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ARCHIVED DISCUSSION FROM 6/29/2004
All times are U.S. Mountain Time
(Yesterday's Discussion.)
Sundeck
(6/29/04; 22:10:54MT - usagold.com msg#: 122658)
Snippits from AFR
Here are a few snippits from today's Australian Financial Review (AFR) that may be of interest:
1. Bush Admin has resumed full diplomatic relations with Libya after 24 years. Libya holds the largest (known) reserves of oil in Africa.
2. Next month, the Japan Ministry of Finance will begin publishing (for the first time) details of its Y703Trillion debt. The report would show "comprehensive information" on debt sold by federal and regional governments, loans to quasi-government organisations etc.
3. US balance of payments is not as bad as Australia's - Oz current account is sitting at around 6% of GDP. Americans aren't the only ones who know how to party. However, government borrowing by Australia is currently very low as a percentage of GDP, unlike the US of A.
FWIW
Cheers
Cometose
(6/29/04; 21:34:24MT - usagold.com msg#: 122657)
Sinclair's 5%
Sinclair is getting 30,000,000 hits a week ? or a month???
I'm not sure but , he can afford to be subtle and understated when he addresses the health of owning 5% of one's assets in GOLD. I'm sure that not all his visitors are Americans ..... I think he appeals to a broad international audience .......and that if a group of Chinese or Indians spread the word that it's a good Idea, this idea could spread like wildfire......and effecitively set on wheels a self fulfilling prophecy........this would cause a veritable fire to break loose in the GOLD world...
and on the Comex.....
In my personal opinion , there are many factors that are now contributing to the bonfire that is already occuring right under our noses , courtesy of Alan Greenspan , Bernake and Co.... GOV't DEFICITS .....and CONSUMER DEBT engine come "keep up with the Jones's" syndrome......GEOPOLITICAL UNREST......DOLLAR IN TROUBLE...
with all their inflationary implications
If Mr Sinclair chooses to throw a little more GAS on the FIRE by suggesting 5% of one's assets should be in GOLD ,
I have no objections whatsoever.....
I like his subtlety...
His advice reminds me of .. An APPLE A DAY......
I think with time his advice my become a Colloquialism as well.....
Cavan Man
(6/29/04; 20:45:05MT - usagold.com msg#: 122656)
Perhaps Sinclair and Maybury are RIGHT???
Attack Iran, US chief ordered British
By Michael Smith, Defence Correspondent
(Filed: 30/06/2004)
America's military commander in Iraq ordered British troops to prepare a full-scale ground offensive against Iranian forces that had crossed the border and grabbed disputed territory, a senior officer has disclosed.
An attack would almost certainly have provoked open conflict with Iran. But the British chose instead to resolve the matter through diplomatic channels.
"If we had attacked the Iranian positions, all hell would have broken loose," a defence source said yesterday.
"We would have had the Iranians to our front and the Iraqi insurgents picking us off at the rear."
The incident was disclosed by a senior British officer at a conference in London last week and is reported in today's edition of Defence Analysis. The identity of the officer is not given
OvS
(6/29/04; 19:35:26MT - usagold.com msg#: 122655)
NED
Yes, not only the 6 mos chart concerns
me but confiscation, market manipulation,
obfuscation, you name it.
But, one thing I have learned is to sit
tight when there is an uptrend--don't
listen to the doubting Joneses and lying
bears. Let the trend evolve. I was ex-
pecting a big reaction when some of the
gold and silverstocks appreciated ten fold
and more (wouldn't you cash in on a ten-
bagger?). But there is this realization that
this financial gamesman-ship is a bit out of
control and needs some severe readjustment.
So, one must sit tight with this investment
until those excesses have been eliminated.
Just in case that somehow those international
central bankers have an ironclad understanding,
and are able to strech things out beyond my
capacity to wait them out....well, I'm taking
up gold and silversmithing as a hobby...he,he.
I'll get MY ten-bagger, come hell or highwater.
Good luck. Cheers. OvS
P.S.: Won't melt down them US gold eagles nor
silver-eagles. That probably would be illegal.
Solomon Weaver
(6/29/04; 19:32:06MT - usagold.com msg#: 122654)
Open letter to people of "importance" who don't understand gold ownership
Dear Friends
I have authored the following letter and will be sending it out to various elected officials and small town bank owners in my terrain....hope some of you might cut and paste it out to your computers....and one day do the same.
My idea is to send it out to a certain list now, and then IF we see moves afoot to restrict PM trade, to resend it then with the reminder that they had been alerted before.
. . . .
PRECIOUS METAL MARKET ALERT (By Poor Old Solomon , June 25, 2004)
CONCERNS OF POTENTIAL LEGISLATIONS BANNING OR LIMITING THE OWNERSHIP OF PRECIOUS METALS AND COMPANIES MINING PRECIOUS METALS.
Dear honored official,
We are writing this letter as a general letter which may be presented to government officials in any function who may influence legislation, or may simply have concerns about the financial rights of honest citizens living within their constituencies.
The topic of concern is the right of American citizens to own and invest in precious metals such as gold, silver, platinum, and palladium. Of very specific concern is that legislators may be requested (lobbied) to pass or enforce new laws which severely restrict, or even outlaw the rights of Americans to own (or profit from) the sale of precious metals or companies involved in the mining of precious metals.
There is also a concern that the use of gold as money amongst illegal drug traders, mafia, and terrorists, will be used as an excuse to pass legislation against law abiding American citizens who own precious metals.
Lastly, were there to be a serious financial crisis in America which resulted in high levels of inflation and loss of global dollar purchasing power, Americans who have traditionally used only dollars, might move in a panic to convert portions of their savings from dollars to precious metals. The escalating price of gold, silver and other precious metals, in this case, would be an accurate barometer of the problem with US Dollars.
A brief summary of the situation is presented, and all that is asked is that you, as a legislative or enforcement official become attuned to the situation. America is both a democracy, where every vote counts, and a representative democracy, where citizens expect their representatives to vote and act in accordance with their conscience and beliefs.
The primary understanding which we would like to communicate about precious metals is that at many times in the past, both gold and silver have been used as money. All large governments have long ago discontinued the use of gold or silver in legal tender coinage, and have even gone so far as to sell much of their reserves of gold and silver. Gold and silver are no longer considered money, but their historic use as money has left a legacy of monetary value. Most Americans would easily equate treasure chests of gold and silver coins to wealth or riches. Platinum and palladium, along with silver, are primarily considered industrial metals. A unique property shared by all these metals is that they may be fabricated into coins and ingots. Coins can, in some cases have collectable value, and ingots of various sizes are usually convenient forms of high purity bullion metal. Thus, although the primary use of silver, platinum and palladium is now industrial, a portion of the world reserve of each is in the form of small coins and bars which are held by investors.
There are actually several ways to own precious metals. The most obvious and most simple is to buy a coin or bar from a dealer who handles them. For persons or corporations that want larger amounts of precious metals, they may choose to buy a certificate that gives them title to a certain amount of a precious metal in a vault in a bullion bank. The daily price for all of the four precious metals is determined in international markets and is known as the spot price. In addition, there is a large amount of gold and silver trading in the futures markets as futures contracts and options.
A person or company with large amounts of money and short term investment time horizons of hours, days, or months will often choose to place their money in the futures or certificate trade. These markets are large, with active trading, and therefore allow large investors to move in and out with low transaction costs. Although gold is no longer used as money, its price in these large futures markets is carefully followed, allowing all global currencies and commodities to be instantly valued in grams or ounces of gold.
Why would someone want to buy real gold or silver or other precious metals? There are two primary reasons. The first is that coins or bars of these metals have a durable, tangible and intrinsic value which derives from their future utility in industry as well as their perceived value as a financial instrument. Owners of precious metal coins or ingots may use them as a form of savings, but they sacrifice an interest on the savings, since such coins and ingots bear no interest. An important counterpoint to the loss of interest is that the asset value of each coin does not correspond to an obligation of another party which may be defaulted. The second reason to own precious metal coins is to have an asset which is private or anonymous. One man may choose to spend $100 on a dinner out, the other may choose to buy $100 worth of gold. The one man has spent his money, the other has saved it, privately. Although we live in a computerized world with ever less financial privacy, the owner of a precious metal is exercising a long tradition of financial privacy.
An observation which justifies the ownership of precious metals as a form of savings is that over time, all printed monies of all nations tend to experience inflation. Prices rise slowly, and the purchasing power of the money falls slowly. Governments and their citizens tend to enjoy inflation at low levels since it allows them to pay long term debts back with inflated currency. A positive side of mild inflation is that it tends to encourage savers to place their money into interest bearing investments and assets such as homes and stocks, in the hopes that the value of their investments will grow faster than inflation. A corollary to that is that everyone knows that only a fool would stuff their money into a mattress for 20 years. But precious metals, over the long term, tend to generally hold their value just about even with inflation. There are occasionally periods where the value of precious metals does not rise with inflation, but those are usually followed by periods where the price of the precious metals rises, sometimes suddenly, and usually finds a new equilibrium price near the level dictated by inflation.
For persons living in smaller countries where governments have a history of destroying the value of the currency, precious metals, primarily gold, represent an asset which can easily be sold but which will not suddenly lose value in a currency collapse. Even in modern times, families in many nations in economic trouble have been able to preserve their savings, through holding that savings in gold, rather than their local currency. Those families did not do this by suddenly converting their savings into gold during a financial collapse, they did this during the good times preceding the collapse, by slowly buying gold each time they had spare savings.
Small countries who get into trouble with their national debt, and print up a lot of new money trying to fix things, and then see a dramatic collapse in the value of their currency, are usually able to let a bunch of folks go bankrupt, borrow a few billon dollars from the International Monetary Fund, print a new currency and start over. They are usually much more concerned about arranging bailout loans than they are about the option to confiscate gold or regulate or tax sales of gold.
America is in a very different situation. We are already borrowing about $500 billion dollars per year from foreigners. This is about 5% of our entire economic activity (GDP). If America would get in trouble with the national debt, print up a lot of new money trying to fix things, and then see a consistent drop in the value of the currency, yes, many of us could go bankrupt, but who would bail us out??? If the dollar upon which we all have relied is losing value, the central banks of the world might prefer that Americans begin to save in other currencies such as Yen and Euros, but just as likely is that Americans begin to consider saving in gold. If this happens, the US Government and Federal Reserve Bank will certainly see that a rush away from dollars and into gold, by American citizens, is a vote of no confidence for the dollar. The temptation will be to restrict and regulate gold markets for Americans, trying to force them into holding dollars. But the real solution is for the Government to manage its spending and the FED to manage back real trust in the dollar.
The situation in silver is even more dramatic. Near the end of World War II, since America had been a large silver producer, and had also accepted silver as payment for war supplies, the United States Treasury (including circulating coin) and the US Strategic Silver Reserve held close to 10 billion ounces of silver. Since then, silver has become an essential component in thousands of modern products, and even though the amount of silver mined each year has grown, the demand for silver has grown so much faster, that most of those 10 billion ounces of silver reserve have been used up. As a matter of fact, the ongoing availability of silver from reserves has tended to keep the prices for silver low, and so the global mining industry has not made large new investments related to silver. In essence, the world has been experiencing a shortage of silver for several decades, and this has been hidden by the consumption of reserves. Now, those reserves are gone. Silver known to exist in vaults is only about 150-500 million ounces
2% to 5% of the reserves we once had. Enough to cover a couple short years of typical silver deficit, but that is not enough time for the global mining industry to build mines to produce an extra 200 million ounces per year of silver. A shortage of silver is now eminent. Certain silver investors have recognized the emergency situation in silver several years ago.
The situation with silver is that an acute shortage of silver (leading to certain industrial companies closing down production lines if they can't find silver) may now occur almost simultaneously with inflationary erosion in the value of various global currencies, particularly the dollar, and a trend away from financial investments such as stocks and bonds into commodities such as energy, food, lumber, metals, etc. In any financial environment, the rise in price caused by an acute and structural shortage in silver will attract new interest in silver investment, but this could even be more dramatic in a poor economic environment where inflation is once again high. Many of the world's poorest nations are still prolific savers. If even 1% of the savings generated in one year were to attempt to invest in silver, the price of silver would easily move to over $100/ounce. Historically, most serious investment advisors would advise owning about 10% of an investment portfolio in precious metals. If Americans now tried to convert even 1% of their portfolios into silver, massive increases in silver prices could occur.
The great fear of this author, and of many investors who already own precious metals as a protection against a national or global financial emergency, is that once such an emergency unfolds, and many investors rush to the precious metals, it will be very easy to confuse cause and effect and try to blame the rush into precious metals as the cause of the financial emergency, when it is in effect only the symptom. As a matter of fact, since precious metals trade globally, allowing free markets in all precious metals, and therefore a true market price, is a perfect mechanism for measuring the true state of monetary affairs of each nation. Even after a global financial emergency, as governments reestablish well managed monies and do better at balancing their budgets, the prices of precious metals will once again fall back to a new equilibrium.
Although it is predictable that governments in a crisis may attempt to take control of precious metals ownership and markets in their nation, and take control of precious metal mining properties, it should be remembered that the movement of small investors to own these metals in a time of crisis is a natural and very non-political human emotion.
American politicians must recognize the importance of allowing all precious metals to trade freely, and perhaps build improved monetary systems by incorporation of precious metals back into bank reserves. But, above all, the right of all Americans must be adamantly defended, to choose honest and legal investments, and be rewarded if those investments are profitable. Attempts to outlaw or restrict the ownership or trade of precious metals is a fundamental violation of principles of economic freedom and justice, and one would be encouraged to carefully scrutinize the motives of individuals asking to implement such laws.
Poor Old Solomon
Aristotle
(6/29/04; 19:26:24MT - usagold.com msg#: 122653)
Ned -- everyone was barking $480???
Hey buddy, not ever from MY lips.
The only context in which you'll see me talking about Gold at $480 is someday, looking back on it historically as some sorta socially curious interlude. But in all fairness, even then I probably won't call out $480 specifically -- I'll more likely just refer to it generically as "the time Gold was available in the ($) hundreds."
Why split hairs when a general sense of it is wAaaay more than good enough? In the same philosophy, trying to closely correlate daily news events with daily price action (cause-effect) is a pedantic pursuit you shouldn't waste time with. Its akin to a kid throwing a stone, making a ripple upon a wave, but revealing nothing to you about the course of the tide.
I had a conversation the other day with someone about the effect of a depreciating dollar in the context of the international scene. There were two angles to view the scene. One, as a trading currency, isn't of much significance. Sure, the dollar sees plenty of action denominating prices in international contracts, but it's hardly a cause for undue concern. The easy "market solution" for weaker dollars is a very simple one: higher prices. No big deal. The tide still rolls in and out much as it always has.
Our cause for concern rightly comes from the other angle, the dollar as an international reserve. If the dollar is getting weaker as a reserve asset, what is the "market solution" available to its users? Ask yourself, what recourse would you explore as you understand the very nature of the problem at hand?
You don't gamble your way back to prosperity betting on the ripples and waves, that's for sure!! You go for the One Sure Thing, and "go with the flow" of the whole damn unstoppable Ocean.
Gold. Get you some. --- Ari
OvS
(6/29/04; 19:12:32MT - usagold.com msg#: 122650)
The Invisible Hand
Alan Greenspan obviously is the
President of the central banks.
I just wonder: Who is the
Chairman?
Ned
(6/29/04; 18:49:03MT - usagold.com msg#: 122649)
Thanks
Goldendome....thanks for the slack
OvS...5 yr. chart is a beauty. Are you concerned about the 6 mth?
Federal_Reserves....Thanks for the 'pick-me-up'. Fundamentals should trump the baloney thats going on.
Mikal......pussywillow? I'd call that a personal attack except that it's too pussywillowish to classify it as such. Why don't you say something that really upsets me? I'll tell you what, I'll drop it (and thus take you candid advice from your second post) so you don't get your butt kicked out of here.
Goldendome
(6/29/04; 18:00:59MT - usagold.com msg#: 122648)
Cudo's and a question.
OvS: Nice 5 yr. chart!
Fed. Reserves: Nice train of thought! And lets extend it out another few years until the Gov. can no longer appropriate the SSI overage to make their books look less terrible than they really are.
Oh! And about Ned, let's cut him some slack; frustration tells in us all, from time to time.
My question is for the math wizards out here...Does a .25% point interest rate increase from 1% to 1.25% (anticipated tomorrow) carry with it as heavy a burden to the economy, as would a .25% increase from a higher base number, from say, 4% to 5% on short term money? Personally, I don't believe that it would, but I've seen argued elsewhere, that the percentage increase is as important as the real number. [1.25% is a 25% increase over 1.%, as would be, 5% is a 25% increase over 4%]
mikal
(6/29/04; 17:53:08MT - usagold.com msg#: 122647)
@OvS
Regarding James Sinclair:
"But, unfortunately, most of his
following are unsophisticated traders
and short-term investors who try to time
the buying and selling of gold-shares."
[!Based on WHAT evidence?]
"Those, repeatedly got clobbered."
[What happened to taking responsibility for your own actions? Also, J.S. never gives specific recommendations
to traders and speculators, let alone conservative
investors that would have fared well irregardless.]
"Lately he has come around and proposes
to buy physical; but his recommendation
of buying just 5% of one's gold portfolio
is less than what one would expect of a
Mr.Gold in today's circumstances..."
[JS NEVER repudiated gold share ownership.
JS never" "came around on physical- ALWAYS loved bullion 1 ouncers.
JS never recommended 5% in physical Au for EVERYONE- just a minimum guideline.
JS never pretended to the imputed stature of "Mr. Gold".]
mikal
(6/29/04; 17:41:30MT - usagold.com msg#: 122646)
@Ned
Re: "can't help you"
I never thought of asking for your help, but if you
REALLY want to do me a favor...
OvS
(6/29/04; 17:40:14MT - usagold.com msg#: 122645)
NED--Suggestion
Go back to charts and click on
the 5 yr chart and THEN draw
to trendlines....Cheers. OvS
Federal_Reserves
(6/29/04; 17:36:29MT - usagold.com msg#: 122644)
NED
The fundamentals for gold are excellent. Rising gold is associated with large and widening trade deficits,
huge government spending deficits, evenloped in excessive money printing. These things tend to weaken the dollar and help gold. Also gold is a safe haven for foreign and international problems, and during times of high risk and war money is held in gold.
Starting with the beginning of this year, the stock and commodity markets (including gold) started to trade
sideways with no perceptible trend. The CRB and the SnP are trading at the same levels as the beginning of the year.
Gold, a key commodity has been going sideways too. Its trading in the 390's the same as Sept/03. There are some
indicators that the level of home price appreciation is beginning to slow and the FED has warned us to expect that.
However, the bond market has been going down, taking interest rates up. This I believe is a force field that
is now going to slow the economy. The GDP growth rate has dropped for 2 consecutive quarters on rising price
inflation, not accompanied with wage inflation. Consumers have picked up hoards of debt during the last recession
and this recovery. Debt as a percentage of disposable income is now at record levels.
Due to quickly rising prices and low wage gains, consumers have fallen behind the inflation curve. Real wages are falling. IMHO we are falling into a recession, and having expended nearly all or bullets to fight the last one, and having not reloaded the holster during the recovery, we are in deep doo doo. The consumer should lead this next downturn and it should be a doosey. The RICH who hold bagholder title to the paper assets backed by debt should panic soon and sell them.
OvS
(6/29/04; 17:30:57MT - usagold.com msg#: 122643)
Too hasty.
I just glanced at that Mikal message.
He was referring to Ned. Strong words
there--I was thinking of more subtle
points...Now, let me go back and re-
read...
OvS
(6/29/04; 17:26:31MT - usagold.com msg#: 122642)
Mikal
I cannot believe it. I meant to post
the Mr.Gold comment for quite a while.
Now that I did I'm reading your post.
I didn't comment on it. I didn't see
it until after I posted...Telepathy?
OvS
(6/29/04; 17:21:45MT - usagold.com msg#: 122640)
Mr.(X?)Gold
I know that many on this forum admire
him and I used to. But lately I get a
"feeling" that he is not what he pre-
tends to be.
I personally don't trust people who
keep telling me: trust me; hold my
hand and I'll show the way to nirvana.
Which he did repeatedly.
It is alright for us at this forum to
listen to him and his upbeat drumming
of higher gold. We know this and knew
it before he arrived at the scene. Let
him inspire us and let us buy quietly
more physical if we still have xtra
fiat. Just like the Hunts did with
silver. But, unfortunately, most of his
following are unsophisticated traders
and short-term investors who try to time
the buying and selling of gold-shares.
Those, repeatedly got clobbered.
Lately he has come around and proposes
to buy physical; but his recommendation
of buying just 5% of one's gold portfolio
is less than what one would expect of a
Mr.Gold in today's circumstances.
There are many fine points I could recite,
but I'd like to see who else harbors sus-
pecions. Cheers. OvS
mikal
(6/29/04; 17:09:49MT - usagold.com msg#: 122639)
Re: Ned
"I don't understand this guy! I have read his stuff for years, gold, gold, gold. Now, all of a sudden he's bearish on commodities. What's HIS problem??"
[Why not post a link to something useful instead?]
"Since this Iraq handover thingy, everything has gone to hell in a handbasket, gold plummeting, oil diving. Is the world all of a sudden a miraculous place to be?"
[Gold is not "plummetting, oil diving". I've see them going up and down and for a LOT longer than this week or even last.]
"The fundamentals for the USD is outright terrible, record trade deficits and accelerating negatively. Is there simply NO ALTERNATIVE to the greenback. Everything else, all of a sudden (or maybe not all of a sudden)garbage? I don't understand."
["NO ALTERNATIVE to the greenback... I don't understand."- Then why don't you read a few back posts, arcives or gold primers before you buy gold?]
"I have been reading alot of bearish stuff in the last couple weeks, everyone all of a sudden is a deflation EXPERT. What on earth is going on?"
[Everyone"? Why not frame things realistically instead of
being a pussywillow?]
"Sinclair used to be (relatively) a decent read but he has gone wacko all of a sudden. Everyone, everywhere is going to get IT! Iran, Saudi, huge conspiratory missions; I'm not sure if I can continue to read his ranting and raving anymore."
[This is misguided and defamatory "ranting" from the horses mouth without substantiation, self-restraint or respect.]
Ned
(6/29/04; 16:45:51MT - usagold.com msg#: 122638)
Has inflation peaked?
http://www.gold-eagle.com/gold_digest_04/droke062904.html
I don't understand this guy! I have read his stuff for years, gold, gold, gold. Now, all of a sudden he's bearish on commodities. What's HIS problem??
Since this Iraq handover thingy, everything has gone to hell in a handbasket, gold plummeting, oil diving. Is the world all of a sudden a miraculous place to be?
The fundamentals for the USD is outright terrible, record trade deficits and accelerating negatively. Is there simply NO ALTERNATIVE to the greenback. Everything else, all of a sudden (or maybe not all of a sudden)garbage? I don't understand.
I have been reading alot of bearish stuff in the last couple weeks, everyone all of a sudden is a deflation EXPERT. What on earth is going on?
Sinclair used to be (relatively) a decent read but he has gone wacko all of a sudden. Everyone, everywhere is going to get IT! Iran, Saudi, huge conspiratory missions; I'm not sure if I can continue to read his ranting and raving anymore.
Is there some good gold news anywhere? A month or two ago every professional and novice TA had this $480 number stuck in their head. Several on this site as well, no one is barking 480 these days, gold is struggling w/ $400.
Sentiment is horrid and that contrarian indicator business of said is really getting thin.....old in fact.
I'd like to hear something genuine, something with some meat on it, not the standard witchdoctor harping. Please, pretty please.
What is going on?
USAGOLD Daily Market Report
(6/29/04; 14:52:45MT - usagold.com msg#: 122637)
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.
(excerpts of closing market rap)
Gold futures on the Comex division of the New York Mercantile Exchange buckled over 2% Tuesday on fund and bullion bank selling spurred by the firmer posture of the U.S. dollar ahead of Wednesday's Federal Reserve decision on interest rates.
The most-active Aug contract settled $8.50, or 2.1%, lower at $392.80 per ounce.
Pre-placed stop-loss sell orders around $394.30 also paved the way lower by automatically adding to sell-side volumes, and dealers agreed that additional downside probes could not be ruled out over the coming days.
However, given that the geopolitical landscape remains very murky and the U.S. dollar must still carry the burden of huge budget and trade deficits, a sustained selling spree in gold is deemed unlikely any time soon...
The statement accompanying the U.S. Federal Open Market Committee meeting June 30 is likely to have a greater impact on gold prices than a potential rise in interest rates... How the Fed justifies its actions in its policy statement is of more concern, as an interest rate rise is already largely factored into prices.
Along with most other financial markets ahead of the FOMC meeting, volatility in the bullion market has been low in recent trade, with gold moving around the $400/oz level currently. Dealers said that this mirrors the relative stability in the foreign exchange, bond and equity markets, as the euro continues to hold around the 1.215 level and the S&P500 has held around the 1,130 level. Given this inactivity, dealers said precious metal trade is expected to remain on hold.
"From an investment standpoint, the precious metals are torn between the countervailing forces of the potential of a strengthening dollar (which will most probably weaken these markets), and the possibility of the addition of hard asset purchases by investors due to the quickening pace of inflation in the U.S.," said analyst Leonard Kaplan of Prospector Asset Management.
"Right now, surprisingly, the financial markets seem to be completely ignoring any sign of inflation and are totally fixated on the interest rate environment. The fact that U.S. producer prices rose by 0.8% in May is no consequence, it seems," he added.
Kaplan said that to a certain extent, the precious metals markets have already assumed their traditional summer trading postures. Price moves are at times sharp due to the currently thin market conditions, although the market are still virtually unchanged on a long-term basis. "The driver of gold remains the dollar ... exacerbated due to the thinness of summer trading conditions," Kaplan added. The total speculative net long position in Comex is currently 5.41 million ounces, down from 5.68 million ounces the previous week...
(visit url for access to full news, 24-hr global headlines)
Survivor
(6/29/04; 14:48:25MT - usagold.com msg#: 122636)
Life On A Confetti Roller Coaster
Interesting how silent we seem to get on these down days.
Remember that when the paper-ridden fools bid down the $price of your stash, they are simply doing you a favor by presenting yet another buying opportunity.
Nothing about a "price" swing of a few bucks or even a few grand is going to shake my faith that the real "value" of your stash or mine is any less than it was yesterday.
Enjoy the confetti soap opera while it lasts.
- Survivor
Aristotle
(6/29/04; 13:17:03MT - usagold.com msg#: 122635)
Gold Dinars for the Goldless Heathen
At the risk of grossly oversimplifying the case, think of the Gold dinar system as a social movement in which a goodly number of folks have an increased appetite for Bullion and barter.
It's great for Gold, sure, but I'd hardly say it'll "eat our lunch" if by that you mean bring about the demise of our fabulous fiat fabrications.
Long live (euro-styled) fiat! Long live FreeGold!
Two kingdoms in harmony! Hip hip HURRAH!
Gold. Get you some. --- Ari
Aristotle
(6/29/04; 12:14:32MT - usagold.com msg#: 122634)
What gives?
"Everything" in the market is up today, except for Polaroid snapshots of Gold. C'mon all you COMEX zombies! Get out there and bid that garbage up!! Sheeeeeeeesh.... thanks to all you guys I'm over here getting waaaaay too much Metal for my money and my back is in serious protest. (Whatever motivates those silver- and copper-heads, I'll never know.)
If anyone can't quite wrap their mind around the Polaroid example as an exercise in financial fantasy, try to picture the Gold futures market in your mind as though it were basically the same as a futures market for the Mona Lisa. The clowns playing the long side are either gonna wake up smell the coffee and get out, or else they're gonna try to hold for delivery because their contract price determined by their silly little market is a steal compared to what the da Vinci brought at its last (physical) auction.
In the end, how many of them do you think will be able to hang the masterpiece on their walls of their homes? The biggest rub is they won't even be walking away with enough cash compensation afterwards to let them all successfully pursue it on their own in the world outside of their bogus little market. Knowhatimean? Think about it!
Gold. Get you some now. --- Aristotle
TownCrier
(6/29/04; 10:41:23MT - usagold.com msg#: 122633)
Buongiorno!: "It would be nice to have them together..."
http://www.usagold.com/hall/haiku.html
Not only WOULD it be nice... it ACTUALLY IS nice. "Project Haiku" has been underway now for over a year-and-a-half.
Enjoy. (see url)
R.
Goldless Heathen
(6/29/04; 10:28:45MT - usagold.com msg#: 122632)
Gold Dinar; will it eat our lunch?
About a month before I found USAGold I was reading this other site(which I have lost the bookmark to) and, while it was clearly a sales-pitch like website, had some interesting things to say about the development of a 'pan-islam' gold(physical?) currency; the Gold Dinar. I was hoping someone here my have some reflections on this possible new? factor? Thanks
Belgian
(6/29/04; 09:36:12MT - usagold.com msg#: 122631)
@mamoose : ....unreliable reserve estimates....
Gold, oil or any other mining or production must be "profitable" ! The available reserves (products) have to be re-estimated in function of the existing prices/costs and profitability.
The bulk of global trading is done (settled) with the dollar fiat numeraire that is permanently losing global purchasing power...the more now that the dollar exchange rate is declining against all other currencies !!! And yet, we don't see proportionate, general price rises due to the killing global competition !
The one and only "technicality" that really matters is the US-dollar in wich this economic activities are taking place.
Look around you... and realise how everything ...EVERYTHING...has an "oil-element" in its existance. Be it as energy, transport, chemical...
We (luckily) don't realise how our entire modern prosperity is based on (finite) oil and all its derivatives !!!
This former benign neglecting attitude is changing and that's what all the ME (Russia-Eurasia) fuss is all about !
We are going to appreciate oil (the remaining reseves) as we should have done, already some time ago.
More on this, later...
Buongiorno!
(6/29/04; 07:59:31MT - usagold.com msg#: 122630)
Smeagol's Haiku
Smeagol's Haiku
Like peeling a sweet onion....
Layers of hidden meaning!
Can you save your little gems for us, then maybe show them all to celebrate $450 or $500 gold? It would be nice to have them together so's to print them off.
Also, have a feeling you are a midddle school teacher of sciences...if you are as good to your students as you are to us....they be lucky indeed! Chin-chin....Ting!
Buongiorno!
Toolie
(6/29/04; 06:51:48MT - usagold.com msg#: 122629)
Steel costs slam auto suppliers
http://www.detnews.com/2004/autosinsider/0406/29/a01-197773.htm
An update from the war on production taking place in the US.
Suppose that the US sat on all remaining oil reserves. We could and would simply charge whatever we wanted for barrel. Government would grow dependent on that level of taxable profit, to the point that any other business that fell short of this high level of "productivity" would go bankrupt, as they must compete with a world ready to trade any thing for oil. The foreign demand for oil would pin the domestic coal producer between the government high demand for productivity and the foreign coal producer's willingness to do anything for a barrel of oil. The US coal miner is doomed.
Such is the case for the people in the story snipped below. They simply cannot compete with foreign labors desire to obtain our infinite barrels of paper oil (dollars).
Snip: Fueled largely by China's seemingly insatiable need for raw materials, the price of rolled steel has climbed 57 percent to $617 a ton this month from $350 a ton in January.
..
"We will see multiple bankruptcies of suppliers within the next 90 days," said Craig Fitzgerald, a partner with Plante Moran.
..
Automotive parts suppliers are cutting capital spending, raising parts prices and trimming other operating costs to offset the rising costs.
..
"The worst is going to be here in the third quarter," he said.
..
"I just came out of a meeting with our employees," Zawacki said. "Our goal, jokingly, is to be the last man standing."
..
One thing he is also sure of: Steel costs will continue to create trouble for automotive suppliers in the near future.
"We've got a few small guys out there who are going to get burned by this. And once the supply chain breaks, the whole system falls apart," he said. "You can't build a car if one part's missing." (END SNIP)
///////////////////////////////////////////////////
I believe it worth noting how the participants refer to "free trade" within this article as if it were a transaction occurring at a frontier trading post. I am at a loss to think of a single transaction that I make that isn't regulated, subsidized or taxed. The IRS puts a 30% tariff on my trade with my employer before I see a dollar. Not to mention that the value dollar itself is managed. All trade is managed trade.
Have a golden day all!
mamoose
(6/29/04; 06:07:57MT - usagold.com msg#: 122628)
Norsk Hydro cuts oil, gas reserves by 6.6 %
http://biz.yahoo.com/rc/040629/energy_hydro_ormen_3.html
Another cut to reserves. True, it may be a technical reporting reason, but at best, it demonstrates how unreliable the reserve estimates are.
Belgian, I am truly frightened by what I see, and the lack of comprehension I see around me. Rather like owning physical gold, rather than paper. The day the sheeple wake up to reality, is the day that gold will no longer be available to these same sheeple. And NO paper gold will be redeemable for physical. All they will have left is pretty pieces of paper, with pictures of dead presidents.
Until there is comprehension, there will be no concentrated "Manhatten Project" to rescue us from that trap, oil or gold.
The hour is late.
Belgian
(6/29/04; 04:45:25MT - usagold.com msg#: 122627)
@Ari
Allow me to reflect on your posting...
The two main (opposing) gold-factions, namely $-papergold and -physicalgold, "use" the paper-POG to serve their two opposing goals. As long as $-POG remains an expression of the $-index (exch. rate), the dollar-paper-game is proceeding and the euro-competitor can shield behind a virginal innocense. All will cry that the gold-cabal is an exclusive $-cabal and the euro initiatives on goldpricing are simply non existant. Perfect so !
There is an evolving "optimum" for $-exchange rate versus the euro. This is determining the two different influences on the $-POG pricing. I see two cabals in action on the goldprice, $ and . It takes minimal two, to have a war, isn't it ?
The enormous global dollar-volume makes it (misleadingly) evident for all that it is the dollar itself that is determining what its optimum exchange rate is, throughout the world !? But, what about the FreeGold (spine)concept, behind the euro as the ultimate (incontournable) leverage against dollar volume...debt, death weight !?
Therefore, it is no surprise that the POG-behavior changed dramatically since the arrival of the euro. The two,...$ and both pulling/pushing on the golden string. Let Sesamstreet do what it has to do, Ari. Have fun !
Belgian
(6/29/04; 02:42:40MT - usagold.com msg#: 122626)
@TC _ @Mamoose
Those in the goldindustry (mining) who are ACTIVILY colluding with their specific banking counterparties, do see the danger of the coming "PHYSICAL GOLD" trend ! Indeed, Randy...they see their control-systemic, fading away.
The core, dollar-gold-cartel, knows that FreeGold is coming.
There is nothing that can sabotage this FreeGold anymore.
Their gold-managing function has come to an end. Their former privileges are shifting into other masters' hands.
The past Rotshield's declaration and the growing DMTC activity are circumstantional evidence that the real meaning of the WAG I-II are understood.
The Indian diamont community, based here in Antwerp, simply gently smiles with those $-papergold machinations/efforts. And these people are far from being uneducated poverellos.
And as I have been mentioning before...they tried to "certificate-paperize", Gold also in Euroland, years ago ! This was quickly aborted (by the founding euro-fathers) and the 1% VAT on papergold thrown into the papershredders ! Evidence that the Physicalisation-process is already an old and very well prepared one by the dollar competitor.
Did you noticed the NATO-Istambul incident !? Chirac asking Bush, why he was interfering with Euroland affairs on the Turkey-EU suggestion ? Others were quick to cover this up with hypocritical blablabla friendly diplomacy. I mention this in the context of Trichet as a Gold friend !
*** """ >>> The euro-FreeGold concept is determining the dollar-euro exchange rate *** """ >>> !!! Voila.
Mamoose : Forgive me for not argumenting on oil-reserves for the next 50 years (and nuances). I wish to avoid pissing brutally in holy houses with a long (boring)monologue. The truths are not served on a plate for broad public consumption. You have to find the closiest to the plausible truths, yourself. This is a very luxuary privilege that can be consumed by those who were lucky enough to organise themselves into real "independance"...independant thinking.
The all embracing media have been taken away the people's capacities to ask the "real" simple, obvious questions...logic ! We are being infantilisized on a massive scale.
Aristotle
(6/29/04; 00:21:39MT - usagold.com msg#: 122625)
The COMEX/Futures Marketeers
Another day in the life on Sesame Street... in a WGC-free zone.
What would happen if the clouds of obscurity suddenly rolled back and the greater size of public perception were brought in line with reality?
More precisely, how would the market participants behave if, say, operations like COMEX made it known that its futures contracts served at the same time as betting slips and ballots (tallied on the fly to adjust the odds/price) under which Polaroid snapshots of Gold were the basis for the gaming action?
Today's show was brought to you by the letters P, U, and by the number 0.
Gold. Get you some. --- Aristotle
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