Welcome to the USAGOLD Gold Discussion Archives. Looking to buy gold coins and bullion? The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets. To join the debate request a discussion password here.
The opinions posted by all guests at this forum are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of this forum shall therefore not be construed as equivalent to endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.
ARCHIVED DISCUSSION FROM 9/8/2005 All times are U.S. Mountain Time (Yesterday's Discussion.) Goldilox (9/8/05; 23:29:30MT - usagold.com msg#: 135753) Know Not Mercy! http://www.jmccanneyscience.com @ OvS,We're certainly seeing that already, but it will probably get worse.McCanney describes the "new" New Orleans as a planned IMF international city run like Singapore. Out with the Old world, in with the New (World Order)! I bet TPTB are already staking out their coastal villas based on the new definition of "Eminent Domain".He seems a lot more believable than most to me, because he describes "weather weapons" based on well known science and technology, instead of having to invent new physics and attribute it to the Japanese mob or Iranian Mullahs, neither of whom has anywhere near the resources or sophistication to "invent" a whole new branch of physics.His radio show tonight contained a good explanation of why "scalar" weapons (whatever that means), hyper-dimensional hurricanes, etc, do not grock with known physics, but he still maintains that the hurricane patterns of the last two years completely violate every previous understanding of power and path.Oh, by the way, the solar flare from yesterday is the fourth largest in 15 years of collecting data, and the X-ray and Proton counts are off the NOAA charts. Not a good day to be sun-bathing! mas (9/8/05; 21:48:48MT - usagold.com msg#: 135752) Should have guessed Pritcho, yes you are right. Just print them, Barneke style? (Who will be taking AG's place in February?).I was quite surprised to find out that they are actually going to close off the whole of NO to prevent any one from finding out? That's the clean up issue. Guess body count is something we shouldn't know? PRITCHO (9/8/05; 20:20:01MT - usagold.com msg#: 135751) I Should Have Added - - - - There is NO HOPE until & unless ordinary Americans wake up & take to the streets. Guess that'll be a long time coming. PRITCHO (9/8/05; 20:16:34MT - usagold.com msg#: 135750) Where's The Money Going To Come From ? @ mas - - Didn't you guys know? - -The Yanks have a secret weapon called "The Printing Press" AND they know better than most how to use it. Should be good for the POG ---but they also know how to manipulate the markets --and the POO -- It's become so oviously blatent -- I mean oil drops $6 over a few days at a time when at least 15% of the US oilsupply is submerged or adrift! It's such a crock & NO response from the major Media outlets. Nor for that matter from the minor outlets! OvS (9/8/05; 20:15:20MT - usagold.com msg#: 135749) My repartee met quicksand. The defeated know not mercy.A corollary for the gold pit:May the managers of the dollarand the gold"price" find a wayto make the transition to thenew International Monetary Sys.gradually. If it should degradeinto chaos, they will know notmercy. OvS mas (9/8/05; 19:47:39MT - usagold.com msg#: 135748) EuroNews Flip side of the story. Where's the money going to come from?US President George W Bush has asked Congress for an extra 52 billion dollars to help the regions devastated by Hurricane Katrina.It has wreaked havoc throughout the southern Gulf states, spanning an area half the size of France.And forecasters are predicting more storms, such as Ophelia which is nearing Florida and Nate which passed south of Bermuda on Wednesday.In New Orleans, 60 percent of which remains under water, the danger of floods has been replaced by the growing risk of fire.The hurricane is estimated to have cost the US nearly 100 billion dollars, severely affecting oil production in the Gulf, and could significantly slow down the country's economy until reconstruction starts. Goldilox (09/08/05; 17:40:22MT - usagold.com msg#: 135747) Musings on other posts @ CavanMan, Belgian, et al,1) Casey says: "This had the effect of increasing the global supply of gold, basically adding already produced (borrowed) reserves onto the production/supply side of the scales."I ask: Is this a real effect, or an analyst's perception, as it seems NONE of the CB gold sales ever actually reached the open market? One can pontificate about how it displaced other sales, but I suspect that the covert sales of CB gold were specifically targeted to a customer who would never stoop to the "open market" anyway, and the PR effect was probably secondary. Until a single buyer is identified, my guess is as good as anyone else's, but in this era of "market transparency", why is the buyer NEVER identified? It is possibly as politically charged as the 9/11 airline puts.2) Belgian submits that the differential between US and Euro fuel pump costs is significant. I have suggested for a long time that it is merely "ENRON accounting", as the lion's share of the gargantuan US budget is focused directly at maintenance of US oil dominance, i.e. 700+ bases in 130+ countries. Some will argue "other" reasons for this military proliferation, but one cannot logically remove oil from the top tier of that expensive list. US taxpayers pay for their gasoline mostly on April 15th, with pump prices appearing lower as a result.3) Imagine, if you can, a $100 Billion investment in alternative energy R&D, and the geopolitical equilibria shifts resulting from commoditizing alternative energy. Using the commoditization model of the home PC, one could easily project the typical $40K installation cost of an energy independent home to drop to the $4K range in less than ten years, with MINIMAL maintenance or grid reliance - coupled with 10-20X improvements in the technology. Most of these systems already come with 20 years warrantees, suggesting that out-of-pocket costs are entirely front-loaded (Oooh, this will irk some grid-centric folks).With all the admin's hot air about alternative energy, the Cheney-Anonymous "Energy Plan" still grants tax and research incentives to petroleum producers that are huge multiples of the allocations for all of the alternative energies inclusive, reducing their "alt energy" rant to "thermal atmospheric pollution".Maybe the real "energy wars" are about nurturing the myopic "until the last drop is gone" mentality versus creating viable "home grown" alternatives before we reach real crisis proportions.The gold-oil link seems to be strained by one-way flow of gold to oil sources. Shifts in energy mentality might ease this tension, as well. Cavan Man (09/08/05; 16:02:28MT - usagold.com msg#: 135746) Self Explanatory WHAT'S HOLDING GOLD BACK? by Doug Casey After the price of gold spiked over $850 in January of 1980, gold production increased substantially - and it stayed up, even with the steep falloff in gold prices. Production has gone from about 1,200 tonnes per year in 1980 to its current level, over 2,500 tpy. Where did all that new gold production come from? Aside from the dramatic increase in price incentive in 1980, new technologies have matured, such as heap leaching and satellite prospect identification. In addition, since the collapse of communism, many prospective areas of the world have opened to modern exploration. Another economic factor keeping the price of gold down recently has been producer hedging. This is a particularly complex part of the puzzle, but in a nutshell, when gold was falling, as it was from 1980 to 2000, many big producers, starting with Barrick, "hedged" against decreasing prices by selling large portions of their future production at substantially over the then-current prices. Since gold is a "carrying charge" market, it's usually possible to sell several years forward at a price reflecting current interest rates and storage costs. In the mid '80s, when gold was, say, $400, that meant they could sell three years out for, say, $520. When time came to deliver, the metal might actually have traded for only $350. That was a very smart thing to do - at the time. What wasn't so smart was failing to recognize when gold bottomed out and prices started rising again. The producers have started de-hedging in the last couple of years but they still have massive short position! s. By some estimates, on the order of 1,700 tonnes of gold - almost half last year's entire gold supply from all sources - is still sold forward. Obviously, gold sold forward in the last 5-7 years at prices considerably below today's is costing these companies a fortune, but the big impact on price may come from the bullion banks. Why? Because they could borrow gold from central banks for nominal interest rates (0.5 to 1.0%), sell it on the open market (believing they will be able to return it when they take delivery on futures contracts bought from hedging mines) and invest the proceeds, conservatively, to clear a 4 to 5% profit margin. This had the effect of increasing the global supply of gold, basically adding already produced (borrowed) reserves onto the production/supply side of the scales. Another purely economic factor holding the price of gold back may simply be traders selling every time gold approaches $440. Why do I say that? In part because you can see gold retreat time and time again, as it approaches $440 - $450. As Jon Nadler, a senior executive with Kitco.com explains: traders, not being long-term-oriented folks, are not waiting for gold to go to the moon. They are perfectly happy to buy in the $417 - $430 range and sell the moment they can make $20 - $30 per ounce. This doesn't really affect the balance of supply and demand, but since prices are fixed at the margins in general, and are particularly volatile in a relatively small but psychologically important market like gold (if supply hits 4,000 tonnes this year, that would only be $57 billion at $440 gold), even a modest amount of selling by traders can have a strongly negative short-term effect on prices. In addition, investor fascination with real estate is drawing capital from other investments, even undervalued ones like gold. Why did investors focus on real estate, rather than gold, after the tech bubble burst, the dollar started falling, and broader equities markets started trading sideways? I attribute it mainly to the fact that gold was in a secular bear market from 1980 to 2001. As a consequence, a whole generation of investors grew up thinking of it as an investment "dog" as well as a monetary anachronism. Largely due to the strong growth of the U.S. economy and the years of low interest rates have spawned a complacent mentality among most Americans; they expect continuous prosperity. Given the record levels of debt among individuals and the federal government, this feeling of prosperity must be a form of mass delusion. Rising interest rates are already putting the squeeze on credit card and mortgage holders with variable interest rates. That could get very ugly, very quickly. Though we are seeing the beginnings of a change in attitude, most institutional and retail investors still think putting capital in gold and other precious metals is a little loony. When the housing bubble bursts, though, I suspect things will begin to change. Stocks, bonds, and the depreciating dollar won't provide a refuge. The herd is going to head into commodities in general, and gold in particular. Gold is, after all, the crisis commodity - and, as explained in last month's edition of this newsletter, I am more convinced than ever that we're heading for a financial crisis that's going to dwarf what we saw in the '30s. As long-time readers know, I don't generally subscribe to conspiracy theories. Occam's Razor dictates that the simplest solution to a problem is likely the most correct one. And anybody who has tried to get a few friends to agree on something as simple as what movie to watch can imagine how hard it might be getting dozens of the most powerful malefactors in the world to agree on how to suppress the gold price. But I have to say that the folks at the Gold Anti-Trust Action Committee (www.gata.org) present a pretty compelling case. Central banks may not be able to control the price of gold, as was the case before 1971, but they have the motive, means and appearance of influencing it. The U.S. in particular, since its dollar has in good measure replaced gold as a reserve asset around the world, has an interest in seeing low gold prices, and a quiet gold market. Why? Because the value of the world's fiat currencies, particularly the dollar, rests mainly upon the confidence of the public. Unfortunately, confidence is not a stable foundation upon which to build the world economy. Like any attitude, confidence can change over night. Governments want to maintain confidence at all costs, and the one thing most likely to destroy it and set off a full-scale monetary panic, is a runaway gold price. Therefore, it's quite logical that they will make every effort to suppress the price of gold. How? Remember what I said about producer hedging above? The key component of GATA's claims is that the central banks are lending gold to bullion banks and still keeping the gold on their books as reserves. In these "swaps", each bar of gold essentially gets counted twice, exerting a negative pressure on the gold price when the borrowed gold gets sold on the open market. There's no question that bullion banks are selling borrowed gold - what makes this the stuff of a "conspiracy" is that GATA says the central banks are not being truthful about whether or not they are counting gold not actually in their vaults as reserves. Specifically, GATA chairman Bill Murphy says the central banks are reporting an aggregate of about 31,000 tonnes of gold held in reserve, but only have about half as much in their vaults. The amount of gold they actually have on hand may be as little as 14,000, or even 12,000 tonnes. Murphy says the IMF claims it "recommends" that swapped gold be excluded from reserve assets. However, some central banks report otherwise. For example, a footnote on the central bank of the Philippines web site contradicts the IMF's claim: "Beginning January 2000, in compliance with the requirements of the IMF's reserves and foreign currency liquidity template...gold swaps undertaken by the BSP with non-central banks shall be treated as collateralized loans. Thus, gold under the swap arrangement remains to be part of reserves..." The European Central Bank, the Bank of Finland, the German Bundesbank and the Bank of Portugal also confirmed in writing to GATA that swapped gold remains a reserve asset as per IMF regulations. So, clearly there is a disconnect here. Summarizing the GATA argument, in their own words: "GATA believes that the implications of IMF accounting procedures for reversible gold transactions are very significant. Clearly deceptive accounting, countenanced by the IMF, has allowed official sector gold to hit the market without a corresponding drawdown on the balance sheets of central banks. This has made it impossible for analysts to ascertain the exact size of official sector gold loans, swaps and deposits. The unwillingness of central banks to provide even a minimum level of transparency suggests that total gold receivables are substantially larger than the accepted industry figure of approximately 5,000 tonnes. Macroeconomist and former World Bank consultant Frank Veneroso contends that 10,000-15,000 tonnes of gold have left central bank vaults via loans, deposits and swaps." Could central bankers really be stupid enough to lend out gold to people who are selling it, in return for a measly 0.5% interest? Yes. My impression of central bankers is that most are not smart enough to buy low and sell high; they're a bunch of stumblebums from wealthy families who know how to dress well. They likely feel quite clever getting 0.5%, when before they were getting nothing. I also don't doubt the favor to the bullion banks often gets repaid with cushy jobs or consulting contracts after the bureaucrats go out into the private sector. What happens if production from Barrick and the other hedged producers (many of whom are taking a severe beating from rising costs and commitments to sell gold at below-market prices) falls off and J.P. Morgan and the other bullion banks can't replace the gold they've sold at prices they can afford to pay? It'll be a scandal of a scale that, by itself, could move gold much higher. But even if that doesn't happen, it's easy to see that the bullion banks must feel a well-deserved and thoroughly unpleasant jolt of panic every time the price of gold heads north - especially with mine strikes in South Africa, unrest in Peru and environmental activism threatening gold production in other places. If they can't replace the gold they've sold from new mine production, they'll have to get it on the open market, and that could wipe them out. And if the bullion banks go bust, the central banks will be caught with their suspenders down; they'll be forced to go public, admitting that they have less than half the gold they've been reporting in reserve. Fear of that outcome could certainly drive them to lend even more gold to the bullion banks, adding selling pressure whenever the price of gold goes up, making the hole they are digging deeper each time. Whether or not there's any deliberate price manipulation may be hard for GATA to prove. However, GATA's questions of the central bankers regarding their policies on reserves, swaps, sales, etc. are valid and deserve answers. I've made light of GATA's efforts to force disclosure in the past only because I've felt they were doomed to failure, not because I disapproved of the intent. I asked Bill Murphy how long before the bullion banks and central banks hit the wall and the whole house of cards collapses. Bill answered: "I think we're there now. I'm not sure the central banks can lend any more gold out - the scandal could break at any moment." Regards, Doug Casey Belgian (9/8/05; 15:03:51MT - usagold.com msg#: 135745) 968 - Fibonacci article Find it a bit chaotic...and you pinpointed the author's main weakness >>> The WHY questioning + EFFORTS TO COME UP WITH A PLAUSABLE ANSWER.Of course we agree (in general) with the listing of his observations. But what does it mean...a dollar exchange rate that goes with the $-POG !?What does it mean that the rise of the $-POO outrunned the USDX !?ETC...This gentlemen is not that interested (academically) in the WHY's of his observations...he wants to earn a living with selling his views on paper. He wants to make money,...now !Fair enough, evidently.Today, the EU is preparing actions (policies-?) to do more as to neutralize the effects that rising oil(fuel)prices cause. Oil goes public !Fibonacci has mentioned how the dollar has acted in relation to oil during the past 3 decades. He forgets to mention that other power blocks (oil-consumers-clients), gathering around another numeraire (€), now also wish to have a say on oil and oil-policies in concertation with the major owners of the oilreserves.The many observations of Fibo lack the analysis (The Why) of the strategic (evolving) interactions between €-$-€/$POO-€/$POG-€/$ exchange rate-etc. Quite important if one wishes to sell profitable financial advise build on a good projection (realistic gamble) into the future. One needs to be quite sure about the REAL reason for... real nature of... oils's price rise !!! Idem dito WHY oil's dollarprice remained within horizontal bounderies for almost 30 years !!! Idem dito the WHY of the very particular LT goldprice patterns in non dollar currencies (majors). Doing good observation work is only the first and easiest step of the comple analysis.I very much like the LT MSFT picture (pattern) : A perfect reproduction of 20 years political management, regulation and intervention. Simply answer the WHY question on the 3 different parts of this chart >>> exhuberance (monopolistic expansion) - crash (reality) - denial(super intervention).All under the flag of genuine "market economy" ! (mu personal cynical opinion of course).Since Fibo shows the USDX chart...I wonder what he thinks about that particular USDX=80 fenomenon ?Glad to hear that fibo makes the fundamental difference between exchange rates and purchasing power and that he elaborates on the difference between the (nominal) price of gold / oil and the purchasing power of gold and oil !!! Great. That's exactly where the new story for oil/gold and currencies is starting (has already started).Old exchange rate dominance (the regime) is going to lose versus the new purchasing power realities !!! >>> ECB : Stability and Growth and not growth for the sake of growth at any cost (FED). How does one read this fundamental difference in chart patterns that reflect the strategies ?Pffffft....And finally as you suggested...who knows...we have super cheap oil for all, when the political will manages to get gold(pricing) free !? How childishly simple. Give oil freegold and all the oil is free again to flow ! Give the chinese freegold and they produce in cooperation with the west. Let the € be the numeraire of freegold and we have a global level playing field. There is only one single party that certainly disagrees with this suggestion. Amen and bedtime. Topaz (9/8/05; 14:49:39MT - usagold.com msg#: 135744) @G'Lox. Sitting here patiently waiting for Gold OI to update ...yes a BIS reaction to the PoG spike in NY for sure ;-)Chronic late for work these last few weeks, my standard excuse is "Black-Line Fever" ...and they all nod knowingly! Goldilox (9/8/05; 14:44:38MT - usagold.com msg#: 135743) Montreux @ Topaz,One last thought. Perhaps the Montreux Jazz festival is "really rockin" this year.LOL Goldilox (9/8/05; 14:42:09MT - usagold.com msg#: 135742) Shakes http://earthquake.usgs.gov/recenteqsww/Maps/region/Europe.html @ Topaz,I noticed this 5.1 disturbance in Switzerland this morning in my daily perusal of USGS data. Now, is this related to solar imbalance, or perhaps a BIS reaction to persistantly strong POG? Goldilox (9/8/05; 14:38:42MT - usagold.com msg#: 135741) Fibonacci @ 968, Thanks much for elaborating. I saw his ideas about "oil contraction" related to supply constraints, but then, my perspective may also be polluted lately by a healthy dose of Simmons, et al.Beyond this question, it seems that your main complaints were what he chose to omit as opposed to what he said. Am I reading you correctly?-G Topaz (9/8/05; 14:31:33MT - usagold.com msg#: 135740) Shakes. http://aslwww.cr.usgs.gov/Seismic_Data/telemetry_data/map_sta_eq.shtml The Lunar "pull" is, it appears again impacting EQ stress points with some pretty unusual events.The Swiss 5.1 @ only 2k depth around the East of Lake Geneva would be an eye-opener ...Knall, any reports? USAGOLD Daily Market Report (9/8/05; 14:19:54MT - usagold.com msg#: 135739) 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.Thursday Market ExcerptsSeptember 8 (from MarketWatch) -- Strong demand and inflation fears lifted the December contract for gold futures to a six-month high Thursday.Prices eased off that lofty level, but closed above $450 an ounce for the first time in a month.The possibility of "Fed Reserve inaction on a rate increase next week is like water to the precious metals 'garden'," said Ned Schmidt, editor of the Value View Gold Report."Gold will bloom in this environment," he said.Gold for December delivery climbed to a high of $453.90 an ounce on the New York Mercantile Exchange. The contract hasn't traded that high since March 16, though it did touch a high slightly below that at $453.40 on Aug. 12.Prices closed at $450.70, up $1.70.---(see url for full news, 24-hr newswire)---- CoBra(too) (9/8/05; 13:57:36MT - usagold.com msg#: 135738) OvS Des is ma z'bled, Traummandel, Du!Sorry, for seemingly using this board for "private" vendettas, though this guy is just like N.O's toxic waste, IMHO!... and what a waste of time too - tku and see u some time again ... cb2 Belgian (9/8/05; 13:52:22MT - usagold.com msg#: 135737) News + personal interpretation India buys 43 Airbuses (2 billion) and signs Galileo (EU-GPS).This solidifies the China-EU-India triangle.Putin signs pipeline contract (gas) with Shroder. Another step closer to energy for euro. OvS (9/8/05; 12:57:13MT - usagold.com msg#: 135736) Seeker, find your way to the Erzherzog Johann Huette. CoBra(too), you misunderstood.I gave you a choice of thementioned weapons only... Butsince I am sooo reasonable (Iunderstand misunderstandings..)I'll accept your Tullamore Dewchallenge with the followingproviso:We meet at the Erzherzog JohannHuette. Be there New Year's morn'at 3am (the hut is only open Julythrough September, but Rupert willgive me his keys). Only "you" areallowed 2 (two) "seconds" (one foreach arm on the way down). To warmup, we start by downing 1(one)pintof Yukan Snakebite, followed by akeg of Tullamore Dew.Whoever's eyes first sees the risingsun's "Strahlen" (which means, who-ever is still standing) wins.If you believe me, I bought the lastknown existing "full" bottle of a"pre" 1913 Nun's Island Distillerysingle malt whisky for $182,000.-from Ken, a friend's cousin. Now, ifyou lose the duel, I'll let you buythis bottle. And to show you my gener-ocity, I'll let you buy it for only365 one ounze Philharmoniker--about anequivalent amount of Dubai's predictednew year's gold "price". Of course, ifYOU win, the "bottle" is yours"scotch free"...OvS TownCrier (9/8/05; 12:53:48MT - usagold.com msg#: 135735) Belgian, excellent To comment on your comments:"The functionality of what we used to call money, is in the process of changing. In the nearby future...... Money will become a 100% politically managed (regulated) numeraire, a unit of account. Than we don't have to rant about the mis-management of the numeraire anymore...simply because one will not see the numeraire as a saving anymore."" century of evolving goldprice-fixing-management, whilst the money-system ALSO evolved...from a savings + trade settlement utility to a fully managed unit of account.""In those early days ...we still had that Ponderosa mentality (state of mind). Now I can't yet define how we should call our state of mind. Political economy is not something farm-like (not even cowboy-esk)."My comment: On the subject of "what to call it", maybe we don't have to look much farther than this: Farmers, ranchers, even the "eskiest" cowboys on a Ponderosa all get to vote in periodic elections, right?In the same way that life on the Pondersa goes on much the same even as we, as a voting collective, shift our balance slightly back and forth vacillating between a political regime led by leftist (Democrat) or rightist (Republican) persuasions, likewise might we be able to continue raising crops and driving cattle across our Ponderosa as our monetary regime -- the politically managed numeraire -- undergoes periods in which is shifts back or forth between easing and tightening as they try to manage the numeraire price of bread in Virginia City. At the same time, the free price of gold will translate the meaning of it all in understandable language to Hop Sing's family back in China. And vice versa.R. 968 (9/8/05; 12:46:55MT - usagold.com msg#: 135734) @ Goldilox To name two parts : Do you find anything about a possible gold-euro link ? What currency does he foresee as the new oil currency ? What about a possible gold-oil link ?He says gold underperformed the dollar the last 25 years, but not WHY !!!!And : "The expansion of the global marketplace depends on cheap oil. Cheap oil ENDED in 1999. There will be a MAJOR contraction- and it already started effecting the dollar."Is it really the contraction of the marketplace that affects the dollar ????? Topaz (9/8/05; 12:31:20MT - usagold.com msg#: 135733) Well-well? http://www.nymex.com/media/delivery.pdf Hmmm!So, out of the blue we have 1003 Deliveries in Sept, a robust PoG spike to get them done, and hammertime thereafter.Maybe leftovers from Aug?If so I'd reckon on a few more skeletons lurking thereabouts ...another 19k would be good. Goldilox (9/8/05; 12:27:38MT - usagold.com msg#: 135732) Not to challenge @ 968,I wasn't concerned that it had already been posted, but your statement that you disagreed with the author intrigued me. I am quite interested in "which parts" you disagreed with.I hope you are comfortable posting these, IMHO, more relevant thoughts.Thanks again,-G 968 (9/8/05; 12:23:19MT - usagold.com msg#: 135731) @ Goldilox Sorry Goldilox, I didn't know it was already posted. I would like to hear some remarks by others on this article first.Towncrier, Belgian, Aristotle (please!!!),... what are your views on the article ? TownCrier (9/8/05; 12:21:09MT - usagold.com msg#: 135730) 9', Thanks, I'll let you know when finished with it. R. Goldilox (9/8/05; 12:11:06MT - usagold.com msg#: 135729) NOAA ISSUES SPACE WEATHER WARNING; http://www.noaanews.noaa.gov/stories2005/s2499.htm snip:Sept. 7, 2005 — Forecasters at the NOAA Space Environment Center in Boulder, Colo., Wednesday observed one of the largest solar flares on record at 1:40 p.m. EDT. The forecasters are predicting significant solar eruptions in the coming days. Agencies impacted by space weather storms may experience disruptions over the next two weeks. These include spacecraft operations, electric power systems, high frequency communications and low-frequency navigation systems.-GoldiloxJust to add a little comm confusion, and for those so inclined to believe in solar links to storm activation energies, this could be another hectic weekend. 968 (9/8/05; 12:10:50MT - usagold.com msg#: 135728) @ Towncrier No, I would like to hear your thoughts on the McCauly article. Or, did you discovered something else in the Quarterly Review ?Thanks in advance. Goldilox (9/8/05; 11:55:14MT - usagold.com msg#: 135727) Fibbonaci Article @ 968,I posted the same article from FSO earlier in the week. It looks like the same editorialists frequent all of the "regular sites".Can you elaborate on what parts you disagree with? That would add some more interesting thoughts to the mix, methinks.Thanks,-G TownCrier (9/8/05; 11:47:44MT - usagold.com msg#: 135726) 968, getting there... As moments allow, at your prior request for thoughts I'm reading through Robert McCauley's section of the Quarterly Review of international banking and financial market developments (Sept 05). Was there an additional chapter or specific area that you wanted me to take under consideration?R. TownCrier (9/8/05; 11:39:16MT - usagold.com msg#: 135725) Fed again intervenes ($18.7 billion) in open market, buys Treasuries outright Just like yesterday, the trading desk for the Federal Reserve contributed props to the bond market while concurrently injecting fresh cash to the reserves of the nation's banking system, thus enhancing the base from which the money supply may expand through additional lending/borrowing activity.To begin, the Fed pumped $13 billion through operations utilizing 14-day repurchase agreements, at an effective rate of 3.508%. It then further juiced the fed funds market with an additional $5.25 billion in liquidity through a round of overnight repos. Next, in a more significant gesture, the Fed bought inflation-tracking Treasuries outright, targeting maturities all over the spectrum from January 2007 to April 2032 while injecting $450 million to the 'permanent' expandible money supply.Money is 'easy', and one of gold's primary roles is to say so. Soon enough it will.R. 968 (9/8/05; 11:21:11MT - usagold.com msg#: 135724) Navigating the New Economy, Lesson 1: "Worth its Weight in OIL" http://321energy.com/editorials/fibonacci/fibonacci090705.html SNIPS :"The introduction of the Euro exposed a pre-existing economic vulnerability like Hurricane Katrina exposed a pre-existing physical vulnerability (lots of people crammed along a coastline). The coastline was not fundamentally safe the week before the hurricane- but only temporarily safe. The temporary absence of a trigger that reveals old weakness is not the same as fundamental strength.""The expansion of the global marketplace depends on cheap oil. Cheap oil ENDED in 1999. There will be a MAJOR contraction- and it already started effecting the dollar.""So consider that today, if you price oil in terms of gold, yen, euro, and so on, oil is still rising in purchasing power dramatically. This is not just a national fluctuation- that is, reflecting merely a drop in the dollar- but a very major change in international oil markets. Lately, oil markets are really experiencing a major shift in supply and demand- according to international prices. And, once again, the dollar contract is losing purchasing power as it is losing prominence. The dollar was still the unchallenged premier currency in the world...until 1999. But the dollar's recent all-time lows are not about the competition from the Euro, folks. That is just the immediate trigger. It's about oil. The primary issue is no longer simply that Americans use much more oil than they produce. This shortage is world-wide. Because of the extremism of the American addiction/dependency on oil, the dollar is just doing the worst of any major currency- and of course it had the most "market share" to lose! So, let's look at the value of the dollar from 2000-2002 in terms of multiple comparisons. In terms of oil, the dollar lost a LOT of value (about an 80% relative loss). In terms of EVERYTHING ELSE, the dollar still didn't do very well, but nearly not as bad as compared to oil.""If you price yen in gold, euros, US real estate or US stocks, the yen was rather flat. It was flat relative to pricing yen in dollars (outperforming) or oil (underperforming). If you price euros in gold, yen, US real estate or US stocks, the euro was rather flat. It was flat relative to pricing euro in dollars (outperfoming) or oil (underperforming). If you price US real estate in yen, gold, euros, or US stocks, the US real estate market was rather flat. It was flat relative to pricing it in dollars (outperforming) or oil (underperforming). If you price US stocks in US real estate, yen, gold, or euros, the US stock market was rather flat. It was flat relative to pricing it in dollars (outperforming) or oil (underperforming). "----------------------------------------------------------------------------------------------------------------------Although I do not completely agree with the author, a nice read to view things from another angle. USAGOLD / Centennial Precious Metals, Inc. (9/8/05; 11:17:10MT - usagold.com msg#: 135723) Especially designed for those who are taking their first step... http://www.usagold.com/gold/special/starter.html Camel (9/8/05; 10:50:41MT - usagold.com msg#: 135722) Belgian "If the Dubai gold uptake goes parabolic as to affect the goldprice too dramatically...they devalue the $-numeraire in wich they price their oil !!! Avoid to land in such a viscious circle...prématurally"Exactly. And the same holds true for the gradual shift out of the dollar to the " basket of currencies". All must be done slowly and methodically so as not to upset the existing order, devaluing their own remaining reserves, all within the the character and modus operendi that we might expect of the CB s and G 8 and whatever other alphabet soup organizations that are running the show. Like moving one person from the front to the back of a small rowboat, all must be done slowly and carefully without rocking the boat. Knallgold (9/8/05; 09:59:47MT - usagold.com msg#: 135721) POG Gold is hammered like a nail into the cage again.Somehow this fits with the recent lease rates plunge,they expected a POG surge,managed lease rates down to "free".They're up again now and more Goldloans have been dumped on the Goldmarket and POG is back to normal for Another week.450 seems a very hot level. Belgian (9/8/05; 08:14:17MT - usagold.com msg#: 135720) @Mikal Dubai, one of these very special gold places. We better take their call of $500/Oz serious. But don't try to find any reliable (reality) stat on the Dubai circulation of bullion.When they wish to see (to call for) a higher goldprice...than there are good reasons for this. Get rid of some of their petro-dollars...exchange it for lasting universal gold wealth. Not mobilize price-frozen gold to make it circulate from hand to hand. But taking gold out of the liquidity pool and forcing a pricelevel that reflects (for a very small part) the purchasing power of it...as is done with the precious black gold that BTW is only half way its real revaluation.Bear in mind that the whole Dubai exchange is explosively growing...also becoming fully independant (guess from what) and build their share of pricing power by free market practices >>> Accumulation of bullion in possession.Here (in Dubai) you have a natural process going on that is drying up the goldmetal liquidity. Also read Randy's post on the new gold rules in India...ment to help maintain the goldmetal liquidity. Because official gold cannot and does not want to provide goldmetal (for delivery) at a faster pace and more weight.The goldprice fixing (freezing) works two ways, once the gold stashes are declining faster.But Arabian oil (and Dubai gold) have to take into account that for the time being, the whole planet still lives under the $-IMS regime. If the Dubai gold uptake goes parabolic as to affect the goldprice too dramatically...they devalue the $-numeraire in wich they price their oil !!! Avoid to land in such a viscious circle...prématurally. That's the nature of their call ($500/Oz).$500 POG : $60 POO = 8,3 wich corresponds more or less with the USDX=80.Today we have $448 POG : $65 POO = 6,9 wich is an all time extreme low, unsupportable for the Dubai gold exchange. CoBra(too) (9/8/05; 07:26:50MT - usagold.com msg#: 135719) @OvS Since you leave me with the choice of weapons - very generous - I'm opting for fair sized Tullamore Dew kegs.And I'll let you decide if to drink, throw or roll 'em to also establish my own generosity. We can still hurl gold bars too ...Hic'- my preference - cb2 CoBra(too) (9/8/05; 07:20:37MT - usagold.com msg#: 135718) @Ned Just checking in to say thank you for your kind words "NED" lately. While not being a hero, just another seeker of the way individudals may find "individual" - as in best suiting -concepts to weather the upcoming financial and social storm.Regards cb2 Belgian (9/8/05; 07:19:01MT - usagold.com msg#: 135717) @ Gold Hill I'm already having an idea about the new Ponderoso (society) that is already in the make through the present many absurdistan situations. I'll do the best I can to translate this in simple terms in more than one single post :Katrina example : The monetary expansion + intervention that this disaster is going to cost...is presented these days...as "future growth" !? That's that same old idea of having a destructive war when facing severe and lasting economic dead locks. W're stuck...can't find a way out with classic management (read intervention)...let's have a destructive war...and start all over again !That's exactly how I do experience the state of mind on the AA side of the (western) globe. Euroland and the East are definitely in another state of mind as both find themselves in another (cyclic) stage of the natural evolution of things. EU and China are not yet over the hill !All this monetary expansion of the past 3 decades and the present haven't "YET" resulted in general massive price-inflation. The price-inflation that you and I are experiencing is extremely mild versus what it should already have been...if...intervention and management would have stayed on a healthy level. Wich is definitely NOT the case.W're lucky that 968 isn't posting all those speeches from official bodies (ECB/FED/imf/bis/oecd/etc). Otherwise we would realize how extremely worried all these astute observers really are. Worried about the unbelieveable levels of interventional management.Do see this period as buying time for having that new modern Ponderosa being build. A global farm where the AA domination of fiat money is in the process of being reduced.India buys 43 Airbuses and signs the Galileo (EU - GPS)contracts.There will come a new, differently oriented, IMS that will allow us to re-live those Ponderosa times. The functionality of what we used to call money, is in the process of changing. In the nearby future, w're not going to debate about infla/defla/stagfla dadayada. Money will become a 100% politically managed (regulated) numeraire, a unit of account. Than we don't have to rant about the mis-management of the numeraire anymore...simply because one will not see the numeraire as a saving anymore. And,...you already guess it perhaps...your future savings are going to be consolidated in ...GOLDMETAL WEALTH !All will immediately start to shout and yell that this is a (bad) jike and that B. is nuts.Then I'll ask them to watch the big picture again and explain WHY the goldprice MUST ABSOLUTELY REMAIN FROZEN !? Emphasis on "-MUST-". Not for a few years but actually for 3 different periods of a couple of decades. Gold-standard > (1933)Fixed goldprice > (1971) Semi Fixed goldprice...A century of evolving goldprice-fixing-management, whilst the money-system ALSO evolved...from a savings + trade settlement utility to a fully managed unit of account.In those early days ...we still had that Ponderosa mentality (state of mind). Now I can't yet define how we should call our state of mind. Political economy is not something farm-like (not even cowboy-esk).Back to the present goldprice deepfreezing that already lasts for one decade...and it is in this very same recent decade that we have a glimpse of official gold action (CBs and other institutions). NOT a coincidence dearest GH...absolutely NOT a coincidence.There are 2 (TWO) opposing (!!!) factions concerned with the actions for goldprice deepfreezing !!!The old monetarists supporting the $-IMS (without Ponderosa) and the new unit of account-ists, LESS and LESS supporting the $-IMS.Randy regulary reminds us about the evolving offer/demand situation of available bullion (goldmetal). Available means : WHO IS STILL READY TO PROVIDE GOLDMETAL...in order to provide support for the $-IMS that still needs a dollar-numeraire that is perceptively related to gold (its price and pricing). Simplier, gold (the goldprice) says...the dollar is OK, so continue to operate under the $-IMS flag.That's the "function" of the goldprice...its symbolic utility !!!Any rise (rising trend) of the goldprice THAT WOULD PROVOKE MORE GOLDMETAL UPTAKE would suffocate the dying dollar and its $-IMS !!! To avoid...AVOID...any not controlleable goldmetal uptake...there is ONLY ONE tool >>> Murderous goldprice control and permanent loss-producing management of the goldprice. Loss producing for those who continue to manifest their distrust in the $-IMS by buying gold ! Don't you dare touch gold or we burn your fingers !This period is already behind us, GH...definitely behind us !!! Think WAG...again and AGAIN up until you can grasp the entire meaning and purpose of it. And the fact that WAG-II was realized means that both factions mean real business...real change in gold-regime versus money > units of account. Currencies don't want to "remain" dollar derivatives for ever.Our job (conclusion) as individuals is simple and exiting : Once w've understood and cross checked the ongoing transition in its entirity...JUST TAKE BULLION OUT OF THIS AGING SYSTEM AND STOREIT IN PRIVATE POSSESSION FOR THE NEW SYSTEM !!!This is happening now ! The liquidity of available goldmetal, in $-IMS support, is slowly but steadily drying up. The remaining gold accumulators are those that know in wich direction things do evolve and those who are not at all intimidated by the goldprice terror !! Asians (a few billion people) are simply not aware that goldprice management even exists. The monetary guards in their states' ivory towers do know what gold means in its entire (global) context. But all these people in the East always took the right view at gold, because it was always too obvious for theml that their currencies were (still are) dollar derivatives and depreciated always faster and deeper than their $-master. So they always defended temselves with goldmetal that lived a life in their depreciating currency, regardless of the dollar. Just imagine that King dollar starts to depreciate faster than their currencies (yuan)...and a massive flight out of their dollar-savings has to go into unavailable (scarce) goldmetal. To be avoided at any cost...up until there is enough critical mass of political will on that $-opposing faction that decides to STOP all support for the "dollar-gold" regime, simply by NOT delivering the minimum of goldmetal anymore. The minimum goldmetal required to maintain enough liquidity. Shortages in liquidity always provoke hoarding with catastrophic (gold)price rises. Exactly what happened in the 1971 > 1980 decade ! That was the main gold-lesson for the users of the $-IMS ! That particular experience learned them that the $-IMS could not last for ever on the same basis. That's where the idea of freely priced gold (freegold) incorporated in another IMS, was born.It was all the above that I was thinking of when that name Ponderosa fell. I remembered those old times when some very particular fundamentals (happy ones) were completely different from now. But please, don't ask the beef-question...I don't know when w're gone move and live in the Ponderosa !?There still are goldreserves that can be brought to the liquidity needing market. Cfr. the most recent 30 tonnes of Belgian ...sorry ESoCB/BIS' gold. Bear in mind that no dollar-terminator will ever rise !!! The dollar (and its system) must and shall succomb under its own mismanagement !!! Always keep this in mind as to understand WHY things happen to gold as they do. Listen to what Trichet says and how his standpoints evolve.To stop or permanently slowing down the liquidity of goldmetal is a matter of strategy + (geo)political considerations. Don't expect any serious transparancy into this political stratego. Everything that goes public will come out of the blue and always without any possibility to place it in any context. As to have nobody asking (investigating) the WHY questions. State (System) Security...sounds almost SS.No wonder that the goldprice should stick to the USDX !!! Any decoupling of the goldprice from its money antithesis ($) is a too serious indication that freegold (free priced gold) is heading onwards ! No passera, for the time being, as explained.Now realize the importance (signal function) of the €-goldprize that jumped over a 15 year old resistance ! Bearing in mind that the €-numeraire has IMS ambitions. Don't jump on the euro. Exchange controls can be organized overnight (and most probably will happen for a certain period).More later... mikal (9/8/05; 05:45:33MT - usagold.com msg#: 135716) New derivatives exchange hopes to be "hub" starting November http://today.reuters.com/news/newsArticleSearch.aspx?storyID=118957+08-Sep-2005+RTRS&srch=gold Dubai Exchange Head Sees Gold at $500 Soon - Reuters - 09/08 Liberty Head (9/8/05; 01:42:19MT - usagold.com msg#: 135715) Understanding How The Fed Works http://www.botany.org/bsa/misc/carn.html From The Chauncy Gardner School of EconomicsThe flowers open, flies go in, the flowers shut. ViewYesterday's Discussion.
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.