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Gold -- Sharefin, 00:01:21 02/07/05 Mon

Gold is back - 25 years after it peaked

About 20 years ago the US dollar suffered a massive fall, which swept away Lm88 million of Malta's reserves. The very next day Malta's reserves were re-organised to mask this tragedy.

Government carried out a perfectly legal operation, which revalued Malta's gold reserves according to the market price prevalent at the time.

A few years before that date, that is almost 25 years ago, gold had hit its all-time high of $850 an ounce, and people were storming the jewellery shops at Hatton Garden trying to realise family heirlooms in hard currency.

Malta's gold revaluation story, which is widely known by all those who care for the money of their country, is yet another illustration of how gold can come to the rescue of investors to save them from difficulty, and sometimes from disaster.

Malta had to keep gold as part of its international reserves as a requirement of the International Monetary Fund. This proved to be a great godsend in the mid-Eighties. Malta's investment in gold was the most lucrative investment the Central Bank was made to perform by the IMF and the one which proved to be the most useful in a highly embarrassing situation. Malta bought gold at $32 an ounce in the Sixties and revalued it in the mid-Eighties at a multiple of that price.

Does Malta's dramatic Central Bank experience with gold carry any significance for the small Maltese investor? It certainly does. It is an experience which can easily be translated into the organisation of any portfolio, however small it may be.

An investor would be foolhardy not to include one or two per cent of precious metals into his portfolio. Such a percentage, however, fluctuates with the character of one's particular situation, and it is a matter which every investor must discuss with his stockbroker.

What is being pointed out in this instance is that gold has always been regarded as the best safeguard against disaster, and Malta is a country over which the scythe of the angel of death has hovered more than once, whether through wars or close encounters with natural disasters.

Why gold is back
The big reason why gold is back after 25 years is not because people are afraid that what happened in the Indian Ocean could very well happen under their very houses.

The reason is back is because American President George W. Bush is carrying out a war in Iraq and he could very possibly carry out another in Iran. There is also the American twin deficit, the sinking dollar could put the world into a skid, as David Smith of the London Sunday Times said in a recent article. He was talking straight from the Davos Meeting of Microsoft where Bill Gates and Warren Buffett, the greatest investors in America, made strong statements against the dollar's decline.

Gates called the dollar decline "scary" while Buffett said he would be betting against the dollar. The dollar and gold have over recent years acted like the opposite ends of a see-saw.

Gold -- Sharefin, 23:59:45 02/06/05 Sun

IMF looks at gold sale options for debt relief

The International Monetary Fund is preparing a report on the potential sale of a portion of its gold reserves in a move that would help fund debt relief for poor countries but could unsettle the markets by threatening a drop in the price of gold.

Finance ministers from the Group of Seven countries, meeting in London at the weekend, asked Rodrigo Rato, IMF managing director, to make proposals to the fund's shareholders at its April meeting.

The IMF values its store of 3,217 tonnes of gold at about $8.5bn (€6.6bn) about a fifth of market value. Poor countries owe about $11bn to the IMF. If the IMF sold large quantities of gold, it could finance the debts owed to it by poor countries. An alternative option to be studied would be to revalue the gold in the IMF's accounts. This would strengthen its balance sheet, against which it could then write off lending to poor countries. But this is seen as an accounting gimmick that would do nothing to free up real resources within the fund. Gordon Brown, UK chancellor, who has long supported making better use of the IMF's gold, said the agreed move was an important step towards debt relief for poor countries, following a G7 meeting that focused on development aid and on Africa.

Periodic Ponzi Update PPU -- $hifty, 21:07:54 02/06/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,086.66 + Dow 10,716.13 = 12,802.79 divide by 2 = 6,401.39 Ponzi

Up 169.88 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Gold -- Sharefin, 19:11:22 02/03/05 Thu

China issues gold newspaper

China has published the world's first gold newspaper, Xinhua news agency reported.
The most expensive edition uses 500 grams of gold and costs 69,000 yuan ($8,100), while another uses 200 grams and costs 29,000 yuan ($3,500).

The paper has been published by the China Economic Daily to celebrate the achievements of the last 10 sessions of China's top legislative body.

The paper, a one-off, is called 'China's Flourishing Period'.

Gold -- Sharefin, 03:48:52 01/31/05 Mon

Embry: $800-$1000 gold is conservative

Sprott Asset Management Chief Investment Strategist John Embry is adamant that gold will hit at least $800 per ounce as "paper money is going to hell in a handcart."

In a presentation to the Mining Exploration Roundup in Vancouver, Embry said he believes even a $1,000/oz gold price may be conservative. Meanwhile, he reasserted his steadfast contention that the gold price continues to be manipulated.
~~~
Embry said that a bullion deal in New York recently told him that they cannot keep up with physical demand in Switzerland "and all the world's gold refineries are running full out trying to keep up with overall demand. This is very important because physical off take is the key to breaking the stranglehold that the Comex paper traders have maintained on the gold price to date. Their recent machinations are providing physical buyers with cheap gold and they can't believe their good fortune."

"The only things you have to know to believe in gold at this juncture is that paper money is going to hell in a handcart, thus fuelling investment demand for gold, there is already an enormous gap between gold demand and mine supply that has been filled by central bank gold, and the central banks soon will not be able to fill that role. That equation adds up to dramatically higher gold prices," Embry declared.

Periodic Ponzi Update PPU -- $hifty, 20:40:21 01/30/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,035.83 + Dow 10,427.2 = 12,463.03 divide by 2 = 6,231.51 Ponzi

Up 17.88 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi HO SILVER !

$hifty

Fiat -- Sharefin, 20:42:22 01/29/05 Sat

Microsoft's Gates, World's Richest Man, Bets Against the Dollar

Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar.

``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview in front of an audience of about 200 at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.''

Gates's comments reflect the same view as his friend Warren Buffett, the billionaire investor who has bet against the currency since 2002. Buffett said last week that the country's trade gap will probably further weaken the dollar, which fell 21 percent against a basket of six major currencies between January 2002 and the end of last year.

``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.''

Gold -- Sharefin, 20:41:18 01/29/05 Sat

High prices fail to dent gold demand in India

Indian consumers seem to have resigned
themselves to high gold prices and are no longer
postponing buying jewelry in the hope of prices falling
in the future.

"People have generally realized prices are not coming
down to where they were a year ago. So they are buying jewelry, largely ignoring the rising trend in world gold
prices," said Bhuwan Gaurav, head of north India
operations at Tanishq, the country's largest branded
jewelry retailer.
~~~
India is the world's largest importer and consumer of
gold, with annual consumption around 800 metric tons.

Around 99 percent of India's gold consumption is in
the form of jewelry, making it the second largest
jewelry market after the U.S.

Indian demand for gold jewelry usually peaks in the
November-December period, when the country
celebrates a number of Hindu festivals such as Diwali
and Durga Puja. This time of the year is also
considered auspicious for weddings, in which gold is
seen as an indispensable part.

"In the 2004 wedding season, Tanishq sold 40 percent
more jewelry than we sold in the 2003 season. This
shows people are not cutting back on their jewelry
purchases at all," said Gaurav.

Gold -- Sharefin, 20:38:49 01/29/05 Sat

Secret £1.55bn gold pile backs new trading funds

ONE of the largest hoards of gold ever gathered outside a central bank has been accumulated at a secret address in London over the past few months.

Gold bars with a value of £1.55 billion are understood to have been collected in a single vault in an anonymous building owned by HSBC. If melted into a single block, the 212 tonnes of solid gold would take up 11 cubic metres — roughly the size of a Transit Van.
~~~
Ironically, the reason for the accumulation of this hoard is the popularity of a new gold investment product that does away with the expense, risk and hassle of taking delivery of the metal.

People and institutions in Britain, the US and Australia have been queueing to buy gold-backed, exchange-traded funds (ETF) — listed shares tradeable on the stock exchange but backed by actual gold.

Gold Bullion Securities (GBS), the British and Australian ETF that listed in London in December 2003, has 60 tonnes of gold in the vault — a 30 per cent increase in the past four months. StreetTRACKS, its sister ETF in the US, which was launched in November, is now backed by 152 tonnes of gold deposited in the same vault.
~~~
Most of the demand has come from institutional investors. Strong publicity for the streetTRACKS product in the US has boosted demand, as has the slide in the gold price during the past few weeks, which some investors see as a buying opportunity.

The gold stockpile in London is said to be secure. But it is not clear what would happen in the unlikely event that the hoard was stolen.

GBS does not insure the gold and said it is HSBC’s responsibility to keep it safe. Investors might have to rely on a claim against the bank in the unlikely event of a robbery, GBS said.

HSBC is under no obligation to insure the gold. But the bank said it would be responsible for any gold lost through its negligence, fraud or wilful deceit.

Gold -- Sharefin, 20:36:06 01/29/05 Sat

Barclays' gold-backed security to launch on Friday

A new U.S. gold exchange-traded fund, iShares COMEX Gold Trust, will make its long awaited debut on the American Stock Exchange (Amex) on Friday under the ticker symbol IAU, Barclays Global Investors said on Thursday.
~~
When it lists, the ETF will be the second U.S. gold security that can be traded like any stock on an exchange. The first one in the United States, StreetTRACKS Gold Trust (GLD.N: Quote, Profile, Research) , which is backed by bullion, made a smash debut on the New York Stock Exchange in November and has amassed more than $2 billion in value.

Gold ETFs are designed to reflect the price of the precious metal, and have been aimed at drawing the investment capital that helped lift bullion to a 16-year high above $456 an ounce late last year.

Similar funds have launched in Australia, South Africa and Britain but have not matched the value of the first such U.S. offering.

Gold -- Sharefin, 20:32:23 01/29/05 Sat

Medium/Long-term gold outlook positive

The chief economist for Dundee Securities
suggests that a new central bank agreement, heavy reliance on the
U.S. dollar by Asian central bank portfolios and dehedging should
all continue to be positive for gold.
In a presentation Wednesday to the Mineral Exploration Roundup in
Vancouver, Economist Martin Murenbeeld predicted that the medium-
term outlook for gold is positive because of macroeconomic and
supply/demand factors, such as further decline of the dollar, and
higher debt levels that will pressure monetary policy to remain
relaxed in the medium to long term.
Dundee's base scenario suggests an average gold price of $461 per
ounce this year. The company's more bullish scenario puts a 35%
probability on a $506 average.

Gold -- Sharefin, 20:31:23 01/29/05 Sat

Germany backs British idea to use IMF gold for debt relief in poor countries

DAVOS, Switzerland -- Germany backed Britain's proposal
on Friday for the International Monetary Fund to write off
debts of poor countries by selling or revaluing part of its
gold reserves.

The idea has been floated by British finance minister
Gordon Brown, who repeated it on Friday at the World
Economic Forum in the Swiss ski resort of Davos.

Germany's finance deputy, Caio Koch-Weser, agreed that
gold sales would be one way to fund debt relief and said
the international community should now tackle the idea.
"I believe we should discuss (IMF) gold sales as we did
in the 1990s," Koch-Weser, who is secretary of state for
finance, told Reuters.

The idea is expected to be discussed next week at the
Group of Seven finance ministers' meeting, where
Germany is backing a three-tiered timetable on
development aid proposals launched by Britain.

Fiat -- Sharefin, 20:30:31 01/29/05 Sat

China's gold output reaches record high

The Chinese mainland's gold output reached a record high of 212.35 tons last year, according to an industry organization.

The figure was up 11.75 tons, or 5.86 per cent year-on-year, said the China Gold Association.
~~~
China National Gold Group Corp, the nation's biggest gold firm and the parent of Shanghai-listed Zhongjin Gold Co Ltd, said that it produced 42 tons of the precious metal last year, a year-on-year increase of 25 per cent.

"China's gold industry has good opportunities to develop rapidly based on the domestic huge market with a population of 1.3 billion," Wang said.

The nation now ranks fourth in the world in terms of both gold output and demand.
~~~
The World Gold Council predicted last year that annual gold demand in the mainland is expected to grow to 600 tons in the coming years from 207.6 tons in 2003, boosted by the ongoing deregulation of China's gold market.

Fiat -- Sharefin, 08:51:40 01/27/05 Thu

Chinese analyst: Dollar 'no longer stable'

DAVOS, Switzerland - China has lost faith in the stability of the U.S. dollar, and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a top Chinese economist said Wednesday at the World Economic Forum.

At a standing-room-only session on the world's fastest-growing economy, Fan Gang said the issue for China isn't whether to devalue the yuan but "to limit it from the U.S. dollar." Fan is director of the National Economic Research Institute at the China Reform Foundation.

But he stressed that the Chinese government is under no pressure to revalue its currency.

Periodic Ponzi Update PPU -- $hifty, 21:25:28 01/23/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,034.27 + Dow 10,392.99 = 12,427.26 divide by 2 = 6,213.63 Ponzi

Down 109.33 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Silver miners -- Silver miners, 04:42:53 01/20/05 Thu

Silver Standard Resources Inc {SSRI} is an excellent example of a finely managed company that has spent the last twelve or so years building up a stable of global Silver properties that, hopefully, one day, can be brought into production {I own shares of this co}. They now have in the vicinity of a Billion {!} ounces of Silver resources and only one of their current fifteen global projects is being fast tracked to production…..the ultra-rich La Pitarilla project in Mexico. Every other project, out of this Billion ounce portfolio, remains under wraps or a ‘steady as she goes’ progress because they are simply not economic enough for production at this level of Silver price. That speaks volumes to me. Sure, there are presently producing primary Silver mines but they absolutely have to be of uncommonly rich grade or they couldn’t make a go of it.

I will also advise you that the Silver miners that I talk to have an avowed non hedging stance…………they await higher prices before production and they will not slaughter their own market by dumping future production onto it. Extra kudos are extended to those like Silver Standard Resources that are also parking large amounts of their cash holdings in physical Silver. These are smart and determined managers and these are your coming swing producers in Silver. Get ready for higher Silver prices first.

Silver.......Anatomy of a CRIME{X} -- auspec, 15:54:35 01/19/05 Wed

SILVER…….ANATOMY OF A CRIME{X}

By Rusty McDougal

Jan 2005

INTRODUCTION

The purpose of this article is to explore several diverse variables that have an outsized impact on the silver market and then explain how these factors are currently converging towards setting Silver, finally, free from official price suppression. A serious student of today’s Silver market misses the mark completely unless a full thirty to fifty years of American history are taken into account. Only when one comprehensively understands how these key issues over the decades are now bringing the crucial focal point of the Silver market clearly into view does tomorrow’s price projection for Silver become obvious.

THE PAPER TRAP

Let me ask you some key questions. What percent of Americans do you believe understand the infamous monetary act performed by its own government in 1971? Of course, I’m referring to President Nixon’s refusing to continue honoring the US commitment to exchange Gold for Dollars redeemed by foreign holders of our currency. What percentage of American, or global investors for that matter, comprehend that since that event there is absolutely nothing, nada, zippo backing any worldwide currency? These are rhetorical questions for any thorough student of hard money issues but the rest of the planet has long been locked in a Fiat Haze or a Fiat Mentality.

Quite frankly, all most people know about “money” is that they desire a lot more of it than they have and they also want the ‘good life’ having more of it allures them into believing it will bring them. The Masters of Fiat have subsequently mastered most and we now live in an Age of Fiat, though few recognize this fact and fewer still live differently for having recognized it. Because the populace doesn’t understand Fiat money they are subject to its multitudes of abuses.

Instead of having our ‘money’ backed by the Constitutional mandate- Gold and Silver, or anything else of substance for that matter- we are left with the inevitable manifestations that Fiat brings with it….. confusions, distortions, and even dishonest weights, measures and markets. The Silver market has been especially prone to these Fiat maladies as will be shown subsequently.

Let’s look at the way the unenlightened perceive Fiat money. The simple fact is that 99 plus percent of the population cannot accurately explain the mechanism by which a 5 cent Coca-Cola in 1960 now costs approximately 85 cents other than to just parrot the word “inflation”. The Coke hasn’t changed but the morphing monetary unit certainly has. Most people are simply bewildered by monetary mechanisms and cannot perceive them as being little more than a hidden tax as well as an illusion of “wealth”.

How about the effects of the variable rate Fiat entity on the art and science of Technical Analysis {TA} in the precious metals arena? If Robert Prechter’s 1990 or so Elliott Wave Analysis call for $100 Gold ever made any sense---- it certainly doesn’t now. The unit of measurement has changed {depreciated} so much that this long standing call now borders on the absurd…… no offense to Mr. Prechter intended, this is just business as usual in the Fiat Haze we live in. All of us tend to adapt to a Fiat mentality or an attitude of Fiat and never realize we are trapped within this matrix.

How about Silver? I first bought bars of Silver just a couple of years after Pres. Nixon reneged on Gold and happily paid somewhere near $4.30 per ounce for them. Hmmmm…. it seems as though Silver could have been had for that same amount of Fiat currency pretty much throughout the 1990’s and even into late 2001. Did the amount of Dollars change per ounce of Silver purchased? No. Did the ounce of Silver change? No. The Dollar did change, dramatically so, over that twenty to twenty eight year period of time in spite of this Silver purchase anomaly. How does one continually rationalize the slip sliding Dollar and its impact on goods and services transactions? According to the murky world of Fiat, all other things being equal, something that cost $4.30 in 1973 should cost roughly $18 or more twenty eight years later. I’m making an estimate here and not making any form of Silver price prediction……just showing the folly of Fiat. Fellow Silver advocate, “Galearis”, showed me a website where Dollar inflation costs can be readily calculated over the years……………. http://eh.net/hmit/ppowerusd/

He also precipitated this essay with some of our Silver ideas being exchanged. Thanks.

Several Silver experts have recently been discussing how difficult it is to use any form of Technical Analysis in the Silver market when the unit of measurement, the Dollar, is a fluctuating variable. There was even legitimate debate as to whether or not Silver is even in a bull market post 2000. In reality, one would need to see a graph of Silver priced in a form of “constant Dollars” in order to even make a certain call…….. the Dollar changes considerably even over a four or five year period of time. Is it a true Silver bull market if all Silver did was go up the same percentage the Dollar went down? Yes, it is confusing, but if you will look at the Silver graph at the excellent website http://www.the-privateer.com you will likely also see that Silver indeed has been in a clear bull market, at least a US Dollar based Silver bull, since late 2001 when it was priced near $4.30. A “true value” graph would factor in the variable Dollar issue and show a more accurate picture, but still a bullish one from my perspective. It is also important to know how Silver stacks up in terms of other key global currencies other than the one it is always priced in {US$}.

We now live in an environment that has a hard time financially differentiating illusion from reality, crooked market from honest market, or dishonest money from honest money. There will be much more in the latter parts of this piece about COMEX Silver, but it is quite apparent that a lot of Silver ‘investors’ don’t know the difference either between the Fiat Silver offered up on CRIMEX and owning the real thing. The Age of Fiat has also taken its toll on the Silver market.Is it really that big of an extrapolation to go from $100 Bills with no backing to contracts of five thousand ounces of Silver without adequate backing? I can assure you COMEX knows Fiat well and they are simply one more leg of the Paper trap.

THE DUMPING/GIFTING/PILFERING VARIABLE

Now that we’ve pretty much maligned the official monetary units across the planet let’s move on to other elitist misdeeds over the last one half century. What caused Silver to sell for $4.30 in 1973 and for the same $4.30 again twenty eight years later in 2001? Why exactly didn’t it “inflate” like the Coke did during that time period {except for the rare spikes}? There are multiple reasons why this transpired but the key reason is that the Unites States’ historic above ground stockpile of Silver has been supplied to the market over the last fifty years.

This stockpile, which belonged to the citizens of the USA, has been reported to be as high as five Billion ounces in the 1950’s. Calling it the proverbial overhang is quite the understatement, especially when various players closely connected to government desired possession and outright use of this treasure. They got their wish and have since dumped this amount of Silver onto the marketplace over these fifty plus years--- it’s now essentially gone. That was quite the obstacle for Silver to overcome, no?

Why call this act “dumping” when that term connotes putting excess supply into a market to gain competitive advantage? Did someone gain competitive advantage via this action? Yes indeed, they surely did. You can start out by looking at the infamous Silver Users Association to see who profited from pilfering the US strategic Silver supply. For an historical perspective of the Silver Users Association and their affinity for attaching public Silver on the cheap you may want to review Charles Savoie’s informative article entitled “The Silver Raiders” at the Silver-Investor.com website:

http://www.silver-investor.com/charlessavoie/raiders.htm

In the interest of brevity, let me just state that these Silver transactions obviously didn’t hurt the bottom lines of Kodac, Du Pont, Dow Chemical or any other Silver Users Association member to have assured access to the public’s strategic metal, Silver, at dirt cheap prices over decades. I guess one man’s Silver Users Assoc. is another man’s Silver Abusers Assoc. --- the dumping, gifting and pilfering lines get pretty blurred in all the haze.

There are other clear winners in this Silver dumping scheme—quite obviously those forces that prefer control of the easily printed Federal reserve Notes over Constitutionally mandated real money, Silver and Gold. Both metals have long ago been deemed to be in competition with Fiat and they are accordingly “governed” or suppressed. Silver and Gold are tiny markets in comparison to the near infinite supplies of Fiat and a little influence used to hold these metals down in price gives quite the bang for the buck {pun intended}.

The most commonly used form of money over the centuries is SILVER … it’s not real wise to leave Billions of ounces of that particular competition lying around just waiting to be re-monetized, is it? Let’s keep that old Constitution hidden in the closet as well. Here are a few key quotes from the always exceptional Privateer:

“In any discussion of the future of Gold, or of the price of Gold, the first thing that must be realized is that Gold is a POLITICAL metal. In the true meaning of the word, its price is "governed".”

“This is so for the very simple reason that Gold in its historical role as a currency is fundamentally incompatible with the modern worldwide financial system”.

“Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is NO escape because NO paper currency has any link to Gold”.

“All of the economic, monetary, and financial upheaval since 1971 is a direct result of this fact”.

“The global paper currency system is very young. It depends for its continued functioning on the BELIEF that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold.” END

Copyright 2005-the Privateer http://www.the-privateer.com capt@the-privateer.com {Reproduced with permission}

While these quotes are directly related to Gold they are also pertinent for Silver. One of my ongoing projects is to encourage Bill Buckler and his highly recommended Privateer not to overlook Silver. Personally, I think Silver had a much greater chance of being turned into a valuable but common commodity than Gold ever did, but the mere fact that Silver is also “governed” like Gold makes that a moot point. Quite apparently, those in control of global currencies fear both Gold and Silver {unlike Palladium for example} and have thereby inextricably linked them together as true competitors to Fiat, a.k.a. real money. So be it!

To sum it up…….Billions of ounces of US citizens’ Silver has been dumped onto the market sub economically to the benefit of elitist insiders as well as paper un-backed money.

THE SILVER MINING VARIABLE

No discussion of the future Price of Silver {POS} is complete without a comprehensive understanding of the Silver mining supply factor. My strong beliefs are that neither current nor future Silver mining supply can rapidly dampen the coming spikes in the POS. No help here for the Silver suppressors.

I continue to say that the Average Cost of Production of a particular commodity holds the key to successful long term investing in that commodity. Most commodities do not have the existing above ground supply factor that both Silver and Gold have had to deal with over the years. Both Silver and Gold are therefore harder to make future price projections for because of the unusual ‘overhangs’ of supply. Now that the largest known stockpile of Silver is GONE, the Average Cost of Production for an ounce of Silver can resume its normal influence over the POS. Clearly stated--- when you can purchase a commodity well below the average cost of producing a unit of that commodity and you are able to hold it on a long term basis……..you are making a high percentage favorable speculation. This is exactly the current case with Silver, especially now that Billions of ounces of Silver overhang have been used up.

What exactly is the average cost of producing an ounce of Silver? That is a pretty tricky question in actuality and it will require analyzing different types of Silver production as well as doing some extrapolations. OK? Silver is produced both in primary Silver mines as well as in secondary Silver mines where it is produced as a byproduct of extracting other elements. By far the largest amounts of Silver are mined secondarily as a byproduct ………..estimates for secondary Silver mining range from 70 to 80%. This secondary Silver comes forth to a large degree regardless of the POS. Still, that leaves an approximate 25% or so for primary Silver production……..nothing to sneeze at and I’ll tell you why shortly. Would one not expect a relatively lesser amount of primary Silver production during the decades of a Silver Bear market?? Of course, and, as the POS increases in the coming years we will see a larger and larger percentage of primary Silver being produced. Why? It is because the secondary Silver is, once again, produced pretty much at the same level regardless of a low or high Silver price. I’ll continue with this line of thought.

What’s the most commonly known cartel that has largely controlled the price of their particular commodity for some thirty plus years. You got it right, OPEC. Do you know that OPEC only has control of 40% of world oil production per their own website? How do you reconcile their supposed iron grip control over the world oil price via this 40% influence yet see so many people totally dismiss primary Silver mining with its approx. 25% influence. It really makes no sense………until you, once again, recognize the historic anomaly in the Silver side of the equation-----the now gone Billions of above ground ounces. If there had been above ground oil inventories since the 1970’s on the same scale as Silver’s glut------- there is no way OPEC could have maintained their stranglehold over these several decades. It is a huge difference and Silver is just now beginning its new era because the vast horde is gone.

Do you still want to dismiss primary Silver mining production as a non factor? These guys are starting to look more and more to me like the marginal or swing producer that eventually sets the price of production. Their influence is destined to be greater and greater each passing year. Unlike the secondary Silver producer the primary silver producer is acutely concerned about the average cost of production for an ounce of Silver…………he has to be or he will soon see his mine be closed. I have long heard that the average cost of producing an ounce of Silver is in the $7 range- in fact I’ve heard it so long I no longer believe it to be accurate but too low. Again, we’re no longer talking about the same Dollar that world Silver is priced in {it’s shrunk} and energy, environmental, and other key production expenses continue rising significantly. The recent spikes in Silver in 2004 to the $8 level hardly caused a stir amongst potential primary Silver miners………..they need sustained higher prices to even consider advancing developmental projects into production.

Silver Standard Resources Inc {SSRI} is an excellent example of a finely managed company that has spent the last twelve or so years building up a stable of global Silver properties that, hopefully, one day, can be brought into production {I own shares of this co}. They now have in the vicinity of a Billion {!} ounces of Silver resources and only one of their current fifteen global projects is being fast tracked to production…..the ultra-rich La Pitarilla project in Mexico. Every other project, out of this Billion ounce portfolio, remains under wraps or a ‘steady as she goes’ progress because they are simply not economic enough for production at this level of Silver price. That speaks volumes to me. Sure, there are presently producing primary Silver mines but they absolutely have to be of uncommonly rich grade or they couldn’t make a go of it.

I will also advise you that the Silver miners that I talk to have an avowed non hedging stance…………they await higher prices before production and they will not slaughter their own market by dumping future production onto it. Extra kudos are extended to those like Silver Standard Resources that are also parking large amounts of their cash holdings in physical Silver. These are smart and determined managers and these are your coming swing producers in Silver. Get ready for higher Silver prices first.

If you are interested in reading a past Silver article I wrote that also delved into the particulars of Silver mining you may read:

http://www.silver-investor.com/misc_articles/SilverHitsWall.htm

COMEX PECULIARITIES

The COMEX division of NYMEX is certainly an interesting place……….that much I’ll readily grant them. I do take issue with many of their practices and will, once again, explain my particular perspective on their future as it does differ from other Silver advocates to a degree.

Plainly, as the oft mentioned 5 Billion ounces of above ground Silver inventory were squandered in defense of Fiat {plus other reasons} the game had to be switched to one of mostly paper manipulation through COMEX derivatives. Much like OPEC controls the world oil price via their swing production variables…………COMEX now controls the world Silver price through their paper games. Let’s just call it Fiat Silver because that is the normal extension of the Fiat standard we’ve been on since 1971.

COMEX grants particular insiders ****authority to sell**** paper Silver contracts on a pretty much unrestricted basis. COMEX claims these short sellers actually have sufficient physical Silver backing for these outsized trades but have declined to fully disclose or clarify. It is quite obvious this claim is just one more fabrication. Anyone else notice the current cleanup regarding naked short selling in some of the US stock markets?? Hmmm. For now, and for a little while longer--- unbacked Silver paper is the swing producer and this is used as a price setting mechanism to keep the globe {yes, the globe} away from any form of honest money. What you are seeing here is the natural extension of the failed process that brought us Long Term Capital Management, Enron and accounting by Artie Anderson. The haze is metastatic.

There is no need for me to repeat all the fine investigative work performed by Ted Butler and others as it is all well documented and quite accurate. COMEX Silver has received more than sufficient notice that reformation is overdue………………yet the CFTC and those in charge of supervising COMEX metals take zero action. Personally, I don’t believe that complaining, pleading, documenting, reasoning, letter writing or mounting campaigns with this particular institution will ever bring it back to what could legitimately be called an honest market. Sorry. They had every chance under the sun to do the right thing and clean up the mess.

Where exactly DOES this process end? There is no end to a paper game w/o someone calling the BLUFF. COMEX Silver has been a paper game for longer than I would care to guess........well past a decade now. It is nothing but a private play ground where those closest to govt. extract their due profits from the unsuspecting public and other parties foolish enough to participate in this charade. If you don't have a hotline to Robby Rubin and some of his buddies you likely should stay home. Collusion by insiders is the name of the game at this 'private club'.

Physical is the only thing that trumps these paper games. I have yet to hear of any paper Silver shortages and never will ......... all the shortage reports are about physical Silver..... Silver someone, some where is trying to get their clutches on. Delays and shortages eventually lead to defaults and then the game is up. The entire globe is afraid of calling the CRIMEX paper bluff.........content participating in the game and content not taking home some of the dwindling COMEX Silver supply of a scant 100 Million plus ounces. Exactly how long DO you believe the COMEX Silver boys can continue to showcase 100 Million ounces of silver or even a ‘credible’ 80 or 60 Million ounces????? Do you really doubt they can find storefront silver with all their global network of contacts?? This particular paper game may just go on for what you personally might consider a LOOOOOOONG time. It is one thing to force the commercials into covering their shorts------ something altogether different to get them to take their bloody hands off this market. Good luck. "We" get a buck or two in Silver price appreciation here and there.............they make money on the upside and the downside as well as retain control of the global price of Silver via this profitable 'market' {for them}.

What if "Silver Hit the Wall" and no one was around to hear it.....?? As long as COMEX remains the world's Silver price setting mechanism.........there will be no crashing noises from the Silver 'accident'. It will be business as usual as long as the 100 Million ounces or so are showcased, right? There are credible rumors of global delays and shortages and there have been now for a couple of years.............still the COMEX boys don't flinch because they maintain their playground. Who loses? Silver miners, silver investors and anyone who gets offside the collusive CRIMEX silver moves. Who wins...? The COMEX collaborators win over and over again and long term Silver investors also win. If you don't know who the 'mark' is at the CRIMEX table-----guess who it is?

Here are a few questions to ponder in relationship to COMEX Silver. Who exactly is stupid enough to continually play the patsy in this ongoing NYMEX ripoff? We hear that the “Commercial” entities pretty much have their way whether they go in a long direction or a short direction. The “Technical Funds”, “Hedge Funds”, and “Small Speculators” are portrayed as chronic victims…………..when exactly are they going to catch on that their odds of success are quite slim indeed? Are these repeat victims or is a new batch being regularly supplied? How long will it be until the Silver market is generally seen to be as controlled or manipulated as the Orange Juice market reportedly is? Are we there already?

These are some of the reasons why I have such disdain for CRIMEX. They are a gnat's arse in the big picture of the entire silver phenomenon and they deserve to get flicked away {delivery would do it}. Those who live and die with every COMEX Silver move and statistic are investing themselves in this crooked Silver process when they should just step back, call a spade a spade, and call for the end the ridiculous paper fraud. Just maybe, at one time, COMEX actually was a 'fine American institution'. Those days are long gone. They've gone, once again, the way of Enron, Artie Anderson, Long Term Capital Management and the other national disgraces we've come accustomed to over the very recent years.

RUN IT HONEST OR SHUT IT DOWN!

ARE WE THERE YET…..?

Exactly how close is Silver from truly being set free from its governance? You’ve seen how Silver has fallen prey to a paper trap in an Age of Fiat. The classic endgame of Fiat historically is in debt spiraling out of control and in obtrusive shenanigans becoming commonplace…………any bells ringing? Any stress to the Fiat {Dollar} system will automatically play out in one of its arch rivals—Silver.

There should be little debate concerning the now gone Billions of ounces of Silver supply and this dramatically changes everything in the Silver market. Silver is an awesome speculation on this factor alone. I repeat this variable intentionally.

The current mine supply absolutely won’t bail out the Silver suppressors……….not until long after you see the likes Silver Standard’s Billion ounces and the other new worldwide Silver mines and projects coming into production. This will only happen with a significantly higher POS. The prudent activities of the group of Silver developers waiting for higher prices are a sight to behold and they are a force to be reckoned with.

What more can be said about the COMEX Silver manipulators other than, one way or another, their days of credibility are approaching endgame. Maybe no one will call their bluff any time soon------- it really doesn’t matter………for you see…….they have been found out. COMEX Silver has become a stigma and an embarrassment as more and more sophisticated worldwide players have learned the facts. More and more Silver and Gold advisors and people in the ‘know’ are flat out telling metal investors to buy physical metal and stay away from paper. This is snowballing now. Let me pose another question or two. If you are a silver aficionado and you either don’t own physical Silver or you participate in some paper scheme like the one on COMEX……what the hell are you thinking?? You have two polar opposite bets here. If you run a Hedge Fund or Technical Fund and you are taking a repeated beating on COMEX Silver…….what the hell are you thinking?? The days of COMEX setting the global price of all Silver transactions are numbered.

The very thing that silver adversaries have no answer for is knowledge and intelligent action by advocates of Silver. The precious metal authorities have exceedingly strained the boundaries of the Laws of money, markets, mining and nature and it is my sincere belief that all of these factors are now converging to restore what just might be termed order in the Silver niche. Something has to and will give…….soon. These unleashed forces have already placed us squarely in a Silver bull market and promise a spectacular one just ahead.

Rusty McDougal rtmauspec@hotmail.com

Permission is given to copy or forward this article to interested Silver parties.

Gold -- Sharefin, 21:52:04 01/16/05 Sun

Repurchase agreements, securities lending, gold swaps and gold loans: - pdf file

Statistical treatment
The statistical implications of gold swaps and gold loans/deposits are complex and have not
been fully worked through. Work is still being undertaken by the Committee to address the
implications. In particular, gold may be double counted with either a gold swap or gold
loan/deposit if the party acquiring the gold were to on-sell it outright, because both the
original owner and the outright purchaser would report ownership of the gold. In addition,
there is the difficulty of having monetary gold being used in these transactions for purposes
other than for reserve assets, and how (de)monetization would apply if the gold is sold for
industrial purposes. Moreover, there is a proposal to treat (some) nonmonetary gold as a
financial asset, rather than a commodity, and the outcome of that discussion may have further
implications on the treatment of gold swaps and gold loans/deposits. Finally, how the “fee”
for gold swaps and gold loans/deposits should be treated has yet to be resolved. All these
matters are being considered by the Committee and a report will be taken to the AEG in due
course.

Periodic Ponzi Update PPU -- $hifty, 20:04:30 01/16/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,087.91 + Dow 10,588.0 = 12,675.91 divide by 2 = 6,337.95 Ponzi

Down 8.33 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Fiat -- Sharefin, 00:36:19 01/13/05 Thu

Thai foreign reserves seek refuge from US$ funds

THE government wants to cut the proportion of Thailand’s $50 billion worth of foreign reserves kept in US dollar-denominated assets, to cut the risks associated with the currency’s roller-coaster ride on the forex markets.
~~~
According to the Bank of Thailand’s (BoT) figure, the country’s foreign reserve as of end-December last year totalled $49.8 billion, said Olarn. Over the past two years Thailand, Singapore, Malaysia, Hong Kong and India had each tried to reduce the amount of their foreign reserves invested in US dollar bonds, he said.

From now on, he said the intention of the Thai government would be to keep only half its foreign reserves in US dollar bonds and the rest in a mixture of European and Asian bonds. Previously up to 80 percent of the national foreign reserves were in US dollar-based bonds, with the rest in a mixture of European and Asian bonds.

Fiat -- Sharefin, 00:35:07 01/13/05 Thu

ROBERT CHAPMAN COMMENTARY...... THIS PRETTY MUCH SUMS IT UP.

Asian central banks have been closely watching US policy makers, to make sure there is no change in their support of Asian exports to the US. These are the nations that have been buying dollar-dominated assets, mainly Treasury bills, notes and bonds to keep their currencies from appreciating and at the same time to support the dollar and the US economy, which is one of their largest customers. On the other hand, the possibility exists that Asian nations may decide their industrial development is well enough advanced and that they no longer need to support the dollar and suppress the appreciation of their own currencies. In the Asian mind, there is always the possibility that the US might change their trade agenda. Perhaps a move back to tariffs. It does not really matter what the reason is as the potential exists for policy makers in a few Asian countries to immediately direct a sale of the holdings of their US assets, and re-direct the proceeds to other countries or to domestic uses. Such a shift would send US interest rates straight up and the dollar straight down. Stocks, bonds and real estate would fall and global trade would contract dramatically. There would be a reconfiguration of political and military alliances away from the US. Unfortunately, that is already in progress due to the invasion and occupation of Iraq and Afghanistan. There is no longer time left to slowly and methodically rebalance the system. The US has a limit to how many exports they can absorb and how much more debt the consumer can assume. There is no chance Asia can export its way out of its problem-dependence on US imports. It is now the policy of the administration to allow the dollar to slowly fall in value. This, of course, increases US inflation, interest rates and currency volatility without substantially improving the deficit. This is not the 1970s and 80s, we do not export enough goods now to substantially improve the balance of trade and our current account deficit. We advocate tariffs, which would work relatively quickly and would trigger counter-tariffs that would negatively impact the global economy. In place of that, someone has to show us a better idea because everything the US has done thus far by the administration, Congress and the Fed has not and will not work. The advocating of a new Marshall Plan for the world economy is unworkable. It is just the creation of more debt. The system has to be purged of its excesses. That could be accomplished by boosting savings, paying off debt, curtailing barrowing, cutting the federal budget deficit and shifting priorities from excessive conspicuous consumption, which would bring the current account deficit into balance. We agree with that procedure, but we also realize it will usher in a world depression. At this stage, in order to solve the problem a worldwide depression is totally unavoidable. Does anyone really think Asia and others are going to voluntarily revalue their currencies by 40% and allow the US to renegotiate its debt with the world for say, $.40 on the dollar? Foreigners would take the full hit and the US rewarded for its profligacy. The other new factor is 80% of those outside our country dislike George, the neocons, and their perpetual wars for perpetual peace. Does anyone seriously think foreigners, already furious with US foreign policy, will revalue and impose partial debt forgiveness? Hardly. The rest of the world has not been taken in by the fantasy of terrorism. They may be many things, but they are not dumb. The imbalance of our world financial system has been 65 years in the making. We never came out of the depression of the 1930s; we just had one war after another and a resultant piling on of debt. The world monetary system has not been stable since then and the flight from a gold-dollar standard on 8/15/71 sealed the fate of the dollar and the world monetary system, which are essentially almost all fiats.

There is no balance in world trade today envisioned in textbooks. It is all one sided, we buy by printing money and issuing credit and they manufacture and sell to us taking fiat depreciating dollars in return. This has led to our agriculture having to be subsidized, our plants being moved out of the country and the remainder of our jobs being up for outsourcing. How can anyone with half a brain believe this can continue? The heart of our system is being ripped out. We are being destroyed. Does anyone get it? Don’t they realize we have no friends and it is now every man for himself? When are we going to consider self-preservation? It once was a native instinct in America, where has it gone. Look at the mess created by the elitists who run our country, our banks, Wall Street, insurance companies, transnational corporations and our politicians, almost all of who are bought and paid for. Corporate elitists know no bounds; anything goes. One corporate scandal after another dealt with by fines. No one goes to jail and they rejoin the game to commit the same acts again. The American people look the other way. They now expect endemic corruption. It is a way of life. The motto of our times, “I didn’t have sex with that woman.” Our disgusting society now devoid of morality, a society that condones abuse, rape, and torture by our government. Does it get any worse? We cannot spend our way to prosperity, nor can we steal our way to prosperity. We have been living in a false world for three generations. At the heart of this monstrosity is the privately owned Federal Reserve the main control instrument of the elitists. The creator of the capital. The misallocator of capital and the creator of asset bubbles. Today they have outdone themselves. Three asset bubbles at once, bonds, stocks and real estate. They should be cited for their total and complete ineptitude, unless of course, they have deliberately brought the US economy to its knees in order to force America to accept world government by their design, which is total human enslavement. If these are our risk managers, we may as well jump in a hole and pull the hole in after us. The Fed has lost control. Since 1989, they have been using what band aids they have left and they are just about out. They no longer effectively regulate monetary policy and our economy. Our economy is not in the hands of our debtors. The repo pool, M3 and bank lending are all stopgaps. The Fed has lost control and they are operating in the dark

Adding to our woes, we have George and the neocons in their madness creating one war after another. Another two years of this madness and we will have nuclear warfare; we will not have to worry about our financial system. There simply will not be one. It will be barter with gold and silver coins. The US has allowed Europe and Asia to form blocks, which have altered our ability to impose policy solutions. That has been by deliberate design by elitists in order to bring about world government. These blocks, free trade and globalization have been deliberately set in motion to relieve America as a world leader and render it to an equal or second-class position among nations.

Free trade and globalization is not the answer, it is the problem and now that there is no consensus because of US military adventurism, there can be no balancing. Nations are making other arrangements to protect themselves and they all are anti-American excepting England. The world is sick of being pushed around by Anglo American cartels backed by superior firepower and assassinations. We are responsible for a government run by elitists now out of control. The elitist edifice is collapsing and they do not know what to do to stop it. No matter how you cut it the bottom line is at best the American people, and those of the world are going to have a drastically reduced living standard, and that is the best-case scenario. America’s unsustainable indebtedness is coming to an end. This is something Americans are ill prepared for and it could have monstrous social ramifications. This indebtedness has forced America into a weakened state. Thus, our President on orders from other elitists is pursuing perpetual war to mask the financial deterioration we are mired in.

Robert Chapman / International Forecaster

Gold -- Sharefin, 19:14:58 01/11/05 Tue

StreetTracks Gold Draws $1.3 Bln, Best Start for ETF

A fund created last month to invest in gold bullion has attracted $1.29 billion from investors, making it the most successful start for an exchange-traded fund since the securities were created in 1993.
~~~
Demand for the new gold fund, started Nov. 18, has been spurred by fund managers barred from owning physical commodities who want to bet that this year's rally will continue. Gold prices reached a 16-year high of $458.70 an ounce in October. Some investors also buy gold as a hedge against a decline in the dollar.

``We use it as a parking place for money,'' said Gregory Orrell, president of Livermore, California-based Orrell Capital Management Inc., which has 7 percent of its $76 million in cash and gold-backed shares. ``Instead of holding cash, we can put it there.''

Gold -- Sharefin, 19:02:03 01/11/05 Tue

In The Cards For Gold - Spectacular Upward Move

The keys to the gold market in the short term are the direction of the US dollar, the strength of physical demand and the resolution of the extended speculator position on the Comex. However, the real bull markket will get underway when gold begins to rise against all currencies.

Fiat -- Sharefin, 18:52:39 01/11/05 Tue

Fed warns of more US rate rises

The US looks set for a continued boost to interest rates in 2005, according to the Federal Reserve.
Minutes of the December meeting which pushed rates up to 2.25% showed that policy-makers at the Fed are worried about accelerating inflation.
~~~
Rapid release

The release of the minutes just three weeks after the 14 December meeting was much faster than usual, indicating the Fed wants to keep markets more apprised of its thinking.

This, too, is being taken in some quarters as a sign of aggressive moves on interest rates to come.

The key Fed funds rate has risen 1.25 percentage points during 2004 from the 46-year low of 1% reached not long after the 9/11 attacks in 2001.

That long trough "might be contributing to signs of potentially excessive risk-taking in financial markets", said the Federal Open Markets Committee (FOMC), which sets interest rates.

Fiat -- Sharefin, 18:50:24 01/11/05 Tue

Bond bubble, American-style

We believe a nasty popping of the bond-market bubble lies in wait for investors. Why? In short, yields are too low, bond prices too high, and quality spreads too tight. The gargantuan rally, which actually peaked in June 2003, as evidenced in the monthly chart of 30-year bond futures below, should soon be history.
The primary source of the "wildness" seems easy to pinpoint ahead of time -- this time. It's the US Federal Reserve. It was the engineering of the emergency Fed Funds rate, to save the world from the clutches of deflation (denying this as the proper cleansing agent for economic sins past) that proved most impressive as bubble fuel. It's now the long march toward the elusive "normalisation" of benchmark interest rates that will draw Zeppelin-like comparisons from observers as long-bond prices head toward earth.
We wouldn't be surprised to see a surprise in the form of inflation scare, major hedge-fund collapse, or foreign bank reserve reallocation to hasten the descent of fixed income prices across the entire spectrum: from Treasury to junk. Those holding junk bonds, now the darling of yield chasers, will soon understand the moniker.

Periodic Ponzi Update PPU -- $hifty, 19:11:07 01/09/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,088.61 + Dow 10,603.96 = 12,692.57 divide by 2 = 6,346.28 Ponzi

Down 132.94 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Periodic Ponzi Update PPU -- $hifty, 21:03:17 01/02/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,175.44 + Dow 10,783.01 = 12,958.45 divide by 2 = 6,479.22 Ponzi

Up 14.65 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Periodic Ponzi Update PPU -- $hifty, 22:06:35 12/26/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,160.62 + Dow 10,827.12 = 12,987.74 divide by 2 = 6,493.87 Ponzi

Up 101.31 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Gold -- Sharefin, 22:38:08 12/20/04 Mon

A New Gold Rush

The yellow metal is an attractive investment once again, thanks to the steep rise in gold prices (due to the weakening dollar) and the increasing availability of institutionalised ways to buy and sell gold. The gold rush is reflected in the country’s two commodity exchanges, Multi Commodity Exchange (MCX) and National Commodities and Derivatives Exchange of India (NCDX), where futures trading in gold began a year ago.

Volumes have since increased dramatically from a mere 100 kg in gold to the current over 10,000 kg a day. Says Joseph Massey, deputy managing director in MCX: “Both gold and silver are currently among the most liquid commodities in the futures market.”

Hyderabad-based Karvy Commodities Broking Pvt Ltd, which manages retail investors who trade in commodities, says that as much as 70 per cent of the trading volumes of its clients is in gold and silver.
~~~
At a macro level too, the numbers clearly show phenemonal demand for gold in India this year. The World Gold Council (WGC) estimates that consumer demand for gold between July-September this year went up by 28 per cent in rupee terms and 16 per cent in tonnage terms over the previous year. Compare that with a mere 3 per cent growth in 2003 over the previous year in tonnage terms and the hunger for gold becomes evident.

More importantly, Rajan Venkatesh, director India of bullion in Nova Scotia Bank, says: “The peak season for buying gold lasts from October to March,” indicating the trend is likely to contnue well into the new year.

Interestingly too, the offtake of gold for purposes of investment (in bars, coins etc) has been growing faster than jewellery. Between January and September, gold offtake in rupee terms went up by 21.6 per cent as compared to 19.9 per cent for jewellery.

Trends in previous years indicate that it was jewellery that enjoyed an edge over bullion. That trend has been reversed this year. Last year, gold for investment peaked at 90 tonnes but WGC estimates that it would clear the 100-tonne mark, which constitutes about a fifth of all gold imported to India.

There are sound reasons for the new lease of life that gold is enjoying. Suggests WGC managing director Sanjiv Aggarwal: “The rise in gold prices, the fear of potenial inflation fuelled by oil prices (gold is a good hedge) and the need to diversify risks, especially their exposures in bonds and shares, and an overall strong economic growth has prompted the demand for gold this year in India.”

Gold -- Sharefin, 22:31:25 12/20/04 Mon

Giving gold a foreign touch

An executive of Shanghai Gold Exchange yesterday said that China's sole national gold bourse has made submissions to the central bank to attract foreign gold traders.

"We are striving to invite qualified international banks and gold firms to directly conduct transactions in our exchange," said Wang Zhe, general manager of the gold exchange.

"The move will build more channels for us to integrate with the international gold market," Wang said yesterday at an international forum on global gold outlook, infrastructure support and market development in Beijing.

At present, there are 128 domestic membership traders in the gold exchange, including commercial banks and gold producers and processors, which conduct spot transactions using renminbi.
~~~
The gold council predicts that gold demand in China will grow to 600 tonnes annually in coming years with the opening of gold investment businesses from around 200 tonnes now.

Gold -- Sharefin, 22:29:36 12/20/04 Mon

Central banks might not meet 500t/year ceiling

CENTRAL Banks could drop positive clues about the gold price by not meeting the 500t/year quota as determined by the Washington Agreement, said Kelvin Williams, marketing director for AngloGold Ashanti. The renewal of the Washington Agreement, signed this year, places a total 500t/year limit on all official sector sales.

In an interview with miningmx, Williams also said central bank attitudes towards gold had changed because its profile as a store of value had been rehabilitated. “The central banks have started to behave in an orderly basis and on an ordinary basis, treating the gold market with the same kind of respect that they would treat the market of a currency of another central bank,” he said.

Gold -- Sharefin, 22:27:36 12/20/04 Mon

Chinese investors take a shine to gold

SHANGHAI (Reuters) - It took the Caishikou department store just hours last month to run out of gold bars stamped with a Year of the Rooster motif, so Beijing's top gold retailer asked customers to register by phone for a second round.

Nearly 3,000 did, salesmen said.

In China, gold is back in vogue. The country's growing urban middle class is lining up to cash in on a spectacular 30 percent rally in the precious metal's value over the last two years to a 16-year peak on Dec. 2.

The rise is partly because the U.S. dollar, long China's hard currency of choice, has dived nearly 30 percent over the same period.

Chinese investors have about 225 million yuan ($27.2 million) saved in gold, state media say. That's a drop in the ocean compared with total savings of $1.3 trillion, but a sea change from when gold hoarding was forbidden after the Communists took power in 1949.

Exporting gold is still banned, but a thriving home-grown market now allows the metal to trade relatively freely.

In line with late leader Deng Xiaoping's recognition that "to get rich is glorious", the Shanghai Gold Exchange opened for business in 2002, reviving memories of the city's status as a gold trading hub in the 1930s.

Some 235.35 tonnes of gold changed hands on the exchange in 2003, and 170.04 tonnes in the first half of this year alone.
~~~
Analysts see China's consumption of gold growing at most 6 percent annually in the next year or so, but growth would be in double digits by the end of the decade.

Consumption is still about a tenth that of the United States. Per capita gold consumption is 0.16 grammes in China, against 2.70 grammes in Hong Kong and 1.42 grammes in the United States, said Jon Bergtheil, global metal strategist for JP Morgan.

But as incomes rise alongside red-hot economic growth rates in excess of 8 percent, China could tighten the global supply-demand balance.
~~~
Gung-ho investors in gold also dream of the rewards should China's central bank raise the percentage of gold in its reserves to the same ratio as the European Central Bank.

That would mean China could buy more than 4,500 tonnes, to add to the 600 tonnes now held, Bergtheil said.

"If you want to be a super-bull on gold, you assume that China decides gold is a viable alternative to the dollars it's storing up and which are increasingly being devalued," he said.

"Nobody wants to go along that argument route at the moment because the numbers are simply too staggering."

Silver -- Sharefin, 21:46:40 12/20/04 Mon

Silver's Three Flags

Silver as a vehicle for popular savings, has turned out to be a very effective flag that has gathered support amongst the principal Mexican political parties, which in everything else are deeply at odds with one another.

This past 30th of November, the 31 governors of all the states that make up the Mexican Republic sent a communiqué to the “Ways and Means” Committee of the Mexican House of Representatives, in which they expressed their unanimous approval of the monetization of silver and urged the Committee to approve a bill which aims to achieve precisely this objective.

176 Mexican newspaper writers put their signatures to full page declarations by the Journalists’ Club in the main newspapers of Mexico City, also in support of the monetization of the “Libertad” silver ounce.

A permanent organization of ex legislators also expressed their support for the measure in favor of the monetization of silver.

A poll by national T.V. Azteca, revealed that 96% of viewers approved of the monetization of the silver ounce, when asked if they were, or were not, in favor.

The Bank of Mexico, Mexico’s Central Bank, is adamantly opposed to this measure. It does not want the public to have the opportunity of saving in monetized silver. It wants to maintain its unblemished monopoly on the printing of Mexico’s money, which has no intrinsic value, and does not want the public to have any alternative for its savings, other than bills or bank deposits.

Gold -- Sharefin, 21:44:38 12/20/04 Mon

U.S. gold ETFs unlikely to steal volume from COMEX

New gold-backed securities traded on U.S. stock exchanges are unlikely to poach trading volume from the New York Mercantile Exchange's giant COMEX futures market, traders and analysts said on Wednesday.

Some market players have speculated that exchange-traded funds that track the price of gold will draw volume away from COMEX because the equities market as a whole is much more liquid than futures.

Indeed, individual investors and entities such as hedge funds and pension funds are more likely to enter the gold market via ETFs like bullion-backed streetTRACKS Gold Shares (GLD.N: Quote, Profile, Research) , proponents of those new securities say.

StreetTRACKS, sponsored by the World Gold Council, an industry body, offers investors an alternative to handling physical gold, which can be costly and complicated to store and insure.
~~~
Although turnover in streetTRACKS is high, gold market sources say the greater amount of gold backing the benchmark COMEX contract, versus the amount of bullion stockpiled in the streetTRACKS, should keep large players glued to COMEX.

Open interest in COMEX gold, which stood at a towering 22.6 million ounces of metal in the benchmark February contract on Tuesday, reflects much more gold than the roughly 3 million ounces of bullion currently stockpiled in streetTRACKS.
~~~
One New York-based gold trader at a large bank said the debut of the ETF should actually draw new business to the COMEX market.

"The NYSE specialist for streetTRACKS is hedging in the COMEX market, so trading in the ETF comes back to the COMEX anyway," he said.

Gold -- Sharefin, 21:42:03 12/20/04 Mon

China sees gold-buying surge to hedge against declining dollar - report

China is seeing a gold-buying surge as a hedge against the weakening dollar and negative real interest rates, the South China Morning Post reported, citing figures from the China Gold Society and analysts

The Hong Kong-based newspaper said the gold buying has prompted a booming trade not only in bars, coins and jewellery but also "paper gold", in which the investor does not take possession of the metal, but trades it like other financial instruments

Trading on the Shanghai Gold Exchange in the first 10 months of the year reached 515,447.1 kg, a rise of 45.35 pct over the same period last year, the paper said
~~~
"The weakness of the US dollar is the main reason for the rise in gold," Xu Ming, a gold specialist with the Bank of China, was quoted as saying

"A weak dollar is the long-term policy choice of the US government and governments are in the process of reducing their dollar assets. The European Central Bank will not intervene in the market. All this is putting pressure on the dollar." The paper said gold is one of a limited number of investment options for Chinese, who hold more than one trln yuan in simple bank deposits

This year thousands have reduced or closed their US dollar savings accounts in favour of yuan-denominated accounts because they expect a revaluation of their currency

The trading of paper gold is officially available only to residents of Shanghai with a current account with the Bank of China, which started offering the service in November last year

Gold -- Sharefin, 21:37:14 12/20/04 Mon

Kondratieff Winter Watch

As Ian Gordon points out, there are times during the Kondratieff cycle when stocks and bonds are the best possible investments and gold is one of the worst investment choices. Stocks do best in the Kondratieff spring and autumn, and bonds do best in the autumn and winter, after the debt repudiation process is completed and before the summer of the new Kondratieff cycle begins. Spring, summer, and autumn are the “heyday” periods of the fiat money system. However, due to excessive money creation, which occurs in gold and non-gold backed systems, the winter is a cleansing period for fiat money during which the excesses of the system are purged. So the Kondratieff winter, which begins with stock market peaks, is absolutely the worst time for stocks, and not until the carnage of the winter is over is it a good time to buy bonds. By contrast, this is absolutely the best time to own gold and gold stocks. The second best time to own gold and gold stocks is during the inflationary summer, which in the current cycle, ended with the $850 gold price blow-off. But now, we face the Kondratieff winter, which is by definition a breakdown of fiat money. Now we want to opt out of the fiat money system that the O’Higgins system would lead us to, because the system itself is getting horribly out of balance and thus highly risky.

What has to happen to trigger the Kondratieff winter deep freeze? It has been a long, long time since mainstream American policy makers have believed in free markets and that they should allow markets to self adjust when doing so inflicts pain on citizens and especially when it causes the ruling elite to see their wealth vanish. What needs to happen to set the self-adjusting market mechanism of deflation in motion so as to undo excessive money creation by the ruling elite? What needs to occur is a liquidity crisis that spins out of control and away from manipulating policy makers, who are better known according to the Wall Street Journal as the “Plunge Protection Team.”
~~~
A systemic breakdown of that kind, when fiat money spins out of control is simply addressed. If you know the building is on fire, you get out. The international monetary system and global economy is “on fire” so to speak and not 1% of Wall Street perceives any danger than Alan Greenspan can’t solve. But that is why you subscribe to a “fringe” letter like this. If CNBC were advising you of these dangers, you wouldn’t need us. Of course CNBC won’t tell you of these problems because they have too much invested in creating a business as usual illusion. So we continue to prepare for survival of the impending deflationary Kondratieff winter.

Gold -- Sharefin, 21:34:30 12/20/04 Mon

How Can You Tell If Your Gold Jewelry Is Real?

If you're shopping for gold jewelry — or hoping to receive some — this holiday season, you may end up paying for gold but getting glorified tinsel. How can you be sure you're getting the real thing?

"20/20" went on a gold-buying spree — with hidden cameras rolling — at jewelry stores and markets in Dallas, Maryland, Virginia and New York City and learned that if you're not careful you may end up buying "fools' gold."

In each store, "20/20" shoppers asked to look at gold jewelry that was at least 10 karat, and the clerks were quick to promise that it was. All of the clerks even agreed to put it in writing.

"20/20" asked for that guarantee, because anything less than 10 karats — or about 42 percent real gold — can't legally be sold as gold in this country.

"Anything under 10 karat in the United States is a pretty yellow metal, but it's not gold," said Cecilia Gardener of the Jewelers Vigilance Committee. She says shoppers can easily be ripped off by watered-down gold.
~~~
With sales of gold jewelry soaring -- reaching $16 billion in 2003 -- attorneys general in several states found under-karating to be a common problem. The worst cheating apparently occurs with the less expensive 10-karat and 14-karat pieces.
~~~~
At one jewelry shop in New York, a "20/20" shopper bought what was supposedly 10-karat bling-bling. Upon testing, it turned out to be only eight karat.

Down the street, salespeople at another shop had confidently sold "20/20" three gold charms, even guaranteeing them. But when "20/20" returned to the store and told the manager that one of the guaranteed charms was not real gold, he was unconcerned. He blamed the problem on his supplier.

At another New York jewelry store across town, "20/20" found not only under-karated gold, but also an apparent ignorance of the law. "20/20" had purchased three pendants there, and not one tested as legal gold -- each was one karat shy of 10. The manager didn't think that was a problem, saying she couldn't test every piece of jewelry.

Gold -- Sharefin, 21:29:21 12/20/04 Mon

Gold Rises as Bundesbank Says It Won't Fulfill Gold Sales Quota

``There is no certainty that the Bundesbank will sell meaningful quantities of gold,'' John Reade, UBS AG's London- based precious metals analyst, said in an e-mail. ``Even if they say that other central banks will sell their quota, if the bank remains a non-seller then the arithmetic makes it look less likely that the full 2,500 tons will be sold. This will be positive for the gold market.''

Gold -- Sharefin, 21:27:21 12/20/04 Mon

Buba refuses to sell gold to help fill holes in German budget

FRANKFURT: The Bundesbank refused on yesterday to bow to pressure from the German government, which has been calling on the central bank to sell a large part of its gold reserves and use the proceeds to bring down Germany’s soaring public deficit.

Under a recently renewed gold agreement, signed with 14 other European central banks, the Bundesbank can sell up to 120 tonnes of gold from its gold reserves each year for the next five years.

With total gold reserves of 3,400 tonnes, the German central bank is the world’s second-biggest holder of gold after the US Federal Reserve.

But the Bundesbank announced in a statement on Monday that it would make only very limited use of that option and sell only eight tonnes of gold in 2004.

The gold would be sold to the German Finance Ministry for use in its regular gold coin minting programme.

~~~
“The Bundesbank’s gold reserves are part of our national wealth and have great symbolic value for the population,” central bank president Axel Weber said.

Periodic Ponzi Update PPU -- $hifty, 23:46:35 12/19/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,135.2 + Dow 10,649.92 = 12,785.12 divide by 2 = 6,392.56 Ponzi

Up 56.92 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Gold -- Sharefin, 20:52:22 12/16/04 Thu

The Scary Part Of The Gold Price Curve

Right now, and for the past few months, some BIG players who love the all you can eat smorgasbord of casino playthings we call the financial markets are losing their interest in playing the straight FOREX markets. These boys gobble up "goodies" in 10 million dollar chunks the same way you buy 10 more shares of Newmont. They have entered the COMEX sandbox. The COMEX gold market was almost always settled for dollars and not metal at expiration or exercise option. Many of the big boys who formerly settled in cash as winners on their side of the long bet are standing for delivery at the contract buy price. They don't necessarily have to take the metal off the floor. It can stay in COMEX vaults and be "theirs" after payment. They don't care about the "traditional" nature of the candy store they are in; they are using the COMEX to buy metal and take possession. It is a simple way to buy huge chunks of gold at essentially single price points without chasing the price higher. The whole pile has to be delivered to the winning (buying) longs at the single contract price agreed upon weeks or months earlier. Most of the physical purchase action used to occur on the LME. Not anymore. Do not underestimate the significance of this, which is good for those long gold and intelligently selected gold shares. Too much of this buying without "offsetting" paper shorts (which will eventually become ineffective for price suppression) will literally cause this market to IMPLODE. The COMEX will have to exploit all of the "force majeure" loopholes in their bylaws and contracts with rule and margin changes; maybe even halt or shut down this paper market. I assure you that this is very likely if standing for delivery increases and continues. When the dollar was worth something, taking cash dollars out at COMEX contract settlement was convenient, simple, routine and standard procedure. With US dollars becoming "more worthless" at the present, demanding and taking real gold at the agreed price is becoming the routine for some players. It simply CAN NOT continue for very long along the scary part of the gold price curve.

Crimex Silver Ounces..........Who Wants Em??? -- auspec, 18:15:57 12/13/04 Mon

I bet you all know someone who's eyes lit up while reading the following article:

http://www.silver-investor.com/dm_dec04_letsgetphysical.htm

Fair use Snippitright

Snip:

"I wish to take delivery of approximately 50 million ounces of silver bullion from the exchange over the next twelve-month period, which is less than 5 million ounces on a monthly basis. This is well under the current reporting requirements but just to be safe and to make certain the CFTC protects buyers of silver as well as sellers of silver I would like to know if my paying for and asking for what I purchased to be illegal in any way?"

"I have studied the silver market carefully these past several years and have noticed that only 50 million ounces or so are available in the registered category and therefore plan to stop my purchases at that amount."

"Finally, I wish to inform you that all required contracts for the above outlined procedure are already in place for the next delivery month, again if there is any problem with buying silver off the Comex in the manner outlined please bring it to my immediate attention."

END

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

Comments: First of all.......there are some 15 Million fewer silver ounces than when David Morgan wrote this letter.

Whoever recently stated that Crimex silver is NOT a physical market failed to mention that it represents itself as exactly a physical market.

If it IS an honest market then it can fully withstand this 50 M ounce delivery..............I have repeatedly advocated this very same thing...........ligitimately taking down physical silver.

My guess is that this is Midas' recent reference to a major silver event!!!!

Take your pick.................tell the world that Crimex cannot deliver substantial legal amounts of silver for purposes of profit or allow the takedown and take Crimex down with it. You choose CFTC.

Stroke of genius here by DM because he has taken the DIRECT approach.......................tell em exactly what and why he is intending. Either the 'ants' do it over time or an individual or several individuals do the deed {for purposes of PROFIT!!!!!!}

IS THIS MONTHLY 5 m OUNCE TAKEDOWN ALREADY IN PROGRESS??

Stay tuned...............

German Hyper Inflation -- $hifty, 22:26:43 12/12/04 Sun

PBS page

The link is to a PBS web page about the German hyper inflation. Its not too long a read and some of it sounds like the US today.

Snip "

Before World War I Germany was a prosperous country, with a gold-backed currency, expanding industry, and world leadership in optics, chemicals, and machinery. The German Mark, the British shilling, the French franc, and the Italian lira all had about equal value, and all were exchanged four or five to the dollar. That was in 1914. In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.

"My father was a lawyer," says Walter Levy, an internationally known German-born oil consultant in New York, "and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread." The Berlin publisher Leopold Ullstein wrote that an American visitor tipped their cook one dollar. The family convened, and it was decided that a trust fund should be set up in a Berlin bank with the cook as beneficiary, the bank to administer and invest the dollar.

In retrospect, you can trace the steps to hyperinflation, but some of the reasons remain cloudy. Germany abandoned the gold backing of its currency in 1914. The war was expected to be short, so it was financed by government borrowing, not by savings and taxation. In Germany prices doubled between 1914 and 1919.

End snip

Fair use for education and all that.

$hifty

Periodic Ponzi Update PPU -- $hifty, 22:17:20 12/12/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,128.07 + Dow 10,543.22 = 12,671.29 divide by 2 = 6,335.64 Ponzi

Down 34.44 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Periodic Ponzi Update PPU -- $hifty, 22:09:09 12/05/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,147.96 + Dow 10,592.21 = 12,740.17 divide by 2 = 6,370.085 Ponzi

Up 57.985 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Gold -- Sharefin, 19:52:18 12/05/04 Sun

Gold prices soaring, but Indians continue buying

New Delhi, Dec. 5 (PTI): Gold prices are soaring but this has failed to affect the buying spree in the Indian wedding season - in fact people are buying more, fearing a further hike in prices, those in the business say.

Contrary to popular belief that rising gold prices affect buying negatively, apprehensions of a further price hike have led to panic buying. This has resulted in higher sales as compared to the last few years, says Madan Mohan, Member, Karol Bagh Jewellers Association.

"People know that the gold rate in the domestic market is linked to international prices and beyond anybody's control here. So fearing a further hike, they are buying and there is no stopping," says Mohan.

"Moreover, there are certain market segments which are not affected by prices -- the rich and those buying for wedding purposes. However, those buying for festive reasons would still buy, though in less quantity," says G.S. Pillai, President, Gold Souk.

"Also those who have more disposable income at hand are buying now," he says adding "the Gold Souk is experiencing amazing footfalls of 2500 customers on average over weekends," says Pillai.

"These are serious buyers who come for buying purposes irrespective of the prices," he says.

Says Harman Dhillon from Tanishq, "November saw an increase in 40 per cent in sales over the same period last year."

Gold -- Sharefin, 19:45:57 12/05/04 Sun

The Greatest Bull Market of all Time is about to Commence

Since 2001, commodities, such as gold, silver, nickel, copper, lead, zinc, cotton, soya, cocoa etc have been in a bull market that mirrors the decline of the US$, in which they are all quoted on world markets. As the US$ continues its descent to unfathomed depths, the clamor for hard, commodity based assets accelerates. Furthermore, the Fed, now facing the chess game equivalent of "Zugzwang" (every move it now makes will lose), can do nothing other than stand by and watch the dollar decline continue until the point is reached where the US faces an "International Dollar Crisis". Then, like it or not, the Fed has to act and act resolutely. At this juncture, interest rates will skyrocket, bringing the great "Equities - Bonds - Real Estate Party" to its ultimate demise; i.e., a total train wreck that will make 1929 look like a children's tea party.

Before all this happens, the precious metals will have their revenge on the Fed's great FIAT experiment. Gold, in particular, will rise to US$ dollar prices that people would currently regard as completely insane. However, it is worth bearing in mind that in the 1930's, gold was fixed at US$16 an ounce. There are now US$185,000 in global circulation for every known ounce of gold on this planet. The rush for gold has already started, as the yellow metal enters Phase 2 of the greatest gold bull market the world has ever seen. In 2005, this rush is going to develop into an all-out stampede. Right now, all the world's precious metal mining companies put together have a market capitalization less than the Coca Cola company. This is going to change by entire orders of magnitude.

When the bond, equity and real estate markets finally collapse, as they will, the scramble for precious metals will become the greatest mankind has ever seen. It will be propelled by mans most basic instincts: fear and survival. Remember, no man or country has ever issued digital currency or paper currency in the unconstrained, uninhibited and totally uncontrolled manner in which the US has done. No country has ever amassed debt on such a mind boggling scale. No country has ever allowed its savings to collapse to such a pitiful level. The misallocation of resources, and dislocation of the economy is quite simply enormous and unsustainable. These vast distortions cannot continue much longer. Like the laws of pure science and economics, the correction is long past overdue as the fundamentals that drive society take over their natural control of events. Mr. Greenspan and his Federal Reserve are just mortal human beings, after all. There is one much mightier than he. Hubris has always been, and will always be, mankinds' ultimate undoing.

Gold -- Sharefin, 04:27:55 11/29/04 Mon

Brown's Gold Sale Cost the UK £1.5 billion

Gordon Brown has cost the British taxpayer almost
£1.5 billion by selling off half of Britain's bullion
reserves just before the gold price soared.

The Chancellor sold 395 tonnes of gold at an average
price of $275 an ounce between 1999 and 2001,
raising £2.3 billion for the Exchequer.

At the time, gold was at a 20-year market low. It has
now risen to more than $450 an ounce. Had he waited,
he would have raised a little over £3.77 billion, a
difference of more than £1.47 billion.

Gold -- Sharefin, 04:25:49 11/29/04 Mon

Gold is having a party, but investors aren't coming.

Gold closed at $449 an ounce Wednesday, up 76% from its February 2001 low
of $255. The yellow metal has gained 8% this year, vs. 6.3% for the
Standard & Poor's 500-stock index. And gold funds, which invest mainly in
gold-mining stocks, have been the top-performing mutual fund category the
past five years, jumping 154%, vs. 11% for the average stock fund.

But investors have yawned.

. The U.S. Mint has sold 465,500 ounces of gold Eagle bullion coins this
year, vs. 484,500 ounces last year.

. Investors have put just $396 million into gold mutual funds this year,
less than 1% of the $139 billion that has poured into stock funds. New
money into U.S. Global World Precious Metals, the top-performing stock
mutual fund the past three years, has been "modest," says Frank Holmes, the
fund's manager.

. Subscriptions to Gold Newsletter, among the oldest gold advisory
publications, are about where they've been for 10 years, editor Brien
Lundin says.

Gold prices have been pushed up by the dramatic fall in the dollar.
Investors often view gold as a currency of last resort, a commodity that
retains its worth even when paper money falls in value. The dollar hit a
new low against the euro Wednesday, trading at $1.32 per euro.

But investors have been more interested in buying foreign currencies than
gold. International income funds, which invest in foreign bonds, have raked
in an estimated $2.4 billion this year. "We haven't seen broad public
interest in gold yet," Lundin says.

Gold -- Sharefin, 04:25:12 11/29/04 Mon

Gold bars welcomed by Chinese consumers

With more cash in their wallets, many Chinese are looking for ways to diversify their investments to guarantee the security of assets and to even seek a profit.

For many, gold seems to be the favored choice. The second batch of 2005 New Years Celebration Gold Bars have just gone on sale in Beijing and being warmly received by potential consumers.

Ranging from 50 to 1,000 grams, the gold bars are selling at 128 Yuan per gram, an increase of 3 Yuan compared with the first batch of bars that sold out quickly just a week ago.
~~~
The bullish price reflects a strong market demand. The enthusiastic public response is obviously very good news for gold producers. One industry organization forecasts that the gold sector will see a big rise in profits for the year.

According to statistics of the China Gold Association, in the first three quarters of 2004, profits from its 300 member gold producers totaled more than 2 billion Yuan, or US$245 million, a jump of 35 percent year on year.

Gold output amounted to some 149 tons during this period, an increase of 7 percent. Total gold demand in 2004 is expected to rise to 220 tons from 207 last years.

Gold -- Sharefin, 04:22:32 11/29/04 Mon

Gold bars welcomed by Chinese consumers

With more cash in their wallets, many Chinese are looking for ways to diversify their investments to guarantee the security of assets and to even seek a profit.

For many, gold seems to be the favored choice. The second batch of 2005 New Years Celebration Gold Bars have just gone on sale in Beijing and being warmly received by potential consumers.

Ranging from 50 to 1,000 grams, the gold bars are selling at 128 Yuan per gram, an increase of 3 Yuan compared with the first batch of bars that sold out quickly just a week ago.
~~~
The bullish price reflects a strong market demand. The enthusiastic public response is obviously very good news for gold producers. One industry organization forecasts that the gold sector will see a big rise in profits for the year.

According to statistics of the China Gold Association, in the first three quarters of 2004, profits from its 300 member gold producers totaled more than 2 billion Yuan, or US$245 million, a jump of 35 percent year on year.

Gold output amounted to some 149 tons during this period, an increase of 7 percent. Total gold demand in 2004 is expected to rise to 220 tons from 207 last years.

Gold -- Sharefin, 04:16:11 11/29/04 Mon

Solid Gold Reasons to Own Gold

Gold -- Sharefin, 04:12:45 11/29/04 Mon

Gold demand growth outstrips production

The pressure is on for physical gold. Demand
is growing and production is falling.
~~~
The figures, compiled for the World Gold Council by GFMS Ltd, imply
that consumer demand rose in most countries around the world,
resulting in an overall 5.7 percent tonnage increase in total demand
(defined as jewellery, retail investment, industrial and dental
offtake). The increase over the first nine months of the year is of
6.5 percent over the equivalent period of 2003. In dollar terms,
total demand in the third quarter was almost 17 percent higher than
in the third quarter of 2003. Supply contracted sharply, dropping by
22.4 percent to 828t, against 1066t in the third quarter of last
year.India, the world's largest gold market, registered an increase
in demand of 16 percent over Q3 2003.

Silver -- Sharefin, 04:04:03 11/29/04 Mon

Look for silver lining in gold ETF success

Perhaps, no one watched the events of the past week more closely than the "silver barons."

As streetTRACKS Gold Trust reaped $1.3 billion in its first three days of trading, and set a volume record for derivatives on its opening day, one can bet the minds of these pure silver company CEOs were chomping at the bit to unveil next generation of commodity-backed ETFs.

The silver ETF is definitely coming, and may even make its debut early next year. Silver producers are fairly tight-lipped at this point because of a "quiet period" as the proposal is being drafted to submit to the SEC. One thing is for certain, however, the first U.S. silver-ETF is not going to be a clone of the World Gold Council gold ETF model.

Gold -- Sharefin, 03:55:51 11/29/04 Mon

Gold heading for $1,000?

Even a year ago, it was unthinkable that the world’s most powerful central banker would trash his country’s own currency. Yet last Friday, Alan Greenspan, chairman of the Federal Reserve, the US central bank, said that, given the size of the US current-account deficit, “a diminished appetite for adding to dollar balances must occur at some point.”

However, Greenspan was merely confirming knowledge widespread among specialised investors. His words have re-ignited tarnished gold bugs everywhere, especially those who have been calling – for nearly 25 years – for gold to again reach $1,000 an ounce. For the meantime, however, it appears that gold at $500 an ounce would be like taking candy from kids.

Gold -- Sharefin, 03:49:32 11/29/04 Mon

Gold-backed ETF attracts $419 mln after three days

NEW YORK, Nov 23 (Reuters) - A recently launched gold-backed exchange-traded fund attracted $419 million in its first three days of trading, bringing its total assets to $1.3 billion, a research company said on Tuesday.
The ETF, called streetTRACKS Gold Shares (GLD.N: Quote, Profile, Research) , attracted $589 million last Thursday, the first day it was offered to the public, and an additional $241 million on Friday, said Santa Rosa, California-based TrimTabs Investment Research.

Though the company said investment flows for the security turned negative on Monday, with outflows of $411 million, its success guarantees the creation of more commodity-based ETFs, said Carl Wittnebert, director of research at TrimTabs.

"There's been nothing like it in the history of ETFs," he said in a statement.

Gold -- Sharefin, 03:47:37 11/29/04 Mon

Barrick Says Buoyant Gold Doesn't Deter Hedge Cuts

VANCOUVER, British Columbia (Reuters) - Today's higher gold prices won't stop Barrick Gold Corp. from reducing its hedge book, the world's third-biggest gold miner said on Tuesday, adding that it remains "very committed" to bringing down its bulky forward sales position.

"A higher gold price does not preclude us from reducing the position. As prices are high we can blend lower-priced contracts (with sales at spot prices) and still experience earnings and cash flow growth," said Jamie Sokalsky, Barrick's chief financial officer.

He declined to give a hedge reduction target for 2005.

To protect itself in times of lower gold prices, Barrick, as did many other gold producers during the 1990s, sold millions of ounces of unmined gold at preset prices, leaving it with the biggest hedge book in the industry.

Now that gold prices have leapt by 80 percent since early 2001, many of these contracted sales are at below-market prices. This has angered investors and led Barrick to pledge to whittle down the thick pile of contracts, even if it means selling its gold at weaker-than-market levels.
~~~

Fiat -- Sharefin, 03:44:30 11/29/04 Mon

On State Street: Economic 'Armageddon' predicted

Stephen Roach, the chief economist at investment
banking giant Morgan Stanley, has a public reputation
for being bearish.

But you should hear what he's saying in private.

Roach met select groups of fund managers downtown
last week, including a group at Fidelity. His
prediction: America has no better than a 10 percent
chance of avoiding economic "armageddon."

Press were not allowed into the meetings. But the
Herald has obtained a copy of Roach's presentation.
A stunned source who was at one meeting said,
"It struck me how extreme he was -- much more, it
seemed to me, than in public."

Roach sees a 30 percent chance of a slump soon
and a 60 percent chance that "we'll muddle through
for a while and delay the eventual armageddon."
~~~
In a nutshell, Roach's argument is that America's
record trade deficit means the dollar will keep falling.
To keep foreigners buying T-bills and prevent a
resulting rise in inflation, Federal Reserve Chairman
Alan Greenspan will be forced to raise interest rates
further and faster than he wants.

The result: U.S. consumers, who are in debt up to
their eyeballs, will get pounded.

Gold -- Sharefin, 03:42:10 11/29/04 Mon

Activists attempt to strip gold of its lustre

Campaigns such as No Dirty Gold drill home the social and environmental costs of mining the precious metal
~~~
That indifference changed when Ms. Glynn, now 26 and a graduate student in environmental science at Newfoundland's Memorial University, began to talk to Indonesian villagers about the impact of gold mining on their communities. During a second, 16-month stint with CUSO (a Canadian international development organization) in 2001 and 2002, she visited Buyat Bay in north Sulawesi. There, residents claimed that tailings from Newmont Gold Corp.'s Minahasa mine had poisoned fish, contaminated water with mercury and arsenic, and precipitated a rash of medical problems.

Those allegations have since become a colossal headache for Denver-based Newmont, the world's biggest gold producer. Backed by studies conducted by the World Health Organization and Japan's Minamata Institute, it insists that its operations have not polluted the bay. But the claims persist and the argument has long since ceased to be simply a local issue.

In September, five Newmont employees were detained by Indonesian police; they are now on "city detention," awaiting the results of a government probe into the pollution claims. A $543-million (U.S.) lawsuit has been filed by villagers against the company. Fishermen in Buyat Bay complain they can no longer sell their fish. And the long-running saga has raised questions about Indonesia's investment climate and regulatory regime.

Gold -- Sharefin, 03:11:09 11/29/04 Mon

The global bull run in gold

At the end of November last year, gold prices in India had soared past Rs 6,000 for 10 grams. At that time, I had quoted Richard Russell, an octogenarian international forecaster who wrote, “There are a few times in an investors life when the opportunity for huge profits lies ahead. Such periods in the stockmarket occurred in 1932, 1942, 1949, 1974 and 1980-82. People who loaded up with common stocks at those times and held those stocks made fortunes. I believe another such a time is now. And I’m referring to the current young bull market in gold.” Russell said in his newsletter, “I believe gold below and even somewhat above $400 an ounce is dirt cheap.” He insisted that it is the cheapest thing going over a five-year period.
The reason: The US government, states, cities, corporations and individuals are currently loaded with $32 trillion in debt. On top of that, the US government has additional unfunded liabilities of around $44 trillion, all of which will have to financed. One year later, a worsened US situation, the continued war in Iraq and steep oil prices have seen a whole phalanx of economists, central bankers and policymakers saying the same thing even more emphatically.

At a time when the world has begun to question the dollar standard introduced in 1971 and is actively discussing a return to the gold standard, we as holders of nearly 10% of the world’s gold need to communicate this debate to a nation full of gold devotees. Especially since the production and supply of gold in 2003 was lower than the previous year, while the price of the yellow metal and demand for it rose.

Listen to some voices reported by The Daily Reckoning (a highly regarded investment newsletter) in the last week: “I have not come to praise the dollar, but to bury it,” James Grant proclaimed to the attendees of last week’s New Orleans Investment Conference. “I am bearish on the dollar and bullish on the thing that glints in the sunlight, is recoverable at five parts per billion from the earth’s crust and has no central banker,” he said, making a case for gold ownership and against the dollar.

Gold -- Sharefin, 03:07:32 11/29/04 Mon

Bank of France will sell 500-600 tonnes of gold over five years

French Finance Minister Nicolas Sarkozy and Bank
of France Governor Christian Noyer have finalized
discussions on the sale of a portion of France's
gold reserves.

Noyer confirmed his intention to sell 500 to 600
tonnes of the 3,000 tons of gold kept in vaults
underneath the Bank of France headquarters in
Paris over the next five years, the Finance
Ministry said in a statement Friday.

The sale will be accompanied by an increase in
cash reserves. Noyer will determine the rate at
which the gold is sold, paying particular
attention to the precious metal's market price.

Gold -- Sharefin, 02:18:47 11/29/04 Mon

US investors catch gold ETF fever

U.S. investors got a raging case of gold fever with the debut of the first domestic exchange-traded fund for gold Thursday.

The StreetTRACKS Gold Trust (GLD) began its first day of trading on a high note as $550 million were put into the fund on the NYSE Thursday. Meanwhile, gold bullion peaked at $445.90 an ounce, but dropped to $439.65 while spot gold ended the day at $441.25 an ounce.

GLD opened trading at $44.43. By the end of the market day, the shares closed down to $44.38 on a volume of 5,992,000 shares. Blocks of 100,000 shares are redeemable into gold bullion. Shares are priced at about 10% of the price of a gold ounce.

Boston-based StreetTRACKS is authorized to issue as many as 120 million shares or $4.5 billion in gold-backed equity. Sponsored by a subsidiary of the World Gold Council, the shares are designed to track the price of gold and trade like a continuously offered security. The shares cannot be created without the appropriate amount of gold first being delivered to the trustee, the Bank of New York. HSBC's London vaults serve as the actual custodian of the trust's gold bullion. The trust creates and redeems shares only in baskets of 100,000 shares. UBS Securities, LLC in NYC is the purchaser of the offering of 2.3 million underwritten shares. The World Gold Council's members have provided funds to cover ordinary operating expenses from 2004-2006. The Gold Council's World Gold Trust Services division co-created the trust.

StreetTRACKS is the brand name of several ETFs managed by State
Street Global Advisors, the marketing agent for the fund. The company has established a website for the new offering
www.streettracksgoldshares.com and offers a toll free phone number at 866-320-4053 for information.

The offering of the gold ETF shares is intended to overcome the logistics of buying, storing, and insuring gold. This has been a barrier for some institutional and retail investors, including pension funds, which have not been able to participate in the gold market. These investors may now buy gold-backed shares from the trust.

Analysts say the successful launch of the gold ETF could open the door for other commodity-linked ETFs. For instance, silver producers have been pushing a silver-backed ETF.

Gold -- Sharefin, 02:10:17 11/29/04 Mon

Dubai stands out on gold and jewellery map

The high volatility of gold prices in the last two years has not weakened consumer spirit in the Dubai gold market. It keeps growing here.

The chief executive of Damas Jewellery and chairman of the Dubai Gold and Jewellery Group (DGJG), Tawhid Abdullah told Gulf News that Diwali gold sales in Dubai this year have been 23 per cent higher than last year's.

Gold -- Sharefin, 02:06:21 11/29/04 Mon

Gold Hedges Being Thrown Overboard Apace

It was widely expected that gold dehedging would begin to slow after Newmont [NEM] closed out most of its contracts in 2003. Rather, dehedging has remained steady at roughly 400 tonnes per year for the last three years according to research released this week by Mitsui Global Precious Metals, Halliburton Mineral Services and Virtual Metals.

The firms regard “Hedge Impact” as the most meaningful measure of hedging activity and calculate that the global “book” fell 4.3 million ounces to 59.7 million ounces by the end of the third quarter. That is two-fifths lower than the hedging peak that occurred in the third quarter of 2001.
~~~~
Measured in committed ounces the global book fell was 4.1 million ounces lighter at to 62.8 million ounces, or 48 million ounces short of the peak in the second quarter of 2001.
~~~
Whilst market-to-market valuations have so far not proved problematic, the violent deterioration in the numbers does not portend well.

Despite the 7% decrease in Hedge Impact, and a mere 7% increase in the quarterly average gold price, the gross mark-to-market valuation tumbled more than one-third to negative $5.1 billion from negative $3.1 billion in the previous quarter.

Of 54 companies that hedge, only seven still enjoy a positive mark-to-market. Three have a negative mark-to-market valuation larger than the value of their annual production.

Periodic Ponzi Update PPU -- $hifty, 21:22:12 11/28/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,101.97 + Dow 10,522.23 = 12,624.20 divide by 2 = 6,312.10 Ponzi

Up 48.33 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Periodic Ponzi Update PPU -- $hifty, 22:58:19 11/21/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,070.63 + Dow 10,456.91 = 12,527.54 divide by 2 = 6,263.77 Ponzi

Down 48.40 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Periodic Ponzi Update PPU -- $hifty, 21:23:29 11/14/04 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,085.34 + Dow 10,539.01= 12,624.35 divide by 2 = 6,312.17 Ponzi

Up 98.93 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty

Gold -- Sharefin, 20:52:55 11/13/04 Sat

Gold rush: ETF expected to launch with metal hitting highs

Investors have long been denied a cost-efficient way to invest in gold bullion without actually buying the metal and stashing it away.

At the same time, many institutional investors and mutual funds are barred from purchasing gold or other precious metals directly.

However, that will likely soon change as a gold bullion-backed exchange-traded fund is expected to launch on the New York Stock Exchange under the ticker symbol "GLD" as soon as next week.
~~~
Individual investors wanting to invest directly in gold bullion have traditionally had to pay the high costs associated with transporting, insuring, and safely storing it.

Although traditional open-end mutual funds that invest in gold-mining stocks exist, there is no convenient or efficient way to invest directly in gold bullion, aside from perhaps buying gold coins and keeping them in a safe-deposit box at your local bank.

"Gold has lacked a sensible product that ordinary investors can buy," Norman said. "Yes, you can buy equity in the underlying mining companies, but it's been difficult to get access to the gold market."

Since mining companies are affected by factors not related to the gold market, they may not provide as good a hedge against inflation and market shocks, which is one of the main benefits of owning bullion.

Still, existing precious metals and mining funds have posted sparkling returns of late in the bull market for gold.
~~~
Many observers expect gold ETFs, which would mark the first time investors could buy the precious metal on an exchange like a stock, to be a runaway success.

"The gold ETFs could bring a new raft of institutional and possibly retail investors into the gold market," Norman said.

"I would be shocked if they did not garner $1 billion in assets in the next year or so, and firmly believe they have the potential to do much better than that," said Jim Wiandt, editor of the Journal of Indexes.

Gold has long been a stalwart hedge against falling markets, and gold ETFs would also allow investors to go short, he added.

With largely-untapped markets soon gaining access to gold with the new ETFs, some analysts are expecting gold to continue its climb.

"Gold is definitely poised, and we think we'll see $450 before Christmas," Norman said. "This bull run has legs, and we've yet to see the best."

Gold -- Sharefin, 09:14:48 11/11/04 Thu

Gold Supply Under Pressure

Merrill Lynch Investment Managers have a favorable outlook for gold, underpinned primarily by emerging pressures on supply, a leading member of the firm's London-based natural resources team said late Tuesday.

Amid "relatively static" demand, falling mine output over the coming years and the potential for a reduction in European central bank sales stand to prolong the rally in U.S. dollar gold prices, Merrill gold fund manager Evy Hambro explained during a visit to Sydney.

"We are definitely in a positive environment...and that's going to remain until the fundamentals deteriorate, and we don't see that changing," Hambro said on the sidelines of a presentation to financial advisers.
~~~
Strong currencies in many of the leading gold-producing countries are actually forcing production cuts, despite the high U.S. dollar gold price, Hambro explained.

"We've got a situation where the mined production of gold is going to be declining for the foreseeable future," he said.

According to London-based precious metals market consultant GFMS Ltd., global mine production in 2003 remained flat about 2,590 tons.

While there are pockets of new supply emerging in countries like Russia and China, Hambro said global output will inevitably suffer from a lack of exploration.

"One of the big changes in the mining sector as a whole has been a significant cut (in) exploration expenditure, which is obviously reducing the probability of finding new projects to exploit," he explained.

Thus, gold reserves are increasingly being mined at a faster rate than they are being replaced, Hambro said.

"For example, (Newmont Mining Corp.) has to find seven million ounces of gold a year just to stand still; in order to grow, they've got to (increase reserves) more than that," he said of the world's largest producer.

The same is true of other top producers, such as South Africa's AngloGold Ashanti Ltd. (AU), Hambro said.

"You don't find seven million ounce gold mines every day," he said.

Prospect Of Falling Central Bank Sales "Very, Very Exciting"

A less certain, but nonetheles