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ARCHIVED DISCUSSION FROM 6/6/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

21mabry (06/06/03; 23:50:59MT - usagold.com msg#: 104251)
(No Subject)
BlackBlade, I was listening to the bloomberg today energy sector analyst was on saying what you have been saying for 6 months now.She was even saying we could run out of stocks of natural gas next winter,if its a cold one.

mikal (06/06/03; 23:42:39MT - usagold.com msg#: 104250)
@Black Blade
Thanks for your excellent, committed output.
I see that the bottom line of local governments and consumers will also get hit by rising energy costs. And also hit indirectly, as manufacturers absorb the same costs only until they can no longer be passed on to customers.
This is one of the effects of stagflation. Another is the rising cost of imported products that our declining exchange rate imposes on public and private consumers and corporations.
While crude oil closed to almost $31.50, I have long considered this overdue and just the beginning phase. This and today's gradually rising natural gas prices, which in themselves are so high as to not be taken seriously by the majority of gullible commentators and consumers, are other elements in stagflation.
What is the true cost of resource and food commodities, like lumber, rubber, cotton, wheat and metals, is a question that will be more pervasive and unfortunately, more ponderous than most can imagine.


Black Blade (06/06/03; 23:07:04MT - usagold.com msg#: 104249)
Gas prices hit manufacturers
http://money.cnn.com/2003/06/06/markets/natural_gas.reut/index.htm

With natural gas prices about double what they were a year ago, companies starting to feel the cost.

Snippit:

NEW YORK (Reuters) - U.S. owners of paper mills, aluminum smelters, and chemical plants are still waiting for the "peace dividend" in the form of lower energy prices now that the war in Iraq is over. When war was being waged in March, investors and analysts were looking forward to an oil price heading to the range of $20 to $25 a barrel once American troops had taken over Baghdad. But with the price of oil still close to $30 a barrel, natural gas prices are nearly double what they were a year ago -- making energy costs in the second quarter higher than many had expected. "Unfortunately a lot of the things that we were hoping were going to make the second quarter better than the first quarter haven't materialized, including energy prices have not come down," said D.A. Davidson paper industry analyst Steven Chercover. "Anyone who was expecting a kicker from lower energy prices will be largely disappointed."

Concerns about the cost of natural gas have overtaken concerns about crude oil prices. And as North American gas output continues to decline, forecasters are not expecting relief anytime soon for companies like International Paper Co (IP)., Alcoa Inc (AA)., and DuPont Co. (DD) that use large amounts of natural gas to power factories and mills. "It's an ongoing issue," said Kent Newcomb, an analyst at Banc of America Capital Management. "The inventories were so low coming out of the winter, and there's just a good deal of concern that we're not going to get those built back up in time for next winter."


Black Blade: It's going to be a race to the finish now. Drill rig counts are still quite low and production is falling. The word is that companies are ready to hit the fields once land access issues and permitting is worked out, and environmentalist businesses stand ready to file suit to get injunctions to stop drilling. If the mild temperatures fail to stick around this summer and next winter, and US businesses actually experience the touted "economic recovery" then it's unlikely we will go into next winter with adequate NatGas supply. It's going to get very "interesting".



Goldilox (06/06/03; 22:33:46MT - usagold.com msg#: 104248)
current fad . . .
@Jacob Marley:

I'm apologize, but you missed my facetious tone. I was trying to paraphrase the PTB's demonizing the arab leaders, not express it myself. I strongly believe in fair trade, but how fair can it be when one sovereign nation invades another under the guise of WMD and that same demonization. Many of the participants on this forum are quite convinced that the currency and oil wars have more to do with picking Iraq as the premier invasion target than any WMD or tyranny smoke screens. Half the world's governments are tyrannical despots murdering their internal dissenters, many with the full military support of the major nations. Saddam was not any more deadly than our other "friends" in South America and Africa, but as Wolfowitz was quoted in Southeast Asia a couple days ago, "He was sitting on a sea of oil."

21mabry (06/06/03; 21:25:07MT - usagold.com msg#: 104247)
(No Subject)
Jim Puplava has Mr. Fleckstein on interview this week its up on site now its a good interview he is bullish on gold but especially bullish on silver.Mr. Fleckstein also writes for the street.com.

silvercollector (06/06/03; 20:47:01MT - usagold.com msg#: 104246)
Jacob Marley
Very good post today.

He who holds the gold makes the rules; I believe this statement to be correct, AFTER the oil is gone.

In the interim, he who has the oil (and possibly/probably the biggest gun makes the rules. Inclusion of micrograms of gold in a barrel seems like a good idea to me.

"Here's your oil, thanks (?) for the monopoly money but more importantly thanks for the metal, talk to ya soon"





Cavan Man (06/06/03; 20:34:52MT - usagold.com msg#: 104245)
World opinion will further buttress POG
Let's move on right? (Unbelievable!)
Posted on Fri, Jun. 06, 2003

Data didn't back Bush's weapons claims, officials say
By WARREN P. STROBEL
Knight Ridder Newspapers

WASHINGTON - President Bush and his top aides made prewar claims about Iraq's weapons programs that weren't always backed up by available U.S. intelligence and painted a threatening picture that was far starker than what American spies knew, according to current and former intelligence officials and a review of available documents.

Bush and other White House officials also publicly cited evidence - particularly on Iraq's suspected nuclear-weapons program and ties with terrorists - that on closer examination turned out to be false or debatable.

Senior defense officials confirmed Friday that a report by the Pentagon's Defense Intelligence Agency last September expressed significant doubts about whether Saddam Hussein was producing and stockpiling chemical and biological weapons, as Bush, Defense Secretary Donald H. Rumsfeld and Secretary of State Colin Powell all claimed.

"There is no reliable information on whether Iraq is producing and stockpiling chemical weapons, or whether Iraq has - or will - establish its chemical warfare agent-production facilities," said portions of the report made available to Knight Ridder.

While Iraq had biological stockpiles, "the size of those stockpiles is uncertain and is subject to debate," said the classified report, titled "Iraq: Key Weapons Facilities - An Operational Support Study."

The DIA report and other developments illuminate a growing debate over the White House's use of intelligence on Iraq. So far that debate has revolved largely around allegations of pressure on professional analysts to shade intelligence estimates.

The new developments raise the possibility instead that some U.S. officials, deliberately or inadvertently, magnified what they were told by spy agencies, which had an incomplete picture of Iraq and few sources of their own to fill in the blanks.

The DIA report was completed just as the White House was launching a campaign last fall to make the case that Iraq's weapons of mass destruction and terrorist ties presented a grave danger that justified pre-emptive military action.

Vice Adm. Lowell Jacoby, the DIA's director, said after a private meeting with senators Friday that the report didn't mean that Iraq didn't have caches of chemical and biological weapons, only that his agency couldn't definitively pinpoint them.

"Some people higher up the food chain made the leap from suspicion to conviction," said a senior military official who is critical of how the intelligence was handled.

"I think they honestly believed that, based on how the Iraqis had always behaved in the past and not just because they wanted to scare the public into supporting the war," said the official, who spoke only on the condition of anonymity because of the classified information involved.

In a speech Oct. 7 in Cincinnati, Bush said the Iraqi regime "possesses and produces chemical and biological weapons." Powell told a television interviewer Sept. 8: "There is no doubt that (Saddam) has chemical weapons stocks."

The DIA report, whose existence was first reported by U.S. News & World Report magazine, illustrates how intelligence reports were much more equivocal. That reflected the shortfalls in U.S. spying capabilities in Iraq and the uncertain nature of the intelligence profession, officials have said.

"It's looking like in truth the Iraqi (weapons) program was gray. The Bush administration was trying to say it was black," said former CIA Iraq expert Kenneth Pollack, who's now at the Washington-based Brookings Institution, a research center.

Pollack, who advocated a war to overthrow Saddam, said he believes more evidence of Iraqi weapons activity will be found.

But on Iraq's suspected nuclear-weapons development, which for him and other analysts was the most alarming program, "we've clearly uncovered nothing" so far, he said.

The U.S. military has captured two Iraqi mobile laboratories apparently designed for biological arms, although no traces of germ weapons were found.

The failure by search teams nearly two months after the war's end to find chemical, biological or nuclear caches in Iraq has led to growing questions about the war, on Capitol Hill and in allied capitals.

It also has re-ignited vitriolic behind-the-scenes battles in Washington that have put administration hawks who advocated war on the defensive.

"The knives are out," said more than one official.

Undersecretary of Defense Douglas Feith, the Pentagon's No. 3 official, called a news conference Wednesday to deny reports that a special unit in his office had exerted pressure on the intelligence agencies to dramatize the evidence against Iraq.

The CIA is standing by its formal estimates of Iraqi weapons of mass destruction, said a senior U.S. intelligence official. Those include an October 2002 report, which stated in part: "Baghdad has chemical and biological weapons as well as missiles with ranges in excess of (United Nations) restrictions; if left unchecked, it probably will have a nuclear weapon during this decade."

"I think it's appropriately caveated," said the senior official, who also spoke on condition of anonymity.

The report parallels a highly classified National Intelligence Estimate on Iraq, which represents the combined views of all U.S. intelligence agencies. The NIE now is being rechecked as part of an internal CIA review.

American intelligence officials expressed cautious optimism this week that they are getting closer to new information on Iraqi weapons of mass destruction, after wasting a couple of months chasing bad leads drawn from Iraqi exiles and U.N. weapons inspections that ended in 1998.

Iraqi scientists and officials are beginning to talk after either refusing or repeating ritual denials that Iraq had any such weapons, they said. "We're starting to get better information now from people who initially didn't cooperate," one official said.

Still, along with the missing chemical and biological weapons stocks, several key statements by Bush and his aides have yet to pan out or have been proved false:


In the president's State of the Union address Jan. 28, he cited a British intelligence report that Iraq sought to import "significant quantities" of uranium from Africa.

Intelligence officials said his statement was based on documents forged by a diplomat in Rome from the African nation of Niger, who made them using a fax machine. The diplomat sold the forgeries to Italian intelligence officials, who dutifully passed them on to the United States and Britain, officials said.


Bush, Powell and others spoke of Iraq's attempt to import aluminum tubes, which they said could be used in centrifuges to enrich uranium for nuclear weapons.

Powell, in a presentation Feb. 5 to the U.N. Security Council, acknowledged there was a debate over the tubes' intended use, but said the majority of U.S. analysts believed they were meant for a nuclear weapons program.

Mohamed El Baradei, the director of the International Atomic Energy Agency, told the Security Council a month later that extensive investigation "failed to uncover any evidence that Iraq intended to use these 81-millimeter tubes for any project other than the reverse engineering of rockets."


Rumsfeld, Vice President Dick Cheney and, to a lesser degree, Powell charged that Iraq was harboring terrorists, including a major cell linked to al-Qaida. Officials say they stand behind these statements, although no new evidence of terrorist links has emerged publicly since the war's end.

"What happened here is that people who meant well and who had a really aggressive foreign-policy agenda allowed their enthusiasm to overcome them," said Walter P. "Pat" Lang, formerly the DIA's top Middle East analyst.

"In some cases, they managed to push the intel guys back," Lang said, referring to pressure on analysts. "In other cases, where they couldn't do that, they simply ignored them."

(Knight Ridder Newspapers correspondent Jonathan S. Landay contributed to this report.)



silvercollector (06/06/03; 20:32:09MT - usagold.com msg#: 104244)
G8 summit objectives become clear
http://www.morganstanley.com/GEFdata/digests/latest-digest.html
-snip-

Global: Waiting for Traction

Stephen Roach (from Milano)



The global deflation battle has at long last been joined. Once labeled remote, deflation risks are now the defining force shaping macro stabilization policies around the world. Japan, of course, led the way in this assault, followed by massive monetary and fiscal policy stimulus in America. And now the European Central Bank has finally jumped into the fray. This massive policy stimulus is good news for those of us who have long worried about the perils of deflation. At least the authorities have finally smelled the coffee.




Euroland: We're All Deflation Fighters Now

Joachim Fels/Elga Bartsch (London)



50 bp today...

The message from both the ECB's and the Swedish Riksbank's 50 basis points rate cut today was loud and clear. The Fed is not alone in worrying about possible deflation risks, and Europe's central banks are willing and able to act decisively to contain such risks. The difference between the Fed and its two European peers is, however, that the Fed worries publicly about deflation but hasn't reduced rates since last November, while the ECB and the Riksbank worry about deflation only silently and prefer to let their actions speak.

... and real rates are at or close to zero

While real rates in Europe have not yet fallen into negative territory as in the US, they are now at or close to multi-year lows, hovering at or slightly above zero

... and according to the money and credit aggregates

Last but not least, money supply and credit growth also point to an expansionary stance of monetary policy in Euroland, the UK and Sweden. UK M4 was up 8.0% and M4 lending expanded at a brisk 9.6% pace in the year to April. Euroland M3 surged by 8.7%Y in the same month while credit to the private sector rose by a still-healthy 5%Y

What about the puzzling contrast between the ECB and the Fed? While Alan Greenspan has on various occasions expressed his concern about deflation, the Fed hasn't cut rates since last November. Meanwhile, the ECB has cut by 125 basis points while Wim Duisenberg and his fellow council members keep denying in public that there is a risk of deflation in the euro area. In the US case, the answer is obvious, in my view: Chairman Greenspan is truly worried and is trying to dispel fears about deflation by telling markets that the Fed will do everything to counter that risk. In Euroland, our guess is that the ECB is also worried privately but does not want to talk about the risk in public as it fears this could give rise to widespread expectations of deflation, which could become self-fulfilling. Rather, with more room for manoeuvre left than the Fed before the zero bound on nominal rates is hit, the ECB is trying to counter potential deflation risks via action on rates.




The Invisible Hand (06/06/03; 20:31:08MT - usagold.com msg#: 104243)
Hedging sang-froid of eurozone exporters vis-a-vis mighty euro
http://www.economist.com/business/displayStory.cfm?story_id=1826593

From The Economist:

SNIPS:
ON THE elegant Avenue de Breteuil in the heart of Paris is the corporate centre of Michelin, the world's biggest tyremaker. With 40% of its annual sales in North America, surely Michelin is worried by the dramatic rise of the euro against the dollar? Not at all, says the firm. To keep costs down, Michelin does not even routinely hedge its foreign-exchange risks. For much of what it stands to lose when its American revenues are translated back into euros, it will regain because almost all of its raw materials are priced in dollars.
This sang-froid in the face of a fundamental shift in currency values is typical among big European firms. None denies that the euro's strength will cause problems for Europe's economy overall. Indeed, it might even tip the continent into a full-blown recession-a risk that prompted the European Central Bank to cut interest rates on June 5th. But at the big company level, there is a widespread sense that the euro is one problem that can be handled.
...
Unlike Michelin, many firms do routinely hedge their currency risks using derivatives to lock in a particular exchange rate. A "partial hedge" can come from issuing dollar-denominated debt, which gets cheaper to service when the dollar weakens. Anecdotal evidence suggests that many European firms have increased their dollar loans from the banks that supply over 70% of European corporate debt.
Most hedging is done using standard financial contracts. Consider BMW, for instance. The Munich-based carmaker had sales of euro42 billion ($40 billion) last year, of which 31% came from America and Canada, and a further 24% from outside the euro zone. It uses derivatives to hedge its overseas profits fully in each current financial year, and partially for the year ahead.
BMW says that its decisions on where it locates production are driven by market needs, not currency considerations. Yet it has created natural hedges for itself by producing cars in America and Britain. By incurring costs in these markets, it greatly reduces the currency translation problem. It opened a factory in South Carolina in 1994 and will produce up to 150,000 vehicles there this year, largely for the American market. It also makes trendy Minis in Britain, which is handy as a hedge when (as of late) sterling weakens against the euro.
Rival Porsche makes most of its cars in Germany, so its costs are mostly in euros. Yet a large chunk of its revenues come from sales of its sports cars in America. Lacking BMW's natural hedge, Porsche uses financial hedging to minimise the short-term impact of currency swings.
....

Goldendome (06/06/03; 19:12:39MT - usagold.com msg#: 104242)
Friday Night , and the Bull Market on Television
Just now, while incessently thumbing the channel change button on my tv remote, I spent a few minutes, here and there, viewing Crudlow and Krammer.

They were busy giving their viewers a big injection of stock Bull-phoria along with their two guests (one a Mike Holland, the other ? ?.) To all of them, the little dividend tax rate cut is going to make All the difference in the world to tech stocks. They gave the big names that are actually probably making some money, but also assumed that even the tech stocks not making money would be rising in anticipation of dividends (but I assume to pay dividends over a longer period it would be good to actually have the money.)

Kudlow says he now expects a big summer rally in stocks-- (well, what have we been seeing since about March?) I guess they all basically see it the same way, since 3 of the 4 see the Dow Jones Stock avg. closing 2003 at between 10,000 and 10,500. The three also see second half growth of 4%! (not too shabby,eh.) Only Cramer was holding out for lower growth of only 3.5% and the Dow at 9500 by year end (what a party pooper.)

Now where all this growth was going to occur they did not say, or I missed in my channel surfing, but they didn't say anything about the persistent and poor employment numbers, the poor new factory order numbers, the swooning auto sales, etc. BUT, I can tell you one thing they all seem happy about, and that is monetary inflation! And personally, I believe that is where it is all expected to come from...Kudlow even said (and I know that you won't want to read this,) he said, that he even likes some of the Gold Stocks because they pay good dividends, and that he is Happy to see gold holding up here at 360 to 370. [As to him, that shows the Fed. is doing it's job of keeping the money supply flowing](my words there, not his).

I think it shows perspective from another angle... In the big Monopoly game of life, some of us pass go and get $200. Others pass go and get $2,000,000. Those receiving the big immediate payouts on all the billions of fiat created by the Fed. want all the more of it. .....Gdome

R Powell (06/06/03; 19:11:56MT - usagold.com msg#: 104241)
21mabry
There are many who say that silver is too cumbersome to be a good store of value but, after fiquring how many of those 100 ounce bricks I'd need for a decent sized patio, I say that 100 ounce silver bricks are not cumbersome but too expensive. I do, however, have a great fondness for the silver eagle coins.

Silver... more weight and volume for your hard earned investment dollars.
Happy weekend...
Rich

TownCrier (06/06/03; 19:09:22MT - usagold.com msg#: 104240)
Full of gems, er... gold nuggets.
http://www.usagold.com/centralbank/current.html
MK already gave you a taste in his Commentary & Review page. At the url above you will find the full installment of the latest 'Central Bank Insider' dated June 9th (yes, we're three days early) courtesy of the Benedict Mander and the rest of the fine folks at Central Banking Publications.

Click the link for some delightfully tasty bits on the BIS, Duisenberg's vexation with the IMF, the Zimbabwe inflation, the swelling Japanese monetary base, and a new world order should Alan Greenspan ever declare for pink grass.

A few story excerpts:
---
Zimbabwe Cash Crisis
...The central bank has been under fire recently because the country has been suffering from a disastrous shortage of banknotes, presumably because of the runaway inflation (currently speeding at an annual rate of 269%) that President Mugabe's cranky economic policies are causing -- he himself attributes Zimbabwe's economic woes to a "Western plot" to topple his regime. Nevertheless, the country is awash with queues of frustrated locals outside banks who aren't able to access cash as withdrawals have had to be strictly limited.
+
The government has been cajoling the central bank to be more flexible in its response to inflation, and to intensify efforts to make notes available for use "in cash transactions that have grown in size and in volume". [Bank governor] Tsumba had this week been exhorting the public not to panic, assuring them that extra printing paper had arrived in Harare and that it would be used immediately. The firm that prints Zimbabwe's banknotes has been firing on all cylinders to ease the cash shortage; Tsumba also announced that a new 1,000 Zimbabwe dollar note was on its way in November.
---
Japanese Monetary Base
...There is even a feeling that the central bank's view on the futility of setting an inflation target for Japan is getting across. The simple reason for their strongly-held view is that there is no credible instrument to attain the target. There has to be a link between monetary policy and the target, but this doesn't exist, they say. "The monetary base, which is all we can control, has risen by 50% over the past two years; prices have declined. The increased supply has simply been absorbed by increased demand for reserves. This is because reserves cost the banks nothing."
+
There is only one influential newspaper that causes them furrowed brows and deep sighs: "Why is the Financial Times so violent in its attacks on us?" they ask plaintively.
---

Click url for more of this unique and often insightful slant on the ins and outs of the central banks.

R.

21mabry (06/06/03; 17:29:56MT - usagold.com msg#: 104239)
Silver
R POWELL , I was talking to my friends grandfather who is a bullion dealer in town here.He told me he is having a hard time getting enough silver bullion. He said nobody is selling everyone wants to buy and he tried to buy some 100 ounce bars but could not get near enough of them.

Cometose (06/06/03; 17:12:52MT - usagold.com msg#: 104238)
(No Subject)
I've noticed over the past several days of seesawing on the gold market spot specter that over in the Mining SECTOR the HUI is holding firmly under resistance .......Just took closer look and am finding out that two of the larger
components ...FREEPORT MCMORAN and NEWMONT are both breaking out.....

There is also a rumor that STAMFORD ASSET Management
which has 17 billion under management has recently decided that they are going to now promote coins as a hedge against dollar devaluation....

Does this now indicate that that a change of information is to now be distributed from above signaling a coming change in perception and a flocking of the sheep toward the precious metals and other tangibles?????

What was it I heard about SELLING ( the indexes ) in May and GOING AWAY....
today's action was kind of interesting......
IN light of the reports that came out this week in the manufacturing sector and the cmployment area ,,,there's nothing to celebrate about but we have seen this before...
now haven't we....

THIS Is the pump before the dump where the sheysters on wall street with FED MONEY take futures postions and build a little volcanic top .......close out all their longs while the sheep jump in with both fists and then the sheysters use all the profits they made on the way up to build a nice short futures position right before all support in the bubble evaporates............again.......
We might have seen the high at 9200 on the dow today ......who knows????

One thing is for sure....IF we are in a refining smelter..
when the paper gets finished burning ....what will be left will be precious........metals......

R Powell (06/06/03; 16:32:23MT - usagold.com msg#: 104237)
Weekly COT numbers
http://www.cftc.gov/dea/futures/deacmxsf.htm
I look every week to see how the small speculative class in silver is holding out. And, as has been their habit, they are holding firm. Did today's nickle uptick signal the bottom of this current downturn? Will the 450 level equate to a bottom as the 430 level did on the last downturn?

These so-called small specs did not break (sell their long positions) on that last downturn to the 430 level, nor did they sell to take profits a few weeks ago when the POS was fluxuating just over and under the 480 price level. I am not surprised to see them holding fast here at 450.

Again, these are futures only numbers and they should be taken with a large grain of salt. Very often positions are hedged with the use of options or positions are initiated for the purpose of hedging sold options or either options or futures are either bought or sold as a result of market action to either hedge risk or even increase risk! Simple no? NO, it's not, and I'm always amazed at analysts who firmly state that they can read the COT reports or put/call ratios to determine investor sentiment and future price movements. I wish it were so but I have some grave doubts. So, what do we make of the small silver specs who have steadily held their long futures through thick and thin? I guess there are some silver deficit with dangerously low remaining silver supplies believers in the market. Either that or Ted Butler won the state lottery and is now margined up to his neck in long silver contracts. Actually, there are probably other more plausible explanations. Thoughts !??

Yes...it's Friday
Happy Weekend !!!.....!

MK (06/06/03; 16:20:04MT - usagold.com msg#: 104236)
Belgian. . .
The Central Bank Insider heads-up puts the bullish case for gold in the hands of Trichet -- but better stated, it puts the bullish case for gold in the hands of the French. It is France's turn to head up the ECB (they've been very patient) and if it isn't Trichet it will be another French financier or someone with French sympathies in my opinion. Welteke seems to be isolated in his gold position without much backing from the German board, otherwise he wouldn't have backed down on his calls for Bundesbank sales. So German central bankers appear to be leaning in Trichet's direction. When you bring the BIS into the mix, Crocket's push for the WAG (which was news to me) from his position of director of the BIS makes it representative of that organization (not simply Crockett), and what it may have to do with is attempting to restrain what amounts to fractional reserve gold lending. To keep it under control, the amount of gold exiting cb vaults must be controlled, hence the WAG -- as I see it, and of course I could be wrong. There's been much conjecture on this but after long thought that seems to be the situation and remarkably, as I recall, FOA pointed this out long before most others were public about it.

Now, I agree thinking about WAG now may be way too much conjecture way too far in advance, but it is worth considering if you wish to be medium to long term gold holder. If nothing else, the proper interpretation now may be central to locking onto gold at what might appear to be ridiculous prices two or three years from now. I rate the odds on renewal as very high for the reasons stated, though we may have a bigger tonnage number allowed as the inability to print one's way out of unemployment takes its toll, and the temptation to sell off the family treasures becomes unresistible. Still, restraint of cb supply will be the issue unappealing to the bullion banks, and the one which will put a bullish spin on gold in the future.

Having said all this, I do not believe that central bank gold sales are as completely negative events. Ultimately, gold ownership is based on a concern that the paper currencies are vulnerable to rapid and irrerversible depreciation. The number of investors who believe depreciation probable is likely to increase not decrease given the circumstances. A supply of gold is a good thing if you are a buyer. In that respect, I think central banks who find it comforting with their metal for interest bearing securities (as the British central bank justified its actions) are doing us all a service.

--

I am also watching the Newmont situation with interest as it ties into this whole gold lending scheme. The Dizard/FT article this morning states that the bullion banks have already bought back the Yandal hedge -- some 2.5 million to 3.5 million ounces -- and that accounts for gold's recent run-up.

Does that make sense to you? Why would you pay back a gold loan before you even negotiate to collect it at 50¢ on the dollar? Doesn't make sense and it sends the opposite message to Newmont from the one that seems to be most logicalbut maybe I'm reading the article wrong. If it hasn't been filled, it will need to be at some point in the future. But the situation with Newmont/Yandel goes far beyond this one incident. How many other mining companies will be tempted to test the waters?....Another reason for Goldman to hang tough (assuming it is Goldman that is holding out as rumored).

All in all, the Newmont ploy will put a damper on gold lending in the future and this too could effect WAG numbers -- as the sales may not be needed except to cover past dalliances (more Welteke blustering??).

This all fits into my long-standing claim that the bullion banks/central banks/mining companies are essentially in work out situations designed to ratchet down the gold carry trade and lending business with as little impact on the market as possible. But again, things could get out of control.

This is still in my mind the most bullish factor working in gold's favor for the immediate future. I have always thought that the mining companies and bullion banks which seemed gold's most implacable enemies in the past, could very well become its most important friends in the future. The currency situation adds fuel to that fire, as you point out, and if there's no gold to satiate the growing demand caused by the currency situation, the price is likely to rise subtantially in all currencies! If I were a bullion banker now, I would rather be on the other side of this equation at the moment. I would rather be long gold and short the dollar, than short gold and long the dollar. The reasons are rather obvious and perhaps a mad scramble is about to begin. We shall see.......

Thanks for you comments, Belgian. They always force me to think my way through the gold news.



Black Blade (06/06/03; 16:17:40MT - usagold.com msg#: 104235)
Correction

That should be:

"My grandfather rode a camel, my father rode a car, I fly a plane, and my son will ride a camel"

oops!


Black Blade (06/06/03; 16:15:37MT - usagold.com msg#: 104234)
Re: Marley, 21mabry, etc. - Energy

The Arabs have a saying:

"My grandfather rode a camel, my father rose a car, I fly a plane, and my son will ride a camel"

The point is they know that their petroleum resources are not infinite. With a growing population and greater demands on their single-source economies they are well aware of the limitations they face.

BTW, I talked to a couple of industry people today and it appears that the domestic energy companies are getting a bit anxious about drilling. They are not ramping up sharply until some land access, permitting, and legal issues are resolved. They are growing a bit concerned that time is running short for the drill season ahead of winter and are concerned that they may not come close to any production targets this year. So far economic recession and Spring temperatures have cooperated to help add strong NatGas injection but summer is coming soon and with it warmer temperatures. Right now it appears that a court fight may be brewing between energy producers and environmentalist organizations over land access in the Rockies. I will be getting some paper work done for my meeting with the Governor on Tuesday. A friend is headed to Billings, and a couple of other friends are headed to Denver too as energy related meetings are popping up everywhere. I see a lot of movement that I haven't seen over the last two years. Obviously a lot of people are concerned about energy supply. All this is happening ahead of Energy Secretary Spencer Abraham's emergency NatGas meeting late this month. It should get quite interesting.

- Black Blade

Off to the gym!



Belgian (06/06/03; 16:06:34MT - usagold.com msg#: 104233)
@ Topaz
Any deep and prolonged crisis in confidence, read "Panic", will always activate the Gold-Reflex ! But this is the typical Gold boomerang thing that was the playground for the professional Gold-traders, seeing Gold as a currency !
This was very OK, for as long as the dollar was not put (could not) be put into question.

There is only ONE global crisis, MAJOR CRISIS, rapidly developping NOW : The final *dollar-crisis* ! All other crisisses are derivatives from the dollar-systemic detoriation. The only crisis that remains unvisible for the general public and the tutti quanti of analysts.
The perfect denial ! It is as simple as that Bro.

Jacob Marley (06/06/03; 15:55:31MT - usagold.com msg#: 104232)
the current fad ... ?

"Perhaps the energy moguls are completely aware of the short half-life of their "black gold" " ---- How stupid do you think "they" are? If you and I, who are nobody, can think about this --- don't you think that those whose wealth depends on it have thought about this once or twice???

"If the arab nations are hoarding gold to build the Arab gold dinar, they be even more demonic than we are told. " --

If some key producers made an arrangement to exchange a microgram of gold per barrel on some portion of barrels sold, is this evil???? I think they call that free trade. Many on this forum should herald this as a perfect step toward using their gold as "money". (And Mr. Maybry, the idea was not to run the price, that is why the premise involves such a little bit of gold. No one wants to upset the applecart, they just want a fair price for their production).

And as to your assertion that these "arab nations" may be "even more demonic than we are told." Did you really think about what you said - and here for all the world to see - forever???? You lump the term demonic on whole peoples because they wish to exchange some of their god-given resources for something more than a promise?

And why do you use the denigrating term "hoarding"? Would not "saving" work just as well???? If you sell your hard earned produce, and arrange to have someone pay you a little gold as part of the agreement, would you not call yourself fortunate??? And would you not consider your "hoard" as your savings, your wealth store???

Please, Sir Goldilox, reconsider the statement you make, as to is it fair. And regarding "fad", even though we don't have the "concrete" proof of oil for gold, the premise is as old as men, it is simple barter, and this sort of thing takes place at international levels all over the world -- it is their way to bypass somewhat the strangle of dollar settlement dynamics.

Belgian (06/06/03; 15:41:24MT - usagold.com msg#: 104231)
To WAG or not to WAG in 2004 ?
The Washington in WAG "was" most probably indicating that the dollar and euro made an "entende cordial" on temporary POG-containment. Will this mutual interest, for dollar and euro, still be the same in sept. 2004 ? What will be the $-€ exchange rate be, by then ?
Where will the euro stand on a global scale, within the coming year ?

Yes, there surely will still be CB sales-loans-leases, as to "proportionate" (15%-?) the respective goldreserve-exchanges between memberstates within the EMU and friends.
But this does NOT automatically mean that this will put downward pressure on POG ! Certainly not when the euro has decided, that his time to replace the dollar, has come and is possible.

In other words, horizontal-cyclic, Gold containment can go on as it did in the past 20+ years up until the euro (or oil-or euro and oil) decides it is time to FREE GOLD from the dollar-system !

IMO, it is totally impossible to guess, even by approximation, the world's "monetary" status, one year from now ! One can only speculate on WAG-II or none at all.

If one accepts that CBs can and do contain POG, one must also accept that POG can be maneuvered to the moon. By consensus (ECB/FED)...by the strongest faction within the willing coalition of Gold containers (ECB or FED)...by an outside force (oil cartel), strong enough to convince the hesitant (EMU)...by a fifth horseman (China).

CBs "WANT" the world to see, their so called, goldsales !
What if CB goldsellers should decide to sell minimum goldrserves for highly needed emergency relief at VERY HIGH PRICES ? Well, they would maneuver POG into the stars !
And there "must" be a damned very good reason why they didn't do so, already !

The only consensus up until now is that goldsales were to support the dollar ! What happens when and if that dollar-support consensus, vaporizes ?

An official euro Free Phisical Goldmarket or quasi totally Privatized Gold are the two inevitabilities. The Gold containment cannot go on for ever (practically), because of the rapid detoriating dollar-standard. The dollar paper-mania went too far and too deep. At a given point, the euro will "need" (Free)Gold's support as to present itself as the new standard.

Speculating on what will happen around sept.2004 is as much as speculating on the *timing* of Gold's REVALUATION.

With Gold at 300€ (euro) per ounce for Eurolanders, I don't want to run the risk of making a bad bet on WAG II ! Totally out of the question ! 300€/Oz is an absolutely ridicule price from any point of view. Not even to be considered when taking any possible opportunity-cost into consideration.

CB Gold is and remains as UN_TRANSPARANT as can be ! We can only excercise in thinking/acting as if we were central bankers, ourselves and elaborate on the different stances we would take under different circumstances.
There is NO 101-manual on Gold central banking. The more we have NOW two different (diverging) CBs, ECB and FED !

Yep, THIS TIME IT IS DIFFERENT INDEED, from the two main milestones of 1933 and 1971 ! Then it was "STANDARD" Dollar-Gold...now it will become " FREE" Euro-Gold ! With or without the WAG II time-saver.

Ask yourself wich currency is containing wich ? Can the dollar contain the euro and/or shall the euro dethrone the dollar by letting it succomb under its own Debtberg ?



Topaz (06/06/03; 15:06:48MT - usagold.com msg#: 104230)
Buena, Belgian etal.
http://www.futuresource.com/charts/multicharts.asp?symbols=tnxy%2Cfvxy%2Ctyxy%2Cgcm03&period=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=12&go.y=12
That has to be the most "interesting" (as in the proverb) week in the various Markets I can remember. I didn't want to take my eyes off the screen...but EVERY time I did (to sleep, work or whatever) the indices returned to some semblance of normalcy. The entire monetary spectrum has conspired to provide MY exclusive entertainment...HA!

Confidence: As Physical Gold holders,it appears a REAL possibility there are TWO hoops we have to jump through as we move forward...1: a Crisis of Confidence in the Future(s)...and 2: a Crisis of Confidence in the Present. The first may well see Gold plummet and will NOT be a Dollar/Euro thing. The Market will en-masse abandon any thought of future income to hold "present" Cash. Gold will shine brightly ONLY when 2 develops. Sadly the world will not be a pretty place at that time. FWIW.

Goldilox (06/06/03; 14:27:25MT - usagold.com msg#: 104229)
Oil for Gold or whatever the current fad is . . .
maybry21:

Recently someone posted a reference to Nick Cook's book "The Search for Zero Point Energy" and a host of related references. Perhaps the energy moguls are completely aware of the short half-life of their "black gold" and are carefully controlling the phasing in of "new" energy sources, in order to maintain their economic and political control.

Gold has outlasted entire civilizations, it should have no trouble outlasting the waning industrial (oil and steel based) phase of this one. In fact, if the PTB get too nasty with each other, it might easily outlast this entire latest experiment in civilization. Look how imporatant the "gold" finds in Iraq are portrayed to be. Maybe the war was about more than dollar/euro? If the arab nations are hoarding gold to build the Arab gold dinar, they be even more demonic than we are told. Control of the masses is everything - PPT, 19th Century Fox, Jonestown, Warren Commission, you name it. Dis-information is a pervasive weapon.

Notice how carefully both sides "justify" their actions to the minions by relating it to "Biblical" and "Koran" prophesy. The militant Muslims and Christians of the world are perfectly happy using the spectre of world destruction to leverage their control over the disinformed sheeple. This is one observation where Marx was "right on the money". There is no opiate as powerful as "God voices". Perhaps not even "gold fever".

21mabry (06/06/03; 12:11:30MT - usagold.com msg#: 104228)
OIL FOR GOLD
Another and FOA discuss oil for gold quite extensively in their writings,by most accounts there is a 1000 to 1800 billion barrels of petroleum left on our planet the most important substance there is to our way of life. Figuring we use 25 billion to 30 billion barrels of oil a year and this amount per year will increase. We have about 30 years left of oil on this planet.why would a nation accept paper for this commodity as Another and Foa have said only gold is an acceptable form of payment.So I guess taking known gold reserves and plugging it into a formula with known oil reserves we can get an idea of golds true value.I am no mathamagician but that should put gold price in the statosphere.

specie-man (06/06/03; 11:56:31MT - usagold.com msg#: 104227)
Energy Issues
Black Blade,

I've not read any of those books, but I've often pondered those sorts of issues in my mind.

I agree with the general conclusion:
We are not a petroleum-based economy.
We are a petroleum-based CIVILIZATION !

No petroleum = no civilization.

When fossil fuels start to get truly scarce, look for things to get really ugly (as if they're not a little ugly already !).

Alternative energy sources must be found. I'm thinking that silver, platinum, and palladium may play an important role in future energy sources. Silver for it's reflectivity, conductivity (electrical & thermal), and photon sensitivity (solar cells ?). Platinum for it's use as a catalyst in fuel cells, etc. Palladium for it's use as a catalyst and as a hydrogen conduit/filter (for fuel cells, or maybe something like cold fusion).




admin (06/06/03; 11:42:50MT - usagold.com msg#: 104226)
MK's Gold Commentary & Review
http://www.usagold.com/AMK/MK-gold.html
Updated:

Inside story on the Washington Agreement from Central Bank Insider:

"Will the central bank agreement of 1999 - comprising all the big European gold holders - be renewed when it expires in September 2004? Opinions differ on whether it should be renewed: gold producers and gold investors are for it, as it has reduced fear of huge central bank sales, but bullion banks and traders are generally against it. Real market folk don't care what happens to the price so long as they can play with the gold.

a nation of one (06/06/03; 11:35:04MT - usagold.com msg#: 104225)
meandering cause

Let us now temper the tale of the Naked Emperor with a touch of reality. If his domain were Cuba,
his ruse might continue for forty years. And what of a boy who would point out such a thing? Only
disapproval? Banishment? Prison? Death? Surely Bush is not such an emperor. For he has led his nation to
unequivocal victory over a vile and evil man. Nor are any of them naked emperors. They are all honorable
men, willing to do anything for the sake of the people, or to get re-elected, re-assigned, re-appointed, or
whatever. And now we have this DOW and GOLD thing. Do not lose heart, dear friends. Gold will always be
what gold will always be. And worthless paper? Well there is always some use for paper, isn't there, no
matter how worthless? When everything is going well, does the Bureau change the way it tallies its figures?
When unemployment is very low, does the government announce that, actually, the old way of figuring it can
be improved, and, guess what, the new figures are worse? No. When the truth has to be searched for to be
found, and the atmosphere is charged with illusions of sugar plumbs, and no child can explain why the stock
market is going up, what to do? Mr. Bush and his Meritorious Men will do anything and everything to make
it appear there is no economic problem, because his father failed to get re-elected because there was. That,
and other reasons. So we have the DOW climbing up with all the feeling of naturalness that the severed arm
of a long-dead corpse would show. For how long? For as long as a corpse's severed arm can be made to do
so. And how long is that? No mere boy can know that this emperor is naked. It takes an adult. And every
adult knows that emperors don't like their foibles exposed. The masses will be kept ignorant. Today is
Friday, time for the avid TV money shows that the masses go to worship at. Coincidence? To us it is
see-through clothes. But for those whose minds are occupied with their dissipated 401Ks, and yesterday's
paperwork, and who -instead of searching for the truth- stumble blithely about their real main business of
trying to escape that quiet desperation which they are the captains of, toward This Happy Saturday, beyond
this Silent-but-Nonetheless-Darkening Sunday, to Monday-and-The-Week, while all the time gladly
oblivious to whatever else might be.



21mabry (06/06/03; 10:09:01MT - usagold.com msg#: 104224)
(No Subject)
Thnx Waverider, One of the best used bookstores I have been in is the Strand in Manhatten amazing if you go to New York visit it. Also to throw a gold refrence in tour the Fed Building you can see the gold in their underground vault, got to call ahead to register for tour, then go across the street and tour NYSE. 21

TownCrier (06/06/03; 09:36:46MT - usagold.com msg#: 104223)
Automaker Ford pushing UK toward EMU
http://biz.yahoo.com/rf/030606/britain_euro_ford_2.html
COVENTRY, England, June 6 (Reuters) - Ford Motor Co, the world's second-largest automaker, said on Friday it was essential that Britain adopt Europe's single currency to create the stability needed for investment.

"We really need to get into the euro. It is a strategic imperative for this country to move into the euro zone," Ford Chief Operating Officer Nick Scheele told reporters.

"The lack of predictability and stability is an inhibitor to future investments. So I look forward on Monday to a positive indication as to the strategic direction of this country."

The UK government is expected to announce on Monday it is not yet ready to adopt the euro. It will indicate when, if at all, it might be prepared to hold a referendum on the issue.

Ford Europe President and Chief Operating Officer Martin Leach told Reuters two weeks ago that the company assumed the country would join the euro sometime between 2004 and 2006.

-------(see url for full article)-----

Not an isolated viewpoint on the part of big business. Do you think it will eventually influence the political will on the issue? It is harder to imagine it NOT having an effect. A matter of time.

Gold for the transition.

R.

admin (06/06/03; 09:19:43MT - usagold.com msg#: 104222)
MK's Gold Commentary & Review
http://www.usagold.com/AMK/MK-gold.html
Updated.

New Quick Notes (Comment on today's market action).

New Stein

"The Religious War in Gold Market Reaches Climax" -- FT/Dizard

USAGOLD / Centennial Precious Metals, Inc. (06/06/03; 09:13:31MT - usagold.com msg#: 104221)
Our Latest Buyers’ Group Special . . . BULLION!
http://www.usagold.com/gold/coins/bullion.html






Waverider (06/06/03; 09:08:03MT - usagold.com msg#: 104220)
21mabry
Just a tip - I didn't have success finding "The Prize" through a bookstore here in Vancouver, but was able to pick up a second hand copy (cheap) in excellent condition through the university bookstore. It used to be a required text for one of the courses and they had a few extra on hand. You may find one cheap through a university -it's a fabulous book - definitely worth the purchase. Cheers,
Waverider

21mabry (06/06/03; 09:06:12MT - usagold.com msg#: 104219)
A BOOK
I have been thinking of this for awhile I would love to see a book compiled from the writtings of this forum.The hall of fame, the gold trail,and the other writtings of what I call the giants of the forum.I would even prepay way in advance.I know publishing is expensive but its just a hope I have. 21

21mabry (06/06/03; 08:49:20MT - usagold.com msg#: 104218)
Black Blade
Thanks for the book list.I am gonna look for Daniel Yergins book this eekend,he is becoming one of my favorites to read and listen to.He is so clear and consice and also has such a calm manner that comes with knowing a subject well.I am also gonna dig through my dads old books he was Northwest Ohio sale rep for Gulf. The uote you gave from Philip of Spain is one of my favorites. I got the book by MK not a signed copy though wish it was. THNX 21

Belgian (06/06/03; 08:13:23MT - usagold.com msg#: 104217)
EU - Iran
http://www.atimes.com/atimes/Middle_East/EF07AK02.html
Trade in euro as to come at oil for euro...
A multi-polar euro-world instead of a uni-polar dollar-world.
Bye bye NATO !???

Euroland's part in the US' stockmarket remained at the same level of 30%. If this stockmarket should crash and Euroland withdraws from Wall Street as Japan already did...Americans will have full control over their SM but will (imo) lose the last standing supporter of the dollar !?

The great Atlantic rift in progress !?

Buena Fe (06/06/03; 07:39:13MT - usagold.com msg#: 104216)
outrageous
my guesses,
-today is THE high in the indexes (DOW etc)
-gold will recover quickly
-a $ crash is only days away

Buena Fe (06/06/03; 07:35:48MT - usagold.com msg#: 104215)
Wall Street Set to Open Sharply Higher
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=2889479
...........The May jobs report included a major overhaul of the way the department compiles its survey and calculates its results. In an encouraging sign, the changes rendered the recent job picture less gloomy than it had appeared earlier.

"Because of the confusing changes, the numbers won't have a major impact on either stocks or bonds markets today," First Albany's Johnson said. "It appears early indications are that the market will open higher on Intel news, and I don't think these numbers change that.".............................

__________________________________________________________

ha ha ha ha ha ha ha
sad joke for the day

Topaz (06/06/03; 07:31:08MT - usagold.com msg#: 104214)
I hope you Guys are awake for this!!
http://quotes.ino.com/chart/?s=NYBOT_DXY0
Here we go AGAIN!

Cavan Man (06/06/03; 07:23:47MT - usagold.com msg#: 104213)
Explains the London "FIX(er)"
US stocks will like soar at open.
U.S. May Unemployment Rate Seen Rising to 6.1%: BN Survey
June 6 (Bloomberg) -- U.S. unemployment may have risen to 6.1 percent in May, the highest in almost nine years, as the economy lost jobs for a fourth straight month, economists said in advance of today's Labor Department report in Washington.

Companies may have eliminated 30,000 jobs last month, based on the median of 68 forecasts in a Bloomberg News survey of economists. That would bring the number of positions lost since February to 555,000. A 6.1 percent unemployment rate would be up from 6 percent in April and the highest since July 1994.



Waverider (06/06/03; 07:02:42MT - usagold.com msg#: 104212)
John the Jute
"...to thank the Lady Waverider for being away and so unable to win it..."

Somehow this slipped past me, but it's very funny and thank you! Actually Slingshot and I are working "behind the scenes" on what just might be...well..the mother of all Gold stories, we'll see! There are many ideas from this forum which, when mixed with a sprinkle of imagination, might just weave into something both educational and entertaining. If only there were more hours in the day for these little side projects. Cheers and kudos to ya!

Waverider

steady (06/06/03; 05:38:30MT - usagold.com msg#: 104211)
sil ver
it could just be
http://www.moviewavs.com/TV_Shows/Lone_Ranger/hiho.wav

Belgian (6/6/03; 03:44:37MT - usagold.com msg#: 104210)
Indeed, indeed Sir Topaz....
We (all of us) are constantly on the look out for more, new, euro-Gold linkage, "evidence" and don't even understand the deepiest meaning (and purpose) of the WAG !
(Washington Agreement on Gold !) The "Washington" in WAG hasn't even been decoded !!!
How can we possibly correctly interpret the complex differences between (CB)Gold-sales-loans-leases !?

This weekend, the Poles (40 million people) are having their EU-membership referendum, with heavy (US-$) subversive action for boycot. The fact that the dollar-reserve-standard-system-currency, gives covered evidence of feeling threathened by an upcoming new currency euro-block, must point to the intrinsic strenght of that currency-system-project. Otherwise, the dollar wouldn't feel so uncomfortable with this.

The more that the euro is NOT to be feared by the dollar on pure economical (competitive) grounds. If..."if", the dollar were a sound currency it would surely welcome the euro competitor !!! It "must" be that nasty, "STUBBORN" Gold-Thing that is bothering the dollar (dollar-system)!?

Watch the POO, now that Saudi Arabia, Venezuela and Mexico (!!!) will gather in Madrid !

Since the dollar-system will become more and more defenseless without the Gold-Backing, it might pour its defense out of a heavely supported (AND MEGA OVERVALUED) stockmarket ? The oil-producers are certainly NOT impressed by such an fraudulent (supportive) undertaking. They "demand" equal value for the delivery of "their" oil as the fundamental basis for the whole global economy... RELIABLE OIL FLOWS FOR AN HONEST BARTER !

The French secret services catched, presumed terrorist, who planned an atrocity in Reunion island (Indian Ocean departement d'outre mer). I suspect a very specific, internationally well known, signature on these terrorists !?
I may have it wrongly interpreted, but this adds to the evidence of the lasting euro-dollar struggle >>> fight.
Unfortunately and very unpleasant for both !

Black Blade (06/06/03; 03:05:04MT - usagold.com msg#: 104208)
Neither a borrower nor gold lender be
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054416468361

Snippit:

The religious war in the gold market reached a climax this week with the announcement by Newmont Mining that all but one of the gold lenders to its Yandal mines in West Australia had agreed to take 50 cents on the dollar to liquidate their claims. Newmont's buy-out offer, which effectively saves the Yandal operation $77m, is a stunning blow to the gold banking business. For the past two decades, gold mines have been developed using the gold lending market. Roughly speaking, banks borrow gold from central banks and lend it to mining companies. The mining groups sell the gold, use the capital to develop mines, and pay the loans back from their production. Since gold interest rates are far below rates for borrowing in dollars or other main currencies, this has been a cheap way to build capacity.

But some gold investors, along with some gold mines, have believed that when mines "hedge" their gold production by borrowing, then selling the gold, they depress the price and cannibalise their ability to profit from future price rises. The "hedgers" believe they are only following prudent practice for commodity producers. This hasn't been a gentlemanly dispute. Newmont, now the biggest gold producer, has become the leader of the anti-hedging group. It acquired Yandal when it bought out Normandy Mining. Yandal, which is comprised of three mines in the Western Australian desert, has repeatedly seen its ore reserve numbers reduced by management, the engineers and the accountants. According to Newmont, the most recent and relevant numbers showed proven and probable reserves of 2.12m ounces at the end of last year, against which 3.5m ounces of gold had been sold in hedge contracts. As a quick pass with a supercomputer will show, 3.5m is larger than 2.1m. Therefore the hedge contracts were insupportable. Since the mine's finances are not guaranteed by Newmont, and Newmont doesn't feel like bailing out the banks voluntarily, the banks have no choice but to accept essentially an out-of-court bankruptcy workout.

Few doubt that miners will find it far more difficult to borrow gold on the same good terms they had before. Banks will want much tougher documentation. Among other points, they will want to make sure that all gold lenders are treated on the same terms. They will want to make sure reserves numbers are real. They will be reluctant to do project financing, or off-balance- sheet financing, of new mines. That means mines will have to be developed with equity financing or the security of a mining company's entire balance sheet and cash flows.


Black Blade: Thankfully this face-off may help to put an end to this horrible practice of selling forward gold and artificially depressing the price of gold. Hats off to Newmont!



Topaz (06/06/03; 01:37:59MT - usagold.com msg#: 104207)
@Belgian (6/5/03; 03:59:58MT - usagold.com msg#: 104139)
Yes, I see it now SirB, not a word before "the Bridge" is needed. Makes sense...said it all with the WA. ECB could say: "We'll cross that (Gold) Bridge when we (the System) come to it" ...if you get my drift.

Black Blade (06/06/03; 00:09:52MT - usagold.com msg#: 104206)
Re: 21mabry – Book List

The following books are listed along with author and a short description by reviewers and myself:

1. "The Prize: The Epic Quest For Oil, Money, and Power" By Daniel Yergin, 1993. The book furthers ones understanding of the United States' place in this history which, in turn, helps us to understand why oil is a vital national interest to the most powerful nation on earth. With this in mind, the book helps one to understand not only the influence people like the Samuel brothers, the Rothschilds, and the Rockefellers had on the development and growth of the industry, but most importantly how and why this industry has such influence on the direction of U.S. foreign policy.

2. "Hubbert's Peak: The Impending Oil Shortage" By Kenneth S. Deffeyes, 2001. This book has been on the top 10 list and is one of the books recently seen carried by George Dubya. Kenneth S. Deffeyes was a protégé of M. King Hubbert at Shell and is currently a professor of Geology at Princeton University. He delivers a sobering message: the 100-year petroleum era is nearly over. Global oil production will peak sometime between 2004 and 2008, and the world's production of crude oil "will fall, never to rise again." If Deffeyes is right--and if nothing is done to reduce the increasing global thirst for oil--energy prices will soar and economies will be plunged into recession as they desperately search for alternatives. It is no wonder then that Oil Men like George "Dubya" Bush and Dick Cheney have read this book.

3. "Geodestinies: The Inevitable Control of Earth Resources Over Nations And Individuals" By Walter Lewellyn Youngquist, 1997. GeoDestinies helps to identify the forces that will determine our future. Some of these include the exponential population explosion, the ever-increasing demand and use of fossil fuels and other non-renewable resources, the degradation of our soils and groundwater, the truths and misinformation concerning alternative energy sources, and the relationships between natural resources and politics, economics, and our culture as a whole.

4. "The Coming Oil Crisis" By Colin J.Campbell, 1997. During 1997, an academic debate of immense significance for the future of civilization began to surface in a remarkably diverse array of media. The debate concerns the question, is there enough crude oil left in the world to get us to 2010 without a historically unprecedented discontinuity. The whole character of society in the 20th Century, and of its history, economics and politics is more a product of oil than of any other factor. The crucial question which Campbell addresses in his book is how much oil remains to be found and for how long global oil resources can continue to support the expected growth in demand. Having access to Petroconsultants' extensive database, he has carried out a detailed and comprehensive analysis of historical production data and of the Earth's ultimate oil potential. His estimate of the ultimate oil reserves is 1800 billion barrels of which 1600 billion barrels have been discovered, and he predicts that there are only a further 200 billion barrels yet to be found. His most crucial pronouncement however, is that once the global mid-point of depletion has been reached, production rate will decline.

5. "Green Monday" (out of print – Financial Thriller) By Michael Thomas, 1981. Financial Thriller – This is an excellent piece of fiction and I got it after Randy (our USAGOLD Admin guy) mentioned it once in passing on the forum. The author was a partner at Lehman Brothers and Burnham and Company. I just ordered a used copy tonight from an online book retailer.

6. "The Skeptical Enivornmentalist: Measuring the Real State of the World" By Bjorn Lomborg (Academic and former Greenpeace activist), 2001. Lomborg than correctly pointed out that incentive structure for the career environmental scientist/activist tilt them to communicate bad, or even alarmist, scenarios. Basically, it is money (donations and government grants) and livelihood (career and fame.) Similarly, the media is incented to communicate "news" that attracts a large viewership - the only real news is bad news. He merely points out that if we use scientific methods (rather than faith) and make claims responsibly (rather than based on self-interest), the populace will have a better understanding of the true state of the environment, and resources can be directed to the areas that are truly a source of concern. But of course that might well mean that less governmental money, and less environmental research jobs. Lomborg did not make many friends of the environmental stripe by publishing this book

7. "The ABCs of Gold Investing : Protecting Your Wealth Through Private Gold Ownership" By Michael J. Kosares, John Ritland (Illustrator), Rod Colvin (Editor), 1997. Of course our Host's book is listed as a recommended listing along with the previous literature. Now for the first time under one cover, novice investors will find thorough guidelines for making good decisions about private gold ownership. In The ABCs Of Gold Investing, gold investment expert Michael J. Kosares (with 25 years experience in the field) emphasizes the asset preservation qualities of gold at a time when investor uncertainty about the economy has led many to seek asset diversification. The ABCs Of Gold Investing covers a range of topics, from understanding gold's role in combatting inflation and deflation to how to select a gold firm. Kosares also examines reasons why gold has become an essential in many American portfolio and why that trend is likely to continue. – Midwest Book Review. Heck, if you ask real nice I am sure he will even sign the book for you. ;-)

8. "The Power of Gold : The History of an Obsession" By Peter L. Bernstein, 2001. Though I don't necessarily agree with all of Peter's conclusions, he does put together an interesting (and gory) picture of the history of the "barbarous relic". Peter Bernstein quotes the immortal words of King Ferdinand of Spain, who once declared: "Get gold, humanely if possible, but at all hazards--get gold." As ensuing chapters reveal, man's obsession with finding, keeping, selling, and evaluating gold has rarely been a humane adventure and has always been a hazardous one. If anything, the book does describe events through history concerning Gold that we know have influenced the course of history for over 6,000 years. Although he doesn't cover it, the earliest evidence of Gold influence in World culture is perhaps as early as 4,000 B.C. as evidenced by unearthed Thracian treasures. Other than the historical view presented I think that he tends to miss the point of Gold ownership in today's world and the necessity of having Gold as part of a diversification strategy. For that I would recommend MK's book.

Aside from "Green Monday", I would recommend the other books as a start to understanding the approaching financial crises and how to prepare for them. There are a couple of others I am going to get when I find time.

Another excellent source is "Oil & Gas Journal". It is a weekly publication with updated info on the petroleum sector. It covers material of general interest, exploration and development, drilling and production, processing, transportation, etc. It's actually a pretty good resource for those interested in the petroleum industry and it's reasonably priced (though I get the professional rate which works out to about a buck per issue). They also toss in a bimonthly issue of "Drilling Contractor". I won't post the web site here but you should be able to find it quickly with a search engine.

Anyway, so much good literature and so little time, but that is what life is – a lifetime of learning and accumulated knowledge. My philosophy here is: If you haven't learned at least one thing in the course of a day, then that day has been wasted.

Cheers!

- Black Blade





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