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ARCHIVED DISCUSSION FROM 6/8/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Armageddon (6/8/06; 20:27:05MT - usagold.com msg#: 145131)
@Druid - Federal Reserve Question
TO: Druid

In your previous post if I understand it correctly the Federal Reserve since it is a private bank will trade in the market in various stocks, bonds, derivatives, etc in order to "take" part of the trillions of dollars already out there in the financial system currently owned by other banks, hedge funds etc and then use this money to pay down the federal budget and trade deficits? Hmmm. If that is the case then I believe it would be a very risky strategy. That would be like the LTCM hedge fund blowup before where they potentially owed trilions of dollars if they hadn't been bailed out with Fed help. If the Fed looses big on a bet then they will have to print perhaps trillions more dollars to the winners potentially igniting hyperinflation. However, if they generally win all their bets the federal deficits might become manageable for a time but since no real growth would be happening in America deflation would result. I remember a french bank releasing an investment recommendation saying that the U.S. economy would be on the borderline between deflation and hyperinflation. At first I didn't understand how you could be on the borderline between deflation and hyperinflation because these are opposites. I think now I am closer to understanding this conclusion.


Druid (6/8/06; 19:16:41MT - usagold.com msg#: 145130)
WILL PAULSON SAVE THE DOLLAR?
http://www.financialsense.com/fsu/editorials/merk/2006/0608.html


"IOn May 30, 2006, Henry "Hank" Paulson was nominated to succeed John Snow as Treasury Secretary. During John Snow's reign the dollar lost 18% versus the euro and 46% when measured against the price of gold.(*) Can and will Paulson stop or reverse the fall of the dollar?

Paulson is the outgoing Chairman and CEO of Goldman Sachs. Paulson has a trading background; the investment bank's trading unit has become its most profitable division under his leadership. Paulson is known as someone who does not let himself be pushed around; whereas Snow and his predecessor Paul O’Neill had little authority, except to promote the Administration's policies, it is widely expected that Paulson has only accepted the job after being promised that he will be an active participant in shaping policies.

Most commentators believe that convincing Paulson to accept the nomination has been one of the best moves of the Administration. Is it enough to cure the deficits? Let us examine how Paulson could influence a couple of key parameters that put the dollar most at risk. We focus on the current account deficit, which amounted to over $800 billion, or about 7% of Gross Domestic Product (GDP) in 2005; foreigners need to finance the current account deficit by buying more than 2 billion dollars worth of US denominated assets every single day (please also see our recent discussion on The Current Account Deficit Matters). Key ways to alleviate the pressure on the current account deficit include increasing domestic savings, lowering domestic consumption, increasing foreign consumption or increasing foreign investments in the US."


Druid: Good read. Interesting background and a perfect fit. Here's Druid's take. We're well past the mundane flat earth mid 20th century solutions of trying to somehow correct these tremendous imbalances with tax and spending cuts etc...and the varsity level team knows this. Enter Paulson with his trading background. Yes, like GM, GE and every other company which has strayed away from what they intially intended to produce and sell, they eventually saw the light and evolved into defacto hedge funds, so to has the Uncle.

Now when you view it from this perspective, an 800 billion dollar trade deficit isn't so menacing after all, compared to the TRILLIONS out in the various markets to be had. Now if I were a part of the team, I would be doing a lot of sub-contracting out to make sure our team had the proper marching orders. The difficulty here would be, once the you haul in the booty, where does one house a rather huge number and what kind of spin are we going to come up with to correlate with slowly paying down the trade deficit to make it appear like the physical economy is really improving. Yes, it's a tall order, but one I'm sure our new Treasury Sect. is up too. Savvy?

USAGOLD Daily Market Report (6/8/06; 16:22:27MT - usagold.com msg#: 145129)
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The Daily Gold Market Report has been updated.

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THURSDAY Market Excerpts

June 8 (from MarketWatch) -- Gold futures closed at an eight-week low Thursday as the dollar rallied on continued expectations that the Federal Reserve will raise interest rates and on news of the death of Abu Musab al-Zarqawi, the leader of al-Qaida in Iraq. Al-Zarqawi's death in a Baghdad-area air strike sent oil futures below $70 a barrel and gave the dollar an early boost.

But the greenback was further helped by a sharp selloff in Asian markets overnight, as well as by comments from European Central Bank President Jean-Claude Trichet that turned out less hawkish than expected.

COMEX August gold futures gave up $18.80 at $613.80, marking its lowest finish since April 13 as losses extended into a fourth day.

Kevin Kerr, trader and editor of Global Resources Trader, a newsletter published by MarketWatch, said the market's initial reaction to the al-Zarqawi news may be short-lived.

The news "seems to have sent a message that oil production in Iraq may increase and that the death also somehow is good for the dollar," he said. "As we have seen in the past though, if anything the killing may lead to more attacks and even worse violence, having exactly the opposite effect." The Jordanian-born al-Zarqawi is alleged to be the mastermind behind much of the violence in the country, including suicide bombings, kidnappings and beheadings.

"I think the elation on the news this morning is short-sighted and that it may only lead to another event similar to what we saw in London last July and in turn, could send the dollar reeling and gold back up toward $700," said Kerr.

Terrorists staged a series of deadly attacks on public transit in London last summer.

Kitco's investment products analyst Jon Nadler, agreed. "The current gold sell-off is not only a possible misreading of future outcomes (arising out of this killing), but also a sign that traders (read funds) are focusing strictly on the news of the day and that 'profit myopia' may have set in," he said.

Gold's decline has also come amid a sharp increase in expectations the Federal Reserve will continue to raise interest rates, following a series of hawkish comments from Chairman Ben Bernanke and other senior officials. His Monday remarks have pushed the dollar higher for the past three sessions and upset stocks and commodity markets.

Adding to the pressure, the European Central Bank, South Korea and India all raised interest rates on Thursday, while Turkey raised its benchmark rate on Wednesday.

---(see url for full news, 24-hr newswire)---

Goldilox (6/8/06; 14:54:35MT - usagold.com msg#: 145128)
PPT
http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y&Interval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10
The "President's Working Commitee" is working overtime today, with 165 point recovery in the DOW and multiple gaps up in the USDX.

USAGOLD / Centennial Precious Metals, Inc. (6/8/06; 14:33:08MT - usagold.com msg#: 145127)
June Buyers' Group

June Buyers' Group Uncirculated $20 Liberties at amazing prices! Call and Save 1-800-869-5115 (Ext. 100)

TownCrier (6/8/06; 14:31:20MT - usagold.com msg#: 145126)
Gold producers see good times ahead
http://yahoo.reuters.com/business/newsArticle.aspx?type=ousiv&storyid=2006-06-08T183048Z_01_N08393952_RTRUKOC_0_US-MINERALS-SUMMIT-PRICES.xml&WTmodLoc=HybArt-R3-MostViewedBiz-3
NEW YORK (Reuters) - Some of the froth has been blown off the top of the gold market, but that has not rattled the big producers...

"We're living in very different times," Newmont Mining Corp.'s Chief Executive Wayne Murdy told the Reuters Global Mining and Steel Summit in New York this week.

"We think there's still a long way left in this run."

Bobby Godsell, the chief executive of the world's No. 3 gold producer, AngloGold Ashanti Ltd. said think that gold is going to hold its ground as an alternative store of value for institutions. ... It would seem to me that a prudent person would continue to make a bet on gold for part of their wealth."

The head of Kinross Gold Corp. also says this market "feels a little different this time."

"It feels like there's some stronger legs under the buy side."

"Despite the recent correction we are firmly of the belief that the secular upward trend remains in place. It is quite clear that at the current moment there is a technical correction going on," Ian Cockerill, Goldfields' chief executive, told the summit.

"I think it may go dramatically past $800 but I don't think it's going to go below $500 for a long long time," Goldcorp Inc.'s chief executive, Ian Telfe said at the summit.

Although some gold executives were reticent about saying how high gold prices would go, they agreed that bullion was unlikely to fall to $253 an ounce, a level reached in the summer of 1999 in New York.

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

It is patently ridiculous to bring up the $253 price level. The might as well be talking about the old $20.67 price level of the early 1900's.

Speaking of which, have you looked into the June Buyers' Group?

R.

TownCrier (6/8/06; 14:31:20MT - usagold.com msg#: 145125)
Gold producers see good times ahead
http://yahoo.reuters.com/business/newsArticle.aspx?type=ousiv&storyid=2006-06-08T183048Z_01_N08393952_RTRUKOC_0_US-MINERALS-SUMMIT-PRICES.xml&WTmodLoc=HybArt-R3-MostViewedBiz-3
NEW YORK (Reuters) - Some of the froth has been blown off the top of the gold market, but that has not rattled the big producers...

"We're living in very different times," Newmont Mining Corp.'s Chief Executive Wayne Murdy told the Reuters Global Mining and Steel Summit in New York this week.

"We think there's still a long way left in this run."

Bobby Godsell, the chief executive of the world's No. 3 gold producer, AngloGold Ashanti Ltd. said think that gold is going to hold its ground as an alternative store of value for institutions. ... It would seem to me that a prudent person would continue to make a bet on gold for part of their wealth."

The head of Kinross Gold Corp. also says this market "feels a little different this time."

"It feels like there's some stronger legs under the buy side."

"Despite the recent correction we are firmly of the belief that the secular upward trend remains in place. It is quite clear that at the current moment there is a technical correction going on," Ian Cockerill, Goldfields' chief executive, told the summit.

"I think it may go dramatically past $800 but I don't think it's going to go below $500 for a long long time," Goldcorp Inc.'s chief executive, Ian Telfe said at the summit.

Although some gold executives were reticent about saying how high gold prices would go, they agreed that bullion was unlikely to fall to $253 an ounce, a level reached in the summer of 1999 in New York.

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

It is patently ridiculous to bring up the $253 price level. The might as well be talking about the old $20.67 price level of the early 1900's.

Speaking of which, have you looked into the June Buyers' Group?

R.

TownCrier (6/8/06; 12:37:00MT - usagold.com msg#: 145124)
Gold tumbles but 'up trend remains'
http://business.iafrica.com/news/511880.htm
8 Jun 2006 -- The spot price of gold on Thursday traded near to its six-week low of $616.15 a troy ounce, achieved on Wednesday.

"As we move closer to half-year end, most of the financial institutions are squaring their books and taking profits. The market is very quiet," a European trader said.

Gold rose 'too fast'

"Going into the European summer, gold is likely to trade between $605/oz and $650/oz. The up trend in gold is not broken and the consolidation in gold is good as the metal rose too fast, too quick," he added.

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

If he's got the trading range right ($605-650), we're now at the bargain end of it. As our report shows, June and July have been a prime time to buy. All it takes is a little exercise of independent resolve to separate yourself from the herd mentality being reflected in the typical mid-year price sag.

Why not call USAGOLD-Centennial today... TOLL FREE 1-800-869-5115

R.

TownCrier (6/8/06; 12:23:13MT - usagold.com msg#: 145123)
Chief Economist Martin Murenbeeld: The Bullish Case for Gold (Is There Another Case?)
http://www.resourceinvestor.com/pebble.asp?relid=20494
8 Jun 2006 --

...This discussion will outline seven factors that underlie our bullish gold price outlook for 2006 and 2007. There are several bearish factors of a short-term nature that should however also be mentioned.

My "bullish" arguments are...

1. The dollar must decline further

2. Dollar reserves are "excessive"

3. Gold is "cheap"

4. Monetary reflation is coming

5. Supply is limited

6. Demand developments are "revolutionary"

7. The geopolitical environment favors gold


...the U.S. trade balance certainly suggests that the dollar is overvalued. The balance has mushroomed to nearly $800 billion (12-month running total) in February. The implication is that the dollar's exchange value is uncompetitive at its level of recent years.

...Asian central banks now hold a collective $2400 billion in foreign exchange reserves. This level is "excessive" according to many observers including some central bankers! Asian central banks only hold 1932 tonnes of gold however, meaning only about 1.5% of their total reserves is in gold. Many observers and analysts have suggested that some of these dollar reserves should be diversified into gold.

Indeed, were China and Japan to adopt the ECB's 15% rule for gold reserves then China would have to buy 6890 tonnes of gold and Japan 6850 tonnes of gold. (These tonnages vary with the precise price of gold and the level of foreign exchange reserves.) I think these Asian central banks should purchase the gold the CBGA signatories want to sell; it would represent no more than a "petty cash" outlay to these banks!

OPEC is another "natural" buyer of gold! OPEC needs to diversify its surplus "Petro-dollars". OPEC current account balances are in huge surplus again on the back of higher oil prices. The last time OPEC had significant "Petro-Dollar" surpluses, in 1980, gold spiked to an all time high...

To bring its gold reserves up to 15% of total reserves OPEC would need to purchase some 50 million ounces, which is equal to $33bn, or about 480 million barrels of oil. This would not appear to be a terrible hardship now that OPEC's FX reserves exceed $200 billion again.

^---(see url for Martin's full commentary)---^

R.

TownCrier (6/8/06; 11:51:59MT - usagold.com msg#: 145122)
HEADLINE: NYSE imposes trading collars amid broad sell-off
NEW YORK, June 8 (Reuters) - The New York Stock Exchange said on Thursday that it instituted trading curbs at 11:31 a.m. after U.S. stocks plunged, with traders worried about rising global interest rates and inflation.

The NYSE Composite Index was down 2 percent to 163 points at 11:42 a.m...

-------------

While we have trading collars on stocks, there is new trading freedom (no limits)for gold.

Looking into the future, one shall emerge brighter (and shinier) than the other.

R.

TownCrier (6/8/06; 11:42:08MT - usagold.com msg#: 145121)
Russian central bank cuts dlr share of FX reserves
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060608:MTFH46754_2006-06-08_15-29-27_L08183718&type=comktNews&rpc=44
ST PETERSBURG, Russia, June 8 (Reuters) - The Russian central bank said on Thursday it had cut the share of dollars in its reserves to 50 percent and announced a pause in its efforts to curb inflation by allowing the rouble to rise.

Central bank chairman Sergei Ignatyev said Russia now held 40 percent of its $247 billion gold and forex reserves -- the world's fourth-largest -- in euros with the rest in sterling and yen.

The new structure is more in line with the proposed currency allocation of Russia's $71.5 billion budget stabilisation fund, which is kept in roubles but will soon be converted into 45 percent U.S. dollars, 45 percent euros and 10 percent sterling.

[Randy note: Recall my previous post on this... that the stabilization fund will skim this pile of foreign currency from atop the reserve holdings of the Russian central bank, notably leaving the CB with all of its gold in-place (which since January of this year is now marked-to-market!) to do the future heavy lifting.]

Russian gold and forex reserves have grown by 36 percent so far this year.

"We should probably not expect any more surprises from the central bank before the end of summer," said Raiffeisen Bank dealer Artyom Fedorko.

[hmmm...]

A global sell-off in emerging markets wiped over a third off Russia's RTS stock index in May...

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

Does Russia like it's new MTM paradigm? In March's reporting, its 390 tonnes provided $6.88 billion in value on the asset side of its balance sheet.

As of its latest June reporting, the same quantity of gold is now providing over $7.89 billion of the reserve value.

Those CBs who have gold along with an understanding of the latent potential residing in the MTM paradigm certainly have their primary eye on the economic stability of their OWN currency, and they're happy to know that the value of the (reserve) dollar is becoming less and less a concern to them.

MTM "freegold" is an empowerment to put your focus on your own affairs.

R.

Goldilox (6/8/06; 11:22:22MT - usagold.com msg#: 145120)
DOW 10810
Better dust off those DOW 10K hats. Looks like they're about to be recycled once again.

DOW 2000 = 10200 = 42 oz gold (pre-911)
DOW 2005 = 10200 = 23 oz gold (July 2005, gold at $440)
DOW 2006 = 10800 = 17 oz gold (May peak, gold at $730 was 15:1)

My, what a solid economic "recovery" the FED and banksters are delivering.

TownCrier (6/8/06; 10:38:13MT - usagold.com msg#: 145119)
Can they each not see beyond the tip of their nose?
http://www.usagold.com/analysis/doldrums.html
The aggressive sellers in the gold market today seem to be reacting in celebration of the termination of al Qaeda's top leader in Iraq, Abu Musab al-Zarqawi.

Even the Swiss franc took a beating today.

Apparently they deem that everything that was previously weighing on the dollar's utility and international desirability as a reserve asset (U.S. govt and trade deficits) is now fixed, and that the future strength of the dollar is assured.

We should be sure to kindly say to them, "Thanks for being so singularly near-sighted and naive -- we all appreciate your personal contribution to gold's "summer doldrum" opportunities (see link, charts) for the rest of us."

R.

Knallgold (6/8/06; 10:14:28MT - usagold.com msg#: 145118)
the bold spike slingshot
At this stage,if you make Gold that cheap in all currencies,I'm beginning to wonder!

Armageddon (6/8/06; 09:13:03MT - usagold.com msg#: 145117)
Crap is about to hit the fan - Fed Official Says
I think the Fed is realizing the crap is about to hit the fan in a matter of months and they will have a hard time staying clean. :)

1. Massive Offshoring of American Jobs and decimation of
America's industry and high tech services has destroyed the rich American consumer base:
Kohn says "at a time of rapid change in the U.S. and global economies."

2. Derivatives, dangerous mortgage financing with adjustable rate mortgages that will cause massive stock market collapses and a housing colapse.
Article says "He also said financial innovations posed a challenge to efforts to maintain sound banking and financial systems.."


----------------------------------
Kohn: The Fed faces many challenges
Fed governor and vice chairman nominee Donald Kohn told a Senate committee that the Fed faces a challenge keeping inflation in control at a time of rapid change in the economy.
June 8, 2006: 10:23 AM EDT

WASHINGTON (Reuters) - Federal Reserve Board Governor Donald Kohn said on Thursday rapid economic change posed a big challenge to the Fed in its efforts to keep inflation under wraps and employment strong.

In testimony prepared for the Senate Banking Committee at a hearing on his nomination to be vice chairman at the U.S. central bank, Kohn did not delve into the outlook for the U.S. economy or interest-rate policy.

He said he was honored to have been tapped by President George W. Bush for a four-year term as the Fed's No. 2 and said he thought his "long and wide experience" at the central bank allowed him to make a valuable contribution.

"The Federal Reserve faces considerable challenges today in meeting the responsibilities you have given us," Kohn told the panel. He said the challenges extended to the Fed's efforts to foster price stability and maximum employment "at a time of rapid change in the U.S. and global economies."

He also said financial innovations posed a challenge to efforts to maintain sound banking and financial systems, as well as to protect and educate consumers
------------------------------------

Druid (6/8/06; 09:07:10MT - usagold.com msg#: 145116)
Rough Markets

Druid: Nikkei down over 16% in the last two months. European equities under immense selling pressure. The CB's must be winning the interest rate battle that the hedgies bet against. In a word "brutal".

Goldilox (6/8/06; 09:02:23MT - usagold.com msg#: 145115)
Gold tumbles $10 as dollar rallies
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9163C77B%2D19E9%2D4860%2D82FA%2D53DD56C1A519%7D&siteid=bigcharts&dist=news
snip:

NEW YORK (MarketWatch) -- Gold futures tumbled $10 an ounce early Thursday as the dollar rallied on continued rate hike expectations and news of the death of Abu Musab al-Zarqawi, the leader of al-Qaida in Iraq, in a Baghdad air strike.

The announcement by Iraqi Prime Minister Nouri al-Maliki sent oil futures below $70 a barrel and sent the dollar higher. But the greenback really took off following less hawkish than expected comments from European Central Bank President Jean-Claude Trichet.


-Goldilox

Like the death of a media-hyped civil war leader is gonna slow the flow of 1st world weapons to ANY of their "regular customers". Come on, "Sell them Hell, Ollie" hisself is on-site directing both the sales and the media response! Remember, it required a George I Presidential Pardon to keep his "Wal-Mart of illicit weapons and drugs" from becoming front-page Congessional testimony 20 years ago.

Sure, Ollie is in Iraq "only as a CNN correspondent"! Yeh, uh-huh. And Halliburton is there to build bridges and schools. How dumb they trust us to be.

Sorry, I ain't buyin' this particular spin. In a country experiencing the chaos of full-blown occupation, there are hundreds of "Hydra heads" regrown when one is cut off. This has NOTHING to do with PoG, no matter how deperate they are for the sheeple to believe it.

TPTB are getting VERY desperate for "excuses" recently.

All while George Ure gives us the following caviat from a remake of old Byrds' lyrics:

To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven

A vote to be bought, a vote to sell
A vote to miss, voters to hell
A good plan to kill, a crime to hide
A time to laugh, a jury to lie to

To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven

A time to suck up, a time to pretend
A time to sell out, a time for cash
A time to lie in the end
A time for cover stories together


To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven


From: www.urbansurvival.com


Druid (6/8/06; 07:45:17MT - usagold.com msg#: 145114)
Knallgold (6/8/06; 01:17:16MT - usagold.com msg#: 145112)

Druid: It might be a leap but I would guess that Venezuela, Bolovia, Brazil and, oh yes, Argentina are buying very discretely.

Knallgold (6/8/06; 01:32:16MT - usagold.com msg#: 145113)
IOB
http://www.upi.com/Energy/view.php?StoryID=20060605-121956-6188r
In $?Let the $ take the flow?And then bid for Gold?



"Iranian Oil Bourse nearly ready to open

TEHRAN, June 5 (UPI) -- The Iranian Oil Bourse is in its final stages, Iran's Fars news agency reported Monday.

According to the Fars report, the board of directors of the International Bourse Co., which is charged with establishing the bourse, will review the final draft of the articles of association of the Iranian bourse this week.

The International Bourse Co. was registered last month, with an initial capital of $2,000, and is charged with setting up the Iranian Oil Bourse on Kish Island. The IBC is owned by the National Iranian Oil Co., which has an 80 percent stake, and by with Kish Free Zone Organization and the Mostaz'afan and Janbazan Foundation, each of which hold 10 percent stakes.

Once the IBC finalize the draft, the articles of association will be sent to the body in charge of securities for review.

The bourse will be established in phases; following discussions of the first phase, rules and bylaws involving the establishment, running, equipping and opening of the bourse will be negotiated."

Knallgold (6/8/06; 01:17:16MT - usagold.com msg#: 145112)
MK/the Iranian issue,968
Below is a post of Scarab from the other castle,it probably summarizes this probably very well.

But I'd like to make a clarification first on 968's repeated "MTM for CB Goldreserves is the key" as I myself have played it down before as just a irrelevant bookkeeping issue.While the latter is true if viewed isolated,we all agree on that the Trail is all about the road to FreeGold so we should put this into Another perspective.

I do see the "Gold MTM" as a flag put up by the CB's "here,we are in the pro-Gold coalition and its our ultimate goal to bring Gold back into the financial architecture,to let it play its proper role as anchor and the only true wealth asset and we will treat it wisely!".Of course they won't say "we go to the Gold Wealth Standard!" as this would cause the instant explosion in price.Yes,MTM is merely a sign,like those occasional (in Switzerland Golden) metalplates reassuring you're still on the right trail.MTM your Gold does nowhere make FreeGold,but FreeGold needs necessarily the Gold MTM.

It helps you to keep on walking and be assured not to being lost.Its hard to see any trail at all here as there are no footsteps in sight,but you can stand inmidst a giants footstep and overlook it.Of course the details of the walk to the peak are still printed by those far ahead.Yes, there are many trees,flowers and swamps on the sides,its not fata morganas,but its secondary.Surely,it explains for example why the paperGold price has risen so fast at this stage in time'so here is Scarabs post on one of these political happenings:

"Good points. As to your question of why isn't the gold price continuing to rise... I noted in earlier reading that the Iranians have temporarily backed off on their current purchases since their buying was uncovered.

The timing of their pullback from buying heavily alongside the London Metals Exchange on the brink of implosion seems to have coincided with the US escalation in anti-Iranian rhetoric.

Coincidence? I think not <G>.

The anti-nuclear/Iran rhetoric never really had me convinced, nor has anything that emanates from DC in the past 6 years. Anything that spews through standard media channels must always be crossed examined or at least second guessed with some healthy skepticism.

In this particular recent scenario, the nuclear projects in Iran just happen to have been running in parallel with the establishment of the new Oil bourse and this is what I think it was all about.

The Iraqi's were also talking of establishing a similar market trading in Euro's just prior to the US invasion. And in that case it was WMD's, so this is the same script all over again. I am kind of amazed at the shallowness and lack of subtlety in the propaganda, as the script was practically identical.

Therefore, I consider it quite likely that the Iranian issue was all about the $ and Oil.

Something that also supports my thinking is the fact that the recent talks actually include the US providing the Iranians with certain nuclear technologies!! So again, we have to look a little more carefully to understand what has really been going on.

My take on this is that the Iranian buying was driving the Gold price up, or at least one of the major drivers on this rally. The US were and always have been more concerned about the Oil and the $ and the recent 'talks' are being driven by the need to maintain relative stability in the markets.

Alongside all of this, the LME, Iran and the escalation thereof we had the IMF coming in to save the shorts bacon, buy selling some of their gold into the market timing perfectly with the recent POG peak.

Furthermore, there has also been recent publicity exposing the double-counting of gold reserves and the inability to cover the leasing and swapping in any kind of short-term time frame.

To summarize. The lid has been blown on the gold price rigging scams. Iran as a single nation was able to force the system to the brink of imposion, and the US was willing to go to war over the matter.

Despite years of "strong dollar" rhetoric, the PTB are extremely concerned about the US$, and they know it is in jeapordy. Every time a scenario arises that threatens an untimely demise of the US$ the talk of war begins immediately.

Iran is just one nation, Russia is establishing its Rouble based markets as we speak, and China is considering quadroupling its gold reserves.

Those two nations are not such easy pushovers, and they also have the potential to damage the $ every bit if not more so than any middle-eastern nation."

Topaz (6/8/06; 01:09:32MT - usagold.com msg#: 145111)
SM's
http://www.freebuck.com/world.shtml
A wee bit of a headwind in Stockville wot? With already some Zombies loose in Asia today and Dow futures suggesting rot continueum, it seems like a perfect day for a Limit-Up Gold move ...or 2 Limit-Ups ...or pick your own!

Topaz (6/8/06; 01:08:53MT - usagold.com msg#: 145110)
SM's
http://www.freebuck.com/world.shtml
A wee bit of a headwind in Stockville wot? With already some Zombies loose in Asia today and Dow futures suggesting rot continueum, it seems like a perfect day for a Limit-Up Gold move ...or 2 Limit-Ups ...or pick your own!

GOLD FINGER (6/8/06; 01:08:53MT - usagold.com msg#: 145109)
HERE WE SIT......
Mining costs are up.

Inflation is going forward.

Economies slowing and worried.

Stocks are down.

The dollar is fragile and getting more so.

Investors are panicked.

TRILLIONS AND RISING INDEBTEDNESS.

Population Soars

Plagues and Pandemics.

Countries distrust each other.

Wars and no end insight.

DID I MENTION INFLATION?

A loaf of bread 3 bucks.

SO NOW WHAT? Wait for GOLD to plummet for a DEAL?

I do not see many more DEALS in the very near FUTURE!

Goldilox (6/8/06; 00:36:00MT - usagold.com msg#: 145108)
$600 gold
Using the $2100 figure as the inflation adjsuted eqivalent of $850, $600 computes out to $1575, but that is using "hedonically modified" inflation factors.

I wonder how that relates to Sinclair's $1650?



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