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ARCHIVED DISCUSSION FROM 6/28/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

The Invisible Hand (6/28/06; 23:38:35MT - usagold.com msg#: 145659)
Prospects of the dollar as oil currency
http://en.rian.ru/analysis/20060627/50549408.html
SNIPS
Iran may be planning to open an exchange or bourse, but it will merely provide traders with indicative quotes, and the volume of sales moving through it will be very small. Moreover, any exchange mostly deals with contracts rather than real supplies
+
At the same time, Russia's desire to join the club of reformers points to a steady trend towards revising the current system of quotes and payments on the oil market. The dollar monopoly no longer seems unassailable. If oil starts to be traded in other currencies, the dollar's dominance will end.

Chris Powell (6/28/06; 23:15:29MT - usagold.com msg#: 145658)
Now he tells us: U.S. Treasuries are actually junk, Summers says
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/21/AR2006062101740.html?sub=AR
Advice to Invest Less in U.S. Bonds

Foreigners Can Do Better, Summers Says

By Paul Blustein
Washington Post
Thursday, June 22, 2006

A former U.S. Treasury secretary is advising some of the world's biggest holders of U.S. Treasury bonds that they ought to find much better ways to invest their money.

Lawrence H. Summers, who headed the Treasury in the last 18 months of the Clinton administration, has argued in recent speeches that developing countries in Asia, Eastern Europe, Latin America, and Africa should put much of their excess funds into stocks. Too often, he contends, the central banks of those countries invest their hoards of foreign securities -- now totaling several trillion dollars -- in safe but low-yielding U.S. Treasurys.

The return "will be zero" on those Treasurys after inflation and currency changes are factored in, Summers said in a lecture last week at the Center for Global Development, a Washington think tank. Meanwhile, he said, the developing countries are passing up much more lucrative investments -- "this, in societies where hundreds of millions of people are still desperately poor." In another speech, this one in Bombay a few weeks ago, he said, "It is striking to estimate the cost to developing countries" of their Treasury-heavy portfolios.

Given Summers's previous job as the official with chief responsibility for financing the U.S. government, there is an obvious paradox in his suggesting that any central bank disinvest in U.S. securities. In a telephone interview yesterday, he said he saw no incongruity in his position, because he is not urging wholesale dumping. He said central banks around the world must keep "large volumes" of their money in super-safe assets such as Treasury bills. And "any diversification" into riskier investments such as stocks "is not likely to be rapid, in ways that would affect" the Treasury's ability to borrow at affordable interest rates, he said.

Summers, who announced in February that he will step down as president of Harvard University, is known for his impolitic remarks -- a famous example being his suggestion that "intrinsic aptitude" could explain why fewer women than men have excelled in science and math. So his argument against Treasurys might seem to be just another case of his penchant for flippancy.

But Summers has developed an elaborate rationale for his proposal, and he still commands attention in policymaking circles. The World Bank, where Summers once was chief economist, has shown considerable interest in the idea.

Summers's proposal is based on fundamental shifts in the global financial system that arose well after he left office -- in particular, an immense buildup in the reserves of foreign exchange held by developing countries' central banks. Those reserves have grown as the United States, with its burgeoning trade deficit, imports goods from abroad.

The dollars Americans spend on foreign products eventually end up in the hands of central banks overseas, and the central banks invest the proceeds largely in U.S. government securities. They do so in part because they want to protect themselves against financial crises of the sort that struck Thailand, Indonesia, South Korea, Russia, Brazil, and Argentina a few years ago.

For a developing country, accumulating a big war chest of dollars can help discourage speculators from trying to drive down the value of its currency.

But the upshot, in Summers's view, is "the central, global financial irony of our times": Countries that need capital to finance rapid development are shipping more money to the United States than is flowing in the opposite direction -- and it is their official policies to do so.

Suppose, he said in his lecture, "you were on Mars, and you had not seen planet Earth, but you had studied economics, and someone said there are these substantial number of countries that are growing at 4, 5, 6, 8, 10 percent a year that are relatively poor, and there are these other countries that are rich, aging, growing at 2 percent a year, 3 percent a year, 4 percent a year perhaps, with slowly growing populations."

Although such a Martian economist would assume otherwise, "the flow of capital is actually very substantially from poor countries to rich countries, and in particular it is from poor countries to the world's richest and most powerful nations -- on a scale never before contemplated or seen."

Moreover, Summers said, the chief explanation is not "capital flight," in which wealthy foreigners in unstable countries park their savings in the safe haven of a U.S. bank account. Rather, it is the collective decisions of central bankers as dollars roll into their reserves from the export of goods to the U.S. market.

But the reserves that have piled up, Summers said, are "far in excess of what is necessary" to defend against a crisis -- probably more than $2 trillion too much, he estimated, based on the most commonly used guidelines. Moreover, "no one could suppose that these are going to be high-return investments," because the interest rates on U.S. Treasurys are about 2 percent after inflation, and for developing countries even that paltry yield would be wiped out if -- as many analysts expect -- the dollar declines against other currencies.

The phenomenon is occurring not only in countries such as China that are well known for amassing vast quantities of Treasurys, but also in many poor countries that, while holding much smaller amounts than China, still hold sums that are sizable relative to their gross domestic products. Algeria, for example, has about $50 billion in what Summers calls "excess reserves," which is about half of its GDP. A few countries, such as Singapore, have already begun using their reserves much more creatively, Summers noted.

Summers acknowledged several problems with his proposal, such as the danger that central bankers would start gambling with their reserves by putting them into even more risky investments than stocks.

But he pointed out that at an annual return of 5 percent -- a conservative estimate for the long-run yield on a sensible stock portfolio -- the $2 trillion in excess reserves could produce average annual yields of about $100 billion. That is more than all the rich countries in the world spend on foreign aid to poorer countries each year.

Therein lies potential, he said, for realizing economists' fondest wish: "an almost free lunch."


Chris Powell (6/28/06; 22:50:58MT - usagold.com msg#: 145657)
Goldman seeks stake in India's commodities and derivatives exchange
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060629:MTFH70550_2006-06-29_04-27-02_BMA004346&type=comktNews&rpc=44
From Reuters
Thursday, June 29, 2006

MUMBAI -- Investment bank Goldman Sachs is in talks to
buy up to 10 percent of India's National Commodity &
Derivatives Exchange, a source close to the
development said on Thursday.

"The negotiations are in an advanced stage. I would
not be surprised if a formal announcement of the deal
comes out in the next 48 hours," he said. "ICICI would
be selling between 5-10 percent."

ICICI Bank Ltd., India's second-largest lender, holds
about 15 percent in the unlisted commodity exchange.

An ICICI spokesman declined comment, while Goldman
Sachs could not be immediately reached.


Gold Hill (6/28/06; 22:07:58MT - usagold.com msg#: 145656)
MK
I have not seen any posters giving you credit for your quotes and promotion of usagold.com in the June 22 issue of USA TODAY. As a long time lurker at this site, when I read the article and saw your name I said to myself I know that guy!!
Keep up the good work. National press is a good thing!!
Just a joe-six-pack.
Gold Hill

spikedog (6/28/06; 20:03:15MT - usagold.com msg#: 145655)
Re: Gold Finger - how I measure wealth
I measure wealth in terms of options.

Wealth allows you to pursue your dreams or open up otherwise unavailable choices in life. If your dream is to open a corner lemonade stand and you have $200 to open it, then you would be wealthy. However, if your dream is to start a new restaurant and you have $200, well..... So, I suppose that wealth is also relative and does not mean the same thing to different people; or even the same thing to the same person at different times.

An interesting perspective on the lemonade stand: if you wish to open one and you have $2,000,000 are you more wealthy than if you had only $200? How relevant is the additional $1,999,800?

Wealth does not necessarily mean BMWs, mansions, and Rolexes - unless those sort of things are important to you; of course, the downside is that this can become a trap of pursuing the latest bauble du jour, requiring more and more resources and a feeling of never really having enough - which would feel decidedly un-wealthy.

Disclaimer: Examples using dollars are for convenience only and not intended to denote any real value.

FWIW,
spikedog

Topaz (6/28/06; 18:57:32MT - usagold.com msg#: 145654)
@PA 30/6.
http://www.crbtrader.com/data/default.asp?page=quote&sym=SIH6&mode=d
Yup, sorry mate, we (ozzies) write it back to front.
As of today, with 20,000 contracts still in the chamber (ref: link), we look to have a decent old delivery tally in July Ag to look forward to.
May, from memory was 12K (60,000,000 contract equivalent Oz's Ag and 3 times the average) on top of the 100T Au for June (again 3 times more than normal) ...I can't see this finishing at all well PA.
Pity the bloke that tracks Oil Tankers and their Cargoes can't extend the service to Brinks Trucks ...I'd subscribe ;-)

EarlHickey (6/28/06; 18:54:53MT - usagold.com msg#: 145653)
$50 a Barrel Oil Rejected by George Bush
March 28th 2006 Hugo Chavez made President Bush an offer no one can refuse. But currishly George did. The offer? $50 a barrel oil at a fixed price for years into the future!!

How could Venezuela make such an offer, and why??
Well according to the U.S. Department of Energy (or as the Mogambo would say) the DOE estimates that Venezuela has five times the Saudis' reserves.

So why would Chavez sell it for $50 a barrel??
Because the oil is Extra Heavy Crude. It's like asphalt, very thick. To make a profit they need oil to be over $30 a barrel. With oil being $18 a barrel just six years ago, investors are nervous investing in this extra heavy crude. Also because investors also know this is Venezuela and if you have stock in KRY you know what IM talking about.

So why is Bush not jumping on this great opportunity with good old American technology and fiat??
Because this would mean the decline of the house of Saud! And The Federal Reserve would not like that at all. It all comes down to petro-dollars. Saudi Arabia has, over the past 30 years kindly recycled the cash from America and put it into U.S. Treasury bills, U.S. stocks and other assets to help fund the 9 trillion national debt. In turn they own the U.S. Military
Chavez would NOT put this money back into the U.S. but would put it in S. American investments, helping the poor.
Something the rich and U.S. Goverment cannot understand.
Earl Hickey ;>)





Sundeck (6/28/06; 18:41:07MT - usagold.com msg#: 145652)
Energy
Here are a couple of sites (not necessarily definitive) related to the energy balance of ethanol production and alternative energies in general...

http://journeytoforever.org/ethanol_energy.html

http://reslab.com.au/resfiles.html

:-)

GOLD FINGER (6/28/06; 18:38:18MT - usagold.com msg#: 145651)
How do YOU measure wealth?

I would like to believe that living in the land of the free and the brave that we would all be entitled to the same equal opportunities to education, life styles, health care and other comforts of a modern democratic society.

I did say democratic and not a socialistic society. Raised here under the capitalist umbrella I have yet to see any such true offerings. Instead I see more greed and more "I want". I am not against competition, however, lets make it fair. The playing field here has never been level or equal. Each citizen is asked to support the elected government and do your part to make a better society. Yet, I fail to see any of this even with our most notable liberals. It appears to me that with all our "HAVES" in this country we are reaching a point in time where we may eventually have NOT!

The fact that our one trillion deficit is here and inflation is rampant along with most of the world hating Americans leaves me wondering how is it that we can feel so good about what we actually have. In a snap the luxurious SUV'S could be wiped away along with the oversized houses and all other earthly possessions.

Acts of nature like Katrina gave us this example. But what if it was not a natural act of nature. What if it was something man created to harm another man. This was evident with the twin towers and other places.

Some of my views come from an experience I had when I was over sea's. Modestly dressed so I would blend in I was still caught off guard when I was pegged as an over indulgent American. Is this the view others have of us I wondered? Do they really think all we want to do is eat up all the oil and gourmet food items and get big and fat and dress in Bermuda shorts?

Do they really think all we want from foreigners is their cheep labor to assist us in house cleaning? At what COST did this perception come or WILL COME? The rich man should never have to flaunt his luxury SUV'S or for that matter even own one.

So this brings me to my question on WEALTH. How do you measure wealth? Is it with the new luxury car in your garage and by the big home? Is it by the most education? Or is it by the safe containing the gold you've begun to collect? Perhaps if others would flaunt it less maybe others would look at us differently. Just wondering if more humility would be better in God's Country!!

Happy Independence Day~
Buy Buy~

Paper Avalanche (6/28/06; 18:29:57MT - usagold.com msg#: 145650)
@ Topaz
Per your post:

Silver is on the launch-pad and will take PoG with it on the Baton-change 30/6

What is the baton change? Is 30/6 June 30th?

Thanks!
PA

arbyh (6/28/06; 18:11:49MT - usagold.com msg#: 145649)
Still Short
http://news.silverseek.com/TedButler/1151433105.php
-- Posted 27 June, 2006
"I hope there is no doubt in anyone's mind why silver sold off more than 5 dollars in a month. It was not accidental, but rather a deliberate effort by the big COMEX shorts to frighten and shake out as many leveraged longs as possible."

Basically top 4 are way over shorted in silver and letters sent to FOREX and xongress to resolve this.

Chris Powell (6/28/06; 17:22:29MT - usagold.com msg#: 145648)
That'll freak the Fed: 7 more miners to pay for jewelry ads
http://www.gold.org/pr_archive/pdf/new_members_pr_280606.pdf
World Gold Council Welcomes 7 New Members

WGC Press Release
Wednesday, June 28, 2006

The World Gold Council (WGC), the marketing
organisation funded by the world's leading gold mining
companies, is pleased to announce that Agnico-Eagle
Mines, Cambior, Coeur D'Alene Mines, Eldorado Gold
Corp., Goldcorp, IAMGold, and Kinross have joined the
WGC, which now represents 24 companies and around 38
percent of total world gold production.

The new members represent an increase of 17 percent in
production terms for the WGC and around 5 percent of
total world gold production.

Today's announcement will benefit the entire gold
industry, with increased funding available to the WGC
to develop and implement its gold marketing programmes
internationally.

Founded in 1987, the aim of the World Gold Council is
to stimulate and maximise the demand for and holding
of gold by consumers, investors, industry, and the
official sector. As well as undertaking marketing
initiatives to drive demand, the World Gold Council is
also instrumental in working to lower regulatory
barriers to the widespread ownership of gold products,
helping to develop distribution systems, and promoting
the role of gold as a reserve asset in the official
sector.

Pierre Lassonde, chairman of the World Gold Council
and president of Newmont Mining Corp., one of the
world's largest gold producers, commented:

"It's with great pleasure that we are welcoming today
the addition of seven new members to the World Gold
Council. By joining the WGC these gold producers
recognise the significant value created for the entire
industry in the last three years, through both its
marketing efforts and investment product creation. We
look forward to welcoming even more new members in the
months ahead, as we hope that all producers take the
responsibilities of our industry to heart.

"The past three years have been excellent for the gold
industry as the price of gold has more than doubled
from its secular low. The WGC has without a doubt made
a significant contribution to this success. The
creation of the first exchange-traded gold fund has
been a phenomenal success, with close to 500 tonnes of
gold taken up by investors in approximately 18 months.
This is the most significant new gold product to ever
come to the market. We plan to expand the reach of
this product by listing it on multiple stock
exchanges.

"The council has never been in a better position to
aggressively expand gold's market share of the luxury
goods business as well as its pre-eminent investment
role. Over the past three years the WGC have played a
major role in successfully reversing a period of
declining demand in key gold jewelry markets. In 2005
gold jewellery demand rose 17 percent in value terms
in markets where we've conducted promotional
campaigns, compared to only 7 percent in non-promoted
regions. With the contribution of our new members and
the addition of future members, we can solidify demand
for the benefit of all."

Topaz (6/28/06; 17:08:49MT - usagold.com msg#: 145647)
Get up ya sissy!
http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOW
The inflation systemics have managed to reverse yield and keep Buck from migrating too much higher, thus PoG is struggling a bit here. We do get glimpses of what might transpire when this gets away on them ...but it sure ain't pretty!
Thats the biggest problem with Futures-derived pricing, it gives a false impression of the Here'n Now.
Silver is on the launch-pad and will take PoG with it on the Baton-change 30/6 ..."move over Bee-otch, or hang on for the ride".

Chris Powell (6/28/06; 16:10:35MT - usagold.com msg#: 145646)
On TV in Canada, GATA chairman cites specifics of gold price suppression
http://www.robtv.com/shows/past_archive.tv
5:42p ET Wednesday, June 28, 2006

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy was interviewed for about
five minutes today on ROB-TV in Canada, enough time
for him to cite a few public-record specifics about
the gold price suppression scheme. While the beginning
of the interview seems to have been cut off, you can
watch most of the interview for a week at the ROB-TV
archive here:

http://www.robtv.com/shows/past_archive.tv

Murphy's segment is under the Wednesday listings at
11:40 a.m.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Goldilox (6/28/06; 16:01:48MT - usagold.com msg#: 145645)
Are you feeling more protected, Mr. Investor?
http://www.elliottwave.com/features/default.aspx?cat=mw*aid=2479*time=pm
snip:

Perhaps you remember the Sarbanes-Oxley Act (SOA).

Congress passed the SOA on your behalf, dear investor, back in July 2002. Bad Stuff was happening on Wall Street, in corporate boardrooms -- and elsewhere -- so somebody had to "do something." Its stated purpose was to "protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws..."

In truth, the accountants and attorneys who labor in the securities field are the main beneficiaries of the SOA, in the sense that they likely consider it a full employment act. Most estimates were that S&P-500 size firms had to pay triple the fees to outside auditors.


One could say that the SOA has stopped some stuff from happening, but that's an argument from silence. As for what the SOA hasn't stopped, here's a (very, very) short list:

The massive scandal at Fannie Mae that continued into 2003-04, which included shifting losses that allowed top executives to qualify for bonuses. The firm's CEO earned some $11 million in 2003, while Fannie's share price fell nearly 50% in 2004-05.
Royal Dutch Shell's overstatement of its oil reserves in 2003 (and earlier), to the tune of 20% of its total holdings.

The "widespread" practice of "backdating" among business executives over the past decade, whereby their annual grant of stock options just so happen to consistently fall on days when share prices reached conspicuous lows; the WSJ said the odds of this happening by chance were about 1 in 300 billion.
There are many other examples, but I'll stick with the one that's in the news this week -- namely the former SEC attorney who told the Senate today that he was "abruptly fired" last year, "as he was investigating allegations of insider trading by Pequot Capital Management, one of the nation's largest hedge funds."

The government cannot protect you as well as you can protect yourself. You're on your own -- yet that's not a bad place to be. Who is the best guardian of your finances? YOU ARE.

-Goldilox

After sponsoring a SarbOx conference in Feb, all news and hype at this desk has seemingly dried up. I guess it was good for a media blast, and as suggested, a re-employment act for financial accountants.

Clink! (6/28/06; 15:39:49MT - usagold.com msg#: 145644)
@ Goldilox
That sounds familiar - I guess my well-heeled redneck neighbor must be getting to me more than I realised !!!
C!

TownCrier (6/28/06; 15:34:54MT - usagold.com msg#: 145643)
United States absent from Saudi economic boom
http://dallas.bizjournals.com/dallas/stories/2006/06/26/daily25.html
Dallas Business Journal -- Despite the close ties between Saudi Arabia and the United States, American companies are failing to take advantage of Saudi's economic boom, Abdullah Alireza, Saudi Arabia's Minister of State, said Wednesday...


"There is not a single American bank in Saudi Arabia," Alireza said. "We have all the [other] foreign banks in Saudi Arabia."

Although the United States remains Saudi Arabia's main trading partner, that trend may not continue, said Salleh Eid Al-Husseini, a member of the Saudi delegation visiting Dallas.

As countries like China and India continue to grow and demand more oil, they are working to secure closer relationships with the Saudis...

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

USAGOLD Daily Market Report (6/28/06; 15:02:18MT - usagold.com msg#: 145642)
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

June 28 (from Reuters) -- COMEX gold futures finished lower Wednesday in ongoing choppy trade ahead of Thursday's U.S. Federal Open Market Committee decision about how much higher to raise interest rates and before a U.S. holiday.

The August contract fell $3.40 to conclude at $581 after trading between $589.40 and $579.10.

Players were reluctant to fortify positions in gold before the Fed meeting and any resulting word on future rate plans, dealers said.

Additionally, traders have started squaring their books before New York futures shut early on Friday and remain closed Monday and Tuesday for the U.S. Independence Day holiday.

The Fed's decision was expected to be announced on Thursday at around 2:15 p.m. at the end of its two-day talks. The interbank overnight fed funds rate was widely expected to be raised to 5.25 percent from 5.00 percent, which would mark the 17th straight hike in the benchmark lending rate. "We are waiting for the Fed to increase (rates). The market may be treading water until tomorrow afternoon," said George Gero, vice president at RBC Capital Markets Global Futures.

Some analysts have said gold fever rages on despite the metal's 24 percent jump in a month to 26-year highs in May, followed by an even faster retreat.

Many see bullion regaining last month's peak of $730 an ounce, after consolidating a while, and reaching the all-time high of $850 in the coming years.

Supportive factors cited were a weak dollar outlook, fund diversification into metals, safe-haven buying amid geopolitical unease, inflation fears and stagnant mine supply.

"The fundamentals that brought the investors in and made it attractive have not diminished," said New York-based Paul McLeod, vice president of precious metals at Commerzbank.

"After we get through the summer, which is traditionally a quiet period for metals, we will see the reemergence of the buying interest from investors."

COMEX gold found its footing around $550 two weeks ago, after tumbling from a 26-year peak at $732 an ounce in May.

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

Goldilox (6/28/06; 13:21:23MT - usagold.com msg#: 145641)
Camel again
@ Clink,

"There was the Saudi who was quoted as saying that his father road a camel, he rides in a Cadillac, and his son will ride a camel again."

I believe it was no less than the previous King who made that statement, but I heardit was a "Mercedes" - LOL

arbyh (6/28/06; 13:14:09MT - usagold.com msg#: 145640)
Paulson took the job to...
Paulson took the job to streamline the direct connection of PPT to Goldman Sachs in thier influence and ability to short gold in the Tokyo Commodities market.

Federal_Reserves (6/28/06; 12:16:09MT - usagold.com msg#: 145639)
Paulson avoids details in Senate hearing
Paulson avoids details in Senate hearing
By Edmund L. Andrews The New York Times

WASHINGTON Henry Paulson Jr., President George W. Bush's nominee for Treasury secretary, has given testimony cautiously avoiding any hints about the administration's economic priorities for the remainder of Bush's term.

At his confirmation hearing before the Senate Finance Committee on Tuesday, Paulson reiterated Bush's general views on the need for low taxes, budget restraint, increased American competitiveness and the use of persuasion rather than threats in dealing with China on economic issues.

> No real change?
> Why did he take the job?


melda laure (6/28/06; 12:03:52MT - usagold.com msg#: 145638)
Coinage cast into the fire
http://www.columbusdispatch.com/business-story.php?story=dispatch/2006/06/16/20060616-G1-00.html
Had a couple of elven horse when I came to this land. The mileage was good, except in winter, but none too fast. Not suitable for indian trails in the west. Traded up to a flying buff robe after the horses decided they no longer needed my services, but that is an off topic story, though Sir Sundeck might muse on the definition of wealth in this regard. Perhaps something along the lines of who REALLY owns the wealth in a stock: not the small shareholder who is only along for the ride.

Sir 'Lox, you bring to mind an amusing tale by Barbara Tuchman regarding the 1300's in the country americans now call France. After the black death, there was much "inflation" in that manpower was dear, yet the gold supply was undiminished. Those men of wealth were quite displeased that the peasant should ask for so much money to perform services that had lately been purchased for much less. Peasants were suddenly in short supply, farmland in oversupply so the less desireable fields went back to the oaks, pigs, and wolves. In an age of disquiet, there was an incongruous habit of endowing "perpetual prayers". The work is titled "a distant mirror" though I have wondered what it was that she thought was being reflected, though it is not in the main an economics novel.

"Pennies have virtually no value," Kolbe said when introducing the bill to the House in 2001. "Most people stash away or toss aside pennies instead of reusing them, thereby forcing the federal government to produce billions more every year at little, if any, profit."

And while we're at it, let's lose the nickel and the quarter. We can make the new quarter in dime sizes and the new dollar coin in quarter sizes and the new fiver in sacagawea sizes. I'm still waiting for BEP to bring back the half gallon note ($500). Inflation reveals itself in odd places.

Someone asked earlier what the effect of a 1/2 point rise would be. I dont know. I am ready, however to take delivery all the way down to $50/oz. or 4.25 UK pounds/oz until the day comex closes their "gold window dressing".







Clink! (6/28/06; 11:29:08MT - usagold.com msg#: 145637)
@ Melda Laure
"...I am very interested in your thoughts on sustainability. Specifically, if a people or a nation are unable to manage non-renewable resources in a long term manner, why would they fare better with renewables?"

I fear that that might either be a rhetorical question, or you then proceeded to answer it better than I could ! However, FWIW, I would have to say that necessity is the mother of invention. While it takes little effort to follow a course of laziness, it takes much more determination to reverse that trend. The US has followed a path of least resistance since WW2 placed it in the happy position of both being in control of the world's reserve currency, and also a large percentage of its manufacturing capacity. If one were being cynical, it could be argued that, barring a few exceptions, it has been all downhill since then. Sixty years is a long time to establish a trend. Long enough to establish a complete new society based upon cheap energy. Hello, Suburbia ! (I believe that a bigger brake on oil consumption than taxes in Europe is that the cities, already existing, have had to cope with the inability to create enough space (roads and parking) for the kind of car-based transport system found in the US) But certain aspects of society are much easier to change, and can be changed in a generation. I cite PCs, for example.

Certain aspects of energy conservation can happen slowly but surely - eg the slow swapping out of the park of low-efficiency heat pumps in homes for minimum 14 SEER models now, or the disappearance of SUVs. Others happen literally at the flick of a switch. Case in point - my old neighbor always used to keep two 100W lights on in front of the house, and this despite the presence of a big street light between the road and the sidewalk only 25 feet away. I have never seen my new neighbor turn those lights on at all (although it is sometimes a little difficult to see past the Cadillac, the Lincoln truck, and their two SUVs in the driveway (there are three drivers in the house - go figure)).

I have always been interested in different, often unconventional, approaches to solving a problem - that's my profession as an engineer, after all ! One of my pet subjects is house construction. A great number of books on the subject of net-zero lifestyles came out in the seventies. It could be said that some of it came from sixties hippies who grew up (a little !) but the majority were fueled (!) by the energy shortages of the time. The decades after were not kind to this type of somewhat marginal activity (apart from certain notable enclaves such as California) but the enabler of the Internet has allowed publication at a minimal cost. But it's never going to hit mainstream again until there is a much more general need. That's when we will start hearing twenty-somethings talking about how few watts their electric cars consume with the same enthusiasm as they currently discuss getting more range out of their wireless routers.

It would appear that the Arab situation is more straightforward. There was the Saudi who was quoted as saying that his father road a camel, he rides in a Cadillac, and his son will ride a camel again.

C!

Goldilox (6/28/06; 08:32:30MT - usagold.com msg#: 145636)
Great post
@ melda laure,

Really strong post. Maintenance of the "status quo" is the rational behind way too large a percentae resources spent.

As sir lackluster suggests, there are many areas of energy need where conversion from petrol base has been rendered "improbable" by pervasion of "King Oil", but mainly because the basic research has fallen so far behind in a country whose educational system places law and marketing so far above sciences and engineering.

What surprises me is the continued lack of understanding of basic energy sciences. It's barely progressed from Tesla's day, thanks to the combination of poor schools and a peer review system that makes R&D monies beholden to the established "kings". Perpetuation of misinformation far outnumbers research in dollars spent.

But then, the feudal PTB were not too fond of the challenges to their "good ole' boy club" by Gallileo or Gutenberg, either, so not much has changed in that regard.

Clink! (6/28/06; 07:41:16MT - usagold.com msg#: 145635)
Coin values
http://www.coinflation.com/
And to think that I have been wasting my time doing the calculations myself. The site has both current and old US coin values as measured by the metallic content. I have been tracking the penny value, but, while I knew that it cost more than 5c to produce a nickel, I had not realised that the metal value was already over 5c itself.

This site was pointed to in an article at 321gold concerning the legality of melting coins. Precedence would appear to indicate that defacing the coinage in any way is only considered illegal if there is an intention to defraud.

The overall tone of the article was that it was a non-issue, as, even in considerable quantity, the amounts are small and no-one in their right mind would want to hoard, say, nickels. I would agree, but I also remember the stories from around five years ago when the old currencies of Europe were being retired to make way for the new Euro mintage. A lot of nickel went to China where the coins were poured directly into the steel furnace. After all, the coins have a very precise composition, so it must be easy to calculate what the final "mix" should be.

C!

Lackluster (6/28/06; 07:09:06MT - usagold.com msg#: 145634)
Melda Laura
From your previous post concerning ethanol:

"Ethanol from corn- ridiculous! Outrageously expensive from an energy standpoint- unless you can use solar powered farm equipment and fertilizer factories!"

Horses?

Knallgold (6/28/06; 01:58:51MT - usagold.com msg#: 145633)
Futures day trading (ok,its only copper in this example)
http://www.futuresource.com/news/story.jsp?i=i4676532718999961664
I particularly love the line:

"Everyone bought on the basis of panic but are now selling on the basis of reality."

I wish them a lot more access to reality,especially in Gold.

melda laure (6/28/06; 00:49:07MT - usagold.com msg#: 145632)
In the beginning was the lie, and the lie was bold, bald and bletcherous
Sir Powell, your news is quite disquieting. Apparently wall street has devolved into a giant bucket shop.

Tut tut, sir 'Lox. Not everybody knows about the extra-curricular activities of our government in illicit substances. Your problem, (and I also have been accused of it as well) is that you know where too many of the bodies are buried, which only makes you seem a "liberal" to conservatives and a "conservative" to liberals. Such labels are quite misleading- two halves of a mistaken dichotomy that the cryptocracy uses to confuse the issues. And while I agree with sir GoldFinger's list of attributes, I find it instructive to ask: why do they tell this or that particular lie. Of course in order to answer this you must already know what the true facts are to understand the motivation for the lies.

It was instructive (amusing) to watch the Paulsen hearings, with all that seeming "worry" about deficits and tax cuts... No where mentioned is the inescapable fact that there can be no retreat for either deficits or tax cuts. Inflation is needed- ipso factum. The dollar must be defended, it is more important to strategic defense than nuclear weapons. Everything else must stand aside.

Nothing is as it seems. Neither in finance nor in physics, nor in seemingly simple things like immigration. I refer those interested, to the freakish analysis by Thomas Barrett regarding the future political balance of power due to future population dynamics. The muslim world is undergoing a population boom, while europe experiences a popluation implosion. The racist implications ought to be obvious (and if it seems improbable I might remind those of scots or irish descent of how a certain Queen Victoria found suitable amusement for so many of her subjects in foreign "adventures.")

(Though I doubt the idea was hers.)

Ethanol from corn- ridiculous! Outrageously expensive from an energy standpoint- unless you can use solar powered farm equipment and fertilizer factories! Cellulosic ethanol- perhaps has a different dynamic, if and when they develope the required catalysts. Sir Sundeck, you ask many pertinent questions, and I do not expect to hear the answers on the evening news anytime soon. Rather I expect the world to run out of grain first. Nuclear fusion has one rather nasty drawback- intense gamma radiation. Toyota is researching cold fusion, and you might find some interesting internet information on numerous promising developments in that field. The fact that we are told of the great promise in ethanol when better solutions are already available ought to illustrate the political requirements of any solution: it must allow for centralized control. This is one of our greatest moral challenges.

Sir clink!, how does per-capita energy consumption in the first world nations compare with total incident solar radiation? (I am being facetious here, my apologies). Moreover, I am very interested in your thoughts on sustainability. Specifically, if a people or a nation are unable to manage non-renewable resources in a long term manner, why would they fare better with renewables? Especially when the renewables are scalable and only limited by the total available land area. I do NOT think it is inconceivable that the morons who denuded the entire north american continent wouldn't put 25 percent of north america under corn fields to fuel their habit. Besides, only about 8% will be needed once a full tank costs a week's pay. Historically, in Europe, oil consumption has been restrained by tax structure and penalizing regulations. In the US, oil consumption has been "restrained" by large monopolies or cartels (standard oil, texas railroad commission, etc). Sir Trail Guide has outlined the role that gold will play in mediating the future restraints on oil consumption. This is another of our great moral challenges.

Wealth- meaning the american lifestyle in this instance- is about to get very expensive. While I am not a pessimist, I do know what Robert Mugabe would do: if 60% of oil is imported, then we have only to liquidate 60% of the domestic oil consumers and the problem will resolve itself. In that context, $300 oil and $15/gal. petrol seems like a "kinder, gentler" solution. This downdraft in "lifestyle" will be masked by as much inflation as is needed to manage the ride of TPTB on this wild bull.



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