All times are U.S. Mountain Time
(Yesterday's Discussion.)
Black Blade (2/27/04; 23:19:52MT - usagold.com msg#: 117826)
Japan Sold 3.34 Trillion Yen From Jan. 29 to Feb. 25
http://quote.bloomberg.com/apps/news?pid=email&refer=japan&sid=abgnCesLtAiU
Snippit:
Feb. 27 (Bloomberg) -- Japan sold 3.34 trillion yen ($30.6 billion) from Jan. 29 through Wednesday, the Ministry of Finance in Tokyo said, to stem currency gains that threaten the nation's exporters. The yen's 7.6 percent rally against the dollar in the past six months may undermine the world's second-largest economy by cutting profits of exporters including Sharp Corp. and Canon Inc. Japan's economy grew at a 7 percent annual pace last quarter, the fastest in more than 13 years, supported by growing sales abroad.
``The MOF is determined not to let the yen strengthen,'' said Minoru Shioiri, senior manager of the treasury and foreign exchange at Mitsubishi Securities Co., a unit of Japan's second- biggest lender. Analysts and strategists from Nikko Citigroup Ltd. and J.P. Morgan Chase & Co. in Tokyo said they expected sales of as much as 3.5 trillion yen this month. Currency sales this year have totaled 10.5 trillion yen, more than half last year's record 20.4 trillion yen.
Black Blade: YIKES!!! Acts of desperation indeed. Scuttle the Yen to prop up the US dollar and help push the US labor market into a death spiral as US manufacturers head offshore en masse. And yet the BOJ under direction of the MOF continues to buy the dollar. When all this collides in an enormous crunch as the global "competitive currency devaluation" picks up the pace it will get extremely ugly as everyone loses. Get your "portfolio insurance" on the cheap while you can.
The Invisible Hand (2/27/04; 23:04:20MT - usagold.com msg#: 117825)
No physical, it's ideas, stupid!
http://biz.yahoo.com/rb/040227/economy_greenspan_2.html
Friday February 27, 10:10 pm ET
snips:
Greenspan said a rising proportion of total U.S. economic output now "is essentially conceptual rather than physical," a reflection of the shift toward an economy that does less manufacturing and offers more services.
+
"If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights," Greenspan asked. "How appropriate is our current system -- developed for a world in which physical assets predominated -- for an economy in which value increasingly is embodied in ideas rather than tangible capital?"
==
Ideas result in actions, and actions result in changes.
or is my interpretation of Greenspan wrong?
Black Blade (2/27/04; 22:26:46MT - usagold.com msg#: 117824)
Gasoline supplies likely to shrink, prices rise
http://www.usatoday.com/money/autos/2004-02-25-gasprices_x.htm
Snippit:
Motorists face gasoline shortages as well as record prices the next few weeks because of the skintight U.S. refining and distribution network. The vulnerability of that network, combined with low inventories of both gasoline and the crude oil from which it's made, have the government and energy experts increasingly nervous that some places in the USA will run out of gas temporarily. An accident that has disrupted shipping on the Mississippi River and in the Gulf of Mexico could trigger shortages this week.
"It looks like the big bulk terminals in Florida are going to run out in the next few days," Tom Kloza, analyst at the Oil Price Information Service, said Wednesday. Big gasoline suppliers were warning their customers of imminent Florida shortages and reduced allocations, he said. The Coast Guard said it had reopened some of the channel Wednesday, but a backlog of ships remained. "The U.S. gasoline supply system is not 'just-in-time' delivery; it's 'a-minute-too-late' delivery," Kloza says. The river disruption "underscores how hand-to-mouth the supply system is. ... It's a preview of the kinds of things that can happen in spades" as demand rises in the spring and summer driving season.
"Many signs (point) to a tight gasoline market this driving season," the U.S. Energy Information Administration said Wednesday. Analysts are more blunt. "Expect major regional gasoline shortages," warns A.F. Alhajji, associate professor and energy economist at Ohio Northern University. When that happens, prices zoom as gasoline wholesalers compete for supplies, giving a regional shortage national impact. Alhajji is confident that "gasoline prices will increase nationwide as we approach the driving season, even in areas that have adequate supplies."
Black Blade: Not to mention the upcoming refinery shutdowns for Spring Maintenance and switchover to Summer gasoline blends (including some new ones added this year with few refineries able to make the necessary upgrades). Not to worry though as energy is not calculated into the CPI "core rate" like all the "unimportant" things like food, shelter, etc. Looks to get quite interesting.
Goldilox (2/27/04; 22:26:21MT - usagold.com msg#: 117823)
SoCal fuel update
by observation
Same brand, same station, 91 Octane for my motorcycle
Sunday Feb 15 - $2.059/gal
Wednesday, Feb 18 - $2.159/gal
Sunday, Feb 22 - $2.259/gal
Wednesday, Feb 25 - $2.309/gal
Friday, Feb 27 - $2.379/gal
Nice upward slope, but there is NO price inflation!
(:^) -G
Liberty Head (2/27/04; 21:36:30MT - usagold.com msg#: 117822)
Heeeeeeeeeers Alan ! Duh dunt-duh duh duh
Big Al,
Thank you! Thank you!
There are some potentially strategic anomalies of mild concern, indicating a continued rise of inflationary pressures, which if ignored, could cause cyclical consternations of ambiguous proportions.
-----------
Ah ha ha ha ha ha
------------
Liberty Head,
Big Al is on the boobtube everyday, lately.
What's up with that?
Has sumpthin' changed?
Best Wishes
Toolie (2/27/04; 21:18:28MT - usagold.com msg#: 117821)
(No Subject)
$500,000,000,000 (trade deficit per year) / $50,000 (above avg. mfg. Wage per year) = 10,000,000 jobs (That is, if we had to trade for what we import)
Toolie (2/27/04; 20:43:51MT - usagold.com msg#: 117820)
All that paper and all that oil, Noone best strike a match.
http://www.menafn.com/qn_news_story_s.asp?StoryId=42596
Snip: By the end of September, Saudi Arabia's official reserves with the International Monetary Fund, excluding gold, hit their highest level in 22 years of around $23.1 billion.
………………………………..
Time to rebalance the portfolio, for SAFETYS sake, if nothing else.
Congratulations Sirs, wiley,goldenboy and balzac
wiley (2/27/04; 19:28:10MT - usagold.com msg#: 117819)
What are the odds?
First I'd like to thank my wife, my parents, the academy............No, I really want to thank MK, Gandalf and the entire staff of Centennial for the latest contest. WELL DONE, WELL RUN. I never win anything....except gold. This is the second time I've hit the gold in a USA contest (Knock on wood) and I'm learning to like it. When is the next one?
Thank you one and all for participating in this forum, as you can all figure out, you leave me speechless. But know that I usually read every word any of you leave here. Matter of fact, the Forum is my home page. What an incredible collection of erudition we have here. please don't change a thing.
Federal_Reserves (2/27/04; 18:02:55MT - usagold.com msg#: 117818)
Snow Job Update....
http://biz.yahoo.com/rf/040227/economy_treasury_deficit_4.html
"Just as we demand that public companies accurately report financial information to their shareholders, the federal government has an obligation to present its financial position in a complete and timely manner to America's taxpayers," said Treasury Secretary John Snow in a statement.
####
LOL! After snowjobbing the public from day one, Friday after the close Snow job releases a holier than thou! LOL! Treasury reveals the iceberg beneath the surface.
Know this Snow has a PHD in economics and is a lawyer. He can now say he revealed everything and unlike K.Lay can stay out of jail. Would you invest in a company with these kinds of hidden transactions coming due? Same with Greenspan. He came out and covered his ass this week too. Hey you been warned.
specie-man (2/27/04; 17:42:52MT - usagold.com msg#: 117817)
Contest settlement
$396.80
I think that is what I guessed in the PREVIOUS contest.
Congratulations to the winners.
PS:
Next time, can we have a SILVER price guessing contest and/or a SILVER essay contest ?
commish (2/27/04; 17:02:29MT - usagold.com msg#: 117816)
The Contest
Congradulations to all those who had the b***'s to bid below $400.
goldenboy (2/27/04; 16:54:10MT - usagold.com msg#: 117815)
Many Thanks to Gandalf/MK
Congratulations to the wily Wiley!
Oh for a dime! And the gold in your eyes!
But a silvery lining adorns my skies.
Pretty bad poetry, but my great,great Grandfather was a publisher and patron to the immortal McGonagal who wrote such gems as: The Tay the Tay, The silvery Tay, It flows by Dundee every Day...........Good Weekend to all!
Maverick1 (2/27/04; 16:36:50MT - usagold.com msg#: 117814)
So what is the PPI going to say?
Should we expect definite signs of inflation and Spin? or signs of deflation and Spin?
Boilermaker (2/27/04; 16:24:30MT - usagold.com msg#: 117813)
Joe Sixpack taking gas
http://www.martincapital.com/charts.htm
Here's a chart site I just ran across that has lots of good stuff for chart junkies. My favorite was the "labor costs" that shows wages plummeting while the MIA PPI is soaring. Pretty soon we'll have boatloads of emigrants heading for Asia. Let's export the politicians and lawyers first. Dump your SUV, buy a bike and get some gold.
YeeHaw!!
In the meantime Let's Party!!!
balzac (2/27/04; 15:10:17MT - usagold.com msg#: 117812)
THE CONTEST
My Thanks to Michael and Sir Gandalf,
This is about the 6th time I have entered
and I appreciate the contribution which
USAGOLD makes to the gold market,
by being the most rational and valuable
educational site on the web. I have been attending since
1996 and have learned a lot.
Thanks for the contests, which give us the chance
to prognosticate price as well as test our luck,
the latter being very important to speculators and gold bugs.
Balzac
Boilermaker (2/27/04; 15:01:01MT - usagold.com msg#: 117811)
PPI Breaking News!
http://www.forbes.com/work/newswire/2004/02/27/rtr1279485.html
snip
"The U.S. Bureau of Labor Statistics said on Friday it would provide at least one day's notice before releasing the delayed producer price index for January, which was originally scheduled for Feb. 19......
A spokesman for the agency said it would not release the report over the weekend or this coming Monday, March 1. "
comment
There's a whole lotta cookin' goin' down at the BLS. Got to make crepe suzettes from toad stools. Good luck.
Boilermaker (2/27/04; 14:50:32MT - usagold.com msg#: 117810)
Weekend Winners
Congrats to the winners! I only wish there was a 4 on the front of those prices. Maybe next contest?
**** $397.0 **** wiley
**** $397.1 **** goldenboy
**** $396.5 **** balzac
R Powell (2/27/04; 13:43:17MT - usagold.com msg#: 117809)
Gandalf, M.K. and winners
Congrats to the winners !!!!
Thanks again to the Wiz and Michael for the fun and the loot. Well done Gandalf.
And, since I put the boots back on today, poured and finished 18 yds of "gray gold" concrete, I get to say..(no work tomorrow)......
Happy weekend!
rich
Gandalf the White (2/27/04; 13:25:59MT - usagold.com msg#: 117808)
TA TA TAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
WE HAVE WINNERS !!!! <;-)
4/27/04 COMEX Apr '04 Contract (GC4J)
HIGH = $398.4 low = $392.3 SETTLEMENT = $396.8 Change +$1.3
THE WINNERS ARE:
Sir Wiley as the "closest" wins the Dutch King goldpiece - (0.1947 oz. of Au),
and the two RUNNERS-UP are:
Sir Goldenboy and Sir Balzac each winning an one ounce U.S. Silver Eagle.
These entries were ATOP the HILL in NY today !
--
**** $398.3 **** Hang Tuff (2/25/04; 12:32:02MT - usagold.com msg#: 117685)
**** $398.0 **** Gonlyold (2/23/04; 12:27:13MT - usagold.com msg#: 117556)
**** $397.6 **** R Powell (2/25/04; 14:11:59MT - usagold.com msg#: 117691)
=====
**** $397.1 **** goldenboy (2/25/04; 22:10:21MT - usagold.com msg#: 117730)
**** $397.0 **** wiley (2/25/04; 21:56:44MT - usagold.com msg#: 117726)
**** $396.5 **** balzac (2/20/04; 11:49:46MT - usagold.com msg#: 117441)
=====
**** $396.1 **** silverton3 (2/25/04; 10:27:30MT - usagold.com msg#: 117677)
**** $395.0 **** Tranquility Base (2/25/04; 21:51:30MT - usagold.com msg#: 117724)
**** $394.0 **** contrarian (2/25/04; 15:45:17MT - usagold.com msg#: 117698)
**** $393.0 **** Toolie (2/25/04; 19:32:14MT - usagold.com msg#: 117717)
===
CONGRATULATIONS to the three WINNERS !!!
Will each of you please advise Marie via email (at marie@usagold.com) of your Forum "handle", REAL NAME, and a snailmail mailing address for mailing out your PRECIOUS !
Thanks
GW
TownCrier (2/27/04; 13:16:55MT - usagold.com msg#: 117807)
THE OUTSIDER: The Fed's Ben S. Bernanke on "The Euro at Five: Ready for a Global Role?"
http://www.federalreserve.gov/boarddocs/speeches/2004/200402262/default.htm
(my selected excerpts from Mr. Bernanke)
"...it hardly appears within the realm of political feasibility that national currencies would ever be abandoned in favor of any other arrangement." Robert A. Mundell (1961)
The successful introduction, five years ago, of an entirely new currency over a wide range of polities and economies was, at a minimum, a remarkable technical achievement. As a card-carrying member of the club of monetary economists, I like to think that our collective expertise was helpful in making that achievement possible. As both a policymaker and an economist, I welcome this opportunity to look back on the first five years of the euro to see what we can learn from the experience and to consider what this grand experiment implies for the future. I should say at the outset that, as usual, my remarks this evening reflect my own views and not necessarily those of my colleagues in the Federal Reserve System.
The economic analysis of optimal currency areas began, of course, with Robert Mundell's seminal 1961 paper, from which I have quoted above. As you know, Mundell argued that, ideally, economic similarity, not political boundaries, should define the geographic area spanned by a common currency. He was the first to state the classic tradeoff implied by the decision to adopt a common currency. According to Mundell, the principal advantage of a common currency is the reduction in transaction costs implied by the use of a common medium of exchange across a broad area. The disadvantage of a common currency is the loss of the shock-absorber properties of flexible exchange rates and independent monetary policies. Flexible exchange rates and independent monetary policies will be useful shock absorbers to the extent that macroeconomic shocks are imperfectly correlated across regions, wages and prices are sticky, and other macroeconomic adjustment mechanisms -- such as factor mobility or fiscal transfers among regions -- are weak or absent.
Whether the nations that compose the European Monetary Union (EMU) form an optimal currency area in Mundell's sense has been widely debated by researchers. ... Of course, analyses that look only at historical conditions ignore the important possibility that monetary union itself may induce endogenous changes in trade propensities, the pattern of macroeconomic shocks, and other components of the Mundellian analysis.
Rather than pursuing the question of whether Europe is in fact an optimal currency area in Mundell's sense, I think it is useful simply to recognize that the European experiment in economic and monetary union has not been motivated primarily by Mundellian factors.
Political factors, rather than economic ones, have played the dominant role. The nations of Europe share a remarkable cultural heritage in philosophy, politics, science, religion, and the arts, and advanced thinkers have long recognized that this common heritage might serve as a basis for the formation of a cohesive European political entity. Such an entity presumably could influence world events and provide for a common defense more effectively than could a collection of nation-states.
Another important motivation for political integration has been the desire to reduce the risk of intra-European conflict. From Napoleon to Bismarck to the Kaiser to Hitler, Franco-Prussian and then Franco-German conflicts were flash points for continentwide and worldwide wars. European economic and monetary union holds the promise of binding so closely the economic interests of these two powers, as well as those of other European nations, as to make future intra-European conflict unthinkable. Such arguments have been part of the debate over European integration at least since the 1957 Treaty of Rome. Indeed, the hope of policymakers is to create a virtuous circle, in which closer economic integration promotes greater political cooperation, which enhances opportunities for economic integration, and so on.
The largely political origin of the union has several implications for the economic analysis of the common currency. First, from a purely economic point of view, the creation of the European economic and monetary union is at least partly an exogenous event. Thus, we have something of a natural experiment from which to learn about the effects of such institutional innovations. Second, we should keep in mind that our assessment of the success of the euro, indeed of the entire experiment in European integration, rests not only on economic criteria but also on the success of Europe as a political entity.
...Notably, the structure and mandate of the European Central Bank (ECB), as well as the perception of continuity with the policies of the pre-euro Bundesbank, have enhanced the ECB's credibility and contributed to low and stable inflation in the euro-zone. Although Germany and several other countries in the union enjoyed low inflation before the adoption of the common currency, with some partial exceptions to be discussed in a moment, the ECB has been able to "export" that benefit to other members of the monetary union. The common currency has also eliminated periodic exchange-rate crises, which had plagued European monetary arrangements and generated real and financial disturbances at least since the days of the gold standard.
The phrase "international role of the euro" covers a number of disparate possible functions of the currency. These functions include the use of euro-denominated assets as official reserves, the use of the euro as a vehicle currency in foreign-exchange transactions, the denomination in euros of financing instruments issued by borrowers not resident in the euro zone, the acceptance of euro-denominated or euro-linked assets in international investment portfolios, and the invoicing in euros of internationally traded goods and services. Of course, during the post-World War II period the U.S. dollar has been the dominant international currency with respect to each of these functions. It seems plausible that the euro, a low-inflation currency used by an economy comparable to that of the United States in size and sophistication, will, over time, increase its "market share" in each of these areas. However, the euro's potential international role, and, more importantly, the benefits to euro-zone countries of an increased role for the euro differ significantly by function.
...Arguably, the more significant aspects of the euro's international role arise from the strengthening and expansion of euro-denominated financial markets as these markets take on a greater international character. Traditionally, the efficiency and scope of these markets has been hampered by the costs and risks associated with the use of multiple currencies as well as by the fragmentation arising from international differences in legal structure, accounting rules, and other institutions. Given the rapidity and frequency of trade in financial markets, even small transaction costs can hamper the efficiency and liquidity of those markets. The common currency, with ongoing efforts to harmonize financial regulations and institutions, has significantly reduced those transaction costs. Together with lower country-specific macro risks arising from the adoption of the common currency, this reduction in transaction costs has greatly improved the breadth and efficiency of European financial markets.
Importantly, the benefit of more efficient financial markets goes well beyond the benefits to financial investors and the financial industry itself. A growing academic literature suggests that financial development is a critical precursor to broader economic development.
Perhaps the most dramatic effects of the monetary union in the financial sphere have been in fixed-income markets, both government and private. Government debt markets, because of their size, safety, and benchmark status, are central to a vibrant fixed-income market, and they have been particularly strengthened by the adoption of the euro. Notably, since the run-up to monetary union began, sovereign debt yields have converged to a remarkable extent. .... Clearly, these governments have benefited substantially by the reduction in inflation risk and exchange rate risk provided by the common currency. The addition of some sovereign default risk (now relevant because individual countries are no longer able to inflate away their debts) has evidently not offset these benefits, perhaps because of the effects of the Stability and Growth Pact.
The European government bond market has been substantially strengthened by the adoption of the common currency, but it has not attained the liquidity of the U.S. Treasury market (and may never do so). Although aggregate issuance of euro-zone government debt is of the same order of magnitude as U.S. Treasury issues, there remains the fundamental difference that euro-zone debt is the debt of twelve sovereign entities, rather than one as in the United States. Naturally, the Stability and Growth Pact notwithstanding, the European Union accepts no collective responsibility for the debts of individual governments.
-------(from url)-----
The single most disturbing element in Bernanke's forecast for Europe was that "the composition of banks may settle into the pattern of the United States, where very large banks with a global reach and the capacity to engineer highly complex transactions". But then again, most of us realize that this particular "pattern" of behavior has evolved out of necessity -- massive derivatization to prop up a failing structural component (that being the post-Breton Woods U.S. dollar).
R.
TownCrier (2/27/04; 12:43:22MT - usagold.com msg#: 117806)
THE INSIDER: The ECB's Tommaso Padoa-Schioppa on "The Euro at Five: Ready for a Global Role?"
http://www.ecb.int/key/04/sp040226.htm
(my selected excerpts from Mr. Padoa-Schioppa)
Ladies and gentlemen: "Building on the euro's success" is the title the organisers suggested for my speech today. With this title, I could be tempted to indulge in describing such important achievements as the smooth introduction of the new currency, the maintenance of price stability, and the growing international role of the euro. Important as they are, however, we should not forget that such achievements are means to an end. The end is to enhance economic prosperity in a stable and safe environment, and to do so both in Europe and worldwide. Indeed, in an increasingly globalised world we cannot take a domestic perspective only. Spillovers between different countries and regions are so powerful and frequent that prosperity and stability can be achieved and preserved domestically only if they are at the same time safeguarded globally.
In my remarks, I would like to present the euro's success in this broader perspective, and discuss how Europe can help meeting the challenges faced by the global economy today.
Let me state clearly upfront [...] the euro is contributing to global adjustment patterns with an active and constructive commitment to the principles of the post-Bretton Woods global, multilateral arrangements.
Let me start with the domestic dimension. European Monetary Union has put an end to Europe being an area of monetary tensions, exchange rate crises, and macroeconomic imbalances. It has turned it into an area of stability. ... Given the weight of the euro area in the world economy, this has contributed to global stability in a significant way.
The regional dimension
... In about two months from now, 75 million people will join the European Union, and the euro will ultimately become their currency. The path towards full monetary integration of the new entrants is clearly laid out and will be implemented as they progress in convergence. ...... several of the new entrants are closer to meeting the numerical Maastricht criteria today than the current euro area members were five years before the euro. This means that the prospect of euro adoption has already helped anchor policies in this part of the global economy and is entrenching progress in transition, integration, and nominal convergence.
Of course, the impressive progress in nominal convergence should not hide the enormous task of real convergence. The purchasing power per head in the prospective Member States is only about half of that in the current EU. The major challenge is indeed catching up in terms of prosperity. But the conditions are in place for these countries to grow by more than 5 per cent per year for many years.
The anchoring effect of the euro in the region neighbouring the euro area goes, however, well beyond the scope of prospective new Member States. The EU has significantly tightened its economic, financial and institutional links with many countries surrounding it. The EU enlargement is the best-known example, but there is also the Stabilisation and Association Process with the countries of the Western Balkans; the Barcelona Process with Mediterranean countries; and the Partnership and Cooperation Agreements with countries of the Commonwealth of Independent States, notably Russia.
Global dimension
...what matters most is the contribution the euro provides to global monetary and financial stability. This contribution consists in the euro area's constructive participation in the post-Bretton Woods arrangements, and in its active commitment to multilateral cooperation. Let me elaborate on this point, because I think that in this area we are now confronted with a most pressing issue, namely how to achieve the adjustment of the large global imbalances as smoothly as possible, avoiding - or at least minimising - negative effects on global economic growth.
What should the euro and the euro area do to meet this challenge? To answer this question, I would refer to four key features of the post-Bretton Woods regime.
First, no single currency performs the anchoring role for the other major currencies.
Second, exchange rates are determined by market forces and ought to be in line with economic fundamentals; as such, their movements are expected to contribute to the adjustment of external imbalances.
Third, as exchange rate markets may be very volatile and may produce disorderly moves among the major currencies, occasional public action through verbal or, in some special circumstances, market intervention might be undertaken.
Fourth, the appropriate framework for international cooperation is a multilateral one, mainly through the G7 and the IMF.
*****It is by accepting the logic of the post-Bretton Woods regime, that Europe has fully supported the adjustment process over the last two years. It has done so in spite of the fact that Europe is not contributing – in either way – to the gravity of present global imbalances.*****
As part of this adjustment process, the euro has appreciated against the US dollar by about 46 per cent since March 2002, with more than one third of this (17 per cent) concentrated in the last six months. Perhaps even more striking, the euro has appreciated by virtually the same percentages on average vis-à-vis the currencies of Japan, China, Korea and other main Asian economies. This is due to the link these currencies have maintained with the US Dollar. Such an appreciation is striking if one considers how strong competitors these economies already were before depreciating and how large their external surpluses are.
From experience we know that to bring large external imbalances back on a sustainable path, changes are required both in prices and quantities. The exchange rate alone is not sufficient; growth differentials must also adjust. And here is where lies the main challenge for Europe today: the challenge is to increase its potential and actual growth. ... Only by sigininficantly stepping up its own growth performance will Europe complete its contibution to overcoming the challenge facing the world economy.
A close look at the origins of the current imbalances suggests that they have emerged – at least partly – from a policy environment characterised by a degree unilateralism. Let me briefly explain what I mean by this.
As we know, the reserve build-up in Asia has become the main source of financing of the US current account deficit. This unprecedented build-up has been motivated to a significant extent by the desire to protect the economy against external shocks and by the pursuit of a growth strategy that was largely export led. The pursuit of such a strategy is understandable, as it combines domestic development with international integration. ... However, a policy in which the countries peg, or tightly manage, their currencies vis-à-vis the US dollar implies that the latter becomes the informal common monetary standard in the region and vis-à-vis the outside.
For some years, a policy of unilateral pegs was benefiting all parties involved. The US were able to finance fiscal and current account deficits in an environment of low interest rates despite a falling dollar. Asian countries received strong growth impulses, and some even welcomed the build-up in reserves as a further measure to fight deflationary tendencies. However, one may wonder how long this mutually beneficial outcome will last. Indeed, over the last months there have increasingly been, particularly on the side of US authorities, calls for more flexibility in Asia's exchange rate management with a view of leading to some orderly and progressive appreciation of emerging Asia currencies.
The adjustment of global imbalances is a delicate process... ... we should be aware of the fragility and incompleteness of the system of open trade we have constructed over the years. I know of no country where the constituency of protectionism takes long vacations. Recently, there have been suggestions in some quarters, both in the EU and the US, in favour of protectionist measures to tackle increasing competition by Asian countries.
By mentioning this, I would like to stress that in an increasingly globalised economy, the preservation and strengthening of a satisfactory multilateral framework is crucially important.
...Ladies and gentlemen, let me conclude. You have noticed that in speaking about the euro's success, I have said relatively little about the achievements of introducing a single currency for 12 sovereign nations, the maintenance of price stability in the euro area, and the euro's gradually increasing international role. I have said relatively little about these issues as I regard them as necessary foundations for the euro's success but not as its essence. In my view, the essence lies deeper. It lies in having brought stability to Europe, both in the euro area and its neighbouring regions, in contributing to global adjustment through a commitment to exchange rate arrangements fully consistent with the post-Bretton Woods setting, and sticking to principles of multilateral cooperation that are applicable at the regional as well as global level. It is in these areas where the euro contributes to a more efficient and stable international monetary system, and it is also here where we have to continue to work in order to improve the functioning of this system further.
------(from url)-----
Is there any wonder Europe has, through "revolutionary" mark-to-market revaluation designs, uniquely positioned gold to function brilliantly as the ultimate multi-national reserve? May it continue to be a smooth transition for us all.
R.
Federal_Reserves (2/27/04; 12:29:52MT - usagold.com msg#: 117805)
CRB spiking
Over 10 points this week. Wow!
Its no wonder. Recent comments from both Greenspan and Bernanke gave the green light for speculators to drive up the price of commodities. Neither expressed any concern when asked about the rising price trend in commodities as an indicator of inflation. Their rational was that raw materials are such a small component in the price of goods compared to 20 years ago. That's an encouragement to speculators wanting higher prices and who have money to bid them up, and who otherwise might be fearful the FED will step in with a rate hike to cool down the markets.
Many supply siders believe in the commodity-price-rule approach to monetary policy. If the central bank has been injecting an excess of money into the economy, then rising commodity prices would tell the bank that it's time to tighten policy — or withdraw cash from the system and raise interest rates.
Druid (2/27/04; 11:46:34MT - usagold.com msg#: 117804)
Paper Avalanche (2/27/04; 11:40:00MT - usagold.com msg#: 117803)
"I believe that the PPI may be retired with the 30 year bond since both are no longer "necessary.""
Druid: PA, you're absolutely right, I keep forgetting that they have ways with dealing with numbers that don't cooperate. May the PPI rest in peace.
Paper Avalanche (2/27/04; 11:40:00MT - usagold.com msg#: 117803)
CRB barrelling toward 275.....
I believe that the PPI may be retired with the 30 year bond since both are no longer "necessary."
Tick tock!!!!!
PA
Druid (2/27/04; 11:39:59MT - usagold.com msg#: 117802)
INFLATION STRIKING: PRICES SURGE, LEADING RAW MATERIALS HYPERINFLATION.
Druid: This is the PPI problem. I wouldn't expect a report anytime soon. These numbers just might be to obvious to massage and explain away.
Druid (2/27/04; 11:34:54MT - usagold.com msg#: 117801)
INFLATION STRIKING: PRICES SURGE, LEADING RAW MATERIALS HYPERINFLATION.
http://www.larouchepub.com/pr/2004/040223inflation.html
U.S. steel prices have jumped at least 30% in less than two months; it has reached the point that suppliers can't predict from week to week what steel prices will be. This is affecting all those who buy and bend steel, from appliance makers, to tool-makers, to commercial construction companies. During the past year, the cost of nails rose to $25 a box, from $12.
The Journal reports that spot-market price of hot rolled steel—an industry bench-mark—is running about $500, with surcharges included, up 30-50% from a month ago, according to various steel buyers. Peter Fish, of MEPS Ltd, a British steel-market consulting firm, predicts steel prices will reach an eight-year high during March.
The higher steel prices (and those of commodities), could destroy the last remnants of the Bush-Cheney Administration's recovery myth. Nels Leutwiler, president of Parkview Metal Products, based in Chicago, reports that he has already laid off 80 out of his 500 workers—16%. He states that, for those metalforming companies that have survived the depression thus far, "this sudden run-up in steel prices will be the last straw for many of them."
Druid: Some more data about inflation that doesn't exist.
steady (2/27/04; 09:40:30MT - usagold.com msg#: 117800)
nickles
come on u have to see it. what to do with that pesky 5hundredths giving the black box traders fits. what to do with it, u had to see it come on. and then see what happend to tht pog? interseting.
TownCrier (2/27/04; 09:34:41MT - usagold.com msg#: 117799)
monTROZ: dollar fate vs. investment decisions~assumptions
Doubtless you've probably already figured out why our presentation is as simple and direct as it is. You scratched the surface revealing deeper layers as you delved into your seemingly simple request for a a fuller assessment that goes beyond "matteress dollars"; such a task immediately presents levels of complexity due to the spectrum of investment alternatives, differing marginal tax rates, and timing.
Particularly, where these variables arise, not knowing what investment decisions or assumptions may be appropriate for any given individual makes it more natural to provide the base data in its "raw" form as a starting point -- to allow everyone to carry forward with conclusions that are uniquely appropriate to their own tax status and investment style.
While it might seem natural for you to pursue an "ordinary savings account rate", that might be an investment decision for you matched by the comfort level someone else might have only in cash, or perhaps only in U.S. Treasuries, or AAA corporate bonds, or high yielding Int'l bonds, blue chip stocks, index funds, or aggressive growth stocks. How can we speak meaningfully to them all in one presentation? How also would we fairly adjust for the risk of bankruptcies or defaults in some of those investment options? What tax rate should be applied to gains as these differ based on income level, timing, and investment vehicle?
BOTTOM LINE: All by itself the cash is talking loud and clear. We hope people are listening, and taking action accordingly in a manner appropriate for them.
R.
monTROZ (2/27/04; 08:18:39MT - usagold.com msg#: 117798)
Dollar Decline
"Would you invest in a stock that graphed like this?"
I have a question about the graph that the Host posts from time to time. The one with the title "Would you invest in a stock that graphed like this?" which shows the decline in value of the US Dollar. What I'd like to see is a graph of the dollars someone would have in an account if they would have put their dollars in a bank at ordinary savings account rates. Starting with $35.00 or one ounce of gold in 1945 compounding at whatever the prevailing rates were for 50+ years, with a comparison graph of the gold price. That comparison might not be so dramatic but it may be closer to the way things have really gone unless you took the dollars and stuffed them under a mattress. An even more correct picture would be to take into account the taxes that would have been paid on the interest earned each year. Those tax rates have gone up and down, and they reduce the effective interest earned. The conclusion may be the same. The Dollar has declined severely while gold has held value. I just have more confidence in a conclusion drawn from a complete analysis than one from an incomplete analysis, even if the conclusion is the same.
USAGOLD / Centennial Precious Metals, Inc. (2/27/04; 08:06:12MT - usagold.com msg#: 117797)
Disturbing Trends: Is Now the Right Time for Gold?
http://www.usagold.com/Order_Form.html
Would you invest in a stock that graphed like this?
Probably not. But that is precisely what you have done if you own
stocks, bonds, cds, money markets or anything denominated in U.S.
dollars.
Sooner or later gold is going to react strongly to this simple dynamic:
The dollar has been continuously devalued without stop for the past 57 years. It has
not appreciated against goods and services once -- not even once -- in that entire time period.
There are periods when this policy has not been fully reflected in the price of gold.
Is "Now" one of them? "Is Now the Right Time for Gold?"
If you've received your initial information packet from us, you qualify to
receive this important report FREE OF CHARGE.
Please call 800-869-5115 if you would like us to send it to you --
Contact:
George Cooper Ext 102
Jonathan Kosares Ext 110
Marie Ballard Ext 106
We look forward to your inquiry.
USAGOLD Daily Market Report (2/27/04; 07:37:33MT - usagold.com msg#: 117796)
Page Update!
http://www.usagold.com/DailyQuotes.html
The 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.
MK (2/27/04; 07:37:11MT - usagold.com msg#: 117795)
News & Views Updated
http://www.usagold.com/AMK/MK-gold.html
_______________
The Great Inflation Train Wreck
Heading for a Fall by Fiat?
_______________
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This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.
Boilermaker (2/27/04; 06:33:00MT - usagold.com msg#: 117794)
Korean Cartoon
http://english.chosun.com/servlet/english.ArtListMan?code=k__
MK check this out. Looks like a big market waiting for golden advice.
Cheers
Boilermaker
Boilermaker (2/27/04; 06:25:25MT - usagold.com msg#: 117793)
Commodities
http://english.chosun.com/w21data/html/news/200402/200402270006.html
snip;
"Prices of raw materials are rising by the day, prompting governments the world over to scramble for ways to secure supplies.
World oil prices are continuing to spiral up. Dubai crude which takes up 80 percent of Korea's oil imports rose by nearly seven percent and is now near the US$30 mark per barrel. The cold wave in the Eastern United States and OPEC's output reductions have lifted crude oil prices. But price increases have been an across-the-board trend, affecting everything from iron ore and copper to aluminum."
comment
The worldwide scramble for commodities is heating up. Gold is about the only thing not going up the last few months. I bet there will be a lot of action today in the commodity pits. I need a $8.70 spike in gold to win MK's gold contest. Good luck to all! Go Spike, Go Spot!!!
Goldilox (2/27/04; 03:56:32MT - usagold.com msg#: 117792)
Freight Costs
http://www.321gold.com/editorials/winter/winter022504.html
snippet:
This brief synopsis gives the reader a glance into current Asian and Chinese demand characteristics. Importantly though, how does this translate in terms of impacts to the global economy, including the US? Primarily by creating shortages, bottlenecks, overheating and high prices (inflation). As the Asians scarf up commodities and goods throughout the world, they have smashed records for global freight costs on almost a weekly basis. The Baltic Dry Index, a barometer of the dry-bulk freight market for commodities such as iron ore, grain, and coal, is now up close to 300% from last spring.
Bloomberg.com: Research
A broker with Clarkson's in London exclaimed, "You only see this once in a lifetime, once in two lifetimes." Tanker rates for oil cargo from the Persian Gulf to the Gulf Coast of the United States are running $3 per barrel, double the average over the last five years. The expectation is that demand will continue to run high for shipping as China will kick off importing large quantities.
Goldilox:
More from the Jim Willie CB article. Note the reference to $ Bill's and my favorite creeping (or is that creepy?) sign of inflation. FREIGHT COSTS!!
ViewYesterday's Discussion.
