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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 UpgradeFrom 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 timesAmount allotted to bidders 644,400 ozAllotment price $273.50Scaling 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) Hard assets... Easy access! http://www.usagold.com/ProductPage.html
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