Home Gold Primer Q&A Daily Market Report Gold IRA Gold Coin Prices Charts Stats Essays Site Overview High Net Worth How to Buy Gold Live Gold Price Breaking Gold News Mobile Gold Price Gold Coin Images About Us-Contact Search Video Round Tables

Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

FORUM ARCHIVES

Select date of the archive you wish to view Month 1 2 3 4 5 6 7 8 9 10 11 12 Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Archives date back to September 22, 1998

WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 2/25/2007
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Goldendome (2/25/07; 23:47:13MT - usagold.com msg#: 152641)
The Fed's Catch 22 -- comment by Peter Schiff
http://www.gold-eagle.com/editorials_05/schiff022307.html

I think we are fast approaching the time when the markets will actually force the Fed to show its cards. If gold prices continue to surge [...] and long-term interest rates finally follow suit, the Fed will be forced to make a very uncomfortable decision. It will either have to raise rates aggressively, and let the economic chips falls where they may, or fold its hand by leaving rates unchanged. Either way, we are in big trouble. If the Fed does the former, stock and real estate prices will fall, dragging the economy and the dollar down with them. If it does the latter, the dollar will collapse, long-term interest rates will soar, causing stock and real estate prices to plunge, and pushing the economy into recession. It's the ultimate catch-22. When it comes to the Fed raising rates, we're dammed if they do and dammed if they don't.



flow5 (2/25/07; 23:41:56MT - usagold.com msg#: 152640)
Gold vs Dollar
TOPAZ:
I agree with your comments...Gold and dollar graphs are displayed on their respective web sites. I wouldn't say the inverse relationship between gold and the dollar would work for trading futures contracts, but if your holding precious metals, there is a long term relationship, ceteris paribus.

Gold 2000-present
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
Trade weighted exchange index
http://research.stlouisfed.org/fred2/series/TWEXM?&cid=15

As for gold's run-up:

PROPONET: In the original federal reserve act of 1913 "It was anticipated that credit extended by the Federal Reserve Banks to commercial banks would rise and fall with seasonal and longer term variations in business activity"..."From the beginning, the Federal Reserve was reasonably successful in accommodating the seasonal swings in the demand for currency—in the terminology of the act, providing for "and elastic currency".

APPONENT: The traditional commercial loan was essentially a processing or merchandising loan. It had a maturity of less than one year (usually less than ninety days), and it purportedly was self-liquidating, that is thee sale of the merchandise financed by the loan provided the borrower with the funds with which to repay the loan. The bills which this type of lending gave rise to were termed "real bills," and it was the contention of those who sponsored the "real-bills doctrine" that this type of loan was not inflationary since the banks were financing real things, value being added to product as a result of the lending process. In fact, however, if the theory is applied under the assumption that labor and facilities are fully employed, the injection of new bank credit for financing inventories or any other phase of merchandising or processing is obviously inflationary. It is also inflationary, but less so, if the new bank credit is injected at a time of underemployment. The effect then is to bring about both a rise in prices and some re-employment of factors. Once prices start increasing, it will be necessary for businessmen to secure larger commercial loans, just to carry on the same volume of business, and other so-called commercial loans will be obtained in order to hold larger inventories and engage in more forward buying. All such activity promotes higher prices with no necessary concomitant expansion in the production of "real" things

The FOMC is tasked to provide yearly seasonal adjustments as business activity waxes and wanes. And the problem is the FOMC doesn't recognize that the theory and mechanics are the same for both arguements.

Stage 1 & Stage 2, are both nothing more but reactions to the seasonal adjustment policies of the FOMC. That's why gold will shortly drop, although it looks to be somewhat later than I expected.

However, because the path of the foreign exchange value of the dollar will perpetually, inexorably, and relentlessly, depreciate, gold has no where to go but up.

And no country has become and remained a world power if it is a world debtor and has a weak currency. From these unwanted events we can expect a vicious level of stagflation that will become an enduring feature of our economic landscape. And the United States will be forced into a high degree of economic isolation and perhaps into an increasingly totalitarian mold.



mikal (2/25/07; 22:51:50MT - usagold.com msg#: 152639)
Corrected link
http://www.etherzone.com/2007/henr022207.shtml
Msg# 152634 CROCK POT... THE BOOMING ECONOMY
Address:http://www.etherzone.com/2007/henr022207.shtml

Black Blade (2/25/07; 22:50:03MT - usagold.com msg#: 152638)
Slingshot
"They Only Come Out At Night" by Edgar Winter is good. However, I am more partial to his brother Johnny Winter's blues. Both got their start at the all black Raven Club in Beaumont, TX when they asked to play with headliner BB King (1966 I believe). BB was amused that two white - "very white" - boys would want to play with him, let alone come into the Raven Club. BB gave Johnny his nickname "Lightening Fingers". The rest is history.

Only in America.

Those were the days. Those were also the days when a dollar meant something because we were still on the Gold standard (more or less). However, Silver coin was withdrawn from circulation two years before. A few years later Pres. Nixon closed the "Gold Window". Again - the rest is history.

- Black Blade



mikal (2/25/07; 22:44:18MT - usagold.com msg#: 152637)
Wang says gold good for reserves
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=5617bd70-7620-43c3-adae-03dff5c5e37f
China Tipped To Buy Euro, Asian Currencies In FX Reserves-2
Victoria Ruan - Dow Jones News Wires - February 26, 2007

mikal (2/25/07; 22:04:27MT - usagold.com msg#: 152636)
@Goldilox, Smeagol
Leave it to the World Gold Council to censor and underestimate. They are paid agents and lackeys of the cartel that plays by different rules. Think playbooks
like The Communist Manifesto. After one-world gov't the WGC can be absorbed into the monarchy.
I noticed Kitco undergoing changes since they sold out to the bullion bankers, not that their gold pool scheme ever appeared above-board- now everyone's noticing changes, like their new forum is censored to the hilt. Their spot quotes are consistently lower than other sites services. Their news feed is cut back. And today their front page no longer carries the opinion/editorials. Nothing to see here... except George Orwell's vision.

Goldilox (2/25/07; 22:01:21MT - usagold.com msg#: 152635)
"record demand"
@ Smeagol,

Shhhh . . . it's a secret. Kinda like "entitlements".

mikal (2/25/07; 21:50:50MT - usagold.com msg#: 152634)
Entitlement spending in crisis
http://www.etherzone.com/henr/022207.shtml
CROCK POT
THE BOOMING ECONOMY
By: Ed Henry
If jobs were more plentiful and wages were increasing, if the economy were truly on an upward path, payroll tax receipts would be increasing. Unfortunately, these receipts aren't any better today than they were in 2005, or the year before that. In fact, these extra payroll overtaxes are forming a similar month-to-month pattern that looks like a repetitious roadway.
Last year, it took us until April to catch up with previous trails. This year, we're already in the groove that means things are no better for workers than they were three years ago and the government will continue to walk off with somewhere between $71 –  $85 billion of our retirement money again this year. And they'll complain because it isn't more.

We are already listening to politicians talk about how they've "got to do something about entitlements." And the greatest crock of all is that if they don't drastically reform entitlements these programs will eventually eat up their entire budget. Congress and the administration will be in nothing but the insurance business.
It would be wonderful if these hypocritical politicians were talking about reforming their own entitlement programs like the Federal Employees Retirement System (FERS) that never has enough in premiums to cover outlays, or the Federal Life & Health programs that are completely subsidized by taxpayers with no contributions whatsoever from the federal employees. For them, it's free.
What they will do is attack Social Security, an entitlement that works; an entitlement that produces a profit every month which the politicians steal to spend on invasions, occupations, bridges to nowhere, and the like; an entitlement that provided them with $78.3 billion in "off budget" booty last year and $18.5 billion just last month, January 2007 – money that should have gone towards improving the retirement system or at least put in reserve.
There was a time when the money from payroll taxes, money that is collected specifically for Social Security and Medicare, was considered "dedicated" money not to be touched for other purposes. Using a smaller portion of that money to pay benefits to the retired and disabled was also considered "mandatory spending" from the budget. In other words, what's collected for Social Security belongs to Social Security and no one else.
The politicians and bureaucrats have never paid attention to these words and claim to have "borrowed" or "invested" Social Security's money in "special" treasuries which is the most ludicrous thing imaginable. It's ludicrous because these treasuries become part of the national debt that can only be redeemed with taxpayer money. In other words, the same people who donated the surplus in the first place are now straddled with debt that amounts to paying the same taxes again plus interest.
Social Security now holds more than $2 trillion in these debt markers and Medicare holds an additional $343.4 billion. These two entitlements are now 23.7 percent and 3.9 percent of the national debt respectively.
The above clip comes from CommonDreams.com, February 9, 2007, and is just the beginning of benefit cuts the Beltway Bandits will try to impose.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."

Smeagol (2/25/07; 21:45:33MT - usagold.com msg#: 152633)
Sss... record demand for It?
...or is it jusst that record amounts of dollarses... and other tricksy-papers... are now required to buy It? >8-)

S.

Goldilox (2/25/07; 21:16:31MT - usagold.com msg#: 152632)
2006 Gold Demand Record $65.3 Billion
http://www.idexonline.com/portal_FullNews.asp?id=27070
snip:

Record high gold prices during the year drove 2006 demand for gold to a record of $65.3 billion. However, the high price also caused a drop in purchases of gold in terms of weight by central banks. At $44 billion, gold jewelry sales also set a record high.

Despite a fall in production and reduced supply, industrial demand was the highest ever at 458 tons, according to figures released by the World Gold Council. Supply fell 13 percent by weight.

Jewelry demand rose 14 percent in dollar terms in 2006 as a whole, but fell 16 percent in weight due to a volatile gold price in the first half of the year. Demand for investment gold increased 7 percent over 2005 to 637 tons and 45 percent in value.


Goldilox (2/25/07; 19:02:35MT - usagold.com msg#: 152631)
Private equity 'on crest of wave'
http://news.bbc.co.uk/2/hi/business/6364673.stm
snip:

The head of one of Britain's best known private equity firms has warned that his sector is now "near the top of a crest of a wave" - which, when it breaks, is likely to cause some businesses to fail.

Private equity groups have taken over businesses ranging from the AA to Birds Eye, and one consortium is considering a takeover of supermarket giant Sainsbury.

Most of these deals have been leveraged buyouts, where a company is bought with borrowed money in the hope of improving profits and selling it on at a higher price.

But the company must earn enough to keep up the repayments on the debt.

In cases such as Debenhams or the AA, the private equity firms have made hundreds of millions of pounds - a success that has prompted a boom in such deals.

In Europe alone last year, £118bn was spent in private equity takeovers, up 41% on 2005.

Overheated

But experts in the City, including some in the banks that lend to the private equity firms, are increasingly worried by the levels of debt being taken on - especially when interest rates are tipped to rise.

Jon Moulton, managing partner of the private equity firm Alchemy, said he believed the market was overheated.

"I don't think it's a bubble, but it's certainly getting a bit near the top of a crest of a wave," he said.

"The debt levels have been rising very rapidly in the last few years."

Mr Moulton said there were two main scenarios for companies over-burdened with debt.

"If there's nothing else wrong, it just gets restructured and it doesn't have much effect on the business or its employees. That's the benign scenario," he said.


"If a company has too much debt, stops investing, runs itself to the point where it can't even buy enough stock to run the business, then you have bankruptcies.

-Goldilox

A lesser sung sector built on more debt financing. Once they go "private", the stock risk is eliminated, but the business must still maintain margins sufficient for debt servicing.

Cometose (2/25/07; 19:00:42MT - usagold.com msg#: 152630)
Ash commentary
The individual gave a lot of historical comparison's trying to analyze gold..and it's bad movement re many other benchmarks......that could be measured statistically in markets


When Nixon closed the GOld window in 71 .........the arabs decided that they didn't want our oil (Footsteps of Giants) unless they were going to get paid with value ....

and then they declared and embargo........

CONTEXT

1970's
There was still plenty of oil in the ground .....

After some dirty CIA tricks and VOLCKER becoming PRESIDENT over the FEd .....things went retro ........


This is payback time and the ARABS still want value for their oil....( did you notice the price has gone up )

Since 80 , we invaded Kuwait and Iraq in 1990 , and since that time Afghanistan and Iraq......

WE'RE BACK!!! but this time since
Iraq and now IRAN are declaring war on the US by taking payments only in EUROS .....

we have another MEXICAN STANDOFF in the DESERT .....

but this time there's no OIL / we have peak OIL

and CHINA and

RUSSIA have sided with the ARAB states in deciding to
BUY GOLD WITH THEIR PETRO REVENUES in addition to

backing IRAN for IRAN SOVEREIGN RIGHTS OVER THEIR MINERALS


THIS SITUATION shouldn't be underestimated or misappraised by LOOKING IN THE WRONG PLACE...........

If the FED RAISES INTEREST RATES ............there will be a lot of unemployment MEAT to draft into the armed services to serve in WWIII.........

INELASTIC SUPPLY + FIXED DEMAND = RISING OIL PRICES ....

As long as oil prices are rising ..........and CHINA AND RUSSIA and THE ARAB STATES are buying GOLD with THEIR OIL REVENUES and just on PRINCIPLE ......GOLD will come to a place where it is rising as we have seen =DRAMATICALLY= with respect to the rising price of oil ........

HOW LONG WILL THIS LAST ?

UNTIL THE NEW ENERGY comes on line .....THE EMPEROR HAS NOT CLOTHES


slingshot (2/25/07; 18:24:42MT - usagold.com msg#: 152628)
Cometose
Play the song "Frankenstein" an instrumental and watch the POG rise. by Edgar Winter. Part of "They only come out at night"
Slingshot------------<>

Chris Powell (2/25/07; 18:24:31MT - usagold.com msg#: 152627)
Euro and gold looking better to central banks for reserves
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=05a6663e-d0fe-47c1-bf22-52a61d03d18a
By Paul Hannon
Dow Jones Newswires
via FXStreet.com
Sunday, February 25, 2007

LONDON -- The euro made small gains as a reserve currency at the expense of the U.S. dollar in the final months of 2006, while gold is set to make a comeback as a reserve asset, a survey by Central Banking Publications showed Monday.

Although respondents to the confidential survey don't appear to have included the People's Bank of China or the Bank of Japan -- which hold the world's largest foreign exchange reserves -- they do account for 30% of total reserves held worldwide, or $1.5 trillion, CBP said. Of the 47 central banks that responded by December to the survey, 21 of them, managing reservesof $630 billion, said they had increased the share of their reserves held as euros, and 15 of thosesaid they had done so at the expense of the dollar.

The survey by CBP, a publishing company specializing in reporting on central banks and other aspects of international finance, showed that seven central banks said they had cut the share of reserves held in euros.

Nineteen central banks said they had cut the share of reserves held as dollars, while only 10 had increased the share of reserves held in the U.S. currency. Only five of the latter group, with reserves totaling $70 billion, said they had done so at the expense of the euro.

"Many respondents raised the proportion of their portfolios held in euros, in most cases at the expense of the dollar," Central Banking Publications said.

Nine central banks raised the pound's allocation, while four cut its share of reserves. Four central banks reported cutting their allocations of the Swiss franc, and none reported increasing its share.

Six central banks said they had raised their yen allocations, while four cut their allocations to the Japanese currency.

The shift into euros on the scale suggested by the survey would still leave the dollar as the dominant reserve currency by a large margin.

The International Monetary Fund has said that in the third quarter of 2006 the dollar accounted for 66% of foreign currency reserves, while the euro accounted for 25%. In the second quarter, the dollar accounted for 65% of reserves, and the euro 25.5%.

The survey also indicates that the pound continues to be the third most important reserve currency, with the Japanese yen remaining in fourth place.

After a long decline as a reserve asset, the survey indicates that gold may be about to make a comeback. Some 63% of central banks said gold had become more attractive following recent price rises and an increase in market liquidity.

But gold's role as a safe haven in the wake of natural or man-made disasters is also part of its attraction for central bankers.

"Ongoing geopolitical risks involving the U.S. and its war on terrorism make U.S. Treasurys less attractive and gold more attractive," the survey quoted a reserve manager at a developing country's central bank as saying.

Central banks have been diversifying their investment portfolios away from holdings of U.S. Treasury bonds and other low-yielding assets in recent years.

The survey found many would like to be able to invest in equities, something only three of the central banks in the survey are allowed to do at present.

Some 56% of respondents said there is a case for allowing central banks to invest in equities, although few of those came from developing economies.

However, a move into equities is unlikely to happen soon, since central banks continue to be conservative in their investment decisions.

The survey showed that in 2006, 70% didn't raise the proportion of their portfolio that is invested in "new asset classes" -- essentially, anything that isn't a triple-A rated government bond -- while 5% had cut their allocation to new assets.

Central banks were in agreement that the sharp rise in official foreign exchange reserves that has taken place in the last three years is likely to continue.

One central bank expects reserves to double over the next three to four years, but most respondents expected reserves to increase by between 20% and 59%, on top of the 70% increase since 2004.

Central banks said the greatest threat to the value of their reserves over the coming 12 months is the risk of a slowdown in a major economy -- particularly the U.S. -- and global imbalances. That contrasts with 2006 and 2005, when their greatest concern was rising interest rates.

Reserve managers are also increasingly worried by the threat posed by heightened geopolitical risks, while some also expressed concern about the growing role played by hedge funds in global financial markets.

"Hedge funds have been growing rapidly and taking huge positions in different markets, and it seems that lessons from the past are not being taken into account," said one reserve manager. "When they come to unwind their positions, the impact on the markets may be severely destabilizing."

Cometose (2/25/07; 18:20:51MT - usagold.com msg#: 152626)
dollar
.8381

Cometose (2/25/07; 17:43:14MT - usagold.com msg#: 152625)
Gold SIlver/ Dollar
The dollar looks like it's going to have a bad evening

THe sparks gettting ready to fly on the horizon under the stars in the western hemisphers ......

dollar printing .8387

7 points to launch

TownCrier (2/25/07; 14:39:40MT - usagold.com msg#: 152624)
Gold May Rise to $700 as Iranian Tensions Spur Demand for Haven
http://www.bloomberg.com/apps/news?pid=20601012&sid=aiF5V0qgzbMk&refer=commodities
26February2007 (Bloomberg) --

Gold jumped 3.5 percent on Feb. 21 partly because Iran defied a United Nations Security Council deadline to halt uranium enrichment.

The U.S. says Iran, the Middle East's second-biggest oil producer, plans to build a nuclear bomb. Iran says it wants to develop power plants.

"The smart money is piling into gold before something transpires in Iran," said Ralph Preston, a senior analyst at Heritage West Financial.

Escalating tensions in the Persian Gulf region may drive crude-oil prices higher, increasing gold's appeal as a hedge against inflation, analysts said. A separate Bloomberg survey shows a majority of analysts and traders expect oil to gain this week. Crude climbed almost 3 percent last week.

Gold sometimes moves in tandem with oil as investors buy the metal to preserve purchasing power. Gold surged to a record $873 an ounce in January 1980, after Iran cut petroleum supplies, doubling the cost of crude in a year and sending the inflation rate to 13 percent.

Gold may climb as demand outpaces supply. Barrick Gold Corp., the world's biggest producer, and Newmont, the second-largest, said last week output will drop this year from 2006. Investment demand for the metal jumped 7 percent in 2006.

"Inflation rates are going to continue to rise," Pierre Lassonde, vice chairman of Newmont Mining Corp., said on Feb. 22. "We are going to see at least 12 to 15 years of a bull market in hard assets. This is far from over."

^___(from url)___^

Visions of $700 or $800 are from seeing only the small potatoes in a very, very much larger stew.

R.

Rook (2/25/07; 14:04:47MT - usagold.com msg#: 152623)
.,.
Thanks for posting the gold coin, coincidence or not, it felt good to see.

USAGOLD / Centennial Precious Metals, Inc. (2/25/07; 13:53:59MT - usagold.com msg#: 152622)
A world of gold at your fingertips...
http://www.usagold.com/buy-gold-coins.html





Rook (2/25/07; 13:53:40MT - usagold.com msg#: 152621)
dang
Well, I suppose I am late to the game, after having a 2 day immersion into previously unknown to me, 911, Aaron Russo, and various other linksites, I must amend my previous views on what the Fed and Globalist boys might be up to.
I am on geopolitical overload, and didnt realize my usagold education adventure would end up with my 2 day "graduation" party being so dang ugly. What indeed was I thinking? Well, the saying goes; "money and power" and "corruption". with a few other words I cant remember, but with vast amounts of money, and vast amounts of power, a view of the corruption can be staggering.
I admit to being staggered. Like an animal taking a bullet I suppose. On the bright side, I may win a coin from the good folks here at usagold.

Cometose (2/25/07; 13:14:49MT - usagold.com msg#: 152620)
Planning your exit strategy
http://www.gold-eagle.com/editorials_05/watson022107.html
Roland Watson thinks you should start planning your exit strategy for silver.............


I think one should try to develop a strategy re : silver which ensures the possession of the metal prior to a point in time when silver disappears

mikal (2/25/07; 13:00:42MT - usagold.com msg#: 152619)
@Topaz
Aye, me heartie, tis some solid and shiny reasoning to sock away some silver.
Our bloody bullion banker buddies did come in handy, yea?
But alas, my post 'twas tongue in cheek(what's left of it I'm afraid!)Nothing but hypothetical hydrocarbons in "oildrums", pretend 'pellets' of U, and BS 'rhodium bars' me friend! Behold:
"Re: Exchange for gold
Aye matie! I have stockpiled full oildrums, uranium pellets and rhodium bars en masse to use as "hardtimes" money.
But like other committed commodity pirates, I'll continue to draw em down at the right inflection points, star position willing, to take advantage of the cheaper gold, the more barbarous of the four!
Har, not to those silly billy banker boys!
Ye see, in a world of relics, no risk is too big when it comes to thrillseeking! Methinks most of these islands are still unclaimed, but we'll fight if we has to!
Ahoy, mineral "money" ahead!"

Ahoy one sailor's money be ANOTHER sailor's trazure!


Topaz (2/25/07; 12:26:30MT - usagold.com msg#: 152618)
@mikal
A 44Gal drum of rhodie pellets? ...that takes you waaay beyond Pirate mate ...same brush tho, You're a Bullion Banker!!
As an old Frigie, I got into the habit of squirrelling away a few sticks of SilverSolder per job. Over the yr's this has amounted to a tidy 10-15odd Kg's of 20% Ag ...strictly desperation holdings though and piss-ant compared to your off-market stash ...well done!

R Powell (2/25/07; 11:59:32MT - usagold.com msg#: 152617)
Addition
Let's make that "the last TWO sentences"....

R Powell (2/25/07; 11:56:57MT - usagold.com msg#: 152616)
Government debt
http://wikipedia.org/wiki/U.S._public_debt
In response to some questions I asked of Flow5, I've found a little that might help. I believe we all agree that the amount of debt is a major factor in determining the comparitive strenght or weakness of the dollar. And, the POG is published (traded daily) in dollars.

"As of the end of 2006, the total U.S. public debt was $4.9 trillion. This does not include the money owed by states, corporations, or individuals, nor does it include the money owed to Social Security beneficiaries in the future. If intragovernment debt obligations are included, the debt figure rises to $8.6 trillion. In 2005 the public debt was 64.7% of GDP. According to the CIA's World Factbook, this meant that the U.S. public debt was the 35th largest in the world by percentage of GDP. In absolute value, it is easily the largest."

********

It is the last sentence that somewhat clarifies, for me, the "size" of government debt.
Fwiw, my opinion of the coming (pick any time frame) POG is higher, quite possibly much higher but I don't believe it will result from a currency meltdown of any sort resulting from debt. There are numerous other reasons for the declining purchasing power of a currency. Certainly this current debt situation would never have evolved under a gold backed currency...but, being pragmatic by nature, I believe, in practicality if not by choice, our + the world economy is operated with fiat currencies.
happy weekend...

Topaz (2/25/07; 11:41:23MT - usagold.com msg#: 152615)
alt Dollar Gold.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=
Sorry, meant to post a short-term (3 mo) version,
Try this!

Topaz (2/25/07; 11:37:20MT - usagold.com msg#: 152614)
Stage 2 of the Bull.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=
We've already had 4 Grand Cross Inflections this year ...Sayonara Paper, Hello Reality!

Topaz (2/25/07; 11:10:46MT - usagold.com msg#: 152613)
@flow5
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=
I'm enjoying your input Sir even though we are at odds when it comes to PoG's immediate destiny. Your commentary on the "reverse Neverland" that is our Fiat universe is clearly based on vast experience. Delivery month week 4 has historically been fertile ground for the shorts ...but imo "this time it's different" ;-)
I would however like to take you to task re. this matter of Dollar:Gold inverse relationship.
The accompanying Chart (you'll need to re-jig the scalings) confirms that in fact up until Dec/Jan '05 the PoG/Dollar relationship was firmly in place ...so much so that Gold was as good a proxy for the basket (alt-Dollar) as you could hope for.
Since then, we've had a genuine Stage one Bull develop, mature and blow-off. We are (or have been since Jan '07) now in a genuine St-2 and ALL the currencies are wilting under the pressure.
To keep harking back to a Dollar:Gold currency relationship clearly misses 2 yr's of history. Gold (or PaperGold more precisely) no more represents a "currency" now than PaperOil does.

all imho of course.

R Powell (2/25/07; 11:02:36MT - usagold.com msg#: 152612)
Flow5
Your words here...

"It is estimated that the federal deficits absorb more than 40% of all current savings."
********

Some questions please: by "federal deficits are you refering to both the domestic deficit + trade deficit?

Also, is this statement refering to the current yearly (say calendar 2006) assessment OR a longer total?

And how do you define "current savings"? Again a yearly total of what or a current percentage of (what?) total wages maybe or simply total "wealth" as defined as ??? Or are you stating that deficit interest payments consume 40% of federal revenues?

Also, I wonder how the current total government indebtedness compares to total economic production, say on a yearly basis. And, to give this perspective over time, how does the yearly total federal deficit (not trade deficit) compare to total economic production? Basically, if one person has a total yearly income of 20,000 then borrowing $1,000 to make ends meet is a 5% deficit. How does this differ from borrowing a trillion if total economic production is $20 trillion.

I'm NOT trying to disprove your warning of the danger in deficit spending. I am trying to get a numerical perspective of it. After all, capitalism does work only because capital is available to those who can profitably use it from those who are able to lend it. And for taking the loan risk, the lenders are rewarded with interest pay. Thus debt is an ongoing part of the system. And, yes, I know that war is NOT a productive use of money. But some definition of terms + perspective on the numbers as perhaps a percentage of total economic production would help me clarify the situation. TIA

slingshot (2/25/07; 11:00:17MT - usagold.com msg#: 152611)
Again
http://www.gold-eagle.com/editorials_05/ash022307.html
Not my day.

slingshot (2/25/07; 10:47:06MT - usagold.com msg#: 152609)
Can't see anymore
http://www.gold-eagle.com/editorials_05/chapmand022307.html
Try this.

slingshot (2/25/07; 10:38:27MT - usagold.com msg#: 152607)
Benson Hits It !
http://www.gold-eagle.com/editorials_05/benson022307.html
What we already know.
Slingshot-------<>

Goldilox (2/25/07; 09:12:44MT - usagold.com msg#: 152606)
Big spenders go for gold in new year rush
http://en.ce.cn/stock/marketnews/200702/24/t20070224_10490210.shtml
snip:

The gold rush is reaching fever pitch in major cities across the country during Spring Festival.
In Guangzhou, capital of South China's Guangdong Province, retail sales of gold products had reached 7.82 tons since February 10, Xinhua News Agency reported on Friday.

That amount of gold could cover 100 square meters in standard gold bars, it said.

Calculated at a price of 223 yuan ($29) per gram, customers in Guangzhou had spent a record high of 1.74 billion yuan ($224 million) on gold products in two weeks.

In Beijing, a special gold ornament named "lucky balls" has attracted much attention in recent days.

Local media reported that the biggest gold store in the capital, Beijing Caishikou Department Store, every day sells thousands of such one-gram small balls, which could either be worn on the wrist or around the neck.

Chen Sufen, a customer who had just bought two gold pig-shaped pendants as gifts for friends, told Xinhua that she believed gold could bring people good luck, and also be a good investment.

A symbol of wealth and good fortune, gold traditionally has a special place in the hearts of Chinese people.

Other than tradition, a combination of other factors, including the depreciation of the US dollar, and the surge in prices of a wide range of commodities, has also fuelled the latest gold rush.

Goldilox (2/25/07; 09:08:39MT - usagold.com msg#: 152605)
Strange dream
I had a very strange dream last night. I was in line for grocery checkout, ans the checker laid out my change. Then, in a flash, made some remark about coin shortages, and snatched back a $0.50 piece and replaced it with a strange looking coin that was non-circular, almost like a rounded Iron Cross.

I think I've been spending too much time thinking aout this stuff.

-G'lox

mikal (2/25/07; 08:57:08MT - usagold.com msg#: 152604)
Correct date
Article below I think is from today.

mikal (2/25/07; 08:51:43MT - usagold.com msg#: 152603)
(No Subject)
http://gold.seekingalpha.com/article/27963
Gold Knows the Score - Barry Ritholtz - SeekingAlpha -Feb5

Some good critical examination of the Fed and Bernanke
that is limited by the author's too conservative perspective and the short length of the article.

The sharp but shallow focus restricted to only some of the most obvious problems facing the Fed (and everyone else) in the economy, is still a good introduction to some of the reasons to have gold.

Clearly the intent of the Fed has been in sharp contrast to their stated goals of low inflation and stable employment.
So much of the economy has become dependent upon money aggregates outside of their control.

Nowhere in the Fed, outside of the latest hints, cautions and warnings, are their honest admissions of the truly
toxic nature of derivative and excess liquidity throughout the world of overvalued assets. Not accountable to anyone, they may never fess up to their role in unregulated, market-dominating finance, bubble formation and transfer, ubiquitous, promiscuous lending policies and geometrically leveraged speculation.

Chris Powell (2/25/07; 08:43:36MT - usagold.com msg#: 152602)
Citigroup urges Barrick to buy back its hedges
http://www.mineweb.net/mining_finance/628738.htm
MineWeb article Smiles45 was looking for,
from Feb. 14.

flow5 (2/25/07; 08:28:59MT - usagold.com msg#: 152601)
Twin Deficits
There are two storm clouds, no longer small and no longer on the horizon, that have the potential at some indeterminate future date to "wash" the U.S. and the Foreign-dollar "down the drain". They go by the name of "foreign trade deficit" and "domestic federal deficit". These deficits have an insidious, if not an incestuous, relationship. Positive interest rate differntials are significantly responsible for the dollar's exchange rate support. And an "overvalued" dollar in turn is the principal contributor to our burgeoning trade deficits.

Federal deficits of the present magnitude have a significant impact on interest rates. Market interest rates are determined by all of the forces operating through the supply of, and the demand for, loan-funds. Deficits obviously provide a net increase in the demand for loan-funds. The larger the deficit, the greater the demand. It is estimated that the federal deficits absorb more than 40% of all current savings. But the effect on interest rates is much greater than this percentage would suggest since only a fractional part of savnigs is available in the credit markets. Furthermore, the expectation of larger deficits has the present effect of reducing the supply of loan-funds. Lenders will not lend long-term except at higher rates.

The viability of the U.S. and Foreign-dollar as international units of account is threatened by the huge trade deficits. Given the present and prospective trade deficits, this situation is not likely to continue for long. Foreigners will simply be saturated with excess dollars.

The volume of dollar-denominated liquid assets held by foreigners is extremely large. Any significant repatriation of these funds, by reducing the supply of loan-funds, will force interest rates up - thus increaing the federal deficit and the burden of all new debt. These events alone could trigger a downswing in the economy resulting in more unemployment, more unemployment compensation, less tax reveenues and larger federal deficits. Truly a vicious cycle.

smiles45 (2/25/07; 06:49:15MT - usagold.com msg#: 152600)
Mitsui on Hedge Books for 2006
http://www.thebulliondesk.com/content/reports/tbd/mitsui/Q4-06-THB.pdf
Hello posters,
This is humerous in that Mitsui& Co has announced an accelerated reduction in gold hedges. I might remind you of a post I made several days ago regarding Sumitomo & Mitsui& Co (our Japanese alter ego bullion banks of Goldman,Sach & Citibank Eastcom) in the US. They have a ver pretty 38 page PDF file explaining how the mines ie: especially Barrick have reduced their hedges.
This is stated as a badge of courage rather than a degrading admittance of fighting the POG all the way up from $255+.
If this site will allow it I would like to present actual data from friday's open interest of Mitsui's own position on the TopCOM. SHORTS Longs Day by day trading
Mitsui & Co., Ltd. 39,265 0 39,265 0 4,320 0 2,060 0 4,768 0 6,045 0 6,483 0 15,589 0 The -0- represent any long positions. This a day by day report of activity with the total net shorts 39,265. Are they reprensenting hedgers or their own positions. Shorts in Japan are entered first the longs? Mines hedge long as well. A sudden shaft discovery that will takes moths to unfurl can allow mgt to buy hedge 10-50% potential if market conditions are favorable to it's financial statement.
An article in Mineweb reports Citibank strenously advises Barrick (the most heavily hedged after Anglo American mine)to buy back their hedges. The inference to me that it does't involve Barricks already future production, but we the US govt may have other "deep storage" plans for it. If I can find the MineWeb article I will post in haste./Peter

smiles45 (2/25/07; 03:14:19MT - usagold.com msg#: 152599)
COT Profits
http://financialsense.com/editorials/phillips/2007/0223.html
Comatose
The Commercials have a nice little sideline income. I checked my archives to see how much it actually was. The time frame varies for their huge one sided trades. Trades can be engineered in months or even in a couple of weeks.
As Mr.Jim Sinclair constantly harps that the randomness of the Hedge Fund computer triggered buying and selling onl adds to market volitity that works to the Commercials advantage. This is a strange parsitic relationship. Without the large fund buy oders the trade would have no one to take the other side of their sales. The same resoning applies to the covering of their trades which is determied when they decide to get out. Their are 10,000 hedge funds and gold is often used on one side of their carry trade positions. Just for fun I checked back for two years (all my other records were destroyed in a flood a few months ago during 4 consective typhoons)The last short position was Tues 2/23 and not covered yet:
2/23/07 177,653 6wks 1/07/07 83,884 104,000
12/08/06 125,384 8wks 10/13/06 77,038 48,000
5/02/06 177,689 7wks 6/27/06 113,656 64,000
12/20/05 197,558 12wks 3/21/05 138,507 63,000
10/14/05 227,556 4wks 11/14/05 163,368 64,000
8/15/05 201,411 5wks 9/21/05 152,116 49,000
6/24/05 153,405 4wks 7/22/05 90,557 63,000
5/06/05 212,262 12wks 2/08/05 67,765 155,000

In the year and 9 months above the Commercials took profits on trades of 50,000 contracs or more. There were scads of smaller trades under that plus many day trades as can by seen in daily volume figures. The eight positions above netted whopping profits on 610,000 contracts or 6.1 mil/oz.
The purpose of these trades is to put a paper cap on the POG without comitting any bullion. The daily physical demand grows higher.
In 1974-1980 bull the public ame in at abut $400. In about 30 days POG went to $875.The collapse back down to $500 was quick and many speculators lost out by buing the rally. This next dip may be your last sweet spot to buy or add physical. As we reach the old high or maybe $1,000 we could see a rush for bullion
The competitiveness of Central Banks will only increase as they hoard their own national production. No one needs of wants mor FRNs at this point./Peter

Gandalf the White (2/25/07; 00:07:43MT - usagold.com msg#: 152598)
TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$$ THE FEBRUARY 2007 "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$

FINAL OFFICIAL ENTRY LISTING

Listed in order of decreasing values !
----

$$$$ $2,007.0 $$$ Federal_Reserves (2/23/07; 12:37:29MT - usagold.com msg#: 152517)

$$$$ $1,250.0 $$$ Beamer (2/21/07; 23:42:07MT - usagold.com msg#: 152436)

$$$$ $1,000.0 $$$ contrarian (2/24/07; 20:01:13MT - usagold.com msg#: 152578)

$$$$ $785.0 $$$$ Silver Fox (2/24/07; 20:14:40MT - usagold.com msg#: 152580)

$$$$ $775.5 $$$$ Sprout (2/16/07; 18:42:09MT - usagold.com msg#: 152256)

$$$$ $742.0 $$$$ Caradoc (2/22/07; 21:41:15MT - usagold.com msg#: 152475)

**** $727.5 **** Thoreauly (2/17/07; 07:46:31MT - usagold.com msg#: 152267)

$$$$ $725.0 $$$$ Armageddon (2/22/07; 21:30:39MT - usagold.com msg#: 152473)

$$$$ $724.6 $$$$ Topaz (2/15/07; 04:55:38MT - usagold.com msg#: 152177)

$$$$ $718.0 $$$$ Peculium Aurum (2/23/07; 11:51:44MT - usagold.com msg#: 152512)

$$$$ $715.2 $$$$ Boxman (2/22/07; 18:16:35MT - usagold.com msg#: 152469)

$$$$ $711.7 $$$$ Tevye (2/21/07; 19:50:55MT - usagold.com msg#: 152424)

$$$$ $710.5 $$$$ Waverider (2/23/07; 19:53:12MT - usagold.com msg#: 152538)

$$$$ $708.8 $$$$ Placer Gold (2/23/07; 12:13:05MT - usagold.com msg#: 152514)

$$$$ $707.7 $$$$ Survivor (2/23/07; 15:49:05MT - usagold.com msg#: 152525)

$$$$ $705.2 $$$$ Rimh (2/23/07; 12:30:58MT - usagold.com msg#: 152516)

$$$$ $704.1 $$$$ The Hoople (2/24/07; 14:35:52MT - usagold.com msg#: 152573)

$$$$ $703.0 $$$$ Wky_Woodsman (2/24/07; 21:34:33MT - usagold.com msg#: 152588)

$$$$ $702.5 $$$$ beowulf + (2/24/07; 21:18:37MT - usagold.com msg#: 152586)

**** $701.7 **** goldpuppy (2/23/07; 00:33:51MT - usagold.com msg#: 152485)

$$$$ $701.5 $$$$ Pal (2/20/07; 09:17:37MT - usagold.com msg#: 152369)

$$$$ $701.0 $$$$ Tranquility Base (2/24/07; 20:56:48MT - usagold.com msg#: 152582)

$$$$ $700.0 $$$$ Titan (2/24/07; 19:03:42MT - usagold.com msg#: 152577)

$$$$ $699.6 $$$$ Max Rabbitz (2/24/07; 20:16:51MT - usagold.com msg#: 152581)

$$$$ $699.1 $$$$ 24karat (2/22/07; 22:14:38MT - usagold.com msg#: 152477)

$$$$ $698.8 $$$$ slingshot (2/23/07; 16:42:52MT - usagold.com msg#: 152526)

$$$$ $698.2 $$$$ mikal (2/24/07; 23:59:47MT - usagold.com msg#: 152597)

**** $698.0 **** Cometose (2/23/07; 15:30:31MT - usagold.com msg#: 152523)

$$$$ $697.3 $$$$ Ag-geek (2/24/07; 13:57:02MT - usagold.com msg#: 152572)

$$$$ $696,9 $$$$ Shanti (2/24/07; 07:59:24MT - usagold.com msg#: 152555)

$$$$ $696.7 $$$$ Black Blade (2/24/07; 00:56:38MT - usagold.com msg#: 152549)

$$$$ $696.5 $$$$ 7nomads (2/24/07; 21:15:35MT - usagold.com msg#: 152585)

$$$$ $696.2 $$$$ phil288 (2/23/07; 19:41:14MT - usagold.com msg#: 152536)

$$$$ $695.5 $$$$ Prius (2/23/07; 13:18:38MT - usagold.com msg#: 152520)

$$$$ $695.3 $$$$ YGM (2/23/07; 09:22:58MT - usagold.com msg#: 152494)

$$$$ $695.0 $$$$ Sundeck (2/16/07; 04:38:24MT - usagold.com msg#: 152221)

$$$$ $694.5 $$$$ Camel (2/24/07; 08:36:33MT - usagold.com msg#: 152557)

$$$$ $694.0 $$$$ milkhon (2/23/07; 16:57:44MT - usagold.com msg#: 152527)

$$$$ $693.9 $$$$ GoldenBear (2/23/07; 15:01:12MT - usagold.com msg#: 152522)

$$$$ $692.5 $$$$ Quickbeam (2/23/07; 12:22:49MT - usagold.com msg#: 152515)

$$$$ $692.1 $$$$ Sierra Madre (2/23/07; 11:12:16MT - usagold.com msg#: 152506)

$$$$ $691.2 $$$$ glockmaster19 (2/22/07; 16:35:32MT - usagold.com msg#: 152464)
$$$$ $691.1 $$$$ Tin Man (2/21/07; 20:08:52MT - usagold.com msg#: 152426)

$$$$ $690.1 $$$$ Goldendome (2/23/07; 22:55:15MT - usagold.com msg#: 152542)

$$$$ $689.0 $$$$ Rocky (2/23/07; 11:21:55MT - usagold.com msg#: 152507)

$$$$ $688.7 $$$$ Black Pearl (2/24/07; 23:14:54MT - usagold.com msg#: 152593)

$$$$ $688.0 $$$$ Goldilox (2/16/07; 11:26:32MT - usagold.com msg#: 152238)

$$$$ $687.8 $$$$ Lebieque (2/15/07; 03:55:18MT - usagold.com msg#: 152174)

$$$$ $686.9 $$$$ otish mountain (2/23/07; 17:20:44MT - usagold.com msg#: 152528)

$$$$ $686.0 $$$$ Clink! (2/23/07; 15:34:48MT - usagold.com msg#: 152524)

$$$$ $685.5 $$$$ Nathan Brazil (2/24/07; 21:52:47MT - usagold.com msg#: 152590)

$$$$ $685.0 $$$$ Toolie (2/15/07; 03:10:40MT - usagold.com msg#: 152170)

$$$$ $684.8 $$$$ Freedom (2/18/07; 13:37:59MT - usagold.com msg#: 152295)

$$$$ $684.6 $$$$ GoldSilverRatio (2/24/07; 11:04:16MT - usagold.com msg#: 152561)

$$$$ $683.5 $$$$ canamami (2/24/07; 23:36:15MT - usagold.com msg#: 152594)

$$$$ $682.4 $$$$ Wheelthru (2/20/07; 15:01:11MT - usagold.com msg#: 152382)

$$$$ $681.5 $$$$ Aureo Speedwagon (2/24/07; 20:04:34MT - usagold.com msg#: 152579)

$$$$ $680.5 $$$$ solosza (2/23/07; 18:18:02MT - usagold.com msg#: 152530)

$$$$ $680.0 $$$$ GOLD FINGER (2/23/07; 18:55:27MT - usagold.com msg#: 152533)

**** $678.0 **** Rook (2/17/07; 19:55:35MT - usagold.com msg#: 152278)

$$$ FRN677.7 $$$ Smeagol (2/22/07; 21:36:03MT - usagold.com msg#: 152474)

$$$$ $676.5 $$$$ pilgrims_gold (2/22/07; 16:47:36MT - usagold.com msg#: 152465)

$$$$ $675.1 $$$$ xylo (2/20/07; 13:21:27MT - usagold.com msg#: 152379)

$$$$ $673.5 $$$$ Lothar of the Hill People (2/17/07; 13:25:18MT - usagold.com msg#: 152271)

$$$$ $672.2 $$$$ Tuco (2/24/07; 16:26:31MT - usagold.com msg#: 152574)

**** $670.0 **** Liberty Head (2/17/07; 10:03:22MT - usagold.com msg#: 152270)

$$$$ $668.8 $$$$ R Powell (2/23/07; 19:22:48MT - usagold.com msg#: 152534)

$$$$ $666.6 $$$$ Minero (2/17/07; 07:39:45MT - usagold.com msg#: 152266)

$$$$ $663.8 $$$$ Flatliner (2/22/07; 23:02:49MT - usagold.com msg#: 152479)

$$$$ $662.5 $$$$ Henri (2/16/07; 11:02:33MT - usagold.com msg#: 152235)

$$$$ $662.1 $$$$ balzac (2/22/07; 09:35:46MT - usagold.com msg#: 152446)

$$$$ $658.0 $$$$ flow5 (2/15/07; 12:19:26MT - usagold.com msg#: 152184)

$$$$ $652.0 $$$$ cinksl4 (2/23/07; 21:30:59MT - usagold.com msg#: 152539)

$$$$ $647.1 $$$$ smiles45 (2/21/07; 21:26:01MT - usagold.com msg#: 152431)

===
NOW we awaite the results of the Wednesday Settlement !
GOOD LUCK ALL and thanks for making this POG Contest so interesting !

<;-)





ViewYesterday's Discussion.

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

Wednesday February 8
website support: sitemaster@usagold.com
Site Map - Privacy- Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved