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ARCHIVED DISCUSSION FROM 9/24/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Operative (9/24/03; 23:55:29MT - usagold.com msg#: 109323)
Enron Sues Investment Banks
http://ap.tbo.com/ap/breaking/MGA33COA0LD.html

Enron Sues Investment Banks

Snip:
"HOUSTON (AP) - Enron Corp. is suing some of its investment banks, accusing them of colluding with company executives in shady deals that made millions for both the insiders and the banks before Enron's collapse.
Defendants in the lawsuit filed late Wednesday in U.S. Bankruptcy Court in New York include banking titans J.P. Morgan Chase & Co. and Citigroup Inc., two of Enron's largest creditors.
Neal Batson, the court-appointed bankruptcy examiner investigating Enron's collapse, said in his most recent report issued in July, citing numerous internal documents and e-mails, that the six parent banks named in Enron's lawsuit knew some of the financing deals they did with the company were intended to pump up profits.

Comment: Seems like on every turn you see JP Morgan being named in litigation. Strange how the same names keep appearing over and over isnt it?

Operative (9/24/03; 23:46:49MT - usagold.com msg#: 109322)
Denim Maker Cone Mills Files for Bankruptcy
http://ap.tbo.com/ap/breaking/MGAHLV7B0LD.html


Denim Maker Cone Mills Files for Bankruptcy
snip:
GREENSBORO, N.C. (AP) - Cone Mills Corp., the world's largest maker of denim fabric, late Wednesday filed for Chapter 11 bankruptcy on the eve of its annual shareholders meeting.
The 112-year-old company makes the fabric for Levi's jeans, among others. It employs more than 3,000 people in five factories in North Carolina and South Carolina along with a joint venture in Mexic
Chief executive John L. Bakane has blamed a flood of Asian textile imports for the company's struggles.
"Unfortunately, the size and scope of this challenge shows no sign of diminishing, since appeals to Washington from textile industry leaders seem to have fallen on deaf ears, with U.S. trade policies continuing to unfairly favor these overseas competitors," Bakane said. "
end

Comment: More "bones" for the pile. Recovery around the corner? Dont bet on it.


Black Blade (9/24/03; 23:23:23MT - usagold.com msg#: 109321)
Survey: Most plan to work into 70s
http://money.cnn.com/2003/09/23/pf/saving/aarp.reut/index.htm

AARP finds many Americans to stay on the job longer due to financial considerations.

Snippit:

WASHINGTON (Reuters) - The image of American retirees lounging by the pool or playing golf may disappear as nearly three-quarters of older workers say they plan to work past the traditional retirement age, a study issued Tuesday said. A survey by AARP, formerly known as the American Association of Retired Persons, shows 7 in 10 Americans plan to work past the once-typical retirement age of 65 and nearly half expect to work well into their 70s and even 80s.

Black Blade: What choice do they have? Quite a dire report worth reading. My parents worked in Yellowstone NP after retirement because they wanted too and they made many friends there over the years as it was one of several choices made by "Snowbirds" (a nickname for retirees traveling north in the summer and south in the winter). Now for most retirees it looks like many will work after retirement not because they want to or for socializing with others of their generation, but out of necessity for the sake of survival. Remember the dreams of the "Nuclear Family" with the bread winner going to work and mom staying at home to care for the home and be there for the children? Then the "Two Income Family" became the norm because one income no longer covered the costs of hearth and home. Now it's working past the traditional retirement age even to the point of having one foot in the grave just to get by. I suspect it will worsen much more by the time the last of the Baby Boomers hit retirement age. You can't afford to rely on Government promises and expectations of company pensions any longer. The only one you can trust and depend on is yourself. A small precious metals position will help balance out the ebb and flow of investment balance sheets. A larger position may mean the difference between being worked to death or actually having a day in the sun sipping pi--a coladas sitting on a beach watching the sunset (or goggling young beauties in thong bikinis if your as depraved as me - sorry about that). ;-)



Black Blade (9/24/03; 23:06:42MT - usagold.com msg#: 109320)
Back to the bubble
http://money.cnn.com/2003/09/24/commentary/bidask/bidask/index.htm

Bearish sorts worry that investors didn't learn a thing from the crash.

Snippit:

NEW YORK (CNN/Money) - With the big-time rally stocks have seen this year pushing valuations back into the stratosphere, you have to wonder whether we learned anything at all from the busting of the late 90s bubble. You would think that seeing such a massive amount of wealth wiped off their books would have made investors cautious about the market -- deeply mistrustful, even -- but that hardly seems to have been the case. Flows into the mutual funds are steady, online trading has picked up and casual conversation is turning back to what stock did what. Even more distressingly, the stocks that have been doing the best are the sorts of highfliers that got investors into so much trouble last time around. Tech is leading the way, and for the tech stocks that are doing best, generating earnings is a future hope, not a present fact.

Black Blade: Yet another warning! If you invest be very picky � there will be big winners and a lot more big losers. Study, study, study! But first anchor your portfolios with hard assets like precious metals and have that "golden lifeboat" at the ready.



Black Blade (9/24/03; 23:05:22MT - usagold.com msg#: 109319)
Risky buying on margin surges again
http://www.usatoday.com/money/perfi/stocks/2003-09-24-margin_x.htm

Snippit:

Some investors are so confident that stocks will continue to rally, they are literally betting their portfolios and buying stocks on margin. Margin is using borrowed money to buy stocks and using other stock as collateral on the loan. Currently, investors are on a margin binge that is making some analysts worry we're seeing a return of late '90s-like speculation. Margin buying is:

� At record levels. Investors at firms regulated by the National Association of Securities Dealers (NASD), the watchdog of the Nasdaq stock market and 5,300 brokers, borrowed $26 billion against their stock holdings in July, the latest available data. That tops the old record in March 2000.

� Growing rapidly. Margin borrowing at NASD-regulated firms is up 412% this year and 32% in July.

�Widespread. Total margin borrowing, which includes numbers reported by the New York Stock Exchange, hit $174.4 billion in July, a 25% increase from the end of 2002. That total is the highest in two years.

This is a big warning to some that greed is back. "Those people from 1999 to 2001 are creeping back into the sunlight again," says Michelle Clayman, managing partner of New Amsterdam Partners. "There are people thinking: 'Gee, maybe I can make back what I lost.' " Even the NASD has put out a warning to investors to be careful of margin borrowing. There's so much concern because historically, when margin balances soar, it's bad news for the market. The last time margin balances at NASD brokers topped $20 billion was March 2000 � just as the market was about to head into a brutal three-year slide.


Black Blade: Here we are again. Corporate insiders and professionals are bailing out as fast as they can and the Lemmings are taking a full force run right toward the cliff! So much for retirement, kiddies education, hopes and dreams. They just never learn do they? Over the last week I have been saying that the equities markets are looking "toppy" with valuations either in the stratosphere or simply nonexistent. I fear that this will become a very ugly issue in the next few weeks and certainly a campaign issue this year when it all blows up (again). As always, get prepared � get out of debt and stay out of debt, stash enough emergency cash for several months� expenses (or maybe better yet in very liquid PMs), accumulate Gold and Silver portfolio insurance, and start at storage program of nonperishable food and basic necessities. Just think if all those unemployed took these simple precautions they could at least have some breathing room and still feed their families without going deeper into debt paying necessary expenses. I just shiver from what's coming next for these poor folk.




Black Blade (9/24/03; 22:41:39MT - usagold.com msg#: 109318)
Forecast: Recovery Hopes Are Too Rosy
http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=1&u=/nm/20030924/bs_nm/economy_usa_forecast_dc

Snippit:

SAN FRANCISCO (Reuters) - The U.S. economy faces at least another year of tepid growth despite a growing number of predictions that a stronger recovery is around the corner, according to a forecast released on Wednesday. The widely watched survey issued by the Anderson School at the University of California, Los Angeles said neither consumers nor businesses have the buying or investment power to drive the solid growth seen in typical economic recoveries. "There is nothing to make you think we will have this spurt of growth," said the report's author, UCLA economist Ed Leamer. "I just don't see it." Leamer said even though business investment is creeping back, consumers -- who have taken advantage of low interest rates to keep spending -- do not have much room left now to help spark stronger growth. Increased debt and higher debt servicing because of rising long-term interest rates are also likely to further drag down consumer spending, the report said. And tight budgets will keep a lid on spending at the state and local level and be a drag on the economy, Leamer said. "State and local is going to contribute negatively where normally it contributes about 0.4 percent to GDP growth," Leamer said. "This labor market is much worse than it has ever been in terms of post-recession outcome," Leamer said. "The job market is extremely unhealthy."


Black Blade: This guy is much too optimistic IMO. Still, the overall report is correct as I see it though his take on the unemployment data and inflation are just parroting the government spin. Note that higher energy costs will remain a major drag on the economy. I haven't revisited this issue in some time, however, it is a fact that every postwar recession has been preceded by an energy crisis. Though not discussed much these days, there is still an energy crisis with today's OPEC decision, very low oil inventories, and declining NatGas production, we will have no real economic recovery this year or next. In fact the demand side for NatGas has risen over 300 million mcf/year year on year even with falling industrial demand nearly every new home is heated with NatGas. Rising NG storage has come from high cost production already bought (mostly by domestic utilities) at high prices so don't expect much help from rising storage levels because lower spot prices will not be passed along to the consumer this winter. As a side note � Congress has proposed an additional 6 cents a gallon Federal tax on gasoline (just for your info). As if the consumer needed another tax now.



Gandalf the White (9/24/03; 22:31:36MT - usagold.com msg#: 109317)
WHOA !!! Stop jumping UP & down in the SAME PLACE, SPOT !
The COMEX Dec Cotract has broken the $390. level, BUT, there seems to be a LID for SPOT, right about there and the charts are GOING WILD !
Rest awhile SPOT and then BITE 'em !
<;-)


Black Blade (9/24/03; 22:25:44MT - usagold.com msg#: 109316)
Market Wrap Up � Hartman
http://www.financialsense.com/Market/wrapup.htm

What is Money?

Snippit:

We have transitioned from exporting capital to exporting all of our jobs; first the manufacturing jobs went offshore and now we are very actively sending our service sector jobs overseas. According to Mr. Kurt Richebacher, "The idea of an economic recovery with such a huge trade imbalance is utterly ridiculous." He goes on to say, "There is no foundation for recovery, which is made impossible by a huge trade deficit, balance sheet destruction, over-emphasis of the financial speculation, poor capital equipment investment, and monstrous imbalances." The dollar must go lower!

One of the big political problems is that we owe foreigners a ton of U.S. Treasury debt. We are now telling them that we will pay our debts, but with dollars that are not worth as much. The world is openly protesting the U.S. dollar as reserve currency for the entire globe. The euro was created as an alternative to the U.S. dollar, and its time is quickly approaching.

I started this section with the question, "What is money?" Now I ask you, what is the best kind of money? Is it Mexican Pesos, Swiss Francs, U.S. Dollars, Canadian Dollars, Gold, Euros, Yen, Yuan�or WHAT? Since I'm out of time and I just happen to be looking at the 24-hour Kitco Gold Chart, I will say that my favorite money is good old gold. It's tough to print more into creation. Gold closed today at $387.00, but look at the happenings as gold opens in Australia. As I write, gold is trading at $389.20 and will open in Hong Kong in a few hours. Let's see if the Asian Tigers can push it over $400.


Black Blade: Definite agreement here. As I have been pounding the table for some time like an insane maniac � the current account, trade, and budget deficits are clearly unsustainable. The only way out and I mean the only way � is to "fire up the printing press" until it's smoking hard pumping out dollars like never before and to devalue the dollar faster than foreign governments can step in and intervene in the continuing "competitive currency devaluation" scheme (aka "Currency War"). BTW, Dr. Kurt Richebacher had a great piece on the phoney unemployment data in today's Daily Reckoning (maybe listed as yesterday's now), but wish I could find it and get permission to reprint it here. It spells out exactly the what the liars at the Dept. of Labor and BLS have been doing and puts egg on the faces of the long string of morons paraded before financial media talking about how unemployment is just a "lagging indicator" That is a bald faced lie of course because a full reading of the unemployment reports with data (weekly and monthly) show an entirely different picture that is touted by the CNBC carnival barkers.



Black Blade (9/24/03; 21:59:29MT - usagold.com msg#: 109315)
POG Action � From The Front Lines?

Looks like the action in gold is getting quite heated tonight. Having just arrived back from another night of masochism (at the gym ya know), I checked my email and a friend who has some uncanny insight on trading action tells me that the big rumor is that Morgan Stanley and another major player (JP Morgan is a primary suspect) are having a tough time trying to turn back the tide in the after hours gold market without much success. No one knows for sure but another rumor is that a major player (a foreign player) has taken the opposing field and is looking high and low for a large amount of � get this � physical gold. Something is afoot and it appears to be a major move is in the works.

Now this is just a rumor and I am trying to find some collaborating sources to confirm this but the movement in gold in the last few days suggests more is at work than meets the eye or what some gold analysts have been saying. One explanation is that it could be one well-heeled Asian investor or a consortium of Asian investors, and another is that it could be another banker or investment house taking a huge position. This could be the first quarter of the "Super Bowl" in the fight over the price of gold. I haven't had much luck tracking down any real confirmation (yet) but will keep my eyes wide open and an ear to the ground on this one. As a side thought here, if JP Morgan truly is in a fight to push gold prices back down, it may be due to some large derivative positions that they are rumored to still be locked into.

Anyway it is shaping up to be an ugly fight with the POG bouncing around a lot in the last several minutes � two powerful teams are going "head to head". I wouldn't be surprised if some Middle Eastern players were jumping in as well since today's OPEC decision to slash oil production has really stirred things up in the equities markets and a lot of ME money is tied up in western markets and many of these players are none too happy with the US and Euroland right now. Just look at the Nikkei dropping hard again tonight, this could be a precursor of things to come in Euroland and NY in the next trading session (equities). No wonder George Soros said he was "going for the gold" so to speak. Safety is the name of the game now and that means a new "gold rush" could be under way.

- Black Blade

BTW, thanks for the HOF nomination guys. The ETF question is a burning issue of late and is the talk of the Denver Gold Conference this week too. Cheers and "Golden Dreams".


TownCrier (9/24/03; 21:08:55MT - usagold.com msg#: 109314)
R Powell...
RE: your msg# 109307

Please see my 109306.

Like something out of 'Fistful of Dollars'.

Yep. That fast.

R.

Druid (9/24/03; 20:40:28MT - usagold.com msg#: 109313)
"Let it Rip"
http://www.prudentbear.com/creditbubblebulletin.asp
September 17 � Bloomberg: Paul McCulley, managing director of Pacific Investment Management Co.: �The Fed is supposed to go for maximum employment, stable prices and moderate long-term interest rates. The glaring goal that needs to be met is maximum employment. And there's no reason that the Fed can't go for it in the context of those moderate long-term rates, and the downside risk to inflation from a starting point of price stability. �Until you get job creation, not a jobless recovery, then the Fed has a mandate to keep the foot on the accelerator, keep money growth strong and short-term interest rates low. So I think it's an absolutely delightful template for the Fed to let it rip for a bit.�"

Inflationism is such a slippery, slimy slope. After all, it was not all too many weeks ago that The Inflationists were invoking The Evil of Deflation as grounds for the Fed and global central bankers to venture only further into the uncharted muddy waters of ultra-easy international money and Credit. With the case for global deflation today decidedly more difficult to contrive, we are now subject to the seductive nonsense that inflation is, as well, the magic elixir for a bout of stubborn U.S. unemployment.

Yet, overwhelmingly, today's persistent American joblessness is a structural issue related to a grossly imbalanced economy (and Credit system) and the hollowing of our nation's manufacturing base. And these separate but related deep structural distortions are categorically the consequences of years of Credit and speculative excess. There is simply no way for today's deranged Credit system to evenly spread liquidity throughout the economy. Until the next cycle, it remains a safe bet to assume that liquidity will love playing inflating assets markets, while having minimal attraction to goods-producing profits. These dynamics have become so deeply ingrained. Financial institutions, instruments, mechanisms and market psychology have evolved that perpetuate asset Bubbles at the expense of the real economy.

Yes, we can nowadays witness Credit inflation boosting the income of real estate agents, attorneys, insurance salesmen, financial operators, building contractors, defense contractors, and medical professionals. But there are fewer jobs every month for the factory worker. And with the cost of doing business in the U.S. inflating by the month, our manufactures become only less competitive globally. How, again, is greater Fed-induced Credit excess to become the solution to our deepening economic and financial ills?

Pondering Mr. McCulley's "it's an absolutely delightful template for the Fed to Let It Rip," I am reminded of Dr. Richebacher's prescient warning years ago that an environment of placid consumer prices has the potential to nurture the most conducive conditions for runaway financial Bubbles. Well, we continue to watch in utter amazement as this dynamic plays out in historic dimensions.

Druid: McCulley, a goldbugs best friend.

Druid (9/24/03; 20:28:14MT - usagold.com msg#: 109312)
Sweden Votes No: One More Chance For The Euro-Enthusiasts To Get It Right?
http://www.prudentbear.com/internationalperspective.asp

Earlier this month, Sweden voted a decisive 56-42 per cent "No" in the referendum on whether to embrace the euro. Already the conventional wisdom making the rounds is that the rejection of the single currency by the Swedes has dissipated hopes of creating momentum for the European Union's remaining non-euro members � the UK and Denmark � to join. Yet the same day of this alleged vote of no-confidence in the European project, Estonia voted overwhelmingly in favour of joining the European Union.

How, then, to reconcile these events? Indeed, how far should one regard an embrace of the single currency project in its current incarnation as synonymous with the EU? More significantly from the point of view of the euro's future viability, will Sweden's rejection finally force renewed focus on reforms and budget rules to which all member states can adhere (and thereby ensure that the European Monetary Union becomes both more attractive and viable in the future)?

Druid: Man, I'm certainly glad that I'm not in the prediction business, just way to much uncertainty for this bug.

Druid (9/24/03; 20:22:00MT - usagold.com msg#: 109311)
IS THE DOLLAR "TOAST"?
http://www.gold-eagle.com/editorials_03/wallenwein092403pv.html
"Yes.

The only remaining question is: how dark would you like it?

The Europeans would like it to be a light, golden crisp. The more fanatical of our Arab and Muslim friends probably want it to be incinerated. The Chinese would likely prefer it pretty dark, but with visible, charred remains, so they can still show it off - like a trophy.

At the recent G 7 conference in Dubai, some pretty amazing statements were made by our world leaders. Statements that, to those unfamiliar with :'euro vs dollar' logic, most likely sound rather innocuous. But to those who understand this new paradigm of international monetary politics, these statements confirm how far the world has already progressed toward a final transition from the current (past?) dollar reserve system to something entirely new."


Druid: Pretty interesting perspective.


Cavan Man (9/24/03; 20:20:05MT - usagold.com msg#: 109310)
Dollar Bill
MK's reference is to Chinese investment in a global positioning system sponsored by the Euro zone. This system is a direct competitor to a comparable US initiative. The report was found in the FT (last week's issues). Coincidentally, I read the article while in Coloroado and thought of stopping by MK's favorite bookstore while there.

MK has described the global situation perfectly in his "March of Folly" post.

Mr. Bill (9/24/03; 20:09:16MT - usagold.com msg#: 109309)
@CoBra(too) (9/24/03; 16:08:05MT - usagold.com msg#: 109296)
Sounds like you are running on the byproducts of fermentation. Was it a very good year?


Liberty Head (9/24/03; 19:35:18MT - usagold.com msg#: 109308)
The Gold Cheer - Rah

I don't know if cheering qualifies as "discussion", but I must be chaneling the spirit of a dead cheerleader today.
Besides, today's performance is worthy of a cheer or two,
don't you think?

GO
GO GO
GO
GO Precious Metals

GO
GO GO
GO
GO Precious Metals
--------------

Oh well! It doesn't seem to do any harm and it's more fun than TA.
I appologize if my exhuberance is irrational. :-)

Best Wishes




R Powell (9/24/03; 19:30:11MT - usagold.com msg#: 109307)
Hall of Fame nomination
Calling for TownCrier....

In post 109287 I nominated Black Blade's excellent summary of gold ETFs for the Hall of Fame. Since then we've seen seconds from Operative (109291), Paper Avalanche (109293) and now Dollar Bill (109304). Thanks
Have we properly met the requirements for admission for Mr. Blade?

Under the last new moon I had thought to sacrifice a plump Rhode Island Red for gold price foretelling but, on the way to the sacraficial site, the chicken told me that all fundamental and technical analysis aside, the recent POG has been all directly due to Black Blade's daily reports and nothing else. I thanked the Red and returned him to his roost. Now, in light of this revelation I certainly hope that we can honor BB in the hall for this fine post and all his ongoing efforts.
Rich

TownCrier (9/24/03; 19:19:53MT - usagold.com msg#: 109306)
Done.
Who will find it first?

R.

Dollar Bill (9/24/03; 19:03:22MT - usagold.com msg#: 109305)
*>*.........+
Duke M. Kosares, So much for my idea that I might foresee part of your commentary in advance ! Not a chance.
That post of yours is such a terrific high level view.
You warrent the Duke title. At this table you are a standout.

Is there a post about the euro GPI? Explaining it?
It is a must know subject I see.

Dollar Bill (9/24/03; 18:45:38MT - usagold.com msg#: 109304)
*>*............+
Sir R. Powell, I support your motion.
To be honest, I am still in the learning mode on the subject and dont have your insight on it. But I trust your judgement.

R Powell (9/24/03; 18:40:37MT - usagold.com msg#: 109303)
Federal Reserves
I'll agree with what you just said and add that even the timing is exquisite.
A question, please. Other than the obvious direct links like copper demand and the building industry, what do you see for commodities (CRB) in relation to falling stock prices? Can the stocks tank while the CRB soars?
Also, are falling stock prices likely to further the dollar's decline? I believe a falling dollar hurts equity prices (even though it helps exports) but is the reverse of falling equity prices = lower dollar also true?

A fellow named Flannagan has been trying to sell a raging commodity bull based on long term (30, 60 year) cycles. I'm finding many fundamental reason that could explain large long term higher prices in many commodities. There are even now rumors of an orange tree disease- "citrus sudden death"- in South America. I thought nothing could help OJ prices with umpteen million tons of the stuff in storage but... Anyway, this guy is also calling (and has been for well over a year) for fortune making moves in gold and silver.
Any thoughts over any time period, thanks
Rich

Arcticfox (9/24/03; 18:37:14MT - usagold.com msg#: 109302)
This is interesting...
http://www.financialsense.com/Market/wrapup.htm
rumour....
I'll now take you down one of the side streets in the oil arena. It has been said that Saddam Hussein lied about having weapons of mass destruction to appear more powerful than he really was and also lied about his oil reserves to appear wealthier than he really was. There are rumors that Iraq does not have the oil reserves that they claimed and the Bush administration is scrambling to secure long term oil contracts to make up for what we will not get out of Iraq.

http://www.financialsense.com/Market/wrapup.htm



Federal_Reserves (9/24/03; 18:15:23MT - usagold.com msg#: 109301)
Credit/Mortgage Bubble
People talk about asset bubbles, but they have it all wrong. We don't have asset bubbles, we have credit bubbles. Credit is the key. Its the underlying framework to the skyscapper valuations.

Once credit expansion starts to fall, you can see the economy start to snap, crackle, and pop. Business loans have been falling for months, now home loans are starting in now.

Decline in credit expansion pushes the money supply growth lower & lower and can bring on contraction.

We are the verge of collapse. The Fed must be sh*tting bricks today, they came out today in force to talk about how good things were going and the stock market fell like a brick!


R Powell (9/24/03; 17:43:29MT - usagold.com msg#: 109300)
Operative
Thanks for the site and thanks for the second to my nomination for Hall of Fame consideration. Thanks also to Paper Avalanche. I follow the weekly and monthly usda reports very closely. May I give you a link in return, fgtcoop.com. Those of us who follow these other commodity markets know what a true enigma gold and silver can be, yes?

From a suspect memory I believe nomination takes three seconds. We now have two.

I sense that the POG can not rise much more without doing so with some extraordinary spikes from preordered buy orders and short covering. And then, maybe, some wild ups and downs. Just a feeling, probably a reaction to the COT numbers that we've been watching. What great fun!
Rich

Goldendome (9/24/03; 17:17:38MT - usagold.com msg#: 109299)
From the Seattle Times Newspaper

Snippet:

The Bay Area remains a drag on California due to the loss of high-tech jobs and incomes during the past three years. The Bay Area's three principal metro areas � San Francisco, Oakland and San Jose � have lost 346,000 jobs from the peak in December 2000 to last month.

....My question is this: Who in blazes is buying all the expensive housing? And with what?



R Powell (9/24/03; 16:54:00MT - usagold.com msg#: 109298)
POG never sleeps
POG now up $2.20 from the Comex close with both the assess and Sydney open for business.

It has been fun watching the fight from 330 to 390. If we close above the pyschological 400 number, will the next 100 dollar climb from 400 to 500 be any easier than 300 to 400 was? I don't know but sense that the 400 level will be noticed, thought about and talked about (even by those who haven't a clue but will be expected to know) and then, with a little speculative encouragement or some serious short covering, that 400 to 500 climb may not take nearly as much time as 300 to 400 did.

I'm still of the opinion that there won't be any spectacular derivatives meltdown (as was predicted at the 354 level or at the $20.00/share price of JPM). However, if there are any unhedged shorts and there probably are some, there comes a time when thoughts of profit turn into drastic measures of financial survival. They will have to stop the bleeding. Massive short covering, if it happens, will be a sight to behold. I had thought the extraordinary long speculative positions would have been broken by now. After that first rapid runup from 330 to about 390, POG retracted almost back to 320. Did that flush out ALL the weak players? Has this last climb been hard enough and gradual enough so that the longs are now strong hands? I don't know but I am certainly enjoying the game. I hope we all are!
This isn't your father's gold market, anymore.

Boilermaker (9/24/03; 16:45:34MT - usagold.com msg#: 109297)
OPEC Cartel
OPEC is often crticized for "controlling" the supply and price of oil. Thank God someone's doing it. If not, we (the US) would have virtually no oil to produce. It's been my rant for several years that we need $50/bbl oil and $10/mcf gas prices to stimulate domestic production, curtail consumption and provide incentive for alternative sources. Cheap oil has pushed our country into the ME quagmire to keep it flowing.

No one wants to pay more for the stuff that has become an absolute necessity for everyday life but we have to realize that each incremental barrel costs more to find and produce. OPEC and the the ME is what amounts to the "Central Bank" of oil. OPEC is their Washington Agreement. Oil and gold, gold and oil. Two very difficult commodities to find and extract. One is not consumed, one is not. OPEC needs to replace their oil wealth with another form of wealth. Wisely, some of them have chosen gold.

Another and FOA saw the linkage and explained it to us. Now that gold is in a new bull market don't be surprised if oil follows it. Quid pro quo.

In the interest of full disclosure I produce 250 bbls/yr from my 53 year-old well and have an interest in three others. If asked to join OPEC I would do so in a heartbeat, even host a meeting here at the farm.

Boilermaker

CoBra(too) (9/24/03; 16:08:05MT - usagold.com msg#: 109296)
Guano, a fertilizer of Substance!
My favorite, BTW, even if it stinks.
A natural product of great colonies of bats ... never heard of albino bats, though they may be the equivalent of albino rats, infesting the halls of the White House and its white-washington sorroundings, also called George to"W"n in white cotton pickin' virgin(ian) country.

Guess, US ha(ve)s to come back to da steenkin' guano of the da great white bat to unnerstan' da message of the clean, though totally black an' white spinning machine!

... and even if my plants love guano - I love gold!

Gold - god's human(oid) fertilizer of civil(ization)ty?

What do I know? Do you - cb2?

CoBra(too) (9/24/03; 15:37:59MT - usagold.com msg#: 109295)
The Eagle has Stranded
Er, landed, by Ken Follet describing Ross Perot's noble rescue operation in the aftermath of the Ayatollah revolution.
... and where do we go from here, Phoenix?

- Aye, Arizona to retire the rest of US ... You too? - You bet ... cb2

PS: Not the gold eagle - though ...mhh

Great Albino Bat (9/24/03; 15:37:29MT - usagold.com msg#: 109294)
R Powell asks: "what say you, world?"

Maybe the rest of the world is playing its cards close to the chest.

Never can tell who is reading here, you know. There may be interesting news further on.

The GAB

Paper Avalanche (9/24/03; 15:32:23MT - usagold.com msg#: 109293)
Thanks to the gang!
I vey much appreciate everyone's feedback and insight into the ETF question that I posed last night.

I resoundingly second the nomination of Black Blade's post regarding the ETF's.

PA

Black Blade (9/24/03; 14:35:44MT - usagold.com msg#: 109292)
From The Mailbag

Snippit courtesy of the Daily Reckoning:

Pulling down the recovery's pants, we discover the disgusting truth. It is right there in the unemployment numbers. Not one of the 7 or 8 postwar recoveries failed to produce jobs, Dr. Kurt Richeb�cher tells us. But in the 20 months following the official end of the most recent recession, about 1 million jobs have been lost. In the 2nd quarter, 260,000 is the number given for jobs lost. Even this is a bit of a lie. It doesn't measure the number of people who've given up looking for work - a number said to be twice as large.

Plus, with his trousers down, we find an even bigger disappointment in Mr. Recovery. "The government adds every month some 30,000 - 50,000 imaginary workers to the job total," Richeb�cher tells us. "It is based on the assumption that in an economic recovery, people start their own businesses... Once a year, the statisticians reconcile their assumption with reality by a revision. When they did this in May of this year, 400,000 new jobs that have been reported earlier simply vanished. Such revisions, of course, take place outside the monthly reported job losses. Together, we presume, these statistical casuistries have reduced the reported job losses in the past two years by well over 100,000 per month."


Black Blade: Yesterday (or the day before?) I posted a report that the unemployment rate is actually over 9%. Well, if all worker stats are taken into account the actual U.S. unemployment is over 12.2% but then why quibble over a mere 3% when the BLS is simply lies about the data (their very own data no less). "Jobless Recovery" doesn't even come close to what is happening. Job losses are rising and there is a lot of concern among U.S. manufacturers. There are about 4,000 jobs leaving for foreign "outsourcing" every month. Yesterday Daimler-Chrysler announced that they were closing up to five auto manufacturing plants. That should have Detroit in a tizzy. Meanwhile if you have an IT or tech related education then go back to school and get another degree because you wasted a lot of time and money. Tech jobs (at least in the US) are going the way of the dinosaur. Several companies are firing their tech workers and sending the work to India and China (and a smattering of SE Asian countries). EDS will fire about 10% more of its workforce and instead of paying some US techies $70,000/year they will pay an Indian worker with an equivalent education about $6,500/year. Gee, wasn't EDS a Ross Perot company and he used to warn of a great "sucking sound" as jobs left for Mexico a few years ago when running for the US presidency? Hmmm�



Operative (9/24/03; 14:29:04MT - usagold.com msg#: 109291)
@ R Powell, Second the Hall of Fame Request.
http://www.usda.gov/nass/aggraphs/cropmap.htm
And link is for you. Thought you might enjoy taking a look at where all those crops are grown.

Really surprised that "they" are letting the markets tank so close to month/qtr end. Signs of impending fall for Dow/SP in October?? And proud of the gold/silver longs, hang'in tough they are!

Dollar looking like it needs a serious rest, perhaps some of the techie guys can update thier tea leaves, er...charts and give us a reading on what is next for the tired greenback.

Lets see how TOCOM handles the increased PM prices this evening. Could be a lot of fun.

Black Blade (9/24/03; 14:13:08MT - usagold.com msg#: 109290)
Gold Spiking Higher in After Hours

Many analysts have been saying that should spot hit $388 an ounce then this would punch right on through resistance and the next level being anywhere from $400 to $418 an ounce. Well in after hours (currently) gold is rising and sits at $388.50 an ounce. Now we await to see if these analysts projections play out for the $400 or higher mark. OPEC has been our friend today and they essentially called everyones bluff on falling oil (make that energy) prices.

- Black Blade

USAGOLD Daily Market Report (9/24/03; 14:01:19MT - usagold.com msg#: 109289)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Afternoon Gold Report by Jon H. Warner 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.

R Powell (9/24/03; 14:01:14MT - usagold.com msg#: 109288)
Today's markets
The stock market indexes are now closing at or near their lows for the day. The VIX is near it's daily high.
The dollar index is near it's low and gold closed up just $0.10 off it's high. Even silver was up a little.
Energy in all it's various forms was up big (thanks to OPEC). Now, if only cotton, coffee, corn and a few others could get untracted...oops, wrong forum... but a rising CRB may be an indicator of higher metal prices to come. Or a rising CRB may be an indirect force helping to raise those metals' prices or it may be both.

I often wish we had more imput from international posters and would like to encourage any and all non-American or expatriots to speak up. Gold and silver are global metals and CPMetals does provide (I believe) an international means of metals possession. What say you, world?
Rich

R Powell (9/24/03; 13:41:26MT - usagold.com msg#: 109287)
ETFs and hall of fame nomination
Because I know we have just discussed ETFs based on gold possession and because I know we had discussed the same in the past and because I'm willing to bet that the subject will arise again....and because I too, was impressed with the clarity, simplicity and expertise with which Black Blade explained and evaluated these ETFs in Post 109259, I would like to nominate that post for the Hall.

There, how's that for a run-on sentence! Seventy words long!
Anyway, I thought it might be worth saving so if any agree with me and second the vote, I'll let Randy know.
Thanks and thanks too to Mr. Blade for distinguishing between apples and oranges.
Rich

USAGOLD / Centennial Precious Metals, Inc. (9/24/03; 12:04:47MT - usagold.com msg#: 109286)
Hard assets, easy access!!!
http://www.usagold.com/gold-coins.html





Zhisheng (9/24/03; 11:31:26MT - usagold.com msg#: 109285)
Up into the close!
And closed near the top of the day: Dec futures at $388.40.

Knallgold (9/24/03; 11:23:07MT - usagold.com msg#: 109284)
ETF
If funds want to buy 1000t of Gold,and the ETF is allegedly backed 100% by Gold, it would zoom the price as if they would buy the physical outright.So why not allow funds to buy Gold in the firstplace? (Probably too easy)

And I never bought the argument of "people don't know how to buy Goldcoins so we have to create an instrument to facilitate it".There might be ignorance in the herd,but it would take an hour to get informed (and find this site for example)!Its like buying a TV.And,why should it be easier to buy an "Goldinstrument(ETF)"???

RS (9/24/03; 11:15:26MT - usagold.com msg#: 109283)
@ MK (9/24/03; 10:01:09MT - usagold.com msg#: 109282)
Sir,
Hear, hear!
Very well said!

MK (9/24/03; 10:01:09MT - usagold.com msg#: 109282)
The March of Folly: To be Continued at an Economy Near You
Dollar Bill and All....

Dubai did not produce an accord. It did not even produce an accomodation. It ended as little more than a affirmation of the status quo. So much so, that the UK and Japan basically said that nothing happened; China dug in its heels, and the United States claimed that G7 had achieved some sort of understanding on flexible exchange rates. The forex markets initially signalled the U.S. would get its way, but the jury's still out on this one. The dollar cratered yesterday and gold made another solid move to the upside.

Yesterday, John Snow -- after everything that happened before, after and during Dubai...after the United States pushed hard for China and Japan to realease their currencies -- reiterated that the Bush administration sees 'no change in the strong dollar policy.' He said this the same day that he proclaimed that Dubai had produced 'a milestone change' in worldwide currency policies (which inferred flexible interest designed to drive the dollar lower). The Wall Street Journal yesterday printed this headline on its front page: U.S. Push for Weaker Dollar Rattles Markets Around Globe." In that same article, Japan's finance minister stated that there would be "no change in fundamental policy." That policy is not very complicated. It calls for Japan to intervene in the currency markets to drive down the yen for the upteenth time over the past year. With this amount of confusion among the 'players' -- all attending the same conference and signing off on the same 'statement' -- is it any wonder that the markets are asking questions about what really happened in Dubai.

Let me be among the first to state what appears from the outside to have happened at Dubai:

Nothing.

The March of Folly (Thanks C-Man) will continue at an economy near you.

In Japan, you will continue to export to the United States and add to your $500 billion in dollar reserves.

In China, you will continue to export without restriction to the United States, use your dollar reserves to cleverly buy influence the world over (note the Chinese financing of the EU GPI system -- opposed by the United States), and all the while continue to position yourself as the primary power in Asia.

In Europe you will continue to accomodate U.S. currency policy while pushing your own agenda toward a free and prosperous Europe -- free of the United States and prosperous enough to keep the euro in circulation.

In the United States, you will continue to import without restriction, build debts and deficits in a one-way march to a potential economic disaster.

We will do these things because there is not other course to be taken, nothing else that can be done. The cross-currents run in all sorts of indefinable directions, but one thing is clear: When we go down this time, we are all going down, and the inability of the top economies to come to a real understanding in the face of these multiple threats will prove to be our collective undoing.

In the end, we will get a new monetary agreement with the majesty of Bretton Woods, but it won't come until this system fails -- utterly and completely. The players for their own reasons will not let it happen any other way.

That's why I own gold. That's why you should own gold. It doesn't matter in which currency you denominate your savings and investments.

The March of Folly is here for the interim.

Final Note: Gold is a winner in either scenario -- the status quo or bumping China and Japan off their high horse. In the former situation, currency printing and debt in all the participating nations will create strong gold demand in all those economies as more and more of the citizenry grasp what's really happening. If we go the other way -- if the dollar begins a rapid decline -- gold will benefit from the old dollar - gold competition (as it did yesterday.) Timing and intervention will be an issue for short term paper players. Physical owners will come to fully understand this statement by Richard Duncan, "The Dollar Crisis: Causes, Consequences and Cures":

"The economic house of cards built with paper dollars has begun to wobble. Its fall will once again teach the world why gold -- not paper -- has been the preferred store of value for thousands of years."

Mr Gresham (9/24/03; 09:27:36MT - usagold.com msg#: 109281)
Richard Russell
"So my feeling is that subscribers waste a lot of time trying to time their purchases. The important thesis is that it's a bull market and your job is to "get with the program." If it's truly a primary bull market, whether you pay 375 for your gold coins or 395 is not going to be the critical factor. The critical factor is whether you buy any gold coins or gold stocks at all, and if you do, how many or how much do you buy?"



Mr Gresham (9/24/03; 09:26:52MT - usagold.com msg#: 109280)
Thought for the Day
http://www.quotablequotes.net/search.asp?type=Author&searchdb=Wilde,%20Oscar
"America is the only country that went from barbarism to decadence without civilization in between." -- Oscar Wilde

Went looking for the source of a longtime phrase recurring to me in many situations: "Nothing succeeds like excess." And, yes, it was Oscar.

And we have seen more excess, at least in the economic stats department, than ever. Let's see for whom success rings its bell. Some few are aiming to cash in bigtime -- we'll see what their prize shall be. At the price of great loss for the slumbering many. And a few "small dogs" clinging to a golden lifeline.

"Then time will tell just who has fell, and who's been left behind, when you go your way and I go mine" -- Dylan



Operative (9/24/03; 06:44:05MT - usagold.com msg#: 109279)
Oil Surges After Surprise OPEC Cut
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=3499402
Oil Surges After Surprise OPEC Cut
Snip:

LONDON (Reuters) - Oil prices surged on Wednesday after OPEC agreed a surprise cut in oil output, removing 900,000 barrels per day from world supplies ahead of peak winter demand.
U.S. light crude CLc1 was trading 88 cents firmer at $28.01 a barrel, while London benchmark Brent futures LCOc1 gained 98 cents to $26.50 after an initial jump of more than a dollar.


Operative (9/24/03; 06:34:46MT - usagold.com msg#: 109278)
Global Markets: Dollar Weakens
http://www.reuters.com/newsArticle.jhtml?storyID=3498279


Global Markets: Dollar Weakens
snip:
LONDON (Reuters) - Calls by leading industrial nations for flexibility in exchange rate policies continued to echo across financial markets on Wednesday, but with some signs that the fury of the past few days was running out of steam.
The dollar weakened against both the euro and Japanese yen, but was above its recent lows. European debt yields dropped after a two-day rally.
Following the comment, the dollar plunged against major currencies, Japanese shares sank on worries over exports and European bond prices leapt as many Asian investors moved out of U.S. assets."


Operative (9/24/03; 06:29:34MT - usagold.com msg#: 109277)
Hong Kong defends U.S. dollar peg
http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2003/09/23/financial0105EDT0007.DTL
Snip:

"Hong Kong defends U.S. dollar peg as speculators drive local currency to 6-year high



The Hong Kong Monetary Authority said Wednesday it sold Hong Kong dollars worth $60 million to defend the local currency's peg to the U.S. dollar after speculators pushed its value to a six-year high.
The authority, which functions as the territory's de facto central bank, made the trade Tuesday morning to protect the link of HK$7.80 to the U.S. dollar, said spokeswoman Jasmin Fung.
The close ties between mainland China and the territory prompted foreign investors to snap up Hong Kong dollars, which unlike yuan are fully convertible
The buying pressure on Asian currencies came after the Group of Seven industrial nations over the weekend called for more flexible currency rates. Several regional currencies, including the Japanese yen, have since appreciated, sparking a plunge in the U.S. dollar. "


Operative (9/24/03; 06:19:16MT - usagold.com msg#: 109276)
Rosh Hashanna
A couple of important dates are coming up for our Jewish friends and Israel. This weekend, beginning September 27 is Rosh Hashanna, the Jewish New Year. Ten days later on Ocotber 7 is Yom Kippur or "Day of Atonement" considered by most as thier most sacred day of the year. Both of these dates as well as the 10 days inbetween are important religious holidays, let us hope they may celebrate them in peace.

DummyANI (9/24/03; 02:22:32MT - usagold.com msg#: 109275)
Im sorry
Sep. 24 27,807. minus1898�c...387.0

is right.

DummyANI (9/24/03; 02:04:03MT - usagold.com msg#: 109274)
Mitsui Gold-trading Report at TOCOM:
Mitsui assumes a strong-bull trend continues to jump up at a new-high level against a strong Yen-trend
Date: Net short changes Pre.COMEX-close
Sep. 11 27,754�c plus0512 �c 381.1(Dec.2003)
Sep. 12 27,810�c plus0056 �c 380.8
Sep. 15 .. nil�c ..�cnil�c �c�c....376.9
Sep. 16 28,672�c plus0862 �c.375.6
Sep. 17 32,011�c plus3339�c.. 374.6
Sep. 18 26,405. minus5606�c...377.3
Sep. 19 29,971�c.plus3566�c377.7
Sep. 22 29,705. minus0266�c...382.9
Sep. 23 .. nil�c ..�cnil�c �c�c....388.3
Sep. 24 27,807. minus1898�c...382.9

Comment: TOCOM gold was down 10 yen today, but Mitsui is diminishing their short-positions very rapidly. In the case of Feb. 2003, Mitsui increased his short-positions from 55,000 to 83,000 according to a gold-price-rise 380$ and over. In the recent gold-trend, Mitsui-strategy is that the higher the gold-price rises, the lesser his short-positions against Yen-rise.

This indicates that Mitsui assumes a strong-bull trend continues to jump up at a new-high level against a strong Yen-trend. This is very promising to a dollar-gold price.

D-ANI: Buy a gold, sell a Yen


Liberty Head (9/24/03; 00:31:14MT - usagold.com msg#: 109273)
Start Your Day With A Prayer
(loud with vigor)
(Short skirt and poms poms optional)

GIVE ME A JEEE.
G
GIVE ME AN OOOH.
O
GIVE ME AN ELL.
L
GIVE ME A DEEE.
D
What's that spell?
GOLD
WHAT"S THAT SPELL?
GOLD
WHAT"S THAT SPELL?
GOLD

goooOOOOLD GO!

When you hear the above on Fox TV, you will know that it is time to sell.

Best Wishes

Waverider (9/24/03; 00:09:26MT - usagold.com msg#: 109272)
Black Blade
Thanks for the encouragement. I installed a security system which I paid for but whoaa...it's a little TOO secure! I can't access a couple of internet sites which I subscribe to, so I shall continue working on the problem - it's time consuming though and my computer was down a good part of last week. Anyhow, thanks for the kudos (and thanks Boilermaker and others) - a little intuition with a sprinkling of luck appears to work well...no TA - just a "feel" for Spot - but it darn near gave me a heart attack yesterday! Cheers,
Waverider

BTW - it's GREAT to see a permanent link now to the DMR!

GratefulForGold (9/24/03; 00:05:06MT - usagold.com msg#: 109271)
Druid @ msg. #109266
Ask a simple question of a Druid and what do you get?

More than I can read (although I have read/stared at it) at this late hour (for me).

THANK YOU! My brain DID feel like I was tracking what you were saying. It's just too late for me to really think about what you've said and see if I understand. Must go to work tomorrow and it tries to tax my abiliies. So, until I can next re-visit this castle...goodnight and god (or diety) bless you!

Lady GFG



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