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ARCHIVED DISCUSSION FROM 3/3/2005
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Goldilox (03/03/05; 23:50:24MT - usagold.com msg#: 129843)
AG's Epiphany?
@ BB

What'd he do? Clean his glasses so he can actually SEE the numbers?

Black Blade (03/03/05; 23:16:49MT - usagold.com msg#: 129842)
ECONOMY'S DEBT THREAT
http://www.nypost.com/business/22211.htm

Snippit:

March 3, 2005 -- Alan Greenspan thinks it's time to cut Uncle Sam's credit cards in half. In a stern rebuke yesterday of the government's unwieldy spending, the Federal Reserve chairman told Congress that its current budget habits are "unsustainable" — and warned they're "fiscally destabilizing" to our economy. Greenspan said, "We may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver.

Pointing to a record budget deficit of $412 billion in fiscal 2004, Greenspan said: "When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you —and add interest costs to that ever-rising debt at ever-higher interest rates — the system becomes fiscally destabilizing."


Black Blade: I guess old Al has had an "epiphany". ;-)


Black Blade (03/03/05; 22:42:10MT - usagold.com msg#: 129841)
Skills shortage sinks gold mine
http://www.theaustralian.news.com.au/common/story_page/0,5744,12437066%255E601,00.html

Snippit:

PLANS to reopen one of Australia's largest goldmines have been abandoned because of acute labour shortages that are threatening to delay mining projects worth billions of dollars.

Black Blade: Similar but not quite so severe situations exist at other mines worldwide. Same with the energy industry. The experienced workers left when prices cratered and they won't come back after being burned. The universities don't teach these skills anymore either. This will continue to be a limiting factor for the production of metals and hydrocarbons.


Kilo (03/03/05; 20:00:10MT - usagold.com msg#: 129840)
Galearis - Playing the paper games
Will have to admit to playing into the "paper games" of sorts with some of the Krugerrand stash on occasion, selling into the spikes and buying back on the dips. Since '99 have managed to add a couple dozen extra ounces to what would otherwise have been a "static" investment in ounce terms, mostly by watching the AU and DX charts only. No rocket science involved there. Would be harder to do on the silver side I suppose due to the higher cost of shipping and spread percentages, being located in rural middle-America as we are. There are ways of beating them at their own game though, even in physical........ ;)

Galearis (03/03/05; 19:44:37MT - usagold.com msg#: 129839)
@ kilo and slingshot
Now what is that delicious phrase? Oh yes, timing is everything! The thing that just drives me right up the wall and back again is knowing that while the paper game of metals allows the day traders to play, the metal buyers are people that are automatically in the long game. One can't (unless mentally deficient) expect to win running metal and wallet back and forth to a gold and silver dealer to address every rally and tank (respectively) to make an expressed DAILY living! It's the long haul for us. And much the greater gamble. One seems to always to be standing and looking down the long dark valley of death for that ray of sunshine and hope.

I am confident that all that the Venerosas and the Butlers predict for our metals will eventually come to pass, and yet while I grind my teeth (as a Canuck )for the past three years with the gold in hand a losing value, and silver bouncing along the bottom of the inflation channel (albeit the volatility is pretty to look at graphically), as a moderately good investment that one can't touch, I know that the day traders on the futures markets are salting profits away and are able to plan and buy their security now for the hard falls ahead…

I cannot do the same thing, and what works for them, is a double whammy of pain for me.

And we also have to listen to all the uptick dissemblers, anti-metal bug slurs, AND the CFTC telling us to suck it up, boys.

I'm not getting any younger either.

Had to get that off my chest.

Nice talking to you.

Thanks.

G.


Max Rabbitz (03/03/05; 19:13:37MT - usagold.com msg#: 129838)
IMF Gold Sales
http://www.miningweekly.co.za/min/news/today/?show=63937
From today's News.

"In a written reply to a question from Parliament, Manuel said he favoured including five-year quotas for gold sales allocated to central banks in 2004 for the process."

--------
Max......It sounds like South Africa's Treasury supports the proposed use of International Monetary Fund (IMF) gold sales to fill in the WAGII quotas that EU central banks just don't seem to want to fill. Or is this just more talk when nobody wants to do the walk? What's in it for SA? I'll bet there's something in it for Mr. Maneul and the bankers.



canamami (3/3/05; 18:41:40MT - usagold.com msg#: 129837)
Reply to Town Crier - CB Selling
To a great extent, I sense some bank may be selling mainly due to gut instinct, which has often proven right in the past (but that was more true before the severe period of the gold bear ended).

I noted there have been a couple of days in the past week, when gold fell against almost all currencies, which seems to indicate artificial downward pressure, at least to me.

Also, a recent article from Bill Murphy indicated aggressive selling from some source had been occurring, which to me means a central bank.

I probably shouldn't have used the word "dumping"; it could very well be the planned selling under Washington II, onto which the shorts are leveraging.

The good thing is that some CB's have now entered the buy or accumulate column. Add in grassroots demand from Asia and the ME, and things are sure better than they were five years ago.

Federal_Reserves (3/3/05; 18:36:08MT - usagold.com msg#: 129836)
Gold
Historically wars, huge deficits (trade and fiscal), bring a shine to gold. Conditions are excellent for gold right now and have been for some time. That's why its been in an up trend.

The national debt is now 7.7 trillion and rising at the fastest rate ever. Up some 40% in the last 5 years. Our trade deficit is near 600billion, all time highs as a percentage of GDP. Both factors have the US standing on the edge of a cliff - the precipice of disaster!

I have no idea what Congress is thinking. Greenspan told them to reign things in this week at least on the deficit. There is some movement afoot to do something about the trade problem too. Here and there more table pounding regarding increasing the savings rate.

We have to keep a careful lookout. If these congressman start taking steps to hold the lines on spending and do something to help out on the trade side, i.e. start acting in a responsible fashion, gold could take a hit. For now though things are fine, gold is still in a solid channel line up trend, and it looks like the bozo's in Congress don't have a clue! That means nobody believes they will and can do anything to change things. Thusly, the crisis will come first, then the change.


Cytek (3/3/05; 18:29:15MT - usagold.com msg#: 129835)
LOL- Now Spring Fashions are holding up the economy.
Feb. Retail Sales Up on Spring Fashions
Thu 4:55PM ET - Associated Press
Despite a spike in oil prices and stormy weather in the Northeast and Midwest, consumers extended their shopping spree into February, handing retailers better-than-expected sales for the month.

What's next yoghort sales? Who cares about the price of Oil, people are buying new clothes despite having less money to buy them. Let's CHARGE it.

TownCrier (3/3/05; 17:50:28MT - usagold.com msg#: 129834)
Sent in by a friend: 'New Europe' renews its links with the old
http://www.iht.com/articles/2005/03/03/news/europe.html
March 4, 2005
BUDAPEST -- Frustrated by travel restrictions and uneasy about the war in Iraq, citizens of Central Europe who once pledged allegiance to the United States are now recalling their European roots...

...the ease of traveling and working in other European Union nations -- compared with the difficulty of securing visas to travel to the United States -- is making "old Europe" a more attractive ally, analysts and local residents say.

"It's changing. Central Europeans are waking up to the reality that, from here on out, their bread is going to be buttered more in Brussels than in Washington," said Charles Kupchan, director of European studies at the Council on Foreign Relations in Washington.

That trend is apparent in Budapest. Prices, which were once listed in Hungarian forints and U.S. dollars, are now displayed in forints and euros.

^----(from url)----^

Among other things, the euro can enjoy price of place in the world -- a growing currency union at a cross-roads of people right in the middle of everything. The dollar headquarters, on the other hand, is relatively isolated, sandwiched between two large oceans.

Meanwhile gold enjoys the mystique of being everywhere, and yet so prized and hard enough to come by that it's practically "nowhere" at all. Unlike a government controlled currency, gold will never hyperinflate away into zero value. A great fundamental characteristic for a savings agent.

R.

TownCrier (3/3/05; 15:30:41MT - usagold.com msg#: 129833)
Make use of forward trade to ease pressure on forex
http://www.thedailystar.net/2005/03/04/d50304050152.htm
(Daily Star) March 04, 2005 -- Bangladesh Bank yesterday asked fund managers of different commercial banks to take advantage of forward trade to ease pressure on foreign exchange.

The central bank officials briefed a group of managers in Dhaka on how they can utilise the forward trade facility without minimum risk citing several examples and making in depth presentation, sources said.

In a bid to ease pressure on foreign exchange, the central bank last week relaxed its regulations relating to forward trade so that the fund managers can trade foreign exchange beyond their limits.

According to the sources, the central bank prefers to inject greenback in the market cautiously and is not willing to take the foreign exchange reserves below three billion mark, having taken different measures to maintain the level.

^-----(from url)----^

You see Bangladesh do this here with respect to greenbacks; is it really so hard to imagine IMF/Dollar System supportive agents doing the very same with respect to gold in the post-Nixon environment? Recounting from ancient times, we have gone from market standards of property barter, to a barter/monetary halfway-house in the form of a gold coin standard, to a Bretton Woods sanctioned gold/dollar exchange standard, and most lately to a post-Nixon dollar-denominated gold derivative standard which we are still essentially operating under today.

The growth of political rumblings in recent years toegether with the coincidental development of the unique euro system speak to the effect that we are in a phase of transition to a new standard which shall restore to gold a degree of market valuation freedom not seen since the ancients valued it freely and intuitively as property worth holding. By contrast, in today's gold market an "ounce" is watered down with so many paper encumbrances and clones that nobody can really say for sure what commanding view a physical ounce could have if only the smoke were cleared. But take heart, goldmeisters, the winds of change are certainly blowing.

R.

968 (3/3/05; 15:11:05MT - usagold.com msg#: 129832)
@ canamami
Why are you more concerned of CB gold selling instead of being worried by less buying ($-)T-bills by Asian CB's ? ECB gold is marked to the market (MTM) !

TownCrier (3/3/05; 14:37:12MT - usagold.com msg#: 129831)
Russia declares status of platinum group metals no long 'state secret'
http://news.yahoo.com/news?tmpl=story&u=/ap/20050303/ap_on_bi_ge/russia_metals_reserves_2
R.

TownCrier (3/3/05; 14:32:12MT - usagold.com msg#: 129830)
One reason why individuals choose to save using gold -- they can't trust the local currency
http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=3535265
HEADLINE: Venezuela gov't devalues bolivar currency 10.7 pct

CARACAS, Venezuela, March 3 (Reuters) - Venezuela on Thursday devalued its bolivar currency by 10.7 percent, a move expected to generate more revenue from crude exports priced in dollars to help finance President Hugo Chavez's programs for the poor.

Analysts said the move will bolster the central bank's foreign exchange profits and the government will reap more local currency, but warned the devaluation was likely to increase inflation...

"Obviously manufacturing sectors include in their production a high level of imported goods ... without a doubt this increase will be passed on to prices," said Lope Mendoza, president of business group Conindustria.

The latest devaluation was the country's second since a fixed exchange rate was established to stem the currency's slide. The last bolivar devaluation in February 2004 weakened the unit by 16.7 percent, but helped boost government revenues...

WHY YOU CAN'T SIMPLY RELY ON "THE SIGNS"

Domestic financial markets have been speculating over the expected devaluation since December when then Finance Minister Tobias Nobrega said it would go ahead in early 2005, but later backtracked, saying he could not give a date for the move. With oil prices seen staying high, most analysts said the government's financing looked manageable through 2005.

^----(from url)----^

As evidenced in that final excerpted partagraph, the signs intended for public consumption always tend to set the most people up to have the rug pulled out from under term. Therefore, the lesson is to be prepared for anything, at any time. Especially regarding China's currency peg, and the international reserve status of the dollar.

Getting back to this story, apparently the government deemed oil prices are still not high enough, so for the time being, if they can't boost the dollar price of oil, at the least they can boost the domestic price by devaluing their local currency against the dollar/oil standard.

Thus, as local savers in one corner of the world or another are fed up with this ever-looming government-led erosion of their nest eggs, they begin more and more to rely upon gold as the secure building blocks of wealth for their savings and retirement.

You should, too.

R.

slingshot (3/3/05; 14:09:32MT - usagold.com msg#: 129829)
Kilo and Galearis
You two are great and just had to smile when I read your posts on the sale and purchase of precious metals. I would hope that everyone has thought about when they were to put their investment to good use. Yes, it is sort of a banger when you pay a premium on one side and get less than spot on the other, for either metal. Silver has been blessing and a curse. Picking up the metal at about $3.80 spot and a 25 cent premium holding tight at $6.00 and the premium run from 50 cents to $1.25 Should I have dumped the whole she-bang at $8.50? I may have to live with that but I could not see letting it go for paper and having to scratch for it to get back to my same level. Why did I not trade it for Gold? I believe silver will shake out the weak hands and the POS is going higher IN THE FUTURE. Besides why did I want to help flood the market and lower the POS using my silver. POS came down, I brought some more and for a time the silver ran short and the premium went up and stayed up as the POS climbed again. Maybe it is just a matter of when you jump in and when you drop out and the hope the premium or the sale will not hurt you. Remember you went to the coin dealer. He didn't call you.;o)

I'm in for the Long Haul.

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

USAGOLD Daily Market Report (3/3/05; 14:08:51MT - usagold.com msg#: 129828)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Thursday Market Excerpts

(MarketWatch) -- The dollar managed narrow gains in the wake of U.S. economic data, dampening investors' appetite for fresh gains in gold, as the financial markets await Friday's all-important February payrolls report.

COMEX April gold closed at $433.80, down $3. Low for the session was $430.10.

Kevin Kerr of Kerr Trading International called the recent pattern in gold "backing and filling."

Trading such as this is "healthy for the bull market and is actually quite a positive sign for gold to test the elusive $450 level on the next round of dollar weakness," he said.

But Kerr noted that gold could be vulnerable to "further consolidation" if the growth in U.S. payrolls last month proves strong enough to roil the dollar in the currency markets.

-----(see url for full news, 24-hr headlines, market prices)----

HEADLINES

Venezuela gov't devalues bolivar currency 10.7 pct

Bangladesh CB urges fund managers - Make use of forward trade to ease pressure on forex

Dollar depreciation good for economic growth

CFTC Tells Congress Of Challenges Fighting Forex Fraud

ECB holds rates steady

TownCrier (03/03/05; 13:21:28MT - usagold.com msg#: 129827)
Dubai Study Endorses GATA's Findings on Gold Market Rigging, Warns Oil Producers
http://biz.yahoo.com/bw/050303/35548_1.html
DALLAS--(BUSINESS WIRE)--March 3, 2005--A study published by a research foundation in Dubai has endorsed the Gold Anti-Trust Action Committee's findings that Western central and commercial banks have rigged the gold market but have much less gold than they claim to have and so are vulnerable to rising demand for gold.

The study recommends that the oil-producing countries of the Middle East diversify their ever-depreciating U.S. dollar holdings into gold.

The study, "The Role of Gold in the Unified Gulf Cooperation Council Currency," was written by Eckart Woertz, vice president of CFC Securities in Dubai, for the Gulf Research Center.

...predicts that the gold price suppression scheme of the Western banks will fail just as their similar scheme of the 1960s, the so-called London Gold Pool, failed when the drain on Western gold reserves became too great.

Once the scheme fails, the study says, "it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the Gulf Cooperation Council countries."

The study concludes: "The paper dollar standard is a dead man walking. Its debt, accumulated over the recent decades, is too high to be effectively repaid. It will either default or be inflated to such an extent that it will not 'hurt' to pay it back. Therefore, the accrued imbalances in global finance and the inherent weakness of worldwide growth models that rely on a continuance of U.S. deficit spending are likely to usher in a serious crisis of currency systems in coming years.

"Gold will be a suitable means of asset protection and ultimate payment in such a scenario. It will preserve the wealth of individuals and central banks alike and will ensure important maneuverability for the latter."

The Middle East's oil-producing countries are especially obliged to heed the Gulf Research Center's study because their economies are based on a wasting asset, oil, whose depletion will leave them with little more than sand if the payment they receive is substantially depreciated or defaulted upon. In exchanging a real asset for paper assets that represent only unpayable debts, oil-producing countries are at imminent risk of massive expropriation.

^------(from url)-------^

Shades of 'The Gold Trail', ground broken by Another and FOA that many lucky readers have been following here and staying well ahead of the curve for at least seven years now.

As this fundamental information becomes more widely disseminated and understood by market participants, the mechanisms of radically undervalued gold and the purposes served by it will come off the rails and gold will once again be seen in its proper, full-bodied form as king among reserve assets.

Keep spreading the word.

R.

Chris Powell (03/03/05; 13:20:07MT - usagold.com msg#: 129826)
GATA distributes international press release on Dubai gold-rigging study
http://groups.yahoo.com/group/gata/message/2902
Latest GATA dispatch....

Spread the word!



To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com


TownCrier (03/03/05; 13:02:41MT - usagold.com msg#: 129825)
canamami, POG prices
I'm curious. What are the specific telltales that suggest to you that the price action is attributable to CB selling in the last few days?

I ask because there are numerable elements that compound into the price outcome and it seems incredible to me that anyone could filter out any specific signals of CB gold movement deep beneath it all.

For example, as shown in 968's post, the ECB on Tuesday revealed what reserve portfolio transactions had occurred during the course of last week. In addition to a liquidation of EUR200 million worth of foreign currency, there also occurred a net decline of EUR99 million in gold as two CBs sold under the umbrella of the Central Bank Gold Agreement while another CB bought a small quantity.

Did your telltales tell you anything was happening last week, or was that already rightfully factored into the ambient baseline?

To be sure, sales of that sort are generally to be expected for the next 4-1/2 years under the terms of the Agreement, and additionally the market expects to see Switzerland continue to sell approximately 20 tonnes into the market over the next three weeks -- which is a pace consistent with their gold market activity over the past 5-1/2 years.

What is it about the past few days that make you think something else is afoot, and how can you discount the odds that any given ripple in POG isn't a more superficial result of derivatives, the fickle winds of COMEX, or assignments of unallocated gold into double duty, producer gold loans, forwards, etc?

Thanks in advance for any insights you can offer to me on this.

R.

Topaz (03/03/05; 12:38:07MT - usagold.com msg#: 129824)
To everything, turn, turn.
http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOW
Rationale flew out the window today.
Gold sadly, could not stand the heat of a rising Dollar and retreated back to it's currency mean. There may well be some noise about Gold sales getting around but I'm too lazy to go look for it!
Oil/Bond is lock-step (although it (Oil) is closer correlated to 10Yield. These BOTH will reverse tomorrow imo.
Buck is in strong tech upswing with maybe a hint of downside risk if Yields drop too quickly.

So it goes!

968 (03/03/05; 11:46:00MT - usagold.com msg#: 129823)
@canamami
ECB's weekly financial statement :
http://www.ecb.int/press/pdf/wfs/2005/fs050225en.pdf


canamami (03/03/05; 11:24:24MT - usagold.com msg#: 129822)
A CB dumping?
Is there some way to learn if a central bank has been selling? I know there is a report that comes out every month or quarter wherein the banks are supposed to set out their dealings with gold.

The POG action of the last few days suggests to me a central bank may be selling.



Clink! (03/03/05; 10:13:32MT - usagold.com msg#: 129820)
More thoughts @ Druid
I
You said "Governments don't mobilize armies to protect bonds."

I'm not so sure you can say that. According to "The Creature from Jekyll Island" (among others), the principal reason for the US entering WW1 was that there was a significant risk that the loans advanced to the UK and France would not be repaid in the event of a German victory. As Morgan had lent more to the first two than the latter, it made better business sense to ensure that the bigger debtor(s) won. As I recall (it's been a while since I read it), Morgan also made a bundle off the subsequent US war bonds as well as the British and French ones.
Now I would be the first to admit that things have changed since then as those bonds were payable in currencies equivalent to specie !

C!

968 (03/03/05; 09:44:43MT - usagold.com msg#: 129818)
@ Druid
Buy time for oil and gold, or for the dollar and POG-management ?

Druid (3/3/05; 09:32:50MT - usagold.com msg#: 129817)
Thoughts

Druid: The Euro/gold/oil/dollar relationship and architecture is the 800 pound gorilla that will smash the yen/bond carry trade that Fekete is espousing. Governments don't mobilize armies to protect bonds. Maybe the good Professor should view the carry trade as a mechanism to buy time for oil and GOLD.

Kilo (3/3/05; 09:08:21MT - usagold.com msg#: 129815)
@ Galearis silver/gold arguements

Of course you are right that the same could be applied to gold. I'm not saying that I believe or agree with all points made in the C&P, but do believe that if every grain of gold and silver ceased to exist on a moments notice that there would be little if any true or lasting effect on the world economy as a whole. Something else would soon take their place as monetary representations if that were to even be considered a "necessity". What we consider a "viable monetary alternative" could take shape in most any form as long as mankind deemed the item involved as being of sufficient "value", regardless (as you point out) of actual scarcity. After all, in the end, the value of gold and silver is nothing more than human perception.

Galearis (3/3/05; 08:53:01MT - usagold.com msg#: 129814)
@Kilo re the C&P on silver. Poster is right,,,but
This could just as well be a silver bug talking here. I could have written this yesterday after reading a rather depressing scenario for gold and silver by Feteke. And I too am a silver bug (and gold too).The forum posting author is right, of course,...But one can make exactly the same argument about gold; just add to the supposed time frame to zero supplies...But Feteke and others have stated that relatively abundant gold does not matter for gold to be effective redeemable money,,,, Does it matter if there isn't very much left? I would think it would. If one has to rely on mine production for replenishment of gold,,,,if we evolve a need for it to get out of the present fiscal mess, then the price has to be allowed to rise greatly in terms of all currencies in order to dampen consumption and demand for it....Thence the vault supplies WOULD rise. Gold has not risen appreciably in real value terms in even USD,,,if one allows for the inflation/dollar shrink. And we all watch (and some even see) the vault supplies shrink right along with the currency unit sizes. The cost (smile) of manipulation to "then".

Please consider, if the FED and the other cbs are in nihilistic mode,,,,that they quite possibly will defend this system to OUR bitter end (again using the Feteke point of view), then it is in their interests to force the complete liquidation of all above ground supplies AND drive all miners out of business. This would also allow this system to stagger on for X (another unknowable number of) years (similar to silver), and use up these same supplies in the same way as those of silver were consumed - albeit at a slower rate. This would be rather effective in depriving the system of its redeemable bail out in the form of a return to a gold standard.

If one is to believe that Ted Butler is remotely correct in his anecdotally based assessments of above ground supplies, then we are already there for silver...That silver is too valuable already to be used for just money. Gold being relatively speaking use---less for almost everything else, is much more suitable as the preferred currency (back to) alternative,,,,But being use----less, it can also be used up without any particular damage to a viable economy.

Or the X numbers of central banks have oodles of supply in the vaults, or black silver, or legislation in the wings to confiscate same, or nationalization,,. But all precious metals supply and demand numbers are suspect. Both gold and silver are so controlled and regulated,,,,after all the PURPOSE of COMEX is to control the price - that's why the CFTC ignores infinite short attacks on BOTH - and that supports a nihilistic end game too.

Because if this goes on to the VERY end, there would not be ANY viable money at all. Back to conch shells,,,whatever.

But could one expect less, when the crooks are running things?

Just a muse on a so-far quiet day. Back to hibernation, it's cold out there!

Regards,

968 (3/3/05; 07:38:47MT - usagold.com msg#: 129813)
The Importance of Raising National Saving
http://www.federalreserve.gov/boarddocs/speeches/2005/20050302/default.htm
Speech by Governor Edward M. Gramlich
At the Benjamin Rush Lecture, Dickinson College, Pennsylvania
March 2, 2005

SNIPS :
"The trends, especially for Medicare, are so alarming that these two programs alone could, in the space of little more than a decade, account for about half of federal spending. Changes have to be made in these large entitlement programs to avoid a real fiscal disaster."

"The historical record for the United States, presented in a form similar to that for budget deficits, is shown in figure 3. Again, the dotted line is the primary deficit ratio, which in the case of international accounts is just the trade deficit. The solid line is the ratio of net international liabilities to domestic GDP, a measure of the nation's ability to afford its liabilities. As recently as 1985, net U.S. liabilities to foreigners were zero. But since 1990 the United States has embarked on a long-term period of high trade deficits, and now the international liability rate is close to 25 percent of GDP and rising sharply. International wealth portfolios are getting increasingly heavy in dollar-denominated assets. How long can this process continue?"
------------------------------------------------------------------------------------------------------------------------
Isn't it ironical that a papermoney portfolio is called a wealth portfolio ??? Are foreign exchange reserves wealth portfolios ???
What a contrast to Bundesbank's Weber pronouncement : "Our Gold is the wealth of the German people."

Black Blade (3/3/05; 07:14:24MT - usagold.com msg#: 129812)
Economic growth drives gold demand - China
http://news.xinhuanet.com/english/2005-03/03/content_2641522.htm

Snippit:

BEIJING, Mar. 3 -- Consumer demand for gold in the Chinese mainland increased 12.8 per cent last year from 2003, according to the World Gold Council (WGC). The mainland's consumer demand for gold reached 234 tonnes in 2004, up from 207.4 tonnes in the previous year, according to WGC statistics. The growth jumped from 1.7 per cent in 2003.

Gold demand remained robust in the mainland, the world's fourth-biggest gold consumer after India, the United States and Turkey, the WGC said in a statement to China Daily.

"Gold demand in the mainland is expected to maintain such a growth momentum in 2005 as a result of China's steady economic growth and bullish gold prices," said Albert Cheng, managing director of the WGC's Far East operation. "We hope gold demand as retail investment in the mainland will have a big breakthrough this year," Cheng said.


Black Blade: China is the sleeping giant here. Once Gold becomes widely available throughout China the real fireworks begins.


968 (3/3/05; 07:04:23MT - usagold.com msg#: 129811)
Introductory statement to the press conference
http://www.ecb.int/press/pressconf/2005/html/is050303.en.html
The key ECB interest rates remain unchanged.

Kilo (3/3/05; 06:39:22MT - usagold.com msg#: 129810)
Interesting C&P on silver

C&P from another forum I thought made some interesting points on silver:

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Trading silver for gold

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A funny thing happened on the way to the coin dealer....... (true story).

Recently at an area coin dealer/pawn shop/PM dealer's shop when someone walked in on a Saturday morning with a bag of 90% junk. He wanted to trade it for gold. Shop owner told him he would pay his "going rate" and charge his "going rate", giving nothing on the trade or even narrowing the spreads. Reasoning was that he was in business to make a profit, and it mattered little to him if it was an outright purchase followed by an outright sale, he still kept the same spreads.

I think you are likely to find this to be the case with any "dealer" out there. They are looking at the profit margins rather than the metals involved. This is also why "ratio swapping" can get very expensive, playing the silver:gold ratio according to market movements. You are effectively paying the dealer commissions (profits) on both ends of such a trade, both when buying and when selling (taking a loss on the sale and paying a premium on the purchase).

Depending too on the markets, you may actually find it easier to trade your gold for silver than visa-versa. Few dealers out there look on silver as the preferred holding, at least for themselves, partly due to demand fundamentals (customer demand) and handling and shipping costs involved with the silver in comparison to the gold.

The only "historic ratios" between gold and silver are those artificially bestowed by governments or via market supply/demand, with the exception of the true "natural" ratio of the presence of the two respective metals in the ground. What the ratio "should be" is alot harder to determine than what it actually "is" at present...... usually more speculation than anything. Assuming there is a "correct" ratio, or that the ratio will ever return to any particular level can be a big mistake, just as assuming "known" silver supplies really bear any real meaning in comparison to what is actually out there.

"The numbers" in silver have been bantied around since the late 60s, and according to some of the earlier writings, we should have been "out of silver" a long time ago. According to Butler and others, the numbers are getting very low, yet there is still silver available. Nobody out there knows the real numbers where silver availability is concerned, and never will. For the most part, it's all an investment sales pitch, and as others point out........ "wearing very thin". Where did Butler's writings originate, and who bankrolled most of his work ? How much silver does he own himself ?

You see, the problem is that the claims as to silver supply always stop short of anything even remotely close to reality. The assumption that "official supply" numbers represent all of the silver above ground is very misleading, but used as "statistical" because anything beyond recorded numbers cannot be proven or disproven one way or the other. This is why silver is touted as such a fantastic investment to begin with...... because incomplete information (and outright misinformation) can be spread for marketing purposes with little or no rebuttle and the "gurus" know that there is no earthly way to prove or disprove their claims. This supposedly makes them "experts" in their field because nobody challenges their claims.

Knowing the "REAL NUMBERS" as to privately held silver inventories compared to COMEX or similar documented inventories (if that were even possible) would likely send most silver investors into a cold sweat. And it is just that "impossibility" of knowing the complete numbers that keeps the silver myth alive and well.

We talk about "market manipulation" on both sides of the PMs (silver and gold), but do we ever stop and think or wonder just what is REALLY behind the silver tout ? Which metal has historically been the REAL threat to the financial fiat elite and continues to be looked upon as the supreme financial commodity throughout the centuries ?

Is silver just another side-show to help take the attention (and purchasing power in the way of fiat) away from gold in the same way some of us suspect the exchange traded (paper) gold funds are ?

Sometimes we just refuse to see things that are plainly in view right under our own noses, or to at least consider possibilities that things just might not always be as they appear.

"Tell a lie big enough and often enough, and it will eventually be accepted as the truth".

"Make a statement that can neither be proven nor disproven, and you will remain relatively safe in your assertions".

The only blind faith I care to stake my and my families future on is my faith in GOD. For anything else, I'd like to see a little more convincing reasoning than the same worn out drivel being preached about "silver shortages". When diminishing supply stories stopped working, we started seeing more and more COT figures, technical analysis, wild suppositions, and anything else that could coufuse the situation and make the case for silver "sound good". The only thing that doesn't seem to make silver sound good as an investment these days is a good old fashioned dose of REALITY.......the reality that silver remains cheap, and for a likely reason. Wishful thinking doesn't equal scarcity.


Black Blade (03/03/05; 00:43:08MT - usagold.com msg#: 129808)
Greenspan Says Current Budget Policy `Unsustainable'
http://www.bloomberg.com/apps/news?pid=email_us&refer=home&sid=aPSc48vjVuNk

Snippit:

March 2 (Bloomberg) -- Federal Reserve Chairman Alan Greenspan told Congress the record U.S. budget deficit is ``unsustainable'' and that spending cuts are needed before costs balloon for Social Security and other benefit programs. The U.S. may have made promises it can't keep to baby-boomers who are getting ready to retire starting in 2008 and any changes to government programs should be made ``sooner rather than later,'' Greenspan told the House Budget Committee. ``Our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken,'' the chairman said.


Black Blade: So after many years on the job Greenspan just figured this out on his own did he?




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