort. All the while, the stock market is still hanging on from these reinflation efforts but is increasingly moving on to thinner and thinner ice. I believe that the housing and commodity markets were the first dominos to topple and that the stock market will likely be the next. We are certainly seeing indications of this anyway. Also, the sentiment data tells me that the public is fearlessly complacent and obliviously numb to the real danger here. So, in light of these warnings and in spite of the fact that the stock market is at all time highs, I don't like what I see and the overall picture here makes me nervous.-GoldiloxPerhaps part of the message from P&B to China was the global need to use their trade imbalance to keep markets for both stocks and bonds propped up and thus keep the consumer game going, but will it work? Goldilox (12/23/06; 09:41:42MT - usagold.com msg#: 150442) b94bccd frosty1,Please don't mis-quote me to make your point. I NEVER posted "5% consumer actions will not change the game."????", but your quotes suggest I did.1) I don't think that the consumer game is as important as you seem to believe. As "freedoms" are falling like dominoes, so goes the importance of the consumer. Serfs may not get to choose what they purchase, as food and energy might eventually be allotted through government austerity programs, a la New Orleans. Tchochkis and personal electronics are likely to give way to RFIDs and more "surveillance gear", purchased by the goobermint.2) I also never said I thought massive deflation was the end-result, although it may possibly occur after a hyper-inflationary period. Perhaps you inferred that conclusion from the fact that I posted a Prechtor article, but I also stated that I don't have to believe everything in an article to post it. IMHO, resources are better for aiding the exploration of ideas, not so good for swallowing wholesale sans examination.As for what I "believe", I have stated once before that I do not have a very clear crystal ball, but I'm sure it won't be "pretty" for Joe Ave! Ned (12/23/06; 09:34:06MT - usagold.com msg#: 150441) @ Chris Powell Thanks for the info on the new diamond deriv/paper market....yes, it is a "good grief" !One thing to be sure, the last derivative market will be manure because there is no physical shortage of this commodity.Happy holidays to you and all of the GATA crew and your associates.May the New Year be properous and truthful !Take care 968 (12/23/06; 08:50:08MT - usagold.com msg#: 150440) Bias in Federal Reserve Inflation Forecasts: Is the Federal Reserve Irrational or Just Cautious? http://www.banxico.org.mx/publicadorFileDownload/download?documentId={CF195B12-B079-7BD5-B572-93AE35BDE700} This paper documents two facts about Federal Reserve inflation forecasts. The first is that there was a systematic under-prediction of inflation during the sixties and the seventies and a systematic over-prediction of inflation during the eighties and nineties. Chris Powell (12/23/06; 08:10:03MT - usagold.com msg#: 150439) Spending China's dollars: $16 billion gas project in Iran http://www.chinadaily.com.cn/bizchina/2006-12/22/content_765293.htm CNOOC to Develop Iranian Gas FieldBy Wang YuChina Daily, BeijingFriday, December 22, 2006A press official with the Iranian Embassy yesterday confirmed to China Daily that an initial agreement on a gigantic natural gas project has been signed by China's top offshore oil producer and its Iranian counterpart. "A big deal was hammered out on Wednesday between the two countries to jointly produce natural gas in Iran," the Iranian diplomat revealed on condition of anonymity. He said more details on the agreement still needed endorsement from the ambassador. According to Iran Daily, the National Iranian Oil Co. and China National Offshore Oil Corp (CNOOC) signed a memorandum of understanding on the development of the North Pars gas field on Wednesday. The field contains an estimated 80 trillion cubic feet of natural gas, according to the paper. The project involves an investment of more than US$16 billion, of which US$11 billion will be spent on the downstream segment and the rest on the upstream segment. According to the preliminary agreement, gas from the field will be liquefied and divided equally between the two companies. The project is expected to take eight years to bear fruit, Iran Daily reported. CNOOC would not confirm the deal yesterday, saying only the firm has been in touch with its Iranian counterpart on such a project for a long time. "We have been in close contact for a while. But it is premature to release the results of any negotiations at the present time," spokesman Liu Junshan told China Daily. An industry insider told China Daily that under the terms of a planned agreement signed as early as October, the National Iranian Oil Company offered CNOOC a 25-year gas supply from the North Pars field. Lee Meileng, chief analyst of Platts' Beijing office, said the reported deal will be a shot in the arm for both CNOOC and China as a whole from business and energy supply perspectives. Platts is the world's largest provider of energy information and market research. "By participating in and having ownership of overseas energy projects, Chinese oil companies can better safeguard energy safety for China as a major energy consumer. They themselves can also benefit from this kind of participation by taking advantage of hefty global energy prices," said Lee. The Platts analyst explained that CNOOC's share of gas from the reported joint programme in Iran could either meet robust demand from liquefied natural gas (LNG) terminals built by CNOOC in the coastal areas of China, or be sold on the global market. "Either will be positive for CNOOC and China. Therefore, I see this move as good from both a business and energy supply perspective," said Lee. Agreeing with Lee, Zhou Dadi, former director of the National Development and Reform Commission's Energy Research Institute, commented that compared with simply importing oil or gas from abroad, investing and getting involved in overseas projects was more cost-effective and a safer way of ensuring consistent energy supplies. CNOOC, as China's largest offshore oil supplier, plans to build as many as seven LNG-importing terminals in six provinces and municipalities. By the end of October, only two of them had obtained government approval. "Only with a secure and consistent gas supply, can LNG terminal construction be meaningful and gain approval," said Lee. frosty 1 (12/23/06; 08:01:14MT - usagold.com msg#: 150438) Goldie...The forest thru the trees "5% consumer actions will not change the game."????I still feel you are not grasping WHAT the american consumer means to the global picture.lets look ahead to a future outcome.First..the dollar sinks to an awfull low of say 60,despite raising interest rates to the 10-12% range, it is wellknown the worlds hot money wants out.Prices on most everything have increased 2 ,3 fold.The U.S. consumer must continue to be able to buy pizza,gadgets,cars,ect.or the owners of these consumer outlets,will fail to BE the wealthy or the 95% of wealth.With all this at stake...do you think that deflation will even be on the table???frosty1 Cometose (12/23/06; 07:34:45MT - usagold.com msg#: 150437) COT The commercials postions for last week changed in dramatic manner:SIlver: Commercials were net long 8600 contractsCopper Commercials were net long 1869 contracts GOld:Commercials were net long 14500 contracts .......That's a lotta contracts moving into the long category .........This has to show up sometime in related evidence ,I would suspect soon. 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