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ARCHIVED DISCUSSION FROM 4/24/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) The Invisible Hand (4/24/06; 23:15:42MT - usagold.com msg#: 143549) Marc Faber Says Gold May Rise 10-Fold http://www.bloomberg.com/apps/news?pid=10000081&sid=aUeDGtHNebpI&refer=australia SNIPApril 25 (Bloomberg) -- Marc Faber, who told investors to bail out of U.S. stocks a week before the 1987 Black Monday crash and began recommending commodities at the end of 2001, said gold may rise 10-fold in the next 10 years==So we have Marc Faber saying gold has 10 years to riseand Paul de Grauwe saying that the euro has 10 years to collapse (The Invisible Hand (4/24/06; 21:56:14MT - usagold.com msg#: 143545)) The Invisible Hand (4/24/06; 23:03:24MT - usagold.com msg#: 143548) Tax is theft. Government is fraud! http://today.reuters.com/news/articlenews.aspx?type=politicsNews&storyid=2006-04-24T072610Z_01_VAT000028_RTRUKOC_0_US-ENERGY-TALKS-USA.xml The thief doesn't come back periodically. Nor does the thief pretend to be stealing in the public interest.SNIPTitle: Little will in US to hike gasoline taxes-BodmanThe Invisible Hand: There is no political will How they're gonna solve the budget deficit?Have the anarchists won the day in Washington, DC?Ni dieu, ni maitre.http://today.reuters.com/news/articlenews.aspx?type=politicsNews&storyid=2006-04-24T072610Z_01_VAT000028_RTRUKOC_0_US-ENERGY-TALKS-USA.xml The Invisible Hand (4/24/06; 22:52:54MT - usagold.com msg#: 143547) BB stresses importance of MTM eurogold as gold-wealth-reserve http://de.today.reuters.com/news/newsArticle.aspx?type=economicsNews&storyID=2006-04-24T090521Z_01_MAI432716_RTRDEOC_0_DEUTSCHLAND-IWF-WEBER.xml SNIPSIn an interview in the Monday edition of the Frankfurter Allgemeine Zeitung on the sidelines of the IMF-meeting, Bundesbank President Axel Weber opposed further competences for the IMF in regulating exchange-rates.The IMF should concentrate on its main tasks. The INF has been instituted to be an umpire in questions relating to exchange rates. (The Invisible Hand probably misunderstood this last sentence. Knallgold, du?)+The IMF is being financed by interest income from credit to countries in financial crisis. Some large debtors like Brazil and Argentine have in the past years paid off their obligations vis-à-vis the IMF. According to Weber, the fund has (will have?) a structural financing problem soon (When? The Invisible Hand's knowledge of German is too bad. Herr Knallgold, bitte!, when the supervision function will be strengthened with the costs of the financial help????) The IMF must therefore decrease the number of its tasks. The rest, The Invisible Hand doesn't understand, except the final sentence: "ONE CAN DISCUSS ABOUT THE FIRST TWO POINTS. THE DISMANTLING OF CURRENCY RESERVES THROUGH THE SELLING OF GOLD WILL HOWEVER NOT ACHIEVE OUR GOALS.http://de.today.reuters.com/news/newsArticle.aspx?type=economicsNews&storyID=2006-04-24T090521Z_01_MAI432716_RTRDEOC_0_DEUTSCHLAND-IWF-WEBER.xmlBundesbank-Präsident Axel Weber hat sich am Rande der Frühjahrstagung des Internationalen Währungsfonds gegen weitgehende Kompetenzen des IWF bei den Wechselkursen ausgesprochen.Der IWF solle sich auf seine Kernaufgaben konzentrieren, sagte Weber in einem Interview mit der "Frankfurter Allgemeinen Zeitung" (Montagausgabe). Dazu gehöre eine schärfere Überwachung von Wechselkursen: "Von einer Rolle als Schiedsrichter in Wechselkursfragen, womöglich noch unter Zuhilfenahme numerischer Werte von mutmaßlichen Gleichgewichtswechselkursen halte ich aber nichts." +Der Fonds finanziert sich unter anderem mit Zinseinkünften aus Krediten für Länder in Finanzkrisen. Einige große Schuldner wie Brasilien und Argentinien tilgten in den vergangenen Jahren ihre Verbindlichkeiten gegenüber dem IWF. Der Fonds steht Weber zufolge vor einem strukturellen Finanzierungsproblem, wenn die Überwachungsfunktion zu Lasten der Finanzhilfe verstärkt werden soll. Der IWF müsse deshalb seine Ausgaben senken. "Aber wird werden wohl nich umhinkommen, uns auch Gedanken über andere Einnahmequellen zu machen", sagte er. In der Diskussion seien Gebühren für Dienstleistungen des IWF, die Schaffung eines ertragbringenden Investitionskontos und der Rückgriff auf eigene Reserven. "Über die ersten beiden Punkte kann man reden, den Abbau von Währungsreserven durch Goldverkäufe halten wir aber nicht für zielführend."==HENCE,the ***-increasing-*** DISTINCTION betweendollar-currency-reserve ANDgold-wealth-reserve, meaning marked to market (MTM) eurogold, of course. Druid (4/24/06; 22:41:07MT - usagold.com msg#: 143546) Sweet deals: Behind the Iran 'crisis' http://www.atimes.com/atimes/Middle_East/HD11Ak01.html Snip."On reading the recent wave of stories concerning US readiness to bomb Iran back to the Stone Age unless it gives up efforts to produce nuclear weapons, my first reaction was to be "shocked and awed". But then a realization sank in. All this noise concerning Iranian nuclear preparations was, as William Shakespeare had it, "a tale ... full of sound and fury, signifying nothing". As a former director of an oil exchange with recent experience in Iran due to my involvement in a proposed Iranian oil bourse, it hasbeen clear to me for some time that the nuclear issue is a red herring. But I confess that it had puzzled me for some time why everything except oil is going to be privatized in Iraq. "It's good for the US," I thought. Well, I did until I recently read an analysis by Greg Muttitt of the plans by Big Oil to enter 40-year Production-Sharing Agreements (PSAs) with Iraq. The deal is this: we develop your oilfields, and in return we get - for 40 years - a major share of your crude-oil production at favorable "at cost" prices. The outcome will be profits beyond the dreams of avarice. Once these contracts are signed, of course, global institutions (backed by US policing) will ensure that they are honored, whatever happens subsequently in Iraq, and whatever countries are able to influence policy in Iraq. The fact that there is still a US base in Cuba, for instance, illustrates how rigorously international treaties and the rule of law may apply despite differences in ideology. Does anyone seriously believe that decision-makers in the US would countenance a bombing campaign that would almost inevitably lead to crude oil at US$150 per barrel, whether or not that suited Big Oil? "Druid: This is a pretty good read to get you thinking in a certain direction concerning long term forward oil contracts at preset prices. Where have we seen this before? Enjoy the read. The Invisible Hand (4/24/06; 21:56:14MT - usagold.com msg#: 143545) Warning: Euro May Be Terminal http://news.monstersandcritics.com/business/article_1158044.php/Business_Roundup SNIPBRUSSELS, April 24 (UPI) -- Another respected European economist is warning of the euro`s collapse unless there is progress towards political union.Paul de Grauwe of Belgium`s Catholic University in Leuven is warning the euro is bound to collapse in 10 to 20 years because there is no clear movement toward political union in Europe, the EU Observer reported Monday.Last week a new member of the European Central Bank`s board, the German Bundesbank`s vice president, made a similar point.'I am concerned about these trends because monetary union ... needs a common political foundation and a political commitment to function smoothly,' said Jurgen Stark.The 12 European nations using the euro have a 2 percent average increase in their gross domestic product and unemployment that is close to 10 percent, or more.==So, it won't be this week, gold can still wait 10 years before reaching $30,000. The Invisible Hand (4/24/06; 20:23:36MT - usagold.com msg#: 143544) Plaza II : dollar-currency-reserve VERSUS gold-wealth-reserve http://blog.zeit.de/herdentrieb/?cat=6 Wikipedia, the free encyclopaedia, says that the Plaza I Accord was an agreement signed on September 22, 1985 by the then G-5 nations (France, West Germany, Japan, the United States and the United Kingdom). The G-5 agreed to devalue the US dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets.These days, the revaluation of all currencies vis-à-vis the dollar is already happening. During this IMF week-end, the yen shot up significantly (chart-technically) vis-à-vis de dollar. The euro is also raising vis-à-vis the dollar and the yuan will provide the necessary assistance.It will be necessary for all currencies to act in concert. This can occur in an orderly manner as long as none of the rising currencies is going to cheat and thus to take more advantage (commercial profit) out of Plaza II.We will have to see whether the yankees will lower their expenses and consumption and/or whether they will start saving.It is to be feared that the currency exchange rate adjustment will not occur in an orderly manner and the whole revaluation is thus a fruitless attempt to restore the dollar to acceptable deficits. Today's world is no more the 1985 world.In order to achieve anything in this field, the field of economics, we need a brutal dollar-devaluation. This is impossible because of the existing imbalances. The damage (economic loss) which this will create for the surplus makers cannot be foreseen. Plaza II is thus a mere theoretical mental exercise. Global economic peace is one thing. The number of losing parties who no longer want to swallow the dollar-IMF mismanagement is a completely different thing.We will continue to bungle on and to be eroded by the canker of the dollar mismanagement entailed in the Anglo-American financial/economic attitude.And Britain, while not in the euro-area, is still a member of the European Union (EU). Hence, I was surprised to see no reaction to this:The Invisible Hand (4/23/06; 05:47:00MT - usagold.com msg#: 143498)More from The Observer: sterling to collapse with dollarhttp://observer.guardian.co.uk/business/story/0,,1759567,00.htmlSNIPThe oil crisis of the mid-1970s took place after a period of strong economic growth, and was seriously inflationary. The latest crisis takes place when growth in the eurozone has been anaemic, and unions have precious little bargaining power - even though the unions in Germany are going through the motions. +If the pound goes down as well as the dollar (but presumably not as much) this may alleviate the problems of Britain's manufacturers. This explains why, while the dollar and its satellites are losing all their value, gold more and more clearly displays its role as wealth-reserve.The dollar or any other currency is intrinsically worth zero. If you have only other currencies in reserve, the optimal reserve quantity can only be useful for the management of your own currency. Reserves made up of currencies have therefore NO wealth value … only a functional utility (use-value). Is it therefore logically surprising that Another reserve is flowing away from the dollar context and flowing closer to its NEW status as WEALTH RESERVE?Goldbugs would do well to operate an essential and fundamental distinction between dollar-currency-reserve and gold-wealth-reserve. Topaz (4/24/06; 16:08:55MT - usagold.com msg#: 143543) woops! http://www.nymex.com/media/delivery.pdf I think they've overdone the Silver "downside management" thingie this time through.Usually Gold can be driven down at this point in the Month as the deliveries have all but finished however, Comex non-delivery month Silver totals 2000 odd contract equivalents with 600+ going through today.Gandy, unshackle the Hounds!! TownCrier (4/24/06; 15:51:53MT - usagold.com msg#: 143542) 968, "new Plaza accord" My thoughts are that this is yet another prime example where lack of mention of the gold component, being so very conspicuous by its absence, serves roundabout as confirmation of its utmost importance -- that it's position in the progression of affairs is so vital that no one dare add heat or intrigue to the situation by calling any amount of attention to it.And yet this same conspicuous absence replays itself over and over in almost every dollar-reserve related policy brief, whether it be for a "new Plaza accord" as seen in this paper or for general reforms of the IMF as discussed elsewhere.This cannot be attributed to inapplicability or irrelevance, because the gold component of current reserves is a VERY significant proportion. And it also can't be chalked up to mere oversight or ignorance because it is statistically improbable that that many policy-offering economic agents could ALL be that clueless.But then again, those with the deepest insight typically have less to offer freely for public consumption.R. Goldilox (4/24/06; 15:10:22MT - usagold.com msg#: 143541) Gold, Dollar, and FED http://www.123jump.com/market-update/Gold,-Dollar-and-Fed/17351/ snip:Fed may not be able to defend dollar if rates remain low for too long.This is only a scenario but if the Congress and the Fed do not mend their ways then slow but steady pace of the dollar decline is unstoppable. Everyone is looking for a crisis but steady and painless drift of dollar may pose a greater danger. It is argued that the U.S. has sustained trade deficit for forty years and still managed to raise living standards. That is true and false. Yes, we have created two million jobs every year for the last thirty five years. But we created same number of jobs when we had 220 million citizens, in the seventies and eighties, and now when we have 300 million in the year 2006. The share of less than $15 per hour job in the labor pool has grown when total number of jobs created has not. In fact, Wal-Mart claims to create 220,000 jobs a year in this country adding up to 10% of all jobs.-GoldiloxThis is the final paragraph of what seems to be a pretty good analysis. The rest is well worth reading. TownCrier (4/24/06; 15:09:32MT - usagold.com msg#: 143540) Dollar's competition grows -- Lithuania to lobby EU over euro http://www.forextv.com/FT/AFX/ShowStory.jsp?seq=99908 VILNIUS (AFX) - The Lithuanian government said it plans to send an official letter to the European Commission to argue that the country has met EU requirements for joining the euro in 2007.Lithuania joined the EU in May 2004 and wants to replace its national currency, the litas, with the euro from January 1."Lithuania has been participating in the ERM II mechanism for two years and meets all Maastricht requirements -- on state debt and fiscal deficit", Lithuania's finance minister Zigmantas Balcytis told journalists."We would meet inflation criteria too if the figures were rounded off."...Euro zone finance ministers warned at a meeting in Vienna on April 7 that there would be no exceptions made for euro zone hopefuls which are struggling to meet the standards required for joining...^---(from url)---^A fair assessment of fate of the dollar (and its bonds) as a reserve asset requires the following perspective. It would be pure hypocrisy for the ECB on the one hand to profess strictness regarding the budgetary prudence of current members (and would-be member Lithuania) and to garner respect for its policy against providing direct support of govt funding gaps with outright purchase of its own members bonds, while on the other hand it could be seen holding any significant amount of U.S. debt.To maintain its stance as as a responsible monetary agent and eliminate the spectre of hypocrisy, the ECB needs to be understood to be taking measured steps toward the elimination of this asymmetric system of foreign support -- to show a continuing trend of paring the size of its holdings of U.S. Treasury securities.With not much room for anything else (as a matter of policy), the evolving structure of reserve assets will certainly show gold to have an increasingly prominent role.R. USAGOLD Daily Market Report (4/24/06; 14:33:11MT - usagold.com msg#: 143539) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.MONDAY Market ExcerptsApril 24 (from Reuters) -- COMEX June gold fell $11.60, or 1.6 percent, to close at $623.90.Gold initially rose overnight on bullish sentiment among investors, with bargain hunting evident at recently cheaper prices. But a tumble in crude oil from record highs above $75 per barrel to just over $73 depressed gold, and a weaker dollar failed to lend support.COMEX gold has experienced a blistering five-year rally to levels not seen since 1980, when it reached a record $850. Futures got as high as $649 last Thursday.Many analysts expect the gold rally to resume this year.Standard & Poor's Equity Research Services said Monday it raised its 2006 year-end closing price forecast for gold to $710 an ounce, from $600 previously."In our opinion, the supply and demand dynamics have set the stage for a multiyear bull market for gold," said Leo Larkin, a senior analyst at S&P."The gap between production and consumption of gold should widen as output likely stagnates and physical demand rises.""Additionally, the inflows into commodity funds, based on the belief that tangible assets will outperform financial assets, and continued strong consumer demand from India has helped boost the gold price," added Larkin.Both oil and gold have risen recently, thanks to jitters over Iran's refusal to back down on its nuclear program, despite a pledge to keep oil supplies flowing. In Tehran, the foreign ministry has said Iran's decision to enrich uranium was irreversible, despite the threat of sanctions or military action. This has heightened fears of a disruption in supply from the world's fourth-biggest oil exporter.Meanwhile, the dollar slid to a seven-month low against the euro after the Group of Seven said China should let the yuan appreciate as a way of fixing global imbalances.---(see url for full news, 24-hr newswire)--- Goldilox (4/24/06; 14:27:11MT - usagold.com msg#: 143538) Sidelines @ TC,Your quote:"Oddly, despite mind-boggling imbalances, many people are behaving as though we shall (continue the way we are today). Are they so distracted by entertainment (sports, movies, and what passes for news on the TV) that they don't have any sense of the world scene?"so poignantly expresses the status quo! Bread and circuses!But it's not like the media isn't complicit. Hour after endless hour of Martha and Michael Jackson, and Natalie the Aruba "party girl, "with nary a mention of Barrick/Blanchard, Duke Cunnigham (who got 8 years), or any of the other serious corruption investigations. Even the ENRON trials have had fairly sparse coverage overall.Don't let the sheeple get the idea that their "leaders" are crooked and/or clueless! The "bad guys" are always loners! TownCrier (4/24/06; 14:18:20MT - usagold.com msg#: 143537) More gold market news... http://yahoo.reuters.com/news/articlenews.aspx?type=topNews&storyid=urn:newsml:reuters.com:20060424:MTFH49241_2006-04-24_19-42-40_L24450684&rpc=44 Gold, silver off in choppy trade, trend seen higherLONDON, April 24 (Reuters) - Gold continued a rollercoaster ride on Monday, trading in a broad range below its 25-year peak, and silver took a beating, falling more than 8 percent.Some investors booked profits from highs and price dips attracted new buyers, but overall sentiment remained upbeat, traders said. Gold traded in a range of $20 an ounce, compared with an average $27 in the previous three sessions, but much higher than about $10 in the past weeks."The market has just become more volatile because the funds are getting in and getting out. It's very difficult to control the market, but it's not collapsing," said Peter Hillyard, head of metals sales at ANZ Investment Bank."The swings are going to be more significant, but the overall direction hasn't changed. It's higher," he added.A weak dollar first pulled more money into gold, before easing oil prices took some of the worry out of inflation concerns, prompting a wave of bullion sales, dealers said.Oil fell sharply after the Organization of Petroleum Exporting Countries promised to keep pumping near maximum capacity.Merrill Lynch analyst Michael Jalonen said in a client note that in the short term the gold market should "gain confidence by virtue of holding above the $600-an-ounce level."^---(from url)---^The gold should also "gain confidence" as ever more investors and traders come around to an open-eyed understanding (that the metal can't be printed at will whereas derivatives can) and then adjust their investment decisions accordingly.R. TownCrier (4/24/06; 13:58:46MT - usagold.com msg#: 143536) Gold market news... http://www.marketwatch.com/News/Story/Story.aspx?column=Metals+Stocks&siteid=mktw&print=true&dist=printTop SAN FRANCISCO (MarketWatch) -- "This week could prove quite important for gold as speculators [decide] whether to probe higher or to continue locking in profits," said James Moore, an analyst at TheBullionDesk.com in London."Gold should continue to find good support given the limited change in the macroeconomic and geopolitical picture, particularly with the U.N. Security Council's deadline on Iran approaching at the end of the week," he said in a note to clients. For now, "dips generate good buying interest with support pegged at $618/$610," he added.The Nymex announced margin changes for gold, silver and copper futures as of Friday's close. Margins for the gold futures contract increased to $2,250 from $1,750 for clearing and non-clearing members and to $3,038 from $2,363 for customers, Nymex said."This has caused some traders to pare down their positions and reevaluate their exposure," said Kevin Kerr, editor of Global Resources Trader. "However, there seems to be little lack of new buying on significant dips in the market."The dollar slumped to a three-month low against the Japanese yen and a seven-month low against the euro Monday, after the G7 and IMF weekend meetings ... put the massive U.S. deficits into the spotlight in their focus on "global imbalances," a factor expected to further pressure the dollar.Standard & Poor's Equity Research Services raised its 2006 year-end closing price forecast for spot gold to $710 an ounce from $600 on Monday.^---(from url)---^R. osa104c (4/24/06; 13:20:57MT - usagold.com msg#: 143535) Panic at MARK>>>GO US$ to 85.40??.........golden sunsets and silver dreams??? 968 (4/24/06; 13:13:59MT - usagold.com msg#: 143534) Dollar risk to global economy outweighs yuan risk - China central banker says http://www.forbes.com/markets/feeds/afx/2006/04/23/afx2689701.html SNIPS :"China's central bank chief said the dollar represents a greater risk to the global economy than the yuan does.""Rather than monitoring the yuan, global financial institutions should watch the US dollar, said Zhou Xiaochuan, governor of the People's Bank of China.""Global trade, settlements and reserve assets are heavily reliant on a single currency,' Zhou said in remarks to the International Monetary Fund. 'The fund should give priority to establishing a surveillance and check-balance mechanism of the major reserve currency countries."----------------------------------------------------------------------------------------------------------------------A check-balance mechanism of the major reserve currency countries : now that is something the Eurosystem with its MTM system will like...If you hear this man speak, don't you think the PBC already has a lot of gold stored somewhere (e.g. in the BIS) just in case... TownCrier (4/24/06; 12:25:53MT - usagold.com msg#: 143533) France's Breton: Global economic imbalances "scary" http://yahoo.reuters.com/news/articlenews.aspx?type=topNews&storyid=urn:newsml:reuters.com:20060424:MTFH45792_2006-04-24_17-04-55_N24307434&rpc=44 NEW YORK, April 24 (Reuters) - France's Finance Minister Thierry Breton on Monday said concerns were mounting among the world's richest nations over the yawning difference between the U.S. trade deficit and Asian surpluses."The difference in the gap we have between mainly Asia and the U.S. is starting to be scary for some of us," Breton told an audience at a conference in New York on global economic issues.Breton also said that United States must begin the necessary but "painful" process of addressing its fiscal deficit, and said France had already opened a national debate on addressing its own budget shortfall."You won't be able to continue the way you are today," he said...^---(from url)---^Oddly, despite mind-boggling imbalances, many people are behaving as though we shall (continue the way we are today). Are they so distracted by entertainment (sports, movies, and what passes for news on the TV) that they don't have any sense of the world scene?R. TownCrier (4/24/06; 11:44:46MT - usagold.com msg#: 143532) Making money -- Fed's outright buying of Treasuries http://yahoo.reuters.com/news/articlenews.aspx?type=topNews&storyid=urn:newsml:reuters.com:20060424:MTFH42162_2006-04-24_14-41-53_N24293216&rpc=44 The Federal Reserve today entered the open market to buy Treasury coupons with an eye on propping the yield curve two years out, focusing on maturities and call dates from February to November, 2008.In bidding up today's $1,096 billion tranche of U.S. Treasury debt, the Federal Reserve effectively created and added that much fresh cash to the 'permanent' money supply from which the commercial banking system can further expand the supply through their natural lending activities.When new quantities of money can be created so easily, you know you need to be taking special steps to ensure that your savings is as good as gold. Walk "in the footsteps of giants."R. Goldilox (4/24/06; 10:59:22MT - usagold.com msg#: 143531) Oil will hurt? @ TIH,While it's obvious that rising fuel and food costs hurt the fixed income retirees immediately, the corporations awash with cash are not feeling any pain from it. The top ten are all "profitting" in the 10's of billions, where only ten years ago, total revenues in the tens of billions were farely rare! Hmmm . . . have we actually witnessed another 80% devaluation since then? If so, the hedonics have hidden it pretty well.Let's face it. US "industry" now caters to the security crowd, usng government contracts to fund everything. The US, state, and local governments are the true customer of last restort. Not unlike 1933 Germany, I might add.The consumer goods are produced elsewhere, so the "effects" of inflation are likely to have some lag added by globalism, itself. The Invisible Hand (4/24/06; 09:52:25MT - usagold.com msg#: 143530) At "some point" oil will hurt http://www.theage.com.au/news/business/imf-finds-raison-detre-in-policies-of-the-past/2006/04/24/1145861285862.html IMF finds raison d'etre in policies of the pastSNIPThe IMF has been surprised at the modest impact of dearer energy on the global economy, believing the inflationary effects have been mitigated by the credibility of central banks and by the competitive pressures of globalisation.But, as the fund sees it, there is no law that says this state of affairs will persist. It argues that the full impact of high oil prices has yet to be felt, there are geopolitical risks of a further rise in prices and supply constraints mean that high prices are likely to persist for longer than they did in the 1970s.At some point, the global economy will suffer deleterious effects from high oil prices; nobody is quite sure what that tipping point is, but it's a fair bet that a year of oil prices at $US75 a barrel would have a marked impact on growth.Oil prices are exacerbating imbalances in the global economy. http://www.theage.com.au/news/business/imf-finds-raison-detre-in-policies-of-the-past/2006/04/24/1145861285862.html?page=2 mikal (4/24/06; 09:29:44MT - usagold.com msg#: 143529) @mdgc I'm assuming it's because the Yuan was a major focusof G7 and IMF meetings over the weekend. The Chinese gave indications that the Yuan would appreciate at a faster rate. The Yen is considered a proxy for the Yuan in Asia and many currencies there are expected to appreciate vs US$. The Invisible Hand (4/24/06; 09:28:08MT - usagold.com msg#: 143528) mdgc http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060424&ID=4162646Euro Strengthens Against DollarApril 24, 2006 10:25 AM ETSNIPThe euro touched a seven-month high against the dollar on Monday following a G-7 call for flexible exchange rates and signs that foreign central banks may be diversifying their reserves.http://quote.bloomberg.com/apps/news?pid=10000006&sid=aMsTZYHIK9Lk&refer=homeSNIPThe yen surged to its highest in three months against the dollar after the Group of Seven nations urged Asian countries including China to allow their currencies to strengthen. mdgc (4/24/06; 09:14:39MT - usagold.com msg#: 143527) The yen is flying Up 1.72% percent so far today. The euro and the Canadian dollar are both a bit weaker against the US dollar. Does anyone know why? The Invisible Hand (4/24/06; 08:53:47MT - usagold.com msg#: 143526) Microsoft -alarm http://english.people.com.cn/200604/24/eng20060424_260749.html Monsieur l’Avocat Bellis,Le premier ministre de la Republique Populaire de Chine partage l'avis de votre client.(The Prime Minister of the People's Republic of China supports your client.)People's Daily Online, UPDATED: 17:38, April 24, 2006SNIPProtecting intellectual property rights (IPR) is to respect knowledge, encourage innovation and protect productivity, said Premier Wen Jiabao on Wednesday during his visit to an IPR protection exhibition held in Chinese Military Museum in Beijing. The Invisible Hand (4/24/06; 08:37:32MT - usagold.com msg#: 143525) blackenterprise.com - dollar kaput - petroeuro superstar http://www.blackenterprise.com/yb/ybopen.asp?section=ybem&story_id=92203302&ID=blackenterprise Iran Press: National Economy Must Be Kept "Immune From Foreign Tremors"2006-04-23BBC Monitoring Middle EastText of editorial by Mohsen Mehdian: "Ailing papers", published by the Iranian newspaper E'temad website on 20 April SNIPSMr Powell's guess turned out right, American paper money is becoming isolated. In a speech entitled, "The end of the dollar's hegemony", the influential Republican representative in the American Congress pointed to a bleak future for the American economy. This representative who is committed to the Austrian free market openly stated that America's hostility towards Iran is due only to one thing, and that is the dollar+The rise in the price of oil, stagnation in world stock markets, demand for gold as a real reserve, the switch in foreign currency reserves to the Euro, alongside threats such as, the creation of the Iranian oil stock market, makes the crash of the petrodollar inevitable. The Invisible Hand (4/24/06; 08:23:08MT - usagold.com msg#: 143524) Nothing can stop an idea whose time has come http://www.raisethehammer.org/blog.asp?id=208 Here We Go: Russia Challenges Petrodollar HegemonySNIPAn idea that has drifted around the margins of international discussion is finally out in the open. America has to decide whether it wants to work with the rest of the world to distribute economic power more evenly between the dollar and the euro, or whether it wants to squander the last of its hegemonic power on a desperate, and ultimately futile, gambit to remain in control. 968 (4/24/06; 07:23:21MT - usagold.com msg#: 143523) The Case for a New Plaza Agreement http://www.iie.com/publications/pb/pb05-4.pdf SNIPS :"Today there is a need for an initiative comparable to the Plaza Agreement, probably by the G-20 group of major industrial and emerging-market economies, which on occasion has dealt with international financial issues in recent years. Those countries that have been intervening in exchange markets to keep their currencies from appreciating against the dollar would pledge to quit doing so. Although Japan was accumulating dollar reserves massively in most of 2002 through early 2004, it has not done so since March 2004, and the European Central Bank has largely refrained from intervening to limit the rise of the euro (a central reason why the euro rose sharply against the dollar in 2002–04, whereas the yen rose much less). However, the Bank of Japan and the European Central Bank could undertake sales of dollar reserves as part of the overall package, and the United States could similarly undertake purchases of euros, yen, and perhaps other currencies.In principle, each country would persist in this approachuntil its exchange rate against the dollar had risen by a broad agreed range. The International Monetary Fund could beasked to provide technical support in confirming appropriateranges for realignment of exchange rates for consistencywith US adjustments and individual country circumstances.On the basis of table , it would be appropriate to specifyperhaps three tiers of countries. The first tier would include those with currencies that appropriately would rise some 40 percent or more against the dollar; a second tier, currencies that should rise by 5 to 40 percent against the dollar; and in a third tier, there would be no specific initiative unless the currency began to fall against the dollar. A reasonable time horizon for phasing in this adjustment would be three years.On the basis of table , 3 countries would be in the top tier, including the key cases of China and Japan. Six currencies would be in the second tier, including the important cases of the euro, the Korean won, the Mexican peso, and the pound sterling. Again, however, even for most of the countries in thetop tier, the overall trade-weighted real exchange rate movements would be far more moderate, at less than 0 percent for China and 5 percent for Japan. The euro area, in the intermediate tier, would also have a cumulative real trade-weighted appreciation of only about 7 percent from the 2002 base. The United States would carry out its part of the adjustment process by setting forth credible plans for eliminating the fiscal deficit over the next five years. The economic reason for such a commitment is that an initial round of dollar depreciation without fiscal adjustment would tend to be frustrated because the resulting boost to US output with no curb in domestic demand would generate inflationary pressure, inducemonetary tightening by the Federal Reserve, boost interest rates, and as a result tend to bid the dollar back up. In terms of political economy, a US commitment to eliminate its fiscal deficit would counter countries’ otherwise understandable reaction against being asked to take action to solve a problem rooted in flawed US economic policies.between Europe and the United States, and political shocksin Europe (rejection of the EU constitution, political uncertainty in Germany, and ethnic rioting in France). Under these circumstances, there is a case for active exchange market intervention to guide the euro back toward a level consistent with accomplishing the part of the international adjustment task that would appropriately be borne by the euro-area economy.Such action would be in Europe's long-term interest becauseotherwise, in the absence of a coordinated Plaza II, the eventual pressures associated with an ever-widening US current account deficit could trigger a sharp upsurge in the euro, not only against the dollar but also against many other currencies held down by wrong-direction intervention. The euro-area economy could then wind up bearing a disproportionate share of the burden of foreign adjustment.""The United States is running an increasing risk by allowingits external current account deficit to head ever higher, past levels already historically unprecedented for the United States and most other industrial countries. A credible program to eliminate the fiscal deficit by 2010 combined with a Plaza II Agreement to achieve appreciation of a wide array of foreign currencies against the dollar would provide a sound basis for arresting this trend and bringing the external deficit back to a range of about 3 percent of GDP, which would be consistent with keeping the eventual ratio of net foreign liabilities to GDP at a prudent ceiling of about 50 percent.Even without a formal Plaza II, US policymakers shouldbegin to press foreign central banks much more widely to desist from accumulating additional reserves. US authorities should greatly expand their focus to include most of the East Asian exchange rates rather than concentrating solely on the Chinese renminbi, as they have done so far. In principle, central banks should stop accumulating reserves until their currencies are on a path toward the type of corrections against the dollar indicated above. A Plaza II would greatly help in this process for three reasons. First, it would resolve the "prisoner's dilemma" for major developing and newly industrialized economies, in which each country acting in isolation fears loss of competitiveness. Second, it would provide a framework for coordinated intervention in exchange markets by major industrial economies (dollar sales by the European Central Bank and Bank of Japan and purchases of euros, yen, and possibly other currencies by the Federal Reserve). Third, by including a program for US fiscal adjustment, it would assure countries allowing their currencies to rise that the United States, too, was carrying out the needed policy corrections. . . . the central question is whetherpolicymakers should sit idly by if the market is providing the US economy with more than enough rope to hang itself."------------------------------------------------------------------------------------------------------------------------Randy, any thoughts on this one ???It is VERY interesting to note that in this entire study, the word gold(reserves) is NOT used at all... The Invisible Hand (4/24/06; 06:33:26MT - usagold.com msg#: 143522) The Prophet and Morality http://english.people.com.cn/200604/24/eng20060424_260730.htmlFrom Today's People DailySNIPAt the beginning of the 7th century, founder of Islam Mohammed once said: learning, though as far as in China, should be pursued+China is an oriental ancient civilization while Saudi Arabia is the originating place of Islam. Both the Islamic culture and traditional Chinese culture belong to oriental civilization and consequently bear many similarities in social values and morals. Both China and Saudi Arabia stress the respect for cultural diversity, equal-footed dialogue and exchanges between different civilizations, and oppose cultural conflict and confrontation. This serves a common language between the two countries for further strengthening humanity exchanges and expanding cultural cooperation.http://countrystudies.us/philippines/38.htmMuslim FilipinosSNIPMuslims, about 5 percent of the total population, were the most significant minority in the Philippines. Although undifferentiated racially from other Filipinos, in the 1990s they remained outside the mainstream of national life, set apart by their religion and way of life. The Invisible Hand (4/24/06; 06:21:14MT - usagold.com msg#: 143521) The final (?) dot http://english.people.com.cn/200604/18/eng20060418_259073.html April 18, 2006Chinese NPC chairman meets Philippine senate presidentSNIPChinese top legislator Wu Bangguo met with the President of the Senate of the Philippines Franklin Drilon on Monday. The Invisible Hand (4/24/06; 06:10:56MT - usagold.com msg#: 143520) The third dot was this http://www.timesonline.co.uk/article/0,,3-2149424,00.html China pledges help to stabilise the Middle EastSNIPS PRESIDENT Hu Jintao signalled yesterday that Beijing would play a greater role in the affairs of the Middle East when he paid a historic visit to Saudi Arabia, the main supplier of oil for China's growing economy.==Did Hu open the way for Arroyo? The Invisible Hand (4/24/06; 05:07:55MT - usagold.com msg#: 143519) Connect the dots??? Chinese Saudi collaboration??? http://news.inq7.net/breaking/index.php?index=1&story_id=73588SNIPPRESIDENT Gloria Macapagal-Arroyo will be on a state visit to the Kingdom of Saudi Arabia from May 7 to 10 to discuss the oil price increase issue and boost ties between the Kingdom and the Philippines.http://en.wikipedia.org/wiki/Chinese_FilipinoSNIPThe Chinese in the Philippines have always been one of the largest minority groups, making up about 2% (1.5 million) of the country's total population. The Invisible Hand (4/24/06; 04:52:26MT - usagold.com msg#: 143518) Not inflation, hyperinflation, stupid! http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2006/04/24/p7803 Hyperinflation like Weimar 1923: World System on Weimar Collapse CurveSNIPThe world is thus, now, in the terminal phase of a hyperinflationary collapse of not only the dollar-system, but the world-system as a whole. To bring this into focus, consider the elementary features of the way in which Federal Reserve Chairman Greenspan's lunacy orchestrated the 1987-2006 phase of the relevant hyperinflationary cycle. Keep three illustrative curves in view: 1.) my "Triple Curve," which, since January 1996, has described the general characteristics of the congoing collapse-function of the 1995-1996 interval; 2.) The curve of 1923 Weimar, Germany hyper-inflation; and, 3.) The current hyperinflationary rate of rate of increase of primary commodity prices, as led by petroleum and metals. The Invisible Hand (4/24/06; 03:12:29MT - usagold.com msg#: 143517) It's inflation, stupid! http://www.iht.com/articles/2006/04/23/bloomberg/bxcom.php SNIPGold is saying there's more inflation coming than what the Street or the official statistics are showing. The Invisible Hand (4/24/06; 02:16:51MT - usagold.com msg#: 143516) China and Africa http://news.bbc.co.uk/2/hi/africa/4931668.stm But now the old ties of communism are being replaced by capitalism. +There are concerns about Beijing's willingness to do business with countries whose governments have been the subject of sustained international criticism like Sudan and Zimbabwe. China insists it is merely trading with these nations and adhering to its policy of non-interference in other countries' internal affairs. ==The full (?) list of this week's triggers of $30,000 gold is available herehttp://news.bbc.co.uk/2/hi/in_depth/4931030.stm Goldilox (4/24/06; 00:46:16MT - usagold.com msg#: 143515) So, You think you've about "wrapped things up"? http://www.prudentbear.com/creditbubblebulletin.asp snip:As the issuer of the world's reserve currency, the U.S. economy has for decades enjoyed the capacity to inflate dollar denominated securities (Credit) at will. Our competitive advantage in issuing top-rated and liquid securities has served us especially well over the past decade. It was a key facet of "reliquefications" and "reflations" during periods of economic weakness and/or fledgling financial crisis. The much trumpeted "resiliency" of the U.S. economy and banking system owes almost everything to the capacity for the U.S. government and financial sector to endlessly create debt instruments readily accumulated by domestic and foreign holders. Additionally, I believe a strong case can be made today that long-term yields would be significantly higher if it weren't for the perception that the Bernanke Fed will aggressively cut rates at the first indication that the U.S. economic Bubble and/or Global Asset Market Bubble are beginning to falter. The blundering Fed apparently not only believes that the U.S. economy is more resilient than in the past, it presumes it now has significant leeway to cut rates and "reflate" when necessary. But the financial world is changing rapidly and radically. The dollar is methodically losing its status as a stable and reliable reserve currency. At the same time, currencies generally are losing favor to real assets as stores of value. Understandably, market participants are questioning the will and capacity for central bankers and policymakers to stabilize the Unwieldy Global Credit system. It would at this point require a determined and concerted effort to instigate some serious financial and economic restraint, especially among American, Chinese and Japanese authorities. No one would dare hold their breath waiting for such an outcome. With faith in the prospects for the dollar and global currencies in retreat, the U.S. is in the process of losing its invaluable competitive advantage issuing top-rated liquid securities. This has huge ramifications come the next period of financial dislocation. The Fed's intent to aggressively cut rates and incite yet another bout of lending and leveraged speculation (Credit Inflation) will likely be obstructed by the unwillingness of foreigners to accumulate more dollar IOUs. In the meantime, I believe the changing global landscape will necessitate that that the U.S. now pays an ongoing significant yield differential. Rampant liquidity and speculative excesses demand that global rates rise across the board, while the stability of the dollar depends upon the Fed's willingness to maintain significant rate differentials. Our foreign creditors will demand higher rates and much tighter monetary conditions, and the Fed's dream of wrapping things up before it gets painful faces the reality that our creditors are increasingly tired of getting hurt. This week, markets began to demonstrate many of the characteristics one would expect when approaching a key inflection point. There was heightened volatility, spectacular short-squeezes, and palpable euphoria, along with some underlying angst that the more speculative stocks are gaining the most ground. There are also indications that the "smart money" is increasingly nervous and beginning to lighten up on some positions (including our currency). Yet it is amazing how many have completely bought into The Notion of a Golden Age of Permanent Global Prosperity; that the omnipotent Fed has everything completely under control; and that surging energy and commodity prices are but a sign of how wonderfully healthy the global economy is these day (ignoring that we are instead immersed in history's greatest Credit and Asset Bubbles). One should now be on guard for that exacting oscillation between "gee, things are just marvelously splendid" and the "oh my god, the end is near" – The Unpredictable Greed and Fear Seesaw – that will embroil global markets in a period of uncertainty and volatility. The Invisible Hand (4/24/06; 00:31:01MT - usagold.com msg#: 143514) How can such an arrogance be justified? http://www.theglobeandmail.com/servlet/story/LAC.20060420.RIMFSIDE20/TPStory/TPBusiness/ SNIPSThe U.S. government issued a barbed riposte yesterday after the IMF suggested Washington … balance its budget faster than planned.Tim Adams, the Treasury undersecretary for international affairs … said an IMF call for the United States to balance its budget by 2010, rather than just aiming to halve it by 2009, would put the global economy in "peril." Goldilox (4/24/06; 00:26:00MT - usagold.com msg#: 143513) Let the battle begin The early run on PMs in Hong Kong sure didn't last long as they have already regained 2/3 of the opening losses.It should be VERY interesting in the pits this week, as oil and other "commodities" continue their "Moon shot". The Invisible Hand (4/24/06; 00:23:25MT - usagold.com msg#: 143512) A Financial Hit on Iran? http://www.time.com/time/magazine/article/0,9171,1186554,00.html SNIPAmong the plan's first targets: Iran's accounts and financial institutions in Europe. Secretary of State Condoleezza Rice met last week with the finance ministers of Britain and Germany, where, according to a U.S. Treasury study, Iranian-government banks operate branches to handle funds generated by the oil trade. The U.S. wants non-Iranian banks to stop facilitating Tehran's money flow. A senior official involved in devising the strategy told TIME, "It's about convincing financial institutions not to deal with bad guys, because they're worried about their own reputations."==Will they also remand gold buyers by crashing the POG? Goldilox (4/24/06; 00:21:41MT - usagold.com msg#: 143511) UAE shoppers world's top gold buyers snip:An average shopper in the UAE bought 30 gm of gold annually compared to the global average of less than one gm, according to a survey.South Asians constitute 70 per cent of gold buyers, followed by East Asians with 22 per cent, according to the research conducted by Dubai's ARY, a leading gold and jewellery firm.Arab and European consumers make up four per cent each, the study said .The survey, which covered 3,200 people across the country. About 350 outlets in the Gold Souq, the city's gold trade hub, display about 20 tonnes of jewellery at any given time, according to the study.Rising prices have not had a major impact on retail gold sales in Dubai because people are now looking at the precious metal as an asset.The survey found that 72 per cent of those purchasing gold were women. It also showed that 63 per cent of the buyers were married couples.Special occasions were cited by 46 per cent as the main reason for their gold purchases, while 23 per cent bought jewellery when going on vacation. Promotions during the annual Dubai Shopping Festival attracted 13 per cent of those polled in the survey.High incomes do not necessarily make people consumers of gold as only 13 per cent of those earning Dh25,000 ($6,808) or more per month were found to be jewellery buyers.-GoldiloxMiddle Easterners saw what happened to the Iraqi Dinar as fall-out from invasion, and don't want to be caught in an escalation event with worthless paper "savings".The illusion of "security" will keep the US public from noticing until the last dog is hung, and most will come to the party too late, as they will need their bushel baskets of cash to fund their day-to-day expenses, a la Weimar Republic. The Invisible Hand (4/24/06; 00:11:12MT - usagold.com msg#: 143510) Chinese aren't the kind of people who tallk nonsense http://www.timesonline.co.uk/article/0,,3-2149424,00.html China pledges help to stabilise the Middle EastSNIPS PRESIDENT Hu Jintao signalled yesterday that Beijing would play a greater role in the affairs of the Middle East when he paid a historic visit to Saudi Arabia, the main supplier of oil for China's growing economy.+The Chinese leader told his hosts that the West should not "hurl false accusations against the internal affairs of other countries, let alone blame a specific civilisation, people or religion for causing problems and conflicts in the world". He received a standing ovation. ViewYesterday's Discussion.
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