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THE GOLDEN POT
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Gold -- Sharefin, 09:52:30 12/30/03 Tue

Gold: A Rediscovered Investment

The Pharisee’s Role In Gold And The Dollar Crash

Since Day 911 the US dollar has fallen over 40% as compared to the Euro, the European currency “basket.” About half of that drop occurred since May 2, 2003, when hostilities in Iraq were reported to have ended.

This means that had you or I been in the know we could have earned about 10 years of savings account interest in only six months, without buying a thing. We could have asked our respective bankers to convert our dollar savings accounts into Euros with a simple bookkeeping entry. Yes, there would have been a little red tape, but the international money dealers and bankers do this all the time for their own accounts. Perhaps we need to know what they know?

The mysterious Euro is not the only measure of the dollar’s collapse. There is hardly a currency that has not gone up against the dollar, including the South African Rand, which has more than doubled! Stories of the falling dollar are whispered in hushed tones but do not often make it into the US press, or when it does the explanation is usually murky.

Few Americans as yet give any real meaning to the fall of the dollar or related it to the rise in gold prices. But it is not a coincidence, and there is reason to believe the trend has not run its course.

If you were to ask your local bank VP to explain the relationship between gold and the dollar, you could expect a long and confusing answer, ending with something like this: "Nobody knows what will happen in the final analysis." Your banker’s MBA or PHD degree does not equip him to understand anything as basic as what makes gold and the dollar go up and down.

But the big usury-bankers (internationalists with license to print diluted money out of thin air) who own and run the Federal Reserve anti-bank and its clone anti-banks in world financial centers understand gold very well. You, too, can understand it and so can your l3-year old, if he is bright and willing. Here are a few questions:

What do serial wars have to do with gold and the dollar?

How is our currency diluted?

What does the Federal Reserve System (FED) do?

Why didn’t CNN or 60 Minutes explain this?

Who owns the gold?

Periodic Ponzi Update PPU -- $hifty, 00:24:25 12/29/03 Mon

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,973.14 + Dow 10,324.67 = 12,297.81 divide by 2 = 6,148.905 Ponzi

Up 34.285 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

$hifty

US -- Sharefin, 09:25:37 12/28/03 Sun

What Do We Do?

What do we do when the society in which we live prevents us from being moral? Or from telling the truth as we see it? What do we do when our society encourages us not question statements that we know in our hearts to be lies?

What do we do when our TV and newspapers tell us lies but insist we should regard this information as truth? What do we do when the vast majority of people in our society accepts these lies as truths and ridicules us when we call these statements lies?
~~~
What do we do we when can't trust the food we eat, the air we breathe, the water we drink, or the medicines we take to make us well? How are we to regard these efforts to criminalize vitamins and other health foods when the doctors we go to prescribe medicines that are less effective than those beneficial substances they have worked so hard to ban?

What do we do when our nation decides to go into a state of permanent war, choosing hapless countries to attack and then obliterating them, then fleeces its own citizens with devious legislation that funnels billions of dollars to companies to reconstruct what we've just destroyed for reasons we later learn were transparent lies? How are we to regard such a country, such a group of men who would do such a thing to their fellow human beings?

And how are we to regard ourselves for believing and supporting such insane and inhuman policies?

What do we do when the vast majority of American citizens refuses to even recognize that anything is out of whack?
~~~
The existing political structure in America is rotten to the core, fatally polluted by a private money supply that enables perverted patricians to retain their aristocratic power across the generations. Until this injustice is eliminated, and the power over money is returned to the people, nothing will be fixed, and the unjust wars will proliferate.

Instead of leading a more humane world into a new era of enlightenment, understanding and technological diversity, America is dragging the world backwards into a new Dark Ages where force of plunder is annihilating legitimate efforts toward reciprocal respect and cooperation.

Under present circumstances, there is no alternative to the mass dismissal and prosecution of the entire American government — the administration, the congress, the judiciary all must be indicted for criminal corruption.

War -- Sharefin, 09:05:24 12/28/03 Sun

WITH A WHISPER, NOT A BANG

Bush signs parts of Patriot Act II into law — stealthily

O n December 13, when U.S. forces captured Saddam Hussein, President George W. Bush not only celebrated with his national security team, but also pulled out his pen and signed into law a bill that grants the FBI sweeping new powers. A White House spokesperson explained the curious timing of the signing - on a Saturday - as "the President signs bills seven days a week." But the last time Bush signed a bill into law on a Saturday happened more than a year ago - on a spending bill that the President needed to sign, to prevent shuttng down the federal government the following Monday.

By signing the bill on the day of Hussein's capture, Bush effectively consigned a dramatic expansion of the USA Patriot Act to a mere footnote. Consequently, while most Americans watched as Hussein was probed for head lice, few were aware that the FBI had just obtained the power to probe their financial records, even if the feds don't suspect their involvement in crime or terrorism.

The Bush Administration and its Congressional allies tucked away these new executive powers in the Intelligence Authorization Act for Fiscal Year 2004, a legislative behemoth that funds all the intelligence activities of the federal government. The Act included a simple, yet insidious, redefinition of "financial institution," which previously referred to banks, but now includes stockbrokers, car dealerships, casinos, credit card companies, insurance agencies, jewelers, airlines, the U.S. Post Office, and any other business "whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters."

Congress passed the legislation around Thanksgiving. Except for U.S. Representative Charlie Gonzalez, all San Antonio's House members voted for the act. The Senate passed it with a voice vote to avoid individual accountability. While broadening the definition of "financial institution," the Bush administration is ramping up provisions within the 2001 USA Patriot Act, which granted the FBI the authority to obtain client records from banks by merely requesting the records in a "National Security Letter." To get the records, the FBI doesn't have to appear before a judge, nor demonstrate "probable cause" - reason to believe that the targeted client is involved in criminal or terrorist activity. Moreover, the National Security Letters are attached with a gag order, preventing any financial institution from informing its clients that their records have been surrendered to the FBI. If a financial institution breaches the gag order, it faces criminal penalties. And finally, the FBI will no longer be required to report to Congress how often they have used the National Security Letters.

Fiat -- Sharefin, 18:27:27 12/27/03 Sat

Who to blame when the next bubble bursts

Any assessment of Alan Greenspan's long tenure at the Federal Reserve has to present the stock bubble as his biggest failure. If Greenspan had effectively and consistently warned investors of the irrationality of stock prices in the late 1990s, the bubble never would have reached such dangerous proportions. His "irrational exuberance" comment just wasn't enough.
The collapse of the bubble, which destroyed more than $8 trillion in paper wealth, was the immediate cause of the 2001 recession and the economy's subsequent period of weak growth and failure to create jobs. The collapse also left pension funds unbalanced and forced millions of workers to delay retirement. After his failure regarding the largest financial bubble in the history of the world, it looks like Greenspan is now actively promoting the world's second-biggest bubble: the housing market.

The basic story is simple: Over the last eight years housing prices have outpaced the overall rate of inflation by more than 35 percentage points. There is no precedent for this sort of rise in home prices. In the past, home prices largely kept even with the general rate of inflation.
~~~
Where does Greenspan fit in?

He has promoted the housing bubble by reassuring people in public statements that there is no bubble. He also helped drive mortgage interest rates to 40-year lows earlier this year -- allowing people to spend more money on houses, which adds to price inflation and to the bubble.
~~~
Three years later, we face huge budget deficits. There is no reason to ask whether Greenspan -- who doesn't have to answer to anyone -- would pursue a destructive economic policy for political reasons because he has already done so.

Gold -- Sharefin, 18:20:14 12/27/03 Sat

Rule eased for gold processing trade

Starting from next year, approval from the People's Bank of China, the country's central bank, will not be required for import and export of gold and gold products, according to a joint circulated issued today by the PBOC and the General Administration of Customs.

Gold -- Sharefin, 18:07:51 12/27/03 Sat

Gold closes at all-time high of Rs 6,210

Gold prices continued to rise on the bullion market here today and after breaking all previous records, pure gold ended at an all-time high of Rs 6,210/10 gms.

Fiat -- Sharefin, 17:58:00 12/27/03 Sat

From Bad to Awful - Barron's Interview w/ Hugh Hendry

In his Armageddon scenario, Hendry says the S&P 500, now hovering near 1,100, could drop as low as 304.

Right now, a generally bearish Hendry thinks profit expectations are much too low for mining stocks, gold and many basic-resources companies, and he likes the return from Japanese property stocks. And, he contends, the bullish prospects for technology and big pharmaceutical stocks are significantly overestimated.

How much of a bear is he? Well, in his more optimistic scenario, the Federal Reserve reflates the economy and stocks essentially go nowhere from now until 2020. In his Armageddon scenario, the S&P 500, now hovering near 1,100 could drop as much as 80% from its all-time high of 1527, putting it at 304. For more, read on.

Barron's: What's your current view of the global economic picture and financial markets?

Hendry: What's happening today happened 300 years ago in the French economy when John Law, another Scotsman, was allowed to launch the first government-sanctioned bank, which replaced coins with paper money. Commerce boomed. Politicians recognized this correlation between issuing more money and people liking you. They issued more and more money, but it was a false promise. Nothing intrinsically was being added to the economy except promises, which could never be redeemed. Selling by speculators caused the stock market to correct. The correction encouraged the authorities to print more funny money. Ultimately, the continued pumping of liquidity destroyed the economy, the stock market and France's currency.

More recently, the U.S. came off the gold standard in 1971 and the Dow Jones Industrial Average bottomed in 1974. Over the next 25 years, the Dow goes up 20-fold because every period of economic anxiety brought forward an orthodoxy of generous liquidity. Money has to go somewhere. It seeks to perpetuate itself by going into a rising asset class. This time, it is financial assets. Just like the Mississippi stock scheme in 1720 and the South Sea Bubble in London at the same time.

Fiat -- Sharefin, 17:34:04 12/27/03 Sat

Dollar will plunge if Asian banks bail out

Higher US interest rates should support the dollar. But for many investors, the long-term structural weaknesses in the US economy are trumping the short-term fizzle that comes from faster growth. This might keep the dollar from staging a sustained recovery in the coming years. The greater worry for US officials is not a shift in new investment away from the dollar but a more basic decision by foreign investors to reduce their huge stock of investment in the US. The more the dollar slides, the less their investments are worth, the more likely they are to withdraw en masse. If that were to happen, the dollar would collapse, taking with it the US economy.

Gold -- Sharefin, 18:05:27 12/26/03 Fri

Two Prominent Gold Mines to Close Down

RIYADH, 27 December 2003 — Two of the Kingdom’s most prominent gold mines — Mahd Ad-Dahab in Madinah and Sukhaibarat in Al-Qassim — are to be shut down in 2005.

Mahd Al-Dahab, which means golden bed, has been known for 3,000 years.

The mine, with a workforce of 270, produced 35 tons of gold during its 15 years of operation, with gold production ranging from 36,000 to 160,000 ounces per annum. Sukhaibarat, with 180 employees produced about 22 tons of gold during the same period.

Fiat vs Silver -- Sharefin, 17:50:20 12/26/03 Fri

A Truly Wide-Awake American

As a free nation, the United States is done. Via the pre-planned "inside job" 9-11, and the subsequent Patriot Acts, Dept of Homeland Security, Presidential Executive Orders, and new "enforcement" laws buried deep in legislation passed by our "zombied" Congress,
the peoples of the United States are being placed under increased "lockdown", and, with another pre-planned 9-11 looming on the horizon, the endgame is total lockdown.
~~~
There is a darkness which appears as light. It is Luciferian. And that is what we have in this nation and the government which rides roughshod on our lives, and which has hijacked and gutted our freedoms and liberties, and our Constitution and Bill of Rights - all in the name of "defending and protecting" our freedoms and liberties, of which what we have left is but an empty shell. And that shell is about to be broken and swept away, for another 9-11 is an obvious future contrivance, in which case, it will become a total "lockdown on America". For we have become a nation which has thrown its God behind its back!

Fiat vs Silver -- Sharefin, 17:47:45 12/26/03 Fri

House Prices in a Post-Fiat World

Abstract: This essay discusses some issues involved in making investment decisions if the dollar is no longer available as a medium of exchange, a unit of account and a store of value. Gold and silver will step into these roles but there will be a period of adjustment as wages and prices find new levels, presenting a rare profit opportunity. I argue that an objective price exists for a "standard" rental property against which the market price can be compared, and I attempt to determine that price in silver. While there may be shortcomings to my method, I think even an imperfect estimate is very helpful as it uses something concrete and stable - real estate - to bridge the gap between the experiences of fiat versus post-fiat environments.

Auspec -- Sharefin, 17:41:40 12/26/03 Fri

And a merry Xmas & HNY to you too.(:-))))

I liked the silver valuations in the top chart of this series.
I rebased silver by multiplying it by 25 and as you can see silver has to rise by a three to one factor in comparrision to gold in the coming move.
In past history in bull runs silver out paces gold in volatility.

So if gold moves up to $1000 then I would guess silver would rise to approx $40.

On the gold front I would also like to see the house to gold ratio to return to it's prior base level of 100oz of gold per average house.

An average house price of say 125,000 (a 50% decline) & a gold price of $1,250 would achieve this.

Average US House Prices Valued in Gold/Silver

silver scrutiny -- auspec, 20:51:45 12/25/03 Thu

Just finished reading the Butler article on silver........always a good read {http://www.investmentrarities.com/12-23-03.html}. It's been nearly 10 years now that I've read most everything I could get my hands on regarding silver, this latent bull HAS worn out a lot of folks. Butler's fingering of AIG as the chief silver manipulator is most interesting as they will finally have to hold up under SCRUTINY! They won't last long. Check out Barrikk Gold for their latest defensive posturing if you care to. JPM is also going to make it as overcooked bread soon, imh&so.

Those that live by the manipulation are also going to fail miserably by the very same manipulation. Silver never really had to be linked so closely to gold that it had to similarly be suppressed. Silver had a MUCH greater chance of being "commoditized" than gold ever did, but no, the two shall now be linked for the rest of our lifetimes, thanks to the greedy and fearful ones that squandered our nation's strategic silver supplies.

Fearful? Yep, silver was suppressed alongside gold because they have both been money in the past and letting one slip would shed light on the other, or so they thought. The two were thus re-married as ultimate valuables by the very fools trying to keep them from again resuming this role. Of course, it is a most shortsighted goal to use paper derivatives to cover up a shortfall of silver or gold, but especially silver.

Greed? Plundering US wealth is simply sport for these mega/transnational entities. Whether it's unlimited money @ 1% interest, CB gold @ similar rates or access to the US strategic stockpile of silver well below the cost of production.........this is the way of these modern day moneychangers. If AIG greed just happens to coincide with CB ideals of keeping silver under wraps, so much the better.

These morons set this game up, forever linking gold and silver once more. They'll just have to deal with it according to their own folly when the silver chicken flys the coup. They'll wish silver was NEVER singled out to be any different than copper, tin, lead or zinc and they will pay dearly for this action.

Exactly how clever are those that have long manipulated silver and gold? They actually are more devious than clever with all their endless lies, false accounting, derivatives and outright thefts. It's a losers game and that has been apparent to the discerning mind for NUMEROUS years. They can't handle the scrutiny and their desperation is and has been patently obvious. It is simply a matter of time until their games end as they always have historically and more and more worldwide citizens understand what can't stand. Smart money has long been positioned......BIG smart money is now entering the fray.

Merry Christmas, AIG and Friends, the market is closed today.....enjoy it as there won't be many more you will be able to.

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

Thanks, Sharefin, for allowing my incessant rants to be placed on your fine site. A real Merry Christmas to you!

silver scrutiny -- auspec, 20:49:07 12/25/03 Thu

Fiat vs Gold -- Sharefin, 06:20:41 12/24/03 Wed

Congress authorizes Ashcroft to track gold in the U.S.

According to HR 2417 (Section 374), which became Public Law 108-177 on Dec. 13, 2003:
(a) MODIFICATION OF DEFINITION- Section 1114 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3414) is amended by adding at the end the following:
'(d) For purposes of this section, and sections 1115 and 1117 insofar as they relate to the operation of this section, the term 'financial institution' has the same meaning as in subsections (a)(2) and (c)(1) of section 5312 of title 31, United States Code [...]'

where the Financial Privacy Act was one of the victims of the USA PATRIOT Act (Section 358). Now HR 2417 redefines "financial institution" to match U.S. Code Title 31 Section 5312:
(2) ''financial institution'' means -
[...]
(N) a dealer in precious metals, stones, or jewels;

This could be a prelude to an FDR-style outlawing of gold possession. For more on the future of gold vs. paper money, see the Dec. 28, 2002 UnderReported.com story China deregulates gold; country's demand to double, affecting world market.

Periodic Ponzi Update PPU -- $hifty, 23:57:51 12/21/03 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,951.02 + Dow 10,278.22 = 12,229.24 divide by 2 = 6,114.62 Ponzi

Up 119.04 from last week.

Thanks for the Link RossL !

Go GATA !

Go GOLD !

$hifty

Gold -- Sharefin, 20:41:55 12/20/03 Sat

Who's watching.......

Japanese Gold

Gold -- Sharefin, 20:31:59 12/20/03 Sat

Gold Derivatives: Hitting the Iceberg

What is the size of the total short physical gold position, or put another way, how much gold from their vaults have the central banks collectively deposited, leased or swapped into the market through the bullion banks? Taking advantage of guidelines promulgated by the International Monetary Fund, most central banks report their gold reserves without providing a breakdown between bullion held in their vaults and gold receivables owed to them on account of deposits, loans and swaps, as would be required under more normal accounting practice. Thus the size of the total short physical position continues to stir controversy, with Gold Fields Minerals Services sticking to its estimate of 4000 to 5000 tonnes notwithstanding the mountain of research by the Gold Anti-Trust Action Committee and its associates suggesting an amount two to three times as large. See, e.g., T. Wood, "That gold short position," Mineweb (December 5, 2003).

Summarizing material published by James Turk, Frank Veneroso and at this website, the above-cited article states: "Combining those figures [outflows of 'official' gold from the Bank of England as indicated by British export statistics uncovered by Mr. Turk] with the NY Fed and BIS data produces an outstanding gold loans number more or less in line with the original Veneroso estimates of 1998 and subsequent 'back-in' calculations by Reg Howe that put the figure at 15,000 tonnes."
~~~
Most Recent Data on Gold Derivatives. On November 12, 2003, the BIS released its regular semi-annual report on the OTC derivatives of major banks and dealers in the G-10 countries for the period ending June 30, 2003 (www.bis.org/publ/otc_hy0311.htm). The total notional value of all gold derivatives, which had risen from $279 billion at mid-year 2002 to $315 billion by year-end, declined to $304 billion as of June 30 this year.
~~~
Even at 4000 tonnes, the world producer hedge book could never seem to account for more than about a third of the total forwards and swaps reported by the BIS. Now, with that number almost cut in half, total forwards and swaps as reported by the BIS remain marginally above their year-end 2001 level and not far off their year-end 2002 peak. Taking GFMS's delta-adjusted figures, the decline in producer hedge books is not quite as steep, but still amounts to a drop of nearly 700 tonnes or almost 25% since year-end 2001. Indeed, most of this decline (436 tonnes) came in 2002 when the BIS actually reported rising forwards and swaps.

Taken as whole, these numbers cast serious doubt on the widely-accepted assumption that producer hedging is responsible for the great bulk of total gold derivatives, particularly forwards and swaps. Notwithstanding the efforts of the BIS to eliminate double-counting, some have argued that its higher figures are the result of unspecified overlaps which have the effect of inflating producer hedging to much higher levels than those reported by GFMS. But if this argument were valid, reductions in producer hedge books should have operated in reverse to deflate the BIS's figures on gold derivatives by equally large amounts.

That producer hedge book reductions have had little if any impact on total gold derivatives reported by the BIS suggests, as does the absolute data itself, that producer hedging never accounted for much more than the very visible tip of a gold derivatives iceberg consisting in major part of transactions related to the gold carry trade, which never could have grown to the size implied by the BIS data without the active support of the G-10 central banks.
~~~~
As the world financial system built around the paper dollar collides with the gold derivatives iceberg, the glittering jewel starring in the most intriguing subplot is Barrick Gold, the company that used some of the planet's greatest gold ore bodies to create its most notorious producer hedge book.
~~~
Facing a deeply underwater hedge book of 16 million ounces (approximately 500 tonnes) and a lawsuit charging that the company and its bullion banker, J.P. Morgan Chase, had used forward sales to manipulate gold prices, Barrick recently announced that it would discontinue its gold hedging program and bring its hedge book down to zero.
~~~
In addition to damages, the plaintiffs, led by Blanchard and Company, the largest retail dealer in physical gold in the United States, have asked for an injunction "terminating all Master Trading Agreements, spot deferred sales contracts and all other contracts through which Defendants manipulate the market for gold as alleged herein, on terms that provide for the expeditious repayment of the borrowed gold [emphasis supplied], and enjoining Barrick, J.P. Morgan and [other unknown corporations] from entering into such contracts in the future."
~~~
Not surprisingly, there has been considerable speculation with regard to what may be going on behind the scenes. For whatever reason, Barrick has effectively met the second part of the plaintiffs' demand for injunctive relief. However, satisfying the first part -- the closure and repayment of existing spot deferred contracts on an "expeditious" basis -- is not as easy to accomplish. Five hundred tonnes is a lot of gold to pull from a tight physical market without giving prices a big push higher.

Large as it is, however, this amount hardly begins to melt the gold derivatives iceberg. This alarming fact lends Mr. Panizzutti's comments about future central bank gold sales the ring of a ship's officer trying to calm fears and maintain order while loading the lifeboats.

Auspec -- Sharefin, 20:21:01 12/20/03 Sat

The motion in the ocean is clearly visible in the charts.
What the flappers flap about is already written on the tape.

Today there appears much hoomp-pa-pa, hoomp-pa-pa ramping of the psyches of the gold bug crowd.

Personally I think that some caution & conservatism within the goldbuggery cheer leading squads would go down well across the board.

After all gold is on her own way doing that which she does so nobly.
We the barrackers need do or say little & still she would behave as she does.
Gold will go where she is bound with or without the volumes of opinions expressed either which way.

I for one, if I held good winnings on the fiat gold stocks would be more than keen to lock such in.
One only need observe the myriad of charts available to realise the greatest gains in this leg are all behind us.
Anything short term in front of us is merely icing on an already fat cake.

This leg is just one in many to come as the golden bull stretches her legs over this decade.
We have only begun the race & much more is yet in front of us.

Rather than the hype which permeates this industry & I would turn to objective analysis & rational thinking to plan ones moves.
The mania has only but begun......^o-o^......

Barrons -- Heavy Metal Sunshine, 13:55:15 12/15/03 Mon

Scrutiny, Nice Post.

Agreed Barrons has there own agenda, however I look at there forays into market manipulation as opportunities to make a quick buck and thus expand my portfolio. They are too big for me to fight but not to slick for me to take advantage.

Scrutinizing Baron's -- auspec, 12:31:32 12/13/03 Sat

From Dow Jones Company Profile:

Full Description

Dow Jones & Company, Inc. is a global provider of business and financial news and information through newspapers, newswires, magazines, the Internet, television and radio stations. In addition, the Company owns certain general-interest community newspapers throughout the United States. The Company has three segments: print publishing, which includes The Wall Street Journal and its international editions, Barron's and other periodicals, as well as United States television operations; electronic publishing, which includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures, and general-interest community newspapers, which consists of the Company's wholly owned Ottaway Newspapers, Inc.

Print Publishing

The print publishing segment includes The Wall Street Journal and its international editions, Barron's and other periodicals, as well as United States television operations. The print publishing segment represented about 60% of 2002 revenues.

The Wall Street Journal, Dow Jones' flagship publication, is a daily newspaper with average circulation of 1,817,000 for 2002. In April 2002, the Company debuted the enhanced Wall Street Journal (Today's Journal). Today's Journal is the cornerstone of Business Now, Dow Jones' long-range strategic plan.

Barron's, the Dow Jones Business and Financial Weekly, is a weekly magazine with average circulation, in 2002, of 295,000 and caters to financial professionals, individual investors and others interested in financial markets. In 2002, Barron's tripled its color-page capacity and also launched a new Technology Week section, which has added value to readers and brought in new advertisers.

The Wall Street Journal Classroom Edition is published nine times during the school year and is read by an estimated 745,000 students every month during the academic year in more than 4,600 middle school and high school classrooms throughout the United States. Individuals, organizations and corporations sponsor nearly one-half of all subscriptions and schools sponsor the remainder. The Wall Street Journal Campus Edition is included in 19 college newspapers and includes the week's top business news and feature stories.

The Company has a global business television alliance with NBC. Television operations in the United States, where it provides business news content, programming and on-air commentary to CNBC as part of an exclusive multi-year license agreement, is part of the publishing segment. As part of this global business television alliance with CNBC, Dow Jones also owns 50% of television ventures in Europe and Asia Pacific, reported as equity investments.

The Wall Street Journal Europe is headquartered in Brussels, Belgium, and printed in Belgium, Germany, Switzerland, Italy, Spain, the United Kingdom and Israel. In addition, The Asian Wall Street Journal is headquartered in Hong Kong and printed in Hong Kong, Singapore, Japan, Thailand, Malaysia, Taiwan, Philippines, Korea and Indonesia. The Company also publishes The Wall Street Journal Special Editions, which are a collection of pages in local languages distributed as part of 36 newspapers in 33 countries. The Far Eastern Economic Review is published weekly in Hong Kong and an Asian English-language business magazine, providing authoritative news and analysis on Asian business, economics and politics.

The Company's publishing segment competes with Reuters Group Plc, Bloomberg L.P. and McGraw-Hill, Inc.

Electronic Publishing

Electronic publishing includes the operations of Dow Jones Newswires, Consumer Electronic Publishing and Dow Jones Indexes/Ventures. Consumer Electronic Publishing includes the results of WSJ.com and its related vertical sites, as well as consumer focused electronic publishing licensing businesses. Revenues in the electronic publishing segment are mainly subscription based and comprised about 20% of 2002 revenues.

Dow Jones Newswires provides real-time business and financial news offering real-time, comprehensive news and information for financial professionals worldwide. Dow Jones News Service is a source of business and financial news on United States and Canadian companies and markets for brokerage firms, banks, investment companies and other businesses in North American. Capital Markets Report is the Company's newswire covering the global debt and money markets. Corporate Filings Alert provides real-time news covering Securities and Exchange Commission (SEC) filings, bankruptcy courts and government agencies. The Dow Jones Economic Report and the Dow Jones Financial Wire, which are produced outside the United States with contribution from the Associated Press (AP) since 1967, provide international economic, business and financial news to subscribers in 62 countries.

The Wall Street Journal Online (WSJ.com), introduced in 1996, is a paid subscription site on the Internet that offers continuously updated coverage of business news both in the United States and abroad. WSJ.com content is created by journalists, as well as drawing on the global resources of The Wall Street Journal and Dow Jones Newswires. Other consumer sites in the Journal Network include OpinionJournal.com, which provides commentary on global issues from The Wall Street Journal editorial page; CareerJournal.com, which gives career guidance and job-search services for executives; StartupJournal.com, a Website for entrepreneurs seeking guidance on starting or buying a business or franchise; CollegeJournal.com, which provides guidance and job-search services for future business leaders, and RealEstateJournal.com, a comprehensive guide to commercial and residential property.

Dow Jones Ventures include the Company's reprints/permissions and radio businesses. The reprints/permissions business sells print or electronic reprints of The Wall Street Journal and Barron's stories. The Wall Street Journal Radio Network produces and distributes late-breaking business reports during the week to about 200 radio stations in the United States and Canada. In 2002, the Radio group launched a one-hour morning show, which is carried on 23 radio stations.

Dow Jones' electronic publishing segment competes with FT.com, New York Times Digital, TheStreet.com, Bloomberg, Forbes.com, Yahoo!Finance, CNET, MarketWatch, AOL/CNNfn, MSNMoney/CNBC, Standard & Poors, The Financial Times, Morgan Stanley/Capital International, Dialog Corp. and Lexis-Nexis.

END

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Comments: So........"The Street" doesn't like gold, eh? No major surprise there. The interesting part is exactly WHO would pay any attention to Barron's within the gold community anyway. Gotta be the various institutions newly discovering gold.

With crap like this being put out it's easy to see why the gold players actually need our multiple full time cheerleaders.

SCRUTINY -- auspec, 16:18:59 12/12/03 Fri

Scrutiny
Ed Bugos, of the Golden Bar Report, recently advised his subscribers that gold stocks were getting a little frothy. This caused much consternation from Captain SinWag who blasted Bugos from on high with both primary orifices and then withdrew into the corner to allow no more infighting within the gold community. Bugos received numerous critical communications from his followers who apparently take everything JS says as gospel. This was just over a week ago. What's it all mean?

I have recently stated that gold manipulators would identify themselves as they come forth with bearish market information at KEY moments in time. Very similar to what Nick the **** Guarino did earlier in 03 and Martin Weiss did as well this year. Intense gold advocate scrutiny is in order when these events transpire as there are few actions as effective as standing on a table top and screaming BLOODY MURDER!! Ask the Buttox Gold blokes if you don't believe me. See the main cause for the 'death of hedging' if you must. This is activism at its best, imho.

Sinbad says $450 POG is ours IF we'll just stay out of the way. Simply one expert's opinion & he has no monopoly on truth {Sh....don't tell him}. Bugos got in his way and received some lashes. Should Bugos receive scrutiny for his bearish gold call? That's a key question. I think any honest gold prognasticator is perfectly willing to be put under the microscope and I also think Bugos will hold his own under scrutiny. Pretty good call in retrospect, no? Markets don't go straight up and Bugos makes a living making timing calls to his subscribers. Ed Bugos dsidn't move this shares market lower anyway, that feat was left to the likes of Barron's....a topic to which we will shortly return.

By the way, there is a vast difference between scrutiny and a witch hunt. Personally, I think it's the height of arrogance for JS to try to stifle gold market timers. Gold bugs are a rabid lot & CAN tend to get a little carried away with themselves at times {not me of course...smile}. Bugos deserves a degree of scrutiny, that's appropriate, nada mas/nada menos. Any pro can handle it. On the other hand, hopefully we won't see multiple repeated performances?

What's the differences between what Guano and Weiss pulled earlier this year and Bugos' recent commentary? You'll have to make that call for yourself, but I don't begin to trust either Nick the **** or Weiss, from past experiences.

How about the Prechterroid? Lotta good & historic work by this man for sure, none of which I can see as it relates to GOLD. RP has drawn numerous lines in the sand and gold continues to cross them. His subscribers that are gold aware should be all over him about now. He's about due for a MEGA bullish gold call and it will come IF he's not been compromised somehow. Believe me, RP still moves markets and I remember well his bearish silver call resulting in a big sell off in the mid 90's. Bob, you owe us one {or 2} and we're still waiting.

Now, back to Barron's. I do believe this last week's gold share large sell off was mainly due to institutions and hedge types locking in some profits {& their bonuses} prior to year end. It doesn't take a lot of selling to create more selling in this emotional market. Who exactly is Barron's target audience? It certainly ISN'T the typical gold bug, that much is for sure. Could it be some institutional types and hedge guys? The Barron's article undoubtedly had a major effect as the market did exactly what they called for....shares selling off, being overvalued compared to physical. The shares did sell off as pog REMAINED SOLIDLY ABOVE $400.

Some of you will remember the hatchet job that Barron's pulled on Royal Gold earlier in the year, no? Similar effect. To me, an advisory that repeatedly comes out and quashes gold at key times deserves SCRUTINY. Is their work balanced or only gold bearish at important market positions? Who do they take orders from? CAN BARRON'S HANDLE THE SCRUTINY? Personally, fwiw, I doubt it.

Could Buttox Gold handle the scrutiny? There's your answer as there is the power of scrutiny. A small and very vocal minority is capable of changing the world {one hedger/manipulator @ a time}.

Now, go do the right thing.........

Gold -- Sharefin, 07:47:52 12/11/03 Thu

Talking Gold with Newmont's CEO - Part 2

Transcript

It's hard to predict how much consolidation will occur between gold companies in the future, but in the long run, consolidation will benefit the industry says Newmont Mining Chairman Wayne Murdy

Fiat -- Sharefin, 06:51:50 12/11/03 Thu

In Defense of Bank Failures

The American people have not seen widespread bank runs since 1933. In that object at least, the Federal Deposit Insurance Corporation has succeeded. But at what cost? To insure deposits is to invite bad banking—and worse; it is to foster reckless speculation and unsound investments, help make inflation permanent instead of intermittent, obstruct the curative powers of economic contractions, and divorce freedom from responsibility.

Federal deposit insurance is part of two wider trends in government policy in the twentieth century. One was what James Grant terms the "socialization of credit risk," that is removing the risk attendant on credit dealings from the contracting parties and fastening it upon society as a whole, who were now forced to make up any losses. Governments also guaranteed mortgage loans, college loans, farm loans, and even loans to foreign governments.

If it is an economic and political law that "no vast subsidy goes unexploited," the excesses of the American economy in the 1980s and 90s offered plenty of corroboration. According to Grant,

The institution of the federal banking 'safety net,' intended to protect innocent depositors from the consequences of bad banking, had the unintended consequence of promoting bad banking. In the United States, but also in Japan, most of the Nordic countries, Britain, and Australia, scenes of competitive bank wrecking and fabulous real estate inflation were played out in the 1980s.

Gold -- Sharefin, 06:49:12 12/11/03 Thu

The Dollar Crisis

The current international monetary system, based on floating fiat currencies, brings about tremendous distortions which inevitably must be corrected. This much has been known to Austrians for some time. Awareness is now starting to spread to mainstream economists. To understand how we got here requires some historical background.

Under the international gold standard, the flow of gold in and out of countries responded to relative prices between countries. A country with net imports, for example, experienced gold outflows as their gold was exchanged for goods to make up the difference.

Because a country's gold reserves were finite and could be increased only by becoming a net exporter, the process of gold loss had a natural limit. But even before the gold supply was drawn down to zero, a decrease in the quantity of gold circulating within the importing country would in result in falling prices. There would at the same time be an opposite effect within the countries of the trading partners—the exporting countries would accumulate more gold over time, causing a rise in prices.

Eventually, a point would come where there was a discrepancy in prices between the two countries such that the goods of the chronic importer became more attractive as exports to the chronic exporter. The flow of gold thus worked to maintain rough purchasing power parity of an equivalent quantity of gold between nations and prevented perpetual trade imbalances from accumulating.

Where trade occurs between nations, imports must ultimately be paid for with exports. This is a special case of the general principle that consumption must be funded by production. Within a country that had accumulated gold through the sale of past exports, imports could be funded by the loss of gold for a finite period of time.

Gold -- Sharefin, 06:31:54 12/11/03 Thu

If Barrick was a Hedge Fund then GOLDCORP is an ETF

Back during the heyday of forward selling and hedging by gold mines, Barrick was estimated to have the largest short position in the world. In fact, Barrick's hedging activities produced more revenue from its hedging than it did from mining operations. One analyst quipped, "We're not sure if Barrick is a gold mine or a hedge fund."

For the past two years GOLDCORP has pulled the reverse maneuver on a much smaller scale. This evening the company sent out a Christmas press release to announce a bonus dividend payment of ten cents per per share.
~~~
While GOLDCORP is short-selling the dollar similar to the way Barrick was shorting gold, there is one major difference. Barrick was borrowing gold from J.P. Morgan in order to sell it forward. GOLDCORP is debt-free and is merely holding back gold from sale instead of accumulating USD cash reserves.

In order for GOLDCORP to become worthy of being called an ETF, the way Barrick was called a hedge fund, it would have to hoard over 6 million ounces of gold in addition to what it already has by borrowing dollars and buying gold with them. While that might be an interesting strategy to consider, we hope that GOLDCORP will just stick to being a gold mine.

Gold -- Sharefin, 06:28:20 12/11/03 Thu

Global gold stock sell-off intensifies; $10-bn gone

Investors cashed out of gold and silver stocks across the world again on Wednesday, taking a further $5.8 billion off the table. Cumulative sales since the peak in valuations last week is running close to $10 billion, with a big bump of $3.5 billion yesterday that set the trend firmly in motion.

Fiat -- Sharefin, 06:13:44 12/11/03 Thu

Talking Gold With Newmont's CEO

transcript

"The gold price, in our view, is really underpinned by jewellery demand globally; but investment demand is what really moves the price."

Fiat -- Sharefin, 06:08:13 12/11/03 Thu

U.S. Dollar Slides to New Lows After Chinese Banks Repatriate Funds

The dollar slid further yesterday after the Bank for International
Settlements said China's banks were repatriating funds and
seeing an increase in domestic deposits. The U.S. currency
hit a new low against the euro and approached its lowest level
against sterling for a decade.

Current trends are "implying that the surplus of funds placed
in the international banking system by the Chinese banking
sector that has been available for the funding of foreign
government deficits is shrinking," a report from the central
bankers' central bank said.

Analysts said there appeared to be little chance of a dollar
recovery in the near term given the absence of official
resistance.

A senior Bush administration official told Reuters that
President George W. Bush would today urge Wen Jiabao,
the Chinese premier, to take steps to move China's yuan
to a free-floating currency during his visit to the U.S.

The U.S. also wants China to stop slowing the import of
American soybeans and other commodities.

The BIS also said that members of the Organisation of
Petroleum Exporting Countries were increasingly
repatriating money rather than keeping it in dollars.

Although the report said there was little evidence of
international investors losing confidence in
dollar-denominated bonds, markets focused on the more
negative elements for the dollar.

Oil -- Sharefin, 06:05:58 12/11/03 Thu

OPEC´s Silva: OPEC evaluating trading in Euros

This week there is talk on the markets that, the opinion of some OPEC ministers expressed last week concerning the decline in the value of the dollar that eroding their purchasing power, might prompt the OPECat the next meeting to reduce futher production, despite the price this week that has been in the upperside of the price band mechanism.

Silva said on OPEC's price band mechanisms that it could be change if necessary.

"is not set in stone" and could be adjusted upwards to protect oil prices, Silva said.

Oil -- Sharefin, 06:04:22 12/11/03 Thu

OPEC may discuss trading oil in euros

OPEC Secretary General Alvaro Silva said on Monday that oil cartel OPEC could discuss trading crude in euros or in a basket of currencies instead of dollars in the future.
~~~
OPEC has aimed to keep oil prices within the $22-$28 a barrel band, although recently prices have been at the top of or above the preferred range. At the producer group's last meeting in Vienna last week, some OPEC members said the higher prices were fair as the falling value of the dollar had slashed their purchasing power for goods from areas such as the euro zone.

Leading producer Saudi Arabia made clear at last week's OPEC meeting that it was pursuing a higher oil price target to offset buying power lost with the decline of the dollar against the euro and other currencies.

Silver -- Sharefin, 05:49:24 12/11/03 Thu

The Weight Of The Evidence - Silver

By: Theodore Butler

I have long felt that the main ringleader for the Silver Managers is American International Group, Inc. (AIG). AIG is one of the largest insurance and financial services companies in the world. It is truly a gigantic international force, that ranks by market capitalization of around $150 billion, as the 10th largest company in the US. While revenues and profits from its silver market operations represent a very small part of its total revenues and profits, AIG is the largest factor in the silver market. That's how big this company is. (Please see aig.com)

How did the largest insurance company in the US come to be the largest dealer in the world silver market, or even be involved in silver in the first place? Many are surprised, at first, when they learn that such a large, well-established and connected insurance company is even involved in silver trading at all, no less the leader. Let's face it, there seems to be little compatibility with underwriting commercial fire insurance or personal automobile insurance and silver futures trading.

Here's how AIG got to be the biggest trader in the silver market. When Drexel Burnham Lambert went bankrupt in 1989, the DBL Trading Group was purchased by AIG, and became the AIG Trading subsidiary, which currently operates out of offices in Greenwich, Conn. You may recall DBL Trading was the subsidiary involved in the temporary gold loan default with the central bank of Portugal at that time. Before moving over to AIG, the DBL Trading Group worked at Goldman Sachs (J. Aron) in the early 1980's, and before that began at ACLI (A.C. Leon Israel). For the sake of full disclosure, and in an interesting coincidence, I worked at Drexel Burnham Lambert in Miami, for 10 years until 1986, but had no involvement, whatsoever, with DBL Trading.

The reason I've traced the lineage of AIG Trading is because in their earlier forms, they originated metal leasing, which I believe is inherently a fraudulent and manipulative financial device. In addition to being the Godfather of gold and silver leasing, AIG Trading is the dominating force on the COMEX, being the largest clearing (guaranteeing) firm. Even though I have written to top management on a number of occasions, about their subsidiary's involvement in silver, I believe they are still not aware of the extent of AIG Trading's control of the silver price. I had submitted a copy of this article to AIG's chief legal officer prior to publication to avoid unintentional misstatements.
~~~
Make no mistake - we are witnessing the death of the leasing and short selling of physical gold and silver as a form of hedging. It may take a while to die, but this "de-hedging" isn't a temporary phase, it's the end. Just don't expect anyone to say that, as it will open them up to litigation, or in Barrick's case, more litigation. Don't expect anyone to say, "yeah, this leasing was really stupid and manipulative, and we're sorry we did it." Expect instead, " it was very good, but we've decided to end it due to changing market conditions." Hogwash.

With Barrick Gold, I didn't have to speculate at all, because the SEC and FASB required full public disclosure of their hedge book. With AIG, and other financial middlemen, securities law strangely protects against the disclosure of their derivatives positions. No one knows what short position they may hold. That's not right. Because the law throws up a shield, any wrongdoing is easier to hide. Commodity law, in addition, also conveniently protects against revealing the identity of anyone who might hold a manipulative position on the short side of COMEX silver. I know, because I've asked the CFTC for this information (as have many of you). This flies in the face of the long overdue current regulatory swing towards more disclosure and transparency.

Barrick, for all the criticism I have given them for selling years of forward production at low prices and allowing the actual metals to be dumped on the market, was at least an actual producer of metal. Who is AIG, or other Silver Managers? Do they produce or consume actual metal, or are they just middlemen, profiting off the legitimate producers and consumers? There is no doubt in my mind that the price of silver would be well north of $20 per ounce, were AIG not dealing in the silver market.

In fact, there are more questions about AIG, that hopefully the company will answer. Like - do AIG's silver short positions represent legitimate client hedging requirements, or do the company's traders also speculate on AIG's behalf in COMEX futures and options or on their own behalf or related parties? What is the size of the company's silver short position, and what has been the size over the past 15 years? How much money has AIG made from its dealings in silver? How does AIG propose that silver will be repaid on any leases they have originated or brokered, given that world silver inventories have declined dramatically over the past 15 years? Does AIG or any of its traders hold, or have they held, any financial interests in any fund or trading company that trades in COMEX silver as a counterparty to any AIG trading?

Gold -- Sharefin, 05:43:41 12/11/03 Thu

Gold Dealers Conscripted to Spy on You?

Just forget about buying and owning gold and other precious metals in privacy, as you have been able to do until now.

A new intelligence spending bill (HB 2417) has reportedly just passed Congress and is awaiting the President’s signature by this coming Saturday, December 13, 2003. Tucked inside that bill is a provision that allows the FBI to serve so-called "national security letters" on a broader range of "financial institutions." National security letters require these institutions to reveal their customers’ private financial as well as general information, including "tangible things.".

It’s no news that banks have been conscripted to spy on you. Everyone knows that by now. But this recent measure

"... redefines ‘financial institutions’ [a term] that was previously limited to banks, credit unions, and savings and loan organizations. Now the definition also includes brokers and dealers registered with the Securities and Exchange Commission, investment bankers, operators of credit-card systems, insurance companies, dealers in precious metals, stones, or jewels, licensed senders of money, telegraph companies, airplane and boat dealers, Realtors and estate closings, and the U.S. Post Office.

http://www.washtimes.com/national/20031204-111437-5659r.htm

Fiat vs Gold -- Sharefin, 05:40:29 12/11/03 Thu

It’s Too Late For A Dollar Devaluation

The recipe for economic disaster over the last ten years has been the potent combination of three disequilibria: an asset bubble, a credit excess, and an exchange rate overvaluation. Extreme readings in any two are often enough to precipitate a financial and economic crisis; extreme readings in all three make crisis inevitable. Japan in the late 1980's had an extreme asset bubble and credit excess, but not an exchange rate disequilibrium. Mexico had an extreme exchange rate disequilibrium accompanied by something of an asset bubble and a selective domestic credit excess. Malaysia and Thailand had all three---asset bubbles, credit excesses and exchange rate overvaluations. Korea had the first two, but arguably its exchange rate was not overvalued by early 1997.

Increasingly, it appears that the US economy has become a candidate for crisis.
~~~
Why does this not mark the end of the dollar decline? Quite simply, the conditions which triggered the decline in the first place – a huge and growing current account deficit, rampant debt creation, etc. – show no signs of alleviation. In an International Perspective written last year, “Helicopter Money or the Road to Weimar”, we argued that Fed Governor Ben Bernanke’s paper last November on possible radical monetization by the Fed was a double edged sword. In all probability, Governor Bernanke believed that, by indicating a willingness to monetize treasury debt without limit and even private assets, he was providing encouragement to investors and that this encouragement would support private asset prices. We maintained, however, that this edge of the sword would most likely prove to be blunt: most investors would not comprehend his words of encouragement and those who did were already over positioned in equities and corporate bonds.

Unfortunately for Governor Bernanke, his shocking speech extolling the “virtues of the electronic printing press” have proved to be a profoundly dangerous double-edged sword that has afflicted the dollar with ample wounds in its aftermath. By expressing a willingness on the part of the Fed to deliberately monetize to the point of currency debasement, he has clearly discomfited holders of treasury bonds and foreign holders of all U.S. dollar assets. Both of these classes of market participants were very long these assets and very vulnerable. Their discomfort has placed selling pressures on the US currency that has more than offset any buying support from the official sector, which clearly sees no virtue to a rapidly plunging dollar.
~~~
One wonders how much further the official sector can resist this broadly negative trend for the US dollar. The recent breach of $400 gold in this respect is highly significant. What is the message its strength is conveying today? The US has a massive net external debt and an unsustainable current account deficit.
~~~
Many have remarked that, if all of the world’s currencies are unattractive, gold might regain some lustre as a reserve currency and a store of value. That appears to be a dynamic which continues to be operating favourably for the gold market; there is a persistent “bid” in the market, which has curbed the downward drafts one normally associates with spec long liquidations. It also helps that nominal interest rates everywhere are negligible. It also helps that, in a world of ubiquitous excessive debt, gold is the one asset that is no one’s liability. But it might also be the case that gold’s strength is conveying speculative or investment buying because of concern about central bank “monetization” in the future. Certainly, it seems to be reflective of a profound vote of “no-confidence” in the central banking community, a substantial shift from a few years ago, when “official sector omniscience” was in a profoundly bullish phase.

But most of all, gold’s rise does seem to indicate that the long reign of King Dollar is rapidly drawing to a close.

Gold -- Sharefin, 05:32:46 12/11/03 Thu

Goldcorp's Holiday Gift

As a demonstration of our belief that gold was beginning a major new bull market we began to build a gold inventory in the 3rd, quarter (ending September 30) of 2001 by commencing a program of holding back a portion of our gold production from sale. By the end of the 3rd quarter of 2003 Goldcorp had accumulated a total of 142,913 ounces of gold in this way representing 11% of our total production over this period. The goal of this program was to sell this gold for a higher price at a later date and therefore generate increased earnings and the ability to pay higher dividends to our shareholders.

This program was complimented in the 2nd quarter (ending June 30) of 2002 as we began to purchase gold and continued to do so on an opportunistic basis whenever the gold price declined to its long-term trend line. By the end of the 3rd quarter of 2003 Goldcorp had purchased a total of 123,817 ounces of gold. Our total gold inventory reached 266,730 ounces (8.3 tonnes) - more than the bank of Canada!

We were right about the gold price! When we began to build this inventory the gold price was only $274 per ounce and is currently more than $405 per ounce - an increase of more than $130 per ounce! We believe gold is truly in a bull market!

Generally accepted accounting principles (GAAP) do not allow us to record the earnings from this gold until time of sale. However, we wanted to demonstrate the benefits of this program and return the value it has created to our shareholders. To do so, we sold our gold inventory during the current quarter. This gold was sold for an average price of $388 per ounce. This represents an increase of $72 per ounce over the average gold price of $316 per ounce which would have been realized if all gold had been sold at the time of production. It also amounts to an increase of $66 per ounce over the average price at which the gold was purchased.
~~~
GOLD'S BULL MARKET IS JUST BEGINNING - REBUILDING GOLD INVENTORY

We continue to hold two fundamental beliefs about gold, First, that Gold is money, a fact we have been able to demonstrate with this special dividend and Second, that it remains in the early stage of a major multi - year bull market. As a result of these beliefs we have begun rebuilding our gold inventory and we will again continue to hold back approximately 10% of our production from sale. This is in anticipation of higher gold prices which will allow us to continue to generate further earnings growth and increased dividends to our shareholders.

HOW MUCH GOLD SHOULD WE HOLD BACK?

Our shareholders have been very enthusiastic supporters of our gold inventory program. We are pleased to have been able to reward this support with true bottom line value. However, we would like our shareholders to tell us how much gold we should continue to hold back. Is 10% enough? Your views matter to us - please let us know. We would also encourage other gold companies to follow our lead and generate higher returns to their shareholders by holding back a portion of their gold production. Gold is Money and Gold is in a Bull Market!

Goldcorp's Red Lake Mine is the richest gold mine in the world. The Company is in excellent financial condition: has NO DEBT, a Large Treasury and Strong Cash Flow and Earnings. GOLDCORP is completely UNHEDGED and pays a dividend twelve times a year. Goldcorp's shares are listed on the New York and Toronto Stock Exchanges under the trading symbols of GG and G, respectively and its options trade on the American Stock Exchange (AMEX), the Chicago Board of Options Exchange (CBOE) and the Pacific Stock Exchange (PCX) in the United States and on the Montreal Exchange (MX) in Canada.

Gold -- Sharefin, 02:24:15 12/11/03 Thu

GBS debuts, gives all investors a shot at gold

Gold Bullion Securities Ltd. (GBS ), controlled by the industry-funded World Gold Council, opened trading on the London Stock Exchange on Tuesday, giving everyone from institutional to small investors a chance to play the surging gold market.

Investors can now buy a gold-backed security in denominations of as little as one tenth of an ounce of gold bullion.
~~~
A gold bullion security comprises a secured note of nominal value issued by GBS, which carries with it an entitlement to gold bullion held on trust.

"We've had huge interest, from the man on the street to the big institutional investors," one market source said.
~~~
Village had said that the company would be able to issue up to one billion gold securities. GBS had no plans to lease the gold held in trust and would not pay a dividend.

Gold -- Sharefin, 02:18:25 12/11/03 Thu

London paper gold shatters Australian benchmark

The World Gold Council-backed Gold Bullion Securities, [LSE:GBS], which allows investor “effectively to buy and sell gold on the London Stock Exchange for the very first time,” according to the promoters, got off to a flying start when trading started in London today (December 9).
Some 8.2m units representing 820,000 ounces of gold worth US$334m were traded on the London Stock Exchange and in the secondary market. As it was the first day it is logical to assume that all the trading was done by buyers, although there some opportunity for snappy profit taking as the price peaked at $41.15 a share.

Gold -- Sharefin, 10:52:27 12/09/03 Tue

Shine returns to gold

Vince Grimaldi remembers Jan. 21, 1980, the final day of the last big gold bubble.

"It was like a Broadway opening," said Grimaldi, a salesman at the Valley Gold & Silver Exchange in San Jose. "People were lined up outside the building and around the corner. People were taking $1,000, $2,000 out of their bank accounts and running in to get some gold coins, silver, whatever. They'd buy whatever we had on hand."

In that uncertain environment of inflation and high interest rates, investors abandoned stocks and bonds and turned to gold as it rose to a record $850 an ounce.

The current environment would seem to be the exact opposite, except for one item: Gold prices have risen sharply this past year.

"It's a trend in motion," said Robert Mish, president of Mish International Monetary in Menlo Park, Calif. "It will make new highs until the reasons why the dollar is falling and gold is rising cease to be."

Many investors have heard predictions of an imminent bull market in gold for the past two decades from a devoted core of "gold bugs," even though the price of gold sank sharply and languished during the stock bubble at the end of the 1990s.

The difference now is that some of the most astute international financial managers are turning to gold, as well as other currencies and commodities, as top investments while inflation picks up and the dollar deteriorates in value. Marc Faber, author of "Tomorrow's Gold" and editor of the Gloom, Boom and Doom Report, foresees a bull market for many commodities. His prediction: Gold could hit $1,000 an ounce.

Gold -- Sharefin, 10:39:33 12/09/03 Tue

Gold reaches 7-year high

Investors take notice as price tops $400 an ounce

Gold prices have shot past $400 an ounce and continue to rise, while the dollar drops in value.

At the market's close Monday, gold was up to $406.15, a seven-year-plus high, and the dollar had fallen to multiyear lows against major foreign currencies.

Jerry Pogue, a frequent shopper at Kempf's Jewelers in Indialantic, is telling all his friends to buy gold.

"I've bought more gold jewelry this year than I have in 25 years," the Orlando retiree said. Pogue also invests in gold bullion and gold stocks.

Before retiring, Pogue served as the chief executive officer of a gold-mining company in Canada, he said.

Pogue believes gold will continue to increase and could double in value within the next two years, as the dollar keeps dropping against foreign currencies. If that happened, it would put gold close to values in 1980, when inflation drove an ounce of gold as high as $850.

Gold -- Sharefin, 10:36:53 12/09/03 Tue

Central Bank sales and the gold price

It surprises me when gold investors, particularly those who believe that gold is money, denounce Central Bank gold sales. Central Bank sales are good for the gold market because private ownership of gold is a pre-requisite if gold is ever to be used as currency again.

Whenever gold is ubiquitously used as money, the majority of it is in private hands simply because the private sector, as a whole, has significantly more capital than governments. Whenever the world is forced off a gold standard, it is done in conjunction with gold confiscation. This allows the government to shift to a fiat currency that it can inflate without giving the citizenry an opportunity to use gold as a competing currency.

Look at Central Bank sales as a transfer of gold from weak hands (those inclined to sell, the Central Banks) to strong hands (those who believe in gold as a store of wealth and inclined to hoard, the public). This is positive for the gold market, especially since the sales don't even depress the gold price. It's proof of just how robust the gold market really is.

I am on record saying that I believe the gold price will, within a few years, exceed $1,000 an ounce. While that makes people who are invested in the sector extremely happy (everyone likes their beliefs affirmed), the truth of the matter is that the bear market in the dollar is driving the increase in the gold price. We are not in the midst of a booming bull market in gold any more than we were in the midst of a bear market during the nineties (look at the above chart again). What we are facing is a bear market in the dollar.

That, as I have said many times, has major implications for gold stock investors. While a lot of money could be made in this market, I suspect many investors are going to be disappointed with the performance of their gold stock portfolios.

Gold -- Sharefin, 10:32:03 12/09/03 Tue

Chinese residents welcome gold trade

SHANGHAI, Dec. 5 (Xinhuanet) -- A resident in Chengdu city of southwestern Sichuan province bought five ounces of gold this week in the Chengdu branch of the Merchants Bank of China at the price of 16,647.5 yuan (2,000 US dollars), becoming the first investor to try physical gold trade in China.

Just half a month ago, the Bank of China (BOC), one of the four major state banks in China, began selling gold-backed paper items to Chinese individuals in Shanghai. The trade was welcomed by locals with one of the largest buys reaching 2,500 grams of gold in paper.

Insiders said that from "paper" to "physical" gold trade, China is now providing more investment choices for its residents.

"The investment value of gold has long been screened owing to scarcity of investment channels," said Gu Wenshuo, general managerof the comprehensive section of the Shanghai Gold Exchange.

In the past five decades, nevertheless, the gold market was under a government monopoly with gold consumption focused on jewelry or industrial use in China. Total gold consumption is at alow level as compared with other nations in the world. In 2002, Per-capita gold consumption in China was only 0.16 grams, far lower than 1.42 grams in the United States and the world's averageof 0.7 grams.

Chinese people have traditionally had the tradition of hoardinggold as a way of securing savings against disasters, natural or man-made. Shanghai was the largest gold trade center in the Far East in the 1930s and 1940s. But gold trade was abolished with thefounding of new China in 1949.
~~~~
recent questionnaire by the Beijing Gold Economic DevelopmentResearch Center in 10 major cities in China showed 70 percent of respondents said that they would invest in the gold trade if they had money and over 20 percent of securities investors would transfer part of their capital to gold trade.

Experts predicted that nearly 7.5 million investors will try the gold trade while continuing the securities trade in the future.Calculating that each one will invest 10,000 yuan (about 1,200 US dollars) of capital, the trade will attract 75 billion yuan (some9 billion US dollars) of funds in total.

Astute and sharp-sighted commercial banks would never ignore potential income from the intermediate business and the huge clients resources it would bring. The other three state banks, namely, the Industrial and Commercial Bank of China, the Construction Bank of China and the Agricultural Bank of China, have all stepped up their preparations for launching gold trading.

Gold -- Sharefin, 10:24:58 12/09/03 Tue

Barron's flawed case against gold stocks

The problem is that conventional valuation measures don’t work particularly well with gold stocks. If they did, nobody would invest in gold stocks at all because they look truly awful – compare five-year averages for return on equity, assets and invested capital with most of the S&P 500 constituents to see what a woeful investment gold stocks in general have been on a buy and hold philosophy.

The best confirmation that gold stocks occupy an apparent parallel universe is the fact that the best predictor of share prices is a negative discount rate. Convention warping enough?

Barron’s is, in its customarily cautious way, simply reiterating Stein’s Law: “Things that can’t go on forever, don’t.” A useful corollary might be Keynes admonition: “The market can stay irrational longer than you can stay solvent.” In the case of gold stocks, Keynes had a point.
~~~
Who knows how far investors might bid up the 150 or so public firms in the entire world that have gold to hand in reasonable quantity and quality, and about 300 more who have little of it and are exploring for more. Of the top gold stocks, just one is true mainstream investment grade in terms of the heft of its market capitalisation.
~~~
This was best described on Friday by Don Coxe, Chairman of Jones Heward Investments Inc., and Chairman and Chief Strategist for Harris Investment Management in Chicago. Hosting his weekly conference call, Coxe reminded participants that we are seeing a remarkable situation where the key interest rate is a long way below gross domestic product, “the 1:8 problem for the dollar”.

“This is unprecedented in the history of monetary policy. . . to have the central bank rate one-eighth of the rate at which the economy grows. . . There is virtually always a premium . . . The idea that it trades at a gigantic discount to it is totally contrary to monetary theory and would suggest a wildly inflationary bent,” opined Coxe.

“One of the factors working its way into gold . . . is that the costs of the triple waterfall era are so great; having everyone converting their mortgages into the lowest rates in a generation . . . has the makings of an explosion when the economy comes back and the Fed has to raise rates.

“We saw the collapse of the mortgage backed market in 1994 when the Fed tightened rates four times. Well, they never got rates down to one-eighth the rate of growth of the economy. . . Now they’re faced with the fact that mortgage backed [securities] are more than double the weight they were . . . back then and they’ve extended their duration from three-and-a-half to five-and-a-half years. And if they get the Fed Funds rate back to normal, say four per cent GDP next year for a rate of five per cent. . . this is the stuff of nightmares.”

Gold -- Sharefin, 10:16:41 12/09/03 Tue

Shiny NY platinum clears $800/oz, gold gains

NYMEX platinum closed over $800 an ounce for the first time in 23 years Monday, on speculation that the amount of metal being mined will not be enough to meet rising industrial demand.
~~~
The market seemed to absorb weekend comments by Giacomo Panizzutti, former head of foreign exchange and gold at the Bank for International Settlements, who said he expected the Central Bank Agreement on gold to be renewed for another five years in 2004, with a larger cap on total sales of 2,300 to 2,400 tonnes.

The current pact expires in Sept. 2004, and limited sales by the 15 European participants to 2,000 tonnes over five years, or 400 tonnes a year.

Fiat vs Gold -- Sharefin, 10:09:37 12/09/03 Tue

Sell US equities, buy the US dollar!
by Marc Faber

My position for the next month or so is to liquidate US equities, and to go long on the US dollar and bonds.

Short term, commodities including gold, equities and the Euro seem to be somewhat overbought, while the US dollar and bonds are becoming oversold. Therefore, my bet for the next month or so is to liquidate US equities, and to go long on the US dollar and bonds.

What worries me most at present is that even I, a skeptic, can't find any good reason why stock markets around the world would decline significantly.

That's not to say there aren't a lot of issues that concern me and which I shall discuss below. But if central bankers around the world are prepared to print money and to flood the system with unlimited liquidity at the first sign of weakness in the asset markets, then it is difficult to make a very bearish case for either US real estate or US equities in dollar terms.
~~~
If, following a stock market bubble, prices retreat sharply and the monetary authorities (in the case of the US, the Fed) attempt to cushion the decline or to re-ignite the bull market by pumping excess liquidity into the system, then stock prices can shoot up again without any, or with only very little, support from the fundamentals in the real economy.

In such a case, stocks rise strongly, and sometimes even reach new highs in nominal terms, purely due to the excessive liquidity that pours into the system.

Examples of such stock price increases, which were based purely on monetary easing moves by central banks, can be found in the German hyperinflation period of the early 1920s, in Latin America in the 1980s, and, more recently, in Zimbabwe. In all these cases, stocks and real estate rose sharply in nominal terms, while economic conditions remained largely depressed or even deteriorated.

I do concede, however, that in all these cases of excessive money creation, there was at least a temporary - albeit brief - improvement in business conditions because of the illusion of wealth that people had when additional paper money suddenly flooded the system and lifted asset prices in nominal terms.

The reason business conditions only improved temporarily was that while the asset inflation boosted consumption for a while, it also at the same time rendered the production of domestic goods uncompetitive because of the inflated price level. In an environment of rising consumption but uncompetitive domestic industries, imports surge, ant that then leads to soaring trade and current account deficits and a collapse in the currency.

Once currencies collapse, the market imposes some discipline on the system, which manifests itself in tighter monetary conditions and soaring interest rates. This situation, which leads to mini-crises, is then usually remedied by the central banks printing even more money, with the result that the unfortunate cycle of rising asset prices in nominal terms leading to higher consumption, but weak production, low employment, and renewed currency weakness, continues for several years until hyperinflation eventually leads to a total collapse of these systems.
~~~~
What concerns me most going forward is that in the present optimistic atmosphere and amidst very high valuations for US equities any slight disappointment could lead to a sharp market sell-off. The potential reward in holding equities at present does simply not compensate sufficiently for a large number of risk factors.

Interest rates could rise more than is generally perceived, cut short the housing and refinancing boom, and could combined with the end of the stimulative impact of the tax cuts lead to flat or even lower consumer spending.

The recent poor performance of retail stocks such as WalMart and Best Buy seems to support this concern. Another danger for financial markets would be soaring oil and other commodity prices – not a totally unrealistic assumption considering Asia's rising appetite for oil and other resources, and tensions in the Middle East. In fact, increased geopolitical tensions are already apparent in trade disputes and in belligerent comments by China over a proposed referendum about independence in Taiwan.

But my principal concern relates to the Fed' monetary policies should renewed turbulence disturb financial markets at some point in future. For sure the money printing press would be turned on at full speed – as always in times of crises in the past - and therefore, further dollar weakness is only a matter of time.

And while I am not sure that the ECB would wish to have an even stronger Euro, it should be clear that such monetary policies should lead to a loss of purchasing power of the dollar against hard assets such as real estate in countries with current account surpluses (the Asian region), commodities including gold and now especially also silver, as well as oil.

Gold -- Sharefin, 09:59:58 12/09/03 Tue

Gold investors hope for new central bank accord

London - Since 1999 the gold price has soared by more than 39 percent even as European central banks have sold more than 1 594 tons of bullion from their reserves.

What those central banks do next could determine where gold goes from here.

Last Tuesday gold for February delivery rose to $407 an ounce in New York, the highest level for similar contracts since February 1996.

While investors have been buying gold lately to hedge against the risk of accelerating inflation, European central banks have been unloading the metal for years to diversify their reserves.

In 1999, 15 central banks - including those of Germany, the Netherlands, Switzerland and the UK - agreed to limit their combined annual sales to about 400 tons to avoid destabilising the market. That five-year agreement expires in September next year.
~~~
Respondents said the market could absorb about 484 tons of central bank gold a year.

Gold -- Sharefin, 09:57:28 12/09/03 Tue

Rational Expectations

In gold, our simple but effective 4-indicator complex (see Going for the Gold) has shifted to a fully unfavorable stance. Our more complex and proprietary models are no different. While I do believe that precious metals have long-term merit, I am concerned that short-term traders may be playing with fire, particularly given the high volatility of gold shares and a steeply overbought condition. We currently have no position in precious metals shares. That's not investment advice or a recommendation that other investors should sell, because we're very comfortable completely missing any further advance in gold stocks that occurs in what we view as a hostile Climate. Still, the potential risks are worth noting, and investors with substantial holdings in gold here should be certain that they have a long-term horizon and a similarly patient risk tolerance.

Gold -- Sharefin, 09:44:52 12/09/03 Tue

Gold Prices Zoom as Demand Falls in India

India and gold, these two are inseparable.
It is indeed ironical, foreign papers continue showing pictures of a
poor India, yet it is the largest consumer of gold. These two
factors, however contrasting, are very much the truth.

Indians seem to have an insatiable urge for gold. Poverty or no
poverty, priority amongst Indians is to purchase gold. Though the
purchase of gold is labeled as "security for the future", the
tendency amongst all is to merely hoard gold. And continue buying
more gold.
~~~
Demand in India increased from 14.1 tons from 13.19 tons. On the
global front, the chief feature on the demand side in the third
quarter was the jump in the net investment figure to 185 tons from
34 tons in April-June, a jump of more than 150 tons quarter-on-
quarter. Despite substantial increase in gold prices, offtake has
increased by 5 percent indicating a strong demand for gold jewelry
globally.

Fiat -- Sharefin, 09:27:35 12/09/03 Tue

A faded green

The dollar will need to fall further to eliminate America's imbalances

How much further might the dollar fall? Predicting the future price of a currency is a mug's game. But there are good reasons to believe that over the medium term the dollar could drop a lot lower, especially against the euro. Whether that will have the desired effects, in reducing America's imbalances, or in causing the expected chaos in Europe's economies, is a different question.

A stronger euro should be bad news for European firms, even if it means cheaper Florida holidays for their employees. A rise in the euro against the dollar causes exports from European firms to become more expensive relative to American ones, cutting into Europe's sales. Similarly, American firms' products become relatively cheaper, both for Americans and for foreign buyers. By creating more exports and curbing imports, a weaker dollar should thus help to cut America's huge current-account deficit.

Or so the textbooks have it. In the past, a falling dollar has indeed reduced America's imports. In the 1980s, the last time America had such a large current-account deficit relative to GDP, an agreement to let the dollar depreciate helped to reduce America's consumption of Japanese cars and Swiss watches. This made for a fairly painless adjustment for America, if not for its trading partners.

But there is reason to think that these days currency movements are not as effective as they once were in bringing economies into balance. A recent report by George Magnus of UBS, an investment bank, doubts that a sliding dollar will do much to eliminate America's trade and current-account imbalances.

Fiat vs Gold -- Sharefin, 09:24:05 12/09/03 Tue

The Economic Consequences of the Peace
by John Maynard Keynes

Fiat vs Gold -- Sharefin, 09:21:46 12/09/03 Tue

John Maynard Keynes by Milton Friedman

John Maynard Keynes (1883–1946) is the latest in a line of great British economists who had a profound influence on the discipline of economics. By common consent, the line starts with Adam Smith (1723–1790), whose Wealth of Nations (1776) is generally regarded as the founding document of modern economics. It continues with David Ricardo (1772–1823), whose Principles of Political Economy (1817) dominated classical economics for much of the nineteenth century, and, incidentally, provided Karl Marx with one of his central concepts: the labor theory of value. John Stuart Mill’s (1806–1873) Principles of Political Economy, published in the same year, 1848, as the Communist Manifesto by Marx and Engels, became the standard textbook in the English-speaking world—and beyond—for decades. William Stanley Jevons’s (1835–1882) Theory of Political Economy (1871) inaugurated the "marginal revolution," which replaced, or supplemented, emphasis on cost of production (supply) as determining value with emphasis on utility (demand). He resolved the classic diamond-water paradox—diamonds are a luxury, water a necessity, yet diamonds command a higher price than water—by showing that "marginal utility"—the utility gained from having one more unit of something—not "total utility" plays the key role in determining price. Alfred Marshall (1842–1924), Keynes’s own teacher, guide, and patron, dominated economics in the English-speaking world from the publication of the first edition of his classic, Principles of Economics (1890), to the 1930s.

Keynes clearly belongs in this line. In listing "the" classic of each of these great economists, historians will cite the General Theory as Keynes’s path-breaking contribution. Yet, in my opinion, Keynes would belong in this line even if the General Theory had never been published. Indeed, I am one of a small minority of professional economists who regard his Tract on Monetary Reform (1923), not the General Theory, as his best book in economics. Even after sixty-five years, it is not only well worth reading but continues to have a major influence on economic policy.

Fiat vs Gold -- Sharefin, 09:19:35 12/09/03 Tue

Major Trend Reversal in Fear Index Is Confirmed

We've been watching and waiting for several months now (see the September 1, 2003 alert), but it finally happened at the end of November. The Fear Index broke above its major downtrend line, which has confined it for more than twenty-three years.

"For the past 23 years, dollar financial assets have been outperforming gold. But when the downtrend line is broken, gold will be outperforming dollar financial assets. In other words, confidence in the monetary and banking system - after climbing for 23 years - is about to change. Conversely, after declining for 23 years because fear was falling - a result that made gold perceived to be less useful - gold will emerge as an asset of choice. People will increasingly move to the safety of gold."

Gold is about to become an increasingly popular asset, just as it was throughout the 1970's. History is about to repeat, and we can use my trustworthy and reliable Fear Index to guide us through the monetary problems ahead.

book -- Sharefin, 09:16:11 12/09/03 Tue

Consider this

Consider this -- the US over the last 30 years has possessed one incredible advantage over every other nation. What is this wonderful advantage? The advantage is that the US possesses the world's reserve currency. This has allowed the US to run up trillions of dollars in debts, and it has given the US the incredible advantage of being able to pay off those debts with irredeemable money that it prints at will and at now cost. In other words, the US has been able to take in the goods and service of the world while paying with these goods and services with paper that the world continues to accept.

And the question is -- why is the world accepting our paper money? The answer is that's it's part of the big game. "We pretend to pay them, and they pretend that they're being paid."

China is now running the single largest surplus with America, and as a result China is building up a massive amounts of Treasury bonds as it ships its goods to the US. And the question is -- why is China willing to take in all this US paper, paper that is sinking in value as the international value of the dollar declines.

The answer is that China is on a tear, a tear to build up its manufacturing facilities and its infrastructure. According to a recent article in the International Herald Tribune, China, over the next 15 years, is planning to build a highway system bigger and more efficient than the entire US's freeway system.

In other words, China is continuing to play the game, because China is playing for time. China is willing to take a loss in its US holdings so that it can continue shipping its products to the US and in so doing -- continue to build up its already huge manufacturing facilities. Time is what China is playing for -- time to build, time to research, time to harness is enormous low-cost manufacturing facilities so that China will become the undisputed economic power in the "new world" that China envisions.

Somewhere ahead a cataclysmic event is fated to occur. This will materialize when nations refuse to accept the US dollar as the reserve currency. As that point, the whole game will fall apart, and the US will sink into a vicious bear market recession. That recession will spread throughout the world, and all paper currency will fall into disrepute. At that time, investors will panic into the only true reservoirs of wealth, gold and probably silver. In my opinion, at that time gold will surge higher than anyone thinks possible, taking silver along with it.

If you hold gold or gold stocks and they head skyward -- please do not think you will have arrived at the promised land. Believe me, if, in a monetary crisis, gold rises to 1000, 2000 or 3000 dollars an ounce, it will be a reflection of terrifying events in the financial markets and in the world economy. Yes, gold will be our main protection, but at that time you'll have a hell of a lot more problems to deal with than you do now.

book -- Sharefin, 09:15:00 12/09/03 Tue

Who has Yamashita’s gold?

A PAGE-TURNER of a book came out in September this year. It’s called Gold Warriors: America’s Secret Recovery of Yamashita’s Gold by Sterling and Peggy Seagrave.

The subtitle says it all. The US government got most of the gold that the Japanese Army looted in the countries it occupied. Some of the treasure trove, however, has not been found and the Seagraves believe it is in the Philippines.

Lenny's Corner -- Sharefin, 09:12:01 12/09/03 Tue

GENERAL COMMENTS:

As the USD spins ever lower in its continuing death spiral, the gold and silver markets were the perfect partner, matching each step in almost perfect unison. As the USD Index pushed below the psychological support of 90, gold prices pressed northward of the important psychological price of $400 per ounce, for the first time in 7 years. Prices were up $9.50 for the week, and most surprisingly, excellent buying was seen in the market on any dip, a most impressive performance. The gold market is seeing improving fundamental physical demand, much improved financial press coverage (mostly favorable), and seems to be moving from the hinterlands of the investment universe to an almost, but not quite, respectable choice for the global investor concerned with either adverse currency movements or just looking to plunge into what is certainly a long-term secular bull market.

Gold Fields Mineral Services, probably the most respected and most followed fundamental analyst, reported that total demand for gold rose by 5% in the third quarter of 2003. Jewelry fabrication rose by 5%, and implied net investment in gold jumped from only 2 tons in the third quarter of 2002 to 185 tons in the comparable period of 2003. Producer de-hedging, their repurchase of previously sold forward sales, reversed in this quarter and actually contributed to supply, albeit very lightly, for the first time in 7 seven consecutive quarters. Official sales were marginally higher, with mining output declining by .2%.

In reading the statistics above, I am struck by numerous implications for the gold market. The first being that FINALLY, after gold has run up some 60% off its lows, this market is now seeing material interest from the global investor. The political tragedies of the past years were not enough, the continuing macroeconomic maelstrom was insufficient, but finally, investors seem to be entering the market, although late to the party. Should this investment demand continue unabated, some 740 tons of gold per annum would be demanded, about 1/3 of total global production.

Over the past two years, the largest buyers of gold have been the very firms who produce it, a most ironic situation. Their purchases have far outweighed investor interest and have been instrumental in the continuation of the long-term secular bull trend in gold. Many analysts had grave concerns that when the largest buyers of gold (the producers) retreated from their aggressive shopping spree, that prices could suffer. Now we have clear evidence that the baton has been passed from the producers to the investors, in a most smooth transition. And, even better than that, the new breed of gold investor/speculator, as seen in the Commitment of Trader's reports and by monitoring the recent markets, seems to have significant "staying power," unlike days of yore.

Gold -- Sharefin, 09:03:43 12/09/03 Tue

Price rise to hit gold trade

DUBAI - The drastic rise in international gold prices, which hit its seven-year high this week, will affect the Dubai gold trade, depriving it of the projected 10 per cent increase in sales this year.

Tawhid Abdullah, managing director of Damas and chairman of Dubai's Gold & Jewellery Group, said that although the group's current gold sales stood at the equal level compared to the same period of last year, the projected 10 per cent growth in gold sales will not be there by the end of this year. However, he added that the actual gold prices were "realistic".

Dubai's Gold & Jewellery Group reported 35 to 40 per cent increase in gold and jewellery sales this summer compared to the same period of last year. The growth was attributed to stable prices.

Since margins in Dubai gold trade are low, jewellery prices here largely depend on international gold prices. In other parts of the world, especially in Europe, where margins are large, change in international gold prices does not affect the retail price of jewels and trade.

Fiat -- Sharefin, 09:02:37 12/09/03 Tue

Higher Central Bank Gold Sales Likely

DUBAI (Reuters) - The Central Bank Gold Agreement could raise total sales by 17.5 percent if it is renewed next year, the former head of foreign exchange and gold at the Bank of International Settlements said on Saturday.

Since 1999, Giacomo Panizzutti had been in charge of the secretariat responsible for supervising the five-year agreement which limits total sales by 15 European central banks to 2,000 tonnes, or 400 tonnes annually. It runs out in September 2004.

"I strongly believe the agreement will be extended, probably for a slightly larger amount of around 2,300 to 2,400 tonnes, and for another five years," Panizzutti, who retired last year after a 34-year career, told a gold conference in Dubai.

"Such an increase of about 300 to 400 tonnes should not be a problem and should be easily absorbed as long as the market remains as well supported as it is just now," he said.

"I would not be surprised if they were to abandon the restriction on gold lending," he added.

Fiat -- Sharefin, 08:58:22 12/09/03 Tue

Customers rush to sell gold

The surge in gold prices in the past few days has triggered a rush to sell gold in Gujarat and, to a lesser extent, in Maharashtra.

In Ahmedabad's two main gold markets, Manekchowk and RatanPol, only one out of every 10 customers wants to buy gold ornaments or any form of gold. The rest want to sell.

Fiat -- Sharefin, 08:56:09 12/09/03 Tue

That gold short position . . .

At the recent Fall Precious Metals Conference hosted by Gold Fields Mineral Services and the Silver Institute, an interesting exchange took place regarding the purported short position in gold bullion represented mostly by metal loaned from central banks.
James Turk, founder of GoldMoney, related his investigation of gold flows to and from the UK as a deductive means of confirming or refuting figures bandied about for the infamous short position that range from 8-15,000 tonnes on the high side and 4-5,000 tonnes on the low side.

His conclusion was that the high side figures are most likely correct, which drew a very testy rejoinder from GFMS’s Philip Klapwijk, dogmatically defending the low side figures based on his firm’s investigation, and one by Jessica Cross of Virtual Metals, which he said was commissioned to “double-check us”.

It’s not just an academic dispute – the gap is large with important implications if the high side is in fact correct.
~~~
Whatever the actual number, even the low end of 4,000 tonnes is a lot of gold outstanding in a market that has moved more than $100 per ounce in two years.

Some banks have been more reckless than others in loaning out too much of their gold unsecured and that is precisely a situation that might invoke a “too important to fail” salvage operation by fellow central banks. They do it all they time for debt and currency crises, why not for gold and/or with gold?

Gold -- Sharefin, 08:46:38 12/09/03 Tue

Barrick Gold's Plight

About two weeks ago Peter Monk, Barrick’s chairman, announced that Barrick would no longer hedge their gold production. In fact, during the past year and a half they already reduced their hedge position from its peak at about 24 million ounces to its present 16.1 million ounce level. Monk’s statement was followed last week when their new CEO, Greg Wilkins, confirmed their non-hedging policy, and a few days ago when Jamie Sokalsky, their CFO, appeared on the Financial News Network. What is amazing to me is the timing of this revelation and the reason behind making it public in such a blatant fashion. They appear to be utilizing the financial press as an advertising forum! Are they doing this to promote their stock or are they frightened of something, or both?

Despite the magnitude and scope of Barrick’s operation, their hedging practices while greatly benefiting them when gold was in a Bear Market, are now acting like an anchor in a howling gold Bull Market storm. For each dollar that gold rises in price, Barrick now suffers a loss of $16 million. One dollar for each of the16 million ounces of gold that remain hedged. Therefore, every $10 rise in gold translates into $160 million dollars in additional losses! It is true that they also benefit by about $55 million, with each $10 gold rise due to their 5.5 million ounces of production. However, they show a net loss of over $10 million for each dollar increase in gold.

Further to Barrick’s advantage, their 19 counter parties have agreed to a number of extremely beneficial terms. Their gold deferred agreements allow Barrick to roll over most of their hedges; there are no discretionary “right to break” provisions, and no credit downgrade clauses. Additionally, Barrick is not subject to margin calls regardless of the gold price. In what appears to be such an enviable condition with their $1 billion of cash and equivalents and enormous gold reserves and production, why should Barrick be concerned, if indeed they are? Yet, their sudden ubiquitous visibility makes me wonder.

When I delved into Barrick’s most recent financial statement I may have found the answer. Their hedge book is already saddled with $1.213 billion of accumulated unrealized losses due to the rising gold price. This figure is from their September 30, 2003 quarterly report, and is based upon a gold price of $385. With gold presently trading at $403 this figure is now about $1240 billion. Next, according to their report there is an onerous provision in all of their master trading agreements that their growing unrealized hedging losses are causing to seriously pressure them. It is that, “Barrick must maintain a minimum consolidated net worth of at least $US2 billion-currently it is US$3.4 billion” (remember, this assumes only a $1.213 billion unrealized loss). If Barrick violates this ever-present clause they may be forced to either somehow repay the gold that they owe or to suffer other consequences.

By Barrick’s own account on September 30, their consolidated net worth was US$3.4 billion. As of December 4, it has likely been reduced to approach $3.12 billion, by their unrealized hedge losses alone. Further, if gold continues to rise in price, and to Barrick’s detriment enters a period of sharp price appreciation, Barrick may find itself with its back against the proverbial “wall”. In this event, they may witness their approximate $1.12 billion cushion ($3.12 billion less the $2 billion minimum requirement) quickly evaporate and may come face to face with their counter-parties who may demand the immediate repayment of their gold. I believe that this is the likely reason for the recent frequent statements emanating from the company. They are afraid that their hedge book might explode in their faces! Even their 87 million ounces of gold in the ground won’t satisfy their bankers! Barrick won’t be capable of producing this gold fast enough as their bankers may demand immediate, physical gold!

Gold -- Sharefin, 08:41:13 12/09/03 Tue

Exploration looks for gold price boost

Gold’s price needs to be in the range of US$350 to $400 an ounce or above for at least five years to encourage a renewed exploration effort that is badly needed if the industry is to have a healthy future, according to Alex Davidson, executive vice president exploration for Barrick Gold.

He said there had been a shortage of new gold discoveries and there was the potential for gold production to fall as a result.
~~~
Davidson said that groups of Barrick’s size needed to find gold deposits containing at least 5m ounces capable of making a return exceeding their cost of capital.

Between 1994 and 1998 ten deposits of this type were discovered. Since then, the discovery rate had dropped substantially and only three deposits matching the criteria needed had been discovered between 1999 and 2003.

Another alarming trend, Davidson said, was that the industry was spending less on exploration research and development. In Australia there had been a 60 percent drop in three years. He warned: “For our industry the long term cost of not doing this research far outweighs the short term savings.”

Gold -- Sharefin, 08:37:55 12/09/03 Tue

Gold market 'overwrought'

The gold market has become "overwrought," according to Dennis Gartman, editor of an influential daily market comment newsletter from Suffolk, Va. Referring to the Amex Gold BUGS Index (BUGS stands for Basket of Unhedged Gold Stocks), he said in yesterday's edition, "we've seen 'high,' and we've seen 'rising,' but this index is 'high' and 'rising' and doing so at a rate that is quickly becoming unsustainable." He added, "the public's participation is now rising to levels that we find more and more disconcerting, and even the slightest bit of U.S. dollar strength is likely to have a materially bearish impact on gold and silver share prices sufficient to shake these late longs from their positions and to restore the market to health once again."

Gold -- Sharefin, 08:36:13 12/09/03 Tue

US Dollar Implosion - Part II

Part II of the Dollar implosion will differ substantially from Part I. If the US-China economic relationship changes or ceases, the effect on commodity prices could be immediate and dramatic. "Commodity" currencies may then no longer look quite as attractive as they do at present. In the face of spreading recession, the prices of most commodities would decline, severely denting the attractiveness of the currencies of commodity producers. This could cause a severe reaction to events of the past two years in which the Australian dollar has risen 50%, from 48c to 72c; the South African Rand that is up almost 100%, from 8c to 15.5c; and the New Zealand dollar that has risen 60%, from 40c to 64c.

The feature of Part II of the US Dollar Implosion will be a recognition that even presently popular commodity currencies are mere paper, ultimately no different to the Dollar itself. There will be an awareness that, unlike the 1930's when competitive currency devaluations were made "by decree"; we are now in an era of competitive currency creation or printing. The country with the fastest growth of currency creation will have a short term trade advantage as their currency depreciates against competitive nations. As investors withdraw from the erstwhile favoured currencies, they will have a problem deciding where to invest their funds. This is when gold will be seen as a viable alternative.

There will therefore be a growing awareness and recognition of the vastly more attractive reserve asset role that gold must and will play in the future. This recognition is the fuel that will fire a rocket under the price of gold, driving it to substantial new highs in terms of ALL currencies.
~~~
Throughout recorded history the average relationship between silver and gold has been 15oz silver to 1oz gold. The ratio at present is a far higher 75:1 ($400/$5.30). This is massively out of line. If gold were to double to $800 per oz, it would not be unreasonable to expect the silver/gold ratio to decline sharply, possibly as low as 40:1. With gold at $800, this would position silver at $20.

Thus a 100% increase in the price of gold could possibly be accompanied by a simultaneous 400% increase (perhaps more) in the price of silver. This offers significant opportunities both in silver bullion and silver mining shares.

Gold -- Sharefin, 08:34:14 12/09/03 Tue

The $/Euro Struggle will Destabilise Forex Markets - Then Call for Gold's Support!

The first move!

In the last month, if we are to believe the German government officials, a deal has been struck to price Russian oil to Europe in Euros some time back! Russia has yet to confirm it. The Russian view of the Euro is well expressed in the climb over the last year plus of the Euro content in Russian reserves from 10% to 25%. The % of global reserves of the U.S. $ has dropped from 76% to 68% and the trend seems set to continue if not to accelerate! This alone is giving the Euro the credibility it lacked.

Not too much drama at this stage you may say? On the contrary, we say! This trend has the potential to knock the $ off its perch and eventually force the U.S. Monetary authorities to give value for its currency, or see it tumble in a series of crises, the like of which has not been seen since 1968 onwards and through the early 1970's. This time the day of reckoning of the value of the $ will be the result of 30 years of over-issuing of the U.S. currency. The crises will likewise be the greater. The availability of the Euro as an alternative, not under U.S. control, will break the grip of the $ on international money flows. The attempts by the I.M.F. to have the S.D.R. take this role ended in obscure failure some time ago, despite its continued existence in the international monetary system.

The game plan unfolds!

The potential for a real weakening of the $'s global reserve asset role, is staggering. This pricing of oil in Euros is essentially a refusal to accept the $ in its reserve asset role. However, Russia and Europe's actions, will have several subsequent stages of reactions, all of them destructive to the present $'s role globally and each one progressively more destructive: -

• The next step in this progression could well be a decision by some Oil producing countries decide price their oil and be paid, in Euros, initially to Euro related nations, then to nations who have to buy $ first, to buy oil.

• The next level of instability will be reached as an actual "switch" from trading goods in $, to trading goods in Euros. Russia has started this trend with vigour.

• This will inevitably lead to a capital flow away from the States and an exacerbation of the Balance of Payments deficits and further $ crises.

• This, in itself, will encourage further switching of $ reserves to Euro reserves, to prevent further lessening the value of the foreign reserves of other nations.

• These moves will set the basis for the global economy for decades and more, far into the foreseeable future.

Gold -- Sharefin, 08:29:33 12/09/03 Tue

Got gold?

Notwithstanding that, I can't help commenting on the markets. It seems like everyone is back in stocks, thinking the bear market that started in early 2000 ended in early 2003. My opinion is that it hasn't ended. What we've seen for the last year is nothing more than a cyclical bounce upwards, a classic "sucker rally," similar to what happened in 1930.

I don't know when the bear is going to come out again, but it's likely to be soon. And when it does, things are likely to get really ugly. Stocks are selling for outrageous prices. So I recommend you take the money and run.

But run where? I think the precious metals are the only place to be.

In the last month alone, the stocks on my monitored list have risen nearly 30 percent. Normally, that would scare me, and get me heading toward the exits. But I've said for years that, this cycle, gold isn't just going to go through the roof. It's going to the moon. If you don't participate in it, you're going to regret it seriously, and for a long time. Because the rationale for the move, and the cycles of the market, are clear – the knowledge of which companies to buy, and how and where to buy them, is readily available.
~~~
The market has changed. Many companies are now doing six-figure volumes – new underwritings and financings are being done daily. There's real interest from guys who've been around the block a few times. But share prices are still almost all south of a dollar – market caps still mostly average around $10 to 20 million. We've only entered the second stage of the big bull market.

By the time we get into the third and final stage – and I don't expect that for a couple of years – most stocks will be trading in the $2 to $10 range, with any number going to $50 or better. Market caps will typically run to nine figures. The public will be chasing these things the way they ran after Internet stocks.

How do I know? Because I've been in this market for 30 years, and I've seen it happen five times in the past (1973, 1980, 1983, 1987 and 1996, to be precise as to the peak years). But this one will be the biggest of them all, because not only will gold (and commodities, in general) be running, but the public – trained by the 1983-2000 bull market – all have brokerage accounts, and will be looking for the next hot sector. And the gold-resource story will tell exceedingly well. What's coming up is going to be a mania for the record books.

So, what should you do now? These stocks have had a huge run, especially over the last few months. There have been lots of doubles and triples. Many experienced investors are shaking their heads, commenting that they're way overpriced relative to current metal values, and selling. Well, that's fine if you're in a position to reload with well-negotiated private placements.

But I find that most people, once they sell a stock, never wind up replacing it. So the market runs away on them, and they wind up watching. Except for anomalous times – like a while in 1999, 2000 and 2001, which I think I amply documented in International Speculator, when many of these companies were selling for less than the cash in the bank – these companies are always "overpriced." That's because, in many ways, they're really just options on the price of precious metals. Or even lottery tickets. Options and lottery tickets have no intrinsic value, and are expensive.

I think it's a mistake to try to trade these stocks. Unless you're used to making a good living in the commodities market, you'll just get whipsawed, commissioned, bid-ask spreaded, and currency conversioned into penury, when you should be making hundreds of percent in profits. And benefiting from long-term capital-gains tax treatment.

The golds now are like the Internets were in 1996. Overpriced, but selling for just a fraction of where they will be in a couple of years. Weakness should be used to buy, not an excuse to be shaken out.

This is just the beginning of the market. And I personally expect it to be the wildest bull market, of any sort, I've ever seen.

Fiat -- Sharefin, 08:25:17 12/09/03 Tue

Banksters Forum

Welcome! The purpose of Banksters is to educate all regarding the Fraud of "Lenders" as they go about their business. Most believe a Bank loans you THEIR assets to you when in Truth, YOU provide the asset THEY monitize, i.e. the Promissory Note or the Charge Slip.

Fiat -- Sharefin, 08:24:00 12/09/03 Tue

The Golden Mega Trend ** Templeton warns of real- estate collapse

*** John Templeton, interviewed in Equities Magazine:

"It would be unlikely that the bear market is over when the American stock market is only down about 30%, when in the biggest boom ever, it had been up 10 times over where it had been years earlier...Following such a large increase, a 30% decrease is small." "Every previous major bear market has been accompanied by a bear market in home prices...This time, home prices have gone up 20%, and this represents a very dangerous situation. When home prices do start down, they will fall remarkably far. In Japan, home prices are down to less than half what they were at the stock market peak. A home price decline of as little as 20% would put a lot of people in bankruptcy." "Emphasize in your magazine how big the debt is...The total debt of America is now $31 trillion. That is three times the GNP of the U.S. That is unprecedented in a major nation. No nation has ever had such a big debt as America has, and it's bigger than it was at the peak of the stock market boom. Think of the dangers involved. Almost everyone has a home mortgage, and some are 89% of the value of the home (and yes, some are more). If home prices start down, there will be bankruptcies, and in bankruptcy, houses are sold at lower prices, pushing home prices down further. After home prices go down to one-tenth of the highest price homeowners paid, then buy."