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ARCHIVED DISCUSSION FROM 4/25/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Ten Bears (4/25/06; 22:04:57MT - usagold.com msg#: 143581) usagold.com msg#: 143580 DANIELLE DiMARTINO discussion with Ravi Batra note Ten Bears (4/25/06; 21:54:07MT - usagold.com msg#: 143580) Blaming it on Greenspan By DANIELLE DiMARTINO http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-Q&A_19bus.ART.State.Edition1.13656391.html Snippets:Greenspan created a huge trade deficit. Here again, though, people don't blame him. They just think it's globalization. For most economies, free trade refers to goods, but for Greenspan it meant the free trade of capital. He pushed for the deregulation of the free flow of capital across countries, but the result was that the U.S. dollar would not fall anymore in response to trade deficits. In the past, the dollar would quickly eliminate trade deficits.The tipping point will be the bursting of the housing bubble. Much of the housing bubble has been financed by foreign purchases of mortgage-backed securities. The problem is, many of these loans have been backed by a fraud of their own – unqualified buyers have been given loans by the mortgage industry because the lenders.Finally, in 2008, the real housing crunch will come, with price declines in much of the nation. The real problem is the extreme concentration in the oil industry; I call them the five bullies. All Bernanke needs to do is mention the concentration and that they should be broken up, and you would see the price of oil fall sharply.So what's the solution? Is there a way out? There is, and it's consistent with free trade. I would propose a dual exchange rate system like those in Japan and China. If we could fix our export exchange rate, our exports would rise sharply as the prices of our goods fell overseas. We would let all international transactions continue to occur at the free-market dollar rate.And from George Ure, "Now you may recall that I recently published a note from sources that there were reports of "red currency" being in place in strategic centers outside of the United States - apparently in preparation for a two-tiered currency system. The way such currency works is this: Money outside the US would have one exchange rate, while money inside the US would have another." The Invisible Hand (4/25/06; 19:16:35MT - usagold.com msg#: 143579) Hayek, China and the Ancien Regime http://detachedtrader.com/2006/04/reuters-dollar-may-feel-sting-after-g7.html Dollar may feel sting after G7 fingers China (Reuters)SNIPWASHINGTON, April 21 (Reuters) - The overall message that markets will take away from finance officials from the Group of Seven rich nations who met on Friday is quite simple: the dollar will decline.The ominous combination of a widely forecast slowing of the U.S. economy this year, growing fiscal and trade deficits, and increasing international pressure on China to allow its currency to strengthen ultimately puts a spotlight on the dollar's weak underbelly.==By hyper-focusing on China, Japan is indirectly also under the spotlight. Japan has always been a loyal advocate of the dollar because of its forced US export serfdom after Hiroshima. During the war, Friedrich August von Hayek had however warned in his 1944 book "The Road to Serfdom", that collectivism implied a "social planning" which is incompatible with freedom. Is China perhaps a lot less dollar-system-friendly … and can China therefore be forced, in order to please the dollar economy, to throw its surplus dollar reserves in the dollar economic system to be scrambled for?The AngloAmerican dollar economy grounds her economic dominance/supremacy on plain direct and indirect military menacing/threatening. This means that the Plazas are far less motivated by common sense, than one should expect.Anybody who does not willingly accommodate the workability of the Ancien Regime will have to deal with the military logic of the said AngloAmerican dollar regime.This obsession with growth was driven by the proliferation of debt which mainly serves the dollar-alliance.At the end of the day, it is also "this" principle (?) which explains the democratisation of the Middle East. The recycling of petro-dollar surplus in the AngloAmerican dollar economy. And if you don't allow us to do this, we'll bomb you. As Hayek wrote in his July 1975 Occasional paper 45 of the London Institute of Economic Affairs "Inflation, the Misdirection of Labour, and Unemployment", reprinted in Nishiyama and Leube (eds.), "The Essence of Hayek", Stanford, CA, Hoover Institution Press, 1984., pp. 8-17:… among the feasible monetary systems the international gold standard is the best, if I could believe that the most importance countries could be trusted to obey the rules of the game necessary for its preservation. But this seems to me exceedingly unlikely, and no single country can have an effective gold standard: by its nature it is an international system and can function only as an international system. (pp. 15-16)And he concludes, p. 16,It would seem as if in Britain, the country in which the harmful doctrines originated, a reversal of opinion were now under way. Let us hope it will rapidly spread over the world.That was 1975. We're now one generation later.Some will never learn. Circumstances/facts will force them to recognise and do what Hayek told them two generations ago. Goldendome (4/25/06; 19:12:08MT - usagold.com msg#: 143578) Audio interview with Paul Van Eeden on the U.S. Currency http://www.howestreet.com/goldradio/index.php/mediaplayer?audio_id=262 An interview with Paul Van Eeden in which he gives a very detailed and well explained analysis of what is happening and probably going to happen in the currency and bond markets--all favoring gold. This interview was April 3rd on Howe Street. About a 15 minute interview if you have audio capability. Goldilox (4/25/06; 18:24:33MT - usagold.com msg#: 143577) Oil Prices @ Flatliner,"One would expect that Oil exporting countries would see this as robbery and raise prices in US dollar terms or switch to another currency for trade."Oil prices are set at the bourse auctions, so the producers only real opportunity to raise prices is to curtail production and watch demand rise, which nets them higher margins on lower revenues.But since the US invasion of Iraq has already cut output for them, they will sign more delivery contracts to other nations, forcing the US oil companies to scratch for remaining supply.We already see that a number of nations are at least jawboning reduction of US dollar reserves. It will be even more interesting to see if they are just threatening, or pre-announcing real moves. Flatliner (4/25/06; 17:11:00MT - usagold.com msg#: 143576) Have I got this right? So the Fed has been given the right to buy other currencies on the forex market. This would seem to imply that they will have the ability to create more demand for other currencies. When demand for other currencies goes up, one would think that the price of the other currency would go up. Supply has been removed (gobbled up) by the Fed, thus making the other currencies appear more valuable. One would think that if the Fed did this with all currencies they could drive every one of them up a little making the exports from the US more attractive on the world market.But, as the world has seen with China, they've solved this problem my filling the demand with extra (freshly minted) supply thus giving them a ‘peg’ on the dollar. Thus, this game doesn't work against countries that fight demand with fresh supply.Now MK has pointed out that the target is the euro, yen, pound and Swfranc. Did we see some of this action yesterday with the yen? (I don't know.) One has to wonder if the managers of these named currencies will print to fill the extra demand thus keeping their currencies ‘relatively’ stable against the dollar OR will they simply try to keep their currencies stable amongst themselves? This will be a most interesting game to watch. Gold and Oil are priced in US dollars. Thus, any effort on the Feds part to drive up these other currencies is going to have the affect of making Oil and gold cheaper to the citizens that live in these countries. One would expect that Oil exporting countries would see this as robbery and raise prices in US dollar terms or switch to another currency for trade. Those wanting gold will find it more advantageous to trade using the stronger currencies – because they will buy more gold.Ah… death has tolled for the US dollar! ausome (4/25/06; 15:58:45MT - usagold.com msg#: 143575) dollar devaluation MK nails it please review the work of FOA TownCrier (4/25/06; 15:44:03MT - usagold.com msg#: 143574) The Fed in foreign currencies... Ever one to try to find the positive element in anything, to the extent that we might agree that the buildup of huge foreign exchange positions among, especially, the emerging markets has been a point of consternation, I am somewhat heartened to see the Fed pay lip service, at least, to keeping its own open position as an absolute sum of all foreign currencies curbed at a humble $25 billion. (To be sure, individual currency swaps which net out could be huge and used with effect during life of the agreement, but at least these don't carry the same asymmetric stigma as do reserves of foreign currency held on a net (+) basis.)Imagine if China pared its $800+ billion down to $25...See my "Lithuania" post of yesterday (msg#: 143540) for more commentary around the edges of this reserve subject.R. Flatliner (4/25/06; 15:02:35MT - usagold.com msg#: 143573) This is not good. Paper will burn and gold will shine. Goldilox (4/25/06; 14:59:54MT - usagold.com msg#: 143572) FED in the FOREX What this means in layman's terms in that the bank has entered "the game".Now, in addition to printing dollars at will, the FED can also use them to prop up or raid any other currency at will.Any hope of an "even" playing field is gone at this point.The "free markets" become casinos more and more with each move.Make a law, make a business! MK (4/25/06; 14:55:23MT - usagold.com msg#: 143571) Gold notes. . .The Coming Dollar Devaluation http://www.federalreserve.gov/fomc/minutes/20060131.htm Sorry for the reposts, my fellow goldmeisters. Trying to do this between phone calls and various interruptions here just isn't cutting it. I have more to say on this than the brief post below. I'll try to say more later. . .With respect to my recent post on The Coming Dollar Devaluation, I herein provide the link to the FOMC meeting minutes on the Fed's newly confirmed power in the forex markets (With thanks to our sitemaster). Going forward, this extremely important policy move (one of the last by the Greenspan Fed), though stated briefly and matter of factly, could go down as one of its most important ever. There is certainly more here than meets the eye.The Fed will now be able to conduct forward purchases and sales as well as swaps in the forex markets. The New York Fed will act essentially as broker. Among the currencies targeted are the euro, yen, pound and Swfranc. Conspicuously absent in the list is the Chinese yuan mostly likely because it is pegged to the dollar anyway - so any action for or against it would be immediately neutralized by the Chinese central bank.As mentioned previously, I see this as part and parcel of a battle to devalue the dollar once and for all against competitive currencies. This is not a warning shot across the bow; it's a torpedo shot midship. When you combine this action with dumping M3, the recent IMF announcement on depreciating the dollar and the strong press put on the Chinese to revalue the yuan, it is evident that the U.S. Federal Reserve and Treasury Department are approaching the devaluation the way the military would prepare for war. And a currency war it very well might be. Anyone who left the G7 meeting thinking they had just participated in another meaningless rhetorical exercise may have to re-evaluate. The Federal Reserve will now use the same tactics employed by other central banks in the forex markets. With the new Fed powers, the devaluation policy, should the Fed choose to use them, will have teeth. USAGOLD Daily Market Report (4/25/06; 14:36:02MT - usagold.com msg#: 143567) 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.TUESDAY Market ExcerptsGold up $10 as funds buy inApril 25 (from Reuters) -- Precious metals futures closed with sharp gains on Tuesday as bullish investors rebuilt part of their positions after a huge correction since last week, though most prices held below recent multiyear highs.Increased volatility in gold and silver markets, coming after respective spikes to 25- and 23-year peaks, was creating some whopping daily price moves, but the market's long-term upward trend remained intact, analysts and traders said."Though metals prices have indeed risen strongly, those gains have come from ridiculously low prices reached at the end of a 20-year bear market," said Peter Schiff, president of Euro Pacific Capital in Darien, Connecticut."Despite the current run-up, precious metals prices remain well below normal levels, when measured against other assets," Schiff said in a note.Aggressive fund buying lifted gold, as investors appetite for commodities and various metals returned on Tuesday. A weak dollar early in the day also boosted the yellow metal, which traders sometimes turn to as an alternative to the U.S. currency.COMEX June gold futures rose $10.30, or 1.65 percent, to $634.20, in a range of $621 to $638.---(see url for full news, 24-hr newswire)--- USAGOLD / Centennial Precious Metals, Inc. (4/25/06; 10:42:08MT - usagold.com msg#: 143564) FREE Gold Information Packet... http://www.usagold.com/Order_Form.html Goldilox (4/25/06; 10:33:50MT - usagold.com msg#: 143563) "Dillion Read & Co. Inc. and the Aristocracy of Prison Profits" WOW. I just finished reading the Fitts article in its entirety. For those who thought the "Money Masters" was informative, Ms Fitts gives a much more detailed insider's view of everything from Government drug dealing and finance fraud to corporate prison profiteering.If you haven't read her story, she spent $millions in legal fees to avoid those very corporate prisons when she started blowing the whistle at HUD and her previous "partners" came at her with a vengence.It's not surprising that many of the information giants like Belgian do NOT want to be around when TSHTF, as it will be sprayed far and wide, with little regard to who gets "dirtied" in the process. mikal (4/25/06; 09:45:31MT - usagold.com msg#: 143562) "Consumer CONfidence highest in X years" http://Obeautifulforspaciousskies... Dear Mr. and Mrs. XXXXX:You were selected to receive this important poll onthe United States of America because you have been identified as longstanding, patriotic citizens and registered voters.Your participation in this government survey is strongly encouraged.Just a few quick questions about the strength ofthe United States economy. Because the results of this survey are processed using modern, high-tech Diebold tabulators, only a microscopic sample is required to produce this vital, irreplaceable portrait of America.The country and spending are strong and growing stronger. That should continue, wouldn't you agree?Answer here: "Umm yes, YES absolutely!"American's are very satisfied income tax is fair. T or F?Answer here: "Uh, TRUE, of COURSE!"The United States has the best way of life andyou and your family plan to remain in this country. T or F?Answer here: "Yes, YES, HELL YES!"Thank you for participating in this important Hallib-Acme survey. Goldilox (4/25/06; 09:35:45MT - usagold.com msg#: 143561) Catherine Austin Fitts http://urbansurvival.com/week.htm Read It and Get It (link provided at URL)Catherine Austin Fitts' "Dillion Read & Co. Inc. and the Aristocracy of Prison Profits." Chapter 1: "Brady, Bush, Bechtel, and "the Boys". "Make a law, make a business," indeed.-GoldiloxThose who have lurked here a while remember that Fitts was the US Treasury auditor blackballed for investigating the disapperance of over a $Trillion in HUD funds.She is now the leader of a local investment movement called "Solari Network", stressing the need for local communities to control their own capital in order to recover from the ravages of international banking. She has been interviewed extensively on shows such as Puplava's FSN.This is a "must read" for anyone who wants to see the real depth of corruption in the corporate oligarchy. Included chapters cover RJR, Bechtel, and the Mena AR drug cartel.Why must the charade continue as long as possible? So the BOYZ can harvest as much wealth as possible before the collapse. It adds a lot of credence to the theories of hyperinflation before deflation. Knallgold (4/25/06; 09:16:12MT - usagold.com msg#: 143560) TIH #143547 lost intransaltion In an interview in the Monday edition of the Frankfurter Allgemeine Zeitung on the sidelines of the IMF-meeting, Bundesbank President Axel Weber opposed further competences for the IMF in regulating exchange-rates.The IMF should concentrate on its main tasks.This includes a more strict surveillance of exchange rates "I hold nothing from a role as an arbitrator in exchange rate issues,possibly with the help of numeric numbers of presumed equilibrium exchange rates" (KG:strange sentence-did he in fact question the unilateral IMF/$ reserve system,just with camouflage words?).The IMF proposed to strengthen its watchdog role for the worldeconomic stability.They would also do a half-yearly study on balanced exchange rates on emerging countries.Most members are skeptic about this so called fair exchange rate because of its impact on currency markets.China asked the IMF to respect its members autonomy.Weber said it should put more emphasis on exchange rate policies and the consequences for the world economy.He particularly criticised Ratos proposal of a new credit facility as it would dampen credit risk perception of investors and that it is not in accordance with the IMF's financing structure.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-ŕ-vis the IMF. According to Weber, the fund will have a structural financing problem when the surveillance function is strengthened against financial aid.The IMF has to reduce its expenditure."But we can't avoid to think about other incomes" he said.Discussed are charges for services,creation of an income bearing investment account and regress on its own reserves."We can discuss about the first 2 points,but the dismantling of currency reserves through Goldsales will not help to achieve our goals". Toolie (4/25/06; 08:58:12MT - usagold.com msg#: 143559) @ MK and IH MK--The thought had occurred to me.Thanks.TIH--PlazaII -- seen that movie before, didn't care for the ending. contrarian (4/25/06; 08:55:53MT - usagold.com msg#: 143558) Invisible Hand--Bush and Investigation into Oil Market http://www.kunstler.com I think this is just posturing to be shown as taking action on this issue, as it is a sensitive one to voters...at least as long as voters are completely clueless about the reality of Peak Oil...having been hypnotized TV, silly talk shows, celebrity obsessions...and at least denied the opportunity to find out about this by shallow, obesiant, self-serving media. It never ceases to amaze me to hear the reaction by the average Joe on the street to high gas prices as a solely function of oil company greed, it's almost a Pavlovian response, as if the game can go on forever for SUVs and there's an unlimited supply of oil....completely clueless.There's nothing Bush can do about this, he's helpless...well, apart from cutting the gas taxes, that would certainly lower the price! MK (4/25/06; 08:43:17MT - usagold.com msg#: 143557) Toolie One man's opinion. . . . Another imposter. The Invisible Hand (4/25/06; 08:00:57MT - usagold.com msg#: 143556) A kung fu dollar collapse http://business.timesonline.co.uk/article/0,,13129-2150322,00.html Is dollar's shift the start of something nasty?SNIPSTHE dollar lurched sideways on the foreign exchanges yesterday in what optimists hope will herald a smooth adjustment but pessimists fear could be the start of something nasty+And if the dollar starts rolling downhill, it could set off capital movements that would drive financial markets and commodity speculation into paroxysm. Officials hope for a tai chi dollar devaluation, not a kung fu collapse.==Tai Chi, is a genuine path for health and tranquility.http;//www.taoist.org The Invisible Hand (4/25/06; 07:49:37MT - usagold.com msg#: 143555) Mad Money according to the AngloAmerican nightmare The funny thing about the continuing proliferation of paper gold (exchange traded funds, ETFs) is that more and more speculators have no gold metal in possession … WHEREAS THE CONCEPT OF GOLD WEALTH STEADILY PROCEEDS.This is "funny" because it demonstrates the desperation of the gold-price administrators. "Desperation" because paper gold can no longer be used (abused) to freeze the price of gold. Quite to the contrary, paper gold has the unintended consequence of stimulating the price of gold to new heightsBECAUSE the giants in whose steps we are following can now fully take advantage of "Peak Gold", the idea that gold production is now near its maximum level, and that from here on out new production will be flat or declining.ETFs can only delay or temper gold price increases.The proliferation of derivatives will at a certain moment explosively strengthen the underlying fundamentals. But, for the financial industry, these are worries for later. A drug addict also knows what will be her end (except if she's a medical doctor and has easy access to drugs, then her end will be different, i.e., she will not have the end of the "normal' drug addict – are gold bugs the equivalent of the drug addicted medical doctor, just as the drug addict is the equivalent of the derivatives addict?)All the money (digit) pools which are addicted to derivatives MUST participate in this scheme in order to achieve profit.When the manufacturer can no longer sell anything, she will have her product financed by the prospective buyer. This is nothing else than the "the original AngloAmerican dream"...or rather nightmare.At the end of day, we have achieved an "industry" which has burdened many future generations with gargantuan debts. This is the era of the "happy-trading" of nothing. Mad money! The Invisible Hand (4/25/06; 06:56:39MT - usagold.com msg#: 143553) What's happening? http://news.yahoo.com/s/ap/20060425/ap_on_go_pr_wh/bush Is thisSNIPPresident Bush, under pressure to do something about gasoline prices that are expected to stay high through the summer, has ordered an investigation into possible cheating in the markets. a precursor to thisThe Invisible Hand (4/24/06; 20:23:36MT - usagold.com msg#: 143544)SNIPIt 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? Toolie (4/25/06; 06:28:39MT - usagold.com msg#: 143552) @ Another ****Without real physical to supply the oil states, they are now bidding for gold with oil! The BIS will do the only thing they can, halt all trading and declare gold a "world oil currency"!****There was talk some months back about London defaulting on paper silver. Has there been default on paper gold? Is oil now bidding for gold in the commodity markets, rather than securing supply from BBs? Or do I misunderstand you? Toolie (4/25/06; 05:29:09MT - usagold.com msg#: 143551) Another Note the date!!!!Date: Tue Apr 25 2006 06:52ANOTHER (THOUGHTS!)Snip: All: We have seen the last of cheap oil priced in US Dollars as the oil states are no longer taking paper gold! This change in trading is having a great impact on the price of oil, the price of gold and the USD. (end snip) The Invisible Hand (4/25/06; 01:17:06MT - usagold.com msg#: 143550) Those krazy Indians from Mumbai http://www.mumbaimirror.com/nmirror/mmpaper.asp?sectid=13&articleid=42420062234418742420062233531SNIPIf you love to invest in gold, then you will soon be able to do the same without physically owning one gram of the precious metal. http://www.mumbaimirror.com/nmirror/mmpaper.asp?sectid=13&articleid=42420062234418742420062233531SNIPThe Securities and Exchange Board of India (SEBI) is giving final touches to guidelines, to be issued shortly for introducing Gold Exchange Traded Funds (ETFs) to facilitate Gold and Real Estate to be traded by Mutual Funds, according to A.P. Kurian, Chairman of the Association of Mutual Funds in India (AMFI). ViewYesterday's Discussion.
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