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ARCHIVED DISCUSSION FROM 11/27/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

uponroof (11/27/01; 23:09:32MT - usagold.com msg#: 65980)
XAU outperforms POG today
A very bullish sign.

Other interesting indicators include the long dated forward futures contracts which are drying up. Why? They can't draw in option underwriters at these ridiculous prices knowing financial situations simply dictate a higher POG. Long term rates confirm this.

Warning signs of failing manipulation? A serious problem in covering December futures?

Buy gold or silver for Christmas/Hannakuh gifts. You'll look very smart when they double in cost (eventually of course).

Netking (11/27/01; 22:59:53MT - usagold.com msg#: 65979)
Japan's sovereign rating downgraded
http://afr.com/asia/2001/11/28/FFX9T6BZJUC.html
AFR-Nov 28th.

Snippet:
The grim state of the Japanese economy earned the nation a sovereign credit rating downgrade from Standard & Poor's on Wednesday, but the yen and Japanese Government bonds rallied on relief the news wasn't worse.

In cutting Japan's foreign currency rating from AA+ to AA, S&P cited the slow progress by the administration of Prime Minister, Mr Junichiro Koizumi, in carrying out its promised structural reforms.

"Although marginal progress may be achieved, Standard & Poor's expects further significant weakening of both the Japanese economy and the government's fiscal position before more radical action is taken," the agency said.

S&P cited Japan's crippled financial sector, rising debt burden and a "fundamental institutional dysfunction" with the agricultural, construction and retail sectors wielding disproportionate power and the bureaucracy dominating the executive . . . . "
------------------------------------------------------------
Comment: So there you have it, slow Japanese govt. progress and a further significant weakening of both the Japanese economy and the government's fiscal position. In my humble opinion I'd say that S & P were kind on the Japanese. - Netking

Black Blade (11/27/01; 22:42:39MT - usagold.com msg#: 65978)
Consumer Confidence Index Falls Three Points
http://www.conferenceboard.org/search/dpress.cfm?pressid=4677

Snippit:

The Conference Board's Consumer Confidence Index, which has declined significantly over the past two months, fell again in November. The Index now stands at 82.2, down from 85.3 in October. "Rising unemployment and continuing layoff announcements are dampening confidence," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "A turnaround in confidence levels is not likely before year's end, nor are retailers likely to enjoy a blockbuster holiday season."

Black Blade: Consumer confidence has fallen to a 7 year low and this is the fifth consumer monthly drop. So-called experts were surprised. Hmmm�

site steward (11/27/01; 22:34:13MT - usagold.com msg#: 65977)
HEADLINE: The Curse of a Strong Dollar
http://www.businessweek.com/bwdaily/dnflash/nov2001/nf20011128_4713.htm
As with almost all things, almost nothing is ALL good or ALL bad, black or white. We live in a world of grey, brightened (for some of us physical owners) by gold. Depending on your personal circumstances in life, the current state of the dollar -- including it's external exchange rate -- may work variously for or against you, yielding a net benefit or detriment.

The key for the intelligent and alert participants in life's little drama is to determine how to play the cards which are dealt to you. That is to say, the challenge is to determine how to play them in your favor.

The highly-valued dollar is great for American importers while at the same time it is not so good for exporters. One one hand it is great for those with big dollar-denominated bank accounts. On the other hand it isn't good for anyone losing their job simply because they are rendered noncompetitive due to shifts exchange rates in an interdependent world of international trade. Until things change, that is.

Using your best thinking cap, for how long do you think our "meddling" political leaders will tolerate the conditions described in this article's interview with Timken CEO James Griffith? (excerpt follows)
-----------
Q: How would you describe the status of the U.S. manufacturing sector at the moment?

A: ...You can see by the number of steel companies that are bankrupt in America today [how rough it is]. We had hoped to see something of a turnaround in the fourth quarter of this year. Obviously, September 11 stole that. To put it in very personal terms, Timken has reduced its employment by almost 2,000 people in the last 18 months, and that is a direct relationship to the recession that we're in.

Q: What's the state of international trade in manufactured goods? Have manufacturing exports or imports suffered?

A: The value of the dollar is a very significant factor for us. The U.S. dollar is overvalued against other major world currencies by something on the order of 30%. Again, it's not September 11 that's so much the issue. It is that over the past three years, the U.S. dollar has risen to uncompetitive levels. That is a big piece of what's driving the manufacturing recession.
----------

Life is full of cause and effect, action and reaction. Without boring you in this post with the many details, significant diversification into gold is an absolute must at this time for the intelligent player. But you won't have to take my word for it. The headlines will spell it out quite clearly -- like sports scores after the game.

R.

Netking (11/27/01; 21:42:46MT - usagold.com msg#: 65976)
Silver - CFTC Commitment of Traders
http://www.321gold.com/cot_silver.html
The important number is that of the 'Commercial Shorts'(remember they dictate the direction or lack of) down a significant 1,838 . . . . I wonder if we witnessing the beginning of a 'sea change' here.

*** Gold ***
Check out the gold COT stats with the 'Commercial Shorts' down a significant 15,620. Total Commercial longs starting to even up a little at 51,619 against Total Commercial shorts just a little higher at 54,108, food for thought . . . .
http://www.321gold.com/cot_gold.html

Waverider (11/27/01; 21:36:41MT - usagold.com msg#: 65975)
Rhodium
Check out the spot price of Rhodium - up $250.00 (33.3%). The Russians won't cut back on oil production but maybe have on rhodium exports? Anyone know what's cooking?
Waverider

Cavan Man (11/27/01; 21:08:19MT - usagold.com msg#: 65974)
Max Rabbitz
I heard the JPM rumor from a very large metals house in NYC. Perhaps someone there read the Droke article; perhaps not.

Black Blade (11/27/01; 20:44:57MT - usagold.com msg#: 65973)
Newmont says Lihir Gold attractive
http://biz.yahoo.com/rf/011127/syd180513_2.html

Snippit:

MELBOURNE, Nov 28 (Reuters) - Newmont Mining Corp said on Wednesday Lihir Gold Ltd was a very attractive asset and could be a potential opportunity if its takeover offer for Australia's largest gold miner Normandy Mining Ltd (Australia:NDY.AX) succeeds. ``A number of people have suggested that would be a fine follow-on transaction and it might well be, but that depends on the market dynamics and it depends on a lot of things,'' Newmont's vice president of corporate development Randy Eppler told reporters.

Black Blade: Lihir next? Consolidation is the name of the game.

Waverider (11/27/01; 20:35:39MT - usagold.com msg#: 65972)
test
test only

site steward (11/27/01; 16:22:16MT - usagold.com msg#: 65971)
Words of advice for gold investors
http://www.usagold.com/cpm/goldhelp.html
From someone who has three decades of hands-on experience in this field. He's a fountain of information, folks, and you should get acquainted with him and his capable brokerage staff if you are contemplating any level of investment in gold.

R.

Max Rabbitz (11/27/01; 16:02:28MT - usagold.com msg#: 65970)
CBOMC warns about J.P. Morgan
.....and USB Piper Jaffray gives it an Upgrade

From Cliff Droke's latest essay (Nov 28) over at the neighboring castle: An open letter from the Central Bank Oversight & Monitor Committee(CBOMC) to central bankers, secretariats, and governors last week addressed the inherent weaknesses in one of the leading money center banking stocks, J.P. Morgan, and the potential vulnerabilities it presents to the U.S. financial system. The CBOMC letter stated, "What we could be seeing right now are the early tremors going through their common stock, reflecting in part a plunging U.S. bond market, and massive debt repudiation by Enron and Dynegy."

The committee went on to make the shocking assertion that "The entire derivative pyramid will come down around this institution [JPM] and other players having extreme risk exposure. The Federal Reserve will be powerless to prevent this unraveling. To attempt a remedy would be to threaten the recovery of the entire world economy, and the political
institutions of same."

Max: Sounds serious�..but then this morning USB Piper Jaffray upgrades JPM to "buy" from "hold" because "Analyst Andrew Collins believes the company is recognizing the long-term potential of the J.P. Morgan-Chase Manhattan merger, particularly in capital markets, and is creating "excellent" long-term earnings growth capabilities. Although he is anticipating a relatively weak fourth-quarter earnings performance and continued credit quality deterioration over the next 9 to 12 months, "we think the U.S. economy may start to recover during the second half of 2002, leading to much better fundamentals at the company."

Max: blah blah blah�..I thought it was supposed to be the second half of 2001 not 2002. JPM was up 1% today on the upgrade. What is the CBOMC? I've never heard of it before. It must be a private group. Their warning sounds to alarming for any government/banking group to have said.

site steward (11/27/01; 15:55:58MT - usagold.com msg#: 65969)
HEADLINE: Argentina Bonds Fall on Report IMF Wants Devaluation of Peso
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_currency&s=APAPyVBVYQXJnZW50&ao=8138167
Buenos Aires, Nov. 27 (Bloomberg) -- Argentine bonds dropped and demand for the currency fell after a newspaper reported the International Monetary Fund wants the government to devalue the peso to help pull the economy out of a three-year slump.
+
Economy Minister Domingo Cavallo told business and union leaders Sunday that the IMF is pressuring the country to give up a decade-old system that pegs the peso one-to-one with the dollar to help lower companies' costs...... The government, which is defaulting on most of its debt, also said this weekend that the October budget deficit widened from the same month last year after tax revenue fell.
-----------------

Bottom line: Too big to fail. Sadly, the peso WILL devalue (in REAL terms), and it will do so whether or not the dollar peg is maintained. I'll leave it to the reader to do the relative devaluation "math".

Diversification into gold will bolster your portfolio against REAL devaluation -- not mattering whether it is denominated in pesos or dollars.

R.

site steward (11/27/01; 11:59:14MT - usagold.com msg#: 65967)
Fading paper reserves in the Eurosystem
Continue to be busy "stewarding" the site to make changes, additions, and improvements to various pages, but thought a short break was in order to stop by the Table here (where all the action is.) Three weeks of consolidated financial statements for the Eurosystem have accumulated on my desk. Accumulated not because I haven't read each of them when they arrived (I have), but because their physical presence is a reminder that I have not yet shared comments on them. Until now.

For the three-week period of November 5 to November 23, there has been no change to the Eurosystem's gold and gold receivable assets, holding steady at EUR 128.233 billion in value (12,521 tonnes gold).

As you will recall, the Eurosystem values its gold this quarter at EUR 318.53 per ounce. The next mark-to-market revaluation will occur in 5 weeks, on December 31 -- which also happens to be the eve of the introduction of euro notes and coins.

While the Eurosystem's gold assets have remained unchanged, the net position in foreign currency has continued to reflect a long sliding drawdown. Foreign paper currency assets that began the period have been reduced in value by EUR 1.2 billion, bring the net position to EUR 255.9 billion. (I might whimsically add that, in the form of electronic transfer, this quantity represents 0.0 tonnes of assets.)

to borrow from someone much brighter than myself: you, too, can follow in these footsteps of giants. Acquire and hold onto gold while liquidating your paper in preparation/positioning for the transition to a modified financial structure.

R.

uponroof (11/27/01; 11:43:23MT - usagold.com msg#: 65966)
Cavan Man
Cavan Man thanks for that Buckler info. Much appreciated. I sincerely hope he's right. However, I am having trouble believing the euro will extinguish dollar dominance without first an inhouse American financial tragedy of major scope.

For the dollar to lose ground as thee world reserve currency it will take more than simply offering a European alternative. China's 10% move is to be expected as trade there changes to include increased imports from European nations. Do the Chinese have an agenda to bring down the dollar? They better first increase exports to European nations beyond those of American duties or they will be shooting themselves in the foot.

Regardless, I guess the question is, how much of a hit can the dollar take before it suffers into 2nd place? Will a shared reserve status do it? No. The die has been cast and fates are sealed. The euro is an underling to the dollar through countless political and monetary agreements IMHO. As long as the dollar remains in first place the effects of the euro will be averaged out.

Until internal domestic dollar fortunes change through a derivative crisis etc, global confidence in the dollar will be unchallenged regardless of alternatives. The explosion of money (thanks Hoople for that post) is not just reckless watering down to stave off bill collectors. It is calculated global dependency strategy, and it's working. The more dollars they hold, the more they protect.

We need a serious crack in domestic dollar value, through a DOA Enron or two, before the world begins discounting the almighty dollar. American companies going bankrupt, which btw are on the increase, might be the first step in foiling the dollar's true 'intrinsic' value. An unwindable derivative nuke bomb, as a result of these bankruptcies, is possible. Could that convince the world to dump their dollars? Maybe.

Not saying it won't happen as Buckler says, and there are many more here who know much more than I on this, just not convinced given unceasing dollar strength in the face of numerous previous calamities. .02 and Thanks again.

site steward (11/27/01; 11:14:21MT - usagold.com msg#: 65965)
For the record: Today's BOE Gold Auction News Release
http://www.bankofengland.co.uk/
The Bank of England announces that the gold on offer (approximately 20 tonnes or 643,200 ounces) has been allotted in full at a price of $273.50 per ounce. Details of the result are as follows.

Amount of gold on offer (approx.) 643,200 oz
Amount applied for 1,655,600 oz
Times covered 2.6 times
Amount allotted to bidders 644,400 oz
Allotment price $273.50
Scaling factor at allotment price 82.7412 %

All accepted bids which were made at prices above the allotment price have been allotted in full at the allotment price. Valid bids made at the allotment price have been allotted an amount of gold equal to the amount bid for multiplied by the above scaling factor and rounded up to the nearest 400 ounces.

By close of business in London today, applicants whose bids have been successful in whole or in part will be notified by the Bank of England of the exact weight of the gold bars allotted to them and the amount payable in respect of their purchase. Payment must be made in US dollars to the Bank of England's account at the Federal Reserve Bank of New York, no later than 12 noon New York time on 29 November 2001.

On 7 March 2001, H M Treasury announced that the Bank of England, on behalf of H M Treasury, would sell approximately 120 tonnes of gold in a programme of six auctions of around 20 tonnes each in the financial year 2001/02 on the terms and conditions set out in an Information Memorandum that was published on 7 March 2001. This is the fourth auction in the programme of six. The next auction will be held on 16 January 2002. It is intended that the remaining auction will take place on a date to be announced in March 2002.

Netking (11/27/01; 11:02:46MT - usagold.com msg#: 65964)
Gold war - bits 'n pieces
http://biz.yahoo.com/rf/011127/l276114_1.html
Snippets from the last day on Anglo V's Newmount for control of Normandy:

***AngloGold gets Australia govt OK for Normandy bid***
South Africa's AngloGold Ltd said on Tuesday it had won approval from Australia's Foreign Investment Review Board (FIRB) for its proposed acquisition of gold miner Normandy Mining.
http://biz.yahoo.com/rf/011127/l276114_1.html

*** "We Provide Better Alternative for Normandy Shareholders" - Newmount ***
Newmont Mining Corporation emphasized that Newmont provides a better alternative for the shareholders of Normandy Mining Ltd than the offer made by AngloGold Limited. "I am disappointed that rather than focusing on shareholder value, AngloGold is apparently attempting to deny Normandy shareholders their ability to make a choice. We are committed to getting our offer which has been unanimously endorsed by the Normandy Board out to Normandy shareholders as soon as possible," said Wayne Murdy, Newmont President and Chief Executive Officer."
http://biz.yahoo.com/prnews/011126/lam090_1.html

*** "Dispatch Of Target Statement To Proceed" Normandy ***
The Takeovers Panel ("Panel") has today revoked its interim order of last Thursday restraining dispatch of Normandy Mining Limited's (TSE:NDY.) ("Normandy") Target Statement in response to the takeover offer by AngloGold Limited ("AngloGold") for Normandy shares.

The Panel has concluded that, contrary to AngloGold's assertions, Normandy's Target Statement does not need to be amended but can instead be sent in its current form. Normandy is disappointed with the unnecessary delay caused by AngloGold's application to the Panel. It is however pleased that the Target Statement containing the Normandy Directors' recommendation to reject AngloGold's offer can now be sent to shareholders for consideration.
http://news.excite.com/news/bw/011126/normandy-mining

*** Newmont claims to be better suited to Normandy than Anglo ***
Newmont Mining Corp. emphasized Tuesday that it
provides a better alternative for the shareholders of Australia's Normandy Mining.
http://www.futuresource.com/news/news.asp?story=i4205623980151996480

Centennial Precious Metals, Inc. / USAGOLD (11/27/01; 10:56:58MT - usagold.com msg#: 65963)
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http://www.usagold.com/ProductPage.html

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Centennial Precious Metals, Inc. / USAGOLD (11/27/01; 10:54:20MT - usagold.com msg#: 65962)
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Netking (11/27/01; 10:18:49MT - usagold.com msg#: 65961)
Iraq rejects Bush demand: If hit, Saddam may attack Israel
http://www.haaretzdaily.com/hasen/pages/ShArt.jhtml?itemNo=99447&contrassID=1&subContrassID=0&sbSubContrassID=0
The public are being prepared for next phase and for a possible move within 2-3 months(?)to "finish the job".

Iraq rejected Tuesday U.S. President George Bush's demand that it allow UN weapons monitors back into the country. On Monday Bush said that if Iraq does not allow United Nations weapons inspectors back into the country to show the world it is not developing weapons of mass destruction, then Saddam Hussein will "find out" what the consequences are.
This was Bush's clearest indication yet Saddam Hussein's regime could be the next target in the U.S. war on terrorism.

Many hawks in Bush's administration and the media have openly advocated taking on Iraq once the Afghanistan campaign is wrapped up. In recent days, it has appeared that the administration was preparing the public for the next phase.

IDF sources were quoted by Israel Radio on Tuesday saying that they believed the U.S. would attack Iraq in two to three months. Deputy Chief of Staff Moshe Ya'alon, said Monday that if attacked, Iraq might well fire missiles and send planes against Israel.

Likud Knesset Member Moshe Arens, who was defense minister during the Gulf War in 1991 when Israel, under U.S. pressure, refrained from hitting back at Saddam after Scud missiles rained down on the country, said he believed that if the Americans decided to hit Iraq, they would "finish it this time. . . . "

The Hoople (11/27/01; 09:54:16MT - usagold.com msg#: 65960)
Boom goes the paper
The M3 money supply surpassed the 8 trillion milestone this week ( no M3 8,000 party on CNBC though). With 64 billion added last week alone according to Barron's it is now warp speeding at a 42% annual rate. Also in the same Barron's market lab section is the Treasury Gross Public Debt now standing at 5,866.3 tr. , up 164 billion year over year. The Treasury Statutory Debt Limit is fast approaching at 5,950.0 tr. and at this pace we could be arriving there by early spring. This could be real tricky explaining the need to raise the debt limit again after not so long ago raising it by an additional 700 billion. Shoots that surplus myth all to hell. Damn! another hole in the dike. I will be astounded if this game can last much longer and gold and other commodities can remain suppressed under such severe hyper-inflating of paper currency. It will probably end quickly, and your (gold and silver) bets had better be in place.

Cavan Man (11/27/01; 09:34:45MT - usagold.com msg#: 65959)
uponroof FYI
From Buckler's Privateer #438
Six Weeks To Go:

In six short weeks, the Euro arrives as cash. By February 28, the Euro will have
fully arrived and then the U.S. Dollar has lost its singular position in the world's
monetary system. By February 28, there will be two such acceptable world
currencies, each a "reserve currency" in its own right. By taking the step to
change 10% of its foreign exchange reserves into Euros, China has led the global
parade to recognise this.

That 10% of China's foreign exchange reserves is the first large amount shifted
into Euros. The Privateer has long since identified this as "displacement". Many
other nations will follow suit, changing part of their foreign exchange reserves
into Euros. As each nation does so, it displaces U.S. Dollars and sends them into
global circulation. From being locked up in the vaults of Central Banks - and for
that reason, out of circulation - these U.S. Dollars will now be released into
circulation.

Economically, this will have the same effect as if additional U.S. Dollars were
suddenly being printed offshore. The effects upon the U.S. Dollar will be the same
as if such a thing had actually happened. This U.S. Dollar "displacement" is
beginning at the same time as the Greenspan Fed is manufacturing heaps of new
U.S. Dollars inside the U.S. monetary system. That means that early next year at
the latest, there will be TWO massive streams of U.S. Dollars flowing across the
world.

These two new streams of U.S. Dollars will both add to all the already circulating
U.S. Dollars, those circulating inside the U.S. and those already circulating
outside.

uponroof (11/27/01; 09:25:27MT - usagold.com msg#: 65958)
Pension/Retirement Funds.......the backbone of the stock market, now turn to currency management specialists
As the world embraces paper, paper specialists are growing in demand. Pension Fund managers are turning to specialized currency consultants as global porfolios are being maxed. This of course can only further fascinate the commom man who is endlessly seeking to understand new ways of profiting 'on paper'. The world is a big place with lots of greener pastures.

And so as the paper whilwind continues to blowhard non stop around this globe, imagine the hype maximizing China's endless supply of paper might ad.

Meanwhile, as we watch another 'auction' settle the POG to the low 270's. I am reminded of the final scene of one of my favorite movies:

"...A warrior goes to you swift and straight as an arrow shot into the sun. Welcome him and let him take his place at the council fire of my people. [pause] He is Uncas, my son. [pause] Bid them patience and ask death for speed; for they are all there but one - I, Chingachgook - Last of the Mohicans..."

I can only hope that these currency hedgers are someday soon, (before we are all "sitting at the council fire") in extremely GREAT demand, due to out of control competitive currency devaluation.

***********

INTERVIEW-Risk-wary pension funds seek external forex help

By Natsuko Waki
LONDON, Nov 26 (Reuters) - Growing awareness of currency
risk in overseas investment is boosting the number of pension funds outsourcing their foreign exchange management to specialist overlay firms, a top industry expert says.

Currency overlay takes the foreign exchange exposure of a
portfolio and manages it separately, unbundling currency risk from that of the underlying asset. It began in the UK in 1985 and subsequently took root in the United States.

"There is slow but steady growth in the number of pension
funds using currency overlay programmes and we see hardly any terminations," Bill Muysken, head of global research at William M. Mercer Investment Consulting told Reuters in an interview. Muysken said around 300 pension funds with a combined asset size totalling $150 billion currently use currency overlay. This translates to around five percent of the number of large pension funds worldwide.

"The market is gradually becoming more educated on currency management. About 20 to 30 new currency management programmes are established each year, so the number of pension funds using currency overlay could double over the next ten years," he said. Mercer conducted a survey last year covering currency issues relating to pension funds. It received responses from 111 funds in Australia, Canada, Japan, the UK and the United States, with assets totalling $405 billion as at end-1999.

One out of five said most of the better specialist currency overlay managers are able to add value over the long term through active currency management. Of 12 respondents using overlay managers, 11 said the currency hedging programme had been effective with nine of the 12 also saying they were satisfied with the results. "We think there is plenty of evidence to suggest currency managers on average add more value than they lose and that the risk-return trade-off is quite attractive," Muysken said.

A separate survey by consultancy Currency Performance Analytics showed active currency overlay managers have boosted returns by nearly two percent on average.

PROFITING FROM INEFFICIENCIES

Foreign exchange is by far the world's biggest market with average daily turnover totalling $1.2 trillion. The latest Bank for International Settlement survey showed trading between banks and financial customers rose 18 percent in
three years, suggesting the increasing role of asset managers. Muysken said most of the currency transactions are driven by necessity rather than profit motivation, thus giving opportunities to active currency managers to enhance returns.

"Active managers are a small portion of market participants actually seeking to take advantage of exchange rates. They can take advantage of the inefficiencies and a lot of supply and demand distortions across the market," he said. "There are plenty of speculators and proprietary traders who seek to profit from exchange rate movements, but their time horizons tend to be fairly short. Currency overlay managers generally have longer time horizons, so they can afford to pursue opportunities that might take months or years to play out."

Muysken estimated that of around 300 pension funds using currency overlay programmes, less than 10 percent are using passive overlay. He added that currency overlay becomes meaningful when a fund has more than 10 percent of its assets invested overseas.

DISPELLING THE MYTHS

Muysken said the growth of currency overlay has been also driven by the increasing sophistication of specialist managers. "Five years ago, when clients wanted a shortlist of five top quality currency managers we might have been struggled to put one together. But now it's pretty easy to do it," he said. "The number of high quality managers with very strong credentials has grown. The market develops as demand grows and then supply increases as well."

Muysken estimated that there are around 40 fund managers globally who specialise in the management of currency risk and the number is growing gradually to meet increasing demand. "Still, the number one obstacle is education -- there are lots of myths and confusion about currency management that turn people off." Muysken said pension funds need to get accustomed to the idea of hiring an additional manager for assets that are already being managed by others and paying separate management fees.

"Many pension fund managers mistakenly think that currency hedging is risky and complex," he said. "In fact currency hedging reduces risk in almost every case, and is surprisingly easy to implement."

((Natsuko Waki, London Capital Markets, +44 207 542 6721,
natsuko.waki@reuters.com))
REUTERS
*** end of story ***

George (11/27/01; 09:20:14MT - usagold.com msg#: 65957)
FED
http://www.futuresource.com/charts/charts.asp?type=future%2Cindex&symbols=USZ1&period=D&varminutes=&bartype=bar&symlist=&month=&year=&study=NONE&STUDY0=&STUDY1=&STUDY2=&STUDY3=&bardensity=LOW&size=SMALL&r=&x=0&y=0
I think the FED is in big trouble. It would appear that they are "letting" the stock markets decline today and are going to try and prop up the bond market. That's a big job! The FED is averaging 6 billion in repos everyday now.

http://app.ny.frb.org/dmm/mkt.cfm

That means they can move markets up 60 billion in cap if, and only if, redemptions are constant. Canada cut rates 1/2 point. I think the US will have to follow. They will also have to slam gold or at least try to anyway. Looks like the FED is heading down hill and the breaks are overheating.

"We manage the structure of markets." - Alan Greenspan

George (11/27/01; 08:59:14MT - usagold.com msg#: 65956)
FED's scam
http://www.capitalstool.com/cgi-bin/ikonboard/topic.cgi?forum=5&topic=93
Christian,

Good post - follow this thread through for more info.

Christian (11/27/01; 08:07:37MT - usagold.com msg#: 65955)
(No Subject)
The ESF is laundering money just like dope growers do. The ESF is buying index funds to drive the market up while the index funds buy the stocks that make up the index. The ESF profits no matter which way the market goes as long as it goes their way. The index funds are using new FED money to buy the index or short it to make profits. Dope growers disguise the source of their money by using the dope cash to buy pricy things. Then they sell those pricy things and move the money into a bank account. The laundered money is made legidimate by the sale of the pricy thing. The FED does the same thing with the stock market with all that new money creation out of thin air. The lack of real borrowers forces it to do so. Japan did the same thing for years. When that no longer worked it resorted to government spending. We are going down the same road. An Afghan farmer can make a profit of $3,000 growing opium, or $35.00 an acre growing wheat. The Northern Alliance promissed the west lots of cheap dope in return for control of Afghanistan. The Taliban at least made possible for an oil pipeline they could not deliver. How could they deliver something when they had no control over the territory. Northern Alliance like the Taliban may be able to deliver the dope, but it will never be able to deliver the pipeline. Any group of people from anywhere in the world can go th Afghanistan and blow a hole into the pipeline. There is simply to many people that hate us over there to make this pipeline a reality. We are not winning this war. Just another group of therrorists will simply pick up where the last one left off. The Teliban now has 15,000 troops fighting for the Northern Alliance. They are doing it for the dope profits to be made. There goes $6Billion USA tax payer money to built up the Taliban. How much tax payer money is it going to take to built up the Northern Alliance so we and European dope smugglers can import cheaper dope? Funny how we are financing both sides of the dope war. The banksters just love it.

Canuck (11/27/01; 07:11:10MT - usagold.com msg#: 65954)
More on BOC
"Lowest rate since 1960"

The interviewer asks "when do we see more??"

Canuck (11/27/01; 07:03:38MT - usagold.com msg#: 65953)
BAC lowers interest rate by 0.50%
Bank of Canada lowers short-term rates by 0.50 citing "excess capacity throughout 2002".

The yield curve steepens more.

Black Blade (11/27/01; 07:00:48MT - usagold.com msg#: 65952)
Holiday Shopping Turns Into a Bust!
http://www.latimes.com/business/la-000094379nov27.story?coll=la%2Dheadlines%2Dbusiness

Traffic at U.S. Malls Drops 7.4%

Snippit:

Retail: Survey showing year-over-year holiday weekend shopping trends signals possible weakness ahead. Discounters fare better than department stores. Retailers opened early during the Thanksgiving break and offered steep discounts, but weekend mall traffic nationwide was 7.4% below year-ago levels, according to a widely watched survey released Monday. Department stores generally suffered the biggest declines. The survey is worrisome for mall-based retailers because it could signal that recession-wary consumers are reining in holiday spending.

Black Blade: Add into this equation the deep discounts used to lure shoppers and the picture looks rather ugly. This recession is deepening in spite of the cheery fluff from the Pimps, Trolls, and Pied Pipers of Wall Street. People are spending less and doing their shopping at discount centers. I don't care what the unethical touts say, increased foot traffic and "window shopping" does not translate into increased sales. People are worried with rising unemployment, war, recession, etc. We live in "Interesting Times."

Black Blade (11/27/01; 06:32:05MT - usagold.com msg#: 65951)
Thwarted AngloGold May Up Normandy Bid
http://sg.biz.yahoo.com/011127/15/1xtoo.html

Snippit:

[Dow Jones] Following Takeovers Panel revoking interim order restraining Normandy (NDY) from sending target statement to shareholders, top-rated gold analyst says thwarted AngloGold (AGG) will likely up its bid. Analyst notes AngloGold and Newmont bid prices for Normandy are too close, says AngloGold will probably add cash component to its bid following sale of its Free State assets. But it won't stop there -analyst believes Newmont needs Normandy more than AngloGold does, expects Newmont to respond by upping own bid.

Black Blade: Actually it is the other way around. Anglo needs the Normandy acquisition worse for obvious reasons. However, both see the potential value of acquiring Normandy for increasing market share. This will turn into a slugfest with Wayne and Bobby doing their own version of "Celebrity Death Match."

The Invisible Hand (11/27/01; 05:37:56MT - usagold.com msg#: 65950)
BOE auction
BOE site not (yet) posting the result.
Found this on Kitco - FWIW
* BoE sold its 20-tonne tranche of gold at $273.50 a troy
ounce, as part of an ongoing series of regular auctions to
reduce Britain's gold reserves.

Canuck (11/27/01; 05:04:29MT - usagold.com msg#: 65949)
Euro Countdown
35 days

US$/Euro 0.878

The Invisible Hand (11/27/01; 04:47:53MT - usagold.com msg#: 65948)
Bad luck for Argentina
http://news.bbc.co.uk/hi/english/business/newsid_1678000/1678211.stm
BBC WorldService radio is reporting that the IMF sovereign bankruptcy thing, quoted in my post 65946, is not for tomorrow.

Belgian (11/27/01; 02:43:00MT - usagold.com msg#: 65947)
Test
Will explain later. Thank you all .

The Invisible Hand (11/27/01; 02:01:11MT - usagold.com msg#: 65946)
Argentina there we go - IMF Proposes Nation Bankruptcy Plan
http://dailynews.yahoo.com/h/nm/20011126/bs/economy_bankruptcy_imf_dc_1.html
WASHINGTON (Reuters) - The International Monetary Fund (news - web sites) on Monday unveiled groundbreaking plans to develop an international system to allow troubled countries to file for bankruptcy protection when their debts become unsustainable.
�

Netking (11/27/01; 00:55:58MT - usagold.com msg#: 65945)
Gold wars cont - The Colonials fight back
http://www.normandy.com.au/PDFNormandy/A261101.PDF
From Normandy's site:

DISPATCH OF TARGET STATEMENT TO PROCEED
The Takeovers Panel has today revoked its interim order of last Thursday restraining dispatch of Normandy Mining limited's Target Statement in response to the takeover offer by AngloGold Limited for Normandy shares. The Panel has concluded that, contrary to AngloGold's assertions, Normandy's Target Statement does not need to be amended but can instead be sent in its current form.

Normandy is disappointed with the unnecessary delay caused by AngloGold's application to the Panel. It is however pleased that the Target Statement containing the Normandy Directors� recommendation to reject AngloGold's offer can now be sent to shareholders for consideration. Dispatch of Normandy's Target Statement will begin tonight and is expected to be completed by close of business tomorrow.
Normandy has undertaken to the Panel that, if the AngloGold bid appears likely to close before a Target Statement in response to the proposed Newmont Mining Corporation ("Newmont") bid is given to Normandy shareholders, Normandy will publish (by release to ASX and newspaper advertisement) a Supplementary Target Statement in relation to the AngloGold offer in sufficient time for Normandy shareholders consideration. . . ."
------------------------------------------------------------
Comment: As you rightly have pointed out Sir Black Blade this fight will go on and on. However the longer this fight takes to find a winner the more likely it is that the New-Newmont group will be the victors. Many bullish factors for gold all begin to converge in the weeks now ahead of us now . . . .

As for Anglo shareholders, they fear quite rightly that their company will be relegated to the "desperate & dateless" category among gold stocks. With a new bull just beginning ahead, they may fall on the wayside as far as the investment public is concerned with appropriate share price punishment as the full manifestation of the ramifications of the hedge book become evident to all. - Netking

Black Blade (11/27/01; 00:09:40MT - usagold.com msg#: 65944)
Russia refuses to cut oil production at its own risk
http://atimes.com/c-asia/CK27Ag05.html

Snippit:

MOSCOW - Unstable oil price is threatening Russia's economic growth, warns a top government official. Russia's Minister of Finance Alexei Kudrin has urged the country's entrepreneurs to prepare themselves for "serious economic risks". Kudrin told the State Duma, the Lower House of parliament, last week that if the price of Russian Urals crude drops to US$15 per barrel, export duties will also fall. Economists fear that next year's gross domestic product growth (GDP) may fall below government projection of some 4 percent, and well below last year's unprecedented 8 percent growth. Russia, which is the second-largest exporter after Saudi Arabia, depends on oil for nearly two-fifths of its budget revenues.

NOW THE KICKER -

Sliding oil prices could weaken the ruble and force Russia to press for the restructuring of its $140-billion foreign debt. When oil prices slumped below $10 per barrel in the late 1998, OPEC took enough oil off the market to lift prices. In August 1998, low oil prices sparked Russia's financial crisis, making it impossible for the country to service its debts.

Black Blade: These passages about says it all. Third World backwater Russia cannot survive a severe oil price drop. OPEC can plunge Russia into the abyss if a price war erupts. Thought that the Russkie bond defaults created a few problems a couple of years ago for the likes of LTCM? Just wait until oil prices collapse.

Black Blade (11/27/01; 00:04:13MT - usagold.com msg#: 65943)
AngloGold admits it's turned hostile
http://www.businessreport.co.za/html/busrep/br_frame_decider.php?click_id=335&art_id=ct20011126211005177P524800&set_id=60

Snippit:

Johannesburg - AngloGold has taken the gloves off in its fight for Australian gold producer Normandy Mining, admitting yesterday that the bid could not be classified as "anything other than hostile". AngloGold said it was making a formal challenge to the competing offer by Newmont Mining of the US.

Black Blade: AngloGold has no choice. They "MUST" pursue a Normandy takeover. They are backed up against the wall. AngloGold "MUST" deliver ounces to feed the hedge book. That is apparently the same reason that Barrick was so desperate to acquire Homestake Mining. This could turn into a real slugfest. Talk about "Barbarians at the Gate."

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