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ARCHIVED DISCUSSION FROM 9/27/2003
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Waverider
(9/27/03; 23:51:44MT - usagold.com msg#: 109502)
Massive power cut hits Italy
http://news.bbc.co.uk/2/hi/in_depth/3146136.stm
"A series of massive power cuts has left almost all of Italy in darkness. The BBC's David Willey in Rome says that most of the country - from Turin in the north to the southern island of Sicily - is without electricity, after the power went off about 0330 (0130GMT). The grid failure appears to be similar to the problems that caused blackouts in the north-eastern United States and London last month. A meeting of the national civil protection authorities is scheduled for early on Sunday morning to discuss what our correspondent says is an unprecedented situation in the country."
Waverider: Mighty strange...massive blackouts have been rare events in the past 20 years or so, now this is the third within the past 2 months.
The CoinGuy
(9/27/03; 22:44:10MT - usagold.com msg#: 109501)
R. Powell
Rich,
Jim takes the time to put all of his shows in mp3 format, so you can download, and burn them on a CD and listen to them at your leisure. I'm on the road quite often, makes for a good time to catch up. If you don't have a CD burner, perhaps a friend does?
Good weekend to all,
The (physical) CoinGuy
Cavan Man
(9/27/03; 20:48:48MT - usagold.com msg#: 109500)
Very Good List
When John Embry speaks, all should pay attention.
15 Fundamental Reasons to Own Gold
By John Embry
1. Global Currency Debasement:
The US dollar is fundamentally & technically very weak and should fall dramatically. However, other countries are very reluctant to see their currencies appreciate and are resisting the fall of the US dollar. Thus, we are in the early stages of a massive global currency debasement which will see tangibles, and most particularly gold, rise significantly in price.
2. Investment Demand for Gold is Accelerating:
When the crowd recognizes what is unfolding, they will seek an alternative to paper currencies and financial assets and this will create an enormous investment demand for gold. To facilitate this demand, a number of new vehicles like Central Gold Trust and gold Exchange Traded Funds (Elf's) are being created.
3. Alarming Financial Deterioration in the US:
In the space of two years, the federal government budget surplus has been transformed into a yawning deficit, which will persist as far as the eye can see. At the same time, the current account deficit has reached levels which have portended currency collapse in virtually every other instance in history.
4. Negative Real Interest Rates in Reserve Currency (US dollar):
To combat the deteriorating financial conditions in the US, interest rates have been dropped to rock bottom levels, real interest rates are now negative and, according to statements from the Fed spokesmen, are expected to remain so for some time. There has been a very strong historical relationship between negative real interest rates and stronger gold prices.
5. Dramatic Increases in Money Supply in the US and Other Nations:
US authorities are terrified about the prospects for deflation given the unprecedented debt burden at all levels of society in the US. Fed Governor Ben Bernanke is on record as saying the Fed has a printing press and will use it to combat deflation if necessary. Other nations are following in the US's footsteps and global money supply is accelerating. This is very gold friendly.
6. Existence of a Huge and Growing Gap between Mine Supply and Traditional Demand:
Gold mine supply is roughly 2500 tonnes per annum and traditional demand (jewellery, industrial users, etc.) has exceeded this by a considerable margin for a number of years. Some of this gap has been filled by recycled scrap but central bank gold has been the primary source of above-ground supply.
7. Mine Supply is Anticipated to Decline in the next Three to Four Years:
Even if traditional demand continues to erode due to ongoing worldwide economic weakness, the supply-demand imbalance is expected to persist due to a decline in mine supply. Mine supply will contract in the next several years, irrespective of gold prices, due to a dearth of exploration in the post Bre-X era, a shift away from high grading which was necessary for survival in the sub-economic gold price environment of the past five years and the natural exhaustion of existing mines.
8. Large Short Positions:
To fill the gap between mine supply and demand, central bank gold has been mobilized primarily through the leasing mechanism, which facilitated producer hedging and financial speculation. Strong evidence suggests that between 10,000 and 16,000 tonnes (30- 50% of all central bank gold) is currently in the market. This is owed to the central banks by the bullion banks, which are the counter party in the transactions.
9. Low Interest Rates Discourage Hedging:
Rates are low and falling. With low rates, there isn't sufficient contango to create higher prices in the out years. Thus there is little incentive to hedge, and gold producers are not only not hedging, they are reducing their existing hedge positions, thus removing gold from the market.
10. Rising Gold Prices and Low Interest Rates Discourage Financial Speculation on the Short Side:
When gold prices were continuously falling and financial speculators could access central bank gold at a minimal leasing rate (0.5 - 1% per annum), sell it and reinvest the proceeds in a high yielding bond or Treasury bill, the trade was viewed as a lay up. Everyone did it and now there are numerous stale short positions. However, these trades now make no sense with a rising gold price and declining interest rates.
11. The Central Banks are Nearing an Inflection Point when they will be Reluctant to Provide more Gold to the Market:
The central banks have supplied too much already via the leasing mechanism. In addition, Far Eastern central banks who are accumulating enormous quantities of US dollars are rumored to be buyers of gold to diversify away from the US dollar.
12. Gold is Increasing in Popularity:
Gold is seen in a much more positive light in countries beginning to come to the forefront on the world scene. Prominent developing countries such as China, India and Russia have been accumulating gold. In fact, China with its 1.3 billion people recently established a National Gold Exchange and relaxed control over the asset. Demand in China is expected to rise sharply and could reach 500 tonnes in the next few years.
13. Gold as Money is Gaining Credence:
Islamic nations are investigating a currency backed by gold (the Gold Dinar), the new President of Argentina proposed, during his campaign, a gold backed peso as an antidote for the financial catastrophe which his country has experienced and Russia is talking about a fully convertible currency with gold backing.
14. Rising Geopolitical Tensions:
The deteriorating conditions in the Middle East, the US occupation of Iraq, the nuclear ambitions of North Korea and the growing conflict between the US and China due to China's refusal to allow its currency to appreciate against the US dollar headline the geopolitical issues, which could explode at anytime. A fearful public has a tendency to gravitate towards gold.
15. Limited Size of the Total Gold Market Provides Tremendous Leverage:
All the physical gold in existence is worth somewhat more than $1 trillion US dollars while the value of all the publicly traded gold companies in the world is less than $100 billion US dollars. When the fundamentals ultimately encourage a strong flow of capital towards gold and gold equities, the trillions upon trillions worth of paper money could propel both to unfathomably high levels.
The Invisible Hand
(9/27/03; 19:34:02MT - usagold.com msg#: 109499)
G7 persuaded to gamble with weapon of mass devaluation
http://observer.guardian.co.uk/business/story/0,6903,1051017,00.html
SNIP:
Extraordinary attempts to rebalance world economics with a new version of the Plaza accord (the 1985 agreement that lowered the dollar's value) ventured into uncharted territory when the G7 backed the desirability of 'more flexibility in exchange rates - for major countries or economic areas'.
==
Maybe brighter minds than mine can see the consequences of this.
My mind only equals devaluation with inflation.
Perhaps I should have snipped other parts of the article also.
R Powell
(9/27/03; 18:36:19MT - usagold.com msg#: 109498)
Phil 288 // Puplava's silver opinion
My computer does not speak. I wish it could and many others that I have to listen to couldn't, but it does not. Could you give us the highlights of what Jim Puplava had to say that led him to predict $10.00 silver within a year? Was he talking with other analysts? Of all the markets that I'm aware of, silver has the fewest followers with anything to say, probably because silver is such a small, obscure and overlooked market with very little in the category of new developments.
A broker once answered that the so-called small speculative trading class (in silver) is 40 year olders and older who have bought and hold silver but rarely trade it. By trading it, he was refering not only to selling on upmoves and rebuying on retractions, but also holding the longs and selling covered options and other such stuff. These small speculators, as usual, still have their large long position and have not varied it much at all for a long, long time.
I read here every day so please don't neglect a Puplava report even if you can't get to it for a while. Anyone else hear what was said??
Thanks
Rich
Clink!
(9/27/03; 17:40:38MT - usagold.com msg#: 109497)
A repeat of February ?
http://www.jsmineset.com/dispimg.asp?imgsrc=%2E%2Fimages%2Fchart%2Dsept272003%2D1%2Ejpg
Sinclair doesn't think so :-
Please keep these points in mind for the coming week:
• We penetrated over the line connecting the two tops of the 4.5 year Tea Cup.
• We broke out of a major triangle of February through August 2003.
• We have very significant support at $372- $376 which also approximates the Fibonacci 38% retrenchments Support Line.
• The dollar chart looks terrible with the only bull case I see being another Right Shoulder.
• The stock market rally is decidedly tired.
• There is an entire new presence in the gold bullion market which in terms of liquid capital eclipses everything in here already except for Dr. No and Huang.
I am convinced as a technician, as one who understands gold's fundamentals better than most, and as a person who has made his fortune in that metal, that we are in a wildly bullish period from all perspectives.
Gold did not turn decidedly bearish last week. This is nothing more than marketplace drama in the midst of a great bull market. Don't make more of this than there really is.
Cavan Man
(9/27/03; 16:10:38MT - usagold.com msg#: 109496)
Dollar Bill
Wisdom (Sophia)
Dollar Bill
(9/27/03; 15:07:46MT - usagold.com msg#: 109495)
*>*............+
The sentence should say "The national Geographic reporters, during thier stay, read about in the papers of at least one "untouchable" A DAY getting acid thrown in his face as punishment for objecting to the discrimination and oppression."
Dollar Bill
(9/27/03; 15:02:46MT - usagold.com msg#: 109494)
*>*............+
Greetings Sir Operative, I know you are aware of the propaganda we are constantly surrounded by in all subject that involve money or power.
I would caution that the view of the mideast that we have might be able to stand a review. If your neighbor excludes you, you will resent that. If your neighbor oppresses you, you will want some justice. If you cannot get justice, you will find the situation intolerable and will start to hate.
Due to the hindu religion and thier 4 castes, in a recent edition of National Geographic they said that during thier study of India, they read about at least one "untouchable" young man who had acid thrown in his face because he objected to this oppression. Like an "uppity nigger" was was hung in america during my fathers lifetime.
If a young man feel oppressed and has no recourse to justice, he will go to war.
We like to call that natural manly response "unacceptable"
when Palestinian young men throw stones and go to war.
Never recognising that the source is the exclusion of neighbors because a "better" group, more chosen by god, doesnt want them around.
That festering exclusion led to many reactions. One of them was 911.
ge
(9/27/03; 14:58:46MT - usagold.com msg#: 109493)
@ Operative
http://www.google.com.tr/search?q=cache:zTi5DGr-nvUJ:www.sumeria.net/politics/maresca.html+maresca+new+silk+road&hl=tr&ie=UTF-8
The above analysis (a new silk road) is dated (1998) but good. The analyst is the UNOCAL Vice President. A trade route is developing and the fight is going to decide, "who shall collect the tributes".
The old silk road can be seen at,
http://www.silk-road.com/maps/images/srmap1.jpg
Syria is a western port.
As an aside, it is said that, when Persians and Byzantines started to war, the silk road shifted to south, to Arabian peninsula. Trade made the Arabs rich. Some people claim that the birth of Islam can be linked to that shift of the trade route. May be? I don't know. The moral: Make trade not war; otherwise, the merchants may go to the south (may be to the north :))
Operative
(9/27/03; 13:16:51MT - usagold.com msg#: 109492)
@ ge :Syria/EU
This story is possibly one of the bigest events to come out of the mideast in a decade. Forget all the 'stans in that part of the world it is Syria that holds the dominant interest and answer to any long lasting peace in that region of our planet. For at least the past two decades the Syrians have produced by far the largest number of terrorists and drugs from the Bekka Valley. When the US invaded Iraq it was mentioned several times that much of the chem/bio weapons we were looking for had been shipped to the Bekka Valley months before our invasion. True? Who can say, but this would not surprise me in the least. If terrorism has a home base that is highly protected it is the Bekka Valley. Syria has also controlled Lebanon since the mid eighties after invading the country. My opinion has been that everything else has been somewhat of a side show and the major battle to be fought in the 'war on terrorism' will be Syria. As the article points out Syria has not laid the financial back drop to joining the EU, and there is little benefit that I can see from an economic point for Syria. However, Syria knows they are being watched ever more closely and that before this war on terrorism is over that they will take a major hit. Is this agreement a ploy on Syria's part to stave off the eventual outcome? What drives the EU to do business with the devil? We have discussed here at the forum the Euro/Dollar tango, but I have to wonder if other areas of skirmish are being planned and drawn up as well. Another area to keep our eye on.
Gandalf the White
(9/27/03; 12:38:39MT - usagold.com msg#: 109491)
Sir Smeagol
Smeagol (9/27/03; 11:36:17MT - usagold.com msg#: 109486)
===
Thank you !; rich, famous and HONORABLE Sir Smeagol.
"Lead on" down the Trail, until FOA the Trail Guide returns.
<;-)
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(9/27/03; 12:18:08MT - usagold.com msg#: 109490)
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Goldendome
(9/27/03; 11:58:34MT - usagold.com msg#: 109489)
Puplava's 2nd hour
Second hour of the Puplava internet radio interview is also very good today. He has on a Gent. from the Von Mises institute at Auburn University. You can guess the gist of their collective outlook for the US economy with all the Keynsian claptrap thats going on. A good listen if you have the capability. Gdome.
Goldendome
(9/27/03; 11:50:49MT - usagold.com msg#: 109488)
Chop Suey!
First: Druid thanks for your response yesterday to my question with the link re-post. It will take awhile longer to get through it.
-----------------
Now,
Recently the Asians (China& Japan) are being told to stop buying US dollars and allow their currencies to appreciate against the dollar. As I see it, this would seem to immediately depreciate, in the value of their currencies, all the dollars(assets)that they have purchased up to now.
They used Yen or Yuan to purchase dollar assets. Now their currencies appreciate, say 25%. When they revalue those dollar assets in terms of the new Yen or Yuan value-- aren't they out 25% if they wished to convert those dollars back into their currencies? Would the 25% loss in dollar asset value be made up by the increase purchasing power of the yuan or yen? I don't know. I tend to doubt that the Asians wouldn't lose somewhere on this. --Gdome.
phil288
(9/27/03; 11:50:35MT - usagold.com msg#: 109487)
Puplava predicts $10.00 silver within 12 months.
Jim Puplava has an excellent discussion of silver issues on his Financial Sense News hour, (hour 1) on internet radio accessable at his site. Well worth a listen when you have time.
Smeagol
(9/27/03; 11:36:17MT - usagold.com msg#: 109486)
to Gandalf the White (09/26/03; 21:24:11MT - usagold.com msg#: 109476)
(grin) Smeagol is content, dearesst Wizard, we doesn't want the other Winner's Preciouses! They deserve them well, yess they do (bowing to the Winners) and their essays are much better anyways in our opinion. But ssince we didn't win a gold One (we didn't really thinks we even had a ghosst of a chance for even a sspecial mention! Indeed, if Smeagol can win, anyone can!), we guesses we'll jusst have to call 'ssomebody' ssoon to order One! (grin).
S.
Druid
(9/27/03; 09:33:43MT - usagold.com msg#: 109485)
Belgian (09/27/03; 03:01:26MT - usagold.com msg#: 109482)
"*** WHY *** isn't A/FOA showing up and guide us further ???
Is it because the Gold-Revaluation is on track...delayed or aborted ???"
Druid: Belgian, my apologies for interrupting. I agree with your assessment and the upcoming move into paper gold is on plan. We can all argue about the timing apsect but certainly not the path and/or direction. I personally think that the new paper gold intstruments are more a relief valve for the HUGE short players so they can minimize any losses on their existing positions and then maximize their gains in the upcoming circus. I would personally lose 100% to gain a 1000% anyday especially if my new play became the start of a new trend in the winning direction. Now here is where I'm really smoking crack, it would be during this time that the separation between the paper and physical price would take place with a WHOLE lot of POLITICAL WILL thrown in btween. I will be back in about 14 hours.
Caradoc
(9/27/03; 08:42:52MT - usagold.com msg#: 109484)
My mistake
Major goof on my part: Ramadan is 27 October through 25 November.
My apologies to the table,
Caradoc
Caradoc
(9/27/03; 07:53:13MT - usagold.com msg#: 109483)
"Ramadan Kareem"
Islam's holy month of Ramadan started today, 27 September, with the day's beginning defined as the moment there's enough daylight to be able to distinguish between a black goat hair and a white one. Since it's a lunar month of 28 days, it will end on 25 October. Why mention this on a gold board? Well, despite the fact that the majority of Muslims take Ramadan as a time of restraint of the physical body (no food, water, or other physical gratification from sunrise to sunset) while focusing on their relationship with God, there's no point in pretending that there isn't a geographically diverse subset of Islam who are intent on destroying the financial structure of the western world and who see Ramadan as a special time for implementing the will of Allah as they've been taught to understand it. Good for gold? Yeah, but my personal hope is that US efforts like this one
http://www.foxnews.com/story/0,2933,98451,00.html
will minimize the results of any planned attacks.
October will be good for gold for about a dozen reasons even without what the world will learn from the GATA-Barrick/Morgan trial beginning on October 16th. We don't need any nastiness between 27 September and 25 October. Still, in case not all the bad guys get stopped, this might not be a bad time to make sure your hurricane/earthquake/blackout kit has fresh water, batteries, etc.
Regards to all,
Caradoc
Belgian
(09/27/03; 03:01:26MT - usagold.com msg#: 109482)
@COBRA(too)
Dearest Sir, my posting-fatique is the result of all the "emotions" that arise here (and in many other places), when dollar and euro "face" each other. This is unfortunately blurring a lot of the good Gold-thinking that could be produced, otherwise.
I am of the (ANOTHER's) opinion that the euro(confetti)currency has (growing) "oil-currency" ambitions and that the geopolitical (financial + monetary) evolutions must be seen with this competition for oil-currency, in the background. By constantly repeating and investigating on the "WHY" question(s).
Note, that EU-politics are subordinated to EMU-politics !
Political scandals (plunderings) are of all times and all places, but do not overschadow the deep, dominating and stealth evolutions in monetary affairs. And indeed, good Sir, THE EURO IS NOT YET AS GOOD AS GOLD OR OIL !!! But is the euro as bad as the dollar ???
"WHAT" is going to make Gold's revaluation happen ? And what will be "associated" with that Gold-Revaluation ? And WHY is the world's N° I-challenger-China, orderly accumulating, that Gold, on its way to revaluation ? Look closely at the new geo-political alliances that are being build, over many...MANY (political) differences !
It is "real money" that always bought/buys/will buy the butter...! And when it boils down to what is real money and who has it...a lot of emotions do surface above the political nonesense...and the atomium of miniature Belgium.
WHY and HOW does the dollar and euro-blocks agree on the ongoing orderly (Plaza-like) dollar-decline (exch. rate) FOR THE TIME BEING !? It is here that the "real" answers for Gold's behavior (behaviors) must be found and related to. Not the speculators-gamblers are having "the grip" on Gold and its price (worth) but the Gold-Fathers (real wealth managers) who have money-Giants in their wake.
*** WHY *** isn't A/FOA showing up and guide us further ???
Is it because the Gold-Revaluation is on track...delayed or aborted ??? What's your guess COBRA ?
Regards, B.
ge
(09/27/03; 02:04:25MT - usagold.com msg#: 109481)
Syria and Europe take a big step forward
http://www.gulf-news.com/Articles/Opinion.asp?ArticleID=98638
"After six years of hesitation and 10 rounds of difficult negotiations, Syria is at last about to sign an Association Agreement with the European Union, EU. The signature is expected to take place before the end of the year. This is a major development which will have very considerable economic and political consequences."
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