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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 6/27/2005
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Goldilox (6/27/05; 23:03:33MT - usagold.com msg#: 133577)
IRAN Attack
@ Pritcho,

I share your views on the morality of an unprovoked attack, but find it more appropriate for discussion during open forum.

Whether or not someone bombs them is not gonna be affected by my posting my personal views here, but I would be all over it on a Saturday!

As to $ Bill's "contest", it's just indicative of his slightly off-kilter sense of humor (I love his posts for that), and perhaps an expression of his views on the inevitability of such event.

Speaking of which, I still have yet to get $Bill engaged in a good Saturday discussion of Pax Americana vs. NWO. Maybe next weekend.

Goldilox (6/27/05; 22:33:48MT - usagold.com msg#: 133576)
Reserve holdings
@ MK.

Your quote: "If this route is roadblocked, it will send a very negative message to those holding the dollar. What good is it to build up a boatload of dollar reserves only to find that you can't acquire anything with it? If on the other hand the door is opened to acquisitions of U.S.-based companies, we could see a wholesale change in the make-up of corporate America. (This is the same sort of thing Putin is facing in Russia.) I suspect that the former is a more likely outcome than the latter."

begs the following question:

Even if certain purchase are off limits, are units of the reserve currency still necessary for other strategic purchases, like oil, itself?

Having read another poster's suggestion that BOJ was paying its "security tax" with UST purchases, the following occured to me.

Like a gambling casino, one must first "buy" the appropriate tokens "to enter the game".


Great Albino Bat (6/27/05; 22:25:00MT - usagold.com msg#: 133575)
Gold: the battle rages...

A look at the 24 hr Spot Gold chart reveals a heavy struggle going on, with quite a bit of volatility; the managers want it down, the market bids it up - back and forth, the last 24 hrs.

TPTB are throwing tons of gold at the market, and the market is taking them.

TPTB want gold down to below $425. A hard job for them!

We should see the outcome tomorrow...not to mention that GWB's speech tomorrow is making the world nervous. All the more reason to get gold down, in preparation for the surge?

It takes time for an Empire to kill itself, but in due course of time, it will succeed in its sublime endeavor. All that TPTB can do, is slow gold down a little. The trend is UP, and will be UP for years to come.

The GAB


PRITCHO (6/27/05; 21:36:49MT - usagold.com msg#: 133574)
RE IRAN & PRE-EMPTIVE STRIKES - - -
Having read all of the previous posts on the above subject it is MOST DISTURBING that not ONE said how cowardly & despicable such action would be.

We even have Bill wanting/suggesting a bomb Iran guessing contest! - I mean what's up here?

For my money Iran is a sovereign Nation & has as much right as Israel to have nuclear weapons - -if that is the intent. Why not?

To the best of my knowledge Iran has not invaded any of it's neighbours - - AND only had a war with Iraq at the instigation of the USA --who supplied in case yo'all forget
the chemical weapons supposedly used by Sadam - -oops!

IF Israel or the USA attacks Iraq it will NOT be because of any supposed nuclear weapons threat -it will be to get the OIL - - the other is just the excuse. IF Israel had to face inspection of it's WMD -- and was forced to pull it's head in --there might be a chance for peace in the Middle East. If Israel was forced (by withdrawal of USA funding)to make a just peace with the Paestinean owners of the land - - there could be peace. I'd vote for that but I don't see it happening.

A much higher GOLD price is too much to pay for lives already ruined and nonexistent futures.I challenge future posters on this subject to think hard before commenting.
Just who is the terrorist?


Dollar Bill (6/27/05; 20:50:05MT - usagold.com msg#: 133573)
.,.
would the proof of the nwo, or the fate of the world, rest on the long bond? If, or rather, when, greenspan stops the short term interest rate rise, and all factors say the long should rise, and doesnt, is that the evidence?
If it does rise, well, collapse here we come, if it doesnt, despite a worsened situation, despite an iran war, ect, arent we then, officially, in nwoland?
Is the long bond the one key thing? For nwo?
Since everyone is speculating......I vote that irael not attack till after the summer driving fun, and before winter.
So, hmmmm, how about sept 11?
Shall we have a iran bomb date guessing contest?
Maybe just on the weekends?

Sundeck (6/27/05; 20:16:51MT - usagold.com msg#: 133572)
Bush - Tuesday
@Flaccus, Cavan Man et al.,

My guess is Bush will announce a "staged withdrawal" by allied forces in exchange for a "staged reduction" in hostilities by the Iraqi resistance (whose titles will be changed from "terrorists" and "insurgents" to "moderate elements amongst the Sunni populace"). The final deal to be worked out pending progress in the staged reduction of conflict. Someone else can fill in the blank squares...

Impact on gold, dollar and oil? Oil down, dollar stable, gold stable...though I may be wrong.

Just guessin'...definitely NO inside information!

;-)

Cavan Man (6/27/05; 19:58:07MT - usagold.com msg#: 133571)
Flaccus
You are right. It would be the height of folly to attack Iran and have them come storming over the Iraq border to attack a US force that would be inadequate to handle the onslaught. Reminds one of the Korean War. Unless the US is prepared to exercise the nuclear option which would assure Iranian compliance (and a likely global war though perhaps good fodder for the evangelicals), I view any talk of Iran's demise as a sovereign nation to be wrong footed and scare mongering at best. The reasons to own physical gold are legion and monetary in nature.

Whither common sense @ this forum? Will the chicken littles carry the day?

Flaccus (6/27/05; 19:26:11MT - usagold.com msg#: 133570)
Bush-Tuesday
It will be a pep rally. If it were serious, it would come from the Oval Office.

Bulldog (6/27/05; 19:23:01MT - usagold.com msg#: 133569)
iran
Perhaps when Bush addresses the nation on Tuesday night from Fort Bragg he will be announcing that Israel just bombed nuclear sites in Iran and have asked the U.S. for support in the area...

Dollar Bill (6/27/05; 19:09:53MT - usagold.com msg#: 133568)
.,.
MK, thanks, Just found your 8 point message.
Now to digest.

TownCrier (6/27/05; 19:08:50MT - usagold.com msg#: 133567)
ECB President Trichet: Monetary policy in EMU - views and challenges
http://www.ecb.int/press/key/date/2005/html/sp050624.en.html
24 June 2005

...Good and promising practices or policies can be better identified and more widely implemented, while less successful or ill-designed economic policies are easier to recognise.

I am fully aware that it is not easy to implement structural reforms and consolidate government budgets because of the fact that the public opinion is sometimes not fully convinced that everybody would benefit from these reforms. The ECB, for its part, is not lecturing anybody, but considers itself part of the necessary process of awareness raising, of tireless explanation. We all need to explain to the citizens of Europe that policies which enhance competition, competitiveness and flexibility contribute to higher employment and will ultimately improve prospects for real wage developments, growth and consolidation of government budgets.

^----(from url)----^

Just a nice soundbite.

R.

Druid (6/27/05; 18:52:52MT - usagold.com msg#: 133566)
Countdown to Iran ... and Unprecedented Spikes in Oil and Gold Prices
http://www.321energy.com/editorials/passi/passi062605.html
Snip.


"Background: On June 7, 1981, in a surprise air attack the Israeli Air Force using F-15 and F-16 fighter jets destroyed Iraq's Osirak nuclear reactor located 30 kilometers south of Baghdad. Fast-forward 20 years later. Meir Dagan, the Chief of Mossad (an Israeli intelligence and counter terrorism agency), reveals to parliament members in his inaugural appearance before the Israeli Knesset Foreign Affairs and Defense Committee that Iran is close to the "point of no return" and that the specter of Iranian possession of nuclear weapons is the greatest threat to Israel since its inception. In a 2002 address to the nation, U.S. President George W. Bush called Iran, Iraq and North Korea an "axis of evil".

During a 2003 visit to the United States, Israel's Defense Minister Shaul Mofaz stated "under no circumstances would Israel be able to tolerate nuclear weapons in Iranian possession." Six weeks earlier, Mossad had revealed plans for preemptive attacks by F-16 bombers on Iranian nuclear sites.

In September 2004, Iran rejected the International Atomic Energy Agency's call for closing down its nuclear fuel production program, which many in the U.S. and Israel believe to be linked to a covert nuclear weapons program. Iran then test fired a ballistic missile with sufficient range to hit targets in Israel as well as U.S. military installations in Iraq and throughout the Middle East.

What follows is a chronology of signs and events over the past few months pointing to an imminent conflict with Iran and, as a result, the potential interruption of oil flowing from the Gulf region.

February 2005: Former U.N. Chief Weapons inspector in Iraq (1991-1998) Scott Ritter, appearing with journalist Dahr Jamail in Washington State, dropped a shocking bombshell in a talk delivered to a packed house in Olympia's Capitol Theater. The ex-Marine turned UNSCOM weapons inspector said that U.S. President George W. Bush has "signed off" on Pentagon plans to have military capability in place by June 2005 to launch a massive aerial attack against Iran. Tehran responded that it would retaliate, if attacked, in the form of ballistic missile strikes directed against Israel. These attacks could also target U.S. military facilities in the Persian Gulf. President Bush followed this stating, "The notion that the United States is getting ready to attack Iran is simply ridiculous." He quickly added, "Having said that, all options are on the table.""


Druid: An excellent read about what might be transpiring literally at any moment regarding confrontation with Iran.


Great Albino Bat (6/27/05; 17:49:32MT - usagold.com msg#: 133565)
Towncrier: "Everything is relative!"

That's the thought that crossed my mind reading your post:

"Given the sticky political situation that has been caused by the "strong" (reserve dollar) structure of the international monetary system, we can estimate that European politicians are not overly eager to tread that same path -- having the torch passed to the euro region as the bearer of reserve currency status (with attendant non-competitive effect on export sector)."

Remember that Switzerland some 25 years or so ago, actually imposed a TAX on Swiss Francs held in Switzerland by foreigners. They did NOT WANT the whole world holding their money as a reserve; their economy could not accomodate that, the strength of their money would have killed their exports.

Now, the case of Europe, as you make it out, might be quite similar: not even Europe, with a Euro in which so many Europeans countries participate, can withstand a world demand for its money as a reserve. As you point out, it will kill its exports - just as the dollar reserve system has killed US manufacturing and exports.

So, all is relative - except GOLD! That's the only numeraire that can take on the whole world - at the right price! - with no harm to anyone's exports.

The GAB



MK (6/27/05; 16:47:26MT - usagold.com msg#: 133564)
Sundeck
Thank you for your well-thought out comments. I took particular notice of this:

"With their dollar reserves they could buy about 30 UNOCAL's at the price bid...of course, that number will come down as POO rises and the dollar declines (against commodities) and the market capitalisation of companies like UNOCAL increases. Hence, there is some urgency for China to spend early. I suspect China will be "closed out", as you put it...perhaps with a lot of argybargy to and fro. Certainly an interesting diplomacy challenge."

In the modern art of war, one need not send a conquering army. A team of accountants will do. The agressive nation state simply acquires its adversary. War over. If China can acquire 30 Unocals today, how many will it be able to acquire five years from now? Ten years from now?

On the subject of Japan, I got a bid ahead of myself. I'll just say that Japan is likely to be watching the Unocal deal with a great deal of interest.

If this route is roadblocked, it will send a very negative message to those holding the dollar. What good is it to build up a boatload of dollar reserves only to find that you can't acquire anything with it? If on the other hand the door is opened to acquisitions of U.S.-based companies, we could see a wholesale change in the make-up of corporate America. (This is the same sort of thing Putin is facing in Russia.) I suspect that the former is a more likely outcome than the latter.

Isn't it odd that the East would now be looking to the West for an Open Door policy??

Gold is the unassailable alternative in a financial world gone awry. These are dangerous times. One mis-step -- one wrong signal -- here and the whole financial system could come unglued.

TownCrier (6/27/05; 15:47:23MT - usagold.com msg#: 133563)
Euro off highs but stays firm on talk of reserves diversification
http://www.channelnewsasia.com/stories/afp_world_business/view/155012/1/.html
LONDON : The euro fell back off earlier highs but remained firm on talk of central banks diversifying their reserves away from dollars and into euros....

"The last couple of weeks have been very good for the dollar, but it didn't manage to hold below 1.20 against the euro last week and now we're seeing a bit of a pause," said Gary Noone, analyst at Informa Global Markets.

The euro moved higher earlier Monday on talk that Qatar's central bank may be looking to diversify its reserves away from dollars by buying euros, he said.

He also pointed to a comment over the weekend from a Japanese official suggesting that Japan may look to rebalance its foreign exchange reserves away from US dollars once the dollar is sufficiently strong to avoid any negative impact.

"All this has ignited concerns that central banks want to reallocate reserves towards the euro and away from the dollar," Noone said.

^----(from url)----^

Will reiterate what I have said before.

Given the sticky political situation that has been caused by the "strong" (reserve dollar) structure of the international monetary system, we can estimate that European politicians are not overly eager to tread that same path -- having the torch passed to the euro region as the bearer of reserve currency status (with attendant non-competitive effect on export sector).

Given that central banks have demonstrated ample understanding regarding the breaks and/or acceleration than can applied to gold capital gains on the basis of leasing activity which they do have the power to control, the trail ahead should begin to look clear even to a novice hiker.

When a central banker evaluates the best structure for the CB's balance sheet, he has every reason to be impressed by the combined effect of the gold leasing curbs of the Washington Agreement together with the gains in average annual gold price over each of the past three years of 14.4 percent, 17.3 percent, and 12.6 percent.

Compared to these capital gains, the alternative interest yields on government bonds look trivial at best, and the attendant political and depreciation risks look worrisome on top of it all.

Therefore, in light of political realities and sound economics, it becomes an easy and prudential decision to consider a realignment of the primary reserve structure from one centered on floating U.S. dollars and dollar-denominated bonds to one centered on floating (mark-to-market) non-leased gold.

It would be against the market value of this asset base that each central bank would issue the high-powered monetary base which is put into full popular use by commercial banks.

Adjustments to the 'permanent" money supply (similar to the Fed buying or selling Treasuries outright in this current era) would subsequently be done effectively through either decisions against gold's revaluation account (whether or not to monetize capital gains) or though open market gold purchases or sales.

Fine tuning of monetary policy would likely continue as presently done -- with marginal lending or refinancing operations conducted repurchase and reverse-repo agreements at a target rate against politically appropriate collateral such as mortgage-backed securities.

A bold new world with a value upon gold that you will probably simply have to see (experience) to believe.

R.

mdgc (6/27/05; 15:42:37MT - usagold.com msg#: 133562)
Taiwan
Canamami The people of Tawiwan are voting with their feet. About 1,000,000 of them now live on the mainland, about a half million in Shanghai alone. Some are there working for Tatiwan companies with operations on the mainland. Many are retired, and some just like the big city. The likelihood of war is in fact quite remote.

USAGOLD Daily Market Report (6/27/05; 14:49:35MT - usagold.com msg#: 133561)
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.

Monday Market Excerpts

Gold steady ahead of Fed

June 27 (from DowJones) -- Gold futures finished with a tiny loss in New York on Monday when the market initially fell at least partly in reaction to the most recent Commitments of Traders data, but recovered most of a modest decline late in the day on short covering encouraged by ongoing strength in crude-oil prices, analysts and traders said.

The session was described as one of the quieter ones in a while. One trader suggested the metals might in a holding pattern ahead of a Federal Open Market Committee meeting on Wednesday and Thursday, while another suggested the inactivity could have been due to the expiration of the July options.

August gold dipped 30 cents to $441.70.

"We had two-way fund action," said Tom Boustead, metals analyst with Refco. "And dealers were selling into it." However, the metal did recover from a low of $440.10.

"That was (because of) the oil," said George Gero, senior vice president with Legg Mason Wood Walker. "People were covering their shorts, just in case." Shortly after gold closed, August crude was up 81 cents to $60.65.

Otherwise, both Boustead and a trader suggested that a modest amount of pressure might have come from the big jump in the net long position of large speculators, as reported in Friday's Commitment of Traders data. The large specs' net long position now stands at 108,510 lots. "A lot of speculative buyers have entered quickly," said Boustead.

----(see url for full news, 24-hr headlines)---

TownCrier (6/27/05; 14:14:01MT - usagold.com msg#: 133560)
Pssssst... a new Buyers' Group Special has just been born
http://www.usagold.com/gold/special/wilhelm.html
Wilhelm I gold 20 marks, plus an associated deal on gold 20 franc Napoleon III's.

Click url for more details.

R.

Goldilox (6/27/05; 14:04:27MT - usagold.com msg#: 133559)
Specs still driving rallies
Oil crosses $60/bbl

Gold holds near $440/oz

GOOG crosses $300/share

Media pundits suggest FED sponsored liquidity is still active in the markets. I leave it to your imagination to decifer which market has the greatest "spec" participation.

Maybe everything going up is the best confirmation of "invisible inflafla".

Goldilox (6/27/05; 13:59:45MT - usagold.com msg#: 133558)
EQ watch
http://earthquake.usgs.gov/recenteqsww/Maps/10/325_5_eqs.html
The latest surprise comes in the Mid-Atlantic Ridge, a little too close to the Canary Islands for comfort. Of major concern is the volcanic lip hanging off La Palma, which has the potential to create a very large Tsunami if fractured.

Of course, a similar situation exists off shore from the constant flow of Kilauea, so neither ocean is exempt from this concern.


Goldilox (6/27/05; 13:43:54MT - usagold.com msg#: 133557)
Smuggling Nukes
@ Canamami,

Smuggling nukes is a really dangerous and short-sighted game. All too often, the regimes the CIA has supported turned on them in the long run. I'd hate to have those nukes become the "preferred currency" of regime change anywhere in the world. If the Taiwanese don't use them, they are likely to become property of the Chinese Army at some point.

We trained Al Qeada to do a job on the USSR in Afghanistan and "according to secret intelligence", they used that training to engineer 9/11 (something I am not completely convinced of). Reagan called these guys "heroic freedom fighters" and dedicated a Shuttle mission to them. Now they are enemy #1 of the free world. There's just too much flip-flopping of who's friendly and who's not to derive any warm fuzzies from this dangerous trade!


TownCrier (6/27/05; 12:46:34MT - usagold.com msg#: 133556)
Dollar slips against euro amid record crude prices
http://today.reuters.co.uk/investing/financeArticle.aspx?type=allBreakingNews&storyID=2005-06-27T164830Z_01_N27294853_RTRIDST_0_MARKETS-FOREX-UPDATE-7.XML
NEW YORK, June 27 (Reuters) - The dollar and yen both slipped against the euro on Monday on concerns that record high oil prices could threaten economic growth...

The yen was also hurt, edging nearer to an eight-month low against the dollar, after China said it would not be browbeaten into revaluing its yuan currency peg.

"The Chinese confirmed they like the idea of a revaluation but they will not be pushed around by the United States," said Tim O'Sullivan, chief dealer at Gain Capital in Warren, New Jersey.

Oil prices remained one of the big trading drivers on Monday, analysts and dealers said, with crude leaping 1 percent to a record above $60 a barrel.

The rise in energy prices sparked concerns from the world's most powerful central bankers, meeting in Basel for the annual meeting of the Bank for International Settlements...

The euro was ... helped by comments from Qatar's central bank governor, who told Reuters at the weekend that the oil-producing country was considering shifting some of its largely dollar-denominated currency reserves back to the euro given the currency's fall this year.

^----(see url)----^

With oil at $61 and currency squabbles showing no end in sight, don't let yourself be bullied by inflation. Choose gold as your principal savings, securely preserving your purchasing power.

R.

TownCrier (6/27/05; 12:32:25MT - usagold.com msg#: 133555)
Eye on China: One currency, two views
http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10333026
June 28, 2005 -- The single greatest issue facing anybody trading or investing in China now is whether the decade-long link between the US dollar and the yuan will be dismantled.

...the peg has become the focus for US politicians wishing to protect the jobs of their constituents and to reduce the United States' US$700 billion trade deficit.

It has also become a test of how China's leaders, President Hu Jintao and Premier Wen Jiabo, can resist US pressure.

The US knows that if the yuan is made to strengthen, more US dollars will be needed to acquire Chinese goods. More expensive Chinese goods should mean reduced demand, thereby trimming the US deficit with China, giving local goods a better chance.

However, it is possible to accuse the US of bad faith. Some argue that a fairer and less confrontational way to reduce the trade deficit would be by signalling to US citizens - through much higher interest rates - to consume fewer foreign goods.

...There is only one problem with this argument, but is a big one. It would offend the US consumer - politically a difficult option.

...Were the debate to remain in the economic sphere, Chinese concerns would be limited. But, of course, there is a political dimension and the precedents make China profoundly uneasy.

Take the experience of Indonesia's former leader Suharto. Many Chinese believe the Indonesian rupiah, which was also pegged to the US dollar, was forced off the peg by the intervention of the International Monetary Fund, to bring about the economic collapse of the country and, hence, regime change. The plan, if indeed there was one, worked beautifully: widespread resentment in the wake of the bank failures and capital flight triggered by the devaluation of the rupiah forced Suharto out of power in 1998.

The Chinese will also have seen the effect currency devaluation had on Japan. In the 1980s, the US was facing many of the problems it faces now, including spiralling trade and budget deficits.

In 1986, the US convened the world's No 2 and No 3 economies, Japan and Germany, and told them to find ways to shrink the US trade deficit ... or else.

... Japan (Germany demonstrated more spine) agreed to help reduce the US deficit by boosting domestic consumption. Japan slashed interest rates and printed money at twice the growth rate of GDP, thereby unleashing a terrific bubble. As is well known, that bubble detonated in 1990 causing a crash that is still reverberating throughout the Japanese economy.

If that's the way the US treated its most loyal east Asian ally, the Chinese have every reason to be concerned about how the US will use economic policy against them...

^-----(see url for full article)----^

For security in these times of uncertainty, choose gold.

R.

Cavan Man (6/27/05; 12:03:33MT - usagold.com msg#: 133554)
canamami
"Seems to be a bit shaky"; no kidding? SH was a a US ally. We made him what he was and maintained him in the region.

canamami (6/27/05; 11:48:17MT - usagold.com msg#: 133553)
Goldilox - Saddam
I didn't say that Saddam was in tight with al Quada, but rather that he was promoting himself as an Islamic as opposed to a secular leader, in the period after the Gulf War.

The US has got itself in a pickle trying to play the political game in that part of the world. Better simply to let all parties know: "Leave us alone, or we'll wipe you off the face of the Earth, no holds barred". In other words, update Eisenhower's policies to the present day.

canamami (6/27/05; 11:42:42MT - usagold.com msg#: 133552)
Goldilox - Taiwan
I fear you are right that the world (including the US) will abandon Taiwan to its fate. I don't think it will be primarily for economic reasons, but because it matters more to the Chinese than to the West, and the US will not want to risk a nuclear war over Taiwan. That's why it would make sense to smuggle nukes and delivery systems to Taiwan - let the choice be theirs how to deal with the mainland, and what risks to take. After all, it's their freedom, not ours.



Goldilox (6/27/05; 10:27:16MT - usagold.com msg#: 133551)
"Islamist Stance" and Taiwan
@ Canamami,

Your quote: "However, he apparently had moved to a more Islamist stance in the years following the First Gulf War, such that he was less of a secular leader than before."

. . . is an interesting hypothesis, but hasn't survived the scrutiny of post-war investigations. The evidence is stronger that he was the puppet who said ""NO" to his masters once too often.

More important is the realization that invasion of Iraq was predicated on its strategic importance, as opposed to the lessor strategic targets but much worse human rights crises in Africa.

My reason for continuing the discussion (carefully) is to suggest that the Taiwan issue is much more convoluted than the Iraq question by virtue of the huge trade relations with China. Do we sacrifice Wal-Mart and 80% of tech manufacturing to save face in Taiwan?

In fact, judging the tone of the press and Congress, China's effect on the oil demand curve is an even greater concern than Iraq's effect on the supply curve.

The Chinese are proving to be much stronger chess opponents than Saddam, and one would question whether the Taiwan situation will get anything near the response of the Kuwait invasion. Thus my suggestion of a Hong Kong style "RE deal".


TownCrier (6/27/05; 10:26:03MT - usagold.com msg#: 133550)
US imbalances could disrupt forex markets - BIS
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh80569_2005-06-27_10-00-13_l24705330_newsml
BASEL, Switzerland, June 27 (Reuters) - The U.S. current account deficit is unsustainable and the continuing lack of policy response could disrupt markets, the Bank for International Settlements said in a report on Monday.

In its annual report, the Basel-based BIS said disorderly currency movements caused by imbalances could damage the dollar's prominent position as a reserve currency.

"...the continuing absence of a policy response increases the chances of a disorderly market adjustment."

"Disorderly currency movements could alter the roles of the U.S. dollar and euro as reserve currencies, with further unpredictable outcomes," the BIS said.

"The dollar zone has been shrinking, and any acceleration of this could eventually give rise to portfolio imbalance in both private and official sectors," the BIS said.

The BIS added: "The fact that creditors to the United States bear the market risk associated with dollar depreciation raises the possibility that they could try to cover their positions in times of stress.

^------(from url)-----^

Who's your Friend? Having thus been duly cautioned against an unprecedented shake-up, the task of diversification for personal financial security is now up to you. Choose gold. USAGOLD-Centennial stands ready to help.

R.

TownCrier (6/27/05; 10:10:19MT - usagold.com msg#: 133549)
Spot gold predicted to double in coming months
http://www.purchasing.com/article/CA621537.html?title=Article&spacedesc=news&nid=2520
June 27, 2005

Speakers at the recent New York Institutional Gold Conference predict that the price of spot gold could get as high as $850 a troy ounce in coming months from its current level slightly in excess of $425.

Some economists contend this means investors are leaning toward the precious metal, and not the dollar, as their speculative hedge against future inflation.

The last time gold got anywhere near the projected high was in the late 1970s when out-of-control inflation, unrest in the Middle East and an oil crisis pushed the precious metal from $150 to $810.

...It is oil prices that are really making the gold market look like 1970s redux, with crude oil prices hovering near $60 a barrel. ..."Middle East nations are getting more petrol dollars as (oil) prices rise, and they're not putting it back into paper assets," writes Charles de Vaulx, manager of the First Eagle Gold Fund. "They're trying to protect the value of their profits—just like in the 1970s—so they're buying gold."

^------(from url)----^

You, too, can turn your income stream into gold. Call USAGOLD-Centennial today to begin a diversification program that fits your financial goals.

Don't be left behind, choose gold.

1-800-869-5115 (Ext.100)

R.

Goldilox (6/27/05; 09:45:36MT - usagold.com msg#: 133548)
Speech
@ White Rose,

Thanks very much for the clarification.

Dollar Bill (6/27/05; 09:43:35MT - usagold.com msg#: 133547)
.,.
Goldendome, I will stick to scheduleing. I read Pritcho too often to get myself to think I was argueing with him. I think he makes a great discussion mate. We are reacting to the world round us, and it is a wild world. I did feel a bit, hmmm, I cant find the adjective, I did start the day wanting MK's vision, and I was not at all itching to lay out a nwo vision that I apparently have.
I hope it does not wreck the possibility of MK laying out his thoughts on the various topics. Well, I know it wont, and when he next posts, is up to his self generated impulses. I know MK has great vision, and this is a wild and unexplored terrain we are in now. Randy too of course, and the whole dang crew here.
The financial dealings of the world, I would say, is perhaps the greatest man made show on earth right now.
And viewing it from USAGOLD is just a real fortune.

USAGOLD / Centennial Precious Metals, Inc. (6/27/05; 09:40:46MT - usagold.com msg#: 133546)
FREE Gold Information Packet...
http://www.usagold.com/Order_Form.html





canamami (6/27/05; 09:01:09MT - usagold.com msg#: 133545)
Reply to Goldilox
Re Iraq - Yes, the stated reasons for going in do seem to be shaky. Going in under incorrect pretences with incoherent objectives has undermined the whole operation.

The thing is, if Saddam had simply contented himself with bullying Kuwait for concessions without actually invading, he'd be sitting pretty right now. The whole chain of events re Iraq would not have occurred, and he'd probably be a US ally in the region. He could have moved to Euro settlement with impunity, if he wished.

He was primarily a secular leader. However, he apparently had moved to a more Islamist stance in the years following the First Gulf War, such that he was less of a secular leader than before.


White Rose (6/27/05; 09:00:51MT - usagold.com msg#: 133544)
Prez speech and George Ure
Things can bounce around in these web forums.

1) On Sunday, George Ure's site suggested the speech will be about peace with the insuregents

2) This morning, Goldilox reprinted the Sunday column

3) I posted disagreement, and then decided to e-mail my comments on this forum to George Ure. He immediately printed my comments.

4) Now it looks like I say "I disagree" when my comments are in both places.

5) George thinks things are leaning towards some sort of peace deal. I say things are leaning towards war with Iran. We could be both right (the US negotiating peace with the insurgents to allow for war).

6) As it stands, George still thinks peace is coming, and I still see more war. We will see. I suggest we all get our ducks in a row.

Goldilox (6/27/05; 08:42:21MT - usagold.com msg#: 133543)
Another Interesting "Conundrum"
We see the Dx fall some today without contrary reaction in the PMs. More evidence of "decoupling"?

Goldilox (6/27/05; 08:37:56MT - usagold.com msg#: 133542)
More Root Cause
@ Canamami,

Your Quote: :Does anyone really believe the US would be in the Middle East now but for 9/11?"

ignores the fact that 9/11 evidence has been so not forthcoming and distorted that no one really knows who truly engineered the deed. Nine of the accused "martyrs" are alive and well in Paris and other locations. Reincarnation - or just a case of "mistaken identity"?

It's been widely shown that Saddam (a secular leader) had little or no contact with the religious radicals (who hated him as much as anyone) that were blamed for 9/11, so the above quote fails everywhere except on the FOX surface. In fact, the Pax Americana documents planning the invasion of Iraq were drawn up in 1998, long before the 9/11 trigger event.

As we have seen obvious non-participation in African civil strife that has left millions dead, one must surmise that decisions about involvement require that strategic demand be high enough - political ideology alone is not sufficient.

The Taiwan question is going to grow in relevance, but will the western oil powers risk all for it, or will it be "negotiated" into a RE deal a la Hong Kong?

China's rather boisterous oil activities are very likely fomented to position them well in said negotiations as at least a secondary motivation.

Goldilox (6/27/05; 08:08:19MT - usagold.com msg#: 133541)
Ure's view of Bragg Speech
@ White Rose,

You posted George's speech analysis, and stated that you disagree.

I'm curious. What do you see instead?



Cavan Man (6/27/05; 07:58:01MT - usagold.com msg#: 133540)
canamami
"Root cause" analysis is always prudent and a necessary prerequisite for problem resolution. Asking "why" is the first step upon the path to understanding. Yes, 150,000 innocent human beings lost as collateral damage in the hunt for WMD is indeed a few pints of blood. As we try to "save ourselves", humanity and life hangs in the balance.

canamami (6/27/05; 07:14:40MT - usagold.com msg#: 133539)
Reply to Pritcho - somewhat OT
I'm not going to respond in kind to your comments, partly because when I composed the post I was indeed wound up by a Washington Times article that the Pentagon now believes China will invade Taiwan within two years.

But I do have some replies.

Why should China be allowed to invade Taiwan? They have only de facto been part of the the same country for 4 years out of the last 110 years (i.e, 1945-49). How is it RACIST to want to allow the Taiwanese to deter an invasion; both groups are ethnically Chinese (though the native Taiwanese may have a somewhat different view of themselves). Why should we allow a democracy of 30 million to be conquered by a non-democratic country? Would you also abandon Australia and New Zealand, if they were attacked? Why defend Australia if not Taiwan? Perhaps the response to that question might reveal something akin to "racism".

Does anyone really believe the US would be in the Middle East now but for 9/11? Evil attacked your shores, and continues to wish you ill. That's why you Americans must act vigourously to save yourselves before it's too late. In human history, tyranny is the norm. For all its faults, the US has always been a great beacon of a better way.

The $US role as a reserve currency was not part of an evil design; it arose haphazard after the War because only the $US could fulfill that role. The gold exchange was a "freebee" add-on by the US at the end of the Bretton Woods negotiations; the world would have accepted $US hegemony without the gold exchange provision. Moreover, no country has suffered more from the hegemony than the US itself - you don't make very much anymore, and your economy is wildly distorted.

Look, like all great powers, the US has blood and some injustices on its hands. But, relative to other great powers, the US is positively saintly. Heaven help us if the US ever ceases to be the dominant military power. Be careful of what you wish for.







White Rose (6/27/05; 05:20:14MT - usagold.com msg#: 133538)
I disagree with George Ure (Goldilox msg#: 133534)
1) Bush's speech at 8pm Tuesday night is being broadcast at a major US military base (Fort Bragg). You do not go to a military base to announce a cowardly series of negotiations with your enemy. It is far more likely to be the announcement of a war on Iran.
2) Perhaps the negotiations were intended to stay secret and were designed to facilitate the war on Iran. After all, most of the Insurgents are Sunni, and Iran is Shiite.
3) I will still lay even money that a new war will start around 6:15 Eastern Time on Tuesday.
4) Watch the oil market. Negotiations with insurgents would imply a lower oil price. War with Iran implies a higher price. Which direction are you seeing?

Sundeck (6/27/05; 03:39:02MT - usagold.com msg#: 133537)
Only the good die young
I am waiting for my potatoes to roast in the oven and listening to the **golden** voice of Eva Cassidy on CD...what a great loss; only the good die young...

:-)

Sundeck (6/27/05; 03:10:27MT - usagold.com msg#: 133536)
Discretion
@Goldilox

"Discretion is the better part of valour."

I hope someone pulled W aside and whispered this to him in both ears.

Seriously, the US has so much to offer the world without Ramboistic displays...for Pete's sake, they created The Blues (ok, with a bit of help from Africa), they were the first to the Moon and the IT explosion is ongoing... Why NOT rest on the laurels for a bit?

;-)

Topaz (6/27/05; 01:42:27MT - usagold.com msg#: 133535)
S-o-StockMarket.
They've got but 3 days to get the Buck down below 85 and deliver a windfall... they can't, can they?

Bonds (yield) are getting by on snorkel gear at this time, any lower and full-blown scuba rig is needed ...requiring a return to the surface...
...so a quick trip down to 85 and rapid return is not "completely" out of the question.

Au - imo, it'll flop with the Currencies.
Ag - Let's not go there!!

Goldilox (6/27/05; 01:18:04MT - usagold.com msg#: 133534)
Desperate to Withdraw?
http://urbansurvival.com/week.htm
snip:

With GW giving a speech on Iraq tomorrow night, we are hearing from our highly credible sources in Baghdad that the US is desperate to cobble up a withdrawal strategy:
I DONT KNOW WHAT YOU ARE HEARING BACK AT HOME BUT THE WORD HERE ON THE GROUND IS THAT THE US IS DESPERATELY NEGOTIATING UNDER THE TABLE, TRYING TO FIND A WAY OUT OF THE MIDEAST. AS I TELL YOU THIS MORE AND MORE INSURGENTS ARE POURING ACROSS EVERY BORDER. THINGS ACTUALLY LOOK WORSE THAN THEY EVER HAVE IN THE PAST.

WANDERING TEXAN ON THE GROUND - IRAQ

This gets us to the latest notes from HPH:

Note the days that this occurred. And when it is now appearing. We will see much fallout from this. Many of the current supporters of Bush will see this as a sell-out. And this will likely rile the markets...if the US concedes what happens to Iraqi oil and Haliburton contracts? And how do the political class justify the deaths and other crimes to come from their action?

Curious though that it took place on the 3rd and again the 13th.

Rumsfeld: U.S. Met With Iraq Insurgents By THOMAS WAGNER, Associated Press Writer1 hour, 53 minutes ago Secretary of Defense Donald H. Rumsfeld acknowledged Sunday that U.S. officials have met with insurgents in Iraq, after a British newspaper reported that two such meetings took place recently at a villa north of Baghdad. Insurgent commanders "apparently came face to face" with four American officials during meetings on June 3 and June 13 at a villa near Balad, about 25 miles north of Baghdad, The Sunday Times reported.

Unfortunately, now that this kind of thing kicks out into the public, it will fuel the will of the insurgents and will make a "victory" all that much harder for the US to attain - provided someone can show us a definition for "victory" there that makes sense beyond fattening up corporate coffers and depressing unemployment...

-Goldilox

Recognizing UrbanSurvival as an unofficial "underground" source, the field reporters have a stellar record so far.

I post this not as commentary on the war, but its potential market effects.

Goldilox (6/27/05; 01:05:14MT - usagold.com msg#: 133533)
DX
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
@ Gandalf,

The DX seems to be setting up for more Monday morning waterfall action, but with gold seeming to "decouple", I wonder what the reaction effect will be.

I hope the mutts are "at the ready"!

Goldilox (6/27/05; 00:53:37MT - usagold.com msg#: 133532)
China and oil
@ Sundeck,

I heartily agree with your observations on the Chinese motives for the CNOOC bid. Naughty, indeed! A little winking and flexing in the mirror, perhaps?

With the recent hullabaloo about Japan's war crimes in China, it seems a bit of a slap to them, as well, since Pearl Harbor was "inspired" by the cutoff of oil to Imperial Japan.

China has been scurrying about signing contracts with Venezuela and Iran, thus the offer for UnoCal seems like a move to "cover all bases".

In the annals of world chess, this move ranks up there with Saddam's request to the UN for payment in Euros, but probably a lot better politically defended.

Goldilox (6/27/05; 00:41:06MT - usagold.com msg#: 133531)
Open Forum closed
@ Goldendome

You are correct, and I will understand if my tardy reply is deleted by ADMIN.

Apologies to the site!

-G

Sundeck (6/27/05; 00:40:35MT - usagold.com msg#: 133530)
More sundry comments: MK 's Market Making points; Chomping on Chomsky and is The Dollar billing its creditors?
@MK et al.,

Very nice array of points, Sir MK. A couple of comments/questions:


a) You said:
"If the Chinese are closed out on this, I would suspect a severe reaction at some point down the road."

If one were to be just a little bit cynical and suggest that the US is playing hard-ball in the ME over energy-security, then the Chinese are being just a little bit naughty in bidding for UNOCAL - downright provocative, in fact...sort of like the US pouring oil in at the top while China is punching holes in the barrel and taking it out at the bottom. With their dollar reserves they could buy about 30 UNOCAL's at the price bid...of course, that number will come down as POO rises and the dollar declines (against commodities) and the market capitalisation of companies like UNOCAL increases. Hence, there is some urgency for China to spend early. I suspect China will be "closed out", as you put it...perhaps with a lot of argybargy to and fro. Certainly an interesting diplomacy challenge.

b) What of Japan though (your eighth point)? I don't recall it being in the news lately as a corporate raider of note, and its dollar reserves are enormous, and its energy/resource needs are just as pressing, if not more so than China's. Of course, the Japan/USA relationship is a little different...I suspect Japan is bankrolling the US in exchange for defacto military security...Uncle Sam "billing" its major creditor, if you like?



@Dollar Bill and PRITCHO

Chomsky...a formidable, scientific intellect in (one of) the land(s) of free speech... Let's try to keep it that way.

Scientific and intellectual ability and political nous are frequently miles apart...science is all about honesty and truth and observational integrity, and politics is all about expediency by whatever means are available...

I don't know if Chomsky would have made a good politician. I am a little more convinced that George Bush would not have made a very good scientist...

Have a nice day...

;-)

Goldendome (6/27/05; 00:11:10MT - usagold.com msg#: 133528)
Sirs Pritcho & Dollar B.

Lest you lose open forum privileges for all, I would like to suggest that you discontinue your argument until at least next weekend. Remember? Noon on Friday until noon on Sunday?



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