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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.

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ARCHIVED DISCUSSION FROM 6/9/2006
All times are U.S. Mountain Time

(Yesterday's Discussion.)

The Invisible Hand (6/9/06; 20:38:34MT - usagold.com msg#: 145149)
The Invisible Hand and the Cataract POG movement
Topaz,

Sensory adaptation is the tendency of sensory receptor cells to become less sensitive when they are stimulated repeatedly by a tumbling Price of Gold (POG) amid market fundamentals which say the POG should be rising.

Sensory adaptation keeps the body from reacting to normal background stimuli.

It is this effect which allows us to wear clothes without being constantly aware of them.

Caratract is an opacity which develops in the crystalline lens of the eye or in its envelop.

Cataract seems to be a problem whereby the lens cannot focus because it cannot change its shape.

Do we realists, aka goldbugs, bend our lenses in Another way than normal people?

Are we waiting for the cataract surgery to display to others what will happen?

http://www.medi-learn.de/extern/augenklinik/grauerstar.htm
Zu Beginn der Operation wird die vordere Linsenkapsel eingeschnitten und mit der Pinzette aus dem Auge gezogen. Anschließend werden Kern und Rinde der Linse entfernt, so daß nur die intakte hintere Linsenkapsel und seitliche Teile der vorderen zurückbleiben. Sie formen einen nach vorne offenen schlaffen "Kapselsack". Jetzt kann der Operateur die Kunstlinse einsetzen und ihre Bügel im Kapselsack verankern. Die Intraokular-Linse hat somit ihren sicheren Halt in der hinteren Augenkammer.

Google translates as follows:
At the beginning of the operation the front lens cap is cut and pulled with the tweezers from the eye. Subsequently, core and crust of the lens are removed, so that only the intact rear lens cap and lateral parts of the front stay. They form a forward open flabby "cap bag". Now the operating surgeon can use the art lens and embody their handles in the cap bag. The Intraokular lens has thus its safe stop in the rear eye chamber.

Are we safely sitting in the golden eye chamber, watching?

Pythagoras compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for TRUTH.
http://www.uofaweb.ualberta.ca/philosophy/nav04.cfm?nav04=38830&nav03=12617&nav02=12335&nav01=12326

The spectator also needs cataract-free eyes to see the TRUTH.

Anyone knows whether in order to "insert" the artificial lens, the ophthalmologist goes under the cornea inside the pupil behind the iris? Or is there away to reach the invisible parts of the eye, i.e. the lens, through the back? Through one of eye chambers?

TownCrier (6/9/06; 17:25:30MT - usagold.com msg#: 145148)
Zimbabwe Inflation, Highest In World, Approaches 1,200%
http://www.voanews.com/english/Africa/Zimbabwe/2006-06-09-voa53.cfm
Consumer inflation in Zimbabwe over the past 12 months hit 1,193% in May, said the country's Central Statistical Office on Friday, following 1,042% in April. Zimbabwe continued to have the highest current level of inflation in the world.

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

This as much as anything points to the reason physical gold is the world's paramount savings vehicle. The purchasing power of paper alternatives can evaporate in the blink of a bad administration.

R.

USAGOLD Daily Market Report (6/9/06; 17:13:44MT - usagold.com msg#: 145147)
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.

FRIDAY Market Excerpts

June 9 (from Reuters) -- U.S. gold futures settled lower on Friday, giving up the strong gains that held for much of the session as profit takers bailed out late, wary of carrying yellow metal positions over the weekend, traders said. With gold sentiment split and getting pulled by disparate factors, traders said some players who may like gold over the longer term, fear getting hit in the near term.

"It was profit taking, but part of if it is because of the perceived weakness in gold right now. There's a lot of split on sentiment. So, I think a lot of people don't want to go home long over a weekend," a dealer said.

COMEX August gold futures settled $1.0 lower at $612.80.

It recovered from steep losses on Thursday to trade with strong gains throughout most of Friday's session, only to fall from its highs as the day was wrapping up. It traded in a range from $608 to $622 per ounce.

"(Higher) oil helped gold earlier. Gold is still an international commodity. We believe the dollar is weak relatively and world economies are weak and so we are going to see a lot of investing going into the world gold market," a New York bullion dealer said.

He said his gold desk looks for support to hold at $600 an ounce, followed by a return to higher prices.

"Gold is where people will go for a safe-haven play. There is a lot of depth to the gold market right now," he said.

Higher oil prices had already inspired buying overnight. Oil rose above $71 a barrel on Friday as violance continued in Iraq, dashing hopes that the death of a top al Qaeda leader would turn the tide for the country's struggling oil industry.

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

spotlight (6/9/06; 16:58:29MT - usagold.com msg#: 145146)
Topaz/ Spot Gold
Topaz
Thank you for the information. That was my belief. I needed confirmation and I thank you for it.

Now, such being the case, what the paper market may be doing is supplying the Russian and Chinese (as well as other central banks, financial institutions as well as individuals) with an opportunity to purchase physical gold at bargain basement prices.

If such knowledgeable persons such as James Turk are correct, and there is a shortage of available gold, with the billions of surplus dollars in such countries reserves, and their stated desire to substantially increase their reserves, I do not believe it would be too far fetched to come to the conclusion that a highly unexpected event could shock and confuse the markets. The event would manifest itself in that, as the price of gold drops, suddenly there is no more physical gold available to fill commercial users orders. At the same time it is learned that the above mentioned central banks have substantially increased their gold reserves. Those individuals who had figured on cashing their gold stocks, at some point, to buy physical, find that they have waited a day too long.

Western central banks, in view of the the Russian and Chinese overtures, would be stupid to sell their gold.
I wouldn't be surprised if they canceled the Washington agreement in favor of holding on to whatever they have left, some time soon...



melda laure (6/9/06; 16:40:05MT - usagold.com msg#: 145144)
Big sale: get some pomp and circumspence
Hmm.... big sale! Just in time for graduation presents!!! And given the silliness that passes for economic education, you might include a book like "creature from jekyll island" or something in that line, Kiyosake's rich dad poor dad is a bit more modern, (over-emphasis on real-estate but it was published in late 99 so cant complain...)

When the price goes up the investors get giddy.
When the price goes down the SHOPPERS get giddy.



TownCrier (6/9/06; 16:28:07MT - usagold.com msg#: 145143)
spotlight, gold prices
When it comes to satifying the need for metal in industrial plating or jewelry fabrication, there is no faking it -- no way to satisfy the demand without a corresponding impact upon the available supply of real metal.

However, when the driving motive for the having of gold is to serve a more financial purpose, such as protecting oneself against the loss of purchasing power that routinely afflicts the world's conventional monetary units (pesos, lira, dollars, euro, yen), the bullion banking sector of the financial system has been fiendishly clever at devising a myriad selection of derivative (paper) products to offer instead. Gold futures and options, unallocated gold deposit accounts (gold pools), and gold ETFs being prime among them. Mining shares, too, play a role in diverting some of the less focused demand.

As a result, there are many multiples of "tonnage" (in the unlimited form of paper supply) that acts as a price suppressant due to its very existance. Otherwise, much of this financially-oriented demand would have no other recourse but to make their impact felt (along with the industrialists and jewelers) through their corresponding demand upon the limited supply of real metal.

Bottom line: by and large, the market price for gold has been made artificially low as a result of artificial supply to feed into the financially-motivated demand. Unfortunately for those being duped by paper gold equivalents, they are getting no more than they are paying for; this would be revealed clearly in the time of a financial shock.

But fortunately for those of us who are not so easily duped and brushed aside, when we buy our physical gold coins and bullion in the prevailing environment, we are getting the FULL benefits of real gold AT THE SAME LOW PRICE LEVELS as being dictated by the market in inferior, artificial paper gold.

Buy with understanding, and buy confidently.

R.

Flatliner (6/9/06; 16:17:28MT - usagold.com msg#: 145142)
@spotlight
If I could add to Topaz's humble statement, as long as physical gold can be acquired with the use of futures, futures will set the price of gold. Even if physical is completely withheld from the futures market, the market will continue to set the price as long as there are speculators in the field. Even if the speculators leave, the Fed has a vested interest in making the dollar strong giving them incentive to play both buyer and seller.

The conclusion that I've come to is that the future markets will set the price until there is a public demand for gold from a giant or collection of giants. That will only happen in a crisis.


Topaz (6/9/06; 16:03:17MT - usagold.com msg#: 145141)
previous post errata.

This works OK as long as you and I can ring MK and secure a Physical Gold order based on Spot ...and "TODAY" we can! (implying that TOMORROW wa may not be able to)


Topaz (6/9/06; 15:53:56MT - usagold.com msg#: 145140)
@spotlight.
I'd like to offer my take if I may, FWIW: -

Spot is determined by ...and exclusively by, Paper Trading.
The Black Line is a derivative of either Comex Futures trading or LBMA or Tocom etc.
The London "FIX" (am/pm) was a credible benchmarking tool until it was revealed LBMA Paper/Physical ratios were in the region of 98/2.
This works OK as long as you and I can ring MK and secure a Physical Gold order based on Spot ...and we can!
I don't have the experience of fronting up to an LBMA member and demanding 10Tons at Spot.
Somehow, I don't think I'd be as warmly received as I would procuring 10 Oz's from USAGold CPM.

Physical Gold in Quantity only becomes a problem when it leaves the System. Whilst it's churning around "in" the system it matters not (generally) who's name is on it as the "possessor" makes the rules ...not the nominal owner.
It might be said that our recently experienced all-currency PoG run-up was a reaction to the Iranian relocation and current price action is an attempted return to the Dollar/Gold status-quo ...I don't think so though.


Hope this helps.

Topaz (6/9/06; 15:02:56MT - usagold.com msg#: 145139)
Hmmm!
http://www.freebuck.com/today.shtml
It becomes apparent, even to those of us who don't see every move the market makes as manipulation, that the Invisible Hand was surely afoot today.

The downdraft in Gold is taking it's toll on Bug enthusiasm ...don't fret Bugs, 100+ Tons of Comex Gold for delivery guarantees fireworks by month end imo.

spotlight (6/9/06; 14:53:41MT - usagold.com msg#: 145138)
24 hour Spot gold chart
Anyone:
Is the 24 hour spot gold chart influenced by paper gold transactions, or does it reflect strictly physical gold transactions?

TownCrier (6/9/06; 12:44:45MT - usagold.com msg#: 145137)
Titan, "freegold" also...
I forgot to tie into my response the meaning of "freegold". That was the term coined by FOA/TrailGuide in response to Aristotle's pricing discussions and consequential repudiation of any fixed monetary gold standard. Freegold is the paradigm in which the national monetary authorities (the way ahead is being spearheaded by Euroland, but anyone can implement the practice just as Russia has since January 2006) recognize that naturally rising gold can be their powerful ally, and upon adopting MTM accounting, their official vested interest now becomes counter to the adversarial pricing mechanism being delivered by the commercial bullion banking system.

It shouldn't take too much thought to conclude how this ultimately will shake out. After a brief period of digging in their heels and fighting for their lives. the commercial banks will realize how exposed they are from the vulnerabilities of their bullion banking divisions without the CB's standing ever-ready to backstop their liquidity gaps.

Newfound freedom from the old practice of papering over the pricing mechanism is the meaning behind "freegold" -- emphasis on fair value determined by a physical-based markerplace.

Randy

TownCrier (6/9/06; 12:15:26MT - usagold.com msg#: 145136)
Titan, MTM...
Mark-to-Market is the accounting practice in which an asset's book value is periodically readjusted to remain in line with actual market value.

The US Treasury (and Fed System) holds/monetizes all of its gold at an anachronistic book value of $42/ounce --effectively frozen in time back in the early 1970's.

By contrast, the ECB on a quarterly basis revalues its reserve assets based on the prevailing "fair" market price of the day.

And on the topic of "fair" market value (i.e., the pricing mechanism) there have been reams of discussion here at the Forum and on The Gold Trail regarding the current derivative-based mechanism versus what would truly be deemed fair or proper.

For a world-class education, treat yourself to a weekend of rigorous reading at The Gold Trail (see links atop this page) and at the Hall of Fame (see link to the far right of the "Post a New Message" link).

Be sure to share your thoughts as you progress through the pages.

R.

Titan (6/9/06; 12:00:20MT - usagold.com msg#: 145135)
What does "MTM" mean?
Trying to keep up with all the great discussions here, and I see the term "MTM" quite often, but no one has defined it.

What does that stand for?

Also, I'm interested in knowing more about "freegold"... what's that all about? Is there an archived discussion about it or a pointer elsewhere that I could read to learn what that means?

Thank you!


TownCrier (6/9/06; 11:39:23MT - usagold.com msg#: 145134)
Market Talk...
http://framehosting.dowjonesnews.com/sample/samplestory.asp?StoryID=2006060816560000&Take=1
June 08, Dow Jones Newswires

12:28 (Dow Jones) A broker in the S&P futures pit says he doesn't want to "step in front of this falling knife," describing the continuing equity free fall...

12:50 (Dow Jones) There's no price concession before the 10-year T-note auction, scheduled at the top of the hour. Many times, prices move lower to generate buying interest. This time, "demand for quality" could help the sale, but buyers will have to buy the notes at their highs, a market source says...

12:23 (Dow Jones) Shares of Peruvian copper miner Southern Copper (PCU) in NY sharply lower following a downgrade by Citigroup to hold from buy. PCU down 7.6% to $74.58. The downgrade was due to strikes in parent company Grupo Mexico mines and a move towards heightened risk aversion...

12:14 (Dow Jones) Emerging markets shares in NY widen losses as day progresses, feeling the pinch from heightened concerns about interest-rate increases following a string of hikes by central banks in several countries...

11:54 (Dow Jones) Brazil's benchmark Ibovespa stocks index falls sharply in early afternoon trading, extending early losses. Worldwide concerns blamed on rising interest rates after India, South Africa, South Korea and Denmark raise rates...

11:50 (Dow Jones) Speculative selling has left gold on the defensive in Comex trading, a dealer says. Catalysts include a stronger dollar and weaker crude oil... [Small wonder. Open positions in paper gold does little to facilitate risk avoidance]

11:31 (Dow Jones) The decline in U.S. stocks has been far deeper than what would be expected on a normal pullback, Morgan Stanley says. Holding the May lows is important, and any break of the 1247 level on the S&P 500 "would likely cause acceleration toward the lower border of the SPX's intermediate-term trend channel (SPX-1230) with further support at 1209-1219," firm writes. S&P broke through 1240 decisively after 11 a.m., and is indeed heading lower...

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

So much papery buzz, and so little docking space available at the ultimate tangible safe harbor.

Unfortunately, for peace of mind you can't call ahead for reservations (as those, too, are merely promises on paper). To be sure, the physical gold market works on the egalitarian principle of "first come, first served".

R.

USAGOLD / Centennial Precious Metals, Inc. (6/9/06; 10:34:02MT - usagold.com msg#: 145133)
At the end of the day, having an eye on AVAILABILITY is every bit as important as watching the PRICE!

June Buyers' Group [Only 70 COINS REMAIN in this Discount Offer!] Uncirculated $20 Liberties at amazing prices! Call and Save 1-800-869-5115 (Ext. 100)

contrarian (6/9/06; 00:33:09MT - usagold.com msg#: 145132)
Summer Doldrums
http://www.usagold.com/analysis/doldrums.html
With the exception of 2004 (with the dollar repatriation act), the gold price trend since 2000 is unmistakeable. Every the end year price appreciation over the summer price increases, last year being more than 20% increase from the summer price. Therefore I will predict this year will hold true, and will be a plus 30% increase by the end of year, which would take gold to approx $900. Sit tight!



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