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

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June 14 - Gold $383.10 down $2.50 - Silver $5.64 down 8 cents

The Charade!

I've been there before
And I'll try it again
But any fool knows
That there's no way to win
Here we go again
She'll break my heart again
I'll play the part again
One more time
... "Here We Go Again" by Ray Charles (musician, 1930-2004)

Ray Charles could have written this tune for our gold market these days. It could not be clearer that The Gold Cartel is going all out to keep gold under wraps. With all the talk turning to inflation and higher interest rates in the US, the gold price is being suppressed to give a signal to the marketplace these growing concerns are not overly worrisome. Same drill. PRICE ACTION MAKES MARKET COMMENTARY!

What probably has the Orwellians most concerned is what rising interest rates could do to various US financial institutions and to the trillions of interest rate derivatives on their books. A rising gold price, which gets out of hand volatility-wise on the upside, could set off a derivatives neutron bomb. We are in uncharted waters here as far as derivatives are concerned. Therefore, the Working Group on Financial Markets is not taking any chances and has mobilized enough gold to keep the price under pressure.

Throw the fundamentals out the window when it comes to gold these days. For example:

DJ. US Stocks Remain Down On Concerns About Inflation

ODJ REPEAT:DATA SNAP: US Trade Shortfall Widens To New Record Level

Stocks go down on this news, but so does gold. In a free market, gold would have jumped a few dollars, at least. This sort of news has been hitting the tape for weeks. A fellow Café member sums up the situation quite well:

“Gold? Forget it! Doesn't matter. Looks like our "friends" have decided that it ain't gonna budge until they are ready to let it move. I could not agree with Mike Bolser more - tech analysis, fundamental analysis, is useless when dealing with a managed market. I am willing to bet that outside the GATA camp - the vast majority of investors who are looking at gold are completely and utterly befuddled.”

The Gold Cartel has done their thing again. Their selling last April eventually turned the large specs into big sellers, getting them most short between $370 and $380. The collusive ones covered their shorts down at those levels. The specs, trapped short, covered from $390 to $398 where the crooks went short again. Now the funds, “with new sell signals” are going short again. Maybe we should call the cabal troops the “PICKPOCKETS!”

The gold open interest fell 1450 contracts to 224,142.

The cash silver market remains very firm. There has been a large buyer of silver calls recently. An unsubstantiated rumor has Goldman Sachs as the buyer. Will do what I can to keep on that case. Remember what happened the last time MIDAS reported GS as a large silver call buyer.

The silver open interest rose 571 contracts to 84,196.

It is amazing how The Gold Cartel is able to maneuver investment opinion by moving gold around at their beck and call. The more bullish the gold news becomes, the more they sit on it, thereby inducing spec selling. There is almost panic out there in the gold share world that the CPI will be so bad, US interest rates will go way up and the dollar will soar. Therefore, investors can’t get out of the shares fast enough.

This is nuts. Our key interest rate is a piddly 1%. Britain’s is 4.5%. Our employment situation (see below) is way overstated for political reasons, our trade deficit is horrendous (see below), our budget deficits continue to worsen, Iraq is a mess, etc. Yet, the gold investing world is in a panic because US inflation may be far worse than previously reported, something which has been divulged in this column all year long and surprises no one in the Café camp.

Thus, in spite of all the growing reasons for gold and the shares to go up, they go down because of inflation concerns. Black is white and white is black. You have to wonder how long The Gold Cartel can continue to pull off this charade!

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The John Brimelow Report
What is the state of the physical market?

Monday, June 14, 2004

Indian ex-duty premiums:

Friday: AM $6.52, PM $5.97, with world gold at $384.30 and $383.90. Ample for legal imports.

Monday: AM $6.60, PM $ 5.80, with world gold at $383.40 and $383.10 Ample, and adequate for legal imports.

The new leftish government in India is continuing to do a good job of upsetting the Commercial community. The rupee fell to a one month low on the close today and the stock market has fallen 5% in the past two sessions. Prosperity is the optimal condition for Indian gold consumption, but at least at present the argument that securities will tempt the upper echelon from gold is in abeyance.

Reuters carries a story today claiming that Asian physical demand has fallen "sharply", pointing to lower premiums in the Far East, and anecdotes from Indian dealers hoping for lower prices. However, India is clearly still in import mode based on the current premiums. The region where the season is positive, the Near and Middle East, does not readily supply the data needed to calculate premiums. News reports from the Gulf suggest strong buying, for instance

http://www.khaleejtimes.com/Di…e=data/theuae/2004/June/t heuae_June339.xml §ion=theuae

""Within the last two weeks itself, we have had a good 32 to 35 per cent increase in the sales. We are expecting a further increase in the coming months too, as more and more people will be leaving," remarked Varghese C. A, Shop Manager of Alukkas Jewellery in Abu Dhabi..According to C. J. Sunny, Joint Secretary, Gold and Jewellery Group, Dubai.the Dubai shops - that has lend the emirate its name 'The City of Gold' - are also enjoying a proliferating business marking 25 to 30 per cent increase in sales for the last few weeks."

This morning Mitsui made available their interesting monthly refinery survey, reporting that refineries were indeed slightly less busy and optimistic at month end compared to April, but commenting:

"Physical markets generally do not like volatility. There were other factors at work against physical - the Turkish banks had some difficulties in importing, and the wedding season in India came to an end. (For India month on month demand was lower, whereas year on year it was up).. The feeling is that in general many of the physical gold buyers had overbought the previous month. Expectations for June are for a weaker demand for gold, although it has been interesting to note in the first week of June that physical silver has been in much demand, exhausting supplies at vaults and refineries. 9999 gold kilo bars have also been in good demand."

(JB emphasis. World gold around the end of May, of course, appeared to be reliably rising through the mid $390s)

Last week's curious spike in TOCOM activity is passing into history. On Friday volume fell 41% to equal 22,689 Comex lots. The active contract was up 7 yen, and open interest edged up the equivalent of 448 Comex. Today it fell another 26% to equal only 16,869 Comex lots, despite a sharper weaker yen. The active contract was up 5 yen, but open interest was static (up 28 Comex lots to the equivalent of 111,297 Comex.) (Thursday in NY saw 36,186 contracts trade; open interest fell 1,450 lots to 224,142 contracts.)

Gold, and more particularly gold shares, appear demoralized by the powerful resistance displayed to efforts to get above the 200-day moving average in the mid-390s. The technical situation this has created is, of course bearish. Short term, a good deal depends on how much shorting was enticed in as a result. Thursday's open interest fall, and the price jump following the trade data this morning, imply this has been material. To the extent this has been predicated of stories of weak demand, it will prove ill-judged.

In general, superficially gold appears far more willing to accept that the Fed is omniscient and all-powerful on the question of inflation than the stock, bond and even the foreign exchange markets. This is anomalous given its' tradition as a refuge of skeptics and dissidents.

JB

CARTEL CAPITULATION WATCH

The DOW dropped 75 to 10,334 with the DOG sinking 30 to 1990.

The dollar only rose .09 to 90.28, while the euro lost .36 to 120.49.

The 30-year bond was hit pretty hard, falling 29/32 to 103, basis the Sep contract.

What is happening to the US trade deficit is some kind of eye opener. The dollar has been in decline for more than two years now and the trade deficit continues to widen:

8:30 April Trade deficit reported $48.3B, a record, vs. consensus $45B March deficit revised to $46.6B from $46B. **

Trivial items like US budget deficits, trade deficits used to be important to the financial markets. Now, they are numbers to be ignored, just like the real US employment numbers, the disappearing PPI, etc. Why? The Orwellians and Working Group on Financial Markets, the PPT, say it should be that way for the good of America.

The fact that our interest rate structure in the US is determined more and more by foreigners also doesn't seem to faze too many people either:

Most Treasury bonds in foreign hands
By Päivi Munter in London
Published: June 13 2004 20:23

Demand for US government bonds at foreign central banks has for the first time lifted overseas holdings to more than half the paper in circulation.

Figures from the Federal Reserve reveal that $1,653bn, or 50.6 per cent of liquid Treasuries, were held by foreign investors at the end of the first quarter.

Foreign ownership of the bonds rose by $170bn between January and March, with central banks - mainly in Asia - estimated to account for about $96bn of this.

The appetite for Treasuries has been fuelled by attempts to slow the appreciation of national currencies by buying dollars and investing the cash in Treasury bonds. The Bank of Japan, the biggest foreign investor in US Treasuries, spent Y15,200bn ($138bn) on currency interventions in the first quarter.

The surge in foreign central bank holdings has defied a sharp fall in Treasury prices, and a concomitant rise in yields, raising fears the market could fall if buying by the small number of official sector buyers slows.

-END-

Word IS gradually seeping out about the real US employment picture, but in a subdued manner:

REUTERS U.S. jobless rate misses "hidden" unemployed

NEW YORK, June 14 (Reuters) - Buried inside the official U.S. employment report each month is a little-known figure that gives a much less rosy picture of the labor market than the headlines.

The government agency that produces the data also publishes an alternative measure that tries to capture the hidden unemployed, those who are not included in the official unemployment rate for various statistical reasons.

That broader measure is dramatically higher, at 9.7 percent in May, compared with the official level of 5.6 percent.

That's an extra 5.96 million people, in addition to the 8.2 million "officially" unemployed, who are waiting on the sidelines and may at some point step back into the labor force.

Although it receives little notice, the adjusted jobless rate has important implications for Federal Reserve policy-makers because it suggests the job market will not tighten as quickly as some in the financial markets believe….

-END-

GATA’s Mike Bolser over the weekend:

Hi Bill:
After some thought about the current furious onslaught by the Fed and interpreting unpublished data, the Fed may be in the beginning of its end game for gold and interest rates. They are at least setting up a new defense position but aren't doing it with any finesse and that's a worry.

The Fed's end game must force rates higher, deliver some sort of rescue for the trillions in interest rate derivatives (IRD) while ceasing or at least thwarting gold speculation in the US and UK.

Parmalat's interest rate derivatives explosion still resonates across Europe and there may be many more like them waiting for grim announcements. How these IRDs will be resolved is anybody's guess but they must be resolved if rates go higher, as they must. Perhaps by a new class of government bond, take your pick from a basket of new government colored paper.

We know that seismic events have recently occurred through the departure of Rothschild's and AIG from the LBMA PM Fix mechanism. Suppose those things happened because they knew there would no longer BE a PM Fix after a specific date? Instead, the PM Fix would be replaced by a government fixing mechanism....gold at $375...gold at $400...gold at...take your pick.

Should the LBMA stop trading gold and silver as they have been, the COMEX and probably the Australian and TOCOM markets in addition, would necessarily follow suit, effectively bailing out all shorts and trapping all gold and silver longs with zero gain when the rest of the world (ROW) later restarted free gold and silver trading (At far higher prices) in Shanghai, Dubai and Ankara. It is this default risk that so many in our field have ignored for too long.

It is therefore my recommendation that your readers take appropriate steps to guard against such an occurrence. Entities such as the Central Fund of Canada [CEF], its counter part in Australia at the Perth Mint, small exploration gold equities such as J Pacific Gold and Samex Gold plus many others such as Golden Star Resources are relatively immune to shorting intervention and would survive any cataclysmic COMEX closure. Any qualtity debt-free gold exploration firm with a good portfolio will be a haven. And of course the price of physical is getting better and better each day as the off-take rises. Getting physical metal later, simply won't be an option at these prices. As Professor Fekete warns, "Zero supply, infinite demand". We must heed his warning.

It is the COMEX contracts themselves that seem the most vulnerable to such an unthinkable event. There will be no warning, only an announcement after the fact and a return of paper equity with no opportunity to move to another vehicle before trading restarts.

The above opinion may seem alarmist and to the mainstream gold community it is clear heresy but this is what I think may happen if not now then later. The glum faces at the G-8 only reinforced my feeling on this point. Surely the US asked for more central bank gold as they did from Spain and Portugal going into the Iraq War, putting their leaders on a public dais as a perk for their all around cooperation. Portugal later announced their gold sales. It didn¹t appear that the US got much of anything from the G-8 on Sea Island except perhaps some gold jawboning from the French Central Bank.

If there is to be such an extreme action, it may come around the Fed meeting which begins on June 29th or the following weekend (July 4th).
Mike

Chuck checked in over the weekend too:

Bill:
Have you ever seen so many bearish chart driven predictions on gold as have come out over the past couple of weeks? I'm not surprised that Russell has turned very cautious. He is a trend follower. His most bullish predictions were at gold and silver tops.

Everyone is scared to death of being in another 20% drop while everyone in the regular stock market couldn't care less about a 20% drop. I would be surprised if the sentiment indicators don't drop very sharply again here. The facts remain that the HUI to gold and silver to gold are at historically bullish levels. I read the drop in the open interest as very bullish and the COTS shift must regarded as such also.

We are sitting on a financial time bomb here, and many gold bulls are out of the market believing that they will know when the trumpet sounds to announce the very bottom. That is why I like Hoye's stuff. He gives you reasons for why he is bullish on gold and bearish on the markets. There are far too many advisors who turn 180 degrees when the lines drop a little.

The problem is that everyone is either totally bullish or totally bearish and most can't allow for base building. I am very comfortable in my positions concentrated in the exploration companies. For instance, IMA continues to announce unreal numbers. That property will be the largest silver find in history when it is drilled a little more. The stock is behaving very well. It will prove why we won't be able to fine tune this market…..

One more thing - I think that this means something, but the puts are piling up not only in the bullion but also in the XAU and Newmont. I suspect that there is a massive building of pessimism here as many are looking for the next break down. I don't think the precious metals are going to accommodate these people.

Have a wonderful weekend. Chuck

NEWSMAKERS - CENTRAL BANKERS IN THE NEWS

THE ELEPHANT IN THE ECB'S ROOM

You know the story about the elephant in the room? It was a very large elephant, so you could hardly miss it, but because people didn't want to talk about it, they pretended it wasn't there.

This week thousands of copies of an estimable and long-awaited book by the ECB have thudded onto the desks of central banks around the world. "Risk Management for Central Bank Foreign Reserves" is jam-packed with excellent articles. Just to pick out a few of the best. There is Pierre Cardon and Joachim Coche, of the BIS and ECB respectively, on strategic asset allocation; Roberts Grava of the Latvian central bank on corporate bonds; Mark Dwyer and John Nugee (DST International and State Street Global Advisors) on risk systems; and interesting case studies by central bankers from the Czech republic, Hong Kong, Slovakia, Brazil, Venezuela and Israel. There are contributions from investment bankers from JP Morgan Fleming and others. All this plus a thoughtful introduction by Carlos Bernadell of the ECB and colleagues.

This book can even stand comparison with the volume produced by Central Banking Publications called "How Countries Manage Reserve Assets".

Yet there is one big thing missing. Something nobody wants to talk about. It's a four letter word. G-o-l-d. Now, don't all groan!

At the last count gold valued at current prices accounted for $166 billion (44%) of the euro area's massive external reserves of some $376 billion; it was 59% of France's reserves, 53% of Italy's, 52% of the Netherlands and so on. It is part of the ECB's pooled reserves. Movements in the gold price can have big effects on the balance sheets, reserves and profits of central banks. Historically, gold has always been the quintessential official reserve.

Yet there is not a single article on gold reserves in this book. Can there really be nothing to say about it? Or nothing the ECB wants said? It is mentioned casually, en passant, in three of the articles but the only discussion of any depth that "Newsmakers" can find from a quick read is in the article by Bert Boertje and Han van der Hoorn of the Netherlands Bank, who say that "gold can be seen as the ultimate war chest". The result of their interesting "balance sheet" approach is to predict a move away from gold and other so-called "high risk" assets towards domestic assets, which is in fact happening.

One can't help thinking that the editors took one look at this elephant and decided to talk about something else - anything else. I wonder why?

This is how the poem goes for those who don't know it (the author is unknown):

There's an elephant in the room.
It is large and squatting, so it is hard to get around it.
Yet we squeeze by with, "How are you?" and "I'm fine," and a thousand other
forms of trivial chatter. We talk about the weather. We talk about work.
We talk about everything else, except the elephant in the room.

-END-

Telling it like it is:

Good Morning Bill

Hope you had a pleasant weekend.

I'm watching our favorite metals with continuing amazement, as the markets stubbornly refuse to reflect the unsustainable and unpleasant reality of the US and global economic situation pressing in from all directions, aided by the lack of disclosure by the dishonest Trojan Horse mass media.

I attribute this to the unrelenting, heavy-handed "full court press" manipulation of the ESF, FED, PTB, etc. Their primary desperate mission seems to be to perpetually deceive all as to the nature and origin of the consequences of THEIR irresponsible and unconstitutional meddling in all things monetary. They unremittingly continue to lie to confuse, mislead and mask the problems, and, when the damage they've caused becomes undeniably apparent to most, they will lie to avoid shouldering the blame for their actions, which imo are the main and perhaps sole cause of our imposed debt-based dilemma. The ongoing gold and silver price-fixing betrays the ulterior motives of these antisocial tyrants. All that remains, in my mind, is to speculate upon the "solution" these career criminals have prepared to obscure the origin of the unfolding consequences of their betrayal of the real interests of this country and our people.

I'm resiliently sticking with what I know to be REAL, despite the persistence of ongoing manipulated market relationships. I do not believe the looking-glass world created from behind the curtain by the money power wizards, no matter how temporally powerful, is sustainable beyond the short-term. Perception of the precarious US economy, as it changes from denial to realization and the attendant shock and despair, will produce changes unpredictable even to the jaded perpetrators of monetary fraud.

Regardless of the vicissitudes of the markets, gold and silver in hand continue to provide their owners with a tangible assurance that no matter how bad the fallout, there will be an "other side" to what appears to me to be an inevitable crisis.
Regards, Tom K

Another scandal brewing on the horizon?

Bill,
Jim Currie gave me your name as someone who might assist the small companies and investors who have been robbed blind by short sellers. I have been reporting on this issue for several months now, and the scope of the scandal has floored me. The response we have gotten from readers has been amazing. We are motivated entirely by passion, not profit, and have no hidden agenda in this issue, other than trying to be a voice for the small investor. If there is anything I can do to assist you in your efforts, please let me know. I believe that this is the single most important issue facing America today, bar none. I am enclosing a couple of links to articles we have written on the subject, I usually try to write them so that the average reader can understand the issues, even though they are incredibly complex. If I have a talent that will help expose this scandal, that is it. Thanks again for your efforts.

"Is Dateline Losing Credibility Over StockGate Story Delays?"
http://www.faulkingtruth.com/article/?Investing101&1005

"Financial Terrorism In America"
http://www.faulkingtruth.com/article/?Investing101&100

"The Berlin Connection?"
http://www.faulkingtruth.com/article/?Investing101&1004

"StockGate: A Call To Arms"
http://www.faulkingtruth.com/article/?Commentary&1006

Mark Faulk

-END-

Aucklund Ed:

Bill:
The other day someone wrote on a chat board that everyone wants to get into Gold at the LAST MINUTE. I've been thinking about this over the weekend. I think he's right.

I've also thought for a long time that the Fed would NEVER again raise interest rates. They're trapped. The consequences of raising rates to those holding the wrong interest rate derivative contracts, to the housing market and construction industry, to those who swapped long term debt for short term debt would be too dire for the Fed to move.

Well EVERYONE now thinks the Fed will raise rates in 2 weeks by at least 25 basis points, many are now calling for 50 points.

This may happen but IF it does raise rates the Fed will not be moving voluntarily. The Fed will NOT be moving to prevent future inflation nor to slow down the economy. No, the Fed will only move because it has NO CHOICE. The market will be FORCING the Fed's hand.

Today the US trade deficit came in at a shocking $48 Billion. Did the Dollar move on this horrendous news? No.

Last week US Debt hit $7,214,624,032,891.61. The Congressional debt limit is $7.384 Trillion. At the rate Government is spending money it won't take long (some say mid summer) to hit this Debt limit which either has to be raised JUST before an election or the US goes into default. Bankrupt! Did this news move the Dollar? Well yes, perversely it went up last week!

Today US 5 yr TSY hit a new yearly low of 40.81 and currently as I write is sitting at 40.70 which is still a new low. 10 yr and 30 yr TSY are just above their lows. Japanese 10 yr bonds have now fallen for 13 days straight.

On the commodity front Copper inventories in London and NY are now at 238,000 tonnes after falling 2900 tonnes today. Lead is down to stocks of 53,300 tonnes having falling 575 tonnes today. Nickel is down to 9354 tonnes after falling 378 tonnes today. The drawdown on these and other stockpiles has been relentless and point to a mid summer ZERO inventory level. Either the world economy slows down dramatically or we will see metal rationed by higher prices before labor day.

Meanwhile Gold and Silver and precious metal shares have no friends. The Gold charts all indicate things will only get much worse.

How can this be? Why do investors prefer to hold Dollars and Yen over Gold? Why? Because they're afraid of higher US interest rates? The argument is that this is bad for Gold. What they're not looking at YET is the growth in the US money supply which is up at an annualized rate of 10%+ so far this year and this rate is accelerating.

So they sell their Gold. And what do these investors now hold?

Perhaps US Dollars which are being inflated at the rate of 10 to 20% this year! Or US Bonds which on top of the above inflation of the money supply are dropping to new lows. Or maybe Japanese bonds which have fallen 13 days in a row.

But the day will soon come when those who have sold their Gold will want back in. They will soon realize that NOTHING has been done to reduce the US trade deficit or Reduce the US budget deficit. More importantly, the market will realize that despite high price inflation, despite the crazy money printing, the tiny 25 or 50 basis point hike of June 30th has sent the US economy reeling. They will realize that everyone is on the wrong side of the trade and they will all try to get in to gold at the LAST MIINUTE. And they will come to understand the true meaning of that old saying:
There's no rush like a Gold Rush.

Be right, sit tight. Don't try to time it. The CRISIS is now!
Got gold?

Cheers from Auckland. Ed

Seems most of us in our camp think the same way:

Hi Bill,
Another discouraging day for gold bulls after the largest trade deficit ($48.3 billion) in history! With import prices running at an annual 8.4% pace this year and CPI at an annual 4.5% a rational investor would expect the dollar to be tanking and gold to be trading north of $450. I guess the FED and their agents are doing a great job of convincing people that a fast growing CPI, a record trade balance and a fast growing public debt don't matter anymore as long as the printing presses keep running and Mr Greenspan keeps telling people everything is alright.

I guess our patiences are being tested to the limit but we have got to hang in there.

Regards,
Mario Innecco

Had the pleasure of meeting Willem Middelkoop and Eric Hommelberg last evening at a dinner party thrown by Samex’s Jeff Dahl. Both flew in from The Netherlands. Fun guys and very bright. Willem is a financial market journalist who is not afraid to speak his mind. He sends us this missive:

Teil I

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Hi Bill,

thanks again for last night....great evening

The BIS (Bank for International Settlements) in Basel just released a few new interesting papers.

In the tables of the BIS Quarterly Review, June 2004 you can find the latest numbers of year-end 2003 on commodity derivatives. Total amount of contracts outstanding rose by more then 50 % to 1406 billion dollars (1,4 trillion).

Gold contracts rose, despite the decrease of hedging activities from goldmines, by almost 10 % to 344 billion dollars from 315 billion in december 2002. More interesting is the rise in the "other"-commodity category. This position almost doubled from 608 billion tot 1062 billion dollars. This could be the result of a large rise in outstanding silver derivative contracts.

You can find all numbers on page 11 of the "Table of contents of 'International banking and financial market developments" (BIS Quarterly Review), June 2004.

http://www.bis.org/publ/r_qt0406.htm

Also interesting are the new BIS-publication on the recent initiatives by the Financial Stability Forum of the BIS bankers

http://www.bis.org/publ/qtrpdf/r_qt0406i.pdf

Willem Middelkoop

From Sarge:

“Hey, at exactly 11:14 an entity stepped in and halted the DOW decline with a purchase of 150,000 DIAmonds. Then 2 minutes later 1,000,000 QQQs were bought. At the same time the DIAs were purchased, the opening salvo of a heinous attack on the HUI started. 181 needed to be broken to violate a "Wave 1" high of the most recent small rally. Once that was broken the next target to the downside became 172.49, the low on 13 MAY. They will try to take the market below that point now.”

Samex Mining is my second largest holding. On Friday CEO Jeff Dahl put out two press releases which can be read at http://www.Samex.com. What they have come across in Chile is nothing less than astounding and no one seems to give a crud. This is the deal:

*Phelps Dodge owned a portion of a 42 square kilometer piece of property assembled by Samex in the middle of copper/precious metal elephant country in Chile and pretty much gave up on it, selling their portion to Samex and retaining a back-in right on any size vcopper deposits. Many geologists will tell you a mining property only becomes credible when first given up on by a major mining company.

*Over the past months Samex has done extensive trenching/sampling and identified 6 to 7 targets all of which have shown considerable mineralization.

*Major discoveries require targets of this size and then need “the juice” in those bodies to make them economic to mine. This will be ascertained by drilling to commence this summer.

*In essence investing in Samex, as a result of recent developments, is like investing in 6 to 7 exploration companies. The risk of the investment has decreased as a result of finding so many mineralized targets. If one of these size targets proves to be economic, we have a BIG winner. If more than one is economic, and a good portion of this property includes a number of economic ore deposits (to include gold, silver and copper), we have a BONANZA – which now has the potential to become one of the major discoveries in Chile.

*The Samex property, Los Zoros, is on trend with major copper, gold and silver mines, run by some of the world’s most prestigious mining companies such as Phelps Dodge and AUR Resources. BHP and RTZ have their own exploration concessions adjacent and are also on trend next to Samex’s property.

*Samex is only a few drill holes away from having its share price be a moon shot.

*Like I said though, nobody seems to care. Samex traded below 50 cents last time I checked. I keep buying.

The Vancouver conference has been wonderful. Great to see Chris Powell, Ed Steer and Mike Bolser. Our GATA Board meeting was very productive.

Had lunch with Bob Hoye, a veteran market commentator who has a substantial institutional market following in Canada and in the US, and spoke at some length with John Mauldin, who also has a very large following in the US. We spoke briefly about our differences on the PPT and agreed to get together in Dallas, as he lives fairly close by me.

The gold shares were tagged with the HUI falling 7.73 to 177.78 and the XAU sinking 3.04 to 80.79.

Will be in Vancouver until tomorrow mid-day.

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

From Mahendra this past weekend:

Final letter - Good bye till 4th September

Dear Members/Bill,
As I present the likely trends for this week, today I have resolved to delve into more details in regard to metals. This is in recognition of the essential need for planning in your short, medium and long term investment decisions. It is intended to assist you adequately grasp the scenario as it is likely to unfold, and consequently be guided to make the appropriate decisions. I therefore urge you to be particularly attentive as you read this newsletter.

Last week, my expectation of a weak trend besetting metals was only confined to occur on Tuesday and not on Wednesday. Contrary to this expectation however, we are all painfully aware of how bad Wednesday turned out to be. This is something which I never saw in my calculations and it is indeed the second instance in which this kind of miscalculation has occurred to me for the last three years. The first time, this happened last year when gold fell from $360 to $320, which was way beyond my expectation of a downward trend of up to $338. A similar thing happened for the second time during this week when I did not perceive the downslide of the price to below $387. This can only mean that I am either missing some thing in my calculations or that there is a short term presence of powerful external forces.

Since the influence of external forces can only be temporary, it should merely last for a maximum two to three days. Therefore, this means that gold and silver should steadily move up during the next week. If this however fails to occur and the metals are unsuccessful in embarking onto an upper side movement within the next week, then I am a little bit scared of the possible implications. If this is what occurs, then my recommendation is that you sell 50% of your position in metals because they could further go down or remain 5% weak for another 32 days.

As you are all aware, I am anticipating better tidings from the month of August. This is because I am predicting a period of great rise in metal prices to commence from that time. Why don't we therefore maintain some money in our safes till the start of this very strong period.

In the last quarter of 2004 I expect metal prices to attain unprecedented levels, with gold hitting $525, Silver at $12 to $14 and $390 for Palladium. If you take these prices into account, one sure thing is that metal prices will have a great run towards the end of this year. If you keep on losing money in the short term by engaging in uncertain trading, then you might not be in a position to take full advantage of the great rise when it finally occurs. My counsel is that you should be prudent in your dealings and be poised to grab the moment when the right time comes.

IMPORTANT NOTE: Astrological movements reveal that if metals fail to rise on Monday and Tuesday, then I recommend that you sell 40% to 60% of your holdings in metals and remain with cash in anticipation of the big last quarter kill. This will be a momentous phase because for the first time in history, people around the world and players in the financial market including you shall truly appreciate the contribution of astrology to world events. You shall be witness to how astrological advice can change one's life path and launch it onto a beautiful road that is devoid of pain, uncertainty and losses. All this is however dependent upon acting appropriately and doing so at the right timing. Indeed, I believe in the right timing and the role of luck in world and human affairs.

There are specific times within a specific sector when astrological cycles reward positive results to everybody that is involved in the sector during that particular period. A case in point is the technology boom of 1997-1999 and the metal rise witnessed in the 2003 and first quarter of 2004. It is however also a fact that when times are uncertain, only a few people gain because they enter at the opportune moment and exit at the right time while, the vast majority (75%) incur losses. During a phase when the astrological cycles are emphatically negative, the majority of players lose out because 90% of them get stuck.

FINAL NOTE: My counsel to those who are experiencing sleepless nights and are unhappy for being stuck in metal within the current uncertain trend, is that they should exit on Tuesday after confirmation that metals are not performing well. I will send out my opinion for the future outlook on a daily basis during this week because the reality from last Wednesday's trend has also shaken me up considerably.

POSITIVE POINT: According to astrological calculations, Metal prices should strongly rise on Monday in New York and on Tuesday in Asia, Europe and USA (I know metals experts are negative on net week). If this does not happen, then it will be a very ominous sign indeed. As I mentioned earlier, this may herald the commencement of a very bad phase. On the other hand, a rise will be a sign of great things to come, though I still recommend that you remain 50% in cash. As I have indicated in my book 2004 WORLD & FINANCIAL PROPHECIES, "2 April to 7 May will be a bad period for metals. It will also be a bad period for metal from mid of June, till the second week of July".

It is my hope that the analysis I have given above will help you in planning. Let us now see what is indicating for this week and why it is important.

Predictions (newsletter) from 14 June to 18 June:

GOLD:

If the situation does not unfold as predicted on a positive day of planetary movements, then it means that there are also other negative forces that are exerting an opposing influence, but which I am however not able to discern. For this week, MONDAY and TUESDAY are the best days for metal and the Moon should eradicate the uncertainty prevailing in investors' minds. Wednesday appears directionless while astrological indicators mark Thursday to be a bad day for metal and the world in general. Metals should go down on Thursday but stabilize thereafter on Friday.

IMPORTANT NOTE: I shall send you a small note on Tuesday concerning your next course of action and whether to remain invested in the market with 20% or 50% to 80%.

SILVER:

The same prediction for gold as stated above is also applicable and valid for silver. I shall similarly give you further guidance concerning silver on Tuesday. Don't forget that I am predicting great rise in silver prices in last quarter in next year.

PLATINUM and PALLADIUM:

In previous newsletter I recommended buying Palladium on Friday but the Friday market was closed. You can buy a small quantity at the $210 level. The same applies to Platinum.

Note: I see indications that any time around Thursday, there will be a bad period for the world. We should pray for a smooth period for the world since we wouldn't want to make money from the rise of gold while other people are dying. We simply don't want that kind of money which is tainted by such a connection to blood or death. We therefore pray that the week ends without any evil being suffered.

STOCK MARKET:

Last quarter of 2002, I launched my third book "2003 World Prophecies" many people bought and I started receiving emails saying, Mahendra how this is possible because you saying Metals rise and same time Technology and stock market great bull-run in the year 2003? And currently we are in full grip of bear market. I said no arguments lets wait till 2003 end. Astrological calculation came true and metal as well as technology stocks performed well in the year 2003. Many investors missed the entire technology rally of 2003 because at the end of 2002 they been misguided by many experts bearish view when market was at bottom and I saw that bottom and I predicted "buy".

At present many might be thinking that, I write too much on metal and may have special love for metal that is why recommending to get-out from US Dollar and stock market. Here I must illuminate that my prediction are not based on love and hate. I just predict what I see. Like in 1996 I recommended my clients to buy technology and toward the end of 1999 advised them to get out.

After waiting for a long time for this date, 21 June 2004 is approaching nearer with the passing of each day. I think that I have adequately warned investment communities and the common investors on second half of 2004. If they insist on staying there and decide not to heed my repeated calls for caution, then that will now be entirely upon them. The impending stock market crash and the August metal rise predictions will finally help bestow credibility and respect to astrology as a subject. I know that many people are skeptical but the truth is that my experience with astrology to this day has been incredible. I can hardly believe it myself when I look back on my track record.

I still distinctly remember a day at the age of 19 in May of 1987 at summer time in India (Bombay). It was very hot and I was walking and sweating (I didn't have a car) with my first official predictions on the world written with my own handwriting in the Hindi language. I arrived at the local newspaper office and presented my story and I was thrown out of the premises. In the same week, similar incidents happened with other media houses who declared that I was not sane. They openly wondered how a person with no previous public track record could strut into a media house and claim to have a warning about important future occurrences of the world. At all events, they did not take me seriously.

The three predictions that I held in my hand that day in 1987 were my first official prophecies on paper. I expected these events to come to pass by 1991. They were:

1. Disintegration and final collapse of the USSR, fall of communism, collapse of the soviet economy and currency. I also foresaw the resultant widespread poverty and the downfall of Mr. Mikhail Gorbachev.

2. USA-IRAQ war. I foresaw the termination of the Iraq and Iran conflict.

3. The rise of OIL.

My persistence finally paid off when my predictions were published in a small Hindi magazine in July 1987. This was after making a deal with the magazine owner in which I agreed to read his astrological chart in exchange for the coverage. It was after all not a bad deal.

Please do not mistake me though. I merely try to present my vision to the world with no more intention than pass on information to key persons in world affairs so that they can in turn make the world a better place. I try to give direction to players in the financial market so that they can also share part of their proceeds with the needy in our society.

It is indeed sad that even when gold went from $255 to $433, I received very few emails from people who did something to support the needy. I think people were very busy in making money. However, it is apt to realize that if you do not share what has been granted unto you, it usually will go away through other means.

Anyhow, to cut the whole story short I am now waiting for the fulfillment of three important predictions. The first is a great rise in Metal prices, then a great stock market crash and finally the revelation of a mind-boggling scam involving the production and circulation of counterfeit currency.

CURRENCIES:

The Japanese Yen will soon become the leader in world currencies. This week the US Dollar will once again start declining from Wednesday. South African Rand will start losing its value more against Yen, Pound, Euro, Franc compare to US Dollar but still I hold the prediction on Rand to reach around $8.50 by end of this year.

OIL:

Prices will catch fire. Therefore buy oil on Wednesday.

OTHER COMMODITIES:

Coffee, Orange Juice and cotton are ready to move up.

WORLD EVENTS:

The world is on the threshold of entering into a terrible 42 DAYS cycle. The Iraq handover will take place peacefully during the reign of the blood and war planet, MARS.

THE MIDDLE-EAST PROBLEM WILL ESCALATE.

TERRORISTS WILL LAUNCH AN ATTACK IN EUROPE or BRITAIN.

There are also indications that some natural disaster is imminent. I shall however soon announce the dates for the fulfillment of these predictions.

Let us all pray together for the peace and harmony of this planet. Let us pray that our leaders (especially extremist politicians and religious leaders) will embark onto the right path and steer the world towards peace. It is only through love and peace that we can transform the current discord in the world to tranquillity and harmony for the good of everyone. A HAPPY NATURE CAN PROVIDE US WITH EVERY THING THAT WE NEED. We should therefore believe in nature because we are creations of nature and shall all end up in it. Religion and politics have only served to divide the world.

Finally, let me state that compared to Iraq, the African continent is undergoing much more pain. The agony of the suffering millions in Africa is clear in their eyes and I wish that the world could send more assistance to rescue the people enduring the most distress instead of focusing on WAR and bloodshed. IT IS AFRICA THAT NEEDS ALL THE SUPPORT AND REBUILDING IT CAN BE GIVEN, NOT IRAQ (Iraq has enough oil for the purpose).

Bill, you found me and got me on your site first, till than you have supported me and my work though few time on short term prediction I came off track but you had a great faith in me. I came to know that one of your subscriber doesn't want to read my view and you know my nature that I don't want anybody to feel angry or upset because of me; I don't want to heart any human soul, So for time being I am quitting from Le-metro.

Thanks & God Bless
Mahendra Sharma
http://www.mahendraprophecy.com

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COT Gold Report - June 14, 2004

http://news.goldseek.com/COT/1087247722.php

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http://www.thestar.com/NASApp/…50072197&col=969048863851

Jun. 15, 2004. 01:00 AM

China fuels worldwide mining boom
Earnings double with big jump in commodity prices

Big winners include Canadian firms, report says

STEVEN THEOBALD
BUSINESS REPORTER

China's roaring economy is helping to fuel a worldwide mining boom, and Canadian firms are among the winners, a new industry survey suggests.

Thanks to a sharp rise in commodity prices since the beginning of 2003, spurred by strong demand in Asia for raw materials, the world's 30 largest publicly traded mining companies doubled their net profits last year, according to a study released by PricewaterhouseCoopers.

The group of firms, including seven from Canada, posted earnings of $11.5 billion (U.S.), compared with $5.8 billion the prior year. Revenues increased 18 per cent, to $110.3 billion.

Zitat

"The industry has had a hard ride over the last decade," said Paul Murphy, a partner in PWC's Canadian mining practice. "That seems to have completely reversed itself in the last 12 to 18 months."

Buoyed by high prices for metals, mining companies are again in expansion mode, Murphy said, noting that the average return on equity increased to 10.5 per cent last year, up from 6.7 per cent in 2002.

Total market capitalization, the value of all outstanding stock, in the mining industry stood at $390 billion as of March 2004, nearly double the level 18 months earlier, the study said.

Canada accounts for roughly 15 per cent of that total, behind only the United Kingdom and Australia.

The biggest risk ahead is a downturn in the global economy, in particular China's ability to smoothly cool its economic expansion to more sustainable levels.

Zitat

"If they can land China softly, and you see the Indian economy surge and the American economy move along, you are going to see tremendous prices for copper and nickel, and I'd guess gold as well," Murphy predicted.

That said, the report cautions "history has shown us that bringing too much new production on stream in response to such a favourable environment has exacerbated the start of the decline of the global cycle."

In other words, prices will fall if too much product is brought to market.

The Canadian dollar, which soared 21 per cent in 2003, did hurt profits at Canadian firms. While revenues are collected in U.S. dollars, a significant portion of costs, including labour, must be paid in Canadian dollars.

But the increase in commodity prices has more than offset the impact of a higher Canadian exchange rate, Murphy said.

Miners in South Africa, on the other hand, are struggling with their beefed up currency, the rand, which gained even more than the loonie against the greenback, he added.

Zitat

"It is hurting the industry in South Africa right now," he said. "That may have some long-term effects on the supply of gold."

The study also looked at safety records. China was by far the deadliest place to be a miner. More than 6,000 workers lost their lives there in 2003.

Other countries were examined using 2002 data. In South Africa, one miner died on the job for every 2.9 million man-hours worked.

In Canada, one person died for every 4.8 million hours worked.

Australia is the safest place for miners, with one person dying for every 33 million hours worked.

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http://abcnews.go.com/wire/World/ap20040615_783.html

Iraq Pipeline Explosions Cut Oil Exports
Two Explosions on Pipelines in Southern Iraq Cut Oil Exports by Half in South, Oil Company Says

The Associated Press

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BAGHDAD, Iraq June 15, 2004 — Explosions ripped through two pipelines Tuesday in southern Iraq, cutting oil exports from the south by half, the Iraqi South Oil Co. said. Officials blamed Saddam Hussein loyalists and al-Qaida for the attacks.
Firefighters were able to control the fire that broke out on pipelines in the Hamdan area just north of Faw, but the damage was so extensive that pumphing had to be halted, said South Oil official Samir Jassim.

Zitat

"We hold Saddam followers and al-Qaida responsible for the two attacks," Jassim said.

The first explosion early Tuesday set the pipeline on fire and was followed later by another blast. The two pipelines export crude oil from a pumping station called Zubeir 1 to a crude oil depot in Faw, 40 miles southeast of Basra.

The blasts cut exports from the south by one half, Jassim said.

Contracts of U.S. light crude for July delivery are up 49 cents at $38.08 per barrel in New York. July contracts of Brent crude are up 8 cents at $35.57 in London.

The Iraqi attack has been responsible for "all of the movement off the bottom" by oil prices in Tuesday's trading, said Paul Horsnell, the head of energy research at Barclays Capital in London.

Zitat

"If oil flows to Gulf export terminals have been interrupted, there's not mush storage space out there for tankers to continue loading for long," Horsnell said. "The Iraqi Oil Ministry had aimed at exporting 2 million barrels a day in June. This looks unlikely now."

Horsnell said the Iraqis would be lucky to average 1.5 million-1.6 million barrels per day in exports from the south in light of this attack.

Coalition officials fear that insurgents will step up attacks on infrastructure targets prior to the June 30 transfer of sovereignty to an interim government to undermine public confidence both in the U.S. occupation authority and the new regime.

Iraq's oil pipelines are frequently attacked.

In May, a main southern export pipeline was set ablaze in the Faw peninsula, stopping the flow of crude oil through one of the lines feeding the Basra oil terminal, a key export point.

That attack forced Iraq to reduce exports to 1.1 million barrels a day from the south at a time when oil markets are highly concerned about tight supplies.

photo credit and caption: Iraq's Interim President Ghazi al-Yawer walks with an unidentified foreign bodyguard after addressing a news conference in the Iraqi capital of Baghdad June 15, 2004. Yawer told journalists that the United States is "very keen" in handing over the ousted leader Saddam Hussein to the Iraqi government for trial. (AP Photo/Ceerwan Aziz/POOL)

Copyright 2004 The Associated Press.

Der Goldreis ist nicht gefallen, er ist gestiegen!

Mal ehrlich, warum sollte er auch fallen?

Gruss

ThaiGuru

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