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ARCHIVED DISCUSSION FROM 12/30/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

ski (12/30/06; 22:14:33MT - usagold.com msg#: 150589)
Stock market discussion.....
There has been some talk here today about the possibility of the Stock Market taking a hit in January.

In early December, someone asked me if they should sell their profitable shares of Charles Schwab. Without even giving it a second thought, I suggested they wait until January first if at all possible. Why? If they wait until the new year to sell, they will not have to pay the tax on the profit until April 15, 2008. If they sold before year end, they would have to pay the tax a full year sooner.

This got me thinking about the traditional Santa Claus rally .... which DOES, in fact, usually happen. But what is the REAL, underlying cause of the rally? Is there more BUYING than usual, as is generally implied? I'm thinkin' not! Instead, it looks like it is more accurately caused by a period of less than normal SELLING (due to taxation). The same number of buyers and less sellers .... equals positive stock movements.

If this theory holds water, there would be LESS VOLUME in December .... at the general time of the rally. You got it! Less volume is commonplace!

But what about the Stock Market in the new year? The only thing I can say for sure is that there will be some shares of Charles Schwab sold into the market. And, that a large number of economic icebergs have recently been hit as some here have pointed out.

Just to weave in a bit on PM's. ...... After multiple years of PM's beating the general stock market ..... (especially silver).... some of the fellas on Wall Street should finally start to notice before too long. In the big world of investment choices, the PM's are really a very small market. Thus, it won't take much new money to create really large moves in 2007.

USAGOLD / Centennial Precious Metals, Inc. (12/30/06; 18:51:50MT - usagold.com msg#: 150588)
Three cozy shops to look for gold coins and info... step inside!





melda laure (12/30/06; 18:27:16MT - usagold.com msg#: 150587)
Always in flux, the future is.
http://www.financialsense.com/stormwatch/geo/analysis.htm
@ Flatliner

The poor chinese, they have too many dollars!

The question is, would they be any better off accumulating euros? To paraphrase Sir Thouroughly: would it be an improvement to vote the american off the island and hire a european?

(the native americans in the back of the hall are dying of laughter here).

Perhaps gold is an alternative (at outrageously higher prices of course!). In the meantime (at present POG) we have a novel going on behind the curtain: hard to say what the timing will be, which will blink first: the climate, peak oil, currency/gold, or free energy? And like any good poker game, who is the mark and who is partnering with whom?

If the climate change is indeed not androgenic then perhaps it will be none of the above. Though the present difficulties in political economy ought to make one thing obvious: the present set-up is not conducive to a one world currency...

It wouldn't be as profitable. (would it? for whom?)

melda laure (12/30/06; 18:13:22MT - usagold.com msg#: 150586)
Fiat.
http://www.financialsense.com/editorials/fekete/2006/1230.html
Actually the scary answer is yes, we can. Doubtless fiat mind control is comming too- (assuming anyone still has any brain function worth controlling by then!)

I wonder if at some point, TPTB will decide that the oil markets would be more manageable with fewer oil consumers present.

I wonder too, what TPTB think of screeds like Jeff Nyquists latest comments over the muslim "re-reconquista" of europe. It is all too easy to imagine what the likes of Cecil Rhodes would think; less clear is what the present generation of banksters imagine they are building.

Racism is too easy a word. We are all being fleeced.

Liberty Head (12/30/06; 17:53:30MT - usagold.com msg#: 150585)
Can we have fiat weather too?

You can always tell when any politician is being deceitful.
That's easy! All the time.
You can always tell who the fools are. They are the ones who listen to the politicians like it matters.
The politicians took us off the gold standard and sold the tolerant public on fiat currency, fiat wars for fiat freedoms and now they are talking about the climate.
This country's whole system of values as gone swirling down the fiat toilet.
There's not enough matches in the world to burn the stink away.


Best Wishes

Flatliner (12/30/06; 17:48:32MT - usagold.com msg#: 150584)
Not in the news
http://www.worldreports.org/
Anyone read a good novel lately? Specifically, one that unfolds in real time on the net?

I know that this topic has been introduced to this forum and dismissed as fiction. The diary outline makes claims, much like the Da Vinci Code, blurring the lines between what is real and what is fiction but it is intriguing none-the-less. Anyone else reading? Anyone find clearly fictional statements in all the claims? I can only theorize about minor claims but nothing more. Anyone have closer ties who can vouch for what is real and what is not?

It seems, to me if there are any real claims behind this unfolding situation with regards to European currencies, it would logically stand that oil would bit for gold directly.

In any case, idle time makes for active imaginations!


Chris Powell (12/30/06; 12:45:34MT - usagold.com msg#: 150583)
At 5 years old, euro easily rivals other currencies
http://news.yahoo.com/s/ap/20061229/ap_on_bi_ge/euro_s_anniversary
By Matt Moore
Associated Press
Friday, December 29, 2006

The surging euro is confounding critics who once doubted it could rival the dollar, pound, and yen -- but Europe's shared currency still annoys some consumers five years after its introduction in cash form.

In 2006, it has surged in value, rising nearly 14 percent to 20-month highs and is about three or four cents off its all-time high of $1.36 in December 2004. It's a strong turnaround from an initial plunge to as low as 82 cents in 2000.

"When it first started -- and even before it hit markets properly, everyone was very skeptical and negative on the whole thing, and that's exactly the performance we saw," said David Jones, chief currency analyst for CMC Markets.

"That initial negative view is history now," Jones said. "The euro is seen as a strong global currency now."

However, some consumers still grumble about using the euro, with 41 percent of people in the 12-nation euro zone saying they still have difficulties using it, according to a recent Gallup poll for the EU. Many still calculate large purchases in the old currencies.

And having a single currency hasn't closed the growth gap between Europe -- where 1 or 2 percent annual growth constitutes an upswing -- and more dynamic economies in the United States and Asia.

But companies and governments can now raise money across borders with their investors no longer facing the risk that stock or bond holdings will be eroded by exchange rate fluctuations. And travelers no longer have to waste time and money at airport exchange booths, or return home with a pocketful of foreign currency.

The euro -- which was initially introduced on financial markets in 1999 -- has also increasingly gained acceptance as a foreign currency reserve in the coffers of companies and governments from China to the Middle East.

"Indeed, there is the very real possibility that several countries could switch a proportion of their foreign currency reserves out of dollars over time to the euro," said Howard Archer, chief European economist for Global Insight in London.

According to the International Monetary Fund, global foreign currency reserves during the first quarter of 2006 stood at approximately $4.34 trillion. Of that, the dollar accounted for 66.3 percent with the euro, the British pound and the yen accounting for 24.8 percent, 4 percent and 3.4 percent respectively.

In November, China's central bank said it was mulling whether to reduce the weighting of dollars in its reserves. Central Bank Governor Zhou Xiaochuan said his country was "considering lots of instruments to diversify its foreign exchange reserves."

Archer said other countries have expressed similar sentiment.

"Also potentially significant were indications from the central banks of Qatar, Sweden, Russia, and the United Arab Emirates in recent months that they are either diversifying away from the dollar in their foreign-exchange reserves, or considering doing so in the longer term," he said.

On Thursday, the Emirates' central bank governor said the dollar's weakness is prodding his country to convert 8 percent of its foreign exchange reserves into euros.

About 98 percent of the Emirates' nearly $25 billion currency reserves are in dollars. That may decline to 90 percent in six to nine months if the bank's directors approve the switch as is expected, Central Bank governor Sultan Bin Nasser al-Suwaidi said.

Peter Morici, a professor at the University of Maryland School of Business, said the dollar's supremacy, while vibrant, could suffer because of larger U.S. trade deficits and the urge to diversify.

"The euro is the prime candidate for diversification," he said, but added that Europe's struggles to maintain single-digit growth and high unemployment rates would keep the euro from supplanting the dollar as the primary reserve currency.

"Moreover, Europe's trade problems with China, and trade deficits, will grow in the years ahead, casting some doubt on the euro's long-term strength relative to the dollar," Morici said. "Picking the euro over the dollar or vice versa comes down to picking which currency will be stronger two and five years from now. That is a difficult choice to make."

Thoreauly (12/30/06; 11:33:43MT - usagold.com msg#: 150582)
@ Articfox re: An Inconvenient Truth
http://www.commondreams.org/views06/1228-24.htm

I watched it last week. A compelling piece, especially if you're a fan of Al "I invented the Internet" Gore. But I for one remain a skeptic, not so much because the planet might not in fact be warming some but that it's presumed to be man-caused and therefore must be man-handled. Which it will be, for the simple reason that it will be handled by government, on the assumption that Global Warming is "the greatest and widest-ranging market failure ever seen" (see link).

Never mind the environmental horror that was the former Soviet Union, China is not a free market but a government-controlled free-for-all, where private ownership of the land is prohibited and tragedies of the commons are the order of the day (e.g., the cashmere industry that has destroyed the Mongolian grasslands, sending dust storms across the Pacific that have also picked up massive amounts of industrial pollutants from China's urban infernos).

And of course completely lost on this writer is the fact that "Western democratic capitalism" is but fascism lite in that the crony capitalism of the corporate state daily runs roughshod over the market (e.g., Halliburton) or trumps it altogether (e.g., TVA).

In other words, there is no free market to fail; there is only the failure -- on a worldwide basis -- of governments to protect the lives, liberty, and property of their citizens (read: subjects). And had such protections been in place, then civil suits and the threat thereof would have seen to it that pollution was kept to a minimum rather than permitted in the name of "economic growth" funded through mountains of Monopoly money and never-ending credit creation.

So what's the REAL inconvenient truth? That the cure for Global Warming will be worse than the disease, as the "watermelons" (green on the outside, red on the inside) use this "crisis" to further their plans for the creation a world state.

Arcticfox (12/30/06; 10:46:31MT - usagold.com msg#: 150581)
A little off topic but has anyone seen this film yet and if
so, what did you think?

http://www.climatecrisis.net/

Goldilox (12/30/06; 09:29:25MT - usagold.com msg#: 150579)
Final Score - Gold Vs. Dow
http://urbansurvival.com/week.htm
Here are the two "final scores" that we find most interesting as the last day of investing for 2006 passed Friday.

Gold $516.60 to $636.00:  +23.1%
Dow: 10,717.50 to 12,463.15:  +16.3%

I know it's tempting to write off our published financial positions (offered for informational purposes, and not as advice for your situation) as "just some internet blogger/nutjob."  I prefer to think of this as a financial news and commentary site  Who else was telling you that they were buying silver between $6.94 and $7.23?  That was 18-months ago.  Our return on silver is 77.7% over 18-months. Of that gain, more than half occurred since January.

I don't expect to be unloading either our gold coin or the silver one just yet.  As the old saying goes, let the trend be your friend.  And this is a very, very friendly trend.  And if our time predictive friends are right, the gains will be even more impressive as the winter goes on.  Not advice - just telling you our position. But "blogger"?  Ha! Few on Wall Street can honestly report the kind of gains we've had this year.  Double deliciously, because we haven't sold anything, no tax liabilities, either.  Just a nice increase in net worth.

-Goldilox

Nothing new in this calculation, Merely a reminder of the "path".

Goldilox (12/30/06; 09:13:03MT - usagold.com msg#: 150578)
Market Fireworks
Sierra Madre,

Interesting prediction. That was my first thought after Dubya declared a "Bank Holiday" in Ford's memory. Tuesday overseas action might be a good indication of what will take place in US markets on Wednesday.

Thoreauly (12/30/06; 09:00:18MT - usagold.com msg#: 150577)
"Real Estate and the Post-Crash Economy"
http://www.safehaven.com/article-6603.htm

A bit lengthy but as in-depth a look at the "real estate industrial complex" as you're likely to find. And given that Ritholtz is a frequent guest of Larry Kudlow's, no doubt that's where his remark about commentators who want to "have it both ways" is directed.

In Gold We Trust.

silvester (12/30/06; 08:17:53MT - usagold.com msg#: 150576)
Euro value
The Chris Powell FT article in message #150526 appears very significant to me. I've not seen this information posted before. If the Euro has a use value equal to the dollar we must be further along this trail than I realized.

Surely that many Euros in use means it has achieved a popular acceptance. We hear constantly the desire of governments to diversify their dollar holdings. They were holding back waiting for the Euro paper to slowly gain this level of trust prior to their purchases.

No doubt about it, the dollar was challenged. It's clear we have an emerging new leader. The next challenge will be to keep this diversification process in order as they struggle to replace the old reserve with a fresh one.

Cheap dollar gold will soon just be an impossible dream.

Thanks for the post Chris. I read them all, along with all other messages posted here. Reading this site has enlightened me to some of the inner workings of world finance. The free gold concept and all the discussions the idea created in the last 7 years or so(for me) has been like a facinating novel read in slow motion. I think we may have very interesting chapter coming up.

Great job USA Gold in managing your site. Happy and Prosperous new year to you all.


Thoreauly (12/30/06; 07:22:47MT - usagold.com msg#: 150575)
Five Asians and an American
http://www.safehaven.com/article-6600.htm

In his latest offering (see link), Peter Schiff makes reference to a joke from a previous post:
__________

Suppose six castaways are stranded on a deserted island, five Asians and one American. Further, suppose that the castaways decide to divide the work load among them in the following manner: (for the purpose of simplicity, the only desire the castaways work to satisfy is hunger) one Asian is put in charge of hunting, another in charge of fishing, and a third in charge of finding vegetation. A fourth is put in charge of preparing the meal, while a fifth is given the task of gathering firewood and tending to the fire. The American is given the job of eating.

So, on our island five Asians work all day to feed one American, who spends his day sunning himself on the beach. He is employed in the equivalent of the service sector, operating a tanning salon which none of the Asians on the island utilize. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table, built by the Asians specifically for this purpose.

Realizing that subsequent banquets will only be forthcoming if the Asians are alive to provide them, he allows them just enough scraps from his table to sustain their labor for the following day.

Modern day economists would say that this American is the lone engine of growth driving the island's economy and that without his ravenous appetite, the Asians on the island would be unemployed. The reality, of course, is that the best thing the Asians could do to improve their lots would be to vote the American off the island. Without the American consuming all of their food, there would be a lot more available for them to eat.
__________

If that doesn't nail it, I don't know what does.

Sierra Madre (12/30/06; 02:44:35MT - usagold.com msg#: 150574)
I expect fireworks when the market opens next week.

1. The UAE - the Arab Emirates - declared they were jettisoning dollars por a certain percentage; they didn't say they were diversifying, they said they were getting out of dollars to a certain extent, a remarkably frank declaration.

2. 'f I am not mistaken, Iran is selling its oil for Euros at present.

3. AS MK, wrote not long ago, the P & B mission to China was a total failure and they were chasised for trying to manipulate Chinese economic policy. So, the US has hit a wall, a decisive event. As MK said, this is a "crossing of the Rubicon", things will now be different.

As the powerful P & B team was sent packing in complete humilation, so will the dollar feel the humiliation. The strength of the dollar relies on POWER, and when the power fails to produce results, the effect on the currency will be inevitable.

4. Now, we have the barbaric execution of Saddam Hussein. Could you imagine anything more likely to produce more fury in Iraq, against the US? I can't. The world note this utterly barbarous treatment of the President of a country that did absolutely no harm to the US and the feeling will be of universal revulsion.

I feel that this is not just blundering, it is deliberate, in other words, a provocation, to produce a reaction. That reaction would then justify measures to elevate the US war in the Middle East to a higher level of savagery. And I can even believe that the fury in Iraq might be used to stage another 9-11 type event - to justify the DRAFT.

Congratulation to all, who have survived 2006 and bought your gold from CPM; buy with both hands come Tuesday! 2007 looks mighty grim to me.

SIERRA

Goldilox (12/30/06; 01:01:10MT - usagold.com msg#: 150573)
Fiat: Let There Be Blight!!
http://www.lewrockwell.com/hein/hein151.html
snip:

Fiat money has got to be the best racket around. A few years ago I calculated that the interest earned on the national debt amounted to roughly a billion dollars per working day. That's a pretty good return – mathematically, an infinite return – on "money" created out of thin air by the lender, who does so pursuant to no law that I know of permitting him – a private individual – to create what passes for United States money.

But there are problems, which multiply and become ever more severe as the fiat accumulates. For one thing, it loses its "purchasing power," which is as close as you can come to fixing a value for an intangible "money." That means that continued lending, which is essential if the system is not to implode, becomes more difficult, as the burden of debt accumulates, and the return on future investment may not be sufficient to retire it. And foreigners, holding huge dollar amounts, may be reluctant to acquire any more of the stuff, and dump some of their cache while it will still purchase something. Bad news for dollar creators; if people won't use/save the stuff, there's less profit in printing it.

And, of course, there's the latest problem, recently in the news. The coins, admittedly an insignificant part of the money supply, achieve a value, thanks to their metal content, which exceeds their face value. Embarrassing!

The mint stopped using copper for pennies some years ago, but even with that metal comprising only 2.5% of the coin's weight, the metal in the coin is still worth more than a cent. Specifically, the "cent" is worth 1.12 cents. Older cent coins, minted prior to 1982, and containing 95% copper, are worth about 2.12 cents.

Today's nickel contains 75% copper. It's worth almost 7 cents.

These facts illustrate another problem with fiat: there can be no monetary standards when the "money" has no physical existence. You cannot speak of the weight or purity of modern money. Thus, we have the situation, really incredible or laughable – or both – that a "cent" is worth 1.12 cents, or, depending upon its age, 2.12 cents. Or a nickel is worth 6.99 cents. What's going on here? How can one cent be 2.12 cents? Or five cents be seven? Fortunately for the money-creators, few people give this any thought, and even fewer care. How sad, since no problem faced by our society is more serious.

How is the government responding to this situation? Not surprisingly, with bluster, threats, and lies. Obviously, it would be advantageous to melt down pennies, thus realizing about a 10% profit, before expenses, unless the pennies were pre-1982, in which case there's be a 100% pre-expense profit. Uncle Sam wants to make this a crime. "We are taking this action because the nation needs its coinage for commerce. We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," declared mint Director Edmund Moy. Huh? It isn't immediately obvious how the "American taxpayer" would suffer from the melting down of pennies. Besides, if the pennies actually belong to the persons melting them down, they're melting their own property. It's a bit hard to see how government, to save the banker's face, can make it a crime to melt your own property. No doubt the U.S. is encouraged by the fact that, in the 1930s, when it became a crime for Americans to own their own (gold) money, there were few objections to the "law," and the people allowed themselves to be robbed.

The mint also complains that it now costs more to make pennies and nickels than they're worth. Do you believe that? The mint can purchase whatever it needs, and pay the salaries of its employees, with Federal Reserve Notes produced by its partner in crime, the Bureau of Engraving and Printing. Federal Reserve Notes cost nothing to produce, since they will pay the cost of their own production. Just print a few extra ones, and give them to the suppliers, workers, etc. Use the rest of this free "money" to buy copper, zinc, nickel, and pay the mint workers. Thus, we, the people, foot the bill, not the mint. The hapless citizen's savings grow increasingly worthless, and the buying power of his income shrinks, but Uncle has no savings, and he can always supplement his income by boosting taxes, and/or printing more of the "money." This will continue until the stuff becomes so useless that the jig's up. Then they'll switch to a new size and color bill and start over. Unmentioned in the mint's press releases, incidentally, is the profit from its other coins, which cost significantly less than their face value to manufacture.

If anything reveals the duplicitous and dishonest nature of government, it's the way it treats money.



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