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ARCHIVED DISCUSSION FROM 1/3/2004 All times are U.S. Mountain Time (Yesterday's Discussion.) 21mabry (01/03/04; 23:19:17MT - usagold.com msg#: 114549) (No Subject) I was reading some of Marc Faber's work.I am generalizing but Doctor Faber seems to equate commodity bull markets as a product of fear that currencies will become worth less,he equates equity bull markets especially bubbles with a persons sense of greed,Dr Faber states that some of the best times to purchase equities are during hyperinflation enviroments.Weimar Germany along with the meltdown of Russia in Dr.Fabers writing offered fantastic buying oppurtunities for equities.He stated in his writing Diamler during that time could have been purchased for the price of 370 of there autos I assume he ment with U.S. currency.It may be that gold holders will be presented with life time buying oppurtunities in other markets in the coming years.Hold your positions.21 Mr Gresham (01/03/04; 21:55:36MT - usagold.com msg#: 114548) Thoughts of the morning (clink! clink!) while nursing my aching back. Had to carry some silver up some steep stairs last night. Stuff is as heavy as ever, an' I been workin' out! Just should have divided the load better.Good time to do some clinkin'.Your own private moment of appreciating the financial plan you have put yourself upon.When those holiday bills arrive, or if last year was rough on you in other departments, don't forget to pull out some of those coins we talk about, and let them make their joyful noise for you. Your subconscious, listening, will thank you! Mr Gresham (01/03/04; 21:49:56MT - usagold.com msg#: 114547) Chiming in while... still fresh in mind.Pizz: My impression of the business world exactly. And employees whistling on their way to work. Most jobs here are fluff, supported by our leading national export: green paper. If not eliminated, those jobs will certainly be continued only under severe conditions. Think USSR 1991.Dollar Bill: I've grown to enjoy your posts over this past year. Didn't catch the beginning of your Japan thoughts, until I read down past Pizz' posts, but the strategy of "buying America" must be occurring to some in Japan. (Just as the Jipangu idea occurred to market gold to high savers in Japan.)It's just that buying US Treasuries has never seemed to me the way to come into ownership of US real estate or industry. There must be some highly-solvent investment entities (partnerships? closed funds? hedge funds?) that could turn in those Treasuries for harder assets on our shores. These will not be the highly-leveraged public entities we are used to hearing about, either here or in Japan.Your comments almost had me going out to begin one of my curiosity projects: looking at balance sheets of the top 20 US banks, if that info were available maybe as a Yahoo screen?, and see who the FED sees as likely survivors, worth backing in a meltdown for survival as flagship US banks, perhaps aided by Japanese capital rapidly mobilized (as long as they only sell the agreed-upon percentage of Treasuries to do it).Those banks would then take up the major positions in US farmland, real estate, high-tech toolmaking, advanced materials -- all the remaining top US technology that can be cherry-picked at coming bargain prices. You KNOW they must have their shopping list all made, just waiting for the go-ahead.OTOH, maybe US investors have already made private deals (with or without Japanese money) to lock down those assets. Or get in ahead of Japan. (Of course the bargain prices haven't arrived yet. I guess it's a fee-based or management-interest arrangement?) These would be very private entities never listed as publicly-traded.Are the Japanese savers really resigned to leaving all their money (what is it, $100,000+ per household) in Postal Savings Accounts? Dollar Bill (01/03/04; 20:24:45MT - usagold.com msg#: 114546) *>* Sir MK, I love this pope. Sure the clothes are a turn off, but he is one sincere and true blue man. Thank goodness he has diluted the influence of American and European cardinals and thinking by his appointing so many third world cardinals. I am not Catholic, but his actions on social issues, definately NOT the iraq issue, gets my appoval.His stance against communism is another heroic type of action, and his Mother Theresa oriented thinking is much better than previous prelate thinking. Goldilox (01/03/04; 20:23:13MT - usagold.com msg#: 114545) Japan @ Dollar BillJapan tried buying US real estate once in the late 80's and had their heads handed to them with an ugly real estate devaluation. I'm not convinced they would like to try that again. From what I've read, I think they are more interested in owning part of China's production and the natural resource supply to same. Japan has more to gain in the long run by cozying up to China than many believe. . . bad history or no. MK (01/03/04; 20:01:04MT - usagold.com msg#: 114544) Dollar Bill This pope is in a unique position in that he is not beholden to any state. He can afford to say what he has to say. Contrary to what many believe about the power politics of the Vatican (and I do not deny that it plays an important role), the Catholic Church's power base is as much in places like South America and the United States, as it is in Europe, and if you question that take a look at the make-up of the College of Cardinals (which will elect the next pope). I believe this Pope sees an unravelling of the post World War II order, just as Another did in that post I put up last night. ( I couldn't help but notice that last night when I read the old post.) He is attempting to make sure that the Third World gets cut into the deal, thus the references to the marriage between technology and resources. There is that old idea (Karl Jung, I believe) that ideas themselves rise up from a well in the collective unconcious (or subconscious) and visit many people at the same time. I think many see (hope for) a new social contract. Whether or not we will see it is another matter. Between now and then, the need for gold ownership will become unavoidably apparent. Cavan Man (01/03/04; 19:52:33MT - usagold.com msg#: 114543) MK Can you elaborate on Pope John Paul's "message"?Sharing a bottle of wine with you would be a vintage experience akin to spending a few days with our favorite Austrian. The glass is indeed broken asunder; the cobwebs have all been swept away. 2004 is a year of momentous change. It must be so. Dollar Bill (01/03/04; 19:48:08MT - usagold.com msg#: 114542) *>* Sir MK, I am glad Cavan Man got you to post longer.My first guess on the Pope issue is that he played the hand of France and Germany when the iraq issue came up.He is being coached by someone on the French team.Of course, he is Polish, even though they did not agree with the Pope on Iraq, they ARE in the EU, and the EU must be freaking at seeing Japan stand up and say, we are going to own america. We are going to take our surplus credit nation status and slowly buy America.The chirac idea of power blocks stand no chance it appears if Japan decides the fate of the world. As it seems to have done. Of course I could be hallucinating, not to mention definately projecting. But, it is all I can see at this time.Other than the water leaking into all our boats.If Japan decides to, couldnt it even support an al kida hammered US? "we will continue our buying of America, we will overlook the couple of dirty bombed cities ect." MK (01/03/04; 19:47:15MT - usagold.com msg#: 114541) C-Man Just realized that all of that was preliminary to answering your question. It wasn't one exchange between us but the body of work and the on-going nature of it that fit so well with the internet venue that impressed me.Also, sorry for the text errors. Just trying to get out the ideas tonight. Dollar Bill (01/03/04; 19:35:25MT - usagold.com msg#: 114540) *>*.................,,,, When some real high number of people are paycheck to paycheck, and companies like walmart have 60% (and rising)of thier employees qualifying for food stamps, with the fed shipping jobs overseas for the sake of reserve currency status, with the US and Japan trying to balance a brave new world of infinite us debt........ect.......the bereneke fed sees me and my fellow man floating our boats and instead of doing thier jobs for our sake, instead, for the dollars sake, they determine we can afford new bilge pumps and time and effort to bail out the water they in effect are leaking into our boats. Are they planning to give us free national healthcare to compensate for the inflation rate? What are the Japanese thinking? Are they planning to just buy land and move thier increasing population here? In 20 years of loaning us money, they will be able to do just that. Buy farm land and ship the food to Japan? Manage the (coming)US (command) economy like, in effect, a financial colony?The road of Japan providing the us Credit needs will lead where? Japan wins ww2 after all? What is the result of the infinite debt road?Someone else owns us. Why would they want to destroy the dollar when loaning the richest country all the debt they want will give you ownership? Am I missing something here?Is there some genius bereneke plan? Great Albino Bat (01/03/04; 19:31:48MT - usagold.com msg#: 114539) Parmalat milk.... This is as close to milk as paper is to gold.Parmalat "milk" does not spoil soon because it contains preservatives, like for instance, FORMALDEHYDE.Formaldehyde is used to embalm corpses.And some people want to drink that stuff?Not this GAB. MK (01/03/04; 19:25:04MT - usagold.com msg#: 114538) C-Man In my view, way back when, Another views had to be accepted in the context of a clear break with the past. In this 'context', if you and I were to sit down with a bottle of wine between us (and some good accompaniments), we would ceremoniously break the glasses in the fireplace, representing that the past was the past and that this was a new beginning, take out some news and pour the vintage. Before Another came along, we had one set of understandings with respect to the gold market. After his ideas were presented, we had another. The glass was broken. Historical inevitability became an overwhelming presence in the reality of all those who read and understood his message. Therein lies the value. Another's and FOA's values led the way to a new understanding of the gold market for many. For me, we were travelling along similar lines, therefore our hooking up at this website was a natural. I could almost anticipate where he was going next. I have always seen gold as a currency and form of savings (as opposed to the dollar which is a currency but not a form of savings -- at least in a rational sense), so to see the rest of the investment community coming along in 2003-2004 on what Another, FOA and I were talking about five years ago is a vindication of sorts -- though I don't think any of us would find much satisfaction in that vindication. The political economic reality is what is. We simply react to it. It's like standing in the street and seeing an approaching truck. It requires no third-party commendation to validate the reaction, and it doesn't take much to understand what you should do about it's impending imposition on your physical reality. Another brought that home -- and I appreciated his approach to that basic message, because it loosened the cobwebs in so many minds. I do not mean to romanticize what is essentially a very pragmatic approach on the part of Another and FOA. I merely point out that a very fundamental understanding of what is happening with the dollar and world polity leaves one, as a result, very comfortable with gold ownership. And wasn't that essentially the message in 'Thoughts!" ??And by the way, why I would very much welcome their return. My initial question would be where do we go from here? I believe we are close to a completely new arrangement in the monetary order that calls for an international monetary convention of the world's greatest nations. Interesting that the Pope would call for something similar in his New Year's message. I wonder what FOA and Another would have to say about that notion. Cavan Man (01/03/04; 19:19:06MT - usagold.com msg#: 114537) Durban Shares..... ....constitue an absolute SPECULATION. DROOY is not an investment IMHO. Dollar Bill (01/03/04; 19:11:15MT - usagold.com msg#: 114536) *>* Sir MK, Egads... Sir Dry Washer, Wouldnt business just build the bereneke inflation rate into thier charges to the consumer? Wether or not there was inflation to them, they could just say, inflation charge on the bill.Managed strangulation of the living public? Who need to float thier boat as bereneke pokes holes in thier hull letting in the -recommended amount of water- the inflation of water into your boat rate?Is he also recommending Fed inflation rate add ons to the public paychecks? My insurance, energy, food, everything but perhaps the walmart products, link up to the bereneke fed recommended inflation rate, squeezing me and the fellow citizens.Will the minimum wage move with the new fed inflation rate?I guess so. But, then again, that would be inflationary, politicians would need an election year reason to do it.And every worker will be able to extract this inflation rate out of thier company into thier pay when the company is also being squeezed by the inflation from every corner?Is is a slowed down version of the german hyperinflation of the 20's? bereneke really wants targeted inflation? of course, they know inflation is coming, so if they say xx% inflation rate, even though we are hammered with much higher inflation, they will be telling us how they are managing the xx% inflation, they know about it, you dont need to scream, it is ok, inflation is all part of the new normal, Joe Citizen, adjust to the new reality, we will help you manage the squeezing by new legislation and print money. Will they decrease taxes at the inflation rate?Inflation is letting more and more water into all the boats floating. All the families will sink in time. There is no managing inflation. There is only sinking families growing in number daily. Cavan Man (01/03/04; 19:01:22MT - usagold.com msg#: 114535) Truer still....? "As you ponder these thoughts, consider that; all economies today are truly equal in production as the exchange rates are the manufactures of profit!" Another Cavan Man (01/03/04; 18:59:44MT - usagold.com msg#: 114534) True enough.... "In the very same mind set, that people buy the best value for the lowest price (Japan cars in the late 70s), and leave an established producer to die, so will they escape the American currency and accept any competitor that offers a better deal. Because we are speaking of currencies here, the transition will be brutal! "Another Cavan Man (01/03/04; 18:56:45MT - usagold.com msg#: 114533) MK Hi Mike. Was there any particular exchange with Another that gave you pause to think that this cyber personality might really have a story to tell? What subsequent THOUGHTS gave you reason to reflect on the dialogue (with Another) as perhaps having significant substance?Bored with holidays....cheers...CM Goldilox (01/03/04; 18:42:09MT - usagold.com msg#: 114532) Simmons reports and presentations http://www.simmonsco-intl.com/research.aspx?Type=msspeeches Links to presentations at Simmons web site. An investment banker in the energy business, I found some presentations on their perspective of the natural gas markets. In their latest presentation to IAEE, most of the shortage is blamed on growing seasonal demand (especially summer, which is new) for NatGas in the power generation business, but doubt is also cast upon reliability of gas usage and storage reporting stats.I am not aware of their biases (I can certainly guess some), but the presentations are interesting. MK (01/03/04; 17:51:15MT - usagold.com msg#: 114531) Nightmare Gold Swap: Not Gold for Oil, but Gold for Electricity http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256DFF0059FC2D?OpenDocument Somehow, I missed this article earlier in the month. It describes a very strange hedge/swap operation at South Africa's Durban Deep. The article was published on 12/17 at the MineWeb. I've always started with the premise on these swaps, carry trades, gold loans, etc that they were hedging products sold by the various banking-trading company operations. In this case Investec appears to have been the vendor. My hunch is that Durban was sold on this swap (much the same way investors are sold on the latest bond offering or hot IPO). In the process, it appears they took quite a haircut.The "Nightmare Gold Swap" raises two immediate points of interest for gold investors:First, it demonstrates once again why I say gold stocks are stocks first and the metal itself second. How many investors in Durban Deep feel betrayed by the MineWeb's Stewart Bailey calls a 'Nightmare' for the South African miner. "There appears to be a sound cash flow rationale for pruning the electricity hedge," says Stewart, "but DRD shareholders could be forgiven for feeling aggrieved at yet another dilutory share issue." The swap, at the moment, represents a 250 million rand liability on the Durban's balance sheet, and Investec claims to be well hedged on the other side. And that assumes that the price doesn't rocket to the $500 level before it's all straightened out. Why these gold mining companies, whose livelihood depends on a strong gold price, constantly bet against gold is beyond my comprehension and always has been. In this case, Durban promised to pay in ounces per kilowatt, it seems -- AT A FIXED PRICE!!Second, on a grander scale, how many other stranger than strange swaps (as in gold for electricity) are out there needing to be reconciled in some format? One is led to believe that as the gold price goes up there will be more gold-chasing skeletons exiting the closet than a scene out of "Pirates of the Caribbean". Pizz (01/03/04; 17:28:12MT - usagold.com msg#: 114530) Cavan Man Thought I said "most" (smile), and still have quite of bit of that tar on my backside mixed in with some feathers from Rich's chickens. . . .comes off a bit easier with a stiff brush with gold and silver bristles. . . Pizz Cavan Man (01/03/04; 16:42:43MT - usagold.com msg#: 114529) Hello PIZZ "Sales professionals, as businesses, work on variable pay plans. Most live paycheck to paycheck, but have fixed outlays to support life styles that were determined by incomes that could not, and cannot be sustained."Dear Sir: Please don't tar everyone with the same brush. (smile)..CM DryWasher (01/03/04; 16:18:30MT - usagold.com msg#: 114528) Fed should improve policy transparency--Bernanke http://www.forbes.com/home_asia/newswire/2004/01/03/rtr1196986.html Snips: Federal Reserve Board Governor Ben Bernanke said on Saturday the U.S. central bank could improve the economy's performance by finding ways to make its objectives and thinking clearer to the public.Bernanke, who has long argued the Fed should adopt an explicit target for acceptable inflation, said reserach suggested the central bank should be "as explicit as possible about its policy objectives.DryWasher Comment:Yes Sir Mr. Bernanke, no more GreenSpeak. Just come right out and tell the public that the Fed intends to inflate the Dollar until it it is worth nothing. That should cause the economy to pick up.Gold. Me thinks you better have you some. Goldilox (01/03/04; 16:16:08MT - usagold.com msg#: 114527) Gold popularity @ 21MabryBoiler shops are already readily open for business in the media. Next time you click through the cable and satellite channels, notice how many HSN, QVC, and ShopNBC specials are dedicated to overpriced coins and jewelry. I saw one ounce gold coins "on sale" for $799 each last week. If you thought convenience stores overcharged for their "convenience", you'll get a serious haircut buying gold from these hucksters.Thanks to association with CPM and other long time members of the honest precious metals community, a single glance is all that's needed to see these media crooks are doubling and tripling margins to their ignorant TV buyers. CPM offers all the convenience of honest pricing, thanks to the miracle of the internet and a reputation for quick and honest service in the marketplace!Caviat Emptor - stick with experienced, reputable bullion dealers or get skinned alive! USAGOLD / Centennial Precious Metals, Inc. (01/03/04; 15:22:15MT - usagold.com msg#: 114526) An Invitation to Prospective Clients.... http://www.usagold.com/Order_Form.html Leigh (01/03/04; 14:42:40MT - usagold.com msg#: 114525) 21mabry We buy Parlamat boxed milk to keep at our cabin. It has an expiration date of about six or so months out, and you can buy it at Whole Foods Markets. It's pretty good, though we prefer fresh organic milk at home. We haven't tried other Parmalat products.Happy New Year to all of you!! 21mabry (01/03/04; 14:03:49MT - usagold.com msg#: 114524) (No Subject) Financial Times seems to have good sized articles about gold everyday of late,I am even actually seeing silvers gains mentioned in some articles.Just a observation to the forum,have you ever noticed the looks on peoples faces when you mention or talk about investing in gold or silver?People I have talked to have no clue they have no idea even how to buy it.This year I think you will see precious metal boiler shops opening in droves charging outrageous premiums.What I have been doing is telling loved ones and friends if you buy in the future just check with me before you purchase so you dont get ripped off.Just a question to are european members,Parmalat looks like they make some pretty tasty products it looks far better than store bought american products of the same nature.Are their products any good.21 P.S. If you do not want to get invited to parties anymore just discuss the problems you see on the horizon falling dollar,rising commodity prices,falling stock market.I can assure you your popularity will fall like a lead zepplin. Gandalf the White (01/03/04; 12:23:23MT - usagold.com msg#: 114523) Sir Caradoc Caradoc (01/03/04; 12:01:25MT - usagold.com msg#: 114522)Help needed----SORRY --- FLATLINEED just below $416. !!<;-) Caradoc (01/03/04; 12:01:25MT - usagold.com msg#: 114522) Help needed http://www.dukascopy.com/english/cquotes/onlinecharts/ My computer has decided to reject any HTML that includes Java script. Could someone with a fully functional machine please check the link above to confirm/refute rumor of gold trading above $416?Thanks to all,Caradoc steady (01/03/04; 10:38:43MT - usagold.com msg#: 114521) squak....... interesting series here ...........squak http://atimes.com/c-asia/DA25Ag01.html This continuing series in the Asia Times is a must know and why the US makes war. http://www.atimes.com/atimes/China/EK01Ad01.html http://www.atimes.com/atimes/Central_Asia/EK05Ag01.html http://www.atimes.com/atimes/Central_Asia/EK08Ag01.html http://www.atimes.com/atimes/Central_Asia/EK15Ag01.html http://www.atimes.com/atimes/Central_Asia/EK20Ag01.html http://www.atimes.com/atimes/Central_Asia/EK25Ag01.html http://www.atimes.com/atimes/Central_Asia/EL03Ag03.html http://www.atimes.com/atimes/Central_Asia/EL05Ag01.html http://www.atimes.com/atimes/Central_Asia/EL10Ag02.html http://www.atimes.com/atimes/Central_Asia/EL12Ag01.html http://www.atimes.com/atimes/Central_Asia/EL18Ag01.html http://www.atimes.com/atimes/Central_Asia/EL24Ag01.html http://www.atimes.com/atimes/Central_Asia/EL25Ag02.html http://atimes.com/c-asia/DA25Ag01.html http://www.atimes.com/c-asia/DA26Ag01.html Pizz (01/03/04; 10:24:25MT - usagold.com msg#: 114520) You can lead a horse to water. . . . . 1999, 2000, 2001 were some pretty good years for big ticket items. Low rates, easy credit, plenty of supply. No one really paid too much attention to the fact that the business cycle had been repealed by the Fed. Most of the country had not experienced any type of business slowlown since 1991, and if you were lucky enough to be in an area of high tech expansion, you hadn't had a business slowdown since 1980 - 1981.Needless to say, small business expanded as fast as credit would allow. Very similar to the sheeple buying stock and financial assets at or near the top of any bull trend.2002, 2003 saw a reduction in average volumes and a subsequent decline in gross profits. Even with rates approaching zero, volumes could not keep up with the drop in gross margins. Way too many businesses were keeping their cash flow turning by dropping prices. They had no choice, business savings were non existant, and the debt had to be serviced.Sales professionals, as businesses, work on variable pay plans. Most live paycheck to paycheck, but have fixed outlays to support life styles that were determined by incomes that could not, and cannot be sustained.The pressure from sales professionals, business owners, etc., to return to the glorious days of yesteryear is enormous. They quote government statistics, all the pro da, and are now in the process (if they are lucky enough to have any assets left to mortgage) refinancing to keep their lifestyles afloat. It's beeing done on the last vestiges of debt, hope, and blatent economic stupidity.Business decisions, as investment decisions, are more emotional than most think. We sometimes get too caught up thinking all businesses have plans, are well financed, have knowledgeable, smart, and educated owners and managers. THEY DON'T. Nearly all have been promoted to their positions by luck (being in the right position AT THE RIGHT TIME), related, or politics.The majority of jobs in this country are created by small buisinesses. Most do not work for public corporations with published financial statements (assuming you can believe all of what you read in them). Most have no idea of the real financial situation of their employer. Most go to work every day with a feeling of security. I have a job, I have a paycheck, and I'll live on what I make, and borrow what I need.Would you live the same way you are right now, if your income came from an annonomous benefactor in the form of a check each month? You would not know from where, or for how long it would continue. Well, I hate to burst a few bubbles out there, but workers only know half the answer - and that is where their paychecks come from. AND THEY LIVE AND SPEND AS IF THEIR EMPLOYERS AND MANAGEMENT ARE INFALLABLE.There is more collective ignorance managing business (and most through no fault of their own, just circumstance, going with the flow, and being in the right position at the right time) than most realize.Ignorance may be bliss, but how many know if their employer just made a decision that risked the entire company based upon greed, fear, or "I have no choice" because I have no resources to fall back upon to weather a significant recession?THINK!!!!You have no one to really rely upon but yourself. Double your savings, with a goodly portion in PM's. I personally know of a few hundred employees that just had their jobs thrown on the crap table by an owner who continues to live in the past. . . . Pizz Goldilox (1/3/04; 09:47:27MT - usagold.com msg#: 114519) Banks feel heat in Parmalat Bond sales http://www.reuters.com/newsArticle.jhtml;jsessionid=MSKAPKH23E5M2CRBAELCFEY?type=businessNews&storyID=4068067 snippit:Banks Feel Heat from Parmalat Scandal Sat January 3, 2004 07:22 AM ET By William Schomberg and Antonella Ciancio MILAN, Italy (Reuters) - International banks felt the heat from the multi-billion-euro Parmalat scandal Saturday as the Securities Exchange Commission in Washington said it was investigating whether they were negligent or reckless by selling the food firm's bonds. With Parmalat's disgraced founder Calisto Tanzi facing a new round of questioning in a Milan jail, Italian prosecutors were also focusing on the banks amid one of the world's biggest ever corporate crises. A senior inspector from the U.S. Securities and Exchange Commission was quoted Saturday as saying that the way Bank of America and other banks sold billions of dollars worth of Parmalat bonds was being examined. Goldilox:Parmalat shortfalls are approaching $10Billion euros. It's just darn hard to hide any real spending cash without some bank cooperation these days. A "Princess and the Pea" visual comes to mind, but the mattress tower might require oxygen at those elevations. Who needs a Ponzi scheme if one has a good "Tanzi" scheme? Notice, like Enron, they're searching for a hundred mil here and 200 mil there, knowing the major billions are already long gone with their tracks well covered.Memo to prospective corporate execs: Please remember to stash enough simoleans to buy off your bankers, political supporters, lawyers, and judges if you want to have something left for your ocean-front property and blue water yacht. Goldilox (1/3/04; 09:21:44MT - usagold.com msg#: 114518) China and Japan battle for Russia's oil and gas http://www.nytimes.com/2004/01/03/business/worldbusiness/03asia.html snippit: Japan and China Battle for Russia's Oil and GasPeter Blakely/Redux, for The New York TimesVostochny has access to railroads and, with piers extending far offshore, officials expect the port to be able handle vessels up to 300,000 tons.By JAMES BROOKEPublished: January 3, 2004ARTICLE TOOLSE-Mail This ArticlePrinter-Friendly FormatMost E-Mailed ArticlesReprints & Permissions Single-Page Format MULTIMEDIA Map: The Proposed Pipelines TIMES NEWS TRACKER Topics Alerts Oil (Petroleum) and GasolineRussiaJapanChinaOSTOCHNY, Russia - For now, Krylova Cape is not much to see: a spit of land between the Russian taiga forest and the Sea of Japan, its soil being graded a bit by a bright yellow bulldozer. But what is taking shape here is central to a pitched struggle between the two most important economies in Asia: the reigning titan, Japan, and its rising challenger, China.Both economies are hungry for raw materials, especially energy - Japan because it has almost none of its own, China because its economic boom has fast outstripped what once were adequate domestic supplies. Both want to limit their dependence on oil from distant, politically volatile regions like the Middle East. And both see an attractive alternative in the little-tapped energy riches of the vast, vacant Russian Far East. Getting oil to market from the remote East Siberian fields that Russia is ready to develop means spending billions on a pipeline. Japan and China are fighting hard over where that pipeline will go: either to China's northeastern industrial heartland, or to this stretch of Russian shoreline, where a new deep-water oil terminal will be just one day's tanker cruise from Japan.With the choice Russia faces, the political and economic dynamics of Northeast Asia stand to be profoundly shaped for years to come. "The Chinese will be furious if the Russians do not give them the pipeline," said Graham Hutchings, an Asian specialist with the British consulting group Oxford Analytica. And no one expects it to be the last time Japan and China collide over the resources they both need.China has been talking to Russia about Siberian oil for a decade, and its need has grown acute. It is on a pace to overtake Japan next year as the world's second-largest oil consumer, and to catch the leader, the United States, sometime around 2030, by quintupling its current demand. Energy shortages plague the country, with 21 provinces experiencing rationing and blackouts so far this fall and winter, twice as many as last year. A Russia-China pipeline, Chinese officials say, would be a natural north-south marriage between Asia's largest oil exporter and what will soon be Asia's largest oil importer. Japan, whose demand for oil is slowly falling because of anemic growth and a shift from manufacturing, came later to the game, making a serious alternative proposal only a year ago. But it has steadily sweetened its bid, while the financing of the Chinese plan remains fuzzy. Japan now is offering to put up $5 billion for pipeline construction and another $2 billion for oil field development, while holding out the prospect that a pipeline to the Sea of Japan could handle oil exports to America, too.Goldilox:With this kind of demand, I wouldn't look for oil <$30 too soon. Is this what Japan is doing with all the US$ they're buying? Goldilox (1/3/04; 09:08:01MT - usagold.com msg#: 114517) Pension Funding Still a Concern http://www.azcentral.com/arizonarepublic/business/articles/0102pensions02.html snippit:Pension Funding Still a ConcernDepleted despite stock market gainsMary Williams WalshNew York TimesJan. 2, 2004 12:00 AM"Last year's stock market rally has added more than $100 billion to corporate America's depleted pension funds, but even that has not been enough to offset forces that continue to weaken the funds.If all of America's 500 largest companies had to make good on their promises to workers and retirees immediately, they would have to plug a $259 billion gap in their pension funds, according to a study by Standard & Poor's that will be published soon. A year ago, even though stock prices were lower, the same companies were considerably closer to meeting their obligations, being only $212 billion short.That is because their obligations to their workers have spiraled up at an even faster pace than stocks have risen. One obvious reason for this is that as the baby-boom generation ages, many more people are starting to claim their money. Another factor is that many pension calculations incorporate several years' worth of data, to smooth out sharp fluctuations, so the market shocks of the past three years are still working their way through the system. Finally, an otherwise positive economic development, low interest rates, is an albatross on the funds because they magnify the value of future pension obligations in today's dollars."Goldilox:GM's market windfalls seem to have taken the heat off of corporate pension shortfalls, but this author suggests that overall, they are in worse shape than last year. Goldilox (1/3/04; 09:00:24MT - usagold.com msg#: 114516) Jan 2nd Random Walk - Rob Peebles http://www.prudentbear.com/marketsummary.asp snippit:There are some people, however, who will tell you that thanks to low interest rates, it's no big deal that the consumer has piled on debt like multiple dips of Rocky Road atop a skinny sugar cones. Besides, people are smarter today and there's all that home equity just sitting there. Just wear your sunscreen and eat plenty of fiber. Well as you can see from the red line on the chart, the part about no change in debt service is a bald-faced lie. Since the mid-‘90s debt service burdens have gone up faster than Paris Hilton's notoriety, despite multiple refi booms, falling rates and general good fortune. Yes, the measure has dropped a bit over the last couple of years, but it remains in a range even the Fed might call "darn high." And that brings us to the purple line. The numbers that make up the purple line come from the BEA's data on personal income and outlays. If you divide personal consumption by personal income, you get a number that tells you something about the relationship between the two. The 85% number for September means that spending came to 85% of income. And income includes a lot of stuff besides wages and salaries, for example, interest income and transfer payments. (The ratio of spending to wages and salaries, by the way, is more like 150%.) Regardless, the purple line says that consumers are spending a larger and larger share of whatever income is. What's also unusual about the purple line is that while it fell during the recession in the early ‘80s, and went sideways in the ‘90s recession, it took off like a rocket during the latest downturn. And it's still going.Goldilox:Rob delivers a good analysis of consumer debt service ratios along with some light humor. Another piece of evidence that suggests only inflation can solve the massive debt problems, even at the individual level. Goldilox (1/3/04; 08:34:50MT - usagold.com msg#: 114515) Correction Oops, I skimmed a little too quickly.In my observations, replace "reduced industrial demand" with "no increase in industrial demand" just to be more precise. Goldilox (1/3/04; 08:31:23MT - usagold.com msg#: 114514) FT PM Summary for 2003 http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1071251863167&p=1012571727207 snippit:By Kevin MorrisonPublished: January 2 2004 4:00 | Last Updated: January 2 2004 4:00Gold has defied expectations to record a 20 per cent gain for the second year running as it finished 2003 near a 13-year high.The metal benefited from the slide in the US dollar against major currencies, with bullion prices peaking at $417.40 a troy ounce - within 31 cents of its highest level since February 1990. Bullion settled fractionally lower at $417.25/$417.95 in London trade on Wednesday.Strategists expect gold to continue its run this year - possibly to a 20-year high. The metal's rise last year mirrors the magnitude of the dollar's decline against the euro. Many gold investors value the metal as a currency, and see it as a safe haven in times of economic and political crisis. But it is unusual for gold to show such a strong increase when the world economy is recovering.Gold has risen almost 70 per cent since reaching its 20-year low of $251 per ounce in August 1999, a period when the metal was shunned and unfashionable beside the then sought-after technology and internet stocks. Its attraction as an alternative investment gathered momentum last year with the launch of gold-backed investment products from the World Gold Council.Investors bought about 23 tonnes of gold in the first three weeks of the launch of the council's listed product - Gold Bullion Securities - on the London Stock Exchange.Analysts said this was a good start, considering that investors only bought a net 125 tonnes of metal in 2002.Gold traders said it looked increasingly likely that gold could reach $450 in 2004, possibly going as high as $500, a level it has only broken for a few months in the past 20 years.However, gold was outshone in 2003 by other precious metals.Silver gained 25 per cent, hitting $6 a troy ounce for the first time since May 1998. Many attribute silver's rise to the bullish sentiment in the metals sector rather than any increase in demand.Analysts said demand for silver had been reduced by the fall in its use for photography, one of its main industrial uses, as more photographs are taken digitally. Platinum again recorded the biggest price gain for precious metals, advancing about 35 per cent, following on from the 24 per cent gain in 2002.Platinum ended the year at $812 a troy ounce, short of its 23-year high of $858 reached on December 18.But platinum's dramatic price rise - it has doubled since October 2001 - is starting to hit consumers. Last year marked the first in more than a decade that global platinum jewellery demand fell.Goldilox:Notice how the idea of gold as "currency" was slipped into the article. Also, a noticibly good response to the London ETF was recorded, reaching almost 20% of 2002 totals in just three weeks. Also - Rich, silver recorded a 25% increase in spite of "reduced industrial demand". a nation of one (1/3/04; 07:54:34MT - usagold.com msg#: 114513) Solomon When posting, I tend to write about one thing at a time. I try to avoid pumping my posts full of everything that I know, or fill it with matters that don't pertain to the points I am making.I was sharing with those who are interested a certain type of reasoning which I have found useful. I quoted a couple of paragraphs from an article that was linked to. Then I told what I thought they revealed. I understand what you are saying. Your comments are not necessarily in conflict with information in the article, or with what I was saying.My comments too are not in conflict with information contained in the article, if you can see how they are not. Spartacus (1/3/04; 04:38:27MT - usagold.com msg#: 114512) Belgian (1/2/04; 09:11:55MT - usagold.com msg#: 114474) Ok, got it, thanks. ViewYesterday's Discussion.
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