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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...

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ARCHIVED DISCUSSION FROM 7/26/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

LimitUp (07/26/02; 23:38:03MT - usagold.com msg#: 81597)
GRATITUDE
I would like to thank the cabal for lower gold prices. I will take full advantage of this golden opportunity to make a major purchase from CPM. Thanks again, Yours truly, LimitUp

Black Blade (07/26/02; 23:24:41MT - usagold.com msg#: 81596)
Americans believe they are worse off - poll.
http://money.cnn.com/2002/07/26/pf/gallup/index.htm

Snippit:

NEW YORK (CNN/Money) - More Americans believe they are financially worse off now than they did a year ago, yet they remain hopeful about their future prospects, a new Gallup poll released Friday showed. The poll, conducted amid a slew of corporate accounting scandals, a slack economy and a tight job market, shows about 45 percent of Americans believe they are financially worse off now than they were a year ago, while 32 say their financial situation is better than a year ago. That's the lowest sentiment since February, 1992, when the country was battling a recession.

Black Blade: The Prez and Paul O�Neill say everything is hunky dory. Is it unpatriotic to not believe the government data? Hmmm�

Black Blade (07/26/02; 23:05:51MT - usagold.com msg#: 81595)
Hedging hurts our share price: Barrick
http://www.nationalpost.com/financialpost/story.html?id={82A2ADC7-7860-4872-A525-7C001537F776}
'Market misunderstands'

Snippit:

Barrick Gold Corp.'s chief executive admitted yesterday the miner's share price is being dragged down by its hedging program. But Randall Oliphant said the company has no plans to change its strategy and must do a better job explaining its scheme to investors. Barrick is the world's No. 2 gold miner but the biggest hedger. The company, which will sell half its production this year through its hedging scheme, has been a lightning rod for criticism from those who believe hedging has kept the price of gold artificially low.

Black Blade: And according to miningweb the hedge book is underwater: "The hedge trim is another concession to hedging antagonists and gold bulls, but the impact was concentrated in near-dated calls with very little impact on the spot-deferred programmes. That suggests there won't be any meaningful improvement in the mark-to-market value of the hedge book which has suffered a vicious $641 million swing in the last year, sinking to an unrealised negative $261 million."

Horatio (07/26/02; 23:02:31MT - usagold.com msg#: 81594)
Freedom,Freedom,Freedom
Whats going to happin when the Dems get control of the White House and the "Homeland Security" is still in place?
Both Partys are in a scheme to get rid of the "Bill of Rights".If it were done by the Dems the Republicans would raise Holy Hell.It had to be done by the Republicans in the name of Security.A Nation that gives up its Freedom for "Security" deserves neither.
Why is it the Government needs to diminish citizens freedom in order protect the citizens?Why don't they just clamp down on the Borders and Visas the Government issues.The Government is the problem !Not the citizens freedom.Do your job Damm it!!Not find excuses to grab POWER.

Carl H (07/26/02; 23:00:03MT - usagold.com msg#: 81593)
Silver
It has been a brutal week in the silver stocks.

I would like to ask the question: Can anyone find any fundamental change to the silver market this week other than Bush signing the bill allowing the mint to buy silver?

I can't, so I think I'll go to sleep -- and I'll probably sleep better than a lot of people who hold "respected" blue chips like JPM, C, Lucent, IBM, etc, etc, so forth and so on.

Horatio (07/26/02; 22:46:48MT - usagold.com msg#: 81592)
Cash
I once had 10,000 in cash,and in the 1987 crash I had my first margin call for $250,000 and a second for an additional $150,00.I was able to forstall bankruptsy with $10,000 cash and bought enough time to get a bounce back in the market.The $10,000 enabled me to pay off $850,000 in margin debt in three months.It was nothing short of a miracle.Ever since I have always kept an amount of cash available for opportunity and unforseen events.This is good advice......
I withdrew and additional $54,000 from my account and paid off my mortgage .In short $10,000 cash enabled me to buy some time and I paid off $900,000 in debt in 3 months.I have been debt free since then.I pay cash for Gold & Silver stocks ,use no margin ,buy no options.Opportunity affords me the leverage from time to time to buy in crisis when prices decline below intrinsic values ,thats my leverage,NOT DEBT>
With options, time is always running out,with margin debt you are at the mercy of stock manipulators.I once had a friend on Wall st that told me "They are running the Turkeys to the other side of the barn yard,and then they will run them back"Don't be a Turkey(a very dumb animal)stay out of debt.!!

Black Blade (07/26/02; 22:38:16MT - usagold.com msg#: 81591)
Citigroup's Reputation At Risk
http://www.msnbc.com/news/785894.asp?0si

Snippit:

IT FACES probes by federal and Manhattan prosecutors as well as a civil investigation by the Securities and Exchange Commission and a slew of lawsuits over its ties to Enron Corp. Meanwhile, securities regulators are considering disciplinary action against one of its most prominent equity analysts, Jack Grubman, who is also being investigated by the New York State attorney general. And Citigroup is squaring off against the Federal Trade Commission, which alleges that its consumer-finance business � the largest in the country � has employed deceptive practices.

Another famous financier whose reputation has been nicked is Robert Rubin. He joined Citigroup in 1999 as chairman of its executive committee after stepping down as Bill Clinton's Treasury Secretary. Last November, as Citigroup was trying to stave off Enron's bankruptcy-court filing, Mr. Rubin made a controversial call to Treasury Undersecretary Peter Fisher. The call added fuel to accusations that Enron and its allies improperly wielded influence in Washington. Mr. Rubin hasn't disputed the account.

Black Blade: What reputation? I think that it is time to reconsider the repeal of the Glass-Steagall Act. Ever since the repeal of Glass-Steagall it has been a series of scandals. And how about that former Treasury Secretary Rubin � can you say Teapot Dome Scandal? I knew you could.

a nation of one (07/26/02; 22:34:28MT - usagold.com msg#: 81590)
Mr. Morgan
The people there now talk among themselves and decide, like a committee. The old man did not do that. He worked in a trance, fathoming the depths of his soul. That is the difference between yesterday, when America was being made, and today, when it is being cut up and placed on the shelves.

Black Blade (07/26/02; 22:19:32MT - usagold.com msg#: 81589)
Weak dollar an aid to exporters
http://www.chron.com/cs/CDA/story.hts/business/1509236

Snippit:

Barton Smith, an economist who directs the University of Houston's Center for Regional Forecasting, said that while a weaker dollar does help manufacturers and exporters, he also sees the decline as necessary to help spur on the nation's economic recovery. "I have been strongly arguing that this was one of the prerequisites for the recovery to be real, that the dollar had to correct itself," Smith said. "American manufacturers can't survive a dollar that was as high as it was a few months ago." Right now, the U.S. recovery is too dependent on the consumer and real estate markets. It needs the manufacturing sector to participate, he said. Smith, the University of Houston economist, said one fundamental economic change is that the United States is becoming a deficit nation again. The Bush administration is forecasting a $150 billion deficit for the fiscal year, but Smith believes it will exceed $200 billion. "That is a lot of debt that has to be peddled, and a good part of it will be peddled abroad," he said.

Black Blade: Damn straight! The US has been posting record current account deficits and growing trade deficits. This is unsustainable and a weaker US dollar is a must or the US economy will collapse. The US must become competitive in the global economy and that is the driving force of the "Currency War". So far the US is losing because Sec. O�Neill is hell bent on a strong dollar policy implemented by the previous corrupt administration.

Black Blade (07/26/02; 22:01:13MT - usagold.com msg#: 81588)
Economic Data Hint of Worries
http://www.accessatlanta.com/ajc/epaper/editions/today/business_d304ae0a30c4d15a0087.html

Snippit:

"The United States should now be prepared for one of the deepest and most intractable recessions of the post--World War II period," said economist Wynne Godley, a distinguished scholar at the Levy Institute of Bard College in Annandale-on-Hudson, N.Y. More worrisome is the drop in durable goods. That could be a one-month aberration --- even a statistical hiccup. But if it is for real, trouble will likely follow. Consumers seem stretched to the limit, so unless the government boosts spending, growth may be up to business, which was the first economic factor thrown into reverse in 2000. Cuts in company budgets mean fewer projects funded, which means less money in the economy and less hiring. Dropping demand for big-ticket items hints that the whipsaw of Wall Street stocks is having a real-world effect, Dhawan said. "It means that the crisis of confidence is beginning to impact the boardroom."

Black Blade: The system is broken. It has fallen and can't get up. Many economists are looking at Wednesday's rally on the markets as proof of a "bottom". Well guess what � the DOW only inched up about 74 points for the week. That is far from a turnaround in the stock market. The rapid drop this week in gold prices from last week's $324 (actually spiked to $327) and settled lower to currently above $304 in after hours trading was due to a liquidity crisis where every and anything that can be rapidly sold must be sold � and that includes gold. Several hedge funds and at least one major US investment bank was caught on the wrong side of some bets on the market (both stocks and currencies derivatives). The rally this week caused panic selling. Now these players are licking their wounds while at the same offering a new lower entry point for establishing new precious metals positions. A report released yesterday mentions that gold demand is still supportive of physical gold in Asia. Today gold prices are lower and it would not be unreasonable to assume that physical accumulation will increase in Asia as has been the case with price dips over the last couple of weeks. Now that the Wall Street shorts have unzipped their fly, they have to deliver results in the form of increased corporate earnings, improved economic data, and more impressive stock market rallies. That's a pretty tall order.

Gauntlet-Runner2("GR2") (07/26/02; 21:56:19MT - usagold.com msg#: 81587)
Saddest day for goalstocks, many goalbugs wiped out
http://post.messages.yahoo.com/bbs?.mm=FN&action=m&board=1601028319&tid=drooy&sid=1601028319&mid=45176&n=1
Musical chairs for a song fit for selling. When the music stops who will have anything. We can blame the market makers but the paper goal bugs pumped the stocks up themselves. The real goldbugs had gold and lacked the paper profits. Now who is quite and who has a smile though a serious one? I call them "goalstocks" because that is all they are. You have a goal to achieve something and it is all transitory and subject to outside influences beyond our control. Physical gold on the other hand can be in your hand and has mass and weight and unlimited demand overseas where we buy most of our products from. They know what gold is, not the Joe 6 Pack who believes what he reads in the papers. There's that word again, the "P" word, (paper). Links with procrastination and pandering and pathetic portfolio of pumped up P/E ratios. Gold is insurance.

Golden Bear (07/26/02; 21:37:57MT - usagold.com msg#: 81586)
Summary of JPM's near meltdown... by Adam Hamilton.
http://www.zealllc.com/2002/jpmcrash.htm
Snippit:

"....On Tuesday July 23rd, JPM?s stock plummeted by an unbelievable 18.1% in a single day!� It is hard to overestimate the magnitude of this devastating technical breakdown in the House of Morgan.� We are not talking about some fly-by-night dot-com company here, but the flagship US bank which has long been listed as a proud member of the venerable Dow 30 club.

As the graph below vividly illustrates, prior to its fleeting bear market reaction rally in the middle of the week, JPM had hemorrhaged a gut wrenching 66.8% from its all-time high only a couple years earlier!� Does anyone else find it disturbing that an elite American bank?s stock is behaving like some of the fallen NASDAQ market darlings?� What do the sellers know?...."

mikal (07/26/02; 21:34:15MT - usagold.com msg#: 81585)
Welcome Lady Sounding Board
"...the manipulators are getting more desperate". I agree and I think most investors are not fooled. You deserve to be commended for your patience and efforts to persuade family. Looking forward to more of your insights.

sector (07/26/02; 21:11:37MT - usagold.com msg#: 81584)
...Independent of gold...
All that follows is mine and not at Prudentbear
eom

BTW:

Welcome aboard Lady SoundingBoard. I too, thoroughly enjoyed your personal anecdotes.

Being "Nuts" is a common affliction amoung gold bugs.

a nation of one (07/26/02; 21:11:21MT - usagold.com msg#: 81583)
(No Subject)
I have heard that bull markets climb a wall of worry. Bear markets, evidently, slide down a bannister of shock and glee.

silvester (07/26/02; 21:02:36MT - usagold.com msg#: 81582)
Butler sellin his silver

Thought I'd become numb to shocking news with all the teaching received here over the years. Just logged on this evening and first thing I read was Butler had sold his stash. Had'nt had a beer yet but almost spewed my tea all over the screen. Not funny guys. Not funny at all.

mikal (07/26/02; 21:02:12MT - usagold.com msg#: 81581)
@RAP
Price goes up every night lately, yes. Before the Asian and Australian trading begins, you see the effects of the afterhours, electronic access trading. Somebody tell those 2 worrywarts about Rich's Butler joke before THEIR wives sell 234 tons when their back is turned...

sector (07/26/02; 21:00:08MT - usagold.com msg#: 81580)
JPM is Dirty...Too Close to The Federal Reserve
http://www.prudentbear.com
From Thursday's American Banker (Rob Garver):

"...�They (J.P. Morgan Chase and Citigroup executives testifying before the Senate subcommittee on investigations) could not have done any worse,� said one Washington insider... �Their current message is totally unbelievable: �We are not accountable for the accounting treatment here, it is not our job.� That's as believable as 2 plus 2 equals 5...They have just guaranteed that they made a bad story worse. There will be more questions asked, more documents subpoenaed. It will be drip, drip, drip of information. Sound familiar? It's called �scandal� in Washington. The only way to beat it is to get out there and tell the truth.�"

"In a moment reminiscent of 1994's tobacco industry hearings, when executives were forced to swear that that they did not believe cigarettes are addictive, a trio of J.P. Morgan Chase executives told the subcommittee Tuesday that their bank had never had control of Mahonia, a controversial partnership implicated in the collapse of Enron... If the bank asked its outside attorneys to create a partnership called Mahonia; if all of Mahonia's legal fees were paid by the bank; if the partnership never did any deals that didn't involve the bank; and if bank executives discussed ways to make sure that Mahonia �seems independent,� could they reasonable claim that the bank did not control Mahonia? One by one the three Morgan Chase executives...insisted that despite its ties to J.P. Morgan, the Channel Islands-based Mahonia entered into prepaid energy contracts with Enron of its own accord, and could have declined to enter those contracts if its board of directors so chose."
[�]

Representatives from Citigroup then followed those from J.P. Morgan. "They faced equally tough questioning from Sen. Levin, who rolled out similar circumstantial evidence indicating that Delta Energy Corp., a special-purpose vehicle similar to Manhonia, was actually under Citigroup's control. In the undisputed low point of the hearing, a Citigroup executive was reduced to answering Sen. Levin's charges by claiming that whether they were correct depended on how the word �deceptive� is defined."

Independent of gold, JPM is in the crosshairs.

As for gold's current attack, we can draw a few conclusions (1) this overt manipulation was not the result of a carefully planned tactic...it was a survival lash out by a mortally wounded beast (2) the gold fuel required to trash gold in this go-round was formidable (3) the duration of this downdraft is therefore limited and (4) the overseas allies of the Fed are not under orders [No written documents] and may act in their own best interests if they sense the Fed is in trouble.

The banking industry as a whole on both sides of the Atlantic is in jeopardy because of JPM's stupendous derivative monster. [Adam Hamilton rightfully describes JPM as " A financial arms dealer in a dirty war against the American Investor"]. The counter parties to JPMs myriad derivatives cannot be sleeping soundly...they are most likely preparing to exit their contracts some no doubt will claim their contracts are null because JPM acted in a substantially fraudulent manner hiding the obvious counter party risk. Counter parties are entitled to know the heath of the issuer...JPM certainly isn't healthy.

Litigants will win against JPM and extract many tens of billions in compensation for shareholders and employees ending JPM as a financial entity as surely as Enron has ended.

This is the future of the US financial system. It is a one-way trip to financial Armageddon.

The temporary suppression of the gold price represents an opportunity...an opportunity that smart investors won't miss. Even IF the cabal has managed to secretly rescind the Washington Agreement, the already mind boggling 26,000 tonnes of BIS gold loans puts them close to being tapped out. Moreover, as the fury of the American people rises [This week is but a rustle] the cabal will surely get even more nervous and less likely to cooperate with the Fed in it's Dirty Business.

Finally, at some point running up to the election the President may have to make a painful decision...to tell the truth and hope for the best.

His ability to blame Clinton is all but squandered.

Carl H (07/26/02; 20:58:05MT - usagold.com msg#: 81579)
@Paper Avalance
Yes, you've had one too many beers -- it was a joke. And a good one at that.

Canuck (07/26/02; 20:53:52MT - usagold.com msg#: 81578)
What a lovely week................
if you sold on Monday and bought today, otherwise it was a full blown piece of shit.

Pretty quiet around here, you would swear gold dropped $22 for the week or shares dropped 30 or 40%. They say the leverage of stock vs. bullion is some 5:1 so -8% on bullion and -40% on shares, mathematically perfect.

So let me get this straight, hedge funds were selling anything of value, including gold to fund margin requirements due to bets gone sour from a rising stock market. That is a possibility, maybe a probability. So what happens if the SM's go back up next week?

I guess most missed my message the other night. Gold's price is dictated by 2 things and 2 things only.

1)Dollars per ounce, ie $300=1 oz. If the unit 'dollar' gets smaller it takes more of them to acquire same said ounce.
2)Demand for gold increases across the board, against all currencies. If the desire for say, tulips, increases uniformly against a basket of currencies its price will rise.

Gold was beaten for 2 reasons this week, the dollar strengthened and gold the commodity, weakened. Why?

On account 1) it is now perceived that other currencies and economies will deteriorate equally and/or perhaps faster than the US. Thus the dollar is strengthening. Short term/long term is a huge guess. On account 2) economies are shrinking, demand for gold the commodity is falling. Witness the CRB, it will tell the story.

Forget the hocus-pocus, mumbo-jumbo speculative heresay. A wise man said don't listen to what they say, watch what they do.

aussie (07/26/02; 20:43:03MT - usagold.com msg#: 81577)
H.D. for Mr. H.C.K. Liu & ? for Paper Avalanche
Hey there Paper Avalanche, - I found Liu's article a heavy read too, - last night I spent a good time digesting it, he has certainly done his homework,- maybe it was part of his thesis.

Am I missing something about Butler. And could you please let me in on the secret of who the heck is Ted Butler when he is home?

Cheers.

RAP (07/26/02; 20:33:34MT - usagold.com msg#: 81576)
Gold going up on Friday night?
http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=s&w=5&t=l&a=2
Anyone happen to notice spot has gone up $2 since the close?

Paper Avalanche (07/26/02; 20:11:13MT - usagold.com msg#: 81575)
Just amazed Rich at how you found the information on Butler selling his stash of silver
Just amazed Rich at how you found the information on Butler selling his stash of silver

WTF?

Have I missed something? Ted Butler has abandonded silver?

Please tell me that I have had too many beers (I won't be offended)

(please insert your own explative for the F in this acronym)

aussie (07/26/02; 19:45:56MT - usagold.com msg#: 81574)
(No Subject)
Cavan Man, your question no. 3 - in reference to the power of 'powers' has also bothered me. From what I have been able to fathom, the 'powers' cannot be underestimated - just like slippery poker players, just wondering what card they are going to pull out of their sleeve next.

Thanks for your post Sounding Board, I also enjoyed reading your background and best of luck with your investments. I had a phone call from a stockbroker yesterday suggesting there were some very good 'buying opportunities' to be taken advantage of, - have to say, it was a conversation I least expected in a week that has been full of doom and gloom. Goes to show that there must still be optimists out there besides those we are exposed to via the media

Just amazed Rich at how you found the information on Butler selling his stash of silver. Any clues as to why?

Cheers.

Paper Avalanche (07/26/02; 19:13:06MT - usagold.com msg#: 81573)
@ sector
thank you for the asia times article. I have a tremendous amount of learning to do in order to be able to properly digest the many academic / ideological / economic / historical facts and notions posited.

This dude has a keen sense of how the rest of the world views the dollar.

Thanks.

Paper Avalanche

Paper Avalanche (07/26/02; 19:05:43MT - usagold.com msg#: 81572)
Trust
http://www.foxnews.com/story/0,2933,58834,00.html
I present the following to the fine participants on this forum to let you know what is now passing as qualified financial advice on the Internet (an exceprt from the linked story):

"I've written about this before, pointing out that government leaders will move quickly to fix the crisis of confidence on Wall Street because they have to: our entire financial system is based on trust."

Trust.

Trust.

When the SHTF would you rather have trust or physical gold?

I prefer the physical in hand.

Paper Avalanche

DOWNUNDER (07/26/02; 18:51:07MT - usagold.com msg#: 81571)
@ YGM - - RE NEWSPAPER ADS FOR GATA
A belated thank you for your reply (354) to my post(321)on 24th July re " Not much point saying the same thing over & over to the converted ---a concerted mainstream ad campaign should be initiated ASAP"

I have 2 days of reading to catch up with at USA Gold but wanted to get this reply back now to acknowledge your post.I hope to see comments from others as well re this subject as we MUST get the message out to the sheeple as an alternative investment.

I saw Bill Murphys C-SPAN interview yesterday & I must say it was excellent.He covered a lot of issues & came across much better than I would have expected.I highly recommend this to ALL- -about 1/2 hour.Link as follows -middle of page

http://www.cspan.org/journal/index.asp?Recordset17_Next=Next&Recordset17_Action=++&Recordset17_Position=FIL%3AORD%3AABS%3A11KEY%3APAR%3A&Recordset17_Looper1_State=10

** re jobs --perhaps in 12 mths when we're in the middle of a full on Gold bull - - -yehaaaaaaaaaaaaa :)

USAGOLD (07/26/02; 18:33:49MT - usagold.com msg#: 81570)
Discussion. . .
http://www.usagold.com/DailyQuotes.html
I would like to emphasize these comments from our own Mr. Jon H. Warner, aka Black Blade:

"Comment: Rumors are running rampant in the gold pits today. One rumor that has gained currency is that several hedge funds are selling gold (and anything of value) to meet margin calls on short positions resulting from Wednesday's stock market run up. Another is that at least one and perhaps more major U.S. investment banks are selling bullion to shore up their books and to address liquidity concerns. One bank (JP Morgan Chase) was rumored to be in the midst of a liquidity crisis though the bank in a later press release downplayed the rumor. The recent sell off in gold does provide another opportunity to seek an entry point for accumulating physical metal as portfolio insurance. The fundamentals of the stock market still remain very negative and the bear market may be far from the so-called 'bottom.'"

MK: Ther best gold report. Period. End of story. Linked above. The one the pros read so they know what to write about.

- - - - - - - -

Let me provide some perspective. The president said that the stock market was going to go up. He was the first president in history to make so bold a prediction -- with the exception of possibly Herbert Hoover. It broke a long tradition. And when the President says the stock market is going to go up, it's going to by God go up. Wall Street players -- in a veriitable tizzy -- met with each other and the Washington crowd trying to save the financial system. The stock market one day after the round of meeting and two days after the presidential pronouncement staged a 500 point rally. In recent days the euro went below parity as the dollar clawed its way back -- a stratagem employed to draw money back into the U.S. stock market. Gold tanked. But what is really going on? Does the public really believed anything has changed after this monumental and extraordinary effort? The stock market has started to sputter again. Gold demand hasn't lessened a bit -- volumes are soaring in the United States. I don't think anyone believe that the euro downside correction is anything close to a trend. And does anyone believe that the Bush administration is truly committed to the strong dollar policy? All we've seen is a bunch of politicians and Wall Street spokesmen scurrying about obviously trying to make all of us believe that's everything is going to be OK in the morning. So, now. . . .who'd going to believe it?

Are the American people to believe that the corporate scandals have become now more or less benign? Is the dollar any sounder with the word getting out on the budget and trade deficits than the day before all this scurrying about? Do the Wall Street insiders really believe, like they did in 1929, that its all a matter of the Secretary of the Treasury putting the right spin on this mess?

Please. . . .

I view this as all temporary. The real trend is about to reassert itself with a vengeance.

- - - - - - - - - - - - - - - - - - -

On Sinclair's comments: I always read Sinclair. I too believe that its not the Fed at the center of these operations but the banks. However, we have to keep in mind that the Fed is a creature of the banks and not the other way around. I still cannot believe the awesome silence emanating from the Federal Reserve. Where's Allen? And what does he really think? My guess is that he has already bailed out Morgan Chase and maybe Citigroup with easy money at the discount window. But how much is enough? When you're dropping water one drop at a time into the inferno, can you seriously believe that its going to make a difference. Never should have put your blessing on derivatives, Allen. It's going to come back to haunt you.

- - - - - - - - - - - - - - - - -

Miner: As the price drops, the physical buyers come in. Demand in the United States is very strong and the bullion banks hammering the price is another attempt to drive the ordinary (and generally uninformed buyer) out of the market. It won't work. If our volumes at USAGOLD are any indicator, the exact opposite is occurring. The shorts know that this is a good time of year to dump the price because the monsoons kill Indian buying, Christmas jewelry manufacture doesn't kick in for another month or two and the Europeans and Americans are more interested in the beach, gold, fishing and family time, than they are the markets. The seasonal charts show a lull this time of year traditionally. So I see this all as an interlude. It just so happens that the timing was right for the paper hangers. Their markets were unravelling and gold was an easy target this July. With stocks on the ropes, they certainly don't want money going to gold that would serve a better purpose in the bond market -- especially in light of the government's $400 trillion year over year addition to the national debt. We'll see what happens as these low prices work their way into the physical market. My guess is that someone is going to have to make some heavy deliveries in the weeks to come and that will wreak havoc with the shorts. Watch for proof of this phenomena in gold interest rates. NOW IS THE TIME TO BUY!!! Gold won't be defeated here -- not in this environment. . . .you can take that to the bank.

misetich (07/26/02; 18:14:00MT - usagold.com msg#: 81569)
Reality Check: Chicago Purchasers Report Renewed Econ Jitters Jul 26 / 8:31 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1027686660000&sn=1&banner=mainwire
Snip:
By Gary Rosenberger

NEW YORK, July 26 (MktNews) - Corporate chicanery and treacherous
financial markets are fueling fears of a potential reversal in Chicago's
manufacturing economy, which has struggled to rebound in recent months,
Chicago-area purchasers say.

Interviews with Chicago purchasers suggest upcoming data will
exaggerate the dropoff in business activity, skewed downward by a
surfeit of negative news coverage about the economy on top of a seasonal
slowing typical to the Midwest.

A company chief said business leaders are "freaked" by the behavior
of stock markets and are becoming less certain about a recovery in the
manufacturing economy.
...................
Michelini also noted that commodity prices are contained, with the
exception of steel. Steel prices are rising in the U.S. and Mexico, and
suppliers are having to absorb the increases, as yet unable to pass them
on to customers.
................
Joseph Romanowski, president of Machinery Systems, Inc., a machine
tool distributor in Schaumburg, Illinois, is downcast about the regional
manufacturing economy, while harboring hopes for a mild recovery ahead.

"We're seeing ever so slight hints about a recovery among export
industries," he said. "Our Wisconsin market is more of an export market
than Illinois, and we're seeing some movement there."
................
"I belong to a CEO group and almost everybody is freaked right now.
They're all wondering how many more shoes will fall on the accounting
issue."

In his last meeting of CEOs, sentiment was mainly glum. "There's
some anxiety and fear. I don't see a high level of confidence," he said.
................
Melind senses that most are not sharing his good providence at
present. "I get a lot of calls from sales reps - they're dying for work.
..................
Editor's Note: Reality Check stories survey sentiment among
business people and their trade associations. They are intended to
complement and anticipate economic data and to provide a sounding into
specific sectors of the U.S. economy.
***MARKET NEWS INTERNATIONAL NEW YORK 212 669 6430***
[TOPICS: MAURC$,M$U$$$]
....................

Misetich

It appears that the US economy jobless recovery is continuing at an anemic pace-

It is interesting to note, not withstanding the recent Euphoric outburst from Microsoft Gates on increased R&D spending and hirings, CEO's remain unconvinced of a recovery, that Greenspan, O'Neil & Bush try desperately to portray.

The dislocation of economic growth perception between government and business continues. Thus far CEO's have had the better read (no surprising). So it appears that administration is grasping at straws and pushing on a string.

Got gold?

R Powell (07/26/02; 17:59:12MT - usagold.com msg#: 81568)
Technical notes
Some technical traders say that price gaps have to be filled. Others say this is not so. Given enough time, I'd guess that nearly all of them are.

Today POG filled an old gap just above the $300 level. There is now only one gap (to the best of my limited knowledge) remaining. It is a recent gap created last Tuesday when POG gaped down so this is an overhead gap between 320 and 322.

Likewise, POS left a gap between 501 and 504 at the same time. I didn't see any below the present level. However, silver dropping below the 475-480 level was not a good sign. Because every transaction requires both a buy and a sell, in equal amounts, I've never really understood what is meant when calling a market oversold or overbought but I'll bet that someone will say that silver adjusted today from it's previous overbought posture. Are we now oversold?
With the last downside POG gap filled today, there will be "buy" recommendations from most market analysts. After this past week, we'll probably find the speculative funds have severely lowered their long position and the so-called commercials have lowered their shorts (short positions, that is). That's about all I know of technical stuff. Any other insights?
Yes, I do buy on the dips. This was a big one so I bought twice.
It's Friday!
Happy weekend
Rich

misetich (07/26/02; 17:55:01MT - usagold.com msg#: 81567)
NY FX: Adjustments in Dlr, Gold Bring Memories of April Jul 26 / 15:42 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1027712520000&sn=1&banner=mainwire
Snip:

By Vicki Schmelzer

NEW YORK (MktNews) - The adjustments seen this week in currency
and gold markets are bringing a sense of deja-vu and memories of April
2002.

Dollar-Canada soared this week from lows Monday near C$1.5412 to
test highs Wednesday near C$1.5958 before stabilizing near $1.5843.

The last time dollar-Canada traded on a C$1.5800 or C$1.5900 handle
was in April when the pair was on a downward trajectory from levels
above C$1.6000 en route to the June 28 lows near C$1.5032.

Traders attributed some of the loonie's weakness to position
unwinds following Standard and Poor's announcement a few weeks ago that
it would replace the seven non-U.S. companies in the S&P 500 with seven
U.S. companies after the close of trading on July 19.

The seven non-U.S. companies consist of two European and five
Canadian companies, the S&P text said.

As the Canadian dollar weakened later in the week through its
200-day moving average vs. the U.S. dollar at C$1.5730/35, black-box
type and hedge fund accounts triggered stop-loss dollar-Canada buy
orders which catapulted dollar-Canada to the week's highs.

Gold also took a pounding this week as longer term players
continued to bail out of the precious metal.

Ken Landon, senior currency strategist at Deutsche Bank in Tokyo,
said one positive sign for the dollar in recent sessions has been the
large drop in the price of gold, which fell from around $324.00 on
Monday to lows just over $300.00 Friday.

"If gold continues to decline and breaks below, say, $300 per
ounce, then the dollar could see a more substantial period of
consolidation" after its recent selloff, he said.

Gold has its detractors but Landon said that gold has kept its
purchasing power over decades and centuries and also gold prices have
been soaring this year.

He said investors have been fleeing paper currencies, in particular
the dollar, and looking for an asset that does not lose its value
despite the actions of governments.

"A continued decline in gold, although not likely, would suggest
that investors are becoming less concerned with holding financial
assets, which in turn could signal a possible upturn in the battered
dollar and equities," Landon added.

Gold is presently trading at $302.50 per ounce, The precious metal
has not traded below the $300.00 level since mid-April.

The move out of commodity currencies such as Aussie and Canada, as
well as gold in recent sessions, has been attracting attention, since
the rally in both of these currency pairs anticipated the euro and yen
rallies that later followed.

As a point of comparison, the euro-dollar closed at $0.8903 and
dollar-yen at Y130.69 on April 17, a far cry from present levels at
$0.9875 and Y119.05.

Traders are reluctant to suggest that U.S. equities or the
greenback are bottoming, leaning more to the idea of a short-term
upward correction instead.

Doug York, senior vice president/co-head of trading at Campbell and
Co., in Towson, Maryland, said at the moment "risk aversion is high and
many are heading to the hills."

He expects the market to return to a lower dollar trend, once this
consolidation period is over.

"I remain medium-term dollar bearish with $1.0600-$1.1100 targets
for end of the third quarter and fourth quarter respectively," York
said.

He warned, however, that the move will be "very unsexy", with a
"slow grind vs. a massive dollar sell-off."

In the short-term, traders continue to fret over the euro's weak
tone vs the dollar, especially given a growing pile of eurozone
corporate governance woes that are coming on the radar screen.

The euro-dollar is holding at $0.9875 on Friday afternoon, just
over the lows seen on Tuesday at $0.9845/50.

A decisive break below $0.9850, is likely to trigger additional
stop-loss euro-dollar sell orders, traders said.

If the corporate client bids that have been bandied about near
$0.9800 fail to materialize, the euro-dollar may be heading for a test
of the July 5 lows near $0.9718 and below, they added.

As optimistic as some market players are beginning to sound about
the dollar and U.S. stocks, ("I think the U.S. economy is still ticking"
"People know it won't fall for ever"), the realists continue to prevail.

"The market is really fragile," one trader observed.
--Vicki Schmelzer, phone (212)669-6438;e-mail vschmelzer@marketnews.com
[TOPICS:M$$FX$,M$C$$$]

Misetich

The article is for subscribers - its being posted in its entirity for educational and discussion purposes only.

misetich (07/26/02; 16:37:55MT - usagold.com msg#: 81566)
Bush to hold economic forum Aug 13 in Texas
http://www.afxpress.com/afxpress2/afx/bn211037.xml.html
Snip:
WASHINGTON (AFX) - President George Bush will host a forum on the US economy in Texas Aug 13 to "discuss the fundamentals" of the US economy and steps to increase growth, said White House press secretary Ari Fleischer.

The forum in Waco, TX, "will bring together government policy-makers, small investors, small-business owners, industry experts, workers, business ethicists, union members, corporate executives, economists, business students and others," said Fleischer in a press briefing.

The aim is to "discuss the fundamentals in the American economy and to talk about the president's agenda to increase growth for the future," he added.

Misetich

Look at the 'timing' - August 13 with August 14 being the "kick-off or kick start" to the new and improved corporate reporting

What a farce!

Creditability has been LOST, as the money has disappeared. Do you think investors will pour in the "new and improved financial reporting scam?" As it is a scam, since little changes have been made to rectify the current reporting anomolies.

Have "pro-forma earnings" reporting been eliminated - NO!
Have changes been made to GAAP? NO!
Are options expensed - NO!

The more and more people need to be reassured that everything is OK the more suspicion will be aroused - as it is being broadcasted to WHOLE ECONOMY -

Got gold?

misetich (07/26/02; 16:25:03MT - usagold.com msg#: 81565)
Merrill congressional hearing to focus on 'troubling' deals with Enron
http://www.ananova.com/business/story/sm_638036.html?menu=
Snip:

A US congressional panel investigating secretive financial deals between several Wall Street banks and Enron Corp confirmed it will hold a hearing Tuesday to probe 'troubling actions' by Merrill Lynch & Co Inc that helped Enron inflate its financial position.

Merrill senior vice president and president of international private clients, Kelly Martin, and Merrill investment bankers Robert Furst and Schuyler Tilney have been invited to testify before the Senate Permanent Subcommittee on Investigations on Tuesday morning.

The panel is probing Merrill's banking relationship with Enron which it describes as "troubling actions...that have resulted in misleading accounting...(and) compromised investment ratings."

"It appears that Merrill Lynch, like other financial institutions, knowingly participated in deals that were used to make Enron's financial position appear more robust than it actually was," subcommittee member Senator Susan Collins said in a statement.

Subcommittee chairman, Carl Levin, said "without the support and assistance of major financial institutions, Enron could not have engaged in the extent of the deceptions that it did."

However, Tilney - who is married to a former Enron managing director, Elizabeth Tilney - and Furst were suspended by Merrill earlier today after they told the bank that they are not willing to testify before the panel.

Tilney's Washington lawyer could not be reached for comment at the time of reporting, but the two Merrill bankers could be subpoenaed to appear before the panel if lawmakers decide to force them to appear before Congress.

..................
Sources told AFX News earlier today that Tilney was an investor in a private placement partnership, called LJM2, that he helped oversee for Merrill on Enron's behalf.

********************

Misetich

Merrill, JP Morgan, Citigroup, Goldman Sachs, Deutche, Credit Swiss etc have allegedly DEFRAUDED investors worldwide-

Lets hope subcommittee chairman, Carl Levin, brings these alleged crooks to justice and restore confidence in our free market system

Got gold?

misetich (07/26/02; 16:13:36MT - usagold.com msg#: 81564)
Insurer's Chief Sees No Relief on Premiums for Businesses
http://www.nytimes.com/2002/07/26/business/26INSU.html
Snip:

By JOSEPH B. TREASTER

Prices for business insurance are continuing to soar in the aftermath of the Sept. 11 attacks and Maurice R. Greenberg, the chief executive of the American International Group, said yesterday that he expected no letup at least through next year.

....................

The increase in premium prices, sometimes double and triple those of last year, are affecting businesses nationwide. They are contributing to higher earnings for many big insurers. But in a time of widespread concerns for corporate stability, A.I.G., with $55 billion in capital and more than $520 billion in assets, is able to command the best prices.

*********************8

Insurance companies have been taking a licking. From the unfortunate terrorism attack to the subsequent hemorrage of stock market and bonds investments - these entities will sock it to consumers and corporations -

Add higher property taxes, due to higher real estate values, soaring medical health care costs, energy etc. and its not hard to forsee lower consumer spending - unless of course you work for the Fed in which case - you hide your head in the sand and hope you can fool everybody by depressing and manipulating the gold market at will.

Of course we know how well the Feds have done against Gold in the past, dont't we?

Got gold?

misetich (07/26/02; 16:04:53MT - usagold.com msg#: 81563)
Mass Media Corporate Earnings Misinformation
Washington Post, John M. Berry, who is an alleged leak source used by the Feds has a column, July 25 where he states

"All but lost in the recent clatter of sharply falling stock prices is the substantial turnaround in U.S. corporate profits that began late last year."

Compare Mr. Berry's (Fed?) spin with First Call market comments on corporate earnings

"The story in the 2Q02 reporting season is not the 2Q02 results. As we said last week, "Do not worry about the 2Q02 earnings, and do not focus on them. They will be okay but they are not the issue".

The issue is the comments about 3Q02 and/or 2H02 that have resulted in pre-announcements turning more negative. This growing realization that 3Q02 and 4Q02 earnings estimates are likely to be cut significantly had a lot to do with spooking the market last week.

Expected 2Q02 Earnings

The 2Q02 earnings reporting season is unfolding as expected with three minor exceptions, two of which were adjustments rather than negative earnings surprises. Earnings for the S&P500, as expected will be, up slightly from those of 2Q01. The final results are likely to be up about 1%. "

Mr. Berry is a disgrace to journalism. The positive spin he reports misleads investors and causes further hardship.

It is this type of mass media misinformation that is leading the US financial titanic toward the INCOMING GOLD ICEBERG!

Got gold?

misetich (07/26/02; 15:50:08MT - usagold.com msg#: 81562)
US Economy Reality Scoreboard
For those who are interested in following the US economy jobless recovery - it suggested to bookmark the following URLS

http://www.forbes.com/home/2002/07/25/accountingtracker.html

The Corporate Scandal Sheet
Penelope Patsuris, 07.25.02, 5:30 PM ET

NEW YORK - With the avalanche of corporate accounting scandals that have rocked the markets recently, it's getting hard to keep track of all the transgressions. Our Corporate Scandal Sheet does the job, following each imbroglio as it evolves and logging each of the latest outrages to grab the limelight. With no end in sight to corporate America's mischief, keep this page bookmarked, since it will be updated often.

and Layoff Tracker Update

http://www.forbes.com/2001/01/30/layoffs.html;$sessionid$DNSW0BYAAABILQFIAGWCFFI

Zygoat (07/26/02; 15:47:26MT - usagold.com msg#: 81561)
Don't you dare interpret differently than W!!!!!
Could'nt beleive my eyes and ears, Maria was just on TV accusing a nice older gentleman of saying the "government was lieing" about the positive state of the economy. Why he must be out of his gourd to say that things dont look so great with the SM. He handled the awkward situation as best he could. I guess that as long as a guest says that everyting is rosey, Maria will not try to humiliate them on national TV.

misetich (07/26/02; 15:44:26MT - usagold.com msg#: 81560)
Health care costs outpace pay raises
http://www.accessatlanta.com/ajc/epaper/editions/today/business_d304ae9a30c4005d00f7.html
Snip:

Friday, July 26, 2002

Employers are spending more on workers --- but it isn't showing up in workers' paychecks.

Soaring health care costs accounted for the greatest share of the increase in the latest Employment Cost Index. The quarterly index measures changes in wages, salaries and employer costs for benefits such as health care. Health care costs outpaced pay raises in the quarter ended June 30.

Workers in private industry saw a 1.1 percent gain in compensation while benefits costs rose 1.4 percent.

"Economists have been predicting higher health care costs for employers, but this is the first report that illustrates it pretty dramatically," said Michael Wald, Atlanta-based regional economist for the U.S. Bureau of Labor Statistics. "This shows employers are really being hit hard by health care costs increases."

Wald noted that wages and salary increases have been running between 0.8 percent and 1 percent each quarter for the past year, while benefits costs have been running between 1 percent and 1.5 percent.

The higher employment costs are likely to be a drag on the U.S. economy's overall recovery, since a large part of the recovery hinges on consumer spending.

"Part of the recovery in the economy is based on consumers being able to keep up the present level of spending," Wald said. "But employers are getting burdened by additional health care costs, so they're not able to give large pay raises. Instead, it's going to [higher] health care costs."

**********************8
Misetich

"They" can fudge CPI,productivity etc but they can't fudge reality -

Corporate earnings growth has fallen dramatically in the last couple of years ( and the reported earnings are padded to boot)

On the other hand, health care costs, energy, housing costs (property taxes) are soaring

"They" will try to keep the game going as long as they can -Will the rest of the world keep on lending without asking for a rising RISK PREMIUM?

Got gold?

R Powell (07/26/02; 15:42:56MT - usagold.com msg#: 81559)
Sounding Board
I enjoyed reading your thoughts. Sometimes we look at a tree and sometimes the forest. Both views have value.

I'm glad you saw that the president signed the silver purchase bill (Mr. Blade's 81450 post). I don't believe the market saw it. There seems to be no price movement from any fundamental information or the existing facts. Oh well, this will just make the unveiling an even greater surprise.
While playing devil's advocate against investing in metals, what info, if any, did you uncover concerning existing silver supplies?
Also, please don't be alarmed at today's downturn. A silver collector named Butler went on vacation and his wife (who has complained for years that his silver has totally overwhelmed their house) sold his entire 284 million ton stash. It was a little more than the market could absorb.
Happy weekend
Rich

misetich (07/26/02; 15:37:03MT - usagold.com msg#: 81558)
Brazil Debt Reaches 1 Trillion Reais on Currency Fall (Update1)
Snip:

07/25 12:33
Brazil Debt Reaches 1 Trillion Reais on Currency Fall (Update1)
By Guillermo Parra-Bernal

Brasilia, July 25 (Bloomberg) -- Brazil's total debt rose to a record trillion reais ($337 billion) in June as a decline in the currency increased the cost of dollar-denominated borrowings, adding to concern that the government may default.

Federal government debt last month rose to 999.7 billion reais, or 78.1 percent of gross domestic product, from 956.1 billion reais, or 75.6 percent of GDP, in May, the central bank reported. Debt rose 22 percent from 822.5 billion reais in June 2001, the central bank said.

About 40 percent of Brazil's debt is in dollars or indexed to the dollar and the debt jumps by about $1.4 billion for each percentage point fall in the Brazilian real against the U.S. currency. The rise in debt and a slowdown in the economy have increased concern the government may default and caused the currency to fall 23 percent this year and bonds to drop by as much as 25 percent in the last four months.

``It's hard believe that debt can be sustainable when it's snowballing every time the real goes down,'' said Edgar Amador, an economist with Stone & McCarthy Research Associates in Mexico City. ``The central bank is beginning to admit that something has to be done to stop this situation.''

Decline in Currency

Altamir Lopes, the central bank's economic research director, said an 11 percent decline in the currency was the main reason behind the increase in total debt last month.

``It's worrisome but we are committed to continue managing'' the debt, Lopes said. ``The fact that we have a volatile currency makes debt grow, but it doesn't make (the debt) unmanageable.''

He added that the central bank expects the ratio of debt to Brazil's $513 billion GDP to remain little changed in July.

The real fell to a record low of 3.00 against the dollar in morning trading and lost 3.4 percent this month.

............................................

Mitesich

Fire, fire, fire everywhere - JP Morgan, Brazil, Japan, US stock market trounced- US corporate bonds volatility - spreads between US agencies and treasuries widen

Got gold?

Aristotle (07/26/02; 15:36:25MT - usagold.com msg#: 81557)
Hyperbolic Gold is financial and political dynamite
Last week before an additional spike upward Aragorn had commented on Gold's technicals in euros vs dollars -- that there was a nicely rising channel in euro denomination but that an upside blowout was the shape of things in dollar terms.

Seeing what we've subsequently seen in the past couple days, it makes perfect sense if you consider the social dynamite represented by imminent/actual hyperbolic Gold pricing in a major currency like the dollar.

Accepting the fact that our government likes to meddle and tweak economic affairs, and also accepting the fact that they are NOT all powerful (thus, tweaking techincal indicators is the best they can do to influence overall market behavior,) it stands to reason that what HAD to be done WAS done.

As a result, a sidelight is the eurolanders still do have a nicely rising Gold channel, albeit one that is flatter and thus offering certain administrative benefits at this time as they seek to dethrone the dollar with euros directly rather than Gold.

More importantly, however, is that the technicals in the dollar form of Gold have been "persuaded" out of the hyperbolic flirtations and have thus bought time as the technical traders let their actions be guided by this new "information." What a beautiful play!

As an ongoing Gold buyer (with my personal Gold Standard for savings) oh how I do love the structure of it all! The vested interests within the Old System are practically giving away Gold as it desperately tries to buy a few more moments of life. Hang in there ol' girl, I've got a footlocker I'm trying to fill!

Gold. Getting me some. --- Aristotle

Graefin (07/26/02; 15:30:27MT - usagold.com msg#: 81556)
Looking at the big picture...
http://gainesvillesun.com/news/articles/10-29-99g.shtml
Hey all...here's a snip from an old article written back in 1999 with similarities/differences to the GREAT crash of the stock market and the writer's present time, 1999. It's interesting to see what is transpiring today in light of what was written in 1999. Click on link for full article!

snip:

THEN

After peaking at 380 points in September 1929, the Dow Jones Industrial Average had lost about 45 percent of its value by November, falling to about 200 points. Nearly a quarter of the decline in value - 24.5 percent - occurred on Oct. 28 and 29, 1929. By March 1933, the Dow had dropped to 50 points, an 87 percent decline from its 1929 peak.

NOW

Based on the Dow's close Thursday of 10,622 points, a 24.5 percent decline in value would result in a 2,602 point drop to 8,020. An 87 percent decline (as happened between '29 and '33) would see the Dow drop from 10,622 to 1,381.

THEN

About 4 percent of households were invested in the stock market.

NOW

About 45 percent of households are invested in the market either directly or indirectly through mutual funds and retirement accounts.

end snip!
Peace!
Gr�fin

misetich (07/26/02; 15:24:17MT - usagold.com msg#: 81555)
Brazil Debt - Will they default?
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news&news_id=reu-n25118804&feed=reu&date=20020725&cat=USMARKET
Headlines

Brazil currency plunge highlights debt concerns
Emerging Debt-Brazil pressured lower by poll due Thursday

"The negative feeling about Latin America is growing," he said. "Investors who have gotten hurt there are continuing to reduce their allocations."

Brazil, the biggest country in Latin America, has been a drag on the emerging debt market this year as uncertainty has increased about economic policy under the next administration.

Misetich

This TRAIL is getting hotter. Stay tuned.

Got gold?

Graefin (07/26/02; 15:10:35MT - usagold.com msg#: 81554)
Danke sehr Sounding Board!!!!!
Danke sehr f�r deine Perspektive! It always helps to step back and take stock of what you have. The US and world is still CLOSE to the toilet and it's just a matter of time to see what tumbles in! (wink, wink, Gandalf!) October is just around the corner. As we all know October is historically the worst month for the stock market. Wonder what will happen this year. Corrections happen. Be patient! Lady Sounding Board? Welcome aboard!
As always...
Peace!
und mit freundlichen Gr��en,
Gr�fin ;-P

misetich (07/26/02; 15:04:50MT - usagold.com msg#: 81553)
US corp bond issuers find investors are reluctant
http://www.forbes.com/newswire/2002/07/26/rtr677772.html
Snip:

NEW YORK, July 26 (Reuters) - Investor worries about shoddy accounting and credit risk have all but dried up demand for U.S. corporate bonds, and that is spelling big trouble for a growing number of companies trying to raise cash.

At least six corporate bond sales have been shelved this month, as investors grow ever more worried that they will be stuck holding bonds virtually impossible to trade.

"There seems to be a buyer's strike right now," said John Cassady, a portfolio manger for Fifth Third Investment Advisors in Grand Rapids, Michigan. "There are some bargains to be had, but until liquidity returns to the market, I'm probably going to just sit on the sidelines."

The latest casualty: Pepco Holdings Inc., a company being formed from the upcoming merger of Potomac Electric Power Co. (nyse: POM - news - people) and Conectiv (nyse: POM - news - people). Late on Friday, the company postponed its $1.5 billion bond sale to fund the merger because of poor market conditions, according to market sources.
................
As investors balk at buying bonds, companies have had to offer ever-higher yield premiums, or extra yields over safe U.S. Treasuries. On average, investment-grade bonds now yield 2.25 percentage points more than Treasuries, the most ever, according to Merrill Lynch & Co., up from 1.94 percentage points a week ago.

The rising yields are forcing companies to adjust their bond offerings to drum up demand.

Misetich

How can spending increase in this type of environment, if corporations cannot raise the required funds?

How can jobs be created?

Feds "advertised" low interest rates are hardly stimulative as corporations have to pay a premium?

Are local, state and federal government going to increase theri tax revenues?

Got gold?

Gandalf the White (07/26/02; 15:01:32MT - usagold.com msg#: 81552)
WELCOME Lady Sounding Board !!! GREAT first Post !
Sounding Board (07/26/02; 14:20:38MT - usagold.com msg#: 81546)
===
<;-)

misetich (07/26/02; 14:56:10MT - usagold.com msg#: 81551)
Avaya to cut 2,500 jobs, take $150 mln charge
http://www.forbes.com/newswire/2002/07/26/rtr677773.html
Snip:

BASKING RIDGE, N.J., July 26 (Reuters) - Communications equipment maker Avaya Inc. (nyse: AV - news - people) on Friday said it was cutting an additional 2,500 jobs and expected to take a $150 million charge in its fiscal fourth quarter related to job cuts, real estate consolidations and certain asset impairments.

Misetich

Yep - US economy is recovering as the Bone Pile keeps on growing!

The spinmasters will try to PLAY the same game as they played between 1997 and 2000, but it won't work.

Foreigners are tired of losing money in US markets - and US economy is dependent on imports, thus the required investments inflows will not materialize.

The "confidence set up" is August 14 at which point we will hear the NUMBERS ARE CLEAN - What a crock!

Will stock options be expensed by the majority of S&P 500 after August 14 ? No

Will pension plans be underfunded after August 14 ? Yes

Will off-balance sheet items still be used? Yes - as most of them can be done legally- "what is, is?"

Will foreigners keep on pouring good $ after bad investment $ - NO - Though Asia and Japan need US consumers and would like to keep the game going - by buying safe US $ investments (treasuries)the ratio of their holding is SKYROCKETING - Who owns whom?
Printed cheap yens are buying the US? How long can the US afford to have that going?

Got gold?

Aristotle (07/26/02; 14:55:54MT - usagold.com msg#: 81550)
Gold. Who needs it?
You need Gold like you need a hole in your head.

It's called a mouth.

You need Gold in exactly the same way that you need a an aquifer even at the very instant that you've drank your fill, quenching your thirst.

You need Gold in the same way you need more food following the biggest feast you've ever had.

Are you with me?

You need Gold because it is enduring and can be counted on while everything else is fleeting. This is the wealth function that Gold serves so well -- it is some THING that you have that you can in times of need relinquish for some other valuable THING (or service) that your life might require.

You can always know that a portion of Gold you offer will be accepted for value because your counterparty also needs Gold like he needs (and has) a hole in his head.

Gold is for Life!

"I THINK, THEREFORE I AM... sure that I need Gold."

Get you some. --- Aristotle

Black Blade (07/26/02; 14:46:40MT - usagold.com msg#: 81549)
Last Line of Defense by Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020726-fri.html#anchor0

Snippit:

In the end, it probably all boils down to the American consumer. Long the bedrock of the US economy -- accounting for two-thirds of America's GDP -- the US consumer has also become the world's consumer of last resort. In my view, the excesses of the American consumer will go down in history as one of the hallmarks of the 1990s. Before sustainable recoveries can be established in the US and the broader global economy, I maintain those excesses must be purged. There is good reason to believe that just such a purging may now be close at hand.

The macro model of consumer behavior is relatively straightforward: Personal consumption is driven by the combination of income and wealth effects. While empirical evidence suggests income effects outweigh wealth effects by a factor of nearly ten to one, consumers were not exactly bashful about drawing incremental support from asset appreciation during the greatest financial bubble of them all. Initially, consumers spent equity wealth effects and, more recently, they have been tapping the home equity till. Financial conditions also matter, but mainly in defining the context for consumption adjustments. On that basis, the confluence of a low saving rate, record debt loads, an aging demographic profile, and an increased incidence of defined-contribution pension plans all speak of unrelenting structural pressures bearing down on the consumption outlook.

Against that backdrop, the American consumer is about to be caught in a vice. At work, in my view, will be the combined impacts of three powerful macro forces that take dead aim on US consumers -- wealth destruction, a long overdue US current-account adjustment, and the coup de grace -- a negative income shock. With all of these forces aligned against the heretofore-resilient consumer, I believe the last line of defense against the double dip will finally be breached.

Black Blade: Roach nails it. The shake out will continue as there is no positive news in the economy. If anything it is getting worse as unbelievable as it may seem, consumer and corporate debt reaches for yet new record levels. The dam will eventually break and then the real pain will begin. Also, the Gold action over the last few days since the run to $324 (withy brief spike to $327) has been yanked back to the $303 level. The rumor is that at least one major US investment bank is in deep trouble and has been selling anything of value due to liquidity concerns and a possible rating downgrade by Moody's in coming days. The rumor is that these downgrades may include as many as three major banks and at least one major investment brokerage (Merrill Lynch?). It should be very "interesting" next week.

Off to the gym!

misetich (07/26/02; 14:44:41MT - usagold.com msg#: 81548)
Fed's Olson says U.S. in recovery, but slow one
http://www.forbes.com/newswire/2002/07/26/rtr677796.html
Snip:

"Business investment hasn't picked up as we have expected and that is one of the things that needs to happen" before the recovery can be complete, Olson said.

He said strength in consumer spending and confidence make it clear the recovery is under way. Olson added that he thought the rain of corporate scandals was on its way to abating, in part because of an Aug. 14 deadline set by the Securities and Exchange Commission for executives to certify their companies' financial statements are accurate.

"It's clear that we're nearing the end," he said.

Misetich

Strength in consumer spending is derived from housing bubble and refinancing - and higher auto lease loans -

Mr. Olson may be right ""It's clear that we're nearing the end," he said." but NOT the end that he's praying and hoping -

It is the end of economic maladjustments and misalignments - and the end of the OVERVALUED US $

Got gold?

misetich (07/26/02; 14:37:58MT - usagold.com msg#: 81547)
Bond defaults hit record $52.1 bln in 2d qtr-S&P
http://www.forbes.com/markets/newswire/2002/07/26/rtr677827.html
Snip:

NEW YORK, July 26 (Reuters) - Fifty-six companies worldwide defaulted on a record $52.1 billion of debt in the year's second quarter, Standard & Poor's said on Friday.

The credit rating agency said the quarter was the sixth in a row in which more than 50 rated companies defaulted on debt.

It said the U.S. default rate should fall from recent 10-year highs by year end, while European Union defaults should remain high this quarter and perhaps next.

Misetich

Are credit market seizing? Banks are tightning up, investors are risk aversion in bonds and stock market.
US jobless recovery is anemic- consumer confidence is DOWN -

This are the times goldbugs have been waiting - the FINAL BATTLE! of the World On Gold War edition 1996 to 2002

JPM is on the ropes! Leasing game is OVER, due to low interest rates - They have to sell gold (whatever is left) outright and publicly -

Japan recession continues, Latin America economy is heading toward a disaster, Brazil debt is mounting...

Got gold?

Sounding Board (07/26/02; 14:20:38MT - usagold.com msg#: 81546)
Take a step back
I am not new to the forum, just have never posted. I thank the host and all those post here for the wealth of information and valuable insight. With gold and silver taking a beating right now, my husband and I have revisited our investment strategies. He actually encourage me to post and share our thought process which may benefit others. Some times through these hard times, it helps to have friends to tell you that you are not insane. Let me share with you our investment story, then my thoughts of this past week.

We started to have little money to invest once we got out of graduate school 5 years ago. My husband has always been interested in finances although he got his doctorate in Electrical Engineering. He researched investment strategies, and decided to follow Warrant Buffett's teachings. Back around 1998 he concluded that the stock market is a bubble. He invested in bear mutual funds. Later, because of concerns that the Fed could potentially enter the stock market and prop it up at an arbitrary value, he switched to gold and silver. At that time he found this forum. It was frustrating at that time because the stock market kept going up. It did not matter much because we did not have much money invested at that time.

By a stroke of luck, we hit the California real estate jack-pot, sold and cashed in. Now we have some more money to invest. I was afraid that he only read and listened to news and ideas that supported his own reasoning. All the conspiracy theory just sounded unbelievable. It did not make any sense to me that the central banks would want to sell gold and not to make any money. I was really worried about him too. (Does anyone remember the movie starring Harrison Ford "The Mosquito Coast" )? I thought he would lead the family to do something drastic. Now that we have children, we had to be more careful about our actions. I challenged him to read the other side of the views So he did. I played the devils advocate and asked challenging questions. He had sound answers. To our relatives and family, we are nuts. It was not easy from the start, not just now. We have seen wild, gut wrenching, swings in our portfolio � including being in the red at times. We use each other as sounding boards. I was introduced to the USA Gold forum. In fact, it has been much easier this year, because many of what we have learned has come to light, e.g. stock market correction, Enron, Worldcom, Argentina, Japan. Relatives are beginning to think we are right. We spent time to gather all the necessary reading and material and sent them to immediate family to have them read the material and make the decisions. We have persuaded my brother in law into investing in gold and silver just two weeks ago! This past week was very bad for us not because our own portfolio took a beating, but my brother in law's. We felt very bad about it. Not because we gave the advice, but we cause we are mentally prepared and they are shocked at this point. This leads to the thoughts that I want to share. My husband and I have thought hard and asked ourselves, what are the fundamentals that lead us to invest in gold and silver. Has any thing changed? In our opinion, this question should always be asked no matter the time is good or bad. We concluded at this time:

1. The world economy is still deteriorating, we can not find one healthy economy. Unemployment on the rise all around. Banks in trouble.
2. Middle East Crisis is intensifying. US and Britain are going to attack Iraq, it is just a matter of time. They are both saying it is not imminent (to me that means not today). Energy shortage still a big problem.
3. US still in recession and the government is still in denial mode. Only politicians and US economists insist that the economy is sound and recover is taking place. These are the same people who said we did not have a recession until we are way into one. The numbers they use (questionable to begin with), can only show that the rate of deterioration is slowing down if at all, but not a recovery. The systemic problems are not being addressed.
4. The US Government, corporations and the people are carrying record amounts of debt. People with debt, possibly loosing their jobs, defaulting on their mortgage, have their pension go down the drain with the stock market, are not going to jump out of bed one day and start buying everything. If they are not buying, companies are not going to produce, there are no new jobs. You get the picture.
5. The corporate scandals are not over � there are still more in the pipeline. Having the CEO sign a piece of paper is not going to fix anything. Either they will restate earnings down, lie, or not sign the results. It also does nothing to address earning enhancing techniques that are allowed within GAAP.
6. The reasons for foreigners to pull the money out of US, and dump the dollar are still there. As a matter of fact, I think, the past couple of days have shown that Asia is wising up, did not just blindly follow Dow's leaps.
7. The original "justification" for the central banks to sell gold is not there anymore. They may still want to sell, but it is going to be harder to justify it to their people.
8. Mining companies are unwinding their hedge books.
9. Our government signed a bill which confirmed that the National Defense Silver Stockpile is gone. The mint now expects to purchase 9 million oz a year on the market.

Now one can say, "All you said is true, but what if the big boys can continue to manipulate, change the rules to the game?". This is where faith comes in, but not blind faith. Unlike having faith in the stock market, which is without a sound reasoning at this point, backed only by economist and politicians� words. By comparison, gold has endured the test of time. Already the manipulation has received good exposure. To list a few: Bill Murphy's interview regarding GATA on CSPAN, Royal Bank of Canada's internal memo. We are making other progress too: The World Gold Council changed leadership. All of these support the faith in gold. I was actually excited about the drops. It means to me that the end is near. The manipulators are getting desperate, and becoming more bold in their manipulations. If anything, all evidence supports that the day that gold and silver will pop sooner rather than later. I have shared my experience to show that if you step back, look at the last 5 years, not just today, conditions are actually getting better for gold investors. So hang on, give each other support and come out winners.

The Hoople (07/26/02; 14:15:27MT - usagold.com msg#: 81545)
Friday thoughts
As I watch the last of a Friday trading day sputter home this is what I will remember of this past week.

*JPM and C looked into the abyss. At %18 JPM probably is insolvent. The chain reaction of their misdeeds would probably implode the finances of the planet. A meeting occurred that only years later will be revealed. How truly horrific were things were on Monday, July 22?

*Dow sub-8,000 , NASDAQ sub-1,200. Huge stress to mutual funds, pensions, 401's and banking. Problems will surface as weeks and months progress. Another abyss stared down and postponed, albeit temporarily.

*Utility index crash. Little mentioned but as bearish as it gets. Failure now priced into the majority of the index corporations. Many other utilities also broke and running out of cash. Where wil this huge bailout come from?

*Pension fund stress. 111 billion and counting unfunded pensions. Toss in government and others not counted and it is an impossible number.

*Gold trashed like every systemic risk event since 1995. Like every time gold should (would) have performed its duty it is mysteriously less valuable within a week of the stress. Defying all rationale it seemingly gets dumped by people at the precisely worst possible time. This is obviously wrong and another symbol of what abyss must be like to a BB or CB. Like Marx said they musy have been "quaking in their stolen boots". What I take away from this event is a sense of a system coming unglued and no conventional media will ever announce it. With the help of Russian-style economics many will be clueless to the final fascist conclusion. Gold may and may not be a lifeboat but at the time it is the only lifeboat we have.

Cavan Man (07/26/02; 13:54:30MT - usagold.com msg#: 81544)
PS: sector
Do you think both China and Europe have prepared for the apparent outcome of the current "predicament" beginning perhaps, years ago? Might the Euro qualify as a monetary moat (albeit imperfect) around EU members ?TIA....CM

Cavan Man (07/26/02; 13:51:40MT - usagold.com msg#: 81543)
@SECTOR
Dear friend: call me a cynic and a cad but I have read so much of the same here for over three years now I must in all sincerity ask:

1. Could you be exaggerating the scope of the predicament?
2. How can you be so sure your facts are correct?
3. Might you be underestimating the power of the "powers"?
4. Can JPM/Chase really be vanquished from the field?

Best....(just for starters)...CM

sector (07/26/02; 13:47:51MT - usagold.com msg#: 81542)
China and the Almighty Dollar
http://www.atimes.com/atimes/China/DG23Ad04.html

For more than a decade, the US has kept the dollar significantly above its real economic value, attracted capital account surpluses and exercised unilateral policy autonomy within a globalized system dictated by dollar hegemony. The reasons for this are complex but the single most important reason is that all major commodities, most notably oil, are denominated in dollars, mostly as an extension of superpower geopolitics. This fact is the anchor for dollar hegemony. Thus dollar hegemony makes possible US finance hegemony, which makes possible US exceptionism and unilateralism.

The Chinese economy is at a point where it also can defy this Mundell-Fleming thesis and free itself from dollar hegemony.

China has the power to make the yuan an alternative reserve currency in world trade by simply denominating all Chinese export in yuan. This sovereign action can be taken unilaterally at any time of China's choosing. All the State Council (the Chinese government's cabinet) has to do is to announce that as of, say, October 1, 2002, all Chinese exports must be paid for in yuan, making it illegal for Chinese exporters to accept payment in any other currencies. This will set off a frantic scramble by importers of Chinese goods around the world to buy yuan at the State Administration for Foreign Exchange (SAFE), making the yuan a preferred currency with ready market demand. Companies with yuan revenue no longer need to exchange yuan into dollars, as the yuan, backed by the value of Chinese exports, becomes universally accepted in trade. Members of the Organization of Petroleum Exporting Countries (OPEC), which import sizable amount of Chinese goods, would accept yuan for payment for their oil.
+++++++++++++++++
Halfway through the last decade the US implemented a policy of gold manipulation, which is an ndispensable component of everything discussed above.

The overarching FED strategy absolutely depends on it.

But the Chinese apparently know something is up and have moved to start a robust gold market of their own.

The Chinese threat is but ONE of the many worries of the riggers in Washington and New York.

Tks to Maddog for the above link.

sector (07/26/02; 12:47:12MT - usagold.com msg#: 81541)
Proof Of FED Panic
From G-E at 1:38PM today
US Official Gold Assets�
(pahearn1) Jul 26, 13:58
AS of 7/25/02, Fed held $11,039,000,000 of Gold in Gold Certificate Account. For Balance Sheet purposes, it is valued only at 45.22/oz. so as you can see the dollar value of holdings is much greater based on POG of 304ish.Gold holdings are essentially unchanged from a year ago....No Fed Selling here. (http://www.federalreserve.gov/releases/h41/Current/ )
++++++++++++++++++++++++++++++

One always knows when he is wining a battle when the opposition begins to react.

Here is a post that is hopelessly flawed (1) because the report cited is not GAAP compliant (2) the Fed has already been implicated in numerous gold swaps as evidenced in FOMC transcripts (3) V.Mattingly was compelled to lie about these direct, approved Fed transcript references to gold swaps (4) the GAAP approved Consolidated Financial statement from 2000 reveals a $20Billion debit in the "Gold and Foreign currency" category which matches the 1,700 tonne West Point, NY Treasury depository change in designation from "Gold Bullion Reserve" to "Custodial Gold" (5) the case for manipulated gold has matured to such an extent that to believe otherwise classifies one as taking a "Fringe" position and finally the Fed can claim that all its loaned gold still is theirs AND the lessee's gold by rigged IMF rules that IMF's own lawyers and statistician accountants object to [Santiago, Chile October 1999].

Of course the Fed and Treasury are selling gold to hammer pog so as to permit JPM a modicum of mark-to-market gold derivatives balance sheet relief. It is just this action that certifies the rig job.

The problem with the Fed is they have so many rigs unwinding that they are losing complete control.

The JPM $20 derivatives detonation level is the most interesting of all. Fund managers now KNOW about it and are dumping like their lives depended on getting as far away from JPM as possible. These fund guys are being driven by redemptions which will skyrocket in early August as the incendiary monthly reports hit mailboxes.

Even IF the FED believes they can prop the futures, the fund guys will still dump. Another point, JPM doesn't have THAT much cash on hand to buy their own way up and out of danger. It was mostly all devoted to "Rocket Science" derivatives that couldn't go wrong...that could withstand 2 standard deviation shocks.

It's LTCM all over again times 10,000.

Perhaps some one here would like to post this message at G-E?

USAGOLD / Centennial Precious Metals, Inc. (07/26/02; 11:49:03MT - usagold.com msg#: 81540)
In a world of reality and illusions, seek the reality.
http://www.usagold.com/ProductsPage.html

You May In a Fall

Know REAL GOLD by its Jingling Noise.

PAPER Drops Without Sound.

When the DERIVATIVES sell off as we see today,
the METAL can be confidently claimed at influenced prices while it lasts.

Remember this:
in times of economic stress,
it is only ownership of the METAL that
carries the full complement of financial benefits
that have been reliably associated with gold throughout history.

In the final analysis -- in times of stress -- paper is worth only paper.

Have you got the real thing?

Siochaina (07/26/02; 11:35:47MT - usagold.com msg#: 81539)
Why gold is under Pressure?
A last minute check of mail broght this from LeMet

Why gold is under Pressure?
By James Sinclair & Harry Schultz

There is no question in our mind that the extreme selling in gold by Chase/Morgan/Goldman, which occurred for the third time at $322 and continues today at $305 from the same source, has the distinct purpose of making sure that the derivative position which is enormous on Morgan's books (as reported to the Controller of the Currency), does not show the loss that, we believe, would have existed at $322 - - - as their credit standing is certain to be reevaluated. With the recent negative publicity concerning derivative transactions at Morgan with Enron, it is reasonable to assume that debt-rating services will examine their status. That has become normal procedure in such situations.

Clearly this has created an uncomfortable position for the gold bulls that are themselves not yet fully convinced of the integrity of the gold bull market. We can only tell you that we believe in that integrity. The forces at hand that are motivating the gold market lower, which is the derivative situation, is just what will contribute to the final higher prices. We have told you that this is a battle of Titans and the public so far has very little interest in the recent building of the price of gold. This drama is very far from over. It's barely into stage two.

Old Yeller (07/26/02; 10:52:23MT - usagold.com msg#: 81538)
China vs.the Almighty Dollar
http://www.atimes.com/atimes/China/DG23Ad04.html

Interesting read,especially on a day like today.

miner49er (07/26/02; 10:44:48MT - usagold.com msg#: 81537)
Mr. Gresham @ 81531

Regarding risk management and other portfolio balancing via the paper markets, I thought it was suggestive of the ability of liquidating longs to tank the price, when the other day MK remarked about his "Mr. Insider." His take was that the $10+ drop that day was fund selling, possibly to cover redemptions (and imho possibly to have cash available for anticipation of another little bout to the upside as well in the general equities).

The shorts have a hard time containing a swelling demand, but have been able to beat it back for any of a host of reasons with some success, but if large paper holdings leave the table, observe the power with which the price drops. Again, imho, let that serve as both a foretaste and a warning...

Now as for physical buyers -- I don't have any way of knowing the real demographics of these buyers. I'm just taking my cues from human nature. After a couple years of sickening losses, having your chain yanked up and down, and nearly out of cash in many cases, people know instinctively it seems to turn to gold. But they really don't know why. They just know. And when, yet again, after they've had their other "sure" hunches obliterated..., to have what they thought was sure, seemingly also get trashed, they are likely to throw it in even more quickly this go round... Especially since their entrance was likely out of reaction more than deliberation... And without any knowledge of this environment -- which only comes with time and analysis -- they have NO staying power and NO conviction.

Your point is well taken, though -- do these people constitute enough volume to affect the price of "real" physical, so as to shrink the premium over spot appreciably. I don't know for a fact, but I am convinced that it made a difference over the past few years when the gold bear seemed like it would never end, and gold would go to a $100 as some analysts were hinting. So I have no reason to suspect it won't or can't make a difference today, at least in the short term..., especially when people are even less rationally motivated.

Would love to hear from Mike on this... maybe he's not responding because he's so busy taking buy orders...;->

cheers...

Knallgold (07/26/02; 10:23:39MT - usagold.com msg#: 81536)
canamami
Right.I even saw a journalist begging twice these days for central bank intervention (to save the stock market)

We knew LTCM was probably saved with 300-400t of Gold.Maybe the master of the universe has handed out US Gold directly to JPM.Intervention IS going on now-why has it only risen to 330 without problem but has now holding 300?

darkhorse (07/26/02; 10:18:44MT - usagold.com msg#: 81535)
no time for a career change...
I'm glad I'm not a financial anal-yst...this week doesn't make much sense to small-ish minds like mine. Silver is taking it's turn bungee jumping this morning...and I think the cord BROKE!

sector (07/26/02; 10:18:17MT - usagold.com msg#: 81534)
Pension underfunding soars 425%
http://www.boston.com/dailyglobe2/207/business/Pension_underfunding_soars_425_+.shtml
$111b shortfall is record high

By Sue Kirchhoff, Globe Staff, 7/26/2001

WASHINGTON - US corporate pension plans were underfunded by $111 billion at the end of 2001 - a dramatic 425 percent increase from the previous year - as companies took a hit from the falling stock market and interest rate fluctuations, according to new data from the federal agency that guarantees private retirement plans.

The Pension Benefit Guaranty Corp. first disclosed the data in a Tuesday discussion with the staff of California Democrat George Miller, a member of the House committee that oversees the agency. Miller yesterday asked Treasury Secretary Paul O'Neill and Labor Secretary Elaine Chao to step up oversight of pension funds and make sure pension accounting standards were sufficiently stringent.

''The implications of such massive shortfalls in pension funds are staggering, for pensioners, taxpayers and for the private companies themselves,'' Miller said in a letter to the Cabinet officials. ''For taxpayers, the un-funded liability could mean enormous costs. And for private companies, failure to accurately account for their pension liabilities could cause them serious financial jeopardy.''
+++++++++++++++++++++++
Recall that General Motors pays for 300,000 penions from a fund they SAY makes 10% per anum. One can predict very bad things for GM when the "Born Again" accountants get finished with that fiction.

Cavan Man (07/26/02; 10:09:06MT - usagold.com msg#: 81533)
canamami
I'd guess just a paper assault.

You're right. It will take a large buyer with conviction (BALLS). Hello to China or Europe. Your dollars are fast depreciating and casinoland USA is not running a clean game.

What a bunch of chumps!

Mr Gresham (07/26/02; 10:04:44MT - usagold.com msg#: 81532)
canamami
Pretty weird, all right. My first thought is something like an inverse of the WA spike. When something happens so strong, and so fast, it is certainly some large insider(s) (not the small JQP with small accounts) who are either watching and anticipating (upward), or fighting a last rearguard action with all remaining resources (downward).

(Just saw a Battle of the Bulge movie last night, and you know what to say when the note comes over demanding your surrender: "Nuts!")

Again, Michael: What do dealer prices do in a time like this?

Mr Gresham (07/26/02; 09:58:34MT - usagold.com msg#: 81531)
miner49er, Siochaina
Siochaina -- travel well, and may there be good news awaiting your return.

miner -- thanks. It seems that either Sinclair or Kaplan had some remarks that went into the contract transition (though not about currencies -- you're about the only one who's done those elaborations on what FOA was trying to highlight), talking about adjusting their risk profiles, thus leading to market moves like this one. Do you really think it is new, small-time buyers? I just don't know, since I have no inside experience or view into the size and shape of these markets. I jus' clinks when I can.

So much to read, so little time...

canamami (07/26/02; 09:58:13MT - usagold.com msg#: 81530)
Probably a CB helping the "cause"
This isn't a panic by newbie investors in physical. This is a dump of paper AND physical either by players with CB backing, or by a CB or CBs. It looks like the manipulators are still out there. Can't have gold sending signals we don't like, can we.

As I stated here years ago, gold needs a "white knight", a big public buyer to lift the threat of CB manipulation from the gold market. If China or some similar country/actor stepped up to the plate and publicly said "we're for gold, and we will buy more of it", the game would effectively be over.

Tommy P (07/26/02; 09:45:27MT - usagold.com msg#: 81529)
Ya we worry about terrorists.....
Little due the American people know they all work on Wall St.!!!! Who eles has harmed, raped and pilferied the American dream more then the Banks! And they worry about communists, 90 miles south off of Florida on a small island called Cuba!

Siochaina (07/26/02; 09:13:55MT - usagold.com msg#: 81528)
(No Subject)
I'll be away a few days...often gold goes up in the beginning when I'm away,,,,anything for a goood cause!

YGM (07/26/02; 09:08:05MT - usagold.com msg#: 81527)
Optimists Creed.......
Gold Believers Need To Stay Focused AND Optimistic.....
Creed for Optimists

by Christan D. Larsen

Be so strong that nothing can disturb your peace of mind.

Talk health, happiness, and prosperity to every person you meet.

Make all your friends feel there is something in them.

Look at the sunny side of everything.

Be as enthusiastic about the success of others as you are about
your own.

Forget the mistakes of the past and press on to the greater
achievements of the future.

Give everyone a smile.

Spend so much time improving yourself that you have no time left
to criticize others.

Be too big for worry and too noble for anger.

miner49er (07/26/02; 08:53:32MT - usagold.com msg#: 81526)
Mr Gresham @ 81446 and 81523

Greetings, good Sir! Haven't spoken to you in ages... Just wanted to say, I enjoyed your line the other day: "The avoidance of Paper is not merely a cultish devotion to some disembodied Internet "gurus" at USAGold. It is a defense against our own Cleverness. The conceit of our own unique ability to find a Shortcut to Wealth."

And - on your separation question, yes I'd love to hear from Mike on it.

But one thing to be careful of here short term is that you will also have bunches of newbie investors who DID buy physical gold, who have no understanding of all the issues, who will get that pukie feeling in their gut... AGAIN... after having just vomited most of their life savings in equities, whose inevitable capitulation here will only add MORE physical TEMPORARILY to the market...

My hunch (and MK correct me if I'm wrong), is that the follow through from any further staying power to the current decline is a shrinking of the premium of "real" physical over spot -- at least in the short term.

As such, scoop it up while you can -- it WON'T last long!

The issue that still evades everyone, although it has been heralded with all but a clarion call, is that the currencies are in transition. With that, the raison d'etre of the contract gold exchanges, at least beyond old-fashioned production hedges for cash flow smoothing, is going away. As such, all the old strategies, just won't apply anymore... Please, all, agree or disagree with the conclusions of some of us here, do consider seriously the implications of a currency transition.

cheers,
miner

Graefin (07/26/02; 08:48:18MT - usagold.com msg#: 81525)
Chin up everybody...
Although SOME of youse out there think I'm a bit nuts for reading/watching the astrologers...did anyone see/hear the Arch Crawford interview last night on CNBC?? He said some wery interesting things about gold and the housing market. Now before those few of youse stop reading now, be aware there are other sources (besides astrologers) out there who speculate gold will begin shining again around september/october (after this correction if over {and could drop to $290 before the next major spike}). "Zo"...Arch said some interesting stuff about the housing market ending the end of July and gold begins to perform at the beginning of August. He had his "Bradley" chart out and it looked pretty similar to what the market is going through now. This PLUS other information gathering I find quite intruiging! BUT...only time will tell!

As always...peace, love, and gold bars...
Gr�fin ;-]

steady (07/26/02; 08:39:56MT - usagold.com msg#: 81524)
paper avelanches 81517 message
http://story.news.yahoo.com/news?tmpl=story&ncid=68&e=3&cid=68&u=/nyt/20020726/ts_nyt/negotiators_agree_on_bill_to_rewrite_bankruptcy_laws
regarding his/her last few sentences.
Now all you have to do is allow the credit bubble that you have created to implode on itself (be sure to have passed legislation which will essentially make slaves out of all debtors first!) and you will have a nice plantation of debtors who will produce a healthy cash flow and work for you for many years to come.
look what was in the ny times this A.M.

Negotiators Agree on Bill to Rewrite Bankruptcy Laws
Fri Jul 26, 9:18 AM ET
By PHILIP SHENON The New York Times

WASHINGTON, July 25 Congressional negotiators announced today that they had reached agreement on a bill that would rewrite the bankruptcy laws, making it much harder for people to escape their debts when they declare bankruptcy

The agreement, a victory for credit card companies and other lenders, came late today after members of a conference committee reached a compromise on the language of an abortion-rights provision that had threatened to scuttle the overall bill. The compromise will restrict the ability of anti-abortion protesters to use the bankruptcy laws to shield themselves from paying court fines resulting from protests at abortion clinics.

The overall bankruptcy bill, which passed both houses of Congress by overwhelming margins more than a year ago, appears destined for final approval in the House and Senate, and the White House has suggested that President Bush ( news - web sites) will sign it. The House could vote on the measure as early as Friday, the day it is scheduled to begin a monthlong summer recess. Conference committee members were under pressure to reach an agreement before the break.

good timing paperavelanche!

Mr Gresham (07/26/02; 08:16:47MT - usagold.com msg#: 81523)
Separation
Think "separation" here. (Sooner, or later.) What are the coins going for? I haven't tracked the premium to spot, but it seems higher lately. Michael? Are the wholesalers agreeing with spot, or fading it?

sector (07/26/02; 07:57:13MT - usagold.com msg#: 81522)
Yen Heads for Biggest Weekly Drop in 4 Months as Stocks Slide
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APUDawhVDWWVuIEhl

Top Financial News

07/26 01:14

By Kanako Chiba

Tokyo, July 26 (Bloomberg) -- The yen fell toward its biggest weekly drop against the dollar in four months, as Japan's Nikkei 225 stock average sank to a 5 1/2-month low, choking demand for the currency to buy shares.

The Japanese currency fell to 117.57 against the dollar from 116.47 in New York yesterday, reducing gains on the year to 12 percent. Against the euro, it declined to 117.41 from 117.73 in New York. The Nikkei 225 stock average fell for a third day, shedding as much as 3.6 percent of its value. At the open, overseas investors were net sellers of the biggest amount of shares since Jan. 30, according to brokers.

``A drop in the Nikkei is pushing people to sell the yen,'' said Kenji Takei, a currency sales vice president at the Tokyo branch of Societe Generale SA. ``Also, earlier gains in the yen are hurting Japanese exporters and consequently the economy.''
++++++++++++++++++++++++

Here we have a clue in the frenetic effort to hammer gold. The yen has now resumed it's fall vs. the dollar � something that is a mandatory event if their export industry is to survive. Therefore gold's price in terms of the yen is rising unless the cabal forces the $USD value of gold down. The falling yen MUST be covered by a falling $USD gold price or else the Japanese will again move to gold as they did earlier in the year.

Let's see when the big boys come out to buy gold.

Dredsner Bank yesterday referred to a "Banking crisis" in Europe. In times of admitted crisis, banks may act in their own self interest and contrary to what the "Monetary Authorities" demand�it's only human nature. Secretly buying gold is clearly in a bank's self- interest.

Carl H (07/26/02; 07:44:26MT - usagold.com msg#: 81521)
JPM Subpeona
Has anyone see this story in the mainstream news this morning?

Knallgold (07/26/02; 07:44:19MT - usagold.com msg#: 81520)
POG action
There seems to be a hurry to run the stops ...

Socrates964 (07/26/02; 07:28:45MT - usagold.com msg#: 81519)
Paper Avalanche
Hope you're right about the rally - unfortunately the gold bugs seem to be going through a crisis of confidence, which suggests we test $303 (62% retracement of $287 to $329 move), or even the 78.6% retracement at $295. Longer-term charts for gold nevertheless look compelling, and fact that gold stock investors seem to be reaching a 'puke point' is probably a good buy signal.

Tend to agree with Jim Sinclair that we are under a cloud until mid-August and will test $301-05, even if the numbers suggest that we are about to start a new upleg.

Btw, think that foreigners have gone off the idea of financing Dubya's financial enslavement of the US.

YGM (07/26/02; 07:11:34MT - usagold.com msg#: 81518)
JPMC and the SEC Subpeona News isn't even out of the shute yet....
http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7082634&tid=jpm&sid=7082634&mid=25668
...and one poster at the JPM Message board is trying to garner support for a class action suit by shareholders....
Will the JPMC debacle be the catalyst we've all been wondering of and waiting for....Today should be one of the most interesting days yet!......YGM.

"Short JPMC & Go Gold & Go GATA"

Ole J Pierpont Morgan is over on the other side freaking out and trying to pay-off St. Peter to get back I suppose....Well maybe the PPT can buy the whole Dow for him this time to keep it from collapsing!

Paper Avalanche (07/26/02; 06:44:52MT - usagold.com msg#: 81517)
Looks as if someone knows what's coming down the pike....
http://www.washingtonpost.com/wp-dyn/articles/A2855-2002Jul25.html
If I wanted to enslave America I would do the following:

1. Inflate the money supply
2. Control gold and interest rates to hide inflation (also manipulate all economic data)
3. Create a vehicle for inflation to channel to equity markets (401(k) plans)
4. Create an equity bubble that draws in the uneducated and naieve.
5. Create a welath effect
6. Translate that wealth effect into a real estate bubble to pick up the gauntlet when the inevitable equity market crashes
7. Trumpet consumption and debt as economic virtues that drive the economy
8. Continue to manipulate gold and interest rates so as to provide no alternative for the weary who may be desperately seeking an alternative to their dwindling stock portfolios
9. Promote easy credit even further by pushing second mortgages to consolidate debt to a point where personal disposable income is entirely consumed just to make minimum payments.

Now all you have to do is allow the credit bubble that you have created to implode on itself (be sure to have passed legislation which will essentially make slaves out of all debtors first!) and you will have a nice plantation of debtors who will produce a healthy cash flow and work for you for many years to come.

Cavan Man (07/26/02; 06:39:02MT - usagold.com msg#: 81516)
Hello sector
I'm having a "sandwich at the beach" most days. Enjoy your comments the best as they are right to the heart of the matter and devoid of ambiguity cloaked in a suspect literary style.

Paper Avalanche (07/26/02; 06:27:51MT - usagold.com msg#: 81515)
Call it a hunch...
but I feel a huge spike in the POG happening as we go into the close this afternoon. Just my intuition, which is mostly wrong. I have a funny feeling about today.

Paper Avalanche

Black Blade (07/26/02; 04:17:35MT - usagold.com msg#: 81514)
Gold Mining Costs Soar
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256C0200090DF5?OpenDocument

Snippit:

There's more bad news on costs which have shown an across the board increase, although Meridian gold turned in a huge 10% improvement on its total production costs. Nevertheless, on a weighted basis, the cost curve is on an upwards tear. The companies have done about as much as is humanly and technically possible. Reduced exploration expenditure and the apparent absence of easy-access deposits means the overall cost profile is likely to rise steadily from here on.

Black Blade: Actually this is very good news. Gold production will begin a serious decline in 2004 as mines are played out. Also, most companies have no significant exploration and are growing by acquisition, a foolish strategy that cannot continue for long. When the POG does rise and new reserves are needed, it will be a very long time as it takes as long as 5 to 7 years from exploration to the beginning of mining. That is a big time gap without sufficient production in a rising POG environment.

Black Blade (07/26/02; 03:18:02MT - usagold.com msg#: 81513)
Markets All Negative
http://quote.yahoo.com/m2?u

Global markets are all negative. US market futures are also negative. Meanwhile the USD is higher and Gold lower. Anything can happen yet.

- Black Blade

Golden Bear (7/26/02; 02:46:41MT - usagold.com msg#: 81512)
Fools will be fools....
A fund manager from Inscape funds was just interviewed on CNBC Europe. He was asked that since 911, hasn't the investing paradigm significantly shifted?

His response: "No. Larry Summers released a paper stating that when paradigm shifts occurs and stocks are falling, gold rises. Here we are seeing people moving out of tech and telechom. It's not a paradigm shift..."

GB: Well, at least the PPT's manipulations are fooling some...

Black Blade (7/26/02; 01:21:40MT - usagold.com msg#: 81511)
Stock Market Crashes in Asia and Europe
http://quote.yahoo.com/m2?u

The Asian stock markets crashed in Asia tonight and the European markets are starting off in negative territory.

- Black Blade

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