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Gold -- Sharefin, 21:29:29 10/15/06 Sun

US ponders market manipulation

Markets have been moving in directions favourable to the Bush regime

Conspiracy theories have become the normal tittle-tattle of the financial markets. But ahead of the US mid-term elections on November 7, the blogging rants and radio phone-in hysteria have reached a pitch of intensity.

Are the commodities and securities markets being manipulated? Pre-election paralysis on the part of the US Federal Reserve is not unusual. Yet you do not require a suspicious mind to wonder whether smoothing and intervention may be happening on a bigger scale than normal.

President George Bush and the Republican Party are under pressure. The US army’s body count in Iraq is reaching unacceptable levels, let alone the death toll of locals. At home there are fears the country is heading for a serious recession. If the Republicans lose control of Congress, let alone the Senate, the lame duck tail-end of Bush’s second term could be calamitous.

The long-run economic problems are nothing new. Although growth has been excellent, inflation has been running well above target and with the balance of payments deficit being so large, the dollar is in continual danger of tanking. Personal savings are nil and the US is, in effect, being financially supported by China.

Until the summer, the trends appeared ominous. The Fed was raising short rates and inflation was climbing. The price of crude oil stopped short of $80 a barrel. Sales of new homes were dropping off a cliff.

Then, as if by magic, everything changed. The oil price went into reverse, tumbling to under $60 with favourable implications for the Consumer Price Index measure of inflation – although not for the core rate, excluding energy. Similarly, the gold bullion price – an indicator of the potential fragility of the dollar exchange rate – has crashed from its early summer high. The Dow Jones Average two weeks ago advanced to a high, at last beating the bubble top in January 2000.

However, the housing market poses perhaps the biggest threat. On some measures, US residential property inflation has turned negative on a year-on-year basis. The bubble is bursting.

It is hard to see how the American government could manipulate home values. And yet long treasury bond yields have been falling for weeks. This is significant because the 30-year fixed mortgage rate has tumbled 50 basis points since touching a peak of 6.8% in July. Mortgage refinancing, which can revitalise the spending power of US consumers, has begun to pick up in volume. Confident consumers are more likely to vote for the party in power.

However, the pattern is curious. Most markets have been moving in directions favourable to the Bush regime. Perhaps bonds and commodities have been anticipating a recession. But then why has the equity market climbed?

Conspiracy theories have abounded since Hank Paulson, boss of Goldman Sachs, was nominated in May to become treasury secretary. He had no political qualifications but a powerful reputation as a market fixer.

Was he brought in to shore up the financial and commodities markets ahead of the poll? Goldman Sachs has enormous market power: soon after Paulson’s transfer to Washington, it achieved annual records for revenues and earnings.

It is big in commodities. Strangely, in August, it cut the weighting of lead-free petrol in its influential GSCI commodities index. Since June, the weighting has been rolled back from 8.7% to 2.3%. Perhaps this was related to questions of market liquidity.

Analysts argued, however, that this reallocation triggered a sale and a sharp price reduction, as index trackers – running $60bn in commodity funds – cut their exposures to the new level.

Other cynical observers ask whether the US has been manipulating its strategic oil reserves stored underground in Louisiana. It ceased to top them up last April but there has been no attempt to dump crude on the markets.

The gold bullion price is controversial. Why has it slumped when global economic growth remains strong and inflation is running above target in Europe as well as the US? Gold bugs are seizing on the public admission this month by Bundesbank president Axel Weber that, although his institution was not a seller of gold, he had been asked by central banks to release reserves through swap deals – presumably so that they can sell borrowed gold and push the price down further.

The Fed, acting on behalf of the US treasury, is regarded as the prime suspect. After all, European central banks are not keen sellers of bullion: they fell more than 100 tonnes short of their 500 tonnes annual selling limit under the Washington Agreement, in the year ended September.

Intervention by governments in markets is not unusual. A “plunge protection team” of top officials has been used occasionally by the US authorities to stabilise securities markets. Governments regard it as normal to manage currencies, including gold, in that category. The US treasury has an Exchange Stabilisation Fund, the activities of which are kept under wraps. It would be irregular, though, if such techniques were to be used to pursue political objectives.

The temptation to put two and two together and make five should be resisted, however. Financial markets often behave abnormally when confronted with an uncertain political outcome. The Bush government may have been drawing on legitimate political favours, such as from the Saudis and possibly the Chinese.

Post-election responses by the markets may tell us something. If the Republicans perform well but markets tumble, we will draw conclusions about intervention.

Gold -- Sharefin, 22:26:28 10/09/06 Mon

SA gold production declining 5% annually

South African gold production fell from 430 tonnes in 2000 to 295 tonnes in 2005 as lower grades of ore are mined and reserves are seen to be being depleted, and the country is soon likely to be overtaken as the world’s largest producer of the yellow metal.

Production will see an annual decrease of 5% over the next few years as new projects will not succeed in replacing continued falling production at existing mines, says Alex Conradie, chief economist of gold and platinum group metals at the Department of Minerals and Energy.

The biggest recent drop in South African gold production took place from 2004 to 2005 when output fell by 12%.

The majority of gold mines in South Africa are projected to cease producing gold over the next 10 to 20 years, while the ultra-deep South Deep mine on the West Rand of Johannesburg has the longest projected life span of 60 years.

Fiat -- Sharefin, 11:54:18 10/05/06 Thu

Calgary trader, 32, among world's best

Canada's top-earning trader doesn't work on Toronto's Bay Street or for one of the big banks. Instead, he rocks the world's natural-gas markets from his hometown of Calgary, according to the just-released Trader Monthly ranking of best-paid traders.

Brian Hunter, 32, raked in an estimated US$75-million to US$100-million in 2005, good for a share of 29th spot in Trader Monthly's annual ranking. Mr. Hunter generated US$800-million in profit for his employer, Amaranth Group Inc., making him one of the world's top natural-gas traders, the magazine reported.

~~~~
Top 10 traders & their yearly income.......

1. T. Boone Pickens, 77
Firm BP Capital
Income* $1.5B+

2. Stevie Cohen, 49
Firm SAC Capital
Income US$1B+

3. James Simons, 67
Firm Renaissance Technologies Corp.
Income US$900M-US$1B

4. Paul Tudor Jones, 51
Firm Tudor Investment
Income US$800M-900M

5. Stephen Feinberg, 46
Firm Cerberus Capital Management
Income US$500M-600M

Bruce Kovner, 61
Firm Caxton Associates
Income US$500M-600M

Eddie Lampert, 43
Firm ESL Investments
Income US$500M-600M

8. David Shaw, 55
Firm D.E. Shaw & Co.
Income US$400M-500M

9. Jeffery Gendell, 46
Firm Tontine Partners
Income US$300M-400M

10. Louis Bacon, 49
Firm Moore Capital Management
Income US$300M-350M

Stephen Mandel, 50
Firm Lone Pine Capital
Income US$300M-350M

* Income figures are estimates
Source: Trader Monthly

Gold -- Sharefin, 05:50:30 10/05/06 Thu

Bank gold sales set to moderate

CENTRAL banks had become moderate sellers of gold, and were unlikely to renew a cap on sales once the existing Central Bank Gold Agreement (CBGA) expired in 2009, said GFMS, a UK-based metals consultancy.

Central banks were also tipped to sell less gold than the 2,500 tons over five years stipulated in the CBGA, it said. However, GFMS said there had not been “a major policy shift” in central bank attitudes towards gold as a reserve asset. “We are perhaps on the threshold of an era of more moderate net official sector selling,” it said.
~~~
The first CBGA was an attempt to limit significant official sector disinvestment from gold in the late nineties, controversially led by the Bank of England which sold about 400 tons – half if total gold reserves - at prices as low as $261/oz. Seven years after the Bank of England’s first public auction, gold is currently trading at $565/oz.

In the first two years of the current CBGA, about 909 tons of gold has been sold with France selling 256 tons as part of its proposal to disinvest 500 to 600 tons. Germany also announced plans to sell 600 tons but has not sold any gold because it can’t yet agree what to do with the proceeds. However, even if Germany were to sell its 600 tons, the CBGA signatories would be hard pressed to meet the 2,500 ton ceiling, GFMS said.

“Given that last year’s sales fell short of their annual quota, we are now quite sure that the 2,500 tons limit cannot be achieved,” said GFMS in a report.
~~~
Changes in the gold market also suggested that the renewal of the CBGA after 2009 was unlikely.

Gold -- Sharefin, 05:19:41 10/05/06 Thu

Gold Council to Offer Bullion-Backed Shares in Asia

The World Gold Council, a producer group supported by the biggest miners of the precious metal, will sell securities backed by the bullion in Singapore from Oct. 11, the first such offering in Asia.

The securities, known as an exchange-traded fund, are similar to those traded on the New York Stock Exchange, and will also be called StreetTracks Gold shares, the London-based council said today. Each share on the Singapore Exchange will represent one-tenth of an ounce of gold, and enables a holder to trade the commodity without taking physical delivery of it.
~~~
The launch ``will increase demand for gold, and it will bolster gold prices,'' said Ellison Chu, manager for the bullion desk at Standard Bank Asia Ltd. in Hong Kong. ``It's more convenient and easier for individual investors'' to trade shares in such a fund than to own the metal.
~~~
`Gold Affinity'

``There is a long history in terms of gold affinity in the Far East,'' said James Burton, the council's chief executive officer. The shares would appeal to investors who wanted to have gold in their portfolio, but didn't own it, he said.
~~~
The size of the assets linked to the nine other gold exchange-traded funds in the world, six of which are owned by the council, is about $11 billion, Burton said in an interview.

``We didn't think that we'd have $9.5 billion in three years,'' he said, referring to the council's funds, while declining to forecast future growth rates. The council launched its first gold exchange-traded fund in Sydney in April 2003.

After next week's launch, these securities may also be launched in other Asian countries, including China, he said.

``There will be a time when we go to China,'' he said. ``We need to keep contact with the market there, and then decide when the time is right.''
----------

US$11 Billion or approx 18 million ounces or 570 tonnes of gold or 20% of a years production. Not so much of a big deal so far.

Gold -- Sharefin, 05:00:40 10/05/06 Thu

Barrick says restricted supply supporting gold price

Barrick Gold Corp., the world's biggest producer of the precious metal, said ageing mines are restricting gold supply and supporting prices.

Global output may drop as mines age further, Gregory Wilkins, the chief executive officer of the Toronto-based company said on Thursday in notes made for a speech in Melbourne. Wilkins is “bullish” on the gold price, the notes said.

Soaring exploration costs have prompted gold miners including Barrick, which paid $10 billion to buy Placer Dome Inc. in March, to seek acquisitions to expand production. World mine output fell 1,5 percent in the first half of 2006, led by South Africa, Australia and the US, Wilkins said without giving a figure for last year.

“The rate of decline may increase given the age of the producing mines, costs and challenges to new developments,” Wilkins said. “Simple economics says a decreasing or flat gold supply means good news for the gold price.”

Gold output this year is forecast to be 2 524 metric tons, little changed from last year, the company said.

Annual mine production has been little changed at 2 500 tons for the past 10 years, according to GFMS Ltd

Gold -- Sharefin, 03:10:06 10/04/06 Wed

Unearthing India's glittering stockpile

If the women and temples of India were to sell every ounce of the 15,000 tonnes of gold they collectively possess, they could buy Citigroup at a 17 percent premium to the bank's market value.
Of course, it won't happen, and not just because selling 10 percent of the world's above-ground stock of yellow metal would depress the price so much that the sale proceeds would not be enough to buy the world's biggest financial-services company.

The reason that the idle wealth of India is not put to a productive use is a combination of economics, demographics, inheritance laws and a deeply rooted cultural affinity for gold.

With the onset last week of the annual Hindu festival season, a busy period for jewelry purchases, bullion prices have started climbing, increasing the cost of what is already a colossally wasteful national habit.

Financial innovation is needed, not to prompt Indian families to sell their grandmothers' bracelets - they will only do that to make a new pair of earrings - but to make better use of the money that is coming into precious metals either to speculate or to hedge against a drop in the value of paper money.

Indian Prime Minister Manmohan Singh wants US$150 billion (HK$1.17 trillion) of overseas investment in roads, ports and power stations. With the government last week announcing 8.9 percent economic growth in the quarter ended June 30, bankers are forecasting industrial credit requirement at US$175 billion over the next three years.

Most of this money - US$290 billion at the current gold price of more than US$600 an ounce - is already in India, lying in bank safe-deposit boxes, earning nothing. But far from channeling the gold into the financial system, households are spending more of their current incomes on adding to their hoard.

India is the world's largest consumer of gold by volume, with average annual demand of 676 tonnes during the past decade, three times more than in China. Gold futures rose 3 percent in New York over the past two weeks as Indian jewelers began stocking up.

Price alone does not deter Indian buyers. As the World Gold Council's recent research shows, when the precious metal became steadily more expensive from 2002 to 2005, Indians bought more of it. Demand for the yellow metal in India ebbs only when the price fluctuates too wildly, as it did in the first half of this year.

~~~
In the interim, jewelry demand may keep increasing as the economy and disposable incomes grow rapidly.

Gold may also benefit from India's youth bulge. With two-fifths of the current population - or more than 450 million people - aged 19 years or younger, there won't be a dearth of marriages over the next couple of decades.

Gold -- Sharefin, 07:38:11 09/17/06 Sun

Gold ETF guidelines to be announced shortly

Mumbai, Sept. 16 : Market regulator SEBI is busy giving finishing touches to the long-awaited detailed guidelines on the Gold Exchange Traded Fund (ETF), which will allow retail investors to buy and sell gold like units of mutual funds.
~~~
India will be the fourth country to have ETF in Gold after South Africa, the US and Australia, he said.

-------
More Fiat Gold...^O-O^...

Fiat -- Sharefin, 07:34:16 09/17/06 Sun

Rigging the Market; the secret maneuverings of the Plunge Protection Team

The Plunge Protection Team is a working group of high-ranking officials from the Dept. of the Treasury, Wall Street, and the Federal Reserve. Its purpose is to establish the protocols for preventing another incident similar to the stock market crash of 1987. In the event of a steep decline, the team is prepared to buy large amounts of equities in an effort to stabilize the market.

Some people believe that the government has no right to interfere in the activities of “free markets”. Others think it is a prudent way of staving off economic collapse. Still others believe that the intrusion of government, aided by the privately-owned Federal Reserve and the NYSE, naturally favors the larger institutional investors and creates an uneven playing field for small investors.

Whatever side one is on, it is proof-positive that “free markets” are merely a public relations myth with no basis in reality. The preservation of the system takes precedent over the lip-service to ideology; the “invisible hand” will always be overpowered by the manicured and mettlesome fingers of banking elites and Wall Street big wigs. This is their system and they’re not going to let it be obliterated by some foolish commitment to principle.

The Plunge Protection Team was first uncovered in comments by Clinton advisor, George Stephanopoulos on Good Morning America on Sept 17, 2001. Here’s what Stephanopoulos said:

“Well, what I wanted to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets….perhaps the most important the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges and they have been meeting informally so far, and they have a kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have in the past acted more formally… I don’t know if you remember but in 1998, there was a crisis called the Long term Capital Crisis. It was a major currency trader and there was a global currency crisis. And they, with the guidance of the Fed, all of the banks got together when it started to collapse and propped up the currency markets. And, they have plans in place to consider that if the markets start to fall.”

Stephanopoulos comments are hardly shocking. They simply underscore the fact that “deregulation” has created an economic monster which requires more and more tinkering from the stewards of the system. Without the stopgaps provided by the Plunge Protection Team and the actions of similar organizations which forestall business bankruptcies, (bailouts) the whole over-leveraged system would quickly crash and burn. The irony is that the same corporate kingpins and banking moguls who’ve benefited the most from removing the rules for prudent investment are now trying to create a safety net for when it inevitably begins to unravel.

It won’t work. The numbers are too large. Trillions of dollars are presently held in shaky hedge funds and derivatives markets. If the market takes a steep and sudden downturn, there’s nothing anyone will be able to do.

Gold -- Sharefin, 05:26:51 09/14/06 Thu

Hi Cyclist

We're heading for the ultimate buy before the next MAJOR rally.

Gold -- Sharefin, 05:24:05 09/14/06 Thu

Understanding the Gold Bull

The current gold bull market, like the gold bull markets that came before it, is about falling confidence in the currency of the realm, which is, in turn, linked to falling confidence in central banks and governments (the purveyors of the official currency). Falling confidence in the official money, falling stock market valuations and the increasing purchasing power of gold are all part and parcel of the same trend, and once a major trend begins with relative valuations at one extreme it will continue until relative valuations reach the opposite extreme.

When, during 1999-2001, the S&P500's P/E ratio reversed lower after reaching an all-time high and the gold price reversed higher after reaching an all-time low (in real terms) it became inevitable that new trends lasting at least 10 years had begun. Furthermore, there is no chance that government manipulation can prevent these trends from running their course. Empirical evidence that this is so was provided during the 1970s when concerted attempts by governments to stem the rise in the gold price failed dismally despite the fact that the official sector controlled a much larger proportion of the aboveground gold stock then than it does today.

During 10-25 year secular bull/bear markets there are shorter cycles that may or may not be consistent with the longer-term trends. In this regard, the cycle that began around this time last year is, in some important respects, a deviation from the long-term trend even though it has featured a rising gold price. Over the past year the gold price has not been driven higher by a general decline in confidence, but, instead, by a rising sea of liquidity that has also pushed many other prices upward. At least, this is our view and it is a view that is consistent with a) gold's poor performance relative to most industrial metals, b) the substantial narrowing of credit and yield spreads, and c) the concurrent sharp rises in the prices of investments that normally aren't positively correlated.

-
Timeless comments by Steve

Recovery start end of the week -- Cyclist, 14:20:35 09/11/06 Mon

Slaughter fest in the gold arena,bounce for two weeks till the end of September.Be prepared for a major move down and for gold to hit 475-500 depending of the bounce starting
end of the week.
All FWIW

Gold -- Sharefin, 06:51:47 09/05/06 Tue

India set to be world's gold hub

India, world's largest importer gold with over 800 tonnes of imports, is set to become a global hub for the precious metal.

"The government is taking and will continue to take all possible measures aimed at making India the gold hub of the world," Company Affairs Minister P C Gupta told a global gold summit organised by Assocham.

Till last year, India did not figure as a major trading center of gold and silver in the international market despite being the world's largest importer and exporter of value added jewellery items, he said.

With commencement of future trading in gold, the scenario appears to be changing, Gupta said adding India thus is no longer be looked as a price taker or price seeker of the gold.

As per estimates of World Gold Council, the annual Indian demand for the precious metal in recent years has been over 800 tonnes, most of which is used for fabricaction, he said adding, "we, therefore, have the potential of becoming a price-setter in the international market."

Gold -- Sharefin, 08:57:31 08/24/06 Thu

Ruff Roars

Ruff is the third-ranked performing investment letter over the past 12 months, according to the Hulbert Financial Digest, up 61.47 % in a period during which the Dow Jones Wilshire 5000 has gained only 5.43%.
~~~
Ruff has summarized his current investment stance succinctly: "Investment vehicles to avoid: Stocks, bonds, fixed-return investments like utilities, REITs, residential real estate, ARMS (adjustable rate mortgages). Investment winners in bull markets: Gold, silver, copper and other base metals, uranium."

Simply put, Ruff just appears to think we've gone back to the 1970s. He writes: "Gold and silver are now early in a historic bull market that will dwarf the 500-1700 % profits we made in the '70s. Gold will hit at least $2,172 and $100 silver is inevitable." (These are Ruff's calculations of the metals' 1980 peaks adjusted for inflation).

Despite his gold bug background, Ruff claims this is a big change for him. He wrote recently: "I didn't recommend gold or silver in the Ruff Times for 22 years, until December 2003. We sold gold at $750 and $35 respectively in 1980, just two weeks before the high."
~~~
Instead, Ruff writes: "The most powerful, completely essential factor affecting gold is monetary inflation ... the most compelling force affecting silver today is the supply/ demand equation ..."

Gold -- Sharefin, 04:20:15 08/24/06 Thu

Bundesbank rejects gold reserves selloff

Frankfurt - Bundesbank president Axel Weber yesterday ruled out the use of Germany's huge gold reserves to help fill gaps in the federal budget.

Asked by Bild, the mass-circulation daily, whether the German central bank could simply sell some of its gold to plug the gaping holes in the budget that the government wants to fill by means of an increase in valued added tax, Weber replied: "You can't be serious."

The Bundesbank chief continued: "Such one-off measures are never a good idea. Drawing on capital is not an alternative. It is better to press ahead with consistent debt reduction. And here a lot can be done on the spending side."

Germany has 3 428 tons of gold, worth about E54 billion (R489 billion) at current market prices, making it the second-largest holder of gold reserves in the world after the US. In addition, it has E28 billion in reserves of foreign currencies, such as the dollar and the yen.

The issue of what to do with such massive reserves has frequently led to tension between the government and the central bank, with politicians calling for the sale of some of the gold, particularly in view of recent rises in the gold price.

But the Bundesbank has long opposed such requests, not least because a sale could be seen as a sign that it is vulnerable to political pressure.

Weber told the Bild that the Bundesbank was not opposed in principle to a sale of some of the gold.

"I could imagine shifting some of our reserves from gold into foreign currency," he said. "But we don't want to tap into Germany's currency reserves. Gold is part of Germany's currency reserves, of which we are the guardian. They are an important factor behind confidence in the stability of the euro."

Fiat -- Sharefin, 21:48:49 08/20/06 Sun

Stagflation in control of world economies especially in America and Europe

Stagflation is in control of world economies especially in America and Europe. The new term to watch is hyper-stagflation where economy registers less than one percent growth while inflation goes way above 5% and even 10%.

The US dollar and European currencies will depriciate against gold rapidly in that environment. Jobless recovery will tun into job-depleting recession with escalating commodity prices.

Federal reserve will lose control over the interest rate as the yield curve flattens out.

Stock markets and corporate profits will collapse because rising material input prices, stagnating productivity rise and lack of buying power of the consumers totally submerged in debt.

Fiat -- Sharefin, 21:24:35 08/20/06 Sun

Updated Summary of Current Outlook

Due to the inability of the government or central bank to stabilize this
environment, risks of the current situation evolving into a
hyperinflationary depression are extraordinarily high. Such a development
involving the world's reserve currency would lead to a collapse of the
current global currency system. In order to regain public confidence,
monetary authorities likely would structure gold into the base of any new
international currency system.

The unfolding inflationary recession is the worst of all worlds for the
financial markets. Particularly hard hit will be the U.S. dollar, with
significant downside moves looming for both equity and bond prices. Despite
recent extreme volatility, the price of gold is headed much higher. At such
time as the system re-stabilizes, post-crisis, there will be exceptional
investment opportunities for those who have been able to preserve their
wealth, capital and liquidity.

MARKETS PERSPECTIVE

The key financial markets remain in "transition" and are anticipating lower
inflation and interest rates, and stronger corporate profit performance,
than will come to pass. In terms of the broad financial market picture
through year-end, the U.S. dollar should sell off sharply on a
trade-weighted basis, particularly against the Swiss franc. As a partial
result of the mounting dollar and inflation difficulties, the domestic yield
curve will turn positive and steepen sharply, due particularly to rising
long-term interest rates. The combination of the weak dollar and higher
rates should not play out happily among equities. Concerns tied to the
dollar, inflation and global instabilities suggest an upbeat year-end for
the precious metals.

As to Federal Reserve policy, dollar and inflation woes are good bets to
trigger renewed hikes in the targeted federal funds rate, before 2007. What
drives present-day Fed policy is an effort to avoid -- at least to delay as
long as possible -- a global financial panic and currency-system collapse.
As with the recent "pause" in rate hikes, the Fed's actions are designed to
placate the financial markets as much as possible and do not encompass a
planning horizon much beyond a week or two. Accordingly, the Fed most likely
will focus on the dollar as a policy guide, resuming rate hikes when they
are deemed necessary to keep the dollar from entering freefall.

Equities -- The stock market continues to prove that it is the least
rational of the financial markets, with the Dow Jones Industrial Average
moving to a three-month high as we go to press.

Other than as something of a mirror of excessive inflation, stock prices are
relatively strong despite underlying fundamentals that are miserable. The
economy remains in an inflationary recession, and that concept has started
to gain recognition among a growing number of analysts. Implications are for
declining corporate profits and competing investment opportunities in the
credit market as interest rates rise. With a terrible dollar tumble ahead,
investment opportunity competition also will be had from assets denominated
in something other than U.S. dollars, as well as from gold.

Once again, fall is approaching, and the squirreling season is almost upon
us. I once retained a mass psychologist in an effort to explain why stock
market crashes tended to take place in October and November. His answer was
that humans had a vestigial squirreling instinct. As the squirrels start
gathering acorns for the winter, so too do investment strategies among
humans sometimes go through a shift.

When the dollar takes its major tumble, and foreign holdings of dollar
assets get dumped at a near-panicked rate, the ensuing U.S. liquidity crisis
should be enough to take stock prices to relative levels that only could be
viewed as nightmarish by the Pollyanna crowd. Such could happen anytime,
with no warning; the current circumstance also could linger beyond year-end.

Gold -- Sharefin, 20:43:40 08/20/06 Sun

European banks may miss gold target

Europe's central banks are expected to sell only about three-quarters of the full quota of 500 tonnes of gold in the second year of an agreement that regulates bullion sales, analysts said.
~~~
Europe's Central Bank Gold Agreement (CBGA) was negotiated in 1999 to stabilise prices when gold was languishing below $US300 because of the attraction of other investments.

The pact, agreed in 2004, raised the limit on gold sales by its 15 signatories over five years to 2,500 tonnes at a rate of 500 tonnes a year, from 2,000 in the previous 1999-2004 period.

The banks sold the full quota of 2,000 tonnes during five years of the first agreement and 497.2 tonnes in the first year of the current pact.

"According to the data released, the signatories have sold around 338 tonnes up to last Friday. This would not include any forward sales, which have not yet matured," Jill Leyland, economic adviser to the World Gold Council, said.

Gold -- Sharefin, 21:38:00 08/08/06 Tue

The Midas Bug -- the bacterial alchemy of gold

Bacteria play an important role in the formation of gold nuggets in Australia according to new research published this month in the international journal Science.

Dr Reith's research has shown that bacteria play a significant role in the formation of secondary gold grains.

His study of gold grains from the Tomakin Park and Hit or Miss gold mines in southern New South Wales and northern Queensland, respectively, led to a series of discoveries, which showed that specific bacteria present on these gold grains precipitate gold from solution.

"The origin of secondary gold grains is a controversial topic that is widely debated within the scientific community," Dr Reith said.

"There are those who believe the grains are purely detrital, while others believe they form by chemical accretion.

"A third theory suggest that microbial processes are involved in gold grain formation which may be responsible for one of the largest gold deposits in the world, the Witwatersrand deposit in South Africa."

Applying molecular biology techniques, Dr Reith discovered a living biofilm on the surface of gold grains collected. DNA profiling of this biofilm identified 30 bacterial species with populations unique to the gold grains when compared to the surrounding soils.

One species was identified on all of the DNA-positive gold grains from both locations. DNA sequence analysis of this species identified it as the bacterium Ralstonia metallidurans.

"The next step was to see if we could observe gold precipitation in the presence of a culture of this bacteria," Dr Reith said.

"By placing a culture of the R. metallidurans in the presence of dissolved gold, which is highly toxic to microorgansims, I observed active gold precipitation.

"A unique attribute of R. metallidurans is that it is able to survive in concentrations of gold that would kill most other micro-organisms."

This research has significance for the mineral exploration industry – as current models of gold formation do not include a biological mechanism.

"There may be new opportunities for the bio-processing of gold ores now that we have discovered bacteria that precipitants gold out of solution," Dr Reith said.

Gold -- Sharefin, 22:26:33 07/14/06 Fri

Bulls bet on gold to top $1,000

A sudden surge in demand for gold options cashable at over $1,000 an ounce is the clearest sign to date that hedge funds and savvy traders are betting on a big rise in bullion prices.

UBS said investors had begun to show keen interest in "call" options to expire in December with strike prices of $1,000 an ounce and above.

The bank said buyers had even emerged for options dated late 2007 with a strike price of $2,500.

John Reade, the bank's precious metals strategist, said: "Clearly some options traders are positioning themselves for very large moves higher."

Fiat -- Sharefin, 08:27:24 07/06/06 Thu

Henry Paulson and the Five Circles of Economic Hell

As onerous as they are, the deficits described in Circle Three, above, constitute only a small fraction of the total indebtedness of the U.S. economy. The official “national debt” is approaching $9 trillion, as noted, a substantial figure, to be sure. But the government’s “unfunded liabilities”—obligations it has committed to pay but for which there is no known source—are estimated at an incomprehensible $58 trillion. Add in revolving consumer debt, mortgage debt, and corporate debt, and the nation’s total obligations exceed $90 trillion, more than seven times GDP. At the time of the 1929 stock market crash, total debt stood at two times GDP. These obligations will never be paid.

The reason is that the job drain from the U.S., while it looks like a torrent now, is still only a trickle. Though the U.S. won the Cold War, it is rapidly losing the Cold Peace, which began when China ended its communist isolation and joined the world market. The average wage in China is $.57 per hour. China has more than half a billion workers meaning the drain of good jobs from the U.S. to China can go on indefinitely—and will. Alan Blinder, a Princeton economist and former Governor of the Federal Reserve Board, has estimated that as many as 56 million U.S. jobs are susceptible to outsourcing of the sort that has already dealt such damage to U.S. incomes.

But this is exactly what Bush and Paulson and their fellow “conservatives” intend. This is the magic of “globalization” that the Heraldic voices of Thomas Friedman and others eulogize as inevitable. Globalization means liberating capital from all obligations to national well being, freeing it to pursue only the highest returns it can find, no matter where they may lie. That means seeking out the lowest paid labor and shifting all possible jobs there. That is China. Or India.

The U.S. worker and the U.S. economy will be left to their own devices. All social safety net systems must be dismantled for, given the colossal debt, they can no longer be afforded. These include welfare, unemployment and disability insurance, pensions, health care, Medicare, Social Security, job retraining, and eventually, education. The U.S. is a high cost economy in a world where, when capital is perfectly mobile, low cost wins. If capital is to be honored, then the U.S. must be ballasted, abandoned, in the way the British economy was in the aftermath of World War II. It will be milked of its remaining assets—that is what the huge run-up in debt is intended to do—and then thrown away.

The only government programs of substance that will be maintained will be police and military systems. The Patriot Act, with its massive recissions of civil liberties, is not so much directed at foreign terrorists as it is at future domestic dissidents, citizens who dare confront these putative inevitabilities with demands for democratic (as opposed to capitalist) recourses. The military, of course, is needed to carry out the nakedly colonial expropriations such as Iraq that remain the last hope of America to compete in the world: by controlling the oil, the substance without which no industrial civilization can operate.

Paulson’s job, then, is to arrange the write down of debt that must accompany the effective bankruptcy of the U.S. He will have to promise an IMF-like fiscal austerity to foreign lenders to keep the funding flowing until there is nothing left to take. This will mean draconian cuts in social spending, no tariffs, and the removal of all remaining controls on the mobility of, and returns to, capital. The dollar will be precipitously devalued with the consequence of massive inflation and stratospheric interest rates. These will only accelerate the decline. A new international reserve currency, based on a basket of currencies including the Euro, the Yen, the Chinese Yuan, and the dollar, will be devised.

Gold -- Sharefin, 05:57:58 07/06/06 Thu

Chinese reserve diversification buzz grows louder

BEIJING (Reuters) - The opening of an office in Shanghai to help manage China's foreign exchange reserves could accelerate its long-awaited diversification into assets such as gold and overseas equities, economists said on Tuesday.

Calls for China to wring higher returns from its hoard, believed to be invested mainly in low-yielding government bonds, are rising almost as quickly as the reserves, which an official newspaper has said swelled $30 billion in May to $925 billion.

Xia Bin, head of the financial research institute of the Development Research Center, a cabinet-level think tank, joined in the chorus on Monday, saying China should both set up an international investment fund and increase its gold holdings.
~~~
He Fan, an economist at the Chinese Academy of Social Sciences, a top government think tank, said he was in favor of China owning more gold. He said it now had some $12 billion in bullion, about 1.3 percent of its reserves, a proportion also cited by central bank officials.

"I think the authorities must have realized the need to raise gold reserves, but the problem is how to achieve it," he said.

China's domestic gold output was too small to allow China to add significantly to its 600 tonne holding, while purchases on the open market would be impossible to keep secret.

"I think it's appropriate to increase the proportion to 10-15 percent to match that of some European countries. But that will translate into large demand for gold, which could push bullion prices up sharply on the international market," He said.
~~~
For that reason, Wang at Bank of America said he expected China to increase its gold holdings slowly and perhaps hide its hand by buying through the State Reserve Bureau, which manages China's stocks of strategic materials, or other state companies.

"Such transactions may not be reflected on the central bank's balance sheet," he said.

Green at Standard Chartered speculated that the bank had indeed already been buying surreptitiously.

He said the markets were awash with rumors that the central bank's gold holdings were much greater than the published total, which has not changed since the end of 2002.

Silver -- Sharefin, 01:46:11 07/02/06 Sun

Here's the stats showing the largest moves in silver - up & down - in price & percentage.

The same can be said for silver as for gold - expect more volatility & extreme moves ahead.

Viva La Bull!!!

30 largest dollar upmoves:
12/27/1979 2.04
04/28/2006 1.04
01/07/1980 1.025
01/02/1980 1.025
09/22/1980 1.025
10/06/1980 1.025
01/21/1980 1.02
02/11/1980 1.02
01/14/1980 1.02
12/31/1979 1.015
02/08/1980 1.01
01/15/1980 1.01
02/29/1980 1.01
02/05/1980 1.01
01/10/1980 1.01
12/18/1979 1.01
09/16/1980 1.01
04/08/1980 1.01
01/18/1980 1.005
01/17/1980 1.005
01/16/1980 1.005
02/07/1980 1.005
02/06/1980 1.005
01/11/1980 1.005
01/04/1980 1.005
01/03/1980 1.005
12/28/1979 1.005
09/11/1980 1.005
09/09/1980 1.005
05/02/1980 1.005

30 largest dollar downmoves:
04/20/2006 -1.99
06/13/2006 -1.44
04/24/2006 -1.19
10/20/1987 -1.025
04/30/1980 -0.995
06/11/1980 -0.995
06/10/1980 -0.995
01/24/1980 -0.995
01/23/1980 -0.995
12/11/1980 -0.99
04/03/1980 -0.99
03/27/1980 -0.99
03/21/1980 -0.99
03/18/1980 -0.99
03/11/1980 -0.99
01/25/1980 -0.99
01/22/1980 -0.99
02/28/1983 -0.99
04/02/1980 -0.99
03/28/1980 -0.99
03/25/1980 -0.99
03/19/1980 -0.99
03/14/1980 -0.99
03/13/1980 -0.99
02/20/1980 -0.99
03/07/1980 -0.99
03/01/1983 -0.985
03/31/1980 -0.985
03/26/1980 -0.985
03/20/1980 -0.985

30 largest percentage upmoves:
03/30/1995 9.61%
06/29/1982 8.64%
04/28/2006 8.34%
03/19/1985 8.15%
12/27/1979 8.05%
07/19/1988 7.96%
05/02/1980 7.96%
12/10/1997 7.71%
09/28/1999 7.46%
08/18/1982 7.38%
07/08/1982 6.78%
08/20/1982 6.74%
09/10/1987 6.68%
04/25/2006 6.67%
04/20/1987 6.65%
04/17/1995 6.49%
05/06/1994 6.46%
09/02/1982 6.40%
06/02/1988 6.36%
07/20/1982 6.34%
03/07/1983 6.27%
04/08/1980 6.27%
09/02/1987 6.20%
04/14/1987 6.15%
02/12/1997 6.11%
04/23/1987 6.09%
09/19/2001 6.08%
08/02/1982 6.05%
05/04/1987 6.05%
06/02/1980 6.00%

30 largest percentage downmoves:
04/20/2006 -13.75%
06/13/2006 -13.01%
10/20/1987 -12.15%
04/21/2004 -11.13%
12/08/2004 -9.38%
04/24/2006 -9.18%
08/05/1993 -9.13%
05/09/1995 -9.00%
08/07/1987 -8.22%
03/01/1983 -8.17%
04/27/1987 -8.08%
02/28/1983 -7.59%
04/28/1987 -7.56%
07/25/1988 -7.43%
06/14/1982 -7.37%
04/13/2004 -7.22%
03/31/1986 -7.16%
04/30/1980 -6.97%
06/08/2006 -6.85%
07/28/1982 -6.65%
08/27/1990 -6.56%
07/24/1991 -6.55%
03/04/1983 -6.41%
08/09/1982 -6.40%
10/29/1987 -6.37%
02/25/1985 -6.34%
05/15/2006 -6.32%
06/17/1982 -6.28%
06/22/1987 -6.21%
07/07/1997 -6.18%

Gold -- Sharefin, 01:41:34 07/02/06 Sun

Here's the stats showing the largest moves in gold - up & down - in price & percentage.
As you can see the recent volatile moves (up & down) are extreme & compare back to the 1980's when gold was in full flight.

Friday's $27.10 rise is the largest upmove since 1980 - also the largest upmove since this bull market began in 1999. Large moves like this are quite often associated with topping patterns but in this case what we are observing is a breakout from a correction within a bull market. This bodes that the future moves up in gold will potentially be volatile & large in nature as we move forwards. Providing that the cabal doesn't attack gold yet again we here have the potential for the prior highs in gold being taken out in short order. Viva La Bull!!!

30 largest dollar upmoves:
01/29/1980 50.3
03/19/1980 50.3
01/17/1980 50.2
01/16/1980 50.2
01/18/1980 44.8
01/15/1980 37.8
12/27/1979 33.1
12/12/1980 28.8
03/28/1980 28.4
03/21/1980 27.1
06/30/2006 27.1
04/07/1980 26
09/28/1999 25.9
09/22/1980 25.8
01/02/1980 25.8
09/08/1980 25.8
01/14/1980 25.7
02/05/1980 25.4
01/03/1980 25.3
02/06/1980 25.3
04/08/1980 25.3
10/11/1982 25.3
10/09/1979 25.2
01/11/1980 25.2
06/27/1980 25.2
07/22/1980 25.2
08/20/1980 25.2
10/07/1982 25.2
03/20/1981 25.2
10/10/1979 25.1

30 largest dollar downmoves:
01/22/1980 -49.6
01/23/1980 -49.6
01/24/1980 -49.6
01/25/1980 -49.5
03/17/1980 -49.1
06/13/2006 -44.3
03/13/1980 -37.1
03/10/1980 -36.4
05/24/2006 -36.2
01/17/1991 -30.6
08/27/1990 -26.8
05/15/2006 -26.8
10/11/1979 -26.4
02/04/1980 -26.3
01/30/1980 -26
09/09/1982 -24.9
02/25/1983 -24.9
06/10/1980 -24.8
07/15/1980 -24.8
07/30/1980 -24.8
01/08/1980 -24.7
03/26/1980 -24.7
03/27/1980 -24.7
10/23/1980 -24.7
12/11/1980 -24.7
01/07/1981 -24.7
09/26/1980 -24.7
11/06/1980 -24.7
12/10/1980 -24.7
02/22/1980 -24.6

30 largest percentage upmoves:
03/19/1980 9.77%
09/28/1999 9.11%
03/19/1985 8.03%
02/04/2000 7.98%
01/29/1980 7.45%
07/09/1982 7.09%
01/16/1980 7.04%
10/09/1979 6.59%
01/17/1980 6.58%
12/27/1979 6.48%
10/10/1979 6.16%
10/07/1982 6.14%
09/02/1982 6.00%
10/11/1982 5.87%
09/03/1982 5.66%
01/15/1980 5.60%
03/28/1980 5.57%
01/18/1980 5.51%
05/18/2001 5.44%
06/07/1982 5.33%
08/18/1981 5.23%
09/27/1999 5.14%
09/14/2001 5.08%
02/13/1975 5.07%
04/07/1980 5.04%
10/01/1979 5.01%
12/12/1980 5.00%
03/02/1983 4.98%
04/05/1982 4.95%
08/26/1982 4.94%

06/30/2006 4.60%

30 largest percentage downmoves:
03/17/1980 -8.81%
01/17/1991 -7.47%
06/13/2006 -7.30%
01/25/1980 -6.78%
01/24/1980 -6.36%
08/27/1990 -6.32%
10/11/1979 -6.10%
03/13/1980 -6.08%
09/02/1975 -5.99%
01/23/1980 -5.98%
03/26/1990 -5.85%
03/10/1980 -5.73%
01/22/1980 -5.65%
08/05/1993 -5.61%
08/27/1982 -5.55%
02/28/1983 -5.38%
05/24/2006 -5.37%
05/31/1983 -5.33%
04/19/1982 -5.28%
02/25/1983 -5.16%
09/24/1982 -5.10%
10/24/1997 -4.99%
09/09/1982 -4.97%
10/04/1982 -4.87%
10/04/1979 -4.86%
09/29/1982 -4.83%
02/22/1983 -4.72%
11/15/1978 -4.68%
03/27/1980 -4.62%
07/15/1976 -4.56%

Fiat -- Sharefin, 21:54:14 06/29/06 Thu

Richard Russell must have seen the movie America From Freedom To Fascism

Coming soon to a movie house near you.

Snipped
----- Original Message -----
In his Dow Theory Letter of June 28, 2006, Richard Russell presents below
the most concise explanation of the Federal Reserve scam I have ever
seen, even my cousin should be able to understand it. The fact that the
politicians and banksters operating this scam are not prosecuted for
criminal racketeering (RICO) is prima facie evidence that justice does
not prevail for everyone throughout this great land. Yet, in spite of
this massive theft of resources from American workers somehow the system
still functions, its a miracle! JLK
===================================================

THE FED - The papers are full of articles regarding what the Fed might do
or not do with short rates. But how is it that nobody ever questions the
very worth or non-worth of the Federal Reserve itself. The Fed has never
been audited. It's legitimacy, it's worth, is NEVER questioned - the Fed
appears immune to questions. One problem is that nobody understands what
a monstrous fraud the Fed is.

When the US government needs money, it doesn't just issue United States
Federal Notes (dollars), which it certainly could do. In other words,
incredibly, the US government does not issue its own money. Instead, the
government issues bonds, thereby loading itself with ever increasing
interest-bearing debt. Here's how this disgrace works -

The US government issues a billion dollars of interest-bearing US
government bonds. It takes the bonds to the Federal Reserve - the Fed
accepts the bonds and places one billion dollars in a checking account.
The government then writes checks to the total of a billion dollars
against the checking account - a billion dollars that has been created
"out of thin air."

Meanwhile, the debts of the US grow and grow. And the government pays
interest on the bonds. Yet that isn't enough for the US government. It
taxes its citizens, taking away a percentage of their passive and active
earnings. And as if that isn't enough, it robs its citizens via
inflation, so that as their living costs rise, simultaneously their
savings are whittled away.

The Fed has been in existence for 93 years. In those 93 years the Federal
Reserve Notes that the Fed issues have lost 98% of their purchasing
power. To cover up this monumental scam, we hear the Fed blather and
bluster about how worried they are about the current inflation rate. The
current inflation rate is the cover-up; what kills us is the systematic
year-after-year loss of purchasing power of those billions of fiat
Federal Reserve Notes.

So the system allows this semi-private banking system to create money out
of absolutely nothing (all of it a loan to our government) and charge
interest on this debt forever. Thus, the Fed collects interest on the
government's own money. It's a system that is beyond belief, but one that
runs the life blood of the nation - the life blood of a nation is its
money. A communique sent from the Rothschild investment house in England
to its associates in New York noted, "The few who understand the system.
... will either be so interested in its profits or so dependent on its
favors that there will be no opposition from that class, while on the
other hand, the great body of people, mentally incapable of comprehending
... will bear its burdens without complaint."

Silver -- Sharefin, 21:52:50 06/29/06 Thu

Gold exchange to start silver trade

SHANGHAI: Shanghai Gold Exchange is about to introduce silver trading for the first time after months of planning.
~~~
The launch underscores the rapid development of the silver market in China, which is widely regarded as potentially the most important consumer, producer and exporter of the metal.

The exchange, which currently deals with platinum as well as gold, is expected to trade silver spot and spot-deferred contracts.
~~~
The country's silver consumption, mainly used by electronics and chemical firms, was estimated at 2,600 tons last year. This compares with only 900 tons two decades ago.

The country is also an important producer and exporter of the metal.

Silver production in China has been soaring at 10 per cent annually since 2000, when the State monopoly covering the purchase and marketing of the metal ended.

Last year production reached 6,000 tons.

Fiat -- Sharefin, 06:47:36 06/29/06 Thu

GEORGE LET PLUNGE SLIP

GEORGE Stephanopoulos knows all about the Plunge Protection Team, the secretive organization made up of Wall Street bankers and top administration officials whose job it is to come to the rescue of a faltering stock market.

Here's the bombshell statement that an obviously nervous Stephanopoulos, once President Clinton's senior adviser on policy and strategy, delivered on ABC's "Good Morning America" on Sept. 17, 2001 - the day the stock market reopened after being shut for nearly a week because of the 9/11 terrorist attacks.

The statement was barely noticed in the excitement of that time, so I will quote it here in full.

I'm also citing it verbatim because Stephanopoulos blurted it out in the heat of that moment (stocks were struggling that morning) and because no other person with firsthand knowledge of this organization is likely to ever repeat these words.

"And perhaps the most important, there's been - the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges, and there - they have been meeting informally so far, and they have kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem.

"They have, in the past, acted more formally.

"I don't know if you remember, but in 1998, there was a crisis called the Long Term Capital crisis. It was a major currency trader and there was a global currency crisis. And they, at the guidance of the Fed, all of the banks got together when that started to collapse and propped up the currency markets. And they have plans in place to consider that if the stock markets start to fall."

The most important line is the one about the "informal agreement among major banks to come in and start to buy stock if there appears to be a problem."

Gold -- Sharefin, 06:40:51 06/29/06 Thu

Nymex Looks to China For Trade in Gold Futures

BEIJING -- The New York Mercantile Exchange is hoping to begin the
trading of gold futures contracts in China, a senior official said.

In an interview, John Hanemann, vice chairman of the governors
committee of Nymex's Comex Division, said the exchange has been in
talks about launching its gold futures contracts with Chinese
exchanges. China, meanwhile, has been looking to further develop its
local derivatives markets.

Gold -- Sharefin, 19:17:37 06/28/06 Wed

Currency instability makes gold shine

MONTREUX, Switzerland, June 27 (Reuters) - Gold represents a great opportunity for investors in today's world and may become the asset of choice because of instability in paper currencies, Anthony S. Fell, chairman of RBC Capital Markets said.

"Investors forget that bear markets start when the skies are blue and bull markets start when there is despair and apathy in the air," he told a precious metal conference on Tuesday.

"The vast majority of investors are so short term orientated, they just don't see the big picture unfolding."

Gold prices surged to a 26-year peak of $730 an ounce in mid-May but fell more than $150 over the next month on a rise in the dollar and a general selloff in the commodities sector.

"After a twenty year bear market, the past few years represent a major positive turning point in the fundamental long term outlook for gold bullion," he said.

There was more inflation in the pipeline than generally anticipated and the paper currencies
were becoming unreliable.

Gold is often seen as a hedge against inflation.

"Notwithstanding the recent downdraft in the gold price, gold has been in a clear uptrend against
the U.S. dollar, the euro, the yen and the Indian rupee."

"I believe the stature and reputation of the dollar as store value has been greatly diminished and undermined over the past decade," he said.

Gold prices generally move in the opposite direction of the U.S. currency as they are often considered as an alternative investment.

U.S. ECONOMIC SLOWDOWN

Fell said the U.S. economy was headed for a slowdown later this year and there was a 50 percent chance of a recession in 2007, led by housing slowdown.

He said the U.S. Federal Reserve might reduce interest rates in a year from now and there was a risk of a broad move out of dollar-based assets.

"Looking ahead, it is my view that gold bullion is now in the very early stages of a long term...bull market which will carry it to much higher levels over the coming decade," Fell said.

"Gold bullion is the one investment and long term store of value which cannot be adversely impacted by corrupt corporate management or incompetent politicians -- each of which is in ample supply on a global basis," he said.

Some central banks and major investors would gradually favour gold as a core alternative investment.

He said there were indications that some Asian central banks and a few others, with large holdings of U.S. dollars, would like to diversify their reserves.

Gold prices would also get a boost from static to declining mine production, while governments around the world would continue to increase the money supply at a rapid pace.

"Investors forget that at most gold mines, you have to move 35 to 40 tonnes of dirt and rock just to get one ounce. On the other hand fiat paper money can, and usually is, printed at will by computer."

Gold -- Sharefin, 19:13:17 06/28/06 Wed

Gold reserves set to disappear by 2020

The vice president of sales at Metals Economic Group (MEG), David Cox, speaking at the London Bullion Market Association (LBMA) conference has warned that gold reserves will be extinguished by 2020 if new discoveries are not made.

According to reports at miningmx.com, Mr Cox told delegates at the conference that action must be taken soon because if present levels of exploration and discovery were maintained reserves would not last any more than 14 years.

"I believe the world's gold majors have been good at replacing reserves but some of it has been from merger and acquisition activity and brown fields development," he said.

Gold -- Sharefin, 21:31:10 06/24/06 Sat

From Richard Russell
---------------------
I want to write a bit about gold and the meaning of a gold bull market. The central banks of the world are involved in a very strange enterprise. On the face of it, it's an "insane" enterprise. What the central banks are doing is telling people that they, the banks, can create wealth by fiat, by producing paper and stating by law (fiat) that the paper they produce is, in fact, real money or wealth. Of course this is nonsense, a total fraud, but the people of the world, at least most of them, accept that fraud. If everybody in the world accepts a given thesis, that thesis will work -- until it falls apart. The reason the paper fraud works is that the government tells people its money and that it's legal tender. And there's a method in their scam. You see, the men at the head of governments want to remain in power. In order to remain in power they must keep the population happy. How to do that? Create jobs, create conditions of "prosperity" -- and above all avoid recessions and even the periodic slowdowns.

How to do that? Create ever-more fiat paper. Thus, the central banks become paper-producers, and that means there will always be some level of inflation. It's not a question of whether or not to create inflation, it's a question of how much inflation to create.

But inflation is a tax on the people. Inflation takes away their savings and, dare I use the phrase -- their purchasing power. That's a phrase you will never hear the Fed or any central bank use -- "purchasing power." The Fed will make a great show of "warning" the people that inflation is "too high," and that they, the Fed, will defend you against "an uncomfortable" level of inflation. But the Fed will NEVER dare to compare the purchasing power of your dollar this year with the purchasing power of your dollars five years or ten years ago. Because that would be exposing the fraud.

Currently, we have a problem. The problem is massive deficits and a massive debt structure. These debts must be serviced, and that means ever-more fiat money must be created. If the money isn't created fast enough, the nation slips into deflation, and the Fed can't tolerate that. So today we have a serious problem -- the underlying forces of debt demand more and more paper-creation and inflation -- in order to ward off deflation.

Rising gold is a red flag dangling in front of the people. Thus, the central banks are fearful of rising gold. They are fearful because they know that the people, in their guts, understand the meaning of rising gold. When gold rises, it means that it requires more fiat paper to buy true money. That knowledge appears to be built into man's DNA. People know, despite all the governmental propaganda, that rising gold means that fiat currency is worth less.

This is the basis of one of the great coming economic battles. From the Fed's perspective, the battle will be to inculcate in the public's mind and psyche that rising gold is meaningless, that it's a function of pure speculation, and that it has nothing to do with the purchasing power of fiat currency. Yes, the great battle of gold vs. paper lies ahead. And I can guarantee you one thing -- gold will win. And the fraud of fiat "money" will be exposed. In the end, the insanity of a central bank "creating" wealth will be exposed and the central bank system will not survive. It can't survive. It can't survive because in essence, it's a lie and it's evil. And the only power evil has is the power to destroy itself.....

Gold -- Sharefin, 22:54:48 06/19/06 Mon

US gold futures clash intensifies

The battle for the US gold futures market is becoming more intense, with the first signs the Chicago Board of Trade's (CBOT) gold futures contracts are taking market share from the incumbent Comex.

Since CBOT launched its electronic gold futures contracts in October 2004, the US gold futures market has grown. However, the recent gold price slide has seen several investors quit the gold market. That in turn has led to a shrinking of the amount of gold futures contracts held by investors.

During the last two months, holdings in CBOT's gold futures have risen, and there was been a corresponding fall in the holdings of Comex futures. This has led to the CBOT increasing its market share at the expense of Comex, which is owned by the New York Mercantile Exchange.
~~~~
The CBOT gold futures contract now accounts for about 9.5 per cent of the total US gold futures market.

Comex is responding to the increased competitive threat. Traders said the Comex policy of setting daily price trading limits had led to many trading suspensions in recent months as volatility in the gold market had increased.

"When Comex suspended trade, the gold market would just move over and trade on CBOT," said Mr Reade. Comex is understood to be reviewing its daily price limit policy.

Gold -- Sharefin, 05:59:01 06/19/06 Mon

Remarkable Development in the Gold Market

What does this mean? – quite simple – it means that there was a concerted effort on the part of this group of short sellers to FORCE THE GOLD PRICE DOWN. They had absolutely no interest in booking profits on existing shorts as the price tumbled some $100. This is a stunning development as it clearly indicates a concerted attempt to derail what was becoming a runaway bull market in the gold price that was threatening to garner far too much public attention. Remember - gold’s perennial function is to serve as the financial “canary in the coal mine” which alerts the workers to hidden, toxic dangers. Quite simply, gold’s stunning rally to $730 in the matter of a few months time was sending shock waves through the corridors of the monetary elites who were “looking into the abyss” if gold continued its meteoric rise. Something had to be done and quickly or this thing was going to get out of hand.

Along that line, this past week I had sent some comments up to my good friend Bill Murphy over at GATA’s fine site, www.lemetropolecafe.com detailing both in written and in visual chart form what appeared to me to be a deliberate assault that was being launched against the gold market beginning in the thin and illiquid conditions of the aftermarket Access trading session as soon as it opened for the resumption of trading in the afternoons. Bill included those in his daily Midas reports. Also, my trading buddy and good pal Jim Sinclair (www.jsmineset.com) had posted the same comments along with the price charts detailing the attack as shown on the 30 minute interval chart. As a trader who trades exclusively in the CBOT’s full-sized electronic gold contract every single day, I am quite attuned to the normal order flow into that “pit”. What caught my eye immediately beginning last week and continuing with the assault on gold early this week, was the huge size of sell offers that came flooding into those pits late last week and earlier this week during the normally comparatively quiet afternoon session. Offers of 500+ to sell were relentlessly pounding the CBOT electronic gold contract. One enormous sell order of 943 hit the pit much to my stunned amazement. I found myself talking out loud to myself saying, “What in the world is going on here? Did I miss something happening in the world? Did someone Central Banker or Fed governor say something? Who in the heck is selling like this?”

To give you some perspective – I rarely see buy or sell orders in the early afternoon session exceeding 100 contracts going either way. Clearly some entity was attempting to mercilessly pound the price down into lower levels looking to run stops in the thin conditions and set off a cascade of further selling which would then be expected to carry over into the TOCOM session that evening driving the price even lower as Japanese selling took over.

So the question becomes, who would do such a thing and why?

Then it all began to make perfect sense if one understands what both Jim Sinclair and Bill Murphy and the GATA gang had been saying about this recent price decline in gold, namely, that is was an orchestrated and deliberate attack by the Central Bankers of the West to break the back of the gold market and defuse the warning message that gold was sounding abroad. In our opinion, it started with the Bank of England either mobilizing its own gold supplies or gold from the IMF. This gold was then used to temporarily flood the market with extra supply with which to overwhelm the soaring investment demand thereby knocking the price of gold, and other commodities sharply downward to give the intended effect that fears of inflation due to commodity price rises had been effectively contained. In order to affect the most carnage on gold, this surreptitiously mobilized supply of extra gold had to be accompanied by a concerted and well-coordinated effort on the part of the Western Central Bankers and some of their allies of tough anti-inflation talk giving the impression that the CB’s were going to be especially vigilant to nip any inflation genie in the bud.

Think about this a bit and see if we can put two and two together. If you knew in advance that the BOE was about to make a move to derail the surging copper market and bail out its friends at the LME which was on the verge of witnessing a default among some of its members who had stupidly sold short into a roaring bull market in copper, and you knew that they would also do this by launching an all out assault on the base metals and especially on the gold price using mobilized Central Bank vault gold, what do you think you could conclude? Answer – the price of gold was going to fall sharply as it would be temporarily overwhelmed by the extra supply hitting the market. If you knew this would you not sell with complete reckless abandon? Would you not attempt to chase the market down as far as you could pushing into one set of sell stops after another? Would you not do this in the hopes of wrecking as much carnage on the market as possible and then eventually clean up by buying all those shorts back after you had broken the back of nearly every would-be gold bull on the planet? I know I sure would have! You would be a complete nitwit not to recognize such a gift horse being dropped into your lap!

Well, that is exactly what I believe occurred. The BOE in conjunction with their cohorts at the Fed, would have tipped off its agents, or better yet, would have plotted with its agents Goldman Sachs, et al, that is was about to mobilize its gold or the IMF’s gold and dump it onto the market. In the meantime Goldman Sachs and friends were unleashed to smash the paper markets in gold at both the Comex and the CBOT, and run as many speculators out of it as possible while seeking to inflict the most technical damage possible on the price charts. The intended effect was to be to so completely dishearten and discourage the public and the investment funds from buying gold that it would suffer an ignominious death and fall off the radar screens of investors. That would effectively get it out of the headlines and remove the pesky metal’s telltale warning signs about the true state of the global economy. No more gold stories equals happy Central Bankers.

There is no doubt that the plan worked to near perfection – I have never seen so much near total despair and disillusionment among the friends of gold as I witnessed this past Tuesday and early Wednesday. Out of everywhere, as if on cue, analysts confidently pronounced that the bull market in gold and in commodities was over, finis, kaput!

Energy -- Sharefin, 04:03:15 06/08/06 Thu

Energy Geopolitics 2006

America’s domestic political situation is equally dire. The current administration came into office on the basis of a promise—set forth in the 2002 “National Security Strategy of the United States”—to achieve and maintain virtually complete global hegemony by discouraging any nation or combination of nations from achieving military or economic parity. That promise also—and crucially—included the goal of gaining unchallenged control of the world’s oil and gas flows. Tactics reserved to that end included pre-emptive war and “regime change” anywhere necessary. The U.S. corporate/banking/military elite gave the neocon-dominated executive group virtually free rein to pursue these goals. Given that group’s lack of a robust popular constituency, this entailed the fixing of elections, the mobilization of the media, the redirection of immense amounts of government revenue, the overriding of the Constitution as well as international laws and treaties, and the orchestration of a spectacular terrorist attack.

The Bush-Cheney-Rumsfeld crew had its chance and, by near-universal opinion, achieved colossal failure on all counts. This failure was in fact predicted by many—including the millions who marched in streets to try to avert the Iraq invasion. But the current tragicomedy of the neocons’ fall from grace can offer little satisfaction to anyone, in that it implies extraordinary perils to both the nation and the world.

Over the past few months the consensus of the traditional power elites has shifted dramatically: they have evidently (judging by their statements and by the attitude of the mainstream media) concluded that the neocon cabal must go. Washington prosecutors, backed by the establishment’s old-guard foreign policy “realists” inside and outside of government, are preparing revelations of scandals and the handing down of still more indictments.

This may all be well and good in itself. However, the neocons’ efforts have meanwhile squandered immense amounts of fiscal, political, and diplomatic capital. And these efforts have played out (not coincidentally) as global energy streams are drying up. America’s power elites bet the farm on the neocons and lost. There can be no second chance. A recovery of America’s former position of unquestioned dominance, enjoyed until only years ago, is simply not in the cards. The best that can be hoped for is a partial re-consolidation based on withdrawal and reconciliation abroad, and massive inflation at home. This is a reversal of truly historic proportions.

The danger, of course, is that the neocons may be unwilling to surrender without a fight, and the casualties of that fight could conceivably number in the millions.

In short, we are witnessing nothing less than the beginning of the disintegration of the American empire abroad, and of long-standing national economic and political structures at home. It is important to avoid overstatement: the US is still an immensely powerful nation militarily and economically, and one that yet commands respect in at least some quarters. But the degree of the recent erosion of that respect, while difficult to quantify, is nevertheless considerable and unprecedented.

Gold -- Sharefin, 21:04:31 06/06/06 Tue

Iran Hoarding Gold

WASHINGTON -- Iranians are going for the gold - at least until someone else cuts them off.

To forestall an effort by the West to seize Iranian assets in Europe, the Iranian leadership decided last fall to begin a massive, secret repatriation of its international currency reserves, according to Central Bank of Iran documents.

The documents were obtained by an Iranian opposition group and shared with Newsmax.

The documents detail eight shipments in chartered jumbo jets from Zurich's Kloten airport. The shipments, from October through late November, brought 250 tons of gold bullion from the vaults of Swiss banks to Tehran.

The gold was purchased by Bank Markazi (the Central Bank of Iran) from Credit Suisse in Zurich, the documents showed.
~~~
Iran's leadership wanted to purchase 700 tons of gold, according to the Organization of the People's Fedaii Guerillas of Iran (OPFGI), a communist opposition group that obtained the Central Bank documents.

However, their secret effort to convert Iran's foreign currency holdings into gold appears to have stopped when word leaked out earlier this year.

The gold is now being held in the vaults of the Bank Markazi in Tehran, the group said.

A Credit Suisse spokesman, Andres Luther, told Newsmax by phone from Zurich that it was bank policy not to comment on its clients. However, if the bank had shipped gold to Iran last autumn, "I can assure you that we fulfilled all the reporting requirements the state demands of us."

Credit Suisse, Switzerland's second largest bank, announced on Jan. 23 that it would no longer accept new business in Iran or Syria. Mr. Luther said the bank's decision was not in response to U.S. pressure, as previously reported.
~~~
Jeffrey Christian, managing director of CPM Group, which tracks the flow and pricing of gold, told Newsmax that the reports of 250 tons of gold repatriated to Iran late last year "makes sense."

"There has been a tremendous amount of gold going into Iran over the past eight months," he said. "Some of it belongs to the Central Bank, but part is to satisfy private investment demand."

Since the first quarter of 2003, he added, "we've seen a broad range of Middle Easterners buying gold for storage outside the Middle East, the United States, Europe, or Japan. More people have bought gold over the past five years than in the entire history of mankind."

The main repositories of these new gold findings, Christian said, were Australian, Singapore, Malaysia, and Thailand.

The Fedaii organization also alleged that in a separate scheme, pro-Iranian Shiites in Iraq looted the Iraqi Central Bank and one of Saddam Hussein's palaces in the immediate aftermath of the 2003 war, and made off with 200 tons of Swiss-stamped gold bullion.

The Iraqi gold was re-melted in Iran, cast into automobile bumpers, and covered with chrome. Iranian agents drove the cars with the gold bumpers into Pakistan and Azerbaijan, where they sold the gold to brokers at a 15 percent discount, the group said.

"Sales of this gold are ongoing," sources at the OPFGI said.

Gold -- Sharefin, 00:03:09 06/05/06 Mon

Veteran gold bug sees price soaring to $3,000 an ounce

Harry Schultz of the International Harry Schultz Letter has been publishing so long, since the early 1960s, that I regularly get email from readers insisting that he must be dead. He denies this.
Dead or alive, Schultz is soaring right now. According to the Hulbert Financial Digest, his portfolio gained 130.85% over the year ending in May, vs. 10.6% for the dividend-reinvested Dow Jones Wilshire 5000. Over the last five years, Schultz gained 21.94% annualized vs. 3.63% for the DJ Wilshire.
~~~
But Schultz's long run is as apocalyptically bullish as ever: "My view has always been: current governments (which are bank-owned) won't voluntarily return to a gold standard, with its discipline on money creation. But, when the price roars to, say $1,600, they'll quite possibly be forced to do so, to appease a clamor for sound money - e.g. Bretton Woods II. The price could go to $2,000 while they debate new rules. Washington insiders would see it as their last chance to save the US dollar as a reserve currency. If they don't, the euro, yen or yuan could make a bid for that status ... If no rules are made at $1,600, gold could keep climbing till they do. Hello $3,000."

Schultz has always advocating frenetic trading - he says he often buys and sells in the same day. He writes: "This market is going to $2,000, but en route it will most assuredly crash 3-7 more times and it's not smart to ride it down. Most people can't bear the pain when their stocks fall 70% as they will if bullion dips only 30%, as it often does."

Gold -- Sharefin, 22:38:59 06/04/06 Sun

Russia leading global 'stealth demand' for gold

The world's big money brigade is snapping up gold bullion at eight times the rate originally thought, according to a report by UBS, the world's biggest gold trader.
~~~
The Swiss bank said information from its trading floor suggested that funds and investors were allocating 20pc of their commodity portfolios to precious metals.
~~~
Russia's reserves have surged to $237bn - the world's fourth biggest - after rising 61pc in 2004 and 40pc in 2005. With a current account surplus of 10pc of GDP, it must sweep up a big chunk of global gold output just to stop its bullion share of reserves from falling.

In China, monetary committee member Yu Yongding last week issued the most explicit call to date for Beijing to diversify its $875bn reserves into gold to protect against a tumbling dollar. "We need to use some of the reserves to buy other assets such as gold and strategic resources such as oil," he said.
~~~
But if the global economy turns nasty, gold will ultimately decouple from its base metal cousins and regain its usual role as a safe haven currency and defence against dollar disorder. "The bottom line is liquidation first, haven later," he said.

Gold -- Sharefin, 22:42:00 06/02/06 Fri

NYMEX to remove price fluctuation limits on COMEX

NEW YORK, June 2 (Reuters) - The New York Mercantile Exchange said Friday its COMEX Division will eliminate price fluctuation limits for all COMEX contracts.

The change to no limits will take effect beginning with NYMEX ACCESS electronic trading on Sunday, June 4, for trade date June 5, NYMEX said.

"This change was made in order to better facilitate the core functions of price discovery and hedging provided by COMEX products," it said.

COMEX contracts include gold, silver, copper and aluminum.

Gold -- Sharefin, 23:30:56 05/27/06 Sat

Saudi firm buys gold from African central bank

RIYADH (Reuters) - A private Saudi jeweller has bought 36 tonnes of raw gold from an African central bank for 1.8 billion riyals, a company spokesman said on Monday, confirming a newspaper report.

Gold -- Sharefin, 19:51:55 05/09/06 Tue

China urged to quadruple gold reserves

BEIJING, May 9 (Reuters) - Some Chinese economists are urging Beijing to quadruple its gold reserves to 2,500 tonnes from the current 600 tonnes because the country foreign exchange reserves had become the world's largest, an official industry newspaper reported on Tuesday.
"China should raise its gold reserves so those reserves can account for 3 percent to 5 percent of the foreign exchange reserves, instead of current 1.3 percent," the China Gold quoted Liu Shanen, an expert at Beijing Gold Economy Development Research Centre, as telling a conference.

He said the suggestion was made in light of the country's economic strength and the size of its foreign trade.
~~~~
China has been trying to gradually diversify its reserve holdings away from the dollar. But economists say fears of a collapse in the U.S currency will prevent any dramatic shift.

Central bank official figures showed China's gold reserves have remained unchanged since December 2002.

Silver -- Sharefin, 22:47:10 05/06/06 Sat

Snipped from The Silver Investor

--------
At Berkshire meeting now....he said they sold all silver.

He said he got in early and got out early. No sell price/date data given.
Says he would rather hold businesses that have earnings. He thought
"copper and some other commldities" are in a bubble. Didn't really talk
about silver other than he sold it.

Gold -- Sharefin, 22:50:27 04/03/06 Mon

Demand for silver will give you a bigger bang for your buck

Floor traders on Comex, where most of the chicanery in the gold market takes place, report that whenever gold attempts to break through a critical level to the upside, a large persistent seller with absolutely no interest in maximising his proceeds, appears and caps the price.

What goes unsaid is that this is very simply the official sector's ongoing attempt to impose it's will on an increasing recalcitrant market.
~~~~
Switching topics, there have been several fascinating developments in the ongoing gold war recently. Allan Greenspan, in his maiden address following a return to the private sector, suggested the rise in gold was attributed to geopolitical concerns.

That has to rank as one of the most disingenuous remarks in a long history of blatant lies about the state of the gold market. Greenspan oversaw the most aggressive creation of money in the US financial history. He, nevertheless, continues to deny that his profligacy is the primary factor underpinning the gold-price rise. Using doctored inflation numbers, while vehemently denying his active role in the gold-price suppression scheme, he continues to attempt to deflect blame elsewhere. I'm sure he will have an even more arcane excuse to protect his legacy when the gold price approaches four figures.

Along the same lines, one of his main allies in the gold battle, the investment bank Goldman Sachs, was recently exposed on the TOCOM which is the Japanese equivalent of the COMEX in the US.

The TOCOM is remarkably transparent compared to the COMEX in that positions are reported by firm rather than by category (commercials, speculators etc.) on a daily basis. When Goldman Sachs, a relatively new participant, began to conduct the same drill they had been carrying out on the COMEX, their machinations were revealed for all to see and it wasn't pretty. Presto, the rules were changed to conform to COMEX standards, permitting the anti-gold cartel to continue it's routine in greater secrecy. Is that pathetic or what?

From the Far Side -- Sharefin, 20:59:57 03/28/06 Tue

TWO TRILLION $
FEDERAL RESERVE ORDERS TWO TRILLION DOLLARS TO BE PRINTED AND PUT INTO CIRCULATION! SOURCES WITHIN THE UNITED STATES TREASURY ARE FLABBERGASTED!
INFO CORROBORATED BY THREE SEPARATE U.S. TREASURY SOURCES
Six months ago, the Federal Reserve quietly announced that as of March 20, 2006, they would no longer publish "M3" Data. The "M3" was the amount of cash the government printed to put into circulation, propping-up the U.S. economy.

As of eight days ago, M3 data is no longer being reported, so there is no way for the public, investors or bond holders to know how much currency exists - and no way to gauge how much a "dollar" is truly worth.

Three separate sources in the U.S. Treasury have told me that this week, the federal reserve ordered TWO TRILLION dollars to be printed! The U.S. Treasury is allegedly running printing presses 24/7 to accommodate that order. Treasury employees were specifically ORDERED not to talk about this to anyone because it could cause economic collapse.

Even worse, I was also told that the whole Immigration Amnesty Debate (especially the well-funded well-attended protests) was deliberately scheduled to take place now, to divert attention from this massive printing/devaluation of the U.S. Dollar. The feds allegedly figured that by the time anyone found out, they could smooth things over. They figured wrong. Surprise, boys, you've been exposed!

Watch for Gold and silver to skyrocket in price within days as the world wises up and begins dumping the U.S. Dollar.

Fiat -- Sharefin, 20:52:50 03/28/06 Tue

Asia must prepare for dollar collapse

East Asian economies need to prepare for a possible collapse of the US dollar, the Asian Development Bank says.

The warning comes as the US trade deficit reaches a record high and global interest rates continue to rise.

Fiat -- Sharefin, 20:39:58 03/26/06 Sun

Bond Market Association To Develop & Lead Implementation of ‘NewBank’-- A Public-Private Initative Designed To Provide Crucial Liquidity In Emergencies Affecting Government Securities

New York, NY – The Bond Market Association announced today that it has accepted an invitation by a private-sector working group established by the U.S. Federal Reserve Board to develop and lead the creation of a so-called ‘NewBank’, a standby bank that would only be activated if one of two existing clearing banks in the U.S. government securities markets was suddenly forced to leave the business. Both government officials and market participants have long been concerned about the possibility, even if remote, of one of the banks suddenly exiting the markets and have agreed the NewBank concept is an appropriate precautionary measure.
~~~
Since the mid-1990’s all of the major participants in the U.S. government securities markets have depended critically on one of two clearing banks, Bank of New York and J.P. Morgan Chase, to settle their trades and to facilitate financing of their securities inventory positions. Interruption of a clearing bank’s services has the potential to severely disrupt those markets, as was evident in the wake of the tragic events of 9/11.

Further, the importance of the government securities markets to the U.S. and global economies cannot be overstated. The Federal Reserve and the U.S. Treasury are dependent upon them for implementing monetary policy, as well as funding and operating the U.S. government. Securities dealers are also increasingly dependent on tri-party repos for financing, with $1.9 trillion of securities now funded through this mechanism.

"Securities dealers need a contingency plan in the event one of the clearing banks is forced to exit the markets," commented Micah S. Green, President and CEO of the Bond Market Association. "Establishing NewBank is a prudent market-based initiative aimed at mitigating any potential problems caused by the sudden involuntary exit of one of the banks."

The idea of a standby bank was first recommended by a private-sector working group established by the Federal Reserve in 2004. The bank would only be activated if a credit, legal or other problem caused market participants to lose confidence in an existing clearing bank, and no well-qualified bank immediately stepped forward to purchase the exiting bank’s clearing business. The standby bank is not designed to address resiliency problems such as those encountered after 9/11; regulators previously established resiliency standards necessary for participation by a clearing bank.

Gold -- Sharefin, 20:38:06 03/26/06 Sun

Another step forward for silver ETF

BOSTON (MarketWatch) -- A controversial exchange-traded fund tied to silver prices moved a step closer to reality Tuesday.

The Securities and Exchange Commission has approved a rule change for a silver ETF in registration from Barclays Global Investors that would allow the product to list on the American Stock Exchange, although the fund has not yet been cleared to launch by regulators.
~~~
The Silver Users Association, a nonprofit lobby group interested in keeping an orderly silver market, has led the opposition to the silver ETF.

The SEC said in general, commenters opposed to the fund argued that approval of the silver ETF would result in serious liquidity problems in the silver market.

Those opposed to the silver ETF said it would "negatively impact the silver market because . . . creation would require the holding of silver in allocated accounts, which would drain large amounts of silver from the open market and cause higher prices for silver products."

Additionally, the opposition claimed resulting higher silver prices caused by the creation of the silver ETF would cause the loss of jobs specific to the silver industry.

However, the SEC said it sided with the Amex's argument that, like other derivative products, the silver ETF would increase the efficiency and transparency of the silver market.

Therefore, the SEC found the proposed rule change "in the public interest," saying it does not believe the silver ETF is "likely to cause serious liquidity problems in the silver market."

Gold -- Sharefin, 20:35:30 03/26/06 Sun

Bundesbank gold snub to Merkel

The Bundesbank, the German central bank, on Tuesday rebuffed the
Berlin government by announcing that it had decided against
substantial gold sales before at least September.

The decision, although widely expected, marked a fresh assertion of
independence by the bank, which has been under pressure to sell by
the government of Angela Merkel, chancellor.

"Gold is an essential part of the currency reserves of the
Bundesbank," said Axel Weber, Bundesbank president. "Decisions on the
manner and size of reserves are taken autonomously."

Mr Weber said that the decision related to sales in the current year
of its option of 600 tonnes permitted by the Central Bank Gold
Agreement, which expires in September 2009.
~~~
The cash-strapped Berlin government has stepped up pressure on the
Bundesbank to sell gold, and for the interest on the proceeds to be
used to fund research and education projects.

The government has also proposed substantial cuts in Bundesbank staff
bonuses in an attempt, some observers believe, to increase its
bargaining pressure.

John Reade, precious metals strategist at UBS, said it was unclear
when the Bundesbank would sell gold under the current pact because
the Bundesbank and the German Finance Ministry have yet to agree on
how future gold sale proceeds will be distributed.

"Until they reach an agreement, it is unlikely we will see any gold
sales coming out of Germany," said Mr Reade.

Fiat -- Sharefin, 20:31:42 03/26/06 Sun

Credit derivatives rocked by loss at GM finance arm

The discovery of huge hidden losses at General Motors's finance arm have raised fresh fears of bankruptcy at the world's biggest carmaker, sending tremors through the credit derivatives markets.

The struggling group asked for a filing delay after admitting to an extra $2bn (£1.1bn) in accounting errors at its finance arm GMAC, raising total losses last year to $10.6bn. The news triggered a sharp spike in the cost of default insurance on GMAC's bonds, rising 75 basis points overnight.
~~~
Concern that General Motors may now be sliding towards the brink - linked to an estimated $200bn in credit derivatives - has renewed fears that the over-heated credit swap market could seize up in a crisis.
~~~
Timothy Geithner, president of the New York Federal Reserve, warned in a recent speech that the $300,000bn derivatives market had raced ahead of the infrastructure needed to support it.

He said the plethora of new instruments may have led to a more dangerous concentration of risk.

"They have not ended the tendency of markets to occasional periods of mania and panic. They have not eliminated the possibility of failure of a major financial intermediary. And they cannot fully insulate the broader financial community from the effects of such a failure."

"There are aspects of the latest changes in financial innovation that could increase systemic risk in some circumstances, by amplifying rather than dampening the movement in asset prices," he said.

Gold -- Sharefin, 20:28:37 03/26/06 Sun

China to open theme park dedicated to gold

BEIJING (AFP) - Gold-hungry China plans to open what it has billed the world's first theme park dedicated entirely to the precious metal, state media reports.

Construction of the theme park kicked off Saturday near a working mine at Rushan city, east China's Shandong province, the Xinhua news agency said.

When the 3.6-square-kilometer (1.4-square-mile), 200-million-yuan (25-million-dollar) park is completed, it will allow visitors to watch gold being mined and processed.
~~~
Last year, Chinese demand for gold rose eight percent to more than 250 tonnes, the council's data showed.

Gold plays an important role in Chinese culture and is evident everywhere from temple decorations to the jewelry of newly-weds and the dental cavities of the rich.

Last year, the China Economic Daily issued a special edition, published in gold. It came in two versions, the more expensive priced at 8,300 dollars and using 500 grams of gold.

Gold -- Sharefin, 05:03:33 03/26/06 Sun

Now They Tell Us: BIS Confirms Rigging Gold Prices

William R. White, Economic Adviser and Head of Monetary and Economic Department at the Bank for International Settlements, has confirmed the central allegation of the Complaint in the Gold Price Fixing Case: that the BIS is the principal hub through which the major central banks organize their price fixing activities in the gold market. In February 2006, the Bank published the proceedings of its fourth annual conference held in Basel on June 27-29, 2005, as BIS Paper No. 27, Past and Future of Central Bank Cooperation. In his opening remarks to the conference and based on his eleven years of service at the Bank, Mr. White stated in part:

Before turning briefly to an assessment of past efforts and likely future challenges, it is perhaps worth spending a minute on what is meant by central bank cooperation (emphasis in original). I think that the terminology developed for domestic monetary policy might have some uses here; namely, the ultimate objectives, the intermediate objectives and the operational instruments. The ultimate objectives have always been monetary and financial stability, though clearly the focus of attention has often shifted over the years. The intermediate objectives of central bank cooperation are more varied. First, better joint decisions, in the relatively rare circumstances where such coordinated action is called for. Second, a clear understanding of the policy issues as they affect central banks. Hopefully, this would reflect common beliefs, but even a clear understanding of differences of views can sometimes be useful. Third, the development of robust and effective networks of contacts. Fourth, the efficient international dissemination of both ideas and information that can improve national policymaking. And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful. [Emphasis supplied.]

Foreign bidder error -- Ron D, 11:52:14 03/13/06 Mon

another GOV error??..sure!!

.Treasury prices Monday also are being pressured by concerns that the February revival of the 30-year long bond did not attract as much foreign interest as was originally thought, said Schwab's Hastings.
The auction attracted an impressive 65.4% of indirect bidders, a carefully watched category that includes foreign central banks, but also includes other foreign and U.S. institutions.
At the time of the 30-year auction, held in early February, the high indirect bid was cheered as a sign that foreign central banks remain buyers for long-term U.S. assets.
However new allotment figures released by the Treasury Department last week indicate foreign participation amounted to only about 3% of the bid, leading to the conclusion that most of the 65.4% indirect bid actually came from U.S. institutions. ...."

Silver -- Sharefin, 08:54:08 03/07/06 Tue

LSE to launch silver tracker fund

A silver price tracker fund, also known as an exchange traded fund, is expected to be launched on the London Stock Exchange within the next month by ETF Securities, which has already launched an oil-backed ETF on the LSE.
~~~
Unlike the various gold and oil backed ETFs and the BGI initiative, the proposed silver fund in London will not be physically backed by the underlying commodity.

The funds raised by the proposed London listed silver ETF would not be spent on buying the metal, but the performance of the fund would remain linked to the silver price. Funds raised by existing commodity-backed ETFs are spent on buying the physical commodity, which adds to the increase in demand.

Fiat -- Sharefin, 22:56:33 03/05/06 Sun

Global credit ocean dries up

The cash machine that sustained a world boom is about to close, and it's going to get ugly, says Ambrose Evans-Pritchard

One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.

The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities.

Arguably, it has prolonged asset bubbles everywhere, blunting the efforts of the US and other central banks to restrain over-heating in their own countries.

The Bank of International Settlements last year estimated the turnover in exchange and interest rates derivatives markets at $2,400bn a day.

"The carry trade has pervaded every single instrument imaginable, credit spreads, bond spreads: everything is poisoned," said David Bloom, currency analyst at HSBC.

"It's going to come to an end later this year and it's going to be ugly, even if we haven't reached the shake-out just yet," he said.
~~~~
The new skittishness comes against a backdrop of ever more hawkish moves by Japan and Europe.

"There are several hundred billion dollars of positions in the carry trade that will be unwound as soon as they become unprofitable," said Stephen Lewis, an economist at Monument Securities. "When the Bank of Japan starts tightening we may see some spectacular effects. The world has never been through this before, so there is a high risk of mistakes."

Toshihiko Fukui, the Japanese central bank governor, gave a fresh warning yesterday that this day is near, saying the country was pulling out of seven years of deflation. The economy grew at a 5.5pc rate in the fourth quarter of 2005.

In his strongest words yet, he said the bank would act "immediately" to curtail its extra injections of liquidity, preparing the way for rate rises above zero
~~~
Most of the world is now tightening, with no sign of a fresh credit window opening to keep the game going. This is new. Japan has had the tap on continuously as the trade exploded over the past five years, while America itself became the source of funds after it slashed rates to 1pc at the end of the dotcom bubble, and held them there until June 2004.

The US Federal Reserve has since raised rates 14 times to 4.5pc in a belated effort to restore monetary discipline, with at least two more rises priced into the markets.

It is an open question whether the yen, euro, Swiss franc and Swedish krona carry trades have occurred on such a scale that they have led to over-investment in Latin America and beyond, and compressed US yields, fuelling the American housing boom in 2005 despite Fed tightening.

There are other big forces at work: huge purchases of US Treasuries by Asian central banks, and petrodollar surpluses coming back to the US credit markets. Stephen Roach, chief economist at Morgan Stanley, warns that the carry trade is itself, in all its forms, a major cause of dangerous speculative excess. "The lure of the carry trade is so compelling, it creates artificial demand for 'carryable' assets that has the potential to turn normal asset price appreciation into bubble-like proportions," he said.

"History tells us that carry trades end when central bank tightening cycles begin," he said. Ominously, almost every bank other than the Bank of England is now tightening in unison.

Fiat -- Sharefin, 22:53:04 03/05/06 Sun

Collapse of the `Carry Trade' Will Blow Out the System

On Friday, Feb. 24, the Daily Telegraph published a blunt admission that the entire global financial system is on the verge of disintegration, as the result of the imminent collapse of the yen carry trade. Ambrose Evans-Pritchard penned the Telegraph story, "Global Credit Ocean Dries Up," and quoted from a number of leading financial analysts, who warned that the entire system is jeopardized if Japan goes ahead and raises interest rates, thus shutting down the yen carry trade, which has fueled global hyperinflation and speculative bubbles for the past several years.

As the Telegraph defined it, "The 'carry trade'—as it is known—is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1 pc in Switzerland, to relend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities." Last week a crisis was triggered when the Fitch rating agency downgraded Iceland's sovereign debt. Interest rates in Iceland are 10.75 pc. The Bank of Japan has announced plans to abandon the zero interest rate policy, as early as next month. This has triggered the panic, cited by Evans-Pritchard.

Evans-Pritchard quoted a number of analysts. David Bloom of HSBC warned, "The carry trade has pervaded every single instrument imaginable, credit spreads, bond spreads; everything is poisoned. It's going to come to an end later this year and it's going to be ugly, even if we haven't reached the shake-out just yet. People have a Panglossian belief in the march of global capitalism but that will change as soon as attention switches back to US financial imbalances."

Stephen Lewis of Monument Securities was quoted: "There are several hundred billion dollars of positions in the carry trade that will be unwound as soon as they become unprofitable. When the Bank of Japan starts tightening we may see some spectacular effects. The world has never been through this before, so there is a high risk of mistakes."

Stephen Roach, chief economist at Morgan Stanley, was even more blunt: "The lure of the carry trade is so compelling, it creates artificial demand for 'carryable' assets that has the potential to turn normal asset price appreciation into bubble-like proportions. History tells us that carry trades end when central bank tightening cycle begins."

LaRouche Says: Let It Happen
Political economist Lyndon LaRouche was far more plain-spoken and blunt. "The yen carry trade is in big trouble. The mere fact that such questions as those reported in the Daily Telegraph are being raised means that the carry trade is about to bite the dust. Iceland and other countries are going to go bankrupt. But the multiplier effect of the blowout of the carry trade is going to mean that the crisis hits with a magnitude far beyond any individual nation or currency. This will bring down the whole post-Bretton Woods floating exchange rate system."

But LaRouche added, "Let it happen. The system is doomed under any circumstances, and we know what must be done to create a new, stable financial system, based on the principles of Franklin Roosevelt's original Bretton Woods System. I am ready with a recipe for precisely how to solve this crisis. Are you?"

Gold -- Sharefin, 20:38:24 03/05/06 Sun

China Leads From The Front By Doubling Its Gold Reserves This Year

Interesting to read that the National Development and Reform Commission has stated that China intends to more than double its gold reserves to 1,270 tonnes this year. According to figures released recently by the World Gold Council on official gold holdings this will put it on a par with Switzerland in 6th position. In 2005 China increased its gold reserves by 20 per cent to 620 tonnes and now it is going to add a further 650 tonnes. Down at the bottom of the list, or very close to it, is the poor old UK with a paltry 311.2 tonnes thanks to the devious machinations of Chancellor Brown. On one side is Venezuela and just below is Belgium – not the usual place for a once proud empire. And what about Australia, Canada and South Africa, the three countries which traditionally prided themselves on their mining. None of them feature in the Top Twenty gold holders.

China still has some way to go to catch up with the US which is said to have 8,133.5 tonnes of gold stored in Fort Knox. The word ‘said’ is introduced deliberately as the gold depository at Fort Knox is a classified facility. No visitors are permitted, and no exceptions are made. Back in the 1970s a man named Edward Durrell claimed that substantially all of the US Gold Reserve being stored at Fort Knox had gone. A modest amount remained, but the rest had been shipped to London in 1967 and early 1968 for sale by President Johnson in an ill-fated attempt to keep the price of gold at US$35 per ounce. Since then there have been variations on this story and the sad thing now is that the US government retains so little credibility that no one knows what to believe.

From the Far Side -- Sharefin, 03:30:27 03/04/06 Sat

Inside story: the Bush gang and Barrick Gold Corporation
by Anton Chaitkin

Barrick Gold, caught scrambling for loot amid the corpses
in Zaire, is a corporate front for the George Bush-allied
covert political apparatus. The Canada-based Barrick is
Bush's only known current business enterprise. The
company, which Bush now personally leads, was created
by Bush's political partners--British elite narcotics
financiers, and arms traffickers and money launderers.
Using the influence of this political faction, Barrick
acquired important interests, first in the United States,
then in Canada and South America. In South America, as
Barrick boasts in its 1995 annual report, the company has
an aggressive, long-term approach, with mines and
projects established in strategic locations in Argentina,
Chile, Peru, Bolivia, and Brazil. ``Almost two-thirds of the
exploration and development drilling budget will be spent
in South America, where the company has decided to
focus its efforts,'' the annual report states. In addition,
with its intended conquests in Indonesia and Africa, the
firm now says it aims to move from third to first among
the world's largest gold mining companies.
We present here the results of {EIR'}s investigation of the
Bush company, centering on the following principal
figures:

George Herbert Walker Bush:
whose father was a partner in the powerful London-
controlled private banking firm Brown Brothers Harriman.
Relevant to the Barrick story, Bush was U.S. vice president
and chief of covert operations in the Reagan-Bush (1981
-89) administration, and U.S. President (1989-93). As a
former President and power broker, Bush is Barrick Gold
Corp.'s chief lobbyist, a stockholder in Barrick, and
honorary senior adviser to Barrick's international advisory
board.

Adnan Khashoggi:
a Bush-allied Saudi billionaire and arms trafficker, founder
of the Barrick Gold Corp.; famous for his illegal weapons
sales to Iran.

Peter Munk:
a business failure who became a protege of the British
royal family, and Khashoggi's partner. Munk is chairman
of Barrick Gold Corp.

Brian Mulroney:
Canadian prime minister (1984-93) and George Bush's
errand boy; Barrick Gold lobbyist and director, Bush's
lieutenant on the Barrick international advisory board.
Barrick Gold was founded in Toronto, Canada, in 1983.
The majority investment in the firm was held by
Khashoggi and his arms-trafficking partners, who were
just then gearing up the Iran-Israel-Nicaragua guns and
cocaine tangle which would explode in 1986 as the
``Iran-Contra'' scandal.
The nominal chief of Barrick Gold was Peter Munk, a
Hungarian Jewish immigrant who had repeatedly ``died''
as a businessman, only to be repeatedly revived by
princes and principalities. This much of Munk's story is
before the public in a biography that was written and
published with Munk's support, entitled {Peter Munk: The
Making of a Modern Tycoon,} by Donald Rumball (Toronto:
Stoddart Publishing Co., 1996). It vaguely describes
Munk's public disgrace, his self-exile in London, and his
sudden rise to near-billionaire status, ending with Munk's
invitation to George Bush became honorary senior adviser
to the board, created in May 1995.

- The Clairtone heist -
Peter Munk first became notorious in Canada in the late
1960s, as the beneficiary in an insider trading scandal.
Munk and a partner named David Gilmour owned an audio
equipment manufacturing company that had been heavily
subsidized by the province of Nova Scotia. Munk and
Gilmour quietly dumped 29,000 shares of Clairtone stock
in 1967, just before publication of the company's financial
report tipped off other investors that the company was
failing. After Munk sold at $9 per share, the stock plunged
to $1.
Dr. Morton Shulman, a member of the legislative assembly
of the province of Ontario, asked government
representatives if Munk would escape with his money and
no legal consequences (see Ontario Legislative Library
record of Ontario provincial parliamentary debate on June
3, 1969).
Ontario Minister of Financial and Commercial Affairs H.L.
Rowntree responded that a court had been requested to
order the Ontario Securities Commission ``to commence
an action in connection with [Munk's] Clairtone Sound
Company ... for an action in the name of the company for
the accounting of profits allegedly made by him by reason
of the improper use of inside information.''
But there was no government action, and Munk would
indeed escape. A Clairtone stockholder named John
Adams, who had lost about $5,500, had filed a legal
action against Munk. Munk hired attorney Charles Dubin,
whom Shulman described as ``a lawyer who acts for the
Conservative Party whenever there is an embarrassment to
be covered up.... He is amazingly good at covering up
Conservative scandals.... And Charles Dubin ... knew
exactly how to go about subverting the law in this case.''
Shulman reported that Munk's attorney gave Adams
$35,000 as a settlement, on Adams's agreement not to
make the case public. Then, ``the lawyer for Adams and
Charles Dubin went into the Judge's chambers ... [and]
requested the judge to remove the papers from the
registrar's office and keep them in his own private
chambers, which the judge did.''
Charles Dubin, Munk's inventive attorney, the fixer for
Mulroney's Conservative Party, became Ontario's chief
justice, and only recently retired.
The disappearance of legal papers in the Munk case
discouraged other stockholders from going after Munk.
But the resulting scandal made him a pariah in Canada,
and Munk moved to London to start a new life.

- `Dope, Inc.' puts Munk back together - The sister of
Munk's partner, David Gilmour, had married one of the
Vansittarts, a family high in the Anglo-Dutch aristocracy.
Munk's approved biography reports that this Vansittart
activated the formidable Sir Henry Keswick, who made
arrangements to lift Munk into a new career. Keswick's
family merchant banking firm, Jardine Matheson, had long
been the British Empire's leading, out-in-the-open
organizer of Asian illegal narcotics trafficking and drug-
money-laundering. (Keswick, Jardine Matheson, and their
cohorts are central figures in {EIR'}s book {Dope, Inc.}
(Washington, D.C.: Executive Intelligence Review, third
edition, 1992.)
Jardine Matheson made Munk the chief executive of a
Bahamas-registered hotel corporation called Southern
Pacific Properties (SPP), with Jardine money, and Jardine's
chief executive, David Newbigging, as a director. Then,
Jardine's historical dope partner, the Peninsular and
Oriental Steam Navigation Company (P&O), joined the
Munk enterprise; P&O's Lord Geddes himself joined
Newbigging on the Munk-SPP board. In future years, as
Munk rose to world prominence in