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ARCHIVED DISCUSSION FROM 1/6/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Goldendome (1/6/06; 23:20:28MT - usagold.com msg#: 140207) To the dearly departed. DEATH CHANTS, BREAKDOWNS, AND FORECASTS FOR 2006by Bill BonnerMercy Otis Warren on the ratification of the Constitution in 1788:"When fortune throw[s] her gifts into the lap of fools, let the sublimer characters, the philosophic lovers of freedom who have wept over her exit, retire to the calm shades of contemplation, there they may look down with pity on the inconsistency of human nature, the revolutions of states; the rise of kingdoms, and the fall of empires."We warn our dear readers. What follows is more of a churlish lament than a real forecast. As we have confessed more than once, and proven more often, we get the news no sooner than anyone else. Still, we have two advantages over most forecasters: We know our limitations, and we don't watch television.So, today, we begin by describing the world, not as it will be, but as we think it is. It is a world where individuals who mind their own business can live better than at any time in history. Painless dentistry, air-conditioning, automobiles, the Internet - we are humbled by the majesty of our own creations. Year after year there are more of them. Now we can eat pineapple in London in the wintertime. We can read books written by dead Chinese scholars in our native languages. We can chat with a friend on the other side of the globe, at almost no expense. And we can have an erection where and when we want one (so we are told), thanks to the wonders of modern biochemistry, rather than the mysteries of old-fashioned hoochie coochie. The thought of it is almost too much for us. We swoon, and ask the gods: what next?While the progress of the world swells up before our eyes, we turn our eyes to the newspaper and wonder what has gone wrong, for there is the story of 100 dead in Iraq. Reading more carefully, we find that the news from Iraq could have been written 100 years ago, when the British Empire was fighting insurgents in the area. It could have been written nearly 1000 years ago, when Baghdad was under assault from the Great Khan. We also might have read it 2,000 years ago, when similar battles were fought with the Romans. Has nothing changed? Why is our own Texas Tiberius repeating the errors made by virtually every empire that ever was: pushing beyond the limits of its resources, until it finally falls apart? And he does so at the very moment when life seems so sweet in so many ways. We Americans can barely brush our teeth often enough. Alas, dear reader, while we enjoy real progress in matters of technology, in matters of psychology we remain the same as we always were: prone to panic, backsliding and humbug. Which is why we expect little from 2006. Technology improves with the passage of time; psychology oscillates like the seasons. While we are sure that the year will bring marvelous new gadgets, we doubt that it will bring marvelous improvements in our mental state. We have enjoyed a long season of calm, comfort and conceit. Bitter weather must follow, as it always does.Returning to the occupation of Iraq, what should we expect? More bad news is our guess. Psychologically, the nation is sliding down from the peak of "bring 'em on" optimism. It is becoming obvious that the war benefits only two groups: Osama bin Laden and his gang, who were happy to see the posse head off in another direction...and certain well-placed defense contractors. The former, bin Laden's bunch, are presumably holed up in a cave somewhere. But the latter are living it up in New York. The International Herald Tribune ratted out David Brooks, of DHB Industries, maker of bulletproof vests for the military. The vests are worn by the poor grunts sent on Mr. Bush's fool's errand. Mr. Brooks wears silk. The IHT describes a private party for the vest-maker's daughter, held at the Rainbow Room at Rockefeller Center:"The bash was headlined by a list of performers that could easily have carried the Super Bowl halftime extravaganza. The superstar rapper 50 Cent and the front men from the rock group Aerosmith were among the night's many performers. According to the The Daily News in New York, the party [cost] $10 million..."Brooks can afford it. Prior to the Bush administration's war to make the world safe for democracy, the man made $525,000 a year. In 2004, thanks to fat government contracts, he made $256 million, in compensation and stock sales. Good for him. But we suspect that fewer Americans will want to sacrifice their sons and daughters in 2006 so that Mr. Brooks can get rich. In fact, we expect the average working stiff to go a little sour in the year ahead. He's been losing ground for the last three decades. His wife went to work to help pay the bills, and then he borrowed money to keep spending. But this is the year when the bills begin to pinch. Home sales will be down 6% to 8% in 2006, says Fannie Mae. Wal-Mart just reported its smallest December sales gain in five years. Auto sales for the Big Three were all off in December. And even, "truck sales stumble in '05," says AFP. It may be true that the new, globalized economy helps everyone get richer. The trouble is that the riches do not fall on all voters equally. The rich - those who own financial assets, and those whose labor is protected from Asian competition - are getting richer. The poor are getting poorer. When the poor finally realize it, they aren't going to like it, and 2006 may be the year they begin to wise up:"Millions brace for credit card crunch," says a CBS headline.But the lower and middle classes can do nothing about it. They are the ones who have borrowed too much - often taking out interest-only mortgages, with no income verification. They cannot work their way out of the hole; their wages are under constant pressure from Asia. They will have to suffer, along with those who hold their mortgages.Technology inches forward, but changes in mass psychology can happen by leaps and bounds. That is why the financial markets are prone to panics. Of course, they do not happen frequently. That is why forecasters are usually right when they predict that next year will be like the last. Extraordinary events, like panics, happen rarely. Otherwise, they would be common events. And since they do not happen very often, people generally think they never happen. People build their houses on low ground...knowing that a flood is possible. But they rate the odds so low as not being worth worrying about. Likewise, who worries about a panic out of the dollar? Who worries about a stock market crash? Who tosses and turns at night, sweating the risk of a real estate collapse? After so many years of stability, investors come to think these things can't happen. They imagine that the monetary authorities have made some fundamental progress - like the progress in microcomputers or gene therapy - that makes these extraordinary events obsolete. They think they will never happen again.Imagine what they would think...imagine what they would do if the dollar sinks by 5% every day for a week. Imagine how hysterical they would become if their neighbors house stays on the market, even after they cut the price by 50%. Imagine how panic-stricken they would be if interest rates shot up 2%...or 4%...or even to 18% as they were in 1981. All of these things are possible. All are likely, maybe not in 2006, but certainly before the end of time. All are human, psychological reactions...completely foreseeable and completely unpredictable at the same time.We have no opinion on sectors, markets, or individual stocks. But our opinion of our fellow man is that he is given to fits of desperate sanity. And our instinct is that he is getting close to one now. He will look at his dollars and realize that they are nothing more than pieces of paper. He will look at his stocks and wonder why he ever thought they were worth 20 times earnings. He will look at his house and won't be able to believe that someone would have willingly paid him so much for it...and that he, damned fool, didn't take it! All of that is in the future. How far in the future, we don't know, but we are happy to own gold while waiting for it. Gold, any broker or financial planner will tell you, is nothing but a "risky speculation." In our opinion, it is one of the few places you can put your money that is not a speculation. It is there when your neighbors are happy. It will still be there when they're sad. It's there when the empire is riding high. It is still there when it doth lie so low. We hold onto it now, because we expect an extraordinary change...as the U.S. empire sinks, and your neighbors start to growl. Gold should not merely stay there, but go up.Bill BonnerThe Daily Reckoning Gandalf the White (1/6/06; 21:13:40MT - usagold.com msg#: 140206) SIR MK The "Wiz" sees the POG at $755 in his Crystal Ball !<;-) Gandalf the White (1/6/06; 21:03:33MT - usagold.com msg#: 140205) Look at the "POOR" US$ chart ! http://quotes.ino.com/chart/?s=NYBOT_DX GO YELLOW !You can "size" this chart to the last "Five Trading Days" and see the "BIG SLIDE" --- OR just look at today's chart and see the FAB BEAUTIFUL WATERFALL ! <;-) MK (1/6/06; 20:11:33MT - usagold.com msg#: 140204) Mr. Linkley Thanks for reminding us what we all have in common here. Sometimes we get so locked up in our differences that we forget why we came here in the first place. I think if we were to acknowledge starting points and what drives us together, it could be summarized as follows: It is still the case that if you were to bring up gold in a crowded room, 95% would flee, 4% would be curious enough to ask a question or two, a 1% might ask who you use for a broker. That's in a time when gold investors have made incredible gains, when most of what we had prophesied has come to pass and those who have put their money in other markets have for the most part taken a merciless beating. My point is that we ought to count our blessings, give the other guy better than an even break (at least here at the Table Round), and perhaps consider that we should ourselves cultivate and preserve ( for our own use) whatever small piece of ground we have been able to garner. Friendships, even those internet based, are worth holding for the long term -- like gold itself.Speaking of differences, I heard from a friend today that James Sinclair says that gold is going to $750 at the top this year. I beg to differ with the illustrious Mr. Sinclair, but I think it's going to $760. I wonder what you might have left out of the analysis that would have brought you to the right number.And thanks, David Linkley. For reminding us all of our roots. Flatliner (1/6/06; 19:06:56MT - usagold.com msg#: 140203) @Reference Vietnamese houses "priced" in gold Sundeck, There is another point in the post by Goldnovice that is radically different that what many are used to in the (wild) west. That is, these people do not go into debt to get their house. Thus, drawing out equity wouldn't seem like an option. It's a straight across value for value exchange that's a one time deal. I would think that if this were the case, these people would thing long and hard about the place they purchase, because if they can't sell it, they are out their gold. Their family could be stuck there for years.Could you imagine someone in the US getting a house if they had to buy it with gold? … I don't think so! 99% of this country would be homeless *and* goldless at the same time. Also, I think we both, at first glace, thought that the government might be involved with pricing houses in gold as if the monetary system were backed by houses. But, after reading it a few times, I believe that it is the people that value houses and gold together. If they make a bad investment, they will get less gold back when (if) they sell it. The problem is that if one of the two items changes in value, they will have to rethink the exchange. If one suddenly becomes more valuable, it may be that houses will start selling again when the original buyer realizes that 50 coins have the same value as 500. But, until that change can occur, no one is going to sell a house because those holding gold will not give it up at this point.I think Belgian would like this value for value comparison for gold. No? Sundeck (1/6/06; 18:35:39MT - usagold.com msg#: 140202) Catching up on Saturday morning in Oz...Sundry issues (Saturdry issues, actually...Ouch!!) Nice PM move...suspect there may be more in the pipeline...@TC #140148 Thanks... you're welcome.@Lacklustre #140150 Mmmmm...a currency backed by MTM gold? "Backed" in the sense that it is redeemable for gold? Not sure what you would have there... Call this hypothetical currency the "Bernankor" (B). Suppose initially that B100 are exchangeable for 1 oz of gold, then:In a closed economy/financial system, if treasury expands B supply willy-nilly (too rapidly), people who hold gold and who wish to acquire Bs for "normal" commerce will see the B-value of their gold eroding and will demand more than B100 per ounce of gold. Simultaneously, people with surplus Bs will rush to exchange these inflated Bs for gold (or other "things") - like the French did with the US-dollar in the '60s. These two thrusts will drive up the POG in Bs (along with the price of just about everything else). Hence MTM gold will rise in price, as will many other things. The detailed trajectory of the POG will depend upon gold's relative importance (perception) in the mix of things that characterise the diverse economy over time, as well as upon the change in the gold supply. I don't really understand what would happen in the full complexity of an open economy/financial-system where international pressures are involved. However, my feeling is that "backing" a currency with gold (in the strict redeemable sense) is not what is meant by "free gold" - better to let gold run its course separately and find its own level internationally. Gold then may play its role in an MTM reserve sense, as in the concept of the Euro.Maintaining a rigid relationship, even a MTM one as you suggest, between a currency and gold introduces stresses within the fabrics of economies and financial systems that probably inevitably lead to failure.Just my first quick thoughts...@Goldnovice et al., Reference Vietnamese houses "priced" in gold. Now, there seems to be something schizophrenic going on here...If houses are quoted in gold ounces, then that would seem to me to be an attempt by Vietnam to couple the VALUES of houses and gold together...rather like "backing" a currency with gold.Coupling houses and gold may not be a bad idea in a highly regulated environment, but in real systems things have a tendency to follow independent courses....as the supply an demand for houses and gold follow separate trajectories.In the "west", house prices have increased 50-60 times since 1970 while gold in US dollars has increased only about 15 times. (What has been the situation in Vietnam?)If the housing market is stagnating as the price of gold (in US Ddollars, and in Vietnamese Dong) is increasing, http://www.infomine.com/investment/metalschart.asp?c=gold&u=oz&x=vnd&r=1y&submit1.x=41&submit1.y=7does this mean that people are trading their gold for dong (or dollars) and spending on things other than houses?Somewhat the opposite seems to have been happening in western countries (Australia, UK, US) where people have been spending their dollars and pounds on houses lickitty-split, forcing up the price of houses (inflation manifesting preferentially in housing)...then redrawing their "equity" and spending again (on houses and other retail items).Without knowing anything about differences in "mercantile sentiment" between the US (say) and Vietnam, I suspect that there may be great differences in the way a "house" is perceived in the US (status symbol, etc) versus Vietnam??? But I am only guessing, and I am sorry that these thoughts are a bit garbled...Cheers Smeagol (1/6/06; 17:50:10MT - usagold.com msg#: 140201) Dat ole seasonal weakness http://www.321gold.com/charts/seasonal_gold.html Sss...if we do NOT ssee the typical seasonal pattern, precious...that will sspeak volumes!S. David Linkley (1/6/06; 17:41:40MT - usagold.com msg#: 140200) When will da boys cover? The COT or commercials are supposed to be infallible when it comes to trading because they "are the market." Everyone knows they are the "smart money." After watching them trade oil, the dollar and gold the past 2 years one has to wonder if they really aren't the dumb money. As MK has mentioned in the past maybe these huge losses sustained over the past several years are really the cost of doing business.Anyway you look at it the table is set for commodity inflation not seen since the 70's. Helicoper Ben will try to get the Republicans through the mid-term elections by supporting the economy and the DOW with huge liquidity injections (reason #1 why M-3 reporting is gone), since Eastern central banks are buying gold along with the world smart money and the dim central bankers in the West are selling combined with falling production the price of gold is going much higher than people think. One has to wonder if the covering of gold shorts is even possible. Cash settlements are really the only way out as even smaller investors are beginning to ask if they too should own some gold? The COT is out of luck and gold could spike at any time regardless how severe any correction may be. Don't wait, get it now while its still cheap. We may disagree on this board about what is now occurring in the big picture world economic scene, but we all agree on the necessity of owning physical gold in your possession as the coming economic crisis hits. Goldendome (1/6/06; 17:35:50MT - usagold.com msg#: 140199) Have the "Newshour" pundits eaten their Crow? We'll hear. We will be listening in to James Puplava's Financial Sense Newshour this week, to hear whether or not he and Frank Barbera ate -- and in fact -- filled up on "Crow", over the long holidays.Surprisingly, they were slammin' gold pretty hard (short term) on the show dated Dec. 17th., looking for gold to drop to 470 or lower by February; gold was 505.70 as of the show date, having dropped from the earlier December high. I don't believe that it went lower after their call to sell. Made me think at the time, that they had sold at the high, then wanted everyone else to sell behind them, bringing the market down to where they would want to buy again. (I know that's just suspicion and cynicism, but hey! stuff happens.) That's not to say that we couldn't have the seasonal correction that we've seen in the past few years in the early months of the year (Smeagol, has written of it lately.) But right now, they've sure missed in the short term, on their "top" call.Funny to go back and hear Frank say that the market had run-up to fast; he felt it necessary to sell and be on the sidelines until some of the "weaker hands" had been shaken out of the gold market. Ha! I guess they were Frank -- Yours and Jim's. silverton3 (1/6/06; 16:45:18MT - usagold.com msg#: 140198) Monday, 8AM Will we wake up to GOLD 550. A little slip in the dollar and we could be there. Overseas they will not be looking at the same dollar charts we are, so they may not have resistance selling at 543.GOOD MORNING GOLD! Wish it was monday. Now I have to wait. Flatliner (1/6/06; 16:40:58MT - usagold.com msg#: 140197) @Vietnam and gold on reserve Can't help but revisit post 140189 from Goldnovice. I've selected a small section of the words while hoping to not change the context. "But if there was a run on gold "deposits" I'm sure most people would miss out as the gold is merely "unallocated" and hence part of the bank's reserve assets, as it is elsewhere in the world."The "as it is elsewhere in the world" is part of what I've been searching to understand for a while. You see, I live in the USofA. To you, that might qualify as ‘elsewhere’. Here, banks do NOT hold gold on reserve! They don't want it and they don't value it in the slightest. If you go to the bank to try to get a secured loan using gold as collateral – you'll be laughed back out into the street. All they want to deal in is paper or better yet, digital ‘money’. Here, believe it or not, to most every citizen, the dollar is actually better then gold and more secure! It can actually be insured up to 100k in one account. The people here have bought that program to such a depth that even though we have one of the strongest currencies in the world, people just will not buy gold with it – they truly believe that there is no need to do so. Money in the bank is insured by the government up to 100k! What's better then that? Paper, in all its forms, is what banks here deal with. Also, the "if there was a run" part is also interesting. Here, in my ‘great’ country, reserves in banks are next to non-existent. A small bank with up to 56 million on loans needs virtually no reserves. As the bank grows larger, the reserve percentage goes up but, across the board, the percentage is small. Why? Because any run on the bank is just a digital transfer away. Believe it or not, part if the strength here is that there is no gold on reserve. About the closest thing we see towards bank runs can be seen with what happened to Refco a couple months ago. But, what's interesting here is that because there really wasn't anything tangible behind that run, anything lost could be covered with a cheap promise from a few banks or potential buyers. "Deposits" is also quoted here. Does that mean that money in Vietnam is convertible? You know, like the old gold standard that people here wish for? Or, if you deposit gold in the bank you can get gold out and if you deposit currency in the bank you get currency out. Is that how it works? I am truly curious. As a side note, gold gets so little respect in the USofA that when you spell out the advantages of owning gold to someone, they will always ask "where do you buy gold?" The concept is *so* lost, that people have even separated the concept of jewelry and gold! Going to the jeweler doesn't even come to mind. Then, when you finally tell them where it can be found for reasonable prices (like from our great host) they then get all nervous because they as so scared that they will lose dollars! Ah! Sometimes, I think The Great Mogambo is right, we're doomed. Main thing to note here is that not all places treat gold the same way. Another thing is that the banking system in the US does not value gold.One last thing before departing for a labor intensive weekend, it seems that the plan of a soft economic landing in the US just means to me that gold will get more expensive. If the fed is able to perform such an act, it will be like confiscating gold once again by making it harder to purchase. This time though, no one will object because they truly don't value it here. The only squeals of protest heard, will be from people complaining about globalization and how they now have to put the kids to work in order to make the mortgage payment. And, even when they do, they'll shrug and say "It's just the way things are now. By the way, did you see Dancing with the Stars last night? Oh man, don't you love those outfits?"If you have all not noticed, I am completely sold on the idea of not letting the bank hold any reserve for me. If a Vietnamese citizen were prudent, I would guess that they would continue to wear their reserve. Now, I think I'll try to find something really bad that happened to someone else so I won't feel so depressed. Belgian (1/6/06; 16:32:26MT - usagold.com msg#: 140196) @Goldnovice I agree, that the short selling bullion bankers do know for sure that they can count for 100% on a bail out in any case and circumstances. Their job was to BUY precious time. Not "that" smart imo, but they had no other choices left. The CBs that organized, ...paved the way...for freegold, are somewhat smarter.Knocking the $-goldprice back to $450 would tell us that the old $ goldregime still has some power left and more importantly, is allowed to use it for buying some more time. But I suspect that Asia (China) wants to do something about the imbalances. In particular the $-reserves. The more so, now that the dollar expansion has all the green lights it could ever dream of. This morning, a CNBC-Europ anchor also said that everything is possible with gold...even a $ goldprice of $3,000/Oz (3 thousand).But he was still reasoning with the "old" gold logics.Today, we see > Dow + euro + gold and oilprices UP ! Is very strong evidence for helicopter dollars assisted with massive economic peptalk. I would be extremely surprised to see $-POG reach $450 ever again. melda laure (1/6/06; 13:30:26MT - usagold.com msg#: 140195) (No Subject) "Is it too much to expect another concerted effort to drive down the POG?" Short answer: No.Longer answer: those whose plan is to accquire a slightly bigger pile (and who already have a nice little pile) can afford to wait a few months after such suface waves; we're riding the big one already (the subsurface wave) melda laure (1/6/06; 13:20:58MT - usagold.com msg#: 140194) Skip the dramamine, pass me the old toby http://www.safehaven.com/article-4366.htm The California style market: chock full o' fruits and nuts. Yes but the first five trading days arent' over til monday....We wonders... we wonders... two massive POG peaks so close together... Goldilox (1/6/06; 13:16:48MT - usagold.com msg#: 140193) CNBC gold "bug" I love how they have changed their "screen bug" to reflect the price change since the 1PM close of COMIX instead of the daily change.Gold $540.6 DOWN 0.60As the Mogambo would say, "HAHAHAHAHAHA!" Goldilox (1/6/06; 13:11:24MT - usagold.com msg#: 140192) DOW flirts with 11K Ok, fine.I'll just hope that predictions of DOW=POG happen before the DOW falls on its sword! USAGOLD Daily Market Report (1/6/06; 12:46:00MT - usagold.com msg#: 140191) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.FRIDAY Market ExcerptsGold up $13.40 today, over $22 on weekJanuary 6 (from MarketWatch) -- COMEX February contracts closed at $541.20 after touching an intraday high of $541.80. Prices haven't closed at a level this high since March 1981, though on an intraday basis, they touched $543 on Dec. 12 of last year.The contract finished up $13.40 for the session and up $22.30, or 4.3%, for the week.China said Thursday that it would diversify its foreign-exchange reserves away from U.S. dollars and government bonds."China's announcement of wanting to diversify their foreign-exchange reserves holdings is going to have a profound effect on financial markets worldwide," said Peter Grandich, editor of the Grandich Letter."It's the death blow to the U.S. dollar, which had enjoyed a temporary reprieve in 2005, and another bullish factor for gold going forward," he said.Also, "disappointing U.S. employment numbers spooked the dollar, and in turn boosted gold prices on its traditional inverse relationship," said Matthew Parry, an economist at Economy.com.The dollar fell to its lowest against the yen Friday since mid-October."Diversifying away from dollars has become desirable -- retail investors returned to the precious metals arena in droves this week," said Jon Nadler, an investment products analyst at bullion dealers Kitco. "Low yields on cash and negative real interest rates are adding fuel to this quest for adding gold and silver to one's portfolio," he said.However, "it is still mostly the fundamental picture of sluggish supply and robust demand plus the prospects for weakness in the dollar that are the engines of this latest spike in prices."---(see url for full news, 24-hr newswire, market quotes)--- Flatliner (1/6/06; 12:10:00MT - usagold.com msg#: 140190) @ Vietnam "There will always be enough in such circumstances." Ah ha ha ha ha ha ha… Ah, my friends, you may never sell your gold again. Goldnovice (1/6/06; 12:00:17MT - usagold.com msg#: 140189) Vietnam Flatliner, the houses are valued in gold, but the physical metal does not make an appearance when a house vendor and a buyer do their transaction at a bank. The seller's gold account is simply credited with the amount. Of course, the seller can then withdraw the physical metal. There will always be enough in such circumstances. But if there was a run on gold "deposits" I'm sure most people would miss out as the gold is merely "unallocated" and hence part of the bank's reserve assets, as it is elsewhere in the world. As so many people keep saying, get physical!Any more opinions on Barrick? Goldilox (1/6/06; 11:51:53MT - usagold.com msg#: 140188) Tone Always an issue online. No blame intended. We just defused a similar customer miscommunication in my business this morning.And yes, today's gold movement certainly sets the "tone" for the shortsters! "Get off the tracks, the g-train is a'rollin'!" Flatliner (1/6/06; 11:47:23MT - usagold.com msg#: 140187) @Vietnamese and gold It will be most interesting to hear from you over the coming months as the value of gold goes up and to see how that relates to people's thinking in Vietnam. It seems that they have already leaned towards holding gold with expectations that the exchange, gold for houses, will be much less heavy in the near future. As with regards to time, it would appear that trust is not an option in the deal. I would drive that right back to Sundeck's posting yesterday. It seems like the Vietnam people have a working situation where option 4 is the choice of preference. Goldnovice (1/6/06; 11:37:07MT - usagold.com msg#: 140186) POG Is it too much to expect another concerted effort to drive down the POG? After all, a fall to $450 would crush the vast majority of new gold investors, who would vow never to touch it again. I'd feel much happier about buying below $500 but will buy more anyway.Belgian, perhaps both the central bankers and the bullion bankers know exactly what they are doing. It's usually easier to think by starting from this premise. TownCrier (1/6/06; 11:30:34MT - usagold.com msg#: 140185) Goldilox, tone I think you'll agree that the particular mindset of the reader governs a great deal of the "tone" that they derive from an otherwise flattish monotone of type-written words.In the course of a discourse, what may have been delivered in a patiently cool and insistent emotional state by the typist may be received as the same by one reader, as a weak-kneed rebuttal by another, a condecending lecture by another, as unflagging aggression by another, as badgering by another, as boring pedantic blather by another, etc, etc...Back to gold... setting a new 25-yr closing high today.R. Goldnovice (1/6/06; 11:22:45MT - usagold.com msg#: 140182) Vietnamese and gold Flatliner; Oh, and yes, the Vietnamese people feel a tremendous affinity with gold. There are jewelry shops everywhere, and the merchandise is nearly all yellow, and the women wear gold all the time, not just on special occasions - bracelete, earrings, necklaces. Goldnovice (1/6/06; 11:18:47MT - usagold.com msg#: 140181) Vietnamese and gold FlatlinerThis is mainly a cash economy in Vietnam, so the transactions are done in one go. Housing loans are very rare. If you buy a house, the seller will either choose gold itself or the cash equivalent, but either way it's usually done at a bank (gold accounts are common, though I would never use one since the banks sell much of the "deposited" gold to the jewelry trade - better to hide your gold somewhere safe). Anyway, the entire amount for the house is paid in one go, as we did when gold was near the bottom (very useful having a Vietnamese wife who understands all these things). I've never heard of an extended payment for a house in this part of the world.Of course, if someone buys a house for, say, 500 taels of gold (one tael is roughly 1.2 troy oz.), they'll never want to sell it for less. That's why the property market is stagnant over here, and likely to stay that way as the POG keeps climbing. Goldilox (1/6/06; 11:12:31MT - usagold.com msg#: 140180) All in the Delivery TC, If I may be so bold as to stick my nose in other's business, it seems CM was more concerned with tone than context - though his was perhaps not flawless. Judging from recent interchanges with Cobra(too) and Rich P, discussions seem to have gotten more personal of late.I'm not laying blame, just observing the trend.A wise man recently reminded me that "Can I help you?" and "What the f' do you want" are two very different ways of asking the same question, as I often suffer from "foot in mouth, then shoot foot" disease. Flatliner (1/6/06; 11:05:04MT - usagold.com msg#: 140179) Houses priced in gold. Goldnovice, I did read an article a while back about housing market in Vietnam and how the rising price of gold put a damper on home sales. The question that I had regarding gold for houses was how they structured the actual deal. Do you have experience with how these deals are structured? For instance, is a house simply valued at a particular number of ounces and to buy it, you deliver that weight of gold? Or, do people go in debt to acquire the house? If they do, how is that debt structured? Do they comment to deliver x ounces (where x equals the sale price of house in gold) over time? I guess I'm curious what the value of time is with that transaction. Do they deliver x+y gold over time? (Where y is interest paid in gold). This question may seem obvious to some, but, if gold really does find a little respect from common people, I would expect that most all significant purchases will someone revolve around gold. Thus, I would like to understand how these deals are structured. Thanks in advance. Goldnovice (1/6/06; 10:52:11MT - usagold.com msg#: 140178) Thanks @ Smeagol et althanks for the kind reception Smeagol (1/6/06; 10:47:50MT - usagold.com msg#: 140177) Never ssay never... "No, I'm no-one special who can enlighten the forum, just someone who can learn a great deal from it." - GoldnoviceWe did not know houses in Vietnam were priced in It, until you enlightened us...it is good to have gold-information from all over the globe...in any form. Welcome!S. Goldnovice (1/6/06; 10:43:05MT - usagold.com msg#: 140176) Barrick conclusion @ flatliner1. The Arabs love gold, always have2. From 1971, they can no longer get it for US$35 an ounce so they have to go into the (black) marketplace, hence the oil crisis3. Less gold available so forward selling begins in earnest (if I have that right)4. By the 1990s the situation is getting desperate, hence the formation of Barrick USAGOLD / Centennial Precious Metals, Inc. (1/6/06; 10:38:04MT - usagold.com msg#: 140175) New to gold? Enter the market with grace and confidence; assets and info to get you started right! http://www.usagold.com/gold/special/starter.html Goldnovice (1/6/06; 10:34:47MT - usagold.com msg#: 140174) Barrick @ FlatlinerOkay, will try. It's been ten years since I moved from Australia to this gold-loving country of Vietnam - the perfect place to realize the importance of the metal. Heavens, even the houses are priced in gold (so with the rising POG, the property market is as dead as a dodo). My gold background is simple: about a year ago, I made a decision to learn about economics and finance, subjects that had been utterly outside my experience in 40 years of life. As I read article after article from the internet, making sure to consider opposing views, I am starting to make sense of the world and understand about gold, but it's hard going. Why did gold capture my fancy? I don't know but I'm happy that it has (and started buying six months ago). No, I'm no-one special who can enlighten the forum, just someone who can learn a great deal from it. TownCrier (1/6/06; 10:30:13MT - usagold.com msg#: 140172) Cavan Man, As you well know, I'm not the host of this fine establishment, and therefore I'm not under any delusion that any amount of respect whatsoever in my direction is warranted. However, I would have hoped it was not too much to expect a basic courtesy, such as might be shown to the butler during your visit.Nero? Nero???!For the life of me I can't understand why you'd go out of your way to take a poke at me. Clearly I didn't miss the Chinese diversification news, as I have already demonstrated.In fact, back on December 27th, prior to this announcement, I offered these following comments in association with a short news article reporting that the buildup of Chinese forex reserves had slowed sharply according to November's data. I commented...------------------TownCrier (12/27/05; 11:41:07MT - usagold.com msg#: 139747)SHANGHAI, Dec 27 (Reuters) - China's foreign currency reserves rose at the slowest pace in 18 months in November, an official newspaper reported on Tuesday... Still, the $9.3 billion increase boosted the reserves, the world's biggest after Japan's, to a record $794.2 billion, the China Business News said, citing sources familiar with the data....[Randy's comment following article>>>]...Consider this. When China absorbs dollars (and ultimately interest-bearing dollar-denominated bonds) as the concluding balance of payment for its international trade surplus, there follows political harping of tensions over perceptions of unfair currency exchange alignments and unfair competitive advantage as evidenced by the trade surplus. Or so the argument goes.A tidy remedy exists to put an end to this petty sort of grousing over international monetary and trade issues. China need take only one additional step in the process. Rather than concluding its balance-of-payments dollar inflows with an absorption of U.S. bonds, China instead ought to use those same dollars to bid for gold. Imbalanced trade would thereby be concluded with a physical good, and thus would the technical spotlight upon trade flows be dimmed as China could validly argue that it has erased its trade surplus, and right along with it any further need to deal with political sensitivities over its forex handling of its monthly excess dollar inflows -- as these, too, would concurrently be eliminated.R.-------------------So, Cavan Man, with those bases nicely covered, I don't know why you're faulting me for doing my part to stimulate a lively conversation. I'm merely doing my part helping to show people that, despite our new discussion guidelines that narrow the scope of discussion to gold-related matters, there remains an endless degree to which additional thought and discussion can be beneficial. Are you suggesting that the various participants in that discussion were wasting everyone's time and space, including their own? Are you speaking on behalf of all readers?How can we expect anybody to decide upon and justify their own portfolio's satisfactory percentage of gold diversification if we don't allow ourselves to fully consider the very nature of money, the nature of savings, and how these concepts must accommodate the evolving nature of monetary, financial, and investment markets?Sometimes I wonder why I even try.R. Belgian (1/6/06; 10:22:18MT - usagold.com msg#: 140171) @White Rose You still remain convinced that CBs are ignorant idiots and bullion banks are the enlightened ones. Soon you will find out that it is exactly the other way around. Flatliner (1/6/06; 10:20:21MT - usagold.com msg#: 140170) @Goldnovice It seems that you may be new here, but it's obvious that you have some background that has helped you formulate this question with such precision. I have time. I'm sure many hear do also. I'm sure all would love to learn how you came to such a conclusion. Please... share. Goldilox (1/6/06; 10:19:59MT - usagold.com msg#: 140169) Total Recall One of the Governators' best. We wishes he would go back to his core business and leave the pond scumming to the professionals. Goldilox (1/6/06; 10:18:10MT - usagold.com msg#: 140168) Barrick @ Goldnovice and White Rose,"Ask and it shall be given."And we all thought Barrick was common pond scum - from your info, it seems they are "official" pond scum. Goldnovice (1/6/06; 10:17:04MT - usagold.com msg#: 140167) Barrick @ goldilox, White Rose, BelgianNo. No support reference for the theory. Just thought of it myself after reading several oldish articles about Barrick's texas hedges, which only make sense in such a scenario (or something similar). Smeagol (1/6/06; 10:16:29MT - usagold.com msg#: 140166) (snicker) Yess, Ssir Goldilox! The amount of information we wantss...is limited only by our sspeed of taking it in.We jusst wishes we had total RECALL! (cackle)~>8-)S. Belgian (1/6/06; 10:11:14MT - usagold.com msg#: 140165) @Goldnovice The answer is definitely "YES", Sir, without any doubt !And it is not only Barrick gold. The evidence remains well hidden within the echelons of the internationalist goldcartel web (synarchists).A -novice-...asking such a question...humhum :)-(: Goldilox (1/6/06; 10:10:30MT - usagold.com msg#: 140164) Barrick Arabia @ Goldnovice,Welcome aboard. That's a pretty loaded first question. Do you know of any reference support for this theory? As Smeagol might say, "We likes to read almost as much as we likes to talk." White Rose (1/6/06; 10:05:19MT - usagold.com msg#: 140163) I have my own theory about Barrick Barrick was set up by Saudi billionaire oil and arms trader Adnan Khashoggi as part of a scheme to bankrupt the Soviet Union. When central banks sell gold, it raises the price of gold (less overhang on the market). When newly mined gold shows up, it lowers the price of gold (new supply). I think that Barrick has been a conduit to take borrowed central bank gold and sell it into the marketplace as if it was newly mined gold.Yes, quite a bit of that gold probably went to the Saudis. Part of the "bankrupt the Soviet Union" plan is characterized as "convincing the Saudis to lower the price of oil for a few years". What better way than to offer the Saudis a new supply of gold real cheap.It worked. The Soviet Union went bust.Then the central banks needed their gold back. This is where Barrick started selling gold "in advance". They have been trying to avoid having cough up much real gold.Yes, there has been some real mining going on.But think about it. Why do they need the ex-prime minister of Canada and the ex-president of the USA and a raft of JP Morgan lawyers on the board if they are doing business the straight and narrow.An excellet topic. Survivor (1/6/06; 10:01:51MT - usagold.com msg#: 140162) Freegold Dialogue Spreads Its Wings This, from a Doug Horning commentary at the neighboring castle. First time I've noticed the "free" word associated with gold outside our fine round table: -snip-David Vaughn, in his Gold Letter, caught the mood of the market yesterday when he wrote: "Well, for those worried about gold having reached a rally high & are now worried about a quick retreat south again – that ain't goin’ to happen . . .What we are observing now is a ‘free’ gold price acclimating itself to the true market forces of supply & demand."-end snip-A golden Friday to all.- Survivor Goldilox (1/6/06; 09:58:05MT - usagold.com msg#: 140161) Shopkeeper Economics, Redux http://urbansurvival.com/week.htm snip:As the Labor Department issued its latest report on unemployment (a tich better 4.9% in December) we have to recall that hundreds of thousands of out of work and under-employed are not counted thanks to handy-dandy "make it good" statistical techniques.Total nonfarm payroll employment increased by 108,000 in December, and the unemployment rate was little changed at 4.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The December in- crease in payroll employment followed a gain of 305,000 in November (as re- vised). Several industries added jobs over the month, including food serv- ices, professional and business services, health care, and manufacturing.Unemployment (Household Survey Data)Both the unemployment rate, 4.9 percent, and the number of unemployed per- sons, 7.4 million, were little changed in December. The unemployment rate has ranged from 4.9 to 5.1 percent since March.The unemployment rates for adult men (4.3 percent), adult women (4.5 per- cent), whites (4.3 percent), and Hispanics or Latinos (6.0 percent) showed little or no change in December. The jobless rates for teenagers (15.2 per- cent) and blacks (9.3 percent) declined over the month; the rate for black teenagers had an unusual large decline and fell to 24.4 percent.Even our U-12 (Alternative Measures of Labor Under utilization) improved a tad. Why is this? Genuine improvement? Well, let's see, first we notice that the civilian labor force was reduced by 30-thousand....and a smaller denominator does what?-GoldiloxNow you just need to be unemployed for more than 12 months to be considered "permanently off the labor rolls," as evidenced by the 30K reduction in labor force - or has the BLS let slip the "real number" of US Gulf Region workers that expired in September?" It also keeps the public bulls-eye off of the serious employment issues around the nation, as foreign operating "no-bid contractors" suck up the gubmint "investment trough" for oil adventures, and foreign labor is imported to do sub-code reconstruction in the Gulf Region.One [good/bad] thing about perp hunting in Washington. The Supremes should be well practiced from their complimentary participation in "Cheney's Hunting Junkets", though we'll see if their bird hunting experiences inspire a "shotgun" approach. Goldnovice (1/6/06; 09:47:00MT - usagold.com msg#: 140160) Barrick It's been two weeks since I came across this extraordinary website, this treasure trove. There's enough in the archives for a lifetime of study. As befits my humble status as a newcomer to gold, my first ever internet post is a question. Was Barrick set up primarily to supply the Arabs with gold? If we assume that is so, then everything about the company falls into place, I mean everything. Or has the forum exhausted this topic already? Cavan Man (1/6/06; 09:42:37MT - usagold.com msg#: 140159) Randy.... I'm a customer of this firm and I merely think you've gone a bit too far--my opinion based on reading and listening for a long time. All the best...CM Goldilox (1/6/06; 09:35:29MT - usagold.com msg#: 140158) We Be Toast http://urbansurvival.com/week.htm snip:An alert reader picks up "New Tipster of the Day honors for catching the the story that China has had it with the US Dollar and is about to go elsewhere for a reserve currency. "Well George this headline caught my eye this morning. Is this retaliation for the Fed talk of slowing or stopping interest rate hikes? Or do they know they have us boxed in and just telling the world we're pullin the trigger?" Something like that, yeah. With all the corruption floating around DC these days, the arrival of Peak Oil, and such, the inscrutable folks are probably right in thinking that except for the 17 financially hip people who read this site, no one else is going to get it. Meantime, we watch gold (up) and dollars (down).-GoldiloxSee folks, TC is not the only one who thinks China's announcement is "good for gold". Lots of goodies at urbansurvival this morning. I think I'll post one more. Goldilox (1/6/06; 09:27:43MT - usagold.com msg#: 140157) HUI Watch At 306.xx, the HUI has busted through 300 with a vengence. I suspected yesterday's gold attack wasn't very committed, when HUI reponded with only a slight loss.If the web bots are on target, we have some very golden days ahead! Goldilox (1/6/06; 09:12:03MT - usagold.com msg#: 140156) Mile-High Grab @ TC and MK,Maybe CPM could hide some chocolate in its gold orders as a "surprise"? The Hoople (1/6/06; 09:02:19MT - usagold.com msg#: 140155) $12 gold move- yowsers! Seems awful quiet around here to be in the midst of such aruckus raising day at the Comex. Those shorts that yesterday thought they were so smart are getting blown up 24 hours later. It's not nice messing with Mr. Trend. Maybe a few (dozen) of those newsletter top-callers would like to once again say mea culpa to their clients. Poor Gartman, his disdain for gold bugs spiel once again proves to be a signal to buy. There must be a big move imminent to be this quiet around the chat sites. I am getting even more "exciteder". TownCrier (1/6/06; 07:28:46MT - usagold.com msg#: 140154) Investors sue Jim Rogers, firm over Refco transfers http://today.reuters.com/investing/financeArticle.aspx?type=governmentFilingsNews&storyID=URI:urn:newsml:reuters.com:20060104:MTFH50041_2006-01-04_21-50-38_N043931:1 NEW YORK, Jan 4 (Reuters) - Two investors have sued prominent money manager Jim Rogers and his management firm over the transfer of "hundreds of millions of dollars" of assets to Refco Inc., the futures and commodities broker operating under bankruptcy protection.They said the defendants improperly or negligently allowed the transfer of assets from regulated accounts to Refco's unregulated broker-dealer unit, Refco Capital Markets Ltd.The plaintiffs are seeking to hold the defendants responsible for the loss of fund assets, or in the alternative for compensatory damages.In October, the Rogers International Raw Materials Fund LP and Rogers Raw Materials Fund LP sued Refco for the immediate return of $362 million of assets.Rogers was a co-founder of the Quantum Fund with another well-known investor, George Soros.Refco filed for Chapter 11 protection from creditors last Oct. 17...Refco has said it owes creditors $16.8 billion.^---(from url)---^Some of the continuing fallout from derivatives giant, Refco, going bust this past autumn.It makes for a good cautionary tale regarding monies put into an investment account, which brings into play a degree of counterparty risk.Should something go badly anywhere along the links of the chain, you might be waiting a long time in litigation to have use of your digits (money) again.With personal holdings of physical gold, those particular worries are gone, and you'll always have ready access to your personal property which is both highly portable and highly liquid for nearly any currency anywhere on the world scene.Choose gold.R. TownCrier (1/6/06; 07:15:02MT - usagold.com msg#: 140153) Mile-high gold grab http://news.cheapflights.co.uk/flights/2006/01/milehigh_gold_g.html January 5, 2006 -- If flying wasn't already an exhilarating enough experience, passengers are now being offered a unique chance to win slabs of gold while in the air.Under a new promotion, Cathay Pacific passengers have a five per cent chance of striking gold if they buy a box of chocolates during the flight.A five-gram piece of the precious metal will be hidden in one in every twenty boxes of Goldkenn Goldbar chocolates, under the Hong Kong-based airline's new promotion....The airline, which will launch a Manchester to Hong Kong route in late March, says the promotion gels with its wider in-flight shopping drive.The airline also recently launched a new pre-flight order website, allowing passengers to pick up their favourite duty free items during flights after ordering them online.^---(from url)---^Gold takes to the friendly skies.Maybe nation-hopping with gold in hand shall become as commonplace as packing your passport and toothpaste?R. TownCrier (1/6/06; 06:51:47MT - usagold.com msg#: 140152) Cavan Man, if you weren't so busy looking for an excuse to tear me down... you might have noticed that I posted this yesterday at 7:15pm...---------------------TownCrier (1/5/06; 19:15:59MT - usagold.com msg#: 140141)China relaxing grip on dollarhttp://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh62561_2006-01-05_11-23-01_pek63223_newsmlBEIJING, Jan 5 (Reuters) - China's foreign exchange regulator said on Thursday it would abolish foreign exchange quota limits for outbound investment as one of its key tasks in 2006.It also said it planned to explore new ways of using China's foreign exchange reserves and broadening their investment scope. Most of the country's foreign exchange reserves, which hit $769 billion by end-September, are invested in U.S. Treasuries."We will abolish foreign exchange quota limits for outbound investment to give more support to companies investing overseas," the State Administration of Foreign Exchange said.The move will offer a boon to domestic firms as they seek to strike out onto the world stage and help the country to offset a rapid accumulation of foreign exchange reserves....also reiterated the government's goal of reducing China's balance of payments surplus, saying it aimed to promote a balanced international payments position.^---(from url)---^Take a moment and try to understand what this signifies that China is going to let its companies SPEND their earned dollars in the first place -- rather than having the People's Bank continue to ABSORB the dollars in exchange for renminbi.Secondly, try to reconcile to your own satisfaction how the other two goals can work in harmony; one being that China wants to "broaden the investment scope" of its vast dollar-dominated foreign exchange reserves, and the other being that China wants to promote a "balanced international payments position".Choosing gold (technically an import) is a NATURAL way to achieve a balancing of the books while at the same time sacrificing nothing with respect to the size and strength of their reserve position. In fact, with an eye to future performance of dollars vs. gold, with MTM gold they emerge all the stronger.The transition to freegold... slowly happening right before your eyes, folks.R.------------------Sorry for making this repeat, but I figure that it's better that some folks might see this news twice rather than risk having someone not see it at all.R. Cavan Man (1/6/06; 05:37:16MT - usagold.com msg#: 140151) TC:.......silly arguing and debating esoterica..... http://news.ft.com/cms/s/f39fa8e4-7e25-11da-8ef9-0000779e2340.html ......and you miss something like this in the process. 'Tis akin to Nero's fiddling Mr. TC.China signals reserves switch away from dollarBy Geoff Dyer in Shanghai and Andrew Balls in WashingtonPublished: January 5 2006 20:13 | Last updated: January 6 2006 02:43China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets. Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.In a brief statement on its website, the government's foreign exchange regulator said one of its targets for 2006 was to "improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets".It went on: "[The objective is] to improve the currency structure and asset structure of our foreign exchange reserves, and to continue to expand the investment area of reserves."We want to ensure that the use of foreign exchange reserves supports a national strategy, an open economy and the macro-economic adjustment."The announcement came from the State Administration of Foreign Exchange (Safe). It gave no more details about whether this meant a big shift in the investment strategy for Chinese reserves, which according to local press reports reached nearly $800bn at the end of last year and are expected by economists to near $1,000bn this year.The regulator also said it would end quotas on the amount of foreign currency Chinese companies can acquire to invest in overseas assets, a decision that removes a bureaucratic hurdle facing companies that plan to make international acquisitions.The statement comes at a time of growing debate in China on how the reserves are invested. Some economists have called on Beijing to use the funds to finance infrastructure investment and clean up state-owned companies, or to invest in higher-yielding assets rather than financing US borrowing.However, according to Stephen Green, economist for Standard Chartered in Shanghai, although the language was "vague", Thursday's statement was the first time Safe has publicly indicated a shift away from dollar assets."It is a subtle but clear signal that they are interested in moving away from the US dollar into other currencies, and are interested in setting up some kind of strategic commodity fund, maybe just for oil, but maybe for other commodities," he said.The Group of Seven leading industrialised economies has repeatedly called for an adjustment in global trade imbalances, including a rise in the renminbi. The US has expressed frustration that China has not allowed its currency to rise significantly after last July's 2 per cent revaluation. That saw China move from a dollar peg to managing its currency against a basket of currencies, potentially allowing the renminbi to rise against the dollar.John Snow, US Treasury secretary, speaking earlier on Thursday, repeated his call for China to allow the renminbi to rise against the dollar. "The trade deficit is influenced by lots of things, differential growth rates, differential savings rates and investment rates and so on. But clearly, getting the [Chinese currency] more appropriately valued will be helpful to the global adjustment process," he said.However, some economists believe it would be a mistake for China to shift its reserves into domestic investment or other asset classes.CONFIRMING THE FUTURE OF GOLD. NOW WE CAN ALSO CONFIRM THE STRATEGY BEHIND THE OVERBOARDING OF M3. GOOD LUCK LADS.....USAGOLD IS A GREAT SOURCE OF PHYSICAL GOLD. Lackluster (1/6/06; 05:14:48MT - usagold.com msg#: 140150) Sundeck, your previous post Sundeck, I also liked your post. Very succinct. Perhaps you should, however, add a fifth, theoretical, payment option, that is, a currency that is backed by gold that is "marked to market". I say theoretical, because I am unsure if there is such a currency presently, unlike your other four options, which already exist. Towncrier, correct me if I'm wrong, but would that not be "freegold"? ViewYesterday's Discussion.
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