Gold -- Sharefin, 00:01:21 02/07/05 Mon Gold is back - 25 years after it peaked About 20 years ago the US dollar suffered a massive fall, which swept away Lm88 million of Malta's reserves. The very next day Malta's reserves were re-organised to mask this tragedy. Government carried out a perfectly legal operation, which revalued Malta's gold reserves according to the market price prevalent at the time. A few years before that date, that is almost 25 years ago, gold had hit its all-time high of $850 an ounce, and people were storming the jewellery shops at Hatton Garden trying to realise family heirlooms in hard currency. Malta's gold revaluation story, which is widely known by all those who care for the money of their country, is yet another illustration of how gold can come to the rescue of investors to save them from difficulty, and sometimes from disaster. Malta had to keep gold as part of its international reserves as a requirement of the International Monetary Fund. This proved to be a great godsend in the mid-Eighties. Malta's investment in gold was the most lucrative investment the Central Bank was made to perform by the IMF and the one which proved to be the most useful in a highly embarrassing situation. Malta bought gold at $32 an ounce in the Sixties and revalued it in the mid-Eighties at a multiple of that price. Does Malta's dramatic Central Bank experience with gold carry any significance for the small Maltese investor? It certainly does. It is an experience which can easily be translated into the organisation of any portfolio, however small it may be. An investor would be foolhardy not to include one or two per cent of precious metals into his portfolio. Such a percentage, however, fluctuates with the character of one's particular situation, and it is a matter which every investor must discuss with his stockbroker. What is being pointed out in this instance is that gold has always been regarded as the best safeguard against disaster, and Malta is a country over which the scythe of the angel of death has hovered more than once, whether through wars or close encounters with natural disasters. Why gold is back The big reason why gold is back after 25 years is not because people are afraid that what happened in the Indian Ocean could very well happen under their very houses. The reason is back is because American President George W. Bush is carrying out a war in Iraq and he could very possibly carry out another in Iran. There is also the American twin deficit, the sinking dollar could put the world into a skid, as David Smith of the London Sunday Times said in a recent article. He was talking straight from the Davos Meeting of Microsoft where Bill Gates and Warren Buffett, the greatest investors in America, made strong statements against the dollar's decline. Gates called the dollar decline "scary" while Buffett said he would be betting against the dollar. The dollar and gold have over recent years acted like the opposite ends of a see-saw. Gold -- Sharefin, 23:59:45 02/06/05 Sun IMF looks at gold sale options for debt relief The International Monetary Fund is preparing a report on the potential sale of a portion of its gold reserves in a move that would help fund debt relief for poor countries but could unsettle the markets by threatening a drop in the price of gold. Finance ministers from the Group of Seven countries, meeting in London at the weekend, asked Rodrigo Rato, IMF managing director, to make proposals to the fund's shareholders at its April meeting. The IMF values its store of 3,217 tonnes of gold at about $8.5bn (€6.6bn) about a fifth of market value. Poor countries owe about $11bn to the IMF. If the IMF sold large quantities of gold, it could finance the debts owed to it by poor countries. An alternative option to be studied would be to revalue the gold in the IMF's accounts. This would strengthen its balance sheet, against which it could then write off lending to poor countries. But this is seen as an accounting gimmick that would do nothing to free up real resources within the fund. Gordon Brown, UK chancellor, who has long supported making better use of the IMF's gold, said the agreed move was an important step towards debt relief for poor countries, following a G7 meeting that focused on development aid and on Africa. Periodic Ponzi Update PPU -- $hifty, 21:07:54 02/06/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,086.66 + Dow 10,716.13 = 12,802.79 divide by 2 = 6,401.39 Ponzi Up 169.88 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 19:11:22 02/03/05 Thu China issues gold newspaper China has published the world's first gold newspaper, Xinhua news agency reported. The most expensive edition uses 500 grams of gold and costs 69,000 yuan ($8,100), while another uses 200 grams and costs 29,000 yuan ($3,500). The paper has been published by the China Economic Daily to celebrate the achievements of the last 10 sessions of China's top legislative body. The paper, a one-off, is called 'China's Flourishing Period'. Gold -- Sharefin, 03:48:52 01/31/05 Mon Embry: $800-$1000 gold is conservative Sprott Asset Management Chief Investment Strategist John Embry is adamant that gold will hit at least $800 per ounce as "paper money is going to hell in a handcart." In a presentation to the Mining Exploration Roundup in Vancouver, Embry said he believes even a $1,000/oz gold price may be conservative. Meanwhile, he reasserted his steadfast contention that the gold price continues to be manipulated. ~~~ Embry said that a bullion deal in New York recently told him that they cannot keep up with physical demand in Switzerland "and all the world's gold refineries are running full out trying to keep up with overall demand. This is very important because physical off take is the key to breaking the stranglehold that the Comex paper traders have maintained on the gold price to date. Their recent machinations are providing physical buyers with cheap gold and they can't believe their good fortune." "The only things you have to know to believe in gold at this juncture is that paper money is going to hell in a handcart, thus fuelling investment demand for gold, there is already an enormous gap between gold demand and mine supply that has been filled by central bank gold, and the central banks soon will not be able to fill that role. That equation adds up to dramatically higher gold prices," Embry declared. Periodic Ponzi Update PPU -- $hifty, 20:40:21 01/30/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,035.83 + Dow 10,427.2 = 12,463.03 divide by 2 = 6,231.51 Ponzi Up 17.88 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi HO SILVER ! $hifty Fiat -- Sharefin, 20:42:22 01/29/05 Sat Microsoft's Gates, World's Richest Man, Bets Against the Dollar Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar. ``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview in front of an audience of about 200 at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.'' Gates's comments reflect the same view as his friend Warren Buffett, the billionaire investor who has bet against the currency since 2002. Buffett said last week that the country's trade gap will probably further weaken the dollar, which fell 21 percent against a basket of six major currencies between January 2002 and the end of last year. ``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.'' Gold -- Sharefin, 20:41:18 01/29/05 Sat High prices fail to dent gold demand in India Indian consumers seem to have resigned themselves to high gold prices and are no longer postponing buying jewelry in the hope of prices falling in the future. "People have generally realized prices are not coming down to where they were a year ago. So they are buying jewelry, largely ignoring the rising trend in world gold prices," said Bhuwan Gaurav, head of north India operations at Tanishq, the country's largest branded jewelry retailer. ~~~ India is the world's largest importer and consumer of gold, with annual consumption around 800 metric tons. Around 99 percent of India's gold consumption is in the form of jewelry, making it the second largest jewelry market after the U.S. Indian demand for gold jewelry usually peaks in the November-December period, when the country celebrates a number of Hindu festivals such as Diwali and Durga Puja. This time of the year is also considered auspicious for weddings, in which gold is seen as an indispensable part. "In the 2004 wedding season, Tanishq sold 40 percent more jewelry than we sold in the 2003 season. This shows people are not cutting back on their jewelry purchases at all," said Gaurav. Gold -- Sharefin, 20:38:49 01/29/05 Sat Secret £1.55bn gold pile backs new trading funds ONE of the largest hoards of gold ever gathered outside a central bank has been accumulated at a secret address in London over the past few months. Gold bars with a value of £1.55 billion are understood to have been collected in a single vault in an anonymous building owned by HSBC. If melted into a single block, the 212 tonnes of solid gold would take up 11 cubic metres — roughly the size of a Transit Van. ~~~ Ironically, the reason for the accumulation of this hoard is the popularity of a new gold investment product that does away with the expense, risk and hassle of taking delivery of the metal. People and institutions in Britain, the US and Australia have been queueing to buy gold-backed, exchange-traded funds (ETF) — listed shares tradeable on the stock exchange but backed by actual gold. Gold Bullion Securities (GBS), the British and Australian ETF that listed in London in December 2003, has 60 tonnes of gold in the vault — a 30 per cent increase in the past four months. StreetTRACKS, its sister ETF in the US, which was launched in November, is now backed by 152 tonnes of gold deposited in the same vault. ~~~ Most of the demand has come from institutional investors. Strong publicity for the streetTRACKS product in the US has boosted demand, as has the slide in the gold price during the past few weeks, which some investors see as a buying opportunity. The gold stockpile in London is said to be secure. But it is not clear what would happen in the unlikely event that the hoard was stolen. GBS does not insure the gold and said it is HSBC's responsibility to keep it safe. Investors might have to rely on a claim against the bank in the unlikely event of a robbery, GBS said. HSBC is under no obligation to insure the gold. But the bank said it would be responsible for any gold lost through its negligence, fraud or wilful deceit. Gold -- Sharefin, 20:36:06 01/29/05 Sat Barclays' gold-backed security to launch on Friday A new U.S. gold exchange-traded fund, iShares COMEX Gold Trust, will make its long awaited debut on the American Stock Exchange (Amex) on Friday under the ticker symbol IAU, Barclays Global Investors said on Thursday. ~~ When it lists, the ETF will be the second U.S. gold security that can be traded like any stock on an exchange. The first one in the United States, StreetTRACKS Gold Trust (GLD.N: Quote, Profile, Research) , which is backed by bullion, made a smash debut on the New York Stock Exchange in November and has amassed more than $2 billion in value. Gold ETFs are designed to reflect the price of the precious metal, and have been aimed at drawing the investment capital that helped lift bullion to a 16-year high above $456 an ounce late last year. Similar funds have launched in Australia, South Africa and Britain but have not matched the value of the first such U.S. offering. Gold -- Sharefin, 20:32:23 01/29/05 Sat Medium/Long-term gold outlook positive The chief economist for Dundee Securities suggests that a new central bank agreement, heavy reliance on the U.S. dollar by Asian central bank portfolios and dehedging should all continue to be positive for gold. In a presentation Wednesday to the Mineral Exploration Roundup in Vancouver, Economist Martin Murenbeeld predicted that the medium- term outlook for gold is positive because of macroeconomic and supply/demand factors, such as further decline of the dollar, and higher debt levels that will pressure monetary policy to remain relaxed in the medium to long term. Dundee's base scenario suggests an average gold price of $461 per ounce this year. The company's more bullish scenario puts a 35% probability on a $506 average. Gold -- Sharefin, 20:31:23 01/29/05 Sat Germany backs British idea to use IMF gold for debt relief in poor countries DAVOS, Switzerland -- Germany backed Britain's proposal on Friday for the International Monetary Fund to write off debts of poor countries by selling or revaluing part of its gold reserves. The idea has been floated by British finance minister Gordon Brown, who repeated it on Friday at the World Economic Forum in the Swiss ski resort of Davos. Germany's finance deputy, Caio Koch-Weser, agreed that gold sales would be one way to fund debt relief and said the international community should now tackle the idea. "I believe we should discuss (IMF) gold sales as we did in the 1990s," Koch-Weser, who is secretary of state for finance, told Reuters. The idea is expected to be discussed next week at the Group of Seven finance ministers' meeting, where Germany is backing a three-tiered timetable on development aid proposals launched by Britain. Fiat -- Sharefin, 20:30:31 01/29/05 Sat China's gold output reaches record high The Chinese mainland's gold output reached a record high of 212.35 tons last year, according to an industry organization. The figure was up 11.75 tons, or 5.86 per cent year-on-year, said the China Gold Association. ~~~ China National Gold Group Corp, the nation's biggest gold firm and the parent of Shanghai-listed Zhongjin Gold Co Ltd, said that it produced 42 tons of the precious metal last year, a year-on-year increase of 25 per cent. "China's gold industry has good opportunities to develop rapidly based on the domestic huge market with a population of 1.3 billion," Wang said. The nation now ranks fourth in the world in terms of both gold output and demand. ~~~ The World Gold Council predicted last year that annual gold demand in the mainland is expected to grow to 600 tons in the coming years from 207.6 tons in 2003, boosted by the ongoing deregulation of China's gold market. Fiat -- Sharefin, 08:51:40 01/27/05 Thu Chinese analyst: Dollar 'no longer stable' DAVOS, Switzerland - China has lost faith in the stability of the U.S. dollar, and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a top Chinese economist said Wednesday at the World Economic Forum. At a standing-room-only session on the world's fastest-growing economy, Fan Gang said the issue for China isn't whether to devalue the yuan but "to limit it from the U.S. dollar." Fan is director of the National Economic Research Institute at the China Reform Foundation. But he stressed that the Chinese government is under no pressure to revalue its currency. Periodic Ponzi Update PPU -- $hifty, 21:25:28 01/23/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,034.27 + Dow 10,392.99 = 12,427.26 divide by 2 = 6,213.63 Ponzi Down 109.33 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Silver miners -- Silver miners, 04:42:53 01/20/05 Thu Silver Standard Resources Inc {SSRI} is an excellent example of a finely managed company that has spent the last twelve or so years building up a stable of global Silver properties that, hopefully, one day, can be brought into production {I own shares of this co}. They now have in the vicinity of a Billion {!} ounces of Silver resources and only one of their current fifteen global projects is being fast tracked to production…..the ultra-rich La Pitarilla project in Mexico. Every other project, out of this Billion ounce portfolio, remains under wraps or a ‘steady as she goes' progress because they are simply not economic enough for production at this level of Silver price. That speaks volumes to me. Sure, there are presently producing primary Silver mines but they absolutely have to be of uncommonly rich grade or they couldn't make a go of it. I will also advise you that the Silver miners that I talk to have an avowed non hedging stance…………they await higher prices before production and they will not slaughter their own market by dumping future production onto it. Extra kudos are extended to those like Silver Standard Resources that are also parking large amounts of their cash holdings in physical Silver. These are smart and determined managers and these are your coming swing producers in Silver. Get ready for higher Silver prices first.  Silver.......Anatomy of a CRIME{X} -- auspec, 15:54:35 01/19/05 Wed SILVER…….ANATOMY OF A CRIME{X} By Rusty McDougal Jan 2005 INTRODUCTION The purpose of this article is to explore several diverse variables that have an outsized impact on the silver market and then explain how these factors are currently converging towards setting Silver, finally, free from official price suppression. A serious student of today's Silver market misses the mark completely unless a full thirty to fifty years of American history are taken into account. Only when one comprehensively understands how these key issues over the decades are now bringing the crucial focal point of the Silver market clearly into view does tomorrow's price projection for Silver become obvious. THE PAPER TRAP Let me ask you some key questions. What percent of Americans do you believe understand the infamous monetary act performed by its own government in 1971? Of course, I'm referring to President Nixon's refusing to continue honoring the US commitment to exchange Gold for Dollars redeemed by foreign holders of our currency. What percentage of American, or global investors for that matter, comprehend that since that event there is absolutely nothing, nada, zippo backing any worldwide currency? These are rhetorical questions for any thorough student of hard money issues but the rest of the planet has long been locked in a Fiat Haze or a Fiat Mentality. Quite frankly, all most people know about “money” is that they desire a lot more of it than they have and they also want the ‘good life' having more of it allures them into believing it will bring them. The Masters of Fiat have subsequently mastered most and we now live in an Age of Fiat, though few recognize this fact and fewer still live differently for having recognized it. Because the populace doesn't understand Fiat money they are subject to its multitudes of abuses. Instead of having our ‘money' backed by the Constitutional mandate- Gold and Silver, or anything else of substance for that matter- we are left with the inevitable manifestations that Fiat brings with it….. confusions, distortions, and even dishonest weights, measures and markets. The Silver market has been especially prone to these Fiat maladies as will be shown subsequently. Let's look at the way the unenlightened perceive Fiat money. The simple fact is that 99 plus percent of the population cannot accurately explain the mechanism by which a 5 cent Coca-Cola in 1960 now costs approximately 85 cents other than to just parrot the word “inflation”. The Coke hasn't changed but the morphing monetary unit certainly has. Most people are simply bewildered by monetary mechanisms and cannot perceive them as being little more than a hidden tax as well as an illusion of “wealth”. How about the effects of the variable rate Fiat entity on the art and science of Technical Analysis {TA} in the precious metals arena? If Robert Prechter's 1990 or so Elliott Wave Analysis call for $100 Gold ever made any sense---- it certainly doesn't now. The unit of measurement has changed {depreciated} so much that this long standing call now borders on the absurd…… no offense to Mr. Prechter intended, this is just business as usual in the Fiat Haze we live in. All of us tend to adapt to a Fiat mentality or an attitude of Fiat and never realize we are trapped within this matrix. How about Silver? I first bought bars of Silver just a couple of years after Pres. Nixon reneged on Gold and happily paid somewhere near $4.30 per ounce for them. Hmmmm…. it seems as though Silver could have been had for that same amount of Fiat currency pretty much throughout the 1990's and even into late 2001. Did the amount of Dollars change per ounce of Silver purchased? No. Did the ounce of Silver change? No. The Dollar did change, dramatically so, over that twenty to twenty eight year period of time in spite of this Silver purchase anomaly. How does one continually rationalize the slip sliding Dollar and its impact on goods and services transactions? According to the murky world of Fiat, all other things being equal, something that cost $4.30 in 1973 should cost roughly $18 or more twenty eight years later. I'm making an estimate here and not making any form of Silver price prediction……just showing the folly of Fiat. Fellow Silver advocate, “Galearis”, showed me a website where Dollar inflation costs can be readily calculated over the years……………. http://eh.net/hmit/ppowerusd/ He also precipitated this essay with some of our Silver ideas being exchanged. Thanks. Several Silver experts have recently been discussing how difficult it is to use any form of Technical Analysis in the Silver market when the unit of measurement, the Dollar, is a fluctuating variable. There was even legitimate debate as to whether or not Silver is even in a bull market post 2000. In reality, one would need to see a graph of Silver priced in a form of “constant Dollars” in order to even make a certain call…….. the Dollar changes considerably even over a four or five year period of time. Is it a true Silver bull market if all Silver did was go up the same percentage the Dollar went down? Yes, it is confusing, but if you will look at the Silver graph at the excellent website http://www.the-privateer.com you will likely also see that Silver indeed has been in a clear bull market, at least a US Dollar based Silver bull, since late 2001 when it was priced near $4.30. A “true value” graph would factor in the variable Dollar issue and show a more accurate picture, but still a bullish one from my perspective. It is also important to know how Silver stacks up in terms of other key global currencies other than the one it is always priced in {US$}. We now live in an environment that has a hard time financially differentiating illusion from reality, crooked market from honest market, or dishonest money from honest money. There will be much more in the latter parts of this piece about COMEX Silver, but it is quite apparent that a lot of Silver ‘investors' don't know the difference either between the Fiat Silver offered up on CRIMEX and owning the real thing. The Age of Fiat has also taken its toll on the Silver market.Is it really that big of an extrapolation to go from $100 Bills with no backing to contracts of five thousand ounces of Silver without adequate backing? I can assure you COMEX knows Fiat well and they are simply one more leg of the Paper trap. THE DUMPING/GIFTING/PILFERING VARIABLE Now that we've pretty much maligned the official monetary units across the planet let's move on to other elitist misdeeds over the last one half century. What caused Silver to sell for $4.30 in 1973 and for the same $4.30 again twenty eight years later in 2001? Why exactly didn't it “inflate” like the Coke did during that time period {except for the rare spikes}? There are multiple reasons why this transpired but the key reason is that the Unites States' historic above ground stockpile of Silver has been supplied to the market over the last fifty years. This stockpile, which belonged to the citizens of the USA, has been reported to be as high as five Billion ounces in the 1950's. Calling it the proverbial overhang is quite the understatement, especially when various players closely connected to government desired possession and outright use of this treasure. They got their wish and have since dumped this amount of Silver onto the marketplace over these fifty plus years--- it's now essentially gone. That was quite the obstacle for Silver to overcome, no? Why call this act “dumping” when that term connotes putting excess supply into a market to gain competitive advantage? Did someone gain competitive advantage via this action? Yes indeed, they surely did. You can start out by looking at the infamous Silver Users Association to see who profited from pilfering the US strategic Silver supply. For an historical perspective of the Silver Users Association and their affinity for attaching public Silver on the cheap you may want to review Charles Savoie's informative article entitled “The Silver Raiders” at the Silver-Investor.com website: http://www.silver-investor.com/charlessavoie/raiders.htm In the interest of brevity, let me just state that these Silver transactions obviously didn't hurt the bottom lines of Kodac, Du Pont, Dow Chemical or any other Silver Users Association member to have assured access to the public's strategic metal, Silver, at dirt cheap prices over decades. I guess one man's Silver Users Assoc. is another man's Silver Abusers Assoc. --- the dumping, gifting and pilfering lines get pretty blurred in all the haze. There are other clear winners in this Silver dumping scheme—quite obviously those forces that prefer control of the easily printed Federal reserve Notes over Constitutionally mandated real money, Silver and Gold. Both metals have long ago been deemed to be in competition with Fiat and they are accordingly “governed” or suppressed. Silver and Gold are tiny markets in comparison to the near infinite supplies of Fiat and a little influence used to hold these metals down in price gives quite the bang for the buck {pun intended}. The most commonly used form of money over the centuries is SILVER … it's not real wise to leave Billions of ounces of that particular competition lying around just waiting to be re-monetized, is it? Let's keep that old Constitution hidden in the closet as well. Here are a few key quotes from the always exceptional Privateer: “In any discussion of the future of Gold, or of the price of Gold, the first thing that must be realized is that Gold is a POLITICAL metal. In the true meaning of the word, its price is "governed".” “This is so for the very simple reason that Gold in its historical role as a currency is fundamentally incompatible with the modern worldwide financial system”. “Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is NO escape because NO paper currency has any link to Gold”. “All of the economic, monetary, and financial upheaval since 1971 is a direct result of this fact”. “The global paper currency system is very young. It depends for its continued functioning on the BELIEF that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold.” END Copyright 2005-the Privateer http://www.the-privateer.com capt@the-privateer.com {Reproduced with permission} While these quotes are directly related to Gold they are also pertinent for Silver. One of my ongoing projects is to encourage Bill Buckler and his highly recommended Privateer not to overlook Silver. Personally, I think Silver had a much greater chance of being turned into a valuable but common commodity than Gold ever did, but the mere fact that Silver is also “governed” like Gold makes that a moot point. Quite apparently, those in control of global currencies fear both Gold and Silver {unlike Palladium for example} and have thereby inextricably linked them together as true competitors to Fiat, a.k.a. real money. So be it! To sum it up…….Billions of ounces of US citizens' Silver has been dumped onto the market sub economically to the benefit of elitist insiders as well as paper un-backed money. THE SILVER MINING VARIABLE No discussion of the future Price of Silver {POS} is complete without a comprehensive understanding of the Silver mining supply factor. My strong beliefs are that neither current nor future Silver mining supply can rapidly dampen the coming spikes in the POS. No help here for the Silver suppressors. I continue to say that the Average Cost of Production of a particular commodity holds the key to successful long term investing in that commodity. Most commodities do not have the existing above ground supply factor that both Silver and Gold have had to deal with over the years. Both Silver and Gold are therefore harder to make future price projections for because of the unusual ‘overhangs' of supply. Now that the largest known stockpile of Silver is GONE, the Average Cost of Production for an ounce of Silver can resume its normal influence over the POS. Clearly stated--- when you can purchase a commodity well below the average cost of producing a unit of that commodity and you are able to hold it on a long term basis……..you are making a high percentage favorable speculation. This is exactly the current case with Silver, especially now that Billions of ounces of Silver overhang have been used up. What exactly is the average cost of producing an ounce of Silver? That is a pretty tricky question in actuality and it will require analyzing different types of Silver production as well as doing some extrapolations. OK? Silver is produced both in primary Silver mines as well as in secondary Silver mines where it is produced as a byproduct of extracting other elements. By far the largest amounts of Silver are mined secondarily as a byproduct ………..estimates for secondary Silver mining range from 70 to 80%. This secondary Silver comes forth to a large degree regardless of the POS. Still, that leaves an approximate 25% or so for primary Silver production……..nothing to sneeze at and I'll tell you why shortly. Would one not expect a relatively lesser amount of primary Silver production during the decades of a Silver Bear market?? Of course, and, as the POS increases in the coming years we will see a larger and larger percentage of primary Silver being produced. Why? It is because the secondary Silver is, once again, produced pretty much at the same level regardless of a low or high Silver price. I'll continue with this line of thought. What's the most commonly known cartel that has largely controlled the price of their particular commodity for some thirty plus years. You got it right, OPEC. Do you know that OPEC only has control of 40% of world oil production per their own website? How do you reconcile their supposed iron grip control over the world oil price via this 40% influence yet see so many people totally dismiss primary Silver mining with its approx. 25% influence. It really makes no sense………until you, once again, recognize the historic anomaly in the Silver side of the equation-----the now gone Billions of above ground ounces. If there had been above ground oil inventories since the 1970's on the same scale as Silver's glut------- there is no way OPEC could have maintained their stranglehold over these several decades. It is a huge difference and Silver is just now beginning its new era because the vast horde is gone. Do you still want to dismiss primary Silver mining production as a non factor? These guys are starting to look more and more to me like the marginal or swing producer that eventually sets the price of production. Their influence is destined to be greater and greater each passing year. Unlike the secondary Silver producer the primary silver producer is acutely concerned about the average cost of production for an ounce of Silver…………he has to be or he will soon see his mine be closed. I have long heard that the average cost of producing an ounce of Silver is in the $7 range- in fact I've heard it so long I no longer believe it to be accurate but too low. Again, we're no longer talking about the same Dollar that world Silver is priced in {it's shrunk} and energy, environmental, and other key production expenses continue rising significantly. The recent spikes in Silver in 2004 to the $8 level hardly caused a stir amongst potential primary Silver miners………..they need sustained higher prices to even consider advancing developmental projects into production. Silver Standard Resources Inc {SSRI} is an excellent example of a finely managed company that has spent the last twelve or so years building up a stable of global Silver properties that, hopefully, one day, can be brought into production {I own shares of this co}. They now have in the vicinity of a Billion {!} ounces of Silver resources and only one of their current fifteen global projects is being fast tracked to production…..the ultra-rich La Pitarilla project in Mexico. Every other project, out of this Billion ounce portfolio, remains under wraps or a ‘steady as she goes' progress because they are simply not economic enough for production at this level of Silver price. That speaks volumes to me. Sure, there are presently producing primary Silver mines but they absolutely have to be of uncommonly rich grade or they couldn't make a go of it. I will also advise you that the Silver miners that I talk to have an avowed non hedging stance…………they await higher prices before production and they will not slaughter their own market by dumping future production onto it. Extra kudos are extended to those like Silver Standard Resources that are also parking large amounts of their cash holdings in physical Silver. These are smart and determined managers and these are your coming swing producers in Silver. Get ready for higher Silver prices first. If you are interested in reading a past Silver article I wrote that also delved into the particulars of Silver mining you may read: http://www.silver-investor.com/misc_articles/SilverHitsWall.htm COMEX PECULIARITIES The COMEX division of NYMEX is certainly an interesting place……….that much I'll readily grant them. I do take issue with many of their practices and will, once again, explain my particular perspective on their future as it does differ from other Silver advocates to a degree. Plainly, as the oft mentioned 5 Billion ounces of above ground Silver inventory were squandered in defense of Fiat {plus other reasons} the game had to be switched to one of mostly paper manipulation through COMEX derivatives. Much like OPEC controls the world oil price via their swing production variables…………COMEX now controls the world Silver price through their paper games. Let's just call it Fiat Silver because that is the normal extension of the Fiat standard we've been on since 1971. COMEX grants particular insiders ****authority to sell**** paper Silver contracts on a pretty much unrestricted basis. COMEX claims these short sellers actually have sufficient physical Silver backing for these outsized trades but have declined to fully disclose or clarify. It is quite obvious this claim is just one more fabrication. Anyone else notice the current cleanup regarding naked short selling in some of the US stock markets?? Hmmm. For now, and for a little while longer--- unbacked Silver paper is the swing producer and this is used as a price setting mechanism to keep the globe {yes, the globe} away from any form of honest money. What you are seeing here is the natural extension of the failed process that brought us Long Term Capital Management, Enron and accounting by Artie Anderson. The haze is metastatic. There is no need for me to repeat all the fine investigative work performed by Ted Butler and others as it is all well documented and quite accurate. COMEX Silver has received more than sufficient notice that reformation is overdue………………yet the CFTC and those in charge of supervising COMEX metals take zero action. Personally, I don't believe that complaining, pleading, documenting, reasoning, letter writing or mounting campaigns with this particular institution will ever bring it back to what could legitimately be called an honest market. Sorry. They had every chance under the sun to do the right thing and clean up the mess. Where exactly DOES this process end? There is no end to a paper game w/o someone calling the BLUFF. COMEX Silver has been a paper game for longer than I would care to guess........well past a decade now. It is nothing but a private play ground where those closest to govt. extract their due profits from the unsuspecting public and other parties foolish enough to participate in this charade. If you don't have a hotline to Robby Rubin and some of his buddies you likely should stay home. Collusion by insiders is the name of the game at this 'private club'. Physical is the only thing that trumps these paper games. I have yet to hear of any paper Silver shortages and never will ......... all the shortage reports are about physical Silver..... Silver someone, some where is trying to get their clutches on. Delays and shortages eventually lead to defaults and then the game is up. The entire globe is afraid of calling the CRIMEX paper bluff.........content participating in the game and content not taking home some of the dwindling COMEX Silver supply of a scant 100 Million plus ounces. Exactly how long DO you believe the COMEX Silver boys can continue to showcase 100 Million ounces of silver or even a ‘credible' 80 or 60 Million ounces????? Do you really doubt they can find storefront silver with all their global network of contacts?? This particular paper game may just go on for what you personally might consider a LOOOOOOONG time. It is one thing to force the commercials into covering their shorts------ something altogether different to get them to take their bloody hands off this market. Good luck. "We" get a buck or two in Silver price appreciation here and there.............they make money on the upside and the downside as well as retain control of the global price of Silver via this profitable 'market' {for them}. What if "Silver Hit the Wall" and no one was around to hear it.....?? As long as COMEX remains the world's Silver price setting mechanism.........there will be no crashing noises from the Silver 'accident'. It will be business as usual as long as the 100 Million ounces or so are showcased, right? There are credible rumors of global delays and shortages and there have been now for a couple of years.............still the COMEX boys don't flinch because they maintain their playground. Who loses? Silver miners, silver investors and anyone who gets offside the collusive CRIMEX silver moves. Who wins...? The COMEX collaborators win over and over again and long term Silver investors also win. If you don't know who the 'mark' is at the CRIMEX table-----guess who it is? Here are a few questions to ponder in relationship to COMEX Silver. Who exactly is stupid enough to continually play the patsy in this ongoing NYMEX ripoff? We hear that the “Commercial” entities pretty much have their way whether they go in a long direction or a short direction. The “Technical Funds”, “Hedge Funds”, and “Small Speculators” are portrayed as chronic victims…………..when exactly are they going to catch on that their odds of success are quite slim indeed? Are these repeat victims or is a new batch being regularly supplied? How long will it be until the Silver market is generally seen to be as controlled or manipulated as the Orange Juice market reportedly is? Are we there already? These are some of the reasons why I have such disdain for CRIMEX. They are a gnat's arse in the big picture of the entire silver phenomenon and they deserve to get flicked away {delivery would do it}. Those who live and die with every COMEX Silver move and statistic are investing themselves in this crooked Silver process when they should just step back, call a spade a spade, and call for the end the ridiculous paper fraud. Just maybe, at one time, COMEX actually was a 'fine American institution'. Those days are long gone. They've gone, once again, the way of Enron, Artie Anderson, Long Term Capital Management and the other national disgraces we've come accustomed to over the very recent years. RUN IT HONEST OR SHUT IT DOWN! ARE WE THERE YET…..? Exactly how close is Silver from truly being set free from its governance? You've seen how Silver has fallen prey to a paper trap in an Age of Fiat. The classic endgame of Fiat historically is in debt spiraling out of control and in obtrusive shenanigans becoming commonplace…………any bells ringing? Any stress to the Fiat {Dollar} system will automatically play out in one of its arch rivals—Silver. There should be little debate concerning the now gone Billions of ounces of Silver supply and this dramatically changes everything in the Silver market. Silver is an awesome speculation on this factor alone. I repeat this variable intentionally. The current mine supply absolutely won't bail out the Silver suppressors……….not until long after you see the likes Silver Standard's Billion ounces and the other new worldwide Silver mines and projects coming into production. This will only happen with a significantly higher POS. The prudent activities of the group of Silver developers waiting for higher prices are a sight to behold and they are a force to be reckoned with. What more can be said about the COMEX Silver manipulators other than, one way or another, their days of credibility are approaching endgame. Maybe no one will call their bluff any time soon------- it really doesn't matter………for you see…….they have been found out. COMEX Silver has become a stigma and an embarrassment as more and more sophisticated worldwide players have learned the facts. More and more Silver and Gold advisors and people in the ‘know' are flat out telling metal investors to buy physical metal and stay away from paper. This is snowballing now. Let me pose another question or two. If you are a silver aficionado and you either don't own physical Silver or you participate in some paper scheme like the one on COMEX……what the hell are you thinking?? You have two polar opposite bets here. If you run a Hedge Fund or Technical Fund and you are taking a repeated beating on COMEX Silver…….what the hell are you thinking?? The days of COMEX setting the global price of all Silver transactions are numbered. The very thing that silver adversaries have no answer for is knowledge and intelligent action by advocates of Silver. The precious metal authorities have exceedingly strained the boundaries of the Laws of money, markets, mining and nature and it is my sincere belief that all of these factors are now converging to restore what just might be termed order in the Silver niche. Something has to and will give…….soon. These unleashed forces have already placed us squarely in a Silver bull market and promise a spectacular one just ahead. Rusty McDougal rtmauspec@hotmail.com Permission is given to copy or forward this article to interested Silver parties. Gold -- Sharefin, 21:52:04 01/16/05 Sun Repurchase agreements, securities lending, gold swaps and gold loans: - pdf file Statistical treatment The statistical implications of gold swaps and gold loans/deposits are complex and have not been fully worked through. Work is still being undertaken by the Committee to address the implications. In particular, gold may be double counted with either a gold swap or gold loan/deposit if the party acquiring the gold were to on-sell it outright, because both the original owner and the outright purchaser would report ownership of the gold. In addition, there is the difficulty of having monetary gold being used in these transactions for purposes other than for reserve assets, and how (de)monetization would apply if the gold is sold for industrial purposes. Moreover, there is a proposal to treat (some) nonmonetary gold as a financial asset, rather than a commodity, and the outcome of that discussion may have further implications on the treatment of gold swaps and gold loans/deposits. Finally, how the “fee” for gold swaps and gold loans/deposits should be treated has yet to be resolved. All these matters are being considered by the Committee and a report will be taken to the AEG in due course. Periodic Ponzi Update PPU -- $hifty, 20:04:30 01/16/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,087.91 + Dow 10,588.0 = 12,675.91 divide by 2 = 6,337.95 Ponzi Down 8.33 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Fiat -- Sharefin, 00:36:19 01/13/05 Thu Thai foreign reserves seek refuge from US$ funds THE government wants to cut the proportion of Thailand's $50 billion worth of foreign reserves kept in US dollar-denominated assets, to cut the risks associated with the currency's roller-coaster ride on the forex markets. ~~~ According to the Bank of Thailand's (BoT) figure, the country's foreign reserve as of end-December last year totalled $49.8 billion, said Olarn. Over the past two years Thailand, Singapore, Malaysia, Hong Kong and India had each tried to reduce the amount of their foreign reserves invested in US dollar bonds, he said. From now on, he said the intention of the Thai government would be to keep only half its foreign reserves in US dollar bonds and the rest in a mixture of European and Asian bonds. Previously up to 80 percent of the national foreign reserves were in US dollar-based bonds, with the rest in a mixture of European and Asian bonds. Fiat -- Sharefin, 00:35:07 01/13/05 Thu ROBERT CHAPMAN COMMENTARY...... THIS PRETTY MUCH SUMS IT UP. Asian central banks have been closely watching US policy makers, to make sure there is no change in their support of Asian exports to the US. These are the nations that have been buying dollar-dominated assets, mainly Treasury bills, notes and bonds to keep their currencies from appreciating and at the same time to support the dollar and the US economy, which is one of their largest customers. On the other hand, the possibility exists that Asian nations may decide their industrial development is well enough advanced and that they no longer need to support the dollar and suppress the appreciation of their own currencies. In the Asian mind, there is always the possibility that the US might change their trade agenda. Perhaps a move back to tariffs. It does not really matter what the reason is as the potential exists for policy makers in a few Asian countries to immediately direct a sale of the holdings of their US assets, and re-direct the proceeds to other countries or to domestic uses. Such a shift would send US interest rates straight up and the dollar straight down. Stocks, bonds and real estate would fall and global trade would contract dramatically. There would be a reconfiguration of political and military alliances away from the US. Unfortunately, that is already in progress due to the invasion and occupation of Iraq and Afghanistan. There is no longer time left to slowly and methodically rebalance the system. The US has a limit to how many exports they can absorb and how much more debt the consumer can assume. There is no chance Asia can export its way out of its problem-dependence on US imports. It is now the policy of the administration to allow the dollar to slowly fall in value. This, of course, increases US inflation, interest rates and currency volatility without substantially improving the deficit. This is not the 1970s and 80s, we do not export enough goods now to substantially improve the balance of trade and our current account deficit. We advocate tariffs, which would work relatively quickly and would trigger counter-tariffs that would negatively impact the global economy. In place of that, someone has to show us a better idea because everything the US has done thus far by the administration, Congress and the Fed has not and will not work. The advocating of a new Marshall Plan for the world economy is unworkable. It is just the creation of more debt. The system has to be purged of its excesses. That could be accomplished by boosting savings, paying off debt, curtailing barrowing, cutting the federal budget deficit and shifting priorities from excessive conspicuous consumption, which would bring the current account deficit into balance. We agree with that procedure, but we also realize it will usher in a world depression. At this stage, in order to solve the problem a worldwide depression is totally unavoidable. Does anyone really think Asia and others are going to voluntarily revalue their currencies by 40% and allow the US to renegotiate its debt with the world for say, $.40 on the dollar? Foreigners would take the full hit and the US rewarded for its profligacy. The other new factor is 80% of those outside our country dislike George, the neocons, and their perpetual wars for perpetual peace. Does anyone seriously think foreigners, already furious with US foreign policy, will revalue and impose partial debt forgiveness? Hardly. The rest of the world has not been taken in by the fantasy of terrorism. They may be many things, but they are not dumb. The imbalance of our world financial system has been 65 years in the making. We never came out of the depression of the 1930s; we just had one war after another and a resultant piling on of debt. The world monetary system has not been stable since then and the flight from a gold-dollar standard on 8/15/71 sealed the fate of the dollar and the world monetary system, which are essentially almost all fiats. There is no balance in world trade today envisioned in textbooks. It is all one sided, we buy by printing money and issuing credit and they manufacture and sell to us taking fiat depreciating dollars in return. This has led to our agriculture having to be subsidized, our plants being moved out of the country and the remainder of our jobs being up for outsourcing. How can anyone with half a brain believe this can continue? The heart of our system is being ripped out. We are being destroyed. Does anyone get it? Don't they realize we have no friends and it is now every man for himself? When are we going to consider self-preservation? It once was a native instinct in America, where has it gone. Look at the mess created by the elitists who run our country, our banks, Wall Street, insurance companies, transnational corporations and our politicians, almost all of who are bought and paid for. Corporate elitists know no bounds; anything goes. One corporate scandal after another dealt with by fines. No one goes to jail and they rejoin the game to commit the same acts again. The American people look the other way. They now expect endemic corruption. It is a way of life. The motto of our times, “I didn't have sex with that woman.” Our disgusting society now devoid of morality, a society that condones abuse, rape, and torture by our government. Does it get any worse? We cannot spend our way to prosperity, nor can we steal our way to prosperity. We have been living in a false world for three generations. At the heart of this monstrosity is the privately owned Federal Reserve the main control instrument of the elitists. The creator of the capital. The misallocator of capital and the creator of asset bubbles. Today they have outdone themselves. Three asset bubbles at once, bonds, stocks and real estate. They should be cited for their total and complete ineptitude, unless of course, they have deliberately brought the US economy to its knees in order to force America to accept world government by their design, which is total human enslavement. If these are our risk managers, we may as well jump in a hole and pull the hole in after us. The Fed has lost control. Since 1989, they have been using what band aids they have left and they are just about out. They no longer effectively regulate monetary policy and our economy. Our economy is not in the hands of our debtors. The repo pool, M3 and bank lending are all stopgaps. The Fed has lost control and they are operating in the dark Adding to our woes, we have George and the neocons in their madness creating one war after another. Another two years of this madness and we will have nuclear warfare; we will not have to worry about our financial system. There simply will not be one. It will be barter with gold and silver coins. The US has allowed Europe and Asia to form blocks, which have altered our ability to impose policy solutions. That has been by deliberate design by elitists in order to bring about world government. These blocks, free trade and globalization have been deliberately set in motion to relieve America as a world leader and render it to an equal or second-class position among nations. Free trade and globalization is not the answer, it is the problem and now that there is no consensus because of US military adventurism, there can be no balancing. Nations are making other arrangements to protect themselves and they all are anti-American excepting England. The world is sick of being pushed around by Anglo American cartels backed by superior firepower and assassinations. We are responsible for a government run by elitists now out of control. The elitist edifice is collapsing and they do not know what to do to stop it. No matter how you cut it the bottom line is at best the American people, and those of the world are going to have a drastically reduced living standard, and that is the best-case scenario. America's unsustainable indebtedness is coming to an end. This is something Americans are ill prepared for and it could have monstrous social ramifications. This indebtedness has forced America into a weakened state. Thus, our President on orders from other elitists is pursuing perpetual war to mask the financial deterioration we are mired in. Robert Chapman / International Forecaster Gold -- Sharefin, 19:14:58 01/11/05 Tue StreetTracks Gold Draws $1.3 Bln, Best Start for ETF A fund created last month to invest in gold bullion has attracted $1.29 billion from investors, making it the most successful start for an exchange-traded fund since the securities were created in 1993. ~~~ Demand for the new gold fund, started Nov. 18, has been spurred by fund managers barred from owning physical commodities who want to bet that this year's rally will continue. Gold prices reached a 16-year high of $458.70 an ounce in October. Some investors also buy gold as a hedge against a decline in the dollar. ``We use it as a parking place for money,'' said Gregory Orrell, president of Livermore, California-based Orrell Capital Management Inc., which has 7 percent of its $76 million in cash and gold-backed shares. ``Instead of holding cash, we can put it there.'' Gold -- Sharefin, 19:02:03 01/11/05 Tue In The Cards For Gold - Spectacular Upward Move The keys to the gold market in the short term are the direction of the US dollar, the strength of physical demand and the resolution of the extended speculator position on the Comex. However, the real bull markket will get underway when gold begins to rise against all currencies. Fiat -- Sharefin, 18:52:39 01/11/05 Tue Fed warns of more US rate rises The US looks set for a continued boost to interest rates in 2005, according to the Federal Reserve. Minutes of the December meeting which pushed rates up to 2.25% showed that policy-makers at the Fed are worried about accelerating inflation. ~~~ Rapid release The release of the minutes just three weeks after the 14 December meeting was much faster than usual, indicating the Fed wants to keep markets more apprised of its thinking. This, too, is being taken in some quarters as a sign of aggressive moves on interest rates to come. The key Fed funds rate has risen 1.25 percentage points during 2004 from the 46-year low of 1% reached not long after the 9/11 attacks in 2001. That long trough "might be contributing to signs of potentially excessive risk-taking in financial markets", said the Federal Open Markets Committee (FOMC), which sets interest rates. Fiat -- Sharefin, 18:50:24 01/11/05 Tue Bond bubble, American-style We believe a nasty popping of the bond-market bubble lies in wait for investors. Why? In short, yields are too low, bond prices too high, and quality spreads too tight. The gargantuan rally, which actually peaked in June 2003, as evidenced in the monthly chart of 30-year bond futures below, should soon be history. The primary source of the "wildness" seems easy to pinpoint ahead of time -- this time. It's the US Federal Reserve. It was the engineering of the emergency Fed Funds rate, to save the world from the clutches of deflation (denying this as the proper cleansing agent for economic sins past) that proved most impressive as bubble fuel. It's now the long march toward the elusive "normalisation" of benchmark interest rates that will draw Zeppelin-like comparisons from observers as long-bond prices head toward earth. We wouldn't be surprised to see a surprise in the form of inflation scare, major hedge-fund collapse, or foreign bank reserve reallocation to hasten the descent of fixed income prices across the entire spectrum: from Treasury to junk. Those holding junk bonds, now the darling of yield chasers, will soon understand the moniker. Periodic Ponzi Update PPU -- $hifty, 19:11:07 01/09/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,088.61 + Dow 10,603.96 = 12,692.57 divide by 2 = 6,346.28 Ponzi Down 132.94 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Periodic Ponzi Update PPU -- $hifty, 21:03:17 01/02/05 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,175.44 + Dow 10,783.01 = 12,958.45 divide by 2 = 6,479.22 Ponzi Up 14.65 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Periodic Ponzi Update PPU -- $hifty, 22:06:35 12/26/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,160.62 + Dow 10,827.12 = 12,987.74 divide by 2 = 6,493.87 Ponzi Up 101.31 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 22:38:08 12/20/04 Mon A New Gold Rush The yellow metal is an attractive investment once again, thanks to the steep rise in gold prices (due to the weakening dollar) and the increasing availability of institutionalised ways to buy and sell gold. The gold rush is reflected in the country's two commodity exchanges, Multi Commodity Exchange (MCX) and National Commodities and Derivatives Exchange of India (NCDX), where futures trading in gold began a year ago. Volumes have since increased dramatically from a mere 100 kg in gold to the current over 10,000 kg a day. Says Joseph Massey, deputy managing director in MCX: “Both gold and silver are currently among the most liquid commodities in the futures market.” Hyderabad-based Karvy Commodities Broking Pvt Ltd, which manages retail investors who trade in commodities, says that as much as 70 per cent of the trading volumes of its clients is in gold and silver. ~~~ At a macro level too, the numbers clearly show phenemonal demand for gold in India this year. The World Gold Council (WGC) estimates that consumer demand for gold between July-September this year went up by 28 per cent in rupee terms and 16 per cent in tonnage terms over the previous year. Compare that with a mere 3 per cent growth in 2003 over the previous year in tonnage terms and the hunger for gold becomes evident. More importantly, Rajan Venkatesh, director India of bullion in Nova Scotia Bank, says: “The peak season for buying gold lasts from October to March,” indicating the trend is likely to contnue well into the new year. Interestingly too, the offtake of gold for purposes of investment (in bars, coins etc) has been growing faster than jewellery. Between January and September, gold offtake in rupee terms went up by 21.6 per cent as compared to 19.9 per cent for jewellery. Trends in previous years indicate that it was jewellery that enjoyed an edge over bullion. That trend has been reversed this year. Last year, gold for investment peaked at 90 tonnes but WGC estimates that it would clear the 100-tonne mark, which constitutes about a fifth of all gold imported to India. There are sound reasons for the new lease of life that gold is enjoying. Suggests WGC managing director Sanjiv Aggarwal: “The rise in gold prices, the fear of potenial inflation fuelled by oil prices (gold is a good hedge) and the need to diversify risks, especially their exposures in bonds and shares, and an overall strong economic growth has prompted the demand for gold this year in India.” Gold -- Sharefin, 22:31:25 12/20/04 Mon Giving gold a foreign touch An executive of Shanghai Gold Exchange yesterday said that China's sole national gold bourse has made submissions to the central bank to attract foreign gold traders. "We are striving to invite qualified international banks and gold firms to directly conduct transactions in our exchange," said Wang Zhe, general manager of the gold exchange. "The move will build more channels for us to integrate with the international gold market," Wang said yesterday at an international forum on global gold outlook, infrastructure support and market development in Beijing. At present, there are 128 domestic membership traders in the gold exchange, including commercial banks and gold producers and processors, which conduct spot transactions using renminbi. ~~~ The gold council predicts that gold demand in China will grow to 600 tonnes annually in coming years with the opening of gold investment businesses from around 200 tonnes now. Gold -- Sharefin, 22:29:36 12/20/04 Mon Central banks might not meet 500t/year ceiling CENTRAL Banks could drop positive clues about the gold price by not meeting the 500t/year quota as determined by the Washington Agreement, said Kelvin Williams, marketing director for AngloGold Ashanti. The renewal of the Washington Agreement, signed this year, places a total 500t/year limit on all official sector sales. In an interview with miningmx, Williams also said central bank attitudes towards gold had changed because its profile as a store of value had been rehabilitated. “The central banks have started to behave in an orderly basis and on an ordinary basis, treating the gold market with the same kind of respect that they would treat the market of a currency of another central bank,” he said. Gold -- Sharefin, 22:27:36 12/20/04 Mon Chinese investors take a shine to gold SHANGHAI (Reuters) - It took the Caishikou department store just hours last month to run out of gold bars stamped with a Year of the Rooster motif, so Beijing's top gold retailer asked customers to register by phone for a second round. Nearly 3,000 did, salesmen said. In China, gold is back in vogue. The country's growing urban middle class is lining up to cash in on a spectacular 30 percent rally in the precious metal's value over the last two years to a 16-year peak on Dec. 2. The rise is partly because the U.S. dollar, long China's hard currency of choice, has dived nearly 30 percent over the same period. Chinese investors have about 225 million yuan ($27.2 million) saved in gold, state media say. That's a drop in the ocean compared with total savings of $1.3 trillion, but a sea change from when gold hoarding was forbidden after the Communists took power in 1949. Exporting gold is still banned, but a thriving home-grown market now allows the metal to trade relatively freely. In line with late leader Deng Xiaoping's recognition that "to get rich is glorious", the Shanghai Gold Exchange opened for business in 2002, reviving memories of the city's status as a gold trading hub in the 1930s. Some 235.35 tonnes of gold changed hands on the exchange in 2003, and 170.04 tonnes in the first half of this year alone. ~~~ Analysts see China's consumption of gold growing at most 6 percent annually in the next year or so, but growth would be in double digits by the end of the decade. Consumption is still about a tenth that of the United States. Per capita gold consumption is 0.16 grammes in China, against 2.70 grammes in Hong Kong and 1.42 grammes in the United States, said Jon Bergtheil, global metal strategist for JP Morgan. But as incomes rise alongside red-hot economic growth rates in excess of 8 percent, China could tighten the global supply-demand balance. ~~~ Gung-ho investors in gold also dream of the rewards should China's central bank raise the percentage of gold in its reserves to the same ratio as the European Central Bank. That would mean China could buy more than 4,500 tonnes, to add to the 600 tonnes now held, Bergtheil said. "If you want to be a super-bull on gold, you assume that China decides gold is a viable alternative to the dollars it's storing up and which are increasingly being devalued," he said. "Nobody wants to go along that argument route at the moment because the numbers are simply too staggering." Silver -- Sharefin, 21:46:40 12/20/04 Mon Silver's Three Flags Silver as a vehicle for popular savings, has turned out to be a very effective flag that has gathered support amongst the principal Mexican political parties, which in everything else are deeply at odds with one another. This past 30th of November, the 31 governors of all the states that make up the Mexican Republic sent a communiqué to the “Ways and Means” Committee of the Mexican House of Representatives, in which they expressed their unanimous approval of the monetization of silver and urged the Committee to approve a bill which aims to achieve precisely this objective. 176 Mexican newspaper writers put their signatures to full page declarations by the Journalists' Club in the main newspapers of Mexico City, also in support of the monetization of the “Libertad” silver ounce. A permanent organization of ex legislators also expressed their support for the measure in favor of the monetization of silver. A poll by national T.V. Azteca, revealed that 96% of viewers approved of the monetization of the silver ounce, when asked if they were, or were not, in favor. The Bank of Mexico, Mexico's Central Bank, is adamantly opposed to this measure. It does not want the public to have the opportunity of saving in monetized silver. It wants to maintain its unblemished monopoly on the printing of Mexico's money, which has no intrinsic value, and does not want the public to have any alternative for its savings, other than bills or bank deposits. Gold -- Sharefin, 21:44:38 12/20/04 Mon U.S. gold ETFs unlikely to steal volume from COMEX New gold-backed securities traded on U.S. stock exchanges are unlikely to poach trading volume from the New York Mercantile Exchange's giant COMEX futures market, traders and analysts said on Wednesday. Some market players have speculated that exchange-traded funds that track the price of gold will draw volume away from COMEX because the equities market as a whole is much more liquid than futures. Indeed, individual investors and entities such as hedge funds and pension funds are more likely to enter the gold market via ETFs like bullion-backed streetTRACKS Gold Shares (GLD.N: Quote, Profile, Research) , proponents of those new securities say. StreetTRACKS, sponsored by the World Gold Council, an industry body, offers investors an alternative to handling physical gold, which can be costly and complicated to store and insure. ~~~ Although turnover in streetTRACKS is high, gold market sources say the greater amount of gold backing the benchmark COMEX contract, versus the amount of bullion stockpiled in the streetTRACKS, should keep large players glued to COMEX. Open interest in COMEX gold, which stood at a towering 22.6 million ounces of metal in the benchmark February contract on Tuesday, reflects much more gold than the roughly 3 million ounces of bullion currently stockpiled in streetTRACKS. ~~~ One New York-based gold trader at a large bank said the debut of the ETF should actually draw new business to the COMEX market. "The NYSE specialist for streetTRACKS is hedging in the COMEX market, so trading in the ETF comes back to the COMEX anyway," he said. Gold -- Sharefin, 21:42:03 12/20/04 Mon China sees gold-buying surge to hedge against declining dollar - report China is seeing a gold-buying surge as a hedge against the weakening dollar and negative real interest rates, the South China Morning Post reported, citing figures from the China Gold Society and analysts The Hong Kong-based newspaper said the gold buying has prompted a booming trade not only in bars, coins and jewellery but also "paper gold", in which the investor does not take possession of the metal, but trades it like other financial instruments Trading on the Shanghai Gold Exchange in the first 10 months of the year reached 515,447.1 kg, a rise of 45.35 pct over the same period last year, the paper said ~~~ "The weakness of the US dollar is the main reason for the rise in gold," Xu Ming, a gold specialist with the Bank of China, was quoted as saying "A weak dollar is the long-term policy choice of the US government and governments are in the process of reducing their dollar assets. The European Central Bank will not intervene in the market. All this is putting pressure on the dollar." The paper said gold is one of a limited number of investment options for Chinese, who hold more than one trln yuan in simple bank deposits This year thousands have reduced or closed their US dollar savings accounts in favour of yuan-denominated accounts because they expect a revaluation of their currency The trading of paper gold is officially available only to residents of Shanghai with a current account with the Bank of China, which started offering the service in November last year Gold -- Sharefin, 21:37:14 12/20/04 Mon Kondratieff Winter Watch As Ian Gordon points out, there are times during the Kondratieff cycle when stocks and bonds are the best possible investments and gold is one of the worst investment choices. Stocks do best in the Kondratieff spring and autumn, and bonds do best in the autumn and winter, after the debt repudiation process is completed and before the summer of the new Kondratieff cycle begins. Spring, summer, and autumn are the “heyday” periods of the fiat money system. However, due to excessive money creation, which occurs in gold and non-gold backed systems, the winter is a cleansing period for fiat money during which the excesses of the system are purged. So the Kondratieff winter, which begins with stock market peaks, is absolutely the worst time for stocks, and not until the carnage of the winter is over is it a good time to buy bonds. By contrast, this is absolutely the best time to own gold and gold stocks. The second best time to own gold and gold stocks is during the inflationary summer, which in the current cycle, ended with the $850 gold price blow-off. But now, we face the Kondratieff winter, which is by definition a breakdown of fiat money. Now we want to opt out of the fiat money system that the O'Higgins system would lead us to, because the system itself is getting horribly out of balance and thus highly risky. What has to happen to trigger the Kondratieff winter deep freeze? It has been a long, long time since mainstream American policy makers have believed in free markets and that they should allow markets to self adjust when doing so inflicts pain on citizens and especially when it causes the ruling elite to see their wealth vanish. What needs to happen to set the self-adjusting market mechanism of deflation in motion so as to undo excessive money creation by the ruling elite? What needs to occur is a liquidity crisis that spins out of control and away from manipulating policy makers, who are better known according to the Wall Street Journal as the “Plunge Protection Team.” ~~~ A systemic breakdown of that kind, when fiat money spins out of control is simply addressed. If you know the building is on fire, you get out. The international monetary system and global economy is “on fire” so to speak and not 1% of Wall Street perceives any danger than Alan Greenspan can't solve. But that is why you subscribe to a “fringe” letter like this. If CNBC were advising you of these dangers, you wouldn't need us. Of course CNBC won't tell you of these problems because they have too much invested in creating a business as usual illusion. So we continue to prepare for survival of the impending deflationary Kondratieff winter. Gold -- Sharefin, 21:34:30 12/20/04 Mon How Can You Tell If Your Gold Jewelry Is Real? If you're shopping for gold jewelry — or hoping to receive some — this holiday season, you may end up paying for gold but getting glorified tinsel. How can you be sure you're getting the real thing? "20/20" went on a gold-buying spree — with hidden cameras rolling — at jewelry stores and markets in Dallas, Maryland, Virginia and New York City and learned that if you're not careful you may end up buying "fools' gold." In each store, "20/20" shoppers asked to look at gold jewelry that was at least 10 karat, and the clerks were quick to promise that it was. All of the clerks even agreed to put it in writing. "20/20" asked for that guarantee, because anything less than 10 karats — or about 42 percent real gold — can't legally be sold as gold in this country. "Anything under 10 karat in the United States is a pretty yellow metal, but it's not gold," said Cecilia Gardener of the Jewelers Vigilance Committee. She says shoppers can easily be ripped off by watered-down gold. ~~~ With sales of gold jewelry soaring -- reaching $16 billion in 2003 -- attorneys general in several states found under-karating to be a common problem. The worst cheating apparently occurs with the less expensive 10-karat and 14-karat pieces. ~~~~ At one jewelry shop in New York, a "20/20" shopper bought what was supposedly 10-karat bling-bling. Upon testing, it turned out to be only eight karat. Down the street, salespeople at another shop had confidently sold "20/20" three gold charms, even guaranteeing them. But when "20/20" returned to the store and told the manager that one of the guaranteed charms was not real gold, he was unconcerned. He blamed the problem on his supplier. At another New York jewelry store across town, "20/20" found not only under-karated gold, but also an apparent ignorance of the law. "20/20" had purchased three pendants there, and not one tested as legal gold -- each was one karat shy of 10. The manager didn't think that was a problem, saying she couldn't test every piece of jewelry. Gold -- Sharefin, 21:29:21 12/20/04 Mon Gold Rises as Bundesbank Says It Won't Fulfill Gold Sales Quota ``There is no certainty that the Bundesbank will sell meaningful quantities of gold,'' John Reade, UBS AG's London- based precious metals analyst, said in an e-mail. ``Even if they say that other central banks will sell their quota, if the bank remains a non-seller then the arithmetic makes it look less likely that the full 2,500 tons will be sold. This will be positive for the gold market.''  Gold -- Sharefin, 21:27:21 12/20/04 Mon Buba refuses to sell gold to help fill holes in German budget FRANKFURT: The Bundesbank refused on yesterday to bow to pressure from the German government, which has been calling on the central bank to sell a large part of its gold reserves and use the proceeds to bring down Germany's soaring public deficit. Under a recently renewed gold agreement, signed with 14 other European central banks, the Bundesbank can sell up to 120 tonnes of gold from its gold reserves each year for the next five years. With total gold reserves of 3,400 tonnes, the German central bank is the world's second-biggest holder of gold after the US Federal Reserve. But the Bundesbank announced in a statement on Monday that it would make only very limited use of that option and sell only eight tonnes of gold in 2004. The gold would be sold to the German Finance Ministry for use in its regular gold coin minting programme. ~~~ “The Bundesbank's gold reserves are part of our national wealth and have great symbolic value for the population,” central bank president Axel Weber said. Periodic Ponzi Update PPU -- $hifty, 23:46:35 12/19/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,135.2 + Dow 10,649.92 = 12,785.12 divide by 2 = 6,392.56 Ponzi Up 56.92 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 20:52:22 12/16/04 Thu The Scary Part Of The Gold Price Curve Right now, and for the past few months, some BIG players who love the all you can eat smorgasbord of casino playthings we call the financial markets are losing their interest in playing the straight FOREX markets. These boys gobble up "goodies" in 10 million dollar chunks the same way you buy 10 more shares of Newmont. They have entered the COMEX sandbox. The COMEX gold market was almost always settled for dollars and not metal at expiration or exercise option. Many of the big boys who formerly settled in cash as winners on their side of the long bet are standing for delivery at the contract buy price. They don't necessarily have to take the metal off the floor. It can stay in COMEX vaults and be "theirs" after payment. They don't care about the "traditional" nature of the candy store they are in; they are using the COMEX to buy metal and take possession. It is a simple way to buy huge chunks of gold at essentially single price points without chasing the price higher. The whole pile has to be delivered to the winning (buying) longs at the single contract price agreed upon weeks or months earlier. Most of the physical purchase action used to occur on the LME. Not anymore. Do not underestimate the significance of this, which is good for those long gold and intelligently selected gold shares. Too much of this buying without "offsetting" paper shorts (which will eventually become ineffective for price suppression) will literally cause this market to IMPLODE. The COMEX will have to exploit all of the "force majeure" loopholes in their bylaws and contracts with rule and margin changes; maybe even halt or shut down this paper market. I assure you that this is very likely if standing for delivery increases and continues. When the dollar was worth something, taking cash dollars out at COMEX contract settlement was convenient, simple, routine and standard procedure. With US dollars becoming "more worthless" at the present, demanding and taking real gold at the agreed price is becoming the routine for some players. It simply CAN NOT continue for very long along the scary part of the gold price curve. Crimex Silver Ounces..........Who Wants Em??? -- auspec, 18:15:57 12/13/04 Mon I bet you all know someone who's eyes lit up while reading the following article: http://www.silver-investor.com/dm_dec04_letsgetphysical.htm Fair use Snippitright Snip: "I wish to take delivery of approximately 50 million ounces of silver bullion from the exchange over the next twelve-month period, which is less than 5 million ounces on a monthly basis. This is well under the current reporting requirements but just to be safe and to make certain the CFTC protects buyers of silver as well as sellers of silver I would like to know if my paying for and asking for what I purchased to be illegal in any way?" "I have studied the silver market carefully these past several years and have noticed that only 50 million ounces or so are available in the registered category and therefore plan to stop my purchases at that amount." "Finally, I wish to inform you that all required contracts for the above outlined procedure are already in place for the next delivery month, again if there is any problem with buying silver off the Comex in the manner outlined please bring it to my immediate attention." END ********************************** Comments: First of all.......there are some 15 Million fewer silver ounces than when David Morgan wrote this letter. Whoever recently stated that Crimex silver is NOT a physical market failed to mention that it represents itself as exactly a physical market. If it IS an honest market then it can fully withstand this 50 M ounce delivery..............I have repeatedly advocated this very same thing...........ligitimately taking down physical silver. My guess is that this is Midas' recent reference to a major silver event!!!! Take your pick.................tell the world that Crimex cannot deliver substantial legal amounts of silver for purposes of profit or allow the takedown and take Crimex down with it. You choose CFTC. Stroke of genius here by DM because he has taken the DIRECT approach.......................tell em exactly what and why he is intending. Either the 'ants' do it over time or an individual or several individuals do the deed {for purposes of PROFIT!!!!!!} IS THIS MONTHLY 5 m OUNCE TAKEDOWN ALREADY IN PROGRESS?? Stay tuned............... German Hyper Inflation -- $hifty, 22:26:43 12/12/04 Sun PBS page The link is to a PBS web page about the German hyper inflation. Its not too long a read and some of it sounds like the US today. Snip " Before World War I Germany was a prosperous country, with a gold-backed currency, expanding industry, and world leadership in optics, chemicals, and machinery. The German Mark, the British shilling, the French franc, and the Italian lira all had about equal value, and all were exchanged four or five to the dollar. That was in 1914. In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado. "My father was a lawyer," says Walter Levy, an internationally known German-born oil consultant in New York, "and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread." The Berlin publisher Leopold Ullstein wrote that an American visitor tipped their cook one dollar. The family convened, and it was decided that a trust fund should be set up in a Berlin bank with the cook as beneficiary, the bank to administer and invest the dollar. In retrospect, you can trace the steps to hyperinflation, but some of the reasons remain cloudy. Germany abandoned the gold backing of its currency in 1914. The war was expected to be short, so it was financed by government borrowing, not by savings and taxation. In Germany prices doubled between 1914 and 1919. End snip Fair use for education and all that. $hifty Periodic Ponzi Update PPU -- $hifty, 22:17:20 12/12/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,128.07 + Dow 10,543.22 = 12,671.29 divide by 2 = 6,335.64 Ponzi Down 34.44 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Periodic Ponzi Update PPU -- $hifty, 22:09:09 12/05/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,147.96 + Dow 10,592.21 = 12,740.17 divide by 2 = 6,370.085 Ponzi Up 57.985 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty  Gold -- Sharefin, 19:52:18 12/05/04 Sun Gold prices soaring, but Indians continue buying New Delhi, Dec. 5 (PTI): Gold prices are soaring but this has failed to affect the buying spree in the Indian wedding season - in fact people are buying more, fearing a further hike in prices, those in the business say. Contrary to popular belief that rising gold prices affect buying negatively, apprehensions of a further price hike have led to panic buying. This has resulted in higher sales as compared to the last few years, says Madan Mohan, Member, Karol Bagh Jewellers Association. "People know that the gold rate in the domestic market is linked to international prices and beyond anybody's control here. So fearing a further hike, they are buying and there is no stopping," says Mohan. "Moreover, there are certain market segments which are not affected by prices -- the rich and those buying for wedding purposes. However, those buying for festive reasons would still buy, though in less quantity," says G.S. Pillai, President, Gold Souk. "Also those who have more disposable income at hand are buying now," he says adding "the Gold Souk is experiencing amazing footfalls of 2500 customers on average over weekends," says Pillai. "These are serious buyers who come for buying purposes irrespective of the prices," he says. Says Harman Dhillon from Tanishq, "November saw an increase in 40 per cent in sales over the same period last year." Gold -- Sharefin, 19:45:57 12/05/04 Sun The Greatest Bull Market of all Time is about to Commence Since 2001, commodities, such as gold, silver, nickel, copper, lead, zinc, cotton, soya, cocoa etc have been in a bull market that mirrors the decline of the US$, in which they are all quoted on world markets. As the US$ continues its descent to unfathomed depths, the clamor for hard, commodity based assets accelerates. Furthermore, the Fed, now facing the chess game equivalent of "Zugzwang" (every move it now makes will lose), can do nothing other than stand by and watch the dollar decline continue until the point is reached where the US faces an "International Dollar Crisis". Then, like it or not, the Fed has to act and act resolutely. At this juncture, interest rates will skyrocket, bringing the great "Equities - Bonds - Real Estate Party" to its ultimate demise; i.e., a total train wreck that will make 1929 look like a children's tea party. Before all this happens, the precious metals will have their revenge on the Fed's great FIAT experiment. Gold, in particular, will rise to US$ dollar prices that people would currently regard as completely insane. However, it is worth bearing in mind that in the 1930's, gold was fixed at US$16 an ounce. There are now US$185,000 in global circulation for every known ounce of gold on this planet. The rush for gold has already started, as the yellow metal enters Phase 2 of the greatest gold bull market the world has ever seen. In 2005, this rush is going to develop into an all-out stampede. Right now, all the world's precious metal mining companies put together have a market capitalization less than the Coca Cola company. This is going to change by entire orders of magnitude. When the bond, equity and real estate markets finally collapse, as they will, the scramble for precious metals will become the greatest mankind has ever seen. It will be propelled by mans most basic instincts: fear and survival. Remember, no man or country has ever issued digital currency or paper currency in the unconstrained, uninhibited and totally uncontrolled manner in which the US has done. No country has ever amassed debt on such a mind boggling scale. No country has ever allowed its savings to collapse to such a pitiful level. The misallocation of resources, and dislocation of the economy is quite simply enormous and unsustainable. These vast distortions cannot continue much longer. Like the laws of pure science and economics, the correction is long past overdue as the fundamentals that drive society take over their natural control of events. Mr. Greenspan and his Federal Reserve are just mortal human beings, after all. There is one much mightier than he. Hubris has always been, and will always be, mankinds' ultimate undoing. Gold -- Sharefin, 04:27:55 11/29/04 Mon Brown's Gold Sale Cost the UK £1.5 billion Gordon Brown has cost the British taxpayer almost £1.5 billion by selling off half of Britain's bullion reserves just before the gold price soared. The Chancellor sold 395 tonnes of gold at an average price of $275 an ounce between 1999 and 2001, raising £2.3 billion for the Exchequer. At the time, gold was at a 20-year market low. It has now risen to more than $450 an ounce. Had he waited, he would have raised a little over £3.77 billion, a difference of more than £1.47 billion. Gold -- Sharefin, 04:25:49 11/29/04 Mon Gold is having a party, but investors aren't coming. Gold closed at $449 an ounce Wednesday, up 76% from its February 2001 low of $255. The yellow metal has gained 8% this year, vs. 6.3% for the Standard & Poor's 500-stock index. And gold funds, which invest mainly in gold-mining stocks, have been the top-performing mutual fund category the past five years, jumping 154%, vs. 11% for the average stock fund. But investors have yawned. . The U.S. Mint has sold 465,500 ounces of gold Eagle bullion coins this year, vs. 484,500 ounces last year. . Investors have put just $396 million into gold mutual funds this year, less than 1% of the $139 billion that has poured into stock funds. New money into U.S. Global World Precious Metals, the top-performing stock mutual fund the past three years, has been "modest," says Frank Holmes, the fund's manager. . Subscriptions to Gold Newsletter, among the oldest gold advisory publications, are about where they've been for 10 years, editor Brien Lundin says. Gold prices have been pushed up by the dramatic fall in the dollar. Investors often view gold as a currency of last resort, a commodity that retains its worth even when paper money falls in value. The dollar hit a new low against the euro Wednesday, trading at $1.32 per euro. But investors have been more interested in buying foreign currencies than gold. International income funds, which invest in foreign bonds, have raked in an estimated $2.4 billion this year. "We haven't seen broad public interest in gold yet," Lundin says. Gold -- Sharefin, 04:25:12 11/29/04 Mon Gold bars welcomed by Chinese consumers With more cash in their wallets, many Chinese are looking for ways to diversify their investments to guarantee the security of assets and to even seek a profit. For many, gold seems to be the favored choice. The second batch of 2005 New Years Celebration Gold Bars have just gone on sale in Beijing and being warmly received by potential consumers. Ranging from 50 to 1,000 grams, the gold bars are selling at 128 Yuan per gram, an increase of 3 Yuan compared with the first batch of bars that sold out quickly just a week ago. ~~~ The bullish price reflects a strong market demand. The enthusiastic public response is obviously very good news for gold producers. One industry organization forecasts that the gold sector will see a big rise in profits for the year. According to statistics of the China Gold Association, in the first three quarters of 2004, profits from its 300 member gold producers totaled more than 2 billion Yuan, or US$245 million, a jump of 35 percent year on year. Gold output amounted to some 149 tons during this period, an increase of 7 percent. Total gold demand in 2004 is expected to rise to 220 tons from 207 last years. Gold -- Sharefin, 04:22:32 11/29/04 Mon Gold bars welcomed by Chinese consumers With more cash in their wallets, many Chinese are looking for ways to diversify their investments to guarantee the security of assets and to even seek a profit. For many, gold seems to be the favored choice. The second batch of 2005 New Years Celebration Gold Bars have just gone on sale in Beijing and being warmly received by potential consumers. Ranging from 50 to 1,000 grams, the gold bars are selling at 128 Yuan per gram, an increase of 3 Yuan compared with the first batch of bars that sold out quickly just a week ago. ~~~ The bullish price reflects a strong market demand. The enthusiastic public response is obviously very good news for gold producers. One industry organization forecasts that the gold sector will see a big rise in profits for the year. According to statistics of the China Gold Association, in the first three quarters of 2004, profits from its 300 member gold producers totaled more than 2 billion Yuan, or US$245 million, a jump of 35 percent year on year. Gold output amounted to some 149 tons during this period, an increase of 7 percent. Total gold demand in 2004 is expected to rise to 220 tons from 207 last years. Gold -- Sharefin, 04:16:11 11/29/04 Mon Solid Gold Reasons to Own Gold Gold -- Sharefin, 04:12:45 11/29/04 Mon Gold demand growth outstrips production The pressure is on for physical gold. Demand is growing and production is falling. ~~~ The figures, compiled for the World Gold Council by GFMS Ltd, imply that consumer demand rose in most countries around the world, resulting in an overall 5.7 percent tonnage increase in total demand (defined as jewellery, retail investment, industrial and dental offtake). The increase over the first nine months of the year is of 6.5 percent over the equivalent period of 2003. In dollar terms, total demand in the third quarter was almost 17 percent higher than in the third quarter of 2003. Supply contracted sharply, dropping by 22.4 percent to 828t, against 1066t in the third quarter of last year.India, the world's largest gold market, registered an increase in demand of 16 percent over Q3 2003. Silver -- Sharefin, 04:04:03 11/29/04 Mon Look for silver lining in gold ETF success Perhaps, no one watched the events of the past week more closely than the "silver barons." As streetTRACKS Gold Trust reaped $1.3 billion in its first three days of trading, and set a volume record for derivatives on its opening day, one can bet the minds of these pure silver company CEOs were chomping at the bit to unveil next generation of commodity-backed ETFs. The silver ETF is definitely coming, and may even make its debut early next year. Silver producers are fairly tight-lipped at this point because of a "quiet period" as the proposal is being drafted to submit to the SEC. One thing is for certain, however, the first U.S. silver-ETF is not going to be a clone of the World Gold Council gold ETF model. Gold -- Sharefin, 03:55:51 11/29/04 Mon Gold heading for $1,000? Even a year ago, it was unthinkable that the world's most powerful central banker would trash his country's own currency. Yet last Friday, Alan Greenspan, chairman of the Federal Reserve, the US central bank, said that, given the size of the US current-account deficit, “a diminished appetite for adding to dollar balances must occur at some point.” However, Greenspan was merely confirming knowledge widespread among specialised investors. His words have re-ignited tarnished gold bugs everywhere, especially those who have been calling – for nearly 25 years – for gold to again reach $1,000 an ounce. For the meantime, however, it appears that gold at $500 an ounce would be like taking candy from kids. Gold -- Sharefin, 03:49:32 11/29/04 Mon Gold-backed ETF attracts $419 mln after three days NEW YORK, Nov 23 (Reuters) - A recently launched gold-backed exchange-traded fund attracted $419 million in its first three days of trading, bringing its total assets to $1.3 billion, a research company said on Tuesday. The ETF, called streetTRACKS Gold Shares (GLD.N: Quote, Profile, Research) , attracted $589 million last Thursday, the first day it was offered to the public, and an additional $241 million on Friday, said Santa Rosa, California-based TrimTabs Investment Research. Though the company said investment flows for the security turned negative on Monday, with outflows of $411 million, its success guarantees the creation of more commodity-based ETFs, said Carl Wittnebert, director of research at TrimTabs. "There's been nothing like it in the history of ETFs," he said in a statement. Gold -- Sharefin, 03:47:37 11/29/04 Mon Barrick Says Buoyant Gold Doesn't Deter Hedge Cuts VANCOUVER, British Columbia (Reuters) - Today's higher gold prices won't stop Barrick Gold Corp. from reducing its hedge book, the world's third-biggest gold miner said on Tuesday, adding that it remains "very committed" to bringing down its bulky forward sales position. "A higher gold price does not preclude us from reducing the position. As prices are high we can blend lower-priced contracts (with sales at spot prices) and still experience earnings and cash flow growth," said Jamie Sokalsky, Barrick's chief financial officer. He declined to give a hedge reduction target for 2005. To protect itself in times of lower gold prices, Barrick, as did many other gold producers during the 1990s, sold millions of ounces of unmined gold at preset prices, leaving it with the biggest hedge book in the industry. Now that gold prices have leapt by 80 percent since early 2001, many of these contracted sales are at below-market prices. This has angered investors and led Barrick to pledge to whittle down the thick pile of contracts, even if it means selling its gold at weaker-than-market levels. ~~~ Fiat -- Sharefin, 03:44:30 11/29/04 Mon On State Street: Economic 'Armageddon' predicted Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish. But you should hear what he's saying in private. Roach met select groups of fund managers downtown last week, including a group at Fidelity. His prediction: America has no better than a 10 percent chance of avoiding economic "armageddon." Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, "It struck me how extreme he was -- much more, it seemed to me, than in public." Roach sees a 30 percent chance of a slump soon and a 60 percent chance that "we'll muddle through for a while and delay the eventual armageddon." ~~~ In a nutshell, Roach's argument is that America's record trade deficit means the dollar will keep falling. To keep foreigners buying T-bills and prevent a resulting rise in inflation, Federal Reserve Chairman Alan Greenspan will be forced to raise interest rates further and faster than he wants. The result: U.S. consumers, who are in debt up to their eyeballs, will get pounded. Gold -- Sharefin, 03:42:10 11/29/04 Mon Activists attempt to strip gold of its lustre Campaigns such as No Dirty Gold drill home the social and environmental costs of mining the precious metal ~~~ That indifference changed when Ms. Glynn, now 26 and a graduate student in environmental science at Newfoundland's Memorial University, began to talk to Indonesian villagers about the impact of gold mining on their communities. During a second, 16-month stint with CUSO (a Canadian international development organization) in 2001 and 2002, she visited Buyat Bay in north Sulawesi. There, residents claimed that tailings from Newmont Gold Corp.'s Minahasa mine had poisoned fish, contaminated water with mercury and arsenic, and precipitated a rash of medical problems. Those allegations have since become a colossal headache for Denver-based Newmont, the world's biggest gold producer. Backed by studies conducted by the World Health Organization and Japan's Minamata Institute, it insists that its operations have not polluted the bay. But the claims persist and the argument has long since ceased to be simply a local issue. In September, five Newmont employees were detained by Indonesian police; they are now on "city detention," awaiting the results of a government probe into the pollution claims. A $543-million (U.S.) lawsuit has been filed by villagers against the company. Fishermen in Buyat Bay complain they can no longer sell their fish. And the long-running saga has raised questions about Indonesia's investment climate and regulatory regime. Gold -- Sharefin, 03:11:09 11/29/04 Mon The global bull run in gold At the end of November last year, gold prices in India had soared past Rs 6,000 for 10 grams. At that time, I had quoted Richard Russell, an octogenarian international forecaster who wrote, “There are a few times in an investors life when the opportunity for huge profits lies ahead. Such periods in the stockmarket occurred in 1932, 1942, 1949, 1974 and 1980-82. People who loaded up with common stocks at those times and held those stocks made fortunes. I believe another such a time is now. And I'm referring to the current young bull market in gold.” Russell said in his newsletter, “I believe gold below and even somewhat above $400 an ounce is dirt cheap.” He insisted that it is the cheapest thing going over a five-year period. The reason: The US government, states, cities, corporations and individuals are currently loaded with $32 trillion in debt. On top of that, the US government has additional unfunded liabilities of around $44 trillion, all of which will have to financed. One year later, a worsened US situation, the continued war in Iraq and steep oil prices have seen a whole phalanx of economists, central bankers and policymakers saying the same thing even more emphatically. At a time when the world has begun to question the dollar standard introduced in 1971 and is actively discussing a return to the gold standard, we as holders of nearly 10% of the world's gold need to communicate this debate to a nation full of gold devotees. Especially since the production and supply of gold in 2003 was lower than the previous year, while the price of the yellow metal and demand for it rose. Listen to some voices reported by The Daily Reckoning (a highly regarded investment newsletter) in the last week: “I have not come to praise the dollar, but to bury it,” James Grant proclaimed to the attendees of last week's New Orleans Investment Conference. “I am bearish on the dollar and bullish on the thing that glints in the sunlight, is recoverable at five parts per billion from the earth's crust and has no central banker,” he said, making a case for gold ownership and against the dollar. Gold -- Sharefin, 03:07:32 11/29/04 Mon Bank of France will sell 500-600 tonnes of gold over five years French Finance Minister Nicolas Sarkozy and Bank of France Governor Christian Noyer have finalized discussions on the sale of a portion of France's gold reserves. Noyer confirmed his intention to sell 500 to 600 tonnes of the 3,000 tons of gold kept in vaults underneath the Bank of France headquarters in Paris over the next five years, the Finance Ministry said in a statement Friday. The sale will be accompanied by an increase in cash reserves. Noyer will determine the rate at which the gold is sold, paying particular attention to the precious metal's market price. Gold -- Sharefin, 02:18:47 11/29/04 Mon US investors catch gold ETF fever U.S. investors got a raging case of gold fever with the debut of the first domestic exchange-traded fund for gold Thursday. The StreetTRACKS Gold Trust (GLD) began its first day of trading on a high note as $550 million were put into the fund on the NYSE Thursday. Meanwhile, gold bullion peaked at $445.90 an ounce, but dropped to $439.65 while spot gold ended the day at $441.25 an ounce. GLD opened trading at $44.43. By the end of the market day, the shares closed down to $44.38 on a volume of 5,992,000 shares. Blocks of 100,000 shares are redeemable into gold bullion. Shares are priced at about 10% of the price of a gold ounce. Boston-based StreetTRACKS is authorized to issue as many as 120 million shares or $4.5 billion in gold-backed equity. Sponsored by a subsidiary of the World Gold Council, the shares are designed to track the price of gold and trade like a continuously offered security. The shares cannot be created without the appropriate amount of gold first being delivered to the trustee, the Bank of New York. HSBC's London vaults serve as the actual custodian of the trust's gold bullion. The trust creates and redeems shares only in baskets of 100,000 shares. UBS Securities, LLC in NYC is the purchaser of the offering of 2.3 million underwritten shares. The World Gold Council's members have provided funds to cover ordinary operating expenses from 2004-2006. The Gold Council's World Gold Trust Services division co-created the trust. StreetTRACKS is the brand name of several ETFs managed by State Street Global Advisors, the marketing agent for the fund. The company has established a website for the new offering www.streettracksgoldshares.com and offers a toll free phone number at 866-320-4053 for information. The offering of the gold ETF shares is intended to overcome the logistics of buying, storing, and insuring gold. This has been a barrier for some institutional and retail investors, including pension funds, which have not been able to participate in the gold market. These investors may now buy gold-backed shares from the trust. Analysts say the successful launch of the gold ETF could open the door for other commodity-linked ETFs. For instance, silver producers have been pushing a silver-backed ETF. Gold -- Sharefin, 02:10:17 11/29/04 Mon Dubai stands out on gold and jewellery map The high volatility of gold prices in the last two years has not weakened consumer spirit in the Dubai gold market. It keeps growing here. The chief executive of Damas Jewellery and chairman of the Dubai Gold and Jewellery Group (DGJG), Tawhid Abdullah told Gulf News that Diwali gold sales in Dubai this year have been 23 per cent higher than last year's. Gold -- Sharefin, 02:06:21 11/29/04 Mon Gold Hedges Being Thrown Overboard Apace It was widely expected that gold dehedging would begin to slow after Newmont [NEM] closed out most of its contracts in 2003. Rather, dehedging has remained steady at roughly 400 tonnes per year for the last three years according to research released this week by Mitsui Global Precious Metals, Halliburton Mineral Services and Virtual Metals. The firms regard “Hedge Impact” as the most meaningful measure of hedging activity and calculate that the global “book” fell 4.3 million ounces to 59.7 million ounces by the end of the third quarter. That is two-fifths lower than the hedging peak that occurred in the third quarter of 2001. ~~~~ Measured in committed ounces the global book fell was 4.1 million ounces lighter at to 62.8 million ounces, or 48 million ounces short of the peak in the second quarter of 2001. ~~~ Whilst market-to-market valuations have so far not proved problematic, the violent deterioration in the numbers does not portend well. Despite the 7% decrease in Hedge Impact, and a mere 7% increase in the quarterly average gold price, the gross mark-to-market valuation tumbled more than one-third to negative $5.1 billion from negative $3.1 billion in the previous quarter. Of 54 companies that hedge, only seven still enjoy a positive mark-to-market. Three have a negative mark-to-market valuation larger than the value of their annual production. Periodic Ponzi Update PPU -- $hifty, 21:22:12 11/28/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,101.97 + Dow 10,522.23 = 12,624.20 divide by 2 = 6,312.10 Ponzi Up 48.33 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Periodic Ponzi Update PPU -- $hifty, 22:58:19 11/21/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,070.63 + Dow 10,456.91 = 12,527.54 divide by 2 = 6,263.77 Ponzi Down 48.40 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Periodic Ponzi Update PPU -- $hifty, 21:23:29 11/14/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,085.34 + Dow 10,539.01= 12,624.35 divide by 2 = 6,312.17 Ponzi Up 98.93 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 20:52:55 11/13/04 Sat Gold rush: ETF expected to launch with metal hitting highs Investors have long been denied a cost-efficient way to invest in gold bullion without actually buying the metal and stashing it away. At the same time, many institutional investors and mutual funds are barred from purchasing gold or other precious metals directly. However, that will likely soon change as a gold bullion-backed exchange-traded fund is expected to launch on the New York Stock Exchange under the ticker symbol "GLD" as soon as next week. ~~~ Individual investors wanting to invest directly in gold bullion have traditionally had to pay the high costs associated with transporting, insuring, and safely storing it. Although traditional open-end mutual funds that invest in gold-mining stocks exist, there is no convenient or efficient way to invest directly in gold bullion, aside from perhaps buying gold coins and keeping them in a safe-deposit box at your local bank. "Gold has lacked a sensible product that ordinary investors can buy," Norman said. "Yes, you can buy equity in the underlying mining companies, but it's been difficult to get access to the gold market." Since mining companies are affected by factors not related to the gold market, they may not provide as good a hedge against inflation and market shocks, which is one of the main benefits of owning bullion. Still, existing precious metals and mining funds have posted sparkling returns of late in the bull market for gold. ~~~ Many observers expect gold ETFs, which would mark the first time investors could buy the precious metal on an exchange like a stock, to be a runaway success. "The gold ETFs could bring a new raft of institutional and possibly retail investors into the gold market," Norman said. "I would be shocked if they did not garner $1 billion in assets in the next year or so, and firmly believe they have the potential to do much better than that," said Jim Wiandt, editor of the Journal of Indexes. Gold has long been a stalwart hedge against falling markets, and gold ETFs would also allow investors to go short, he added. With largely-untapped markets soon gaining access to gold with the new ETFs, some analysts are expecting gold to continue its climb. "Gold is definitely poised, and we think we'll see $450 before Christmas," Norman said. "This bull run has legs, and we've yet to see the best." Gold -- Sharefin, 09:14:48 11/11/04 Thu Gold Supply Under Pressure Merrill Lynch Investment Managers have a favorable outlook for gold, underpinned primarily by emerging pressures on supply, a leading member of the firm's London-based natural resources team said late Tuesday. Amid "relatively static" demand, falling mine output over the coming years and the potential for a reduction in European central bank sales stand to prolong the rally in U.S. dollar gold prices, Merrill gold fund manager Evy Hambro explained during a visit to Sydney. "We are definitely in a positive environment...and that's going to remain until the fundamentals deteriorate, and we don't see that changing," Hambro said on the sidelines of a presentation to financial advisers. ~~~ Strong currencies in many of the leading gold-producing countries are actually forcing production cuts, despite the high U.S. dollar gold price, Hambro explained. "We've got a situation where the mined production of gold is going to be declining for the foreseeable future," he said. According to London-based precious metals market consultant GFMS Ltd., global mine production in 2003 remained flat about 2,590 tons. While there are pockets of new supply emerging in countries like Russia and China, Hambro said global output will inevitably suffer from a lack of exploration. "One of the big changes in the mining sector as a whole has been a significant cut (in) exploration expenditure, which is obviously reducing the probability of finding new projects to exploit," he explained. Thus, gold reserves are increasingly being mined at a faster rate than they are being replaced, Hambro said. "For example, (Newmont Mining Corp.) has to find seven million ounces of gold a year just to stand still; in order to grow, they've got to (increase reserves) more than that," he said of the world's largest producer. The same is true of other top producers, such as South Africa's AngloGold Ashanti Ltd. (AU), Hambro said. "You don't find seven million ounce gold mines every day," he said. Prospect Of Falling Central Bank Sales "Very, Very Exciting" A less certain, but nonetheless bullish, component of Hambro's views on gold supply is the uncertainty surrounding European central bank sales. Early this year, 15 European central banks renewed their five-year-old gold sales accord, known as the Washington Agreement, for a further five years. Under the terms of the original deal, which expired in September, the signatories agreed to limit aggregate sales to 400 tons a year, or a total of 2,000 tons over the life of the accord. While the extension raised the annual cap to 500 tons,this is "still well within the amount the market can tolerate," Hambro said. But the growing prospect that total sales will fall below the 2,500 ton five-year cap, possibly by a wide margin, represents significant upside potential for gold, he noted. "The question mark surrounding this agreement is who is actually going to sell the gold, and this is what is posing the big opportunity in the market today," Hambro said. Large sellers under the first deal, including the Swiss central bank and the Bank of England, are likely to all but stand aside this time, according to analysts. "The original speculation focused on the Germans, the French and the Italians," Hambro said, referring to possible major sellers under the new agreement. Initially, government officials from the aforementioned countries were widely believed to be in favor of liquidating large chunks of their bullion reserves to balance their budgets and retire debt. But in recent months, disagreements between government officials and central bankers, surrounding the mechanics and legal aspects of deploying the proceeds from gold sales, have diminished the likelihood of large sales by France and Germany. "And the Italians have come out... and said they're not going to sell their gold at all and have no plans to do so," Hambro said. The market is thus currently trying to figure out who might actually sell bullion, and musing over the possibility that total sales might fall well short of the 2,500 ton limit, Hambro explained. "If gold is not sold under this agreement, then the market will be very, very exciting for a number of years to come," he said. "The market could not tolerate an absence of supply to this degree without prices having to rise." Gold -- Sharefin, 09:11:47 11/11/04 Thu Dubai-India to set up gold exchange DUBAI: Dubai, the self-styled "City of Gold", and India, the world's largest consumer of the yellow metal, are forming a Dubai Gold and Commodity Exchange (DGCX) to become operational in the second half of 2005, officials announced yesterday. The Dubai Metals and Commodities Centre (DMCC), Multi Commodity Exchange of India (MCX) and Financial Technologies (India) have signed a memorandum of understanding to create the exchange in Dubai, a significant player on the international gold market which provides a gateway to India, where 700 tonnes of physical gold are consumed annually. Gold -- Sharefin, 08:53:11 11/11/04 Thu IMF must learn the golden rule Brown's plan would certainly increase the flow of funds into poor countries. As far as debt relief is concerned, he wants a 100% write-off of multilateral debts, paid for in part by the sale or revaluation of the IMF's enormous gold reserves and in part by greater generosity on the part of creditor countries. Britain has said it will pay 10% of the debts owed by poor countries to the World Bank and the African Development Bank as they fall due each year, and is challenging other countries to follow suit. The doubling of aid to $100bn that Brown wants to see would come from the International Finance Facility, which would see money raised from the sale of bonds in the world's capital markets. These would in effect front-load development assistance, since the bonds would be paid back from aid budgets after 2015. Selling off the IMF's gold is seen by Brown and his team as a free lunch. The Fund is sitting on about 100m ounces of gold, which is valued at about one-eighth of its market value. As an organisation, the fund does not need the gold and could make more money by investing the proceeds from a sale into better performing assets. There was a suggestion a quarter of a century ago to scale down the fund's holding, which was rejected. That decision has cost about £30bn in lost income. Sales of up to 5m ounces of IMF gold a year would allow 100% debt relief for its debtors. An alternative to outright sales would be to revalue the gold on the fund's books, a mechanism the IMF has used before to raise resources. Given the choice, Brown would prefer the first option but would happily settle for the second. One objection to the gold plan is that sales might depress the world price and thus affect the income of developing countries which mine the metal. Brown's proposal would see any gold transactions taking place off-market so that there was no effect on the price. In any case, the evidence of the past few years is that sales of gold by the UK and other countries have not depressed the price. The problem is one of politics. Commendably, Brown has put a lot of effort into pushing his proposals at each and every meeting of the IMF and the G7 but he is facing strong resistance from a US administration which has yet to be convinced of the need for extra resources, wants to keep control over its own spending programmes, and believes any plan to sell IMF gold or for American taxpayers to pay off the multilateral debts of poor countries would be rejected by Congress. Periodic Ponzi Update PPU -- $hifty, 21:07:13 11/07/04 Sun Ponzi Chart Periodic Ponzi Update PPU Nasdaq 2,038.94 Dow 10,387.54 = 12,426.48 divide by 2 = 6,213.24 Ponzi Up 212.01 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 06:34:11 11/07/04 Sun Beardsley Ruml's Road to Ruin Gold and gold shares have spent the year to date in a corrective mode. The intense investment ardor of 2003 has been succeeded by disinterest and skepticism. Gold shares, which are essentially long-dated options on the gold price, provide the best barometer of sentiment. In 2002 and 2003, the shares outperformed the metal by a factor of 2:1. This year, they have under-performed, with gold up 2% and the shares down 9% (basis XAU as of November 2, 2004.) Investment flows into US gold mutual funds have been subdued compared to 2003 and 2002, and are down more than 60%. As always, the key investment questions are: (1) where are we on the road map of the secular bull market for gold; (2) are we in fact still on the road or has it come to an end; and (3) what is the condition of the fundamental forces behind the market direction? To alleviate any suspense, it is our view that we are still in the early stages of a bull market for gold and a bear market for financial assets, including (especially) the US dollar. Our view on (1) ought to dispatch any need to discuss (2), but it might be worth considering what to look for in judging the bull market in gold to be over. In general, the answer to (3) is that the conditions supporting a rising price of gold are not only intact, but, if possible, stronger than ever. Read on here.... Gold -- Sharefin, 06:21:31 11/07/04 Sun Hathaway likes Harmony management, but not on this one MINEWEB: We'll get on to that in a little while. But you've been a bull on gold for quite some time. Are we now getting close to maybe the end of the bull run, or are we only just starting it? JOHN HATHAWAY: I think we're very early in this whole thing. Most people wouldn't even know that we were in a bull market for gold, and most of the people in the financial markets are essentially clueless about this. So I think until many, many more people are aware of it, I don't think we're in much danger of it petering out. MINEWEB: We are seeing it making the headlines, though, certainly the Financial Times of London today had a front page story mentioning gold. JOHN HATHAWAY: That's always a danger sign. These guys never get it right in the financial press, so, yes, that's probably a short-term sell signal. I just wrote something, it will be on our website, which talks about what it would take for the bull market to end. It probably would take too long to describe here, but I'd encourage your listeners to log on to tocqueville.com and you'll see what are the things that I think that would the ingredients of a top in gold, which we're years away from. Gold -- Sharefin, 18:00:18 11/02/04 Tue World Central Bank gold holdings decline 3.2% since November 2002 NEW YORK, November 2 (newratings.com) – Analyst John C Tumazos of Prudential Financial mentions that the World Central Bank's gold holdings have declined by 3.2% since November 2002. In a research note published this morning, the analyst mentions that the US continues to hold more than 25% of the global gold reserves, despite a decline in its individual reserves in the period since November 2002. The gold reserves of China, Venezuela and Argentina have increased during the two-year period, while Switzerland, Portugal, United Kingdom, Canada, Netherlands and Greece have sold off a part of their holdings, the analyst adds. ---------- Hmmmm If the Central Backs have a supposed 30,000 tonnes (small chance - probably more like 15,000 tonnes ) then 3.2% of this is approx 1000 tonnes. This seems a high amount considering the Central Banks agreement of a 400 tonne limit (now raised to 500 tonne) Now if the Central Banks only have 15,000 tonnes left then 3.2% of this is approx 480 tones which seems more likely... Whoose cooking the books...^o-o^... Gold -- Sharefin, 23:04:08 11/01/04 Mon India's first gold souk promises Dubai experience Promising the same experience as shopping in Dubai, India's first gold souk is set to open Friday in Gurgaon, on the outskirts of the capital, offering lifestyle accessories. ~~~ Designed by Oliver Vidal of US-based Swanke Hayden and Associate and built at a cost of around Rs.400 million, the souk in Gurgaon is to be followed up with nine more in the country over the next three years with an estimated Rs.1 billion investment in each of the other souks. "We are in the process of finalising land in Ludhiana, Kochi, Chennai and Jaipur to start construction of souks by next year. The next project in Ludhiana will be launched by mid-December followed by one in Kochi early next year," Gupta said. In the next phase, Aeren Group, which has been pioneering several speciality malls, is planning gold souks in Bangalore, Mumbai, Hyderabad, Ahmedabad and Kolkata. "We are also in the process of doing viability study for setting up a gold souk in Chicago in the US and also in Britain, Bangladesh and Nepal among other nearby countries," Gupta told IANS. ~~~ The opening of the souk has been timed to coincide with the peak gold and silver buying season in the country from September to January that sees a large number of festivals and weddings. There is expectation of more purchases in the rural areas soon after harvest. With an annual consumption of some 800 tonnes of gold, India is the largest gold jewellery market in the world, valued at $14.5 billion. "With people from nearby cities coming routinely to the capital to shop for gold, we are targeting customers within 300-400 km of Delhi for an enjoyable shopping experience without car parking hassles," said Gupta. Gold -- Sharefin, 22:57:45 11/01/04 Mon Investors begin historic trade of paper gold on JSE today Johannesburg - Today South Africans can trade in gold bullion for the first time, thanks to the listing of an exchange-traded fund - Absa NewGold. Listed on the JSE Securities Exchange, this new issue will allow investors to purchase a minimum of one-100th of 1 fine troy ounce of gold for about R25. The NewGold Gold Bullion Debentures can be bought through a stock broker or by calling the NewGold Investment Plan. This securitisation of gold will be 100 percent backed by gold bullion, which means there is a physical piece of gold behind every purchase. The gold itself will be held in vaults by the NewGold Custodian - Rand Refinery. South Africa is the third country in the world after Australia and the UK to issue gold bullion-backed securities. ~~~ In South Africa, the issue raised R213 million in prelisting subscriptions, which represents about 2.8 tons of gold. This would be 18 percent of the total annual allocation for trade as allowed by the SA Reserve Bank. The central bank is treating the new securities like Krugerrands, which means asset managers will be able to invest up to 10 percent of a fund in gold bullion. John Koel, the chief investment officer at asset manager Stanlib, said they had been reluctant to hold gold shares because they were exorbitantly priced. "This instrument gets around that," he said. "It's a novel way to get exposure to bullion as a commodity asset class and exposure to the rand too." Koel said the securities would behave like a Krugerrand but without all the hassles of storage. ~~~ Launched in Australia 18 months ago and in London 11 months ago, the net assets of gold bullion securities have grown to just under $800 million (R4.86 billion) and have become the single largest exchange-traded fund in Europe. Fiat -- Sharefin, 09:16:04 10/31/04 Sun Follies of fiddling with the yuan The dollar economy is in fact devouring not just non-dollar economies, but also the US economy. The dollar is like the rebellious computer HAL 9000 in Stanley Kubrick's 1968 film 2001: A Space Odyssey. Hal 9000 was programmed to believe that "this mission is too important for me to allow you to jeopardize it", and proceeded to kill everyone who tried to disconnect it. Dollar hegemony kills all, pushing down wages everywhere with no exceptions made for nationality. As Pogo used to say: "The enemy, it is us." The issue is not whether Asian central banks will continue to have confidence in the dollar, but why Asian central banks should see their mandate as supporting the continuous expansion of the dollar economy at the expense of their own non-dollar economies. Why should Asian economies send real wealth in the form of goods to the US for foreign paper instead of selling their goods in their own economy? Without dollar hegemony, Asian economies can finance their own economic development with sovereign credit in their own currencies and not be addicted to export for fiat dollars. As for Americans, is it a good deal to exchange your job for lower prices at Wal-Mart? Gold -- Sharefin, 09:05:32 10/31/04 Sun Panel to help India become global gold hub: The government will constitute a committee of experts to suggest how India can become a trading hub for gold, of which the country is the largest consumer in the world, Commerce Minister Kamal Nath said Saturday. ~~~ The commerce minister said the terms of reference for the panel would include policy measures for encouraging mutual funds to invest in the yellow metal, hedging in futures market and introduction of gold-linked savings schemes. He said some changes would be made to the country's foreign trade policy to freely permit the import of all grades of gold, instead of just increasing jewellery grade gold under the duty replenishment scheme. Fiat -- Sharefin, 09:02:20 10/31/04 Sun Dollar Devaluation: The American Strategy to Win the Real World Series We recommend that clients increase the inverse correlations within their portfolio by boosting their gold mining exposure. When - not if - the dollar goes into the serious section of its fall from the stratosphere, gold will experience its greatest bull market in decades. Barron's is no longer festooned with gold bug advertisements as it was when gold was peaking in the $427 range. At that point I was getting phone calls and emails daily from bugs and higher-order creatures asking me how high I thought gold was going. I've had almost none for the past three months. That admittedly unscientific indicator reassures me that it is prudent to recommend a boost in gold exposure. That Placer Dome and Glamis Gold have touched new highs in recent days without eliciting a wave of comments about a new gold boom is also reassuring. ~~~ The next runaway bull market in gold and in gold mining stocks will not be a story of runaway inflation: it will be a story of the end of era in which the dollar alone was the global store of value. Fiat -- Sharefin, 08:48:41 10/31/04 Sun Whole future of USA rests on if the US$ continues to be used to buy oil THE INTERNATIONAL FORECASTER editor Bob Chapman writes: In a move that would have massive repercussions in the global balance of power, last week Russian President Vladimir Putin said Russia could switch its trade in oil from US dollars to euros. This news has not appeared anywhere in the western media. Mind you, the comments were made at a joint news conference with German Chancellor Gerhard Schroeder in Yekaterinburg, where the two leaders conducted two-day talks. We believe this is the beginning of a move by European elitists to replace the US dollar as the world's reserve currency. A Russian move in this direction would boost the euros gradually growing share of global currency reserves and could prove to be catastrophic for the US ... it would end the US license to do as it pleases throughout the world. Seventy percent of US dollars are currently held as reserves in central banks through the world. This is an interest free loan to the US and it allows the US to control inflation. If other oil producers followed Russia's lead and did switch to the euro, the US would have serious problems. There are already a number of countries within OPEC that would prefer to trade in euros due to US economic policies and its arrogant misuse of power based in part on the US dollar's reserve status. Iran, Saudi Arabia and Venezuela have considered a change ... the Saudi's relationship with Europe and Russia has already changed over the past few years. George and the neocons invasion of Iraq, an exercise in raw power, have begun further moves away from the US dollar and a closer relationship with Europe. The trial balloons are going up ... the waters are being tested ... the move away from the dollar has begun. European elitists are about to flex their muscles, and in years to come, if the change occurs, George W. Bush will be remembered in history as the cause of America losing its place as economic leader of the world. Russia is probably bargaining for concessions, but be as it may; the whole future of the US rests on whether the dollar continues to be used for the purchase of oil. Fiat -- Sharefin, 08:42:52 10/31/04 Sun The wolf at the door A further steep decline in the dollar seems inevitable ~~~ In the three years from 1985, the dollar fell by 50% against the other main currencies. Inflation and bond yields rose and, in October 1987, the stockmarket crashed. America's current-account deficit is now almost twice as big as it was then, so the total fall in the dollar—and the fall-out in other financial markets—could well be larger. The wolf is licking his lips. Gold -- Sharefin, 22:10:33 10/26/04 Tue Southern Africa: Development Agencies Ask IMF to Sell Gold Three major development agencies have asked the International Monetary Fund (IMF) to sell or revalue some of its gold reserves to raise funds for a total debt write-off for the world's poorest countries. In a paper entitled, 'Fool's Gold: The Case for 100 Percent Multilateral Debt Cancellation for the Poorest Countries', the Catholic Agency for Overseas Development (CAFOD), ActionAid and Oxfam International said a total debt write-off for all low-income countries was necessary to help them meet their poverty reduction targets and Millennium Development Goals (MDGs). IMF Managing Director Rodrigo de Rato responded earlier this month to a similar call made by the British Chancellor of the Exchequer, Gordon Brown, and pointed out that "it depends on the willingness of the members of the Fund, of the Executive Board. For the time being, the Executive Board has not discussed this issue. Of course, management and staff, we stand ready to analyse the possible outcome if we get the mandate by the Board to do it." According to the agencies, the IMF was currently sitting on reserves of 100 million ounces of gold, which the financial institution values at US $8.1 billion - well below the current market price. Under a 1971 agreement, most of the IMF's gold is valued at $40 an ounce, but the reserves are now actually worth around $45 billion, the development agencies claimed. Revaluation of the gold reserves could potentially raise more than $30 billion to fund debt relief, the paper said. Gold -- Sharefin, 22:09:22 10/26/04 Tue US Poll Jitters Boost Gold's Appeal As Safe-Haven Asset GOLD traded at record highs yesterday as uncertainty over the US presidential election drove the US dollar lower, boosting the metal's appeal as a safe-haven asset and underscoring the sentiment that the local currency would remain strong in coming days. Gold rose as high as $430,46 an ounce, up 1,26% from its previous close, and was near its 16-year peak of $431,05 an ounce. Gold has gained about 16% since mid-May, on the back of a weaker dollar. "The main reason for the strength in the gold price is a significantly weaker dollar," Econometrix Treasury Management analyst George Glynos said yesterday. "US data has not inspired much confidence. It has largely disappointed," Gold -- Sharefin, 22:07:20 10/26/04 Tue Gold miner plays down pollution fears Barrick Gold says it does not believe a pollution problem at its mine in Western Australia will also happen at its new mine near West Wyalong on the NSW central western slopes. A report by the Western Australian Government released last week revealed a tailings dam holding toxic waste at Kalgoorlie leaked and contaminated groundwater and an area of about 20 kilometres. The mine is half owned by Barrick Gold and another company. ~~~ But Greens' MLC Lee Rhiannon says the report shows a disturbing record for the company. "Last week, a Western Australian Government review into the Finistone Dam at Kalgoorlie reveals the worrying trends," she said. "What we have is the environmental impact of the tailings dam has increased salinity, there's heavy metal contamination and cyanide contamination and elevated cyanide levels in the groundwater." Ms Rhiannon says the way to solve the problem is for the State Government to ban the use of cyanide in mines. Gold -- Sharefin, 22:05:19 10/26/04 Tue No delay in launch of NYSE gold-backed ETF NEW YORK, Oct 26 (Reuters) - Regulatory approval for a much-anticipated gold-backed security that is expected to soon launch on the New York Stock Exchange takes time and has not been delayed, the NYSE's chief executive said on Tuesday. ~~~ The gold-backed security to list on the NYSE is known as streetTRACKS and is sponsored by the World Gold Council. It is designed as an alternative to investing in physical gold, which is difficult and expensive to move, store and insure. The SEC said in late August that the security, whose registration was filed in May 2003, could start trading soon. The security's prospectus indicates it will launch in 2004. Barclays filed a registration this year for iShares COMEX Gold Trust, which will mimic the price of gold futures at the Comex division of the New York Mercantile Exchange. Bullion-backed securities are expected to launch next week in South Africa, according to their sponsor, Absa Corporate and Merchant Bank (ASAJ.J: Quote, Profile, Research) said Tuesday in Johannesburg. Interest in the two gold-backed U.S. securities is high because of growth in ETFs, though little has been publicly discussed about them. Gold -- Sharefin, 22:02:01 10/26/04 Tue Barrick Profit Dips, Oil, Mine-Building Costs Nag Barrick Gold Corp.'s earnings dipped in the third quarter as output dropped, mining costs rose, and the world's third-biggest gold miner sold 16 percent of its production at lower than market prices. ~~~ Barrick warned that construction costs at Veladero in Argentina, one of the four new mines it is building, are expected to increase by up to $70 million from its previous forecast because of price pressures for materials, fuel, labor and exchange rates. Cash production costs could also be hurt, it said. To protect itself from rising oil prices, which were looking comfortable above $50 a barrel on Tuesday, Barrick said it had put in place a fuel hedge position for 2.2 million barrels of oil -- half its oil needs in the next three years. Financial head Jamie Sokalsky said that each $10 rise in the oil price added $3 to $4 to Barrick's costs per ounce of gold mined. "These hedges will provide protection of $2 per ounce for each $10 move in the oil price," he said. Its cash cost to produce an ounce of gold in the third quarter rose to $218 from $180 in the year-before quarter. ~~~ In the quarter, Barrick sold 200,000 ounces of the 1.23 million ounces of gold it produced into hedge contracts, fixed-price sales commitments that it entered into years ago. A protection strategy in periods of weak gold prices, hedging annoys investors when prices are high, as they are now, as it caps earnings, and this has led Barrick to start winding down its hedge book. Closing out hedge positions meant the miner, which has the dubious distinction of owning the biggest forward sales book in the industry, earned $9 million less than it would have if it had sold its gold at market prices. The hedge cut was much smaller than that of the past two quarters, as, had Barrick settled more contracts it would have foregone even more of the benefit of the quarter's sturdy average gold price of $401 an ounce. "We reduced the hedge book on a couple of (gold price) dips in the quarter -- there weren't many," Barrick chief executive Greg Wilkins said. At quarter's end, Barrick's hedge book stood at 13.7 million ounces, which is equal to 16 percent of its unmined reserves. Production, as expected, dropped 17 percent from 1.48 million ounces a year ago due to lower grades at some mines. Gold -- Sharefin, 21:58:59 10/26/04 Tue Paper gold for Johannesburg JOHANNESBURG (Mineweb.com) -- From next Tuesday retail and institutional investors in South Africa will be able to invest indirectly in gold through securities on the JSE Stock Exchange called NewGold Gold Bullion Debentures. They are being promoted by Absa Corporate & Merchant Bank in association with the World Gold Council. ~~~ The average daily trade in GBS has increased from $4-5 million a day when gold was around $380/oz to more than $10 million currently. The number of securities in issue has been increased to $800 million from $600 million six weeks ago, said Nik Bienkowski, a director at Gold Bullion Securities Ltd. The security might suit investors who know little about gold mining and institutional investors, who are not allowed to hold physical gold, to buy a stake in gold. In London, pension and mutual funds also use the securities in their allocation strategies. Gold -- Sharefin, 21:56:35 10/26/04 Tue Gold is back in favour among Indian consumers: [Business India]: New Delhi, Oct 25 : Quality assurance comes at a price but Indians are increasingly willing to pay the premium when it comes to gold, once again back in favour as a good investment for a rainy day. A good testimony of this was the week-long Festival of Gold, organised here by state-owned MMTC Ltd, India's largest bullion trader, which witnessed roaring sales every day. This was despite the price of the yellow metal being well over Rs.6,000 (about $125) per 10 grams and the added cost of manufacturing and hallmarking. ~~~ "Despite gold prices being at least Rs.2,000 per 10 grams more than in 1996 when MMTC last recorded sales of Rs.150 million at its Festival of Gold, there seemed to be no dearth of buyers," said Anjana Singh, MMTC's deputy general manager who looks after exhibitions. "Two years back, we recorded only Rs.130 million ($2.8 million) worth of sales as buying sentiments seemed low. But this year, we witnessed good enthusiasm mostly among middle and upper middle class people to purchase gold ahead of the festival and wedding season," said Singh. The largest consumer of gold, India witnesses maximum demand during the five months from September to January, after the agricultural harvest season and coinciding with the festival and marriage season. Fiat -- Sharefin, 21:35:11 10/26/04 Tue Hedge funds - weapons of financial destruction SHADY organisations ruthlessly manipulating complex strategies. Highly paid operatives striving to locate and deploy powerful weapons with the potential to wreak havoc. It sounds like the latest spy thriller — or the scary picture drawn by a government's dossiers in the build-up to the war on Iraq. In fact, this is a description of the burgeoning operations of hedge funds — operations that may now pose a threat greater than Saddam Hussein and his elusive weapons of mass destruction. ~~~ These reservations fail to confront the escalating potential dangers to financial stability being fomented by hedge funds as a consequence of three factors: the exploding scale of the industry; its increasing use of leverage; and the growing prevalence of herd behaviour in a desperate pursuit of high returns. The expansion of the hedge-fund sector has two consequences. As the industry balloons, its increased weight means that it can no longer be regarded as a fringe element of limited importance. More crucially, as it mutates from the esoteric instrument of the wealthy to a mainstream tool employed by pension funds and other key institutions, the sector's players are being compelled to take bigger risks. The outsize returns that make these funds attractive depend on their use of innovative strategies not available in the rest of the market; by definition, hedge funds must be contrarian and innovative. Yet securing this distinctiveness becomes more difficult as the number of funds, and the money they manage, multiply. Leverage — in other words, making bets with borrowed money — adds to the scale and the risks. Hedge funds have always borrowed money to back their trading strategies, but it was the scale of leverage used by the LTCM fund that led to its near-collapse and a global financial crisis in 1998. But the amount of other people's cash in play has been ratcheted upwards by the creation of so-called funds of funds. In theory, these allow cautious institutions to play the hedge game in safety by putting their money into a range of funds. However, the benefits of this diversification may be wiped out as the funds of funds try to bolster their performance by borrowing extra money to invest. If some of the initial investors have also borrowed part of their stake, then debt is being used to finance debt and a house of cards is being built. The twin problems of scale and leverage are now coalescing with herd behaviour by competing hedge funds to create a lethal brew. Weak returns on conventional investments and the flood of cash into hedge funds are driving the sector's managers into a scramble for ever more innovative strategies and ever more exotic instruments. No sooner is a new technique or investment discovered by one group than it is copied by competing funds. Thus a fresh search for higher returns on the fringes of the financial world begins. And, like lemmings, the funds dash closer to the cliff. The result is that an escalating amount of money is being bet on the same extreme positions. And since funds rely on similar models to gauge the scale of their gambles, the fear is that some unexpected development could cause a simultaneous dash for the exit, with disastrous consequences. Gold -- Sharefin, 21:17:51 10/26/04 Tue Newcrest Expects First Telfer Gold Pour In Few Weeks Newcrest Mining Ltd. (NCM.AU) said Wednesday that it expects initial gold production from the Telfer project in just a few weeks. ~~~ The Telfer project in Western Australia is expected to produce about 600,000 ounces in its first year, rising to about one million ounces. Gold -- Sharefin, 08:26:17 10/22/04 Fri IMF seeks to canvass Gwalia shareholders Litigation funder IMF Australia asked the Federal Court for the green light to directly contact Sons of Gwalia shareholders about a potential multi-million dollar class action. IMF wants a declaration from the court that using the company's share register to contact investors who bought stock in the lead up to Gwalia's collapse would not contravene privacy provisions of the Corporations Act. ~~~ IMF, which has funded a number of mass plaintiff claims in Australia over the last three years, said it has been approached by about 20 current Gwalia shareholders to consider funding a class action against the company. It said there is a possible claim that Gwalia engaged in misleading and deceptive conduct by allegedly failing to fully disclose its gold hedging commitments. Gold -- Sharefin, 00:04:48 10/19/04 Tue Central Bank Gold Sales 'Not Daunting' A REPORT by London metals researcher GFMS suggests that renewed selling of gold by central banks is unlikely to be a major disruptive factor in the market. The report says that demand needs to expand 2,3% to absorb additional central bank sales. The Central Bank Gold Agreement, an agreement between the European Central Bank and 14 other central banks setting a limit on gold sales, was renewed last month. In terms of the new agreement there will be a programme of sales over the next five years, with annual sales not exceeding 500 tons, and total sales not exceeding 2500 tons. GFMS notes the agreement raises the limit on sales 25% from the initial arrangement. Between 2000 and 2004, gold supplied to the market from the central banks was within 1% of demand by the industrial sector over the same period. ~~~ GFMS calculates that the additional gold amounts to only 2,3% of the 2004 market and 2,8% of the market over the period 2000- 04. "This is not such a tough requirement in the light of the robust activity of the physical gold consumers in 2004." Gold -- Sharefin, 23:58:32 10/18/04 Mon Harmony makes $8.1bn bid for Gold Fields South African gold producer Harmony, with the backing of Russian metals giant Norilsk Nickel, has made a surprise takeover bid for Gold Fields, the world's fourth biggest producer. The bid by Harmony, South Africa's largest domestic gold producer could foil management's plans to merge with Canada's Iamgold. Harmony said on Monday that the all-share offer of 1.275 new Harmony shares for each Gold Fields share, valued the company at $8.1bn, which it said represented a 29 per cent premium to the average price of Gold Fields shares for the 30 days prior to October 14. If accepted by Gold Fields' shareholders, the offer would create the world's biggest gold company, with combined market capitalisation of about $10bn and annual production of about 7.8m ounces. Oil -- Sharefin, 23:56:53 10/18/04 Mon Oil surges past $55 in Asian trading Monday SINGAPORE -- The price of crude oil surged past an unprecedented $55 per barrel Monday amid continued uncertainty over production, high demand, and tight supply globally. The price of crude for November delivery on the New York Mercantile Exchange reached $55.02 per barrel mid-morning in Asia, up 9 cents from its settlement price on Friday. Gold -- Sharefin, 20:08:58 10/18/04 Mon Gold import to rise NEW DELHI: On the back of a 15 per cent increase in gold imports in the first half, MMTC Ltd said it was hopeful of ending the fiscal with about 20 per cent rise to 130 metric tonnes. "We have seen a reasonable growth of about 15 per cent in the first six months of the current fiscal. With this pace and major buying season, we hope to register about 20 per cent growth to 120-130 metric tonnes," S D Kapoor, chairman and managing director, MMTC Ltd, told reporters. He said the country's total import of gold should go up to 880 metric tonnes, a 10 per cent rise from last year. Gold -- Sharefin, 19:46:33 10/13/04 Wed Investment demand for gold poised to regain lustre closer look at the supply and demand subcategories show that the dominant area of mine production has gone down from 2003, along with recovery of old gold scrap. Sales by governments of the metal dropped by half from Q4 2003 to Q2 2004. Many observers see central bank sales of gold reserves as an overhanging downward pressure on prices, but these sales evaporated even in the face of temptingly strong prices. On the demand side, jewellery fabrication, traditionally the dominant use of the metal, has moved up solidly in the past year, but far and away the largest growth has been in investment. Despite climbing prices, investors snapped up 40 per cent more gold tonnage in the first half of 2004 than the first half of 2003. When the price of that gold is factored in, the increase is some 61per cent. In the second quarter, this has risen to $1.3 billion. Analysts predict that in the coming months, further dollar depreciation and growing risk of dollar devaluation will all strengthen investor demand for gold. Gold supply is expected to remain nearly stable. Gold production will increase slightly while central bank sales of gold are expected to decline. With investor demand expected to increase & supply to hold roughly stable, the price of gold should approach $500 per ounce by the end of 2004. Gold -- Sharefin, 11:02:56 10/11/04 Mon WA police crack gold stealing ring The Kalgoorlie Gold Stealing Detection Unit believes it has cracked a highly organised gold-stealing ring at Norseman in Western Australia. Gold -- Sharefin, 11:02:16 10/11/04 Mon Gold theft costing SA billions Gold theft is costing South Africa's economy an estimated R2-billion annually, with organised crime syndicates smuggling about 40 tons of gold out of the country each year. Fiat -- Sharefin, 11:00:11 10/11/04 Mon U.S. Treasury Shows Actual 2003 Federal Deficit at $3.7 Trillion Beyond the $3.7 trillion deficit in 2003, however, the numbers get even worse, because the shadow deficit has been taking its toll ever since the Johnson era. According to the Treasury's 2003 financial statement, the U.S. government has a negative net worth of $34.8 trillion. That $34.8 trillion reflects $36.2 trillion in financial liabilities offset by $1.4 trillion in assets, of which only $0.4 trillion are liquid. Part of the underlying reality-the actual operating cash shortfall-is reflected in the growth of the federal debt. During fiscal 2003, for example, gross federal debt increased from $6.2 trillion to $6.8 trillion, or by $600 billion, against the unified $374 billion deficit. As of the end of August 2004, the debt had increased to $7.3 trillion. While gross federal debt is at a record, relentlessly pushing against borrowing ceilings, the markets, press and politicians generally ignore that portion of the debt borrowed from Social Security and similar programs. So, the September 30, 2003 debt level commonly is reported as only the $3.9 trillion owed to the public, instead of the total $6.8 billion. Again, the more accurate GAAP estimate of total government liabilities is $36.2 trillion. ~~~ Is "AAA" Rating of U.S. Treasury Debt Sustainable? The major U.S. credit rating agencies, S&P, Moody's and Fitch, issue credit ratings to sovereign states. The United States enjoys the top "AAA" rating, but that could change if the rating agencies apply their sovereign credit rating methodologies to the GAAP U.S. financial statements, instead of the gimmicked accounting accepted for decades. ~~~ The twist here, of course, is the accounting method used in analysis. Based on the gimmicked, instead of GAAP, fiscal numbers, the U.S. deficit and debt ratios are a little high but relatively benign at 4.8% and 62.8%. Further, much more goes into a sovereign debt rating than the discussed ratios. Still, if any country but the U.S. had GAAP deficit and debt ratios of 34% and 334%, its debt most likely would be given junk-bond status by the rating agencies. Accordingly, a case can be made that the risks of the United States "servic[ing] debt through excessive money creation" are high enough so as to be inconsistent with a "AAA" rating. Political practicalities, though, likely will forestall any formal downgrade of the U.S. credit rating. Since a downgrade would trigger global financial-market and currency turmoil, action even could be delayed until the last minute. Gold -- Sharefin, 10:55:56 10/11/04 Mon Pouring oil on troubled economists Gordon Brown did not get nearly as far as he would have liked last week with his 'debt initiatives'. It was not just recalcitrant Germans who were the problem. An official involved commented: 'The US won't budge. Apart from anything else, the IMF itself has a financing problem, and is not going to sell gold to finance the Chancellor's debt-relief plans.' ~~~ My sense of last weekend's meetings is that there is an atmosphere of suppressed panic about the oil price, and about the danger of a serious crisis. This is over and above the well-publicised concerns about potential storms in the foreign-exchange markets when the financial world finally becomes nervous about the mani festly unsustainable US budget and balance-of-payments deficits - a nervousness which may well surface shortly after the presidential election. Gold -- Sharefin, 10:50:19 10/11/04 Mon Fahrenheit - Gold and Oil If you think gold and oil have sky rocketed this year, just wait. Conclusion Washington insiders are well aware that the U.S. needs to secure oil supplies. You may not like their methodology but the facts are facts. The days of cheap oil are over. The report, Strategic Energy Policy Challenges for the 21st Century, concludes: "The United States remains a prisoner of its energy dilemma. As far as the U.S. dollar is concerned, the Iraq situation will only continue to help weaken the greenback. As Vice President Dick Cheney has pointed out, oil and gas shortages are very real. With the U.S. having a growing dependency on oil imports which are estimated to hit 90% by 2020, our economic future is at serious risk. If supplies are not maintained to keep up with the huge increased global demand our already shaky economy will be quickly derailed. Gold as well is destined to climb further. Securing Iraqi oil fields has cost $200 billion so far and is climbing rapidly. Billions of dollars of new debt creation will be needed for this mission to be accomplished which will further dilute the U.S. dollar and it will continue to lose more ground against foreign currencies which also means gold will rise as the dollar sinks. You may not like the tactics taken the Bush administration has taken but you can vote as your heart directs you on November 6th. Having some exposure to gold, oil and gas investments makes complete sense no matter how the election goes. Gold -- Sharefin, 10:46:48 10/11/04 Mon RUSSIA ACCUMULATES RECORD HIGH GOLD AND CURRENCY RESERVES Interestingly, the trend is in its sixth straight week with the reserves growing by a total of $7 billion in this period. As a result, Russia has the world's fourth largest reserves of gold and hard currency (compared to the August 2004 figures), surpassing long-time leaders like the United States, Germany and France. The country now only trails Japan, China and Singapore, although they are well ahead. However, a close study of the increase shows that the gold reserves remained at the same level, and they are currently estimated at $3,754,000,000. This means, the country's augmented riches are due to the Central Bank's massive purchasing of US dollars on the domestic market. Fiat -- Sharefin, 10:42:10 10/11/04 Mon Asia-Europe Group Urged to Use Euros, Cut Dollar Dependence Asian and European nations should cut dollar dependence and use more euros in trade, according to an advisory group representing more than three dozen countries, which comprise half of the global economy. Gold -- Sharefin, 10:31:23 10/11/04 Mon Russian Central Banker Cites GATA, Says Gold Market May Be Less Than Free --Movements in the price of gold are sometimes "so enigmatic" and central banks and bullion banks are so involved with it that the gold market may be less than free, the deputy chairman of the Bank of Russia says in a speech obtained by the Gold Anti-Trust Action Committee. The deputy chairman, Oleg V. Mozhaiskov, made the remarks at a meeting of the London Bullion Market Association in Moscow in June, but the LBMA and other participants in the meeting suppressed it, refusing repeated requests to release a copy. After months of negotiation, the Bank of Russia last week provided GATA with an English translation, which has been posted at GATA's Internet site here: http://www.gata.org/RCBTakesNote.html Fiat -- Sharefin, 10:29:15 10/11/04 Mon China Rebuffs U.S., Refuses to Give Timetable on Yuan China offered no new timetable for changing a nine-year-old peg of its currency to the dollar, and warned U.S. policy makers not to press too hard for a change. ``What we are trying to do is create the conditions for a market-based exchange rate,'' Central Bank Deputy Governor Li Ruogu told bankers at a luncheon in Washington. ``If you force China to change it will hurt the U.S. You destroy a goose that will give you a golden egg.''  Gold -- Sharefin, 10:26:38 10/11/04 Mon MUNDELL: A WORLD CURRENCY IN THE LONG RUN Florence, Italy, Oct.11 - Nobel prize winner Robert Mundell reckons that the "long-term goal is world currency", and proposed to call it "Intoro". That's what he said at the international congress of financial directors in Florence. Intoro stands for "oro internazionale, international gold", because the new currency "should be based on the only international metal system, which is gold. The mechanism is similar to the one of the Breton Woods agreement, and is to involve the IMF, perhaps with an initial agreement between the 3 main currencies, euro, US dollar and yen. The following step would be a temporary currency named 'dey' (dollar, euro, yen), and it could then include the pound sterling and the yuan. Such a monetary reform would then lead to the brand new international currency, Intoro". GATA -- Sharefin, 20:21:12 10/10/04 Sun Gold GATA has struck paydirt once again. The following is an exchange between a supporter in our GATA ARMY and Rainer Widera, Head of International Financial Statistics for the Bank for International Settlements: Dear Sir, I am looking for some information on the gold market. It has been noted by some gold market observers that for the fourth quarter of 2001, GFMS (Gold Fields Mineral Services) reported that the delta-adjusted hedge book for gold stood at 2924 tonnes. At this point, the notional value of gold derivatives reported to the BIS was $231 billion. However, as of December 31, 2003, the BIS reports gold derivatives of $344 billion. Producer hedging, meanwhile, declined from 2001 to reach 2166 tonnes at year-end 2003. How is this possible? It has always been claimed that the derivative position reflects the hedging of physical gold by the producers. How then can the derivatives position increase while the physical hedge position decreases? Can this be explained by an increase in speculative short positions unrelated to mining hedge books? Regards *** Thank you for your question on the relationship between producer hedging in gold and the BIS data on open contracts in gold derivatives. Please note that the BIS data are collected from banks and that their open gold derivative contracts reflect trading in the forward gold market not only with producers of gold, but with other commercial banks and central banks as well. It is therefore not possible to establish a 1:1 relationship between the BIS data and the hedge book of producers for gold published by GFMS. Best regards Rainer Widera Head of International Financial Statistics Monetary and Economic Department Bank for International Settlements Centralbahnplatz 2 CH-4051 Basel Switzerland Tel: +41 61 280 8425 Fax: + 41 61 280 9100 *** Quite frankly, this is the key to understanding the real gold market, what GATA has discovered over the years, how The Gold Cartel has suppressed the gold price years, etc. It is the key to understanding what the gold fraud is all about. It seems GFMS and the World Gold Council are really fronts for The Gold Cartel. They have refused to deal with the gold price suppression scheme – that the central banks have surreptitiously dumped 13,000+ tonnes of gold to keep the price far lower than it would have been if allowed to trade freely. How else to explain their silence and unwillingness to confront such blatant contradictions to their year-after-year reporting? Some comments on what makes the specifics of this BIS note so significant: "Please note that the BIS data are collected from banks and that their open gold derivative contracts reflect trading in the forward gold market not only with producers of gold, but with other commercial banks and central banks as well." This statement confirms what GATA has been saying all along. GATA's conclusion has now been validated not only by the market (outstanding derivatives are growing even as producer hedge books are being reduced) but it is now validated by the BIS telling us that banks are using derivatives and that they are using them for their own books -- their own proprietary trading and position taking. GMFS numbers are flawed because they do not account for the fact that banks are short gold, i.e., they have gold liabilities. "It is therefore not possible to establish a 1:1 relationship between the BIS data and the hedge book of producers for gold published by GFMS." Thus, the gold industry has it wrong. They can't explain the derivatives numbers. They can't explain the huge amounts of gold mobilized from the FRB in NY and the UK, which amounts to enough gold alone to dwarf the industry consensus and does not even take into consideration the gold mobilized from Switzerland and other financial centers where hard numbers are not available. The fact that GFMS and the World Gold Council refuse to deal with this blatant contradiction reveals the degree of a lack of intellectual integrity on their part. Both of these organizations have hurt gold investors, gold shareholders, gold companies and the poor people of sub-Saharan gold producing countries to an incalculable degree. In my opinion (for this reason and many others) both of these disgraceful operations should be disbanded. Any gold corporation or public company supporting either one of these organizations should be ashamed of themselves for contributing to a shallow hoax. Why aren't gold producers up in arms over this disturbing scam perpetuated by the WGC and GFMS? The sooner the evidence of this orchestrated deception is disseminated to more and more in the investing world, the sooner the gold price is going to go berserk. Gold shareholders should be outraged at this farce and start raising "Kane" with gold company CEOs. Gold -- Sharefin, 09:28:18 10/07/04 Thu American Stock Exchange Publishes New Amex Gold Miners Index An index focused on companies involved primarily in the mining for gold and silver NEW YORK, Oct. 7 /PRNewswire/ -- The American Stock Exchange® (Amex®) announced today that it has begun publishing the Amex Gold Miners Index (Ticker Symbol: GDM); a new modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The Amex Gold Miners Index includes common stocks or American Depositary Receipts (ADRs) of selected companies with market capitalizations greater than $100 million that have an average daily volume of at least 50,000 shares over the past six months. ~~~ Over the five-year period from September 30, 1999 through September 30, 2004, the Amex Gold Miners Index had a cumulative return of 92.99% and an annualized return of 14.04%. "The new Amex Gold Miners Index fills a market void for a broad-based index of gold shares. This index currently covers 36 companies, up to three times the number of companies as other indexes of gold stocks and includes large- to small-cap companies," said Joe Foster, portfolio manager of the Van Eck International Investors Gold Fund. Mr. Foster added, "As investors have reawakened to the benefits of investing in gold shares, the gold mining industry has expanded. The new Amex Gold Miners Index reflects this expansion by combining emerging producers with established miners to reflect a cross section of the market. With this more comprehensive representation, the Amex Gold Miners Index may become the new benchmark for the industry." Fiat -- Sharefin, 20:39:37 10/06/04 Wed US Dollar Heading for Collapse: Robert Reich The US dollar is fast reaching a point at which foreign investors will abandon it and send it into a freefall, says Bill Clinton's former economic adviser. Robert Reich told the Global Business Forum in Banff that record high budget and trade deficits, personal debt and a foreign policy that is alienating traditional allies, has the already slumping US dollar headed for collapse. The US already requires a daily infusion of $1.2 billion in foreign investment just to keep the greenback's decline under control, he said. "The mainstream view is that the budget deficit (currently $422 billion).. is going to get larger,: said Reich, who is an "informal adviser" to presidential hopeful John Kerry. "Simultaneously, the mainstream view is that there is no reason to believe that the trade deficit (approximately $600 billion) is going to shrink anytime soon. In fact, I see the dollar continuing to decline and I see at some point a tipping point where East Asian banks that have been trying to prop up the dollar, maintaining their exports (to the US), because at some point it becomes a lousy investment." Reich said global investors are already conducting significant amounts of business in Euros, not US dollars. The reason for Reich's speech to the audience of approximately 200 business leaders, mostly Canadians, was to explain why free trade has suddenly been revived as a great economic evil in the US. In painting a black outlook for the US economy, Reich suggested the worst is yet to come, especially if President George W. Bush and the Republican party's agenda of tax less and spend more is re-elected in November. Fiat -- Sharefin, 20:36:49 10/05/04 Tue House prices 'to plunge 40%' HOUSE prices will fall by 30% to 40% during the next four years, one of the City's most successful fund managers has warned. Neil Woodford, who manages funds worth £6bn at Invesco Perpetual, is preparing for a sharp decrease in property prices. His forecast, which he describes as a 'healthy correction', would bring the average price of a home from £153,700 to £92,200. His claims mirror last week's International Monetary Fund report that said UK house prices were out of touch with underlying conditions in the economy. Woodford said consumers' heightened sensitivity to higher interest rates would send prices markedly lower, adding: 'People have borrowed a hell of a lot more money than they have ever borrowed before.' Gold -- Sharefin, 19:59:13 10/03/04 Sun Russian central banker cites GATA, says gold market may be less than free It may seem strange but all bear direct relation to a problem that is often considered purely theoretical: What is gold currently, and what will it be tomorrow? Real money with intrinsic value? A raw material? A cash commodity that has lost some of its monetary functions? If so, what are the prospects -- complete loss of gold's role or a restoration of lost functions, in one form or another? There is a wide circle of leading financiers who believe that pondering on these themes is a fruitless academic exercise. They are convinced that the heads of the world's richest countries, who once agreed to abolish exchange of national currencies for gold at a fixed rate, have in fact demonetised gold altogether. In their eyes, the existence of official gold reserves is simply a remnant of the past, a financial monument to the gold and gold-currency standards, which will ultimately be absorbed by the global gold market. This market has properly organised infrastructure, products, rules, and procedures, and central banks are merely one of its clientele. For them, this is the only reality to be reckoned with. Is this a true picture for gold in the modern world? Many people do not think like this; the reality is more complicated. The contemporary gold market has emerged as a byproduct of a series of agreements between governments, initiated by the United States and supported by the other major powers, in whose possession the bulk of all gold ever extracted lies. ~~~ Today the net debt owed by the United States to the outside world (the so-called "international investment position") is in the region of US$3 trillion. To understand the scale of this figure, let me remind you that it exceeds the total official currency reserves in all the world's countries (including the United States itself). According to the International Monetary Fund statistics at last year-end, the world pool of foreign currency reserves totalled Special Drawing Rights 2,013 billion or about US$2,800 billion. The volume of cash only ("greenback" banknotes) available outside the United States totals about US$400 billion. The world has come to a paradoxical situation in which the creditor countries are more concerned with the fate of the dollar than the U.S. authorities themselves are. Thus, the evolution of the U.S. dollar's reserve role in recent years has given ground to some quite pessimistic forecasts, based on rational economic theory. No wonder that the number of people who have held assets in dollars and now wish to diversify them partly into gold -- the traditional shelter from inflation and political adversity -- is steadily growing. The statistical correlation between the market prices of dollar and gold is obvious. For the problem we discuss today it means specifically that gold, in addition to its unique physical and chemical properties used in industry, has retained its particular monetary attractiveness for cautious financial investors, and its market price is still heavily influenced by the state of the international monetary system. This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organising an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, reached US$740-760. I prefer not to comment on this information but dare assume that the specific facts included in the lawsuits might have given ground to suspicion that the real forces acting on the gold market are far from those of classic textbooks that explain to students how prices are born in a free market. Gold -- Sharefin, 19:34:35 10/03/04 Sun Canada resists plan to revalue IMF gold reserves Canada has thrown up a major new roadblock to a debt-cancellation deal for the world's poorest countries by vigorously resisting a British plan to inflate the value of the International Monetary Fund's vast gold reserves. Finance Minister Ralph Goodale said Ottawa wants guarantees the plan won't undermine gold mining companies in Canada and elsewhere. He and other finance officials from around the world met for three days of talks in Washington, where the World Bank and the International Monetary Fund were holding their annual meetings. “We need absolute assurances that [revaluing the gold] should not be disruptive to the international gold industry or international markets for gold,” Mr. Goodale told The Globe and Mail. Gold -- Sharefin, 19:33:49 10/03/04 Sun Gold May Top 15-Year High as Dollar Falls vs Euro, Survey Says The Tocqueville Gold Fund, with about $500 million in assets, is seeking shareholder approval Oct. 22 to double its allowable purchases of gold bullion to 20 percent of total assets, partly because of declines in the dollar. ``We're going to see new highs in gold before year-end, certainly next year,'' said John Hathaway, 63, who manages the New York-based Tocqueville fund. ``Owning physical metal is a more conservative way than owning higher-risk gold shares to participate in the favorable macroeconomic environment for gold, including a falling dollar.'' ~~~ Central banks in the Middle East, source of about a quarter of the world's crude oil, as well as Argentina, have been buying gold, Tocqueville's Hathaway said. Gold -- Sharefin, 07:53:50 10/03/04 Sun G7 Majority Worried About IMF Gold Sale Idea Many Group of Seven rich nations and gold-mining powerhouse South Africa are concerned about a proposal to revalue some IMF gold to fund debt relief for poor nations, officials said on Saturday. However, the proposal's author, British Chancellor of the Exchequer Gordon Brown, said most nations did not object to the principle of revaluing International Monetary Fund gold. "We're in no doubt that this is possible...I don't think in most countries there is an ideological problem with this," Brown said. "I didn't ask the G7 to approve my gold proposals yesterday. What I asked and had agreed is that further work should be done on them." But officials from other countries raised concerns on how this would be implemented and on the implied reduction of the IMF's working capital -- an amount Brown said could equal up to the remaining balance of debts of Highly Indebted Poor Countries (HIPC) that have yet to be forgiven. "Are you picking apples off the tree or cutting down the apple tree to use it as firewood," one official offered as an analogy for the uncertainty expressed among policymakers. "Ideologically yes, but from a technical point of view we have to have a look in depth at the matter," Luxembourg Prime Minister Jean-Claude Juncker said. Brown's proposal ran into resistance on three grounds: some national treasuries of IMF shareholder countries would have to book the entire write-down in the year of sale; the likely bearish impact on precious metals markets; and the permanent reduction of IMF assets. "What about the financial integrity of the fund...Do we want to use IMF assets this way now and then that's it, we can never use it again?" a G7 source said, adding that a majority of G7 countries had come to this view. Brown said various off-market transaction proposals would be examined to release proceeds from the Fund's vast bullion holding. The IMF holds 103 million ounces of gold that is valued at a fraction of its current market price under a 1971 deal, and Brown said they were valued at one eighth of current market rates, or about $50 per ounce. Britain wants the reserves revalued to release billions of dollars for poor country debt relief. Gold -- Sharefin, 07:51:04 10/03/04 Sun British plan for paying off world debt There's a growing consensus in the world that highly indebted developing nations need all of their multilateral debt written off, said Gordon Brown, British chancellor of the Exchequer. However, no decision was made by the International Monetary Fund at its annual meetings this weekend on a proposal to fund 100 percent debt relief by revaluing the IMF's stockpile of gold to market prices. The IMF uses $40 an ounce as the value of its bullion, while the spot market in New York closed at $421.20 Friday. Nor did Brown get any advanced nations to accept his challenge that they take over the debt of the poorest nations. Britain has offered to pay off 10 percent of the debts on its own initiative. ~~~ Brown said he made no formal proposal to the Group of Seven or to the IMF on revaluing the IMF's gold, saying more groundwork needs to be done first. "There are no ideological objections," he said. Fiat -- Sharefin, 21:46:00 09/29/04 Wed Crisis looms due to weak dollar Many international institutions and renowned scholars have recently warned that the possibility of a US dollar slump is increasing and may even lead to a new round of "US dollar crisis." Since China holds huge amounts of US-dollar-denominated foreign exchange reserves, the authorities should consider taking prompt measures to ward off possible risks. ~~~ By the 2004 fiscal year, the US Government's outstanding debt stood at US$7.586 trillion, accounting for 67.3 per cent of its GDP, which exceeds the internationally accepted warning limit. The deteriorating current account deficit of the United States is another factor menacing the future fate of the dollar. ~~~ Another factor behind the risks of a US dollar slump is the weakened role of the so-called "oil dollar." Given the deteriorating relations between the United States and the Arab world, quite a few Middle Eastern oil-exporting countries have begun to increase the proportion of the euro used in international settlement. Reportedly Russia is also going to follow suit. If an "oil euro" is to play an ever increasing role in international trade, the US dollar will suffer. In China's case, its rapidly increasing foreign exchange reserve will incur substantial losses if the US dollar continues to weaken. At the end of 2000, China's foreign exchange reserve was US$165.6 billion. By the end of 2002, it rocketed to US$286.4 billion before it soared to US$403.3 billion by the end of 2003. By the end of June this year, the reserve was registered at a staggering US$470.6 billion. About two thirds of the reserve is dominated by the US dollar. As the dollar goes down, China will suffer great financial losses. Gold -- Sharefin, 22:52:30 09/28/04 Tue Goldcorp CEO McEwen: Gold To Hit $850 An Ounce By Heather Draper Dow Jones Newswires Tuesday, September 28, 2004 DENVER -- One of the gold industry's biggest bulls believes gold prices will hit at least $850 a troy ounce within the next few years. Goldcorp Inc. Chief Executive Rob McEwen said "gold is money" and warned that the ballooning U.S. budget deficit and inflated real-estate market will continue to eat away at the value of the U.S. dollar, which will make more investors turn to gold. When investor confidence disappears, McEwen said, "paper money eventually returns to its intrinsic value, which is zero." McEwen was speaking Tuesday to mining analysts and executives at the Denver Gold Forum, an invitation-only industry conference. He said Goldcorp is holding back 30 percent of its gold production because the company believes gold prices will go much higher. Fiat -- Sharefin, 22:23:46 09/28/04 Tue Currency Trading Rises to Record $1.9 Trillion a Day Foreign-exchange trading surged to a record daily average of $1.9 trillion this year as hedge funds and other money managers increased bets on currencies, according to the Bank for International Settlements. The value of transactions, which is about four times the average trading each day in U.S. Treasury securities, rose 36 percent from 2001, at constant exchange rates, the BIS said in its Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity. Gold -- Sharefin, 22:21:33 09/28/04 Tue Gold safer bet than currencies: Study GOLD offers consistently good protection against exchange rate fluctuations, particularly against the dollar, research by three economists from United Kingdom has revealed. The research released by the World Gold Council (WGC) has used statistical analysis of the relationship between gold and the exchange rates of various currencies against the dollar. ~~~ The key findings are that the dollar gold price moves in opposition to the dollar price of currencies such as the British pound, German mark, Swiss franc and Japanese yen. If the dollar appreciates, the dollar gold price falls. A fall in the dollar relative to the other currency produces a rise in the gold price. "Despite repeated periods of economic turbulence between 1971 and 2002 gold was, throughout, a consistently good protection against the exchange rate fluctuations this turbulence produced," the research pointed out. "Gold acquired the attributes of a monetary asset for a wide variety of reasons, many of which are discussed in this paper, but underlying all these reasons is the fact that gold cannot be produced by the authorities who produce currencies. This means that those who can increase the supply of money, and therefore from time-to-time debase its value, cannot by similar means debase the value of gold," the study said. Gold -- Sharefin, 22:19:50 09/28/04 Tue Seize Golden Opportunity On Debt, Groups Urge IMF Global anti-debt activists are rallying around a call issued by Britain on Sunday that urges the International Monetary Fund (IMF) to cancel debts owed by the world's poorest nations and finance the forgiveness through sales of its own gold. UK Chancellor of the Exchequer Gordon Brown called for full debt cancellation for the highly indebted nations, adding that his government would put up 10 percent of the cost of the move. He challenged other governments to help finance debt forgiveness. ~~~~ On Monday, anti-debt campaigners backed Brown's call and appealed to the IMF to "seize a golden opportunity to drop the debt." They urged rich countries to revalue the fund's gold reserves and used the added worth to lighten poor countries' debt burdens. Under the proposal the IMF would revalue its massive 100-million-ounce gold stockpile, which is currently undervalued at only eight billion dollars. That would release around 42 billion dollars more, according to the IMF's website, which activists say could be used to cancel poor countries' multilateral debts. The fund holds the largest official reserves of gold in the world after the United States and Germany. "The IMF knows that simply by revaluing its gold it could cancel billions of dollars in debts owed by poor countries," said Oxfam Policy Advisor Max Lawson. "The IMF is sitting on a golden stockpile it doesn't use while demanding debt repayments from poor countries that cannot provide basic education and health care." ~~~ Both the IMF and World Bank are endowed with huge reserves and earn enormous profits each year, according to recent research by Debt and Development Ireland. It recommends that the IMF sell only 20 million ounces of gold, over a period of three to four years, to avoid negative influencing the gold market. The fund is owed seven billion dollars by the poorest of indebted nations while the World Bank is owed 19.4 billion dollars. Activists say that revaluing the IMF's gold could also free funds to finance future development in poor nations. "Any deal on debt must also include substantial increases in money going to poor countries if it is to achieve anything for the world's poor, and revaluing gold would enable this," said Lawson. Gold -- Sharefin, 22:13:06 09/28/04 Tue Argentina's Central Bank Increases Gold Reserves Argentina's central bank bought more gold in July and August, taking its gold reserves up to 1.77 million troy ounces by the end of August, or 55.1 tonnes, according to data on the bank's website. The bank confirmed in August that it had bought 42 tonnes of gold in the first half of 2004 to diversify its reserves after the end of the peso's one-to-one peg against the dollar in early 2002. The bank's website showed that gold reserves were at 1.72 million ounces (53.5 tonnes) in July and 1.37 million ounces (42.6 tonnes) in June. Gold -- Sharefin, 22:12:16 09/28/04 Tue Gold Rises as Gain in Oil Prices Increases Inflation Concerns Gold in New York climbed for the second session in three as soaring oil prices boost the precious metal's appeal as a hedge against inflation. Crude oil gained for the eighth session in a row to a record $49.74 a barrel in New York amid concern that Nigerian rebels may target production. U.S. inventory fell after Hurricane Ivan reduced supplies from the Gulf of Mexico. Gold rose 1.8 percent in the past three weeks, partly because oil surged 11 percent. ``There has to be some inflationary expectation at some point'' with the gains in oil prices, said David Durrant, New York- based senior economist at Julius Baer Investment Management LLC, part of the Bank Julius Baer & Co., which manages about $100 billion, including bullion. ``How far can we push the envelope here and still talk about no inflation or very low inflationary expectations? That will give gold a boost.'' ~~~ Speculators increased holdings in futures to the highest this month as oil prices rose, reports from the U.S. Commodity Futures Trading Commission showed. Hedge funds and other large speculators had bought 64,327 more contracts than they had sold as of Sept. 21, up 17 percent from the week before, the commission reported Sept. 24. Net purchases still were less than half of the 144,253 contracts that speculators had in the week ended April 6 when prices reached a 15-year high of $433 an ounce. The amount that week was the largest since at least February 1983. ``The fund position is still relatively small,'' N. M. Rothschild & Sons (Australia) Ltd. said in a report today. ``This still leaves a lot of room for the speculative positions to increase.'' European central banks, which in March increased a limit on annual gold sales, may sell less than the 500 tons allowed because prices might rise and the dollar may weaken, some analysts said. Gold -- Sharefin, 22:02:41 09/28/04 Tue Class-Action Suit Seeks Damages For Gold Investors from Barrick and J.P. Morgan Chase, GATA Says Everyone in the United States who lost money trading gold since 1998 could recover damages from Barrick Gold and J.P. Morgan Chase if a federal class-action anti-trust lawsuit brought last week in New Orleans prevails, the Gold Anti-Trust Action Committee says. The suit is being underwritten by Blanchard & Co., the New Orleans coin and bullion dealer, and builds on Blanchard's own anti-trust suit against Barrick and Morgan Chase in U.S. District Court in New Orleans. The first suit, which is in the "discovery" or evidence- collecting phase, charges Barrick and Morgan Chase with manipulation of the gold market. That suit seeks injunctive relief -- a court order to stop Barrick and Morgan Chase from manipulating the gold market -- and is expected to go to trial in April 2005. The class-action lawsuit, in which gold investors Greg McKenzie and A.J. Miller are the lead plaintiffs, will attempt to quantify the financial harm done by Barrick and Morgan Chase to gold investors and devise a remedy for their restitution. "We expect to obtain compensation for all gold owners, not only for their losses from their gold investments but also for the profits they should have realized," Blanchard CEO Donald W. Doyle Jr. said in an interview with the Gold Anti-Trust Action Committee. Fiat -- Sharefin, 22:00:45 09/28/04 Tue Pressure grows on G7 to agree acceleration dollar devaluation PRESIDENT Bush is being urged to signal a further devaluation of the dollar of up to 20% to rebalance the global economy, ahead of Friday's Group of Seven (G7) and International Monetary Fund meetings in Washington. Senior US administration officials in Washington have over the past few days tried to influence the White House and the Treasury to put pressure on the G7 to agree to a dollar depreciation in its final statement. The move is being encouraged this weekend by calls from leading investment banks that the US needs to restart the long-term greenback depreciation of the past two-and-a-half years. In a new report, Binit Patel and Dominic Wilson, economists at Goldman Sachs, said: "Even taking into account the approximate 10% decline in the dollar since its peak in early 2002, the dollar has only gone less than half as far as needed." ~~~ Gordon Brown, the UK chancellor, will use the IMF meeting to push his plan for revaluing its gold reserves as a way of releasing more money to cancel debts the world's poorest countries owe the World Bank and IMF. Gold -- Sharefin, 22:22:16 09/26/04 Sun Lifting the gold bar in China SHANGHAI - Gleeful traders expect China's billion-plus people to play the gold market - restricted for decades - with gusto when it opens this December. Gold-jewelry sales should benefit from falling taxes and more competition, thanks to reforms, partly driven by World Trade Organization (WTO) agreements. However, despite rising incomes and inflation, prices and sales may not match expectations. The Shanghai Gold Exchange's (SGE) 13 commercial-bank members should offer spot trading of 10-gram lots via gold accounts, similar to stock-market accounts, from December if all goes to plan. "We are testing a new trading system that can realize futures, forwards, deferred and personal individual trades," said Jesse Yang Ming, SGE senior manager. "China is the world's fourth-biggest producer and one of the biggest consumers. It plays an important role in foreign exchange and will grow as an investment vehicle as China's economy grows and incomes rise," he told Asia Times Online. With stocks dreary and bank accounts - where Chinese have stashed savings equivalent to 40% of the country's gross domestic product (GDP) - offering little, gold's popularity might wax. "The Chinese like gold. The securities market is in poor shape, so attention is turning to other investments, like gold," said Yang. ~~~ If only a few of the 800 million to 900 million rural Chinese, who like many rural Asians covet gold for status and as ready cash at the gambling table or when disaster strikes, buy gold while they can, sales on the exchange and in emporiums will rise. By some measures the Chinese are short of gold - or uninterested. Analysts calculate about 5,000 tons hang around necks, adorn fingers and sit on mantelpieces in China, a low four grams a head. Annual consumption is 0.25 gram per person, against 0.75 gram in Taiwan, one gram in India and 2.75 grams in Singapore. Even the People's Bank of China - the central bank - appears light, holding gold equivalent to 2% of its assets, reckon pundits, compared with the European Central Bank's 15%. "Consumption may be of the order of 250 tons a year and may have the potential to rise to 600, of which perhaps over half would need to be imported," wrote research house GFMS in a World Gold Council report. A similar market transformation occurred in poorer India in the early 1990s. Demand tripled to 600 tons annually. "India's population is similar, in size at least, to that of China, but its per capita GDP at $2,540 is only 60% of China's $4,450 in 2002 on a purchasing power parity (PPP) basis, implying that China should take even more gold," wrote GFMS. But raw comparisons are folly. "The whole culture and ethos of gold in India seems so utterly different from that of China that any such gross comparison must be misleading," noted GFMS. China's gold appetite could still potentially match India's. "Just imagine, the Shanghai Gold Exchange can let the man on the street trade gold. If every other Chinese citizen bought one gram of gold, the demand would increase to 500 or 600 tons, just like India. We expect this to happen within three to five years," said Yang. ~~~ Such barriers plus the unconvertible yuan and restrictions only permitting gold's trans-border shipment as bars keep foreign players sidelined. One reason for keeping a tight check on gold is preventing it from becoming some form of a yuan proxy. Gold -- Sharefin, 22:17:50 09/26/04 Sun India helps boost global gold demand: The world's largest gold consumer, India was one of the key factors leading to a six percent rise in global demand during the first half of 2004 despite prices peaking past $427 per troy ounce. The price of gold, which has now moderated, is expected to average around $407 per troy ounce for the second half of 2004 leading to a further growth in demand, says the London-based global precious metals consultancy GFMS Ltd in its latest report Gold Survey 2004 Update 1. "Every major area of fabrication registered increases. However, the largest gain, in both absolute and percentage terms was seen in jewellery, which rose by more than six percent or 79 tonnes to its highest in the first half total since 2001," says the report. The other areas of fabrication saw a rise of four percent in the first half and a similar gain is expected in the second. The recovery in jewellery production excluding the use of scrap was even stronger, rising by 14 percent, as scrap volumes fell back in a number of price sensitive markets, notably in the Middle East and the Indian sub-continent. "Total jewellery fabrication rose to just over 1,300 tonnes with much of the gains occurring in Turkey, India, China and other East Asian countries," the report said. ~~~ Looking ahead, GFMS Ltd is forecasting that total fabrication over the second half will increase by a little over seven percent, largely as a result of ongoing strength in jewellery off-take, which is expected to rise by close to eight percent over the final six months. "Higher fabrication in every major region is expected to drive the continued recovery in jewellery, with the most notable rise expected to come from India," the report said. As a result, GFMS is forecasting that full year fabrication will rise by close to seven percent and reach a three-year high. Fiat vs Gold -- Sharefin, 22:15:29 09/26/04 Sun Gold Falls After Fed Says `Significant' Rate Rises Needed Gold futures fell after U.S. Federal Reserve meeting minutes for August cited the need for ``significant'' interest rate rises, strengthening the dollar and reducing the metal's appeal as an alternative investment. ~~~ Policy makers, when deciding to raise the benchmark rate to 1.5 percent, said there was a need for ``significant cumulative policy tightening'' to restore interest rates to a level that would foster growth without inflation. The central bank raised interest rates again, to 1.75 percent, on Sept. 21. Fiat -- Sharefin, 20:35:59 09/26/04 Sun DJ UK PRESS: Pressure Grows On G7 To Agree Dlr Devaluation LONDON ( Dow Jones ) --U.S. President George Bush is being urged to signal a dollar devaluation of up to 20% to rebalance the global economy ahead of Friday's Group of Seven and International Monetary Fund meetings in Washington, the U.K.'s The Business newspaper reported. Senior U.S. administration officials in Washington have over the past few days tried to influence the White House and U.S. Treasury to put pressure on the G7 to agree to a dollar depreciation in its final statement, the newspaper said. Recent data have shown the U.S. current account and trade deficits running at record levels, and economists have said a dollar depreciation is needed to rein these in. Gold -- Sharefin, 20:32:35 09/26/04 Sun Edgy gold investors to seek comfort at Denver show Rattled by a spate of high-profile mining disruptions on several continents this month, gold stock investors are looking to company bosses to reassure them that their investments are safe. Institutional shareholders who have watched Newmont Mining Corp. battle pollution accusations in South America and Asia and Canadian explorers forced to freeze projects in Africa will get a chance to demand answers from the world's largest miners at a conference that starts on Monday in Denver. "The risks associated with permitting and political events seem to be presently on a steep rise," said Michael Fowler, a mining analyst at Desjardins Securities in Toronto. ~~~ Denver-based Newmont has made headlines around the world and its stock lost 5 percent in recent weeks as Peruvian farmers accusing it of polluting local water blocked access to its Yanacocha mine, its second biggest gold operation. At the same time, police in Indonesia have detained Newmont executives in that country for questioning about claims by local residents that one of its mines has polluted a bay. In East Africa, Eritrea ordered four Canadian exploration firms to pack up their work without any explanation. Nevsun Resources, one of the casualties whose stock has since lost half its value, will present at the show. PONZI -- Shifty, 20:12:12 09/25/04 Sat Ponzi Chart Periodic Ponzi Update PPU Nasdaq 1879.48 + Dow 10,047.24 = 11,926.72 divide by 2 = 5,963.36 Ponzi Down 133.91 from last week. Thanks for the link RossL ! Go GATA ! Go GOLD ! Hi Ho SILVER ! $hifty Gold -- Sharefin, 23:25:56 09/22/04 Wed Weimar and Wall Street What is the relationship between Weimar Germany andWall St. of the late 90s? On the surface, what could be more different? Stock market booms are the best of times while hyperinflation is a nightmare. In a previous essay, I presented an analysis showing that the long-term bull market in stocks and bonds starting in the early 80s was a form of inflation. Unlike the inflationary period of the 70s, the price adjustments to monetary expansion occurred primarily in financial assets, rather than in consumption goods. Here, parallels will be drawn between our recent stock market mania and the raging inflations that can result in the total destruction of a nation's monetary system. Gold -- Sharefin, 23:24:38 09/22/04 Wed Europeans wait nervously for the golden revolution It is six months since European central banks announced they were renewing the gold-selling pact that has helped stabilise prices over the past five years. But a week before it comes into force, gold traders are waiting nervously for the details on who will be selling how much. The biggest uncertainty is whether the 15 signatories to the new accord will be able to sell the maximum 500 tonnes a year set for the new five-year pact, up on the 400 tonnes a year under the existing sales programme. Central bankers say there are enough sellers of gold among the European central banks to fulfil the planned sales quota. But bullion traders say not enough central banks have committed to selling their bullion under the new pact. They see this as a sign that the banks may struggle to dispose of all the gold for sale. Since the European Central Bank and 14 other European central banks announced in March that they planned to renew the existing five-year agreement, almost 1,400 tonnes of the planned 2,500 has been earmarked for sale. The bulk of these sale commitments have yet to be fully confirmed. "We doubt whether the renewed agreement will lead to an increase in gold sales by central banks. Rather, we believe there is a strong possibility that the signatory central banks could end up selling materially less gold," said John Reade, a precious metals analyst at UBS. |
All pages on this website are ©1998-2024 Gold Charts R Us - All Rights Reserved