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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.

FORUM ARCHIVES

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WELCOME TO THE ARCHIVES!

ARCHIVED DISCUSSION FROM 9/30/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Smeagol (09/30/03; 23:53:38MT - usagold.com msg#: 109648)
A Riddle (as disstinguished from a Contesst)
We can't make Contessts or mighty blasts on horns like Gandalf, but figures we might ask a ssmall Riddle of the Four Nines Fine People of this Forum, if those Great Ones don't mind, to ssatisfy curiousness. Nobody is obligated to answer! For Riddle purposes, the price of It is set at 385.00 per ounce, Silver at 5.10, and we asks,

Which do you think will double in price firsst, and why?

S.

Smeagol (09/30/03; 23:43:14MT - usagold.com msg#: 109647)
AAAUUGH! BAAAT!
Wait, Precious, look, it's the Great Albino Bat. Whew! Well met, Great Bat.

Yess, Silver film will sstill be with us for awhile, that'ss why we agreed only in Part to the prior possts. (we sstill uses a camera that lets us do what we wants to the poor film, versuss the new ones that won't do things (ssuch as let one take long exposures of things like Gandalf's rocketss))

S.

Great Albino Bat (09/30/03; 22:48:58MT - usagold.com msg#: 109646)
Doubts about the future growth of digital photography

The GAB suspects that the future of digital, which at present appears so bright, may turn out to be clouded by deteriorating capacity of the market to lay out the cash or credit necessary for the purchase of the related equipment: cameras, computers and expensive color printers.

Film cameras are cheap and development and printing facilites are everywhere, and their services are cheap, and will likely remain so, even if the price of silver were to rise considerably, as the cost of silver in film and prints is a very minor element in the final price of such film and prints to the consumer.

So, the GAB is not entirely convinced that digital will prove to be a substitute that will significantly displace film, going forward.

The GAB

Smeagol (09/30/03; 21:53:53MT - usagold.com msg#: 109645)
to Cometose and Specie-man
Digital replacing Silver

Yess, we agree in part, but the writing on the wall has been there for ssome time. The ressolution of the newer camera-machines approaches that of Silver-bearing film, at leasst for the likes of us, and will ssurpass it ssoon if hasn't already.

S.

Smeagol (09/30/03; 21:41:46MT - usagold.com msg#: 109644)
A Quesstion, and a trifle
Ssnip from Archives - USAGOLD (05/06/01; 09:48:35MT - usagold.com msg#: 53135):

"In the end, he who owns the gold, makes the rules. And it is the personal ownership of it that will carry the day on a practical level while governments will do, well ...... governments will do what governments do."

The firsst part is verry noble and desirable, yes, but we has a Quesstion - when It becomes Freegold at lasst, will the Law Peoples 'allow' us to own It? At thiss venerable
Table everyone knows It's proper place, but out in the Wilds are Law People that has their own agendas, and FreeGold in peoples' handses represents a loss of control that we expect Them to tolerate? Smeagol sees Law People ssimply 'declaring' It a 'controlled ssubstance', and 'regulating' it 'accordingly' Orc-talk, and not to our benefits, O no! Smeagol has been sstudying the Archives again and notices there is precious little devoted to thiss point. We musst not lose our heads in Its glimmer.

When darker times come and the Fiat Law People change their mind yet again and say ''By our Law, give us your Gold' with steel at our necks, then what will It be
worth? Maybe a lot to big Gold people, yes, but useless as rocks to poor Smeagol, if he can't keep It, or sell It, or trade It, or leave with It for fairer lands, what with the Eyes watching all, to take It, and throw us out into the cold? Looking at recent history it is hard for us to be optimistic. Sss... maybe we are wrong... we certainly hopes so.

...and now for ssomething completely different...

Paper is not alone as Fiat. We counts out fifty US copper-plated zinc tokens and weighs them - 125 gramss (about 4 ounces), sso forty thousands of these tokens weighs 100 kilo-gramss (about 221 pounds). If the copper iss 5% of the total, the value of the metal (we iss generous - 100 cents a pound for copper and 50 cents for zinc) in this pile of tokens is $116.00. Leaving $284.00 of "Full Faith and Credit". Thiss is a choice? (cackle) No, 'tis a GIVEN that we trades this token pile for a single ounce of It in these times!!

S.


Cometose (9/30/03; 19:41:04MT - usagold.com msg#: 109643)
Specie Man
THamk YOu !

HOW CLEAR it is ..... hiding in plain site.....
I would have never got it if you hadn't SPOKEN it out LOUDLy and CLEARLY....

What you said makes resounding sense logically and plainly.

specie-man (9/30/03; 19:14:40MT - usagold.com msg#: 109642)
Kodak and silver
Regarding Kodak's recent announcement to go digital -
Could it be that the higher-ups at Kodak know that a sharply higher silver price is imminent, and so that is why they are now "bailing out" ?




specie-man (9/30/03; 18:32:50MT - usagold.com msg#: 109641)
RE: Hoi Ari
Belgian wrote:
Posting fatique,...september blues,...fabricating a garden pond,...whilst a lot of Gold-(related)-Things do happen :

Interesting - I've been working on a garden pond as well. Moved about 3000 pounds of rock UPHILL today. I can see now how hard it would be to mine for gold using hand tools (without cheap petroleum energy and related equipment).



Federal_Reserves (9/30/03; 17:18:00MT - usagold.com msg#: 109640)
SM Collapse Path
The Dow could hold 9000 going into OCT 10th, next full moon.

Then the crash.

Trade deficit reported on Oct 10th.

Most crashes come a few days around the full moon.



Belgian (9/30/03; 16:18:46MT - usagold.com msg#: 109639)
Towncrier / Ten Bears
Randy : Fortis (Belgian-Dutch) bank is pulling out of the US ($). They encountered a lot of shareholder's criticism on the motivation/explanation of selling a profitable (!) US enterprise ! How can this Fortis' person state that the US$ will not decline dramatically against the euro, whilst running away from the dollar-block and repatriating for EU internal expansionary investment, where the market for their products has already matured !!!??? Fortis knows much better (iii) than that and has good reasons to pull out of the states and bring the eggs back to Euroland.

Did you heard Tony's (survival) speech, today ? He re-iterated, rather strongly, that the UK should join the EU (EMU) and take a leading role in the EU. I keep on taking Tony with a big block of salt,...but nevertheless liked his (pretended) passion (rationale) towards the EU. This, as a follow up of the actuality on your A/FOA posting.

Isn't it strange, very strange, that the Japanese do make their massive interventions so dramatically public, at present !?
The name Hashimoto ('97 Gold-threath) flashes through my memory. What has Japan done wrong for having to carry a big chunk of the dollar-decline burden ? Is Japan condemned to serve the US($) for ever, due to the unstoppable Chinese force ?

Ten Bears # msg. 109633 : Fully agree with your analyses in the perfect wording.

Dollar/Yen exchange rate might go to as low as 95 (minus 10%-15%) (111 today). But let us remain cautious when there is seemingly a *consensus* on projected targets. How are japanese exports going to compete with the chinese, with the disadvantage of 15% ? Japan cannot use the Gold weapon to lower its yen against the dollar ! Adding to their goldreserves for compensating dollarreserve loses wouldn't work. The Nikkei lost 800 points in the yen rise. Japanese banks face the Nikkei danger zone (sub 10,000), again !



TownCrier (9/30/03; 15:31:23MT - usagold.com msg#: 109638)
Eurosystem reserves -- a clarification
Drat. I omitted the word million with respect to the weekly change in gold reserves.

To be clear, while the foreign currecy was down 400 million euro on liquidation, the gold reserves were down 57 _million_ euro on the five tonne sale last week.

R.

Belgian (9/30/03; 15:18:46MT - usagold.com msg#: 109637)
American Wealth ?
95 Million Americans (35%) have 6 1/2 TRILLION dollars invested in Mutual Funds ! If 15% of these 6 1/2 Trillion $ should go for Gold...they could buy 5,000 years of Goldproduction (150,000 tonnes), stashed aboveground and valued at 385$/Oz. If it was only 0,15%, they would have accumulated, theoretically, 1,500 tonnes in for instance a panic rally/flush ! Imagine that a majority of these American investors would follow the general advise/wisdom of having 3% to 5% (30,000 tonnes to 50,000 tonnes) of their confetti in Gold-Wealth ?
This very simple math ,illustrates WHY ordinarry folks/savers *MUST* stay away from Gold ! The ETF is a handy *canalization* for an absolute minority that smells a rat and does remember something about the safety of Goldrefuge ! The liberalization of the goldmarket in China is NOT organized with papergold (ETFs) but with the distribution of Physical Gold amongst Wealth savers !!!
And the sun nevers sets on the China continent and no problems are made about the distribution or the holding of Physical in one's fist(s). Are these Chinese (Easterners)dummies ? Idem dito for India and many other regions.

Gold belongs Physically in one's hand and no other form has equal value. Empower yourself with it !

TownCrier (9/30/03; 15:11:56MT - usagold.com msg#: 109636)
ECB foreign exchange reserves tell a tale worth hearing
The weekly consolidated financial statement of the eurosystem remains a good study in contrast. Especially, I anticipate, next Wednesday's release which will reveal sizable dollar value losses on one hand with sizable gold value gains on the other. This being the result of the quarterly mark-to-market revaluation operation that takes place today. But we will cover that ground next week.

In the meantime, the statement available today for the week ended September 26th reveals the following.

The net position in foreign currency has been allowed to dwindle in value by another 400 million euro to 195 billion in the natural course of business during the past week. At the same time, there was a 57 euro reduction in the value of reserves in the form of gold and gold receivables due to a 5.3 tonne reallocation "consistent with the Central Bank Gold Agreement of 26 September 1999". Yellow(ish) reserves now stand at 119.722 billion euro in value.

Again, today's revaluation, when the extent is revealed next week, will dwarf these figures as insignificant when the dollar's quarterly losses (of two cents; partially offset by yen gains of 7) are set beside gold gains of over 25 euro per ounce.

You too can follow this easy example -- walk "in the footsteps of giants".

R.

misetich (9/30/03; 15:01:27MT - usagold.com msg#: 109635)
Martin Wolf: A very dangerous game
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059480235461&p=1012571727088
Snip:

Asia, in particular, is providing the US with goods and services in return for overpriced pieces of paper. The stock market is expensive, by historical standards, while US long-term interest rates provide little protection against a sizeable devaluation. It is hardly surprising that foreign governments have had to provide substantial funds: between December 1999 and June of this year, world foreign currency reserves rose by $870bn, of which $665bn was in Asia alone.

These transactions allow the world's richest country and sole superpower to spend far beyond its means
..................
This year, according to the IMF, the US national savings rate will be an astonishingly low 13.6 per cent of GDP. The US gross investment rate, though much higher, at 18.3 per cent of GDP, will be below the rate in the eurozone, Japan and newly industrialised Asia, let alone Asian developing countries
................
When gullible foreigners can no longer be persuaded to finance the US, the dollar will decline. Since US liabilities are dollar-denominated, the bigger the decline, the smaller net US liabilities to the rest of the world will then turn out to be. In this way, the last stage of the "conspiracy" will be partial default through dollar depreciation.
..................
Both the providers and the users of the funds have, hitherto, been happy with the world of exploding US foreign liabilities. But the game has to stop.
****************
Misetich

Gullible foreigners will get stuck holding the bag, sort of speak - yet are we to assume that they're really that gullible, unaware, merrily going along the US designed path?

or could it be possible that some of the "gullible foreigners" are ready to pull the rug from underneath the Anglo Axis Superpower?

Lets stay tuned.

All On Board The Gold Bull Express



Black Blade (9/30/03; 14:54:04MT - usagold.com msg#: 109634)
The Gold Bull Is Back and He Is Ready To Rampage Through Wall Street!

Due to time constraints and soooo much info on the markets and what will push gold and silver into a rampaging Bull was not entirely covered in today's DMR. Probably just as well. But this is not a typical Precious Metals story. Yes, the economic data today was exceptionally grim and with not one - but two interventions in the currency market by the Bank of Japan at the behest of the Ministry of Finance (one in the Asian time zone and again in the New York time zone). In an unusual admission by Japanese monetary authorities, the Japanese "stealth" intervention was applied twice to the tune of over $2 billion dollars helping a slight rally in US Treasuries.

However, this morning I was awakened by a phone call from a friend in the Energy Patch. The injection rates for natural gas have been very strong and should continue to be strong in this "shoulder season". That is due to mild weather ahead of the winter withdrawal season (in another 6-7 weeks), we could have nearly 3 tcf of NatGas in storage. However, this natural gas was bought by utilities at higher prices and the savings will not likely be passed along to consumers should the spot price decline. Now remember we had all time record storage before last winter (over 3.2 tcf) and ended the heating season with all time record lows, and this during an economic recession. Here's where it gets interesting � we will not get anywhere close to last years record storage level and Canada that has helped us out with 15% of our supply over the last few years will not be much help this year as they have their own storage shortfall. Also, Mexico has become a larger net importer of US NatGas. Lat winter was fairly mild to normal as well. Almost every forecasting agency is calling for a colder winter this year and the requirements for storage have grown considerably. We could be looking at another corporate profit killer in the form of higher energy prices.

That said, it has also been revealed that Saudi does not have the 13 million bbl/day production capacity as had been expected. We now find out that they now can only hit 9.2 million bbl/day and that Oman (even with the expertise of BP) are in serious sharp decline in production and they are pulling out all the stops. Now we learn that Iraqi reserves may have been grossly overblown as well, much less than the reported 125 billion bbl of oil. Not only is Iraqi oil infrastructure in disarray and terrorism a growing problem along with attacks on oil pipelines, but the Kirkuk Field oil has to be sent to Ceyhan, Turkey settling tanks due to contaminated oil before shipment. The OPEC quota production cuts may have much to do with declining production and the inability to ramp up production. China has also been on the prowl for oil imports lately along with the Japanese cutting deals with Iran for oil. Keep your eyes on this growing problem in coming months. Meanwhile watch for a fight on Capital Hill over the proposed "Energy Plan" as Republicans push to find a way to delay the inevitable and Democrats fight to delay any possible solutions for political gain in an election year. Should get "interesting".

Even though the US Bureau of Labor Statistics discounts oil (read energy) as being unimportant. The reality is, it is a critical problem that will create some very serious problems for any questionable tall tales about an economic recovery in the US � even a "jobless recovery" that's becoming more jobless all the time. If this winter is normal or worse then it should prove to be very ugly. Now's the time to prepare if you haven't already and protect your investment portfolios with "insurance" � precious metals.

- Black Blade


Ten Bears (9/30/03; 14:52:28MT - usagold.com msg#: 109633)
Belgian 109627
Belgian, thanks for your post 109627. I appreciate your work and have gained considerably by reading your posts. A brief summary of my take on the derivative growth is outlined below.


"Nothing happens in politics by accident". And economics is a subset of politics.

The Exponential growth of derivatives since the early 1970's has been a frequent topic at this site. This post reviews some of the points previously made and hopefully adds a new comment or two.

It is no more an accident that the number and types of derivatives greatly expanded simultaneously with Nixon's decoupling gold from the U.S. dollar than it is an accident that the income tax was initiated simultaneously with the establishment of the latest incarnation of an American central bank in 1913.

The income tax is necessary in a debt money system to pay interest on the created debt and to remove purchasing power from workers in order to keep them subservient. Derivatives are necessary with a purely fiat currency scheme to control commodities (including currencies) pricing and regulate the rate of currency (purchasing power) depreciation. Fiat/debt currency, (loaned into existence), requires perpetual growth in order to survive. Perpetual growth in derivative amounts is necessary in order to continue control of commodity prices.

Imbalances, including surplus purchasing power, have been rotated into various sectors, most recently equity markets in order to absorb surpluses. An example: the multiple billions removed from the baby boomers 401k accounts will keep them working, and paying taxes for a while longer (if they can keep jobs). Many gold advocates expect that excesses are soon to flow to gold and other non-paper investments.

Any system or systems in a finite environment requiring perpetual growth for continued existence, at some point, encounters limits. One may visualize the current debt- money derivative regulated system as an inverted pyramid balanced at the point on the edge of a razor and growing exponentially at the base. Any sustained imbalance will cause it to fall off, one side or the other, and the leverage is continually increasing as derivative amounts are added.




TownCrier (9/30/03; 14:50:58MT - usagold.com msg#: 109632)
Propping the dollar. How long can the musicians stand to play this tune?
http://biz.yahoo.com/rf/030930/markets_yen_2.html
NEW YORK, Sept 30 (Reuters) - Japan's Ministry of Finance sold yen for dollars on the foreign exchange markets on Tuesday, a ministry official said, acting through the U.S. Federal Reserve in a move that jolted the dollar sharply higher.

"Today we have conducted intervention through the New York Federal Reserve Bank. It is dollar buying and yen selling," the ministry official said.

The decision of the ministry to declare it had undertaken intervention on the same day as it occurred breaks with the approach the Japanese government had adopted for several months of declining to comment.

"It reminds us that the BoJ is still going to be a presence in the market and that they are willing to shift tactics to remind people of that," said Daniel Katzive, foreign exchange strategist with UBS in Stamford, Connecticut. The BoJ "felt they had to so something a bit more dramatic."

"This makes a mockery of the G7 statement," said Neal Kimberley, senior foreign exchange manager at Bank of Tokyo-Mitsubishi in London.

"What this (Japan's action) also implies is that the U.S. Treasury will not allow the dollar to collapse," said [Fortis Bank's Philip] Capone.

-------(see url)------

At least, not all at once and not without a humiliating struggle.

Physical gold is the logical choice to serve as your principal wealth holding.

R.

TownCrier (9/30/03; 14:25:34MT - usagold.com msg#: 109631)
Another archive prompting from a friend...
http://www.usagold.com/goldtrail/default.html
Some coalescence of thoughts on an important topic.

Today Belgian politely reminded us of the following monkey on our back:

(Belgian msg#: 109620) -- "The global monetary system is NOT managed (never was) for the benefits of the broadiest number of global participants !!! This creates increasing hostile and destructive, unfair competition. Certainly so when it is always the dollar-gladiator that is the winner and takes it all. Will it be so, again, this time ? I don't think so!"

Coincidentally and happily relevent to this same topic I discovered in my email this afternoon a welcome prompting by one of my astute friends to have a look at a two-year old post from FOA'a Gold Trail. Here is the tie-in with today's discussion:

(FOA 10/25/01 msg#125) -- "This whole IMF dollar system has always been based on an expanding fiat theory that swells GDP over time. Investors that bet on deflation coming along, after each of our bouts of inflation, were badly burned as deflation was overcome. Economic function returned, essentially because price inflation could not rout the overall market for long credit.
+
"The flaw in all of this was in the reserve structure of our Dollar IMF money system. The fact that the world had to walk, lock step, with our money policy meant that their goods production would almost always be cheaper than ours; keeping local US price inflation under control. In other words; local US based price inflation could not get out of hand as long as the rest of the world was willing to use their economic production to control it by selling into our expanding fiat system. In this, the dollar could be inflated without end while our credit markets functioned in a non inflationary environment. But there is an end."
---

And with that bridge now built, here following is the post in its entirety. See url given above for access to more.

Bottom line: The more you understand the monetary system as it truly is (rather than as it has been spoon-fed to you by either fringe zealots or mainstream analysts), the more you realize the importance of personal holdings of physical gold to form a significant component of your portfolio.

R.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

(FOA 10/25/01 msg#125)
More Thoughts and Comments from the Trail House
Somewhere in the 1970s era I was exposed to the thinking of several different deflationist. It seemed that all of their conclusions came to the same end: that dollar deflation would rule the day, no matter what. Mind you now,,,,,, most of them were split on the finer points of the issue, but for all of them; inflation would have its day even if prices would rise somewhat. Deflation was always the final outcome.

One of the central themes, in these thoughts, was concerning how this coming deflation would impact plain old residential real estate. You see, most of these guys advocates selling excess residential property because it was, sooner or later, going down for the count. Mostly because the mortgage markets would be destroyed in the deflation and nobody could buy.

-- Note: The reader has to understand that these discussions were directed towards people and investors that had plenty of net worth. And I do mean Plenty! The argument wasn't about how to survive; rather how to balance a truly conservative estate portfolio. --

As time has passed we can see several major flaws in their thinking. Flaws that cost them a bunch of credibility, if not personal money. One point, that I have touched on here several times, was in understanding just how much ourselves and our economic structure would and did evolve into accepting fiat money use. Even though it was, "god forbid", separated from gold.

In one area alone, the bond markets, investors reacted far different than deflationist thought they would. Twenty ++ years ago, it was expected that just gross increases in money printing alone would be enough to crash the bond markets. Not talking about price inflation here, but money inflation and that should have started a deflationary fall in our credit markets. It almost happened, several times, but never followed thru. It seemed that the market function had evolved to accept fiat inflation as a prerequisite to modern economic function. In a like comparison to today's thinking; investors assumed that as long as we had an expanding economic stance, sourced by inflating fiat supply, price inflation would not impact long bond credibility. We saw confirmation of this over many years. We saw that our credit markets, especially long bonds, were used in spite of the price inflation threat. Indeed, there was a ready market demand for bond purchases.

In hind sight, long term holders of bonds did do very well if their position was part of a balanced holding and they didn't need to sell at bad times. Even now, dollar bonds have gained as rates are pushed lower.

Back to the thought:

This whole IMF dollar system has always been based on an expanding fiat theory that swells GDP over time. Investors that bet on deflation coming along, after each of our bouts of inflation, were badly burned as deflation was overcome. Economic function returned, essentially because price inflation could not rout the overall market for long credit.

The flaw in all of this was in the reserve structure of our Dollar IMF money system. The fact that the world had to walk, lock step, with our money policy meant that their goods production would almost always be cheaper than ours; keeping local US price inflation under control. In other words; local US based price inflation could not get out of hand as long as the rest of the world was willing to use their economic production to control it by selling into our expanding fiat system.

In this, the dollar could be inflated without end while our credit markets functioned in a non inflationary environment.

But there is an end.

A money system like this has a definite timeline and that point is reached when the world can move away from keeping price inflation low in the US. That point is reached when Another money system comes along to challenge the dollar and, in the process, offer these other goods producing countries a chance to buy some "lifestyle" for themselves.

At first, the show is dull as investors keep right on buying into the dollar argument above: that an expanding fiat base builds non inflationary growth. This is one reason traders still buy US long credit, not to mention chasing rising dollar exchange rates; they expect more of the last several decades of economic theory to keep right on going. It won't.

The dollar faction saw its match early in the 90s as the Euro was taking shape. To counter this threat, as I have outlined here in several ways, they promoted derivative hedges as a way of insuring dollar dominance. These hedges, including gold derivatives, only served to leverage the entire dollar / IMF system beyond its ability to serve as a real fiat money system, today.

I mean; that our whole dollar landscape has now become just a trading asset arena: its now evolving away from any meaningful currency use to trade for real goods. It can head in no other direction because our local economic structure, the USA economic base, cannot possible service even a tiny fraction of the buying power currently held in dollars worldwide.

So what does this have to do with Real estate?

Take a look at any broad section of the US; Northeast, SouthWest, etc.. If any of the deflationist were correct, their reasoning back in the late 70s and early 80s should have produced at least an average fall in Residential real estate. Can any of you find an "average" of property today, that is lower than early 80s prices?

Of course I'm not talking about the spikes in Hawaii, New York , Denver or San Francisco; those are just blips on an ever rising inflation scale. Even if they fall some from here, it isn't part of a deflationary act playing out. Average home prices will rise all across this country no matter what the future economic holds. A super inflationary stance by the Fed means that even unemployed workers can buy a house and pay for it! Watch how this all comes about. The dow will not be much different when seen ten years from now; a drop to 5,000 then off again, is a real possibility! The same is true for anything perceived as something real: "even silver" (grin).

The difference is in the drastic ups and downs derivatives will place on all asset markets. Silver may hit my .50 before taking off and so will many other real assets. My point is that we are on an "end time run" in fiat dollar production that will soon produce a spike in real price inflation that crushes hedge vehicles. One item alone, physical gold, because it is the main wealth asset behing the next currency system, will outrun everything by a wide margin. No matter the derivative's hold on it!

As the Euro builds a base, it will drive an inflationary recognition into our credit markets, then freezing up our derivative markets. That perception will fuel a complete failure of our bond markets and force the fed to buy up any and all credit; paying in full. If needed, Bush and congress will see to it that enough money is printed so we are paid in cash for everything! Don't laugh, this is where we are headed. In the mean time, whether or not our economy is growing, stalling or failing, will have little or no impact on price inflation.

You see, living with real serious price inflation goes something like this:

---- "Honey, I talked to Fred again, he can't sell his house! Poor guy, he has had it up for two years now and has to raise his asking price again. No takers, yet. The last couple was just about to close but took a month too long; they almost got the cash together, too. He backed out to raise the asking price, again. Oh well, that's not so bad, we had to jump ours up three times before selling."
----------
Inflation runs crazy when a money system is forced to "print out". We will "print out" our dollar, too. Getting there just takes time and an alternative system to cause it.

In the mean time look for the premiums on cash bullion and cash coins to begin rising well above contract and futures prices. I have been watching for this confirmation for some time. This one signal is all we need to confirm that a breakdown and total failure of dollar based bullion markets is near. I expect we will hear and excuse like this:

-- The settlement price on future contracts is really a wholesale price. Besides, because we are moving into full cash settlement of gold, without physical delivery, you can take this wholesale price and add whatever premium is necessary to buy your physical gold. No matter that our wholesale settlement cannot match a payment for bullion cost plus premium; just use more leverage to buy more contracts than you need for outright physical. See,,,,, it all plays out! (BIG BROKER SMILE with little horns sticking out of his head) ----------

------------

People, take a hard look at Randy's post on the main forum. His ----# 64186 Monetary choices -- ECB holds rates solid, dumps dollars------- goes a long way to showing the mindset of the Euro system. (thanks for sharing, Randy) This stance is very appealing to a whole host of nations outside our dollar faction world. We have but to look no further than Britain to see that this is true.

------Blair says 2002 EU summit key for euro, economy -----
Thursday October 25, 2:41 PM EDT --

LONDON, Oct 25 (Reuters) - British Prime Minister Tony Blair said on Thursday the success of the euro and the wider European economy hinged on the EU's ability to push through
long-discussed economic reforms next year.

Blair, launching a Belgo-British conference in London, earmarked the European Union's Barcelona summit next year as a key staging post and said the success of the launch of euro notes and coins was crucial not just for the 12 euro zone members but for Britain too.

"We have an interest in this," he said, stating his policy that in principle his government wanted to join a successful single currency.

"Barcelona will be critical in how the world views the development of the European economy," Blair said.

If the summit is a success, it will help make the euro a success, he said.-----------------

------------

Another thing we can count on and I mentioned this before:

The moment England is seen as even a "virtual" member of the Euro club; the world will jump on every physical ounce of gold available at whatever dollar amounts anyone will part with it,,,,,,,,,,,,,,,,, and sell every paper gold play into the dirt in the process!!

I say, know your dealer, buy your bullion early and watch for this act to begin. It's closer than you think!
------------

Thanks for hearing my thoughts
TrailGuide

USAGOLD Daily Market Report (9/30/03; 14:18:18MT - usagold.com msg#: 109630)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Afternoon Gold Report by Jon H. Warner 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.

The Bull is back! Even two currency interventions by the Japanese Ministry of Finance through the Bank of Japan today could not constrain the Bull on a day of horrid US economic data.

USAGOLD / Centennial Precious Metals, Inc. (9/30/03; 13:30:13MT - usagold.com msg#: 109629)
Gold priced right to help you build your financial foundation
http://www.usagold.com/gold-coins.html





Federal_Reserves (9/30/03; 13:28:18MT - usagold.com msg#: 109628)
Faith in the FED
is going to tank. Too many job losses even as they claim the economy is recovering, the people see the the truth.

The Minstrel's of Greenspan, are starting to sound like the Iraqi Defense Minister. Nothing seriously wrong
with rose colored glasses I guess, but when you have blinders on, at risk is your credibility, which strikes at
the heart of trust we place in the Federal Reserve.

http://biz.yahoo.com/rf/030930/economy_fed_guynn_1.html

The PMI out of Chicago was way off expectations today. Way off. Last week durable goods failed to spark.
Industrial production is slowing along with housing starts. There are no jobs, unless you want to work part-time
at Wal-Mart selling cheap goods from China made by slaves in prison camps. The trade and government deficit
approach banana republic levels at 1 trillion almost 10% of GDP.

A host of weaker than weaker than expected numbers are popping up, like weeds, in the facade of recovery.

Where's the leadership? Where's the plan?

I'm holding gold until I find better.


Belgian (9/30/03; 13:16:08MT - usagold.com msg#: 109627)
Misecellany....
...The conventional wisdom of 5% Physical Gold in your Wealth-Bag...
I remember having posted about 100% in Gold...at a much lower dollar-price...
Haven't been lowering that percentage...

What a nice idea to bring a nice stash of Physical Gold " in one particular place" under the ETF paper umbrella. A sitting duck for any kind of confiscary-like measure. The shareholders can keep their paper-gold-share of course ! How smart !?

A. Greenspan (1967) : Under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth !
*** ECONOMIC STABILITY AND BALANCED GROWTH !!! ***
That's what Gold's future is all about. We have landed in an exponentially progressing situation of UN-stability AND UN-balanced growth !!!

...The realization that the gold standard is incompatible with chronic deficit spending...(confiscation of wealth)
We have an increasing * CHRONIC DEFICIT SPENDING !!! * And UN-limited expansion of credit...NOWWWWWWWW !

CONFISCATION OF WEALTH...while Westerners (!) are absolutely convinced that they own wealth in/with their paper !!! The Chinese are NOT going to let their "wealth" been taken away under any circumstances or means.

Note how the POO is smartly adjusting to the dollar's weakness and has very, VERY little to do with offer/demand !
Same for the POG.
The dollar's weakness has also nothing to do with its offer or demand. We simply live in a dollar cosmos and there is no such thing as more or less cosmos.
The dollar-expansion (flooding) has already gone beyond directional control.

Japan's interventions (billions) : Selling yen and buying dollar. Under what form are these currencies sold or bought ? Notes...? Treasuries...? Digits...? Who are the japanese counterparties in these interventions ? The markets...? Who, specifically, in the markets...?
What is the "meaning" of a one Trillion $ daily (250 Trillion/year), forex-market, against a world GDP of only 40 Trillion $ ??? And this in a near zero IR environment, here to stay for probably some more time ! I still don't get it and see it nowhere, understandably, explained. The same question goes for the 140 Trillion (notional) on derivatives. Or is it the 44 Trillion dollar liabilities against global GDP of 40 Trillion $ ?

Would it be possible to falsify everything without the derivative instruments (yesterday and today's roller coasters) ? Is that the reason why derivatives are NOT regulated as they should ??? How unconstitutional is the monetization of debt (Treasury buy backs with printed confetti) ???

The POG remains (conveniently) contained, but the POO seems to have more pricing power. This is strange, given the ME situation (dollargrip on oil) as we percept it to be. Has Russia (second to OPEC) become the re-inforcer of OPEC (through Iran and others) ??? Will the Chinese (Far East) become the re-inforcers of Gold ??? Or are they already in the business ?



Gandalf the White (9/30/03; 11:03:24MT - usagold.com msg#: 109626)
<;-)
JUMP SPOT, JUMP !
near the close -- looking golden !


Gandalf the White (9/30/03; 10:43:57MT - usagold.com msg#: 109625)
Sir Zhisheng
I too "Promise" !
<;-)

Zhisheng (9/30/03; 10:36:43MT - usagold.com msg#: 109624)
Touche, uncle, and roll over on my back with paws in the air!
@Gandalf the White
My compliments to Lady Waverider: takes grit.

But Gandalf, if you lay off the "Dr.", I promise, in the name of the Holy Pink-toed Prophet, to never EVER take liberties with your title again.

BTW I hear that eating too much of that still wet newly printed green stuff causes the BLOAT, in canines as well as bovines and homo sapiens.

Gandalf the White (9/30/03; 10:11:27MT - usagold.com msg#: 109623)
Lady Waverider and Sir Dr. Zhisheng
OOPS, looks as if I got a little bit TOO MUCH VOLATILITY mixed in the food for SPOT and SPIKE today !
---
BTW Sir Dr. Zhisheng -- Did you know that Lady Waverider is working on her PhD also ? Soon, I can call her Lady Dr. Waverider also.
This PROVES that there are LOTS of very smart Goldhearts at the TABLEROUND !
<;-)

Gandalf the White (9/30/03; 10:04:30MT - usagold.com msg#: 109622)
Sir Clink! --- YOU HAVE MADE MY DAY !!
http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P
Clink! (9/30/03; 06:35:59MT - usagold.com msg#: 109610)
@ Gandalf - A scientific breakthrough !
===
THANKS, Sir Clink!
I was hoping the they would realize that they had made ANOTHER error ! FOUR days in a row !! RED "O"'s -- then NO RED "O"'s -- then RED "O"'s again --- and now NO RED "O"'s !!!! They REVISED the low price each day !!
<;-)
---
VERY HARD TO GET GOOD SERVICE nowdays ! THAT is why I deal with the USAGOLD - Centennial Precious Metals,Inc. people !
THEY have the BEST SERVICE and do not make ERRORS !
BUT, I am the all time LEADER in ERRORS !
I even hold the Major League Record ! (look it up !)
<;-)

Waverider (9/30/03; 09:27:50MT - usagold.com msg#: 109621)
Noted strategist sees gold bull market
http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={6FEFCC80-A7C1-4102-8B07-B962F76BC15A}&siteid=mktw
By Thom Calandra, CBS.MarketWatch.com

"Noted global strategist Frank Veneroso, in his first published interview since 1999, says the world will see significantly higher gold prices, but with volatility to match. Here are excerpts from my interview this week with Veneroso..."

Belgian (9/30/03; 08:54:58MT - usagold.com msg#: 109620)
The ongoing dollar-decline....
Minute after minute, financial commentators fire their visions (?) about "who" is going to profit (?) from the dollar-decline and who will have to carry the (net) burden.

They see this floating currency circus as an arena with gladiators, where the last man standing is the winner !
The global monetary system is NOT managed (never was) for the benefits of the broadiest number of global participants !!! This creates increasing hostile and destructive, unfair competition. Certainly so when it is always the dollar-gladiator that is the winner and takes it all. Will it be so, again, this time ? I don't think so !

In the old days, people moved to where the jobs could be found. Today, jobs move where the people are and this happens on a global scale now! In the mean time, capital, huge piles of capital, moves and makes artificial waves on wich carry trades of all kinds can surf. THIS IS NOT AN *ECONOMY* ...but a "financial" tower of Babel !!! Or a pathetic/desperate search for profit (any kind of) on debauching capital flows, highly concentrated in the hands of what is percepted as the PTB (economic rulers) .

A further declining dollar plus (forced)zero interest rates, are NOT going to bring the lost jobs back and are NOT going to create new "real" (genuine) jobs in the West (EU-US) !
The job and profit- *quality* are on a constant decline in parallel with the detoriation of the dollar-system and its derivatives (other currencies). The Eastern fortune-makers do know how temporary their windfall might be. Westerners remain complacent about their old power.

The dollar-decline is a too nice word/description for the further ongoing dollar-devaluation (since 1933 > 1971 >...) as to serve the hyper-concentrating expansion of the liberal globalization (oeffff).

Soon the Antwerp (Belgium)dockers (N� 3 port on the world's ranglist) will be unemployed when the ships are allowed to bring their own dockers with them, at 1/10 (and less) of the present handling costs !!! How does one cure, "structually", such an economic (un)reality ??? All our Eastern competitors are NOT going to price themselves out of the global(ized) market(s) ! No way !!! Competitive currency devaluations and job exportations, definitely have their limits. How will or can Japan (second biggest world economy) survive a further appreciation of its currency whilst China (next door) grows at 8%/yr ? What if China swallows Japan !? The East and Far East have much,...MUCH more room for (almost limitless) flexibility than we have, regardless of our currency-maneuvers !!!

Watch the forex-circus at the open now, and see how mega-moves happen and are neutralized (?) within a matter of minutes ! THERE IS SOMETHING ROTTEN IN THE STATE OF DENMARK... W.Shakespeare !

Repeat : Gold will NOT stay out of this in the nearby future !


steady (9/30/03; 08:29:54MT - usagold.com msg#: 109619)
(No Subject)
Z U B A Z O O M Z U B A Z O O M!

Zhisheng (9/30/03; 08:25:48MT - usagold.com msg#: 109618)
Euro Pace
The rise of the Euro over the Dollar these past two days is remarkable. For example, the difference of this morning's high and yesterday morning's low is now more than 3.25 cents (December contract).

This translates into $12.50 increase in the price of gold just to keep the the Euro price of gold constant.

The pressure in the cooker intensifies.

alkahulik (9/30/03; 08:08:33MT - usagold.com msg#: 109617)
(No Subject)
Too many gold bulls. I hear this a lot lately. Well how about if there were too, too many gold bulls. In fact, so many gold bulls, that there were no gold bears. What if everyone wanted gold. Well, there ain't enough to go around. Got some??

Cometose (9/30/03; 08:03:27MT - usagold.com msg#: 109616)
Silver
It looks as though the silver market is having its own word today regarding ....the impact of Digital Photography on the Silver demand worldwide.....

and it's on the rise again inspite of the spanking given to Silver Miners last week....

Looks like a lot of Drama and illusion happened last week in the markets due to KODAK comments and for their benefit...

DID they get what they wanted.....if they were buying CouerD"Aliene or Hecla ......YES!!!

The WEEKLY Charts on these metals look very strong.....

Tim WOOD the DOW THEORIST from Louisiana..... stated over the weekend that last weeks break below 9381 on the DOW did substantial technical damage on the Charts and that this looks like confirmation that we are headed into a Seasonal Cycle low....What is yet to be seen is whether we will break the October Low of 2002.....Considering what is happening in the GOLD MARKETS and in the currency markets re the Dollar on the heels of last weeks meeting in Dubai...
we could have lots of hot air coming out of bubbles soon...

Zhisheng (9/30/03; 08:01:42MT - usagold.com msg#: 109615)
@Lady Waverider and Gandalf
Hope all that US Fiat doesn't give Spot and Spike indigestion. Somehow I think they have a long climb ahead of them.


alkahulik (9/30/03; 07:46:54MT - usagold.com msg#: 109614)
Gold
Which way is gold going. Up, of course!! Could it be that $380 was the bottom? I can say that the gold bears are out in force on all the chat rooms (except for this one). I think that the thing to watch out for is "missing the upside!!"

Waverider (9/30/03; 07:41:40MT - usagold.com msg#: 109613)
Spot 'n Spike
http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1
...Gaaandooolf...what did you feed these boys for breakfast...roo meat sprinkled with US fiat?

VanRip (9/30/03; 06:55:35MT - usagold.com msg#: 109612)
Prudential Regards Underpinnings of Gold Market as Weak
http://finance.yahoo.com/mp#nem
(The first part of the paragraph is devoted to downgrading a couple of well known gold stocks and rates a couple of others as neutral.)

However, the........" Firm regards the underpinnings of the gold mkt as weak or unstable as hedge funds or other investors sell and as mining co hedge covering winds down as they close out."

Where do they come up with this stuff? Head scratching doesn't help.





Clink! (9/30/03; 06:37:28MT - usagold.com msg#: 109611)
@ Ari
I made the rash statement before realizing that the main text is 127 pages long ! Ah, well, at least I can try the text search.....
C!

Clink! (9/30/03; 06:35:59MT - usagold.com msg#: 109610)
@ Gandalf - A scientific breakthrough !
http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P
One of my favorites in the world of science is Heisenberg's Uncertainty Principle. In a nutshell, it states that the act of observing an event affects its outcome. I have seen this in operation many times over the years in the electronics world (eg put a probe in the wrong place and your amplifier turns into an oscillator) but this is the first time I have seen it in clear operation in the financial world. You say that you keep on seeing three 'O's on the P&F chart and give a link. I followed the link last Friday (I think ?) and saw no 'O's ! You said the same yesterday, yet this morning there are no 'O's !! So now we have to consider - which one of us is screwing up the chart, just by looking at it ?!
C!

slingshot (9/30/03; 06:17:46MT - usagold.com msg#: 109609)
Black Blade
Thank you for your response.

My point is the availability of Gold as per ounce per person. Yes there may be 1 oz per person in the world but the availability to purchase may be less than 1 oz. The central banks withhold so much gold, that would not be placed on the open market and so the small investor can not purchase it. So you see all the gold mined may be 1 oz for every person. But not every person my be able to purchase an ounce of gold. The amount may be less.
Slingshot------------------<>

Black Blade (9/30/03; 06:13:00MT - usagold.com msg#: 109608)
Rumor - Japanese Intervention (Again)

The word is that the MoF through the BoJ sold $2 billion of Yen for dollars this morning but the effects were short lived as currency traders had anticipated the move and took advantage of the MoF generosity at Japanese taxpayer expense once again. Lovely when the Japanese government squanders the peoples hard sweat for a gain for a few wealthy Japanese vultures. The Yen continued to crumble to new lows. Meanwhile smart Japanese are playing along by scooping up gold from retailers as they have been doing since the beginning of the year. The physical marklet is very strong at the retail levels from a couple of sources and hasn't lightened up yet. Beware the spin by the institutional boiler rooms in Tokyo. They have already proven that they are dishonest - they have come a long way since the days of when it would have been a disgrace worthy of ritual suicide. They are becoming more like American Gaijin all the time aren't they?

- Black Blade

Black Blade (9/30/03; 06:03:13MT - usagold.com msg#: 109607)
slingshot
For those who can't make large gold and silver purchases - think starting a small consistent time ordered accumulation program - "dollar cost averaging". In other words - check out the "small order desk" here at the castle.

- Black Blade

Black Blade (9/30/03; 05:58:53MT - usagold.com msg#: 109606)
slingshot



Black Blade (9/30/03; 05:56:29MT - usagold.com msg#: 109605)
mietech - Health Insurance
I did not read the article as I am just quickly checking out some trading info in Asia and early Euroland before catching some Zzzz - BTW, notice the quick $4 spike early in Euro trade? Back to health insurance, the rate of uninsured was about 6% last year and is now nearly 15%. Partly this is due to companies giving up health care plans and the double digit growth in health insurance costs, but the rest is that more simply cannot afford it and are taking the risk that they will get by.

Also, more Americans are out of work and unemployed (roughly 9.2% - actually closer to 12.5%+ counting and adjusting for under employed - Hey, I was a statistician once too and a hell of a lot better than nay at the BLS because I am not fudging the numbers) - The unemployment data will get damn close to Great Depression levels before long. It will get worse in spite of the "Jobless Recovery" (God I love those Wall Street euphemisms for "the market's going to hell in a hand basket" - how creative). Makes me feel a whole lot better (yeah right). Not to worry as it is not counted in the CPI core data much like energy, food, housing, clothing, etc. - you know, the "unimportant stuff" disregarded by Wall Street according to the BLS and Labor Department.

I still keep my health insurance current just as I do Auto, life, etc. and yes, even my "portfolio insurance". It's going bto get very ugly before long. Don't be surprised if the Chicago Manufacturing data is phoneyed up this morning - remember, the Midwest is in a real severe decline as it is heavy in manufacturing and job losses are more severe in this region of the country. Don't discount Daimler-Chrysler's plans to close 5 US auto-manufacturing plants this year and next.

Ah well. back to "golden dreams" for now.

- Black Blade

slingshot (9/30/03; 05:38:03MT - usagold.com msg#: 109604)
Caradoc
Have you come across the most common denomiator? Is there a squeeze between the amount of gold per person that has been mined and the amount that may be available for purchase by the average person? Will that be less than 7/8 ounce?

Come on USAGOLD your monthly purchase has a point in this!


Example What do Central Banks hold.
What is place on the market to be sold.
What is purchased as compared to the sale of gold back in to the market. Percentage wise.Profit taking.

Explanation. If the amount of Gold purchased at the small investor level exceeds the amount available to the market. Then the amount per person decreases. Am I wrong?





Slingshot-----------<>

misetich (9/30/03; 05:30:39MT - usagold.com msg#: 109603)
Census Finds Many More Lack Health Insurance
http://www.washingtonpost.com/wp-dyn/articles/A19511-2003Sep29_2.html
Snip:

"Employment-based coverage is getting really expensive," said Kate Sullivan, director of health care policy at the U.S. Chamber of Commerce. "Either the company doesn't make it available or individuals are turning down coverage at work because they can't afford it. That's very alarming."

The average cost of a family health plan rose from $8,000 in 2002 to more than $9,000 this year and is expected to exceed $10,000 in 2004, said Helen Darling, president of the Washington Business Group on Health, which represents 180 major corporations.
...........................
"All across the country states are experiencing fiscal crisis and a good number are considering cutting their Medicaid programs," said Ron Pollack, executive director of the liberal consumers group Families USA
******************
Misetich

Sign of changes, as corporations "unloadoading" burden is passed on directly to their employees

Trend is alarming - reflecting a deteriorating economy. The falsehood of the famed US economic recovery is showing everywhere - from health to government deficits, to unemployment

The CONfidence game is going to burst, as reality takes a firmer hold of events

All On Board The Gold Bull Express




slingshot (09/30/03; 04:51:04MT - usagold.com msg#: 109602)
Caradoc Msg #109601
7/8 of an ounce per person in the world. Last I heard it was 1 oz per person in the world. What happens when its 3/4 or even a half ounce per person. I am not talking about what has been mined, but what is available to be purchased on the market. Come on, Throw some rocks at me.
Slingshot------------<>

Caradoc (09/30/03; 04:27:49MT - usagold.com msg#: 109601)
Signs of the times
Most every financial advisor has reverted to the traditional wisdom of telling people to have 5% of portfolio in gold. On a more personal front, we goldbugs are now getting delayed responses from those we've talked to over the years. On older stock board forums like Silicon Investor and whatever Raging Bull is now called, there has been an upsurge of chatter about gold and gold stocks. On one newer stock forum called I-Hub, the three newest boards are about gold stocks. Here's snippet from one of these:

***
Why Gold?: Let's start with the supply side of supply/demand. All the gold ever produced would fit into an 82-foot cube cube weighing 10 billion ounces: about 1/3 the volume of the Washington Monument. Further, the 50 million ounces being produced each year would fit into the average living room. http://money.howstuffworks.com/question213.htm Allow for sunken treasure, lost coins & forgotten stashes, a small amount of industrial losses and some percentage of dental gold over the years and you arrive at our present supply of 6 billion ounces: maybe 1/5 the volume of the Washington Monument and less than one ounce per person while world population rises [faster] than the number of ounces.
With less than one ounce per person, post #6 below cites fifteen ongoing fundamental reasons why your 7/8 of an ounce will continue to increase in value whether you choose to lay hands on it or not.
***

The post referred to is this:
***
FUNDAMENTAL REASONS TO OWN GOLD
BY: JOHN EMBRY, PRESIDENT & PORTFOLIO MANAGER* OF THE SPROTT GOLD AND PRECIOUS MINERALS FUND. SEPTEMBER 20, 2003

[Originally at the Sprott website, this text was lifted from Sinclair's site under "News Archives" for 24 September 2003]

1.Global Currency Debasement:
The US dollar is fundamentally & technically very weak and should fall dramatically. However, other countries are very reluctant to see their currencies appreciate and are resisting the fall of the US dollar. Thus, we are in the early stages of a massive global currency debasement which will see tangibles, and most particularly gold, rise significantly in price.

2. Investment Demand for Gold is Accelerating:
When the crowd recognizes what is unfolding, they will seek an alternative to paper currencies and financial assets and this will create an enormous investment demand for gold. To facilitate this demand, a number of new vehicles like Central Gold Trust and gold Exchange Traded Funds (Elf's) are being created.

3. Alarming Financial Deterioration in the US:
In the space of two years, the federal government budget surplus has been transformed into a yawning deficit, which will persist as far as the eye can see. At the same time, the current account deficit has reached levels which have portended currency collapse in virtually every other instance in history.

4. Negative Real Interest Rates in Reserve Currency (US Dollar):
To combat the deteriorating financial conditions in the US, interest rates have been dropped to rock bottom levels, real interest rates are now negative and, according to statements from the Fed spokesmen, are expected to remain so for some time. There has been a very strong historical relationship between negative real interest rates and stronger gold prices.

5. Dramatic Increases in Money Supply in the US and Other Nations:
US authorities are terrified about the prospects for deflation given the unprecedented debt burden at all levels of society in the US. Fed Governor Ben Bernanke is on record as saying the Fed has a printing press and will use it to combat deflation if necessary. Other nations are following in the US's footsteps and global money supply is accelerating. This is very gold friendly.

6. Existence of a Huge and Growing Gap between Mine Supply and Traditional Demand:
Gold mine supply is roughly 2500 tonnes per annum and traditional demand (jewellery, industrial users, etc.) has exceeded this by a considerable margin for a number of years. Some of this gap has been filled by recycled scrap but central bank gold has been the primary source of above-ground supply.

7. Mine Supply is Anticipated to Decline in the next Three to Four Years:
Even if traditional demand continues to erode due to ongoing worldwide economic weakness, the supply-demand imbalance is expected to persist due to a decline in mine supply. Mine supply will contract in the next several years, irrespective of gold prices, due to a dearth of exploration in the post Bre-X era, a shift away from high grading which was necessary for survival in the sub-economic gold price environment of the past five years and the natural exhaustion of existing mines.

8. Large Short Positions:
To fill the gap between mine supply and demand, Central Bank gold has been mobilized primarily through the leasing mechanism, which facilitated producer hedging and financial speculation. Strong evidence suggests that between 10,000 and 16,000 tonnes (30- 50% of all Central Bank gold) is currently in the market. This is owed to the Central Banks by the bullion banks, which are the counter party in the transactions.

9. Low Interest Rates Discourage Hedging:
Rates are low and falling. With low rates, there isn't sufficient contango to create higher prices in the out years. Thus there is little incentive to hedge and gold producers are not only not hedging, they are reducing their existing hedge positions, thus removing gold from the market.

10. Rising Gold Prices and Low Interest Rates Discourage Financial Speculation on the Short Side:
When gold prices were continuously falling and financial speculators could access Central Bank gold at a minimal leasing rate (0.5 - 1% per annum), sell it and reinvest the proceeds in a high yielding bond or Treasury bill, the trade was viewed as a lay up. Everyone did it and now there are numerous stale short positions. However, these trades now make no sense with a rising gold price and declining interest rates.

11. The Central Banks are Nearing an Inflection Point when they will be Reluctant to Provide more Gold to the Market:
The Central Banks have supplied too much already via the leasing mechanism. In addition, Far Eastern Central Banks who are accumulating enormous quantities of US Dollars are rumored to be buyers of gold to diversify away from the US Dollar.

12. Gold is Increasing in Popularity:
Gold is seen in a much more positive light in countries beginning to come to the forefront on the world scene. Prominent developing countries such as China, India and Russia have been accumulating gold. In fact, China with its 1.3 billion people recently established a National Gold Exchange and relaxed control over the asset. Demand in China is expected to rise sharply and could reach 500 tonnes in the next few years.

13. Gold as Money is Gaining Credence
Islamic nations are investigating a currency backed by gold (the Gold Dinar), the new President of Argentina proposed, during his campaign, a gold backed peso as an antidote for the financial catastrophe which his country has experienced and Russia is talking about a fully convertible currency with gold backing.

14. Rising Geopolitical Tensions
The deteriorating conditions in the Middle East, the US occupation of Iraq, the nuclear ambitions of North Korea and the growing conflict between the US and China due to China's refusal to allow its currency to appreciate against the US dollar headline the geopolitical issues, which could explode at anytime. A fearful public has a tendency to gravitate towards gold.

15. Limited Size of the Total Gold Market Provides Tremendous Leverage:
All the physical gold in existence is worth somewhat more than $1 trillion US Dollars while the value of all the publicly traded gold companies in the world is less than $100 billion US dollars. When the fundamentals ultimately encourage a strong flow of capital towards gold and gold equities, the trillions upon trillions worth of paper money could propel both to unfathomably high levels.
***

Regards to the table,

Caradoc





slingshot (09/30/03; 04:18:19MT - usagold.com msg#: 109600)
Belgian
Good Morning,
I read your posts day in and day out and many others, only to be frustrated at the intricate twist and turns that
impede or enhance the gold market. In all my analysis I have found, that the stats of unemployment/debt/GNP/Trade deficet/consumer confidence/Pro Forma/and any other factor that one can think of to insert into the equation have no effect.All that that matters is greed. When I say greed, it is those who have money, and move such monies into spheres that produce wealth. For example is it China who sits and waits to gobble up gold placed on the open market. Under this assumption it is the banks outside the Washington Agreement that have control. To a lesser degree, small time investors and major investors that turn their eye to gold as the POG increases.

It may be unobtainable to bring this equation to the lowest common denominator. If I ever can achieve it,I will have achieved my Goal.

Slingshot----------------<>

silvercollector (09/30/03; 03:32:22MT - usagold.com msg#: 109599)
Dollar index getting very close to mid-July lows of approximately 91.9.....
....take that out and we've got our $400 gold!!!

Belgian (09/30/03; 03:28:43MT - usagold.com msg#: 109598)
Hoi Ari
Posting fatique,...september blues,...fabricating a garden pond,...whilst a lot of Gold-(related)-Things do happen :

How burning actual are A. Greenspan's "GOLD AND ECONOMIC FREEDOM" (gildedopinion) and Tlaga's "EURO AND GOLDPRICE MANIPULATION - I and II" (gold-eagle editorials), Today !!!

- *Serious" Public Gold-Talk (considerations) in Euroland is significantly increasing.
- A lot of attention goes to those, so badly needed, "STRUCTURAL REFORMS", not only for Euroland but globaly !
- The loudspeakers from Hong Kong signal Gold-Accumulation (physical of course) as to offload dollar-paper (Treasuries-?)
- If Spain is the next in the electricity-sabotage,...we can make some serious conclusions ?
- Demographics, unemployment, economic stagnation + debts, consequences of the liberal globalization,...etc, are discussed with an increasing "alarming" tone, again.

Simply : This planet is getting stuck, AGAIN !

Yesterday's wild (intraday) gyrations of the euro (versus dollar) was fascinating . This was happening in a matter of minutes. I look at these floating confetti things, as follows :

How much of your, mine, their confetti is needed to exchange that paper for one ounce of bullion ? One needs more dollar-confetti (380 x1$) for one ounce and less euro-confetti (330 x 1�) for that same ounce of precious ! This is the "REAL",... one and only... "exchange rate" that should be taken into any account. The dollarreserve is devalueing against GOLD ! Other currencies buy much more gold (for less confetti).

The ongoing adjustments-engineering of the dollarreserve's exchange rate (weaker dollar) is NOT going to be of any help to the local/global multitude of needed structural reforms to rebalance/revigourate global economic activity.
The old tricks of weak/strong currency (currencies) and its trade-advantages/disadvantages, will NOT work again as they did before. That's WHY the present Gold-Talk will remain and gain in importance. The ongoing competition for the weakiest currency will turn around in a race for the strongiest currency !!! That's WHY Gold is accumulated in the first place. Wich confetti comes the closiest to... as good as Gold ?

The tired old West (we) has to compete with the rising, vigorous, young East !!! Millions of complacent Western (dividing)workers against Billions of Eastern young eager, ambitious (uniting)wolves.
Not a pretty picture !

Before we (Westerners) lose this race, "drastic" structural changes "must" happen ! Many,...MANY, structural changes !
Monetary reform, Fundamental reform, is certainly one of these structural changes. And here we land (again) on the A/FOA tarmac.
Not in the least when we consider the recent evolvements on oil and the POO ! Russia(India-China)- OPEC-(nuclear)Iran-etc...
Is the global economy in a recession or already heading into a "depression" ? Are the general, engineered, over-valuations (of everything except Gold and oil) a thick smoke screen to hide the real "situation" ? I'm convinced it is as gloomy as I think it is ! This general over-valuation is nothing else but the result of the intrinsic "worthlessness" of the global confetti stashes !!!

Monetary collapses happen when and if the economical animal is degradating. Today, we have a huge globalized economic dragon and not a bunch of little local dragons. That's what so different, today, vis � vis the thirties.
Once the general public catches the Gold-Accumulation-messages from the East,...w're ready for the panicking.

POG's recent "behavior" 392$ > 380$ (2 x 6$) was AGAIN a perfect example (evidence) of how extremely "artificial" the Paper-Gold-Engineers have to compete with the Physical Advocates. Long before the recent Hong Kong Gold messages, A/FOA already knew what was happening overthere ! The first Belgian goldsales (re-distribution) also had a chinese connection (old rumor confirmed)!

The US$-exch.rate, in the process of declining a further 20%-30%, is "playing" a dangerous, * provocative *, game !!! More on this, later...

Thanks, many thanks Ari :-) and kindest regards from a fascinated Gold-student!

slingshot (09/30/03; 02:49:27MT - usagold.com msg#: 109597)
DummyANI
Good Morning,
0445 EST. Nice to have you in the in between zone.
Slingshot--------<>

DummyANI (09/30/03; 02:41:27MT - usagold.com msg#: 109596)
Mitsui Gold-trading Report at TOCOM:
Date: Net short changes Pre.COMEX-close
Sep. 11 27,754�c plus0512 �c 381.1(Dec.2003)
Sep. 12 27,810�c plus0056 �c 380.8
Sep. 15 .. nil�c ..�cnil�c �c�c....376.9
Sep. 16 28,672�c plus0862 �c.375.6
Sep. 17 32,011�c plus3339�c.. 374.6
Sep. 18 26,405. minus5606�c...377.3
Sep. 19 29,971�c.plus3566�c...377.7
Sep. 22 29,705. minus0266�c...382.9
Sep. 23 .. nil�c ..�cnil�c �c�c....388.3
Sep. 24 27,807. minus1898�c...387.0
Sep. 25 31,971�c plus4164�c...388.4
Sep. 26 34,212�c plus2241�c...385.9
Sep. 29 36,535�c plus2323�c...381.8
Sep. 30 35,582. minus0953�c...383.2

D-ANI: Buy a gold, sell a Yen


slingshot (09/30/03; 00:03:12MT - usagold.com msg#: 109595)
Midas Crusade
Sir Slingshot began to tell them of his dream. His descriptions could have been of any other Knights Dream who had faced war. After he had finished,Sir M.K. and Gandalf glanced at each other. Then Sir M.K. said, It is time to greet our guest. Sir Slingshot, will you go to the Council Chamber and tell Sir Black Blade we will be there in a short time. Sir Slingshot nodded and proceded to the staircase.
What do you make of that Gandalf? He was too far to hear the words of Omar Khayyam at the gate'said Sir M.K.
Gandalf thought for a moment,reaching inside his pocket to find his pipe. We will see what his dream and the future holds for us all'said Gandalf.
The two men desended the staircase and proceeded to the Council Chamber. They entered the room and were greeted by those already seated at the Oaken Table. There was the feeling of change in the air.
It was then the Ladies of the Court entered,dressed for battle. One by one they entered. Waverider,Leigh,Grateful for Gold,Siochaina,Raven, White Rose,Nahunta,Kasaan and Taryn. They seated themselves at the far end of the table.
Sir Black Blade raised an eyebrow to this display and wondered what was behind it all.

A Knight entered the Room and announced Omar Khayyam.
He too entered being dressed for battle with an honor guard.

Sir M.K. Stood up. Welcome,Omar Khayyam. Please join us at our table and make yourself comfortable.
Omar replied, I accept your hospitality and may this be the first of many that I sit at your table.
Omar, looked about the table and noticed the ladies at the far end. He smiled. He then with his guard sat down at the table.
As I stated before, I come to join forces with you against the Dark Forces'said Omar. He continued. They wish to destroy Gold and make slaves of all who oppose their decrees. Many of our people have been taken with their lies and we are the last to stand against them. They are strong but not unbeatable. We saw you fight on the Northern Plain. Omar turned to the Ladies of the court and turned back to Sir M.K. You have warriors that have heart,and if it was not so, I would not be before you. You believe in Gold and its value to build a better world as do I. We were joined long before this meeting. This is just a formality and if we join forces,conformation of our beliefs.
I come before you at this Table of council to form an alliance against a common foe. What say you? asked Omar Khayyam.
Sir M.K. rose from his seat. All eyes were upon him. He extended his hand across the table and Omar grasped him.
Sir M.K. spoke. I know of your culture and the hardships of your people. If we can put away our differences
and concentrate on our common foe, then we will unite. Can we agree to this.
Omar, holding his hand and looking into the eyes of Sir M.K. said, Then we are Brothers.
Suddenly a cheer that was so loud, filled the castle.
The tension was broken. In an unusal display of confidence, Omar Khayyam move around the table to Sir M.K.'s side.

Do your women always dress like this? said Omar, pointing to the Ladies at the table. Lady Waverider casting a stern look back at Omar's condensending finger.
They can be most ladylike,but I assure you they are warriors and have felt the sting of battle and I have no fear if they would be at my side.
Yes I have seen them'said Omar.
Slingshot-------------<>




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