Thai Guru's Gold und Silber ... (Informationen und Vermutungen)

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http://www.nytimes.com/2004/06…ness/yourmoney/06ubs.html

Mr. Baxter and the New York Fed, along with the Treasury Department and the Customs Service, immediately began an investigation into Baghdad's currency stockpile. The continuing inquiry offers a rudimentary road map of illicit dealings - including lucrative oil smuggling - in Iraq and neighboring countries during the Hussein years, the federal authorities say.

The investigation led quickly to the vaults of four Western banks that were among a select group handling the sensitive task of distributing freshly printed dollars overseas: the Bank of America, the HSBC Group, the Royal Bank of Scotland and UBS. Several other commercial banks and foreign central banks, which the Fed did not name, also served as stopovers along Baghdad's money trail, according to a written account Mr. Baxter provided to the Senate Banking Committee about two weeks ago.

None of the four main banks the Fed scrutinized had sent currency directly to Iraq. But as the inquiry wore on last year, investigators learned that UBS, Switzerland's largest bank, had transferred $4 billion to $5 billion to four other countries that were under sanctions: Libya, Iran, Cuba and the former Yugoslavia. Over an eight-year period, UBS employees had quietly shipped the money to those countries from a vault at the Zurich airport, undetected by Fed auditors who made regular visits to the site.

EARLY last month, the Federal Reserve Board fined UBS $100 million for the currency violations. 

It was the second-largest penalty ever levied by America's central bank, surpassed only by a $200 million fine imposed on the Bank of Credit and Commerce International, or B.C.C.I., in 1991 for violating American banking laws. The B.C.C.I. case was part of a global investigation of fraud and money laundering.

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Gold at $350/oz or $500/oz by Christmas?

By: Gareth Tredway & Stewart Bailey

Posted: '08-JUN-04 16:00' GMT © Mineweb 1997-2004

JOHANNESBURG (Mineweb.com) -- Gold prognostication is in full swing, with a gaggle of commentators weighing in with their year-end price predictions. The range is wide, with the bears, led by Barclays Capital analyst Kamal Naqvi, forecasting $350/oz. The bulls meanwhile – and there are no shortage of them despite a becalmed bullion market - are touting bullion at between $450/oz and $500/oz by Christmas.

weiter....

http://www.mineweb.net/sections/gold_silver/327888.htm

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http://www.mineweb.net/sections/gold_silver/327877.htm

Another gold junior soap opera

By: Stewart Bailey

Posted: '08-JUN-04 15:00' GMT © Mineweb 1997-2004

JOHANNESBURG (Mineweb.com) -- Afrikander Lease, the battling gold and uranium hopeful, today said it had settled a long-running dispute with Peter Skeat, the former chairman and chief executive, who was shopped by the company’s board last year for allegedly capitalising costs that should have been expensed.

Notwithstanding the allegations of malfeasance against him, Aflease said today it had paid Skeat a R3,1 million settlement. The settlement was more or less equal to the cumulative salaries paid last year to Aflease’s current chief executive (R1,3-m), its financial director (R1-m) and the chief operating officer (R0,85-m). But it is a fee that it hopes will end the bitter feud that has threatened to plunge a struggling Aflease into a lengthy and damaging court battle, against a highly motivated and well-funded adversary.

In all, the debacle has simmered for more than a year. Skeat had claimed undisclosed compensation from Aflease for unpaid salaries and for a series of rental charges for equipment he was said to have leased to the company. That he was going to vigorously pursue Aflease for some pecuniary satisfaction was never in doubt. It is little secret that he has wanted to put the boot into a cash-strapped Aflease as retribution for management’s public allegations of impropriety on his part. He has doggedly denied the charges.

Instead, an often-overwrought Skeat, has argued that the boardroom putsch was a mutiny orchestrated by Brett Kebble and executed by a vindictive management team, eager to wrest the company from his control. Divining a motive to back Skeat’s claims is difficult, though, given that he had in any event showed himself eager to exit Aflease. Skeat’s argument becomes all the more inexplicable when one notes that the conspirators, which include Froneman and Aflease finance director Marais Steyn, were his business partners in a deal which saw the New Kleinfontein mine bought and quickly flipped into Aflease for a tidy profit. All made out handsomely, supposedly to the tune of some R16-m each. It was a match made in heaven, at least until it went sour.

Whatever the truth, Skeat has found it hard to garner any sympathy from his peers, particularly in light of the fact that he has made out handsomely – some say to the tune of more than R150-m – from his entrepreneurial venture. He will never go hungry, but he has bemoaned the damage his unceremonious ejection from Aflease has done to his reputation.

Though he is one of the more garrulous personalities in Johannesburg’s business circles, Skeat never disclosed the size of his putative claim against Aflease. Those close to him say he was looking for between R20-m and R30-m. Skeat would not confirm the figures, citing confidentiality agreements attached to the Aflease settlement.

Whatever the quantum of the claim, it was a worry for Aflease, given that it has no producing assets, a prodigious cash burn and has flirted with insolvency more than once. Chief executive Neal Froneman would also have been keen to get Skeat off his back – his predecessor is angry and no doubt gloating over the company’s fall from grace. Avoiding the potential for the public airing of Aflease’s dirty laundry – past and present - would also have been a key factor in deciding to settle.

Kebble in the cross-hairs

But Skeat is not done yet. Later this week he will do battle in court with Brett Kebble’s JCI and Trinity Asset Management, two of Aflease’s largest shareholders. Last year Skeat sold 23-m shares to Kebble at R4 each. The purchase price of R22-m, was to be paid in two tranches – the first, of R40-m was paid on delivery of all the stock, while the second of R52-m, has not been paid. Trinity and JCI stood joint surety, leaving them jointly liable for the cost.

Kebble has contended that Skeat, through a number of public utterances, helped put pressure on the Aflease share price, so devaluing the stock before he had paid for it in full. It is on those grounds that he is refusing to pay the final instalment, though he says he has made provision in the event that he is forced to make good on his promise.

The first hearing is scheduled for this week, when Skeat’s attorneys are expected to force Kebble to prove that he still holds the stock and has not sold it on. Kebble had not returned calls for comment at the time of publishing. Any sale will require some explanation, however, given that he is the architect of a gambit by Randgold & Exploration, a company effectively controlled by his family, to build a stake in Aflease of at least 34% through a series of lifesaving equity purchases. That could be 41% if Kabusha mining’s share is taken into account, the two claim to be unrelated, but Kebble did stand surety when the empowerment company first bought its shares from Skeat. Kabusha is unlikey to go against Kebble.

Kebble’s involvement already looks like blind faith or charity, given that his first purchase from Skeat at R4 a share was followed by a private share-placement directly from Aflease at R3,68 a share. Aflease is now mired at around R2 a share or below, with scant prospect of recovery under the current set of macroeconomic conditions, leaving Kebble little chance in the short term of realising any return on his investment. Randgold has also agreed to underwrite a crucial rights issue to raise R100-m, so any sign that it is getting cold feet, could prove terminal for Aflease.

Barclay's, das ist die Firma die den freigewordenen Sitz beim "Gold Preis Fixing" bei der LBMA als Nachfolgerin von den Rothschilds abgekauft hat, lässt Verlauten (siehe Posting "Gold at $350/oz or $500/oz by Christmas?" ), dass der Goldpreis bereits ende Jahr auf 350.- Dollar zurückfallen werde.

A. Greenspan redet ein bisschen von "steigenden Zinsen", wirkungsvollen Instrumenten, und schon steigt urplötzlich der Dollar, und die Goldpreise fallen gleich wieder 3 Dollar runter. Als Zugabe gibt's einen Kick am Dow und Nasdaq, und alle sind Happy, und verstehen die Zusammenhänge. Wir Gold Bugs sind damit natürlich nicht gemeint.

Danach kommen solche passenden Reuters Meldungen, und heute Nacht, oder morgen dürfte sich dann, vermutlich wieder der Gold Basher Wolfgang mit seinen Weisheiten in der FTD zu Wort welden.

Irgendwie passt doch alles!

Fehlt eigentlich noch eine Meldung über einen eventuell geplanten Gold Verkauf irgendeiner Zentralbank. Wie wärs mit Lybien?, oder Panama? Die haben doch vermutlich sicher auch noch einige Tonnen davon in England, oder in Westpoint USA gelagert?

Wenn dann auch noch zum Goldgeschehen gutinformierte User (leider mehrheitlich nur auf Deutsch), wie Hpopth glauben, dass wir keine Chancen haben gegen die bestehende Preismanipulation, und sich eventuell sogar mit den Gadanken herumspielen zu verkaufen, trotz aller positiven Fundamentaldaten beim Gold, und auch Silber, kann es eigentlich wirklich nicht mehr lange dauern bis die Gold Bugs ihr Erfolgserlebnis feiern können.

Nein hpopth, ich denke nicht, dass wir ende dieses Jahres die 500.- Dollar sehen werden, ich bin überzeugt davon, dass der Gold Preis bis ende Dezember 04, noch einiges mehr als nur bis auf 500.- Dollar steigen wird.

Gruss

ThaiGuru

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http://www.reuters.com/locales…Key=en_IN&storyID=5369322

Gold's push above $400/oz unlikely, says analyst

Tue June 8, 2004 2:24 PM GMT+05:30

SYDNEY (Reuters) - The rally in gold prices that pushed bullion above $400 a ounce this year may be over as commodities investors switch to oil and U.S. interest rates are poised to rise, Commonwealth Bank of Australia said on Tuesday.

Gold has been on a mostly downward track since peaking at around $430 April 1, last clearing $400 on April 20.

At 0817 GMT, gold was selling for $395.00 an ounce.

"We suspect gold's run has passed," Commonwealth commodities strategist David Thurtell said in a report.

Global security concerns and the threat of rising inflation on the back of crude prices that surged above $40 an barrel briefly had helped turn more investors to gold, a traditional safe harbour investment.

But gold was likely to average only $395 an ounce in the second quarter, compared with $409 in January-March, while oil recoils to the mid- to low-$30 per barrel range, according to Thurtell.

"Over the past month, the funds have been much more focused on playing around in the oil market than in gold," Thurtell said.

Also, looming higher interest rates could spell a stronger U.S. dollar, a sign to to sell bullion, bought and sold worldwide in U.S. dollars.

"The U.S. economy continues to power ahead ... suggesting that a Fed rate rise in June is now as close to a certainty as it ever gets," Thurtell said.

A big jump in U.S. jobs in May seemed to confirm expectations the Federal Reserve's open market committee would raise interest rates when it meets on June 29-30.

Ab dem 18. Juni 2004 wird es Zeit für mich, mich vom Gold Cabal Geschehen zu verabschieden und mal wieder so richtig zu erholen.

Für mindestens 2 Monate möchte ich Pause machen.

Den vielen Gold Bugs hier möchte ich jetzt schon verraten, was ich mir unter richtiger Erholung vorstelle.

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Bis es soweit ist, nun jetzt fehlen gerade noch 9 Tage, die werde ich auch nützlich verbringen. Sehe gerade dass die neuen GATA Meldungen eingetroffen sind, werde sie erst selbst lesen, und danach hier posten.

Der Titel: Greenspan Speaks - Stocks/Bonds Rise - Gold/Silver Fall

Muss wohl Gedankenübertragung gewesen sein?

Gruss

ThaiGuru

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http://www.lemetropolecafe.com

June 8 - Gold $390.70 down $2.80 - Silver $5.75 down 13 cents

Greenspan Speaks - Stocks/Bonds Rise - Gold/Silver Fall

Zitat

"Never underestimate the power of stupid people in large groups."
- George Carlin

Gold showed some early independence from slightly stronger dollar action and acted like it wanted to take out $395 when Fed Chairman Greenspan spoke out in London with the most banal and expected commentary:

9:15am GREENSPAN SEES RETURN OF BUSINESS PRICING POWER
9:15am GREENSPAN - RATE HIKES MAY NOT BE MEASURED IF NECESSARY
9:15am GREENSPAN- FOMC TO DO WHAT REQUIRED TO FIGHT INFLATION

WASHINGTON (Dow Jones)--Federal Reserve Chairman Alan Greenspan warned Tuesday that persistently high oil prices could trigger a bout of general inflation and said the U.S. central bank will raise interest rates aggressively if its forecasts of mild inflation prove to be wrong.

9:15am GREENSPAN SAYS HIGHER OIL PRICES DRAIN ON ECONOMY
9:15am GREENSPAN SAYS MARKETS WELL PREPARED FOR RATE HIKES
9:16am GREENSPAN SAYS COSTS PRESSURES HAVE BEEN SUBDUED

-END-

Big deal, what else is the guy going to say? Did market players expect him to declare the Fed would raise rates both gradually and moderately even if they "officially" recognized inflation was going berserk?

If anything, his remarks would have been construed as being very gold friendly in a free trading market. What he spoke of are gold friendly market factors. However, The Gold Cartel was laying in wait, and as we know, the more bullish the gold news is, the more the cabal forces sit on it, which is just what they did once again.

How boring this is! Once the cabal went after gold, it induced additional spec selling and that was it for the day. PRICE ACTION MAKES MARKET COMMENTARY. Thus, the gold comments from the pundits will center on how fear of higher interest rates took the gold price down. Huh? We are talking about US interest rates at depression-like levels. Who cares if they go up a few points when you compare it to what else is going on out there in financial land and in the geopolitical sphere? Compare potentially higher interest rates months from now with those in 1979.

The dollar ended the day up only .27 at 88.56. The euro fell .48 to 122.63, not far from where it opened the day. The dollar pretty much yawned at Greenspan’s comments.

The AM Gold Fix was $394.95. As is so often the case, gold made its high for the day on the Comex during the first half hour and then was taken lower.

The gold open interest fell to 225,586, while the silver open interest dropped 1381 contracts to 83,806, a new low for the move down.

Silver was firm early and then tanked. Funds were the sellers with Morgan Stanley a steady buyer.

If it weren’t for GATA, I would want nothing to do with the gold and silver markets. What I mean by that, if it weren’t for what I know as a result of the work of the GATA ARMY, I could see no reason to invest in these markets. For years, they have acted in contrary fashion to the surfaced reasons which historically have always moved gold prices higher. This has all been orchestrated by The Gold Cartel and will be this way until these low lifes are carried out. Gold will never explode until they lose control of this scam. Been saying that for many years now and, unfortunately, that is the way it has played out.

That is the bad news.

The good news is they are on their way out.

Could happen soon, might take months or even a year, but it is coming. There just won’t be enough available central bank gold for them to carry on and keep the gold price this suppressed. There are many out there who sincerely believe the most important determinant of the gold price is what the dollar does. Sure, that is a very significant factor, however, it is a secondary one in my book. To me the key to the gold game is the physical market versus the corrupt Gold Cartel. At some point when the cabal’s supply of gold has waned to the point they can’t satisfy the physical market, gold will soar. Not until then.

The dollar could be weak, or strong. When we get there, gold goes nuts and probably will be tagging along after silver, which is their real Achilles Heal.

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http://www.lemetropolecafe.com

The John Brimelow Report

an insight

Tuesday, June 08, 2004

Indian ex-duty premiums:

MONDAY: AM $6.78, PM $ 4.76, with world gold at $392 30 and $393.35. Adequate, and marginal, for legal imports. The rupee closed at an import -facilitating one-month high.

TUESDAY: AM $ 4.73, PM $5.30, with world gold at $394.55 and $394.60. Marginal, and adequate, for legal imports. Again, the rupee closed at a one-month high, having wavered during the day.

The Istanbul Gold Exchange got round to publishing the May import statistics on Monday. These showed gold imports of 17.35 metric tonnes, down 33% from the previous month but up 16% from 2003. Imports year-to-date are 30% up, quite impressive bearing in mind last year was an outstanding record year for imports.

Since World ($US) Gold averaged 5.4% lower in May, Turkey’s imports might be regarded as weak. The answer probably lies in the poor performance of the Turkish currency during the month. The IGE reports the average Turkish Lira gold price was 5% higher in May as a consequence. Obviously this would depress the domestic gold trade. Quite possibly, too, the softness of the Turkish lira unbalanced the financing arrangements of the entrepot trade to other Middle Eastern destinations, which, from a purely theoretical standpoint, might be thought insulated.

Silver, however, performed spectacularly. Imports at 31.5 tonnes were far and away the highest in the five years the IGE has published records. This number is probably extremely significant in judging the temper of the "grass roots" Middle East.

Evidence continues to gather that the Middle East is a voracious buyer of gold at present: for instance, courtesy thebulliondesk:

http://www.omanobserver.com/bnews2.htm

TOCOM, on the face of it, is quite uninterested in gold. On Monday only 14,478 NY equivalent traded, with the active contract up 3 yen, but with open interest down 113 Comex equivalent. On Tuesday, open interest was marked down another 411 Comex, with volume falling 32% to only 9,875 Comex. The active contract was up 5 yen.

However, Reuters reports a $1 premium for kilo bar in Japan, the highest in many months, and reports:

Zitat

"dealers reported brisk sales in Japan due to the yen's strength against the dollar, making gold cheaper for local buyers in one of the world's top consumers." Generally speaking, we have seen very good buying over the retail counters of major bullion houses such as Mitsubishi Materials and Tanaka," said Itsuo Toshima, the Japan and South Korea regional director for the World Gold Council."

It may be that buyers of physical in Japan comprise a different community to TOCOM: less sensitive to $/Y and $US gold considerations; and more bargain hunters.

Confusion abounds regarding the latest CFTC data. I believe the best presentation is the third attachment. Essentially, Spec involvement is at a significant, recent low, with a mildly pronounced bias to the short side.

The important issue is what to make of gold’s $20 rally out of the low? Generally this is acknowledged as huge short covering, and the CFTC data tends to support this. This logically raises the question, who wanted to go short in such size on the lows? And who bought? Some say Mines covering shorts, but, given the permeability of Chinese walls in Commodity brokerages, would favored clients have been allowed to go short ahead of massive discernable buying?

JB

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http://www.lemetropolecafe.com

CARTEL CAPITULATION WATCH

Just as gold is never allowed to trade up like it should at times, the DOW is never allowed to tank. After a weak opening, it rallied very late in the day again to close at 10,432, up 41. The DOG gained 3 to 2023.

Wonder what the combined probability is of the DOW rallying so often late in the day combined with gold making its high for the day in the first hour or less? If someone were to compare what has transpired in recent times versus how they both traded many years ago, the difference would surely blow that someone away.

If Greenspan’s remarks on the potential of interest rates rising rapidly was bearish for gold (when his implications are really bullish), then why did the DOW respond so positively and rally on the news? It is the fear of sharply rising interest rates which should have stock market players spooked. Yet, even the bond market paid little attention to Greenspan. After a brief dip, even the 30-year bond closed HIGHER! By day’s end, only gold and silver were really affected by Greenspan’s remarks. The two markets which should have gone up, went down. The ones that should have gone down, went up.

Here we go:

SAN FRANCISCO (CBS.MW) -- Gold futures and shares of major metals companies traded lower Tuesday amid indications that the Federal Reserve may take a more aggressive stance on interest rates…

END

And here we go again, late entry from Sarge:

The single big buyer of DIAs today left these footprints on the tape:

09:40 200,000
10:40 100,000
11:40 150,000
12:04 150,000
12:24 100,000
13:54 100,000
14:28 100,000
15:18 200,000
15:28 200,000
15:38 200,000

Total DIAs bought by this single entity today = EXACTLY 1,500,000 units

At an average cost of lets say $104 that’s $156,000,000 they spent today to push the DOW up.

This also happened yesterday. ALL of the other trading periods were comparatively SMALL lots.

Today’s rally was engineered by one Wall Street firm. G-8 window dressing?? Even another American being murdered in Saudi Arabia had NO effect on this little engineered bull run.

Meanwhile yesterday was a head fake in the gold market. The big players stood aside and let the market drift. No prints of any magnitude were to be seen. Today however we have returned to the repeating pattern we saw last week. That is the market trades within a tight 1 or 2 dollar range as long as NY/Comex isn’t open. Once the Comex open and NY trade begins, we go down at a 45 degree angle until the close. Usually a 4 or 5 dollar move. It is flatline overseas, dive to hell in NY. Flatline overseas, dive to hell again in NY.

-END-

The Matrix lives!

GATA’s Mike Bolser:

Hi Bill:

The Fed added $6 Billion in temporary repos today June 8th 2004, an action that caused the repo pool to fall some to $42.85 Billion, but kept up the gently rising DOW support mechanism.

At my website you can see the Repos chart:

http://www.pbase.com/gmbolser/interventional_analysis

And the red repo 30-day moving average line. This line is the main battle metric for supporting the DOW. The Fed uses it like a fuel gauge. Up for,more support, down for less.

I have found over the years that the Fed has a practice of hiding their interventional tracks with at least three levels of opacity so if you want useful data one must expect to do a great deal of work to find it. In this regard notice the permanent open market operations shown in orange balls at the bottom of the chart.

Clusters of permanent open market DOW support

Recall that permanent open market operations never leave the market once they are created and as such carry far more interventional weight than temporary ops which must be returned within 28 days (at most).

Examine the red line down to up reversals and their correlation to clusters of orange balls. Each reversal has its own cluster of permanent open market operation so this is a major clue to the Fed's future DOW support intentions. When support is removed the temporary omos are reduced and the DOW falls back.

Knowing this fact we are forewarned as to approaching up trends in the Fed support mechanisms and to the absence of such support.
Mike

Follow up in The King Report:

We forgot to mention in yesterday’s missive some points re: Friday’s Employment Report. ‘Goods Producing Hourly Wages’ SA fell .01 to $17.20. But NSA the figure fell .04 to $17.08!!! ‘Manufacturing Hourly Wages’ fell .01 to $16.07 SA; but NSA they fell .04 to $16.02. ‘Information Service Hourly Wages’ SA increased .07 to $21.40; but NSA they fell .10 to $20.87. This is ludicrous!!! The BLS has Info Service Hourly wages increasing .07 but in reality they fell a dime. Plus there is a .57 discrepancy between the BLS’s seasonal adjustment fantasy and reality.

This clearly illustrates the mendacity of seasonal adjustments (SA). The BLS has a fictitious income figure; one that is at odds with the workers’ checkbooks. And that’s why consumer sentiment is at odds with all this wonderful economic data that some call a ‘boom’. PS – From 1982 to 1988, the US economy generated 20m jobs while inflation collapsed. That was a boom.

-END-

A few thoughts from Jesse on today’s developments:

They want it all now, don't they?

Or perhaps more correctly, they need it all, and at the same time. A strong dollar, or at least a 'not-weakening' dollar to maintain the current balance of imbalance in the trades balances, not-weakening bonds to keep interest rates under control, and strong equities as a reliable sink for a wildly expanding money supply and the illusion of recovery.

Despite all the help one could expect from our client states, I am not sure even the American Republic can pull this one off. Greenspan is reminding me of one of those vaudevillian fellows who keeps an unbelievable number of plates spinning simultaneously on top of poles, excepting in this case I am not sure what the 'big finish' might be like.

-END-

Two gold news story items worth commenting on:

*In the Swiss gold story below, note how the headline differs from the story. One would think by scanning the headline (I know because I received a phone call) the Swiss were planning to dump gold not already slated for sale:

SWITZERLAND - Parliament debates what to do with excess gold

SWISSINFO - Parliamentarians are making a new attempt to decide how to spend the proceeds from the sale of the Swiss National Bank’s excess gold reserves. Previous plans, including a proposal to spend the proceeds on humanitarian projects, were rejected by Swiss voters...

–END-

*This Aussie bank gold story reads as Commonwealth has someone in 7th grade writing their gold outlook - based on the bank’s trivial comments in the article:

Tuesday June 8, 4:51 PM

Gold Likely Nearing Last Gasp Of Current Bull Run - CBA
Sydney, June 8 (Dow Jones) - While gold could temporarily move higher again within the next three months, the yellow metal's bull run is likely over, the Commonwealth Bank of Australia (CBA.AU) said in a report issued late Tuesday.

Amid concerns about terrorism and high oil prices, as well as a favorable near-term technical outlook, gold could yet move back to US$410 a troy ounce, the bank said in its short-term "tactical" analysis.

But even if bullion does climb back above the psychologically significant US$400/oz mark, "how long it will stay there is another matter," the CBA said.

"Rate rises are on the way in a number of major economies, principally the United States," it said, adding that China has already moved to tighten monetary liquidity.

"Higher interest rates will raise contangos and improve the attractiveness of forward selling for the smaller high-cost mining operations," the CBA said. Rising interest rates will also diminish the relative attractiveness of investing in gold, it said.

Furthermore, the bank believes the U.S. dollar, which typically moves in the opposite direction to the gold price, "appears likely to strengthen," given the potential for the U.S. economy to outperform its peers.

While the CBA said supply side factors would remain "moderately supportive" for gold through 2004, it expects mine supply to rise in 2005.

"We suspect that gold's run has passed," the bank said. "US$430/oz could easily be revisited, but we suspect that new cycle highs are unlikely...and US$350/oz seems possible by (the second half of next year)," it added.

-END-

Well, it’s the likes of the Commonwealth Banks of the mainstream gold world versus the Mahendras and the MIDAS’ of the unconventional thinking world. The gauntlet has been laid out. Only time who prove which camp is correct. Meanwhile, Mahendra thought today would be negative for gold, bullish as he is, and doggone it was. Spoke with him today. He is ravingly bullish on the gold shares from here on in. His note this afternoon:

Dear Bill,

Please read it release and please put on MIDAS so now officially every will know that I am in USA. Now we are entering in major upward trend in metal and metals stocks from tomorrow. FINALLY A GREAT RISE IS STARTING IN METALS FROM TOMORROW FOR LONG RUN SO DON"T SELL EVEN IF YOU GAIN 5% in GOLD and 40% in stocks.

YEN IS READY TO GO BELWO 100 MARK.

Thanks & God Bless

Mahendra

Congrats Mahendra:

June 7, 2004, Santa Barbara, California – MRK Financial, Inc. (MRK) is pleased to announce the addition of Mahendra Sharma to its asset management team. A spokesman of MRK stated "As a native of India and most recently from Nairobi, Kenya, Mr. Sharma has perfected a unique methodology to invest in stocks and commodities. During a six month period ending March 31, 2004, in cooperation with Mr. Sharma and using his advice, MRK experienced an annual return in excess of 100% in one of its segregated funds. This outstanding result has prompted us to invite Mr. Sharma to come to the United States in order to provide his professional services to MRK. Subject to a continuation of similar performance, MRK is giving consideration to the creation of a specialized hedge fund in which Mr. Sharma would manage. Should this direction be pursued, an announcement pertaining to the creation of the fund would probably be made in late summer of 2004."

When in the United States, Mr. Sharma will have access to state-of-the-art communications, technology and information. It is felt that this will allow him to work and communicate more effectively to better demonstrate how he can improve upon his track record. As an established expert in the use of his methodology in investment management, Mr. Sharma has advised government officials, international bankers, investment managers, industry leaders and private individuals throughout the world. In addition, Mr. Sharma has previously studied commerce at the University of Maharastra in Mumbai India.

MRK has also pledged that a meaningful portion of the profits realized through the use of Mr. Sharma’s methodology will be contributed to an HIV/AIDS foundation for children in Africa. This commitment was one of the driving forces for Mr. Sharma in joining MRK.

Mr. Sharma officially joined MRK on May 5, 2004.

MRK Financial Inc.
19 E. Mission St., Suite A
Santa Barbara, CA 93101
(805) 569-6200

More oil concerns:

Asia May Boost Emergency Oil Reserves Amid Supply Concerns

June 8 (Bloomberg) -- Asia, which consumes almost a third of the world's oil, may boost imports for emergency reserves after prices surged to a record on concern terrorist attacks may disrupt supply from the Middle East….

An Asian emergency oil reserve, with a capacity of half a billion barrels, would require about $15 billion in investment alone to fill it with crude oil priced at $30 a barrel, said Damien Criddle, a lawyer at Baker & McKenzie in Hong Kong, who specializes in oil and gas.

Zitat

"It's a major capital undertaking,'' he said. Japan, China and South Korea may help fund the reserve because ``it's in their interest to see their neighbors stable.''

Officials from Japan, South Korea and China, and the 10-member Association of Southeast Asian Nations will hold talks this week on increasing stockpiles when they meet in Manila to discuss energy security.

The Middle East accounts for more than 80 percent of Asia's crude oil imports, according to a Bloomberg survey of 10 traders in the region.

-END-

Here is a scary one:

Martin Armstrong was originally sentenced to 18 months for contempt of court... that was over 4 years ago!

As chief economic analyst at PEI he oversaw the development of PEI's economic models and computer systems and directs research into artificial intelligence. He is also the author of "The Greatest Bull Market in History", a definitive 3-volume study of the world economy and financial markets since 1900. He was voted "Americas Top Economist" in 1990 by Equity Magazine. Mr. Armstrong has been called on by the Joint Economic Council of Congress to testify on economic issues, as well as the Brady Commission, where he was invited to share his views on the 1987 market crash (which he predicted using his computer models far in advance of the crash).

Martin Armstrong has often been quoted by news organizations such as: NY Times, Wall Street Journal and Bloomberg. He has also appeared on CNBC and other financial broadcasts sharing his views. Mr. Armstrong has devoted his time to analyzing financial markets, studying the history of business cycles, market crashes and world monetary systems

http://www.armstrongdefensefund.org/contempt.htm

-END-

Another one bites the GATA dust:

Release: 4935-04
For Release: June 7, 2004

CFTC Announces Resignation of Michael Gorham

Washington, D.C. -- The Commodity Futures Trading Commission (CFTC) today announced the resignation of Dr. Michael Gorham, effective June 30, 2004. Dr. Gorham is leaving the Commission to become the Director of the Center for Financial Markets at the Illinois Institute of Technology in Chicago, Illinois.

Dr. Gorham was recruited by CFTC Chairman James E. Newsome to become the first director of the Commission's Division of Market Oversight (DMO). The Division was created as part of a 2002 restructuring of the Commission to facilitate implementation of the Commodity Futures Modernization Act of 2000 (CFMA). The Division handles the designation of new markets, the review of new futures and option products, the monitoring for and detection of market manipulation, and the protection of customers from market abuses.

-END-

Sheesh, we take this guy on. Finally get response from someone in government. Then, we find out Gorham flees the coupe.

Golden Star wins a court battle

TORONTO, June 8 /PRNewswire-FirstCall/ - IAMGold Corporation announces that the Ontario Superior Court of Justice today granted the application of Golden Star Resources Ltd. and ordered that the annual and special meeting of the shareholders of IAMGold be delayed until June 29, 2004. The Court also held that the confidentiality agreement between GSR and IAMGold does not prevent GSR from proceeding with a formal take-over bid without the approval of the IAMGold Board of Directors. –END-

While the general stock market rose following Greenspan’s commentary, the gold shares found them troubling and fell. The HUI dropped 4.22 to 192.69 and the XAU sank 1.40 to 87.42. The smaller juniors and explorations can barely catch a bid anywhere.

As aggravating all the way around today was, it does nothing to change the big picture. The physical market is firm and the gold fundamentals remain "10+++."

Patience is often required to make the big bucks. This is certainly the case these days in gold and silver. What is important to keep in the front of our minds is we know how The Gold Cartel has backed itself into a corner. They WILL lose. When they do, the gold and silver shares are going to go bonkers. There will be a number in our camp who will make more money in a month than most investors make in a lifetime. In a few years, when we annualize out how we have done, it will dwarf how most others have made on an annualized basis in the general stock market.

Keep the faith. Stay the course.

GATA BE IN IT TO WIN IT!

Ein Derivativ Broker in einem anderen Thread behauptete doch kürzlich, die Gold Preise würden von Angebot und Nachfrage bestimmt!

[Blockierte Grafik: http://www.mineweb.net/pics/logo.gif]

http://www.mineweb.net/sections/gold_silver/328147.htm

Two in five South African gold mines unprofitable

By: Stewart Bailey & Gareth Tredway

Posted: '09-JUN-04 16:48' GMT © Mineweb 1997-2004

JOHANNESBURG (Mineweb.com) -- Two of every five South African gold mines owned by the country’s major producers are operating at a loss at the current rand gold price, while almost another third are making margins of less than 10 percent.

Mining executives have been vocal critics of the strong rand and the devastating effect it has had on their operations. A look at the latest set of numbers shows that their threats of shaft closures and pending job losses could soon materialise, as they redouble their efforts to bring 2.2 million ounces of annualised production back to profitability. Jobs are likely to come in for the chop, given that the price of gold is unlikely to come to the rescue; analysts reckon a weak rand and a high dollar gold price, which would give the industry some respite, is unlikely to occur any time soon.

Using a gold price of R82,000/kg, a level close to that at which local producers are selling their gold at the current dollar gold price and exchange rates, eight of the 19 South African mines owned collectively by AngloGold, Gold Fields, Harmony, Durban Roodepoort Deep are mining gold at a loss. In all, those unprofitable mines produce 2.2 million ounces of gold each year of a total of 9.3 million ounces.

Shocking as that analysis is, it may be on the generous side, given that Mineweb has used the end of the March quarter as its cost base. Once wage increases of about seven percent are implemented next month, raising total costs by more than 3.5 percent, even more production will find itself underwater – figuratively at least.

Among the worst affected is DRD. Its 40 percent-owned Crown Gold Recoveries (57,340 oz during the March quarter) and the Blyvooruitzicht operation (56,858 oz) are both in loss territory, while its North West unit (87,711 oz) has a perilous margin of only 5 percent. The company, which resents being called marginal, has had its bacon saved by a smart acquisition of a 20 percent share in the Porgera mine in Papua New Guinea, which enjoys a margin of almost 50 percent.

Among the big three, Harmony’s situation is dire. The group’s earlier strategy of buying cheap, loss-making assets and turning them around, has fallen foul of a strengthening currency, rampant producer inflation and a rand-denominated gold price that cannot seem to rise above R85,000/kg. Its acquisition of the Free Gold assets from AngloGold in 2001 has saved the group from total ignominy. The division is the group’s most prolific operating division and also its most profitable; it produced 233,435 ounces of gold during the March quarter at R72,240/kg for a margin of 12 percent at the current gold price. Orkney, at 65,622 ounces during the March quarter is also in the black if only just. But the rest of the operations are in varying states of despair, with Evander which has costs of R89,919/kg, the worst off.

Harmony has already flagged job losses and the possible closure of six shafts, but that could be optimistic if the current price environment persists.

Gold Fields is profitable at an operating level, if only just. Its flagship Driefontein mine is the most profitable with an 18 percent margin, while its Beatrix operation which produces more than 600,000 ounces of gold a year is sailing close to the wind, at a margin of less than 5 percent. Even Kloof, regarded as one of the country’s largest and finest ore bodies, has a margin of less than 10 percent.

What the margin analysis does reveal, though, is that AngloGold is in good shape. Not only does it have the largest proportion of its gold mined from jurisdictions with dollar-based costs, but it has by far the most profitable mines locally. Its Tau Tona mine, which produces 585,338 ounces of gold using the March output as a benchmark, is the best performer, with a margin of 41 percent. The Great Noligwa mine, the company’s largest at an annualised production of 755,880 ounces, has a margin of 38 percent. Predictably, the Savuka mine, which is in the process of closing down, lost more than R14,000 for each of the 1,100 kg or gold it mined in the March quarter.

[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]

http://www.lemetropolecafe.com

June 9 - Gold $384.30 down $6.40 - Silver $5.62 down 13 cents

Russian Central Bank Agrees With GATA

Champions aren't made in gyms. Champions are made from something they have deep inside them: A desire, a dream, a vision. They have to have last-minute stamina, they have to be a little faster, they have to have the skill and the will. But the will must be stronger than the skill...Muhammad Ali

GO GATA!!!

The AM Gold Fix was $389.30, modestly lower from the Tuesday NY close, but still reflecting strong physical market demand around the world. Then, The Gold Cartel goon squad went to work on the Comex as the euro was stomped. Even the gold floor has noticed how gold fails to keep pace with the euro when it rallies, yet gold tanks when the euro is battered. This is one of the ways The Gold Cartel manages the gold price. The cabal uses the euro action by capping gold when it moves to the upside, knowing speculators will follow their lead on the downside when they are ready to bash bullion.

One need only compare the past week’s gold activity versus that of the euro to get an idea how the cabal operates and sets up a gold trashing like we got today:

June euro
http://futures.tradingcharts.com/chart/EC/64

August gold
http://futures.tradingcharts.com/chart/GD/84

It is not that difficult for The Gold Cartel to influence big traders to join them when they set up a market, like they have gold, over and over again.

Here is a bombshell for you on this crummy day. Andy Smith, in his weekly commentary, refers to his attending the LBMA meeting in Moscow. Andy, a nice fellow in person and whom I met at the FT Gold Conference in Paris years ago, is well known in the mainstream gold world. He also is a GATA antagonist and rarely passes up an opportunity to knock us. Thus, it is with great surprise and pleasure to read his reference to the Deputy chairman of the Russian Central Bank agreeing with what GATA has been saying for years: MAJOR BANKS are suppressing the gold price.

Andy’s writing can be difficult to follow at times, however, here is what he wrote (note point 4):

Postcard from Moscow: LBMA bullion market forum, the Baltschug Kempinski, 3-4 June

…"In times of war or economic crisis garlic is often accepted as legal tender."

Deputy chairman of the Russian central bank Oleg Mozhayskov stuck his neck out. In more ways than one.

• A central bank is like a giraffe, he [via translation] theorised: it takes some time to feel change from below but is of such a scale it commands respect.

• Gold for central banks can either be a "stability guarantee or a yoke" and the latter view appears to have won. Whether gold is a money or a commodity is a "pure scholastic exercise" [a nuance Tatiana the tax official also left "for theoreticians to ponder". In her world you are either ‘ferrous’ or ‘non-ferrous’].

• Well, not so much ‘theoreticians’ as theologians. Today’s international monetary system is damned by a "number of sins" precisely because it has had the bullion taken out of it. Most prominently if not deadly is the fiscal gluttony of the US – a $3 trillion debt bigger than all the forex reserves in the world. This leaves gold with "very special monetary attractions in the minds of all prudent investors" [or giraffes? From Moscow’s perch, Asian central banks post the 1998 crisis were also more interested in real assets].

• Indeed, this ‘special’ attraction can border onto fetish, stretching "beyond sober analytics" to conspiracy theorists [the only english part of Mr Mozhayskov’s text was an explanation of the acronym of one such semi-sober society] who believe the major banks have suppressed the price for years. [Invited newswires were either asleep or doing a giraffe slow-reaction impersonation at this point.]…

-END-

If any of the Café’s Russian members, or those who can poke around some website which might carry Oleg Mozhayskov’s speech, can find the presentation, GATA would love to get its hands on the exact text.

Meanwhile, GATA gives Andy Smith a salute for having the guts to mention the subject. Isn't it ironic it takes a Russian central banker to tell a bunch of western bullion bankers that their gold market is rigged!?!?

Over the years I have been asked about The Gold Cartel’s motives for suppressing the gold price. One of them has been to deflect attention away from the true inflation numbers in the US. If I said that once, I said it 50 times.

If gold were allowed to trade freely, it would be $100 higher than it is now. Instead, the Gold Cartel has engineered a gold trashing and is achieving their desired result from many in the Wall Street investment community. AIG’s highly respected Bernard Connelly:

Wednesday, June 9 2004

"June 8, 2004 by Bernard Connolly

Dollar Dilemmas and Greenspan Mythspinning"

"Nor do we think that the weakness of the dollar in the face of rising rate expectations is an indication that the market thinks the Fed is behind the curve and that US inflation is going to get out of hand: for instance, we would have expected a much stronger recovery in the gold price from its Spring dip had that been the case"

-END-

Voila!

Some of the day’s highlights (more appropriately called lowlights):

*Gold came under intense selling pressure all day long.
*The gold open interest only rose 335 contracts to 225,921.
*The euro closed at 120.43, down 2.19, while the dollar rose 1.19 to 89.75.
*Bonds were under pressure, but came back well off their lows. The Sep 30-year closed at 103 18/32, down 14/32.
* *The CRB continues to fall, finishing at 270.25, down 1.10.
*Oil reversed course, starting lower and finishing higher at $37.45 per barrel, basis the July contract.
*The Café Sentiment Indicator continues to deteriorate. Based on the email I am receiving, it appears this latest setback has long term Cafe gold/silver investors very cranky. Ennui is turning into severe grouchiness.

Silver was surprisingly strong for the first half of the trading session and then caved badly when gold’s "mo" picked up on the downside. The silver open interest was little changed.

I have no idea how the price managers are trashing silver with the fundamentals so strong, yet they are able to do so with ease it seems. Eventually, this will change and dramatically so. Will I look like Methuselah by then?

The John Brimelow Report

Funds shorting again? Useful Bianco

Wednesday, June 09, 2004

Indian ex-duty premiums: AM $5.56, PM $6.25, with world gold at $389.55 and $388.60. Adequate, and ample for legal imports. Notwithstanding the general strength of the dollar today, the Indian rupee closed at a new 1 month high, as confidence seems to be returning. The world’s largest gold importer is clearly active at these levels.

Volume exploded on TOCOM today, virtually quintupling: the equivalent of 47,977 Comex lots traded, up 385% from yesterday and surpassing yesterday’s 36,000 estimated Comex volume by a wide margin. This has not been seen in many months. The active contract closed down 28 yen, with world gold $1.40 below the NY close at the time: but open interest rose the equivalent of 1,081 Comex lots. Apparently the public in Japan were buyers. Mitsubishi remarks:

Zitat

"Loco Ldn gold once moved up to the high by continuing buying but aggressive selling from HK dealers emerged in the market. Fund selling on Tocom capped the market against Public bargain hunting buying….Apr Gold was under pressure by fund selling…Public buying supported the market…"

As on previous occasions, these sudden, isolated, but huge peaks in TOCOM volume strongly suggest an exogenous force abruptly making itself felt in Tokyo, rather than the market being determined by the usual operators. One suspects the HK selling, like the Australian selling which blocked the effort on $400 last week, did not originate locally – but probably in the West, perhaps predator funds. The Shanghai Gold Exchange, for what it is worth, did not experience a particularly busy day this morning. Price recovered modest premiums over world gold. (NY traded 33,667 lots yesterday. Open interest rose 335 lots.)

Most Bullion Bank commentators confine themselves to glumly noting that the US triumphalism which followed – or perhaps accompanied – Greenspan’s remarks yesterday did not overlook precious metals. A couple – CBA and NM Rothschild – have put out essays asserting that gold’s inability to overcome the defense of the 200-day moving average last week constituted a decisive reversal. These arguments are narrowly technical, and pay no serious attention to macro economic conditions. But it is nevertheless refreshing to consider Bianco Associates’ acidic remarks yesterday, anticipating Greenspan’s braggadocio:

Zitat

"Comment - While we cannot prove it, our sense is that the payroll report is giving way to the inflation reports (especially CPI) as the most important economic release of the month. The non-farm payroll report was important as the "tipping point" to get the Fed to raise rates. Now that the Fed is on course to raise rates (starting June 30), the next question is how fast are they going to raise rates. The inflation reports will answer this question. The higher the inflation rate, the more pressure on the Fed to get aggressive."

Zitat

"The Fed is desperately trying to convince the markets that their inflation fears are overblown and the Fed can raise rates slowly. However, the upcoming PPI and CPI reports may not help. The consensus is expecting a hefty 0.6 for PPI and 0.4 for CPI. Look for Greenspan to downplay inflation later today."

As the New York Times article said:

Fed officials are keenly aware that they have much to lose if their prediction is wrong. But while they have all but announced their intention to start raising interest rates at their meeting on June 30, they are still hoping to move more slowly in the following months than they have in past cycles of tightening monetary policy.

Bottom line - If it were solely up to the Fed, they would not be raising rates at all this year. Three solid months of non-farm payroll growth has forced them into appeasing the markets with a rate hike on June 30. We believe they would like to stop at this point. However, they cannot because of the strong inflation numbers. So, the Fed will attempt to convince the market that the signs of inflation "do not count" and hope the market will agree so they can stop."

Zitat

"A close look at the Fed's record since September 11, 2001 will reveal little, if any, of what they believe/forecasted has been correct. The economy never needed an "emergency funds rate", deflation was never an issue, and there was no structural impediment to job growth. We believe the Fed's current downplaying of the inflation statistic will fit this pattern." (JB emphasis)

JB

[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
http://www.lemetropolecafe.com

CARTEL CAPITULATION WATCH

The DOW dropped 64 to 10,361, while the DOG gave up 33 to 1990.

A good amount of the following material in this MIDAS is either downright scary or shameful.

The PPI will be announced at 3 PM tomorrow, after gold closes. Then again, not so fast:

U.S. May producer price index delayed indefinitely

WASHINGTON (CBS.MW)-- The release of the May producer price index has been delayed indefinitely, the Labor Department said Wednesday. The PPI was originally scheduled to be released Friday, then was rescheduled to Thursday afternoon to avoid conflicting with the funeral of former President Ronald Reagan. The agency is "working to resolve unexpected difficulties in calculating the index this month," a press statement said. The report would be released no earlier than Tuesday. The agency has been having trouble with the PPI releases this year. The January, February and March PPI releases were delayed to sort out difficulties in converting to a new industrial classification system. "We are embarrassed," a government spokesman said.

You should be embarrassed, Labor Department. This is beyond pathetic. Who got to you this time?

The manipulation of the information and markets is completely out of control in America. The Orwellians are running roughshod over everybody and every market.

How bad is this very talked about PPI Number? Are they petrified what it might do to the US bond market? To the stock market? Or, are they playing an incredible spin game, raising inflation expectations so high that when they eventually release a number, maybe less than expected, it will result in the stock market rallying hundreds of points?

What a bunch of sickos we have running the country! Sure, they may Band-Aid their way to holding our financial markets and economy together for some more months, but they have gone too far. This all will end VERY BADLY.

Japanese economic news:

June 9 (Bloomberg) -- Japan raised its estimate for first- quarter economic growth to a 6.1 percent annual pace because companies increased inventories more than anticipated.

The expansion compares with an initial estimate of 5.6 percent growth reported by the Cabinet Office in Tokyo last month and a median 5.8 percent gain forecast by 12 economists in a Bloomberg News survey. Quarter-on-quarter, the economy grew 1.5 percent, more than the earlier estimate of a 1.4 percent gain. –END-

Congrats to GATA’s Mike Bolser who predicted The Gold Cartel would knock gold in conjunction with rising rates. His latest:

Hi Bill:

The Fed added a total of $10.25 Billion in open market operations today June 9th 2004, an action that upped the repo pool to $47.10 Billion. Tomorrow will bring a fairly large repo expiration of $19.25 Billion so the Fed will doubtless add near that amount to balance the loss, giving the primary dealers almost $40 Billion in funds during the day with which to elevate the DOW futures market. I expect the DOW to be up tomorrow as a direct result of this situation. All trend lines are intact and the DOW 30-day ma is turning back up as I predicted it would.

Fed gold hammer

As reported earlier, the later part of the month will bring a Fed hammer to the gold market. My indicators reveal that the Fed will take advantage of a condition that makes their gold selling efforts a bit easier at that time. Moreover, the Fed will need to philosophically attack the gold market if indeed Greenspan raises rates. He will certainly want to send a "don't go there" message to gold speculators. This effort will likely be intense and as such, an excellent opportunity will exist to buy physical or its several proxies such as the Central Fund of Canada CEF or Jim Turk's goldmoney.com (whose commission rates are remarkably low).

I am very concerned about COMEX precious metals players and the building default risk inherent with any government interventional scheme of this magnitude. The failure mode stems from the inability of the riggers to foresee and account for all contingencies that arise from their intervention. Technically, these contingencies are referred to as "dissipative structures" in the non-linear science literature. GATA itself is a dissipative structure that would not exist if the markets were free. There are many others, some unknown even to contrarians.

GATA distributes truthful information to those who wish it regarding the government's interaction with strategic commodities, principally precious metals. It is this information distribution that is so damaging to the government's interventional planning and we see a massive propaganda effort to thwart this truthful information. Speculators armed with improved price discovery data and information can then act with ever bolder moves designed to COUNTER the government's inappropriate, anti-free market actions. This is the very essence of a dissipative structure and I doubt if the Fed's many experts planned sufficiently for this over arching consequence of intervention.

The application of government selling pressure has created a dis-equilibrium in precious metals and other markets that will soon right itself as the government's supply of required physical metal runs out OR one of the weakest links in the long chain of parallel interventions, such as the bond market, finally succumbs to the realities of a free market.

The Fed's increasing rhetoric on interest rates may be a first sign of the end of the game.

Mike

Chuck checks in:

Bill:

In a way it's good to be back from Mexico. But that wouldn't be quite true. I love Mexico and would prefer to be there.

Anyway, after a couple of weeks, we are back to where we were a month ago. But I am sending you a chart of the HUI since we started the bull run in late 2000. If you notice the move from around 35 to 150 in about a year and a half. Then the sever correction process began with the crash in July-August of about 40%. Note that before the index could mount the move of 100% from February 2003 until December 1 of last year, it had two more sharp sell offs with the entire corrective process taking nearly 9 months.

http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8

Given that as a backdrop, it is very possible that we are repeating a drawn out corrective process that will require patience and belief that the financial system is as rotten as ever and the fundamentals that have been in place since 2000 remain untouched and are even more explosive.

Days like today are part of that process. Many of the listed golds closed to the penny on their lows, (a rare occurrence) and filled gaps from the recent bottom run up. If so, we should have completed another squall.

Imagine if the stock market opened down 200 points and closed down 500 points. That would be the equivalent of today's drop. But today's 65 point drop seems radical in this "invisible hand" environment. One day, the hand will be pulled away, and the market will behave like a free market should. This event may require an explosion in interest rates to allow this although this appears to be happening contrary to the Fed's attempts to suppress this. In the meantime, these are days of steadfastness, accumulation and patience.

Chuck

From the illustrious King Report last night:

Apparently our report has been circulating The Street more than usual. We’ve received inquiries from the media and some accounts that we don’t cover. Plus people have been sending our reports to other brokers’ economists and analysts. A brokerage firm economist from a very white-shoe firm says we are confusing the Birth/Death Rate with seasonal adjustments. We said show us where we said anything about seasonal adjustments in the Birth/Death Rate, which is a de facto seasonal adjustment of small business creation.

Here’s everything one needs to know about the CES Net Birth/Death Rate. Perhaps this might induce some highly-paid pundits to actually ‘do the work’ instead of working backward from an ingrained bias. We are including the BLS notes on the Birth/Death Rate so people can see for themselves just what it measures and how it is derived. Please note that the BLS uses the ARIMA time series program as one of two calculations in the number. This is the same model that calculates seasonal adjustments. We called the BLS to see if they still use ARIMA for seasonals. We await the returned phone call.

CES Net Birth/Death Model

In 2004, the CES sample includes about 160,000 businesses and government agencies drawn from sampling frame of Unemployment Insurance tax accounts which cover approximately 400,000 individual worksites. The active CES sample includes approximately one-third of all nonfarm payroll workers. The sample-based estimates are adjusted each month by a statistical model designed to reduce a primary source of non-sampling error, the inability of the sample to capture on a timely basis, employment growth generated by new business formations. There is an unavoidable lag between an establishment opening for business and its appearing on the sample frame and being available for sampling. Because new firm births generate a portion of employment growth each month, non-sampling methods must be used to estimate this growth.

Earlier research indicated that while both the business birth and death portions of total employment are generally significant, the net contribution is relatively small and stable. To account for this net birth/death portion of total employment, BLS is implementing an estimation procedure with two components: the first component uses business deaths to impute employment for business births. This is incorporated into the sample-based link relative estimate procedure by simply not reflecting sample units going out of business, but imputing to them the same trend as the other firms in the sample…The second component is an ARIMA time series model designed to estimate the residual net birth/death employment not accounted for by the imputation.

The net birth/death model component figures are unique to each month and exhibit a seasonal pattern that can result in negative adjustments in some months. These models do not attempt to correct for any other potential error sources in the CES estimates such as sampling error or design limitations.

The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend. BLS will continue researching alternative model-based techniques for the net birth/death component; it is likely to remain as the most problematic part of the estimation process.

http://www.bls.gov/web/cesbd.htm

April manufacturing jobs in the CES Birth/Death Rate increased 18k over last April. Ergo the BLS raised the normal rate substantially. How can small business or the self-employed suddenly open factories?

From the ‘Explanatory Note’ to the Employment Report under ‘Seasonal Adjustments’: "The effect of such seasonal variation can be very large; seasonal fluctuations may account for as much as 95 percent of the month-to-month changes in unemployment."
Seasonal adjustments can account for 95% of the change in a given Employment Report. Control the seasonal adjustments and you can control the report many times.

Zitat

"For both the household and establishment surveys, a concurrent seasonal adjustment methodology is used in which new seasonal factors are calculated each month, using all relevant data, up to and including the data for the current month. Seasonal adjustments can be now changed monthly. In the past they were changed yearly, except for the previous year or two when it was bi-annually.

"For example, in the establishment survey, estimates for the most recent 2 months are based on substantially incomplete returns; for this reason, these estimates are labeled preliminary in the tables."

The Establishment Survey is calculated with incomplete survey returns – another guesstimate the BLS makes.

http://www.bls.gov/news.release/empsit.tn.htm -END-

France's Sarkozy: Can Consider New ECB Mandate For More Growth

Jun 9 4:25 EDT

By Stephen Sandelius

PARIS (MktNews) - French Finance Minister Nicolas Sarkozy floated Wednesday the idea of changing the ECB's mandate to give growth a higher priority in monetary policy, suggesting that the central bank's 2% inflation limit should be raised.

At a pre-election rally of the governing UMP party, the finance minister also urged that the Eurogroup of eurozone finance ministers be transformed into a "real economic government," whose elected president should debate policy with the ECB.

Zitat

"I believe in the fight against inflation, but I believe first in the fight for growth and jobs," Sarkozy said.

The issue of changing the ECB's existing mandate that gives top priority to price stability, "can be posed," he said.

Scary:

Hi Bill

I suggest you check out the article entitled M3 Explosion at

http://jsmineset.co

and then download Warren Pollock's charts and comments via the associated link. The gist of his material is that a "settlement fail" within the Federal Reserve System occurs when one of the players does not meet his obligations. Suppose, for example, that a company has issued commercial paper at a low interest rate which matures in 30 days and, when it matures, the corresponding rate is significantly higher. If the company is so strapped that it can't roll the note forward at the higher rate, then it essentially defaults, leaving those who bought the paper hanging. That's a "settlement fail," and apparently so many of them were triggered by the recent interest rate spike that trillions of dollars were in default, forcing the Fed to step into the breach and extend emergency credit, thereby ballooning M3. (Apparently "too big to fail" has now been joined by "too numerous to fail." The implication: the Fed cannot raise rates, because the real economy is on life support and can't take it; and that means it can't permit rates to rise due to market forces, either. The fake economy--i.e., the economy as depicted by government statistics--is of course booming, but that is quite irrelevant. It is reality, not fantasy, which dictates the flow of events.

What does it all mean? Simple: the real economy is poised precariously on the brink of cascading defaults, which will be triggered by further increases in U.S. interest rates. Hence further rises in U.S. rates must be stopped at all costs. However, if the Fed acts alone, the result is soaring M3 numbers and the imminent threat of domestic hyperinflation. Result: we can expect the Fed to twist the arms of any foreign central banks it can, to prompt them to create boatloads of their own currencies, buy dollars, and then use the dollars to buy U.S. Treasury securities. By this expedient, the deluge of counterfeit money flows into the economies of many nations, rather than merely into the U.S., and, if the foreign central banks contribute a relatively large part of the mix during a particular time frame, the dollar can be made artificially to rise, vis-a-vis foreign currencies. We have, in my opinion, been seeing that today. And, naturally, the knee-jerk response of most traders to a rising dollar is to sell gold, and so gold is going down.

To sum up:

(1) We have a system in crisis due to an imminent threat of cascading defaults.

(2) The only policy response that will stave off those defaults involves global monetary hyperinflation, and it is happening as we speak.

(3) At the moment, foreign central banks are doing most of the inflating, so the dollar is rising.

(4) We are supposed to focus exclusively on (3), pretend that (2) does not exist, and sell our gold.

Duh!
Mitchell Jones

Make up your own mind on this controversial one. Mike Ruppert has an outstanding reputation.

More scary:

COUP D'ETAT:

The Real Reason Tenet and Pavitt Resigned from the CIA on June 3rd and 4th

Bush, Cheney Indictments in Plame Case Looming

Michael C. Ruppert

additional reporting by
Wayne Madsen from Washington

http://www.fromthewilderness.c…w3/060804_coup_detat.html

Is this the way you see it too?

Dear Bill

My thanks to Dave Lewis for pointing out, yet again, in his recent article on Ronald Reagan and Gold that higher prices are not the cause of inflation but the result of inflation. The relationship of the exchange of ten barrels of oil being approximately equal to the dollar price for a single ounce of gold has been a middle eastern tradition for a very long time. It is another reason why the US will fight tooth and nail to keep oil denominated in dollars rather than the euro or franc or any currency which is inherently stronger than the dollar. It is, IMHO, the single best reason why the Fed will attempt to constrain the price of gold for as long as they can--- for in constraining the dollar value of gold it attempts to constrain the dollar value of a barrel of oil, another metric the market uses to gage inflation. It doesn't take a individual with an advanced degree in mathematics to understand why the U.S. Fed is no longer a friend of free markets. When gold was at $100 an ounce , oil was in the $10-12/barrel range. At $400/ounce, oil is currently around $38-42 per barrel of crude. Suppression of the gold price is the only way to hide the real truth behind the horrific inflation that the Fed, in the personages of Greenspan and Bernacke, have unleashed. Controlling inflationary "expectations" by gold price suppression and hence oil and gasoline price suppression is going to be the undoing of the US economy and not its salvation. I am now convinced that the war in Iraq has sadly less to do with bringing democracy to the Iraqi people than attempting to exert influence over the continued denomination of the world price of oil in dollars and the cost of that barrel of oil.

Continued success in communicating GATA's message.

Sincerely
Steve Zahler

[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]

http://www.lemetropolecafe.com

CARTEL CAPITULATION WATCH

The gold shares were clobbered. The XAU lost 4.39 to 83.03, while the HUI was trampled for 9.18 to 183.18. The Gold Cartel continues to succeed in their efforts to sway investors out of gold, silver and the shares. Meanwhile, the reasons to be long the precious metal investments seem to be growing in leaps and bounds. I am staying fully committed.

GATA BE IN IT TO WIN IT!

Mahendra’s day was not so good. We all have them.

Dear Member,

Still one trading hours are pending, and it is so important astrologically for metal recover from this point. Currently gold is trading around $383.50 and silver $5.65 and I am still very much positive on tomorrows trend in metals and also I see strong recovery even today in metal stocks and metals prices. Currently HUI is trading at down 7 points and XAU is down 3 points.

As I said that I will give alert news on OIL - Buying time for oil now.

Around this level one can get out from stock market currently trading down 35 points.

Testing time for my work

Thanks & God Bless

Mahendra

MIDAS

Appendix

Jun 8 2004

Memo on the Margin

How About a Reagan Gold Coin?

Memo To: James Baker III
From: Jude Wanniski
Re: A Most Fitting Tribute

Dear Jim: I suppose you have heard the talk among conservatives of honoring President Reagan by pulling Alexander Hamilton from the $10 bill and replacing his image with the Gipper's. Bloomberg Radio called me today to talk about the Reagan legacy in economics. [I'm told the segment will air tonight at 7:07 EDT.] Among other things, I was asked what I thought of the $10 idea, and said Reagan would be horrified by the idea. He loved Alexander Hamilton, who put the republic on a gold standard and thus contributed greatly to its success. Better, I said, to revive a Bretton Woods type gold standard of the kind that President Nixon abandoned in 1971, which created the crisis that Reagan faced when he was elected in November 1980. If we did, Jim, we could mint a gold coin with Reagan's image on it.

As his chief of staff in his first term and his Treasury Secretary in his second, how many times did you hear him say that he never knew a great nation that left gold and remained a great nation? It was the one dream he had when he came to the Oval Office that he could never achieve, mainly because so many people around him said it couldn't be done. I'm writing to you because you were the one man on his team who believed he was right... and tried to do something about it. Do you recall running into me in Florida a few years back? Practically the first thing you said was to remind me that you had proposed a gold-based reform to the International Monetary Fund at its Washington meeting in September 1987!! You were proud of that initiative, as you had told me some years earlier that your father had been a fervent advocate of a paper dollar as good as gold, and had told you so many times. Alas, the initiative went no place, as the stock market crashed a month later, a crash that would never have happened if the Federal Reserve was keyed to a fixed gold price.

Did you see Novak's column Monday? He recalled how President Reagan dreamt of a return to gold, but it proved "a bridge too far." It's only too far now because nobody is willing to step up and ask why the heck the Fed is talking about raising interest rates to fight inflation when the price of gold has falled $40 since February. If Reagan was President today, he'd want to know why? But neither President Bush, Senator Kerry or Ralph Nader seem at all curious. You're the one fellow who has the standing and the grit to raise these questions, and I hope you find a way to do so. We at least need a discussion and debate on the topic, and at most we need that gold coin with Reagan's golden image.

For the Great Communicator, presidency was about big dreams
By Robert Novak, Chicago Sun-Times

WASHINGTON -- Ronald Reagan was the only big-time office-holder I covered who entered public life as a dreamer and never changed. He achieved an extraordinary number of those dreams. But he never stopped thinking about those visions that, as a practical politician, he conceded could not be realized.

In 1986 at the height of the Iran-Contra scandal, I was President Reagan's guest at lunch in the White House. Near its end, I asked him if he ever regretted not pressing for a gold standard. ''Oh, yes,'' he said. ''That would really have stabilized the economy, but --" ''Mr. President!'' his chief of staff, Donald Regan, interrupted sharply. ''Oh,'' said the president, with his characteristic shake of the head and half-smile, ''Don doesn't like me to talk about the gold standard.''

Don Regan, a lion of Wall Street before coming to Washington, was no dreamer. But Ronald Reagan was -- with practical limitations. He never stopped dreaming about the gold standard, but was practical enough to realize it was one bridge too far. He had fulfilled dreams that practical men like Don Regan thought unachievable: sharply reduced tax rates that revived the U.S. economy and victory in the Cold War, with the Soviet Union gone.

Grudging praise of Reagan, even in death, paints him as an intellectual midget who had one or two big ideas he relied on staffers to put into action. Reagan was not consumed by details, as no great leader should be. But he was more deeply involved than liberal critics admit, and more often than not he was fighting off senior aides.

The decision made early in Reagan's administration that made possible all future success was distinctively his own. When the air controllers (the only labor union that supported him for president) went on strike in violation of the law, Reagan was determined to break them. Secretary of Transportation Drew Lewis flinched after a while and advised a compromise. Some of Reagan's most conservative aides wanted to back down. But Reagan, who had begun his public life negotiating labor contracts as head of the Screen Actors Guild, would not budge.

The message conveyed by that obstinacy was that Ronald Reagan was no mere B-movie actor propelled into the Oval Office by a whim of fate. He was no man to be trifled with. That message traveled across the sea to Europe and into the very halls of the Kremlin. Nothing could have so strongly asserted Reagan's stature in foreign chancelleries than the air controllers dispute.

On the big issues, Reagan rejected the importuning of his senior aides. He refused to temporize on the 1981 tax cut that ended Jimmy Carter's stagflation. At Reykjavik in 1985, he turned down State Department advice for an arms deal and stood fast to open the way for the Soviet collapse.

That was not expected by the heads of government who met Reagan for the first time at the 1981 G-7 summit in Ottawa. Europe's socialist politicians were openly contemptuous of the ''cowboy'' American. Only Britain's Margaret Thatcher supported Reagan. But by the 1987 G-7 summit in Venice, the Europeans were treating Reagan with the utmost respect.

Reagan was the mirror image of Richard M. Nixon. Nixon really believed in very little and was nearly non-ideological, but he was engrossed in the minutiae of political maneuver. Reagan carried a heavy ideological load but was uninterested in political intrigue. That was why Nixon's presidency was a disaster and Reagan's one of the most successful in the nation's history.

Reagan was fortunate to come along midway through a national political realignment that had begun with Nixon's election a dozen years earlier. The Reagan Democrats, at odds with their ancestral party, were ready to cross the political divide. Reagan made it possible for them as Nixon would have made it impossible.

He was perhaps the nation's most ideological president. Oddly, he was one of the most intellectual presidents. He was a voracious reader (from right-wing publications to economic theory) and an industrious writer of his own letters all his life. To call him the Great Communicator does not do justice to this dreamer of great dreams.

Copyright © The Sun-Times Company

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