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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...

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ARCHIVED DISCUSSION FROM 12/28/2001
All times are U.S. Mountain Time

(Yesterday's Discussion.)

TEX (12/28/01; 23:59:05MT - usagold.com msg#: 67427)
Friday Night Double Whammy
Let me set the stage........its cold outside here in Colorado (25 F) and I'm sitting in my hot tub drinking a cold beer peering through the steam watching the outdoor TV. The first whammy was getting to watch Major Applewhite bring back the Texas Longhorns to win the Holiday Bowl (Hook Em Horns)! The second whammy was the follow up watching "Your World with Neal Cavuto" on FOX. One of the talking heads recommended Harmony Gold as a promising stock investment! Whoa.....that's the first time I've heard anyone on network TV recommended any kind of gold stock. I dropped my beer and had to get the "missus" to bring me another. Probably messed up my chemical balance too!

Happy New Year to all!

USAGOLD (12/28/01; 22:06:13MT - usagold.com msg#: 67426)
Black Blade, Randy . . . . . .
http://quotes.ino.com/exchanges/?c=metals
For what its worth, for the first time I can remember all the precious metals, including gold, closed in backwardation today. Aberration? Oddity? I don't know. What it means though is that for the moment metal in the hand is worth more than the promise to deliver in the future.

Waverider (12/28/01; 21:18:49MT - usagold.com msg#: 67425)
Deutsche Bank to Cut 2,100 Jobs
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT36A51CSVC&live=true&useoverridetemplate=ZZZ99ZVV70C&tagid=FTDO9DHMZJC
Snippit:
"Deutsche Bank, Germany's biggest bank, said on Friday it would cut 2,100 more jobs, taking the total number of planned lay-offs to more than 9,000, about 9 per cent of its workforce. Analysts said further cuts were likely next year as Deutsche struggled to control costs at a time of deepening economic uncertainty."

Waverider: 2,100 more Bankster Bones.(I'll refrain from your more "colorful" expressions Black Blade).
BTW, the article posted on Barrick failed to mention that the US Federal Trade Commission has cleared Newmont's plan to buy Normandy and Franco-Nevada (FN News, Dec.27). Also, I saw The Lord of the Rings earlier this week with my goddaughter and I found the special effects pretty phenomenal. Aside from the pure entertainment value, it was a great opportunity to talk with her about the darker side of human nature - insidiousness/seductiveness of power and greed, etc. A good reminder for all of us when Gold hits 4 digits!
Cheers,
Waverider

Black Blade (12/28/01; 20:12:21MT - usagold.com msg#: 67424)
Silver Lease Rates
http://www.kitco.com/market/LFrate.html

My take is that there is no significant supply of silver available for immediate or short term leasing. The shorts have been backed into a corner and forced to cover. Now we await to see if the NYMEX defaults on Silver contracts as they did with Palladium last year. They defaulted on Silver at least once before when the Hunt brothers were caught in a bind when the NYMEX/COMEX changed the rules and defaulted in the middle of the game. Ah, the "Games" people play.

As I said, I believe that the listing of NA forone month rates are due to a lack of significant Silver supply and shorts will have to move to still high rate on dates further on out. This could still develop into something "interesting."

- Black Blade

Black Blade (12/28/01; 20:01:26MT - usagold.com msg#: 67423)
Tower Automotive to cut jobs, take 4th qtr charges
http://biz.yahoo.com/rf/011228/n28144001_1.html

Snippit:

GRAND RAPIDS, Mich., Dec 28 (Reuters) - Auto parts manufacturer Tower Automotive Inc. (NYSE:TWR) said on Friday it will take a $289 million restructuring charge in the current quarter and cut 215 jobs in the United States and Canada next year. The company also said it is looking to close its Milwaukee Press Operations plant, which would affect 490 hourly workers and 40 salaried staff.

Black Blade: Yep, that's another 745 "Bones" cast aside like used $2.00 whores. We should see an acceleration in "Bone Pile" growth after New Year's. In a word - "GRIM"

Black Blade (12/28/01; 19:56:20MT - usagold.com msg#: 67422)
Oracle to Cut Up to 850 Jobs
http://dailynews.yahoo.com/h/ap/20011228/tc/oracle_cutbacks_1.html

Snippit:

SAN FRANCISCO (AP) - Coming off its toughest quarter in a decade, business software giant Oracle Corp. Friday said it will fire up to 850 employees, or 2 percent of its worldwide work force, early next year to help offset sluggish sales.

Black Blade: There's another 850 consumer "Bones" that won't be feeling too "confident" as they are shuffled off to the growing "Bone Pile." Look for many more "Bones" to be added to the "Bone Pile" in coming months.

Black Blade (12/28/01; 19:45:06MT - usagold.com msg#: 67421)
Barrick Gold Joins Battle for a Rival
http://www.nytimes.com/2001/12/28/business/worldbusiness/28GOLD.html?ex=1010206800&en=c8f9652dc62f8024&ei=5040&partner=MOREOVER

Snippit:

ORONTO, Dec. 27 - Citing the need for a long-overdue rationalization in the gold mining industry, Barrick Gold of Toronto has waded into the takeover battle over Normandy Mining of Australia, with plans for closer cooperation with AngloGold of South Africa if AngloGold's bid for Normandy succeeds.

Black Blade: No surprise here as both Randolf Olipants and Booby Goodsell are sweating bullets as the hedging game is likely to come apart and send both companies into chapter 7 should Newmont-Franco take over Normandy and unwind the hedge book. This would send a signal to Wall Street that the game is over and a quick unwinding of 9.5 million oz. in forward sales would not go unnoticed. If this should create a cascade of clearing the books, then the massive over-exposure at AU and ABX would likely trigger margin calls ala Ashanti, Emperor, and Cambior. Though some claim that certain parties (ie. Barrick) are immune to margin risk with a rising POG as they have a "special" arrangement with their counter-parties. Such an arrangement where the banker (or commodity brokerage) provides the financing and assumes all of the risk is highly unusual and "unprecedented." I for one would dare these Gold producers to post these contracts in full on their web sites for public perusal. Somehow I doubt they will. It is obvious that the War of the Hedgers vs. the Non-hedgers over Normandy is of such extreme importance that I do not think that this saga is quite over yet (not unless AU-ABX are ready to capitulate). Notice all the desperate moves by AngloGold during this latest battle. Now the most over-exposed hedgers are entering the match as Tag-Team partners. "Interesting Times"

shades (12/28/01; 19:44:09MT - usagold.com msg#: 67420)
cabal manipulation
For what its worth I say let tptb manipulate gold as long as they can but if silver reaches crisis level as soon it should ie guvmint supplies to the mint the renewwd focus will be placed on pms and if no supply of silver can be provided then a concerted interest will be placed to all pms, btw total respect for the veteran learned posters to this forum

mikal (12/28/01; 18:18:45MT - usagold.com msg#: 67419)
Consumer confidence charade
That was quite an impressive leap in those numbers today, the first increase in 6 months at that! This particular fraud is so old yet so blatant, considering that they should have fudged the size of the "survey sample" to reach a valid level way above the reported 5000 households. Yet the numbers are taken seriously, even though 5000 households represents only 1.25% of all households in U.S., assuming there are 40 million, approximate, total in U.S. What kind of statistical science is that! Maybe the precious metal industry can take a cue from this and promote investment based on "surveys". What are they waiting for?

R Powell (12/28/01; 18:07:56MT - usagold.com msg#: 67418)
Lease rate question
Kitco listed the one month lease rate on silver as down to less than one percent early today and then changed both the rate and % of change to NA for the one month period. I'm wondering if this means the lease rate is not available to be listed OR if silver can no longer be leased for the one month time period? The longer term rates were down and Silver closed the day at $4.48.
Still not much news other than a possible physical shortage in London to explain the rates. Seems plausible that more would be borrowers than lenders would drive the rates up but this could happen no matter how much was available in the lending bin. As usual, so many questions, so few answers! Why no one month lease rate??
Happy weekend
Rich

R Powell (12/28/01; 17:53:57MT - usagold.com msg#: 67417)
By-product silver
From #67382, Solomon asked, "Does anyone out there know how long it takes to move silver from a zinc mine out to a pure industrial grade material ready for use?"
Nothing definitive but I believe that most silver by-product from zinc, gold, copper, lead and nickel mines is sold regardless of price. The proceeds are used to lower the cost of production of the primary metal mined. If price is not considered when selling then the by-products are probably sold on a set timetable (once a month?) or whever a certain amount becomes available for market. Production cutbacks of the primary would also reduce by-product so any economic slowdown cuts silver production. Many primary producers have already cut back or shut down to maintenance.
That's about all I can offer.
Happy weekend
Rich

site steward (12/28/01; 16:56:58MT - usagold.com msg#: 67416)
HEADLINE: Korea and gold make surprise best investments
http://www.thetimes.co.uk/article/0,,2001180001-2001602657,00.html
[The Times] 29Dec01 -- Look away now if you bought a technology or telecoms fund at the beginning of the year. Year-to-date losses average 42 per cent. Fund investors have had little to smile about in 2001, wherever they have put their money. Only one in eight funds has produced a positive return before charges and tax, a figure greatly distorted by the inclusion of corporate bond trusts. Bonds aside, the score for equity based funds is far lower, reflecting the double-digit falls on the London stock market and elsewhere.

.....The other surprise has been the performance of funds investing in gold. The Merrill Lynch Gold and General fund scrapes into the top ten with a 32.5 per cent return (compared with an average decline of 12.4 for trusts as a whole).----------

Bottom line: Saving your wealth is better than losing your money ANY day of the week.

R.

site steward (12/28/01; 16:09:58MT - usagold.com msg#: 67415)
The primary impetus behind the market's longterm (centuries) evolutionary forces on the banking system
http://biz.yahoo.com/rf/011228/n28154602_2.html
Seen clearly here in Argentina:

------Penniless consumers lined up in blistering heat to pull savings from a banking system facing collapse. The new currency will provide relief from strict limits on cash withdrawals and foreign exchange deals aimed at averting a run on the banks.

... Looting and rioting last week against austerity measures killed 27 people and forced Fernando de la Rua to quit the presidency two years early.

...In two weeks the argentino -- will be on the streets floating freely alongside the peso, which has been pegged one-to-one with the dollar for a decade...

...The Central Bank loosened its grip on savers by letting them pay dollar-denominated debts with the pesos in which wages are paid. Almost all house and car loans here are denominated in dollars, meaning devaluation could cause bankruptcies.-------

All these signs point toward ONE natural and inevitable evolutionary conclusion for the monetary system. You can read more about it at the Gold Trail and in some of the Hall of Fame posts.

It's actually quite remarkable to see Agentina going through this phase of the monetary evolution in this modern day and age... something addressed by so many others decades ago. So what's the lesson for the enlightened man of today? Again, from the article:

--------``You've got to keep your money under the mattress,'' said one livid young man waiting outside a bank in downtown Buenos Aires. ``You can't trust the banks. There may as well be no banks now in Argentina. There is no cash.''-----------

Well, that's a bit stark and overstated as one might expect in the midst of a crisis. The better and more tempered articulation would sound something like this:

"""National banking monies/currency is for borrowing and spending. For true savings, you need the real wealth of gold -- IN HAND."""

Call Centennial and get your order in the pipeline.

R.

Belgian (12/28/01; 16:08:14MT - usagold.com msg#: 67414)
Miner and CM
I do enjoy our exchange of ideas on geopolitics and the indirect consequences on currencies / resources >>> Gold.
Thanks.
What is very significant (parts not on the media) in the 35 minutes OBL video, is the following :
Emphasis on trying to hit the US *economically* ! This agenda (call) hidden under an islamist religious fanatism.
It is of course all M.E. - crude oil, related. I'm afraid that Al Qaeda is more than a terror organization limited to pure religious hatred and warfare. Islamism is only used as the moving flame for these masses of activists. OBL has economic insights and targets.

With the attack on the Indian parliament, he wants to mount the tension between two nuclear forces (India + Pakistan)
The US is manoeuvered into a difficult position here.
Is India allowed to retaliate against Pakistan (the US way) because of Pakistan terror ? You certainly get the point I want to make without elaborating on other supposedly Al Qaeda agenda points to destabilize and divide.

Reading between the lines and carefull observation when Bush reacted officially on Argentina...made me instantly
conclude that it was/is an IMF set up (classical trap).
The way Bush argued about managing Argentina's economical policies...made me also conclude that he surely agrees on that little economic faction of its own, Gold management, as well. It is the absolute hiding of Gold that is the best evidence for its heavy political role, for the happy (? hum) in the knows.

There is a central Asia map with oil/gas pipelines, to be found in the files of the Councl on Foreign Relations.
It explains (visualizes) what is at stake and why all this is evolving.

A big part of the world is walking on eggs and each one is trying to use the US might at is own fulcrum. I do agree strongly, with you, on this Miner49er. Saudi Arabia / Russia and China are all 3 involved in this and are all 3 giving some evidence of their interest in Gold (next to oil) that is specifically related to their currency vis � vis the dollar.

In our 28 TV stations on European cable, a lot of attention is given to the majority of moderate islamists. Without signs of fundamentalism or fanatism, the word *dollar* is often mentionned. Oil (POO) is never mentioned !!
Islam is starting some introspection. OBL (or his successor) might turn the focus on the economic aspect more and more. That's why the Russians (Putin) is brought on stage for bringing some equilibrum with the oil/gas reserves of the Caspian region (old silk route-eurasia).
This is important for the evolution of *
cheap* oil as a non dollar challenger (valuator). Indirectly Gold connected of course. The probability of an accident has increased and the Gold-Clock gets another friend together with the 1 trillion $ of added fiat in 2001.
(140.000 tonnes of Refined Gold = 1 Trillion $)

Against this perspective, the huge Japanese problem is imvho somewhat less relevant in relation to Gold. Japanese are not stampeding to acquire significant amounts of Gold, or it would be noticed and made public.

Cavan Man (12/28/01; 15:42:36MT - usagold.com msg#: 67413)
miner49er
Thank you for helping me think a little more clearly.

USAGOLD.COM:::::::::: Still the best!

site steward (12/28/01; 15:26:47MT - usagold.com msg#: 67412)
Jensen Update: India, Pakistan conflict troublesome for America
http://www.usagold.com/gildedopinion/Jensen/20011227.html
Excerpt:
------Once again, India and Pakistan are edging toward a war... "We do not want war, but war is being thrust on us and we will have to face it," Indian Prime Minister Atal Behari Vajpayee told the youth wing of his Bharatiya Janata Party on Christmas Day. "Your armed forces are fully prepared and capable of defeating all challenges," Pakistani President Pervez Musharraf told his nation the same day.
...
Under pressure from Washington, the two tried to make peace in 1999, with Vajpayee paying a rare visit to the Pakistani city of Lahore. But negotiations collapsed when India accused Pakistani troops of invading the Kargil region of Kashmir, leading to three months of heavy fighting and airstrikes by both sides. CIA Director George Tenet told Congress they nearly came to nuclear blows.------

Click URL above to access the full report and also the index to other reports by International Editor Holger Jensen.

(side note to miner49er: "Thanks for the 'Thanks'!")

R.

miner49er (12/28/01; 14:34:56MT - usagold.com msg#: 67411)
site steward @ Argentina
Sir site steward -

(I know I've weighed in a lot lately, so I'll step aside after this...)

Thanks for the on-line, virtually real-time object lessons you keep chronicling for us.

Truly in these exceptional times, all should take note of real-life scenarios taking place right before our eyes, and with communication broadcast so universally, and instantly, we can observe this literally taking place right before our eyes; yet at the same time, not (yet) happening to us.

Remarkable, is it not?

All: (Lurkers especially...)

Some people feel that they should put off getting gold because they figure they can only buy a couple ounces, and that that won't be enough anyway, and the shipping alone adds significantly to the purchase on a per coin basis, and (depending on where you buy), the taxes are too high, and so on...

Even if you are a small purchaser, a couple ounces of gold here, and there, over time adds up significantly. But each day you wait, there is less time to begin accumulating.

Additional charges of delivery, and taxes...? Well if you buy from CPM (within the U.S. anyway -- don't know about you international folks, or you Colorado people), you pay no sales tax. And as for flat rate shipping on a small order adding a lot of overhead, well so it might raise the cost of a Helvetia from, say $62 to $69 on an ounce purchase... Really, $69 for a Helvetia is still, in the big picture, outstanding...

As FOA has said, buy as much gold as your understanding will allow... If you are convinced at all of physically held gold to be part of your portfolio, then you do understand at least to some extent... Therefore, take the steps and give these guys a call.

I have no interest in CPM, and am no agent of theirs, I simply know they are reliable and great to do business with...

Happy New Year all...

Centennial Precious Metals, Inc. / USAGOLD (12/28/01; 14:30:43MT - usagold.com msg#: 67410)
Hard assets... Easy access!
http://www.usagold.com/ProductsPage.html

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

site steward (12/28/01; 14:10:40MT - usagold.com msg#: 67409)
More real-life monetary lessons from Argentina -- instructive excerpts
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&T=markets_bfgcgi_content99.ht&middle=ad_frame2_all&s=APCzJxRXcQXJnZW50
First, we see how easily rules may be changed to allow for contracts calling for "good money" to be settled with "inferior money" instead.

----------Buenos Aires, Dec. 28 (Bloomberg) -- Argentina eased bank restrictions ... The easing of restrictions will temporarily allow Argentines to pay dollar debts, such as mortgages, credit card payments and loans, with pesos, after the government froze access to U.S. dollars early this month as it hard currency reserves plunged.---------

Next, we see how the paper holdings can lose value faster than the account holder can maneuver out of it.

---------Argentina's government ... is trying to prevent a run on deposits..... ``You are defenseless,'' said Juan Prieto, 51, after waiting for about 40 minutes in midday sun to get some cash out of a Citibank automatic teller. ``Prices are already going up, and the currency we'll get is going to devalue. Bottom line is your buying power is going to be slashed by half.''
+
Interim President Adolfo Rodriguez Saa, who announced Sunday the country would default on $132 billion of government debt and introduce a new currency, has maintained a partial freeze on deposits enacted by the previous government in order to protect the banking system after Argentines pulled $1.3 billion of deposits from the system in a single day.----------------

Next, we see the vulnerability in some traditional investment areas outside of bank accounts.

---------Argentine stocks plunged on the first day of trading after a five-session break on concern the government may announce more changes in the currency over the weekend.----------

The more you consider the fullness of the circumstances, the more you realize that gold is the natural choice for savings. Buy it in quantity today while legacy market-effects (meaning, the post-Bretton Woods workout) are still delivering it cheaply to all who are tuned-in enough to act.

R.

Waverider (12/28/01; 13:43:56MT - usagold.com msg#: 67408)
Did Greenspan Overdue High-Tech Optimism?
http://www.msnbc.com/news/678762.asp
WASHINGTON, Dec. 28 � "Five years ago, Alan Greenspan began pushing a reluctant Federal Reserve to embrace his New Economy vision of rapid productivity growth and rising living standards. Today, Fed policy makers are debating whether they went too far. The answer could help determine whether the current recession marks a temporary aberration in an era of swift growth, or whether the rapid growth of the late 1990s itself was the aberration..."

miner49er (12/28/01; 13:03:12MT - usagold.com msg#: 67407)
Cavan Man @ 67406: The "bluff" -- an elaboration
Hi Cavan Man... I, too, enjoy reading your words...

Regarding the "bluff," let me spend a moment being more specific. The perspective I am building this from is more as follows:

The world knows that the U.S. has the power to economically engineer catastrophe. This, in this loving world of power politics, is an "option" in the U.S. arsenal that it can utilize, if for no other reason than as a threat. And given whatever impression the world may have of the U.S.: fallen angel, dying giant, whatever; it is still of immense power, resources and resiliency, and its "threats" must be taken very seriously.

That they would ever implement this... who knows? But knowing that they could or would even try, would you dare call them on it? Perhaps someone might. But the additional consideration causes the opposition extra work and worry, and may even cause them to not deploy what might otherwise have been feasible policy decisions.

Limiting the options available to your opposition (at least as they perceive them), while broadening your own range of options (again at least to their perception), strengthens you and weakens them.

I state the either/or of that part in the post very specifically in terms of "if [they] go down..." In other words, if, indeed, events transpire that lead irreversibly to the commencement of an economic and financial catastrophe, the U.S. is proactively intimating that they will not go down gracefully.

Thus if the U.S. were going to go down, and experience themselves the hopelessness you mention, and would be facing this because some action(s) were being deliberately taken to cause it, then why not let the world believe that they would also have to suffer this hopelessness and misery as well? So now, you have the choice: play the game as we write the rules, and suffer the status quo, or take your chances, and potentially suffer global economic chaos.

This is war, and these are weapons. I know you know this, but I just wanted to clarify what I meant by elaborating on the framework surrounding this, and the objectives hopefully obtained. Maybe we could call it e-MAD (economically Mutually Assured Destruction)...

Best to you and yours, this coming year, Sir Cavan Man...

miner

Cavan Man (12/28/01; 12:00:41MT - usagold.com msg#: 67406)
miner49er
It is a privilege to read your fine thoughts. Thank you.

Take the whole planet down? I'd call that bluff because the option is hopelessness. Humankind typically lashes out in that scenario.

sourdough (12/28/01; 11:46:35MT - usagold.com msg#: 67405)
THE COMMONWEALTH / THE QUEEN / 50 YEAR JUBILEE
http://www.col.org/comover.htm
1.7 BILLION PEOPLE
As I mentioned before, how many commemorative silver 1 ounce coins would be needed to satisfy demand?
Suppose the oracle saw this coming?

miner49er (12/28/01; 11:13:48MT - usagold.com msg#: 67404)
uponroof @ 67380 ...Japan, Argentina, Turkey...
Hey Sir uponroof, thx for your response yesterday... only quickly here (though if I have time this weekend, I have some more thoughts about Japan, the euro, etc.)...

Ref: posts by Henri and Belgian today mentioning hardball tactics by US via IMF against countries (specifically Argentina in this case) that dare consider the euro... as opposed to those that don't (e.g., Turkey).

In the case of Turkey, in my opinion, it is geopolitically valid to conceive of Turkey in the euro camp. They have pro-euro sentiment all around them, even among their enemies (even if the pro-euro sentiment is, cynically, more anti-dollar sentiment that just finds its outlet there). Also, the U.S. needs Turkey for its NATO military bases; indeed the NATO Infrastructure Fund contributions to Turkey are 15 times what Turkey has itself put in, and Turkey is second only after Germany in amount of funds received.

Likewise, the U.S. and Europe both use Turkey's "pro-western," "secular" state structure as a buffer zone to allay its apprehensions of any extreme Islamic resurgence threatening their frontiers. Probably these reasons, as much as any pro-dollar boot-licking on Turkey's part, contributed to the swift and determined rescue that took place there. While Turkey also needs the U.S. presence to balance against Iraq, Turkey is really, because of their geographical position, in the driver's seat here. The U.S. won't leave militarily (bound by NATO treaty), and cannot let Turkey fall apart, whether the Turks go euro, or not.

That the U.S. deliberately let Argentina out to dry because of their pro-euro posture, is of course, only speculation, since it is not official U.S. or IMF policy. On the surface I tend to find it plausible, however -- especially in Argentina's case, as the default is not only causing the reflexive "run to the dollar," but additionally hurting the Euro and CHF, both which had apparently some notable Argentinian exposure. It is also, sadly, how the world works.

The notion does however occasion additional reflection upon why Japan is fated to the U.S. dollar, and dares not consider going with the euro... (I know you also qualified that you realistically did not think they would, but the consideration highlights the seriousness of the U.S. game plan.) As such I don't think Japan could even conceive of a euro break as currently in their suite of options.

The U.S. means business, and it plays very ruthless hardball. In my opinion, at this juncture, they are giving all their opposition two choices:

1) play along by our rules, or...
2) if we go down, we WILL take the whole planet with us.

Do you want to call their bluff...?

Have a good weekend good sir, and a most prosperous New Year.

miner49er

Mr Gresham (12/28/01; 11:10:25MT - usagold.com msg#: 67403)
(No Subject)
Waverider, uponroof: I've never visited Japan, so my impressions are pretty third-hand -- the savingest people on earth, and they all hold these multi-hundred thousand dollar (equivalent) accounts per household -- in Yen! The currency their gov admits to torpedoing whenever it is in the "national interest". Do the Japanese people do _everything_ together, and with such a sense of self-sacrifice? Would they ever diversify outside the Yen, and all together at once, if they did? Their CB must feel above it all, holding $400 billion of UST paper, but they're just riding a different tiger.

Henri, Belgian -- good perspectives on the currency wars -- Argentina is IMF-punished for dallying with Euro-thoughts. On another level, though, USD must worry when ANY currency troubles ANYWHERE get into the news. People lined up at banks is not good press for this Fractionally Reserved world order, is it? The Dollar may be the last man standing, but he'd probably like all the others for company for awhile longer...

China watches, as you say. It makes me think: all of the man-hours of study that have gone into military strategy and tactics, evolving into a well-known set of guidelines and precedents known to millions. But economic and currency warfare -- we are mere babes. Only a few hundred get to see the bangs and splashes. Should I be reading Sun Tzu?

Now, off to read Michael's words; happy New Year to you, too!

Siochain (12/28/01; 09:29:21MT - usagold.com msg#: 67402)
(No Subject)
Well Market seems to think everything is rosy....housing booming as people feel that's a safe investment (the next bubble IMO)....yet continuing unemplyment claims is up again totaling now 3.7 million not able to find work...highest since 1982.

One of my favorite newsletters morning comments are in line with my views, though not those of the majority in USA.

"So, as we wrap up this week, we need to ask "why is the market so damned strong?" Why is it able to shake off all this negative news? Ah, that is a long long story. If you have been reading NewsPicks for the last year, you know pretty well what we perceive to be going on. A coordinated push between the Government and Wall Street to keep the market from collapsing.

I know, that sounds like so much "spy novel trash" but trust me it isn't. The FED didn't cut rates 11 times in 11 months, inject over a Trillion dollars of cash in the system, and abolish sales of the 30 year bond so they could be "nice guys". No, they did all this in a desperate attempt to light a fire under an economy that is buckling in debt.

Each day for the past 4 months we have watched the FED pay anywhere from 2 to 5 billion dollars for bank treasuries. This is what the FED does to increase the amount of actual cash in the system, they buy Government notes from key banks, and then the banks are supposed to loan out the money.

Well, they are, but there is a problem. Corporations aren't interested in borrowing more money, most of them are swamped in debt now. No, that money is going to mortgages, and in some ways, straight to the stock market. The Government knows that after the tower attacks, the layoffs, the plunge in Corporate profits, and the decaying global situation, that if the stock market didn't remain strong, people would panic. They are not letting the market fall.

If that sounds wild to you, Good. You need a shock. If all you do is listen to the idiot analysts from wall street, you would think that having stocks trading at historically record high P/E's is "normal during an earnings trough". Excuse me? An earnings trough? According to the ECRI, Corporate profits fell 70% year over year. That isn't a trough, that is a crash folks.

Our views are often thought of as somewhat extreme. Until they come true! We often chuckle at some of the letters we got back in June of 2000 when we first suggested that the US economy would be in a recession by December or January of 2001. people thought we were nuts then too. Analysts on TV were telling people that the FED was going to have to raise rates to slow down the "growth" we were going to see."

Cavan Man (12/28/01; 09:24:37MT - usagold.com msg#: 67401)
Belgian
Turkey, like the UK must contend with geography.

Belgian (12/28/01; 08:54:13MT - usagold.com msg#: 67400)
Double standards and hypocrisy ?
The IMF was/is much more flexible and accomodatif towards Turkey, as long as Turkey stays away from the dispicable euro ! Latest rumor on Turkey not wanting to participate in EMU hasbeen launched. On the contrary, Argentina dared to produce some euro-talk...and must therefore suffer a harsh IMF-stance as a consequence. Capichi ? With us or against us ?

Super hedgers and co-operators of POG-manipul. AU + ABX are scratching each others back (cfr. GATA's latest message).
Both underground-holders are OPEC-ly blind and don't want to see how a fragmented (OPEC + non OPEC) oil-industry is able to set prices. Why are we waisting our time with these anti-gold promoters ? The Russian example on oil and (!!) PGMs is another eye-opener for us, but seemingly not for the undergrounders (AU/ABX).

Increased volatility of POG/POS/POO and US$ is not all related to yearend illiquidity. Certainly in the case of POO who is challenging the dollar-worth.
China is watching how the geopolitico dominos are evolving in eurasia. They will need large amouints of oil for their expansion into the next decade. I wonder how much Gold they have already accumulated off the records. It is strange that on days that POG has a run in the East or in N.Y., the POG takes a dive in europ trading. Is this a shifting of WA excess Gold (400 tonnes/year) to China ????

South African rand for the past 10 years averaged a 12% interest rate and declined against the dollar at an average of 12% per year. Great management of that curency with another 100 years of Gold under their piece of the globe's crust. The Russian looters even manage to do much better deals.

Gold, Crude Oil and the euro are still adding pressure to the burdened King dollar. Some popular stockmarket indices (Dow-SP-500) have even managed to turn positive and keep the "denial" alive and kicking. The dollar-index is fighting its SHS-top-pattern. Another nail is needed for the coffin (crushing unemployment)(lower income for savers/boom-consumers). Who is hiding this nails while the already existing nails of fiat production are knocked deeper and deeper into the coffin's wood ?

Happy Newyear to all !

USAGOLD (12/28/01; 08:46:53MT - usagold.com msg#: 67399)
Daily Market Report: Argentinos or "Argentinos"??
http://www.usagold.com/Order_Form.html
I've updated my comments at both the Daily Market Report and Commentary & Review sections. Today I write about the situation in Argentina. The report in full is at Daily Market Report link -- top of page. I would have posted it here but the photos add to the message.

Those wishing daily access for a trial period to our Commentary & Review section can be admitted by registering at the link above. The report at the Daily Market Report page will give newcomers a taste of the kind of gold analysis usually reserved for our current and prospective clientele at the Commentary & Review page.

Henri (12/28/01; 07:39:31MT - usagold.com msg#: 67398)
CoBra(too) msg 67362
I can't help but feel that the IMF stopped negotiating Argentine debt when the Argentines made law a provision to jump ship to the Euro on failure of the US$ to hold �value?

Ironic is it not? The Argentine business community had no confidence in its own peso (no doubt due to shenanigans by international bankers) so it pegged the peso to the US$ to bring stability. As a reward, the International bankers suddenly bestow fiat upon under terms that must have seemed reasonable at the time.

In international markets with an appreciating $/peso base exports must necessarily become more expensive to the non-US consumers. Perhaps the peg provides mixed blessings upon those who seek to just live happily in Argentina.

When these same bankers manipulated the $US higher, it stifled the trade that must have been anticipated as the ultimate source of $US for interest and principle repayments. Argentines cannot just print dollars like the FED...they must earn them. Now the bankers have created the conditions which propelled Argentine obligations beyond their ability to repay.

Default on payments to the bankers? BRAVO! Does this take a major set of cojones? To keep the common folk solvent they create a new non-exchangeable fiat?

Why not just dissolve the ties that bind them in the first place and de-value the US$ against the Argentine Peso. After all aren't they the ones who give it value in the first instance?

We will now repay our US$ obligations at the rate of one Argentine Peso for every $10 US dollars owed. "Take it or leave it and all our obligations are considered satisfied." Believe it now that you have received a bargain. The dollar is debt ridden and dying and Argentina is young brave and strong and no ones fool. The world will recognize the weakness of the US$ in time so we are but the first of many. We burn your dollars to keep warm at night. Viva Argentina! Declare your place in the world! (Now, that would impress me!...Now we're talking cojones!)

I wonder the new Argentino will buy gold in Argentina? Gold is convertable. Gold rush on in Argentina?

uponroof (12/28/01; 06:39:33MT - usagold.com msg#: 67397)
waverider ..... how do you spell 'buy gold' in Japanese?
Friday, December 28, 2001
Gold Selling Briskly Ahead Of Limited Guarantee On Deposits

TOKYO (Nikkei)--Sales of gold ingots have soared in recent months, particularly since the beginning of December, as individuals try to diversify their investments ahead of the government's halt on full guarantees for deposits at bankrupt financial institutions in April 2002.

Gold ingot sales in December have tripled on the year at Tanaka Kikinzoku KK, the largest domestic dealer of the precious metal, while Mitsubishi Materials Corp. (5711) posted a 100% jump and Sumitomo Metal Mining Co. (5713) saw a 200% increase.

According to the World Gold Council, an international body handling gold data, net domestic gold sales, gross sales minus buybacks, totaled 13-14 tons through Dec. 27, a 200% jump from last December.

The council predicts brisk sales will continue for the next several months, posting the fastest growth rate in a decade, eclipsing the robust expansion seen immediately after the Great Hanshin Earthquake and the financial crisis at "jusen" mortgage lenders in 1995.

Analysts say another factor behind recent strong gold sales is that investors appear to be funneling part of their contract cancellation money for money market funds, which had included bonds of the bankrupt U.S. energy giant Enron, into gold purchases.

"An increasing number of investors are buying gold ingots in large lots, such as 10-20kg (1kg = about 1.3 million yen)," said an official at Tanaka Kikinzoko.

(The Nihon Keizai Shimbun Friday morning edition)
***********
waverider- Thanks for your updates on the Japanese situation. It is something to carefully watch for sure.

The bank bailout parade is just beginning with Ishikawa Bank leading the charge. Frankly, I don't know why it took so long to start. Knowing the BOJ has limited it's bailout program to a fraction of the actual default amount on banking industry books, one would think the reporting mentality of the banks would be 'sooner better than later' (in order to get a piece of the welfare before it's gone). Perhaps someone could clarify the deadline for reporting non performing loans for what they are. For some readson I thought it was the end of calender 2001. Now I'm thinking it's April of 2002 as a coinciding date of gummint halting full guarantees on loans. ?

Black Blade (12/28/01; 05:20:10MT - usagold.com msg#: 67396)
Lease Rates
http://www.kitco.com/market/LFrate.html

It looks as if Silver and Platinum lease rates cratered this morning if the Kitco quotes are correct. Maybe a source of metal has been found to keep the metal shorting game alive. "Interesting"

- Black Blade

Black Blade (12/28/01; 05:14:24MT - usagold.com msg#: 67395)
Russia's platinum group quotas stall
http://www.bday.co.za/bday/content/direct/1,3523,994967-6078-0,00.html

Snippit:

Last-minute lobbying in the Russian government by state bodies and exporters is threatening the adoption of export quotas for platinum group metals. A senior Russian official said that some state bodies thought there were reasons for delaying the quotas and that no platinum group metal exports should be made at the start of the new year.

Black Blade: Here we go again. The real problem for PGMs is that supply comes from current by-product production of nickel at Norilsk. As nickel prices are depressed, there is little incentive to produce nickel and therefore PGM production is likely to be lagging demand. There have been very few deliveries of Pt and Pd out of Russia over the last several months and that will likely continue for the foreseeable future. PGM prices have risen sharply in response. I would expect to see more TOCOM and NYMEX Pt and Pd contract defaults like we have seen over the last couple of years (all for the same reasons mentioned here). We will continue to hear more stories of "political" reasons such as quotas and legislation. The real story appears to be the same old story of a depleted Russian stockpile and lower production (and I didn't even touch on Russian organized crime which includes several prominent Russian politicians).

Black Blade (12/28/01; 04:50:39MT - usagold.com msg#: 67394)
Supply report sends natural gas price reeling
http://www.chron.com/cs/CDA/story.hts/business/1189550

Snippit:

NEW YORK -- Natural gas prices suffered their biggest decline in almost a year Thursday after a report signaled that inventories of the nation's most commonly used heating fuel are more than sufficient to meet demand this winter. Natural gas for January delivery fell 35.6 cents, or 12 percent, to $2.555 per thousand cubic feet on the New York Mercantile Exchange. It was the biggest one-day decline for a most-active contract since Feb. 5.

U.S. gas supplies fell last week to 2.98 trillion cubic feet, leaving them 54 percent above year-ago levels, the American Gas Association said. Although below-normal temperatures next week in the U.S. Midwest and Northeast will boost heating demand for gas, there would still be ample supplies left in storage, traders said. "Even if an ice age sets in tomorrow, you're still going to end up with a lot of gas in storage at the end of March," said Kyle Cooper, an energy analyst at Salomon Smith Barney in Houston.

Black Blade: Even though American Gas Association data is notoriously unreliable, there is no doubt that warmer winter weather has allowed supplies to build. This also bodes well for the 300+ new natural gas fired power generating facilities due to come online by 2003. If the necessary infrastructure can be built in time, the next energy crisis may be mitigated to a small degree and help toward a US economic recovery with abundant "cheap energy."

Black Blade (12/28/01; 04:24:24MT - usagold.com msg#: 67393)
Cablevision cuts 600 jobs, sets $55 mln charge
http://dailynews.yahoo.com/h/nm/20011227/en/media-cablevision_1.html

Snippit:

NEW YORK, Dec 27 (Reuters) - Cable television operator and sports team owner Cablevision Systems Corp. said Thursday it would cut 600 jobs, or 4 percent of its staff, and take a restructuring charge of $55 million in the fourth quarter.

Black Blade: More "Bones" flung upon the growing "Bone Pile." Look for many more layoffs after the holidays. Be prepared as you would for an extended period of unemployment. Get out of debt, get Gold and Silver portfolio insurance, get nonperishable food and basic necessities, and have enough cash for a few month expenses. We live in "Interesting Times."

Black Blade (12/28/01; 04:17:56MT - usagold.com msg#: 67392)
Japan's Unemployment Rate Soars
http://biz.yahoo.com/apf/011228/japan_unemployment_1.html

Japan's Unemployment Rate Reaches New Record High of 5.5 Pct in November

Snippit:

TOKYO (AP) -- Japan's unemployment rate hit a record high for a third straight month in November, reaching 5.5 percent as the nation continued to shed jobs in one-time mainstay sectors including manufacturing and construction, the government said Friday. Unable to wrest itself out of a 10-year downturn, Japan has slipped into its third recession in a decade.

Black Blade: It doesn't look to get much better in the foreseeable future. The Japanese "Bone Pile" should grow higher as this global recession will likely continue to grow for some time even as the yen sinks into oblivion against the US dollar and the BOJ bails out failing bank after failing bank. In a word - "GRIM"

Black Blade (12/28/01; 04:05:38MT - usagold.com msg#: 67391)
OPEC Set to Seal Pact on Oil Export Curbs
http://biz.yahoo.com/rb/011228/business_energy_opec_dc_1.html

Snippit:

CAIRO (Reuters) - OPEC oil producers on Friday prepared the finishing touches for a pact with independent exporters that will cut world crude supplies by nearly two million barrels daily, three percent, from January. OPEC Secretary-General Ali Rodriguez said ministers were set to announce a cut in cartel output of 1.5 million barrels a day after winning pledges from five non-OPEC nations to shave 462,500 bpd.

Black Blade: It looks like a done deal. The question is how much quota cheating will occur. A higher POO will act as a cap on economic recovery and any recovery will increase demand. The higher POO hits the corporate bottom line quite hard too. Many so-called "analysts" have gloated over how the former Soviet Union will take much of the power of oil supply away from the Arab members of OPEC. Now really, is the Russian snake any better than the Arab snake? Not to denigrate any one by calling them snakes, the point that I am making is that the west is held hostage to the whims of foreign suppliers of energy (no matter where the are). Without energy independence, the US and western nations must dance to the tune played by those who hold the real power (oil). Energy is the lifeblood of the west, our economies depend on it.

Black Blade (12/28/01; 03:49:01MT - usagold.com msg#: 67390)
Lord of The Rings

I saw the "Lord of The Rings" last night with my nephews and neices. Not bad. It was quite good though there is no ending as the next segment comes out in two years and the final segment in a year or two after that. Harmony Gold has the rights to market a 22K ring cast from Harmony's gold production. The ring will be similar to the one in the film with the same inscription. Now if only the Gold industry will follow up with an aggressive marketing campaign for Gold as jewelry, investment, insurance, and diversification. This would seem to be an opportune time as the recession begins to deepen and investors concerns grow over safe haven investments. Still, the movie was quite entertaining.

- Black Blade

Mr Gresham (12/28/01; 01:58:15MT - usagold.com msg#: 67389)
Waverider
Yes, but a necessarily lonely one -- I seem to appreciate my family the most when I'm away from them -- and Bill Bonner did help by opening the larger window. Very very cold -- I kept the pipes from freezing, and now the customary rains have resumed...

Waverider (12/28/01; 00:30:38MT - usagold.com msg#: 67388)
Asia Currencies Join Yen's Fall
http://www.iht.com/articles/43165.html
Snippit:
"The yen fell Thursday to its lowest level against the dollar since October 1998, carrying other Asian currencies downward. Separately, new data suggested a crisis in the Japanese industrial sector. The Japanese government welcomed the decline, which brought the fall in the yen against the U.S. currency this month to more than 6 percent. In 4 p.m. trading, the dollar was at �131.67, up from �130.77 late Wednesday. "Given the worsening economy," said Minoru Shioiri, a foreign-exchange manager at Kokusai Securities in Tokyo, "there is nothing to support the yen."

Waverider: Mr Gresham - do you happen to know how to say "Buy Gold" in Japanese? BTW - your Ghost of Christmas Future was a good read. Trust that you had a good Christmas Sir.

Mr Gresham (12/28/01; 00:00:25MT - usagold.com msg#: 67387)
Quiet
It's so dagnabbed quiet around here -- 18 posts today -- I'll take that as my contrary indicator something's about to pop somewhere...

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