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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 12/28/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Flatliner (12/28/06; 23:56:00MT - usagold.com msg#: 150551)
@Thoreauly's banksters and freegold.
I guess I don't quite follow. Is there some irony in your words that I'm not quite seeing?

I do have to question the "Sound Money" reference. Words mean many different things to different people – as we can see that Sierra has a view that is pretty compelling.

Thanks.


Flatliner (12/28/06; 23:40:47MT - usagold.com msg#: 150550)
@Usul
http://www.usagold.com/hall/hallfame2.html
Thanks for all the "Easy Money" references in the archives. It was just the other day that I stepped within the Hall of Fame and read a wonderfully thought out piece about easy money. Thanks for taking the time.

Seeing that your posting was nearly 6 years ago, do you still feel the same way today? Or, has the passage of time helped you gather a new perspective?

I once thought, "Easy come, easy go" but now approach life with a little more caution.


Flatliner (12/28/06; 23:27:25MT - usagold.com msg#: 150549)
@TownCrier's WIN buttons
I wonder:

"The past 2-1/2 decades of dollar support and stability have come, not on the "mighty shoulders" of Volcker and Greenspan, but rather on the productive corners of the world who have been doing unthanked service in offering up their own goods and commodities cheaply and subsequently floating the U.S. indebtedness with their purchase of bonds using the dollars which they received in exchange for their precious tangibles -- i.e., raw commodities and finished goods."

TownCrier, If I may, the productive offerings of goods the world over has been under the influence of derivatives for the last least the last 2 ½ decades. The function of derivatives has created an environment that appears stable and fundamentally usable. Unfortunately, the function derivatives play is one of confidence and those that look at the insurance provided by derivatives no longer see any resemblance of truth. That system is quickly dissolving.

Derivatives are amazingly powerful as has been demonstrated by the strength of the US Dollar but the insurance that they provide is but a contract that can be broken or fulfilled with just another derivative.

Physical gold is not a derivative. When you write that gold "will be *allowed* to revalue appropriately…" I see this more as a demand for a functioning insurance policy more then a gift from someone like a central banker. Money that is diverted today towards derivatives, that work to strengthen the dollar, will find that when promises are broken, that money will buy real insurance – gold.



Sierra Madre (12/28/06; 22:42:19MT - usagold.com msg#: 150548)
Will there be an eventual return to SOUND MONEY?

I do think that there will be a return to sound money, eventually. But before it returns, there is something else that must happen first. Something very important and almost unthinkable at the present time.

The something that must happen before there is a possible return to sound money is: the disappearance, from the intellectual panorama of mankind, of the idea that democracy is a desireable political system.

The plain and presently unacceptable fact is that, democracy and sound money are incompatible. You can have one or the other, but not both at the same time.

Democracy relies on the majority of votes of a population, and human nature being what it is, votes will always go to the politicians promising most to the various sectors of the population. The politicians in democracies spend most of their time meticulously analyzing the various sectors to determine how they can most efficiently bribe the voters into giving them their votes. To attain success in politics and remain in politics they need MONEY.

Obviously, if the politicians must use sound money to bribe the populace, there will never be enough. Therefore, they MUST have artificial money - FIAT money - to hand out.

It's that simple. Democracy and Sound Money cannot go together. The voters want "benefits" and the politicians must have the funny money available to satisfy the voters and win their votes.

Sound Money - real gold and silver money - require a financial and monetary discipline which is impossible in Democracy.

Sound Money requires an authority which cannot be swayed by votes because it does not rely on votes to stay in power. Such an authority cannot be democratic.

Kings used to have this authority. We can very clearly perceive the connection between the fall of kingship and the rise of monetary and financial disorder. Of course, it is extremely politically incorrect to make this connection these days. But facts are facts, however inconvenient it may be to mention them.

So, gentlemen, do not expect to see the return of Sound Money in your lifetimes. That does not mean that gold and silver will not rise to unexpectedly (for some) high prices in terms of FIAT. That will certainly happen, and the time draws nearer every day. But, high prices for gold will NOT mean a return to sound money.

Democracy is a type of world-religion and religions die a very slow death - they take many centuries to die.

How democracy will fade from human consciousness and how authoritarian governments will arise, which will be imbued with a deep and firm sense of humane responsibility for the people, is something I cannot visualize. Authoritarian governments can be extremely cruel when there is no spiritual brake upon their actions. I do not know what sort of brake may come into existence, to once again set bounds to Authoritarian Power.

Until authority comes from the Top down, and not from the Bottom up, as supposedly it does at present, the world will not see Sound Money again.

SIERRA

Chris Powell (12/28/06; 20:44:00MT - usagold.com msg#: 150547)
Will the history of fiat money repeat itself?
http://www.gata.org/node/4667
Maybe we shouldn't wish for it too hard.

Thoreauly (12/28/06; 19:34:43MT - usagold.com msg#: 150546)
@ TC re the banksters and freegold
http://www.lewrockwell.com/orig/garris3.html

"They have a clever scheme up their sleeves -- the small hoards of gold that they have diligently retained (and in some cases quietly hidden or acquired) at suppressed prices all these years will be *allowed* to revalue appropriately in a "FREE GOLD MARKET" to such a high value that their balance sheets will be adequately compensated such that they can cope with the overdue value-destruction that is to visited upon the dollar."

I have wondered for some time now whether the banksters and their henchmen, knowing full well that the present system must collapse, are merely going to continue soaking it for what it's worth and then, with their golden parachutes, bail out at the last moment and thereby land softly in a truly New World Order -- i.e., one in which sound money will in fact prevail, as Time's "Person of the Year" comes to the fore at long last (see link) and the state, bereft of its main source of income, fades away.

If so, then one can seek one's revenge by front-running the bastards, precisely as you recommend, the better to position onself to help put their ill-gotten gains to productive use. After all, if they can't steal for a living, what alternative will they have?

TownCrier (12/28/06; 18:20:17MT - usagold.com msg#: 150545)
HEADLINE: Ford's WIN buttons not as successful as Greenspan...
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564865702377687014
WASHINGTON (AP) - Gerald R. Ford failed to ''Whip Inflation Now'' as his hapless WIN buttons proclaimed, but his presidency did provide a training ground for the ultimate inflation-tamer: Alan Greenspan.

The button appealed to the Republican Ford because it put the emphasis on fighting inflation through voluntary citizen action rather than a big government bureaucracy of price controls.

However, the buttons were a flop, endlessly lampooned by critics. Ford gave a series of speeches promoting his idea for voluntary efforts to control inflation such as having more Americans plant vegetable gardens, turn down their thermostats and carpool as a way of cutting down on energy use and helping to restrain prices.

Ford had the bad luck of serving as president during one of the worst economic decades in American history short of the Great Depression of the 1930s.

The country was being hit by successive oil price shocks which sent inflation soaring and economic growth tumbling. Economists used the word ''stagflation'' to describe the twin evils of stagnant job growth and surging inflation.

During Ford's time in the White House from August 1974 until January 1977, the country was faced with a serious recession, which pushed unemployment up to a high of 8.8 percent in June 1975, and severe inflation with consumer prices rising at the double-digit rate of 12.3 percent in 1974.

''Ford inherited probably the worst economy we have seen in the post World War II era,'' said David Wyss, chief economist at Standard & Poor's...

Inflation was not brought under control until Paul Volcker, selected as chairman of the Federal Reserve by Carter and re-nominated by Reagan, pushed interest rates up to the highest levels since the Civil War.

...Greenspan during his 18 years as Fed chairman developed an inflation-fighting reputation to rival that of Volcker. But one thing that did not change was his friendship with Ford, a relationship that was probably the closest of five presidents he worked for in government service.

''Jerry Ford was the most decent man I ever encountered in public life,'' Greenspan said in a statement after Ford's death this week. ''It was a great privilege to work for him. I will miss him.''

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

Charimen Greenspan and Volcker are both bright individuals, but neither deserve credit as inflation fighters any moreso than Ford deserves the blame for a rough economy.

Ford inherited an economy that was hitting the skids because the world was beginning to an adjustment in uncharted waters. The comfortably familiarity of the international gold standard under the post-WWII Bretton Woods treaty had recently been stomped under the boot of Nixon, and the whole world economic system began a series of shudders and ripples as it tried to ascertain what the fallout would be with regard to the international monetary system and, particularly, with regard to the value of its massive dollar-denominated reserves.

If Volcker gets credit for stopping the incidental inflation, and if Greenspan gets credit for maintaining it, it is only because those who bestow such accolades haven't completely worked out the truth of the matter. Volcker's term (and actions) simply coincided with the rest of the world's central bankers realizing -- after an astounding run-up in the price of gold from $35 to $850 -- that there was no 'Plan B', no safety net, to catch the world economy in the event that the dollar-based reserve currency system was allowed to be tattered and shredded any further than had just occurred.

The past 2-1/2 decades of dollar support and stability have come, not on the "mighty shoulders" of Volcker and Greenspan, but rather on the productive corners of the world who have been doing unthanked service in offering up their own goods and commodities cheaply and subsequently floating the U.S. indebtedness with their purchase of bonds using the dollars which they received in exchange for their precious tangibles -- i.e., raw commodities and finished goods.

This time of decades and paper dollar absorption was the international price necessary for a period of relative global stabilty in which a proper 'Plan B' sort of safety net could be woven together to deal with the 1970's dollar fallout that HAS YET TO BE RECKONED WITH.

This is what the seemingly remarkable creation of the eurosystem, among other remarkable geopolitical and economic items, has largely been about. That is, when viewed in isolation they make seem to defy common sense. However, when viewed as components of a larger objective under the high stakes of economic survival versus economic chaos, events begin to become clearer as they crystalize toward completion.

Importantly, the "mighty shoulders" of the central banks that have been straining in recent years to prop up their growing piles of U.S. dollars do not also carry with them a burden of fear that this value will be wholly lost upon the inevitable decades-in-the-making reckoning and devaluation of the dollar unit. They have a clever scheme up their sleeves -- the small hoards of gold that they have diligently retained (and in some cases quietly hidden or acquired) at suppressed prices all these years will be *allowed* to revalue appropriately in a "FREE GOLD MARKET" to such a high value that their balance sheets will be adequately compensates such that they can cope with the overdue value-destruction that is to visited upon the dollar.

For profiteering or merely for economic survival, can you afford NOT to have gold in your portfolio?

R.

USAGOLD Daily Market Report (12/28/06; 17:26:42MT - usagold.com msg#: 150544)
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The Daily Gold Market Report has been updated.

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THURSDAY Market Excerpts

December 28 (from Reuters) -- U.S. gold futures ended higher for a fourth straight session on Thursday as a weak dollar, Iran worries and geopolitical tension in the Middle East renewed interest from funds, with only one more trading day remaining for the year.

The COMEX February contract settled up $6.60 at $636.90. It traded between $629.20 and $638.20.

"You're getting some fresh year-end positioning in the gold. The funds are adding to positions. We had a pretty decent correction and lost some open interest as reported by the last Commodity Futures Trading Commission (CFTC) report," said A.G. Edwards commodities commentator James Quinn.

Carlos Perez-Santalla at Hudson River Futures said gold rose "in anticipation of further strengthening in the next couple of months" and on the weak dollar.

George Gero, senior vice president at RBC Capital Markets, said that year-end short covering and geopolitical news, including developments in the Middle East, continued to fuel gold's rally.

On Wednesday, Iran's parliament passed a bill obliging the government to "revise" its level of cooperation with the IAEA nuclear watchdog after the United Nations approved sanctions on Tehran.

Traders also said that news about the development of a single currency among the Gulf Arab countries could further undermine the dollar's strength. The Gulf Cooperation Council (GCC) countries - Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman - have long aimed to establish a single currency by 2010. All of their currencies are already pegged to the dollar.

On Friday, the New York Mercantile Exchange (NYMEX & COMEX) gold futures and options markets will close early, ending at 12:10 p.m., and remain closed on Monday for the New Year holiday. Trading will resume as usual on Tuesday.

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

mikal (12/28/06; 14:31:21MT - usagold.com msg#: 150543)
Rumor or evidence of state secrets?
http://www.voy.com/64855/
From another gold board today:
"From The Eagle -- Caper, 16:01:18 12/28/06 Thu
A currency expert on CNBC just said China has $1.4 trillion in foreign reserves
(CMH) Dec 28, 15:48
That's $400 billion more than the last official report.

That's $1,400,000,000,000.

The analyst/currency guy also said some of these foreign reserves will be converted into the euro AND SOME INTO GOLD. He repeated "...and some into gold.""

mikal (12/28/06; 14:21:27MT - usagold.com msg#: 150542)
Today's tricky magic vanishing act
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Federal Reserve Bank of NY
Temporary Open Market Operations for December 28, 2006
A little $18 Billion. Nothing to it.
Now lets see what's up, I mean hap'nin in the news today,
Billary and Obama, Prince Charles and and ... ;)

TownCrier (12/28/06; 14:06:32MT - usagold.com msg#: 150541)
Gold to end up for sixth year running
http://www.mg.co.za/articlePage.aspx?articleid=294628&area=/breaking_news/breaking_news__business/
28 December 2006 -- Although gold has struggled to recoup its momentum after soaring to a 26-year high of $730/oz in May, a medium term view shows the metal is still trading about $100/oz more than it was a year ago and has outdone many expert forecasts made at that time.

Over the three-year period between 1999 and 2001, the gold price averaged a meagre $271/oz, but in May of the latter year, the bear market ended and the bull market began...

The bull market has not stopped and earlier this year, the gold price touched $730.30/oz, almost three times the $254.75/oz it bottomed at in April 2001, immediately preceding the bull trend.

GFMS has since returned with an update to its latest survey, saying that gold would trump these levels again. First it said this would happen by the end of this year, but has since prolonged the occurrence to the first quarter of 2007.

According to research earlier this year, GFMS points out that investors have been buying gold for its impressive performance compared to stocks and bonds.

"The rally of the last few months of 2005 in particular seems to have eradicated any residual 'anti-gold' sentiment that had been lingering since the 1990s, when a disappointing price performance had taken gold off the radar screen of most investors," said GFMS.

The introduction of the gold ETF, has been a key feature of this gold bull trend, and the global holding of this product, has been named the 'People's Central Bank', a phrase coined by David Davis, gold analyst at Andisa Securities.

"Over the five years from 2001 through 2005 investors have added 194,5-million ounces (5 514 tonnes) of gold to their collective coffers, to the point in early 2006 where private investors now own more gold than the governments of the world," said New York based consultancy, CPM in its annual survey earlier this year.

Investors are flocking to the yellow metal for a number of reasons, according to CPM.

...These factors have not waned, and some economists still expect a considerable weakness in the dollar, as long as the US's massive trade deficits remain.

Standard Bank of London says that while gold is hovering around $620/oz at the moment, its uptrend is expected to continue from early next year.

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

Have you taken steps yet to prudently diversify your portfolio with an adequate quantity of portable property -- gold?

The brokers at USAGOLD-Centennial Precious Metals, Inc. can help you get your New Year started on the right foot.

Toll Free -- 1-800-869-5115

R.

Topaz (12/28/06; 13:58:48MT - usagold.com msg#: 150540)
alt-PoG.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=
The current all-currency uptick, spurred on no doubt by Randys compadres in India and China, (see below) looks to have a bit of "legs".

The nascent spread we're seeing (on the Chart) could well go on to mimic that wonderous off-delivery cross over of Sept '05.

Bling it on sahib!

TownCrier (12/28/06; 13:46:37MT - usagold.com msg#: 150539)
Voracious Chinese and Indian demand keeps the bulls charging
http://www.ft.com/cms/s/c416f7f2-9617-11db-9976-0000779e2340.html
(FT) December 28 2006 -- Commodity markets have posted a fifth year of gains in 2006. Next year, many analysts are tipping a sixth year of gains, providing support for the case that commodities have seen a structural shift in pricing rather than just cyclical recovery.

With global industrial production expected to continue to expand at above-average rates, analysts are looking to another year of relatively strong prices in 2007...

"...fall in demand for raw materials in the US will be more than offset by the increase in demand from China, India, Russia and Brazil," says Robin Bhar, metals strategist at UBS. China is the world's largest user of steel, cement, copper, aluminium and zinc, and is the second largest oil consumer.

"The fact that growth in the developing world will offset the decline in demand from the US represents a turning point for commodity markets, which have been historically tied to the expansion and contraction in the US economy," Mr Bhar says.

"We expect oil prices to rebound to over $70 per barrel in 2007," said Barclays Capital...

...demand conditions in the oil market suggested a much tighter market than is currently priced in.

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

Would anyone like to say, "Ditto gold,"...

R.

mikal (12/28/06; 13:38:02MT - usagold.com msg#: 150538)
@Goldendome
http://www.prudentbear.com/articles/show/79
Re: msg#150531 - More on your on-mark points about asset bubbles, liquidity and debt issuance- Doug Noland responds to a recent Wall Street Journal commentary by Bear Stearns chief economist:
Credit Bubble Bulletin - Embrace the Deficit? by Doug Noland
December 27, 2006 -- Excerpt: Mr. Malpass: "Supporting the ‘solid-growth’ view are rising global stock markets, strong growth of corporate profits, the narrow credit spread between Treasurys and riskier bonds, and low interest rates relative to inflation and to growth…"

My comment: I am aware of very few indicators – certainly including exuberant global equity and debt markets, booming corporate profits, and meager little Credit spreads – that are not consistent with the view of rampant global liquidity excesses.

Mr. Malpass: "The trade deficit and a low ‘personal savings rate’ are key parts of the bond market's multi-year pessimism about the U.S. growth outlook."

My comment: It is disconnected analysis to subscribe "multi-year pessimism" to bond prices, when booming equities and shrinking risk premiums are distinctly non-pessimistic. Credit, liquidity and speculative excess explain inflating asset prices without analytical conflict.

Mr. Malpass: "Like young households, many companies also spend more than they produce, using bonds and bank loans, some from foreigners, to make up the difference. They add employees, machines, supplies and advertising before they produce. Growing corporations are expected to be cash hungry. This leverage is treated as a positive for companies but a negative for countries, a key inconsistency in popular economics."
My comment: This protracted Credit Bubble would be much less perilous if our nation was expanding debt to finance sound investment. Or, if our mounting foreign borrowings were funding wealth-creating capacity – providing the ability at some point to satisfy our debt obligations with valued goods or services, or at least significantly reduce the scope of future deficits through the exchange of goods for goods – our current standard of living would not be so susceptible to the whims and fragilities of finance and global financial markets. Instead, we are the subprime borrower living beyond our means, yet for now luxuriating in our competitive advantage in issuing AAA securities in exchange for endless imports. These days, the vast majority of new debt liabilities issued to our foreign creditors are collateralized by inflated asset market prices (chiefly real estate and securities). This creates a Ponzi Bubble Dynamic where the perceived soundness of the underlying debt issued is dependent upon unrelenting Credit and Speculative excess (and resulting asset inflation).

Mr. Malpass: "While the net foreign debt of the U.S. is growing (the result of capital inflows), household net worth is growing faster, meaning foreigners are investing in the U.S. too slowly and conservatively to keep up with our growth. Their capital mingles with domestic savings, providing $2.7 trillion of net international capital to combine with $27 trillion in net U.S. household financial savings as of Sept. 30."

My comment: This is especially shaky analysis. U.S. household net worth has been expanding rapidly owing to Credit-induced home price and securities markets (price and volume) inflation. The $2.7 Trillion of debt instruments we have created to pay for imports is no more "capital" in the traditional meaning of the term than the $27 Trillion of debt held by households is national "savings." Our economy consumes more than it produces, financing this deficit through the endless inflation of additional debt instruments. Wall Street can stick with the fanciful tale that our Trade Deficits are instigated by "capital" inflows. It is, however, clearly a case of Credit excesses fostering over-consumption and mal-investment, creating progressively unwieldy dollar liquidity outflows to the world (that, by their nature, must be recycled back to U.S. debt instruments).

Mr. Malpass: "The already-large foreign demand for investments in the U.S. is likely to grow from here, putting upward pressure on the trade deficit even if foreign growth continues to accelerate. The U.S. offers a relatively high and steady return on investment -- high because of the innovation and growth taking place here…"

My comment: Well, it is a safe bet that Trade Deficits will grow until our foreign Creditors and/or global markets impose some discipline on our Credit system. Foreign (largely dollar) reserves have increased more than $750 billion this year, placing the bullish notion of insatiable demand for (private-sector) U.S. investment on rather suspect analytical footing. The necessity of foreign central bank operations (after receiving dollar instruments from their domestic companies and financial institutions) to recycle massive U.S. Current Account and investment/speculative flow imbalances governs the unparalleled "official" accumulation of U.S. debt instruments. This should certainly not be analyzed in terms of a positive U.S. "investment" backdrop nor should the interest payments monetized (added on to existing debt obligations) be confused with the concept of "return on investment." The U.S. Economic Sphere is in a seemingly permanent deficit position, one accommodated until it isn't by Financial Sphere Credit Inflation and foreign "official" recycling operations."
Mikal-- This is as illuminating and far-reaching an exchange on these subjects as the best out there. The implications for gold seem to me much more clear and concrete than the prospect for the living standards of many people, just as gold's promise stands in sharp relief to the future's uncertainty and potential for danger and treachery.

TownCrier (12/28/06; 13:33:46MT - usagold.com msg#: 150537)
N.Korea sold gold to Thailand before sanctions
http://www.swissinfo.org/eng/international/ticker/detail/N_Korea_sold_gold_to_Thailand_before_sanctions.html?siteSect=143&sid=7386874&cKey=1167286148000
BANGKOK (Reuters) - North Korea sold 1.3 tonnes of gold to Thailand a few months before the United Nations slapped international sanctions on Pyongyang in October, according to Thai customs data.

Thailand paid the reclusive communist state a total of 1.03 billion baht ($28 million) for 500 kg of gold in April and 800 kg in May, the Customs Department said.

Foreign Ministry spokesman Kitti Wasinondh said ... "The deals were done before the sanctions were imposed. Even if we import them now, it is still legal."

Thailand, a major jewellery maker, imported nearly 80 tonnes of gold from 22 countries in the first 11 months of 2006, according to the Customs Department.

But traders say gold purchases from North Korea are rare.

"These orders might have been just a one-off purchase by one firm," said an official from the Thai Gold Traders Association.

"Thai traders don't usually import gold from North Korea because it is a communist country with so many unpredictable factors," said the official who declined to be named.

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

R.

mikal (12/28/06; 13:09:22MT - usagold.com msg#: 150536)
Broad $ index fall down go boom
http://www.jsmineset.com/cwsimages/Miscfiles/3989_Chart_for_12-27-2006.pdf
Broad Dollar Index
1997 - Present | Dan Norcini | 12/27


mikal (12/28/06; 12:50:16MT - usagold.com msg#: 150535)
Another potential flashpoint- what's at stake in all of C.Asia
http://www.fmnn.com/WorldNews.asp?nid=30127
OUR NEXT BIG MESS
Thursday, December 28, 2006 - FreeMarketNews.com
LINKED NEWS ANALYSIS
"Chances are that you heard more about Rosie O'Donnell's flame war with Donald Trump than the passing of Sapamurat "Turkmenbashi" Niyazov. As seems to occur with increasing frequency, America's media ignored the most important story of the year. A handful of news outlets that bothered to cover the 66-year-old dictator's death wallowed in the humor inherent in the extravagant personality cult he built up after Turkmenistan gained independence from the Soviet Union in 1991."


Goldendome (12/28/06; 11:00:26MT - usagold.com msg#: 150534)
Mineral's silver dollar
"There is a new dollar comming out in Febuary, to bad it's not going to be solid silver."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Yes, and at today's silver prices it would be nearly identical in size to the pre-65 dimes! Much easier to carry than the older cartwheels.

Goldilox (12/28/06; 09:48:33MT - usagold.com msg#: 150532)
FOREX
http://www.netdania.com/QuoteList.asp
It looks like the Yen is once again the FOREX "whipping boy" to keep the USDX up. Euro and pound sterlig continue to climb back toward pre-holiday levels.

Goldendome (12/28/06; 00:52:08MT - usagold.com msg#: 150531)
Inflation not savings are fueling the bubbles.

From Pearlstein article: "...If the United States were almost any other country, we wouldn't be able to sustain this huge imbalance for very long because the rest of the world would be unwilling to finance it. But, as it happens, developing nations suddenly have more savings than they know what to do with, much of it denominated in dollars as a result of selling us inexpensive clothing and electronics and very expensive oil."
----------------------------------------------------
The first portion here is largely true, after that--I doubt much.
What we have here is in reality a large worldwide inflationary liquidity bubble--Reinforced by the credit creation of foreign central banks. I doubt the contention that it is "more savings than they know what to do with", that is leading to the purchase of all our U.S. securities at all levels.
The U.S. dollars are being borrowed into existence then fractionalized nearly endlessly. The dollars ending up over seas, rather than being sold in the open market for local currency (that would result in driving up interest rates in the U.S and limit money supply -and strengthen foreign currencies) are instead being sterilized by credit creation in Asia (largely). So, the Asian country simply creates more of it's own currency to buy the dollars from holders thus inflating their own currencies. The Cb's then use the dollars to buy U.S. securities-- again assisting to hold down U.S. interest rates and to fuel our asset booms. The holders of their own local currencies may invest in their own country leading to over investment and price inflation locally or again--may invest in U.S. securities for higher return, as their local securities are often held at such low rates (Japan). All benefits the U.S. and in turn the Asians, by shifting of jobs overseas and creating employment that helps to keep their populations moving upscale--But savings has little to do with any of this, its all primarily inflationary created central bank liquidity--worldwide.




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