Golden Pot Archives

HOME

THE GOLDEN POT

GOLDEN POT ARCHIVES

THE GOLDEN POT
gold news & views - charts & more
not so much a forum but rather a news archive

Gold -- Sharefin, 09:21:18 11/03/02 Sun

Gold Market Manipulation & that Giant Sucking Sound

During the very first days after becoming U.S. Treasury Secretary, Paul O'Neill candidly and honestly said he thought the U.S. dollar was too strong. Judging by the response of Wall Street, CNBC and the Financial Times, you would have thought he committed high treason. Yet, why would O'Neill not think the dollar was too strong? He should have known because he watched competitive pressures build against his aluminum company, not because of superior competition, but simply because his company was being taxed in the form of a stronger dollar. With the dollar growing stronger, the price foreign producers received for the sale of their production into the U.S. was rising while the price Mr. O'Neill received for his aluminum he sold overseas was declining. In other words, like American producers since the Clinton Strong dollar policy was implemented in the mid 1990's, Americans are being priced out of their own markets as well as foreign markets. Speaking as an American rather than a globalist, O'Neill knew that the dollar was too expensive.

But the powerful interests who run America, the head guys at the major banking institutions on Wall Street, do not care much about America. They are globalists who will just as soon trade with the enemy if it means gaining global wealth, power and influence. These are the same bankers who, even with Roosevelt's knowledge, traded with Hitler during World War II. (For more information on this issue, read "Trading with the Enemy" by Charles Higham). So when O'Neill spoke honestly as an American, Wall Street interests began to question whether he was up to the job of being Treasury Secretary. The "Financial Times" talked about how the new Administration needed someone who understood Wall Street rather than Main Street. Well from that pressure point on, Mr. O'Neill learned very quickly to spout Wall Street's line, namely the falsehood that America needs a strong dollar. Wall Street might want a strong dollar to keep financial markets from falling out of bed. But an overvalued dollar is no good for anyone in the long run, not even Wall Street. Having sold out, Wall Street allowed him to stay, at least for the time being.

Why does Wall Street want a strong dollar, even when it means American industry is disappearing from our shores? Because without it, the street would not have been able to suck in global capital into what now amounts to something like $1.5 billion per day. And without the strong dollar, which was engineered by the Rubin/Summers team, the stock market orgy which allowed Clinton to avoid removal from office and claim credit for the boom, would not have been possible. Armed with the knowledge of "Gibson's Paradox (see www.goldensextant.com), the Clinton Administration and the Federal Reserve knew that if it were to succeed with their collectivist interventionist policies of bailing out Mexico, Long Term Capital Management, Russia, Asia, etc. it would have to "cap" the gold price. And so it did. Having been taught a lesson about the strong dollar during the first days of the Bush Administration, all indications are that Treasury Secretary O'Neill has pretty well picked up were the Rubin/Summers team left off so far as gold manipulation is concerned.

Roach has been saying ever more frequently of late that for the global economy to turn to some semblance of supply and demand balance, the dollar must become weaker. That would help reduce demand and increases savings in the U.S. and reduce savings and increase demand in other parts of the world. Roach says that the dollar must decline vis-à-vis the Euro and the Yen by 15% and 20% if it is to be restored to a level that makes sense on the basis of trade.

Dr. Roach quite rightly says that to restore equilibrium to the global economy, the dollar must decline, whether Wall Street likes it or not. He says that on a trade weighted basis, the dollar needs to decline by 15% to 20% vis-à-vis the Yen and Euro. Then he says that unless the dollar is also devalued vis-à-vis the Chinese currency, the Euro and the Yen will have to appreciate by more than 15% to 20% vis-à-vis the dollar to make up for the overvalued Chinese currency. But that certainly won't be a fair solution for Europe and it won't solve a problem of trade imbalance between the U.S. and China.

What is really needed is a return to a fixed rate regime based on a politically neutral currency like gold. Will that happen? Not as long as the U.S. remains in the drivers seat because the U.S. in fact is now gold poor. Even if you believe the U.S. has all the gold it claims to have in its vaults (it most likely does not because it claims gold leased out is still in its vaults) the U.S. does not even have enough gold in its vaults to provide a 1% backing of its money supply (M-3). By contrast, the Euro has about 15% backing plus most of the member countries themselves have considerable hoards of gold.

Again, if we could see a reason for optimism regarding the growth of earnings, there may be some reason for hope that over the next several years, if stocks did not rise, but by merely treading water at current levels, rising earnings may bring PE ratios back into line with historical ranges between 10 and 20 times. Yet for reasons outlined above, not only do we think earnings are not going to grow, but we think they are likely to continue declining substantially into the future. Because we take this view, we do not think Robert Prechter's unfortunate vision of a Dow below 1,000 is not at all out of the question. Incidentally Ian Gordon's target decline is pretty much in the same range as that proposed by Prechter.

Gold -- Sharefin, 09:16:08 11/03/02 Sun

Basic Business Fundamentals Indicate that Gold Mining Shares Make Sense

Taking the Emotion Out of Gold

Gold -- Sharefin, 09:10:02 11/03/02 Sun

Placer Dome extends AurionGold offer

Placer Dome's shareholding in AurionGold is now over 78%. The two largest shareholders in AurionGold, being Colonial First State and M&G Investment Management, have accepted the Offer.

Gold -- Sharefin, 09:07:58 11/03/02 Sun

Harry Schultz Life Strategies

How times change. A few years ago Merrill Lynch refused to take orders for gold shares. Now a Merrill Lynch analyst is projecting $550 an ounce gold or more. Merrill analyst Don Murphy said on CNBC (of all unlikely places) "I'm inclined to think gold is making a secular low, a buy of a generation. To be conservative, I'm saying $450 to $550, But my thought is gold could go back to challenge the 1980-81 levels at $850." As it happens, he's right.

The monetary world may enter a new paradigm next year. In June 2003 a bookkeeping gold dinar & silver dirham will enter the stage. A dinar will contain 4.25 grams of gold of 22 carats. The dirham will be 3.0 grams of sterling silver (or 0.925 pure silver). Malaysia has retreated from its original minted coin plan, under western pressure, IMO. There will be 4 stages for the transition from fiat to metal currency says the non-govt World Islamic Trading Organization. They say "Gold offers stability & order. Gold is the end of political money." Perhaps the die is cast at last! Let the sparring begin. Download these 5 sites for info: Islamic Mint / Ikim / Mineweb / Khilafah / Freelists

The gold dinar plan is still taking form among several Muslim nations. It's a period of conceptualizing a new monetary unit that will lead to a real gold-in-hand system. The anti-freedom forces (Western bankers) are fighting it, but the odds are with the Muslims, who have the numbers, the faith (in gold), & the oil. Not to mention determination born of centuries of frustration at the western-controlled fiat system.

Stopress:
It's either a rumor or a tipoff. I'm told Barrick has been selling gold to force the price down so they can cover some of their huge short-hedge position at more favourable prices, or perhaps not cover if they prefer a gold bear mkt for their hedging strategies. My source says "ABX seem to want to kill gold; they seem to be gold's enemy, for if they force it much lower the chart could turn bearish." If I owned ABX, I'd get on the phone to them today & tell them to back off.

Gold -- Sharefin, 09:00:12 11/03/02 Sun

White mine ownership a myth

The chairman and outgoing chief executive of Gold Fields, Chris Thompson, has criticised government thinking that the country's mining industry was in any way still in the hands of "mythical white owners".

Thompson said in Gold Fields' 2002 Annual Report that "South Africa's mines are not, in fact, owned by the mythical white owners" but for the most part were now owned by foreign investors and local institutions, representing the "savings and pensions of millions of people in the street", a large portion of whom were black.

Gold -- Sharefin, 08:56:59 11/03/02 Sun

An Open Letter to Agnico Eagle Mines

It is refreshing to discover, that there exists in the mining industry production management, a group of managers that believes in the traditional methods of finance. Both your policies not to hedge via the popular over-the-counter gold derivatives, and not to hedge at all, must receive significant recognition and the lasting respect of the entire gold/silver investment community. It is not easy to walk your own path in a world gone mad with paper gold/silver constructs that are unlisted, unregulated, non transparent, and of questionable financial integrity. To have not accepted the many invitations you received from then AA credit regarded & reputable international investment bank's gold dealer subsidiaries offering you supposedly almost free money and instant gratification is a rare and valuable management skill.

We are, in my opinion, in the very early stages of a very long-term bull market for gold based not only on the five traditional elements of such a phenomena, but also the return of gold to the monetary system. You are a senior North American producing entity and should enjoy the same premium in the marketplace now being demonstrated by Royal Gold who has sought the other non-hedged gold-related high road, which is the royalty method of gold ownership. Have you noticed the premium nature being awarded to Royal Gold for not being involved in derivatives? Have you noted how the major North American Gold Producers are suffering in the action of their share price from their continued adherence to derivative hedging, as a result of the investor welcomed new accounting directives requiring more disclosure and profit analysis due to hedging and the attendant non-recourse project financing? Because of this, I believe, you do not need warrants to sweeten a financing. You can offer shares for whatever funds you require for project investment and succeed.

Gold -- Sharefin, 08:53:11 11/03/02 Sun

Anglo Gold fails to cash in

That was an increase of just $2m over the previous quarter despite the fact that gold production was up 11%.

The rise also failed to reflect the soaring price of the precious metal in recent months.

The company said its profits had been somewhat held back by its hedging strategy - where it uses the futures markets as an insurance policy against fluctuations in the price of gold.

Anglo Gold has already sold about 30% of the gold it will mine over the next five years at an agreed price.

That will be good news for the company and its shareholders if the market price of gold falls, but it will prove costly if the price stays high.

Gold -- Sharefin, 08:50:24 11/03/02 Sun

Barrick CEO upbeat on gold, rues timing of warning

Barrick Gold, long known for stellar growth and rising profits, put its credibility on the line when a third-quarter profit warning came days after news of a big expansion, and the company now admits its timing could have been better.

Gold -- Sharefin, 08:48:25 11/03/02 Sun

Agnico-Eagle Shares Drop on Dilution Fears

Agnico-Eagle Mines Ltd.'s announcement of a $167 million offering of 12 million new shares on Thursday sparked a 10-percent selloff of the stock on dilution fears.

Gold -- Sharefin, 08:47:06 11/03/02 Sun

Gold demand likely to soar

The demand for gold in the Kingdom is expected to increase by more than 20 percent during the last quarter of this year, market analysts said. They attributed the increase to a growing trend to invest in gold amid fears of an imminent US attack on Iraq.

Osama Al-Wazir, director of World Gold Council for the Gulf countries, said he expected increase in gold sales over the coming months as a result of new developments in the region.

Muhammad ibn Saeed of Al-Amoudi Currency Exchange Center said there was big demand for gold coins and biscuits in recent months as many people, especially expatriates, wanted to preserve their money in the form of gold as a safe investment.

The WGC reported recently that there was a 16 percent increase in gold sales in the Kingdom and other Gulf states during the first half of this year.

Gold -- Sharefin, 08:43:47 11/03/02 Sun

What's Good for the Goose

Gold is coming back from a long southward trip. To get in on this commodity's rise, investors should take a gander at the mining companies that produce it.
Here's an interesting fact about gold: Of the 140,000 metric tons produced since the yellow metal was first crafted into jewelry or melted into ingots, about 120,000 tons are still in existence, in the vaults of central banks, in museums, in drawers, or even dangling from navels. Unlike most commodities, gold is accumulated, not consumed. Thanks to its almost magical combination of properties, gold is soft and radiant yet indestructible. And because it doesn't react with oxygen, gold never rusts, corrodes, or tarnishes.

The same cannot be said for investors' perception of gold, which has been heavily tarnished by a two-decade-long bear market in the metal. Although gold, at a recent price of $320 an ounce, is up about 18 percent this year, it is still down more than 60 percent since its peak of $850 an ounce in January 1980. "Investors have a lot of psychological baggage when it comes to gold," says Prescott Crocker, co-manager of the $125 million Evergreen Precious Metals Fund. "Many have come to believe that it is supposed to go down."

It's time for a mental readjustment. The price of gold is poised to go higher-potentially much higher. With interest rates at 40-year lows, the opportunity cost in physically owning gold, which doesn't pay any interest, is no longer a big concern. Gold has also benefited from the recent uncertainties around the world. Talk of invading Iraq, new terrorist cells, more corporate scandals, and a double-dip recession will drive up the price as investors seek safe havens. Those moves could be sharp, sudden, and short-term, but gold should get a more sustainable boost from a weak dollar. After all, in many ways gold is just another currency. "The dollar and gold are in competition as a place for individuals to store their wealth and liquidity," explains James Turk, who writes the Freemarket Gold & Money Report. "As the dollar drops, gold will go up."

Gold -- Sharefin, 08:38:59 11/03/02 Sun

Another top gold analyst goes

Dan McConvey, one of the most respected gold analysts globally, was retrenched yesterday (Wednesday) by Goldman Sachs New York. He has already taken his leave of the firm as is nowadays customary with large corporations.

The news came as a shock to McConvey’s colleagues, and creates additional uncertainty for the precious metals value chain which has been downsizing for nearly two years, despite the sector’s recovery in terms of outright returns and increasing corporate banking business. Several institutions have abandoned metals trading in this period as liquidity evaporates (and continues to do so) and the overall market downdraught has unsteadied the metals sell side analyst community as well, even with gold stocks living up to their counterweight status.

Sources say a number of other New York metals desks are feeling the pressure, which appears to be a blanket decision by the leading firms to concentrate on the most lucrative stocks. Although gold stocks have come back into focus, trading volumes have not risen sufficiently that they can pay the way for full-house research in a sector where the combined global market capitalisation is maybe half that of an already decimated telecom stock.

Gold -- Sharefin, 08:36:50 11/03/02 Sun

AngloGold mulls $620m projects

AngloGold is assessing the viability of eight expansion projects estimated to cost roughly $620 million (R6.2 billion) adding 16.5 million ounces to the group’s production profile. This is in terms of the South African group’s intention to pursue organic growth in addition to a merger and acquisition strategy which, the group said, had not been surrendered notwithstanding its failed bid for Australian gold producer Normandy this year.

Six of the expansion projects, equal to 11 million additional ounces, were in South Africa and the remainder were in Brazil (1.9 million ounces) and Western Australia (3.6 million attributable ounces). This latter project, planned for Boddington, would require the development of a new mine, according to AngloGold’s chief executive officer, Bobby Godsell. The additional 16.5 million ounces was over and above 15 million ounces of gold expansions underway.

From the far side -- Sharefin, 16:01:28 11/02/02 Sat

Richard Russell

The e-mail below is most interesting and most important. The writer believe that we're already in a state of hyper-inflaltion, and he presents a damn good argument to that effect. His answer for you and me -- GOLD.

Subject: Trade Reparation, Hyperinflation and Gold

Dear Richard,

I feel honored that you would share my thoughts with your other subscribers. Some of my ideas may seem to come from a bit of a different angle than your typical American subscriber since I am an ex-pat of some 25 years now and lived in Japan during their roaring 80's, almost a mirror image of the roaring 20's in the U.S. I feel a hundred years old.

It is more than evident now that the world financial system is coming to a crossroads that will result in a complete and total overhaul not dissimilar to a Bretton Woods. The magnitude of credit and debt creation, manipulation and pure speculation in thousands of different markets worldwide is beyond anything we can comprehend. The size of the numbers speak for themselves. If history tells us anything, war will be a part of the mix, unfortunately.

What follows has been bothering me for some time now. It is something that most people may find absurd or maybe a bit nonsensical, but then again there is a lot of that going around nowadays. Let me speculate....

TRADE REPARATION, HYPERINFLATION, AND GOLD

In early 1923, German railroad workers went on strike for an increase in weekly wages. They were asking for much more than the 2,500,000 marks they were presently earning. A few days later they settled on a 9,000,000 mark weekly wage. A week later their 9,000,000 marks bought less than the 2,500,000 marks they were earning a little over a month before.

Yes, this was the infamous hyperinflation of Weimar Germany in 1922-1923. When shops would close and update their prices hourly and higher. When an old lady would have to bring a wheelbarrow of billions of paper marks to buy an apple, only to be mugged beforehand and have her wheelbarrow stolen from her. When the German mark was used as wallpaper or toilet paper. How could this happen?

Simply. The Germans lost the First World War and the allies handed them a reparations bill ( 132 billion gold marks ) that they couldn't pay. Not only did the allies demand payment for damages, but also imposed restriction on German industry, even annexing parts of industrial Germany to Poland. Germany fought back by suspending payments in gold in order to expand the supply of paper money and pay for the war with fiat currency. By 1921 the German mark had plunged to being worth only one-third of a cent on foreign exchange markets. This didn't stop the German government from running up huge budget deficits and putting more marks into circulation. War reparations were destroying what little was left of Germany after the war, and laying the foundation for what was to be the greatest hyperinflation of modern times.

Then, in 1923 French troops moved into the Ruhr industrial area of Germany, closing down factories in order to squeeze the gold out of the Germans. The Germans did the only thing they could and printed billions of marks to put up whatever resistance they could. The Reichsbank commissioned 2,000 printing presses to print around the clock in order to keep up with demand for the fiat paper money. Money was literally given to the people to spend in the confines of a complete socialist, welfare state. The mark fell from 20,000 to the dollar to 4,200,000,000,000 ( that's trillion ) to the dollar in a short period of nine months. The cost of an egg went for a quarter of a mark in 1918 to 5,000 marks in July, 1923 ... to the absurd cost of 80 billion marks three months later. It all ended when the mark was scrapped for a new currency called the rentenmarks which had a face value of 1 trillion of the old marks. Of course, Germany never really recovered and the economic landscape resulting from the hyperinflation of 1923 consequently brought Hitler to power. And we all know the rest of that story.

In retrospect, Weimar Germany, absurd and nonsensical as it was, clearly illustrates what actually can happen when a country is bankrupted and cornered with no way of offering anything of value to pay off its bills.

Fast forward to 2002. I hate to say it, but there is another Weimar Germany in the making and nobody wants to talk about it. Nobody! It has come about over such a long period of time and the bankrupting and cornering is being done so slowly and covertly that nobody notices or doesn't want to know. Nobody believes it can or will happen.

For the month of September, 2002, the U.S. racked up a record trade deficit of over 38 billion ( $38,000,000,000 ) dollars. Not 3.8 billion. 38 billion! At this rate, the US is going to record a trade deficit of over 400 billion dollars just for this year alone. This is absurd.

To put this another way Richard, as you like to do: This is like all Americans cumulatively swiping their AMEX card at the BIS ( Bank of International Settlements ) each and every month to the tune of $35 billion plus. And, we've been swiping this card for over thirty years now. But since its an American Express ( not GOLD ) card, we never have to pay the debt back.

Why? Because it is NOT a GOLD card. It it were, we would have quit swiping long ago. These are hyperinflation numbers and the wheelbarrow would again be a hot commodity if these figures were taken to press. But they aren't.

At any rate, the debt ends up as just a bunch of digits recorded on a hard drive somewhere at the BIS in Switzerland and the Treasury in Washington. Month after month we receive goods and services free from the rest of the world and Greenie's niece at the BIS keys ( Keynes?! ) another 35 bil. on the debt side of the U.S. Treasury ledger into the computer. Our creditors just keep hoping that someday they will be allowed to cash out those digits into something of real, tangible value.

But the day is coming when our creditors are going to need the cash and cash out they will. Or it will be War. And the demand for payment, or Trade Reparations, will unmask the inflation that the FED and the U.S. Government has attempted to hide from us all -- for generations.

We already have hyperinflation, they just haven't had to crank up the presses yet. The trade deficits and all the monopoly-money, digital debts we have piled up are going to be paid back in cheaper, hyperinflated dollars. The numbers tell us hyperinflation.

The tide has already changed. U.S. credit is no longer good for 30 years; the 30 year bond is dead and illiquid. The 10 year bond is suppose to be the benchmark, but almost all monies raised by our government are in the shorter maturities, usually no longer than two years out. U.S. corporate debt for all practical purposes is junk. A bit more on the downside on Wall Street and everybody will be getting into cash, the little of it that exists.

The clock is ticking, the war is on, both inside and outside the country. Another election, another crisis. A lower, lower dollar. No more AMEX, no more swiping, no more Greenie, and no more credit. When it comes, it just comes, Weimar just happened..... and GOLD just sits there patiently waiting for all takers...

All the best,

JD

Russell Comment -- in case you're confused, JD is saying that the US extension of digital credit ( "monopoly money" ) has been so enormous that it can be compared to the the historic inflation of Weimer Germany. And you know something, I'm afraid he's right. By the way, the great German inflation of the 1920s set the stage for the arrival of Adolph Hitler and the Nazi party.

I've said this before and I'll repeat it -- the installation of the Federal Reserve and the removal of gold from the US currency will turn out to be two of the greatest disasters ever to befall this great nation. If the Founding Fathers could see the damage the Federal Reserve and the removal of gold have done to this country, they'd be turning in their graves.

Jack Welch, a hero a year ago, is now seen as symbol of corporate greed. Sooner or later somebody's got to put an end to the ridiculous, outrageous sums of money plus perks that executive are pulling out of corporate coffers. After all, these are public companies owned by their stockholders, not personal fiefs for corporate executives.

Jack Welch, former head of GE retired with six residence in three states worth $30 million. He has security accounts worth $249 million. He has investments in limited parternships worth $14 million And he has GE non-qualified stock options worth $72 million. Welch has total assets of $456 million and a monthly income of $1.4 million.

Kinda disgusting, thinks Richard Russell

Gold -- Sharefin, 05:28:32 11/02/02 Sat

Richard Russell

November 1, 2002 -- Hey, you want to know the great irony of economics
today? Here it is -- every nation in the world is dying to sell is
goods and merchandise and commodities to the USA. And the USA pays all these
poor bastards with junk paper money that is created out of thin air,
created by our very own Federal Reserve.

The question is -- how much longer can this go on? How long will our
overseas friends go along with this charade? I really don't know. But I
do know one thing -- sooner or later this ridiculous trading will come
to a halt. Sooner or later people and nations are going to demand
something real in return for their goods and their merchandise and
their commodities.

Say hello to gold.

I think a year or two years or maybe five years we'll be looking back at
319 dollar gold, and we'll be saying to ourselves, "Where the hell was
I? Where was I when gold was selling like dirt for 319 dollars an ounce
when the world was being flooded with hundreds and billions of dollars
of credits. Why did I believe the Fed when it told me that gold was
garbage and dollars were money?"

And so it goes. It reminds me of a story told about Einstein. Einstein
was asked about infinity. He thought for a moment and said, "There are
two things that are infinite -- space and human stupidity."

He's another irony. The dollar is weak. Today the Dec. Dollar Index
broke to it lowest level since July. The 50-day moving average of the
Dec. Dollar Index ( 107.70 ) has turned down, and the Dec. Dollar Index
has plunged far below its 50-day MA. As I write the Dec. Dollar Index is at 106.02.

What does a country do to defend its currency? It raises rates, making
its currency more attractive. But the US economy is so weak that it's
now a "given" that the Fed next week will lower rates by a quarter of a
point or possibly a half.

Meanwhile, as I write this morning Dec. gold was up 2.50 before falling
back. Question -- why aren't the gold shares surging instead of
reluctantly ticking higher? My opinion -- the gold shares have been
whacked so many times, they've been battered back and forth so many
times -- that investors don't trust them to move higher with gold. In
fact, deep in their hearts investors don't trust the whole gold situation.

Big money, serious money, multi-million dollar money wants the metal,
they want the safety of actual gold. When you hold gold you hold pure
wealth that's ultimately beyond any government or government regulation
to destroy.

Gold shares are different. Gold shares are common stocks. Gold shares
are mining operations. Gold companies can be confiscated by nations,
they can be trampled by regulations, they can be battered by rebel
forces, they can be subject to mine problems, they can be taxed, and
like AEM they can watered with the issuance of additional shares of stock.

Me, I like both. But I'm not kidding myself. Gold, the metal, is at the
base of the wealth pyramid. Gold doesn't tarnish, it doesn't go out of
style, it is our great barrier against the Fed's obsession with
creating paper junk money.

Gold stocks are a great speculation when the metal moves higher. Many
mines, particularly mines with low-grade gold, have big leverage when
the price of gold rises.

As I see it, it's going to take time, maybe a lot of time, before
investors believe that the bull market in gold is for real. In the
meantime, as in all bull markets, gold will try to climb as high as it
is able while NOT ATTRACTING the crowd. Remember, most of today's money
managers were not around during the '70s. They've never seen a bull
market in gold. And for the last 20 years, all they've seen is gold
being bad-mouthed by the believers in fiat ( paper ) money.

Gold -- Sharefin, 16:51:18 11/01/02 Fri

The same spike after hours is also recorded from another data vendor.

So it appears that gold was chased higher after hours even though the Kitco charts don't show it.

Gold -- Sharefin, 16:12:09 11/01/02 Fri

Something strange in these charts.

Kitco Gold

UK Gold

Being the end of the week - there's basically no trading afterhours when the US Closes till Monday morning.

Yet the UK Gold price chart is showing it surged after closing....^o-o^....

From the far side -- Sharefin, 07:13:03 10/30/02 Wed

Richard Russell like gold
(Y2K) Oct 30, 08:09

"Meanwhile, the faster-moving 50-day MA for Dec. gold stands at 317.50. Dec.
gold, as I write, is trading at 317.20. If Dec. gold can close decisively
above 317.50, that would constitute a "buy signal." Note that the gold shares
are beginning to firm across-the-board.

If Dec. gold can close above 320 it will stir up more interest. And of
course, 325 and more importantly 330 would be the next upside targets.
Historically, gold shares have tended to hit their lows in the fourth quarter
of the year. Well, we're there.

As a matter of interest (I should say great interest) the Dow in August 1999
would have bought 42.1 ounces of gold. That was the peak of Dow strength
against gold. Today the Dow will buy 26 ounces of gold.

I've made this prediction before but I'll repeat it. At some point in this
bear market, I expect the price of gold and the Dow to cross on a ratio of 1
to 1 as it did in 1980. At what price? OK, pin me down -- my guess around
2000 to 3000 or if anything lower.

Dec. gold gapped up 2.50 to close at 318.10. This takes Dec. gold above its
50-day MA, which stands at 317.50, and gold thus flashed a "buy" signal. I
bought more kruggies today."

Richard Russell
Dow Theory Letters

From the far side -- Sharefin, 07:08:17 10/30/02 Wed

A most profound inflation/deflation view from an e-mail to the Great
Richard Russell
(richard640) Oct 30, 08:41

A very interesting and important e-mail (below) received here this morning.
Do I have smart subscribers of what!

Dear Richard,

Thanks for your great newsletter everyday.

Recently there's been much talk about whether we are headed into a period of
inflation or deflation. It really is hard to figure since there has never
been a time when all countries of the world were off a gold standard. Even
when England closed the gold window in 1914, the US, France and other
gold-bloc countries still exchanged their respective currencies for gold. And
then in 1933 when Roosevelt signed the Thomas Amendment which abandoned the
gold standard the US had followed since 1879, most of the gold-bloc countries
of Europe stayed with gold.

The opinions of the experts seem to differ on many points to the
inflation-deflation argument. And then there are the different interpretation
as to what these terms mean. Everyone knows the technical meaning of
inflation is an increase in the money supply. Deflation is a decrease in the
money supply. Many people talk of rising prices as inflation and falling
prices as deflation. Nobody talks about hyper-inflation; although the
estimated world debt of 400 trillion dollars is a rather large number. Maybe
it doesn't really matter since it's just a bunch of figures (credits and
debts) stored on thousands of hard drives on thousands of computers scattered
all over the world.

But actually, to the average, everyday, working-class man on the street, the
meaning of these words hit home when they are defined as follows:

Inflation Decrease in purchasing power (money earned buys less)
Deflation Increase in purchasing power (money earned buys more)
Hyper-inflation Working for nothing (money earned buys nothing)

The crux of the argument of a future inflation vs deflation really comes down
to whether we will be able to purchase more with our money or less. And then
again what is present-day money. We can't compare our money today with the
money of 1914 or 1933. Gold, and paper representing gold, were used in the US
from 1879 to 1933 as money. Today's money is not money at all. It is not gold
and it isn't even fiat paper currency (as of July 31, 2000 there was only
$539,890,223,079 of paper and coin currency in circulation---this used to be
the capitalization of a couple of dot.coms). All we have now is credit. And
there is practically no savings. Today, credit is money. And when credit
becomes money, the money is actually never earned. And when credit is
withdrawn, there is complete decrease in purchasing power which is defined as
inflation.

What will happen when we can no longer borrow (receive our money)? It doesn't
matter where prices of goods and services go. Our purchasing power will
vanish. No country with large external debts have ever experienced deflation
when the credit dried up. They have all met with inflation, big time.

Argentina is a case in point. In Argentina credit came to a halt and left the
whole system in limbo. The debt-credit system locked up. The result has been
that tenants can't pay rent, so landlords don't pay mortgages, so banks don't
make new loans. Now, everything has been turned into a cash transaction, but
no one has any cash. If you don't have cash, you can't buy anything. All
contracts have become null and void since there is no credit. The 72% decline
in the peso has caused the price of imports to soar and is set to result in
an 80% inflation rate. Consumption is falling at a rate of 24% per year and
the economy looks to shrink 18%. Rising prices and falling consumption? An
unusual mix but the beginning of hyper-inflation never makes any sense. This
is inflation or the destruction of purchasing power. The result of a pure
credit based money system after the plug is pulled.

Unlike Argentina, Japan has not experienced inflation. Why has Japan
experienced deflation instead of inflation? There are a number of reasons,
and these will not apply to the US when it experiences something similar to
Brazil or Argentina in the future. First, the yen has remained relatively
strong against the dollar. One US dollar to 124 yen is not a weak yen
historically. Secondly, Japan has been and still is primarily a cash-based
society. Credit still has not caught on to the degree it has in other western
countries. You can still withdraw about
1,000,000 yen (US$8,000) in one hit from any ATM machine at your local bank
branch. Just spread your money around to several banks and it is easy to pull
the US$ equivalent of 40 or 50 grand out of the machines. And many Japanese
still have twice or three times this amount in savings. Thirdly, Japan is
still making money with about a US$50 billion annual trade surplus. Fourthly,
most government debt (credit) is owed to the Japanese people themselves.
Japan has very little external debt.

Deflation in Japan has come primarily in the form of asset deflation which
has only in the past four or five years begun to directly affect the price of
goods and services and increased unemployment. It is now causing the lowering
of salaries for Japanese workers, in some ways catching up with the decrease
in prices and increase in their purchasing power (deflation).

So what lies ahead for the US; inflation or deflation? Asset deflation is a
given. It is happening everywhere in the world. It is happening everyday and
has been going on for the last three years on Wall Street. Real estate is
next. This is where Japan and the US do share common ground. But as for the
everyday man on the street who is worried about his/her purchasing power.....

If you believe that the rest of the world will lend the U.S. (work for the
U.S. for free) 1,5000,000,000 dollars a day (and rising) forever, choose
deflation.

If you believe the yen is bound for 150 or 160 to the dollar, the euro is
headed back to 85 euros to the dollar, and gold is about to tank to US$250 an
ounce, choose deflation.

If you believe the FED can increase the money supply to infinity and the
digits created on all those computer hard drives will never ultimately effect
the purchasing power of Joe sixpack on the street, choose deflation.

If you believe the US Government can continue to run deficits in the hundreds
of billions of dollars year in and year out and fight a world wide war on
terror in every country in which terror exists and then also increase the
purchasing power of the average John Doe, choose deflation.

If you don't believe in the above, and believe that the party is over, and
there really is never a free lunch, and that our foreign creditors really
don't like us all that much anymore, and that the War on Terror will last
more than two years, and ............your purchasing power for goods and
services will continue to decrease as it has since your grand-daddy was born,
choose inflation.

And, for those hard-core lifer-type gold bugs, if you believe that the US$
will lose its status as the world's reserve currency just as the sterling
pound did at Bretton Woods in 1944 exactly 30 years after they abandoned the
gold standard in 1944, and since it is now 31 years since Nixon closed the
gold window on the dollar............. choose hyper-inflation.....and go on
buying your gold...

Gold -- Sharefin, 01:49:03 10/30/02 Wed

Newcrest aims to rejig gold hedges

Australia's Newcrest Mining Ltd said on Wednesday it was committed to simplifying its gold hedge book after A$74 million in accounting provisions wiped out benefits of lower production costs last year.

Newcrest, Australia's second-largest gold miner, held 5.7 million ounces -- more than six years' production. It also hedges some of the copper it mines.

Unlike a number of rival miners in Australia and other big gold mining countries, such as South Africa and the United States that have reduced or abandoned hedges as the gold price trades above US$300 an ounce, Newcrest has retained much of its hedging.

Gold miners worldwide reduced their hedge positions by 365 tonnes, or 11.7 million ounces, in the first six months of this year, a recent JP Morgan survey shows.

Miners hedge by selling yet-unmined nuggets at fixed prices. But if bullion prices rise, hedgers run the risk of landing "out of the money," forcing them to sell gold below prevailing market prices.

"The board is committed to simplifying the hedge book, which in future will be used only to provide a floor to underlie our capital investment while at the same time retaining maximum exposure to rising gold and copper prices," Newcrest Chairman Ian Johnson told the annual meeting of shareholders.

"Unfortunately, the impact of the hedge book during the year meant that low production costs were unable to be translated through to an acceptable profit result," Johnson said.

Gold -- Sharefin, 01:47:11 10/30/02 Wed

GoldQuest seeks RBI okay to mint gold coins

GoldQuest International, a gold numismatics company, has approached the Reserve Bank of India (RBI) for permission to mint legal tender coins in gold for collectibles market.

The company already mints legal tender coins of the Kingdom of Bhutan in gold as collectibles. In India presently no private mint is allowed to mint the legal tender coins in gold.

The company sells only gold medallion collectibles In India at present. It is planning to widen its range of products including legal tender coins and watches.

Gold -- Sharefin, 01:46:03 10/30/02 Wed

VIEWS FROM THE MARKET

Gold was looking healthier after
sharp drops in equity markets and a weaker dollar burnished the
metal's safe-haven status, but would come under pressure if
stocks bounced back strongly, analysts said on Wednesday.
Silver was expected to hold on to one-month highs thanks to
renewed buoyancy in gold, while platinum was seen trading
quietly around current levels.
GOLD - The precious metal hit two-week highs in European
trade on Tuesday as stock markets slumped on the back of
disappointing U.S. consumer confidence data for October.
Growing anticipation of a U.S. interest rate cut would
continue to support gold, as lower rates reduce the incentive of
gold producers to sell bullion into forward markets, in effect
limiting supply into the market.

"Equity markets rallied after the COMEX close to finish
almost unchanged, which has encouraged liquidation of the yellow
metal this morning, confirming that the gold/equities markets
are officially pegged," Standard Bank London said in a daily
note.
The bank expected gold to consolidate around current levels,
before attempting to leapfrog to an upside target of $320.00.

Gold -- Sharefin, 01:44:40 10/30/02 Wed

Times Delhi Gold Fest: Seize a golden opportunity

The gold rush is here. And the lucky few even won coupons worth Rs 1 lakh at draws held everyday by the Times Delhi Gold Festival.

"The festival reminded consumers of the simple pleasures of buying gold. We tried to bring back the focus on gold jewellery. Delhi has been a tough market, but we managed to bring together some 60 jewellers and made this event a success," says Sharmili Rajput of World Gold Council.

The festival was presented by The Times of India, sponsored by World Gold Council, supported by Gold Society of Delhi and produced by Sercon. "The event has been a success," said Vijay Singh of Sercon.

"We managed to bring back excitement in the jewellery market by giving incentives to bored consumers," he said.

More people splurged on gold this month than ever. "This festival removed the sluggishness in the jewellery market. For a year, we've had poor sales. This festival gave momentum to the market," said Gold Society of India secretary Rakesh Saraf.

After the success of the Times Delhi Gold Festival this year, jewellers are planning a mega event next year too.

Hemant Chawla of Chawla Jewellers said: "Consumers felt motivated to spend. We're planning to make this an annual event. In fact the rush was so much that it became difficult for us to manage. After months people are rushing to buy gold."

Gold -- Sharefin, 01:43:11 10/30/02 Wed

Bema Gold to acquire high-grade gold-silver project in Russia

Bema Gold Corp. has struck a deal to acquire control of a gold and silver project in Russia.

The intermediate gold miner said Tuesday it had signed a letter of intent with the government of the Chukotka, an autonomous region in northeastern Russia, to acquire up to 75 per cent of the high-grade Kupol gold and silver project.

Gold -- Sharefin, 01:41:49 10/30/02 Wed

Newcrest Expects to Complete Mine Funding in December

Newcrest Mining Ltd., the biggest Australian-owned gold producer, said it expects to complete in December funding for its A$975 million ($540 million) Telfer mine project in northwestern Australia.

The financing will include A$600 million of loans and A$230 million of equity, Newcrest Chief Executive Tony Palmer said in a presentation prepared for the company's general meeting in Sydney.

Telfer, located in Western Australia, is expected to be the world's eighth-largest gold mine, with reserves valued at $5.5 billion based on current prices. The project may make Melbourne- based Newcrest a takeover target for rivals such as Barrick Gold Corp., investors have said.

Gold -- Sharefin, 01:40:00 10/30/02 Wed

TOCOM gold little changed as players await package

Yen-based gold futures finished all but unchanged on Wednesday, caught in a tug-of-war between a firmer yen and momentum from gains overseas after dismal U.S. economic data ripped into stocks.

Volume was moderate as speculators waited for a key Japanese banking and economic reform package, due later in the day, with Prime Minister Junichiro Koizumi making it clear various issues remained unsettled. "People are really sitting on their hands," a brokerage analyst said. "As long as the direction of the currency market remains unclear, you're not going to see a lot of active trade."

Financial markets were on tenterhooks as acrimonious haggling continued over Tokyo's long-awaited package, which looked likely to water down harsh proposals on bank reform.

Whether the government has the stomach to press ahead with painful reforms of a system groaning under 52 trillion yen ($423 billion) of bad loans could have major implications for future gold demand.

Fears over the health of banks sparked a gold rush earlier this year as Japanese savers -- among the world's most prodigious hoarders -- rushed to put money into safe assets.

But the kind of radical surgery that could trigger a similar rush appeared increasingly unlikely as bank shares soared on expectations of a "fudge" to the harshest elements of the reform package.

Gold -- Sharefin, 01:38:23 10/30/02 Wed

Gold Pauses But Market Still Solid

0834 [Dow Jones] Some short-term profit-taking shaves 75 cents off spot gold to US$316.95/oz in Asia, say traders; but gold's outlook remains cautiously optimistic after poor U.S. consumer confidence data, more talk of Fed rate cut next week. Upside target remains US$320, with support at former resistance at US$315. (WCP)

0833 [Dow Jones] OVERSEAS SUMMARY: USD managed to claw back some ground after early dive vs majors on woeful consumer confidence report; Conference Board's index 79.4 in October vs 93.7 in September, lowest reading since November 1993 and well below 90.0 market expected, opening door for Fed rate cut next week. EUR/USD hit highest point since Oct. 15 while USD/JPY slid to lowest level since Oct. 4, although USD recovered towards session end on move by stocks into modest positive territory. USD/JPY at 123.12 late after hitting 122.36, EUR/USD at 0.9830. DJIA ended day flat (+0.01%) after falling 170 points early on consumer confidence report; market aided by Procter & Gamble's 3.8% rise on solid 1Q results. Nasdaq fell 1.2%, Philly semicon index 3.1%. Treasurys rallied on sour economic news, talk of near-term rate cut, with 10-year +1 4/32 at 103 14/32 to yield 3.95%. December Nymex crude down 43 cents at $26.86/bbl on plummeting gasoline futures and before expected bearish API data.
USD/JPY back over 123 mark in Asia on buying by big U.S. bank, but Japan market in general pretty quiet before BOJ, economic package; Nikkei +0.6% with government funds sighted in futures. USD/Asians getting support from USD/JPY. Bourses mixed as no cues from U.S.

Gold -- Sharefin, 01:36:22 10/30/02 Wed

Refco sees no swift opening of China derivatives

China's fledgling derivatives market is likely to stay closed to foreign investors for years to come, with regulators mindful of a past attempt at liberalisation that ended painfully, U.S. futures brokerage Refco Group said.

Gold -- Sharefin, 01:35:14 10/30/02 Wed

SA gold refinery for Gulf project

A state-of-the-art gold refinery, utilising Mintek's Minataur hydrometallurgical refining technology, has been specified for a project at the Dubai Metals and Commodities Centre, a major new precious-metals hub that is being developed in the United Arab Emirates.

Gold -- Sharefin, 01:34:08 10/30/02 Wed

S.African golds race as market mulls Soweto blasts

A surge in gold shares fuelled by a weaker rand led the South African stock market to a positive open on Wednesday but caution ruled the day after a series of blasts rocked the sprawling Soweto township near Johannesburg.

"The currency is determining direction right now in the stock market. Obviously it's weakened because of the bomb blasts," said one trader.

Nine explosions rocked South Africa's Soweto township overnight, killing one woman. The explosions knocked fragile sentiment and sent the rand to its weakest level against the dollar in just over a week.

Gold -- Sharefin, 01:13:44 10/30/02 Wed

Business As Usual?

An investment allocation to gold and gold shares makes sense only if one does not expect an imminent return to the investment world of the 1990’s. Many who already believe that the odds of such a recurrence are slim still hold fast to the notion that a more favorable investment climate will be created by the still elusive economic recovery. “Business as usual” might not look like the 1990’s, but is there any need to think that the current morass will be sustained once a business recovery takes hold? Aren’t three years of declining equity markets enough? Three successive down years in the stock market was the limit even during the 1930’s.

History suggests that a return to more stable and friendlier financial markets is a distant prospect at best. Having suppressed the normal functioning of capital markets over the last two decades, the Federal Reserve and economic policy makers have set the stage for a protracted period of sub-par investment returns. Investment expectations at all levels remain excessive. The consequences of a further downshift in expectations would be to reinforce negative trends already in motion in the financial markets and the economy.

Investment expectations are central drivers of economic activity and asset values. While this observation seems almost too basic to ponder, most economic forecasts and market analysis ignore the subject altogether. Investment and credit analysis are most often viewed as quantitative in nature. Emotional and psychological factors at the individual, institutional and public levels are frequently ignored. However, at certain times, these inputs far outweigh rational calculation.

Author and MIT Professor Charles Kindleberger observes in Manias, Panics and Crashes (4th edition-p 91) that “expectations in the real world may change slowly or rapidly, and different groups may wake up to the realization----sometimes at different rates and sometimes all at once---that the future will be different from the past. The period of distress may be drawn out over weeks, months, even years, or it may be concentrated into a few days. But a change in expectations from a state of confidence to one lacking confidence in the future is central.”

Gold -- Sharefin, 01:05:22 10/30/02 Wed

IAMGOLD ups African stake in $339M deal Merges with Repadre

Gold miner Repadre Capital Corp. has agreed to combine with IAMGOLD Corp. in a deal some say marks a new phase in the consolidation trend in the sector.

Oil -- Sharefin, 01:03:55 10/30/02 Wed

Colin Campbell on Oil

Colin Campbell is both an academic and a businessman. Educated at Oxford and holding a Masters degree he has served as a geologist for Oxford University, Texaco, British Petroleum and Amoco (prior to the BP Amoco merger). He has served in executive positions with Shenandoah Oil, Amoco, Fina and was Chairman of the Nordic American Oil Company. He has served as a consultant on oil for the Bulgarian government as well as for Statoil, Mobil, Amerada, Total, Shell, Esso and for the firm Petroconsultants in Geneva. He is the Convener and Editor of the Association for the Study of Peak Oil and a Trustee of the Oil Depletion Analysis Center in London.

As a member of The American Society of Petroleum Geologists, The Geological Society of London, and the Petroleum Institute of London he has delivered more than 35 lectures on oil depletion on three continents. His hosts have included universities, governments, and auto manufacturers. He has been published more than 150 times in the field including the 1997 book "The Coming Oil Crisis" (Multi-Science Publishing Co. & Petroconsultants).

Before beginning this interview it is necessary for the reader to understand several critical factors about oil and oil production. All of these factors affect how much you or industry pays for oil, how much is available, and what this life-essential commodity can do. Almost every current human endeavor from transportation, to manufacturing, to plastics, and especially food production is inextricably intertwined with oil and natural gas supplies. Commercial food production is oil powered. All pesticides are petroleum based, and all commercial fertilizers are ammonia based. Ammonia is produced from natural gas.

All oil production follows a bell curve, whether in an individual field or on the planet as a whole. On the upslope of the curve production costs are significantly lower than on the downslope when extra effort (expense) is required to extract oil from reservoirs that are emptying out. The best and easiest to produce oil is always extracted first to maximize profits. In 100 years mankind has used half of all the oil on the planet, oil that took billions of years to produce and is the result of climactic conditions that have existed at only one time in the earth's 4.5 billion- year history. Oil is a non-renewable resource.

The key event in the Petroleum Era is not when the oil runs out, but when oil production peaks, especially as demand and population are rising. World per capita oil production peaked in 1979 and has been in decline since. The peak in volume of total world oil production is upon us right now, even as the demand or better said -- the need -- for oil is increasing rapidly.

Several things are a given. First the total remaining conventional oil on the planet is estimated to be around 1 trillion barrels. Second, at present rates (not those of five or 10 years from now), the world is using close to 80 million barrels per day. At the current rate there would be only enough oil to sustain the planet for another 35 years under the best of scenarios. But the oil that remains is going to be increasingly expensive to produce and it will tend to be of a lesser quality, necessitating higher refining costs, than what has already been used. All of those costs will have to be passed on in the form of price hikes or -- in some cases -- spikes. Oil price spikes invariably lead to recession. The world's economy is based upon the sale of products that are either made from oil or which need hydrocarbon energy (including natural gas) to operate, either via internal combustion or via electricity.

Different regions of the world peak in oil production at different times. The U.S. peaked in the early-1970s. Europe, Russia and the North Sea have also peaked. However the OPEC nations of the Middle East peak last. Within a few years they -- or whoever controls them -- will be in effective control of the world oil economy, and, in essence, of human civilization as a whole. Two of the nations that will peak last are Saudi Arabia and Iraq, both of which will not peak until the middle of the next decade. Saudi Arabia contains 25 percent of all the oil on the planet. Iraq contains 11 percent of all the oil on the planet.

Science and the oil industry have confirmed that there is very little oil left to be found, certainly not enough to make a difference in this grim picture, a picture which goes a long way toward explaining the events of 9-11 and since.

------
Not only is the above going to impact the POG strongly over the long term but also a similar problem exists with gold.

Production peaked & likely never to regain past heights.
Depletion of major orebodies - exploration declining.

Fiat -- Sharefin, 00:52:10 10/30/02 Wed

Don't Count Too Much on Central Banks

The notion that a central bank can mitigate the pain of business cycles and avoid depressions, an article of faith especially during the "Greenspan" era, is both untrue and counterproductive. We should return our thinking about central banks to a basic truth: They can achieve price stability; they cannot and should not fine tune the economy and stock markets.

Gold -- Sharefin, 00:46:16 10/30/02 Wed

Gold sold under Washington deal at 60% of total

Marking the third anniversary of the Washington Agreement on Gold (WAG), the World Gold Council (WGC) reports that total sales under the agreement so far (from October 1999 to September 2002) amounted to 60% of the 2000 t scheduled for its five-year term.

This figure translates into 1 197 t sold, with Switzerland having sold 603 t, the UK 345 t, Netherlands 136 t, Austria 90 t and Germany 23 t.

Considering that Germany’s gold sales resulted solely from the demand for gold for the minting of commemorative coins, its reported sale of 23 t seems high, yet the WGC says it reflects the strong demand for the special D-mark coins as the national currency was replaced by the euro.

Swiss gold sales under WAG reflect 283 t sold in the third year, 200 t in the second and 120 in the first year. The total of 603 t sold raised just over $6,1-billion. The Swiss National Bank announced plans to sell a further 283 t in the fourth year of the agreement.

This plan would leave the Netherlands, the only other major seller with gold to dispose under WAG, with a possible 117 t to sell in year four.

It is predicted that the remaining 803 t of gold, under the agreement, will be sold by Switzerland and the Netherlands, with 639 t and 164 t respectively, between October 2002 and September 2004.

The WGC also reports that Gold Fields Mineral Services (GFMS) estimates gross gold sales, by the official sector in the first half of 2002, amounted to 304 t. Of this, 231 t came from central banks operating within WAG - 138 t coming from Switzerland alone. The balance, of almost 70 t, came from a dozen countries, with China easily being the largest seller among them.

For the same period, gold purchases are put at 14 t, with Russia accounting for four tons and the Philippines for eight tons.

The WGC also reports that assurances that there will be no German gold sales during the duration of WAG have been reinforced. This was demonstrated in August when a proposal to use gold sales to help finance recovery from summer floods in Germany was quickly rejected.

Yet the Bundesbank has not ruled out the possibility of gold sales after September 2004, despite an increase in conditions surrounding this move. This has lead experts to speculate that the Bundesbank wants to keep open an option to sell, but then only in small amounts.

Meanwhile, the WGC says the failure to agree on the utilisation of proceeds may harm the popularity of Swiss gold sales. In September, the Swiss voted on two alternative proposals for using the proceeds from sales of 1 300 t of the Swiss National Bank’s gold reserves.

One proposal recommended a three-way split between the Swiss Federation, individual cantons and a philanthropic fund. The alternative suggested that the proceeds be channeled to support the country’s pay-as-you-go pension scheme. Both proposals were rejected with strong majorities, so deliberations are back at the beginning.

On the other hand, Asian central banks will buy more gold as their economies expand, the WGC reports.

Foreign exchange reserves of many Asian central banks are expected to continue to build up quickly after the Asian crisis, thus even to maintain today’s proportion of gold in the reserves, gold purchases would have to increase.

The WGC says that China’s reserves, in particular, are growing very rapidly. According to official figures, China’s foreign exchange reserves stood at $246,5-billion at end-July, up $34,3-billion since the start of the year. Figures reported to the International Monetary Fund show that over the last year the People’s Bank of China increased its gold holding by 105 t to 501 t at end-December last year, some two percent of total reserves.

Commenting on how Austria manages its gold reserves, the WGC says the Austrian National Bank has voted in favour of the renewal of the central bank agreement. Austria has been a steady seller of gold for a number of years. In the late 1980s, the country held 657,7 t of gold, just more than double its current holding of 315,5 t.

Recently, the WGC reports, 90 t of the total gold disposed was sold under WAG - 30 t in each of the three years.

Austria considers gold to be an important asset class for the central bank reserves. In addition to gold, the bank primarily holds dollars and, in recent years, returns on dollar-denominated assets have been superior to those on gold. Bearing in mind the relative risk of the two asset classes for a euro-based economy, this led to the conclusion at the start of WAG that the bank should sell the 90 t.

Gold -- Sharefin, 00:44:01 10/30/02 Wed

Legislate internal BEE - Gold Fields

The legislation of wider use of pension plans, mutual funds and equity ownership among employees of mining companies would provide true black economic empowerment (BEE), according to Gold Fields chairman Chris Thompson, who said in the group’s annual report that white ownership of South African mines was a myth. Thompson was responding to the leaking and redrafting of the BEE charter earlier this year in which South Africa’s government posited the view that the industry was the property of “white mine owners”.
“The language of the draft charter posits that the industry is the property of the “white mine owners” and that transfer of ownership to black empowerment groups is a highly desirable event. Even if it were achieveable, financially or economically, transfer of ownership in and of itself will do nothing for job creation or alleviation of poverty in South Africa,” Thompson said. Gold Fields published its annual report for its 2002 financial year this morning (30 October).

Gold -- Sharefin, 00:41:32 10/30/02 Wed

Durban Deep ripped on accounting

BOE Securities (S. Africa) does its best to keep analyst reports from wide circulation, but Mineweb has landed a fascinating examination of Durban Deep’s [DROOY] third quarter results by mining analyst, Gary Pearson.
Distributed to BOE clients earlier this week, the report is a no-holds barred dissection of the results that flips most house views upside down. “Don’t take the numbers at face value” is the headline for a section that goes on to warn that the doubling in headline earnings per share for the three months to end September could not disguise a poor quarter.

Gold -- Sharefin, 00:39:09 10/30/02 Wed

Another royalty pure-play set to go in $223m deal

Gold royalty companies have done especially well for shareholders during the recent run-up in the gold price, but only one significant option - Royal Gold [RGLD] - will remain on the boards once Iamgold [IMG] and Repadre Capital [RPD] close their merger.

It won’t go unnoticed that the deal is in many ways a mini Franco-Nevada / Newmont.

Gold -- Sharefin, 00:36:39 10/30/02 Wed

Gold price boosts Ashanti Q3 earnings

African gold miner Ashanti Goldfields Co Ltd reported a surge in third-quarter earnings on Tuesday, boosted by the high price of gold.

The Ghana-based miner, which has overhauled its debts with the backing of major shareholder Lonmin Plc, reported net profit before exceptional items of $22.5 million for the three months to end-September, up 55 percent from the same period last year, helped by lower interest charges.

Ashanti's hedge book -- the source of its financial troubles in the past -- was in loss to the tune of $46.0 million at end-September, based on a spot gold price of $323 per ounce.

The firm said it had limited the exposure of its forward sales book to movements in volatile lending rates, reducing its exposure by 1.6 million ounces to 2.78 million.

It also paid off $33 million of its revolving credit, leaving that facility at $157 million.

"Earnings are up, it's paid some debt down, and it has reduced some of the lease exposure on its hedge book. That's all positive, making a solid quarter,"

Gold -- Sharefin, 00:33:09 10/30/02 Wed

Not sure yet but it looks like the price action of gold & silver (vs. the US Dollar) are pointing the way forwards.

A close look at daily/weekly/monthly charts of the two metals (not to mention what platinum is doing.(:-)))) as well as the various gold indices shows that the trend is turning up again and we're about to move forwards from prior levels. COTs are also supporting a move upwards.

Gold
Silver
US Gold
Global Gold
Australian Gold
Canadian Gold
SA Gold

Perhaps the contrarian view of this move up in the metals is that the general markets are to move downwards and that the rise in the metals will come about because of a sell-off in US Dollar & equities and hence gold will yet again perform it's age old job of being a meter of financial confidence.
~ ~ ~

My swing chart is showing that we're topping out on the up cycle, which could well show a sell cycle occurring - either the markets tread water with little upwards momentum or we sell-off.

Though I can't see a long term sell signal in the formation I will point out that at the moment volatility is extreme and indicative of large moves. Theoretically we should have another one or two cycles before we get a major sell cycle signal but with the markets in the current state anything could trigger a break from the normal.

This could mean a sell-off that doesn't take out the prior lows and then another rally that fails to take out the prior highs. This would then have the markets set up in price & psyche for a major fall - a move downwards that would make the sell-off earlier this year look tame.

If we do get this crabbing (down & sideways) action in the markets then I would expect the progressive waves to take a few months to unfold prior to this major sell-off. But if they bolt the gate then all bets are off.

Regardless of the guessing game the POG is signaling that the action is soon to begin....alllllll aboard.....

Swing Chart

Gold -- Sharefin, 00:22:17 10/30/02 Wed

News of SA gold expansion projects expected

WILL it be a case of saving the best or worst for last? SA's two biggest gold companies are preparing to round off the third quarter reporting season, with AngloGold presenting its figures to the market on Thursday and Gold Fields following a week later.

Of the three gold miners that have already reported, Durban Roodepoort Deep and Armgold showed an increase in earnings from the second quarter, and Harmony a decline.

The average rand gold price was lower as the rand firmed and the dollar price softened, and in all three cases earnings were compromised by sharp increases in the costs of production. This was mainly as a result of soaring "factory gate" inflation, which is currently at a 13-year high.

There is more pain in store for some during the coming couple of quarters as wage negotiations come to a head. Mining sector settlements have averaged about 9% so far, and since wages constitute about half of total costs, the additional burden will be significant.

Silver -- Sharefin, 01:25:48 10/28/02 Mon

Newmont, Debt & Derivatives

They are down much more than $6,500,000 charged to earnings. What is not obvious to many in the announcement (because many do not understand accounting) is, IMO, that very large addition to long-term debt ($145,000,000) is the financed ("no margin") margin call. The revenue effect of the underwater gold short is booked to the gold price (as a reduction in potential revenue) and not realized as a loss yet. That is proper in today's accounting world treatment of such an event would increase debt now, but not yet decrease revenue. That appears to me what, in accounting terms, has happened. I believe that the losses on the open hedges will not be realized until the point of delivery of gold against the gold derivative sale or financial closure of the commitment. That is how the accounting directive approaches these gains or losses.
You may recall that Newmont announced earlier this year that they had a $400,000,000 loss on the Australian acquisition's hedge position. Gold is $311 today. When the $400,000,000 loss was announced, the loss was calculated at $314. Some of those hedges have gone away. Much of it remains. I do not see how the loss on the now Newmont gold short position, then announced, could have changed much. As gold rises, which I firmly believe it will, these losses will grow and margin financing will continue to become larger. Therefore the long-term debt of these gold producer hedger entities will continue to grow. At the same time, future revenues will be compromised further. Eventually the balance sheet of the major gold producer will deteriorate in terms of liquidity vs. liabilities. At some point, the major gold producer hedgers practicing this approach to handling the gold derivative short positions and accounting in this manner will, IMO, suffer credit downgrades "as to counterparty risk" just like JPM. It is my opinion, based on experience, that you cannot count on banks continuing to loan huge amounts to finance a bad commodity positions regardless of present agreements. Bank ownership is changing.

Remember: No major bank goes broke. They simply merge away.

New bank management may not be so willing to finance billions of dollars in margin calls into future delivery. Banks have lending ratios and borrower credit status ratings that they as lenders must adhere to. Nothing is forever in finance especially credit lines.

I can foresee a situation where multibillion dollar losses are going to have to be realized by major gold producers due to the gold producers deteriorating balance sheet or a downgrade of the gold producers credit status or a bank's own liquidity situation or the original derivative-granting financial institution's merger with a surviving financial entity not so friendly to commodity lending, the effects of which could kill an Elephant.

These derivatives remain, for the gold industry, like a huge financial Asteroid headed right at them.

Yes, for the gold industry leading hedgers, this situation is a Global Killer.

Silver -- Sharefin, 01:23:45 10/28/02 Mon

All that glitters is not gold

When the Bureau of Indian Standards launched a survey last year on the quality of gold jewellery in the country, it found that only 250 jewellers had taken the BIS licence to get their jewellery Hallmarked. Today, that number has almost doubled.

It is well know that even though the Centre introduced Hallmarking in April 2001, to authenticate gold purity by a third party other than the jeweller, the scheme has not had many takers.

Then, last year, the BIS joined up with consumer groups, bought ornaments from a total of 120 jewellers in eight cities and got them tested. The results showed that 88 per cent of the jewellers surveyed had sold gold of lesser caratage or purity than claimed or promised.

Now, the BIS must go further. As rural India accounts for nearly 70 per cent of the gold consumption in the country, it should now conduct extensive gold quality surveys in rural areas. That will not only give an indication of the extent of malpractice in this trade in the villages, but will also help create quality consciousness among rural consumers.

BIS' proactive role should not end with the gold survey. It should take up similar market surveys on other products. Silver, for example.

Silver -- Sharefin, 01:09:30 10/28/02 Mon

The benevolent ruler

The plan to introduce silver by degrees into circulation in our country, Mexico, is a plan that puts the benevolence of our rulers to the test.

When the governed enjoy a silver currency, they have tranquility and peace guaranteed by the possession of money of enduring value. Each has his own future in his hands, as a result of the permanent value of silver: the center of gravity of each, is within himself; neither the individual, nor the country itself, is alienated from its center of gravity.

The silver coin is a reality, not an abstraction like paper (fiduciary) money that is irredeemable in metal, be it silver or gold. Mental illness is the failure of the mind to relate coherently to reality. When the money that a nation uses is nothing more than an abstraction, psychic illness spreads, the population loses its bearings and disorder prevails in all aspects of life. In a word: society becomes alienated.

The ideas that seduce mankind today are not benevolent. Real money of silver or gold is rejected because it implies benevolence on the part of the rulers, and today’s ideas are not benevolent, they are malevolent - “evil wishing”. The governed are not to be offered “tranquility and peace”, rather they are offered fraud and pillage. The attitude that prevails today amongst rulers and the intellectuals that cater to them, is that the governed are to be administered, in order to improve them. We are not accepted such as we are, rather there is a desire to see us made differently, to put us into a mold that they, the rulers, consider better.

Gold -- Sharefin, 01:05:02 10/28/02 Mon

The 5 Elements for a Long-Term Bull Market in Gold Now Have a Nuclear Wild Card

I am however starting to think that the plan for the Gold Dinar and support from other Islamic nations is a planned offensive against the use of the dollar as a settlement currency for oil. It is perceived, and correctly so, that the Islamic world is controlled via the use of the US dollar as the main settlement currency. When I say "controlled" I mean whatever happens economically in the USA is exported there via the dollar. Dollars exchanged for the Gold Dinar currency as a measure for gold settlements quarterly or gold convertible to pay for certain oil imports would end all the debate of whether or not gold has a place in the monetary system.

What we are hearing now is that the Gold Dinar will be used as a "measure" settled quarterly in gold on an Islamic intra-nation basis, but that could change quickly. A review of the trade balances of Malaysia and its intra-Islamic trade partners indicates that if the Gold Dinar is employed as now suggested, it would tie up approximately 200 tonnes of gold production equal to 10% of new mine supply. If Malaysia went all the way and went to convertibility with a 15% gold cover, they would utilize more than 300 tonnes of new production. Either way, this is the Wildest of Wild Cards for Gold.

The advent of the Gold Dinar, as now envisioned, would remove any discussion of whether or not we are embarking on a very long-term bull market in gold. I have already told you that I believe this is not just a gold recovery, not just a gold bull phase, not just a gold bull market, but the advent of the return of gold to a monetary application in which gold will be in a bullish posture on balance for the rest of my life.

Silver -- Sharefin, 01:01:34 10/28/02 Mon

Here We Go Again

But if silver is not down in price because of China or because we don't have a deficit, then why is it down? Silver is down because of the continued manipulative trading practices on the COMEX, the worlds largest, and I would claim, only silver exchange. Please allow me to try and prove my allegation, one more time, and at the same time, bring you some very good news. I will base my proof on the weekly Commitments of Traders Report (COT), issued by the Commodity Futures Trading Commission (CFTC).

Silver -- Sharefin, 00:57:51 10/28/02 Mon

IS THE SILVER LIE READY?

Periodic Ponzi Update PPU -- $hifty, 23:14:15 10/27/02 Sun

Preiodic Ponzi
Update PPU

Periodic Ponzi Update PPU

Nasdaq 1,331.13 + Dow 8,443.99 = 9,775.12 divide by 2 = 4,887.56 Ponzi

Up 82.52 from last week.

Looks to me like their rally is just about done.

Thanks for the link RossL

Go GATA
Go Gold

$hifty

Gold -- Sharefin, 21:31:01 10/27/02 Sun

Greg
The gold indices look to be comfirming the formation as well.
I would have liked to see a spike down first to clear the downtrend but it doesn't look like we will get it.
<:-)))

Fiat rumours -- Sharefin, 21:29:07 10/27/02 Sun

POTENTIALLY EXPLOSIVE INSIDE NEWS -- $170B JPM FRAUD

Fiat -- Sharefin, 21:26:09 10/27/02 Sun

U.S., JAPAN, GERMANY BANK SYSTEMS MELTING DOWN

The banking systems of the United States, Germany and
Japan--which possess up to two-thirds of the assets of the
world's banking system, are now in meltdown.

Even though the U.S. government
has been faking figures all along--and the Bush
Administration right now is lying as much as possible on
this--the fact is that recently released U.S. bad-debt figures
give some idea of the crisis. (Maybe someone has a sense of honor
and/or maybe the bookeeper for the mob is putting out a signal!)

* United States. The yearly debt report for the
U.S.--"Shared National Credit Review" (Oct. 8)--put out jointly
by the bank regulatory agencies of the Federal Reserve, the
Office of the Comptroller of the Currency, and the Federal
Deposit Insurance Agency, gives figures for a spectacular rate of
increase in U.S. bad bank loans. Between 2000 and 2002, the
percentage of loans that are classified as troubled ("adversely
rated") has more than doubled. Of the $1.871 trillion in loan
commitments that financial institutions have made in the United
States, 12.6% are "troubled/adversely rated," compared with 5.1%
in 2000. Then there's the pattern where so-called U.S. banks have
abandoned the traditional way of banking--making loans, to the
point where now banks' holdings of investment securities
(corporate bonds, mortgage-backed instruments, etc.) exceeds
their level of business loans. Then come the derivatives: As a
whole, U.S. banks have notional derivatives holdings 81 times
their equity capital, 13 times their loan portfolios, and over
seven times their asset base.

* Japan. The third largest banking system
"reorganization/bailout" since 1998 is being attempted, because
of non-performing loans in the range of $1 trillion.

* Germany. The risk premiums on the debt of banks exploded
in late September, as the creditworthiness of the entire German
banking sector itself is in question.

"Never in post-World War II memory, have the
banking-financial systems of the three major economic powers--the
United States, Japan, and Germany--experienced such crises
simultaneously. Combined, these banking systems possess between
two-fifths and two-thirds of the assets of the world's banking
system. The breakdown conjuncture of these nations'
interconnected bank systems defines a crisis point of the world
financial system...."

"Exemplifying the American banking system's overall crisis
is the giant J.P. Morgan Chase Bank's evaporation. On Oct. 9,
Moody's Investor Services cut its rating on Morgan Chase's
long-term debt, by one notch, down to ``A1,'' which is its
fifth-highest grade. This affects the rating on $42 billion of
Morgan Chase's long-term debt. J.P. Morgan Chase, with $713
billion in assets, is the world's leading derivatives bank, with
$26 trillion in such highly leveraged bets. Since the start of
2001, Morgan Chase's market capitalization has gone down from
$106.5 billion to $33 billion. Morgan Chase is undergoing a death
seizure which mirrors that which Enron experienced during 2001,
where each month, it shrinks further.

"Morgan Chase Chairman William Harrison has announced that
he plans to fire 20% of the bank's investment banking division,
which employs 20,000 people. (This would bring the number of
workers fired at all divisions of Morgan Chase to 14,000 since
the merger of J.P. Morgan and Chase Manhattan banks in December
2000.) On Oct. 9 the {Financial Times} reported a joke making the
rounds on Wall Street, to the effect that a newspaper headline
will soon appear, reading, ``J.P. Morgan To Cut Workforce 120%...''

* "Derivatives Losses Reveal Bankruptcy of the U.S. Banking
System, by Hoefle, notes: "As a whole, U.S. banks have notional
derivatives holdings 81 times their equity capital, 13 times
their loan portfolios, and over seven times their asset base....
However, while the banking system is dominated by this
derivatives bubble, the vast majority of these derivatives are
concentrated in just a handful of banks ({{Figure 3}}). J.P.
Morgan Chase alone had $26 trillion in derivatives as of June 30,
2002, some 50% of all the derivatives held by U.S. bank holding
companies. Bank of America held over $10 trillion, or 20%, while
Citigroup held $9 trillion, or 18%, giving these three
institutions together 87% of the total....

Encouraging signs for Gold -- Greg, 13:24:12 10/26/02 Sat

Possible A-B-C correction complete and trend reversal in the works.

Bob Chapman - International Report -- Sharefin, 07:23:46 10/26/02 Sat

GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
We repeat for new subscribers: sell the hedgers. That means Barrick, Placer Dome, Newmont, Anglo-Gold and the Australians, particularly Sons of Gwalia, which has run into a host of problems, such as lower grade, as Barrick has had. We said seven years ago that these mines, which were high grading, would run into trouble eventually and we were right. It could be with lower grade and higher gold prices that most all of these hedgers could not deliver against their derivative contracts. If that happens bullion banks will go bust and that could bring down the entire derivative structure. Gold is a linchpin and once pulled the financial carnage will be unstoppable.
Why hasn’t Comex gone back to regular hours over a year after 9/11? Is it because it makes it easier for the bullion banks to rig the market? What happens when one or two big players demand delivery of physical gold or silver? If the exchange settles for cash it destroys the whole market on Comex and everyone will then move to other legitimate exchanges.
As we know JPM has a vested interest in lower or stable gold prices due to its preeminent position as leader of the gold manipulation cartel and that they have large short positions in gold derivatives in collusion with central banks. Elaborate schemes have been considered and used since the late 1980s to free up the value of gold in order to continue a fiat money system. Now that gold sales and leasing by central banks is less of an option they have resorted to false bookkeeping, such as, you lease your gold, which in actuality has been sold by another party, and you still carry it on your books as an asset. Not only do Morgan’s derivative positions in gold and other areas look dangerous, so does the market’s opinion of Morgan. When we looked at their fundamentals and the chart patterns at $56.00 a share we knew then that other large investors saw the same thing we did. They sold and we went short. We now also may be looking at the bursting of the bond bubble if the 10-year notes activities last week are any indication, having jumped from 3.59% to 4.26%. If that happens Morgan would be in additional serious trouble having written a huge number of interest rate swaps. Incidentally, we are sure the fall in 10-year notes and the rise in yield was in part caused by Fannie Mae getting its books straight. We figure they had to buy $200 billion in 10-year Treasuries. We knew they bought $60 billion worth and they may well have been a buyer as foreigners and other hedgers were sellers. We’ll find out in time. All we know is it looks like yields want to go higher. As a sidestep 30-year mortgage rates have jumped by 1/2%, which kills a lot of refinancing, which in turn cuts into additional consumer liquidity. There are going to be massive debts out there that are never going to be repaid, which puts enormous volatility pressure on derivatives causing huge losses similar to what happened with LTCM in 1998. Morgan has $20 trillion in derivatives on the books. The amount is beyond comprehension. It can only be that Morgan is acting for the US Treasury and the Federal Reserve. How could any sane banker put itself at $200 billion in real risk? Morgan couldn’t without the collusion of those elitists who run our country. Morgan’s exposure to litigation could run easily over $20 billion. How would they pay such judgments? They’d go bankrupt of course and then be resuscitated in reorganization by the US Congress, but their failure would allow gold to trade freely again. Thus, the demise of Morgan is very important to the future of gold.
More bullish news. The short position on Crystallex has increased from 734,360 in November 2001 to 2,385,660 shares as of October 2002. This is similar to shorts in other gold and silver stocks. We are also seeing shorting on all the 20 to 60 cent recommendations. Once this market turns and these shorts have to cover, it will be explosive.
Marxists and other former prisoners such as, Tokyo Sexwale are straining at the bit to take advantage of South Africa’s new improvement charter, which calls for 26% of all mines to be owned by blacks within 10 years. The new mining charter calls for at least 15% of mines to be black-owned within five years. The black recipients, of course, are all ex-freedom fighters as in Zimbabwe. The law, as we warned two years ago, is a slow nationalization of the mining sector, which will deprive investors of the full fruits of their investments. It leaves open to negotiation black participation in any new mining ventures. Existing mining groups are setting up a 100-billion rand fund to bankroll the improvement initiative. Shareholders of South African gold and platinum shares, that is your money that is being given away to a group of people who spent their nights murdering white South Africans not so many years ago. That group included Mr. Tokyo Sexwale and Nelson Mandela, South Africa’s new saint. The first indications were that the ruling black Africans wouldn’t take 51% of all mining companies within 10 years and that state organizations should provide funding and warehouse the companies’ shares. Are you not relieved shareholders that they are only going to take 26% of your investment? How gracious of the government. If you haven’t sold your South African shares already, do so. We lived in South Africa for several years and we can promise you your investments will be destroyed. We strongly urge you to switch to unhedged North American producers such as *Agnico-Eagle (AEM-NYSE) and *Goldcorp (GG-NYSE.)

HONG KONG, Oct 18 (Reuters) - Physical gold dealers in Asia gave a mixed picture of demand on Friday, with Hong Kong firms unable to fill the flood of orders while Singapore and Malaysia reported only a mild pick-up in demand ahead of the holidays.
With the steady fall in the price of bullion this week, refineries and gold bar dealers in Hong Kong have run out of stock of good delivery kilobars bars.
"There is no stock. We have checked with Johnson Matthey and Lee Cheong and they don't have stock. They can't supply the market," said William Leung, a dealer at Standard Bank London in Hong Kong.
Dealers in Hong Kong were quoting premiums of US$0.15-0.20 an ounce over loco London prices, a turnaround from discounts of US$0.05-0.10 last week.

----
SUBSCRIPTION INFORMATION: 1-year $99.95 U.S. Funds. Make check payable to Robert Chapman, (NOT International Forecaster), and mail to: P. O. Box 510518, Punta Gorda, Fl 33951. Please include name, address, telephone number and email address. We accept VISA and MasterCard charges. Please provide us with your card number and expiration date. We will charge your card $99.95 for a one-year subscription. Please note, we publish twice a month by surface mail or 3-4 times a month by email. Our email is: bif4653@comcast.net or info@intlforecaster.com.
For new or renewal subscriptions please contact 941-639-0619 or the above email addresses.

Gold -- Sharefin, 07:18:53 10/26/02 Sat

Comex Gold Depositories

Someone just removed 8% of the CME gold deposits.
Yesterday = 1945263oz
Today = 1794127oz

Someone just removed 151136oz of gold...

Gold -- Sharefin, 23:22:49 10/25/02 Fri

Introducing the Islamic Dinar and Dirham

Using the Dinar & Dirham
Gold and silver are the most stable currency the world has ever seen

From the beginning of Islam until today, the value of the Islamic bimetallic currency has remained surprisingly stable in relation to basic consumable goods:

A chicken at the time of the Prophet, salla'llahu alaihi wa sallam, cost one dirham; today, 1,400 years later, a chicken costs approximately one dirham.

In 1,400 years inflation is zero.

Could we say the same about the dollar or any other paper currency in the last 25 years?

In the long term the bimetallic currency has proved to be the most stable currency the world has ever seen. It has survived, despite all the attempts by governments to transform it into a symbolic currency by imposing a nominal value different from its weight.

Reliability

Gold cannot be inflated by printing more of it; it cannot be devalued by government decree, and unlike paper currency it is an asset which does not depend upon anybody's promise to pay.

Portability and anonymity of gold are both important, but the most significant fact is that gold is an asset that is no-one else´s liability.

All forms of paper assets: bonds, shares, and even bank deposits, are promises to repay money borrowed. Their value is dependent upon the investor's belief that the promise will be fulfilled. As junk bonds and the Mexican peso have illustrated, a questionable promise soon loses value.

Gold is not like this. A piece of gold is independent of the financial system, and its worth is underwritten by 5,000 years of human experience.

Gold -- Sharefin, 22:46:02 10/25/02 Fri

PARADIGM SHIFT

As more and more wake up to the utter fraud of paper money, it will be 1980 again, in spades. Gold's peak in 1980 of $850, multiplied by 4 would be $3400, and silver's $54 would be $216 per ounce in today's diminished buying power dollars. Will it be a good idea to sell gold and silver when they reach $3400 and $216, which would be comparable to 1980's peak? Yes, if the economy is still holding together, but not if every other price has quadrupled, as this would mean you have hedged yourself well, and preserved your assets, but selling then, with all other prices having quadrupled, would be throwing your hedge away, while inflation still rages. If prices have only doubled, and gold and silver quadrupled, it might be wise to sell, and I wouldn't discourage it.

Gold -- Sharefin, 03:11:50 10/25/02 Fri

Barrick Sees Its Share Of Total Hedging Market Declining

Barrick Gold Corp. expects its 15% to 20% share of the world's estimated 100-million-ounce gold hedging market will drop as the company reduces ounces committed under its hedges, Barrick chief financial officer Jamie Sokalsky said Thursday.

Barrick is in the hedging market every second day, on average, as it rolls over contracts, he said.

The company's forward sales position was 16.9 million ounces at the end of the third quarter, and it plans to cut that position to 12 million ounces by the end of 2003.

The mark-to-market value of Barrick's gold contracts was negative $301 million at the end of the quarter, at a spot gold price of $324 an ounce, but the mark- to-market value would approach zero, or breakeven, at a gold price of $307 an ounce, the company said.

----
Seems to me that Barrick would welcome a drop in price back to $307...^o-o^.....

At the above rate it shows that a 6% drop (from $324 to $307) in the price of gold drops Barrick's mark to market value from negative $301 million to zero.

In reverse does this mean that an increase in the price of gold from $307 (where Barrick's mark to market reads zero) up to $364 (a 19% increase) would increase Barrick's mark to market value up to $1 billion.

Or do the formulas involved become more parabolic as the price rises.

Gold -- Sharefin, 00:25:52 10/25/02 Fri

White Paper on Islamic Bimetallic Currency

Here's a copy of the full version of the paper.

Fiat -- Sharefin, 23:18:23 10/24/02 Thu

Robert Prechter predicts crash

Financial forecaster Robert Prechter, author of "Conquer the Crash," speaks with Thom Calandra about his prediction that a period of deflationary depression is imminent and what investors can do to protect their portfolios. (Part 1 of 2)

Presented on video stream

Gold -- Sharefin, 23:14:26 10/24/02 Thu

Goldcorp admits aborted acquisition

Ever adventurous and with money to spend, Goldcorp [GG] admitted during today’s investor conference call that an unusual entry on its cash flow statement related to an aborted acquisition attempt.
Explaining the “in-out” transaction, Goldcorp chief executive Robert McEwen said: “Our investments have been designed to look at strategic investments where we can grow. We took a position in a company where we thought there was an opportunity. We looked at it more closely and decided that opportunity didn’t exist, so we sold out; at a profit.”

The amount was significant at $121 million, which meant that half the company’s cash pile (the balance sheet boasts an additional $57 million worth of gold bullion) to build up its position in the target, which is though to be Placer Dome [PDG].

It’s no secret that Goldcorp is shopping for assets to bulk up, but not all analysts were comfortable with this particular deal which hails too close to the company’s portfolio management roots than its present incarnation as the poster child for gold stocks.

Goldcorp is an arch opportunist though so it should not come as too much of a surprise, especially since this is not this year’s first adventure. In a lengthy interview with Mineweb, due for publication in the next fortnight, McEwen admitted that the second quarter’s purchase of gold bullion at an average price of $323 per ounce was a test of the physical market. “I was curious to see what the breadth of the market was,” he said, adding that he had inquired of a bullion bank how long it would take to acquire 20 tonnes of gold. The answer was two days, so he put in an order for just 6% of that tonnage and ended up waiting two weeks for delivery and a 50% increase in the spread.

Gold -- Sharefin, 22:49:00 10/24/02 Thu

Apparently the Murabitun website has gone down or been taken out.
It occured just after the release of this paper.

The paper is titledWhite Paper on Islamic Bimetallic Currency

And I managed to source this copy (minus a bit missing off the end) from my cache.

White Paper on Islamic Bimetallic Currency

Gold and silver restore social equilibrium

The dinar and the dirham can be the world currency of all free people

Headlines

The schism that divides the defenders of gold and silver and their adversaries is not only utilitarian but also philosophical. The defence of gold and silver is solidly based on some fundamental considerations of political philosophy that the defenders of artificial currency cannot ignore.

"Money is not an invention of the State" wrote Menger, "nor is it the product of a law-making act. For its existence the sanction of political authority is not even necessary"
Money is the product of the division of labour and of the economy of exchange that man has established. When the traders intended to exchange their goods and services for other more commercial goods the precious metals appeared as the best choice and became the currency for the majority of people. Gold and silver had value because they satisfied the needs of man. Contrary to what happened to other useful merchandise, they were easy to fraction, could be transported at low cost and kept safe with relative ease.

For around 2,500 years the universal currency was made up of small pieces of gold and silver called coins. They survived for two millenia despite the numerous attempts by many governments that tried to manipulate them and replace them with their own medium of exchange. This perception of the very nature of currency and the characteristic of precious metals at the service of the economic exchange leads us to think that gold and silver will probably survive another two thousand years, and somehow or another, the gold standard will prevail a long time after the present eruption of artificial national currencies have been forgotten, or only remembered in the museums of numismatics.

The choice of currency is a matter of crucial importance. Do we want a system where the government will issue and manage the currency by means of the political and economic process? Or do we prefer that the people's own decision makes the choice? If we entrust it to the government and financial institutions then we must be ready to live with an artificial currency, which is ideal to serve political purposes. It can be expanded and contracted at will. Always according to the policies and economical suitability of the moment. But above everything it can be inflated at will to complement the tax income.

On the other hand if we allow people to make their own free choice, it may well happen that they choose as a medium of exchange a great variety of trading goods. In the past, through a selective process of several thousands of years they chose precious metals ;gold and silver; as currency. They will probably choose the same if the are given the freedom to do so. Imam Malik, the great Imam of Madina in the early period of Islam, stated: "Money is any merchandise commonly accepted as a medium of exchange". Thus through the testimony of one of the greatest Islamic Imams, the position of Islamic Law clearly stands in defence of the freedom to choose among all merchandise rather than the imposition of an artificial currency.

Bimetallic currency is a natural currency as oppossed to the artificial one. There is no need for an Islamic government to establish a bimetallic currency by means of a deliberately legal act. In fact, the bimetallic currency, does not need rules or regulation, laws or official control. It only needs the individual freedom to possess and use gold and silver coins with an implicit elimination of all taxes impossed on their use. There is no doubt that the freedom to possess gold does not only mean the freedom to buy it and sell it for industrial purposes but also the freedom to use it as a medium of exchange.

Using bimetallic coins means to have a healthy currency. It means that the value of the currency is independent of the government. It is true that it can not provide us with the unattainable ideal of an absolutely stable currency, but it protects the monetary system from the influence of governments and financial institutions, because the existing stocks of gold are independent of the desires and manipulations of the political and financial system.

The bimetallic coins as international currency were in the past the product of an evolution that occurred naturally without the need for institutions or treaties between governments. Nobody had to take care to make them work as an international currency. When the main nations of the world adopted it as a currency, the world found that it had a world currency. It is true that the different currencies had different names and various weights. But that did not matter much, since all of them were made of gold or silver and they could be interexchanged freely. After all, an ounce of gold is an ounce of gold whether minted in the form of sovereign or eagles.

The bimetallic currency united the world because the payments between nations ceased to be a problem. It facilitated trade world-wide and promoted, with it, a division of labour on a world scale. The nations specialised in the merchandise for which they enjoyed greater advantages in the international market. But above everything, the bimetallic currency, stimulated the export of capital from the industrial countries to the undeveloped areas. Without the fear of loss through devaluation or restriction in transfers, European and Muslim capital earnestly sought profitable opportunities in all the continents. As a result, trade and industry improved the conditions of working and life world-wide.

Gold cannot be inflated by printing more of it; it cannot be devalued by government decree, and unlike paper currency it is an asset which does not depend upon anybody's promise to pay. Portability and anonymity of gold are both important, but THE MOST SIGNIFICANT FACT IS THAT GOLD IS AN ASSET THAT IS NO-ONE ELSE'S LIABILITY. All forms of paper assets: bonds, shares, and even bank deposits, are promises to repay money borrowed. Their value is dependant upon the investor's belief that the promise will be fulfilled. As junk bonds and the Mexican peso have illustrated, a questionable promise soon loses value. Gold is not like this. A PIECE OF GOLD IS INDEPENDENT OF THE FINANCIAL SYSTEM, and its worth is underwritten by 5,000 years of human experience.

It may be that the return to the bimetallic currency will be an arduous and prolonged task. Since it was lost through a gradual erosion of monetary freedom, perhaps we ought to reconquer it slowly and painfully going upstream back to freedom. This is the reason why we do not seek a law of reform or a law of restoration, nor a conversion or a parity, we are satisfied just with freedom. This is a short and direct path. It may take us years to tread this path and that will depend upon the resistance from ignorance and public prejudice and the greed and love of power of financial institutions. The government may for that reason take some stages in the path, which will offer new challenges that invite the supreme effort to restore freedom.

Headlines for an Implementation Programme:
Issuing and minting of dinars and dirhams according to the traditional standard weights and measures.
Total freedom to buy, sell and possess any quantity of dinars and dirhams within Islamic Law.
Facilitating the transport and transferral of gold for international trading by a network of appointed agencies throughout the world.
And finally, changing all paper notes for newly minted dinars and dirhams, and abolition of all paper-money privileges.
Issuing and minting of dinars and dirhams according to the traditional standard weights and measures.

The first stage is the minting of the coins according to acceptable standards. Dinars and dirhams have already been minted under the supervision and standards of the World Islamic Trading Organisation and are in circulation in Spain, Germany and South Africa, soon to be followed by Switzerland, England and other Muslim countries.

The definition of the standards of dinar and dirhams set up by WITO are based on the same size and weight than the original ones in Madinah al-Munawwara.

The DINAR is defined as 4,25 grams of gold of 22 carats.

The DIRHAM is defined as 3,00 grams of sterling silver (or 0.925 pure SILVER).

WEIGHTS AND MEASURES
DINAR 4.25 gm. 23m/m

DIRHAM 3.00 gm. 25 m/m

WITO's standard dimensions for the dinar and the dirham:

Total freedom to buy, sell and possess any quantity of dinars and dirhams within Islamic Law.

This has four stages:

The first stage is the complete freedom to trade in gold and to possess it. Everybody has to be able to buy it, sell it, lend it, borrow it, import it and export it in any quantity. This includes the elimination of all taxes impossed on the purchase or sale of gold and silver.

The second stage will be the individual freedom to use gold in all economic transactions. People must enjoy the freedom to use gold when buying goods or services, without the mediation of the artificial paper currency. That is, the law of Legal Tender by which it is obligatory to accept the artificial currency issued by the state as payment of every debt, public or private, will have to make an exception to all 'contracts in gold' or 'clauses in gold' that will determine specifically that the payment will be made in gold. In summary, the legal freedom to celebrate contracts in gold.

Once this has been attained we would have reached the "parallel currency standard". This will not restrict in any way the official transactions, nor will it prevent the financing of the government. The system of state finance will continue to work. All contracts already established in US dollars or the official currency will be satisfied in that currency, but all contracts in dinars or dirhams will have to be satisfied in dinars and dirhams. The paper currency issued by the govenment and the dinars and dirhams will be circulating simultaneously. The relative supply and demand of each currency will determine its rate of exchange, which will fluctuate constantly in response to that supply and demand.

The third stage in the way towards bimetallic currency will be individual freedom to mint coins. The first coins were minted by jewellers and private people. Private coins circulated freely in history throughout the whole world. Whoever does not want to take the time and bother to weigh and test these coins or has no confidence in the mark and stamp of the minter, he will still be free to use the official currency of the nation.

The fourth stage will be that the goverment will decide to make its currency freely convertible into gold. It could adopt the prevailing rate of exchange between both currencies as legal parity and from that moment on the government will guarantee the unconditional convertibility of its paper notes in gold. This will be a legislation of the gold currency that will gradually lead towards freedom.

Facilitating the transport and transferral of gold for international trading by a international network of appointed agencies throughout the world.

It is quite obvious that in our era of artificial paper money currency, the way to bimetallic currency seems locked because of the lack of a nation that will take the lead. It is not realistic to think that the government of a western kafir country will provide such a leadership. Naturally the monetary authorities of US and the western countries will defend the present bankrupt state of affairs that makes so much less painful their own commercial deficits and their inflation. They would like to mantain their artificial currencies which forces creditor countries to accelerate their inflation in order to follow their pace.

There is an alternative that allows one to attain monetary stability and economic cooperation: the national currencies must be all convertible and redeemable in gold, and the international balances must be satisfied in gold. But, again, that will not happen without a nation that will take the lead.

The introduction of a gold currency in international trading will produce a mimetic effect in other Muslim countries who have had enough of supporting western nations' deficits and, on the other hand, it will provide a solid foundation for a newly c

The intent of The Golden Pot is to become a news archive of the gold markets.
Hence why I like to store relevent information here as opposed to being a chat site on gold.

This way when the article get removed the information is still there for one and all to appreciate.

Fiat -- Sharefin, 07:57:44 10/24/02 Thu

BLACK TUESDAY OCTOBER 29th 1929 REVISITED?

History would suggest that once every couple of generations there is a “cleansing cycle” that occurs within the financial markets, society, and even within humanity as a whole. Financial institutions collapse, diseases rage, locusts fly, hailstones fall, earthquakes increase, volcanoes rumble, Sunspots explode out from our heat source, wars breakout all over and despotism reins supreme. We appear to be entering one of these historic cycles at this seminal point in the maturation of the human race. Almost as if the entire planet is vibrating out of control, has some kind of harmonic resonance pushed us out of kilter, like we are getting disconnected from our core and spiraling out of control? Maybe it’s our collective lack of moral backbone precipitating these events, as historically, such perilous times tend to follow a period of wild excess. The last time this happened was in the 1920’s, 30’s and 40’s. It started with the Wall Street Crash of 1929, then it moved through to the Great Depression and ended beyond World War II. The question is: is it cyclically returning?

Gold -- Sharefin, 07:48:32 10/24/02 Thu

World Gold Council reinventing itself

"The WGC is going through a radical transformation process. We are in the process of restructuring, reducing the number of our offices to tighten up our operations and make the organization more accountable then in the past," Thompson told a conference Tuesday.

Earlier this month, the new WGC Chief Executive James Burton, former CEO of the California Public Employees Retirement System, Calpers, took over with a new mandate of "reinvigorating" the council. Burton is expected to present by year-end a detailed and cost-effective overall strategy for the promotion of gold.

Thompson said the council wants to revitalize investment interest in gold, "as there are opportunities in gold as a pure investment." But he also said that the council would continue to promote jewelry consumption, which will still be the biggest part of its budget.
~~~~
Speaking at the conference, gold investors were certainly bullish about the prospect of the yellow metal, especially in the current theme of risk aversion for the market. Gold has outperformed the Dow Jones by 70 percent since early 2001 and by a factor of 20 since 1980.

David Crichton-Watt, managing director of The Phoenix Gold Fund, said "I don't think it's going to be rumors of war that drive investors to gold but the fear for their depreciating assets."

Crichton-Watt pointed to the very high level of corporate debt in the United States and the increasing risk U.S. commercial bonds carry. "At the end of the day, the only asset class that is not a liability is gold," he noted.

Naomi Fink from the UBS Warburg foreign exchange strategy added, "Gold remains a classic risk-haven and currently the price of gold remains very much driven by risk aversion."

Fink saw some near-term price pressure on gold if there is a sustain rally in equities, as the two asset prices are inversely correlated. However, she also pointed that the U.S. dollar remains volatile and could see further pressure, which will be a positive for gold the medium-term.

Gold -- Sharefin, 07:46:20 10/24/02 Thu

Market quickly gets over Newmont restatement

The post Arthur Andersen fallout continues, this time with a modest impact on Newmont Mining Corporation [NEM]. The world’s largest gold producer and the most valuable one by market capitalisation, has been forced to restate earnings beginning with the third quarter of 1999 through the second quarter of 2002 after new auditors PricewaterhouseCoopers (PwC) had a different interpretation in regard to the accounting treatment for a Prepaid Forward transaction entered into by the company in July 1999. PWC replaced Arthur Andersen as auditor in May this year.

The restatement will see Newmont's 1999 loss increasing by $3.6 million, $1.3 million for 2000 and $1.1 million for 2001. First half-2002 profits will be reduced by $500,000.

Newmont investor relations spokesman Russell Ball noted that “the Prepaid Forward transaction was fully disclosed in the company’s Form 10-Q for the second quarter of 1999, and in each subsequent quarterly and annual report filed by the company with the SEC. The restatement involved technical accounting criteria - the semi-annual delivery requirements of approximately 18,000 ounces were not satisfied by physical delivery from actual company production, but instead by ounces purchased by the company under forward purchase agreements.”

Apart from the earnings restatements, Newmont must also reclassify elements of the balance sheet. Long-term debt will be increased by approximately $145 million, although total long-term liabilities are largely unaffected since the net proceeds of $137.2 million resulting from the prepaid forward contract were originally recorded as a long-term liability.

Gold -- Sharefin, 07:43:28 10/24/02 Thu

Malaysia Presses Ahead on Use of Gold Dinar for International Trade

Malaysia will set up a secretariat to study and promote the use of the gold dinar as currency for international trade if the cabinet agrees, Prime Minister Mahathir Mohamad said Wednesday.

Mahathir was responding to a request by a delegate from the Iranian Central Bank at an international seminar on the "Gold Dinar in Multilateral Trade" here.

"If the cabinet agrees, then the Malaysian Central Bank will set up this secretariat," AFP quoted him as telling reporters after officially closing the seminar.

Iran has expressed its support for the use of the gold dinar which, according to Islamic law, is roughly equivalent to 4.3 grams.

Its value is based on wo