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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 11/29/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Waverider (11/29/02; 23:45:41MT - usagold.com msg#: 90492)
In Vietnam, property as good as gold
http://www.iht.com/articles/78475.html
Snippit:
"Vietnam's property boom is spurring demand for gold bars used to pay for homes, bucking a slump in bullion sales across Southeast Asia. Vietnam's gold demand rose 5.4 percent in the third quarter even as total Southeast Asian sales fell 5 percent, the World Gold Council said. In five years, the number of gold shops in Hanoi doubled to about 400, said Vu Duong, deputy director of Kim Quy, a trader of the metal based in the capital city. Retail investment in gold rose 9.1 percent in the third quarter, the Gold Council said in its "Gold Demand Trends" report."

Waverider: Interesting article on the role of Gold and Gold demand in the Vietnamese economy.

Black Blade (11/29/02; 23:13:07MT - usagold.com msg#: 90491)
The case for gold hitting US$510
http://www.nationalpost.com/search/site/story.asp?id=55D843EC-FC9F-40D8-B443-978779F5A85B

John Ing looks forward to another prosperous year

Snippit:

Lunch with John Ing, president of broker Maison Placements Canada Inc., Bay Street's most ardent admirer of gold, is getting to be a regular event on the fall Lunch Money calendar. As usual, and with a lustrous year for gold and the gold stocks he recommended last fall under his belt, he's ready as always to make a cheery pitch for the barbarous relic, which he concedes has mostly been a lousy investment for more than 20 years but which he now reckons is heading next for US$375 an ounce from US$320.70 now, and then to US$510 some time in 2003. "In a world where value is being questioned -- as in equities -- gold has resurfaced as what it has historically been -- a store of value," Ing declares. And the prospect of a war in Iraq (we lunched before Saddam Hussein gave the green light to UN weapons inspectors) and its attendant risks can only enhance what is a good basic case for owning gold -- 10% of your portfolio for insurance purposes in a risky world. The twin U.S. deficits -- budget and trade -- make for a promising backdrop for gold, as has the falling U.S. dollar, which has given bullion a lift in the past year.


Black Blade: The geopolitical and economic world has been turned upside down these last couple of years. A bit of Gold and Silver portfolio insurance has been and will salvage many a portfolio of prudent investors. It will get very ugly before it gets any better.



Black Blade (11/29/02; 22:45:57MT - usagold.com msg#: 90490)
United Stock Plunges; Bankruptcy Likely
http://www.washingtonpost.com/wp-dyn/articles/A53550-2002Nov29.html

Snippit:

CHICAGO –– United Airlines' stock lost more than a quarter of its value Friday on investor fears that a crippling labor vote setback has dashed its efforts to avoid a Chapter 11 bankruptcy filing. Shares in United parent company UAL Corp. plummeted 98 cents, or 27 percent, to $2.65 in heavy morning trading on the New York Stock Exchange after opening down 44 percent. Following United mechanics' rejection Wednesday of pay cuts that are a key element of its multibillion-dollar financial recovery plan, Standard & Poor's slashed its credit ratings Friday on UAL and said the company appears almost out of options to keep out of bankruptcy. "The mechanics' vote makes bankruptcy virtually inevitable for United and UAL," S&P credit analyst Philip Baggaley said.

Black Blade: Another one bites the dust? There must be a lot of airline mechanic jobs out there. Hmmm…



ElGordo (11/29/02; 20:57:18MT - usagold.com msg#: 90489)
Venezuela strike on Monday
http://www.guardian.co.uk/worldlatest/story/0,1280,-2208498,00.html
CARACAS, Venezuela (AP) - Venezuelan opposition leaders pledged to keep up pressure for a nonbinding referendum on President Hugo Chavez's presidency after the Supreme Court quashed a decision to hold the vote, and said a nationwide strike will start as planned Monday.

``This brings us one step closer to chaos,'' Pedro Pablo Alcantara, a lawmaker with the center-left Democratic Action party, said Friday.

The electoral council approved holding a Feb. 2 referendum in a 3-1 vote Thursday with one member absent, citing a new law allowing approval by a simple majority. But the high court said hours later that an old electoral law requiring approval by four council members still stood.

The vote would be nonbinding, but opposition leaders hope that a poor showing by Chavez would increase pressure on the former army paratrooper to resign or call early binding elections.

The back-to-back decisions pushed the oil-rich South American country further into political turmoil as Chavez's foes and supporters held rival demonstrations on Thursday.

``This is one more reason to hold the strike,'' said Carlos Ortega, head of the 1 million-member Confederation of Venezuelan Workers, the nation's largest labor union.

Cytek (11/29/02; 20:25:57MT - usagold.com msg#: 90488)
What will it take for Gold to come to Parity
http://www.worldtribune.com/worldtribune/break_22.html
Analysis:Israel now pulled into terror war
By Roland Flamini
UPI International Editor
From the International Desk
Published 11/29/2002 2:44 AM

WASHINGTON, Nov. 29 (UPI) -- Within hours of Thursday's terrorist bomb attack on the Israeli-owned Paradise Hotel in Kenya, Hercules C-130 transporters were trundling down the runway at Mombasa airport, bringing in Israeli medical teams, and military and intelligence personnel.

Israel had been thrust into the heart of the U.S.-led war on terrorism -- something the Bush administration has been trying to prevent.

There was still no confirmation Friday as to who was responsible for the suicide bombing of the beachfront hotel. At least 15 were killed, including three young Israeli tourists, and some 80 were injured.

Also unknown is the hand behind the simultaneous surface-to-air rockets fired at an Israeli charter plane as it took off from Mombasa airport. But the immediate reaction of some terrorism experts was that the hotel attack bore the hallmarks of a carefully planned operation by Osama bin Laden's al Qaida terrorist organization.

They compared it to the devastating nightclub bombing in Bali last month in which 180 tourists perished, mostly Australians, and which the Indonesian authorities have linked to the tentacular terrorist organization.

If the Paradise bombing is the work of al Qaida, it will be the first time the terrorist organization has carried out an attack against Israelis.


Blast rips through govt. offices in Yemen
From the International Desk
Published 11/29/2002 8:32 AM

SANAA, Yemen, Nov. 29 (UPI) -- A powerful explosion ripped through the main government compound in the eastern Yemeni city of Maarab on Friday, causing damage but no casualties, security sources said.

The blast occurred soon after midnight when an explosive charge planted near the house of the main security official in the province of Maarab, Brig. Ali Nasser al Kawsi, went off.

The weekly al Sahwa, mouthpiece of the main Islamic opposition Yemeni Reform Party, reported in its Friday edition that "a strong explosion rocked the city and smoke was seen billowing over the well-guarded government compound which harbors the offices and houses of the main security officials in the province."

There was no immediate word on the sum of material damage, but the sources reported there were no injuries.

The incident is believed to be a response to the killing of the presumed leader of Osama bin Laden's al Qaida network in Yemen. Kaed Sinan al Harithy and five other suspected members of the group were traveling in Maarab Nov. 3 when a missile fired by an American Predator unmanned airplane destroyed the vehicle and killed its occupants.


Cytek - However, none of this was the hot topic on CNBC today. I turned it on to check the markets and the the biggest topic was Black Friday " Shop till ya drop ". Come on consumers fill those credit cards till they burst. And if they do ..... just get another one.

DOWNUNDER (11/29/02; 20:15:36MT - usagold.com msg#: 90487)
@MAX Re POST " Helicopter Money Or The Road To Weimar?"
http://www.prudentbear.com/internationalperspective.asp
Max Rabbitz (11/29/02; 07:35:52MT - usagold.com msg#: 90467)
Chairman Greenspan and the Great Leap Forward
http://www.prudentbear.com/internationalperspective.asp
-----------------------------------------------------------
Max thanks for pointing the way to a very interesting read.I
would like to add my favourite snip which as it happens is the last & summing up paragraph.
SNIP:

"Monetary systems are born in crisis and die in crisis, the crises stemming from the errors of central bankers and those whom the central bankers nurture, regulate, and increasingly bail out. The increasing resort to moral hazard, the resultant socialisation of risk, even on the ostensible grounds of preventing a socially crippling deflation, ultimately becomes untenable: there are no clear guidelines or principles governing the practice, thereby destroying the very economic system policy makers seek to protect. In the United States today, the fear of deflation is a green light for money printing and now, it appears, all sorts of other unconventional policy measures as well. They appeared rooted in no coherent ideology, other than an increasingly aggressive effort to inflate. As Denis Mack Smith himself notes, "Fascism began with no particular economic policy: its doctrines of planned economy were one to day to be called typically fascist, but in fact they came as an afterthought". Much the same applies here. At the very least, Bernanke and Greenspan have provided the most powerful argument possible for owning gold, assuming of course, that this subversive practice is not abolished as the Fed and government mobilise to defeat a supposedly non-existent deflation. In so doing, they leave us less concerned with the prospects of deflation and more aghast at the apparently limitless measures America's financial and monetary officials appear prepared to countenance sustaining an increasingly unsustainable system."

ElGordo (11/29/02; 20:06:52MT - usagold.com msg#: 90486)
Heating costs are rising
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topfin&T=markets_box.ht&s2=ad_right1_all&bt=ad_position1_energy&box=ad_box_all2&tag=energy&middle=ad_frame2_energy&s=APefnzBT7VS5TLiBF
Washington, Nov. 29 (Bloomberg) -- A jump in heating costs during the winter months may slow a consumer shopping spree that has kept the U.S. economy expanding this year.

Heating oil prices rose 40 percent in the past year, as crude oil costs surged on concern that a war in Iraq may disrupt Middle East oil production. Rates for propane and natural gas have risen about 60 percent. Weather forecasters say the northern U.S. will have a colder winter than last year, when temperatures were 18 percent above average in the Northeast and 13 percent above normal in the Midwest.

``When the price of propane is high, it's really hard for everybody here,'' said Eileen Barney, the heating assistance coordinator for the Bois Forte Reservation Tribal Council in Minnesota. She has received 25 percent more applications for heating assistance on the reservation this year than last.

Heating bills from October through March will cost consumers about $11.6 billion more than last year, based on Energy Department estimates. The government projected that home heating costs would rise 25 percent for natural gas users, 40 percent for heating oil customers, 19 percent for propane buyers and 13 percent for those heating with electricity. By contrast, Wal-Mart Stores Inc. said Monday that sales at stores open at least a year would rise as little as 2 percent this month.

``When people spend more on energy, they have less disposable income to spend on other goods and services,'' said Scott Andersen, a senior economist at Wells Fargo & Co. in Minneapolis. ``They have to pinch pennies in other areas.''
-------------
Consumers paid $221.7 billion for utilities last year, or about 3.2 percent of their total spending. The average heating bill in New England, where oil is widely burned in home furnaces, will rise by $258 to $901 this year, the Energy Department predicted. In the Midwest, where natural gas is dominant, bills will increase by $149 to $746.

``An extra couple hundred dollars out of the budget of many middle income families is tough to handle because many people live without any cushion, just making enough to make ends meet,'' said Martin Cohen, executive director of the Illinois Citizens Utility Board, a nonprofit utility watchdog group.
--------------
Natural gas prices increased because energy companies are drilling fewer new gas wells since the recession cut demand for energy, said Tim Evans, senior energy analyst at IFR Pegasus in New York. Supply has fallen even faster than demand, sending prices higher.

``This is an expensive year,'' Evans said. ``Pretty much everything is in place for this winter. You're not going to see added supply.''

Rising Demand for Heat

Colder weather is increasing demand for heat. October was the coldest in 26 years. October and November have been 12 percent colder than normal so far, according to a research note to clients from Wachovia Securities Inc. That compares with record warmth a year ago and earlier predictions that this would be a warm winter as well.

Elwood (11/29/02; 19:34:22MT - usagold.com msg#: 90485)
Black Blade: Bundesbank Gold May Be Sold for More Profitable Asset

Black Blade, I guess the profit being made at the printing press isn't what it used to be, eh?

Black Blade (11/29/02; 15:32:13MT - usagold.com msg#: 90484)
Bundesbank Gold May Be Sold for More Profitable Asset
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Mining%20News&tp=ad_mine&T=au_storypage99.ht&s=APecprhXKQnVuZGVz

Snippit:

Frankfurt, Nov. 29 (Bloomberg) -- Bundesbank may sell some of its $35 billion of gold, the second-largest holding by a central bank, to buy more profitable assets, executive board member Hans- Helmut Kotz said. Such an action likely wouldn't come until the Washington agreement between 14 European banks and the European Central Bank to limit gold sales ends in 2004. Bundesbank's president, Ernst Welteke, in July said he wanted the accord renewed. ``There is the option, the idea, that some of the gold in the future be converted into a robust, but more profitable alternative,'' Kotz said in an interview with Bloomberg TV. ``One needs something like gold to underline the credibility of the institution. But one can't justify massive opportunity costs over a longer period of time.''

Black Blade: Yeah right, and what "more profitable asset" might that be? The EU economy is in the crapper like most everyone else. Eddie George is still trying to spin himself out of a disastrous series of BOE gold auctions that cost the Brit people $billions. This is an old tiring story that has worn thin.



Black Blade (11/29/02; 15:17:12MT - usagold.com msg#: 90483)
European Economies: Consumer Confidence at 5-Year Low
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APeeIdxYVRXVyb3Bl

Snippit:

European consumer confidence declined to the lowest in more than five years in November and inflation slowed for the first time since June, increasing the odds the European Central Bank will trim interest rates next week. A European Commission survey of 25,000 consumers in the dozen nations sharing the euro fell to minus 14 from October's minus 12. A survey of the same number of companies showed they expect to reduce jobs. The inflation rate dropped to 2.2 percent from 2.3 percent in the previous month. Europe's economy will this year expand at the slowest pace in nine years, according to the commission, the European Union's executive branch. That's spurred companies including Siemens AG and Fiat SpA to trim jobs. ECB officials have signaled they're ready to help by cutting rates as inflation slows. ``At work, they've said we are 1,500 people too many and that's scary,'' said Aysel Celik, 24, an employee of Axa SA in Brussels. ``I'm being more careful about spending. You never know what tomorrow will bring.'' Also, ``Consumer confidence is falling off a cliff,'' said Ken Wattret, an economist at BNP Paribas SA, in a research note. ``That must be worrying for the ECB and supports our belief that they'll grasp the nettle and cut by 50 basis points on Dec. 5.''

Black Blade: Looks "grim" here also. The deterioration in the global economy is worsening and yet the Lemmings are oblivious. However, many others are pulling in their horns and beginning to save for an uncertain future.



The Invisible Hand (11/29/02; 15:17:06MT - usagold.com msg#: 90482)
Don't low interest rates enable bullion banks
to exit their carry trade orderly and painlessly?

Belgian asked a question in msg#: 90325 as to the appropriate amount of Gold (tonnes) that are effective and / or, the valuation of these Gold reserves.
otish mountain replied in msg#: 90403 that a gold producing nation like Canada apparently doesn't need gold reserves. He/she went on to state that gold represents less than 1% of Canada's reserves and that, even though there are ample currency reserves, gold is continuing to be sold.
4gold brought then up in msg#: 90407 that there was no physical gold left as the gold holdings the Bank of Canada reports have been leased out which led silvercollector to qualify the Bank of Canada in msg#: 90411 as more morons.

I don't contest that a currency should be backed by gold. I do however firmly oppose any gold holding by the government. So the selling of gold by the governmental CB's cannot be opposed. The problem is that I also like the euro because 15% of its reserves are in gold (but the ECB could be privatised (Isn't the Fed a private bank?) and the euro could then perhaps become one of the competing legal tenders in Canada, whereby the seller could always insist that the buyer use Another of the available legal tenders to pay his debt. i.e. the seller could choose which legal tender (or not) the buyer would use to pay his debt so as to prevent bad money from running out good money)

In these circumstances of gold manipulation, the leasing of gold reserves is however another question. In normal circumstances, the "leasor" (the CB) will not loose its gold by leasing it out to the "leasee" (bullion bank) as the "leasee" will have to return the gold at the end of the lease. In these circumstances of gold manipulation, which have arisen due to the fact that the "leasees" have sold the gold they leased from the CB's and thus want the POG on the day the lease contract ends not to be higher than the price for which they originally sold the leased gold, the leasing CB"s have no hope of ever getting their gold back, if the POG cannot continue to be manipulated..

(Extended) Washington Agreement (which only deals with the selling of CB gold not with the leasing of CB gold, which (the leasing) can go on) or not, it's not the CB sales, but the CB leases which are holding back the POG.

I am told that today's low interest rates make this gold carry trade unattractive because the selling bullion banks have no hope of earning lots of interest on the proceeds of the sales. Yes, they will no longer conclude new lease contracts with the CB's (and thus no sale contracts with third parties) but the leased gold has been sold in the past by the bullion banks (the "leasees") and at the end of the lease, this gold can still be bought back at today's price to return to the CB. My namesake has made the conclusion of new contracts unprofitable

Do the bullion banks, who can no longer bother, or do no longer have to bother, about concluding new lease contracts, not have the opportunity now to orderly and painlessly exit their carry trade?

FWIW

Note on the English language used: my dictionary, neither my spell check, know the word "leasor" and "leasee", but I can't find better words. Sorry.

Black Blade (11/29/02; 15:15:32MT - usagold.com msg#: 90481)
Mortgage lending hits new high
http://money.guardian.co.uk/homebuying/mortgages/story/0,1456,850778,00.html

Snippit:

Mortgage lending soared to a new high last month, according to figures released by the Bank of England today. A total of £20.34bn was lent during the month, compared with £19.37bn in September, as the seasonal autumn slowdown failed to materialise. Mr Rubinsohn said credit card spending had remained reasonably strong during October and the slower increase in outstanding debt was driven by strong repayments. He said this could be because consumers were using equity in their homes to pay off their debts.

Black Blade: Going into debt by risking their homes? Some plan. "Interesting Times"



Black Blade (11/29/02; 14:47:12MT - usagold.com msg#: 90480)
Japan's economic woes deepen
http://news.bbc.co.uk/2/hi/business/2526431.stm

Snippit:

Fears that the Japanese economy is heading back into recession have increased following the release of a dismal set of economic figures. This clearly illustrates that the domestic economy is falling into a deep deflationary phase. Japan's jobless rate increased last month to 5.5%, up from September's 5.4% and matching the post-World War II high seen in December last year. Industrial output fell by 0.3% in October, the second month in a row that the measure has fallen. And household spending fell by 0.7% compared with October last year. Deflation kept its hold over the economy, with retail prices falling for the 37th month in row. September's fall in industrial output had been the first drop for three months, and most analysts had expected output to recover in October. But sluggish growth in the US - Japan's biggest export markets - has continued to hit hard.

Black Blade: The situation looks "grim". Meanwhile the "currency war" continues as the Japanese government continues to buy dollars and sell yen in a futile attempt to salvage the economy. Also the insolvent banks continue to weigh down the economy as well.



Black Blade (11/29/02; 14:19:27MT - usagold.com msg#: 90479)
Some Saudis May Sell US Investments-Paper
http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=1823841

Snippit:

LONDON (Reuters) - The Times on Friday quoted Saudi billionaire Prince Alwaleed bin Talal as saying some Saudi investors would panic and sell U.S. investments because Saudi Arabia was portrayed by some Western media as not co-operating with the United States in its "war on terror." Alwaleed's comments to the Times came after he denied a report in August of Saudi "panic selling" of U.S. investments. At the time, he did not see an outflow of Saudi funds from the United States in reaction to perceived anti-Saudi sentiment. "When you have Saudi Arabia being portrayed as not co-operating fully with the U.S. some Saudi investors will panic and leave. Inevitably, some funds will be withdrawn and some assets will be liquidated and these investors will move to other regions of the world," Alwaleed was quoted on Friday as saying in an interview.

Black Blade: If Saudis pull out of US markets then it's "game over". US markets are too fragile for a massive withdrawal like that.



USAGOLD / Centennial Precious Metals, Inc. (11/29/02; 14:16:36MT - usagold.com msg#: 90478)
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