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War -- Sharefin, 08:33:10 11/21/03 Fri

Gen. Franks Doubts Constitution Will Survive WMD Attack

Gen. Tommy Franks says that if the United States is hit with a weapon of mass destruction that inflicts large casualties, the Constitution will likely be discarded in favor of a military form of government.
Franks, who successfully led the U.S. military operation to liberate Iraq, expressed his worries in an extensive interview he gave to the men’s lifestyle magazine Cigar Aficionado.

In the magazine’s December edition, the former commander of the military’s Central Command warned that if terrorists succeeded in using a weapon of mass destruction (WMD) against the U.S. or one of our allies, it would likely have catastrophic consequences for our cherished republican form of government.

Discussing the hypothetical dangers posed to the U.S. in the wake of Sept. 11, Franks said that “the worst thing that could happen” is if terrorists acquire and then use a biological, chemical or nuclear weapon that inflicts heavy casualties.

If that happens, Franks said, “... the Western world, the free world, loses what it cherishes most, and that is freedom and liberty we’ve seen for a couple of hundred years in this grand experiment that we call democracy.”
~~~
Already, critics of the U.S. Patriot Act, rushed through Congress in the wake of the Sept. 11 attacks, have argued that the law aims to curtail civil liberties and sets a dangerous precedent.

But Franks’ scenario goes much further. He is the first high-ranking official to openly speculate that the Constitution could be scrapped in favor of a military form of government.

Fiat vs Gold -- Sharefin, 19:59:39 11/20/03 Thu

In Trade Wars, All Roads Lead to Economic Ruin

The Bush administration's increasing focus on a re-election in 2004 has resulted in an alarming new development - one that may turn out to be the shot across the bow that leads to a full blown international trade war. This was of course yesterday's imposition of import quotas on certain kinds of textiles from China. This is the first action of its kind, and by itself seems relatively innocuous, but once you announce one quota or tariff, you're likely going to announce additional ones, and the other side feels it must retaliate and back and forth and round and round in a vicious cycle. If these are the first salvos in a new trade war, the only possible outcome is the destruction of globalization - and a complete disaster for the world economy, much like the one we saw in the thirties.
~~~
Let's backtrack a bit to see how we got to where we are today and why trade barriers would cause such calamity. The vast majority of US growth over the last 10 years has been made possible by an unparalleled and unsustainable credit boom engendered by historically low interest rates. The interest rate trend has only been possible because of the deflationary effects of productivity and the globalization of production - which always moves the production of goods to the cheapest source. This, combined with the US Dollar's special status as the world's reserve currency has saved the world from inflationary pressures.

This might all be coming to an end. The Bush administration, if it promotes protectionist measures, would be aborting the entire beneficial cycle that has brought the US economy to where it stands today. A trade war fuelled by domestic populist ("Buy American!" and "Protect American jobs!") sentiments at this point would have cataclysmic impact on the purchasing power of the dollar and would start a new and viciously inflationary cycle. First, the weakening dollar trend all by itself will at some point bring higher import prices and inflationary pressure. Second, prices in the US would rise dramatically in a tariff-rich environment, causing an increase in interest rates. A rise in interest rates shuts down the cheap credit addicted American consumer and the booming mortgage market, which will derail the consumer-driven American economy. Shutting down the American consumption engine also shuts down export economies that depend on it. The babies you throw out in this particular ocean of bathwater are the buyers of American treasuries, and therefore the financers of the colossal US Budget Deficit: take Southeast Asia, for example. Together, Japan, China, South Korea and Taiwan currently hold about $1.3 trillion in reserves - most of them in US Dollars - about the same as the entire M1 money supply in the US. For years, the Southeast Asian countries have been sending real goods and services in return for a growing government stock pile of dollars, for which they have no use. Taken by itself, this is an unsustainable trend - and a trade war would only serve to rapidly accelerate its demise.

Suddenly you have a world in economic hurt that is awash in dollars, a world that can no longer finance the spiralling US Budget Deficits. The inflationary effects of this are almost unimaginable. With so many holders of this debt and not enough new buyers, there will be an unprecedented imbalance in buyers and sellers of both US Dollars and US-denominated treasuries. The exit window for this sorry lot of holders will not accommodate everyone at once - only a massively depreciated US Dollar and higher US interest rates would bring things back into balance.

The end result: low growth with massive inflation, higher gold prices, a massive bear market for US Treasuries, and new lows in the US stock market.

Gold -- Sharefin, 07:38:20 11/20/03 Thu

Numeraire To Saucissons?

In the ordinary course of business, drivers communicate with internal security to gain access in order to unload their cargo. Trucks bearing dore bars from Yanacocha and other world gold mines are joined by those loaded with the sweepings from the factory floors of Swiss and other European watch and jewelry manufacturers, and scraps of jewelry discarded from the souks in the Persian Gulf, Africa and Asia. The flow of scrap and dore is periodically augmented by high purity 400-ounce gold bars from the vaults of world central banks, as they continue their multiyear campaign to reduce their exposure to this non-earning, albeit appreciating, reserve asset.

Inside, the source materials are ground, chopped, melted, purified, extruded and reconstituted in a series of low and high tech stages. State of the art security is impressive. The combined material flow is recast into new shapes of “four 9’s” gold, the highest purity, or alloyed with silver, copper and other metals depending on customer specifications. Final output includes coin blanks, 1 kilo bars favored on the Indian Subcontinent, rods and bars for jewelry manufacturers, and even semi-fabricated watch cases. In this way, central bank gold, once the numeraire for all paper currencies, is decommissioned from its official monetary status so that it may satisfy the growing world appetite for luxury goods.
~~~
The managers of the Argor Heraeus refinery purchased the facility in 1999 along with a consortium that included the Heraeus Group, Commerzbank, and the Austrian Mint (at a later stage.) Their growth plan for the business is to integrate further downstream into “value added” fabrications for their customer base. The refinery is strategically located for “just in time” deliveries to Swiss watchmakers and the Italian jewelry industry in centers such as Geneva and Vincenza. Absent in the company’s expansion plan is any provision for the possible needs of those who might be short the metal including Wall Street traders, commercial players, holders of derivatives, or managers of mining company hedge books.

The Argor Heraeus facility is not your typical sausage factory. It is as technologically advanced and environmentally compliant as any precious metals refinery in the world. In their own words, “The Swiss environmental regulations are among the most severe in the world and Argor Heraeus for its part is dedicated to constant research and development in order to guarantee state of the art technology in this field”. The entrepreneurial management group focuses on increasing throughput and adding value for their customer base. They are motivated by the desire for profits and growth and therefore pay close attention to matters of cost cutting, efficiency, environmental compliance and process improvement. The monetary and macroeconomic aspects of gold appear nowhere on their agenda. The refinery’s exact capacity is classified but it represents between 10% and 20% of world gold output. At periods of peak demand, customer requirements are met thanks only to a supply of 400 ounce bars from central banks.
~~~
The market cap of gold today at $750 billion seems pitifully small when measured against world financial assets of $60 to $70 trillion. If only a sliver of that total were reallocated to physical gold, the price impact would be highly disproportionate to the fraction of reallocation. There are numerous ways to illustrate the imbalance. In the following discussion, we use US equities plus government debt including agencies as a proxy for global financial assets since historical data on global financial assets proved hard to come by.
~~~
During these two noteworthy episodes when investors fretted most about the value of their paper assets, they placed a hefty premium on gold’s safety. As nearly as we can measure the degree of concern exhibited in those two instances, the safety premium for gold translated into somewhere between 25% and 37% of US financial assets. Today, that fraction is 1.6% ($750 billion over $46 trillion, based on an equity market cap of $15 trillion and total debt outstanding of $31 trillion.)
~~~
In his day, Otto von Bismarck warned the squeamish to avert their eyes from the manufacturing of sausages by sausage makers and laws by politicians. Today, that advice could be updated by including the deconstruction of money by central bankers. Saucissons, in the mining lingo of the early 20th century, referred to the flexible casings used for explosives in mine operations. Numeraire, of course, refers to gold’s historical role as the reference point for all paper currencies once used by the entire commercial world including central bankers. The numeraire function, according to economist David Ricardo, was essential if “one wish(ed) to make intertemporal or interlocal comparisons (in the) problem of measuring value.” Over the last three decades, it has been the practice of central bankers to demonetize gold, thereby making intertemporal and interlocal assessments of value much more difficult, if not impossible. In theory, a dollar standard might have worked, but in practice it has not. Without a global monetary compass, unrestricted issuance of government and corporate debt, trade imbalances, misallocations of capital, periodic banking crises, and currency turmoil should come as no surprise. It seems more than likely than ever that the world’s central bankers will eventually convene to reprice gold to a level sufficient to persuade a world of paper skeptics that the metal must be reinstated as the numeraire. That level will exceed whatever the market is at that time by a substantial amount. Our guess is the market at the time of an official sector bid will be well into 4-digit territory.

-----------
-----------
So if the total fell by 50% to $23 trillion whilst the safety premium rose to 25% - this would equate to a gold price of $3000.
And if the total fell by 75% to $11.5 trillion whilst the safety premium rose to 25% - this would equate to a gold price of $1500.
(Gold doesn't rise as much but as other assetts are falling so much it increases more with it's purchasing power)
And if the total doesn't fall as we go into hyperinflation whilst the safety premium rose to 25% - this would equate to a gold price of $6000.

Gold -- Sharefin, 22:37:13 11/18/03 Tue

Gold trade opens to individuals

BEIJING, Nov 19 (Xinhuanet) -- The Bank of China (BOC), one of the four big state banks of China, opened gold trade services to individuals on Tuesday in Shanghai.

Individual investors can now trade the precious metal at 95 business outlets of the BOC Shanghai Branch, or dial 95566 to make transactions or on-line trading at www.sh.bank-of-china.com.

To encourage more individuals to participate in the gold trade, the BOC set 10 grams of gold as the lower limit for trade.

Shanghai was a trading center for gold in the 1930s and 1940s. China set up a gold exchange in the city one year ago, ending more than 50 years of government monopoly over the gold market in China.

Gu Wenshuo, an official with the Shanghai Gold Exchange, the only gold transaction market in China, said opening of the gold market would boost consumption of gold and private investment in China.

Against the backdrop of gloomy stock and securities markets, trading in gold was expected to become an important investment arena for Chinese individuals, Gu said.

The other three state banks, the Industrial and Commercial Bank of China, the Construction Bank of China and the Agricultural Bank of China have stepped up their preparations for launching gold trading.

Last year, the three banks launched eight new gold services, including retail sales of gold.

Gold -- Sharefin, 22:34:31 11/18/03 Tue

Outlook is grim for once-thriving B.C. mining industry

And then there was one.

This could be the motto for B.C.'s mining industry. Once a major player worldwide with between 30 and 40 operating base and precious metals mines in the province, B.C.'s beleaguered mining sector has dwindled to six companies with six producing mines. Of those, all but one is scheduled to close within the decade because the deposits are running out.

Hope in this sector can be found in junior mining stocks, which are seeing revived interest from investors, largely because of soaring commodity prices. While a lot of that capital will flow abroad, booming business on Howe Street is good news for the economy generally. The Mining Association of B.C. also points to the province's coal mines, almost exclusively located in southeastern B.C., as providing possible future heat for the economy.

What is the long-term prognosis for the sector, which earned $3.53-billion in gross revenue for 2002 in B.C., given these competing positive and negative forces? While local analysts are hopeful that the entire industry can be resuscitated and the province has revamped policy to try to revitalize the sector, the outlook is grim given a number of structural issues distinct to the province.

Gold -- Sharefin, 22:32:02 11/18/03 Tue

Is the Silver Market Too Small to Buy?

The bullion banks, as reported by GATA, reportedly owe 15,000 tonnes of gold to the central banks that they cannot repay, because if they went into the market to buy that much gold, the market price would scream upwards.

Several large mining companies also owe lots of gold, more than they can repay without moving the market to the upside against themselves.

Defaults on promises to pay in gold are inevitable. If the big traders must default, what makes the little traders think that their futures contracts will be honored?

I believe futures contracts will default, and that the paper longs may get nothing, or a cash settlement, when they run out of silver or gold to deliver.

I believe the dollar is fraud. I believe bonds are fraud. I believe fractional reserve banking is fraud. I believe futures contracts are fraud. I believe it is a moral failure to be deceived by fraud, and that it is a moral failure to buy or sell futures contracts.

The purpose of futures contracts is to divert investment demand away from gold. The existence of futures contracts does this through many ways. First, a wealthy person who may be interested in buying gold will be encouraged to buy futures contracts instead, because the gains are said to be greater if gold goes up. Therefore, this person buys a paper promise, instead of buying physical gold, and the investment demand has been properly diverted.

Second, after the wealthy person buys a futures contract, the price of gold is manipulated downward by the expiration date, so that the futures contract expires when the gold price is lower than the paper contract price. Therefore, the paper contract expires, "worthless".

Third, if the price does go up, the person who bought the paper contracts is rewarded with more paper dollars, which again diverts investment demand away from physical gold, because the paper game worked brilliantly in the mind of the sucker. Thus, the paper pushers succeed either way.

Fourth, another wealthy person may feel that he may always have the opportunity to buy a futures contract for gold, instead of buying gold itself. Therefore, this other investor may think, "If gold really begins to take off, then I'll buy a futures contract, but not today." This also diverts investment demand away from physical gold, since the buying decision is delayed. This person will not buy gold until after the futures market collapses, and then they will realize (too late) the difference between a paper promise and gold. Here are the key differences:

An expiring paper contract is no substitute for gold. Gold does not rust. Gold does not expire. The same piece of gold lasts for thousands of years. That is one of the very important properties that makes gold valuable in the first place. Virtually every other asset you can buy decays in value over time, whether a car, or a house, or a dollar due to constant erosion of inflation. A futures contract expires over time. This is the exact opposite of gold.

A paper promise is no substitute for gold. Gold is payment in full. A paper contract can be defaulted on. Gold cannot default. Contracts can fail. The excessive creation of futures contracts, and the few entities who are creating most of them, (the bullion banks that are already short the 15,000 tonnes) virtually guarantee performance failure.

Gold -- Sharefin, 22:29:52 11/18/03 Tue

The glitter of gold is growing

NEW ORLEANS — Scheduled over the Halloween weekend, in the city of the vampire Lestat, the 30th annual New Orleans Investment Conference was predictable for its emphasis on immortal gold. Here, exhibitors hawk gold bullion coins, numismatic gold coins, old gold mines in South Africa that can be reborn with new technology, and new gold mines from Canada to Mongolia that may unearth new riches in precious metal.

People don’t attend this conference to hear the latest in mutual fund offerings. For that, people go to the Morningstar conference in Chicago or a Money Show in any number of cities. No, the New Orleans Investment Conference has traditionally been the largest gold bug meeting in the country. As such, it tends to be a Johnny-one-note affair, with much discussion of surplus government and intimations of future economic collapse.
~~~~
Where is the price of gold going?

Here there is only one direction: up. From its recent price of $376 an ounce, newsletter writer Richard Russell predicted it would soon be at $556 an ounce. Some of the speakers saw it as high as $1,000 in a few years.

Will it go that high?

Maybe. Maybe not. The only thing certain is that governments around the world are printing paper money faster than the global economy is growing. Printing money is cheap. Getting gold out of the ground involves real work and real costs.

Gold -- Sharefin, 22:28:19 11/18/03 Tue

Gold remains a precious, precarious investment

In ancient times, kings craved it. Today, we mark wedding vows by exchanging bands made from it. Even the streets of heaven are said to be paved with it.

But gold's status as an investment isn't as clear.

For some, owning gold bullion or shares of gold stocks is an important hedge against inflation and downturns in other investments. For others, gold is seen as an investment that is too susceptible to major price swings.

At the moment, at least, gold is back on more investors' radar screens, thanks to increases in the per-ounce price of the precious metal over the past two years and strong showings for mutual funds focused on gold and mining operations.

Gold -- Sharefin, 22:26:50 11/18/03 Tue

National Board of Trade to begin gold, silver trade

India's largest commodity futures exchange, the National Board of Trade, plans to add more commodities including gold and silver to its trading list and switchover soon to a screen-based system from open outcry, its executive director said on Saturday.

"We have received an in-principle approval from the government to begin futures trading in several other commodities like bullion," AS Jeyakumar, told Reuters in an interview.

He said the final permission from the government was expected any time, and the exchange should begin trading in gold, silver and cottonseed meal in the first quarter of 2004.
~~~
The country, with a population of more than a billion people, is the world's largest importer of gold and edible oils and third largest cotton producer. Indians buy gold worth $8.5 billion and edible oils worth $9.0 billion every year.

India recently allowed futures trading in all commodities including bullion, grains and metals.

Fiat -- Sharefin, 22:19:14 11/18/03 Tue

Warren Buffett's View of the US Dollar

If asked for the great names of art, theater and science, people immediately respond with giants like daVinci, Shakespeare and Newton. When someone mentions finance to me, the outstanding name that comes to my mind is Warren Buffett.

When Warren Buffett speaks, I listen. And in this regard, two recent articles are extremely important.

In an article about Mr. Buffett, Barron's wrote last month:

"Buffett, who has spent a lifetime successfully playing the percentages, says that buying Treasury bonds at current levels probably isn't a smart move. He noted that Berkshire could be earning $1 billion more annually on its investment portfolio if it shifted its cash holdings into longer-term Treasuries, but Buffett doesn't believe the risk is worth the added income." [emphasis added]

Mr. Buffett is walking away from $1 billion a year because he says the risk of US Treasuries isn't worth it. What 'risk' is he referring to? Could it be the risk that arises because US Treasuries are denominated in US dollars?

Mr. Buffett inasmuch confirms this conclusion in an article written by him and published just recently in the online edition of Fortune. He says:

"Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in and today holds several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline."

Gold -- Sharefin, 22:13:27 11/18/03 Tue

Breaking News - GOLD BREAKS $400

During overnight in Asian trading, Tuesday U.S. local time, gold burst through resistance to trade, for the first time since early 1996, at and ABOVE $400 an ounce! Large amounts of buying was noted by securities hedge-funds, short covering and stop-limit buys propelling gold to $400 as the U.S. dollar continue to show additional weakness in Tuesday’s markets now at new multi-year lows. Gold is now up nearly 25% YTD. For its part, silver followed gold higher today as it hit trades just below fresh 52-week highs set yesterday and last Friday, trading just around $5.40 an ounce for DEC delivery. Silver is now 23% higher YTD, 7% in the prior 5-days and nearly 10% in the previous 3 weeks!

With $400 just triggered, stop-loss buys (short covering) has pushed prices dramatically higher with resistance seen from physical selling and long liquidation. As $400 falls, a quick spike to higher levels is expected but is likely to be met with profit taking, consolidation in the coming days as gold pushes higher. It remains to be seen how long $400 will be maintained in the short-term, but soon enough $400+ will become our new trading level as gold prepares to assault prior 1996 highs just under $420 an ounce and above. Still, gold has risen mostly in U.S. dollar terms - the next major gold bull market stage will occur with global market participation. Until this event occurs, gold will be well supported with a depreciating dollar seen to lose an additional 20-40% in the coming years.

Fiat -- Sharefin, 22:10:48 11/18/03 Tue

Why Gold's Gleam Isn't Likely to Dim

The USAA Precious Metals & Minerals Fund's Mark Johnson on why the weak dollar and low interest rates bode well

The S&P Gold index has surged 52% this year through Nov. 14, vs. a 19% rise in the broader S&P 500-stock index. And in the last few days, the price of gold has rallied -- hitting $397 on Nov. 18 -- as the U.S. dollar fell amid a spate of news, including potential trade wars with China, falling foreign investment in U.S. Treasuries, and lingering worries about the mutual-fund scandals.

As long as the dollar stays weak, and the Federal Reserve holds interest rates at low levels, gold should keep its luster, says Mark Johnson, portfolio manager of the USAA Precious Metals & Minerals Fund. He figures its price could reach $435 next year. Even with the recent gains, Johnson thinks investors should own gold assets to lessen overall risk.

Fiat -- Sharefin, 22:07:45 11/18/03 Tue

FBI Sting Nets 48 Wall Street Arrests

NEW YORK (Reuters) - FBI agents on Tuesday arrested about 48 Wall Street foreign exchange professionals in a sting targeting several top firms thought to have defrauded small retail investors of millions of dollars.

Federal Bureau of Investigation officers swarmed on 2 World Financial Center late on Tuesday afternoon and led out men in business suits, taking them away in vans and cars. Some of the men covered their heads with overcoats while others bowed their heads to hide from television cameras and photographers.

"It's currency fraud, securities fraud," said one agent at the scene of the arrests. "It's been a long investigation. The arrests have been ongoing today."

A Madison Deane and Associates Inc. employee, who asked not to be named, said the FBI arrested seven people at his firm, which offers currency broker services.

"We were just sitting there working, and they (FBI) just came in and stormed the place," the man said, adding that the FBI agents took out three partners, three vice presidents and one broker all in handcuffs at about 5:30 p.m.

"They had guns. They came in with vests and said 'Nobody move,"' the employee told Reuters.
~~~
The unexpected operation came at a time when America's financial markets have been hit by scandal after scandal. Corporate wrongdoing by companies like Enron Corp., which went bankrupt in 2001, sparked a massive accounting scandal and led to the demise of one of the world's largest accounting firms, Arthur Andersen. The scandal rocked investor confidence and unearthed irregularities at other companies.

Since then Wall Street equity research companies have been targeted by prosecutors for inflating stocks during the Internet boom of the late 1990s. More recently the mutual fund industry has been investigated on charges of improper trading.

Until Tuesday the $1.2-trillion-a-day foreign exchange market, whose primary clients include top companies, millionaires and banks, has remained relatively untainted by scandal.

The names of other companies involved remained unclear, but sources told Reuters that about four companies were targeted. Sources said none of the companies targeted are household names outside of the securities industry but are well known and regarded in the Wall Street community.

Periodic Ponzi Update PPU -- $hifty, 00:12:30 11/17/03 Mon

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,930.26 + Dow 9,768.68 = 11,698.94 divide by 2 = 5,849.47 Ponzi

Down 40.79 from last week.

Thanks for the link RossL !

This week should be quite entertaining !

Go GATA !

Go GOLD !

Go Comets !

$hifty

Gold -- Sharefin, 22:42:52 11/12/03 Wed

Strong metal prices tilt universe

Gold is in its best position in seven and a half years, silver is going back to multi-year highs, platinum boasts a remarkably bullish formation, copper has exploded to nearly a dollar a pound, nickel is worth more than $5 a pound and lead has blasted to $600 a tonne. Even zinc is potentially coming out of its coma
~~~
We’ve drawn analogies with the early 1970s and those remain just as intact with the CRB Index back to levels we last saw in 1997. The bull is more than in. Long may it last; even those cheesy radio adverts now prevalent in the New York metro area advertising gold coins to first time metal investors.
~~~
If you had bought every gold stock on our watchlist in equal weight to their market cap, you’d be up two fifths for the year. In other words, it’s like shooting fish in a barrel for the time being.

Periodic Ponzi Update PPU -- $hifty, 00:29:46 11/10/03 Mon

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,970.74 + Dow 9,809.79 = 11,780.53 divide by 2 = 5,890.265 Ponzi

Up 23.60 from last week.

Thanks for the link RossL !

Go GATA !

Go Gold !

Go Comets !

$hifty

Fiat -- Sharefin, 04:04:28 11/08/03 Sat

Confidence wanes as tent pegs fly.
First Russia's bourse & now Sri Lanka's

Sri Lanka crisis triggers stock slide

From the Far Side -- Sharefin, 23:21:58 11/07/03 Fri

Seems that there are whispers in the markets....

------------------
NY gold ends up despite healthy U.S. jobs growth

COMEX gold ended higher Friday, rescued by short covering in rumor-filled trade after safe-havens fell on the best evidence yet that the U.S. economic recovery had caught up to the labor market.
~~~~~
Gold fell at the open as the dollar surged on U.S. Labor Department data showing nonfarm payrolls surged 126,000 in October, more than double the 58,000 increase expected by Wall Street. The unemployment rate fell to 6.0 percent from 6.1 percent in September.

Those moves were reversed late morning and the market swirled with various rumors and talk -- denied by the Department of Homeland Security -- that the U.S. terror threat level might have been raised

"It was clearly all dollar-driven, and the economic numbers," said Robert Gottlieb, bullion dealing chief at HSBC. "The whole market was positioned for a much stronger dollar.

"Obviously helping propel (gold) were rumors of the terror alert and hijacking," he continued.

----- Original Message -----
Subject: From the far side

Just read on the YHOO board

An intensive secret hunt is underway in the United States and Canada
since mid-October for an al Qaeda operative known to be at large with
enough radioactive material for a "dirty bomb" strike in a North
American city.

This is revealed by DEBKA-Net-Weekly's exclusive counter-terrorism
sources.

A warrant for his arrest in both countries has been signed for a
Saudi national called Adnan Al Shukri Jumah, aged 27, student of
nuclear engineering employed at the 5-megawatt nuclear reactor for
research at McMaster University in Hamilton, Ontario. He was under
surveillance when in early October, he stopped attending class at the
university and thought to be at home. His disappearance was not
remarked until a few days later when a large quantity of radioactive
material was missed from the university's nuclear reactor.

American and Canadian investigators suspect Al Shukri Jumah has the
bomb assembled ready for detonation. Since he gave his watchers the
slip, Washington and Ottawa have called in large reinforcements for
the race to catch him before it is too late.

A number of informed counter-terrorism sources told DEBKA-Net-Weekly
that American authorities first heard about Al Shukri Jumah's terror
mission on al Qaeda's behalf from Khaled Sheikh Mohammed, the senior
operative of the fundamentalist network captured at his home in
Karachi one night in March. Sheikh Mohammed described the wanted man
as a one-man cell trained to build radiological bombs capable of
environmental contamination from scratch. From Sheikh Mohammed, US
counter-terror agencies learned for the first time about the single-
cell al Qaeda chemical, biological or nuclear strike-teams consisting
of lone operatives trained to operate solo. The experts had
previously assumed that each unconventional weapons cell numbered
several members and was supported by broad logistical backup crews.

Explaining how Al Shukri Jumah fooled his watchers, our sources say
he kept himself to himself at all times, had no friends, kept
strictly to his study and work schedule at the reactor and habitually
left the facility at the same time as his colleagues. His "normal"
behavior, the sources said, apparently gave him entry to the place
where dangerous materials were stored without raising suspicion. Bit
by bit, he smuggled out enough radioactive material to build the
dirty bomb at home.

His disappearance raises the following questions in the minds of
senior investigators, according to DEBKA-Net-Weekly's counter-
terrorism sources:

Why were there no agents observing the subject inside the reactor?
These sources did not disclose which security agencies were
responsible for the surveillance.
Who gave Al Shukri Jumah a Saudi Arabian under suspicion access to
the reactor? And how is it that no one noticed increasing amounts of
nuclear materials were disappearing over a period of months?
How was Al Shukri Jumah able to give his watchers the slip?
Was he tipped off by an inside source in the US or Canadian security
services?
A senior source close to the hunt says: "These points certainly need
clarifying. But catching this man before disaster strikes is
paramount."

Gold -- Sharefin, 23:05:09 11/06/03 Thu

Go long silver, short Fed arrogance

"Once a central bank is found unworthy, then all bets are off," said the sardonic Grant, recommending silver as a "hedge against the contingency of organised depreciation of the US dollar. "In fact, he positions gold and silver as the ultimate anti-currencies; not subject to the whims of "accountants and MBAs."
~~~
Grant speculates that at some point the accumulation of dollars would end when one of the Asian banks decides that the whopping stockpile of American paper is sufficient. “Would you not consider an alternative to this monetary asset that comprises the bulk of global reserves?”

The obvious alternatives are gold and silver, especially because the Federal Reserve is wilfully depreciating the dollar according to Grant. “The latent power of a move away from the dollar is almost impossible to imagine. Some $6 trillion is held today at interest rates a little higher or lower than zero. . . Japan has several trillion more. So call it $8-10 trillion that is held in dollars earning no return. What might cause these dollar holders to seek a hedge? . . . Do we have a critical mass of dollar holders who have lost confidence in the currency and want to switch to an alternative?”

Grant self deprecates about the continued postponement of his forecast for the Fed to finally overplay its hand, but he has a point that we are currently witnessing one of the great monetary dramas of all time and he makes a very persuasive case for being long precious metals.

What’s more, he likens the present infrastructure for selling metal securities to the equity market in 1947. Few people owned stocks, now few don’t. Similarly, an elaborate infrastructure and complex instruments developed to sell gold rather than to buy it – he’s betting on a spectacular turnaround on that front.

Grant is especially bullish on silver because it has more favourable supply-demand characteristics.

ChartsRus -- Sharefin, 10:51:59 11/06/03 Thu

New charts series - courtesy of StockCharts.

The Matrix

Fiat -- Sharefin, 10:14:03 11/06/03 Thu

In Monetary Affairs, Crisis Follows Crisis

"The world is in permanent monetary crisis," Murray Rothbard once observed (in Making Economic Sense), "but once in a while, the crisis flares up acutely, and we noisily shift gears from one flawed monetary system to another." Monetary systems built on floating fiat currencies are fragile things. Most of the world currently operates under this arrangement.

Fiat -- Sharefin, 10:11:33 11/06/03 Thu

Bank raises UK rates to 3.75%

The Bank of England has raised interest rates to 3.75% - the first rise in almost four years.
The move was widely expected and follows concerns that consumer debt and house prices were rising to dangerously high levels.
~~~
Damaging?
The previous rate of 3.5% was the lowest for 48 years.
~~~
But it warned: "This initial rate rise should not turn into a trend of rising rates."
~~~
"Having waited patiently for UK households to bring their borrowing under control, it has finally decided to intervene. The price of doing nothing was deemed to be too great."
~~~
Economists have warned that more interest rate increases are likely over the next year.

Some are forecasting that rates will be as high as 5-5.5% by the end of next year.

Gold -- Sharefin, 10:04:44 11/06/03 Thu

Newcrest soars on takeover rumours

Newcrest Mining's share price took off yesterday in response to speculation that a cashed-up Newmont Mining, the world's biggest gold producer, was about to make a bid for the $4.15 billion group.

Gold -- Sharefin, 09:59:25 11/06/03 Thu

Newmont to raise $1 bln, acquisition rumors fly

Newmont Mining Corp. (NYSE:NEM - News) announced on Tuesday it will raise about a billion dollars in equity, a hefty sum that immediately set tongues wagging that the world's biggest gold producer was readying to make a big acquisition.

Taking advantage of a share price that has leapt nearly 50 percent his year, the Denver-based mining giant said it will offer 20 million of its shares to the public. It expects the underwriters of the stock issue to take up a further two million shares to meet strong demand.

According to a Newmont spokesman, the price the shares will be sold at will be set on Wednesday. Newmont's stock closed at $43.31 in New York on Tuesday, up 43 cents and near its six-year high of $44.70. News of the share issue came after the stock market had closed.

The 7.5-million-ounce-a-year gold producer said in a statement the money raised would be used for "general corporate purposes, which may include new project development costs, other capital expenditures and debt reduction."

But an analyst who asked not to be identified said the mining giant could well be readying to pounce on a peer, despite Newmont's public statements recently that it has its hands full with its own development projects.

Silver -- Sharefin, 09:57:41 11/06/03 Thu

Silver use in photography seen surviving digital age

Photographic demand for silver should remain almost flat in coming years, even though digital cameras threaten silver's importance to the industry, as developing countries use more traditional film and retailers increasingly print digital images on photo paper, a film industry expert said Wednesday.

"We firmly believe that basically it's going to be flat. So silver is not going away. I think that is my message," Don Franz, editor of Photofinishing News Inc, said at a precious metals conference sponsored by Gold Fields Mineral Services and the Silver Institute.

Photography has been one of the largest sources of demand for high quality silver. The effect of light on silver halide is key to the photographic process. Silver halide crystals made from a soluble form of silver like silver nitrate and are suspended in unexposed film and photography paper.

Silver sales in this category were down 4 percent in 2002, according to GFMS data, the third straight year of decline.

Franz did say there would be a small net decline in demand for photographic silver.

He projected that this year the number of digital cameras will exceed the number of film cameras and the number of cell phone cameras could exceed the number of digital cameras.

Film making icon Eastman Kodak (NYSE:EK - News) announced in September that it is changing it business strategy toward digital products, away from its flagging film business.

But Kodak and rival Fuji Photo Film are still making significant investments in silver halide, he said.

Use of film is declining at an 8-10 percent rate in the United States and a couple of percent in Europe, Franz said. But it is increasing at a 10-15 percent rate in China, India and Russia.

Meanwhile, Franz predicted retail film developers -- kiosks, Wal-Mart and online mail order -- will process more digital images on photo paper because it is more versatile and higher quality than ink jet printers used by digital camera owners at home.

"We feel that you are actually going to see growth in the number of prints being used," Franz said. "That may offset some of the decline that you will see in the use of silver."

Over the last 2 years digital printing on silver halide has grown, Franz said, adding that the concern about the loss of that business has been "overemphasized."

Silver remains widely used in motion picture films, x-rays and graphic arts.

"X-rays consume more silver than any other product -- photographic film, paper and graphic arts." Franz said.

Gold -- Sharefin, 09:56:03 11/06/03 Thu

Vietnam likely to remove import quotas for gold bullion in 2004

Vietnam is likely to remove its import quota requirements for gold bullion in 2004, an official from the Vietnam World Gold Council told Platts Wednesday.
~~~
The new gold management policy has impacted mainly the gold bullion market, as there are no quotas required for gold jewelry imports. But with the relaxed new policies, Vietnam is expecting an overall increase in gold demand for 2003. The country has projected a gold demand of 62-63mt in 2003, which is 4-6% higher year-on-year compared with the 59.5mt demand recorded in 2002. "Demand has also jumped recently because the wedding season has started in Vietnam. As a result, domestic prices have also risen in the past few weeks," the WGC official said. "Demand is so strong some traders have even run out of stock recently," he added. Vietnam's wedding season started in September and is expected to end in late January.

old news -- Sharefin, 09:38:51 11/06/03 Thu

Giant Silver Nugget Found in Australia

Reuters

SYDNEY (May 25) - A silver nugget the size of a wallaby and weighing 363 pounds has been discovered in the Australian outback and will be put for sale at auction.

Veteran prospector Leslie White, chairman of East Coast Minerals NL, said the nugget -- unearthed 82 metres below the surface -- was about 40 times larger than any he had preivously encountered.

"When I first saw it I said: 'Goodbye Charlie -- it's going to take three Sumo wrestlers to lift!'" White told Reuters.

"As far as I know, it's the biggest one ever found in the world."

The nugget contains about 2,000 ounces of silver, making it worth only about $10,000 dollars at today's depressed silver prices.

However, White said he hoped nugget would fetch 10 times as much at an auction planned in a couple of weeks.

The nugget is about 80 cm long, 40 cm wide and 30 cm deep. It was discovered two weeks ago at the Elizabeth Hill lode, operated by East Coast and partner Legend Mining, in far north Western Australia.

Gold -- Sharefin, 20:23:28 11/05/03 Wed

Battle for Russian Gold Draws Western Miners

Political risk abounds and business is plagued by murder and organized crime -- but it takes more than that to put off foreign pioneers lured by Russian gold.

Driven by booming prices, Western players are overcoming their caution and starting to tiptoe through tricky local legislation to tap one of the world's biggest unexploited gold fields.

The fragmented gold industry could be at a turning point and is seen as ripe for consolidation.
~~~
Gold firms looking to branch out of traditional but crowded markets like South Africa say now is the time to try their luck in riskier territories such as Russia.
~~~
With both London and Toronto vying for Russian gold, analysts say the auction in the second quarter of 2004 of the giant Sukhoi Log deposit in eastern Siberia is likely to turn into a major battle for control over Russian gold and draw some major foreign names.

Gold -- Sharefin, 22:12:28 11/04/03 Tue

Barrick, JP Morgan Again Face Gold Antitrust Suit

An antitrust lawsuit against Barrick Gold Corp. and J.P. Morgan Chase & Co Inc. looks set to go ahead after a U.S. court refused to budge from its earlier ruling that the case be heard, court documents made available on Tuesday show.

The world No. 3 gold producer and the U.S. financial giant had asked a Louisiana district court judge to reconsider her previous order that the suit, alleging they colluded for over a decade to suppress the gold price, proceed.

New Orleans-based coin and bullion dealer, Blanchard and Co., brought the case against the two firms last December.

Toronto-based Barrick and New York-headquartered J.P. Morgan Chase tried to get the case thrown out, but were unsuccessful. They then attempted in September to get the court to rethink its earlier ruling, but this too failed, according to a court order dated Nov. 3.

Instead the parties received a reprimand from Judge Helen Berrigan.

"While the defendants are understandably dissatisfied with a ruling not in their favor, this is neither the time nor method to raise these issues again," Berrigan's order said.
~~~~
Blanchard, which calls itself the largest U.S. retail dealer in rare coins and precious metals, said the ruling meant discovery, a legal term meaning both sides make available to each other documents relevant to the case, could now continue.

"Barrick and Morgan appear to have lost the chance to delay the discovery phase of the case any further," said Blanchard chief executive, Donald Doyle Jr.

Blanchard alleges Barrick and J.P. Morgan Chase made $2 billion in profits from short selling gold. Short selling, or hedging, involves selling something not owned, at current prices, in the belief prices will drop in the future.

Doyle says this practice in the gold market is responsible for depressing the bullion price. Free of short selling, Doyle reckons the gold price would be above $700 an ounce. Bullion was last bid at $379 an ounce.

Barrick has one of the largest hedge books in the gold industry. The book, off its peaks, currently consists of about 16 million ounces of sold-forward gold. Blanchard alleges J.P. Morgan financed Barrick's short selling with "remarkably advantageous terms" that were not available to others.

Gold -- Sharefin, 22:08:51 11/04/03 Tue

High hopes for US gold ETF

Commodities strategist for Tudor Investment Corporation, Steve Matthews, says that the launch of the World Gold Council’s Exchange Traded Fund in the US could soak up more than three million ounces of the yellow metal based on the performance of Australia’s Gold Bullion fund.
~~~
Matthews says that a reasonable expectation is for the US fund to be a multiple of its Australian counterpart. At sixteen times the size of the Australian economy, Matthews does a straightforward conversion to speculate that the US gold ETF could absorb around 3.5 million ounces within six months of initiation.

Were that to happen, the fund would be worth $1.4 billion at current gold prices, or about 1.3% of the total value of all the world’s publicly traded gold and silver equities. If that rate of uptake were maintained then, on an annualised basis, the market would benefit by losing the equivalent of a whole year’s new mine supply from a Newmont or AngloGold-Ashanti.

Gold -- Sharefin, 22:06:12 11/04/03 Tue

One year later, Bonner has Prechter beat

-- At last year’s New Orleans Investment Conference, deflation was on everyone’s lips. We doubt it is going to feature as prominently this year though there is no shortage of dire predictions for the US economy judging by speakers’ topics listed on the schedule.
If there is one immediate note to make it is that of all the prognosticators last year, Bill Bonner stands out as among the most perspicacious urging investment in all metals for all the reasons now commonly cited as the cause of their improvements.

Bonner, publisher of the Daily Reckoning newsletter engaged in an informal, but memorable, head-to-head forecasting contest with Elliot Wave’s Bob Prechter who had billing on the same day. Prechter, who was always at risk of being mobbed by fans, advocated US Treasuries, American dollars and Swiss francs. He was firmly in the deflation camp and argued that bullion and gold equities would be a bust. Bonner went the other way in his deflationary scenario, advising to sell out of the dollar in favour of anything to do with gold.

Gold -- Sharefin, 21:58:46 11/04/03 Tue

Gold conspiracy collapse is just a matter of time

Bill Murphy owns the Le Metropole Café Web publication and heads up the Gold Anti-Trust Action Committee.
Mineweb: Bill, thanks for agreeing to this interview. Let’s get straight to it – gold is $130 per ounce higher than its 2001 lows. Surely that is sufficient evidence that there is no conspiracy to suppress the price of gold?

Bill Murphy: Au contraire! Two years ago when we met with gold around $265, the GATA camp was saying where the price of gold was headed and why. You could barely find a bull in the mainstream world in those days who would talk about gold even clearing $300.

The price of gold is shooting up despite the efforts of the Gold Cartel to contain it. The physical market has been on fire as the Russians, Chinese, Turks, Indians, and Arabs keep loading the gold boat as a group. Meanwhile, the gold producers continue to reduce their hedges. In addition, there has been a “paradigm shift” about gold as an investment. Volatile bond markets, shaky stock markets, and a sinking dollar have sophisticated investors buying gold these days. The yearly gold supply/demand deficit has been running about 1,400 tonnes and is growing. The cabal is finding it difficult to come up with enough supply to ration this surging demand.

Gold -- Sharefin, 21:55:04 11/04/03 Tue

Looking for a $1,000/oz gold overshoot

Paul van Eeden picks stocks while opining on markets and money for International Speculator newsletter.
Mineweb: Paul, thanks for taking time to chat to us. You timed the dollar’s weakness accurately and predicted corresponding strength in gold long before the crowd. How did you do it?

Paul van Eeden: I realized in 1997 that the gold price was insensitive to physical supply and demand paramaters such as those typically used to analyze commodities. Instead, believe it or not, gold was acting like a currency, and the gold price was responding to changes in money supply and exchange rates. This is, of course, what one would expect, since gold is money. I focused my research on gold as a monetary instrument and found that not only does the trading history make perfect sense, but the models I created have quite good predictive potential, as you mentioned. These models allowed me to predict the rise in the gold price and the decline in the dollar, both of which have a long way to go.

Mineweb: Just before this past summer you released a fascinating perspective on the long-term relationship between gold and the dollar. You forecast gold to double quite soon and possibly triple within five years. Are you sticking with that?

Paul van Eeden: Absolutely. I expect the gold price to increase beyond $1,000 an ounce and because markets have a tendency to overshoot on the upside, I would not be surprised to see gold much higher even than that. As an investor, or more accurately, a speculator, when the price of something exceeds its intrinsic value, I look for something else to buy. Therefore I am monitoring the gold price very carefully. Once the gold price exceeds my target I will shift into other sectors, irrespective of the fact that I think the gold price will exceed that target.

Another important point, on the topic of the gold price: even though I am forecasting gold in excess of one thousand US dollars an ounce, about two and a half times its current price, that does not imply that I think the gold price will double in other currencies as well. In fact, it may well not. I do expect, however, that the gold price in almost all currencies will, over the long term, increase in proportion to the inflation rate of those currencies and by inflation rate I don’t mean an increase in some or other index, I am referring to the increase in money, as measured, in the US for example, by M3.

Gold -- Sharefin, 21:28:55 11/04/03 Tue

Ghana gold giants set to merge

South Africa’s AngloGold and Ghana’s Ashanti Goldfields look set for marriage soon, creating the world’s largest gold producer with 26 mines on four continents.

Ashanti, burdened by high operating costs and problems raising cash to pay short-term debt, received the go-ahead from the Ghana govenrment on Tuesday, although parliament here will have the last word on the merger.

The merged company would produce 7.5 million ounces of gold a year.

The bid is subject to government approval here because the Ghanaian government is also the regulator of the target company.

Fiat -- Sharefin, 21:27:41 11/04/03 Tue

Ted Butler and Silver

Ted has in his heart the silver bug, like me. He does more for the silver investor and futures investor
than anybody did before. If today you have 2 to 3 million ounces of silver being purchased by investors monthly, I believe 90% of that is because of what Ted Butler writes. I think he makes the biggest service for the American investor.(:-)))
~~~
Why to invest in cash silver?

1. The supply demand situation is unbalanced.

2. We are in deficit for years.

3. We are depleting existing silver bullion inventories.

4. We are coming to a shortage situation

5. You don't have new mines coming soon.

6. The old mines' reserves in the ground are minimal and coming to depletion

7. New uses for silver daily

8. When inventories will be depleted, silver will be the only metal with monetary value. Monetary value is when central banks are accumulating and they are going to accumulate silver in the future for strategic reasons.

9. You have 1 billion oz obligations by short sellers and banks that sold certificates with no real silver behind the certificates. This obligation of 1 billion ounces can not be paid back with real silver and must be monetized at dream prices

10. If you are not going to use 1 oz of silver industrially in the next 50 years, you are still not going to bring the stocks back to old peak levels.

11. 5000 years we accumulated silver, how many thousands of years will it take to rebuild those inventories?

12. If you are not going to use one oz of silver industrially in the next five years, the stocks of silver will still be lower than those of gold. And remember, gold is selling for 380 and silver at 5.

Who is going to invest in silver?

1. If you have free money to invest

2. Who made his homework and believes that based upon supply/demand, silver is a good case for investment.

3. Who believes that silver will rise in coming years to tremendous value but is not interested for a scalp.

4. Who wants to enrich himself or his family and has a lot of patience for holding.

The No No's of investing in silver

1. Don't borrow money, use only free, extra money

2. Don't speculate short term.

3. If you buy a certificate from a dealer or a bank, look at the small print and verify that you can take possession anytime.

4. Never go short silver and don't sell options. For every contract short, you must be prepared to lose a half million dollars.

5. Never play the ratio between gold and silver on the Comex. Everything is artificial on the Comex and they are going to take you to the cleaners.

6. Don't believe any bearish story on silver. They are planted and paid for by the short sellers and the only reasons the stories appear is to take away your silver.

Value of silver

Because I am a big believer in silver, probably my silver value is going to be different from other people. I'm going to quote value, not in dollars but in real life values.

1. For one oz, you are going to able to buy a dinner for 5 in a good restaurant.

2. For 50 oz, a family of four can live for a month.

3. For 100 ounces, you can buy a year's tuition in a good university

4. For 150 oz, you will be able to buy a luxury car.

5. For 2000 oz, a nice house

6. For one oz of silver you will buy one oz of gold.

Fiat -- Sharefin, 21:24:22 11/04/03 Tue

RBA rate hike puts sterling in focus ahead of MPC

Sterling was buoyant on Wednesday amid expectations that the Bank of England would raise interest rates this week -- a prospect that gained momentum after the Reserve Bank of Australia raised rates earlier in the day.

Gold -- Sharefin, 21:22:34 11/04/03 Tue

Gold "nano-bullets" shoot down tumours

Gold "nano-bullets" could seek and destroy inoperable human cancers, suggest new studies by US scientists.

The tiny silica particles are plated with gold and heat up when near infrared light (NIR) is shone on them. This kills the cancer cells. Tests on human breast cancers, both in the test tube and in tumours in mice, were highly successful, the researchers report in the Proceedings of the National Academy of Sciences.

"The nanoshells are designed to absorb near infrared light and convert that light to heat," explains Jennifer West, who led the study at Rice University, Houston, Texas. This is possible because the body's normal tissues are "essentially transparent" to NIR.

West says the potential benefits of the treatment should be that, unlike other cancer treatments such as surgery, it would be non-invasive. Both NIR and the nanoshells are completely harmless by themselves, she says.

"We believe that we should also be able to treat very small metastases, not detected yet," West told New Scientist. More recent, unpublished work by the group, has shown that the gold bullets can be injected into the blood stream and find their way to cancer cells in mice.

"These results are promising, particularly for tumours that cannot be treated by surgery," says Emma Knight, at Cancer Research UK. "However, the studies are at a very early stage."

The Rice University team created nanoparticles from a non-conducting core of silica with a diameter of 110 nanometres and a 10 nm thick metal shell. Gold was used because it is biologically inert.

Gold -- Sharefin, 02:08:27 11/04/03 Tue

K12 - Every American Born Will Need....

Fiat vs Gold -- Sharefin, 02:04:14 11/04/03 Tue

Auspec
Here's the link active:

The New "Sons of Liberty"

Periodic Ponzi Update PPU -- $hifty, 01:28:00 11/03/03 Mon

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,932.21 + Dow 9,801.12 = 11,733.33 divide by 2 = 5,866.66 Ponzi

Up 142.64 from last week.

Thanks for the link RossL !

Go GATA !

Go Gold !

$hifty

Hultberg Link Corrected -- auspec, 18:27:32 11/02/03 Sun

http://www.financialsense.com/editorials/hultberg/2003/1022.html

Awesome read!

We Got Firebrands! -- auspec, 17:54:15 11/02/03 Sun

Here's another American Patriot.. Nelsom Hultberg & his "Sons of Liberty" piece {snippets}:

http://www.financialsense.com/edito.../2003/1022.html

Fair use copyright

Americans for a Free Republic (AFR) is now a reality, and we have a scintillating website up to spread our message. Our website is meant to be a RALLYING POINT around which all lovers of freedom throughout the world can coalesce. It is meant to be a revolutionary force that can gather together the talent, money, and ideas to challenge the black limousine crowd in Washington and finally end their monstrous Leviathan.

Visit our website http://www.afr.org and learn:

Why all political third parties fail.

How to correct the two major flaws that doom third parties to ineffectuality.

How our innovative strategy will dramatically revolutionize politics in America.

How gold money and equal tax rates are the weapons to bring this about.

How we can stop the growth of Big Government cold.

As noted above AFR's goal is educational; it is not to ACTUALLY FORM the Liberty Party. That will come later by the appropriate professionals and operatives skilled in such matters. We are only interested in educating people about the necessity of doing so along the lines of our innovative "two pillars strategy." We plan to build a massive constituency of prominent, influential, educated, rebellious Americans -- a vanguard to spread throughout the country, to do the actual selling of the idea of a Third Party based upon "gold money and equal tax rates." We wish to be the hub of the wheel that generates thousands of spokes (dedicated activists) that branch out and proselytize all the people in their respective spheres of influence.

Our site content is geared toward the intelligent reader and viewer. We don't wish to try and educate the masses. We wish to reach the intelligentsia of society, who then will sell their fellow intelligentsia. Once a sizeable portion of this group has been won over, the masses will follow.

Who are the intelligentsia? All those of you in this world who understand the power of ideas in the unfolding of history. You may be a teacher, a scholar, a pastor, an entrepreneur, a banker, a soldier, an artist, a publisher, a moviemaker, a laborer. But whatever your calling, the one common fabric you share is the understanding that ideas matter, that history moves toward the good because of RIGHT IDEAS, and that it moves toward evil because of WRONG IDEAS. It is fallacy and sophistry that are the main precursors to dictatorship.

This is the nature of all mass movements in history. This is how the American Revolution was launched. Only a small portion of the colonists were actually for independence from Britain at the time. But they were the intelligentsia -- influential, prominent, educated, and rebellious. They were leaders in their personal spheres of influence. Their cause began in the 1760's via Patrick Henry in Virginia along with Samuel Adams, John Han**** and the Sons of Liberty in Massachusetts. The Sons of Liberty got together every month or so in the local taverns of Boston, and then expanded their gathering in the early 1770's to Boston's famous Old South Meeting-house where thousands of fellow rebels joined to show their true colors to the Tories. Out of this came the Boston Tea Party in December of 1773, which led to Lexington and Concord -- "the shot heard around the world" -- and full-blown revolution. It was the Sons of Liberty acting as the hub of the wheel, and the intrepid spokes they established, that set the colonies on fire with the desire for independence from Britain. It was their provocative thinking and firebrand personalities that spread the idea of revolution throughout the land.

AFR hopes to become today's Sons of Liberty, to convince the American people to abandon the despotic Demopublican policies of PAPER MONEY and PROGRESSIVE TAXES -- to restore gold backing to our currency and eventually abolish all forms of income taxation. This is to be done through an innovative Third Party strategy that will force the enactment of radical monetary and tax reform. The New Sons of Liberty will come from every walk of life; but the inspiration that will bring them together will be their love of liberty and a resolute refusal to kowtow to the contemptible shams of Demopublicanism.

Actually AFR is not laying the groundwork for a Third Party, but for a Second Party. We mean to adamantly challenge the statist establishment in America (which is the one-party monopoly of Demopublicanism). There are several million potential AFR patriots out there -- highly intelligent and desirous of "doing the right thing" in life. All of these patriots are leaders in their workplaces, their communities, their churches, their myriad spheres of influence. Perhaps you the reader are one of them. AFR's goal is to convince you that the right thing to do is to withdraw your sanction of Gargantua's welfare state. Our website http://www.afr.org hopefully will become a modern version of Boston's Old South Meeting-house where all members of AFR can coalesce to renew their spirit, to use as a recruitment tool for others to join the fight just as the original Patriots did in the years leading up to 1776. Once the country's intelligentsia has been won over to our cause, then the masses will follow and the Demopublican regime will crumble like the Berlin Wall.

Oliver Wendell Holmes said that, "A man must become a part of the action and passion of his times, lest he be judged not to have lived." The goals of AFR will thrust its members squarely into the action and passion of our times, which we feel are destined to become the most tumultuous to descend upon our nation since its beginning. We seek the doers, the dissidents, the contrarians to join our hub and build a New Sons of Liberty for the 21st century. There are still numerous Berlin Walls to bring down.

We are far from a majority in America today, but as Samuel Adams told his fellows in 1773 in the build-up to the Boston Tea Party, "It does not take a majority to prevail...but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men." Herein lies the goal of AFR. We intend to set brushfires of freedom throughout America. We intend to spread those brushfires until the flames and heat of resistance are so intense that Washington's tyrannical elites can no longer continue their usurpation of our rights. While the Clintons, Bushes, Rubins, Cheneys and Rumsfelds of today's America are different in method, they are basically the same in principle to Mikhail Gorbachev and Nicolae Ceausescu of yesterday's Russia and Romania. AFR intends to see that such Washington elites meet the same fate as their communist counterparts. While we do not intend to duplicate the Romanians treatment of Ceausescu, we certainly intend to duplicate the Russians' refutation of the weasel-tyrant Gorbachev. And we mean to extend such refutation to all future Demopublicans.

END

Comment: The Aaron Russo Presidential campaign Platform was announced by GATA in New Orleans this weekend. 12 points that free market and honest money advocates will applaud enthusiastically. To be put up at www.Russofor President.com in the near future.

They Just Need a little Push, No? -- auspec, 17:11:02 11/02/03 Sun

A few more thoughts about hitting Comex up for physical gold and silver:

The following snippet is from Alex Wallenwein's article at LeMet entitled "The Anti-Gold Camp's Last 'Big Guns'":

::::::::::::::::::::::::::::::::::::::::::

COMEX is "Overbought." Prices will Collapse.

Who cares about the COMEX, anymore? In a few years, COMEX will be utterly irrelevant to the world of gold, and its current price-discovery function will be a distant memory.

COMEX is to ninety-nine percent a cash-settlement market. That means that only one percent of COMEX plays are ever actually delivered in specie. That market will only survive as long as it remains lined-up with this secular bull-trend in gold. Should COMEX raise the margin requirements again a few more times, people seeking to trade real gold will simply go elsewhere, like, say, Dubai, for example. (The Euro vs Dollar Currency War Monitor's upcoming seventh issue has some surprising facts about the future of gold trading in the world. The price-setting function of gold trading will soon be performed in the physical market - and it likely won't happen in the United States, the way things are going.)

Right now, the COMEX is going up nicely, but that's mainly because the Arabs and Chinese are jabbing at the dollar. Sooner or later, COMEX will lose its relevance. Those CFTC guys had better look for a job somewhere!

END..............fair use copyright.

::::::::::::::::::::::::::::::::::::::::

Look @ G-E for this article in its entirety soon. Once again, Wallenwein is CLEARLY an ANOTHER disciple if not an out and out Friend! The price setting mechanism for world gold only delivers 1% of the time!! Might just be time to hasten the demise of Comex gold and silver, ne? They can raise the margins as high as they want.........if you have the margin money and take delivery you get a world class paper gold price for real physical gold and your margin money back. This is gold as cheap as the "Stalker" is getting and you can do your countrymen a favor in the process, w/o a trip to London!

1% delivery at Comex is simply ridiculous. A simple 5 to 10% will likely stop or expose the fraud.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Richard Russell Sees Market Immoralities --
From www.dailyreckoning.com fair use copyright:

The Daily Reckoning
Weekend Edition
01 November 2003, All Saints Day
New Orleans, Louisiana
By Addison Wiggin and Eric Fry

MARKET REVIEW: Russall Says – Gold To Reach $556

The Dow Jones Industrial Average put the finishing touches on
another winning month by advancing 2.3% last week to 9,80. The
Nasdaq performed even more brilliantly last week, gaining 3.6% to
1,932. October wasn't such a frightening month after all,
although it scared the daylights out of a few short-sellers.

The Dow and Nasdaq both defied the ghosts of Octobers past. "With
Halloween passed," remarked Barron's Michael Santoli, "the market
has made it through its toughest seasonal period unscathed.
September and October are historically the worst for stock
returns, but since the end of August the Dow is up 4.1% and the
Nasdaq ahead by 6.7%."

Meanwhile, the gold market is compiling an equally impressive
record, having advanced six out of the last seven months. The
yellow metal added only a dime during October, but has gained
more than $45 since the end of March.

The stock market and the gold market do not typically track
together. And it's a bit mysterious that they would be doing so
now. But their apparent synchronicity is more accidental than
indicative, according to Richard Russell, editor of The Dow
Theory Letters. As Russell sees it, the pricey stock market will
soon veer off into a ditch, while the gold market will continue
chugging along.

Russell, appearing via live video-feed from San Diego, told the
crowded auditorium of conference-goers in New Orleans that the
gold bull market is for real and that it is in its infancy. It's
bullish technical picture is a mirror image of the stock
market's, he explained.

To support of his assertions, Russell noted, "The S&P 500's
20-month moving average has crossed down through its 40-month
moving average, thereby indicating that stocks remain in a
primary bear market.

"But look at the picture in the gold market," Russell urged the
audience. "The picture is a mirror image of the stock market. The
20-month moving average of the gold price is crossing UP through
the 40-month moving average, which shows that gold is in a
primary bull market."

"Gold is now in the accumulation phase," he says. "Gold is moving
to strong hands from weak hands... $556 per ounce is the first
target."

Russell colored his dispassionate technical analysis with a bit
of macro-economic fire-and-brimstone. "The system of fiat money
is really immoral, almost evil. It will not last. Most of us will
live to see the complete destruction of the U.S. dollar," the
octogenarian stack market observer predicted. "When the dollar
collapses, all hell is gonna break loose in the system.
Regards,

Eric Fry,
The Daily Reckoning

END

Comment: Russell is to be commended for his boldness and discernment, same w the DR for reporting it.

"The Stalker".........continued -- auspec, 15:10:20 11/02/03 Sun

I was told by a quite credible source that it is the LBMA where the "Stalker" is buying his $1B plus of gold and, of course, that makes perfect sense because London is where physical transactions occur for the most part. It was also confirmed that CRIMEX could NOT handle an order of this magnitude..........it would simply implode. YET, very few of those that fully comprehend this anomoly are willing to advocate the demand for physical delivery in massive size on Comex. "The time is not right" they say.

Meanwhile the paper price setting mechanism continues unabated and remains the center of attention of gold bugs' focus. Personally, I believe that now is EXACTLY the time to start the encouragement of physical demand for gold as well as silver on Crimex. Run it honest or shut it down! Do you want a free gold market or not?! This is the fulcrum of manipulated gold and it has a tremendous vulnerability at that exact same spot. THROW THE DAMN TEA INTO THE OCEAN RIGHT NOW!!

Silver would be even more vulnerable to physical demand than gold, because in reality, it is greatly scarcer {above ground}, in known quantities, than gold. I was told "It's a major hassle" to take delivery and "They make it very hard to take delivery"...........gee, I wonder why? In the end they have to put up or shut up........the rules state that it is the customers' rights to demand delivery. This process of demanding delivery, in size, by MANY unrelated parties is EXACTLY what is required. There is NO intent to "corner" a market when an army of unassociated "ants" DEMAND accountability on our national markets. The process needs to start ASAP in order to end the crooked markets ASAP. The longer we wait the longer we're held under their dishonest hands.

If a $1B order will "blow up" Crimex gold, how muich could it take to do the same for Crimex silver? A fraction of that amount for sure. How many individuals with a contract or several contracts? How many people that signed the recent petition on silver abuses would be willing to set up a futures account and demand delivery? Of course, not just anyone is allowed to trade in commodities or options, but that simply means that those that have these requirements must exercise them in size. {Hint, hint: it's a real cheap form of purchased silver}. Can anyone guess why it is not likely to be done by Ted Butler? Ah, yes, the economic compromises we make when we're associated with a coin and bullion sales company. I think Ted is fantastic and I read everything he writes, but I also believe there's a better way to end the manipulation he has so admirably documented. I hope these words do not offend, but I operate under the premise that the truth is {almost} always appropriate.

I say a campaign to force honesty on Comex precious metals would only take about 6 months of prodding to be quite effective, if undertaken by credible and widely distributed sources. There is plenty of money being invested in related markets such as bullion, equities, etc, that if focused on COMEX would stop the fraud. Why should we continue to allow the micro-management of gold and silver, at the paper margin, with little correlation to underlying fundamentals?

Why does Jim Sinclair continue to coach his loyal subjects on how to win at the "Tea Tax" game when he should be simply dressing up as a native American and making a harbor full of salty tea? Sinclair is fighting yesterday's battles because that's what he knows best. Is it moral to participate in an immoral game just because one has exceptional skills therein? It's just a "chess game" to Sinclair, and he sees himself as the Grand Master, whereas, in reality, he IS only the Pied Piper of paper Gold as he sips freely from the tea of the King.

How many of you have heard that the Orange Juice market is controlled and not a good place to "play"? Maybe we could get Sinclair to explain to us, next, how to beat the OJ Cartel at its own game. Surely he's be up for that once he has enough golden Wizzards {Comets} up and trained. What's the difference? He's pretending this is an honest market, ne? Or is he? Who is pretending that Silver is an honest market? Ted Butler isn't..........he's documented exactly the opposite. Do you want to learn to play with the Big Boyz in O.J., Gold or Silver? Play in their game with their stacked decks? Sinclair will teach you how to count cards and Butler will proclaim that the game must be allowed to continue because it is a fine institution. Others say.......the time is not right, we really shouldn't strike where the point of vulnerability is obviously the greatest.

Butler says that Comex is such a fine American institution that it must be preserved. That's perfectly fine to keep it up and running IF it will fulfill its original purpose as an honest marketplace where users and producers meet to determine price. Ted will be the last person to say that is what is transpiring on Comex because he knows, best of all, that it is a fraudulent market where out-of-control unbacked selling is allowed. Some fine American Institution that one has become.

Free markets are far greater than these various central planners and manipulators. Does one really think the free market will not find a mechanism of honest weights and measures to settle metal prices should Comex and the criminals who run it be forced into accountability? Where's the trust in the free market mechanisms by those who cling to this fraudulent "tradition"?

Demanding honest markets, and honest money for that matter, is a much bigger goal than just making a few bucks on these crooked markets and leaving them this same way for our future generations.

Sinclair and Butler are both coaching a few enlightened citizens on how to get around paying the "Stamp Tax" or the "Tea Tax" or whatever other form of tyranny happens to be their objective. Maybe we should set up a Committee to Ensure Social Security Payments for the Enlightened where a scant few of us can get back a portion of what we paid into this crooked system? What's the difference? A few profit because of special training and the masses are left with an oppressive collectivist system intact.........for future generations to deal with. Thank goodness those that inspired the American Revolution didn't take this approach.

I would like Jim Sinclair to address these issues specifically, but will not hold my breath as he's engrossed in a world of "paper", which should be dumped in the harbor.

See ya's back at the Tavern!

Gold -- Sharefin, 08:29:12 10/31/03 Fri

Barrick Gold’s Hedge Book Has Jumped Up And Bit It On The Chin.

Barrick has long prided itself on its expertise in hedging, but the gold hedge book reached a negative US$1.2 billion in the quarter and this compares with the market capitalisation of US$10.4 billion. CIBC World Markets expects the gold price to average US$415/oz next year so the problem is likely to exacerbate.. No ounces were delivered into the hedge book in the third quarter and none are likely in the last quarter as the gold price is well above US$340/oz. In fact the 16 million hedged gold ounces look likely to sit on Barrick’s book for some time to come if CIBC is right about the gold price as the hedge book has a floor of US318/oz. How it will reduce the book is anyone’s guess, but the company has said that it will not use shareholder money to do so.

The analysts make the interesting point that the hedge book can be considered as a 10 year put at US$345/oz with a tenth year call at US$414/oz provided that the counter parties can take no action against Barrick to alter the terms of the agreement. With 16 million ozs due, however, it is likely that the company will have to start delivering into the hedge book at least three to four years before the expiry of the hedges. In a worst case scenario this might mean that the whole of each year’s production might have to be delivered no matter how high the price of gold might have risen in the meantime. The negative mark-to-market value of the book is seen as weighing increasingly heavily on investor sentiment as the years progress.

Gold -- Sharefin, 08:27:50 10/31/03 Fri

Lies: G.D. Pee!

Auto sales down 6% compared with last year! Oil imports up 23% Defense spending up over 15%! These are the real headlines from the GDP report yesterday, but you're not seeing the real numbers of corporate media. Instead we get happy talk and a Hooveresque "good times are right around the corner."

Holy smokes, is this embarrassing. After spending 15 years as a reporter, I would have given more credit to my one time associates. Brother, was I ever off. Yes, the GDP numbers are completely hosed and in a moment I'll show you where the lies are buried and ask whether reporters can read (or they have no clue how to operate Excel). Or, more likely, they're just parroting what a ratings maven tell's 'em to or what the presidential "briefer" whisper in the media's ear. But let's not get personal. Let's dig up a few facts, shall we?
~~~
Now here is the whole point of the so-called recovery: There hasn't been one for most people. The "recovery" if you want to call it that, has been fueled by government spending. Check out the percentage changes:
~~~
You got it: Defense spending is up nearly 16% and non-defense spending is up 7.22%. States are getting screwed.

Now think about this: The Federal Reserve has been printing money like crazy. From September 2002 to September 2003 M-1, the narrowest measure of money printed is up 8.11% . With real GDP (less defense spending) up less than 5%

Our colleagues at HalfPastHuman come up with a brand new way of polling public opinion called the "TakeRake" which shows almost no one believes the GDP numbers out yesterday (see http://www.halfpasthuman.com/takerake103003.htm) So although the national financial press corps has either no brains or balls (or both), most common sense folks can see through this latest wool pulling very clearly.

Well, that's the Friday morning rip and rant. I got up at 5 AM to ponder the numbers and that's how they look. Not only do average people see the truth, but if the recovery was anywhere near as robust as the headline number, the market would have popped more than a dozen points, that's for damn sure. If it was real, the market would have charged up 200 or 300. Didn't happen because at least a few folks can still read.

This, my friend wraps up the scariest thing I could think of for Halloween.

Gold -- Sharefin, 07:41:12 10/31/03 Fri

Lies: G.D. Pee!

Auto sales down 6% compared with last year! Oil imports up 23% Defense spending up over 15%! These are the real headlines from the GDP report yesterday, but you're not seeing the real numbers of corporate media. Instead we get happy talk and a Hooveresque "good times are right around the corner."

Holy smokes, is this embarrassing. After spending 15 years as a reporter, I would have given more credit to my one time associates. Brother, was I ever off. Yes, the GDP numbers are completely hosed and in a moment I'll show you where the lies are buried and ask whether reporters can read (or they have no clue how to operate Excel). Or, more likely, they're just parroting what a ratings maven tell's 'em to or what the presidential "briefer" whisper in the media's ear. But let's not get personal. Let's dig up a few facts, shall we?
~~~
Now here is the whole point of the so-called recovery: There hasn't been one for most people. The "recovery" if you want to call it that, has been fueled by government spending. Check out the percentage changes:
~~~
You got it: Defense spending is up nearly 16% and non-defense spending is up 7.22%. States are getting screwed.

Now think about this: The Federal Reserve has been printing money like crazy. From September 2002 to September 2003 M-1, the narrowest measure of money printed is up 8.11% . With real GDP (less defense spending) up less than 5%

Our colleagues at HalfPastHuman come up with a brand new way of polling public opinion called the "TakeRake" which shows almost no one believes the GDP numbers out yesterday (see http://www.halfpasthuman.com/takerake103003.htm) So although the national financial press corps has either no brains or balls (or both), most common sense folks can see through this latest wool pulling very clearly.

Well, that's the Friday morning rip and rant. I got up at 5 AM to ponder the numbers and that's how they look. Not only do average people see the truth, but if the recovery was anywhere near as robust as the headline number, the market would have popped more than a dozen points, that's for damn sure. If it was real, the market would have charged up 200 or 300. Didn't happen because at least a few folks can still read.

This, my friend wraps up the scariest thing I could think of for Halloween.

Gold -- Sharefin, 07:37:58 10/31/03 Fri

Special Report Gold/Silver Trends and Indicators

There has been a significant change in perceptions of gold, silver and their relationship to currency of all kinds and the concepts of money. Significantly, the data is showing that the emotive values associated with gold have risen over 34% since July of 2003. These emotive values are neither negative nor positive, rather they indicate that the verbiage being used to discuss gold has become much more emotionally charged. Further, and unexpectedly, the 'charging' of the emotion shift is clearly centered around 'enthusiasm' rather than 'fear'. The data reveals that while there is the perception existent of gold as 'persistently ill', yet 'not dead', there is a rising perception of gold as a 'receptive movement'.

A Few Thoughts........Thank You Sharefin -- auspec, 20:41:35 10/29/03 Wed

The "Stalker" & other Issues:

Speaking of Bill Murphy's reference to a Chinese based "Stalker" buying well over $1B of gold.
Yes, $1B plus is a big nut to crack. How exactly it's covered is most interesting. This "Stalker" wouldn't be taking $1B down from Crimex, would he? I don't have the numbers off the top of the head {or the bottom} but I don't think Crimex could handle a $1B delivery order and still function anywhere near current levels. Am I wrong?

Sinclair? He was at the N.O. Conference last year and drew a crowd everywhere he went. Very straight laced in appearance and somewhat professorial. Did not mind being the center of attention to put it mildly, and that really is not a criticism. He was and is again, "Mr. Gold". He's a trading genius and has guts to back it up, an unbeatable combination. Personally, I still believe him to be the "Pied Piper of Paper Gold" though as he draws so many into the paper games of Crimex. Delivery is the only game that should be played on Crimex as far as I'm concerned. He's personally winning a rigged game and in the process lending credence to it. That's yesterday's war. Oh well.

Still, I read him regularly and greatly admire his knowledge. Much to learn. I had opportunity to ask him when exactly he knew all wasn't exactly right in the gold market, thinking about the GATA process at the time, and he said in the mid 1990's. Now he says the market isn't really manipulated as GATA alledges. Can't have it both ways. Barrikk ties concern me frankly. How can they not? Now I see JS giving it to others, like Andy Smith, about 'elitist connections'.

In sum total...........JS is a most worthy Generalissimo, but I'm still keeping a close eye on him.

Yes, the 'cabal' constantly buys in order to sell later. I have always thought they could work off a good deal of any off-side position in this manner. The opportunities to make money in each direction, mostly known in advance, have been near limitless. Still, current buying is overwhelming and if they join in instead of sell we will be off to the races. Every level that has been defended since the $250's has fallen...........$400 soon to follow. That's simply bad strategy but what else could one expect from these central planners. Why did Communism supposedly fail? They say that their markets had no resemblance to true values because of government interference in these processes. Misallocations of capital. Well, let's look at that a little closer to home, eh? If that's really why the Iron Curtain came down we're not too far behind. They bankrupted and we're bankrupt but still in denial, but the wallpaper is lovely.

$400 would be real nice but, in reality, that's only about 3.5% higher than current price of $380. No big deal in actuality. Short covering rally........? No, not like most have been looking for in the last 6 or so years. Simple monetization is the substitute as many have stated at numerous 'chat' sites FAR before other experts. Raise the bar, monetize, paper over the problem.............that's what we'll continue to see in the coming months. EVERY defended level will continue to fall because of the arrogance of the elitist bankers. They simply DON"T have enough good sense to defend a position $50 higher, as some of us continue to tell em. They could buy themselves enough time to extricate their short positions if they didn't insist on their all or none approach. Alas {party hardy}, the die is cast.

They want a stealth bull market in gold? Works for me. What could be much better? I still ask around for more common interest in gold by the public and it's non existent. This with stocks going 2X, 5X, 10X and more. Nothing quite like having the punch bowl to oneself.

"Financial intelligence"? Like some mention.........many get the inside scoop and literally steal from other participants. "We" do have to read between the lines, but at least we're looking there and capable of understanding what exactly is going on. Everyone else is just plain screwed, ne? The poor sheared sheep, as always.

New Orleans is sold out this year. 2 years ago it was OK but still somewhat sparsely attended. There is plenty of money for exploration these days and acquisitions will soon be front page once more. The wall of worry is still front and center and makes for great comfort.......GREED will follow somewhere along the line.

My personal philosophy, since the Bre-X scandal and SEVERE gold stock declines, has simply been that, regardless of how long it takes, we're sooner or later going to have ANOTHER mania. Cycles................. nada mas, nada menos. Patience wins that game. Only a complete fool, or a central planner {or both}, would try to intervene in the cyclicality of markets.

There's no accounting for peoples' thought processes; some internet posters think it's 'easier' to set up a secondary silver mine than it is to take readily available silver from near surface. Fortunately for him he doesn't buy mining stox, yet he claims to be expert. I guess when they find secondary silver down near the center of the Earth, he'll want a part of that action because the silver will somehow be "free". OK.............

Butler is strongly in favor of keeping Crimex open because it is an American institution. Might as well keep our bot and paid for Congress on the dole while we're at it or our supposedly free press. Krud, folks.........run it honest or SHUT IT DOWN!!! Why celebrate the Commies failing for central planning but cherish it when we do the same? Ted............I love ya man, but you're becoming the Pied Piper of Paper Silver. You and Sinclair make perfect bookends. TAKE DELIVERY AS THE RULES ALLOW AND RUN IT HONEST OR SHUT IT DOWN!!! WHO NEEDS DISHONEST MARKETS???

Heading for the epicenter soon.

Gold -- Sharefin, 06:56:33 10/29/03 Wed

Beyond Some Bumps for Gold

Leo Larkin, the S&P analyst who follows the industry, wouldn't be surprised to see a sell-off in the metal -- and in gold-mining stocks as well. He cites a key technical factor: the inability of gold to close above the highest level of the current rally -- $389 an ounce, reached in February, 2003 -- based on prices in the spot market. Larkin says this failure, in the face of multiyear lows in the trade-weighted U.S dollar index, is a negative for gold in the near term.

Still, Larkin notes that gold's positive long-term fundamentals remain intact. He thinks investors continue to believe that equity markets are less likely to offer as much competition for investment demand as they did in the late 1990s, when double-digit annual rates of return were the norm. While the stock market has had a positive return so far in 2003, S&P anticipates that financial assets in general will be less rewarding compared to the 1990s. Larkin thinks erratic returns in the overall market may boost demand for gold and the mining stocks.
~~~
That means inflation will still be a factor for investors to contend with -- playing to gold's traditional role as a hedge against rising prices for goods and services.

In addition, the deficit between production and consumption should widen as output declines and physical demand for the metal likely increases. Larkin believes the low level of gold prices over the past few years has led to sharply reduced exploration and will likely result in lower production even if the metal price rises dramatically.

Gold -- Sharefin, 06:42:39 10/29/03 Wed

Asia Gold-Bars at discount, investors cut positions

A firm bullion market has prompted Asian investors in gold to reduce their positions in the past few days, leading to an increase in the supply of bars and pushing premiums to a discount, dealers said on Tuesday.
Spot gold (XAU=) looked set to test new highs on the back of volatile stock markets and a sluggish U.S. dollar, renewing the yellow metal's status as a safe-haven asset, they said.

Good delivery bars were offered in Hong Kong at 10 U.S. cents an ounce below loco London gold prices versus a premium of 10 to 30 U.S. cents early last week as investors, mainly from China and South Korea, sold their holdings to take profit.

"The price is high, so more supplies are coming in. There are more physical sellers in the market," said Ellison Chu, a senior manager at Standard Bank London in Hong Kong, which has a thriving gold jewellery manufacturing industry.

"(Gold bar) is trading at par or to a discount of 10 cents," said Chu.
~~~
Dealers said steady demand from India supported the physical market even though rising prices had caused frustration in the world's largest consumer which had just celebrated the Diwali, or the festival of lights.

Dealers said gold was likely to breach the $395 resistance level soon because of strong fundamentals, leaving little room for consumers to be picky.

India needed more gold during the wedding season which continues until March, while consumers in the Middle East were stocking up ahead of the Muslim Eid al-Fitr celebration next month. More demand will eventually reinstate gold bar premiums, dealers said.

"Anyone who wants to buy a television set will be frustrated if prices go up. But if you really want to buy a TV, rising prices should not stop you," said one dealer in Hong Kong.

"The Indians do need to buy gold or they wish to buy it. If you know prices will go to $400, you will buy gold when it's trading at $388," he said.

Gold -- Sharefin, 06:40:44 10/29/03 Wed

AngloGold bags Ashanti

AngloGold is only weeks away from challenging Denver-based Newmont Mining Corporation for the title of world’s largest gold producer, after its bid to buy Ashanti Goldfields tonight received the crucial approval of the Ghanaian government.
According to a report filed from Accra late last night by the Agence France Presse newswire, the Ghanaian government had approved the AngloGold bid for Ashanti. Neither AngloGold nor Ashanti representatives were immediately available for comment.

Once closed, the deal will take the merged company’s annual production to a little over 7.5 million ounces of gold a year, based on last year’s production figures for AngloGold (5.9moz) and Ashanti (1.6moz). Newmont predicts its gold production this year will be between 7.2 million and 7.4 million ounces.

Gold -- Sharefin, 06:38:54 10/29/03 Wed

Experts predict gold prices to top $400 an ounce by year-end

Gold was treading water in Europe yesterday as the market took stock of last week's gains to within a whisker of seven-year highs, with analysts calling for bullion to have a crack at the elusive $400 an ounce level. But getting there would require further dollar and equities weakness to lure powerful fund money into gold.

"We think that the positive sentiment in the market is strong enough to test the old high. The majority of players are waiting to see gold at $400 and therefore selling pressure will be limited while the dollar remains at least stable or loses some more ground," Alexander Zumpfe of Dresdner Kleinwort Wassterstein said in a daily report.

Gold -- Sharefin, 06:30:09 10/29/03 Wed

Gold Is Money - Deal with It!

Gold bugs don’t get out much. And it’s very rare that we get an opportunity to address mainstream opinion makers. So it’s a great honor indeed to speak to an organization that counts among its members some of the world’s most influential mining analysts. I’m grateful to the Association, and to Chairman Michael Coulson, for inviting me here to talk today.

As the title of my remarks suggests, I’m not here to discuss the dissident theory of undisclosed official intervention in the gold market. Or to introduce or expand upon some new piece of evidence in support of that theory. Rather, I’d like to focus on the mainstream view of gold itself. I have two reasons for doing so. First, because I think as long as you hold that view, there’s no way you can even hear the dissident message.

Second, and more important, I think it’s time for influential people to begin thinking about what comes next. The dissident message, after all, is just one facet of a much bigger issue: the current monetary system is rotten to the core. So the question arises, where do we turn when the dikes break? The gold bugs’ answer is simple: we’ll have no choice; it’ll be back to gold. But as long as the mainstream view is in place, it will continue to mask the true nature of the problem and prevent us from thinking constructively about a solution.
~~~~
So I would urge the analyst community to heed the advice of the late Bob Marley, and emancipate yourselves from mental slavery. Stop salivating when the bell rings. Gold needs central bank support like a volcano needs stoking. Drop this fixation on the Washington Agreement. Call the bankers’ bluff. Tell them to sell it all. The sooner, and the lower the price in dollars, the better.

Unfortunately, what I expect will happen is the opposite: a sudden rush to buy, not to sell. There will be a belated recognition among all market participants, including the central banks, that paper currencies are garbage. When that happens, we’ll have what we call a discontinuous event. The ultimate black swan. We’ll all wake up one morning to learn that gold is 5,000 dollars bid in Asia, none offered. That tinkling sound you’ll hear will be scales dropping from the eyes of analysts all over the City. By then, however, the big money -- and I use the term very, very loosely -- will have already been made. More important, the opportunity to contribute some fresh thinking regarding monetary reform in a period of relative calm will have been missed.

So don’t get caught with your paradigms down.

Gold -- Sharefin, 06:11:02 10/29/03 Wed

Barrick Profit Edges Up, Hedge Book Still Weighty

Barrick Gold Corp. posted a profit in line with analyst expectations on Monday, but for the first time this year the world's No. 2 bullion producer did not reduce its bulky hedge book over the quarter.

A robust gold price meant the Toronto-based producer opted to deliver its product into the spot market, where it got a better price than from its hedge program, under which it has sold forward 16.1 million ounces of gold.

But Barrick admitted again that the size of the hedge book, equal to about three years' worth of mine output, was too big and that it wanted to cut it back by about a third to 20 percent of gold reserves.

"We will continue to look at ways to bring the book into line that makes some sense," Greg Wilkins, Barrick's chief executive, said.

"But we are not going to spend a lot of hard-earned shareholder cash to necessarily do what the market can do for us as quickly," he said on a conference call.

The world's second biggest gold miner by market value said it sold its gold at an average $365 an ounce in the third quarter. The minimum price on its secretive hedge book is $345 an ounce.

The hedging program, vilified by a vocal contingent of investors who oppose any gold firm reducing its exposure to the gold price, is under water to the tune of $1.2 billion -- its unrealized mark to market value at September price levels.

Gold -- Sharefin, 06:08:40 10/29/03 Wed

Merrill forecasts gold miners to feel C$ squeeze

Four Canadian mining firms with big domestic operations are expected to feel the greatest earnings pinch from a stronger Canadian dollar, a leading brokerage said on Tuesday.
~~~
The Canadian dollar was trading around 76 U.S. cents on Tuesday afternoon, near 10-year highs, after a gain of almost 20 percent against the greenback this year.

"The recent strength in the Canadian dollar versus the U.S. dollar, is putting pressure on the earnings of Canadian mining companies with assets in Canada," Merrill Lynch said.

"Not surprisingly, companies with substantial assets in Canada are most affected."

A stronger Canadian dollar results in increased U.S. dollar-denominated cash costs and lower revenues, which squeezes margins. Canadian dollar-denominated capital expenditures also increase when converted to U.S. dollars, the currency in which bullion is traded and the gold miners report.

Fiat -- Sharefin, 05:49:52 10/29/03 Wed

The coming currency devaluation

After repeated warnings from currency analysts and market advisors (including yours truly) that the U.S. currency system is on the verge of becoming a blocked, two-tier system we now have confirmation that the country is one step closer to realizing this. When fully implemented, the new U.S. dollar will mean a "banana republic" type currency and across-the-board devaluation.
~~~
So what is the significance of this change of color in the U.S. $20 note? Well according to the Feds it is designed as a deterrent to stop counterfeiters. But accordingly to currency analyst Lawrence Patterson, who authored the 1994 monograph titled "Currency Recall", which accurately forecast the new multi-colored notes, the new colored money is part of a two-tiered currency system that will have drastic implications for investors and non-investors alike here in the U.S.

Patterson calls the new notes "crayola currency" and claims they will circulate domestically while the normal green currency that we've grown accustomed to will circulate offshore all over the globe. According to commentator Terry Savage, "Two-thirds of the U.S. paper currency is circulating in foreign countries." With the coming two-tiered currency system, foreigners will continue to be allowed to use the greenback while U.S. citizens will be stuck with the "crayola currency" which cannot be exchanged.

Patterson forecasts the coming use of foreign exchange controls for the U.S. dollar domestically, which would prohibit Americans from transferring capital to any other world currency. Again, this is discussed in Patterson's now-classic monograph "Currency Recall" (which I've read and highly recommend to students of currency policy and investors seeking to retain the value of their investments).

Patterson states, "I want every one...to think carefully about this...because we are coming very, very close to the end of the freely convertible domestic dollar. They cut in value could be as much as 50%...I believe those holding gold bullion bars offshore and bullion coins domestically will be very surprised to find that special regulations will prohibit them from profiting."

Fiat -- Sharefin, 05:45:17 10/29/03 Wed

Buffett: Berkshire Has Major Intl Currency Investment

Berkshire Hathaway Inc. Chairman Warren Buffett says that since the spring of 2002, "Berkshire has made significant investments in - and today holds - several (foreign) currencies."

Fortune magazine said in a press release Monday that in an article to be published in the Nov. 10 issue of the magazine, Buffett writes, "To hold other currencies is to believe that the dollar will decline. Both as an American and an investor, I actually hope these commitments prove to be a mistake."

Buffett is quoted as writing that the U.S. trade deficit "has greatly worsened, to the point that our country's `net worth,' so to speak, is now being transferred abroad at an alarming rate."

Buffett says foreign ownership of U.S. assets will grow at about $500 billion a year at the present trade-deficit level, which means that the deficit will be adding about one percentage point annually to foreigners' net ownership of U.S. national wealth.

"A perpetuation of this transfer will lead to major trouble," the press release quotes Buffett as writing.

The press release says Buffett proposes issuing "import certificates" to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would sell the import certificates to other parties - exporters abroad or domestic importers - wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need import certificates that were the byproduct of $1 million of exports.

Gold -- Sharefin, 05:43:13 10/29/03 Wed

GOLD PRICE MANIPULATION

As with any claims about an act which may be illegal, unfair or both, evidence is required. Here there are 6 aspects that will be discussed – namely motive, means, proof, opportunity, track record and impact.

Gold -- Sharefin, 05:41:19 10/29/03 Wed

Bullish on bullion

Pierre Lassonde also sees something equally as lovely, plain as day, and not too far off in the distance: a $450 (U.S.) gold price.
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He just sees the silver lining forming on that cloud called gold, which is floating ever closer to the heavenly $400 mark after far too long in purgatory, much to the delight of long-suffering investors and die-hard gold bugs like him.

"After a 20-year bear market, it is very exciting to finally see a bull market for gold, and we believe it will continue for the next three to five years," Lassonde says.
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Bullion is getting a long overdue boost from the bulls thanks in large part to the sliding U.S. dollar and the soggy world economy.
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"It's the world's way of saying: we'd like more gold," explains veteran gold analyst Martin Murenbeeld.
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He sites a host of factors, with the key being the weakness in the U.S. currency and world stock markets, historically the reason that gold is considered a safe haven for investors.

"The U.S. dollar is seriously overvalued," his report says, adding its decline is inevitable and it would drive up the price of gold as it headed south.

Also, the slowing of the world economy has led to stimulative monetary policies such as lower interest rates and easier loan conditions, more growth in the money supply and governments running budget deficits, which are all positive conditions for gold.

He points out too that the Chinese gold market is being deregulated, which is putting fewer restrictions on buying gold, and that there are also new gold products being introduced to the public for investment purposes, such as exchange-traded funds, so that people can buy bullion on the stock market in paper form.

Also encouraging is news that the central banks are expected to announce a continuation of their agreement to limit gold sales, which in turn means that they're not going to just dump gold into the market and weaken demand.

"If things continue along this path, gold is going higher," Murenbeeld says. "We don't see an end to this anytime soon."
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"This industry, quite frankly, is not viable long-term unless the gold price is $350 or higher," Flores says, noting big development projects are very gold price sensitive and they just weren't economical for the seniors at a $300 gold price.

Now that it's safely over that hump, everyone is in a better position to raise money and conduct exploration, and the incentive to merge or hedge has been significantly reduced.

"Gold and the U.S. dollar has been the most dominant relationship out there (in the market)," says mining analyst Barry Allan of Research Capital Corp.

"There was a long steady climb in the U.S. dollar, but we're on the other side of that now," he says.

"The overall tone for bullion is positive," Allan says, adding that while $400 is mentally a big barrier for the market, he says it will still take a couple of years to sustain it.

Since a spike in the U.S. dollar is highly unlikely, he sees slow and steady improvement for the commodity.

As eternal optimist Murenbeeld puts it: "People like to set up these magic numbers, but gold just blasts through them."

Gold -- Sharefin, 05:36:51 10/29/03 Wed

Gold hits seven-year closing high

Gold rose to its highest closing price in seven years in New York, recording the biggest weekly gain in 20 months on speculation that declines in equities and a drop in the dollar against the euro will stimulate demand.
Gold climbed 4.6 percent this week, as falling U.S. stock prices extended a 25 percent rally in gold during the past year by making the metal more attractive to investors. Prices had risen earlier on declines in the dollar against the euro that made gold cheaper for European buyers.

"A weaker dollar and potentially weaker stock market should translate into more investor demand for gold," said Scott Morrison, who manages $6.5 million at SAM Capital LLC in New York and trades gold futures. "It's going to be hard to make upside progress in the near term in the stock market, and that should be positive for gold."
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"With mine supply likely declining and demand for gold being strong in an uncertain economic and geopolitical environment, the outlook is positive for gold," said Jamie Sokalsky, chief financial officer of Toronto-based Barrick Gold Corp., the world's third-biggest producer after South Africa's AngloGold Ltd.

It takes at least five years to develop a new gold mine, and gold industry exploration spending has fallen to about $1 billion a year from $4 billion a decade ago, Sokalsky said in an interview.
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Declines for equities and the dollar contributed to a 25 percent rally in gold futures last year, the biggest annual gain since 1979. Prices are up 12 percent so far this year after touching a seven-year intraday high of $394.80 an ounce on Sept. 25.

U.S. stocks may decline further on selling by investors taking advantage of the 17 percent rise in the S&P 500 this year, said Michael Guido, associate director of hedge-fund marketing at Barclays Capital Inc. in New York.

"All these traders are looking at huge profits" from gains in U.S. stock prices this year, Guido said. "If they fear a year- end sell-off, equities will get crushed, the dollar will go with it and gold will go to $400 or more."

Speculators have contributed to the rally in gold, increasing their holdings in futures contracts to the largest in at least two decades in early September.

As of Tuesday, hedge funds and other large speculators had bought 80,864 more gold futures than they had sold, up from a "net-long" position of 76,892 the week before, a report late today from the U.S. Commodity Futures Trading Commission showed.

The position had soared to 122,847 on Sept. 2, the largest since at least February 1983.

Gold -- Sharefin, 05:33:46 10/29/03 Wed

The Fed, Then and Now

Today, it is taken for granted that the Federal Reserve System's role is to manage the economy with the crook of monetary policy, as shepherds leading a flock to greener pastures. Therefore, Fed Governor Bernanke could state in a recent speech, "The ultimate objective of monetary policymakers is to promote the health of the U.S. economy, which we do by pursuing our mandated goals of price stability and maximum sustainable output and employment." He could expect no heckles and received none for beginning his speech with what he probably thought was self-evident wisdom.

It was not always thus. The Federal Reserve of today would not be recognizable to its founders in 1913. The change is so dramatic it is worthy to briefly compare them. It also illustrates the sure way in which governmental bodies evolve to consolidate and expand their power through the years.
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Gold was the most prominent feature of the monetary scene prior to the dark winter of 1913. A man could not talk about money without mentioning gold. The new institution was expected to follow gold standard rules, its founders had thought. Gold movements, it was thought, would still determine long-run price changes. How wrong they would be.

The disappearance of gold from the monetary scene is perhaps the most tragic economic calamity to befall the world of money in the twentieth century. Views on gold in the first two decades of the twentieth century compared to those held today could s