All times are U.S. Mountain Time
(Yesterday's Discussion.)
Topaz (06/05/03; 23:57:53MT - usagold.com msg#: 104205)
@ Comatose..."which" Dollar?
The one you're holding in your Hand, the one ekeing out a 1% return that you lent to the Treasury for 6 Mth's...or the one you just paid $1.19 for and will see in 20 odd Years. Just three examples of the many "Dollars" (Yen, Euro etc) that are increasingly being lured into the front end...Cash.
RBA's Governor McFarlane out today repeating the Mantra, Low or Lower IR's are here to stay...I think Mr Market is on the verge of proving him and all CB honcho's wrong.. Wrong..WRONG!
Black Blade (06/05/03; 23:47:56MT - usagold.com msg#: 104204)
Re: 21mabry – Energy Consolidation
That's a tough one. Oil companies (and now NatGas) had little choice but to pursue economies of scale. The US companies had to compete against large foreign majors like Shell, Royal Dutch, BP, etc. in an increasingly competitive market where world class discoveries were fewer and fewer. The last one being the Canterell Field, Mexico. There are no more "elephants" so now it is a matter of acquisitions and mergers. Now we have the combinations of Exxon-Mobil, Chevron-Texaco, BP-Amoco, etc. Recently Russia's two large oil companies merged to become number one in size. Whether that makes them stronger or not is debatable but it is more competitive and supposedly led to some cost savings.
Exploration and research had fallen due to the "boom-bust" cycle common in natural resource industries (commonly seen in mining as well). I have known many people who left the industry with each "bust" never to return to the industry. People have been burned in this regard and it leaves a bad taste in their mouths. For example, I have seen mining and petroleum professionals get good paying jobs, buy a home, set their families up in nice rural communities, etc. where the largest employer was petroleum, minerals, metals, lumber, etc. When the "bust" happened you had people whose life savings were tied up in their new homes and in company stock 401Ks, etc. and unable to sell their homes because everyone else was selling too. Those people won't come back to the industry. Many went into other careers never to return. Universities no longer graduate many natural resource professionals, and many of those that do graduate from US universities are foreign nationals. That's why there is a shortage of experienced professionals when they are truly needed. It's not a life for a family man for sure. That's not to say that companies have given up on exploration and research, but few are willing to go through all the aggravation. I happen to love the work (especially the solitary field exploration) but if I had a son or daughter who expressed an interest in pursuing such a career I would slap them silly and tell them to go into health care or some other career with a future.
Forget about any new oil refineries in the US. The environmental regulations and permitting is a nightmare and to get permitted is impossible anyway. In fact more and more refineries in the US are closing up due to high costs, environmental restrictions and liabilities. Most new refining is moving offshore and much of that is in the Caribbean.
You might want to read "The Prize" by Daniel Yergin (probably the best one). It is an excellent resource to study the history of the oil industry and discusses many of the issues you are interested in. A couple of other books are: "GeoDestinies" by Walter Youngquist, "Hubbert's Peak" by Kenneth Deffeyes, and "The Skeptical Environmentist" by Bjorn Lomberg (loaded with more references than you can shake a stick at). There are some others but these come to mind right off.
Cheers!
- Black Blade
mikal (06/05/03; 23:37:33MT - usagold.com msg#: 104203)
@Cometose
Correction-
...9-11 was just a dry run FOR some Fourth of July fireworks display?...
mikal (06/05/03; 23:32:20MT - usagold.com msg#: 104202)
@Cometose
A confidence crisis has been brewing for a long time. The Government, the bankers and the Fed are now up against a wall, so all their money spigots are nearly exhausted supporting banks, equities, loans and spending. And perceptions and "confidence" is managed by statistical sleight of hand, censorship, the diversions and isolation of tv and consumerism, and unresponsive, blackmailed "politicians".
They must define a crisis before the real crisis does them in. 9-11 was just a dry run some July 4th fireworks display?
Well, the DC PTB know they're running out of ammo for the markets, because foreigners and many Americans are now on to their schemes.
And the world economy needs a fix, the dollars are leaving here faster than ever and debt and derivatives are near the end of their leash.
So why not paint and fatten the old, tired stock market hog just in time for the Fourth of July roast and festivities? It IS a Federal Holiday after all, and we know how political culture substitutes for real culture in deciding our "celebrations". Besides, mortgages and other bubbles would make such a nice display going off all at once.
If you're in the stock market, or believe like most that it symbolizes America's greatness, good life and economy, you are politically correct believing when they tell you "accidents will happen". Isn't that what this "Homeland" thing is all about anyway?
Black Blade (06/05/03; 23:03:53MT - usagold.com msg#: 104201)
The last bad jobs report?
http://money.cnn.com/2003/06/05/news/economy/jobs_walkup/index.htm
May's job numbers will almost certainly be bad. Is improvement coming -- or more pain?
Snippit:
NEW YORK (CNN/Money) - You can pretty much bet Friday's employment report will be bad -- the only question is what comes next. Some economists hope the report will mark the end of the bad news for the nation's labor market, which is in its longest slump since World War II, while others worry there's more heartbreak to come. A vast majority of economists expect the Labor Department to say the unemployment rate rose to at least 6.1 percent in May -- the highest level since July 1994 -- and that employers cut tens of thousands of jobs.
1) Their worries are not unfounded -- most signs have been pointing to a weak report, including:
2) weekly jobless claims staying well above the 400,000 level, indicating labor market weakness
3) 83 percent of employers plan to cut jobs or hold payrolls steady in the second quarter, according to the latest Manpower Inc. survey of corporate hiring plans
the number of people who think jobs are hard to get rose in May while those thinking jobs easy to get fell, the Conference Board found in its latest consumer survey
employers in both the factory and service sectors kept cutting jobs in May, even as business conditions improved, purchasing manager surveys by the Institute for Supply Management (ISM) found
"I don't think we're back to a stable employment level; we're in for another decline, certainly in manufacturing employment," said Conference Board economist Ken Goldstein. "This should be the best month in the past three, but that's damning with faint praise, given how bad March and April were."
Before investors react to Friday's report, however, they may spend some time scratching their heads about it. The Labor Department is revising the numbers in its surveys of employers' payrolls. In addition to changing seasonal adjustments and updating benchmark figures, the department is shifting some job descriptions and moving some jobs from manufacturing into services in what it says is an effort to more accurately reflect the current economy. Economists, on average, expect employers cut 39,000 jobs outside the farm sector last month, according to a Reuters poll, down from 48,000 job cuts in April -- but prior data, going all the way back to 2001, are being revised, so comparisons to prior months might be difficult. Payrolls have lost 2.7 million jobs since March 2001, when most economists think a recession began. Excluding government workers, payrolls have been underwater for 22 straight months, the longest such stretch since 1944-46.
Black Blade: The unemployment picture is looking rather ugly and even the alternative index shows an unemployment rate of 9.8%. I reviewed the BLS data and still come up with about 11-12% rate (depending on how one calculates partial employment which is difficult not knowing the hours worked per employee, etc.). This does not even take into account the self employed who are not working or who are working less hours. If I get time this weekend I may dig up tomorrow's report and grind through the numbers, but with all the data revisions and changes in the statistical filters this could become more clouded. No matter how you slice it, the "Bone Pile" is growing faster and higher. There have been now 17 weeks over 400,000 first time jobless claims (that includes 2 upward revisions that took the count over the recessionary 400,000 level - a point conveniently ignored by the financial press) Still, no improvement is expected anytime soon. In a word – "grim".
Cometose (06/05/03; 22:50:02MT - usagold.com msg#: 104200)
dollar
I smell a confidence crisis brewing ........
upstaged by rampant buying of stocks and bonds.....
on the side show of center stage.
21mabry (06/05/03; 22:45:03MT - usagold.com msg#: 104199)
Consolidation
Black Blade, Could I please get your views on consolidation within the oil industry during the last twenty years.My dad worked for Gulf Oil for a number of years until cheveron bought them.Do you feel the industry is stronger or weaker? Has research and exploration been cut back with fewer big oil companies? I remember in my city we used to have 4 good sized refineries now we have 2 left and they always talk about closing the sunoco plant. Thnx your energy pupil 21
Topaz (06/05/03; 22:42:16MT - usagold.com msg#: 104198)
...and I thought 'ol Buck was off to the Moon!
http://customer1.barchart.com/custom/stocks/3040.htm
...still do!
HUGE Forex action to stem the rise last eve, a 92-94 Box, falling Dollar and higher Bond Yields...does not figure, expecting volatility to the upside...lets see!
Black Blade (06/05/03; 22:42:05MT - usagold.com msg#: 104197)
Treasury Yields Hit New Lows
http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=4&u=/nm/bs_nm/markets_bonds_dc&sid=95609877
Snippit:
NEW YORK (Reuters) - U.S. Treasury yields set record lows on Thursday as the European Central Bank's rate cut fueled prospects for the Federal Reserve to ease when it meets at the end of June. The latest round of economic data was supportive to bond prices, with weekly jobless claims rising more than expected and April factory orders posting their largest fall in 17 months. The yield on the benchmark 10-year note dropped to a low of 3.24 percent, its lowest level in 45 years.
(Now here's the kicker): Two-year yields remained near record lows at 1.20 percent, down one basis point and below the Fed's 1.25 percent funds rate, a strong signal investors expect a cut at the bank's next policy meeting later this month. "Twenty-five (basis points) would be an insurance cut. Fifty is much more insurance than needed given the perception that we will have strong growth in the second half," said 4CAST's Robinson. "I don't think the Fed has to do anything (in response to the ECB cut) except possibly validate what the market is discounting, which is a 25-basis point cut, although there are people who think if the employment report is weak, the Fed could cut by 50 basis points," he said.
Black Blade: I won't go into all the gory details as anyone who has read the DMR over the last couple of weeks would have that info. However, with nominal short-term rates bouncing around 1.2% and inflation (the official rate anyway) running about 3% - OK, lets be generous and say 2%, that would mean we have a negative "real" rate of return at –0.75% (actually it's much greater if we assume "real" rates of inflation whatever that may be). Aside from the obvious effect of driving a stake deep into the heart of the "gold carry trade" vampire, it also means investors would be rather foolish to invest in money market funds, bank savings accounts, and CDs. The opportunity cost of buying precious metals is practically nil while the upside potential is open. In fact a case could be made that you are being paid to borrow and buy any hard asset that will hold its own against inflation. This same type of situation occurred in the 1970's to early 1980's when gold made some impressive gains. Sure, interest rates were high, but inflation was even higher. We have even seen the same scenario a couple of times before and each time gold rallied in a precious metals Bull Market. So here we are once again and we are just getting started. So hang on for the ride.
21mabry (06/05/03; 22:33:24MT - usagold.com msg#: 104196)
BB
Blackblade, Tell the govenor the best thing he can do is read this forum..21
Black Blade (06/05/03; 22:20:39MT - usagold.com msg#: 104195)
Dollar's fall may not be over yet
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054416395288&p=1012571727085
Snippit:
Since February 2002, the greenback has lost more than a third of its value against the euro - which would have been enough to placate all but the fiercest dollar bears just a year ago. Goldman Sachs, HSBC and Deutsche Bank all think that $1.05-$1.18 against the euro is the "fair" or equilibrium value for the dollar. So with the euro now hovering around $1.18, it might be tempting to think that the dollar's decline will soon run out of steam. At the G8 summit, too, President Jacques Chirac hinted on Tuesday at concern over currency gyrations, saying stability was helpful to growth.
Financial history, however, suggests the dollar's downward journey may be far from over and the fact that it is thought to be nearing "fair value" is unlikely to break the currency's fall. This is partly because the gravitational pull exerted by fair value - which is notoriously hard to calculate anyway - is extremely weak. Instead a range of automatic destabilisers tend to ensure that exchange rates overshoot. Most banks' fair value figures are a combination of purchasing power parity calculations - the comparative values of a basket of goods in different economies - and relative movements in productivity.
Following a period of over-valuation in 1985 a large US current account deficit accelerated the fall in the dollar - which slid 54 per cent against the D-Mark by 1987. Now as then, however, it may also be several years before the depreciation of the dollar helps to narrow a current account deficit - which is set to reach $600bn this year. The vicious cycle of currency depreciation is also exacerbated by financial markets. In the long run the fall in the dollar should help attract foreign capital to fund the current account deficit - serving as a discount on US assets. In the short-term, however, it is a deterrent, since investors may be wary of ploughing funds into a falling asset.
Currency intervention by leading industrial countries marked the dollar's peak and trough in 1985 and 1987. The nadir of the euro was reached close to the level at which the G7 intervened to protect the currency in September 2000. Despite rumblings of discontent at the G8 conference, the dollar will need to fall significantly to provoke a further policy response. But some analysts think this moment may come sooner than many expect. "We are heading towards a dollar crisis as soon as this summer," says Mr Persaud. "If the dollar's fall gathers momentum to the point that interest rates start to rise, policy makers will be forced to act."
Black Blade: Some analysts now are looking for the dollar to fall to $1.30 – $1.35 against the Euro. I would think it quite likely and possibly even more than that. However, for the dollar to come back in line with the dollar index before 1997, the dollar should fall another 10% to 15% (remember the Euro did not exist at the time). The "Currency War" could force the dollar much lower as foreign interventionists are only delaying the fall to some extend while the pressures on dollar still continue to build. The current account, trade and budget deficits are in uncharted waters now setting new all time records daily and a ballooning national debt that exceeds $44 trillion (including both on budget and "off the books" debt). This is of course unsustainable and for a currency based solely on faith the outlook is rather grim. Therefore holding at least a small position of physical precious metals as "portfolio insurance" is almost mandatory. It's a small price to pay for peace of mind.
Dollar Bill (06/05/03; 22:11:05MT - usagold.com msg#: 104194)
"-"
Bond Trading Bears, are commenting below about present market.
As I watch this market, I get the feeling that something weird is going on. The action just doesn't feel 'right' or 'normal' to me. And I think what it is--is that the stock market and the bond market are both being driven, not by improving business, but by rising liquidity. A Fed-created tidal wave of liquidity is floating everything higher--housing, stocks, bond. It's a false rise, but it's happening, and in this business we don't deal with morality, we deal with reality."
I wonder how long this false "reality" of a constantly rising stock market will continue? Surely, the Fed can't pump this pig forever? Or can it?
have this Mega Bull in my office who is a buy and hold man all the way. We started talking about the State's Budget problems and he said this was bullish. Heres his reasoning. Many states have deficits and underfunded pension plans. So they will issue bonds and put this money into the pension fund and buy stocks with 60% of the money. This is Bullish
Market melt UP tommorow through end of july
don't think. just buy more stock. go long. don't short this bull train.
In the name of everything that is holy, can someone tell me what do they see in the charts that tells them to go short-term short? And please don't say valuation because we all know how much that matters in the ST.
And please don't say we're overbought because that is meaningless when we break out of a range. In fact it is akin to trying to catch the proverbial falling knife.
How can one look at the massive breadth, the tremendous liquidity, the buying in the face of all news good or bad, the sky-rocketing P/C ratios in the ETFs, the shallow pull-backs that last merely a couple of hours, how can one see all that and still call a top ?
Perhaps the Fed is funding a new bull market?
Black Blade (06/05/03; 21:57:20MT - usagold.com msg#: 104193)
Fed Easing Now Likely As 'Insurance' Policy, Greenspan All But Says
http://story.news.yahoo.com/news?tmpl=story&cid=1471&ncid=1203&e=3&u=/ibd/20030604/bs_ibd_ibd/200364feature
Snippit:
Federal Reserve Chairman Alan Greenspan hinted strongly Tuesday that the central bank will cut rates later this month as an insurance policy against deflation. At the same time, the Fed chairman said the economy stabilized in May and is poised to turn around. But he hedged his view on when or how strong. His remarks triggered sharp gains in bonds and drove the yield on the two-year Treasury note below the fed funds rate of 1.25%, a sign that markets expect a rate cut. Stocks scored modest gains. "The acceleration has not yet begun," Greenspan said, "even though, obviously, the marked moves of the stock market in recent weeks, and especially in the credit markets, are suggesting a fairly marked turnaround." Greenspan said deflation - a broad decline in prices that can erode corporate profits and lead to job cuts - is unlikely but may be a sufficient threat to warrant Fed steps to head it off.
Black Blade: The Fed Head is hedging his bets a little and today the rumor floated that the Fed may have an emergency conference cal and cut interest rates as early as tomorrow should the May unemployment rate look rather ugly. Personally I doubt that they will, but then it is a possibility.
On another note, I talked with a couple of Oklahoma NatGas execs today and they tell me that drilling programs may ramp up once they get a clear picture of how much support they can expect from Washington and the outcome of a couple of frivolous environmental lawsuits pending before the 9th Circuit Court of Appeals in San Francisco. The outcome there is a foregone conclusion, but will easily be overturned by the Supreme Court as these are issues already addressed by the high court before. However, drilling activity could really pick up this Fall but way too late to help out this winter. Next Tuesday I may have the DMR up just a little later than usual as a few others and myself will meet with Wyoming Governor Dave Freudenthal on some NatGas related issues. It appears that a lot of government officials in producing regions are taking in a crash course on energy ahead of this month's emergency NatGas meeting in Washington. I was among those contacted just this afternoon to meet with the Guv. I don't have any great expectations though as politicians are not exactly the most advanced bipedal hominids.
Dollar Bill (06/05/03; 21:32:46MT - usagold.com msg#: 104192)
*>*
Conclusions
We cannot ignore the Washington Agreement and its future successor any more. It is proving very successful! No doubt many of the Bullion Banks and Hedgers would have had many disasters had it not been in place. If these institutions don't take advantage of this "extra" supply to the market, they will face these disasters, because the "Official" supplies are dwindling rapidly this year and the 400 tonnes scheduled for next year are looking insufficient to hold the price down. If we are right, the maximum impact of next years supply of 400 tonnes, will, at best, simply keep the market orderly in its rise, just as the key Central Bankers want.
The next Central Bank Gold Agreement, will aim to reinforce the last one in its purpose, but not necessarily in its application. The next agreement can accommodate a lower, a higher, or the same level of sales as the present one, but it remains to be seen whether there will be willing sellers, in the face of the dubious stability of the $.
It may even be that this next Agreement accommodates a ‘new’ method of valuing Gold in the signatories "Official" Reserves at $ market prices, as a first step to the re-affirmation of gold's support role in the Monetary system. [More on that later]
Julian D. W. Phillips
Gold-Authentic Money
mikal (06/05/03; 21:09:12MT - usagold.com msg#: 104190)
State of the "Union"
http://www.etherzone.com/2003/henr060503.shtml
SPLURGE!!! SHOP 'TIL YOU DROP By: Ed Henry
Get out there and spend, spend, spend. It's good for the economy and there are all kinds of deals out there today. You can buy a new car without interest. Buy two or three. You can refurnish your house and not have to pay anything on the tab for months. Eat out every night, but buy new cookware and have the kitchen and dining room redone. Put in a fireplace and a pizza oven. Get all sorts of new appliances and have them counter sunk with hydraulic push-button lifts. If the house isn't big enough, get a bigger one.
Buy everything you want. Buy the largest plasma televisions, new computers, limousines, chauffeurs, cooks and maids, butlers, a yacht or two with crew, an airplane, helicopter, anything. And buy things you don't want, maybe the neighbors can use them.
Why not? The government does it.
You haven't heard anything lately about the credit cards the federal government passes out to each of its three million employees have you? The news on how they abuse these cards stimulating the economy in the categories above has disappeared, hasn't it?
Forget that. It's nothing.
The federal government just increased its own credit card by a trillion dollars ($984 billion) and there's hardly a peep about that either. They can backhand this sort of increase in no time with ease.
Yet, the federal government allowed its credit card to expire on February 20th of this year and went 92 days without taking any action whatsoever. And they won a war in-between.
Of course, Daddy Warbucks took whatever money he needed to buy a coalition of the willing, conduct the war and start rebuilding another nation, from the billions that had been scheduled for goods and services to his own people. And he put every state, city, and local government further into so much financial difficulty that they fired people, cut projects, raised taxes, and went into austerity programs of the desperate.
But nobody's complaining about this pure power play. Instead, they're sitting back and waiting for the flow of federal money to come back—maybe.
When Daddy Warbucks decided that he needed another $75 billion for the invasion of Iraq, he asked Congress for it and they decided instead to give him $80 billion, stacking in five for their own pet projects. Where did that money come from? They couldn't borrow it. The safety mechanism permitted by the Constitution for emergencies was in abeyance, unusable. Why?
Do you realize how much just one billion is? It's a thousand million.
If you had a time machine that charged you to go back in time and it cost one dollar a second, do you realize how far one billion dollars would take you. That's $60 dollars a minute and $3,600 an hour 24 hours a day or $86,400 a day.
One billion dollars would take you back to 1959.
If you paid a dollar a minute, the time machine would take you back to the days of Jesus Christ and the beginning of the Gregorian calendar.
If you stayed there and started setting aside $7 million a day, do you know when your descendants would be able to pay off our current national debt—2065—at seven million a day from the time of Christ.
Once the debt limit was raised, the federal government just borrowed $100 billion ($97.8 billion) more in the next four working days.
And what would happen to you if you splurged?
Take a lesson.
Congress just passed new bankruptcy laws that make it more difficult for individuals to declare bankruptcy, much less be allowed to keep their car and home.
If you ran up the sort of debt you are truly capable of running up, if you went on a spending spree that you couldn't afford, that you didn't have the income to support, that would truly be fiscally irresponsible—you would lose everything.
The powers that be would come and take everything away from you, leaving you destitute and having to start all over.
Doesn't that give you some sort of clue about what must be done???
How long are you going to put up with this sort of crap from the government?
We are already indentured slaves working for people that are supposed to be working for us. The average American works more months of the year to pay taxes than the surfs worked for the feudal lords. The surfs only worked about four months each year to raise crops for their government, the rest of the year the land was theirs. We work almost six months to pay our taxes and we rent our property.
And don't forget that the federal government also steals about $100 billion a year from your retirement payments, from Social Security. Add in another $50 billion stolen from Medicare and other entitlements where the money we pay is not supposed to be used elsewhere and you've got a criminal scam that is worse than anything done by Enron or all of the crooked private sector companies together.
Don't you think we need a regime change? And remember, no single raindrop feels responsible for the flood.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."
TownCrier (06/05/03; 21:02:18MT - usagold.com msg#: 104189)
Some key excerpts of today's ECB press conference
http://www.ecb.int/key/03/sp030605.htm
Excerpt of Introductory statement by Willem F. Duisenberg, President of the European Central Bank:
"Let me at this point comment on the debate about the hypothetical risk of deflation. As far as the euro area is concerned, it should be recalled that inflation has been hovering around 2% for quite some time and that there are currently no forecasts indicating any deflationary risks. The ECB's monetary policy aims at inflation of below but close to 2% over the medium term. ... Within a monetary union, deflation is not a meaningful concept when applied to individual regions."
Excerpts from Q & A session
SUBJECT -- EXCHANGE RATE
Question:
What do you expect from this rate cut? Do you want to dampen the euro...?
Duisenberg:
No. It is true that we have now made the interest rate differential between the dollar and the euro smaller. And that in itself subtracts, one could say, one impulse for the exchange rate movement we have witnessed in the last couple of months. But that is not the only factor. The main factor is that we think that this rate cut is compatible with our aim to preserve price stability over the medium term in a forward-looking way, and that is the main impulse for making this cut.
SUBJECT -- DEFLATION (or not!)
Question:
... my second question is related again to the IMF, which seems to be responsible for spreading a lot of pessimism. Of course, we keep hearing about this so-called deflationary threat. But today you have, out of hand, completely dismissed it – that there is a deflationary threat, that nobody has anything to worry about. Again, what does the IMF know which you don't know? Can you comment on this please?
Duisenberg:
I was already very clear when I said that what the IMF has done, that is, publish a staff paper on inflation differentials and deflation in the euro area, I must say I was almost astonished when I saw that. I have never seen the IMF publishing a paper on inflation differentials between California and New Hampshire or between Texas and Ohio.
Whereas there we are talking about one currency area which is even much smaller than the euro area. And so, that there are inflation differentials is nothing more than normal. There always will be between the various regions of a currency area.
But if I may quote myself, I said, "Within a monetary union" – which the euro area is and which the United States is – "deflation is not a meaningful concept when applied to individual regions", like New Hampshire or Germany.
Question: Mr. President, during your last meeting with Chairman Greenspan and other central bankers on Tuesday, Mr. Greenspan said – as far as I remember – that inflation in his view is not the biggest risk in the next months, if not in the next years. But he said that central bankers are quite ill prepared for deflation. Do you think that the ECB is well prepared for dealing with deflation and, if not, what should you do to be better prepared?
Duisenberg: We are convinced that we don't have to prepare ourselves for deflation because we don't see deflation coming. And that's what I have said, I think, loud and clear. Then, is the ECB prepared to deal with the "if" situation if it were to come? The answer is "yes". Many of us have experience with periods of deflation and we know what to do in that case.
Question:
Mr. Duisenberg, I respect your experience with deflation. But we are in a different world. We are in a globalised world now. Do you think that you can apply the experience of the 1930s with a completely different institutional framework to the situation we have today?
Duisenberg:
I'm not talking about the 30s. I'm talking about the 90s. I was ...
Question:
... where did you have serious deflation in the 90s?
Duisenberg:
In the Netherlands I had two consecutive years of deflation...
Question:
...can a small country like the Netherlands have deflation?
Duisenberg:
Well, we are always quoted as being an example for the rest of the world. So, ...
Question:
And maybe about deflation, once again. You can assure us that there is nothing in this rate cut today linked to the problem of deflation?
Duisenberg:
I assure you. There is nothing linked to the notion of deflation. It is only linked to, what in itself is, a very favourable outlook for price developments. It's so favourable that we can afford to lower interest rates without endangering our projection and goal of price stability, which is close to but below 2%.
SUBJECT -- CONFIDENCE and GETTING THE JOB DONE
Question:
Mr. Duisenberg, you said confidence would be enhanced if governments delivered what they promised to deliver. Now governments turn out to be rather helpless in implementing reforms. There is a lot of pressure in many countries. So, in the meantime, growth is declining and the ECB keeps lowering interest rates, always saying "we want to enhance confidence". Where does this process end? With the governments not doing anything, interest rates going down to zero and the whole euro area going bankrupt? I think you must be helpless too when you see what monetary policy is expected to do under these circumstances. Do you feel left alone?
Duisenberg:
Monetary policy is expected to be conducted in such a way that it primarily achieves price stability to prevail over the euro area as a whole. And that is what we promised the people that we will deliver. People can see that we do deliver. You might say that we have achieved price stability by now. And we promise to maintain it. I think that we are credible enough for people to believe that we will deliver what we promise to deliver. And now it is the turn of the governments to do the same thing.
... But then I always add that the aim of the Stability and Growth Pact is for one's budget to be in balance or even with a small surplus over the medium term. What you should not forget is that eight out of the twelve countries have already achieved that aim....
------(see url for full transcript)-------
Randy's note:
These few excerpts continue to make the distinction between "new" euroland and the "old" IMF/dollar candidates competing on the world stage, especially when you consider the Fed/press growing aggressiveness in trying to sell us all on the fear of deflation in a fiat economy. tsk tsk... Too big to contain with a cheap trick like that. Thus, sitting down, "We shall have the hyperinflation."
R.
21mabry (06/05/03; 20:11:03MT - usagold.com msg#: 104188)
(No Subject)
I was talking to a local bullion dealer today,he said he has been getting a few calls from dealers wanting to borrow silver for a month and offering to pay 20 cents an ounce to borrow it.He refused because he does not want to take the chance they wont be able to replace the metal.Why these dealers want to borrow the metal I dont know.The local guy here told me he is having trouble finding 100 ounce bars.
Goldilox (06/05/03; 19:41:28MT - usagold.com msg#: 104187)
No more "Official gold sales" without renewal of CB Gold Agreement
http://www.safehaven.com/Editorials/phillips/053003.htm
snippits:
"Indications from authoritative sources tell us that it is unlikely that no ?Official? gold sales, after September 2004, will take place unless the Washington or Central Bank Gold Agreement, is renewed!
The same sources have led us to believe that the Agreement will be renewed and at possibly a higher tonnage than before, around 500 tonnes, with the sole purpose of allowing the gold price to rise in an orderly manner, for even 500 tonnes will not keep the gold price down.
. . .All in all, a discouraging picture for Central Bankers, intending to sell gold. The only vocal prospect of gold sales comes from the President of the German Central Bank, Herr Welteke, feeling out public opinion, on the prospect of German Gold sales. After previously indicating that small sales of gold from German reserves were possible, he subsequently said that the Bundesbank would only sell Germany?s gold, provided it was able to invest the proceeds in income earning assets." [good luck -GL]
Goldilox:
This article by Julian Phillips at safehaven.com talks a lot about the Washington agreement and its ramifications. MK or BB might know more about his stature in the info circle. I don't.
Goldilox (06/05/03; 19:16:09MT - usagold.com msg#: 104186)
FBI: Watch out for terrorists in wigs
http://abcnews.go.com/sections/us/DailyNews/ITeamInsider.html#Iran
snippit:
? The FBI is raising the possibility that al Qaeda operatives may disguise themselves as women.
In the bureau's weekly intelligence bulletin to 18,000 law enforcement agencies around the country, it warns that during recent searches, women's wigs were discovered in an al Qaeda-associated safe house in Saudi Arabia, sources said.
According to the sources, the bulletin says the intelligence community is "concerned that male operatives may attempt to disguise themselves as females in order to gain access to U.S. facilities."
It warns that the loose clothing worn by Arab women could conceal weapons and explosives, and that a female disguise could make it easier for a terrorist to approach a security checkpoint in a vehicle.
It also says that terrorist could dress in drag to conduct surveillance on potential targets.
Goldilox:
Why does this make me wonder if Tommy Ridge and the boys have been slopping suds in one too many cross-dressing bars?
"Shake a memo . . ."
Goldilox (06/05/03; 19:07:47MT - usagold.com msg#: 104185)
US makes new plans for war on Pyongyang
http://www.smh.com.au/articles/2003/06/03/1054406190833.html
snippit;
The United States is said to be developing new plans for a war in North Korean that would bypass the demilitarised zone dividing the two Koreas and target the leadership in Pyongyang.
The plan is based on the success of US-led forces in Iraq in quickly reaching the capital, Baghdad.
US officials quoted by Reuters said the plan would involve the consolidation of the US and South Korean forces in two areas away from the demilitarised zone.
If war broke out, the forces would skirt the demilitarised zone and head for Pyongyang. "This is Kim Jong-il's worst nightmare," one official said.
It was estimated that the recently announced $US11 billion ($17 billion) upgrade of the capabilities of US forces in South Korea would give them the ability to "take down" North Korea's heavy presence on the border within an hour of war breaking out.
The report coincided with a visit to South Korea and Japan by the US Deputy Defence Secretary, Paul Wolfowitz.
Mr Wolfowitz, speaking in Tokyo after meeting Japan's Defence Minister, Shigeru Ishiba, would not be drawn on the reported plans.
"We don't discuss military plans for good operational reasons," he said.
But he said the US wanted to update its "force posture" so it could counter a North Korean attack "more quickly and more effectively".
In South Korea on Monday Mr Wolfowitz warned of a "devastatingly effective" response against any North Korean military aggression.
The US has 37,000 troops in South Korea, including 15,000 members of the Second Infantry Division deployed near the demilitarised zone. But it appears likely they will be moved as part of a realignment of US forces in the country.
misetich (06/05/03; 19:04:44MT - usagold.com msg#: 104184)
Household Borrowing Grew in First Quarter
http://www.washingtonpost.com/wp-dyn/articles/A18965-2003Jun5.html
Snip:
U.S. households' borrowing slowed in the first quarter of 2003, but was still strong enough to drag overall net worth slightly lower, the Federal Reserve said in a report on Thursday.
In its quarterly "flow of funds" report, the central bank said household debt grew at a seasonally adjusted 10.0 percent annual pace in the first quarter, down slightly from a 10.9 percent rate in the last three months of 2002.
Overall U.S. non-financial debt rose at 6.5 percent annual clip in the quarter, a slowdown from the revised 8.0 percent rate seen in the previous three months.
U.S. household borrowing was focused on mortgage and home equity loans.
...........
Misetich
Wonder what will happen if the housing bubble bursts?
All On Board The Gold Bull Express
Goldilox (06/05/03; 18:57:35MT - usagold.com msg#: 104183)
FED chief vows decisive action on deflation
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054416391950&p=1012571727088
snippit:
The markets drove long-term interest rates sharply lower on Tuesday after Alan Greenspan, chairman of the US Federal Reserve, said the central bank would act decisively to head off the risk of deflation.
var html = getInAdHTML("box",FTSite,FTSection,FTPage,FTIndustry); document.write(html);
Speaking by satellite to a conference of central bankers in Berlin, Mr Greenspan said the US economy had stabilised in recent weeks, though it had yet to show clear signs of acceleration. But though he also continued to warn that the risk of a vicious circle of "corrosive deflation" was low, the markets seized his comments about the need to establish a "firebreak" to prevent it taking hold.
Two-year US interest rates fell to a record low of 1.19 per cent, dropping below the current short-term policy interest rate of 1.25 per cent. Expectations of interest rate cuts soon rose sharply, with markets pricing in a chance of more than 80 per cent that the Fed will cut rates by a quarter-point at its next meeting on June 24-25.
Mr Greenspan's guarded assessment was underlined by a welcome for the short-term boost from last month's $350bn tax-cut package, due to come into effect next month. "I have to admit that, fortuitously, this particular cut in taxes is happening at the right time, although I doubt very much one could have planned that in advance," he said.
The statement contrasted with remarks Mr Greenspan made earlier in the year, when he said it was not clear that the US economy needed the stimulus from a tax cut.
Goldilox:
Damn, this guy changes direction faster than a puck off of Giggy's glove. Go Ducks! Too bad there seems to be no reasonable "advance planning" in his world.
misetich (06/05/03; 18:55:52MT - usagold.com msg#: 104182)
April Factory Orders Plunge
http://www.washingtonpost.com/wp-dyn/articles/A18508-2003Jun5.html
Snip:
WASHINGTON (Reuters) - New orders for U.S. factory goods posted their largest drop in 17 months in April, the government said on Thursday in a report showing declines in many sectors and painting a far worse than expected picture of manufacturing.
Orders sank 2.9 percent in April, the biggest fall since November 2001, the Commerce Department said, after rising 2.1 percent in March. Analysts were expecting a drop of just 1.5 percent.
The report showed sharp falls in demand for machinery, transportation and electrical equipment.
Orders for computers and electronic products rose a modest 0.3 percent, but that followed a much faster 2.4 percent increase the previous month.
********
Misetich
Them boys and girls keep on inflating the stock markets ala 1995 to 2000 - continuing on ignoring reality - They'll be disappointed
All On Board The Gold Bull Express
Goldilox (06/05/03; 18:51:54MT - usagold.com msg#: 104181)
Mexican Political Row Threatens Foreign Banks
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054416419799&p=1012571727176
snippit:
A constitutional dispute between Mexico's executive and legislative branches over the fall-out from the $65bn bank bail-out in 1995 could have sweeping consequences for the international banks that control almost 90 per cent of the sector in Mexico.
The country's auditor-general, appointed by Congress, says Bitigroup's Mexican subsidiary, should be required to repay 6.5bn pesos (about $650m) it received in the bail-out, on the basis that this money backed loans that were fraudulent.
All three main parties in Congress, including that of President Vicente Fox, say a further audit of banks is necessary and that banks should not be covered for fraudulent loans.
Goldilox:
Is this a Latin American government telling the Int'l banks to go pound sand, a la Newmonts hedge buyout? Next we'll have Argentina issuing a gold peso and thumbing its nose north, as well.
Goldilox (06/05/03; 18:46:05MT - usagold.com msg#: 104180)
IMF and Japan
http://www.channelnewsasia.com/stories/economicnews/view/41455/1/.html
oops, I did it again. Here's the link.
Goldilox (06/05/03; 18:44:21MT - usagold.com msg#: 104179)
IMF on Japan
snippit:
"Japan needs to take radical policy steps to stem deflation, including purchases of foreign assets by the Bank of Japan (BoJ) and setting a medium-term inflation target, says a senior IMF official.
"A bold and comprehensive policy package is needed to enable the economy to escape from its present deflationary trap," International Monetary Fund Deputy Managing Director Anne Krueger said.
"We recommended that the Bank of Japan consider buying foreign assets as well as domestic assets," the IMF's number two told a press conference at the end of two days of annual meetings with Japanese officials in Tokyo.
She said the measures could also include the broadening and acceleration of financial sector reforms to clear up non-performing loans and corporate restructuring.
Goldilox:
After crippling every second tier economy they have ever meddled with, the IMF now wants to "fix" Japan with their "Bernanke ointment".
Goldendome (06/05/03; 18:05:19MT - usagold.com msg#: 104178)
(No Subject)
Just finished reading Jon Warner'rs "Market Report" here on USA Centennial Gold, and that answered my first question. It was new orders for U.S. Factory Goods that dropped 2.9% in April, taking all experts by surprise. Also, some alarming continuing bad news about employment or unemployment depending how we look at it contained in the same report. Thanks, Jon, for the good, continuing Daily Market Updates.-----Gdome
CoBra(too) (06/05/03; 17:47:08MT - usagold.com msg#: 104177)
@ Goldilox
'twas never confirmed at other sites.
Let's agree it's the PTB ... Ha, or me? cb2
Goldendome (06/05/03; 17:43:50MT - usagold.com msg#: 104176)
(No Subject)
Does anyone remember hearing about a big drop reported today of over 2% in one of the governments production components? Not sure which one, but it took all the forcasters by surprise. Also, the number two electronics retailer (not Best Buy, they're number one) but the other one said either profits or sales (not sure which) dropped over 10% in the first quarter. Wish I could be more precise, but I was busy as Smokey Bear in a fire at the time that I was trying to listen to that news. Anyone with more precise information.....I'd be grateful.---Gdome
Go, Mighty Ducks.
TownCrier (06/05/03; 16:54:23MT - usagold.com msg#: 104175)
Latest weekly growth in U.S. money supply
http://biz.yahoo.com/rf/030605/economy_fed_moneysupply_table_1.html
For the latest reporting week of May 26th, the Federal Reserve indicated the following.
M-1 was up $6.3 billion to $1,267.5 billion
M-2 was up $6.4 billion to $6,019.3 billion
M-3 was up $13.4 billion to $8,705.4 billion
Over the past five weekly reporting periods M-1 has grown by $26 billion, M-2 has grown by $109 billion, and M-3 had grown by $113 billion.
We've stressed it before. You can try to keep treading water in the swelling paper ocean -- tossed about upon the waves of international government action and reaction, or you can stand at ease upon an island of gold. With an easy phonecall to Centennial you can join thousands in letting gold be the solid bedrock of your financial well-being.
R.
TownCrier (06/05/03; 16:41:21MT - usagold.com msg#: 104174)
Fed adds $7 billion to banking system today
The Fed intervened in the open market today, adding $5 billion through 28-day repurchase agreements and $2 billion through overnights. Fed funds were trading in line with the current FOMC target of 1.25%.
R.
Goldilox (06/05/03; 16:35:36MT - usagold.com msg#: 104173)
Gold Chart
@ Cobra(too):
Closer analysis looks like the specialist was selling Gold briskly at 369, but interrupted it for two quick deals at 361 and 362. I wonder who got those prices?
Goldilox (06/05/03; 16:32:04MT - usagold.com msg#: 104172)
Spot and Spike poster
TC:
I agree with WR. That is a nice poster of Gandy's boys.
Any interest from the forum in copies of the Spot and Spike poster? Might be a cool item to add to the CPM catalog.
CoBra(too) (06/05/03; 16:30:43MT - usagold.com msg#: 104171)
Gold Chart
Click on the intraday chart in the lower left hand corner - the l.t. chart is still perfect, or should i say promising a great future in gold ... cb2
Goldilox (06/05/03; 16:28:23MT - usagold.com msg#: 104170)
PruBear post
http://www.prudentbear.com/midweekanalysis.asp
sorry, I forgot the link to Mr. Hudson's Mid-wwek Analysis.
CoBra(too) (06/05/03; 16:27:06MT - usagold.com msg#: 104169)
Just Wondering ...
http://focus.comdirect.co.uk/en/detail/_pages/quotes/main.html?sSymbol=GLD.FX1&sRange=3
Who's messing up the formerly trustworthy comdirect gold chart?
This nonsense was going on for more than a week! - Or maybe i'm acquiring some dose of persecution mania ... cb2
PS: Seems Wim's rate cut didn't really cut the expectations of Allan - too bad!
Waverider (06/05/03; 16:26:03MT - usagold.com msg#: 104168)
The Afternoon Gold Report...
http://www.usagold.com/DailyQuotes.html
Snip:
"Gold rallied defying the bears calls for a price drop on a European Central Bank rate cut. Instead the Euro rallied sending the U.S. dollar spiraling down sharply. This gave gold a nice push to the upside as automatic stop-loss buy orders kicked in propelling gold higher in the early going. Profit taking appeared at the $370 level to cap the rally. Gold should continue to make steady gains though Fund and Bank activity will create a lot of volatility along the way. I would not be surprised to see gold make an assault on the $400 an ounce level and possibly well beyond by year-end."
Waverider: Randy - nice poster of Spot 'n Spike ;o)
Goldilox (06/05/03; 16:25:59MT - usagold.com msg#: 104167)
Prubear Mid-week Analysis
Consumer activity appears quite confusing. On one-hand consumers are buying houses at a record rate, yet furniture sales are stagnant Recreation vehicle sales are soaring, yet Harley-Davidson reported a decline in US sales for the first time in almost ten years last quarter.
?The sharp increase in job cuts last month should server as a warning that it is premature to conclude that the quick end to the war with Iraq will bring a quick turnaround in the economy and job market?With the strength of the economy still in doubt, it is unlikely that companies will be in a hurry to undertake expansion and job creation.? Even after the March report that showed layoff announcements declined 38%, Challenger was muted, ?Corporate America is stuck in limbo?The one thing we do not expect is significant job creation.? It looks like there is a possibility that the employment report released this Friday will show that there was actually job growth in May. Of course those jobs might all be mortgage brokers.
The Mortgage Bankers Association application index launched to new highs. The purchase index jumped 16% to 460.5, eclipsing the previous record by over 10%. The refinance index soared 13%, also reaching record territory.
The market continues to rally and is starting to be reminiscent of the ?good ol? days.? After a slight pull back in the middle of May, stocks have roared higher with the Dow Jones Industrial Average closing above 9,000 for the first time since August 2002. The last time it crossed 9,000 it was just for a day. Will history repeat itself? We will find out tomorrow. Right now there is not a lot of market action that is encouraging for short sellers. Not only have heavily shorted stocks continued to outperform the rest of the market, but companies continue to be able to raise money. Last week, Ask Jeeves raised $100 million in a convertible deal. This is the same company that has had its stock price plummet from $190 to $0.75, and has since had a very impressive rebound. This year the stock has rallied over 1,000%. Additionally, companies are back on the acquisition bandwagon. PeopleSoft announced it is buying JD Edwards for $1.7 billion. And Palm is buying Handspring in a much smaller deal. I?m also hearing from a lot of trading desks that investors didn?t believe in the rally when it started and are now having to jump in. Maybe that signals that the rally is almost over.
Goldilox:
Let's see, housing is up, but furniture is down. Stocks have stretchmarks like a new mother of triplets. New mortgages are at an all-time high, but no one is expecting any new hiring. And most telling of all, HD is experiencing its first sales decline in ten years. When the weekend biker/posers can't afford to trade in their 2-year-old, 2000 mile HOG, times are really tough! BMW sales are up 5%, so either Jim Rogers adventures are influencing bikers, or the spendable money is chasing value over image.
Goldilox (06/05/03; 15:58:46MT - usagold.com msg#: 104166)
Wary of missing rally, stock buyers ignore scandals - Reuters
story:
By Deepa Babington and Haitham Haddadin
NEW YORK, June 5 (Reuters) - A year ago, word of a government probe or accounting irregularity in the shell-shocked post-Enron world was enough to send stocks careening and investors running for cover.
In the past week, investors weathered a barrage of ugly news of probes and indictments involving big names like International Business Machines Corp. (IBM,Trade), Schering-Plough Corp. (SGP,Trade), Martha Stewart Living Omnimedia Inc. (MSO,Trade) and Xerox Corp. (XRX,Trade).
The market shrugged. On Wednesday, the blue-chip Dow Jones industrial average ((.DJI)) closed above 9,000 for the first time since Aug. 22, 2002.
Why the apathy? Analysts cite a shift in investors' mood since the Iraq war came to a swift end and a swelling appetite for risk, given the market's bullish run in recent months.
Afraid of missing the rally after a long drought and spurred by optimism about a U.S. economic recovery, institutional investors are willing to look beyond individual distress stories and buy a piece of the market while it is going up, analysts said. The Fed's determination to keep interest rates low and President Bush's tax-cut plan haven't hurt, either.
"The individual stories now have less significance than the 'bigger picture' story, which is that investors have few alternatives for cash," said Joe Battipaglia, chief investment officer for brokerage and research firm Ryan, Beck & Co. "They've played the bond market as best they can play it, they've played real estate as best they can play it, and all of a sudden, stocks look like the attractive asset class."
Since hitting their 2003 lows on March 11, the Dow has risen 20 percent, the broad Standard & Poor's 500 ((.SPX)) has advanced 24 percent, and the tech-laden Nasdaq Composite ((.IXIC)) has soared 30 percent.
"We're seeing the first sustained bull market since the bear market ended and it's beginning to feed on itself," said Russ Koesterich, U.S. equity strategist at State Street Corp. "This risk-seeking atmosphere we're in is superseding all of the other potential issues."
Goldilox:
This was cut from my online brokerage site. Even stock salesma can find no reason to rally beyond "riding the wave". Looks like we're playing a game of "Bubble, bubble, who's got the bubble?" The constant FED cash infusion is causing "pimples" of false prosperity to "pop" all over the place, and the sheeple are scurrying to get in and out with profitable timing. . . sort of an economic Easter egg hunt.
Belgian (06/05/03; 15:14:48MT - usagold.com msg#: 104165)
Gresham's vertigo....
The main difference between the recent shows of Alan and Wim
is that both seemed to represent the *status* of their reciproke currency ($-€). Both, eminence grise, had a different body language and voice intonation. The self confident challenger (€) and the hesitant challenged ($).
Indeed Sir, your (FOA's) bear story all over, confirmed by Wim in Q & A. Euro rate always more attractive than dollar rate. Anddddddd euro M-3 up 8%, without any fear, but out of demand necessity !!! Sure, we want to see, black on white, evidence for the euro's Gold connection...
Can you see that naughty Biiiiiiggg smile on my seasoned face ? Duisenberg lowered the IR with 1/2% against his will, because too many parties wanted him to do so. But he was NOT going to support the dollar ! Just think "WHY" a central banker can remain so selfconfident about the stability of his currency, while he is expected to do something he didn't want to !!! What is behind this euro-monetary self-confidence ? A project ? A GOLD PROJECT ???
And the knowledge that the dollar-standard had its time and is in the process of being replaced.
I've not been listening, highly concentrated with all my senses to Alan and Wim, but to the twisted messeges that the financial media were carrying for their financial masters. The dollar feels VERY "un-easy" ! And not so for pure economical reasons. The dollar-block knows that the two competing currencies (and Gold) are NOT struggling on an economic front but on a monetary front !
Hugh Hendry was CNBC's guest again...and again he was stormed with Gold-Questions ! A paper-man, earning his living in the financial arena, who is allowed to state bluntly that the dollar-fiat is printing itself completely out of fashion !!!
100% Certainty, that Alan will lower rates, again, in june !
The bear will catch the dollar and the Gold euro will fly !
The euro runs with golden shoes ( ECB-Adidas, not FED- Nike's).
In a recent intervieuw, Stiglitz was emphazing on the US as the only holder of a veto right ! The ECB will turn away from the IMF...sooner, rather than later ! Let the euro gain more dept, with "p", not "b". Smile Sir...we must be coming closer and closer...and closer !?
Watch how Bush/Blair are getting discretely surrounded with negatives...! On Monday, the UK will officially postpone any referendum on EMU participation. Wim wasn't impressed (moved) at all when questioned about it !
FOA's scenario is still on track and please, don't blame him (them) for NOT being able to provide the exact dates on a Golden platter ! I know you don't, Sir Gresham !
USAGOLD / Centennial Precious Metals, Inc. (06/05/03; 14:41:46MT - usagold.com msg#: 104164)
The right mix of work and play! Join us.
http://www.usagold.com/cpmforum/tools/guideandsignup.html
Black Blade (06/05/03; 14:09:38MT - usagold.com msg#: 104163)
"The Barbarous Relic Files" - U.S. agents throw wrench into golden screw scheme
http://biz.yahoo.com/rm/030605/odd_gold_2.html
Snippit:
NEW YORK, June 5 (Reuters) - U.S. authorities said on Thursday they threw the wrench into South American drug lords' newest money laundering scheme in which narcotics proceeds were exchanged for gold disguised as tools and screws and smuggled into Colombia. Federal prosecutors said that 11 people working in Manhattan's diamond district were arrested on Wednesday in a sting operation in which they accepted more than $1 million in cash represented as drug money in exchange for 220 pounds (100 kg) of gold. The smelted metal was molded and painted to look like common items that could get past customs inspectors. Among items recovered by federal authorities in New York was a working solid gold wrench, which was painted red and gray, worth about $10,000. Other items included pellets inside bottles of shampoo, light switch plates and even a fashionable belt, made up of thin gold bars, that had been painted silver.
Black Blade: These guys went through a lot of trouble over a mere "barbarous relic". I guess its a bit difficult to mold some "precious" stock certificates. Hmmm…
Gonlyold (06/05/03; 13:14:41MT - usagold.com msg#: 104162)
More on teh Gold
http://www.alertnet.org/thenews/newsdesk/L26251535.htm
Here's the link. Now it's 999 bars. When I saw the news clip on TV, the gold bars did not look like the polished, mint bars you would expect from a refinery or assay office. They were crude in appearance and some looked like they had voids in the castings.
7nomads (06/05/03; 12:46:19MT - usagold.com msg#: 104161)
Re: Yandal hedge drama - it's not over yet
It's hard to say anything without the numbers, but I remember seeing real estate promotions offering foreclosed properties at a steal because when a property is foreclosed on all leases on the property are considered void.
Might this be the case for the Yandal property(ies)? Maybe,its Newmount that is trying to hang on to a 3 million oz reserve that may double in value over the next few years.
Or perhaps, one bank has wised up and is looking to hold physical (even under ground reserves) rather than the paper options they now hold.
Gonlyold (06/05/03; 12:43:00MT - usagold.com msg#: 104160)
US Finds More Gold in Iraq
Just heard on CNN..
The US military found another truck carrying 1100 (1300?) bars of gold trying to leave Iraq. This is the second such find. Stay tuned for further info.
Gold, it's out there!
21mabry (06/05/03; 10:37:38MT - usagold.com msg#: 104159)
Shipping costs
Just another thought on the overnight shipping buisness,if you use these services alot at your place of employment or your own buisness now might be the time to lock in some long term contracts with them. It looks like you will be barganing from a position of strength. I know some people on the forum own their own buisness and times are tough. Just some money saving shipping advice.If you can use 2 day or economy service use it dont use priority unless you need to.Fill out your shipping airbills completly if you dont the courier automaticaly assumes you need priority shipping. Ask your customers if they will accept afternoon delivery instead of morning you will save money. Make sure you have correct delivery info these companies charge extra for wrong addresses and rerouting packages. Now I am off to check the paper markets.21
Pizz (06/05/03; 10:28:36MT - usagold.com msg#: 104158)
Mr. Gresham
The real estate liquidation race? I'm a few hundred yards behind you with the same thoughts and fears.
My goal was to try to liquidate just after this bottom in rates. Buyers will panic if rates start to uptick and I hope to hit that window (assuming my wife's paint brush, the carpet and linoleum contractors, etc. are all on the same schedule). Trying to mico manage a move via a spouse and cell phone is something I hope to have to do only once. . .
Here's hoping the FED is our friend for a few more weeks, and since I am nearly always early in my investment decisions. . . . .
---------------------------
Spooky thing is the reaction to the Euro rate cut. Not quite what I was expecting, but when was the last real good currency war?
---------------------------
Unemployment numbers are no surprise, and they're just starting. I'll be taking the ax to excess and marginal personnel in the September/October period. We don't have to announce as do the auto manufacturers, but both auto's and housing should have a pretty ruff winter. Lean and mean thru the winter, and create a sweat shop of sorts next spring and summer to take advantage of some pent up demand and the election cycle. This means very few if any new hires as we pick up a bit next year, and then head for the bottom after the 2004 elections.
That's our company plan right now, subject to change as usual, but many executives, bankers, etc. that I talk to are of the same opinion.
---------------------------------
Move to the sticks about 80% done (sell the homestead only thing left). Lost high speed internet and am back to modem . . . .here hoping I personally decompress enough to not notice the difference in a couple months.
---------------------------------
Deflation is still not an option, but he will pop his ugly head up now and again, but not in PM's. . . .
Pizz
21mabry (06/05/03; 10:16:36MT - usagold.com msg#: 104157)
Layoffs
The other day goldilox reported about fedex laying off 14,000 people.In my humble opinion this layoff showed me just how week this economy is.I am very familiar with the company as at one time I was one of those crazy fedex couriers who run in and out of your office. Fedex is a company that prided its self on never having laid anyone off in the history of the company 30 some years. When I was there we almost had to much buisness if there is such a thing we worked as many hours as we wanted.Being laid off from fedex never crossed anyones mind. Companies like ups and fedex have become such integral part of some buisnesses that you were viewed almost as part of the companies work force. Before fedex aquired rps ground deliveries they were doing about 3,000,000 air delivery packages a day. I would be interested to know what the air division is doing now.I can assure you there were some people in shock when those layoffs were annouced. Watch UPS now they are the big boy in the industry if they layoff people its real bad.
Magister Aurelius (06/05/03; 10:00:49MT - usagold.com msg#: 104155)
thanks mikal!
Thanks! The Kitco chart I was looking at was just too imprecise.
mikal (06/05/03; 09:38:07MT - usagold.com msg#: 104154)
@Magister Aurelius
http://www.gold-eagle.com/intra-daykit.html
Silver is trading as this chart shows with it's tight compression around 4.48 U.S.$, alongside three other metals.
mikal (06/05/03; 09:30:20MT - usagold.com msg#: 104153)
Correction
"dow" should read "down".
mikal (06/05/03; 09:28:32MT - usagold.com msg#: 104152)
"Market Action"
I see U.S. equities are dow a bit today, and the J. Sinclair post is meant for YESTERDAYS market action. But still relevant to today's action.
mikal (06/05/03; 09:23:48MT - usagold.com msg#: 104151)
Market action
"Persistant U.S. dollar weakness in the face of general equity strength which produces U.S.$ demand means persistant large dollar selling." -James Sinclair, June 4, 2003
Magister Aurelius (06/05/03; 09:15:44MT - usagold.com msg#: 104150)
Weird....
Has anyone noticed that while gold is very active, the spot chart for silver has not moved a single tic today? It's only a Thursday so the market shouldn't be closed for a holiday. Is the market closed or is this just an amazing example of manipulation going on? Or was the spot silver market closed for reasons the Cartels don't want out there?
Gandalf the White (06/05/03; 09:00:27MT - usagold.com msg#: 104149)
YES, Mr. G !!! SPIKE hit his head on $370. AGAIN !!
Please SPIKE, wait for SPOT to catch up with you !
THEN you BOTH can jump through $370.
JUMP SPOT, JUMP !!
<;-)
Mr Gresham (6/5/03; 07:50:17MT - usagold.com msg#: 104148)
Vertigo
http://quotes.ino.com/chart/?s=NYBOT_DXY0
Yikes! Spike wakes up, looks out his doghouse door, sees waterfall across the street, gets dizzy feeling. Well, that's enough coffee for you, Bud; back to bed.
BTW, being 2/3 of the way through my real estate extraction process(es), and counting on IRs holding long enough to cover my exit, and the final deal going smoothly so far, me -- Mr Worrier -- has just lately been wondering if the system trainwreck would come along just before to keep me from getting that liquidity I want. Not today, Boyz! Pleeeezzzzzz...
ECB is reminding me of that story (was it from FOA?) about the two hikers and the bear. Euro still has to only outrun the Dollar. It'll never be a "hard" currency in times like these, so maybe that explains Spike?. Europeans are told "Don't count on us for your savings."
But I'd still like to see confirmation that it's no longer the Keynesians in charge over there. We still haven't seen parallel affirmation of FOA's ideas about Euro's connection to gold, have we?
Now, down to read Belgian & all.
WAC (Wide Awake Club) (6/5/03; 07:41:04MT - usagold.com msg#: 104147)
Saudi scraps $15 billion Exxon gas deal
http://uk.news.yahoo.com/030605/80/e1mqx.html
DUBAI (Reuters) - Saudi Arabia has killed off a chance for an Exxon Mobil (NYSE: XOM - news) -led consortium to gain entry into its vast gas fields -- declaring a $15 billion investment project null and void effective June 15.
The kingdom's oil minister Ali al-Naimi on Thursday made good on his threat to develop the country's gas reserves without the world's top oil multinationals if they failed to accept Riyadh's commercial terms by June 4.
"Saudi Arabia has cancelled the Exxon-led deal for South Ghawar effective June 15," a Saudi industry source told Reuters. Other potential investors are Royal Dutch/Shell and ConocoPhillips (NYSE: COP - news) .
TownCrier (6/5/03; 07:11:03MT - usagold.com msg#: 104146)
James Puplava takes a look at "The Catalyst" in his latest in the 'Storm Watch' series
http://www.usagold.com/gildedopinion/puplava/20030529.html
Read it here (click url above).
Excerpts:
It has always been my contention that an investor needs to make only a few key decisions in a lifetime to do well at investing. If you can find a new investment theme before others have discovered it and then ride that trend until it plays itself out, you have the key to great wealth.
The problem with finding these investment themes is that they only become obvious long after they have developed. When the new investment idea is clear to everyone, it is usually entering its final stages. This is when the media and the general public catch the wave. At this point money floods into the sector and carries prices to the extreme.
...The simple reason markets are moving today is because central bankers, especially the Fed, are creating vast quantities of credit. This huge ocean of money is looking for a home. Presently that home is paper assets of one form or another because it is the only market large enough to accommodate it. Central bankers may be able to manufacture credit, but they can't always control where it flows.
Right now that credit is flowing back into the financial markets, especially the bond and stock markets. This is pushing valuations to absurd levels both in the stock market and in the bond market where interest rates on the ten-year note hit a 45-year low last week at 3.31%. Unlike the stock mania of the late 1990s, today's mania is even more extreme, since there is a greater degree of credit that is helping to fuel it. The result of this infusion of credit is that instead of just one mania in stocks, we now have multiple manias in stocks, bonds and in real estate.
...We are now at a perilous juncture in the financial markets. The Fed's attempt to revitalize the economy and markets through interest rate cuts have failed. Fed policy options are now approaching the end of the line. It is taking stronger and stronger measures to achieve the desired result. The Fed is between a rock and a hard place. If it continues on its present course, it risks creating rampant inflation leading to an international flight out of the dollar, which could then lead to economic and financial disintegration. If it chooses to accelerate monetary expansion, it could in effect shatter the whole monetary system based on the dollar standard. On the other hand, if it refuses to accelerate credit creation, the consequences would lead to a severe depression. I believe this is the Fed's greatest nightmare -- the looming ghost of another Great Depression. For these reasons it is pumping money furiously, monetizing debt and intervening through back channels in the stock market. The Fed is pumping money into the banking system, which in turn is financing the government deficit. And the government is also doing its part by spending feverishly and thereby creating deficits. Jointly, they hope to delay another depression.
...We have now arrived at a new paradigm -- a new catalyst -- that will drive money out of paper into hard assets because of a flight out of the dollar. You can see this trend in the graphs below, which show the dollar, interest rates and gold. While the smart money exits the dollar and heads into gold and silver, the herd is still chasing the last bull market in paper....
----(see url above for full article and charts)----
Call Centennial today to diversify your portfolio with gold and make what could perhaps be that one "key decision of a lifetime" as mentioned here by Mr. Puplava.
R.
TownCrier (6/5/03; 06:57:42MT - usagold.com msg#: 104145)
Meanwhile out in the field somewhere...
Mother Nature held no similar policy committee meeting, but when reached for comment declared that the earth would continue its firm grip on a tight gold policy.
Assessing it all, market players promptly drove gold higher on the combined news, appreciating the contrast it offered against national and commercial paper.
R.
Sundeck (6/5/03; 06:46:11MT - usagold.com msg#: 104144)
Come back Spike!
Now that's a nice dog Spike - slow down or you'll scorch your pads...
TownCrier (6/5/03; 06:45:18MT - usagold.com msg#: 104143)
Meanwhile across the English Channel...
Perhaps too busy eating Sir George's farewell cake to do any heavy lifting, the MPC of the BoE today decided to abstain from any change to its own rates. Cake or no cake, this decision is precisely as it has done since the last unexpected rate cut of 25 basis points February 6th brought the repo rate to 3.75%.
R.
TownCrier (6/5/03; 06:08:15MT - usagold.com msg#: 104142)
ECB lowers rates across the board by 50 basis points
http://www.ecb.int/press/03/pr030605en.htm
5 June 2003 -- ECB PRESS RELEASE
Monetary policy decisions
At today's meeting the Governing Council of the ECB took the following monetary policy decisions:
1. The minimum bid rate on the main refinancing operations will be reduced by 0.50 percentage point to 2.00%, starting from the operation to be settled on 9 June 2003.
2. The interest rate on the marginal lending facility will be reduced by 0.50 percentage point to 3.00%, with effect from 6 June 2003.
3. The interest rate on the deposit facility will be reduced by 0.50 percentage point to 1.00%, with effect from 6 June 2003
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. today.
------(see url)--------
Randy's notes:
Item #1(the ECB's min bid on main refi ops) now at 2% is the rate that compares against the U.S. Federal Reserve's FOMC fed funds target rate of 1.25%. Will we now see the Fed lower its own rates when it next meets June 24/25th? Probably, with the next regularly scheduled meeting not occurring until August 12th.
Item #2 (the ECB's marginal lending facility) at 3% can be compared with the Fed's discount window primary credit rate of 2.25%.
Item #3... the Fed does not offer a similar facility -- no interest paid on member bank reserves.
R.
VanRip (6/5/03; 05:41:27MT - usagold.com msg#: 104141)
Black Blade
http://igadrhep.energyprojects.net/Links/Profiles/Kerosene/Kerosene.htm
Black Blade
I just read your post on the need for "cheap energy" and your report posted the other day about the increasng use of coal for energy use. Which made me wonder....
What ever happened to kerosene? When I was a kid during the depression, kerosene was very widely used. Before our house was wired, we (and just about everybody else) used kerosene lamps, which threw off a lot of light by the way, even though cleaning those chimneys was a b!tch for a kid. In addition to a coal stove for cooking and heating we also had a kerosene stove with 3 burners fed from a big bottle of kerosene. Gravity feed I think. We had a big barrel of kerosene in a shed which was used for cleaning just about everything especially machinery and tools. We even used it to kill bugs.
When we moved to a farm in Maryland right after WWII started, our house was heated by a large, rather modern lookng kerosene (called coal oil there) heater. Most homes there had something similar as well as wood/coal and kerosene stoves. Many still had kerosene lamps.
I was surprised in reading the info below that kerosene is number two in the world behind candles as the most widely used energy source for lighting. Wonder if that's really true. The way things are going, is it possible that some people here in the US may have to go back to lighting and heating with kerosene? I know some folks still use it in home heaters.
(snip)
"Kerosene consumption in the IGAD sub-region has increased steadily by an average of over 7% per annum since the mid-1980s. Governments have responded to growing urban demand, to concerns about the effects of urban energy demand on forests, and on equity concerns for the urban poor by increasing their imports of kerosene. Ethiopia now spends over US$ 20 million per annum on household kerosene compared to US$ 3 million in 1986.
Land-locked Uganda spends nearly US$ 10 million, while Kenya spends nearly US$ 40. In each case, imports represent a major drain on foreign exchange and have a significant effect on the balance of payments. These imports have positive effects on each country's forests and relieve the drudgery of cooking with charcoal and wood, but kerosene could be used more sustainably, and more sustainable solutions (e.g. battery charging, PV systems, micro-hydropower, etc.) could also be found for meeting energy demand.
Candles remain the most widely-used lighting source in the world. Kerosene follows candles as the next most widely used energy source for lighting."
Black Blade (6/5/03; 04:09:23MT - usagold.com msg#: 104140)
Survey: Economy Faces More Weak Growth
http://biz.yahoo.com/rb/030605/economy_usa_forecast_2.html
Snippit:
SAN FRANCISCO (Reuters) - With businesses holding off on new investment and consumers curbing their spending, the U.S. economy faces a year of weak growth that will not spur much new hiring, according to a forecast released on Thursday. The widely watched survey issued by the Anderson School at the University of California, Los Angeles said the economy's subdued performance resembles the slow expansion of the early 1990s that was marked by weak gross domestic product and employment growth. The world's top economy also must clear hurdles posed by severe budget problems among state and local governments that have crimped government spending, stripping out an important engine of growth, the report said. "We are stuck in the mud," said UCLA economist Ed Leamer, who wrote the report. "The year ahead looks very weak."
Consumers -- who have taken advantage of historic interest rate lows to snap up autos and homes -- do not have much buying power left to spark a strong recovery when businesses finally step in, the forecast said. Leamer cautioned that rising home prices have helped create a housing bubble that could emerge as a drag on the economy, although the most likely outcome would be a "slow leak" rather than a sharp collapse in real-estate values. "People feel wealthier than they already are but they will feel poorer when their housing values fall," Leamer said.
Black Blade: "Interesting" As always, get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program.
Belgian (6/5/03; 03:59:58MT - usagold.com msg#: 104139)
Good evening Topaz...
The ECB will NOT let anyone guess "what" its real plans are ! This NEW Euro Central Bank is definitely in the process of breaking with "old" management-theories à la FED ! The ECB has a "project" besides its daily management tasks ! The euro, force de frappe, is a pure monetary given and NOT an economical one !!! Biiiiiig difference !
Belgian (6/5/03; 03:26:33MT - usagold.com msg#: 104138)
The ongoing competition between euro and dollar....
Can we still call it a "competition", when the dollar-fiat is *printing* itself out of fashion and is slowly highlighting GOLD AS INCORRUPTIBLE !?
Whatever the ECB's decision on IRs, this afternoon, or whenever...IS TOTALLY IRRELEVANT with regard to the aspects the we, goldadvocates, are observing !
Will see how the markets will "interpret" this ECB's non-event.
As long as the euro remains "visibly" more attractive than the dollar, the world's, non dollar-block, central banks will continue to offload a total of 1/2 Trillion $-reserves to be replaced with euro-reserves. This is putting a tremendous pressure on dollar-IRs and explains why the dollar-pits are yelling ! Much more $-confetti printing will urgently be needed, if CBs unload their dollars to fast, as to buy up US treasuries to keep them from falling (spike in US IRs). A possible disaster hanging as the sword of damocles.
That's why everything "MUST" be painted in the trendy "deflation" color ! Price-deflation that is, as covering flag for the ongoing crazy monetary-inflation cargo.
The main purpose of that monolitic bloc, called financial media, is to "divert" peoples attention from the GOLDEN escape route that under normal circumstances would have solved the globe's main problems already. Normal circumstances to define as FREE GOLD ! The financial brotherhood, manages to guide the sheeple, from one stream to the other, with the almost perfect avoidance of the most incorruptible arbiter of all, GOLD ! This obscene contradiction in itself must * inevitably * lead to REAL FREE GOLD !
Rumor : Russia seems to have confirmed it will proceed with the delivery of fuel for the Iran nuclear reactor. Ignore the Russian bear at your own peril !
To the Eurolanders : POG in euro seems to have bottomed ! DYOD ! NIA !
Black Blade (6/5/03; 02:18:20MT - usagold.com msg#: 104137)
Yandal hedge drama - it's not over yet
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256D3B00767EDE?OpenDocument
Yandal hedge drama - it's not over yet
By: Tim Wood
Posted: 2003/06/04 Wed 17:00 EDT | © Mineweb 1997-2003
NEW YORK -- One bullion bank, believed to be Goldman Sachs, has so far rejected Newmont's 50 cents-on-the-dollar offer for its stake in the Yandal gold hedge book. Six other banks have accepted the offer, including, say sources, JP Morgan, suggesting the offer was fair given the perilous state Yandal is in.
Hedging counterparties had until early yesterday afternoon local time to accept the offer. Newmont said in a statement that the acceptances represented 94% of the ounces on the Yandal hedge book and 76% percent of the mark-to-market value. The fact that 24% of the value is ascribed to the holdout bank explains its reluctance to take what's on offer.
It is the same bank that unexpectedly exercised an early termination clause last week that cumulated possible future right-to-break payments into a single $46 million claim. Newmont's ring-fenced Yandal operation, which reserves are less than its hedging commitment, apparently cannot pay the claim without triggering a bankruptcy.
The bank has apparently granted a one-week extension to the payment deadline for its termination claim as it and Newmont continue to stare each other down. Newmont has warned that its offer is final and that if it fails to get 100% buy-in from hedge counterparties and bond holders, then Yandal will probably slip into receivership.
There is no indication that Newmont intends to yield to the bank's demand for full payment.
Black Blade: I find this quite amusing. It's apparently an "all or nothing" proposition. With more committed ounces than reserves and a hedging package that is mine specific, it looks like Newmont has all the high cards.
Topaz (6/5/03; 00:45:59MT - usagold.com msg#: 104136)
Dollar smokin!
http://www.futuresource.com/charts/charts.asp?r=&type=future%2Cindex&symbols=DX1%21&period=V&varminutes=15&bartype=line&symlist=DX&month=1%21&year=03&study=NONE&STUDY0=&STUDY1=&STUDY2=&STUDY3=&bardensity=LOW&size=SMALL&x=32&y=13
Live DX is probably 95>>>> as I type...get a look at the spikes!
slingshot (6/5/03; 00:29:55MT - usagold.com msg#: 104135)
Mikal
Gold is not worth nothing.
USA Eagle
Russia Chevronetz
Arab Nations Dinar
Canada Maple Leaf
Austraila Roo.
China Panda
S Africa Krug.
They just make these coins to steal your Fiat. ;0)
Slingshot--------<>
Black Blade (6/5/03; 00:18:57MT - usagold.com msg#: 104134)
21mabry-energy
http://www.energypulse.net/centers/article/article_display.cfm?a_id=327
If the economy is to emerge from recession it must have an adequate supply of "cheap energy". We don't have much access to "cheap" energy anymore. There are several reasons for this but I won't go into that now as I have pointed it out on several occasions. The developing energy crisis is supply driven as opposed to demand driven. There simply is no way to get enough supply (in the case of NatGas) before winter. There just aren't that many drill rigs. So far the weather has cooperated but in a couple of weeks we should see more energy demand.
As far as investor interest in energy is concerned, it appears that the word is getting out as share prices have been steadily rising. You won't hear much about this as the financial media is geared to selling the story that all is well and the bull market has returned. They don't want to throw cold water on their "suckers rally" after all. So you won't hear a lot of news on energy and precious metals. Even Alan Greenspan said he was surprised at how little attention was given to the NatGas problem during his latest Congressional testimony. There may be more attention given when the NatGas "emergency meeting" with Energy Secretary Spencer and industry reps takes place on the 29th. (just for reference see link above)
Hopefully the administration will use this opportunity to educate the public about the consequences of not pursuing aggressive exploration and development of domestic resourses. But I doubt that will happen, therefore we will always have one energy crisis after another. People are not concerned about such things until they have to pay higher utility rates or find themselves shivering in the dark or sweating in out during power outages. Such is the human animal.
- Black Blade
slingshot (6/5/03; 00:16:48MT - usagold.com msg#: 104133)
GoldenDome
Watching from the Shadows.
Slingshot---------<>
Topaz (6/5/03; 00:09:41MT - usagold.com msg#: 104132)
Tilting the scales.
http://www.crbtrader.com/data/mktcom.asp
The Dollar is holding above 94 in early (E) trade...this IS fun to watch. Last eve ALL hands were to the pumps to slow the dollars rise against the SF/Euro, tonight the only heat sinque is the Yen...The Cream (sour that it may be) is rising to the top.
This ECB decision will determine whether we have a contender on our hands or not. A 25bp move (or no move at all) would be in keeping.... a 50 or 75 drop would indicate..well, OR maybe no move and some Gold noise, mmmm! that'd be nice.
mikal (06/05/03; 00:05:57MT - usagold.com msg#: 104131)
Russia and gold
http://english.pravda.ru/main/18/89/358/10148_gold.html
Nothing Is Better Than Gold
05/30/2003 14:33 by Kira Poznakhirko
Russian economists discuss an opportunity to put a golden ruble in circulation
In developed countries, almost every family has stocks or state bonds. Exchange news is the real information, people show their interest in it. They do not keep their savings at home, they make money work for the economy, the money is invested in the real sector of economy, in the production of goods and export, in the development of new technologies, and so on. This is probably the reason why the living standard of developed countries seems to be a dream for the majority of the planet's population.
It seems that Russia has chosen the way of the world's poorest and hopeless countries. There are investment tools in Russia, but they are meant for a very narrow group of "insiders." Everyone else uses notes of the American State Treasury. Russian governmental officials and bankers have been concerned about Russian people's wish to save their money at home, not in banks. The government arranged the bank reform, they passed the law about insuring people's deposits (which does not insure anything really). The result of those measures was ridiculous. The US dollar started going down, but Russians did not hurry to open bank deposits either. Therefore, the Russian bank system is not meant for saving funds and making investments. To all appearances, it is meant for something else. What if all Russians decided to bring all their money to banks one day? Nothing would change either way. Russian banks invest almost nothing in the country's economy - it is a rather risky thing to do. Most likely, that money would be used for purchasing a chalet in Switzerland or a house on Bermudas. The rest of the money would then be transferred to foreign banks in order to work for the economy of foreign countries (big money brings very good profit in developed countries without any risks). So why does Russia need such banks at all? Even Russia's largest state monopolies have to borrow funds abroad.
Experts say that it is very hard to create an efficient and reliable investment tool in Russia. In fact, there are a lot of such tools in the country, but they are not used according to their purpose. Although, there is a small group of people, who use investment tools, albeit for their personal interests only. Prices on land, apartments and other saving tools have been growing in Russia recently. The US dollar has exhausted such opportunities, and Russians do not see any other investment tool to use. However, Russian people reportedly possess up to 60 billion dollars in total - this money does not work for anything.
This "analytical suffering" will continue until the state pays attention to the most ancient and yet most reliable investment tool - gold. Economists have been arguing about the golden ruble for a long time, referring to the ten-ruble gold piece of Stalin's era and recollecting the incredible industrial growth that occurred during the ruling of Russian emperors Alexander III and Nikolay II. That was the time, when the Russian golden ruble was the most secure and stable currency in the world. However, economists do not make any decisions - politicians and officials of the Russian Finance Ministry and the Central Bank do. They are all certain that the state can grow rich without gold too. It probably can, but not the Russian Federation of the stability and moderate economic growth period.
Bloomberg reports, world prices on gold have reached the highest point over recent months - 367.8 dollars per ounce. The agency believes that the price of a troy ounce on the world market may exceed the level of $400 until the end of the current year. There is probably no other way. The US dollar has been a saving tool for the whole world, not for Russia alone. Investors do not know where to invest, that is why they prefer to buy gold. American state bonds lose their attraction on account of the interest rate reduction.
RBC news agency reports that gold does not work in Russia as an investment tool. Producers sell gold to banks, and banks sell it on world exchanges, obtaining demising dollars or euro for gold bars. The euro has been growing lately, but it will inevitably crash some day.
A common person can hardly buy gold - it is rather difficult. In addition to that, it is hard for a common person to sell it too. Jewelry does not count, for people buy it as a work of art, which is then sold as precious scrap. Analysts believe that such a situation takes place because of the tough control of the state and the taxation burden.
In general, the circulation of gold in Russia is a market for a very small group of people, it is impossible for a common person to access it. For example, one has to pay the value added tax of 20 percent for purchasing gold. When selling gold, the tax is not reimbursed. In other words, this 20 percent will go straight to the state. In addition to that, any bank will have to provide the information to fiscal bodies about anyone who purchases gold. Golden coins are not imposed with value added tax, though, and the Russian Central Bank has already launched the series production of them. In addition to it, the Central Bank periodically informs about the increase of their sales. However, golden coins cause problems as well. One can not use them in a store, selling them back to the Central Bank is not profitable either.
Why doesn't Russia use the golden ruble yet? Investment tools are not meant for common people. Probably, the government wants to make Russians save their money in Russian banks. However, people do not trust the bank system anyway. Probably, they want to make Russians save their money in US dollars. A lot of experts believe that about two-thirds of all dollars are not secured with anything. The US Treasury has a goal to trace and destroy those dollars secretly.
To all appearance, Russia has agreed to become a place, where excessive dollars are saved. There is no one to claim this responsibility - they are not in power anymore. However, all people had to pay for their decisions. Nothing is better than gold.
ViewYesterday's Discussion.
