War -- Sharefin, 08:33:10 11/21/03 Fri Gen. Franks Doubts Constitution Will Survive WMD Attack Gen. Tommy Franks says that if the United States is hit with a weapon of mass destruction that inflicts large casualties, the Constitution will likely be discarded in favor of a military form of government. Franks, who successfully led the U.S. military operation to liberate Iraq, expressed his worries in an extensive interview he gave to the men's lifestyle magazine Cigar Aficionado. In the magazine's December edition, the former commander of the military's Central Command warned that if terrorists succeeded in using a weapon of mass destruction (WMD) against the U.S. or one of our allies, it would likely have catastrophic consequences for our cherished republican form of government. Discussing the hypothetical dangers posed to the U.S. in the wake of Sept. 11, Franks said that “the worst thing that could happen” is if terrorists acquire and then use a biological, chemical or nuclear weapon that inflicts heavy casualties. If that happens, Franks said, “... the Western world, the free world, loses what it cherishes most, and that is freedom and liberty we've seen for a couple of hundred years in this grand experiment that we call democracy.” ~~~ Already, critics of the U.S. Patriot Act, rushed through Congress in the wake of the Sept. 11 attacks, have argued that the law aims to curtail civil liberties and sets a dangerous precedent. But Franks' scenario goes much further. He is the first high-ranking official to openly speculate that the Constitution could be scrapped in favor of a military form of government. Fiat vs Gold -- Sharefin, 19:59:39 11/20/03 Thu In Trade Wars, All Roads Lead to Economic Ruin The Bush administration's increasing focus on a re-election in 2004 has resulted in an alarming new development - one that may turn out to be the shot across the bow that leads to a full blown international trade war. This was of course yesterday's imposition of import quotas on certain kinds of textiles from China. This is the first action of its kind, and by itself seems relatively innocuous, but once you announce one quota or tariff, you're likely going to announce additional ones, and the other side feels it must retaliate and back and forth and round and round in a vicious cycle. If these are the first salvos in a new trade war, the only possible outcome is the destruction of globalization - and a complete disaster for the world economy, much like the one we saw in the thirties. ~~~ Let's backtrack a bit to see how we got to where we are today and why trade barriers would cause such calamity. The vast majority of US growth over the last 10 years has been made possible by an unparalleled and unsustainable credit boom engendered by historically low interest rates. The interest rate trend has only been possible because of the deflationary effects of productivity and the globalization of production - which always moves the production of goods to the cheapest source. This, combined with the US Dollar's special status as the world's reserve currency has saved the world from inflationary pressures. This might all be coming to an end. The Bush administration, if it promotes protectionist measures, would be aborting the entire beneficial cycle that has brought the US economy to where it stands today. A trade war fuelled by domestic populist ("Buy American!" and "Protect American jobs!") sentiments at this point would have cataclysmic impact on the purchasing power of the dollar and would start a new and viciously inflationary cycle. First, the weakening dollar trend all by itself will at some point bring higher import prices and inflationary pressure. Second, prices in the US would rise dramatically in a tariff-rich environment, causing an increase in interest rates. A rise in interest rates shuts down the cheap credit addicted American consumer and the booming mortgage market, which will derail the consumer-driven American economy. Shutting down the American consumption engine also shuts down export economies that depend on it. The babies you throw out in this particular ocean of bathwater are the buyers of American treasuries, and therefore the financers of the colossal US Budget Deficit: take Southeast Asia, for example. Together, Japan, China, South Korea and Taiwan currently hold about $1.3 trillion in reserves - most of them in US Dollars - about the same as the entire M1 money supply in the US. For years, the Southeast Asian countries have been sending real goods and services in return for a growing government stock pile of dollars, for which they have no use. Taken by itself, this is an unsustainable trend - and a trade war would only serve to rapidly accelerate its demise. Suddenly you have a world in economic hurt that is awash in dollars, a world that can no longer finance the spiralling US Budget Deficits. The inflationary effects of this are almost unimaginable. With so many holders of this debt and not enough new buyers, there will be an unprecedented imbalance in buyers and sellers of both US Dollars and US-denominated treasuries. The exit window for this sorry lot of holders will not accommodate everyone at once - only a massively depreciated US Dollar and higher US interest rates would bring things back into balance. The end result: low growth with massive inflation, higher gold prices, a massive bear market for US Treasuries, and new lows in the US stock market.  Gold -- Sharefin, 07:38:20 11/20/03 Thu Numeraire To Saucissons? In the ordinary course of business, drivers communicate with internal security to gain access in order to unload their cargo. Trucks bearing dore bars from Yanacocha and other world gold mines are joined by those loaded with the sweepings from the factory floors of Swiss and other European watch and jewelry manufacturers, and scraps of jewelry discarded from the souks in the Persian Gulf, Africa and Asia. The flow of scrap and dore is periodically augmented by high purity 400-ounce gold bars from the vaults of world central banks, as they continue their multiyear campaign to reduce their exposure to this non-earning, albeit appreciating, reserve asset. Inside, the source materials are ground, chopped, melted, purified, extruded and reconstituted in a series of low and high tech stages. State of the art security is impressive. The combined material flow is recast into new shapes of “four 9's” gold, the highest purity, or alloyed with silver, copper and other metals depending on customer specifications. Final output includes coin blanks, 1 kilo bars favored on the Indian Subcontinent, rods and bars for jewelry manufacturers, and even semi-fabricated watch cases. In this way, central bank gold, once the numeraire for all paper currencies, is decommissioned from its official monetary status so that it may satisfy the growing world appetite for luxury goods. ~~~ The managers of the Argor Heraeus refinery purchased the facility in 1999 along with a consortium that included the Heraeus Group, Commerzbank, and the Austrian Mint (at a later stage.) Their growth plan for the business is to integrate further downstream into “value added” fabrications for their customer base. The refinery is strategically located for “just in time” deliveries to Swiss watchmakers and the Italian jewelry industry in centers such as Geneva and Vincenza. Absent in the company's expansion plan is any provision for the possible needs of those who might be short the metal including Wall Street traders, commercial players, holders of derivatives, or managers of mining company hedge books. The Argor Heraeus facility is not your typical sausage factory. It is as technologically advanced and environmentally compliant as any precious metals refinery in the world. In their own words, “The Swiss environmental regulations are among the most severe in the world and Argor Heraeus for its part is dedicated to constant research and development in order to guarantee state of the art technology in this field”. The entrepreneurial management group focuses on increasing throughput and adding value for their customer base. They are motivated by the desire for profits and growth and therefore pay close attention to matters of cost cutting, efficiency, environmental compliance and process improvement. The monetary and macroeconomic aspects of gold appear nowhere on their agenda. The refinery's exact capacity is classified but it represents between 10% and 20% of world gold output. At periods of peak demand, customer requirements are met thanks only to a supply of 400 ounce bars from central banks. ~~~ The market cap of gold today at $750 billion seems pitifully small when measured against world financial assets of $60 to $70 trillion. If only a sliver of that total were reallocated to physical gold, the price impact would be highly disproportionate to the fraction of reallocation. There are numerous ways to illustrate the imbalance. In the following discussion, we use US equities plus government debt including agencies as a proxy for global financial assets since historical data on global financial assets proved hard to come by. ~~~ During these two noteworthy episodes when investors fretted most about the value of their paper assets, they placed a hefty premium on gold's safety. As nearly as we can measure the degree of concern exhibited in those two instances, the safety premium for gold translated into somewhere between 25% and 37% of US financial assets. Today, that fraction is 1.6% ($750 billion over $46 trillion, based on an equity market cap of $15 trillion and total debt outstanding of $31 trillion.) ~~~ In his day, Otto von Bismarck warned the squeamish to avert their eyes from the manufacturing of sausages by sausage makers and laws by politicians. Today, that advice could be updated by including the deconstruction of money by central bankers. Saucissons, in the mining lingo of the early 20th century, referred to the flexible casings used for explosives in mine operations. Numeraire, of course, refers to gold's historical role as the reference point for all paper currencies once used by the entire commercial world including central bankers. The numeraire function, according to economist David Ricardo, was essential if “one wish(ed) to make intertemporal or interlocal comparisons (in the) problem of measuring value.” Over the last three decades, it has been the practice of central bankers to demonetize gold, thereby making intertemporal and interlocal assessments of value much more difficult, if not impossible. In theory, a dollar standard might have worked, but in practice it has not. Without a global monetary compass, unrestricted issuance of government and corporate debt, trade imbalances, misallocations of capital, periodic banking crises, and currency turmoil should come as no surprise. It seems more than likely than ever that the world's central bankers will eventually convene to reprice gold to a level sufficient to persuade a world of paper skeptics that the metal must be reinstated as the numeraire. That level will exceed whatever the market is at that time by a substantial amount. Our guess is the market at the time of an official sector bid will be well into 4-digit territory. ----------- ----------- So if the total fell by 50% to $23 trillion whilst the safety premium rose to 25% - this would equate to a gold price of $3000. And if the total fell by 75% to $11.5 trillion whilst the safety premium rose to 25% - this would equate to a gold price of $1500. (Gold doesn't rise as much but as other assetts are falling so much it increases more with it's purchasing power) And if the total doesn't fall as we go into hyperinflation whilst the safety premium rose to 25% - this would equate to a gold price of $6000. Gold -- Sharefin, 22:37:13 11/18/03 Tue Gold trade opens to individuals BEIJING, Nov 19 (Xinhuanet) -- The Bank of China (BOC), one of the four big state banks of China, opened gold trade services to individuals on Tuesday in Shanghai. Individual investors can now trade the precious metal at 95 business outlets of the BOC Shanghai Branch, or dial 95566 to make transactions or on-line trading at www.sh.bank-of-china.com. To encourage more individuals to participate in the gold trade, the BOC set 10 grams of gold as the lower limit for trade. Shanghai was a trading center for gold in the 1930s and 1940s. China set up a gold exchange in the city one year ago, ending more than 50 years of government monopoly over the gold market in China. Gu Wenshuo, an official with the Shanghai Gold Exchange, the only gold transaction market in China, said opening of the gold market would boost consumption of gold and private investment in China. Against the backdrop of gloomy stock and securities markets, trading in gold was expected to become an important investment arena for Chinese individuals, Gu said. The other three state banks, the Industrial and Commercial Bank of China, the Construction Bank of China and the Agricultural Bank of China have stepped up their preparations for launching gold trading. Last year, the three banks launched eight new gold services, including retail sales of gold. Gold -- Sharefin, 22:34:31 11/18/03 Tue Outlook is grim for once-thriving B.C. mining industry And then there was one. This could be the motto for B.C.'s mining industry. Once a major player worldwide with between 30 and 40 operating base and precious metals mines in the province, B.C.'s beleaguered mining sector has dwindled to six companies with six producing mines. Of those, all but one is scheduled to close within the decade because the deposits are running out. Hope in this sector can be found in junior mining stocks, which are seeing revived interest from investors, largely because of soaring commodity prices. While a lot of that capital will flow abroad, booming business on Howe Street is good news for the economy generally. The Mining Association of B.C. also points to the province's coal mines, almost exclusively located in southeastern B.C., as providing possible future heat for the economy. What is the long-term prognosis for the sector, which earned $3.53-billion in gross revenue for 2002 in B.C., given these competing positive and negative forces? While local analysts are hopeful that the entire industry can be resuscitated and the province has revamped policy to try to revitalize the sector, the outlook is grim given a number of structural issues distinct to the province. Gold -- Sharefin, 22:32:02 11/18/03 Tue Is the Silver Market Too Small to Buy? The bullion banks, as reported by GATA, reportedly owe 15,000 tonnes of gold to the central banks that they cannot repay, because if they went into the market to buy that much gold, the market price would scream upwards. Several large mining companies also owe lots of gold, more than they can repay without moving the market to the upside against themselves. Defaults on promises to pay in gold are inevitable. If the big traders must default, what makes the little traders think that their futures contracts will be honored? I believe futures contracts will default, and that the paper longs may get nothing, or a cash settlement, when they run out of silver or gold to deliver. I believe the dollar is fraud. I believe bonds are fraud. I believe fractional reserve banking is fraud. I believe futures contracts are fraud. I believe it is a moral failure to be deceived by fraud, and that it is a moral failure to buy or sell futures contracts. The purpose of futures contracts is to divert investment demand away from gold. The existence of futures contracts does this through many ways. First, a wealthy person who may be interested in buying gold will be encouraged to buy futures contracts instead, because the gains are said to be greater if gold goes up. Therefore, this person buys a paper promise, instead of buying physical gold, and the investment demand has been properly diverted. Second, after the wealthy person buys a futures contract, the price of gold is manipulated downward by the expiration date, so that the futures contract expires when the gold price is lower than the paper contract price. Therefore, the paper contract expires, "worthless". Third, if the price does go up, the person who bought the paper contracts is rewarded with more paper dollars, which again diverts investment demand away from physical gold, because the paper game worked brilliantly in the mind of the sucker. Thus, the paper pushers succeed either way. Fourth, another wealthy person may feel that he may always have the opportunity to buy a futures contract for gold, instead of buying gold itself. Therefore, this other investor may think, "If gold really begins to take off, then I'll buy a futures contract, but not today." This also diverts investment demand away from physical gold, since the buying decision is delayed. This person will not buy gold until after the futures market collapses, and then they will realize (too late) the difference between a paper promise and gold. Here are the key differences: An expiring paper contract is no substitute for gold. Gold does not rust. Gold does not expire. The same piece of gold lasts for thousands of years. That is one of the very important properties that makes gold valuable in the first place. Virtually every other asset you can buy decays in value over time, whether a car, or a house, or a dollar due to constant erosion of inflation. A futures contract expires over time. This is the exact opposite of gold. A paper promise is no substitute for gold. Gold is payment in full. A paper contract can be defaulted on. Gold cannot default. Contracts can fail. The excessive creation of futures contracts, and the few entities who are creating most of them, (the bullion banks that are already short the 15,000 tonnes) virtually guarantee performance failure. Gold -- Sharefin, 22:29:52 11/18/03 Tue The glitter of gold is growing NEW ORLEANS — Scheduled over the Halloween weekend, in the city of the vampire Lestat, the 30th annual New Orleans Investment Conference was predictable for its emphasis on immortal gold. Here, exhibitors hawk gold bullion coins, numismatic gold coins, old gold mines in South Africa that can be reborn with new technology, and new gold mines from Canada to Mongolia that may unearth new riches in precious metal. People don't attend this conference to hear the latest in mutual fund offerings. For that, people go to the Morningstar conference in Chicago or a Money Show in any number of cities. No, the New Orleans Investment Conference has traditionally been the largest gold bug meeting in the country. As such, it tends to be a Johnny-one-note affair, with much discussion of surplus government and intimations of future economic collapse. ~~~~ Where is the price of gold going? Here there is only one direction: up. From its recent price of $376 an ounce, newsletter writer Richard Russell predicted it would soon be at $556 an ounce. Some of the speakers saw it as high as $1,000 in a few years. Will it go that high? Maybe. Maybe not. The only thing certain is that governments around the world are printing paper money faster than the global economy is growing. Printing money is cheap. Getting gold out of the ground involves real work and real costs. Gold -- Sharefin, 22:28:19 11/18/03 Tue Gold remains a precious, precarious investment In ancient times, kings craved it. Today, we mark wedding vows by exchanging bands made from it. Even the streets of heaven are said to be paved with it. But gold's status as an investment isn't as clear. For some, owning gold bullion or shares of gold stocks is an important hedge against inflation and downturns in other investments. For others, gold is seen as an investment that is too susceptible to major price swings. At the moment, at least, gold is back on more investors' radar screens, thanks to increases in the per-ounce price of the precious metal over the past two years and strong showings for mutual funds focused on gold and mining operations. Gold -- Sharefin, 22:26:50 11/18/03 Tue National Board of Trade to begin gold, silver trade India's largest commodity futures exchange, the National Board of Trade, plans to add more commodities including gold and silver to its trading list and switchover soon to a screen-based system from open outcry, its executive director said on Saturday. "We have received an in-principle approval from the government to begin futures trading in several other commodities like bullion," AS Jeyakumar, told Reuters in an interview. He said the final permission from the government was expected any time, and the exchange should begin trading in gold, silver and cottonseed meal in the first quarter of 2004. ~~~ The country, with a population of more than a billion people, is the world's largest importer of gold and edible oils and third largest cotton producer. Indians buy gold worth $8.5 billion and edible oils worth $9.0 billion every year. India recently allowed futures trading in all commodities including bullion, grains and metals. Fiat -- Sharefin, 22:19:14 11/18/03 Tue Warren Buffett's View of the US Dollar If asked for the great names of art, theater and science, people immediately respond with giants like daVinci, Shakespeare and Newton. When someone mentions finance to me, the outstanding name that comes to my mind is Warren Buffett. When Warren Buffett speaks, I listen. And in this regard, two recent articles are extremely important. In an article about Mr. Buffett, Barron's wrote last month: "Buffett, who has spent a lifetime successfully playing the percentages, says that buying Treasury bonds at current levels probably isn't a smart move. He noted that Berkshire could be earning $1 billion more annually on its investment portfolio if it shifted its cash holdings into longer-term Treasuries, but Buffett doesn't believe the risk is worth the added income." [emphasis added] Mr. Buffett is walking away from $1 billion a year because he says the risk of US Treasuries isn't worth it. What 'risk' is he referring to? Could it be the risk that arises because US Treasuries are denominated in US dollars? Mr. Buffett inasmuch confirms this conclusion in an article written by him and published just recently in the online edition of Fortune. He says: "Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in and today holds several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline."  Gold -- Sharefin, 22:13:27 11/18/03 Tue Breaking News - GOLD BREAKS $400 During overnight in Asian trading, Tuesday U.S. local time, gold burst through resistance to trade, for the first time since early 1996, at and ABOVE $400 an ounce! Large amounts of buying was noted by securities hedge-funds, short covering and stop-limit buys propelling gold to $400 as the U.S. dollar continue to show additional weakness in Tuesday's markets now at new multi-year lows. Gold is now up nearly 25% YTD. For its part, silver followed gold higher today as it hit trades just below fresh 52-week highs set yesterday and last Friday, trading just around $5.40 an ounce for DEC delivery. Silver is now 23% higher YTD, 7% in the prior 5-days and nearly 10% in the previous 3 weeks! With $400 just triggered, stop-loss buys (short covering) has pushed prices dramatically higher with resistance seen from physical selling and long liquidation. As $400 falls, a quick spike to higher levels is expected but is likely to be met with profit taking, consolidation in the coming days as gold pushes higher. It remains to be seen how long $400 will be maintained in the short-term, but soon enough $400+ will become our new trading level as gold prepares to assault prior 1996 highs just under $420 an ounce and above. Still, gold has risen mostly in U.S. dollar terms - the next major gold bull market stage will occur with global market participation. Until this event occurs, gold will be well supported with a depreciating dollar seen to lose an additional 20-40% in the coming years. Fiat -- Sharefin, 22:10:48 11/18/03 Tue Why Gold's Gleam Isn't Likely to Dim The USAA Precious Metals & Minerals Fund's Mark Johnson on why the weak dollar and low interest rates bode well The S&P Gold index has surged 52% this year through Nov. 14, vs. a 19% rise in the broader S&P 500-stock index. And in the last few days, the price of gold has rallied -- hitting $397 on Nov. 18 -- as the U.S. dollar fell amid a spate of news, including potential trade wars with China, falling foreign investment in U.S. Treasuries, and lingering worries about the mutual-fund scandals. As long as the dollar stays weak, and the Federal Reserve holds interest rates at low levels, gold should keep its luster, says Mark Johnson, portfolio manager of the USAA Precious Metals & Minerals Fund. He figures its price could reach $435 next year. Even with the recent gains, Johnson thinks investors should own gold assets to lessen overall risk. Fiat -- Sharefin, 22:07:45 11/18/03 Tue FBI Sting Nets 48 Wall Street Arrests NEW YORK (Reuters) - FBI agents on Tuesday arrested about 48 Wall Street foreign exchange professionals in a sting targeting several top firms thought to have defrauded small retail investors of millions of dollars. Federal Bureau of Investigation officers swarmed on 2 World Financial Center late on Tuesday afternoon and led out men in business suits, taking them away in vans and cars. Some of the men covered their heads with overcoats while others bowed their heads to hide from television cameras and photographers. "It's currency fraud, securities fraud," said one agent at the scene of the arrests. "It's been a long investigation. The arrests have been ongoing today." A Madison Deane and Associates Inc. employee, who asked not to be named, said the FBI arrested seven people at his firm, which offers currency broker services. "We were just sitting there working, and they (FBI) just came in and stormed the place," the man said, adding that the FBI agents took out three partners, three vice presidents and one broker all in handcuffs at about 5:30 p.m. "They had guns. They came in with vests and said 'Nobody move,"' the employee told Reuters. ~~~ The unexpected operation came at a time when America's financial markets have been hit by scandal after scandal. Corporate wrongdoing by companies like Enron Corp., which went bankrupt in 2001, sparked a massive accounting scandal and led to the demise of one of the world's largest accounting firms, Arthur Andersen. The scandal rocked investor confidence and unearthed irregularities at other companies. Since then Wall Street equity research companies have been targeted by prosecutors for inflating stocks during the Internet boom of the late 1990s. More recently the mutual fund industry has been investigated on charges of improper trading. Until Tuesday the $1.2-trillion-a-day foreign exchange market, whose primary clients include top companies, millionaires and banks, has remained relatively untainted by scandal. The names of other companies involved remained unclear, but sources told Reuters that about four companies were targeted. Sources said none of the companies targeted are household names outside of the securities industry but are well known and regarded in the Wall Street community. Periodic Ponzi Update PPU -- $hifty, 00:12:30 11/17/03 Mon Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,930.26 + Dow 9,768.68 = 11,698.94 divide by 2 = 5,849.47 Ponzi Down 40.79 from last week. Thanks for the link RossL ! This week should be quite entertaining ! Go GATA ! Go GOLD ! Go Comets ! $hifty Gold -- Sharefin, 22:42:52 11/12/03 Wed Strong metal prices tilt universe Gold is in its best position in seven and a half years, silver is going back to multi-year highs, platinum boasts a remarkably bullish formation, copper has exploded to nearly a dollar a pound, nickel is worth more than $5 a pound and lead has blasted to $600 a tonne. Even zinc is potentially coming out of its coma ~~~ We've drawn analogies with the early 1970s and those remain just as intact with the CRB Index back to levels we last saw in 1997. The bull is more than in. Long may it last; even those cheesy radio adverts now prevalent in the New York metro area advertising gold coins to first time metal investors. ~~~ If you had bought every gold stock on our watchlist in equal weight to their market cap, you'd be up two fifths for the year. In other words, it's like shooting fish in a barrel for the time being. Periodic Ponzi Update PPU -- $hifty, 00:29:46 11/10/03 Mon Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,970.74 + Dow 9,809.79 = 11,780.53 divide by 2 = 5,890.265 Ponzi Up 23.60 from last week. Thanks for the link RossL ! Go GATA ! Go Gold ! Go Comets ! $hifty Fiat -- Sharefin, 04:04:28 11/08/03 Sat Confidence wanes as tent pegs fly. First Russia's bourse & now Sri Lanka's Sri Lanka crisis triggers stock slide  From the Far Side -- Sharefin, 23:21:58 11/07/03 Fri Seems that there are whispers in the markets.... ------------------ NY gold ends up despite healthy U.S. jobs growth COMEX gold ended higher Friday, rescued by short covering in rumor-filled trade after safe-havens fell on the best evidence yet that the U.S. economic recovery had caught up to the labor market. ~~~~~ Gold fell at the open as the dollar surged on U.S. Labor Department data showing nonfarm payrolls surged 126,000 in October, more than double the 58,000 increase expected by Wall Street. The unemployment rate fell to 6.0 percent from 6.1 percent in September. Those moves were reversed late morning and the market swirled with various rumors and talk -- denied by the Department of Homeland Security -- that the U.S. terror threat level might have been raised "It was clearly all dollar-driven, and the economic numbers," said Robert Gottlieb, bullion dealing chief at HSBC. "The whole market was positioned for a much stronger dollar. "Obviously helping propel (gold) were rumors of the terror alert and hijacking," he continued. ----- Original Message ----- Subject: From the far side Just read on the YHOO board An intensive secret hunt is underway in the United States and Canada since mid-October for an al Qaeda operative known to be at large with enough radioactive material for a "dirty bomb" strike in a North American city. This is revealed by DEBKA-Net-Weekly's exclusive counter-terrorism sources. A warrant for his arrest in both countries has been signed for a Saudi national called Adnan Al Shukri Jumah, aged 27, student of nuclear engineering employed at the 5-megawatt nuclear reactor for research at McMaster University in Hamilton, Ontario. He was under surveillance when in early October, he stopped attending class at the university and thought to be at home. His disappearance was not remarked until a few days later when a large quantity of radioactive material was missed from the university's nuclear reactor. American and Canadian investigators suspect Al Shukri Jumah has the bomb assembled ready for detonation. Since he gave his watchers the slip, Washington and Ottawa have called in large reinforcements for the race to catch him before it is too late. A number of informed counter-terrorism sources told DEBKA-Net-Weekly that American authorities first heard about Al Shukri Jumah's terror mission on al Qaeda's behalf from Khaled Sheikh Mohammed, the senior operative of the fundamentalist network captured at his home in Karachi one night in March. Sheikh Mohammed described the wanted man as a one-man cell trained to build radiological bombs capable of environmental contamination from scratch. From Sheikh Mohammed, US counter-terror agencies learned for the first time about the single- cell al Qaeda chemical, biological or nuclear strike-teams consisting of lone operatives trained to operate solo. The experts had previously assumed that each unconventional weapons cell numbered several members and was supported by broad logistical backup crews. Explaining how Al Shukri Jumah fooled his watchers, our sources say he kept himself to himself at all times, had no friends, kept strictly to his study and work schedule at the reactor and habitually left the facility at the same time as his colleagues. His "normal" behavior, the sources said, apparently gave him entry to the place where dangerous materials were stored without raising suspicion. Bit by bit, he smuggled out enough radioactive material to build the dirty bomb at home. His disappearance raises the following questions in the minds of senior investigators, according to DEBKA-Net-Weekly's counter- terrorism sources: Why were there no agents observing the subject inside the reactor? These sources did not disclose which security agencies were responsible for the surveillance. Who gave Al Shukri Jumah a Saudi Arabian under suspicion access to the reactor? And how is it that no one noticed increasing amounts of nuclear materials were disappearing over a period of months? How was Al Shukri Jumah able to give his watchers the slip? Was he tipped off by an inside source in the US or Canadian security services? A senior source close to the hunt says: "These points certainly need clarifying. But catching this man before disaster strikes is paramount."  Gold -- Sharefin, 23:05:09 11/06/03 Thu Go long silver, short Fed arrogance "Once a central bank is found unworthy, then all bets are off," said the sardonic Grant, recommending silver as a "hedge against the contingency of organised depreciation of the US dollar. "In fact, he positions gold and silver as the ultimate anti-currencies; not subject to the whims of "accountants and MBAs." ~~~ Grant speculates that at some point the accumulation of dollars would end when one of the Asian banks decides that the whopping stockpile of American paper is sufficient. “Would you not consider an alternative to this monetary asset that comprises the bulk of global reserves?” The obvious alternatives are gold and silver, especially because the Federal Reserve is wilfully depreciating the dollar according to Grant. “The latent power of a move away from the dollar is almost impossible to imagine. Some $6 trillion is held today at interest rates a little higher or lower than zero. . . Japan has several trillion more. So call it $8-10 trillion that is held in dollars earning no return. What might cause these dollar holders to seek a hedge? . . . Do we have a critical mass of dollar holders who have lost confidence in the currency and want to switch to an alternative?” Grant self deprecates about the continued postponement of his forecast for the Fed to finally overplay its hand, but he has a point that we are currently witnessing one of the great monetary dramas of all time and he makes a very persuasive case for being long precious metals. What's more, he likens the present infrastructure for selling metal securities to the equity market in 1947. Few people owned stocks, now few don't. Similarly, an elaborate infrastructure and complex instruments developed to sell gold rather than to buy it – he's betting on a spectacular turnaround on that front. Grant is especially bullish on silver because it has more favourable supply-demand characteristics. ChartsRus -- Sharefin, 10:51:59 11/06/03 Thu New charts series - courtesy of StockCharts. The Matrix Fiat -- Sharefin, 10:14:03 11/06/03 Thu In Monetary Affairs, Crisis Follows Crisis "The world is in permanent monetary crisis," Murray Rothbard once observed (in Making Economic Sense), "but once in a while, the crisis flares up acutely, and we noisily shift gears from one flawed monetary system to another." Monetary systems built on floating fiat currencies are fragile things. Most of the world currently operates under this arrangement. Fiat -- Sharefin, 10:11:33 11/06/03 Thu Bank raises UK rates to 3.75% The Bank of England has raised interest rates to 3.75% - the first rise in almost four years. The move was widely expected and follows concerns that consumer debt and house prices were rising to dangerously high levels. ~~~ Damaging? The previous rate of 3.5% was the lowest for 48 years. ~~~ But it warned: "This initial rate rise should not turn into a trend of rising rates." ~~~ "Having waited patiently for UK households to bring their borrowing under control, it has finally decided to intervene. The price of doing nothing was deemed to be too great." ~~~ Economists have warned that more interest rate increases are likely over the next year. Some are forecasting that rates will be as high as 5-5.5% by the end of next year.   Gold -- Sharefin, 10:04:44 11/06/03 Thu Newcrest soars on takeover rumours Newcrest Mining's share price took off yesterday in response to speculation that a cashed-up Newmont Mining, the world's biggest gold producer, was about to make a bid for the $4.15 billion group. Gold -- Sharefin, 09:59:25 11/06/03 Thu Newmont to raise $1 bln, acquisition rumors fly Newmont Mining Corp. (NYSE:NEM - News) announced on Tuesday it will raise about a billion dollars in equity, a hefty sum that immediately set tongues wagging that the world's biggest gold producer was readying to make a big acquisition. Taking advantage of a share price that has leapt nearly 50 percent his year, the Denver-based mining giant said it will offer 20 million of its shares to the public. It expects the underwriters of the stock issue to take up a further two million shares to meet strong demand. According to a Newmont spokesman, the price the shares will be sold at will be set on Wednesday. Newmont's stock closed at $43.31 in New York on Tuesday, up 43 cents and near its six-year high of $44.70. News of the share issue came after the stock market had closed. The 7.5-million-ounce-a-year gold producer said in a statement the money raised would be used for "general corporate purposes, which may include new project development costs, other capital expenditures and debt reduction." But an analyst who asked not to be identified said the mining giant could well be readying to pounce on a peer, despite Newmont's public statements recently that it has its hands full with its own development projects. Silver -- Sharefin, 09:57:41 11/06/03 Thu Silver use in photography seen surviving digital age Photographic demand for silver should remain almost flat in coming years, even though digital cameras threaten silver's importance to the industry, as developing countries use more traditional film and retailers increasingly print digital images on photo paper, a film industry expert said Wednesday. "We firmly believe that basically it's going to be flat. So silver is not going away. I think that is my message," Don Franz, editor of Photofinishing News Inc, said at a precious metals conference sponsored by Gold Fields Mineral Services and the Silver Institute. Photography has been one of the largest sources of demand for high quality silver. The effect of light on silver halide is key to the photographic process. Silver halide crystals made from a soluble form of silver like silver nitrate and are suspended in unexposed film and photography paper. Silver sales in this category were down 4 percent in 2002, according to GFMS data, the third straight year of decline. Franz did say there would be a small net decline in demand for photographic silver. He projected that this year the number of digital cameras will exceed the number of film cameras and the number of cell phone cameras could exceed the number of digital cameras. Film making icon Eastman Kodak (NYSE:EK - News) announced in September that it is changing it business strategy toward digital products, away from its flagging film business. But Kodak and rival Fuji Photo Film are still making significant investments in silver halide, he said. Use of film is declining at an 8-10 percent rate in the United States and a couple of percent in Europe, Franz said. But it is increasing at a 10-15 percent rate in China, India and Russia. Meanwhile, Franz predicted retail film developers -- kiosks, Wal-Mart and online mail order -- will process more digital images on photo paper because it is more versatile and higher quality than ink jet printers used by digital camera owners at home. "We feel that you are actually going to see growth in the number of prints being used," Franz said. "That may offset some of the decline that you will see in the use of silver." Over the last 2 years digital printing on silver halide has grown, Franz said, adding that the concern about the loss of that business has been "overemphasized." Silver remains widely used in motion picture films, x-rays and graphic arts. "X-rays consume more silver than any other product -- photographic film, paper and graphic arts." Franz said. Gold -- Sharefin, 09:56:03 11/06/03 Thu Vietnam likely to remove import quotas for gold bullion in 2004 Vietnam is likely to remove its import quota requirements for gold bullion in 2004, an official from the Vietnam World Gold Council told Platts Wednesday. ~~~ The new gold management policy has impacted mainly the gold bullion market, as there are no quotas required for gold jewelry imports. But with the relaxed new policies, Vietnam is expecting an overall increase in gold demand for 2003. The country has projected a gold demand of 62-63mt in 2003, which is 4-6% higher year-on-year compared with the 59.5mt demand recorded in 2002. "Demand has also jumped recently because the wedding season has started in Vietnam. As a result, domestic prices have also risen in the past few weeks," the WGC official said. "Demand is so strong some traders have even run out of stock recently," he added. Vietnam's wedding season started in September and is expected to end in late January. old news -- Sharefin, 09:38:51 11/06/03 Thu Giant Silver Nugget Found in Australia Reuters SYDNEY (May 25) - A silver nugget the size of a wallaby and weighing 363 pounds has been discovered in the Australian outback and will be put for sale at auction. Veteran prospector Leslie White, chairman of East Coast Minerals NL, said the nugget -- unearthed 82 metres below the surface -- was about 40 times larger than any he had preivously encountered. "When I first saw it I said: 'Goodbye Charlie -- it's going to take three Sumo wrestlers to lift!'" White told Reuters. "As far as I know, it's the biggest one ever found in the world." The nugget contains about 2,000 ounces of silver, making it worth only about $10,000 dollars at today's depressed silver prices. However, White said he hoped nugget would fetch 10 times as much at an auction planned in a couple of weeks. The nugget is about 80 cm long, 40 cm wide and 30 cm deep. It was discovered two weeks ago at the Elizabeth Hill lode, operated by East Coast and partner Legend Mining, in far north Western Australia. Gold -- Sharefin, 20:23:28 11/05/03 Wed Battle for Russian Gold Draws Western Miners Political risk abounds and business is plagued by murder and organized crime -- but it takes more than that to put off foreign pioneers lured by Russian gold. Driven by booming prices, Western players are overcoming their caution and starting to tiptoe through tricky local legislation to tap one of the world's biggest unexploited gold fields. The fragmented gold industry could be at a turning point and is seen as ripe for consolidation. ~~~ Gold firms looking to branch out of traditional but crowded markets like South Africa say now is the time to try their luck in riskier territories such as Russia. ~~~ With both London and Toronto vying for Russian gold, analysts say the auction in the second quarter of 2004 of the giant Sukhoi Log deposit in eastern Siberia is likely to turn into a major battle for control over Russian gold and draw some major foreign names.  Gold -- Sharefin, 22:12:28 11/04/03 Tue Barrick, JP Morgan Again Face Gold Antitrust Suit An antitrust lawsuit against Barrick Gold Corp. and J.P. Morgan Chase & Co Inc. looks set to go ahead after a U.S. court refused to budge from its earlier ruling that the case be heard, court documents made available on Tuesday show. The world No. 3 gold producer and the U.S. financial giant had asked a Louisiana district court judge to reconsider her previous order that the suit, alleging they colluded for over a decade to suppress the gold price, proceed. New Orleans-based coin and bullion dealer, Blanchard and Co., brought the case against the two firms last December. Toronto-based Barrick and New York-headquartered J.P. Morgan Chase tried to get the case thrown out, but were unsuccessful. They then attempted in September to get the court to rethink its earlier ruling, but this too failed, according to a court order dated Nov. 3. Instead the parties received a reprimand from Judge Helen Berrigan. "While the defendants are understandably dissatisfied with a ruling not in their favor, this is neither the time nor method to raise these issues again," Berrigan's order said. ~~~~ Blanchard, which calls itself the largest U.S. retail dealer in rare coins and precious metals, said the ruling meant discovery, a legal term meaning both sides make available to each other documents relevant to the case, could now continue. "Barrick and Morgan appear to have lost the chance to delay the discovery phase of the case any further," said Blanchard chief executive, Donald Doyle Jr. Blanchard alleges Barrick and J.P. Morgan Chase made $2 billion in profits from short selling gold. Short selling, or hedging, involves selling something not owned, at current prices, in the belief prices will drop in the future. Doyle says this practice in the gold market is responsible for depressing the bullion price. Free of short selling, Doyle reckons the gold price would be above $700 an ounce. Bullion was last bid at $379 an ounce. Barrick has one of the largest hedge books in the gold industry. The book, off its peaks, currently consists of about 16 million ounces of sold-forward gold. Blanchard alleges J.P. Morgan financed Barrick's short selling with "remarkably advantageous terms" that were not available to others. Gold -- Sharefin, 22:08:51 11/04/03 Tue High hopes for US gold ETF Commodities strategist for Tudor Investment Corporation, Steve Matthews, says that the launch of the World Gold Council's Exchange Traded Fund in the US could soak up more than three million ounces of the yellow metal based on the performance of Australia's Gold Bullion fund. ~~~ Matthews says that a reasonable expectation is for the US fund to be a multiple of its Australian counterpart. At sixteen times the size of the Australian economy, Matthews does a straightforward conversion to speculate that the US gold ETF could absorb around 3.5 million ounces within six months of initiation. Were that to happen, the fund would be worth $1.4 billion at current gold prices, or about 1.3% of the total value of all the world's publicly traded gold and silver equities. If that rate of uptake were maintained then, on an annualised basis, the market would benefit by losing the equivalent of a whole year's new mine supply from a Newmont or AngloGold-Ashanti. Gold -- Sharefin, 22:06:12 11/04/03 Tue One year later, Bonner has Prechter beat -- At last year's New Orleans Investment Conference, deflation was on everyone's lips. We doubt it is going to feature as prominently this year though there is no shortage of dire predictions for the US economy judging by speakers' topics listed on the schedule. If there is one immediate note to make it is that of all the prognosticators last year, Bill Bonner stands out as among the most perspicacious urging investment in all metals for all the reasons now commonly cited as the cause of their improvements. Bonner, publisher of the Daily Reckoning newsletter engaged in an informal, but memorable, head-to-head forecasting contest with Elliot Wave's Bob Prechter who had billing on the same day. Prechter, who was always at risk of being mobbed by fans, advocated US Treasuries, American dollars and Swiss francs. He was firmly in the deflation camp and argued that bullion and gold equities would be a bust. Bonner went the other way in his deflationary scenario, advising to sell out of the dollar in favour of anything to do with gold. Gold -- Sharefin, 21:58:46 11/04/03 Tue Gold conspiracy collapse is just a matter of time Bill Murphy owns the Le Metropole Café Web publication and heads up the Gold Anti-Trust Action Committee. Mineweb: Bill, thanks for agreeing to this interview. Let's get straight to it – gold is $130 per ounce higher than its 2001 lows. Surely that is sufficient evidence that there is no conspiracy to suppress the price of gold? Bill Murphy: Au contraire! Two years ago when we met with gold around $265, the GATA camp was saying where the price of gold was headed and why. You could barely find a bull in the mainstream world in those days who would talk about gold even clearing $300. The price of gold is shooting up despite the efforts of the Gold Cartel to contain it. The physical market has been on fire as the Russians, Chinese, Turks, Indians, and Arabs keep loading the gold boat as a group. Meanwhile, the gold producers continue to reduce their hedges. In addition, there has been a “paradigm shift” about gold as an investment. Volatile bond markets, shaky stock markets, and a sinking dollar have sophisticated investors buying gold these days. The yearly gold supply/demand deficit has been running about 1,400 tonnes and is growing. The cabal is finding it difficult to come up with enough supply to ration this surging demand. Gold -- Sharefin, 21:55:04 11/04/03 Tue Looking for a $1,000/oz gold overshoot Paul van Eeden picks stocks while opining on markets and money for International Speculator newsletter. Mineweb: Paul, thanks for taking time to chat to us. You timed the dollar's weakness accurately and predicted corresponding strength in gold long before the crowd. How did you do it? Paul van Eeden: I realized in 1997 that the gold price was insensitive to physical supply and demand paramaters such as those typically used to analyze commodities. Instead, believe it or not, gold was acting like a currency, and the gold price was responding to changes in money supply and exchange rates. This is, of course, what one would expect, since gold is money. I focused my research on gold as a monetary instrument and found that not only does the trading history make perfect sense, but the models I created have quite good predictive potential, as you mentioned. These models allowed me to predict the rise in the gold price and the decline in the dollar, both of which have a long way to go. Mineweb: Just before this past summer you released a fascinating perspective on the long-term relationship between gold and the dollar. You forecast gold to double quite soon and possibly triple within five years. Are you sticking with that? Paul van Eeden: Absolutely. I expect the gold price to increase beyond $1,000 an ounce and because markets have a tendency to overshoot on the upside, I would not be surprised to see gold much higher even than that. As an investor, or more accurately, a speculator, when the price of something exceeds its intrinsic value, I look for something else to buy. Therefore I am monitoring the gold price very carefully. Once the gold price exceeds my target I will shift into other sectors, irrespective of the fact that I think the gold price will exceed that target. Another important point, on the topic of the gold price: even though I am forecasting gold in excess of one thousand US dollars an ounce, about two and a half times its current price, that does not imply that I think the gold price will double in other currencies as well. In fact, it may well not. I do expect, however, that the gold price in almost all currencies will, over the long term, increase in proportion to the inflation rate of those currencies and by inflation rate I don't mean an increase in some or other index, I am referring to the increase in money, as measured, in the US for example, by M3. Gold -- Sharefin, 21:28:55 11/04/03 Tue Ghana gold giants set to merge South Africa's AngloGold and Ghana's Ashanti Goldfields look set for marriage soon, creating the world's largest gold producer with 26 mines on four continents. Ashanti, burdened by high operating costs and problems raising cash to pay short-term debt, received the go-ahead from the Ghana govenrment on Tuesday, although parliament here will have the last word on the merger. The merged company would produce 7.5 million ounces of gold a year. The bid is subject to government approval here because the Ghanaian government is also the regulator of the target company. Fiat -- Sharefin, 21:27:41 11/04/03 Tue Ted Butler and Silver Ted has in his heart the silver bug, like me. He does more for the silver investor and futures investor than anybody did before. If today you have 2 to 3 million ounces of silver being purchased by investors monthly, I believe 90% of that is because of what Ted Butler writes. I think he makes the biggest service for the American investor.(:-))) ~~~ Why to invest in cash silver? 1. The supply demand situation is unbalanced. 2. We are in deficit for years. 3. We are depleting existing silver bullion inventories. 4. We are coming to a shortage situation 5. You don't have new mines coming soon. 6. The old mines' reserves in the ground are minimal and coming to depletion 7. New uses for silver daily 8. When inventories will be depleted, silver will be the only metal with monetary value. Monetary value is when central banks are accumulating and they are going to accumulate silver in the future for strategic reasons. 9. You have 1 billion oz obligations by short sellers and banks that sold certificates with no real silver behind the certificates. This obligation of 1 billion ounces can not be paid back with real silver and must be monetized at dream prices 10. If you are not going to use 1 oz of silver industrially in the next 50 years, you are still not going to bring the stocks back to old peak levels. 11. 5000 years we accumulated silver, how many thousands of years will it take to rebuild those inventories? 12. If you are not going to use one oz of silver industrially in the next five years, the stocks of silver will still be lower than those of gold. And remember, gold is selling for 380 and silver at 5. Who is going to invest in silver? 1. If you have free money to invest 2. Who made his homework and believes that based upon supply/demand, silver is a good case for investment. 3. Who believes that silver will rise in coming years to tremendous value but is not interested for a scalp. 4. Who wants to enrich himself or his family and has a lot of patience for holding. The No No's of investing in silver 1. Don't borrow money, use only free, extra money 2. Don't speculate short term. 3. If you buy a certificate from a dealer or a bank, look at the small print and verify that you can take possession anytime. 4. Never go short silver and don't sell options. For every contract short, you must be prepared to lose a half million dollars. 5. Never play the ratio between gold and silver on the Comex. Everything is artificial on the Comex and they are going to take you to the cleaners. 6. Don't believe any bearish story on silver. They are planted and paid for by the short sellers and the only reasons the stories appear is to take away your silver. Value of silver Because I am a big believer in silver, probably my silver value is going to be different from other people. I'm going to quote value, not in dollars but in real life values. 1. For one oz, you are going to able to buy a dinner for 5 in a good restaurant. 2. For 50 oz, a family of four can live for a month. 3. For 100 ounces, you can buy a year's tuition in a good university 4. For 150 oz, you will be able to buy a luxury car. 5. For 2000 oz, a nice house 6. For one oz of silver you will buy one oz of gold. Fiat -- Sharefin, 21:24:22 11/04/03 Tue RBA rate hike puts sterling in focus ahead of MPC Sterling was buoyant on Wednesday amid expectations that the Bank of England would raise interest rates this week -- a prospect that gained momentum after the Reserve Bank of Australia raised rates earlier in the day. Gold -- Sharefin, 21:22:34 11/04/03 Tue Gold "nano-bullets" shoot down tumours Gold "nano-bullets" could seek and destroy inoperable human cancers, suggest new studies by US scientists. The tiny silica particles are plated with gold and heat up when near infrared light (NIR) is shone on them. This kills the cancer cells. Tests on human breast cancers, both in the test tube and in tumours in mice, were highly successful, the researchers report in the Proceedings of the National Academy of Sciences. "The nanoshells are designed to absorb near infrared light and convert that light to heat," explains Jennifer West, who led the study at Rice University, Houston, Texas. This is possible because the body's normal tissues are "essentially transparent" to NIR. West says the potential benefits of the treatment should be that, unlike other cancer treatments such as surgery, it would be non-invasive. Both NIR and the nanoshells are completely harmless by themselves, she says. "We believe that we should also be able to treat very small metastases, not detected yet," West told New Scientist. More recent, unpublished work by the group, has shown that the gold bullets can be injected into the blood stream and find their way to cancer cells in mice. "These results are promising, particularly for tumours that cannot be treated by surgery," says Emma Knight, at Cancer Research UK. "However, the studies are at a very early stage." The Rice University team created nanoparticles from a non-conducting core of silica with a diameter of 110 nanometres and a 10 nm thick metal shell. Gold was used because it is biologically inert. Gold -- Sharefin, 02:08:27 11/04/03 Tue K12 - Every American Born Will Need....  Fiat vs Gold -- Sharefin, 02:04:14 11/04/03 Tue Auspec Here's the link active: The New "Sons of Liberty" Periodic Ponzi Update PPU -- $hifty, 01:28:00 11/03/03 Mon Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,932.21 + Dow 9,801.12 = 11,733.33 divide by 2 = 5,866.66 Ponzi Up 142.64 from last week. Thanks for the link RossL ! Go GATA ! Go Gold ! $hifty Hultberg Link Corrected -- auspec, 18:27:32 11/02/03 Sun http://www.financialsense.com/editorials/hultberg/2003/1022.html Awesome read! We Got Firebrands! -- auspec, 17:54:15 11/02/03 Sun Here's another American Patriot.. Nelsom Hultberg & his "Sons of Liberty" piece {snippets}: http://www.financialsense.com/edito.../2003/1022.html Fair use copyright Americans for a Free Republic (AFR) is now a reality, and we have a scintillating website up to spread our message. Our website is meant to be a RALLYING POINT around which all lovers of freedom throughout the world can coalesce. It is meant to be a revolutionary force that can gather together the talent, money, and ideas to challenge the black limousine crowd in Washington and finally end their monstrous Leviathan. Visit our website http://www.afr.org and learn: Why all political third parties fail. How to correct the two major flaws that doom third parties to ineffectuality. How our innovative strategy will dramatically revolutionize politics in America. How gold money and equal tax rates are the weapons to bring this about. How we can stop the growth of Big Government cold. As noted above AFR's goal is educational; it is not to ACTUALLY FORM the Liberty Party. That will come later by the appropriate professionals and operatives skilled in such matters. We are only interested in educating people about the necessity of doing so along the lines of our innovative "two pillars strategy." We plan to build a massive constituency of prominent, influential, educated, rebellious Americans -- a vanguard to spread throughout the country, to do the actual selling of the idea of a Third Party based upon "gold money and equal tax rates." We wish to be the hub of the wheel that generates thousands of spokes (dedicated activists) that branch out and proselytize all the people in their respective spheres of influence. Our site content is geared toward the intelligent reader and viewer. We don't wish to try and educate the masses. We wish to reach the intelligentsia of society, who then will sell their fellow intelligentsia. Once a sizeable portion of this group has been won over, the masses will follow. Who are the intelligentsia? All those of you in this world who understand the power of ideas in the unfolding of history. You may be a teacher, a scholar, a pastor, an entrepreneur, a banker, a soldier, an artist, a publisher, a moviemaker, a laborer. But whatever your calling, the one common fabric you share is the understanding that ideas matter, that history moves toward the good because of RIGHT IDEAS, and that it moves toward evil because of WRONG IDEAS. It is fallacy and sophistry that are the main precursors to dictatorship. This is the nature of all mass movements in history. This is how the American Revolution was launched. Only a small portion of the colonists were actually for independence from Britain at the time. But they were the intelligentsia -- influential, prominent, educated, and rebellious. They were leaders in their personal spheres of influence. Their cause began in the 1760's via Patrick Henry in Virginia along with Samuel Adams, John Han**** and the Sons of Liberty in Massachusetts. The Sons of Liberty got together every month or so in the local taverns of Boston, and then expanded their gathering in the early 1770's to Boston's famous Old South Meeting-house where thousands of fellow rebels joined to show their true colors to the Tories. Out of this came the Boston Tea Party in December of 1773, which led to Lexington and Concord -- "the shot heard around the world" -- and full-blown revolution. It was the Sons of Liberty acting as the hub of the wheel, and the intrepid spokes they established, that set the colonies on fire with the desire for independence from Britain. It was their provocative thinking and firebrand personalities that spread the idea of revolution throughout the land. AFR hopes to become today's Sons of Liberty, to convince the American people to abandon the despotic Demopublican policies of PAPER MONEY and PROGRESSIVE TAXES -- to restore gold backing to our currency and eventually abolish all forms of income taxation. This is to be done through an innovative Third Party strategy that will force the enactment of radical monetary and tax reform. The New Sons of Liberty will come from every walk of life; but the inspiration that will bring them together will be their love of liberty and a resolute refusal to kowtow to the contemptible shams of Demopublicanism. Actually AFR is not laying the groundwork for a Third Party, but for a Second Party. We mean to adamantly challenge the statist establishment in America (which is the one-party monopoly of Demopublicanism). There are several million potential AFR patriots out there -- highly intelligent and desirous of "doing the right thing" in life. All of these patriots are leaders in their workplaces, their communities, their churches, their myriad spheres of influence. Perhaps you the reader are one of them. AFR's goal is to convince you that the right thing to do is to withdraw your sanction of Gargantua's welfare state. Our website http://www.afr.org hopefully will become a modern version of Boston's Old South Meeting-house where all members of AFR can coalesce to renew their spirit, to use as a recruitment tool for others to join the fight just as the original Patriots did in the years leading up to 1776. Once the country's intelligentsia has been won over to our cause, then the masses will follow and the Demopublican regime will crumble like the Berlin Wall. Oliver Wendell Holmes said that, "A man must become a part of the action and passion of his times, lest he be judged not to have lived." The goals of AFR will thrust its members squarely into the action and passion of our times, which we feel are destined to become the most tumultuous to descend upon our nation since its beginning. We seek the doers, the dissidents, the contrarians to join our hub and build a New Sons of Liberty for the 21st century. There are still numerous Berlin Walls to bring down. We are far from a majority in America today, but as Samuel Adams told his fellows in 1773 in the build-up to the Boston Tea Party, "It does not take a majority to prevail...but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men." Herein lies the goal of AFR. We intend to set brushfires of freedom throughout America. We intend to spread those brushfires until the flames and heat of resistance are so intense that Washington's tyrannical elites can no longer continue their usurpation of our rights. While the Clintons, Bushes, Rubins, Cheneys and Rumsfelds of today's America are different in method, they are basically the same in principle to Mikhail Gorbachev and Nicolae Ceausescu of yesterday's Russia and Romania. AFR intends to see that such Washington elites meet the same fate as their communist counterparts. While we do not intend to duplicate the Romanians treatment of Ceausescu, we certainly intend to duplicate the Russians' refutation of the weasel-tyrant Gorbachev. And we mean to extend such refutation to all future Demopublicans. END Comment: The Aaron Russo Presidential campaign Platform was announced by GATA in New Orleans this weekend. 12 points that free market and honest money advocates will applaud enthusiastically. To be put up at www.Russofor President.com in the near future. They Just Need a little Push, No? -- auspec, 17:11:02 11/02/03 Sun A few more thoughts about hitting Comex up for physical gold and silver: The following snippet is from Alex Wallenwein's article at LeMet entitled "The Anti-Gold Camp's Last 'Big Guns'": :::::::::::::::::::::::::::::::::::::::::: COMEX is "Overbought." Prices will Collapse. Who cares about the COMEX, anymore? In a few years, COMEX will be utterly irrelevant to the world of gold, and its current price-discovery function will be a distant memory. COMEX is to ninety-nine percent a cash-settlement market. That means that only one percent of COMEX plays are ever actually delivered in specie. That market will only survive as long as it remains lined-up with this secular bull-trend in gold. Should COMEX raise the margin requirements again a few more times, people seeking to trade real gold will simply go elsewhere, like, say, Dubai, for example. (The Euro vs Dollar Currency War Monitor's upcoming seventh issue has some surprising facts about the future of gold trading in the world. The price-setting function of gold trading will soon be performed in the physical market - and it likely won't happen in the United States, the way things are going.) Right now, the COMEX is going up nicely, but that's mainly because the Arabs and Chinese are jabbing at the dollar. Sooner or later, COMEX will lose its relevance. Those CFTC guys had better look for a job somewhere! END..............fair use copyright. :::::::::::::::::::::::::::::::::::::::: Look @ G-E for this article in its entirety soon. Once again, Wallenwein is CLEARLY an ANOTHER disciple if not an out and out Friend! The price setting mechanism for world gold only delivers 1% of the time!! Might just be time to hasten the demise of Comex gold and silver, ne? They can raise the margins as high as they want.........if you have the margin money and take delivery you get a world class paper gold price for real physical gold and your margin money back. This is gold as cheap as the "Stalker" is getting and you can do your countrymen a favor in the process, w/o a trip to London! 1% delivery at Comex is simply ridiculous. A simple 5 to 10% will likely stop or expose the fraud. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Richard Russell Sees Market Immoralities -- From www.dailyreckoning.com fair use copyright: The Daily Reckoning Weekend Edition 01 November 2003, All Saints Day New Orleans, Louisiana By Addison Wiggin and Eric Fry MARKET REVIEW: Russall Says – Gold To Reach $556 The Dow Jones Industrial Average put the finishing touches on another winning month by advancing 2.3% last week to 9,80. The Nasdaq performed even more brilliantly last week, gaining 3.6% to 1,932. October wasn't such a frightening month after all, although it scared the daylights out of a few short-sellers. The Dow and Nasdaq both defied the ghosts of Octobers past. "With Halloween passed," remarked Barron's Michael Santoli, "the market has made it through its toughest seasonal period unscathed. September and October are historically the worst for stock returns, but since the end of August the Dow is up 4.1% and the Nasdaq ahead by 6.7%." Meanwhile, the gold market is compiling an equally impressive record, having advanced six out of the last seven months. The yellow metal added only a dime during October, but has gained more than $45 since the end of March. The stock market and the gold market do not typically track together. And it's a bit mysterious that they would be doing so now. But their apparent synchronicity is more accidental than indicative, according to Richard Russell, editor of The Dow Theory Letters. As Russell sees it, the pricey stock market will soon veer off into a ditch, while the gold market will continue chugging along. Russell, appearing via live video-feed from San Diego, told the crowded auditorium of conference-goers in New Orleans that the gold bull market is for real and that it is in its infancy. It's bullish technical picture is a mirror image of the stock market's, he explained. To support of his assertions, Russell noted, "The S&P 500's 20-month moving average has crossed down through its 40-month moving average, thereby indicating that stocks remain in a primary bear market. "But look at the picture in the gold market," Russell urged the audience. "The picture is a mirror image of the stock market. The 20-month moving average of the gold price is crossing UP through the 40-month moving average, which shows that gold is in a primary bull market." "Gold is now in the accumulation phase," he says. "Gold is moving to strong hands from weak hands... $556 per ounce is the first target." Russell colored his dispassionate technical analysis with a bit of macro-economic fire-and-brimstone. "The system of fiat money is really immoral, almost evil. It will not last. Most of us will live to see the complete destruction of the U.S. dollar," the octogenarian stack market observer predicted. "When the dollar collapses, all hell is gonna break loose in the system. Regards, Eric Fry, The Daily Reckoning END Comment: Russell is to be commended for his boldness and discernment, same w the DR for reporting it.  "The Stalker".........continued -- auspec, 15:10:20 11/02/03 Sun I was told by a quite credible source that it is the LBMA where the "Stalker" is buying his $1B plus of gold and, of course, that makes perfect sense because London is where physical transactions occur for the most part. It was also confirmed that CRIMEX could NOT handle an order of this magnitude..........it would simply implode. YET, very few of those that fully comprehend this anomoly are willing to advocate the demand for physical delivery in massive size on Comex. "The time is not right" they say. Meanwhile the paper price setting mechanism continues unabated and remains the center of attention of gold bugs' focus. Personally, I believe that now is EXACTLY the time to start the encouragement of physical demand for gold as well as silver on Crimex. Run it honest or shut it down! Do you want a free gold market or not?! This is the fulcrum of manipulated gold and it has a tremendous vulnerability at that exact same spot. THROW THE DAMN TEA INTO THE OCEAN RIGHT NOW!! Silver would be even more vulnerable to physical demand than gold, because in reality, it is greatly scarcer {above ground}, in known quantities, than gold. I was told "It's a major hassle" to take delivery and "They make it very hard to take delivery"...........gee, I wonder why? In the end they have to put up or shut up........the rules state that it is the customers' rights to demand delivery. This process of demanding delivery, in size, by MANY unrelated parties is EXACTLY what is required. There is NO intent to "corner" a market when an army of unassociated "ants" DEMAND accountability on our national markets. The process needs to start ASAP in order to end the crooked markets ASAP. The longer we wait the longer we're held under their dishonest hands. If a $1B order will "blow up" Crimex gold, how muich could it take to do the same for Crimex silver? A fraction of that amount for sure. How many individuals with a contract or several contracts? How many people that signed the recent petition on silver abuses would be willing to set up a futures account and demand delivery? Of course, not just anyone is allowed to trade in commodities or options, but that simply means that those that have these requirements must exercise them in size. {Hint, hint: it's a real cheap form of purchased silver}. Can anyone guess why it is not likely to be done by Ted Butler? Ah, yes, the economic compromises we make when we're associated with a coin and bullion sales company. I think Ted is fantastic and I read everything he writes, but I also believe there's a better way to end the manipulation he has so admirably documented. I hope these words do not offend, but I operate under the premise that the truth is {almost} always appropriate. I say a campaign to force honesty on Comex precious metals would only take about 6 months of prodding to be quite effective, if undertaken by credible and widely distributed sources. There is plenty of money being invested in related markets such as bullion, equities, etc, that if focused on COMEX would stop the fraud. Why should we continue to allow the micro-management of gold and silver, at the paper margin, with little correlation to underlying fundamentals? Why does Jim Sinclair continue to coach his loyal subjects on how to win at the "Tea Tax" game when he should be simply dressing up as a native American and making a harbor full of salty tea? Sinclair is fighting yesterday's battles because that's what he knows best. Is it moral to participate in an immoral game just because one has exceptional skills therein? It's just a "chess game" to Sinclair, and he sees himself as the Grand Master, whereas, in reality, he IS only the Pied Piper of paper Gold as he sips freely from the tea of the King. How many of you have heard that the Orange Juice market is controlled and not a good place to "play"? Maybe we could get Sinclair to explain to us, next, how to beat the OJ Cartel at its own game. Surely he's be up for that once he has enough golden Wizzards {Comets} up and trained. What's the difference? He's pretending this is an honest market, ne? Or is he? Who is pretending that Silver is an honest market? Ted Butler isn't..........he's documented exactly the opposite. Do you want to learn to play with the Big Boyz in O.J., Gold or Silver? Play in their game with their stacked decks? Sinclair will teach you how to count cards and Butler will proclaim that the game must be allowed to continue because it is a fine institution. Others say.......the time is not right, we really shouldn't strike where the point of vulnerability is obviously the greatest. Butler says that Comex is such a fine American institution that it must be preserved. That's perfectly fine to keep it up and running IF it will fulfill its original purpose as an honest marketplace where users and producers meet to determine price. Ted will be the last person to say that is what is transpiring on Comex because he knows, best of all, that it is a fraudulent market where out-of-control unbacked selling is allowed. Some fine American Institution that one has become. Free markets are far greater than these various central planners and manipulators. Does one really think the free market will not find a mechanism of honest weights and measures to settle metal prices should Comex and the criminals who run it be forced into accountability? Where's the trust in the free market mechanisms by those who cling to this fraudulent "tradition"? Demanding honest markets, and honest money for that matter, is a much bigger goal than just making a few bucks on these crooked markets and leaving them this same way for our future generations. Sinclair and Butler are both coaching a few enlightened citizens on how to get around paying the "Stamp Tax" or the "Tea Tax" or whatever other form of tyranny happens to be their objective. Maybe we should set up a Committee to Ensure Social Security Payments for the Enlightened where a scant few of us can get back a portion of what we paid into this crooked system? What's the difference? A few profit because of special training and the masses are left with an oppressive collectivist system intact.........for future generations to deal with. Thank goodness those that inspired the American Revolution didn't take this approach. I would like Jim Sinclair to address these issues specifically, but will not hold my breath as he's engrossed in a world of "paper", which should be dumped in the harbor. See ya's back at the Tavern! Gold -- Sharefin, 08:29:12 10/31/03 Fri Barrick Gold's Hedge Book Has Jumped Up And Bit It On The Chin. Barrick has long prided itself on its expertise in hedging, but the gold hedge book reached a negative US$1.2 billion in the quarter and this compares with the market capitalisation of US$10.4 billion. CIBC World Markets expects the gold price to average US$415/oz next year so the problem is likely to exacerbate.. No ounces were delivered into the hedge book in the third quarter and none are likely in the last quarter as the gold price is well above US$340/oz. In fact the 16 million hedged gold ounces look likely to sit on Barrick's book for some time to come if CIBC is right about the gold price as the hedge book has a floor of US318/oz. How it will reduce the book is anyone's guess, but the company has said that it will not use shareholder money to do so. The analysts make the interesting point that the hedge book can be considered as a 10 year put at US$345/oz with a tenth year call at US$414/oz provided that the counter parties can take no action against Barrick to alter the terms of the agreement. With 16 million ozs due, however, it is likely that the company will have to start delivering into the hedge book at least three to four years before the expiry of the hedges. In a worst case scenario this might mean that the whole of each year's production might have to be delivered no matter how high the price of gold might have risen in the meantime. The negative mark-to-market value of the book is seen as weighing increasingly heavily on investor sentiment as the years progress. Gold -- Sharefin, 08:27:50 10/31/03 Fri Lies: G.D. Pee! Auto sales down 6% compared with last year! Oil imports up 23% Defense spending up over 15%! These are the real headlines from the GDP report yesterday, but you're not seeing the real numbers of corporate media. Instead we get happy talk and a Hooveresque "good times are right around the corner." Holy smokes, is this embarrassing. After spending 15 years as a reporter, I would have given more credit to my one time associates. Brother, was I ever off. Yes, the GDP numbers are completely hosed and in a moment I'll show you where the lies are buried and ask whether reporters can read (or they have no clue how to operate Excel). Or, more likely, they're just parroting what a ratings maven tell's 'em to or what the presidential "briefer" whisper in the media's ear. But let's not get personal. Let's dig up a few facts, shall we? ~~~ Now here is the whole point of the so-called recovery: There hasn't been one for most people. The "recovery" if you want to call it that, has been fueled by government spending. Check out the percentage changes: ~~~ You got it: Defense spending is up nearly 16% and non-defense spending is up 7.22%. States are getting screwed. Now think about this: The Federal Reserve has been printing money like crazy. From September 2002 to September 2003 M-1, the narrowest measure of money printed is up 8.11% . With real GDP (less defense spending) up less than 5% Our colleagues at HalfPastHuman come up with a brand new way of polling public opinion called the "TakeRake" which shows almost no one believes the GDP numbers out yesterday (see http://www.halfpasthuman.com/takerake103003.htm) So although the national financial press corps has either no brains or balls (or both), most common sense folks can see through this latest wool pulling very clearly. Well, that's the Friday morning rip and rant. I got up at 5 AM to ponder the numbers and that's how they look. Not only do average people see the truth, but if the recovery was anywhere near as robust as the headline number, the market would have popped more than a dozen points, that's for damn sure. If it was real, the market would have charged up 200 or 300. Didn't happen because at least a few folks can still read. This, my friend wraps up the scariest thing I could think of for Halloween. Gold -- Sharefin, 07:41:12 10/31/03 Fri Lies: G.D. Pee! Auto sales down 6% compared with last year! Oil imports up 23% Defense spending up over 15%! These are the real headlines from the GDP report yesterday, but you're not seeing the real numbers of corporate media. Instead we get happy talk and a Hooveresque "good times are right around the corner." Holy smokes, is this embarrassing. After spending 15 years as a reporter, I would have given more credit to my one time associates. Brother, was I ever off. Yes, the GDP numbers are completely hosed and in a moment I'll show you where the lies are buried and ask whether reporters can read (or they have no clue how to operate Excel). Or, more likely, they're just parroting what a ratings maven tell's 'em to or what the presidential "briefer" whisper in the media's ear. But let's not get personal. Let's dig up a few facts, shall we? ~~~ Now here is the whole point of the so-called recovery: There hasn't been one for most people. The "recovery" if you want to call it that, has been fueled by government spending. Check out the percentage changes: ~~~ You got it: Defense spending is up nearly 16% and non-defense spending is up 7.22%. States are getting screwed. Now think about this: The Federal Reserve has been printing money like crazy. From September 2002 to September 2003 M-1, the narrowest measure of money printed is up 8.11% . With real GDP (less defense spending) up less than 5% Our colleagues at HalfPastHuman come up with a brand new way of polling public opinion called the "TakeRake" which shows almost no one believes the GDP numbers out yesterday (see http://www.halfpasthuman.com/takerake103003.htm) So although the national financial press corps has either no brains or balls (or both), most common sense folks can see through this latest wool pulling very clearly. Well, that's the Friday morning rip and rant. I got up at 5 AM to ponder the numbers and that's how they look. Not only do average people see the truth, but if the recovery was anywhere near as robust as the headline number, the market would have popped more than a dozen points, that's for damn sure. If it was real, the market would have charged up 200 or 300. Didn't happen because at least a few folks can still read. This, my friend wraps up the scariest thing I could think of for Halloween. Gold -- Sharefin, 07:37:58 10/31/03 Fri Special Report Gold/Silver Trends and Indicators There has been a significant change in perceptions of gold, silver and their relationship to currency of all kinds and the concepts of money. Significantly, the data is showing that the emotive values associated with gold have risen over 34% since July of 2003. These emotive values are neither negative nor positive, rather they indicate that the verbiage being used to discuss gold has become much more emotionally charged. Further, and unexpectedly, the 'charging' of the emotion shift is clearly centered around 'enthusiasm' rather than 'fear'. The data reveals that while there is the perception existent of gold as 'persistently ill', yet 'not dead', there is a rising perception of gold as a 'receptive movement'.  A Few Thoughts........Thank You Sharefin -- auspec, 20:41:35 10/29/03 Wed The "Stalker" & other Issues: Speaking of Bill Murphy's reference to a Chinese based "Stalker" buying well over $1B of gold. Yes, $1B plus is a big nut to crack. How exactly it's covered is most interesting. This "Stalker" wouldn't be taking $1B down from Crimex, would he? I don't have the numbers off the top of the head {or the bottom} but I don't think Crimex could handle a $1B delivery order and still function anywhere near current levels. Am I wrong? Sinclair? He was at the N.O. Conference last year and drew a crowd everywhere he went. Very straight laced in appearance and somewhat professorial. Did not mind being the center of attention to put it mildly, and that really is not a criticism. He was and is again, "Mr. Gold". He's a trading genius and has guts to back it up, an unbeatable combination. Personally, I still believe him to be the "Pied Piper of Paper Gold" though as he draws so many into the paper games of Crimex. Delivery is the only game that should be played on Crimex as far as I'm concerned. He's personally winning a rigged game and in the process lending credence to it. That's yesterday's war. Oh well. Still, I read him regularly and greatly admire his knowledge. Much to learn. I had opportunity to ask him when exactly he knew all wasn't exactly right in the gold market, thinking about the GATA process at the time, and he said in the mid 1990's. Now he says the market isn't really manipulated as GATA alledges. Can't have it both ways. Barrikk ties concern me frankly. How can they not? Now I see JS giving it to others, like Andy Smith, about 'elitist connections'. In sum total...........JS is a most worthy Generalissimo, but I'm still keeping a close eye on him. Yes, the 'cabal' constantly buys in order to sell later. I have always thought they could work off a good deal of any off-side position in this manner. The opportunities to make money in each direction, mostly known in advance, have been near limitless. Still, current buying is overwhelming and if they join in instead of sell we will be off to the races. Every level that has been defended since the $250's has fallen...........$400 soon to follow. That's simply bad strategy but what else could one expect from these central planners. Why did Communism supposedly fail? They say that their markets had no resemblance to true values because of government interference in these processes. Misallocations of capital. Well, let's look at that a little closer to home, eh? If that's really why the Iron Curtain came down we're not too far behind. They bankrupted and we're bankrupt but still in denial, but the wallpaper is lovely. $400 would be real nice but, in reality, that's only about 3.5% higher than current price of $380. No big deal in actuality. Short covering rally........? No, not like most have been looking for in the last 6 or so years. Simple monetization is the substitute as many have stated at numerous 'chat' sites FAR before other experts. Raise the bar, monetize, paper over the problem.............that's what we'll continue to see in the coming months. EVERY defended level will continue to fall because of the arrogance of the elitist bankers. They simply DON"T have enough good sense to defend a position $50 higher, as some of us continue to tell em. They could buy themselves enough time to extricate their short positions if they didn't insist on their all or none approach. Alas {party hardy}, the die is cast. They want a stealth bull market in gold? Works for me. What could be much better? I still ask around for more common interest in gold by the public and it's non existent. This with stocks going 2X, 5X, 10X and more. Nothing quite like having the punch bowl to oneself. "Financial intelligence"? Like some mention.........many get the inside scoop and literally steal from other participants. "We" do have to read between the lines, but at least we're looking there and capable of understanding what exactly is going on. Everyone else is just plain screwed, ne? The poor sheared sheep, as always. New Orleans is sold out this year. 2 years ago it was OK but still somewhat sparsely attended. There is plenty of money for exploration these days and acquisitions will soon be front page once more. The wall of worry is still front and center and makes for great comfort.......GREED will follow somewhere along the line. My personal philosophy, since the Bre-X scandal and SEVERE gold stock declines, has simply been that, regardless of how long it takes, we're sooner or later going to have ANOTHER mania. Cycles................. nada mas, nada menos. Patience wins that game. Only a complete fool, or a central planner {or both}, would try to intervene in the cyclicality of markets. There's no accounting for peoples' thought processes; some internet posters think it's 'easier' to set up a secondary silver mine than it is to take readily available silver from near surface. Fortunately for him he doesn't buy mining stox, yet he claims to be expert. I guess when they find secondary silver down near the center of the Earth, he'll want a part of that action because the silver will somehow be "free". OK............. Butler is strongly in favor of keeping Crimex open because it is an American institution. Might as well keep our bot and paid for Congress on the dole while we're at it or our supposedly free press. Krud, folks.........run it honest or SHUT IT DOWN!!! Why celebrate the Commies failing for central planning but cherish it when we do the same? Ted............I love ya man, but you're becoming the Pied Piper of Paper Silver. You and Sinclair make perfect bookends. TAKE DELIVERY AS THE RULES ALLOW AND RUN IT HONEST OR SHUT IT DOWN!!! WHO NEEDS DISHONEST MARKETS??? Heading for the epicenter soon. Gold -- Sharefin, 06:56:33 10/29/03 Wed Beyond Some Bumps for Gold Leo Larkin, the S&P analyst who follows the industry, wouldn't be surprised to see a sell-off in the metal -- and in gold-mining stocks as well. He cites a key technical factor: the inability of gold to close above the highest level of the current rally -- $389 an ounce, reached in February, 2003 -- based on prices in the spot market. Larkin says this failure, in the face of multiyear lows in the trade-weighted U.S dollar index, is a negative for gold in the near term. Still, Larkin notes that gold's positive long-term fundamentals remain intact. He thinks investors continue to believe that equity markets are less likely to offer as much competition for investment demand as they did in the late 1990s, when double-digit annual rates of return were the norm. While the stock market has had a positive return so far in 2003, S&P anticipates that financial assets in general will be less rewarding compared to the 1990s. Larkin thinks erratic returns in the overall market may boost demand for gold and the mining stocks. ~~~ 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. In addition, the deficit between production and consumption should widen as output declines and physical demand for the metal likely increases. Larkin believes the low level of gold prices over the past few years has led to sharply reduced exploration and will likely result in lower production even if the metal price rises dramatically. Gold -- Sharefin, 06:42:39 10/29/03 Wed Asia Gold-Bars at discount, investors cut positions A firm bullion market has prompted Asian investors in gold to reduce their positions in the past few days, leading to an increase in the supply of bars and pushing premiums to a discount, dealers said on Tuesday. Spot gold (XAU=) looked set to test new highs on the back of volatile stock markets and a sluggish U.S. dollar, renewing the yellow metal's status as a safe-haven asset, they said. Good delivery bars were offered in Hong Kong at 10 U.S. cents an ounce below loco London gold prices versus a premium of 10 to 30 U.S. cents early last week as investors, mainly from China and South Korea, sold their holdings to take profit. "The price is high, so more supplies are coming in. There are more physical sellers in the market," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong, which has a thriving gold jewellery manufacturing industry. "(Gold bar) is trading at par or to a discount of 10 cents," said Chu. ~~~ Dealers said steady demand from India supported the physical market even though rising prices had caused frustration in the world's largest consumer which had just celebrated the Diwali, or the festival of lights. Dealers said gold was likely to breach the $395 resistance level soon because of strong fundamentals, leaving little room for consumers to be picky. India needed more gold during the wedding season which continues until March, while consumers in the Middle East were stocking up ahead of the Muslim Eid al-Fitr celebration next month. More demand will eventually reinstate gold bar premiums, dealers said. "Anyone who wants to buy a television set will be frustrated if prices go up. But if you really want to buy a TV, rising prices should not stop you," said one dealer in Hong Kong. "The Indians do need to buy gold or they wish to buy it. If you know prices will go to $400, you will buy gold when it's trading at $388," he said. Gold -- Sharefin, 06:40:44 10/29/03 Wed AngloGold bags Ashanti AngloGold is only weeks away from challenging Denver-based Newmont Mining Corporation for the title of world's largest gold producer, after its bid to buy Ashanti Goldfields tonight received the crucial approval of the Ghanaian government. According to a report filed from Accra late last night by the Agence France Presse newswire, the Ghanaian government had approved the AngloGold bid for Ashanti. Neither AngloGold nor Ashanti representatives were immediately available for comment. Once closed, the deal will take the merged company's annual production to a little over 7.5 million ounces of gold a year, based on last year's production figures for AngloGold (5.9moz) and Ashanti (1.6moz). Newmont predicts its gold production this year will be between 7.2 million and 7.4 million ounces. Gold -- Sharefin, 06:38:54 10/29/03 Wed Experts predict gold prices to top $400 an ounce by year-end Gold was treading water in Europe yesterday as the market took stock of last week's gains to within a whisker of seven-year highs, with analysts calling for bullion to have a crack at the elusive $400 an ounce level. But getting there would require further dollar and equities weakness to lure powerful fund money into gold. "We think that the positive sentiment in the market is strong enough to test the old high. The majority of players are waiting to see gold at $400 and therefore selling pressure will be limited while the dollar remains at least stable or loses some more ground," Alexander Zumpfe of Dresdner Kleinwort Wassterstein said in a daily report. Gold -- Sharefin, 06:30:09 10/29/03 Wed Gold Is Money - Deal with It! Gold bugs don't get out much. And it's very rare that we get an opportunity to address mainstream opinion makers. So it's a great honor indeed to speak to an organization that counts among its members some of the world's most influential mining analysts. I'm grateful to the Association, and to Chairman Michael Coulson, for inviting me here to talk today. As the title of my remarks suggests, I'm not here to discuss the dissident theory of undisclosed official intervention in the gold market. Or to introduce or expand upon some new piece of evidence in support of that theory. Rather, I'd like to focus on the mainstream view of gold itself. I have two reasons for doing so. First, because I think as long as you hold that view, there's no way you can even hear the dissident message. Second, and more important, I think it's time for influential people to begin thinking about what comes next. The dissident message, after all, is just one facet of a much bigger issue: the current monetary system is rotten to the core. So the question arises, where do we turn when the dikes break? The gold bugs' answer is simple: we'll have no choice; it'll be back to gold. But as long as the mainstream view is in place, it will continue to mask the true nature of the problem and prevent us from thinking constructively about a solution. ~~~~ So I would urge the analyst community to heed the advice of the late Bob Marley, and emancipate yourselves from mental slavery. Stop salivating when the bell rings. Gold needs central bank support like a volcano needs stoking. Drop this fixation on the Washington Agreement. Call the bankers' bluff. Tell them to sell it all. The sooner, and the lower the price in dollars, the better. Unfortunately, what I expect will happen is the opposite: a sudden rush to buy, not to sell. There will be a belated recognition among all market participants, including the central banks, that paper currencies are garbage. When that happens, we'll have what we call a discontinuous event. The ultimate black swan. We'll all wake up one morning to learn that gold is 5,000 dollars bid in Asia, none offered. That tinkling sound you'll hear will be scales dropping from the eyes of analysts all over the City. By then, however, the big money -- and I use the term very, very loosely -- will have already been made. More important, the opportunity to contribute some fresh thinking regarding monetary reform in a period of relative calm will have been missed. So don't get caught with your paradigms down. Gold -- Sharefin, 06:11:02 10/29/03 Wed Barrick Profit Edges Up, Hedge Book Still Weighty Barrick Gold Corp. posted a profit in line with analyst expectations on Monday, but for the first time this year the world's No. 2 bullion producer did not reduce its bulky hedge book over the quarter. A robust gold price meant the Toronto-based producer opted to deliver its product into the spot market, where it got a better price than from its hedge program, under which it has sold forward 16.1 million ounces of gold. But Barrick admitted again that the size of the hedge book, equal to about three years' worth of mine output, was too big and that it wanted to cut it back by about a third to 20 percent of gold reserves. "We will continue to look at ways to bring the book into line that makes some sense," Greg Wilkins, Barrick's chief executive, said. "But we are not going to spend a lot of hard-earned shareholder cash to necessarily do what the market can do for us as quickly," he said on a conference call. The world's second biggest gold miner by market value said it sold its gold at an average $365 an ounce in the third quarter. The minimum price on its secretive hedge book is $345 an ounce. The hedging program, vilified by a vocal contingent of investors who oppose any gold firm reducing its exposure to the gold price, is under water to the tune of $1.2 billion -- its unrealized mark to market value at September price levels. Gold -- Sharefin, 06:08:40 10/29/03 Wed Merrill forecasts gold miners to feel C$ squeeze Four Canadian mining firms with big domestic operations are expected to feel the greatest earnings pinch from a stronger Canadian dollar, a leading brokerage said on Tuesday. ~~~ The Canadian dollar was trading around 76 U.S. cents on Tuesday afternoon, near 10-year highs, after a gain of almost 20 percent against the greenback this year. "The recent strength in the Canadian dollar versus the U.S. dollar, is putting pressure on the earnings of Canadian mining companies with assets in Canada," Merrill Lynch said. "Not surprisingly, companies with substantial assets in Canada are most affected." A stronger Canadian dollar results in increased U.S. dollar-denominated cash costs and lower revenues, which squeezes margins. Canadian dollar-denominated capital expenditures also increase when converted to U.S. dollars, the currency in which bullion is traded and the gold miners report. Fiat -- Sharefin, 05:49:52 10/29/03 Wed The coming currency devaluation After repeated warnings from currency analysts and market advisors (including yours truly) that the U.S. currency system is on the verge of becoming a blocked, two-tier system we now have confirmation that the country is one step closer to realizing this. When fully implemented, the new U.S. dollar will mean a "banana republic" type currency and across-the-board devaluation. ~~~ So what is the significance of this change of color in the U.S. $20 note? Well according to the Feds it is designed as a deterrent to stop counterfeiters. But accordingly to currency analyst Lawrence Patterson, who authored the 1994 monograph titled "Currency Recall", which accurately forecast the new multi-colored notes, the new colored money is part of a two-tiered currency system that will have drastic implications for investors and non-investors alike here in the U.S. Patterson calls the new notes "crayola currency" and claims they will circulate domestically while the normal green currency that we've grown accustomed to will circulate offshore all over the globe. According to commentator Terry Savage, "Two-thirds of the U.S. paper currency is circulating in foreign countries." With the coming two-tiered currency system, foreigners will continue to be allowed to use the greenback while U.S. citizens will be stuck with the "crayola currency" which cannot be exchanged. Patterson forecasts the coming use of foreign exchange controls for the U.S. dollar domestically, which would prohibit Americans from transferring capital to any other world currency. Again, this is discussed in Patterson's now-classic monograph "Currency Recall" (which I've read and highly recommend to students of currency policy and investors seeking to retain the value of their investments). Patterson states, "I want every one...to think carefully about this...because we are coming very, very close to the end of the freely convertible domestic dollar. They cut in value could be as much as 50%...I believe those holding gold bullion bars offshore and bullion coins domestically will be very surprised to find that special regulations will prohibit them from profiting." Fiat -- Sharefin, 05:45:17 10/29/03 Wed Buffett: Berkshire Has Major Intl Currency Investment Berkshire Hathaway Inc. Chairman Warren Buffett says that since the spring of 2002, "Berkshire has made significant investments in - and today holds - several (foreign) currencies." Fortune magazine said in a press release Monday that in an article to be published in the Nov. 10 issue of the magazine, Buffett writes, "To hold other currencies is to believe that the dollar will decline. Both as an American and an investor, I actually hope these commitments prove to be a mistake." Buffett is quoted as writing that the U.S. trade deficit "has greatly worsened, to the point that our country's `net worth,' so to speak, is now being transferred abroad at an alarming rate." Buffett says foreign ownership of U.S. assets will grow at about $500 billion a year at the present trade-deficit level, which means that the deficit will be adding about one percentage point annually to foreigners' net ownership of U.S. national wealth. "A perpetuation of this transfer will lead to major trouble," the press release quotes Buffett as writing. The press release says Buffett proposes issuing "import certificates" to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would sell the import certificates to other parties - exporters abroad or domestic importers - wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need import certificates that were the byproduct of $1 million of exports. Gold -- Sharefin, 05:43:13 10/29/03 Wed GOLD PRICE MANIPULATION As with any claims about an act which may be illegal, unfair or both, evidence is required. Here there are 6 aspects that will be discussed – namely motive, means, proof, opportunity, track record and impact. Gold -- Sharefin, 05:41:19 10/29/03 Wed Bullish on bullion Pierre Lassonde also sees something equally as lovely, plain as day, and not too far off in the distance: a $450 (U.S.) gold price. ~~~ He just sees the silver lining forming on that cloud called gold, which is floating ever closer to the heavenly $400 mark after far too long in purgatory, much to the delight of long-suffering investors and die-hard gold bugs like him. "After a 20-year bear market, it is very exciting to finally see a bull market for gold, and we believe it will continue for the next three to five years," Lassonde says. ~~~ Bullion is getting a long overdue boost from the bulls thanks in large part to the sliding U.S. dollar and the soggy world economy. ~~~ "It's the world's way of saying: we'd like more gold," explains veteran gold analyst Martin Murenbeeld. ~~~ He sites a host of factors, with the key being the weakness in the U.S. currency and world stock markets, historically the reason that gold is considered a safe haven for investors. "The U.S. dollar is seriously overvalued," his report says, adding its decline is inevitable and it would drive up the price of gold as it headed south. Also, the slowing of the world economy has led to stimulative monetary policies such as lower interest rates and easier loan conditions, more growth in the money supply and governments running budget deficits, which are all positive conditions for gold. He points out too that the Chinese gold market is being deregulated, which is putting fewer restrictions on buying gold, and that there are also new gold products being introduced to the public for investment purposes, such as exchange-traded funds, so that people can buy bullion on the stock market in paper form. Also encouraging is news that the central banks are expected to announce a continuation of their agreement to limit gold sales, which in turn means that they're not going to just dump gold into the market and weaken demand. "If things continue along this path, gold is going higher," Murenbeeld says. "We don't see an end to this anytime soon." ~~~ "This industry, quite frankly, is not viable long-term unless the gold price is $350 or higher," Flores says, noting big development projects are very gold price sensitive and they just weren't economical for the seniors at a $300 gold price. Now that it's safely over that hump, everyone is in a better position to raise money and conduct exploration, and the incentive to merge or hedge has been significantly reduced. "Gold and the U.S. dollar has been the most dominant relationship out there (in the market)," says mining analyst Barry Allan of Research Capital Corp. "There was a long steady climb in the U.S. dollar, but we're on the other side of that now," he says. "The overall tone for bullion is positive," Allan says, adding that while $400 is mentally a big barrier for the market, he says it will still take a couple of years to sustain it. Since a spike in the U.S. dollar is highly unlikely, he sees slow and steady improvement for the commodity. As eternal optimist Murenbeeld puts it: "People like to set up these magic numbers, but gold just blasts through them." Gold -- Sharefin, 05:36:51 10/29/03 Wed Gold hits seven-year closing high Gold rose to its highest closing price in seven years in New York, recording the biggest weekly gain in 20 months on speculation that declines in equities and a drop in the dollar against the euro will stimulate demand. Gold climbed 4.6 percent this week, as falling U.S. stock prices extended a 25 percent rally in gold during the past year by making the metal more attractive to investors. Prices had risen earlier on declines in the dollar against the euro that made gold cheaper for European buyers. "A weaker dollar and potentially weaker stock market should translate into more investor demand for gold," said Scott Morrison, who manages $6.5 million at SAM Capital LLC in New York and trades gold futures. "It's going to be hard to make upside progress in the near term in the stock market, and that should be positive for gold." ~~~ "With mine supply likely declining and demand for gold being strong in an uncertain economic and geopolitical environment, the outlook is positive for gold," said Jamie Sokalsky, chief financial officer of Toronto-based Barrick Gold Corp., the world's third-biggest producer after South Africa's AngloGold Ltd. It takes at least five years to develop a new gold mine, and gold industry exploration spending has fallen to about $1 billion a year from $4 billion a decade ago, Sokalsky said in an interview. ~~~ Declines for equities and the dollar contributed to a 25 percent rally in gold futures last year, the biggest annual gain since 1979. Prices are up 12 percent so far this year after touching a seven-year intraday high of $394.80 an ounce on Sept. 25. U.S. stocks may decline further on selling by investors taking advantage of the 17 percent rise in the S&P 500 this year, said Michael Guido, associate director of hedge-fund marketing at Barclays Capital Inc. in New York. "All these traders are looking at huge profits" from gains in U.S. stock prices this year, Guido said. "If they fear a year- end sell-off, equities will get crushed, the dollar will go with it and gold will go to $400 or more." Speculators have contributed to the rally in gold, increasing their holdings in futures contracts to the largest in at least two decades in early September. As of Tuesday, hedge funds and other large speculators had bought 80,864 more gold futures than they had sold, up from a "net-long" position of 76,892 the week before, a report late today from the U.S. Commodity Futures Trading Commission showed. The position had soared to 122,847 on Sept. 2, the largest since at least February 1983. Gold -- Sharefin, 05:33:46 10/29/03 Wed The Fed, Then and Now Today, it is taken for granted that the Federal Reserve System's role is to manage the economy with the crook of monetary policy, as shepherds leading a flock to greener pastures. Therefore, Fed Governor Bernanke could state in a recent speech, "The ultimate objective of monetary policymakers is to promote the health of the U.S. economy, which we do by pursuing our mandated goals of price stability and maximum sustainable output and employment." He could expect no heckles and received none for beginning his speech with what he probably thought was self-evident wisdom. It was not always thus. The Federal Reserve of today would not be recognizable to its founders in 1913. The change is so dramatic it is worthy to briefly compare them. It also illustrates the sure way in which governmental bodies evolve to consolidate and expand their power through the years. ~~~ Gold was the most prominent feature of the monetary scene prior to the dark winter of 1913. A man could not talk about money without mentioning gold. The new institution was expected to follow gold standard rules, its founders had thought. Gold movements, it was thought, would still determine long-run price changes. How wrong they would be. The disappearance of gold from the monetary scene is perhaps the most tragic economic calamity to befall the world of money in the twentieth century. Views on gold in the first two decades of the twentieth century compared to those held today could scarcely be more different. Gold as money used to be a consensus view. In what sounds strange to modern ears, Meltzer writes "Central bankers and most economists in the 1920s regarded the gold standard as essential for monetary stability." Ordinary citizens, too, thought gold was the way to go. Meltzer continues, "Efforts to restore the gold standard in the 1920s and to fix exchange rates within a gold-based system, met little opposition." Popular support for the gold standard was a feature in national elections. Meltzer writes "The gold standard was a main issue in several presidential elections in the United States. Each time, the gold standard candidate won." There had been some populist opposition to the gold standard in the nineteenth century, perhaps most famously from William Jennings Bryan, but even so, gold was widely viewed as the best way to prevent long-term inflation. Although, as Rothbard warns us, the support of the gold standard by various bankers and economists was, in some cases, not a genuine support of hard money per se. It was as much an expression of support for a monetary system in which they expected to exercise better control. In Rothbard's words, many of the financial elite "…wanted to press on to use the gold standard as a hard-money camouflage behind which they could change the system into one less nakedly inflationist than populism but far more effectively controlled by the big-banker elites." The darkening forces of inflationists gathered strength, too, in the world of ideas. Spurred on by Keynes, old discredited ideas dressed up in new snappy apparel gained converts. The consensus view melted away with the gradual dissemination of Keynesian ideas in the 1940s. Activist policy was in; gold orthodoxy was out. The seeds of the great inflation of the 1970s had been planted. Today the dollar, not gold, is the world currency. But for how much longer? History gives us no example of a longer lasting paper currency than the dollar, which has been freed from gold shackles since Nixon's closing of the gold window in 1971. That spelled the end of the Bretton Woods agreement, which had been the world's monetary system since 1944. By the standards of paper money, the dollar is growing long in the tooth. What will be next? When? No one knows the answer. The Fed's evolution too, seems to have reached its limit. What more can it do? Suffice to say, as this brief historical sketch shows and as all governmental bodies have done, it will find something to do unless it is stopped. Laws and rules will not contain it. History has shown how far it has strayed from its original form. It needs to be pulled by the roots, its charter revoked and its employees sent into the marketplace to find gainful employment. Money will then be returned to the market from whence it came, its best steward and ablest protector, with durable money the end result. Gold -- Sharefin, 05:30:16 10/29/03 Wed Goldcorp price reflects metal's mystique not reality If there is a more promotional company in Canada than Goldcorp Inc., you would have to search far and wide to find it. Not content to compare itself with other gold producers, the company sent investors a chart that juxtaposed its stock performance with that of Berkshire Hathaway, Microsoft, IBM and other U.S. giants. The chart, as you might expect, shows Goldcorp trouncing every one them, and the news just keeps getting better. Third-quarter profit, released Tuesday, was a record $24.6-million (U.S.). The dividend is going up for the fourth time. In U.S. dollars, the stock keeps hitting new highs, and only the surge in the Canadian dollar keeps it from breaking records at home. Goldcorp is well-managed, a success story. Too bad investors have lost their minds about it. As of yesterday's close of $31.04 on the New York Stock Exchange, Goldcorp's market cap is almost $3-billion. The balance sheet is spotless -- no debt, and nearly $400-million in cash, bullion and investments -- so the real value is about $2.6-billion. Think of that as what an investor would have to pay for the company today. For that price, you get one of the world's richest gold mines. Goldcorp's Red Lake mine is a marvel because the gold is so inexpensive to get out: through September, the company's cash cost was just $78 for every ounce produced this year. (Barrick Gold's cash costs, by comparison, are $185 an ounce.) ~~~ At the end of 2002, the company estimated it had 5.5 million ounces of proven and probable gold reserves; 5.1 million of those ounces are at Red Lake. The math is simple: with a market value of $2.6-billion (net of cash and investments), investors are paying $470 for every ounce of reserves. (The current price of gold is $386.50 an ounce.) But Goldcorp has shown an ability to find more gold than it's digging out. Its estimated reserves increased by about 700,000 ounces last year, and by nearly 600,000 ounces the year before. (Production this year is forecast to be about 600,000 ounces.) You have to believe they can do it again, though we won't know for sure until the company releases its year-end financials. If you assume Goldcorp can increase reserves to 6.5 million ounces, the current share price still represents about $400 an ounce. However, that's just for the gold in the ground -- and Goldcorp, like most of its peers, doesn't quite present the whole picture when it talks about the cost of getting it out. Cash costs are what the company spends to extract gold at the mine site; they don't count exploration costs, or the money spent acquiring stakes in junior gold explorers, or the cost of keeping a head office in the heart of Toronto's financial district. Corporate overhead was $6.3-million in the first nine months of the year, or $14 for every ounce of gold produced. Exploration costs added up to another $5 an ounce. All of these are necessary expenses for a mining company, but aren't counted in cash costs. The point is that with a stock that probably represents at least $400 for every ounce of reserves, and with real costs of at least $100 to produce it, the price of gold has to go higher than $500 before Goldcorp shares even begin to make sense at this price. That's using reasonably optimistic assumptions of new reserves and costs. If the company disappoints in finding new gold or its costs rise, the break-even point for investors buying at current levels could be $600 an ounce -- or more. To gold bugs, of course, that's not only possible, but likely. The enormous U.S. deficit brings the prospect of inflation; gold is a safe haven to those who no longer believe in the U.S. dollar. Supply from gold mines appears set to fall, and in any event is outstripped by demand, says Murray Pollitt, president of brokerage Pollitt & Co. There is a bearish case for gold as well, he says, "but it involves miracles," like a huge new discovery. Is he right? Maybe. But accurately predicting the direction of commodity prices is next to impossible; you might as well use a Ouija board. Suffice to say that if gold doubles in value, Goldcorp will be an extraordinary investment. On the other hand, if it remains where it has been for two decades, today's share price is absurd, a function of gold's mystique and not of rational thinking. Gold -- Sharefin, 05:25:44 10/29/03 Wed Gold's Rise: Something New To Worry About At $385 per ounce and climbing, the dollar/gold price is now threatening to break the $400 level we think would put a major crimp in the financial markets and the economy. When gold last broke $390 in late September it may have been no coincidence that equities sold off, recovering only when gold sharply retreated. What we now have to worry about is an unintended consequence of the Patriot's Act, one that almost certainly is steadily reducing the demand for dollar liquidity in a way that produces upward pressure on gold and downward pressure on the dollar relative to the euro and yen. These are in the provisions designed to track down suspicious transactions that might be endangering homeland security, specifically those referred to as "Know Your Customer," (KYC). The due diligence is horrendous, with the problem not in the language of the Act, but in the way Treasury is writing the regulations. Earlier this month, it published a "clarification" to Section 326 of the Act, which requires financial institutions to have a process to identify customers and periodically check data about them against watch lists maintained by Treasury's Office of Foreign Asset Control. But while the Act requires financial institutions to develop the ability to detect and report money laundering by suspected terrorists, there are more than 46 specific subsections that cover enforcement requirements. Gold -- Sharefin, 05:23:05 10/29/03 Wed Gold prices, metals shares climb "If the dollar continues to weaken and if the condition for inflationary prices in raw commodity materials continue to move higher, this may attract more participants in the precious metals arena," said John Person, head financial analyst at Chicago-based Infinity Brokerage Services. ~~~ "The gold market is attempting to test the $400 mark, which can happen certainly by year's end," Person said. And declines in the broader stock market, more weakness in the dollar, rising budget deficits, stronger Asian and Foreign demand and higher commodity prices "may spark further buying from investors," he said. But one analyst noted that pressure is mounting for higher interest rates, a development that could counteract gold's rise. Graham Leighton, a gold analyst at Societe Generale, pointed to the news on Wednesday that four members of the Bank of England's nine-person policy committee voted to raise interest rates in the United Kingdom. "Expectations are that the U.K. could raise rates as early as the November or December meeting. This would be the first major central bank to raise rates since the easing cycle began three years ago," Leighton wrote in a report for clients. And if that marks the start of the end of low interest rates, and global recovery is imminent, "this would in turn spell disaster in the long run for gold and should help propel base metals to even loftier heights," Leighton said. Gold -- Sharefin, 05:19:50 10/29/03 Wed Gold's Value Climbs, But Analysts Warn It Is Still Volatile Commodity The high regard for gold in human history and culture is obvious. In ancient times, kings craved it. Today, athletes compete for gold medals. We mark wedding vows by exchanging bands of gold. Even the streets of heaven are said to be paved with it. "From the beginning of time, there's always been this lust and this hunger for gold," said David Derzon, a West Allis coin dealer who buys and sells gold. But gold's status as an investment isn't as clear. For some, owning gold bullion or shares of gold stocks is an important hedge against inflation and downturns in other investments. For others, gold is seen as an investment whose price is too susceptible to major swings. At the moment, at least, gold is back on more investors' radar screens, thanks to increases in the per-ounce price of the yellow metal over the past two years and strong showings for mutual funds focused on gold and gold mining. ~~~~ "It's highly volatile. That's one of the key points," Russell said of investments in gold. "Whether you are dealing with bullion or whether you are dealing with mutual funds or stock, they are really more volatile than most investors can handle." Not everyone agrees with that assessment, especially investors and analysts nicknamed "gold bugs" for their fondness for gold as the most rock-solid type of money on Earth. Fiat -- Sharefin, 05:16:27 10/29/03 Wed Potential Dollar Scenarios Never before in recent history have monetary and fiscal policies been as "stimulative" as today, and yet, the American economy remains weak and vulnerable. The Federal budget deficit for the 2003 fiscal year was posted at $555 billion, some six percent of GNP; it may continue to rise in coming years when new tax reductions add their weight. The Federal Reserve System has opened its flood gates and reduced all interest rates to their lowest levels since the 1950s. Its basic rate now stands at just one percent permitting the stock of money in all its forms to soar at frightening rates. Government and Federal Reserve officials are convinced that this combination of stimuli is bound to facilitate an annual growth rate of 3.75 to 4.75 percent, just like that of the late 1990s. The fact that this opinion is widely held by many officials and economists is no evidence that it is accurate; indeed, in our age of inflation and economic manipulation, an official pronouncement is more likely to be political than sensible. With the gates wide open, the rush of liquidity is bound to inflict serious harm not only on the American economy but also on global conditions. The Federal Reserves utter disregard of the market rate of interest, which guides the efficient employment of all factors of production according to consumer choices, is bound to do great harm to the economic structure. It causes severe maladjustments and imbalances which market forces sooner or later are bound to correct. ~~~ The pessimists in our midst envision a truly calamitous chain of events. They are convinced that present policies will continue year after year until inflation will accelerate and finally destroy the dollar, as it has so many other currencies in the past. ~~~ Our favorite scenario builds on a gradualist adjustment which, in democratic societies, is the only realistic outline of changes. When the electorate finally realizes that the U.S. dollar moves from crisis to crisis at ever shrinking value and purchasing power it may want to retrieve the old anchor of all currencies, the gold standard. The world abandoned it in 1971 when President Nixon defaulted in international gold payment obligations and made the fiat dollar the only available medium of exchange. Since then the world has moved from crisis to crisis, suffering from ever increasing maladjustments. Fiat -- Sharefin, 05:04:17 10/29/03 Wed The End of Dollar Supremacy? So why the jitters about the imminent decline and fall of the US dollar that have emerged? Isn't there reason to believe that the dollar's supremacy will remain undisputed in the future as well? Unfortunately, the outlook is more dramatic than the question may suggest at first glance. The dramatic statement says that—at least for a while—the dollar will not be replaced by another global means of exchange but that the dollar may lose its supreme role nevertheless. A fall in the dollar from its pedestal with no substitute to replace it would be the very disturbing outlook suggested by an interpretation of the current trends. The disastrous consequences of the demise of the dollar as the global currency with no other means of exchange to replace it refers to the outlook that we may enter a period of currency chaos and a global economic contraction. Losing trust does not mean that there must be a ready substitute. On the contrary: when distrust will emerge towards the US dollar this would affect the attitude towards all paper currencies. In the final stages of the currency crisis, the dollar will most likely devalue not so much against the euro and the yen, but all of these currencies and most of the rest will devalue drastically against gold. Fiat -- Sharefin, 04:30:00 10/29/03 Wed BoE warns 10 years of rising rates ahead HOME-OWNERS and borrowers are today facing the prospect of ten years of steadily rising interest rates, following a warning from Bank of England governor Mervyn King. Mr King said the "nice decade" of low and stable borrowing costs was coming to an end. He signalled that the bank's Monetary Policy Committee was likely to start raising interest rates before the end of the year and keep on for the next decade. Fiat -- Sharefin, 02:13:07 10/29/03 Wed US interest rates 'to rise soon' AMERICAN interest rates are set to rise over the next few months, one of President Bush's most senior officials told The Times this weekend. However, far from being a dampener on the economy, John Snow, the US Treasury Secretary, said that Washington would welcome such a move because it would underline the strength of the country's growth prospects. Given the American economy's new-found strength, Mr Snow said he would be “frustrated and concerned” if there were not some upward movement in rates. Expectations of tighter US monetary policy began to take hold on Wall Street last week after speeches from two senior Federal Reserve officials, which drew attention to the exceptionally wide gap between today's low interest rates and the US economy's booming growth rate. However, Mr Snow's comments, in an exclusive interview with The Times, offer the clearest sign so far that the US interest rate cycle is turning. Gold -- Sharefin, 01:31:21 10/29/03 Wed Bullion in your portfolio is a golden idea WHEN the London-based World Gold Council came to Australia last week to promote gold, right alongside them was the remarkable Australian company Gold Bullion Ltd. Gold Bullion is the world's first listed security that in effect represents an investment in gold - each Gold Bullion stock represents one-tenth of an ounce of gold. Australia is the only place where you can buy your gold this way. The arbitrageurs make sure that the stock is pegged to the gold price because they can call on additional stock or redeem stock with the company. Bigger buyers go direct to Gold Bullion, which issues additional listed stock. So far Gold Bullion has $110 million in stock backed by around 6.5 tonnes of gold - a remarkable effort in not much more than six months. But Australians, Americans and Europeans are not big buyers of gold - which is why the World Gold Council is here. They want to change that and become less reliant on demand from the Middle East, India, China and other parts of Asia. Gold -- Sharefin, 01:27:43 10/29/03 Wed X does not mark any gold spot Papua New Guinea - Wild rumours sweeping this near bankrupt Pacific nation of a multibillion dollar stash of World War II gold bullion are wrong, the government said on Wednesday. "There are no gold bullion," said a spokesperson for the Papua New Guinea government on usual condition of anonymity. For weeks, speculation has soared that an estimated $1.5bn stash of gold had been found hidden - supposedly by the country's wartime Japanese occupiers - in a cave in remote New Ireland province. The rumours reached fever pitch earlier this month when the government flew troops and police to the remote island province to search for the rumoured gold. For decades, tales of a massive stash of gold bullion left behind by Admiral Isoroku Yamamoto, the commander in chief of the Japanese navy, have been handed down from generation to generation. But the government spokesperson said its latest investigations had found "that there were no such war surplus materials as gold bullion left behind after World War II." Local landowners reportedly recently told the government there were 1 000 gold bars weighing 12.5kg each in vaults inside a secret mountain cave. They said villagers had attempted to keep the cache a secret, but word leaked out when an elder on his death bed passed the secret to a child who allegedly broke the oath. Last week, journalists chasing the story had tapes confiscated and were ordered to leave the province by police. Fiat -- Sharefin, 01:09:33 10/29/03 Wed Templeton feeling bearish Legendary investor Sir John Templeton is worried about the U.S. economy and stock market. Gary Moore, a Sarasota investment adviser who met with Templeton last week in the Bahamas, says Sir John has never been more bearish. Moore says Templeton is telling investors to avoid U.S. stocks and sell off excess residential real estate. He's also suggesting they buy bonds -- not U.S. bonds, but Australian, New Zealand, and Canadian bonds. The reason for all this, Moore says, is that Sir John, who founded the highly successful Templeton Growth Fund and Templeton World Fund, believes the dollar will lose 40 percent of its value against foreign currencies in the coming months, especially the Japanese Yen and Chinese Yuan. This depreciation will cause the Chinese and Japanese, who own 36 percent of all U.S. foreign debt, to sell their bonds and mortgage obligations and take their money out of the country. When that happens, market forces will cause interest rates to rise, choking off investment in residential real estate and forcing the construction industry to contract. Stagflation, a combination of economic stagnation and inflation, will then set in, Moore said. U.S. manufacturers will face higher costs of production, but they won't be able to pass on price increases due to continued competition from lower- cost manufacturers in China and India. Profit margins for U.S. corporations will be squeezed and stock values will suffer. Fiat -- Sharefin, 01:07:13 10/29/03 Wed Bush says will raise currency issue at APEC President George W. Bush said on Tuesday that he would use his trip to Asia to press China and Japan to stop trying to weaken their currencies, which American manufacturers say are hurting their exports. Bush, in an interview with Asian journalists, made clear his preference for less intervention by Japanese authorities to weaken the yen against the dollar, saying: "Markets ought to be determining respective currencies." But, at the same time, he restated the U.S. policy of wanting a strong dollar -- a policy many investors see as hollow given the administration's tolerance of the dollar's slide, most recently to three-year lows against the yen. "I'll remind them (Chinese and Japanese leaders) that this nation has a strong dollar policy, and we expect the markets to reflect the true value of currency," Bush said. Gold -- Sharefin, 01:04:30 10/29/03 Wed Bundesbank's capping plan boosts European gold price GOLD rose in European trading after a report that sales by Germany's central bank would be capped at 600 tonnes within five years. Germany, with the second biggest gold reserves after the US, is negotiating limits for gold disposals between 2004 and 2009 as part of a global sales agreement. Traders were heartened by reports that the Bundesbank was considering selling between 400 and 600 tonnes, less than many had feared. At the end of last month the Bundesbank had 3,439.5 tonnes in its vaults, according to the World Gold Council. Gold -- Sharefin, 01:00:59 10/29/03 Wed Buba eyes 400-600 tonne gold sale in new pact-paper The Bundesbank is considering selling 400 to 600 tonnes of gold between late next year and 2009 as part of a new gold agreement, Germany's Boersen Zeitung newspaper reported on Monday. The paper, citing "informed financial circles," said any sale would take account of market conditions. As a precondition, current law would need to be changed to allow proceeds from any sales to be invested in interest-bearing securities, the paper said in an article released in advance of publication on Tuesday. ~~~ Dutch central bank governor Nout Wellink said last month central bankers had briefly discussed gold sales on the margins of a meeting of world financial officials in Dubai in September and that they were unlikely to fundamentally change their approach to sales in any new agreement next year. The Boersen Zeitung said the Bundesbank was looking at options for managing the proceeds from any future gold sales, which could bring in over four billion euros given a favourable gold price. "Nothing has been decided by the Board," the paper quoted Welteke as saying. It said one of Welteke's preferences would be to use the gold sales to fund education and research. Welteke has already said that proceeds from gold sales cannot be used to finance government deficits. The Bundesbank is understood to hold around 3,500 tonnes of gold. Fiat -- Sharefin, 00:58:47 10/29/03 Wed Russia to price oil in euros in snub to US Russia is to start pricing its huge oil and gas exports in euros instead of dollars as part of a stragetic shift to forge closer ties with the European Union. The Russian central bank has been amassing euros since early 2002, increasing the euro share of its $65 billion (£40 billion) foreign reserves from 10pc to more than 25pc, according to the finance ministry. The move has set off a chain reaction in the private sector, leading to a fourfold increase in euro deposits in Russian banks this year and sending Russian citizens scrambling to change their stashes of greenbacks into euro notes. German officials said Chancellor Gerhard Schroder secured agreement for the change-over on oil pricing from Vladimir Putin, the prime minister, while on a trip to Russia this week. The two leaders have forged a close personal bond and are both keen to check American economic and diplomatic power. A switch to euro invoicing would not affect the long-term price of oil but it could encourage Middle Eastern exporters to follow suit and have a powerful effect on market psychology at a time when the dollar is already under intense pressure. Russia boasts the world's biggest natural gas reserves and is the number two oil exporter after Saudi Arabia. Yesterday the dollar recovered slightly against the yen and euro, but the IMF and the European Central Bank both warn that America's ballooning current account deficit, now over 5pc of GDP, will lead to further declines. Oil is seen as so central to the global power structure that the choice of currency used for pricing has acquired almost totemic significance. The switch from pounds to dollars after the Second World War has come to symbolise sterling's demise as a world reserve currency. Gold -- Sharefin, 00:33:22 10/29/03 Wed Gold still primed for $400/oz Gold could soar over $400/oz in the next two months as the fundamental view of the dollar as a haven for global investors changes and the market moves to the safety of gold. Despite the metal's lacklustre performance over the last week, Absa economist Chris Hart said gold's strength - and the weakness of the dollar and stock markets – were symptomatic of the stress in global financial markets. This stress, Hart said, would push investors away from the dollar and into gold as thinking on the strength of the dollar changed. He added that the total size of the gold market is so small relative to those of currencies that a small move into the market could easily drive gold over the $400/oz level before the end of the year. “The dollar is on the first leg of a multi–year bear trend, and the mirror image is in gold, which is in a multi-year bull trend,” he said. Gold -- Sharefin, 23:43:43 10/28/03 Tue The Gold Price Attempts at predicting the future invariably lead to embarrassment; so why would I even bother trying to figure out what the gold price is likely to do? Because, contrary to popular belief, the market is not efficient. What's more, the market acts like a manic-depressive, and the greatest opportunities occur when the market is either manic, as with Internet stocks a few years back when Doug was shorting them, or depressive, as the gold market is right now. I believe a historic rise in the gold price has already commenced, but it's not too late to get positioned, as the best is yet to come. Here's why. Using only first principles (as opposed to witchcraft, conspiracy theories and evil cartels) it is possible to explain why the gold price averaged $378 an ounce for thirteen years from 1984 to 1996; why the gold price declined from 1996 to 2001; and why the gold price spiked from 1979 to 1980 - but crashed again from 1980 to 1982. Based on the same principles, you will see why the gold price is going to at least double in the next few years, and possibly triple within five. It might surprise you to see how simple the methodology really is. But then, most complex problems can be broken up into simple, easy to understand components. It is most often those who don't understand what they are talking about that resort to complex theories that don't make sense or unquantifiable forces such as conspiracies. My intention is not to bore you into a comatose state with mundane history but it is really important that we synchronize our thoughts. Let's start at the Gold Standard, since we know what an ounce of gold was worth then, and continue to why it is trading for $325 an ounce today, and why I think it will be over $700 an ounce in the near future. Gold -- Sharefin, 23:09:54 10/28/03 Tue How to US $800-million in 10 years Gold inched US$3.50 an ounce higher on the week to US$373.05 and analysts are still calling for it to rise above US$400 next year. CIBC World Markets analyst Barry Cooper, for instance, believes it will average US$415 an ounce next year. For gold stocks, this means they could trade in a new environment. Typically, gold companies have traded more upon the price of gold and their net asset value, rather than actual earnings power of the companies. As Mr. Cooper calculates, the top 10 gold producers over the past 10 years have actually lost US$830-million over the last 10 years, even while mining 85 million ounces of gold. The biggest problem is that the big mining companies often buy assets at inflated values, only to have to write them down later. Taking away extraordinary items such as writedowns, gold companies have earned US$6.8-billion in profits. As the gold price moves higher, investors will problem start to pay more attention to earnings at individual companies. In this environment, Mr. Cooper favours Newmont Mining Corp. "We estimate that Newmont's 2004 earnings per share will exceed that of the next two largest North American gold producers plus Goldcorp combined." Fiat -- Sharefin, 23:07:04 10/28/03 Tue Carry trade unwinding risks 1998-style dollar fall A potential investor exodus from option-related yen carry trades is threatening to trigger a 1998-style precipitous drop in the dollar with currency options prices already showing unprecedented demand for yen upside. In carry trades, investors borrow yen at low cost to buy higher-yielding assets abroad. A lot of traditional yen carry trades have already been closed out as U.S.-Japan interest rate differentials narrowed and the trades became less profitable. ~~~ These leveraged trades use long-dated options beyond 20 years. Because these long-term options markets are highly illiquid, signs of panic are already emerging in options prices and hedging the positions could ultimately result in selling dollars in the spot market. "As spot dollar/yen falls, the market is looking for protection in long-dated options and is willing to pay a very high price. But the long-dated market is not liquid. So once dollar/yen starts to fall people are having to hedge in a thin and panicked market," said Giovanni Pillitteri, vice president on the options trading desk at Deutsche Bank. "They will move down the line (from long-end to short-end) and ultimately they will be forced to sell dollar/yen to hedge." Major unwinding of traditional yen carry positions in the aftermath of the 1998 Russian default and the collapse of hedge fund Long Term Capital Management shaved a quarter off the dollar's value in just four months. ~~~ Risk reversals, a widely used indicator in the options market which gauges investor sentiment towards a specific currency, are showing a record skew towards the yen's upside, beyond levels seen in the 1998 crisis. Gold -- Sharefin, 23:03:42 10/28/03 Tue Mbeki slams gold firms for retrenchment threats President Thabo Mbeki criticised South Africa's gold-mining companies on Friday for threatening to cut jobs in response to the strong rand, saying they were benefiting from higher dollar-based gold prices. Gold producer Durban RoodepOort Deep has so far been the only firm to retrench workers, but Harmony Gold said on Wednesday it would follow suit, while other miners have warned the currency's gains are eroding profits. Mbeki noted in a weekly on-line newsletter that gold prices were nearly $100 higher at $370/oz than in 2000. "With this gap between costs and gross revenues, in dollar terms, the gold-mining companies will have to explain more clearly and convincingly why the stronger rand obliges them to retrench workers," he said. "In this situation it is quite possible that the issue of the strengthening of the rand is being used to hide other problems that have arisen because of bad management," he said. Gold -- Sharefin, 23:01:34 10/28/03 Tue Call To Free Gold Exports For Boosting Bullion Market Now that we have strong foreign exchange reserves position we need to be proactive on the country's bullion front and remove existing anomalies in the gold and silver trade that impede India from taking advantage of the current trends in the global bullion market, said Bhargava Vaidya of BN Vaidya & Associates. India is the largest consumer in the bullion market and a stronger Indian bullion market and trade can only be possible if the Reserve Bank of India (RBI) gives necessary support to the banks who are the main financiers to the bullion trade, he said adding banks too should become proactive towards gold and reconsider their skepticism towards lending against gold, he added. ~~~ Now that bullion futures is allowed, India has good scope for regularising spot gold market, Mr Vaidya said. “There is no place or exchange in the world where one can have spot trading in gold and India can take advantage of this absence and develop a strong, reliable spot gold market. With the commencement of trading in bullion futures earlier this month on the Ahmedabad-based National Multi Commodity Exchange (NMCE) of India Ltd, India joined the ranks of bullion exchanges in Tokyo (Japan), Istanbul, Shanghai (China), New York (USA) and of course the London's London Bullion Merchants Association (LBMA), which of course is primarily an over-the-counter market but is the key place to determine the global bullion prices. Soon there are to be three more such commodity exchanges which too will offer trading in futures of bullion along with other commodities. “It is my cherished dream that instead of the LBMA fix, the world wakes up to take note of Mumbai bullion fix”, Mr Vaidya said adding, this is important as India is the largest consumer of gold and silver. Periodic Ponzi Update PPU -- $hifty, 21:58:48 10/26/03 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,865.59 + Dow 9,582.46 = 11,448.05 divide by 2 = 5,724.025 Ponzi Down 93.05 from last week . Thanks for the link RossL ! Go GATA ! Go GOLD ! Go Comets! $hifty  Sinclair Hints @ Gold Bombshell -- auspec, 20:33:22 10/22/03 Wed Sinclair Hints @ Powerful Gold Currents -- auspec, 20:31:25 10/22/03 Wed From http://www.jsmineset.com fair use as education Accumulation leads to mark-up in all markets. The Asian/Islamic accumulation spanned 1996 to the present. The mark-up phase has begun. This is the Big One! Yes, after mark-up comes distribution but this time it might NOT be into any market. Remember what I just told you because this is all I can reveal at this time. As most of you already know, this phase is not dependent upon the state of the US dollar even though the onset of a serious bearish reaction to the long equity rally and the dollar weakness has put some added fire under this up move. Gold's rise has nothing to do with the old gang in the Gold Community. And in fact there is really nothing the Gold Cartel or the Exchange Stabilization Fund (ESF) can do to outsize the underlying demand for gold that has the $430 level clearly in its sights. I may have to visit Asia in November but if I do please understand it's in your best interest. There is a reason behind the timing of this move in gold that will escape most Western observers. It is a hard one for me to explain because I'm walking on egg shells on this issue. You may notice that there is a complete media blackout - except for a small quotation that fits Western PR interests - on the recently authenticated Osama bin Laden tape released by the Qatar-based satellite station Al-Jazeera, the Arab version of CNN. The reason why gold is rising and the dollar is falling into new low territory is contained in that tape. That again is all I can really say as an American in light of our new constitution, Patriot 2. All the Gold Community needs to do to support gold is absolutely nothing. Sales into strength never hurt a situation including gold. Isn't it crystal clear now that you buy anything gold on weakness TA correct and you sell anything gold TA correct? By doing that, you will simply build profit after profit! END Question: What's in the tape? I can only guess. Accumulation is over for those that intend to use gold as an economic weapon/empowerment.......time to spring the trap shut? Anyone seen the tape or have a link? Why would he go to Asia w our interests at heart? Keeping gold free? There are some powerful words above listed by JS........he's a man of great means, experience & connections. I don't think he's BSing, something really big is up. Tis not the "old gang" but apparently new players...........? How does distribution take place but "NOT be into any market"? Distributed amongst some particular players? Anyone up for parsing these JS statements? We could be real close here to a breakaway move & serious fireworks. Absolutely astounding, even though I did say I wouldn't be surprised, that gold bounced back so readily after the Oct 3rd bashing. ANOTHER guess..............Oil being priced out of dollars, maybe even into gold? Would that be a earth shaker? COT faithful about to be scorched? We're talking bombshell here, no? The article later mentions a $150 loss for the gold shorts, which is $100 more than they currently hold. Hang on........this could get real interesting, and do so QUICKLY. Periodic Ponzi Update PPU -- $hifty, 23:37:46 10/19/03 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,912.36 + Dow 9,721.79 = 11,634.15 divide by 2 = 5,817.075 Ponzi Up 22.085 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Go Comets ! $hifty Gold -- Sharefin, 03:59:38 10/18/03 Sat SA Gold Industry Underwater The South African gold industry, once the paragon of profitability, has been pushed into the red by a step change in costs and a stubbornly low rand gold price, the unhappy by-product of a strong currency. According to the latest statistics compiled by the Chamber of Mines, an industry group, the average year-to-date costs of the local gold mining industry are R86,741/kg.The cash earned for each kilogram runs perilously close to average R86,770/kg that mines have had to shell out to extract the gold. Comparisons with the South African gold industry of three years ago, when the industry was facing wholesale retrenchments and mine closures, are inevitable. The rand price received for gold in 2000 was R63,214/kg, fractionally below the industry's average production cost of R63,575/kg. The gold sector shed 18,000 jobs that year. This year collateral damage could be worse as the current malaise, caused by the rand and not a single commodity price, threatens the entire mining sector. Three years later, with gold having ascended to $375/oz, the South African press is awash with commentators baying for the blood of mining executives who have allegedly allowed their companies to become unproductive and inefficient, with costs rising unchecked. ~~~ The upshot of the unchecked rise in the cost of inputs is that an appreciable part of the South African gold industry will now have to shed jobs not only to stay profitable but also to stay in business. Roger Baxter, chief economist at the Chamber of Mines, says 70,000 gold miners work on unprofitable shafts. In the broader mining industry, the number of workers on loss-making or breakeven operations climbs to 120,000. Baxter says that although not all those jobs will be lost, mining companies will have to shed some of those jobs to bring the operations back to profitability. But it is not only jobs that will be cut. Baxter says the mining industry alone has R100 billion in capital projects approved and warns that a tenth of these will be put on hold if the status quo persists. Add to that the R20 billion in foreign exchange revenue that will be lost this year alone as the value of mineral exports plummets, and the potential for ballooning trade and current account deficits increases dramatically. The solution? Baxter says Chamber is dead against any effort to peg the exchange rate, or any notion of tampering with the independence of the South African Reserve Bank. He says the Reserve Bank could, however, take advantage of the strong rand to bulk up the country's foreign exchange reserves - currency or bullion. Gold -- Sharefin, 03:56:05 10/18/03 Sat Nugget rumours spark gold fever RUMOURS that the world's third-largest gold nugget has been found in Dunolly's sewerage system have spread through Victoria's goldfields like wildfire. Several prospectors have told of a 500-ounce specimen -- worth an estimated $370,000 -- being uncovered last week during excavation works for the tiny town's sewerage system. Dunolly is smack in the middle of Victoria's golden triangle, said to be the world's richest deposit of alluvial gold. If reports of the find are true, it would be the third largest intact piece behind the 845-ounce Hand of Faith, found 25km away at Kingower in 1980, and Western Australia's 819-ounce Normandy Nugget, found in the 1990s. The Welcome Stranger, the world's largest nugget at 2316 troy ounces before it was cut up, was also found outside Dunolly at Moliagul in 1869. Gold -- Sharefin, 21:44:27 10/17/03 Fri Three Fridays - three bear attacks - two worked - this one was an abysmal failure. This cause & effect reminds me of the German minister who was trotted out regularly whenever they needed to quell the POG & he issued bearish statements - "Germany To Sell All It's Gold". It worked once, twice, thrice but now no more. Yet again we see the markets changing it's beat. Gold -- Sharefin, 21:31:17 10/17/03 Fri   Gold -- Sharefin, 10:04:58 10/17/03 Fri American Stock Exchange to Trade Options on the Amex Gold BUGS Index The American Stock Exchange® (Amex®) will launch trading in a new cash settled index option on Friday, October 17, 2003. Trading will commence in put and call options on The Amex Gold BUGS Index under the ticker symbol HUI. The specialist will be Bowery Specialist Group, LLC. The Amex Gold BUGS Index options will open with strike prices of 190 - 195 - 200 - 205 - 210. The Amex Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years. The HUI Index was developed was a base value of 200.00 as of March 15, 1996. Adjustments are made quarterly after the close of trading on the third Friday of March, June, September & December so that each component stock represents its assigned weight in the index. Gold -- Sharefin, 10:01:12 10/17/03 Fri American Stock Exchange to Trade Options on the Amex Gold BUGS Index The American Stock Exchange® (Amex®) will launch trading in a new cash settled index option on Friday, October 17, 2003. Trading will commence in put and call options on The Amex Gold BUGS Index under the ticker symbol HUI. The specialist will be Bowery Specialist Group, LLC. The Amex Gold BUGS Index options will open with strike prices of 190 - 195 - 200 - 205 - 210. The Amex Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years. The HUI Index was developed was a base value of 200.00 as of March 15, 1996. Adjustments are made quarterly after the close of trading on the third Friday of March, June, September & December so that each component stock represents its assigned weight in the index. Gold -- Sharefin, 07:54:28 10/17/03 Fri Malaysia pushes for creation of Islamic ``gold dinar'' to replace U.S. dollar in international trade Malaysian Prime Minister Mahathir Mohamad proposed on Wednesday that Islamic nations adopt a new currency, the gold dinar, that would replace the U.S. dollar in international trade. The Malaysian leader has frequently proposed the idea and received noncommittal, polite response, but never to a bigger audience than Wednesday - business leaders and officials here for the 57-nation Organization of the Islamic Conference summit, which he is hosting before his retirement Oct. 31. "We propose the use of the gold dinar because we believe that paper money has no intrinsic value," Mahathir said in a speech. "Gold has some value ... it cannot be depreciated too much." Mahathir said the gold dinar would not exist in physical form and would not be a national currency, but would only serve as a unit for accounting and settlement of bilateral payments between Islamic nations. "We propose the use of the gold dinar instead of the U.S. dollar as an international currency used in trade," said Mahathir, who was speaking at a business forum a day before the summit formally starts. Gold -- Sharefin, 07:52:32 10/17/03 Fri ANALYST SEES GOLD AT US$415 BY END OF '04 There were many bullish predictions about the future price of gold at the Nikkei Gold Conference held here on Wednesday. Martin Murenbeeld, a Canadian analyst, painted the rosiest scenario, saying that the price of gold will average US$404 per troy ounce and will rise to US$415 by the end of next year. He says the U.S. will be forced to adopt reflationary measures, such as lower interest rates and the devaluation of its currency. Paul Walker of Gold Fields Mineral Services Ltd. predicted that the price of gold will hover at 355-US$395 through the second half of this year, and said that it is highly likely that it will continue to trend upward over the medium to long term. Albert Cheng, the World Gold Council director responsible for the Far East, predicted that Chinese demand for gold will grow 20 per cent over the next three years, accompanying the country's economic growth. The conference was organized by Nihon Keizai Shimbun, Inc. and sponsored by the World Gold Council. Gold -- Sharefin, 02:20:59 10/17/03 Fri Re: China to dump U.S.-dollar reserves for Gold I read your article with keen interest. From it one must almost inevitably draw the conclusion that China is quietly and unofficially beginning to remonetize gold by encouraging its citizens to exchange such a large amount of their paper yuan for it. Imagine that Americans converted 10-30% of their paper currency-denominated assets into gold [rather than into inflated housing] as a means of preserving and passing on their accumulated wealth. The effect would necessarily reflect a deep alteration in the national perception of gold to see it once again as money, as a medium of exchange, and not just an 'investment' vehicle or collectible commodity. While this would represent a major shift in thinking here, where the concept of 'money' is too widely limited to a 'dollar', all the Chinese people seem to need is permission from their government to once again acquire and use 'money' in the form they have never really ceased believing in - gold. While the removal of gold as currency from the hands of U.S. citizens over a 40 year period since 1993 to the mid-70's seemed to have had the effect of creating a national amnesia about its use as money, the Chinese haven't forgotten and your article suggests they are about to once again use their long memories to put it to use that way again. That Xi Jianhua, the Bank of China's gold business expert [and by virtue of his position a government official], can be quoted as saying it would be "safe and feasible" for China to swap some foreign exchange [paper] reserves for gold, is in itself an interesting development and makes one wonder about the definitions the Chinese use to qualify something as either 'safe' or 'feasible' in the context of international trade, but he is also implicitly saying that the government is encouraging Chinese citizens to purchase up to nearly 5 times as much gold as the government itself has on reserve (36bn/7.3bn = 4.93), an amount also equal to roughly 1/10 of the amount the Chinese hold in foreign currencies. Since the Chinese people are savers and the clear intention here is to reduce the amount of paper yuan in circulation, any conversion of their holdings on this scale out of a paper currency into physical metal can only be seen as a form of quiet monetization. I've often wondered what would happen if China did, in fact, or in effect back its currency with gold... would not investors across the planet take advantage of that to move capital in their direction? "Xi said the purpose of purchasing gold would be equivalent to the Fed's market window, allowing China's central bank to take yuan out of circulation, reduce the surplus on the current account and diversify foreign exchange holdings, all with an eye on reducing calls for the yuan to appreciate." comment: China doesn't need to reduce its current account. It could halve the number of yuan in circulation (by converting to another form of currency as this proposes, or by doubling the national average wage) and still have a huge trade surplus with the U.S. and Canada. It's current concern needs to be the effect such a move would have on its trading partners in the West, but at what point of internal development and after how much industrialization on its own does the government of China disregard the consequences an alteration in currency will have in the United States or elsewhere? "At a Denver Gold Forum luncheon devoted to gold investment issues, Pierre Lassonde, president of Newmont, said Chinese gold demand could only grow with deregulation. “Current consumption is 0.2 grams per person per year. In India it is over 0.7 grams and grew from a level similar to the Chinese 11 years ago. Indian gold market deregulation grew demand from 200 to 900 tonnes, although it has slipped to 600 tonnes now,” he said. “Imagine if China grows from 0.2 to 0.7 grams of gold per person? It will be the largest gold market in the world. It will happen, I can see it.” comment: Let's consider the number of people and their intended uses for gold in this scenario. India's is the second largest national population on earth. They consume much of their gold for jewelry purposes and also use it for the preservation of value over time, a prime function of money that has been debased by all the world's various paper currencies over the past century, yet their population size pales by comparison to China's, where jewelry is of less consideration and an exchange of gold for paper currency more the issue being discussed by government officials. The implications for the global gold market are immense! Gold -- Sharefin, 02:18:32 10/17/03 Fri China to dump U.S.-dollar reserves for Gold? NEW YORK -- The Hong Kong edition of Friday's China Daily will be celebrated in gold bug circles after the Bank of China's bullion guru said local consumers could pour $36 billion into the metal, equivalent to around 2,950 tonnes, or more than one year of supply, at current prices. Xi Jianhua, the Bank of China's gold business expert, is also quoted saying that it would be "safe and feasible" for China swap to some foreign exchange reserves for gold. The country has a little over 600 tonnes of gold in reserve now ($7.3-bn), and $360 billion in foreign exchange. Xi also wants rapid deregulation of the retail gold market, the cornerstone of which is the Shanghai Gold Exchange. China currently consumes about 200 tonnes of gold a year, much of it met from local production... Apparently, a recent national survey show that one fifth of respondents claimed to be willing to divert 10 to 30 per cent of their savings to gold. Consequently, Xi believes that private funds amounting to 300 billion yuan could be buying gold, in addition to what the Chinese Central Bank would buy. The Central Bank purchase suggestion is especially bullish as uncertainty grows about the intentions of Washington Agreement banks regarding the renewal of their controlled gold sales. Initial private demand in China is expected to be more modest at between 300-500 tonnes, but that would be a large fillip on top of expected demand for the World Gold Council's globally traded gold funds. Gold producers that have recently conducted investor road shows in North America report that hedge funds are especially interested in the imminent ETFs. Xi said the purpose of purchasing gold would be equivalent to the Fed's market window, allowing China's central bank to take yuan out of circulation, reduce the surplus on the current account and diversify foreign exchange holdings, all with an eye on reducing calls for the yuan to appreciate. At a Denver Gold Forum luncheon devoted to gold investment issues, Pierre Lassonde, president of Newmont, said Chinese gold demand could only grow with deregulation. "Current consumption is 0.2 grams per person per year. In India it is over 0.7 grams and grew from a level similar to the Chinese 11 years ago. Indian gold market deregulation grew demand from 200 to 900 tonnes, although it has slipped to 600 tonnes now," he said. "Imagine if China grows from 0.2 to 0.7 grams of gold per person? It will be the largest gold market in the world. It will happen, I can see it." Gold -- Sharefin, 02:08:01 10/17/03 Fri Don't count on declining gold production It has been taken for granted that the current contraction in new mine gold production will continue and even accelerate. That seems unlikely in the current environment. The declinist view has been rationalised from the drought in exploration expenditure following the Bre-X scandal, high grading of mines to keep them afloat during low gold prices, old mines coming to the end of their lives, and, latterly, fears that sustained rand strength could put millions of South African ounces at risk. Declinism was far from the agenda at the recent Denver Gold Forum though. Company after company presentation detailed medium- and long-term growth prospects. Whilst it is true that there were no new deposits to speak of, the higher gold price has breathed life into tens of projects once left to gather dust. ---- This article is penned by a good friend of Andy Smith's. Painting a picture with a tainted brush. Gold -- Sharefin, 06:57:17 10/15/03 Wed Financial Reckoning Day: Surviving the Soft Depression of the 21st Century On behalf of the morally concerned majority, I would like to warn you that Financial Reckoning Day is a very dangerous read, especially to those unwilling to face hard, financial truths of the 21st century head on. The authors skillfully paint a very different big picture of America's present economic problems -- as well as key solutions. They expose a much more precarious economic future, than most Americans have ever been told (or at least been willing to listen to). You are not likely to uncover the wisdom distilled in this book in the mass media, but Truth has a way of passing the test of time and it's getting harder to ignore the logic behind owning physical gold and shunning debt. The authors have mastered the art of finding humor and entertainment while tearing the veil off of the commonly held deceptions of our age. These metaphors help the reader achieve an increased knowledge, wisdom and discernment -- at just the moment NYT says investors are… “most confused.” A CLEAR CALL TO ACTION Their clarion call is to restore morality back into our financial world, replacing fiat money system with the real thing: gold. (If not nationally, at least personally). Their reason is flawless, reminiscent of a book that changed millions of people's minds back in the late 1960s about morality … Evidence That Demands A Verdict, written by Josh McDowell. The Daily Reckoning (DR) team is very humble, never demanding justice, but warning readers that it always comes …or at least it “ought to!” come. DR cuts through history like a hot knife, stopping briefly to identify mass movements, crowd psychology, demography, progress, Greenspan's destiny, the deleveraging of America and the moral hazards we have allowed to derail our future. Without passing moral judgment upon their readers, the DR team has done what they do best…cause the reader to think about the which moral foundation -- that undergirds the economy, our money system, our markets are presently built upon. High hopes of sustainable stock market rallies and economic recovery are part of a “Grand Illusion.” – that is, to honestly believe that all of the market excesses of the 20th century are fully accounted for by a phony recession” and now “phony recovery” could only be achieved in an “Era of Crowds” such as we have seen during the last 50 years. Wall Street looks in the mirror daily and sees a beauty one day...a beast the next. The authors, paint a much bigger picture of America, Europe and Japan's recent fiascos in a valient effort to alert the reader of yet another debaucle - of even greater consequence – that will likely not unfold until at least 2017. A WORD FITLY SPOKEN This book, like the asset of the 21st century [GOLD] itself, is a financial word fitly spoken...allowing the reader to rethink their strategy using new clues provided by the DR team. For example, they explain why on the first day of each decade there are ample clues as to which investment will perform best. In the 70s, the "Trade of the Decade" was gold...in the 80s it was the Nikkei...in the 90s it was the Dow...in 2000 it is gold again. Fiat vs Gold -- Sharefin, 06:48:54 10/15/03 Wed The South Sea Bubble and Law's Mississippi Scheme "...History reveals a financial system based on paper money depends almost entirely on the confidence of the public in the currency that is issued by the monetary authorities, and that once confidence in a currency is badly shaken, painful consequences are inevitable. The reader should ask himself the question: for how much longer will foreign investors, which are financing the US trade and current account deficit, be willing buyers and holders of American stocks, bonds, and the dollar? Surely, there will be a time when, as was the case at the time of the Mississippi Scheme and the South Sea Bubble, the present 'chain letter' type of fiat money operation practised by the US Federal Reserve Board will no longer work and lead to a sharp depreciation of the US dollar..." ~~~ Law suddenly realised that his main problem was no longer his battle against gold, which he had sought to debase (as today's central bankers are trying to do); his real enemy was inflation. He issued an edict by which banknotes and the shares of the Mississippi stock would gradually be devalued by 50%. As one can imagine, the public reacted to this edict with fury, and Law was soon after asked to leave the country. In the meantime, gold was again accepted as the basis of the currency, and individuals could own as much of it as they desired. Alas, as a contemporary noted, the permission came when no one had any gold left. Gold -- Sharefin, 06:17:28 10/15/03 Wed Ignore the Old News; Focus on the New News There is a lot of old news in the following bulletin from Germany today: FRANKFURT, Oct 13 (Reuters) - The Bundesbank is considering selling 400 to 600 tonnes of gold between late next year and 2009 as part of a new gold agreement, Germany's Boersen Zeitung newspaper reported on Monday. There's nothing new here except the following tidbit from the release: It said one of Welteke's preferences would be to use the gold sales to fund education and research. ~~~~ There is a lot of old news in the following bulletin from Germany today: FRANKFURT, Oct 13 (Reuters) - The Bundesbank is considering selling 400 to 600 tonnes of gold between late next year and 2009 as part of a new gold agreement, Germany's Boersen Zeitung newspaper reported on Monday. There's nothing new here except the following tidbit from the release: It said one of Welteke's preferences would be to use the gold sales to fund education and research. Gold -- Sharefin, 06:13:10 10/15/03 Wed A Study On The Benefits Of Gold Equities  Gold -- Sharefin, 06:08:14 10/15/03 Wed Barrick Takes Baby Steps Into Russian Gold Barrick Gold Corp.'s planned $159 million investment in a Russian gold miner does not signal the start of a rush into other gold ventures in the region, the Canadian producer said on Tuesday. But the intended purchase of a 29 percent stake in Highland Gold Mining Ltd. does provide a good vantage point to watch developments in an increasingly investment-friendly area, the company said. And, with Barrick a Russian newcomer, it is a low-risk vehicle, the world's No. 3 gold producer said. "The primary driver here is: let's get a window of opportunity to see what else is there," said Vince Borg, a spokesman for Toronto-based Barrick. Gold -- Sharefin, 06:03:19 10/15/03 Wed Hard money Money used to be backed by gold. Now it is backed by the promises of central bankers. Are these worth less than they were? IN BETWEEN saving the world from terrorism, President George Bush is finding time to dash off to Asia at the end of this week, first to Tokyo and then to Bangkok, where he will attend a meeting of the clumsily named Asia-Pacific Economic Co-operation, which sounds a little better as its acronym. There he will meet, among others, Hu Jintao, the president of the country American manufacturers most love to hate when they are not investing there. It is a racing certainty that the subject of China's currency, the yuan, and whether it should be revalued from its present 8.3 per dollar, will be high on the agenda, if not atop it. It is, of course, always lovely to talk, but although America wants a lower dollar, and wants one now (which is understandable for a country with a current- account deficit of 5% of GDP and a congenital inability to save), China couldn't seem to care less. Quite probably, then, tension will increase and the dollar will fall against other currencies that do not have such a firm peg. The rapidity of this fall will depend on two things. The first is the force with which Washington rattles its sabre. On this subject, Buttonwood merely notes that next year is election year. The second is whether other countries, especially those in Asia which together hold $1.7 trillion of IOUs issued by the American government, are prepared to see the Treasuries in their portfolios rapidly devalued, their export competitiveness choked and deflationary pressures intensified. Japan has such worries in spades. Though the world's second-biggest economy nowadays receives less attention than it did, Japan's recovery started in the fourth quarter of 2001 and growth is picking up. But officials there are increasingly worried that a rising yen will choke it off. The yen is close to a three-year high against the greenback. Its rise accelerated after the recent G7 summit in Dubai, when America's weak-dollar policy became most obvious. Yet Japan needs the yen to fall because it needs inflation to help wipe out the massive debts the country incurred both during the bubble and in trying to get the economy going again after it had popped. Last week, the Bank of Japan further eased monetary policy, not in the usual way, by lowering the rate of interest, but by printing more money. The money supply, narrowly measured, is already rising at an annual rate of 21%. At some point, perhaps even the European Central Bank will wake up to the fact that the rising euro will keep the European economy close to recession. All of which is to suggest that none of the world's major currencies is especially alluring; for one reason or another governments in all three might want them to fall. Of course, they cannot all fall against each other. They can, however, fall against something largely unloved by those under the age of 50, and famously dismissed by Keynes as a "barbarous relic": gold. All currencies are backed by something. When the world was on the gold standard, that something was the yellow metal: the value of each pound sterling, dollar or French franc was determined by the (fixed) amount of gold that the central bank agreed to deliver against it. Now those currencies are backed by something altogether less tangible: central bankers' promises that the currencies will maintain their value. Quite probably, these promises are not worth as much as they were. ~~~~ Gold -- Sharefin, 05:37:35 10/15/03 Wed Gold eases in Europe, gathering strength for rally LONDON, Oct 14 (Reuters) - Gold eased slightly in Europe on Tuesday morning, as a stronger dollar weighed on the metal, but dealers said the market was in good shape to move higher and keep its overall up-trend intact. Support was seen coming from a report overnight on potential Bundesbank gold sales under any new central bank pact to limit official disposals. Analysts said figures now being rumoured for the German sales were lower than initially expected. ~~~ Asian players largely ignored a report late on Monday that Germany's Bundesbank was considering selling gold but European dealers said it could prove supportive. Germany's Boersen Zeitung newspaper said the Bundesbank was considering selling 400 to 600 tonnes of gold between late next year and 2009 as part of a new Central Bank Gold Sales Agreement (CBGA). Bundesbank President Ernst Welteke told the paper he could not comment on details of any deal ahead of discussions in the spring among central banks to renew the gold sale agreement. "That the Bundesbank will be a seller of gold is in our eyes not a surprise and the impact of this most recent news should actually be limited," said Alexander Zumpfe of Dresdner Kleinwort Wasserstein in a daily report. "Nevertheless, the rumoured amounts -- being mentioned in the press for the first time -- are below our expectations and could lead to some support," he added. Boersen Zeitung said its sources assumed that a new agreement would increase gold sales by a maximum of 10-15 percent over the current one, which caps total sales at 2,000 tonnes over the five-year life of the agreement, or about 400 tonnes per year. The new pact is expected to be agreed before the current one, known as the Washington accord, expires in 2004. Gold -- Sharefin, 05:34:58 10/15/03 Wed Early COMEX gold softened by Buba sales report The specter of German gold sales pressured COMEX gold early Tuesday, but futures moved up from the lows in defiance of a stronger dollar after bullion bargain hunters continued to take advantage of pullbacks. "The euro is getting crushed and we came in $3 lower. But again you get down to support and they come in and start buying," said a floor broker. ~~~ Gold came under light pressure overnight after German newspaper Boersen Zeitung late Monday cited "informed financial circles" in a report to run Tuesday that the Bundesbank was considering selling 400-600 tonnes of gold between late next year and 2009 as part of a new central bank gold agreement. Germany has the second largest central bank hoard of gold after the United States and has refrained from selling. Current law would need to be changed to allow proceeds from any sales to be invested in interest-bearing securities. Periodic Ponzi Update PPU -- $hifty, 23:25:29 10/12/03 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,915.31 + Dow 9,674.68 = 11,589.99 divide by 2 = 5,794.995 Ponzi Up 68.555 from last week. Thanks for the link RossL! Now where did that fat lady wander off to? Go GATA! Go GOLD! Go Comets! $hifty Gold -- Sharefin, 03:47:41 10/12/03 Sun Gold: new focus of investment More domestic investors are interested in tapping into the gold market, with more than 20 percent of stock investors willing to transfer part of their funds to the gold market, according to a questionnaire of investors in ten Chinese cities, sina.com.cn reported yesterday. Gold has boasted a high profile in China, with over 70 percent of respondents favoring gold, according to the questionnaire. More than 20 percent of investors are ready to transfer part of their funds to the gold market, and 7.5 million stock investors will invest in gold in the near future, said a questionnaire analyst. If each stock investor puts 14,000 to 26,000 yuan (US$1,686 - US$3,132) into the gold market, a total of 100-190 billion yuan is expected to be injected into the gold market, the analyst said. ------- Note:-) 100 billion yuan equals US$12.08 billion which equates to approx 1000 tonnes of gold. Fiat -- Sharefin, 23:37:52 10/07/03 Tue Royalty pilloried, wipes out 20m oz gold JOHANNESBURG – The South African government's proposed royalty to be levied on the country's mining companies in 2008 could render as many as 19.2 million ounces of gold uneconomic to mine. Webber Wentzel Bowens (WWB), one of South Africa's leading law firms, said in a stinging nine-page critique of the proposed new legislation, that the three percent revenue royalty expected to be levied on gold producers, would force mining companies to raise the average cut-off grade of the country's gold industry from 4g/t to 4.2g/t. (The figure was provided by the Chamber of Mines) “This means that the economically recoverable reserve base would have decreased by about 3.7 percent from 16,250 tonnes to about 15,650 tonnes. In other words, some 600 tonnes of gold would have effectively been sterilized by an introduction of a three percent royalty on gross turnover,” said the firm's regulatory law unit, which is headed by mineral law guru and ex-provincial councillor for the Democratic Party, Peter Leon. Fiat -- Sharefin, 23:36:31 10/07/03 Tue Indian villagers to trade gold futures The lifting of a ban on trading in derivatives linked to gold and silver could benefit ordinary people in India, according to financial professionals. More than 40 years after the ban was first introduced, the country is once again allowing trading in gold and silver futures. "The public at large, especially at the village level, have more confidence in gold" [than in other forms of investment], the managing director of New Delhi brokers Geojit Inofin, C. J. George, told BBC World Business Report. Consequently, about 13,000 tonnes of gold is held privately in India. Futures will enable people to invest in gold without having the physical commodity in their home, Mr George said. Mr George also believed the lifting of the ban could make it easier for gold investors to be sure the gold they buy is pure. Only internationally reputed, hallmarked gold bars will be allowed for trading on The National Multi Commodity Exchange of India (NMCEI) - based in the western city of Ahmedabad. ~~~ Make sure you listen to the audio "The public at large, especially at the village level, they have more confidence in gold." ~~~ India is the world's largest consumer of the two metals, consuming 800 tonnes of gold annually, or about a third of the total supply mined in the world, according to NMCEI. So the resumed trading is expected to increase the metal's influence in the international commodity markets. "The demand for gold from India is likely to go up," Mr George said. Fiat -- Sharefin, 23:33:50 10/07/03 Tue Wall Street's Next Nightmare? Flamboyant litigator John O'Quinn is gunning for another bonanza: the entire trading system in penny stocks From his 23rd-floor suite of offices in Houston's Lyric Centre, John M. O'Quinn is plotting what he hopes will be his next multibillion-dollar jackpot. Not that the 62-year-old senior partner of O'Quinn, Laminack & Pirtle needs the dough; FORBES estimates his law firm has won $1.5 billion in fees from the makers of silicon breast implants and cigarettes. This time he's aiming at Wall Street. O'Quinn has a hand in 15 lawsuits alleging that various brokerages (including Ameritrade and E-Trade) and marketmakers like Knight have destroyed his clients by helping to sell the companies' shares short in a scheme to run the stock prices into the ground. The damage is daunting: O'Quinn says 1,000 companies have lost at least $100 billion in market capitalization. "If you short a stock for the sole purpose of killing the value," he says, "that's a threat to the view that we have an honest market." The fuss is over naked shorting, a practice that's been around for decades and that is sometimes legal. Normal short-selling involves borrowing real certificates for stock, selling the stock, buying new shares at a later date, and using the new certificates to replace the ones borrowed. Naked short-selling differs in that no real certificates change hands. Instead, the short-seller creates a paper entry showing that it owes shares to the stock buyer and will get around to delivering them later. Gold -- Sharefin, 23:28:54 10/07/03 Tue Gold and South African Gold Company Commentary After weeks of work to get up to the $380's just about every precious metals trader I talk to confirms that the footprints and timing of price action in recent weeks suggests massive intervention perhaps at G7 central bank level - by those interested in protecting the value of US bonds and the US$. And that is just about everyone except China and the Middle East who have been quietly buying gold for several years while the West has been selling it. The alternatives to a strong US$ are too ghastly to contemplate. Further acceleration in the departure from the US$ with some of the money going to gold, would reduce the status of the US$ and by implication, the status of US Treasury Bonds and Wall Street. A lot is at stake. So when they managed on Friday afternoon to get the $Gold price down from about $384.00 to $366.60 in a matter of an hour, at the same time as the Euro and Japanese Yen and SwF were strengthening -- it was not surprising. The Fed intervention is now being openly talked about in New York. Yet it should be noticed that the typical 2.0 standard deviation upward channel since April's lows is still intact while above $356.40 (Comex GC Dec03). The question is how long and how often the Fed and supporters are going to be able to convince the world that this type of price action is real, not an act of desperation. Notice the similarity with the attempts by the Japanese government to keep the yen weak. The protection attempts at $JY120 and $115 conclusively failed, despite trillions of yen being sold and thrown away. The madness, confidence, fear and knowledge of crowds cannot be beaten by government intervention. Finally, even government intervention is a contributor to the markets and that intervention is itself a marker of confidence and a lack thereof. Gold -- Sharefin, 23:23:17 10/07/03 Tue Summary of Interview - Gold Analyst This is a summary of a video interview of John Ing, of Maison Placements. The interview was on ROBTV [www.robtv.com] on October 6, 2003. _________________________________ 1. The US dollar is the most overvalued currency. The Bush administration has indicated that it is abandoning the strong dollar policy. The dollar could drop 70%. This will be good for gold. 2. Gold companies will do better when the price of gold is at $400 per oz. The $350 to $375 range does not provide enough profit to support exploration. The mining companies are not finding much in the way of new deposits. When gold surpasses $400/oz, the mining companies that found their gold reserves a decade or two ago are going to profit most. 3. Barrick has been a looser recently becuase it still has 16 million oz. sold forward. Newmont has significantly improved its condition and has seen a share price increase because of this. 4. The gold companies such as GG and AEM will benefit because they have not sold forward. 5. He sees gold going to $500 per oz. and more. Inflation problems are likely ahead due to the current guns and butter policy of the US administration. It is a repeat of the economic conditions from Lyndon Johnson's era when gold took off due to similar policies as we are seeing today. 6. He also likes Bema, Miramar, Chrystalex. End of Summary: |
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