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

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ARCHIVED DISCUSSION FROM 12/28/2005
All times are U.S. Mountain Time

(Yesterday's Discussion.)

PRITCHO (12/28/05; 21:15:51MT - usagold.com msg#: 139808)
Re Gold /Silver Across the Border - - - -- -
It bothers me a bit as to why anyone would feel they had to declare their holdings--- as if you didn't think you owned it & it was NO one elses business? Why would you let someone TAX you again?

Surely it would not take much thought to find a place in the Motor Vehicle where precious could be stored with relative confidence?Unless one had a very guilty concience
surely no need to break into a sweat at the border:)

Plenty of excuses come to mind IF something went wrong -like it was "hidden" because of the fear of thievery & was put in a safe place. NO you didn't think of declaing it cause it was all paid for & whats to evade?

Anyway I'm buggered if I would tell ANYONE!

Rad (12/28/05; 20:06:19MT - usagold.com msg#: 139807)
thx Galearis and Caradoc
Thx for the Canada info. I am in Wisconsin thinking about spending time in the great white north.
If the gold crosses the border as denominated coins do they tax them? Got lots of old U.S. silver.
I like silver almost as much as gold and appreciate info on both.

Galearis (12/28/05; 19:48:40MT - usagold.com msg#: 139806)
Email from rhody
http://www.nymex.com/media/delivery.pdf
Just got this from my brother. I agree with the conclusions:

Deliveries today included about 1.2 Moz of silver and another 4000 oz of gold to bring the grand total for December to about 39 Moz and 2.11 Moz of gold. There are only two business days to complete deliveries for December, although the first business day of the next month can also be used. If these last few days see a flurry of deliveries, it signals tightness in supply. We may be seeing this in silver.

*******
Comments:
We are also seeing market participation alongside these events.

Regards,

G.

Galearis (12/28/05; 19:41:29MT - usagold.com msg#: 139805)
@ Rich, YGM, Flaccus
Hi Rich,

At the risk of stirring up a flac attack (smile) with my answer, I have probably heard the same rumours about the (whisper) (((silver))) ETF as you have. (((grin)))) But I agree almost entirely with Ted Butler about it; either way Barclay's Bank breaks on this is good for silver AND gold. I do hope that everyone has noted how closely ,,,,dare I say it: lock-stepped,,,the two metals have been dancing together in price? Ah, such singular grace, that brings tears to the eye – and neither one, it seems, wants to lead and both are dancing to the same monetary beat. (smile)

The real news is about India (and Russia) now selling silver. Apparently (as close as one can estimate), India had around 65 Moz of the white metal in their central vault vaults a couple of years ago – and like gold reserves of other cbs, they just couldn't wait to "sell" it at all time lows. It now SEEMS to have "lost" 10 Moz of the stuff since that last count. I say this as they announced in the spring that they only had 55 Moz available for sale (lease). This implies that both India and China have been the culprits behind the price suppression tactics for the past couple of years. Why would India, a confirmed metalbug culture, sell out such a prized asset – without even the necessity of some national emergency – at all time lows? Well, how about a collapsing USD for a reason? The USD is ALSO held in the same central bank as a reserve asset in considerably higher value proportions (at present values, of course). So India AND China have an interest in propping up the USD; it keeps their own internal economies chugging along – and the sale of the silver serves to "buy" time for their economies. That would seem to be emergency enough – and the smaller sacrifice to pay for it is the silver.

India has one of the few remaining stockpiles of silver left. Now is that a measure of worth, or a measure of disdain?

Isn't it interesting! Some, even on this forum – with a gold only preference – may choose to say that a central bank "dishoards" something like silver because it is now only an industrial commodity,,,while the same bank in dishoarding its gold is doing so for price suppression for monetary stability. Meanwhile the guy on the street surely thinks that both are anachronisms!

And I can say already that I should have bought rhodium in preference to silver AND gold!

Again I should mention that this India information comes to us courtesy of GFMS and therefore it is a FWIW thingy. (And something that was missed by every other body doing this sort of study.)

Now the only reason I brought this white metal talk to the forum's attention is for three reasons: You asked, Rich,,,, and I usually like to answer direct questions if I can. 2) there are other eyes on the forum that may find this information and speculation of interest (and others who should), and 3) my earlier post was about gold, not silver. Silver was not even mentioned and THEREFORE I feel that I owe the forum a wee discussion on silver over the unearned chastisement I received in error. And I am glad to do so!

But really, folks, what is good for gold is good for silver and visa-versa. I do not mean any disrespect to friend Flaccus, as I am sure he will see my words and accept them with grace and humility – and since he has already vented earlier. ;>)

Awareness is everything, and nobody can foresee the monetary details of what will likely be a chaotic future ahead. What I am reasonably sure about is that all real assets will appreciate in some hierarchy of worth, and none of us here knows as much as we think we do. Not even me. (smile)

Best regards,

G.


Sundeck (12/28/05; 19:00:48MT - usagold.com msg#: 139804)
Smartest men in the slammer...
http://afr.com/articles/2005/12/29/1135732665914.html
Ooops...looks like a few more of the boys from the crooked-E are transitioning from being the "smartest men in the room" to becoming the smartest men in the slammer...

According to this article at Forbes,

http://www.forbes.com/2005/12/28/causey-enron-pleads-cx_gl_1228autofacescan04.html

"Causey is charged with fraud, conspiracy, insider trading, lying to auditors and money laundering."

(Looks like the prosecutors don't like him all that much.) However, Richard Causey rises to the occasion and takes the easy way out....in exchange for dobbing on his mates...a time-honoured tradition.

Good on ya mate...everyone loves a dobber!

(Oh no...I'm starting to feel like a cackling hag at the base of the guillotine...you don't have guillotines in America, do you?)

But really, I'm nice...I really am!

Hee hee hee hee

;-(



Ned (12/28/05; 17:50:41MT - usagold.com msg#: 139803)
This one gets the UGLY award of the day.....
http://www.globalresearch.ca/index.php?context=viewArticle&code=CHO20051221&articleId=1576
Gotta wonder if this IRAN double-edged sword (nucs and oil bourse) is helping drive gold. Should be a sensitive issue going into March 2006, only 3 short months away.

Gold is very nervous of March 2006 IMVHO

David Linkley (12/28/05; 17:03:29MT - usagold.com msg#: 139802)
A new year beckons
It's funny to watch the mini dollar recoveries everyday as the paperhangers are trying to hang on and are soon to reach the end of their rope. I suspect Goldman Sachs will be the last short standing in the Comex gold pits when gold rockets to prices unknown. Big changes are afoot in 06' and unless Helicopter Ben fires up the printing presses the stock market looks very toppy to me.

Hang on friends, I believe the next 12-24 months will be among the toughest economically in a long time and very good for gold. Past bad economic decisions will engulf us and give rise to our testing as a nation once again. Ignor Bush, Wall Street and the media, prepare yourselves now!

USAGOLD Daily Market Report (12/28/05; 16:30:55MT - usagold.com msg#: 139801)
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.

WEDNESDAY Market Excerpts

December 28 (from Reuters) -- Gold futures in New York rallied to a two-week high on Wednesday, powered by fund and investor buying due to upbeat technical and fundamental signals for the metal heading into 2006, traders and analysts said.

COMEX February gold contracts rose $6.20, or 1.2 percent, to close at $516.30.

Some analysts said that a rare move in U.S. Treasuries this week also drew investors into the yellow metal amid doubts about the future health of the U.S. economy. Benchmark 10-year U.S. Treasury yields fell below two-year yields for the first time in five years this week.

"The inverted yield curve, which sent the stock market reeling yesterday, made gold one of the few safe havens," said George Gero, a vice president at RBC Capital Markets Global Futures in New York.

"People said 'Where do I put money now?'" and that is why gold rose on the move in yields, he said.

For the year futures are up 20 percent as investors diversify into the metal from currencies, stocks and bonds amid worries about rising energy costs and other uncertainties.

Added to that, gold supply is seen staying reasonably tight.

---(see url for full news, 24-hr newswire, market quotes)---

Sundeck (12/28/05; 15:20:05MT - usagold.com msg#: 139800)
Gold to Silver Ratio, Yield Curves and other things...
http://stockcharts.com/charts/YieldCurve.html
Rich and Clink! #139783

Rich,

Agree that the "movie ratio" is probably as reliable as any. ;-)

Your comment:

"So, if my math is correct, silver's "real" but never seen monetary value is 18% of the POG."

may be generally correct for the Western World, but I think there was a period in China (for a few hundred years post-Potosi) where silver was traded for gold as low as 5:1. This spawned the very large carry trade which saw large tonnages of silver enter China in exchange for gold (and other commodities). (Perhaps that very large "stockpile" accumulated in China is still unwinding...) Maybe, one day, the Chinese will make a movie about it... Ooops! But that may change the future price of silver and the gold:silver price ratio. ;-)


Yield curve Inversion.

The link (posted here several times before) shows a dynamic representation of the yield curve. The current "inversion" is more of a "flattening" than an inversion...it is not showing up (as yet) nearly as distinctly as the inversion in 2000. In any case, the yield curve provides no "hard prelude" to what is going to occur down track in the economy. It is not as "predictively certain", say, as watching the cogs go around in a large machine, or a heap of coal on the conveyor-belt heading for the chute...


M3 publication suppression

What does M3 contain? According to my Bonham "Investment and Finance Dictionary". It includes M2, large time-deposits, repurchase agreements, Eurodollars, and money-market funds held by institutions.

Now Eurodollars are those dollars that live their lives abroad, primarily in European banks, and mainly used for settling international payments (including oil, presumeably). Knowing that, then a shift away from the use of the dollar to settle trade (on the Iranian oil bourse, for example) would surely have an effect on the overseas reserve of Eurodollars and therefore upon M3. It may be that this is one reason the FED does not wish to show the third finger on its monetary hand.

M3 also records repurchase agreements, a tool that is likely to become very important if (Ref TC's post #139792)the FED has to cease raising interest rates, for the good of the economy, but then has trouble attracting money from abroad to ballance trade and fiscal deficits. The FED's response to this situation may also show-up glaringly in M3...a situation that it also may wish to obscure. Thoughts?


Hope everyone had a pleasant Christmas and are looking forward to a Golden New Year...

:-)







makcumka (12/28/05; 15:07:20MT - usagold.com msg#: 139799)
@ YGM
Sir YGM, there is a perfectly reasonable explanation to Flaccus' message. If we are to believe that sir Rich and others are shameful silver bulls just trying to talk up silver in hopes of making a quick buck, then the logical conclusion will be.... (drum roll, please)

Flaccus = the massive silver short seller we have all benn looking for, talking silver down in hopes it will go down far enough, all the way back to $4.50, to cover the open positions.

Makes sense, no? Especially after a spectacular day's rie like today in both gold and silver.

I wouldn't speculate with stock in Flaccus & Co., if I am correct.

YGM (12/28/05; 15:02:35MT - usagold.com msg#: 139798)
JSE Market
http://www.businessday.co.za/articles/frontpage.aspx?ID=BD4A131854
Nice to see the Metal leading the shares by % points on JSE. SOME Miners will have their day soon, then we can buy more physical from the game of paper nothings...Some make their living this way by playing markets, and it pays the bills and buys the Gold. (or Silver as well for some)

YGM (12/28/05; 14:30:49MT - usagold.com msg#: 139797)
Flaccus
Flaccus (12/28/05; 13:33:36MT - usagold.com msg#: 139794)
Bore birds Rich Galearis


You sir are the boring one with your blathering of Silver talk highjacking the forum. Remember CPM sells silver also and Silver was being discussed in pro and con banter here LONG before you came along. This is about intelligent adult discussions and information sharing, not one sided tunnel vision. As I stated to you recently if MK's CPM Forum allows politics and 911 conspiracy or other off topic rants here thewn what the heck is wrong with Silver talk input? Did I miss something or are you now our moderator? Rich and Galearis have added alot to this place over the many years they have graced us with their thoughts. The counterpoints brought out by Randy and others is/are very educational to some of us.

Goldilox (12/28/05; 13:53:04MT - usagold.com msg#: 139796)
Pump Schemes
@ The Hoople,

Perfect timing, as CNBC just announced an upcoming story on "How to avoid" pump and dump schemes."

Even the commercials are interesting between the lines:

KIA - "The dollar lives again!"

Subaru - "Recycle your dollars"

Barron's - "Shows you how to turn your money into real wealth"

@ Flaccus,

Always enjoy such "open-minded discussion"!

Druid (12/28/05; 13:36:27MT - usagold.com msg#: 139795)
The Hoople (12/28/05; 08:22:23MT - usagold.com msg#: 139781)

Druid: The inverted yield curve is right on schedule. Now the collective geniuses on the parrot box have something to "talk" up for the next quarter or two. This will map well with the Iranian Oil Bourse event and the Fed going into hiding about their activities. And then, THE GREATEST PUMP THE WORLD HAS EVER KNOWN WILL BE RELEASED. IT'S ALL GOING TO BE GOOD NEWS. At about this time, the initial stages of massive inflation hitting our shores should begin to appear in our economy in such a way that even the Barkers can't talk it down anymore.

This inflation should mix well with our homegrown inflation that is currently sitting on the "sidelines" waiting to be put to good use. This combined paper force should begin ramping up the paper markets foretelling the future because, after all, that is what paper does, correct?

The Barkers will be able to trumpet the end of a recession brought about by the yield curve situation and this will provide the Fed cover to start lowering rates to "kick start" the economy.

This will also provide cover for other CB's to unload gubmint paper. I mean, after all, the Fed will be there, behind closed doors, as buyer of last resort. Meanwhile, gold will continue to ratchet up making new highs letting the masses know that there is no inflation. This is what my Seeing Eye glass keeps playing back almost in a recursive loop type fashion. Maybe I need to reboot it.

My Seeing Eye glass also suggests that we don't go into Iran, otherwise, the Republican Party as a political entity will take another 40-year hiatus in the collective thoughts of the masses here at home. Nope, it all has to be slow and steady and no one panic, Ok!

Druid's calling for another productivity type of miracle to occur beginning the 3rd Quarter of 2006 ushering in the BULL OF ALL BULLS.

Here's hoping all bugs had a wonderful Christmas.



Flaccus (12/28/05; 13:33:36MT - usagold.com msg#: 139794)
Bore birds Rich Galearis
Here come the borebirds to put us to sleep again talking about what no one but them is interested in. Silver. Yawn. . . I'm ready. Fill the board with silver blather. Isn't that what usually comes next as the hijackers try to take over? Must be feeling insecure about their positions again.

Isn't there someplace you folks need to be?

Goldilox (12/28/05; 13:27:02MT - usagold.com msg#: 139793)
Goldcorp Confirms Agreement to Acquire Placer Assets in Connection with Friendly Barrick-Placer Dome Transaction
snip:

VANCOUVER, British Columbia, Dec 22, 2005 (BUSINESS WIRE) -- Goldcorp Inc. today announced that it has confirmed its previous agreement to acquire certain mining assets of Placer Dome Inc. from Barrick Gold Corporation upon successful completion of the friendly Barrick-Placer Dome transaction announced today. The purchase price will be US$1.485 billion in cash. Subject to any required consents and governmental approvals, Goldcorp will acquire Placer Dome's interest in the Campbell mine, the Porcupine JV and the Musselwhite JV in Ontario, as well as a 50% interest in the La Coipa gold/silver mine in Chile and a 40% interest in the Peublo Viego development project in the Dominican Republic. In order to fund the proposed acquisition, Goldcorp intends to use a portion of its current cash balances and existing credit facilities of over US$1.6 billion.

"We are pleased that Barrick and Placer Dome have agreed to a friendly transaction and look forward to concluding the acquisition of the Campbell mine and the portfolio of other operating, development and exploration assets." said Ian Telfer, President and CEO of Goldcorp. "We believe that the increased purchase price is justified as a result of recent increases in gold prices, the exploration success at Red Lake announced by Placer Dome on December 19, 2005 and additional synergies and tax efficiencies that we expect to arise from a friendly transaction. The recent discovery by Placer Dome of high-grade zones at the Campbell mine, including a down-dip extension of Goldcorp's Red Lake High Grade Zone validates Goldcorp's view of the significant exploration potential at the Red Lake camp."

-Goldilox

Not meant as a stock tip, I think this qualifies in the "Are you going to eat that?" category. While the hedgers chew cud made of each others' paper obligations, (previously) debt-free GG comes in and sops up the ounces-in-ground.

I'll leave the calculation of value proposition to more those more well qualified than I. I wonder how much of that pile of cash B and PD will use to buy out hedges?

TownCrier (12/28/05; 13:14:53MT - usagold.com msg#: 139792)
Gold thrives on inverted Treasuries, growth doubts
http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-12-28T181209Z_01_N28458820_RTRIDST_0_ECONOMY-GOLD-INVERSION.XML
NEW YORK, Dec 28 (Reuters) - Investors accelerated their move back into gold this week in part because a rare inverted U.S. Treasury yield curve renewed questions about the future health of the U.S. economy, analysts said on Wednesday.

Benchmark 10-year U.S. Treasury yields fell below two-year yields for the first time in five years on Tuesday.

Previous yield curve inversions have often heralded recession and debate is raging over what the flip means in the current environment of robust growth and relatively subdued inflation.

"The inverted yield curve, which sent the stock market reeling yesterday, made gold one of the few safe havens," said George Gero...

Greg Weldon said "The inversion implies economic weakness to come, and that is going to keep the Fed from really tightening policy as opposed to just lifting the cost of money."

Peter Schiff said he believed that gold was bolstered more now by low U.S. interest rates relative to inflation than by the inverted yield curve.

"What's helping gold is that rates are so low in the first place," he said. "And that with respect to raising rates, the Fed can't raise rates high enough to hurt gold without hurting the economy -- which also would be good for gold."

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

Some assorted views as relates to gold.

R.

TownCrier (12/28/05; 12:51:47MT - usagold.com msg#: 139791)
G . . .
There it is.

R.

TownCrier (12/28/05; 12:36:05MT - usagold.com msg#: 139790)
old gains new currency in uncertain times
http://www.theaustralian.news.com.au/common/story_page/0,5744,17673312%255E36375,00.html
(The Australian) December 28, 2005 -- AT Mumbai's gold bazaar, Bachuben Mehta has become a regular, so keen is she to cash in on one of the longest booms in the yellow metal's history.

"I sell a little and will buy later," she adds, making clear she keeps a daily eye on the gold price and values both trading in the metal and owning it.

For thousands of years, gold has been considered the store of last resort. As a status symbol it has few rivals.

Gold has been propelled upwards on a wave of buying, driven not only by Indians' demand for jewellery but also by Japanese consumers worried about inflation, recycling by Middle Eastern investors of their petro-dollars and, not least, investment inflows from hedge funds and other speculators.

Something of its mystique was captured by no less a figure than Alan Greenspan, the venerable Federal Reserve chairman.

Speaking to the US Congress in 1999, he said: "Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted."

Yet the recent ascent of the metal has bemused many observers because the economic conditions that generally sharpen demand are absent. Gold is often seen as a hedge against inflation. But if world markets were worried about inflation and the weak yen, bond yields would be higher. Gold also tends to perform best when investors are averse to risk - on the brink of a war, for example. Global risk appetite, however, is very high - witness the performance of emerging-market equities and bonds over the past few years.

And while in recent years the metal has frequently risen as the dollar has fallen, and vice-versa, what is striking about its recent rally is that its price is up in ALL the main currencies.

At one level, gold's strong performance reflects a wider commodities boom. ... But that is insufficient to explain gold's rise.

....Gold is being bought as a physical alternative to other global currencies at a time when all are suffering from uncertainty. "The world's top three currencies - the dollar, the euro and the yen - all happen to evince structural weaknesses," Mr Paris-Horvitz says.

While the dollar currently offers higher returns than its two rivals, its performance is overshadowed by the US budget deficit and current account imbalances. The euro is affected by Europe's sluggish economy and political uncertainty, while interest rates in Japan are at near-zero levels.

David Rosenberg, a US economist with Merrill Lynch, says: "Investors want to own gold as a non-political, non-national currency." He goes so far as to suggest gold could become the world's fourth currency.

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

Much of this article meshes well with the comments offered in my previous post.

Call USAGOLD-Centennial today for a consultation on a diversification strategy that's right for you. The brokers are friendly and professional, the gold is nicely priced, and best of all there is no cost to you for the call.

TOLL FREE 1-800-869-5115

R.

TownCrier (12/28/05; 12:18:37MT - usagold.com msg#: 139789)
Other commodities may toe gold line
http://www.business-standard.com/bsonline/storypage.php?&autono=209793
Mumbai December 28, 2005
Commodity prices are likely to follow an upward trend globally, toeing the lines of rising gold prices, as analysts feel the yellow metal tends to lead commodity inflation.
 
Gold is the leading indicator of the commodity research bureau (CRB) futures index, which is a well-known indicator of overall commodity prices in the world, reveals a study by National Commodity and Derivatives Exchange (Ncdex).
 
"The rise in the gold prices is thus an early signal that commodity prices in general may start to strengthen," said Madan Sabnavis, the chief economist at Ncdex.

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

I will agree that commodity prices are on the ups (for reasons I won't dwell upon), but this time around (vis à vis the historic "gold indicator") I won't agree with the article's implied premise that the price of gold is currently rising as if simply that that's its sworn duty as an inflation forecaster.

Again, this isn't to say that general inflation isn't in the pipeline, but that's not the primary issue that needs discussing.

The primary reason for the magnitude of gold's current (and future) price gains is the structural shift that's occurring among the deep undercurrents of central banking principals and practices with respect to gold usage (its role amid the system).

In the same way that the rising goldprice is signalling this structural shift, it is with this interpretation borne in mind that we must also read the signs of the flat/inverted yield curve as has been recently discussed. It should be evident from my months-old "conundrum" commentary that their is a unique force at work here, and in light of this structural shift, the "old rules" don't necessarily apply. And in saying that I am indicating my agreement with MK's recent comments in which he bucks the "conventional wisdom" that has historically tried to correlate inverted yield curves as an indicator of recession. Money is too cheap and abundant and too easily "dropped from helicopters" to even entertain the notion that money and rates, such as they are, have any forecasting validity to see beyond the dominating effect of the ingeniously engineered structural shift that many of us have been discussing during this post- euro-launch era.

R.

TownCrier (12/28/05; 11:31:25MT - usagold.com msg#: 139788)
Soaring gold price no boon for producers
http://www.businessday.co.za/articles/companies.aspx?ID=BD4A131886
(Financial Times) -- The price of gold has doubled over the past five years, so it stands to reason that companies that dig the precious metal out of the ground must be laughing all the way to the bank.

They are not. Even with gold at more than $500 an ounce, "the margins are not great", says Bruce Alway, a senior analyst at GFMS, a London-based research group.

...the challenges facing the industry are only going to get harder, not easier.

--Regulatory approvals have become more complex and time-consuming. Environmental safeguards are more costly.

--The same inflationary pressures that have helped lift the gold price are also pushing up costs.

"There's a limit to what you can achieve by synergies," says Alway. "You've still got to drive trucks and shift soil."

--Hedging, popular when gold was in the doldrums in the 1990s, has now become a drag on profits.

--the (in)ability to replenish reserves (is) a crucial measure of a gold producer's long-term growth prospects. "The bigger you get, the more you need to replenish reserves." Spending on gold exploration has trebled in the past three years.

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

If you want the best exposure to the capital gains which are expected from the price evolution as gold's official usage enjoys a paradigm shift, then your "leverage" is in ownership of the metal, not the mining shares. This is unfolding exactly as FOA/TrailGuide forecasted several years ago.

R.

TownCrier (12/28/05; 11:19:03MT - usagold.com msg#: 139787)
China To Increase Gold Reserves
http://www.neftegaz.ru/english/lenta/show.php?id=60636
28.12.2005 -- Some economists have been appealing to the State Administration of Foreign Exchange to expand China's gold reserve after the Renminbi appreciation in a bid to reduce the country's reliance on the greenback, Xinhua new agency reported.

China should increase its gold reserve from 600 tons to about 2,500 tons in a short term and to 3,000 tons in a long term to cope with the versatile exchange rate risks, said Teng Tai, an economist of China Galaxy Securities Company.

Too little gold reserve would pose threat not only to China, but also to the global monetary system, Teng said.

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

This shift toward more prominent gold reserves WILL happen. And as I posted yesterday, the only real question is a matter of timing to ensure a healthy progression of the goldprice evolution throughout the transition.

R.

USAGOLD / Centennial Precious Metals, Inc. (12/28/05; 11:10:01MT - usagold.com msg#: 139786)
FREE Gold Information Packet...
http://www.usagold.com/Order_Form.html





R Powell (12/28/05; 11:07:16MT - usagold.com msg#: 139785)
Galearis + all
What news, if any, on Barclay's proposed silver ETF?

I know it's just a paper stock but, as one who believes that gold ETFs have supported + somewhat raised the POG, I'm curious as whether a silver ETF might happen, and shed some light on available physical silver. Supposedly, the ETF's are backed by physical, even if cashing in ETF stocks might not be possible or practical.

Good day for precious metals today. (G)
Thanks to all the Mitchum fans for the info. He also got to star with Marolyn Monroe, floating down a river on a raft. The kid in that one was Tommy Redding (original Lassie star).
rich

Galearis (12/28/05; 10:38:13MT - usagold.com msg#: 139784)
@ Rad and Rich re Canada questions
Rad,

Perhaps it would be best to ask on which side of the border are you?

Please note that I have been charged GST and PST on bullion crossing from the US to Canada.

Also:
"Does Canada have a history of gold seizure like the US?"

No, it does not,,,,but it has controlled sales and prices. For a period (in the '50s -'60s, I believe) the Canadian government bought its gold production in a similar way to what Russia is (reported) currently doing. At one time Canada had the hardest currency in the world and its dollar was fixed at up to 7% over the USD. This made currency sense, but did not help our trade prowess. At the time the population of Canada was some 20 million and it had about 1000 tonnes of gold in its reserves, and hence was much more "backed" by gold (per capita) than the US which had 8000 tonnes (supposedly).
Ironically, we are seeing the CAD once more as the strongest currency.

Deifenbaker (a prime minister of the time) allowed the CAD to float and devalued to facilitate trade.

Our gold has since been spent in the dollar camp (G-7) to 1) help bankrupt the USSR, and 2) more recently for leasing to suppress the gold price. At last count the vaults are all but bare.

The benefit to the average citizen has been unprecedented prosperity and, to quote the UN, to create the best country in the world in which to live. Canada still prospers more than the rest of the G-8. and that is a factor in the CAD leadership. For example, last month our smaller economy produced more jobs than the (reported) numbers for the entire US. However, we are sure to pay for past sins in the none too distant future.

There you are more and less of what you wanted to know.

Regards, and Happy New Year. My fingers are crossed.

G.


R Powell (12/28/05; 09:45:44MT - usagold.com msg#: 139783)
Clink
Your words here, from yesterday....

"Did you know there have been 11 films made between 1914 and 2005 with the simple title of "Gold" ?
And for Rich, who started all this in the first place, two for "Silver", one of which is due out in 2006."


Both silver and gold were once used as currency. Actually, it's been just a very short time, in the history of money, that they have not been so used. But, since they are no longer, I don't believe the old silver vs. gold ratios have any meaning any more. That's just my opinion, of course and I don't wish to get everyones' shorts in an uproar over any such ratios.

Obviously, there need be no more discussion as Clink has posted proof positive (quoted above) that the true, underlying ratio is 2 silver for every 11 gold. Movie titles never lie. So, if my math is correct, silver's "real" but never seen monetary value is 18% of the POG. So, if the POG were, say, $500./ounce then silver's true, real, intrinsic value should be $90./ounce. Case closed. Thanks, Clink!
rich



R Powell (12/28/05; 09:21:03MT - usagold.com msg#: 139782)
Inverted yield curve
http://www.marketforum.com/?id=829253
The link goes to a post by a fellow who claims that "over the last forty years the yield curve has inverted a half dozen times, not all of them led to a recession". He has done some research for us. He then lists some dates + numbers. BTW, I know this particular poster is also a goldbug. Thanks bearjr1. There are some who are both bugs and traders.
rich

The Hoople (12/28/05; 08:22:23MT - usagold.com msg#: 139781)
MK, TC
The rate inversion and even the bond rates in general to me are a desperate attempt to NOT go into recession. I view the bonds much like when the stock market would (be allowed to) wobble and companies then used stock buybacks as a method of keeping their stock price buoyant. There were plenty of sellers, they just made sure there were plenty of buy orders to match. We have no way of knowing how pervasive intervention occurs (Carribean pirates?) in the bonds. It's as if economic blinker lights that flash warning are merely disconnected whenever they come on. I do know eventually even stock buybacks no longer work, ie, Enron and MCI. If we do careen into recession/depression it will be in spite of their best efforts to stall it. If the rate is inverted at the time it will be as if they are some of the last soldiers guarding the fort walls crashing down. Whether it's rate inversion, removal of M-3 publication, artificially managed POG, artificially managed dollar, they all leave us flying more and more blind. The real rate of inflation is closer to double digits than any of the 1,5,10 or 30 year yields. That is a conundrum that can't last too long. Hope I haven't used too many metaphors in one post!




Henri (12/28/05; 08:15:08MT - usagold.com msg#: 139780)
Who let the dogs out?
Spot is jumping this morning. What did you feed them Gandalf?

Goldilox (12/28/05; 05:47:37MT - usagold.com msg#: 139779)
China scooping up deals in Africa as US firms hesitate
http://www.boston.com/news/world/asia/articles/2005/12/24/china_scooping_up_deals_in_africa_as_us_firms_hesitate?mode=PF
snip:

LUANDA, Angola -- China's growing demand for energy sources and profitable construction deals is leading the world's most populous country increasingly to swoop into Africa, where it has found abundant raw materials, governments desperate for outside investments, and relatively little competition from American firms.

The Chinese, sensing Africa's tremendous potential upside, are making strategic economic inroads into a continent that, outside of oil investments, has long been written off by most Western companies as too risky because of poor governance or threat of conflict. US companies, in particular, have been caught flat-footed by the Chinese financial strikes, according to American and other experts on Africa's economic potential.

''China is competing for anything and everything at this stage," said Dianna Games, a South African political and economic analyst who studies business trends in sub-Saharan Africa. ''They know Africa is wide open to them."

In the last several years, China has either struck oil deals or built on existing ones in Angola, Algeria, Chad, Sudan, Equatorial Guinea, Gabon, and Nigeria. More than half of Sudan's oil exports go to China, accounting for roughly 5 percent of its imports.

But trade is not limited to just oil. Chinese stakes have also risen dramatically in infrastructure projects and the mining of precious minerals, including diamonds, gold, and platinum. Trade between Africa and China was at $18.5 billion in 2003, an increase of 50 percent over the previous year. Some analysts believe that could double by the end of next year.

The seriousness of the Chinese purpose can be especially seen in Angola, where a $2 billion line of credit from China's export bank has led to railroad repair, road building, office construction, a fiber-optic network stretching for more than 100 miles, and a stake in oil exploration in shallow waters off the coast.

MK (12/28/05; 01:35:11MT - usagold.com msg#: 139778)
Town Crier
Thanks for posting the story on the rate inversion as the reason for the stock market sell-off.

This rate inversion didn't happen overnight. You could see it coming even if the only indicator you watched was something as Main Street (as opposed to Wall Street) as bank CD rates.

I disagree with the notion however that this is signaling a recession. We might be headed for a recession, but if we are, it will be for reasons far more deeply rooted than a rate inversion. The problems in the manufacturing sector -- Ford and GM being two good examples -- as turns of the screw that could auger something much deeper than your ordinary, run of the mill recession.

The interest rate inversion is more an antecedent of the trade deficits and the huge build-up of overseas capital than it is a precursor to a recession. In fact, the inversion could be signaling something far different. It may be telling us that the "conundrum" that played such a huge role in the economy last year might be its chief feature next year.

If so, it could have the opposite effect. It could work to allay a recession by providing cheap money for the American consumer. That assumes of course that the Chinese, Japanese et al continue to support the deficits by purchasing U.S. government treasuries. It is interesting to note that in two short years, China, which once held about 25% of the Treasuries position as Japan, has nearly caught Japan on aggregate bond holdings.

It is difficult to see around the corner on this one, but as I've said in other writings the current structure is more conducive to a severe inflation than anything else, as Richard Duncan and others have attempted to point out.

Whenever something like yesterday's stock market dump dominates the headlines, the press finds it part of its duty to offer a good reason. If you can't come up with one that makes good sense, come up with one anyway.

Could it be that some of the funds are simply taking profits after a decent run-up over the second half of this year? Naw. . .couldn't be that simple. Another culprit could be the developing concern that the dollar might resume its structural bear market in 2006. After all the Nikkei is flying, and there's as much to that story as there is to the interest rate inversion.


otish mountain (12/28/05; 00:13:23MT - usagold.com msg#: 139777)
Thunder Road (Off Topic)
http://www.imdb.com/name/nm0000053/#writer
Actually Thunder Road was a first for Robert Mitchum in 3 catagories- writer of the story, producer(uncredited), and composer of a song in Thunder Road "Wippoorwill".
Thanks Google...see link.
But really reading Rads post gave Rich's question the answer anyway.



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