Currencies, Gold, Silver and Oil

[Mick100]

quote:Originally posted by vicmackay

Gold is now officially stuffed. Give it two months and it will be down under $400.

The bubble has burst.


Says the chap who was buying CAZ after they lost their rights to mine shovelena.
,

[tricha]

There u go Mr Mackay or who ever u r, sell all.:D
and put it into $US, I mean that's what u r saying.


US$: Revolt, Downgrade & Disorder

By Jim Willie CB

May 18, 2006

www.GoldenJackass.com



For specific detailed analysis of the Gold, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and Fed monetary policy, see instructions for subscription to my newsletter research reports, which include stock recommendations positioned to rise in the commodity bull market. Articles in this series are promotional.

Anyone who cannot detect rumblings with more magnitude than early volcanic tremors is brain dead, plain and simple. For a full year, the USDollar enjoyed a sizeable counter-trend bounce. It relieved the long-term oversold condition. In usual times, in typical markets, such a period of time would offer the fundamentals an opportunity to catch up, for the remedy to work its medicine, for the condition to heal itself. In the case of the USDollar, the trade deficit worsened. The Jan2005 trade deficit was a grandiose $58.3 billion, pretty doggone rotten. By Jan2006, a full twelve months for the “fix” to take hold, to work through the system, the trade deficit had ballooned to a shocking, yawning $68.6 billion, as nothing but more metastasis flowed their the body economic. Our Pied Piper Sir Alan Greenspan, who skipped town before the upcoming crises, much like Robert Rubin skipped town in June2000, proclaimed the lame line that financed deficits were a sign of flexibility. Plenty of flexibility is manifested in a bank overdraft on a stretched credit line awaiting default also. The Maestro and GoldBugs should be aware, that a revolt, an insurrection, a mutiny is in progress. The greenback is being rejected, perhaps as much as the USGovt leadership is getting a global vote of “NO CONFIDENCE.” Polls internal to US shores show low confidence in our leadership trio, in parallel.

THE HEGEMON, NOT POKEY-MON

In recent months a new phenomenon is unmistakable, dangerous, ominous, and so real. The world is not only sensing the unfixable nature of all things USDollar-based, it has begun to create alliances to protect itself from the US hegemon. No longer does the United States rely upon innovation, investment, and work, but rather upon attempts at “full spectrum dominance,” deceptive coercion, and blatant inflation. Refer not to the pocket monster, aka pokey-mon. The hegemon is the dominant big guy who plays dirty, throws his weight around, ignores the law, and dares a reaction. No, he even retaliates in the face of warranted protective response. For those who do not understand this “hegemon” term, think of the nastiest evilest wretchedest bully who didn’t just steal school lunch money, but who would kidnap your daughter to ensure debt payment in shylock setting. Think of dark shadowy men who threaten and deploy the most sinister of weapons against a perceived enemy. From the other side of the chess board, recall Georgi Markov, a Bulgarian writer thought to inspire a dissident movement against the Soviets from London. He was assassinated by a KGB agent using an implanted ricin poison capsule by means of an umbrella on a city street sidewalk.

Think of installing tyrants in foreign lands, rich in resources, for the unexpressed unsanctioned purpose of securing contracts for commodity supply to fulfill the needs of the insatiable USEconomy. Think of criminal access granted to gold miners for leasing and selling the US national gold treasure, at nil interest rate for years on end, and zippo accountability before the people’s representative in Congress. Think of the IMF and pressured tactics to raise interest rates in Argentina, after putting that nation’s accumulated deficits on an installment loan, then warning aristocrats to vacate their bank accounts into New York City accounts before bank closures and confiscation of accounts. My sister-in-law was such a victim. Think of heavy pressure leaned upon the Bank of Japan, to comply and to supply the West with 0% money in ret

[vicmackay]

Tricha

Why do you post this stuff? Obviously he is going to say that because he is a gold trader. I am neutral so it is best to believe what I am saying!

[kgee]

For those who like more reasons to be bullish on gold check out
http://www.moneyandmarkets.com/press.asp?rls_id=287&cat_id=6&

[winner69]

quote:Originally posted by Mick100


quote:Originally posted by vicmackay

Gold is now officially stuffed. Give it two months and it will be down under $400.

The bubble has burst.


Says the chap who was buying CAZ after they lost their rights to mine shovelena.
,


I believe CAZ is now 30 something .... even lower than the day everybody bailed

[vicmackay]

quote:Originally posted by kgee

For those who like more reasons to be bullish on gold check out
http://www.moneyandmarkets.com/press.asp?rls_id=287&cat_id=6&


This has already been posted about 10 times over the last couple of days - boring!

[backtobasics]

Gold shares crashing today. Fools! (Gold)

[tricha]

Now if this is happening in Germany and the Germans are being honest, it's happening in the rest of the world.

Who could trust the US to be honest[?][?][?] Only Backtobasics and VicMackay who are out there proping up the $US, buying some I hope.

Inflation rules at the moment and cash is trash, we have a correction and all the sheep are running, Bah [8D]

German producer prices up again

Germany companies have been hit by higher energy prices
Germany has seen the fastest increase in producer prices for nearly 24 years, adding to fears about inflationary pressures in Europe's biggest economy.
Prices paid by German firms for industrial products went up 6.1% compared with a year earlier. On a monthly basis, prices rose 1%.

Big rises in energy prices and raw material costs are largely to blame.

"Industry consumers had to fork out substantially more [for energy]," said the Federal Statistics Office.

Energy prices increased by 20.4% over the year, or 2.3% in April compared with the previous month.

In particular, it was natural gas which saw dramatic increases compared with April 2005.

There is a risk that higher energy prices could be passed on by producers to consumers, making final products more expensive.

Market analysts believe the figures make it more likely that the European Central Bank will raise interest rates next month.

"The data today are another part of the puzzle for the European Central Bank, which is expected to raise the interest rate by 25 basis points in June," said Klaus Schruefer at SEB bank.

[backtobasics]

quote:Originally posted by tricha


Who could trust the US to be honest[?][?][?]




How can seriously doubt the integrity of the USA?! John Howard would not have joined forces with this great country if they were not honest in everything they say and do.

[tricha]

Inflation on the rampage, what does that mean [?][?][?][?]

Gold Declines in Asia on Speculation Five-Year Rally Has Ended
May 22 (Bloomberg) -- Gold in Asia fell on speculation that a five-year rally in the metal has ended as investors deemed its rise to the highest level in 26 years was overdone.

Gold futures in New York fell 7.6 percent last week, their biggest decline is almost six years. The drop erased $900 million of market value for the StreetTracks Gold Trust, an exchange-traded fund linked to the price of bullion. Gold had rallied 41 percent this year to $732, the highest since 1980.

``The consensus is that the bubble has burst,'' Nicholas Chung, a general manager at Tong Yang Futures Trading Co.'s international business team said by phone in Seoul today. ``Spot gold may fall to $650 today.''

Gold for immediate delivery in Asia fell as much as $4.20, or 0.6 percent, to $653.40 an ounce. The metal dropped 8 percent last week as the dollar rose versus the euro and yen for the first time in more than a month on speculation U.S. interest rates will rise further to contain inflation. Gold was down 0.5 percent at $654.30 an ounce at 11:14 a.m. Seoul time.

``The market still hasn't recovered from last Wednesday's announcement on U.S. consumer prices,'' said Chung. ``It signaled that the Fed may raise interest rates at a faster pace, increasing the value of the U.S. dollar and lowering the value of commodities.''

U.S. consumer prices rose 0.6 percent, more than the 0.5 percent increase forecast by a Bloomberg survey, the Labor Department said on May 17. The Federal Reserve, which has raised interest rates 16 straight times since June 2004, is less likely to pause its series of rate increases, Richmond Fed President Jeffrey Lacker said on May 18.

Dollar's Gain
The dollar traded at 112.10 yen at 11:11 a.m. in Tokyo from 111.68 yen in New York on May 19. Against the euro, the U.S. currency was at $1.2738 from $1.2778. The dollar rose 1.5 percent against the yen last week, the first gain in five, and 1.2 percent versus the euro, its first advance in six weeks.

Gold futures in New York fell as much as $4.40, or 0.7 percent, to $653.10 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. It was down 0.6 percent at $653.40 at 11:13 a.m. Seoul time.

Gold may fall below $650 an ounce this week, a Bloomberg survey showed. Eighteen of 36 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on May 18 and May 19 advised selling gold, which fell $54.30 to $657.50 last week in New York. Fourteen recommended buying. Four were neutral.

Before last week's sell-off, gold had climbed 34 percent over nine straight weeks on concern that inflation was accelerating, the dollar was weakening and a dispute with Iran over its nuclear program may escalate.

``Sentiment is very fragile and further weakness cannot be ruled out over the coming sessions,'' analysts at Barclays Capital said in a May 19 report.



To contact the reporter on this story:
Meeyoung Song in Seoul at msong2@bloomberg.net;
Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net
Last Updated: May 21, 2006 22:19 EDT

[backtobasics]

R.I.P Gold.

[stolwyk]

This war has been going for some time.
The IMF supposed to bring some order into it and it was thought that most states agreed that the USD should come down gradually.

Then, suddenly, from the woodwork appears the French Minister of Finance saying that the EU should'nt tolerate rapid increases in the Euro and this then declined from 1.29 to 1.27.

It is clear that Europe does'nt want a high Euro, because of loss of competition advantages.

I have been wondering for some time why the USD rose for no reason and it is possible that the USD is being bought up. It has risen today to 85.05

So, there is much self interest involved with nations running for cover if their currency rises "too fast".

The US loses exporting advantages at a higher dollar while the economy gives signs of slowing down.

Restructuring has been delayed. Waiting now for protectionism rearing its ugly head.

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

[stolwyk]

P van Eeden: Gold will go up while commodities go down

http://www.paulvaneeden.com/displayArticle.php?articleId=155

[vicmackay]

If USA invade Iran do you think that will be positive for the price of Gold?

[Bel]

Definately. It's the only thing that can save the gold bugs now.

Other than that gold bugs, i told you so :P

[jacko]

Gold has corrected as expected only it has not fallen as far as my charting predicted. I had expected a correction to $620 but it has bounced at $640 and now appears to be heading north again.

If you want in to this gold bull market here is your opportunity. I still believe gold is cheap - even in $NZ dollars.

Wait until the US dollar heads south with a vengeance. Then we will see gold start to rocket. It amazes me to read some of the naysayer posts. They have no idea and are in for a big surprise

[stolwyk]

Message to the overcommitted US homeowner:

"Be afraid. be very much afraid!"

The current approx. real 10.2% CPI/annum is too high in view of the fact that the FED interest rate is 5%. It is useless to increase interest rates by 0.25% in stages in these conditions.

(And our famous US secretary of Treasury, Snow, thinks that inflation is under control).

The talk is that the FED may indeed speed up increasing interest rates. Hence the increase in the $US for the time being.

If so, then it would be difficult to liquify the DOW and the Housing sector at the same time. Something has to give and it could well be the slowing down Housing sector, together with consumption and a decrease in the already overcooked GDP.

It was suggested that a lowering of the Oil price to $65 would be a great help. But that would only be relative to income. It may stil be too high in these conditions.

Then there is the talk about liquidity. If sentiment is negative, then it does'nt matter how much credit there is available, it won't be taken up by an already overstretched consumer.

The whole situation reminds me of the cruise ship's band playing flat out and the couples dancing while the ship is slowly sinking.

Not too difficult guessing who the Band leader is of course: Bernanke


Gerry

USD down again. The Russian announcement about trading commodities in rubles, did'nt help.

[tricha]

You guys must be reading a different book to me. Either that or the Kitco gold price is wrong.



vicmackay Posted - 21/05/2006 : 01:03:37 AM
--------------------------------------------------------------------------------
Gold is now officially stuffed. Give it two months and it will be down under $400.

The bubble has burst.
backtobasics Posted - 22/05/2006 : 5:17:54 PM
--------------------------------------------------------------------------------
R.I.P Gold.


Bel Posted - 23/05/2006 : 08:37:07 AM
--------------------------------------------------------------------------------
Definately. It's the only thing that can save the gold bugs now.

Other than that gold bugs, i told you so :P

backtobasics Posted - 22/05/2006 : 1:20:10 PM
--------------------------------------------------------------------------------
Gold shares crashing today. Fools! (Gold)

[tricha]

Hows this one to get your blood curdling - Greed or Fear[?]
Does anyone know where Gerry is [?][?]

World Markets about to Crash Together?
By Chris Laird

May 31, 2006

www.prudentsquirrel.com



Recent stock headlines include a collapsed India stock market, collapsed not just dropping. Collapsed Middle East stock markets on the order of 50%. Dropping European markets, and US markets. Very weak Japanese stocks, probably looking to crash like the Middle East and India markets because the Nikkei is/was up 50% in a year.

Very weak Chinese stocks, rapidly weakening ‘emerging’ markets because of a slowing commodities bull. Weak Russian markets. … In short, the whole world is just about to fall into a synchronized stock cascade.

Here is a typical headline, one of many these last weeks:

European sell-off continues after U.S., Asia falls
Autos, miners among decliners following steep Wall Street fall

LONDON (MarketWatch) -- European markets dropped sharply Wednesday morning, extending the week's losses and taking their cue from a steep fall in the U.S. on the back of rising oil prices and falling consumer confidence.

I offered a theory in World Speculation Dominoes that the world financial markets are all synchronized and will crash together. It appears that we are very near such an event right now.

The causes

I have written several articles with ‘stock crash alert’ in the title this year. One of the major impetuses was the imminent unwinding of the Japanese Yen carry trade. In that ten year old free money spree, Japan allowed financiers world wide to borrow Yen for a literally zero interest rate and then invest that money in world stock markets and to buy other nations bonds for about a 3% interest rate premium. The amount of borrowed Yen invested in the world’s financial markets is astounding. We are talking trillions of dollars value in Yen that has found its way into every major financial market in the world.

The US is considering a pause in its interest rate hikes of late. The interest rate differential the US holds over Japan and Europe is as much as 3%. If that differential is not maintained, trillions of dollars of US denominated financial investments are going to be unloaded on the world markets. A combination of unwinding the Yen carry trade and a serious drop in the value of the USD will just simply pull the rug out from under every major financial market that has benefited from the cheap USD and Yen.

Liquidity is being pulled from world markets as we speak. It could get really ugly in a very short time friends. There are substantial reasons for major stock collapses due to very large macro economic trends affecting both the Yen and the USD.

This is made worse by the bubble nature of world stock markets as of the last year, where many Asian markets saw gains over 50%, such as the Nikkei and Korean markets. They are/ were in stock manias. And then add the literal collapse of the Middle Eastern markets in Saudi Arabia and Kuwait….and India.

Then add emerging market weakness, and the fact that the Nikkei and the US stock markets are also definitely tipping down as we speak, and there is definitely a little panic in the winds.

To say the least.

I’m going to go out on a small limb and say we are looking right now at a gigantic world stock collapse. I don’t like writing this, I get no fun out of writing gloomy financial analyses. It is still possible that these world market drops will be forestalled, but the end is nearing now for a world financial mania that started in Japan in the early 1990’s with their ridiculous zero interest rates. As a matter of fact, the whole financial mania we are about to see collapse began in Japan in the 1980’s when they created their own stock and real estate bubbles that collapsed in the early 1990’s.

Then the US had its financial and real estate bubbles in the late 1990’s and early 2000’s. Just as late as last year, the financial manias took hold in

[tricha]

Food for thought - Gold ramper or the next best thing, where is Gerry [?][?]
The Greater Depression—an Update 6/5/06



By Doug Casey
June 5, 2006


www.KitcoCasey.com Email Article


Printer Friendly



The Greater Depression—an Update
By Doug Casey

I recently shared some updated thoughts on the prospects for a Greater Depression with readers of our International Speculator newsletter. Given the increasing levels of volatility sweeping global markets, I decided to give those thoughts a broader airing, below, if for no other reason than to help those of you in a position to rig for stormy weather get a sense of the gathering storm.

Hopefully, I’ll be wrong about what’s coming. But the way I see it, being aware and prepared follows the same basic logic as personal gun ownership: better to have one and not need it, than to need one and not have it. You get the idea.

Doug


--------------------------------------------------------------------------------

It’s been said that if you spend 15 minutes a year thinking about the economy, you’re wasting 13 minutes. That’s generally true. But as an amateur historian, I can’t help myself. And I’m forced to believe that this is a time when the subject is worth some real thought.

My view is that the longest, and certainly most important, trend in history is the ascent of man. I have little doubt that it will not only continue but accelerate. But that doesn’t mean there won’t be nasty setbacks along the way. As I have said before, possibly the best definition of a depression is a period when most people’s standard of living drops significantly. You can also define it as a period when distortions in the economy and misallocations of capital are liquidated. The distortions are almost always the result of government intervention in the economy, through things like taxes, regulation and currency inflation. Those are the factors that caused the unpleasantness that began in 1929. Since the government is exponentially more powerful and invasive today than it was in either the 1920s or the 1970s, I expect the consequences will be much worse this time around. Things could have come unglued, and almost did, back in the 1970s. I don’t see how we’ll dodge the bullet this time. Although that’s not really a good analogy, in that, for reasons we don’t have time to explore in depth, a depression is probably inevitable this time.

The only serious question in my mind is whether it will be essentially deflationary in nature, as it was the case in the U.S. in the 1930s, or inflationary like in Germany in the 1920s. My guess is the latter because the government is so much more powerful today. Or it could actually be both at once, in different sectors of the economy.

How?

Inflation could drive interest rates to 20%. This would collapse the bond and real estate markets, wiping out trillions of dollars of purchasing power—which is deflationary. Meanwhile, that same inflation doubles the cost of food and fuel. In other words, the opposite of what we’ve mostly had for the last generation, when we had “good” inflation in stocks, bonds and property, but stable or dropping prices in “cost of living” items. This time the pattern could reverse, which would be a nightmare for most people.

And as people become more focused on speculation in a generally futile attempt to stay ahead of financial chaos, they inevitably divert effort from economic production. Which will decrease the general standard of living even more.

The situation isn’t made easier by the possibility that we’re facing Peak Oil—the start of a secular decline in world oil production. Or the fact that Americans, both individually and collectively, are deeply in debt and living on the kindness of strangers. The problem with debt is that it artificially increases our standard of living. But when we pay it off, especially with interest, it reduces our standard of living in a very real way.

Wrap this economic envir

[Bel]

If you buy gold now:

-You are paying a premium
-There is little to no fundamentals to prop up the current price
-You just become part of yet another bubble.

Yes many stock markets bubbles will burst but so what? Whats unique about that? The stock markets always recover as long as your investment was sound in the first place. (i.e. fundamentals)
Buying gold now is no sure thing as as an investment it carries it's own risk. The question is, is the author of the above article generous man for giving such dire warnings or just another salesman attempting to influence the price of gold for his own benefit?

IMHO

[tricha]

Good point Bel, you could be right or u could be wrong.

I look at it like this.

1 - Was the invasion of Iraq, based on lies by the US goverment.[?]

2 -Did President Nixon remove the gold standard which was the basis behind the $US [?]
Hold up a $5 note, look at it carefully, smell it, tear it, burn it.
What exactly was it that, u had in your hand[?]
What the hell is money if u can't relate it to something physical[?]

3 - Did the US recently remove the M3 money report[?]

4 - Could you honestly trust anything the US goverment said[?]

I was the biggest gold knocker [xx(][xx(][xx(] there was on this site a year a go. But something happened around last September.
Gold actually decoupled from the US dollar.[}:)][}:)] Yeah something real had changed.

Before that the US$ would go up, gold down - $US would go down, gold up,on and on and on ...............

So now I have half my stocks as gold or oil shares. Now BEL, if u r right, what have I got to lose[?][?]
If u r wrong what have u got to lose [?][?]

Anyway I read this book about a year ago, "Who Moved My Cheese" I stated this a while ago. A very good book!

Cheers form the not so [B)][}:)]

[mark100]

I understand the reasons being cited for a higher gold price etc. I agree the the US economy has some serious problems which probably will see a lower USD. Gold is a historical hedge against this and also against inflation.

But in my simplisitc way of thinking, Gold is just a metal. Yes a paper currency is just paper but is gold any more useful? I regard oil as one of the most valuable commodities in the world. It is used to produce and distribute food and deliver a water supply.

I can't eat Gold or put it into the fuel tank of my car. Like a paper currency, it has to rely on its acceptance as a financial asset as a store of its value.

Some are predicting the demise of a paper currency. However I can't see the day where we start paying for our groceries in gold.

Now I'm not saying the price of gold won't rise above its previous high, it probably will. But I think some of the things getting written around the place are a bit extreme.

Now a question to those smarter than me - In a case of stagflation is it better to promote growth and let inflation run or contain inflation which may bring on a recession? Because the FED may have to ask themselves this question soon.

Mark

[tricha]

Mark100 is right, simplisitc way of thinking, Gold is just a metal.
But it's a dam sight harder to produce than paper.

Nortel Reports Wider First-Quarter Loss; Sales Fall in Almost Every Region

Munk Strikes Gold, Gets $293 Million as Brookfield, Blackstone Buy Trizec

Investec's Daniel Buys Gold Stocks After South Africa's Market Decline






Gold May Challenge Record on Inflation Concern, Citigroup Says
June 6 (Bloomberg) -- Gold prices may challenge record-high levels within the next three years as higher inflation prompts investors to buy the precious metal as a hedge, according to Citigroup Inc., the world's biggest financial services company.

``We have been positive on gold for three years and expect it to ratchet much, much higher over time,'' Citigroup analyst John Hill said in a June 4 report. ``We would not be surprised to see a test of the old highs of $850 an ounce.''

Bullion for immediate delivery may average $632 an ounce in 2006, compared with $445.39 last year, Hill said. The forecast is 14 percent higher than the bank's earlier prediction. Gold will average $700 next year and $750 in 2008.

The precious metal climbed to a 26-year high of $730.40 an ounce last month after the U.S. Federal Reserve signaled concern about rising prices. Fed Chairman Ben S. Bernanke said yesterday recent increases in measures of inflation ``are unwelcome'' and he will ensure the trend isn't sustained.

Gold rose to a record $850 an ounce in January 1980 when the 1979 Iranian revolution cut oil exports. In today's dollars, that price equals almost $2,100. The precious metal was trading at $635.17 at 3:06 p.m. in Sydney.

Bullion has fallen 13 percent since May 12 as funds and large speculators cut holdings after the metal rose by almost $200 an ounce from Dec. 31 to mid-May. Price movements up and down over the past 50 days are at the highest in 5 1/2 years.

Iran Stand-Off

The stand-off over Iran's nuclear program, which has pushed oil to a record on April 21 and 24, and the unrest in Iraq has fuelled price concern and may also push gold prices higher, the Citigroup analysts said.

The precious metal's 50-day volatility, a measure of how far each day's closing price deviated from the period's average closing price, was at 31.33 at 3:14 p.m. in Sydney. It rose to 31.38 on June 2, the highest since Dec. 2, 1999.

``Following the current period of volatility and instability we expect investors to refocus on the previous concerns of continuing high oil prices leading to higher inflation,'' Citigroup's Sydney-based analysts Jonathan Battershill and Brian Warner said in a June 2 report.

The higher price forecasts have led Citigroup's Hill to upgrade earnings estimates for Barrick Gold Corp., the world's biggest miner of bullion.

Shares of the Toronto-based miner may reach C$44, from Citigroup's previous target of C$40, Hill said in a June 4 report. He is keeping his ``buy'' recommendation.

Newmont, Freeport

Hill upgraded his call on Newmont Mining Corp. to ``buy'' from ``hold'' while raising his target share price for the stock to $75 from $57. Earnings per share for the world's second- biggest gold miner this year are estimated at $2.11, from $1.29, he said.

Earnings per share estimates at Freeport-McMoRan Copper & Gold Inc., which operates the world's second-biggest copper mine in Indonesia, for this year were cut 7 percent to $6.32 and its target price was reduced to $63 from $76.

Citigroup's Sydney-based analysts increased their estimates of net earnings for Australian gold mining companies such as Lihir Gold Ltd., Newcrest Mining Ltd. and Oxiana Ltd.

Battershill and Warner upgraded their target prices for Bendigo Mining Ltd. and Newcrest, while changing their recommendations for Lihir Gold and Oxiana to ``buy'' from ``hold''.



To contact the reporter on this story:
Chia-Peck Wong in Singapore at cpwong@bloomberg.net
Last Updated: June 6, 2006 01:14 EDT

[stolwyk]

Hi Guys,

I have a severe medical problem which leaves little time for writing
items. (I am having Chemo-therapy next week).

Therefore, I still post for H/Copper where I am a moderator as well.

I'll try to post now and then for this interesting thread.

Gerry

[p0ssy]

Very sorry to hear this Gerry - will look out for your always excellent, informative posts on HC. Hope things go well for you.

[Mick100]

Best of luck Gerry

[tricha]

Yeah Gerry, best of luck, this site isn't the same without you.

So please get well !

[stolwyk]

Date: 2 June--H/C: "Trouble at mill" series

The US depends heavily on oil from unfriendlly nations. If anyone locks the US out, it will decrease the flow of oil.

Also, the prescriptions to manufacture US gasoline from oil are barbaric: some 40 different types to service states.

Furthermore there is a dire shortage of refineries, in particular that type that produces gasoline from heavy sour crudes.

The US has no oil policy and it is more a lasser fair attitude which governs the Govt direction to develop one.

The Greenies control where drilling can proceed and discovery on the more sensitive lands has stopped.

California has a gas field close to the coast but it won't be allowed to be developed.

Meanwhile the oil noose is tightening: Saudi Arabia now has very friendly relations with China who has managed to drill for oil there.

The Chinese are locking in oil production and oil fields from all over the world. In Venezuela, they have taken over the drilling from Exxon who refused to pay the much higher taxes.
Orinoco Belt in Venezuela holds the promise of great oil riches:
http://www.iht.com/articles/2006/05/31/business/oil.php

They are also very active in Africa and are quite happy to pay more if that is what it takes. They have interests in Kazakstan as well.

Their latest venture is off Florida and reports say they could be drilling at an angle into US oil reserves:
http://www.americanfreepress.net/html/china_starts_oil_drilling.html

The US imports 15% of their oil from Venezuela. Constant bickering could result in less supply.

It does seem that the US has taken supply of oil for granted. No doubt, the problems associated with it require a hefty premium for oil.

Gerry
__________________________________

Date: 4 June:
A month ago, the IMF was given the task of "sorting out the currencies" by cooperation. That meeting attended by Finance ministers and the BIS showed no dissent to the proposition that the USD had to be gradually lowered. The US was silent.

The Gold bugs loved that idea as the outcome for gold if meaningful USD devaluations were to take place, would be obvious.

So, why is the USD at 84 cents instead of 80 cents by now?
1. There have been contrasting statements issued by the Administration over time. However it is clear to me they like the existing situation to continue hoping that their successors can deal with it: "Apres moi le deluge"

Forcefully pushing the dollar down would force them to take unpopular measures leading them to an "undesirable" outcome, particularly in election year.

Surprisingly, once the dollar was approaching 83 cents, the French Finance minister exclaimed that enough was enough and that the EEC should'nt tolerate any further slide of the USD at present.

So the EEC wanted to have a competing currency so as to have the advantage in trade with the USA. After much stagnation, the EEC started to bloom at last and they were not prepared to lose some of the benefits.
Immediately the USD rose. Bear in mind that the EEC could buy the USD when conditions were right.

I am confident there would have been more opposition to lowering the dollar to 80 cents but any other Central Banks did'nt show their hand. It is clear that the IMF has failed before even starting to approach members and that any talk of a gradual lowering was just that.

With such opposition, only shock treatment of the dollar is successful because it would convince States that the outcome was inevitable.

And so, some shock therapy has started beginning with some poor reports from the FED and Treasury. These show that the US economy is in decline. Ideally, some further reports will give us some indication as to the damage being done by interest rates and the Current Account-the latter on 16 June.

The week is an important one:
http://mam.econoday.com/calendar/US/EN/New_York/year/2006/month/06/day/05/daily/index.html

We are also waiting for the opening of the Russian Gold/Oil Bourse on June 8 (Trading in rubles only) and any follow-up by Iran and Venezuela

[stolwyk]

Noteworthy Quote:

"In 1900, the US started to industrialize. We were using
one barrel of oil per person per year. By 1970, we were
using 27 barrels per person.

In 1950, Japan started to industrialize. They were using 1 barrel per person. By 1970, they were using 17.

In 1965, South Korea started to industrialize. They were using one barrel per person per year. By 2000 they were using 17.

Today, China uses 1.3 barrel per person per year and India uses 0.7."

Clyde C. Harrison

[easy money]

sorry to hear about your health problems..drink plenty of green tea...

[cragga]

Good Luck Gerry, thanks for all the great info you've been providing here. This is one my favourite threads!!

Cragga

[Packersoldkidney]

Didn't realise you were crook, Gerry: good luck, and hope to see you posting back here soon.

[Cooper]

Good luck Gerry, take care.

[stolwyk]

From "Trouble at mill" series:

"USA outflanked in eurasia energy politics"
Engdahl: USA out-flanked in Eurasia energy politics?

http://www.321energy.com/editorials/engdahl/engdahl060506.html
_________________________________________

SAXENA: End of Cheap Oil!
http://www.321energy.com/editorials/saxena/saxena060706.html
______________________________________

2006 U.S. Economic Events & Analysis

http://mam.econoday.com/reports/US/EN/New_York/mba_purchase_applications/year/2006/weekly/23/index.html

Quote:
"The mortgage bankers' purchase index was little changed in the June 2 week, at a soft 395.6 vs. 395.5 in the prior week. The refinance index, down 3.8 percent at 1,356.0, continues to weaken to multi-year lows.

High interest rates are the chief reason behind both declines, with 30-year fixed mortgages averaging 6.60 percent in the week. The housing market is definitely cooling, a major element of the economic outlook".
_____________________________________

Fed, Bernanke take blistering flak
http://www.usatoday.com/money/markets/us/2006-06-06-bernanke-usat_x.htm

[stolwyk]

Bernanke to speak on Friday:
Perhaps he ought to cancel such a speaking engagement till he can sense the outcome of anything he says.

There are still a few items of news to come from the FED, this week:
http://mam.econoday.com/calendar/US/EN/New_York/year/2006/month/06/day/08/daily/index.html
________________________________

The Yen Carry Trade is DOOMED!
http://news.goldseek.com/GoldSeek/1149783071.php


Grandich: It’s Time To Jump Back in Precious Metals and Mining Shares With Both Feet Again.
http://news.goldseek.com/Grandich/1149711183.php

__________________________

THE NEXT "IT" PROJECT
by John Rubino
DollarCollapse.com
June 7, 2006

While precious metals were getting whacked again today and arguments were raging about whether this is a healthy correction or the end of the run (see the mainstream’s take in Financial Times), the Wall Street Journal gave silver investors a reason to stop worrying and start buying. In an article titled “This War Against Germs Has a Silver Lining”, the Journal notes that the consumer products industry has suddenly discovered that silver 1) kills germs without hurting people, and 2) can be added to practically anything:


“Now, silver is showing up as a bacteria-and odor-fighting material in a range of contemporary consumer products, from sports socks to washing machines. Specialty retailer Sharper Image recently introduced a line of plastic food containers infused with silver nanoparticles that are intended to keep food fresher. The boxes, priced at $69.95 for a set of 12, have drawn positive reviews at Amazon.com, which sells Sharper Image products -- including one owner enthusing about strawberries staying fresh for 14 days.

In March, South Korea 's Samsung Electronics launched a new washer in the U.S. that uses silver ions to sanitize laundry. Plank, a small Boston company that sells Yoga accessories, recently introduced Cor, a soap with silver as the main active ingredient. The company says its supplier is also developing silver-imbued shampoo and toothpaste.

About three years ago, consumer products incorporating silver as an antimicrobial ingredient -- some made using nanotechnology to bond materials at a molecular level -- took off in Asia . Now some observers believe they are poised to become big in the U.S.

'Silver nanoparticles may very well become the next 'it' product, much like antibacterial soaps that took the consumer sector by storm a decade ago,' says Marlene Bourne, president of Scottsdale, Ariz.-based Bourne Research, which specializes in emerging technologies."



What this means is that silver, already in short supply because of rising industrial demand and the voracious appetite of the new iShares Silver Trust ETF, is about to attract a new category of buyers. Another positive: Where the silver used in many industrial applications can be recycled, and the bullion now being bought and stored by the ETF can be dumped back on the market with a keystroke, silver used in consumer products is pretty much gone for good. No one will bother taking socks and shirts with silver threads to a recycling center (at anything close to today’s silver prices, at least). Instead they’ll just throw them away or donate them to the local Salvation Army. The silver built into the new generation of washing machines is gradually leached off and sent down the drain. Ditto for the silver particles in soap, shampoo and toothpaste.

These new uses for silver, in other words, take it off the market permanently. The more popular they are, the less silver there is in the world’s warehouses to satisfy investment demand. As InvestmentRarities’ Ted Butler is fond of pointing out, there’s already a looming shortage of silver sufficient to send the price into triple digits. And now the depletion rate of the world’s remaining silver is headed into overdrive. I think this answers the question of whether today's sell-off is a buying opportunity.


http://www.financialsense.com/editorials/rubino/2006/0607.html

[backtobasics]

The death of Al-Zarqawi in Iraq is real bad news for the supporters of gold. Oil price will crash, gold will follow. Suddenly the world is not at risk anymore and people will stop to smell the roses.

Bush, Blair and Howard are being vindicated. Any prospects of a bull market in gold have just been extinguished.

[Bel]

Your joking right? Are you saying that AL-Zarqawi set the price of oil and not supply and demand?

And i always thought that plebs always over reacted to irrelevant news that created only short dips in the market once people came to there senses.

Well i'll be.

[Gofish.]

Hes got to be joking, nothing is that easy. The US is still deep in the doo doo.

[tricha]

Backtobasics is not joking, he is just plain old, sh.t stirring.

[tricha]

http://www.kitco.com/ind/wiegand/jun082006.html

Is Gold Money or a Commodity?

By Roger Wiegand
June 8, 2006

www.tradertracks.com



“The U.S Dollar will be relegated to the status of being a tiny, weak puppy of gross insignificance.” -Trader Rog

The value or real worth of gold can be understood when you see a diluted U.S. Dollar sliding away at a steady clip. It is not the value of gold that is increasing it is the value of the dollar declining. A similar example is our Dow Jones Industrial Average. If the Dow remained near 11,000 for years and the dollar diminished in value over those same years, the true worth of the Dow would be lessened considerably. The more we watch the Dow, the more we feel this is its destiny; to stay stuck in the mud of 10,500 to 11,500 forever as gold travels to the moon. Why can it not drop to 3,000? It will not slip because our market controllers will manipulate its infinite levitation as long as possible. One very sharp New York hedge fund manager said, “They simply cannot let the Dow slide below 10,000. It is too important and meaningful for all nations throughout the financial world.”

The U.S. Dollar is the reserve currency for 80% of the world. Historically, dollars have been accepted anywhere. And, formerly, they were distinctly preferred over most local foreign national currencies. Now we hear stories from the primitive Chinese agrarian society “back in the hills folks” deciding our dollar is no longer a magic ticket as it was in years gone by. Astute small business people in foreign countries understand the dollar is weak and getting weaker. Many of these people live in countries having experienced paper currency implosions and are wary and frightened of a “Yankee Dollar Re-run.”

Gold Demand and Production Carefully Counted

We’ve seen incredibly elaborate reports detailing gold mine production from all over the world. Great effort is expended to count everything carefully; even the scrap. Demand reports list raw gold used for jewelry, ornamental fabrication, currency and collector coins, bullion bars in storage, and more recently the largest single sector buyer; exchange traded funds requiring bullion backing with guaranteed audits. By combining all these numbers a clear gold picture evolves.

Annual gold production is a relatively tiny amount, growing the above ground supply approximately 2% per year. Meanwhile most of the mined gold is simply hoarded by the owners. Hoarding can be hidden in jewelry, coins, unregistered bars, crushed and unprocessed concentrate heavily laden with gold stored at an operating mine. Successful gold operators often mine gold and hold it back from the smelters waiting for higher prices or as a potential production filler in case of a mining strike shutdown. Old mining leach pads contain gold deliberately stored while others have been abandoned.

Russian banks will not trade gold with each other as they distrust everyone in the business. China is rumored to hold only 500 tons of gold, but smart analysts have computed they are mining much more which moves into secured government vaulted storage. One high ranking communist let it slip the Chinese Communist Party’s Central Government has a policy of buying, mining and claiming all the foreign base and precious metals they can obtain in an effort to save the home grown domestic supplies for later production. In other words, we want yours first and we are saving ours for later.

Dollar Inverse Head and Shoulders Forecasts Mild Recovery



Weekly dollar chart signals (in top box) show dollar basing, moving sideways and preparing to rally. Middle of chart has weekly prices at 83.60 support in an upside down head and shoulders pattern. Lower box has ratio of dollar-SPX with 20 day average both moving downward in tandem. We are seeing signs of a bottom here and forecast the dollar to recover back to the 40 day moving average (blue line) at a summer term top of 88.00. During late August, expect the dollar to resume its selling especially near September.

[stolwyk]

Trouble at mill series.

Introduction:
We have the following kinds of inflation:
1. Monetary inflation-US.
This is a consequence of expanding the money supply without backing of additional goods. The artificial GDP of the US has been about 3% over a number of years, yet they increased the money supply by 7-8%. We don't know the latest numbers because M3, the measure is not anymore supplied. Sufficient monetary inflation leads to price inflation.

2. Price inflation-US.
2.1. CPI-Consumer price inflation
2.1.1 Core inflation.
This falsified FED number does'nt include energy, food. The Fed likes referring to it because it tends to be the lowest unrealistic rate of inflation.
2.1.2 CPI-Includes all.
This grossly distorted CPI when quoted at say 3% is in reality about 6% (Real CPI):
http://www.gillespieresearch.com/cgi-bin/bgn.

Based on one set of monthly data, the real CPI is running at 10% annual rate while the import pricing is now running at 22% (Based on 2 sets of data: 1.6% and 2.1% monthly)
Some of this increased import pricing will be converted into the CPI and I believe that the previously mentioned 10% could continue for some time. Inflation is worldwide so the product of this is being exported on a delayed basis to other countries including the US who is a major importer.

3. Sufficient data now point to a slowing down of the economy. Unfortunately, the true CPI (Price inflation) is increasing. Greenspan allowed the interest rate to be well below the inflation rate and the 5.25% FED rate is about 4.25% below the true inflation rate based on latest data. This has led to credit expansion and further increase of the money supply. Theoretically, money is still cheap, although there may be less takers.

Unfortunately, Bernanke who was so fond referring to the core CPI rate now has to make a painful decision:
Either keep increasing interest rates and speed up these increases so as to catch the true inflation rate or do nothing.

If he does nothing, then hyper inflation is coming closer as increasing inflation feeds upon itself assisted by inflated money supply. I believe, he can't afford to do that as his current interest rate is too far below the true CPI.

Or he will be drastically increasing interest rates and heavily damage the housing sector. It will slow the economy even more and because this sector is so important, make any stagflation worse. ( A nominal 3% GDP rate is about a real 0% growth rate-J. Williams).

The USD will fall because the backing becomes worse.

Because debt is astronomical and saving is less than NIL, it will be difficult to escape any fall-out, no matter what course is taken.

I believe that Bernanke has underestimated the delayed reaction of inflation from overseas and the outcome of increased money supply designed to make debt cheaper.

Gerry

[Kookaburra]

quote:Originally posted by stolwyk

Hi Guys,

I have a severe medical problem which leaves little time for writing
items. (I am having Chemo-therapy next week).

Therefore, I still post for H/Copper where I am a moderator as well.

I'll try to post now and then for this interesting thread.

Gerry


May I too put in a bid for your future good fortune. You have provided much valuable food for thought and profit for a long time now.

[stolwyk]

Thanks Guys.



IMF doesn't see big commodities market correction

CANBERRA (Reuters) - The International Monetary Fund (IMF) said on Tuesday it did not expect a dramatic correction to world commodity markets, despite growing market concerns and downside risks to world growth.

The IMF's outlook for world growth for 2006 was a "very healthy" figure of about 5 percent, with a minor correction forecast for 2007, IMF Managing Director Rodrigo Rato told Australia's National Press Club in Canberra.

"So we're still in a very broad-based expansion in the world," he said, adding that the United States and China were the key drivers of growth, while recoveries in Japan and the Euro area were strengthening.

World commodities markets have eased in the past couple of weeks on concerns about global growth and inflationary pressures.

Rato said there had so far been a fairly modest correction of previous increases in asset prices, although downside risk had increased as investors reassessed prospects for liquidity, inflation and growth.

"We don't see a dramatic correction," he said.

Growth in commodities prices had been strong, adding to worldwide inflationary pressures, but the global economy was doing well, with growth more broad-based than in the past.

Rato said high world oil prices remained an obvious risk to the world economy, and he repeated his call for governments to do more to ensure a free and more transparent trade in oil.

"Quite an important amount of the price of oil today is not related to supply and demand," he said, adding that supply constraints, inefficiencies in the market and geo-political issues were all having an impact.

"We have to avoid the risk of energy protectionism in which some countries will try to secure their oil needs by agreeing to contracts that are not transparent without having a true international and global oil market," he said.

Nymex crude stands around $70, up almost 15 percent so far this year as the stand-off over Iran's nuclear programme and militant insurgency in Nigeria create supply uncertainty as global demand growth continues unabated.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-06-13T081054Z_01_ALL322840_RTRIDST_0_OZABS-MARKETS-AUSTRALIA-IMF-20060613.XML&archived=False

[stolwyk]

June 13: Trouble at mill series: oil prices and housing.

At the moment, the USD is up 30 cents to 86.12 and oil is down 37 cents to 70.00.

Wallstreet mentioned that Oil had gone down but the Saudis and other suppliers would have a lower currency and hence received more in their own currency.

The oil price is notoriously hard to to shift, because:
1. Vast tracts of oil fields and other concessions have been locked in by the Chinese and others are imitating this tactic. It will take years before a more or less proven oil field will be drilled after holes have been plugged.

So, this oil is out of circulation and it appears that the market does'nt appreciate that. Consequently, the pressure on the remaining oil world reserves has increased even if some substitutes (ethanol ) are being used.

Of course, combine this with geopolitical problems, the thread of dimishing stocks (US hurricane season starting up) and the usual terrorist moves, then all these parameters include a price for their individual risk factors which together are a tidy sum.

The chinese are not that stupid and may well have obtained cheap oil and some cheap resources in hindsight, particularly as inflation is moving up.

Add to that the unwillingness of the US to pull their finger out and rather increase their trading deficit by borrowing for obtaining this oil and one can appreciate their negative and grotesque thinking.

2. The US Housing sector.
Chapman mentioned that share prices of the large US building properties have declined by 50% and I won't be surprised if they are going to get a hard time.

I did mention that Bern. had to make a painful choice and property seems to become the scape goat. According to Van Eeden, M3 has declined somewhat; give the set up another month and the true damage can be better assessed in a slowing economy with higher interest rates.

Suggestions were made that more credit will solve the situation but who wants to borrow? On expection of higher house prices? No.

Unless he comes up with a nefarious scheme costing hundreds of billions of dollars acting as give aways and be accused of giving preferential treatment, prices must come down by a good amount to enable buyers with lesser real income to buy these. Inventory levels of stock are rising.

And the flow-on negatives including a savings rate below zero have been discussed in this thread.

3. The US economy is like a massive sieve, full of holes, that one named as "housing" is one of the biggest.


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

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

June 13, 2006

Central Bankers declare War on Gold and the "Commodity Super Cycle"

By Gary Dorsch

http://www.kitco.com/ind/Dorsch/jun132006.html

--------------------------------------------

[stolwyk]

Trendy Jewellery; more gold consumption

By Shailendra Kakani
June 9, 2006

www.commodityresearch.in

There was a time, Indians dealt with smugglers, bought raw gold and then handed it over to the family jeweller for fabricating bracelets, necklaces, and earrings. The jeweller selected the design - sometimes on his own, at others with consultation of the buyer - and then asked his artisans to manufacture the pieces. The artisans worked on that single piece till it was ready, after which it was handed over to the customer.

These jewellers had a problem or two; one, many of them were unreliable, they stole gold and mixed the alloys, and thus cheated the consumer. Often the jewellery was found to be 14 carat while the customer was charged for 22 carat. This was a substantial loss, and there was just no way of preventing it, unless you had a gun and could threaten him with the dire consequences. The jewellers were so synonymous with cheating that there was a metaphor "the jeweller will cheat even while making jewellery for his own mother."

Another problem was that the jeweller could only produce a few designs. Entire trade moved by way of heredity, and the son learned to make only those designs which his father taught him. Limited means of travel curtailed interaction with other jewellers and thus the designs remained limited.

The scene has changed today, at least in cities like Mumbai ( Bombay) and other larger cities and towns. Most of the people nowadays prefer to walk in a store (preferably air-conditioned), compare the various designs on display and then select what catches their fancy. The new breed of Indians, notably yuppies, love to flirt with newer, bolder designs, specially since many of them have travelled abroad on job assignments, and have seen the wide spectrum of fashionable designs available there.

All this has brought another change: the popularity of branded jewellery. This sector is fast emerging as an independent growth territory in India. The sector has basically emerged as an offshoot from the jewellery export industry, which has a sizeable presence in India. (In fact as of now the Indian jewellery manufacturing industry is the largest in the world, having left behind Italy recently.)

Branded, stylish, and funky jewellery has its admirers. With the growth in economy and the development of IT, ITES, healthcare, management, financial services, and media explosion, there is a boom of nouveau riche. These people, often branded as genNext ubersexuals, prefer light, design-rich jewellery against the traditional, crudely-designed chunky jewellery made out of 22 carat or even 24 carat gold. They want jewellery which matches with their attire, their style, or their personality - quite a contrast with olden days when people were just delighted to wear gold, no matter how lumpy, no matter how out of sync.

As a result the branded jewellery is on the rise. During past couple of years there has been a plethora of brands like AGNI, Swarnajjali, Adora, D'damas, Kisna. Many others are in the pipeline. Everyday there is a marketing campaign by these brands, more and more media space is being allocated to jewellery. Fashion shows are being organized, models are being hired, brand ambassadors signed; there is just too much activity in the sector.

With more than 300 million people in the middle class category, the branded jewellery retailers have a huge market to satisfy. According to McKinsey, the celebrated market research organization, the branded jewellery market is growing at the compounded annual growth rate of 40 percent, and is estimated to go beyond two billion dollars by 2010. This may appear as huge, but it is still nothing compared to the overall size of the Indian jewellery market.

The emergence of this new segment has led to fresher ideas. The designs are getting more and more enchanting. With the industry employing qualified designers from top institutes within the country and without, the jewellery industry is churning out newer designs. The jewellers don't mind hirin

[Bel]

There seems (to a novices eye like mine) that there are forces at play *insinuate Govt's* to artifically drive down the price of commodities.

The conspiracy theorist in me suspects its due to the end of the inflation cycle we are all about to be hit with that they *the government* caused.

It's a gamble for sure but i still think Oil is the place to be and i suppose gold and silver is too.

[tricha]

Well what the hell do u make of this, my bank sent me a letter today stating, they have raised the limit on my credit card, unless I disagree, Imm, so I can relate to this article.

Cheers, what the hell is going on with this world [?][?][?][?]

A Hearty Mogambo Thank You


By Richard Daughty
" The Mogambo Guru"

June 14, 2006

www.dailyreckoning.com


- Last Friday, after gobbling a handful of assorted tranquilizers washed down with coffee, my wife tied me to a chair before looking in the Wall Street Journal to see the report of new Total Reserve Bank Credit on page C 12. Cinching the last of the knots, she picks up the paper and reports "It says here that it's up $2,460."

I breathe a sigh of some relief. Two and a half billion bucks ain't too bad for one week. Even a little on the low side, maybe! Suddenly she throws the newspaper at me and starts to walk out, and I say "Hey! How about looking up U.S. Gov't Securities: Bought Outright?" I hear only scorn in her voice as she says "Look it up yourself, jerk!"

So I ask, "Well, how about untying me so that I CAN read it myself?", but she was gone, although I could hear her muttering to herself as she walked down the hall, "Hahaha! Screw you, creep!"

After awhile I get tired of alternately begging for help and screaming death threats at her, so I decide to try and find out on my own. I finally manage to loosen one corner of the strip of duct tape that she put over my eyes, and I could use my Amazing Mogambo Super Vision (AMSV) to read "U.S. Gov't Securities: Bought Outright" next to the number $1,423" which means the evil Federal Reserve bought up $1.423 billion dollars in government bonds last week, after first creating the money to do so.

What a racket! This is the ultimate in fiscal fraud and they all should all go to prison for it. And if the American government was not filled with (being as nice as I can manage) stupid, ignorant, untrustworthy, lying, corrupt, cheating bastards and whores, that's where they would all go.

But if I dare to show up at the Federal Reserve to make a citizen's arrest, dressed for the occasion in my best Rambo outfit, complete with headband and .30 caliber, belt-fed, air-cooled machine gun under my brawny, manly Mogambo arm (BMMA), the cops come roaring up with sirens blaring, not help me round up the economic terrorists that have taken over the Federal Reserve, but to arrest ME! Like I'M the one guilty of something!

But those vainglorious days seem now over, and I am stuck here, ignominiously tied to a chair, peeking out from under a blindfold. Then I notice that Required Reserves in the banks dropped back to the insignificant $42.459 billion.

What fraud! What audacity! What an embarrassment that the self-important nitwits at the nation's universities see nothing wrong with not only an out-of-control fractional-reserve banking system, but one where there are literally no freaking reserves at all (NFRAA)! Money is literally created out of thin air, with no backing from deposits whatsoever! This level of risk and multiplication of the money supply is insane! This is beyond insane! And yet, there it is!

I also noticed that custody Foreign Holdings of government debt rose $11.4 billion in the last week, too, and so I amused myself with laughing at foreigners while I struggled at the ropes.

- Chuck Butler of EverBank notes that the G-8 finance ministers are meeting again and he reports that Brad Setser of Roubini Global Economics said that the ministers are promising not only more action, but "vigorous" action, regarding the global economic imbalances. Yow!

"Vigorous" action ought to produce a lot of fireworks, including a rise in the dollar price of a barrel of oil. And if you have not been out shopping for oil-related stock lately, then I strongly suggest that you chug down the rest of that morning "eye-opener" can of beer and buy some. Pronto.

And this suggestion that you load up on oil is because the dollar is going to go down in purchasing power, which is the whole point of the G

[stolwyk]

Trouble at mill series.

Will Bernanke Save the Dollar? 6/15/06
By Axel Merk
June 15, 2006


Recent hawkish comments by Federal Reserve (Fed) Chairman Ben Bernanke caused jitters in US and global equity markets; as is the typical first reaction when there is a sense of panic in the market, US investors liquidated some of their more speculative foreign investments and repatriated the money. As a result, the dollar enjoyed an overdue rally after it had been sliding for weeks versus major currencies. Did Bernanke ring in a new era at the Fed? Will he be able to help contain inflationary pressures? And will the dollar regain its strength?

When we recently analyzed current account deficit, and as a result alleviate some pressure on the dollar. Politicians rarely call for a drop in consumer spending; this unpopular task is traditionally left to the Fed. The Fed controls money supply and interest rates; and while the Fed has continued to boost money supply, higher interest rates are starting to take their toll on the consumer. Does that mean a slowing US economy translates into a higher dollar? Not quite...

Bernanke spooked the markets by daring to say what has been ignored for too long: inflation is heading our way. We already experience inflation on anything we cannot import from Asia – from the cost of healthcare and education to the cost of local services. Low interest and tax rates in the US, combined with Asia’s growth policies have created an oversupply of goods has lead to low consumer goods and high commodity prices. Corporate America has up till recently been faced with little pricing power because consumers neither needed to pay more for goods (cheap imports), nor could they afford to (high debt); to maintain margins, outsourcing was accelerated, keeping a lid on job and wage growth. Slowly, but surely, however, inflation has been creeping through the production pipeline. Gradually, wage pressure is increasing; corporations are finding ways to pass on higher prices; and finally, some of these pressures appear in government statistics.

Bernanke has a problem, a big problem: inflation is creeping up just as the economy is slowing down. Some have pointed out that it is quite common for inflation to continue to climb for a couple of months as the economy is slowing down; as a result, we should not be concerned about it. These are the same ‘experts’ that only saw the internet bubble out of the rear view mirror and are still do not acknowledge there is a housing bubble. What many underestimate are the extremes we face:


Inflationary pressures have been ignored for a very long time because they did not make it through to the government’s “core inflation” statistics. The Fed relied on globalization to contain inflation.

The consumer is far more interest rate sensitive than ever before. Just about everything is bought on credit now. Bernanke’s predecessor Greenspan loved this “efficient” consumer. The problem is that this efficient consumer has to cut back much more sharply when faced with higher interest rates (or shocks, such as losing a job).


As interest rates edge up, the economy will slow down sooner than it would if the consumer was not as interest rate sensitive. This is exacerbated as consumers can no longer extract additional equity out of their homes. We do not need falling housing prices to harm consumer spending – stagnant prices are harmful enough. Anecdotal evidence also suggests appraisers are under a lot of pressure to keep up the values of homes to allow those who want to refinance to lock in still low long-term rates. All those who have taken out 100% mortgages while locking in only 1, 2 or 3 years will learn that they can only refinance if their property is assessed to be worth at least as much as their mortgages.

Indeed, in the comments that rocked the markets, Bernanke not only talked about rising inflationary pressures, but also about a pending a slowdown in consumer spending. These are problems that require diametrically opposed Fed policies. If the Fed is to fight infl

[Sunshine007]

It seems that gold is bottoming out. Now let's do some hindsight calculations: The move from $255 bottom to $730 top is $475. A Fibonacci 38.2% of 475 is 181.45. So a Fib 38.2% correction of this entire move takes it to $730-$181.45 = $548.55. This is very close to gold's actual low we have seen recently. Should we say that the recent servere down move is a Fib 38.2% correction to the entire gold bull market so far? It's very likely that the correction has finished in terms of magnitude. What's the implications for gold's up move going forward? Can somebody familiar with TA sheds some light here?

Here are my tentative projections: the move from 255 to 730 is 186%. If the next leg up is of equal magnitude then 186% from $540 (actual bottom?) should take it to $1544. Or say it only goes up by 61.8% of previous up move then gold can go to $1160. Or a more modest 38.2% of previous rise to $923? Comments please!

[airedale]

Hi Sunshine, If you believe that gold is still in a long term uptrend. Then any or all of you your propositions are feasible,indeed are likely. Only the time span to get there is unknown. There have been pages and pages posted on ST and elsewhere arguing that the US dollar is slowly weakening....oil supply is weakening...oil demand is increasing....etc.etc...
Personally I don't think that the gold market uptrend is exhausted.

[stolwyk]

Nigeria oil 'total war' warning
http://news.bbc.co.uk/2/hi/africa/4723076.stm

USD down, the rest up
USD 85.37 (-0.3)
Gold 581.1
Silver 10.3
Oil 70.12 (+0.6)

Gerry

[stolwyk]

Discover News
Scientist reveals Earth's golden core

16:41:55 GMT, 15 June, 2006
An Australian scientist has released new calculations which he believes indicate a vast quantity of gold present at the Earth's core.

Professor Bernard Wood of Sydney's Macquarie University has published the findings of his investigation in the journal Nature.

By his calculations, the Earth's core contains enough gold to cover the surface of the globe to a half a metre thickness, ABC News Online reports.

Professor Wood, a geologist, and his research team investigated the development of the earth from its molten metal core and compared it to the composition of meteorites to calculate the amount of gold present.

He told ABC: "This tells us that the Earth is chemically very similar to those meteorites but the Earth's crust is depleted in all those elements that like to dissolve in iron.

"We can say that more than 99 per cent of the Earth's gold is in the core."

http://www.gold.org/discover/news/article/4201/

[stolwyk]

End of the Yen Carry Trade:

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=D5FBD7FF-3048-5296-A29032E12D3BAEDB

[tricha]

Out-of-Control Leverage, Emotion and Panic!

By Mike Hoy

June 19, 2006

With the recent beatings the markets have taken there is no shortage of blood in the streets. Historically, in a bull market, this is a signal of terrific buying opportunity. Is this the case now? In my opinion the answer to that question is yes!

There is no debate of the fact that the precious metals have been in a bull market for several years. I have no doubt that the criteria which created the necessity to be a part of this bull market are more obvious today than they were several years ago when this party was just getting started.

There are many questions that an individual can ask to assure themselves that nothing has changed in the long term scheme of things; here are a few simple questions that I ask to remind myself of the fact that “the more things change the more they remain the same.”

(1) Have the governments of the world taken any measures to reign in their out of control and exponentially growing spending?

(2) Are those who have built huge reserves of US Dollars content with owning an ever growing percentage of their reserves in worthless paper that can be created at the whim and discretion of a selected few throughout the world?

(3) Is the financial system of the world on solid ground?

(4) Have any measures, other than cheap talk, been taken to create alternatives which will lessen the world’s dependency on the declining supply of fossil fuel which in my opinion is the world’s NUMBER ONE CULPRIT for the growing increases behind inflation?

I could ask a dozen more questions like these but we already know the simple answers to these questions. I believe the reasons for owning the precious metals have only intensified and become more obvious as each day passes. In the end, if the world continues moving in the direction that it is currently headed ownership of precious metals and precious metal stocks may be the only way to protect ones assets.

I have read many articles which state the blame for the severity of the selloff in the markets are as a result of the “Fed This” and the “Fed That” and “Bernanke This” and Bernanke That!”

In my opinion, the single most important factor behind the severity of the selloff in the markets evolves around the leverage associated with pure speculation and greed. Without a doubt the accelerating price appreciation in the precious metals was beginning to get carried away to the upside. Gold and silver prices were being pushed higher as a result of every “Tom, Dick and Harry” jumping on board the new found bandwagon.

The implosion of the excessive leverage of the hedge funds and commodity funds, in my opinion, was the largest contributing factor in taking what could have been a normal correction and turning it into a “Full Fledged Rout!” The speculation and margin calls fed on themselves to wipe these people out. I am sure there will be some very interesting stories that come to light after the dust settles on these markets.

Most of this speculative money entered this sector solely because of “action and momentum!” Most of these people do not have a clue as to why they should be exposed to the precious metals sector nor do they care! Their only interest lies in the direction and volatility of the sector. As far as I’m concerned I am glad to see them cleaned out! By cleaning this “froth” out of the market the precious metals sector can get back to “business as usual.”

Those serious investors who are accumulating gold and silver as a necessity to protect their wealth and assets are not going to change their investment philosophies as a result of gold and silver prices becoming more affordable. I believe the true advocates of gold and silver are grinning from ear to ear as a result of the sharp pullback in prices. Pure logic dictates that the quantities of gold and silver that can be purchased in a correction only increases. An example of this would be the demand for gasoline if th

[stolwyk]

Trouble at mill series:

US: Int. rates: housing: consumption: gdp: stagflation.



Anything to do with house prices moves slower than equity markets.

I think we need another 2 months to gauge the profound effect of any interest rates rises.

Bernie is giving priority to curbing inflation, which at the true rate is rising at 8-10% per year.

The FED's mistake was that their rate rises were at the back of the inflation curve, ie inflation was too far ahead of interest rates. That would'nt have mattered that much if inflation was running towards zero, but it did'nt.

Housing is already sensitized to previous rates and the fanciful mortgage instruments, eg ARM will have its influence felt shortly.

Dump another 0.5%-1.5% on top of that and housing inventories will rise sky high; there will be protests galore and house prices falls will accelerate.

This will crimp consumption which is 70% of GDP and lo and behold, stagflation is becoming serious.

Unfortunately, to really cut inflation, one needs a rise of about 2.5-3% at least, and that is a tall order.

If only the FED would stop creating credit and increase the money supply. Unfortunately, huge debts need to be monetized so inflation is to continue.

Incomes are well behind inflation, saving is below zero and manufacturing is also low. The current 9% unemployment is to rise (Some say it is higher).

So while we are waiting, a powerful coctail of angst, cheating and incompetence by the FED and Treasury is being brewed and we are not even talking about geopolitics, oil and resources.

The horses of the Apocalypse will ride again!

Fortunately, I have an anchor: Gold.

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

[stolwyk]

Interesting article. I'll leave it to the reader to judge it.

This article appears in the April 28, 2006 issue of Executive Intelligence Review.
HYPERINFLATION LIKE WEIMAR 1923
World System on Weimar
Collapse Curve
by Lyndon H. LaRouche, Jr.

April 20, 2006

http://www.larouchepub.com/lar/2006/3317weimar.html

[stolwyk]

Hodges: The US Govt spending report: http://www.financialsense.com/editorials/hodges/2006/0620.html

[stolwyk]

SPOTLIGHT ON: The USD in election mode.

US elections in Nov and members already being flat out positioning themselves.

For the Republicans to have a show, it is important to:
1. Get price inflation down. That is somewhat difficult as commodities and particularly oil are often outside the control of the US.

2. Maintain a reasonable value for the USD.
True, everybody and his dog is clamoring for a lower $US but the Republicans can see the negative flow-on effects of that damaging their chances for re-election.

So, I think everything will be done to keep the USD value well above 80 cents and preferable close to 85-87 cents, I believe.

"Apres nous the deluge" will be the catch cry and unless there is a drastic reversal due to a geopolitical event before the election, expect the fall-out to occur after.

That is my opinion,

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

[Packersoldkidney]

Comment on the US $ from an Elliott Wave site: overall they are expecting numerous rallies in the US $ but overall are very bearish on it looking further ahead into the future:

http://www.e-wavecharts.com/usd_may2006.htm

[stolwyk]

Trouble at mill series: The FED on the treadmill.

And it will be difficult to stop; it also accelerates.

Why?

From my previous post (H/C) on 23 June:
"Of course the elections will decide the FED's movements as well. However, any 6% rate won't touch the current 8-10% price inflation.

Then again, higher interest rates are outside the FED's control because the ECB block is ready to raise theirs, "whatever it takes". That would normally cause an outflow of funds from the US to Europe. And the US can't afford that".

COMMENT: while Bernanke is concentrating on "price inflation", he won't tell you that based on his dear Core inflation of some 3%, there is no need to increase his already 5% Funds rate.

Obviously, the FED works with 2 sets of numbers, the Core inflation and the Real inflation of some 8-10% and it is the latter he is concerned with. But he won't tell you that and Wall Street who have made a lot of money by backing the Fed, won't tell either.

However, the FED works with smoke and mirrors. There is normally a 2% spread between ECB rates and FED rates. So, if the ECB (European Bank) rate is about 3.25%, one ought to get a FED rate of some 5.25% at the moment.

Anything less and foreign money destined for paying US interest (About US$3 bill/day) on their massive debt, will be wavering and possibly flow out from the US to Europe.

It so happens that the ECB is becoming very agressive in raising rates and the mouthing about price inflation can be heard every day. (Most countries, including the ECB Block had massive increases in M3).

So, the battle about increasing interest rates between the FED and the ECB leaves Bernanke on a non-stop treadwheel with the FED following the ECB.

If the ECB decides to accelerate interest rates by say 50 points (1/2%) at a time, the FED needs to follow with the pressure mounting on the Housing sector and the flow-on effects on the US economy.

When is this treadmill going to stop? After enough damage has been done, taking into account the lag in results from rising mortgage rates?

The ECB will need to take care that its exchange rate won't firm up too much.

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

[whiteheron]

Gold has just broken through US $600

Silver at US $10.80

Be interesting to see what happens from here

[stolwyk]

THE REALITY OF STAGFLATION
by Peter Schiff
Euro Pacific Capital
June 29, 2006

Now that the Fed has raised rates to 5.25%, and has left the door open for future increases, the overriding concern is that over-tightening will tip the economy into recession. However, given the state of our imbalanced economy, a recession is not only inevitable, but absolutely necessary, and will occur no matter what the Fed does. Furthermore, the coming recession will not come about because the Fed went too far, but because it did not go far enough.

The U.S. economy suffers from extreme economic imbalances that must be resolved. The longer they persist, the more difficult and painful their ultimate resolution will be. The imbalances result primarily from an excess of consumption and borrowing, and insufficient savings and production, and can only be resolved by less of the former and more of the latter. Recession is not the only way to reduce consumption, but since our economy is 70% consumption, any noticeable dip in consumption will lead to recession. The Fed should not prevent this from occurring any more than a clinician at a rehabilitation center should try to prevent a patient from suffering withdrawal by giving him with more heroin.

When the recession occurs it will not be the result of the recent run of Fed rate hikes, but the irresponsible manner in which it lowered them, and kept them low, in the first place. One common misperception is that given the absence of wage pressures, Bernanke is over-reacting to a non-existent inflation threat. However, this naïve view misses the point that rising wages, just like other prices (wages are the price paid for labor), do not cause inflation, but result from it. More importantly, wages usually are among the last prices to adjust upwards in response to inflation, which is one reason that inflation is so damaging. Waiting for an up tick in wages to confirm inflation is analogous to waiting for the caboose to evidence an oncoming train.

Given the current post-industrial state of the U.S. economy, the gap between wages and the cost of living will likely grow more than in prior inflationary periods, making the current experience that much more painful. Economists are also mistaken in their belief that a weakening economy will counteract inflationary pressures. This overlooks the fact that a weakening U.S. dollar will stimulate demand abroad at the same time it restrains it here at home. So even as Americans consume less, prices will continue to rise as they are forced to compete with wealthier foreigners for scarce consumer goods.

Another major problem is that the housing bubble has finally burst. Thus far it has only produced a slow leak, but by next year the air will be rushing out with gale force winds. Because the loss of paper wealth and the purchasing power associated with it could potentially produce a recession, some argue that the Fed should pause. Ironically, one of the only remaining props in the housing market is the belief that the Fed will keep raising rates, which pushes remaining home buyers to buy before mortgage rates move up. However, once the general perception is that the Fed is done, this last remaining prop will be gone.

If Bernanke tries to borrow from Greenspan’s playbook and attempts to prevent or mitigate the severity of the coming recession, the excess liquidity will not simply move into another asset class, as it did from stocks to real estate, but into real stuff, such as commodities and consumer goods. As far as the Fed is concerned, it has now reached a monetary divide where all roads lead to stagflation.

© 2006 Peter Schiff

[stolwyk]

Casey Files: Government Debt – Termites in the House:
Bud Conrad:
http://news.goldseek.com/GoldSeek/1151699007.php



Gold extends rally as dollar continues to tumble
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B92DDCE98%2D7987%2D4F7C%2D8AAF%2 D2BEEC4134000%7D&siteid=goldseek&

[stolwyk]

BMO Webcast:
Coxe:
http://www.bmoharrisprivatebanking.com/webcast.asp

GOLD: Special Roundtable:
http://www.netcastdaily.com/fsnewshour.htm

[tricha]

The Russians are coming, sounds like they see the US$ as the next basket-case

Russian rouble faces world market
By Damian Grammaticas
BBC News, Moscow



Many Russians want their salaries in roubles
It's not long since the Russian rouble was seen as a basket-case currency. Even in Russia itself, people have shunned it preferring US dollars.

Now times are changing. This weekend Russia is lifting all currency controls. The rouble will become fully convertible, free for you or I to buy and sell.

The Kremlin wants to establish it as a strong international currency. Supported by high oil prices, the rouble looks like being an attractive proposition.

But removing currency controls also brings significant new risks for Russia.

Dollars versus roubles

Flying off the printing presses in Moscow are sheets of perfect new rouble notes as Russia prepares to float its currency.

The rouble will be freely tradeable, joining the world of fully-fledged international currencies.

Liberalising capital and currency controls will encourage investment into Russia

Alexei Kudrin, Russia's Finance Minister

"It won't be a quick process to gain trust. Step by step it will come," says Russia's Finance Minister Alexei Kudrin.

"Liberalising capital and currency controls will encourage investment into Russia. Allowing free movement of money is an important part of our new market economy."


Back in the 1990s, though, nobody wanted the rouble. It was a decade of inflation, debt default, devaluation, and poverty.

Russians literally tore up their roubles.

How things have changed. Today, Moscow is awash with money, expensive shops and neon lights, its consumers driving a booming economy.


Everybody wants their salary in roubles... and me also, I want to have my salary in roubles now... because the dollar became cheaper

Anya Artamanova, Russian resident

Many still prefer to use the dollar. Everywhere on Russia's streets are exchange kiosks displaying today's rates for the greenback and the euro.

But as the rouble has prepared to float it has strengthened, and the dollar has weakened.

From dollars to roubles

A trip to the bank is a regular part of Anya Artamanova's routine. She gets her salary in dollars - then swaps them for roubles.

Today Anya is enjoying an espresso in one of Moscow's smart cafes. She works for an internet company. Her clients are billed in dollars, her staff paid in dollars. But all believe it's time to switch.

"Everybody wants their salary in roubles and they came to me and say, 'Oh, maybe we change it,'" she says.

"Me also, I want to have my salary in roubles now, because the dollar became cheaper. I saw it."

Stronger competition

Russia's businesses - like Europe's biggest dairy products factory in Moscow, which churns out yoghurt, milk and drinks - will also feel the change.



A floated rouble will bring risks and rewards

The company, Wimm Bill Dann, has modernised an outdated production line.

As the rouble strengthens, everything it imports will be cheaper - each gleaming new machine that costs millions of dollars, not to mention its raw materials like sugar, fruit, packaging.

But Russia will face stronger competition from abroad, and inefficient companies will struggle, says Wimm Bill Dann's Marina Kagan.

"In Russia usually production sites are not very efficient," she says.

"You have a lot of people working there. Now we are all moving, we have all our plants automated so you don't need so many people to service those lines.

"Traditionally it was impossible to lay people off. Now more and more companies are doing it, gradually, offering very good termination packages. They are doing it because there is no other way."

'Strategic raw materials'

It is oil and gas that's making Russia, the world's second biggest exporter, increasingly wealthy. The country has built up huge currency reserves.

The rouble should be

[stolwyk]

From Al Jazeera:

Features
Oil may fuel Sino-US conflict
By Adla Massoud in New York

Thursday 29 June 2006, 9:45 Makka Time, 6:45 GMT

China recently signed a number of oil deals across Africa

Related:
Iran offers Shanghai bloc energy ties
China gets Kenyan oil exploration deal
King to sign Saudi-China oil deals
China seals $2.3bn Nigeria oil deal
Opec and China plan oil dialogue
Kazakhstan opens oil pipeline to China

China's quest for oil in the Middle East is threatening US energy and security interests in the region and increasing the risk of a conflict between both nations, analysts say.

Flynt Leverett, senior fellow at the New York-based Saban Centre for Middle East Policy, told Aljazeera.net: "There’s a force of increasing tensions in the Sino-American relationship and if you carry that trend out long enough, you do begin to run a more serious threat."

As the dominant geopolitical power in the Middle East and the Arabian Gulf, America's main concern is not only the acquisition of cheap fossil fuel but also the growing involvement of China's energy sector in a number of ''problem" states such as Iran, Sudan and lately, Syria.

George Bush, the US president, recently told the American public that "addiction to oil is a matter of national security concerns".

"Some of the nations we rely on for oil have unstable governments, or agendas that are hostile to the United States. These countries know we need their oil, and that reduces our influence, our ability to keep the peace in some areas."

Kenneth Pollack, a former CIA and national security council Middle East analyst, told Aljazeera.net that just as the US oil needs had helped to keep dictatorships in power in the past, China was buying into oil in places where those purchases supported governments of countries seen as hostile to the West.

"It can be very detrimental to the US, particularly if the Chinese were to adopt the role that the Soviets did during the Cold War, supporting whichever state opposed the United States," he added.

Investing in Sudan

China has invested more than $8 billion in Sudan, which now supplies over 7% of the Asian giant's oil. It has also invested another $70 billion into Iran's oil and gas industry, which meets 11% of its energy needs.

"There are a lot of Arab states in the region who are looking to China ... as a potential political counterweight to the US"

Kenneth Pollack

In return, Beijing offers powerful incentives for these countries' energy resources: Economic and military aid, access to Chinese markets, and support at the United Nations where Beijing wields veto power at the Security Council.

China has also shown willingness to oppose US policies as it did in 2004 when it threatened to veto a US proposed resolution to impose sanctions on Sudan, or when it signalled resistance to any UN measure that would include the threat of military action against Iran.

Analysts say China's need for oil has been a major factor in Beijing's refusal to support stronger action against those countries and that it has an interest in seeking peace in the Gulf to ensure the security of its growing energy investments.

"The US' argument to China, which the Chinese recognise, is that Iran with nuclear weapons would be very destabilising to the region and that could jeopardise China’s number one priority in the region which is the flow of cheap oil," Pollack said.

As the world’s third largest oil consumer, China relies heavily on the Middle East, which provides about 45% of its total oil imports, with Saudi Arabia accounting for about 17%.

Growing industrialisation

While China still consumes far less oil than the United States, increased production in industries such as steel, aluminium, and cement have driven up its energy consumption and oil prices.

According to the International Energy Agency (IEA), Chinese oil imports will rise more than six times between 2002 and 2030, from 1.7 to nearly 11 million barrels per day.

China depends on shipping for
almost all of i

[stolwyk]

P. van Eeden: When bad news is good news, all news is bad news.

http://www.paulvaneeden.com/displayArticle.php?articleId=161

[bermuda]

Stolwyk
That was a great feature that you posted.
Thanks

[stolwyk]

Mike Hartman:

HIGHER INTEREST RATES TO COME

http://www.financialsense.com/Market/hartman/2006/0705.html

COMMENT:
I have for some time brought up the spread in ECB and FED rates in my "Big trouble at mill" series and was predicting higher US interest rates.

___________________________________

STAGFLATION REALITY SETS IN
by Peter Schiff

Euro Pacific Capital
July 7, 2006

Today's negative stock market reaction to the weak jobs data shows that the "bad news is good news market," which has ruled for the past couple of years, may have finally become a "bad news is bad news market." With the June non-farms payroll data rising by only 121,000, verses an expected gain of over 200,000, it appears that Wall Street is finally acknowledging that the reality that stagflation trumps, or potentially negates, the potential for a Fed pause. If that is indeed the case, things are about to get a lot worse for stocks.

The stagflation alarm rang louder due to an increase in wages paid of .5%, 65% above the .3% that analysts had been forecasting, against a backdrop of record high oil prices, which approached $76 per barrel for the first time ever before pulling back. Once again, employment in the service sector, including banks and retailers, contributed the lion's share of the gains, rising by 75,000, while government payrolls swelled by 31,000. In what is sure to be the just the tip of the iceberg, construction lost 4,000 jobs, while on the bright side the beleaguered manufacturing sector managed to add 15,000 jobs. The unemployment rate, adjusted of course for the millions of discouraged workers who have simply given up looking, held steady at 4.6%.

However, the big question is will these payroll gains, however tepid, last? Given that national employment is overwhelmingly dependent on service sector jobs, which in turn are dependent on discretionary consumer spending, the prognosis is bleak. With oil prices on track to reach $100 per barrel (sending pump prices above $4 per gallon), the Fed likely to raise interest rates a few more times (further pushing up mortgage payments and rents), the continuing upward pressure on health care, insurance and local taxes, and the prospect of rising food prices, discretionary spending is likely to collapse in the years ahead.

Even more important than the ability of Americans to borrow and consume, is the willingness of foreigners to produce and lend. With the endurance of the former and the tolerance of the latter both likely to be tested soon, today’s job gains will likely become tomorrow’s job losses.

Evidence that foreigners’ patience is beginning to wear thin was seen in the sharp and broad decline in the dollar, especially against the Asian currencies, which are issued by America’s largest creditors. If this trend continues, it will not be long until dollar weakness spills over into the bond market and consumer goods, putting additional upward pressure on both interest rates and consumer prices, while simultaneously exerting downward pressure on employment and the economy. This two-pronged effect will combine to cause the federal budget deficit to swell just as rising interest rates make it increasingly more expensive to fund. Get ready for the Democrats to break out Ronald Reagan’s Misery Index, only this time it’s the Republican majority that will have to deal with it.

http://www.financialsense.com/fsu/editorials/schiff/2006/0707.html

[stolwyk]

SPROTT and BAMBROUGH:

INVESTMENT IMPLICATIONS OF AN ABRUPT CLIMATE CHANGE

http://www.321energy.com/editorials/sprott/sprott060506.html


COMPLETE REPORT (56 pages):

http://www.sprott.com/pdf/climate.pdf

[stolwyk]

BIG TROUBLE AT MILL SERIES: THE FINAL DAYS OF THE ROMAN EMPIRE.


I did mention that the US has no energy policy and that China and others are meanwhile locking in the juicy world reserves, wherever possible, regardless of political considerations.

The energy future for the US has therefore deteriorated, more so as geopolitical price considerations are now playing a part. Both Iran and Venezuela like higher prices while attacks on Nigerian facilities and elsewhere keep oil prices higher also.

The US has about 40 different grades of petrol, depending on what the States prescribe. Obviously, this is expensive and not efficient.

The Greenies and interest groups are blocking many attempts to establish new refineries which need therefore many years just to pass through the courts.

California has a gasfield off the coast and refuses it to be developed. Presumably, their Representatives fear lower values of Real Estate.

According to FSN, two major problems now are:
The US needs desperately natural gas which is much cheaper than oil. It needs special tankers to import that liquid gas as well as LNG facilities which transform the liquid into gas.

Some Democrat Representatives don't want that and have made it an election issue. So, the US won't import natural gas.

Also, the number of rigs in the Gulf of Mexico is fast declining. Rather than to take the risk of braving hurricanes, these rigs have moved to the Middle East and other other countries where they can get contracts for up to 3 years in some cases.

There is a worldwide shortage of rigs and consequently, hiring rigs in the Mexican Gulf or anywhere else, is becoming more expensive.

Unfortunately, the US does get a significant portion of oil from this Gulf and can't really afford to see less drilling being done. However, there has been no reaction sofar, the US preferring to use fiat money to import oil and gasoline instead.

This will increase Current Deficit as does the sum total of the above mentioned aberrations but the Senate and House of Representatives don't seem to work for the people anymore but are more intent on being reelected.

Altogether, a sorry state of affairs and the US has surrendered leadership.

Gerry

[stolwyk]

Got Gold Report - Gold ETF Buying Picks Up
http://www.resourceinvestor.com/pebble.asp?relid=21389

[stolwyk]

Paterson's report on Australian oil companies: 57 pages:

http://www.sunshinegas.com.au/_dbase_upl/Internationals060627.pdf

[bermuda]

I have just watched a series of 6 excellent videos on www.bulletin.net on Peak Oil.Published today.

Everyone in the world should take the time to view this presentation.

Very sobering.

[stolwyk]

Can't find the videos.

[clearasmud]

Hi Gerry,Bermuda

You will probably enjoy this recent audio on peak oil with Geremy Leggett discussing his book:
The Empty Tank:oil,gas,hot,air and the coming global financial catastrophe.

http://www.financialsense.com/Experts/2006/Leggett.html

Regards,

[bermuda]

Stolwyk,
Mr Tommy says try http:abc.net.au/4 corners/special eds/20060710/1

Clearasmud,
Thanks , will do

[clearasmud]

Try this:

http://abc.net.au/4corners/special_eds/20060710/

Regards

[stolwyk]

Oil $78; Gold $665 and USD down at 85.5

Rockets being fired at Haifa. Lebanese Govt could collapse.

Any reprisals from Venezuela or Iran?

BTW, some Oil from Venezuela, instead of moving to the US is being diverted to China/India.


Gerry

[stolwyk]

http://www.theage.com.au/news/world/lebanon-under-siege/2006/07/13/1152637810739.html

[backtobasics]

Can someone please explain why all Gold shares are going down today when the price of Gold is now over US$660 and there are numerous geo-polictical issues coming to the fore?

Just interested.

[stolwyk]

The US investor uses margins in a big way. The DOW fell 167 points and there had to be a lot of cash raised and this involved selling all shares, including Gold shares.

More such corrections could sometimes result in repeats.

However, sooner or later, people will be buying cheaper gold shares again, particularly as oils rise and the Middle East is in a mess.

[whiteheron]

I had similar thoughts too

Sometimes the market just seems to do things that do not seem logical

Not to worry, I am happy with my holdings and I am sure that they will be fine given a bit of time
Sometimes, I have found, you just have to be a bit patient and look at the big picture rather than the short term

[backtobasics]

Thanks Gerry

Maybe a good opportunity to get some cheap goldies.

Cheers

[stolwyk]

By Ambrose Evans-Pritchard
The Telegraph, London
Friday, July 14, 2006

http://www.telegraph.co.uk/money/main.jhtml?
xml=/money/2006/07/14/cngold14.xml&menuId=242&sSheet=/money/2006/07/1
4/ixcity.html

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

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

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

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

The prices are far above gold's all-time high of $850 at the height
of the oil and inflation crisis in 1980. Gold closed yesterday at
$653.

Buying a call option gives investors the right to buy a quantity of
metal (or shares or other instrument) at a fixed price, on a set
date. If the price falls short, the option expires worthless. If it
shoots above the strike level, traders can make huge multiples on
their stake. "Put" options act in reverse, gambling on a price fall.

Mr. Reade said: "They're like lottery tickets. You lose most of the
time, but when you win, you can win big."

The December 2006 call option with a strike price of 1,000 last
traded at $3.60. This means a bet of $3.60 could net $100 if gold
reaches $1,100 an ounce by December, or $200 if it reaches $1,200,
and so on.

Traders can re-sell options any time before expiry, making fat gains
on wild volatility.

The options are traded on New York's Comex exchange, or on the Over
the Counter (OTC) market. The bulk are issued by UBS, Deutsche Bank,
and Goldman Sachs.

Gold has shown remarkable resilience since crashing from $730 to
$544 an ounce in the May commodity sell-off.

The metal has regained more than half the ground, bringing in a
fresh wave of "black box" momentum traders this week after breaking
through key technical resistance at $637.

Ross Norman, director of TheBullionDesk.com, said gold was still
under-priced compared to oil, trading at about eight barrels of
crude per ounce compared to an historic average of nearer 15.

"Gold is due a catch-up. Once it goes above $750 there is potential
for galloping price rises," he said.

Both the Russian and Emirate central banks are supporting the
market, each buying the dips in a slow move to lift the gold share
of their foreign reserves to 10 percent

It is hard to pinpoint why so many wealthy investors have become
gold bugs, but fears of a dollar slide are a key part of the picture.

The concern is that the US Federal Reserve will ultimately opt for
easy money rather than dispensing bitter medicine to purge excesses
of debt and over-spending. Neither the euro nor the yen are seen as
strong enough to serve as durable alternatives.

Key EU finance ministers have already said they will resist a rise
in the euro above $1.30, while Japan's finance ministry is battling
to hold down the yen.

----------------------------------------------------

To subscribe to GATA's dispatches, go to:

http://www.GATA.org

[stolwyk]

Money Flow Turns Positive for SLV
http://www.resourceinvestor.com/pebble.asp?relid=20785

Comment: It now has 91.5 mill ounces and may close at 100 mill ounces:

http://www.ishares.com/fund_info/detail.jhtml;jsessionid=KL21QLATL0RCORJUGQOBBGSFGR SEWD50?investorType=INST&symbol=SLV&_requestid=124301

I hold SLV

[stolwyk]

Thanks Cujodog.

TROUBLE AT MILL SERIES: EXPECT MUCH HIGHER OIL PRICES

The Israeli war is taking on an ugly dimension: the declaration by the Hizbolla leader for all all-out war.

Sofar, the Israelis had it their own way without too much opposition and their blitzkrieg has caused a lot of damage to the Lebanese infrastructure apart from damage to the bases owned by the Hizbolla.

The Lebanese army is ineffective and they never disarmed the Hizbolla although they should have done so long ago.

The problem is that the latter in reality become the de facto lebanese army and are now given even more legality and sympathy then they deserve.

After the recent bombing of the Beirut Airport, the US asked the Israelis to give Lebanon time to repair the runway so 6 planes could leave, This was done but the runway was later cratered again.

So, many think that the US support the Israelis and Iran has already confessed that they maintain the Shiite Hizbolla.

It is almost certain that IRAN had purposely kept heavy or advanced weapons out of Hizbollas hands but now the stakes are raised, will bring these to to Lebanon to be used by their terrorist offshoot.

That will take a short time and then the fireworks will start with deep penetration of Israel by these weapons.

When the pain really hits, Israel may blame Iran and anything is then possible including some very high oil prices.

I would'nt like to predict the outcome, suffice to say that GOLD will play a role as well. I am not confident that the Cartel can cap the Gold price in these conditions.

Of course both the US and Iran can stop this but will they?

Gerry

[Mick100]

I think that you have come to the correct conclusions Gerry

thanks
.

[stolwyk]

Thanks Mick


TROUBLE AT MILL: Continued

The Iranian Clergy have built up a suicide batallion according to the President.

Presumably, they will be sent to the Lebanon to attack the Jewish city Haifa. While some will get caught others will slip through and complete their heinous work.

If the sum total of the damage to Israel is high enough then at this point, Syria and Iran will become high priority targets, as Israel has much to gain while both haven't any nuclear weapons.

That is unless China could assist Iran but the time factor will be counting. Israel has an excellent Intelligence unit and can be expected to strike before that happens.

Israel can't conduct a war for long without contributions from the Jews in the US and the US Govt. The latter pulls the strings and has condemned Iran on a number of occasions.

The power of the Jewish element in the US is considerable and will count with the US elections to come in Nov.

Of course, any attack on Iran will comfortably up the oil price to possibly over US$100 and will severely attack the US economy at a crucial time. It will drive the US and other countries into a recession or worse with the US Housing sector having a heavy landing.

Stil, there are US interests who think that an Israeli attack on Iran will stop the spread of the fundamentalist Iranian Shiite power which is making its influence felt in Iraq, Afghanistan and other countries.

They may consider that the sum total of positives will outweigh the negatives and that any delay in Iran having a nuclear capability has to be aimed for.

Once the pain becomes unbearable then the Israeli population can be expected to urge the the Israeli Govt for measures against Iran and it is then when a dangerous timeslot has arrived.

The Hizbolla will also need to think as to how far they will go but of course they are controlled by the Iranian Govt. The latter will be accutely aware as to consequences although the economic destruction of the US will always be a priority item.

Will saner minds prevail?

Gerry

[bronson]

How frustrating is it when you decide to buy Gold Stocks, while everyone else is too scared to and then when the price of gold finally starts to skyrocket your gold shares go down.

How are we actually meant to win in this situation?! If gold goes back down then the gold stocks aren't going to go up!

How are we meant to make money from Gold Stocks in the future!

Grrrrr

[Mick100]

quote:Originally posted by bronson

How frustrating is it when you decide to buy Gold Stocks, while everyone else is too scared to and then when the price of gold finally starts to skyrocket your gold shares go down.

How are we actually meant to win in this situation?! If gold goes back down then the gold stocks aren't going to go up!

How are we meant to make money from Gold Stocks in the future!

Grrrrr


As was mentioned on FSO, the hedge funds are probably going long gold and shorting the gold stocks at the same time.
.

[bronson]

Thanks Mick, but that still does not answer my question on how are we ever going to make money from Gold Stocks

[Mick100]

This will just be a short term play by the hedge funds. They won't keep doing it indefanitly.
When you think about it, it appears to be a very clever move on the part of the hedge funds, under the curent circumstances. ie, a weak sharemarket and rising geopolitical tension throughout the world.

[bronson]

This is just ridiculous:

Gold Price goes up yesterday - Gold shares go down

Gold Price goes down today - Gold shares go down

Give me a break!!

[Bel]

Waves are high for commodities but the tide is moving away from sharemarkets into cash.
I think.
lol

[Wossname]

I check my watchlist each morning for the last few days, looking for interesting announcements from my little flock of gold miners - but they're saying nowt. The poor little critters are all hiding under the bed.

[backtobasics]

There is a lot of talk around the traps that Gold is heading back down into the low $500's. Any thoughts?

[kittydashwood]

Gold is closely linked to the Indian stock market. Watch Mumbai and the GLD price move in UNISON.

Market top or hedge funds running the stops?

[stolwyk]

Butler: silver manipulation:

http://www.investmentrarities.com/07-25-06.html

[stolwyk]

An Interview with Gold Forecaster
Excerpts from GLOBAL WATCH:
THE GOLD FORECASTER
by Julian D.W. Phillips
July 26, 2006

http://www.financialsense.com/editorials/phillips/2006/0726.html

[stolwyk]

7.30 am:

Price pressures persist despite slower growth: Fed survey
Beige Book finds evidence pace of growth has slowed
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Greg Robb, MarketWatch
Last Update: 2:10 PM ET Jul 26, 2006


WASHINGTON (MarketWatch) -- Upward pressure from energy and other inputs is persisting, despite reports that the pace of growth in the U.S. economy has slowed, according to a survey of current economic conditions released by the Fed on Wednesday.
All 12 Fed districts said their economies were still growing in the last two weeks of June and the first two weeks of July, but there were "numerous individual reports pointing to evidence that the pace of growth has slowed."
Six Fed districts reported a decline in the overall rate of growth in their regions.
At the same time, pressure on prices from the high price of gasoline persisted and in some cases increased.
While increases in wages and the prices of final consumer goods and services remained modest, there were reports that factories and retailers were finding it easier to pass along such cost increases to the final prices of their products.
Transportation services were able to apply fuel surcharges, one example of firms being able to pass along higher energy costs to their customers.
The Beige Book survey was taken to help the Federal Open Market Committee get a sense of economic conditions on the ground as it prepares to meet on Aug. 8 to set monetary policy for the next six weeks.
It highlights the dilemma facing Fed policy makers, who would like to pause from their steady rate hikes but are worried that persistently high energy prices will spill over into a more general increase in prices unless interest rates are raised further.
Financial markets believe the Fed will pause after 17 straight rate hikes on Aug. 8, but some economists think the central bank will tighten one more time to bring the overnight rate to 5.5%.
The survey, prepared by the San Francisco Fed bank, found that retail sales were slightly weaker through mid-July than earlier in the year.
Activity in residential real estate markets cooled in most parts of the country except St. Louis and Dallas, the survey said.
Slower sales activity has translated into more limited price gains, and the construction of new homes has declined in most Fed districts.
This has led to a weakening in consumer loan demand, the survey said.
The manufacturing sector remained a source of strength, with durable goods boosting the sector.
Labor markets seemed to tighten a bit further in July in most regions. Wages increased at a rapid pace for workers with specialized skills.
The survey found that dry weather was hampering growing conditions for crops in some regions, with livestock producers suffering in the St. Louis, Kansas City and Dallas regions.
The high cost of energy has sparked a significant pickup in domestic oil and natural gas exploration, the Fed said, with labor and equipment shortages commonplace.
Greg Robb is a senior reporter for MarketWatch in Washington.

http://www.marketwatch.com/news/story/Story.aspx?guid=%7B2B6524B4%2D258E%2D4637%2D8EF9%2 D065C8D002D3A%7D&siteid=

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

Comment: No surprises here. Gold up to $625, USD down 0.7 to 85.70 and oil 74.0


Gold on Launch Pad as Rate Hikes Near Their End
John Lee:

http://www.kitco.com/ind/lee/jul242006.html

[stolwyk]

Chris Puplava: RUNNING OUT OF FUEL
http://www.financialsense.com/Market/wrapup.htm


Turk: the trendless dollar:
http://goldmoney.com/en/commentary.php#current


Willie: quack doctors in the house:
Excellent article:
http://news.goldseek.com/GoldenJackass/1153926180.php


Federal Reserve Follies: What Really Started the Great Depression
By Antal Fekete-July 26, 2006
http://www.kitco.com/ind/Fekete/jul262006.html

[tricha]

Mid-East crisis could push oil to $125
By Jorn Madslien
Business reporter, BBC News



Traders fear an escalation of the fighting

Israel's bombing of Lebanon has yet again prompted speculation that oil prices will soon soar above $100 a barrel.

But reality could prove even harsher, according to Deutsche Bank chief energy economist Adam Sieminski.

"Market commentators still seem to view the prospect of $100-a-barrel oil as shocking," he says in a research note.

"The options market is reflecting a more blase attitude to this risk; $125 oil is the new target for bullish trades."

Mr Sieminski has analysed the options market, where plenty of positions have been put in place by dealers who believe a major shock to the economy could soon push oil prices almost $50 above the current historically high levels.

"These options are no longer lottery tickets or bold predictions," Mr Sieminski says.

Falling prices?

However, Mr Sieminski also points out that "getting there likely depends on either a nasty hurricane or an expansion of hostilities in the Middle East".

We are concerned that the situation in the Middle East does indeed have a significant chance of getting worse

Adam Sieminski
Deutsche Bank

Consequently, Deutsche Bank has not changed its price forecast of $65 a barrel during the July-to-September quarter and $70 a barrel during the October-to-December quarter of this year.

"This general view still seems sensible to us," Mr Sieminski says.

"A slower economy and rising oil supply outlook might squeeze markets down toward a $62 a barrel average in 2007," he says, well below his estimated 2006 average of $67.

Middle East crisis

Predicting future oil price movements is about as far away from an exact science as it is possible to get, however.

True, a study of underlying fundamental factors - such as proven reserves, anticipated demand and so forth - means analysts are able to predict what will happen to price if all other factors remain unchanged.

But they cannot predict what will happen on the geopolitical arena: will the fighting escalate or will there be peace? Will there be other conflicts?


Middle Eastern oil exports could be disrupted by wars

Nor can they predict what Mother Nature will do.

But they can make educated guesses, and this is exactly what Mr Sieminski and his fellow commodity market researchers have done.

"We are concerned that the situation in the Middle East does indeed have a significant chance of getting worse," he says.

For this reason, the bank's forecast may turn out to be wrong.

"The risks to this forecast remain to the upside," he says.

Economic risk

Such a development does not bode well for the global economy.

The US economy is already weighed down by rising interest rates and high consumer debt burdens in the US, observes University of Maryland business professor Peter Morici.

With the prospect of rising oil prices, "recession risks remain real and apparent", he says, adding that "with the housing market cooling, consumers are no longer able to use the equity in their homes to finance ever-larger purchases of clothes, electronics and other goods and services".

Similar concerns have been raised in Europe.

"Both energy and food prices look set to keep headline inflation high in July," says Credit Suisse in an analysis of the eurozone economies.

Rising interest rates and higher oil prices will curb consumer demand and hold back economic growth next year, warns the Spanish government.

France, meanwhile, blames expensive oil and concern about a rise in value added tax next year for bearish sentiment there.

[stolwyk]

Trouble at mill series:

US GDP is moving down too fast.

The notional GDP moved from 5.6% in the first quarter to 2.5 % in the last quarter, a very quick unusual fall.

Business investment increased 2.7%, the lowest since the first quarter of 2004, contributing 0.3 percentage points to growth.

The delicate balance between raising interest rates, the housing sector and consumption, the 2% negative savings rate, debt, the defense of the dollar, monetary inflation and price inflation, the latter being fanned by energy prices over which the US has no control, have been discussed previously.

It is acepted that because of manipulation by the FED of the GDP and CPI data, a notional 3% GDP is necessary just to stand still:
http://www.shadowstats.com/cgi-bin/sgs

So, the latest 2.5% GDP is not good news and the USD fell. Timing is not good as elections are due in Nov and Bush would at least expect a leg-up by the FED. Hence the dollar must'nt fall too far.

Real price inflation is thought to be running at about 8% or more, so a relaxing of interest rates hikes will give further impetus to consumers price and gold price increases.

As it is, Gold is well placed IMHO although one can expect the Gold cartel to be active from time to time.

Tightening interest rates could be counter productive in this critical economic moment of time, so the FED may have to tolerate more price inflation coming through, particularly as the PPI (Producer Price Index) is quite high and they will be wanting to feed price inflation cost to the consumers.

The time lag between raising interest rates and their effect can be considerable but is difficult to assess.

Oil producers, particularly Venezuela and Iran don't mind high oil prices and geopolitics as well as terrorism assist as well.

The next quarter is going to be important as the lifeblood of the US, consumption, could be attacked.

Also of interest will be the EEC, who will also be watching interest rates but have more room to move. Increasing ECB rates will depress the USD and could raise US interest rates. The latter as an incentive to foreigners to keep lending the US$2.4 bill daily to the US.

US Stagflation is bedding down!

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

[stolwyk]

CANADA MAY LAUNCH GOLD AND SILVER ETFS
Friday, July 28, 2006 - FreeMarketNews.com

The success of the American gold and silver ETFs has resource rich Canada wanting a piece of the action. Now that the Canadian government has changed legal regulations to include gold and silver as possible investments in RRSPs (Registered Retirement Savings Plans); the Royal Canadian Mint is hiring a legal team to launch tradable products on the Toronto Stock Exchange that are backed by the precious metals, according to the Globe and Mail.

The mint has announced that it has created a budget of up to $1 million to spend on legal services researching different types of tradable products structures that it could take public on the Toronto Stock Exchange. The mint would use either a public offering or private placement to launch the products. Ideally, the gold and silver backed products would resemble the popular American gold and silver ETF’s, and they would be qualified investments for retirement accounts. No timetable for the launch of the products has been set yet.

The Canadian mint has already seen such a large surge in physical demand for the metals that it can’t produce enough in order to keep up.

It refines six million ounces of gold a year into maple-leaf coins and bars. It also refines silver maple leaf coins. Last year the Royal Canadian Mint’s revenues surged by 32 percent as investment demand and metals prices increased.

http://www.freemarketnews.com/WorldNews.asp?nid=17664

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

Gold shortage looms - MEG

http://www.miningmx.com/gold_silver/797553.htm

[stolwyk]

DARK NEW DAY
An excerpt from the PS Newsletter
by Christopher Laird

http://www.financialsense.com/fsu/editorials/laird/2006/0730.html

[stolwyk]

Some aspects of Gold and mining.

1. Re mining, there are a number of risks including increasing cost.
As a yardstick, I would insist on at least 2 grammes/tonne for an open pit mine and at least double that for underground mining depending on depth and envisaged capital expenditure. (At US$650/ounce and $A=0.76, 2 grammes has a value of $A55.0/tonne).

Porphyry deposits normally require a massive initial capital cost to mine and the quality of grades is therefore important.

I do use InSitu value as one of the tools because it is a quick rough estimate. Often a quick decision has to be made to perhaps buy after a Resource update Announcement. But it has to be high enough so little doubt remains about a possible high NPV.

As to Market Caps, I prefer less shares because cash can be raised by offering fewer shares. Hence, if everything were the same, I would leave that company with a high number of shares well alone.

Because there will be plenty of resources, it pays to be on the safe side.

If costs continue to increase then the price of Gold has also to increase. If it does'nt, then the higher grades will be mined first and the supply will be less, given time. Also, exploration could be cut back and be replaced by takeovers.

2. Demand.
Manufacturers are big buyers of Gold and Investment demand has not yet replaced manufacturing demand.
This means that manufacturing demand is tied to seasonal demand by clients, particularly in India who normally are big buyers.

It pays to know the slack periods when overall demand for Gold can be less, more so at high prices when manufacturing demand turns lower.

Real ETF's can take up some of the slack while some mutual Funds can also be large investors in Gold, however, hedgefunds do speculate and can either increase or decrease the price of Gold quite quickly in addition to the subversive tactics being used by the Gold cartel.

Canada will approve investment in Gold by Pension Funds and is preparing for one or more ETFs. Governments may invest in Gold as part of reserves while China, where sofar, the uptake has been minor, offers possibilities. Terrorism and geopolitics can promote Gold as well as a lower USD.

Given time, the sum total of locking in Gold can be quite substantial; however, one still needs adequate manufacturing at this stage, IMHO.

3. Metal or mining shares?
There are different opinions on this. Having metal takes away all mining risks and provided it can't be confiscated, is widely appeciated.

Mining shares can rise more than metal, particularly if there are excellent exploration and mining reports. But after a spike, they can quickly lose value.
Some have lagged lately and ETF's as well as Investment funds are being blamed.

Happy investing!

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

[stolwyk]

"In related news, if you missed it, the Chicago Board of Trade said Wednesday that it will expand its trading hours for its full-sized gold and silver contracts to 24 hours, effective immediately".

The Pause That Will Not Refresh By Peter Schiff
August 4, 2006 www.europac.net

When combined with last week's soft GDP numbers, today’s weak jobs report, which contained an up-tick in the unemployment rate, gives the Fed all the cover it claims to need to ignore evidence of accelerating inflation and finally come through with the highly anticipated “pause.” Global stocks, bonds, foreign currencies and gold will likely react positively to this development. However, in relatively short order, I expect U.S. markets to come under renewed selling pressure, particularly the bond market, as increasing inflation fears and diminished demand for long-term dollar denominated debt undermine the rally.

In my opinion, the relative calm created by the long, slow, and utterly predictable series of ¼ point rate hikes over the past two year has lent primary support for the U.S. dollar and the bond market. Once this prop is removed by a Fed pause, despite a knee-jerk bond rally, I expect both bonds and the dollar to be sold. But what the Fed giveth on the short end, the market will likely taketh away on the long end. Ironically, when the Fed finally stops notching up short-term rates, the market will likely start pushing up long-term rates. This will frustrate the Fed and Wall Street bulls who had hoped that a pause would breathe life into the stagnating economy.

A surge in long-term rates will immediately translate into higher mortgage rates, putting the final nail in real estate’s coffin. The bubble is finally dead, may it rest in peace. Unfortunately the same can not be said for those who bought into it, and those who financed the speculation. For them, and the entire nation for that matter, the real estate nightmare is just about to begin.

Despite the strong likelihood that the hoped-for soft landing for the economy will more resemble a crash and burn, consumer price increases will only accelerate. This will come as a shock to most economists and Wall Street strategists who naively expect slower growth to cool inflation. Unfortunately, when it comes to inflation’s effects on consumer prices, they ain’t seen nothing yet. When the stagflation scenario is finally embraced as fact, things will really start to unravel for the U.S. dollar, bonds, stocks, and real estate.

The dollar fell sharply in reaction to today’s data, with the British pound rising to its highest level in fourteen years. Gold prices surged as well, confirming that the rally in U.S. stocks and bonds will likely be short-lived. Ironically, the mythical “strong dollar policy” which Treasury Secretary Paulson reiterated in robotic fashion only last week in an interview on CNBC, may finally be put to the test. As a result, either it, or the pause, will have to be sacrificed. Either way, it’s bad new for the U.S. economy, its financial markets, and the dollar itself.

[stolwyk]

Taylor: Gas is exploding

http://www.321energy.com/editorials/taylor/taylor080406.html

[methane]

Gas is exploding and so will oil after Bp shuts down the Alaskan pipeline .

[tricha]

Have you got your oiler
BP field closure raises oil price

There was a small spill of oil from the pipeline, BP said
Oil prices have touched $77 a barrel after BP was forced to close one of the largest oilfields in the US because of a pipeline leak.
The indefinite shutdown of the Prudhoe Bay oil field, which produces about 8% of US daily oil output, comes at a time when oil markets are already jittery.

The ongoing conflict in Lebanon has raised concerns about oil supplies, keeping price close to record highs.

Brent crude rose $1 to $77.17 a barrel before easing slightly to $77.10.

US light, sweet crude was trading up $1.04 at $75.80 in Asian markets.

Major impact

BP said it was shutting the oilfield - which produces 400,000 barrels a day - because of corrosion to a pipeline.

Oil prices could increase by as much as $10 a barrel given the current environment

Tetsu Emori, Mitsui Bussan Futures


Check BP shares

"We don't know how long the field will be down but we will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment," said company spokesman Darren Beaudo.

BP is already facing a criminal investigation relating to a leak from the same oil field earlier this year.

Analysts said the disruption would force prices up at a time when the conflict involving Israel and Lebanon was unnerving the market.

"Oil prices could increase by as much as $10 a barrel given the current environment," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

BP shares were down 1.5% at 626 pence in early trading in London.

[stolwyk]

Gold Watch: Bulls bless Bernanke
http://www.resourceinvestor.com/pebble.asp?relid=22647

Venezuela's Chavez playing the energy game
http://www.resourceinvestor.com/pebble.asp?relid=22676

All That Glitters Is Indian Gold
http://www.resourceinvestor.com/pebble.asp?relid=22641

Gold, Silver, Metals and Mining Shares: Part 1 By Lawrence Roulston
http://www.kitco.com/ind/resopp/aug072006.html

Stagflation in control of world economies especially in America and Europe
http://www.indiadaily.com/editorial/12584.asp

[Wossname]

Dear all,

I understand that the yield curves for gold and silver leasing rates (a.k.a libor rates) can be used to discern bullion pricing pressures. For example, writer Antal Fekete seems to say that if the lease price outlook for a bullion reverses from contango into backwardation (that is, into an inverted curve), it may signal upward pressures.

Given that my ability to interpret unprocessed bullion basis tables is like unto a dog watching television, I would greatly appreciate references to sites offering (freebie) updated charts of contango-backwardation data over historical periods ranging from say a day to a year, for similar forward periods.

Sure, I can get a rough idea of contango-backwardation trends from the chart of several lease rate curves supplied on the Kitco home page, but a plot of contango-backwardation would be better. My Google searches haven't borne fruit, so any help would be appreciated.

[tricha]

Peak Oil Passnotes: Buy On the Dips

By Edward Tapamor
10 Aug 2006 at 03:00 PM EDT


PARIS (ResourceInvestor.com) -- They always say buy on the dips. With the purported bomb plot on U.K. and U.S. airlines, we have seen a $2 dip in oil. This seems to have cheered the equity markets. They think people are going to stop flying, stop consuming. It takes the pressure off energy and we see the Nymex take a nosedive.

However this is unlikely to be the case for very long. Firstly we will all have to see the fallout from this latest drama. Did the people arrested have real, serious plans to bomb planes? Did they actually possess explosives? Will this story remain in the public eye for a long time?




If they were caught in the act and they did have a serious, genuine plan to bomb airlines, this could spell excitement for the security services. It could even make people feel more, not less, secure on airlines. When stories like this break, it is hard to see how they can pan out.

So firstly what this shows is that stories that can really move the markets rarely come from where you expect. As focus rested on Lebanon and Iran we suddenly revert in time to plans to attack airliners. Where will the next major jolt be? The failure of the Italian economy? The failure of the Bulgarian economy? The Israeli economy, which has seen a 17% slide in equity values in the last three months?

Or will the market take a deep breath, as it often does, and move on? Let us say the airline plot was credible and real. So the plot was stopped in time. If that is the case, the market will simply keep going. And look what we have been missing.

At the time of writing, ten hostages have been taken captive in the Niger Delta. For the first time ten days ago five workers from Shell were killed in an attack, they made hardly any news, as they were Nigerian. We have flat output from Russia, declining output from the U.K., Norway and Mexico, and the majors cannot add production, as we talked about last week.

Then there are the latest worries from the U.S., where BP's [NYSE:BP; LSE:BP] Alaskan operations face shutdown and the loss of up to 400,000 barrels per day of output. There is a chance some of that output might have to be kept going, despite the perilous state of the pipelines. Basically if too little oil is in the pipelines when the winter sets in, it will freeze and make the whole operation even more complicated. So maybe a little of that 400,000 barrels per day will be kept on.

But the average Texas WTI price of crude now averages over $68 for the year as a whole. Then there is U.S. gasoline demand coming in at 9.69 million barrels a day, which makes seven weeks in a row over 9.5 million barrels a day. Year on year America will not stop guzzling gasoline, with July data showing an increase of 1.7% whilst inventory levels fall despite increased imports. The average pump price is $3.03, just shy of its Katrina records without a sniff of a hurricane.

Then we have Chinese demand, which some small parts of the media reported showing a dip in July from June of 3%. Bearish? Maybe. But the reality is an increase in product imports of - get this - 137% year on year. That’s 137%! Remember China was rationing its gasoline last year to stop its own economy overheating.

So this week has been a very interesting one for the crude market watchers. Geopolitics and demand actually led to a sharp dip in prices. The herd followed the big animals at the front and led the short sharp sell-off. But underneath that sell-off was a set of figures that should give comfort only to the bulls.

[stolwyk]

The world must prepare for America's recession

By Nouriel Roubini

August 10 2006

The odds that the US will slide into recession have risen since last month from 50 per cent to 70 per cent by my estimates. The US Federal Reserve took its foot off the brake on the economy this week when it took a pause in tightening monetary policy for the first time after 17 successive interest rate rises in spite of rising inflation. But it is too late. The Fed might have been hoping for a soft landing for the economy but instead it faces recession. The implications will be felt globally. The rest of the world will not decouple from the US economic train, as some analysts predict. When the US sneezes, the rest of the world still gets the cold.

The US recession will be triggered by three unstoppable forces: the housing slowdown; high oil prices; and higher interest rates. The US consumer, already burdened with high debt and falling real wages, will be hard hit by these shocks.

The effects of the housing slump will be more severe than those following the technology bubble implosion in 2001. The negative wealth effect on consumption of falling housing prices - and the related sharp fall in home equity withdrawal - are also larger than the wealth effects of the collapse of tech stocks in 2000. Property, unlike the tech stocks, is a significant part of household wealth. Finally, about 30 per cent of US employment in the latest recovery has been related to housing.

The second-quarter US gross domestic product figures are an ominous signal: consumption of durable goods are already falling; residential investment is in free fall; and inventories are up as still-high production faces falling sales growth. Higher investment in equipment and software, expected to offset lower spending on housing and consumption, is instead falling.

As consumer demand is slowing, profit-rich companies are not finding good investment opportunities to increase capacity, and are thus returning such profits to shareholders in an unprecedented buy-back bonanza.

In spite of still-rising inflation, the Fed will cut interest rates in the autumn or winter in recognition of a looming recession. But its looser stance will not prevent that recession, for the same reasons the pause applied by the Fed in June 2000 failed to stave off the 2001 recession.

Once the housing and consumption slump starts, demand for durable goods becomes interest-rate insensitive. Indeed, the recent housing bubble has led to a glut of housing stock, consumer durables and lingering excess capital capacity in the rest of the economy. Thus, as we saw in 2000-01, the housing and consumption slump will dominate any monetary easing effort by the Fed.

Will the rest of the world decouple from the US recession? The market consensus now sees a divergence in patterns of global growth, between the US on the one hand and Europe and Asia on the other. But this is only wishful thinking. The world will sharply slow down once the US slumps.

Trade links are one important reason why the rest of the world will be affected. But the oil shock will have the same stagflationary effect on the eurozone and Asia as on the US. Monetary policy is being tightened in Japan, eurozone and emerging markets. Global chief executives' confidence is sharply down and rising geo-strategic shocks are hitting consumer and business confidence.

The fall of the dollar amid the US slowdown will lead to deflationary forces in Europe and Asia, and room for monetary and fiscal easing is much more limited now than in 2001, when the Group of Seven industrialized countries slashed policy rates and eased fiscal policy. There are now serious limits to monetary easing; even though global inflation is up, fiscal policy cannot be eased as almost all of the G7 countries face serious fiscal imbalances.

Implications for financial markets of this global slowdown will be serious; although we may see a rally in the wake of the Fed's pause and later easing, one can expect a subsequent slump in the US equity market. When the re

[stolwyk]

There are numbers and mirrors.

The July retail report deserves some comment:

http://www.marketwatch.com/news/story/B15sFgkq2r8n72VwShHqwhD?siteid=mktw&dist=TNMostRead

The problem is that there is much talk about real inflation currently running at some 8% according to estimates; others say 12%.

That could induce people to buy now before prices rise and that could defeat Bernanke's statement that less activity could cause lower inflation.

There is a considerable timelag between raising interest rates and the effects felt, the latter still working through the economic system.

"In a separate report, the Labor Department reported import prices rose 0.9% in July, with the gains attributed to higher petroleum prices".

The effect of increased Producer Prices is still feeding through as well.

Income growth lags well behind inflation and house prices are consolidating or declining so if the customer wants to spend, he will go deeper into debt. And he won't be able to continue that for long considering that he has a large amount of debt now.

Some are enticed by the "give away" of cars by GM and Ford. While this increases sales, profits are not rising with it.

The recipe for stagflation is still valid regardless of one month's sales data.

Gerry

[stolwyk]

US HOUSING SECTOR: SPECIAL.

Economy often defies soft landing:
http://www.nytimes.com/2006/08/11/business/11econ.html?pagewanted=1&_r=3&ref=business

Extract:
"The chief forecaster at Decision Economics, Allen Sinai, said unemployment would have to rise to at least 5.5 percent, from 4.8 percent today, putting a million more people out of work, before inflation begins to decline".

COMMENT: The Fed has falsified a large range of numbers to make the economy look better than it is:
http://www.shadowstats.com/cgi-bin/sgs

This spans the full economic spectrum. Unfortunately, economists keep on using the Fed's manipulated numbers rather than the real numbers.

Example: A Fed's GDP of 3% is a real growth of some 0%. Actual US unemployment is deemed to be about 8-9% by some economists rather than the 4.8% stated in the quote above.

Smoke and mirrors,

Gerry
_____________________________________________

2 Key Firms' Results Raise Housing Fears
http://www.latimes.com/business/la-fi-homes10aug10,1,6693785.story?coll=la-headlines-business&ctrack=1&cset=true


Chris Puplava:
TUG OF WAR WITH INFLATION AND THE ECONOMY
LIKELY TO CONTINUE TO WEIGH ON FUTURE FED DECISION

http://www.financialsense.com/Market/cpuplava/2006/0809.html

[stolwyk]

South Africa:


Surface gold 'is running out'

Thu, 10 Aug 2006
Gold's production decline came under the spotlight on Thursday, as Statistics SA said production plummeted 9.5 percent year-on-year in June.

Gold's continuing production tumble put SA's entire mining production under pressure, with production falling 1.2 percent year-on-year in June. Non-gold production inched up by a modest 0.5 percent year-on-year.

June's disappointing gold production figures bring to an end a poor second quarter for the sector. Gold production for the June quarter 2006 plunged 6.9 percent lower than the same quarter last year, despite the value of gold sales climbing steadily on the back of a higher gold price

Gold sales surge

Sales figures for May show that gold sales increased by 39.4 percent year-on-year, in a month in which gold production fell by 12.8 percent year-on-year.

Much of this decline in output can be explained by the long-term trend of falling gold production, as ore deposits at the surface have become increasingly depleted.

Production must also have been significantly hampered however by the 35 percent reduction in Western Area's second quarter output compared with the first quarter, following its damaging skip accident in its main shaft in its South Deep mine on May 4 2006.

While higher gold prices should be encouraging producers to increase output at the margin, physical supply constraints undoubtedly remain in the sector, and may be adding to the upward price pressure.

Mine deeper

Recently gold producers have signalled their intent to invest in operations to mine ore at greater depths. Mining houses have indicated that the constraints to mining ore at greater depths have not been technological but rather economic.

In the face of a significantly weaker rand than in the first quarter of 2006, and higher gold prices on the back of the recent bull run on the yellow metal, mining house such as AngloGold Ashanti and Gold Fields are looking to invest about R6.1-billion in digging deeper at existing mines.

That gold production continued to lag in the second quarter of 2006 is evidence that investment to increase output takes a long time to implement. As these investments reach fruition, an upswing in gold production is likely, probably toward the end of 2006 and early 2007.

http://business.iafrica.com/news/919925.htm

[stolwyk]

KJ Gerbino, outstanding practical writer:
Gold Mining Stocks: Blood, Sweat and Tears
http://www.kitco.com/ind/Gerbino/aug112006.html


The Outlook For The Dollar Worsens
By James Turk
August 14, 2006

www.goldmoney.com

The Federal Reserve has stopped raising interest rates. Therefore, the logical question to ask ourselves is whether their decision has changed anything. I think it has.

While the Fed was raising interest rates, one could reasonably argue that its aim was to fight inflation, which continues to climb. In the 12 months ending June 30, 2005, the Consumer Price Index rose 2.5%. However, in the 12 months ending June 30, 2006, the CPI rose 4.6%. This comparison shows that even by the governments own calculation, which I believe understates the true rate of inflation, it is clear that inflation is a growing problem.

So now that the Fed has stopped – at least for now – raising rates, it seems clear that they are focusing on something other than inflation. The object of their redirected attention is clear. The Fed has become focused on the economy.

With the slump in housing becoming obvious, coupled with $70+ crude oil imposing a onerous burden throughout the country, the economy is slumping. So the Fed has changed its priorities. Instead of fighting inflation, the Fed instead is now trying to avoid a recession.

The implications for the US dollar are ominous. The Fed and Treasury Secretary Paulson can try intervention to mop up surplus dollars from central banks and others who are choosing to reduce their dollar balances. They can also try talking up the dollar. But it is not ‘talk’ that the dollar needs. It needs purposeful action, like raising interest rates to make the dollar more attractive when compared to other currencies. It is therefore noteworthy that the European Central Bank and the Bank of England raised their interest rate this month while the Fed sat on its hands. It is also noteworthy that gold and silver continue to hold up as well as they have.

A year ago gold was $442, and silver was $6.95. From those prices both precious metals began to rally and continued to climb higher for nine months. Then after making multi-decades highs in May, both gold and silver began a correction, which continues. So even though gold is 12% below its high, while silver is down 20%, the bigger picture tells us a different and more important story. Namely, over the past twelve months gold and silver have risen 43% and 70% respectively.

Given the shift in focus by the Fed from fighting inflation to avoiding a recession, more gains for gold and silver are likely. So view the current correction from a different perspective. This correction is a good buying opportunity.

Look across the valley. Look at the problems debasing the dollar, from rising federal government debt to central banks diversifying out of the dollar (the Bank of Italy being the latest in a long list of central banks taking that course of action). Then consider the implications of a Fed focused on avoiding a recession instead of preserving the purchasing power of the dollar. It won’t take long to recognize that the dollar’s exchange rate will head lower and inflation will worsen.

Gold and silver are the best way to protect oneself from today’s growing inflation, and the worsening inflation already ‘baked into the cake’.

In the Monday, August 7, 2006 issue of Barron’s I was asked about my gold outlook. I replied: “It's going up because of growing inflationary expectations and rapid money-supply growth.” I was then asked whether gold should be bought now or to wait for the correction to dig deeper. My response was: “If I'm right and we're going to $850 and eventually four digits, does it matter whether you buy at $620 or $630?”

Therefore, view the current correction in gold and silver as a buying opportunity. Given that the correction is three months old and the Fed is now on ‘hold’, it seems likely that this current buying opportunity won’t last much longer.

++++++++++++++++++++++++++++++
Comment:
We are get

[stolwyk]

Resurgent Germany overtakes Britain and US

· World Cup effect brings fastest growth for 5 years
· Euro rate rise expected as France also bounces back

David Gow in Brussels
Tuesday August 15, 2006
The Guardian


The mainland European economy, buoyed by a resurgent Germany, is expanding at its fastest rate for six years, outstripping Britain and the US, fresh figures showed yesterday.
Domestic euphoria over the football World Cup held in Germany boosted the country's economy, which grew by 0.9% in the second quarter, the fastest growth for more than five years, government figures showed.

Domestic investment and a rise in consumer spending have overtaken exports as the main impetus for economic growth. "For years we Germans have seen the glass as half-empty; now, at long last, it is half-full," one chief executive said, expressing the hope that the optimism generated by the summer Fussballfest would continue for the rest of the year.

The bounce in the German economy was reflected elsewhere in Europe, according to EU figures. The French economy expanded 1.2% in the second quarter, its fastest rate for six years, and economists expect the European Central Bank to raise interest rates twice more this year to 3.5%. In the second quarter, the US economy grew by 0.6% and the UK 0.8%. "Europe is in the lead," said Holger Schmieding, economist at the Bank of America.
The European commission indicated it could raise its 2006 full-year growth forecast for the eurozone in the autumn. It is now at 2.1%. Brussels edged up its third-quarter forecast but trimmed its final-quarter estimate, partly due to evidence that some of the steam went out of the economy in July.

But the second quarter could mark the peak for eurozone growth, according to Howard Archer, chief UK and European economist at researchers Global Insight. "A stronger euro, slowing global growth, very high oil prices, higher interest rates and tighter fiscal policy in several countries (notably Germany and Italy) threaten to exact an increasing toll on eurozone growth ... We forecast it to moderate from 2.3% in 2006 to 1.6% in 2007," he said.

Germany is finally shaking off the gloom of the past decade when consumers reacted to record postwar unemployment by saving rather than spending. Official forecasts showed the economy expanding by 1.6% this year but many economists have raised their forecasts to 2.3%. The Federal statistics office in Wiesbaden revised its first-quarter figures from 0.4 to 0.7% growth and said growth in the first half was 2.4% compared with the same period last year.

Michael Glos, economy minister, stuck to the official forecast but declared: "The economic knot of the last few years has finally been broken. The upturn has gained in strength and breadth. The situation on the labour market has significantly improved. Therefore the prospects for this year are exceptionally positive."

Business confidence was close to a 15-year high, although chief executives were divided on the prospects. One emerged from a recent meeting with Chancellor Angela Merkel and senior ministers in despair about the chances of reform, notably in tax, health and the labour market.

Another, an avowed supporter of Ms Merkel, insisted Germany's first woman chancellor had breathed new optimism into a more youthful, more flexible society. Companies, having shed hundreds of thousands of jobs, were now starting to take on labour and invest.

Further evidence of a German upturn came with confirmation that the tax take in the first seven months was €20bn (£13.5bn) more than a year ago, and €10bn more than budgeted. This prompted calls for corporate tax cuts and reductions in national insurance contributions.

Economists have calculated that the planned 3% jump in VAT from January 1 next year to 19% will spur consumer spending in the second half of this year. Opponents of the increase have begun arguing that the government's healthier fiscal position made the rise redundant.

Wolfgang Franz, head of the Centre for European Economic Research, told Sp

[stolwyk]

The Strategic Implications of the Lebanese Cease-Fire
Drafted By: Dr. Federico Bordonaro, Jean-Philippe Miginiac
http://www.pinr.com

Following U.N. Resolution 1701, a cease-fire between belligerent forces in Lebanon began on August 14. During the first hours after the cease-fire took effect, both the Israeli Defense Forces (I.D.F.) and Hezbollah were abiding by it, notwithstanding isolated incidents.

Security issues concerning the region's stability and the risks for the U.N. international force that will be sent to Lebanon within ten days are now the main concerns for global and regional powers. At the same time, the 2006 Israeli-Lebanese conflict and the subsequent U.N.-sponsored cease-fire are having important political and strategic implications for the Middle East's balance of power and, more generally, for the global geopolitical chessboard.

Speaking to Lebanese television network al-Manar on the evening of August 14, Hezbollah's leader Hassan Nasrallah delivered a significant speech. He called Hezbollah's performance in the conflict a "historical and strategic triumph." Nevertheless, his statement was expected, as part of the "battle of communiqués" in which both sides claimed a clear victory.

The political importance of Nasrallah's words lie instead in the political plans that emerge from some key phrases. He made clear that the Shi'a militia's heavy armament "will constitute the basis for a strong Lebanese state," thus proposing himself and his organization as an all-national leadership and explicitly de-legitimizing the Lebanese army, saying that it is "unable to protect the country in case of war." He then concluded by saying that Hezbollah will actively take part in humanitarian assistance for the hard-hit population and called it "immoral" to even talk about the militia's disarmament.

The problem for the United Nations is that Resolution 1701 explicitly calls for such a disarmament; in paragraph 8, it states that "there will be no weapons or authority in Lebanon other than that of the Lebanese State" and, in paragraph 11e, it decides that the multinational force shall "assist the Lebanese armed forces in taking steps towards the establishment of the area as referred to in paragraph 8."

Moreover, because the United States and the European Union agree that Beirut's government must regain full control of its national sovereignty, Nasrallah's declarations directly challenge their views and signal Hezbollah's not-so-hidden political agenda: the progressive rise to Lebanon's dominant political and military force.

Therefore, the ground has been prepared for a difficult political, diplomatic and strategic task. Political and military decision-makers must not underestimate the serious security issues that will concern troops sent to Lebanese territory and the political consequences of a possible deterioration of the post-cease-fire context.

The U.N. Resolution and its Security Implications

With Resolution 1701, the United Nations decided to strengthen its current mission in Lebanon that was established in 1978 by raising its numbers to 15,000 units in order to support Beirut's army, which is called upon to guarantee the full implementation of the Taif Accords (1989) and of U.N. resolutions 1559 (2004) and 1680 (2006). France agreed to take the leadership of the force, while Italy will provide up to 3,500 personnel. Spain, Portugal, and Finland will also count among the likely participants, while Australia, Canada, Malaysia, and Indonesia are among the non-E.U. countries that are considering sending troops. Israeli Foreign Minister Tzipi Livni told the press on August 14 that Israel's approximately 30,000 troops would withdraw from southern Lebanon only when the U.N. units arrived.

As with every U.N. resolution and international accord, it is important to pay attention to the details and the language of the text. Apart from the above mentioned paragraphs that will inevitably cause friction with Hezbollah, the crucial issue is that of the rules of engagement regarding the multination

[stolwyk]

ECONOMIC REPORT
Core wholesale prices fall 0.3% in July
Pipeline inflation builds with 7.9% rise in core intermediate PPI
http://www.marketwatch.com/news/story/Story.aspx?guid=%7B2779157D%2D5812%2D4D53%2D85ED%2 DFA3162BE3AF5%7D&siteid=

ECONOMIC REPORT
Home builders' confidence plunges to 15-year low
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BC63296BD%2D60D8%2D44B9%2DAFEC%2 DE60DE1D70D47%7D&siteid=mktw

U.S. June capital flows rise to $75.1 billion
ECONOMIC REPORT
http://www.marketwatch.com/news/story/Story.aspx?guid=54cda584-29a6-4670-b5f9-75f514504ac9&siteid=mktw&dist=morenews

Why You Must Buy Gold, or Even Better, Silver, Now
http://www.kitco.com/ind/stansberry/aug152006.html



GOLD: GLD: http://www.streettracksgoldshares.com/us/faq/faqs.php

SILVER: http://www.ishares.com/fund_info/detail.jhtml;jsessionid=GR32M3BELKZIWRJUGQOBBGSFGR SEWD50?investorType=INST&symbol=SLV&_requestid=124301&_requestid=75544

Comment: I holf physical Gold and Silver in GLD and SLV, the latter may close off at 100 mill ouinces (It has 97 mill ounces now).

The USD slipped 50 cents to 85.0 after receiving above mentioned economic reports: stagflation IMHO.

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

[stolwyk]

Subject demand and supply: pricing variables
Stock Code GOLD - Gold Metal Au 79
Posted 16/08/06 17:39
Posted by stolwyk

Post #1206854 - 72 reads
Start of thread

DEMAND

Monarch Gold Mining has some interesting charts: http://sa.iguana2.com/cache/1e17df4ba7ece0347c40d8533ef4e38c/ASX-MON-330731.pdf

Page 36: Demand from:
Jewelry: 73%
Electronics: 7%
Other industrial: 2%.
Dentistry: 2%
Bar hoarding: 7%.
Coin: 3%
Medals: 1%
ETF: 5% and growing.
Comment: It is clear that manufacturing of jewelry is of overriding importance. The Japanese lent out massive reserves of yen very cheaply some time ago and these financed the Hedge funds which in turn drove up Gold prices to US$730.

This in turn affected the jewelry trade and consumers stayed away. Then the Japanese suddenly tightened up and drained massive reserves from their banking system. increased interest rates and there was an unusual squeeze on the Hedge funds who had to suddenly liquidate stocks including Gold stocks in a hurry.

Gold share prices fell while jewelry demand was still at a very low ebb. The current $625 price ought to be attractive again but big buyers of Gold for manufacturing hate too much volatility.

Seasonal demand for jewelry needs to be taken into account with the Bridal Indian season to start in Sept followed by others before X-mas. So the buyers could be supporting Gold prices from now on till well after X-mas. Gold prices are more likely subject to falls outside seasonal demand for jewelry.

Page 32 mentions that India used 23% of manufacturing demand, Middle East 20%, rest of East Asia 18% and Europe 16%. These were the main fabricators of jewelry.

A number of pricing factors can increase/decrease Investment demand, eg monetary inflation, the price of oil and the USD value as well as geopolitical and terrorist problems amongst others. Nations may well increase Gold reserves as part of Currency reserves. More real ETF investment will steady Gold prices by locking in Gold: GLD now has some 388 tonnes and there there are more ETFs on the way. Still, it will take some time before alternate investments apart from jewelry production become really meaningfull.

SUPPLY
Mine supply is less than overall demand but additional gold can come from sc rap, hedging. Gold from Central Banks is now tied to a total supply of 500 tonnes per year- any not sold is not transferable to other years- unofficial dumping has been referred to as well: It seems that Bullion Banks may at times lend out gold.

The US Govt PPT (Plunge protection team) may also try to bring Gold prices down either by dumping or shorting by paper: this is to show that inflation is down because Gold is a strong barometer of inflation.
So, the Demand /Supply market is not free and paper far outweighs physical quantity of Gold produced. It is thertefore important to increase DEMAND.

Page 30 indicates that demand will firmly exceed supply in 2008.

The WGC (World Gold Council) produces its sets of Demand/ Supply statistics:
http://www.gold.org/value/stats/statistics/gold_demand/index.html


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

[stolwyk]

Gold market in deficit in Q2 '06 - Virtual Metals

The global gold market remained in deficit in the second quarter of 2006 because of continued dehedging and slower sales by central banks, precious metals consultancy firm Virtual Metals said.

Total world demand at 973 tons in the quarter outpaced gold supply of 963 tons, leaving a deficit of 10 tons, the firm said in a statement.

The deficit was calculated at 86 tonnes in the previous quarter.

Dehedging added a net 159 tons to demand in the second quarter, higher than the previous quarter's 153 tons, while central bank sales were just a net 85 tons, down sharply from 107 tons in the first quarter of 2006.

"These were enough to offset most of a continuing decline in jewellery demand, increased scr ap and a sharp fall in ETF (exchange traded funds) offtake - down from 109 tons in the first quarter to 43 tons in the second quarter," it said.

"Thus the fundamentals continue to provide a powerful explanation for the strong price," it said.

Gold was quoted at $626,40/627,40 an ounce by 0850 GMT on Wednesday, up 21% from the start of the year, but 14% lower from a 26-year high of $730, hit in mid-May.

Virtual Metals saw dehedging sharply slowing in the rest of the year and central bank sales picking up.

http://www.engineeringnews.co.za/eng/news/today/?show=91948
+++++++++++++++++++++++++++++++++++++++++++++++

RISING GOLD PRICE PUSHES SPENDING ON GOLD TO RECORD HIGH IN Q2’06
http://www.kitco.com/reports/wgc/aug162006.pdf

Soaring energy prices push consumer price index up 0.4%
ECONOMIC REPORT
Core CPI rises modest 0.2% in July
Soaring energy prices push consumer price index up 0.4%
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Rex Nutting, MarketWatch
Last Update: 10:09 AM ET Aug 16, 2006


WASHINGTON (MarketWatch) - The main gauge of consumer inflation eased back in July, rising just 0.2% after four months of 0.3% gains, and reducing the likelihood that the Federal Reserve Board will need to raise interest rates at next month's policy meeting.
"The combination of relatively benign core inflation and weak housing in July reinforces our view that the Fed is finished tightening for this cycle," said Douglas Porter, an economist at BMO Nesbitt Burns.
While the core CPI, which excludes food and energy prices, was up 0.2, soaring energy costs pushed the total CPI up 0.4% in July, as expected by economists surveyed by MarketWatch. The economists were expecting core prices to rise 0.3%, although a sizable number were predicting the 0.2% rise that was reported. See Market Snapshot.
Markets rallied on the tame inflation news, and on the weaker-than-expected housing and industrial production reports. Stocks opened higher, while the yield on the benchmark 10-year note fell to 4.88%. See Market Snapshot.
Futures markets now expect no further Fed rate hikes.
Core prices - which exclude food and energy costs - have risen 2.7% in the past year, the highest since late 2001. Core inflation is running about a half percentage point above the Fed's comfort zone.
So far in 2006, core prices are rising at a 3.1% annual pace, a key reason why the Fed increased overnight interest rates at 17 straight meetings over two years before pausing last week.
The CPI is up 4.1% in the past year, compared with a 4.3% increase in the 12 months ending in June.
It's "a bit too soon to celebrate the demise of inflation," said Stu Hoffman, chief economist for PNC, who expects the Fed to raise rates again.
Higher prices offset wage gains in the month, the government said in a separate report. In the past year, real (that is, inflation-adjusted) earnings fell 0.1%. Real hourly earnings are down 0.5% in the past year.
In another report, the Commerce Department said housing starts fell 2.5% to a seasonally adjusted annual rate of 1.80 million in July, slightly below the 1.82 million expected and the lowest since November 2004. Building permits plunged 6.5%, the biggest drop in seven years. See full story.
The Federal Reserve said industrial productio

[stolwyk]

No Longer Over a Barrel
http://www.resourceinvestor.com/pebble.asp?relid=22781

Gold Watch: The exodus from the dollar begins
http://www.resourceinvestor.com/pebble.asp?relid=22908

[stolwyk]

Global: Not Much Fizz Left in the Global Economy
Stephen S. Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20060814-mon.html


Russia: Algeria Deal Revives Talk Of Gas Cartel
http://www.rferl.org/featuresarticle/2006/08/FE02CC18-3382-464F-B2BC-58A140E035EF.html

Associated Press: 18 Aug.
WASHINGTON -- The federal deficit will total $1.76 trillion over the next decade, and could be double that estimate if President Bush's tax cuts are made permanent, the Congressional Budget Office said yesterday.

The $260 billion deficit forecast for the current budget year, which ends Sept. 30, is $112 billion below the office's last estimate, in March.

The bulk of the improvement came from a gusher of tax revenues this year, reflecting a rebounding economy and healthy corporate profits.

But the budget office forecast the improvement as short-lived, projecting the gap between revenues and spending will rise to $286 billion in 2007 and total $1.76 trillion over the next decade.

The deficit picture, according to the budget office, would be even worse if Bush succeeds with a top domestic priority, persuading Congress to make permanent the tax cuts of his first term.

They are set to expire at the end of 2010.

Extending the cuts through 2016 would add $2.2 trillion to the deficit.

The cost would climb to $3.26 trillion if a permanent fix is made to the alternative minimum tax, which is designed for the wealthy but is ensnaring more middle-income taxpayers.

[stolwyk]

First Nickel, Then Silver?
By: Theodore Butler
http://news.silverseek.com/TedButler/1156198042.php



Casey: What’s Next for Silver
http://www.kitcocasey.com/displayArticle.php?id=902


Is The "Commodity Super Cycle" Fizzling Out?
Dorsch:
http://www.kitco.com/ind/Dorsch/aug212006.html

[BackOffice]

Greetings Stolwyk

Thanks very much for you efforts keeping this tread informed, please continue.

It seems the middle east situation is a major influence in the world today but we hear so little about it in NZ, we hear about the Moari Queens passing on, kidnapping but nothing about the info in the links you post.

Thanks Again

[stolwyk]

Thanks for that!

TROUBLE AT MILL SERIES: Is the US in recession now?

There are those who think that this recession will start in early 2007.

The nature will be stagflation, where inflation will play a significant role.

Our eminent economist J Williams ignores the noise from Wall Street where economists and other servants are trying to have their opinions comply with what their bosses or important clients insinuate.

Based on research he found that because of fraudulent treatment by the FED of GDP and CPI data, the Fed's GDP needs to be about 3% which corresponds with a real GDP of 0%:
http://www.shadowstats.com/cgi-bin/sgs

The FED's July GDP fell heavily to 2.5% and current forecast is about 1.5% at year end.

So, unless there is a magic bullet, contraction started on 1 July and based on 3 months GDP data back to back, we could be in a recession now.

There are a few increases in activity spots but the crucial indicators point to a slowing of the US economy.

Chinese wages are rapidly rising and US import prices are due to rise as well. The US PPI (Producer Price Index) is roaring ahead and oil is above $70. PLenty of inflation to come yet!

Treasury is busy manipulating the markets and particularly the USD which has no reason to rise. However, as mentioned, this item is jealously being guarded as elections are due in Nov. and a shocking reversal in the value of the dollar won't do.

Stagflation is alive and well!

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

[stolwyk]

The power of compounding calculations-Resource wars.

This year, China is gunning for 11 % growth and its oil demand is running at 14% above that of last year.

That dwarfs any savings made anywhere else; China also has to produce more output using less oil, it has been somewhat wasteful up till now.

As its demand for commodities grows to keep in step with its overall growth, the compounding factor is becoming important.

Total demand is a great deal more now than 5 years ago, so compounding demand using yesterday's initial demand results in a massive increase in annual demand.

At 10% compound, it takes 7 years from today to double total demand to come from mines not yet developed and from ore not yet discovered. No wonder China can see shortages in the future and will try to lock in as many resources today to be used in the future.

This keeps up pricing of commodities now while later on, due to shortages and strikes/terrorism or refusal by Governments to tolerate mining unless at exhorbitant penalties ( Make hay while the sun shines) pricing will increase or be maintained.

Even at a much lower 6% growth, it takes 12 years to double China's demand. Demand will slow from its hefty 11% due to economic measures it will take to overcome its heated economy or recession by the US.

However, its internal consumption is small compared with that of the US, so it will get hit if the US situation really turns out bad. Rest assured that China will do everything to protect itself even if it has to increase the US deficit financing.

Of course, add India and some other fast growing SE nations to the equation and there is a massive demand right now!

The Opec countries are also furiously building their cities and infrastructure and all oil rich countries have money to spend on this.

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

[stolwyk]

US HOUSING AND ECONOMY: SPECIAL

I mentioned that the US due to the US housing crisis is most likely in recession now and that the nature will be stagflation. The flow-on effects on the econonomy have also started to be felt.

Real Estate’s Crash Landing _ By: Peter Schiff, Euro Pacific Capital, Inc.
http://news.goldseek.com/EuroCapital/1156523718.php

WASHINGTON (MarketWatch) -- The United States is headed for a recession that will be "much nastier, deeper and more protracted" than the 2001 recession, says Nouriel Roubini, president of Roubini Global Economics.
http://www.marketwatch.com/News/Story/9mQrL6tbQK62XTQ1VjX5zm9?siteid=google&dist=TNMostRead

Inventories of unsold homes rise to 11-year high
http://www.marketwatch.com/news/story/Story.aspx?guid=%7BAE9BDC2A%2D6D7E%2D4699%2D98C9%2 DA59531265691%7D&siteid=


The difference a year makes:
Recent data quantify housing cooldown (year-over-year changes).
Builders’ sentiment -52.2%
New-home sales -21.6%
Purchase-mortgage applications -20.9%
Building permits -20.8%
Housing starts -13.3%
Existing-home sales -11.2%

Existing-home inventories +39.9%
New-home inventories +22.4%

[stolwyk]

SILVER ETF's:

The Barclays Silver ETF sold about 98 mill ounces:
http://www.ishares.com/fund_info/detail.jhtml;jsessionid=KL21QLATL0RCORJUGQOBBGSFGR SEWD50?investorType=INST&symbol=SLV&_requestid=124301

And that is a remarkable performance as the inception date was 21/4/2006.

I think that the current firm Silver price owes something to this ETF.
But it could clear some 100 mill ounces in 2007 as well, considering they nearly cleared that amount in just 4 months sofar.

Obviously, this ETF gives Silver some strong support at present and should there be much bigger demand outside this ETF, then there could be some explosive action as the ETF's uptake of Silver will speed up particularly as some Funds who are not allowed to buy shares will enter this ETF.

Turk who operates a Gold business, has diversified into silver as well, so more metal will disappear from the market:
http://goldmoney.com/index.php

______________________

Canada is moving into Gold and Silver ETF's and that would be a worthwhile addition to the coins they sell:
THE CENTRAL FUND OF CANADA: GOLD and SILVER ETF:

Registered with 34 mill ounces of silver and some Gold:
Central Fund Closes U.S. $60,775,000 Share Issue
2006-08-03
http://www.blackenterprise.com/yb/ybopen.asp?section=ybbf&story_id=96333356&ID=blackenterprise

Extract:
Central Fund of Canada Limited (est. 1961) is an exchange tradeable refined gold and silver bullion holding company. Class A shares are qualified for inclusion in many North American regulated accounts. Bullion holdings are stored on an unencumbered, allocated, segregated and insured basis in the treasury vaults of a major Canadian bank and are audited semi-annually in the presence of Central Fund's auditors and bank representatives. Class A shares are quoted on the AMEX, symbol CEF and the TSX, symbols CEF.A (Cdn. $) and CEF.U (U.S. $).

Information regarding Central Fund of Canada Limited is available at http://www.centralfund.com

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

That ETF ought to do well. As the silver price rises, we may see other ETFs branching out into Silver as well.

We are still waiting for developments in Mexico where there is increased talk of introduction of silver coinage into the monetary system.

The future looks bright: the more Silver removed from the market, the better.

Interview with Ted Butler:
http://news.silverseek.com/TedButler/1156534717.php


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

[stolwyk]

Tactical Silver Trends 5
http://www.zealllc.com/2006/tacsilv5.htm

Worldwide gold mining picture in trouble
http://www.mineweb.net/american_notes/960248.htm

International Forecaster August
http://news.goldseek.com/InternationalForecaster/1156703030.php

Interview With Ted Butler By: James Cook & Ted Butler
http://news.silverseek.com/TedButler/1156534717.php

Aden sisters: COMMODITIES ARE STILL HOT
http://www.gold-eagle.com/editorials_05/aden082306.html

[clearasmud]

Great article on shell
http://www.forbes.com/global/2006/0904/112.html?partner=yahoomag

Iran Producing below OPEC quota
http://www.cattlenetwork.com/content.asp?contentid=63641

Oil driven energy era coming to an end?
http://southeastfarmpress.com/news/082406-energy-era/

Blackburg researchers enhance oil production
http://www.roanoke.com/news/nrv/wb/wb/xp-79759

Crude oil charting
http://www.321energy.com/editorials/chan/chan081906.html

Was the war in Lebanon fought over oil?
http://www.321energy.com/editorials/bainerman/bainerman081606.html

[stolwyk]

The How And Why Of Gold Price Manipulation
FN Arena News - August 30 2006

By Greg Peel

There are none more passionate than those the world calls "gold bugs". Sid Reynolds is an FN Arena reader and states emphatically "I am not a gold guru". However, Sid has followed the accusations put forward by the US-based Gold Anti-Trust Action Committee (GATA). From various sources, Sid has collected evidence from experts supporting the GATA theory. He was keen to share his summary with FN Arena.

FN Arena introduced GATA's theories in the article "Did the US Government Manipulate The Gold Price Down?" (Commodities, 01/08/06). Further questions were raised in the more recent "Gold Sales Continue To Confuse" (Commodities, 25/08/06).

Sid suggests that in order to explain the how and why of gold price manipulation, and why it's "covert, illegal and unfair", one needs to consider six aspects – motive, means, proof, opportunity, track record, and impact.

The finger of blame for gold price suppression is most often pointed at the US government, although the central banks of the UK and Germany, amongst others, are also said to have been in on the act.

The US government's motive for covert gold sales is firstly to keep interest rates low by deceiving bond markets about actual inflation levels. This sets in track the effect of lower gold price = lower inflation = lower bond price = higher stock market. It is also a means of supporting the US dollar, such that lower gold price = higher US dollar.

Sid adds that higher stock market = better re-election chances. (In terms of propping up the US dollar, this is more than just a case of = higher stock market etc. As the benchmark and safe haven currency of the world, US dollar assets are held extensively by central banks all over the globe. A falling US dollar is bad news for all economies, but it is particularly frustrating for bounteous America. It undermines America's capacity to be the wealthiest, most powerful nation on earth.)

The US government prefers to maintain a strong dollar relative to other currencies, by whatever means.

There is also a motive for gold price suppression from the world's so-called "bullion banks", being large global investment banks carrying a surplus of bullion (Goldman Sachs, JP Morgan, Morgan Stanley, Deutsche Bank for example). By using gold they can access a huge source of capital for spectacular gain, provided the gold price does not rise. More on that later.

Before moving on to Sid's summary of the means of gold manipulation, let's take in some history.

The Great Depression of the 1930s came as a bit of a shock to a world previously enjoying the abundant fruits of a post-Industrial Revolution world. Leaders of the developed world agreed that a mechanism needed to put in place amongst them in to keep currency movements within an orderly range and to head off any further shocks. Thus towards the end of WWII an agreement was signed which pegged currencies against the value of gold. This was known as the Bretton Woods agreement. A keeper of the rule book was established in the form of the International Monetary Fund (IMF).

To facilitate the arrangement, it was agreed the world's official gold reserves would be stored in the US – at Fort Knox. By the early 1970s, Bretton Woods had broken down. By default, the US dollar became the pseudo-benchmark for world currencies anyway, as the "peg" system related to the dollar-denominated gold price.

The US was the economic superpower in the first half of the twentieth century, but after the war Japan and Germany started catching up. Artificial overvaluation of the US dollar, and the US refusal to "pay" for the Vietnam War, led to Bretton Woods being "floated". While the US dollar remained the benchmark, the control now lay with the IMF.

In 1974 there were 12,500 tonnes of official gold in earmarked accounts at the Federal Reserve. At the end of 2005 this figure was 8,967 tonnes. It must be appreciated that gold is not a consumable, and that the total amount of gold existing in the

[tricha]

I hope the one pundit that is tipping a gold price of US$2,000/oz as early as next year, is right Jerry.

I'll be semi retired. [8D]

[stolwyk]

The problem is that if his prediction turns out wrong, he will get lost.


Japan’s Fuzzy Math and European Scare Tactics
http://news.goldseek.com/GoldSeek/1156863720.php

Mogambo Guru: Fear Of The Unknown
http://www.kitco.com/ind/Daughty/aug302006.html

Germans Leave in Record Numbers, Fleeing Unemployment (Update2)
By Rainer Buergin
http://www.bloomberg.com/apps/news?pid=20601082&sid=aaiYvU1EuM2A&refer=canada


R. Watson: The Limits to Gold and Silver Growth
http://www.kitco.com/ind/Watson/aug302006.html

Extract:
"According to the aforementioned USGS data, estimated global gold reserves have been on a downtrend while world mine production has failed to exceed its 2001 high despite increasing demand. Like Peak Oil, the big discoveries have been made and companies are now scouring the Earth to find smaller and lower quality ore deposits. The signs are ominous that the days of ever increasing gold reserves and production may be well and truly over.

Herein lies the raison d’etre of the gold bull market. Decreasing supply and increasing demand. If you are holder of some of the gold that is currently above ground, that can only be good news".
_________________________________

Fed May Tolerate Faster Inflation as Housing Sags, Growth Slows
By Craig Torres
http://www.bloomberg.com/apps/news?pid=20601087&sid=aL98FDoN5J08&refer=home

[stolwyk]

Silver has moved from 12.0 and is now 12.90
Those having silver stocks may want to follow silver prices.

I hold silver stocks as well as SLV, an ETF (physical)


Gerry

[stolwyk]

PROFITING FROM THIS "DEFLATIONARY" INTERLUDE
Are Gold and Silver The Miner's Canary?
by Deepcaster
http://www.financialsense.com/fsu/editorials/2006/0901.html

The Silver Bullet
http://www.gold-eagle.com/editorials_05/orlandini082806.html

PETER SCHIFF VS. ART LAFFER
by Peter Schiff
http://www.financialsense.com/fsu/editorials/schiff/2006/0901.html

THE TRAGEDY OF BUSTED MYTHS
by Jim Willie CB
http://www.financialsense.com/fsu/editorials/willie/2006/0901.html

Why commodities aren't in a bubble
http://www.moneyweek.com/file/12917/why-commodities-arent-in-a-bubble.html

[stolwyk]

Barrick Gold, JP Morgan Chase Sued for Gold Fraud by BLANCHARD & CO.

NEW ORLEANS, La. -- An anti-trust lawsuit filed today accuses
Barrick Gold Corp., Toronto, and J.P. Morgan Chase & Co.,
New York City, of "unlawfully combining to actively manipulate
the price of gold" and making (US)$2 billion in short-selling
profits by suppressing the price of gold at the expense of
individual investors.

The suit was filed by Blanchard and Co. Inc. of New Orleans,
the largest retail dealer in physical gold in the United States,
and by Blanchard clients who bought gold bullion. Blanchard
(www.blanchardonline.com) is paying the costs of the suit,
which asks the federal court to terminate the trading
agreements between Barrick and J.P. Morgan Chase and
other, as yet unnamed bullion banks. Blanchard believes
its clients have suffered substantial losses as a result of
Barrick's and J.P. Morgan Chase's unlawful price
manipulation, anti-trust violations and unfair trade practices.

"Since the end of 1987, when the collaboration between
Barrick and J.P. Morgan began, the growth of global income
and wealth would have lifted the gold price to approximately
$740 if the price had been able to respond to the normal laws
of supply and demand," stated Blanchard's chief executive
officer, Donald W.Doyle Jr. "If gold had kept pace with
inflation, the price today would be approximately $760."

The lawsuit claims that in the past five years Barrick and
J.P. Morgan Chase injected millions of ounces of additional
gold into the market -- additions that were several times as
great as the annual production of every gold mine in South
Africa, the largest gold producing nation in the world. By
using privately negotiated derivative contracts and
concealing the addition of billions of dollars worth of
(physical) gold with off-balance sheet accounting,
Barrick was able to make it virtually impossible for gold
analysts and investors to determine the size and the
market impact of its trading positions.

"The same type of accounting maze that hid Enron's
debts made it possible for Barrick to manipulate the price
of gold without the checks and balances that come from
public scrutiny. As a percentage of Barrick's total
assets, its off-balance sheet assets make Enron look
like a champion of full disclosure," said Doyle. "Is
Barrick a gold mining company, or is it a hedge fund
with a mine out back?"

The suit alleges that J.P. Morgan Chase financed Barrick's
repeated short selling with remarkably advantageous
terms not available to others, including deferred
repayments and no margin calls. Doyle said the
short-sales scheme between the bank and Barrick
appears to be the proverbial "money for nothing."

"Over the past five years, J.P. Morgan Chase loaned
gold to Barrick at approximately 1.5 percent; sold the
gold into the market, and invested the dollar proceeds
at approximately 6.5 percent; then paid both the
proceeds from the sales and the 5 percent interest
differential to Barrick whenever it repaid any of the
borrowed gold. During a period when the price of
gold dropped by more than 25 percent, Barrick's
annual operating cash flow increased by more than
400 percent."

"In 1983, Barrick was a start-up with a single mine in
Canada, a founder with no experience in the gold
business, and principal investors from Saudi Arabia.
Today, through a combination of market manipulation
and a 1992 transaction that the U.S. secretary of the
interior described as 'the biggest gold heist since the
days of Butch Cassidy,' Barrick has amassed off-balance
sheet assets that are worth more than the market
capitalizations of the next five biggest gold mining
companies in the world combined," said Doyle.

Doyle explained that "Blanchard and Co. was founded
on the belief that gold and other tangible assets are
essential to proper portfolio diversification. However,
because of the illegal manipulation of its price, we
advised our clients to avoid gold like the plague until
such time as the free market laws of

[stolwyk]

Thanks Dub,

"Dark Side of the Looking Glass : The Corruption of our Capital Markets"

it's at http://www.businessjive.com/nss/darkside.html

[stolwyk]

Beware of Resources and Reserves By Brent Cook
September 5, 2006
www.paulvaneeden.com
http://www.kitco.com/ind/Cook/sep52006.html


Oil field found in depths of the Gulf of Mexico
http://www.iht.com/articles/2006/09/05/business/oil.php

[stolwyk]

Important:
SUMMER RALLY IS LIKELY TOPPING
Major Decline is Likely Ahead by Bob Bronson
http://www.financialsense.com/editorials/bronson/2006/0907.html

ECONOMIC REPORT
Continuing jobless claims rise to six-month high
http://www.marketwatch.com/news/story/Story.aspx?guid=%7B0294FEEE%2D4994%2D4E85%2DA7FB%2 D332365E7DA06%7D&siteid=
COMMENT: Due to fraudulent manipulation by the FED, real unemployment is running over 8% instead of 4% reported.

Gold closes sharply lower on rate fears
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20060907:MTFH86465_2006-09-07_18-48-08_N07276135&type=comktNews&rpc=44

Phillips: Where Does Gold Go in a U.S. Recession
http://news.goldseek.com/GoldForecaster/1157554860.php

[stolwyk]

Clarification of the Huge Chevron Gulf Oil Discovery

by Randy Kirk


The September 5th announcement by Chevron and Devon and Statoil of the huge Gulf of Mexico discovery should be clarified. The announcement claims that the discovery could increase US proven reserves of oil by as much as 50%. However, the total amounts are highly speculative. Additionally, the discovery likely won't impact oil markets but could potentially impact natural gas markets since the discovery is probably mainly natural gas. The area will not come online for at least 4 years and, at a full rate, for at least 7 years. Further, it is likely that there are political motivations behind the announcement, as the vote to open offshore drilling in the United States is upcoming in the US Senate.

1. The range of amount -- from 3 billion to 15 billion (in itself a huge range -- reserves of Exxon Mobile are around 14 billion barrels total) is comprised of no single field of more than 300 million barrels. An entire area of as much as 15 billion barrels with no "giant" over 1 Bn bar oil field is unusual. Oil discoveries tend to cluster with a giant (King) and several queens and even more jacks.

2. The area is very deep: 7000 feet of seawater and a further 20,000 feet below the ground. That is about 3 miles below the surface, in 1+ miles of deep water. The normal time to accurately estimate oil and gas field size is months. These fields are more challenging because of the extreme depths. It is therefore likely that very little is known with certainty about the potential reserves from a geological standpoint.

3. Production will not start, at the very earliest, at 2010. Full production, will not start at the very earliest 2013. Many projects are being delayed so these dates are most likely the best possible scenario.

4. The wells are located in deep water and will not be served by underground GOM pipelines. The oil will be pumped directly to tankers. Pipelines are faster and more efficient, and tankers will put a higher price and limited the amount of oil pumped out.

5. The wells are most likely mainly natural gas, as they are very deep. All estimates are in barrels of oil equivalent. Oil tends to form closer to the surface, gas deeper. Therefore the discovery is likely to impact natural gas markets, not oil, if the gas exists in meaningful quantities.

6. The US Senate is weeks away from voting on the lifting of the 25-year ban on offshore drilling off the majority of the coasts in the US. This offshore drilling bill was approved in the Congress but political analysts believe the bill will face more opposition in the Senate. The oil industry stands to make high profits if Congress will open up Florida and the Offshore East coast to drilling. To date the offshore drilling bill has not been approved by both houses because of environmental interests. A large potential oil “discovery” in the Gulf would provide evidence that the passing of the offshore oil bill would be beneficial.

7. Related to point #6, the announcement is reminiscent of the Mexican "huge oil discovery" announced last year, of a possible 10 billion barrels, which was quietly revised this year to around 43 million barrels, a downward revision of 99.57%. This similar "discovery" was made in Mexico last year a few months before the Mexican parliament was to vote on Pemex (state oil co)'s budget and rights to expand drilling. This illustrates the potential political pressure to announce oil and gas discoveries.

8. The wells are estimated to cost between $80M to $120M each, starting in 2010, and a completion time of 60 days. Payback period with gas at $7 is about 3 to 5 years (by my rough calculations). Although it is likely that some new technical issues will be likely be needed to be resolved as the depth is approaching record levels. Further, insurance rates at these depths in the Gulf will likely be very high – the rough payback period here doesn’t include insurance costs.

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Randy Kirk is a senior financial analyst

[stolwyk]

First you spread a rumour; then you treat it as a fact.

In your position, I would suggest that you don't get involved with shares but simply put your money in the bank.

You'll still lose but you won't notice it.

Why don't you do any research?

[stolwyk]

International Forecaster
http://news.goldseek.com/InternationalForecaster/1157900580.php

Will China Really Save the World? By: Paul van Eeden
http://news.goldseek.com/PaulvanEeden/1157744488.php

Moral Hazard By: Bill Murphy, Le Metropole Cafe, Inc., LemetropoleCafe.com - GATA
http://news.goldseek.com/LemetropoleCafe/1157900640.php

[whiteheron]

cujodog

Excellent gold (and other) charts can be obtained by logging into www.kitco.com

All the work is done for you --- many options

[stolwyk]

If you need to keep a daily record of the Gold price then I suggest you start another Gold thread.

That way, we don't misuse this thread for too frequent entries of simple data.

[tricha]

I'm out of all gold and oil, its crashing and burning! [xx(][xx(]

[stolwyk]

Will there be a stockmarket correction in Sept/Oct?

The odds are against a major correction this year as elections are due in Nov.

The PPT (Plunge Protection Team) who protects the US stockmarket by buying and selling has now been reinforced by the cooperation with 2 illuminati Banks as well as 2 top executives from Goldman Sachs.

A formidable array showing that that the FED and Govt are worrying.

The Republicans will make some losses in the coming elections; should they be routed and the Democrats win, rest assured that Bush will be impeached.

Another good reason to minimize losses of votes.
(Voting will be carefully watched to prevent machines being tampered with, but of course every effort will be made to give the Govt an advantage, if possible).

A third reason is the problem with the housing sector; the Govt has managed to cut back on 30 year rates but nevertheless, the coming damage will be severe, I believe.

So, a wallowing stock market as well as a spiralling down of prices of housing and its economic negative flow-on effects, occurring simultaneously, is really not on, IMHO.

That is not to say that the PPT won't allow an anaemic slow pull down of prices instead but it will be watched above everything else.

That does'nt mean that one ought to be in the US markets.

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

[Pennywise]

Global Executive Summary: Is the World Economy Immune to High Oil Prices?
by Nariman Behravesh

One of the biggest (and most pleasant) surprises in the past two years has been the ability of the U.S. and global economies to absorb the huge rise in energy prices without much pain. Many explanations have been offered for this resilience. The following are some of the most compelling.

First, the rise in oil prices has been primarily demand-driven. In contrast, past spikes in oil prices price were geopolitical in nature and were the result of large supply disruptions (embargo, revolution, and wars). Today, oil prices are behaving like other commodity prices—with pro-cyclical moves.

Second, oil export revenues are being recycled much more quickly through investments and financial flows. This recycling of OPEC trade surpluses has contributed to low interest rates and explains (in part) both the bond market "conundrum" highlighted by Fed chairman Alan Greenspan and the "savings glut" hypothesis put forth by CEA chairman (and former Fed governor) Ben Bernanke.

Third, there is an absence of global inflationary pressures, reflecting ample manufacturing capacity and heightened global competition (e.g., from China). The inability of airlines to raise prices in step with rising energy costs is also a vivid example of why domestic service industries are under intense competitive pressures.

Fourth, as a result of prudent monetary policies, inflation expectations are relatively stable now, compared with prior oil shocks. Thus, the wage-price spirals that followed earlier oil price shocks are no longer operative.

Finally, not only are most industrial economies less energy dependent (more energy efficient) than 30 years ago, but even at current elevated levels, adjusted for inflation, energy prices are still not at their early-1980s peaks.

How much higher could energy prices go? Thanks to the greater immunity to spikes in the price of oil and other energy sources, Global Insight expects that U.S. growth will be close to trend next year—and above it during the first half of 2006. We also expect that Chinese growth (and energy demand) will remain robust. Thus, the demand conditions in energy markets are unlikely to ease much in the coming year, leaving markets tight and prices vulnerable to all types of disruptions.

[Heavy Metal]

quote:Originally posted by stolwyk

If you need to keep a daily record of the Gold price then I suggest you start another Gold thread.

That way, we don't misuse this thread for too frequent entries of simple data.


Snigger snigger. Just like your weekly updates of the uranium price.

[tricha]

Heavy metal - u sound like a piece of work ( not even a decent profile "Welcome to the ASX board Mr Tiger. I note you don't prowl on this board very much. Judging by your dazzling input I suggest you keep your forays onto this board very short"

[tricha]

cujodog sounds like your profile is a exact match with heavymetal[?][?][?]

[stolwyk]

Two HC posters picked 585 and 582 as the bottoms some time ago while another TA writer on a major website picked 585 as well.

See what happens.

The previous low was 540. Will be topping up one selected gold stock tomorrow.

Gerry

[lacmur]

582.40

[Pennywise]

[quote]Originally posted by stolwyk

Thanks for that!
TROUBLE AT MILL SERIES: Is the US in recession now?

The nature will be stagflation, where inflation will play a significant role.
There are a few increases in activity spots but the crucial indicators point to a slowing of the US economy.

Chinese wages are rapidly rising and US import prices are due to rise as well. The US PPI (Producer Price Index) is roaring ahead and oil is above $70. PLenty of inflation to come yet!

Treasury is busy manipulating the markets and particularly the USD which has no reason to rise. However, as mentioned, this item is jealously being guarded as elections are due in Nov. and a shocking reversal in the value of the dollar won't do.

Stagflation is alive and well!

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


1.Please tell me Gerry, what is the definition of 'stagflation'?

2.You also talked/predicted many many MANY times two years ago about the decline of the US dollar which came to what? Now you believe it is Treasury manipulation holding it up?

3. You stated on the US thread in off topic that the US will be behind Brazil economically after Bushs term, which seems quite rediculous now all your doom theories have not come to pass. Would you like to update us as to your current position?


and yet, here you are calling Stagflation in the US now???

Now might be a good time to discuss your past theories before rushing off (and conveniently forgetting the old) on your new one.

[stolwyk]

I think you ought to study the subjects and then you will find the answers.

You like others leave the work to be done by me and now I have to spend my time informing someone who is not receptive anyway or has'nt the background.
There are creators and then there are those who attack them without doing any research.

As to your problems:
2."You also talked/predicted many many MANY times two years ago about the decline of the US dollar which came to what? Now you believe it is Treasury manipulation holding it up?"

Answ: The dollar has severely declined in the last 2 years. And yes, the dollar is being held up and I suggest you read the posts dealing with it:
http://mwhodges.home.att.net/exchange_rate.htm
I am not the only one saying that; ask GATA. Suggest you read about the PPT as well.

3. "You stated on the US thread in off topic that the US will be behind Brazil economically after Bushs term, which seems quite rediculous now all your doom theories have not come to pass. Would you like to update us as to your current position?"

Answ: Bush still has some time to run but is considered the biggest disaster on 2 feet, IMHO. The US is deep in debt but carries on and is being "looked after" by its doctors. If you read the posts you will find plenty of references.

Actually, Brazil has been tipped as one of only 4 or so countries which are vast improving thanks to exports to China. As it is, from an accountant's point of view, their finances are in much better shape than those of the US, now. Brazil is paying off debt, the US increases debt. You don't need to wait till Bush is gone to know that the US is in dire straits economically:
http://www.financialsense.com/editorials/hodges/2006/0608.html

THe US hides the cost of wars in Afghanistan and Iraq; these are off balance sheet.

"and yet, here you are calling Stagflation in the US now???"
Answ: You are asking me what stagflation is and then you are commenting on it. That is weird.
If you had read the posts then you would know that stagflation= stagnant economy(after discounting inflation)+ inflation.

I have predicted this for some time and yes, other writers agree as well. A GDP of less than 3% is a *real* GDP of less than 0%:
http://www.shadowstats.com/cgi-bin/sgs

"Now might be a good time to discuss your past theories before rushing off (and conveniently forgetting the old) on your new one".
Answ: I have been very consistent and don't like your remark. THe US is in dire straits and why it has'nt collapsed is due to support from China, Japan and some other countries. But it comes at a price.

The situation cannot be resolved in a gradual manner as the US has no credit worthiness. The sheer mountain of debt means that most has to be monetized and it has been doing that for a while now.



Gerry

[Pennywise]

[quote]Originally posted by stolwyk

I think you ought to study the subjects and then you will find the answers.

Answer: You put up your theories for debate don't you Gerry? or is it just a one way book? I have had my views and as yet the US economy has remained very robust, so robust the FED tightened rates 17 times in a row.

You like others leave the work to be done by me and now I have to spend my time informing someone who is not receptive anyway or has'nt the background.
There are creators and then there are those who attack them without doing any research.

Answer: Excuse me Gerry, I don't like your condesending remark here (to repeat yourself), sounds like some sort of excuse...what sort of background is required to ask you about your past predictions Gerry? and therefore what is your background in economics?

As to your problems:

very defensive gerry, did I say they were my 'problems', is it a problem for you to define your logic and/or statements

2."You also talked/predicted many many MANY times two years ago about the decline of the US dollar which came to what? Now you believe it is Treasury manipulation holding it up?"

Answ: The dollar has severely declined in the last 2 years. And yes, the dollar is being held up and I suggest you read the posts dealing with it:
http://mwhodges.home.att.net/exchange_rate.htm
I am not the only one saying that; ask GATA. Suggest you read about the PPT as well.

Answer: Really? We are talking severe USD decline in what currency? Is that a general sweeping statement? I trade JPY for one, and find your remark quite remarkable. Please take a look at the 2 year chart of the USD/JPY Gerry. I guarantee you will find a VERY strong up trend for the USD for 2 years against the Yen. It rallied against the Euro during 05. I really don't think you have researched this at all

3. "You stated on the US thread in off topic that the US will be behind Brazil economically after Bushs term, which seems quite rediculous now all your doom theories have not come to pass. Would you like to update us as to your current position?"

Answ: Bush still has some time to run but is considered the biggest disaster on 2 feet, IMHO. The US is deep in debt but carries on and is being "looked after" by its doctors. If you read the posts you will find plenty of references.

Actually, Brazil has been tipped as one of only 4 or so countries which are vast improving thanks to exports to China. As it is, from an accountant's point of view, their finances are in much better shape than those of the US, now. Brazil is paying off debt, the US increases debt. You don't need to wait till Bush is gone to know that the US is in dire straits economically:
http://www.financialsense.com/editorials/hodges/2006/0608.html

THe US hides the cost of wars in Afghanistan and Iraq; these are off balance sheet.

Answer: OK, so you are wanting a few more months before we see economic figures for the US and Brazil so we can compare them. What did you mean then when you stated "the US will be 4th even behind Brazil" after Bushs term. Can you clarify that statement you did make.

"and yet, here you are calling Stagflation in the US now???"

Answ: You are asking me what stagflation is and then you are commenting on it. That is weird.
If you had read the posts then you would know that stagflation= stagnant economy(after discounting inflation)+ inflation.

Answer: oh come on Gerry, I am not asking you literally what it is, I wanted to know your 'understanding' since you are calling stagflation in the US right now without any mention of unemployment figures.

I have predicted this for some time and yes, other writers agree as well. A GDP of less than 3% is a *real* GDP of less than 0%:
http://www.shadowstats.com/cgi-bin/sgs

"N

[stolwyk]

I had an idea it was you as you were the only one discussing Bush and Brazil a couple of years ago.

Since you are an infiltrator, I have no desire to discuss matters further while you use those tactics.

Gerry

[Pennywise]

quote:Originally posted by stolwyk

I had an idea it was you as you were the only one discussing Bush and Brazil a couple of years ago.

Since you are an infiltrator, I have no desire to discuss matters further while you use those tactics.

Gerry



wrong Gerry, I have the approval of the moderator and have clearly not abused you. I have made a reasonable reply and your failure to even acknowledge your poor comments on the USD shows to posters quite clearly your character.

you are simply looking for the (panic) exit...which has quite clearly answered my questions.

thank you Gerry.

[Heavy Metal]

quote:Originally posted by tricha

Heavy metal - u sound like a piece of work ( not even a decent profile "Welcome to the ASX board Mr Tiger. I note you don't prowl on this board very much. Judging by your dazzling input I suggest you keep your forays onto this board very short"



Paper Tiger has posted about 2850 times on the NZX and his one post on the ASX is as follows:


quote:Originally posted by Paper Tiger


LOL :D.
Very funny Dazza :D.
Dazza-ling humour in fact ;)



You don't think that deserves some comment???

[Heavy Metal]

quote:Originally posted by stolwyk

The PPT (Plunge Protection Team) who protects the US stockmarket by buying and selling has now been reinforced by the cooperation with 2 illuminati Banks as well as 2 top executives from Goldman Sachs.



Another wacko conspiracy theory trotted out on websites like Financial (Non)Sense.

[limegreen]

quote:Originally posted by Heavy Metal
Paper Tiger has posted about 2850 times on the NZX and his one post on the ASX is as follows:


A slight exaggeration (see, e.g., Australian Wealth Management (http://sharetrader.co.nz/topic.asp?TOPIC_ID=21356&SearchTerms=wealth,management), although that was spun out of an NZ stock ...); but I think most took your point.

[stolwyk]

HM,

Those are facts. The PPT exists. I don't get that material from FSN. However, you don't follow this so you would'nt know.

Your contribution to this thread is zilch. But you'll get the benefit of reading posts on ST witout doing any research.

[Heavy Metal]

quote:Originally posted by stolwyk

HM,

Those are facts. The PPT exists.


Prove it. Where's the irrefutable evidence? Where's their website?

[stolwyk]

You are even less informed than I thought:

http://www.google.co.nz/search?hl=en&q=Plunge+Protection+Team&btnG=Google+Search&meta=

And you are asking where their website is? How silly to expect the PPT which rigs markets, telling you what they are up to.


Instead of writing decent posts I am spending my time educating posters who should know better.

No more questions please; I don't want to ruin this thread although you make a good job of it but what else can one expect?

[Pennywise]

Here is their website :D
http://www.plungeprotectionteam.com/

Gerry said:
"Instead of writing decent posts I am spending my time educating posters who should know better."

I think you better go educate yourself on exchange rates and current trends before you write anything more because you know nothing here.

Have you checked the USD/YEN 2 year chart yet? Care to comment on your rediculous assertion the USD is in "SEVERE DECLINE"

I 'suggest' it's a good start for you before you go and make yourself look such a fool again.

leave you to your fantasies Gerry.

good bye

[stolwyk]

You keep saying goodbye but your aggression is there alright.

Now, all you need is a mate be it you under another alias or another poster and then the spectre of abuse can start all over again. That was your reputation, C9 and I can't see that changing much.

[stolwyk]

I doubt you had much money in Gold shares.

Gold rose $17.40 to $599 and is now $596.5(Waiting for New York).

[Heavy Metal]

quote:Originally posted by stolwyk

You are even less informed than I thought:

http://www.google.co.nz/search?hl=en&q=Plunge+Protection+Team&btnG=Google+Search&meta=

And you are asking where their website is? How silly to expect the PPT which rigs markets, telling you what they are up to.


As I thought, the PPT is indeed an urban myth.

[Heavy Metal]

quote:Originally posted by Pennywise

Here is their website :D
http://www.plungeprotectionteam.com/




Well well well Stolwyk was right, I was wrong, I'm a fool. This website provides irrefutable evidence the PPT exists.

I've already sent a message to the contact address provided asking for more info on the PPT.

[stolwyk]

From "pennywise":
"I think you better go educate yourself on exchange rates and current trends before you write anything more because you know nothing here.

Have you checked the USD/YEN 2 year chart yet? Care to comment on your rediculous assertion the USD is in "SEVERE DECLINE"


Answer:
As to the movement of the USD in the last 2 years, on Sept 12, 2004 it was 89.5 and 85.8 or 4.13% less on 12 Sept 2006:

http://www.tfc-charts.w2d.com/hist_US.html

As to individual rises or falls of currencies, that changes with time and type of currency, eg the US$ was CAN$1.2913 on 12 Sept 2004 but fell to 1.11958 today. Others may have fallen against the dollar.

Gerry

[stolwyk]

I am a moderator on HC and can't really comment on issues like this on ST.
He gets as much as he dishes out. A site's character. Fills a vacuum at times. Can make some good calls.

Gerry

[stolwyk]

Grandich Letter Special Alert: A Realist's View
http://www.kitco.com/ind/grandich/sep122006.html


GOLD & SILVER-Bull or Bear Market
by Douglas V. Gnazzo
September 12, 2006
http://www.financialsense.com/fsu/editorials/gnazzo/2006/0912.html


Kotlikoff: Is the US bankrupt?
http://people.bu.edu/kotlikoff/Is%20the%20United%20States%20Bankrupt.pdf

[stolwyk]

AMBRIAN PARTNERS:

International Gold companies, including MOTO:

http://www.minesite.com/Downloads/brokersResearchNotes/GoldSector2006.pdf#search=%22The%20Gold%20Sector%3 A%20Still%20Stacking%20Up%22

[stolwyk]

PRESS RELEASE
London, 14th September 2006
Embargoed for publication or distribution by wire until 09:30 hrs London time on Thursday, 14th September 2006
Publication of Gold Survey 2006 - Update 1

Mine Supply Falters in First Half
GFMS today presented their half year findings of the gold market at the industry consultants’ launch of Gold Survey 2006 - Update 1 in London. In a presentation by the group’s Executive Chairman, Philip Klapwijk, it was identified that global gold mine production in the six months to June registered a modest decline of less than 2% year-on-year.

Central to the first half hiatus to production growth were declines from several major gold producing nations, most notably a significant drop in output from Indonesia, which was largely associated with substantially lower levels from the giant Grasberg mine. A severe incidence of cyclones impacted operations in Australia, particularly at the start of the year, whilst weaker performances were also seen in South Africa, Canada and the United States.

Although insufficient to undo the losses discussed above, several regions recorded notable improvements. Latin American growth amounted to an impressive 20%, more than 40 tonnes higher than the first half of 2005. This was brought about by near ‘across the board’ improvements, including better results at all of the region’s top five producing nations, headed by a 16 tonne gain in Peru.

Producers’ cash costs were seen to rise by just more than 10% year-on-year, driven most strongly by higher global energy prices and further compounded by increases in the cost of mining consumables. The elevated price of other metals helped alleviate costs for some producers: as by-products to gold mining, metals including silver, copper and zinc, whose sales revenue can be offset against operating expenses, helped counter the global cash cost escalation.

Importantly, in spite of the year-on-year cash cost rise, the higher gold price saw producers’ simple cash margin (cash costs less spot gold price) almost double over the same period.
Looking ahead, mine supply in the second half is expected to increase moderately year-on-year, resulting in full year production levels essentially flat against 2005. Perhaps surprisingly, the impact of four years of rising gold prices have yet to significantly flow through to a supply increase, although according to GFMS’ projects database, an abundance of mines under construction should, over the medium term, provide the impetus required for a global supply boost.
© Copyright GFMS Limited - September 2006.
Whilst every effort has been made to ensure the accuracy of the information in this document, GFMS Ltd cannot guarantee such accuracy. Furthermore, the material contained herewith has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient or organisation. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any commodities, securities or related financial instruments. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. GFMS Ltd does not accept responsibility for any losses or damages arising directly, or indirectly, from the use of this document.
Gold Survey 2006 - Update 1 provides a thorough and comprehensive interim analysis of the most recent developments in the global gold market. In just 40 pages, Update 1 identifies the most important economic, socio-political and market-specific issues facing the gold market. The publication can be ordered from GFMS for £215 or US$395 / €325 per copy. For orders and to receive
further product information please contact Ms L. Perrard on: Tel: +44 (0)20 7478 1777, Fax: +44 (0)20 7478 1779, Email: sales@gfms.co.uk, Web Site: www.gfms.co.uk, Online Shop: http://shop.gfms.co.uk
Note to Editors about GFMS Limited:
GFMS Limited is the world’s foremost precious metals consultancy, specialising in

[stolwyk]

Gold may cross $700 by year-end

SANGITA SHAH
Posted online: Thursday, September 14, 2006 at 0000 hours IST

MUMBAI, SEPT 13: The gold prices hit 11-week low on Wednesday, yet GFMS, a London-based precious metals consultancy firm, specialising in research into global gold, silver, platinum and palladium markets, is hopeful that growth in investment demands in the fourth quarter will drive gold through $700, overriding the short-term weakness.

Glitter Ahead
• The perceived threat of global terrorism make gold particularly attractive
• GFMS' contention is also based on problematic US housing market

Gold lost more than $56 an ounce in the past six trading sessions and is down by over a fifth from a 26-year high of $730.4 in May. Gold for immediate delivery dropped $5.88, or 1%, to $581.57 an ounce at intra-day in London. Earlier, it traded at $579.41, the lowest since June 27.

Gold survey 2006 update 1 released on Wednesday at GFMS’ precious and base metals seminar suggests the investment demand has the potential to come back strongly.

Philip Klapwijk, the consultancy’s executive chairman, noted “investor buying over the last quarter of 2006 could drive the gold price back through the $700-mark.”

GFMS’ contention is based on a variety of factors. These include signs of a problematic US housing market creating a bleak outlook for both the US economy and, importantly, the country’s currency.

Elsewhere, despite tensions in having somewhat eased recently in in Lebanon, Israel and Palesane, the situation in the Middle-East remains extremely volatile, contributing to a general sense of unease and helping to maintain oil prices at high levels. Also, the recent events in the England have reminded the world of the perceived threat of global terrorism.

These factors make gold’s safe haven properties particularly attractive.

http://www.financialexpress.com/fe_full_story.php?content_id=140327

[stolwyk]

C. Laird: "Gold Correction":

http://www.kitco.com/ind/laird/sep142006.html

[Pennywise]

quote:Originally posted by stolwyk

From "pennywise":
Have you checked the USD/YEN 2 year chart yet? Care to comment on your rediculous assertion the USD is in "SEVERE DECLINE"

Answer:
As to the movement of the USD in the last 2 years, on Sept 12, 2004 it was 89.5 and 85.8 or 4.13% less on 12 Sept 2006:

Gerry


Gerry

FACT: 2 years ago the YEN was 103, it is now 117.

you answer a Yen question with a Euro answer.

good bye:D

[stolwyk]

C. Puplava: US HOUSING AND RETAIL TRENDS LIKELY TO WEIGH ON FUTURE EMPLOYMENT GROWTH
http://www.financialsense.com/Market/cpuplava/2006/0906.html

A TIGHTENING FARCE by Kurt Richebächer
Contributor, The Daily Reckoning
http://www.financialsense.com/editorials/daily/2006/0915b.html

THE END OF GOLD'S BULL MARKET, NOT! by Peter Schiff
Euro Pacific Capital
http://www.financialsense.com/fsu/editorials/schiff/2006/0915.html

[stolwyk]

Ionic Silver – The Powerful Defense Against Viruses And Other Microbes

By: Herbert Slavin, M.D.

http://news.silverseek.com/SilverSeek/1158086092.php

[stolwyk]

Thirst for cash that threatens a crash
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/12/cctrade12.xml

What's Really Propping Up The Economy
http://www.businessweek.com/magazine/content/06_39/b4002001.htm?chan=top+news_top+news+index_business week+exclusives

[stolwyk]

Philly Fed manufacturing index shows growth stalled in Sept.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCE5FE20D%2DC19E%2D4A5F%2D86B8%2 DF56697B84667%7D&siteid=mktw&dist=bnb

Coming Soon: Mortgage Payment Resets
http://bigpicture.typepad.com/comments/2006/03/coming_soon_mor.html


Profit from the Big Drop in Oil Prices
By: Peter Schiff, Euro Pacific Capital, Inc.
http://news.goldseek.com/EuroCapital/1158879033.php

Merk: The Economy In Denial: Fallout from the Bursting Housing Bubble
http://news.goldseek.com/MerkInvestments/1158879271.php

[Wossname]

A quote from Richard Russell today:

"From figures I get from a good source, I gather M-3, the broad money supply, is growing at a rapid 9 percent rate."

Yet data like John Murphy's inflation index (http://www.martincapital.com/chart-pgs/CH_crbtb.HTM) suggest that price growth is decelerating at present.

What's braking price growth?

[stolwyk]

OVERSTOCK CEO SPEAKS OUT-(Big slide file-ENRONISED BUSINESS?)

http://www.overstock.com/cgi-bin/d2.cgi?SEC_IID=19350&PAGE=STATICPAGE&PAGE_ID=5697&TRACK=FOOT_OI_L8

An Introduction To Naked Short Selling - Failing To Deliver (FTD) *
http://www.ncans.net/intro%20to%20naked%20short%20selling.htm

[trackers]

Oil: Price reaches six-month low

http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10402968

[stolwyk]

Exclusive Military Report. September 24, 2006, 5:58 PM (GMT+02:00) ...

http://www.debka.com/

Turkish tanks in Kurdistan.


"A new Middle East war is in the offing. DEBKAfile’s exclusive military sources in Iraq and sources in Iran reveal that Turkish and Iranian air units as well as armored, paratroop, special operations and artillery forces are poised for an imminent coordinated invasion of the northern Iraqi autonomous province of Kurdistan.

Our sources pinpoint the target of the combined Iranian-Turkish offensive as the Quandil Mountains (see picture), where some 5,000 Kurdish rebels from Turkey and Iran, members of the PKK and PJAK respectively, are holed up. Iranian and Turkish assault troops are already deployed 7-8 km deep inside Iraqi territory.

Turkey to the northwest and Iran to the east both have Kurdish minorities which have been radicalized by the emergence of Iraqi Kurdistan in the last three years. The three contiguous Kurdish regions form a strategic world hub.

A jittery Washington foresees a Kurdish-Iranian military thrust quickly flaring into a comprehensive conflict and igniting flames that would envelop the whole of Iraqi Kurdistan as well as southern Turkey and Armenia.

Tehran is quite capable of using the opening for its expeditionary force to grab extensive parts of Kurdistan and strike a strategic foothold in northern Iraq.

Informed US officials would not be surprised if Turkey took the chance of seizing northern Iraqi oil fields centered on the oil-rich town of Kirkuk, the source of 40 percent of Iraq’s oil output.

When he met US secretary of state Condoleezza Rice in New York Thursday, Sept. 21, Turkish foreign minister Abdullah Gul said: “When we talk about Kirkuk, everybody supposes we want to bring the Kurdish-Turkish issue to the foreground. However, we instead see the uncertainty there as a general issue of Iraq. We are concerned that instability and turmoil in Kirkuk could cause more troubles in Iraq.”

Referring to the recently appointed special US coordinator Gen. Joseph Ralston, Gul expressed his hope that a resolution would be imminent.

The threat was implicit and impatient. Washington was given to infer that Ankara is on the point of deciding whether or not to capture Kirkuk, a step that would undermine a pivotal political and economic base of the Baghdad government and harm US interests in Iraq.

This conversation, which was not nearly as amicable as it looked from the press photos, was clouded by a disturbing incident: A semi-official American military publication recently ran a new map showing parts of Turkish and Armenian territory marked “Kurdistan.”

This map fueled suspicions in Ankara and the Armenian capital Yerevan that the US high military command was in on a plan for Iraqi Kurdish forces led by President Jalal Talabani and Masoud Barzani to help themselves to territory in Turkey and Armenia in a counter-attack to a potential Turkish-Iranian military move in Kurdistan.

This kind of mistrust has lent wings to Ankara’s resolve to go forward against Kurdistan - the sooner the better.

To cool tempers and restrain the Turks, the US ambassador to Turkey, Ross Wilson, stood up in Ankara on Sept 19 and promised: “Northern Iraq won’t serve as a PKK base in the future.” In a speech at a meeting entitled "Agenda 2006," Wilson stated that the map published in an unofficial U.S. military magazine showing parts of Turkish and Armenian territory under the domination of a republic called "Kurdistan" doesn't reflect the official policy of the US.

The ambassador added that the recently stepped-up PKK violent attacks in Turkey “would not be tolerated anymore.”

These words were hardly likely to allay Ankara’s fears, since the ambassador addressed the PKK problem in the future tense, while the Turkish government is troubled by the present.

The approaching conflict, according to DEBKAfile’s military sources, has an Israeli dimension. Since July, Turkish leaders have been impressing on the Bush administration that they have the right to attack Ku

[stolwyk]

Incomplete record of naked shortselling

http://www.rgm.com/shortselling.html

Comment: Many systems from the FED and Treasury and Wall Street have been "ENRONISED"

(The latter days from the "Roman Empire")

These "naked short" articles by introduction from Charleston Voice.

Gerry

[stolwyk]

By Kevin Morrison and Javier Blas in London

Published: September 25 2006 20:10 | Last updated: September 25 2006 20:10

"Oil exporting countries may consider a cut in output after crude prices fell below $60 a barrel on Monday for the first time in six months.

The decline came as global demand fell back from its mid-year peak and tensions over Iran eased.


ADVERTISEMENT
Ministers from the Organisation of the Petroleum Exporting Countries are understood to be concerned about the drop in oil prices, which are down almost a quarter from their recent peaks.

They have discussed the prospect of trimming production ahead of the oil cartel’s next ministerial meeting in Nigeria in December, according to Opec officials.

The oil price fall over the past month has been accompanied by investor selling in oil and other commodity markets, mainly on concerns that economic growth in the US is slowing.

“There is a concern by hedge funds that oil and commodities are no longer the one-way bet they once were,” said an Opec official.

Brent, the European benchmark oil price, dropped 50 cents to $59.91 a barrel, down 24 per cent from its record peak of $78.40 reached last month.

The US benchmark oil price, West Texas Intermediate, yesterday hit $59.62, its lowest level since early March, before recovering to $60.54. It was flat on the day.

The WTI is now lower than the level it ended at last year. The magnitude of the decline in percentage terms is the largest in more than three years.

Investors have been selling out of oil futures over the past month, after taking bets earlier in the year on expectations of hurricanes disrupting oil supplies in the Gulf of Mexico.

But with the Atlantic hurricane season finishing at the end of September, there is little prospect of a repeat of last year’s devastating storms.

Opec is not only worried about investor activity in oil markets, but also about preserving high export prices, which underpin government budgets in member countries.

Many Opec producers have embarked on big spending programmes in recent years on the back of the higher oil price.

Opec maintained its quota of 28m barrels a day at its recent meeting in Vienna, and this is close to the cartel’s actual production last month.

Saudi Arabia, Opec’s linchpin member and the world’s largest oil exporter, has been cutting its output since the end of last year.

If Opec does trim its official production ceiling, it would be the first cut since December 2004, when oil prices were close to $42 a barrel"

[stolwyk]

Russia in threat to turn off gas to US giants
By Carl Mortished in London and Tim Reid in Washington
http://business.timesonline.co.uk/article/0,,13129-2374735,00.html

Oil Jumps Almost $2; Natural Gas Plunges
Wednesday September 27, 4:37 pm ET
http://biz.yahoo.com/ap/060927/oil_prices.html?.v=6

What a US recession means for China
http://www.atimes.com/atimes/Global_Economy/HI27Dj01.html

Moneyization #30 By Ned W. Schmidt CFA,CEBS
http://www.kitco.com/ind/Schmidt/sep262006.html

Mogambo Guru: Eaten Alive by Inflation
http://www.kitco.com/ind/Daughty/printerfriendly/sep272006p.html


The World's Most Competitive Countries
http://www.forbes.com/business/2006/09/26/finland-switzerland-denmark-biz_cx_pm_0927competition.html

[leonchai]

I know what the value of a barrel of crude oil is...
but how much is a barrel of oil equivalent of natural gas?? Especially for australian oil companies??

Just trying to determine which oil companies in australia are more undervalued compared to their peers, and although they do list their reserves in MMBOE, certain companies hold much more oil compared to gas and vice versa...

e.g
Nexus NXS 100 MMBOE resource i.e $3.50/barrel in ground value but mostly gas...

[stolwyk]

International Forecaster MidWeek Reading - Gold, Silver, Economy + More By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1160060460.php

Opec set to back production cut
http://www.ft.com/cms/s/fca030f6-53d8-11db-8a2a-0000779e2340.html

Bernanke Says Housing in `Substantial Correction'
http://www.bloomberg.com/apps/news?pid=20601103&sid=aZwHl9o0Ma80&refer=us

The Prophet of the Great Depression
By Frank Shostak
http://www.mises.org/story/2344

[thestorm]

Can someone please explain something to me?

The US Economy is meant to be slowing and the housing market is meant to be in sharp decline.

How come the DOW is at an all time high?

[tricha]

To the Storm - one mans view, read into it what you like!


Why are the Stock and Bond Markets Rallying

By Richard Daughty
" The Mogambo Guru"

October 4, 2006

www.dailyreckoning.com


- I don't know if it was because Total Fed Credit was down again by $3.7 billion last week, or that foreign central banks pulled out $12 billion from their account at the Fed, or that my wife is getting suspicious about something, or what, but something unnerving is in the air. And at times like these I think of the lyrics of the song "Ghost Busters" that goes something like "Something strange in the neighborhood. Something weird, and it don't look good!" And if you saw the movie, you know he was exactly right!

The sensitive economic nose of The Mogambo goes "sniff, sniff, sniff", and I triumphantly announce that the stench is not my feet, as is commonly assumed, but the rotting, bloated, inflationary, gangrenous body of the economy, and it portends the dismal, bankrupted, angry, cataclysmic end of the stock/bond/real estate/debt/government bubble, but (sniff, sniff, sniff) apparently covered over with gravy and chocolate sauce.

Michael A. Nystrom, in his essay at BullNotBull.com titled "Dow Manipulation" seems to agree with me. He notes that the litany of bad news is overwhelming when he lists "The yield curve has remained inverted for months; we had the first negative reading in the Philly Fed index in three years; national housing sales have plunged and prices are showing their first declines since 1993. The index of leading economic indicators has declined for seven straight months. Online advertising revenue is down; newspaper advertising revenue is down; the help wanted index is down. Across the board the economic news is terrible - everything is pointing to a recession."

So why are the stock and bond markets rallying? Government manipulation! "It makes me consider," he says, "that the only thing standing between this market and a crash are the November elections." Then he says the one thing guaranteed to send The Mogambo into a fit of panic and screaming, namely that inflation is soaring. "Under normal circumstances," he says, "today's inflation report - the highest inflation reading in 11 years - would have absolutely creamed the market. There is, to put it mildly, something fishy about this market."

And when something is "fishy", it means that it will get older, stinkier and more "fishy", as it always does, until it rots away. And that lugubrious day may be coming sooner than any of us realizes, as Susan Albright has an article posted on IndiaDay.com titled "US Stock market showing huge divergence - a sure sign of a coming multi-year bear market." In particular, the Russell 2000 versus the Dow is behaving strangely, although she did not mention the divergences between the Industrials and the Transports, as does Richard Russell of the Dow Theory Letters. She writes, as does Mr. Russell in the final analysis, that these huge divergences are "a sure sign of a coming multi-year bear market", and that these kinds of anomalies are a "technical analysis tool for calling major bear markets."

Her analysis? "The prospect of the economy going into recession is high. The growth prospects are low. The liquidity driven market may have already seen its best days."

In a related note, the trade deficit is now greater than the current account deficit, meaning that we are importing more and more stuff from overseas, but we are not "exporting" as much services, and/or foreigners are not plowing their money into the USA, with customary reckless abandon. So where in the hell all this money is coming from to keep the stock and bond markets elevated is beyond me. But somebody is in for a shock.

And in that regard, Bryon W. King of Daily Reckoning writes that in following the definition of "financial crisis" defined by "the great analyst Charles Kindleberger", then "Financial cris

[stolwyk]

Bank of France blamed for gold sell off
By Ambrose Evans-Pritchard (Filed: 05/10/2006)

Central banks may have dumped far more gold on the markets over the last three weeks than officially reported, accounting for the sudden plunge in prices that has stunned investors.

Barclays Capital said Europe's banks had sold an extra 100 tonnes from reserves in a rush to meet a quota deadline on September 26, but had done so by selling through forward contracts that disguised the effect.

"We have been able to infer this from trading patterns. It has had a major impact on the markets," said Costanza Jacazio, the bank's gold expert. Barclays is one of the world's three top bullion traders.

"We suspect that the Banque de France has been involved," she said.

The huge sales would help explain why gold's brutal fall from $640 an ounce in early September to $559 this week, an effect compounded in recent days by hedge fund liquidation. It was up slightly yesterday at $569.75 in New York trading.

Gold typically rallies in September in the build-up to the Indian marriage season. While gold has undoubtedly been hit by the broader fears of a commodity slump, base metals have held up much better. The central banks have reported sales of just 393 tonnes of gold for the year, far below the 500 annual limit agreed under the Washington Accord, and agreement by 15 centrals banks in Europe.

Barclays said the group had in reality met the 500 tonne limit, with others snapping up the unused quota of the Bundesbank -- which has balked at selling in order assert its independence against Berlin's politicians.

"We believe this is actually very bullish for gold because it shows that the sell-off was not driven by investors," said Ms Jacazio.

Philip Klapwijk, chairman of the precious metals group GFMS, said bullion would soon resume its five-year bull market.

"The game is not over for gold. We've still got a big dollar devaluation ahead," he said.

"Hot money has left the market and we've seen chart-based selling as the fall triggered stop-losses. But at this level we are going to see support from miners like Barrick that want cut their hedge books," he said.

Russia's central bank is also likely to buy on the dips. It plans to raise the gold share of its reserves from 3pc to 10pc, a move that would soak much of global mine supply. Russia's reserves are now world's third biggest at $267bn, and rising at $12bn a month.


http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/05/bcngoldselloff05.xml

[thestorm]

Tricha

"The Mogambo Guru" is one of the funniest things I have read in a long time - appreciate you posting it!!

Let's hope he's right about the Gold Bull Run to continue. I'd love to be sipping champagne in the French Riveria!

[tricha]

Eat your heart out, gold, silver, oil suks :([xx(]:([|)][V]

Copper, nickel, zinc roars !:):D[8D][:I][:p][}:)];)[:o)]

LATEST FUTURES NEWS
UPDATE 2-Gold out of steam after gains, bear trend stays
Friday, October 6, 2006 9:33:52 AM
http://www.reuters.com



(Updates with quotes, prices; pvs Tokyo)

By Atul Prakash

LONDON, Oct 6 (Reuters) - Gold edged lower on Friday with a drop in oil prices and dealers said the metal may slip further as sentiment remained bearish following this week's sell-off.

Platinum touched a six-month low before slightly recovering, while gold traded in a narrow $5-an-ounce band against an average $18 in the past three days, with the market keeping an eye on movements in oil and the dollar.

"Gold is pretty much tracking what oil is doing. I think with oil breaking $60 a barrel again, gold is going to drift lower," said a precious metals dealer in London.

"There will be physical buying but I don't know whether that will be enough to support the market. People are nervous and still hoping that we will see a rally, but it depends on oil."

Spot gold <XAU=> traded down at $570.90/571.90 an ounce by 1000 GMT, compared with $572.50/573.50 late on Thursday in New York, where it rose one percent.

Oil fell below $60 a barrel, with traders weighing OPEC's plans to cut production against overflowing stockpiles in top consumer the United States. Oil prices are now down more than five percent from a week ago.

"Near-term sentiment on gold is likely to remain weak, with this recovery possibly interpreted as a correction within a correction," Standard Bank said in a daily report.

Investors were wary of buying fresh positions even though gold regained some strength the previous day after plunging almost 8 percent on Wednesday to $559.40 an ounce, the lowest since mid-June, from last week's high of $606.50.

"Despite the bounce yesterday the return of weakness in the oil market is likely to weigh further on gold," James Moore, analyst at TheBullionDesk.com, said.

"However ... a period of correction/consolidation is perfectly normal and is constructive longer-term, allowing investors to enter the market at more affordable levels."

Physical gold buying in India, the world's largest consumer of the metal, gained momentum during the festival season. Appetite from the Middle East was also expected to be strong, dealers said.

In other precious metals, silver <XAG=> fell to $11.01/11.11 an ounce from $11.07/11.14 late in New York, while platinum <XPT=> fell as low as $1,069, the lowest since mid-April, before recovering to $1,078/1,083, versus $1,081/1,086.

Palladium <XPD=> fell to $296/301 an ounce from $299/304.

Norilsk Nickel <GMKN.RTS>, the world's largest nickel and palladium miner, more than doubled net profit in the first half of 2006. It lifted platinum sales to 336,000 ounces in the first half of 2006, from 327,000 ounces a year ago. Palladium sales fell to 1.45 million ounces from 1.47 million. [ID:nL06844555] (Additional reporting by Chikafumi Hodo in Tokyo)

[stolwyk]

From Gold Seeker:

"The Commentary:
“What this suggests is The Gold Cartel crowd is running out of enough available physical supply to keep the price down for extended periods of time. Yes, they can bomb both markets with derivatives and a tranche of gold and silver physical here and there, but they don’t have enough sustained supply to keep the prices down. Demand is just too strong. They must retreat and attack again, using every trick in the book to win the day for a few weeks or months.

A specific example of this was offered to us by the Bundesbank’s Weber, who just admitted some central banks were (are) looking to swap gold with his bank to bomb the market. Did he comply? Either way, it shows some one was (is) in urgent need to secure physical supply of gold.

Thus, IMO, we are coming closer to the day (either the weeks before or after the US elections) in which the prices of gold and silver go bonkers, as the bad guys are forced to retreat for many months to come … at least until gold and silver make multi-year highs.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com
http://news.goldseek.com/GoldSeeker/1160193660.php

Roach: global stability and imbalances:
http://www.morganstanley.com/GEFdata/digests/latest-digest.html

Schiff: Don’t Buy the Dow’s New High
http://news.goldseek.com/EuroCapital/1160150284.php

The commodities “supercycle” isn’t over
http://www.financialexpress.com/fe_full_story.php?content_id=142538

[stolwyk]

The Illuminati and the House of Rothschild
http://www.silverbearcafe.com/private/rothschild.html


Comment: Considering that JP Morgan and Goldman Sachs act as the front of the PPT (Plunge Protection Team), they can send messages as to what they are going to buy and sell to other Rothchild Banks all over the world.
Paulson, the present Treasury Secretary, was the CEO of Goldman Sachs and this shows that Rothchild's descendents and chosen favorites have made it to the White House.

What an opportunity to partake in the riches of the US, all financed by printing of money by the FED, another Rothchild Bank.

All US presidents who sought to abolish the FED were shot, including Kennedy.


Speech to The Silver Summit 2006
By John Embry
Chief Investment Strategist, Sprott Asset Management
http://www.sprott.com/pdf/silver.pdf


Oct. 7, 2006, 12:39AM
Nigeria's oil-rich delta: 'There is no rule of law'
Poverty-stricken region in a state of bloody chaos
By KATHARINE HOURELD
Associated Press

PORT HARCOURT, NIGERIA - "Helicopters battled speedboats full of armed fighters for control of key oil installations. Seven foreigners were abducted from a residential compound, and militants claimed dozens of soldiers were killed. Even by the standards of Nigeria's oil-rich southern delta region, it has been a bloody week.

"There is no rule of law here. The AK47 rules," says Anyakwee Nsirimovu, a human rights lawyer in Rivers state, which has been worst hit by the violence.

Few believe that this week's attacks, which come after a month of relative calm, are coordinated or the work of just one group.

Instead, Nsirimovu said, they are the result of general lawlessness, bred by a government that buys off potential threats but has done almost nothing to develop a poverty-stricken region filled with simmering resentment.

"The government is doing nothing to develop the country, so the principle of self-help has set in. And people are helping themselves with guns," he said.

One private security contractor to a major oil company, who spoke on condition of anonymity because he was not authorized to speak to the media, said the bewildering array of demands that accompany the kidnappings — cash, development projects, freedom for imprisoned leaders — feeds the growing sense of chaos.

"The scary thing is, that there is no one person in charge ... . You have political guys, you have criminals, and every shade in between," he said.

Not even the region's most sophisticated and best armed group, the Movement for the Emancipation of the Niger Delta [M.E.N.D.], wields much control.

The group crippled the oil industry with a series of kidnappings and bombings earlier this year, cutting production in Africa's largest oil exporter by around a quarter. But it denied responsibility for what it calls "botched robberies" on oil convoys this week, saying it only dispatches fighters to protect civilians from military reprisals.

The government has previously announced several crackdowns on the violence and pledged to address the economic grievances believed to be fueling the violence. But the people of the delta have seen many promises of development go largely unfulfilled.

The number of active fighters is relatively small compared to Nigeria's population of 130 million. But the militants have an easy target in the oil industry's network of pipes spread out over wetlands the size of Connecticut.

The Nigerian military struggles to avoid ambushes in the mangrove swamps, where the populist rhetoric of the militants have won sympathy".

[Heavy Metal]

quote:Originally posted by stolwyk


Schiff: Don’t Buy the Dow’s New High
http://news.goldseek.com/EuroCapital/1160150284.php



I enjoy reading this tripe for a good laugh. As usual, the story ends with a statement like:

THE END IS NIGH, YOU MUSY BUY GOLD

Conveniently, the author (who works for Euro Pacific Capital) has provided a link to a company from which you buy the physical gold - Euro Pacific Capital. Conflict of interest? Of course it is. So-called independent financial adviser talking up his book? Of course he is.

[stolwyk]

He is entitled to do that. And so are the other contributors.

Unlike you, he contributes something to this thread.

Schiff is a very respected person overseas and can judge the situation quite well most of the time.


Gerry

[Heavy Metal]

quote:Originally posted by stolwyk

Schiff is a very respected person overseas and can judge the situation quite well most of the time.


Only respected in Gold Bug circles. You don't hear his name being mentioned in the mainstream investment community.

[stolwyk]

Yes,

Well known in US investment circles. Unfortunately, you need to spend some time to investigate.

As you say, not known in NZ. Why should he be.

I am still waiting for a decent post of yours.

Gerry

[Mick100]

quote:Originally posted by Heavy Metal
[

Only respected in Gold Bug circles. You don't hear his name being mentioned in the mainstream investment community.


That's a classic :D

Has it occured to you HM that those of us who have interests in the PM's and commodities are not following the mainstream investment community - this approach has paid off well over the past few yrs

If you want to read "mainstream" your on the wrong thread.
.

[stolwyk]

Euro Pacific Capital offers a full range of services and Resources are only a part thereof:

http://www.europac.net/

P. Schiff is the President:
http://www.europac.net/team.asp

HM, It seems to me that you misjudged the situation. Suggest you study the subject matter before making more comments.

Suggest you try another thread.

Gerry

[Heavy Metal]

quote:Originally posted by Mick100

Has it occured to you HM that those of us who have interests in the PM's and commodities are not following the mainstream investment community - this approach has paid off well over the past few yrs

If you want to read "mainstream" your on the wrong thread.
.


*BIG YAWN*

Has it occurred to you that gold has been one of the biggest underperformers in this latest commodity boom?

[Heavy Metal]

quote:Originally posted by stolwyk

I am still waiting for a decent post of yours.

Gerry


You're entitled to your opinion. Just like I'm entitled to mine. And after 7000+ posts I'm still waiting for your first decent post. You put down anyone who doesn't agree with your opinion and you try your best to get them banned from this site. That's all I'm going to say on the matter.

[Wossname]

Peak oil
Iran
Iraq
Israel
Kurdistan
Afghanistan
North Korea
Nigeria
Asian Banks
Global fiscal imbalances
Massive and growing debts
Currency manipulations and secrecy
Housing price contractions
Inadequate risk premiums
Hedge fund unknowns and excesses
Ageing populations
Aged and medical care shortfalls
Inverted yield curves
Hindenburg omens
Odd internal characteristics in equities markets
Lax lending practices
Overreliance on discretionary goods and services for GDP
Low dividends
Improvident, self-indulgent, complacent cultures
Global warming
Mania and terrorism
Election instabilities
Constitional infringements
Questionable accountability in high places

- So far, so good.

[thestorm]

quote:Originally posted by Heavy Metal


quote:Originally posted by stolwyk

I am still waiting for a decent post of yours.

Gerry


You're entitled to your opinion. Just like I'm entitled to mine. And after 7000+ posts I'm still waiting for your first decent post. You put down anyone who doesn't agree with your opinion and you try your best to get them banned from this site. That's all I'm going to say on the matter.


Heavymetal, what an idiotic post. Pull your head in.

[Gofish.]

quote:Originally posted by Wossname

Peak oil
Iran
Iraq
Israel
Kurdistan
Afghanistan
North Korea
Nigeria
Asian Banks
Global fiscal imbalances
Massive and growing debts
Currency manipulations and secrecy
Housing price contractions
Inadequate risk premiums
Hedge fund unknowns and excesses
Ageing populations
Aged and medical care shortfalls
Inverted yield curves
Hindenburg omens
Odd internal characteristics in equities markets
Lax lending practices
Overreliance on discretionary goods and services for GDP
Low dividends
Improvident, self-indulgent, complacent cultures
Global warming
Mania and terrorism
Election instabilities
Constitional infringements
Questionable accountability in high places

- So far, so good.




Nice.
You could add into the mix Derivatives and the PPT.

[Wossname]

Bird flu too

[stolwyk]

LET'S GET REAL ABOUT DEFICITS
by Peter Schiff

This week, while President Bush took credit for supposedly cutting the enormous budget deficit in half, the Commerce Department reported that the trade deficit in August was a record $69.9 billion. Annualized, the trade gap comes to well over $800 billion of foreign-made merchandise tacked onto our national charge card, a figure that dwarfs the federal budget deficit by comparison.

In the first place, the fact that President Bush maintains a straight face while claiming to be a deficit cutter is a testament to his political skills and the media’s and Wall Street’s gullibility. Who does the President think he is kidding? So far, the national debt has increased by about three trillion dollars during his presidency, or about $500 billion per year. Those are the real numbers. The non-sense budget deficit the government reports excludes off-budget items and money borrowed from government “trust funds.” However, expenditures excluded from official budget numbers still must be financed, and the money borrowed to do so adds to the national debt.

In addition, those numbers do not reflect expenses accrued during the year but not yet paid. Were such expenses properly accounted for, the official deficit would be several hundred billion dollars higher. Finally, the numbers do not include any growth in contingent liabilities, which now exceed $40 trillion, making the actual national debt over eight times the official figure, which includes only the funded portion.

While President Bush claimed credit for restraining federal spending, his 2006 budget included a record $2.65 billion in outlays, a 7.4% increase over the prior year. Spending on education increased 28%, Medicare spending rose by 12.5% and interest payments on the debt rose 15%. Tax revenue also rose to a new all time high of more than $2.4 trillion. So just what is it that the President is bragging about? Presiding over the fourth largest budget deficit ever (after having presided over the largest) while simultaneously being the biggest tax and spender in our nation’s history?

In the second place, how can the President’s disingenuous claims of deficit reduction attract media attention, while the record high trade deficit is virtually ignored? The budget deficit merely reflects what the government borrows, while the trade deficit reflects what the entire nation borrows. For the President to proclaim that the U.S. economy is healthy despite the record trade deficit is like a doctor declaring a patient healthy while ignoring the basketball sized tumor growing in his intestines.

The combination of enormous budget and trade deficits reflects a terminally ill American economy. Both the public and private sectors borrow to consume, while the domestic economy lacks the savings or productive capacity necessary to support either. Foreign savers/producers sacrifice their own desires merely to indulge ours, artificially strengthening an otherwise dying economy. However, my guess is that before the end of the Bush term, foreigners will finally pull the plug.

http://www.financialsense.com/fsu/editorials/schiff/2006/1013.html

Comment: The expenditure of the Iraqi and Afghanistan wars are not included in the Budget but will be part of the National debt.

The whole US outfit is a mess.

Gerry

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

MEGA-STORM SIGNPOST
by Jim Willie CB
October 12, 2006
http://www.financialsense.com/fsu/editorials/willie/2006/1012.html

International Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1160665260.php

[stolwyk]

International Forecaster October, 2006 (#2) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1160924520.php

Extract:
"The average American family has $3,800 in cash in the bank, no retirement account whatsoever, owes $90,000 on their mortgage and owes $2,200 in credit card debt. We don’t exactly call that being prepared for economic hardship".

"All day long the cartel sold and the physical market bought. Today India and Turkey were the featured physical buyers again. They may be keeping the price down but the third world is buying all they can get their hands on. It won’t be long now before the central banks are out of gold".



Mogambo Guru: Buy gold and be fine.
http://news.goldseek.com/RichardDaughty/1160579100.php

[Heavy Metal]

quote:Originally posted by stolwyk

International Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1160665260.php


The last paragraph of this 'foaming at the mouth' article is just classic:

As soon as we saw the HUI getting banged around on Tuesday we knew it was going to be a bad day. All of yesterday’s gains in gold and silver bullion were lost. We have been professionally following gold and silver for 47 years, and we have never seen events like N. Korea and the bomb and homosexual scandals that couldn’t move a market, only now that the markets are rigged. We are sure happy we saved our Bull & Bear article of August 1988, describing the rigging of the gold market. Everyone thought us mad, but we had their number almost 20 years ago and no one else caught on and talked about it until the late 1990s. No matter what the mattoids do we will win – just hang in there...

So homosexual scandals are supposed to move the gold market? What planet is this gold bug living on?

[stolwyk]

I suppose you don't know what he is talking about?

[tricha]

Mark Skousen: You would think of gold stocks as being the leveraged way to buy gold. Maybe that’s an exception to your rule.

Jim Rogers: Well, more money has been lost in gold mining stocks than in any other industry – including railroad stocks…


Exclusive Investment U Interview: Jim Rogers Predicts Another Raging Bull Market in Commodities: Issue # 541 By Dr. Mark Skousen, Chairman, Investment U


One of the most fascinating “adventure capitalists” I’ve met is Jim Rogers. He’s a free spirit, having managed money with George Soros, taught at Columbia University, written several financial books, traveled around the world by motorcycle (and later a BMW), and now settling down at the age of 60 to have a family… I’ve known Jim for years, and he’s a great friend. My wife Jo Ann and I spent an hour with him at his magnificent mansion in Manhattan (built in 1899), and his answers to my tough questions did not disappoint.
~ Enjoy! AEIOU, Mark

Mark Skousen: You’ve written a book called Hot Commodities: How Anyone Can Invest Profitably In the World’s Best Market. Given that commodities have gone through a major correction of late, are they going to make a comeback? Is this the top of a commodities market, or just a correction?

Jim Rogers: First, we’re in a secular bull market in commodities, which started early in 1999… I went back and looked, and the shortest bull market in commodities I could find lasted 15 years, and the longest lasted 23 years. So, if history is any guide, this bull market will last sometime until 2014 and 2022. That’s not a prediction; I’m just telling you what history would indicate. Yes, some commodities are up, but if you look at the commodities market, there are only five or six commodities that have made all-time highs. And they’re not even – most of them – above the old all-time highs. Zinc is, copper is, and oil is, but the rest of them, even aluminum, which got near its all-time high, or lead, or tin… they’re not far above their old all-time highs, for the most part.

Mark Skousen: Gold and silver… they haven’t hit their all-time highs.

Jim Rogers: Silver is 75% below its all-time high… gold is 30% below its all-time high. Sugar is 80% below its all-time high. Corn is 50% below its all-time high. Cotton is 60% below its all-time high. I could go on and on… and those aren’t adjusted for inflation. So, most commodities now are somewhere between 80% and 90% below their all-time high, especially adjusted for inflation.

So is this over? No. Copper and zinc may slow down for a while. We haven’t even really gotten started. Commodities have… my index has tripled… more than tripled.

Mark Skousen: So easy money has been made, in your opinion?

Jim Rogers: In zinc and copper. But not in coffee. Coffee is 75% below its all-time high. I don’t want to use the term “easy money,” but there’s still plenty of money to be made. Because in bull markets – in every asset class – eventually everything makes a new all-time high.

You buy land in Los Angeles, and if there’s a real estate boom, everything goes to an all-time high, eventually. Even the slums. And usually they go well above the old all-time highs, so we have a long, long, long way to go. There are always corrections. In 1987, stocks went down 40% in five months. Stocks went down in 1994, they went down in 1990, they went down in 1989… we had some big corrections.

But the smart people bought more… they didn’t panic and sell out. In the 1970s, gold at one time, during a two-year period, went down 50%, and a lot of people panicked and gave up, because it was a big two-year draw-down. Well, gold did a turnaround, and went up 850%. Between 1974 and 1976, gold went from $200 to $100, and then it went to $875. This is the way markets work, and if people don’t understand this about markets, yo

[stolwyk]

Commodities Breakdown

By: Adam Hamilton, Zeal Intelligence LLC
-- Posted Friday, 13 October 2006

http://news.goldseek.com/Zealllc/1160755230.php

Extract:
"I have one last chart on the commodities breakdown. A lot of analysts on Wall Street, which is perpetually anti-commodities in focus, have been saying commodities were at all-time highs and therefore needed to plunge and end their bull. But as I’ve argued many times in the past, comparing today’s prices with those of the early 1980s while ignoring inflation is foolish at best and intentionally manipulative at worst. Multi-decade comparisons only make sense when adjusted for the relentless fiat-currency inflation distortions".

Comment: Wall Street is anti commodities, because they support the Fed's statements in this regard. The Fed wants to keep inflation down so much effort is being made to talk commodities down. Wall Street echoes the Fed because they are doing wel out of it.

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

Relativity

By: Theodore Butler
-- Posted 16 October, 2006
http://news.silverseek.com/TedButler/1161030691.php

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

Singapore's gold-backed security starts trading

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com: 20061011:MTFH56611_2006-10-11_09-16-07_L11730630&type=comktNews&rpc=44

Comment: the more, the better.

Gerry

[stolwyk]

Quatar's Gas riches:
http://www.energytribune.com/articles.cfm?aid=256

Congressional Price Incompetence
By Richard Daughty," The Mogambo Guru"
October 18, 2006
http://www.kitco.com/ind/Daughty/oct182006.html

Dubai is the nerve centre of gold trade in the world, says DGCX chief
http://business.maktoob.com/consumerproductsnew.asp?id=20061017074937


Aden Sisters: WATCH THE MAJOR TREND
http://www.gold-eagle.com/editorials_05/aden101606.html

FALLEN EMPIRE by Martin D. Weiss, Ph.D.
Editor, Safe Money Report & MoneyandMarkets.com
October 16, 2006
http://www.financialsense.com/editorials/weiss/2006/1016.html

[stolwyk]

Global: Japan's Missing Link
Stephen S. Roach (from Tokyo)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html
____________

World Gold Council releases Gold Investment Digest By Jon Nones
20 Oct 2006 at 12:36 PM
The World Gold Council released its Gold Investment Digest for the third quarter to end- September.
Here are some key points:
Jewellery sales reached a record $11.4 billion in Q2.
Industrial demand remained broadly stable.
Mine production rose just 2% year-on-year.

Signatories to the second Central Bank Gold Agreement reported sales of just 395 tonnes by the end of the second year of the agreement, 105 tonnes short of the 500 tonne limit.
__________________

International Forecaster MidWeek Reading - Gold, Silver, Economy + More By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1161199413.php

Don’t Get Excited About CPI and Housing Data By: Peter Schiff, Euro Pacific Capital, Inc.
http://news.goldseek.com/EuroCapital/1161357271.php

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

TROUBLE AT MILL: ALICE IN WONDERLAND
Readers know that frequent references have been made to falsifying or omitting US economic data by the FED.

M3 is now not any more recorded and J Sinclair draws our attention to the coming omissions of TIC (Treasury International Capital). This presents the flow of funds from foreign sources to the US.

It is clear that some of these sources are going to be omitted; these include the Caribean source, also referred to by some as the FED's bank-See item (e) of:

http://www.ustreas.gov/tic/ticfiles-chg-20o06.html

Already, the CPI, GDP, employment and deficit data are useless and the aim is to present the best picture or where the data becomes embarrassing, not to give it.

The large USD holders won't be too happy about this; already the UAE is thinking about diversifying out of dollars by heavier weighting of some other currencies.

Apart from this, I read that the US imports are 5% of global GDP and as the countries from the East become financially stronger and trade more with each other while consumption rises, the US will become less important with time, more so because of the massive deficits being run.

The Iraqi and Afghan policy is in tatters; Afghanistan also exports more heroin than ever before and it can't be stopped.

Bush has given the Islam fundamentalists every incentive they needed as well.

The markets are being rigged by the PPT (Plunge Protection Team) and allied Govt institutions and Goldman Sach's Poulson, the new Treasury secretary, is the moving force.

I don't think that the Gold price will increase much prior to the US election, after all the US wants to show that inflation is down and this excludes a high gold price.

The voting machines being used by the US don't leave a paper trail, so expect more fraud.

The US is becoming ENRONISED.

Gerry

[Heavy Metal]

quote:Originally posted by stolwyk

Already, the CPI, GDP, employment and deficit data are useless and the aim is to present the best picture or where the data becomes embarrassing, not to give it.

The large USD holders won't be too happy about this; already the UAE is thinking about diversifying out of dollars by heavier weighting of some other currencies.

Apart from this, I read that the US imports are 5% of global GDP and as the countries from the East become financially stronger and trade more with each other while consumption rises, the US will become less important with time, more so because of the massive deficits being run.

The Iraqi and Afghan policy is in tatters; Afghanistan also exports more heroin than ever before and it can't be stopped.

Bush has given the Islam fundamentalists every incentive they needed as well.

The markets are being rigged by the PPT (Plunge Protection Team) and allied Govt institutions and Goldman Sach's Poulson, the new Treasury secretary, is the moving force.

I don't think that the Gold price will increase much prior to the US election, after all the US wants to show that inflation is down and this excludes a high gold price.

The voting machines being used by the US don't leave a paper trail, so expect more fraud.

The US is becoming ENRONISED.

Gerry



Yes, it's all a conspiracy isn't it Stolwyk. It's an absolute travesty of justice that gold isn't at least $3000/oz. It's all due to the evil Fed, the evil PPT and its investment bank cohorts, and the evil central bankers who will be selling off their gold for decades to come.

Yes it's an absolute travesty of justice that gold still languishes at just over 1/4 of its inflation adjusted 1980 high yet most other hard commodities are at multi year highs in both nominal and real terms.

Stick to uranium Stolwyk, at least that is useful and becoming more so.

[stolwyk]

Australian Treasurer Seeks Orderly Withdrawal From U.S. Dollar

By John Garnaut
Economics Correspondent

10/19/06 "SMH" -- -- TREASURER Peter Costello has called on East Asia's central bankers to "telegraph" their intentions to diversify out of American investments and ensure an orderly adjustment.

Central banks in China, Japan, Taiwan, South Korea and Hong Kong have channelled immense foreign reserves into American government bonds, helping to prop up the US dollar and hold down American interest rates.

Mr Costello said "the strategy had changed" and Chinese central bankers were now looking for alternative investments.

"Of course you can have an orderly adjustment," he told reporters. "And what I would recommend is that these matters be telegraphed well in advance. I think we should begin preparing ourselves for it."

Mr Costello said the "re-emergence" of China as the world's greatest economy "is not something to be feared".

Asked if a muscular China would be a force for good, however, Mr Costello said it would be good for growth and stability. "With the growing economic strength you will see growing influence in diplomacy in the regional architecture, as you would expect.

"I am sure it will be a force for economic development and I am sure that in partnership with other global powers, China wants to see a stable East Asian region."

Earlier, in a speech to open the Australian National University's East Asian Bureau of Economic Research, Mr Costello said Australia's involvement in the region was broader than economics.

"It is a key ingredient of who we are as a people," he said. "While Australia has its own unique culture, we are also a people who confidently enjoy the cultures of Asia, with seven of our top 10 overseas travel destinations being in the region."

Ahead of next month's G20 meeting in Melbourne, Mr Costello called on regional leaders to reform their anachronistic financial systems.

He said underdeveloped financial markets were to blame for the emerging economies of East Asia sending 94 per cent of outward portfolio investment to "ageing" countries outside the region.

He said the region needed to improve poor macroeconomic frameworks, inadequate regulatory systems, uncompetitive markets and insufficient investment in health and education

[stolwyk]

From my previous post: Costello is well informed, being the Australian Treasurer:
10/19/06 "SMH" -- -- TREASURER Peter Costello has called on East Asia's central bankers to "telegraph" their intentions to diversify out of American investments and ensure an orderly adjustment.

Also from previous page:
"M3 is now not any more recorded and J Sinclair draws our attention to the coming omissions of TIC (Treasury International Capital). This presents the flow of funds from foreign sources to the US.

It is clear that some of these sources are going to be omitted; these include the Caribean source, also referred to by some as the FED's bank-See item (e) of:

http://www.ustreas.gov/tic/ticfiles-chg-20o06.html

"The large USD holders won't be too happy about this; already the UAE is thinking about diversifying out of dollars by heavier weighting of some other currencies".

COMMENT: No wonder then that the FED does'nt want investors to know what exactly is happening to the USD as the movement of the currency now becomes secret.

Gerry

[stolwyk]

B Chapman:
Train Wreck of the Week - October 21 2006
http://www.theinternationalforecaster.com/trainwreck.php?Id=147

MARC FABER:
http://news.goldseek.com/GoldSeek/1161577403.php

Unstoppable Chinese Growth & Gold
By: Julian D. W. Phillips, Gold Forecaster –
http://news.goldseek.com/GoldForecaster/1161615600.php

[stolwyk]

COILED SPRINGS AND DARK SHADOWS
by Jim Willie CB - October 25, 2006
http://www.financialsense.com/fsu/editorials/willie/2006/1025.html

RESTRUCTURING THE U.S. ECONOMY- DOWNWARD by Dr. Kurt Richebächer
http://news.goldseek.com/DailyReckoning/1161882010.php

A Phase of Impact By Richard Daughty
" The Mogambo Guru" October 25, 2006
http://www.kitco.com/ind/Daughty/oct252006.html

International Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1161795987.php

[stolwyk]

America and the Dollar Illusion
By Gabor Steingart

"The dollar is still the world's reserve currency, even though it hasn't deserved this status for a long time. The devaluation of the dollar can't be stopped -- it can only be deferred. The result could be a world economic crisis".

http://www.spiegel.de/international/0,1518,440054,00.html

[Heavy Metal]

quote:Originally posted by stolwyk

International Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1161795987.php


"The ECB balance sheet revealed that three banks sold gold last week, while a fourth added gold coins. Net total of 112 million euros was sold or 7.33 tons up from 0.98 tons. This is very small considering India alone bought 156 tons over two months.

The systems reserves of gold and gold receivables decreased to 175.206 billion euros. Foreign currency decreased 700 million euros. Cash in circulation fell by 1.9 billion euros to 591 billion."

Am I to believe that the ECB has about 11500 tonns of gold reserves (=175 billion Euros at current prices)? So even at current sales of 500 tonnes of gold per year there's still 23 years worth of gold to sell?

[stolwyk]

The US is in recession. It takes 3% GDP just to stay even.

The CPI is much higher than reported.

The US can't afford to raise interest rates to keep up the sagging dollar: 85.37 (-34 cents) but the ECB (EEC) can and will.

That will put additional pressure on the US dollar (USD).

Gold should have risen more but is being held down while waiting for the US election which is close.

__________________________________________

U.S. GDP slows to 1.6% rate in quarter
Growth rate is weakest since first quarter of 2003
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Greg Robb, MarketWatch
Last Update: 9:53 AM ET Oct 27, 2006


WASHINGTON (MarketWatch) -- U.S. economic growth slowed sharply in the third quarter, increasing at a real seasonally adjusted annual rate of 1.6% after a 2.6% increase in the second quarter, the Commerce Department said Friday.
The growth rate was below the 2% growth rate expected by economists polled in the MarketWatch survey, and it was the slowest since the first three months of 2003.
Treasury bonds rose, sending yields lower, after the data were released. Read Bond Report. The dollar fell in early trading. See Currency Report. Stocks opened lower after the GDP report. Read Market Snapshot.
Residential investment had the largest negative impact on third-quarter growth. Read full government report.
Investments in housing fell 17.4% in the third quarter, the largest decline since the first quarter of 1991. Housing subtracted 1.1 percentage points from third-quarter growth.
"The housing market did a real number on economic growth in the summer, overwhelming solid consumer and business spending," said Joel Naroff, president of Naroff Economic Advisors.
The consumer sector held up well, with consumer spending accelerating from the previous quarter.
Naroff said the GDP is not a preview of a recession because the weakness was so narrow.
"You really don't have a weak economy if consumers are consuming, businesses are investing, exports are growing and imports are strong," Naroff said.
In nominal terms, GDP increased 3.4% to an annualized $13.3 trillion.
Inflation at the consumer level eased in the July-through-September period. The personal consumption-expenditure-price index increased at a 2.5% annual rate, down from 4% in the second quarter. The core PCE price index -- which removes food and energy costs -- increased at a 2.3% rate, down from 2.7% in the second quarter.
But the core PCE price index has increased 2.4% in the past year, up from 2.2% year-over-year growth in the second quarter. That's the fastest pace since the second quarter of 1995.
The annual inflation rate is above the Federal Reserve's 1.5% to 2% comfort zone.
Fed officials have stressed their discomfort with the high inflation rate, but have said they expect inflation to gradually ease as the economy continues to grow at a moderate pace in coming quarters.
Economists said the Fed is watching closely to see whether the slowdown gathers momentum or if the third quarter was the pause that refreshes growth.
So far, the Fed should be pleased with the soft landing they've achieved. Read Capitol Report.
In the third quarter, consumer spending increased at a 3.1% rate, up from a 2.6% rate in the second quarter. Consumer spending contributed 2.13 percentage points to growth.
Business investment increased at an 8.6% rate, compared with a 4.4% increase in the second quarter. Investments in equipment and software increased at a 6.4% rate, after falling 1.4% in the previous quarter.
The worsening trade balance subtracted 0.6 percentage point from growth. Exports increased 6.5% while imports rose 7.8%.
Inventories were not as bad as feared.
Inventory accumulation continued at a healthy $50.7 billion in the third quarter, down only slightly from $53.7 billion in the second quarter. As a result, inventories subtracted only 0.1 percentage point from growth.
Outstripping inventories and trade, the economy expanded at a 2.1% rate in the third quarter, up slightly from a 2% rate in the seco

[Heavy Metal]

quote:Originally posted by stolwyk

Gold should have risen more but is being held down while waiting for the US election which is close.


Why? You're claiming the US is now in recession. The gold price normally plummets in a recession, it did so in the previous two.

[stolwyk]

So, what was the gold price in the last 2 recessions, please.


Gerry

[tricha]

Jim Rogers: Well, more money has been lost in gold mining stocks than in any other industry – including railroad stocks…

Exclusive Investment U Interview: Jim Rogers Predicts Another Raging Bull Market in Commodities: Issue # 541 By Dr. Mark Skousen, Chairman, Investment U


One of the most fascinating “adventure capitalists” I’ve met is Jim Rogers. He’s a free spirit, having managed money with George Soros, taught at Columbia University, written several financial books, traveled around the world by motorcycle (and later a BMW), and now settling down at the age of 60 to have a family… I’ve known Jim for years, and he’s a great friend. My wife Jo Ann and I spent an hour with him at his magnificent mansion in Manhattan (built in 1899), and his answers to my tough questions did not disappoint.
~ Enjoy! AEIOU, Mark

Mark Skousen: You’ve written a book called Hot Commodities: How Anyone Can Invest Profitably In the World’s Best Market. Given that commodities have gone through a major correction of late, are they going to make a comeback? Is this the top of a commodities market, or just a correction?

Jim Rogers: First, we’re in a secular bull market in commodities, which started early in 1999… I went back and looked, and the shortest bull market in commodities I could find lasted 15 years, and the longest lasted 23 years. So, if history is any guide, this bull market will last sometime until 2014 and 2022. That’s not a prediction; I’m just telling you what history would indicate. Yes, some commodities are up, but if you look at the commodities market, there are only five or six commodities that have made all-time highs. And they’re not even – most of them – above the old all-time highs. Zinc is, copper is, and oil is, but the rest of them, even aluminum, which got near its all-time high, or lead, or tin… they’re not far above their old all-time highs, for the most part.

Mark Skousen: Gold and silver… they haven’t hit their all-time highs.

Jim Rogers: Silver is 75% below its all-time high… gold is 30% below its all-time high. Sugar is 80% below its all-time high. Corn is 50% below its all-time high. Cotton is 60% below its all-time high. I could go on and on… and those aren’t adjusted for inflation. So, most commodities now are somewhere between 80% and 90% below their all-time high, especially adjusted for inflation.

So is this over? No. Copper and zinc may slow down for a while. We haven’t even really gotten started. Commodities have… my index has tripled… more than tripled.
Mark Skousen: So easy money has been made, in your opinion?

Jim Rogers: In zinc and copper. But not in coffee. Coffee is 75% below its all-time high. I don’t want to use the term “easy money,” but there’s still plenty of money to be made. Because in bull markets – in every asset class – eventually everything makes a new all-time high.

You buy land in Los Angeles, and if there’s a real estate boom, everything goes to an all-time high, eventually. Even the slums. And usually they go well above the old all-time highs, so we have a long, long, long way to go. There are always corrections. In 1987, stocks went down 40% in five months. Stocks went down in 1994, they went down in 1990, they went down in 1989… we had some big corrections.

But the smart people bought more… they didn’t panic and sell out. In the 1970s, gold at one time, during a two-year period, went down 50%, and a lot of people panicked and gave up, because it was a big two-year draw-down. Well, gold did a turnaround, and went up 850%. Between 1974 and 1976, gold went from $200 to $100, and then it went to $875. This is the way markets work, and if people don’t understand this about markets, you probably shouldn’t be investing in the first place.

Mark Skousen: But aren’t commodities more ideal for a speculator, rather than a long-term investor? Does buy-and-hol

[stolwyk]

Yes, the US is in recession, this is confirmed by Van Eeden:
"Annualized GDP growth was only 1.6% from July to September, compared to 2.6% in the second quarter and 5.6% in the first quarter, and while I was editing this letter I saw an article on Bloomberg that suggested GDP growth for last quarter may have been overstated by as much as 0.7%, meaning the actual growth was an anemic 0.9%"

COMMENT: The US is in recession when the GDP on a 3 month back-to-back basis is below 3%, the break-even point. The US has been in recession since April.

Paul van Eeden: Drag
October 28, 2006
http://www.paulvaneeden.com/displayArticle.php?articleId=183
__________________________________________________ __

Important:
Japan overtaken, U.S.A. next – Chinese growth!
By: Julian D. W. Phillips, Gold Forecaster Global Watch - GoldForecaster.com

http://news.goldseek.com/GoldForecaster/1162008030.php

COMMENT: "There is also good reason to believe that official figures understate consumer spending in China because of their inadequate coverage of services China’s GDP was re-evaluated. Purchases of homes by the Chinese have risen rapidly since they were first allowed in 1998, but these are also excluded from the figures. If they are added in total household spending has not fallen as a share of GDP".
________________________________________________

Is the first world worker under threat of extension
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=7D724C60-17A4-1130-F51DAEE0C2643100



Denial is Not Just a River in Egypt By: Peter Schiff, Euro Pacific Capital, Inc.
http://news.goldseek.com/EuroCapital/1161973970.php

[Heavy Metal]

quote:Originally posted by stolwyk

Yes, the US is in recession, this is confirmed by Van Eeden:


Wow - the great Mr Stolwyk and fellow gold bug Van Eeden have declared the US is in recession, therefore it must be true.

If the US has been in recession since April as Stolwyk declared, no wonder the gold price has fallen 10% since then. The gold price generally falls during a recession.

[tricha]

Hiring Pace Accelerated Last Month: U.S. Economy Preview

By Vince Golle

Oct. 29 (Bloomberg) -- The unemployment rate held at a five-year low in October and employers added more than twice as many jobs as a month earlier, according to a survey of economists.

The jobless rate stayed at 4.6 percent during the month, according to a Bloomberg News survey of economists before the Labor Department's Nov. 3 report. Some 125,000 jobs were created, compared with 51,000 in September, the survey showed.

Job growth will help recharge an economy that grew last quarter at the slowest pace in more than three years because of the battered housing market, economists said. A separate report tomorrow is forecast to show consumer spending quickened as the third quarter drew to a close.

``As long as job growth and wage gains hold up, household income is unlikely to weaken by enough to bring the consumer down,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. Consumer spending is vital to the outlook for growth because it accounts for about two-thirds of the economy.

Gross domestic product grew at an annual rate of 1.6 percent in the third quarter after a 2.6 percent pace from April through June, the Commerce Department said last week. That's a far cry from the first quarter's 5.6 percent pace and evidence of how the yearlong housing-market downturn has dogged the economy.

The slowdown allowed the Federal Reserve to keep interest rates unchanged last week for a third straight month in anticipation inflation pressures will ebb.

``Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market,'' Fed policy makers said in a statement accompanying their decision. ``Going forward, the economy seems likely to expand at a moderate pace.''

Housing Construction

The decline in home construction subtracted 1.12 percentage points from gross domestic product in the third quarter, the most in almost 25 years, masking an acceleration in consumer purchases. Spending grew at an annual rate of 3.1 percent last quarter, faster than the 2.6 percent pace the prior three months, the Commerce Department's report showed.

``The consumer has remained resilient of late, largely because of the decline in energy prices, the stock-market rally and the solid labor market,'' said John Shin, an economist at Lehman Brothers Holdings Inc. in New York.

Personal spending increased 0.2 percent in September after a 0.1 percent rise a month earlier, according to the median estimate in the Bloomberg survey before tomorrow's report. Economists also forecast incomes to rise 0.3 percent for a second month.

`Solid' Income Growth

``Income trends look solid,'' said John Ryding, chief U.S. economist at Bear Stearns Cos. in New York. Aside from housing, ``I don't see the sources of weakness elsewhere in the economy.''

Job and income growth, higher stock prices and the lowest gasoline prices of the year combined to push up consumer confidence in October. The Conference Board is forecast to report on Oct. 31 that its index of consumer optimism increased to 108, the highest since April.

Three reports on manufacturing are also due this week. On Oct. 31, the National Association of Purchasing Management- Chicago is forecast to report that its business activity index dropped to 58 this month from 62.1. While the report measures all business activity, economists look to it as an indicator of manufacturing in the Chicago area.

Of the 10 largest U.S. counties, only Los Angeles has more manufacturing jobs than Cook County, which includes Chicago and many of its suburbs, according to figures from the Labor Department.

The Institute for Supply Management on Nov. 1 is forecast to report that its manufacturing index for October rose to 53 from 52.9.

The next day, the Commerce Department is forecast to report that factory orders jumped 4 percent in September, reflecting a surge in demand for Boeing Co. aircraft.



Bloo

[stolwyk]

Gold buoyed by weak dollar, decouples from oil
http://www.marketwatch.com/news/story/story.aspx?siteid=mktw&guid=%7B36ACF5F5-0778-4B31-9942-A37270854AAC%7D

Canada stuns market with pledge to tax income trusts
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20061031&ID=6155031

Investing In an Interventional Environment - Guidelines, Gold and Crude Oil by Deepcaster: deepcaster.com
November 3, 2006
http://www.financialsense.com/fsu/editorials/2006/1103.html

International Forecaster MidWeek Reading - Gold, Silver, Economy + More By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1162403674.php

US Productivity growth grinds to a halt
http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&guid={412C4278-0D90-492D-8966-5063072076C4}&dist=bnb

[stolwyk]

U.S. Elections: The Beginning of the End
By: Peter Grandich
http://news.goldseek.com/Grandich/1162840118.php


The Euro Rising as a Reserve Currency Ahead of a Dollar Crisis

Excerpts From – “Gold Forecaster – Global Watch” November 7 , 2006
http://www.kitco.com/ind/AuthenticMoney/nov72006.html


Good reading:
Spent Dollar Momentum - By: Jim Willie CB, GoldenJackass.com


http://news.goldseek.com/GoldenJackass/1162915320.php

[stolwyk]

TROUBLE AT MILL SERIES: DIFFICULT TIMES AHEAD.

Another chapter closing: the demise of the US and the dollar are slowly appearing on the radar.

It is no secret that Bush never was a statesman but instead was more interested in business including tax cuts for the wealthy. His friends did well: Wall Street and the big Press supported him.

His aim was to smash the unions; the debate about raising minimum wages was shameful as these were far too low and had not changed for a number of years.

Inflation smashed the middle classes as they could'nt partake in the temporary positive spin-offs.

The Congress and Senators were more interested in their own well being rather than in the electorate. I rate the overall quality as the worst in modern times.

Corruption was endemic not only in busines but also in Government. The US became a laughing stock, more so as Bush became more dictatorial with time.

Most economic data could'nt be trusted and the FED as well as the US Treasury became a joke overseas.

So, what now?
There are a number of problems:
1. The strength of the Democrats forces Bush in a corner. If he does'nt comply with some of the very justified Democrats' wishes, he can always be impeached. Sure, the Democrats won't do it to score points as this would be counter productive, but they will weigh each action from Bush. They will prepare the way for Hillary to become President and will do whatever is necessary. So, Bush will be a lame duck but could become dangerous as he has shown a lack of judgement and does'nt like to be boxed in.

2. The situation in Iraq is worsening and is becoming more intractable with time. Both Iran and Turkey are looking on and are ready to move with the 5% Sunnies in the middle, being squeezed. Many think that Bush and Blair have contributed more to the Al Qaeda and Islamic fundamentalist cause than anybody else and in turn are responsible for the fall-out including terrorism in Europe.

3. The massive deficits and the unwillingness of the American public to pay their way, instead accusing other countries of not spending enough, can't avoid a looming crash at some stage. The more the US empire deteriorates, the greater the displayed arrogance of the ruling elite. China and others have blunted US criticism by investing heavily in US debt and by doing so, assisted in keeping interest rates lower than these ought to be. That suited both China and the US. Others are also feeding on the US corpse but by now some of these countries are holding too many dollars and need to diversify.

4. Fear of a lower dollar will promote money outflow while foreigners may be less willing to lent money unless US interest rates rise. Meanwhile, European interest rates are rising as well and this further promotes US money moving to this destination. To protect the US dollar somewhat, interest rates need to rise.

5. There have been unjustified complaints by Americans that China is not spending enough. However, this country is strengthening all the time, partly thanks to the inflow of foreign money and increasing internal demand. Sooner or later, China can be more bold with their currency after they have exhausted the US economy and they don't need extra safeguards. US imports as a percentage of the world's GDP are lessening and are becoming less important to others with time.

6. The elections causing control of the Congress and the Senate to move to the Democrats, and their already painful relationship with Bush, have caused consternation overseas and in the cosy Wall Street environment. The future is becoming less predictable and Gold is benefitting from that feeling.

7. US credit is expanding at a very high rate and inflation is coming through loud and clear. Even if the numbers are falsified by the FED and Treasury and are readily being accepted by Wall Street, because they benefit from socalled "Low inflation", the US public slowly understands that real inflation does hurt them. A lower dollar won't help them either as import prices will rise. A higher oil price could hurt t

[Dazza]

need some help

fellow gold follows

what do you guys give for a PE for gold producers?


i hold a junior gold producer, MC only 40 mill

its earning 4cps for next 2 years if gold prices stay avg at 600 an ounce.

its currently trading at a pe of 3.5

i uusally use PE 5 for zinc producers
about 8-10 for producing oil companies.


but for gold what do i use?

[Mick100]

quote:Originally posted by Dazza

need some help

fellow gold follows

what do you guys give for a PE for gold producers?


i hold a junior gold producer, MC only 40 mill

its earning 4cps for next 2 years if gold prices stay avg at 600 an ounce.

its currently trading at a pe of 3.5

i uusally use PE 5 for zinc producers
about 8-10 for producing oil companies.


but for gold what do i use?


Got me interested

Whats the name of this company?
.

[stolwyk]

SUICIDAL TRADE DEFICIT
by Dr. Kurt Richebacher

On the surface, it seems that there are diametrically different views at work in the markets. While the rising bond prices and the falling commodity prices apparently suggest underlying distinct economic bearishness, the sudden surge in stock prices and persistent record-low credit spreads appear to reflect very optimistic expectations about the economy.

The turn in the bond market started in June with yields of 10-year Treasury notes at 5.25%. A decline to 4.7% generated a 5% return for investors within just three months. Annualized, this comes to a return of 20%. Take further into account that there is generally heavy leverage involved, multiplying this return between 10-20 times.

Considering further that this rate of decline of long-term rates has occurred against the backdrop of a firmly inverted yield curve, implying that expenses of carry trade exceed current yields, the strength of this move seems a bit surprising. The quick capital gains, though, have richly offset these interest expenses - for the time being. But to maintain these highly leveraged positions, it will need at least one of two things: either a further sharp fall in long-term rates providing new capital gains or rate cuts by the Fed reducing the costs of carry trade.

More surprising is the new bull run of the stock market in the face of an economic slowdown. Approaching recessions have always tended to depress stock markets in expectation of falling profits. Well, there is a tremendous difference between past and present experience.

Past recessions were all triggered by true monetary tightening, hitting both the economy and the markets. The current economic downturn is unfolding against the backdrop of unmitigated monetary looseness. While the Fed has raised credit costs from unusually low levels, it has done nothing to tighten credit. Its expansion has kept accelerating.

Credit demand has been running wild for consumption, housing and financial speculation. There is just one striking and ominous exception: Corporate credit demand for fixed investment remains zero. Corporations, too, have been borrowing heavily, but for mergers, acquisitions and stock buybacks, not for productive investment.

In 2005, nonfinancial corporations spent $136.8 billion less than their cash flow from retained profits and depreciations on capital expenditures. Simultaneously, they spent $363.6 billion on mergers, acquisitions and stock buybacks. Given their moderate cash surplus, one has to assume that the stock purchases were generally financed with borrowed money.

It is certainly reasonable to regard the strong trend of corporate stock purchases as an early negative indicator of investment intentions. Principally, there are two different ways for corporations to expand and to raise profits. One is the old-fashioned way of organic growth through creating new plant and equipment. The other is to purchase economic growth and higher earnings through mergers and acquisitions by going more deeply into debt.

What, then, has been happening more lately to mergers and acquisitions? In short, they have gone crazy. During the first quarter of 2006, they hit an amount of $558 billion at annual rate, and in the second quarter another $554.8 billion.

This compares with continuously weak capital investment. In the first quarter, it was $2.7 billion below cash flow, and in the second quarter, $43.2 billion above cash flow. There is an interesting comparison with the year 2000. Then, capital expenditures of nonfinancial corporations exceeded their cash flow by $310.8 billion, compared with net stock purchases of $118.2 billion.

We would say that these figures indicate a continuous, rather dramatic change in corporate policies of expansion away from new capital investment and toward “purchasing” growth and earnings. It started in the 1980s. It strongly intensified during the 1990s, and during the last few years has gone to extremes.

Stating this, we primarily have the long-term development in mind. But in th

[stolwyk]

World Gold Council: Supply/Demand July-Sept 2006.
A feature is increased industrial demand.
http://www.kitco.com/reports/wgc/nov152006.pdf

_____________________________

China: retail sales rise at fastest pace in 2 years
By Nipa Piboontanasawat

Nov. 14 (Bloomberg) -- China's retail sales jumped in October at the fastest pace in almost two years as rising incomes spurred consumer spending in the world's fourth-largest economy.

Sales rose 14.3 percent after gaining 13.9 percent in September, the Beijing-based National Bureau of Statistics said today. That beat the 14 percent median estimate of 21 economists surveyed by Bloomberg News.

Retail sales are gaining pace without stoking inflation, allowing Premier Wen Jiabao to push ahead with measures aimed at encouraging consumption. China has raised minimum wages and increased welfare spending to get households to spend more and make the economy less dependent on investment and exports.

``It's very encouraging that consumer spending is improving,'' said Huang Yiping, chief Asia economist at Citigroup Inc. in Hong Kong. ``This is key to resolving the structural imbalance of overinvestment.''

Retail sales grew the most since December 2004, adjusted for distortions caused by the Lunar New Year holiday, which falls in January in some years and in February in others. October's sales of 699.8 billion yuan ($89 billion) brought revenue this year to 6.2 trillion yuan, up 13.6 percent from the year-earlier period.

China's consumer goods market will ``maintain fast growth'' in the fourth quarter, partly because of rising incomes, the Ministry of Commerce said Nov. 2. It forecast 2006 retail sales will rise 13.5 percent to a record 7.6 trillion yuan.

Incomes

Economic growth that averaged about 9 percent over the past decade helped create millions of new middle-class households and a booming market for Nokia Oyj cell phones, Nissan Motor Co. cars and Prada Holding NV handbags.

Wumart Stores Inc., one of China's largest supermarket chains, on Nov. 7 said third-quarter profit jumped 53 percent as more affluent Chinese customers increased spending on food, home appliances and clothes.

Per capita disposable incomes in towns and cities increased 10 percent in the first nine months from the same period last year and rural incomes jumped 11.4 percent. Wages have about doubled in the past five years, in pace with overall economic growth.

``Incomes of people have been rising quite tremendously,'' Alfred Chan, managing director of Ports Design Ltd., a fashion retailer which runs about 300 outlets in China, said in an interview. ``Our future appears to be quite good as economic growth will continue at a good pace.''

Jewelry, Cosmetics

Jewelry sales jumped 42 percent in October from a year earlier and sales of household electronics climbed 25.8 percent. Clothing sales increased 16.6 percent and sales of cosmetics rose 21.2 percent, the release said.

Nissan, Japan's second-largest automaker, on Nov. 2 said it plans to introduce as many as five Infiniti brand models in China by the end of 2008 to tap rising demand for luxury cars. Total vehicle sales in China jumped 27.6 percent last month, the Association of Automobile Manufacturers said Nov. 9.

Inflation slowed to 1.4 percent last month even as household spending heated up, as vegetable costs slumped and excess capacity in some industries prevented companies from boosting prices. Goldman Sachs Group Inc. economist Liang Hong on Oct. 24 said China's ``growth-inflation tradeoff'' has improved.

Overseas Employers

Overseas companies investing in China are also helping boost consumption by hiring local people at wages that are typically higher than at domestic employers.

PricewaterhouseCoopers LLP, the world's biggest accounting firm, on Nov. 6 said it plans to hire 1,500 to 2,000 people annually in China over the ``next several years'' to meet growing demand for financial services.

``Retail sales should keep growing as the government tries to rebalance growth from investm

[stolwyk]

Israel: NEW, QUICKER AND CHEAPER PROCESS TO OBTAIN OIL FROM SHALE.

http://www.imra.org.il/story.php3?id=31531

Saturday, November 11, 2006
Israel to produce synthetic oil from low quality shale at $17 a
Analysis: Israel sees shale replacing oil

By LEAH KRAUSS UPI Energy Correspondent
www.upi.com/Energy/view.php?StoryID=20061107-070924-5161r


HAIFA, Israel, Nov. 7 (UPI) -- The Israeli process for producing energy from oil shale will cut its oil imports by one-third, and will serve as a guide for other countries with oil shale deposits, according to one company.

A.F.S.K. Hom Tov presented its oil shale processing method on Tuesday,
outside Haifa and just down the street from one of the country's two oil refinery facilities.

"Because the patents for this process belong to (the company), Israel is the most advanced in the world in the effort to create energy from oil shale," Moshe Shahal, a Hom Tov legal representative and a former Israeli energy minister, told United Press International.

Shahal estimated that the company's Negev Desert facility would begin
full-scale production in three to four years, while other countries with oil shale deposits will need five to six years to reach production.

Oil shale is limestone rock that contains hydrocarbons, or fossil fuels --about 20 percent of the amount of energy found in coal. Using the rock as a raw material and coating it with bitumen, a residue of the crude oil refining process, the company can produce natural gas, fuel, electricity, or a combination of the three.

Older technologies squeezed the hydrocarbon material out of the rock, with extremely high pressure and at high temperatures.
According to Professor Ze'ev Aizenshtat, an oil shale expert, the Hom Tov process is more environmentally friendly than other /methods of converting oil shale into energy. It also allows for more flexibility in the kind of fuel produced, produces less waste and operates at lower temperatures than other methods.

Though the production process may be more environmentally friendly, the end product is still a fossil fuel, similar in quality to a high-grade diesel when in liquid form.

Israel's shale is low-quality, however -- its "caloric value" is only about 15 percent, while shale in other countries yields 20 percent, according to a report in BusinessWeek earlier this year. As a result, more Israeli shale is needed to produce the same amount of fuel.

Hom Tov isn't worried, however. "This is a much lighter (substance) than what gradually comes out of an oil field," Aizenshtat told UPI, as Hom Tov company owners Israel Feldman and Shimon Kazansky posed for photographs with their fingers dipped in a plastic pitcher of the stuff.

Because fewer refining processes are necessary with oil shale than with crude oil, the final product is a higher quality fuel at a lower price, Aizenshtat said.

The company estimates it will consume 6 million tons of oil shale and 2 million tons of refinery waste each year, for an annual production of 3 million tons of product.

It would cost about $17 to produce a barrel of synthetic oil at the Hom Tov facility, meaning giant profit margins in a world of $45 to $60 per barrel crude. Yearly earnings are forecasted to be between $159 million and $350 million, Shahal said.

Israel has 15 billion tons of oil shale reserves. Jordan, on the other hand, has about 25 billion tons, and the oil shale in Jordan is of higher quality.
Shahal met with Jordanian Energy Minister Azmi Khreisat earlier this year to discuss setting up a plant there.

The United States also has a giant reserve, mostly in Colorado, and Hom Tov sees potential for its patented process there.

The process, which Feldman and Kazansky developed in the mid-1990s, has lately attracted some high-powered investors, including Ofer Glazer -- the third husband of Israel's richest resident, billionaire Carnival Cruise heiress Shari Arison.

"It's a kind of dream" to invest in Hom Tov, Glazer told UPI. "It's the type of investment where Israel needs the product, and i

[stolwyk]

29 June, this thread:
Trouble at mill series: The FED on the treadmill.

And it will be difficult to stop; it also accelerates.

Why?

From my previous post (H/C) on 23 June:
"Of course the elections will decide the FED's movements as well. However, any 6% rate won't touch the current 8-10% price inflation.

Then again, higher interest rates are outside the FED's control because the ECB block is ready to raise theirs, "whatever it takes". That would normally cause an outflow of funds from the US to Europe. And the US can't afford that".

COMMENT: while Bernanke is concentrating on "price inflation", he won't tell you that based on his dear Core inflation of some 3%, there is no need to increase his already 5% Funds rate.

Obviously, the FED works with 2 sets of numbers, the Core inflation and the Real inflation of some 8-10% and it is the latter he is concerned with. But he won't tell you that and Wall Street who have made a lot of money by backing the Fed, won't tell either.

However, the FED works with smoke and mirrors. There is normally a 2% spread between ECB rates and FED rates. So, if the ECB (European Bank) rate is about 3.25%, one ought to get a FED rate of some 5.25% at the moment.

Anything less and foreign money destined for paying US interest (About US$3 bill/day) on their massive debt, will be wavering and possibly flow out from the US to Europe.

It so happens that the ECB is becoming very agressive in raising rates and the mouthing about price inflation can be heard every day. (Most countries, including the ECB Block had massive increases in M3).

So, the battle about increasing interest rates between the FED and the ECB leaves Bernanke on a non-stop treadwheel with the FED following the ECB.

If the ECB decides to accelerate interest rates by say 50 points (1/2%) at a time, the FED needs to follow with the pressure mounting on the Housing sector and the flow-on effects on the US economy.

When is this treadmill going to stop? After enough damage has been done, taking into account the lag in results from rising mortgage rates?

The ECB will need to take care that its exchange rate won't firm up too much.

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

25 Nov. 2006:
And yes, the Europeans want to raisise interest rates and their timing is out of sinc with that of the FED.

The FED can't afford to raise theirs because they are in a check mate position as explained above in my post of 29 June.

The omission of M3 has been noted and yes, virtually unlimited credit with the Banks having a Reserve Ratio approaching zero, still ensuring spending while it lasts:

http://bigpicture.typepad.com/comments/2006/11/the_return_of_m.html

According to this article, M3 is running at a high 11% and Bernanke feared that a higher M3 number would result in price inflation but at the same time he wanted to avoid a recession.

Now he has both. And Europe is not yet finished with raising interest rates. As a consequence, the dollar fell to 83.6. Gold rose $9 to $639 and metals rose; oil rose to $60 as well.

So, how will the master manipulator, Paulson, the previous CEO of Goldman Sachs (Which will benefit no doubt because it is part of the PPT) and now Bush's Treasury secretary, handle this problem?

Buying dollars won't help as there are already too many dollars for sale. Selling currencies has a limit as there is a tendency for the more informed Americans to invest abroad and are buying currencies-selling dollars already.

The Japanese may be unwilling to help if they were asked to buy a falling US dollar.

When the USD falls to 80 cents, then the flow-on effects won't be very nice!

Gerry

[stolwyk]

International Forecaster November 2006 (#3) - Gold, Silver, Economy + More. By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1164556860.php


Posted on Fri, Nov. 10,
ALL BUSINESS: Greenspan not omniscient
http://www.mercurynews.com/mld/mercurynews/business/personal_finance/15981556.htm


IMF Should Sell Gold to Cover Looming Losses, Directors Say
http://www.bloomberg.com/apps/news?pid=20601086&sid=aE3NiMEzvrhY&refer=news


THE LONG VIEW BY Conrad, Editor, Conrad's Charts for CaseyResearch.com
November 22, 2006
http://www.financialsense.com/editorials/conrad/2006/1122.html

[JBmurc]

Getting in Ahead…

I have been surprised at the ferocity of the beating the Australian resource stocks have received this last week; this appears to be a negative divergence. I have to wonder, along with several readers, what the nature of the market force driving this movement actually is, and about the motivation of the sellers setting off such a movement. Could it be re-positioning by big players? In any case this has opened several opportunities because several stocks have been beaten down to ridiculous levels, a wonder to behold. Three positive days since indicates this was an anomaly.

Notable comment from our two top mining houses who operate on a global scale; they both see strong commodity prices in 2007 and beyond. Huge international institutions are still increasing exposure to our share registers with new purchases, potential mine developers getting attention. If you don’t think this is significant you are mistaken. I believe this confirms my thesis with force.

Bottom fishers have been out in force at these price levels, those who listened or knew are “set” at optimum levels for maximum price appreciation. The triangle formation in gold was finally broken at the end of October, this is an important breakout. Now we have apparent price stability the crowd will begin to notice this pattern and move back in. The crowd will be bigger this time; the effect of this on such a small market cannot be underestimated.

Mining stocks

Mining stocks diverged from the final gold drop as expected and predicted, larger stocks in particular led the way which is a copy book signal for an upward break out. They also confirmed by additionally rising further with gold once it began to rise again.

Interesting note how just a few prime gold assets over here are being “consumed” once they “trip over and skin their knee”. I put it that way because for short-term reasons a company price may get trashed and the sellers come out of the woodwork in abundance, who is buying is what interests me for the medium to long-term. No other than J.P. Morgan just soaked up another $12M of this particular company which happens to have huge gold reserves and even more upside… think about that one and draw your own conclusions. They now own nearly $50M of this particular stock at a very depressed price and I don’t think they are about to reduce this excellent hedge against their global gold exposure.

On the same note, I could go on and on about this however I will spare you all… some of our smaller resource plays with monster resources have other local stellar names on their “substantial holder” lists, one I can think of is being dumped by impatient and or weak hands and yet one of our big banks just increased their parcel by 9M shares to over 43M shares. These big institutions are “in the know” and do their homework; I have noted it over and over. I am going to top up with more of this one at the first opportunity myself. Let me say it again… GOLD BULL JUST BEGINNING HERE FOR MANY COMPANIES, it is because gold in the Aussie dollar just broke to higher ground back in August 2005! You can still get in ahead of most players in this market, breakout already confirmed = fantastic opportunity. Once companies solidify their plans here we are seeing Northern American style price increases… five to ten baggers.

Due to the exceptional opportunities on the ASX I am going to focus on ASX Materials Index education via my web site and how to assist investors everywhere to profit from our market. They are just coming off a little but probability suggests not too deep so this is a perfect opportunity in my opinion. Our resource companies include some of the biggest on the planet and many have stellar resources in a number of continents not just Australia. This is a global market down here and I do not want anybody to miss out on the chance to make money and in the case of the US, hedge your global purchasing power.

My analysis concludes that there is a very high probability that within the ASX Materials Index, diver

[stolwyk]

USD 82.42 (-43 cents) and Oil 63.61 (+0.48)
As the dollar moves down, commodities come alive.

Manufacturing contracts in Nov., ISM survey shows Weakest reading since April 2003
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0328E3DC%2D9325%2D4EAA%2DB5C9%2 D68B0DFAD1950%7D&siteid=bigcharts&dist=bigcharts
Comment: The DOW fell

Americans Will Shop Till their Dollars Drop By P. Schiff.
http://news.goldseek.com/EuroCapital/1164988860.php

Inflation Moves Into Overdrive By Roger Wiegand November 24, 2006
http://www.kitco.com/ind/Wiegand/nov242006.html

Moneyization #33 By: Ned W. Schmidt, CFA CEBS
http://news.goldseek.com/NedSchmidt/1164902580.php
___________________________________

International Forecaster MidWeek Reading - Gold, Silver, Economy + More: http://news.goldseek.com/InternationalForecaster/1164827168.php

Extract:
"Every month some new usage is found for silver and this time it is embedded into clothing. It is not new, but it is catching on. This is the silver bullet for keeping the stink out of your socks and other clothing such as underwear, workout clothes, travel outfits and hiking and hunting gear. Silver-coated textiles for use in the burgeoning market for high performance apparel. Silver kills odor – causing bacteria and neutralizes ammonia; it also conducts body heat, keeping the wearer warm in cold weather and cool in hot weather.

Noble Biomaterials has licensed X-Static to more than 300 companies in apparel making.

US soldiers and Marines already wear X-Static socks and T-shirts, which provide “olfactory camouflage as well as a first line of defense against shrapnel wounds, because any of the silver fabric that becomes imbedded in the wound actually starts treating the wound. A pair of X-Static socks contains only about one-hundredth of an ounce of silver. Silver’s germ killing properties have been known for thousands of years. In ancient times, silver was used to purify water. Silver nitrate is dropped into newborn’s eyes to ward off bacterial infections from the mother.

The story of usage goes on, but every year it gobbles up more silver. It won’t be long before the silver inventory will finally be gone and silver will sell at much higher prices".

[stolwyk]

TROUBLE AT MILL SERIES: TIME FOR ACTION

Poulson and Bernanke in China but they'll come back with nothing.

The more informed know that the dollar has to move down; however, the US likes China to upvalue their currency instead. Yes, goods imported by the US will be more expensive but there is room for pricing restraints as profits on Chinese goods tend to be so much higher. Also, China would then import more from the US.

However, China has to look after their employment of the hundreds of millions and a revaluation would make imported goods easier to compete with their own production-this applies to the cheap manufacturers, eg Vietnam.

Important reasons why China has over a trillion US dollars and lends a good part of it to the us:
1. Trying to keep US interest rates low.
2. Promotion of Chinese exports.
3. Political leverage and the US knows it.

These 3 reasons are enough to continue this policy although the Chinese may quietly divert some dollars to other destinations.

Even, if losses are made on holding US currency, as long as it does'nt go down below 80 cents, they may wear it. Besides, while they are expanding at home and in other countries, they may feel that sudden changes are not justified.

In any case, both Japan and Korea should have revalued a long time ago, so China would'nt need to be the scapegoat. The whole resembles a mass of leeches feasting on the US body.

Europe keeps talking about raising interest rates, now and later; so, the EURO is bound to rise as the US has been checkmated and really can't move, particularly because of the housing debacle. The flipside is that while the USD moves down at the same interest rates, many may feel that by lending to the US, losses will be made. So, there will be less enthusiasm for lending to the US, lending to pay the interest on massive debt, unless real interest rates rise.

Wall street used to be full time cheerleaders for the FED but as many writers keep referring to the fraudulent data the FED supplies, some feel, they can't keep it hidden anymore, unless they be exposed as being liars.

The famous M3 data which the FED omitted for publication, has shown that it has risen from 7.5 to about 11% today, a very good reason why it was omitted. Writers refer to the massive credit being injected while all Treasury had to do was to increase the reserve ratio. (Percentage of Cash which can't be lent out). Amazingly, it is approaching zero. Bernanke does't want stagnation, be it a recession or depression.

In the meantime, real inflation has risen to 10% according to some writers, making mockery of the FED's data.

Financial writers are urging US citizens to invest outside their country, thereby putting initial stress on the dollar.

The real problem is that many countries have greatly increased their money supply, so the US is not the only one but it is the only big western country with stagflation and in recession. Now, manufacturing is decreasing as well and this does'nt help the trade deficit.

Savings rates are still negative and private debt is very high with little room to move.

The Democrats won't have much room to move either, now the US has moved so far down the slippery slope.

The point of NO-Return has been reached and the massive increase in money supply, huge debt and connected monetization restrict any healing policy, the FED or Treasury have in mind.

What should the investor do?
Writers have written off the DOW and many are urging investors to at least put part of their savings in Gold/Silver.

I also favour Uranium, Zinc and Nickel.
I am not to keen on lending money with a long term as anything can happen in the meantime.

I feel that investments need to overcome most negatives arising from the conclusions arrived at in this post.

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

[Mick100]

Yes, I agree Gerry

The FED is damned if they do, and damned if they don't. If they lower interest rates the dollar could slide a lot further creating a landslide out of the dollar. If they raise rates then this would lead to a serious reccession/depression.
I think their safest bet would be to stand back and watch and do nothing for the time being.

,

[stolwyk]

BUCK & HOUSING THREE BEARS:
RIPPLES, MOMENTUM, FEEDBACK
Jim Willie CB December 7, 2006
http://www.gold-eagle.com/editorials_05/willie120706.html

International Forecaster MidWeek Reading - Gold, Silver, Economy + More - By: Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster/1165423553.php