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ARCHIVED DISCUSSION FROM 1/28/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Paper Avalanche (1/28/06; 22:55:39MT - usagold.com msg#: 140980) Thank you Belgian I very much appreciate your never-ending efforts to educate both the newbys and those of us who thought we understood the "free gold" concept.Your efforts will be eternally appreciated.I wish you the best and will always consider you a friend.Best regards,PA Goldilox (1/28/06; 22:23:18MT - usagold.com msg#: 140979) Predictions @ Ned,- I'll see your "wild guesses", and raise a few of my own.From my perspective, I think any return to DOW/Gold at 1:1 will be a much higher figure (they're all just a series of digital bits), as the paper powers push us into more massive inflation. Sign me up for DOW/Gold at 1:1 somewhere between 5-10K,or even higher, with $5K not being worth squat by historical comparison at that point.I think there is a lot more oil around than we are led to believe, but 1) TPTB prefer to draw down outside resources, as it bolsters their "control", and 2) a lot of the remaining oil will take some technological advancement and not come as "freely" as the ME oil has.Rising oil prices are also gonna make some people think twice about outsourcing everything, as transportation may replace labor as the major cost factor, leading to a renewal of more localized "cottage industries".I also think there is a lot of alt energy research going on that will finally catch the eyes of some investment capital and reduce the growth demand on petroleum in its current "one-trick pony" role. Scaled Composites is the tip of the iceberg in this area.While gold seems tied rather tightly to oil right now (due to its one-trick-pony status), I'm not so sure that the future doesn't hold some de-coupling there, as well, leaving us in Belgian and others' gold revaluation scenario.Bottom line - gold is, and always has been REAL MONEY! The Invisible Hand (1/28/06; 22:04:24MT - usagold.com msg#: 140978) Britain's Observer also never heard of the IOB http://observer.guardian.co.uk/business/story/0,,1696992,00.html Iran crisis 'could drive oil over $90' Prices climb ahead of critical week as nuclear row escalates. Opec says it won't increase quotas to cover for production shutdown Heather Stewart, economics correspondentSunday January 29, 2006The Observer Article does NOT mention the Iranian Oil Bourse.TEOTWAWKI. The Invisible Hand (1/28/06; 21:49:10MT - usagold.com msg#: 140977) The gold bubble will NEVER burst http://news.independent.co.uk/business/analysis_and_features/article341605.ece Soaring commodity prices... But will the bubble burst? By Jill Ferguson and Tim Webb Published: 29 January 2006 This article does NOT mention gold. The Invisible Hand (1/28/06; 21:40:44MT - usagold.com msg#: 140976) Fatalism in Davos http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/01/29/ccpest29.xml&menuId=242&sSheet=/money/2006/01/29/ixcoms.html SNIPA pall of fatalism seemed to fall on Davos, more numbing than the rising snow and the falling mist, in the closing stages The Invisible Hand (1/28/06; 21:21:33MT - usagold.com msg#: 140975) Amerika and Belgik are dead http://www.vheadline.com/readnews.asp?id=47792 SNIPPetro-Euro? The question now is what will the Bush administration do?Aljazeera.com: Iran's nuclear projects, alleged WMDs, or its supposed support of "terrorist organizations" as the Bush administration claims does not pose a threat to Washington.What does pose as a threat is Iran's attempt to re-shape the global economical system by converting it from a petro-dollar to a petro-euro systemSuch a conversion is looked upon as a flagrant declaration of economical war against the US which would flatten the revenues of the American corporations and could eventually cause an economic collapse. Ten Bears (1/28/06; 20:54:40MT - usagold.com msg#: 140974) Philosophy and economics http://www.larouchepub.com/lar/2005/3239shape_emptyspace.html The notion of a pending economic crisis is increasingly discussed on the net. I found this incarnation a particularly interesting read. Snips;"The concept of the general welfare, traced implicitly from Solon of Athens and the concept of agape defined in Plato's Republic, is otherwise known as the same principle of agape defined explicitly for Christianity by the Epistles of the Apostle Paul. It is otherwise known as the principle of the common good, in universal natural law, and is the pivotal principle of law set forth, as the "promote the general welfare," of the U.S. Federal Constitution.[19] It is a law superior to the will of all governments, and their judges and other officials, as an outgrowth of the founding of modern European civilization by that Council, and of the continuing effort, still today: to free humanity from the satanic grip of usurious debt-slavery to the contemporary successors and political heirs of ultramontane, medieval Venice's imperial financier-oligarchy""The fate of the Germany, Russia, China, India cooperation in long-wave, Eurasia-centered world development, and of the Americas, especially the U.S.A.'s cooperation with that global development of all parts of the planet, will now decide whether or not mankind emerges to prosper out of this global economic breakdown-crisis of the present, neo-Venetian form of world monetary-financial system. In other words, whether the republican, or oligarchical currents traced within continuing European culture since ancient Greece, shall prevail during the weeks and months now immediately ahead." Ned (1/28/06; 20:29:11MT - usagold.com msg#: 140973) Excellent article canamami ....from your post 140960. From my morning post of 140953 I quote Sir Belgian's "the yellow replaces black", I draw attention to the Middle Eastern and OPEC countries buying gold.The oil/gold ratio, historically at 16:1 has plunged to 8:1 in recent weeks and months. As the POO rages on it may drop further. What is this IRAN business does get ugly and we see $100 oil and say $700 gold (7:1). What is it gets super-ugly as I saw an article today suggesting oil at $262 and gold at $1000? That's 4:1, never, ever to repeat !!The yellow will replace the black over time, gold will go to stratospheric levels. When the black is gone what is left? Dollars? Hee...hee.Ah yes and the famous Dow/Gold 1:1 ratio. That's really amusing. The ratio hit a high of some 45:1 a couple/three years back. Now we've into semi-reasonable levels at 18/19:1. When the inevitable happens (skyrocketing POO) a la Iran, terror, 'peak oil', the DOW will crash and gold will relentlessly follow the POO. We will see the lovely 1:1 at (wild guess) 2000/$2000 in the year 2009. The POG/POO should have hit its 4:1 downward peak and be climbing back at 8:1 ($2000oz./$250bbl) Then "the yellow replaces the black" as oil producing countries furiously grab the yellow as the last man standing holds the gold.....makes the rules.The DOW/Gold reverses and its 10:1 in favor of gold ($10,000/1000) and the gold/oil continues to reverse. In 2012 we see POG/POO back to historical norm 17:1 at ($10,000/$588).Past 2012 into 2020 we see mayhem with the DOW/Gold at 40:1 ($40,000/1000) and POG/POO at 40:1 ($40,000/$1,000) because there is no oil.The world has stopped and he who has the GOLD makes the rules !!!Simple as pie. Buy and hold......forever.Eternal wealth....thanks again for the discussions Belgian. It has been history in the making. Whitewaterwoman (1/28/06; 19:35:43MT - usagold.com msg#: 140972) Belgian... ...I'm lifting a pint of fine brown Belgian ale to you! Hope your absence is only temporary and that you find you just can't stay away. You've taught me much. timbervision (1/28/06; 19:23:28MT - usagold.com msg#: 140971) Belgian I hope that your departure will only be temporary. Perhaps you need to sleep on it. In any case, you "are" (have been) the central draw for me to this site, to learn and become solid in my understanding of gold. I thank you for your tireless efforts, including your unwavering courtesy to respond to questions posed.Instead of telling people to make sure they never miss your postings, I will now have to tell them to take some time and look for you in the archives.All the best and many thanks. Goldilox (1/28/06; 18:40:00MT - usagold.com msg#: 140970) Police State Powers http://urbansurvival.com/week.htm snip:Go read the latest on supposed power of the Department of Homeland Security to intrude into your private banking affairs (and safe deposit boxes) at today's report from the "Voice of the White House." Chilling quote:"Further, the DHA "shall, at the discretion of the agent supervising the search, remove, photograph or seize as evidence…" any of the following items…"bar gold, gold coins, firearms of any kind unless manufactured prior to 1878, documents such as passports or foreign bank account records, pornography or any material that, in the opinion of the agent, shall be deemed of to be of a contraband nature."All of which would sound wildly speculative, paranoid to the point of delusional except that an absolutely unimpeachable source sent me this first hand account of his business this week:"Went to bank today. new placards in window saying the bank is cooperating with Homeland security in id'ing their customers. So all transactions will involve providing at least two sources of id. even if they know you. Now they did not ask for squat as I deposited some small checks, but yesterday when I went inside the bank, and had not noticed the placards, the teller was all over my ass for id as I bought the cashiers check for my ******. I have banked there since 1980 and have check numbers over 11 thousand now. But she was a new teller so I thought she was just over zealous and really on the job.Now comes the question of boxes. I asked if there were new rules about the bank box I rent. Have one for paper copies of ************* and some other paper, nothing more. Anyway was told that the teller could not discuss that and that I had to contact the woman in charge of the bank boxes at whichever branch I have the account. So that pretty much tells me that yep, something is up there too. The teller today would not be drawn out about it, so I let it go. "Of course, you're in a bit of a box here. If you have cash in any quantity at home, you're subject to robbery by common thugs, or confiscation by power-crazed local police who could claim you are a suspect in narcotics trafficking and that the cash/gold/silver/guns are "evidence" which you can bet your ass you'll never see again even (or this is especially) if you obtained the items in an absolutely legal manner..Maybe if I send a little money to the local party in power, I can "buy some protection." What a racket, huh?Homeland Security now considers gold "contraband"? ge (1/28/06; 17:59:20MT - usagold.com msg#: 140969) Belgian I have learned a lot from you in this forum. Hoping to hear from you again. Best Regards. spikedog (1/28/06; 17:19:03MT - usagold.com msg#: 140968) Belgian - Last Post Fare thee well, Sir Belgian. May your path be blessed with golden sunrises and sunsets. Liberty Head (1/28/06; 17:15:52MT - usagold.com msg#: 140967) ETF's Smeagol,Could it be that gold ETF managers are paid in gold?While many folks would be content to earn in fiat and save in gold, wouldn't it be grander by far to be paid in gold? Perhaps as an option?The fiat patriots could opt to be paid in fiat, whilst the true patriots could opt for payment in gold.Boy oh boy, talk about giving the gov't neanderthals the ultimate wedgie. Oh well, it's a lovley dream. It brings a smile to my face.Back to reality.Best Wishes David Linkley (1/28/06; 17:06:55MT - usagold.com msg#: 140966) @Sir Belgian I hope the world you envision unfolds in our lifetimes and hope you continue on your "celebration of life" path. Many thanks! Smeagol (1/28/06; 17:04:37MT - usagold.com msg#: 140965) ETFs - Eventually Transferred Funds - What A Racket! Let me see if I have this right:-----I am the typical investor that is used to never seeing what I have invested in. I see that gold is the hot ticket, so I buy shares in a gold ETF that start out at a value of 0.1 ounce of gold. The ETF takes my money and buys the gold and stashes it away in a place where I can't see it, not that I need to see it anyway, because even if I wanted to I cannot trade the shares in for the gold. Not that I want the gold anyway, I just want a return and keeping something like that is a security risk I don't need. Fair enough.As the years go by and currencies are debased the gold price goes up. Because of the fundamentals we all know it's going to go up for a while - and so do the price of my shares. And all the while a small amount of the gold is being sold - leaking, as it were, to somewhere else. But it doesn't matter, because in the current environment the share price is going up enough to more than wash away the trifling pennies' worth of metal "fees" that are taken every year. Meanwhile, I'm making money!And if for some reason the gold price suffers, I can lose money just like in any other investment. Heck, maybe I can switch then and sell the shares short. So what if a truly insignificant amount of metal continues to dribble into someone else's vault (hmmm... where is that leaking gold metal going anyway)? I don't really care - I'm making money!-----ETFs - a way to get other people to buy your gold for you, en masse and perfectly legal too. Dang - wish I'd thought of that!!!!Smeagol OvS (1/28/06; 16:57:27MT - usagold.com msg#: 140964) Belgian. If indead it was his lastpost I will always remem-ber him not for his goldpostings, which are/wereextraordinary, but for:OvS, life is the mostbeautiful, adventurous,personal gift. Enjoy thisunique event intensively..in as much of its infiniteaspects, possible...Secondby second! And do it yourway. Regards. B.Some day perhaps we canclink to it, not in cyber-space, but eye to eye. OvS USAGOLD (1/28/06; 16:46:31MT - usagold.com msg#: 140963) Economist magazine warns "Danger Time for U.S." http://www.newsmax.com/adv/economist/?PROMO_CODE=1A35-1 "The respected global weekly magazine states, depicting a cover drawing of Federal Reserve Chairman Alan Greenspan passing a stick of dynamite labeled the 'The Economy.'""In his final days of glory, it may therefore seem churlish to question his record. However, Mr. Greenspan's departure could well mark a high point for America's economy, with a period of sluggish growth ahead. This is not so much because he is leaving, but because of what he is leaving behind: the biggest economic imbalances in American history."USAGOLD: It is difficult to quantify what the effects of Greenspan's departure might be. The stream of speculation has begun. Bernanke takes Fed reins February 1. This transition could be the forgotten story behind gold's recent rise. Smeagol (1/28/06; 16:30:53MT - usagold.com msg#: 140962) ETFs - Evaporating Temporary Funds http://www.smartmoney.com/investingin/index.cfm?story=20060126 Lifted this from the article at link "The New Gold Rush", by Aleksandra Todorova:"Buying shares of gold ETFs is as close as individual investors can get to owning gold without having to buy actual bullion. That's because the two gold ETFs currently traded in the U.S. invest directly in gold bullion, with each share representing roughly one-tenth of an ounce of gold. Consequently, the ETF shares very closely track the price of gold itself. For example, on Jan. 24, 2006, gold prices closed at $558.20 per ounce; the iShares COMEX Gold Trust closed at $55.77 per share and streetTRACKS Gold Shares closed at $55.73.Although gold ETFs are a relatively recent addition to the ETF universe — the streetTracks Gold Shares fund opened for trading in November 2004 and iShares followed in January 2005 — investors are clearly enamored. During 2005, $3.4 billion poured into the two ETFs, according to investment-research firm TrimTabs. For the first 20 days of 2006 alone, another $561 million flowed in, double the pace of average monthly inflows for 2005.But gold ETFs come with several drawbacks investors should seriously consider before jumping in. One is the tax bite: Since they buy gold bullion, the IRS treats these ETFs as though they hold precious-metal "collectibles," explains CFP Michael Kitces, director of financial planning at the Pinnacle Advisory Group in Columbia, Md. Under the current tax law, the long-term capital gains rate on collectibles is 28%, rather than the 15% for traditional long-term capital gains."But THIS is the BEST part <<< emphasis mine >>>:"Also, the ETFs pay their annual expenses — a reasonable 0.40% compared with the much pricier precious-metals mutual funds — <<< by selling some of the gold they hold >>>. Because of that, both ETFs have warned potential investors that <<< the amount of physical gold represented in each share will decline over time. >>>"S. Smeagol (1/28/06; 16:11:56MT - usagold.com msg#: 140961) Khazak Increases Gold Reserves In 2005 (full text - it's a short article):"Gold in Kazakh reserves grows to 14% in 2005(Interfax News Agency Via Thomson Dialog NewsEdge)ASTANA. Jan 26 (Interfax) - The amount of gold in the Kazakh National Bank's net gold and foreign currency reserves grew 13.9% to 61.7 tonnes for a total of $985.5 million by the end of 2005, National Bank Chairman Anvar Saidenov told Interfax.Kazakhstan's net reserves stood at $9.277 billion at the end of 2004, and gold accounted for 8.7%, or $803.6 million.The National Bank bought 2.5 tonnes of gold from the Kazakh companies Altynalmas and Vasilkovskoye Zoloto in 2005, Saidenov said.The National Bank's net gold and foreign currency reserveswere approximately $7.07 billion in early January 2006, including net reserves of $7.066 billion."Is there anywhere a list of which CBs are pro-MTM, anti-MTM, or undecided?Smeagol canamami (1/28/06; 15:25:40MT - usagold.com msg#: 140960) "Gold Signals, Yellow and Black" from NRO http://www.nationalreview.com/nrof_kucewicz/kucewicz200601260859.asp FYI PH in LA (1/28/06; 14:37:56MT - usagold.com msg#: 140959) To Belgian: Your presence here has been more than welcome... Thank you for keeping the FOA/Another message alive and well-focused all these years. Does your departure mean that we are now even closer to the change-over in wealth perception?Fare-well! Ten Bears (1/28/06; 13:13:58MT - usagold.com msg#: 140958) Belgian Thanks friend, for sharing your wisdom. Smeagol (1/28/06; 12:35:29MT - usagold.com msg#: 140957) 24/7 Gold Trading (Smeagol mode off)When is the Dubai Gold Market going to begin weekend trading? Looking at the New York market's almost daily "6 dollar notch" (which has become laughably apparent), I wonder what two extra days of trading outside of New York influence might do for gold.Thank you 968 and MK for the Thoughts in your recent posts. I think the redistribution ("selling" of some gold by certain central banks and the "buying" by others) may be perceived as a bad/silly/dumb move now, but will be seen as having been necessary later afterwards (if the revaluation process is not derailed somehow, that would leave a real mess). The reason I say this is that looks to me like they are "minimizing in advance" large and destabilizing distortions that would take place if gold was revalued with some nations/central banks holding almost no gold and others holding "too much" (more than would be required to "MTM-back" their currencies, even at 100%, after the revaluation)?Smeagol Cavan Man (1/28/06; 12:19:46MT - usagold.com msg#: 140956) March of Folly Update (aka more good news from Iran) Iran vows missile retaliation to any attackAccuses Britain and United States of arming rebels in its south Updated: 8:58 a.m. ET Jan. 28, 2006TEHRAN - Iran said on Saturday it would launch medium-range missiles if attacked and accused Britain and the United States of arming rebels in its south, as international pressure on Tehran over its nuclear plans grew."If we come under a military attack, we will respond with our very effective missile defense," Yahya Rahim Safavi, commander in chief of the Revolutionary Guard, told state television.Western states suspect Iran of secretly aiming to build a nuclear bomb. Tehran insists its nuclear facilities are intended to produce only electricity.The United States and Israel have said they would prefer to solve the stand-off through diplomacy but have not ruled out a military strike.Military experts reckon the Revolutionary Guard's Shahab-3 missiles have a range of some 1,200 miles, meaning Israel, U.S. bases in the Gulf and foreign troops in Iraq lie within their range.Accusations of arming rebelsSafavi repeated Tehran's allegations that Britain and the United States are arming rebels in the southwestern province of Khuzestan, which has most of Iran's abundant oil reserves."Occupying forces in Iraq, particularly those in the south, provide Iranian agents with material for bombing," he said. "British and U.S. intelligence services should avoid interfering in our affairs."Bombs ripped through a bank and government building in Khuzestan on Tuesday, killing eight people.A group fighting for the independence of Iran's Arab minority claimed responsibility but the claim could not be verified.defense analysts say Iranian ballistic missiles owe much to North Korean and Russian know-how."Iran produces its own ballistic missiles and does not draw on any foreign assistance for technology," Safavi said.The Revolutionary Guard is a parallel military answerable directly to Supreme Leader Ayatollah Ali Khamenei.Courtesy of msnbc.com Cavan Man (1/28/06; 12:16:15MT - usagold.com msg#: 140955) Dear Belgian.... All the best to you.....CM Druid (1/28/06; 11:21:12MT - usagold.com msg#: 140954) @Belgian Druid: Stay well friend and I am deeply saddened. Ned (1/28/06; 11:20:16MT - usagold.com msg#: 140953) Sad day for the forum..... Our friend Belgian speaks his final cryptic message?"Up until now "dollar-gold" was only allowed to fluctuate percentage-wise in function of the official dollar-price-inflation.Now, "euro-gold" will represent the permanent accumulation of wealth"I don't think anyone is going to argue that the gold price hasn't been 'managed' over the years. Isn't everything, right down to the price of eggs, not 'managed'? When gold is set 'free' from the shackles of polical and paper whims it will be 'free' in all currencies. At that point currencies will not matter. Gold and oil will be the final reserve currency. Yen, Euro, Dollars, etc., etc. will be ablaze.... meaningless..... irrelevant. This currency business started with precious metal and it will end with precious. That is also non-debatable.My favorite line, from Prector no less, "Governments may exercise their powers to keep the fiat paper money system afloat, defending their currencies with various schemes and legal restrictions, but in the end, gold will win."So as we watch paper currencies begin to burn and witness gold rising in ALL currencies we enter the endgame. We quote endless sources, all these roads end at the same point. And we witness the price of oil rise in all currencies and we prepare for 'peak oil' so we quote the gold/oil ratio. Oil is the dilemna today so we watch the ratio plunge from a generational norm of 17:1 to 8:1. Oil is today's panic......and so it shall be.Then, and as Belgian so accurately nailed it, "yellow will replace the black" so that when the last man stands he can proclaim that "he who has the gold makes the rules" just as the first man did many thousands of years ago.There is nothing cryptic in that dear forumers. So I thank Belgian for his "yellow replaces black" comments perhaps 10 moons ago. Its the only comment that I ever understood. Fortunately, its the only one that I need to understand.Peace to you Belgian Man, may you have a golden life. Sprout (1/28/06; 10:38:32MT - usagold.com msg#: 140952) Belgian's LAST POST - a sad day indeed Belgian When I'm old and grey with Grandchildren sitting upon my knee telling them a story of days gone by, God Willing - You Sir, will be in the Middle of that Story You are Wonderful PersonYou will be Missed, but Never Forgotten Thank You &Take Care Smeagol (1/28/06; 10:13:38MT - usagold.com msg#: 140951) What? Ssir Belgian's Lasst Post?? Ssay it ain't sso, Joe!~8-( ~8-( ~8-(S. USAGOLD / Centennial Precious Metals, Inc. (1/28/06; 09:51:38MT - usagold.com msg#: 140950) A special combo of assets and info to help you enter the gold market with grace and confidence! http://www.usagold.com/gold/special/starter.html 968 (1/28/06; 05:31:35MT - usagold.com msg#: 140949) @ Sir MK --- Mark-to-Market http://www.bis.org/speeches/sp050218.htm "Let us return now to the issue of marking to market. The running loss or profit is not the end of the story. Whenever the exchange rate changes, so does the market value of the reserves in terms of the value of the liabilities used to fund those reserves. Traditionally central banks have not marked their reserves to market, thereby not making obvious these changes in market value. There is a school of thought that would argue that, because central banks are required to act in the public interest and not seek to maximise profits, they should not be required to mark to market. The problem with this argument is that, in seeking to act in the public interest, central banks can end up in situations where they lose a lot of money. Whether one likes it or not, foreign exchange intervention is risky. Whenever you sell the rand and buy the dollar - unless you have a need for dollars to buy something - you are taking a risk. This holds whether you are in the private sector or whether you are a central bank. If a central bank intervenes heavily to keep its currency down, it builds up a big foreign exchange position. And if its currency ultimately goes up anyway, not only might it have a negative carry on its foreign exchange reserves, it will also have a revaluation loss. Now of course the idea of building up reserves is to have them available when your currency goes down. When this happens, you can sell your reserves back into the market, stabilise your currency and - oh, by the way - make a profit. Hopefully this profit will be large enough to cover any negative carry entailed by holding the reserves in the first place. Central banks that succeed in this endeavour are acting as stabilising speculators. If and when they succeed, they are acting both in their own interests and in those of the community. Unfortunately, central banks have often found that things do not work out so well. Sometimes the central bank intervenes heavily to keep its own currency from either appreciating or depreciating, builds up a big position, but then, for reasons beyond its control (macro-policy shifts, political events or what have you), is forced to give up and pull out of the market. The resulting move in the exchange rate may be so great that it takes years to return to its average rate of purchase or sale. Meanwhile the cost of funding the position becomes so great and the likelihood of the exchange rate falling to its old level so small that a decision is made to liquidate gradually at a loss. Mark to market accounting has the advantage of bringing this issue to the surface sooner rather than later. I note that the Reserve Bank has recently adopted fair value accounting in terms of IAS 39 - with the only exception I understand being the treatment of gold reserves. I would be interested to know to what extent the considerations I just outlined were relevant to that decision. I also note that many of the largest reserve holders have not yet gone down this track for various reasons including, in some cases, because they may not hold enough capital to withstand the short-term volatility. In other cases, foreign exchange reserves are held by the finance ministry, thereby relieving the valuation pressures on central banks and passing them on to the government. Your arrangement whereby revaluation risks are due to the government - if I understand the situation correctly - might provide a useful model for others in this regard. Globally, foreign exchange reserves have nearly tripled over the past decade, rising to more than USD 3 trillion in 2004. Initially countries built reserves as insurance against a rainy day but in some cases it would appear that they also have in mind protecting their exporters against a falling dollar. But the potential financial cost of holding such rainy-day insurance and attempting to protect exporters can be substantial. For the average emerging market economy, in 1990 around a third of foreign exchange reserve holdings were effectively funded by currency on issue, reducing the interest margin. Subsequently, the proportion of foreign exchange reserves funded by currency has fallen to around one fifth, making for a larger financing gap to be filled by interest bearing liabilities. At the same time, because most of these reserves are invested in US dollar assets, the large fall in the dollar has significantly reduced the value of that investment when measured in local currency terms. Starting from the dollar peak at the end of 2001, back of the envelope calculations suggest the total loss in value could add up to as much as USD 100 billion, of which between 20 and 30% could have come from the USD 1.3 trillion worth of new investments in US dollar assets since the end of 2001. Even if we allow that one half of that loss offsets earlier revaluation gains from the dollar's exceptional appreciation, we still come up with a very high number with the potential for much greater losses should the dollar fall a lot further. Of course, a recovery in the dollar would immediately reduce these losses. Furthermore, I should add that those central banks holding gold will enjoy its mark to market benefits at times when the dollar goes down. As I mentioned earlier, these are the benefits gold has to offer as an instrument of diversification.""However, from a portfolio diversification standpoint, holding gold has proven to be an excellent investment. We at the BIS hold a considerable amount of gold and in recent years have benefited considerably on a valuation basis from the rise in the price of gold."----------------------------------------------------------------------------------------------------------------------Goodmorning Sir MK ! Apart from msg#: 140921, I have a more important question to ask you :Since you downplay the importance of mark-to-market (for goldreserves) every time the issue is raised here, can you please tell the forum on what points concerning MTM Mr. R.D. Sleeper, former Head of the BIS Banking department, is wrong ?Thanks in advance for you answers ! Sundeck (1/28/06; 05:28:27MT - usagold.com msg#: 140948) Indiana toll road...Belgians bow out?? @GoldiloxDon't worry Sir Goldilox, you can try to hedge your bets by buying shares in the consortium (they also "own" roads in Canada, UK, Australia and Spain)...that way, if they profit then you profit...but let's hope petrol doesn't get too expensive... ;-)...if they go bust then you lose doubly by losing your equity in the consortium as well as having to pay for the abandoned toll-road...which is likely to be seriously run-down and in need of repair...refurbishment costs that inevitably must be bourne by "the public"...@Belgian #140941What? Can this be true? Justine Henin-Hardenne bows out of the Australian Tennis Open on the same day as Sir Belgian bows out of The Forum?A stirling performance, Sir, over the years...and much appreciated. Thank you...Ahhh...but I see the yellow-brick road leading off and into distant hills...interesting...who knows what may lie along the way...maybe a troll or two under a bridge...but no tolls, I hope!Take care Sir Belgian...:-) Copperfield (1/28/06; 05:06:16MT - usagold.com msg#: 140947) (No Subject) Belgian, last months you increasingly sounded like a broken record. But I think the needle was stuck at the right place..Many thanks The CoinGuy (1/28/06; 04:33:17MT - usagold.com msg#: 140946) Belgian Best wishes to you as you travel along the path.Kind Regards,The CoinGuy Goldilox (1/28/06; 04:23:31MT - usagold.com msg#: 140945) Bubble Economy Watch http://www.prudentbear.com/creditbubblebulletin.asp snip:Bubble Economy Watch:January 25 - CNNMoney.com (Les Christie): "Americans are among the world's most cash-strapped people, according to the latest semi-annual survey from ACNielsen… Nearly a quarter (22 percent) of Americans have no money left once they've paid for their essential living expenses and spent their discretionary dollars. That puts the United States at the top of a list of 42 countries for saving futility…. Others in the top 10 for most cash-strapped countries included Canada, No. 3, at 19 percent, the United Kingdom (No. 4, 17 percent) and France (No. 5, 16 percent)." December Durable Goods Orders were up a stronger-than-expected 1.3% from November. Orders were up 13.7% from December 2004, with Non-defense Capital Goods orders up 34.4% y-o-y. Transportation orders were up 31% from the year ago period. December Existing Home Sales (EHS) were reported at a weaker-than-expected 6.60 million annualized pace. For perspective, EHS averaged 3.993 annualized during the nineties. Total 2005 EHS were a record 7.072 million units, up 4.2% from 2004 (the previous record). December EHS were down 3% from December 2004. Average (mean) Prices were up 7% from one year ago, 16% over two years, and 27% over three years. December New Home Sales were stronger-than-expected, up about 3% from November and up 1.8% from December 2004. Average Prices were down 4% y-o-y to $272,900. The Inventory of Unsold New Homes jumped 12,000 during the month to a record 516,000, up 22% y-o-y. For the year, New Home Sales were 6.6% above 2004's record, at 1.282 million units (‘90s avg. 698,000). Total Home Sales (New and Existing) were up 4.6% from 2004's record to 8.354 million (‘90s avg. 4.692 million). January 25 – PRNewswire: "The median price for existing single-family homes in Florida continued to rise in December, reaching $247,000 -- an increase of 27 percent compared to the statewide median price of $194,000 in December 2004, according to the Florida Association of Realtors. In December 2000, the statewide median sales price was $116,200, which is an increase of 112.5 percent over the five-year period…" January 25 – Bloomberg (Joe Mysak): "Now that Indiana has sold its toll road, get ready for everyone else to do the same. On Monday, Governor Mitch Daniels said a Spanish-Australian consortium had bid $3.85 billion to run the Indiana Toll Road, a 157-mile highway across northern Indiana… A Merrill Lynch & Co. report published last July on the subject of U.S. toll road privatization asked whether sales like the Skyway were one-offs, ‘or do they represent the beginning of a sweeping trend that will spread to other tolled bridges, tunnels, expressways and long-distance toll roads?’ Let's bet on the sweeping trend. The money is just too big to resist…" January 24 – Bloomberg (Brian K. Sullivan and Patrick Cole): "Princeton University, the fourth-oldest U.S. university, plans to charge $42,200 a year for an undergraduate education amid increases in such costs as faculty salaries and efforts to attract minority and low-income students. The tuition and fees will be 4.9 percent higher…" California Watch: January 24 – Bloomberg (Daniel Taub): "One in 13 California homes sold for more than $1 million last year as more condominiums and new homes surged past the million-dollar mark, DataQuick…said. A record 48,666 homes in the most populous U.S. state were bought for more than $1 million, an increase of 47 percent from 33,107 in 2004…" Existing Home Sales in California sank 16% from record-setting December 2004. Median prices, however, were up $74,160 (15.6%) to $548,430. Prices were up $146,710, or 37%, over two years. The inventory of homes on the market has increased from the year ago 2 months to December's 3.6 months, still low by historical standards. Condo sales were down 21.7% from one year ago, with prices up a "modest" 10.2% to $430,910. -GoldiloxSavings continues its asymptotic march to zero, so we not only sell the seed corn, but the very highways it's delivered on. Imagine having to pay a Spanish-Australian consortium to drive on US highways! And the NeoCons and their banksters continue to tell us that hyperbolic debt rise is "meaningless" . . . Goldilox (1/28/06; 04:12:10MT - usagold.com msg#: 140944) Getting the kids used to the cashless society http://infowars.net/articles/january2006/270106cashless_society.htm snip:Mastercard is to introduce credit cards directly aimed at children, encouraging them to go into debt and consume products without the use of cash.Supporters regard the cards, which are issued by Bluecorner, as the natural step in an increasingly cashless society. They argue that the prepayment cards will familiarise children with plastic without spending too much. Says the London Times.The cards are designed to get children used to the fact that cash is obsolete and their money, and the amount they are allowed to spend is controlled by someone else who also profits from their spending.The cards, which have different designs based on popular teenagers' magazines and radio stations, have charges of £9.95 fee to open the account and 85p for each withdrawal from an ATM cash dispenser. There are penalty fees of £4.99 for cancelling an account or ordering a replacement card.Phil Davies, the director of business development at MasterCard Europe, defended the cards saying: "Parents can control the amount of money their son or daughter spends on the card by limiting the amount of money placed on the card."So in effect it is exactly the same as an adult credit card, except the controlling of the amount of money in adult life is carried out by the globalist bankers who profit from the cashless society.A cashless society would mean total control over everyone as people would be forced to pay for everything electronically. Every purchase would be traceable and the ability to buy or sell could be halted immediately at any given moment.We have previously seen how the concept is being seized upon and marketed to young people as cool. Cashless Coke vending machines for example integrated with wireless technology are all very cool, but not so cool when your credit is halted and you can't pop in a quarter for a can of your favourite soft drink to quench your thirst after a hard day's slaving.Implantable microchips are very cool, you can use them to get into nightclubs and pay for drinks, and according to some they are the new body art.But they are admittedly a device of control. You can only spend as much as the controlling authority wishes.School children are being encouraged to thumbscan for their lunches, and amusement park goers are being biometrically scanned upon entry for payment and identification purposes.We are constantly being told that the future is cashless, there are cashless lanes at the supermarket that move quicker and more efficiently, and with technology such as RFID we will receive a superior service at the price of being tracked, traced and having our personal data recorded at all times.Of course the cashless society would mean a massive boost in control and wealth for the globalist taxers and the banking corporations. With even more charges and levies on everything we spend and the ability to lend out more than even more than they already do, the banking elite would profit on an unprecedented level. Taxes would also be easier to collect electronically.The world has been expecting a global currency for over half a century now, and it is finally arriving, but not in the way it was expected. Economies are being "harmonized", in other words, taxes in all countries are being raised.NewsMax last year exposed the OECD's scheme to penalize countries that offer (comparatively) low taxes. Nations that cut taxes and thereby boost their economies are supposedly unfair to Europe's socialist welfare states.The argument is not that the welfare states should position themselves so as to be more competitive by also lowering their own tax rates. Rather it is the low-tax countries that are viewed as "unfair." Thus, everyone shares the misery, and the globalists profit to the max from a cashless society.-GoldiloxLooks like the main goal is to get kids use to a "bankster middleman" taking a piece of every single transaction as a "card fee".Private gold ownership sure doesn't work well in this scenario. Goldilox (1/28/06; 04:00:13MT - usagold.com msg#: 140943) Bank: No Loans For Seized Property http://prisonplanet.com/articles/january2006/270106loans.htm snip:BB&T, Washington D.C.'s second-largest bank, announced it won't lend money to developers who obtain land for commercial projects through eminent domain, according to a Washington Times story."The idea that a citizen's property can be taken by the government solely for private use is extremely misguided; in fact, it's just plain wrong!" said John Allison, the bank's chairman and chief executive officer in the article. Meanwhile, Chief Credit Officer Ken Chalk reportedly has admitted the North Carolina-based bank expects to lose only a tiny amount of business, but considers itself "obligated to take a stand on the issue."At this point no other large U.S. bank has taken such a policy step-GoldiloxMaybe this bank will resist gold confiscation along with property confiscation. mikal (1/28/06; 03:55:38MT - usagold.com msg#: 140942) Debt pieces and puzzles http://www.etherzone.com/2006/henr012606.shtml SHACKLEDBUT PLUNGING AHEAD ANYWAYBy: Ed Henry (Reprinted by permission)Snippit: "I have a friend who once described a "mess" as trying to put ten pounds of fresh doggie-do into a three pound bag. Today, this description fits almost anything the federal government tries to do. Let's look at some recent examples:The Medicare Prescription Drug plan: Years in the planning, this benefit once estimated to cost $600 billion is off to a rocky start. Only a few weeks old, people who can die without their drugs are finding it difficult if not impossible to get what previously was supplied through Medicare Insurance and they receive it only if they or their pharmacies can get through to a human who knows what he or she is doing. Instead of using the network that was already in place, the government set it up through private insurance companies that, like the news media, all claim that they offer "the best," just sign up with us. State agencies are running backwards in a forced effort to supply these drugs by working around this system and the entire plan merely reflects the federal government's inability to regulate the pharmaceutical industry. As one New Orleans welfare worker put it; "helping Katrina victims was a walk in the park compared to this mess." It would have worked better if lobbyists had handed our representatives drugs under the table.New Orleans: Blaming hurricane Katrina for the devastating floods in the Crescent City sidesteps the fact that the levees, the protection designed and operated by the federal government's Army Corps of Engineers, gave way during a storm that was less than these dikes were supposed to withstand. A storm whose "soft side" hit New Orleans and, in that region, was reported by NOAA as barely a Category Two. After President Bush promised to rebuild the city "better than ever" reconstruction has centered on clearing the debris and merely returning these levees to their original condition in hopes that NOLA won't experience another storm.Lost Pensions: Washington has made it more difficult for the average citizen to declare bankruptcy, but they've done little if anything to stop big business from using this "start-over" protection. Airlines, along with the supposedly impregnable Auto Industry and its suppliers, and just about any sizable business can curtail or weasel out of its promises of retirement benefits – often dropping responsibility on the government's Pension Benefit Guarantee Corporation (PBGC), an insurance program that is already $28 billion in the hole and never pays full benefits anyway. Whatever retirees eventually receive is left in the hands of taxpayers just as the government's own lavish retirement and health care plans for federal employees have been fraudulently set up to be covered by taxpayers without reduction or revision. In other words, if you want retirement securities go to work for the federal government, the largest employer in the country that keeps its promises with taxpayer dollars. The National Debt: Currently holding at just under the self-imposed and childish limit of $8.184 trillion until Congress again goes through its theatrical machinations about "fiscal responsibility" before raising the ceiling another trillion or so. This irresponsibility already has us at the mercy of foreign nations that are our competitors and former enemies – those that politicians call "investors." People who loan money to Washington so that our leaders can cover budgets planned a half trillion over expected income, conduct invasions, and buy the coalition of the willing. Social Security Reform: The granddaddy of all slush funds. At least one insurance program that actually works so well it produces a cash surplus for the federal government to waste on wars and other nefarious activities like bridges to nowhere. Probably the only healthy program in the federal basket and one that has never needed anything other than for the government to stop stealing its money. Instead, the Beltway Bandits have used this insurance program to set up a system of double taxation plus interest with the tools of fraudulent "trust funds" and bogus "special" Treasury securities. Ironically, although the government's idea of reform, based on false but believable fear stories, was just another overly complicated plan to get even more booty, but it was one of the few chances we had of bringing this scam out in the open. Now, even that has been set aside allowing the booty to continue. Last year resulted in $86.5 billion in "extra" cash for the pirates and the total now owed someday by the taxpaying public stands at more than $1.8 trillion. Future taxes that have already been paid once have been miraculously translated into more than 22 percent of the nation's debt, partly through "interest" that's been dumped into the account at no cost to the government. Just add more bogus bonds to the pile and increase future federal income. These are just some of the major messes that confront us today. Others include an open border policy that stands out..."At this stage, given that US consultation with foreign counterparties, investors and "allies" has already occurred numerous times, at Davos, G8 and G10 meetings, Bilderburg and elsewhere at various official levels, the current debt denial and debt "management" will have been seen as merely expedient to needed reform.A decision to take a different tack is certain toresult in noticeable, at times uncomfortable changes in lifestyles and routines.But like gold ownership, once established in private or public life, sensible policies and practices on balance reduce stress, resolve conflicts, open doors and invite opportunities previously barred and discouraged. Belgian (1/28/06; 03:47:41MT - usagold.com msg#: 140941) LAST POST : The Gold Change : Up until now "dollar-gold" was only allowed to fluctuate percentage-wise in function of the official dollar-price-inflation.Now, "euro-gold" will represent the permanent accumulation of wealth.Many sincere thanks to all who have contributed to my understanding of gold's future. All the best to all of you. Belgian. The Invisible Hand (1/28/06; 00:40:39MT - usagold.com msg#: 140940) Has anyone forgotten about this roundtable? http://www.teamliberty.net/id217.html Very quiet.In the meantime, here are somer snips January 27, 2006 – Has BUSH forgotten about the Iranian Bourse? That is a very good question. It would be an even better question if a reporter sitting in the White House Press Room asked it to White House Press Secretary, Scott McClellan. Unfortunately no member of the White House Press Corps has ever asked this question. Why not? The rest of the world seems to think it's an important question, so why isn't the mainstream media in the United States sniffing this story out like presidential seaman on a pretty blue dress? It is a disgrace that ABC, CBS, NBC, and Fox News are purposefully ignoring the story of the Iran Oil Bourse. It is shameful that Americans have to get Iran Oil Bourse news from sources such as Aljazeera and Gulf News. To understand why news sources in the United States are not reporting on the Iran Oil Bourse requires an understanding of how paper money is printed in the United States and who profits from the process. +So what do we do, now knowing what we now know? We must spread the word and relentlessly demand that our local newspapers cover this story for all that it is worth, for if we do not, wars and rumors of wars will persist at our expense. Americans must demand that 2006 candidates for U.S. Congress pledge to abolish the Federal Reserve System if elected or re-elected+The immediate security and stability of the United States is in your hands. Will you continue to rollover for the Federal Reserve Banking Cartel, or will you now rise up? +It's time for "We the People" to awaken, rise, and take back our currency and country. =="We the People", there is no such associationhttp://www.lysanderspooner.org/notreason.htmLysanmder Spooner "No Treason - The Constitution of No Authority" (SNT) SNT p.1They attempt to examine the origins of the state with little or no attention to its historic records and then try to justify and fortify it in the face of criticism and objection.SNT p.4No Treason: the Constitution of No Authority (written 1869, publ. 1870) Spooner 1808-87SNT p. 4-5Spooner pust the constitution to the test of contracts " on general principles of law and reason such as prevailed in public affairs and in the market place where he worked with people from day to day and concludes that it does not meet the basic criteria for contracts at all, and was not valid or binding on anyone.SNT p.23It is a general principle of law and reason that a written document binds no one until he has signed itSNT p.24And the document has been delivered to himSNT p.28A man is none the less a slave because he is allowed to choose a new master once in a term of yearsSNT p.32Secret ballot : no elected official knows who his principals (electors) are- he has no right to say he has anySNT p.34They have no means of knowing and cannot prove who their principals (as they call them) are individually and consequently cannot, in law or in reason, be said to have any principals at all.SNT p.39Politician can say "if you thought I was fool enough to allow you to keep yourselves concealed and use me as your tool for robbing other persons, you were wrong"SNT p.40People of the US – no such organization has been formed by an open, written, authentic and voluntary contract. 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