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ARCHIVED DISCUSSION FROM 1/26/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Topaz (1/26/06; 21:59:09MT - usagold.com msg#: 140909) Gold and Silver. http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st= From a currency perspective, Gold has been dogging it this month (see Chart) ..otoh Silver has been out-performing.With 1000odd Jan Ag Contract equivalent Oz's through the turnstyles as opposed to zilch Au, we can see where upward pressure is being applied.Feb is an Au delivery month so I'd be looking for some positive alt-currency Gold action in the coming days (after a dip into the eom)NEVER keep ALL your Eggs in ONE Basket ...Hold physical Gold AND Silver! Smeagol (1/26/06; 21:08:39MT - usagold.com msg#: 140908) Sauron's advocate for ETFs? Wethinks commodity ETFs could bolster... sss... anti-confisscation arguments... they may help shield physical metal from theft-rissk during "currency revaluation emergencies" by providing (unintended) political cover for it.Ssince an ETF is a share like any other... if an attempt were made to take the assets (gold or silver) of an ETF in a currency "crisis" we would expect that this would really make a lot of people... and this is important - who AREN'T physical gold holders - very angry (imagine how ridiculous it would look trying to single out and "confisscate" Google).And it looks lately like there are going to be a lot of these non-physical gold holders out there.Outlawing the possession of metal (held by a ssmall fraction of the population) in a country is one thing; however... ssome ETF shares will be held outside the country - and trying to ssteal value so directly... even in a paper share... from someone outside the jurisdiction would definitely not be looked on favorably! That ssaid, precious... THISS ssmall dog holds only the metal Itself. No tricksy paper, thank you very much!S.P.S. Who is "behind" the ETFs - the dollar-faction or the Freegold faction? Noble1 (1/26/06; 20:23:05MT - usagold.com msg#: 140907) ETF @Belgian msg#140899Not all willing investment dollars can opt for goldmetal.You seem to ignore the vast sums of fiat being invested in the ETF from sources (pension funds, etc.) that are forbidden from purchasing physical gold. There are also many investors out there that like the familiarity of the NYSE and would not otherwise purchase PG. I think the ETFs have opened a whole new source of investment dollars that would not/could not have found their way into the physical gold market and have thus far had a positive impact on the POG. At least the physical gold in the ETF is being placed in allocated, audited storage. Yes, there are worms in this apple. But it has created the largest publically disclosed hoard of physical gold (300+ tons) in existence. I wish all London good delivery bars extant were as visible. Maybe this will provide the impetus for such disclosure/transparency of other hoards as the dwindling supply of PG gets allocated and audited. Who's got the real PG and where is it? Sure looks better than 8000+ tons of "deep storege gold".I don't think that the share price of GLD has any impact, at this time, on the PG price discovery mechanism. As markets currently exist, arbitragers will most likely take care of any shareprice/PG discrepencies.Personally I do not currently own any gold ETF shares. But I have been in and out of GLD five times with "trading money" (profitably I might add---easy to do in a secular bull market)and found it to be extremely liquid at a real time bid/sell market price. I have never sold any of my physical but I often wonder who is going to buy it and at what price should I need/want to sell? Lets say I need to liquidate tomorrow. Will a dealer (our gracious host for example) buy all of my holdings or only that which I purchased from him or none at all? I don't know. I guess I should call and ask. It's a fair question.I do consider myself a PGA and hold my PG as a long term wealth asset. But PG ownership is not for everyone and we have to admit that there are issues with PG storage, security, transportation, liquidity, and buy/sell spread (not necessarily the amount of the spread but the differences from dealer to dealer). Am I getting top market price or am I having to accept less because of my need to sell, my location, the type of gold I possess, who I purchased it from, or the amount I am trying to liquidate? Methinks when the times comes all of those excuses will be used to diminish the offer on my holdings. Facing some of these issues will do more to improve and make investors more comfortable in our PG market than trying to scare people from investing in the ETFs.Noble1 Chris Powell (1/26/06; 16:29:19MT - usagold.com msg#: 140906) India's securities board approves gold exchange-traded funds http://groups.yahoo.com/group/gata/message/3621 Latest GATA dispatch.To subscribe to GATA's dispatches, send an e-mail to:gata-subscribe@yahoogroups.com Sprout (1/26/06; 15:48:05MT - usagold.com msg#: 140905) Gold ETF - To Each his Own Personally, I'd rather fill my own vault FULL of Gold with my money, then have someone else fill Theirs with my moneyBut hey - you can call me foolish all day long :) USAGOLD Daily Market Report (1/26/06; 13:43:17MT - usagold.com msg#: 140904) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.THURSDAY Market ExcerptsGold dips as Feb futures roll to AprilJanuary 26 (from Reuters) -- Benchmark February gold on the COMEX division of the New York Mercantile Exchange slipped $2.60 to end at $559.90 after trading between $563.70 and $554.40.April futures were becoming more active as rollover from February gold accelerated before delivery next week. April closed at $565, also down $2.60 on the day.Liquidation by fund-type accounts pushed gold further from last Friday's 25-year high at $568.50, as trading was partly overshadowed by COMEX options expiration and by the February-April rollover.Those technical factors helped douse the recent rally in gold."You don't want to stand in front of a roaring train, but you have to also pay attention to the potential for these things to come off," said Jeffrey Christian, managing director at commodities consultant CPM Group in New York. "But I still think it has one more kick in it for prices to rise from here to about $600 in the first quarter," he said.Analysts and many traders remain upbeat about gold for 2006 amid market jitters over high energy prices, dollar instability and a rosy supply/demand picture for the metal.Christian said some of the short-term upward lift on gold was absent this week as speculators became temporarily occupied with technical factors...---(see url for full news, 24-hr newswire)--- Cavan Man (1/26/06; 13:29:21MT - usagold.com msg#: 140903) Gold ETF While I do not own any shares, I think it preposterous to take a position opposed to ownership of a gold ETF UNLESS as a substitute for physical gold. Speaking as a physical gold advocate with a healthy portion, it is folish to put all one's eggs in one basket--utter incompetence IMHO. A mixture of assets denominated in other currencies to BALANCE and DIVERSIFY one's holdings is the proper strategy. Cavan Man (1/26/06; 13:25:18MT - usagold.com msg#: 140902) LOWBALL Updated: 11:56 a.m. ET Jan. 26, 2006WASHINGTON - The deficit will reach at least $337 billion for the current budget year, the Congressional Budget Office estimates, and the deficit is likely to go higher because of tax cuts and new additional spending for hurricane relief and the war in Iraq.The deficit estimated by the nonpartisan CBO was lower than predicted by the White House budget office, which two weeks ago said the 2006 deficit would top $400 billion because of emergency aid for victims of hurricanes Katrina and Rita.Deficits for 2006-2010 will total $1.3 trillion, CBO predicts, but such "baseline" figures may prove inaccurate because of the rules the scorekeeping agency has to follow when producing its estimates. For instance, the agency does not account for upcoming Bush administration requests for the war in Iraq or additional hurricane relief, which promise to add tens of billions to the 2006 deficit. TownCrier (1/26/06; 13:08:54MT - usagold.com msg#: 140901) Federal Reserve again buying Treasuries in open market http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh58546_2006-01-26_15-43-34_n26380106_newsml The Fed today again turned on the new cash pump, adding $23 billion in temporary cash to the money supply with a $13 billion operation in overnight repos and a $10 billion op through 14-day repurchase agreements.More significantly, for the second straight day the Fed also used the open market to buy Treasury coupons outright, in the process adding $1.19 billion to the 'permanent' money supply through the new cash created via this transaction.When you see that money is made this easily, you know that you need to rely on something more substantial as the basis for your savings. Choose gold.R. USAGOLD - Centennial Precious Metals, Inc. (1/26/06; 12:58:57MT - usagold.com msg#: 140900) We can help your portfolio SHINE!! http://www.usagold.com/webads/gold-coins.jpg Click url for a portfolio worth a thousand words.Toll Free 1-800-869-5115 Belgian (1/26/06; 10:05:57MT - usagold.com msg#: 140899) Gold ETF The whole debate (and different arguments) about the silver ETF, evidences the real purpose for the gold ETF. Draining (canalizing) fiat that would otherwise have opted for goldmetal in possession.Evidence (to me) that the $-goldprice controlling faction has already gone desperate. Even the goldminers have no other choice than to be happy with it as they see the price of their product further managed by their bankers, holding most of the miners in their (financial) grip. The ongoing gold-revaluation will crush all these constructions, slowly but surely. Watch it ! TownCrier (1/26/06; 09:56:49MT - usagold.com msg#: 140898) "Buy gold now..." http://www.gulfnews.com/business/Commodities/10014293.html "Buy gold and jewellery now - this is not a campaign punchline but advice to investors and consumers by industry experts."01/26/2006 (UAE) Dubai: The UAE gold and jewellery market is expected to grow 25 per cent in sales this year even though the local price of the yellow metal is expected to hit Dh80 per gram, up from the current Dh60. [... that represents a 33% increase.]Even though global prices are approaching $600, industry experts told Gulf News that local and regional demand is expected to grow in the first quarter. At the same time, the global price is expected to touch $650 in the first half of the year.the economic situation in the Middle East high oil prices and the weakness of some currencies and economies is pushing the international and regional investment funds to increase the share of gold in their portfolios....people are losing confidence in currencies and the stock markets. "The Tokyo stock market collapsed last week and investors had begun to move towards the metals, especially gold. If you buy gold you will not lose anything at the end of the day."The Dubai Gold and Commodities Exchange, the city's new gold derivative exchange, will soon extend trading to all seven days of the week from five now, its chairman said yesterday.^---(from url)---^Coming soon... benchmark pricing seven days a week from an important physical market center, Dubai, "..being located between the key gold consuming market of India and producers in Africa."The market is evolving in the same positive directions from many different corners of the world, almost as if in concert.Sweet melodies and harmonies are there for those with an open ear to listen.R. TownCrier (1/26/06; 09:47:35MT - usagold.com msg#: 140897) Oil-spattered gold http://www.moneyweb.co.za/education/investment_insights/858464.htm 26 Jan 2006 (Moneyweb) -- Global investment bank JPMorgan is advising its clients to buy gold, which it says could reach nearly $600/ounce by year-end.But, should the political tension in Iran blow up, sending the oil price soaring, there is a possibility that gold could reach as high as $800/ounce.This is linked partly to the likely "influx of petrodollars from the Middle East", looking for an investment home, and partly to the expected increase in demand for safe-haven assets such as gold. At such times, demand for US dollars wane.Meanwhile, even if the Iranian situation is defused, tight mining supplies and a slowdown in central bank gold sakes will be enough to keep the gold price lofty.It sees the recent breather in the gold price trend as a buying opportunity."This round of profit taking has opened up a good entry point to play the gold story and we are optimistic of its potential in coming months." ^---(from url)---^As the World Gold Council has said so well on previous occasions, 'A portfolio without gold is a luxury you can no longer afford.'Load up, and then rest with the ease of a job well done.Call USAGOLD-Centennial toll free for all the help you'll need to do it up right.1-800-869-5115R. TownCrier (1/26/06; 09:38:29MT - usagold.com msg#: 140896) Gold ETF as "the peoples' CB" Belgian,You're quite right to ridicule this notion. Apparently Mr. Davis doesn't quite fully understand the importance of 'control'.Just a few really quick and roughly assembled thoughts...Unlike Mr. Davis, a coalition of real CBs shows that they DO understand the meaning quite well and that they wield control over their assets when, as the time was ripe, they turned around the market in 1999 with a significant policy statement (per the Central Bank Gold Agreement) by which, among others, they agreed not to expand their gold leasings and their use of gold futures and options. In large part this marked the beginning of the end of the paper gold influence upon price discovery in the gold market -- a show of control by the central banks that their "important element" of global monetary reserves would cease to be maligned (misaligned) by financial legerdemain under their own jurisdiction and within their sphere of influence. The gold market would evolve toward physical preeminence and price discovery would evolve accordingly to corresponding full value price representation for the benefit of owners of the metal such as us and themselves.Where the "Peoples' ETF as CB" comes up absolutely short in this regard is in the lack of control that these people can wield over their assets."Asset ownership" under the framework of the ETF is first, foremost and only a mere 'ownership' of a SHARE in the fund, NOT of the gold in its account. And whereas the real CBs have taken collective non-leasing measures to ensure that the value of real gold ascends to beneficial heights, there is no such coalition to take similar action as pertains to the ETF shares themselves. That is to say, despite whatever perceived firmness there is to the underlying gold allocated to its account, on the surface there's nothing to prevent adverse effects upon price discovery of the shares from the vagaries of leveraged margin accounts, share shorting, and the whole gamut of other adversities and herd behavior that tend to strike unpredictably and uncontrolably at shares from out of the blue.That's why real central banks, and real people, too, do continue to choose the metal instead of shares in ETFs.R. Goldilox (1/26/06; 09:25:26MT - usagold.com msg#: 140895) Gloom and Doom? http://www.dieoff.org/ snip:"If a path to the better there be, it begins with a full look at the worst."-- Thomas HardyPetroleum geologists have known for 50 years that global oil production would "peak" and begin its inevitable decline within a decade of the year 2000. Moreover, no renewable energy systems have the potential to generate more than a tiny fraction of the power now being generated by fossil fuels.In short, the end of oil signals the end of civilization, as we know it.by Jay Hanson, Mar, 8, 2001 -- http://www.dieoff.orgWhat becomes of the surplus of human life? It is either, 1st. destroyed by infanticide, as among the Chinese and Lacedemonians; or 2d. it is stifled or starved, as among other nations whose population is commensurate to its food; or 3d. it is consumed by wars and endemic diseases; or 4th. it overflows, by emigration, to places where a surplus of food is attainable."-- James Madison, 1791-GoldiloxHere's an essayist with the cajones to tackle the "worst case" scenario. Not recommended for rose-colored glasses.Personally, I think some of the Black Ops energy reearch has the potential to transition us to a better energy position, but may also bring even greater threat potential. Just MHO. Goldilox (1/26/06; 09:06:22MT - usagold.com msg#: 140894) Davos: Unemployment a "global crisis" http://www.nbr.co.nz/home/column_article.asp?id=14180&cid=4&cname=Business+Today snip:A senior official with the United Nations has told delegates to the annual World Economic Forum in Davos, Switzerland, that unemployment is among the gravest security risks facing the world. Juan Somavia, the Director-General of the International Labour Organization (ILO), told delegates -- among whom is Trade Minister Phil Goff -- that unemployment is stands to creats a more fragmented, protectionist and confrontational world. "The global jobs crisis is one of the biggest security risks we face today," he said. Mr Somavia said there were 192 million unemployed and called for "a shift in economic and social policies to put decent work at the centre of national and international development efforts and government regulatory environments that would encourage entrepreneurship and innovation in job creation." Despite a robust growth of 4.3 per cent in 2005, the world economy did not deliver the 40 million jobs needed annually over the next decade for people entering the workforce, he said-GoldiloxWhile Maria Bartiromo is interviewing all the Davos attendees about the happy talk of great investment climates, this is the first mention I have seen of "issues" that have surfaced at Davos. One might think they do not want the "issues" to become public. Belgian (1/26/06; 07:00:17MT - usagold.com msg#: 140893) Gold ETF : The peoples' CB !? All those who seek "insurance" in ETF will have sore fingers when the gold-door is slammed ! Aiaaaiiiiiiii. TownCrier (1/26/06; 06:52:27MT - usagold.com msg#: 140892) China to ease foreign exchange accumulation http://news.ft.com/cms/s/ee7a1314-8e5a-11da-ae63-0000779e2340.html (FT) Davos, January 26 2006 -- China is committed to slower foreign exchange reserve accumulation, Zhou Xiaochuan, the governor of the People's Bank of China told the World Economic Forum, in rare comments about China's exchange rate policy.Mr Zhou said that his country was committed to increasing domestic demand, rebalancing the economy gradually away from net exports, promoting consumption, particularly in rural areas, all of which would reduce the pressure on the country to keep increasing the rate of reserve accumulation at an annual rate of $200bn a year.He said: "We need to make a change to stabilise the [foreign exchange reserve] situation".^---(from url)---^China could tackle many of the above-stated objectives if it simply continued to play the gold card.To oversimplify for the sake of brevity and general digestion, by continuing to encourage and facilitate its citizens to accumulate gold wealth, and by itself choosing imports of gold reserves instead of the current practice of holding onto surplus dollars from the net balance of trade payments, China could puts its international position in more balanced, stronger, better financial order -- leaving its critics with fewer items of contention to use as talking/whipping points.By the way, at current market prices of $560/oz, an annual net rate of reserve accumulation of $200bn per year translates into 11,100 tonnes of gold per year. At nearly 10% of the entire world's supply of above-ground gold, that would surely be a ridiculously large quantity of metal to serve this purpose, especially when a much smaller quantity could do the same job more easily -- all it requires is the ongoing evolution to a much much higher price per ounce.All in good time/transition.R. Goldilox (1/26/06; 04:38:59MT - usagold.com msg#: 140891) Mineset Daily Report http://www.jsmineset.com/ snip:Gold has a strong magnet pulling on it from above $600. The move seems to me to be here and now. The box formation that I outlined to you yesterday as the tightening of the supply/demand forces between the Titans broke out to the upside today. $575 - $580 and then to a shoot out at $600 appears to me to be directly in front of us. The US dollar is the common share of the US Inc and the clouds are darkening on the horizon. Both the fundamentals and the technicals are now weak so a bullish case for the US dollar, short of a major terrorist attack on Europe, is weak at best.You need to keep in mind that there is a simple equation out there. This equation is a roll over US economic recovery = a significant drop of a much greater percentage in tax receipts = a huge move up in the US Federal Budget deficit. At the same time a larger US Trade deficit balance will impact along with the US Federal Budget deficit, the deficit in the US Current Account. All of this, when recognized, will result in the US dollar going to new lows below the low at which the counter trend bear market rally where the US dollar started, .8050 on the USDX.Today a large US Treasury auction for 2 year treasuries fell flat on its rear end leaving the underwriting US brokerage firms the buyers of the US Treasuries. A 2 year auction failing is a terrible embarrassment to it issuer, the US Treasury, and therefore the U.S. dollar. It will not be long before the school of differential interest rates valuing currency falls on its rear end.Treasuries Fall as Demand at $22 Bin Government Auction Drops Jan. 25 (Bloomberg) - U.S. Treasuries fell after the government's sale of $22 billion of two-year notes drew the weakest demand since April as investors shunned yields that may be below the FederalReserve's benchmark interest rate in a week. www.bloomberg.comUS Treasury Secretary Snow today promised an austere focus on the US Federal Budget but like the good weatherman, it would be wise for him to look out the window before being definitive in his statements. The US Federal Budget is going higher and higher and higher because corporate profit in the key industries is headed lower with expense going up, not down.Even though many advisors in gold have actually signaled a top calling for sales of leading gold shares and gold, the price of gold is headed for a 6 in front of its level.-GoldiloxSinclair's perspective. It's the "little things," like declining profits (and tax revenues), 15% unemployment (cleverly reported as 4.9% by reclassifying anyone not receiving "benefits"), expensive military adventures and reconstruction, and outsourcing defined as productivity increase that are undermining the "American Dream". Goldendome's depiction is quite well supported by the facts.Does Secretary Snow think a little pork trimming is going to stem this tide? Especially in a Washington atmosphere where pork is "King", and lobbyists are ex-Congress who use their privilege to address the House to benefit their well-paying private interests. The other issue is the tiny amount of the budget that is considered "discretionary" spending. Debt service, entitlements, and defense make up a huge portion of the budget, and even eliminating the entire US goverment payroll would not offset the growing deficits."Between a rock and a hard place" is truly an understatement! Goldendome (1/26/06; 00:13:21MT - usagold.com msg#: 140890) Another reason to be blue. MThirsty1: We all -from time to time- have our reasons for feeling that things are collapsing on us, like the roof of a West Virginia coal mine. Here's another one. Read on.Some out there -though not on this site- have put forth the notion, that the United States actually benefits from our profligate nature. We are freed, they say, from the toil and mundane work of our fathers and grandfathers, buying those low value high labor intensive items from elsewhere, while we are freed to produce high value items with high returns for the input. The foreign workers or nations are then more than happy to reinvest their earnings here as a testament to the superior return opportunities here in the United States. [Examples of this are said to abound in the computer industry; where the foreign manufacturers of components profit very little from their production but, the name brand marketing company here in the U.S. profits highly from the finished product.] Well, We always find it troubling when someone puts forth these notions that those who are smart are somehow losing at things, while those who are foolish are winning.It reminds us of those situations like baseball, where one team that we think should be doing well isn't, while their opponents continue to win. So, along comes a pundit for the losing team who says: Well -- we're just saving our best pitchers and resting our players, but when it comes to crunch time and we play these other guys, we'll win-- you'll see who's better... Well, unfortunately, it doesn't usually work out that way. What we usually see, is that there is a good reason that the one team is winning, and they usually continue to win, regardless of what the other team said would happen in crunch time. Trends usually only change for a reason better than bluster.What we see today on the U.S. scorecard are consistent and continuing losses of good high paying U.S. jobs, as indicated by the continual and growing levels of deficits at all levels of measurement, and in particular, the trade and the current account.Also, the truth is, that the United States really doesn't export all that much anymore. And not only that, we're also making less of most everything else for our own domestic consumption.A key to the historic strength of the U.S. democracy has always been the fact that through hard work and dedication to a job, a person could usually make a good living for his family, in a job that paid decently and often had benefits that bettered their living standards. A person could choose many facets of work and career and do well. We believe that if, as some are saying, that all of these jobs are unnecessary, that then, eventually, we may have to worry about the cohesiveness of our very society. To say that paper shufflers and the service sector are somehow going to make up for the pay and profits lost by the country's manufacturing industries, has so far proved, incorrect. Those service sectors will employ very few overall, and at greatly reduced wages and benefits. If we throw in the rest of our white collars in government and services, we still account for only half of the population, and government workers are generally cost centers rather than production centers.We remember that this nation is one where you could work with a blue collar or white. Where you could wear a hard hat or felt hat and be pretty well assured that the work that you did would support your family, often with added benefits. We should be concerned that as we lose to the world, eventually, the economic hardships and desperation that former workers experience as they encounter industrial sellouts at their expense, could eventually, bring strain on our economic fabric as worker horizons darken. ViewYesterday's Discussion.
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