G-khan
04-21-2003, 07:12 PM
"The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to meet it." Thucydides
From Tuesday's MIDAS:
"Let’s hope today was a fluke. Haven’t heard much from Goldman Sachs in the gold price capping arena the past many months, but they were in there slamming bullion today."
Perhaps it was. Right off the bat, Goldman Sachs came out a buyer on the Comex and noticeably changed the price movement for the day. Perhaps they were called into action in a Gold Cartel attempt to break gold down and reported back the physical market was so strong that cabal efforts would be futile at these low price points. Thus, they bought back what they sold Tuesday, taking small losses.
What made the action noticeable? The dollar (99.56, up .27) was weak early, but turned into a modest loser. The stock market was weak early too based on horrendous employment numbers, but shrugged off those losses and reversed strongly to the upside. That was the perfect scenario to take gold down, as they have done so often in the past. Not so today: part of the cabal, Goldman Sachs, was buying. GS took advantage of the selling emanating from a stronger dollar and stock market to cover their recent shorts.
However, by the close of the day, Goldman turned modest seller, sending gold back to its $327 capping area, noted all week long, especially in John Brimelow’s commentary. Refco was the late buyer. Gold is in lockdown. Until gold clears $330, that will remain the case.
There is another explanation for the Goldman Sachs activity. They were front-running a large customer order. They are well known on the Comex floor for doing so. When the rally ran out of steam, they dumped their early buys.
Tensions are building all over in the gold world. There was a fight in the gold pit and two traders were ejected. Business on both sides was heavy and choppy. The floor description of today’s action: "very weird."
Speaking of the Comex, why aren’t they back on their pre-9/11 trading hours like every other exchange? Isn’t 19 months enough time to get the gold trading time normalized?
The early flurry in gold resulted from the brief breach of the downtrend line in place since the highs put in the first week of February:
http://futures.tradingcharts.com/chart/GD/43
The tight up and down recent gold trading action is reminiscent of early December, right before gold took off, streaking to $388. It’s not quite the same, but a bit similar. It seems fairly clear that The Gold Cartel lost control of their scam when Treasury Secretary O’Neill resigned on December 6th. It was not until new Treasury Secretary John Snow mobilized gold as the new ESF honcho that the cabal could bring gold back down. The GATA camp believes it is very likely The Gold Cartel is using up too much gold at these low prices, making their efforts unsustainable for much longer. Perhaps, that is what this early December-like trading action is telling us? A breach of $330 would suggest this analysis to be on the correct side.
The CPI in the US for March was .3%, with the core rate at zero. NO inflation was the cry of the Wall Street pundits, which is what they need to rationalize the present sky-high P/E ratios. Annualized, that is 3.6% with a 1.25% Fed Funds rate, leaving us with serious negative real interest rates. Tell the average senior citizen there is no inflation. They could care less about computer costs (down 17%). They are concerned about food and energy costs, the ones that rose.
On that score, the CRB is on the move again, led by May Crude, which finished at $30.55. The CRB rose a substantial 2.61 to 234.07. Technically, it looks ready to challenge its 250+ highs now that is has held and bounced off the technically critical 230 support area.
The CRB chart:
http://futures.tradingcharts.com/chart/RB/W
The John Brimelow Report
Thursday April 17, 2003
Indian ex-duty premiums: AM $8.00, PM $7.91, with world gold at $326.25 and $326.70. Well above legal import level. The fact that Indian demand is currently strong is becoming a commonplace amongst gold trade commentators.
Gold opened buoyantly in Asia on Thursday morning, challenging the $327 barrier almost at once (up $1.35 on the NY close), and causing Mitsui-Sydney to declare, prematurely, the "main seller of the past couple of days apparently done." TOCOM, however, was in no mood to test this proposition, possibly because of the substantial strengthening of the yen (of more than a yen) during their day. On volume equal to 20,831 Comex week the active contract slipped 1 yen, and $US gold was up only 60c, although open interest did edge up another 787 Comex equivalent. Easter is a difficult time for TOCOM operators: they have to go a weekend and effectively two business days before hearing from the rest of the world, most gold markets observing Easter Monday. (NY yesterday traded 32,074 lots; open interest fell 586 contracts.)
As UBS Warburg notes dryly:
"On Monday, gold was trading between $326 and $327/oz while EURUSD was 1.0750. This morning, the dollar has weakened to 1.0950 while gold is trading between $326 and $327/oz."
causing them to repeat their view that
"we believe that there is at least one sizeable selling order being worked at the moment and this is keeping a cap on gold."
An opinion Standard London seems to share:
". The (Wednesday) European open saw gold come under pressure as constant selling chipped away at physical demand. Solid buying under $323.00 was never seriously threatened and the price bounced prior to the New York open."
But with physical offtake as robust as it apparently is, an eventual exhaustion or a retreat by the seller seems likely to permit a lift. That seems to be what the shares are saying. The technical message is acknowledged by the chartist Martin Pring in his latest Weekly Update:
"The Gold Bugs Gold Share Index (HUI) has experienced a marginal breakout above a small base. Unless it is quickly cancelled in the next couple of trading sessions, this breakout suggests that the gold price will soon break above its February/April down trendline. We are not expecting a surge to new highs, but the anticipated rally could be quite tradable." (http://www.pring.com/ )
On Bridgewater Associates:
Why the Economy Won’t Recover…
…without monetary inflation.
Bridgewater argues that the US debt structure has evolved in such a way that any up tick in economic activity will be choked off rapidly. They in fact doubt any such up tick is happening, but point out that one way of breaking out of this trap is to engineer inflation.
Although they say:
"We continue to believe that slow growth is the most-likely scenario (75% chance), but that the risks are on the downside (25%).", the impression is left that they do expect a resort to the printing press, either because of the 25% downturn chance happening, or, possibly, because of impatience with "slow growth".
Bloomberg’s imaginative columnist William Pesek reports on a threat by Pertamina,
Indonesia’s oil company, to switch to trading in euros. He considers this likely to spread.
"there's no ignoring Asia's desire to reduce U.S. influence in the region. Leaders here wonder if scrapping the dollar might expedite the process….. the long-term prospects for the dollar as the undisputed champion of trade and finance have dimmed along with the economy. It's not clear what Washington can do about all this, but it's a dynamic that could lead to tectonic shifts in markets everywhere."
JB
Ray Dalio, Bridgewater magnate in Wilton, Connecticut, and I worked together in Manhattan over 20 years ago. He is one bright guy. I'll never forget the Bluegrass Music Festival we went to in Vermont one summer weekend. Much fun.
CARTEL CAPITULATION WATCH
The DOG held 1400 twice today on early sell-offs and then roared 30 to 1425. The Dow shook off lousy economic news, gaining 80 to 8337.
From Sarge:
Well, the insanity continues. The Philly Fed number comes out and the indices rally. Why? Because the number was expected to be -10 and it was reported to only be -8.8.
What don’t these people understand about the word "negative?" A negative number is a NEGATIVE number.
I guess since the negative number (-) was less than (-) the expected negative number, we end up with a positive number (a negative times a negative = a positive number).
I guess pre-algebra IS important.
For crying out loud . . ..
The economic news continues to worsen:
Washington, April 17 (Bloomberg) -- The number of Americans filing new claims for unemployment benefits last week climbed to the second highest in the past year as falling orders prompted companies to trim payrolls.
States received 442,000 applications for jobless insurance in the week ended Saturday, up 30,000 from a week earlier, the Labor Department said. Claims exceeded 400,000 for a ninth straight week, a reading some economists consider a sign the economy is too weak to create jobs.
The U.S. lost almost a half-million jobs in the past two months as companies such as hand-tool maker Stanley Works and cellular telephone manufacturer Motorola Inc. announced firings. Longer jobless queues may weaken Americans' desire to make purchases, at the same time that war with Iraq has left companies reluctant to invest or hire, economists said.
``It's a picture of a stagnant labor market, and that's not good enough if you're looking to be driven forward by consumer spending,'' said Joshua Shapiro, chief U.S. economist at Maria
Small companies too scared to hire
By Jim Hopkins, USA TODAY
April 16
SAN FRANCISCO — Small-company hiring, which was expected to rebound, instead grew worse last month amid war and economic jitters.
Just 1% of 555 firms surveyed say they plan to add workers — down from 6% in February, the National Federation of Independent Business (NFIB) trade group said Tuesday. The last time it hit 1% was in December 1991.
The darker sentiment reflects skittish business and consumer confidence, which hit lows in March as the United States readied for war, says Mark Zandi, chief economist at Economy.com.
The mood of the nation's 5.8 million small employers is vital to economic growth because they create most new jobs. They also spend billions for machinery, computers and other equipment. The NFIB report follows a forecast by the Business Roundtable, which represents big corporations, showing that just 9% of members plan to add jobs in the next six months. Another 46% expect no change; 45% plan cuts.
BBC News
Wednesday, 16 April, 2003
New York faces 'doomsday' budget
New York City's public workers have been asked to tighten their belts to help tackle its ever-present budget problems - and Mayor Michael Bloomberg has warned that far stricter austerity measures are possible.
Mr Bloomberg presented two versions of his proposed 2004 budget, the outcome depending on whether the city is able to force upstate commuters to pay municipal income tax.
If Mr Bloomberg gets permission for this controversial move, he will bring in an extra $1.4bn a year, and will require savings of only $600m, the details of which are currently under discussion with trade unions.
If he fails, his "doomsday scenario" envisages the loss of 10,000 public jobs, the closure of zoos and fire stations, and vastly reduced spending on education, sanitation and the police force….-END-
Richard Russell last evening:
June gold after opening down two dollars (as usual), closed up .80 at 326.30 (they try to knock gold down every night, but then it is bought during the day session. How long can this flagrant nonsense go on?).
May silver was down 3 to 4.48. July platinum was up 1.40 to 614.00. June palladium was down 15.50 to 148.50.
Gold/Dollar Index ratio was up 3.30 to 328.60 and it's looking increasingly as though we've seen the low in this ratio. The higher the ratio, the more bullish for gold and vice versa.
Gold advance-decline line was up 10 to 1090, and it looks like this important index has completed its bottom and has broken out topside today.
XAU was up .49 to 67.21, HUI, the unhedged Amex "gold-bug" index was up 1.54 to 127.08. I now grade this important average as having completed a bottom and having turned bullish today. Gold shares should be bought here.
AEM down .20, ASA up .28, DROOY up .02, GG up .16, GLG up .10, HL up .18, MDG up .41, NEM up .47, RGLD up .96.
If you take a position in gold shares, buy at least five different stocks and preferably more. Diversify. Be sure to include NEM and RGLD. Before this gold bull market is over, almost ALL gold shares will be higher, a lot higher.
-END-
FLAGRANT NONSENSE!!! Tell that to the cowardly leadership in the gold world who do NOTHING about it!
From Congressman Ron Paul’s office this afternoon:
I thought you might like to see the letter Congressman Paul sent to the Treasury regarding their rules expanding the Patriot Act reporting requirements to jewelers and gold dealers:
I am writing to express my concerns regarding the Financial Crime Enforcement Network (FINCEN)'s proposed new regulations implementing the USA Patriot Act's amendments to the Bank Secrecy Act. If implemented, these regulations will violate the constitutional rights of law-abiding citizens who purchase precious metals and hinder law-enforcement efforts to identify and apprehend terrorists.
Under the rule, dealers in precious metals who purchase or receive more than $50,000 in "jewels, precious metals, precious stones, or jewelry" are required to adopt an anti-money laundering program. The program must include the adoption of "know your customer" type procedures. In addition, the dealers will also be required to report receipts of over $10,000 in cash.
"Know your customer" procedures require dealers to develop a profile of a typical money launderer. The profile is based on a list of legal transactions, which federal bureaucrats have determined are often engaged in by money launderers. Dealers are required to file a suspicious activity report whenever one of their customers matches that profile.
Far from being the type of effective and focused program necessary to identify terrorists, the "know your customer" approach forces the government to look for needles in a haystack. This is because financial institutions file these reports regardless of whether they have any real evidence of criminal activity. For example, according to information obtained by my office, 99.999% of all Currency Transaction Reports are filed on law-abiding citizens. Aside from raising serious concerns about the government's respect for individual privacy, a system with this amount of "false positives" diverts valuable law enforcement resources away from the investigation of real terrorist threats to the harassment of innocent citizens.
Furthermore, at a time when the economy is, at best, recovering from recession, I question the wisdom of imposing costly new reporting and record-keeping regulations on small businesses. Most jewelers and precious metal businesses are small "mom-and-pop" operations that cannot easily afford to comply with burdensome record-keeping regulations.
Many small dealers, in order to provide absolute proof that they are not dealing with terrorists, drug dealers, or other black marketers, will keep a database of all customers to share with the government. Thus, this regulation establishes a de facto database of every precious metals customer in the nation. Such a database would have great potential for abuse if a future administration decided to engage in another mass confiscation of gold, similar to the one that occurred under the Roosevelt Administration in the 1930s.
Concerns over the loss of privacy are going to drive legitimate gold customers into the black market. Ironically, by expanding the illegitimate market for gold, these regulations will enhance the ability of international terrorists to use the precious metals market as a haven for money laundering while decreasing the ability of law enforcement officials to apprehend terrorists.
Treating all precious metal customers as "guilty until proven innocent" turns the fourth amendment on its head. Quite simply, the federal government lacks any constitutional authority to snoop on the transactions of law-abiding gold dealers and customers absent evidence that the proceeds are being used for money laundering.
In conclusion, the proposed regulation expanding the money laundering provisions of the Patriot Act to jewelers and precious metals dealers will further bury law enforcement officers in false positive Suspicious Activities and Currency Transactions Reports, thus hindering efforts to identify and apprehend terrorists. This regulation will also burden small gold dealers and jewelers with new paperwork requirements, expanding the black market for precious metals and turning every law abiding gold coin collector into a criminal suspect. Therefore, I urge the Treasury Department to withdraw this regulation.
Norman Kirk Singleton
Legislative Director
Congressman Ron Paul
203 Cannon
202-225-2831
"Everywhere there rises before our eyes the specter of a society where security, if it is attained at all, will be attained at the expense of freedom, where the security that is attained will be the security of fed beasts in a stable, and where all the high aspirations of humanity will have been crushed by an all-powerful state."
J. Gresham Machen
Former bullion-banking derivatives specialist Laurie McGuirk checks back in from Sydney, Australia:
In case you have forgotten..."Gold/Silver is the only financial asset that is not anothers liability".... everything else is! Anyone notice how many people are calling in old markers lately?? Financial stress..... hmmm.
Havent put pen to paper for a while... been a little busy. Just a wild old ramble waiting for my silver train to leave the station!
Back in USA for 3 weeks as of Sunday to tidy up the AUGUSTA Real Asset/Hard Currency fund being formed in conjunction with Scott Tracy and his team at Endeavour Funds Management. We average 15 years experience in Financial Markets across all sectors and basically I am the manager of the AUGUSTA fund and you would all have an idea what Im doing and why. Its a very good fit with their proprietary models and trading expertise joins with my macro view of who, what, why and where pointing the direction, should be prefect.
... Anyone want the fund mandate/profile and I will send across .... very tightly mandated wholesale fund, what can/cant be done/bought/sold etc ... view it all as insurance, give me 10% of your money and hope Im wrong! That way your 90% will be going gangbusters while I may lose a small bit of your 10% ... If Im correct, the 90% will be worth 10% and the Augusta 10% will be worth 500%...!!!!... Fund Hedge... thats the plan.
here's a little reminder of where/why/what I envisage coming down the highway... pretty quick......
My last NY visit gold went up $42.... hope not this trip.... at least give me some time to get back and put the $ to work down at these bargain levels.... these thoughts jump around a bit, Im outta practice .... and in 4 hrs time .... I have my first proper holiday since Feb 2000.... at least the aussie dollar is up some....wont need to sell the house to pay for a baseball seat this year.
Has been a pretty wild few months with a $150 round trip in gold yet a decided lull in silver....any way you cut it, though, gold/silver has gone DOWN versus EVERY currency in the World..... make of that what you will. I know what It means to me.... i cant believe this opportunity has re-presented itself. The War was a nice distraction. That gold went up so quickly (note I didnt say FAR... that was nuthin... a mere little dummy run!).... shows the serious liquidity issues and when the paper runs at real we are going to see some great moves....both ways! ... a lot of stresses are to played out.... gold doesnt break, shatter, crack, burn or strip but bends like anything ..... it may bend but it will never break or disappear ....unlike a bank or a government. Note the looters in Baghdad went at the real stuff, not paper... store of value maybe???
I have mentioned before that I believe there is significant "official" intervention in all markets. Some clandestine, some brazenly open like JAPAN.... I have little doubt following the past few months action that there is significant official support for the US Dollar at crucial levels.... too many different pieces of paper in the world are saying that they should be weaker than each other....its all just the same weak paper! If only it were redeemable for something...that would be a novel idea... money having some real "value" or backing.
The US dollar looks like its in for an accelerating fall to 1.15 euro short term but we could get 1 more 1.06-7 shorting opportunity (it was 0.84 not long ago) .The US dollar is in a stack of crap. Backed only by the Govt ability to tax its own citizens, The US Dollar is now insolvent. US Households are spending more than earns, even with interest rates at next to zero...There can be NO INCREASE in TAX revenues to support the dollar, (increase corporate tax would kill the equity markets... check mate) so there's only one thing left to do.... CUT GOVT SPENDING and that aint gonna happen soon with wars and economic downturns(its still not a recession yet).... getting backed into a corner is tough but getting out of the corner is tougher!
Hope the world doesnt blink in this poker game... dont forget, WE own all the aces... its called US Debt ..... The rest of the world is funding the economic and social excesses of the US Economy both past and current.. I see that the individual states are all crying poor and are cutting services etc etc all over... worse to come. I saw somewhere that if California sacked every public servant they have, they would still have a deficit of $6 billion for this year.... oh well, thats only the 7th biggest economy in the world!!!
I see the US is printing and giving away US dollars all over Iraq...I gather these are the same US dollar bills that are awash all over the world funding the deficit spending of the US Government... On top of Bob Bernanke, Fed Governor, saying that the Fed "can print as many dollars as it wants at no cost" and the Feds admission that it will initiate "unconventional" responses to combat deflation"..... these are very nasty developments in isolation, yet when added to the current economic debacle, invisible corporate earnings and geo-political tensions .... its a freaking mess. The Vapours are warming their guitars up.... Turning Japanese... the Japanese have tried everything to fix their mess. They talk to the Fed (They already have said they will act in concert to stabilise markets etc) and if there was a "magic solution" I reckon Greenspan would've told them what to do... everyone's bitching that Japan has to do more.... What do you suggest, Al?
Japan Nikkei Index is now at levels below 1983. People will be scared stiff to know that the Dow Jones Industrial Average was about 1200 then... Currently 8300.... jeez thats a long way down!(in 1993 was only 3500)... Dont doubt it wont happen, maybe not next week, month, year but it's as sure as Toronto missing another Stanley Cup final this year. Its taken Japan 13 years to go from owning every golf course, beach resort, hotel, office tower in the world and eating gold laced sushi to an unheard of 6% unemployment with a bankrupt Government propping up markets with freshly printed Yen. The US has started the long slope downwards. The big Difference between Japan and USA is that the Japanese citizen has SAVINGS..... Huge difference ... and its not a favourable difference for the US citizen, unfortunately.
Unemployment is going to be the catalyst of this all. Cost cutting is the only way forward for corporate earnings growth due to a dead consumer and suffocating debt loads...that means jobs... of consumers, tax payers... nice little roundabout, hey! then no consumption, Asian exports slow and the malaise spreads.... Or one could just raid the little "pension plan" kitty....but thats too obvious...GM is in the hole for $25 Billion Underfunded pensions.... thats a crapload of cars to sell to make the "profit" to allow it to be repaid... and they're absolutely screwed if the markets keep headed south... remember these guys have to earn nearly 10% on their funds just to stand still.... a 2 year bond is 1.5%... gotta take some serious risk to get to 10%... what would happen if we had a 15% down year in equities and a quiet bond market yielding nuthing... the liability gets lots bigger...and bigger... till they work for their retirees not their shareholders... Nasty.
The usual suspects are soaking up gold by the tonne with prices down here. Traditional buyers are coming out of the woodwork, and they are long term holders, not sellers. Things are getting way tighter in physical with delays reported in delivery of silver in size... more than 10,000 ozs in 5 kg bars.... 10 week wait. Must have some physical exposure or else you don’t have a gold exposure...you have an exposure to a piece of paper that has something to do with gold or the price allocated to gold... only Gold is worth Gold. No amount of promises to pay count.... standard weights and measures ... worked for 5 gazillion years, why not now....
The real estate bubble is slowly leaking but there is so much credit being thrown around we are going to have inter-generational mortgages soon. I heard the ad on the radio here for people to borrow QUOTE"...$500,000 WITH NO DEPOSIT FOR OUR HOUSE AND LAND PACKAGES".... the average wage is $45k per annum. After tax call it say $30k.... thats 17 years to pay back with no interest charges or putting a kid in school or feeding anyone, or buying a car... this is madness.... Mortgage lenders are popping up on the back of trucks... where are they "getting" this money...its all just debt. hear so many people are using "home equity" to live.... this cant last long... either change your lifestyle or sell your house and get out of debt...that’s the choice and when the second choice becomes the norm, watch out for negative equity ...ouch..lots.
The perception of wealth is also something that has to change over time. A lot of people assume that someone must be very "wealthy" because they own a few houses, cars, boats etc etc... thats understandable... the thing to understand is that 95% of it is false wealth... a debt pyramid.... that when the time comes will topple like the credibility of Baghdad Bob, ourfavouriite Iraqi Information Minister.... any property that has debt over 40-50% of its current "value" as dictated by the lender, is in my opinion over leveraged..... get out of debt and save in real/hard assets....
The only hedge for a deflating property market I believe will be gold and silver.... the property market bubble has been a simple one to feed as people's natural tendency in crisis is to run to the "safest" point... many have done this subconciously by hitting property offers that would have bought the freaking whole suburb 10 years ago.
My old mate, Ian Gordon at Canaccord, has published his latest "Long Wave Analyst".... compulsory reading for any person who is over 5 years old and gets pocketmoney or more! Great historical perspective of where we are, how we got here and ... the only two ways out... inflate or deflate.... I go for both... Inflate what people NEED and deflate what they WANT! ... ie a sheep may be worth the same as a ride-on 7 speed lawnmower..... anyways, get a copy of it .... FAST.
Dont get me wrong, it's not just the US economy thats sucking gas ... its EVERYWHERE.... Europe is a shocker, Asia is ok because it exports rubbish to the US but that will slow rapidly as the screws tighten on consumption ... Sth America ..hmmm...which country is going spontaneously combust this quarter???... Sth Africa.... hmmm...Sovereign Risk City!!! so that leaves.... New Zealand and Australia ... luv NZ... there's a "real economy" and its just across the creek. Pity their Govt Debt is all held offshore and so they are held ransom too.
Australia, many think is the go... pity we (Australia) dont own any of it...90% of gold production is now foreign owned... MIM takeover now by some mob for a few pieces of green paper.... this is a company that built the town of Mt Isa (35,000 people) and is a mega base metals producer here .... the Govt here has soon to learn that flogging off or allowing foreign companies to rape the assets of this country, with an over valued piece of paper, is NOT IN THE NATIONAL INTEREST. This is the same as when Shell tried steal the North West Shelf gas and oil fields by taking over Woodside Petroleum ... They stopped that but only after intense lobbying and under sufferance .... Its gotta stop, otherwise we wont have anything for the kiddies!
Hope everyone has missed my daily musings... i have, as it keeps one focussed, but unfortunately time wouldnt allow lately and I dunno how much time I will get going forward... anyways, if you havent bought gold yet, and its a considered decision, thats cool and good luck with ur chosen medium of investment ... if you havent, I reckon you've got a matter of weeks to getset SUB $340 ... we are in a major league Primary Bull Market in Gold ... one which is gonna shock a lot of participants, due to its severity and duration....
I can be contacted via email on .... lmcguirk@endeavourfunds.com or via my mate Bruce Stewart at Jefferies and Co in NY on 212 284 2007....
Have a good couple of weeks... will try not to watch a market so I come back without hearing the CNBC babble etc etc,.... silver is the go... physical first as I believe we are due for a serious delivery issue at Comex in the next 6 months.... physical doesnt default, paper does.
Go Leafs.... I just love playoff hockey!
ciao
Laurie
Not advice or intended as advice. Just the ramblings of an ex- derivatives hack. Never trust anyone when investing. Do your own analysis. You may learn something, I did. Just my opinion for what its worth..
More from Down Under:
Bill
Watching the low level backing & filling between the cartel sellers and the patient accumulators of gold reminds me of the Florida meeting of the Market Technicians Association in the late 1980s that I attended where the "market technician of the year" award was made to the late Sedge Coppock who responded with a deprecatory speech.
After the formalities I joined a private circle whom Coppock was talking to about the basic "secrets of his success". Foremost in this area was his setting aside the idea that investors place funds as a result of rigorous analysis of individual ventures. Having found that this was not so he eventually realised that most dollars were placed in response to the prevailing herd mentality.
>From this Coppock went on to devise some very successful measures of trends in the herd mentality and won some very large investment accounts. With these large accounts it became very important match the aggregate size of trades to the strength of sentiment. For instance, if you were unloading at a market top you would not want to sell so much stock in a session that you turned the market down "prematurely". On the other hand you would not want to buy so much in a session that you turned the market up "prematurely".
My take is that the Cartel are away with the pixies in thinking that they are selling enough gold to keep the market down. In fact the wise guys are the patient accumulators who are buying little enough to stop it rising to far/too fast. They probably curse a bit when those clots from India & Japan get too "carried away" or when the local wise guy speculators invade their turf.
Of course the patient accumulators know that this little charade will eventually explode to the upside but in the meantime they have one helluva lot of fiat currency and the bad guys are increasingly anaemic from the irreversible bleeding of finite gold reserves. Some would call it poetic justice.
Regards
Alix
The shares took a rest with the HUI giving back strong early gains, closing at 126.81, down .38. The XAU edged back .17 to 67.01.
London and Comex are closed tomorrow for the Easter Holiday. London is closed on Monday also. Thus, gold trading will go into a bit of a hiatus for a few days. It might be helpful to keep the big picture in mind during that time.
Most in the gold world speak of $300, $325, $350, $400 gold. That’s all Mickey Mouse. Gold traded $417 in early 1996. That’s more than seven years ago. Look at what has transpired since then. If it were not for the diabolic suppression of the gold price by The Gold Cartel, gold would be trading at double to triple today's artificially suppressed price. The reason for the discrepancy is the 11,000 extra tonnes of gold the cabal has secretly fed into the system to maintain their deceptive fraud. That is the secret they don’t want the investment world to know and why the IMF blatantly instructs their central member banks to lie about their true gold reserves.
They have been getting away with their devious scheme for years. But now, their days are numbered. Mounting demand for physical gold is eating away at their remaining gold supply ammo. No way will they go down to their last tonne.
The move up early this year is only a prelude to what is coming. The Gold Cartel is like a bunch of heroin addicts. They must get their fix every day by feeding three to four tonnes of gold into the physical market or gold will rise the following day. They cannot stop their addiction. To do so means withdrawal for the crooks. That is the Gold Cartel's dilemma as they run short of supply. At some point, they are going to hit the wall. They just won’t be able to go on anymore. Withdrawal IS coming. The next time gold runs up to $388, it won’t stop there. The Gold Cartel will be too sick to stop gold’s advance. Their drug/gold Pusher, the ESF, will be tapped out. Forget $400 gold. With a mortally sick goon squad, gold is headed for $600 per ounce and well beyond.
Courtesy of David Schectman, of Miles Franklin Ltd, a mega GATA Minnesota coin dealer supporter:
Last Will and Testament Of
Jesse Franklin Cornish
I, Jesse Cornish, being of sound mind, do of my own accord, make this last will, bequeathing all of my earthly possessions as follows:
To my son, Jesse, and my daughter, Candy, I leave all my owned real estate and equities and all my liquid assets in the form of checking, savings, and other money accounts to share and share alike.
To my son, Jesse, I leave my guns, fishing gear, boats and all other personal effects a father would normally pass on to his son.
To my daughter, Candy, I leave the things her mother left. I leave her also certain family treasures, and pieces of collected art described on the attached sheets.
To both my son, Jesse, and my daughter, Candy, I leave my total collection of African art goods, my automobiles, items of jewelry, photographs, music albums, and all household valuables to share and share alike.
To my grandchildren, I leave the faith and hope that your parents will pass on to you whatever is left of this bequest on their demise. And to this I pray that they will add their lot. The bequests I have named appear in the will that is it be probated. It is already in the hands of my lawyers who will see it through for you.
In your own safe-deposit boxes, where you found this private copy is a sealed letter addressed to each of you. You may open it now. Inside you will find specific instructions leading you to the location of special forms of assets I have secured and left for you. This wealth may well be the only thing of real value I have to pass on to you.
It is in the form of gold and silver coins and bullion. Nobody knows I bought it, there is no record of them, and nobody knows where they are except you today.
I did not buy it to speculate. I bought it to get out of paper assets and to preserve capital.
The bullion coins are worth five times what I paid for them and some or the numismatic coins have appreciated over 6000 percent in the last ten years. As the next inflationary cycle reaches double digit, their values will also double.
The numismatic, rare coins along with their certification are in the packets here that bear your names. In your names also are these storage receipts from the warehouses in Montreal and Dallas. They represent the numerous pieces of fine ivory and ebony art carvings I brought out of Africa over the years. You may claim them in person at any time. All of these items are in demand and maintain high liquidity.
I depart this life with the prayer that you will have the foresight and self discipline to leave it as it is until this nation regains fiscal sanity. When that finally comes about, there will be complete monetary reform.
Your gold, silver, and ivory will buy this new form of currency and could well be your only hope for financial survival. When I purchased the uncirculated coins to put away for you, I was afraid and didn’t buy enough. Now I see they have provided the highest appreciation of all, and any further additions to this private part of my bequests to you will include more of the same. It grieves me to inform you that I have also passed on to you a "Legacy of Debt."
My generation found a way to lead the good life by borrowing from yours. We have lived out the last thirty years in a credit "dream world" of luxury and affluence and monetized the massive debt by offering the next two generations as collateral. The material wealth I leave to you will not even begin to pay your share of the bill we ran up during your lifetime and it will haunt you and cause you to ask, "How could my dad do this?"
Please know it was not what I did, but rather, what I failed to do. I just didn’t bother to get personally involved in the affairs of government at any level.
I filled my days to earn large sums of dollars and spent too may nights celebrating when I did. Like millions of others, I stood by as inept elected officials bought votes with your money and changed America from a capitalistic, free enterprise nation to a land ever-approaching mandated socialism.
The conventional investments I planned for your future failed the break-even point years ago. Savings, common stocks, and money funds were tied to the shrinking dollar and eroded away with inflation and taxes, just as they will when this economy turns around to monetize the most massive debt in history.
Over the past 15 years, most of my income was taken away in taxes to finance the enormous bureaucracy that now has a strangle hold on every aspect of our economy.
Even as I write this, I see the vultures circling -waiting to pick apart the probated portion of this will that was already riddled with taxes as I tried to keep it alive.
My final prayer is that you will use my shortcomings as a warning light to guide your way. And that you will try to find forgiveness in your hearts for the things I failed to do.
Get involved. Help get America back into the hands of the earners and the producers.
From my generation you have learned that you cannot feed and house the whole world. You also learned that the nation’s banks do not deserve blind faith. 60 of them failed this past year and 750 more are in trouble with assets represented by over-extended credit.
Don’t be afraid of what lies out there ahead, and don’t ever feel guilty about what you earned yourself. Don’t let elected officials give it away to the plunderers for the sake of re-election and self enrichment.
When the day comes for you to retire, the Social Security program will be bankrupt and gone. I paid into it for nearly forty years but never withdrew a dime.
There is an automatic $275 burial fee you could withdraw for my funeral expenses. I have already designated funds to cover this so please turn it down and afford me the last dignity of paying my own way out.
In everlasting love,
Your dad,
Jesse Cornish
Jesse F. Cornish
State of Minnesota
County of Hennepin
Signed, sealed and delivered by Jesse F. Cornish this 17th day of November, 1980.
GOT TO BE IN IT TO WIN IT!
MIDAS
Appendix
Indonesia May Dump Dollar; Rest of Asia Too?: William Pesek Jr.
Tokyo, April 17 (Bloomberg) -- Pertamina, Indonesia's state oil company, dropped a bombshell recently. It's considering dropping the U.S. dollar for the euro in its oil and gas trades.
With war unfolding in Iraq and a mysterious pneumonia spreading around Asia, few noticed. News that Indonesian government officials favor the euro also fell through the cracks. Yet it could have major implications for the world's biggest economy.
Other Asian countries may not be far behind any move in Indonesia to dump the dollar. The reasons for this are economic and political, and they could trigger a realignment that undermines U.S. bond and stock markets over time.
Indonesia's rationale: The dollar may be the world's reserve currency but it has become too volatile. ``One thing is for sure, the adoption of the euro as an alternative means of payments could be an effective solution to speculative dollar-oriented dealings,'' Indonesia's Vice President Hamzah Haz said last month.
Conspiracy theorists can rest easy. None of this has anything to do with the fact Indonesia is home to the world's largest Muslim population. Rumors of Southeast Asian Muslims and Arabs banding together and dumping dollars to stick it to the U.S. ignore the very real economic justifications for it. This also isn't necessarily about Iraq-related tensions.
Last year's accounting scandals shook many Asians' trust in the U.S. economy. The view here is that little has been done to reform the system. News that a unit of Halliburton Co., formerly run by U.S. Vice President Dick Cheney, already won a post-Iraq war contract has Asians buzzing about American-style crony- capitalism -- much like the U.S. used to complain about Asian cronyism.
A U.S. Funk?
Folks here also worry the U.S. has fallen into a Japan-like funk. The Federal Reserve's moves to cut interest rates to 40-year lows haven't boosted U.S. growth the way Asian leaders and companies expected. One of the most commonly asked questions here is this: ``What if the U.S. can't right itself?''
War in Iraq has added to the dollar's woes. The U.S. currency has lost more than 18 percent against the euro over the last 12 months; it's down more than 8 percent versus the yen.
Perhaps the biggest risk for the dollar, at least in the eyes of some analysts in Asia, is uncertainty surrounding U.S. foreign policy. Now that war in Iraq seems to be wrapping up, Asian markets are wondering if the U.S. will pursue regime change elsewhere. In recent days, for example, the Bush administration has had to deny it's planning to attack either Syria or Iran.
Here in East Asia, most of the focus is on North Korea. While war is unlikely, ``a miscalculation, a misunderstanding or a hawkish assessment of North Korea's intentions by the U.S. could lead to an incident that could escalate,'' says Steve Vickers, chief executive of International Risk Ltd, a risk management consultancy.
A Question of Uncertainty
For Indonesians, questioning the dollar is less about political backlash for war in Iraq than genuine uncertainty. Geopolitical and economic concerns have Indonesian officials and companies wondering if the dollar will become even more volatile. What if, for example, the U.S. began setting the stage for another pre-emptive attack in the Middle East or East Asia?
Even so, there's no ignoring Asia's desire to reduce U.S. influence in the region. Leaders here wonder if scrapping the dollar might expedite the process. Last September, Asian and European leaders formed a task force to help Asia boost euro currency reserves, issue more euro-denominated debt and use the single currency to settle trade bills.
One reason leaders like Mahathir Mohamad of Malaysia favor the euro: It lacks a domestic agenda. Washington has proven quite adept at steering the dollar up and down depending on economic needs. In the early 1990s, a lower dollar was favored to boost growth. Later in the decade the White House favored a rising currency to attract foreign capital.
Euro Volatile, Too
Since 12 countries use Europe's single currency, it may be less susceptible to unpredictable political agendas. Also, the European Central Bank, not politicians, manages it. In a perfect world, the Japanese yen would be Asia's preferred currency. Tokyo's active manipulation of currency markets makes the yen about as appealing as the Russian ruble.
That's not to say Indonesia or other Asian economies are rushing to rid their vaults of dollars. Asian policy makers are cognizant of the euro's own track record for volatility. When, or if, the U.S. economy recovers, officials will have a better idea of how seriously to take the euro's gains.
Still, the long-term prospects for the dollar as the undisputed champion of trade and finance have dimmed along with the economy. It's not clear what Washington can do about all this, but it's a dynamic that could lead to tectonic shifts in markets everywhere.
Last Updated: April 16, 2003 15:31 EDT
********
Copyright 2003, www.LeMetropoleCafe.com
-- Posted Monday, April 21 2003
From Tuesday's MIDAS:
"Let’s hope today was a fluke. Haven’t heard much from Goldman Sachs in the gold price capping arena the past many months, but they were in there slamming bullion today."
Perhaps it was. Right off the bat, Goldman Sachs came out a buyer on the Comex and noticeably changed the price movement for the day. Perhaps they were called into action in a Gold Cartel attempt to break gold down and reported back the physical market was so strong that cabal efforts would be futile at these low price points. Thus, they bought back what they sold Tuesday, taking small losses.
What made the action noticeable? The dollar (99.56, up .27) was weak early, but turned into a modest loser. The stock market was weak early too based on horrendous employment numbers, but shrugged off those losses and reversed strongly to the upside. That was the perfect scenario to take gold down, as they have done so often in the past. Not so today: part of the cabal, Goldman Sachs, was buying. GS took advantage of the selling emanating from a stronger dollar and stock market to cover their recent shorts.
However, by the close of the day, Goldman turned modest seller, sending gold back to its $327 capping area, noted all week long, especially in John Brimelow’s commentary. Refco was the late buyer. Gold is in lockdown. Until gold clears $330, that will remain the case.
There is another explanation for the Goldman Sachs activity. They were front-running a large customer order. They are well known on the Comex floor for doing so. When the rally ran out of steam, they dumped their early buys.
Tensions are building all over in the gold world. There was a fight in the gold pit and two traders were ejected. Business on both sides was heavy and choppy. The floor description of today’s action: "very weird."
Speaking of the Comex, why aren’t they back on their pre-9/11 trading hours like every other exchange? Isn’t 19 months enough time to get the gold trading time normalized?
The early flurry in gold resulted from the brief breach of the downtrend line in place since the highs put in the first week of February:
http://futures.tradingcharts.com/chart/GD/43
The tight up and down recent gold trading action is reminiscent of early December, right before gold took off, streaking to $388. It’s not quite the same, but a bit similar. It seems fairly clear that The Gold Cartel lost control of their scam when Treasury Secretary O’Neill resigned on December 6th. It was not until new Treasury Secretary John Snow mobilized gold as the new ESF honcho that the cabal could bring gold back down. The GATA camp believes it is very likely The Gold Cartel is using up too much gold at these low prices, making their efforts unsustainable for much longer. Perhaps, that is what this early December-like trading action is telling us? A breach of $330 would suggest this analysis to be on the correct side.
The CPI in the US for March was .3%, with the core rate at zero. NO inflation was the cry of the Wall Street pundits, which is what they need to rationalize the present sky-high P/E ratios. Annualized, that is 3.6% with a 1.25% Fed Funds rate, leaving us with serious negative real interest rates. Tell the average senior citizen there is no inflation. They could care less about computer costs (down 17%). They are concerned about food and energy costs, the ones that rose.
On that score, the CRB is on the move again, led by May Crude, which finished at $30.55. The CRB rose a substantial 2.61 to 234.07. Technically, it looks ready to challenge its 250+ highs now that is has held and bounced off the technically critical 230 support area.
The CRB chart:
http://futures.tradingcharts.com/chart/RB/W
The John Brimelow Report
Thursday April 17, 2003
Indian ex-duty premiums: AM $8.00, PM $7.91, with world gold at $326.25 and $326.70. Well above legal import level. The fact that Indian demand is currently strong is becoming a commonplace amongst gold trade commentators.
Gold opened buoyantly in Asia on Thursday morning, challenging the $327 barrier almost at once (up $1.35 on the NY close), and causing Mitsui-Sydney to declare, prematurely, the "main seller of the past couple of days apparently done." TOCOM, however, was in no mood to test this proposition, possibly because of the substantial strengthening of the yen (of more than a yen) during their day. On volume equal to 20,831 Comex week the active contract slipped 1 yen, and $US gold was up only 60c, although open interest did edge up another 787 Comex equivalent. Easter is a difficult time for TOCOM operators: they have to go a weekend and effectively two business days before hearing from the rest of the world, most gold markets observing Easter Monday. (NY yesterday traded 32,074 lots; open interest fell 586 contracts.)
As UBS Warburg notes dryly:
"On Monday, gold was trading between $326 and $327/oz while EURUSD was 1.0750. This morning, the dollar has weakened to 1.0950 while gold is trading between $326 and $327/oz."
causing them to repeat their view that
"we believe that there is at least one sizeable selling order being worked at the moment and this is keeping a cap on gold."
An opinion Standard London seems to share:
". The (Wednesday) European open saw gold come under pressure as constant selling chipped away at physical demand. Solid buying under $323.00 was never seriously threatened and the price bounced prior to the New York open."
But with physical offtake as robust as it apparently is, an eventual exhaustion or a retreat by the seller seems likely to permit a lift. That seems to be what the shares are saying. The technical message is acknowledged by the chartist Martin Pring in his latest Weekly Update:
"The Gold Bugs Gold Share Index (HUI) has experienced a marginal breakout above a small base. Unless it is quickly cancelled in the next couple of trading sessions, this breakout suggests that the gold price will soon break above its February/April down trendline. We are not expecting a surge to new highs, but the anticipated rally could be quite tradable." (http://www.pring.com/ )
On Bridgewater Associates:
Why the Economy Won’t Recover…
…without monetary inflation.
Bridgewater argues that the US debt structure has evolved in such a way that any up tick in economic activity will be choked off rapidly. They in fact doubt any such up tick is happening, but point out that one way of breaking out of this trap is to engineer inflation.
Although they say:
"We continue to believe that slow growth is the most-likely scenario (75% chance), but that the risks are on the downside (25%).", the impression is left that they do expect a resort to the printing press, either because of the 25% downturn chance happening, or, possibly, because of impatience with "slow growth".
Bloomberg’s imaginative columnist William Pesek reports on a threat by Pertamina,
Indonesia’s oil company, to switch to trading in euros. He considers this likely to spread.
"there's no ignoring Asia's desire to reduce U.S. influence in the region. Leaders here wonder if scrapping the dollar might expedite the process….. the long-term prospects for the dollar as the undisputed champion of trade and finance have dimmed along with the economy. It's not clear what Washington can do about all this, but it's a dynamic that could lead to tectonic shifts in markets everywhere."
JB
Ray Dalio, Bridgewater magnate in Wilton, Connecticut, and I worked together in Manhattan over 20 years ago. He is one bright guy. I'll never forget the Bluegrass Music Festival we went to in Vermont one summer weekend. Much fun.
CARTEL CAPITULATION WATCH
The DOG held 1400 twice today on early sell-offs and then roared 30 to 1425. The Dow shook off lousy economic news, gaining 80 to 8337.
From Sarge:
Well, the insanity continues. The Philly Fed number comes out and the indices rally. Why? Because the number was expected to be -10 and it was reported to only be -8.8.
What don’t these people understand about the word "negative?" A negative number is a NEGATIVE number.
I guess since the negative number (-) was less than (-) the expected negative number, we end up with a positive number (a negative times a negative = a positive number).
I guess pre-algebra IS important.
For crying out loud . . ..
The economic news continues to worsen:
Washington, April 17 (Bloomberg) -- The number of Americans filing new claims for unemployment benefits last week climbed to the second highest in the past year as falling orders prompted companies to trim payrolls.
States received 442,000 applications for jobless insurance in the week ended Saturday, up 30,000 from a week earlier, the Labor Department said. Claims exceeded 400,000 for a ninth straight week, a reading some economists consider a sign the economy is too weak to create jobs.
The U.S. lost almost a half-million jobs in the past two months as companies such as hand-tool maker Stanley Works and cellular telephone manufacturer Motorola Inc. announced firings. Longer jobless queues may weaken Americans' desire to make purchases, at the same time that war with Iraq has left companies reluctant to invest or hire, economists said.
``It's a picture of a stagnant labor market, and that's not good enough if you're looking to be driven forward by consumer spending,'' said Joshua Shapiro, chief U.S. economist at Maria
Small companies too scared to hire
By Jim Hopkins, USA TODAY
April 16
SAN FRANCISCO — Small-company hiring, which was expected to rebound, instead grew worse last month amid war and economic jitters.
Just 1% of 555 firms surveyed say they plan to add workers — down from 6% in February, the National Federation of Independent Business (NFIB) trade group said Tuesday. The last time it hit 1% was in December 1991.
The darker sentiment reflects skittish business and consumer confidence, which hit lows in March as the United States readied for war, says Mark Zandi, chief economist at Economy.com.
The mood of the nation's 5.8 million small employers is vital to economic growth because they create most new jobs. They also spend billions for machinery, computers and other equipment. The NFIB report follows a forecast by the Business Roundtable, which represents big corporations, showing that just 9% of members plan to add jobs in the next six months. Another 46% expect no change; 45% plan cuts.
BBC News
Wednesday, 16 April, 2003
New York faces 'doomsday' budget
New York City's public workers have been asked to tighten their belts to help tackle its ever-present budget problems - and Mayor Michael Bloomberg has warned that far stricter austerity measures are possible.
Mr Bloomberg presented two versions of his proposed 2004 budget, the outcome depending on whether the city is able to force upstate commuters to pay municipal income tax.
If Mr Bloomberg gets permission for this controversial move, he will bring in an extra $1.4bn a year, and will require savings of only $600m, the details of which are currently under discussion with trade unions.
If he fails, his "doomsday scenario" envisages the loss of 10,000 public jobs, the closure of zoos and fire stations, and vastly reduced spending on education, sanitation and the police force….-END-
Richard Russell last evening:
June gold after opening down two dollars (as usual), closed up .80 at 326.30 (they try to knock gold down every night, but then it is bought during the day session. How long can this flagrant nonsense go on?).
May silver was down 3 to 4.48. July platinum was up 1.40 to 614.00. June palladium was down 15.50 to 148.50.
Gold/Dollar Index ratio was up 3.30 to 328.60 and it's looking increasingly as though we've seen the low in this ratio. The higher the ratio, the more bullish for gold and vice versa.
Gold advance-decline line was up 10 to 1090, and it looks like this important index has completed its bottom and has broken out topside today.
XAU was up .49 to 67.21, HUI, the unhedged Amex "gold-bug" index was up 1.54 to 127.08. I now grade this important average as having completed a bottom and having turned bullish today. Gold shares should be bought here.
AEM down .20, ASA up .28, DROOY up .02, GG up .16, GLG up .10, HL up .18, MDG up .41, NEM up .47, RGLD up .96.
If you take a position in gold shares, buy at least five different stocks and preferably more. Diversify. Be sure to include NEM and RGLD. Before this gold bull market is over, almost ALL gold shares will be higher, a lot higher.
-END-
FLAGRANT NONSENSE!!! Tell that to the cowardly leadership in the gold world who do NOTHING about it!
From Congressman Ron Paul’s office this afternoon:
I thought you might like to see the letter Congressman Paul sent to the Treasury regarding their rules expanding the Patriot Act reporting requirements to jewelers and gold dealers:
I am writing to express my concerns regarding the Financial Crime Enforcement Network (FINCEN)'s proposed new regulations implementing the USA Patriot Act's amendments to the Bank Secrecy Act. If implemented, these regulations will violate the constitutional rights of law-abiding citizens who purchase precious metals and hinder law-enforcement efforts to identify and apprehend terrorists.
Under the rule, dealers in precious metals who purchase or receive more than $50,000 in "jewels, precious metals, precious stones, or jewelry" are required to adopt an anti-money laundering program. The program must include the adoption of "know your customer" type procedures. In addition, the dealers will also be required to report receipts of over $10,000 in cash.
"Know your customer" procedures require dealers to develop a profile of a typical money launderer. The profile is based on a list of legal transactions, which federal bureaucrats have determined are often engaged in by money launderers. Dealers are required to file a suspicious activity report whenever one of their customers matches that profile.
Far from being the type of effective and focused program necessary to identify terrorists, the "know your customer" approach forces the government to look for needles in a haystack. This is because financial institutions file these reports regardless of whether they have any real evidence of criminal activity. For example, according to information obtained by my office, 99.999% of all Currency Transaction Reports are filed on law-abiding citizens. Aside from raising serious concerns about the government's respect for individual privacy, a system with this amount of "false positives" diverts valuable law enforcement resources away from the investigation of real terrorist threats to the harassment of innocent citizens.
Furthermore, at a time when the economy is, at best, recovering from recession, I question the wisdom of imposing costly new reporting and record-keeping regulations on small businesses. Most jewelers and precious metal businesses are small "mom-and-pop" operations that cannot easily afford to comply with burdensome record-keeping regulations.
Many small dealers, in order to provide absolute proof that they are not dealing with terrorists, drug dealers, or other black marketers, will keep a database of all customers to share with the government. Thus, this regulation establishes a de facto database of every precious metals customer in the nation. Such a database would have great potential for abuse if a future administration decided to engage in another mass confiscation of gold, similar to the one that occurred under the Roosevelt Administration in the 1930s.
Concerns over the loss of privacy are going to drive legitimate gold customers into the black market. Ironically, by expanding the illegitimate market for gold, these regulations will enhance the ability of international terrorists to use the precious metals market as a haven for money laundering while decreasing the ability of law enforcement officials to apprehend terrorists.
Treating all precious metal customers as "guilty until proven innocent" turns the fourth amendment on its head. Quite simply, the federal government lacks any constitutional authority to snoop on the transactions of law-abiding gold dealers and customers absent evidence that the proceeds are being used for money laundering.
In conclusion, the proposed regulation expanding the money laundering provisions of the Patriot Act to jewelers and precious metals dealers will further bury law enforcement officers in false positive Suspicious Activities and Currency Transactions Reports, thus hindering efforts to identify and apprehend terrorists. This regulation will also burden small gold dealers and jewelers with new paperwork requirements, expanding the black market for precious metals and turning every law abiding gold coin collector into a criminal suspect. Therefore, I urge the Treasury Department to withdraw this regulation.
Norman Kirk Singleton
Legislative Director
Congressman Ron Paul
203 Cannon
202-225-2831
"Everywhere there rises before our eyes the specter of a society where security, if it is attained at all, will be attained at the expense of freedom, where the security that is attained will be the security of fed beasts in a stable, and where all the high aspirations of humanity will have been crushed by an all-powerful state."
J. Gresham Machen
Former bullion-banking derivatives specialist Laurie McGuirk checks back in from Sydney, Australia:
In case you have forgotten..."Gold/Silver is the only financial asset that is not anothers liability".... everything else is! Anyone notice how many people are calling in old markers lately?? Financial stress..... hmmm.
Havent put pen to paper for a while... been a little busy. Just a wild old ramble waiting for my silver train to leave the station!
Back in USA for 3 weeks as of Sunday to tidy up the AUGUSTA Real Asset/Hard Currency fund being formed in conjunction with Scott Tracy and his team at Endeavour Funds Management. We average 15 years experience in Financial Markets across all sectors and basically I am the manager of the AUGUSTA fund and you would all have an idea what Im doing and why. Its a very good fit with their proprietary models and trading expertise joins with my macro view of who, what, why and where pointing the direction, should be prefect.
... Anyone want the fund mandate/profile and I will send across .... very tightly mandated wholesale fund, what can/cant be done/bought/sold etc ... view it all as insurance, give me 10% of your money and hope Im wrong! That way your 90% will be going gangbusters while I may lose a small bit of your 10% ... If Im correct, the 90% will be worth 10% and the Augusta 10% will be worth 500%...!!!!... Fund Hedge... thats the plan.
here's a little reminder of where/why/what I envisage coming down the highway... pretty quick......
My last NY visit gold went up $42.... hope not this trip.... at least give me some time to get back and put the $ to work down at these bargain levels.... these thoughts jump around a bit, Im outta practice .... and in 4 hrs time .... I have my first proper holiday since Feb 2000.... at least the aussie dollar is up some....wont need to sell the house to pay for a baseball seat this year.
Has been a pretty wild few months with a $150 round trip in gold yet a decided lull in silver....any way you cut it, though, gold/silver has gone DOWN versus EVERY currency in the World..... make of that what you will. I know what It means to me.... i cant believe this opportunity has re-presented itself. The War was a nice distraction. That gold went up so quickly (note I didnt say FAR... that was nuthin... a mere little dummy run!).... shows the serious liquidity issues and when the paper runs at real we are going to see some great moves....both ways! ... a lot of stresses are to played out.... gold doesnt break, shatter, crack, burn or strip but bends like anything ..... it may bend but it will never break or disappear ....unlike a bank or a government. Note the looters in Baghdad went at the real stuff, not paper... store of value maybe???
I have mentioned before that I believe there is significant "official" intervention in all markets. Some clandestine, some brazenly open like JAPAN.... I have little doubt following the past few months action that there is significant official support for the US Dollar at crucial levels.... too many different pieces of paper in the world are saying that they should be weaker than each other....its all just the same weak paper! If only it were redeemable for something...that would be a novel idea... money having some real "value" or backing.
The US dollar looks like its in for an accelerating fall to 1.15 euro short term but we could get 1 more 1.06-7 shorting opportunity (it was 0.84 not long ago) .The US dollar is in a stack of crap. Backed only by the Govt ability to tax its own citizens, The US Dollar is now insolvent. US Households are spending more than earns, even with interest rates at next to zero...There can be NO INCREASE in TAX revenues to support the dollar, (increase corporate tax would kill the equity markets... check mate) so there's only one thing left to do.... CUT GOVT SPENDING and that aint gonna happen soon with wars and economic downturns(its still not a recession yet).... getting backed into a corner is tough but getting out of the corner is tougher!
Hope the world doesnt blink in this poker game... dont forget, WE own all the aces... its called US Debt ..... The rest of the world is funding the economic and social excesses of the US Economy both past and current.. I see that the individual states are all crying poor and are cutting services etc etc all over... worse to come. I saw somewhere that if California sacked every public servant they have, they would still have a deficit of $6 billion for this year.... oh well, thats only the 7th biggest economy in the world!!!
I see the US is printing and giving away US dollars all over Iraq...I gather these are the same US dollar bills that are awash all over the world funding the deficit spending of the US Government... On top of Bob Bernanke, Fed Governor, saying that the Fed "can print as many dollars as it wants at no cost" and the Feds admission that it will initiate "unconventional" responses to combat deflation"..... these are very nasty developments in isolation, yet when added to the current economic debacle, invisible corporate earnings and geo-political tensions .... its a freaking mess. The Vapours are warming their guitars up.... Turning Japanese... the Japanese have tried everything to fix their mess. They talk to the Fed (They already have said they will act in concert to stabilise markets etc) and if there was a "magic solution" I reckon Greenspan would've told them what to do... everyone's bitching that Japan has to do more.... What do you suggest, Al?
Japan Nikkei Index is now at levels below 1983. People will be scared stiff to know that the Dow Jones Industrial Average was about 1200 then... Currently 8300.... jeez thats a long way down!(in 1993 was only 3500)... Dont doubt it wont happen, maybe not next week, month, year but it's as sure as Toronto missing another Stanley Cup final this year. Its taken Japan 13 years to go from owning every golf course, beach resort, hotel, office tower in the world and eating gold laced sushi to an unheard of 6% unemployment with a bankrupt Government propping up markets with freshly printed Yen. The US has started the long slope downwards. The big Difference between Japan and USA is that the Japanese citizen has SAVINGS..... Huge difference ... and its not a favourable difference for the US citizen, unfortunately.
Unemployment is going to be the catalyst of this all. Cost cutting is the only way forward for corporate earnings growth due to a dead consumer and suffocating debt loads...that means jobs... of consumers, tax payers... nice little roundabout, hey! then no consumption, Asian exports slow and the malaise spreads.... Or one could just raid the little "pension plan" kitty....but thats too obvious...GM is in the hole for $25 Billion Underfunded pensions.... thats a crapload of cars to sell to make the "profit" to allow it to be repaid... and they're absolutely screwed if the markets keep headed south... remember these guys have to earn nearly 10% on their funds just to stand still.... a 2 year bond is 1.5%... gotta take some serious risk to get to 10%... what would happen if we had a 15% down year in equities and a quiet bond market yielding nuthing... the liability gets lots bigger...and bigger... till they work for their retirees not their shareholders... Nasty.
The usual suspects are soaking up gold by the tonne with prices down here. Traditional buyers are coming out of the woodwork, and they are long term holders, not sellers. Things are getting way tighter in physical with delays reported in delivery of silver in size... more than 10,000 ozs in 5 kg bars.... 10 week wait. Must have some physical exposure or else you don’t have a gold exposure...you have an exposure to a piece of paper that has something to do with gold or the price allocated to gold... only Gold is worth Gold. No amount of promises to pay count.... standard weights and measures ... worked for 5 gazillion years, why not now....
The real estate bubble is slowly leaking but there is so much credit being thrown around we are going to have inter-generational mortgages soon. I heard the ad on the radio here for people to borrow QUOTE"...$500,000 WITH NO DEPOSIT FOR OUR HOUSE AND LAND PACKAGES".... the average wage is $45k per annum. After tax call it say $30k.... thats 17 years to pay back with no interest charges or putting a kid in school or feeding anyone, or buying a car... this is madness.... Mortgage lenders are popping up on the back of trucks... where are they "getting" this money...its all just debt. hear so many people are using "home equity" to live.... this cant last long... either change your lifestyle or sell your house and get out of debt...that’s the choice and when the second choice becomes the norm, watch out for negative equity ...ouch..lots.
The perception of wealth is also something that has to change over time. A lot of people assume that someone must be very "wealthy" because they own a few houses, cars, boats etc etc... thats understandable... the thing to understand is that 95% of it is false wealth... a debt pyramid.... that when the time comes will topple like the credibility of Baghdad Bob, ourfavouriite Iraqi Information Minister.... any property that has debt over 40-50% of its current "value" as dictated by the lender, is in my opinion over leveraged..... get out of debt and save in real/hard assets....
The only hedge for a deflating property market I believe will be gold and silver.... the property market bubble has been a simple one to feed as people's natural tendency in crisis is to run to the "safest" point... many have done this subconciously by hitting property offers that would have bought the freaking whole suburb 10 years ago.
My old mate, Ian Gordon at Canaccord, has published his latest "Long Wave Analyst".... compulsory reading for any person who is over 5 years old and gets pocketmoney or more! Great historical perspective of where we are, how we got here and ... the only two ways out... inflate or deflate.... I go for both... Inflate what people NEED and deflate what they WANT! ... ie a sheep may be worth the same as a ride-on 7 speed lawnmower..... anyways, get a copy of it .... FAST.
Dont get me wrong, it's not just the US economy thats sucking gas ... its EVERYWHERE.... Europe is a shocker, Asia is ok because it exports rubbish to the US but that will slow rapidly as the screws tighten on consumption ... Sth America ..hmmm...which country is going spontaneously combust this quarter???... Sth Africa.... hmmm...Sovereign Risk City!!! so that leaves.... New Zealand and Australia ... luv NZ... there's a "real economy" and its just across the creek. Pity their Govt Debt is all held offshore and so they are held ransom too.
Australia, many think is the go... pity we (Australia) dont own any of it...90% of gold production is now foreign owned... MIM takeover now by some mob for a few pieces of green paper.... this is a company that built the town of Mt Isa (35,000 people) and is a mega base metals producer here .... the Govt here has soon to learn that flogging off or allowing foreign companies to rape the assets of this country, with an over valued piece of paper, is NOT IN THE NATIONAL INTEREST. This is the same as when Shell tried steal the North West Shelf gas and oil fields by taking over Woodside Petroleum ... They stopped that but only after intense lobbying and under sufferance .... Its gotta stop, otherwise we wont have anything for the kiddies!
Hope everyone has missed my daily musings... i have, as it keeps one focussed, but unfortunately time wouldnt allow lately and I dunno how much time I will get going forward... anyways, if you havent bought gold yet, and its a considered decision, thats cool and good luck with ur chosen medium of investment ... if you havent, I reckon you've got a matter of weeks to getset SUB $340 ... we are in a major league Primary Bull Market in Gold ... one which is gonna shock a lot of participants, due to its severity and duration....
I can be contacted via email on .... lmcguirk@endeavourfunds.com or via my mate Bruce Stewart at Jefferies and Co in NY on 212 284 2007....
Have a good couple of weeks... will try not to watch a market so I come back without hearing the CNBC babble etc etc,.... silver is the go... physical first as I believe we are due for a serious delivery issue at Comex in the next 6 months.... physical doesnt default, paper does.
Go Leafs.... I just love playoff hockey!
ciao
Laurie
Not advice or intended as advice. Just the ramblings of an ex- derivatives hack. Never trust anyone when investing. Do your own analysis. You may learn something, I did. Just my opinion for what its worth..
More from Down Under:
Bill
Watching the low level backing & filling between the cartel sellers and the patient accumulators of gold reminds me of the Florida meeting of the Market Technicians Association in the late 1980s that I attended where the "market technician of the year" award was made to the late Sedge Coppock who responded with a deprecatory speech.
After the formalities I joined a private circle whom Coppock was talking to about the basic "secrets of his success". Foremost in this area was his setting aside the idea that investors place funds as a result of rigorous analysis of individual ventures. Having found that this was not so he eventually realised that most dollars were placed in response to the prevailing herd mentality.
>From this Coppock went on to devise some very successful measures of trends in the herd mentality and won some very large investment accounts. With these large accounts it became very important match the aggregate size of trades to the strength of sentiment. For instance, if you were unloading at a market top you would not want to sell so much stock in a session that you turned the market down "prematurely". On the other hand you would not want to buy so much in a session that you turned the market up "prematurely".
My take is that the Cartel are away with the pixies in thinking that they are selling enough gold to keep the market down. In fact the wise guys are the patient accumulators who are buying little enough to stop it rising to far/too fast. They probably curse a bit when those clots from India & Japan get too "carried away" or when the local wise guy speculators invade their turf.
Of course the patient accumulators know that this little charade will eventually explode to the upside but in the meantime they have one helluva lot of fiat currency and the bad guys are increasingly anaemic from the irreversible bleeding of finite gold reserves. Some would call it poetic justice.
Regards
Alix
The shares took a rest with the HUI giving back strong early gains, closing at 126.81, down .38. The XAU edged back .17 to 67.01.
London and Comex are closed tomorrow for the Easter Holiday. London is closed on Monday also. Thus, gold trading will go into a bit of a hiatus for a few days. It might be helpful to keep the big picture in mind during that time.
Most in the gold world speak of $300, $325, $350, $400 gold. That’s all Mickey Mouse. Gold traded $417 in early 1996. That’s more than seven years ago. Look at what has transpired since then. If it were not for the diabolic suppression of the gold price by The Gold Cartel, gold would be trading at double to triple today's artificially suppressed price. The reason for the discrepancy is the 11,000 extra tonnes of gold the cabal has secretly fed into the system to maintain their deceptive fraud. That is the secret they don’t want the investment world to know and why the IMF blatantly instructs their central member banks to lie about their true gold reserves.
They have been getting away with their devious scheme for years. But now, their days are numbered. Mounting demand for physical gold is eating away at their remaining gold supply ammo. No way will they go down to their last tonne.
The move up early this year is only a prelude to what is coming. The Gold Cartel is like a bunch of heroin addicts. They must get their fix every day by feeding three to four tonnes of gold into the physical market or gold will rise the following day. They cannot stop their addiction. To do so means withdrawal for the crooks. That is the Gold Cartel's dilemma as they run short of supply. At some point, they are going to hit the wall. They just won’t be able to go on anymore. Withdrawal IS coming. The next time gold runs up to $388, it won’t stop there. The Gold Cartel will be too sick to stop gold’s advance. Their drug/gold Pusher, the ESF, will be tapped out. Forget $400 gold. With a mortally sick goon squad, gold is headed for $600 per ounce and well beyond.
Courtesy of David Schectman, of Miles Franklin Ltd, a mega GATA Minnesota coin dealer supporter:
Last Will and Testament Of
Jesse Franklin Cornish
I, Jesse Cornish, being of sound mind, do of my own accord, make this last will, bequeathing all of my earthly possessions as follows:
To my son, Jesse, and my daughter, Candy, I leave all my owned real estate and equities and all my liquid assets in the form of checking, savings, and other money accounts to share and share alike.
To my son, Jesse, I leave my guns, fishing gear, boats and all other personal effects a father would normally pass on to his son.
To my daughter, Candy, I leave the things her mother left. I leave her also certain family treasures, and pieces of collected art described on the attached sheets.
To both my son, Jesse, and my daughter, Candy, I leave my total collection of African art goods, my automobiles, items of jewelry, photographs, music albums, and all household valuables to share and share alike.
To my grandchildren, I leave the faith and hope that your parents will pass on to you whatever is left of this bequest on their demise. And to this I pray that they will add their lot. The bequests I have named appear in the will that is it be probated. It is already in the hands of my lawyers who will see it through for you.
In your own safe-deposit boxes, where you found this private copy is a sealed letter addressed to each of you. You may open it now. Inside you will find specific instructions leading you to the location of special forms of assets I have secured and left for you. This wealth may well be the only thing of real value I have to pass on to you.
It is in the form of gold and silver coins and bullion. Nobody knows I bought it, there is no record of them, and nobody knows where they are except you today.
I did not buy it to speculate. I bought it to get out of paper assets and to preserve capital.
The bullion coins are worth five times what I paid for them and some or the numismatic coins have appreciated over 6000 percent in the last ten years. As the next inflationary cycle reaches double digit, their values will also double.
The numismatic, rare coins along with their certification are in the packets here that bear your names. In your names also are these storage receipts from the warehouses in Montreal and Dallas. They represent the numerous pieces of fine ivory and ebony art carvings I brought out of Africa over the years. You may claim them in person at any time. All of these items are in demand and maintain high liquidity.
I depart this life with the prayer that you will have the foresight and self discipline to leave it as it is until this nation regains fiscal sanity. When that finally comes about, there will be complete monetary reform.
Your gold, silver, and ivory will buy this new form of currency and could well be your only hope for financial survival. When I purchased the uncirculated coins to put away for you, I was afraid and didn’t buy enough. Now I see they have provided the highest appreciation of all, and any further additions to this private part of my bequests to you will include more of the same. It grieves me to inform you that I have also passed on to you a "Legacy of Debt."
My generation found a way to lead the good life by borrowing from yours. We have lived out the last thirty years in a credit "dream world" of luxury and affluence and monetized the massive debt by offering the next two generations as collateral. The material wealth I leave to you will not even begin to pay your share of the bill we ran up during your lifetime and it will haunt you and cause you to ask, "How could my dad do this?"
Please know it was not what I did, but rather, what I failed to do. I just didn’t bother to get personally involved in the affairs of government at any level.
I filled my days to earn large sums of dollars and spent too may nights celebrating when I did. Like millions of others, I stood by as inept elected officials bought votes with your money and changed America from a capitalistic, free enterprise nation to a land ever-approaching mandated socialism.
The conventional investments I planned for your future failed the break-even point years ago. Savings, common stocks, and money funds were tied to the shrinking dollar and eroded away with inflation and taxes, just as they will when this economy turns around to monetize the most massive debt in history.
Over the past 15 years, most of my income was taken away in taxes to finance the enormous bureaucracy that now has a strangle hold on every aspect of our economy.
Even as I write this, I see the vultures circling -waiting to pick apart the probated portion of this will that was already riddled with taxes as I tried to keep it alive.
My final prayer is that you will use my shortcomings as a warning light to guide your way. And that you will try to find forgiveness in your hearts for the things I failed to do.
Get involved. Help get America back into the hands of the earners and the producers.
From my generation you have learned that you cannot feed and house the whole world. You also learned that the nation’s banks do not deserve blind faith. 60 of them failed this past year and 750 more are in trouble with assets represented by over-extended credit.
Don’t be afraid of what lies out there ahead, and don’t ever feel guilty about what you earned yourself. Don’t let elected officials give it away to the plunderers for the sake of re-election and self enrichment.
When the day comes for you to retire, the Social Security program will be bankrupt and gone. I paid into it for nearly forty years but never withdrew a dime.
There is an automatic $275 burial fee you could withdraw for my funeral expenses. I have already designated funds to cover this so please turn it down and afford me the last dignity of paying my own way out.
In everlasting love,
Your dad,
Jesse Cornish
Jesse F. Cornish
State of Minnesota
County of Hennepin
Signed, sealed and delivered by Jesse F. Cornish this 17th day of November, 1980.
GOT TO BE IN IT TO WIN IT!
MIDAS
Appendix
Indonesia May Dump Dollar; Rest of Asia Too?: William Pesek Jr.
Tokyo, April 17 (Bloomberg) -- Pertamina, Indonesia's state oil company, dropped a bombshell recently. It's considering dropping the U.S. dollar for the euro in its oil and gas trades.
With war unfolding in Iraq and a mysterious pneumonia spreading around Asia, few noticed. News that Indonesian government officials favor the euro also fell through the cracks. Yet it could have major implications for the world's biggest economy.
Other Asian countries may not be far behind any move in Indonesia to dump the dollar. The reasons for this are economic and political, and they could trigger a realignment that undermines U.S. bond and stock markets over time.
Indonesia's rationale: The dollar may be the world's reserve currency but it has become too volatile. ``One thing is for sure, the adoption of the euro as an alternative means of payments could be an effective solution to speculative dollar-oriented dealings,'' Indonesia's Vice President Hamzah Haz said last month.
Conspiracy theorists can rest easy. None of this has anything to do with the fact Indonesia is home to the world's largest Muslim population. Rumors of Southeast Asian Muslims and Arabs banding together and dumping dollars to stick it to the U.S. ignore the very real economic justifications for it. This also isn't necessarily about Iraq-related tensions.
Last year's accounting scandals shook many Asians' trust in the U.S. economy. The view here is that little has been done to reform the system. News that a unit of Halliburton Co., formerly run by U.S. Vice President Dick Cheney, already won a post-Iraq war contract has Asians buzzing about American-style crony- capitalism -- much like the U.S. used to complain about Asian cronyism.
A U.S. Funk?
Folks here also worry the U.S. has fallen into a Japan-like funk. The Federal Reserve's moves to cut interest rates to 40-year lows haven't boosted U.S. growth the way Asian leaders and companies expected. One of the most commonly asked questions here is this: ``What if the U.S. can't right itself?''
War in Iraq has added to the dollar's woes. The U.S. currency has lost more than 18 percent against the euro over the last 12 months; it's down more than 8 percent versus the yen.
Perhaps the biggest risk for the dollar, at least in the eyes of some analysts in Asia, is uncertainty surrounding U.S. foreign policy. Now that war in Iraq seems to be wrapping up, Asian markets are wondering if the U.S. will pursue regime change elsewhere. In recent days, for example, the Bush administration has had to deny it's planning to attack either Syria or Iran.
Here in East Asia, most of the focus is on North Korea. While war is unlikely, ``a miscalculation, a misunderstanding or a hawkish assessment of North Korea's intentions by the U.S. could lead to an incident that could escalate,'' says Steve Vickers, chief executive of International Risk Ltd, a risk management consultancy.
A Question of Uncertainty
For Indonesians, questioning the dollar is less about political backlash for war in Iraq than genuine uncertainty. Geopolitical and economic concerns have Indonesian officials and companies wondering if the dollar will become even more volatile. What if, for example, the U.S. began setting the stage for another pre-emptive attack in the Middle East or East Asia?
Even so, there's no ignoring Asia's desire to reduce U.S. influence in the region. Leaders here wonder if scrapping the dollar might expedite the process. Last September, Asian and European leaders formed a task force to help Asia boost euro currency reserves, issue more euro-denominated debt and use the single currency to settle trade bills.
One reason leaders like Mahathir Mohamad of Malaysia favor the euro: It lacks a domestic agenda. Washington has proven quite adept at steering the dollar up and down depending on economic needs. In the early 1990s, a lower dollar was favored to boost growth. Later in the decade the White House favored a rising currency to attract foreign capital.
Euro Volatile, Too
Since 12 countries use Europe's single currency, it may be less susceptible to unpredictable political agendas. Also, the European Central Bank, not politicians, manages it. In a perfect world, the Japanese yen would be Asia's preferred currency. Tokyo's active manipulation of currency markets makes the yen about as appealing as the Russian ruble.
That's not to say Indonesia or other Asian economies are rushing to rid their vaults of dollars. Asian policy makers are cognizant of the euro's own track record for volatility. When, or if, the U.S. economy recovers, officials will have a better idea of how seriously to take the euro's gains.
Still, the long-term prospects for the dollar as the undisputed champion of trade and finance have dimmed along with the economy. It's not clear what Washington can do about all this, but it's a dynamic that could lead to tectonic shifts in markets everywhere.
Last Updated: April 16, 2003 15:31 EDT
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Copyright 2003, www.LeMetropoleCafe.com
-- Posted Monday, April 21 2003