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Oops - it didn't like my link - So here's the whole banana -- Edlo Traff, 08:43:56 07/22/02 Mon

(copyright Traff/Kitco - 2002)

Mrs Traff brought over a friend of hers and introduced her to me. Then my Mrs, said "Edlo, ya need to talk to talk to her about investing. I tried, to explain it, but I need you to talk to her for me. And she’s got a question about her pool"

I said, "Sure darlin, whatcha wanna know"?

The Mrs, gave her friend a reassuring look and then said, "tell her Edlo, why we are investing in gold".

Well, I thought about what I should say. Should I try to discuss with her, the business cycle and explain the findings of my research covering 200 years? Or maybe, I should tell her about dow/gold ratio, PE’s, fiat currency and our current record indebtedness?

After considering all these things, I said, “Tell me ‘bout your pool, Doris”!

Doris explained to me that her pool was getting dirtier than usual and those basket thingies weren’t picking up many leaves. I asked her if her pressure gauge on her filter was showing anything suspicious, but she didn’t know what one was. We called her son and made him run outside to check, and sure enough, that was the problem!

I told her that “every so often, a pool needs to be back-flushed”. After circulating 1000’s of gallons of water every day and filtering out dirt, leaves and other garbage, the filters get clogged up and can’t do the job any more. “back-flushing” reverses the flow of the water and spits out all that bad stuff that has been buildin up, for so long. I told her we could watch the dirty water coming out through a tube. When the water is clean again, we know we’re finished.

She seemed to understand and I talked her son through the process over the phone.

And . . .

Her pool was again working properly with good circulation restored!

Then, she asked me about investments. She said “I’ve lost so much money in the market, I am even having trouble sleeping at night. And I’ve done everything that my stockbroker told me to do”.

I began, “Doris, ya know our economy gets backed up too. Stock prices and debt got way too high. There have even been some corporate big-wigs that have been lying to investors. Ya know Doris, every now and then we got to clean out all that garbage as well.”

I told her that I thought we were actually beginning that “Back-Flushing” now. I also told her that historically during these back-flushing times, investments into gold and silver have usually done quite well. I gave her the name of a couple mutual funds as well as a couple of my favorite PM stocks.

She smiled and seemed quite pleased with herself when she said, “This is a whole lot like fixing my pool isn’t it?”

I replied, “Yep, Doris, you are right. Sometimes we just need to “back-flush”!

She asked me how long she should stay in PM’s. I told her to watch her sight tube. When layoffs have ended and new hirings begin, when some of this record debt has been worked off or dealt with, then it’ll be time to “jump back into the pool” again.

Uncle edlo (pool-boy, 2nd class)

Dirty Water -- Edlo Traff, 08:37:32 07/22/02 Mon

(Cause Sharefine id the "graph-Meister" and I picked -up somthin from his sight, I figured I oughta even it out by puttin somthin back)

http://www.kitcomm.com/comments/gold/2002q3/2002_07/1020722.102009.traffeeee.htm

Thanks Sharefin!

Fiat - no link -- Sharefin, 08:13:20 07/22/02 Mon

World Affairs Brief, July 19, 2002 Copyright Joel Skousen. Partial quotations with attribution permitted. Cite source as Joel Skousen’s World Affairs Brief
http://www.JoelSkousen.com
...
THE COLLAPSING STOCK MARKET: GOVERNMENT "PLUNGE PROTECTION TEAM" WORKING OVERTIME

With the DJIA down over 2,000 points in the past month, everyone connected with this market is having trouble keeping up the facade of proclaiming a "recovery right around the corner." Still, virtually every government spokesperson and private sector stock guru interviewed on radio or TV is trying to pitch the recovery, downplaying the depth and persistence of the current selloff.

President Bush has made two speeches in the past couple of weeks trying to bolster confidence in the economy, but in light of the president’s own Harken Energy scandals, he isn’t any more believable than Arthur Andersen & Company. Despite Congress’ near unanimous passage of the biggest overhaul of accounting standards to date, few expect to see significant changes. The insiders in big business who are immune from the law seem to be everywhere. Federal Reserve Chairman Alan Greenspan also seems to have lost his touch. No longer do the markets respond positively to his old magic pronouncements. Despite recently assuring Congress that the economy was heading for a full recovery, stock markets continued downward that very day by 166 points. Bush responded by attacking the integrity of the market players: "We've got to change from a culture of greed to a culture of responsibility...[but] I'm an optimist about the economy." --So are all the desperate yuppie stockbrokers camped by the money tree on Wall Street, who have a very big vested interest in wishful thinking.

Now that an estimated 60 percent of US households own stock, more Americans than ever are at risk from this manipulation. Most Americans have still not sold their collapsing technology stocks, in hopes of a rebound. Even though the value is gone from many stocks, the full impact has yet to hit the markets. One thing is certain--there is a broadening lack of confidence in stocks that could plunge the nation into a really deep recession.

The Fed has used up most of its options; interest rates cuts, legislative bailouts, and old-fashioned presidential cheerleading aren’t working any more. "You don't have too much room to go before you’re at zero," said Sen. Paul Sarbanes, D-Md., at the Banking Committee meeting on Tuesday. The Federal Reserve has cut interest rates 11 times in a row, leaving the federal funds rate at 1.75 percent--the lowest in almost 40 years.

While media financial analysts futilely tout the impact of a few positive earnings reports, bad news keeps flowing in. Yesterday, chip maker giant Intel announced another round of layoffs and cutbacks, as did other profitable companies in the high tech sector. Every week it is getting harder to believe the establishment’s pronouncements about the recession being over. There still is a lot of excess money floating around in the economy as the Fed keeps pumping up the money supply. But with a falling dollar, the US is finding itself hard pressed to attract the normal round of foreign buyers for US debt instruments and stock shares. The US relies on foreign investment to soak up about 1/3 of US debt. This means that the confidence game must be preserved at all costs. But America’s corporate world is now highly suspect on the international stage. It’s going to take more than a quick fix by Congress to restore foreign confidence and trust in US accounting practices.

But there is a much more sinister aspect to this story, a tale of government intervention which goes far beyond Federal Reserve rate cuts and confidence-boosting speeches. Today’s financial markets are largely manipulated, in a variety of ways. In the first place, as the world is now discovering, large international corporations have long engaged in fraudulent accounting practices to hide debt and overstate earnings--not to mention evade taxes. Secondly, the markets are falsely primed and propped up by injections of fiat money and credit through the Federal Reserve. A true honest money economy would not have allowed the kind of rapid ‘miracle’ growth the US experienced in the 90’s. Third, the markets are also manipulated directly. Have you ever noticed that the general market for normal stocks has been declining or stagnant for more than two years, and yet the leading indicator stock averages rise and fall with tremendous swings? Why does the high priced DJIA rise in price when the stocks of which it is composed are flat or falling?

This is an indication of intervention by government in the markets--focusing on the key indicators only. The markets run as much on crowd psychology as they do on economic expectations. The government has long since learned that it is usually sufficient to make the DJIA or the S&P 500 stock averages appear as if they are beginning to rise, and the general public will fund the rest of the upswing, jumping on the bandwagon. Much of the direct manipulation of index stocks is done by intervening in the futures markets on large volumes, highly leveraged. Many of these trades take place after the markets have closed--so it’s clear that the Powers That Be don’t play by the same rules you and I have to follow.

HISTORICAL BACKGROUND: For the past decade and a half (since the October crash of 1987) the US government has operated a semi-secret coalition of private investment firms coupled to the Federal Reserve whose purpose is to intervene in the markets (using public funds or credits) in response to any major downturn. Prior to 1997, there were only rumors to confirm the existence of the government’s illegal efforts to fix the markets. But since the market crash of October 1997 when the DJIA dropped 508 points, or 22.6 percent, in the biggest one-day loss in history, the existence of this group has been confirmed and become commonly accepted (and welcomed) within Wall Street. Technically, the government group is called the Working Group on Financial Markets (a.k.a. the "Plunge Protection Team"); the Secretary of the Treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission, and the Commodity Futures Trading Commission are the group’s official members. In reality, they just give the orders; the actual intervention is done by a joint group of selected partners from 5 or 6 of the major Wall Street brokerage houses--a quasi government-private sector partnership that is totally illegal.

Understanding this little segment of financial history is important to your understanding of how the illegal side of government operates. Let’s start with some background information by John Crudele, Financial Editor at the New York Post:

"Back in 1989 a Fed governor named Robert Heller proposed rigging the stock market. Heller had just left the Fed when he gave a speech suggesting that the central bank should step in and take direct action to keep the stock market from collapsing. The Fed had taken action before. It made sure there was enough liquidity during the crash of ‘87 to keep the system going. It may have even strong-armed a few banks into propping up the market. And it has often lowered interest rates at opportune times.

"But Heller's idea was different. He wanted a more direct approach, especially when the bond and currency markets were becoming uncontrollable [like they are these days]Heller believed that in an emergency, the Fed should start buying stock index futures contracts until it managed to pull stocks out of their nosedive. Essentially, whenever there is heavy buying of these futures contracts it causes the underlying stock market to rise. The futures contracts can be bought cheaply; they are highly leveraged so you can get more bang for your buck, and they eliminate the need for a rigger to purchase, say, all 30 stocks that make up the Dow. Heller explained that the process was simple. And it is. The trouble is, the government never has had authority to rig the stock market." [End of Crudele quote.]

Since when have the illegalities of government action stopped government recently? The Treasury Department decided to act without Congressional authority. As Rex Rogers wrote in November, 1997, the government by that point had the system down pat.

"Black Monday. On the last Monday in October [1997], the Dow dropped 550 points and, to everyone's relief, the exchanges stopped the trading thirty minutes early. If the new rules had not required the halt, it might have been much worse. Is this the beginning of the great crash? If it is, it won't be from a lack of planning on the part of President Clinton, Robert Ruben and the Federal Reserve.

"According to credible sources, it has become government policy to ‘protect’ the investment community from the laws of gravity. The government has even admitted as much. Alan Greenspan gave a speech in Lueven, Belgium [site of all the notably policy speeches in the EU] on the 14th of January, this year, in which he touted the Fed's obligation to bail out banks and private financial institutions not just by printing unlimited amounts of money but also through ‘direct intervention in market events’ [for which there exists no legal authority].

"S&P 500 Contracts. For a while now, there have been rumors among traders that the US government was stepping into the market from time to time to purchase S&P contracts. The obvious reason was to thwart short sellers and stem possible panics. The rumors [now known to be true] held that the government was buying S&P futures contracts through the good offices of Goldman Sachs, the firm once headed by Treasury Secretary Robert Ruben.

"If true, many people must have known about it. Everyone who did would be in a position to profit dramatically by purchasing the S&P futures in the full knowledge that the federal government was poised to intervene in the market to guarantee the profitability of their trades. [Every one of the insider brokerage firms did just that and profited handsomely. Outside these insider-connected companies, others who have direct access to Stock Exchange computers have developed programs to track these insider trades and tag along.] Under those conditions, anyone could trade S&Ps as profitably as Hillary Clinton did cattle futures.

"But I was skeptical. After all, such activity would (or should) require congressional approval. Also, if short selling is a legally sanctioned activity, wouldn't it be highly illegal to secretly intervene with public funds on behalf of the longs and ignore the rights of the shorts? [Good questions, and no one else is asking them--not the courts, not Congress, not the General Accounting Office watchdogs.]

"But seeing is believing, and now I'm convinced its true. The next morning after Monday’s big 550 point break, I, and everyone else trading S&Ps witnessed a most remarkable event. It must have been the most blatant display of market manipulation in the history of Wall Street. Or at least the biggest and most public. In spite of this, to my knowledge, not a peep was made by the establishment press.

"The tip-off was the ‘timing’ of a dramatic rise in the premium (number of points in which the S&P contracts were trading in excess of the value of the underling stocks). I have traded the S&P for years and I've never seen anything like it. The average ‘fair value’ of the premium that day was 600 points. Exactly six minutes before Bill Clinton was to address the market crisis on television, the premium rose almost instantly to 3,500. This was undoubtedly caused by the concerted purchase of what had to have been at least a billion dollars worth of S&P contracts.

"The Computers Blinked. The strange thing is that it almost failed to work. Normally, anytime the premium rises just a little bit above the fair value, computers which are programmed by the arbitrage investment groups automatically enter orders to sell the overvalued contracts and simultaneously enter orders to buy the undervalued stocks generating an automatic riskless profit. But this time it didn't work. At least not like it should have. The premium rise was so fast and so big that, evidently, the fail-safe systems kicked in whereby the computer didn't believe what it saw. [He is wrong here. Computers don’t act that way. Someone intervened to stop the programs from functioning.]

"Under these conditions, it stops trading and calls a human to see what is wrong. When I saw the 3,500 premium, I thought the same thing. Some kind of computer error. I immediately looked to see if the stock prices were rising, and they weren't. Dead in the water! I looked up at the TV, saw Bill, and it dawned on me. It was Slick Willie doing what he does best. Blatant manipulation of the highest order.

"I jumped in and made a very good profit. A lot of other traders did too. Of course Hilliary and Craig Livingstone were way ahead of me. But the computers were slower than all of us. It took about a half hour for their operators to override the systems and order the mass purchases of stock that the feds had been counting on. Ultimately, though belatedly, it still worked. A New Bull Market? All things considered, the con was perfect. The back of the would-be crash was broken and the bull was reborn. At least for now. The real mystery is why and how the media keeps mum.[It’s called collusion and conspiracy]

"A concerted investigation by the Wall Street Journal, New York Times or Washington Post would surely reveal enough evidence to blow this outrage sky high. This is nothing less than the illegal clandestine tampering with the free market. But like the murder of Vincent Foster, the rigging of Wall Street is a dirty little secret the media establishment would rather not reveal. The American people suffer less from ignorance and more from an illusion of knowledge." [End of Rogers quote.]

In reality, the press was already in on the fix. Clear back in February of 1997, Brett D. Fromson, a Washington Post Staff Writer, had written the first major media story on the Plunge Protection Team, in an article of the same name. The government had obviously leaked the story to the Post in order to prepare the markets to look to government help when the next crisis arose. The article mentioned nothing about the government’s lack of authority to fix the markets, and no one with any authority uttered a word of protest. It appears that what we are dealing with is more than just a fix in the stock market. Clearly the Powers That Be are trying to stave off a collapse, for now. Whether or not they can, given the market’s tremendous downward inertia, remains to be seen.

Fiat -- Sharefin, 07:55:32 07/22/02 Mon

DOW BREAKS SEPTEMBER LOW

LONG TERM TRENDLINES BROKEN... Last week, we talked about several key market averages challenging 20-year up trendlines. Unfortunately, several were broken this week -- mainly in the NYSE and S&P 500 Indexes -- as shown in the chart below. This pretty much confirms that the "secular" bull market that started in 1982 has ended. That means we are now in a secular bear market -- which is usually much worse than the "cyclical" bear markets we've been used to for the past two decades. Notice that the price scale on the right is logarithmic, which means that it is based on percentage changes. That's why the scale gets squeezed as the numbers get higher. This differs from the normal arithmetic scale where each price increment is given equal weight. The reason we're showing this chart is because log scales are preferable for spotting long-term trend changes. And we certainly are seeing one -- to the downside.

Fiat -- Sharefin, 06:28:54 07/22/02 Mon

Banking System in Trouble?

Gold -- Sharefin, 06:17:49 07/22/02 Mon

The Short and Long-Term Outlook for Gold

In my entire 7 years looking at stock price charts I would have to say that Chart 1 below is surely one for the history books. Why? There are a number of reasons. First, note that Chart 1 is plotted on a YEARLY scale. You must wait an entire year just to plot another price bar on the chart! This implies that the oscillator plotted in the upper half of chart one is also only affected just once per year. Clearly this chart has some long-term implications. If you are somewhat familiar with Technical Analysis, then you know that when an oscillator breaks out up above the 20th percentile line, it issues a buy signal. The stochastic oscillator is good for identifying shorter-term buy and sell points along a major trend. However, in the much longer yearly time frame below, it is indicating a new bull market!

Goldfinger -- Sharefin, 06:00:47 07/22/02 Mon

Please note that this forum is a private one & moderated.
It is more for archival of gold news & charts than idle chit chat or opinionated thoughts on the gold markets.
There are many gold forums where you will be welcomed to discuss your opinions but here is not one of them.

If you look back through the archives you will soon see what the theme of this site is for.

Regards Nick

Aldebaran -- Sharefin, 05:55:14 07/22/02 Mon

The codes are correct ie
XAX=X
XAG=X
etc
Trouble is that the Yahoo servers won't give out historical data on these quotes.

This is the code that no longer works
http://chart.yahoo.com/t?s=XAX=X

They used to but now no longer do.
The same thing happened to the JGOL prior to them closing it down.
The guys running the Yahoo servers have the ability to turn on & off certain features and they have taken a disliking to gold.

Just like the way the JGOL - XGO - TGL were removed.
Nothing suspicious but collectively it looks like collusion.

This is only a test. -- Goldfinger, 23:43:01 07/21/02 Sun

If this test succeeds ya'all may have da benefit of my expertness.

re:Also Yahoo removed spot quotes AG/AU/PL/PT -- Aldebaran, 22:57:14 07/21/02 Sun

Sharefin,
These urls are working for me, are these what you were looking for?
Best Regards

http://finance.yahoo.com/q?d=t&s=XAG=X
http://finance.yahoo.com/q?d=t&s=XAU=X
http://finance.yahoo.com/q?d=t&s=XPD=X
http://finance.yahoo.com/q?d=t&s=XPT=X

Periodic Ponzi Update PPU -- $hifty, 22:42:14 07/21/02 Sun

http://home.columbus.rr.com/rossl/gold.htm

Periodic Ponzi Update PPU

Nasdaq 1,319.15 + Dow 8,019.26 = 9,338.41 divide by 2 = 4,669.20 Ponzi

Down 359.81 from last week.

Is that a Caribbean tune I hear coming from Wallstreet ???

!!! " Everyone ready to Limbo ?" !!!

How Low can you go?

Thanks for the link RossL

Go GATA
Go Gold

$hifty

Gold -- Sharefin, 19:52:51 07/21/02 Sun

Gold, real estate lure investors from stocks

Falling stock prices, investigations of corporate deceit, and money market funds that yield little more than inflation have pushed investors to real estate and precious metals as a shelter for their cash.

More Americans are seeking the comfort of precious metals as well. This week, a banker bought 1,524 one-ounce American Gold Eagle coins, worth about $500,000, says Michael Kramer, head trader at Manfra Tordella & Brookes Inc., a metals dealer in New York.

''One guy is buying 200 to 300 ounces of gold a week,'' Kramer says. Many people started picking up bullion at below $300 per ounce earlier this year, he says, so ''it is the first time in years that somebody has been able to have a profit.''

At FH Coins & Collectibles, a dusty, standing-room-only shop crammed with old porcelain and crystal as well as coins on New York's Upper East Side, owner David Heller says people are calling up or walking in off the street three out of five days a week and asking how to buy gold. Usually, he sells them American Eagle, Canada Maple Leaf, or South African Krugerrand coins.

''A year ago, you couldn't give it away,'' he says. Gold, which doesn't pay dividends, was trading below $300 an ounce and ''you couldn't interest anybody in buying.''

Demand at his shop now is almost as strong as it was in 1999, when investors hoarded gold on fears that the arrival of Jan. 1, 2000, would cause computers to malfunction and throw business into chaos. ''With everything going on in the economy, people want something substantial,'' he says.

Gold -- Sharefin, 19:35:57 07/21/02 Sun

Gold At 4-Wk Highs, Due Higher

However, any additional equity market weakness is expected to push gold higher again and allow for a retest of recent resistance around $327 and June's high of $330.

Leonard Kaplan, president of Prospector Asset Management, said that with the equity markets and dollar expected to register further declines over the coming months, gold is well poised to make another sustained push higher and target the $360-380 area by the end of the year.

Gold -- Sharefin, 19:34:15 07/21/02 Sun

SA Government's Bald Mining Lie Exposed

The SA Ministry of Minerals and Energy has contemptuously fobbed off requests to justify a claim that less than 1% of mining ventures in the country are "black" owned. Communicating through journalist cum spin doctor David Barritt, Departmental officials told Miningweb to do its "own calculations".

Gold -- Sharefin, 19:32:21 07/21/02 Sun

Gold regaining former glory as a safe haven

"Gold did not do well in the stock market bubble. But now that it has deflated, gold has returned as an asset class and as a reserve," said John Ing, president of Maison Placements Canada in Toronto.

Fiat Gold -- Sharefin, 19:21:15 07/21/02 Sun

AUSTRALIAN GOLD STOCKS SURGE AMID RALLY IN BULLION PRICES

A sharp rally in bullion prices has helped gold stocks shine a glimmer of light through the dark mood gripping the local stock market.

Fiat Gold -- Sharefin, 19:17:15 07/21/02 Sun

Standard Bank offers gold plan

Standard Bank Offshore has introduced a capital guaranteed product linked to the price of gold and with a 12-month lock-in period.

Lenny's Corner -- Sharefin, 19:14:59 07/21/02 Sun

GENERAL COMMENTS

The external macroeconomic changes in the financial world seem certain to propel gold and silver higher. On Friday, the US trade deficit set yet another record at 37.6 Billion USD, up 4% from last month and is demonstrating that money is flowing out of the US at an increasing rate. The stock markets in the US continue to collapse at breath-taking speed as disenchantment begins to grow among investors. And, most importantly, I do not expect these trends to change. I look for the USD to continue to lower prices and for the stock market indices to continue their incredibly vicious bear market. One can tell that the declines of the markets still have a way to go, over the longer-term, as investors are, incredibly, still rather confident that the bull will be resurrected soon. All the advice one hears on CNBC and from the financial press is that this is just a correction, soon to be over. Please note that if the stock market indices are lower this year, which is almost a certainty, we will have seen a bear market for 3 straight years, not seen since 1939-1941 (the beginning of WWII) and for three years during the Great Depression of the 1930's. To say that this is a correction is simply more disinformation and lies from the Wall Street firms.

To get off on a tangent, I see the stock market as doomed. If one believes, as I do, that markets have more to do with psychology than reality, that perception is more important than facts, then certainly investor psychology will only worsen as events unfold. Pardon the language, but you are only a virgin once. Confidence and integrity, once lost is impossible to regain. First, investors learned that some of the Wall Street analysts were simply shills and touts, without integrity or any prescient ability in the market. Secondly, investors were shocked to hear to learn of the fraudulent practices of some accounting firms, who completely shirked their responsibilities to uncover corporate misdeeds, and who were happy to conspire with corporate management for the benefit of a large fee. And then, you have news of corporate scandal after corporate malfeasance hitting the markets. Add to the recipe the fact that, since early 2000, the DJIA is down about 32%, the NASDAQ down 81%, and the S&P's down almost 50%, and one can sense that all hope is gone for a vibrant long-lasting recovery. Even if the economy begins a substantive turnaround, the damage has been done to the equities markets. Confidence has been destroyed.

As the economic and investment cycles change, from a complete worship of "paper assets" from the 1982 to 2000 era, to a beginning desire for hard assets, investors will begin to seek refuge from the cataclysm in other markets and will buy the precious metals. This process is still in its infancy as such paradigm shifts in psychology take a whole lot longer to take hold than one would think. But, we are seeing recommendations for the purchase of gold from respected analysts that would have seemed impossible in years past. Last week, Morgan Stanley's global strategist, Mr. Barton Biggs joined the goldbugs, in years past thought of as the lunatic fringe, in recommending gold. In his words, "I have never believed in gold, for all the conventional reasons, but now I am changing what's left of my mind. I think that there is a plausible case that a professionally managed portfolio...could realize returns of 15% real per annum in the difficult environment ahead". Continuing with his quotes, "In a bleak world, gold could beat almost everything else, it certainly is possible that gold can return to its long-term equilibrium inflation price of $500 per ounce".

OK, if that doesn't rock your world, global investment bank HSBC recently published a report on the gold market in which their analyst predicts that gold could have an upside of "$100 to $200". As the mainstream analysts begin to recommend gold, as investors weary of their failures in traditional investment vehicles begin to push some money into the gold market, we could certainly see some excitement, in my opinion. While such analysts may indeed be coming to the party a bit late, better late than never.

The turnaround by Mr. Biggs is attributed to Peter Palmado, chief of Sun Valley Gold, who authored a report that states that it is not the USD that predicts the gold price, but the stock market. Since 1988, the price of gold has had a negative .85% correlation with the S&P's, and since 1994, this correlation has risen to .94%. So, if you are bearish on the stock markets of the world, then it must follow that you are bullish on gold.

Recently, the acclaimed international precious metals consultancy, GFMS, identified China and India as the critical "swing" factors in the silver market. China, being a major seller of late, and, India, being the largest consumer in the world. It is estimated that silver demand in India has risen by over 20% this year. While the prospects of a declining global economy may deter silver prices from rising due to lessening fabrication demand, I would believe that it is probable that silver prices will largely shadow gold prices in the coming year. And the possibility exists that silver will gain a patina all of its own among investors.

Edlo -- Sharefin, 17:58:01 07/21/02 Sun

Thanks - I love drinking & I love drinking with friends.

Cheers to you too.

Thanks Sharefin -- Edlo Traff, 08:26:14 07/21/02 Sun

Thanks Sharefin,

Your post of the Jim Sinclair audio link, was most reinforcing.

I circulated it to my friends and loved ones as well as the "B&G". (I hope you approve)

Though you now hang out in a different pub than I, I still call ya "neighbor" and appreciate havin ya around.

Best to ya pardner,

Uncle edlo (Reachin cross the net to pat ya on your back)

Gold -- Sharefin, 07:11:27 07/21/02 Sun

India 'biggest' swing factor in global silver market: GFMS

An international metal consultancy agency, Gold Fields Minerals Services, has identified India as one of the biggest 'swing' factor in the global silver market apart from China.

"Silver demand in Asia is dominated by a handful of large markets, namely Japan, China, India and Thailand, who collectively account for around 40 per cent of the total world fabrication offtake," according to UK-based GFMS Director Paul Walker.

Gold -- Sharefin, 07:09:30 07/21/02 Sun

It's not too late for a gold fund

Viewed by many as an investment for troubled times, gold funds have been enjoying a shining moment. But if the gold bugs are right, and we are in the middle of a sustained bullion run, it is not too late to play the gold card.
.
Managers of gold funds are particularly optimistic because, unlike previous bull runs in gold, there appear to be more than one or two factors driving prices higher.
.
"The Washington Bank Agreement, signed in September 1999, limited the amount of gold that banks could sell back into the market every year, which has boosted confidence in this asset class," said Evy Hambro, who runs an international gold fund for Merrill Lynch.
.
"Global gold production will also be lower this year and in response mining companies have drastically reduced their dependence on exotic hedging contracts," he added. These, added to the weakening dollar and generally nervous market conditions, mean that gold has particularly strong support.
.
As a rule of thumb, for every 1 percent movement in gold prices, there is a 3 percent movement in gold stocks. Hambro recommended that investors limit their gold exposure to 5 percent of their portfolio.

Gold -- Sharefin, 07:05:06 07/21/02 Sun

Gold regaining former glory as a safe haven

Gold soared US$6.90 to US$323.90 an ounce yesterday as investors dumped stocks in favour of bullion, a commodity favoured as a safer bet than the weakening U.S. dollar or sinking global equities.

The prime driver was news of a record U.S. trade deficit. The trade gap for May was US$37.64-billion, a 4% jump from April. That points to a further weakening of the U.S. dollar because it shows that money is flowing out of the U.S. at an increasing rate. The dollar is at a 30-month low against the euro.

Then there was the ongoing meltdown of global capital markets. Falling stock prices have sent investors searching for alternatives. The S&P 500 composite index his down 25% this year.

"Gold did not do well in the stock market bubble. But now that it has deflated, gold has returned as an asset class and as a reserve," said John Ing, president of Maison Placements Canada in Toronto.

Mr. Ing believes gold is on track to rise to US$375 an ounce by the end of the year, and continue to climb to US$510 in 2003.

The gold bug has even begun to nip at market watchers who have previously favoured stocks.

"I am changing what's left of my mind," said Barton Biggs, chief global strategist with Morgan Stanley.

"This is a plausible case that a professionally managed portfolio consisting of the metal itself and gold shares could realize returns of 15% real per annum in the difficult environment ahead."

"Gold is becoming a more viable alternative, especially considering low interest rates and falling stock markets around the world," said Mark Rzepczynski, president of John W. Henry in Boca Raton, Fla.

Gold -- Sharefin, 20:30:06 07/20/02 Sat

A must listen report on gold, derivatives & what is coming in the markets by Jim Sinclair.

Jim Sinclair - audio file

ChartsRus -- Sharefin, 11:11:38 07/20/02 Sat

Half my weekly charts are now online.
The rest will follow tomorrow.

Major volatility & mega changes.
Looking forwards it looks very bright for gold.

Charts Online

Gold -- Sharefin, 11:09:13 07/20/02 Sat

Just to clarify what's going on with gold & the global gold indexes.

Across the globe there's four major producing countries and each of these countries had a major gold producers index.
They are;
South Africa - JGOL index
US - XAU index
Australia - XGO index
Canada - TGL index

Well in the last few months three of these indexes have been permanently removed.
The management of these sharemarkets indices have been taken over by either S&P or FTSE and in their opinions we don't need these gold indexes anymore.

S&P have replaced the TGL with the S&P TSX but the history of this chart only goes back a year.

Also Yahoo has removed it's spot quotes for AG/AU/PL/PT

It's almost as though those who control these market indices don't want investors to observe what is currently the hottest sector and to see how it's performing.

Hence my desire to replace these indices to observe the gold bull market with.

The new indices are all Market Cap Weighted and modeled on the former indexes.

They are:

SAGOLD

OZGOLD

CANGOLD

These charts are updated on a daily basis.

Spread the word - let others know what's going on and why and where to find these new gold indices.

Gold -- Sharefin, 10:49:22 07/20/02 Sat

Here's a new gold index to replace the recently removed JGOL South African Index.
SAGOLD

Fiat -- Sharefin, 03:51:30 07/20/02 Sat

The ultimate conspiracy charts.

Diagram one

Diagram one

Gold -- Sharefin, 21:03:58 07/19/02 Fri

The seminal gold analysis is in

For investors, gold is the single best hedge against the risk of low real capital returns, regardless of what may cause it: inflation, deflation, dollar weakness, credit, systemic, geopolitical risk, etc., or any combination thereof. That is the power of gold. It often defies investment classification, whether it is cultural or religious, Eastern or Western, ornamental, industrial, or monetary. Yet in an age where there seems to be an infinite supply of consumable commodities from DRAM to bandwidth to cars to money, what defines gold is scarcity."

Cobra -- Sharefin, 20:56:29 07/19/02 Fri

I'm still of the opinion that what is to unfold has only just started & that it's going to be a long time unfolding ie years.

That gold has stood up & allowed others to notice how it reacts is a good sign and more than promising of what's to come.

My swing chart's showing that we're getting close to the end of the current rout & I'd expect a bounce in general markets soon but then comes the real rout and this is when gold should really start to out perform.

The next few weeks I expect will be highly volatile and gold is looking like it wants to shoot the gate.
Whether the masters can control it and get a bounce in the equities is another question.
But then they almost look as though they are loosing control.

A quick mini crash down in stocks next week would be fitting with a bottom - then it's time for a breather before the next wave down.

Now the question is will gold breech $330 during this mini crash?
If so then it's all aboard the gold train.

Here's the latest Dow/Gold ratio chart with the latest reading at 24.76.

Time to hit the Bunker -- Cobra, 17:15:35 07/19/02 Fri

Nick.....we are looking at some serious incomming here,
the bunkers may be the only safe place to be for a while.
The ratio is making some serious moves and those who have made preparations in advance should be able to do just fine.
This is unfolding just like we thought it would, the gold market appears ready to make people sit up and take notice.

BOJ may allow dollar crash -- Giovanni Dioro, 14:20:18 07/19/02 Fri

I re-read my copy of "The Coming Disasters: an Update" published by Dr John Coleman's World in Review (see my 2 posts of July 10).

In it Dr Coleman says that Japan knows that the american consumer is tapped out and is going to abandon the US markets to a large degree and concentrate on developing its domestic markets. Now again it appears that Dr. Coleman's predictions are coming true.

The following article appears on Jeff Rense's site:

"Bank of Japan Governor Masaru Hayami made a shocking public warning July 11 of a coming 1971-style U.S. dollar crisis, the kind which collapsed the postwar Bretton Woods monetary system. "The possibility of a worldwide move to dump the greenback is fairly high," he told a televised meeting of the Japanese Diet. "A deterioration in U.S. fiscal conditions could lead to a weaker dollar," which "could prompt investors outside the U.S. to withdraw assets from the country."

Such blunt statements by Japan's Central Bank, let alone by the highly conservative 85-year-old BOJ Governor, are unheard of.

The recent steep decline of the dollar, Hayami said, "resembles the situation in 1960-1970, when the U.S. government was suffering from twin deficits"--referring to the combined domestic budget deficit and swelling U.S. foreign trade deficit which forced President Nixon to pull the dollar off gold, and torpedo the Bretton Woods system, in 1971. "The U.S. will probably fall into a twin-deficit status again this year," Hayami said.
Bank Of Japan Sees 1971-Style Dollar Crash

Silver -- Sharefin, 08:15:36 07/19/02 Fri

Aug Gold Jumps $7 To 17-Day Highs

Comex Aug gold futures pressed through
resistance Friday around $319 in the form of the converged 30- and 50-day
moving averages to trip resting stop-loss buy orders and hit 17-day highs of
$326.
Falling equity markets and a weaker dollar against other currencies were
behind the break higher. Dealers said more gains were expected on any further
stock market and dollar losses.
Resistance was seen at $327-$328 initially and then at $330.

Silver -- Sharefin, 08:13:58 07/19/02 Fri

Rediscovering the gold/silver ratio - pdf file

Gold -- Sharefin, 08:11:19 07/19/02 Fri

Poll: Gold price to keep rising

Gold and silver prices are forecast to rise this year and next while platinum and palladium will struggle to fend off declines, a Reuters poll of leading metals analysts showed on Friday.

The poll of 19 analysts forecast that gold would rally 16% this year to average US$313.27 an ounce in 2002, then gain at a slower rate in 2003 to average $319.75.

Gold -- Sharefin, 08:09:40 07/19/02 Fri

Western Areas closes 1.5 million ounces of hedges

South African gold miner Western Areas Ltd said on Thursday it has closed 1.5 million ounces of its hedge book, leaving its anticipated open hedge positions at 1.9 million ounces over 12 years.

Fiat -- Sharefin, 07:27:57 07/19/02 Fri

This bear is here to stay, Mobius says

Mark Mobius, the Franklin Templeton fund manager and emerging markets specialist, predicts the bear market is here to stay for another two years because valuations remain "out of whack" and investors have yet to reach the point of "disgusted selling."

"It's a bear market that's not going away anytime soon," said Mr. Mobius, the Singapore-based manager of the company's Emerging Markets fund and one of the industry's heavy hitters. He was in Toronto yesterday for the annual meeting of the Templeton Growth Fund, one of the benchmark products of the Franklin Templeton Investments family of products.

Fiat -- Sharefin, 07:02:47 07/19/02 Fri

The Secret World of Banking

All the headlines about corporate disclosures and the need for transparency are sending shivers through the banking industry and its regulators who have always lived in a protected and largely secret world.

Fiat -- Sharefin, 06:59:24 07/19/02 Fri

Who Controls The Federal Reserve System?

Now that we know the Federal Reserve is a privately owned, for-profit corporation, a natural question would be: who OWNS this company? Peter Kershaw provides the answer in "Economic Solutions" where he lists the ten primary shareholders in the Federal Reserve banking system.

1) The Rothschild Family - London 2) The Rothschild Family - Berlin 3) The Lazard Brothers - Paris 4) Israel Seiff - Italy 5) Kuhn-Loeb Company - Germany 6) The Warburgs - Amsterdam 7) The Warburgs - Hamburg 8) Lehman Brothers - New York 9) Goldman & Sachs - New York 10) The Rockefeller Family - New York

Fiat -- Sharefin, 06:52:06 07/19/02 Fri

The Plunge Promotion Team

The Fed and the UST routinely intervene in markets, indeed the Fed was set up to intervene. Bonds, currencies, gold - not to mention oil, via the Strategic Petroleum Reserve, and all manner of agricultural products, through the agency of other arms of government all these are regularly targeted for Governmental price-fixing..

The BOJ, BOK and HKMA openly interfere in stock markets, too, so what’s the big deal about any hypothetical PPT activity?

Considerations of constitutionality, while of prime significance to Libertarian concerns about the role of the state, are not the issue here, but the functioning of markets is.

It is a prime tenet of von Mises and the rest of the Austrians that any government intervention in the market serves to pervert it and to pave the way for more intervention, usually to undo the unforeseen and unfailingly malign effect of the first.

Suppressing market activity in setting free and fair prices in exchange is like introducing a necrosis, a financial leprosy, if you will, into an extremity, even a limb, by preventing the unadulterated propagation of those critical market signals which allow the efficient allocation of resources to take place and for production, and hence income, to be maximised.

Just as in the case of a real leper, that lack of feeling, that desensitization allows for injuries and infections to occur without remedy, until, in the end, the victim succumbs to a life of blight, disfigurement and even incapacity.

So if the PPT is truly active - as we suspect, but cannot ever prove - we must draw two profound conclusions;

firstly, that markets are weaker than they seem - with all that lesson implies for traders - and that the short-sighted attempt to circumvent a violent decline is only likely to prolong the agony, while increasing the risk that the misled innocent, as well as the consciously culpable, are put at loss by being inveigled to overstretch themselves as part of the wrong-headed fetish for increased consumption as a panacea for all ills:
secondly, that the retardation of the necessary liquidation of the excesses of the Boom serve no purpose other than to prolong - but not perpetuate - the incumbency of those in positions of power, both governmental and corporate, who have been most at fault in reducing us to our present straits. This is a much more serious hazard to the commonwealth because, while the first is the way to turn a Bust into a Depression, this is the path by which a Depression is turned into a Dictatorship - however disguised in the rhetoric of economic ‘security’.
Rather than a Plunge Protection Team, what we need is the emetic of a Plunge Promotion Team.

Send ’em all to Chapter 11, let God sort them out, and let the entrepreneurs get on with investing scarce capital as best they can to alleviate Man’s needs.

Gold up -- WIFFO, 06:41:44 07/19/02 Fri

Houston we have ignition! ...gold has finaly moved out of the starting blocks. After a dull week of nerve biting non -action as the dollar and stocks fell around it, gold suddenly decides to spike up. Is this the begining of the end of the charade about value for money, or is it the begining of recognition of what is safe value for money.

Gold -- Sharefin, 06:33:29 07/19/02 Fri

GOLD & SILVER POTPOURRI

We do not believe investors nor the elitists understand the enormous impact
that China will bring to gold and the precious metals market

This is the most significant event since Americans were allowed to own gold bullion in 1971. We expect China will be a major gold buyer quickly, and will continue to be for years to come. This will be part of China's plan for economic supremacy rather than accomplishing power through war. The sale of dollars for gold would be natural for the Chinese. Gold adds to China's economic power.

That is also why Russia is accumulating gold. Short-term we will experience rising inflation due to the declining dollar, which will cause further dollar selling and more gold purchases. Remember gold is the ultimate currency and all the desperate, surreptitious, devious acts of the FED, Treasury, and gold bullion bankers to suppress gold and manipulate the gold market will be unsuccessful.

As gold goes higher and hedged producers get margin calls on their hedge positions, there is a good chance trading will be halted in their shares. Upon reopening we'd expect those shares to move lower. The lenders would then receive Treasury stock for their loans putting them in a controlling position in the companies. This is a good example why you don't want to own shares in a hedged gold producer.

Gold and silver: gold hit a mysterious block ever since last Thursday, when the G8 summit took place. Gold had difficulty keeping its head above water and rallying above highs. A bit of coincidence, eh? The latest round of concerted currency intervention to keep the dollar from collapsing last week failed miserably. In case the market participants playing these games forgot their history, it didn't work in 1995 when the dollar slid off the edge of the cliff and dropped to 79 yen. We don't think it'll work now as account deficits, trade deficits, and budget deficits are four to five times larger than they were then. The massive hang-up on dollars in hands of US investors and foreigners is frightening. If any one of the market participants gets an itchy trigger finger and decides to sell any type of volume, it will overwhelm any intervention we're seeing in the currencies market.

Gold -- Sharefin, 06:30:02 07/19/02 Fri

Gold sentiment index remains bullish

The wall of worry in the gold market remains quite resilient. There thus is no contrarian-based reason to expect gold's bull market to be over.

Consider the latest reading of the Hulbert Financial Digest's gold sentiment index. It measures the average gold market exposure of those gold timing newsletters tracked by the HFD that communicate electronically to their subscribers.

As of the close on Thursday, the index stood at 23.1 percent. That means that the average timer is allocating 76.9 percent of his gold portfolio to cash.

This is bullish because it means that most timers remain skeptical that gold is in a bull market. On all other occasions in recent years when gold approached or exceeded $300 per ounce, gold timers fell over themselves jumping on the bullish bandwagon -- with the Hulbert Financial Digest's gold sentiment index sometimes getting to as high as 90 percent.

Gold -- Sharefin, 06:27:08 07/19/02 Fri

Centaur Mining to be wound up next month

Centaur Mining and its sister company Centaur Nickel, will be wound up next month.

Centaur entered administration early last year when the companies could not meet interest payments to US investors.

A compensation offer from the company directors has been turned down by creditors and administrator, Robyn McKern, says Centaur will be liquidated at the beginning of August.

The groups owe unsecured creditors in Australia more than $80 million and over $500 million is owed worldwide.

Ms McKern says the liquidators will pursue claims against the company directors for insolvent trading.

"In the committee meeting, that we held earlier this week, the creditors expressed extreme disappointment that that's the way it has to go, that they are forced to await the outcome of litigation," she said.

Mr Gutnick could not be reached for comment.

His lawyers have previously denied Centaur traded while insolvent.

----------
May 7-May 11, 2001
On Wednesday gold remained rangebound in the morning, fixing at $265.20 in London. Market talk that failed Australian producer Centaur Mining & Exploration Ltd might be FORCED to close out its hedge book brought the market suddenly to life later in the day and gold surged upwards, reaching above $270 before running into overhead resistance.

May 14 , 2001 :
Centaur has an obligation to deliver gold against a forward contract. But because the company stands to be wound up on Monday, it is FORCED to go to market and buy more than a million ounces of gold at an average $423 a troy ounce in order to close its hedge books.

April 23, 2001 * Robert Chapman:
Australia's Centaur Mining has defaulted on 40 TONS of gold to Chase Bank, yet the media fails to carry the news.

Fiat -- Sharefin, 23:48:10 07/18/02 Thu

Special Report - Corporate Corruption

BUSTED:
SETTLED:
UNDER INVESTIGATION:
CEOs IN TROUBLE:
THE INVESTIGATORS:
THE AUDITORS:
RELATED

Fiat -- Sharefin, 23:44:20 07/18/02 Thu

Economist Galbraith sees more corporate scandals

The revelations of corporate deception that have disillusioned investors and left Wall Street reeling come as little surprise to economist John Kenneth Galbraith.

The man who predicted nearly half a century ago that an American prosperity boom would usher in a rise in executive wrongdoing sees more cases as an inevitability that not even better regulation can halt completely.

"This is the crisis of the modern corporate economy," Galbraith, who wrote the best-selling book "The Great Crash 1929" in 1954, said in an interview at his home this week.

As he spoke, accounting scandals and fears about the economic damage they could wreak had crushed major stock market indexes to multiyear lows despite soothing rhetoric from President George W. Bush and other administration officials.

"As long as we have the power of management and the vital communities associated therewith, including auditing and the government, we are in risk of recurrent cases like Enron or WorldCom," Galbraith said.

Just as booms seduce some corporate leaders into bending the rules, business-cycle downturns reveal the rule-breakers, Galbraith wrote half a century ago of the 1929 crash.

"Should the American economy ever achieve permanent full employment and prosperity, firms should look well to their auditors. One of the uses of depression is the exposure of what auditors fail to find," he wrote in "The Great Crash."

"There's a certain parallel in all periods of boom and associated optimism leading on to insanity and recession leading on to a cautious pessimism and those are standard features which nobody wants really to recognize," he said.

"Whatever else human beings, business, the economy can control, the swings -- of optimism to pessimism, from conservative finance to reckless speculation -- have a life of their own. And an untold life nobody can quite predict."

One of the most interesting of those parallels in "The Great Crash" are so-called "incantations" by politicians, economists and authority figures when stocks were plunging.

Fiat -- Sharefin, 23:39:26 07/18/02 Thu

Corzine tied to stock scheme

Sen. Jon Corzine, whose Wall Street expertise plays a key role in Democrats' strategy on corporate responsibility, led an investment banking firm that is being accused of inflating stock prices in the 1990s and contributing to the market crash.

Fiat -- Sharefin, 23:38:16 07/18/02 Thu

U.S. working group has not met to discuss markets

The U.S. government has not convened its top-level working group on the financial markets to discuss the slide in U.S. stocks and does not try to manage the market's daily moves, the White House said on Tuesday.

"They have not met with particular reference to stock market activity because we don't try to manage stock markets' daily movements," White House spokesman Ari Fleischer said of the President's Working Group on Financial Markets.

The group, which includes representatives from the U.S. Treasury, the Securities and Exchange Commission, the Federal Reserve Board and the Commodity Futures Trading Commission, was created after the 1987 stock market crash to promote close cooperation among key agencies at times of market volatility.

There were rumors in European markets on Tuesday that the group might have met to discuss the U.S. stocks slide.

The group typically meets when the markets are disorderly and there are concerns they may cease to function properly, but it can also meet in calmer times to address complex issues facing the financial markets.

The group issued a statement after the Sept. 11 attacks and it was particularly active during the Asian financial crisis.

The Bush administration's decision not to convene the group, unofficially nicknamed the Plunge Protection Committee, may reflect a view that the recent declines in the stock market to its lowest levels since 1997 are not of that order.

----
Anyone want to buy a bridge?

Fiat -- Sharefin, 23:32:39 07/18/02 Thu

The Cycles of Financial Scandal

America is at a turning point. Corporate scandals, the fall of the stock markets, the sudden mobilizations in Washington of the last few weeks to legislate against some of the more egregious corporate abuses: they all indicate that the nation's attitude toward business is changing. It is potentially a bigger change than many politicians realize. What's unnerving them is that the payback from the market bubble of the late 1990's is becoming apparent to Main Street. The charts of the downside since March 2000 are starting to match the slope of the earlier three-year upside.

Not that it's a new phenomenon. In the Gilded Age of the late 19th century and again in the Roaring Twenties, wealth momentum surged, the rich pulled away from everyone else and financial and technological innovation built a boom. Then it went partially or largely bust in the securities markets. Digging out is never easy. But this time, the deep-rooted nature of "financialization" in the United States that developed in the 1980's and 90's may make it even tougher.

Near the peak of the great booms, old economic cautions are dismissed, financial and managerial operators sidestep increasingly inadequate regulations and ethics surrender to greed. Then, after the collapse, the dirty linen falls out of the closet. Public muttering usually swells into a powerful chorus for reform - deep, systemic changes designed to catch up with a whole new range and capacity for frauds and finagles and bring them under regulatory control.

Even so, correction is difficult, in part because the big wealth momentum booms leave behind a triple corruption: financial, political and philosophic. Besides the swindles and frauds that crest with the great speculative booms, historians have noted a parallel tendency: cash moving into politics also rises with market fevers.

Gold -- Sharefin, 23:29:35 07/18/02 Thu

Japanese housewife guide to investment

Earlier this year Japanese and U.S. television stations carried pictures of Japanese housewives queuing up to buy kilo bars of gold, costing around $10,000 at the time. Their action and subsequently that of investors around the world have resulted in a 15 percent increase in the price of gold since the beginning of the year. February saw a 700 percent surge in Japanese gold imports. Gold sales surged in other markets, too.
Japanese housewives are canny investors. So what is going on, what can they see that millions of us don't -- even after the value of our stock market investments fell more than the price of gold rose over the same period?

Like the rest of us, Japanese housewives have become disillusioned with stock markets around the world. Big savers, worried about the way the Japanese economy is going, the inability of Japanese politicians to do anything about it and the reduction of deposit insurance on bank accounts, they are moving out of the stock market and into gold.

Stock market scandals in the United States, the collapse of the dot-com boom, 9-11, U.S. President George W. Bush's threatening speeches and the Mideast crisis have put investors off the U.S. and other stock markets.

Investors are also worried about falling returns on U.S. Treasury Bills and U.S. bonds, other traditional investment vehicles for Asian investors, as they fear the continuing collapse of the dollar; pulling out of U.S. investment paper makes this a self-fulfilling prophecy.

Investors everywhere are turning to other assets. House prices and prices achieved in auctions for fine art and collectable wine, for example, are moving up in many financial centers. Anything but paper investments is the order of the day. Gold is one winner.

Individual investors have to be really worried about the securities markets and banks before they'll start buying gold either for investment or as an attempt to protect the value of their savings. Gold holdings draw no interest, and there are costs involved in storing it and/or insuring it. So the ordinary people who are currently buying gold in China are saying something about their confidence in the Chinese economy.

Is this vote of no confidence in the Chinese economy worrying people in the government to the extent that gold-market restrictions may be reintroduced?

Reintroducing restrictions on the gold market will not solve the underlying problems that make ordinary people seek escape from stocks and other paper investments. In the last major financial crisis (1989-1990), the people of China stripped shops of everything in their desire to put their savings into something they thought would protect value, causing considerable disruption to the real economy and the financial system.

Gold's availability for investment protects the real economy, although it does nothing to help the financial system and capital markets. Those clever enough to regard gold as a store of value are a small part of the total savings market. The financial system and capital markets must be reformed so that it makes more sense to maintain savings rather than keep gold in a safe. The availability of gold as a safety-valve investment will let those reforms take place on a more orderly basis.

Gold will always be a part of any reasonable investment portfolio. It has after all been a better investment than every major currency since World War II, as Japanese housewives know.

Gold -- Sharefin, 23:21:09 07/18/02 Thu

Barton Biggs goes bullish on gold - pdf file

Gold -- Sharefin, 22:49:09 07/18/02 Thu

Gold is more Summer than swallow - Kebble

There will be a doubling of production from the current 380,000-odd ounces a year to nearly 800,000 ounces a year, all coming primarily from a single shaft, and it will be producing gold at around $125 an ounce. So it will be one of the world's lowest-cost producers.

Production costs this quarter, which were a little bit higher than we would have liked, were about $190 an ounce. So there's going to be a big drop.

In fact, what we've done is that the money which we raised as Part 1 of the derivative transaction - we had a decision whether to go and complete the hedge, which would have given us the cash to pay a large cash dividend to shareholders. Instead, what we decided to do was to use the cash to close out the old hedge book. The $58m you're talking about is the cost of closing Western Areas' old hedge book, which was a direct overhang from the 1996 financing. The market may remember that Western Areas hedged, at that point in time, 8m ounces to pay for the costs of sinking the shaft and developing it to the point where it is today. So, rather than having a company which would have in essence been about 75% hedged over the next period of time, albeit on the basis that we pay out R10 cash plus what shareholders are receiving today, we decided that the R10 that they would have received was already in the share price, inasmuch as we had started to discuss these proposals when the Western Areas share price was 22. So R22, taking R15 out in value, in the moribund equity environment, seemed like a really good idea. Obviously, we wanted to see whether this gold market was a swallow or a summer, and I think we've determined that it's more likely to be a summer than a swallow, which means that we should be looking to improve the equity prospects of the company. Gold equity investors are more interested in companies which have smaller rather than larger hedges - and so we took the view that, rather than paying out a large dividend to shareholders, rather see an improvement in the equity price and distribute Western Areas shares back to the minorities. So, in fact, the cost of this thing has been in applying the first part of the transaction at a time when gold was about $285 an ounce and dealing with an old hedge book, at around $300. So it's not a train smash by any stretch of the imagination. It really puts the company on a sound footing.

If Western Areas was 75% hedged before this transaction, what is it now?

Around 40%.

I think we are going to have to look at the transcript that you've got - a Nasdaq listing, lower hedge book, clean up of the structure, new plant coming into production in 2003.

And 72 years of production, hello.

Gold -- Sharefin, 22:37:37 07/18/02 Thu

Gold's secular run in early stage - HSCB Report - pdf file

Linked from Mining Web

Gold -- Sharefin, 22:36:20 07/18/02 Thu

Central banks have lost incentive to sell gold forward

I think why I took the long-term view is that, if you don't take a long-term view, you get caught in the noise of the day-to-day volatility in the gold stocks. And I thought to myself, the key to any good call on a commodity company is to actually say what's happening in the underlying commodity. And if you look at some of the key drivers of the gold market, and there have been some changes in the last couple of months and in the last year, it's possible to argue a change. For example, the demand-supply fundamentals in gold have been in a deficit, where demand has exceeded supply. For the last few years, that's been in place and you would argue, well, why hasn't' the gold price gone higher, and the reason for that is that the central banks have been selling their gold into the market, and depressing it. Why has that been happening? Mainly it's been happening because of a thing called "contango" where, if you sell gold and take the proceeds that you receive from the sale and put it on a call account and earn interest, there's a positive yield effect - that you earn the interest on the gold you sold, and you benefit from the fact that you paid a very small lease rate to borrow that gold that you sold. Now that interest rates have come down, which is something that has happened in the last year, this contango has collapsed. So basically central banks and gold producers don't have the incentive to sell gold forward.

Gold's secular run in early stage - HSCB Report

Gold -- Sharefin, 22:31:01 07/18/02 Thu

Morgan Stanley "name" backs gold

More famous for punting Japan and other exotics, Morgan Stanley global strategist Barton Biggs is lately a gold bull, and a convincting one.

In a report circulated on Wednesday, Biggs wrote: "…I have never believed in gold, for all the conventional reasons, but now I am changing what's left of my mind. I think there is a plausible case that a professionally managed portfolio consisting of the metal itself and gold shares could realize returns of 15% real per annum in the difficult environment ahead."

A Sun Valley research report written by Palmedo concludes that it is not the dollar that predicts the gold price, but the stock market. "Since 1988 the price of gold has had a negative 0.85 coefficient of correlation with the S&P 500 and an R squared of 72%. As things got crazier since 1994, the negative correlation rose to 0.94, with an R squared of 88%."

Gold's advantage in the current circumstances is that such a tiny proportion of metal is available to the investment market. "Only 18% of the gold mined throughout history is held in investment form, or slightly more than $200 billion. The investable capital markets of the world are estimated to be about $60 trillion. In a low-return cycle for stocks and bonds, monetary and investment demand for gold turns positive, and there is a dramatic shortage of available metal," Biggs writes.

"This large differential can only be solved by much higher prices. The point is that it is not inflation or deflation that is the principal driver of gold, but the return from other long-term financial assets, particularly equities."

Sun Valley's modelling suggests that when capital markets offer a 10% return, gold will slump by 8%, but when capital markets are at par, gold should return 17%. The firm believes the "long-term equilibrium or inflation-adjusted price of gold in today's dollars is about $500/oz, as compared to the current price in the low $300s."

Biggs recommends large funds should have 5% invested in "professionally managed gold"

Gold -- Sharefin, 22:26:16 07/18/02 Thu

Aurion Gold rubs it in

AurionGold seized on the opportunity to bring forward the release of its June quarter production results to deliver further positive news that continued to put a dent in the perceived value of the current Placer Dome takeover bid.

Gold -- Sharefin, 22:24:26 07/18/02 Thu

Gold's upside potential $100 to $200/oz - HSBC

Global investment bank HSBC has published a report on the gold market in which commodities analyst Alan Williamson predicts the bullion price will peak at $350/oz in the final quarter of this year. The bank's London-based commodity research team also says the gold could "potentially…be looking at the most bullish scenario in twenty years", with a potential upside of between $100/oz and $200/oz.

The bullish outlook will be published in HSBC's Senior Gold Book which is to be released later this week and is based on the bank's own currency, general equity and macroeconomic forecasts. It comes as the bank increased its average gold price projection for the year to $313/oz, up from its previous forecast of $305/oz. It expects gold to average $325/oz next year. Williamson says gold's peak will coincide with a "final trough in global equity prices" at the end of the year.

"Into next year prices are likely to be volatile as the positive impact of a weakening dollar and ongoing improvements in supply and demand are at odds with the negative effects of a stock market recovery. Over the longer term, however, the risk to prices remains firmly on the upside," said Williamson.

Interestingly though, HSBC says this upside potential for bullion could be as much as $100/oz to $200/oz if gold benefits from the confluence of a bearish equity market, rising investment demand for bullion and an assertion of bullish supply-demand fundamentals.

"Potentially the gold market could be looking at the most bullish scenario in twenty years. If a more bearish macroeconomic scenario than HSBC expects does eventuate and new supplies deteriorate and investment demand continues to increase, there remains considerable upside to gold prices. With all these planets in alignment the pull on gold would be irresistible. Gold prices USD100-200/oz higher than currently could materialise," said HSBC.

Gold -- Sharefin, 22:21:39 07/18/02 Thu

W. Areas in dramatic gold turnaround

Western Areas made an about face on its restructuring today (18 July) declaring it would not pay out a long awaited cash dividend buy would instead issue shareholders with a cocktail of scrip in major shareholder JCI. This comes amid fears that the company's management may have damaged shareholder exposure to the world's largest gold ore body and possibly the last major new gold mine that South Africa's famed Witwatersrand Basin is ever likely to produce.

The conclusion of what has been one of the longest running revamps in South African corporate history came without the cash dividend which was widely expected to be paid to Western Areas shareholders, who have instead been offered a once-off scrip payout in JCI shares and debentures. Western Areas management have also completed an astounding about-face in their view of the gold market; a change of heart which carries a price tag of around $58 million in hedge restructuring costs.

Western Areas chief executive Brett Kebble said the group had changed its strategy in the face of a weak dollar and a more bullish outlook for gold. He said instead of paying out the dividend to shareholders, the group had decided to spend $58 million on buying back 1.5 million ounces of its old hedge position.

Questions still remain, however, over Kebble's decision only six months ago to take out a new hedge - which is now R850 million in the red - to fund the buyback of an existing hedge. Although it is understood that the original intent behind entering the derivative position was to payout the special dividend, the fact remains that shareholders are now left with a handful of thinly traded stock and debentures in JCI, a resource finance company.

Western Areas on the other hand is saddled with something of a toxic hedge position with runs until 2014. Kebble says Western Areas will not take out any more hedge positions under the current market conditions and will be opportunistic in eating away at the 1.89 million ounce book. The company must also now carry what amounts to a $240 million debt commitment, which management says is the total cost over twelve years of the $103 million loan.

Gold -- Sharefin, 22:03:47 07/18/02 Thu

Blatant U.S. Hypocrisy and South Africa

Manipulation of the international price of Gold

Historically, gold acts as a barometer for financial markets. Since 1995 the gold barometer has been tampered with so its usefulness as a warning beacon has been greatly dimmed. The price of gold and the dollar have an inverse relationship so that when the dollar is strong, the price of gold is usually weak. During the great Wall Street bull market of the 1990’s it was an absolute necessity for the dollar to be strong in order to attract and keep huge amounts of foreign capital each month. If the enormous transfers of foreign capital into the U.S. dried up, the dollar would weaken and if the price of gold was to rise, this would be a warning sign to investors to pull out of U.S. financial markets. The hidden agenda of the U.S. Treasury and Federal Reserve has been to keep gold within a tight trading range.

GATA & Gold -- Sharefin, 22:01:53 07/18/02 Thu

Economic Factors or "International Conspiracy" Behind the Depressed Price of Gold - pdf file in Arabic

GATA has achieved a MAJOR press coup. The following
appears today in what may be the most prestigious Arab
paper in the world. In the West, it would be like being
featured in the New York Times. Of course, our Washington/
New York so-called FREE PRESS will not even mention that
GATA even exists. We are talking about 43 months worth of
U.S. press censorship.

Because this is hot off the London press this morning, GATA
wants to get this out NOW, so that the GATA ARMY in London
can pick up copies.

An English translation will follow at the Cafe.

My humble opinion is this: Once the sophisticated Arab world
realizes what GATA has uncovered, they will buy physical gold
with increasing fervor. They will now know what Barton Biggs
of Morgan Stanley knows!

Here is what Walid Ayyash, GATA's contact, has to say about
the story:

Alhayat-London

Economic Factors or "International Conspiracy" Behind the Depressed Price of Gold"

Under this provocative title, Alhayat, the leading
conservative Arabic newspaper published an interview with
GATA's Chairman, Bill Murphy, in its Issues section that
appears in its international addition of July 19, 2002.
The interview touches on a wide range of topics revolving
around Gold, geopolitics, and GATA's views on the
international conspiracy to keep the price of gold
suppressed.

The interview, which appears here below in English (not
yet available), is certain to create waves in the Arab
Middle East, given the influence of Alhayat, which is
Saudi owned among decision makers in that part of the
World.

The interview is preceded by a brief summary about a
storm that was caused by John Embry, a senior analyst
for the Royal Bank in Canada, in which he supported GATA's
views on the conspiracy to keep the price of Gold down,
the ensuing disavowal by the Royal Bank, and Bill's
response indicating that the report was indeed published
on the RB letterhead and distributed to it's major
clients. The interview takes approximately half a page.

Our future -- wlavio, 22:40:41 07/17/02 Wed

Our future

There is a surprising financial-political and stock exchange bubble created and sooner or later it will burst. Through the means of scandals-illusions, the USA is training the public and investors to lose their financial assets invested into shares of the companies and stock exchanges first periodically and then finally, for the major part.

The scheme is simple, it was developed 16 years ago, and started to work 13 years ago. Asians invented it, but the worldwide spread was not a complete success - we will see who gets lucky and how. There are “bubble” firms created from the budgetary funds, which were taken on a short time (which came back into the budget in time, and then again into the markets) and advertising of their activity is created. Shares are released and through governmental and some social share funds buy for increase of the importance of these firms and ostensibly their activity. And further, more interesting air - these shares of pseudo - issue which participate only in exchange reports, but except the game of air (the federal budget, exchanges, social funds and some banks) they are nowhere legally and officially taken into account. The investors, not knowing about the air, bought them up, that is - they were sold to them, what created free money for different purposes and use, and real dividends. Also the games on exchanges for themselves- risk free game, everything is in their hands, and the income is growing like a snowball, and economic crisises do not matter much at the moment. With these means it is possible to create under the same circuit new companies with new means. The main thing is that this game has a scheme, regulating the air - it is impossible to inflate something with no limits, because in the end, it will not cost and weigh nothing. Therefore it is necessary to remove foam from the big soap bubbles before everything hasn’t turn to dust, and keep the system disorganized.
Breaking the small-sized bubbles is useless, as they won't rescue the system. Then the US started with giants, what nearly cost Bush his portfolio, and maybe even life. These are only trial steps of regulating system and desire to keep it only in their own hands as it was distributed chaotically on all markets of the world. Some companies have are tens times more of “air shares” than official amounts.
To return it all in their hands they will start the pseudo-control of all firms - air, playing on exchanges and participating in running games. It will result big losses and tragedies all simple investors, as the others are already in a prize. The most important for them is to clean up potential competitors, which are already for a long time in a prize as well.
How will the financial scandals in USA come to an end? They will not even bypass the countries of Asia. The system would work farther, if the parties and interests would not change. But it is not one kind of air, offered to investors and ostensibly ignorant funds, the saddest thing is, that everybody knows about it. Especially, who approves funds and their rights.
The first scandals will begin after the beginning of checking the double bookkeeping records following the standard cost of shares of 3 companies, which they used several times. That makes: a) they sold officially not fixed shares to small investors; b) they let in the game the shares, which were not designated, existing in the game only during current day for increasing the volume. They manipulate and play on all world exchanges and create their own game without investing any means or shares, and attempt to change games to their own advantage. They also take out means from games and raise the rates artificially, to get rid of them fast. It also caused the falling of the basic indices and gave an advantage to earn more for the future.
Who knows about further development of scandals? And what will focus blind, and hereinafter naked investors their eyes on? To what will the basic investments be transferred and on where have they started to move already? How to beware oneself from false shares?
That is the main question now!
Will it be possible to reduce the air, and who will slip away?

Wlavio
wlavio@strana.de
aewinvest@strana.de

Fiat -- Sharefin, 09:21:59 07/17/02 Wed

Vindication, Complication

Gold -- Sharefin, 00:24:45 07/17/02 Wed

Gold rush history retold in weighty book by collector

Caught in a vicious hurricane in 1857, the steamship Central America went to the bottom of the Atlantic Ocean with more than 400 people and a vast treasure of California gold.

More than a century later, the depths surrendered the gold, more than $100 million of it. It was the end of a long mystery involving the worst peacetime disaster at sea in American history, but the beginning of the story for historian and coin scholar Q. David Bowers.

He's written a weighty book containing an abundance of information about the discovery of gold; how it transformed California and the country; and how the Central America was lost, then found, rekindling a second gold rush of sorts that continues today.

Gold -- Sharefin, 00:18:18 07/17/02 Wed

Placer tipped to lift offer by 20%

Placer Dome might be trying to stare down its takeover target AurionGold, but in current market conditions the world's fifth largest gold company could be staring down the barrel of defeat if it didn't increase its offer by at least 20 per cent.

Gold -- Sharefin, 00:16:04 07/17/02 Wed

Gold Fields positions for share issue

Contrary to recent reports, Gold Fields has not yet pressed the button issuing shares worth an estimated $400 million. But it's likely shares will be offered and here's why.

Gold -- Sharefin, 00:14:08 07/17/02 Wed

Gold insiders reveal all

Extracts are from the record of proceedings at the Future of Gold Roundtable

Fiat -- Sharefin, 00:07:13 07/17/02 Wed

FOREIGN INVESTORS MAY BE SAYING ADIOS TO U.S. MARTS

NOW for the really bad news: If the stock market continues to misbehave, it could lead to big difficulties for the already-fragile U.S. economy.

You already know the obvious way this happens. If the stock market goes down, people can't spend as much money on the nice things in life. So all businesses, except maybe the bread-and-butter industries, suffer.

But there could be a more worrisome, back-door effect on the economy. It goes like this:

The problems on Wall Street could cause foreign investors to pull their money out of the U.S.

Foreigners aren't heavily invested in U.S. stocks, but they have substantial holdings in U.S. Treasury bonds.

In fact, America couldn't have run those massive deficits for so many years if foreigners hadn't been willing to loan us money by buying our government's bonds.

Fear of the stock market's performance and potential weakness in our economy could cause foreigners to repatriate their money. If that happens, then interest rates in the U.S. will rise even though the Federal Reserve wants them to stay down.

The Fed controls only short-term rates. In fact, the rate edicts that come out of the Fed's Open Market Committee meetings may allow banks to lend money more cheaply, but they have very little impact on long-term interest rates.

These long-term rates are mainly set by the financial markets. And if foreigners no longer want U.S. bonds, overall demand will decline and rates will rise.

While it's generally accepted that the Fed will not volunteer to raise rates this year, pressure like this from the financial markets could force it to do so. That'll be about the last straw for an economic recovery that's already limping along and that has depended so much on low borrowing costs.

Fiat -- Sharefin, 23:56:21 07/16/02 Tue

US Treasury questions Wall Street's values

The United States Treasury has pledged not to seek policies to support Wall Street, with a top official suggesting the stockmarkets may have much further to fall.

With US sharemarkets suffering their third consecutive year of losses and the Bush Administration under pressure to arrest the crisis of confidence, Deputy Secretary of the Treasury Ken Dam told The Australian Financial Review: "I think that the most important thing in government policy is to be steady, prudent, and show that we're focusing on fundamentals, rather than trying to manipulate markets.'' He added that while the news of corporate misdeeds had damaged stock prices, there was another key factor at work: "I think that there is still this question of valuation. The historical valuation for S&P-type stocks is about 14 times earnings, and we still are apparently a lot higher than that."

This implies US stock prices could still fall much further. The current ratio of stock prices to earnings - a standard yardstick called a price-earnings ratio - of the companies in the Standard & Poor's 500 Index is about 30 times.

To reach Mr Dam's historical benchmark, US stock prices would have to fall by half from current levels.

Told of Mr Dam's remarks, Brian Wesbury, chief economist at the Chicago investment house Griffin, Kubik, Stephens, and Thompson Inc, said: "Wow, that's a major quote.

"It says he thinks the market's significantly overvalued. But to hear them talk as if it's a bubble still, and we just have to wait for it to come back to normal, is kind of frustrating.

"That tells us they have no policy in mind to help the market."

Fiat -- Sharefin, 23:45:35 07/16/02 Tue

Full Disclosure - not B&W - Green

Fiat -- Sharefin, 23:36:20 07/16/02 Tue

Market's late rebound may revive manipulation rumors

Yesterday's late-hour market snapback is certain to rekindle rumors that the major stock market indexes are manipulated at crucial times - possibly with the Treasury or Federal Reserve as a conspirator.

Whether those rumors are true or not - and I believe they probably are - there is no question that yesterday's late recovery did not involve small investors: It was an institutional phenomenon.

The reason that questions will be asked is that market breadth was much worse than the performance of the indexes. For example, on the New York Stock Exchange, losers topped gainers 3 to 1, although the Dow Jones industrial average was down only 0.5 percent and the Standard & Poor's 500 down only 0.4 percent.

The Dow was down 440 at one point; a steep ascent in the last hour and a half trimmed the loss to 45.34.

It was somewhat reminiscent of Oct. 20, 1987, the day after the huge market crash, when stocks were plunging a second day, but suddenly recovered and closed up 100. But losers topped gainers 3 to 1.

It was widely assumed at that time that index futures were manipulated, perhaps with the connivance of the Fed. It worked. Markets recovered.

Fiat -- Sharefin, 23:34:28 07/16/02 Tue

Economist predicts Japan's government debt will implode

The burgeoning Japanese government debt will eventually collapse - one more consequence of persistent deflation.

That's the view of John H. Makin, economist for the American Enterprise Institute in Washington, D.C.

Fears about Japan's dilemma are pervasive: Japan's bout with deflation has caused 13 staff economists of the U.S. Federal Reserve to do a study warning that a central bank should go that extra mile to avoid chronically falling prices.

Because of Japan's corrosive deflation, non-performing loans at banks and insurance companies are increasing more rapidly than the loans can be written off, says Makin. So the Bank of Japan prints more money, while the government issues more debt to pay its bills.

Japan's government debt will implode in one of two ways, says Makin: First, if the central bank creates enough liquidity to bring reflation, interest rates will rise and price of government debt securities will plunge. Alternatively, if the deflation isn't reversed and the government continues to issue more debt, "the outstanding stock of debt will rise too rapidly to be absorbed by Japanese investors," says Makin.

Japanese government debt is mainly held by its citizens. But since government debt is 140 percent of economic output, the consequences could be scary, says Makin.

Fiat -- Sharefin, 06:08:52 07/16/02 Tue

US Treasuries rise early as fear reigns on Wall St

U.S. Treasuries rose in early trade on Tuesday as market rumors of credit problems at a major U.S. bank hit fragile investor confidence on Wall Street, prompting investors to switch from stocks to relatively safe government bonds.

U.S. stock futures tumbled on the market talk of liquidity troubles at JP Morgan, pointing to losses at the opening bell. A JP Morgan spokeswoman in London said the bank did not comment on market rumors.

-------
JP Morgan Chase fell as traders were unnerved by a spate of rumors ahead of the bank's quarterly results due on Wednesday. Its shares slipped to $28.50 in pre-open trade from $30.08 at Monday's close.

Gold -- Sharefin, 05:37:21 07/16/02 Tue

Australian Gold Sector to Invest US$4.24 BLN in 2002/03: Survey

Australia's gold mining industry will spend more than $A7.6 billion ($US4.24 billion) in capital works, new exploration and production activities in 2002/03, almost $A1 billion ($US557.5 million) more than last year.

Gold -- Sharefin, 05:27:50 07/16/02 Tue

Banks are Ready for the Openness of Gold Market

On 8 July, 2002, Hu Chunjiang, thesenior researcher of Bank of China Guangdong Branch pointed outthat all the preparation for banks to act as agents for theinvestors to purchase or sell gold is ready, and the business willopen before the end of this year.

According to the analysis, because of the weak USD, from thisMonday, the investment value on gold presented abruptly.

Hu Chunjiang said that currently, People's Bank of China hasalready approved Industrial and Commercial Bank of China,Agriculture Bank of China, Bank of China and China ConstructionBank to open the individual gold deal business. Bank of China hasdone all the preparation, namely the liquidation system, and thesystem for purchase and sale of resident individual were developedsuccessfully, the training of relating staffs was finished, as longas the Shanghai Gold Exchange opened, the investors couldimmediately realize gold transaction.

Hu Chunjiang also introduced that the form for individualinvestor to invest on gold will be same with the form of foreignexchange, the investors can determine to purchase or sell accordingto the quote price of the banks.

After the openness of Shanghai Gold Exchange, the banks willlaunch two types of gold investment products, one is gold bankbook,which reflects the gold deal according to the capital transfer inthe gold account, the other is the small block of gold, namely realgold transaction. All the resident who possessed current depositsaving account of Bank of China can apply for the gold investmentbusiness.

Gold -- Sharefin, 05:25:58 07/16/02 Tue

Gold prices climb as stock markets tumble

Gold prices climbed on Monday as the dollar lost ground and speculative funds thronged to the precious metal to shield themselves from steep losses in global stock markets.

"The risks of another sell-off in gold are limited as long as equity and US dollar weakness remain a feature of the broader market," said Howard Patten, metals analyst at Barclays Capital.

Lenny's Corner -- Sharefin, 05:06:24 07/16/02 Tue

GENERAL COMMENTS:

The crisis of confidence in US corporate governance continues to deepen and worsen as each day brings forth another corporate fraud and scandal. Analysts from Wall Street, independent auditing firms, and corporate executives are now seen as conspirators in a scheme which has quickly decimated investor's portfolios. The change in investment psychology is accelerating, as investors are slowly beginning to realize that action needs to be taken, that their denial of the severity of their losses is now becoming reality. These shifts in public sentiment take a lot longer than one would at first imagine. But the trend is clear.

One forgotten feature of gold is that it is the only asset that is not someone else's liability. As promises are being broken in the financial markets, as expectations of riches are being dashed, investors will inevitably seek an asset that will not break their hearts. Yes, they are willing to accept losses, but they will hunt for an asset that will not lie to them, that doesn't suddenly make announcements of corporate malfeasance.

Proof that we are seeing a shift in investor psychology is, as one might expect, first showing up in the real estate market in the United States. As "paper" assets become less desirable, the very first "hard" asset that comes to the mind of an investor is real estate. Housing prices continue to rise in the United States, and median down payments for repeat home buyers have risen to 25% from 19% in 1999, a clear demonstration that investors are beginning to place more assets into this investment venue. The acquisition of precious metals will take a bit more time, but as we move into the future, the number of investors should rise.

On the economic front, on Friday, the Bush administration said that it expected the federal government to post a deficit of $165 Billion USD this year, due to the steepest decline in tax receipts since 1955. Now, add in the profligate creation of money by the Federal Reserve Board, add in continuing deterioration in equity values with the stock market now in the throes of its third year of sharp declines, add in the lowest USD interest rates in 40 years and the lowest interest rates among the G7, and one could not possibly expect the USD to garner any strength in the coming months and years. As the USD declines, one would naturally expect the precious metals would rise. Yet, another reason that I believe that gold is in a multi-year bull market.

Giovanni -- Sharefin, 05:01:22 07/16/02 Tue

Have a gander at this deceit.

Uncle Sam shown to be king of bad bookkeeping
Lost in all the outrage over the corporate accounting
scandals is one fact politicians do not like to acknowledge: The auditing problems at American companies cannot rival the bookkeeping
disarray of the world's largest enterprise -- the U.S. government.

Exaggerated earnings, disguised liabilities, off-budget shenanigans -- they are all there in the government's ledgers on a scale even the biggest companies could not dream of matching.

------
Implicit Obligations Bloat Public Debt Ten Fold
What the government owes is ten times larger than official federal debt, according to a new study produced by the National Center for Policy Analysis (NCPA) based on research conducted at the Private Enterprise Research Center (PERC) at Texas A&M University. The reason is a huge unfunded liability in the Social Security and Medicare programs.

"Anyone who has at worked for at least ten years has already earned minimum Social Security benefits and full Medicare benefits, even though the person may not collect those benefits for many years," said Andrew Rettenmaier, one of the study's authors. "The problem is, no funds have been set aside to pay what has been promised." According to the study, implicit liabilities dwarf the official public debt.

As of 2001, the cost of accumulated entitlement obligations owed is $12.9 trillion for Social Security and $16.9 trillion for Medicare.
When combined with publicly held debt in 2001, the total burden equals $33.1 trillion, or more than 10 times the official debt measure-and 3 times the size of the nation's output.

------
Governments Engage in Financial Trickery
All the attention being paid to private sector balance sheet manipulations is focusing similar attention on the efforts of governments around the world to hide public debt.

-------
Social Security and Market Risk

How Secure is the Stock Market? With revelations about WorldCom and Enron dominating the headlines and the Dow's dive last week, it is no wonder that some are worried about saving retirement money in the stock market.

Market Manipulations -- Giovanni Dioro, 04:11:40 07/16/02 Tue

Manipulation in the Silver Markets

George Bush is a liar. He is not serious about cleaning up the markets or he would clean up his own house first. If you want to find bogus accounting, look no further than the bogus CPI numbers which is so subjective with a downward bias it ain't even funny. This tends to do several things. It keeps wage demands down. It lowers the amount the govt has to pay on its inflation-indexed debt. It overstates GDP because it is under-adjusted for inflation.

For example, a VCR goes from a 2-week to a 4-week pre-record, so they say the VCR became cheaper even if it rose in price just because it improved in performance.

How about the rise in the price of steak? Well, the govt statisticians will just throw out steak in the index and put in pork because when people can't afford steak due to inflation they will be forced to eat pork.

Remember when the price of oil tripled a couple of years ago. Well that was just a temporary thing; prices would go back to $12 eventually, so they claimed. Moreover people would carpool and ride bicycles so in fact the price of transportation actually went down, so it seems.

So the charade of see no inflation, hear no inflation continues. But to keep the illusion they have to keep commodity prices relatively low so that it doesn't force all commodities to rise and cause people to lose faith in paper currencies and tend to hoard commodities.

Look at what happened to silver on June 5 of this year. Silver had just broken out of an upward channel. This was very bullish - things were going exponential and silver was heading towards $6 per ounce. So in the evening when the futures markets were very thinly traded, huge sell orders came in which gob smacked both gold and silver.

Obviously if they had wanted to get a good price they would have sold in smaller amounts in more liquid markets. Either these people were stupid and didn't know what they were doing (I doubt that) or they intentionally sold heavily into illiquid markets so as to manipulate the prices lower. Isn't this illegal? Was there any investigation into who did this?

Who stands to gain by seeing gold and silver prices stop their runaway spiral?

First and foremost it is likely the people (banks) who write call options on the metals. They were looking at massive losses if the price of gold and silver continued to rise.

You can see in the chart linked below how silver was forced back into its channel on June 5.

Silver channel manipulation

Email Chatter -- Sharefin, 19:31:24 07/15/02 Mon

Conference on the Future of Gold - PDF File

CPM Group organized a one-day round-table discussion, The Future of Gold, for the International Precious Metals Institute, in June 2002 in Miami.

The debate was extremely interesting, with participants from major gold producers, major jewelry companies, bullion dealing banks, and others providing a range of opinions and insights into the state of the gold market, and the possible future course of this market.

The proceedings of the Future of Gold conference is available at the websites of both CPM Group and the IPMI.

This document is available to everyone, and the IPMI and CPM Group are encouraging people to distribute it, to post it on their websites, and to generally help spread the proceedings to all interested parties.

ChartsRus -- Sharefin, 10:27:39 07/15/02 Mon

Charts Online

Gold -- Sharefin, 10:23:20 07/15/02 Mon

Forget technology -- gold is the future, says top money manager

Investors still haven't fully embraced gold stocks or come to believe in a rally in the price of the precious metal because they remain convinced technology stocks are set to rebound, says a leading U.S. money manager.

Frank Holmes, chief executive of U.S. Global Investors Inc. -- manager of two of the top gold sector mutual funds in the United States -- said all the pertinent indicators, including a fall in the U.S. dollar and cuts in exploration, point to higher gold prices in the months and years ahead.

Gold -- Sharefin, 10:19:11 07/15/02 Mon

End of hedging's golden age?

No longer the flavour of the month - but by no means gone for ever - gold hedging seems to have completed a full circle, and will now only be used under specialised project-specific circumstances.

"Although the hedging era, which has been a significant feature of the gold-mining environment over the past 15 years, has come to an end, the concept will still be used in a far more austere way in certain circumstances, where it is economically viable, but not in the 'exotic' transactions of the past," hedging expert and Virtual Metals CEO Jessica Cross tells Mining Weekly.

Fiat -- Sharefin, 10:11:56 07/15/02 Mon

Asymmetrical Risks - Stephen Roach

Virtuous and vicious circles both have one thing in common -- a tendency toward asymmetric risks. During the late 1990s, the risks were skewed decidedly toward the bullish side, as financial markets rose to ever-higher highs. In a post-bubble climate, that movie now runs in reverse. The perils of deflation are key in shaping the asymmetrical risks of consumers, policy makers, and the body politic. To the extent we treat this latest sell-off in financial markets as yet another dip-buying opportunity out of the script of the 1990s, we’re missing the basic point. In a post-bubble climate, there’s a very different set of risks to contend with. In my view, the old rules just don’t work any more.

Fiat -- Sharefin, 10:01:00 07/15/02 Mon

Is a "Triple-Digit Dow" Inescapable?

The biggest grizzly in the market today may be Bob Prechter. His latest book, Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (John Wiley & Sons, $27.95), is riding atop Amazon.com's list of best-selling business and investment titles. It describes a truly horrible future for financial markets and society.

Anyone who doesn't recognize Prechter's name should know that through most of the 1980s, he reigned as one of the few market analysts with the power to move markets with the prescient calls he made in his newsletter, The Elliott Wave Theorist. So-called Elliott waves were developed during the Great Depression by an accountant named R.N. Elliott. They plot markets and the emotional undercurrents that, according to Elliott, drive them.

Q: So you see a crash as imminent -- is that the right word?
A: I think we're in one now, but we're in the very early stages. The same thing is true of a depression. People say, well, we're not in a depression, and there are no bread lines and all that. But those are symptoms of the end. And the time to understand what's coming is closer to the beginning, and that's where I think we are.

Q: Do I understand your whole scheme correctly as a deterministic one? That there's no way out -- we have the cycles, the waves, and the waves are going to come regardless. We may not know the extent of the waves ahead of time, but they're going to come, and there's not much that anyone can do -- you've just got to stay out of the way of the waves.
A: That's right. The social aspect of waves is unquestionably deterministic. The important thing, though, is that individual behavior is not deterministic. You can use your rational faculty to investigate this phenomenon, realize that you're dealing with social cycles of human behavior, and, A) get out of the way if you're fighting a trend, and, B) use those trends to your advantage.

Periodic Ponzi Update PPU -- $hifty, 22:44:08 07/14/02 Sun

http://home.columbus.rr.com/rossl/gold.htm

Periodic Ponzi Update PPU

Nasdaq 1,373.50 + Dow 8684.53 = 10,058.03 divide by 2 = 5,029.01 Ponzi

Down -324.22 from last week!

Looks to me like the Ponzi is catching up to the trend set before September 11 and subsequent market rigging.

Thanks RossL for the link!

Go GATA
Go Gold

$hifty

Gold -- Sharefin, 16:25:23 07/14/02 Sun

Gold can flame out

Gold -- Sharefin, 03:36:04 07/14/02 Sun

Rush to Gold

"Gold is essentially the refuge of last resort now," said Joe Duarte, a Dallas fund manager and author of Successful Energy Sector Investing. "The negative of that is that market history shows that a frantic rise in gold stocks precedes a major decline in the stock market."

Gold stocks are "extremely speculative," Duarte said, "so when people rush to gold it's for one of two reasons: They are truly scared, or they think things are so good they'll invest in gold because it's the last dog to rally. My indicators are telling me that people are getting very scared."

Local gold expert Douglas Silver, president of Denver Tech Center-based Balfour Holdings Inc., was even more blunt in his assessment: "If the world is going to hell in a handbasket, people flock to gold."

The question remains, however, whether the latest gold rush will last.

"For gold, it's the toughest of all sectors to predict where it will go," Duarte said. "But rallies in gold stocks often precede something dramatic happening - like the market crashing."

Balfour's Silver is convinced the market will falter for at least the next few months, so gold will continue to shine.

"Because we're getting multiple corporations surfacing with accounting problems, I think the government will crack down even more, so we're going to see more of it," he said. "I think we're just at the beginning of what will take at least a year to resolve."

Silver -- Sharefin, 03:33:19 07/14/02 Sun

The Significance & Sanity of Silver as Money

This article is about silver’s monetary role throughout history, though it should be read as an overview since much more complete works exist on this subject. It is truly impossible to discuss silver as money without mentioning gold’s role as well. At times countries have been on a gold standard or a silver standard or a dual standard. My aim with this piece is to encourage readers to consider the role they believe silver has in today’s economy. Is silver a monetary metal? Is it an industrial commodity? Is it both?

Safety in Numbers? -- auspec, 13:44:15 07/12/02 Fri

I am going to attempt to make an analogy between the practice of dentistry in a method that flies in the face of organized dentistry and our own political/economic minority position compared to the Establishment.
A small, but very vocal group of dentists practice what is called Biologic Dentistry or Holistic dentistry if you prefer, several different names for a totally different perspective of practice. These minority practicioners, for example, refuse to place mercury, a known toxin, into their patients' mouths. Not only that but we provide MUCH information to our patients as well as the general public as to why the mercury is a potential hazzard. Scientific studies, etc, etc. Maybe 10 to 20% of the US practicing dentists feel this way and the numbers are growing yearly as the science continues to come in backing up our position. The dental establishment is run by the American Dental Association, all the way to the dental schools, state boards, and mainstream dental societies. They absolutely hate what these minority and dissenting dentists are doing, to the point of calling us 'self serving' or 'scare mongers'. They have also tended to pick us off one by one when the opportunity has arisen. No room for error when the dental boards can act as judge, jury and executioner. many fine practicioners have lost their right to practice as well as been financially ruined over the years in this present 'amalgam war'.
What has been an answer to safely practicing different from 'our peers'? For you see a dentist is judged in court by how similarly he practices to his peers. My actual peers are dentists with a similar philosophy as mine, but I will be judged by the standard of the 80 to 90%. Do you follow your conscience or the herd? The answer to this dilemma has been a 'safety in numbers' issue. Forming committed 'alternative' dental organizations for like minded individuals. We rely on solid science from peer reviewed scientific journals to back up our positions. The ADA puts out its propaganda rag/journal and it is merely a trade journal, without the highest standards of scientific scrutiny. They spin and twist and outright lie and the vast majority of the dentists believe their crap because they refuse to thoroughly investigate the issues for themselves, simply trusting their 'authorities'.
So we band together, form advocacy groups, legal experts and we defend ourselves tooth {smile} and nail. It's still a risky proposition to practice different from the mainstream, but there is much more comfort now than there used to be with all this backup support. We know history will award us the overwhelming victory. By the way I am also a dues paying member of the ADA even though I receive next to zero benefit for my money. Why? Because they have gone after a significant number more non ADA members over the years than ADA members.

What the hell does this have to do with honest money and markets and speaking our piece wherever we go? EVERYTHING!!
Our Govt is just like the ADA, they love to pick off the straglers or weaker individuals because they know they can get away with it. They have numerous lobbies to answer to and they cannot afford to pick a fight with strong lobbies.
Where are our 'strong lobbies'? Where are our organizations that are willing to fight for our dissenting/minority opinions? Where do we go to find 'safety in numbers', where if one is unfairly picked out the entire organization will respond in strength?
We have all seen our colleagues silenced our at least dampened by legislation that has been brought forth this very year. Freedom of speech stifled, and stifled blatantly. Intimidation. Yet the more that speak out the more each dissenter is safe from harassment and abuse. I don't plan to shut up, regardless of what comes. It's not only my Constitutional rights, but my God given rights first.
Can't exactly turn to the ACLU for much hope or help, they don't serve my brand of tea, beer or rum. Where does one go for a little umbrella protection if such an entity truly exists? Does it exist? Shouldn't it exist? Does anyone else see how helpful this could be and what a void that currently exists? The internet is ripe for such an entity.

Thoughts and comments are much appreciated!

Yappin along,

auspec

Gary Scott on the Dangers of US Financial Juggernaut -- Giovanni Dioro, 08:16:34 07/12/02 Fri

Gary Scott's 2 part exposé on the dangers of the global financial markets especially in america:

However, the banking problems run deeper. There is a huge distortion that could create a scandal worse than the U.S. Savings and Loan disaster of the early 90s. America's booming housing market swayed government backed Fannie Mae and Freddie Mac lenders to take greater risks. U.S. house pricing is notoriously cyclical and the drop in Wall Street can push housing prices down. Yet these agencies increased lending 20% per annum and now have 1.4 trillion of debt. Because of their quasi-official status, they have $32 of debt for each dollar of capital whereas large banks have $11.50 of debt per dollar of capital. They are making the same mistakes savings and loans made in the 80s. They are paying officials and staff way above public and most private sector rates. Even worse they are moving into "sub-prime" lending.

Here is the real rub. A dangerous house of cards has been built because these agencies are exempt from rules, which limit banks from holding too much exposure in any one company. Banks can hold all they want of Fannie Mae and Freddie Mac stuff.

Over a third of bank capital in the U.S. is held in this federal agency debt and equity, a highly concentrated risk despite the fact that during the 80s housing bust, Fannie Mae became technically insolvent, though regulators allowed it to keep operating...

Harbors from Danger

Harbors from Danger Part Two

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Gary Scott is a very shrewd and respected economic analyst and author. He provides a free email newsletter service which details can be found on his homepage ("homepage" link found in above links)

Gold -- Sharefin, 20:26:14 07/11/02 Thu

The Gold Dealer's Cartel is Running Out of ACES

The supply of gold that has been sold by the gold dealer's cartel has mainly been arranged via gold leases from cooperating central banks to the gold dealers and their preferred clients, probably now themselves. It may well be that central banks, after selling huge amounts of gold via leasing the gold for sale, have come to the realization that there is a credit risk for them in