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Gold -- Sharefin, 07:35:12 12/05/02 Thu

Barrick hedge underlines gold as money

Murenbeeld has outlined why and how Barrick's hedge book works, making it a ton of money and allowing it to tactically pressure its competitors. Landis has taken the negative view, probing for Barrick's weak spot. Both views are valid and the market benefits by having them aired and debated, so long as one is not shouted down with sub-rational hysteria and baseless accusations.

Within that debate, all the hedging companies have steadily been increasing their disclosure. However, there is no reason to expect the companies to surrender their intellectual capital in a way that allows the hedge books to be fully modelled. At that point their usefulness is moot.

At the same time, too little attention has been focused on companies that have claimed to be hedge free. Every single one of the gold companies hedge in one form or another; it is just that what Barrick does is so much bigger and more visible. Also, companies that have “closed their hedge books” have created an illusion that the liabilities have been entirely dissolved. That is not the case; most times it is an agreement to pay off the hedge book in dollars rather than gold. The companies are hedging against a depreciating dollar and sentiment supports them.

Gold -- Sharefin, 07:25:09 12/05/02 Thu

Bob Chapman

Pakistan and Malaysia are in direct conflict with the IMF and World Bank. Pakistan has decreed that within 12 months an interest-free monetary system will be adopted. We believe that soon the gold dinar will be used throughout the entire Muslim world for international trade. In the process we expect the elitists to launch all kinds of problems on Malaysia, including terrorist attacks.

Central banks are lending gold, accepting the credit risk, and receiving no compensation. That sort of business conduct currently means they are lending gold to suppress the price.

Desperate people do desperate things. Control of the gold market by the gold manipulation Cartel will soon be over. Fiat money is about to die an ignoble death. The dollar is in the process of collapsing, as the FED creates trillions more and that will be followed by a stampede out of dollar denominated investments. Historically deflation has been fought over and over again by inflation and it's never worked. The FED now has us believing it will. We'll bet on history. We are already in deflation as we have explained for months that is why the economy can't and will not respond to inflationary stimulus. That stimulus only makes the dollar weaker and gold more attractive. While this proceeds we have one scandal after another. The latest, which we wrote about some time ago, is the National Century Financial fraud. This is the next Enron. Guess who were on the company's board? Yes, you guessed it, two bankers from JP Morgan Chase. One was even on the audit committee and Morgan was trustee on one of their funding vehicles. All we can say is some due diligence. This is just another nail in Morgan's coffin.

Mark your calendars, things political, economic, technical, fundamental will all come together by mid-December for an explosion in gold and silver prices and shares. The dollar and the US stock market will slide, taking other markets with it. Hold fast to our recommendations and add positions. We don't think Iraq will comply, and on December 10th or thereabout, the war should begin and America will experience more terrorism.

We have yet to see an operating attitude and mission change at the World Gold Council, thus it will still be called the World Gold Fantasy Council. Here are their latest figures, which we question. Year-on-year gold demand was 7.5% lower in the third quarter. Net retail investment tonnage was off 32.4% year-on-year. This was distorted by major buying right after 9/11. Indian demand was off 8% in the third quarter and it was off 44% year-on-year. US jewelry demand was up 3%.

Gold -- Sharefin, 07:23:04 12/05/02 Thu

Three S. Fla. stores said to bilk gold buyers

Eight jewelry stores across the state -- including three in South Florida -- have been charged by Florida law enforcement officials with lying about the gold content of their items.

The South Florida stores named in the complaint are Golden Bay Jewelers, located in the Swap Shop in Fort Lauderdale, Golden Way, at Miami's Mall of the Americas, and S.B. Jewelry, located at the 7th Avenue Flea Market in Miami.

Also named were Watches Plus, located in the Tallahassee Mall, and four stores located in Flea World in Sanford: Big Daddy's Gold & Silver Mine, Infinity Trading, Universal Jewelry and YB Jewelry.

Gold -- Sharefin, 07:19:40 12/05/02 Thu

'Dubai the City that Cares' pushes gold sales to 100 million Dhs within 9 days in Ramadan

Sales of Gold and Jewelry Group witnessed a noticeable increase during the last two weeks, and is expected to increase even more during the second half of the holy month of Ramadan.

Gold -- Sharefin, 07:17:52 12/05/02 Thu

Gold miners see explorers as industry's salvation

Mining executives and gold investors are nursing hopes that bullion prices will resume their 2002 rise.

If gold's $318-an-ounce price doesn't kick into a higher gear, many in the industry will have to park their growth strategies and enter into cost-cutting mergers and partnerships.

"If the gold price stays at $315, there will be a challenge for everyone but the lowest-cost producers,"

"The majors are in a bind," says K. Brent Cook, a geologist and exploration analyst for Global Resource Investments Ltd. in Carlsbad, Calif. "Companies like Newmont and Barrick and Placer Dome have to replace reserves, but they're not doing any exploration."

Gold prices must rise above their tight trading range - and soon. If they don't, mining companies of all types may be forced to close existing operations that are unprofitable.

"Very little exploration is taking place, and for the third year in a row South African production has declined," said Ferdi Dippenaar, an executive with South Africa's Harmony Gold Mining, which just gained a New York Stock Exchange listing.

Fiat -- Sharefin, 18:23:20 12/03/02 Tue

Leon Levy Says Sell on Strength

Age can turn a man bearish. For the greater part of the past half-century Wall Street financier Leon Levy has been an optimist. Levy believed that the U.S. economy would, through a succession of business cycles, reignite and spark the higher profits that are the fuel of rising share prices.

Today, at 77, worn but wealthy and still active as an investor, he is more pessimistic about the U.S. economy and stock market than ever before in his adult life. "The outlook for profits is disappointing," Levy says. "It's very hard to tell how bad the economy will be. Still I feel it will be worse than any time since World War II."

"Nothing is in short supply. I keep asking that question of everyone. And they have no answers." He rattles off consumer products in excess--"autos, fiber optic cable, computers, cell phones, trucks, airplanes, steel, even food."

Nothing except AU/AG.....^o-o^...

Fiat vs Gold -- Sharefin, 18:19:14 12/03/02 Tue

Buying: Gold or Gold Stocks?

The real issue is tomorrow, we realize. Importantly Gold is undervalued. Fair value is about US$505, well above today's price. Valuation is an important leading indicator of markets. Valuation does not make a market go up or down, but indicates that conditions are ripe for a revaluation to occur. Essentially valuation tells us that today's price for Gold is still attractive and not expensive. Regardless of whatever backing and filling occurs, this Gold market is going up over time.

Now some might like to take issue with our estimate of fair value and the long-term target of US$1,260. The work behind these numbers is certainly more reasonable than that which went into the making of the "Dow 36000" forecast. Doubters do not other us for most were those that held on through the NASDAQ reaching over 5000 and then crashing. Criticism of bullish investors in Gold and Silver by those that have lost billions of dollars in equities may be the one of the more positive factors for Gold and Silver.

One of the great problems for an investor develops when a major trend in some area is identified. Most such major trends do not allow for direct investment. We must participate in these shifts through the stock market. That is not the case with Gold. A number of easy methods exist to gain exposure to Gold. Given that reality investors should not limit themselves to Gold stocks but rather own Gold stocks only after they have a foundation built in the metal itself. After building an ownership position in Gold an investor then can go to other strategies, from stocks to long dated call options.

Fiat vs Gold -- Sharefin, 18:07:03 12/03/02 Tue

The $3.5 Trillion Dollar Sure Thing

We in the gold community have a sticky decision to make. There is legislation presently in process, which would prevent a meltdown of the over-the-counter derivatives as it pertains to the granting entities, thereby removing from the financial perpetrators the risk of their miscalculated deeds or misdeeds. After all the legalese and flowered words are removed, what this bill intends is simple. It would prevent auditors, attorneys and bankruptcy judges from securing the assets of the profitable legs (offsetting transactions) of a derivative spread and protecting under Chapter 11 those seeking to collect from the losing side (offsetting transaction). The only way these computer falsehoods (OTC derivatives) can go bust is if the transactions are split apart in bankruptcy proceedings (the profitable side seen as money and the loss side bankrupt), as would be the present effect of the now standing laws concerning bankruptcy. The new law would make the netting of the profit and loss to zero in the transaction in case of financial failure by the grantor.

The real sin in this situation is that the law is akin to a giant erasure that will run through the majority of 74 trillion dollars of transactions that stand now as special performance requirements that in truth cannot perform. The constructors of these will walk away with all their commissions and spread profits intact. It will be the largest pork belly bill ever granted for anyone in US history, particularly now for the banking and investment industry. It is a gift of no less than $3.5 trillion in revenue that these transactions have produced over the past 12 years of their ascendancy.

On the pro side of this legislation, no one in their right mind, myself included, wants to experience the downfall of this mountain of worthless paper. Its economic, social and political impact is simply too awful to consider.

Gold's Greatest Risk Is A Violent Run Up To Unsustainable Levels in a Short Cover

The only event that can ruin gold's ascent back into the MONETARY SYSTEM would be a collapse of the now $290,000,000,000 of gold derivatives (figure derived from latest reported number by the IMF & BIS adjusted for the present price of gold versus POG @ time of report). Such a collapse would result under present law in a short cover that would take the POG to extraordinary levels. That short cover and resulting POG would destroy the statement of the Prime Minister and Finance Minister of Malaysia (one in the same person) who said that “the price of gold is harder to manipulate than Asian currencies.” This is the cornerstone fundamental basis for the advent of the Malaysian Gold Dinar. As such it is an excellent example of why wild action in gold is undesirable to the gold bull. This is a long-term gold bull market which stands not only on the 5 Basic Fundamental Elements, but also, and even more, on the Remonetization of gold. Gold re-entry into the monetary system will be via the Gold Cover Clause and the New Islamic Currency now developing out of the Malaysian Gold Dinar. I predict a gold convertible Islamic currency by 2005. This new currency, which is not the present form of the Gold Dinar, will mark its point of conception as the advent of this measure of inter-Islamic Nation trading with a gold settlement mechanism. The fact that the Gold Dinar, even as proposed, now breaks the IMF rules means absolutely nothing and will prevent absolutely nothing.

Email Chatter -- Sharefin, 08:23:23 12/03/02 Tue

The mint is out of gold, and there will be no more 2002 American Gold
Eagles made. Supplies are on hand, but prices will go up in relation to spot
till January 1st, in order to slow consumption. No problem with Krugerrands,
Maple Leafs, or silver eagles. The mint has purchased over 4 million ounces of
gold for 2003 issues. - Don

Giovanni -- Sharefin, 05:55:12 12/03/02 Tue

Looking at these inflation adjusted charts you can see that we've only just begun the move.

Fiat -- Sharefin, 05:52:09 12/03/02 Tue

World's Largest Debtor (U.S.) Pledges To Pay You Back In Cheaper Dollars

In effect, this is what one of the rookie members of the Federal Reserve Board, Ben Bernanke, announced to the world on November 21. He said that the Fed had the tools and the talent, to borrow a line from that cinema classic, "Ghostbusters," to print unlimited supplies of U.S. dollars. So, fear not deflation. The Fed has implicitly pledged, to its dying breath, that it will crank up the currency printing presses to prevent it.

Fiat -- Sharefin, 03:45:24 12/02/02 Mon

Helicopter Money Or The Road To Weimar?

GREENSPAN: Well, first of all, there's a general view that as the Federal Funds Rate gets closer and closer to zero that at zero we are out of business. That is not the case. We have a whole set of Treasury bills, bonds, and notes that go out a very long number of years which are yielding -- if we were down to zero would still be yielding quite significant interest rate levels so that we would just move out on the curve and we would be functioning as indeed we have in the past.

People don't remember that from 19 -- I think it was 1942 through 1951 when the Treasury -- when the Fed Treasury accord took place. We essentially, at the Fed, supported 25-year Treasury bonds. We fixed them at 2.5 per cent. So you could imagine how many Treasury bonds we accumulated as a consequence of that. So there's -- we are very far from the Fed being restricted because we are, I'd just as soon not answer the next question.”

That this blatant advertisement for public debt monetization as the ultimate solution took place at a speech before the Council on Foreign Relations - the very same organisation that ran financial stability war games beginning in 1999 ostensibly to prevent or contain the equity bubble from blowing up - is more than coincidental, to say the least. But it fits in with a general theory of moral hazard in which the monetary authorities might be forced to move toward ever greater levels of intervention in order to “retain” financial stability (whilst in reality doing precisely the opposite).

Periodic Ponzi Update PPU -- $hifty, 21:55:18 12/01/02 Sun

Preiodic Ponzi
Update PPU

Periodic Ponzi Update PPU

Nasdaq 1478.78 + Dow 8896.09 = 10,374.87 divide by 2 = 5,187..43 Ponzi

Up 50.64 from last week.

A true Ponzi Scheme!

Thanks for the link RossL


Go Gold


Gold is just as good an investment as govt bonds -- giovanni dioro, 13:03:31 12/01/02 Sun

Gold is just as good an investment if not better than govt bonds.

When you buy govt bonds you get interest on an ever-growing money supply. Therefore you end up with nominally more money, but because the money supply almost always expands, you may not be better off than you were beforehand when inflation is taken into account.

When you buy gold, it does not necessarily pay interest (though some people do lease out their gold and do indeed receive interest on it), however it does hold its value over the longterm when adjusted for inflation.

If gold is undervalued by historical measures, then buying it at depressed levels can be a very good investment as well as offering the peace of mind of safety - the so-called insurance aspect.

Gold -- Sharefin, 17:24:47 11/30/02 Sat

Placer Dome CEO sees positive outlook for gold

Placer Dome Inc. chief executive Jay Taylor said yesterday the outlook for gold was positive and sustainable, with investment demand rising if economies like Japan's remained frail.

Gold has traditionally provided a safe haven for investors in uncertain economic times or when equity markets are volatile or falling. The metal has maintained price strength throughout 2002 and was at US$318 an ounce yesterday.

"Investment demand for gold is going to go up as you see problems in countries like Japan," Mr. Taylor told the Society for Financial Analysts in Toronto.

Japan's government has forecast zero growth in fiscal 2002-03 to next March, as Asia's biggest economy struggles to end a 12-year economic slump with exploding public debt and bad loans.

Mr. Taylor said he expects central banks to renew the Washington Agreement in 2004 when it expires, which will also bode well for gold prices.

In 1999 Washington Agreement reduced the sale of gold from 15 central banks to 400 tons annually for five years. It was aimed to remove fears and uncertainty in the market over central banks' plans with their gold reserves.

Mr. Taylor said he expects the new pact in 2004 will be similar to the last one, and will see between 400 and 500 tons of gold released on to the market annually.

"It is hard to figure out what the central bankers are going to do, although I think the Washington Agreement signing showed they were conscious of the whole market impact and they were prepared to qualify their behavior and not destroy the market," he said.

"We strongly believe that the Washington Agreement looks like it will be rolled over," he added.

Mr. Taylor said the gold industry needs a price above US$325 an ounce to deliver a return above the cost of capital.

He said an average quality gold deposit required about US$40 an ounce to find undeveloped reserves, about US$80 per ounce of capital to build the project, and US$180 an ounce to mine and process the ore.

"If one assumes another US$25 an ounce to cover reclamation, overhead costs and to provide a marginal return to investors, the gold price would need to average about US$325 to US$350 per ounce," he said.

Gold -- Sharefin, 17:14:15 11/30/02 Sat

Gold is insurance, not an investment

There has been a lot of news recently about the so-called "perma-bear" investors who would just as soon own gold, silver or water rights before they buy a blue-chip stock.

In particular, contrarians such as Richard Russell, economist Steve Roach and Elliot Wave International's Robert Prechter are advocating gold and gold funds as the only "safe haven" against a perceived inevitable crash of all "paper" markets in both equities and bonds.

Gold -- Sharefin, 17:09:03 11/30/02 Sat

Morila Now One Of The World's Top Gold Producers

Production forecasts for the last quarter of this year
indicate that Morila is likely to rank among the world's top 10 gold producers
for 2002.

Morila has just completed its second full year of operation and in that time has
produced more than a million-and-a-half ounces of gold at costs below US$100/oz.
During the record-breaking September quarter it produced 428 421 ounces at a
cash cost of US$28/oz and a total cash cost of US$49/oz - and this bonanza did
not come at the expense of mine life.

Gold -- Sharefin, 17:47:59 11/29/02 Fri

Bundesbank Gold May Be Sold for More Profitable Asset

Bundesbank may sell some of its $35 billion of gold, the second-largest holding by a central bank, to buy more profitable assets, executive board member Hans- Helmut Kotz said.

Such an action likely wouldn't come until the Washington agreement between 14 European banks and the European Central Bank to limit gold sales ends in 2004. Bundesbank's president, Ernst Welteke, in July said he wanted the accord renewed.

``There is the option, the idea, that some of the gold in the future be converted into a robust, but more profitable alternative,'' Kotz said in an interview with Bloomberg TV. ``One needs something like gold to underline the credibility of the institution. But one can't justify massive opportunity costs over a longer period of time.''

Central banks, as a group, mostly stopped buying gold in the early 1960s and have sold almost 211 million ounces since 1965. They still hold over 1 billion ounces, the largest holdings of gold in the world. Germany lags only the U.S. in gold holdings and has almost 111 million ounces, worth about $35 billion today.

Gold prices this year have jumped 14 percent as slowing world economies hurt stock markets and led some investors to seek an alternative. Gold in London was up 90 cents at $318.75 an ounce as of 8:26 a.m.

The central banks in the Washington accord account for about one-third of all gold held by governments. They signed the agreement to quell market rumors about sales that were hurting the gold price. Gold has gained by about a fifth since the accord was announced in September 1999.

Gold -- Sharefin, 17:21:05 11/29/02 Fri

25 reasons why gold will rise:

The vicious circle behind the US Dollar decline
Grand illusions have been cultivated in recent years regarding creation of wealth, employing the means of debt accumulation. Credit has somehow been confused with wealth, while legal tender has been confused with money. An extreme irony appears to me. The US Treasury stood for almost two centuries as an institution where a treasure of gold was secured. Now the US Treasury exists as a factory to spin debt issuance into the fabric of guaranteed securities. The dollar and its government securities work hand in hand since foreigners use one as the flipside of the other. The TBond is traded as a US currency offering a return on investment. Debt creation, banking foundations, government spending, and vast systems of inter-dependences are running amok. A clearly identified volatility in the world economy and financial markets has been the reward from the consensus departures from a gold-backed currency. Many wonder if we have developed conditions whereby a "revenge of gold" will come to pass.

Strong countervailing forces govern gold with respect to financial securities and economic environments, hotly debated now. I cite certain inter-relationships at work in determining the price of gold, after observing the financial world for almost 30 years as both a student and a professional in the corporate world. Gold competes with the US Dollar as a worldwide store of value. Within the United States, a declining currency indicates rising inflation of finished goods, commodities, and possibly services available to our economy. Gold also competes with the US Treasury securities (bonds, notes, bills) as a worldwide store of value, attracting investors for its yield. Inflationary economic environments accompany a rising gold price. Despite many common beliefs, deflationary environments also accompany a rising gold price, as debts and indebted currencies are put at risk of writedowns or default. A review of American history in the 1930 decade bears this out. Against such a backdrop, I offer a cornucopia of reasons why gold will rise in value. Forces generate movement, setting into motion a dangerous and risk-filled sequence of events. The USDollar has never experienced correction in an environment filled with such wide-reaching imbalances.
Those who profess opinions and arguments in favor of an orderly and stable adjustment to the extreme imbalances in the currency markets, credit markets, trade accounts, and stock markets are in for a rude awakening. I believe a crisis will unfold, the likes of which we have never seen before. Some like Jim Puplava contend that a Perfect Storm will develop. I can appreciate their perspective and justification. Our stock bubble was orders of magnitude larger than the 1930's. Our current levels of debt are also orders higher. Our dependence upon foreign capital is staggering, rendering us vulnerable. Our import trade for both product components and finished goods is also dangerously high. World banks have structured reserves upon our debt at their peril. It is my considered opinion that the dollar adjustment cannot avoid becoming out of control. Most governmental response to a deteriorating situation could actually worsen any crisis. The natural course of a correction among multiple financial markets might have occurred in 1998. But since we demand, expect, and celebrate an interventionist policy, whose involvement hopes to pre-empt natural cleansing processes, our markets will probably experience far worse corrections in the near future. The historical role for gold has been to serve as the ultimate arbiter and controlling mechanism for both currency debasement and trade imbalance. Since gold has been formally removed from this role, a giant coil might be poised to spring gold into the picture. If a financial storm ensues, gold will certainly operate as its barometer. Thus GOLD will emerge to front and center stage, much like an undesired festering boil!

Against this entire backdrop, many cold forces are at work and transformations in progress. I do not insist on a gold standard for currencies. But I can see a sequence of frightening events unfold which might compel a partial gold-backing in order to secure stability to the world currency system. Concurrent with such events we are very likely to see a spectacular resurrection of gold. The outline below attempts to cover a long list comprehensively, but I surely have overlooked some valid forces. It begins with bonds, then federal/ fiscal policy, politics, banking, mining, trade, commodities including currencies, economic cycles, with a final point reflecting on history.


1. Real rate of interest has been near zero since Oct 2001

Real rate of interest defined to be 3-month TBill yield minus CPI rate
Extreme economic weakness requires longer period of nil real rates
Bond disincentive leads creditors toward other asset groups
No real return on investment, with shorterm bond yield nullified by inflation
Gibson's Paradox describes the relationship between rising gold and shrinking real rates
Credit market represents a very large capital pool, 5x larger than stock market
Strong historical precedent for rise in gold in such an environment, a trend change
2. Rise in foreign holdings of US assets increases our vulnerability to foreign abandonment

Foreigners own 45% of US TBonds, 25% of US Corp Bonds, 12% of US Stocks
Foreigners also own substantial holdings of coastal real estate
Foreign dependence upon capital will probably result in higher prevailing interest rates
Gradually US leaders are losing control of our own economy (interest rate, value of dollar)
The world has begun diversification away from American financial instruments
US vulnerability to financial attack has escalated, with pressure point being the USDollar


3. Money supply increased over 40% since Jan 2001, close to 100% rise since 1991

Monetary inflation plants seeds of eventual price inflation
USDdollar printing might represent a govt-sanctioned legalized counterfeit operation
Central Banks worldwide will fight deflation with further monetary expansion
Monumental imbalances and instability have become endemic in the last two decades
Gresham's Law: bad money displaces good money
Gold's role is to control monetary responsibility and trade imbalances, restore stability
4. Return to federal deficits from recession and wartime economy, with more security spending

Increased supply of bonds leads to reluctance to purchase new issuances
Increased supply of bonds might soon be monetized if bond demand evaporates
Federal bailouts of large failed corporations might substantially increase deficits
Deficit spending and stimulus will continue to undermine the USDollar


5. Rising world tension, desire for safer safe haven, the geopolitical threat to peace

Threats of terrorism (conventional, biological, chemical, nuclear)
Middle East ebb & flow of tensions shapes a constant landscape
Retaliation by Al Qaeda, HezBollah, and Iraqis, who might have begun coordinated action
Potential spread of violence to Asia and Europe, e.g. Russia, Bali in Indonesia
6. Glass-Steagal Law repeal now heightens risk of financial cluster failure

Risks now are shared across banking, brokerage, and insurance sectors
Bank sector is at risk from debts, recession, low rates, and derivative losses
Brokerage sector is at risk from reduced trading, IPO issuance, and shareholder lawsuit
Insurance sector is at risk from WTC attack, droughts, and floods
Insurance sector has a baseline of risk from asbestos, accident, death awards
The merger mania of the 1990's plus the Glass-Steagal Law repeal exposes systemic risk
7. World perception of American institutionalized dishonesty

Scandals, broker conflict of interest, accounting fraud, exaggerated earnings
Prosecutions and corporate failures highlight the broadly reported fraud
Participating collusion by the press/media might have roots in advertising revenues
Consequent resentment of American hegemony, wide military presence, lost trust


8. Likelihood of systemic banking shock waves from debt collapse and derivative chain reaction

Debt failure, loan loss reserves, low rates all hurt profits, impairing capitalization requirements
Every single financial niche is under great stress from poor profitability, incurred losses
Corporate bond spread over Treasury yield indicates withheld availability of capital
Extreme stress to bank sector from derivatives linked to yield spreads
Derivative pyramid exists, dangerously exposing entire financial system to meltdown risk
JPMorgan has become the ultimate source of offloaded risk, both in banking and insurance
JPMorgan may have abused gold leasing in order to sustain gradually failing derivatives
9. Reduction of USDollar usage as both store of value, banking reserve asset

USDollar is backed by debt, thus represents a denominated debt instrument
Its collateral (gold) is in process of depletion, perhaps 50% depleted in US Treasury
China has announced intention to balance 1/3 of reserves across US TBond, EuroBond, Gold
Foreign banks use the USDollar as basis for fractional banking reserves
Faulty US TBond deposit base places entire foreign banking systems at risk
Full circle possibly coming toward currency backed by debt-free gold (Gold Cover Clause)
10. Sharp increase of savings across Asia in the form of gold

Japanese savings guarantees are on again, off again, leaving citizens uncertain
China recently opened the Shanghai Gold Exchange for private purchases
India plans to open its own Gold Exchange, facilitating purchases
Arabs and Russians are increasing their gold purchases
Worldwide trend of private investors now includes USA, Canada, Australia, Germany
11. Islamic world is planning gold-centric international commerce, distancing from USDollar

Iran has announced pending demands for crude oil payment in Euro currency
Redirected flow of petrodollars has been seen into Europe since spring 2002
Planned Dinar currency and coin is gaining ground for pan-Islamic commerce settlements
Dinar might eventually become gold-convertible, offering strong competition to USDollar
Obstacles must be overcome whereby IMF rules forbid settlement outside dollar standard
A Chinese Yuan gold-convertible currency would strongly complement the Dinar
The stage is being set for potential Islamic financial warfare directed at US dollar
If conflict escalates into military war, crude oil payments may be demanded in gold
12. Bank for International Settlements has targeted the US dollar for a corrective decline

BIS embodies the central bank for central banks, subject to no laws or oversight
BIS power originates from pre-WWI Swiss central bankers who resent USDollar debauchery
Swiss desire to install Euro (or SWFranc) as new gold-backed currency
They hold more gold than several central banks combined
We have now officially seen an end to yen carry trade, and to gold carry trade
Their previous objective in restoring stability was the destruction of the Soviet Union
They now regard USDollar profligacy as a threat to world economic stability


13. Reversal of miner hedges, end of gold leasing, reducing supply

1000 ton annual supply shortfall over current demand
Eventual central bank discontinued selling, as per Washington Agreement
Gradual lost control by Gold Cartel (central banks, bullion banks, hedged miners)
End of gold leasing program, as counter-party risks rise, debt downgrades continue
Unwinding of largest naked short position in history (3 years supply)
End of trashing of South African Rand (world's leading gold supplier)
As large miners acquire smaller firms, they must unwind purchased hedge books
14. Dismantled mining supply apparatus, from systemic price below production

A reported equilibrium price of around #600 gold price
At least 2 years required to re-activate operations and produce gold in a shutdown mine
Perhaps 4-5 years to begin production of a new mine from the start
After decades of neglect, lowest CPI-adjusted prices for commodities since 1930
15. Paradox: High gold price leads to higher demand, and high price leads to lower supply

Typical supply & demand relationship with price absolutely does not apply
However, gold jewelry demand does conform to obey the standard demand curve
Investment demand drops during price declines, even nonexistent at lowest prices
As price rises, a worldwide fever develops and gains momentum, lifting demand
Supply was enormous at gold's lowest prices with carry trade and miner hedge sales
As price rises, hedge sale cash flow diverts capital to cover forward contracts
Legitimate operations suffer from reduction in cash reserves, inhibiting production
Ironically, gold mining firms have become buyers on the world markets !!!


16. Trade tariff resumption discourages global trading village concept

Tension leads to reduced trade, retaliation, cutbacks in dollar exchange
Distrust in USA could result in reduced commerce with the United States
Rising protection trends worsen economic slowdowns worldwide, causing inefficiencies
Unintended effects often come in the form of higher domestic prices
Such tariffs and increased taxation repeat the protectionist path taken in 1930
17. US Dollar correction to relieve the trade imbalance could result in a currency crisis

US national trade debt has now surpassed 5% of US GDP
Strong historical precedent for US dollar decline in an attempt to correct imbalances
Symptom of chronic overvalued dollar is lost competitive position for export trade
Another symptom is excessive Asian economy dependence upon US markets
Pervasive foreign imported components renders correction to lower dollar difficult
1990 decade saw huge benefits from cheap imports, now to reverse painfully
US Mfg base has either shifted to Asia, or set up assembly plants to Mexico (NAFTA)


18. Accelerating worldwide currency turbulence

Japan, South Africa, Argentina, Brazil, Mexico, Taiwan, PacRim, Turkey
Unbacked indebted currencies acting as hot money could create isolated airpockets
Standard reaction to each nation's economic slowdowns is to provide monetary stimulus
Central bank debasement of major currencies is underway in USA, EU, Japan
19. European currencies offer more attractive alternatives to US Dollar, with Swiss Franc leading

Low US TBill yield undermines the US dollar on comparative basis (now 2.0% differential)
50 bpt rate cut in November 2002 further accelerates dollar flight to Europe
Coordinated European rate cuts temporarily stem the capital flight
Euro currency has better competitive position (slight trade surplus, 15x gold backing)
Euro also benefiting from diversification by other nations (e.g. China, Asians, Arabs)
20. The calendar date Sept 11th marked the turning point for US Dollar in two critical years

In the year 1989 the fall of Berlin Wall presaged a rise in the dollar to current stretched highs
In the year 2001 the World Trade Center attack presaged a correction after a blowoff top
Dollar-based assets are now seen as more vulnerable, especially if located inside USA
Saudi lawsuits only accentuate the risk of foreign capital residing within the USA
21. Rising costs from entire energy complex (crude oil, natural gas, heating oil, gasoline)

Political, legal, community, environmental obstacles to increased supply are daunting
Kyoto Accord sets up international obstacle for increasing production outside Middle East
Public utilities and regulated industries are under dubious management
Entire utility sector is suffering from debt implosion, and growing derivative risk centers
California price fixing to wholesalers is now being repeated in Arizona, Oregon, Nevada
Natural gas production is in decline, despite jump in drill rigs and investment spending
Gold is highly correlated with the energy complex, as its counterpart financial commodity
22. Commodity trend reversal has begun, the beginning of a new longterm trend

The Commodity Research Bureau (CRB) chart resembles lagged inverse to S&P500 chart
The Gold chart reversal from longterm downtrend is confirmed by the CRB reversal
Grains, precious metals, energy complex, cocoa are leading groups now
Lumber, base metals are the groups which have yet to see price improvements
If/when gold price surpasses #330-340, a new longterm bull trend will be established


23. Kondratieff Winter is gathering speed and force

Evidence in stock market broken asset bubbles, massive debt collapse, world recession
Famous Russian economist identified 60-70 year cycles of boom and bust
End to long expansion cycle of economic prosperity, begin new cycle after correcting excess
Full cycle can be tracked by debt expansion, wars of popular and unpopular types
During K-Autumn, ill-advised repeal of calamity safeguards (e.g. Glass-Steagal Law)
K-Winter occurs one human lifetime later, after zero recollection of previous K-Winter
Confirmation is refusal and reluctance for economies to respond to standard stimulus
This recession is atypical: excess goods & capacity, debt collapse, price deflation
100 telecom bankruptcies joined by countless corporate bankruptcies
Personal bankruptcies are now approaching 400,000 per quarter
High profile failures with KMart, Global Crossing, Enron, WorldCom, Adelphia, JPMorgan?
Upcoming Double Dip recession will likely be led by automobiles and real estate
Typically results in destruction of world's monetary standard (1930 = gold, 2000 = US$)
24. Divergence toward deflationary credit-based economy, inflationary cash-based economy

Overcapacity of capital equipment and mfg plant has characterized this economic recession
Recession has led to reduction in corporate cash flow necessary to service debt
Debt collapse has led to widespread deflationary economic conditions
Monetary expansion compensates for "burned capital", but at expense of wider imbalances
Public mismanaged energy industry has shortages, aging infrastructure, rising prices
If monetary expansion prevents a yield curve inversion, that signals harsh recession
If monetary expansion upholds a yield curve steep, that forecasts future price inflation
Currency jetstream now moves toward the diverging high and low pressure zones
Path of least resistance for fresh capital offers highest potential in un-indebted commodities
These three ingredients might produce a "Perfect Storm"


25. The parallel between gold's rise in the 1970's and 2000's has many components

The London Gold Pool eventually failed in defending a $35 price in 1971
The previous 1960 decade marked a strong bull market for stocks
A vicious bear market lingered through most of the 1970 decade
Reflation urgently required following OPEC energy cost shock and its recession
New cycle has begun with the breakdown in the Dow/Gold or S&P/Gold ratio
The year 2000 ratio saw an extreme ratio achieved, marking highs in "paper" assets
The year 1981 saw this ratio in Dow terms reach parity
Huge upside gold potential exists for gathering new supporters, advocates, investors
Gold will slowly work through obstacles of suppressed and distorted information
Gold will slowly be better understood, overcoming decades of conditioned beliefs
Gold will slowly find appeal as an maverick, alternative, debt-free asset group
Gold will slowly grow a counter-culture, standing in opposition to a corrupt Wall Street
Gold will gradually rise in value in proportion to the degree it is hated and feared
Gold coins can be held in one's hand, in stark contrast to electronic entries with securities
Demand for this small $70B sector could result in tremendous "dotcom-like" valuations

Gold -- Sharefin, 17:05:54 11/29/02 Fri

Romania: Gold Dig Sparks Controversy

Canadian project to build a gigantic open cast gold mine runs into trouble.

Opposition is mounting to Romania's biggest-ever foreign investment project - plans for a huge open cast gold mine in Transylvania which environmentalists say will be a disaster.

The World Bank last month refused a request for a 100 million US dollar loan towards the cost of the 400 million dollar project being managed by Canadian company Gabriel Resources.

"We are overjoyed," said Eugen David, president of a local group opposed to the proposed mine, at Rosa Montana valley. "We hope that other financial institutions and banks will follow suit."

He branded the project, which will see a gigantic hole dug in an area of outstanding natural beauty, as "speculative, unprofitable and unsustainable," and said the mine will "increase pollution and poverty".

Gold -- Sharefin, 21:02:37 11/27/02 Wed

Newmont Presentation - "Creating Value With Every Ounce"

Gold -- Sharefin, 20:55:37 11/27/02 Wed

Australia miners continue to cut gold hedge

Gold hedges by Australian mining companies declined by a modest 3.2% or 734 000 oz in the September quarter, as a once-vocal anti-hedging movement gripping much of the industry eased, JP Morgan said on yesterday.

"We sense that the outcry over producer hedging has eased a little over the past few months," JP Morgan said in an industry report.

In the previous quarter, Australian gold hedges had fallen by 9.2%.

Hedging - the act of selling yet-unmined nuggets forward at fixed prices - is a popular tactic to lock in revenue and thwart cyclical downturns in bullion prices. But in a rising market, miners run the risk of being forced to sell their caches below current value.

As of September 30, Australian miners had 22.6-million ounces of gold hedged at at an average price of A$616/oz, JP Morgan said.

I don't know but I find it hard to believe Morgan's quote of an average price of A$616/oz correct.
Generally quotes of hedged gold come in at spot plus 10% or less.
And I recall talk from a while back where companies were quoting ounces hedged at approx the A$560/oz

You only need to look at the below chart to see that the price in Australian Dollars the last few years has been well below the mark suggesting that perchance Morgan is talking their book.
Presumedly most hedges were laid on during the circled period where the price was approx A$450-480

Gold -- Sharefin, 20:40:38 11/27/02 Wed

Putting the pedal to the metal

Analysts see 'critical juncture' for gold price
It's time investors put the pedal to the metal, say a growing number of gold analysts.

The precious metal's inability to surpass $325 an ounce, and stay there, is trying the patience of some of the most loyal of gold's backers.

"Gold is at a critical juncture," says James Turk, whose Freemarket Gold & Money Report took the step this month of challenging the stubborn gold price. Turk, founder of payment system and a longtime bullion investor, believes gold is at a turning point.

"Either we move up and climb over $325 within the next few weeks or we go back and test support below the $310 area. Or perhaps worse," Turk tells me. Spot gold's price Wednesday was $318 an ounce, giving it a 17 percent gain for the year but leaving it $11 shy of its 2002 high.

Gold -- Sharefin, 20:27:07 11/27/02 Wed

Readings from the Book of Barrick: the Sequel

A few weeks ago I was startled out of my afternoon reverie by an inquiry from Melissa Davis, an investigative journalist for She was gathering material for a piece on Barrick Gold Corp. and wanted to follow up on my essay, Readings from the Book of Barrick, posted back in May. Sure thing, I said, delighted to receive a little recognition from someone outside the Taliban Wing of the gold bugs. There was just one problem: I hadn't kept up with Barrick ever since it became clear that CEO Randall Oliphant was exactly right when he asserted that the rumors regarding a deal with Gold Fields, which had prompted my musings, had been dreamed up by some guy in his basement. So I had to do a little homework in order to respond to Melissa's thoughtful questions. In the process, I learned some things that may be of interest to fellow gold bugs, but which may be too technical for inclusion in an article geared to a broader audience. Accordingly, Melissa's questions and my responses are set forth below, modified slightly for this format.

We'll post a link here when Melissa's article comes out.

1. Has much changed at Barrick since you published your essay? If so, what?

Three developments strike me as noteworthy.

First, they committed to a serious reduction in their gold hedgebook exposure. This was announced in a press release on September 17, which also laid out a growth plan. The growth plan got top billing but it's pretty clear the point of the release was the hedge cutback, because the “growth plan” was mostly old news. The announced reduction would chop their gold forward exposure by a third, taking it down from about 18 million ounces to about 12 million ounces by the end of 2003. It would also slash their call option and variable price sales contract position by 1.5 million ounces over the same period, down from about 2.7 million ounces. The pledge is “based on market conditions,” whatever that means, but otherwise it's unequivocal. This is a big deal if it's real, but it was quickly overshadowed by the second development.

Second, they wrong-footed the market by lowering earnings guidance out of the blue. This was announced in another press release issued on September 26, just 9 days after the first one. The release attributed the miss to operating issues in Goldco: higher costs and lower output. What was weird about it was the timing. Why not combine the releases rather than stagger them so? It was like Goldco and Hedgebook were no longer on speaking terms. Anyway, the snafu clearly irked some of the bigger players. I happened to catch Randall Oliphant facing the music at the Mining Investment Forum in Denver a week later. I couldn't help feeling sorry for the guy -- seeing him fidget and glance furtively at his watch under some downright hostile questioning reminded me of Bart Simpson getting reamed by Principal Skinner. I think it's fair to say that the proffered explanation as to what happened and why was not enthusiastically embraced by a lot of the attendees at Denver.

Third, they have been unusually active with their silver shorts. At the end of the first quarter, they had 26 million ounces subject to spot deferred forward contracts, and about 21 million ounces subject to call options. At the end of the second quarter, they had put another 12 million ounces under the forwards, meaning they had sold short that many more ounces in just one quarter. So at June 30 they were short about 59 million ounces, which is about 10% of the total global annual production of silver. At September 30, they had taken it back down to about 50 million ounces. Now I don't follow the silver market that closely but their activity here has always struck me as curious. They don't break out silver separately except to note that Eskay Creek produced 15.5 million ounces of the stuff in 2001, and that they treat it as a byproduct and use it to reduce operating expense. I understand there has been a labor dispute at the Horne Smelter, reducing throughput this year. I suppose this may account for some of the cost increases at Eskay flagged in the September 26 press release. But the bigger issue seems to me to be twofold. First, why bother shorting such small potatoes so aggressively, particularly at historically low prices? Secondly, what provision do their models (and contracts) make for the non-linear event of war, which typically consumes a lot of silver? If there is a war with Iraq that doesn't end quickly, I guess we'll see, because there is no more U.S. strategic stockpile, and central banks don't hold a lot of silver anymore.

Continuity Schedule of the Change in the mark-to-market value of the Gold and
Silver Hedge Position

The estimated fair value of the gold contracts at September 30, 2002 was approxi-
mately $301 million negative, and the fair value of the silver contracts was $19
million positive. These values are based on the net present value of cash flows
under the contracts, based on a gold spot price of $324 per ounce, silver spot
price of $4.51 per ounce, and market rates for Libor and gold and silver lease
rates. The year-to-date change in the fair value of the Company's gold contracts
is detailed as follows:

Fair value as at December 31, 2001 $356
Impact of $152 million realized gains in the period to date (152)
Impact of change in spot price (from $279 per ounce to $324 per ounce) (883)
Impact of contracts added (21)
Implied contango period to date 109
Impact of change in valuation inputs other than spot metal prices
(e.g. interest rates, lease rates, and volatility) 290
Fair value as at September 30, 2002 $(301)
This “Continuity Schedule” is a new one on me, and it demonstrates why trying to track their numbers across reporting periods is like shooting sporting clays: you never know what to expect. Mr. Oliphant told the Boston investment conference hosted by Merrill Lynch back in May that there is about an $18 million negative swing in their mark-to-market with each dollar increase in the spot price of gold. The mark-to-market was negative $127 million at the end of the first quarter, based on a spot price of $302. So at the end of the third quarter, where they based off $324 spot, an investor with the soul of an accountant would look for a mark of negative $523 million, give or take. But no, now we are given a brand new calculation that nets in some stuff we've never seen before, derived pursuant to methodologies that remain shrouded in mystery. The result is to pare the mark by 40%, leaving it at the published negative $301 million. Go figure.

Fiat -- Sharefin, 20:09:43 11/27/02 Wed

Exchange Stabilization Fund - New Website

The Exchange Stabilization Fund (ESF) consists of three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs)1. Currently, the ESF has a total of approximately $38 billion in these three assets.

The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury ("the Secretary").

The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.

The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."

Gold -- Sharefin, 20:06:53 11/27/02 Wed

Through a Homestake glass darkly

Homestake, now merged with Barrick Gold, is the equity equivalent of a supernova - you can look really far back in time and figure some things out about the universe.
As a result, the Homestake chart going back to the days of yore has become a popular presentation tool, but Mineweb has yet to see an inflation adjusted version. So we asked Mike Bolser, well known for putting together some of GATA's data, to express Homestake's stock, the gold price and the Dow Jones Industrial Average in constant 1913 dollars.

What emerges is what a powerful driver the Depression was for Homestake. The price had trended up in keeping with the general appreciation of the Dow through the 1920s, but it only broke out two years past the crash and had to be helped by President Roosevelt's revaluation of gold.

Interestingly, the recent recovery in the gold price also had a two year lag from when the Dow had actually peaked in inflation adjusted terms (March 1999). By Fall 2000, all gold stocks had started to trend up, apparently anticipating the gold price but, more importantly, signalling the top in the broader equity market.
The good news is that the balance of power appears to favour gold once more. Liquidity is rising because of the War on Terror and Homeland Security, but there is also a lot of excess still to be unwound in equities. Those situations remain very positive for gold to run hard, but the history of the last three decades is that you have a very narrow window of opportunity in which to take your profits.

Silver -- Sharefin, 20:02:11 11/27/02 Wed

New Sliver CellTM offers revolution in solar power

A joint venture between the Australian National University and Origin Energy has developed a new type of solar cell with the potential to revolutionise the global solar power industry.

Director of the ANU Centre for Sustainable Energy Systems, Professor Andrew Blakers today unveiled the Sliver CellTM, which uses just one tenth of the costly silicon used in conventional solar panels while matching power, performance and efficiency.

Professor Blakers said, "A solar panel using Sliver CellTM technology needs the equivalent of two silicon wafers to convert sunlight to 140 watts of power. By comparison, a conventional solar panel needs about 60 silicon wafers to achieve this performance.

ChartsRus -- Sharefin, 03:29:14 11/27/02 Wed

Here's a new webpage for gold - Inter-Market Relationships

Fiat vs Gold -- Sharefin, 03:16:36 11/27/02 Wed

Delusions and Denials Prevent Recognition of the Truth

The investing public remains in denial. This is in regards to the true state of the stock market as well as to a number of additional financial conditions and situations. They have already sustained trillions of dollars in cumulative equity losses. Yet, they are unswayed from continuing their personal spending patterns. Further, they remain convinced that common stock ownership is a prudent form of savings. This delusion has compelled investors to invest their capital into the various mutual funds and common stocks. Additionally, despite the loss of a significant part of their wealth they refuse to believe that they may be forced to alter their retirement plans. They continue to spend, spend, spend, while the outlook for their future incomes, employment and retirement requirements, deteriorate in an unchecked fashion.


I believe that the entities that are acting to suppress the advance of the gold price are losing control. Further, due to the gallant efforts of Bill Murphy and Chris Powell, through their organization GATA (Gold Anti-Trust Action Committee, GATA.Org), I believe that some powerful hedge-funds and other entities are positioning themselves to benefit from the gold Bull Market. The appearance of substantial and sustained purchasing is reducing the downward magnitude of all gold price reversals. We may not have much longer to wait before gold rises above its temporary $330 ceiling and moves far higher in price.

The price of silver continues to mirror the price action of gold. As I have repeatedly stated, I believe that silver too is poised to move sharply higher in price. We may still have a number of months to wait, or only a few weeks. But rest assured, when silver breaks out to the upside, the incredible short position and dearth of above ground stockpiles that have developed, will force the short-sellers against the wall. It will require a substantially higher price to attract sufficient supply to allow the shorts to exit their positions.

Gold -- Sharefin, 03:04:58 11/27/02 Wed

Gold shares may offer light in the equity gloom

Shares in gold mining companies could offer some stability to ailing equities portfolios in a climate of high economic and political uncertainty, gold fund managers said on Tuesday.

Gold bullion, long considered a safe-haven investment in times of trouble, does not offer much excitement to the investor looking for big returns, but gold shares register much bigger price movements and their performance has outstripped other asset classes.

"There are very few other sectors in the market which have the potential to give you a big return in such a short space of time," Graham Birch, who runs Merrill Lynch Investment Managers Natural Resource team, told a Euromoney Gold Investment Summit in London.

He is responsible for the UK's only gold fund, Merrill Lynch's Gold and General, which has gained 53.9 percent in value in the year to end-October, compared with a rise of 18.3 percent in the FT Gold Mines index and a near 20 percent drop in the FTSE 100 index.

Over a longer time span of 10 years, the fund is up by over 400 percent, despite a corresponding drop of 6.8 percent in the price of gold and compared with a 52 percent gain in the FTSE 100.

But despite such impressive performance, they remain a marginal tool and are still shunned by major investors.

Multi-billion pension and investment funds were simply no longer used to investing in gold shares. And in the uncertain climate today, coupled with losses of up to 35 percent in some funds, managers were wary of putting money into an area they know little about.

"Lots of managers would rather hide under the duvet than go and have that conversation," Birch said, referring to their ability to sell gold's attractiveness to their investors.

Birch said that most interest came from "gold bugs" -- punters who are willing to take a risk and who desire exceptional exposure to gold.

However, he said that since the start of this year, there had been increasing interest from investors, or asset allocators, looking to diversify out of the ailing, traditional equity market to bolster their returns.

"They (gold shares) have a habit of doing well when other assets are doing badly and asset allocators find that a very attractive feature," he said. "Nevertheless, it (gold share investment) is still a drop in the ocean compared to what the potential is."

Gold -- Sharefin, 02:56:09 11/27/02 Wed

Gold Seen Cautiously Bullish Next Year

Analysts and traders are divided over gold's direction next year, but most are cautiously bullish and expect gold to trade a higher range in 2003.

Many said the metal will continue enjoying its safe haven status next year amid a continued weakness of the U.S. dollar, low U.S. interest rates and concerns over global security.

Some cited Chinese gold demand as a potential key driver of gold price next year, following China's recent liberalization of its gold market.

Gold underwent a sea-change this year. Heightened uncertainties over global security following the Sept. 11 terrorist attacks on the U.S. increased gold's safe haven appeal.

It built on gains when producers slashed their hedge books. Weakening U.S. dollar, huge U.S. stock market losses after a series of corporate malfeasance in the country, heavy Japanese investment demand earlier this year, all colluded to lift gold higher.

The next big move for gold is up, said a Singapore-based trader, who declined to be named.

"The global situation warrants it, the economic situation warrants it. Will it go down? Yes, but that doesn't change the bullish picture next year," he said, pointing to the current uncertainties that gold feeds on.

He predicts gold will trade in a US$280-US$340/oz range in 2003, but should the bullion breach a key resistance at US$340/oz, the sky is pretty much the limit for the metal.
Andy Smith, a London-based analyst at Mitsui Global Precious Metals, said he expects the pace of producer buybacks to decelerate, which means gold will trade and average lower in 2003.

Fiat vs Gold -- Sharefin, 02:45:59 11/27/02 Wed

Indian gold demand to continue its decline

Annual demand for gold will drop by 200 to 300 tonnes in India, the biggest consuming country, unless some radical changes are made to the way western producers approach that market, according to Gary Mead of Virtual Metals Research & Consulting.
He pointed out that 200 to 300 tonnes represented up to 8 percent of global gold demand, so producers could not ignore this threat.

But in recent years India was proving to be a very price-sensitive market and a rising gold price was often now seen as a selling opportunity. Nobody really knew the amount of gold hoarded in India, but some suggested it could be as much as 12,000 tonnes, equivalent to all the gold in central bank vaults worldwide. In future, much more of Indian demand would be met from metal recycled from its stocks, Mead asserted.

Fancy Virtual Metals suggesting that 12,000 tons of gold is the equivalent to all the gold held in central banks.

A slip of the tongue from a recognised goldbashing group....^0-0^...

Also I wonder how their research stacks up against what is coming out of India?

That Glitter Is Indeed Gold

Where they quote that gold purchases are increasing year on year when valued by dollars.

"There is something strangely stable about total gold imports in recent years: Rs 18,000 crore in 1999-00, Rs 18,800 crore in 2000-01, and Rs 19,700 crore in 2001-02. Underpinning the 45 per cent growth estimate for the second half of this year, is a full year import level of Rs 20,600 crore."

The cash value of these imports is rising at approx 4.5% pa and seem a steady solid rise.
Gold in the Indian currency rose approx 4% pa for the first two years and a 15% jump in the last years so apart from the latest rise it appears that the physical purchases are in line with the cash purchases.

So there's no great big bearish picture on gold imports into India except by Western companies wanting $9000 for verified gold bashing reports.

You only need look at the chart below to realise why the average Indian likes storing his spare wealth in bullion and that this age old habit is not likely to stop yet.

As they say in that article:
"In India, the only international asset effectively available to resident Indians is gold. This is reflected in part by the proportion of retail investment in gold demand being three times higher than world levels till 2000. Most Indians view jewellery as a long-term asset, akin to real estate, and not as a consumable."

And also
"The other factors bearing on asset play - declining interest rates, stock market and real estate returns - have been something of a constant ever since the latter half of 2000."

Looking at the chart any Indian with his wealth in gold must be smiling quietly to himself.

And as in any bull market; those who don't have it & want it will be paying higher prices.

I for one would consider the $9000 far better spent on procurring bullion than wasting it on this report.

Fiat vs Gold -- Sharefin, 02:13:43 11/27/02 Wed

Banks no threat to gold balance

Central banks are set to renew the Washington Agreement in 2004 in a pact that could attract additional participants and stipulate a lower ceiling on gold sold. Speaking at the EuroMoney Gold Seminar, Jeff Christian, managing director of the independent US consultancy, CPM Group, said however that central banks would continue to be net sellers of gold. This should be welcomed as new mine supply was not enough to satisfy industrial, jewellery and investment demand.

The possibility of a new agreement, much in the public eye 18 months ago, should not be expected before 2004, but there was the possibility of expanding the number of banks involved to include the US, Canada, Japan and Australia, he said.

It never ceases to amaze me how the writers of such articles never bother to do their homework regards the double dipping of Central Banks in that they still count reserves on their books even though they have been leased out.

It was only a short time ago that MiningWeb posted a story which alluded that Australia had leased out 100% of their reserves.
Now they are quoting some opinion that seeks to still include these reserves.

Oh well - same old same old......wake up MiningWeb.....

Fiat vs Gold -- Sharefin, 02:06:59 11/27/02 Wed

Gold theorists weigh dollar conundrum

Views on gold have the force of theology with some commentators bursting neck vessels defending their belief systems. But no matter how you slice it, taking a view on the gold price is really code for: what do you think the dollar will do? Two, eminent commentators opening the EuroMoney Gold Seminar in London today - one economist, one monetarist - emerged with views that together provide an interplay on the future of the gold price.

Fiat vs Gold -- Sharefin, 01:49:48 11/27/02 Wed

Rand continues to impact mining stocks

The South African rand continued to defy gravity Tuesday, briefly reaching R9.09/ dollar, before pausing for breath at a respectable R9.13.

Fiat vs Gold -- Sharefin, 01:48:00 11/27/02 Wed

More analysts on their way out

Attrition among London's diminishing band of mining analysts is continuing with two more respected people leaving the scene, only one of them voluntarily.
The casualty is Mark Burridge who has left the mining team at Merrill Lynch in London, along with some other analysts covering other sectors. As Mineweb has previously reported, some big investment banks are cutting back on all fronts because weak markets have left corporate financing activity at such a low ebb.

Also leaving the scene is Alan Richards, one of London's longest-serving mining analysts, who is retiring from the team at Credit Suisse First Boston. It is not clear whether he will be replaced.

Burridge is the fourth mining analyst to be asked to clear his desk in recent days. Peter Davey and Jonathan Copus were shown the door when SG Securities, part of France's Societe Generale banking group, fired about two-thirds of its London based equity analysts as a cost-cutting measure. Fiona Perrott-Humphries, head of the mining team at Schroeder Salamon Smith Barney, left for the same reason.

There are similar trends across the Atlantic, where JP Morgan analyst John Bridges has been deprived of the assistance of Seth Tennant, even after taking on a heavier research load. The BMO Nesbitt Burns metals research team has also been affected by unspecified cutbacks. In Toronto, Mike Durose of Morgan Stanley has also been left to man the shop single-handedly.

Fiat vs Gold -- Sharefin, 01:41:29 11/27/02 Wed

Gold shines brightly for pessimistic investors

All that having been said, the big picture favours the bullish case.

The outlook for the U.S. dollar is bleak, given the United States' huge current account deficit, renewed fiscal deficit, and wobbly economic prospects. Historically, when the U.S. dollar goes down, the price of gold goes up.

Negative real interest rates (nominal rates minus inflation) in the United States put pressure on the dollar and make hedging by gold producers less attractive. That's good for the gold price.

As Victoria-based economist and gold expert Martin Murenbeeld compellingly argues, a sputtering global economy will force central banks to reflate -- that is, to inject liquidity into the financial system. Historically, reflation has been good for gold.

The factor most frequently cited, the likelihood of war against Iraq, is a more transient factor. The price of gold does indeed advance during periods of international tension, but it also tends to go right back down when that tension comes to an end. Meantime, the supply/demand equation is bullish and there is no threat of unexpected central bank selling of gold, as there was before European central banks concluded the Washington Agreement in September, 1999, limiting gold sales for five years.

Fiat vs Gold -- Sharefin, 01:19:25 11/27/02 Wed

Chairman Greenspan and Governor Bernanke of the Federal Reserve do a Major Commercial for Gold

Bernanke and Greenspan of the US Fed uttered the most pro-gold statements that I have ever heard. These statements, properly understood, confirm to me beyond any doubt that we are in the very early stages of an extremely long-term gold bull market and a US dollar bear market. These words from the highest level of monetary management tell me that it is presently Fed strategy to see the dollar well under 100 on the US Dollar Index as an inflationary strategy to offset deflationary concerns. Greenspan said that, "Even with the key lending interest rate only slightly over 1%, the Federal Reserve would stimulate the economy by expanding monetary aggregates even if that rate were close to zero." Ben Bernanke, one of the Federal Reserve's seven governors, followed up by saying "The US government has a technology called a printing press - or, today, its electronic equivalent - that allows (the Federal Reserve System) to produce as many US dollars as it wishes at essentially no cost." Chairman Greenspan also said "There is virtually no meaningful limit to what we could inject (money supply) into the system, were it necessary."

Fiat vs Gold -- Sharefin, 00:52:03 11/27/02 Wed

FSO Transcription - Dr. Larry Parks "What Does Mr. Greenspan Really Think?"

JIM: What has the Fed Chairman been saying these last three years? Inside your book, you talk about how he blows the whistle on fiat money, wealth transfer, and intimates, quite frequently I might say, about financial collapse.

DR. PARKS: He was very forthright in the lecture. I think he wanted to get some issues off his chest, which may be why he did it in Belgium, where nobody from our media covered it. It wasn't picked up by The Wall Street Journal, not by The New York Times, not by anyone! He talks about instability in the system - the fact that we could all lose our savings in an eye-blink. What he doesn't say, and what he should say, is that the whole financial system that we have in our country is a fraud on the people. Part of the evidence is that all of our money is legal tender. There was a time in 1870, 132 years ago, when the Chief Justice of the Supreme Court, Salmon Chase, came right out and said: “The legal tender quality [of money] is only valuable for the purposes of dishonesty.” Of Dishonesty! From the Chief Justice of the Supreme Court!

At its core, the monetary system that we have now is really a cheat. It helps transfer the wealth that ordinary people produce to the financial sector. You can think of it as a big vacuum cleaner, vacuuming up wealth from all over the world and transferring it to the financial sector. This is not a happy message and I understand that. The implications for investors are very dire.

One of the stories I am telling now is, what would you do if you knew in 1999 that Enron was a fraud? Suppose you were a money manager with a fiduciary responsibility to invest on behalf of other people. Would you have invested in Enron on the theory that, if you didn't invest in 1999, you would under perform, and also on the theory that you could get out in time?

Anybody who is honest would have to say “no.” Skepticism about the honesty of our monetary system is beginning to appear, partially because of our work at Once one realizes that our monetary system is fraudulent at its base, how can people buy bonds? How can money managers in good conscience put people's money into municipal bonds or government bonds, knowing that the whole thing could collapse around their ears?

Midas -- Sharefin, 09:57:16 11/26/02 Tue

The so-called free gold market is a joke and so is the gold industry. The World Gold Council should be disbanded for aiding and abetting the enemy. Recently, they officially aligned themselves with Gold Fields Mineral Services, the "official" supplier of gold/demand statistics for the industry. For years, GFMS has shaded their numbers to accommodate The Gold Cartel. They have low-balled demand and not accounted for the excess gold supply hitting the market via the cabal to keep the gold price from rising.

The proof in the pudding is the true gold loan/swap numbers. Through the brilliant work of Frank Veneroso, the GATA numbers suggest the gold loans/swaps of the central banks are 12,000 to 17,000 tonnes. While preparing for The GATA African Gold Summit in Durban, South Africa on April 2001, Frank estimated them to be 10,000 tonnes on the low side and 16,000 tonnes on the high side. The World Gold Council ought to be thoroughly investigating the work of the GATA Camp because if proven correct and disseminated to the public, it could change the entire investment demand picture in The West.

The World Council could begin by examining the IMF's gold playbook for their member banks. The world's central banks clearly do not have the gold on hand they say they do. The IMF has instructed its central banks to deceive the public by counting swapped gold as official gold reserves. GFMS states that only around 4600+ tonnes of gold has left the coffers of the central banks. GATA's numbers are 10,000 tonnes greater than that. The difference is extraordinary.

From On The Record at The Matisse Table by Andrew Hepburn:

One other official institution, over which the U.S. Treasury has considerable influence, has distinguished itself with questionable accounting practices. In October 1999, less than one month after the post-Washington Agreement gold price explosion, the Statistics Department of the International Monetary Fund published a document entitled, "The Macroeconomic Statistical Treatment of Securities Repurchase Agreements, Securities Lending, Gold Swaps and Gold Loans." This draft paper, discovered by GATA consultant Michael Bolser recommended that central banks record as a reserve asset gold that had left their vaults by way of a swap. Simply put, member nations would be advised not to differentiate between gold in the vault and gold receivables.

With the above in mind, GATA supporters around the world posed the following question to the IMF in October 2001:

Why does the IMF insist that members record swapped gold as an asset when a legal change in ownership has occurred?

See The IMF responded that:

This is not correct: the IMF in fact recommends that swapped gold be excluded from reserve assets. (See Data Template on International Reserves and Foreign Currency Liquidity, Operational Guidelines, para. 72,). [Emphasis Supplied.]

See A footnote on the central bank of the Philippines website contradicts the IMF's claim:

Beginning January 2000, in compliance with the requirements of the IMF's reserves and foreign currency liquidity template under the Special Data Dissemination Standard (SDDS), gold swaps undertaken by the BSP with non-central banks shall be treated as collateralized loan. Thus, gold under the swap arrangement remains to be part of reserves and a liability is deemed incurred corresponding to the proceeds of the swap. [Emphasis Supplied.]

See Responding to an inquiry, the European Central Bank also revealed that swapped gold was to remain a reserve asset. The ECB wrote:

You have asked us about the IMF recommendation in cases where the ECB engages in gold swaps.

Following the recommendations set out in the IMF operational guidelines of the "Data Template on International Reserve and Foreign Currency Liquidity" which were developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralised loans in balance of payments and international investment position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet. [Emphasis Supplied.]

The Bank of Finland and the Bank of Portugal also confirmed in writing that swapped gold remains a reserve asset under pertinent IMF regulations.

The influence of IMF recommendations for gold swaps, loans and deposits should not be underestimated. For example, on its balance sheet the German Bundesbank lists "Gold and Gold Receivables" as a one line item. (See Gold and Gold Receivables.) This approach is in direct conflict with Generally Accepted Accounting Principles (GAAP), which the central bank is obligated to follow as per German banking law. (See Section 26 (2) of the Bundesbank Act.)

In response to an inquiry, the Bundesbank justified their accounting treatment on the grounds that IMF rules take precedence over domestic law. The effect is obvious: from published financial statements there is no possible way to determine how much gold Germany holds in its vaults. The refusal of the Bundesbank to provide a breakdown between physical gold and gold receivables belies any notion of market transparency.

GATA believes that the implications of IMF accounting procedures for reversible gold transactions are very significant. Clearly deceptive accounting, countenanced by the IMF has allowed official sector gold to hit the market without a corresponding drawdown on the balance sheets of central banks. This has made it impossible for analysts to ascertain the exact size of official sector gold loans, swaps and deposits. The unwillingness of central banks to provide even a minimum level of transparency suggests that total gold receivables are substantially larger than the accepted industry figure of approximately 5,000 tonnes.


Has the World Gold Council looked into this crucial matter? Are you kidding! They are too busy devising another jewelry promotion. My other gripes:

*Frank Veneroso submitted his supply/demand work to the WGC and they refused to even consider what he found. See:

Facts, Evidence and Logical Inference

A Presentation On Gold Supply/Demand, Gold Derivatives and Gold Loans
Frank A. J. Veneroso

Currently head of Veneroso Associates, formerly partner of the hedge fund Omega Advisors where he was responsible for global investment policy formulation. Through his own firm, Mr. Veneroso has been an investment and economic adviser in investment strategy to institutions and governments around the world in the areas of money and banking, financial instability and crisis, privatization, and development and globalization of securities markets. His clients have included the World Bank, the International Finance Corporation, The Organization of American States.
He has advised the Governments of Bahrain, Brazil, Chile, Ecuador, Korea, Mexico, Peru, Portugal, Thailand, Venezuela and the United Arab Emeritus.
Frank is a graduate from Harvard and has authored many articles on the subjects of international finance.

"I have requested debates with Goldfields Mineral Services and they have refused to show up. I have asked the World Gold Council to fund pertinent research studies and they have not responded. I never get a response that counters the evidence that I can bring forward. I simply get extreme silence."

*The World Gold Council refuses to answer GATA's challenge to debate and refuses to deal with our massive amount of evidence of the manipulation of the gold price.

*The World Gold Council is ruled by the big hedgers. They have a conflict of interest with the non-hedgers, who contribute to the WGC at the same % dollar amount per gold production as the big hedgers.

*Now that the WGC has taken in bullion dealer apologists Gold Fields Minerals Services, they are not to be trusted. Their information must be treated as suspect.

From an organizational standpoint, the gold industry is a joke. That includes The Gold Institute and the Comex/Board of Directors. They all ought to be investigated and charged with benign neglect and consorting with the enemies of gold.

At some point, the price of gold is going to explode. Almost no one in the mainstream gold world will have predicted the coming soaring gold prices. The only explanation will be that the GATA ARMY was right all along. The investment world will then realize how inept and corrupt the gold industry organizations have been all these years. "THROW THE BUMS OUT," will be my cry!

Hopefully, the wonderful gold producers out there will get off their butt and speak out on these issues. It is time those gold producers ban together and form a new gold organization that will seriously look out for the interests of their shareholders.

"Men occasionally stumble over the truth, but most of them pick themselves
up and hurry off as if nothing ever happened."
Sir Winston Churchill

Gold -- Sharefin, 06:36:42 11/26/02 Tue

Gold is now at an extremely important Price-Time juncture.


The fundamental and technical elements are conspiring to produce a 40% surge in the USD price of Gold over the coming 3 months. The immediate small-scale structure allows for a final dip to 315/312, but with or without this last manoeuvre, an upside break of 329 would signal a direct acceleration to a major long-term inflection point crossing 350. Acquiring long positions at that time may become difficult as the 350 barrier is likely to be pierced via an enormous gap driven by an exogenous tragedy. Volatile trading should push to 400 before falling back sharply and then continuing as far as 450 at the end of JAN03. A decline through 310 is not anticipated but would signal further consolidation back to 295 without voiding the eventual upside scenario.

Lenny's Corner -- Sharefin, 23:55:44 11/25/02 Mon


While the precious metals markets were somewhat volatile last week due to news events, governmental reports, and the option expiration of the December options on Comex, the gold market, after careening through a $5 plus range from high to low, managed to close exactly unchanged, solidly over $320.00 spot. Silver saw a rather wide 16-cent trading range and closed just about 3 cents lower on the week. Naturally, of course, these two precious metals saw their lowest prices on Thursday, the day that options expired on the exchange.

OK, let me try to explain how this works. Firstly, we need to examine just who are the buyers of call options on the exchange and who are the sellers and look at the dynamics of the situation.

Generally, the buyers of call options on the exchange tend to be the "public" small speculator (usually limited in both capital and experience), who, for a limited risk, buys options hoping beyond hope, for the "big kill". The sellers of these call options tend to be the large professional bullion banks and experienced traders. Now, if prices close below a major strike price for an option, all the buyers of calls see their contracts expire worthless, and all the sellers of the same options get to keep all the money they received in option premiums. Millions, or tens of millions, of Dollars are at stake over just a few cents, one way or the other.

So, as an example, let's use the silver market on Wednesday when December silver closed at $4.535, comfortably over the $4.50 strike price. All the professional traders, who have previously sold call options to the public, would dearly enjoy seeing the price close BELOW the $4.50 strike price of the option on Thursday, so that the options expire worthless and they get to keep all the money paid to buy those options. So, guess what happened on Thursday? Professional selling by large bullion banks and professional traders pushed silver down by about 7 cents on that day, rendering the $4.50 call options worthless, only to see the very same traders buy the market aggressively on Friday to see silver rise by about 7 cents on Friday, right back to where it started on the close of the market on Wednesday. And, millions of dollars worth of silver options expired worthless for the buyers of such, while such antics put the same millions of dollars into the pockets of the professionals.

Now, please understand that the explanation above is very highly over-simplified. But, long-term traders and analysts of the market will always note, with a smirk, that prices indeed tend to move towards or below major "round" numbers as option expiration occurs. The small speculator is at the mercy, or better yet, lack of mercy, of the large well-capitalized traders who regularly feast upon their demise.

ChartsRus -- Sharefin, 08:10:43 11/25/02 Mon

Real Rates of Return

ChartsRus -- Sharefin, 07:27:44 11/25/02 Mon

New chart series.

InterMarket Relationships

Fiat -- Sharefin, 07:19:20 11/25/02 Mon

Farmers buy cars with beans

In Argentina, where economic chaos has given birth to 11 different currencies issued by cash-hungry local governments, farmers have found a bushel of soybeans is worth more than a bag of banknotes.

Gold -- Sharefin, 06:42:22 11/25/02 Mon

Richard Russell on the Markets

It's these "little things" that make the markets so fascinating, at least from my standpoint. Personally, I always put my money on the power of the primary trend. I believe that the primary trend of gold is bullish, and I believe that in due time the primary trend of gold will fully express itself. Furthermore, the longer the primary trend is suppressed, the more powerful the underlying build-up. I liken the primary trend that is held back to a coiled spring. The energy is simply compressed more and more. Finally, when the spring breaks loose the results are both powerful and startling. Which is what I expect for gold somewhere ahead -- maybe a few months ahead, maybe a year or so ahead.

This is why I have labeled the present period the initial phase or "the accumulation phase" of the gold bull market. It's the phase where knowledgeable investors are accumulating gold and gold shares and where the public and the majority of funds continue to ignore gold and gold shares.

Gold -- Sharefin, 00:11:43 11/25/02 Mon

Predicting the Price of Gold

This is a summary of various factors helping myself, Joe Investor, to predict the price of gold ("POG").

PRICE TREND: An important factor in predicting the POG, as with almost anything else, is the existing overall trend. As has been pointed out in many helpful charts, gold has been steadily rising for almost 2 years now.

This two-year trend is no guarantee that the POG will continue to go up, but it's an important factor. It should be kept in mind so we don't get caught up with smaller, shorter-term price movements. Let's also see if we can understand the various movements in the price of gold.

Fiat vs Gold -- Sharefin, 00:08:02 11/25/02 Mon

Inflate or Die

Fed Policy -- The Fed knows it -- it's INFLATE OR DIE. And the Fed is inflating, while telling the world almost daily that it will do absolutely anything and everything it takes to ward off deflation. Can the Fed do it?

It look as though they can. The CRB Commodity Index is now within shooting distance of its highest level since January of 2001. The D-J Basic Materials Index has been climbing ever since its October 8 low. It's the same with the Goldman Sachs Spot Commodity Index.

And despite massive shorting of gold by the Commercials, gold continues its fight to stay above 320.

So the Fed policy is -- inflate the money supply, keep telling the world that there will be "no deflation," keep promising that the economy will improve. And all the while somebody, someone, some group, continues the battle to keep gold below 320 so that nobody will realize that the Fed is going all out on the inflation path.

And the miracle of it all -- in the face of massive current account deficits, in the face of the lowest interest rates in 41 years, in the face of the rapidly expanding money supply -- the US dollar continue to hold together. In fact, the Dollar Index has been rising since its November 8 closing low of 104.98.

Why, what, how -- is the dollar holding up? My only answer, and I've said this before -- the dollar is a rotten currency, but all the others are worse. Besides -- the US has the world's biggest economy and the US has the world's most potent military. This perception could change tomorrow, but today that's the way for FOREX (Foreign Exchange) crowd sees it. And the FOREX bunch are known for their sentimentality.

Fiat vs Gold -- Sharefin, 23:46:21 11/24/02 Sun

Malaysia hopes to start using Islamic gold dinar in trade

Is it time for emerging countries that have pegged their currencies to the US dollar or allowed them to shadow it, to start thinking of delinking? Especially at a time when there is increased pressure on the greenback in the face of a creeping recession in the US and of growing political tensions in a post-9/11 environment between the US and especially the Muslim world over differences in the fight against international terrorism.

In the last year or so there have been increasing calls even in the Gulf states, most of whose currencies are pegged to the US dollar, for delinking to be considered as an exchange rate policy management option. However, unless the economic case for de-linking is water tight, emerging countries are in danger of scoring a flurry of own goals, which may prove economically painful and costly.

Malaysia, which pegged its currency to the US dollar in 1997, following the onset of the Asian financial crisis, has confirmed that it has no plans to de-link or re-peg its currency from and to the US dollar. Malaysian premier Mahathir Mohamad, speaking to Arab News recently, confirmed that the Malaysian dollar (the ringgit) will continue to be pegged to the US dollar. “We would like to trade in the euro and the yen. But people are still not confident enough in these currencies,” he explained.
Malaysia has signed 24 BPA agreements to date and has now suggested a way to leverage the mechanism by optimizing the use of foreign exchange through denominating trade under the BPA using the concept of an Islamic gold dinar (IGD). The man who pioneered the BPA and the IGD, Tan Sri Nor Mohamed Yakcop, is optimistic that Malaysia will start using the IGD in its trade with some Muslim countries by mid-2003. Negotiations with countries such as Morocco and Bahrain have already started.

“We are proposing an Islamic gold dinar. Gold unlike paper money has an intrinsic value. You cannot devalue gold like paper money, because you can melt it into ingots or make jewelry. If the Muslim world accepts our proposal for a gold dinar bilateral payments arrangements, not for internal use, this would eliminate the use of the US dollar,” explained Mahathir.

The actual settlement of trade can be done through the transfer of equivalent amounts of gold. This will not involve physical transfer from one country to another, only beneficial ownership in respective accounts, say held with the Bank of England. Under this mechanism a relatively small amount of gold dinar is able to support a much greater trade value.

More interestingly Tan Sri Nor stressed that the BPA could eventually cover multilateral payments arrangements (MPAs). The last time Malaysia tried to propose this, albeit not denominated in the gold dinar, the IMF expressed strong opposition to the idea saying it contravened the fund membership rules, and which was abandoned after the G-77 meeting of emerging countries failed to take it up at one of their summits in New Delhi.

Mahathir, however, is not amused: “They (the IMF) said it was against the rules when we introduced our bilateral payments arrangements. We are still using these and our trade with such countries has increased by 400 percent. The IMF can say what they like. They have no say in this country. They need to seek our permission to come here.”

Gold -- Sharefin, 23:10:22 11/24/02 Sun

Gold 'sale' gathers momentum

Offshore mining companies have control of 70 per cent of the Australian gold industry, following Canadian miner Placer Dome's takeover of AurionGold.

Melbourne-based mining industry consultants Surbiton Associates says overseas control of the industry has jumped from 20 per cent five years ago.

"With further takeovers, including US-based Newmont Mining's takeover of Normandy, it had risen to 60 per cent by early 2002," Surbiton says.

The figure rises to 70 per cent following Placer's successful bid for AurionGold.

Surbiton says North American companies control around 48 per cent of the local industry with South African-based companies accounting for 20 per cent.

Managing director Sandra Close says only one of Australia's top 10 gold operations, Newcrest Mining's Cadia Hill in NSW, remained in local hands and only four of the top 20 Australian gold mines were owned by Australian-based companies.

Surbiton says Australian gold operations produced 69 tonnes or 2.2 million ounces in the September quarter, down less than 1 per cent on the June quarter and an increase of 0.5 per cent on the same period last year.

"Australian gold production has now levelled off at just under 70 tonnes a quarter," Dr Close says.

Gold -- Sharefin, 23:02:00 11/24/02 Sun

That Glitter Is Indeed Gold

There is something strangely stable about total gold imports in recent years: Rs 18,000 crore in 1999-00, Rs 18,800 crore in 2000-01, and Rs 19,700 crore in 2001-02. Underpinning the 45 per cent growth estimate for the second half of this year, is a full year import level of Rs 20,600 crore.

In India, the only international asset effectively available to resident Indians is gold. This is reflected in part by the proportion of retail investment in gold demand being three times higher than world levels till 2000. Most Indians view jewellery as a long-term asset, akin to real estate, and not as a consumable.

Periodic Ponzi Update PPU -- $hifty, 21:24:56 11/24/02 Sun

Preiodic Ponzi
Update PPU

Periodic Ponzi Update PPU

Nasdaq 1,468.74 = Dow 8,804.84 = 10,273.58 divide by 2 = 5,136.79 Ponzi

Up 141.68 from last week.

This was week seven of the Great Ponzi sucker rally of 02.

Thanks for the link RossL !


Go Gold !


Articles on Gold -- Jean Grasser, 09:22:16 11/24/02 Sun

This was wonderfully informative and many sides of the subject of gold and silver. Thank you.

Gold -- Sharefin, 08:13:23 11/24/02 Sun

Prepare for the Breakout - Gold

I am bullish of gold, as is known by readers of my articles. Bob Moriarty, Joseph Granville, Richard Russell and many other influential pundits are bullish of gold. Robert Prechter is bearish of gold, at least over the intermediate term, although bullish longer term. This intermediate term bearishness by Prechter and his Elliott wave organisation is a source of deep disquiet to many actual and prospective gold and gold share investors. As Richard Russell pointed out a few weeks ago, we are only ever dealing with probabilities in this business and the only person who gets it correct all the time is a liar. I believe that Prechter is wrong on this occasion with his intermediate forecast for gold. My studies of the volume patterns in gold stocks over the past year, in addition to the price action leads me to conclude that the bull market in gold and gold stocks is here now. Only time will tell who is right. Prechter's gold bearishness is based on his deflation scenario and while I agree with him over the longer term, that half point drop in interest rates a couple of weeks ago, taken in the context of all that has gone before, tells a very different story. The message that drop in interest rates broadcast to anyone who really understood its implications was this - “We will die, and take everyone with us, before we take the medicine”. The financial authorities responsible for this action know that unless they keep interest rates low and print money like confetti, there will very quickly be gridlock, a credit crunch, implosion and deflation, which would have immediate implications for their position and reputation as individuals. So they have decided to put off the day of reckoning for as long as possible and continue to feed the ever more voracious out-of-control credit monster that they have created. They have decided to take the inflationary way out, but the problem is that the demands of this monster are now so great, and growing exponentially, that no matter how many bonds they create, no matter how much money they print, in the end they won't be able to keep up with it - and international investors can only be soaked so much, especially when they wake up to the fact that they are about to get creamed by a falling dollar.

These are very unusual times. Businesses in the USA and many other countries have very little pricing power. The moment they try to raise prices, in swoop the South-East Asian products manufactured in sweatshops - beat that for competitiveness! Isn't globalisation wonderful? You want free markets - you got ‘em! But the US financial authorities have one last card to play to overcome that problem: collapse the dollar and price out the imports! This also has the advantage of collapsing the value of US dollar-denominated investments held by foreigners, effectively defrauding them out of a sizeable chunk of their investments - this is the way to deal with gormless creditors!

There's just one problem with this crafty plan, which will take the edge of it a bit. Other countries have thought of it too, hence the phenomenon of what is known as “competitive devaluation”, in other words, the global ballooning of un-backed money supply and liquidity. More money chasing the same amount of goods, not just in the US, but in a lot of countries. Inflation. The US authorities, by mushrooming the money supply and crashing the dollar against other currencies, may be successful in improving the pricing power of US businesses on the domestic front beyond their wildest dreams - by creating hyper-inflation. Whichever way you cut it, paper money and the vast array of IOU's such as bonds, shares etc will become increasingly worthless. That only leaves one money - real money - gold.
Eventually all this will lead to a monumental credit crunch, in effect, a global default. Vast debits and credits will simply have to be erased, written off. Maybe those people in the states taking on huge mortgages aren't so dumb after all - they may end up on the street, but they are currently enjoying assets that they may never have to pay for! This will be the time of the great deflationary depression, a necessary purging process that has to be faced sooner or later. The fact that they keep engineering ways to stave this off for as long as possible only ensures that it will be that much worse. This will be the corrective phase that lays the foundation for renewed real growth.

While gold has marked out a large triangular pattern, which I believe to be a consolidation area, not a top, since it peaked in June, many investors have been driven out of gold shares by fears of the power of the “anti-gold cartel”, Prechter's prediction or plain impatience. The result is that many gold stocks, particularly the juniors, are once again trading at bargain prices - particularly considering what is likely to transpire in the near future. Regarding the alleged conspiracy to cap gold's advance at a “Maginot Line” at $325, I have this to say; a bunch of banks, even if backed by a government, are not going to stop a primary bull market in an important commodity. The banks said to be involved in any case face a severe problem with derivatives and huge debts that will turn sour. British readers may recall a fiasco in the early 90's when the British government tried to defend the pound and keep it in the European Exchange Rate Mechanism. At one point, in desperation, they raised interest rates 5% in one day to no avail - the power of the market was too great. This conspiracy to cap the price of gold, if it exists, has about as much chance of success as a hedgehog has of crossing the London orbital M25 on a Friday evening. I view the large triangle that has formed in the gold chart since June as a consolidation, pure and simple, which has unwound an overbought condition as shown by the 200-day moving average catching up with the price, thus putting gold in a good position technically to make a major breakout from the massive base formation which has been evolving since 1999. The psychological importance of a breakout from this base, which will be indicated by a move above $340, cannot be exaggerated. A huge number of investors and a vast amount of capital will realize that this bull market is for real, it will no longer be a matter for debate, it will become an established fact. At this juncture, holders of bullion and gold stocks will naturally be loath to sell. A fresh wave of buying interest will encounter an extreme paucity of bullion and especially of gold stocks. It is worth pointing out here that the total value of all gold stocks in the world does not exceed the capitalisation of Microsoft, so there will be an extreme supply/demand imbalance.

While gold itself has basically moved sideways since its June high, many gold stocks, particularly juniors, have drifted back and now represent excellent value, particularly as a very big rise is believed to be drawing close.

An advantage that buyers of gold stocks have at this time is that relatively close stops can be set to protect capital in the event that I am wrong and there is a breakdown, with better than usual odds that they will not be triggered by a whipsaw move. This is because, while gold has consolidated in a triangle focusing in on the $320 price area over the past few months, many stocks have also stabilized around a price level, and can therefore be bought for a big move with relatively close stops. I will provide a list of promising stocks with their stop-loss levels shortly in another article.

Gold -- Sharefin, 08:08:30 11/24/02 Sun

NBR Market Monitor - James Dines, Editor of "The Dines Letter."

KANGAS: Which way do you think the cards are stacked, for the bulls or the bears? DINES: Personally, I think it's to the bears because there is a sort of Damocles hanging over the market in the form of terrorism. The world is a terrorist candy store. We just had a very explicit threat from Osama bin Laden that there is horrific events coming. And it's difficult for me to be complacent at a time when something like that could break loose. KANGAS: What is really bullish that you see happening now? DINES: The most bullish thing I can see is that in the face of bad news, and that is, of course, you've got a real estate bubble that is about to plunge, the banking situation in the world is horrendous. You've got an overpriced stock market, an international recession. And in the face of that the market is moving up. And good action in the face of bad news is traditionally a positive sign. But remember, it must go, we must have a penetration of the father of all bear markets downtrend line.
DINES: The secret of gold stocks is the discovery I made in 1960 that golds move opposite to the stock market. We call it internally the Dines rule of gold countertrend, or DIGROC. KANGAS: Right. DINES: And they usually move, but not always, opposite to the rest of the market. KANGAS: Are you still holing them? Would you buy more? We're running short on time here. DINES: We had a crash in the stock market and a rise in the golds early this year. They've both moved flat every since. I'm waiting for a breakout. We are still holding our golds. We are up for the year on them when a lot of other people have lost money. And we are now in the process of holding and buying them (UNINTELLIGIBLE). KANGAS: Are you buying anything else, Jim? We have 30 seconds. DINES: Yes, I'm buying Newmont, which is the big one, which is the world's largest gold mining company. KANGAS: Strictly golds, then? Strictly golds? DINES: We're buying golds. Anglo American Corp. around $14 and Heckler (ph) around $3.50.

Gold -- Sharefin, 08:02:37 11/24/02 Sun

GFI up as fundraising put on ice

In a statement released on Friday, Gold Fields' chief executive Ian Cockerill said the F-1 was withdrawn because “current market conditions are not favourable”. “In addition, we believe that Gold Fields' shares are currently undervalued compared to our peers. The expectation of an offering at this time placed additional pressure on our share price at a time when, we believe, the outlook for gold is particularly positive,” said Cockerill.

Gold -- Sharefin, 08:00:11 11/24/02 Sun

Goldcorp confirms Placer dalliance

In addition to remaining hedge free, McEwan is adding to the company's gold reserves by buying bullion. On a cash flow per earnings basis, Goldcorp rates itself fourth behind Barrick, Newmont and Placer Dome; but on an earnings per share basis, Goldcorp is second behind Placer Dome. The major mining companies are struggling to finance their growth and are capping their upside as the banks want hedging, McEwan said. He criticises growth for growth's sake - a feature that one analyst at the Canadian Mining Investment Conference said would ultimately result in the demerger of companies like Placer Dome.

Gold is money
McEwan believes the world is enjoying the early stages of another gold boom. The rediscovery of ‘gold as money' is starting to grip the imaginations of investors keen to expose themselves to the potential for upward movement in the price. For instance, a T-Bill will pay investors a 2 percent return over a year whereas a $10.00 move in the gold price during a single day is equivalent to a 3 percent return.

Against this background, Goldcorp is attempting to produce gold as cheaply as possible, buying ounces in the ground for about $11 per ounce, producing the gold at $60 per ounce and selling it at $300 per ounce: “That is the essence of Goldcorp today,” McEwan says. Another aspect of the business, however, is the building of a bullion inventory. Goldcorp's bullion inventory in the third quarter of this year reached 178,911 ounces, a level achieved by holding back 78,751 ounces of production and buying 100,000 ounces more of bullion.

McEwan reckons holding gold in this way will become a useful bargaining chip with those companies keen to gain access to bullion amid hedge book demands. He also, somewhat jocularly, pronounces a strategy to own more gold than the Bank of Canada as well as the Bank of England, the central that contraversially sold down several hundred tonnes of gold at the bottom of the market - evidence of central banks' perfect market timing, McEwan adds.

Gold -- Sharefin, 07:58:23 11/24/02 Sun

The International Forecaster

America is sitting on the precipice of failure. We are not defeatists we are realists. We are about to embark on a war that is to enrich conspirators and perhaps end up destroying civilization. As we've known it, the American public and the world has been the victim of the biggest scam in recent history, which is fiat money and perpetual war for perpetual peace to cover the deceit and destruction of that specie. One way or the other we face terrible tribulation. What will be the event that finally triggers the collapse? We don't know. What we do know is there are many things that can cause it that we know of and many things other than what we expect. 75% of the reserves of foreign countries are denominated in dollars. We believe as the economic and financial situation worsens those dollars will be sold for local currencies and gold. A particular case is China, which has no allegiance to anyone but themselves. A sale of $200 billion and a purchase of gold in that amount would collapse the American economy and send gold soaring. America has its military settled into the Middle East and would be of little use as a destructive force to retaliate against the Chinese and perhaps others. China is moving to back its currency with gold. A nation that saves close to 20% of its income might also be large buyers of gold. As you can see China could easily be the catalyst that brings about higher gold prices and a return to monetary sanity.

JP Morgan sounds like a broken record in their repeated denials that their gold derivatives position is in serious trouble. We released the numbers two weeks ago; they were picked up by professionals in Europe and made it into the media everywhere except in the US, which speaks volumes regarding our controlled media. Everyone in the world knows the GATA story and the rigging of the gold market except the Americans. JPM lies about most everything just as the rest of Wall Street, CNBC and our government does. JPM has no reputation left. Their retort to accusations of serious financial problems is always the same, "false and irresponsible." JPM's risk position is not neutral. They are short gold and every time gold rallies they and others, such as Goldman Sachs, Citigroup and AIG, attack the price. There is absolutely no doubt the group is operating under the protection of the US government and central banks. Of course, we are irresponsible requesting and asking for exposure of their gold derivatives position just like we don't have a need to know what the "Working Group on Financial Markets" is doing. Everything is a big, dark secret and we know from experience that every time there is a big dark secret something bad or illegal is being covered up. Why would JPM take such a major interest in gold derivatives, especially to the extent of holding two-thirds of all the gold derivatives held by 370 banks plus others that is four times the exposure of Citigroup? There is a reason. Of course, there's a reason and that is market manipulation. You heard it here first: JPM will go under. The government may save them but they'll become insolvent once gold breaks to higher levels. Then we'll find out the real story behind why 15,000 to 29,000 tons of official gold holdings have been sold.

Business for the bullion banks is deteriorating largely because of the fall in hedging business. Producers have become more cautious as gold refuses to fall back to $300.00 an ounce and falling dollar interest rates make it unprofitable for mines to hedge or for speculators to sell the metal short. Producers are covering their hedges, which has put a floor under gold. They have gone from being a net seller of 500 tons a year to a net buyer of 500 tons a year, or a 1,000-ton swing. Investment demand is up 12% for the first half of 2002. The only conclusion one can come to is that in order for gold to stay at current levels of $320.00 an ounce, central banks have to be sellers of the metal or are going naked short the market, knowing, if they have to, they can cover if they have gold in reserve. The problem is they may not have the gold to cover.

As our President promotes perpetual war for perpetual peace as a cover for global financial and economic collapse, the Gold Dinar has arisen as an Islamic trading vehicle in an attempt to avoid the use of currencies. This would not be a gold standard. It would be a method of trade, which was last used when President Nixon decoupled gold from the dollar on August 15, 1971. Since then all currencies have become fiat except the Swiss franc. Dinar based trading accounts will be settled quarterly in dinars, between trading partners, as we have seen gold can be manipulated, as fiat currencies are, but not easily. Unfortunately gold is the only alternative that has weathered the test of time. A basket of commodities has also been recommended by some experts such as democratic presidential hopeful Lyndon La Rouche, so that is another possibility. Although it's been untried. The move to the dinar will be simple and with the Bush administration's attitude toward Middle Eastern Islamic countries and the hold the dollar has on the Islamic World, we see the dinar as a very viable alternative. We would expect a host of other countries would join the dinar in trade, sick and tired that they may be of dollar imperialism and American elitist military adventurism. This is borne out in Islamic countries such as Saudi Arabia, which has withdrawn hundreds of billions of dollars recently from American investments. The adoption in trade of the gold dinar is forbidden by the IMF and World Bank, thus they would have a major competing currency. This would be a major blow to the plans of the new world order and perhaps the demise of the IMF and World Bank. What you are witnessing is extremely important. Besides events concerning Iraq, there has been a program of intermediation by the US and UK against Saudi Arabia, which really have them furious. Rand Corporation has declared Saudi Arabia as the mother of all terror and called for the overthrow of their government and other Arab dictatorships. Then there was the CFC Terrorist Financing Report, headed by Hank Greenberg, ex-CIA and president of money launderer AIG. It attacks Islamic charities as financers of al-Qaida. As you can see the Islamic world and many others have much reason to move to a gold dinar and defy the US, UK and its elitists. If it works it could take the entire fiat money system down and, of course, gold would rise considerably higher.

MOSCOW. Nov. 15 (Interfax) - Oleg Vyugin, first deputy chairman of the Central bank, does not rule out that the gold and currency reserves may reach $48 billion before the end of this year. Earlier, the Central Bank projected the gold and hard currency reserves at $44-45 billion at the end of this year. However, they reached $47.1 billion as of November 8. "I think we will maintain this rate in the near future," Vyugin said. He said he does not rule out that the amount of gold and hard currency reserves may increase in December. Vyugin attributed this to favorable conditions on the world oil market.

China has granted approval to its four biggest state banks to import and export gold after opening its first Communist-era gold exchange last month, though quotas have not been fixed, industry sources of Reuters said on Monday. China's foreign trade ministry would allow the Bank of China, Industrial and Commercial Bank, Construction Bank and the Agricultural Bank to import and export gold, they said. But these banks would still have to go through the central People's Bank of China to trade gold as the precious metal is regarded as a strategic resource, they said.

Gold -- Sharefin, 07:47:15 11/24/02 Sun

Gold Again Glitters

Thank Osama bin Laden for the gold rally.

The glittery metal was practically dead for 14 years. It was shunned as a core investment. It was belittled as an investment for losers and Chicken Littles. It was cast to the scrap heap of dated survivalist ideas, in the same pile with fallout shelters and freeze-dried foods.
It is consequently a rebound that is based more on emotion than the fundamentals of supply and demand. "The fundamentals for gold still stink," said John C. Tumazos, a metals industry analyst with Prudential Securities in New York.

Sales of gold coins, Tumazos said, quickly slumped after the Year 2000 computer scare. Electronic component manufacturers have cut their gold purchases by 33 percent over the last two years. Worldwide jewelry sales have slipped 25 percent over the last five years. And production from gold mines - despite a wave of mergers within the industry - still outstrips supply. Although gold bars and coins account for roughly 60 percent of the world's supply, other market segments - including jewelry - are large enough to influence the direction of prices, experts said.

Yet today, no segment of the tangible gold market looks strong. "If future gold prices depend on the jewelry market (about 20 percent of the global market), then this rally is over," remarked James Vail, manager of the ING Precious Metals Fund in New York.
"There's this myth that the gold market is dominated by bankers in London, Zurich and New York. But it's more a product of the fears of large and small investors around the world," said Peter L. Bernstein, a New York economist and author of "The Power of Gold: The History of an Obsession." And, if gold purchases are a yardstick for jittery nerves, then investors in India and Japan rank among the most worried people on earth, market observers said.
Placer Dome recently bought Orion Gold.
Today there is a 600-ton gold surplus - valued at roughly $5.9 billion - on the global markets. And Barrick Gold alone expects to add another 32,000 tons to the supply by 2006.

The world, as a result, still has - and is likely to have in the future - more gold than it needs, analysts say.

"Buying gold is tricky," Pollitt said.

What a pathetic mismatch of incorrect comments on gold.
The author obviously hasn't a clue about the gold markets and has just pieced snippets of information incorrectly together.

ChartsRus -- Sharefin, 07:37:53 11/24/02 Sun

ChartsRus -- Sharefin, 07:34:49 11/24/02 Sun

Charts Online

Gold -- Sharefin, 07:28:58 11/24/02 Sun

Why the "Gold bugs" are bugged about their precious metal.....

Gold made a push above $320 an ounce Friday, giving heart to some investors who think there are behind-the-scenes forces trying to keep a lid on the metal's price. Writers of gold newsletters believe there may be something to this conspiracy theory. Mark Hubert comments...

The goldbulls are snorting and suspicious. For the longest time the price of gold seems to have hit a ceiling around $300 an ounce, now one of the best newsletter editors in the business thinks something odd is going on. Richard Russell say some one some group, some body does not want gold to go above that price, possible suspects; mining companies which may have committed to sell gold at a price lower than $320 an ounce or commercial users that've shorted gold & loose every time the metals price moves higher - who knows, Russell himself does not know for sure either, but he says manipulation in the price of gold is obvious. It's being artificially kept down and he says buy it now at what he considers these dirt cheap levels. His long term view - the market cannot be controlled forever, gold eventually will rise. Newletters that focus on the gold market are understandably focused on this controversy most of them also seem to think that there's something going on, three quarters of them are bullish on gold today.

Gold -- Sharefin, 07:46:30 11/23/02 Sat

Real Rates and Gold

In recent weeks something spectacular and noteworthy has transpired that we haven't witnessed for over two decades.

Real interest rates have plunged negative!

The implications of this rare development are profound and extremely important for investors worldwide. Much of the usual investment wisdom is turned on its ear in negative real rate environments.

Not surprisingly, the only major asset class that thrived in the big-government era of the 1970s was commodities. Gold, shown on the graph above, launched its most spectacular multi-year mega-bull market of modern times as investors fled to hard assets with real intrinsic value. Gold ultimately exploded to bubble levels even higher than the monthly data on the graph above indicates. Its performance was phenomenal!

Fiat -- Sharefin, 07:13:43 11/23/02 Sat

N Korea bans use of US dollars

Communist North Korea will stop using US dollars from next month, China's Xinhua news agency said, following a US decision to halt oil shipments to Pyongyang.

The move highlights racked-up tensions between Washington and Pyongyang after North Korea, branded part of an "axis of evil" along with Iran and Iraq by US President George W Bush, admitted it was pursuing a nuclear weapons program.

North Koreans and foreigners would have to convert dollar accounts at Pyongyang's state-run Korean Trade Bank into euros or other currencies, Xinhua said on Friday, quoting a letter from the state-owned bank in charge of foreign-exchange business.

"Hotels, foreign-exchange shops and foreign-related services will receive no US dollars from the start of December," a staff member of the Korean Trade Bank was quoted as saying.

US dollar accounts would be automatically changed into euros if account holders made no declaration by the end of November, the bank letter said.

The dollar ban was part of "political means" to counter the pressure from the United States over the nuclear issue, Xinhua quoted an unnamed British diplomat as saying.

Gold -- Sharefin, 23:45:13 11/22/02 Fri

Environmentalist try to block company's gold mines in Nevada

Environmentalists have filed a lawsuit against the federal government to try to block a company from expanding gold mines in Nevada that they say threaten water resources and taxpayers.

The environmentalists claim Newmont Mining Corp., the world's largest gold producer, will drain billions of gallons of water from northern Nevada's high desert in violation of the Clean Water Act.

In their lawsuit filed Wednesday, opponents asked a U.S. District Court judge in Reno to overturn the Bureau of Land Management's approval of the projects at the Gold Quarry mine and new Leeville mine along northeast Nevada's Carlin Trend -- one of the richest veins of gold in the world.

Silver -- Sharefin, 23:23:23 11/22/02 Fri

Reflecting on Silver

The Shine in Silver

Solid & Tangible
It can be taken for granted that metals are safer than other commodities, but are not necessarily a good investment at any given time. They are safer than other commodities for the simple reason that they not will spoil. Only gold and silver stand apart from other metals and have done so for thousands of years. That's not likely to change. The other precious metals will be priced according to the conditions. For example, platinum will remain rare, but if its usage fails to meet expectations, the price may decline. Of course if war requires more raw materials, then almost all metals would be in higher demand. Gold and silver, however, are the metals for those who wish to preserve their wealth.

Production Factors
Working strongly in favor of silver is the relative decline in production from a very long-term perspective. Silver stockpiles have declined dramatically during the past 13 years. Going back in history to 1650, the world was producing 44 times as much silver as gold. But now the world only produces about seven times as much silver as gold.

In all this time, consumption of silver has far outstripped consumption of gold. While the supply of gold as the monetary metal can remain adequate for at least a generation, this is not true for silver. The shortfall production of the consumption continues, even under recessionary conditions. It is very important to remember that during an economic downturn, silver production from copper, lead, and zinc, would be seriously curtailed. This fact was mentioned in a recent special Hightower report on silver.

This drop in mining other metals would mean an automatic curtailment of 75% of the source material silver of production, because nearly 75% of silver is mined in conjunction with copper and zinc and other metals. To increase silver production substantially, production of those other metals would have to be increased.

I concede that a depression would cut down the consumption of silver. However, the shortfall would remain intact. This has been evident the last couple of years. So every month, month after month, year after year, we are eating away at the remaining stores silver. In mathematical terms, it is a very interesting curve, because as a function of time, less is available. Thus, a larger amount in percentage terms is used as the months roll by.

Increased Merit in Silver Usage
As the world's technology advances, the consumption of silver advances. Today photography consumes most of the silver, tomorrow it will be electronics and other new technologies that may rival photography in their demand. Two areas that have recently been reported are superconductivity and the use of silver as a replacement for arsenic as a wood preservative.

Silver is Money

At the same time, silver is still money, regardless of what the central banks say. We know this, because we know that are several hundred million dollars in silver holdings. It plainly states on the face of those silver coins that they are money. These coins are accepted without question as money. In this manner, I think silver has a monetary role to play.

Silver is Affordable to All
How many average people can buy 20 ounces of gold? How many can afford a 10 oz. bar of gold? How many of the world's population can afford to buy even one ounce of gold at $320 per ounce? There are millions of working-class people that are not likely to be satisfied to hold as little as one gold coin. They would find it hard to negotiate for their needs. The sum is too large to negotiate for most daily needs. Gold is the monetary metal for the larger sums of money and for the rich. I believe that silver still has a role to play as money for the millions who cannot spend very much for total security, but still can spend something. Silver provides that security. They will have some money that will always work for them. So I repeat, it is not unreasonable to think that in the not-too-distant future, instead of selling a ratio of over 70:1, silver may well sell at a ratio of 10:1.

The Future for Silver

As the uses for silver continue to increase and the shortfall is accentuated, I believe when the right day comes, the correction in silver price will be even more dramatic than it was in gold after the signing of the Washington agreement. I believe the rising curve in silver will be breathtaking.

When this will happen exactly we do not know. I do believe it could begin in 2003. Stocks of silver are dwindling and it is beginning to show. Probably the largest supply of silver is in India, but they are selling only tiny amounts relative to their total holdings. Millions of peasants hold silver for a last ditch emergency. This was verified in part by the latest GFMS study, which indicated silver movement within India due to natural disasters within the country.

All in all, the future for silver is subject to more influences than probably any other commodity, and certainly to more factors than gold. Whether this happens over the short-term or not, one must not lose sight of three major factors as far as silver is concerned. I like to call it the ABC's of silver investing.

A. The shortfall is about 100 million ounces per year.

B. Silver is being consumed and not stored like gold.

C. Sooner or later we will run out of silver stockpiles. We're not too far from that day. When that day comes, there could be a panic to buy silver. A ratio of 10:1 is a fairly reasonable expectation.

As I reflect on the merit and value of silver, both historically and in present-day terms, I wait in expectation for that “Day of Ah!” will surely come for AG.

Fiat vs Gold -- Sharefin, 21:55:03 11/22/02 Fri

China and the Fall of the Dollar

China and the Fall of the Dollar

My personal views? I continue to think the dollar will get weaker against the euro, but slowly and over time. Japan has publicly declared its intention to weaken its currency against the dollar, and almost every Asian country has exhibited a willingness to devalue their currency against the dollar in order to stay competitive with each other and especially China.

The dollar may not significantly crack until China decides to let their currency rise against the dollar. When do they do that? When they think their internal structural problems are sufficiently dealt with and they have the beginnings of a real consumer market within China.

China is the key. One headline this week says that Japan is increasingly moving its production to China. Mexico (I swear this is true -- I couldn't make this up in my wildest dreams!) is actually importing Mexican sombreros from China for the tourist trade. Every nation feels forced to keep their currency competitive with China in order to sell to the US.

With the huge trade surpluses China is currently running, at some point in the future, they will decide they have enough US paper, and want more dollars for their labor and goods. When they feel secure in their international competitive advantage, they will pull away from the fixed dollar link, and that will be the beginning of the fall of the dollar that so many have predicted. Until then, the dollar is likely to go sideways to down, with rallies from time to time.

And yes, this is quite bullish for gold over the long term.

Gold -- Sharefin, 19:30:24 11/22/02 Fri

Harmony Gold sees rising gold price

The gold price is likely to rise in 2003, despite the sluggish global economy, as supplies become tighter, the CEO of South Africa's Harmony Gold, the world's fifth largest gold miner, said on Thursday.

"I am bullish on gold prices," Bernard Swanepoel, told Reuters on the sidelines of the Global Gold, Diamonds, and Precious Metals Forum in Frankfurt. "Even if demand falls supply will be down more."

"New production is dropping and few new resources are coming through the pipeline," he added. "The easy gold mines are all gone."

"I am looking for a sustained rise in the gold price over the next 12 months. If we reach $350 (an ounce) I would be happy," he said, adding gold had the potential to reach $375 an ounce.

Gold -- Sharefin, 18:52:16 11/22/02 Fri

Central Banks Hold Key to Gold Price As Demand And Supply Move Apart, But Why Should They Sell?

Demand is one thing, supply is another. At the Gold Fields Annual General Meeting earlier this month, Chris Thompson pointed out that exploration was at a very low level and very little new production was coming on stream. As a result reserves were not being replaced and there was bound to be an industry -wide decline in production starting in 2003-4, he predicted. He went on to suggest that the gap between demand and supply might be filled by further sales from central banks. Sure, they might, but a couple of other factors have to be taken into account. First, the bosses of central banks like to keep their jobs. To be seen selling gold into a rising market to the extent that fingers can be pointed and accusations made about unwise investment decisions is not the best way to keep such jobs.

Most of them are not as brass necked as Chancellor Brown who still claims, against all the odds, that he did a good job in selling a large slice of the UK's gold assets at an average price of around US$275/oz. Second, paper currencies are under pressure from threats of war and a continuing economic downturn. In the Far East there is talk of trade financed by a gold Islamic dinar and a gold-backed Chinese currency. In these circumstances most central banks would want to hang on to their gold reserves. And if they decide so to do there is only one way in which the price of gold will move as the demand/supply ratio gets further out of kilter. We live in interesting times.

Gold -- Sharefin, 18:23:30 11/22/02 Fri

Gold and currencies

I have long been vehemently against conspiracy theories of the sort
held by GATA (Gold Anti-Trust committee). However, there are some
*very* strange goings-on with gold. I have never seen any commodity
hold the incredibly tight trading range gold has had for the last
six months. If memory serves, this commodity has been between $310
and $325 for the last six months. Every time it threatens to rise
near the $330 mark, "something" just flattens it. It drops back and
goes sideways.

I'm surprised that no one aside from GATA appears interested in why
something which is normally considered to be a most volatile investment
has less variation in six months than the S&P 500 has in two weeks!!
The plight of the dollar versus the Euro has also been odd and constrained.
The dollar is "suddenly" stuck in a very narrow range such that the Euro
only varies between 97 cents and 101 cents. As soon as the Euro just
lips over parity to 101 cents, it, too, gets "beaten" back down.

Never in the last two decades have I seen stocks make 20% moves up and
down in a month while volatile commodities appear to be "controlled" in
extraordinarily narrow ranges. The S&P 500 since May has acted like one
of those 3 or 4 beta Nasdaq pink sheet stocks. Do any of you have an
explanation for this most unusual inversion of the normal state of affairs?

Gold -- Sharefin, 19:43:10 11/21/02 Thu

Jill Leyland: World Gold Council

MINEWEB: Across to London now where Jill Leyland joins us from the World Gold Council. Gold demand trends is the focus of a report that you put together today, Jill. On the bull side, certainly even usually conservative and usually non-gold-friendly individuals, like my colleague here, David Shapiro, are suddenly turning into at least cautious gold bulls. Is your interpretation of the demand trend backing up this change?
JILL LEYLAND: It's nice to hear your colleague is changing his mind. The demand was still quite weak in the third quarter, but good point was that it was a lot less weak than in the earlier part of the year. And indeed, there seems to be an improving trend which, from the indications we have - particularly with regard to India, which is the world's largest gold market - seems to have continued into the fourth quarter. The main component of gold demand, as you may know, is jewellery and this is quite sensitive to price, in particular to price rises. In Asia and the Middle East, people hold off buying when the gold price is rising, or indeed when it's volatile, in case it falls tomorrow. Once the price stabilises, they come back and buy again. And this is really what we've seen this year. There was a strong rise in the gold price, 14% or so in the first half-year, and then it levelled off in the third quarter in US dollar terms, even though It remained volatile for a while. So we did see consumers starting to get used to those higher prices and coming back to buy.

MINEWEB: There are 26 tons in Vietnam, and you contrast that with China where, according to your figures, the investment there is less than half a ton. But that might change. Maybe you can take us through what could happen in China, and why?

JILL LEYLAND: The whole gold market in China has been quite heavily regulated and controlled by the state. But, a few years ago, the pressures of liberalisation started. Nothing in China happens very quickly and the Chinese always proceed, in their liberalisation process, in anything, whatever it is, step by step. So it's been done quite cautiously. But we are seeing the gold market open up, and of course it's epitomised with the opening of the Shanghai Gold Exchange a few weeks ago. We are not quite there yet for investment, because there are still some restrictions on it. People for example at the moment can still only sell gold back to the People's Bank. They can't trade it freely. So we are still working there, we are hoping that there will be further steps to take and, when they do, yes, we will hope to see then some greater investment in gold in China.

MINEWEB: Jill Leyland, from the World Gold Council. David Shapiro, just consider this for a moment. Is it one in every six people, or one in every four people that are Chinese, on the planet? Conservatively, one in every six. China is much bigger than Vietnam, where the investment demand was 26 tons in the first nine months of this year. China is half a ton. Once the Shanghai Gold Exchange was opened, it allowed Chinese retail investors to go and buy bars of gold for the first time. As Jill explained, you've got to sell it back to the central bank but, still, it means you can buy it for investment purposes. Can you imagine if that starts taking off in China? They don't care how much gold is in central banks.

DAVID SHAPIRO: I think the case for gold is building up. The price has stabilised, it's really holding. There is no reason to hold the dollar. Interest rates are low. So even the cost of holding is very low now. So I think there's a strong case and geopolitical factors are still uncertain. I think the market is looking very strong. We've just got to wait for gold shares to pull back. It's an ideal time to come in.

Fiat vs Gold -- Sharefin, 08:41:05 11/21/02 Thu

A strategist wonders about terrorism

Longtime market watcher James Dines says that when it comes to the threat of terrorism, the market's memory is short, and perhaps dangerous.

"It is my instinct that terrorism will rear its head again," says the editor of The Dines Letter. "I think we are going to have a terrorist event, and I think this market is in deep trouble."

Almost two weeks ago, Dines took the step of spotlighting this threat in his newsletter, which has been published since 1961. Days later, a report that Osama bin-Laden was alive received worldwide media coverage. U.S. authorities also endorsed the reports.

In contrast to Dines' comments, most stock market professionals are playing down the importance of terrorism. Indeed, the Nasdaq has risen some 30 percent since early October.

Dines, whose 1996 book "Mass Psychology" examines investor and consumer sentiments and their impact on the market, sees what he calls a "classic rejection" of a theme that will haunt markets for some time to come.

"We are frankly alarmed that something spectacular is about to happen, in several countries, possibly all of the six that bin-Laden specifically warned against: America, Australia, Britain, Canada, France, Germany and Italy," says Dines.

The newsletter editor acknowledges the terrorism threat has, until recently, suppressed stock-market prices. Some estimate $8 trillion of lost wealth in the stock market slide that began in January 2000, when the Dow Jones Industrial Average reached a peak.

Dines says the ability of the spot gold to hover around $320 an ounce is also significant. Gold, which traditionally moves counter to the stock market, has been clawing its way back to the $320 level throughout the rally in stock that began in early October.

"Golds are not in the news at all, completely ignored, so our bullishness would attract almost no attention," says Dines. "We are not at all pounding on the table, but it looks to us as if there finally might be the beginning of a gold shift to the upside."

Gold -- Sharefin, 01:04:09 11/21/02 Thu

We Care About You

Well, it is happening again. The gold community is about 45% in total panic and throwing their shares on the market. Apparently they fear and/or expect an end to the positive market in gold for various reasons.

Yesterday, during the presentation made on TV by Federal Reserve Chairman Greenspan, the Exchange Stabilization Fund was busy in all market futures "stabilizing" in order for the Chairman to look good. This is standard operating procedure when the Chairman of the U.S. Fed speaks if the markets does not applaud with a higher DJII and higher U.S. Dollar Index.

Gold -- Sharefin, 00:54:23 11/21/02 Thu

Why Gold Bugs Are Swarming Again

Investors are rediscovering gold. And gold-mining stocks' recent strong performance has landed the group back on the list of industries with top Standard & Poor's Relative Strength rankings. Year-to-date through Nov. 15, the S&P Gold subindex rose 9.1%, vs. a 20.1% decline for the S&P Super 1,500 (the combined S&P 500, S&P MidCap 400, and S&P SmallCap 600).

S&P analyst Leo Larkin maintains a positive investment outlook for gold stocks. He notes that a sharp decline in interest rates since January, 2001, has made short-selling of the metal by producers and market speculators less profitable. Short-selling has been a major negative for gold prices in the past several years.

Larkin has several other reasons for his positive outlook. He says equity markets are less likely to offer as much competition for investment demand. Double-digit rates of return for equities from 1995 through 1999 lured investor dollars away from gold and provided immense competition for the yellow metal.

SHINING THROUGH. Larkin also cites rising commodity prices, reflecting consolidation in commodity-producing industries and a recovery in global economic growth. Through November 11, 2002, the Bridge Commodity Research Bureau (CRB) Commodity Price Index was up 19.1% after a 16.3% drop in 2001. A rebound in the global economy and large increases in the U.S. money supply should lift commodity prices in 2003, according to Larkin. And that means inflation will still be a factor for investors to contend with -- playing to gold's traditional role as a hedge against rising prices for goods and services.

As for supplies of the metal itself, Larkin notes that the deficit between gold production and consumption will widen as output declines and demand increases. The low gold prices of the past several years have led to sharply reduced exploration for new mines, and will result in lower production even if the metal's price rises dramatically.

Gold -- Sharefin, 22:26:48 11/20/02 Wed

Royal Precious Metals glitters thanks to gold

With investors seeking safety from battered stock markets, and growing anxiety about a possible war between Iraq and the United States, gold bullion has gained about 14 per cent since the start of the year.

The combination of a rising gold price and market jitters has pushed up the value of gold stocks, making precious metals funds one of the few shining areas.

And within the category, the $218.5-million Royal Precious Metals Fund has been a standout. It returned 80.8 per cent for the year ended Oct. 31, versus 46.2 per cent for the group average. That made it the top performer in the category and among all funds available in Canada.

"I attribute the performance to the fact I am very much committed to a higher gold price," says manager John Embry, vice-president of Canadian equities at Toronto-based RBC Global Investment Management Inc.
Going forward, Mr. Embry remains very upbeat on the sector, but has reduced holdings such as Meridian Gold, which he believes have become too expensive.

Instead, he has focused on low-margin producers that will stand to benefit more from a higher gold price. This accounts for his acquisition of names such as Kinross Gold Corp. and TVX Gold Inc.

Mr. Embry argues that gold stocks, having risen from their lows in late 2000, finished the first leg of a bull market last May. They went through a corrective phase over the summer and fall, and are poised to start the second leg. But, he admits, it all depends on a much higher gold price.

How much higher? He sees gold rising to $400 (U.S.) an ounce by mid-2003 from about $319 now, and then hitting $500 "should conditions deteriorate sufficiently."

A long-time gold bug, Mr. Embry encountered some unwanted publicity last June when the media picked up a report he wrote for internal consumption. In it, he pointed to growing evidence of gold price manipulation since 1995. He argued that central banks and so-called "bullion banks" that have been short-sellers have a common, vested interest in keeping the gold price low.

The report proved fodder for conspiracy theorists. Today, Mr. Embry is reluctant to discuss the report, hinting that it caused some embarrassment to the Royal Bank. But his conviction remains unwavering. "The fundamentals behind gold are getting better and better," he says.

His argument is posited on a weakening U.S. dollar and the U.S. current-account deficit, which is 5 per cent of gross domestic product. "When a country runs that kind of deficit, the currency usually buckles."

Mr. Embry notes a correlation between gold and the greenback. "If the dollar is seen as a less attractive currency, not all the money will move into the euro or yen. At the margin, some of it will move into hard assets, such as gold."

The second leg of the bull market will be apparent as investors move into gold stocks in a bigger way. "This leg could last a couple of years," he says.

Acknowledging the sector is notoriously volatile, he adds that the third leg could end up in a speculative blow-off, much like tech stocks. "But it all hinges on a higher gold price," he says, arguing that a combination of a weakening U.S. fiscal condition, record-low interest rates and dismal equity returns will prompt people to buy bullion directly.

"The competition for gold is materially less than it has been for the last 20 years," he says. "As these problems manifest themselves, people will view gold more favourably."

Gold -- Sharefin, 22:17:35 11/20/02 Wed

LionOre joins Aussie gold rush

With the global consolidation wave having pretty much devoured the upper echelon of the Australian gold sector, the country's group of emerging gold producers is already sprinkled with an international flavour.
Global gold majors Newmont Mining, Barrick Gold, AngloGold, Gold Fields, Placer Dome and Harmony Gold have between them snapped up more than half of Australia's less than 50 operating gold mines through their mergers and acquisitions over the past couple of years. Now a significant proportion of the new mid-tier projects in Australia are also being controlled by foreign investment.

Thunderbox is expected to make an early impact. It is not only set to become one of the top 15 producing gold mines in Australia in 2003, but is also budgeted to achieve capital payback for LionOre (60 percent stake and operator) and Dalrymple (40 percent) in under 12 months. The joint venture forecasts gold output of around 220,000 ounces in the first full year of operations at cash costs of about US$112 an ounce (due mainly to the economies of scale that will result from processing of softer and higher grade ore), which would make it one of the lowest cost mines in the country against an industry backdrop of rising costs. It would then settle into an annualised production rate of about 150,000oz at cash costs averaging approximately US$180/oz over the remaining four years of the initial projected mine life.

Macquarie Bank provided debt financing for development of Thunderbox, which required the joint venture partners to take out hedging covering 50 percent of anticipated production at a flat forward price of A$568/oz.

GATA & Gold -- Sharefin, 22:10:01 11/20/02 Wed

Gold face-off: Murphy vs SG, Kaplan

Bill Murphy, head of the Gold Anti-trust Action Committee (GATA), today issued an unequivocal challenge to doubters of his gold manipulation theory, to meet him and his co-conspiratorialists in a face-off to argue the merits of his hypotheses.
In an energetic flurry of postings beneath a story penned by Mineweb ‘s London correspondent Ken Gooding - in which SG economist Frederic Lesserre cautioned that persistent rumours of a plot to suppress the gold price was hurting the metals' long term investment appeal - Murphy threw down the gauntlet to the World Gold Council, Paris-based bank Societe Generale and Leonard Kaplan of Prospector Asset Management.

“The World Gold Council is a disgrace to the gold world. GATA has challenged them in the past and challenges them, Socgen, and Leonard Kaplan (of Prospectors Asset Management) to a debate in London, or New York, ASAP,” said a clearly agitated Murphy in one of three postings beneath the story.

It always amazes me what sources the FT uses. Andy Smith has been bullish six months out of his entire career. He hates gold and is considered devoutly anti-gold by the gold community. The Gold Council has been, historically, a useless mouth piece for the 3 major producers who are the three major gold derivative hedgers who also are the Gold Council's main sources of funding. That means the Gold Council is funded by well over 30,000,000 ounces of short gold right now in the total hedge position of it source of funding.

The new Chairman is however hopeful, but the Chairman's first great deed for the council was to hire a popular California State bureaucrat manager (of other bureaucrat's retirement fund whose record was to be long in a bear market equities like Enron) as a key executive to represent the gold industry. I am told he did not have even a 1% gold share representation under his management. The Gold Council is distasteful to the gold community. I personally know more about gold than the Gold Council will ever discover. To place the major focus by the Gold Council on the jewelry industry now is disgraceful and insulting to gold's true nature. Gold is money.

Fiat vs Gold -- Sharefin, 19:15:03 11/20/02 Wed

The Daily Reckoning

We turn now to an evergreen topic: rumors of financial distress at J.P. Morgan.

- Yes, it's true, the banking giant is once again doing what it does SECOND best: denying that it has incurred substantial losses in one of its areas of operation. What it does best, of course, is actually incurring all those substantial losses that it spends so much time and effort trying to deny. The big bank seems to excel at shooting itself in the foot.

- "If the denials are starting to ring hollow," the National Post recently remarked, "it's because J.P. Morgan has had to issue so many of them in recent months."

- True. When the Enron crisis erupted last year, JPM repeatedly low-balled its exposure to the bankrupt "energy trader." Morgan's CEO William Harrison insisted that Enron posed no serious risk to its finances. Nothing could have been further from the truth. The Enron fiasco not only took a big bite out of JPM's balance sheet, it also dealt a body blow to its reputation. Next up, Morgan indignantly denied the prospect of a dividend cut...and then later acknowledged the possibility. Now the high- risk lender is at it again - adamantly denying rumors that it is saddled with sizeable wrong-way bets in the gold derivatives market.

- These troubling rumors swirled about the stock on Wednesday, November 6th, causing the shares to fall more than 6% that day. Immediately, Morgan's PR department came out with its denial-guns ablazin' by dismissing the rumors as "false and irresponsible."

- The rumors about Morgan's outsized gold derivatives portfolio aren't new, of course, they've simply gained a fresh intensity. They've also gained a fresh plausibility, given Morgan's recent string of serial disasters.

- In theory, banks like JPM try to maintain a derivatives exposure that assumes very little risk. In other words, they are supposed to be 'market-neutral' most of the time. But as markets are markets and people are people, large speculative positions sometimes worm their way into the derivatives portfolios at financial institutions. - "As far as most analysts are concerned," says the Post, "J.P. Morgan's massive derivatives program amounts to a short position on the price of gold." Therefore, ever since the yellow metal broke free of its bear-market moorings last year, suspicion about the bank's exposure to gold derivatives has surfaced from time to time. Remember, these are "false and irresponsible" rumors.

- Morgan has assured one and all that it has "stress- tested" its derivatives portfolio and insists that, even in a worst-case scenario, there is nothing to worry about. Wow...that's a relief! And by the way, the bank really, really wishes - honestly - that it were at liberty to divulge more details about its gold derivatives positions. Unfortunately, these are proprietary secrets.

- But there are a few clues that suggest reasons for concern. Foremost among them is JPM's oversized presence in the gold derivatives market. "Pick a high-risk banking sector, any high-risk banking sector, and you are sure to find a large encampment - if not a tent city - of J.P. Morgan bankers," Apogee Research quipped several months ago.

- "In the derivatives market, in particular, Morgan exerts a particularly commanding presence...Drilling down a bit into Morgan's titanic derivatives book, we find that it is the largest U.S. player in the gold derivatives sector (probably not a great thing to be in a rising gold price environment, but time will tell on that score). Based upon notional values, JPM holds nearly two- thirds of all the gold derivatives held by 369 U.S. banks and trust companies that hold derivatives of any kind."

- In raw numbers, Morgan's balance sheet is only about two-thirds the size of Citigroup's. Yet, Morgan's $45 billion gold derivatives book is almost four times the size of Citigroup. Perhaps Morgan's outsized gold derivatives exposure is not a MAJOR accident waiting to happen, but we wouldn't be surprised to see the high-risk bank stub its least.

For more on JPM see: Apogee Research

Gold -- Sharefin, 22:33:01 11/19/02 Tue

COMEX: The pimple on the backend of World Gold

I note that you keep the community informed of the COT. I recently replied to one of your constituency concerning the recent figures: Positions of Commercial versus Specs is interesting, but you must keep in mind what you are reading. In the world of gold, the COMEX is the paper gold market and a pimple on the backend of world gold. Pimples in the wrong place, at the wrong time, can be distracting!

Gold -- Sharefin, 22:18:41 11/19/02 Tue

Yellow gold set to stage a major comeback

YELLOW gold is expected to stage a major comeback in about two years, after losing its market appeal to white gold for the past five years.
Selberan Jewellery Sdn Bhd operations manager Irene K Yong said in Europe there is already a changing trend towards yellow gold.

How big a comeback yellow gold makes will depend on how soon the trend in Europe descends on Malaysia.

Selberan sells both yellow and white gold set with precious stones. At the moment, its stores carry 40 per cent yellow gold and 60 per cent white gold.

Pure gold is twenty-four twenty-fourths (24/24ths) gold, and is called 24-karat gold. It is calculated in 1000 points. A 22K gold, or popularly referred to as 916, means it has 91.6 per cent purity.

While yellow gold would have a mixture of pure gold, silver and copper, white gold has yellow gold, silver and palladium.

Palladium works as a catalyst and is greyish white. Rhodium plating is used to enhance the finish by creating a "bright white" coating over the white gold.

Yong pointed out that the price of palladium has risen over the past two years, making the cost of white gold to 20 to 30 per cent higher than yellow gold.

Gold -- Sharefin, 22:16:09 11/19/02 Tue

Japan Bk Woes Not Sparking Gold Buys

Recent speculation Japan government may be forced to nationalize at least one major bank hasn't sparked shift of funds out of banks and into hard assets like gold, says Japanese gold trader. "Japanese depositors are confident that the government will guarantee their money regardless of what happens and so we have yet to see a big movement to gold," says Tokyo-based trader of gold futures.

Gold -- Sharefin, 22:15:08 11/19/02 Tue

Chinese government allows four big banks to trade gold

China has granted approval to its four biggest state banks to import and export gold after opening its first Communist-era gold exchange last month, though quotas have not been fixed, industry sources of Reuters said on Monday. China's foreign trade ministry would allow the Bank of China, Industrial and Commercial Bank, Construction Bank and the Agricultural Bank to import and export gold, they said.

But these banks would still have to go through the central People's Bank of China to trade gold as the precious metal is regarded as a strategic resource, they said.

Gold -- Sharefin, 22:13:53 11/19/02 Tue

ARY Group to set up gold refinery

The ARY Group has embarked on a state-of-the-art gold and jewellery refining and production complex - ARY Aurum Plus. The refinery will have a capacity of over 100 tonnes per year.

The new complex will have automated equipment for minting coins, small and large bullion bars, detailed crafting, cutting and polishing of 18k, 20k and 22k gold jewellery, as well as diamond and precious stone jewellery, and many other products related to the industry.

Haji Abdul Razzak Yaqub, chairman of the ARY Group, said DMCC will definitely place the UAE as an epicentre for major gold, diamond and other commodity traders.

Gold -- Sharefin, 22:12:27 11/19/02 Tue

Economy Ministry posts forecast on gold and currency reserves

According to estimates of the Economic Development and Trade Ministry, Russia's gold and currency reserves will rise to $49bn by the end of this year, Senior Deputy Economic Development and Trade Minister Ivan Materov announced at a briefing today. He stated that gold and currency reserves had been at $36.6bn as of January 1, 2002, and at $47.1bn as of November 8, 2002.

Gold -- Sharefin, 22:10:22 11/19/02 Tue

Aussie gold mining cash costs on the rise

Cash costs for gold mines in Australia were up almost 10 percent in the September 2002 quarter compared with the previous quarter, with beleaguered Sons of Gwalia [ASX:SGW] leading the pack and South African-based Harmony Gold also figuring prominently.

Gold -- Sharefin, 22:08:23 11/19/02 Tue

Malaysia places gold on global faultline

Addressing a Kuala Lumpur seminar late last month entitled “The Gold dinar in Multi-Lateral Trade”, Malaysian prime minister Dr Mahathir Bin Mohammed, fleshed out his country's determination to use gold for trade settlements. As a preface, he made some incendiary statements that place gold squarely on a fracture between Islamic countries and the West, which he is keen to widen.
The address came to my attention through Jim Sinclair, chairman of Toronto listed Tan Range resources. Sinclair did not include the first portion of Mahathir's speech, fearing that Westerners suffer a blind prejudice that would interfere with the objective fact of an emerging Islamic gold currency.

While the West certainly has a navel-gazing view of Islam and the East generally, the converse is equally true - a little ignorance goes a long way. That was well reflected in Mahathir's opening statements that are littered with canards. The consequence is serious because Mahathir is politicizing gold in an unwelcome way; weaponizing it in the context of the global balance of power and giving it a religious fuse.

That is not good for gold as an independent monetary instrument - despite a rather morbid fascination for the gold dinar to succeed in the eyes of Western gold bugs. Consequently, before reporting the substance of his comments on the dinar, it is important to scrutinise the Islamic contextualization imposed by Mahathir.

Gold -- Sharefin, 22:00:55 11/19/02 Tue

'Conspiracy is hurting gold' - SG

Those who loudly proclaim there is a conspiracy by some governments and investment banks to hold down the price of gold are doing more harm than good.
This suggestion comes from Frederic Lasserre, Paris-based economist at SG Securities, part of the Society Generale banking group.

He points out in SG's latest Precious Metals paper from the economics team that gold is the only asset that “has inspired so many tomes, reports and websites developing the wildest of theories.” He says the proponents of these theories claim to be “defending gold from the powers that be who seek to banish it from the economic sphere.”

This is misguided, he suggests. “The future of gold lies in the capacity to attract investors - that is to maintain its appeal for new generations that are neither familiar with the gold standard system, nor any situation in which gold can perform its role as an asset of last resort. The rumours peddled by these ‘defenders' will hardly contribute to this enterprise.”

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