 More Dialogue for Mr. Beaty -- auspec, 15:19:46 05/08/04 Sat Subject: Chris Powell & Ed Steer Respond to Mr. Beaty Again paraphrasing from LeMetropole cafe: Chris Powell expresses regret about bad feeling between R. Beaty and GATA supporters. Wants dialogue. Would love permission to distribute RB replies in regards to Ted Butler. Chris makes the point that RB is missing the "collusive behavior" of the commercials in regards to silver. Also points out the deafening silence of the various miners in regards to COMEX games. Chris points out that, with evidence of a tight physical silver market, a miner taking some off the market could make a big difference in the equation. Chris goes on to express his feelings about a "lack of leadership in the mining industry" in regards to collusive behavior as well as a true understanding of precious metals as "money". ************************** Ed Steer's response to Ross Beaty: Ed apparently made RB's e-mail message to him public & offers NO apology for doing so. Ed states how frequently Ted Butler and David morgan have been proven correct. He says 100% but I would take issue w that average. Ted misses here and there, imho, but he's mostly correct. That's another issue altogether. Apparently, TB and RB had some issues that were hotly discussed via phone in the past. Still, Ed Steer is a shareholder. Ed Steer, also, believes Ross beaty is missing the "anti-free market forces at work in the silver market". Beaty is one to throw out the derogatory term "conspiracy theorist", so it seems. While Beaty relies on the likes of GFMS or the CPM Group........other silver analysts like Butler, Sanders, Morgan or Puplava are not comfortable in the least doing so. Ed Steer points out that silver miners, for the most part, ignore the manipulation issues yet the shareholders of the various companies tend to believe them. I say this is the wedge that must be used as part of the silver advocates' arsenal. Steer points out that Beaty can see potential for gold manipulation yet misses that with silver. Of course, the two are inextricably linked. A free market clearing price for silver would carry over to gold. Steer wonders how deeply RB is willing to search for the "truth". Questions if Beaty is doing all he can for his shareholders. As a shareholder Ed Steer expresses his disdain that RB and Pan Am produce and sell silver for $5 or $6 per ounce. Great when reserves are added to co bottom line but would like to see them go after the few traders controlling the short side of Comex. Apparently, Beaty is a CEO as well as a lawyer and Steer believes he should be paying more attention to his shareholders wishes as well as the obviously manipulated markets. Beaty has a "fiduciary duty" to do whatever it takes to increase "shareholder" value. Beaty fails to consider the NYMEX/COMEX manipulations. Other giants in the industry, such as the Central fund of Canada or Sprott's Fund have good comprehension of the silver issues as put forth by Butler or David Morgan. Steer, as a shareholder, puts RB on notice in regards to this issue. END ********************************* What's it all mean? The miners have pretty much not been aboard all the changes being made recently in the gold and silver markets. There have been some fine exceptions, of course. The successful anti-hedging campaign was one of grass roots origin, definitely NOT from the top down. It has been a major success for the shareholders as the hedgers suffered tremendously in their bottom lines. It was a direct and purposeful campaign. Ross Beaty is a fine explorer and a fine manager of a mining enterprise. He's shown, on the other hand, a complete lack of appreciation for the non commodity issues regarding silver..............namely, COMEX abuses and/or monetary/investment demands. If he continues to dialogue with the likes of Ted Butler, Ed Steer and many others and somehow manages to open his mind to the various issues, this can change. Open and honest debate is a great starting point. Name calling is exactly the opposite. I see the silver advocacy issues in much the same light that the gold hedging issues used to be in. You can pretty much correlate the demise of a pre-imminent co, like Barrick Gold, with it's refusal to consider shareholder demands in regards to ending their hedge fund-like forward selling protocols. This is where we are now going with silver mining companies. Ross Beaty, has now made himself and his company a public vehicle for inspection. How he responds henceforth will dictate how much goodwill his fine company continues to receive in the market place. Pandora's box has been opened. It will also be exemplary for all other silver companies. Beaty's assertion that it is base metal miners that are forward selling their silver production demands close inspection. First of all, I'd want to know exactly how many years out this is transpiring, all the while suspecting that the silver is sold in amounts that are impracticle and undeliverable. Beaty acts like all the silver on the planet is up for sale at prices below the average cost of production, when in fact, it is certainly his silver that is DEFINITELY being sold below the average cost of production for an ounce of silver. 500 million "documented" ounces of silver around the world doesn't mean their owners want to sell them sub-economically, sorry Ross. What else is on the horizon? If, indeed, it is base metal miners that are acting to suppress the POS, then they will also need to be exposed and dealt with. Shareholders are not without influence, you know. The arrogant ones will go the likes of Barrick and that is pretty much written in stone as this silver manipulation unfolds. Ross Beaty may not 'get it' but thousands of silver owners around the world DO get it, mostly because of this vehicle {the internet] that I'm currently utilizing. RB...................you've got some splaining to do as well as some homework. If you feel called to alert Mr. Beaty about your personal silver concerns, his e-mail may possibly still be accessible.....rbeaty@panamericansilver.com I'm forwarding this info around the net to a multitude of contacts. The world is getting smaller. Accountability is a key word. Beaty's Smart But Doesn't Get It -- auspec, 11:35:46 05/08/04 Sat Subject: Ross Beaty {Pan American's CEO} Paraphrased Since I don't have permission to reproduce Ross Beaty's letter to GATA's Ed steer, I'll simply paraphrase it. RB has criticised Ted Butler in the past and doesn't believe "conspiracy" is necessary to show silver's bullishness. One prime example of silver shorts actually having the metal is via hedging of future silver production via base metal producers. I don't doubt this to be a supply issue. RB believes GFMS numbers and counts 500 M ounces of bullion inventories. COMEX, Zurich, Chinese Govt, Indian Govt, etc. He might as well count worldwide jewelery as there are AVAILABILITY issues with each and every source he mentions. RB believes gold to be manipulated at least to some degree yet fails to see it in silver. His co is producing silver at current low prices yet he defends not holding silver in form because they don't have the cash available. He cites Pan Am's astounding growth record over the years as defense for his actions. {I'm quite pleased to see him engaging in dialogue, however painful it might be}. Those that don't produce silver run the risk of missing out on opportunity by simply exploring or holding resource. Doesn't sound that bullish on silver prices to me if he thinks he needs to produce at recent levels of silver. He does agree w TB that buying physical silver will hasten the eventual day of rising prices. For every dollar of price appreciation in silver in 2003 Pan Am appreciated $6.60. Beaty expressed no understanding of the paper silver phenomenon that controls its price..........he's apparently content w it. He uses words like "blind faith" or "utterly specious conspiracy theories" or "loose and dubious words" in debunking Ted Butler and those who follow his writings. I bought Pan Am some 10 years ago under $2 Canadian because of RB's reputation and intellect. He's lived the silver market for 10 years and started his company because of bullish silver fundamentals. Still, after also having closely followed the silver market as well as many of Beaty's adventures and misadventures during this period of time, it's clear to me that Beaty doesn't appreciate the true value of silver or the deviousness of the market he's chosen to grow his company within. He's just another commodity guy w little appreciation for silver's historic role as value and money. He's mostly missed the boat in understanding how the commercials have endlessly used the silver CRIMEX market as their own personal playground. Set up the specs and then mow them down. Like the elitists he fails to criticise, his own arrogance impedes his vision. He's content w Pan Am's track record and cares little for free market mechanisms. This letter is being sent to RB, if his e-mail is still intact, and it is also being sent to SSRI executives. By the way, SSRI execs were gracious enough to respond to my recent silver activism posts. They have a much better grasp of the value of their product and how a true and free market should function. There is more to the world and life than simple rising share prices. Pan Am still needs to learn this lesson. I will follow up, when able, on Chris Powell's and Ed Steer's responses to Beaty.  Bewildered? -- auspec, 08:28:25 05/08/04 Sat Most of us acknowledge a statistically correlated inverse relationship between the $US and Gold. We have been in a LONG term bull market for Bonds {decades}which has been kaput for some many months now. Official rates {Fed Funds} will very soon reflect market rates of interest which have been rising in considerable fashion, spelling the end of the bond bull. The great unwashed believe the $US will thrive as higher interest rates support it. They also believe the US economy can withstand higher interest rates. They believe rates are going higher because the economy is heating up. Three huge false premises! Therefore the current rationale for gold tanking...........the $US is rising and set to rise more. Another false premise, of course. The US, corporately, nationally and individually has so much debt that we cannot withstand interest rates rising. Strong Dollar and strong economy was a 90's phenomenon, however contrived it happened to be. Once this delusion of strong economy, able to withstand increased rates of interest, is seen to be totally fallacious, the $US will resume the bear patterns it so deserves. That's when gold takes off on its next LARGE upleg. Watch the buck. You have now been granted more opportunity for ACCUMULATION: More physical first and foremost More Shares should you so desire NO MORE PAPER metals, please. Seldom, in our lifespans, will we see such a reality disconnect as we're now presented. Make the most of it. Happy hunting.  Silver Activism -- auspec, 06:36:48 05/07/04 Fri I'm left wondering if Pan American Silver's CEO, Ross Beaty, knows that he likely has some shareholders who believe the current "conspiracy theories" in regards to silver. Betting he'll soon know for sure. Couple of posts from Eagle ranch in this regards, you're encouraged to put them up at appropriate sites. Thanks. ********************************************** Author: THC Subject: Ultimatum for the Silver Miners Number: 3513 :: Date/Time: 05-06-2004 :: 21:50 Good evening! I think it is time to question whether it makes any sense for investors to maintain holdings of the leading silver mining companies. At the current silver price, none of them would be able to make profits on new investments in silver mining infrastructure, and therefore, at the current price of silver their undeveloped silver properties are essentially worthless. Investors continue to invest in and hold their shares with the explicit expectation that silver will appreciate against the US$.In the same way, silver companies continue to stay in business and acquire new properties for the same reason --- expectations for future gains in the price of silver. IF they indeed believe that the price of silver will appreciate against the US$, why do they hold 342 million dollars in cash, instead of in silver? It must be the case that they don't "believe their own bullsh*t" that *silver is money*, otherwise they would hold a significant portion of their liquid assets in silver, instead of fiat currency. Silver Miners -- Capitalization & Cash Holdings Symbol Capitalization Cash CDE: 978.61M 81.68M SIL 758.51M 40.90M PAAS 678.53M 89.13M SSRI 421.02M 9.66M HL 671.39M 123.39M Total 3.5B 342M Perhaps it is time to lay down the gauntlet, and demand that silver mining companies either begin to get serious about helping to establish a healthy silver market, or shut down their businesses. If they would agree to hold half of their liquid assets in silver instead of fiat currency, it would change the silver market overnight. The miners and their shareholders would benefit by increasing the value of their liquid assets (increase in the POS), their silver properties, and their share prices. What reasons could exist for not taking this simple step to support silver? Would it be possible to create a formal proposal to be presented at future shareholders' meetings of the major silver companies? The proposals could be signed by all shareholders with an interest in a higher silver price, and would potentially carry considerable weight among management. Thank you for your consideration. THC ********************************************* Author: auspec Subject: THC Number: 3516 :: Date/Time: 05-07-2004 :: 05:05 In regards to your silver activism suggestions.......here's something from a recent Midas commentary {Bill Murphy}: GATA's Ed Steer, who has a sizeable mailing list, received the following commentary from Ross Beaty, the CEO of Pan American Silver: Please delete me from receiving your weekly commentary. I get too many unsolicited emails already. Butler's personal criticism of the silver CEOs is quite extraordinary and utterly misguided. But he has a thick skin he says, and so he should not complain when I suggest he is simply nuts. Anyway, I don't want to read any more of this conspiracy-theory drivel. Believe it if you want, it's a free world. I don't. Ross Beaty In other words, this Beaty is saying the following are also conspiracy-theory drivelists: Ferdinand Lips, author of Gold Wars John Embry, President of Sprott Asset Management Frank Veneroso, author of The Gold Book Jim Sinclair, "Mr. Gold" Don Doyle, President of Blanchard Coin GATA The GATA ARMY I read Beaty's comment to a very bright Café member who immediately sold his Pan American shares in grave concern for the man's sanity. Mr. Beaty may be reached at: rbeaty@panamericansilver.com END Comments: This is a perfect example of what we're dealing with w silver CEO's. Beaty has an exceptional reputation as an explorer/miner, people bought Pan Am about 10 years ago simply because it was RB's next project, myself included. I'm not a current shareholder though. There is NO reason that pressure cannot be put on silver co's to do something positive for the price of silver, it obviously worked for gold with the gold hedging issue. Beaty has simply gotten too big for his britches {fat cat} or he hasn't read the likes of Ted Butler and the many other silver enthusiasts. He needs to engage in honest debate instead of resorting to name calling and general dismissals. This will come back to haunt him as his Co share price might just get his attention. Yep, these silver compant CEO's would face some heat for stockpiling silver, but they'll have to choose who they'd rather take heat from.........elitists of shareholders. I do know that SSRI has at least considered holding silver back from the market, but I also know it's fraught w risk. I may just call em up 2day and see where they stand on the issue. A high profile silver advocate/activist is all that we really need...............someone to provide the impetus to contact silver producers or silver companies w resources. Along the lines of the Eliott Spitzer letter writing campaign. You see, if these CEO's dismiss the idea completely or fail to relate to shareholder passions...........they will lose their base of stock buyers and they will face the wrath of enlightened silver activists. So be it. Beaty has shown himself to have his head in the sand or possibly in some contorted position. He either needs to know the facts or simply just shut up. My guess is that his e-mail box is filling up lately. Great ideas, THC. This is being forwarded to some of the silver activists around the net. Silver -- Sharefin, 22:46:50 05/06/04 Thu Debunking The Warren Buffet Rumor On Silver Is the world's second richest man turning to silver again? Recent comments by investor Warren Buffet have added fuel to persistent rumors that the world's wealthiest investor is looking to make another big splash in the silver market. Some market watchers, however, are discounting these rumors on the grounds that the 'Oracle of Omaha' has just become too big for the already tight silver market. ~~~ However, Ted Butler, an independent silver market analyst based in Florida doesn't believe Warren Buffet will be returning to silver any time soon as there just isn't enough of the metal on the market to make it worth his while. "It's a weird problem that faces a good number of people - he's got too much money to invest meaningfully in silver," said Butler. According to Forbes magazine, the two richest men in the world currently are Microsoft Chairman Bill Gates followed by Warren Buffet, each having net worth of more than 40 billion dollars. By comparison, the world's known stockpile of silver now stands around 150 million ounces, valued just under $1 billion. This means Buffet would need only 2.5% of his assets to buy up all of the silver in the world. However, such a feat would be impossible for Buffet or anyone else with a spare billion dollars to throw about. The largest known horde of silver in the world is held by COMEX, which has just under 750 million dollars in silver locked up in its vaults. "That is literally chump change to Buffet," says Ted Butler. Buffet's big silver buy in the late 1990's was also met with a fair deal of criticism as it was seen by many as an attempt to corner an already tight market. Ted Butler contends that Buffet doesn't want to endure that kind of negative publicity again. ~~~ Ted Butler, however, suggests investors should spend less time speculating about Warren Buffet and more time looking at simple supply and demand fundamentals. "The world consumes more silver than it produces, depleting inventories to, in practical terms, almost nonexistent levels," Butler said, noting that consumption of silver has outpaced production for the past 15 years. Butler sees very little downside for silver right now and believes there is the potential for prices to increase many times over the current level. "If you believe in the validity of the law of supply and demand and you objectively study the real silver story, you will be compelled to buy silver," Butler said. "It's as simple as that." Gold -- Sharefin, 22:40:42 05/06/04 Thu Maestro says beware the deficit Last summer, as the Bush administration was preparing to announce the largest budget deficit in U.S. history, Federal Reserve Board chairman Alan Greenspan came under fire from a number of quarters for his relatively tame criticism of the government's ballooning budget deficit picture. Well, the Maestro isn't being tame any more — he said Thursday that the deficit is a far bigger problem for the U.S. economy than either the trade deficit or the high level of consumer debt. And there are few signs that the fiscal deficit is going to shrink any time soon; if anything, it is more likely that it will increase. ~~~ On Thursday, Mr. Greenspan was even more blunt in his assessment. He called the spiralling budget deficit "a significant obstacle to long-term stability" and said that he was more concerned about the fiscal deficit than he was about either the massive trade deficit or the high level of consumer debt in the U.S. Both of those factors, he argued, can be corrected by market forces — and in fact, he said that the globalization of trade was likely to soften the effects of a large trade deficit on the U.S. However, the budget deficit "is not readily subject to correction by the market forces that stabilize other imbalances," he said. The chairman warned that the current economic picture might make it easy to become complacent about the long-term effects of large deficits, since they appear to have had no real effect so far — despite a $500-billion shortfall expected for the current year and another similar-sized one expected for next year. As Mr. Greenspan put it, the economy "appears to have been pressing a number of historic limits in recent years without experiencing the types of financial disruption that almost surely would have arisen in decades past." ~~~ "Has something fundamental happened to the U.S. economy and, by extension, U.S. banking, that enables us to disregard all the time-tested criteria of imbalance and economic danger?" the Fed chairman asked during his speech Thursday at a conference organized by the Federal Reserve Bank of Chicago. "Regrettably, the answer is no. The free lunch has still to be invented." By that, Mr. Greenspan appeared to mean that the risks of these kinds of imbalances are still out there, but have been held at bay by the beneficial effects of globalization and innovation. This cannot continue indefinitely, the chairman said, "because there are limits to how far globalization and the speed of innovation can proceed." In other words, the U.S. government's massive deficits may not be a problem now, but they could easily become one in the future depending on what economic events occur in the meantime. That's something the U.S. needs to be aware of, and — as a country that does more than 85 per cent of its export business with the U.S. — something Canada has an interest in as well. Gold -- Sharefin, 22:32:00 05/06/04 Thu ROMANIAN town to be razed for gold Gold -- Sharefin, 22:30:43 05/06/04 Thu Gold Bullion Securities says demand for new instrument up Gold Bullion Securities saw renewed demand for its new investment instrument in April, after it relaunched a slightly revamped version of its shares, each of which represents 1/10 of an ounce of gold, a GBS official said on Thursday. As of mid-April GBS had a little over $750 million combined in the London and Australian listed shares of the new instrument (GBSx.L:) (GOLD.AX:), representing a little under 60 tonnes of gold, up from 34 tonnes in February, said George Milling-Stanley, an official with the World Gold Council, which developed and promoted GBS. Gold -- Sharefin, 22:23:08 05/06/04 Thu 'Bin Ladin' offers gold for killings A statement attributed to Usama bin Ladin has offered rewards in gold for the killing of UN Secretary General Kofi Annan and US administrator in Iraq Paul Bremer. In a statement posted on an Islamist website on Thursday, the author said 10kg of gold would also be given as a reward to anyone killing other officials including Bremer's deputy or UN envoy to Iraq al-Akhdar al-Ibrahimi. "We in al-Qaida organisation are committed to a prize of 10,000 grams of gold to whoever kills Bremer, his deputy, the commander of American forces or his deputy in Iraq," the statement said. It was not immediately possible to verify the authenticity of the statement, which said it would give the same reward for killing Annan and al-Ibrahimi. UN targets "Whoever kills Kofi Annan, or the head of his delegation to Iraq, or his representatives such as al-Akhdar al-Ibrahimi, will get the same prize," said the statement, which was addressed to the Iraqi people. Al-Ibrahimi is in Baghdad for talks on forming an interim Iraqi government in time for the US handover of sovereignty at the end of June. The statement blasted the United Nations as a tool of "Crusaders" - a reference to the US-led occupation in Iraq - and accused it of surrendering Palestinians to Zionists. The statement also offered one kg of gold to anyone who kills a US or British soldier, or civilian working for the US-led occupation, and 500 grams of gold for the killing of their allies such as Japanese or Italians. Fiat -- Sharefin, 22:21:35 05/06/04 Thu Fed's Poole urges end GSE Treasury credit lines CHICAGO, May 6 (Reuters) - St. Louis Federal Reserve President William Poole on Thursday called for the elimination of government lines of credit to mortgage finance giants Fannie Mae and Freddie Mac to reduce risks to the U.S. financial system in the event of a crisis at either company. "There is no question but that a crisis affecting either Fannie Mae or Freddie Mac would have widespread effects because these firms are so large," Poole said in remarks prepared for delivery to a banking conference organized by the Chicago Federal Reserve. ~~~ "Investors have priced these obligations under the assumption there are no possible risks that might strain (government sponsored enterprise) capital positions," he said. ~~~ He said an assumption that the government stands behind the GSEs was typical of the type of behavior that has preceded past financial crises. Gold -- Sharefin, 09:58:02 05/06/04 Thu Pricing Gold but No Longer Standing on British Tradition Another piece of the British empire crumbled yesterday when no one raised or lowered the Union Jack to set the international price of gold. Instead of meeting twice a day, as they have for almost 85 years, in the oak-paneled offices of the venerable merchant banking group NM Rothschild & Sons in London's financial district, four precious-metals traders - three in London and one in Paris - fixed the gold price on a telephone conference call, basing the decision on their latest readings of supply and demand. ~~~ Yesterday, Mr. Weeks became the first non-Rothschild employee to run the proceedings. The bank, controlled by the family that supplied gold to the Duke of Wellington almost two centuries ago to help British forces win at Waterloo, closed its commodities trading business last month. The Rothschild seat on the committee is up for sale. The bank's grip on the chairmanship had become a sore point with the other four committee members - ScotiaMocatta, Deutsche Bank, HSBC Bank USA and Société Générale. ~~~ Philip Klapwijk, chairman of GFMS Ltd., a precious-metals consultants group in London, said the twice-daily London price fixings remained "very much the benchmark" for institutions taking physical delivery of gold. But speculative trading and hedging with futures trading, Mr. Klapwijk said, had increasingly gravitated to the Comex division of the New York Mercantile Exchange. The London Bullion Market Association, which controls the price-setting process, plans to introduce a live Web-based commentary on the daily price-setting this year. In an effort to broaden London's influence in the international market, the association is seeking to help institutions in countries with expanding gold consumption - like China, India and Russia - to set up efficient markets. Gold -- Sharefin, 09:46:55 05/05/04 Wed Jewellers fall short of gold standard CHECK that ring on your finger or the bracelet on your wrist, because new evidence has emerged that all that glitters in Scotland is not necessarily gold. An investigation by consumer watchdogs has revealed that almost half of the jewellery on sale at department stores, jewellery outlets and other stores is not hallmarked, which means there is no guarantee that it is gold, silver or platinum. And as long as retailers do not use the actual words "gold", "silver" or "platinum" to describe items without hallmarks, they are not breaking the law. As a result, thousands of customers are paying for jewellery without realising that the "gold" ring they have bought may just be a cheap imitation. The survey findings are likely to prompt countless married couples to check their wedding rings to see whether they are actually as precious as first thought. Meanwhile, trading standards officers are warning anyone thinking of investing in a new ring, necklace or other item for their loved one that they risk being ripped off at a whole range of outlets, from upmarket jewellers to tourist gift shops. And they say that the findings of the survey - which covered imported gold, silver and platinum items at 75 retailers in Edinburgh - mirror the situation across Scotland, where a flood of unhallmarked jewellery is now being sold in shops. ~~~ In a recent case in the United States, more than 60 retailers were found guilty of selling jewellery containing less gold than had been advertised. ~~ Hallmarking is an ancient method of safeguarding consumers from fraud introduced by goldsmiths. The word itself stems from "marking goods at the (Goldsmiths) Hall". Legislation on hallmarking in Britain dates back to 1300 but is now covered by the 1973 Act. The process of hallmarking involves testing articles made of precious metal and marking them to indicate that they are of a minimum standard of purity. The UK hallmark consists of three compulsory symbols - the metal purity mark, showing the precious metal content of the item; the maker's mark, showing who the item was made by; and the assay office mark, showing which office it was tested and marked at. Gold -- Sharefin, 09:43:58 05/05/04 Wed China's appetite for metals seen largely intact China's hunger for raw materials will drive further demand for commodities such as metals despite worries that the country's economy might overheat, a panel of mining specialists said on Tuesday. Metals prices fell sharply last week, with China seen as the chief cause amid increasingly stringent measures being implemented by Beijing to stop the economy overcooking after it grew 9.1 percent last year. But the panel said last week's losses were no cause for panic, and rather proof that the country was in a substantial economic cycle lasting more than 15 years. "There are only a few sectors in China that are truly overheated...there are very large sectors of the economy that are not overheated at all," Ivanhoe Mines Ltd Chairman Robert Friedland told delegates at a mining forum in London. "It's very hyper, extremely bullish...that the Chinese prevent a bubble and there's absolutely no doubt that they will be able to do so," he said. Gold -- Sharefin, 09:42:40 05/05/04 Wed Peru eyes world No. 5 gold spot with Alto Chicama Peru expects the 2005 start of Barrick Gold Corp's Alto Chicama project to make it the world's No. 5 bullion producing nation with output of 185 tonnes next year, a senior industry executive said on Tuesday. Peru last year leapfrogged Indonesia to arrive in the No. 6 spot, with record output of 172 tonnes, and expects production this year to edge up to 175 tonnes, said Carlos Galvez, the president of the gold committee of Peru's private National Society for Mining, Petroleum and Energy. ~~~ Peru -- a poor country once dubbed a beggar sitting on a gold bench -- is already home to Latin America's biggest gold mine, Yanacocha, which is owned by Newmont Mining Corp with Buenaventura as a partner. It has an exciting "gold belt" in the south that is attracting a lot of exploration activity. Energy and Mines Minister Jaime Quijandria said Alto Chicama was the most exciting of Peru's 169 mining projects. He said 120 miners currently operated in Peru, of which 80 were searching for gold. He said Peru had proven and probable gold reserves of at least 100 million ounces and the ministry was receiving more and more exploration requests for the southern area, where one successful small gold mine, Minera Aruntani, already operates. Peruvian-owned Aruntani, which is already catching the eye of gold majors, hopes to produce 200,000 ounces this year and 250,000 next year, when it taps into its main deposit. "Peru is, without exaggeration ... an enormous gold deposit ... there is gold all over Peru," Quijandria added. Gold -- Sharefin, 09:40:27 05/05/04 Wed BoF and French state to share in gold sale Paris - France's finance minister Nicolas Sarkozy proposed Tuesday that 500 to 600 tonnes of gold held by the Bank of France be sold in the coming five years after an agreement with the central bank. The bank would hold the proceeds but the interest from the money raised - €200 million (R1.66 billion) - would go to the state every year after the first year of sales. In April, Bank of France governor Christian Noyer said he was open to selling gold held by the bank as long as the proceeds did not go diirectly to state coffers. In March, 15 central banks, including the European Central Bank and the Bank of France, agreed not to sell more than 500 tonnes of gold a year from 2004 to 2009. Gold -- Sharefin, 09:25:55 05/05/04 Wed Viet Nam imports more than 15 tonnes of gold in four months Viet Nam imported more than 15 tonnes of gold in the first four months of this year, according to a source from the State Bank. Due to massive imports, the gold price on the local market remains high even when the price on the world market has sharply decreased. Currently, the local price is five percent higher than the world market (equal to at least 400,000 VND per tael). According to the same source, a decrease in the gold import tariff and an open granting of import quotas has contributed to reducing the smuggling of gold. This is considered an important factor in stabilizing the USD value on the free market. Gold -- Sharefin, 09:24:18 05/05/04 Wed The prospects of gold mining in India The only gold producer currently in existence in India is The State of Karnataka owned Hutti Gold Mines Ltd. Hutti produces around 90,000 ounces (3 tons) of gold a year and an additional 1,80,000 ounces (6 tons) is produced by Hindalco as a by product of copper mining. India's consumption is around 21,000,000 ounces (700 tons) of gold per year. There is therefore a tremendous shortfall in production versus consumption. The shortfall is catered through imports. The World Gold Council and a lot of other authorities have done their homework in terms of prospects of gold in India. The geological terrain in India and Australia is almost identical. Australia has made some very large gold discoveries and is now producing about 8,400,000 ounces mainly due to intensive exploration activities carried out in the country. This potential has not been realised in India because of lack of adequate exploration. Whilst the Geological Survey of India has done a commendable job, most large discoveries worldwide have been made by the private sector exploration companies listed on the respective stock exchanges. Companies like us were not in existence until around 8-9 years ago. In my opinion, the opportunity for development of gold mining in India is very substantial. Through progressive and detailed exploration and efficient investment of capital, we are trying to unearth the gold reserves that we believe are beneath the surface. Indians are emotionally attached to gold. Births, marriages, and religious occasions are all celebrated with the giving of gold. The rural sector prefers gold as a currency to cash. The farmer's wife can go to the goldsmith and convert gold to cash as required. She may not know how to operate a bank account. I have a strong view on gold prices. The largest driver is the weakening US dollar. As the dollar sheds weight, the price of gold moves upwards. The economists believe the dollar could see some more weakness going ahead. Of course, there are going to be dips but in my opinion the price is generally heading northwards. Geo-political tensions worldwide is another contributor to this northward movement. There are a lot of countries, which are looking to add some gold into their system and thereby gain substance within their currencies. The Malaysian government is looking to introduce a currency made of gold - the gold dinar. The new President of Argentina has proposed a gold-backed peso. Moreover, on our web site we have mentioned about prices of gold being subdued on account of some acts by bullion bankers. "According to GATA (Gold Anti Trust Action Committee), about 15,000 tons of gold has been loaned by the Central banks to the Bullion banks for which they paid about 1% per annum. The Bullion banks then sold the "loaned" gold on the open market and invested the proceeds at 6-7% per annum. When gold prices started heating up, the bullion banks (that are in debt to the Central banks ) have to buy it back to repay the gold borrowed from the banks. Each time gold rallies, the Central banks reportedly are selling more government gold to cap its price. A landmark legal case is before a US federal judge alleging a variety of collusive, manipulative activities in the gold global markets. There is also a demand- supply deficiency internationally, according to World Gold Council. Demand is running at about 120 million ounces (4000 tons) whilst the supply is around 67.5 million ounces (2250 tons). How long can the shortfall be met from existing reserves held by the banks? What would happen to the price, if the shortfall continues when the existing reserves are depleted? ~~~ If you look at the history of gold in India, it is over 8000 years old. There were around 900 mining locations throughout the country only a few decades ago. What put a halt to the development of mining activities was the nationalization policies of the then government. What has brought back the interest in the industry is the opening up of the sector through foreign direct investment. Gold -- Sharefin, 09:18:48 05/05/04 Wed Gold demand in India to fade on waning wedding buying BOMBAY (Reuters) - Gold demand in India, the world's largest physical market for the metal, is expected to fizzle out in about two weeks as the peak buying season draws to a close, traders said on Monday. The marriage season that fuels purchases of gold jewellery in the country, which accounts for around one-fifth of the world gold demand, was almost over and buying would be slack in the rainy months of June and July, they said. "The current active demand will sustain for another about two weeks as soft prices are prompting jewellers to stock gold and consumers to buy jewellery for their marriage needs," said Bombay-based bullion dealer Prithviraj Kothari. Gold demand would again start picking up from mid-August and peak in November around Dipawali, traders said. The country witnessed heavy retail purchasing in the past two weeks with a significant drop in prices at the peak of the wedding season, which runs from December to May, they said. Jewellery accounts for about 85 percent of Indian gold demand and forms an important part of Hindu marriages, as parents gift their daughters the metal for financial security. Friends and relatives also often offer gold ornaments as wedding gift. "The last two weeks have been fabulous," said Ranjeeth Rathod, a bullion dealer based in Madras. "We have done business of two months in just 15 days." Gold -- Sharefin, 08:58:18 05/05/04 Wed Gold logs monthly loss of more than $40 Gold futures closed out April with a cumulative monthly loss of more than 40 usd an ounce Friday, as growing expectations of a US interest rate hike dulled interest in the precious metals. "Once the news went out that the US economy was improving and [Federal Reserve Chairman] Alan Greenspan declared deflation was not an issue, investors were concerned that interest rates were headed higher sooner and maybe by more than expected," said John Person, editor of a trade newsletter. "The dollar rallied on this and gold tumbled." ~~~ "There is no way to just turn off the demand faucet in one day," said Person. Concerns that China will cut back on bank lending "caused havoc in the metals complex and other commodity resource markets" on Wednesday, he said. Traders worried that the potential for a slowdown in the country's economic growth would eat into metals demand. In Person's view, the market moves -- including a more than 13 usd-an-ounce drop in gold futures -- "were extremely overdone reactions." Person believes the price declines this week were actually a "healthy correction" in what he sees as a "longer term up-trending market." Peter Grandich, editor of another industry publication, agreed. The fall in gold prices "could actually increase the chances we go to 500 usd or higher." For one, the market had "many Johnny-come-lately speculators come into the metals futures market from December to March," he explained, and now "they appear to be the ones blowing themselves up." Physical buying in most metals has been strong. While the US dollar "traced out a textbook countertrend rally that appears to be over, deficits and debt levels are worsening, and inflation is surfacing," he said. Grandich downplayed the metals market's scare over China's move to reduce bank lending, noting that the Asian country's economy grew about 9 pct last year and that estimates show growth could now be at 15 pct. "So if they slowed it down by half, that's still close to last year," he said. "And with base metal supplies at or near record lows, the lack of exploration for the last several years should prevent large increases in supplies over the next few years." Gold -- Sharefin, 08:55:48 05/05/04 Wed PAMP enters Turkish gold sector One of the biggest refineries in the world, Produits Artistigues de Precieux (PAMP), has worldwide recognition in the international gold markets and is now entering the Turkish gold sector. ISTANBUL (ZAMAN) - The PAMP product, small gold bullions, will be on sale at all the jewelry stores. The Yalazan Jeweler Company will import the PAMP product and distribute them for sale. It will be possible to open an account at Kocbank. The gold paid into an account can be drawn out of the account, again as gold, either at the end of the maturity or at another desired time. Fiat -- Sharefin, 08:54:44 05/05/04 Wed The world needs a single global currency Taking a cue from the successful implementation of the euro and the growing interest in other regional common currencies, the world should proceed to the next level of currency consolidation: a single global currency, to be managed by an international central bank. Such a single global currency would eliminate worldwide currency trading costs, eliminate currency-related investment risks and eliminate Balance of Payments problems for all countries. The Single Global Currency will be good for New Hampshire and good for the world. ~~~ After the 1944 Bretton Woods conference, exchange rates were based on gold and were relatively stable until 1971, when rates were allowed to float. Since then, governments have sought to stabilize exchange rates by various mechanisms, such as pegging one small country's currency to that of a larger country, but nothing has worked well. That's why we now have arrived at the time when a single global currency would be beneficial and we should plan for it. To assist with such planning, the Single Global Currency Association is holding the First Annual Single Global Currency Conference at the Mt. Washington Hotel in Bretton Woods on Friday, July 9, 2004, the 60th anniversary of the 1944 Bretton Woods conference. The goal of the Association is the implementation of a Single Global Currency by 2024 and there will be a Currency Conference at Bretton Woods every year until such implementation is achieved. Gold -- Sharefin, 08:52:21 05/05/04 Wed Six reasons why gold shares are still sexy 1. Global currency debasement. The US dollar is fundamentally and technically very weak and could fall dramatically. However, other countries are very reluctant to see their currencies appreciate and are resisting the fall of the dollar. We should therefore see tangibles rise significantly in price, particularly gold. 2. Growing gap between mine supply and demand. Gold mine supply is about 2 500 tons a year and demand has exceeded this by a considerable margin for a number of years. 3. Low interest rates discourage hedging. With low rates, there is not sufficient contango (when the future is higher than the spot) to create higher prices in the out years. Therefore there is little incentive to hedge. Gold producers are not only not hedging, they are reducing their existing hedge positions. 4. Central banks are more reluctant to provide gold to the market. The banks have supplied too much via the leasing mechanism. Far Eastern central banks are also rumoured to be buyers of gold to diversify away from the dollar. 5. Rising geopolitical tensions. Deteriorating conditions in the Middle East, the US occupation of Iraq and the nuclear ambitions of North Korea headline the geopolitical issues. A fearful public has a tendency to gravitate towards gold. 6. Limited size of the gold market. All the physical gold in existence is worth more than $1 trillion (R6.9 trillion), while the value of all the publicly traded gold firms in the world is less than $100 billion. When the fundamentals encourage a strong flow of capital towards gold and gold equities, the trillions upon trillions worth of paper money could propel both to unfathomably high levels. Gold -- Sharefin, 08:50:16 05/05/04 Wed Gold rush pitting jewelers against miners SPOKANE, Wash. – Those gleaming necklaces, rings and watches in the jewelry case may cost a lot more than you think, environmentalists say. In a new public relations campaign, environmentalist groups are scolding jewelers for the damage caused by mining for gold, silver and other precious metals, and they are putting pressure on jewelry retailers to reject minerals from big polluters. One gold ring, conservationists say, generates 20 tons of mine waste. This year, they passed out Valentine's Day cards stating, “Don't tarnish your love with dirty gold” in front of jewelry stores in New York, Boston and Washington. The campaign caught the attention of Tiffany & Co., which took out a recent ad in The Washington Post that said a proposed mine under the Cabinet Mountains wilderness of Montana is a poor way to fill its jewelry cabinets on Fifth Avenue. “Given the impact of mining for gold, silver and platinum, they are a company who cared about how they were viewed and what their customers think,” said Steve D'Esposito, president of Earthworks, the environmental group leading the campaign. The ad, signed by Tiffany Chairman and Chief Executive Officer Michael J. Kowalski, surprised leaders in the mining industry. “I was stunned that a person of Mr. Kowalski's stature and obvious business acumen would write a letter like that,” said Laura Skaer, head of the Northwest Mining Association in Spokane. The jewelry industry has already started the process of guaranteeing that its raw materials came only from socially and environmentally friendly mining companies, according to Jewelers of America, an industry group. For several years, the group has been pushing a policy of supporting “responsible mining of minerals and metals,” said Fred Michmershuizen, director of marketing for the New York-based group. ~~~ Now Earthworks and a similar group, Oxfam America, have turned their sights on what they call the dirtiest industry in the United States – gold mining. The U.S. gold jewelry market is worth about $16 billion annually, but mining is the top toxic polluter in the United States, responsible for 96 percent of arsenic emissions and 76 percent of lead emissions, according to a report the groups released in February. Gold -- Sharefin, 08:46:30 05/05/04 Wed Russia raises the stakes in quest for Tsar's gold THEY were just a small part of the Tsar's incredible wealth, 22 boxes filled with ingots of gold given away in a dubious arms deal between a Russian commander and the Japanese. But now what has become known as the ‘Tsar's gold' has taken centre stage in a series of diplomatic moves by Russia and Japan designed to bury old rivalries over territory and build new cooperation through lucrative energy projects. ~~~ More than 80 years after it was passed to Japan, the full story of the gold which once belonged to Russia's last Tsar, Nicholas II, is still shrouded in mystery. Between 1914 and 1922 about 500 tonnes of Russia's imperial gold reserves are thought to have been whisked abroad as security to buy weapons. Of the total amount sent overseas, an estimated 200 tonnes ended up in Japan, while five-and-a-half tonnes from the personal coffers of Tsar Nicholas was allegedly intercepted and stolen by the Japanese in 1917 en route to England. Originally the Tsar had hoped to set up a nest-egg with the gold in London in case he was forced to abdicate. He was murdered by the Bolsheviks before he could flee Russia. During the First World War gold and platinum ingots and other riches had been moved deep into Russia amid fears that the Tsarist army could be overrun on the German front. But after the Russian revolution in 1917 the country was ripped apart by civil war. A year later, socialist revolutionaries overran state repositories in Kazan, seizing most of the country's gold reserves. The treasure - including ingots, coins, jewellery and diamonds - was packed into 25 carriages and dispatched to Siberia as the Red Army advanced. But in Omsk, 1,500 miles east of Moscow, forces loyal to Kolchak seized the train. Before his death at the hands of the Bolsheviks, Kolchak passed much of the gold to the Japanese government as a down-payment for military supplies. However, according to Sirotkin, "not a single rifle or shell was delivered". The gold's estimated value today is £45bn, similar to Russia's total gold and foreign currency reserves and enough to pay off two-thirds of the country's foreign debt. Gold -- Sharefin, 08:44:24 05/05/04 Wed Japan admits taking over Russian gold, promises nothing in return Japanese sources have confirmed that Russia turned over 55 boxes of gold to Japan in the 1916-1920s in order to pay for supply of military hardware to Russia. Nevertheless, in the opinion of official Tokyo, Japan has no Russian valuables at present that should have been returned to Russia. The conclusion was announced by the Japanese Foreign Ministry that conducted an investigation to this effect and insists on its own version as to what happened to the Russian gold. Gold -- Sharefin, 08:42:39 05/05/04 Wed gold & silver Gold? Take a Valium says Lassonde Newmont president, Pierre Lassonde, usually finds a way to have the gold price co-operate when the company comes to market with its latest news. Not so today as gold crashed below $385 per ounce, taking some of the wind out his sails. Putting on a brave face and echoing Dr Martin Murenbeeld's prescription last week in Zurich for gold jitters, Lassonde recommended a valium; "because nothing has changed in our macro view for gold." Fiat -- Sharefin, 08:39:36 05/05/04 Wed Macfarlane sounds warning bell on Fed policy If you're an employer, lock your staff into three-year employment contracts and set your future buying prices now. If you own bonds, cut your losses from last month and get rid of them. If you're about to buy property, then that's your fault, but at least think about locking in your mortgage rates. Because a fortnight ago the world's most successful central banker, Ian Macfarlane, came as close as any governor has probably ever come to saying Alan Greenspan has fluffed it. Macfarlane's indictment of Greenspan went something like this, after boiling away the qualifications and taking some literary licence: half the world sets their currencies to the greenback, which means Greenspan effectively sets monetary policy for much of the world. The world is entering a third consecutive year of accelerating growth and yet its monetary and fiscal policies are more expansionary than at any time since World War II. This torrent of money has primed commodity prices and frothed East Asian financial markets into a frenzy that looks suspiciously like 1997. If Greenspan doesn't take his foot off the pedal very soon he'll put the world at risk. Incredibly, Macfarlane's searing public critique of American policy is almost pallid compared with the views that are apparently being expressed each month behind the Reserve Bank's boardroom doors. His board colleague, Professor Warwick McKibbin, told the Herald there was a striking likeness between what we are seeing now and the inflationary spiral that started 30-odd years ago, when the US printed money to pay for the Vietnam War and fuelled oil price shocks and a decade of stagflation. Only this time around, the inflationary conditions are also overlaid with a Reagan-style fiscal crisis. "We've got the loose monetary experience of the 1970s with its inflationary danger, together with fiscal insanity greater than in the earlier 1980s crunched up into the present. ~~~ Although Australia has the great advantage of having a sensible central bank and a significant interest rate buffer, its inflation prognosis could be more acute than elsewhere for two reasons. First, the rising dollar has been a strong disinflationary force for two years. But the dollar is now 10 per cent down from its February highs and is unlikely to swing back up (because the US is now in full recovery mode while its deficit remains in desperate need of finance). Second, the Australian labour market is as tight as it's been for a generation. We are seeing wages edge upward and the annual increase of domestic prices chug along at about 4.5 per cent. While Macfarlane and his board have guided Australia's unemployment rate to its lowest mark in a generation, Greenspan has presided over the greatest obliteration of American jobs since the Great Depression. There are 2.7 million less American jobs than there were three years ago and about 6 million less than could be expected after population growth. So when Macfarlane rings the bell on Greenspan it is worth taking note. Gold -- Sharefin, 08:36:19 05/05/04 Wed Bidding for Sukhoy Log gold deposit heats up A Moscow press leak from the stable of Norilsk Nickel owner Vladimir Potanin suggests that, far from being a done deal, the competition for Sukhoy Log ("Dry Gulch"), Russia's largest unmined gold deposit, is only just beginning to warm up, the Russia Journal reported. The press leak also hints at the possibility that whoever wins the bidding may have to compensate South African mining company JCI, whose right to mine the deposit was corruptly revoked in 1997 by the Russian authorities, in league with JCI's partner at the time, Lenzoloto. At the same time Norilsk Nickel is positioning itself to take shareholding control of South African miner, Gold Fields - a move which will require South government approval - and also attempting to win the Sukhoi Log deposit, which was illegally taken from another SA mining company and its Australian partner in 1997. Gold -- Sharefin, 08:33:53 05/05/04 Wed Gap in gold production looming With gold trading at decent levels, most precious metals mining companies that concentrate in gold production are having a banner year. Should gold prices remain high investors assume the underlying shares of these companies will too. Guess again, there's a gap in gold production looming. ~~ With many of the major producers properties playing out companies like Apollo and Golden Phoenix will be growing in production over the next two years while others, like Meridian, will be declining. This gap in production is industry wide, with companies increasing production in 2004 and 2005 facing the highest earnings growth in a high-priced market cycle. Gold is trading in a $400 range with no decline in short term spot prices on the horizon. While some traders believe gold will continue to climb, prices remained stable. Gold -- Sharefin, 08:30:48 05/05/04 Wed The Race for China's Gold - Reforms to mining laws in the past decade and the chances of making sizeable discoveries was polishing China's appeal for international gold mining, according to John Dow, Newmont Mining Corporation (NYSE: NEM) managing director for Australia. China, which has grown into the world's 4th largest gold producer, may be heading to no. 1 as foreign exploration and development interests climb. Speaking on the sidelines of a mining conference, Dow said the miner regretted not making inroads into gold mining in China to date. "I think we neglected China and it's the world's fourth-biggest gold mining country and not well-explored," Dow said. Newmont has had offices in China since 1993, but has not dabbled in the country's highly fragmented mining sector, Dow said. While Newmont ponders China's gold production other mining companies are actively exploring and developing properties. ~~ According to the Goldsheet, China has grown into no. 4 in world gold production in less than ten years. In 1995 China first came on the radar screen with a 6.2% share of global gold production. By 2003 that figure had grown to 7.7% while US production over that same period shrank from 14.1% (1995) to 10.2% in 2003. AXcess News published a story in mid-March about the gap in US gold production that focused on some of the junior mining companies that were gearing up production. In contrast, China's future appears to be outpacing all of the other major global gold mining prospects. While Savoy's joint venture may tie up a sufficient amount of claims to attract the larger operators, like Newmont, into stepping up to the plate and turning those claims into producing mines, Savoy may keep the best parcels for its own portfolio. Gold -- Sharefin, 08:22:26 05/05/04 Wed Gold Hits Six Month Low on Concern Over China Lowering Demand for Metals AXcess News released a story covering Gold's dramatic drop in the wake of China announcing it would reduce the demand for metals as part of a program to curb bank lending. ~~~ The news from the Chinese government may have spooked investors, putting pressure on the metals market. While the dollar's recent strength may be more to blame, according to Laif Meidell Vice President with American Retirement Planners, a Reno-based financial service. "China gave approval to its citizens to be able to buy and own gold, so that was another reason people were thinking gold was a great play." ~~~ In a recent story on China's gold mining industry Savoy had been featured for developing the first joint venture agreement with China's First Geological Exploration Institute of the Heilongjiang Geology and Mineral Development Bureau (see, The Race for China's Gold"). The First Institute is responsible for mineral resource discoveries, licenses and concessions in Heilongjiang Province, the largest province in northeast China, which covers an area of approximately 469,000 sq. km. While China intends on curbing over-borrowing to lower investments in the cement, steel and real-estate sectors, the continued development of gold exploration in the Heilongjiang province is "business as usual." China, which is the fourth largest gold producer in the world, sees precious metals as an under developed resource in a time when cash constraints in its banking sector need more backing, putting companies like Savoy in an even better bargaining position now then before the Chinese government announced plans to curb over-borrowing. Gold -- Sharefin, 08:20:04 05/05/04 Wed Newmont Earnings Dip; Focus Internal Vs Purchases VANCOUVER, British Columbia (Reuters) - Newmont Mining Corp. reported a bigger than expected drop in first quarter earnings on Wednesday as mining costs at its Nevada operations helped take a 26 percent bite out of the bottom line of the world's biggest gold producer. ~~~ Lassonde, who is regarded by the market as something of a gold guru, said Newmont was sticking to its earlier forecast that bullion will remain strong this year, trading between $380 and $450 an ounce as the U.S. dollar stays weak. Gold tends to strengthen when the dollar falls as the precious metals get cheaper to buy with other currencies. Gold -- Sharefin, 08:17:55 05/05/04 Wed 'Can significantly affect the long-term path of the U.S. economy' Alan Greenspan, chairman of the US Federal Reserve, warned on Tuesday that the "dramatic" rise of oil and gas futures was "an economic event that can significantly affect the long-term path of the US economy". In the latest of a series of cautions from economic policymakers, Mr Greenspan said the rise in six-year oil and gas futures was "almost surely going to affect the growth of oil and gas consumption in the US and the nature of the capital stock investments currently under contemplation". The benchmark Brent crude futures on Tuesday hit their highest level since the Iraq war when it reached $34.33 a barrel. US gasoline futures hit a lifetime record of $1.2040 a gallon. Gold -- Sharefin, 08:16:17 05/05/04 Wed Russia gold-digging in Japan MOSCOW - For decades, Russia and Japan have been divided by their territorial dispute over the Kuril Islands, and the still unsigned post-World War II peace treaty. Now, yet another contentious issue has been raised that could further complicate bilateral ties: a dispute over gold worth billions of dollars that belonged to Russia's last tsar. Russia plans to initiate discussions with Japan on the return of the tsarist gold that allegedly ended up in Tokyo almost a century ago, the Foreign Ministry says. Russia has made "certain inquiries to the Japanese side" on the issue, ministry spokesman Alexander Yakovenko announced. The issue of the gold "is not a matter of diplomatic negotiations between our countries for now. But this does not mean the Russian Foreign Ministry is ignoring the issue," Yakovenko said. The gold was shipped to Japan by anti-Bolshevik leader Admiral Alexander Kolchak in 1920. Russian researcher Vladlen Sirotkin, in his four books, argues that the gold was given to Japan in exchange for weapons, but Kolchak never received any military hardware. Sirotkin estimates that, coupled with interest for the time the gold has been in Japan, it would now be worth US$80 billion. He claims that the gold is now held at Japan's Bank of Tokyo Mitsubishi. Sirotkin claims that Japan seized 200 tons of Kolchak's gold, as well as "stole" 5.5 tons from the private coffers of the last tsar, Nikolas II, while it was in transit to Britain in March 1917. Sirotkin now argues that a "package solution" is needed for both territorial claims and the gold dispute between the countries. Tokyo acquired the islands in dispute - the 10,360 square kilometers of Etorofu, Kunashiri, Shikotan and the Habomai islets (Kurils) - in a treaty with Russia in 1875. The Soviet Union took them back in the closing days of World War II, a move that Japan has protested ever since as illegal. Further, Moscow and Tokyo never signed a peace treaty at the end of World War II in 1945 because of Japan's claim over the four Kuril Islands. Russia has suggested the signing of a treaty before solving the territorial dispute, but Japan objects. In 1994, Russia unearthed documents testifying that Kolchak, who was executed by the Bolsheviks in 1920, had sent at least 22 boxes filled with gold ingots to Japan. However, a lack of solid evidence has prevented Russia from turning the matter into a big diplomatic row. Japan has not officially commented on the gold issue, although Russian media reports claim that Tokyo had allegedly acknowledged that $2.7 billion worth of the tsar's gold remained in Japan. Gold -- Sharefin, 08:14:44 05/05/04 Wed Australia's Sons Of Gwalia: 3Q Gold Output 109,328 Oz Australian gold and tantalum miner Sons Of Gwalia Ltd. (SGW.AU) said Wednesday its gold output fell to 109,328 ounces in the fiscal third quarter ended March 31, down from 136,823 oz a year before, due partly to the impact of problems at its Tarmoola open pit in Western Australia state. Gold -- Sharefin, 08:13:27 05/05/04 Wed India's gold production rises 20.76 percent India's gold production rose by 20.76 percent during the 2003-04 fiscal year to exceed target and reach 10,198.5 kg against 8,445.5 kg produced in the previous fiscal. The world's largest consumer and importer of gold, India had set a production target of 8,274 kg for 2003-04, according to a statement issued Tuesday by the ministry of mines. India's annual consumption of gold is around 800 tonnes. Gold -- Sharefin, 08:11:40 05/05/04 Wed Randgold Resources Ltd said its mining profits fell in the quarter to March 2004 because of lower production at its Morila joint venture in Mali. Gold -- Sharefin, 08:09:44 05/05/04 Wed Lihir Gold takes a pasting Papua New Guinea gold miner Lihir Gold Ltd's shares took a pasting after it reported quarterly gold production that was hurt by plant shutdown and technical failure. Lihir reported gold production of 112,336 ounces for the three months to March 31, 2004 - 14.3 per cent down on the 131,050 ounces produced in the previous corresponding quarter. Gold -- Sharefin, 08:07:21 05/05/04 Wed US Mint ups coin set prices due to metal cost rise Coin collectors, get ready to pay up. The U.S. Mint has increased the price for collector proof sets and American Eagle coins between $2 and $6 to reflect higher costs for silver, zinc, nickel and copper. The price hike marks the first time since 1998 that the Mint has boosted prices for collectibles. Copper prices have risen 76 percent, nickel 67 percent and zinc 55 percent since early 2003, according to Mint figures. ~~~ Metals prices have surged to their highest levels in several years due to a weak dollar, shrinking inventories and a construction boom in China that has boosted demand. ~~~ The amount of raw material purchased by the Mint in fiscal 2004 is forecast to increase 11 percent to 113.6 million pounds, reflecting an improving U.S. economy and higher spending by consumers. Gold -- Sharefin, 08:03:29 05/05/04 Wed Nevada produces 7.3 million ounces of gold in 2003 Nevada mines produced 7.3 million ounces of gold in 2003, a decrease of about 5 percent from the previous year, the state Division of Minerals reported. ~~~ Nevada remains the nation's top gold producer and is third in the world behind South Africa and Australia. Nevada also led the nation in silver production in 2003 with 10.2 million ounces, down 24 percent from the previous year. Gold -- Sharefin, 08:01:33 05/05/04 Wed Not out of the woods yet The U.S. stock market has staged an impressive cyclical rally from its March, 2003, low, but fund manager Eric Sprott isn't convinced that the bear has been banished. "We still believe that the odds favour the continuation of a secular bear market," said the president of Toronto-based Sprott Asset Management Inc. "There are two things that kill stock markets: Interest rates going up and oil prices going up, and we have them both," he said. Oil prices have risen significantly and interest rates are starting to break their "almost 20-year downtrend." But it isn't just those factors that lead him to believe that the market will go back into a secular bear phase. It is the imbalances in the system that worry him, particularly those that arose from the fact that the U.S. Federal Reserve Board and the U.S. government "threw everything" in terms of stimulus at the economy to help it and yet they "didn't get that great of an economic recovery." The stimulus included dividend tax credits, a falling U.S. dollar, tax cuts, changes in pension legislation and uncommonly low interest rates. And after all that stimulus, "everybody ultimately is probably worse off than before" in the sense that both individuals and the government have taken on more debt and the budgetary deficit has worsened, he said. ~~~ He sees gold and gold stocks continuing to be among the better ways to play this market. He is also drawn to energy issues. He thinks world oil production may be peaking at the same time as the demand side is "going crazy." ~~~ Silver. The precious metal has been one of his favourite buys recently. "We think that demand is far in excess of supply and it is only a matter of time that there will be physical manifestations of a shortage of silver," he said. He expects the shortage, when it materializes, will be a major one, and there could even be a short squeeze on silver because production has seriously lagged demand for well over 15 years. U.S. and Chinese government stockpiles filled the gap, but they have now been depleted, he said. He expects the price of silver, which closed Friday on the New York Mercantile Exchange at $6.16 (U.S.) an ounce, will go a lot higher over time. "I believe that silver is going into the double digits," he said, adding that he wouldn't be surprised if the price got to $20. Gold -- Sharefin, 07:58:47 05/05/04 Wed Silver imports to resume After a break of about four months, silver imports into the country are slated to resume, say reliable sources in the bullion trade. This follows a small price advantage to importers as the fall in domestic prices has not been as sharp as the decline in international prices. According to these sources, some 10 containers amounting to 200 tonnes were booked for import last week. These consignments are expected to arrive in the next 10 to 15 days at Kandla and Nhava Sheva (Mumbai) ports. Majority of the importers are banks, the sources added. Gold -- Sharefin, 07:54:39 05/05/04 Wed Norilsk takes aim at rest of Gold Fields Russia's Norilsk Nickel, which recently bought a 20% stake in Gold Fields for R7,6bn, has signalled its desire to take over the South African company, which is the world's fourth-biggest gold producer. Gold -- Sharefin, 07:53:29 05/05/04 Wed Harmony, AngloGold, Gold Fields May Cut Costs as Profits Fall Harmony Gold Mining Co., AngloGold Ltd. and Gold Fields Inc., three of the world's five largest gold producers, may say in the next two weeks that a yearlong profit slump is forcing them to cut jobs and close mines, said investors including Ian Troost of Metropolitan Asset Managers Ltd. At AngloGold and Gold Fields, earnings before one-time items and goodwill costs probably fell last quarter from the previous three months, four analysts surveyed by Bloomberg said. Harmony is expected to post its third straight loss on that basis. The rand has gained 76 percent against the U.S. dollar since 2001, slashing profits at the Johannesburg-based companies. South African mines pay most costs in local currency and sell metal for dollars. Harmony, the top producer of South African gold, said this month it may close six mine shafts accounting for 6 percent of output and employing 5,000 workers. Gold -- Sharefin, 07:51:54 05/05/04 Wed Say, Let's Sell Some Gold Europe's governments are eyeing their stocks as a quick source of revenue Deep under the Bank of France's neoclassical headquarters in the heart of Paris is a huge vault known as "The Subterranean." Covering an area of one hectare, it contains more than 3,000 metric tons of gold, worth a staggering $36 billion at current market prices. That's roughly equivalent to 2% of France's gross domestic product, or more than half of this year's budget deficit. Yet the hoard, which is a little over half of the central bank's total reserves, which includes euros and dollars, doesn't earn a single euro in interest and costs a fortune to guard around the clock. No wonder France's cash-strapped government is eager to get its hands on it. "[Is] it natural and normal that these reserves generate no revenue?" asked new Finance Minister Nicolas Sarkozy in an address to the French Parliament on Apr. 14. That's becoming a familiar refrain across the Continent as politicians eye central bank gold stocks totaling 12,800 tons and worth $153 billion -- well above the 8,135 tons the U.S. Federal Reserve has stashed away in Fort Knox, Ky. European governments are eagerly proposing schemes to use proceeds from the sale of gold to fund everything from basic science research to paying down their ballooning national debts. French Prime Minister Jean-Pierre Raffarin proposed a gold-selling program in February to finance scientific research, under the slogan "today's gold for tomorrow's gold." German Chancellor Gerhard Schröder followed suit by suggesting that the Bundesbank consider selling some of its 3,440 tons. And Italian Finance Minister Giulio Tremonti is urging the Bank of Italy to reduce its 2,451-ton cache. ~~~ European central bankers, such as Bank of France chief Christian Noyer, have been quick to argue against major gold sell-offs. They contend that gold stocks could offset any potential shortage in the future and also serve as a reserve of last resort in case of a major crisis. Meanwhile, advocates of gold sales say governments should be allowed to tap these reserves to give their budgets a quick fix, especially at a time when gold prices are hovering around $400, the highest in nearly a decade. The temptation has proved too strong for a number of European central banks, which have already run down their gold stocks. The Bank of the Netherlands has sold 210 tons since September, 1999, netting about $2 billion, and plans to off-load an additional 59 tons this year. The Dutch still have a 777-ton hoard. In the same period, the Bank of England has divested 345 tons, raising around $3.3 billion -- more than half the total it had in 1999. Most spectacularly, the Swiss National Bank, once one of the world's most dedicated gold bugs, has almost completed a program, started in May, 2000, to ditch 1,300 tons of gold, leaving only 1,462 tons. All told, it expects to raise nearly $16 billion and hand it over to the government. "We no longer need so much gold for monetary policy purposes," says a bank official. Continental Europe's largest economies have been more reluctant to empty their gold vaults. The Bank of France hasn't dipped into its stash since 1969, when the franc was reeling in the wake of the 1968 riots. The Bundesbank has sold only 29 tons in recent years. And ultraconservative Bank of Italy hasn't parted with a single ounce since 1945. The Europeans built up the bulk of their massive gold reserves in the 1960s when most countries ran huge balance-of-payments surpluses with the U.S. The surplus dollars were converted into gold and used as reserves to support their national currencies on the foreign exchange markets. But with the launch of the euro, national central banks no longer need such large reserves. The European Central Bank has gold reserves totaling 766.9 tons, worth about $9.25 billion, which were supplied by its members' national central banks.  Gold -- Sharefin, 07:39:20 05/05/04 Wed Korea's imports of gold more than doubled in the first quarter of the year Korea's imports of gold more than doubled in the first quarter of the year, as importers and manufacturers took advantage of tax breaks and rising prices of the metal, a trade group said yesterday. Gold imports reached a record-high $1.57 billion between January and March, a 229.7 percent increase from the same period last year, according to the Korea International Trade Association. The amount surpasses the previous record of $14.2 billion registered in 1997. Gold became the nation's No. 4 import item following crude oil, semiconductors and natural gas, the trade group said. The group attributes the increase to a two-year tax exemption on transactions of gold products which have been in effect since July last year. Also, domestic gold prices have risen about 13 percent over the past year. Meanwhile, Korea's exports of gold products rose about 295 percent to reach $1.47 billion during the same period. Gold -- Sharefin, 07:35:57 05/05/04 Wed The New Central Bank Gold Agreement - pdf file On Monday, 8 th March 2004, the European Central Bank and 14 other central banks announced the renewal of the Central Bank Gold Agreement (CBGA). The new agreement's terms are similar to the one due to expire in September. For instance, the new agreement even maintains the cap on lending and derivatives activity at levels lower or equal to the ones “prevailing at the date of the signature of the previous agreement”. Indeed, the only substantive change to the existing CBGA is that the maximum level of sales has been increased from 400 to up to 500 tonnes per year, with an overall total of no more than 2,500 tonnes permitted during the five-year life of the new agreement. Although a little towards the upper end of expectations, the increase in the sales quota is no great surprise given the far stronger market today than was the case in the third quarter of 1999. Since September 1999 gold has risen by a massive 50% in US dollar terms and, perhaps more significantly, is no less than 25% higher in euros. It is probable that policymakers would have drawn the conclusion – correctly in our view – that the market could absorb an additional quantity of central bank gold. The relative lack of price response to news of the CBGA's renewal and its terms would also seem to confirm this supposition. What is a good deal less clear, is precisely which countries will dispose of sufficient gold in order for 2,500 tonnes to be sold by the signatories over the five year period from September 2004. Prior to the first CBGA, Switzerland and the United Kingdom had already announced their intentions to sell large shares of their respective gold reserves. This time round, the Swiss will have a residual 130 tonnes to sell and the United Kingdom is out of the picture altogether (indeed the UK Treasury in not signing up to the second CBGA has explicitly ruled out any further sales). Germany is Europe's largest single holder of gold reserves and the Bundesbank has announced its intention to sell 600 tonnes over the life of the new agreement – a relatively small quantity in the light of its more than 3,400 tonnes of reserves. According to a statement made by the Netherlands central bank in February, it will have 65 tonnes left over to sell from September 2004 onwards from its original 300 tonne target announced in December 1999. At this point, the Netherlands would still hold around 712 tonnes and we suspect that some of this could be released for sale under the second CBGA. Similarly, Austria, which sold 90 tonnes over the first three years of the current CBGA, indicated on 20 th February this year that they would consider further reducing their gold holdings, which currently stand at 318 tonnes. The total level of sales by Germany, Switzerland and, probably Austria and the Netherlands, are however, not going to be sufficient to reach the 2,500 tonne five-year limit that has just been established under the second CBGA. It would seem for that to occur France (3,025 tonnes) and/or Italy (2,452 tonnes) would have to change policy and initiate gold sales programmes. This is because excluding these two countries' holdings and those of Germany, Switzerland and the ECB itself, the other ten signatories' aggregate gold reserves amount to only some 2,800 tonnes. Although arithmetically possible, it is highly improbable that, in practice, close to two-thirds of this quantity would be mobilised for sale in the five years from September 2004. Of course, the other intriguing and alternative possibility is that sales will fall short of the 2,500 tonnes limit. This would seem to us an unlikely but not impossible outcome given prevailing attitudes in Paris and Rome. Fiat vs Gold -- Sharefin, 07:33:34 05/05/04 Wed World can't afford dollar revival; good for gold The US dollar's appreciation in the wake of Fed chairman Alan Greenspan's suggestion that interest rate increases are more likely has spooked the gold price, but the world cannot afford a more expensive reserve currency. That's the view of Canadian econometrician, Dr Martin Murenbeeld, who addressed the European Gold Forum ongoing in Zurich. The US dollar remains one of the most critical factors in determining gold's direction so investors are anxious to know whether its improvement in recent days is merely a correction, or a more fundamental recovery. ~~~ Murenbeeld thinks governments would rather print money to pay the bills than face the backlash if they renege on promises, cut benefits or try to raise taxes. In that scenario gold gains rapidly against all major currencies as governments try to inflate their debts away. Fiat -- Sharefin, 07:31:19 05/05/04 Wed IMF Warnings On US Current Acct Gap Prompt Fed Rebuttal WASHINGTON (Dow Jones)--Economic warnings from the International Monetary Fund may send policy-makers in many countries into a swoon, but the agency seldom gets a rise out of the U.S. Federal Reserve: For years, the world's most powerful central bank has systematically ignored IMF criticism of U.S. policies. Not anymore. The IMF's latest alarms about the U.S. current account deficit and the danger it poses to global economic stability on Friday spurred a top Fed policy-maker to fire back. As the IMF prepared for a weekend meeting of economic policy-makers from its 184 member nations, Fed Vice Chairman Roger Ferguson told a senior IMF official in public that the prospects for the U.S. economy are "not as apocalyptic as the ones you imagine." That exchange - at a conference organized by the European Institute - occurred after an IMF official, Flemming Larsen, directly chided Ferguson for being too optimistic about the U.S. outlook. "I would suggest that the outcome may be less benign than Roger seems to imply, and perhaps these concerns should be given a greater deal of attention in policy-making both in the United States and outside the United States," said Larsen, the top IMF official in Europe. Gold -- Sharefin, 07:23:44 05/05/04 Wed The Myth of the Gold Standard "A gold standard isn't worth the paper it's written on." ~ Yogi Berra Gold -- Sharefin, 07:19:27 05/05/04 Wed Gold is Shining Again It is difficult to argue with gold. To men everywhere, gold is a desirable economic object. It can be used for the manufacture of jewelry and ornaments. It is a corrosion-resistant element, the most malleable and ductile metal, ideal for plated coating on a wide variety of electrical and mechanical products. It is a good thermal and electrical conductor. It is durable and storable, can be easily hidden from partakers and predators, and readily shipped to other places. Gold is very marketable. In fact, gold may be the most marketable commodity around the globe. The value of gold is determined by the same considerations as that of all other economic goods. Individuals give it value according to the enjoyment and satisfaction they expect to get from its possession. Economists explain this fact in terms of utility and scarcity. Value rises or falls in accordance with the utility which people ascribe to an object and the scarcity they perceive. Like that of any other economic good, the value of gold changes according to changing perceptions and situations. This must be emphasized because there are many goldphiles who wax eloquent about the eternal, immovable value of gold. They obviously have never experienced, and cannot think of, a situation in which basic essentials that sustain or safeguard human life do soar in value while that of gold in any form plummets. In fact, in desperate situations people may prefer a pound of bread to an ounce of gold, essential clothing and shelter to a pound of gold and, when their lives are at risk, their lives to a ton of gold. Gold -- Sharefin, 07:17:10 05/05/04 Wed China's gold market posts shining growth For most Chinese, gold means more than a durable jewellery-making material and investment vehicle. The lustrous, yellowish precious metal has long been a symbol of wealth, elegance, royalty and power. "Chinese people simply feel gold is better when shopping for jewellery or when considering making investments,?said Zhang Yongtao, deputy secretary-general of the China Gold Association. The "gold-is-better?mindset is the main reason for China's gigantic demand for gold, and the reason overseas producers are jumping into China's lucrative, fast-growing market, he said. China's gold market is expected to experience robust growth this year, as international gold prices are rising and the country's top regulators are planning to slash import tariffs and the consumption tax on gold merchandise, industry experts said. China is poised to lower, "by a large margin,?the gold import tax rate from 38 per cent, as the country is accelerating the opening of its gold market, Zhang told China Business Weekly. ~~~ The People's Bank of China (PBOC), the nation's central bank, lifted, in March, licensing restrictions related to gold processing, production, wholesaling and retailing. PBOC officials said local and joint-venture gold jewellery makers no longer have to obtain permits from the central bank to start gold-related businesses. China's top taxation authorities are considering eliminating the 5-per-cent consumption tax on gold ornaments, he said. ~~~ Anglo American Plc, the London-based mining giant, reported, earlier this year, the company's combined sales of platinum, gold and diamonds in China were worth approximately US$1 billion last year. The firm predicted surging demand in China this year. ~~~ China's gold output last year reached a record 200.6 tons. That was more than double the country's gold output, of 100 tons, in 1995. China last year became the world's fourth-largest gold consumption market, even though the country's per capita consumption of the precious metal was 0.16 gram, much less than the world's average of 0.7 gram. Gold -- Sharefin, 07:13:42 05/05/04 Wed Barrick Forgoes High Gold Price to Chop Hedge Book Barrick Gold Corp. sacrificed chunkier first-quarter earnings at a time of strong gold prices to stick to a promise to gut its unpopular hedge book, figures showed on Thursday. The world's third biggest gold producer slashed its hedge position by a bigger-than-expected 800,000 ounces by opting to sell nearly two-thirds of its quarterly output in fixed-price contracts at an average of $382 an ounce, 6 percent lower than what it could have earned on the market. ~~~ In a surprise U-turn, Barrick last year pledged to wipe out its hedge contracts over time and cut at least 1.5 million ounces in 2004. At the end of the quarter, Barrick still had 14.7 million ounces of gold sold forward, equal to 17 percent of its unmined reserves. At contracted prices, the position is worth $1.8 billion less than if the gold were sold into the market. ~~~ The company posted a 10 percent fall in earnings to $26 million, or 5 cents a share, partly because it lost $15 million on a silver derivatives position as the silver price rose. Gold -- Sharefin, 07:10:40 05/05/04 Wed Russia wants talks with Japan on "tsarist gold" MOSCOW, April 22 (Reuters) - Russia wants to start talks with Japan to return billions of dollars worth of the last tsar's gold which ended up in a Tokyo bank in the chaotic years of the Russian Civil War, the Foreign Ministry said on Thursday. The gold, shipped to Japan by "white army" commander Admiral Alexander Kolchak in the closing days of anti-Bolshevik resistance, remains an irritant to Moscow's warming relations with Tokyo along with a territorial dispute in the far east. Gold -- Sharefin, 07:08:17 05/05/04 Wed Investor gurus see legs on commodities bull market Commodity prices have come off the boil recently, but that is not stopping some investors from saying the past year's rally is only the start of a prolonged bull market. To justify their confidence, they point to apparently insatiable demand from countries such as China and India, whose economies continue to grow at a red hot pace, and a lack of investment in the production of new energy sources and other raw materials. And the believers are not just Johnny-come-latelies to the party, but those who extolled the virtues of metals and grains several years ago, when commodities had been out of fashion for a generation and the only game in town was stocks and bonds. "Bull markets in commodities usually will last 15 years to 20 years when they come around and this one has only been going on for five, 5 1/2 years," said Jim Rogers, who was a co-founder of the Quantum Fund with George Soros. "So it's got another 10 to 15 years ahead of it." ~~~ Howard J. Ruff, famed for tipping gold a buy when it traded for less than $180 an ounce in 1976 and then calling the rally over five years later when it was at $750 an ounce, is again bullish on the metal after a two-decade bear stance. Ruff favors silver over gold and started buying bags of silver coins two months ago. But gold will surpass $1,000 an ounce, he says. Since the stock market bubble, the Fed has sharply inflated the dollar's value and created real estate inflation, he said. That money will eventually flow into commodities, especially gold. "It will be the greatest bull market in history because we never, even during the peak of the bull market of the 1970s, we did not inflate the currency at anywhere near the rate we're doing it now," said Ruff. Fiat -- Sharefin, 06:59:41 05/05/04 Wed Greenspan Tells Congress Rates Will Rise Federal Reserve Chairman Alan Greenspan told Congress on Wednesday that America's economic recovery has good momentum and that low, short-term interest rates will have to rise at some point, though he didn't say when. Gold -- Sharefin, 06:57:35 05/05/04 Wed Trial of former Bre-X geologist to resume Dec 6 VANCOUVER, British Columbia (Reuters) - The Ontario Securities Commission said Monday the insider trading trial of former Bre-X Minerals geologist John Felderhof will resume Dec. 6 for two weeks. ~~~ Felderhof faces charges related to the massive Bre-X gold fraud of 1997, the biggest corporate swindle in Canadian history. Investors lost billions of dollars when it was revealed the Calgary mining company's claim of a spectacular gold find in Indonesia was a scam. The one-time penny stock had soared as high as C$200 a share before collapsing to nothing. Gold -- Sharefin, 06:55:01 05/05/04 Wed Why Is Europe Now Breaking Into Its Gold Vaults Gold has always attracted its fair share of eccentrics. More than any other commodity in the financial markets, it has provided a haven for oddballs and conspiracy theorists. Right now, they can have a field day. Something strange has been happening in the gold market. Europe looks to be bailing out of the metal as gold prices soar and politicians squabble with central bankers over how to make use of the proceeds. In France, the new finance minister, Nicolas Sarkozy, is arguing for the Bank of France to sell some of its gold. A hundred metric tons of gold is worth about 1 billion euros ($1.2 billion), which would yield from 35 million to 40 million euros a year if the proceeds from the gold's sale were invested in assets earning interest, Sarkozy told lawmakers in France's lower house of parliament last week. The bank's governor, Christian Noyer, has already said he will decide before October whether to start selling as much as 100 tons of gold annually, and invest the money instead in assets yielding interest, according to the French newspaper Le Parisien. It sounds like Sarkozy has already made up his mind. In Germany, Ernst Welteke resigned as Bundesbank president on Friday after being embroiled in a row over a hotel bill in Berlin. Behind that may be a disagreement about Germany's gold reserves. Welteke's son, Hans, has claimed his father argued with German Finance Minister Hans Eichel over how to use the money raised from selling some of the country's gold reserves. This year, Welteke said he won an option to sell 600 tons of gold or as much as 20 percent of the country's reserves over five years. The Bundesbank has disposed of only 29 tons of gold coins since 1999. ~~~ With so much gold coming into the market, N.M. Rothschild & Sons Ltd., the world's second-largest closely held investment bank, may even regret the decision announced last week to pull out of commodities trading and withdraw from the London gold fix, the price-setting institution it hosted for 84 years. If both France and Germany start selling gold, it may have a big impact on the market. According to World Gold Council figures, both countries are among the largest holders of gold in the world. ~~~ The gold holdings of the big European countries have been remarkably stable over the past 30 years. Take a look at the French and German figures. According to the World Gold Council, the French held 3,139 tons in 1974 and Germany had 3,658 tons. Since they've kept it for so long, why are European countries looking to get rid of their gold now? Would it be wise? Three Obvious Reasons There are three obvious reasons why Europe is thinking hard about emptying its gold vaults right now. And one subtle one. ~~~ One, the gold price is high Two, unless you melt it down for rings, it's useless. Three, some EU countries need the money. ~~~ There is another more subtle reason: the euro. Rationally, there is no special reason to have vaults full of gold, certainly not to the extent the European national central banks still do. Gold represents 46.5 percent of Germany's total foreign reserves, and more than half of France's, according to the World Gold Council. Why so much? The Swedes have only 11 percent of their reserves in gold, and the Irish just 1.7 percent -- and both have strong economies. When euro-region countries had their own national currencies, there was a temptation to keep some gold in reserve. It was a financial security blanket. You never know when the world might be plunged into chaos. You might need that gold to support your currency. The euro has changed that. France and Germany, and the rest of the euro nations, no longer have to defend a currency on their own. And if the euro were to collapse during a crisis, a few thousand tons of gold here or there probably wouldn't make much difference. The creation of the euro has severed the emotional ties between Europe's central banks and their gold vaults. They probably can't be restored now -- and the market should expect to see a lot more of the metal sold under future accords. ---- What they have got left may prove far less than what they imagine they have. Fiat -- Sharefin, 06:49:41 05/05/04 Wed Warning by IMF on US current account deficit With the global recovery strengthening, as well as increasing its growth forecasts, the International Monetary Fund has stepped up its warnings on the need for a global effort to reduce economic imbalances. The most significant risk to the brighter economic outlook, the fund said in its latest World Economic Outlook, was in "achieving an orderly resolution of global imbalances, notably the large US current account deficit and surpluses elsewhere". History suggests an orderly adjustment of the US current account deficit would be associated with a slowdown in gross domestic product growth, as national savings rise and investment falls. But the IMF warned: "A more disorderly adjustment - including abrupt movements in exchange rates - could not be ruled out. "This would have significantly more serious consequences, with potential spillovers into other financial markets, including through higher US interest rates." Gold -- Sharefin, 06:47:02 05/05/04 Wed Newmont, Barrick Turn to Exploring, Not Mergers, for More Gold Newmont Mining Corp., the world's biggest gold miner, and its competitors spent $27 billion on acquisitions in the past six years. Now they're turning to exploration after soaring share prices made potential targets too expensive. The value of gold industry mergers dropped 38 percent last year to $4.1 billion, according to data compiled by Bloomberg. Companies spent less on acquisitions as a 19.5 percent surge in gold prices pushed the Philadelphia Stock Exchange's index of the world's top gold producers to its biggest gain in a decade. Newmont, based in Denver, plans to step up exploration by more than a third this year to boost reserves and take advantage of gold prices that this month rose to a 15-year high. In Australia, the world's third-biggest gold producer, the jump in exploration is leading to a shortage of equipment used to find new deposits. ``It's at the stage where you can't get a drill rig on the continent,'' ~~~ ``With gold prices where they are and stock prices higher, people don't see a lot of value in the acquisition front,'' John Dow, managing director of Newmont's Australian unit, said in an interview. ``We have to get out there and find new reserves.'' Newmont in 2002 spent $6 billion buying Normandy Mining Ltd. and Franco-Nevada Mining Corp. to become the world's biggest gold miner. The company, which plans to spend as much as $110 million looking for gold in 2004, needs to find 7 million ounces of reserves a year to replace the gold it digs out of the ground. Australian gold exploration fell for five straight years to A$331.3 million in 2001- 2002, as gold prices sank to a 20-year low in August 1999, discouraging spending. Global mine output dropped in 2002 for the first time since 1994, according to researcher GFMS Ltd. in London. Price of Neglect ``In the five-year period when exploration was depressed there was not much gold found and there's not much new gold in the pipeline,'' Newmont's Dow said. ``We're paying the price for neglect. I think you will see a strong increase in exploration.'' Gold -- Sharefin, 06:43:02 05/05/04 Wed Harmony, unionists form task force over job losses In an unprecedented move, Harmony Gold and three major unions on Friday agreed to set up a joint task force to examine the closure of up to six shafts at the country's third-biggest gold miner. Gold -- Sharefin, 06:40:52 05/05/04 Wed Sierra Magazine Story Reveals U.S. Mining Company's Support of Terrorists Linked to Al-Qaeda The Sierra Club announced today that an expose will appear in the May/June issue of Sierra, the official magazine of the Sierra Club, revealing how a Denver-based mining company secretly paid off Al-Qaeda- linked terrorists under the auspices of "international security." The story also shows how the Bush administration's Homeland Security and Justice Departments turned a blind eye when first informed that Denver-based Echo Bay Mining Co. paid millions of dollars to the international terrorist group Abu Sayaff and other terror groups in the Philippines in exchange for protection of its gold-mining operations. Gold -- Sharefin, 06:39:30 05/05/04 Wed French about-face signals historic change for the yellow metal PARIS (AP) - The hoard is rich enough to make James Bond villain Goldfinger drool. More than 3,000 tonnes of gold, the world's fourth biggest holding and a symbol of French independence, doing nothing in vaults under Paris's streets. It's the doing nothing part that rankles France's frenetic new Finance Minister Nicolas Sarkozy. In a radical move, he is mulling selling a chunk of the Bank of France's treasure to help plug huge holes in French public finances. A gush of French gold onto world markets will not likely result in cheaper wedding rings or jewelry in the short term. But such a sale by a country that long coveted gold as a counterweight to the U.S. dollar would, analysts say, underscore the cooling of a love affair with the precious yellow metal. Gold -- Sharefin, 06:36:23 05/05/04 Wed Central Bank to Unite Dollar and Euro The Russian Central Bank will soon start quoting the ruble against a dollar/euro basket. ~~~ The first stage of the introduction of a new index will see European currency's share in the basket at 10-20 percent. But in the future the basket will be split evenly between the euro and the U.S. dollar. Gold -- Sharefin, 06:34:22 05/05/04 Wed Paris insists no decision taken on gold sales The French finance ministry said Tuesday it was just thinking about using some of the country's gold for future investments or to reduce debt after press reports said talks could begin this week with the Bank of France. Gold -- Sharefin, 06:27:32 05/05/04 Wed New Book From Gold Guru Howard J. Ruff Says Gold to Surge Past $1,000/oz. With gold and silver markets surging again, a new generation of Americans is about to re-discover publishing phenomenon Howard J. Ruff, and why he says precious metals and mining stocks are now headed for "undreamed of heights." Ruff, who is arguably the nation's most famous gold bug of the last big gold cycle cresting in 1981, is back on the gold scene for the first time in 23 years with a major new book predicting that gold is now headed "a lot higher" than $1,000/oz. Ruff's earlier huge best-seller, HOW TO PROSPER DURING THE COMING BAD YEARS, sold three million copies, and contributed to his becoming a major factor in creating a broad American consciousness about the investment merits of gold and silver. Ruff first issued a now-famous precious metals buy signal in 1976 when gold was under $180/oz. and silver traded at less than $2/oz. In 1981, three years following the publication of HOW TO PROSPER, he issued a likewise-famous sell signal on gold at $750/oz. and silver at $35/oz. and subsequently stayed bearish on gold and silver for more than two decades. SAFELY PROSPEROUS OR REALLY RICH for the first time reverses this stance, marking Ruff's re-emergence in his previous popular advisory role as "Main Street's Answer to Wall Street" for millions of ordinary Americans. "I'm now super bullish on gold again," says Ruff. "The dollar is sinking, and the Fed is blowing up the money supply (inflation) at the highest rate in history -- even more than they did in the mid and late Seventies -- to stop the incipient depression that began in March 2000. Everything is now in place for a multi-year gold explosion to undreamed of heights. "How high will gold go? $850? $1,000? No, a lot higher than that ... Gold, silver and gold-mining stocks will go to heights that are difficult to imagine today, and I'm going to be right in the middle of it." Gold -- Sharefin, 06:21:01 05/05/04 Wed The British rush for Russian gold GOLD fever is gripping the City, but instead of drill rigs heading for Kalgoorlie or Anchorage, the new destination is far-eastern Russia. Two AIM-listed stocks, Highland Gold Mining and Peter Hambro Mining (PHM), are already among Russia's biggest ten gold producers. And there are others waiting in the wings. ~~~ “You can buy gold assets in Russia with established infrastructure still for peanuts,” James Picton, a mining analyst at WH Ireland, said. Peter Hambro, who first invested in Russia a decade ago, said: “I am amazed it's taken this long for people to realise what a great place it is to invest in.” The world's global miners are slowly warming to the hitherto off-limits region. Anglo American, the FTSE 100 mining house, intends to open an office in Moscow this year. Barrick Gold, the Canadian gold giant, owns 10 per cent of Highland Gold. Last month Rio Tinto signed a joint venture agreement with PHM to explore for gold. It is Rio Tinto's first deliberate move into Russia. While the world's major gold producers, wary of political and legislative risks in Russia, have been slow to move, the door has opened for a host of smaller companies to make the most of the rich pickings. Gold -- Sharefin, 06:18:43 05/05/04 Wed Japan may need to diversify reserves with more gold TOKYO: Japan seems reluctant to boost its gold holdings as a way of diversifying its massive external reserves, but Tokyo may have to reconsider its stance in the future, with its reserves heavily overweight in US Treasuries. US Treasuries are seen as among the world's most liquid and safest sovereign securities, but financial and commodities analysts say it may be dangerous to stick to one brand, especially the bond of a country with towering twin deficits. “We have to say that concentrating in one thing (US Treasuries) is not healthy and if the issue of diversification is raised then increasing gold should be considered,” said Tatsuo Kageyama, a market analyst at Kanetsu Asset Management. “At present Japan is not considering increasing gold, but debate about diversification should re-emerge over time and it may come to a point where Japan has to think about it seriously.” Japan's latest reserves figures showed a record $826.577 billion at the end of March. The reserves have nearly quadrupled in the last five years. Japan has been the world's biggest holder of external reserves since October 1999, having nearly twice as much as number two China, which held about $426.4 billion as of November. The Ministry of Finance data showed Japan's gold holdings at just 1.3 percent of the total reserves, with 24.60 million ounces or 765.2 tonnes — the lowest among industrialised nations with the exception of Canada and Britain. On Thursday, Finance Minister Sadakazu Tanigaki said he did not think it was necessary for Japan to boost the amount of gold it held in its external reserves. “I'm aware of arguments about the need to diversify our foreign exchange reserves away from US assets, but I don't agree with calls for us to hold more gold. Some diversification may be necessary, but I don't think Japan needs to hold more gold,” he said in a speech to foreign correspondents in Tokyo. Hiroshi Watanabe, head of the MOF's international bureau, separately told reporters that it was not appropriate for Japan to discuss gold purchases without a review of the framework on global currency policy. In the early 1970s many industrialised nations agreed to reduce gold holdings and the framework for that agreement still existed, Watanabe said. Japan last increased its gold reserves in May 2001, when it raised the holdings to 24.6 million ounces from 24.55 million ounces. Yen status: Japan does not disclose details of the breakdown of currencies in the reserves, but its holdings of foreign securities and deposits, about 98 percent of the total, are widely believed to be held in US dollars. “From the standpoint of hedging, Japan should be thinking about increasing its gold reserves,” Kanetsu's Kageyama said. Analysts also said that adding gold to its reserves could strengthen the status of the yen. “In recent years, China has increased its reserves of gold... while Japan has kept gold reserves steady,” said Akio Shibata, chief economist at Marubeni Research Institute. “China is doing that to raise the credibility of the yuan. In Japan, the reserves held in dollars are simply too big.” Gold -- Sharefin, 06:16:54 05/05/04 Wed UAE sells remaining gold reserves for higher price The UAE has taken advantage of a surge in gold prices late last year to sell its remaining gold reserves, and experts described it as a wise investment measure. The move nearly five months ago was the latest in a series of sales of gold reserves by the Central Bank as part of a strategy intended to diversify its investment portfolio, make more profits, and offset any decline in return from low interest rates. ~~~ The UAE was among 10 Arab countries that have maintained high gold reserves despite a recent decision by European central banks to start selling 500 tonnes of their gold every year provided the total amount does not exceed 2,500 tonnes until 2009. At the end of last year, the combined Arab gold reserves were estimated at around 20 million ounces, of which 9.2 million ounces were controlled by Lebanon alone. The surge in gold prices lifted the value of the Arab reserves from only $5.8 billion at the end of 2001 to $8.7 billion at the end of last year. "Lebanon alone gained a staggering $1.1 billion of that increase and this has maintained its position as having the highest ratio of gold to the population in the world," said Henry Azzam, chief executive of the Amman-based Jordanvest Bank. Gold -- Sharefin, 06:14:57 05/05/04 Wed Gold miner digs deeper into cyberspace Gold company Durban Roodepoort Deep (DRD) has upped its stake from 1.4% to 14% in Web gold trading portal GoldMoney with an investment of $1.8 million Fiat -- Sharefin, 06:13:37 05/05/04 Wed Surviving the Collapse: The New Bretton Woods Here is Mr. LaRouche's speech to the conference on "Surviving the Era of Imperialism," at the Monterrey Institute for Technological and Higher Studies (ITESM), in Monterrey, Nuevo León on March 20, 2004. What I shall do is describe the situation: We are now in the worst financial breakdown crisis in several centuries. It's now ongoing. The time that the collapse will occur, the full monetary collapse, is not certain. There's always the possibility, up to a certain point, of printing money to try to postpone a financial collapse. Right now, as you probably know, Japan and the United States are printing money at rates that have never been seen in history before, all for the purpose of trying to hold up the dollar until the election this coming November in the United States. I'm not sure that's going to work. As a matter of fact, I doubt that it's going to work. But we're in that crisis. And therefore, since this is an inevitable event, the crisis itself, the question becomes: How do we get out of it? And in the matter of forecasting: How can we know, whether we're going to succeed in getting out of it, or not? How do we know that certain method will work, or which will not work? Fiat vs Gold -- Sharefin, 06:11:34 05/05/04 Wed Schroeder vague on mechanics of Bundesbank gold sale plan German Chancellor Gerhard Schroeder reiterated on Monday support for a Bundesbank idea to sell gold to fund research and development but was vague on how the plan, which faces backbench opposition, could be realised. A finance ministry spokesman said it would be hard for the government to draw up legislation to turn the idea into reality until it was clear how much gold the Bundesbank could sell -- something that might not be clear for months. The Bundesbank has said it will seek to sell 600 tonnes of gold under a five-year sales agreement Periodic Ponzi Update PPU -- $hifty, 18:01:50 05/02/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,920.15 + Dow 10,225.57 = 12,145.72 divide by 2 = 6,072.86 Ponzi Down 188.44 from last week. Thanks for the link RossL Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 07:24:39 04/30/04 Fri Bill Murphy sez: "The cabal orchestrated their move to coincide with today's OTC option expiry in gold, which has far greater participation than that of the Comex... Just to make matters worse, the CBOT raised margins on min-gold last night by 77%, effective today. Silver went up about the same. No doubt it was timed with their attack on the precious metals." Gold -- Sharefin, 04:48:22 04/30/04 Fri Gold market changes its daily fix The London Gold Market yesterday announced changes to the twice daily "fixing" of the precious metal's price in the wake of investment bank NM Rothschild's withdrawal from the market. From next week the market's four remaining members have agreed to rotate the chairmanship of the fixing, a position that Rothschild's had held since 1919. ~~~ The changes bring to an end one of the City's oldest traditions and bring gold fixing into line with Silver and Platinum/Paladium fixes, which have already moved to telephone conference calls. Scotiabank will become the first new chairman, for a 12-month term. The other members are HSBC, Deutsche Bank and Societe Generale. Rothschild is selling its membership. The bank's decision to pull out affected around 40 jobs. Gold -- Sharefin, 21:01:25 04/26/04 Mon Gold and laser key to 3D circuits Physicists in Shanghai have developed a revolutionary new technique for building three-dimensional micro-circuits, using gold oxide, chunks of glass and some high powered lasers to create a kind of 3D dot-matrix transistor-printer. ~~~ The team from the Shanghai Institute of Optics and Fine Mechanics has approached the problem in a totally new way, according to Nature. It has found a way to draw circuits by firing a laser directly into glass blocks enriched with gold oxide at one part per 10,000. They fire short laser pulses at the block to dislodge individual gold atoms. Once the block is heated to 550 ºC, the gold atoms coalesce into blobs inside the glass. So far the team has limited its efforts to sketching images in the blocks made up on millions of nanoscale golden globules. The next step is to use a slightly higher concentration of gold oxide. This, the researchers hope, will help to complete the circuits, as the blobs of gold run into one another. Lenny's Corner -- Sharefin, 09:24:17 04/26/04 Mon The ruff and tumble It would seem that the news reports indicate the Germany is closer to selling some of its gold reserves under the newly resigned Washington Accord. Gerhard Schroeder was quoted by Reuter's as offering tacit backing to a plan to use the proceeds of such sales to create a foundation for research and development in Germany. Of course, the government wants to just take the money raised and pay down the deficit, but the Bundesbank vehemently objects. Quite surprisingly, news arose this week that at least two major gold producers continue to be very aggressive in the paring down of their hedge books. Barrick dropped 800,000 ounces from its books by delivering into previously sold forward commitments, while Buenaventura was a buyer of 120,000 ounces. As shareholders continue to demand a "hedge-free" environment, the gold producers continue to abstain from new hedges and continue to work to diminish their hedge books. This is unquestionably a very major support for the gold price as their purchases far outweigh all investor interest over the last two years. Things are not going all that well for the South African precious metals producers, having to engage in one battle after the next. The rise of the South African Rand has significantly hurt their earnings and the government continues to seek one new tax after another. Now, their battle against the Mineworker unions seems another obstacle, with the mines unable to retrench workers without strikes and other difficulties. I continue to look for a much depleted yearly production from South Africa under the current trend long-term. Periodic Ponzi Update PPU -- $hifty, 19:05:42 04/25/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,049.77 + Dow 10,472.84 = 12,522.61 divide by 2 = 6,261.30 Ponzi up 37.45 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Fiat vs Gold -- Sharefin, 01:56:32 04/22/04 Thu Commodities - CRB index sinks on rate fears, dollar Concern that U.S. interest rates will soon be on the rise sent the dollar surging on Wednesday and prompted heavy speculative profit-taking in metals, grains and other key commodity markets. The rate jitters, which were tied to comments by Federal Reserve Chairman Alan Greenspan a day earlier, sent the dollar to near a five-month high against the euro by the time markets opened on Wednesday. The dollar is the main currency of international commodity transactions. With U.S. interest rates bumping along at the lowest in four decades, the weakness in the dollar has been a prime factor in helping many commodity prices soar. The Reuters-Commodity Research Bureau index of 17 futures contracts set a 23-year high on March 22 at 285.08. But retreats in grains, metals and oil markets Wednesday sent the index down more than 2 percent to 269.29, down 6.09 points. Precious metals and copper absorbed some of the biggest blows. A rising dollar makes the dollar-denominated metals more expensive to big overseas investors and spurs profit-taking.  Beware....Paper Players! -- auspec, 20:00:23 04/21/04 Wed The Perfect Storm or the Perfect Bluff??? The cabal is in the process of pulling off its greatest bluff ever. In Texas "Hold Em" terms they're sitting with an 8-2 off suit and betting the moon. It's complete bullcrap. They have nada & I for one will raise $ call the bluff. What a complete bunch of ninnies dabble around in gold and silver. Go LONG or go home. This is not a game for kids. Mr. Paper, J. Sinclair, has led his sycophants into a dry well once again............what a twerp he is, never once straying from his beloved paper games. He either is or might as well be a ring leader of the elitist crowd. Pied Piper of CRIMEX Paper..........rats and all. Lures folks into the "game" then chastizes them for bailing out when the fraud cranks up. Sinclair...........your ego and gullibility are off the charts. TA this {gesturing wildly while looking like Jack Nicholson}! Sinclair's charts and history lessons are wonderful in regards to the ongoing bull market in gold, but he's missed the boat completely about promoting CRIMEX. Lured right into the middle of the FRAUD. Figure it out, Jim, folks can buy paper and Tan Range forever, but w/o stressing physical metals............the game continues leading the comets to vomit. It's not a square game regardless of your TA skills and bravado. Mr. Gold has become Mr. Paper and you reside in the past. Take your TA and apply it in an unrigged market. You, Sir, are the perfect Shill. Harsh words, but now I feel much better..........besides that, they're also true. Sinclair goes out of his way to hide from any negative commentary.........those ivory towers. This market is turning back up post haste. So far, gold has held nicely in comparison to silver. The shares have taken a huge beating, 20% or so, nearly across the board. Makes me want to buy some CRIMEX paper {not}. I'm heading to NY tomorrow & will stop in and see how the boyz like my "CRIMEX" label. Rantin along, auspec Gold -- Sharefin, 22:31:12 04/18/04 Sun Gold price to hit $450 per ounce: GFMS survey Gold prices have a strong bias to the upside — $450 per ounce (28.35 grams) as a good possibility — should the conditions remain right for attracting further investor interest, GFMS, one of the world's renowned precious metal consultancies, has said in its 2004 gold survey. ~~~ Perhaps the greatest driver of investment over the next year or so will be economic developments in the United States, the consultancy said in its global survey. “The US fiscal and current account deficits, on top of eye-watering levels of consumer debt, create huge risks of another hefty slide in the dollar, plus eventual recession and a slump in equity markets. Throw in instability in Iraq and you've got pretty good conditions for a further surge in investment. And don't forget that the financial inflows into gold last year — which we estimate at a little over $10 billion, on a net basis — were still tiny compared to the potential sums available,” noted Philip Klapwijk, GFMS' managing director, in the report. ~~~ Both scrap and central bank sales grew by over 10 per cent but these gains, the report states, were largely just in response to the rally. GFMS also do not expect to see a supply shock this year undermining the anticipated rally. Scrap might slip due to price ennui whilst official sector sales could also fall. The latter change is based on a belief that sales under the new European Central Bank Agreement may fail to reach their annual limit whilst purchases by others in 2004 are a possibility. Gold -- Sharefin, 22:26:24 04/18/04 Sun New gold souk to open soon - UAE DUBAI - This summer jewellery sector will witness opening of a new jewellery mall, which would be called New Gold Souk Centre. Till now approximately 10 jewellers from domestic as well as international brands have signed in for setting up shops in this mall. Gold -- Sharefin, 22:21:58 04/18/04 Sun Wanted: new chairman for exclusive gold fixing club LONDON : Twice a day for the past 80 years, five bankers from across London have gathered at N M Rothschild and Sons to perform an odd ritual seemingly at odds with the fast-moving, technology-driven ways of modern finance. With the use of only a phone and a small flag each, the five pin-striped bankers are responsible for setting the benchmark gold price tracked by investors, producers, consumers and central bankers around the globe. But, despite gold prices close to 15-year highs, Rothschild caused something of a stir in the bullion market last week by announcing its withdrawal from commodities trading, including the gold fixing process. "Our income from commodities trading in London, including gold, has fallen as a percentage of our total income in each of the past five years," said chairman David de Rothschild. Since 1919, five bankers have met at 10:30 am and 3:00 pm every day at an office on St. Swithin's Lane, a stone's throw from the Bank of England, in the heart of London's financial district. An opening price is announced by the chairman, and is then moved up and down until the numbers of bars to be bought or sold are balanced. Members contact their dealing room by phone, and raise a small flag to declare orders from customers. These days, gold is also traded around-the-clock in markets in London, the Far East and New York. But the London gold fixing is still an important benchmark. The decision has left the other four members of the gold fixing -- the Bank of Nova Scotia-ScotiaMocatta, Deutsche Bank, HSBC and Societe Generale -- with an empty seat to fill. Any replacement must be a so-called market-making member of the London Bullion Market Association. Other such members are AIG, Barclays, J Aron (part of Goldman Sachs), JP Morgan Chase and UBS. In theory, others firms could apply to become a market-making member, and then to join the gold fixing. For Rothschild, the withdrawal from the gold market ends a 200-year tradition. The bank has built up one of the largest, dedicated precious metal trading teams in London. About 40 jobs are at risk, including some oil traders. Gold -- Sharefin, 22:19:00 04/18/04 Sun For Indians, gold shines like never before Gold continued to be in demand in India during 2003 though global gold prices soared to multiple-year highs. Indian gold demand increased 2.5 per cent in a year in which global demand fell 6 per cent. Indians were expected to buy more gold this year as the $400 and above price mark becomes acceptable. The Gold Survey 2004 report released by UK-based GFMS pointed out that jewellery fabrication declined 6 per cent in 2003 to 2,533 tonnes but outlook in 2004 was bright as markets were expected to adjust to the higher price of gold. ~~~ GFMS director Paul Walker noted, "Surprisingly, whilst total jewellery fabrication fell, small gains were recorded in two of the most important gold jewellery markets - China and India. Rapid adjustment of consumers price expectations and robust economic growth fuelled in part by a good monsoon helped Indian demand rise 2.5 per cent". Periodic Ponzi Update PPU -- $hifty, 18:52:10 04/18/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1,995.74 + Dow 10,451.97 = 12,447.71 divide by 2 = 6,223.85 Ponzi Down 23.60 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 21:51:16 04/15/04 Thu Going, going, gold The barbarous relic, as Keynes called it, is crumbling to dust. When even the venerable NM Rothschild has quit the gold market and the Bank of France, among the most stubborn of the official goldbugs, is thinking again about its bullion holdings, the end of gold as an investment has come a little closer. It will not be before time. The fetishisation of shiny yellow metal, decades after it ceased to be used as the anchor of the international monetary system, is a lingering anomaly in modern financial markets. Perhaps Rothschild's last service to the bullion market could be to keep a live gold trader on display behind glass as a reminder of a bygone age, like the former coal miners who now make a living giving tours of defunct pits. The one advantage of gold as a reserve asset is that, unlike assets based on fiat money, governments cannot make it worthless by inflating it away. But in an era of low inflation, and given that independent inflation-targeting central banks are the norm across the industrialised world, that risk has very sharply diminished. Indeed, for both private and official investors, gold is now a rather risky asset with a nil or low return. The intrinsic value of gold, determined by its use in various industrial processes, is well below its market price. Gold does not grow. So its value to any one investor as an asset is dependent on other investors also holding it as an investment asset. The gold price hangs precariously by its own bootstraps. For private investors to hold gold on this basis is their own foolish affair. For central banks and governments to hold it as a reserve asset is a betrayal of the public on whose behalf they are acting. Despite recent sell-offs, governments and central banks still hold about a fifth of the world's bullion. Their large holdings relative to the size of the market by themselves make gold particularly ineffective as a reserve asset: the very act of official selling of bullion on any large scale to raise cash will itself drive down the price. This danger was amply demonstrated by the UK's unhappy experience of trying to sell some of its gold holdings. Announced in 1999 in a sensibly open and transparent fashion, the sales sparked such a fall in the global bullion price that a group of central banks signed a concord limiting such sales. That has recently been superseded by a new agreement providing for limited official sales. Given the pointlessness of holding gold, the speed of its official sell-off scarcely matters, unless leaching the gold into the market bit by bit somehow maximises the return to the public purse by limiting the impact on the price. That would imply some irrationality on the part of the market. But then holding gold is irrational in the first place. Perhaps the central banks are right to go slowly. Whatever the speed, the direction is clear. Gold is on its way out as an investment and a reserve asset. Three cheers for that. ----- Heh Heh Heh What's the odds that the author of these comments is proven as foolish as the British were selling their gold at the bottom. Gold -- Sharefin, 08:18:33 04/15/04 Thu Rothschild, the bank built on gold, quits market After 261 years, N.M. Rothschild & Sons, the most prestigious bank in the City of London still owned by its founding family, shocked the financial world yesterday when it pulled out of trading in gold and other commodities. The chairman, David de Rothschild, said: "Our income from commodities trading in London, including gold, has fallen as a percentage of our total income in each of the past five years. Following a strategic review of our activities we have concluded that this is no longer a core area of activity and have, therefore, decided to withdraw from the market. ~~~ As part of the decision, Rothschild will no longer take part in the twice-daily London Gold Fixing, which it currently chairs and which has been held in its offices since 1919. Rothschild's roots lie in gold. Its origins date back to 1743 when a German goldsmith, Amshall Moses Bower, opened a counting house in Frankfurt. He placed a Roman eagle on a red shield over the door. Rothschild is German for "red shield", and Bower's son adopted the name. By the end of the 18th century Rothschild was lending to governments and helped to finance the Napoleonic wars in the early 19th century. Nathan Rothschild paid for an attack on France by the Duke of Wellington by smuggling gold through France. Through its command of gold Rothschild effectively became paymaster to the British Army. In 1825 Rothschild rescued the Bank of England after a run on gold, causing an economic crisis and the collapse of 145 banks. Rothschild shipped £10m of gold into the Bank and became its official gold broker. Rothschild manufactured gold bars for more than 100 years, until 1967. It also owned and operated the Royal Mint. By the end of the 19th century Rothschild had twice bailed out the US government when its gold reserves fell to what were regarded as dangerously low levels. After the First World War, the victorious governments were anxious to stabilise the price of gold, and asked Rothschild to organise what became the London Gold Fixing. Despite the development of 24-hour trading, at 10.30am and 3pm, every day for the past 85 years, representatives of the five leading London gold dealers have met at Rothschild's offices in St Swithin's Lane to fix the price. Richard Russell -- Sharefin, 08:09:01 04/15/04 Thu Here's What I See: When in Doubt, Stay Out As for the big picture, I believe the government has about "shot its load." Look what's happened over the last 12 months, and still the major stock averages have been unable to rise to new highs. - Eleven rate reductions taking short rates down to a Great Depression level of 1%. - Massive refinancing of home mortgages to the tune of $2.5 trillion in 2003. - Fed injecting over a trillion dollars in liquidity into the banking system over the last 12 months. Over the last four weeks we've seen M-3 rise $100 billion or at an annualized rate of over $1 trillion. - Massive foreign buying of US Treasuries, which has (up to now) kept long rates down. - Series of tax cuts by the Bush administration. - Weekly "happy news" propaganda from various Fed governors. - Huge government deficits which tend to stimulate the economy. - All-out spending spree by US consumers. So what the Fed and the US government have done is to build the greatest edifice of debt ever seen by one country in history. And this debt continues to build. For the US government, the debt build-up is continuing at the rate of over $13 billion a WEEK. The current rising trend in interest rates will bear down on this ocean of debt. This pits the forces of deflation directly against the forces of inflation. ~~~ However, the central banks cannot control the "bond market vigilantes." When the vigilantes become frightened about inflation, they dump bonds and rates go up (which is what's happening now). The price of real money, GOLD, will fluctuate wildly as the inflation-deflation battle goes on. In the end, the great casualty will be intrinsically worthless, paper money. In the end, irredeemable paper money will be distrusted, and it will go down. The only power evil has is the power to destroy itself. I call paper money evil. In the end, it will destroy itself as it has done all through history. Gold -- Sharefin, 08:00:30 04/15/04 Thu Gold, silver prices slide as U.S. dollar gains ground The price of gold and silver tumbled yesterday as another robust piece of U.S. economic data sent the greenback soaring. Gold futures in New York had their biggest drop in 10 weeks, with gold for June delivery falling by $13.20 (U.S.) to $407.70 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold fell by $13.10 to $407. "This is a big, speculative selloff," said Mike Armbruster, a broker and analyst with Altavest Worldwide Trading Inc. in San Juan Capistrano, Calif. "The rally in the dollar really kicked it over the edge today. A lot of large, long, speculative positions were running for the exits." Before this week's liquidation, funds had been adding to their long positions in gold, taking it to the highest level in more than 10 years, according to the Commitments of Traders Report from the Commodity Futures Trading Commission. Gold -- Sharefin, 07:58:47 04/15/04 Thu Gold glisters a little less brightly in France Under pressure to restore order to the French public finances, Mr Sarkozy has persuaded the Bank of France to reconsider what Jean-Claude Trichet, president of the European Central Bank, once described as France's "near-tribal obsession" with gold. Of all the leading nations, France, which last sold gold in 1968, has long been seen as the most reluctant seller of bullion. On Wednesday, however, Christian Noyer, Mr Trichet's successor at the Bank of France, signalled in an interview with the French newspaper, Le Parisien, an about-turn on a policy that has underpinned the central bank since its creation by Napoleon after the Revolution. Mr Sarkozy has not yet secured a total victory over the bank's mandarins, but the Bank of France is now considering selling 16 per cent of its gold. Gold accounts for 52 per cent of the Bank of France's reserves, compared with a eurozone average of 41 per cent and 8.7 per cent for the Bank of England, according to the World Gold Council. France is the world's fourth-largest gold holder, after the US, Germany and the IMF. The Bank of France has a physical relationship with the metal. France's hoard of 3,025 tonnes of gold is stored in vaults that cover a hectare of ground 27 metres below the level of the River Seine. Included in this hoard is the gold that the Bank of France has pledged to the European Central Bank in return for France's 16.5 per cent stake in the guardian of the eurozone's monetary stability. Mr Noyer said: "Through an agreement between central banks, we have the possibility to sell around 500 tonnes of gold over five years starting from this autumn. But the decision to sell has not yet been taken but will be this autumn in complete independence by the Bank of France." Gold -- Sharefin, 07:51:37 04/15/04 Thu Gold to get major boost from economic and political insecurities - GFMS LONDON (AFX) - Gold could rise to 450 usd per ounce this year -- its highest price since 1988 -- if uncertainties over the US economic recovery and geopolitical insecurities keep stoking investors' interest, according to the London-based metals consultancy GFMS Limited. "GFMS forecast that future gold prices have a strong bias to the upside, seeing 450 usd as a good possibility should the conditions remain right for attracting further investor interest," said GFMS chairman Philip Klapwijk. The consultancy believes that perhaps the greatest drive of investment over the next year or so will be economic developments in the US. "The US fiscal and current account deficits, on top of eye watering levels of consumer debt, create huge risks of another hefty slide in the dollar, plus eventual recession and a slump in equity markets," said Klapwijk. "Throw in the instability in Iraq and you've got pretty good conditions for a further surge in investment," he added. Fiat -- Sharefin, 07:49:03 04/15/04 Thu Using the Consumer Price Index to Rob Americans Blind Most Americans have been led to believe that the Consumer Price Index (CPI) actually measures, from one year to the next, the "cost of maintaining a constant standard of living" as the prices for goods we purchase increase. Indeed, we are foolish enough to believe that the index is an accurate measure of the price increases for the same basket of goods we buy every year. If this were actually true, the index would show an honest increase of 3% - 4% in price, there would be no productivity miracle, interest rates would be much higher, and bond and stock prices would be lower. Of course, with an election approaching, our elected officials don't want the CPI to be an honest measure of the cost of maintaining the same standard of living or quality of life. They want a politically convenient index, cleverly devised to hardly ever rise at all! What you should find unsettling and fraudulent are the ways that the CPI is manipulated to ensure there is no inflation, regardless of how high the prices rise for things we must buy to live. Manipulating the CPI - specifically because the benefits to the retired on Social Security, Medicare and Medicaid are tied to it - and making people believe that inflation is low, will keep the "fraud" of monetary inflation alive. The government simply can't afford to keep the promises it has made, and it needs to use this clever accounting fraud. If productivity is really so high, why isn't government policy pushing through a 10% flat increase in Social Security benefits so that the retired can get their share of the productivity miracle? (Maybe the real miracle is robbing them without them noticing!) By changing the definition of "what inflation is", our government won't have to pay nearly as much to retirees as they were anticipating. The implications of defining inflation away are vast, and the magnitude of the fraud is extraordinary! Gold -- Sharefin, 04:10:26 04/15/04 Thu Rothschild to pull out of gold market N M Rothschild, the investment bank, is to withdraw from the gold market, turning the page on two centuries of history. The same company that smuggled gold coins across the English Channel to finance the Duke of Wellington's military advance through France 200 years ago will also withdraw from the twice-daily London gold fixing, which it has chaired since the first fix of the gold price took place in 1919. This follows a review by Baron David de Rothschild, the bank's new chairman, concluding that it should withdraw completely from commodity trading. ~~~ Gold producers were buying far fewer hedges, which Rothschild specialised in and the firm had neither the infrastructure nor the risk appetite to be a big trader, he added. ~~~ Withdrawing from the gold market is a break with the era of Baron David's predecessor and distant cousin, Sir Evelyn de Rothschild. Sir Evelyn was always proud of the bank's association with the gold market, but handed over control of the bank last year and stepped down as chairman last month. "Evelyn is perfectly relaxed and supportive [of the exit from gold trading]," Baron David said. Gold -- Sharefin, 04:03:26 04/15/04 Thu Bank of France governor open to gold reserves sale Bank of France governor Christian Noyer said in an interview published he was open to selling some of the country's gold but that the proceeds would not go directly to the state. "Sell gold, yes, but... there is no question of selling it to give the money obtained directly to the government," he told French daily Le Parisien Wednesday. Proceeds from the sale could be invested, with the accrued interest generating revenue for the Bank of France, which then could be paid as dividends to the state as the shareholder of the central bank, Noyer explained. He said a decision on the matter would be taken by the autumn. In late March, however, Noyer had dismissed speculation that gold reserves might be sold, describing it as "a debate that does not exist". On Tuesday the French finance ministry said it was only considering the option of using some of the country's gold for future investments or to reduce debt, after press reports said talks on the matter could begin as soon as this week with the Bank of France. The financial daily Les Echoes said Tuesday that ministry and bank officials would hold talks with a view to selling up to 500 tonnes of the country's holdings of gold between 2004 and 2009, worth around five billion euros (5.9 billion dollars) at current prices. Noyer said that "under the framework of a central banks agreement, we have the possibility of selling about 500 tonnes of gold over five years, beginning next autumn." He emphasized, however, that no decision had been taken. Finance Minister Nicolas Sarkozy suggested last week that a partial sale of the Bank of France's gold reserves was worth looking into, either to finance investments or reduce debt, "but in no case to finance operational spending". The idea of a gold sale had been raised in early February by Prime Minister Jean-Pierre Raffarin as a possible means of financing research. Noyer had opposed the idea then, explaining that gold was an asset on the central bank's balance sheet, like currency reserves, offsetting banknotes and reserve funds. But in his interview with Le Parisien, Noyer said: "I have studied with the greatest attention the position of Finance Minister Nicolas Sarkozy." He stressed that any decision on the sale of gold "will be taken in total independence by the Bank of France, conforming to the law and to the treaty on the European Union." Noyer said he would discuss the idea soon with Sarkozy and the bank's monetary policy committee. "Whatever the outcome, we will announce our decision before autumn," he said. Gold -- Sharefin, 05:11:08 04/13/04 Tue Gold Rush Lures Western Miners Western gold explorers may have learned a lot about doing business in Russia after a flurry of deals in this gold-rich country, but a battle for the richest prize -- a huge goldfield in Siberia -- is still to come. ~~~ But the real battle for the Sukhoi Log deposit near the Siberian city of Irkutsk lies ahead. Eurasia's biggest untapped gold mine has reserves of about 1,000 tons of the precious metal. A number of Western miners, including Canada's giant Barrick Gold and Britain's Highland Gold Mining, in which Barrick has a stake, have expressed interest in Sukhoi Log. Giant Norilsk Nickel, with annual turnover of $5 billion, and Russian metals firm Polimetall, which expects to come in second after Norilsk in terms of gold output this year, are clear favorites in the contest, analysts say. But some industry insiders said foreign firms still have a chance provided the tender is held in the form of a public cash auction. "We can simply outbid the Russians. And we foreigners are prepared to do so," one Western industry source said. Russians are seen by analysts as having a stronger chance of winning in a closed tender, in which contenders submit sealed bids with detailed investment plans. The government has yet to announce the details of the tender. Gold -- Sharefin, 04:20:47 04/13/04 Tue Why Housing Is About to Go "Pop!" Too many red alerts are flashing for investors and the Fed to remain in denial when so much is at stake. If this bubble bursts, watch out If you still need proof that a bubble is building in the housing market take a look at the findings of my economist colleague Dean Baker at the Center for Economic Policy & Research in Washington, D.C. He has tracked national housing prices going back to 1951. Prices pretty much track the rate of inflation up until 1995. But since then, average prices on new and existing homes have soared more than 35 percentage points beyond the overall rate of inflation. Is that unusual? You bet it is. Gold -- Sharefin, 04:12:58 04/13/04 Tue Welteke's Son Says Bundesbank Head Clashed With Eichel on Gold Hans Welteke, son of Bundesbank President Ernst Welteke, said his father clashed with German Finance Minister Hans Eichel over the use of the central bank's gold reserves before taking a leave of absence this week, according to a letter published by the Tagesspiegel newspaper. ``There were differences of opinion regarding the use of the Bundesbank's gold reserves, especially with Finance Minister Hans Eichel,'' Welteke said in the letter to the Berlin daily. Ernst Welteke, 61, agreed on Wednesday to take a paid leave of absence amid an investigation by Frankfurt prosecutors into a hotel bill paid by Dresdner Bank AG for him and his family in 2002. The Bundesbank is resisting efforts by the government to install Deputy Finance Minister Caio Koch-Weser as its new president, which it considers an attack on its independence, a person familiar with the matter said on Thursday. Schroeder favors Koch-Weser because the deputy finance minister is prepared to make more use of the country's gold reserves than Welteke, weekly Focus magazine reported on Saturday, citing unidentified Bundesbank officials. ~~~ Welteke in January recommended setting up a research foundation to distribute 5 billion euros ($6 billion) from gold sales over five years. Schroeder says the Bundesbank's plan isn't sufficient to meet his spending needs, Focus reported. Gold -- Sharefin, 04:10:01 04/13/04 Tue Birch sees gold shining The price of gold hit a 16-year high last week but Merrill Lynch's gold expert Graham Birch reckons it will remain strong throughout this year and has repositioned his fund to take advantage of opportunities in China. AAA-rated Birch reckons there is more to come from gold mining shares, the equities his Merrill Lynch Gold & General fund specialises in. He told Citywire: 'The gold price has been rising broadly speaking since the technology boom peaked due to various factors. In the last couple of years most of the factors that effect gold have been improving.' He describes gold as 'wealth incarnate' and thinks the gold price will continue to rise steady: 'There will be continuation and a gentle improvement. The price of gold is by no means stratospheric - it hasn't even doubled from its low point.' ~~~~ Birch is not worried about the effect an improving US dollar may have on the price of gold and as a result the share prices of gold-related equities. He believes investors across the board are diversifying their portfolios further than they were in the 1990s and as part of their asset allocation are moving small amounts of their total investments into resources stocks and funds such as his gold fund. Gold -- Sharefin, 04:08:08 04/13/04 Tue Jobs won't be lost, say NUM and Harmony The National Union of Mineworkers (NUM) and Harmony Gold are confident they will find a way to avoid widespread job losses at the country's third-biggest gold producer. At issue is the possible closure of six shafts at Harmony, which employ 5 000 people and account for 6% of the company's total annual gold output, on account of the strong rand and some of the shafts running out of minable reserves. Silver -- Sharefin, 03:55:34 04/13/04 Tue Mind the Golden Rule We all know what the real golden rule states: "He who has the gold makes the rules." If the price of gold stocks is any indication, it appears investors have taken this rule to heart. ~~~ What makes the unhedged miners so special? Every gold company has a cost per ounce of gold mined, which is a combination of fixed and variable costs per unit. Generally, the more ounces a company mines, the lower the unit cost. Sales, on the other hand, fluctuate with the price of gold and can rise quickly over short periods of time. That is, provided the company isn't locked into selling at a specific price. Here's where it gets interesting. Hedged gold producers follow the conservative strategy of selling future gold production forward, getting a guaranteed price per ounce for future production. Unhedged miners are just the opposite, selling most of their gold at the spot (market) price, exposing them to the fluctuations of the gold market. As the price of gold has risen, unhedged producers have experienced tremendous sales growth, and -- more importantly -- significant gross margin improvements. Newmont's sales for 2003 totaled $3.2 billion, nearly double the $1.7 billion the company did just two years ago. While some of the sales growth is due to acquisitions, it's undeniable that a rising gold price helped push gross margin from 33% in 2001 to 41% in 2003. Similar sales and gross profit increases can be found in the other unhedged miners. Silver -- Sharefin, 03:52:57 04/13/04 Tue Silver a Sell, Unless The Jig is Up Before dismissing the crusaders as crackpots, it is worth studying the silver market more closely. As stated, and as has been repeated for some time from people such as Theodore Butler, despite the fact that demand regularly outstrips supply silver has (until recently) remained in entrenched bear market. Curiously, no other commodity has ever remained in a supply deficit for as long as silver (more than a decade) without prices firming. Suffice it to say, the seemingly bullish supply/demand fundamentals contrasted to the metals slumping price is the first, and most obvious reason why some believe that the price of silver is being manipulated. The second manipulation consideration deals with the make-up of open interest in the silver market (at least the open interest that the public is privy to). Related to concern number one – or that there has been a suspicious disconnect between the paper trading price of silver and the fundamentals - this theory reasons that those parties who have profited during silver's bear market must be the ones doing the manipulating.  Gold -- Sharefin, 03:49:04 04/13/04 Tue Gold Fields share goes to Russia Johannesburg - The acquisition of 20 percent of Gold Fields by Russia's Norilsk Nickel is a done deal. Anglo American confirmed yesterday that its sale of the stake to the Russian mining group for about R7.6 billion was in the bag. Gold -- Sharefin, 03:45:29 04/13/04 Tue S Africa outshines Switzerland, is now biggest gold exporter to India The glitter is going out of India's gold imports from Switzerland and the UAE — traditional beneficiaries of the country's unquenchable thirst for the yellow metal. Following liberalisation of import controls and surge in international prices, India Inc is sourcing more and more of the precious metal from other sources like South Africa, Australia and Hong Kong. Periodic Ponzi Update PPU -- $hifty, 16:14:34 04/11/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,052.88 + Dow 10,442.03 = 12,494.91 divide by 2 = 6,247.45 Ponzi Down 16.43 from last week. Thanks for the link RossL! This past week was the 4th year anniversary for the Ponzi Index ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Silver -- Sharefin, 06:30:30 04/07/04 Wed Exchange to Increase Margin Rates on Silver Contracts NEW YORK, N.Y., April 6, 2004 – The New York Mercantile Exchange, Inc., announced today that it will increase the margins on its COMEX Division silver futures contracts at the close of business tomorrow. The margins for all months will increase to $2,500 from $2,000 for clearing members and members and to $3,375 from $2,700 for customers. Fiat -- Sharefin, 06:20:29 04/07/04 Wed I.M.F. Report Says U.S. Deficits Threaten World Economy WASHINGTON, Jan. 7 — With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report made public today bythe International Monetary Fund. In nearly 60 pages of carefully worded analysis, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits posed "significant risks" not just for the United States but for the rest of the world. The report warned that the net financial obligations of the United States to the rest of the world could equal 40 percent of its total economy within a few years — "an unprecedented level of external debt for a large industrial country" that it said could play havoc with the value of the dollar and international exchange rates. The dangers, according to the report, are that the United States' voracious appetite for borrowing could push up global interest rates and thus slow down global investment and economic growth. Lenny's Corner -- Sharefin, 23:28:47 04/05/04 Mon GENERAL COMMENTS: Although the end of week results were mixed, the precious metals continue their speculative driven rally, with gold reaching 16 year highs, and silver achieving 17 year highs. The precious metal markets have taken on an independent life of their own of late, quickly divorcing from the recent historic influence of the USD. The Euro is down some 9 cents from its high, the USD Index is up some 5% from its low, and the march to higher prices has continued regardless. Such market action is most bullish, as now the precious metals are rallying in ALL, or most currencies. While the gold market saw new highs during the week, it was sharply knocked back on Friday when the Labor Department announced a truly “blowout” number on job creation in the USA. This resulted in a sharp sell-off of $10 at the lows, to close the week down by only 70 cents. Silver, which has become even more speculative, even more illiquid, and even more dangerous than before, was completely undeterred as more and more speculators continue to chase momentum, was up 44 cents in a most wild fashion. Just on Friday alone, in the course of just 3 or 4 hours, this marker traded to a high of $8.50, only to fall to $7.935. This market has become a most “public” market and most professional traders have exited and seem content to just watch the insanity. This week also saw some sharp volatility in the platinum and palladium markets when Umicore announced that it had developed new technology allowing the partial substitution of palladium for platinum in catalytic converters for diesel engines. While the reality of such fundamental news may take months or years to develop, speculators quickly dumped platinum (down some $7 for the week) in favor of palladium, up some $15 for the week. While I have often commented that markets are much more about perception than reality, I have not seen the precious metals markets more nervous than the past week or so. Every flutter of new information, new stimuli, moves these markets mightily. The Commitment of Traders reports below will show that speculative interest in both gold and silver are AT RECORD HIGHS, and I sense that while these markets may indeed go higher, both remain very vulnerable should the long speculators decide to exit. Periodic Ponzi Update PPU -- $hifty, 23:49:13 04/04/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,057.17 + Dow 10,470.59 = 12,527.76 divide by 2 = 6,263.88 Ponzi Up 177.39 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho Silver ! $hifty Fiat -- Sharefin, 21:21:31 04/04/04 Sun Investors' Hopes Hinge on Earnings A rapid rise in interest rates could rain on the stock market's parade. That's the worry, after the strong jobs data spurred speculation the Federal Reserve may raise interest rates as soon as this summer and sent bond yields sharply higher on Friday. Higher interest rates could hurt companies in the financial and housing sectors because higher borrowing costs discourage consumers from buying new homes or refinancing their mortgages. Fiat -- Sharefin, 21:18:41 04/04/04 Sun Are we heading for a crash? The average house now costs £151,467. This is 5.2 times the average salary. House prices are rising by 18.5 per cent a year while pay levels are rising by 3.6 per cent. Britain's current mortgage debt is running at £783,000,000,000. ~~~ The flurry of figures has led to the inevitable warnings that the UK is suffering from a speculative house price bubble that will end in a property crash as it did in the late 1980s. But the mortgage industry and many independent analysts believe that today's housing market has solid foundations. Fiat -- Sharefin, 21:13:01 04/04/04 Sun Home Is The Heart (Of The Matter) We ask you quite importantly and quite sincerely, just where would our economy be today had it not been for household real estate inflation over the last four years? You probably do not want to know the answer. All of the data in the tables above point to the same conclusion. The leveraging of continuously inflating real estate values over the last four years has been absolutely crucial to the economy. Whether Greenspan will ever admit it or not, this is exactly how the Fed "has successfully dealt with the aftermath of the stock market bubble". All of these numbers come directly from the Fed. The very same folks who simply cannot be ignorant of their meaning. The problem, of course, being just what will or can the Fed attempt to inflate next if the residential real estate market runs into price turbulence at such a presently high altitude? Especially given that the labor market appears a bit under the weather and wage and salary growth is not even keeping pace with lowball estimates of understated headline inflation. As of the end of 4Q 2003, household real estate assets totaled approximately $15.1 trillion. Household financial assets climbed to $34.3 trillion during the same period, but of this equities account for only about $8 trillion. The bottom line is that residential real estate is almost twice as meaningful to households in terms of total household assets as are stock holdings specifically. Although a number of stock market followers may be concerned about an equity crash or severe downturn ahead, maybe what they should really be worried about is US residential real estate values. In terms of total household well being, emotional stability and forward perceptions, there is no other singular household asset class that means as much in dollar terms. Not even pension entitlements. Get the picture? Fiat -- Sharefin, 21:04:05 04/04/04 Sun U.S. Economy in Throes of Deflation The U.S. economy is in the throes of not just an economic slowdown, but full-fledged deflation, a condition likely to stretch into the next decade and to force fundamental changes in how companies are managed, according to noted Perot Systems (NYSE: PER) management strategist and thought leader James Champy. Speaking at a business and information technology conference in San Francisco on Tuesday, Mr. Champy argued that the senior management of most U.S. firms is ill-prepared to deal with the realities of a deflationary macro economy, and that doing so would require fundamental changes in not only their operations, but also in their basic cultures and mindsets. “I'm not an economist, but based on thousands of hours of working closely with Boards and CEOs of companies throughout the country over the past few years, I can tell you firsthand about the forces buffeting American industry,” said Mr. Champy. “The dirty little secret is that we are in a period of structural and competitive deflation, and it's not a pretty picture.” Gold -- Sharefin, 21:02:02 04/04/04 Sun Geologists Claim Massive Gold Find in Altai Russian geologists have discovered massive gold deposits in the southern region of Altai with estimated reserves of up to 1,000 tons of the precious metal, a regional official was quoted as saying on Friday. Anatoly Zaitsev, Altai's top geologist, was quoted by Itar-Tass as saying that total discovered reserves of gold, silver, copper, zinc and lead in northern Altai are estimated at 60 million tons. Undiscovered reserves could be five times higher, he said. By comparison, Sukhoi Log, the world's second-largest undeveloped gold deposit also located in Russia, has estimated reserves of 1,029 tons of the metal. Altai's biggest deposits include Rubtsovskoye, Zarechenskoye and Korbalikhinskoye, where exploration has already started. ~~~ Russia, home to one of the great unexplored gold regions, is now at the center of the investment radar for the world's big mining companies and domestic prospectors on the back of high gold prices. Gold -- Sharefin, 17:05:06 04/03/04 Sat US helped steal war loot ATLANTA—A lawsuit claims the US government helped steal possibly trillions of dollars in gold from an amateur Filipino treasure hunter. It sounds like something right out of an Indiana Jones movie, but Atlanta attorney Bill Stone insists, “The government has done stranger things.” Court documents state that Roger Roxas, a locksmith in Baguio City who hunted for treasure as a hobby, began searching in 1961 for the booty of Japanese Gen. Tomoyuki Yamashita, who plundered it from various Southeast Asian countries during World War II. ~~~ Stone, an attorney for Golden Buddha, an Atlanta corporation now pursuing Roxas' claim against the government, said the US government helped the Marcos regime remove the gold from the Philippines and convert it. Stone said his firm and a San Francisco lawyer have gathered documents, taken several depositions and have determined that the Americans involved “were working under the auspices of the CIA.” ~~~ Under the Philippine law, anyone who finds gold on state land is entitled to half of it, the court papers said. Stone estimates that the gold in today's market would be worth $5.3 trillion. ----------- The funny aspect about this story is the reputed value at today's prices. 5.3 trillion @ $400 per ounce, would buy over 412,000 tonnes or 3 times the total of all the gold ever found. Gold -- Sharefin, 23:25:36 04/01/04 Thu Gold glisters brighter as dollar tumbles The price of gold rose to a 16-year high yesterday after the European Central Bank left interest rates on hold, sending the dollar tumbling on the foreign exchange markets. The precious metal rose $2.70 to $427 per troy ounce - its highest level since December 1988. Analysts said investors had started buying into the metal as a safe haven after the Madrid bombings, and its price was now being driven further by the relative weakness of the dollar. Yesterday, the US currency fell almost two cents against the pound to $1.8576 and just under a cent against the euro to $1.2372 after the ECB decided to leave interest rates on hold at 2pc this month. Gold -- Sharefin, 23:02:12 04/01/04 Thu Gold miners enter the big leagues VANCOUVER -- Wheaton River Minerals Ltd. and Iamgold Corp. yesterday announced a $2.9-billion merger that would create one the world's top 10 gold companies, a million-ounce producer armed with cash for acquisitions. Gold -- Sharefin, 03:33:56 03/30/04 Tue Ingram: Is Barrick a sitting duck? According to a report in Britain's Sunday Telegraph newspaper, Denver-based gold producer Newmont Mining is planning a takeover bid for Toronto-based Barrick Gold – in part because a secret five-year standstill agreement is coming to an end. Barrick says that this is nothing but “wild” speculation, but there are plenty of reasons to believe a takeover bid isn't such a wild idea. One of the main reasons a deal would make sense for Newmont is that Barrick's shares look awfully cheap compared with those of the U.S. producer, something Barrick CEO Greg Wilkins effectively admitted even as he denied the Telegraph story (Newmont had no comment). The Toronto-based company's stock has climbed 32.5 per cent over the past 12 months to about the $23 (U.S.) level , but it is still relatively undervalued next to Newmont and its other peers in the gold mining industry. For the most part, this stems from Barrick trying to unwind its traditional reliance on gold hedging, whereby the miner effectively sold its future gold production to lock in a favourable price. While that strategy worked brilliantly when gold prices were low, allowing Barrick to make billions more in profit than its unhedged competitors, it penalized the company when gold started to climb – and investors penalized the stock. Barrick has been trying to unwind its gold hedge “book” as quickly as it possibly can, but it still faces potential losses if gold prices remain high, and the market is discounting the share price as a result. According to a recent analysis by National Bank Financial analyst Tanya Jakusconek, in fact, Barrick's stock price – when valued on a price to net-asset value basis – hasn't been this cheap relative to those of Newmont since about 1991. Gold -- Sharefin, 03:32:31 03/30/04 Tue Barrick says Newmont bid talk "wild" speculation Barrick Gold Corp. termed as "wild speculation" on Monday a report over the weekend that Newmont Mining Corp. was getting set to make a takeover offer for it, but added it would vigorously defend itself against any hostile bid. Fiat vs Gold -- Sharefin, 03:29:11 03/30/04 Tue A Job Only Gold Can Do With a gold standard, the bureaucrats have it easy. They simply watch the gold window, and when individuals line up with dollars to buy gold, the Fed knows it has supplied more money and credit than the market requires for transaction purposes. When individuals line up with gold asking for dollars, the Fed knows it has not met the demand. In either case, the Fed uses its instruments that regulate the flow of money into the system. At the end of each day, the net effect of its actions satisfy all comers at the gold window, buyers and sellers, and over time maintain the gold-stock level so that it neither rises nor falls. In this way, the marketplace acts as a vast computer, with all transactors satisfied with the level of money and credit except the man on the margin, who appears with surplus money or surplus gold. Fiat -- Sharefin, 03:26:54 03/30/04 Tue Be braced for a bust as bubbles look set to burst Credit has to be given to Alan Greenspan, the Federal Reserve chairman. He is the first head of a monetary authority who has not only managed to create a series of bubbles in the domestic economy but has also managed to create bubbles elsewhere - in the New Zealand and Australian dollars, emerging market debts, government bonds, commodities, emerging market equities and capital spending in China. In fact, over the last 18 months, US monetary policies have boosted all asset classes. This is most unusual since it ought to be obvious that in the long run commodities and real estate inflation is incompatible with a bond bull market. ~~~ Mr Greenspan's monetary tribulations mark an achievement no one else in the history of capitalism has accomplished. It is also one investors will never forget once this credit-driven, universal bubble bursts and it will fill entire chapters of financial history books with economic and financial horror stories. We simply don't know how the end game of the current speculative wave will be played out and when the bust will occur but a painful resolution of the current asset inflation and global imbalances is as certain as night follows day. ~~~ Moreover, we know from the experience of Japan in the late 1980s and Hong Kong in the mid-1990s that consumption booms, driven by asset inflation, end with a colossal bust. That can result from rising interest rates, or because stagnating household incomes no longer support the asset bubble as affordability diminishes, or additional supplies coming to the market and exceeding demand. So, given that consumption driven by asset inflation is unsustainable in the long run and always ends badly, what should the contrarian investor do? The least desirable asset in the world is US dollar cash. The investment community can take everything in stride - even a 70 per cent decline in Nasdaq stocks. But interest rates, as low as they are now, compel people to speculate on everything from commodities, homes and bonds to equities. Therefore, investors in the current speculative environment should be extremely defensive and not be tempted by short-term gains, which could be swiftly erased. Daily moves of 5 per cent in investment markets will become common. Nickel recently fell 8 per cent in a day, copper by 5 per cent, and the euro by 5 per cent within a week. Gold and, especially, silver may offer some protection but, once the current asset inflation bubble ends, they could also be in for a rough time. Gold -- Sharefin, 03:24:51 03/30/04 Tue Barrick Gold braced for bid from Newmont The world'd third largest gold producer, Barrick Gold Corp, is being targeted for a possible bid by Newmont Gold Co, the world's largest gold miner, according to The Sunday Telegraph. The two mining giants are believed to have held informal discussions on a merger in 1999; after the talks collapsed, the two sides agreed a secret five-year standstill arrangement, which comes to an end within the next few weeks, the paper reported. The two companies would form the world's largest gold company based on annual production, gold reserves and market capitalisation, if combined. The merged entity would have reserves of 177m oz and pour more than 12m oz each year. Gold -- Sharefin, 03:23:40 03/30/04 Tue Cash From Chaos as Gold Shines While geopolitical turmoil has sent the broader market lower recently, gold stocks have been on a tear, and analysts say the gains could well continue this year. Like most commodity prices, gold has risen over the past 12 months amid a weakening dollar, low interest rates and strong investor demand. ~~~ The perception that world violence is escalating bodes well for gold because in times of political or economic uncertainty, investors often flock to assets that they consider safe havens. But even if the geopolitical landscape improves or falls off investors' radar screens, pundits say there are many reasons to be bullish on the group. Merrill Lynch analyst Michael Jalonen believes gold prices will rise in April though mid-May because he expects consumer demand will be strong in India as the wedding season approaches. Silver -- Sharefin, 03:19:24 03/30/04 Tue The silver lining Commentary: Silver in early stages of a major bull run Part precious metal and part industrial commodity, silver never seems to get the attention it deserves from investors. But powered by a combination of rising industrial demand from Asia and a weak dollar, silver prices will move a lot higher in coming years. By now, most investors are aware that 2003 was the best year for commodity stocks in decades. The reason for that dramatic run-up is simple: Demand from Asia is growing rapidly while production capacity for most commodities, decimated by a decade of low prices and cutbacks, can rise only slowly. Add to that a weaker US dollar and you have a recipe for explosive growth in prices. The positive fundamentals for commodities aren't likely to disappear anytime soon, in fact, the supply/demand crunch is only going to get worse. China's manufacturing base is rapidly expanding and the consumer sector remains in its infancy. To build all those factories and supply an ever-richer Chinese consumer, basic materials will remain in high demand through at least the end of the decade. Silver enjoys some of the advantages of both precious and base metals. Like gold, it's traditionally been viewed as a store of wealth-a weaker U.S. dollar generally supports higher silver prices. But the metal's biggest market is in industrial applications including electrical connectors and pollution control devices for cars -- these uses sit at the heart of the Asia demand story. Gold -- Sharefin, 03:16:20 03/30/04 Tue Gold: The Benign Neglect of The Dollar The increase in debt almost matches the increase in net financial claims by foreigners. TheUnited States needs to attract $1.5 billion a day to pay for its bills and has become overly reliant on foreign capital. Ironically, Asian central banks have financed a large part of America's deficit to stop their currencies from rising leaving the Europeans to shoulder much of the adjustment of the weakening dollar. To date, when Asian central banks buy US dollars most of that money went into US government bonds which ironically has pushed long-term interest rates to Japan-like levels despite exploding budget deficits and strong economic growth. Such an imbalance is clearly unsustainable and at some point, investors and central banks will be unwilling to finance these "outsourced" deficits. When that happens it will trigger yet another downward devaluation of the dollar and the inevitable flight will force interest rates and gold even higher. ~~~~ The Answer: When governments debase the dollar, gold is the only effective hedge Gold is a good to thing to have. Gold recently recorded a 15-year high, rising more than 70 percent from the low. We believe gold's historic role, as a superior asset class in a world of devalued currencies will emerge this year taking gold beyond $510 an ounce. Coincidently, Japanese Finance Minister, Sadakazu Tanigaki, stated the government will diversify its huge foreign exchange reserves and will "carefully consider whether it will change the composition of its US $673 billion foreign reserves, including its holdings in gold." At yearend, Japan's gold reserves totaled 765 tons or a meager 1.5% of total reserves. The Chinese, the new global juggernaut has only 600 tons of gold in reserves. That will change in a China-centric world. And, the Washington Agreement was renewed for another five years with the fifteen banks declaring, "Gold will remain an important element of global monetary reserves".  Gold -- Sharefin, 03:11:21 03/30/04 Tue Why gold is shining again Which asset is most likely to outperform in 2004? Step forward my old friend gold. In troubled financial markets you can rely on gold. Over the past few weeks gold has staged a recovery to around $420 an ounce, having slipped below $400 during a preceding stock market rally. It took the terrorist atrocities of Madrid to send investors back into the yellow metal, and a renewed slide in the value of the US dollar. Now a few stock market bears are on the prowl again, and commentators such as Dr Marc Faber see the markets making a major top between now and April. Thereafter energy price inflation – US gas prices are at a record high this week – will start to seep into general price inflation, and begin the upward ratchet of interest rates. Stock markets decline when interest rates go up, unless the rate rise is in response to higher economic growth. And on some indicators US markets are 60% overvalued so there is plenty of room on the downside. Falling stock markets and rising inflation, are good for gold. The fact is that you can not print more gold but you can print more money, so this makes gold inflation proof. Thus its value will rise against an inflating money supply. A key point to watch for is when gold becomes detached from the US dollar – at the moment gold is shadowing the weakness of the greenback and its value is little changed over the year against the euro. When gold begins to increase in value in euro terms then things should become really interesting and speculators will pile in. For the average investor it may be wise to acquire some gold shares, or gold depositary receipts in advance rather than to risk missing this investment cue. Many experts believe gold will top $500 an ounce this year, and could go much higher. This contrasts with at best flat expectations for most major stock markets, with the exception of Japan; house prices which now worry the Bank of England; and a poor outlook for bonds post the US Presidential election. One more reason to go for gold is that there is so little else to go for. Even holding cash is a major problem, as any US dollar saver will testify. So stash away a little yellow metal, but be prepared to liquidate this position if markets do crash as then there will be things worth buying. Platinum -- Sharefin, 03:07:56 03/30/04 Tue Platinum looks to build on 24-year peak in Europe Platinum dominated precious metals markets in Europe on Wednesday after speculators drove the metal to a fresh 24-year peak in Asian activity, with further gains likely, dealers said. "It's very hard to think of fundamental reasons for platinum to weaken. Funds are saying that if there's no reason for it to go down, it will go up," Societe Generale Stephen Briggs said. Platinum, used in jewellery and in catalysts to clean car exhaust fumes, hit $924.00 an ounce in Asia -- its highest since March 1980 when the metal touched $1,047.50. Gold -- Sharefin, 03:06:33 03/30/04 Tue Gold rally has bulls smiling again Eric Sprott, CEO of Sprott Asset Management, thinks gold has completed its correction. "I think it's going to start a new phase here where it should go to new highs, possibly considerably higher." ~~~ "The key is the dollar, the dollar, the dollar," said John Ing, president of Maison Placements Canada Inc. "The U.S. dollar rallied a couple of weeks earlier, which caused gold to pull back. But last week, the dollar fell against most of the major currencies." ~~~ Besides the influence of the U.S. dollar, gold tends to move in the opposite direction to stocks and bonds. With North American stock market indexes hitting substantial turbulence in the past few weeks after a smooth, 12-month upward ride, investor confidence has been shaken. The terrorist attack in Spain and heightened tensions in Israel may also be fraying investors' nerves. UBS, the European bank, released a poll yesterday that showed declining investor optimism in the U.S. The index fell to 85 from 97 from last month's reading and is down considerably from the 22-month high of 108 in January. "There's going to be a little fear if this market keeps selling off and people think that we are in a secular bear market, which is what we happen to believe," said Mr. Sprott. Gold -- Sharefin, 03:00:50 03/30/04 Tue Gold producer dehedging seen rising in 2004 - GFMS De-hedging by gold producers could this year outstrip levels reached in 2003, boosted by world No. 2 producer AngloGold Ltd. (ANGJ) as it unwinds contracts to sell unmined metal forward, a leading mine research group said on Monday. London-based GFMS said in a report it expected de-hedging of between 11 million ounces and 13 million ounces of gold this year, compared to nearly 10 million ounces last year. ~~~ With the gold price surging from near $250 an ounce in early 2001 to above $400 last year, many producers who are locked into contracts to sell gold at lower-than-market prices are unwinding these positions -- dehedging -- through various mechanisms to increase their exposure to spot prices. ~~~ GFMS said that just over 70 percent of the de-hedging measured last year came at the hands of four producers: Newmont Mining Corp. (NEM), Anglogold, Barrick Gold Corp. (ABX) and Placer Dome Inc. (PDG). In 2003, a key driver behind the high levels of de-hedging were buybacks triggered by mergers and acquisitions. GFMS said levels of project hedging -- where producers are required by financiers to lock in a price for a portion of production -- are expected to be less over the next two years than the 3.5 million ounces added to the global book in 2003. Based on projects in place, GFMS said this type of hedging could add roughly 2 million ounces to the global hedge book this year and 1 million ounces in 2005. Gold -- Sharefin, 02:54:10 03/30/04 Tue Has China changed the commodity game? ‘Yu Shi Ju Jin' is the Chinese headlines that screamed from a full-page advert taken out in the Financial Times last week by US banking firm Morgan Stanley. Roughly translated the phrase means ‘look out world here we come' and refers to increased Chinese dominance in world trade – the implications of that phrase for commodity prices and for the South African rand could be profound indeed. Mike Bedford, a mining analyst at independent brokerage Barnard Jacobs Mellet, believes rampant Chinese demand for metals will continue to grow, keeping commodity prices buoyant for at least the next four years, and perhaps even longer. Bedford says the China phenomenon, as it is widely being called, could result in a break from the traditional commodity cycle and place metals on the ground floor of a new ‘secular' boom. The prospect of a ‘super-cycle' is a mouth-watering one for mining companies, but investors burnt by the failed tech-boom of the nineties -- a bull run that was also hailed as the dawn of a break in traditional market cycles -- might be forgiven for feeling a little jaded at the prospect. Gold -- Sharefin, 02:50:11 03/30/04 Tue Gold's failing tailings THE first thing Steve Kean noticed was the dead lizards on his prospecting lease, beside Australia's biggest gold mine near Kalgoorlie. Parts of the area became boggy, and the trees and vegetation started looking sicker and went the same way as the lizards. Then the kangaroos became ill, Kean says, after drinking from the ponds that started forming on his land. "They don't drop dead straight away - it's a cumulative effect - the toxins gradually build up in the system," he says. Kean's prospecting lease became impossible to work, he says, becoming a "toxic cocktail" of cyanide, arsenic, and xanthate. "How would you like to work in a hole with that on your skin?" Kean asks. Kean's small, private Optimum Resources has been fighting a battle for more than a decade against Kalgoorlie Consolidated Gold Mines, owned in equal measure by Australia's Newmont group and the Toronto-based multinational Barrick. He says his land has been contaminated by two gigantic, 460ha tailings dams containing the ends of the gold-making process left by mixing ore, water, and chemicals including sodium cyanide used to leach out the metals. Kean says the poisonous substances have been leaking through the walls and from the bottom of the dams into ground water, and back up. But he says this is only "the tip of the iceberg" of the environmental pollution which extends well beyond his lease. ~~~ In his report, Curtin University of Technology academic Tony Cooke said: "The evidence supports the contentions of Optimum Resources that their lease has been directly and adversely effected (sic) by the location and management of the two TSF's (tailings dams)". Cooke said it appeared seepage had occurred into the floodway between the two dams, and "groundwater mounding" had intensified the problem. He warned: "The situation is of adverse consequence to the environment in general and potentially to public health and safety." Among other things, the Adelaide-Perth railway line runs through the area, the report notes. In tabling the report, State Development Minister Clive Brown said the allegations of administrative bungling would be put to the State's Corruption & Crime Commission, although making clear there was no evidence that any "acts or omissions could be attributed to corrupt dealings". So seriously did Cooke take the situation that he recommended that if the dispute between Optimum and KCGM could not be solved within "a reasonable period", the two tailing dams should be shut down -- a move which would effectively close the mine and its 800,000 ounce annual production, worth $US320 million at current prices. Cooke also said the decision to increase the height of the wall of one of the tailings dams should be reviewed in light of the report. ~~~ What the Cooke report highlights is that, while the Australian gold mining industry claims to use world's best practice in its operations, it involves some extremely dangerous chemicals and processes. Those are now coming back under review, and not just as the subject of environmentalist pressure. Apart from the Cooke report, the federal Government is on the trail of the key ingredient in the gold mining process: sodium cyanide. The National Industrial Chemical Notification and Assessment Scheme (NICNAS) has been reviewing the use and transport of the chemical and will come out with a draft report in June. ~~~ The initial findings presented at a series of seminars this month by NICNAS officers caused a stir in the gold industry. "We are predicting an environmental risk of some source to birds and animals," Hartley says, referring to tailings dams. ~~~ Anglo-Gold Australia general manager Barrie Parker says that without cyanide, there would be no gold industry in Australia. "There is no commercially available alternative technology at the present time, and there hasn't been for a century," Parker says. Technology has improved, however, in reducing the toxicity of cyanide entering the tailings dams, he says, with a range of chemical treatments available. Gold -- Sharefin, 02:42:38 03/30/04 Tue Investing Advice: Getting precious returns in gold Gold funds have soared an average 45 percent the past 12 months, leaving investors wondering: Is there a way to invest in gold funds without leaving your account strip-mined? Gold -- Sharefin, 02:41:01 03/30/04 Tue Peru, Chile draw battle lines over mining royalty LIMA, Peru, March 11 (Reuters) - Could Chile's Escondida, the world's biggest copper mine, and Pierina, Peru's No. 2 gold mine, have gone undiscovered if the South American nations had charged mining companies a royalty on their operations? Such a scenario may sound far-fetched, but David Lowell, the American geologist credited with helping find both deposits, said a royalty like the ones that both countries are currently studying would have been a hurdle that could well have delayed investment or even sent prospectors elsewhere. Gold -- Sharefin, 02:39:20 03/30/04 Tue Can Gold Sales Stop Germany's Brain Drain? Now that Europe's central banks have agreed on how much gold they can sell over the next five years, Germany is considering using its profits to stop top researchers from leaving the country. He may have the support of German Chancellor Gerhard Schröder, but Ernst Welteke, head of Germany's central bank, the Bundesbank, is having a hard time selling his idea to parliament. In January, Welteke proposed setting up a research foundation to distribute profits made from the sale of 20 percent of the Bundesbank's gold reserves. He reasoned this would go a long way in appeasing top German researchers, who complain that a lack of state funding is forcing them to look for jobs abroad. But Welteke's idea met with disapproval from the parliamentary budget committee on Wednesday. "I didn't hear from anyone who was in favor of Welteke's suggestion," said Deputy Finance Minister Karl Diller. Gold -- Sharefin, 02:24:42 03/30/04 Tue Silver set for a fall? Last week silver hit its highest level in six years as it crested the psychologically important $7/oz level, but analysts predict the metal's stay at the top will be short-lived as its fundamentals remain suspect. That may be, but the gold-silver ratio, a sum that market watchers do to measure the health of the silver price in relation to gold, suggests it may yet have some way to go. ~~~ In his report on the global silver-halide photographic market, Don Franz, an independent photographic researcher, says prints being produced on silver halide paper will rise 5% from 135 billion prints in 2000 to 142 billion prints in 2008. Silver Halide paper is increasingly being regarded as a potential saviour of the silver market, which has been rocked by the advent of digital photography in the last decade. Michael DiRienzo Acting Executive Director and Secretary at the Silver Institute in Washington, says a comprehensive, independent study will begin next month, documenting the real global demand for silver halide paper. He said demand for the silver enriched photographic paper, used to print digital photos, was the big question for the silver market, and one that needed to be answered in future. ~~~ “It is my long-held contention that because the COMEX silver short position is clearly too large, and therefore, manipulative, so that it cannot be unwound in normal market fashion,” he says. His view chimes with the conspiracy theorists who predicted a collapse of the so-called ‘gold cabal', who were expected to fold under the strain of covering their short positions. They, however, managed to survive the Comex switch to a net long position. He says dealers have never covered their short positions in silver, selling the metal habitually to realise their lower price expectations and keep their short positions safe. “This is about the clearest proof one can offer, proving the manipulation.” Peter Drago, director of public information at the office of New York Attorney General, Elliot Spitzer, said a request for the probe of the silver market “has been forwarded to the appropriate members of staff.“ Gold -- Sharefin, 02:11:42 03/30/04 Tue Gold Industry Growth Concerns Refuse to Go Away VANCOUVER, British Columbia (Reuters) - Bonanza goldfields or new mega mergers hold the key to further growth at the world's biggest mining firms, but both methods have some risks, gold mining analysts said. The analysts, speaking at last week's Prospectors & Developers Association of Canada conference, said exploration faced funding concerns as gold prices sagged from 1997-2002, and that left problems for producers trying to use that route to expand. "It's difficult for the senior gold producers to become growth vehicles, as there are likely few substantial greenfield projects available over the next few years," Gordon Bogden, of National Bank Financial's investment banking division, told the conference, an event that drew more than 7,000 delegates this year. Only a handful found elephant-sized deposits during the 1990s, he said. Gold -- Sharefin, 02:09:22 03/30/04 Tue The price of gold is pollution Federal agencies spar with each other and activists over mining expansion. BATTLE MOUNTAIN, Nev. -- On a high-desert mountain where prospectors first struck it rich in the 1860s, the world's largest gold mining company plans a major expansion that critics say could pollute the environment for tens of thousands of years. Newmont Mining Corp.'s proposed $200 million Phoenix project would cover nearly 10 square miles of northern Nevada, reclaiming parts of an existing 3,000-acre contaminated site and spreading gold mining operations over an additional 4,300 acres beginning in 2006. The Bureau of Land Management backs the project, but the Environmental Protection Agency agrees with a watchdog group's claims that the Denver-based company is dramatically underestimating the potential costs of environmental risks. "They are predicting acid will drain off the site for 20,000 years," said Tom Myers, a hydrologist and executive director of the environmental group Great Basin Mine Watch in Reno, Nev. Newmont has acknowledged that sulfuric acid could leak from the mine well into the future, so it plans to post money in a new environmental trust fund required under regulations President Bill Clinton ordered on his last day in office. The fund is intended to protect taxpayers by setting aside money to address any ill effects that might be detected in the years after a mine plays out and the company restores the site. Gold -- Sharefin, 02:06:40 03/30/04 Tue Venezuela retains US firm's gold in mines crackdown CARACAS, Venezuela, March 10 (Reuters) - Venezuelan authorities said Wednesday they had retained about $2 million of gold produced by a U.S. mining company in a crackdown against illegal exports, but the company said the case was an administrative mix-up. Hecla Mining Co. (HL), the largest private gold producer in Venezuela, said it was in full compliance with Venezuelan tax, export and regulatory laws. National Guard troops Tuesday took away 5,400 ounces of gold, produced by Hecla for export, from a secure warehouse in eastern Bolivar state. Gold -- Sharefin, 02:04:20 03/30/04 Tue France mulls gold sales amid pre-election protests PARIS, March 10 (Reuters) - The French government could resort to selling gold or using money from privatisations to raise cash to head off a growing protest by top scientists, a government minister said on Wednesday. Research Minister Claudie Haignere made the proposal after 2,000 scientists halted their administrative work at laboratories on Tuesday to demand more state support for research and stop a "brain drain" of researchers going abroad. "We have to find the means to finance the future research. That could be the Bank of France's gold, it could be the funds we get from privatisations," Haignere told Europe 1 radio. ~~~ The Bank of France has not sold gold in recent years and had no immediate comment on Haignere's suggestion, which echoed an idea floated in Germany by Bundesbank chief Ernst Welteke and backed by German Chancellor Gerhard Schroeder. Gold -- Sharefin, 02:02:46 03/30/04 Tue Gold & Jewellery Group and Dubai Metals and Commodities Centre to host first ever Dubai Pavilion at Baselworld 2004 jewellery exhibition The Gold and Jewellery Group and Dubai Metals and Commodities Centre, two of Dubai's largest trade organisations, have officially announced that they plan to jointly promote Dubai as an international hub at Baselworld – the world's leading show for watches and jewellery. Held in Basel, Switzerland, from April 15 to 22, the exhibition has been identified as the perfect opportunity to promote Dubai on the international marketplace. Around 2,100 exhibitors from the fields of watches, jewellery, precious stones and allied sectors will attend and the event is expected to attract 80,000 watch and jewellery manufacturers from all over the globe. The Dubai pavilion is one of the foremost new participants at Baselworld this year, the stand exceeding 60 meters in area. 'Our decision to exhibit at Baselworld a strategic step in the realisation of the Gold and Jewellery Group's vision to develop Dubai as a jewellery manufacturing centre of excellence, and also as an international hub for the trade and manufacture of products related to gold, diamonds, gemstones and precious metals. The group has identified Baselworld as the perfect launch pad from which to spearhead the group's international ambition to bring Dubai, and its many fantastic industry benefits, to the attention of the international jewellery trade,' said Andre Bisang, Gold and Jewellery Group Chief Advisor. Gold -- Sharefin, 01:59:37 03/30/04 Tue Union threatens 300,000-member strike South Africa's National Union of Mineworkers (NUM), South Africa's largest union, has started formal proceedings to launch a nationwide strike of its 300,000 members, in protest against job losses caused by the stronger rand. Gold -- Sharefin, 01:57:29 03/30/04 Tue Gold fuss in Nevada Newmont project stirs fund dispute over possible future cleanups BATTLE MOUNTAIN, Nev. - On a high-desert mountain where prospectors first struck it rich in the 1860s, the world's largest gold mining company plans a major expansion that critics say could pollute the environment for tens of thousands of years. Denver-based Newmont Mining Corp.'s proposed $200 million Phoenix project would cover nearly 10 square miles of northern Nevada, reclaiming parts of an existing 3,000- acre contaminated site and spreading gold mining operations over an additional 4,300 acres beginning in 2006. The Bureau of Land Management backs the project, but the Environmental Protection Agency agrees with a watchdog group's claims that Newmont is dramatically underestimating the potential costs of environmental risks. "They are predicting acid will drain off the site for 20,000 years," said Tom Myers, a hydrologist and executive director of the environmental group Great Basin Mine Watch in Reno. Fiat -- Sharefin, 01:53:55 03/30/04 Tue A Train Wreck In The Making Investors and consumers still seem relatively happy. After all, the stock market is rising, don't you know? We noticed. But we also notice a train wreck in the making. And it's all thanks to the Fed. The job market in the U.S. seems broken. Real income is declining. And consumer indebtedness is soaring. The Fed Reserve is worried. They are doing everything they can to keep Mr. Consumer happy, by pumping more and more credit into the economy. So far, it has worked. But it can't last. Stephen Roach, Chief Global Economist for Morgan Stanley, has been extremely critical of the Fed's policy, as are we. In a recent research note he said, "It is now time [for the Fed] to reload the monetary cannon. A failure to do so and keep the policy rate at 1% in nominal terms and 'zero' in real terms is a recipe for a never-ending outbreak of asset bubbles." In other words, the Fed is way behind the interest rate curve and should raise rates. But the rally in the bond market over the past two days suggests investors don't believe the Fed will raise rates any time soon. That means more of the Fed-created credit could leak out into stocks, bonds, and real estate, blowing up these bubbles even more. The problem is that these asset bubbles give consumers confidence to borrow more. It's the double-edged sword of the wealth effect. Chairman Greenspan's batch of bubble magic now extends well beyond stocks, bonds, and real estate. It has sheathed the consumer debt market. Consumer credit for January soared another $14.3 billion. Consumers are piling on mountains of debt to maintain their lifestyles. The bottom line is this: Once the Fed stops pumping up the economy, the wealth bubbles will pop and the debt bubble will remain. That's a scary thought indeed. Silver -- Sharefin, 01:52:50 03/30/04 Tue COMEX silver jumps to 16-year high NEW YORK, March 9 (Reuters) - COMEX silver futures rose 2.7 percent to a 16-year high on Tuesday, hurdling its 1998 peak on technical buying by large commodity funds and speculation that its price was still too low relative to gold. ~~~ Silver futures pushed above the $7.07 an ounce high seen in 1998, which was matched on Monday, and $7.10, where stop-loss buying accelerated the rally even more. Its high in 1998 came after billionaire investor Warren Buffett said he had bought 130 million ounces, shipping it from New York to London, where many believe it remains in his account and out of the market. ~~~ Although silver is also considered an industrial metal and has benefited some from a booming base metals market and the strong economic recovery this year, dealers said there was little fundamental justification for prices being so high. Most of the action this time has been on the COMEX, where funds have been buying silver outright and also buying it against sales of gold in what is described as a "ratio trade." Gold -- Sharefin, 01:49:58 03/30/04 Tue Appreciation of TL Boosts Demand for Gold Turkey has surpassed Saudi Arabia and Japan on its way to capturing fourth place in the gold market. Istanbul Gold Market (IAB) Assistant Manager Vedat Ozdan said yesterday that they have reached record numbers. If one were to compare it to 2002, 2003 was basically a 'gold' year. Ozdan emphasized that in general demand for gold is decreasing worldwide; however, Turkey is an exception to the rule. Ozdan indicated that appreciation of Turkish Lira (TL) against dollar has caused a serious spike in demand, thus necessitating an increase in gold imports. Ozdan said that gold imports reached 213.6 tons and silver imports reached 155.5 tons in 2003. Also, in the context of account capacity, Turkey achieved record numbers of 237.3 tons of gold, up 66 percent, and 272.2 tons silver, up 20 percent, when compared to 2002. Gold -- Sharefin, 01:48:47 03/30/04 Tue Making a modest case for investing in gold or not Central banks worldwide have long held part of their reserves in the form of gold. At the end of 2003, gold reserves at central banks and monetary authorities around the world stood at 950 million ounces, which is well below the level that prevailed in the 1970s. Gold reserves held by 11 Arab countries (Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, UAE and Yemen) amounted to 22.5 million ounces in 1991, remained steady at that level until 1994, and then declined gradually to reach 20 million ounces in 2003, a drop of 11 percent on their level in 1991. This was mainly due to a significant decline in the gold holdings of three countries Jordan, Yemen and Qatar while gold reserves in other Arab countries remained unchanged. Lebanon is by far the largest holder of gold reserves in the region, with 9.22 million ounces (286 tons) at the end of 2003, followed by Saudi Arabia with 4.6 million ounces, Kuwait (2.54 million ounces) and Egypt (2.43 million ounces). At 62.2 ounces per head, Lebanon has the highest level of gold to population in the world. The rise in gold prices recorded last year had led to a substantial increase in the value of gold held as reserves by central banks around the world. For the Arab countries, the value of gold reserves held by central banks and monetary authorities rose from $5.8 billion by end 2001 to $8.7 billion by the end of 2003, a gain of 50 percent or $2.9 billion. Lebanon, with 37 percent of the Arab world's total gold reserves, recorded a gain of around $1.1 billion last year. Holding reserves in the form of gold carries a substantial opportunity cost. Traditionally, gold earned no returns, unlike financial instruments such as bonds or bank deposits. This has changed with the development of the gold-leasing market. This market allows central banks to earn up to 1 percent a year (depending on maturity) on the gold holdings they are willing to lend to the market place, which is still lower than the return on other assets. Around 118 countries, including several in the Middle East, did lend more than 35 percent of their gold reserves in 2002. Lenny's Corner -- Sharefin, 21:31:42 03/29/04 Mon GENERAL COMMENTS: I have often written that the first leg of the bull market in gold, over the past few years, has been strictly and solely based upon the USD, and the correlation of gold to the Euro has been tracked as being 91%, a ratio that denies any doubt that gold was simply a negatively correlated proxy for the USD in foreign exchange markets. And, I have written that the next leg in the gold bull market will begin when the gold price begins rallying against all, or most, currencies. And now, almost right on time, we have seen gold rally mightily even as the Euro fell (about a cent and a half), and the USD rose fractionally. Gold is now rallying against all currencies, a most bullish phenomenon. The very key question is whether this is the start of something really important, or is just a short-term aberration of the trend that has lasted for years. Truth be told, I am not sure as of yet. But, if the gold price moves above $430 while the USD remains strong, I would be a total believer. Fiat -- Sharefin, 03:51:38 03/29/04 Mon Japan ends its £150bn currency intervention as economy firms JAPAN'S £150 billion campaign to weaken the yen and strengthen the dollar has officially come to an end, Bank of Japan sources have told The Times. The currency intervention campaign, which has provoked criticism in Washington and deep concern in London, is thought by Japanese officials to be no longer necessary because the country's economic recovery is gathering strength. Officials also believe that the country's export outlook is positive and that there is no more need to weaken the yen artificially. BoJ sources indicated that they would intervene in the market only when there was extraordinary volatility, but made clear that the unprecedented dollar purchases of the past seven months were formally over. The new confidence at both the BoJ and the Ministry of Finance means they will no longer buy dollars even to smooth the sort of sudden price spikes that have prompted intervention in the past. “Even if the market shows volatility we believe that things are not so fragile now,” the BoJ sources said in an exclusive briefing. “We have reached the point where we are confident that the Japanese recovery no longer depends on export strength . . . the interventions have served their purpose.” The dramatic policy switch draws a line under a controversial and record-breaking government effort to manipulate currency rates by supporting the falling dollar against the yen. The intervention drive, which began in earnest last September, has left Japan with paper trading losses of more than £50 billion. British and US authorities said that the colossal accumulation of dollar assets threatened to destabilise the US and international economy. Forum Archived -- Sharefin, 01:46:56 03/29/04 Mon The Forum has just archived itself & prior posts can be viewed here. |
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