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Fiat -- sharefin, 23:19:48 10/06/05 Thu

Signals of the End of the Dollar Standard

I am an economist who worked for 25 years in large investment companies in South Africa. I “retired” to the UK a few years ago. For most of my career I lobbied for policies such as money supply targets and later inflation targets that were (implicitly) intended to substitute the role of gold as an independent anchor for the monetary system. I was never an advocate of any form of gold standard, unlike the current Fed Chairman, now ironically testing the fiat money system to destruction.

However, in recent years the scales have fallen from my eyes. As Voltaire said in 1729 “paper money eventually goes down to its intrinsic value – zero.” Every fiat paper currency before or since has confirmed to this prediction. A fiat paper currency that is also the global reserve currency becomes this problem writ large. A US Treasury official of old - Sam Cross - put it this way: “if you postulate a system that depends on one country always following the right policies, you will find that sooner or later no such country exists. The system is eventually going to break down”. In my view the Dollar Standard system is irretrievably breaking down, as signaled by four recent developments described below:
~~~
4. The gold price is breaking out in all key currencies. Not all the world’s investors (or central bankers!) are blind to the scary developments sketched above. Gold in dollars has definitively been in a bull market for some time, but in recent weeks gold has decisively broken out all key currencies including the Euro, Yen, Swiss Franc and Sterling. Markets are recognizing that the failure of the Dollar Standard is one not only of US economic management but one inherent in the fiat money system itself. In the long term they may demand gold’s return as an anchor to the global monetary system.

The flight from paper assets (and especially dollars) towards hard assets is now underway in earnest. There is still time - this is a multi-year trend - for investors to switch from devaluing dollars to rising gold. Those ahead of the herd are moving but the herd itself is yet to stir.




Gold -- sharefin, 23:18:12 10/06/05 Thu

Dear Friend of GATA and Gold:

The economist Robert A. Mundell, inventor of the euro,
got top billing Thursday evening at the fall meeting of
the Committee for Monetary Research and Education
in New York but it was Murray Pollitt of Toronto stock
brokerage house Pollitt & Co., president of River Gold
Mines Ltd. in Canada and veteran engineer and gold
share trader, who stole the show.

Pollitt gave the CMRE crowd of about 100 a review of
the gold market that was virtually identical to GATA's.
His points:

-- Central banks long have been trying to regulate the
gold price and are doing it now.

-- He has it on excellent authority that the
International Monetary Fund recently joined central
banks in leasing gold.

-- He also has it on excellent authority that the
Long-Term Capital Management hedge fund, which
collapsed in 1998, was heavily short gold.

-- If the gold price had kept up with the price of oil
and copper and not instead been suppressed by
central banks, it would have reached $800 by now.

-- The gold price suppression scheme is falling apart
RIGHT NOW.

-- Gold's rise this time will be far more dramatic
than its rise in the late 1970s, for back then there
were no gold short positions and no gold derivatives.
Those short positions and derivatives will make
gold's rise many times more explosive this time.

-- The gold price suppression scheme of the central
banks is "a big con game" to persuade people to
hang on to government currencies. It will end in a
"wild ride" for gold and commodities.

-- Even with the rising price of gold, rising fuel
prices lately have been ruining open-pit gold miners
and thus sharply reducing worldwide gold production.
(Of course this decline in production forces the
central banks to cough up more gold from their
reserves to contain the price.)




Gold -- sharefin, 23:16:24 10/06/05 Thu

Argentina Explains: Why Gold?

Recent comments by the Central Bank of Argentina’s head of operations Juan Basco suggesting the country along with other South American nations may be looking at increasing their gold holdings have contributed to renewed positive investor sentiment towards gold.

More important for the longer-term outlook for the gold market, however, is why Argentina and other nations have reverted to considering such moves. At a recent speech hosted by GFMS, a metals industry consulting firm, Argentina’s Basco outlined what had changed in the marketplace to give the country’s central bankers the option of again investing in gold.
~~~
Basco also believes holding gold as an investment reduces the volatility of international reserves in a country’s portfolio as it provides diversification.

This is of growing importance for Argentina, as the country now holds 30% of its international reserves in non-US dollar assets.

Basco suggests external shocks such as terrorism are likely to increase volatility in financial markets, thus assets such as gold that reduce volatility become increasingly attractive.

In summary, Argentina is considering increasing its gold holdings and with other South American nations experiencing similar economic transformations, Basco’s suggestion they also may lift their investment in gold has now become a genuine realistic scenario.




Fiat -- sharefin, 23:47:57 09/29/05 Thu

THE WIZARD OF BUBBLELAND

Central banks in desperate times would look to hyper-inflation to "provide what essentially amounts to catastrophic financial insurance coverage", as Greenspan suggested in a November 19, 2002, address on "International Financial Risk Management" to the Council on Foreign Relations (CFR) in Washington. Greenspan noted that since February 2000, the draining impact of a loss of $8 trillion of stock-market wealth (80% of GDP), and of the financial losses associated with September 11, 2001, has had a highly destabilizing effect on the aggregate debt-equity ratio in the US financial system, and has pushed the ratio below levels conventionally required for sound finance. This private debt in 2000 of $22 trillion was backed by $8 trillion less equity, an amount in excess of one-third of the debt. Greenspan attributed the system's ability to sustain such a sudden rise of debt-to-equity ratio to debt securitization and the hedging effect of financial derivatives, which transfer risk throughout the entire system. "Obviously, this market is still too new to have been tested in a widespread down-cycle for credit," Greenspan allowed.

Total debt in the US economy now runs to $40 trillion as of March 2005, of which $31 trillion is private-sector debt, 66% ($21 trillion) of which has been added since 1990 under Greenspan's watch. That is 20% of 2004 GDP. This figure is consistent with the fact that it now takes 25% more money in the money supply to support a given GDP than 25 years ago.
~~~~
Greenspan acknowledged that derivatives, by construction, are highly leveraged, a condition that is both a large benefit and an oversized Achilles' heel. It appeared that the benefit had been reaped in the past decade, leading to a wishful declaration of the end of the business cycle. Now we are faced with the oversized Achilles' heel, with "the possibility of a chain reaction, a cascading sequence of defaults that will culminate in financial implosion if it proceeds unchecked". According to Greenspan, "only a central bank, with its unlimited power to create money, can with a high probability thwart such a process before it becomes destructive. Hence central banks have, of necessity, been drawn into becoming lenders of last resort."

Greenspan asserted that such "catastrophic financial insurance coverage" by the central bank should be reserved for only the rarest of occasions to avoid moral hazard. He observed correctly that in competitive financial markets, the greater the leverage, the higher must be the rate of return on the invested capital before adjustment for higher risk. Yet there is no evidence that higher risk in financial manipulation leads to higher return for investment in the real economy, as recent defaults by Enron, Global Crossing, WorldCom, Tyco and Conseco have shown. Higher risks in finance engineering merely provide higher returns from speculation temporarily, until the day of reckoning, at which point the high returns can suddenly turn in equally high losses.
~~~
Enron lost 80% of its market capitalization value in 12 months, wiping out $50 billion of wealth (share prices dropped from $89.63 on September18, 2000, to $15.4 on October 26, 2001), finally and suddenly attracting much attention in the media. It faced serious cash-flow problems not from the fall of energy prices alone, but from its role as a major trader of energy futures, leading to a $618 million third-quarter loss, not to mention a Securities and Exchange Commission investigation on creative accounting and financial reporting that resulted in a $1.2 billion equity dilution.

If Enron were to go under, and all the smart money was betting on it if market forces were allowed to govern, the counterparty risk fallout threatened to dwarf the LTCM crisis. Enron received $250 million from Congress's stimulative package that failed to save it from its multibillion-dollar debt exposure and trading losses. Enron then bought back $2 billion of its commercial papers, depleting its $3.3 billion bank credit, because commercial papers were traded in the open credit market and Enron might not have been able to roll them over. Its bank loans were only tradable in the private debt market. Corporate credit lines were generally not expected to be drawn down without signaling to the market that the borrower was in serious trouble. The higher resultant cost of higher interest payments from this desperate move only added to Enron's cash-flow problem. The press reported that the company was negotiating with its banks for $2 billion in new credit. Enron's connection to Texas and the Bush political network was well known. Enron was hoping to be bailed out by the "too big to fail" principle, until criminal indictments foreclosed the option. No doubt there was criminality in the Enron affair, but whether the criminality was the cause of its collapse or merely convenient cover for a flawed market is another question (see Capitalism's bad apples: It's the barrel that's rotten, August 1, '02).

The equity markets since the September 11 terrorist attacks are no longer free markets. They are now a scam operated in the name of patriotism to transfer through managed volatility by the Plunge Prevention Team, of which the Fed is a charter member, the losses that have already occurred but are yet hidden to unsuspecting small investors who were too patriotic to sell immediately. The new financial normalcy is a totally new system. The United States has entered a new phase of state capitalism, with the government deciding who survives and who fails. The US system is being attacked by both terrorism and the "war on terrorism".




Gold -- Sharefin, 22:38:40 09/27/05 Tue

Gold & Silver Wallpaper Charts

Lots of new charts lately & why I've not been posting much - too busy coding charts.(:-)))




Gold -- Sharefin, 22:37:08 09/27/05 Tue

Gold analysts see "petrodollars" fueling gains

Much of the strong demand driving a recent rally in gold prices has been powered by purchases in "petrodollars" from oil-rich countries, analysts at the Denver Gold Forum said this week.

Indeed, fresh diversification into gold and investment from the Middle East, in addition to recent robust Asian demand for the metal, should continue lifting prices, perhaps to $500 an ounce by year-end, the market watchers said.
~~~
"There are a lot of countries in the Middle East, and China, that want to have 1 to 2 percent of their U.S. dollars in a program to own gold," he said. "So, with oil at $69 or $70 a barrel, they have made a ton of money and they are diversifying."
~~~
"(For OPEC countries), the dollar is not exactly the most attractive currency and not just for economic reasons," he said, adding that this was bullish for gold in the precious metal's role as the "neutral" currency.

Murenbeeld noted that OPEC current account balances are in huge surplus again on the back of higher oil prices. "Last time OPEC had significant surplus "petrodollars", gold spiked to an all-time high in 1980" at around $850 an ounce, he said.

Murenbeeld said OPEC would need to buy some 50 million ounces of gold to bring its gold reserves up to 15 percent of its holdings, a level last seen in 1980.

"This would not appear to be a hardship now that OPEC's foreign exchange reserves exceed $200 billion," he said.




Fiat -- Sharefin, 21:47:53 09/10/05 Sat

Underestimating the Loss of a City

While the damage to the port itself may be less than originally thought, the lack of a city to support it may turn out to be the more enduring problem. In Friedman’s words, “The displacement of the population is the crisis New Orleans faces. It is also a national crisis, because the largest port in the United States cannot function without a city around it. The physical and business processes cannot occur in a ghost town, and right now, that is what New Orleans is. It is not about facilities, and it is not about the oil. It is about the loss of a city’s population and the paralysis of the largest port in the United States…the United States has lost not only its biggest port complex, but also the utility of its river transportation system—the foundation of the entire American transport system. There are some substitutes, but none with sufficient capacity to solve the problem.”




Gold -- Sharefin, 13:55:09 09/08/05 Thu

Gold price soars to year high

Renewed fund interest kicked gold prices out of a tight $3 range that had held since the start of the week, taking the precious metal to its highest since early December 2004, traders said.

Euro-denominated gold rallied above €360 to a near-three-week high.

In afternoon trade, spot gold was at $447.80/448.50 a troy ounce, up from late trading levels in New York on Wednesday of $444.80/445.50. It peaked at $449.40, the highest so far this year.

The latest rally came despite a broadly steady dollar, which could signal further strength ahead for the metal.

Traders said one fund that had been an active player since mid-August bought gold as the euro picked up, triggering automatic buy signals that attracted more fund buying.
~~~
Gold has rallied as fund investors have bought in the immediate aftermath of the hurricane which caused oil prices to hit a new record high and the dollar to slide.

Good physical demand into recent price dips has also bolstered the market.

A supportive report was released on Wednesday by the World Gold Council, an industry funded body, saying global gold demand rose 14 percent year-on-year in the second quarter of 2005, bolstered by purchases from the jewellery sector.

Although the market usually takes its lead more from macro-economic issues, traders do monitor supply and demand.

"In an environment where mine supply is broadly static, central bank sales effectively constrained and scrap supply declining, strong physical demand is genuinely important," John Reade, analyst at UBS Investment Bank, said in a note.

Reade added that strong demand was the reason why gold held above $400 during the two large speculative liquidations earlier in the year.
~~~
One trader attributed the rise to physical demand, notably from India.




Charts -- Sharefin, 13:50:18 09/08/05 Thu

Sorry for being slack in posting of late but have been busy on charts.

Some of the new additions of late have been the COTs analyser:
COTs ANALYSER

And the Barron's Confidence Index:
Barron's Confidence Index

And now the BGMI - Barron's Gold Mining Index:
BGMI - Barron's Gold Mining Index

Lots more charts to develop so will be busy for a while.

Sharefin




Gold -- Sharefin, 07:15:20 08/28/05 Sun

Australia could lose gold producer title

Australia's reputation as the world's second largest gold producer is under threat after total gold production fell in the last year, and the future looks uncertain.

Gold output in 2004/05 dropped by eight tonnes to 265 tonnes, with the June quarter, the worst of the year according to Melbourne-based mining consultants Surbiton Associates.

"It's a pretty dismal result," Surbiton managing director Dr Sandra Close said.

"Despite increased production from start-ups, many operations produced less gold this (June) quarter."




Gold -- Sharefin, 03:09:54 08/15/05 Mon

Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
at Gold Rush 21
Dawson City, Yukon Territory, Canada
Tuesday, August 8, 2005

What are we to do here at Gold Rush 21?

We're here to show you that, far from being a quaint antique, gold
remains central to the world economic system. That is why the gold
coin I hold here, an ordinary British sovereign from about 80 years
ago, is packed into the survival kits of U.S. military pilots --
because at all time and in all circumstances gold is money.

We're also here to show you that, far from being a speculation that
is interesting at best and paranoid at worst, the suppression of the
gold price by Western central banks is a matter of public record.

How does the Gold Anti-Trust Action Committee know that central
banks are working with bullion banks and other financial houses to
suppress the price of gold?

We know because of the painstaking research of our consultants --
Reg Howe, James Turk, Andrew Hepburn, Mike Bolser, and Bob Landis.
and others. They have gone through the official reports and the
footnotes of the Bank for International Settlements, the
International Monetary Fund, the Federal Reserve, the U.S. Treasury
Department, central banks and government agencies, mining companies,
and financial houses, and have amassed enormous evidence.

But that's the complicated stuff, and we also know for a very simple
reason.

We know that the central banks and their intermediaries are working
together to suppress the price of gold because time and again they
have TOLD us so.

After all, what was the Washington Agreement of September 1999 if
not a proclamation that the 15 participating central banks were
colluding to regulate the gold price?

Of course in the Washington Agreement the central banks affected to
be SUPPORTING the gold price; they pledged to limit their gold sales
to 400 tonnes per year for five years -- lest, they said, the gold
market be flooded with metal and the gold price collapse, taking
with it the economies of gold-producing countries.

Of course GATA has put a different construction on the Washington
Agreement. We consider it the device by which central bank gold
LOANS are written off as SALES at discounted prices, rather than be
called back and cause a short squeeze in gold.

That is, far from supporting the gold price, the Washington
Agreement was how the central banks kept gold from rising and
prevented the bankruptcy of the financial houses that, at the
invitation of the central banks, eagerly joined the gold carry trade
of the 1990s. In that carry trade gold was, in effect, loaned by the
central banks for next to nothing and sold by the financial houses
to depress its price, strengthen the U.S. dollar, reduce interest
rates, and inflate the price of paper assets, which were purchased
with the proceeds of the gold sales.

But no matter how you want to construe it, the Washington Agreement
was admittedly a co-ordinated action by the central banks to
regulate the gold price. That central banks get together to discuss
and unify their policy toward gold is a matter of ordinary public
record. Anyone who really believes that this collusion is always
benign, in the public interest, and without ulterior motives
shouldn't go even grocery shopping alone.

The Washington Agreement wasn't the first coordinated intervention
of the central banks in regard to gold. It was at least the second
and probably much more belated than that. How do we know?

Because Federal Reserve Chairman Alan Greenspan told us. In fact, he
told Congress too. As usual, no one in the financial press seems to
have been paying attention.

But on July 24, 1998, Greenspan told the House Banking Committee:
"Central banks stand ready to lease gold in increasing quantities
should the price rise." He repeated that statement a few days later
to the Senate Agriculture Committee.

Of course, like the central banks that participated in the
Washington Agreement, Greenspan was disguising the true purposes of
the policy he described. He was explaining why he didn't think that
the derivatives market needed federal regulation, and suggested that
central bank gold leasing was a safeguard against a private corner
on the gold market, a safeguard that made derivatives regulation
unnecessary.

GATA maintains that, as with the Washington Agreement, the purposes
of the central banks were the opposite of what Greenspan was
suggesting. Far from working together to prevent a private corner on
the gold market, the central banks were using gold leasing to
maintain a corner on the gold market themselves.

Construe Greenspan's testimony as you will, but there it is again --
central banks admitting that they work together to regulate the
price of gold. And, more than that, Greenspan told Congress, if
inadvertently, that the purpose of gold leasing was not really the
purpose long maintained by the central banks involved in it -- to
extract a little income from a supposedly dead asset -- but rather
to keep the gold price down.

Central bankers aren't the only ones in the gold business who
acknowledge collusion to control the gold price. The biggest hedger
among the gold-mining companies, Barrick Gold, has gone so far as to
confess, in federal court in New Orleans, to participation in this
scheme. Sued along with its bullion bank, J.P. Morgan Chase, by
Blanchard & Co., the New Orleans coin and bullion dealer, Barrick
filed a surprisingly candid motion in court on February 28, 2003.

Barrick moved for dismissal of Blanchard's lawsuit on grounds of
sovereign immunity. That is, Barrick claimed that, in borrowing gold
from central banks through Morgan Chase, Barrick became the agent
for central bank gold policy; that, as the agent of central banks,
the company could not properly be sued without also suing the real
parties in interest, the central banks, as well; and that, since the
central banks, as the agencies of sovereign governments, have
immunity and could not be made party to the Blanchard suit, the suit
should be dismissed.

Fortunately Judge Helen Berrigan dismissed Barrick's motion, and so
Blanchard's lawsuit has gone to the evidence-collecting phase. The
suit is similar to Reg Howe's federal lawsuit, which was brought in
U.S. District Court in Boston, underwritten financially by GATA,
included government defendants, and failed on the very issue of
sovereign immunity -- the issue that is now out of the way so that,
in the Blanchard case, the world yet might get a close look at how
the gold market really works.

Just as the true purpose of gold leasing is to suppress the gold
price rather than earn a little interest on a "dead asset," some
central banks even acknowledge that the only purpose of holding gold
reserves at all now, in the absence of any currency's formal
convertibility, is to rig markets.

Here is the admission made by the Reserve Bank of Australia in its
annual report for 2003:

"Foreign currency reserve assets and gold are held primarily to
support intervention in the foreign exchange market."

All this shows that while the formal convertibility of currencies
into gold has been ended by the articles of the International
Monetary Fund, gold continues in its nature and function as money
and as the independent international currency, the competitor of the
dollar and the euro -- and that central banks recognize as much,
however grudgingly.

Central banks often acknowledge intervention in currency markets --
direct intervention, as with the Bank of Japan's printing yen to buy
dollars and the People's Bank of China's enforcing a fixed exchange
rate with the dollar; and indirect intervention, as by the heavy
purchases by many central banks of U.S. government bonds. Meanwhile
the Federal Reserve intervenes in and supports the U.S. bond and
equity markets every week through the strategic purchase and sale of
U.S. government bonds.

Maybe you've heard the joke about the lawyer who, asked by a
potential client, "How much is 2 and 2?," replied, "How much do you
WANT it to be?" These days that is even more the premise of central
banking than of the practice of law. What do the markets say? What
do you WANT them to say?

Far from being the mechanisms of steady development and democracy we
tout to the developing world, markets now, in the eyes of central
banking, are considered to be usually INEFFICIENT and WRONG. And so
bailouts and interventions and the issuance of price-capping
derivatives have followed constantly on each other's heels so that
no big financial interest might ever suffer the consequences of its
mistakes or venality. National and even world economic objectives
are now set by unelected overlords, gods of the market whose power
is almost completely undemocratic.

Amid all this intervention, why should it be so hard to accept that
central banks might be more involved in the gold market than they
make plain? Indeed, to believe that central banks are NOT deeply
involved in the gold market, one almost has to believe that it is
the ONLY market they are not deeply involved in.

GATA is in the free-market advocacy business, not the investment
advice business. But we can draw a few conclusions.

First, because of gold leasing and the deceptive accounting for it,
central bank gold reserves are far less than what is claimed.

Second, amid worldwide currency debasement, the gold price will be
largely a matter of how much more gold the central banks are ready
to lease and then sell, a matter of how far down the central banks
are willing to run their gold reserves and whether they think they
may need gold again to restore confidence someday when currency
debasement gets out of hand. The evidence of the gold price of the
last few years -- rising steadily despite constant selling or talk
of selling by the central banks -- suggests that the central banks
are attempting a controlled retreat with gold. The increase in
official anti-gold propaganda supports suspicion that the central
banks are running out of golden ammunition.

And third, and most important, far from being Keynes' "barbarous
relic" or a quaint antique, gold remains not just basic to the world
economic system but, in fact, the secret knowledge of the universe --
the substance and mechanism by which everything else financial can
be revealed and measured. If gold ever escapes the distortions that
so laboriously have been imposed on it, we may see how everything we
have considered normal has actually been distorted grotesquely --
may see, to our shock, that, as Kipling wrote in "The Gods of the
Copybook Headings":

"... all is not gold that glitters, and two and two make four."

When that day comes and the real world reasserts itself with a
vengeance, people will need the real thing -- or the real things,
ANYTHING that is real. Kipling foresaw it this way:

... Then the Gods of the Market tumbled,
...... and their smooth-tongued wizards withdrew,
... And the hearts of the meanest were humbled
...... and began to believe it was true
... That All is not Gold that Glitters,
...... and Two and Two make Four --
... And the Gods of the Copybook Headings
...... limped up to explain it once more.

... As it will be in the future,
...... it was at the birth of Man --
... There are only four things certain
...... since Social Progress began: --
... That the Dog returns to his Vomit
...... and the Sow returns to her Mire,
... And the burnt Fool's bandaged finger
...... goes wabbling back to the Fire;
... And that after this is accomplished,
...... and the brave new world begins
... When all men are paid for existing
...... and no man must pay for his sins,
... As surely as Water will wet us,
...... as surely as Fire will burn,
... The Gods of the Copybook Headings
...... with terror and slaughter return!

But we don't have to be quite as apocalyptic as Kipling. We still
have some options, and you will hear about them at this conference,
hear about putting gold and silver back to work in monetary roles.

Among others, you'll hear from James Turk, founder of GoldMoney, the
gold depository and electronic payments system, who is, from the
standpoint of the central banks, probably the most dangerous man in
the world.

You'll hear from Hugo Salinas Price about his proposal to
reintroduce silver as circulating currency in Mexico side by side
with the peso.

You'll be able to talk with John Resing of the Producers Gold
Exchange, a plan for giving the physical gold market more influence
against the paper gold market of the commodities exchanges.

And you'll hear ideas for helping GATA grow.

So thanks for coming all this way, and welcome to Gold Rush 21.




Gold -- Sharefin, 03:07:53 08/15/05 Mon

THREE REVOLUTIONS

Remarks by Ferdinand Lips
at the Gold Rush 21 conference
of the Gold Anti-Trust Action Committee Inc.
Dawson City, Yukon Territory, Canada
Monday, August 8, 2005

It is an honor and a pleasure for me to talk to you at the site of
the greatest gold discovery in history. We are in Dawson City, the
place of the Klondike Gold Rush of 1896.

As a young man I spent two years of my life in Toronto. So almost 50
years later I made a visit this legendary country of the Yukon. In
this wild place destiny played unbelievably dramatic roles in many
thousands of lives. There is no fever like gold fever.

This June gold bullion posted a dramatic rise against all major
currencies. Another cycle in this bull market seems to be beginning.
The curtain of this present-day drama is soon going to lifted as
investors all over the world start to notice what is going on.

Let me talk about how I see the gold and the world situation from
Dawson City.

In short: Because the world has forgotten the monetary role of gold,
our world is in serious trouble. That is the one major reason for
the worrisome state of the world. The abandonment of gold as money,
of the discipline of gold, is the major reason if not the only
reason why our world has become a very dangerous place. In my
opinion, it is the biggest tragedy in world history.

Some years ago I heard that the Mayan calendar will end on the 23rd
of December 2012. There is no more Mayan calendar afterwards. That
is only about seven years away.

The Mayans were a people of great culture and they loved gold. They
have to be taken seriously.

What could that mean? What is going to happen?

Is it the end of the world?

No, it can't be that. We hope not.

However, we are facing an economic situation that could easily end
in a debacle of epic proportions.

Will there be another world war? Well, that is quite possible. There
are so many wars already. In the 20th century there have been two
world wars, thousands of smaller wars, even gold wars and currency
wars. They would never have happened under a gold standard.
Impossible.

What else could it be, then?

I have come to several conclusions. Conclusions usually come at the
end of a speech. But I won't keep you waiting.

George Bernard Shaw said: "It's difficult to make forecasts,
especially about the future." But I will try anyway. I'll tell you
my conclusions right now.

First conclusion: There will be no more Federal Reserve. Yes, there
will be no more Fed. Believe me.

It may come as a surprise to some of you to hear that the Federal
Reserve System is already America's fourth central bank. There were
three others before that and the result was always the same -- a
disaster. We have had nearly a hundred years of the Fed and that is
enough.

Why? Because this organization has tragically failed. It was set up
to keep the dollar strong and the financial system sound. It was
founded by powerful and supposedly very intelligent men. Within a
hundred years they have succeeded in running the dollar down to 5
percent of its 1913 value. Maybe even below that.

The Fed has created stock market bubbles. Right now it is creating
the biggest housing bubble in history. This may lead to economic
collapse.

I expect that a revolution will one day take place against the Fed.
It must be abolished. After all, its founders were not that
intelligent but rather stupid men. Or they were devils. It is a
tragedy. Not only that: It is the biggest tragedy in world history,
even worse than wars. Yes, worse than wars. It made most people
poor. It damaged America. It caused wars and then helped to finance
them.

Second conclusion: Most other central banks will go too. The central
banks invented this terrible monster of "the lender of last
resort," which allows irresponsible banks and the wealthy financial
folk to speculate without real risk of their own. It led to an
incredible buildup of financial leverage. And at the end it leaves
ordinary people holding the bag.

None of this would occur if we had an honest monetary structure. We
don't need central banks. The once mighty Bundesbank, the bank that
ruled Europe, has already lost all its power. All central banks must
and will be abolished.

Why? Because they were so stupid and fraudulently sold their
citizens' gold and bought paper money instead, mostly U.S. dollars.
You know -- those dollars that lost 95 percent of their value over
100 years.

Yes, there is now the euro. But is that currency cocktail any
better? Somebody called it the Esperanto currency, meaning the
hopeful currency. Before the creation of the euro all the central
banks of the world held all their monetary reserves in U.S. dollars,
a currency backed by nothing. After the dollar crashed in recent
years, they shifted their paper dollars into euros. How clever --
they sold gold at the bottom and then they sold dollars at the
bottom.

I hope all is not lost. I suspect that some central bankers are
beginning to find out that gold is the only real money -- the only
alternative to worthless paper money reserves.

My forecast: Beginning in 2006 the same central bankers who dumped
gold at much lower prices will repurchase that gold at much higher
prices.

Third conclusion: The United States will have Latin American
conditions but without Latin charm.

I am extremely worried about the future of the United States. Its
manufacturing industry is dying. The United States is bleeding to
death with these endless wars. As far as I know, America has no
enemies from outside that threaten it. In my view, the enemy comes
from inside. The United States will face economic collapse and
destruction of its currency. But people are not informed about what
is going on. I also hear that U.S. citizens are losing their
freedom. That is, of course, the consequence.

Americans should remember their heritage. They should remember the
principles of their founding fathers. These wonderful men created a
great and successful country that was admired by the whole world.
This is all gone. The leaders of the U.S. government are thinking
only about teaching everybody what democracy is. The leaders of the
U.S. government want to rule a world they don't understand. They
want to manage the markets they no longer dominate and then go to
war when nothing helps.

Fourth conclusion: China will probably become the biggest economy in
the world.

China has a long history. The timeless value of the wisdom of a
Confucius, almost 3,000 years old, is again remembered. Believe me,
this is far superior to Disneyland. China will become the most
important country. China will have a great future as long as it can
master the speed at which it is changing and growing. That will be
difficult.

China's economic progress creates not only wealth but also tensions.
It should not be built on the American consumer, who consumes that
much only because he thinks the housing boom makes him rich. So
China and the other Asian countries will one day need to have their
own integrated markets. They will no longer depend so heavily on an
American consumer drowning in debt.

If political tensions become too tense, the country could split up
in three Chinas. It has happened before. That would not be too bad.
Smaller countries can be better managed. In the case of China, these
three countries would still be big enough.

Fifth conclusion: India will get wealthier and more successful. But
I wonder if a country is really successful if it has that many poor
people. Most important insight: In spite of all the forecasts, India
will buy more and more gold. The Indians will never change. They
have lots of history and experience with paper money.

In the Middle Ages there was a "silk road" going from Turkey to
Kazakhstan. Now we are seeing the building of the "gold road." It
starts in Dubai. Dubai is building the biggest gold refineries in
the world. They buy and refine the gold that flows over the "gold
road" to India and all of Asia.

Sixth conclusion: Russia could become the greatest power. Russia may
have the biggest gold reserves. In 1917 under the tsar the Bank of
Russia had the biggest gold stock of all central banks, including
the Bank of England. Russia has many well-educated, hard-working,
and decent people. They just need to abolish their enormous
bureaucracy, forget their Marxist nightmare, and learn the
principles of a free-market economy. Russia is a fabulously rich
country with enormous resources, a lot of good people, and a lot of
culture.

Seventh conclusion: Together with Russia, Europe could again be the
center of the world. But this is far from sure. It can be achieved
only if we drop socialism and the welfare state. We should learn
from the Chinese. Hard work and little welfare state.

But in order to succeed, the euro needs a link to gold. The miracle
can be accomplished only if Europeans replace Keynes with the
thinking of men like Röpke, von Mises, von Hayek, et al. Röpke,
Eucken, and Erhard were the fathers of the German miracle. These
policies could again be the source of a European miracle. The
European Union of Brussels, the European Union in its present form,
should be abolished.

The Brussels bureaucracy of unelected officials is a monster. The
French and the Dutch just voted against it.

The EU in its present form will fail and maybe the euro will fail as
well. That would not be the end of Europe. As General Charles de
Gaulle recommended, the ideal would be the Europe of the Nations, a
Europe where the individuality of every nation and region is
respected. A Europe from the Atlantic to the Urals.

A bit more religion would also help. The word "God" was not even
included in this new European constitution. The unelected masters of
Europe wanted to do it without God. They are destined to fail.

Eighth conclusion: Gold and Silver prices will be much, much higher.
Oil prices too. There is not enough gold. Who wants to produce gold
and silver as long as prices are held artificially low? This whole
manipulation of the gold market has to end. It will end like the
London Gold Pool in 1968. Just collapse. The gold pool was created
in 1960 by the central banks to keep the price of gold at $35. It
could not last. Gold was stronger than the central banks. And gold
will also be stronger than the hedge fund boys who are criminally
borrowing and shorting stocks of small gold-rich exploration
companies just to bring them to their knees.

Only this time the explosion of prices will be more spectacular. The
prices will go to the moon. And the manipulators will be hit by a
real boomerang. Also, the central banks will start buying in 2006.
Nobody will be able to stop that future gold rush. Gold will take
its revenge.

Ninth conclusion: If the price of gold and silver were left to free-
market forces, nearly everybody would benefit. South America. Most
countries of Africa. South Africa would benefit most. Even the
United States would greatly benefit because it is the No. 3 producer
of gold. There could be a renaissance of mining generally, with all
the beneficial effects on national economies.

Tenth conclusion: My most important forecast is the following: I
forecast a return to the gold standard.

Without a return to the gold standard, you can forget it. I repeat:
Forget everything. Then the calendar of the Mayans and their wisdom
will have proved to be greater than that of Nostradamus.

If we go back to the gold standard I could see the best scenario for
the future of mankind. Everybody would benefit from sound money. The
United States again could become a great economic power and nation.
Gold-rich Asia may benefit most. The world economy would run on its
full potential. There would be full employment everywhere. The young
could again find jobs. Peace would return to the world.

How can this be achieved?

By three revolutions.

1. The GATA revolution.

2. The education revolution.

3. The mining revolution.

... The GATA revolution.

I came to this historic place to tell you how we Europeans admire
the work of GATA.

For seven years now GATA, under the leadership of Bill Murphy and
Chris Powell, has been fighting for free markets, for a free gold
market. Bill's courage is without example.

It is a fight of David against Goliath. Day after day Bill is
hammering out his message for transparency through honesty. Day
after day he informs us how honest people are robbed by arrogant
governments, bureaucrats, useless central banks, and an almighty
banking system.

It is a total crime if you manipulate markets, depress the price of
assets of other people, destroy the economies of whole nations
(primarily in Africa), and drive hundreds of millions of people into
poverty. It is a crime.

GATA courageously fights for free markets, better markets, honesty,
and a better world. GATA therefore deserves our full support.

The mining industry has often been criticized by GATA and rightly
so. GATA criticized it for not protesting against the obvious
manipulation. The mining people do not realize what is happening to
their product, to them and to their shareholders. The mining
industry is mostly engineers and they don't understand what some
dark, obscure characters on commodities exchange are doing to them.
Or else they are just closing their eyes.

If you realize how much effort it takes to get a few grams of gold
out of the ground, then it is obvious that this manipulation is a
major crime.

It can only be in the interest of mining people to support GATA.
Actually the defense of the mining industry was the job of the World
Gold Council. But they failed. That is one of the strangest
organizations I ever met. In any case the World Gold Council is not
the friend of the gold-mining industry. Rather it is serving its
biggest sponsors, who incidentally were also the biggest gold
hedgers. Those sponsors are dictating the World Gold Council's
policy.

All gold and silver mines should voluntarily give GATA an annual
contribution, not based on ounces produced but what they think is
right. All investors, but primarily those with interests in gold and
silver mines, must subscribe to GATA's dispatches. Each day they
will get high-class and honest information.

GATA is the only organization that is fighting for miners and
investors. Fighting for their rights and their money.

GATA and Bill Murphy's own Internet site, LeMetropoleCafe.com,
should now be put on a broader basis. A group of friends should meet
with them and work out a plan for how GATA can be institutionalized
and structured. It should become a structured business corporation.

The benefits for everybody will be enormous, not just for a few
stock market gains but for the whole economy, countries, mines,
shareholders, workers, and for freedom.

Can it be done? Yes, it can. It is needed because the gold cabal
cannot endlessly steal our money. GATA must live and grow. Let's
build GATA into to a powerful organization. Bill deserves it. He is
a pioneer. GATA has to become a viable business corporation.

This reminds me in a way of the foundation of Switzerland. In 1291,
30 men from the Swiss mountains assembled one night in a meadow near
the Lake Lucerne in Switzerland. They wanted to be free. At that
time Europe was ruled by kings and princes and other nobles who were
not always nice to the common man. The common man had to pay taxes
and had to fight on the battlefields for the glory of the kings.
They had to fight and die for the feudal system.

The mountain farmers decided that they could manage their own
destiny. They were determined not to bow to any oppressor but rather
to die than live in chains. And they had to go to war. In three
decisive battles they beat the army of the Austrian Hapsburg empire.
But before they went into the battle, the farmers went down on their
knees and prayed to God Almighty for help.

Other cantons joined the original three cantons. Today Switzerland,
a country without natural resources, is the country with the highest
per capita income in the world. Switzerland is still the only direct
democracy in the world.

This, my friends, is my first message. Now to the second message:

... The education revolution.

If we want to change the monetary non-system, then we must have a
plan. We need a plan to inform people about sound money. For a
century people have been brainwashed that gold is finished and fiat
paper money will rule. The politicians are full of lies and the
media is full of lies. There is not one university in the world
where monetary history and science are taught.

From history we know how fiat money systems end. Look at the
American Continental and the John Law experiment. They all finished
badly. The present paper money experiment is even worse. It's the
worst because it is worldwide. For the first time in history all the
currencies of the world are backed by nothing. It is the worst
system ever invented. It is the Tower of Babel of irredeemable money.

Let me cite Professor Antal Fekete from my book "Gold Wars." Fekete
said:

"This book is much more than a chronicle of gold wars. It is also an
account of the historic failure of 'Esperanto money.' Over a hundred
years ago a Polish physician by the name of Ludovik Lazarus Zamenhof
(1859-1917) created a synthetic language in the hope of removing the
curse of Babel from mankind. According to the Bible, man had become
so conceited as to challenge God by proposing to build a tower that
was to reach high heaven. The tower could never be completed because
of failures of communication due to the confusion of different
languages. Zamenhof called his new language 'Esperanto,'
meaning 'the hopeful.' However, the hope was in vain as other
synthetic languages, such as 'Ido,' sprang up. The confusion of
tongues and the curse of Babel have remained."

Calling irredeemable currency "Esperanto money" is apt. The
Biblical story may be interpreted allegorically as an admonition not
to challenge God by attempting to build a tower of irredeemable debt
that is to reach high heaven. But the admonition fell upon deaf
ears. Now God's wrath is upon us.

Currencies of nations have been confused. The tower of Babel is in
vain. Other synthetic currencies spring up such as the Special
Drawing Right, the euro, and so on. The confusion of currencies, and
the curse of Babel, remain.

How could this tower of irredeemable money come into existence?
Because there is no gold standard. Because people do not know what
money is, what sound money is and means. The lessons of history are
forgotten.

In the 19th century every peasant knew what money is. So you have to
educate people again.

How can it be done?

You create a worldwide monetary institute. We organize conferences
but with a system. You invite the young people and everybody who
wants to learn. You have three-year courses about monetary history,
about mining, about the influence of sound money on the economy, in
history and in the future. An organization such as FAME
(www.Fame.org) could play an enormous role. I am a trustee of this
organization and a friend of its director, Dr. Larry Parks.

You do not need a building for this. You may organize it at various
places, in various countries: Switzerland to begin with, Toronto,
Singapore, Dubai, Kyoto, Shanghai, Cape Town, Buenos Aires -- any
place you can think of. In a few years millions of people will know
what sound money is, and millions of people will want to go back to
the gold standard. And millions of people will want to buy gold.

The free market will overwhelm the manipulators. The free market
will decide the right price for gold.

Thanks to the wonderful instrument of the Internet, the message will
spread rapidly. I tell you that within three years the world will be
ready for a new gold standard, for sound money, law and order,
freedom, and no wars. Maybe it will take more than three years,
maybe it will take seven years, until 2012 when the Mayan calendar
ends and a new calendar starts.

How can this be achieved?

This reminds me of another example in history, the victory of
Christendom over the Roman Empire. The missionaries did it without
money, without the Internet. They travelled on donkeys and spoke to
the crowds, told them about God, convinced them of the importance of
love and peace. And they won. It was the Judeo-Christian philosophy
that there is only one God that defeated the Roman Empire without
weapons.

That is why I tell you it can be done. It can be done fast. We have
the Internet.

My daughter Barbara and I have worked out a plan for a monetary
institute. It was easy. I sent the plan to 10 people I thought would
be receptive. When I asked their opinion, they found it excellent.
For now it is still in the drawer in Switzerland, waiting to be put
in practice for the benefit of mankind.

But who will do this? Who has enough enthusiasm to create such a
monetary institute? It cannot be Ferdi Lips. I am over 74. But there
should be plenty of candidates. In May I was in the Middle East, in
Dubai, where I had spoke at the Gulf Research Center. Last year I
was in Bahrain. I spoke at a university. They were so interested
they wanted me to help them work out a program for universities in
all other Arabic-speaking countries taking "Gold Wars" as a
basis.

Today it is easy to spread the message with the help of the computer.

... The Mining Revolution

Before closing I am going to speak to you as a representative of the
gold-mining industry. The gold-mining industry is in a big squeeze.
It is in big trouble. It is a miracle that it still exists. Actually
it should make huge profits and pay rich dividends.

Thirty years ago gold-mining companies paid dividends to their
shareholders because gold in the ground is a wasting asset. Today
they do not and cannot pay dividends. Why?

Because the low price of gold does not allow them to. We need a
healthy mining industry. It is good for the world economy. Today the
price of gold should be 50 percent higher. The mines, the
shareholders, and the workers would prosper. But it is not only the
low price of gold that hurts them. There is also a currency war
going on, producing huge currency fluctuations, while energy costs
are rising, prices of commodities are rising, labor costs are
increasing, and in many cases gold grades are declining.

The conclusion is that the gold mining industry needs a higher gold
price. I have been active for 10 years in the gold-mining industry
in South Africa and Canada, and never have I seen an industry that
does so little for marketing its own product. Nor does the South
African government or its finance minister ever raise their voice.
They just watch how their mining industry is criminally destroyed.
And the unions actually think that the mining companies are doing a
bad job.

Of course, if you think it over, they ARE doing a bad job. Why?
Well, they just watch how their product is destroyed.

The shareholders of the mining companies should make their
respective managements responsible for selling gold for $300 or more
below its right price and thus squandering their precious assets.

Unfortunately most shareholders also don't know what is going on
either.

Most mining executives are engineers. Most of them do not even know
that the price of gold is managed. It is irresponsible. Every cheese
manufacturer does more for his product. But what can the miners do?
Well, they have done enough cost cutting, closing down unprofitable
mines and firing workers. What they should do is simply withhold 10
percent of their production from the market.

That is about 200 tonnes per year. It is only one half of what the
central banks are selling each year under the Washington Agreement.
It is only one half of what the central banks are selling in order
to keep the price low.

If the central banks are allowed to do everything to destroy the
mining industry, then the mining industry has the right to fight
back. Now is the time to stand up and withhold 200 tonnes of
production. Two hundred tonnes are not much but it would help
immediately.

So we finally come to the conclusions:

1. We need a strong, powerful GATA. It is a necessity -- a GATA that
is structured, organized, and institutionalized. It has to become a
going corporation.

2. We need to teach the people of the world what gold is. Gold is
money, the only money and the best money. It insures that our world
will again be prosperous. We need a monetary institute on a
worldwide basis.

3. The mining industry must prosper again. It must withhold gold
from the market until the central banks end their gold sales.

4. It is of the utmost importance to get rid of the restriction that
the International Monetary Fund has placed in its articles of
agreement that prohibits member countries from linking their
currencies to gold. Or else the countries have to quit the IMF.

5. In his essay "Can Gold Producers Survive By Promoting Jewelry?,"
Larry Parks of FAME said: "At the end of the day, to revive the
fortunes of the gold producers, it is necessary and sufficient to
restore gold as the choice of free markets and free people all over
the world as money that doesn't depreciate at home or abroad; as
money that is as steady as the stars; as money that is as faithful
as the tides or, as the American Federation of Labor put it at the
turn of the last century: 'Gold is the standard of every great
civilization.'"

That is the salvation of the gold-mining industry: Gold as the
standard of every great civilization!

This is my message.

Conquer the fiat money non-system with knowledge, just as
Christendom conquered the pagan Roman Empire. Conquer it with gold.
If we do this, then by the 23rd of December 2012 a new golden Mayan
calendar will be born and the world will experience a renaissance
and prosperity for all.

But if we don't do it, the calendar of the Mayans will have truly
been prophetic. We will face global economic collapse and believe
me -- the end of the world as we know it.




Gold -- Sharefin, 03:07:05 08/15/05 Mon

By Wistar Holt
Sunday, August 14, 2005

In July 1897 the small steamship Excelsior docked in San Francisco
with well-worn but enthusiastic miners returning from the Klondike
region, 1,500 miles to the north. As they disembarked carrying large
quantities of gold, word spread like wildfire. When another
steamship, the Portland, arrived a couple of days later in Seattle
with 68 miners carrying nearly 32,000 ounces of gold, the
word "Klondike" grabbed the headlines. Within days thousands left
their homes to head north and a gold rush was born.

Another gold rush began on August 7, 2005, as a hundred gold
proponents ascended into the Klondike town of Dawson City, Yukon
Territory, Canada, for Gold Rush 21. What these people sought was
not gold but the truth -- truth about the central banks; truth about
bullion banks; truth about liquidated, leased, and physical gold;
and truth about derivatives, the U.S. dollar, and gold and silver
price suppression. Representing 14 countries, some of these
delegates sought answers and evidence, while the veterans among them
strived for exposure for their message.

Fueling the gold rush of 1897-98 were the nation's dire economic
conditions, as bread lines were common and opportunities scarce. The
grounds of Gold Rush 21 were fertilized by questionable U.S.
government reports on weapons of mass destruction in Iraq,
underreported inflation, "hedonic" economic statistics, and a
Federal Reserve chairman who claims that asset bubbles cannot be
identified before it is too late.

The purpose of the Gold Anti-Trust Action Committee in calling this
conference was to disclose to the financial world that the precious
metals have been manipulated and suppressed for years. This
suppression of their prices allows asset bubbles to occur, causing
consequences for all markets, so it is important that something be
done about it.

Much of the evidence of this manipulation was initially supported
with a discussion of GATA's original findings in 1999, including
the extensive research of market analyst Frank Venerosa, who
concluded that more than half the supposed 30,000 tons of central
bank gold holdings had surreptitiously been sold or leased out.

Further evidence of manipulation was documented in the unraveling of
traditional relationships between gold, oil, and the CRB (commodity
price) index. The inexplicable fact that gold never seems to be able
to rise more than $6-7 per day while double-digit declines occur
periodically lends suspicion. The frequent rout of the price of gold
for no apparent reason upon the opening of the Comex paper
derivative gold market is also peculiar. Additionally, it was
pointed out that European central banks appear to target a certain
gold price -- $440 per ounce -- to limit gold's upward momentum.

From a macro standpoint, the rationale for the suppression of gold
and silver was discussed. Central banks and bullion banks have a
vested interest in keeping gold as low as possible. To the central
banks, gold is a barometer, a lightning rod, or as one top
international money manager describes it, "the canary in a coal
mine." If or when gold takes off to the upside, the fear is that
investors will begin to worry about the general health of the
financial system.

Since there has been such enormous liquidity created in our system,
asset bubbles have developed in stocks, bonds, real estate, and
credit. A rise in gold may cause investors to worry and retrench,
whereby these assets may deflate as the technology bubble did in
2000. This could do enormous damage to the U.S. and global economies.

On the other hand, the bullion banks are interested in maintaining a
low gold price for other reasons. Collectively they are massively
short millions of ounces of gold, going back to the early 1990s.
While prospering enormously for many years from the carry trade in
which they shorted gold and invested the proceeds in higher interest-
bearing instruments, they are extremely vulnerable, because of their
short positions, to large losses should gold rise much higher. In
addition, since gold competes with traditional asset classes like
stocks and bonds, bullion banks stand to lose a lot of revenue
should investors become concerned and reduce their exposure to those
assets.

There was much discussion at Gold Rush 21 about the vulnerability of
the U.S. dollar. The worsening trade, current account, and budget
deficits, as well as rising debt levels, are expected to wreak havoc
on the U.S. economy and its fiat currency. The days of the dollar as
the world reserve currency are unwinding. This vulnerability, as
pointed out by many speakers, is why gold and silver are so
important today. The metals provide intrinsic value independent of
governments because they are no one's liability.

Speakers made proposals to restore economic stability, reaching out
to individuals as well as governments. These suggestions ranged from
protecting oneself via a high degree of ownership in the metals
(and/or mining stocks), to having governments introduce precious
metal coinage along with their fiat money, to a far-reaching cry for
an international gold standard that would provide stability to all
global currency values.

Notably absent from Gold Rush 21 were most major mining companies,
many of which I had personally invited. Giving credit to Agnico-
Eagle Mines Ltd. as well as several junior miners who supported the
conference and GATA, I am convinced that management of most of these
absent companies privately believes that the precious metal markets
are indeed manipulated. But I suspect that they fear retaliation
from both governments and the bullion banks.

Governments frequently are asked to approve mining projects while
bullion banks are often solicited to finance them. Thus,
unfortunately, many of these companies probably feel a need to
maintain a low profile.

Nevertheless, GATA will continue to seek their moral and financial
support, since this battle is very much their own. Specifically, a
DVD of the conference will be delivered to all major mining
companies and followed up on.

To stress the point further, on August 4, just prior to my departure
for Gold Rush 21, I e-mailed the following letter to an executive at
Hecla Mining:

* * *

Dear Vicki:

Seeing your stock down 32 cents today (7 percent), more than
negating the industry-led rally yesterday, makes me disgusted.
Perhaps your problem is not really attributed to labor problems in
Mexico or cost overruns in Venezuela. Rather, in my opinion, it is
related to the suppression of the price of silver (and gold). This
is why GATA has launched Gold Rush 21. Yet your company's
management and many others in the industry have chosen to ignore the
obvious.

* * *

The optimism among gold supporters at Gold Rush 21 was high. Many
feel that before year's end gold will break out to multi-year
highs of $500 per ounce. Longer-term targets over the next couple of
years are significantly higher. The feeling was that fundamentals
such as the escalating price of oil and other commodities, as well
as weakness in the U.S. economy and the dollar, will continue to
strengthen the physical gold market. Strong demand in international
markets such as India, China, Turkey, Russia, and the Middle East
will continue.

Foreign markets may continue to provide the greatest opportunity for
GATA to help investors realize how cheap gold is. At the same time,
certain bullion banks may be forced to limit their losses, cover
their shorts, and cease their suppressive activity. In addition, as
the dollar continues to weaken, certain central banks may convert
their large dollar holdings into gold in order to protect their
reserves. This would make it harder for the suppression activity to
continue.

Perhaps ironic or not, gold rallied nearly $10 per ounce on
Thursday, August 11, the day after the conference ended. It was the
largest increase in a single day since I initiated my gold equity
positions in January 2001. Is it possible that GATA's Gold Rush
21 has already made a difference? Time will tell.

But when I heard conference attendee Andrey Bykov, an adviser to
Russian President Vladimir Putin, say, "This is the finest
conference I have ever been to," it seemed that the message about
gold was getting out. After all, Russia is one of the major gold
producers and its central bank has been adding to its gold reserves.

Let there be no mistake: It will take time for gold to reach its
appropriate value. It will require patience on the part of the
investment community as we continue to battle the oppressive forces.
Four and half years ago I considered gold to be the absolute best
investment opportunity of my (then) 21-year asset management career.
Today nothing has changed. The fundamentals are even more
compelling. Those with patience will be well rewarded.




Periodic Ponzi Update PPU -- $hifty, 19:21:52 08/14/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,156.9 + Dow 10,600.31 = 12,757.21 divide by 2 = 6,378.60 Ponzi

Up 10.63 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 01:06:31 08/12/05 Fri

Russia's Gold, Forex Reserves To Double: Finance Minister


05.08.2005 11:24
Russia’s Finance Minister Alexei Kudrin said Thursday that Russian gold and foreign exchange reserves could reach $200 billion by the end of this year.

Gold and forex reserves will grow by $80 billion this year, up from the previous forecast of $50.

According to statistics, Russia's gold and foreign exchange reserves stood at $124.5 billion on Jan. 1, and increased to $151.8 billion as of July 1.




Gold -- Sharefin, 20:54:30 08/09/05 Tue

Gold could hit $US725 on China demand

China's growing demand for gold jewellery will drive up global prices of the metal in the next five years, boosting the shares of producers such as Newmont Mining, AngloGold Ashanti and Australia's Newcrest.
Prices may reach $US725 an ounce by 2010 from the current level of $US437 and China may overtake India as the world's largest consumer of gold jewellery, said Graham Birch of Merrill Lynch in London. Five other analysts and traders surveyed by Bloomberg said Chinese demand would bolster prices.

Jewellery demand in China, the world's fastest-growing major economy, rose 13 per cent in the first quarter and investment demand rose 36 per cent, according to the World Gold Council, a producer-funded group. Chinese incomes in urban areas rose 9.5 per cent in the first half and are forecast to surge further by the end of the decade.




Periodic Ponzi Update PPU -- $hifty, 20:40:33 08/07/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,177.91 + Dow 10,558.03 = 12,735.94 divide by 2 = 6,367.97 Ponzi

Down 44.90 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 08:03:04 08/01/05 Mon

A cautionary tale and a 'classic script'

A be-on-alert view on the greenback comes from the respected Bridgewater Daily Observations, an institutional service put out by Connecticut-based money managers Bridgewater Associates.

Bridgewater emphasizes that "this is a regime change, not just an exchange-rate change."

It argues that "due to the Chinese peg, Asian monetary policy has basically been locked into a dollar system. No Asian country wants to lose competitiveness to China."

China's official removal of the dollar-peg system in favor of a basket of currencies "means that the Asian dollar-based monetary system is about to collapse," Bridgewater warns.
~~~
"The flip side of this is that the U.S. is moving toward a balance-of-payment crisis that is quite similar in its dynamic (although the imbalances are now greater in degree) to the dollar/debt crisis of the early '70s. ... While this process has been, so far, playing out in slow motion, the dollar crisis is unfolding entirely according to the classic script of a pegged currency falling apart."
~~
On Friday, Russell said: "The U.S. is losing control of its money. The control is gradually and subtly switching to our creditors, the Chinese and the Asians. The direction of the yuan in terms of dollars or dollars in terms of yuan may be the 'next big thing.' "

Because the downside is huge, any risk of the dollar becoming undermined is worth noting.

Indeed, Growth Stock Outlook's Charles Allmon said again last week that he thinks price of gold and the Dow Industrials could cross again -- say, in the 2,500 range.




Periodic Ponzi Update PPU -- $hifty, 20:00:06 07/31/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,184.83 + Dow 10,640.91 = 12,825.74 divide by 2 = 6,412.87 Ponzi

Down 2.59 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 23:00:50 07/24/05 Sun

Gold liberalisation measures are key to India

India is sitting on a ’gold’ mine and it has the potential to be world’s largest gold trading center. Everybody acknowledges this, the finance and commerce ministries, the Reserve Bank Of India (RBI), the commodity exchanges, so on and so forth. Not to mention the bullion traders and jewelers. India has unsatiable penchant for gold. It has been proved time and again. Every quarter the GFMs and World Gold Council reports have been substantiating the facts.




Gold -- Sharefin, 22:57:46 07/24/05 Sun

Govt to authorise more entities for gold imports

THE Government has finally made up its mind on further liberalising gold imports by authorising more entities to import in addition to the current list of some 17 agencies that include Government parastatals, star trading houses, and banks.

The Ministry of Finance has decided to expand the number of authorised importers of gold beyond the current designated agencies. For this purpose it is seeking to develop a set of criteria for those persons, agencies and entities who would be authorised to import gold.

The decision is sought to be justified on the ground that it would ensure adequate supply in the market for the benefit of consumers. Early last year, ahead of the general elections, the then Finance Minister, Mr Jaswant Singh, announced the Government's decision to make gold imports free, subject to guidelines to be issued by the Reserve Bank of India.

Mr Singh had asserted that unrestricted imports would help jewellery makers and others to access the yellow metal freely without having to go through intermediaries.




Gold -- Sharefin, 22:53:24 07/24/05 Sun

Post/wire say Barrick, others like ring of $725 gold

The Financial Post reports in a Bloomberg dispatch that the price of gold may rise to $725 an ounce by 2010 as surging economic growth turns China into the world's biggest jewellery consumer
~~~
Fat Prophets, a privately owned financial-advisory company in Sydney, said Wednesday gold may rise to $850 an ounce in as little as three years.




Periodic Ponzi Update PPU -- $hifty, 21:01:27 07/24/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,179.74 + Dow 10,651.18 = 12,830.92 divide by 2 = 6,415.46 Ponzi

Up 16.66 from last week .

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 22:01:02 07/21/05 Thu

China Cuts Currency Link to U.S. Dollar

BEIJING - After months of lobbying by its trading partners, China on Thursday cut its currency's link to the U.S. dollar and raised its value by about 2 percent in a move that could make Chinese exports more expensive and make foreign assets cheaper for China to buy.

The government's increase of the state-set exchange rate of the yuan could give a respite to foreign companies that are trying to compete with an avalanche of low-cost Chinese goods.

But Chinese companies also could get a break as prices of imported oil and other raw materials fall. And a stronger currency could prompt more takeover bids by China like those launched recently for U.S. oil company Unocal Corp. and appliance maker Maytag Corp.

The U.S. government welcomed the move but said it would closely watch the changes. The small increase in the yuan's value isn't likely to be enough on its own to satisfy trading partners who have said Chinese exporters had an unfair price advantage because the currency was undervalued by up to 40 percent.

But by dropping the U.S. dollar link and switching to a more flexible system based on a basket of foreign currencies, the Chinese have opened the door to a further, gradual rise in the yuan's value.

The government announced the change to an exchange rate of 8.11 yuan to the dollar in a surprise announcement on state television's evening news. That raised the value of one yuan by about one-quarter of one U.S. cent to 12.33 cents.

The effect on U.S. financial markets was immediate: The dollar fell against other major currencies and yields on U.S. Treasury securities rose. If that rise in interest rates is sustained, it could make it more expensive for U.S. consumers to finance purchases of new cars, homes and other big-ticket items




Gold -- Sharefin, 21:58:01 07/21/05 Thu

Dollar sags as China scraps currency peg

NEW YORK (Reuters) - The dollar slumped against the yen in heavy trading on Thursday after China abandoned its dollar peg in favor of a basket of currencies to manage the yuan.

The yen's rise accelerated and other Asian currencies firmed after Malaysia said it has changed the ringgit peg to a managed float, fueling further gains in the Japanese currency.

Traders had expected the Hong Kong Monetary Authority and Monetary Authority of Singapore to revise their currency regime as well. However, both said on Thursday that they are maintaining their current foreign exchange policy.




Gold -- Sharefin, 21:56:41 07/21/05 Thu

Commodity Prices Could Soar as China Ends Its Dollar Peg

NEW YORK, July 21 /PRNewswire/ -- China's decision to revalue the yuan has started small, but one analyst predicts it could be just the beginning - eventually putting a powder peg to commodity prices.

On Wednesday the Chinese government ended its decade-long practice of pegging the value of its currency to the U.S. dollar. Starting today the value of the yuan will be tied to a basket of currencies.

The move pushed the yuan up 2.1% against the dollar. But Daily Reckoning contributor Eric Fry, an expert in emerging markets and international diversification, says it won't stay there for long.

"Currencies in motion tend to continue in motion, even when they are 'managed,'" Fry says. "So I'd say the odds are pretty good that the yuan continues to strengthen over the months ahead."

Fry predicts one of the biggest beneficiaries will be the commodities market. "Even with their undervalued currency, the Chinese had become voracious buyers of commodities. A strengthening currency, therefore, should help to boost their commodity consumption somewhat."

He adds that the increased demand will only push prices higher. "If you liked resource stocks before today's yuan revaluation, you've got to love them now."




Gold -- Sharefin, 08:20:45 07/19/05 Tue

New COT charts to view:

COT CHARTS




Periodic Ponzi Update PPU -- $hifty, 23:48:41 07/17/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,156.78 + Dow 10,640.83 = 12,797.61 divide by 2 = 6,398.80 Ponzi

Up 117.79 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Periodic Ponzi Update PPU -- $hifty, 20:33:44 07/10/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,112..88 + Dow 10,449.14 = 12,562.02 divide by 2 = 6,281.01 Ponzi

Up 100.61 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 06:09:42 07/07/05 Thu

China allows commercial banks to sell gold bars

SINGAPORE (Reuters) - China has allowed four major commercial banks to sell gold bars to their customers in the near future, dealers said on Wednesday, in the latest move to boost demand in the world's most populous nation.

The prospect of growing consumption in main buyers India and China and the launch of exchange-traded funds (ETF) in bullion trading cities are among the supporting factors for gold -- a symbol of wealth and good fortune in China.

Currently, individuals are only allowed to buy gold-backed certificates from the Bank of China and the Industrial and Commercial Bank of China, dealers said. Account holders use the certificates to trade in gold instead of buying or selling real bullion.
~~~
"The China Banking Regulatory Commission has given an approval for these banks to start the business. The four major banks are preparing to launch gold bars for their customers in the near future," said one regional dealer who covers the Chinese market.

"This is the reason why I think China's gold consumption may rise by 10 percent this year. This is related to an increase in investment demand," he said.
~~~
China is both the world's fourth-largest gold consumer and producer. It produced a record 212.35 tonnes of gold in 2004, up 5.86 percent from the previous year and well above 90 tonnes in 1994.
~~~~
The industry-backed World Gold Council said consumption in mainland China rose to 234 tonnes in 2004 from 207.6 tonnes in 2003, driven by Beijing's move to liberalise the bullion market and the growing popularity of 18-carat gold.




Gold -- Sharefin, 06:06:51 07/07/05 Thu

Missing Gold

A King's Ransom in Precious Metals Seems to have Disappeared

There are rumors that $160 billion in gold bullion was stored under the World Trade Center. Yet the only published articles about recovered gold mention only around $200 million worth of gold. All of the reports of recovered precious metals appear to refer to a removal operation conducted in late October of 2001. On Nov. 1, Mayor Rudolph Giuliani announced that "more than $230 million" worth of gold and silver bars that had been stored in a bomb-proof vault had been recovered.

Two Brinks trucks were at ground zero on Wednesday to start hauling away the $200 million in gold and silver that the Bank of Nova Scotia had stored in a vault under the trade center ... A team of 30 firefighters and police officers are helping to move the metals, a task that can be measured practically down to the flake but that has been rounded off at 379,036 ounces of gold and 29,942,619 ounces of silver ..

Another article gave a figure of $650 million to the value of gold in the 4 WTC vault.

Unknown to most people at the time, $650 million in gold and silver was being kept in a special vault four floors beneath Four World Trade Center. The gold and silver were recently recovered.

An article in the TimesOnline gives the following rundown of precious metals that were being stored in WTC vaults belonging to Comex. 2

Comex metals trading - 3,800 gold bars weighing 12 tonnes and worth more than $100 million
Comex clients - 800,000 ounces of gold with a value of about $220 million
Comex clients - 102 million ounces of silver, worth $430 million
Bank of Nova Scotia - $200 million of gold
That totals $950 million.

There appear to be no reports of precious metals discovered between November of 2001 and the completion of excavation several months later. It would seem that at least the better part of a billion dollars worth of precious metals went missing. It is not plausible that whatever destroyed the towers vaporized gold and silver, which are dense, inert metals that are extremely unlikely to participate in chemical reactions with other materials.

The circumstances surrounding part of the gold that was recovered offer clues to what may have happened to the unrecovered gold. According to reports, two truckloads of gold were found in a delivery tunnel under 5 World Trade Center in a 10-wheel lorry which had been crushed by falling steel. The vault was under 4 World Trade Center, which was closer to the South Tower, and more heavily damaged. There were no bodies discovered with the lorry, suggesting that whoever was removing the gold was warned of the imminent collapse of the South Tower.




Periodic Ponzi Update PPU -- $hifty, 00:31:00 07/04/05 Mon

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,057.37 + Dow 10,303.44 = 12,360.81 divide by 2 = 6,180.40 Ponzi

Up 4.85 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 23:07:36 06/27/05 Mon

Gold detaches itself from the euro

Since 2002 gold has been locked in a range of 315-350 euros to the ounce, and has only risen in value on dollar weakness against the euro. But in the past weeks this umbilical cord has been torn apart, and both the dollar and gold have strengthened against the euro.

The euro is suffering for several reasons: the growth outlook in the euro-zone is poor; the rejection of the European Union constitution by French and Dutch voters leaves the EU in a state of paralysis; and there have been hints that euro-zone interest rates will be cut soon.

Now for central banks or fund managers looking to diversify risk this has made the euro less attractive, and with the dollar also not without its own problems, gold is an alternative store of value.

Gold is an alternative 'currency' to the dollar, although it has to be admitted that gold has a zero yield and is a far less liquid asset. However, gold does have one fundamental feature that other currencies lack. Its supply is limited, and can not be expanded by the printing of money by central bankers.

In a world where deficits and debts hang over economies like the grim reaper, gold shines as a bastion of immortality. For their will be no deflation of gold due to a rising supply of paper money. On the contrary the more money is printed the higher gold will rise in price.

As the ultimate hedge against financial insecurity gold is still unmatched, except by other precious metals like silver and platinum. But its recent role as a proxy for the euro has kept the yellow metal from sharing in the recent global upturn in commodity prices.

This significant undervaluation of gold as an asset is now likely to come under focus, and accelerate movement into what is already an increasingly obvious safe haven. If gold were to resume its old role as a proxy for oil, then speculators would certainly take renewed interest.




Periodic Ponzi Update PPU -- $hifty, 23:56:51 06/26/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,053.27 + Dow 10,297.84 = 12,351.11 divide by 2 = 6,175.55 Ponzi

Down 181.04 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty







Silver -- Sharefin, 22:10:09 06/20/05 Mon

First silver ETF filed

Global Investors filed an initial prospectus for the first exchange-traded fund to reflect the price of silver bullion.

If approved by the Securities and Exchange Commission, the ETF's shares would trade on the American Stock Exchange under the symbol "SLV."

Each share of the ETF would be equivalent to 10 ounces of silver, according to the filing made late Friday by Barclays
~~~
Bank of New York is named as the trustee for the silver ETF and the London branch of J.P. Morgan Chase Bank is the custodian, according to the Barclays filing.

The sponsor's fee is 0.5% of the adjusted net asset value of the trust, according to the filing. The trust may sell of some of its silver to cover expenses, meaning the amount of silver per share may vary over time.




Gold -- Sharefin, 22:06:38 06/20/05 Mon

Barrick Gold Strikes Opposition in South America

“Barrick! Listen! Chile will not surrender!, No to Pascua Lama!,” roared a crowd of protestors as they paraded through the streets of Santiago, Chile. The crowd was addressing Canadian mining giant Barrick Gold, in response to the company's proposed bi-national “Pascua Lama” open-pit mine on the border of Chile and Argentina.
~~~
Barrick Gold, a powerful multinational already notorious for its dealings in North America, Australia and Africa, plans to extract an estimated 500,000 kilograms of gold (along with silver, copper and mercury) from the site over a 20 year period. Before doing so, however, the company will relocate significant parts of the Toro 1, Toro 2 and Esperanza, three giant Andean glaciers. Barrick hopes to transfer the three glaciers to an area with similar surface characteristics and elevation by merging the three into the larger Guanaco glacier.

The anticipated environmental impact, coupled with the removal of a major source of water for surrounding communities, has local Chileans up in arms. But Barrick Gold appears un-phased by the opposition. After all, Pascua Lama is one of the largest foreign investments in Chile in recent years, totaling US$1.5 billion.

As with many gold mines, the Pasuca Lama mine would employ cyanide leaching for on-site processing of the ore. Cyanide is a chemical compound which, even in very small quantities, is extremely toxic to humans and other life forms. If leaked from a mine site or spilt during transportation, it can quickly cause massive toxicity problems for an entire ecosystem, while mobilizing other persistent and toxic heavy metals, as well.
~~~
These fierce accusations of corporate irresponsibility and greed are certainly not the first the massive mining company has had to handle. In the past they have been accused of burying alive 50 miners in Tanzania (through a company they now own), of playing a heavy-handed role in attempting to silence opposition through expensive libel cases, and of blatantly disregarding community and environmental concerns all over, from the US, to Latin America, Africa and Australia.

George W Bush Sr. also appears in the long list of grievances about the company. From 1995 to 1999 he was the "Honorary Chairman" of Barrick's "International Advisory Board," during which time he was said to have forced laws favourable to the company.




Gold -- Sharefin, 22:00:49 06/20/05 Mon

Are gold and oil due a 20-year boom?

Analysts say China’s industrialisation may spur a long bull run, but there are echoes of the tech bubble.

COMMODITY prices are heading back to record highs after the spring’s sell-off and the City is once again talking of a 20-year bull run in the sector.

Brent crude oil has surged by 14% over the past month to $57.51 a barrel, not far off its high of $57.83 in early April. Copper hit a record high on Thursday after China, the world’s biggest importer of many commodities, reported that industrial output had leapt by 16.6% in the year to May.
~~
Even analysts who believe that commodities are in the midst of a long-term bull cycle accept that there are signs of a bubble in some parts of the market, especially among small oil and mining stocks quoted on the Alternative Investment Market.
~~~
Despite the risks, he believes that the commodity market is in the midst of a “supercycle” — a 20-year bull market fuelled by the industrialisation of China and India.

Richards said: “If you look at history, there have always been supercycles in demand for commodities. There was a super- cycle during the British industrial revolution, during America’s huge period of growth before and after the second world war and during Japan’s industrialisation in the 1970s.”

Now it is the turn of China. Its economy has expanded by 9.5% over the past 12 months and has grown by an average of 9.4% a year since economic reforms began in the 1970s, according to Capital Economics, a consultancy.

As China’s economy expands, it is sucking in raw materials to build up its infrastructure, including roads, power stations and factories.




Periodic Ponzi Update PPU -- $hifty, 19:27:18 06/19/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,090.11 + Dow 10,623.07 = 12,713.18 divide by 2 = 6,356.59 Ponzi

Up 68.78 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 23:20:20 06/18/05 Sat

Excellent Reading!!!

In Denial Of Crisis - part I

In Denial Of Crisis - part II

In Denial Of Crisis - part III




Gold -- Sharefin, 23:18:40 06/16/05 Thu

Yawns greet gold's euro move

What does it mean when gold gives a Euro party and nobody
comes?

Late last week the price of gold expressed in Euros, the European
common currency, broke above E350 an ounce. Early this week it went
on to make a high never seen since the currency was invented five
years ago. It creates a remarkable chart, and was an excitedly-
anticipated event.
~~~
Early this week gold was restrained by heavy liquidation of Tokyo
Commodities Exchange futures positions by Japanese speculators,
happily taking profits as gold reached a 13-year high in yen. But
these speculators are now out.

Physical market premiums from India and the Far East suggest these
markets are still buying.

Intriguingly, the European Central Bank's flock of subordinate
central banks have ramped up their gold selling to what appears to be
an unsustainable pace: over 12 tonnes a week for the last three
weeks.

Under the Central Bank agreement on gold sales, only another 100
tonnes is permissible up to the end of September -- less than several
tonnes a week.

Skeptics feel Central Banks can evade these restrictions.

But bulls suggest that an apparent termination of these sales, or
perhaps a touch more progress on the eurogold chart, will catch the
attention the attention of Europe's recently much enlarged hedge fund
community -- and surprise gold's long-standing but currently timid
friends.




Gold -- Sharefin, 23:14:26 06/16/05 Thu

Gold emerges as currency of choice as euro buckles

NEW YORK, June 16 (Reuters) - Collapsing confidence in the euro has become one of the principal factors behind the breakdown in the close correlation between gold prices and the dollar, suggesting gold may become something of a currency of choice this summer.

The euro's 2005 decline has accelerated in the last three weeks after voters in France and the Netherlands rejected a proposed European Union constitution, which has raised question marks over the drive for broader European political unity.

The resulting political crisis in Europe has been one of the main factors driving the dollar higher, normally a condition of lower dollar-denominated gold prices, and decoupling the relationship between the euro and gold.

Yet gold, whether priced in dollars, euros or yen, has strengthened markedly in the past few weeks leading some analysts to say that it may now be emerging as a genuine investment alternative in its own right.
~~~
The inverse correlation between the dollar and gold prices, or seen another way, the remarkably close link between gold and the euro, that has held steady for at least three years appears to be cracking.

"We've seen a de-coupling, mainly because of what's going on in the euro," said a senior bullion dealer at a bank in New York. This decoupling is "a little bit of a new phenomenon," certainly not seen since the dollar started to weaken and gold ticked steadily higher in early 2002, he said.

Indeed, the close relationship between the euro, dollar and gold in recent years wasn't just confined to prices and charts on a computer screen.

Until a couple of weeks ago, many banks traded gold from their foreign exchange desks, the dealer said. Now, however, the moves in gold and currencies have unnerved many traders, leading to a decrease in banks' proprietary gold trading and increase in investment fund activity.

"People are unwinding large (euro) positions," and gold is benefiting, the dealer said




Periodic Ponzi Update PPU 6/10/05 -- $hifty, 00:18:16 06/16/05 Thu

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,063.0 + Dow 10,512.63 = 12,575.63 divide by 2 = 6,287.81 Ponzi

Up 21.61 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 06:29:41 06/14/05 Tue

Newmont sees $525 gold price by Jan

The price of gold should rise to $525 an ounce by the start of 2006, a top executive of gold giant Newmont Mining Corp. said on Thursday. Pierre Lassonde, president of the world's largest gold mining company, cited an expected decline in the U.S. dollar by another 15 per cent against a basket of currencies, world economic growth strong enough to keep physical demand buoyant and a continuing gradual decline in gold output. Speaking at the Reuters Mining Summit, Lassonde said consumer and investor demand for gold is tenacious at current prices and world production is in a decline, which should hoist gold out of a current $400 to $475 range.




Gold -- Sharefin, 00:01:10 06/11/05 Sat

Gold up, dollar up: what does that tell you?

For the past couple of years the fall of the US dollar has been matched almost exactly by the advance in the gold price which has mirrored the devaluation of the US dollar against the euro.

But in the past few weeks this umbilical cord appears to have broken down. The US dollar has advanced to $1.21 to the euro from just below $1.25 and gold has pivoted upwards from an initial decline to $413 an ounce to $427 an ounce.

If this new relationship holds true then we could well see the yellow metal advancing back to the $455-an-ounce highs of late last year, and possibly onwards and upwards to the $500 barrier suggested by gold bugs. Yet at the same time the US dollar could continue to rally against the euro, or even begin to fall in value again.
~~~
The US economy is not in a sound condition. It is $24 trillion in debt, and still spending hard. Gold is the ultimate safe haven, arguably even safer than US treasury bonds, and that is another very good reason for gold prices to be rising.

For in a financial crash there would be very few assets that would escape unscathed, and indeed rally on chaos. Gold is the one sure bet against a global financial crash, and whether or not it actually happens, that is becoming more and more of a worry to investors, who will therefore buy more and more gold.

Hence the end to the euro-gold price relationship probably signals an important breakout in the gold price which will now rise to reflect recent general commodity price rises and significant caution in the investment community about the true global economic outlook.




Periodic Ponzi Update PPU -- $hifty, 21:00:04 06/05/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,071.43 + Dow 10,460.97 = 12,532.40 divide by 2 = 6,266.20 Ponzi

Down 42.94 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 18:36:17 05/31/05 Tue

Hallmarking gold

If there is one item of mass consumption where third-party quality assurance is vital, it is without doubt gold. Unfortunately, the infrastructure for providing such a guarantee through the assaying and hallmarking of gold is hopelessly inadequate.

India is one of the world’s largest consumers of gold and cheating at the retail level is rampant. Notably, of the country’s annual gold consumption of a massive 800 tonnes, as much as 80 per cent goes into jewellery fabrication for sale in the domestic and export markets.

Most surveys, including those commissioned by the consumer affairs department, have borne out the impression that much of the jewellery palmed off on unwary consumers as being of 22 carats purity is actually of far lower quality.




Gold -- Sharefin, 23:44:29 05/30/05 Mon

S.African Q1 gold output falls 12.8 pct on rand

JOHANNESBURG (Reuters) - Gold output in South Africa, the world's biggest producer, extended its decline in the first quarter, falling 12.8 percent year-on-year, the Chamber of Mines said on Monday.

Production fell to 73.8 tonnes (2.37 million ounces) during the first three months of 2005 from 84.6 tonnes in the same period last year, mainly as a strong rand made some shafts uneconomical, it said.

"In a similar vein to 2004 the South African gold mining sector remained under pressure due to falling rand revenues and rising production costs," a statement from the chamber, an industry group, said.

In late March, the country's fourth largest gold producer DRDGOLD closed its loss-making North West mines, which been hard hit by the buoyant rand, slashing output by a third.

Harmony Gold, the world's sixth biggest gold producer, has also struggled with loss-making mines and posted its seventh consecutive quarterly headline loss for the three months to March.

South Africa's other main gold producers are AngloGold Ashanti, which ranks second in the world, and fourth place Gold Fields Ltd.

The domestic gold price in the first quarter fell 7.7 percent year-on-year to 82,206 rand per kg while total production costs rose 5.2 percent to 88,012 rand/kg, the chamber said.
~~~
Adding to the pressure have been higher costs for water, steel, rail tariffs and wages, the chamber added.
~~~
Gold production last year was the weakest since 1931.




Fiat -- Sharefin, 22:58:26 05/30/05 Mon

Bank of Canada governor warns of global economic imbalances, US deficit

MONTREAL (CP) - A growing imbalance in the global economy, exacerbated by a rampant U.S. deficit as the rest of the world records surpluses, needs to be addressed soon before it gets resolved "in an abrupt, disorderly way," the governor of the Bank of Canada said Monday.
~~~
"The concern is that the longer these imbalances remain unresolved, the greater the chances that the ultimate resolution will be disorderly," Dodge said.




Periodic Ponzi Update PPU -- $hifty, 21:27:22 05/29/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,075.73 + Dow 10,542.55 = 12,618.28 divide by 2 = 6,309.14 Ponzi

Up 49.98 from last week.

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 19:30:42 05/25/05 Wed

China Demands Place at BIS Dinners Where Global Plans Are Laid

May 25 (Bloomberg) -- With $659 billion in foreign-exchange reserves, the People's Bank of China helps determine the fate of the world financial markets as it, along with other Asian central banks, buys U.S. Treasury bonds and finances America's fiscal deficit, which was a record $412.5 billion last year. If the Chinese government stopped buying American debt, it might trigger a surge in U.S. interest rates and a collapse in housing, equity and bond markets, says New York University economist Nouriel Roubini.

Even so, the People's Bank of China doesn't have a seat on the board of the Bank for International Settlements in Basel, Switzerland, the place where central bankers from all over the world come together to confront threats to global markets.

Japan is the only Asian country with a seat on the board, and officials at the Chinese bank, which is a BIS member, say the situation doesn't reflect economic realities.
~~~

The BIS, adds He, plays a very positive role in promoting cooperation among central banks.

The BIS, housed in an 18-story, bronze metallic, cylindrical tower, was set up in 1930 by the central banks of Belgium, France, Germany, Italy and the U.K., with the participation of Japan and the U.S., to administer Germany's World War I war reparations. It soon became an exclusive central bankers' club that operated out of public view; until the 1970s, it was housed in a nondescript former hotel near the Basel train station.
~~~
Governors of the 55 central banks that are BIS members gather at BIS headquarters for bimonthly weekend meetings.
~~~
Propping Up the Dollar

The group's decisions included propping up the dollar, the British pound and French franc when their countries threatened to break out of the Bretton Woods system of fixed-exchange rates, as well as the creation of a gold pool in which eight central banks intervened together in the gold markets.




Gold -- Sharefin, 18:43:05 05/25/05 Wed

Gold output takes centre stage in poorest nations

LONDON (Reuters) - Gold mining is becoming increasingly important to the world's heavily indebted poor countries, with a steep rise in output seen over the last 10 years, a report from the World Gold Council showed on Wednesday.

The industry-backed group's report said developing countries accounted for 72 percent of global bullion output last year.

Stripping out world number one producer South Africa, gold output from developing countries rose by more than 50 percent over the last decade, it added.

The strongest rise in output was seen in Highly Indebted Poor Countries (HIPCs), whose gold production rose 84 percent between 1994 and 2004.

Global gold mine output was 2,464 tonnes in 2004, figures from consultants GFMS show.

"Gold is generally associated with the rich and yet this latest report proves that, in relative terms, it is actually much more important to the poor," WGC CEO James Burton said in a statement launching the report.

Due to rising output, HIPC's dependence on gold exports has also increased significantly, with the precious metal now one of the most important exports, accounting for nearly eight percent of goods exports in 2003.




Gold -- Sharefin, 18:41:28 05/25/05 Wed

Urban Youth, Investors Boost China Gold Demand

NEW DELHI (Dow Jones)--China's consumption of gold has started rising after lower growth in the past several years, because of the popularity of 18-carat gold and the liberalization of bullion investment.

"Gold offtake in China started to pick up last year. A crucial step was the promotion of 18-carat gold, branded as K-gold by the WGC," said Jill Leyland, economic adviser to the World Gold Council, or WGC.
~~~
"Gold demand in China is expected to keep rising with a rising yuppie culture among 20- and 30-year-olds, where gold becomes a way to show off newfound wealth," said James Moore, analyst with TheBullionDesk.com.

According to WGC, China's gold demand is expected to rise 10% in 2005, from 234 tons a year ago.


Easy Investment Rules, Likely Yuan Revaluation To Help

While demand for gold jewelry is rising among younger Chinese, investment in bullion has been boosted buy the government's 2004 decision to allow major state-run Chinese banks such as the Industrial and Commercial Bank of China, Bank of China and Agricultural Bank of China to market investment products in bullion.

"Liberalization of the investment (market) has just happened. Demand is rising already, though the real impact may come in only later this year," said WGC's Leyland.

Another likely catalyst is the anticipated revaluation of the Chinese currency.

According to analysts, whenever the yuan is revalued, Chinese gold demand will rise as imports will likely become cheaper.

"This will enable Chinese people and institutions to import more gold," said Mark O'Byrne, director of Gold and Silver Investments Ltd, a Dublin-based investment company.

Many analysts believe China's total gold demand may equal Indian demand in 10-20 years.




Gold -- Sharefin, 07:19:41 05/23/05 Mon

Intervention against Gold Rising Sharply, GATA Says, Citing New Derivatives Report

DALLAS--(BUSINESS WIRE)--May 23, 2005--Government intervention against the gold price has risen sharply since the middle of last year, the Gold Anti-Trust Action Committee reported today.


The increase in intervention, GATA said, was disclosed last week in the Bank for International Settlements' semi-annual report on the issuance of derivatives by major banks and dealers in G-10 countries. The report was studied by GATA's consultants -- James Turk, founder of GoldMoney and editor of the Freemarket Gold & Money Report; Michael Bolser, editor of the Interventional Analysis newsletter; and Reginald H. Howe, gold market analyst and principal of Golden Sextant Advisers.

The new derivatives numbers from the BIS are "stunning" in regard to gold, Turk said, summarizing GATA's research. "In major banks and dealers in the G-10 countries, the total notional value of gold derivatives rose from $318 billion at mid-year 2004 to $369 billion at year-end.

"That $51 billion increase -- a 32-percent annual rate of growth -- occurred while gold miners were reducing their hedge positions.

"The reduction in hedge positions by mining companies should have resulted in a decrease in the aggregate position in the BIS report. That it didn't happen suggests that the international economist Frank Veneroso is right. Here's what Veneroso had to say in the March issue of Gold Newsletter:

There is only one possible explanation for why purchases of thousands of tonnes of gold in the futures and forwards markets do not blow the price of gold sky-high: The official sector must step in on gold price rallies as an offsetting forward seller.




Periodic Ponzi Update PPU -- $hifty, 22:11:20 05/22/05 Sun

Ponzi Chart

Periodic Ponzi Update PPU

Nasdaq 2,046.42 + Dow 10,471.91 = 12,518.33 divide by 2 = 6,259.16 Ponzi

Up 199.71 from last week !

Thanks for the link RossL !

Go GATA !

Go GOLD !

Hi Ho SILVER !

$hifty






Gold -- Sharefin, 00:19:56 05/14/05 Sat

Govt. decides to sell surplus gold and sliver

New Delhi, May. 13 (PTI): The Government today said it has decided to sell surplus gold and silver lying in its mints.

There is about five tonnes of surplus gold and 1670 tonnes of silver lying in Indian Government mints, Minister of State for Finance S S Palanimanickam, said in a written reply in the Lok Sabha.




Fiat -- Sharefin, 21:05:07 05/11/05 Wed

The Sky Darkens for Bondholders

Backfiring Bets on Derivatives, Corporate Executives' Allegiances Are Among Worries Raising Risk
~~~~
As hedge funds book losses and the prices of corporate securities
and the derivatives based on them move in unusual ways, investors
are waking up to troubling questions. One is whether the hedge
funds, some of which have made big bets on complex trades involving
credit derivatives, could spark a larger contagion that would affect
all markets. Another is whether the risk of lending to corporate
America is worth the return, which until recently had been at
historical lows.

There are other clouds hanging over bondholders' heads, such as the
risk that executives, goaded by low stock prices, will take actions
that favor shareholders over bondholders. Or that private-equity
firms will continue to pile debt onto the companies they own.

"We are entering into an 'adult-swim-only' environment now for
corporate bonds," says Mark Kiesel, a portfolio manager at Pimco, an
asset-management firm based in Newport Beach, Calif.
~~~
More important, though, bond and stock prices haven't moved in sync
with credit-default swaps -- or with one another. "Over the last
year, these credit-derivative indexes have been viewed as a life
preserver when we're in risky waters," said Geoffrey Gwin, a
portfolio manager at Group G Capital Partners, a hedge fund in New
York. "What we've seen is that when you're actually in the water,
these things don't float very well."
~~~~
Exactly how much money hedge funds are losing isn't known. Since
credit derivatives don't trade on public exchanges, those who bet
wrong can find it costly to unwind their bets. Hedge funds could
lose clients, especially if they have a poor performance in May,
forcing the funds to increase their sales of other assets to pay
exiting investors. "We expect a rush to the door to be painful,"
Merrill Lynch analysts warn.




Fiat -- Sharefin, 23:33:44 05/09/05 Mon

JAPAN’S MONETARY ALCHEMY MAY NOT YIELD GOLD

The most aggressive experiment in monetary policy ever conducted is now under way. Japan is printing yen in order to buy dollars in such extraordinary amounts that global interest rates are being held at much lower levels than would have prevailed otherwise. In essence, the Bank of Japan is carrying out the unorthodox monetary policy that the US Federal Reserve intimated it was considering in mid-2003. In other words, the BoJ is creating money and buying US Treasury bonds, which is helping to drive down US interest rates and underwrite US economic growth - and, by extension, global growth.

It is inconceivable that economic policymakers in Tokyo and Washington do not understand the impact that this unprecedented act of money creation is having on global interest rates and economic output. The amounts involved are staggering. Since the beginning of 2003, monetary authorities in Japan have created Y27,000bn with which they have acquired approximately $250bn - that amount is equivalent to more than 4 per cent of Japan’s gross domestic product. It also represents $2,000 for every person in Japan. In fact, it would amount to $40 per person if divided among the entire population of the world. Most importantly, it is also enough to finance almost half of America’s $520bn budget deficit this year.

The amount of new yen that Japan "printed" and converted into dollars during January 2004 alone was enough to finance 13 per cent of the US budget deficit. The investment of those dollars into dollar-denominated debt instruments clearly explains why the yield on the 10-year US Treasury bond fell last month in spite of the 10 per cent upward revision in the Bush administration’s budget deficit projections.

By accident or by design, Japan is carrying out the most audacious endeavour to conjure wealth out of nothing since John Law sold shares in the Mississippi Company in 1720. So far, the results have been impressive. Japan’s monetary alchemy has been the most important factor in allowing the US government to finance a $700bn deterioration in its budget over the past three years without pushing up US interest rates to levels that would pop the wealth-creating property bubble there.

US tax cuts have fuelled domestic consumption. In turn, growing US consumption has shifted Asia’s export-oriented economies into overdrive. China has played an important part in this process. With a trade surplus vis-à-vis the US of $125bn, equivalent to 9 per cent of its 2003 GDP, China has become a regional economic growth engine in its own right. China has used its large trade surpluses with the US to pay for its trade deficits with most of its Asian neighbours, including Japan. This recycling of China’s US dollar export earnings explains the incredibly rapid "reflation" now under way across Asia. Even Japan’s moribund economy has begun to show signs of export-oriented growth.

These developments highlight a fundamental question that has been debated over centuries: can governments create money and make the population richer without setting in motion a chain of events that ultimately ends in monetary chaos? We may be about to find out as Japan tests the hypothesis on an unprecedented and global scale. If this experiment in unorthodox monetary policy succeeds, then we have arrived at a new international monetary paradigm. Governments will have discovered how to finance limitless deficits through the creation of paper money, and we all can look forward to an age of great prosperity. If it fails - as have all past attempts to create wealth from thin air - then the world may not be able to avoid a severe and protracted economic slump as the extraordinary imbalances in the global economy ( caused by the explosion of fiat money in recent years ) begin to unwind.

In mid-2003, economists at the US Federal Reserve published a paper explaining why the Fed was not "out of bullets" despite having cut short-term interest rates to 1 per cent. That paper stated that "the Fed could even implement what is essentially the classic textbook policy of dropping freshly printed money from a helicopter," if necessary, to stimulate the economy.

Today, that helicopter is in the air. But, strangely, it is not the Stars and Stripes that is painted on its side, but rather the Rising Sun. That much is clear. What still is not quite discernible, however, is who is actually in the pilot’s seat.




Silver -- Sharefin, 19:15:55 05/08/05 Sun