USAGOLD Gold Discussion Forum Archive

1-800-869-5115
We welcome your inquiry.

USAGOLD Menu BAR

Welcome to the USAGOLD Gold Discussion Archives. 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...

(Discussion Forum Hall of Fame)

(The Gold Trail)

("Thoughts!" by ANOTHER)

The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

FORUM ARCHIVES

Select date of the archive you wish to view

Month Day Year
Archives date back to September 22, 1998

WELCOME TO THE ARCHIVES!

(View Today's Discussion) (View Previous Day's Discussion) (View Next Day's Discussion)

ARCHIVED DISCUSSION FROM 2/9/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Black Blade (2/9/06; 22:51:00MT - usagold.com msg#: 141542)
Is Recession In The Cards?
http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.html
Note that the yield curve has inverted. This has been a fairly accurate indicator of a coming recession. The 6 month bond is 16 basis points higher than the 30yr bond.

Check and Mate - Game Over!

- Black Blade

Goldilox (2/9/06; 22:49:37MT - usagold.com msg#: 141541)
The Hidden "Why" Behind Asian PHYSICAL Gold Buying
http://www.jsmineset.com/
snip:

The China Sea at this time in the financial world is more of a non subject than gold was in 1999 or the Avian Flu eighteen months ago. There is a strong probability no subject is more important to the energy equation than the disposition of the growing conflict over "who-owns-what" in the China Sea. The point is not entirely the undersea wealth being claimed by every nation in the area, but rather the potential to clog the routes of energy shipments that currently exist there. When you put heavily armed and technologically equipped killers in such close proximity, the potential for an accident starting a conflict is almost certain.

The newest trend worldwide is to name everything exactly what it is not. A prime example of this is the Patriot Act. Tell Samuel Adams or Jefferson what is in that piece of legislation and ask them if the name "Patriot" is appropriate.

Not to be outdone by the US and GB, China has joined with ASEAN. This means China has been elected by them to become the "PEACE" keeper of the China Sea. Do you really feel it is "PEACE" keeping or keeping the "PIECES" of the new mammoth gas and oil discovery away from Japan and its closest ally the USA?

-Goldilox

If USD assets are no good in the the marketplace to purchase UnoCal's Asian holdings, China MUST guarantee energy deliveries by other agreements. They will not let themselves be trapped in the box that 1940 Imperial Japan found themselves in. The Resource Wars continue to build intensity. Now, why was the largest US Navy taskforce ever assembled sent to the China Sea region in 2005? Follow the money!

Sundeck (2/9/06; 18:52:52MT - usagold.com msg#: 141540)
What a difference "sentiment" makes...
Well...look at that. POG pretty-much back where it started around $570. That looks like the "rebound" from a crowd with "positive" sentiment...

......

Consider two crowds...one which is confident in its convictions and another which is unsure and divided in its convictions.

Send a negative shock (surprise) into each crowd and what happens? Unpredictable, really, I know....but the usure/divided crowd is likely to panic and scatter; perhaps regrouping later on, having given ground. On the other hand, the confident crowd is more likely to yield a bit, but remain coherent and push back with a vengeance...perhaps gaining more "turf" than it held before...

Let's see if the prices of gold and silver settle a little (or a lot) higher than they were before...say above $580 for gold and above $10 for silver...

Quite a few of those players who sold their positions into the recent POG down-draft will have surrendered their gold to other players. To regain their positions in the short-term, they may have to buy at higher prices...

But then....they may just choose to wait and hope for another round of shenannigans...

That's the market...unpredictable...

:-)

spikedog (2/9/06; 17:04:09MT - usagold.com msg#: 141539)
Free-gold transition
Perhaps a very simplistic (crude) way of looking at the actions of the various CBs with respect to purchasing US debt is: retail stores offering loss-leaders (eg; products sold at a loss in order to entice the customer into the store, where, it is hoped, they will spend money on the higher margin merchandise as well). Ergo, the CBs make a loss-leading investment in US debt in an effort to smooth the transition to higher-margin gold!

Musings for a wonderful Thursday spike!

Spikedog

Golden Lionheart (2/9/06; 16:36:37MT - usagold.com msg#: 141538)
100kg of gold up for grabs!
My local newspaper the West Australian reports today that the Taliban is offering 100kg of gold to anyone who kills the person responsible for publishing blasphemous cartoons in Denmark.

On a more pleasant note, the 4.33gm gold coin struck during the reign of King Coenwulf in Britain in 805-810 and found by someone with a metal-detector, was bought by the British Museum for �357,832.
The coin was originally the value of 30 days wages for a skilled Anglo-Saxon worker!! Now that shows the worth of holding the physical!

USAGOLD Daily Market Report (2/9/06; 14:32:41MT - usagold.com msg#: 141537)
Page Update!
http://www.usagold.com/DailyQuotes.html
The 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 Excerpts

Gold $14 higher as investors buy the dips

February 9 (from MarketWatch) -- Gold futures closed higher Thursday, chalking up a gain of more than $14 an ounce, with strong investment and physical demand for the precious metals revived after prices drop to a three-week low in the previous session.

"This market is not close to being finished for higher prices," said John Person, president of National Futures Advisory Service.

COMEX April gold futures up $14.30 at $566.10. Prices closed at under $554 on Wednesday, the lowest since Jan. 18, after dropping by nearly $20 an ounce in Tuesday's session.

"The targets of $600 to $625 are more and more a reality and mostly justified as concerns on inflation, geopolitical pressures in the Middle East and now with rates at comfortable levels, central bankers are stuck in a rock and a hard place," said Person.

Central bankers "risk choking off economic growth by raising rates too much, but on the other hand inflation is a genuine threat," he said.

The overnight move "shows just how fast this particular market can move higher when the market is scared," said Kevin Kerr, a veteran commodities trader and commentator for MarketWatch. "Gold seems to also be rebounding from the steep over-the-cliff type of profit taking we have seen in the last two days," he said. "Funds wanted to take some cash off the table and gold was due for a correction anyway but now that a healthy cleansing has happened the market can resume its rise."

There's a "staggering amount of liquidity sitting on the sidelines waiting for precisely such a pullback," said Jon Nadler, an investment products analyst at bullion dealers Kitco.

"The market cannot and will not have a constructive foundation and framework if we do not have corrections along the way," he said. "People have not bailed out of gold completely and ... there are many who await a fresh opportunity to buy."

Action Economics said gold also benefited from fund "value buying" during the Asia session, where traders were betting that the sharp correction seen this week had run its course.

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

Goldilox (2/9/06; 14:19:50MT - usagold.com msg#: 141536)
HSA Fee
The HSA is offering a "smart card" for frequent travelers, once they pay a fee to a private security firm for security checks.

Now, who is going to monitor the security firms ability to guarantee that they keep terrorists who are willing to pay for the checks out of the system.

One more revenue source from government imposed fear, not unlike Lockheeds' $billion dollar public camera contracts.

They're not likely to make anyone "safer", but the "soldiers of fortune" are having a field day inventing new security services they can sell to Government and corporate America.

When they come out with the anti-terrorist measures for gold, I'm gonna be really suspicious that they are just gathering more information on gold ownership at our expense.

TownCrier (2/9/06; 13:36:56MT - usagold.com msg#: 141535)
Fed's Moskow-many reasons for low long-term rates
http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060209:MTFH62381_2006-02-09_19-22-15_NAT001995&related=true
CHICAGO, Feb 9 (Reuters) - There is no one answer to why long-term bond yields in the United States and globally are so low, contributing to a flat yield curve, Chicago Federal Reserve Bank President Michael Moskow said on Thursday.

"It's certainly a puzzle, it's something that no one has a precise answer to," Moskow said in response to a question after a speech.

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

No one??? Hey Moskow, try spending a day or two at the USAGOLD forum and you'd be among the few who have the answer. To clue you in VERY briefly, scroll down to msg# 141529.

R.

Goldilox (2/9/06; 13:36:06MT - usagold.com msg#: 141534)
Gold output dropped 12.8% in 2005
http://business.iafrica.com/news/887556.htm
snip:

The country's gold production in 2005 declined by 12.8 percent when compared with 2004, Statistics South Africa said on Thursday.

In the three months to December 2005 gold output fell by 8.8 percent when compared with the three months to December 2004.

Gold production in December 2005 was 3.8 percent lower than output in December 2004.

Mine output up in 2005

Mining output for 2005 increased by 2.6 percent when compared with 2004, due to a 6.1 percent increase in the production of non-gold minerals.

The total mining production for the fourth quarter of 2005, after seasonal adjustment, decreased by 3.1 percent when compared with the previous quarter.

The decrease was due to a seasonal adjusted decrease of 4.3 percent in the production of non-gold minerals during the fourth quarter of 2005 when compared with the previous quarter.

The seasonally adjusted decrease of 4.3 percent in the production of non-gold minerals was mainly due to a decrease in the production of platinum group metals (PGMs) by four percent, coal by 0.8 percent and iron ore by 0.2 percent.

-Goldilox

It looks like the alchemists are just not keeping up with demand. If the CB's are really curtailing their blue light specials, product has to come from somewhere. I ain't sellin' mine.

Flatliner (2/9/06; 13:33:33MT - usagold.com msg#: 141533)
@TownCrier
You're perspective brings new light to the entire situation. There is great value in simple gold ownership. Thank you.

TownCrier (2/9/06; 13:28:50MT - usagold.com msg#: 141532)
Flatliner, on Specie-man's pricing comments
I think you'll find more sense in them if you consider that in refence to buying and selling prices he was speaking from P.O.V. as a middleman (retailer) rather than as the buying- or selling- end user (customer).

R.

Flatliner (2/9/06; 12:32:23MT - usagold.com msg#: 141530)
@TownCrier
Thank you and I have no intention of running to a personal exhaustion (if it can be avoided).

HOOSIER GOLDBUG's comments are still rattling in my pea-size brain. One has to wonder when you see someone completely give up the ghost on a cause as to what it was that they were really thinking at the time. Thus, it has made me wonder as to the extent as to the control that is really exerted over the price of gold in the public markets. It seems that you have come to a level of confidence that helps you see a slow and steady re-valuation in the price of gold is and can be. I have been looking for clues as to how this might be done � so completely.

My current efforts have me thinking about how someone might have huge positions on both sides of the futures market and use time � both short term and long term � to weight things in their favor. In other words, can short term raids offset long term losses so as to not cause derivative style failures?

It seems like a wild off the trail concept, but it is a side excursion with little weight in light of the changing world view of gold. People's perceptions are changing, and given a little time, that will bring out the real sparkle in all precious metals. This is evident, as seen in postings like specie-man's # 141525 where it's as if fear has gripped someone and they panic into metal happily paying over-spot for piece of mind. On a very individual basis, it's as if people are waking up to see that they've been trapped and they are willing to pay anything to be freed.

Freedom will come. People are choosing it. One coin at a time, they move away from that which if freely printed and recklessly distributed. We watch and save.

TownCrier (2/9/06; 12:24:41MT - usagold.com msg#: 141529)
First 30-yr Treasury bond auction since August 2001
http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060209:MTFH61023_2006-02-09_18-18-26_NYG000128&related=true
NEW YORK, Feb 9 (Reuters) - U.S. Treasury debt prices rallied on Thursday after the first auction of 30-year bonds in more than four years garnered strong indirect bidding, even though the bid-to-cover ratio was a bit low.

...Indirect bidders, which include customers of primary dealers and foreign central banks, snagged $9.07 billion, or 64.8 percent of the deal. Historically, offshore central banks have tended to avoid longer maturities.

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

Central bankers don't mind a little 'conundrum' here and there when the the outcome of their 'unusual' behavior serves a transitionary purpose that has been duly factored into a bigger picture.

That is, keep the ailing system on its feet with cheap and simple tricks that provide the basic appearance of a dollar that's strong for the long term, meanwhile delicately working "under the radar" to accomplish non-disruptive gold redistributions as prerequisite to the inevitable transtion away from asymmetric dollar reserves toward a more economically level playing field as facilitated by a foundation of price-liberalized gold reserves.

R.

specie-man (2/9/06; 11:49:33MT - usagold.com msg#: 141528)
@contrarian - roadmap
I see you dredged up my old post from 2003 "The Fall of 2005".

It would seem that we are still somewhat on track if not on the precise schedule. One could argure that the real blastoff in precious metals prices started in the Fall of 2005, or one could argue that it hasn't really started yet.

In any event, one key is still Japan. When inflation really starts getting a grip there - look out. The Yen has been weak for over a decade now - even during times of near-deflation in Japan. Imagine how weak it will be against gold during the pending inflationary times.

Some analysts have warned that China is in for a crash landing or a maybe a soft landing, and neither would be good for commodity prices.

But my view is that China will grow it's domestic consumer markets at roughly the same rate at which it shrinks it's export markets for a net change of zero. So China will still continue to grow fast, while much of the worldwide inflation they have been absorbing in the past will instead remain in the countries of origin.

real1 (2/9/06; 11:45:55MT - usagold.com msg#: 141527)
Special risks when investing in a mining company

In addition to the usual risks involved when investing in a stock of given company like: mismanagement, corporation frauds, dilutions, Etc. Investing in a mining company carries specific additional risks:

1) Mining is depleting business, the more you mine the less reserves you have, unless you explore and find new reserves fast enough.

2) The revenues are completely dependent on the market price of the metal and the mining company is a price taker.

3) Hedging, some mining companies have sold some of their future production through the futures and derivatives market. They have sold in much lower prices, so higher metals prices do not always translate to higher revenues and higher profits.

4) Geo political risk, as the prices of metals are going up it is tempting for government to increase mining taxes. Under some circumstances mining licenses could be frozen or canceled.

The conclusions are: the price of some gold and silver mining stocks could outperform and give better appreciation then the price of gold and silver, but the risk is also higher. Be sure to do a good research before putting good money into any stock and don't place all your eggs in one basket � diversify.
If a gold or silver company has only one mine or no production at all the situation is even more risky as is the case with exploration companies.

TownCrier (2/9/06; 11:32:53MT - usagold.com msg#: 141526)
Flatliner, your question
"Does anyone know if there is any public way to determine WHO is long in the paper gold market?"

It begs this follow-up inquiry...

What would you DO with this information? Would there be a productive outcome to it?

In other words, traveling some avenues is time well spent, others might just be dead ends.

A lot of folks have chased around a lot of elaborate schemes with little else to show for it in the end other than personal exhaustion, meanwhile they ignored the workhorse gold which was right under their nose the whole time. So, does it really matter exactly which names the longs belong to? Sometimes the best epiphanies come not from acquitions of more info, but rather from clearing away the distractions.

On another note, your #141517 was an excellent presentation. Thanks.

R.

specie-man (2/9/06; 11:21:27MT - usagold.com msg#: 141525)
Checking In, US Dollar, Recent Market Action
Finally getting around to checking in ...

People have been predicting a collapse of the US Dollar for decades, ever since the height of the Vietnam war (and before). It hasn't happened. It is still a possibility, however. But more likely, in my opinion, is an episode like the late 1970s. There are a lot of parallels between 1976 and 2006. In 1980, the disaster was averted by spiking up the interest rates. Volker did it then because he COULD. The average American was not so much in debt that they couldn't tolerate (with some hardship) the much higher rates. I don't believe Bernanke has that luxury. Some analysts point to the high debt levels of today as an indication of coming deflation. I see it as a roadblock to the FED jacking up rates quickly.

The FED will take whatever path MAXIMIZES the number of people taking on debt AND SERVICING THAT DEBT. The nightmare for the FED (and for foreign Dollar debt holders) is that people will give up servicing their debt en masse. With current debt loads, raising interest rates significantly higher would put much of the debt servicing in danger. So the FED can only raise rates to moderate levels, staying well back of the true rate of inflation.

So I see a continued protracted (not overnight) shift away from the Dollar towards alternatives, such as anything tangible.
But if a catastophic shock to the geopolitical landscape occurs, the shift could be overnight - but I don't see it happening that way.

Regarding the dollar in Brazil ...

My anecdotal evidence is perhaps another part of the picture. One of the things I do as a sideline is to buy & sell coins. Mostly "collector" coins but some bullion as well - I'd like to keep some of the bullion, but can't afford to on my modest income (fortunately, we do have a nice precious metals IRA in safekeeping off-site). Anyway, in the past year, I have noticed a definite uptick in purchases from foreign buyers. Many of these buyers purchased modestly-priced items and paid for them by sending BRAND-NEW never-folded US currency in the mail (yes, the bills were real). It is interesting to contemplate how unfolded US bills are getting over to Europe and elsewhere. And now they are coming back. In the past year, I've sold things to places I never would have expected. I sold an off-center stuck (mint error) US Indian Head cent to a buyer in Taiwan. I sold coins issued by Iceland and Botswana to a buyer in mainland China. I sold a large batch of various world silver coins to a buyer in Russia.

Regarding the recent market action...

On Tuesday evening, after silver had its big drop, I sold a 10-ounce silver bar (Sunshine Mint) and the buyer was eager to get it for about $110 - even though the spot price of silver was only $9.25 at the time.

My observation is that the price of physical metal (in bar or coin form) is more stable than the paper (futures) price. When the metal prices spike upwards, buyers of physical metal usually pay a bit under spot price to cover themselves in case of a subsequent decline. When the paper price drops, buyers of physical metal offer spot or sometimes above spot prices because nobody wants to sell physical metal at the lower prices.

OvS (2/9/06; 11:04:54MT - usagold.com msg#: 141524)
Jewelry Market.
Seems to me that those
strong gold buys by
jewelry stores and
corporations might camo-
flage stealth buying by
a big accumulator(s).
After all, the common
and middle-class person
hasn't caught on to the
happenings in the gold
market, yet.
And the upper-class jew-
elry market is precious
stones and pearls.
Are there some posters
who can get us the inside
scoop?...Just a thought.

Flatliner (2/9/06; 10:36:35MT - usagold.com msg#: 141523)
deliver it to the secondary "hidden" market at a profit
Just thinking out loud. In the post below, dug out of the archives, it says that gold moved from a cheap public market to an expensive hidden market. I can't help but think that huge profits were made by someone when this occurred. At the same time, there are organizations that are in huge loss positions in the paper gold market. Could these loss positions have already been offset with previous profits?

Does anyone know if there is any public way to determine who is long in the paper gold market?

TownCrier (2/9/06; 10:25:16MT - usagold.com msg#: 141522)
Zimbabwe: Chamber of mines warns of gold depletion
http://www.andnetwork.com/app?service=direct/1/Home/$StorySummary$0.$DirectLink$2&sp=l17126
9�February�2006 -- Zimbabwe's gold reserves are fast depleting and pushing hundreds of miners out of business, the Chamber of Mines said in a letter to the government obtained by AFP today.

"With more than two million operators out there, surface gold is fast running out," Jack Murehwa, president of the mining association, said in a letter to Mines Minister Amos Midzi.

"Operators are now moving into alternative employment like farming," he said.

Last year, President Robert Mugabe said the government would seek 50 percent shareholding in all foreign-owned mines.

Murehwa said uncertainty about the legislation had stopped both potential foreign and local investors committing borrowed and equity funds towards exploration and expansion, for fear of losing both control of business and a big portion of their investment.

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

Seems to me the more relevant concern keeping shareholders at bay would be the desire not to hold a wasting asset. Nobody wants to be the owner of a mine when it reaches the point where all of the reserves are gone and all that's left for the miners to do is farming.

Such shareholders would be wise to skip the painful corporate transition and put their money directly into ConAgra shares to begin with.

And if it is truly gold that they're after, likewise, they would do better to skip the corporate monkey business and put their money straight away into the final, enduring product -- the gold metal.

R.

TownCrier (2/9/06; 10:14:28MT - usagold.com msg#: 141521)
German Wilhelm II coins...
http://www.usagold.com/webads/gold-coins.jpg
In case you are wondering how these German coins will look nestled in with the rest of your golden savings, click the URL above and you'll see the German coin elegantly coexisting in this peaceful gathering with representatives of the other popular coins.

(if you have trouble spotting it, look centrally, top of pile)

R.

USAGOLD / Centennial Precious Metals, Inc. (2/9/06; 10:03:41MT - usagold.com msg#: 141519)
February Special
http://www.usagold.com/gold/special/wilhelm2.html

February Buyers' Group

Special discounts and incentives on special coins!
German Wilhelm II (and Wilhelm I)

German 20 mark gold coin

Call and Save
1-800-869-5115 (Ext. 100)

TownCrier (2/9/06; 09:58:31MT - usagold.com msg#: 141518)
Bank of America to begin trading metals in summer
http://www.signonsandiego.com/news/business/20060208-0915-metals-markets-bofa.html
NEW YORK � Bank of America plans to launch a metals trading business to expand its existing commodities offerings with a target date set for early summer ... the company said it will have metals trading operations in both London and New York.

...Peter Merritt, who joined the financial services company in New York, will lead the team as a Managing Director and Global Head of Metals.

The No. 2 U.S. bank said it will also add a team of metals traders and marketers, including Simon Underhill, Managing Director and Marketer based in London; Simon Jackson, Principal, Commodities Sales; Alan McHugh, Principal, Commodities Sales; Mark Newson-Smith, Principal and Marketer; and Tony Shaw, Principal and Marketer.

Each of the new metals team members have between 20 and 30 years of experience in metals or commodity markets and all worked most recently on HSBC Holdings Plc's metals trading desks in London and New York.

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

Here's an interesting way to look at this. Instead of seeing this as direct news regarding the choice of metal-novice Bank of America, you could rather ponder whether there is any deeper significance that so many staff have become available from old master HSBC.

HSBC has become a prominent player on the gold custodian scene. Is it possible that it has seen beyond the myopic trader mentality?

R.

Flatliner (2/9/06; 09:48:04MT - usagold.com msg#: 141517)
@tejbear � �rate of the collapse�
If I could add just a little to the Contrarian's great repost, it would be to simply mention that if the US dollar were to not act like a reserve currency, it would probably resemble any other major currency with regards to crashing (or any other currency for that matter).

Take a look at the Ruble back to the fall of 1998. The price of gold appeared stable around 2000 ruble per ounce. Then, the �crash� hit and seemingly overnight, the price spiked to nearly 5000. In uncharted territory, over the next year it traded as high as 7000. Eight years have passed and it's now trading over 15000.

Looking back at the Real, in January 1999, seemingly overnight, the price of gold jumped from maybe 350 to nearly 600. In this last year, for those who watch, they got to see something similar in Zimbabwe. The price in the end of October jumped from maybe 12 million to about 20 million overnight and then extended that move by the end of the month to nearly 28 million. Six months later, it's trading at about 55 million.

It seems to me that in every case that I look at, the price of gold nearly doubles �overnight�. Then, there are years where the shock moves through the system and the price continues to go up at alarming rates.

But the US Dollar is slightly different. It has the luxury of being a reserve currency. Everyone holds it. Everyone uses it as the means of exchange. There seems to be orders of magnitude more US dollars in circulation (and reserve) then the other currencies listed in the above examples. What this surplus of US Dollars really means is kind of unknown in reference to a �crash.� But, the way I see it is that if there are an order of magnitude more US Dollars fighting for resources the �crash� might be an order of magnitude larger.

In the long run, if there is an overnight �crash�, the affects will be felt for years! It's not overnight riches as in a �pot of gold� for those that save without currencies, but rather a foundation upon which you get to rebuild your life. Those that hold gold will find it as precious as water in the desert for years and all will be jealous of your treasure chest.

TownCrier (2/9/06; 09:33:22MT - usagold.com msg#: 141516)
Valentine's Day is Tuesday... already??!
http://www.usagold-jewelry.com/pendants/gold.html

Call Marie and see if you still have time to pull this holiday out of the fire.

A little gold for your sweetheart... it's the gift that keeps giving.

1-800-869-5115 Extention 106

R.

TownCrier (2/9/06; 09:26:08MT - usagold.com msg#: 141515)
IMF sees strong growth for Vietnam economy
http://www.thanhniennews.com/business/?catid=2&newsid=12559
Il Houng Lee, the IMF's Senior Resident Representative in Hanoi, assured the IMF would continue to provide Vietnam more general assistance in implementing WTO-related commitments -- like drafting and reviewing new laws where it had expertise, and helping assess external balance of payments developments to ensure Vietnam was not exposed to external risks as it implemented the commitments.

"I think that Vietnam's process is already well advanced, requiring now only specific bilateral negotiations," Lee said.

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

If you can remember my news post of January 25th in which Germany's Merkel proposed new focus for the Bretton Woods institutions, here we already see signs that the IMF has indeed been evolving beyond its original monetary orientation toward more of an international trade orientation -- ostensibly in an effort to stay relevant in a world that, thanks to the eurosystem's reserve design, has now radically outgrown the usefulness of institutions solely serving the Bretton Woods legacy.

For the IMF, it seems that adaptation is the name of the game.

And back on the topic of Vietnam, elsewhere Spencer White, the chief Asian equity strategist for Merrill Lynch, has made the observation that wealth is being created at a turbo-charged rate... "Bicycles have been swapped for BMWs in the streets of Hanoi and Ho Chi Minh City."

Growth in the levels of personal wealth goes hand in hand with increases in gold ownership.

R.

contrarian (2/9/06; 09:16:03MT - usagold.com msg#: 141514)
Order of Things
Seems like a dollar disaster looms, but not immediately. Think a stock market crash first, then maybe a new war, an oil embargo, then a dollar disaster. Urban Survival seems to be right on.

Why? Because it's apparent, the Fed's main goal is saving the dollar, not the stock market, so reducing or stalling interest rate increases is not an option. They crashed the Dow before, in 2000, via repeated interest rate increases, and always react after the fact. So after the yield curve inverts and the stock market crashes, then they'll relent. But they are between a rock and a hard place. They've got to keep selling those bonds and bills. As for housing, I don't know, but I think it gets the same kick in the pants.

Goldilox (2/9/06; 09:01:43MT - usagold.com msg#: 141513)
Crashing March
http://urbansurvival.com/week.htm
snip:

And as if my own worries about March aren't enough, fractals contributor Gary Lammert reminds us that coming out of the pending collapse period may not be as swift as the 1930's were for the simple reason that energy's past its prime:

"In the background of all of these mechanistic consumer and generational long cycles of expansion and contraction and contemporary to the the US second 'Grand Fractal' is the transient 150 or so year window of a petroleum based world economy. For the US the next 140 year growth period, after this second cycle has its nonlinear end, will evolve in the shadow of oil depleted world coupled with a growing world population - tough times ahead for our children and grandchildren....Warm regards Gary"

OK: let me line 'em up.
1. Web bot context change due.
2. Iran oil bourse opens
3. Iran bombing being openly discussed for the 28th of March
4. Israel elections
5. Astrological signs are a coincident indicator
6. Elliott decline possible
7. 80 week cycle
8. Early announcements of drought impacts possible - Dust Bowl II
9. Greenspan attacking gold prices as a terror reaction
10. Extended Fed meeting announced
11. Then there's the housing problem...
12. Then there's people getting liquid to pay IRS bills...
13. Then there's the ocean currents shutting down and....

Add them all up and it's not for certain anything at all will happen. On the other hand, I wouldn't be placing big bets against it. Remember, we talked about an emotional release around February 3rd and the cartoon outrage hit that one spot on. Between now and mid March, all I'm hoping for is a little peace and quiet...

-Goldilox

Like "Gold to the Moon", there are lots of fundamentals to support upcoming economic contraction, but lots of machinations trying to avoid it, as well.

contrarian (2/9/06; 08:26:58MT - usagold.com msg#: 141512)
Dollar in Brazil
http://www.usagold.com/cpmforum/archives/2320059/default.html
I think you'll actually have both scenarios. You'll have a gradual drop in value, which we've been having, and then you'll reach the so called tipping point, which is how things seem to function in the real world, and then there will be a drastic crash, possibly overnight.

Changing of liquid to solid state, for example, happens this way. It's not perfectly gradual, but discontinuous, eventually reaching a critical point where the change suddenly happens.

Some people think, though, that the government may intervene and back the dollar again with gold in some form to stave off this extreme end point, so the tipping point won't be reached. If that happens, that would also involve confiscation of course. Perhaps unlikely? As it would involve a complete reverse course direction on attitude towards gold.

Barring that I would tend to look to history and see how all abused paper currencies end up in the toilet. And by default, gold will reign the champ.

The end of oil being traded in dollars does seem to be an eventuality.

Certainly the derivatives thing will unfold suddenly, probably unwinding within a few weeks. Once a critical point is reached, I can't imagine a lingering death for the dollar.

Well the dollar replaced the pound, but that was in a time where there was gold backing of currencies. Now is not the case, so I can easily see a drastic fall in the dollar at some point.

Here's a post from late 2005 that gives a good roadmap:
Gold Price Countdown - the Fall of 2005 A Speculation By "specie-man" - 10 November, 2003

In 1997, a mysterious individual began a series of anonymous postings on gold-related internet bulletin boards. This person, and their associate, seemed to have inside knowledge of world gold dealings. The information they relayed indicated, in a somewhat cryptic way, that there were two completely different gold markets in existence.

One of those markets is the paper gold market that we all see (COMEX) - a market who's hidden purpose is to suppress the price of gold and to generally manipulate the market in favor of commercial (short) entities, at the expense of speculative (long) entities.

The other hidden market was larger, and traded in physical gold only - at prices far higher than the paper gold market. As the theory goes, this market was the vehicle for transferring large quantities of gold to rich oil-producing countries. This arrangement was secretly agreed upon by banks and governments, so that in return, the price of oil (as measured in US dollars) would remain stable even during the economic boom years of the late 1990s. This was at the core of the so-called "strong dollar policy", which the US Government frequently mentions but never seems to be able to explain.

The two markets worked together such that the paper gold market would effectively siphon off world gold supply and production at reduced prices, and deliver it to the secondary "hidden" market at a profit. Why would the large buyers acquire gold on this hidden market, rather than buying contracts for future delivery for lower prices in the paper market ? Because it would have been impossible to purchase the desired quantities of physical metal on the limited paper market, and any attempt to do so would send the price of gold much higher on both markets, possibly destroying the paper market and ending the price suppression of gold. This would cut off their supply of relatively cheap gold. Perhaps the intentions of these major buyers are to first obtain large quantities of gold, and then go to the paper market to drive up the price.

The individuals responsible for bringing this information to light predicted that at some point, the world price of gold would be revised sharply higher (by orders of magnitude) in conjunction with a move by oil-producing nations to officially reduce their intake of US dollars and increase their intake of other currencies and gold. This monstrous gold price increase would signal the beginning of a new world order. That prediction was made around 1998, possibly to occur in the 1998-1999 time frame.

These individuals correctly predicted a badly-faltering stock market and economic malaise. But now, four years later, their predictions about a rapid gold re-pricing event have not taken place. Gold has increased in price significantly in the last four years, but the rise has been relatively gradual. Gold bugs are still waiting for that big event. Will it come and, if so, when ?

Before any major gold price upheaval (increase) can occur, certain conditions must first exist. Some have already occurred, and others are developing. Watching the progress of these conditions will be like watching a rocket launch count-down ! Those who are watching will know when their last chance will be to jump on board before lift off. Here is the count-down as towards an explosion in the price of gold (as a result of a crashing US Dollar):

12. Rapid expansion of world-wide credit (debt).

11. Stock market declines.

10. US government, state/local governments, corporations, and households go much deeper in debt.

9. US trade deficit expands relentlessly.

8. The US dollar starts declining in value relative to other world currencies.

7. Long-term interest rates increase relative to short-term interest rates, bond market declines.

6. Housing prices level-off and start declining in some areas.

5. Other (Asian) countries counter the falling US dollar by working to devalue their own currencies.

4. Gold starts rising in price relative to all major world currencies, including the Swiss Franc.

<===== WE ARE HERE !

3.
Inflation/stagflation starts taking hold in Japan, China, and other countries that have a large trade surplus with the US. Bad debts are monetized en-masse (paid off by "printing" large quantities of the local currencies). This is highly inflationary. To forestall hyper-inflation, Asian central banks will be forced to cash in some of their dollar reserves to bail out large debtors (commercial banks, etc.). This will bring an end to the "strong dollar" policies of those governments. Japan, for example, will no longer print and dump as much Yen on the market and buy dollars to weaken the Yen relative to the Dollar.

2.
Consumption in foreign (especially Asian) economies starts growing more rapidly and oil-producing nations realize that they will no longer have to rely as much on the US market to sell their oil. At that point they won't have to worry about how much oil the US consumes (or how much a barrel of oil costs in US dollars). Due to the world-wide glut of declining-value US dollars, and a revulsion for US foreign policies, some oil-producing nations begin switching their official oil pricing currency from US dollars to another currency and/or gold.

1.
The paper gold market (COMEX) shows a large increase in speculative long positions. The long speculators have been trounced many times over the years by the commercial (short) traders. This time, however, the ranks of the long speculators will grow and grow. They will hold firm in the face of the commercial shorting onslaught, as if being commanded by General Stonewall Jackson himself. The commercial shorts will break and run as people world-wide attempt to take delivery of gold. Some major financial institutions will fail as a result.

0. Blast-Off !
Foreign countries no longer have a need for the excessive amounts of US dollar assets (US Treasury bonds) that they hold because it becomes increasingly difficult to purchase oil (and/or gold) with them. Foreign governments do not buy and hold US Treasury bonds out of the goodness of their hearts. The second that they no longer have the need or ability to hold and acquire those assets, or the instant they perceive that their ability to exchange them for something useful is diminishing, they will dump them for something else. A world-wide "crash" in the US dollar will result, leading to a world-wide revulsion of anything and everything US dollar, much higher US interest rates, a severe case of hyper-"stagflation", and higher prices for all tangible assets. The derivative pyramid will crumble. The US dollar will become the "laughing stock" of world currencies - akin to some of the weak currencies of the Central American and South American regions. All this occurs just as the first wave of American "baby doomers" are scheduled to retire. Life will go on in the US and it won't be all bad, but it will be very different and difficult.

Right now, the countdown is at 3 and counting. Many of these events have been (and will be) occurring concurrently. What is still lacking is significant world-wide wage inflation (but world-wide commodity prices are now escalating). When you hear the phrase "wages are increasing to keep up with inflation", you will know that the time is very close. Current indications are that the final prerequisites for a blast-off in the gold price are forming. Hints of inflation in Japan, commodities, and elsewhere are starting to appear, as is talk about doing something about the bad debts in Japan, and bad debts rapidly increasing in China. The US Federal Reserve will aggressively fight any significant downturns in real estate prices. They will do anything, even drop cash from helicopters, to prevent consumers from defaulting on their mortgages en masse. The alternative is just to catastrophic.

The COMEX open interest in gold is now increasing. Battles between the commercials (short) and the speculators (long) have usually ended in favor of the commercial traders. This time, it will end in a stalemate - a moral victory for the longs. The day when the longs totally rout the commercial shorts is coming fairly soon.

History is riddled with unfulfilled predictions of gold's price soaring (and collapsing). Gold is heating up now. But realistically, how long might it be before the price explodes rapidly upwards in an economic upheaval of epic proportions ? That is hard to say. The old saying definitely applies here: "markets always do WHAT they are supposed to, but never WHEN they are supposed to". Such drastic economic realignments are always fought against by governments, and they always take longer than expected.

Should all the current COMEX longs hold firm and a quantity of them demand physical delivery, then the countdown could go to blast-off immediately. Other "wild-card" events (war, terrorist attack, major California earthquake, etc.) could ignite the rocket as well. The countdown process started in the mid 1990s and it should last about ten years. The closer the countdown gets to zero, the faster it will tick. Gold will continue to increase in price during the remainder of the countdown. ! Lacking any unexpected triggers, the countdown will finish during the Fall of 2005.

tejbear (2/9/06; 06:48:42MT - usagold.com msg#: 141511)
Contrarian
Dollar in Brazil

What is your read on the rate of the collapse of the dollar. From what I have read, in one extreme, Paul Volker expects the "crash" in less than one month. However, Stephen Roach expects it to be spread over 3 to 5 years. I guess I lean towards Paul as Warren Buffet is way concerned about the house of derivatives collapsing and the derivatives could be gone in a few weeks.

Thanks,
The Bear

OvS (2/9/06; 00:37:25MT - usagold.com msg#: 141510)
Correction.
Of course I meant 2005.

OvS (2/9/06; 00:35:40MT - usagold.com msg#: 141509)
Shermag.
When I said I disagree
I meant that I disagree
that his audiences should
ask for their money back.
People in the highest
political echelons do
"favors" and when retired,
give speeches and the
honorarium is a form of
payback. It doesn't really
matter so much what they
have to say.
A.G., for his two last
"speeches" received 25,000
dollars more than he got
paid in salary for all of
2006...And, of course, you
are right when you think
that he uses these speeches
to whitewash reality...
On the other hand, these
and other more contemptible
practices are even worse
anywhere else in the world.

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.

usagold logo
P.O. Box 460009
Denver, Colorado 80246-0009

1-800-869-5115 (US)
00-800-8720-8720 (EU)

303-399-6759 (Fax)

admin@usagold.com

Office Hours
6:00am - 5:00pm
(U.S. Mountain Time)
Monday - Friday

American Numismatic Association
Member since 1975

Industry Council for Tangible Assets

USAGOLD Centennial Precious Metals is a BBB Accredited Business. Click for the BBB Business Review of this Gold, Silver & Platinum Dealers in Denver CO

Zero Complaints

Thursday May 24
website support: sitemaster@usagold.com
Site Map - Privacy- Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved