ARCHIVED DISCUSSION FROM 2/25/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Waverider
(02/25/02; 22:51:26MT - usagold.com msg#: 70740)
Argentina's coffers are running dry
http://www.iht.com/articles/49307.html
Snippit:
"The government has announced that it will be unable to fully pay the monthly salaries of more than half a million government employees that are due this week, citing a sharp drop in tax revenue as a result of the worsening economic crisis.
Duhalde's decision has infuriated government employees and civic groups leading street protests against austerity measures, not only because of its economic impact but also its timing. The announcement came just days after he increased his own salary and those of other top officials by 13 percent, to the maximum permitted by law, $1,500 a month."
Waverider: It sounds as though Argentina is very close to the breaking point. How long will it be before we see total anarchy there? One week...two...maybe days...
White Rose
(02/25/02; 20:45:22MT - usagold.com msg#: 70739)
Bill Murphy says German Bank has been buying, not selling
This is from Le Metropole Cafe web site:
After Bundesbank Gold Story, DEUTSCHE BANK TURNS BIG BUYER!
A fierce battle was waged the last 24 hours between gold bulls and bears right above $290 spot,
which has been a key technical level for many years. As reported recently and often, The Gold
Cartel has thrust gold back every time that level has been breached to the upside for 3 1/2 years
now.
Of special interest this time is that the specs are mostly long below $290. If the cabal wins again
(taking gold below $290 on a close basis), many of these black box tech specs will turn sellers and
prolong the inevitable gold market bull move.
Gunning for the specs, the Gold Cartel forces were loaded for bear today and were close to
winning the day when Deutsche Bank showed up as a big buyer right above $290. Word to me was
they could not buy enough at their price levels in the futures pits so they called upstairs and began
buying in the physical market.
This may be MOST significant. Deutsche Bank is named in Reg Howe's Complaint and I used to
hear about them all the time on the sell side along with Goldman Sachs and Chase. See this
reading from Reg Howe's lawsuit:
"On May 7, 1999, just as gold threatened to surge over $300/ounce in response to new doubts
whether the proposed IMF gold sales would go forward, the British announced that the Bank of
England, on behalf of the Exchange Equalisation Account in the British Treasury, would sell 415
tonnes of gold in a series of public auctions. Although this announcement came with no warning
and was completely unexpected by most, the previous evening Bill Murphy of GATA reported in
his Midas column at Le Metropole Cafe: "Deutsche Bank's bullion desk is calling their clients
saying that the gold market is stopping at $290."
On May 10, 2000 GATA presented its "Gold Derivative Banking Crisis" document to the Speaker
of the House, Dennis Hastert. Several of the GATA army made sure copies were sent to the
Bundesbank, etc. Twenty thousand copies were downloaded from the www.GATA.org web site.
Then, on August 25 Germany's premier financial business newspaper, Frankfurter Algemeigne
Zeitung, surprisingly published two articles in its paper about the GATA document. They were
very blunt, got to the heart of GATA's concerns and complimented the authors. Both articles were
most unusual in that there were no contrasting rebuttals.
See Matisse Table: 8/31/00
8/31 - Frankfurter Allgemeine Zeitung Articles
It was clear to some very savvy people that some higher ups in the Bundesbank planted the
articles to warn Deutsche Bank about their short gold positions. We had heard for some time
about a rift at the Bundesbank about gold between the young turks (anti-gold) and the old guard
(pro-gold).
Following the articles in FAZ, I cannot recall hearing anything about Deutsche Bank on the
Comex, until TODAY. Not that they have not been there, just that their name was never brought
to my attention again, unlike Goldman Sachs, which has been a cabal gold seller at all critical
times. In addition, Deutsche Bank has reduced their gold derivative positions since the FAZ stories
were published.
Then out of the blue last week, the gold world is presented with the strange, Bloomberg
Bundesbank gold story – reminiscent of the Russian gold selling rumor circulated by J. P. Morgan
Chase in May 2001. Both stories were planted to generate gold selling by frightening gold longs
that the central banks were going to sell their gold. Both planted stories worked.
The Bundesbank story, however, has only worked to a very modest degree as gold has only
dropped $6-$7 so far. Why? I suspect it is because the gold fraud is about to end. Perhaps, the
Germans want out while the getting out is good and figured the best way to cover massive gold
short positions was to generate a bogus central bank selling story and then start buying.
The German bankers cannot be THAT dumb. They must want to cover as many gold shorts as
possible before disaster rules the gold day, a day that is now inevitable. If the Germans have lent
out as much gold as we think they have, they need to get it back or declare the scam to their
citizens. To buy any kind of size at decent prices the Germans need to buy into a falling market. If
this anecdotal hypothesis is right, we will see them on the buy side some more. My guess is they
have a huge amount of buying to do.
If that is the case, the only question may be whether they will be buying at $285- $292, or perhaps
$302 to $307.
It would appear we are witnessing the first visible signs of a disintegrating Gold Cartel. One of
their rats could be leaving their sinking ship. We shall see, but today's development may be a gold
milestone. It bears close scrutiny.
My short-term technical analysis for gold remains intact. A close below $290 will bring on massive
spec selling. A close above $296 should mean curtains for The Gold Cartel. Two closes above $305
and gold should trade $350 to $400 within weeks. The tension builds.
slingshot
(02/25/02; 20:36:43MT - usagold.com msg#: 70738)
Sussex Found
Got Gold Onboard?
Alright! They found another shipwreck with lots of gold onboard. First priority is to retrieve the cannon. Right!
Drop in the gold price.
Slingshot
Guided
(02/25/02; 20:35:20MT - usagold.com msg#: 70737)
Gold and Silver in HisStory
The question was asked; Why do men and governments seek after gold? Because man is man and that's HisStory. In Daniel chapter 11, the prohpecy of a global ruler is told that will have control of the world's gold and silver just prior to the end of HisStory. So indeed, there will be more conspiracies and wars over gold and silver leading up to this time only God knows. At this point now in HisStory, I think we are on the threshold of one of those interesting times where man's plan for gold and silver don't work out as envisioned and the pieces will fall where He wills.
slingshot
(2/25/02; 19:03:59MT - usagold.com msg#: 70736)
Kludge Msg# 70733
Gold. Why is every government after it?
I for one have not put all the pieces to the puzzle together as to why gold is behaving like it is. Conspiracy here and conspiracy there, and never the two will meet. Anyhow after reading your post I just had to wonder after any major find of gold the government wants its cut. I assume the percentage is more than usual as it would pertain to anything else. Examples. When they found the Atocha. The government laid claim with a few others. There is a family who found a large amount of gold near White Sands and the government found it also and carted it away . Leaving the family to sue. The Russians government has put claim on gold
which was aboard a Russian warship sank in WW2 in international waters. What happened to salvage rights. In Bermuda if you find a wreck it is covered by a multitude of laws and you end up with hardly nothing.
So how much is gold worth? AS to how much it will rise. Why go to all the trouble of all these laws if it is not worth anything. Now or in the future. Actually they seem to just want it neither caring what it is worth or how much it will rise. If you drop one hundred gold eagles on a table in front of your friends, would they first ask what it is worth
or how much will it be worth? Maybe,"Where did you get all that?". This post may not go along with your post. Just got me thinking on a tangent.
Guess I will eat a doughnut and think up some more weird stuff.
Slingshot
Black Blade
(2/25/02; 19:00:38MT - usagold.com msg#: 70735)
Monday's Stock Market Round-Up - Puplava
http://www.financialsense.com/Market/wrapup.htm
Snippit:
World of Make Believe We live in a world of make believe. Today many of the things you hear and read aren't what they appear to be, but what people want them to be. The world of make believe runs all the way from Washington to Wall Street. Many of the economic and earnings reports bare no resemblance to the real world -- whether it is the CPI, productivity figures, the unemployment rate, or the GDP figures. They are statistically manipulated to produce a certain outcome. The same holds true on Wall Street where we now have numbers that no longer reflect the bottom line. There are many numbers bandied about in press releases, on financial news stations, and spoken as gospel by analysts and anchors. However, we no longer have a reference point on which to value those numbers because the standards and benchmarks for measuring them keep changing. Instead, what we hear reported is that a certain company met, beat or exceeded expectations.
Black Blade: Good article tells it like it is. Speaking of fanstasy accounting and outright fraud, tomorrow Congress gets another chance at the "Skilling Grilling" as the woes of Enron unfold. The shredder teams and accountants of Enron and Arthur Andersen will have much to explain as the charges look to be fraud on a massive scale and many accountants may be headed for prison. Rumors are that Qwest Communications and Williams Communications could be the next to fall with possible accounting scandals as well. "Interesting Times"
Mr Gresham
(2/25/02; 18:19:19MT - usagold.com msg#: 70734)
Kludge
"I mean no offense, guess it wouldn't be a conspiracy otherwise."
Keep it up. It wouldn't be a discussion otherwise.
There is a conventional view, and a contrarian few, or three, or four. Like Sherlock, we put a picture together, and then we have to wait for events to bear it out. No one is coming forward in the next chapter to tell us "Bingo, boys! You sussed us out on that one. Go to the head of the class."
We have to factor the conventional, the contrarian, and the conspiracy views into our own risk/reward calculations. Obviously, you arrive at the same investment decisions, for differing reasons, so it isn't vital for us to agree, persuade, or be persuaded of a different viewpoint.
For many of us, it is part of an interesting story, beyond our investments. When you probe it with us, you join in the adventure of learning about that story.
FOA's "oil for gold" and "support of the dollar" from 1980 onward theories require substantiation (IMO) for us to voice them confidently to others away from this forum. We haven't identified the characters, dates, and deeds that fill in those pictures.
They are contrary to most conventional economic logic, so it's easy to poke at them from that standpoint. That's where we all came from, too, BEFORE we read those new ideas.
Yes -- sometimes a cigar is just a cigar. But what if, one time, it isn't? Now wouldn't that be a story!
kludge
(2/25/02; 17:29:33MT - usagold.com msg#: 70733)
Sir Belgian
This is my problem with believing conspiracy theories, they're short on facts and long on extrapolation. They cite much of the speculation that is the basis of the theory, in support of the theory. They speak to a higher truth:
"POG went a ballistic x 25 and was stopped by all means!"
"Billions of non US people are sweating under medieval conditions to make this Big Lie survive !"
"Physical Gold in Possession will and shall expose this decades old irrational play"
"Massive falsifications can live a long life until suddenly the BIG LIE is exposed"
I mean no offense, guess it wouldn't be a conspiracy otherwise.
So I offer just some of what is known about gold and oil between 1971-2002, and perhaps a simpler explanation?
Oil:
Texas Railroad Commission sets proration at 100%
Yom Kippur war/arab oil embargo
North Sea and Alaska come online
Oil worker strike in Iran
Shah of Iran ousted
Khomeni/hostage crisis
Iran invades Iraq
Pres. Carter does away with oil price controls
Gulf War
Kuwait's oil fields burn
Iraq sanctions
Gold:
No interest or dividends
Seen as a "safe haven" by most investors
PM funds often not available in 401k's
Dow went from 868 -> 9,968, not good for safe havens?
Anybody you know add insulation to their house, buy a more energy efficient fridge/AC/dryer, or buy a compact car based on the rising price of oil in the '70's early '80's? OPEC learned a lesson then: reduce the flow, drive up prices, demand decreases. Did anyone remove that extra insulation when the POO fell? If they didn't (and who would?), then OPEC lost some future sales. They're not foolish, why drive customers to other sources of energy - which they did before changing course:
(hope this posts properly)
Energy Consumption by year in the US (%), top three:
------------------------------------------
1977 1978 1979 1980 1981
=================================
Oil 48.6 48.5 47.4 45 43
Nat. Gas 25.6 25.4 25.4 26.8 27
Coal 18.6 18.1 19.5 20.5 22
Quadrillion
BTU's imported 20.1 19.3 19.6 16 14
(net)
Would oil producing countries rather we drive trucks and SUV's, or 1.2 liter compacts? What's the #1 reason Americans would switch to smaller, more fuel efficient cars in droves? The POO rising. What would make Congress force the auto-makers to build more fuel efficient cars quickly? The POO rising. What would encourage oil exploration in the oil customer's country? The POO rising.
OPEC is a cartel, comparing the cost of something controlled by a cartel may not yield valid comparisons. Does DeBeers charge a fair price for diamonds, or a price the market will bear?
And so that no one accuses me of having shorted gold - if I'm right, you lose nothing and your wealth is safe. If I'm wrong, guess we're all rich.
Pizz
(2/25/02; 16:54:15MT - usagold.com msg#: 70732)
Trapper
I'm in Seattle area about 170 miles south of Vancouver BC.
I'll keep you posted, since I have same concerns as you.
I'm also going to do some more reseach on bullion coins. Since Maples are Canadian legal tender, I'd say the US would have a pretty hard time confiscating Maples. It would also make sence that they would have a hard time keeping you from taking $50.00 Canadian in the form a a 1 oz maple into Canada. The Canadians sure don't care, and the last time I crossed the Border into Canada, the US didn't even care, because it was Canadian Customs checking what was coming in, and US Customs on the return checking incoming to US.
TownCrier
(2/25/02; 16:47:28MT - usagold.com msg#: 70731)
The price of complacency...
http://cchart.yimg.com/2y?XAUARS=X
... the new price of gold in Argentine pesos. Flat forever, then doubled in a flash. (link above shows 2-year price chart of the peso-price of gold)
With capital controls and official coversion of dollar-based accounts to peso accounts, a purchase of gold would have been the easiest way to preserve family wealth and purchasing power. Some did, others cried.
R.
R Powell
(2/25/02; 16:27:10MT - usagold.com msg#: 70730)
Strange?
http://www.thefifthhorseman.net
Isn't this a figure we often think about?
Check out where the link goes. I found this next door at gold-eagle.
Rich
TownCrier
(2/25/02; 16:11:04MT - usagold.com msg#: 70729)
MK, I don't know where you find this stuff, buy you're clearly a master of the art!
http://member.usagold.com/commentaryreview.html
From your News & Views page:
-------
"Derivatives are about shifting risk to the dumbest guy in the room." --Financial writer Martin Mayer
-------
On behalf of the industry (gold and financial markets), thanks for your unflagging efforts and for your emphasis on quality rather than hype.
R.
Trapper
(2/25/02; 15:53:59MT - usagold.com msg#: 70728)
Sir Pizz
Thanks for the info but keep me informed if anything developes. What area of Canada were looking? I am now close to Soo Canada just across the Bridge from Sault st. Marie Michigan. Next try would be Across the Detroit area. I also have a cop friend in Toronto who I am asking for help right now.
Anyone from Canada have any idea what it takes to get vested in the Canadian retirement system? I have an older friend who is drawing now after paying taxes in Canada from a bank account but says the system is now changed. Live small.
RJ
admin
(02/25/02; 14:52:12MT - usagold.com msg#: 70727)
Test
Test
sector
(02/25/02; 12:30:12MT - usagold.com msg#: 70726)
CISCO...Dirty, Smelly Laundry
http://www.nypost.com/business/42208.htm
HOW CISCO BENT RULES
By CHRISTOPHER BYRON
------------------------------------------------------------------------
February 25, 2002 -- THE accounting and disclosure questions swirling around Cisco Systems Inc. just won't go away.
A little over a year ago, The Wall Street Journal published a lengthy, front-page story questioning Cisco's business practices. And just last month, Business Week published a cover story questioning the company's accounting as well.
Lately, we have added new information of our own with the disclosure that at least a dozen top officials and directors of the beleaguered Silicon Valley networking giant may have profited from their participation in various private partnerships that conducted business with Cisco.
Now comes evidence that various of these transactions - and others besides - may have violated the spirit, if not the letter, of Cisco's own conflict-of-interest guidelines.
In one 1999 transaction, a Cisco vice president named Donald Listwin appears to have pocketed as much as $21.5 million by investing in a Silicon Valley startup named Software.com while serving as an outside director on its board in seeming violation of Cisco's stated guidelines....]
+++++++++++++++++++++++++++++
Scamsville USA...AKA: Silicon Valley
Pizz
(02/25/02; 12:20:59MT - usagold.com msg#: 70725)
(No Subject)
Go away for a week and look what happens to gold. Sheesh!
Based upon my brief scan of news and posts, Au held up pretty well considering all the down jawboning. Hedging down, BB scare tactics up. Right now the shorts should be more nervous than they were @305. We shall see.
Trapper: A couple months back Waverider (thanks again) checked a Canadian bank for me regarding a non-citizen bank account and a lock box. It's not a problem, but I made a few calls and found the same problem up there as we have here in States. Lock boxes have a waiting list and my impression was they were not going to be too happly renting out to non-citizens. I'm still looking, but it has to be done in person, and I was told by one bank that I would need an account. They also ask a lot of questions for fear of drug/money laundering.
Pizz
sector
(02/25/02; 12:13:06MT - usagold.com msg#: 70724)
Another Giant Falls...Gas and Fiber Optics...and Who Knows What Else?
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APHpIiBX3V2lsbGlh
Williams Communications Says It May File Bankruptcy (Update1)
By John McCorry and Don Stancavish
Tulsa, Oklahoma, Feb. 25 (Bloomberg) -- Williams Communications Group Inc., a U.S. phone-and-data network operator facing $5.2 billion in debt and a 96 percent drop in market value in the past year, may seek Chapter 11 bankruptcy protection.
The former unit of Williams Cos. is still talking with bank lenders and is considering bankruptcy as a way to wipe out its debt without disrupting customers, the company said in a statement distributed by PR Newswire.
Rivals such as Global Crossing Ltd. and McLeodUSA Inc. have sought bankruptcy protection because they were unable to repay debt incurred building networks. Williams Communications, which said it hasn't violated terms of $975 million in loans, had until today to give its banks a debt-reduction plan.
Williams Communications, based in Tulsa, Oklahoma, said the restructuring options it's considering would include ``substantial shareholder dilution'' and a reduction in costs of about 25 percent, including job cuts.
The company said it had $1 billion in cash as of Dec. 31, enough to finance operations through 2003.
Williams Communications shares fell 1 cent to 51 cents on Friday.
Black Blade
(2/25/02; 10:21:35MT - usagold.com msg#: 70723)
Closer scrutiny of earnings could hurt stocks this year
http://www.msnbc.com/news/715208.asp?0si=-
Merrill Lynch strategist is still bearish on earnings, economy
Snippit:
Feb. 24 - Investors looking for a profit recovery to propel stocks in 2002 may find themselves disappointed, just like those townspeople who strained to see the emperor's new clothes, Merrill Lynch's top strategist says.
Black Blade: Ditto!
Black Blade
(2/25/02; 10:14:59MT - usagold.com msg#: 70722)
Main St. loses trust in Wall St.
http://www.csmonitor.com/2002/0225/p01s01-usec.html
Enron's fall and accounting scandals drive investors away from stock market.
Snippit:
NEW YORK - Engineer Bruce Sullivan used to invest in the stock market. But after losing money and his trust in Wall street, he's pouring his savings into remodeling his house instead. "Even if you're being responsible and trying to get legitimate information the system is screwed up," he says. "How businesses keep track of their money - it's a shell game of information."
Mr. Sullivan is not alone in feeling discouraged about Wall Street. The Enron scandal and other examples of corporate shenanigans have investors questioning whether it's worth buying stocks. After a decade in which the stock market became an unofficial bank vault for millions of Americans, many investors are now finding their confidence shaken by the fuzzy math of a few corporations.
Everyone from the heads of major companies to cab drivers are discovering that some of the companies they are socking their savings into are using accounting devices that belong more in a Hollywood movie about con men.
Black Blade: I hear that! Try looking for net earnings in many corporate 10-Q's and 10-K's anymore - once you wade through Pro Forma earnings and unrealistic corporate outlooks. "A shell game" indeed.
Old Yeller
(2/25/02; 10:13:07MT - usagold.com msg#: 70721)
Interesting perspective on the long term future,
http://www.ddc.net/ygg/inv/weekly.htm
Of government fiat currency and the will of the people to bypass the system imposed on them by suspect arbiters of true wealth;
"Over long time periods -ten to twenty years-imaginary currencies and central bank gold sales'seem like a very risky business.A critical mass of citizens can use gold to bypass the imaginary financial system,and the government is left with no ability to command the productive resources of it's citizens."
The system becomes more imaginary by the day,just starting to sink into the mainstream perceptions.That's one investment idea that intensifies the nervousness in the corridors of power.Imagine,money outside the rules and controls that have benefited the few chosen ones at a great cost to the majority.
Thanks to sharefin for the link.
Cavan Man
(2/25/02; 10:11:54MT - usagold.com msg#: 70720)
Britain in Europe
Blair told: fix 1 May 2003 for euro poll
By Nigel Morris and Paul Waugh
25 February 2002
Internal links
Stephen King: Pieces falling into place for UK to join the euro
Tony Blair would take the dramatic gamble of staging a referendum on the single currency on 1 May 2003, under proposals that are being considered in Whitehall.
Pro-euro advisers are pressing the Prime Minister to arrange for the historic vote on abolishing the pound to coincide with elections to English district councils, the Scottish Parliament and the Welsh Assembly.
The idea for staging the "super Thursday" vote as a way of boosting turnout – thereby increasing the democratic legitimacy of a pro-single currency result – has gained ground since the launch of euro notes and coins last month.
However, it would present a daunting challenge to Mr Blair, who would have to overturn hostility to the single currency among millions of voters in a little over a year.
The Britain in Europe (BiE) pressure group, which is expected to lead the "yes" campaign, has already drawn up a strategy plan based on a poll taking place on 1 May 2003.
The possibility of the spring vote was inadvertently revealed by Peter Hain, the minister for Europe, in an interview with a French newspaper last week. He said the Chancellor, Gordon Brown, could take a judgement on whether Britain had met the five economic tests for euro membership as soon as this autumn, with a poll taking place six months later.
Euro-enthusiasts are now focusing on 1 May as the only realistic date in the first half of next year for the referendum.
They think opposition to the euro is soft – with only one-third of voters strongly against the single currency and the rest open to persuasion – and could melt away after Britons return from summer holidays in euro-zone countries. They also believe the higher turnout on a "super Thursday", with the Government calling on the loyalty of Labour supporters, would lift the chances of a "yes" vote.
The former Tory chancellor, Kenneth Clarke, will put more pressure today on the Government to act swiftly on the euro in his first major speech since failing in his party leadership bid in September.
Charles Kennedy, the Liberal Democrat leader, will tell a BiE meeting today: "There is little point the Government dithering on this issue any longer. They need to call a referendum as soon as possible to help jobs, investment and trade."
The BiE "war book", planning for a 1 May referendum, sets out a detailed daily strategy for leading a "yes" campaign beginning in mid-March next year. A draft version of Operation Final Push: isolation or prosperity, seen by The Independent, envisages kicking off with an analysis of how prices for many consumer products are lower in countries with the euro than in Britain.
The feeling that Mr Blair could go to the country early was underlined in an interview this weekend with Charles Clarke, the party chairman, who said that 2002 was "decision year" on the issue. One minister confirmed that calls for a vote on 1 May 2003, were increasing. He said Mr Blair would increase his pro-euro rhetoric during the summer but would only call the referendum if he was convinced he could deliver a victory.
Meanwhile, Lehman Brothers, a US-owned City bank, said there was now a strong chance that a referendum to join the euro would succeed. A "poll of polls" had showed that public opposition to the euro had weakened in the last two years, it said.
CM comment: If this should take place, in a lead up to the vote, expect significant appreciation of the Euro and of the EU "system".
USAGOLD Market Commentary
(2/25/02; 10:09:54MT - usagold.com msg#: 70719)
News & Views
NEWS & VIEWS Update!
Available online to all clientele and prospective clientele, NEWS & VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals has again been updated.
Read the full commentary and related information here. (access codes required)
New visitors may review these selected portions provided at the Daily Market Report page. You may enjoy our 24-Hour NewsWire provided at this page, also.
If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.
I should mention that News & Views is most appreciated in its full format -- with charts, photos and links. Thanks and enjoy. . . ..MK
Black Blade
(2/25/02; 10:00:49MT - usagold.com msg#: 70718)
Deflationary Tremors - Stephen Roach
http://www.morganstanley.com/GEFdata/digests/20020222-fri.html#anchor0
Snippit:
Deflationary forces are intensifying in the global economy. That's especially the case in Asia, a region that accounts for about 30% of world GDP. And it could also be the case for the rest of the world. Yet financial markets are leaning the other way. With hopes of economic recovery in the air, the fear of inflation is starting to creep back into asset prices. Have the markets got it right or wrong?
Black Blade: Interesting article. No wonder Asians are buying Gold. This could very well spread if Roach's scenario is true.
USAGOLD Market Commentary
(02/25/02; 09:27:53MT - usagold.com msg#: 70717)
There Will Always Be a Monday. . . .But the Latest News & Views Will Get Your Week Kick-Started
NEWS & VIEWS Update!
Available online to all clientele and prospective clientele, NEWS & VIEWS Forecasts, Commentary & Analysis on the Economy and Precious Metals has again been updated.
Read the full commentary and related information here. (access codes required)
New visitors may review these selected portions provided at the Daily Market Report page. You may enjoy our 24-Hour NewsWire provided at this page, also.
If you would like to take full advantage of these insights and perspectives, made available from a leader with three decades of experience in the precious metals markets, then we invite you to request your personal access codes for the online News & Views. With your request, you will also receive a hard-copy introductory information packet on gold ownership which details the products and services offered by USAGOLD / Centennial Precious Metals. We welcome your inquiry and look forward to working with you.
" For those who want to buy [gold], the temptations are greater and the justification is stronger. Those who have listened to the naysayers [on gold] have probably missed the recent rally [up 19% from April 2001 lows]. So what should they all do now? Buy on the dips, betting that gold can bounce back over $300 and go a little further." Jonathan Fuerbringer, The New York Times (2/24/02)
"We expect that this [gold] rally may prove to be less of a temporary blip and more of a trend.'' Howard Patten, BarclaysCapital
Gold Market Brief (2/21/02). . . . . . Gold opened the week drifting to the downside. There was little in the way of news this morning and things are fairly quiet for the moment, as the market tries to shake-off the weekend and get back into the swing of things. "We need to break out of the range to establish the move. We might see first a consolidation, then gold could go either way...$288 should hold, as we tried it three times last week, while the upside target is $305-$306,'' one trader told Reuters. An announcement by Newmont that it would allow its hedges to retire "naturally" (instead of employing a more aggressive buy-back strategy as originally planned) was greeted with a yawn. Likewise, the strong speculative long position on the Comex reducing from 3.6 million ounces to 3.4 million was not enough to create any anxiety in either the bulls or the bears. (Ho-hum. . . .) The accompanying chart published by the World Gold Council this morning shows clearly the relationship between large speculative paper positions and the price of gold. Earlier in February, speculators have gone long gold driving it over the $300 level. When the Bundesbank made an announcement last week that it might sell some gold (in three to four years), the market retraced to the lower $290s. Some felt the market would drop precipitously. It didn't. Large speculators, as the numbers indicate, for the most part held their ground once again illustrating that there might be something to the recent gold market rally worth noting. The current gold market has more fundamental concerns:
(1) the precarious nature of overall stock market valuesas revealed by the Enron debacle;
(2) the slow motion destruction of the Japanese banking system;
(3) the potential for further economic disasters in the third world as Argentina implodes; and,
(4) the on-going dismemberment of gold hedging operations worlwide -- operations which previously assisted in capping the price.
(All of which are covered in some detail below)
All of this has caused a rising level of concern among investors worldwide which in turn has correlated to rising gold demand. Stay tuned. Monday's are usually days we just muddle through in the gold market.
I've updated Short & Sweet.
* * *
Short & Sweet. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . The Enron collapse continues to bedevil the financial markets. The New York Times -- an unlikely source of doom and gloom -- yesterday spelled it out for investors: "When companies rack up huge hidden debts and traders illicitly amass mountains of risk are exposed, Wall Street's big players rush to cut their losses and collect on their debts. If that kind of rush were ever to result in a shortage of cash, it would paralyze the financial system. Stock markets would tumble and banks would close, putting the savings of households at risk." And later in the same article titled "Contracts So Complex They Imperil the System," the Times makes a point we have tried to drive home in these pages for months: "Billions in derivative contracts [Ed. Note: The Bank for International Settlements reports derivative contracts now exceed $100 trillion!] can hang on the share price of a single stock, and a firm's portfolio of derivatives can link the fortunes of the world's major financial institutions. For those reasons, market watchers sometimes worry about the risk that a crisis in one company or sector could bring the entire financial systems to its knees.". . . . . . . . Comment: I could not have crafted a better argument for gold ownership -- the stand-alone asset which is not simultaneously another's liability. . . . . . . . . . . . . .In another article yesterday -- this one titled "Three Decade-Old Echoes Awakened by Enron" -- the Times tells what this situation might translate to for stock investors. Stock investors are inveighed almost daily by one analyst or another that the stock market is likely to bounce back quickly. History defies that hope. "The last time a big, well known company collapsed as fast as Enron was in 1973, " says columnist Alex Berenson, "when the Equity Funding Corporation. . .fell apart. . .[Its] demise coincided with one of the worst stretches ever for stocks. When the company filed for bankruptcy on April 5, 1973, the Standard & Poor's 500-stock index was at 108.52. Nine years later, it was 114.73. Of course, Equity Funding was far from the only reason that stocks stagnated. . .but [its] collapse discouraged investors from buying stocks for years." . . . . . . . . . . . . .Comment: Unlike the pervasive problems in stock valuations across the boards unearthed by the Enron debacle, the Equity Funding Corporation scandal of the 1970s was an isolated event. The current situation is much more pervasive, much more dangerous as it could affect hundreds of firms and the entire financial system, as the New York Times suggests. . . . . . . . . . . . . . . . . ..One of the propaganda ploys utilized by Wall Streeters in their anti-gold sermonizing is that themetal does not provide a yield. This is a specious argument. What they fail to tell investors is that most dollar-based savings instruments -- including certified deposits, money markets, and government bonds -- fail to provide a return for some very straightforward reasons. If for example, your money market is paying 1.5% per year, you are losing money -- a lot of money. With consumer inflation at roughly 4% even by the government's questionable index and taxes in the 40% range, the saver is losing over 4.5% a year on his or her money. This isn't saving for the future, it's organized theft through currency inflation and the way to get poor fast. On the other hand, as reported above, gold since last April is up 19% -- a more than respectable rate of return. . . . . . . . . . . . . "Derivatives are about shifting risk to the dumbest guy in the room." Financial writer Martin Mayer . . . . . . . . . . . . . . . . This link takes you to an excellent article on Wayne Murdy, Pierre Lassonde and Newmont from this weekend's London Times
Rx Gold
(2/25/02; 09:02:06MT - usagold.com msg#: 70716)
@timbervision
I really didn't have as deep a vision about the fluctuating value of diamonds. I thought it was interesting that the guy just grabbed a bag of diamonds and split leaving what I would consider a great deal on the table. With 30 million I would guess he had enough to get by for a while.
Cavan Man
(2/25/02; 08:59:48MT - usagold.com msg#: 70715)
Wonderful satire (and truth)!
The Daily Reckoning PRESENTS: In honor of Chairman Greenspan's appearance before Congress this week, we thought this DR Classique - originally aired May 29, 2001 - particularly appropriate... enjoy...
I, GREENSPAN
By Bill Bonner
Bill Bonner asked me to write today's letter.
"How did an Ayn Rand devotee become the world's most respected central planning bureaucrat?" he asked. "How can you hope to overcome the business cycle and command the entire world's economic tides?" he wanted to know.
Good questions. So earnest. So innocent. So silly.
And why not answer? Nobody reads this pathetic little electronic rag anyway. That is, nobody who counts. Nobody with real power, that is. And if anyone ever asks me...I'll deny I ever heard of it.
Besides, I've been dying to explain...
Do you think I really failed to see the bubble in U.S. stock prices? You would have had to be blind, deaf and dumb not to notice.
Do you think I really believe in this New Era nonsense...or the productivity miracle? Do you really think that I don't know what happens when I flood the world with cash...and take real short-term interest rates down near zero?
But what was I supposed to do? I couldn't exactly come out and say - "it's a bubble!" Investors would have panicked.
Once stock prices got to bubble levels, I had to think of a reason why they might stay there...that was where that New Era and productivity razz-ma-tazz came from. People wanted an explanation and I gave it to them.
Do you think I learned nothing in all that time I spent with Ayn Rand - that miserable, self-absorbed old tart? Reading her books was painful enough - but can you imagine having to spend time with her? I tell you frankly, I got so sick of those egocentric gab fests, in those pitiful little apartments of lower Manhattan...I thought I would go mad.
Rand had made herself into a minor cult figure. But what did it gain her? A following of marginalized nuts and kooks with bad taste, bad habits, and apartments cluttered with science fiction paperbacks.
What I wanted was power, love, money - the same things we all want. And I could never get them with the Randites.
Instead, if you want power, you have to go to where the power is. Caesar could have lived comfortably in any of the Romanized towns around the Mediterranean. Hitler could have had a pleasant life eating schnitzel and bratwurst in Austria. And Bill Clinton could have stayed in Hope, Arkansas. He could have married a local girl, worked as a courthouse lawyer, and become a colorful subject for a grotesque southern novel.
Power in America is in two places. The political power is in Washington. And financial power is in New York. But the real power is where the two come together - in the Federal Reserve system.
You have to remember that the purpose of the Fed - as with any cartel - is to make sure the member banks make money. But, the Fed gets its authority from Washington...it has to pay for this privilege somehow.
The Fed was chartered to protect the currency and ensure the stability of the banking system. But its real mission - now - is to keep the economy expanding. Why? Because that gets politicians re-elected. Not only that, it keeps the money flowing to Washington. Give people the impression that they are better off...and they won't fuss about taxes.
The Fed was founded in 1913. At that time, Washington only took about 5% of the nation's income and the dollar was solid. Since then, Washington's percentage of GDP has increased by nearly 600%. Meanwhile, the dollar has fallen 95%.
Do you really think that was an accident? C'mon...give us central bankers some credit. Inflation pushed people into higher and higher tax brackets. Plus, it gave people the impression that they were getting richer - just what Washington wanted.
Of course, if the inflation rate goes too high...people begin to complain and you have to take action. Thank God Volcker was on the watch back in the late '70s, and not me.
But here's the important thing. Even when you have control of short term rates...and some control over the money supply...you can never completely master the markets. They're too big, too many players, too much money. If you allow too much inflation, you spook the bond markets...and the bond vigilantes mount up. Investors dump bonds...driving up long term interest rates...which has an effect opposite to what you're trying to accomplish. That's already happening a little bit. I cut rates 5 times in the first 5 months of 2001 - no one ever cut rates as aggressively as I have - and still mortgage rates rose.
Could inflation go higher? Could the dollar fall? Mightn't the bond buyers get nervous and drive long-term rates up even higher?
Yes, of course. It's a risk. But it's a risk I have to take. You don't get power by being careful. And you don't do either the Fed, or the politicians, or yourself, any favors by carefully protecting the dollar.
The goal here - as with all government programs - is to produce the desired benefits...while pushing the costs onto someone else. That's how politics works. You promise something...and you force someone else to pay for it. You rob one rich Peter voter...and spread the loot among the poor Pauls.
Why do you think liberals always favor the poor? Why do you think every politician talks about programs for the disadvantaged, the sick, the unemployed? Why do they not give money to the rich...at least, not openly? You think they are just big-hearted, generous souls right? Ha ha. Look, you have to do the math.
Politics favors the poor for two reasons - there are more of them...and they're cheaper. How many rich votes can you buy with a $100 handout?
Does that sound cynical? Well, sorry. But you have to look at the situation, shall I say, objectively.
In the long run, giving money to poor people hurts the poor more than the rich - but who cares about the long run? In the long run, said Keynes, we're all dead.
And now let me tell you another secret - how I became the most successful central banker ever. Keynes also figured out how to use fiscal policy to keep the economy expanding beyond its natural cycle. The idea was for the government to spend like crazy when the economy was weak - to stimulate it. The government would run deficits during the down cycles...and then make up for them by running surpluses in good times.
But guess what? The politicians forgot to run surpluses in the good times. Why? Because they really don't care about the long term or about fiscal responsibility. What they care about is promising voters new programs...and keeping the economy expanding. So, the debts mounted up, but people felt like they were getting something for nothing - and it worked for a long time.
And now, thanks to the economy that I helped create, government is looking at big surpluses. Well, don't count on it. Washington wants to appear to run surpluses - this allows the politicians to decide where to spend the money. But no one in Washington has any interest in actually running a surplus. Count on it. The surpluses - to the extent they were ever real (which they weren't) - will disappear before our very eyes.
Well, what I figured out was that you could use monetary policy in roughly the same way. The theory is that you're supposed to loosen up on the rates - lower them - in a downturn. And then, when times are good, you gradually increase rates to "cool things down." But the trick is, you forget to raise them as much as you should. You always favor rates that are lower than they ought to be. Because you want to encourage more business expansion - and the illusion of prosperity - than would otherwise be justified.
Let me ask you a question: could you imagine me raising rates 5 times in 5 months to head off a bubble? Not a chance. I would be torn apart by the furies in Washington, the media, and Wall Street.
Of course, there will be a price to pay for this too. Nothing comes without a price. Investors who really believe this New Era nonsense will lose a lot of money. They think they can get 15% per year on their investments forever. It isn't going to happen. That doesn't mean stocks have to crash. In fact, I think I can keep them at present levels for many years - perhaps like the period between 1966 and 1973. Easy money can perform wonders - for a while. But instead of 15% for the next 10 years, investors are likely to get zero percent for the next 15 years. Who knows?
Probably bonds and the dollar will come down too...and a lot of people will be hurt. But it could take years. And it might not even be noticeable. Who knows or cares that the dollar today is worth only 5 cents in 1913 terms?
And eventually, the system of managed currencies will collapse. Every central banker is doing what I am doing - deliberately destroying the currency to insure the appearance of prosperity. Sooner or later, people will catch on. They will try to switch from one currency to the other - but all the paper currencies will be weak and untrustworthy. Most likely, they will turn to gold. It's the only thing that we can't manipulate.
But that is probably years ahead. And it's a problem for someone else.
Alan Greenspan, Public Servant
Trapper
(2/25/02; 08:26:17MT - usagold.com msg#: 70714)
Timbervision
Diamonds are a funny thing. The diamond market is in almost complete control by the DeBeers folks with Russia playing along as it see fit. I have bought lots of stone during the '70-'80's gold rush when people would sell wedding and engagement sets for the gold. The diamonds in those sets ran in the 20 to 40 point area and were worth about 3-5 dollars a point. Most all the jewlery store stones are pretty poor quality if you are "investing" in diamonds I suggest you study some before you buy. Howard Ruff of the Ruff times news letter fame got alot of people in diamonds after his call on gold got some folks upset. Graded stone by GIA in H color or better and VVS and up are considered by most to investment grade stones. This of course is not investment advice and here again study the market but prices are down right now. The wild card is Russia if they need some cash have lots of stones to dump. Live small. Not investment advice.
RJ
uponroof
(2/25/02; 07:51:38MT - usagold.com msg#: 70713)
JPMC is crying "significant reputational risk"...
when it is the result of their own pattern of fraud.
UGLY.
The charge of 'pattern of fraud' is in a countersuit from the banks, who are being sued by JPMC for failure to honor Enron default obligations.
All this court case attention is giving media (perception = reality) legs to JPMC legal problems. "Significant reputational DAMAGE" is occurring.
*****************************************
Insurers Fault Enron Deals at Morgan
By RIVA D. ATLAS NY Times
In 1996, the Sumitomo Corporation (news/quote) of Japan discovered that a copper trader named Yasuo Hamanaka had lost $2.6 billion over the prior decade. The company eventually sued J. P. Morgan as well as Chase Manhattan (news/quote), charging that both banks, which have since merged, engineered loans disguised as trades that allowed Mr. Hamanaka to conceal his losses.
Now, several insurance companies, in legal filings tied to a court hearing on Wednesday, accuse the company, today known as J. P. Morgan Chase (news/quote), of having used similar tactics to help Enron (news/quote). As the insurers describe it, the bank's transactions allowed Enron to disguise debts.
J. P. Morgan has sued a total of 11 insurers for refusing to honor its $1 billion in claims relating to its dealings with Enron, which filed for bankruptcy.
Arguing against the bank in both cases is Alan Levine, a lawyer at Kronish, Lieb, Weiner & Hellman in New York, who hopes to strengthen the Enron case by arguing that there has been a pattern at J. P. Morgan Chase.
"The conclusion that Chase deliberately camouflaged a loan to Enron as a commodity transaction in order to perpetuate a fraud" on the insurance companies, Mr. Levine says in a court filing, "is buttressed by Chase transactions with other firms." Describing a transaction as a trade instead of a loan could make a company's debts look smaller than they really are.
J. P. Morgan maintains that there is nothing unusual, much less fraudulent, about the sorts of transactions involved in these cases.
A spokesman for J. P. Morgan, Joseph Evangelisti, said the Enron and Sumitomo cases are unrelated. "These cases are not analogous in any way, and will be decided on their own merits," he said. "The only link between the suits is they share the same lead counsel. "
Besides representing three of the insurance companies in the Enron case, Mr. Levine also represents Sumitomo in a lawsuit it filed in 1999 against Chase Manhattan, but not in a suit Sumitomo filed around the same time against J. P. Morgan. Both suits are still pending.
In the Enron case, J. P. Morgan has asked a Federal District Court judge in New York to issue an immediate ruling when he holds a hearing on Wednesday, avoiding evidence gathering and a trial.
Both cases may hinge on whether J. P. Morgan fully disclosed the nature of the trades, involving contracts known as derivatives. Derivatives promise payments from one party to another, with the value derived from changes in the price of an underlying security, index or commodity.
J. P. Morgan is one of the world's largest traders of derivatives; they accounted for an estimated 15 to 20 percent of its earnings last year, according to Ruchi Madan, an analyst at Salomon Smith Barney.
The trades with Enron were made by companies affiliated with J. P. Morgan, known as Mahonia Limited and Mahonia Natural Gas Limited. The transactions became public shortly after Enron's bankruptcy filing in December, when J. P. Morgan sued the insurance companies to collect more than $1 billion it says it is owed by Enron.
The insurance companies had provided a form of guarantee, known as surety bonds, in the event that Enron did not make good on its obligations.
In refusing to pay, the insurers argue that they were misled as to the true nature of the transactions between Enron and the bank. In these transactions, J. P. Morgan paid Enron up front in return for deliveries of oil and gas over several years.
The legal arguments Mr. Levine has made in the Sumitomo and Enron cases include similar descriptions of J. P. Morgan's derivatives transactions.
In the Sumitomo case, Mr. Levine wrote that Chase disguised its loans as "copper swaps," or agreements involving the actual purchase of the commodity and exposure to its fluctuating price. "In reality, these `copper swaps' were completely unrelated to copper," Mr. Levine argued. "They were neither physical copper transactions, nor financial transactions whose value was dependent on copper prices. They were loans, pure and simple."
In the Enron case, Mr. Levine again argues that the transactions were unrelated to the transfer of commodities — in this case, oil and gas.
"The parties appear to have arranged a series of paper transfers of gas and oil from Enron to Mahonia, from Mahonia to Chase, and from Chase or a Chase affiliate back to Enron," he said.
In a court filing by J. P. Morgan on Friday, the bank does not dispute Mr. Levine's characterization of the trades between Enron and the J. P. Morgan affiliates as loans.
"Any prepaid commodity sale contract provides financing," the bank says. "There is nothing inappropriate about structuring transactions to satisfy the parties' financial, tax, regulatory or accounting objectives within the relevant rules and standards."
Investor concerns over J. P. Morgan's conflict with the insurers have contributed to a sharp decline in value of its shares since Enron's December bankruptcy filing. The bank's stock fell to a 52-week low of $26.70 during the day on Friday, on a report in the Wall Street Journal that the Federal Reserve was examining the Enron trades. The stock recovered to end the day at $28.19 a share, down nearly 23 percent for the year.
The Federal Reserve's examination does not appear to be part of a formal investigation of the bank, according to both J. P. Morgan and the Fed. "It's normal for the Federal Reserve in its role as a bank regulator to look into high-profile transactions," said Mr. Evangelisti, who declined to comment directly on the matter.
A Fed spokeswoman, Michelle Smith, also declined to comment specifically. "As you know, we cannot comment at all on supervisory matters involving individual institutions," she said on Friday. "But, as part of our normal banking supervisory role, we need to understand what is happening at the institutions we supervise."
Still, J. P. Morgan conceded in its court filing Friday that negative publicity from the Mahonia suit has had an impact. "Already," the bank said, the insurers allegations of fraud and their refusal to pay, "have caused significant reputational risk to J. P. Morgan Chase."
*************
with thanks to clo at TABLE
Boilermaker
(2/25/02; 07:12:33MT - usagold.com msg#: 70712)
Strategic Energy Policy
http://www.emdaapg.org/Oil%20Shale.htm
I agree with BB that energy will be the Achilles Heel for the resumption of growth in the US. High import levels, over 50% for oil, also pose a significant strategic risk to the nation's ability to carry on a military action and maintain an economy during a supply disruption.
My recommendation would be to establish a critcal domestic minimum production capacity as a percentage of total domestic demand for oil (and for other strategic commodities). An import limit would be established at whatever percentage was considered to be prudent in view of the commodity's importance to our security and the relative security of its foreign sources.
For instance, if we decided to import no more than 1/3 of our oil, an oil importer would have to purchase 2 bbls of domestic oil for each offshore barrel. Or, he could buy 2 domestic barrel credits from another domestic oil purchaser. This would establish a two tier oil pricing mechanism, free from direct government controls or tarriffs other than verification of credit validity for importers. Oil prices for domestic oil would rise above the world price whenever the domestic production fell below 2/3 of the total.
Of course reducing oil imports to 1/3 when they are now more than 1/2 would cause tremendous disruption. This can be handled by a phase-in over several years, by starting the domestic vs. import balance at 50/50 and gradually raising the bar, say 1% reduction in import levels each year until the long term goal was met.
I believe this is the only way we will ever get serious about energy conservation and at the same time begin to unlock the tremendous potential that we have with shale oil and other non-traditional sources. I'd also like to make a few more bucks from my stripper well.
Any comments on this idea?
Belgian
(2/25/02; 06:56:31MT - usagold.com msg#: 70711)
The USA (dollar) Imperium
This world can't live without an imperial ruler (USA at present). But all imperiums have been challenged until they crumble under their own weight. The present imperium will have to face "political induced" shortage of deliverable Gold. GOLD is a political tool, Sir Kludge. The world has broken itself into "only two" currency system support blocks. US$ and €. Both have their supporters and destroyers. The present Japanese Gold-buying is in contradiction with the dollar block currency management.
And on top of this, the euro isn't trading "deep" enough.
Duisenberg (in China now) is more optimistic for the yearend. Japanese Gold buying comes on the wrong moment for both factions (US$-€). Welteke (Bundesbank) had to talk Gold down. Contract gold (LBMA-paper) MUST indicate the falsified purchasing power of the imperial dollar. The challengers, Euroland, China, Russia, Arabian oil states find this "falsification" still very convenient for their hidden strategy. In this plitical game, the dollar supporting paper gold arena is being forced to kill itself. That's why Welteke made his statement to Bloomberg and not in Euroland !!! The empire must be politically FORCED into
a state of Hyperinflation as de-falsification. Welteke invited for more easy dollar-printing ! In the meantime, let the euro grow more mature and oil ever more independent. The imperium (USA) must lose the dollar/oil/gold-war before the real face of the currency falsification can appear in all its uglyness.
(TG archives : feb. 2000 to june 2000)
TownCrier
(2/25/02; 06:51:34MT - usagold.com msg#: 70710)
Updated WGC Weekly Gold Market Commentary
http://www.usagold.com/wgc.html
Includes the latest factors from official sectors in Germany, Japan, China, Zimbabwe, and Switzerland.
uponroof
(2/25/02; 06:05:55MT - usagold.com msg#: 70709)
Top 25 US banks and their 2001 Q4 performance...
http://www.fdic.gov/bank/analytical/largest/index.html
Interesting to be sure. I wonder how much of this is going to be eventually challenged as questionable accounting. JPMC lost 322M in Q4. Citigroup, beneficiary of Robert Rubin political vaseline....plus 1+B. Bookmark and compare in a year?
JAPAN.....02
What does Japan do? Each day that passes without 'reform' (bankruptcy declared) 2 more days are added to the eventual 'recovery' which will extend the prime minister's political weakness on the backside of reform. Koizumi is politically weak now and hesitant to move. Triggering Japan's banking sector bankruptcy is not going to endear him to the Japanese people. It's a no win. He's got to look at this as a Kamakazi mission, not a political mission.
Meanwhile, as the delay in turn around reforms extend, Japan is asking for additional trouble. At the moment there does not seem to be any great disturbances in the world. Militarily or terroristically, or even through natural disasters. Should that change before Japan impliments their 'medicine' it will be much tougher to address and withstand. Any turbulance of significance here in America or even in Europe could impact the success of Japan's reforms. Timing is becomming crucial.
TownCrier
(2/25/02; 05:49:39MT - usagold.com msg#: 70708)
HEADLINE: The 'old economy' is making a surprise comeback as investors redirect capital from the US to Europe
http://www.guardian.co.uk/euro/story/0,11306,656808,00.html
Key excerpts:
----------------America was a magnet for investors during the prolonged 90s boom that made some analysts wax lyrical about a "new economy" that could grow indefinitely. Europe was considered an "old economy", hamstrung by too many regulations and inflexible policy making.
As a result, global capital poured into the US and sent the dollar soaring.... architects of the euro who thought the single currency might become an alternative reserve currency have been sorely disappointed.
But no one talks any longer about the new economy since the US entered recession... Not only that, but some economists wonder whether European productivity was so bad after all. ... an OECD study showing that German GDP per employee and GDP per hour worked both rose faster than the US during 1990-1998.
...And it appears that investors are reassessing their views of the US and Europe ... there has been a discernible shift in capital flows between the US and the eurozone.
...analysts point out, with US company profits flat, the demand for bonds could weaken, posing a risk to the dollar. Conversely, that would strengthen the euro.--------------
Gold provides good shelter against a weakening currency -- provided you have it BEFORE the trouble sets in.
(click URL for full article)
TownCrier
(2/25/02; 04:36:58MT - usagold.com msg#: 70707)
POP QUIZ. HEADLINE Q: BOJ under pressure to ease further, but how?
http://biz.yahoo.com/rf/020225/t107286_1.html
A: Emission. Wait for it...
----------TOKYO, Feb 25 (Reuters) - ...when interest rates are already near zero ... the Bank of Japan's policy board meets on Thursday to discuss how it can help turn around the world's second largest economy.
"Even if there are additional policy tools, their effectiveness may be uncertain and they could have side-effects," BOJ policy board member Teizo Taya said.
Economists are divided over whether the Bank of Japan (BOJ) will announce fresh policy moves... Some said the BOJ had little choice but to ease further since it must be seen to be cooperating with government to combat a three-year run of falling prices.... But others said the BOJ had run out of effective policy options.-------------
Here it is...
-----------------The government's anti-deflation package, expected to be unveiled on Wednesday, is to focus on steps to speed up the disposal of banks' bad loans and stabilise the financial system. A government source said the package would also call for the BOJ to take bold monetary policy steps... Economists said the most likely policy decision would be an increase in the BOJ's outright purchases of government bonds to provide more liquidity.----------------
And "whom" is it that "prints" the money? i.e., from where does the "will" arise?
-----------------Earlier this month, BOJ Governor Masaru Hayami said he saw no need for a further increase in JGB buying, but political pressure has not gone away.
Prime Minister Junichiro Koizumi has said he wants the central bank to take firm action to fight deflation, while Finance Minister Masajuro Shiokawa has more bluntly called on the BOJ to increase its JGB buying to one trillion yen per month.
``The policy decision is getting more political and it depends on market movements rather than the real economy,'' said Naoki Murakami, economist at BNP Paribas.--------------
And it's a two way street, to be sure.
-----------------Sources close to the talks said the central banker asked the premier to consider swift action to stabilise the financial system, including injecting taxpayers' money into fragile banks. ``I think the BOJ will offer their monetary policy support in return for the government's determination to inject public funds into the banking sector,'' BNP Paribas's Murakami said.--------------
Isn't it rather quaint the way the article refers to it as "taxpayers' money" -- almost as if there were some other kind? Under the current structure of the system, ultimately speaking, ALL money is "taxpayer's" money. Much change needs be for it to be otherwise. Fail to understand this at your own financial peril.
R.
Gold Standard
(2/25/02; 04:16:12MT - usagold.com msg#: 70706)
Of sinking ships....
http://www.boston.com/dailynews/055/world/Britain_Wreck_off_Gibraltar_ap:.shtml
Sorry - that link should light up now!
Gold Standard
(2/25/02; 04:12:18MT - usagold.com msg#: 70705)
Funny how this always happens.......
If I were cynical, I'd probably do a bit of research upon the origins of these amazing shipwreck stories, that always bob to the surface when the Cabal is under pressure.
Do you remember the last one, the wreck off the Korean coast, that contained enough gold bullion to sink a ship? (Well, it obviously did!).
Just wait for the estimates of the bullion in the ship's bowels to come to light - 5 million tonnes, anyone?
This news is just going to hammer the POG in London trading, isn't it?
Here's the link:
http://www.boston.com/dailynews/055/world/Britain_Wreck_off_Gibraltar_ap:.shtml
Good thing I'm not cynical, isn't it?
Gold Standard ........ sinking into the ooze.......
TownCrier
(2/25/02; 03:39:34MT - usagold.com msg#: 70704)
Argentina's largest private bank asks cenbank for bailout
http://biz.yahoo.com/rf/020222/n22369394_4.html
The situation...
------------BUENOS AIRES, Argentina, Feb 22 (Reuters) - Banco Galicia, pummeled by a run on deposits amid nationwide financial chaos, said on Friday it had asked the Central Bank to take over around half the company in return for massive debt forgiveness.
..."We have few other options," director Daniel Llambias said, adding the amount of debt to be swapped was being negotiated with the Central Bank, but the government could end up with majority control of the bank. "This will improve our image, because it improves Galicia's financial solidity."-------------
And the government's thoughts?
-----------The government, near bankrupt itself following last month's default on part of its $141 billion debt and a traumatic currency devaluation, showed little initial enthusiasm for a possible deal. In response to a question about Galicia on Friday morning, Economy Minister Jorge Remes Lenicov said: "This is an issue that goes beyond a strictly financial and banking realm, but it is not in our spirit to take on private banks. We want private banks to strengthen themselves."----------
Word on the street...
-----------Analysts have said some smaller Argentine banks would inevitably collapse amid the financial panic, but many agreed on Friday the government could not afford to let an entity as big as Galicia collapse. ``In the end, banks like Galicia have to be propped up. You can't close them -- this is the core of the financial system,'' said Robert Lacoursiere, a banking analyst for Lehman Brothers. ``This is an important admission that they can't see a way out of this with their own equity.''
Ratings agencies and private economists say the Argentine banking system as a whole has been left insolvent by the run and the ensuing devastation caused by the devaluation, which has seen the peso slide by more than half its original one-to- one value against the dollar.--------------
Why should you own gold? Because paper everywhere is finally beginning to show its mettle. And it will be seen that much of it is wanting under scrutiny.
R.
TownCrier
(2/25/02; 03:09:23MT - usagold.com msg#: 70703)
"EMISSION"
http://biz.yahoo.com/rf/020224/n24217655_1.html
You've seen me use this term before. Although historically it's been seldom seen outside of central banking circles, you'll want to add it to your vocabulary now. Due to circumstances unfolding at the present, it will likely become the next popular buzz word to follow the likes of "hedonic", "synergy", "new paradigm", etc. Be the first in your neighborhood to understand the implications!
R.
HEADLINE: Argentina prints pesos to finance public spending
USAGOLD / Centennial Precious Metals, Inc.
(2/25/02; 02:01:06MT - usagold.com msg#: 70702)
In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)!
http://www.usagold.com/cpm/abcs.html
"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.
"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'
"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)
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