Currencies, Gold, Silver and Oil

Misc On the off topic board Gerry cannot get it fully sensored here. Just Hopes people wil not bother with the other boards.

Gerry Hot copper certainly presents a better atmosphere now for your Ramping. Now you can delete any post that disagrees with you or accuses you of ramping.

[Misc]

LOL , battle raging at HotCopper atm . Gerry getting 'carved' LOL


Misc

[stolwyk]

Gold: 437.3 Silver 7.29 oil 57.24 USD 82.28

http://www.atimes.com/atimes/China/GC19Ad05.html

"The truly significant trade development of 2004 was the EU's emergence as China's biggest economic partner, suggesting the possibility of a Sino-European cooperative bloc confronting a less vital Japanese-American one. As the Financial Times observed, "Three years after its entry into the World Trade Organization [in 2001], China's influence in global commerce is no longer merely significant. It is crucial." For example, most Dell computers sold in the US are made in China, as are the digital-video-disc players of Japan's Funai Electric Co. Funai annually exports some 10 million DVD players and television sets from China to the United States, where they are sold primarily in Wal-Mart stores. China's trade with Europe in 2004 was worth $177.2 billion, with the United States $169.6 billion, and with Japan $167.8 billion.

China's growing economic weight in the world is widely recognized and applauded, but it is China's growth rates and their effect on the future global balance of power that the US and Japan, rightly or wrongly, fear. The CIA's National Intelligence Council forecasts that China's GDP will equal Britain's in 2005, Germany's in 2009, Japan's in 2017, and the United States' in 2042. But Shahid Javed Burki, former vice president of the World Bank's China Department and a former finance minister of Pakistan, predicts that by 2025 China will probably have a GDP of $25 trillion in terms of purchasing power parity and will have become the world's largest economy, followed by the United States at $20 trillion and India at about $13 trillion - and Burki's analysis is based on a conservative prediction of a 6% Chinese growth rate sustained over the next two decades. He foresees Japan's inevitable decline because its population will begin to shrink drastically after about 2010. Japan's Ministry of Internal Affairs reports that the number of men in Japan already declined by 0.01% in 2004; and some demographers, it notes, anticipate that by the end of the century the country's population could shrink by nearly two-thirds, from 127.7 million today to 45 million, the same population it had in 1910.

By contrast, China's population is likely to stabilize at approximately 1.4 billion people and is heavily weighted toward males. (According to Howard French of the New York Times, in one large southern city the government-imposed one-child-per-family policy and the availability of sonograms have resulted in a ratio of 129 boys born for every 100 girls; 147 boys for every 100 girls for couples seeking second or third children. The 2000 census for the country as a whole put the reported sex ratio at birth at about 117 boys to 100 girls.) Chinese domestic economic growth is expected to continue for decades, reflecting the pent-up demand of its huge population, relatively low levels of personal debt, and a dynamic underground economy not recorded in official statistics. Most important, China's external debt is relatively small and easily covered by its reserves; whereas both the US and Japan are approximately $7 trillion in the red, which is worse for Japan, with less than half the US population and economic clout.

Ironically, part of Japan's debt is a product of its efforts to help prop up America's global imperial stance. For example, in the period since the end of the Cold War, Japan has subsidized America's military bases in Japan to the staggering tune of approximately $70 billion. Refusing to pay for its profligate consumption patterns and military expenditures through taxes on its own citizens, the United States is financing these outlays by going into debt to Japan, China, Taiwan, South Korea, Hong Kong and India. This situation has become increasingly unstable as the US requires capital imports of at least $2 billion per day to pay for its governmental expenditures. Any decision by East Asian central banks to move significant parts of their foreign-exchange reserves out of the US dollar and into the euro or other c

[stolwyk]

USD moving up: 82.89 (+ 0.76)

Euro 1.3168 Gold 430.7 oil 57.46


Is the Commodities Bull Over? Interview with Paul van Eeden
http://www.kitcocasey.com/displayArticle.php?id=54

The Daily Resource from KitcoCasey - Dave Forest,
http://www.kitcocasey.com/displayArticle.php?id=37

[stolwyk]

Inflation is on the way; PPI was 0.4%. Fed Fund rates rose 25 points to 2.75%. Euro 1.3077 USD 83.4 (+0.62) silver 6.80 Oil 56.03 Gold down to 425.9 DOW down 0.9%


I did mention that I expect a rise to 6.5% in the Current account for 2005. Jim Puplava mentions that number also:

Puplava: Riesgo País
http://www.kitco.com/ind/Puplava/mar222005.html

The Daily Resource - 3/22/2005
http://www.kitcocasey.com/displayArticle.php?id=37

[stolwyk]

USD 83.95(+0.64) Euro 1.2993 Gold 425.20 (-1.4) Oil 54.0 Silver 6.94

Comments: The Euro is in a good position and is now more competitive.
The USD is somewhat high and is becoming less competitive. Deficits are expected to increase. CPI for Febr. was an artificial 0.4% and the true CPI would be close to 0.55%. It is rising.

Inflation is taking a grip. I am expecting stagflation at the end of this cycle.

The Daily Resource - 3/23/2005:
http://www.kitcocasey.com/displayArticle.php?id=37


Sinclair:
http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&GID=&linkid=2825&T_ARID=2845

The US is sending 3 battle groups to the Middle East.

Still Ramping Gerry. Is Rampa mania Contagious all your mates seem to have it.

[stolwyk]

USD: 83.9

A Commentator was referring to the grey Japanese population who get Japanese super annuation returns which don't really grow but can get about 5% on 10 year US Bonds.

This a major reason why the dollar has risen. The Japanese just ignore capital risks and hope for the best. (They must have lost some cash last year with the USD moving down).

There is an outflow of cash from US Equities to Bonds.

The USD has also risen due to the 0.25% interest rate rise and there will be more to come to control inflation.

However, there is a lag between raising interest rates and effect, Greenspan is also very late raising these rates. So the desired effect although some, won't be decisive and will take more interest rate rises.

It is a case of the "horse has bolted" and inflation is becoming rife. Producers tried to control it by taking lesser margins but there is a limit to that.
_________________________________

Lowering of the USD had no effect on the Current Account deficit which is expected to rise to 6.5% of GDP this year.

A massive devaluation will be opposed by Japan and Europe who fear loss of exports. They are holding the USD prisoner to some extent aided by China. I don't think there is any objection to a higher USD from their end.

The problem is that the US consumer gets false signals, thinking that everything is ok and prices of goods from China look good. There also is less to pay for oil.

The US was talking about GST (Consumption tax) but haven't done anything.

So the road to a heavier degradation of the US financial system will take longer than originally perceived, I think.

The US earning reports will soon be out of the way, some people expect a heavier correction to the market.

That could foreshadow a recession which isn't acceptable to the US.

Is Greenspan's box of tricks empty? I would think so but printing more dollars should encourage more inflation in those conditions.

Deficits continue but taxes are less in recessionary times while much expenditure is a constant more or less. Also, at the moment, the USA calls on 80% of the world"s savings to finance the deficits and this is about $US2.5 bill/day now.

A world recession would be bad for deficit financing. Affected countries will most likely call on money they can get hold of leaving much less to finance UD debt.

There has to be a way of reducing sharply the deficit in these conditions. Commentators agree that printing far more dollars will quickly increase inflation and depreciate the debt. Altogether a distasteful exercise to watch by lenders.

Capital controls to stop the outflow of overseas currency will be brought in, I think. Without those the USD will sink too deeply.

There is really only one realistically surgical way of cutting back this massive debt hard and that is by inflation.

Gerry
All this before any war or terrorist or supply risk is brought into account.
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[miner]

If a weak USD meant that gold went down Gerry would be dredging up every bit of info he could find off the net to say that the US was strong as and everything was okydoky.

Cheers
Miner

[stolwyk]

My last post was a winner at HCopper, miner.

That is the reason why you sabotaged it.


You wrote: "If a weak USD meant that gold went down".
Like your other mates, you don't have a clue, do you.



I always publish the gold price whether up or down.

I think you are aging too fast; sometimes a kindergarten kid is more mature than you are.

You better email someone of your gang so this post can be answered. Email a "heavy".

[miner]

Actually Gerry only time I ever tried to have a look at HC was about 4 years ago,was to much of a hassle to join,haven't bothered since,and as it's ramper central have no intention of trying again,anyway charts just came right after packing a sad so will leave you to your gold ramping.

[stolwyk]

US jobless claims rise against expectations
http://news.ft.com/cms/s/0d14b588-9c6a-11d9-b1c2-00000e2511c8.html

Econovan: "The results, combined with soft durable-goods data also released at 8:30 a.m. ET, gave a lift to the bond market and made the dollar sag. Claims data had been showing improvement in February, and the current downturn does cut the outlook for economic growth".

"Signs have been building for several months that the manufacturing sector, having enjoyed strong growth in 2004, is now cooling. In a bit of an ironic twist (the natural balancing of economic forces), slower manufacturing growth is probably good for the economic outlook -- softening demand for raw materials and factory labor will keep down inflationary pressures, which are becoming the new focus of the financial markets".


Exclusive interview with Silver Guru David Morgan -
http://www.kitco.com/ind/hunt/mar242005.html

_______________________________________

Market: USD 84.22 0il 54.84 Euro 1.293 Gold 424.7 (+0.7) Silver 6.9

[stolwyk]

GREENSPAN, THE MAGICIAN AND HIS MONKEY.

Greenspan (G), the magician is coming to town and there is great excitement. He is well known and comes complete with his monkey called Baa. This monkey can talk too but uses only a few words: "God is with me" or "God told me to".

G has 2 assistants, Snow and Bernancke. Snow likes to imitate G but sofar has only advanced to being a Cheer leader. Bernancke is a strange fellow: Occasionaly he takes his helicopter for a flight and then throws bundles of cash out of the window.

Once a month, they take a trip to one of the Carribbean Banks, G has. G is a very shrewd man and uses smoke and mirrors: he creates cash, transfers it to these Banks and when the Current Account needs financing, the money comes back as foreign exchange to finance this deficit. And everyone thought that G couldn't do it! A real Wizard!

G is never short of cash: he waves his magic wand, utters the words "abra cadabra" and billions of dollars appear from nowhere.

G is famous and his sayings are eagerly read. If there is a problem, he just keeps throwing money at it. When there is too much money, the monkey keeps chewing it and shares it with his mates who come from Iraq, Saudi, Afghanistan, Iran and Venezuela. A strange monkey alright, keeps saying that God drives him. Goes berserk when he sees oil.

Now you see, now you don't. Snow wanted G to solve that inflation problem so the real number won't show . And it is here where G excels himself. He cooks the CPI (Consumer Price Index) data by various means, one of which is "hedonic" adjustment.

An example is a computer which costs say $1000. A year later the price is still the same but it can do 10% more than before. Thus, in this case there is a 10% deflation to be offset against inflation somewhere else. So, the overall inflation number will look better.

An extraordinay high inflation increase of an article can be omitted. So, when the CPI appears as an official 4.5%, it is really 6-6.5%. I told you, now you see it, now you don't.

The monkey likes G because G can do tricks and the audience loves these. G can also change the components of the GDP (Gross Domestic Product), so the final number looks higher than it should be. That is a very popular trick because the American audience likes to think that the US is tops in everything: "Uber alles".

And so the unemployment number can also be doctored to make it look good. Oh yes, magician G is in high demand overseas as well: politicians under stress love to see difficulties disappear and he can teach them how to do that.

G is a powerful man and has a vast array of TV channels, newspapers and other organs to support him. So has Snow and even the monkey commands respect as well.

Snow was a bit worried about inflation. No problem; after having doctored the CPI data, G threw a lot of gold on the market and this kept the price of gold down down. A rise in the price of gold denotes inflation, so keeping an artificial low price of gold meant that inflation is low.

That was a bit hard to take by some journalists, but if they became too vocal, then some would lose privileges: not being invited to attend the President's announcements and functions or being designated to the rear where they couldn't hear much.

There is a lot of disinformation about and this is eagerly lapped up by the readers. After all, good news is worthwhile news, the rest isn't worth distributing.

G has a famous saying: IT IS ALL ABOUT CONFIDENCE. Too right and if that takes smoke and mirrors to achieve that, so be it.

But he has one problem which keeps him from sleeping. He can't make the rabbit come out of his tophat!

Gerry

[dingdong]

O Stolwykos, we are unworthy of your daily plagiarised thoughts.

[Capitalist]

Bwahaha - and Greenspan is an atheist for starters. People are fools.

[stolwyk]

A Slowing Economy with Higher Costs
http://www.financialsense.com/Market/hartman/2005/0324.html

Extract:
"The Indian response seems to be realistic in my mind. “I see no reason why India's priorities should be subservient to U.S. priorities,” said Raha, who has worked for state-run oil companies for the past 35 years. “The U.S. is chasing oil and gas as badly as China or India or anybody else.” The article went on to say that Oil & Natural Gas (India’s national oil company since 1959) will buy 20% of Iran’s Yadavaran oil field and may take a stake in the Juffair field. Oil & Natural gas also has contracts with Venezuela, Sudan and Russia for drilling new fields and India is also in talks to acquire assets of Yukos Oil Company from Russia. To play it fair, India is also in talks with Exxon Mobil to discuss deep-water drilling off India’s coast.

"The big picture has India and China doing deals with Russia, Iran and Venezuela…not to mention Europe buying roughly 80% of their oil from Russia. These are clearly energy deals centered on the member countries of the Shanghai Cooperation Organization. You won’t hear much about the SHO in the mainstream media, but when the countries mentioned get into the headlines, remember the close trade alliances they have with each other that do not involve the USA.

It’s no wonder Iran and other countries are working to establish an oil trading exchange that will be denominated in euros rather than U.S. dollars…we’ll see if they can pull it off or if the U.S. will insist that all oil be traded in dollars…it’s becoming quite the battle royal!!"

-------------------------------------
Comment:
Yes, a trading exchange in Euros won't suit the USD as it could damage it badly.

Possibly the major reason, the US isn't happy with Iran, although nuclear technology will be mentioned instead.

Previously the USA stopped the Saudis from joining in a Petrodollar bloc.

The US have become arrogant and overplayed their hand. That could have repercussions with Iraq as well as the Shias are in both IRAN and IRAQ.


THE RESOURCE WARS HAVE STARTED I THINK-or rather the lead time is becoming much shorter.


China: The final war for resources: http://news.goldseek.com/OnlineInvestorsNews/1107897207.php


MONEYIZATION #9
from THE VALUE VIEW GOLD REPORT
http://www.gold-eagle.com/editorials_05/schmidt032505.html

[stolwyk]

Start-up data:
USD 84.11 oil 54.84 Gold 424.10 Silver 6.89



FINANCIAL SENSE:

Perhaps it is worthwhile to listen to "the 3rd hour":

http://www.netcastdaily.com/fsnewshour.htm

[Mick100]

Should be an interesting week after the across the board sell-off in general equties, commodities and gold last week.

Most of the commentaters i'v been listening to and reading are predicting sideways movement (consolidation) in PM's and commodities for the next 3-4 months.

I'm not surprised that commodites have been dragged down a bit by the general eqities, I just hope they don't get dragged down too far.

Mick

[stolwyk]

"Most of the commentaters i'v been listening to and reading are predicting sideways movement (consolidation) in PM's and commodities for the next 3-4 months".

It could be; there could still be political problems as well, I think (Iran). Anything is possible.

[stolwyk]

USD 84.62 (+0.45) Euro 1.289 $A 0.7692 Gold 425.8 Silver 6.87 0il 53.9


The Daily Resource - 3/28/2005
http://www.kitcocasey.com/displayArticle.php?id=37



The Future of Uranium - Paul van Eeden
http://www.kitcocasey.com/displayArticle.php?id=54


Foreign Treasuries Purchases Update 3/25/05 (JAPAN)
http://www.kitcocasey.com/displayArticle.php?id=56

[stolwyk]

usd 0.8432 (-0.28) oil 54.41 (+0.18)

Euro 1.2928 Gold 425.8 Silver 6.96 DOW -0.8% NZ/USD 0.710

The Confidence Game
http://www.financialsense.com/Market/wrapup.htm

Extract:
"As long as real interest rates are kept below the rate of asset inflation, the debt pyramid will continue to grow. The only thing that could bring this to an abrupt halt would be a rise in real interest rates which now appears unlikely.

As Stephen Roach has recently written, with inflation running at an annual rate of 3%, a neutral rate would be somewhere in the neighborhood of 5.75%. That is not going to happen.

A federal funds rate of 5.75% would bring this debt-laden economy to its knees. It would end the “carry trade,” unwind the bond market bubble, send stock prices crashing, and puncture the real estate bubble".

+++++++++++++++++++++++++++++++++++

Comment: Real Inflation is running at about 6%, I believe but the CPI is being doctored.

The US economy has been in a check-mate situation for some time now but disinformation and a lack of sophistication means that as yet not that many will accept it.

After all, who wants the unpleasant truth?

Smoke and mirrors.

Gerry

+++++++++++++++++++++++++++++++

Asia bent on having own oil market despite warnings:
http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=3&u=/afp/20050329/bs_afp/usasiaenergy_050329084140

Tue Mar 29, 3:41 AM ET Business - AFP



WASHINGTON (AFP) - Several Asian countries are pushing ahead with their long held objective of establishing a regional oil market for cheaper supplies, despite warnings such an initiative could backfire.

"If you look at both production and consumption, Asia feels shortchanged," Debnath Shaw, an Indian diplomat, said Monday at a conference organized by the Center for Strategic and International Studies (CSIS), a Washington-based think tank.


Most of the world's supplies are controlled by members of the Organization of Petroleum Exporting Countries (OPEC). The main oil consumers -- North America, Europe and developed Asia -- in turn have formed their own grouping, the International Energy Agency (IEA), to protect their interests.


Being latecomers to the industrialization process, developing countries like India, China and the Southeast Asian economies "find they have no space for themselves" because the so-called oil market "is already divided between the producers and the users," Shaw said.


For example, Asian nations pay an extra 1.50 to 2.00 dollars for every barrel of oil from a refinery in Saudi Arabia compared to North American and European customers, he said.


An Indian diplomatic officer, Shaw is a visiting fellow at CSIS in Washington. He is conducting research on India's energy policies and its relationship to other Asian countries.


In the first ever effort to forge an Asian market for crude and products, regional energy ministers met in India's capital New Delhi in January in an attempt to forge a long-term crude oil supply contract like those that exist in London and New York.


The ministers also mulled strategies for the oil sector that could boost their countries' stability and security.


Participants included Asian consumer nations Japan, China, India and South Korea, as well as top producers Saudi Arabia, Kuwait, the United Arab Emirates and Iran, classified as West Asian rather than Middle East economies at the talks.


However, Alan Hegburg, a senior fellow at CSIS's energy program, cautioned that Asian nations would do more damage to the global oil market and investment if they forged a regional grouping.


"There is a global oil market and trade. There is global oil market and investment. It is competitive," said Hegburg, who once managed political strategic planning for three multinational energy firms Phillips Petroleum, Amoco and BP.


"If you start setting up regional groupings to try to deal with that, you are in danger of doing more damage than leaving it as it is," he said.


"If you say everything on investment is goin

[stolwyk]

The US consumer confidence fell 2 points and the real GDP in Oc/Dec was 3.8%. (Using Dr Richemaier's honest calculations, this translates to 1.52%, say 1.6%).

THe USD has been stopped and is steady at 84.25. Euro 1.2923 $A 77.07 Gold 426.4 Silver 7.11 oil 54.0 DOW: up 135 or 1.3%


Gerbino is a Gold/Silver trader but this time he refers to base metals:
http://www.kitco.com/ind/gerbino/mar292005.html


MORGAN: SILVER-Some Questions and Answers
PART ONE - SHINE ON SILVER!
http://www.gold-eagle.com/editorials_05/morgan032905.html


Forest: The Daily Resource - 3/30/2005
http://www.kitcocasey.com/displayArticle.php?id=37


Mahathir: US dollar collapsing (Thanks Bruce).
B.K. SIDHU, MUGUNTAN VANAR and RUBEN SARIO at the International CEO conference in Kota Kinabalu
THE US dollar is facing an imminent collapse, Tun Dr Mahathir Mohamad warned yesterday.

The former prime minister told a conference of some 650 chief executives from 30 countries in Kota Kinabalu that a standard gold currency was the best alternative for international trade.

The dollar was only retaining some value because of fears of a global economic catastrophe if it was rejected as a currency of trade, he said in his keynote address, Leadership in the Age of Uncertainties – The Effect of Global Events in Business.

“But the catastrophe will come one day, because even the most powerful country in the world cannot repay loans amounting to US$7 trillion,” Dr Mahathir said at the closing of the three-day international CEO conference.

“The uncertainty is with the timing, not whether it will collapse.”


Tun Dr Mahathir Mohamad taking a closer look at handicraft exhibited at the International CEO's Conference 2005.
Noting that the dollar had devalued by as much as 50% against the yen, he said it was doubtful if the greenback could recover to its old strength. Instead, it would continue to slide, as the present American administration under President George W. Bush did not consider deficits worth reducing.

Dr Mahathir said, due to America’s huge deficit, the US currency had no backing, but continued to be in use because some people still accepted payments in dollars.

“But there will come a time when we will switch away from the dollar, and we have suggested the use of gold for international trade,” he said.

He added that if companies did not want to be “short changed”, they should insist on payments in alternative currencies such as the euro, or be paid in US dollars but in euro-equivalent in value.

Dr Mahathir later told reporters that he was giving his personal views after having studied the current depreciation of the dollar.

“Unless they (Americans) change their president and have a more responsible president who will try to reduce the deficit, they will have serious trouble with the US currency,” he said.

On whether Malaysia should reject the use of the greenback for trade, he said it was up to the Government to decide.

“But it has to be seen if the US will be responsible enough, and start to reduce its deficit,” he added.

Dr Mahathir said he believed central banks worldwide were reducing their US dollar reserves, and he suspected that Bank Negara was also switching to other currencies.

He also said that local companies going abroad should form an association open to credible members who can deliver the job".

[Mick100]

Even Stephen Roach Has It Wrong

Peter Schiff

In his latest commentary, Morgan Stanley's Stephen Roach, perhaps the only Wall Street economist who at least partially comprehends the looming economic danger, once again lamented that a "co-dependent global economy can't live without the excess consumption of Americans. " This echoes the popular misconception that Americans are some how doing the world a favor by consuming the fruits of their labor.

The world no more depends on American's consumption than medieval serfs depended on the consumption of their lords, who typically took 25% of what they produced. What a disaster it would have been for the serfs had their lords not exacted this tribute. Think of all the unemployment the serfs would have suffered had they not had to toil so hard for the benefit of their lords. What would they have done with all that extra free time?

According to modern day economists, if the lords had decided to increase their take, say to 35%, it would have been the equivalent of an economic boom for the serfs, who would have been insured more work. Too bad the serfs did not have economic advisers or central bankers to encourage such progressive policies!

I have written on this subject in the past (see my former commentaries entitled: "CNBC Redefines the Word 'Sacrifice'," Feb 10th 2005 and "The U.S. is Not a Special Case, Just an Extreme One," Jan. 18th 2005). Both articles are archived in the commentary section on my web site at: www.europac.net/archives.asp. However, I would like to put the ridiculous assumption that the world benefits from America's excess consumption, and has something to fear from its cessation, to rest once and for all. Consider the following analogy:

Suppose six castaways are stranded on a deserted island, five Asians and one American. Further, suppose that the castaways decide to divide the work load among them in the following manner: (for the purpose of simplicity, the only desire the castaways work to satisfy is hunger) one Asian is put in charge of hunting, an other in charge of fishing, and a third in charge of finding vegetation. A fourth is put in charge of preparing the meal, while a fifth is given the task of gathering firewood and tending to the fire. The American is given the job of eating.

So, on our island five Asians work all day to feed one American, who spends his day sunning himself of the beach. He is employed in the equivalent of the service sector, operating a tanning salon which none of the Asians on the island utilize. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table, built by the Asians specifically for this purpose.

Realizing that subsequent banquets will only be forthcoming if the Asians are alive to provide them, he allows them just enough scraps from his table to sustain their labor for the following day.

Modern day economists would say that this American is the lone engine of growth driving the island's economy and that without his ravenous appetite, the Asians on the island would be unemployed. The reality, of course, is that the best thing the Asians could do to improve their lots would be to vote the American off the island. Without the American consuming all of their food, there would be a lot more available for them to eat.

Alternatively, they could spend less time on their food related tasks, devoting the extra time to greater leisure or to satisfying other needs, which previously went unfulfilled since much of their scarce resources are currently devoted to feeding the American.

Now some of you might be thinking that this analogy is flawed, as in the real world economy, Americans pay for their food, so real world Asians providing the meals receive value in exchange for their effort. O.K. lets assume that the American on our island pays for his food in the same manner real world American pay for theirs, buy issuing IOU's. Let's assume that at the end of the meal, the Asians present the American with a bill, which he pays

[whiteheron]

Re Peter Schiff article

This is pretty much what I have been thinking for some time
What a good article

The USA will not be able to continue on its present course forever
Some time (I believe within the next three to ten years ) the USA is going to have a very hard landing
The rest of the world will no longer continue to accept rapidly depreciating IOUs ( treasury bills ) from the USA for its gross overuse of the worlds diminishing resources
They will want value , not useless pieces of paper

In ten years time the world will be a very different place I believe ; and the major power will not be the USA but China

That is my opinion --- time will tell

[stolwyk]

SPECIAL

JEDDAH, 29 March 2005 — The six-member Gulf Cooperation Council countries are committed to issue the GCC common currency in the year 2010, Finance Minister Dr. Ibrahim Al-Assaf stated yesterday. He denied press reports that the new currency has been named Gulf dinar. “We have not yet finalized the name of the currency as to whether it be Gulf dinar or riyal or any other name,” Al-Hayat Arabic daily quoted the minister as saying.

According to a study, the new currency will be the world’s most important currency union after the euro.

The GCC currency will have far-reaching implications, including a big boost to inter-GCC trade, and could help the region’s countries diversify their economic base away from hydrocarbons, said the study prepared by the Dubai-based Gulf Research Center (GRC).

“The relevance of the currency is not only because it will be the single currency of an economic bloc that has a GDP of $388 billion and controls 45 percent of the world’s known oil reserves, but also because currency unions invariably increase the levels of intraregional trade,” it said.

Once established, the GCC leadership may decide to invoice their hydrocarbon sales in the new common currency, moving away from the current dollar pricing system. It could also become the reserve currency of choice for Islamic and Arab central banks for a combination of religious and political reasons.

Al-Assaf also disclosed that GCC finance ministers would meet in Riyadh on Sunday to discuss important topics including GCC’s negotiations with the European Union. “We will discuss ways to remove the obstacles confronting GCC-EU talks to conclude a trade agreement,” he said.

The Saudi minister was speaking to reporters after attending a ceremony organized by the Jeddah-based Islamic Development Bank to mark its 30th anniversary. He refused to describe the US-Bahrain talks to establish free-trade zone as a crisis. However, he pointed out that the Riyadh meeting would discuss the matter among other topics.

Al-Assaf said Saudi Arabia has proposed to renew the term of Dr. Ahmed Muhammad Ali, president of IDB, for another five years. “We have presented a proposal officially last week to Malaysian Prime Minister Abdullah Badawi, current chairman of the Organization of the Islamic Conference,” he said. IDB governors meeting, scheduled to be held in Malaysia after three months, will take a final decision on the issue.

[stolwyk]

SPECIAL (Contd)

COMMENT:

If the Gulf countries, possibly reinforced by India, Malaysia, and Venezuela set up their own currency, then the fall-out could be a disaster for the $US:

1. For starters, the USD will become a third grade currency behind the Euro and the new proposed Gulf currency and be behind the Chinese currency sometime later on.

2.1 Many Central Banks won't then stock that many USD anymore. A lot of USD will return to the USA and create inlation. If they already had some of that-they would have, then that will make it far worse.

2.2 The Europeans, Gulf countries and the Chinese will have "valuable currencies", so most countries will have these in their basket of currencies as reserves. The USD wil take a back seat.

3. GOLD will become more important as these countries already stock it. Those West Europeans and Americans who don't have any, will have to hunt for it.

4. Apart from the Gulf, more contracts will be written in Euros as well rather than in the not to be trusted USD.

5. Not too many will be interested in financing the US deficit because Investors and Central Banks would rather seek the better currencies.

This in itself could result in a US super inflation; perhaps to follow a stagflation bout much earlier as some commentators and I predict.

6. Enormous rises in costs and marginaliation of assets will be incurred by an already low USD with the US manufacturing capacity destroyed because of Outsourcing. The US could be in a check mate situation.

The proposals could be staged a bit so as to reduce the damage to the USD but limitations apply.

7. They want to have the new Gulf currency to be effective by 2010. That means that by 2007-2008, if it goes ahead, the effects will be starting to be felt.

It could be a mistake to go living in the US before long, I think. We first have the fall-out from Greenspan's "games" starting say later in 2005 and this could converge with/followed by the fall-out caused by the realignment of the Currency Blocks.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

NUM, the National Union of Mine workers in South Africa has 280,000 members of which 100,000 gold miners went on strike, now increased to 130,000. The last big strike was in the eighties.

If this one draws out, then less gold will be produced and more permanent mine closures can be expected. Production from Central and North Africa is becoming more dominant with time.
______________________________________

The USD fell to 83 85 but recovered somewhat after the latest US reports came through:
http://mam.econoday.com/reports/US/EN/New_York/personal_income_and_outlays/year/2005/yearly/03/index.html

Jobless claims increased somewhat.

USD 84.05 Euro 1.296 $A 0.7729 oil 55.25 gold 427.6 silver 7.11

The Daily Resource:
http://www.kitcocasey.com/displayArticle.php?id=37

CASEY- URANIUM UPDATE:
http://www.kitcocasey.com/displayArticle.php?id=57

[stolwyk]

NON-FARM payrolls rose by 110,000 instead of the predicted 225,000.
Oil stayed high and from Econovan re ISM Manufacturing Index:

"Prices paid are signaling new troubles, coming in at 73.0 vs. 65.5 in February. Month-to-month costs for basic materials apparently are climbing at a faster rate -- this is bad news for the bond market which has been jittery following last week's FOMC warning on inflation".

The DOW dropped 1%, the USD rose to 84.41 (+0.35). Euro 1.2893 oil 57.3 Gold 425.9 Silver 7.0 CRB 311.9 (-1.7)

U.S. March Payrolls Rise 110,000, Trailing Forecast (Update1
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aHAUYkMHswTw&refer=home


HAMILTON has discussed the gold/oil ratio quite some time ago.
Here is another Installment:
http://www.kitco.com/ind/hamilton/apr012005.html


Forest: The Daily Resource - 4/1/2005
http://www.kitcocasey.com/displayArticle.php?id=37


Paul van Eeden:
Strikes at South African gold mines do not mean higher prices:
http://www.kitco.com/weekly/paulvaneeden/apr012005.html

[combi]

Hello Gerry, the gold oil ratio is amazing to see in chart form.

I thought the the global markets would hold together through to October 05 but I'm now thinking it could take a big hit sooner.

Rising oil prices will put the breaks on the world econ big time and terror attacks on supply would stuff the USA giving the ter the upper hand, so they will be trying.

Gerry what stocks in AU have un hedged gold production?

Many thanks for the posting.

[stolwyk]

Hi Combi,

This was his predecessor of August 20. 2004:
http://www.gold-eagle.com/gold_digest_04/hamilton082004.html

Gold has been manipulated over time and that is the problem, I think.

As to Australian companies, there are several unhedged. I don't like the small ones in today's conditions, preferring more than 1.5 mill.
ounces.


Gerry

[stolwyk]

Peter Schiff:
GREENSPAN'S REAL CONUNDRUM: STAGFLATION
http://www.financialsense.com/fsu/editorials/schiff/2005/0401.html

Text:
Today's release of March's much weaker than expected non-farm payroll numbers (110,000 verses average estimates of 213,000), together with February's downward revisions, provides clear evidence that the "recovery" is indeed faltering. Traders sold dollars and bought stocks and Treasuries, on the theory that weaker jobs growth might slow the pace of future rate hikes.

However, an hour and a half later, traders bought the dollar back, and dumped stocks and Treasuries, when the Institute of Supply Management released that its February prices paid index surged from 65.5 to 73, causing them to reassess their assumptions.

The conundrum: With job growth faltering, could the economy be headed for the dreaded double dip? However, with the dollar still on the defensive, oil and other commodity prices on the rise (oil prices surged today near $57 per barrel,) employment cost pressures mounting, and foreign producers beginning to pass on higher production and transportation costs to American consumers, inflationary pressures are clearly intensifying. Recession or inflation, which dragon is Sir Prints-a-lot prepared to slay? My guess is neither. Once traders comprehend this dismal reality, they will sell dollars, Treasuries, and stocks, feeding both beasts simultaneously.

An asset driven bubble-economy that lives on credit, dies by it as well. As Greenspan slowly removes the punch bowl, the long intoxicated party guests, as they finally emerge from their drunken stupors, will be confronted with the sobering reality of dealing with the consequences of their inebriation. As interest rates rise, borrowers will realize that they have paid way too much for houses and other assets, and committed to interest payments they cannot afford to make and principals they will never be able to repay. Lenders will also realize they have recklessly lent money to non-creditworthy borrowers, based on insufficient collateral and pie-in-the-sky assumptions. As credit contracts and asset prices fall, so too will consumer spending, and the consumption based economy it supports.

To fight off the recession dragon, Greenspan will look to brandish his only weapon, his interest-rate-cutting sword. However, the minute he does, he will be attacked by his other nemesis, the now much fiercer inflation dragon. To fight this monster, Greenspan will reach for his other weapon, his interest-rate-hiking sword. Realizing that he cannot wield both swords simultaneously, he will slay neither, and be consumed by both.

Below is a commentary that I wrote last June, highlighting the growing threat of stagflation, the evidence for which is now that much clearer.

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

June 24, 2004

Recent Government Numbers Continue Pointing to Stagflation

Recent evidence of higher than "expected" inflation and weaker than "expected" economic growth continues to support the likelihood of a "stagflation" scenario. For those unacquainted with US history prior to MTV, "stagflation," an economic condition most associated with 1970's, involves a period of stagnant growth and high inflation. If the latest economic trends continue, it may be time for all of us to dust off those polyester shirts and 8-track tape players.

Last week the government released higher than "expected" increases in both consumer and producer prices, and larger than "expected" increases in the trade and current account deficits. This week, the government released an unexpected 1.6% decline in May durable goods orders (the forecast had been for a 1.5% gain, and follows an even larger 2.6% decline in April), a larger than expected increase in unemployment claims, and an "unexpected" sharp downward revision to first quarter GDP growth (from a previously reported 4.4% to 3.9%). The GDP deflator was also "unexpectedly" revised upward to show a gain of 2.9% verses the 2.5% gain previously reported. The personal consumption expenditure i

[stolwyk]

usd 84.78 (+0.34) oil 56.7 euro 1.2852

Gold 424 silver: 7.02


FOREX-Dollar gains on widening interest rate spreads
http://www.reuters.com/financeMarketReportArticle.jhtml;KHFCWBBABHCKACRBA EOCFEY?type=usDollarRpt

Forest: The daily Resource:
http://www.kitcocasey.com/displayArticle.php?id=37

Gold/silver ratio chart:
http://www.gold-eagle.com/editorials_05/bloom040305.html

[stolwyk]

Reasonably steady. USD: 84.7 Euro 1.2875 Gold 425 silver 7.03 oil 55.8



The Daily Resource - 4/5/2005
http://www.kitcocasey.com/displayArticle.php?id=37


Fed Inflation Hawks Fret About Price Pressures
http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=8082720


ECB itches to raise rates, but why
http://www.iht.com/articles/2005/04/04/business/ecb.html

[stolwyk]

USD 84.68 oil 55.85 Goldf 426.2 Silver 7.09


The Daily Resource - 4/6/2005
http://www.kitcocasey.com/displayArticle.php?id=37




HELLO, INFLATION IS NOT GOOD FOR THE DOLLAR
by Peter Schiff
http://www.financialsense.com/fsu/editorials/schiff/2005/0406.html


GENERAL MOTORS, THE STOCK MARKET AND GOLD
by Nick Barisheff
http://www.financialsense.com/fsu/editorials/bms/2005/0406.html

[stolwyk]

USD 84.95 Oil 54.0 Gold 425.0

Dave Forest: Daily Resources REport:
http://www.kitcocasey.com/displayArticle.php?id=37


Mineral and metal prices to remain firm in 2005 - World Bank
http://www.miningweekly.co.za/min/news/today/?show=65403


China: U.S. Should Fix Own Economic Woes
http://www.hotcopper.com.au/post_add.asp?fid=2


World Bank warns on dollar 'risk' for poor
http://news.ft.com/cms/s/d7a003c4-a6a2-11d9-a6df-00000e2511c8.html

[Mick100]

quote:Originally posted by rocking

Talk about a lone piper. Where's Sniper?


There's plenty of people following this thread rocking

Personally, I check out this thread daily - always an interesting article or two to look at.

.

[Mick100]

A look at the American economy by Mark Rostenko

http://www.gold-eagle.com/editorials_05/rostenko040605.html

,

[stolwyk]

USD down to 84.4 Euro 1.2862 Gold 426.7 Silver 7.15 oil 53.32 DOW: down 0.84%

The Bank of England and the ECB kept their rates.

US wholesale trade: Inventories up:
http://mam.econoday.com/reports/US/EN/New_York/wholesale_trade/year/2005/yearly/04/index.html


Bill Ridley: Higher Oil Prices Send Resource Stock Investors into "Analysis Paralysis"
http://www.kitco.com/ind/Ridley/apr082005.html


Will US Deficits Mean Higher Commodities Prices?
http://www.kitcocasey.com/displayArticle.php?id=62


Paul van Eeden:
Word from the World Bank
http://www.kitco.com/weekly/paulvaneeden/apr082005.html

[stolwyk]

OPINION

When will the Gold price break loose?

That has been the question for some time. I believe Gold will break loose from currencies when a number of negative parameters converge:

1. High, continuing and increasing deficits leading to strong interest rate rises.

2. Rising oil prices which bring in more inflation.

3. Severe problems with Trade in general: China is increasing its exports in a big way and that clashes with that of other countries. Apart from raw resources, China doesn't really need to import that much given time, once the R&D is transferred to them-it gradually is-.

4. Refusal by some countries to revalue their currency.

5. Effects of underrated OUTSOURCING is starting to show in the more prominent countries.

6. US consumption is about 75% of GDP. A refusal to substitute savings.

7. A refusal by the US to increase exports of goods (a mere 8% of GDP)


8. The combined effects of items 1-7 severely undermine the dollar and the Euro. We are starting to look at Stagflation.

It is clear that we must be well on the way in meeting those conditions. Not all are needed to make the gold price rise but a simultaneously coming together of a number of negative outcomes is a powerful driver to bring about a significant rise in the price of precious metals, IMHO.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[Mick100]

I think the PM's are following the same pattern as in 2003 and 2004 - Weak first half of year followed by a strong second half

Gold will begin the "C" wave soon which has proved to be the big move up in the past, surpassing previous highs

,

[dingdong]

O Stolwykos you will be in heaven before the gold price breaks loose again.

[stolwyk]

A good thought, Mick.

There are of course other prospective negatives to add, examples: the behaviour of the DOW and the success or not of the proposed setting up of an oil trading block in the Middle East.

__________________________________

Select: "The third hour with Jim and John":
http://www.netcastdaily.com/fsnewshour.htm


Why Hasn't a Weak Dollar Slowed Imports?
http://www.nytimes.com/2005/04/08/business/08imports.html?

Text:

By LOUIS UCHITELLE

Published: April 8, 2005


ARTICLE TOOLS


Printer-Friendly Format
Most E-Mailed Articles
Reprints & Permissions
Single-Page Format


Shopping the World

1. Op-Ed Contributor: One Hundred Years of Uncertainty
2. Op-Ed Contributor: Our Near-Death Experience
3. The Man Date
4. Op-Ed Columnist: Nukes Are Green
5. Op-Ed Columnist: Reining In the G.O.P.'s Parade
Go to Complete List


Sandy Huffaker for The New York Times
Imported jewelry at a kiosk in San Ysidro, Calif. Fashion trumps prices, even those raised by a weak dollar.


"The back-ordered Prius, with its hybrid gasoline-electric engine, is coming into the United States as fast as Toyota can turn the car out: 7,000 were shipped from Japan in February and the same number in January. That is just one of many indicators of how the everyday needs and desires of Americans keep imports rising despite a weaker dollar.

This winter, ships, planes and trucks coming from abroad also carried extra loads of costume jewelry from Austria and China; front-loading washing machines from Germany; tires from the Far East; refrigerators from Mexico and South Korea; and computers from China.

These are among the imports that have increased most quickly in recent months, helping to swell the January import bill to $159.1 billion, a record for any month. That comes after the 2004 trade deficit reached a record $617 billion.

Just when, at least in theory, imports should be falling or at least leveling off in response to a dollar that no longer buys as much in euros, pounds and yens, they have continued to surge. Imports now equal 16 percent of the nation's overall economic output, up a full percentage point in one year. They represented only 11 percent of the gross domestic product a decade ago. But while imported finished goods like costume jewelry and clothing are what most people notice most, what they do not see is even more significant.

The biggest change is that American companies increasingly import many of the parts and components that go into the products they make in the United States, drawing on the global economy to supply what they once made at home.

So when factories raise their production, as they are in the currently robust economy, foreign-made parts and components flow into the country in ever greater quantities. Exports also grow, but imports are rising faster, and the American trade gap widens.

"The current surge in imports is strongly related to our rising industrial output," said Kathleen Cooper, under secretary for economic affairs at the Commerce Department. "Goods that are assembled in this country have an awful lot of imported components that used to be made in this country."

That helps to explain why gasoline engines purchased abroad for cars assembled in America were up 8 percent in January, to $960 million. Imported steering and suspension mechanisms also shot up 8 percent in January, to $312 million, accounting for much of the 19 percent increase in these items over 12 months, according to an analysis of Census Bureau data by the United States Business and Industry Council.

Toyota is one of thousands of companies bringing parts from abroad, as well as finished vehicles. The 7,000 Prius cars imported in February more than doubled the monthly number a year ago, the company said. Toyota has gradually shifted production of many of its other models to the United States, and also the components that go into those cars. Still, roughly 25 percent of those components continue to be imported. As

[stolwyk]

Trading now: USD 84.51, Euro 1.2915 Gold 426.4 Silver 7.14 oil 53.15


Ballarat, Bendigo line up for new gold rush
http://www.theaustralian.news.com.au/common/story_page/0,5744,12813953%255E643,00.html


Silver and COT

Brian Bloom
http://www.gold-eagle.com/editorials_05/bloom040905.html

[stolwyk]

This is an important week with the US Trade deficit and the Treasury Budget tonight. On Friday, there is the Treasury International Capital:
http://mam.econoday.com/calendar/US/EN/New_York/year/2005/month/04/day/11/daily/index.html

The market is getting set up for it with a lower USD of 84.12 (-0.3), Gold 428.10 (+1.50) silver 7.25 (+10 cents) oil steady at 53.61. DOW -0.1%


Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=37


U.S. Stocks' 2 1/2-Year Rally May Soon End, Chart Watchers Say
http://www.bloomberg.com/apps/news?pid=10000103&sid=a43.6ONXw_uQ&refer=us

[stolwyk]

One previous post dealt with US and world events which could lead to Gold breaking loose from currencies.

I have rated these negative events from (1) to (10); A rating below (5) indicates that the problem is not that significant at the moment.

As the rating approaches (10), then it becomes worse; eg. a stockmarket with a rating 8 signifies that it is either close to a crash (10) or heavy falls can be expected.

THE ABERRATIONS:
High, continuing and increasing deficits leading to interest rate rises: (7.5)

Rising oil prices which bring in more inflation: (7)

Stockmarkets set for a downturn: (7)

Trade wars: China is increasing its exports in a big way and that clashes with that of other countries. Apart from raw resources, China doesn't really need to import that much given time, once the R&D is transferred to them-it gradually is-. (6.5)

Resource wars. (6.5)

Currency wars. (8)

Effects of underrated OUTSOURCING is starting to show in the more prominent countries. (7.5)

Decline in US consumption (9)

A refusal by the US to increase exports of goods (a mere 8% of GDP): (8)

European unemployment (7.45)

Global Gold production to decline over next 5 years: (7.5)


There are 11 items and the mean (average) is 7.45


The combined effects of these items could severely undermine the dollar and the Euro. Stagflation is coming closer. (8 out of 10)

It is clear that we must be well on the way in meeting those conditions. Not all are needed to make the gold price rise but a simultaneously coming together of a number of negative outcomes is a powerful driver to bring about a significant rise in the price of precious metals, IMHO.

These ratings will be updated from time to time.

That is my opinion.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[dingdong]

(in a slow robotic monotone) MUST BUY GOLD, MUST BUY GOLD, MUST BUY GOLD, MUST BUY GOLD....

[Mick100]

At a time when a lot of speculaters/investors are losing interest in the PM's, such as now, IMO, they will make a decisive move.

All the charts indicate an iminant breakout - probably to the upside.

http://www.financialsense.com/fsu/editorials/2005/0411.html

,

[Mick100]

RECORD TRADE DEFICIT DESPITE LOWER DOLLAR
by Peter Schiff
Euro Pacific Capital
April 12, 2005


Today's release of a record $61 billion dollar February trade deficit continues to confound the "experts" who have constantly predicted that a weaker dollar would be the cure for America's exploding trade imbalance. If anything the statistical record is showing an inverse relationship between the dollar and the deficit. The more the dollar falls, the higher the deficit rises.

Although the dollar has indeed fallen for three consecutive years, and is now trading near its all-time record low, America's monthly trade deficit is now at its highest level ever. If February's dismal performance were repeated each month for an entire year, America's annual trade deficit would eclipse $730 Billion (approximately $2,400 worth of borrowed goods for every man, woman, and child in the United States). However, in the absence of a significant change in the current dynamic, and given its current trajectory, this staggering projection is likely to be exceeded.

The reality is that a falling dollar, by itself, only exacerbates the trade deficit, by increasing the cost of imports. In addition, as domestic savings continue to decline, America becomes less able to finance the capital investments necessary to increase the production of consumer goods, thereby diminishing its ability to export. Today's data evidences this perfectly, as imports surged 1.6% while exports rose by a meager .1%

What is required for America to balance its books is a substantial change in the underlying dynamic of its dysfunctional economy. To export more and import less, Americans must consume less and produce more, requiring them to save more and borrow less. Since better than 80% of U.S. GDP is dependent on borrowing and spending, this adjustment will require a significant recession, unprecedented in the post-war era. In addition, as service sector jobs produce a limited output of tradable goods, significant transitory unemployment will result as many service sector workers seek more productive employment.

Further, as this transition necessitates much higher interest rates, and significantly lower assets prices (particularly stocks and residential real estate) its ramifications are indeed profound. Efforts by the government, the Fed, and foreign central banks to resist this change and postpone the recession, only serve to increase the size of the ultimate adjustment required. This delay will only exacerbate the economic pain inherent in the transition.

© 2005 Peter Schiff
Editorial Archive

CONTACT

[stolwyk]

The US trade deficit for Febr. was $61 bill ($59 bill expected). The Budget deficit was $71.2 bill compared with $68 Bill expected.

Current: USD 84.4 Euro 1.2913 Gold 428.0 Silver 7.16 Oil fell to 51.86
DOW: +0.6%

FOREX-Dollar up vs euro despite US trade data, FOMC
http://www.reuters.com/financeMarketReportArticle.jhtml;GBFPYMH02VUM0CRBA E0CFFA?type=usDollarRpt


Stephen Roach: Global: The Danger Zone of Global Rebalancing
http://www.morganstanley.com/GEFdata/digests/20050411-mon.html

The Invisible Hand (of the U.S. Government)
in Financial Markets (Thanks Dub):
http://www.financialsense.com/editorials/reality/2005/0403.html

[stolwyk]

US softer retail sales:
http://mam.econoday.com/reports/US/EN/New_York/retail_sales/year/2005/yearly/04/index.html

This contributed to the Dow falling by 1%. USD 84.4 gold 428.8 silver 7.20 oil 50.40


Clive Maund:
http://www.clivemaund.com/article.php?art_id=68


Gold Seeker Closing Report – Markets on Thin Ice
http://news.goldseek.com/GoldSeeker/1113429381.php
Extract:

“U.S. Treasury debt prices eased on Wednesday after an auction of $15 billion in new five-year notes drew only scant demand. The notes were sold at a high yield of 4.046 percent and drew bids for 1.86 times the amount on offer, far below the 2.59 average garnered for the previous 10 auctions of the same maturity.” The 10-Year Treasury note yield traded a bit lower this morning before jumping upward following the auction and gained 0.014 points to 4.374% as the June 2005 US Treasury bond lost 6/32 to 112 19/32.

More analysis on the treasury auction from Peter Spina of The Gold Forecaster: There was a lackluster demand from a class of bidders which includes foreign central banks, which picked up just 28% of the total auction compared to the prior 42%. Demand from foreign sources has been declining recently and provides a rather worrisome situation in the future should this trend continue as there are growing needs to finance the United States' massive debt burden.

[stolwyk]

IMF forecasts growth of 3.6% and 1.6% resp. for the US and Europe this year.

That and the positive difference of interest rates in favour of the dollar compared with that of the Euro, hardened the USD to the current 85.09. Oil is 51.25 Gold sunk to 423.3 and silver to 7.03 Euro 1.281.

I also want to add that the Japanese don't get a real interest rate on their savings at home but they can get an inflation proof tradeable US Bond at a very good interest rate. They invested some $US10 Bill. in overseas securities in the week to April 9.


The US reporting season didn't start well with the Dow down 1.2%

Comment: Some Inventory build-up and a slowdown in retail sales have been reported. That and a decreasing DOW signifies to me that the IMF forecast could be too positive.


IMF sounds alarm over US finances
http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=6&u=/afp/20050413/bs_afp/imfeconomygrowth_050413140116


NY gold knocked by fund sales amid weaker euro
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH09564_2005-04-14_14-56-46_N14388359

[clearasmud]

from Paul Van Eeden 15/4/05


Subject:will China allow her currency to appreciate


Central to the thesis that the gold price will continue to rise on the back of a falling US dollar, is the premise that China will forego its policy of supporting the dollar in favor of letting its own currency, the renminbi, appreciate. Both China and Japan are accumulating massive amounts of dollars as a result of their trade surpluses with the United States. But instead of selling those trade dollars into the foreign exchange markets, they, and other countries, are hoarding the dollars and investing them in US Treasury securities. As a result the US dollar is currently trading at a much higher exchange rate than it should versus the renminbi, the yen, other Southeast Asian currencies and, in fact, most currencies.

Many people have argued that China will not allow the renminbi to appreciate against the dollar because it needs US consumption to drive its fledgling economy. But pressure is mounting from Europe, the United States, the World Bank and the IMF for China to let its currency appreciate.

The contention is that Chinese exports have an unfair advantage in the world because the renminbi is undervalued in foreign exchange markets. The undervaluation is a direct result of China's dollar-hoarding policy, since it keeps the trade dollars that China receives every day off the market.

Support is growing in the US Senate for taking tariff action against China. The US trade deficit with China totaled $29.12 billion for only January and February of this year. That is a fifty percent increase from last year. The US trade deficit with China is now the largest of any country and almost double the size of the trade deficit with Japan, which is second.

The appointment of a new US trade representative is being blocked until Senate leaders vote on anti-subsidy laws against non-market economies such as China. In addition, a wide coalition of senators is backing legislation to impose a 27.5% tariff on all Chinese products entering the US if Beijing does not agree to raise the value of its currency.

If China does not allow its currency to appreciate against the dollar, and if the US goes ahead and implements the tariffs, all Chinese goods will become 27.5% more expensive for US consumers. On the other hand, if China allows its currency to appreciate, let's say by the same amount, 27.5%, then its goods would be no more expensive to US consumers than if tariffs were imposed. However, the cost of all China's imports would fall by 21.6% if it allowed its currency to appreciate by 27.5%. So what do you think China is more likely to do? Give the US government a revenue stream equal to 27.5% of the value of all Chinese imports to the US, or reduce the cost of its own imports by 21.6%?

The Chinese have always struck me as intelligent and practical. I suspect that China is going to let its currency appreciate. This not only means that the US dollar is going to fall, it also implies that US interest rates are going to rise because if the Chinese (and Japanese) no longer have to keep their trade dollars off the market to prevent the US dollar from falling they will also not need to buy as many US Treasuries as they have in the past.

It's all starting to come together. The next big upward move in the gold price will occur when China and Japan allow their currencies to appreciate and the dollar to fall. I have no idea whether it will be this year, or next, but I do believe the current decline in gold and gold related equities represents an opportunity.

I'll be speaking at next month's investment conference in New York. Visit my website www.paulvaneeden.com for details.

[SimonSays]

Ah, but what about the fate of the IMF's gold assets at a book value of USD 8 billion and a current valuation of USD 42 billion ? How much will they sell ???

[stolwyk]

US Company results continue to disappoint and the Empire State index (manufacturing) fell from 19 to 3.12, a huge fall. These 2 factors drove the USD lower to 84.5 (-0.5) and the DOW lost 191 points.

Euro: 1.293, Gold 424.5 Silver 7.01 Oil 50.49

Dollar Drops as Fed Manufacturing Index Falls to Two-Year Low
http://www.bloomberg.com/apps/news?pid=10000100&sid=a8phCaC1G8w0&refer=germany


The Maestro P. Volcker: AN ECONOMY ON THIN ICE
http://www.financialsense.com/fsn/041605article.html

FINANCIAL SENSE,16 ARIL, 3rd hour:
http://www.netcastdaily.com/fsnewshour.htm


Alex Wallenwein: Tariffs, Schmariffs ...... and then GOLD
http://www.kitco.com/ind/wallenwein/apr132005.html

[stolwyk]

UPDATE 17/4/2005

One previous post dealt with US and world events which could lead to Gold breaking loose from currencies.

I have rated these negative events from (1) to (10); A rating below (5) indicates that the problem is not that significant at the moment.

As the rating approaches (10), then it becomes worse; eg. a stockmarket with a rating 8 signifies that it is either close to a crash (10) or heavy falls can be expected.

An update is a number without brackets.

THE ABERRATIONS:
High, continuing and increasing deficits leading to interest rate rises: 8 (7.5)

Rising oil prices which bring in more inflation: (7)

Stockmarkets set for a downturn (Thanks Bruce R) 7.5 (7)

Trade wars: China is increasing its exports in a big way and that clashes with that of other countries. Apart from raw resources, China doesn't really need to import that much given time, once the R&D is transferred to them-it gradually is-. 7 (6.5)

Resource wars: 7 (6.5)

Currency wars: (8)

Effects of underrated OUTSOURCING is starting to show in the more prominent countries. 8 (7.5)

Decline in US consumption: (9)

A refusal by the US to increase exports of goods (a mere 8% of GDP). (8)

European unemployment. 8 (7.45)

Gold: Gold production to decline over next 5 years (Thanks Tasg): (7.5)


There are 11 items and the mean (average) is 7.72 (7.45)

The combined effects of these items can severely undermine the dollar and the Euro. Stagflation is coming closer 8.5 (8)

It is clear that we must be well on the way in meeting those conditions. Not all are needed to make the gold price rise but a simultaneously coming together of a number of negative outcomes is a powerful driver to bring about a significant rise in the price of precious metals, IMHO.

These ratings will be updated from time to time.

That is my opinion.

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[dingdong]

quote:Originally posted by stolwyk

Gold: Gold production to decline over next 5 years (Thanks Tasg): (8)

O Stolwykos we are truly unworthy that you have taken the time to devise an Armageddon Index. However your assumption that gold production will decline over the next 5 years is just plain wrong. Forecasts by ABARE and others have world gold production INCREASING 11% by 2010, and by a staggering 36% in Australia. Not to mention the 500+ tonnes of gold those evil central banks sell every year.

http://www.abare.gov.au/australiancommodities/commods/gold.html

[clearasmud]

Gerry Why are you predicting inflation as inflation is still subdued.

I thing deflation is more likely

[stolwyk]

I am predicting (Stagnant US economy + Inflation). Have done so for quite some time and I am not alone thinking that. It seems to me that to depreciate the massive debt, this will be the only way out. It will affect the world economy as well, I presume.

It is not too difficult to create extra inflation above that we have got at the moment but some is coming through now.


Received an email from someone who wanted to know about my gold supply and mining output Index.

The World Council mentions that the total World Supply of gold for 2004 was 13.3% less than for 2003.

The World Demand for 2004 was 3.6% higher than Supply.

Forecasts, unless these were made in the last few months can be ignored as the situation has changed: more mine closures in S Africa while in Australia, mines won't be started because of a 30% increase in costs over the full range due to heavy demand for services.

For example, drilling rigs are hard to come by and drilling will be expensive. Labour is not cheap anymore: 9 days on, 5 days off.

The 9 mill ounces Boddington Project won't be buying the needed plant and mining is deferred for a year at least.

Costs are high while the gold price remains low.

As to the Central Banks selling Gold, that is not new. They together can sell 500 tonnes/year and according to the WGC sold 378 tonnes last year. That is referred to as Official Supply and is part of the World Supply data.

Here is a good article about Supply:

Eric Hommelberg: GOLD & Supply
http://www.gold-eagle.com/editorials_05/hommelberg041505.html

Eric is a well known regular contributor.

Finally, my Indices in my previous report will only be kept up for a limited time, not exceeding 2 years and most likely for less time than this.


Gerry

[dingdong]

quote:Originally posted by stolwyk

Forecasts, unless these were made in the last few months can be ignored as the situation has changed: more mine closures in S Africa while in Australia, mines won't be started because of a 30% increase in costs over the full range due to heavy demand for services.

O Stolwykos, ABARE updated their forecasts in March 2005, recent enough to include said closures and shelved developments.

I would rather get my information on forecast production data from a reputable unbiased outfit like ABARE than from the gold-eagle peddlers.

[Mick100]

quote:Originally posted by Abdab


quote:Originally posted by stolwyk

Gold: Gold production to decline over next 5 years (Thanks Tasg): (8)

O Stolwykos we are truly unworthy that you have taken the time to devise an Armageddon Index. However your assumption that gold production will decline over the next 5 years is just plain wrong. Forecasts by ABARE and others have world gold production INCREASING 11% by 2010, and by a staggering 36% in Australia. Not to mention the 500+ tonnes of gold those evil central banks sell every year.

http://www.abare.gov.au/australiancommodities/commods/gold.html




Thanks for posting that link Abdab

It clearly shows that consumption will outstrip production by a further 290 tonns by the end of the decade

,

[stolwyk]

*NET* Dehedging was 445 tonnes for 2004 and something similar is expected for 2005. That is subtracted from supply:

http://www.gold.org/value/stats/statistics/gold_demand/index.html

I did say that the 2004 supply was 13% less than the 2003 supply and that demand was close to 4% higher than supply for 2004.

Gerry

[stolwyk]

You may quote all sorts of data but you don't give me the source.

As to ABARE, what publication do you get your data from? What is the heading and what page is quoted?

A certain amount of hoarding goes on often but where do you get that "1/6" from?

BTW, I don't consider ABARE all that good; big for making summaries, may be. They tend to rely a lot on surveys sent out.

So, if you could give me that info source, then I shall have a look at it.

DEFINITION OF HEDGING:
Hedging: Taking a buy or sell position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change.

Gerry

[stolwyk]

The 445 tonnes difference is the *Net* Dehedging position. In this case, the Dehedging position is 445 tonnes greater than the Hedging position. That is the official entry and has nothing to do with holding gold back.

I note you are unwilling to give me the precise source re those ABARE numbers as well. So, I can't verify those.

[stolwyk]

Commercial Price Capping In Gold
(Week Ending 4-16-2005):

Dan Norcini
http://www.gold-eagle.com/editorials_05/norcini041605.html

+++++++++++++++++++++++++++++++++++++++++

The following courtesy of hemscott.com , and Sunday Herald:

Not enough new fields to offset declines
By Valerie Darroch


THE world faces a global oil supply shortage after 2007, which would threaten economic growth, according to new research by the Oil Depletion Analysis Centre (Odac) which says that not enough major new fields will come on stream to offset declines .
“Our latest research confirms solidly our view that we cannot see any reasonable circumstances under which new supplies from expected mega oil projects could possibly meet world demand by 2008,” said a spokesman for London-based Odac.

Chris Skrebowski, a board member of Odac, has analysed all planned oil field projects worldwide with reserves of more than 500 million barrels and concluded that, on current timetables, output from new fields will be insufficient to offset more major oil producers moving into net production decline.

Shell, which last year faced a corporate crisis after overstating its oil reserves, recently said its reserve replacement ratio had shrunk to 19%, the lowest of any oil major. This means Shell is finding less than one-fifth of what it produces.

“More and more countries are tipping over into absolute decline. There are 18 major producers and 32 smaller ones in decline already – that adds up to 29% of world production,” said Skrebowski.

The Odac has calculated future scenarios based on a range of forecasts of annual world demand growth, ranging from modest expectations of 1% per annum up to 3%.

Last year, global oil demand grew by 3.3%, fuelled largely by China, and Odac argues that if demand continues to rise at this rate then, by 2008, the world will face a shortfall of one million barrels per day.

The Paris-based International Energy Agency (IEA) said last week it expects a moderation in Chinese demand and high oil prices to cool demand in 2005. But Skrebowksi said the IEA underestimated demand in 2004 and had to revise its estimates upwards every month.

He warned that if new field development timetables slip the world could face a supply shortage as early as 2007.

Fears of new developments falling behind schedule are growing as industry leaders warned that a shortage of skilled workers is causing increasing problems.

Sir Ian Wood, chairman and chief executive of Aberdeen-based energy services business Wood Group, said the people shortage has forced some contracting companies to stop bidding for work. “There’s a significant resource shortage right now. It’s a global workforce and a global issue,” said Sir Ian.

Geoff Runcie, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “I’ve just spoken to two managing directors who say their work has been curtailed because they haven’t got the people.”

Skrebowski said if projects fall significantly behind schedule, he cannot guarantee that supply and demand will be in balance in 2007 and that, in any case, “by 2008 it all starts to go pear-shaped”. He will detail his findings at a conference in Edinburgh on April 25.

His warning coincides with a G7 summit in Washington this weekend at which the impact of high oil prices on economic growth is high on the agenda.

Recruitment specialists report increasingly fierce global competition among employers seeking to recruit engineers, geophysicists, divers and other specialists. High oil prices have triggered major new developments worldwide and exacerbated the people shortage.

Estimates of current vacancies in the North Sea vary, but recruiters believe there could be several thousand.

Anthony Rose, account manager at oilandgasjob search.com, said: “We currently have 1377 active jobs available on our website, mainly engineers and geophysicists. But people are looking for staff from rig hands and roughnecks all the way up.

“We’re at an all-time high in terms of vacancies. This time last year we h

[stolwyk]

The USD fell 0.53 to 83.97 Euro 1.302 and Gold 427.1 (+2.9) Silver 7.01 oil 50.46 DOW-0.16%:

Gold Prices Climb for Second Straight Session as Dollar Drops
http://www.bloomberg.com/apps/news?pid=10000081&sid=a0nm95zTQ5eQ&refer=australia

Paul van Eeden: Will China revalue?
http://www.kitco.com/weekly/paulvaneeden/apr182005.html


Here is a special treat:
http://sprott.physics.wisc.edu/pickover/esp2.html#aleph2

[stolwyk]

USD 83.76 (-0.24) Euro 1.3063 Gold 433.1 (+6.00) Silver 7.24 oil 53.56 (rising). DOW +0.6%


Silver paces recovery in metals sector
http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=moreover&guid={95DE332C-8B49-4745-823E-FE5DE08ECF18}


General Motors Reports First-Quarter Loss of $1.1 Bln (Update3)
http://www.bloomberg.com/apps/news?pid=10000103&sid=a9OSmmxsUV28&refer=us


U.S. March Producer Prices Rise 0.7%; Core Rate Rises 0.1%
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aCgh7dA0Zh2U&refer=home

U.S. March Housing Starts Fall 17.6% to 1.837 Million Rate
http://www.bloomberg.com/apps/news?pid=10000103&sid=ah.w0WC_CU44&refer=us


Beijing ignores currency demands from G7
http://news.ft.com/cms/s/d653a6aa-b062-11d9-ab98-00000e2511c8.html

[stolwyk]

THe CPI for March was up 0.6% (Say 0.8% if this was a honest number) and after some confusion, the DOW dropped 1.14%.

Of some concern is that "Workers' real average weekly earnings fell 0.3 percent during the month, the second straight decline. Earnings also fell 0.3 percent in February". That will affect consumption in these inflationary times.

Current data: The dollar fell to 83.48 (-0.23) oil 53.60 Euro 1.310 gold 433.8 silver 7.30


NY gold closes at 1-month high on spec buying
http://www.reuters.com/newsArticle.jhtml;jsessionid=YNXWCKIF0WDCCCRBAEKSF EY?type=topNews&storyID=8241738


Seven Reasons Why the Bears Might Be Right
By Jim Jubak
MSN Money Markets Editor
http://www.thestreet.com/_tsccom/funds/jubak/10218475.html
__________________________________

China feels a labor pinch

By Thomas Fuller
International Herald Tribune
Wednesday, April 20, 2005

Costs are rising and prices may be next

GUANGZHOU, China To much of the world, China's reputation for manufacturing can be summed up in one word: cheap.
.
But on the factory floors here and in the new, neon-lit offices, managers say times are changing - and costs are rising. Skilled workers and technicians are taking advantage of acute shortages to demand double-digit salary increases. Employers are saddled with Asia's highest levels of social charges and forced to offer a host of perks to retain people.
.
The rising labor costs are threatening the model of development - the export zones clustered along the coast - that has brought China the prosperity of the past decade.
.
Chinese wages are still low by European or American standards, but a worker in a sneaker factory in southern China today is paid about 30 percent more than his counterpart in Vietnam and 15 percent more than a worker in Indonesia. (See Workplace column, Page 13) Some big companies are moving production to Vietnam and still others are considering moving inland in China, where labor is cheaper but logistics much more difficult and thus more costly.
.
For consumers around the world, rising costs in China could signal an end to the years of deflationary cycles of cheaper and cheaper products.
.
Here in southeastern China, the persistent shortages of migrant workers prompted local officials in February to raise the minimum wage by as much as 34 percent, the largest increase in a decade, to between $70 and $82 a month. This brings southern China to the minimum wage levels of Thailand and puts it well above the $30 to $50 levels of Bangladesh, $45 in Vietnam and Cambodia, and $35 in rural parts of Indonesia.
.
"Five years ago we would have never thought this was possible," David Lai, the financial controller for Kingmaker Footwear Holdings, said of the sharp increase in Chinese wages.
.
Kingmaker makes Timberland and Caterpillar shoes and plans to hire about 2,000 workers in Vietnam to make up for a shortage of the same number of people in its factories in China. But not everyone can shift production to Vietnam, so Lai predicts that a key consequence of higher Chinese wages will be higher prices. "China is the biggest manufacturer in the world," he said. "If the overall labor cost goes up, the world has no choice - they have to accept it."
.
Economists say there are no signs yet that Chinese products overall are getting more expensive. Chinese exports continue to rise and the economy is surging forward. But the years of massive investment flows into the country are severely straining the country's labor force.
.
The days when you could open a factory near Hong Kong and easily fill it with dirt-cheap workers are over, human resource managers said, especially with a labor shortage of two million people in southeast China.
.
How can a country with 1.3 billion people have a labor shortage? Population experts say factories are seeking a very specific type of worker: young, very mobile, willing to work very long hours and be far away from their families. There are plenty of underemployed people in the Chinese countryside, but most of them do not fit this prof

[Mick100]

Great article on the chinese labour market Gerry

cheers

Mick

[stolwyk]

"Consumer prices are rising faster than wages for blue-collar and non-managerial workers, who account for 80 percent of the work force, the department said.

After adjusting for inflation, average weekly wages for those workers fell 0.3 percent last month, and were down 0.5 percent in the 12 months that ended in March, the Labor Department said in another report. That marked the sixth consecutive month in which wages had declined on an annual basis".

Comment: Outsourcing decreases the power of Unions. But members are also consumers and sooner or later, consumption will fall in these inflationary conditions
____________________________________

Consumer prices surge in March
http://www.duluthsuperior.com/mld/duluthsuperior/business/11449783.htm


U.S. April Philadelphia Fed Manufacturing Index Rises (Update3
http://quote.bloomberg.com/apps/news?pid=10000006&sid=afjgSh6bppFM&refer=home

Arising from some good company reports and the increase in the Philadelphia Index, the Dow jumped 2.1% and the 10 year bond yields rose. The USD rose to 432.2, Euro 1.3045 Gold 432.2 (-2.0) silver 7.2 and oil up to 54.3

++++++++++++++++++++++++++++++++++

From China Daily:
http://www.chinadaily.com.cn/english/doc/2005-04/21/content_436343.htm

TEXT
Iron ore imports face license, price ceiling
(Shenzhen Daily/Agencies)
Updated: 2005-04-21 15:40

China, the world's top steel producer, was considering capping iron ore import prices in a new attempt to limit surging imports of the raw material and its run-away spot prices, shipping sources said Wednesday.

The sources also said the Chinese government would apply an iron ore import license system to cargoes arriving in China after May 1, instead of applying the system on sales contracts signed after the date.

"They are definitely going to come back with the license and the price ceilings," said Harry Banga, vice chairman of Asia's biggest commodities group Noble Group Ltd.

"How to put the price ceiling into reality is becoming a bit of a difficult task... (But) China can do it."

Noble is one of the biggest exporters of Indian iron ore into China, which saw a 40.5 percent increase last year in iron ore imports to 208 million tons.

An official from one of China's top shipping companies said some Indian iron ore cargoes sailing to China might face problems because of the import licensing system.

The world's top miners, including BHP Billiton Ltd, Companhia Vale do Rio Doce and Rio Tinto Ltd, won a 71.5 percent price hike for 2005 contracts, effective from April 1.

The huge price increase came against the backdrop of surging demand for the raw materials to feed steel mills worldwide, but particularly in China.

Over the past several months, the Chinese government made clear that it was unhappy with the price increase and blamed a surge in spot prices for Indian iron ore in the past one year".

___

Comment: Let us hope there won't be any flow-on effects.

[stolwyk]

Currency and metals markets are somewhat jittery as there is more talk about a possible revaluation of the Chinese currency, the renminbi:
USD 83.45 (-0.26) Euro 1.306 Gold 434.2 Silver 7.27 Oil is strong at 55.40

Stagflation is coming closer
______________________

PAUL VAN EEDEN:Inflation versus deflation
http://www.kitco.com/weekly/paulvaneeden/apr222005.html


Yen and Chinese forwards leap on US pressure
By Steve Johnson in London
http://news.ft.com/cms/s/52d7f620-b31c-11d9-ad2b-00000e2511c8.html


Oil Above $55 on U.S. Refinery Problems
http://biz.yahoo.com/rb/050422/markets_oil.html?.v=2
__________________________________________________ __

China Looms as the World's Next Leading Auto Exporter
http://www.nytimes.com/2005/04/22/business/worldbusiness/22export.html?oref=login

By KEITH BRADSHER, New York Times

Published: April 22, 2005


HANGHAI, April 21 - Industrial heartlands from the Great Lakes region to Germany, look out - here comes the Chinese auto industry.

A senior DaimlerChrysler executive, Ruediger Grube, startled a roomful of journalists and his own aides at the Shanghai Auto Show on Thursday by disclosing that the company intended to export small cars from China to the United States. Daimler is already in talks with one of its Chinese joint-venture partners to build a factory for the exports, he said, and would like to work out the details and make a final decision on the project in the second half of the year.

But any cars from such a venture would be only part of what now seems to be shaping up as a broad assault on global automotive markets by Chinese companies and the Chinese divisions of multinational companies.

China's auto parts exports of everything from Delphi parking-brake components to Johnson Controls seat covers are already increasing to countries around the world. Sizable exports of fully assembled cars by Chinese-owned automakers like Hafei and Chery have already begun to developing nations in South America, Africa and the Middle East.

DaimlerChrysler's negotiations now make it increasingly likely that significant numbers of cars will be shipped from plants in this country to the United States and Europe as soon as 2008.

Robert A. Lutz, the vice chairman of General Motors, said here that he expected at least one of China's homegrown automakers to be successfully exporting around the world in the next five years.

"We're rapidly approaching that point," Mr. Lutz said. "I wouldn't venture to say which one it will be."

Until recently, high costs for auto parts, a scarcity of top-quality steel, a shortage of experienced engineers and a history of uneven quality had prevented China from using its inexpensive labor to gain any significant share of the world automotive market.

But all these problems, including quality, are gradually being fixed, even as Chinese industrial workers, at $2 an hour or less including benefits, remain among the lowest paid in the world.

"In terms of quality, the cars from China and the cars from Korea are the same," said J. M. Noh, the president of Beijing Hyundai and an automotive-quality expert who spent 15 years in Hyundai's quality-control departments in South Korea before coming to the company's joint venture in China.

The prospect of fully built cars from China appearing in showrooms in the United States and Europe risks renewed international confrontations over China's trade and currency policies.

The Chrysler unit of DaimlerChrysler does not now sell a very small sedan of the sort the company proposes to import from China; its smallest offering in the United States is the slightly larger Dodge Neon. But the planning for such a car is likely to stir memories of how Japan and South Korea each started by dominating the American subcompact market and then steadily moved to larger vehicles.

In Detroit, the United Automobile Workers responded to the DaimlerChrysler announcement with a blistering attack on China and on Washington's trade policy.

"The $1.50-to-$1.95-per-hour labor cost in the Chinese

[stolwyk]

How the Fed Is Doing China a Favor
Stephen Roach (New York
http://www.morganstanley.com/GEFdata/digests/latest-digest.html


THE DAY AFTER TOMORROW
what was, what is and what will be
Part 2: Broken Resolutions
by Jim Puplava
Storm Watch Update, Part 1
April 22, 2005
http://www.financialsense.com/stormwatch/2005/0422.html


FINANCIAL SENSE NEWS HOUR
Suggest listening to "3rd hour"

3rd Hour with Jim & John
The Big Picture

Select an Audio Format
Real Player l WinAmp l Windows Media l mp3

This Isn't Your Grandfather's
Gold Bull Market
Twilight in the Desert — Peak Oil is Here
Bubble Troubles

http://www.netcastdaily.com/fsnewshour.htm


THE GREAT WEALTH DECEPTION
by Kurt Richebächer
http://www.financialsense.com/editorials/daily/2005/0422.html

[stolwyk]

Max Faber:
No Joy in Greenspan's Wonderland!
http://www.gold-eagle.com/editorials_05/faber042305.html


Silver and COT changes:
http://www.gold-eagle.com/editorials_05/lofberg042305.html

[stolwyk]

THE JOY OF OUTSOURCING

G. Stolwyk

The Theory of Comparative Advantages is applied on a global scale with the China, India, Vietnam and other Asian countries being the chief beneficiaries.

Those countries receiving much cheaper goods in return do manage to keep the CPI down and the USA as one of the recipients, has benefitted.

Elaborate arrangements in the Capital markets by these producers of cheap goods also tend to keep the US inflation down by supporting lower US interest rates.

So, on the surface the system works well both ways. As further outsourcing occurs, there will be some distinct disadvantages accruing which unless rectified, can be very troublesome to the US and other recipients:

1. Imports and exports. While the US imports finished goods from China, China needs raw materials to produce the goods. In time it could make nearly all the finished goods it needs. The US imports about 40% of their goods from China.

2. Saving: Chinese are big savers: about 40% of their income while US savings are about zero. Much of the Chinese savings is channelled into capital formation leading to manufacturing and exports.

The US only exports goods to the value of 8% of GDP. Much of the US taxation incentives and the advantage of much lower interest rates has gone into speculation instead.

3. Trade deficits: In the year to Nov. 2004, the U.S. had a total merchandise trade deficit of $653.8 billion. The cumulative merchandise goods trade deficit was $4.97 Trillion during the last 19 years (since 1985).
And these deficits are increasing, partly due to OUTSOURCING. Lowering of the USD has not managed to turn this around, let alone, even slightly decreased it.

The combination of high consumption (70% of GDP), virtually nil savings and little Capital formation to produce goods for export is souring the Financial performance of the US. More Outsourcing makes it worse.

4. Velocity of Money Circulation. As the manufacturing sector is slowly being annihilated, the resulting salaries and wages wil be lost. And with it the spending it normally produces. The dollar turns over more when manufacturing takes place at home then compared with large importers of Chinese goods directly selling to the public (Walmart).

5. Flow-on effects from massive Outsourcing.
5.1 Salary and wages: The Unions will lose much of their strenght: while inflation is increasing at the current true rate of about 6%, the wage/salary earner lost 0.6% in the last six months. This wil affect consumption after a timelag.

5.2 Social. Increasing unemployment due to Outsourcing will increase costs incurred by the US Government. Crime may wel increase also and therefore a larger police force may be needed. Overall health deteriorates as costs will induce some unemployed not to seek medical advice.

5.3. Training. Fewer Apprentices are needed and this is a distinct disadvantage for young people looking for work. As Outsourcing becomes more prevalent, R&D will be shifted from the US to the countries producing these cheap goods. This in turn must affect the uptakes of students by the US Technical Institutes and Universities and with it their income and expenditure.

6. The Future.
In the beginning there were call centres established in India and cheap clothing as well as other items produced by China, Indonesia and Vietnam, Formosa. I refer to this as Level 1.

At Level 2, computers, car- and other spare parts, washing machines, refrigerators and the more expensive items will be produced by these countries with cheap labour. That is happening now.

At Level 3, massive exports of cars from "cheap " countries occur (These will drive out any existing US production) Also much expensive heavy mining and agriculture machinery as well as trucks will be exported.

Much R&D would have been transferred to these "cheap" countries. This Level is very hurtful as much US labour and subcontractors will be affected.

At Level 4, Planes for export will be produced by the cheap producers for the US and other countries. They are then ready to t

[stolwyk]

Steady but oil down: USD 83.79 Euro 1.3 gold 434.2 Silver 7.25 oil 54.22 DOW +0.8%


"Unmet expectations have urged major companies to rethink their strategy on outsourcing functions, mostly in the field of IT. A Deloitte Consulting survey served as basis for this report by the Financial Times.

A huge three quarters of the survey respondents encountered problems with their outsourced projects while a quarter have reported to bringing back their operations in-house. The report goes on to quote the Deloitte survey that there was evidence of a “fundamental shift’ among the large companies. Even those that had initially overlooked the costs and benefits of outsourcing are part of this shift.

Ken Landis, senior strategy principal at Deloitte says, “Outsourcing was a tool developed in a recessionary environment and companies are now questioning whether it is the right strategy in a growth economy, especially when half the time the expected cost savings do not materialize.”

He goes on to add that this has prompted the larger companies to be more critical of new outsourcing deals, resulting in renegotiation of existing agreements and bringing back of other jobs in-house".

[stolwyk]

US growth forecasts were set too high I am afraid. Whether that was done on purpose so as to give the market a fuzzy feeling. I don't know.

However, the market senses that not everything is ok and the DOW fell 0.9%. Forecasts are coming down.

The US data wasn't good. The economy is slowing down and the jobs outlook is soft. U.S. April Consumer Confidence Index Falls to 97.7 From 103.

Greenspan is having a problem: To raise interest rates in an inflationary but slowing down economy?

Both Gold and the USD rose, somewhat unusual at this early stage although Gold wil eventually break free IMHO.

USD 83.94 (+0.15) Gold 436.9 (+2.4) Silver off a bit at 7.24, oil persistent at 54.26.

The Euro didn't come along: 1.2988. It seems to me that someone or some were buying gold in a big way regardless of a slightly rising dollar.

The USD is more or less hemmed in and hedge funds may well be moving into gold.
________________

Gold Prices Rise Ahead of U.S. Gross Domestic Product Report
http://www.bloomberg.com/apps/news?pid=10001065&sid=aHBbIvEwfc98&refer=movers_by_index


U.S. April Consumer Confidence Index Falls to 97.7 From 103
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a_3fL13_LDXg&refer=home

Clive Maund--Market update
http://www.clivemaund.com/article.php?art_id=68

[stolwyk]

Reports from Europe are not that good and that has stalled the Euro at 1.2918.
US Oil reserves are very high and Oil fell to 51.34

Both factors caused the USD to rise somewhat by 0.16 to 84.10. Gold fell to 432.6 and silver is 7.12 Due to cheaper oil, the DOW rose by 0.5%

However, Durable Orders fell by 2.8%.

GDP and Jobless claims will be due tonight.

__________________________________

U.S. March Durables Orders Fall 2.8%; Ex-Transport. Fall 1%
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aNrJCZDzUsDU&refer=home

Oil Drops After U.S. Supplies Rise to Highest in Almost 3 Years
http://www.bloomberg.com/apps/news?pid=10000103&refer=us&sid=arl9WELiEczM

Gold Prices Fall Most in Two Weeks as Dollar Gains Against Euro
http://quote.bloomberg.com/apps/news?pid=10000080&sid=aex_pLOpXJFU

[stolwyk]

The French will be voting on the European Constitution and a negative vote will affect Europe. This has stopped the Euro which is stil at 1.29
Reports from Euroland are not good and we are waiting for the latest data re US exports to Europe and see how much these have declined.

The DOW lost 1.3% on receiving the news that the US GDP had dropped from 3.8% to 3.1%, comparing the Oct-Dec quarter with the Jan-March 2005, data. An interest rate rise is expected.

Price pressures increased with the GDP Deflator rising to 3.2% from 2.3% in these quarters.

The GDP was boosted by an increase in inventories. (Please note that the true GDP number will be much less than this).

It will be interesting to read the next GDP number.

Russians have stated that instead of being 10% of the Reserves, the Euro will be 30%.

USD 84.36 Gold drifting to 431.3, Silver 6.94 Oil 51.83
__________________________________

U.S. Economy Grows at a 3.1% Rate; Prices Accelerate (Update1)
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a9kXjnSPzem0&refer=home


Fresh evidence of an economic pause ... but not the start of recession
http://www.signonsandiego.com/news/business/20050427-1332-economy.html


DAVE FOREST: RESOURCES
http://www.kitcocasey.com/displayArticle.php?id=86

[stolwyk]

The unemployment in Germany is 11.2% and in France 10.8%. Consider there could be more.

The Euro has come under pressure and the volatility is somewhat high. It is now 1.287

I am waiting for the data of the USA Exports to Europe. Should that become less then it merely means that avenue for raising USA income is deteriorating. As it is, the overall US export is a pityful 7-8% of GDP (Germany: 35%).

LATEST: USD 84.42 Gold 434 Silver 6.9 Oil 49.7 (-$2) DOW +1.2%


Economy Surprises Experts With Sudden Slowdown
http://www.washingtonpost.com/wp-dyn/content/article/2005/04/28/AR2005042800365.html


Yen Climbs on Report China May Loosen Exchange Rate at Any Time
http://www.bloomberg.com/apps/news?pid=10000087&sid=aNBMUVUSaVcg&refer=top_world_news


Forest: The daily resource:
http://www.kitcocasey.com/displayArticle.php?id=88


Here is a repeat of P. Volcker's speech:

AN ECONOMY ON THIN ICE
http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html

[stolwyk]

Financial Sense Newshour:
http://www.netcastdaily.com/fsnewshour.htm


The problem: low Asian consumption:
http://www.morganstanley.com/GEFdata/digests/latest-digest.html


SILVER UPDATE:
http://www.gold-eagle.com/editorials_05/watson042905.html

Sharp Reduction in Construction of New Homes:
http://www.gold-eagle.com/editorials_05/bangalore042905.html

[stolwyk]

CHINA/US: THE YUAN AND THE DOLLAR

G Stolwyk

Present situation: Japan holds about $US700 mill in US Bonds. As to China, it could have $US200 mill in US Bonds but they may have additional $US reserves. Some think this could be used as a weapon against the USA, ie by flooding the market with dollars and stopping taking US Bonds.

While strategically it is an advantage to have this, in practice, both countries don't want to see a US with a much lower dollar and high inflation as it would immediately affect their exports (40% of US imports come from China).

"Although we won't present all the data, when we aggregate all of the smaller countries (Hong Kong, Malaysia, etc.) who have either definitive or de facto dollar pegs, the number climbs higher to 45% of the total US trade deficit. (Contrary Investor, Febr.1, 2005).

Both China and Japan are good savers, so the advantage in trade is on their side

So, they will do al they can to keep the present relationship reasonably stable. Both convert much of their $US into US Bonds; this keeps the US Bond interest rates down and the massive US deficits financed up to a point. Cheap Chinese exports keep inflation down and demand up in the US as well. (Overall, US inflation is increasing). Doing this lessens the US demands for trade protection.

From the Chinese point of view, they don't want a too high currency, because this would make their goods more expensive overseas and would particularly reduce the demand for goods from the US.

China also competes for exports with other Asian countries and a much higher Yuan or Rinembi would be to its disadvantage. But it will make imports into China cheaper and reduce inflation.

If the Yan were adjusted to realistic levels, then the Chinese may think of holding less devaluing US dollars and the previous cosy relationship with the US could become more strained, particularly if the approach from the US were too forceful.

The Chinese say that their Banking system is not up to scratch and they will be particularly worried about hot money from hedge funds entering the country. Hence there is no rush to revalue.

My opinon is that taking the positives and negatives into account, China will only *very gradually* revalue, the overriding factor being that a strong revaluation could induce the USA into a heavy recession and that is the last thing everyone wants, now there is a US slowing down already. Steady as she goes will be the Chinese motto.



So, what has the US to gain from a strong yuan revaluation? The goods from China will cost more and inflation will rise. If they left the Yan where it is and introduced VAT (GST) instead, that will also make the goods more expensive and also produce inflation but at least, they will have accumulated tax. Perhaps that wouldn't be acceptable from a political view as consumption is about 70% of GDP and the last thing to do is to induce a recession.

Their exports to China are not that great and will become less as outsourcing to China or other Asian countries continue, so there isn't much benefit there.

There are also a massive amount of US assets in China and this also needs to be taken into account: the more of these assets there are, the greater leverage, China has.

Many US Senators hasve been calling for a yuan revaluation for a long time without realizing the disadvantages. It has become a well worn slogan.

I think that a very gradual revaluation of the yuan will occur. That will still enable China to continue buying some US Bonds and so stabilize the dollar somewhat.

China will have to make its trading position much stronger (and reduce competing nations' manufacturing capabilities) before it can pay less attention to the USA.

[stolwyk]

TWO POWERFUL ARTICLES which are complementary:

Seconds anyone: http://www.contraryinvestor.com/mo.htm

The Real Problem Behind The US Trade Deficit?
http://www.gold-eagle.com/gold_digest_05/ci020105.html

And add:
GOLD/HUI Divorce ?
Eric Hommelberg
http://www.gold-eagle.com/editorials_05/hommelberg043005.html

[stolwyk]

Gold fell on expectation of a higher interest rate tonight and is now 429. Silver is 6.84. USD 84.57 and oil is 50.77.



Interest rates on US Treasury bills down this week
www.chinaview.cn 2005-05-03 05:27:59

WASHINGTON, May 2 (Xinhuanet) -- Interest rates on short-term US Treasury bills declined in auctions held on Monday.

The US Treasury Department auctioned 15 billion dollars in three-month bills at a discount rate of 2.870 percent, down from 2.880 percent last week. Another 13 billion dollars were sold in six-month bills at a discount rate of 3.085 percent, down from 3.090 percent last week.

Both rates were the lowest since April 18 when the three-month bill was at 2.805 percent and the six-month bill was at 3.040 percent.

In a separate report, the US Federal Reserve reported on Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 3.33 percent last week from 3.28 percent the previous week. Enditem

_______________________________

Comment: Consider that true Inflation could be 6.5% or higher!



U.S. Economy: April Factory Index Expands More Slowly (Update1
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aNWAr8F6fiyg&refer=home

GLOBAL MARKETS-US stocks, bonds, oil, gold up, dollar flat
http://www.reuters.com/financeMarketReportArticle.jhtml;KGQPVQMPN2CDSCRBA EZSFFA?type=goldMktRpt

STEPHEN ROACH: ORIGINAL SIN:
http://www.morganstanley.com/GEFdata/digests/20050425-mon.html

[stolwyk]

The Fed raised interest rates by 0.25% to 3% and the USD is 84.46 at the moment. Oil 49.41 Gold fell to 427.4 silver 6.87 Euro 1.2876



Fed Raises Target Rate to 3%, Keeps `Measured Pace' (Update1
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aMV22Tx50bV0&refer=home


Forest: Daily Resources
http://www.kitcocasey.com/displayArticle.php?id=93


Stephen Roach:
Global: Asia's Only Hope

http://www.hotcopper.com.au/post_single.asp?fid=2&tid=192375&sym=&MSGNO=106767#106767

[stolwyk]

Gold stocks moved down partly due to increased costs of mining. Hower, the Canadians have been moving upward over the last couple of days. Aussie gold stocks went down yesterday.

I read an article which referred to the FED manipulation going on, whenever they were selling treasuries. Obviously a higher USD and a low gold price helps the sale process of the Bonds.

We had a sale a couple of days ago; now gold is recovering and the USD is getting a knock: 83.95 Euro 1.295 Gold 429.9 (+2.4) Silver 7.02 Oil moving up: 50.55


NY gold bounces to firm close, eyes Friday's data
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=8389856


Stephen Roach: Trapped.
http://www.morganstanley.com/GEFdata/digests/20050502-mon.html


Kenneth J. Gerbino
GOLD MINING STOCKS: WHAT IS HAPPENING NOW
http://www.gold-eagle.com/editorials_05/gerbino050305.html


Mike Hartman: Market wrapup
http://www.financialsense.com/Market/hartman/2005/0427.html

[stolwyk]

Market listless. Oil moving up again 51.33, USD 83.90 and virtually locked in. Euro 1.295 Gold 430.4 Silver 7.05


Gold-backed securities seen on Euronext by end-2005
http://www.miningweekly.co.za/min/news/today/?show=66845

Valuation of Silver Stocks:
http://www.gold-eagle.com/editorials_05/rakhimov050305.html

REMEMBER FREE MARKETS? The PPT:
http://www.hotcopper.com.au/post_single.asp?fid=2&tid=192998&sym=&MSGNO=107066#107066

[stolwyk]

Current data: unexpected increased payroll data (see below) made the USD rise to 84.59 and Gold slipped to 426.1 Silver: 6.93 and gold 50.96 Euro 1.281

NY gold plummets 1 pct early on strong US payrolls
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH11339_2005-05-06_14-26-05_N06369314


Paul van Eeden:
Bearish outlook for commodities
May 6, 2005
http://www.kitco.com/weekly/paulvaneeden/may062005.html


Audio:
Confessions of an Economic Hit Man:
http://www.netcastdaily.com/fsnewshour.htm

[stolwyk]

The US Import/Export problem remains and the necessary restructuring will only result in a sharp deterioration of the standard of living. However, the Leaders won't take unpopular decisions.

Basically, the Far East countries save a lot while the US spends a lot.

The Far East exports a lot while the US exports little. 30% of China's exports go to the US while the US imports 40% from China.

If the economic US situation improves then that will result in more imports being sucked in.

Regardless of the positive spin, the trade and budget deficits increase. The situation in Iraq is bad.

Europe is of little help as their economies are not functioning that well. So the US has little hope of exporting more to Europe.

Above all is this massive problem of outsourcing discussed earlier.

This week will see the Current Account Deficit data.

As to the increase of 274,000 on the payroll yesterday, apparently 17,000 jobs were real and the other 257,000 were statistically created by the birth / death model:
http://www.bls.gov/web/cesbd.htm


The extent of misuse of data is shown here:
John Williams'
Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
http://www.gillespieresearch.com/cgi-bin/bgn


Greenspan Warns on Fannie, Freddie Again
http://news.yahoo.com/s/ap/20050505/ap_on_bi_ge/greenspan;_ylt=AqWaX_o1w9ole7llKyI.QvyyBhIF;_ylu=X 3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Third hour with Jim and John:
http://www.netcastdaily.com/fsnewshour.htm

[Mick100]

Are you still holding your gold stocks Gerry?

It's going to be a big week this week
See if those long term trendlines in gold and silver hold up - any thoughts
.

[stolwyk]

Mick,

I have other assets and use those gold stocks as INSURANCE.

Sold one some time ago but my gold stock investments are mainly Canadian.

Difficult to say what happens but it will be a busy USA week, starting with the US Trade Deficit on Wednesday (USA time).

Cheers,

Gerry

++++++++++++++++++++++++++++++++++++++++++

THE ARMAGEDDON INDEX

UPDATE 5/5/2005

G. Stolwyk

One of my previous posts dealt with US and world events which could lead to Gold breaking loose from currencies.

I have rated these negative events from (1) to (10); A rating below (5) indicates that the problem is not that significant at the moment.

As the rating approaches (10), then it becomes worse; eg. a stockmarket with a rating 8.5 signifies that it is either close to a crash (10) or heavy falls can be expected.

An update is a number without brackets. This series started on 13 April 2005. One update was on 20 April. This is the second one.

THE ABERRATIONS:
High, continuing and increasing deficits leading to interest rate rises: 8 (7.5)

Rising oil prices which bring in more inflation: 7.5 (7)

Stockmarkets set for a downturn (Thanks Bruce R): 8 (7.5), (7)

Trade wars: China is increasing its exports in a big way and that clashes with that of other countries. Apart from raw resources, China doesn't really need to import that much given time, once the R&D is transferred to them-it gradually is-. 8 (7.5) (6.5)

Resource wars: 7 (6.5)

Currency wars: (8)

Effects of underrated OUTSOURCING is starting to show in the more prominent countries. 8 (7.5)

High US consumption: (9)

A refusal by the US to increase exports of goods (a mere 8% of GDP). (8)

European unemployment. 8 (7.45)

Gold: Gold production to decline over next 3 years (Thanks Tasg): 8 (7.5)


There are 11 items and the mean (average) is "the Armageddon Index": 7.95 (7.72) (7.45)

The combined effects of these items can severely undermine the dollar and the Euro. Stagflation is close: 9 (8.5) (8)

It is clear that we must be well on the way in meeting those conditions. Not all are needed to make the gold price rise but a simultaneously coming together of a number of negative outcomes is a powerful driver to bring about a significant rise in the price of precious metals, IMHO.

These ratings will be updated from time to time.

That is my opinion.

Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

Little movement. Of interest will be the US trade deficit and Budget data coming up overnight.

USD 84.6 Gold 426.1 Silver 7.05 Oil moving up: 52.43:

http://www.bloomberg.com/apps/news?pid=10000086&sid=aLk6hgXTSLo8&refer=latin_america

_________________________

Chinese Data: "In the first quarter of this year, China's top 100 retail stores reported sales volume of 47.77 billion yuan, up 20.9 percent from a year earlier, according to latest statistics from the China General Chamber of Commerce.

The chamber said that sales of timber and timber products, chemical materials and chemical products, and electronic publications have witnessed the fastest growth, up 258 percent, 146 percent and 83 percent respectively over the same period last year.

In the period, the 100 largest stores sold 11.6 billion yuan of garments, accounting for 26.8 percent of the total retail sales. The sales of garments grew by 28.8 percent on a year-on-year base.

The sales of food products also enjoyed a rapid growth of 29.4 percent, said the chamber, adding the sales of electronic home appliances, like high-tech and digital products, and mobile phones, grew by 12.2 percent."

http://english.people.com.cn/200505/09/eng20050509_184112.html

++++++++++++++++++++++++++++++++++++

Total number of cities in china......................666

11 cities..........................................ov er 2 million
23 cities...............................between 1 & 2 million
44 cities.......................between 500,000 & 1 miliion
159 cities.....................between 200,000 & 500,000
393 cities...................................... under 200,000

total urban population..... is just over 515,000 million people

there are 5 provinces with over 50 million per province and one province alone has nearly 100 million people.

++++++++++++++++++++++++++++++++

Debt and the Delusionals
by John Mackenzie
May 9, 2005
http://www.financialsense.com/fsu/editorials/mackenzie/2005/0509.html

[stolwyk]

There was a panic on the US market and the DOW fell 1%. This was due to a rumour that a Hedge Fund was in trouble.

Tonight, we see the US Trade Deficit and Budget data.

USD 84.4 Oil 51.83 Gold 427.0 Silver 7.08

____________________________

GERBINO:

Gold Market Update 5/10/05
http://www.kitcocasey.com/displayArticle.php?id=104


Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=103

THE GREAT INFLATION
Part 1 The Nature of Money
by James J. Puplava
http://www.financialsense.com/series4/part1.html

WEEKLY COMMENTARY
May 10, 2005
$5 Silver. Returns By Theodore Butler:
http://www.investmentrarities.com/weeklycommentary.html

___________________________________

DJ LME Review: Nickel Spreads Flare, Price At 7-Month High
10-05-05

LONDON (Dow Jones)--London Metal Exchange nickel was in the limelight
Tuesday, with backwardation rising to 16-year-highs and prices at seven-month
highs of $16,800 a metric tons due to tightness on the futures market.

Three-month prices rose as much as 3.7% on the previous late kerb, with the
close at $16,755/ton setting the scene for gains on fund and speculative buying
Wednesday, Robin Bhar at Standard Bank said. The cash-to-three-month
backwardation rose to as much as $1,050.

Nickel started out strongly on a bout of fund selling, taking prices above
its well-worn range of $15,000-$16,400/ton to a pre-market high of $16,750/ton.

[stolwyk]

U.S. Trade Deficit Unexpectedly Narrowed in March to $55 Bln
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a7GhUviCYuC8&refer=home

Latest: USD: 84.95 gold 427.2 Silver 7.05 oil 50.27 DOW +0.2%

Treasury Budget:
http://mam.econoday.com/reports/US/EN/New_York/treasury_budget/year/2005/yearly/05/index.html

Highlights:
The Treasury's surplus in April, which is a tax-receipt month, was right on expectations, at $57.7 billion. The surplus is far above the prior April when it totaled only $17.6 billion.

The nation's budget deficit so far in fiscal year 2005 is running 16.5% below that of the prior fiscal year, at $236.9 billion vs. $283.8 billion.
____________________________

Gold Unchanged, Erasing Loss, Amid Speculation of Yuan Shift
http://www.bloomberg.com/apps/news?pid=10000080&sid=ae5M7GbInFDk&refer=asia


China banker: ready for yuan reform
But U.S. pressure makes it harder for central bank - report
http://news.ft.com/cms/s/f269a8f4-c173-11d9-943f-00000e2511c8.html



US real wages fall at fastest rate in 14 years
http://news.ft.com/cms/s/f269a8f4-c173-11d9-943f-00000e2511c8.html


Retirement Doomsday
http://www.forbes.com/home/retirement/2005/05/04/cx_da_0504topnews.htm

[stolwyk]

U.S. April Retail Sales Rise 1.4%, More Than Forecast (Update1)

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a_yJ8.itwtDY&refer=home

However, it includes Boeing planes ordered by India but not yet delivered.

As a consequence the USD rose to 85.52 (+0.57), Euro 1.268, Oil fell to 84.64 (high reserves) and gold fell to 421.6 Silver 6.9 DOW -1.1%



Earnings Blowup at Wal-Mart
http://www.thestreet.com/_tscbrk/stocks/retail/10223094.html



China not in a hurry to devalue?
http://news.yahoo.com/s/afp/20050512/bs_afp/chinaeconomyforex_050512062933;_ylt=AtA3wB2Up_oYt0 zLN3byJ86mOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUC Ul

[Farouk]

I also talk to myself when I'm REALLY Bored.

[stolwyk]

What one needs is readers, Farouk.

And this thread has got these.

A good reason to keep it up, although it does take some time.

Gerry

[Lizard]

Yes, thanks Gerry. One of the more important threads to read IMO.

[stolwyk]

Sentiment Index Declines to 85.3

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aDcdLftbDd7o&refer=home

There are questions being asked about the $6 bill improvement in the trade deficit. It turns out that a large order from India re Boeing planes was included in the Trade deficit as paid while in fact, they are stil manufacturing it.

USD 86.10 oil 48.67 gold 419.6 silver 6.91 Euro 419.6 DOW-0.5%


China Producer Prices Rise 5.8%, Fastest in 3 Months (Update4)
http://www.bloomberg.com/apps/news?pid=10000080&sid=aCFwxsnbYq2A&refer=asia


Import prices rise by twice forecast
http://www.reuters.com/newsArticle.jhtml;jsessionid=1SKGCQITOJHIUCRBAE0CF FA?type=businessNews&storyID=8485783


Dough Casey:
Profiting From the Wall of Worry

http://www.kitcocasey.com/displayArticle.php?id=110&ppref=KCR013ED051205


FINANCIAL SENSE NEWSHOUR-J PUPLAVA AND OTHERS
http://www.netcastdaily.com/fsnewshour.htm

Suggest you try the 3rd hour or whatever you fancy

Gerry

[Mick100]

A closer look at the US dollar fundermentals

http://www.gold-eagle.com/editorials_05/passi051505.html

,

[stolwyk]

More queries about the data the FED is supplying:
Mike Hartman:

MEDIA SPINS "RISK AVERSION" TO SELL TREASURIES
http://www.financialsense.com/Market/hartman/2005/0511.html

Extract:
News on Energy
Crude prices tumbled $1.52 to $50.55 a barrel today when the Energy Department said crude inventories grew by 2.7 million barrels and gasoline inventories grew by 200,000 barrels.

At the same time the Energy Department announced higher inventories, the International Energy Agency reduced global demand for the fourth quarter on speculation China’s demand will decline.

The IEA reduced its forecast for 2005 demand growth in China, the world’s second largest oil consumer, to 7.4% from the 7.9% increase expected back in March. Talk about expedient, this takes pressure off inflation and the dollar, not to mention it’s easier to sell Treasuries with a falling oil price.

Now let’s flip over to some other sources of information in the oil patch. First of all, the Energy Department claims crude grew by 2.7 million barrels, but the American Petroleum Institute reported crude inventories actually DECLINED by 6.1 million barrels.

Who should we believe with such a large discrepancy in the numbers? Similarly, the government claims a build of 200,000 barrels of gasoline, but the API reported a build of only 84,000 barrels. The market expected a gasoline build of 800,000 barrels, so both inventory reports came in well below estimates, but the price of gasoline declined by more than 2% today to close at $1.479 a gallon.

In my opinion, oil came down today because the dollar strengthened, not because of the bearish numbers from the Energy Department. Lower oil makes the dollar look better, and the dollar needs all the help it can get…even if it is pure propaganda"

+++++++++++++++++++++++++++++++++++++++++++

Antidote for "Shrinking Pension Syndrome"

Kevin DeMeritt

http://www.gold-eagle.com/editorials_05/demeritt051305.html

Extract:
"The reality is, the PBGC can't keep up with this default epidemic.

Although the government agency "guarantees" only about 40% of a "rescued" plan's benefits as it is (much to the horror of plan participants who were, of course, counting on the whole thing), the PBGC has fallen $23 billion in the red itself.

That's just a reflection of how many pensions it's backstopped".

+++++++++++++++++++++++++++
COMMENT:
The wage and salary earner are suffering already as their incomes don't keep up with inflation. And now this!

[stolwyk]

Am having problems with receiving data.
USD 86.16 OIL up: 50.17 Euro 1.263 Gold 420.0 Silver 6.94 DOW +1.1%


China hits out at new US textile quota
http://news.ft.com/cms/s/0e42dbf8-c576-11d9-87fd-00000e2511c8.html


Kirby: EXIT STAGE RIGHT
http://www.financialsense.com/Market/wrapup.htm

Forest: The Daily Resource - 5/16/2005
http://www.kitcocasey.com/displayArticle.php?id=112

From Econoday:
Treasury International Capital
Definition
These Treasury data track the flows of financial instruments into and out of the United States. Instruments tracked include Treasury securities, agency securities, corporate bonds, and corporate equities. Why Investors Care

Highlights
"Foreign purchases of U.S. securities fell back sharply in March, to $45.7 billion vs. an unusually high $84.1 billion in February. The latest level is the lowest since October 2003.

Foreign purchases of Treasury bonds and notes fell to $27.9 billion from $42.5 billion in February. Holdings at the Treasury's biggest foreign customers, Japan and China, both edged lower.

Foreign purchases of agency bonds also fell as did purchases of corporate bonds.

But foreign purchases of equities continued to climb, up $1.7 billion and rising for a fifth month. Foreign participation in our stock market isn't robust but at least it's not on the decline.

The nation's high trade and fiscal deficits are swelling foreign holdings of U.S. assets. Foreign eagerness to continue to accumulate these flows has broad implications for the value of the dollar and the level of U.S. interest rates.

Both the bond market and the dollar slipped back in immediate reaction to today's data -- which after all are just one month's results. Though soft, prior TIC data have been very strong. Also note the data are not seasonally or calendar adjusted and can be clouded by purchasing through third parties".

[stolwyk]

U.S. April Producer Prices Rise More Than Forecast (Update1
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aSqZGrZQTEcM&refer=home

USD 86.2 0il 48.95 Euro 1.26 Gold 418.6 Silver 1.26 Dow +0.8%


Treasury turns up heat on China for forex change
Wants action in 6 months or be named manipulator
http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwsnap&guid=%7B4891DBEB-10D0-4DFE-826E-6D806320AEE6%7D

Chapman's weekly
GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
http://news.goldseek.com/InternationalForecaster/1116358168.php


The Daily Resource - 5/17/2005
http://www.kitcocasey.com/displayArticle.php?id=114


The Bottom Of The Barrel. By Theodore Butler
http://www.investmentrarities.com/weeklycommentary.html


Marc Faber: Greenspan's Catch 22
http://www.gold-eagle.com/editorials_05/faber051605.html

[K9]

[:0]YAWN[:0]


The US will be a 3rd rate country even behind Brazil after Bushes term.

Now thats much more interesting:D


DOW up 200 points in 2 sessions[:p]

Poor OLD USA.
Poor OLD GOLD[xx(]

[Mick100]

Hi k9/c9

Could you email me please

Have a question unrelated to this topic

,

[stolwyk]

U.S. Consumer Prices Rose 0.5% in April; Core Rate Unchanged
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aQVy4cjEVUpw&refer=home

USD 85.88 Oil 48.88 Euro 1.267 Gold 421.2 Silver 7.17 DOW +1.3%


P. Schiff:
PRO-FORMA CPI OR LET'S PRETEND THERE'S NO INFLATION
http://www.financialsense.com/fsu/editorials/schiff/2005/0518.html

NB: Other writers have indicated that the true inflation is higher.


PIRATES REPRISE by Rob Kirby
May 18, 2005
http://www.financialsense.com/fsu/editorials/kirby/2005/0518.html


How Japan financed global reflation
http://www.sitedynamo.com/cwsv3/trial530369/MiscFiles/Mauldin.pdf

[stolwyk]

General Business Conditions Index is deteriorating
http://mam.econoday.com/reports/US/EN/New_York/philadelphia_fed_survey/year/2005/yearly/05/index.html

Dow +0.3% Oil 48.9 USD 86.1 Euro 1.263 Gold 420.2 Silver 7.1



China rules out new curbs on textile exports
http://www.chinadaily.com.cn/english/doc/2005-05/20/content_444129.htm



China Daily: Renminbi and dollar
Yapchongyee Updated: 2005-05-18 10:43
http://www.chinadaily.com.cn/english/doc/2005-05/18/content_443533.htm


J. Willie: QUOTED PEARLS ON ENERGY
http://www.financialsense.com/fsu/editorials/willie/2005/0518.html


Forest: The Daily Resource - 5/19/2005
http://www.kitcocasey.com/displayArticle.php?id=117

"The dynamics of the global copper market also appeared ready to shift yesterday with the Chilean Senate announcing that the world’s largest copper-producing nation is close to approving a new tax on mining companies. The Senate passed a bill that would tack on a 5% charge to miners’ operating income, subject to certain conditions. The bill will now be reviewed by the Chilean parliament’s lower house".


"In other energy news, there was word yesterday that a Bolivian plan to cash in on high petro-prices may backfire on the nation. Bolivia’s Congress yesterday approved a bill adding an additional 32% tax to oil and gas projects in the country, on top of an existing 18% royalty. The president of the Bolivian Hydrocarbon Chamber criticized the move, saying that it could cause the cancellation of $10 billion worth of planned energy projects".

[stolwyk]

From my previous post from yesterday:
China rules out new curbs on textile exports
http://www.chinadaily.com.cn/english/doc/2005-05/20/content_444129.htm

That is interesting as they now have put tariffs into place:
http://news.ft.com/cms/s/a9bd2c08-c8f7-11d9-b9f4-00000e2511c8.html

USD still rising to 86.67 (+0.57) EURO 1.256 Gold falling to 417.30 silver 6.92 DOW -0.2%


TIPPING POINTS:
leading to a fall by Jim Puplava
Storm Watch Update
http://www.financialsense.com/stormwatch/2005/0520.html


TICK, TOCK, TICK, TOCK!
by Mike Hoy
http://www.financialsense.com/fsu/editorials/2005/0519b.html


The Daily Resource - 5/20/2005
http://www.kitcocasey.com/displayArticle.php?id=119

[dingdong]

O Stolwykos when you take out those links to gold peddling sites there's not much left of substance in your 'How To Survive Armageddon by Hoarding Gold' tip sheets.

Despite all the market uncertainties over the past two months gold has STILL gone NOWHERE in REAL MONEY.

Furthermore, over the past two months GOLD stocks across the world have underperformed the general market. Most noticeably they are also underperforming against resource stocks.

ABDAB what do you expect from STOLWYKOS miracles.

[Mick100]

quote:Originally posted by Abdab

O Stolwykos when you take out those links to gold peddling sites there's not much left of substance in your 'How To Survive Armageddon by Hoarding Gold' tip sheets.

Despite all the market uncertainties over the past two months gold has STILL gone NOWHERE in REAL MONEY.

Furthermore, over the past two months GOLD stocks across the world have underperformed the general market. Most noticeably they are also underperforming against resource stocks.


You'll be eating your words before this year's out Abdab
The current buying opportunity will soon pass

,

[stolwyk]

PUPLAVA: Financial Sense

http://www.netcastdaily.com/fsnewshour.htm

I like the 3rd hour audio

____________________________________


20 May

US AND CHINA: Conundrums galore

G Stolwyk

CONUNDRUM 1-CURRENCY WARS

My post: CHINA/US: THE YUAN AND THE DOLLAR of 1 May, page 30, is the introduction and this post is an update.

China has some Banks with a combined shortfall of some $US200 Bill, about the same sum as represented by their USA Bond investments.

Clearly, Governance is poor and there is bound to be some corruption. They say it will take time before they can fully trade in most currencies. Fortunately, foreign Banks can help them out.

There have been some hot exchanges between the USA and China about revaluation. The USA is now talking about the manipulation of the dollar by some countries.



CONUNDRUM 2-TRADE WARS
Both the USA and Europe are complaining, however China keeps pointing out that world trading rules prevail.

From Roach:
"China's exports as a percentage of GDP rose from 20% in 1999 to 35% in 2005. USA 's exports of goods are about 8% of GDP.

China's Household consumption fell to 42% in 2004 while that of the US rose to 71%.

USA's imports are 61% higher than exports. The US imports 40% from China".

My information is that 65% of that comes from US firms in China and this is increasing.

Regardless of any revaluation by China, both Europe and the USA can't compete. Trade protection will be a certainty and trading rules could be sorely tested. China's habit of ignoring intellectual Property rights has also been mentioned.

The conundrum is how to reconcile any punitive US and European legislation with them having these companies in China churning out these goods.

China in turn could take some reprisals as well making life for the foreign factory owners more difficult or disposing of more US dollars- Both Japan and China have stopped buying more US Bonds at Auctions already.

US factory owners in China could make a lot of noise in the US Senate to support China's view.

Outsourcing can mean profits for some but it tends to destroy the industrial bases in Europe and the USA and creates social and economic havoc if carried on to the extreme. Import duties or tarifs are unavoidable, I think.



CONUNDRUM 3: RESOURCE WARS
Is out of the limelight at present.

SUMMARY: The Chinese leaders also have an important conundrum: How to keep on satisfying the population by improving living standards; if they can't, then unrest may break out. Hence, they are playing a dangerous convoluted chess game.

The question is: what will be the End Result?

[dingdong]

quote:Originally posted by Mick100

You'll be eating your words before this year's out Abdab
The current buying opportunity will soon pass


No, I don't think Armageddon will occur this year O Tinsel of the Solar System.

[stolwyk]

Canadian Market Round Up, Week of 5/20/05
http://www.kitcocasey.com/displayArticle.php?id=120



Frank Barbera:
"Da Bottom" for Gold Stocks?
http://www.financialsense.com/editorials/barbera/2005/0519.html


NB: Others say that the bottom is around the $410 mark. The interested reader needs to do his/her own research.




Greenspan: Yuan revaluation won't help
http://www.chinadaily.com.cn/english/home/index.html




China and revaluation:
http://www.economist.com/agenda/displayStory.cfm?story_id=3982328

[stolwyk]

FABER on Bloomberg (Thanks Ronstieb)

"Mark Faber(Dr Doom) was on Bloomberg this morning.He has been long USD since Dec 2004 but admits he is a reluctant long holder of USD.
Other Faber comments:
Gold could drop to as low as USD380 but bullish for the long term.
Concerned about real estate bubble in US.
When USD takes a dive, bullish on Asian currencies but not the Eurodollar".



Steel price sagging on macro control
http://www.chinadaily.com.cn/english/doc/2005-05/22/content_444626.htm

Extract:
China's steel output has ranked first in the world for the past nine consecutive years, accounting for 14 percent of the world's total. In 2003, the steel output reached 220 million tons, and is projected to climb to 350 million tons this year, according to the China Iron and Steel Association.

Meanwhile, China's steel demand has risen 20 percent a year on average since 2000. Experts predict that China will maintain high growth this year. The country's demand for steel will exceed 340 million tons".



Taylor On US Markets & Gold
http://www.gold-eagle.com/gold_digest_05/taylor052105.html


Frank Barbera:
"Da Bottom" for Gold Stocks?
http://www.financialsense.com/editorials/barbera/2005/0519.html


Stephen Roach (from Beijing)
Global: The Echoes of Beijing
http://www.morganstanley.com/GEFdata/digests/latest-digest.html

[stolwyk]

Gold Prices Decline in New York Before 1st-Qtr U.S. GDP
http://www.bloomberg.com/apps/news?pid=10001065&sid=aUvtz9H4RBss&refer=movers_by_index

USD 86.42 oil 49.38 gold 417.4 silver 6.95 DOW +0.5%



Marc Faber Says Asian Currencies, Crops Among World's Best Buys
http://www.bloomberg.com/apps/news?pid=10000080&sid=aMxQLhqdJ5kY&refer=asia


Quadriga, Bailey Coates Hedge Fund Drops Exceed 20%
http://quote.bloomberg.com/apps/news?pid=10000103&sid=apv2M2NKqxHE&refer=news_index


m. hartman: battleground: paper versus things
http://www.financialsense.com/Market/hartman/2005/0518.html

[stolwyk]

Euro 1.256 gold 417.5 silver 6.98 usd 86.5 oil 49.8

US pushing China:
http://www.reuters.com/financeMarketReportArticle.jhtml;jsessionid=VNN2ON QNNJ50YCRBAEKSFEY?type=usDollarRpt


EXTRACT:
The market was hardly affected by a Financial Times report that U.S. Treasury officials had told China that it must revalue the yuan by 10 percent.

"The dollar may have moved slightly on the report, but it's not having a big impact," said a trader at a European bank.

"The 10 percent issue is just an ideal level set out by the U.S. An actual 10 percent revaluation would be a big deal, but for now it's just a way to turn up the pressure on China."

The FT report said the U.S. Treasury had enlisted unofficial envoys including former Secretary of State Henry Kissinger to urge Beijing to revalue by at least 10 percent to avoid U.S. protectionist trade legislation"
____________________________

Gold and Gold shares
Eric Hommelberg: Gold/HUI Divorce ? - Part II
http://www.gold-eagle.com/editorials_05/hommelberg052205.html

Very interesting as text proceeds.

_____________________

Less gold from SA?
http://www.businessreport.co.za/index.php?fSectionId=566&fArticleId=2531276

TEXT
NUM seeks a 20% rise in wages for miners
May 24, 2005

Johannesburg - The National Union of Mineworkers (NUM), South Africa's biggest mining union, demanded a 20 percent wage increase for miners working at the country's major gold producers, a senior official of the Chamber of Mines said yesterday.

AngloGold Ashanti, Gold Fields and Harmony Gold Mining are the three main gold companies in South Africa.

Frans Barker, the labour spokesperson at the Chamber of Mines, said yesterday:

"At negotiations two years ago, we received a similar demand for a 20 percent hike. We now need time to get a mandate to look at the demands and their implications. The total cost to the companies is crucial, things are looking tough."

The mining companies negotiate jointly through the Chamber of Mines, the industry group. NUM officials were not available for comment.

Sweeping wage and benefit negotiations, held every two years, gather steam during May and June before the new contract period begins in July.

Fund managers say they are shying away from the gold sector amid concern that wage negotiations could result in a bitter and costly industrywide strike.

In 2003, the country's three biggest gold producers accepted a 10 percent wage hike for the first year of a two-year pact, hours before workers were due to strike.

Workers got a 7 percent rise for the second year, nearly double the inflation rate.

The central bank has in the past cited high wage settlements as a risk to domestic inflation.

[stolwyk]

NY gold ends higher on weak dollar, silver climbs
http://www.reuters.com/newsArticle.jhtml;jsessionid=RSFD1SOWLI2YOCRBAEOCF EY?type=topNews&storyID=8605253

USD down a bit to 86.35 Oil strong 51.10 Euro 1.2595 Gold 419.0 silver 7.16 DOW -0.44% Long US weekend to come.

Mike Swanson:
Three Signs of a Gold Bottom
http://www.kitco.com/ind/swanson/may252005.html


More money than the human mind can comprehend
http://www.kitco.com/ind/Daughty/may252005.html


Why You'll Feel Hedge Funds' Pain:
http://www.thestreet.com/funds/supermodels/10224193.html

[stolwyk]

http://biz.yahoo.com/rb/050526/markets_oil.html?.v=3

Oil holds at $51, U.S. crude stocks ease
TEXT

NEW YORK (Reuters) - Oil prices held firm at $51 a barrel on Thursday, holding Wednesday's 2.6 percent gain on news of a surprise drop in U.S. crude inventories.
Analysts said they expect strong demand this summer driving season to continue to eat away at U.S. crude stockpiles, pulling them down from near 6-year highs
______________________________________

Gold futures are rolling over at the moment and it will take a few days to clear outstanding matters. Hence while this is going on, no rise is really expected. USD 86.79 Gold 418.0 Euro 1.252 oil 51.12 and firm.




http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8616561

UPDATE 2-U.S.'s Snow repeats call for China forex reform
Thu May 26, 2005 10:50 AM ET
(Adds details, background, comments from committee members)
By Glenn Somerville


Are the Stars Finally Aligned for Gold Stocks?
http://www.gold-eagle.com/editorials_05/paulos052505.html


U.S. First-Quarter Gross Domestic Product Rises at 3.5% Rate
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aCXZUKGlcDNs&refer=home

[stolwyk]

NY silver settles at 5-week peak as funds buy:
http://www.reuters.com/financeMarketReportArticle.jhtml;jsessionid=DD2OQQ ZKUH1XQCRBAELCFFA?type=goldMktRpt

USD 86.41 (-0.46) Euro 1.258 Gold 420.0 (+ 2.6) Silver 7.24 (+0.13) oil 51.85

I have been positive on oil prices for a long time now and thought the medium term price ought to be $45. It now appears it could reach 55-60 once the Northern Hermisphere summer season arrives.

++++++++++++++++++++++++++++++++++++++++++

BLAME CHINA IF YOU CAN

G. Stolwyk

It doesn't take much to convince an unsophisticated US voter that China is problem #1.

The US wants to get ahead but its progress is being blocked by China.

China is to blame for the massive US deficits because it doesn't import enough. It is more interested in saving and business investment rather than driving the gas guzzling SUV's.

The US spends 71% of its GDP on consumption. So should China, after all they only spend 42%.

Actually, the US is carrying the world; if everybody was spending big, then it would be a much better world.
Sure, the world's resources will run out much faster in that case, but then again, it wil be the price mechanism which will take care of that.

Fortunately, the US Govt and the FED have great influence as to what will be reported in the main stream media. That is of great help as China won't revalue by 10% and this misdemeaner can be more easily conveyed to the public at large.

Snow, the US Secretary is doing a great job drilling almost daily into the Chinese that they must revalue by 10%.

In other countries such aggressive behaviour is not considered to be diplomatic and thought to be counter productive, but who cares, we are the US and we are blaming the Chinese for this second malicious gesture of refusing to revalue by 10%.

We know of course that they won't, we knew that before but it certainly is an excellent way of convincing the voter that if only China revalued by 10% and imported more, the world would be a better place.

If that doesn't work-it won't- then we can blame the Chinese once again and ask for another 10%. Our economists suggested that China should revalue by 40% to have a marked effect so we certainly will push them harder, later on. The war on currencies has just begun!

We don't think that it is up to the Chinese to think about it. Al they need to do is to follow our advice.

As to them supporting the US with their large investment in bonds, we won't overrate that as we don't want the public to know that it has been a very good support in the past.

As to financing of the Current Account Deficit, should we have problems with that-and there could well be- then Bernanke can print some more hundreds of billions, sell these for say $CAN and tranfer these funds to our Caribbean Banks. These can then return to the Fed's Banking system later to partly finance this deficit, no problem!

As to the flow-on effects on other SE Nations, they have been a bunch of scroungers as well; let them revalue too.

Will all this cost the US? We haven't done the sums properly yet, but still we are good patriots and wil carry the expense.

Both the CPI and GDP will be doctored anyway so, the whole transformation ought to be a nearly painless exercise!

Wait and see the inflation numbers approaching zero!

So China, how about it?

[Mick100]

Good summary Gerry

If china does revalue it will make their imports of resources and PM's and oil a whole lot cheaper for them

IMO, a revaluation (if it happens) may hurt the US much more than it hurts china. The US has already lost a lot of it's manufacturing capacity to china and it's not going to come back in a hurry - more likely to go to even lower cost producers such as Veitnam.

Sure are interesting times

,

[stolwyk]

Financial Sense Audio:
http://www.netcastdaily.com/fsnewshour.htm

(I like the third hour).

_________________________________________________

THE MANIPULATION OF INFLATION DATA BY THE FED:
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=343

_____________________________________

THE MANIPULATION OF US GDP DATA:
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=344

"GOVERNMENT ECONOMIC REPORTS: THINGS YOU'VE
SUSPECTED BUT WERE AFRAID TO ASK!"
A Series Authored by Walter J. "John" Williams

Extract:
"Near the end of the first Bush administration, an outside-the-system manipulation was worked.

A senior member of the Executive Branch approached a senior officer of a large computer company and requested that reporting of computer sales to the BEA be inflated.

This was done specifically to help with the reelection effort. The request was granted, and thanks to the heavy leverage of computer deflation, reported GDP growth enjoyed an artificial spike.

++++++++++++++++++++++++++++++++++++++++++++

THE ADEN SISTERS:
http://www.gold-eagle.com/editorials_05/aden052705.html


A SILVER IFT?
From Reuters:
"Silver is continuing to lead the precious metals complex," said David Meger, an analyst at Alaron Trading in Chicago, who noted steady investment fund interest over the past few days despite mostly static currencies and gold.

A late jump in spot silver prices above $7.25 an ounce and expectations for fresh investor interest from a metal-backed security helped boost futures in late trading.

On Wednesday, silver industry sources said Barclays Global Investors plans to file for registration seeking regulatory approval for a silver ETF within two months, which is seen attracting new small investors and money managers alike.

[dingdong]

quote:Originally posted by stolwyk


++++++++++++++++++++++++++++++++++++++++++

BLAME CHINA IF YOU CAN

G. Stolwyk

Drone drone yawn yawn rhubarb rhubarb rhubarb must buy gold must buy gold etc etc


O Stolwykos we are unworthy of your 'put down China' essay but you've never been to China to see for yourself, have you?

[stolwyk]

LONG US WEEKEND


GOVERNMENT ECONOMIC REPORTS: THINGS YOU'VE
SUSPECTED BUT WERE AFRAID TO ASK!"
A Series Authored by Walter J. "John" Williams

"Federal Deficit Reality"
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=342

Gold futures are rolling over at end of May and not much movement is expected


RUSSELL ON GOLD
http://www.gold-eagle.com/gold_digest_05/russell052805.html


The Value View Gold Report
http://www.gold-eagle.com/editorials_05/schmidt052705.html


FUNDAMENTAL THOUGHTS REGARDING TECHNICAL ANALYSIS [T/A]
http://www.financialsense.com/Market/kirby/2005/0523.html

[stolwyk]

US markets to trade overnight. At the moment there is very thin trading in gold: 417.5 Silver 7.18

The Euro fell to 1.234 USD very strong at 87.35 (French reject Constitution)


FORREST: Resources:
http://www.kitcocasey.com/displayArticle.php?id=130


U.S. Current Account Deficit May Hit $900 Billion in 2006:
http://www.kitcocasey.com/displayArticle.php?id=131


ERIC HOMMELBERG: GOLD AND JUNIORS
http://www.gold-eagle.com/editorials_05/hommelberg052905.html




Forest: The Daily Resources
http://www.kitcocasey.com/displayArticle.php?id=130


EXTRACT:
A gathering of some of the Middle East’s most prominent businessmen recently heard that neither the euro nor the dollar are the way to go in terms of national currency reserves.

A meeting of the Gulf Cooperation Council, attended by high-profile financiers such as Emirates Bank Chairman Ahmed Al-Tayer, was told by currency expert Dr. Ferdinand Lips that the region should instead peg its currencies to gold to escape financial disaster as US and European monies continue to show structural weakness".

_____________________

BUY GOLD AND SILVER. IGNORE THE DOLLAR
by the Optimist
May 30, 2005
http://www.financialsense.com/fsu/editorials/2005/0530b.html

[dingdong]

quote:Originally posted by stolwyk

rant rant mindless drivel mindless drivel must buy gold must buy gold etc etc

A meeting of the Gulf Cooperation Council, attended by high-profile financiers such as Emirates Bank Chairman Ahmed Al-Tayer, was told by currency expert Dr. Ferdinand Lips that the region should instead peg its currencies to gold to escape financial disaster as US and European monies continue to show structural weakness".



O Stolwykos I enjoy your Comedy Hour excerpts. Especially how one of the most rabid gold bugs of them all, Ferdinand Lips, is now titled a "Currency Expert".

Can only happen in a gold peddling website...

[K9]

Stolwyk, congratulations:D

you have broken the world record for talking to yourself...



but then you are lonely and 79 years old right?

so we forgive you for wasting STer bandwidth[:p]

[K9]

....oh just in...sry stolli


didn`t know you were running a newspaper here[:I]

[stolwyk]

CURRENT:

Gold fell to 416.5 but many gold stocks rose. Silver rose strongly to 7.36 (I did mention that there will be a new ITF coming). There may be other reasons for the rise.

Oil up to 52.1, USD up and now 87.8 Euro down to 1.231 DOW -0.7%

______________________________________________

31 May 2005

THE USD, EURO AND GOLD. TRADE AND DEFICITS.

G. Stolwyk

I am just writing a preliminary analysis of the possible outcomes while we are having the fallout of the rejection of the European Constitution.

It is not wise referring to any possible internal wrangling amongst the Europeans, so it is best to paint the economic picture and wait for developments.

1. The Euro currency and trade.
EURO/USD of 1.30 was tolerable but it has now fallen to 1.24, a drop of 4.6%, a handsome number in the export trade.

So, unless something negative happens, it will benefit them. Imports will be more expensive.

It won't cure the unemployment, now running at 12.5 mill for Germany and somewhat less for Italy and France.

It is difficult to predict which way the Euro will move because we don't know the medium and longer term flow-on effects from this negative vote and unemployment levels and a likely further economic deterioration.

Growth rates are already minimal. Interest rates tend to be higher in the US and this could reduce the flow of savings to Europe.

Therefore, this currency is a conundrum to the overseas investor, IMHO.





2. The USD, trade and the Current Account Deficit.
The somewhat higher dollar will tend to make imports a shade cheaper but it isn't good for desperately needed exports which only run at 8% of GDP.

If nothing happens to the Chinese currency for some time, then consumption would decline slightly slower or slightly increase depending on oil prices.

Their Current Account Deficit would increase because of the translation into more expensive USD.
My prediction was for 6.5% of the GDP this year; I won't change that just now.

The wars in Afghanistan and Iraq are proceeding but not according to plan. We don't know if Bush has designs on other countries as well. Neither can we gauge any very negative outcomes from other causes, eg derivatives shocks.

Now is the time for countries to dispose of some USD at the current rates. However the current high USD could attract more savings to finance the Current Account Deficit. They may still need to call on their Caribbean Banks though.

The last time the Current Account Deficit included $US6 Bill from the sale of planes to India. Unfortunately, it was a contract and the planes hadn't even been manufactured. Still, they could try this trick again.





3. GOLD .
I believe that Gold will shake loose from the Euro at first at these low Euro values.

Because of uncertainties in Europe, the Middle East and other countries could look for other strong currencies and *Gold* to diversify and reduce their Euro Holdings.

The USD's value is nothing to be proud of: the masssive deficits are growing all the time; Apart from this, much needed US infrastructure work is not done and energy reserves, distribution and refineries are deteriorating.

So, I don't think that being overweight in USD is desirable either. That ought to reinforce the status of gold, particularly at the current price ($US417).





4. SUMMARY: Europe will push exports and we will see a speed up of the trade wars. European demand for imported goods will decline and the internal situation is likely to deteriorate further: The Euro 's value is difficult to predict.

The US has an Export handicap because of the higher USD. Massive deficits continue to grow and are not likely to be reduced in the present circumstances.

Therefore, the USD has a much inflated artificial value and that may not remain so.

Both the Euro and USD are suspect.

As a consequence, the Middle- and Far East will be adding more Gold to their reserve currencies IMHO.
This course may well be followed by other countries.

I do think that the outlook for Gold and Silver i

[dingdong]

quote:Originally posted by stolwyk

rant rant cluck cluck gibber gibber must buy gold must buy gold etc etc

Both the Euro and USD are suspect.

As a consequence, the Middle- and Far East will be adding more Gold to their reserve currencies IMHO.
This course may well be followed by other countries.



O Stolwykos you've been snorting too much of your gold dust. You've latched onto a comment in a gold peddling site by a renowned gold bug who is imploring the Arabs to buy gold because no-one else will. Never mind, if these countries are silly enough to add gold to their reserve currencies the European banks will be more than willing to sell their stashes to them.

[stolwyk]

Although gold prices declined, gold stock prices declined far more and the small Juniors got a hiding.

However, overnight, while the gold price moved down, the major gold stocks, including the Canadians rose. It will be interesting to see if there is an uptrend in these stocks.
At the moment, Gold is 417.1


FOREST: RESOURCES:
http://www.kitcocasey.com/displayArticle.php?id=132




Stephen Roach (New York) Date 27 May.
http://www.morganstanley.com/GEFdata/digests/20050527-fri.html

TEXT:
Global: Don't Write Off Europe

As a congenital euro-skeptic, I will be the first to admit that it feels rather uncomfortable rising to the defense of Old Europe. But someone has to. The world is down on the Mother Continent as never before. And Europe, itself, is caught up in a bout of self-flagellation that is getting worse by the day. The risk, in my view, is that this is an overdone story of cyclical angst. While the economic outlook for Europe is far from terrific, it’s not nearly as bad as the consensus mindset would lead you to believe. Therein could lie one of those delectable opportunities for return-starved investors.

We know the bad news: Europe could well be tumbling into yet another recession. The euro is trading at a seven-month low against the dollar. The French are about to reject the EU constitution. German reformer Gerhard Schroeder is putting his political career on the line by standing for an early reelection. There is nothing pretty about this picture. But the good news is that the bad news is already in the price. Financial markets move quickly to adapt to changing circumstances, and that’s exactly what has occurred. There could be more of that to come, but it is important to stress that it will take more bad news to keep fueling the “euro-trash” trade. For those who want to take the other side of this bet, all you need to remember is that the bad news only needs to be “less bad.”

Put me in that camp. The bull case for Europe has always been one of painstaking progress on the road to structural reform. Today, the emphasis is on the painful aspect of that transformation -- and on how it has left Euroland overly exposed to cyclical vulnerability. Courtesy of high and rising unemployment, the European consumer is all but absent from the region’s growth equation. The pan-regional headline unemployment rate has risen from a cyclical low of 7.8% in 2001 to 8.9% in early 2005. Moreover, according to OECD estimates, after adjusting for business cycle effects, the “structural” unemployment rate in the Euro area currently stands at about 8.2% -- well above the 6.5% average prevailing in the mid-1980s. Reflecting the resulting lack of job (and income) security, Euroland private consumption growth has slowed to just 1% over the 2002-04 period -- leaving the region with a thin cushion of support for domestic demand. Little wonder the European business cycle is now listing to the downside: The lagged effects of a stronger euro -- up nearly 60% against the dollar from early 2002 through late 2004 -- have done serious damage to the region’s external demand drivers.

Like the downside of most cycles, this, too, will pass. The euro has already fallen about 8% relative to the dollar, and oil prices -- a formidable headwind for domestic demand -- have eased off somewhat as well. In both cases, these developments are “less bad” than they were five months ago. Largely as a result, our European economics team is forecasting a now-typical cyclical rebound for Europe -- a return to 2% growth in 2006 -- driven mainly by a rebound in consumption growth from 1% to 1.7%. This is a muted recovery by US standards and even by European standards of the past. But it is a rebound, nevertheless -- and one that most investors today have all but lost sight of.

The real case for Europe lies beyond the business cycle. It is first, and foremost, a productivity story -- one driven by the potentially powerful combination of IT-enabled capital deepening and improved labor market flexibility. Our research analysts corroborate a

[stolwyk]

Major Gold stocks broke free from the gold price and currencies:

Some time ago Commentators mentioned that the Gold stocks had been bashed much more than the price of Gold and had found a bottom. That event may have taken place last week.

Gold stocks took off strongly and they rose again overnight.

Gold meanwhile fell to 415.0 (-2.2) and silver is 7.46 (+6) The USD is 88.14 (+0.34) while oil is rising strongly against the USD $54.35 Euro down to 1.218. DOW +0.8%

The latter ought to promote exports but will encourage trade wars.

The high USD in the final run is not beneficial to the US. It doesn't repay debt and the debt load is growing strongly. Exports could decrease and imports increase.

The Current Account is predicted at 6.5% of GDP and Commentators expect it to be 6.7% or $US900 Bill in 2006.

$A=0.7479 and the Gold price in $A is 554.9. Reports of less Gold production are coming in. As to Silver, we ought to hear more of the pending Barclays IFT. Much of the rise in Silver is due to that, I think.
__________________________________________________

The Fed Opts for Growth, Ignoring Imbalances and Inflation
http://www.kitcocasey.com/displayArticle.php?id=135

And here is a very interesting site:
BUD CONRAD: The US Trade Deficit is Unsustainable 5/31/05
http://www.kitcocasey.com/displayArticle.php?id=133

[stolwyk]

Gold Gains Most in Three Months as Dollar Drops Against Euro
http://quote.bloomberg.com/apps/news?pid=10000080&sid=azCvaN5MJ5w4


Latest: USD 87.74 Euro 1.227 (a slight rise) Gold 421.6 (+6.5) Silver 7.49 Oil 53.48 DOW 0.0%



Gold demand "incredibly strong" in first quarter, thanks to India: WGC
http://news.yahoo.com/s/afp/20050601/bs_afp/commoditiesgoldsales_050601205643;_ylt=Ath7OR5HbXJ VmTq4JCpDD9OmOrgF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVR PUCUl

TEXT:
LONDON (AFP) - World demand for gold was "incredibly strong" in the first quarter of 2005, notably in the jewellery sector in India, the World Gold Council said.

ADVERTISEMENT

Demand rose 26 percent to 977 tons from the first quarter in 2004, the WGC said in a report published in London.

The jewellery sector saw demand rise 19 percent to 528.20 tonnes from a year ago. In India, the world's biggest gold consumer, demand soared 72 percent on a 12-month basis.

India accounts for about 20 percent of global gold demand, with the precious metal prized for jewellery bought for social occasions, such as weddings and festivals.

Elsewhere, gold demand rose 28 percent in Turkey, 13 percent in China and 3.0 percent in the United States, but fell 6.0 percent in Italy, the WGC said.

"We've seen an incredibly strong quarter for gold demand, both in jewellery and investment," said WGC chief executive James Burton.

"We are particularly encouraged to see that the upward trend in gold jewellery demand over the last two years has been sustained."
_____________________________

WHAT IS WORRYING GREENSPAN?
By Richard Duncan 31 May 2005
Has the Fed lost control of interest rates, asks author of bestselling book, The Dollar Crisis.
http://www.financeasia.com/Accessories/faPrintStory.cfm?objectID=2B304A6F-9027-7E17-4B3371C8DDCF39AA


U.S. First-Qtr Productivity Rises at 2.9% Costs Rise 3.3%.
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aozHMSDrH1kQ&refer=home



World Gold Council--Latest data:
http://www.gold.org/value/stats/statistics/gold_demand/index.html

PLease note that Official sales were 254 tonnesin the first quarter instead of 125 tonnes (500 tonnes allowed per year).

Amending the surplus of 47 tonnes to bring this into account will result in a shortfall of 82 tonnes for the quarter. Mine production is decreasing and I expect a decrease of at least 4% this year compared with the previous year. There is a massive retrenchment program going on in S Africa.

It is hoped that Investment Demand will pick up.
_____________________

CLIVE MAUND-LATEST:
Dollar At End Of Its Rope?
http://www.gold-eagle.com/editorials_05/maund060105.html


Gerry

[stolwyk]

U.S. May Payrolls Rise by 78,000; Jobless Rate Falls to 5.1%
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aoKdWLMZ3UhU&refer=home

GLOBAL MARKETS-US markets end week on mixed note
http://www.reuters.com/financeMarketReportArticle.jhtml;jsessionid=PRS32K QNFWNW4CRBAEKSFFA?type=goldMktRpt&pageNumber=1

LATEST: The Euro rose first but then fell to 1.222 due to continued negative reports from Europe. USD rose to 88.04 Oil is stubborn at 55.03 Gold 422.2 Silver 7.49 DOW: -0.9%



P. van Eeden: volatility ahead.
http://www.paulvaneeden.com/displayArticle.php?articleId=115


Frank Barbera: GOLD BULL MARKET DEFENSE
http://www.financialsense.com/editorials/barbera/2005/0603.html

Peter Schiff: There are no longer any truly conservative
U.S. dollar denominated investments.
http://www.financialsense.com/fsu/editorials/schiff/2005/0603.html

[stolwyk]

FINANCIAL SENSE NEWSHOUR --Audio
http://www.netcastdaily.com/fsnewshour.htm



Global Fear … Don't Flinch
http://www.gold-eagle.com/editorials_05/buss060305.html



Alice In Wonderland:
The CRB Index consists of 17 commodities with equal weightings.
It serves to calculate inflation in part.

The Component weightings have now been changed and it will be recalculated on a monthly basis. That could lead to manipulation.

Tim Wood (Financial Sense) will serve up the results from the previous CRB Index and the new weighted one. This to monitor any abuse.

Sofar, a number of Indices are being manipulated by the FED: GDP, CPI, Inflation generally.




NZ top Investment performer in 2004:
Peter Schiff: There are no longer any truly conservative U.S. dollar denominated investments:
http://www.kitco.com/ind/schiff/jun032005.html

[dingdong]

quote:Originally posted by stolwyk

NZ top Investment performer in 2004:
Peter Schiff:


Judging by the volume of tip sheets you generate I thought NZ's Most Worthy Investment Performer in 2004 was you, O Uranus Lover.

[stolwyk]

Wallenwein: All that EURO-HULLABALOO
http://www.gold-eagle.com/editorials_05/wallenwein060405.html


Gold May Rise for 3rd Week on Demand From Jewelers, Survey Says
http://quote.bloomberg.com/apps/news?pid=10000080&sid=aK_yWoQGggc4#


12 000 more mine workers to loose jobs in Free State
http://www.sabcnews.com/economy/labour/0,2172,105878,00.html

[stolwyk]

-Gold ends at 3-week peak, delinked from euro
http://www.reuters.com/financeMarketReportArticle.jhtml;jsessionid=RW0YT4 W4XXMHECRBAE0CFFA?type=goldMktRpt

USD 87.6 (-0.44) Gold 425.8 (+3.6) Silver 7.48 Oil 54.48

Brian Bloom--Gold Landscape Has Changed.
http://www.gold-eagle.com/editorials_05/bloom060505.html

Brian Bloom: Silver Earthquake.
http://www.gold-eagle.com/editorials_05/bloom060405.html
__________________________________________

GOLD, COSTS AND SELECTION

G. Stolwyk

We have seen that in the correction the large miners fell but the smaller explorers fell the most (up to 60%) and IMHO won't come back on the scene till the recovery has been setting in for some time, led by the Leaders and medium large explorers.

The Australian currency also plays a role and rose to 0.8US but is now 0.765. Gold is now $425.8. Of importance is the steep price rise of commodities, eg steel, mining machinery, cost of rigs, plants and labour.

A rise of least 30% has been mentioned. In certain areas drilling rigs are difficult to obtain and projects are being deferred.

What it does mean is that more grammes per tonne are needed to make the same profit as before this rise in costs. I wouldn't buy into a gold stock if the open pit hadn't at least 3 grammes/tonne gold and the total resource is at least 2 mill ounces.

Obviously, if there is another metal which can defray costs, then requirements can be lowered. If possible, projects need to be large and close to each other.

There are not that many stocks in Australia which answer those demands. However, as the price of Gold rises, then relatively, costs are becoming less in percentage terms and provided the higher price can stay up, less deserving stocks could get a look in.

That is my opinion.

Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[tricha]

Exactly Stolwyk, I agree with what you said here, 3 ozs a ton plus to make a mine worth while.

Gold in OZ dollars over the last 2 years has stayed relative at $550 OZ an Ounce, it was higher before that period!

Thats why I keep saying gold suks and suks and suks![xx(][xx(]

But also, like people like you - have been saying the worm will turn :):)and it will, but when[?][?][?]

Regards the one eyed nickel head - [B)][}:)]

[dingdong]

quote:Originally posted by stolwyk

-Gold ends at 3-week peak, delinked from euro


You wish, O God of the Rampers. If ever gold tries to rally against the Euro and/or the Swiss Franc, watch those central bankers rub their hands with glee and sell into the rally.

[pago]

hi gerry,good comments,the market has changed,from say feb,thru the april down correction,to now,there is far more caution/less optimism given to spec resources shares,imo,there will be some that will still do very well,but the trick is in the picking.cheers pago.

[stolwyk]

Hi Tricha,

I need gold as an Insurance; it is part of other investments including resources. The gold price dropped somewhat to $424.5 due to a discussion about IMF Gold in the US Congress.

EU: 1.228 USD 87.5 Silver 7.40 oil 53.6 DOW: +0.15%

Greenspan: trouble ahead for hedge funds
http://biz.yahoo.com/rb/050606/economy_greenspan.html?.v=2


China Plans to Spur Consumption, Eliminate Trade Gap
http://www.bloomberg.com/apps/news?pid=10000086&sid=ann78ASMBdCs&refer=latin_america


TED BUTLER: SILVER:
http://www.investmentrarities.com/weeklycommentary.html


Global: The New Macro of Globalization--Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20050606-mon.html

[tricha]

Hi Stolwyk

I agree with you there you have to diverse your assets, I'm into property, probably doing something very silly in the sharemarket, my stocks are all related mineral stocks.

Gold - how many thousands of tons are held by goverments - Fort Knox etc and will keep selling slowly.[?][?][?]

The other major problem is how many hundreds of miners are keen to open mines as soon as the price moves up a little [?][?][?]

I'd have thought oil is the king, the next king will be Uranium, unfortunately you can not eat gold.
But you can eat oil and uranium!:):)

I know a guy where I come from that went through the depression when gold was king, he still buys gold and stores it under his bed.
It hasn't done him any good though!

Why not buy into diverfied miners like TTR, MCR, IGO, MRX, BRW the list is huge, who have exposure to gold, but will keep it in the ground for a rainy day, unless like you say 3 OZ'S plus. Then you can have your cake and eat it!

Regards [B)][}:)]

[dingdong]

quote:Originally posted by tricha

unfortunately you can not eat gold.
But you can eat oil and uranium!:):)



Don't forget you can also eat coal, and of course dung.

[stolwyk]

TRICHA,

Yes, I am pretty heavily in Uranium as well. And have oil, nickel and copper stocks.

There are some good pickings from time to time, but one needs to be quick.

As to NZ gold stocks, BDG will be hard to beat IMHO. I am mainly in the bigger junior Canadian Gold stocks.

Cheers,

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

USD 87.75 0il cheaper at 52.48 Euro: 1.224 and stagnant. Gold 423.7 Silver 7.4


Treasuries Gain; Greenspan Doesn't Expect Change in Yields Soon
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a.P2SOV01vGE&refer=home


China Plans to Spur Consumption, Eliminate Trade Gap
http://www.bloomberg.com/apps/news?pid=10000086&sid=ann78ASMBdCs&refer=latin_america


Greenspan: trouble ahead for hedge funds
http://biz.yahoo.com/rb/050606/economy_greenspan.html?.v=2

[45south]

Hi stolwyk
Since when has BDG been a NZ stock. You mean OGD don't you.
Been taking a keen interest in OGD over the last couple of weeks, seems reasonably priced at the mo. Can't see it dropping below current levels. Any coments. Would you buy on the ASX or NZX.

[tricha]

Hi Gerry

That's a great mix Gerry. Canada for gold!:), like you said 3 OUNCES a ton plus. Not many OZ mines can deliver that.

I'm mainly into Nickel, IGO, MCR
BRW as a gamble.

Looking at Uranium, risk is what the State goverments and Federal will allow, unknown risk factor.[?][?][?][?][?]

OZ fast running out of water, so salt water treatment plants are a must! High Energy use.
The OZ goverment already starting to influence the publc, E.G Nuk power or no water, Nuk Power or continued Global Warming.

All the news coming out, starting to favour Nuk Power. Sounds like the USA are going back into.
Let alone all the of others being built in China, India. etc

What are your views on this [?][?] Whats the best Uranium stock to Gamble on.

I allow 10% of my stock selection as a gamble, caculated but still a gamble.

Shares are a minefield, look at poor Anvil, had a few for a while but always weary of the location and it happened.

Cheers Tony

[stolwyk]

Hi 45south,

Your OGD is $A54 cents at the moment and $NZ58 cents. The problem is that not many are sold in NZ while 0.545 mill shares were sold in Aussie.

BDG is Bendigo:
http://www.bendigomining.com.au/Introduction.asp

GOOGLE wil have more about the city Bendigo.

ANNOUNCEMENTS:
http://stocknessmonster.com/news-history?S=BDG&E=ASX&Year=2005

FB Study:
http://www.bendigomining.com.au/InvestorRelations/technical_reports_detail.asp?ReportCode=01

I own mainly Canadian stocks. BDG and these stocks have a thread here.

BTW, I did mention at least 3 g/tonne in an open pit, add about 10 gr/t for underground. Alternatively, if you strike more than 10 gr then your open pit g/tonne sometimes can be somewhat lower. I always talk about Australian conditions which vary.

Gerry
Holds BDG
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

Mr Greenspan speaks:
http://news.goldseek.com/GoldSeeker/1118354400.php

USD 87.9 Euro 1.223 Gold 423.6 Silver 7.25 oil 54.5 DOW +0.25%


CONRAD: Federal Budget Deficit will be Unsustainable 6/8/05 (Part 2)
http://www.kitcocasey.com/displayArticle.php?id=148



ERIC HOMMELBERG:
http://www.gold-eagle.com/editorials_05/hommelberg060805.html
(Big read)


Forest: Daily Resource: 9/6
http://www.kitcocasey.com/displayArticle.php?id=150

[troyvdh]

As I posted on the NZ site Oz GRD 1.83 NZ GRD 1.82............whats up

[comspec]

Tricia,
You are talking 3oz/ton and Gerry is saying 3g/tonne. Please stop confusing me.



And by the way, those smilies.....they SUK,SUK and SUK.

[stolwyk]

April trade gap widens to $57 bln as imports increase
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a6vM7A72dDFo&refer=home


The April trade deficit at $57 Bill. pushed Gold to 427.9 and it finished on 427.3 (+4.10).

The Budget deficit for May was $35.3 Bill., much less than the expected $55 Bill and together with more interest rates increases expected pushed the USD up to 88.61 Oil 53.54 Euro at 1.213


Stocks Finish Mixed on Oil Worries
http://biz.yahoo.com/ap/050610/wall_street.html?.v=25


China to have strategic oil reserve soon
http://biz.yahoo.com/rb/050610/energy_china_reserves.html?.v=1

Greenspan warns over red-hot US property market
http://news.yahoo.com/s/afp/20050610/bs_afp/useconomybankgreenspan_050610064308


PAUL VAN EEDEN:
Greenspan versus the bond market
http://www.kitco.com/weekly/paulvaneeden/jun102005.html


The Daily Resource - 6/10/2005
http://www.kitcocasey.com/displayArticle.php?id=153

[stolwyk]

Financial Sense Newshour:
http://www.netcastdaily.com/fsnewshour.htm


China Trade Wars
David Chapman
http://www.gold-eagle.com/editorials_05/chapmand061005.html



Energy: http://www.silverbearcafe.com/private/forecasting.html


Heavyweight GERBINO:
ROAD MAP ON THE MINING STOCKS
http://www.gold-eagle.com/editorials_05/gerbino060905.html


Greenspan / ron paul at congressional hearing
http://www.financialsense.com/fsu/editorials/2005/0610b.html

[stolwyk]

The Aussie market is closed.

Euroland: The Euro, a Convenient Scapegoat
Eric Chaney (London)
http://www.morganstanley.com/GEFdata/digests/20050608-wed.html



The United States of Europe Is Dead, Long Live EMU!
Stephen Roach (from Amsterdam)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html


Reuters Summit - Lack of good projects puts mining boom at risk
http://www.reuters.co.in/locales/c_newsArticle.jsp?type=businessNews&localeKey=en_IN&storyID=8758352


_______________________________________

DECOUPLING OF GOLD.

G. Stolwyk

As to the Euro, at 1.212, there is little motivation talking about it. Gold decoupled some time ago and the Euro can be forgotten for quite some time, as far as Gold is concerned

As to the USD, the situation is somewhat confused. Greenspan gave an indication that there could be 2 interest rate rises, which did strengthen the USD by 0.67 to 88.61.

In normal conditions Gold would have moved down but instead it rose as well, up 4.10 to 427.3

While it is a bit early to draw conclusions, it does seem that now the Euro is out of favour, some Governments and investors could have a greater interest in Gold.

They may be rebalancing their reserves or investments.

The Middle East may well be the leader in this regard. Reports of diminishing production keep filtering through and may be a support factor.

I like to see a confirmation through higher gold prices, say $440. That is if Gold is allowed to find this level.

Therefore, the next fortnight could give us more developments, be they + or -.

[stolwyk]

I predicted a price for oil in Oct 2004. It was to be $45 +/-$5 medium term. It turned out to be $51. On 30 May, I updated it to $65 +/-$5 in July based on USD=84.

Oil is now 56.82. Both the USD and Gold rose. USD to 88.9 and Gold 428.5 (Hit 430.4) Dow +0.1%.

During the Aussie/NZ day, trading in gold is often been somewhat light and in many cases the price has been dragged down.

Please note that Gold has under performed Oil and Silver for a long time and hence has some leeway to make up. Silver has been standing still at 7.23 (I believe that the previous rise was due to a new silver ETF starting up soon). India may still have some silver to sell as well.

__________________________________________

Dr Roffey: Gold action:
http://www.gold-eagle.com/editorials_05/roffey061205.html

-----
Important US data this week:

There is some important US data due this week, including PPI, CPI, (Rigged) Current Account and TIC.

Also some retail data, jobless claims and Industrial Production as well as Consumer sentiment.

Altogether a very busy week!

-------

Oil Forecasting Legend Paints Dire Energy Picture
David J. DesLauriers
http://www.silverbearcafe.com/private/forecasting.html

[stolwyk]

Overnight the Producer Index came out with a growth of 0.6% for May while sales declined 0.5%. This brought the Gold price down and currently it is 426.8 Silver is 7.24 USD 89.0 and oil is now 55.3.

The Baltic Freight Index is a good indicator of where the world's economy is going:
http://www.maxmart.com.tw/f-e.htm

The shipping freight rates declined 27.6% in the period 16 May-14 June.



Oil Trades Near 7-Week High on Concern About Winter-Fuel Output
http://www.bloomberg.com/apps/news?pid=10000086&sid=aCyflxmYZJkU&refer=latin_america




WORLD COPPER MINE OUTPUT EXPECTED TO SURGE -Sapa
Source: Business Report
Posted: 14/06/2005 Diversified commodity company, ANGLO AMERICAN, said on Monday, June 13, 2005 that global copper mine production would rise by about 1.3m tons in 2005, and thereby closing the gap on slowing demand and leading to a more balanced market in 2005 and 2006. The price of copper is expected to average around $1.30lb in 2005.


Global: Re-Sequencing--Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html

[stolwyk]

The Goldseeker Market Report:
http://news.goldseek.com/GoldSeeker/1118871779.php


U.S. Industrial Production Rose 0.4% in May, More Than Expected
http://quote.bloomberg.com/apps/news?pid=10000103&sid=aQ.xddJwsjfE&refer=news_index


Dollar Declines Against Euro After Foreign-Purchase Report
http://www.bloomberg.com/apps/news?pid=10000103&sid=aWcR7eIZbayM&refer=us



Current prices: USD 88.54 Gold 428.4 Silver 7.29 Oil 55.40

[stolwyk]

Gold Prices Surge Around the Globe
http://news.goldseek.com/GoldSeeker/1118959373.php


Current: Gold finished at 435.3 but since trading started a short time ago jumped 1.7 to 437.0. Apparently there is a resistance here which has to be broken. I like to see 440.

USD 88.62 Silver 7.34 Oil 56.54 Dow +0.1%


2005 CPI Rising At Its Fastest Pace In Fifteen Years
Peter Schiff
http://www.gold-eagle.com/editorials_05/schiff061505.html


FED Manufacturing Survey:
http://mam.econoday.com/reports/US/EN/New_York/philadelphia_fed_survey/year/2005/yearly/06/index.html


OPINION:
U.S. Bullies China - Dollar Crisis Looming
http://news.goldseek.com/OnlineInvestorsNews/1118949922.php

[dingdong]

quote:Originally posted by stolwyk



DECOUPLING OF GOLD.

G. Stolwykos

As to the Euro, at 1.212, there is little motivation talking about it. Gold decoupled some time ago and the Euro can be forgotten for quite some time, as far as Gold is concerned


Now that gold has (temporarily) decoupled from the EUR/CHF, the gold bugs are salivating at the prospect of the Second Coming (1980 all over again). Unfortunately they will be waiting 2000+ years too.

[stolwyk]

Gold Seeker Weekly Wrap-Up - Gold Jumps as Dollar Falls; Oil Hits New Highs
http://news.goldseek.com/GoldSeeker/1119045654.php




There have been significant changes in the markets: The Current Account Deficit drove the USD down to 87.56 (-1.06). It could be in correction mode. Oil climbed to 58.47 (+1.89): my prediction is $65+/-$5/b, July, based on USD=84

Gold climbed steeply to 439.1 (Rising Current Account Deficit number appeared) but retreated to 437.3 when a much improved "Consumer sentiment" number came out (Implication: Interest rate rises to come which could affect Gold somewhat).

The Euro is recovering since it hit 1.2 and is now 1.2272 The "Euro Gold Price"= 437.3/1.2272=356.3 Euros. DOW:+0.4%




CONRAD:
Foreign Investment in the US is Slowing 6/17/05
http://www.kitcocasey.com/displayArticle.php?id=163



A. HAMILTON: Euro Gold 350 Euros!
http://www.kitco.com/ind/hamilton/jun172005.html



The global housing boom--In come the waves
http://www.economist.com/finance/displayStory.cfm?story_id=4079027




The History of Bubbles Spells Trouble Ahead
http://www.kitcocasey.com/displayArticle.php?id=162

[stolwyk]

Financial Sense Newshour:
http://www.netcastdaily.com/fsnewshour.htm

________________________________________


GOLD: WHERE IS THE PRICE GOING?

G. Stolwyk

1. The USA.
The market is getting less enthralled with the dollar as the Current Account and other Deficits rise. The USD fell heavily after Friday's number.

It is the Current Account which is a big worry. Think of the US and one talks of wars, deficits, housing bubble, debt, the inaction, the shams, be these the FED's or private, the high consumption, high imports, the virtually nil savings and export of Goods worth only some 9% of GDP.

All these important factors are strongly negative. Also, the world is refinancing the Current Account deficit by $2.2 Bill/day; however, at the moment the US is taking in less than that because certain sources are unwilling to lend as much as before. I am waiting for developments.

The latest problem is the ease with which companies can load their pension liabilities on to the US Govt. " Companies with underfunded pension plans reported a record shortfall of $US353.7 Billion in their latest filings with the Pension Benefit Guaranty Corporation (PBGC), the Govt organisation which will need to accept most of it for action. It is estimated that if all companies with these liabilities were included, one would get a total of $US450 Bill"-Bradley Belt of the PBGC. It is now $480 Bill.

As to shams, here is a graph of the CPI which is much lower compared what it would have been under CLINTON's Govt: Refer to the bottom graph of this website: http://www.financialsense.com/fsn/061805charts_b.html

So, when 3% CPI is mentioned, the reality is 5.6% of GDP. And that could be an understatement as adjustments were made so as to understate the CPI. It is no better with the GDP which is overstated.

The devaluation of the Euro means that exports from the US to Europe will be less and imports are likely to be higher. Add to that increased oil prices and the Current Account Deficit won't be nice next time.

Following the USD's fall by 1.06 to 87.5 on Friday, I believe that it is in correction mode.

Even allowing for further interest rises-if possible- I believe that the outlook for Gold is positive, more so as the supply of gold is becoming less with time.


2. EUROPE
The Euro fell from 1.35 to 1.20 and recovered in the last few days to 1.227. Europe is now more competitive and will try to export more to the US. That could lead to more trade arguments.

Peter Schiff: "As I have been writing, a strong euro has kept a lid on European inflation. During the last three weeks that lid has been blown clear off, with a 22% surge in the euro price of oil, as well as a 10% rise in commodity prices in general. To keep inflation from getting out of control, to stop gold's rally, and to officially take the title of reserve currency away from the dollar, the ECB needs to aggressively raise interest rates, and let the economic chips fall where they may".

Comment: On the one hand, the European economies can't really stand an increase in interest rates. However, the rate differential between that of the Euroland Central Bank and the US is becoming too much for comfort.

It will become a political decision, I think. Should they increase it, then not only the Euro wil be strengthened but more capital could be diverted to it. That could starve the much needed supply of cash, the US wants to finance its deficit and their interest rate could rise further- that is if the economy and its bubbles can stand it. The Gold price could rise.

On the other hand, if there is no European increase in interest rates, then inflation will become more virulent and that is good for Gold. But much less Gold could be bought should the Euro Gold Index move below 350 Euros. It is 357 at present. (The Gold price is 438.1 and the Euro is 1.227).

HOMMEL: "So if a decisive and sustained €350 breakout is enough to get the Europeans interested in investing in gold again, it may very well ignite a virtuous circle. Europeans will buy gold, driving

[stolwyk]

Gold 438.1 Oil 59.77 USD 87.96 Silver 7.3

European crisis adds to market rush for gold
http://news.ft.com/cms/s/a5f57294-e0fb-11d9-a3fb-00000e2511c8.html


Gold May Rise on Speculation Central Banks Will Reduce Sales
http://quote.bloomberg.com/apps/news?pid=10000080&sid=a8cFSKNc2ga0



THE BOTTOM LINE
A Debt Summary
by Michael W. Hodges, Author
Grandfather Economic Report
June 19, 2005
http://www.financialsense.com/editorials/hodges/2005/0619.html


Interview with FERDINAND LIPSs
silberinfo.de
http://www.gold-eagle.com/editorials_05/silberinfo061805.html

[diesel]

Have just read a book called "The Long Emergency" by James Howard Kunstler. All you Gold, Silver and Oil Bugs out there should read this book.

It basicly is a realists look at the implications of peak oil. One of the best books I have read in the last few years.

This book certainly makes me want to buy all the Gold, Silver and Oil I can afford!

[Mick100]

Hi diesel
Where did you source the book "the long emergency"

cheers
Mick
,

[diesel]

I got the book from amazon. Not to bad buying books from them nowadays given our exchange rate. www.amazon.com.

I believe that borders can also order the book if you want it.

[stolwyk]

Thanks Diesel.

Gold Falls From Three-Month High After Report ECB May Cut Rates This Year
http://www.bloomberg.com/news/markets/commodities.html


Latest:
Gold weakening as the Euro fals. Gold: 436.3 Silver 7.25 USD 88.44 OIl 59.46 EURO: 1.2145 (Could go lower)

The Daily Resource - 6/20/2005
http://www.kitcocasey.com/displayArticle.php?id=165
Extract:
Finally, there were questions about stability in the Middle East after the United Arab Emirates said that it will seek “major” changes to borders with Saudi Arabia. According to Bloomberg, UAE officials will soon meet with the Saudis to seek changes to a 1974 border agreement.

In dispute is a shared oil field, which currently lies 90% within Saudi borders, but which the UAE wants to begin exploiting. Saudi Arabia currently produces a reported 560,000 barrels of oil per day from the field

_________________________________

The Fed's At It Again. What Do They Fear?
http://www.gold-eagle.com/editorials_05/mchugh061905.html


Interviews with Doug Casey, Paul van Eeden, Rick Rule and Lawrence Roulston Shed Light on the Current Resource Market
http://www.kitco.com/ind/korelin/jun202005.html

[stolwyk]

Gold Seeker Closing Report – Bill Gross Predicts Possible FOMC Rate Cut
http://news.goldseek.com/GoldSeeker/1119390172.php

Latest: Following reports that the EEC may cut rates, the Euro fell, while the USD strengthened (Widening of interest rate differential)

Gold fell to 434 but recovered and is now 438.0 Silver 7.25 The Euro recovered somewhat to 1.218. USD 88.1 and oil 58.86 DOW -0.1%


The Daily Resource - 6/21/2005
http://www.kitcocasey.com/displayArticle.php?id=167


Global: Squeezing Asia
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html



RE: Confiscation of US Gold-The NEW DEAL
SOCIAL SECURITY
The Incubus and Succubus Nemeses
http://www.financialsense.com/fsu/editorials/gnazzo/2005/truth/part4.html

[stolwyk]

Gold closes lower in New York as traders consolidate recent gains
http://www.afxpress.com/about488/index.php?lg=en&c=00.00&story=1224752

Latest: Gold 437.6 Silver 7.24 Euro 1.213 USD 88.44 Oil 58.31 DOW -0.1%


The Daily Resource - 6/22/2005
http://www.kitcocasey.com/displayArticle.php?id=168


The Biggest Global Real Estate Boom of All Time.
by Joe Average
http://www.gold-eagle.com/editorials_05/swagell062105.html


Perpetual motion machines
By Richard Daughty
"The Mogambo Guru"
http://www.kitco.com/ind/daughty/jun222005.html


Is the Euro in crisis?
http://www.kitcocasey.com/displayArticle.php?id=170

[stolwyk]

Gold Seeker Closing Report – Oil Hits $60; Markets Tank
http://news.goldseek.com/GoldSeeker/1119563918.php

Current: USD 89.0 (+0.56) Gold 441.0 Silver 7.23

Forest: Resources: http://www.kitcocasey.com/displayArticle.php?id=172


Worth reading:
DUNCAN:
Has The Fed Lost Control Over Interest Rates?
http://www.gold-eagle.com/editorials_05/mauldin062205.html


THREE GREAT BIG LIES
Jim Willie CB June 22, 2005
http://www.gold-eagle.com/editorials_05/willie062205.html

[stolwyk]

Gold Seeker Weekly Wrap-Up - Dow Drops Over 100 Points Again!
http://news.goldseek.com/GoldSeeker/1119649906.php

Latest: USD 88.7 Gold 440 Silver 7.25 (very static at the moment) Oil 59.84 DOW -1.2% (Correcting).


THE CORE RATE by Jim Puplava
Storm Watch Update
June 24, 2005
http://www.financialsense.com/stormwatch/2005/0624.html


Gold Rises in New York on Speculation China Will Revalue Yuan
http://quote.bloomberg.com/apps/news?pid=10000080&sid=aXqKxtJ7mmRo

Financial sense newshour:
http://www.netcastdaily.com/fsnewshour.htm

[stolwyk]

Financial Sense Newshour:
http://www.netcastdaily.com/fsnewshour.htm


MARC FABER:
Housing bubbles and resource misallocation
http://www.ameinfo.com/62979.html


German 10-Year Bonds Advance, Pushing Yield to Lowest on Record
http://www.bloomberg.com/apps/news?pid=10000087&sid=a.qTVJFbrD0U&refer=top_world_news


Warren Buffett remains bearish on the dollar
http://www.msnbc.msn.com/id/8335811/

[stolwyk]

OIL AND GOLD

G. Stolwyk

Now with a highly fundamentally Islam Iranian president chosen, expect additional risk factors for the Middle East.

Iran will lean towards Venezuela and both would want pricy oil as long as the market can take it.

This will create more inflation in Europe, the US and most other countries. The risk of stagflation has increased.
1. Conclusion: The Euro could fall further and the demand for Gold could increase.

As far as the USA is concerned, printing more dollars to overcome any adverse effects may become useless if the oil price can remain high enough or the USD does a tumble.

2. Conclusion: Even a suspicion that not all is well could promote US consumption of Gold.

Back to the Middle East. I think that the demand for gold will increase due to a number of factors, including the disposal of greater profits. Also, the USA seems to be very active outside the Northern Iranian border and perhaps even in Iran, using Iranians.

Iran was more moderate before and wasn't seen as meddling in Iraqi affairs. That could change.

So, there are a number of increased risks which when bundled, point to an increase investment in gold IMHO:

3. Conclusion: Higher Investment demand for Gold from the Middle East can be expected. India's use of Gold will also increase.

As to production of Gold, increased costs and poor currency conversion into dollars will result in less mine production this year. Even if Gold rises it will take time to undo the negative factors. Closures in SA are continuing.

4. Conclusion: Increased Demand and less mine production.

Any meaningful revaluation of the Chinese YAN currency is deemed to be good for Gold.
Privately I have always thought they would pick their own time for a revaluation.

They keep throwing rumours around so as to unsettle the Hedge Funds and the USA.

5. Conclusion: If China decides to make a realistic revaluation then it could be a big plus for Gold.


Summary: It seems to me that overal Investment Demand will increase. Gold is stuck somewhat at the $440 point but frequently hits higher values. The US is expected to raise interest rates while some uncertainty about IFM Gold lingers.

We'll know more in a week/fortnight, I think. The direction medium term ought to be up and should events pan out well in the next fortnight, then it ought to remain up and could break through a few resistance levels, IMHO.

I did mention, although Gold now and then breaks free from currencies, I do expect a very robust break at about $470 or before.

Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[diesel]

Hi Stolwyk,

I have to disagree with you with your gold forecast. I think we will have another week or two of strong gold prices before another break down in the price of gold which will eventually force the mining shares to new lows around the 150 - 170 range in the HUI which is when I will load up the boat up with gold shares.

Reasons are:

1. Commercials going short gold in both bullion and shares massively. IMHO this is generally a good indicator that gold is about to head downwards rather than up and away.

2. I think we are in an Elliot wave ABC bear market rally after completing Elliot wave 4 of 5 down in the HUI and XAU. We still have Elliot wave 5 of 5 to go before we start the big wave 3 up which is when the big move in gold and there shares up will begin.

Given this I am still long term super bullish in gold and probably short term i.e. another week or two but in the medium term i.e. 2weeks to 6 months are bearish.

If the HUI rallys past 220-230 I will review my position as this would indicate that gold has pushed past resistance and is headed for new highs.

IMHO, I think that the best returns for the next year will be in Oil, Natural Gas, Uranium, Silver and Grains. I see the big returns in Gold being a year and a bit away yet.

[stolwyk]

Latest: USD 88.30 Gold 439.0 Silver 7.20 Euro 1.2165 Oil 60.36! DOW: -0.1%

Countdown to Iran ... and Unprecedented Spikes in Oil and Gold Prices
By Lou Passi
http://www.hotcopper.com.au/post_single.asp?fid=2&tid=206889&sym=&MSGNO=112450#112450


Peter Schiff: Theatre Of The Absurd:
http://www.financialsense.com/fsu/editorials/schiff/2005/0627.html


Global: The Endgame
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html

_________________________________________

SA: 100,000 mineworkers on strike:
A bad bruising year for gold companies with an already lower production still falling further. It will affect the world production of gold:

http://www.finance24.com/articles/business/display_article.asp?Nav=ns&lvl2=buss&ArticleID=1518-24_1727846

Extract:
"Johannesburg - South African mines have felt the brunt of a nationwide mass action against job losses as all of the National Union of Mineworkers (NUM's) 100 000 members heed Cosatu's call to strike.

The Congress of South African Trade Unions kicked off its rolling mass action with the first strike on Monday to highlight the high unemployment rate, poverty and the effect of the strong rand".

[stolwyk]

Overbought NY gold ends at 2-week low; silver down
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH18383_2005-06-28_19-21-34_N28541426

Gold Seeker Closing Report
Dow Gains 114
http://news.goldseek.com/GoldSeeker/1119995049.php

Latest: USD 88.83, Euro down at 1.207 Gold 435.3 Silver 7.12 Oil down at 88.03 (They were trying to convince Nigeria to pump another 0.5 mil barrels).
______________

Forest: The Daily Resource - 6/28/2005
http://www.kitcocasey.com/displayArticle.php?id=179


World's Refineries May Not Meet U.S.' Growing Gasoline Appetite
http://biz.yahoo.com/ibd/050627/general.html?.v=2
______________________________

China Economy Rising at Pace to Rival U.S.
http://www.nytimes.com/2005/06/28/business/worldbusiness/28yuan.html?oref=login

Extract:
"Workers in white uniforms and gray caps complete the rest of the welds, working as quickly as workers in American factories - but earning roughly $1.50 an hour in wages and benefits, compared with $55 an hour for General Motors and Ford factories in the United States".

NB: It pays to register (Free), because there wil be many good articles from the NY Times to come.

[stolwyk]

Gold Seeker Closing Report – Gold and Silver Shares Shine
http://news.goldseek.com/GoldSeeker/1120080688.php


Latest: USD 89.0 Euro 1.209, Gold 436.8 Silver 7.09 Oil down at 57.1
Dow -0.3%


China: U.S. Dollar Not Worth Paper it's Printed On
http://www.kitcocasey.com/displayArticle.php?id=181


U.S. June Consumer Confidence Index Rises to 105.8 From 103.1
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aknZ0nD6afKk&refer=home


MEXICO: THE STATE, OIL AND SILVER
http://www.gold-eagle.com/editorials_05/watson062905.html
_______________________________

BIS warns on domestic and international debt
http://news.ft.com/cms/s/198d1cf4-e73f-11d9-a721-00000e2511c8.html

Extract:
"Without a smaller budget deficit, lower private sector consumption and higher savings, there was little likelihood of stabilising the ballooning US current account deficit. The ever widening deficit “could eventually lead to a disorderly decline of the dollar, associated turmoil in other financial markets, and even recession”.

Asian currencies, should appreciate against the US dollar, the report said. “Obvious candidates for revaluation,” it said, were the “the Chinese renminbi and other Asian currencies that take their cue from it.”

[stolwyk]

Gold Seeker Closing Report – Fed Remains Measured
By: Chris Mullen, Gold Seeker
http://news.goldseek.com/GoldSeeker/1120167869.php

Latest: USD 89.0 Euro 1.2087 Gold 434.8 Silver 7.01 Oil 56.57


World must adapt to China and India - WB
http://www.chinadaily.com.cn/english/doc/2005-06/29/content_455648.htm


Alan Greenspan, wizard or villain?
Once admired by most, Fed chief increasingly bashed after dot-com bust
http://www.msnbc.msn.com/id/8405056/


Please note that this report normally appears somewhat late but there can be worthwhile items in it:
Forest: Resources:
http://www.kitcocasey.com/displayArticle.php?id=183

_______________________________________

Color Revolutions, Geopolitics
and the Baku Pipeline
by F. William Engdahl, Author
June 29, 2005
http://www.financialsense.com/editorials/2005/0629.html

Very informative. No wonder that Putin doesn't like what is going on.

[stolwyk]

Gold Seeker Weekly Wrap-Up - Gold & Silver Get Smacked; Their Shares Do Not
http://news.goldseek.com/GoldSeeker/1120254473.php

Latest: USD strong 90.0 Euro very weak 1.193 Gold down to 427.3 Silver 6.84 Oil 58.75


Resource Wars:
http://www.financialsense.com/fsu/editorials/vaughn/2005/0630.html



China currency shift may have unseen results
http://www.msnbc.msn.com/id/8123304/


Interesting sessions tonight (Wait till the Audio Formats turn blue)
http://www.netcastdaily.com/fsnewshour.htm

With Marc Faber--Who is complaining?

[stolwyk]

LOCK-IN OF RESOURCES AND CONSEQUENCES.
28 June, 2005

G. Stolwyk

Investors often don't know the reasons for price rises and yet, sometimes, these are not that hard to find.

Take oil, apart from the often trotted out reasons there are 2 new ones and these additional negatives may be just enough to break the camel's back:

1. The increase of US activity outside the Iranian border (Some say that special US trained Iranians who don't like the current regime, are in Iran already). This heightens the political risk particularly with Israel involved and with a new fundamentally Islam Iranian Govt.

In the medium term China will draw some 13% + of its oil requirements from IRAN, so there is as considerable military risk and Iran has big business going with Russia and China.

2. Venezuela and Iran are members of OPEC, both are anti US and they want high prices.
__________________________

THE LOCK-IN OF RESOURCES: RESOURCE WARS.
Lock-in without using these in the next couple of years means that the supply will be less. No other company can develop these because China or other countries have set these aside.

So, prices of resources rise.

Lock-in is expensive, however as prices rise, it won't be a problem for China who also uses Govt owned large corporations in each field to collect and look after the acquired assets bought with $US.

It is a problem for US companies who can't afford to set something aside as the oportunity cost will be too high. They want to use assets now to make a profit and are responsible to their shareholders.

And the US Govt won't subsidize them while China can subsidize their majority owned companies. India is also busy buying resources with $US.

So, the US will be slowly locked out from some massive reserves, of which oil is the primary wanted resource now. They wil be left with assets which are not as well located and more expensive to develop.

Of course this also applies to other resources, including the strategic metals.

So, while there will always be some retracements in pricing, the overall situation is quite different than a few years ago: apart from plenty of everything available then, there were no real lock-outs.

Perhaps the Chinese have locked in some 30% of the resources they want in the next ten years.

That means that the lock-in war has only just made a very good beginning.

It can also mean that because the Lock-in wars are continuing at a fast rate, this wil support prices of some metals which ordinarily would have sagged by now.

Analysts tend to forget that and draw the wrong conclusions: ie $25/b for oil.

One could also say, that because of Lock-ins, prices in a future recession could be much higher than in an identical recession having occurred some years ago.

I'll leave it to the Reader to draw his conclusion as to worthwhile investments.

[easy money]

well....i guess i will have to buy some more SMM....before someone from china gets wise.

[stolwyk]

China currency shift may have unseen results
http://www.msnbc.msn.com/id/8123304/


Global: The Optimism of a Pessimist
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html



Chapman: Roaring Government Bond Market
http://www.gold-eagle.com/editorials_05/chapmand070105.html


US war with Iran has already begun
http://english.aljazeera.net/NR/exeres/7896BBD4-28AB-48BA-A949-2096A02F864D.htm


Resource Wars:
http://www.financialsense.com/fsu/editorials/vaughn/2005/0630.html

[stolwyk]

US long weekend-hence subdued trading: US 90.32 Gold 426.3 Silver: 6.86 Oil 58.75


++++++++++++++++++++++++++++++++++++++++++

Forest: Resources-4 July

http://www.kitcocasey.com/displayArticle.php?id=190


Extract:
"In other oil news, Venezuela is pushing ahead will plans to build a “Caribbean OPEC”. Officials from the country said last week that they have succeeded in creating an association of regional oil companies amongst Caribbean nations.

The move is aimed at lowering energy costs in the region by cutting out international companies as producers and suppliers.

13 of 15 prospective partner nations have signed onto the accord, with only Trinidad/Tobago and Barbados opting out. Venezuela said that it is already preparing three oil tankers to supply crude to signatory countries".
____________________________________

Comment: I don't think that the US is in favour of that. Both Iran and Venezuela want high oil prices.

China has influence in Venezuela.


+++++++++++++++++++++++++++++++++++++++++++
++++++++++++++++++++++++++++++++++++++++++++++++++ +

PEAK OIL AND WHAT IT MEANS TO YOU
by David Petch
http://www.financialsense.com/fsu/editorials/petch/2005/0703.html
___________________________________

Comment:

URANIUM RUNNING OUT IN 2030? OILS FROM WELLS IN 2038?

It is possible that oil from wells may last a few more years because when the price moves up significantly, useage may come down by substituted savings.

In any case, oil recovery from oil sands will be in full swing by then, using water produced by nuclear reactors or whatever.

As to Uranium, the nuclear facilities will continue to increase, and the expense of uranium is not a big burden to the nuclear reactors. So, I don't see that much saving can be made unless modern reactors use less.

The Uranium prices to come will warrant "desperate" exploration.

The current younger generations could have a harsher time.


Gerry

[stolwyk]

I am sorry for being late.


NY gold settles at 1-month low on fund-led sales
Tuesday, July 5, 2005 6:55:55 PM
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH06610_2005-07-05_18-55-55_N05533688

Current: USD 90.25 Euro 1.19 Gold 423.3 Silver 6.89 Oil 59.9



Oil Traders Raise Bets on $80 Crude on Supply Concern
http://www.bloomberg.com/apps/news?pid=10000087&sid=aE6weWi_eeVc&refer=top_world_news


China Tells Congress To Back Off Businesses
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/04/AR2005070400877.html


Mr. Greenspan's dilemma
Commentary: The Fed's moves still aren't working
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B52AA7FD9%2D8B8E%2D42B6%
2DB98F%2D6579B982C931%7D


The Daily Resource - 7/5/2005
http://www.kitcocasey.com/displayArticle.php?id=192

Extract:
"Elsewhere, Bloomberg reported that options contracts on the New York Mercantile Exchange show that oil could spike to $80. There are now 6,900 options contracts for December crude purchase at $80, as compared with an average of 77 in January. “We've certainly seen people asking for prices on $100” contracts, London’s Barclays Capital analyst Orrin Middleton told the news service. “This was way off people's radars 12 months ago. They now believe there's a possibility, but it's going to take a supply disruption to take us there.”

[stolwyk]

Gold Seeker Closing Report – Oil Makes New Highs; Dow Drops 101
http://news.goldseek.com/GoldSeeker/1120685894.php

Current: USD 90.25 Oil 61.37 Euro 1.193 Gold 423.2 Silver 6.91


Forest: Resources:
http://www.kitcocasey.com/displayArticle.php?id=194


+ + + SINGAPORE (Reuters) -- China will allow the country's four major commercial banks to sell gold bars to their customers in the near future to boost demand for investment, dealers said on Wednesday:

http://edition.cnn.com/2005/BUSINESS/07/06/china.gold.reut/index.html?section=cnn_latest


A Crisis of Confidence
by Dr. Marc Faber
Editor, The Gloom, Boom and Doom Report
and Author of "Tomorrow's Gold"
July 6, 2005
http://www.financialsense.com/editorials/2005/0706.html



Oil Approaches $61 as Tropical Storms Threaten U.S. Supply
http://www.bloomberg.com/apps/news?pid=10000103&sid=a1chXOCQfqCc&refer=us

Comment: Wait till a number of negatives converge!



The Flush Out By: Theodore Butler
http://news.silverseek.com/TedButler/1120656605.php

[stolwyk]

Gold Seeker Closing Report – Gold Gives Up Gains, Markets Rally from Lows
http://news.goldseek.com/GoldSeeker/1120773633.php
Current: USD 90.15 Oil 60.54 Euro 1.1194 Gold 424.2 Silver 6.93


Retail Sales Get Boost From Summer Weather
http://biz.yahoo.com/ap/050707/economy.html?.v=10


Saudis warn of shortfalls as oil hits $61
http://news.ft.com/cms/s/e0cdc282-ee47-11d9-98e5-00000e2511c8.html

"Fears that US refineries are ill-equipped to meet winter demand for heating oil and other distillates have driven crude prices more than 9 per cent higher in the last week".


Federal Deficit Reality: An Update
by John Williams, Executive Editor
SHADOW GOVERNMENT STATISTICS
http://www.financialsense.com/editorials/gillespie/2005/0707.html


China’s impact on the global economy
http://www.ampcapital.com.au/K2DOCS/site_research/7CE89067-6A32-4099-9022-0ADE5524730E/OIChinasImpactOnTheGlobalEconomy.pdf?DIRECT

[stolwyk]

Gold Seeker Weekly Wrap-Up - BLS Strikes Again and Instigates Market Rally
http://news.goldseek.com/GoldSeeker/1120860159.php


Current: USD 90.15 Oil 59.63 Euro 1.197 Gold 422.8 Silver 7.00



Paul van Eeden: Decoupling the gold price
http://www.hotcopper.com.au/post_single.asp?fid=2&tid=209953&sym=&MSGNO=113699#113699


COT Gold Report:
http://news.goldseek.com/COT/1120854855.php


Season's Greetings from the Fed
http://www.strike-the-root.com/4/smith/smith12.html


Financial Sense Newshour:
http://www.netcastdaily.com/fsnewshour.htm

[stolwyk]

HOW TO TALK DOWN THE OIL PRICE

G. Stolwyk

Several sources have been doing that for a very long time. The aim was to talk the price down by suggesting that price negative factors would enter.

So, when the price was $40, they wanted $25 and started to talk about pending gluts, the arrangements made with Opec to increase production, the increasing US strategic oil reserve or whatever.

On 14 Nov I predicted $45 medium term and on 27 Dec this was modified to $45 +/- $5. Others said it would be $25/$30.

That prediction did turn out quite well on 30 May, when based on USD=86, the oil price was $51.

I then predicted $65 +/- $5 in July, based on USD=86.

The USD is now 90 and the oil price =$60 or in USD=86 terms: 90/86*60= $62.8. A couple of days ago, it was $1 higher, so once again, that prediction turned out quite well.
________________________________

There are many factors working against lowering of oil prices:

1. The inability of the Saudis to meaningful increase production when consumption rates are increasing.

2. The unusual weather patterns: Cold winters, hot summers and typhoons in the Gulf of Mexio or other areas.

3. The much higher increasing demand from China and India with their developing economies.

4. Both Venezuela and Iran want high prices and as the Saudis can't deliver much more oil, have a greater chance of raising the floor price slowly.

Venezuela wants a South American Opec established. That would be an inducement to keeping prices at higher levels.
At the same time Venezuela wants South American States to take a greater cut by exploring for oil and developing the fields themselves. This is upsetting the US as they could slowly lose control of the means of production and a possible cutback in supply much later on. The Chinese are active in Iran and South America.

5. Iran mentioned the renegotiation of oil contracts. That could be painful for Western companies as well.

6. China will slowly fill their storage sites with a massive amount of oil to be used as strategic reserve.

7. American Bases just outside Iran and the training of Iranian resistance fighters who are infiltrating that country. Fear about the US/Israel and Iranian standoff.

8. The old refineries of the US can't produce the items wanted and this results in more imports.

9. Oil rerserves are not being sufficiently replaced in certain areas. Much talk about Peak Oil is assisting the Producers to keep up prices.

10. Increasing costs and increased risks built into the oil price


Summary: There is'nt any way of talking the price down: there is always something that keeps up the price at any time.

Latest remarks that the US economy is not really suffering from these oil prices must be music to producers. But of course the Japanese and Europeans will feel the heat alright.


++++++++++++++++++++++++++++++++++++++++++++++++


Financial sense newshour:
http://www.netcastdaily.com/fsnewshour.htm


Hamilton: CRB Index Revised
http://www.kitco.com/ind/Hamilton/jul082005.html

[dingdong]

quote:Originally posted by stolwyk


DECOUPLING OF GOLD.

G. Stolwyk

As to the Euro, at 1.212, there is little motivation talking about it. Gold decoupled some time ago and the Euro can be forgotten for quite some time, as far as Gold is concerned


So Stolwykos claims gold has supposedly decoupled from the Euro, but it is sliding back in ALL CURRENCIES at the moment. It is just a matter of time before gold falls back to earth and below 340 Euros and the gold/EUR/CHF peg resumes.

[stolwyk]

CHINA VS. U.S. - ROUND 1!
by David N. Vaughn
http://www.financialsense.com/fsu/editorials/vaughn/2005/0708.html


Gold May Rise as Terror Concern Boosts Appeal of Metal as Haven
http://www.bloomberg.com/apps/news?pid=10001065&sid=apVqz5YNv6iw&refer=movers_by_index

____________________________________________

IRAN AND IRAQ TO CO-OPERATE OVER DEFENCE

http://news.ft.com/cms/s/e77d12b8-ef0f-11d9-8b10-00000e2511c8.html

Text:
Iraq and Iran to co-operate over defence
By Neil MacDonald in Baghdad and Najmeh Bozorgmehr in Tehran
Published: July 7 2005 19:01 | Last updated: July 7 2005 19:01

Former foes Iraq and Iran announced “a new chapter” in their relations on Thursday, including cross-border military co-operation, dismissing US concerns about Iranian regional meddling.


On his first official visit to Tehran, Iraqi minister of defence Saadoun al-Dulaimi asserted his country's sovereign right to seek help from wherever it sees fit in rebuilding its defence capabilities.

“Nobody can dictate to Iraq its relations with other countries,” Mr Dulaimi said in a joint press conference with his Iranian counterpart, Admiral Ali Shamkhani.

The two ministers said that a military co-operation agreement, now in the preparation, would include Iranian help with training and upgrading Iraq's reconstituted armed forces, a process so far overseen by US and coalition advisers.

Iran and Iraq fought a brutal war from 1980 to 1988, at a time when Washington saw Iraq's then-strongman leader, Saddam Hussein, as a bulwark against the spread of Iranian-inspired Islamic radicalism.

Since the US-led overthrow of Mr Hussein in 2003, US officials have accused Shia-dominated Iran of interfering in Iraq's internal affairs.

Iraq's interim government last year rejected an Iranian offer of training for Iraqi border guards, but relations have since warmed under an elected government, based on a Shia Arab parliamentary majority.

Mr Dulaimi, a Sunni Arab appointed to the defence post in an effort to achieve ethnic balance, said Iran had offered $1bn (€838m) in aid as a gesture of support for Iraq's post-war reconstruction, without giving further details.

The US administration insists that coalition troops must stay in Iraq until the country's own security forces are ready to stand alone against insurgents, who refuse to recognise the government elected on January 30.

While asserting Iraq's sovereignty, Mr Dulaimi said coalition forces were still needed.

“If they leave in the current situation, there will be nothing but insurgency and crisis,” he said. “We should have time to train forces to replace the multinational forces.”

Ibrahim al-Jaafari, prime minister, has called for training and re-equipping efforts to be stepped up so that foreign troops can “leave Iraq sooner”. Mr Jaafari is scheduled to lead a large delegation to Tehran next week.

US and Iraqi officials have previously accused Iran of encouraging instability in Iraq, reflecting similar fears to those that prompted Mr Hussein's 1980 invasion.

Tehran has denied cross-border meddling or allowing arms and fighters to flow into Iraq from Iranian soil.

Nonetheless, Admiral Shamkhani welcomed “a new chapter in our relations”, promising that the neighbouring countries would “start wide defence co-operations”.

He, too, dismissed presumed US objections. “No one can prevent us from reaching an agreement,” he said.

+++++++++++++++++++++++++++++++++

Comment: Ought to be oil price sensitive given time.

The US wanted to stay there as long as possible but the Iraqis won't let them.

It has great relevance as to Iraq's oil resources. China has strong ties with Iran. China could be be after the oil.

Talking about oil wars!


Gerry

[stolwyk]

Gold futures top $426 on dollar, terror
Copper climbs; key indexes end near four-month high

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BE3370A10%2D6D1A%2D4411%2D8E6E%2DC5493D78F6 47%7D

CURRENT: USD 89.1 Euro 1.216 Gold 426.9 Silver 7.1 Oil 59.3


Oil Falls a Third Day as Hurricane Dennis Misses U.S. Gulf Rigs
http://www.bloomberg.com/apps/news?pid=10000087&sid=ao3mLb8lVgYc&refer=top_world_news



Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=200


China's Trade Surplus Swells as Exports Reach Record (Update1)
http://www.bloomberg.com/apps/news?pid=10000080&sid=aenVQh3vHyHM&refer=asia

[stolwyk]

Gold Seeker Closing Report – Oil Climbs Back Over $60 as BP Oil Rig Listing Badly
http://news.goldseek.com/GoldSeeker/1121204359.php

Important results to come from the US, starting tonight.
The Euro has recovered somewhat due to expected poor US Current Account results tonight: 1.222

Current: USD fell to 88.39 Oil 60.66 Gold 426.1 Silver 7.05


FOREST: RESOURCES
http://www.kitcocasey.com/displayArticle.php?id=201
Extract:
"In oil news, the crude contract rose for the first day in four yesterday on speculation that a report tomorrow will show that US gasoline inventories fell last week.

The rise also came as Al-Jazeera reported that one of Iraq’s main refineries was set ablaze Friday in a terrorist attack.

Officials noted, however, that the fires have been extinguished and the facility is expected to return to full capacity".
__________________________________

Panel says India must boost oil reserve, foreign oil hunt
http://news.yahoo.com/s/nm/20050711/india_nm/india_208942;_ylt=ArNFRd182OTQ2XMItRPubiEPLBIF;_yl u=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Comment:
More and more countries locking in oil resources. It seems to me that compared with China, India is somewhat slow off the mark.
However, it isn't and never will be as powerful as China if normal condtitions prevail, IMHO.



Canadian Economy, Buoyed by Oil, Profits, May Surge
http://www.bloomberg.com/apps/news?pid=10000082&sid=amWfq7virLTw&refer=canada


Fed no longer dismiss talk of housing bubble
http://www.msnbc.msn.com/id/8514801/

[dingdong]

GOLD plummeted through 350 Euro mark and looks set to resume its soft peg to the Euro.
A good time to short overrated GOLD stocks before the repoting season.

[stolwyk]

Gold Seeker Closing Report – Trade Deficit Buoys Dollar
http://news.goldseek.com/GoldSeeker/1121291424.php

Current: USD 89.3 Euro 1.206 Gold 423.7 Silver 6.96 Oil 60.0



Big Shift in China's Oil Policy
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/12/AR2005071201546.html


TRADE DEFICIT PUTS DOLLAR BACK IN THE SPOT LIGHT
by Peter Schiff
http://www.financialsense.com/fsu/editorials/schiff/2005/0713.html


THE WAVE OF THE FUTURE
Mary Anne & Pamela Aden
ttp://www.gold-eagle.com/editorials_05/aden071205.html



END GAME: HYPERINFLATION
by Robert Blumen
July 12, 2005
http://www.financialsense.com/editorials/blumen/2005/0712.html



Oil Rises on U.S. Gulf Supply Disruption, Tropical Storm Emily
http://www.bloomberg.com/apps/news?pid=10000086&sid=ayt65COXw1eU&refer=latin_america

[dingdong]

OH DEAR, GOLD AT SIX WEEK LOWS, the speculative mini-bubble has burst, trending back to below 340 Euros and still going nowhere in real money SHORTING GOLD over the past three weeks has been very profitable as predicted, still more downside as gold miners' profits come in below expectations.

[diesel]

A lot of technical analysis that I follow is showing gold will be range bound between $440 and $375 for the next year or so. HUI between 150 and 230. I see the profits in the gold shares coming via trading the stocks over the next year or so. Buy & Hold is not a recommended method at the present time IMO.

[dingdong]

Things must be really bad goldwise, Stolwykos has not posted his daily gold ramp with links to his favourite rabid gold bug sites.

[Mick100]

Just done some sums last night
The money that I invested in may, adding to my positions, is up 14% today. If I take out the coalminer and just calculate the increase on the base metal and precious metals miners, I'm up 20% on the investments that I made in may.

What it comes down to is that if you havn't got the balls to buy when the shares are grossly undervalued as they were in may , then your never going to make money in this bull market.

Deisel, I think your hopelessly off the mark with your prediction for the next yr or so.
I think that the precious metals are going to go into a long and sustained uptrend lasting for sveral yrs. I expect that this uptrend will begin in the next couple of months.
The miners are already leading the way - gold and silver will follow.

,

[diesel]

Mick, I did happen to invest in May so not sure what ou are on about re that. Got into PDN, DYL and MTN around that time and picked up some dirt cheap stocks now with 70 to 200% profits. No complaints about the energy bull market from me. :D

Re your predictions about gold, if we do see a big move through 230 on the HUI I will jump back in but for the meantime I am not convinced and sitting on the sidelines. I have made some nice proits with the move from HUI 170 to HUI 200. Not to worried if I miss any profits between HUI 200 to HUI 230 to minimise my risk. Time will tell who is right! :D

As to your comment about balls. Be brave when others are afraid and be afraid when others are brave. ;)

[Baa_Baa]

For some they're just stocks that are going up or down, any stocks, and you's take your chances for a profit after the ride; for others they're precious metal stocks, and somehow the that forces a focus on the metal first and the stock thereafter, but its the precious part that is usually the source of good humoured debate.

Look for the USD to lead IMO (despite cries of decoupling, I don't think Gold just is, then isn't and that's that). USD broke down through it's ST support trendline and is banging its head trying to get back through. There's always a chance for another push to 100, but currently the technical suggest IMO that a top might be in.

We'll see, have a fun weekend.
BAA

[stolwyk]

Diesel,

You wrote on 27/6:

Hi Stolwyk,

"I have to disagree with you with your gold forecast. I think we will have another week or two of strong gold prices before another break down in the price of gold which will eventually force the mining shares to new lows around the 150 - 170 range in the HUI which is when I will load up the boat up with gold shares".

My Comment: Gold went down during the period you thought, it should have gone up.

+++++++++++++++++++++++++++++++++++++++++++++++++

Gold at six-week low, eyes dollar move
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B1DD02F70%2D1226%2D4237%2D8AFC%2D598F941B7E EB%7D


Current: USD 89.2 Oil 58.36 Euro 1.21 Gold 420.2 Silver 6.91


China's Money Supply Surges as Foreign Reserves Swell
http://www.bloomberg.com/apps/news?pid=10000080&sid=aoWChVVj5.BU&refer=asia


The U.S. Current Account Deficit and the Global Economy
LARRY SUMMERS
http://www.perjacobsson.org/2004/100304.pdf



Global: Resilience in a Vulnerable World
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20050711-mon.html



P. van Eeden:
The devaluation of gold
http://www.paulvaneeden.com/displayArticle.php?articleId=120

[diesel]

Stolwyk,

Well gold did infact go up some but not as much as I expected. My major prediction is that gold wont do much this year and I stand behind that prediction in terms of where my portfolio is invested.

At the end of the day I have my opinions of where the market is going and you have yours. Time will prove who is right.

As an aside, I am not bearish on the Golds and Silvers long term, in fact I am very bullish long term on both gold and silver. My view is shared by others as well. Check out Marc Fabers (Financial Sense guest) and Robert McHugh (Mainline Investors). Both are short term bearish on gold but long term bullish.

My 2 cents...

[dingdong]

Well this must be a first for Stolwykos - no links to the loony Financial Sense or Gold Eagle sites.

Instead, Stolwykos treats us to a link to an article from Stephen Roach, one of the most bearish economists you could possibly find.

[stolwyk]

Diesel, I'll try again:

You disagreed with me and predicted that gold would rise in the fortnight starting with your posting date of 27 June and finishing on July 11.

Actually, the gold price fell $14.50 -See Kitco:

NY close 27 June: 439.70

NY close: 11 July: 425.20.

Now you say: "Well gold did infact go up some but not as much as I expected"

I'll leave it at that.

[diesel]

stolwyk,

Again over the time period you mention I agree gold fell. On June 27 it moved up slightly before correcting, rallying up again before failing again. My mid term forecast is that gold will move sideways the rest of the year before moving up sharply mid to late next year. Short term forecasts are always tricky and I admit as per my last post I was not accurate short term.

Having said that your preaching about gold shares has hardly been accurate lately.

Display a chart of the HUI gold index and since late 2003 you will see they have failed to take out there highs and have been in a running consolidation since then. The real question is when will they break out to new highs and my money is on next year.

How about giving us your opinion as to when we will break past 260 on the HUI stolwyk? Maybe we can look back in a month or a year and reflect on who was most accurate. A freindly wager with nothing at stake never hurt anyone.

By the way did you have a look into that book "The Long Emergency" by James Howard Kunstler? Scary stuff indeed. Quote from book "We will be lucky to have any paper marker left after peak oil".

[stolwyk]

Gold gains, shows mild weekly loss
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B5FB1EC74%2DC53A%2D4EEF%2DA35A%2D2543E7744D 7E%7D

Latest: USD 89.62 Oil 58.09 Gold 421.2 Silver 6.95



New York Fed's Manufacturing Index Rises to 23.9 in July
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aT7jlJ1M9wgQ&refer=home


GOLD WALKS THE LINE
http://www.financialsense.com/editorials/willett/2005/0715.html


COT Gold
http://news.goldseek.com/COT/1121459855.php


COT Silver
http://news.silverseek.com/COT/1121456346.php


Forest: The Daily resource
http://www.kitcocasey.com/displayArticle.php?id=206


Oil Supertanker Bookings Rise to Year High in July
http://www.bloomberg.com/apps/news?pid=10000102&sid=aF1Aqh8bYQ_w&refer=uk


Tonight:
Financial sense newshour
http://www.netcastdaily.com/fsnewshour.htm

[Mick100]

The COT reports are a good addition to your post Gerry

Should be able to make more sense out of the Morgan report tonite

Interesting to note that the commercials have significantly reduced their short positions on gold in the past week.

Not much change in silver though

,

[stolwyk]

Mick,

Thanks for that.

From now on, I'll add those 2 reports as soon as updates come through.


Gerry

[stolwyk]

12 July 2005

GOLD-UPDATE

G. Stolwyk

PRODUCTION
As mentioned, that is expected to be less this year due to a variety of factors.

11 July 2005: Dave Forest: "Metals analysts will also be watching South Africa’s labor situation this week. The nation’s engineering and metal workers union NUMSA has threatened to call 190,000 workers off the job starting tomorrow. The move is in support of wage increases for members".
17 July: Comment: This has worsened lately.

In addition the SA RAND is strengthening. The combination of strikes, greater costs and a stronger Rand wil cut back SA production and so help the price of Gold.


DEMAND
Investment Bars. Investment in gold tends to rise with increasing prices. The Middle East now gets the full benefit of a solid oil price and currency reserves are increasing faster than ever. They are Gold friendly and are bound to transfer some of the hefty profits into Gold. They had financial advice that this is a logical thing to do.

The whole area is hotting up now with the American bases just outside Iran and the Iraqi-Iranian Defense agreement. Sooner or later, the Iraqi Oil reserves will need to be discussed. Presumably, both the US and China will be interested in the oil supply. And so are others.

China is very Gold friendly and big things were expected. Unfortunately much of the inverstor's cash went into investment of infrastructure and other projects with assumed greater profits. However, the Chinese stockmarket hasn't done too well.

The Chinese can buy Gold certificates backed by Gold held by the Central Bank. Not much has been heard sofar but I doubt that it it has been very successful because the State can seize this gold in an emergency.

In a couple of cities they could buy very small bars but only when a rare batch turned up

This is to change as the Republic will shortly allow citizens to hold Investment Bars. So, the Investor can store away his Bar(s) at his convenience. The middle class is becoming bigger and more investment into Gold can be expected.

That, I believe, could be one breakthrough we are waiting for. The Chinese production will be approx 250-300 tonnes, this year.

Obviously, market prices depend on other factors as well. These are not discussed here.


++++++++++++++++++++++++++++++++++++++++++++++

India: Gold passbook scheme launch today
http://www.business-standard.com/bsonline/storypage.php?&autono=194522



Financial Sense Junior Gold Index™
by Frank Barbera
http://www.financialsense.com/metals/fsjg.html


The Silver Market - Tips for the Prudent Investor
http://www.gold-eagle.com/editorials_05/roulston071405.html

[dingdong]

quote:Originally posted by stolwyk

12 July 2005

GOLD-UPDATE

G. Stolwykos

Rant drivel armageddon the end is nigh etc etc....

Financial Sense Junior Gold Index™
by Frank Barbera
http://www.financialsense.com/metals/fsjg.html


The Silver Market - Tips for the Prudent Investor
http://www.gold-eagle.com/editorials_05/roulston071405.html


Ah Stolwykos you are back to your worthy ways with the usual default links to those rabid gold sites.

Stolwykos, do you actually practice what you preach? Do you actually own/horde gold bars??????

[Baa_Baa]

A question for the regulars; "do any of you buy physical gold or silver metal for delivery"?

I ask because the focus seems more on US denominated price action and reporting, whereas one might be forgiven for wondering if people have noticed the last three years of tremendous local accumulation opportunities on price weakness for the physical due mainly to our strong currencies. For buyers, last year in NZD February was a cracker and this year has been outstanding between Feb & June, ending recently with a NZ$50/oz spike. Yummy.

C'mon back;
BAA

[dingdong]

O Sheepish One you might as well be dabbling in forex trading if you want to try and win a zero sum game like gold trading. At least you get interest payments from cash.

[stolwyk]

R. Blumen: REAL BILLS, PHONY WEALTH
http://www.financialsense.com/editorials/blumen/2005/0717.html


Global: Inflation Phobia
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html


Bill Murphy On Gold
Le Metropole Cafe, LemetropoleCafe.com
http://www.gold-eagle.com/editorials_05/murphy071605.html

[dingdong]

Thanks for your non-reply O Stolwykos I didn't think you actually owned any physical gold. Yes, O Stolwykos God of Ramping you lead by example and I will follow and not own gold either.

[miner]

Abdab poor old Gerry is just trying to ramp up the price of gold to get a half decent price for his old gold fillings so he can pay for his new false teeth[:0]:D;).

[Baa_Baa]

Abdab, ohsheepishone hoards gold on price weakness as a fully paid insurance policy against fiscal calamity; traders trade paper gold and mining stocks for cash profits, not metal, although it helps to have some if your option is exercised. [:o)] I thought you would know that given your nagging Stoolwick whether he has any metal. [xx(]

So, do you have any metal, if so why, if not why not?

C'mon back Fred Flintstone; AbadabaDoooo ;)
The Sheepish One
BAA
[^]

[dingdong]

O Planet of the Apes there are fundamental differences between the gold market and other commodities in that gold is not consumed. So the only reason gold has any value is due to hoarding; if people follow Stolwykos' example and not actually hoard gold (or try and sell their hoarding) then the gold price collapses.

Gold is unique in that it has virtually no intrinsic value, only ornamental/sentimental value.

Individuals don't need to hoard other metals/commodities since they are used in industry.

[stolwyk]

GLOBAL MARKETS-U.S. stocks, dollar, gold, oil, bond prices lower
http://today.reuters.com/investing/FinanceArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20050718:MTFH74 425_2005-07-18_22-13-48_N18272189:1

Current: USD 89.52 Euro 1.204 Oil 57.27 Gold 421.4 Silver 7.0


Familiar Trade Fears, but Bigger Risks (Free registration needed)
http://www.latimes.com/business/la-fi-trade18jul18,1,2101682.story?coll=la-headlines-business&ctrack=1&cset=true


New 'Dutch disease' has lessons for U.S. housing
http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-15T132819Z_01_L06164265_RTRIDST_0_PICKS-ECONOMY-DUTCH-HOUSING-DC.XML


Greenspan, at end of era, to signal more rate rises
http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-07-17T173848Z_01_N17200132_RTRIDST_0_BUSINESS-ECONOMY-GREENSPAN-DC.XML

[stolwyk]

U.S. stocks, dollar, bond prices up, gold down
http://today.reuters.com/investing/FinanceArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20050719:MTFH00 317_2005-07-19_22-53-00_N19379523:1

Current: USD 89.9 Euro 1.203 Gold 420.0 Silver 6.95 Oil 58.9 Dow +0.8%


BUD CONRAD:
Interest rates are headed higher in the long term
http://www.kitcocasey.com/displayArticle.php?id=211


The World's Final Consumer
http://news.goldseek.com/DailyReckoning/1121731540.php


Inflation Expectations
By: Steve Saville, The Speculative Investor
http://news.goldseek.com/SpeculativeInvestor/1121783076.php


Morning U.S. Precious Metals Review for July 19, 2005
http://news.goldseek.com/NSFutures/1121781345.php


The Daily Resource
http://www.kitcocasey.com/displayArticle.php?id=210

[bannana]

Very interesting article this, maybe time to get some Gold stocks.:D

Monday, July 18, 2005
Merrill Lynch Predicts Gold Price of $725 Due to Chinese Gold Jewellery Consumption
The price of gold may rise to $725 an ounce by 2010 as surging economic growth turns China into the world’s biggest jewellery consumer, said Graham Birch, who manages a Merrill Lynch & Co fund that has grown fivefold since 2000. Birch helps manage $8.5 billion in mining assets for Merrill Lynch in London, including the Gold & General Fund.

“The Chinese are getting richer, and have very high savings rates,” said Birch. “As they earn more money, they will spend more on things like jewellery.” Birch said.

“Chinese jewellery consumption rose more than 11% to 224.1 tons last year, according to London-based research group GFMS. It may increase to as much as 600 tons within five years", Birch says.

“The question is, where is all that gold going to come from?” said Birch.

[stolwyk]

Gold Seeker Closing Report – S&P & NASDAQ at 4-Year Highs; Greenspan Optimistically Worries
http://news.goldseek.com/GoldSeeker/1121902251.php


Current: USD 89.2 Euro 1.2155 Gold 423.0 Silver 7.06 Oil 57.84 DOW +0.4%


Deflation is NOT a Pure Monetary Phenomenon
by John Mackenzie
http://www.financialsense.com/fsu/editorials/mackenzie/2005/0720.html


Hyper-inflation: where, why and when
http://news.goldseek.com/GalMarley/1121871374.php


Gold Rises in N.Y. as Greenspan Says Market `Excesses' Possible
http://www.bloomberg.com/apps/news?pid=10000081&sid=a.KIhxqzWocM&refer=australia


Daily Metals Report
http://www.gold-eagle.com/dmr2.php

[Baa_Baa]

S'pose y'all heard about the Yuan news.

Got Gold?
ROTFLMAO!!
:D

[Baa_Baa]

quote:Originally posted by Abdab

O Planet of the Apes there are fundamental differences between the gold market and other commodities in that gold is not consumed. So the only reason gold has any value is due to hoarding; if people follow Stolwykos' example and not actually hoard gold (or try and sell their hoarding) then the gold price collapses.

Gold is unique in that it has virtually no intrinsic value, only ornamental/sentimental value.

Individuals don't need to hoard other metals/commodities since they are used in industry.


Whoa there Yabadabadoo; when you're in a hole, stop digging. Then again, I commend you for a unique and independent thought, unlike our sponsor. ;)

All the best
BAA

[stolwyk]

China Breaks Up Exclusive Relationship with U.S. Dollar; Seeks Multiple Partners
http://news.goldseek.com/GoldSeeker/1121985130.php

Revaluation: 2% $US
Current: USD 88.84 Oil 57.34 Euro 1.216 Gold 425.7 Silver 7.1 DOW: -0.6%



THe Daily Resource:
http://www.kitcocasey.com/displayArticle.php?id=213


The "Real" Boom
http://news.goldseek.com/DailyReckoning/1121981723.php



WHO SAYS NO ONE RINGS A BELL?
by Peter Schiff
http://www.financialsense.com/fsu/editorials/schiff/2005/0721.html

[stolwyk]

THE US ECONOMY IS HELD IN A VICE

G. Stolwyk

The US is on a rollercoaster with passengers who have a great time but don't know what is waiting for them: some wheel bearing runs red hot, a wheel from the front carriage breaks off and the carriages fall on the ground, resulting in a massive number of casualties, as a collapsed economy normally does cause.

The country like others is in a no-win situation, no matter how the economy progresses. The US President is unwilling to apply some much needed corrections to the economy for fear of a depression.

On the surface, the economy is "improving" but sucks in more imports and hence increases the Current Account Deficit to an estimated $US650-$700 mill this year, about 6.4% of GDP (Normally at 5% of GDP, the warning bells sound).

The Budget deficit (Possibly $325 bill. for 2005) falls at the same time because of more tax being levied including that from construction activities. The US treasury estimated that this year, the Budget deficit will be $100 bill. less.

Unfortunately, the financing of the Iraqi and Afghan war activities, costing some $90 bill is not included. Overall, the Current Account presents the biggest problem to be financed. Both China and Japan hold much US treasuries and dollar reserves and China will have some political clout because of that.

Should any Chinese revaluation be meaningful then there is no need for China to support the USD that much resulting in more negative consequences for the USA including interest rate rises.

US Exports of goods is barely 9% of GDP, savings about 1% and consumption is 79% of GDP. China saves 40% of GDP and would thus import few consumers' goods.

This economic picture of the US is completely lopsided and very dangerous in a recession situation, because the deficits are sky high, exports very low and taxes to be raised will be much less as consumption, the mainstay of the economy declines. Consumption will be even less if China revalued in a meaningful manner.

Outsourcing shifts capital and increasingly, research to Asian countries. This capital is not being used for investment in the US and the flow-on effects on the US economy must be increasingly negative as far as it concerns the employment of US scientists and labour while the velocity of money will be less. Universities and other schools of learning will suffer.

It gets worse because much needed capital formation is diverted to the construction of houses and speculation. Increasing house prices enable owners to extract capital to be used for buying other properties or for consumption.

At the moment, this employs much labour, uses much capital and manufactured goods. If this construction were to be heavily cut back then the effect on the GDP will be considerable apart from houses losing value:

"As Eric Fry warns in Rude Awakening (www.dailyreckoning.com) …"housing-related industries have produced a whopping 43% of the nation's total net sector employment growth… any slackening of real estate activity would slow employment growth in the industry.

Indeed, this massive job-creator could become a job-destroyer." Some analysts even credit the housing asset bubble with adding as much as 2% to overall GDP. Clearly then, a collapse in house prices would severely impact upon economic growth".

Comment: Once overbuilding stops or yields are too low,then any further easy credit won't be effective because of fear that house prices will decline (Liquidity trap).


16 June: The Economist: "A study by the National Association of Realtors (NAR) found that 23% of all American houses bought in 2004 were for investment, not owner-occupation. Another 13% were bought as second homes".

"New, riskier forms of mortgage finance also allow buyers to borrow more. According to the NAR, 42% of all first-time buyers and 25% of all buyers made no down-payment on their home purchase last year. Indeed, homebuyers can get 105% loans to cover buying costs. And, increasingly, little or no documentation of a borrower's assets, employment and income is requ

[dingdong]

quote:Originally posted by Baa_Baa

[quote]Whoa there Yabadabadoo; when you're in a hole, stop digging.


O Tinsel of the Solar System the only hole I am digging is for you to hoard your gold. Despite the RMB revaluation gold only went up in USD, not in real money (still below 350 Euros).

[Mick100]

quote:Originally posted by Abdab


quote:Originally posted by Baa_Baa

[quote]Whoa there Yabadabadoo; when you're in a hole, stop digging.


O Tinsel of the Solar System the only hole I am digging is for you to hoard your gold. Despite the RMB revaluation gold only went up in USD, not in real money (still below 350 Euros).


So your implying that the Euro is real money or was that statement just another joke[8D]

,

[dingdong]

quote:Originally posted by Mick100

So your implying that the Euro is real money or was that statement just another joke[8D]


We are unworthy of your humour attempt, O Hound of the Baskervilles. You might be ight, but I note gold also went nowhere in Swiss Francs, Chinese RMB, Mauratanian Ouguiyas, Swazilandi Lilangenis or Vietnamese Dongs.

[tricha]

Someone please answer these questions

1 - How many tons of gold is held by Govts around the world.[?][?][?]

2 - How many millions of ounces of gold is ready to be mined and would be if the price goes up.[?][?][?]

3 - What makes the world go around.[?][?][?]

4 - What happens when oil runs out[?][?][?]

5 - Will Uranium replace oil as fuel [?][?][?]

5 - Will gold replace oil as fuel[?][?][?]

6 - Is gold recycled [?][?][?]

Please answer these questions

Have a nice Day :):)

[dingdong]

1. Doesn't matter, we are all unworthy of gold.
2. Doesn't matter, we are all unworthy of gold.
3. Gold.
4. Doesn't matter, we are all unworthy of gold.
5. Doesn't matter, we are all unworthy of gold.
6. Doesn't matter, we are all unworthy of gold.

[stolwyk]

COMEX gold ends lower on profit taking, rollover
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh2255 6_2005-07-22_18-54-55_n22532116_newsml

Current: USD 89.52 (+0.68) Euro 1.206 Gold 425.1 Silver 7.09 Oil 58.65 Dow: +0.2%


"The central bank strengthened the exchange rate to 8.11 yuan to the dollar, from 8.28 yuan.
"But it is unlikely to further adjust the exchange rate in the short term, Huang said":
http://www2.chinadaily.com.cn/english/doc/2005-07/23/content_462661.htm


COT GOLD
http://news.goldseek.com/COT/1122064425.php

COT SILVER
http://news.silverseek.com/COT/1122060904.php

PAUL VAN EEDEN:
China revalues the renminbi
http://www.paulvaneeden.com/displayArticle.php?articleId=121

______________________________________

Gold Goes Chinese and Other Clichés
http://www.gold-eagle.com/editorials_05/demeritt072205.html

Extract:
"But give China credit for being subtler than that. If, instead of making a higher gold reserve its official stated policy, China liberalized gold ownership laws so its citizens could load up on the precious metal, the government would have access to a large, latent gold reserve…yet not officially undermine the dollar.

One of China's state-run newspapers isn't bashful about outing this slick tactic. "Encouraging civilian reserves of gold has strategic significance and economic value. In the event of an economic crisis, the state could buy gold from residents and use it to pay back foreign debt," China's Financial News quietly reported.

[K9]

[quote]Originally posted by stolwyk

THE US ECONOMY IS HELD IN A VICE

G. Stolwyk

Gerry, shouldn't this be on your "future of the US thread"??nice title btw

The US is on a rollercoaster with passengers who have a great time but don't know what is waiting for them: some wheel bearing runs red hot, a wheel from the front carriage breaks off and the carriages fall on the ground, resulting in a massive number of casualties, as a collapsed economy normally does cause.

I am still waiting for the end of Bush's current term for it to be a third rate country, even behind Brazil (your own words Stolli):D

The country like others is in a no-win situation, no matter how the economy progresses. The US President is unwilling to apply some much needed corrections to the economy for fear of a depression.

You have presented the symtoms...what are the corrections?

It gets worse because much needed capital formation is diverted to the construction of houses and speculation. Increasing house prices enable owners to extract capital to be used for buying other properties or for consumption.
At the moment, this employs much labour, uses much capital and manufactured goods. If this construction were to be heavily cut back then the effect on the GDP will be considerable apart from houses losing value:

oh dear Stolwyk...you should have done Economics 101 years ago...is this some kind of joke? That reads like a 19 yr olds first assignment.

you seem to be drifting off into obscurity[|)][|)][|)][|)][|)][|)]

why are you hiding over here with your US glooming?

you ol buddy C9

[stolwyk]

FINANCIAL SENSE NEWSHOUR
http://www.netcastdaily.com/fsnewshour.htm

John Williams will be very interesting.



U.S. Bonds Still Seem Good Bet for Foreigners
http://www.latimes.com/business/investing/la-fi-risk23jul23,1,6710220.story?coll=la-headlines-business-invest&ctrack=1&cset=true


End of the US-China honeymoon
By Bonnie S Glaser and Jane Skanderup
http://atimes.com/atimes/China/GG21Ad08.html



21st Century Gold Rush
http://www.gold-eagle.com/editorials_05/baltin072205.html

Extract:
"Some examples were: Lion Mines - 1975 price $0.07 / 1980 price $380 YES that's right it's not a misprint you could of bought 10,000 shares of lion mines in 1975 for around $700 dollars and if you held on for the whole 5 years January 1980 you could have netted a total profit of around $3,799,300. Not bad hey!!!!! A few others were Bankeno - 1975 price $1.25 / 1980 price $430. Wharf Resources - 1975 price $0.40 / 1980 price $560. Steep Rock - 1975 price $.93 / 1980 price $440 Mineral Resources - 1975 price $.60 / 1980 price $415 . Azure Resources - 1975 price $0.05 / 1980 price $109".

[stolwyk]

Official: Yuan won't be fully convertible for 5 years
http://www2.chinadaily.com.cn/english/doc/2005-07/25/content_463100.htm


Greenspan trashes yuan consensus
http://www.mineweb.net/columns/curve_ball/454417.htm

[stolwyk]

NY gold ends firmer but range-bound, rollover busy
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh6712 3_2005-07-25_18-37-55_n25521276_newsml


Current: USD 89.6 OIl 59.0 Euro 1.20 Gold 424.7 Silver 7.1 Dow -0.5



Forest: The Daily Resource
http://www.kitcocasey.com/displayArticle.php?id=215


Crude Oil Is Steady After Report of Slowing Chinese Imports
http://www.bloomberg.com/apps/news?pid=10000086&sid=apzhHE5CIIIU&refer=latin_america


Investors choose global over US funds
http://news.yahoo.com/s/ft/20050724/bs_ft/fto072420051613594000;_ylt=AubiPAlogpCylSCp7dlIpir 2ULEF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl


CHINA:
From Revolution to Revaluation
http://www.financialsense.com/editorials/wallenwein/2005/0725.html

[stolwyk]

Gold Seeker Closing Report – No Further Yuan Revaluation?
http://news.goldseek.com/GoldSeeker/1122413713.php


Current: USD 89.9 Oil 58.9 Euro 1.20 Gold 423.1 Silver 6.98 Dow -0.2

COMEX gold closes at 1-week low as funds bail out
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh9443 3_2005-07-26_19-09-20_n26535716_newsml


Protecting Your Savings From Inflation
http://www.gold-eagle.com/editorials_05/barisheff072505.html


Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=217

[stolwyk]

Gold Seeker Closing Report – Strong Durable Orders Fail to Inspire Dollar
http://news.goldseek.com/GoldSeeker/1122501618.php

Current: USD 89.6 Oil 59.1 Gold 424.5 Silver 7.02 DOW +0.5%


Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=219


NY gold settles higher on spec buying
http://www.gold-eagle.com/dmr3.php


Never mind the price, gold still dazzles Asia
http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-26T080207Z_01_SP236054_RTRIDST_0_PICKS-MINERALS-GOLD-DC.XML


Due Diligence 101 (Canada)
http://www.kitcocasey.com/displayArticle.php?id=220

[stolwyk]

Gold closes near one-month highs
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B200943F1%2D2C2C%2D498F%2D953B%2DD9324F9A49 96%7D

Current: USD 89.3 Euro 1.214 Gold 427.4 Silver 7.17 Oil 60.36

Senators renew China tariff threat if yuan inaction
http://today.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20 050728:MTFH49710_2005-07-28_18-13-05_N28170642


China warns speculators, sees economy staying firm
http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-07-27T064712Z_01_PEK353460_RTRIDST_0_PICKS-ECONOMY-CHINA-DC.XML


Schiff: CHINA'S PEG WAS AMERICA'S CRUTCH
http://www.financialsense.com/fsu/editorials/schiff/2005/0728.html

++++++++++++++++++++++++++++++

Forest: Resources
http://www.kitcocasey.com/displayArticle.php?id=221

Extract:
"Reuters reported yesterday that as many as 7,000 Peruvians are marching on the Rio Blanco copper deposit in the northern part of the country.

The group apparently plans to attack facilities there and drive out the owner, British mining firm Monterrico Metals. "These people are left-wing radicals trying to whip up trouble. They're take advantage of poorly-educated farmers, telling them we're mining diamonds and gold and that we're damaging the environment," said Andrew Bristow, head of operations for the company.

Monterrico is contemplating evacuating 120 employees from the site.

[stolwyk]

Gold Seeker Closing Report – Gold and Silver at 1 Month Highs
http://news.goldseek.com/GoldSeeker/1122674338.php

Current: USD 89.23 Euro 1.217 Gold 429.4 Silver 7.19 Oil 60.57


Geopolitical Silver
http://www.gold-eagle.com/gold_digest_05/wright072905.html


COT Gold Report:
http://news.goldseek.com/COT/1122669333.php

COT Silver report:
http://news.silverseek.com/COT/1122665825.php


India - The Next Big Player
http://news.goldseek.com/MillenniumWaveAdvisors/1122661696.php

++++++++++++++++++++++++++++++++++++++++

PUPLAVA: STORMWATCH UPDATE

THE DAY AFTER TOMORROW
what was, what is and what will be

Part 3: The Great Unraveling

http://www.financialsense.com/stormwatch/2005/0729.html

[stolwyk]

WHO WANTS A DEPRESSION?

G. Stolwyk

I think one needs to look at the Global Economy as if it is a slow-motion unraveling show.

Nobody wants a depression, hence the manipulated data and positive news issued by more or less thought controlled main media.

China can't afford one as this could cause violent upheavals in the cities where some good money is being earned now. It is only at the start of what it is trying to achieve and certainly would get hard hit in any depression. It exports some 30% to the US (35-40% of this is produced by factories owned by foreigners).
They can't afford to lose those customers in a depression.

Their savings rate is about 40% and their economy is geared up for exports. Apart from importing commodities, they could-given time- virtually produce everything they need, themselves.

The US has been manipulating the GDP and the CPI indices for quite some time so that the issued infation rate of 2.5% this year will in fact be about 6% (Williams). Hence the interest rate rises. (If they say there is no inflation then there is no need to raise interest rates). Williams estimates that the true GDP is about flat.

The attention is not being drawn to any negative event: the cost of the war in Iraq and troops in Afghanistan are not part of the Budget Deficit but instead are quietly added to the overall debt. Conditional sales of Boeing planes, although not yet delivered, are added to the Overseas trade data instead of being withheld till the planes are delivered.

US economists and others working for many Wall street firms and main communication channels have been issued with rosy glasses. No jobs for them who don't want to wear them.

The problem is that consumption is a major contributor to the GDP (73%) and in turn it causes the Current Account to rise substantially each year. Exports are only 9% of GDP. Savings are virtually nil. A good example of an economy with massive structural problems due to misallocation of capital:

The "Economist", 16 June 2005: Over the past four years, consumer spending and residential construction have together accounted for 90% of the total growth in GDP. And over two-fifths of all private-sector jobs created since 2001 have been in housing-related sectors, such as construction, real estate and mortgage broking.


The US obviously can't afford a strong recession as it has an ever increasing masssive debt load to service and it will also incur heavy unemployment. Much less tax will come in and it will print money instead to pay for it. The other countries won't be able to finance much of the US debt as they have less incomes and in some cases are printing money as well to finance their own debt.

That makes the situation in the US worse as they need to monetize a lot more debt. It would likely result in super inflation which in effect will pulverize much debt. That would be the only positive in a very bad situation. Much Citizens' debt will disappear as well at the same time. The middle classes and others will suffer, while many well-to-do citizens will have assets or currencies abroad in safe locations. The depression will start.

Gold, if held by citizens of many countries may well be called in by the Governments. Some will hold Gold overseas in a safe location. Gold Stocks were not touched in the Great Depression and these stock prices ran riot. The US dollar will be one of the currencies which will get a hammering and those with much better currencies or exporters will be able to buy US assets for a song.

Tradewars will reign supreme and the WTO won't be able to keep the trading partners honest.

In times like those, the EEC could well fall apart as it sofar has not reached an irreversable stage and different States may well have their narrow self interest in mind and act accordingly.

The big question will be how the currencies will survive. The Far East, Opec, Russia and some S. American countries may decide that the US dollar, once shaken down by the hyperinflation is not anymore important and could rearrange their basket o

[stolwyk]

The Fallacy of International Comparisons
Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html


FINANCIAL SENSE NEWSHOUR
http://www.netcastdaily.com/fsnewshour.htm


Cutting back on the deficit:
Pentagon to give up bases in Germany
http://news.moneycentral.msn.com/ticker/article.asp?feed=FT&Date=20050730&ID=5005194


GM finance arm warns it could cut lending
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=FT&Date=20050728&ID=4997701

[stolwyk]

Gold Seeker Closing Report – Oil Makes New Record Highs, Metals End Higher
http://news.goldseek.com/GoldSeeker/1122933309.php

Current: USD 88.7 Euro 1.219 Gold 431.3 Silver 7.25 oil 61.54


Dollar Declines After IMF Says the U.S. Currency Is Overvalued
http://www.bloomberg.com/apps/news?pid=10000101&sid=ahTSIWbY8ToA&refer=japan

China battling renewed currency speculation despite dropping peg
http://news.yahoo.com/s/afp/20050731/ts_afp/chinaforexrevaluefloatpegyuan_050731042030;_ylt=Al wLMONecch7jqTWiUG92TumOrgF;_ylu=X3oDMTBiMW04NW9mBH NlYwMlJVRPUCUl


70% of China's products to be in oversupply
http://www.chinadaily.com.cn/english/doc/2005-08/01/content_465263.htm


++++++++++++++++++++++++++++++++++++++

Forest: Resources:
http://www.kitcocasey.com/displayArticle.php?id=226

Extract:
"Not helping matters for the dollar, the International Monetary Fund said Friday that the US currency is overpriced.

In its latest annual report on the American economy, the IMF notes that the current level of the buck “remains above that necessary” to close the current-account deficit. Currently, the buck is trading at $1.2172 under the euro".

Comment: That reminds me of that craze "How low can you go" where one had to pass below a lowered horizontal stick.


"Also boosting the precious metals were reports that China may look to buy more bullion. According to US Global Investors, Shanghai Gold Exchange chairman Shen Xiangrong told newswires last week that China could reduce its foreign exchange risk by diversifying into gold and oil. He also predicted that Chinese gold consumption will rise 20% this year to near 12.86 million ounces".

[stolwyk]

Gold Seeker Closing Report – Oil & Copper Hit Record Highs
http://news.goldseek.com/GoldSeeker/1123019155.php

Current: USD 88.87 Euro 1.216 Oil 61.96 Gold 430.9 Silver 7.2


U.S. Personal Spending Rises 0.8%; Incomes Rise 0.5%
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a2nD1qFahhew&refer=home


Tensions remain among Saudi royals
http://news.bbc.co.uk/2/hi/middle_east/4735505.stm

The Daily Resource - 8/2/2005
http://www.kitcocasey.com/displayArticle.php?id=228
"Silver also climbed steadily, adding as much as 8 cents to a current $7.26/oz. Elsewhere in precious metals, platinum gained nearly $10 to break through the $900/oz mark. Currently it’s selling for $901. Traders reported that the metal is being boosted by increased Asian buying following the revaluation of the Chinese yuan. The stronger currency makes such purchases more affordable for buyers"

[stolwyk]

Gold Seeker Closing Report – Mining Shares Surge Over 4%
http://news.goldseek.com/GoldSeeker/1123105013.php


Euro 1.233 USD 87.85 (-0.79) Gold 436.3 Silver 7.25 Oil 60.83 DOW: +0.13

Gold futures top $440 an ounce
Prices at highest in 5 weeks; indexes at 4-month high
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B2A7A83E6%2D3B5A%2D4C01%2DA132%2D75E817371A CC%7D


SA: 80 000 gold miners to go on strike
http://business.iafrica.com/news/468331.htm

[stolwyk]

Gold Seeker Closing Report – Gold Hits 5-Week Highs; Oil Near Record, Markets Await Payroll Data
http://news.goldseek.com/GoldSeeker/1123191814.php


Current: USD 87.6 Euro 1.238 Gold 437.6 Silver 7.2 Oil 61.63


by Paul van Eeden
Did the gold price really increase this week?
http://www.paulvaneeden.com/commentary.php


Gold Rises to Five-Week High as Euro Climbs Against Dollar
http://www.bloomberg.com/apps/news?pid=10000081&sid=ag7i8pden_W4&refer=australia


OIL: OPEC output rises to highest since 1979
http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-08-04T080203Z_01_L04687662_RTRIDST_0_BUSINESS-ENERGY-OPEC-OUTPUT-DC.XML

___________________________________

Forest: Resources:
http://www.kitcocasey.com/displayArticle.php?id=230

London’s Daily Telegraph reported that OPEC nations and CIS states are buying increasing amounts of euros with their growing oil revenues. Lorenzo Codogno, chief European economist for Bank of America, told the paper, “A strong oil price was correlated with a strong dollar in the past but now it's the other way around. Oil revenue is being spent more and more in Europe.” Marketwatch also reported “rumors” that Saudi Arabia and Kuwait have upped their euro purchases.

[stolwyk]

Gold Seeker Closing Report – Strong Payrolls Hold Back Markets
http://news.goldseek.com/GoldSeeker/1123278110.php

Current: USD 87.95 Oil 62.31 Gold 436.6 Silver 7.11


Baltic Dry Index – Troubled Waters Ahead?
http://www.kitco.com/ind/Downs/aug042005.html


Gold Cot report
http://news.goldseek.com/COT/1123273996.php

Silver Cot Report
http://news.silverseek.com/COT/1123270598.php


The Daily Resource - 8/5/2005
http://www.kitcocasey.com/displayArticle.php?id=234

[stolwyk]

GOLD: IS $US500/OUNCE TOO HIGH?

G. Stolwyk

Yes, say the FED and Central Banks, who with the $USD would feel really exposed should this occur, because they would make large losses on their USD holdings.

Bernanke would agree also because otherwise it would prove beyond any doubt that his helicopter money was one big stunt designed to delay the inevitable.

However, most don't need that proof as they have seen the results.

No, says Buffet who is still waiting for the big payoff after his bet on the dollar.

No, says OPEC who feel that after having taken advice, Gold has its place as security and Insurance.

China is too preoccupied and leaves investment of Gold to its citizens. This way, it doesn't need a big reserve itself but can call back the Gold from the savers in an emergency.

It may yet get more closely involved but at the moment doesn't want to damage the USD without a good reason as the US lays the golden eggs and China doesn't want to dislocate their trade with them.

For this reason, it still holds large USD reserves and investment in Bonds, although it may not increase those.

Another good reason not to revalue the yuan too much.

Only when it feels that it is economically strong enough, may it gradually loosen its ties. That should take some time as most Asians are heavy savers and unlike the US are not meaningfull consumers at this stage.

The Indians who capture 18% of the gold supply obviously like a low Gold price but they are doing very wel as it is; after all, inflation is world wide and the Gold price has a problem keeping up with it.

Dubai, the latest heavy gold consumer and manufacturer serves the tourist well and has become a regional centre. Its importance is rapidly increasing.

The South Africans certainly don't think that $500 is too much. Its Rand and heavy costs including power curtail production and given time, North- and Middle Africa could become more important.

If the massive strike will take place then it stands to lose some 10% or more of production depending how long the strike takes.

That of course means that the world's production will be down this year, more so as the mayors are not replenishing their reserves fast enough.

Some have large cash assets, eg Goldcorp has $US400 mill cash as well as $US500 mill as standbuy. I am wondering about them taking a stake in NCM, after all, Goldcorp's CEO Telfer could find it useful to be associated with NCM's Telfer project.

And if there is anybody who knows something about value and is patient, it is Telfer.

The producers also want a much higher Gold price of course, but they may also have to pay more for a takeover.

The prospective miners are having a hard time with costs having risen some 30-40% in the past 12 months and some had to defer their projects because of high capital costs.

So, a $500 Gold price is not too high at all, taking into account the massive inflation having taken place in the production of precious metals and commodities.

The well connected explorers still get their drilling machines although they will pay more. Unfortunately, there is such a shortage of drills due to the commodity boom that contract prices have run sky high.

Many newbees can't afford those and even if they could, they would just get one drill instead of say 3 wanted. And then there is the waiting time.

So, the Gold price hasn't kept up with the over all increase in Miners's costs of which energy is an important one.

The patient investor certainly wants to see gold cut loose from all currencies and that requires a price in the vicinity of $470-$500, I believe.

This year production will be down, demand will be up and that alone ought to produce a good Gold price.

Wait and see.

[dingdong]

quote:Originally posted by stolwykos

GOLD: IS $US50/OUNCE TOO HIGH?

G. Stolwykos

Yes


Sensational gold ramp today from an invigorated Stolwykos in top form. The best for weeks, it fair dinkum had the lot - gross exaggerations, scaremongering, rampant speculation, half truths, vintage Stolwykos there for you.

[dingdong]

quote:Originally posted by stolwykos

GOLD: IS $US5/OUNCE TOO HIGH?

G. Stolwykos

blah blah ramp ramp

No, says OPEC who feel that after having taken advice, Gold has its place as security and Insurance.

Conveniently not mentioning the Arabs aren't buying gold, they're buying Euros!

Blah blah mindless claptrap

after all, inflation is world wide and the Gold price has a problem keeping up with it.

gold can't even keep up with 3% inflation because there is/will be too much of it around

If the massive strike will take place then it stands to lose some 10% or more of production depending how long the strike takes.

That of course means that the world's production will be down this year, more so as the mayors are not replenishing their reserves fast enough.

central banks aren't replenishing, their reserves, they're selling


And if there is anybody who knows something about value and is patient, it is Telfer.

I'm not surprised, it's taking forever to get any decent gold production!

The producers also want a much higher Gold price of course, but they may also have to pay more for a takeover.

There's already a huge (and unwarranted) takeover premium on NCM. How else can you explain the sky high PE?

The prospective miners are having a hard time with costs having risen some 30-40% in the past 12 months and some had to defer their projects because of high capital costs.

Oh those poor miners! You of course fail to mention that high capital costs hasn't stopped profitable mining of every other element known to man in this commodities boom

So, a $500 Gold price is not too high at all, taking into account the massive inflation having taken place in the production of precious metals and commodities.

Except for gold (in real money)

So, the Gold price hasn't kept up with the over all increase in Miners's costs of which energy is an important one.

The patient investor certainly wants to see gold cut loose from all currencies and that requires a price in the vicinity of $470-$500, I believe.

Unfortunately that's not going to happen while it is in the interests of the largest hoarders of gold to maintain a soft peg to real money currency. Of course it might cut loose and plummet downwards.

This year production will be down, demand will be up and that alone ought to produce a good Gold price.

And the slack is taken up by the central bankers

Wait and see.

Why bother. Plenty of other more profitable commodities out there

[stolwyk]

Abdab, the real Goldbug!!!:

http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=22124

Yes Abdab, your time may yet come. Keep on fighting, Gold lover!

So you lost cash on Gold stocks and have since decided to offer your stalking comments on this thread.

Gerry

[dingdong]

quote:Originally posted by stolwyk

So you lost cash on Gold stocks and have since decided to offer your stalking comments on this thread.

Gerry


That's the spirit O Stolwykos, denigrate those who have an alternative view to yours. Showing your true colours, all with a golden hue (apart from your rose-tinted glasses).