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Gold -- Sharefin, 22:35:35 07/21/03 Mon

Last chance to avert mining strike

Johannesburg - Talks to avert a crippling strike by more than 300 000 mineworkers went late into the night yesterday as the Commission for Conciliation Mediation and Arbitration (CCMA) applied every known tactic to bring the chamber of mines and the National Union of Mineworkers (NUM) closer to an agreement over wages and other conditions of service.

This followed three unsuccessful days of mediation, after which the union declared the impasse was "destined for strike action".

However, the chamber was optimistic that "a breakthrough could be found even at this late hour".

In a statement issued earlier in the week, the union said: "The situation is almost on the brink of a strike action.

Mine workers can no longer accept to open their chests to the brutality of dust and the maiming of rocks in pursuit of wealth for others, while their wives bathe their infants in tears and feed them on crumbs.
~~~
The NUM's last major industry-crippling strike was in 1987.

In spite of the tension, the chamber remained "positive that a last-minute magic wand could be waved to avert the strike".

Fiat -- Sharefin, 22:33:09 07/21/03 Mon

Money - It's Not What You Think It Is

So how did that paper “dollar” in your hand become money? An excellent answer is found in G. Edward Griffin's 600+ page book, “The Creature from Jekyll Island.” This highly illuminating and educational study on money covers the history of money, banking, wars and the political shenanigans behind the money powers.

Gold -- Sharefin, 22:25:50 07/21/03 Mon

'Gold to $400, then it's tickets' - Goodwin

Controversial gold analyst Nick Goodwin has turned bullish on gold metal and shares, calling for a run in bullion to $400/oz before the end of the year; but he warns that his optimism is only temporary.
“Gold shares are going to run, but it’s only a bear market rally,” said Goodwin, a gold analyst at Johannesburg stockbroker Tradek. Goodwin said weakness in the US dollar, precipitated by a crash in the Dow Jones Industrial Average to 8,000 points from current levels of about 9000, will be the catalyst for gold strength.

“The dollar’s only pausing for breath on its way down; Gold’s ready for another run and should touch $400/oz,” said Goodwin.

Gold -- Sharefin, 22:23:03 07/21/03 Mon

Blanchard and Ramifications

Can a Court Case Make a Difference to the Price of Gold
~~~
An expert in US legal matters wrote to me to say that Blanchard does not have a leg to stand on and that the case will not even go to trial. Lets accept that as a valid conclusion. The question then becomes - why did JPM and Barrick enter such an unusual and on the face of it, such a desperate plea?
~~~
If one considers the potential impact of this case, a logical conclusion must be that with this plea it has become a time bomb, waiting for the right moment to go ‘boom’. When that will be and what will trigger it is not known, but the odds now favour a real and truly magnificent explosion in the gold price in the not too distant future.

Fiat -- Sharefin, 22:18:59 07/21/03 Mon

Sinking US dollar 'could drag world under'

The Bank of International Settlements fears a deflationary crisis because the global economy is too tied to America.

Unless the leading industrial countries get their act together and pursue compatible economic policies, the world economy may be threatened by 1930s-style competitive devaluation and an outbreak of protectionism.
This warning comes from the Bank for International Settlements (BIS), one of the world's most prestigious international financial institutions.

In its authoritative annual report, the BIS warns that: 'The global economy faces a fundamental dilemma, which is becoming more acute with time. How can imbalances in growth and external accounts across the major economic regions be resolved while maintaining robust global growth overall?'

The bank suggests that the rest of the world has been far too dependent on the economic stimulus provided by the United States and that the ongoing decline in the dollar is going to make life much more difficult for Europe and Japan.
~~~
Implicit in the BIS's remarkably frank admission of its concerns is a historic acknowledgement by the kings of Central banking that the once-fashionable monetarist belief in price stability as the great economic panacea has proved seriously defective.

Referring to 'excessive optimism and credit expansion, asset price and spending bubbles, and balance sheet problems that subsequently rebounded on the financial system' the BIS concludes: 'Clearly, the achievement of price stability, with its unquestioned merits, has not been sufficient to ensure the avoidance of financial instability.'

That, in central bankers' speak, is quite an acknowledgement.

Gold -- Sharefin, 22:16:48 07/21/03 Mon

Placer says still cutting hedge

Placer Dome [TSX: PDG] says it remains firmly committed to reducing its hedge book despite the acquisition of an Australian junior which comes into the gold major’s fold with a sizeable chunk of gold production sold forward for the next decade.
The Vancouver-based senior on Tuesday said it had bagged Australian gold junior East African Gold Mines (EAGM), a purchase that would smooth a long-desired entry into gold mining in Tanzania but at the same time add another 800,000-plus of committed gold ounces to its hedge book.

“Acquiring these hedges in no way alters our commitment to reducing our existing hedge book -- excluding EAGM hedges - to below 10 million ounces by year end,” Placer Dome president and CEO Jay Taylor said. Speaking on a conference call to discuss the EAGM purchase, Taylor said it remained Placer’s goal to cut total committed ounces to historical levels of about 15% of reserves.

Fiat -- Sharefin, 22:14:08 07/21/03 Mon

1929-style Stock Exchange Crash Likely This October 2003?

Fiat -- Sharefin, 22:09:04 07/21/03 Mon

Toward a World Central Bank

Mundell’s argument, briefly stated, is this: "[I]f the euro can replace the franc, mark and lira, why can’t a new world currency merge the dollar, euro and yen? The euro’s recent recovery against the dollar almost certainly establishes its credibility as a permanent currency.... This suggests success for the grandest reform of all, a supra-national central bank." At present, despite labor unrest and economic turmoil in the "euro-zone," notes the Journal, "few complain about the loss of ‘monetary sovereignty.’ World money, with a world central bank, seems a next logical step.... A world money would be an extraordinary boon to international stability."

Accordingly, "Bob Mundell has a plan, based on the euro and looking toward the year 2040. To wit, all currencies [would be] convertible into an international money, the dey [an acronym for dollar, euro, and yen] … or perhaps the intor." An international board - that is, a global Federal Reserve - would regulate the global supply of that currency, and monetary gains from its issue would be apportioned under a quota plan administered by the IMF.

Periodic Ponzi Update PPU -- Shifty, 22:11:37 07/20/03 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,708.5 + Dow 9,188.15 = 10,896.65 divide by 2 = 5,448.32 Ponzi

Up 21.56 from last week.

Thanks for the link RossL!

Go GATA !

Go GOLD !

Shifty

Once More.........Who's Running the Gold Rig?? -- auspec, 18:52:44 07/18/03 Fri

A MORE REALISTIC STATE OF THE UNION ADDRESS

The following is from Congressman Ron Paul's speech in the US House of Representatives July 10, 2003:

"NEO-CONNED"

http://www.agora-inc.com/reports/901SIOAB/RonSpeech/home.cfm

Folks, this is as good as it's likely to get in our current sad state of affairs..........a good look at who exactly has co-opted our government these last few years. All the cowboy adventurism and tyrannical control motives are here in this speech, layed out in black and white for all to see............as a matter of POLICY no less. Frankly, I don't know this America.

For all RP's boldness in this speech he says nothing about those behind the scenes that pull the strings of these Neo-Cons. Nothing about CFR memberships, grand designs for NWO, etc. He knows full well what is going on being a member of the House Banking Committee, yet he pulls his punches, at least for now. I am simply pointing this out and not condemning him for it...........he only has one life to live for his country and he will make the decision as to if and when........... he joins Larry McDonald and others.

Lord, please save us from these Machiavellian Lunatics {literally}!! These people are totally deranged.

P.S. The incredible arrogance of the Neo-Con philosophy will be its absolute undoing, soon hopefully. The likes of Paul Wolfowitz spouting off about their "chosing" and settling on WMD's as the best way to sell the Iraqi War to the American people is a prime example. SOMEONE, SOMEWHERE, PLEASE GET THESE JACKASSES SOME INTERNS!!! This speech is an absolute BINGO & it needs to be widely distributed.

Weepin along,

auspec

Richard Russell -- Sharefin, 09:17:39 07/16/03 Wed

The Dreaded 4-letter Word

So how am I celebrating 79 years on planet earth? One way is that I made a decision. Today (I've been thinking about this for weeks) I sold ALL my bonds, every last one.

Why did I do it? I did it because the US is heading for maybe the greatest financial mess in world history. The US is far too extended financially, militarily and socially (socially in the way of entitlements that we can't afford and can't pay for).

This nation has taken on too much. Too much in the way of promises, too much in the way of ambitions, too much by way of being policeman to the world, too much in the way of debt, too much in enjoying the pleasures of life such as homes on borrowed money, cars on borrowed money, vacations on borrowed money, the good life on borrowed money.

-- Now I'm going to reveal to you the word that will be the most dreaded word coming up as this bear market matures. The dreaded word, the feared word, the hated word -- will be DEBT.

Who's on the Other End of the Gold Rig? -- auspec, 18:24:49 07/15/03 Tue

The "collectivists", of course! The essay linked here by G. Edward Griffin, author of "The Creature From Jekyl Island", will show you most clearly who the enemies of honest money and freedom are.

http://www.freedom-force.org/granddeception.htm

Griffin's scale of explaining the political spectrum, i.e. "fascist", "communist", "socialist", "leftist" etc, is by far the most concise I've ever seen. In essence, one is either a collectivist or an individualist. The freedom of gold stands against the "coercion" of the fiat peddlers.

Has been linked previously and still worth a re-read.

Fiat -- Sharefin, 19:28:14 07/14/03 Mon

Wall St. Journal's Bartley Has Synarchist Plan for World Currency and Super-Bank

Wall Street Journal editor emeritus Robert Bartley, only three weeks after his angry editorial attack on Lyndon LaRouche for exposing the "Straussian" fascist cabal in Washington, has used his Journal column to propose Synarchist measures for the economic collapse-a single, global central bank and a single world currency.

Thus Bartley, coming from a secret meeting of international bankers and financiers in Siena, Italy, let out exactly what Presidential candidate LaRouche had just warned of-a plan to create an "economic Sept. 11" with a collapse of U.S. credit and the dollar, allowing them to then impose emergency rule of international finance (see EIR, June 13). In his warning, LaRouche put his finger on what many had begun to suspect, that the colossal incompetence of especially the U.S. government and Federal Reserve, in rapidly worsening the pace of economic collapse, may reveal an underlying intent among central bank circles. Bartley's announcement is virtually a "Synarchists' answer to LaRouche" on that point.
~~~~
The connection Bartley and the Journal have exposed is lawful, as the breakdown of the world economic-financial system is accelerating. On June 25, the Federal Reserve Board of Governors, led by Chairman Alan Greenspan, lowered the Federal funds rate by one-quarter percent, to 1%-its lowest level since 1958. The objective of bringing interest rates down to near zero, is to accelerate the huge central bank money-printing binge to unprecedented levels, in an attempt to prop up the remaining international financial bubbles, especially the real estate asset bubble in the United States. This money-printing approach will further a Weimar-style hyperinflationary upsurge. Then it is likely, as LaRouche warned in early June, that Greenspan would suddenly reverse course and jack interest rates up, pulling the plug on an "interest-rate trap" which would set off deflation and bankrupt millions of investors.

Periodic Ponzi Update PPU -- $hifty, 19:38:25 07/13/03 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,733.93 + Dow 9,119.59 = 10,853.52 divide by 2 = 5,426.76 Ponzi

Up 59.93 from last week.

Thanks for the link ( and TUNES ! ) RossL !

Should be an interesting week ahead.

Go GATA !

Go GOLD !

$hifty

Gold Fields Corporation -- Louis h. Rosenberg, 17:54:09 07/10/03 Thu

I would appreciate any information about Gold Fields Corporation, a company that issued stock through the Bank of New York during the 1960's.
I realize this is farfetched, and will probably cause a few chuckles, but some shares were recently uncovered. We are naturally curious.
I also realize the highly speculative nature of exploration. Any information about this company's origins and transitions will be greatly appreciated.
Thank You,
Louis H. Rosenberg
futurelou@hotmail.com

Gold -- Sharefin, 06:47:47 07/10/03 Thu

Canada sells one quarter of gold reserves in June

Canada sold about one quarter of its official gold reserves in June but lost $2 million on the transaction because of slumping bullion prices at the end of last month, a government official said on Friday.

Gold sales in June totaled 114,064 ounces, leaving government holdings at about 300,000 ounces on June 30, when the metal closed at $346 an ounce from May 30 when it closed at $361.40 an ounce, Finance Department data showed.
~~~
Canada has a policy of gradually selling off its gold reserves and replacing them with interest-bearing instruments.

Overall Canadian foreign reserve holdings fell by $724 million to $36.7 billion in June, largely due to exchange rate effects which accounted for $395 million in declines.
~~~~

2 million losses with gold.
722 million losses with fiat....hmmmmm

Silly fools......(:-))))

Gold -- Sharefin, 06:43:39 07/10/03 Thu

Will Gold Remain Legal

I received an interesting note recently from a Honolulu subscriber, Robert M., who questions whether there might be a risk in owning gold that few are considering. He writes as follows:

“You are almost right...with one glaring exception. Solve the exception and you will GUARANTEE our future prosperity. You say that gold is risk-less. It is, EXCEPT for the ability of the President of the USA to - at any time and without warning or congressional consent - sign an executive order confiscating all citizens gold and setting whatever price he wishes for it. It was done in 1933, as you know. It could be done tomorrow. I know of no other asset class subject to such monumental intervention. I absolutely support your brilliant thesis in "Gold Goes Begging." But I also believe that the government will close the only option to protect ourselves. Bullion will be seized, sooner rather than later. Probably under the guise of instituting Jim Sinclair's Gold Cover Clause concept in order to bolster the falling dollar. Gold mines may also be nationalized, but I presume (am I right?) that it will take congressional action to do that, which will take time and allow for public scrutiny.

Gold -- Sharefin, 06:37:32 07/10/03 Thu

A Global Currency Without Gold?

A Global Currency Without Gold?

Memo To: Robert A. Mundell
From: Jude Wanniski
Re: What? No Gold?

What a surprise. I see in Bob Bartley's column Monday that you have hosted another of your famous conferences at your Palazzo in Italy, this one addressing the question: “Does the Global Economy Need a Global Currency?” I’m of course happy that you are stirring up discussion on this important topic, Bob, but from Bartley’s report it seems there is there no "gold" anchor in your plan. Is this true? This means whatever unit of account you choose, it will still be subject to influences leading to inflation or deflation. When Bartley talks about anchoring the new Mundellian unit to the consumer price index instead of gold, is this your intent? I certainly hope not.

I'll just have to assume you are not putting all your cards on the table, planning to sneak gold into your system at some point. But what the heck, why fool around? If you don't put the gold anchor out front and center, why should you expect anyone else to do so. If the new currency you are cooking up is nothing more than the product of a global currency board, you are wasting what good years you have left. You got your Nobel Prize in 1999 for your work in creating the eurozone, but right from the start you failed to give adequate warning that unless the Eurobank targeted gold to keep the euro supply matching the euro demand it would flop around as it has. Bartley himself notes the euro was born at $1.18, floating to $0.83, then back up to $1.18. Was that trip necessary? The world economy will never get to a global currency without a central role for gold to anchor the system. You taught me that. For goodness sakes, Bob, grab the bull by the horns. None of us are getting any younger.

~~~
For such nations in particular, the Mundell view stresses that floating exchange rates, recently a standard prescription of the International Monetary Fund, are not a policy but the lack of a policy. Under fixed rates, the central bank of a small nation devotes monetary policy to targeting the exchange rate with a larger neighbor; this is a policy. But a "float" simply takes away the anchor; for a policy you need another target--historically the price of gold, more recently some measure of the domestic inflation rate.

Under the second Bush administration, the United States has set out to establish itself as a positive force for order in the world, but it has been uninterested in the non-military side of world power, in particular the monetary leadership exercised so successfully by the U.S. during Bretton Woods or Great Britain during the 19th century. A world money would be an extraordinary boon to international stability.

When the U.S. gets ready to seize world leadership, Bob Mundell has a plan, based on the euro and looking toward the year 2040. To wit, all currencies convertible into an international money, the dey (dollar, euro, yen) or perhaps the intor. The supply of this currency under supervision of an international board; monetary gains from its issue split along IMF quotas.

Richard Russell -- Sharefin, 06:34:31 07/10/03 Thu

Next, let's turn to the precious metals

Next, let's turn to the precious metals. Last week I talked about silver, and I stated that I was now "a silver bull." In silver we have a case of too much demand and not enough supply. For over a decade the world has been using more silver than has been produced by the mines. Nobody knows how much silver is already mined and above ground, but it is thought that this supply (whatever it is) is at most around 500,000 ounces and is now being rapidly depleted.

What about the US government's Strategic Stockpile of Silver? Here's the thought that the Stockpile has shrunk to around 200.000 ounces. All in all, it's possible that the world could run low or even out of silver within five years.

I'm not going to go into the whole, fascinating background of the silver situation -- let's just keep our eyes on the price action.
~~~
The Financial Times is a brilliant newspaper, but when it come to gold they're as "dumb as dirt." The Financial Times is a fan of the central banks and therefore an enemy of gold. In an article in the July 5 edition, they warn that "Gold companies may lose their shine." Why? Because US gold ETFs are coming, and this will allow people to buy gold directly on a US stock exchange, and if so, who needs gold shares? Is that dopey or what?

The Financial Times doesn't understand that gold shares have the leverage, and that if gold, the metal, "takes off" on the upside, the leverage of the gold shares increases tremendously.
~~~
Last October the Chinese established the Shanghai Gold Exchange. A few months later China announced that Chinese citizens would be free to buy, sell, and own gold.

Now China announces that on July 8 it will open the Shanghai White Platinum and Silver Exchange. Silver of 99.90% and 99.95% purity will be traded at the Exchange. The Chinese spokesman told Dow Jones that slightly more than 60 members, including domestic silver producers, trading firms and Jewelry makers, have been approved for trading on the new Exchange.

It seems to me that China has moved to all-out trading in the precious metals. Furthermore, it seems apparent that China is now encouraging its over-one billion people to own precious metals. Now why in the world would China do that? Could it be that China wants to be the world's largest holder of gold and silver?

Richard Russell -- Sharefin, 06:25:09 07/10/03 Thu

Is Red China the Big Silver Short?

Sometimes, but very rarely, through sheer intelligence and experience, one is able to pinpoint a future event with remarkable precision. Kind of like the scene in the movie, "The Godfather", where the old Don, wounded and aging, warns and counsels his son-successor to beware of him who comes first to make the peace, as he will be the true enemy. That was the movies, of course, but I have my own silver Godfather of sorts in my friend Izzy. I must say that he is the smartest person I have encountered in my life. For years, he has been counseling me that one of the signs that we were likely to explode soon in price, would be the appearance, out of the blue, of bearish stories on silver. He also said that by analyzing the stories carefully, when they came, we could learn the identity of the big silver short.

When I read the following story released today, Izzy's prediction rang loud and clear. After all, who would be more likely to spread bearish stories than a big short? I want to post the entire story here, in the interest of objective analysis:

Shanghai, July 7 (Dow Jones) - China's silver exports in 2003 are expected to reach at least 2,100 metric tons as steady gains for spot silver prices in global markets will encourage more exports in the second half of this year, an executive with a Beijing-based think-tank said Monday. Tang Wujun, vice general manager of semi-official think-tank Beijing Antaike Information Development Co., predicted that the upward trend in spotsilver would last through the rest of this year if a global economic recovery took place.

Although spot silver has fallen from around $5.10 a troy ounce in mid-2002, it has been posting slight but steady gains recently. It was quoted at $4.67-$4.69/oz at 0700 GMT in London Monday, up slightly from $4.48-$4.52/oz quoted a month ago.

Furthermore, "our silver production each year is pretty much larger than our consumption... Therefore, we have to seek overseas buyers to digest our large supply," Tang told Dow Jones Newswires on the sidelines of the China Silver Forum in Shanghai.

China is expected to produce a total of 2,400 tons of silver metal from silver ores as well as slightly over 2,000 tons of silver metal from recycled metal scrap, according to Tang. The country's silver consumption is pegged at only 1,800 tons in 2003. Although this represents an increase of 10% from last year, it is still much lower than total output this year.

In order to reduce the severe oversupply of silver, the Chinese government was likely to sell less state reserves to the public this year, sources close to the government said.

Last year, the government sold 1,600 tons of silver from its reserves, making it the world's largest seller of silver.

Richard Russell -- Sharefin, 06:23:19 07/10/03 Thu

Color me (bullish on) Silver

Speaking of charts, I want to talk about one specific chart, and that's the chart of silver. With the Fed flooding the system with liquidity, this money has to go somewhere, and it will often seep into the most underpriced area of the market. One extremely underpriced area is silver.

The action in silver is becoming interesting, and I wrote about it last Monday.

The first "victory" for silver would be the metal closing over its May 12 high of 4.91. A greater technical victory would be silver closing above $5.00.

Gold & the NWO -- auspec, 03:19:39 07/09/03 Wed

A FIREBRAND'S VIEW OF THE NWO

Hans Schict's GE essay entitled "From a Different Perspective" is a MUST read:

http://www.gold-eagle.com/editorials_03/schict070703pv.html

Who's been the world's KINGMAKER for the last 60 years?

Who's behind Bretton Woods, IMF, World Bank, Bilderbergers, CFR, Tri-Lats?

What one man stands mostly behind the US$?

Has Bush strayed?

Is the Baton being passed??

*************************************************

This Schict article is very interesting because there is much truth therein. David Rockefeller HAS grasped the world within his fists and shaped it much to his liking over the last 50 plus years, no doubt. When you look at the Magoo-like face of Alan Greenspan and hear his mumbo jumbo words..........it is best to see the face of Grampa Munster, a David Rockefeller look alike, as he controls his puppet's words and semi-thoughts. The Rockefeller influence abounds behind the scenes wherever ANYTHING important is happening worldwide.

Schict seems to think that Uncle David is getting old and losing his grip and that there is NO ONE left in the ranks to take over the reigns. To that I will simply respond.............BULL SCHICT!! These various CheeseWheels have done such extensive damage to the true American way of life that the simple loss of one man, regardless of how powerful he is, isn't going to leave such a leadership vacuum that the country will revert to free markets, honest money, or representative political leadership. Ya think the CFR is gonna close down when David croaks {speaking of dieing not making old toad noises}? How about the Tri-lats?? No way, no how. These various institutions are so ingrained into the fabric of the globe that they will carry forth, one way or another, under one leader or another............for the rest of this century. What Schict is saying is comparable to believing that when Joey Gambino hits prison or meets his errant maker that the Mafia will crumble. Tell it to the Sicilians...........ain't gonna happen.

Why not??? There are SYSTEMS in place for one reason. Rockefeller may have instituted these systems but they will persist when he's properly institutionalized. NWO and the fascist theology behind it is also a SPIRITUAL issue!! That hasn't changed since before the Tower of Babylon was attempted and it won't change any time soon. It's simply inherent in greedy man who has an insatiable lust for control. D. Rockefeller is incredibly powerful, no doubt, and he may be losing his grip, but we're not soon looking at much of anything better once he's ashes. Sorry.

As far as I'm concerned we have ALREADY arrived at NWO...........it's here and now. We don't have to wait and watch any longer. Look at the global structure of the banks linked through the BIS.....all with their various species {smile} of tyrannical fiat. It is NOW a worldwide system........all linked and coordinated, mostly behind the scenes, to the effect desired for the various Kingmakers. Schict was brave enough to actually come out and name names...........he probably shouldn't look for a U.N Ambassador appointment any time soon. Let's look at some of the remaining obstacles to NWO. Just to mention a few.......

-The US Constitution

-China

- Rogue States such as Iraq, N. Korea etc

The US Constitution is now simply an historical document..........just ask Henry Hyde if you doubt me. It's TOAST...........rendered obsolete by global treaties and the likes of the Patriot Acts. Only the FACADE remains.........the patriotic songs still bring forth the tingles and the tears...........but THAT STAR SPANGLED BANNER NO LONGER WAVES OVER THE LAND OF THE FREE!!! The flag APPEARS stately, to be sure, but the state is flagging. We are simply in the interlude where almost no one knows that the game is over. The American Revolution will have to be fought all over again.........person by person, every one who believes in the ideals of our Founding Fathers. Problem is.........we're dinosaurs......there are few of us, and we face cataclysm. A youthful revival is our only hope as revival is always a phenomenon that happens amidst the young. The same tyranny that we overcame in the 18th Century now binds us again.

If you personally doubt that we now reside within NWO............I would love to hear what exactly stands between where we now currently reside and NWO. Couldn't possibly be Congress, our rubber stamp see no evil Congress is the sorriest lot ever sent to Washington and that's saying a lot! The Executive and Judicial Branches seem to have their own ideas about American freedoms..........whoever feeds them these various "Patriot" Acts has nothing but complete contempt for the America of Jefferson, Madison and the others. Admiring the current US leadership is in itself a form of Stockade Syndrome. Ridiculous, but admiration abounds. Maybe you think the US Media will protect you and keep you from living under totalitarian government? John Stossel or Andy Rooney would take up the cause if anything was really wrong......... Good luck!

Are there now and will there always be various factions/schisms within the global NWO? ABSOLUTELY, count on it. There is always give and take, but the predominate theme remains take and take, take and take..........

Speaking of NWO schisms..........Schict seems to think that BUSH has an agenda that has strayed from that of Rockefeller. That's complete news to me. Bush is doing his duty for NWO as he takes on the various rogue states to make the world safe for OUR tyranny not THEIR tyranny. Big difference, eh? Rockefeller, Kissinger, Zbignew, European Council of 300.......whatever.......the players change all the time but the AGENDA moves forth. Even China has its behind the scenes rulers. Bush validates the UN as he seeks their permission to act and he invalidated our Congress by the same actions. The US has simply become the most powerful military arm of the international elitists and it will continue to obey their beckoning. UN peacekeeping forces, staffed primarily by our US youth show the way of the present and future.

It was VERY interesting in this article to hear Schict come out and say the current US banana is basically a Rockefeller miscreant. He's right about that. Why tip toe around with names like the "Power Elite", "Banksters", "Cheesewheels", etc when it's just as easy to come out and talk about Rockefeller and the various wannabees surrounding him? The old {scary old} boy had a coming out party on 20:20 last year..........complete w Babwa Wawa and all. Tell me it's not only LATE but already HERE! Meet kindly and philanthropic Uncle David....

So what if the Europeans have their very own fiat monstrosity now that is taking on Rocky's Dead President Horror Picture Show? So what if they handle gold differently in their CB's than the US? So what if they're not completely behind the various US worldwide military "adventures"? In the big picture these are mere skirmishes or trivial turf wars like within the Mafia....YET........the Mafia continues forward generation to generation, century to century. Very little difference, most unfortunately.

What kind of surveillance by govt would you come to expect by NWO?? Echelon, for those familiar with this issue, would serve quite nicely, no? In fact, this very written piece most likely has enough 'buzz words' within it to trigger a closer inspection from the global federales. "Hey guys........been to church lately?" Echelon is documented fact...........your govt is eavesdropping on you via an international network of exchanged information. Deal with it. The bodily contained 'marks' are not yet here but the technology and desire to use it certainly is.

"Tri-Lateral" refers to the Trilateral Commission and breaks down the globe into 3 major segments.......the America's, Europe, and Asia. The BIS's job is to keep things moving along until the 3 can be officially linked. The Central Banks' Central Bank.......run by the likes of the European RedSchields and the US Rockefellers......what else would they do? "Independent" Central banks.....?? Please find me one.

Maybe you think your country's financial footing will keep us strong and independent from NWO? More likely a completely bankrupt nation, to the tune of $40 plus TRILLION will have to be rebuilt from the foundations upwards. Our markets are little more than a sham propped up in order to.........well, ah, er, uh prop them and the entire monetary system up.

Either Schict has read some of the ANOTHER, FOA {elitist entities explaining the way of the world to internet gold bugs} information and has therefore been influenced by it or that is simply the way international monetary issues are being played out. Europe has its gold facade behind its Euro. America has its bluster and bullets behind its currency. It's all central planning and it keeps getting more and more centralized. There IS a battle for reserve currency hegemony and the banana can only get split from this point onward.

Maybe you think your CHURCH will protect you from NWO? More likely your church has bought into the various lies as to rationale for war, patriotism, etc. More likely your church is leading you astray........apostate churches abound even if they are worthy of the name of Christ in the first place.. No, my friend, the churches are very much in line for one world government as well with very few exceptions. There will be special dispensations for those leading the elect astray. It's said the streets of Heaven are lined with gold.............gonna be some really happy gold bugs there!

Where does GOLD fit in this picture........?? Wherever it wants as it's the 800 lb. guerilla {smile} and it eats bananas by the bunch. THEY know it, WE {few} know it.......and that's exactly how it will play out. It IS Rockefeller's Dollar and he's the one with the most to lose as it falters, just as Schict says. Chase Manhattan was gobbled up by the derivative King, JPM over a Rockefeller lunch one day. That is exactly how things work in the real world! Your remaining scant freedoms are likely to be usurped over a midnight buffet {possibly Warren not Jimmy}. Gold and fiat are incompatible. Fiat is the State's best friend, so Gold, for now is deemed Enemy of the State status. When push approaches shove the centralized international planners will REALLY dig gold!

What IS standing in the way of US martial law? A simple incident, amigos, real or contrived........it will matter not. All the paperwork has been completed and ready to enact. All we need is an Executive leader with no historical appreciation, no truly wise council, and an attitude of recklessness and chutzpah surrounded by psychopaths with the same..........OOPS!!

Nationalism...........?? No mas! Not in this world order. It is kaput in Euroland for the most part or at least packaged for pickup and removal. US nationalism is only used for global purposes........removal of rogue states, consolidation of assets, or even colonization. Picture General Grampa David directing the troops. Time marches {goose steps} on!

NWO...................New World Order?
NWO...................Now World Order?

You should probably give it some thought.

Live, laugh and love........ for tomorrow is a new day in the ordered world. It's much later than you think.

Defiantly yours,

auspec

Gold -- Sharefin, 08:40:30 07/08/03 Tue

Gold will rise in 2003, 2004, 2005 …

This is what I recommend to the Central Bank of my country : increasing the gold stock and getting gradually rid of the American dollar

While stressing the difference between the movement of ordinary stocks and gold ones, I shall start by explaining why securities will continue to fall over the 3 coming years, while the king of precious metals will continue to rocket . I shall also try to show the amplitude this movement is likely to take.

Then we shall look into the probable evolution of the dollar over the 4 coming years while taking into consideration two facts that are certain right from the beginning:

1- when the dollar falls, gold rises and vice-versa.
2- the dollar has well and truly started to decrease.

Now we have to answer two crucial questions that all professionals are asking themselves:

1- how long will the fall of the US dollar last?
2- And to which level will this currency fall?

The technical and chart analyses of inter-market relations will once again prove to be precious for us. The message is clear and does fit in with the above-mentioned analysis: the fall of the US dollar will accelerate in the coming months and its amplitude will be considerable.

Silver -- Sharefin, 08:45:52 07/07/03 Mon

Silver - The Undervalued Asset Looking For A Catalyst

Complete Article

Silver -- Sharefin, 08:29:49 07/07/03 Mon

Silver - The Undervalued Asset Looking For A Catalyst

STORM STRATEGY: PRECIOUS METALS

In writing my Storm Series, I touched upon investment strategies that would work under various storm scenarios. Prominent among them was precious metals. As currencies depreciate, especially the dollar, confidence in paper will evaporate. This will cause a flight to real money, which I define as gold and silver. While I believe that both gold and silver will do well under any storm environment, I believe that silver has far more upside potential. From a value perspective, silver has many attractive attributes that are hard to overlook. There are eight, which taken together, add up to explosive upside potential regardless of what happens to the financial environment. They are listed below.

Gold -- Sharefin, 08:26:54 07/07/03 Mon

Newmont puts subsidiary into bankruptcy

It was a wonder to behold. The talking head had such a serious look on her face as she revealed to the world that the opening for a major listed gold producer (Newmont) had been delayed based on an announcement that a significant Australian subsidiary had been placed in the Australian equivalent of insolvency.

She assured her listeners with a look of great concern that the opening price would be reported as soon as the momentous event occurred. She seemed puzzled when the company opened a few pennies down in sharp contrast to what her body language suggested.

Clearly she was disappointed that she could not report that the opening trade was only a small percentage of what the stock traded at yesterday. Usually I watch the financial channels with the sound off to avoid shrinking my brain. However, when I saw the chart of NEM flash on, I had to listen.

What has occurred is actually only another stage of hard negotiation. In a debt settlement offer, all those entitled to payment have to agree on the terms or face even harsher consequences. For the owners of the debt, a settlement is preferable but some hard ass held out and demanded a higher amount so now no one is getting paid.

That is not bad for NEM and you can be assured that this procedure will ultimately benefit the company - either in the form of handing over Yandal to the Gold Banks and their counsel, Lord Sniperly Whiplash QC or settling the debt at a fair amount.

I say fair because in my opinion the gold derivative itself stands on a foundation of criminal fraud in its basic construction. The structural trades that the entire so-called market stands on are pure computer constructions with no attachment to any gold and a bankrupt corporation at the end of the daisy chain holding all the risk.
~~~
Congratulations to NEM management. But even paying up $1 for those rotten pieces of derivative paper can only be considered a magnanimous and honorable act.

I would have torn those derivative bums a new rear-end. I know where all the bodies lay and how the scheme works better than any of the prestigious university Math PhDs that have been used to create for the derivative trade abundant window dressings of reality. What do you think you got paid for? Certainly it was not for all those papers you wrote that not one director of the firm read.

Dear Federal Reserve Derivative lady. You have been snookered big time.

Gold -- Sharefin, 08:21:29 07/07/03 Mon

The Fuss About Interest Rates

In closing, the bubblemania that has gripped the U.S. for more than ten years is coming to an end. The bond market has made a top and is heading down. The dollar is in the intensive care unit and probably won't make it. The stock market "mini-resurrection" is all but over and the housing market really doesn't have any place to go but down. The fat lady has warmed up and she has now taken her place on stage and there's not a damn thing in the world that Alan Greenspan, or anyone else, can do about it. Deflation is in the wings and this will cause a debt explosion. The end result will be the greatest bubble of all -- the gold bubble -- as central banks, foreigners, and Americans race to salvage what little of the wealth they have left. My advice to one and all is to beat the rush and do it now.

Gold -- Sharefin, 08:17:44 07/07/03 Mon

The Fuss About Interest Rates

In closing, the bubblemania that has gripped the U.S. for more than ten years is coming to an end. The bond market has made a top and is heading down. The dollar is in the intensive care unit and probably won't make it. The stock market "mini-resurrection" is all but over and the housing market really doesn't have any place to go but down. The fat lady has warmed up and she has now taken her place on stage and there's not a damn thing in the world that Alan Greenspan, or anyone else, can do about it. Deflation is in the wings and this will cause a debt explosion. The end result will be the greatest bubble of all -- the gold bubble -- as central banks, foreigners, and Americans race to salvage what little of the wealth they have left. My advice to one and all is to beat the rush and do it now.

Gold -- Sharefin, 08:12:51 07/07/03 Mon

Discovery points to cheaper fuel cells

Only tiny amount of gold, platinum needed to create catalyst

Fuel cell systems can be made to work using far less platinum or gold than previously thought, a discovery that could considerably cut the cost of the futuristic technology, researchers said Thursday. Touted as a replacement for the internal combustion engine and one of the most important power sources of the 21st century, fuel cells create electricity with little pollution by combining hydrogen and oxygen.

Gold -- Sharefin, 08:11:16 07/07/03 Mon

Gold stocks about to lose their lofty P/E ratios

World Gold Council Fund

Gold shares have so far outperformed the bullion price this year, although neither performance is likely to make the heart beat faster. However, many strategists believe future returns on gold mining shares could be affected by the launch of new gold investment products.

The two key gold equity indices, the Philadelphia gold and silver sector and the Gold Bugs index on the American Stock Exchange are each up more than 5% so far this year, while the spot bullion price has risen by 2%.

Gold equities are seen as a leveraged play on the gold price, alongside derivatives such as futures and options.
~~~
Gold miners say the higher premium is justified because of the scarcity of gold equities. The total market value of the world's top gold miners listed in the Philadelphia gold and silver sector is a little more than US$50-billion, which is equivalent to the market value of British banks, HBoS and Barclays.

But analysts said gold equities will no longer be a scarce investment prospect if plans by the World Gold Council, which is funded by gold miners, to launch exchange traded funds (ETFs) go ahead this year.

"Fund managers wanting a pure exposure will get it through ETFs, which could therefore reduce premiums for gold equities," one precious metals analyst said.

Fiat -- Sharefin, 08:07:50 07/07/03 Mon

U.S. current account deficit last big bubble

'In two to three years it could come to a dollar crisis'
~~~
"Experience tells us typically these things end in tears and I think the U.S. is not going to voluntarily embark on a plan to raise savings," said Jim O'Neill, head of global economic research at Goldman Sachs in London. "Therefore, it will only come when it is forced on the U.S. It is possible in the next two to three years it could come to a dollar crisis."

History is indeed littered with the burnt-out shells of countries that have suffered current account meltdowns. Think of Latin America in the 1980s and Asia in the late 1990s.

The process is all too familiar. A country starts to grow at a torrid pace, this spurs consumption and borrowing and an influx of investment from abroad. The currency soars. Pretty soon the country is borrowing beyond its means and a great chasm opens up between domestic savings and investment.

Investors, fickle as they are, suddenly lose faith, turn tail and the currency and economy implode.
~~~
The U.S. dollar's status as the world's reserve currency makes comparing Canada in the 1990s with the United States now ludicrous, but eventually some country, somewhere, will become more attractive than a heavily indebted United States.

And investors tend to turn on a dime.

"The nightmare scenario would be if an interruption to capital flows caused a steep plunge in the dollar and U.S. equity market meltdown, pushing the economy into recession," Mr. Barnes said. "The current account deficit could shrink dramatically, but in the context of a disastrous economic and financial environment. This is not our base-case view, but it is within the realm of possibility."

Mr. O'Neill at Goldman Sachs thinks a short, sharp cleaning out of the U.S. economic system may not be so bad. The U.S. did, after all, recover from its 1980s recession.

Fiat -- Sharefin, 08:00:21 07/07/03 Mon

Bold Strokes For A New Order - George Soros

The World Bank and IMF have completed their annual meetings, which were greeted by street demonstrations and a paucity of innovative ideas. George Soros suggests a bold new tack to restructure the world’s financial system.

The international financial system is broken down in the sense that it fails to provide adequate capital to countries that need it most and qualify for it. Global financial markets suck most of the world’s savings to the centre, but they fail to pump money back out to the periphery. Indeed, since 1997, there has been a reverse flow of capital from countries on the poor periphery of the world economy to those in the wealthy centre.
~~~
Until recently, globalisation unfolded against the background of a global boom; now we are experiencing a global bear market. I am afraid globalisation may not survive unless we find new ways to stimulate the global economy.

Fiat -- Sharefin, 07:54:11 07/07/03 Mon

Sinking US dollar 'could drag world under'

The Bank of International Settlements fears a deflationary crisis because the global economy is too tied to America.

Unless the leading industrial countries get their act together and pursue compatible economic policies, the world economy may be threatened by 1930s-style

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competitive devaluation and an outbreak of protectionism.
This warning comes from the Bank for International Settlements (BIS), one of the world's most prestigious international financial institutions.

In its authoritative annual report, the BIS warns that: 'The global economy faces a fundamental dilemma, which is becoming more acute with time. How can imbalances in growth and external accounts across the major economic regions be resolved while maintaining robust global growth overall?'

The bank suggests that the rest of the world has been far too dependent on the economic stimulus provided by the United States and that the ongoing decline in the dollar is going to make life much more difficult for Europe and Japan.

The report warns that unless other countries supplement fashionable 'structural reforms' with 'more expansionary demand management policies' there must be a question mark over 'whether domestic demand will expand elsewhere, notably in continental Europe and Japan, after a long period of weakness'.

Known as 'the central bankers' bank', the BIS, headed by Malcolm Knight, is involved with banking and other financial regulation and has a particular concern about the dangers of systemic weakness in the world economy.

It says that 'the institutional underpinnings of the financial system require further strengthening' and expresses grave concern about the erosion of trust in financial markets.
~~~
It is especially interesting - and disturbing - that the BIS is so concerned about the threat of deflation. Central bankers are traditionally more concerned about inflation, even when it is at comparatively low levels. A schism has now opened up in central banking circles, with the Federal Reserve and the BIS worried about deflation, but Wim Duisenberg, the retiring president of the ECB, still issuing warnings about the 'need' for Germany and other countries to adhere to the Stability Pact.
~~~
Implicit in the BIS's remarkably frank admission of its concerns is a historic acknowledgement by the kings of Central banking that the once-fashionable monetarist belief in price stability as the great economic panacea has proved seriously defective.

Referring to 'excessive optimism and credit expansion, asset price and spending bubbles, and balance sheet problems that subsequently rebounded on the financial system' the BIS concludes: 'Clearly, the achievement of price stability, with its unquestioned merits, has not been sufficient to ensure the avoidance of financial instability.'

Periodic Ponzi Update PPU -- $hifty, 23:01:41 07/06/03 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,663.46 + Dow 9,070.21 = 10,733.67 divide by 2 = 5,366.835 Ponzi

Up 59.68 from last week.

Thanks for the link RossL

Go GATA !

Go GOLD !

$hifty

Gold -- Sharefin, 00:42:23 07/04/03 Fri

Newmont Yandal Operations Placed Into Voluntary Administration and Note Offer Extended

Newmont Mining Corporation (NYSE: NEM - News) today announced that the board of directors of its Australian subsidiary, Newmont Yandal Operations Pty Ltd (Yandal), resolved to place the company into voluntary administration (a form of insolvency proceeding) in Australia as it is insolvent or likely to become insolvent.

Thomas Mahoney, Vice President and Treasurer for Newmont, commented: "We are very disappointed that we were not able to get 100% acceptance of our offers to acquire the claims of Yandal's creditors. We have received acceptances from hedge counterparties representing 76% of Yandal's negative mark-to-market liability as of May 22, 2003, and Note holders representing 83% of the 8 7/8% Senior Notes due April 2008 not already owned by a Newmont subsidiary. We are optimistic that the voluntary administration process will be completed in an expeditious manner."

Gold -- Sharefin, 00:40:30 07/04/03 Fri

Newmont calls bank’s bluff on Yandal

Unable to convince its holdout hedge counterparty, believed to be Goldman Sachs, to take an offer of 50 cents on the dollar to settle its claim against the Yandal gold hedge book, Newmont [NEM] has put the Australian operation into preliminary liquidation following a board resolution on Wednesday evening.
Yandal consists of the Bronzewing, Jundee and Wiluna mines in Western Australia which produced a combined 145,000 ounces of gold at a total cost of $356 per ounce in the first quarter of this year. The division is non-recourse to Newmont.

This marks the worst gold hedging blow-up since the October 1999 when rising gold prices drove Ashanti [ASL] and Cambior [CBJ] into near bankruptcy as counterparties made margin calls. Since then gold producers have been at pains to slash hedging or reassure investors that they are margin free.

Yandal is now in voluntary administration in terms of Australian commercial procedure and in terms of that process Newmont intends refloating the operations for an effective price of $200 million, or 40 cents on the dollar for hedge counterparties and Senior Note holders who have not accepted an offer made at the end of May.

Gold -- Sharefin, 00:39:07 07/04/03 Fri

Contrarians' Day: Gold May Have More Upside

Gold has proved itself to be the ultimate contrarian bet against the market over the past three years. So is the gold rush over, or is there still time for individual investors to profit from this trend?

It depends: If you think the economy is reviving and the bull market has returned, you may not think you have much need for gold. However, the verdict is still out on a recovery -- and if we get one, it doesn't automatically mean a return of the bull.

If you believe the economy and the markets are still in for tough sledding, many investors might consider adding some gold to their portfolio. While gold's enormous rally may signal the easy money to be had is gone, some savvy professionals think the gold rally has plenty of life.

Gold -- Sharefin, 00:37:56 07/04/03 Fri

Gold Bulls Pick A New Horse

The recent gold bull market saw the price per ounce run up to a high of nearly $380 in January 2003 from $270 in January 2001. But lately gold has lost some luster: the price of gold has dropped wider than 10% in the past five months, although it still stands at a historically high $345 per ounce. Have the salad days for gold come and gone? Not according to Costa Rican-based Mary Anne and Pamela Aden, editors of the Aden Forecast. Their last pick in this column was about a year ago: Glamis Gold, which they recommended at around $8.50. It now trades for $11.75 but sold for as high as $13 per share in January 2003.

Currently the Adens are high on Newmont Mining, one of the most widely held gold stocks and is the world's largest producer. The company has gold reserves of nearly 90 million ounces coming from mines in North America, Australia and New Zealand. The stock currently trades at just over $33 per share.

Fiat vs Gold -- Sharefin, 00:32:33 07/04/03 Fri

Reaping the whirlwind

Extreme weather prompts unprecedented global warming alert
03 July 2003

In an astonishing announcement on global warming and extreme weather, the World Meteorological Organisation signalled last night that the world's weather is going haywire.

In a startling report, the WMO, which normally produces detailed scientific reports and staid statistics at the year's end, highlighted record extremes in weather and climate occurring all over the world in recent weeks, from Switzerland's hottest-ever June to a record month for tornadoes in the United States - and linked them to climate change.

The unprecedented warning takes its force and significance from the fact that it is not coming from Greenpeace or Friends of the Earth, but from an impeccably respected UN organisation that is not given to hyperbole (though environmentalists will seize on it to claim that the direst warnings of climate change are being borne out).

The Geneva-based body, to which the weather services of 185 countries contribute, takes the view that events this year in Europe, America and Asia are so remarkable that the world needs to be made aware of it immediately.

Fiat -- Sharefin, 00:29:34 07/04/03 Fri

Real Estate - Castles in hot air?

What's it worth?
Neither low interest rates nor population growth can justify recent house-price booms. Moreover, the thinking behind both arguments reflects a lack of understanding about how asset prices are determined. On any given day, a house is worth whatever somebody is prepared to pay. However, the lesson from the stockmarket bubble is that an asset's fundamental value must never be neglected. There are two ways to gauge whether house prices are sustainable: the p/e ratio and the house-price-to-income ratio.

• The p/e ratio. The price of any asset should reflect its future income stream. Just as the price of a share should equal the discounted present value of future dividends or profits, so the price of a house should reflect the future benefits of ownership-either the rental income earned by a landlord or the implicit rent saved by an owner-occupier. During the dotcom bubble, investors behaved as if profits no longer mattered. Likewise, people today are ignoring the link between house prices and rents.

In America, for example, a p/e ratio of sorts for housing can be calculated by dividing an index of average house prices by the index of rents which is included in the consumer-price index. In recent years, home prices in the United States have outpaced rents, pushing the p/e ratio to record levels, 16% above its 30-year average (see chart 8). San Francisco's p/e is almost 30% above trend. Estimates of p/e ratios for Britain, Australia and the Netherlands point to an even more pronounced bubble, suggesting that house prices in all three countries are at least 30% too high.
~~~~
"The p/e ratio helps to expose the fallacy that house prices are rising because of growing populations and fixed supply, because these factors should affect the rental as well as the owner-occupier markets. The fact that prices are rising much faster than rents suggests that homes are being bought in the expectation of capital appreciation rather than underlying fundamentals. That is the definition of a bubble."

Gold -- Sharefin, 00:01:57 07/04/03 Fri

Barrick's Hedge Book - A Recipe for Disaster?

Derivatives - Weapons of financial Mass Destruction (Warren Buffet)

It was 10 years ago that I discussed my view of the precarious situation of German Banks at a seminar for an elite group of banker colleagues. My audience dubbed me as a pessimist because I cautioned against the existing high risk situation the German Banks were engaged in with their oversized derivative positions at the time. The banking community pared this point of discussion with the view that "we have hedged all our derivative positions and therefore we do not carry open positions - hence there is no risk"! My answer to this was that only a permanent "Triple A" credit rating (quality) of any counter-party in the total chain of a derivative contract could possibly guarantee immunity to risk. We all know, however, that a chain is only as strong as its weakest link.

In the meantime, my misgivings about the unbridled activities in piling up pyramids of derivative contracts have been proven correct; the German Banks have manoeuvred themselves into a structural crisis and have exponentially geared their derivative volumes to unsustainable heights. The total notional value of global derivatives is reported to have reached between 150 to 180 trillion dollars, an unimaginable number as it would mean 5 to 6 times the total global annual GNP of roughly 30 trillion dollars. The same, even in much higher denominations, holds true for the US banking sector where JPM is reported to hold a notional value of about 26 trillion dollars in derivatives alone. Where, one has to ask, do they find the counter-parties of sufficient credibility to cover this volume when giants like JPM are downgraded in their rating? … As an aside, the takeover of Chase, which already had an offer from Deutsche Bank on the table, was "rescued" within the hour by JPM. By that time, I would suggest, DB was sufficiently served with the Bankers Trust's derivative positions.

I herewith repeat and emphasise my position in 1992. After all, " ...one of the apocalyptic horsemen carries a banner with the insignia of the Derivative Monster".

Gold -- Sharefin, 23:55:53 07/03/03 Thu

Bullion for you

Keep gold in your portfolio if you want to sleep easy at night, reports Barbara Drury.

The past two years have proved not only that sharemarket busts follow booms as surely as night follows day, but also that reports of the death of gold were premature. The recent rise in the gold price to about $US352, after four years in a trough below $US300, has sparked renewed interest in the metal as a sound investment.

While timing the peaks and troughs of market cycles is a mug's game, the sheer unpredictability of financial markets in recent years has underscored the importance of maintaining a diversified portfolio, and that still includes a smattering of gold.

Research by actuary David Knox of PricewaterhouseCoopers (PwC) found that a small amount of gold in a diversified portfolio acts as a buffer against extreme negative returns from traditional assets. This is because gold returns have little or no correlation to returns from shares, property, bonds or cash.

The effect of gold is different depending on the period examined, but Knox found that the inclusion of gold in a portfolio has little impact on overall returns and significantly reduces volatility. In other words, investors reduce risk and sleep easy at night with little or no reduction in their financial rewards.

Gold -- Sharefin, 23:42:02 07/03/03 Thu

Aussie gold price dupes dehedgers

Some Aussie gold producers will be lamenting the sliding Aussie dollar gold price following a concerted dehedging campaign over the past 12 months.
At the time of writing the A$ gold price was struggling to stay above A$515 an ounce, the lowest level it’s been in almost two years, thanks to a rising local currency against the greenback.

What that means is that in the space of little more than a quarter, it has tumbled about A$127/oz or 20 percent since the 15-year high in February this year (A$642/oz) when the US dollar equivalent soared to a six-year peak of just under US$390/oz.

Gold -- Sharefin, 23:39:41 07/03/03 Thu

Barrick Gold Files $1 Billion Debt Securities Shelf

Barrick Gold Corp. filed to sell up to $1 billion of debt from time to time under a shelf registration statement filed Friday with the Securities and Exchange Commission (News - Websites).
Details of the securities will be provided in a future prospectus.

Barrick Gold said it intends to use the net proceeds to repay debt, for equity investments in subsidiaries, to repurchase stock, for capital expenditures and investment programs and for general corporate purposes.

No underwriters were listed in the filing.

Gold -- Sharefin, 23:33:08 07/03/03 Thu

REASONS WHY YOU SHOULD HOLD GOLD?

Gold -- Sharefin, 23:22:30 07/03/03 Thu

FORGET TRADING GOLD - BUY PHYSICAL !

Ideas of "Value"

We all have been brought up with the thinking that a thing's "value" is coterminous with its (paper) dollar price. As we grew up and became interested in investing, the same thinking has prevailed. We have applied it to all kinds of transactions, and - because of the dollar's reserve currency role - have had the luxury of teaching the rest of the world our perception of economic "value" as well.

That thinking, that perception of value, is about to break down - and we had better face this reality, or else ...

Especially in the case of valuing gold and oil, this "dollar perception" is by now a given in the world. But not only that, in the case of gold, we have built up a further abstraction on top of the notion of "dollar pricing", namely the concept of "derivative pricing."

How is the current price of gold determined? By trading physical gold, as most people believe?

Not so.

Fiat vs Gold -- Sharefin, 23:03:27 07/03/03 Thu

"The Truth as I see it."

Gold -- Sharefin, 22:59:29 07/03/03 Thu

Newmont Announces Acceptances of $196.8 Million, Representing 83% of Yandal Note Holders Tendering to the Note Offer, and Extension of Note Offer and Consent Deadline

Newmont Mining Corporation (NYSE: NEM - News) today announced that it has received tenders totaling $196.8 million (representing 83%) in response to its offer through its subsidiary, Yandal Bond Company Limited (YBCL) to acquire the $237.2 million in principal amount of the outstanding 87/8% Senior Notes (the Notes) due April 2008 issued by Newmont's Australian subsidiary, Newmont Yandal Operations Pty. Ltd. (Yandal), not already owned by YBCL. Yandal is the former Newmont Yandal Operations Limited and Great Central Mines Ltd.
~~~~
YBCL's offer to acquire the hedge positions of Yandal's only hedge counterparty that did not accept YBCL's previous May 29, 2003 offer to the counterparties expired at close of business in New York City today. The hedge counterparty has not extended its agreement to forbear demanding payment from Yandal of the amount that would be due if an early termination event occurred under Yandal's hedge contract. This counterparty has not yet demanded payment. Through acceptances of the counterparty offer, YBCL currently holds Yandal hedge positions of $154 million of the total of $202 million negative mark-to-market liability of Yandal's entire hedge positions as of May 22, 2003. Thus, YBCL holds approximately $413.6 million of obligations owed by Yandal.

Fiat vs Gold -- Sharefin, 22:49:43 07/03/03 Thu

THE BUBBLE THAT BROKE THE WORLD

Antal E. Fekete

The date May 21, 2003, should be remembered as a historic landmark. On this day Aladdin Greenspan let the genie out of the bottle. The genie is now at large, entirely on its own, roaming around the world, visiting disaster upon the economies wherever it may go: a depression possibly worse than that in the 1930's. Aladdin hasn’t got a clue how to put it back in the bottle because, if he tried, the genie would threaten to plunge the world into another bottomless pit: that of hyperinflation. Aladdin sowed the wind to let the world reap the whirlwind.

As the reader probably gleans it from the above, the genie symbolizes bond speculation. Greenspan testified before the Joint Economic Committee of Congress on that fateful day, explaining the strategy the Fed has developed to combat deflation. He would climb the yield curve, that is, go out to buy government bonds of all maturities, if need be up to and including the 30-year Treasury bonds, in an effort to push interest rates down thereby enlarging the monetary base that would, according to him, contain the weakness in prices.

It is a long shot from open market purchases of bonds to a buoyant price level. After all, once in circulation, the new money created by the Fed is no longer under its control. It is under the control of the speculators. They will not necessarily deploy it in the commodity or stock markets, as the Fed is hoping. They may see a better opportunity for profitable speculation elsewhere, say, in the real estate or the bond markets. The trouble is not that the Fed is following a script that has become stale. The trouble is that the Fed has given away the store by telling speculators that all remaining risks have been taken out of bond speculation. They can now bid up bond prices to unimaginable heights unopposed. This could also be an act of desperation on the part of the Fed. According to this script, the speculators are being bribed by risk-free opportunities not to dump the bonds that would reduce them to worthlessness.

Gold -- Sharefin, 22:47:55 07/03/03 Thu

Gary North's 'Gold Wars' asks: Is America's gold gone?

IS AMERICA'S GOLD GONE?

I sent this report to Remnant Review subscribers in
February 2002. I want to share it with you, even though
the gold market has long since confirmed what I wrote then.
I want you to understand why I believed that gold had
bottomed in 2001, and what the forces are that will push
gold's price higher. I still believe it.

Pay close attention to my discussion of James Turk's
reports. Turk believes that the U.S. government has
quietly leased out all of its gold. If he is correct, then
the government cannot get it back. Gold's borrowers have
paid about 1% per year to borrow the gold. Then they sold
it, pushing gold's price down. Then they took the money
and invested it at market rates -- over 7% when the leasing
process accelerated sometime around 1997. It was a sweet
deal until gold's price started upward. Now it threatens
to bankrupt the so-called gold-bullion banks.

If Turk is correct, the banks that are in debt in gold
bullion cannot buy it back to repay their debts. If they
try, gold's price will soar.

I warn you, this information is arcane material. The
average Congressman knows nothing about it, let alone the
average voter. But gold investors should be aware of these
issues.

Gold -- Sharefin, 22:29:13 07/03/03 Thu

STOP GREENSPAN FROM PLUNGING AMERICA INTO DEPRESSION!

Open letter to Congressman Ron Paul,
member of the Joint Economic Committee

Antal E. Fekete

I have been a student of monetary science for almost fifty years and I am greatly disturbed by the explosive and malignant growth of bond speculation which I attribute directly to the inept monetary policy of the Federal Reserve.

One-sided bond speculation fully explains collapsing interest rates and burgeoning depression in Japan for the past ten to twelve years. Before 1971, when the world was on the gold exchange standard and interest rates were relatively stable, there was no bond speculation. None whatsoever. Moreover, the amount of long positions in bonds was limited by the amount of issues outstanding. This was changed drastically (although without much fanfare) in 1971 when the world embraced fiat money. (Or was it fiat money that embraced the world?) Now interest rates can move in and out of double digits, or even fall to zero. More ominously, the amount of long position in bonds is no longer limited by the amount of issues outstanding (large as it may be). Derivatives have removed that limit. Speculators can now pyramid in pursuit of higher bond prices. At last count the size of the derivatives market was $140 trillion. Let’s assume that the total of interest-related derivatives is $100 trillion in ‘notional terms’. This means that speculators have paid premiums to benefit from a rise in the value of $100 trillion worth of bonds (never mind that the total value of all the outstanding issues is a small fraction of that incredible sum). Therefore speculators stand to rake in $1 trillion in profits every time bond prices increase an average of 1 percent due to a drop in interest rates. Nor are these profits ‘notional’: they are payable in cold cash.

The next domino, after Japan, is the United States. Contrary to conventional wisdom, a falling interest rate structure is no boon to the economy. A low and stable interest rate structure is. All thoughtful economists would agree that lower prices with stable interest rates (as obtain under a gold standard) are no threat. On the contrary: they are a welcome fruit of increased efficiency. It is the combination of falling interest rates and falling prices that is deadly: if prolonged, they could lead to depression.

Gold -- Sharefin, 22:27:26 07/03/03 Thu

Taylor On US Markets & Gold

Link for prior article....

Gold -- Sharefin, 22:25:18 07/03/03 Thu

Keep your Eyes on the Big Picture

Kondratieff Winter Watch - The views of both Dr. Roach and Dr. Shostack dovetail very well with the still longer-term Kondratieff winter views of Ian Gordon. Ian believes, as do I, that we are inevitably heading toward an economic depression and with the related decline in economic activity, prices of virtually everything will collapse. No doubt the Federal Reserve is also very concerned about that too, which is why they are promising "unconventional" policies like "helicopter drops" of money from the sky and the potential to tax you on your savings if you don't spend it every six months or so. Clearly, the Fed is worried that the general public will catch on to the global economic pathology that Gordon, Shostack, and Roach are talking about. And indeed if people began to think like that and if they began to save rather than spend, it would be a self-fulfilling prophecy. Yet even with these extravagant money creating schemes and intervention in free markets, the attempts to fool mother nature's economic laws will, in my view fail just as surely as similar intervention in the Soviet Union failed. Why? Because as Stephen Roach noted above, every intervention begets still a greater and more extravagant intervention that pushes markets to still more unmanageable extremes. There are physical limits to bubbles and the further they are pushed, the greater will be the implosion when they finally break down.
~~~
One subscriber contacted me earlier today to ask a couple of good questions about the gold market that I think are worth passing on. Specifically he was confused by what he thought were conflicting views with respect to the gold market. He recalled the fact that Frank Veneroso suggested the bull market in gold was triggered by a) Islamic buying following the events of September 11 th and b) producer short covering. But what my subscriber friend found confusing was another suggestion by Veneroso that central banks may have already agreed to accept paper in lieu of gold from the gold borrowers, thus averting a major short squeeze that would have sent the price of gold to much, much higher levels than we have seen thus far in the early stages of this gold bull market. So the question from my friend was this. If central banks had accepted paper rather than gold and if they are continuing to do the same, would this not be bearish for gold?

If Veneroso is right and if central banks have accepted paper in lieu of repayment in gold to avoid a major rise in the price of gold, I think the rise in gold thus far is all the more remarkable. If our central banks have used such clandestine deception and all they have gotten for it is the ability to contain gold to "only" a 40% rise from its bottom, then I think the picture is extraordinarily bullish for gold. Remember, gold that has been lent out by the central banks, never to have been returned to their coffers cannot be used again to suppress the price of gold in the future. And if GATA's work is correct in asserting that close to 50% of the central bank gold reportedly on their balances sheets is gone forever, never to be returned, we may indeed be nearing the end of central bank dishording, in which event the supply and demand fundamentals that Frank Venerosos has talked about could very quickly take gold up to its "commodity" value of over $600 per ounce.

Why would central banks not continue to send their remaining 15,000 to 17,000 tonnes out on to the market to keep suppressing the price of gold and thus distort the value of their paper money still more? I have to think that despite all of the misinformation fed by the Keynesians and Monetarists with respect to gold being real money, the currency markets will begin to slam this truth home even to the indoctrinated policy makers now in control. They may have regurgitated Keynes "barbaric relic" theme in their minds year after year, but if Marshall Auerbach's suggestion that the Chinese may be solidifying their national currency by hording gold before they agree to let their currency float, the hard money lesson may soon be forthcoming to central bankers of all nations. When the worthless intrinsic value of an "I.O.U. nothing" liability currency like the dollar is seen for what it actually is, countries that sold their gold hordes will not only look stupid as the price of gold rises but they will also begin to realize that without an asset money like gold providing a solid foundation of value underpinning their liability money, they could soon face national bankruptcy not unlike Argentina recently faced.

There is little doubt that with a deflationary depression becoming increasingly inevitable, the era of paper or fait money is quickly drawing to an end. This can only be bullish for gold. And with the easy purchase of gold soon being made available through an exchange traded fund over the NYSE, we think the table is being set during the next six to eighteen months for a major breakout in the price of gold. That would likely coincide in my view with the next leg down in the equity and dollar markets. The next decline in equity markets should finally be the capitulation phase when a generation of investors will give up on the notion of owning stocks and when they will switch to tangible assets rather than paper money.

Fiat -- Sharefin, 22:21:45 07/03/03 Thu

Greenspan and the bond bubble

For those used to viewing the FTSE or the Dow Jones as an indicator of the health of financial markets, the last month has clearly been encouraging. Less obvious, perhaps, has been the phenomenal performance of the US Treasury market, where yields have fallen from 4 to 3.2 per cent in a matter of weeks since US Federal Reserve chief Alan Greenspan mentioned the "d" word - deflation.
~~~
However, such is the speculation now in bond markets about further monetary easing that we have a bubble, similar to the equity bubble of three years ago. In our view this bond bubble presents the biggest short-term threat to all capital markets. Everyone is expecting a bigger fool (and the Fed) to buy their bonds off them at a higher price. But, as somebody said back in 1994 (as the last bond bubble burst): "One day there is the horrible realisation that the bigger fool is you." Any bond market sell-off will come about as a result of a reassessment of policy and not necessarily of fundamentals. This makes meetings of the Federal Open Market Committee, as we have next week, times of heightened risk.

Gold -- Sharefin, 22:20:10 07/03/03 Thu

Gold only fiat-dollar insurance

Last week's column on the Kondratieff cycle drew some interesting responses, chiefly from gold bugs.

The most fascinating was from Bob Ewen, vice-president of Toronto based MMI Group. Ewen says federal reserve chairman Allan Greenspan is well aware of the dangers of deflation in a Kondratieff winter and has been frantically printing his way out of his troubles by flooding the financial system with liquidity.

Therefore, Ewen says, "We will likely skip economic winter. I say likely because deflation is now fighting reflation, with reflation currently winning."

The result, in Ewen's opinion, is that despite all odds, the U.S. federal reserve will succeed in creating a "short artificially induced economic spring with slow growing inflation." Economic summer and high inflation, a 1970s type economy, should follow.

I asked veteran gold executive Philip Spicer, chairman of the Central Fund of Canada, if he buys the artificial spring theory. "No, I don't," he replied, "The economy and financial markets are reaching the point of serious vulnerability." Credit availability has now reached greater excess than in the 1920s, he says.

Spicer and other "gold bugs" like Dow Theory Letters' Richard Russell believe only a combination of gold bullion and gold stocks offers investors true insurance against the central banks' continual attempts to flood the economy with "fiat" dollars.

"Fiat" currencies are those no longer backed with precious metals: in effect they are paper promises backed by nothing more than faith in governments and the central banks. Spicer says the temptation for governments to run the printing presses results inevitably in the "silent tax" of inflation, slowly confiscating the wealth of prudent savers and investors.

Gold -- Sharefin, 22:14:40 07/03/03 Thu

Gold has proven its metal for ages

GOLD is the world’s most famous precious metal. The recovery in its price, triggered by growing geo-political risks, falling interest rates and worries over systemtic risks to the financial system, has encouraged many savers to look at gold as an investment opportunity.

For centuries, gold has been prized for its beauty, rarity and as a convenient store of value. Shares may rise and fall, currencies come and go, but gold endureth.

Many investors turn to gold because it is a currency without frontiers. As an asset, it is understood globally and can be moved comparatively easily.

As a saver, gold is a proxy for money and should be considered as a stabilising influence in portfolios. In many ways, the economic forces which determine the price of gold differ from those that influence most financial assets.

Gold can be readily bought or sold 24 hours a day - in large denominations and with narrow margins. The same cannot be said of most investments, including equities in the world’s largest companies.

The metal proved to be the most effective way of raising cash during the 1987 stockmarket crash and, again, during the 1997-98 Asian debt crisis. Holding a proportion can be valuable at times when cash is essential.

There are many ways in which private investors can save gold, either directly or indirectly. The most obvious method is to purchase bullion coins or small bars.

Gold -- Sharefin, 22:08:30 07/03/03 Thu

Part 2, ROB-TV interview with John Embry of Sprott Asset Management

Embry: It greatly concerns me, because it's basically floating
up on a sea of liquidity. I think Alan Greenspan is running
perhaps the most reckless monetary policy in the history of
the United States. He's started to take on dimensions of
John Law and the South Sea Bubble back in France in the
1700s. I don't know where it's going. I've seen some fairly
competent technical people who think it's going to 10,000.
But I really don't think it makes any difference, because he
can pump all the money he wants -- I don't think the economy's
really going anywhere. Because it's debt ... just overloaded
with debt, and I believe that this is a classic counter-trend
rally -- a mini-bull even to some extent -- in an extended
secular bear market. The secular bear is not over, in my
opinion, but time will tell.

Host: Do you see danger signs? We saw the mortgage
companies n the States have signs of trouble: Fannie Mae,
Freddie Mac.

Embry: I just have this nagging feeling there's something
very bad going on underneath the surface. And I mean that
Greenspan is prepared to throw all the liquidity in the world
into it to try to counteract it. That development with Freddie
Mac the other day sent chills through me because I still think
the Achilles' heel of this whole thing is the derivative area.
Warren Buffett used the expression "Weapons of Financial
Mas Destruction" and I agree with him. I think that this thing
has taken on a life of its own. You saw what happened to
Long-Term Capital Management five years ago. There's a
lot more of them out there now.

Gold -- Sharefin, 22:06:30 07/03/03 Thu

Sprott's John Embry tells Canada the gold price is 'actively managed'

Embry: Well, you know, basically gold is a volatile
commodity. We sort of had it go from up to almost
(U.S.) $390 earlier this year. They pushed it back to $320.
This time it has come back to $370. Now they've pushed
it back to sort of the mid-.... It got close to $350. Uh, no,
I think it's just to-ing and fro-ing. It's just the accumulation
phase. It doesn't bother me in the least. I mean, if it goes
to $340 it doesn't bother me. I'd be a little disappointed if it
went back and tested $320 again. But I don't think that's
going to happen.

Host: When you say "they're pushing it," are you talking
about the speculators jumping out here?

Embry: No. I think that they ... some of the speculators
that got caught long ... But it's the cartel -- the Gold Cabal,
shall we say -- the bullion banks, etc. -- that start this thing
on the downside and they scare a few people out and then
eventually physical demand comes in. Physical demand's
really good. I mean, India, Far East and what have you. So
I'm not terribly concerned. Just look at what's going on in
the U.S. financial situation. I think gold's going to turn out
to be a really good asset in the next few years.

Gold -- Sharefin, 21:55:55 07/03/03 Thu

Trading, Speculating and Investing in North American Gold and Precious Metal Stocks

Trading Rules
All stock market sectors have their own unique criteria and set of rules for both valuation and for trading specific securities.

The perverse nature and continuously changing structure of the gold bullion market and gold stock markets precludes strict adherence to hard and fast rules. The following list provides the investor with numerous criteria and factors to consider when trading, speculating and investing in gold securities. There is no single “holy grail” for all stocks at all times, but rather a set of guidelines that vary over time as political, economic, demographic and technological changes affect the structure and behaviour of the gold mining industry and markets.

Silver -- Sharefin, 21:53:17 07/03/03 Thu

The Coming Depression

One thing that interests me is the linkage of gold to paper money and commodity markets beyond what exist in the main stream literature. There is a coming paper by professor Antal E. Fekete that I had the privilege to review that explains some of this in an innovative way. Professor Fekete has been applying Carl Menger theory of price formation to the development of a new theory of the formation of interest rates, i.e., the price of money. In his theory, gold stands out as the only real money. In fact, gold value diverge from all other things (goods and services) because it's marginal utility is almost constant1. Reg Howe and al have done similar research linking derivatives to gold, i.e., the price of gold, gold lease rates and historical monetary system failures. Their research is on the edge. It highlights the fact that gold never lost its lustre. It continues to be treated as money by the (free) markets, but it's usage as a regulator of money market and the economy has changed. Nevertheless, it is inevitable that the monetary system revolves around gold, like the earth around the sun.

Silver -- Sharefin, 21:45:48 07/03/03 Thu

Valuable Silver, Invaluable Advice

Nearly three years ago, I wrote an article for the public called "Silver to Zero." The basic premise of that piece, published on October 20, 2000, was that silver is being depleted at a fairly rapid rate - which will, sooner or later, cause the world to begin experiencing a shortage of silver.

Many of my facts came from the CPM Group, acknowledged for its extensive research in all metals. CPM's Silver Survey for the year 2000 had reported that at least 1.3 billion ounces of silver were used during the prior ten-year period, well in excess of the quantity mined. Now, CPM has issued its Silver Survey 2003, and guess what? That's right - not much has changed. The world still uses more silver than it mines - a condition that has persisted now for 14 consecutive years.

That should translate into higher prices - but it hasn't! As a result, silver bulls are getting a bit impatient - and who can blame them? After all, I recognized this obvious disparity way back in my first article, asking: "Why aren't silver prices reflective of the true fundamentals of the market?" However, I also predicted the silver price would not show any significant strength until we see silver inventories near zero.

Now, three years later, that bold statement certainly seems to have been validated, as does the reasoning on which I based it - reasoning that still fully applies: The paper market controls the price.
~~~
The result is a very interesting situation on the Comex. The overall silver inventory currently stands at about 106 million ounces. However, the eligible category has now climbed to roughly 60 million ounces, while the registered category stands at just 46 million ounces. This is the only time in recent history I can recall that the eligible category has been greater than the registered category.

If you follow the market closely, you know that this is quite significant. Most analysts agree the eligible category is held by long-term investors who are willing to wait. These investors expect much higher silver prices, and their inventory is merely resting in the Comex warehouses. In simple terms, this means the traders and dealers have a mere 46 million ounces; the rest is more or less for display purposes only.

Gold -- Sharefin, 21:39:39 07/03/03 Thu

Prudential ups gold price target, Newmont rating

Analyst John Tumazos at Prudential raised his 2003 gold price forecast to $359.50 from $340, and for 2004 to $375 from $325 to reflect the weakness in the U.S. dollar. As a result, Tumazos raised his earnings estimates for Barrick Gold , Placer Dome and Newmont Mining . He also raised his rating on Newmont to "hold" from "sell," citing improved finances from higher gold prices and the extinguishments of certain hedge positions.

Gold -- Sharefin, 21:38:31 07/03/03 Thu

Is gold a hedge or a trap?

Gold traditionally has been touted as a hedge against inflation. So why, at a time when the Federal Reserve is worried about deflation, do so many smart money managers like gold?

Pick a reason, any reason:

-- It's a hedge against geopolitical turmoil.

-- It's a hedge against deflation.

-- It's a hedge against inflation, which will rear its ugly head once efforts to stimulate the economy take hold.

-- It's a hedge against a falling dollar.

-- A new exchange-traded-fund, which will sell shares in a pile of gold bullion, will create new demand for gold, assuming it gets approved.

-- All or some of the above.

~~~~
Other managers see gold as a hedge against financial, rather than political, uncertainty.

"Gold is a long-established monetary asset that represents an alternative to paper money," says Jim Grant, publisher of Grant's Interest Rate Observer.

"It is an off-and-on safe haven against many financial disasters, including bear markets, currency devaluation, rising domestic inflation rates and the like. Gold is a hedge against monetary disturbances."

Gold is also said to be a "store of value" that holds up better than financial assets during periods of deflation and rampant inflation.
~~~~
"The fear of falling prices is spurring the Federal Reserve to create lots of credit, which may provoke a new cycle of rising prices. Or it might scare foreigners out of the dollar and provoke a cycle of a depreciating dollar exchange rates. In either case, gold may be a beneficiary," Grant says.

So there you have it. Gold could do well if we have deflation, hyperinflation, a dollar that won't stop falling and/or continued geopolitical uncertainty.

On the other hand, if peace breaks out around the world, if the U.S. economy and the dollar recover, if deflation fears subside and inflation can be kept in check, gold would become less attractive.

Gold -- Sharefin, 21:33:50 07/03/03 Thu

China May Float Currency, Snow Says

As China inches toward freeing its giant economy from state control, the government in Beijing has tightly held the nation's currency, the yuan, at a relatively weak exchange rate, giving a major advantage to Chinese exporters. But now a long-simmering controversy over that policy is heating up.

Treasury Secretary John W. Snow suggested this week that Beijing may allow the yuan to rise, and he made it clear that he wants to see that happen. In doing so, he added his voice to those of American manufacturers, Japanese government officials and others who contend that the exchange rate for the yuan, which has been set at about 8.3 yuan per dollar since 1994, is artificially low.

Gold -- Sharefin, 21:30:13 07/03/03 Thu

Three Positive Factors for Gold

The first is of particular interest and source of enjoyment for the author, who has for a long time met ridicule from various quarters when the topic of official intervention in the gold market is raised. For a long time during the 90’s, even when knowing full well that the gold market was not trading normally, the author still could not accept that there was what can only be described as a full blown conspiracy among various players - including the bullion and central banks - to keep a lid on the gold price.

However, during the past 3 years and more, it became clear to even this sceptic that the conspiracy was not only alive and well, but also succeeding admirably in their efforts to contain the price of gold. Yet the evidence is largely circumstantial; on being informed of what facts are available, most people thought it a joke and responded either by saying nobody could think that Greenspan and his peers would stoop so low as to manipulate the gold price or by stating that anyone who enters a market influences the price in some way and if the bullion banks can make money by shorting the gold market, well, good luck to them. It’s a free market.

Opinion on the court case that Blanchard - the US precious metals dealers - have lodged against JP Morgan and Barrick gold mine on the basis that they have colluded to lower the gold price, must run heavily in favour of Blanchard winning the suit. Otherwise the lawyers for JPM and Barrick would not have dared to risk the plea that the suit should be dismissed on the grounds that other parties, to wit the central banks, are members of the whole consortium which includes JPM and Barrick. Since central banks enjoy sovereign immunity they cannot be brought to court and thus, since major participants in what can now only be perceived as a conspiracy are not in the dock, the case has to be dismissed.

This is a brief and simple summation of the plea, but it conveys the important information that the lawyers acting on behalf of JPM and Barrick as much as admitted to collusion on a grand scale - conspiracy! - exactly what GATA and its supporters have said for so long and for which views GATA are regarded as way out nuts by the regular media in the US. And many others.

Fiat -- Sharefin, 21:21:06 07/03/03 Thu

Japan's Central Bank to Buy Securities

TOKYO - Japan's central bank decided Wednesday to take the unusual step of buying up to $8.5 billion in securities in an effort to help revive the nation's struggling economy. The move, which came at the end of a two-day policy board meeting, marks the first time the Bank of Japan will buy asset-backed securities. Previously, the bank has bought government bonds, which carry less risk than securities…..The bank said the purchases of up to 1 trillion yen in securities will start as early as next month and last through March 2006. Bank of Japan Gov. Toshihiko Fukui said the intention is to nurture the securities market, rather than interfere in its "natural growth," and the bank's purchases won't continue indefinitely…..Fukui played down hopes for any immediate effect on fund-raising for businesses. Details on what securities will be purchased will be worked out in coming weeks, but Fukui said a proper weighing of risks is critical. The announcement comes a day after the government formally approved an injection of nearly 2 trillion yen ($17 billion) in public funds into cash-strapped Resona Holdings, the nation's fifth largest banking group, to avert a financial crisis.

Gold -- Sharefin, 21:03:30 07/03/03 Thu

Not Your Father's Gold Market

Bush League Analysis. At over 30,000 tonnes, total gold derivatives are now approximately equal to total reported official gold reserves. Yet, although the data on gold derivatives reported by the BIS represents the only publicly available information compiled on the global gold market according to a published methodology by a presumably reliable source, neither the World Gold Council nor Gold Fields Minerals Services appears to make any effort to try to reconcile their statistics on global gold flows with the BIS figures.

However, CPM Group, another mainstream provider of data to the precious metals industry, has recently taken a greater interest in the mammoth gold derivatives market. See Tim Wood, "Physical gold trade is a dwarf - CPM Group," Mineweb (June 10, 2003). According to its managing director, Jeffrey Christian: "The physical market has been very small compared to the derivatives trading based on it. Yet, it is surprising the extent to which many gold market observers could not see this very fat, very enormous tail that was wagging the dog."
~~~
On the internet there is still much discussion of the gold loan position [i.e., total short physical position of 10,000 to 15,000 tonnes]. Many gold bulls are eagerly awaiting the inevitable short covering explosion in gold. Well, it's time has passed. What we have instead is simply a gold market under management by an official sector that has far less ammunition to enforce its management than most people realize. For this reason we believe that the official sector will lose control within perhaps three to five years. If investment demand materializes in the global gold market, that day will come earlier. ...

The new data on gold derivatives is consistent with this view. The anticipated gold short covering rally has largely occurred, most notably after the Washington Agreement in 1999 and again in the latter part of last year. It was turned back in 1999-2000 and blunted in 2002 by massive explosions in gold derivatives. In other words, investment demand was satisfied by paper gold whenever possible rather than physical bullion, and derivatives were employed whenever necessary to transfer risk from the bullion banks to the central banks.

Some simple examples may help to illustrate these processes. When investors go long in gold through futures, options or even gold certificates, they are accepting someone's promise to pay gold in place of physical bullion. What is more, if the long position is closed out at a profit which the investor is willing to take in cash rather than metal, no physical gold need ever be involved. While the prudent seller (or writer) of the long position normally delta hedges its exposure, that hedge too could -- and frequently is -- carried out in the paper market. Given the very small size of the gold market relative to other investment and financial markets, losses that bullion banks can settle in cash rather than metal are unlikely to threaten any widespread systemic failure because they can easily be handled by the central banks.

To take another example, suppose a producer de-hedges by delivering into a forward contract. The bullion bank receives the metal, but is it then returned to the central bank lender? Not necessarily. If metal is required to meet demand in the physical market, the central bank may elect to roll over its gold loan to the bullion bank while simultaneously selling it a new hedge to replace the producer's contract. In this event, the original gold loan stays on the books of both banks. In the bullion bank's derivatives reporting, the forward contract with the producer is simply replaced by one with the central bank or an equivalent option. Indeed, if done at a higher effective price for the same weight of gold, the notional value of the new hedge will be greater than that of the one it replaces.

Gold -- Sharefin, 20:52:44 07/03/03 Thu

Not Your Father's Gold Market

Gold Derivatives: Updating the Scorecard. On May 8, 2003, the Bank for International Settlements released its regular semi-annual report on global OTC derivatives, which showed continued robust growth across all major categories during both the last half and all of 2002 (www.bis.org/publ/otc_hy0305.pdf). Total notional value of gold derivatives rose from $279 billion at mid-year to $315 billion by December 31, an increase of $36 billion or almost 13% in the last half alone. On June 2, separate figures for forwards and swaps and for options were reported in table 22A of the BIS Quarterly Review (www.bis.org/press/p030602a.htm).

On June 9, the Office of the Comptroller of the Currency released its report on the derivatives held by U.S. commercial banks as of March 31, 2003 (www.occ.treas.gov/deriv/deriv.htm). Their gold derivatives, held almost entirely by J.P. Morgan Chase, Citibank and HSBC USA, fell marginally from $71.7 billion at the end of 2002 to $67.5 billion at the end of this year's first quarter.

All this new data has been summarized by Mike Bolser in chart form according to his usual practice. When reduced to tonnes, total forwards and swaps now exceed 14,000 tonnes, continuing to push toward the upper reaches of the estimated total short physical position. See Gold Derivatives: Moving towards Checkmate; also Gold: Cover or Cover-up? and Long Con: Mother of Bank Runs.(Note: Because the gold derivatives of investment banks (e.g., Goldman Sachs and Morgan Stanley) and others (e.g., American International Group) are not included in the OCC reports, they do not give a complete picture of all gold derivatives held by major U.S. banks and dealers.)

Gold -- Sharefin, 20:45:19 07/03/03 Thu

Gold trust buys into bullion

Merrill Lynch World Mining Investment Trust (LSE:MLW) has bought nearly a tonne of gold bullion to add to its portfolio. At the beginning of May the portfolio contained not a single ounce of the yellow metal.
This suggests the Trust, which has a full London Stock Exchange listing, spent more than £6.5m on gold, or roughly US$10m, during May. At the end of last month 2.7 percent of its total assets of £243.4m were accounted for by the bullion.

Graham Birch, managing director, sector funds, at Merrill in London, says the purchase was triggered by the fall in the value of the US dollar against other trading currencies which in turn boosted the gold price to $370 an ounce at one stage.

“We look at gold [bullion] as cash. It’s just a different type of cash,” he explains. However, Birch also insists that gold is not an exact proxy for the dollar because “as gold falls by one percent, gold is likely to rise by 2 percent.”

Birch adds: “Gold is not a bad investment at the moment. At $355 an ounce the price is not astonishingly high. There is plenty of scope for it to rise. We no longer see [gold producing] companies popping up to hedge as the price goes up and neither are central banks selling. That’s why we have an upward trending market.”

He also has expectations that liberalisation of the gold market in China will help investment buying - “that will mean a quarter of the world’s population will be able to buy gold bars.” Also, the new securitised gold products, some backed by the World Gold Council, should help lift demand. “The average US institution has zero gold at present. These products will enable them to have some.”

Gold -- Sharefin, 20:43:31 07/03/03 Thu

Taylor On US Markets & Gold

Not surprisingly, we have not heard much about those numbers in the U.S. press which is increasingly serving as a cheerleading force for Wall Street and the politicians rather than a truth seeking service so necessary for the defense of our Republic. But the lack of response to both fiscal and monetary policy are the reasons the Fed is becoming ever more desperate in its attempts to avoid moving into the painful but necessary Kondratieff winter. In fact, it should be obvious by now that monetary and fiscal policies do not work, once we have reached the winter phase of the Kondratieff cycle. I say that in confidence having reached the conclusion that both fiscal and monetary policies were tried and failed during the 1930's. And both were also tried over the last decade in Japan where again they failed. In fact, the Kondratieff winter serves the constructive purpose of wiping excessive debt off of the books and readjusting markets back toward equilibrium so that a new cycle of growth can begin. The winter takes place at a point in time in the cycle when, repaying debt becomes a mathematical impossibility. Debt which grows exponentially late in the cycle can no longer be paid with income which grows in a linear fashion. It is at that point when monetary and fiscal policy not only fails to stimulate the economy, but actually worsens the problem by making debt even more excessive in relation to income.

Gold -- Sharefin, 20:40:40 07/03/03 Thu

Gold's Short Position: Part Myth, Part Yesterday's News

We're nearly four years later in time. And now - even during gold's two significant (but temporary) spikes higher during the last few months - we have seen no evidence of such a mad scramble as occurred in 1999. The question is - why not?

I'll tell you what I think the answer is. In my May, 2002 special issue on gold's new bull market, I talked about an interesting phenomenon that was happening. In spite of a gold market that was gaining momentum, lease rates were steadily declining. During 1999's move, lease rates spiked as sudden high demand for gold caused the market to tighten. This time, though, was different; and I wrote:

"I believe that the Fed - and perhaps other central banks - has been feverishly 'liquefying' the gold market so as to keep the recent advance a much more orderly one than was 1999's. . .The motive, of course, is to get as many of these institutions (those still heavily short) as possible out of harm's way in the event that gold rises far more, and in such a way that the bankers are unable to do anything more than slow it down. . .I am increasingly persuaded that the low lease rates are an indication that the bankers realize, in the end, that they cannot fight the markets where gold is concerned, any more than currency intervention works if the markets are of a mind to do something different. . ."

Among other things, I also wrote in that same report that the Fed now desired a rising gold price. I believe it continues to want this; though, again, in a fairly orderly fashion. In case you've been asleep in recent months - and especially in recent weeks - the central bank is hell bent on fighting DEFLATION now. In some respects it will succeed; in others, history and mathematics are against the Fed. Whatever the case, the most politically powerful and influential economists are telling us that a rising gold price is "proof" that the Fed's efforts at reflating both Wall Street and the economy are starting to bear fruit. And Alan Greenspan is not about to take that ammunition out of the pundits' hands when all of them need any and every reason, both real and imagined, to convince the public that all will be well.

Folks, there's NO WAY the Fed or other central banks would follow their present course without first having largely defused the short position in the yellow metal. I believe they've done exactly that over the last year or so. A liquid gold market and time have helped; for instance, J.P. Morgan's derivative position where gold is concerned has reportedly been reduced by two-thirds since it served as the Fed's proxy during the 1999 spike.

Frankly, when all is said and done, this actually makes for a much healthier gold market over time anyway; one that is not beset by such artificial influences. Gold has enough speculators to deal with from time to time as do most commodities; witness the hedge fund crowd's spiking of gold to $390 late this past Winter and to nearly $375 just a few weeks ago before turning right around and taking their short-term profits. More and more, I believe that the continuing preoccupation with what could well be more phantom than real coming "short squeezes" - and even with the issue of central bank manipulation itself - is old news. Those investing or trading in the gold sector based on yesterday's news or theories to too great a degree will be disappointed, just as they've been for the last year.

Gold -- Sharefin, 20:33:42 07/03/03 Thu

Kinross Now 4th Biggest North American Gold Miner

Kinross Gold Corp. (K) is now North America's fourth-biggest gold producer but has to work hard to convince U.S. investors it has moved into the big leagues, chief executive Robert Buchan told shareholders Thursday.

Fiat vs Gold -- Sharefin, 20:31:19 07/03/03 Thu

Washington Agreement not needed - Bradbrook

Goldcorp vice president of corporate development, Chris Bradbrook, said the gold market was sufficiently bullish to cope should the Washington Agreement governing Central Bank gold sales not be renewed.
The 1999 accord confines signatory banks to selling limited quantities of gold from national reserves.

Gold producers lobbied hard for the treaty, along with governments reliant on gold exports for foreign exchange earnings. As a result, the Agreement is often disparaged as a subsidy to the gold industry since it prevents a free market in the metal.

“I’m not sure it matters in the bull market what the Central Banks do. [The Washington Agreement] is not a subsidy at all. If the Central Banks want to sell, they must do it. There will be buyers; they are auctioning large amounts of metal anyway,” said the reliably bullish Bradbrook, speaking at the PWC Global Mining Conference.

Fiat vs Gold -- Sharefin, 20:11:26 07/03/03 Thu

Brace for a long Russian winter

The long-awaited Canadian summer is just about here. Unfortunately
for investors, we may still be deep in winter -- the Kondratieff
winter, to be precise.Nikolai Kondratieff was a Russian economist who
Josef Stalin consulted as to when capitalism would fail. According to
Canaccord Capital's Ian Gordon, Kondratieff described instead a long
business cycle which ebbed and flowed but never broke entirely.
That's not what Stalin wanted to hear, so he threw Kondratieff into a
gulag and there he perished.Gordon, 60, took his B.A. in history; his
bearish newsletter, The Long Wave Analyst, features on its masthead
George Santayana's famous quote that "those who cannot remember the
past are condemned to repeat it."Bulls committed to equities, whether
as investors or vendors, may as well stop reading now.Gordon believes
we are currently recapitulating the 1930s bear market and are in the
beginning stages of a deflationary depression, similar to the thesis
Robert Prechter Jr. takes in his bestselling book, Conquer the Crash.
This is admittedly not the official view of Canaccord Capital,
although the brokerage is known for its independent thinking.Those
still with us will be familiar with other prominent bears, such as
Richard Russell, Martin Weiss and Nick Guarino of the Wall Street
Underground.Gordon reads them all, as do I. But then I also took Y2K
seriously. If that bothers you, I invite you to disregard Gordon's
thesis and read instead the latest magazine cover story on the "Top
10 Equity Mutual Funds you absolutely must own now."If, on the other
hand, you buy Gordon's take on the long Kondratieff cycle, you have a
possible road map of what lies ahead and a logical investment
strategy flowing from it. In essence, it's cash and gold stocks.
That's in line with Dow Theory Letters' Richard Russell, although
Russell also likes high-yielding utility stocks and U.S. tax-free
municipal bonds; Russell also suggests speculators take a flyer on
the bear market rally with exchange-traded funds that track the Dow
Jones industrial average (Diamonds), the S&P 500 (Spyders) or the
Nasdaq 100 (Cubes), albeit with stop-loss orders on them.
Now back to the doom and gloom.The current fourth Kondratieff cycle
began as spring in 1949 and became summer in 1966. Throughout these
first two benign seasons, just about everything rose in price --
stocks, commodities, real estate, inflation and even gold stocks.
Autumn arrived in 1982 and continued to 2000. Throughout the autumn
credit and stock prices soared, although savings, interest rates and
gold stocks gradually slipped.Winter began in 2000 and will extend to
about 2016, Gordon predicts. Most financial assets will fall in
price, especially stocks and real estate. The major exception is gold
stocks: Gordon expects gold will hit US$1,000, US$2,000 an ounce or
more before winter is done.When they hear this, most of his clients
sell their equity funds and stocks at whatever prices then prevail. A
bear market rally like the past few months is a good opportunity to
jettison whatever remains of those asset classes, in Gordon's view.
His clients hold mostly short-term debt and gold equities, the latter
mostly gold juniors. Those with ladders of strip bonds can hold them
to maturity, Gordon says in an interview.While negative on stocks, he
doesn't believe his market timing abilities are honed enough to sell
short. He views gold positions as a sufficient alternative to
shorting stocks or stock indexes. He believes gold is a good hedge
against either inflation or deflation.Since most experts can't make
their minds up about that one, the traditional "insurance" allocation
of 5 or 10% to gold makes sense to me.But what do mainstream
economists think about the Kondratieff winter?Douglas Porter, senior
economist for BMO Nesbitt Burns, says "the theory is a little 'out
there,' but there do seem to be long periods of time where
productivity growth (and therefore GDP growth) is well above average
and long periods where the reverse is true. This would broadly fit
the Kondratieff theory of long upwaves and downwaves."However, Porter
says, if anything, "we are arguably in an upwave period that started
sometime around the mid-1990s, so talk of a deflationary depression
anytime soon doesn't really fit with the program."Martin Barnes,
managing editor of Bank Credit Analyst, also accepts the premise of
long wave cycles but "I just don't buy his [Gordon's] timing. To say
we're in a downwave now doesn't fit at all. It only makes sense for
us to be in an upwave at the moment if we work back to the
1930s."Nonetheless, those who read Gordon's warnings in 1999 would
have benefited.If nothing else, it argues in favour of caution and
not jumping 100% back into resurgent markets, which may only be
liquidity-induced sucker rallies. Personally, I continue to be
bearish for RRSP investments and bullish for non-registered
investments.Private views of the economy depend very much on job
security. As the saying goes, when your neighbour loses his job, it's
a recession. When you lose your job, it's a depression.And, if God
forbid, your spouse loses a job too, you know the deep freeze of the
Kondratieff winter has truly
arrived.