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Gold -- Sharefin, 23:10:52 09/22/04 Wed

'I want to buy five kilos of gold'

Can you imagine saying this? You could, if you risked trading commodity futures on any of India’s three online commodity exchanges!

The Indian retail investor is usually the last to hear of a new investing opportunity – be it a sector or a stock or even a mutual fund scheme. Well, here is an attempt to get everybody on the same page about a new investing area, even as it opens out in India. Futures trading in commodities, that had been banned for decades, is now possible on three hi-tech new exchanges (National Commodity and Derivatives Exchange (NCDEX), the Multi Commodity Exchange of India (MCX) and the National Multi Commodity Exchange of India (NMCE). All three have electronic trading and settlement systems and a national presence that allows for online nation-wide trading even at a retail level, though sufficient volumes will take another four to six months to play out. Says P H Ravikumar, Managing Director and CEO of NCDEX, the Mumbai-based exchange that has been in operation for about 10 months now, “Some high net worth individuals are already trading, retail trade will take a few more months”.
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Gold -- Sharefin, 23:06:37 09/22/04 Wed

The Gold Market in China: A New Beginning


China is the world's fourth largest producer of gold and accounts for 300 tonnes of annual demand. The liberalisation of the gold market in China and the establishment of the Shanghai Gold Exchange, against the backdrop of the astounding economic growth that the country has enjoyed over the past decade, makes The Gold Market in China: A New Beginning a fascinating and useful read for bankers and fund managers, as well as gold miners.
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Gold -- Sharefin, 06:28:14 09/21/04 Tue

Producer de-hedging accelerates in 2004

Outstanding producer hedge positions were slashed by 209 tons in the six months to June, a sharp increase on the 43 tons cut in the six month period prior to that.
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The significant fall left the delta adjusted hedge book at the end of June 2004 at a measured 1,997 tons, equivalent to 77% of 2003 annual mine production, the report says.
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Finally, Alway highlighted the significance of book restructuring which contributed not only to an overall drop in protected volumes but, more importantly, had a marked impact on the make up of the global book itself, which was further concentrated in simple forward sales.

On a company basis, AngloGold Ashanti's combined hedge book was reduced by 62 tons from their respective positions reported at end-December 2003.

Barrick reduced its outstanding position by 51 tons, whilst a major book restructure completed by Newcrest resulted in a 22 tons decline in their delta adjusted position.

Other noteworthy contributors to the half yearly drop in the producer book were Placer Dome (19 tons), Avgold (18 tons) and Cambior (15 tons).

De-hedging is forecast to hold at elevated levels of over 200 tons in the second half.

The report points out that in the light of recent events - the announcement by Thistle Mining in August that it had bought back around 15 tons of contracts; news from New Zealand that Oceana Gold closed a 29 tons position and, lastly, the news at the end of August that Sons of Gwalia (who at end-June had a 52 tons delta adjusted hedge position) had been put into voluntary administration - the base case level of 200 tons of de-hedging could well be a minimum.
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Periodic Ponzi Update PPU -- $hifty, 21:46:07 09/19/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,910.09 + Dow 10,284.46 = 12,194.55 divide by 2 = 6,097.27 Ponzi

Down 6.42 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Gold -- Sharefin, 23:27:22 09/16/04 Thu

Gold ETF Confirmed by SEC

Despite lengthy delay, the SEC recently confirmed that a gold ETF is on its way. Expected to be sold under the streetTracks ETF line from State Street, it appears likely to begin trading before year's end. ETF investors should soon decide whether gold belongs in their portfolio.
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Gold -- Sharefin, 18:36:48 09/16/04 Thu

Gold Investment Firms Wound Up after Dti Probe

Two companies claiming to give people the chance to invest in gold ingots have been wound up following an investigation by the Department of Trade and Industry, it emerged today.

Prime Goldbank Limited and Primebank Limited claimed to offer consumers the chance to buy gold ingots worth between 50 US dollars (£28) and 500 US dollars (£280) through monthly payment plans.

The companies, which advertised on the internet, also said people could earn up to 60% of their original investment through introducing at least six new customers to the scheme.

Both companies were registered in Scotland, with Prime Goldbank claiming to have its headquarters in Edinburgh and branches in 17 countries worldwide.

It also implied to investors that they could purchase gold directly from its Edinburgh office.

But the DTI found that the firms did not own any gold in Scotland, and the companies appeared to be running a pyramid scheme, in which money from people who invested later was used to pay those who had joined the scheme early on, and was not invested in gold.
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Gold -- Sharefin, 19:08:14 09/15/04 Wed

Exploration 'weak link' for gold

New concerns have been raised about the Australian gold industry's ability to sustain its annual $8 billion-plus investment on capital works, exploration and operational expenditure despite the strong gold price.

The weak link in the industry's expenditure chain is exploration, the life-blood.

According to a survey of the industry's investment plans by Deloitte Touche Tohmatsu and the Australian Gold Council (AGC), forecast exploration expenditure for 2004-05 was just 3.3 per cent ($268 million) of gold investment activity ($8.18 billion).

Deloitte tax partner Greg Fitzgerald said that if exploration were to stay so low, Australia "will be unable to sustain current gold production and investment levels".
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Gold -- Sharefin, 07:20:11 09/15/04 Wed

Price of gold manipulated, Embry says

John Embry, one of Canada's best known gold bugs, is ruffling some feathers again in the otherwise staid corridors of Bay Street.

A couple of weeks ago, he started circulating a report that details his belief the gold market is manipulated. It's a remarkable paper, given that it's rare to see any veteran member of Canada's investing establishment go public with such a potentially controversial position.
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Gold -- Sharefin, 07:18:44 09/15/04 Wed

Gold consumption in India was up by 10%

Consumption of gold in India increased by ten per cent to 343 tonnes during the first half of 2004 against 312 tonnes same period last year.
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Gold -- Sharefin, 07:10:14 09/15/04 Wed

China's gold market should transform in three aspects: official

China's gold market should gradually experience transformations in three aspects: transformation from commodity trade to finance trade, from spot transactions to future transactions, from domestic market to international market, says Zhou Xiaochuan, President of People's Bank of China on Sept 6.

Zhou made the remarks at the annual meeting of the London Bullion Market Association. The London gold market is the largest market as well as the one with the longest history in the world. As the administrator of the gold market of London, the London Bullion Market Association will convene annual meeting in different cities around the world. This meeting has become one of the most important international meetings for the gold market.¡¡

China's gold market's function of investment and financing has not been fully exerted, because China exercises control over gold trade. How can the market transform from commodity trade to trade of finance products? Judging from the current situation, developing individual's investment in gold is a realistic option. Gold, both common commodity and money commodity is an effective instrument for inflation proof and risk evasion. Therefore it is practical to develop individual's purchase and sales of gold.
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Gold -- Sharefin, 07:07:11 09/15/04 Wed

Thousands strike in Peru against gold exploration

LIMA, Peru, Sept 8 (Reuters) - Some 4,000 Peruvians stopped work and marched through the northern town of Cajamarca on Wednesday, demanding a ban on a gold exploration project they say is contaminating and drying up their water supplies.

The strike shut down banks, markets and public transportation in Cajamarca, 535 miles (856 km) northeast of Lima. Earlier in the week farmers and residents blocked roads to protest exploration of the Cerro Quilish deposit by Latin America's biggest gold mine, Yanacocha.

Yanacocha is controlled by U.S.-based Newmont Mining Corp with Peru's Buenaventura as partner.
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Gold -- Sharefin, 06:56:35 09/15/04 Wed

Italian Central Bank Says
It Plans No Sales of Gold

From Reuters
Monday, September 13, 2004

ROME -- The Bank of Italy said in a statement on Monday
it had no plans to sell its gold reserves.

"The Bank of Italy ... has not spoken of this matter, nor
does any plan of this type exist," it said in a statement.

Central banks have been shedding gold, once a mainstay
of their reserve assets, in favour of hard currencies as
gold's status as a store of value has declined.

The Dutch central bank on Saturday said it would sell
100 tonnes of gold under the new five-year gold sale
agreement that takes effect in September and sell 50
tonnes left from a previous agreement.
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Gold -- Sharefin, 06:56:01 09/15/04 Wed

Italian Central Bank Says It Plans No Sales of Gold

ROME (Reuters) - the Bank of Italy does not have to the study the cession of its gold reservoirs.

Precise a famous one of the institute centers them.

The governor "has not never spoken about this argument; neither on it plans of some kind exist ", law in the official notice.

"We will say something to Washington", had said slid saturday to Reuters the governor Antonio demanded Fazio to comment the position of the central bank them Italian on the argument.

To the March beginning it has been renewed a quinquennial agreement that vincola 14 central banks them Ue to limit to 500 annual tons the vendibile quota their gold reservoirs.
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a new gold and forex we in spanish -- oroyfinanzas, 01:11:11 09/15/04 Wed

hi
we have a new gold web site in Spain

www.oroyfinanzas.com

hope to see you around!
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Periodic Ponzi Update PPU -- $hifty, 21:50:47 09/12/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,894.31 + Dow 10,313.07 = 12,207.38 divide by 2 = 6,103.69 Ponzi

I dont have the Ponzi from last week. I was under the weather (Hurricane Frances) .

Thanks for the link RossL

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Fiat -- Sharefin, 21:49:24 09/12/04 Sun

"Government Economic Reports: Things You've Suspected but Were Afraid to Ask! -- Federal Deficit Reality"

When it comes to government economic data, it is easy to get terribly confused. In recent years, it also has become easy to be more and more suspicious of the numbers themselves.
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U.S. Treasury Shows Actual 2003 Federal Deficit at $3.7 Trillion
Deficit Moves Beyond Any Possible Tax Remedy
Could U.S. Treasuries Face a Rating Downgrade?
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The U.S. government's fiscal ills have spun wildly out of control and no longer are containable within the existing system. As detailed in this article, the actual annual shortfall in U.S. government operations for fiscal year 2003 (September 30) was $3.7 trillion. Put in perspective, that means if the U.S. Treasury had seized all wages and salaries in 2003 with a 100% income tax, there still would have been a deficit! The outlook for fiscal 2004 numbers is even worse.

Considering that the popularly reported 2003 budget deficit was $374 billion, one-tenth the number cited above, this installment on government reporting concentrates on where the incredulous $3.7 trillion number comes from, how and why the Treasury is reporting it, and why the financial press and federal politicians are ignoring it.

Nonetheless, some implications of the current circumstance are touched upon briefly, here, conditioned by the promise of a full and separate analysis at a future date.

As brief background, the $3.7 trillion number is from government financial statements prepared using generally accepted accounting principles (GAAP), and a large portion of the expanded deficit is from the annual increase in the net present value of unfunded Social Security and Medicare obligations.

The impossibility of this circumstance working out happily is why lame-duck Federal Reserve Chairman Alan Greenspan suddenly has urged politicians in Washington to come clean on not being able to deliver promised Social Security and Medicare benefits already under obligation. He suggests, correctly, that there is no chance of economic or productivity growth resolving the matter. The funding shortfall projections already encompass optimistic economic assumptions.

Even if the Administration and Congress heeded Greenspan's advice, the unfolding fiscal disaster faces one of only two very unpleasant general solutions:

· The first solution is draconian spending cuts, particularly in Social Security and Medicare, even if accompanied by massive tax increases. This appears to be a political impossibility, at present.

· In the absence of political action, the second solution is the U.S. government facing some form of insolvency within the next decade or so. Shy of Uncle Sam defaulting on debt, the most likely outcome is the Fed eventually having to monetize U.S. debt heavily, triggering a hyperinflation. U.S. obligations eventually would be paid off in a significantly debased and devalued dollar.

Implications for the United States' sovereign credit rating is discussed more fully in a later section, but the unfolding fiscal crisis also opens the possibility of a credit downgrade for U.S. Treasury securities. This could happen before either of the two broad solutions discussed above comes into play.
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In searching World Bank data, I couldn't find any nation with a debt-to-GDP ratio worse than the United States' GAAP obligations ratio of 334%. The closest found is for the West African state of Guinea-Bissau at 224%, but Guinea-Bissau is not rated.

The twist here, of course, is the accounting method used in analysis. Based on the gimmicked, instead of GAAP, fiscal numbers, the U.S. deficit and debt ratios are a little high but relatively benign at 4.8% and 62.8%. Further, much more goes into a sovereign debt rating than the discussed ratios. Still, if any country but the U.S. had GAAP deficit and debt ratios of 34% and 334%, its debt most likely would be given junk-bond status by the rating agencies.

Accordingly, a case can be made that the risks of the United States "servic[ing] debt through excessive money creation" are high enough so as to be inconsistent with a "AAA" rating. Political practicalities, though, likely will forestall any formal downgrade of the U.S. credit rating. Since a downgrade would trigger global financial-market and currency turmoil, action even could be delayed until the last minute.

Nevertheless, Fitch had the United States on a negative rating watch in 1995, and there have been occasional rumblings by S&P and Moody's when Congress has been slow to authorize raising the ceiling on federal borrowing limits. Minimally, a shift to a negative rating outlook by one or more of the major rating agencies is not out of the question.

Irrespective of any credit rating actions, the credit markets usually catch up with underlying reality. That suggests there will develop a long-term higher floor under U.S. interest rates than has been seen previously.
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Gold -- Sharefin, 00:28:24 09/08/04 Wed

China Gold

GFMS, the precious metals research company, says that another twelve Chinese gold mining companies are preparing to float on the Shanghai bourse, but there is still no sign of any significant investment in China’s gold mining industry by foreign miners.

Gold has been mined in China for thousands of years according to the GFMS: The gold market in China. But it was only when government incentives were put in place in the late Seventies that the industry began to boom. “After 1976, gold production effectively doubled every five to ten years, to reach the current plateau of 200 tons per year,” says the survey. China is currently the world’s fourth-largest gold producer, behind South Africa, the US and Australia.
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Gold -- Sharefin, 00:20:37 09/08/04 Wed

Major gold producers slash hedge books as price rises

Major gold producers, expecting prices to rise towards 16-year highs in the next few months, are slashing their hedge books to take advantage, leading industry officials say.

Barrick Gold, the world's third-largest bullion producer, estimates prices will rise to their highest levels since 1988.

Its chief financial officer, Jamie Sokalsky, said at the global gold conference in Shanghai: "It seems that, for the first time in many years, many factors are bullish for gold. Demand is strong in areas of the world like China, and the US dollar should remain weak."
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Sokalsky said gold would move into the "mid-$400s to high-$400s" an ounce range by the end of this year and hold there in 2005.

Newmont Mining, the world's largest gold miner, expected gold to trade between US$380 and US$450 or higher for the next 12 months, company president Pierre Lassonde said.
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Toronto-based Barrick slashed its hedge book by 850,000 ounces to 13.9 million ounces, or 16 per cent of its in-the-ground reserves, during the second quarter.

Newmont expected more gold firms that hedged their output to declare bankruptcy as prices rose, Lassonde said.
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Gold -- Sharefin, 00:18:38 09/08/04 Wed

Aussie gold hedgers caught in crossfire

The share prices of some major Australian-based gold producers who are hedgers continue to drift lower following last week’s surprising financial collapse of Sons of Gwalia (SOG) under the weight of heavy hedging.
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But that economic philosophy is of no succor to SOG shareholders left carrying the baby and the Perth-based group’s potential bankruptcy in an apparently buoyant gold market appears to have reawakened concerns about hedging. At the weekend Pierre Lassonde, the president of the world’s biggest gold company Newmont Mining, fuelled the fire. “Gold hedge books are real liabilities that will continue to grow and likely sink more gold companies,” he was quoted as saying. And the SOG fallout and anti-hedging sentiment seems to have resulted in knee jerk negative perceptions about other Aussie gold stocks – such as Lihir Gold [ASX:LHG], Resolute Mining [ASX:RSG] and Kingsgate Consolidated [ASX:KCN].
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Gold -- Sharefin, 00:05:00 09/08/04 Wed

China to Let Individuals Trade in Gold

China's gold-crazed masses will be allowed to trade in the precious metal under reforms that will upgrade trading on the country's nascent market, state media reported Tuesday.

Trading in gold will provide another choice for individual investors who keep their money stashed in bank accounts due to a lack of desirable investment options, the official Xinhua News Agency cited the central bank governor, Zhou Xiaochuan, as saying.

Trading by individual investors would unlock some of the 1.2 trillion yuan (US$145 billion; euro 119 billion) now kept idle in bank savings accounts, Zhou said.

"China will speed up the opening of its gold market to bring gold exchanges more in line with international practice," Zhou was cited as telling an industry conference in Shanghai. "China's gold market will eventually become one inseparable part of the international gold market."

China still tightly controls trading in the precious metal, and restrictions on gold imports and exports limit international dealings.
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Transactions on the Shanghai Gold Exchange totaled 235.35 tons valued at 22.96 billion yuan (US$2.7 billion; euro 2.3 billion) last year. In the first seven months of this year, trading volume jumped to 363.76 tons valued at 36.9 billion yuan (US$4.5 billion; euro 3.6 billion), Xinhua reported.
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Gold -- Sharefin, 00:03:49 09/08/04 Wed

Gold bourse outlines new targets

Shanghai Gold Exchange (SGE), China's sole gold transaction market, is to speed up progress to achieve the level of international markets by upgrading systems and developing new products.

Shen Xiaorong, chairman of the SGE board, said yesterday at the London Bullion Market Association (LBMA) Precious Metals Conference that establishing a safe, efficient and high-capability trading system that could adapt fully to the evolution of gold transactions in China was a key point in the steady operation and sustainable development of the SGE.

"Put into operation on August 16, the SGE's new trading system now supports 1,000 quotations a second and 3 million customers at the same time," said Shen.

"In addition to maintaining current business, this new trading system can also support spot, forward, deferred and even futures trading methods."
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Gold -- Sharefin, 23:24:52 09/05/04 Sun

Surge in gold demand expected

Annual gold demand on the Chinese mainland is expected to triple in coming years as a result of the ongoing gold market deregulation, according to the World Gold Council.

In a report released yesterday in Shanghai, the council forecast a rise in gold demand on the mainland from the current 200 tonnes to 600 tonnes a year, based on the effects of a similar market deregulation on India. Much of the extra 400 tonnes a year would come from imports, reported China Daily.

The report comes on the eve of the September 6 to 7 conference of the London Bullion Market Association in Shanghai, being held for the first time in China.

The mainland now ranks No 4 in gold demand in the world.

Council statistics show that gold demand on the mainland surged by 30.8 per cent year-on-year to 51.5 tonnes during the second quarter of this year, in which 50 tonnes were for jewellery and 1.5 tonnes for retail investment.

The mainland's gold demand reached 207.6 tonnes last year, up from 203.9 tonnes in 2002 and 10 tonnes in 1982.
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Major uncertainties affecting gold consumption on the mainland are that the current stock of gold in China is estimated to be an 5,000 to 8,000 tonnes, and the intentions of the central bank in its reserves policy. Now, China's central bank reserves 600 tonnes of gold, accounting for 2 per cent of its total foreign exchange reserve, compared with the European Central Bank's 15 per cent, it said.

The mainland's foreign exchange reserves stand at some US$470 billion - among the highest in the world.
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The mainland's gold output reached 200.6 tonnes last year, up 5.7 per cent from 2002.
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Gold -- Sharefin, 11:18:27 09/05/04 Sun

TAIWAN'S GOLD DEMAND IN Q2 UP 19 PERCENT: WGC

Taiwan's demand for gold during the second quarter of this year increased 19 percent compared to a year earlier, according to the latest report released by the World Gold Council (WGC). The report shows that world consumer demand for gold in the second quarter rose by 11 percent in tonnage term and 25 percent in dollar terms when compared the same period of last year. Taiwan's gold demand for jewelry between April and June amounted to 4.5 metric tons, up 19 percent from a year earlier, it said, adding that the lack of severe acute respiratory syndrome outbreaks and strong promotions by gold dealers in May for Mother's Day stimulated local consumer demand. The WGC also said that the rapid economic growth, stable price index and the public's continuous concern over economic and political prospects have led to the increase in demand for gold. Although gold prices rose 13 percent, world gold demand for jewelry use still increased 8 percent, or 664 metric tons, in the second quarter compared with the year-earlier level. The council also said that mainland China's demand for gold rose about one-third over the same period of last year.
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Gold -- Sharefin, 11:10:27 09/05/04 Sun

Newmont sees gold at $380-$450/oz in year ahead

Newmont Mining Corp, the world's largest gold miner, expects gold to trade in a range of $380 to $450 an ounce for the next 12 months, and possibly higher, because of a poor outlook for the dollar and the U.S. economy, said its president, Pierre Lassonde.

The Denver-based company expected more gold firms that hedged their output to declare bankruptcy as gold prices rose, he added.

"Gold hedge books are real liabilities that will continue to grow and likely sink more gold companies. Newmont has a clear policy of non-hedging and we remain committed to it," Lassonde told Reuters by e-mail.

Last week, Australian mining house Sons of Gwalia Ltd (SGW.AX: Quote, Profile, Research) said it faced bankruptcy after discovering its mines might not have enough gold left to meet its gold hedge commitments and finance its foreign exchange exposures.

As gold prices have surged 60 percent from around $250 an ounce in early 2001 to around $400 an ounce, many producers have tried to unwind contracts they made to sell gold at prices set much lower than the market.

"With the gold price rising, I expect more companies will declare bankruptcy as the liabilities associated with their hedge books continue to rise. For the next 12 months, we see gold trading in the $380 to $450 range.

"Should the U.S. economic situation deteriorate more rapidly than we have forecast, it could push the U.S. dollar down and propel the gold price up sharply, possibly above that band," he said.

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Let us all remember that most all of the hedges that have been removed from the miners books have not been paid off with ounces from production but rather through payment in cash, or through debt.

Though many miners have cleared their hedge books most of the contracts are still open ended between the Bullion Banks & the Central Banks.

This means that the exposure risk to higher prices till exists but within the Bullion Banks.

This is quite evident in the gold derivatives of the major Bullion Banks whose portfolios have grown at the same time that the miners hedges were being decreased.

Though it is not talked about - most people presume the exposure is covered when the miners close out their hedges - the exposure risk for gold at higher prices is still very much alive. It is just well hidden in the banks portfolios.

This little smoke out with SGW will be a taste of the rat's tail for the Bullion Banks.(:-)))
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Gold -- Sharefin, 11:00:46 09/05/04 Sun

Aussie gold 'safe'

AUSTRALIA'S gold industry is safe from a shortfall that sparked the collapse of historic miner Sons of Gwalia, according to analysts.
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The move came after a review of gold reserves raised concerns that Sons could meet hedge book requirements. Sons of Gwalia had signed contracts to deliver gold at a fixed price in the future.

Adminstrator Ferrier Hodgson, who did not return calls from The Courier-Mail, told creditors at a Perth meeting on Friday that liabilities could be between $700 million and $800 million.
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"In general, I would think that most other companies aren't looking at making significant writeoffs," Mr Edney said. "Which probably means that there's no issues with respect to changes to the hedging counterparties' perception of production or resource risk."

Shaw Stockbroking resource analyst John Colnan said market participants had believed for several years that Sons' gold assets were struggling to provide the output needed to match the hedge book.

"The gold hedging over there was for several years beyond (its hedged) period," he said.

"They were short of production and hence couldn't deliver into those contracts.
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Mr Colnan said while shortfalls happened to operations "from time to time", he did not believe it would strike the broader sector.

"We don't believe there's any substantial producer who is currently faced with the same issues . . . that is, a reserve base insufficient to meet commitments," he said.
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Gold -- Sharefin, 10:58:17 09/05/04 Sun

Less gold to be sold than planned

European central banks may sell as little as 250 tons of gold per annum, instead of the maximum of 500 tons per annum, as per the second European Central Bank agreement, from 2004 through to 2009, London-based UBS analyst John Reade said in a note on Friday.
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Gold -- Sharefin, 17:17:32 09/03/04 Fri

Sons of Gwalia's gold hedging had big holes

One of the perplexing questions raised by this week's collapse of Sons of Gwalia is how so many smart investors could have got it so wrong.

Stranded on the register of the failed tantalum and gold producer are some of the cannier institutional investors, while some of their equally clever peers escaped in the nick of time.

Among Sons of Gwalia's substantial shareholders are the Templeton group, Schroeder and Aviva. Canadian miner Teck Cominco owns about 10 per cent and a major tantalum customer, Cabot Corp, is also on the register. Goldman Sachs, Wellington and National Australia Bank's funds management businesses were all shareholders until very recently.

Also exposed to the collapse are some of the world's biggest banks, including Citigroup, HBOS, Goldman Sachs, JPMorgan, Dresdner, HSBC and, locally, ANZ and Commonwealth.

The institutions which got caught are angry. They knew the company's tantalum and gold arms had their challenges but hadn't envisaged the implosion.
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Sons of Gwalia, founded by the Lalor brothers, descendants of the Peter Lalor who led the Eureka Stockade rebellion in 1854, has produced about 5 million ounces of gold since it began producing the metal in 1984. Until this week, it had been expected to produce about 500,000 ounces a year.

Its ability to generate that production was critical because throughout its history it has fully hedged its production - in effect selling forward its entire output using some extremely complex strategies.
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Sons of Gwalia's chairman, Neil Hamilton, said this week that the review had identified a serious deterioration in the status of the group's gold reserves and resources which raised concerns about the company's ability to meet its hedge book commitments.

The position in which Sons of Gwalia found itself doesn't appear particularly complicated. It had committed to deliver a net 1.3 million ounces of gold to hedge-book counter-parties but the review had revealed a shortfall in economic reserves of about 500,000 ounces.

Sons of Gwalia had no way out - its hedge book was about $350 million underwater at June 30 on a mark-to-market basis and a rising Australian dollar gold price was exerting further pressure on the economics of the book.

The group had sold a lot more gold than it could produce. Its fundamental problem wasn't the hedge book or its gold operations but the interaction between the two.
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The complexity and the opacity of the hedging wasn't given sufficient emphasis, nor did the investors recognise that the problems within the gold operations might create a question mark over the economics of the resources and therefore over Sons of Gwalia's ability to meet its hedge book commitments.

They will pay a steep price for their distraction. The administration will crystallise the losses in the hedge book and inevitably exacerbate them.

There are suggestions that at least two of Sons of Gwalia's three gold operations are considered uneconomic, which in turn suggests the losses for the hedge book counter-parties could be very substantial and virtually guarantees that equity holders won't see any return once the tantalum business is sold and creditors absorb its proceeds.

The fate of Sons of Gwalia and its investors will reinforce the lesson provided by Pasminco's collapse and other hedge-related disasters.

Even sophisticated institutions will be reluctant to invest in companies with extensive hedging operations, particularly where the strategies are complex. And one suspects that even the investment banks which sit on the other side of the hedges will be more cautious in assessing the quality of the resources that underpin the production commitments and the proportion of production that can be sold forward.

Sons of Gwalia's strategy left it with no margin for error.
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Gold -- Sharefin, 04:34:11 09/03/04 Fri

Newmont manager is a suspect

Indonesia's National Police Wednesday named as a suspect the manager of waste disposal at PT Newmont Minahasa Raya in the law enforcement agency's investigation of the pollution of Buyat Bay in North Sulawesi, Indonesia.

Police Detective Chief Comr. Gen. Suyitno Langung Sudjono said the manager was the person in charge of insuring that the mine's waste disposal system complied with national environmental regulations. Under Indonesian law, a person found guilty of deliberately contaminating the environment may face 10 years in prison, or up to 15 years if the pollution caused death or physical suffering of a human being. Suyitno said the police will question the unidentified manager on Monday. If they find that he provided his superiors with reports that they failed to act upon, they will be questioned as well.

PT Newmont's lawyer Palmer Situmorang said the company is ready for questioning either as witnesses or suspects, and will prove in court that the company is not guilty of polluting the bay.

Several local residents of Buyat Bay complained to National Police about chemical contamination at Buyat Bay, which is located near PT Newmont Minahasa Raya. Most people in the village of Buyat Pantai near recently defunct gold mine make a living from fishing. A few villagers were flown to Jakarta by environmental activists and a local doctor to file criminal charges against Newmont for polluting Buyat Bay. Newmont disposes of mine tailings through a subsea method. Newmont officials have consistently insisted that those tailings do not contain amounts of mercury, arsenic, or other substances harmful to human health. Nevertheless, a number of local residents suffer from various illnesses include skin ailments, lumps, and painful headaches. Newmont maintains that unsanitary living conditions, inadequate sanitation infrastructure, and mercury used by illegal small miners has actually caused these illnesses.

Meanwhile, State Minister of the Environment Nabiel Makarim announced Tuesday that a review by 16 scientists from several universities and independent organizations have concluded that PT Newmont Minahasa reportedly violated environmental regulations and contaminated the Bay.
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Gold -- Sharefin, 04:31:54 09/03/04 Fri

Outspoken Goldcorp CEO plans to step down

McEwen says company needs a new boss to take it to the next stage of development

Rob McEwen, the outspoken head of a company that made "gold is money" its motto, plans to step down as chairman and chief executive officer and has asked the board of directors to search for a replacement.

Mr. McEwen said Goldcorp Inc. needs a new boss to take it to the next stage of its development.
~~~
Mr. McEwen has been Goldcorp's CEO for 18 years. He is known for aggressive promotional tactics, including placing radio advertisements for the company's shares -- an unusual strategy for a mining company -- and being a regular speaker at industry trade shows and events. In 2000, Goldcorp launched an on-line exploration challenge that offered cash prizes to teams that identified new exploration targets at its flagship Red Lake mine in Ontario.

Analysts and industry observers said his departure could reflect differences at the board level over the firm's strategic direction. Goldcorp gets nearly all its gold from Red Lake, where a new high-grade zone discovered in 1995 reinvigorated the decades-old mine and pushed its gold production costs to among the lowest in the industry.

The company is cash rich -- it reported assets of $380.5-million (U.S.) at the end of the second quarter, including cash and short-term assets of $302.9-million and $46.6-million worth of gold bullion.
~~~
Goldcorp subsequently began rebuilding its inventories and as of June 30, held 3.7 tonnes in inventory and said it was withholding about 10 per cent of production until the end of the year.

In a report yesterday, UBS Securities Canada Inc. analyst Tony Lesiak said Mr. McEwen's departure "signals change to the market."

"Despite the company's growth aspirations, [Mr. McEwen] has not been able to accomplish larger deals," he wrote. "We view that a new CEO may bring a more aggressive stance."
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Gold -- Sharefin, 19:17:19 09/02/04 Thu

Dear Friend of GATA and Gold:

The World Gold Council purports to be the
representative of the gold community but until
today it had had virtually nothing to say for three
months -- not a word about Sprott Asset
Management's report confirming the manipulation
of the gold price, not a word about the collapse of
Sons of Gwalia because of excessive hedging, not
a word about Blanchard & Co.'s lawsuit against
Barrick Gold and JP Morgan Chase for
manipulating the gold market, and barely a word
about Argentina's defiance of the International
Monetary Fund by purchasing 42 tonnes of gold
for diversifying its foreign exchange reserves.

And as the world financial system creaks, groans,
and trembles all around, what was today's WGC
statement about?

It was about another advertising campaign for gold
jewelry -- anything except analysis of what really
matters to gold's future, liberating the price and
thereby restoring monetary and investment demand
and adding to individual liberty throughout the
world.

Today's statement from the gold council is
appended. The council calls its jewelry
campaign "Speak Gold." It might better be
called "Speak No Evil."

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

World Gold Council unveils £10m global advertising campaign

September 2, 2004

http://www.gold.org/news.php?id=3329273

The World Gold Council (WGC) has unveiled its latest
£10 million international advertising campaign, "Speak
Gold," designed to stimulate consumer demand for
gold jewellery in key global markets.

Acclaimed photographers Michael Yamashita, William
Albert Allard, Jodi Cobb, and Joel Sartore, were asked
to capture the emotional role played by gold jewellery
in the lives of women all over the world.

Rather than using fashion models, the campaign has
used ordinary women to illustrate contemporary views
of everyday life in urban and rural settings.

The photographers captured images of women in China,
Italy, USA, and India, depicting different cultures and
similar emotional contexts with the unifying and
universal energy of gold jewellery.

The universal language and historical relevance that
are unique to gold are the key creative concepts
underpinning the "One Language Everyone
Understands" idea.

Philip Olden, the World Gold Council's managing
director of international jewellery and marketing,
commented: "By depicting women in everyday
situations in a global setting, the campaign
represents a departure from the style of advertising
which has to-date characterised the luxury goods
industry.

"Early feedback from focus groups in the U.S. and
Italy has already told us that consumers welcome
the relevance of our approach."

Steve Kershaw, group director at BBH, commented:
"We're delighted that this idea is borne out of real
consumer insights into real people and their love
for gold jewellery rather than the contrived imagery
usually associated with luxury fashion advertising."

The print-based campaign , which was created by
London agency Bartle Bogle Hegarty (BBH), will
appear in leading fashion and lifestyle titles in the
U.S. and Italy, including Elle, Vogue and Marie
Claire, from September to December 2004.

The "One Language" campaign will be rolled out into
other major international markets during 2005.


---
Just like MineWeb - the WGC just does not get it!!!
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Silver -- Sharefin, 22:46:55 08/31/04 Tue

VOICE IN THE WILDERNESS

The report, however, makes a major omission. Until Ted Butler made public his letter of April 8, 1997 to government officials that complained about leasing, no one had described the negative impact of leasing on the price of gold and silver. Sprotts report credits numerous people for uncovering the gold manipulation, but overlooks Mr. Butler. I’ve extracted several key points from his 1997 letter. "As the highest monetary officials of our country, I beseech you to investigate and terminate what has been a fifteen year fraud in two of the world’s most important markets…. The fraud in question is the lending of precious metals (gold and silver) by central banks, principally to mining companies, but also to users and speculators…. These metal loans, which began to appear around 1982, have proved enormously popular with all the participants involved, and the total market issuance is reported to exceed a value of $50 billion…. First, there is no possible way these loans can be collectively paid back without a complete abandonment of the terms and conditions under which the loans were originated. This is where the fraud come in – if it is obvious before hand that a class of loans can’t possibly be repaid as scheduled, such loans would have to be considered fraudulent instruments. Second, the huge volumes of these fraudulent loans has unquestionably manipulated the price of gold and silver to uneconomically depressed levels for the past 15 years."

The entire letter is reprinted below and I believe it’s a must read. It verifies that Mr. Butler was indeed the pioneering thinker in uncovering and exposing the manipulation of precious metals prices.
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Gold -- Sharefin, 19:13:31 08/31/04 Tue

Launch of streetTRACKS gold shares at NYSE awaited

Gold-backed securities known as streetTRACKS could soon start trading on the New York Stock Exchange, according to a statement posted Monday on the Securities and Exchange Commission's Web site.

The previously unnamed equity trust, sponsored by the World Gold Council, is designed as an alternative to investing in physical gold, which is difficult and expensive for nonprofessional to move, store and insure.
~~~
Financial markets have been anticipating its debut, and rumors have circulated among gold traders and analysts in recent weeks that a launch was imminent.

The New York securities are similar to Gold Bullion Securities Ltd. (GBSx.L: Quote, Profile, Research) , which started trading on the London Stock Exchange in December 2003.

The U.S. version has registered 60,400,000 shares, each representing ownership in 1/10 ounce of gold, according to the prospectus. Share prices, which will trade under the ticker symbol GLD, will be determined by the spot price of gold at the time they are sold to the market.

The actual gold will be warehoused by the custodian, HSBC Bank USA. The trust will be administered by The Bank of New York.
~~~
Exchange traded funds offer the small investor the ability to play in gold, without handling the physical asset. Investors can also buy shares in gold companies, but may be discouraged by the financial nuances of the mining industry and by influences on stock prices which may not be related to the underlying value of gold.
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Gold -- Sharefin, 22:04:06 08/30/04 Mon

Sons Of Gwalia Gold De-Hedging Process Already Started

The voluntary fall into administration by
Australia's second-largest gold miner, Sons of Gwalia Ltd., has prompted gold-
market watchers to speculate that the miner's 81-metric-ton, or around 2.6-
million-ounce, hedge position has been in the process of being unwound over
the past week.
The Perth-based company said Monday that it appointed voluntary
administrators over the weekend after identifying a "serious deterioration" in
the status of its gold reserves, which meant the company lacked the resources
to meets its hedge book commitments.
Gold dealers agreed that the company's bankers likely will have pushed for
a squaring of holdings ahead of bankruptcy filings, which would have included
an unwinding of its hedge book.
Last week, market participants reported regular spurts of gold buying
through several investment banks which market participants say may well have
been intermediaries of Sons of Gwalia unwinding the company's hedge exposure.
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Gold -- Sharefin, 22:01:31 08/30/04 Mon

Never mind gold's price, look at volume

Peering closely, I see three factors at work:

First, India, the world's biggest gold importer, was unfalteringly a buyer right up to the high of $412 this past week. I gauge Indian off-take by looking at the local premiums. (Read related column.)

Previously, Indian buying has been choked off at these levels. And the busy season for gold purchases in India is only just beginning.

Inevitable outcome: A great deal of metal will go to live in India this fall -- unless world gold moves up sharply from the $400-plus level.

Second, the Middle East also appears to have become gold-hungry. It's more difficult to follow, but those local premiums I can access have started to suggest this.

So do recent reports of quantities traded. Turkey, for instance, imported a record weight of gold in July.

Conclusion: the physical demand for gold is ratcheting up to support the price.

Thirdly, and below the surface, the past two weeks have seen extraordinary increases in Comex (New York Commodities Exchange) open interest, which have accompanied gold price recent moves.
~~~

In other words, gold volume has been huge. It's just the price that has been boring.
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Gold -- Sharefin, 21:59:03 08/30/04 Mon

Silver slips as exposure to photography declines

Analysts warned that demand was waning following signs in recent weeks that film photography is being shouldered out of the market by digital alternatives.

Last week Belgian group Agfa said it was selling its consumer photography unit to management and earlier this week Ilford, which manufactures black and white film, announced it had gone into administration. Last month Eastman Kodak said its digital sales had risen by 48pc in the three months to June while traditional film sales were down by 8pc.

Metals research group GFMS said yesterday that photography accounted for 23pc of silver demand, although this had fallen from 27pc since 1994.
~~~
Aside from jewellery, silver also has industrial and medical applications. Philip Klapwijk, executive chairman of GFMS, said he expected some "fairly sharp declines" of silver demand from the photographic industry in the next decade but added that he did not expect silver prices to plummet.

He said: "Around two-thirds of the silver used by the photography industry comes back on to the market through recycling, so the net impact is rather smaller than the gross."
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Gold -- Sharefin, 20:59:16 08/30/04 Mon

In search of a golden fleece

There are plenty of conspiracy theories out there, from the Kennedy fetishists with their homemade copies of the Zapruder film to the Area 51 geeks with their tales of alien technology kept under wraps by NASA. In the financial arena, the most popular by far is the idea that central banks, the International Monetary Fund, bullion banks and even the Federal Reserve Board are in cahoots to suppress the price of gold.

But is this just a wacky theory promoted by gold bugs and Internet kooks with too much time on their hands, or is there more to it than that? Sprott Asset Management market strategist John Embry believes the latter — that despite the loony-sounding ideas of some conspiracy advocates, there is a core of truth to their claims that gold is being "managed" by central banks and other financial institutions. He laid out those arguments in a recent 66-page research report.
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Gold -- Sharefin, 20:57:19 08/30/04 Mon

Canada report lends support to gold "conspiracy"

Gold price conspiracy theorists got a credibility boost on Tuesday when a respected Canadian gold fund manager released a 71-page report arguing that bullion prices have been artificially depressed by central banks, bullion banks and hedge funds.

In a document titled "Not free, not fair: the long-term manipulation of the gold price," John Embry, the chief investment strategist at Sprott Asset Management, details incidents in the last decade that "collectively refute the idea that gold is a free market".

Sprott is a private Toronto-based asset management and research company managing more than $1.6 billion for institutions and private investors.

"We certainly do not look upon ourselves as crusaders, but the more we investigated the gold market, the more readily apparent it became that the gold price appeared, in the politest of terms, to be managed," Embry said in the report that he co-authored.

He said the gold price's moves seemed at times to be counterintuitive, going down on days when there were compelling reasons for it to rise.

"We avoid the word 'conspiracy' and prefer to instead believe that, at least initially, powerful groups -- central banks, bullion banks, hedge funds, etc -- were operating in their own self-interests and not necessarily in concert with one another," Embry said.
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Gold -- Sharefin, 18:34:17 08/30/04 Mon

Sons Of Gwalia In Administration On Hedging Debt

Sons of Gwalia Ltd. (SGW.AU), Australia's second-biggest gold producer, has fallen into administration over a A$348 million hedge book liability.

The Perth-based company said Monday that it appointed voluntary administrators over the weekend after identifying a "serious deterioration" in the status of its gold reserves.
~~~
Sons of Gwalia's gold counterparties - nine banks and financial institutions - refused to accept a standstill agreement on the hedging debt.

Hedging, which is a form of risk management used by companies to reduce the chance of a loss from price movements, includes tools such as forward selling and options.

Citigroup Inc. (C) is understood to be the company's biggest hedging counterparty, with an exposure of between A$100 million and A$150 million.

Other counterparties include: BankWest, a unit of HBOS Plc (HBOS.LN); Goldman Sachs Group Inc. (GS); JP Morgan (JPM); Dresdner Bank AG (DRB.YY); Commonwealth Bank of Australia (CBA.AU); Australia & New Zealand Banking Group Ltd. (ANZ) and HSBC Holdings Plc (HBC).

As of June 30, Sons of Gwalia's 3.1 million-ounce gold hedge book had a negative mark-to-market value of A$348 million. It also had currency hedges that were A$75 million in the red.

Sons of Gwalia also owes US$170 million to U.S. pension funds, following a private note placement in 2000 arranged by JP Morgan.
~~~
Founded in the early 1980s, Sons of Gwalia became a pioneer in the use of hedging to protect its gold revenue.
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Gold -- Sharefin, 18:26:56 08/30/04 Mon

Gold Rises as Sons of Gwalia Raises Delivery Commitment Concern

Gold prices in New York rose for the first time in three sessions after Sons of Gwalia Ltd., Australia's second-biggest gold miner, said it's concerned about its ability to supply gold under previous sales contracts, spurring speculation of buying by counterparties.

A review found a ``serious deterioration'' in Sons of Gwalia's gold reserves, raising concerns about whether it can supply metal it has committed to sell in the future, the Perth- based company said in a statement to the Australian Stock Exchange. Sons of Gwalia had 3.1 million ounces of gold committed to sell as of June 30, compared with 3.27 million ounces of gold reserves as of September last year.

If the counterparties ``can't get the gold from this company, then they have to go buy from the cash market to cover their needs,'' said David Rinehimer, an analyst at Citigroup Global Markets Inc. in New York. This is a ``supportive factor'' for gold prices.
~~~~

The company would have had to pay A$348 million ($243 million) to settle its gold hedging contracts.

`Significant Downgrade in Reserves'

``There was a significant downgrade in reserves and resources which had a consequent impact on future production outlook,'' and led to a decision to consider selling the company's gold assets, Chief Executive John Leevers said in an interview. ``Many resources didn't stack up as being viable to mine.''
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Periodic Ponzi Update PPU -- $hifty, 19:17:06 08/29/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,862.09 + Dow 10,195.01 = 12,057.10 divide by 2 = 6,028.55 Ponzi

Up 54.47 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


[Edit]

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Gold -- Sharefin, 21:31:54 08/25/04 Wed

South African gold loses luster

Hard times and job losses follow as deposits are played out
~~~
Across South Africa, hundreds of thousands of jobs have been lost in the gold industry. From a peak in 1987, the industry has shed more than 340,000 jobs and employs just over 200,000 people today.

Almost a third of the job losses have been in the Welkom area. The most recent losses occurred in 2004 when the region's largest gold producer, Harmony Gold Mining, cut thousands of jobs by closing several unprofitable shafts and scaling others back.

Although South Africa is still the world's largest gold producer, its output has been declining for almost two decades. Mines have closed, and fewer projects are being started. In 2003, the country produced less gold than in any year since 1956.

"Everyone just thought this country had resources that would last forever," said Ferdi Dippenaar, Harmony's director of marketing and investor relations. "But like any resource, it has an end."
~~~
In the past decade, the quality of the ore dug here has steadily declined. Because it is nestled so deep in the ground, more tons of rock must be taken out to get the same amount of gold.

"The best ore has all been mined out, and now they're left with poor-grade bodies at a time when the rand gold price is very low," said Hilton Ashton, a commodity analyst with the South African investment bank ABSA.
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Gold -- Sharefin, 10:33:28 08/24/04 Tue

New treatment good as gold for eczema sufferers

Diamonds may be a girl's best friend but doctors are hoping gold may hold the key to treating their skin problems.

Researchers are trialling a unique treatment for eczema which uses gold as its active ingredient.
~~~
Sydney doctors have developed a treatment which combines a compound derived from gold with a very low dose of steroid.

"In animal experiments, it's been shown that gold can affect the immune system. And we have other examples of gold being used as a treatment in rheumatoid arthritis," Dr Susi Freedman, dermatologist said.
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Gold -- Sharefin, 09:24:56 08/24/04 Tue

Not Free, Not Fair: The Long-Term Manipulation of the Gold Price - 71 page pdf file


SPROTT ASSET MANAGEMENT INC. PUBLISHES GOLD MANIPULATION STUDY

Toronto, August 24, 2004: Sprott Asset Management Inc.

(“SAM”) announced today the
publication of Not Free, Not Fair: The Long-Term Manipulation of the Gold Price.

The study represents the most thorough and detailed examination of allegations that the gold
market has been subjected to severe price manipulation over the past several years.

Commenting on the landmark report, John Embry, Chief Investment Strategist stated: “We, at
Sprott Asset Management, have felt for some time that the gold price has not remotely reflected
its true underlying fundamentals. In response, we have conducted a comprehensive study of
available information on the subject and have concluded that the evidence strongly supports
those who believe that the gold price has been and continues to be suppressed.”

The study may be read in its entirety on Sprott Asset Management’s website: www.sprott.com
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Gold -- Sharefin, 03:37:19 08/24/04 Tue

The Best Way to Buy Gold

As an investment advisor, I consistently encounter the same reaction when I tell investors they should own physical precious metals in a certain portion of their portfolios. “You mean buying shares in mining companies, not owning the actual metal, right?”

While this reaction, due to a 20-year precious metals bear market, is not surprising (and is, in fact, quite bullish from a contrary perspective), it also highlights that actually buying physical gold, silver or platinum still seems daunting to most investors.

What all investors should know is that buying mining company shares represents a leveraged speculation on the trend of precious metals prices; physical metals themselves constitute the ultimate protection against government-created inflation and the resulting decay in your dollar savings.

As a full service investment firm, ours offers many ways to gain precious metals exposure. When it comes to the purchase of physical gold, silver or platinum, however, one investment stands out: the Perth Mint Certificate Program.

Here’s how the Perth Mint Certificate Program (PMCP) answers the concerns most investors have about buying physical precious metals:
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Silver -- Sharefin, 03:27:13 08/24/04 Tue

Silver Balderdash

But so what? Nearly every single molecule of silver used in the manufacture of silver returns to the market as "scrap" when it's recycled by the film processor. (Those who don't remove every molecule of silver from their film in the stop bath, fixer and wash very quickly end up with solid black, utterly useless, negatives; those who don't recycle said recovered silver are breaking the law - at least in the U.S.) So, once again, one for the road, once more for good measure, and shout it loud enough it can be heard in the cheap seats: SILVER IN PHOTOGRAPHY IS A ZERO-SUM GAME! One less ounce of photo film silver demand is one less ounce of silver supply.
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Periodic Ponzi Update PPU -- $hifty, 22:57:36 08/22/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,838.02 + Dow 10,110.14 = 11,948.16 divide by 2 = 5,974.08 Ponzi

Up 182.79 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Gold -- Sharefin, 20:16:45 08/20/04 Fri

Gold demand up 20 pc in H1

Mumbai , Aug. 20

DEMAND for gold in the country during the first half of 2004 was 20 per cent higher in rupee terms and 10 per cent higher in tonnage terms than that in the first half of 2003.

Total consumer demand (jewellery and net retail investment) was up by 12 per cent in rupee terms and 3.6 per cent in tonnage terms, in the second quarter of 2004, according to figures published by the World Gold Council.

Both jewellery and retail investment demand were buoyant in the second quarter, just as they had been in the first quarter.

The global consumer (jewellery and net retail investment) demand for gold in Q2 was leaping by 25 per cent in dollar terms and 10 per cent in tonnage terms. Strong economic growth and a relative absence of price volatility, coupled with concerns over long-term economic and political outlook, provided a supportive environment for purchases.
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Fiat -- Sharefin, 20:15:06 08/20/04 Fri

Are you ready for a global currency?

Worldwide money may be on the horizon as a way of simplifying the planet's 190 currencies -- the Esperanto of money.

Goodbye, dollar. So long, euro and yen. Hello, dey!

Dey? It's a proposed combination of the three currencies, which could eventually form the basis of a global currency.

A worldwide money won't emerge any day soon. Still, it's a longtime dream of some economists, who point out several advantages to simplifying the jumble of nearly 190 currencies.

For starters, the world trades about $1.2 trillion worth of currencies a day. If that market disappeared, it would save companies and individuals hundreds of billions of dollars a year in foreign-exchange and hedging costs.
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Gold -- Sharefin, 20:00:34 08/20/04 Fri

Argentina ensures gold hits record

Gold prices hit a four-month high yesterday, after it emerged that Argentina bought 42 tonnes of bullion in the first half of the year in an effort to repair its shattered economy.
~~~~
A report from the World Gold Council (WGC) - the organisation that promotes the metal - revealed that Argentina bought a significant amount of gold between January and June in order to lock its wealth into stable investments rather than bonds or equities.

Analysts said other countries may start buying gold again, reversing the worldwide central bank sell-off of the past decade. Almost all western countries have been selling their reserves in exchange for investments with a higher yield.
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Gold -- Sharefin, 19:58:44 08/20/04 Fri

Auspec
Though some would not like your harsh words - they have a ring of truth to them.

I've long though he was far to vocal & outspoken.
Mahendra belongs in the same boat too.(:-)))
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Mahendra/Sinclair -- auspec, 21:49:18 08/13/04 Fri

From LeMet w "occasional permission"..............hoping I haven't worn out my welcome:

"Mahendra recently predicted copper would take a run to the upside, and it did, rising a sharp 5.10 cents today to $1.3210.He is settling into his new abode in Santa Barbara. If you are a gold and silver bull, you will like what he has to say. It goes something like this:

*Gold and silver are about to take off and go bonkers after September 4th. To be specific:

* "The most important thing is that Gold is going to rise after 4 September 2004 and there is no power on this earth that can forestall that rise."
*The train will leave the station next week.
*The gold and silver move will be like a once in a lifetime 50-year rain.
*It is unbelievable what is in store for gold and silver.
*For those heavily long it will be like the miner who has been digging and digging for years to make a discovery and he FINALLY does."

END

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

Comments: The above mentioned items are long overdue for our precious entities, so................WHY NOT? If not now, then.........sometime soon. Each of us who continue to stand as longtime gold and silver bulls have long since made the above predictions............we just never gave it a specific time frame like Mehendra has here.

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

More comments:

Little Jimmy is kaput as far as making timely predictions, his $480 was due TODAY. Cooked by his own defective temperament, like a small child demanding that the world revolve around him. Mr. Gold goes to Washington, or something like that. He started getting the "new" gold market about right towards the end once he eschewed the contrived paper. Any simple trail hiker could have clued him in long ago and spared the "Comets" their stacked deck losses. Isn't it such a marvel that the very same ego that makes one border on greatness also often makes one incredibly BLIND to what simpler minds perceive.

I guess we now need a new GENERAL.......??? LMAO, as if gold and silver can't rise to the top w/o cheerleading windbags behind them.

Sinclair is quite like the Shrub...........only "yessmen" are allowed to hang around and soak up the wisdom. Sinclair had his staff screen any incoming that had a negative connotation, constructive criticism included. His failures:

1. He bought and promoted the paper game at the expense of physical metals.

2. He's too tied into elitist entities to call a spade a spade.

3. His ego is too big for any mortal to successfully lug around for long.

4. He failed to do sufficient homework to understand the difference between the past gold "wars" and the current gold war. Ferdi Lipps could have taken him to school despite an age 'handicap'.

5. Way, way, way, way, way too bought into the "system". For the greatest part of his 'public' gold analysis time period--------- he played into the hands of the gold manipulators.

6. The guy is a SILVER zero, a now show, a hermAgrodite.

7. The guy doesn't have the cahones for honest debate, he just likes controlled monologue.

8. His criticisms of govt or markets or whatever always fell short of the deserving parties..........the cfr'ers and multiple alphabet soup groups.



That's enough for now, as you can tell I'm not much of a Sinclair fan in spite of the fact that I read a lot of his work and learned much from him. He took the wrong track and flamed out, leaving many high and dry. Frankly, he can't hold a candle to our old Trail Guido, who himself fell off the cliff on multiple occasions.

Requiem for a gold guru:

THE PIED PIPER OF PAPER GOLD, THE MAN WHO HELPED PROLONG CRIMEX INSTEAD OF TAKING IT DOWN

Go back to your home on the Tan Range, Jimmy, it needs you more than we do.


{Harsh words above, but I'll take my chances in open and honest debate any time regarding them. No apologies.}
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Periodic Ponzi Update PPU -- $hifty, 16:08:15 08/13/04 Fri

Early Ponzi due to Storm in FL. My not be able to to post for a few days!
Starting to storm now.
:-)

$


Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,757.22 + Dow 9,825.35 = 11,582.57 divide by 2 = 5,791.28 Ponzi

Down 4.83 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Oil -- Sharefin, 11:04:50 08/09/04 Mon

Is the world's oil running out fast?

If you think oil prices are high at $40 a barrel then wait till they are four times that much.

How will you pay to run your car? How will you get the children to school? How will you heat your house? How much will transported food go up in price?

How will we pay for plastics, metals, rubber, cheap flights, Simpson's DVDs, 3G phones and everlasting economic growth?

The basic answer is, we won't.

This is the message from the Association for the Study of Peak Oil (ASPO).

The group of oil executives, geologists, investment bankers, academics and others has been warning the world of high oil prices, and the ensuing fallout, for some years now.

The end of cheap oil
~~~
They are united by one idea, that global oil production is about to peak, which in turn will signal the permanent end of cheap oil.

And they warn that this is the foundation of the current rise in oil prices.

Who hurts when prices explode?

"Oil is far too cheap at the moment," says Mr Simmons.

"The figure I'd use is around $182 a barrel. We need to price oil realistically to control its demand. That is because global production is peaking."
~~~~
And Dr Campbell has a dire warning: "If the real figures were to come out there would be panic on the stock markets, in the end that would suit no one."
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Periodic Ponzi Update PPU -- $hifty, 17:50:58 08/08/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,776.89 + Dow 9,815.33 = 11,592.22 divide by 2 = 5,796.11 Ponzi

Down 217.42 from last week .

Well RossL, we may have to get the excavator ready to dig that (whine seller) for the Ponzi !

Thanks for the link !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Periodic Ponzi Update PPU -- $hifty, 19:58:51 08/01/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1887.36 + Dow 10,139.71 = 12,027.07 divide by 2 = 6,013.53 Ponzi

Up 107.88 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


[Edit]

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Fiat -- Sharefin, 19:16:21 08/01/04 Sun

U.S. Warns of Threat to Financial Icons

The federal government warned Sunday of possible terrorist attacks against "iconic" financial institutions in New York City, Washington and Newark, N.J., saying a confluence of chilling intelligence in recent days pointed to a car or truck bomb.

The government said the new intelligence indicated the meticulous planning of al-Qaida. Homeland Security Secretary Tom Ridge identified explosives as the likely mode of attack, as opposed to a chemical or biological attack or a radiological "dirty" bomb.

In an unprecedented action, the government named these specific buildings in densely populated areas as potential targets:

* The Citigroup Center building and the New York Stock Exchange in New York City.

* The International Monetary Fund and the World Bank buildings in Washington.

* Prudential financial in northern New Jersey.

"The preferred means of attack would be car or truck bombs," Homeland Security Secretary Tom Ridge said in a briefing with journalists. "That would be a primary means of attack," he said.
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Gold -- Sharefin, 19:14:36 08/01/04 Sun

Bush Secretly Permits The Queen To Steal US Gold

The United States General Accounting Office (GAO) has repeatedly demanded of the White House and Treasury Dept. that they stop stonewalling and explain the disappearance since September 2001 of major traunches of gold.

A large horde of U.S. government gold, 2854 metric tonnes, according to the GAO has disappeared. The GAO says that it cannot certify the audit of the U.S. Treasury without the White House and Treasury divulging the whereabouts of the super-precious metal.

Knowledgeable sources contend that this gold is actually owned jointly by the U.S. and France. And Bush connived with the British Monarchy to hide this stolen gold now valued at thirty billion dollars to support derivatives which have the equivalent power of thirty quadrillion dollars to support the failing Pound Sterling.

In plain language, the United States Treasury, minus the certified audit, is insolvent and fighting to prevent an impending default of U.S. Treasury Securities.

Knowledgeable sources regard this alone, not the Arabs, as the core reason for the 9-11 highest levels of homegrown violence, treason and deception.

Furthermore, Bush has ordered his Chief of Staff, Andrew H. Card Jr. to arrange the arrest or even liquidation of Web Reporters daring to divulge these "State Secrets."
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Gold -- Sharefin, 09:01:20 07/27/04 Tue

Newmont Pres Sees Gold At $380-$450 Over Next 12-18 Months

Such is the interest in the gold price forecasts of Pierre Lassonde that even as a no-show, delegates at the Diggers and Dealers mining forum were keen for a prediction from Newmont Mining Corp.'s president.

Thus, Hans Umlauff, group executive for operations and support at Newmont, responded to the first question put to him following his presentation by saying Lassonde expects gold to range between US$380 and US$450 a troy ounce over the next 12 to 18 months.
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Fiat -- Sharefin, 20:43:19 07/26/04 Mon

Monetary Policy without Money

Federal Reserve Chairman Alan Greenspan testified before committees of both the U.S Senate and House of Representatives earlier this week, presenting the Fed’s semiannual monetary policy report. The most interesting part of the testimony and the formal report is how little was said about the money supply.

Chairman Greenspan warned about the possible danger from future inflation and enumerated the factors that seem to be behind the recent increase in prices. But never once did he point to the actual culprit—the Fed’s own monetary policy.
~~~
There are several ways that Federal Reserve measures the money supply, but if we just take the method used in this report, M-2, Fed monetary policy for the last four years has not been merely “accommodative,” it has been at times explosive. From 2000 to the middle of 2004, M-2 increased by more than 30.5 percent. In 2001, M-2 rose by almost 9 percent; in 2002, by over 7.5 percent; and in 2003, by almost 7 percent. And for some months in the first half of 2004, the monthly increases in M-2 have been at annualized rates near or over 9 percent. In May alone, M-2 increased at a 13 percent annual rate.
~~~
Like Dorothy in The Wizard of Oz, we are told to ignore the man behind the curtain. As price inflation picks up, the Fed will continue to try to distract us from understanding that its own monetary policy is what has caused it. That is, the Fed will shift the blame for its own monetary misconduct to innocent victims in the private sector.
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Fiat vs Gold -- Sharefin, 20:35:50 07/26/04 Mon

If Mr. Greenspan Walked His Talk

"Although the gold standard could hardly be portrayed as having produced a period of price tranquility, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent overissuance of money."

In other words, it is quite possible to have a monetary standard over decades and even centuries, wars and political and technological upheavals notwithstanding. How can that be? In our "floating world," living with the utterly misunderstood idea of what anchoring monetary policy implies, let's take a step back and explain the simple mechanism behind such stability.

Say there are 1,000 good and services available or to be delivered in the future. If there were no monetary anchor, there would be 499,500 prices, as each good and service would be priced in relation to every other. However, if society chooses one commodity as a yardstick, there are 999 prices and that's it. This simple fact explains why every society since time immemorial agreed on such yardsticks, why cigarettes play this role in prisons - even prison-lands, such as countries under communism were. All that is needed is that the commodity society agrees upon is in relatively fixed supply. This happens to be the case of gold, and also of cigarettes, since prisoners have rights to fixed allocations per month.
~~~~
To summarize: the only things that were- and could be stable - during political tempests around the world, are monetary anchors (gold for the Western world, and silver for Mexico and China, when the latter was on the silver standard, actually using the Mexican silver dollar). They could be so when monetary policy was separated from politics, domestic or international, and served to anchor prices and long term contracts. Price indices cannot offer such guidance, and often can neither monetary rules, since demand for currencies fluctuates around the world, as does velocity. (Milton Friedman retracted his "monetary rule" view, as being too rigid, in an interview with Financial Times last summer). Now if only Mr. Greenspan would be forced to state that the Fed would stick to the "two decade average" and use changes in gold prices as signal to either absorb or add to the global US dollar liquidity, a measure of stability would be brought back to the world.
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Housing -- Sharefin, 05:48:54 07/26/04 Mon

The world is just a great big property price bubble

by Allister Heath
THE property bubble has gone global. From Beijing to Cape Town, from Madrid to Honolulu, house prices have risen to unsustainable heights, fuelled by low interest rates.

Like the equity bubble of the nineties, which started on Wall Street before contaminating other markets, the housing bubble of the noughties, which originated in London, Sydney and Chinese coastal cities, is now spreading around the world. And like the equity bubble before it, the correction, when it inevitably comes, will be painful and could threaten the worldwide economic recovery.

In a report to be published this week, Morgan Stanley, the US investment bank, examines property conditions in 23 of the world's largest economies, representing 94% of world gross domestic product (GDP) by purchasing power parity and 96% of the value of the developed world's housing stock.

The conclusion of its study is shocking. Confirming the findings of other international institutions, Morgan Stanley found that over two-thirds of the global economy is either already suffering from a residential property bubble or is at severe risk of doing so very soon.

Full-blown housing bubbles currently exist in at least 25% of the global economy, whereas another 40% is put in the "bubble watch" category.

Australia, the United Kingdom, China, South Korea, Spain, the Netherlands, and South Africa are all suffering from dramatically over-valued, bubble-conditions housing markets; the United States, Canada, France, Sweden, Italy, Hong Kong, Thailand, Russia, and Argentina are all close to the bubble-stage, though are not quite there yet. Of these latter economies, the US is probably nearest to being a full-blown bubble already; indeed, many analysts are convinced that prices in large parts of the country are ridiculously over-priced.

In all those countries, ultra-low interest rates introduced by central banks desperate to stave off deflation after the dot.com crash triggered an explosion in borrowing. Flush with cheap cash, consumers went on spending sprees, splashing out on goods and services. Rock-bottom interest rates also led to collapse in debt servicing and mortgage payments: in some cases, the cost of home ownership halved in a few months.

It suddenly made sense to buy houses. Families started to bid up prices, while a growing band of investors entered the market to enjoy capital gains that seemed no longer possible in the equity markets.

In retrospect, the emergence of a series of bubbles in asset prices since the late 1990s, most recently in housing, should have surprised nobody. Globalisation and intense price competition - in newly tradeable services as well as goods - has reduced corporate pricing power, triggering a significant structural change in the forces shaping inflation.

Thanks to the huge resources of Chinese factories and Indian call-centres, plenty of capacity remains in the global economy, allowing a rise in demand to be met by extra supply.

Consumer prices therefore now take longer to react to rock-bottom interest rates and to an injection of money and credit into the economy; instead, excess liquidity first shows up in asset markets such as equities, bonds, property or commodities, where prices are far more flexible.

"It's just like pushing on a water balloon - inflationary pressures migrate elsewhere in the system to the point of least resistance. In today's post-equity bubble world, that elsewhere is the property market. The equity bubble of the late 1990s was but the first example of this phenomenon," says Stephen Roach, chief economist of Morgan Stanley.

After the dot.com bubble imploded, excess liquidity flowed into bond and property markets, two other major asset markets. "Seen in this context, asset bubbles are a perfectly logical consequence of a more generalised monetarist model - one that sees the money supply driving some combination of prices in the real economy and prices in asset markets," Roach argues.

A similar argument is made by Tim Congdon, chief economist at London-based Lombard Street Research. Traditionally, inflation has been defined as "too much money chasing too few goods" but Congdon believes that this is too restrictive. He prefers instead to define inflation as "too little money chasing too few goods and assets".

In Europe, the three most over-valued property markets are those of the UK, Spain and the Netherlands. Some economists in the City of London believe that UK homes are over-valued by 45%; the average estimate appears to be between 15% and 25%. A collapse in the UK market is by no means guaranteed but the omens are not good. Prophets of doom, including Durlacher, Smithers & Co., Capital Economics and Dye Asset Management, are forecasting a serious crash and a decline in house prices in both real and nominal terms over the next few years. The optimists - if one can call them that - expect house prices to fall by a few per centage points at most before stagnating for most of the rest of this decade to allow wages to catch up with prices.

After that, supportive demographic trends, including a rise in the number of people living alone and increased immigration, together with a limited supply of new homes caused by restrictive planning laws, should lead to a return to healthy 5%-6% growth a year in house prices. A major risk remains for the long-term health of housing as an investment in Britain, however: there are growing indications that the Treasury will put up taxes on housing after next year's general election, perhaps by hiking stamp duty and tightening the link between property prices and council tax.

Spanish property owners have also benefited immensely in recent years, with the euro zone's inappropriately low one-size-fits-all interest rates giving the market a massive boost. House prices have surged by more than 120% since December, one of the sharpest increases in the developed world.

The most outrageous prices are to be found in Spain's coastal regions and in small islands, which have benefited most from overseas purchases. Investment in Spanish property from abroad surged from 0.3% of GDP in 1997 to 1% in 2003; foreign demand will probably prevent the Spanish market from crashing too badly when the bubble finally bursts.

The great fear is that the UK, Spanish and Dutch property bubbles go the way of Australia's - the first of the over-priced housing markets to see its bubble go "pop". After surging by 15% last year, Australian house prices started to crash in the first few months of this year as interest rates rose and changes made in the tax code to discourage buy-to-let speculators began to bite. Values are down by between 10% and 15% already in the big Australian cities; economists expect further declines. House prices are currently trading at a ludicrous 58 times yearly rental yields, against a long-term average of 31 times and an equity market prices to earnings ratio of 16.5 times. Housing affordability indices are at their worst level since 1991 when mortgage rates were 13-15%, compared with 6-7% now, which suggests that prices will fall further when interest rates rise again.

Home owners in Europe who may be tempted to dismiss Australia's experience will find little reassurance from the US, despite headline figures which suggests that American house prices rose 7.7% in the year to the first quarter of 2004.

There is no real national housing market in the US, so localised bubbles co-exist with very weak property markets. Up to 15 metropolitan areas could suffer a price crash of 10-15% as interest rates go up, warns Dick Berner of Morgan Stanley - largely in regions which have seen values close to double in the past five years, confirming that prices can go down as well as down.

During the first quarter of 2004, prices dropped in Vermont, Alaska, North Dakota, South Dakota, Iowa, and Nebraska, a stark deterioration from the final quarter of last year, when no states reported declining home prices. Prices dropped in 39 of the 220 Metropolitan Statistical Areas, compared with only three in the fourth quarter of last year. By contrast, prices surged by 12.2% on average across California, Oregon, Washington, Hawaii and Alaska, fuelling fears of looming crash. In New York, prices continue to move ahead.

Other European countries are seeing strong price gains, even if not yet at bubble levels. French property prices rose by a record 14.2% in 2003, after a 9.2% rise in 2002 and a 6.5% uplift in 2001. Prices increased by 13.9% in the first quarter of 2004, year on year. The availability of mortgages for French buyers, and their interest in buying a property for investment, have increased dramatically in recent years. The buoyant housing market is likely to continue to support French households' throughout this year, as last week's buoyant consumer spending data confirmed. In real terms, however, French property prices remain below their 1991 peak, according to Morgan Stanley. There are also signs of overheating on the supply side which, if not corrected, could help inflate a price bubble in the next two years.

House prices have also grown strongly in Italy, even though some statistical sources paint slightly different pictures of the market. The ISI Residential Index peaked in February-March, growing 22% in the year, and since then growth slowed moderately to around 16%. Some economists suggest a sharper slowdown though all agree that Rome and Milan are still seeing double digit-gains. Mortgage lending peaked in February 2003 when it hit a growth rate of 28% and is now closer to 18%. The break-neck boom in mortgages from 2002 reflected an earlier deregulation of lending. Today's growth is due to low interest rates caused by Italy's membership of the euro zone, which has allowed it to piggy-back on countries with lower government debt and more political stability.

While there are plenty of problems in the world's mature economies, emerging markets are beginning to worry analysts almost as much, with China under especially close scrutiny. Prices are up by only 20% since 1998 nationally, although by much more in Shanghai and Beijing, which account for 14% of the total market. "China's domestic monetary tightening has occurred in the face of the coming normalisation of Fed policy. This is a potentially lethal combination for China that could have a major impact on the capital inflows that have driven the Chinese property cycle so sharply to the upside. It looks to me as if the China property cycle is on the verge of a major bust," warns Andy Xie, China economist at Morgan Stanley.

The situation is a little better in South Korea, even though there too houses are over-valued. There, the local bubble began in mid-2001 when prices started to surge, taking the increase for the year to 10%, followed by another 16% in 2002 and 6% last year. Today, nationwide South Korean house prices are 40% higher than their trough in 1998; in Seoul, prices are up by more than 60%. With the central bank's official overnight interest rates stuck at 3.75% since July 2003 and inflation of 3.6%, real interest rates are at close to zero, which has kept the market going despite a government crack-down on speculation and a depressed economy. But plans to boost South Korea's housing supply, together with higher interest rates, could yet prick the bubble.

South Africa remains a candidate for the title of the world's most over-heated property market. Prices there have been boosted by a combination of increased buying by foreign investors (particularly in the Western Cape region) and by a cumulative cut of 5.5 percentage points in the Reserve Bank's repo rate over the June to December 2003 period. In the first five months of 2004, South African house prices surged by 24% year on year, even faster than the 19.2% growth in 2003 and 15.3% in 2002.

But prices in Hong Kong have grown even faster during the past year. Since their mid-2003 trough, broad residential prices are up 32%, with prices in "popular developments" (that is large residential estates with the highest turnover) jumping 43%. Yet compared to the 1997 peak, housing prices are still down by 55%, which suggests that property values in Hong Kong are still fairly valued, unlike those in South Africa.

In Thailand, a combination of expansionary policies by Prime Minister Thaksin Shinawatra, increased demand from a wealthier population and faster economic growth across the region has triggered a 30% to 40% recovery in house prices since 1991. A bubble has undoubtedly erupted in the up-market section of Thailand's housing market, with the burgeoning Thai middle classes currently being offered the choice of around 50 new condominium developments in Bangkok alone. However, the lower- and middle-income segments of the Thai housing market seem still to be well supported by sound structural reasons, with strong demand relative to supply.

Unsurprisingly, there are no proper official statistics on Russian house prices. The Institute for the Economy in Transition does produce data for Moscow, however, and the picture of the housing market it paints is one of a runaway and unsustainable boom in 2003, following a strong but less buoyant 2002. Last year the average price of Moscow apartments in dollar terms was 45.4% higher than it was in December 2002, an astonishing rate of growth. After adjusting for inflation, the price of apartments surged by nearly 19% in rouble terms last year.

Many crucial laws have been adopted in the past couple of years, underpinning property prices, says Diana Choyleva, an economist at Lombard Street Research. "These have unleashed the strong pent-up demand for credit, especially for mortgage and consumer loans. Such basic laws as the right to own property and land, the right to sell it, and the right to pledge it as security for a mortgage did not exist until recently," she says. While the property market is expected to cool in the second half of this year, the average price of a Moscow apartment has already surged from slightly under $950 at the end of 2001 to $1,600 by end-2003.

Anybody who believes that housing is always a safe haven, regardless of time or place, ought to take a closer look at Germany, Singapore, India or Japan. German house prices have been falling for a decade and are likely to continue to do so as the population shrinks over the next few years. In Singapore, property prices are still down some 40-50% from their peak in 1996. Since rebounding moderately in 2000, prices have declined a further 15-20%.

In Japan, housing and land prices are now down a devastating 43.2% compared with their 1991 peak, taking the current level back to pre-bubble levels. Fortunately, there are now signs that the market is bottoming out, with surveys revealing that 40% of land prices in Tokyo are either on the rise or flat.

The Indian property market has also fared poorly in recent years, despite faster economic growth. Prices slumped by 30% between 1995 and 2000 and are now growing by only 3% to 4% a year - little consolation for those who have lost their shirts in the downturn.

Around the world, high property prices have boosted the wealth of homeowners; a crash will hit consumer spending badly, especially in the UK, US and Australia.

"Courtesy of property-induced wealth effects, the global economy was neatly able to sidestep the potentially devastating aftershocks of the burst equity bubble," says Morgan Stanley's Roach. The house price bubble kept the global economy afloat when shares slumped; but as interest rates continue to rise and the global property bubble finally bursts, there will be no secret weapon for the global economy to turn to this time.
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Periodic Ponzi Update PPU -- $hifty, 19:24:52 07/25/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,849.09 + Dow = 9,962.22 = 11,811.31 divide by 2 = 5,905.655 Ponzi

Down 105.81 from last week.

Down six weeks in a row.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Gold -- Sharefin, 18:40:15 07/23/04 Fri

How much does that gold ring cost?

Ibu Masna, mother of four children, traveled to Jakarta from her village on the Indonesian island of Sulawesi on July 21 to report the abuses of the world's most profitable gold miner on her community to the National Police and Ministry of Health.

Masna and other members of her community told officials that the company is guilty of spreading Minamata Disease.

Newmont, from Denver, Colorado, U.S., have been dumping their heavy metal-laden waste into Buyat Bay since 1996. Buyat Bay, once full of fish, had provided income and food for the Buyat Bay people who live along its shores. Today, the fish are all but gone from the inner parts of the bay and there are tumors in the people and fish never seen before the dumping. Newmont stands accused of polluting the bay with arsenic, mercury, among other heavy metals.

Local doctor Jane Pangemanan confirmed that about 80 percent of the Buyat Bay villagers suffer symptoms similar to the victims of Minamata. Laboratory tests have confirmed high levels of heavy metals in the blood of Buyat Bay villagers, particularly arsenic and mercury.

Newmont has continuously denied these accusations stating that the company has operated in compliance with Indonesian and U.S. environmental standards. However, mercury emissions, mainly from coal-fired plants and the chemical industry in the U.S., have led to advisory guidelines on tuna consumption because of mercury contamination. Meanwhile, the Bush administration has fought against more stringent regulations on mercury. Countries like Indonesia have even lower environmental standards and are perhaps more vulnerable to pressure from business interests.

Gold has and continues to be extracted, processed and used in ways that are killing marginalized peoples and the planet.

Most of the gold produced today goes towards making jewelry. One single 0.33 ounce, 18 karat gold ring produces at least 18 tons of mine waste. The gold mining industry is a voracious industry satisfying a non-essential market based on vanity. Meanwhile, Buyat and Cajarmarca people want clean water and good health for themselves and their children. But gold mining that uses toxic mercury, cyanide and other heavy metals is robbing them of these fundamental human rights.
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Gold -- Sharefin, 20:44:37 07/19/04 Mon

Gold to hold above $400 this year and next

Gold prices are seen holding an average above $400 an ounce for the foreseeable future as the dollar stays weak and world security worries keep big investors hedging their bets on where money is safe, a Reuters poll shows.

The global survey of 24 analysts pointed to an average gold price of $404.50 a troy ounce in 2004, up 11.2 percent on 2003. Gains were then seen being pared to an average for 2005 of $402.50, up 10.6 percent on the 2003 level of $363.83.
~~~
Gold's broad uptrend started in 2001, when the metal was near 20-year lows.

The advance gathered momentum as dollar weakness, global security worries and producer buy-backs of reserves in the ground that they had sold on forward markets pushed world prices to a 15-year peak in early January 2004 of $430.50.

Producer buy-backs have since slowed, but the market should remain firm as the spotlight concentrates on the dollar, where weakness makes gold less expensive for holders of other currencies.

"We are dollar bears, despite the fact that the second quarter of 2004 saw the dollar improve...We remain bullish on the gold price -- tempered to be sure," economist Martin Murenbeeld said.

"Issues such as debt -- government and household -- factor into our longer-term thinking and are gold-positive, while terrorism and its potential impact on oil prices are on average also gold-positive," he added.
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Periodic Ponzi Update PPU -- $hifty, 20:02:40 07/18/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,883.15 + Dow 10,139.78 = 12,022.93 divide by 2 = 6,011.465 Ponzi

Down 68.305 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty


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Fiat vs Gold -- Sharefin, 21:58:22 07/15/04 Thu

Mega Bank Merger Won't Impact Japan's Gold Buying

Gold's safe-haven appeal may become a little tarnished among Japanese investors if a proposed merger between two banking giants brings about some needed stability to the nation's financial sector.

Still, many industry insiders believe Japanese investors won't be giving up their gold any time soon as bullion still offers other appealing qualities.

Wednesday, UFJ Holdings Inc. (8307.TO) proposed a merger with rival Mitsubishi Tokyo Financial Group Inc. (8306.TO) in a deal that would create the world's largest lender.
~~~
However, Toshima isn't expecting a rush to sell gold as he sees the banking problem as just one part of a broader economic landscape that has driven Japanese investors to embrace the yellow metal.

"There are still two distinct uncertainties hanging over the minds of Japanese investors, namely a possible collapse of the pension system and an unprecedented level of public debt, which now stands at around 700 trillion yen," said the council's Toshima.

A dealer of precious metals futures with one of Japan's largest commodities houses said he has yet to see a shifting of funds out of gold futures.

"There is no firm correlation between commodity markets and stock markets in Japan as there is in other countries. They are just not seen as alternative investment instruments to Japanese investors," he said.
~~~
The World Gold Council's Toshima expects gold will remain an important fixture in the portfolios of many Japanese investors.

"Our latest research shows that the No.1 reason cited for buying gold, at 56%, is the fact that 'gold does not become a worthless piece of paper', which confirms that investors here still regard gold as a good risk management tool," he said.

Toshima added signs that the Japanese economy is working free from its prolonged deflationary spiral is another reason to hold onto gold.

"In our survey, 'inflation hedge' was sighted as the third most common reason for buying gold," he said.
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Fiat -- Sharefin, 21:43:28 07/12/04 Mon

Central Bank report - Borrowers must heed warning bells

UNDERLYING yesterday’s relatively upbeat annual report from the Central Bank was an ominous and timely warning that Irish people are up to their necks in debt.

With the purr of the Celtic Tiger growing louder by the minute, there is no sign of this pattern abating.

If anything, the seemingly unstoppable escalation of private credit means Ireland’s borrowers are four times more in debt than their EU counterparts.

Underlining the worrying aspect of this rise in credit Central Bank governor John Hurley has warned that within a few years Ireland will be one of most debt-ridden countries in the eurozone.

Admittedly, a tendency to ring the alarm bell is part and parcel of the bank’s mission in society. But it would be foolhardy of borrowers to turn a deaf ear to this latest warning.

Given the live-now pay-later mentality of modern society, home-buyers risk being seduced into getting way over their heads in debt by the attractive deals on offer from financial institutions. In their frenzy to get on the property ladder, people are borrowing at the rate of €1 billion a month.
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Fiat -- Sharefin, 21:09:15 07/12/04 Mon

Is A Housing Bubble About To Burst?

After an amazing four-year boom in residential real estate, the housing market could finally be topping out and heading for a downturn. The culprit: rising interest rates. House prices could flatten on a national level in the next year or so while taking a spill in overheated coastal markets. A downturn in housing would squeeze recent buyers who overleveraged themselves to pay top prices -- and risk slowing the entire economy by cooling consumer spending as well as housing construction, lending, and the real estate business.
~~~
The most troublesome aspect of the price runup is that many recent buyers are squeezing into houses that they can barely afford by taking advantage of the lower rates available from adjustable-rate mortgages. That leaves them fully exposed to rising rates. In fact, the rise in one-year adjustable rates since late March has already raised annual borrowing costs for new buyers by 25%. And data from the Federal Housing Finance Board show that the most expensive markets tend to have the highest share of buyers with adjustable-rate mortgages.

Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken. Caveat emptor.
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Periodic Ponzi Update PPU -- $hifty, 22:42:13 07/11/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 1,946.33 + Dow 10,213.22 = 12,159.55 divide by 2 = 6,079.77 Ponzi

Down 64.97 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho Silver !

$hifty


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Fiat -- Sharefin, 21:24:50 07/10/04 Sat

Nervous Depositors Make Run on Banks

Rumor fueled fear and fear fueled panic, sparking the biggest run on Russian banks since the 1998 crisis.

Spooked by the closure Tuesday of mid-sized Guta and reports that top-tier Alfa was on the ropes, depositors descended on banks in droves Wednesday, intensifying a trend that has seen an estimated $5 billion, or about 10 percent of all household savings, taken out of the system in the last two months.
~~~
After three bank closures in as many months -- each bigger than the last -- intervention and reassurance by the Central Bank was not enough to calm growing concerns that a full-fledged crisis was in the making.
~~~
Ignatyev also refuted persistent media reports that the government has a so-called blacklist of banks that are targeted for closure. The reports, denied repeatedly by senior government officials, first surfaced after the Central Bank revoked the license of second-tier bank Sodbiznesbank in May. CreditTrust, a bank that reportedly has the same beneficial owners as Sodbiznes, collapsed in June.

Reports of the blacklist and the actual failure of several banks has created a "crisis of mistrust," as bankers are calling it, that has led to banks closing credit lines to each other, further squeezing liquidity out of the sector.

To jump-start the system, the Central Bank on Wednesday -- for the second time in a month -- slashed mandatory reserve requirements, to 3.5 percent from 7 percent. The bank cut the rate from 9 percent to 7 percent June 15.

Some analysts doubted the move would be enough to calm the market.

Although halving the reserve requirement injected some 125 billion rubles ($4.3 billion) into the system, it is unlikely to help banks facing a run on deposits, said Mikhail Matovnikov of Moody's Interfax Rating Agency.
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Most experts polled shared Gafin's optimism regarding Alfa's ability to weather the storm, although the general hysteria may drag down smaller banks.

"A lot of smaller banks will experience a lot of problems," said Andrew Keeley of Renaissance Capital.

Gafin said as many as 200 of what he estimated were 1,670 banks could collapse in the coming months. "It is not bad for large banks... but for the banking system it is very harmful," he said. "People are only beginning to learn how to use banks, so with every crisis, trust in the financial system is undermined."

Matovnikov agreed that smaller banks are in danger, but he said a full-fledged crisis was unlikely, even though the "depositors' run" is likely to last for several more days.

The main concern now is exactly what the Central Bank, as the market regulator, wants to see happen and how it will act, said Hans Jorg Rudloff, deputy chairman of British investment banking giant Barclays Capital.

Rudloff, a major player in Russia's early privatization drive, said a banking crisis would "be more worrying than the Yukos crisis."

"The banking crisis is like a little bushfire that could become a huge forest fire. If people lose confidence and pull out their savings, the Russian banking system could collapse," he said, rapping the Central Bank for not managing the crisis better. "That's why Western systems have crisis management systems in place."
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Gold -- Sharefin, 16:59:13 07/09/04 Fri

UK's Brown urges IMF to revalue gold for debt relief

UK Chancellor of the Exchequer (finance minister) Gordon Brown on Friday called on the International Monetary Fund to revalue its gold reserves as a way of releasing more money for debt relief for the world's poorest countries.
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Most of the IMF's gold is valued at $40 an ounce under a 1971 agreement, though some was revalued at market prices in the late 1990s to finance the Highly-Indebted Poor Countries (HIPC) debt relief initiative.

That delivered more than $2.5 billion of debt relief through off-market gold transactions.

Treasury officials said the proposal was to adjust the paper value of the IMF's gold to current market prices of around $400 an ounce to generate more funds for debt relief.

Britain was not suggesting that the IMF sell its gold -- something which could push the market price down and hit poor countries that depend on gold exports.
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Fascism & the Power of Ridicule -- auspec, 16:37:39 07/09/04 Fri

01-July-04 An EWR Reprint, JULY 2004 Early Warning Report, PDF version


Most Serious Warning Ever
In politics, one of the few things you can be certain about is, those who take away your liberty are not doing it to benefit you.
I warn often about the government using the war as a pretext to tear up the Bill of Rights. Wars are always, among other things, the power junkie's excuse to become the tyranny he professes to be fighting.
A secret Department of Justice (DOJ) report recently leaked to the press gives the government's view on its legal duties in this war. It turns out, unsurprisingly, that the US government is superior to the rest of mankind, it's not required to obey any laws. When officials declare a national security emergency, the DOJ report claims, the US government is no longer bound by the Geneva Conventions, which it agreed to, or the Nuremberg decision, which it led and endorsed.
Further, asserts this report, US troops who do as they are told when directed to commit a war crime are protected by the Nazi defense of "just following orders."
I am not joking, this is as deadly serious as it gets. Ask a librarian for "What On Earth Were They Thinking?" THE ECONOMIST 19 June 04, p.31. Also, the article by Jess Bravin, WALL STREET JOURNAL, 7 June 04, p.1.
Officials have successfully spun this DOJ report as a minor facet of the torture scandal, but it is far more. The report claims that in war, the president can do anything he pleases, he "enjoys complete discretion in the exercise of his commander-in-chief role."
Never before has the US government claimed so much power.1
What keeps this from being just another political laugh is, the report was not written by politicians, it's the work of career attorneys from every branch of the armed forces - Army, Navy, Air Force, Marines and Coast Guard - in consultation with attorneys in the Justice Department. This means the fascism revealed in the report is not a flash-in-the-pan political whim, it is systemic, entrenched in the bureaucracy.
Benjamin Franklin was right, those who give up liberty to achieve safety will have neither. If the Geneva Conventions and Nuremberg decision are out the window, can the Constitution and Bill of Rights be far behind?
How long until they bring out the leg irons and barbed wire?
As Ronald Reagan so often warned, "government is not the solution, it's the problem." That goes for war and foreign policy as well as the economy.
Please also read IT CAN'T HAPPEN HERE by Sinclair Lewis. Although the novel's economics is too far left for my taste, and it uses the depression rather than a war as the "national emergency" that brings fascism to America, its insights about the way Americans have been trained to think, or not think, are as timely today as when Lewis wrote it in 1936.
As you read the fascist "Fifteen Points of Victory" in Chapter 8, ask yourself how many Americans would vote for these today. A majority, I think.
When a government has most of the guns, which Washington does, the only way to protect ourselves is to make officials unwilling - ashamed - to use them. This requires free speech and a free press, but these freedoms must be used early, before they can be taken away. "What good fortune for governments that the people do not think."
-- Adolph Hitler


Nearly everyone in history who has seen his country slide into oppression tells essentially the same story about how he ended up in chains. He saw the warning signs, but did not speak out when he could, and then it was too late.
Clearly, the warning signs are here. Each of us has three choices. We can (1) sit trembling with our loved ones, waiting for the jackboots on our doorsteps, (2) get out of the country or (3) make like Paul Revere and sound the alarm.
If you care about America, this could be your last chance to save it. I hope you will do all you can to persuade your fellow citizens to pull their heads out of the sand.
Deluge newspapers with letters to the editor.
Call radio talk shows.
Post your thoughts on the Internet.
Give speeches.
Tell your friends.
The message all Americans must receive is, anyone who lays so much as one finger on the Bill of Rights is a traitor, cut from the same cloth as Osama bin Laden. These people deserve all the scorn we can heap upon them. They must be shunned and laughed at for their so-called patriotism.
Power seekers are hyper-prestige seekers, the one thing they cannot stand is ridicule. (Who can?)
We have proof this can work. In the Great Depression, America was plunging into fascism, but thanks to Lewis, Mencken and others, and their heavy use of ridicule in works such as IT CAN'T HAPPEN HERE, catastrophe was averted. We can do it again.
If you'd like to use this article to help spread the word, you have my permission to make as many copies as you wish, by any means, and distribute them as widely as possible by any means. (It must be copied in full, word-for-word, with no changes, and contain the notice Copyright © 2004 by Richard J. Maybury.)
This article is also posted on our web site, earlywarningreport.com so you can distribute it electronically.
For links to pro-liberty web sites, I suggest free-market.net, it's excellent.
If you do not do anything else, please, at least warn those you care about.


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1 "What on earth were they thinking?" Economist, 19 Jun 04.
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Gold -- Sharefin, 19:43:09 07/08/04 Thu

Pegging the dollar or peglegging gold

Over the past year a renewed interest in gold as a store of value and as a hedge against financial instability has changed the character of the gold market. No longer driven by the