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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 9/28/2004
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Liberty Head (9/28/04; 21:57:17MT - usagold.com msg#: 124818)
Re: China Wanting Out Of The Dollar - Chris Powell

Everyone wants out of the dollar but the U.S. gov't.
The "Terrorists on the Potomac" won't have it though. One of the main reasons we took out Saddam is because he started selling oil for euros instead of dollars. Also, our cruel and failed trade sanctions were about to expire and a floodgate of new oil related investment in post-sanctioned Iraq was about to open.
Under Saddam those lucrative contracts would mainly go to China and Russia, most certainly, anywhere but the U.S. and Israel, any currency but the dollar.

China is watching us get our arrogant butts kicked in Iraq. I doubt we will be able to hold mid-east oil to the dollar for much longer. You think the POO is high now.

China is hungry for growth. Billions of Chinese people want a better lifestyle. I read today that Tiffany & Co is opening a store in China; yesterday it was Formula 1 racing in Shanghai.
We just don't have enough ordinance to back up all the lies our power brokers have told. In any case, the last man standing will undoubtedly be Chinese.

By the way, have you noticed that the Chinese Panda gold coins have a higher demand?
Hmmm, I wonder.

Best Wishes

misetich (9/28/04; 19:38:54MT - usagold.com msg#: 124817)
Crisis looms due to weak dollar
http://english.peopledaily.com.cn/200409/28/eng20040928_158593.html
Misetich

Thanks Chris for the news article

Snip from the "opinion" article

"Given the deteriorating relations between the United States and the Arab world, quite a few Middle Eastern oil-exporting countries have begun to increase the proportion of the euro used in international settlement. Reportedly Russia is also going to follow suit. "

End of Snip

Is The 2004 Oil Shock And Awe a manifestation of deteriorating relations between the US and the Arab world?

Non-believers - stand back and watch the upcoming spectacle as oil prices rocket upward

All Aboard The Gold Bull Express - Part ll

makcumka (9/28/04; 19:26:41MT - usagold.com msg#: 124816)
$$$$418.0$$$$
ESSAY - "The Course Is Set"

1. If elected, George Bush would be good for gold because, with increased military spending and continuing tax breaks, gold is going up.

2. If elected, John Kerry would be good for gold because, with increased taxation and increased entitlement programs, gold is going up.

3. With respect to gold, the election doesn't matter because it is game, set, and match for the economic course of the country, regardless of the future partisan economic policies.

Chris Powell (9/28/04; 18:50:06MT - usagold.com msg#: 124815)
China contemplates getting out of the dollar
http://groups.yahoo.com/group/gata/message/2404
Latest GATA dispatch includes an important
essay from China Daily.

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

TownCrier (9/28/04; 18:15:19MT - usagold.com msg#: 124814)
Gold savings reminder, covered previously
European "freegold" architecture and Chinese gold market liberalizations for citizens' savings get frequent mention here, but lest we forget, it is a wide world, and indeed pro-gold ("anti-ReserveDollar") movements are taking firmer shape elsewhere, too.

To cite Russia as one significant example:

Since 1992 the Bank of Russia (and from 1965 to 1991 the State Bank of the USSR) has produced gold coinage. For distribution to Russian credit institutions at "real" valuations rather than face values, since 1996 Russian citizens were allowed to acquire for investment purposes the 10-rouble chervonets gold coins of 1975-1982 mintage. Some of our longer-term visitors may remember USAGOLD made a special offer of these coins during the summer of 2001.

According to the bank of Russia --

"Gold Chervonets ... have the status and technical parameters of those which are not a subject to the VAT according to the Article 149 of the second part of the Tax Code of the Russian Federation. These regulations, as well as relatively low cost value (i.e., low premium) make it possible for their circulating at prices close to the value of the precious metals content.... Thus the conditions are being created for gold coins to be circulated in the Russian Federation as original instrument for the investment of free funds of citizens and organizations."

To be sure, from the Bank of Russia's lips to your ears:

"Thus the conditions are being created for gold coins to be circulated in the Russian Federation as original instrument...

...for the investment of free funds of citizens and organizations."

"...for the investment of free funds of citizens and organizations."

"...for the investment of free funds of citizens and organizations."

"...for the investment of free funds of citizens and organizations."

"...for the investment of free funds of citizens and organizations."

That is the sound of gold savings. Officially endored with no VAT.

R.

misetich (9/28/04; 17:11:47MT - usagold.com msg#: 124813)
2Q2004 Flow of Funds -- Foreign Data - Sep. 27, 2004
http://www.gillespieresearch.com/cgi-bin/s/article/id=306
Snip:

* As of 6/30/04, foreign investors held a total of $8.803 trillion of US financial assets, up about $159 billion from revised holdings of $8.644 trillion as of 3/31. From 6/30/03, the increase was approximately $994 billion. (See Table 1 at the end of this section.)

* As of 6/30, foreign liabilities totaled $4.250 trillion, resulting in a net foreign claim against the US of more than $4.553 trillion. (See Table 1.)

* The dollar's exchange-rate value put in a major bottom in the spring of 1995, commencing a steep rise into early 2002. Note in Table 1 how the expansion in the growth of foreign holdings of US financial assets paralleled the dollar's rise.

* As Table 1 indicates, the United States, for the first time since World War II years, became a net debtor during 1985.

* Table 2 segregates the classes of capital-market assets that are readily salable by foreigners, or where a significant slowing in the rate of accumulation could adversely influence domestic prices. As of 6/30, these totaled $5.957 trillion, or a very healthy 67.6% of total US financial assets held by foreigners. This illustrates the sizable exposure US markets would have to any substantial net reduction in these holdings.

* As of 6/30, foreign investors held the following respective percentages of total outstandings of Treasuries, agencies, US corporate bonds and US equities: 43.1%, 11.6%, 25.2% and 12.3%. Combined holdings of Treasuries and agencies were 24.3% of total outstandings.

By comparison, going back to 12/31/94, not long before the dollar put in the major bottom mentioned above, foreigners held the following respective percentages of total outstandings of Treasuries, agencies, US corporate bonds and US equities: 18.3%, 5.7%, 13.4% and 7.0%. At that time, the combined holdings of Treasuries and agencies were 13.4% of total outstandings.

* As of 6/30, the 15 largest foreign holders of US Treasury debt had total holdings of $1.523 trillion, an increase of more than $95 billion or 6.7% from 3/31. (See Table 3.)
***********
Misetich

Anyone care to "project ahead" for the next 10 years ? Don't forget to ADD the baby boomers retirement factor !

All Aboard The Gold Bull Express - Part ll

USAGOLD Daily Market Report (9/28/04; 15:43:01MT - usagold.com msg#: 124812)
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.

---Closing market excerpts---

Gold gains, crude soars, dollar weakens

Comex Dec gold futures rose in New York Tuesday, lifted by record crude oil prices and a weaker dollar against the euro...

Dec gold settled $3.50 higher at $414.20, near its session high of $414.90.

Gold prices rose from the open as Nymex Nov crude oil futures topped the $50-a-barrel level, prompting worries that rising prices could exert inflationary pressures on the economy. Gold is often sought as a hedge against inflation in times of rising prices.

"I think that ... the combination of the weak dollar and higher oil prices are definitely supporting bullion, without doubt. The combination is pretty powerful, really," said Jim Steel, director of futures research at Refco in New York. Dec gold tested Monday's high at $412 at the outset and gains were forged from there all the way up to a five-week high of $414.90.

Bullish comments from GoldCorp Inc. Chairman and Chief Executive Robert McEwen may have lent gold late support, sources said.

McEwen, speaking at the Denver Gold Forum, an invitation-only industry conference, reportedly said that gold prices could hit $850 an ounce in the next few years as the widening U.S. budget deficit and inflated real estate market continue to erode the value of the dollar and make gold more attractive to investors.

---(see url for access to full news, 24-hr newswire)----

Buongiorno! (9/28/04; 15:22:42MT - usagold.com msg#: 124811)
$$$$$423.0$$$$

The technical picture is strong, a breakout at 416 should carry to about 423......ah-hope, ah-hope, ah-hope! Ciao!
Buongiorno!

USAGOLD / Centennial Precious Metals, Inc. (9/28/04; 14:29:17MT - usagold.com msg#: 124810)
SECOND EDITION: Newly Updated -- Written for Today's Market!
http://www.abcs-of-gold-investing.com/

Shanti (9/28/04; 14:11:42MT - usagold.com msg#: 124809)
$$$$418.4$$$$$

- From several sides [economic] pressure (energy) is steady building to a moment of release soon.
Than the since mankind used GOLD will be again glorious

- With respect to gold, the election doesn't matter because, the [economic] systems are so over manipulated that the point of no return has passed times ago, ofcourse powerplay discisions after the elections could have impact.

Sal-OM All !!
Shanti

Gandalf the White (9/28/04; 14:05:16MT - usagold.com msg#: 124808)
TA TA TAAAAAAAAAAAAAAAAAAAAAAA -- POG Contest UPDATE !

Entries as of TUESDAY 9/28/04 at just about 14:00 Denver time !!!

Listed in order of decreasing values !
----

$$$$ $440.0 $$$$ Caradoc (9/27/04; 21:49:35MT - usagold.com msg#: 124777)

$$$$ $437.5 $$$$ Cometose (9/23/04; 18:43:50MT - usagold.com msg#: 124657

$$$$ $427.4 $$$$ J-Bullion (9/23/04; 12:26:38MT - usagold.com msg#: 124639)

$$$$ $424.6 $$$$ jenika (9/27/04; 20:00:09MT - usagold.com msg#: 124773)

$$$$ $420.0 $$$$ Sundeck (9/22/04; 22:29:51MT - usagold.com msg#: 124616)

$$$$ $419.1 $$$$ Rimh (9/27/04; 11:37:55MT - usagold.com msg#: 124753)

$$$$ $418.7 $$$$ ha_tey_o (9/27/04; 18:16:40MT - usagold.com msg#: 124772)

$$$$ $418.5 $$$$ Waverider (9/23/04; 18:23:58MT - usagold.com msg#: 124656)

$$$$ $416.3 $$$$ Gandalf the White (9/26/04; 22:13:23MT - usagold.com msg#: 124734)
$$$$ $416.2 $$$$ Noble1 (9/26/04; 18:22:49MT - usagold.com msg#: 124731)

$$$$ $416.0 $$$$ mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)

$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)

$$$$ $414.5 $$$$ balzac (9/27/04; 23:04:06MT - usagold.com msg#: 124780)

$$$$ $413.0 $$$$ Lothar of the Hill People (09/28/04; 12:46:08MT - usagold.com msg#: 124805)

$$$$ $412.5 $$$$ Camel (9/27/04; 08:39:27MT - usagold.com msg#: 124750)

$$$$ $412.1 $$$$ yellowmetal (9/26/04; 13:38:26MT - usagold.com msg#:

$$$$ $411.7 $$$$ Remarx (9/27/04; 15:49:48MT - usagold.com msg#: 124762)

$$$$ $411.4 $$$$ pilgrims_gold (9/24/04; 19:51:33MT - usagold.com msg#: 124687)

$$$$ $410.1 $$$$ Zhisheng (9/23/04; 10:23:56MT - usagold.com msg#: 124632)

$$$$ $409.5 $$$$ YGM (9/24/04; 14:41:52MT - usagold.com msg#: 124682)

$$$$ $407.7 $$$$ Liberty Head (9/26/04; 02:39:58MT - usagold.com msg#: 124713)

$$$$ $404.9 $$$$ slingshot (9/25/04; 08:46:49MT - usagold.com msg#: 124700)

$$$$ $404.4 $$$$ nugget101 (9/28/04; 10:46:08MT - usagold.com msg#: 124801)

$$$$ $402.9 $$$$ TBatler (9/23/04; 13:49:55MT - usagold.com msg#: 124641)

$$$$ $399.3 $$$$ Federal_Reserves (9/23/04; 13:19:47MT - usagold.com msg#: 124640)

$$$$ $398.6 $$$$ Smeagol (9/23/04; 17:30:08MT - usagold.com msg#: 124651)

$$$$ $378.0 $$$$ Topaz (9/23/04; 01:40:13MT - usagold.com msg#: 124621)
===
<;-)

Gandalf the White (9/28/04; 14:02:51MT - usagold.com msg#: 124807)
The "KING OF THE HILL" report ! <;-)
GC4Z Dec '04 COMEX Contract HIGH $414.9 low $410.0
SETTLEMENT $414.2 Change +$3.5

Todays "KING of the HILL" is:
Sir Balzac !!!
---
TWO + days to go before Entry Deadline !
<;-)

USAGOLD / Centennial Precious Metals, Inc. (9/28/04; 13:12:35MT - usagold.com msg#: 124806)
Time is ticking down on this special offer
http://www.usagold.com/gold/special/Markkaa.html

Finland gold September Buyers' Group

Finland Grand Duchy 20 Markkaa Gold Coins
Offered here for the first time in our 30-yr history!
Speaking of history -- Lapps, Finns, Swedes, and Russians have all had a hand at ruling the region, but these choice uncirculated coins are a powerfully enduring legacy that's now yours to command. Order yours today!
1-800-869-5115 Ext. 110

Lothar of the Hill People (09/28/04; 12:46:08MT - usagold.com msg#: 124805)
$$$ 413.0 $$$
Lothar goes with the flow--slow, steady upward movement over the short term.

Great Albino Bat (9/28/04; 11:35:36MT - usagold.com msg#: 124804)
About MONEY - what else?!

Have you noticed how money is supposed to do so many things?

The world has had coin-clippers and governments that have reduced the precious metal content of coins, almost since the invention of money. (A fascinating read is "Uses and Abuses of Gresham's Law in the History of Money", by Robert Mundell).

But the the inflationists and counterfeiters really got into stride only in the 20th Century.

It is just about completely forgotten in today's world, that money can only do what it was invented to do: facilitate trade; and because it facilitates trade, it can also serve as a medium for savings, and serve as a unit of account.

Say goodbye to sound money, when you see that monetary policy must "maintain stability of prices". Money is an instrument designed for a specific purpose, and cannot be used for other purposes and still retain integrity, just as you can't tighten a screw with a hammer, or drive a nail with a screwdriver.

When money must be tinkered with, because "unemployment threatens" - then, goodbye to integrity in money. Is "economic growth languishing"? - You know what that means.

By the way: Have you noticed the news about "debt relief"? Aren't these people charming, so concerned about the poor, less-developed countries. Alas, it is surely about getting some big lender off the hook.

Side note: what a dismal life, to be an EU bureaucrat! Such a boring waste of time in sterile meetings. They must compensate in some way, so I guess that is why they are all so fat and sleek - what meals, what wines! All on official business, of course. We shall refrain from mentioning other areas of pleasure avaiable at high-quality grade, at the expense of the taxpayers - the poor suckers!

Humanity will never learn, of course. Humans are humans! So make sure you have a goodly stash of gold (and silver, too) which is what humans have always relied on.

The GAB

Caradoc (9/28/04; 11:10:20MT - usagold.com msg#: 124803)
For OvS
OvS: As part of my price guessing entry several hours ago, I've already posted my personal assessment that the DOW is headed down, along with real estate and the US dollar. The reason for quoting Buz on the DOW was twofold:
1. On its face, his assessment of the DOW is confirmation that a guy with no gold ax to grind is also looking askance at the DOW.
2. More importantly, I wanted his exact words since the part about the DOW as indicative of what's going on in corporate America contains a semi-hidden message that the US dollar -- the currency of corporate America -- is headed in the same direction. This is why I suggested reading the quoted text for implications regarding the price of gold as defined in terms of those same dollars.

Having quoted the man, I could hardly fail to give the URL I quoted from. Jim Sinclair repeatedly makes the same point about the currency of a nation state amounting to ownership: i.e., behaving like stock in a corporation, with the upshot that "USA, Inc." looks like a lousy buy. I'm paraphrasing here, so no URL to the source.

For what it's worth, I would join you in putting an instant label of "garbage" on anything making a claim of "no risk" even in the realm of gold, but "low" is another matter.

Caradoc

968 (9/28/04; 10:47:21MT - usagold.com msg#: 124802)
The Saudi Arabian Oil Miracle
http://www.simmonsco-intl.com/files/CSIS.pdf
Presentation on Saudi-Arabian Oil. The author asks for more transparancy and better accurater information from OPEC and IAE.

nugget101 (9/28/04; 10:46:08MT - usagold.com msg#: 124801)
$$$$ 404.40 $$$$
Basically, I see gold moving sideways. I believe it will stay in a band between 400 and 410.

Belgian (9/28/04; 10:31:40MT - usagold.com msg#: 124800)
@ Knallgold @ mas
The question about who is trading GOLD with who, becomes less important now. Would rather like to know WHY one is selling and WHY the other is buying. And WHAT is the exact nature of the Gold Transaction...Physical Gold transfer...a Gold exchange...a Gold commitment...loan, lease...etc !
And above all : WHY, all these increasing Gold-Moves !?
Are Gold-reserves prefered above dollar-reserves !? Is this a trend or a temporary folly !?

The many different oil-owners-suppliers are getting organized and are acting in lockstep with their pricing(power)policies. Some Arab oilstates keep on stating that they can't do anything about these high/higher oilprices.
Hey,...is there something with the "petro-dollar"'s purchasing power !? The Saudi oil CB keeps on repeating that it will pump more, whilst the US reserves are at a 25 year low.
25% of Nigerian oil (2.5 mbpd) goes to the US ! Is oil targetting the dollar or the US !?
In the mean time, the Dow enjoys the given support as never before.

There is a provocative oil-crisis in the make ! Shouldn't surprise us. We are well documented on the possible outcomes of this provocative crisis that wants to induce other crisisses.

OvS (9/28/04; 10:08:05MT - usagold.com msg#: 124799)
Promoting Stock Trading
Caradoc: No need to give Buz Sch.
a promo on this site. Anyone's promo
that states "low risk trading" belongs
in the garbage bag. If you want to make
a point about his descending tops in the
Dow, just do that. Why give a link? OvS

Caradoc (9/28/04; 09:45:48MT - usagold.com msg#: 124798)
DOW implications
http://www.investors-club.com/
The most savvy trader I know of isn't a goldbug or even close to being one. True, he holds 5% of his portfolio in gold and has done so for decades, but he makes his living in the world of paper, moving deftly in and out of various markets (up or down) and standing off to one side when appropriate.

With that as introduction, check out the three charts linked above and think about the implications for POG in the accompanying text quoted below.

****text follows****

Most investors no longer follow the DOW considering it to be too small a sample (30 stocks) to really show what the markets are doing. They are correct in what the DOW isn't but they forget the importance of what the DOW is.... a cross section of the major corporations that make up Corporate America. It is not only axiomatic but it is also very accurate to say that "As the DOW goes, so goes Corporate America" which is why the chart above is so important.

Look at the DOW Price Chart (lower chart) and notice that it has made four decreasing tops since the beginning of 2004 and for the third time falling below major support at 10,000. This time it may be for real without the subsequent bounce and if it has a problem of regaining the 10,000 level the next support is a thousand points lower at 9000. The actions of the DOW is confirming our opinion that the economy is much weaker than most market analysts want to admit. Remember, what can't move higher will move lower.

***end of text***

Note that the link is to the top tier of his website and -- as a free sample of his work -- gets changed fairly regularly. If you check a couple of days from now, it may be about something totally different: oil or sugar or the prospects for puts against the QQQ.

Caradoc

mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)
$$$$$$416.00$$$$$$
$$$$$$416.00$$$$$$$
I've guessed this price because I feel like there will be a slow and steady climb in the price of gold - as we have already seen. It is humorious to see the same hand wringing and comments that we saw as the POG was climbing over the $300 mark. I suppose it will be the same as we climb over $$00 and $500 and then the great fever in the masses should take hold - and then, to ta moom Alice.

Rimh (9/28/04; 09:30:22MT - usagold.com msg#: 124796)
Toolie's truck analogy
Hilarious analogy, Toolie! Had a good hearty laugh from that one! I loved "spontaneously disassembles" - what a picture.

Remarx (9/28/04; 09:18:20MT - usagold.com msg#: 124795)
The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences. By Peter Gowan
http://www.gre.ac.uk/~fa03/iwgvt/files/9-gowan.rtf
The article in the link above comprises 99 pages of good, dense reading.

Here is a snip from the intro:

This essay is yet another attempt to catch this cat called globalization, or rather to catch one of its main organs: its central nervous system. We will argue that this lies in the way in which international monetary and financial relations have been redesigned and managed over the last quarter of a century. This new monetary and financial regime has been one of the central motors of the interlocking mechanisms of the whole dynamic known as globalization. And it has been not in the least a spontaneous outcome of organic economic or technological processes, but a deeply political result of political choices made by successive governments of one state: the United States. In this sense we are closer to the Morgan Stanley view of globalization as a state-policy dependent phenomenon than to the notion of globalization as a deep structure favoured by Anglo-American media pundits. To indicate its location in international reality we call it a �regime�, although, as we will explain, it is not a regime in quasi-juridical sense in which that word has been used in American international relations literature.

Knallgold (9/28/04; 08:24:05MT - usagold.com msg#: 124794)
Argentina buys more Gold
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6351310
Question:who was the seller?

"LONDON -- Argentina's central bank bought more
gold in July and August, taking its gold reserves up
to 1.77 million troy ounces by the end of August, or
55.1 tonnes, according to data on the bank's
Internet site.

The bank confirmed in August that it had bought 42
tonnes of gold in the first half of 2004 to diversify
its reserves after the end of the peso's one-to-one
peg against the dollar in early 2002.

The bank's website showed that gold reserves were
at 1.72 million ounces (53.5 tonnes) in July and 1.37
million ounces (42.6 tonnes) in June. "

Knallgold (9/28/04; 08:17:08MT - usagold.com msg#: 124793)
test
Test.Forum time seems out of whack-or is it me?

968 (9/28/04; 08:16:02MT - usagold.com msg#: 124792)
@ Towncrier / Sitemaster
Is it normal that all posts of today appear on the same page as yesterday ?

968 (9/28/04; 08:11:36MT - usagold.com msg#: 124791)
Some thoughts on the SGP.
http://www.stefancollignon.de/PDF/Stability%20and%20Growth%20Pact.pdf
SNIP :
- "Together with the serious policy divergences over the Iraq war and the failure of agreeing a European constitution, the SGP is the third major issue in less than one year that undermines the political credibility of European integration. I believe that this fact is not just to be blamed on incompetent or unwilling politicians; rather it is intrinsic to the issue of fiscal policy coordination in an incomplete federation. It is a
constitutional issue."
- "No European Pact, however economically sound or desirable, will ever have the legitimacy of nationally elected governments when prescribing policies of taxation and spending. Can any democrat seriously think that a government that promises to cut taxes and increase deficits, and gets elected, like in France in 2002, could turn around and say to its voters: "Sorry, you wanted us to implement our policies, but the
Commission and other member states or even the European court of justice do not
allow us to do so"?"
- "The logic of collective action is such, that a group of 13 or
more member states will not be able to provide the optimal fiscal policy stance by
voluntary coordination of their fiscal budget policies."
- It has been argued that given the "no bail-out clause" in the Maastricht Treaty, excessive government debt would
increase the default risk and could destabilize the banking system and weaken the euro. This has not been the case. Except for the countries which have broken the excessive deficit rule, i.e. Portugal, Germany and France, the debt/GDP ratio has fallen or remained stable in all member states since 1999. The highest increase has been Portugal (from 54.3 to 59.5 percent) and France (from 58.5 to 62.3 percent). In Germany, the debt/GDP ratio fell from 61.2 percent in 1999 to 59.5 in 2001 and then increased again to 62.7 percent. On the other side, it has fallen in Italy from 115 percent to 106 percent in 2003. These developments have had little effect on financial markets. The default risk premium for government debt remains negligible in all
countries. And the Euro exchange rate seems to evolve in total independence of fiscal policy: if the euro ever weakened due to fiscal policy, it was in 1999 after the
Commission reprimanded Ireland for its economic policy choices under the Broad Economic Policy Guidelines, but not under the SGP. Moreover, since Germany and France first broke the 3-percent limit, the euro has strengthened by more than 30 percent. Hence, so far it does not seem that the occurrence of "excessive deficits" has had the negative consequences that many economists anticipated. Euroland's financial system remains stable."
- "Given the same currency, all fiscal policy decisions have
potentially effects on prices, interest and exchange rates, i.e. on public goods that
concern all citizens in the monetary area. However, the ability of citizens to control
these effects are only indirect through national governments. National jurisdictionsare by definition only small parts of the monetary union. Quite naturally governments optimize policies in order to get re-elected in their national constituency, while the definition of a European fiscal stance requires optimising policies over the whole constituency of Euroland. That would require a centralized fiscal function, a European government. This is in accordance with the theory of fiscal federalism that has
established a long time ago that the strongest case for fiscal centralization is with respect to stabilization policies."
------------------------------------------------------------------------------------------------------------------------
Article by Stefan Collignon on the SGP.

Clink! (9/28/04; 07:19:28MT - usagold.com msg#: 124790)
To da moon !!!
http://news.bbc.co.uk/1/low/sci/tech/3693020.stm
Well, on a morning when the metals appear to be nicely frisky, it seems appropriate to show one way of getting, well, if not quite to the moon, at least into orbit !

Actually, this is quite an interesting coming together of two of the greatest living Western entrepreneurs - Allen and Branson - in an enterprise which not only impresses by its achievement but also by its frugality. I seem to remember a figure of "only" $20M to get to where they are now. How much would NASA have required, I wonder ?

C!

mas (9/28/04; 06:05:27MT - usagold.com msg#: 124789)
So what will the euro do now?
From the BBC, snip it.
Quote,
Opec 'powerless'

The cost of London-traded UK Brent crude was $46.56 at 1040 GMT, though it had touched $46.93 as trading opened in Europe. Meanwhile, the cost of US light, sweet crude fell back slightly to $50.20.
Unquote.

So is it the price going up or is it the dollar going down?
60 next? And then?

Let's start paying in Euro's?

misetich (9/28/04; 06:01:27MT - usagold.com msg#: 124788)
Hurricanes Hurt Bottom Line of Insurers
http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d85chrqo0&date=20040928
Snip:

HARTFORD, Conn. (AP) � Insurers are expected to take a $15 billion to $20 billion hit from the four hurricanes that have hit Florida in the last month and their third-quarter profits will show it, dropping an estimated 40 to 60 percent, experts say
....................
"There's still some storms out there," Worters said.
***************
Misetich

The hurricane economical and human sufferings damages are adding, ANOTHER dinamic to the oncoming perfect financial storm.

Insurers will be 1) disposing of equity assets 2) increasing premiums

Florida's economy will also suffer from the aftermath and the effects on the US economy are being downplayed

Is hurricane "Fannie" next? or is it "Freddie" ? or ??

All Aboard The Gold Bull Express - Part ll

misetich (9/28/04; 05:45:23MT - usagold.com msg#: 124787)
Reading Fannie Mae's Scary Cookbook
http://www.nytimes.com/2004/09/26/business/yourmoney/26watch.html
To add to Sundeck's post below - ANOTHER article from NY Times GRETCHEN MORGENSON

Snip:

Fannie Mae's regulator did not quantify how much of the company's hedges were accounted for improperly. But it did note that as of December 2003, the company recorded $12.2 billion in deferred losses relating to cash-flow hedges. If Fannie Mae has to record some or all of this against its retained earnings, which were $24.5 billion at the end of last year, its regulatory capital will suffer, the report noted dryly.

Which leads to another revelation that Fannie Mae's fans must now face: that the company is grossly undercapitalized. Its equity capital of roughly 2 percent is much lower than the 8 percent required of "A"-rated banks, according to Sean Egan of the Egan-Jones Ratings Company. "In the past Fannie has made the argument that it was very familiar with the mortgage market and therefore needs less equity," Mr. Egan said. "Our view is the lack of diversification argues for a greater level of equity."
...............
Also troubling is the fact that Fannie Mae's problems have implications for the entire mortgage market
..............
The software, the memo said, allowed a user "to manipulate factors to produce an array of recognition streams," which "strengthens the earnings management that is necessary when dealing with a volatile book of business."

This nugget means that Fannie Mae is probably not alone in playing fast and loose with financial reality.
***************
Misetich

GSE's an accident ready to happen - and when it does foreigners will not be pleased

All Aboard The Gold Bull Express - Part ll

Sundeck (9/28/04; 04:27:27MT - usagold.com msg#: 124786)
Silver listless...
Silver stallion and golden hounds are looking a little listless tonight...maybe just the full Moon...dancing in her silver shoon...

;-)

Sundeck (9/28/04; 04:23:18MT - usagold.com msg#: 124785)
Fannie Mae and the story that won't go way...
http://www.nytimes.com/2004/09/28/business/28fannie.html?th=&adxnnl=1&adxnnlx=1096365725-Q/xfGR9ZHwrUsKqZ0F4fZA
Snips:

"...
Fannie Mae, the nation's largest mortgage buyer and a financial juggernaut ..., agreed yesterday to major changes in its accounting and management practices in an unusual deal reached after a week of negotiations with the company's federal regulator.

... accounting irregularities and earnings manipulation that helped enrich the company's senior executives and presented an apparently false portrait of Fannie Mae's financial well-being to the public.

... might be only the first of many changes at Fannie Mae.

Congress is also planning its own hearings on Fannie Mae.

...the ramifications could be significant, not only for the company itself, but for the entire mortgage market, ...

... questions currently swirling around Fannie Mae, ...

... a requirement that it add more than $5 billion in fresh funds to its capital reserve within the next nine months, ...

...the company may have to make enormous restatements as it revises previously issued financial results.

Fannie Mae, ... also agreed to recalculate the value of complex financial products it has used to hedge its overall exposure to interest rate risks since 2001 and to revise how it has accounted for some expenses.

A bevy of Wall Street firms, including J. P. Morgan Chase, helped structure and trade some of the disputed hedging products and are likely to come under S.E.C. scrutiny. J. P. Morgan declined to comment yesterday.

..."

Sundeck: What IS going on at sweet Fannie Mae? There's that name again: J P Morgan - the derivative king. This story has been in the world and local press constantly for a week or more now. Is it fair to assume that what we are hearing is a mild version of reality???

:-(

Belgian (9/28/04; 03:19:51MT - usagold.com msg#: 124784)
@ 968
An answer to your questions...in one word : "politics" !
Political profilations can go on ex absurdum up until "economic realities" are forcing politicians, to do what should have been done, already long ago.

Economic realities are like patatos wich get hotter and hotter. The last one to hold the burning patato has to extinguish the fire. Consider the ECB and its euro, as the last standing man.

The recent 10 Balkan states who joined the EU was also viewed as utopia and not desireable. Happened anyway.
Turkey is of course another matter. 75 million people is almost as much as the unified Germany. France (and Germany)has to balance the public opinion, because of the many Le Pen factors. Pure politics, 986 !

Introducing changes is a very difficult excersize in political balancing in an EU where we have so many parties.
This in sharp contrast with the AA democraties, where the power is (and remains) enormously hyperconcentrated.

The rapid EU-EMU expansion must be presented to the population in an "digestable" format in order to go ahead (with EMU-the euro) with as little headwind as possible.

Fractional reserves : When one's Gold-Reserve is FREELY priced...the reserve-basis remains a constant, through appropiate Valuation and permanent Re-Valuation according to the altering circumstances. This in total contrast with "fixed" or "contained" goldprices. VALUE must always remain expressed as Value...and by preference with an associated numeraire. The dollar unhooked from this opportunity, more than 70 years ago. That made WWII possible (cfr. F. Lips).

Through the accumulation of Gold, the general public can express its aversion for the politicians' decisions (policy). Form of a universal arbiter. The Gold faction(s) within Euroland wish to introduce this form of "convenient" self disciplining arbitrage as a reference(back up) for taking hardline decisions that are not wellcomed by the spoiled collectivity. 70% of european laws are already pure EU laws. The local political clowns find this very convenient as to throw all hot patatoes to the upper echelon of the EU, where you have concentration of power. That's why FreeGold in an united EU, is very likely to achieve...wich would never had a chance if Euroland had stayed divided.

And up until now, we see no indication at all that the dollar intends to associate again with GOLD under whatever form. The dollar has condemned itself to remain Gold's antipode. That's WHY the dollar has to keep fighting the threathening Gold-euro. But unfortunately, the dollar increasingly meets the masses of sincere and loyal Gold-Friends. Euroland provides the concept for the Gold Friends.There is nothing the dollar can do against such a golden assembl�. And if one cannot beat his adversary...one better joins him. What a duel...en garde 986 !

968 (9/28/04; 01:11:30MT - usagold.com msg#: 124783)
@ Belgian
Goodmorning Belgian (nog niet nat geworden vandaag),

- In my question in post #124749 I meant to ask wether you think that the end of the $-reserve system, will mean the end/limiting of the fractional reserve banking system ? The fact that the Eurobanks had to increase their reserves in the Basel II accords was perhaps the inside knowledge that their were some serious problems on the other side of the ocean ?
- Like you say in your post #124752 the ECB demands complete autonomy, but will politics give it this autonomy over the years ? The French already say that ECB's only goal can't be price stability, but also has to be stimulating economy. More and more European economies are coming into stagnation, or recession. The more this happens, the more local European goverments are going to ask for a new (second)objective for the ECB, and the more the ECB will loose its autonomy.
- Why is French Finance Secretary Sarkozy (in contrast to President Chirac) making it difficult for Turkey to enter the Eurozone ?

Gandalf the White (9/28/04; 00:10:49MT - usagold.com msg#: 124782)
TA TA TAAAAAAAAAAAAAAAAAAAAAAA -- Contests UPDATE !
http://www.usagold.com/cpmforum/tools/guideandsignup.html

The POG Contest

Entries as of TUESDAY 9/28/04 at just about 00:01 Denver time !!!

Listed in order of decreasing values !
----
$$$$ $440.0 $$$$ Caradoc (9/27/04; 21:49:35MT - usagold.com msg#: 124777)

$$$$ $437.5 $$$$ Cometose (9/23/04; 18:43:50MT - usagold.com msg#: 124657

$$$$ $427.4 $$$$ J-Bullion (9/23/04; 12:26:38MT - usagold.com msg#: 124639)

$$$$ $424.6 $$$$ jenika (9/27/04; 20:00:09MT - usagold.com msg#: 124773)

$$$$ $420.0 $$$$ Sundeck (9/22/04; 22:29:51MT - usagold.com msg#: 124616)

$$$$ $419.1 $$$$ Rimh (9/27/04; 11:37:55MT - usagold.com msg#: 124753)

$$$$ $418.7 $$$$ ha_tey_o (9/27/04; 18:16:40MT - usagold.com msg#: 124772)

$$$$ $418.5 $$$$ Waverider (9/23/04; 18:23:58MT - usagold.com msg#: 124656)

$$$$ $416.3 $$$$ Gandalf the White (9/26/04; 22:13:23MT - usagold.com msg#: 124734)
$$$$ $416.2 $$$$ Noble1 (9/26/04; 18:22:49MT - usagold.com msg#: 124731)

$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)

$$$$ $414.5 $$$$ balzac (9/27/04; 23:04:06MT - usagold.com msg#: 124780)

$$$$ $412.5 $$$$ Camel (9/27/04; 08:39:27MT - usagold.com msg#: 124750)

$$$$ $412.1 $$$$ yellowmetal (9/26/04; 13:38:26MT - usagold.com msg#:

$$$$ $411.7 $$$$ Remarx (9/27/04; 15:49:48MT - usagold.com msg#: 124762)

$$$$ $411.4 $$$$ pilgrims_gold (9/24/04; 19:51:33MT - usagold.com msg#: 124687)

$$$$ $410.1 $$$$ Zhisheng (9/23/04; 10:23:56MT - usagold.com msg#: 124632)

$$$$ $409.5 $$$$ YGM (9/24/04; 14:41:52MT - usagold.com msg#: 124682)

$$$$ $407.7 $$$$ Liberty Head (9/26/04; 02:39:58MT - usagold.com msg#: 124713)

$$$$ $404.9 $$$$ slingshot (9/25/04; 08:46:49MT - usagold.com msg#: 124700)

$$$$ $402.9 $$$$ TBatler (9/23/04; 13:49:55MT - usagold.com msg#: 124641)

$$$$ $399.3 $$$$ Federal_Reserves (9/23/04; 13:19:47MT - usagold.com msg#: 124640)

$$$$ $398.6 $$$$ Smeagol (9/23/04; 17:30:08MT - usagold.com msg#: 124651)

$$$$ $378.0 $$$$ Topaz (9/23/04; 01:40:13MT - usagold.com msg#: 124621)
===
<;-)
=======================
USAGOLD / Centennial Precious Metals, Inc. has issued a "CALL to CONTEST" ---

TWO separate Contests ---- An Essay writing Contest, and a POG Guessing Contest !!

TWO separate groups of Winning Prizes to be awarded to the WINNERS !!!

===
The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 2, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 3rd !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to
each of the two runners-up.
===

$$$$$$$$$$$$$$ ALSO A PRICE GUESSING CONTEST!!$$$$$$$$$$$$

In addition we will have a price guessing contest on the closing price of gold for the December Comex contract
(GC4Z) on Monday, October 4, 2004, ---BUT all entries must be posted to the TableRound before Midnight on Thursday, September 30th.

The POG Contest winner -- who will have the closest price guess to the actual closing price -- will receive an
one-tenth ounce GOLDEN Canadian Maple Leaf. There will be also be two runners-up prizes for the next closest prognostications --- each winning an one (1) one ounce Canadian Silver Maple Leaf.

====
THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) Decembr 2004 Gold Contract (GC4Z) on the date of Monday, October 4, 2004.

2) IF you can see this, YOU need more YELLOW ! <;-)

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $404.4)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$$404.4 $$$$$$$ )

5) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on Thursday, September 30, 2004.

7) AND MOST IMPORTANTLY as this part MUST accompany the Price prognostication --- In order for your entry to be valid, it must contain a few words on "Why you choose that number !" <===== NOTE !!!
---
LET the CONTESTS continue !
<;-)
====

(Yesterday's Discussion.)

Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.

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