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

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September 21 - Gold $408.30 up $3.30 – Silver $6.34 up 11 cents

Gold And Silver Pop, Shares Soar/GATA ARMY Gradually Whipping Gold Cartel Butts

Zitat

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists." Ernest Hemingway

It was one of the rarest of the rare this morning. The euro was up almost a full point vis-à-vis the dollar and gold was called $1.60 higher. However, demand was so pent-up and the shorts unnerved enough that gold came in $4 to $5 higher. Coming in so much higher over the call is most unusual. The Gold Cartel was surprised and not ready for the initial surge in buying. Normally, when a market acts like this, it will sell off and then surge, making new high after new high.

Gold, on the other hand, is not allowed to trade freely, as we all well know. After extremely sharply higher openings, the word goes out from headquarters to Gold Cartel operatives to sell what they have to in order to cap the price for the rest of the day. This is why gold almost always makes its highs in the early going, contrary to almost every other market traded in the world.

The above was written a half-hour after gold opened. The Gold Cartel made sure the trading action for the day followed their script to the tee as it closed on the lower end of its opening range and never came close to challenging the opening high. Now the cabal forces will spend the next few trading sessions attempting to close the gap left on today’s open. Although, they might have their hands full:

14:15 FOMC announces 25 bp increase in fed funds rate to 1.75%
FOMC maintains language indicating it can raise rates at a "measured" pace. Fed Board votes to raise discount rate by 25 bp to 2.75%.
* * * * *

14:23 Follow-up: dollar makes sharp move lower in reaction to FOMC
Euro/dollar now quoted at $1.233 from $1.225 earlier. Much less volatile moves in stocks and bonds.
* * * * *

After the Fed announcement, as noted above, the dollar was hit hard and the bond market made new contract highs, closing at 113, up another 11/32. The dollar fell .87 to 88.31 while the euro took off to 123.12 at 3 EDT, up 1.50.

The dollar broke down out of a short-term wedge formation, right into support, which may or may not hold:

http://futures.tradingcharts.com/chart/US/C4

Time and time again after market reactions such this one, we have seen the PPT come in the next day, or days, to stabilize the situation. They will most likely try again tomorrow to regain "order." However, if the rest of the world says "nada," they might not be able to pull it off. What is pivotal is for spot gold to close above $412. This would take out consistent Gold Cartel resistance of the past four months.

The gold open interest barely changed, gaining 57 contracts to 252,242. Funds were good buyers today with the cabal doing the capping; therefore, we should see a decent rise in the open interest tomorrow.

Silver was actually firmer than gold by day’s end, closing on its highs. The silver open interest fell 175 contracts to 82,119.

New lows for the Comex silver stocks:

They fell 547,052 ounces to 109,371,782.

The CRB surged, closing above 277. Crude oil continues to pile on gains with October crude oil finishing the day at $47.10 per barrel, up 75 cents.

November CRB breaking out to the upside from a very defined wedge formation

http://futures.tradingcharts.com/chart/RB/B4

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The John Brimelow Report

Outflanked in the East?

Tuesday, September 21, 2004

Indian ex-duty premiums: AM $7.06, PM $6.49, with world gold at $404.35 and $406.30. Lavish and adequate for legal imports. The rupee closed at a 10 week high today (around 7 am NY time – e.g. before the $US’s post-data weakness. The rupee seems not to trade much out of India business hours).

With the Indian stock market reaching a 4 ½ month high today (having risen 11% in the past month) and money starting to pour in from abroad, it appears India is reviving the financial asset boom cut short by the fall of the business-friendly BJP regime in May. Reuters carries a story about offshore loans to Indian firms being likely to double this year:

"An increasing appetite for Indian assets among foreign investors…has helped volumes in offshore loans to shoot up."

[B]Foreigners acquire Indian paper; Indians acquire foreign gold. Gold Bears are in danger of being outflanked here.[/B]

Gulf premiums, as derived from Standard London’s web site, appeared to tolerate gold’s post 8-30 am move quite well. Oil’s flirtation with $47 no doubt helped.

TOCOM on its return ran up the platinum market, but remained indifferent to gold. World gold was 50c below the NY close at the end; the active contract was 9 yen above Friday. Only the equivalent of 10,028 Comex lots traded, (9% above Friday): open interest was static (- 76 Comex equivalent). (NY yesterday only traded only 15,048 lots; open interest rose by 57 contracts.)

"…bullion dealers hit the pause button…" Standard London correctly says of Monday’s trading. Not so today: by 10 am estimated Comex volume was 18,000 lots, more than the entire previous day. This sudden explosion of volume began to look like the extraordinary Friday in August (19th) when gold broke out above $410, only to find a seller willing to pour 50,000 lots into the market during the last couple of hours, to hold the gold price static. This time the buyers, no doubt wisely, stopped.

A gold optimist might think they can afford to do so because the India and Middle Eastern physical buyers will eventually turn this line of defense.

Anyone who thinks the Middle East is about to quiet down would do well to consider the implications of

http://news.bbc.co.uk/1/hi/pro…correspondent/3675538.stm

UBS has done some interesting recalculations on their gold price model:

"…we undertook an update of our correlation work that compares the dollar gold price, the EURUSD exchange rate and the size of the speculative position in gold…the model predicts that gold should be trading at about $394/oz or about $10/oz below the current level. Clearly some other factor is at work; there are a number of possibilities - perhaps OTC related speculative buying (which is not captured by the COTR), strong physical demand or central bank activity (less selling than normal or perhaps more buying). While it is hard to judge exactly what is behind this small premium, it is interesting nonetheless."

Of course, all factors could be operative, but the premium data presented in these bulletins surly establish that the physical market is not the least.

Mitsui has placed an advertisement in the Mining Journal with some interesting data. Although this is far from the intended point, it is undisputable that the rise and decline of the Mine hedge book 1983- 2004 inversely tracks the fortunes of the $US gold price quite well.

JB

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CARTEL CAPITULTATION WATCH

The script for the US stock market to rally after the Fed announcement came about in perfunctory fashion. The PPT knows how important it is for the market to show its approval of the Greenspan’s assessment of how all is wonderful out there, especially after falling yesterday.

The DOW gained 40 to 10,245 and the DOG lifted 13 to 1921.

Meanwhile the US economic news remains weak:

07:46 UBS chain store sales index (1.1%) in 9/18 week vs +0.2% prior week
Note that sales in the 9/18 week might have been affected by Hurricane Ivan.
* * * * *
08:30 Aug. Housing Starts reported 2M vs. consensus 1.93M; Building Permits reported 1.952M vs. consensus 1.985M
Prior Starts revised to 1.988M from 1.978M; Permits revised to 2.066M from 2.055M.
* * * * *

Investor Confidence Index Declines to 85.3 in September

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sept. 21, 2004--

State Street Marks First Anniversary of the Launch of Industry's
First Quantitative Indicator of Professional Investor Behavior

State Street Associates, the research unit of State Street Global Markets, released today the results of the State Street Investor Confidence Index(SM) for September 2004. State Street Global Markets is the investment research and trading arm of State Street Corporation (NYSE: STT).
According to the September index, investor confidence decreased 1.2 points to 85.3 from August's revised reading of 86.5.

-END-

WASHINGTON, Sept 21 (Reuters) - Fiscal conditions continue to deteriorate for U.S. cities despite economists calling an end to the nation's economic recession in 2001, a report from the National League of Cities said on Tuesday.

The survey, which questioned finance directors in 288 cities, found that 63 percent of cities were less able to meet financial needs in 2004 than in 2003. About 61 percent of cities said they expected 2005 to be tougher than 2004.

-END-

GATA’s Mike Bolser:

Hi Bill:

The Federal reserve added $1.5 Billion in permanent open market operations and $4 Billion in temporary operations today September 21rst 2004, an action that caused the repo pool to dip a bit to $57.614 Billion. However that move was insignificant in the light of the large permanent operation of $1.5 Billion. Fed experts suggest that the perms are 9X more effective than temps so today was yet another BIG repo day in a series of BIG days.

Steep Pool Rise

Note the steep rise in the repo pool's 30-day moving average red line. Only one other time in the series was it this steep (Dec 2003). The DOW responded upward then but it sure isn't now, where it remains moribund at 10,210 (11AM). The pool's ma now is maintaining its upward trajectory longer than it did in Dec 2003 so we see a real determination to the Fed force application.

Bill Gertz this morning in the Washington Times tells us about a pending terrorist attack. Did they print up a program schedule?

Interest Rate Hike Expected

Two weeks ago I suggested that long interest rates were going up in the Ten-Year to say 5.30% or so. Thursday they hit 4.08 on the way, however, not moving up as fast as originally thought. My proprietary moving average (pma) for Ten Year bonds was a good predictor of Fed progress ( Or the lack thereof) in holding their "line". I can also see a confirming drop in my pma for the MCDI dollar index AND a rise in the PM Fix pma. All of these things are related and they all tells us that the fed is being forced to react to rising prices.

The Fed will raise the lower end of the yield curve today thus attempting to flatten the curve from the low end. By any other name this juggling is an attempt to hide inflation and take demand away from gold.

It won't work. Argentina's Central Bank and its bullion buying spree is telling us that much in spades.
Mike

Chuck checked in last night with the right call:

Bill:

Reading about all of the caution by the mainstream "experts" only adds to my sense that the break out is coming very soon. There are too many negatives out there to keep this surreally quiet gold market. The fact that we have had only one good close in almost 3 weeks is a condition that has usually preceded strong moves up.

I believe that the world is coming unglued here and we are comatose. If I see only more ad or article on how to make a zillion in real estate, I will move to Antarctica although their real estate has probably tripled in the past 6 months. Think back to the Dot com-high tech ads in 1999 and look at real estate today. No difference.

I didn't realize how sharply the grains and lumber have fallen recently. If copper breaks here, the squeeze will be on. We are heading for a panic with only a few aware of the situation. We should see some interesting action either this week or after Yom Kippur, the day of atonement and mourning that point to a future and climactic event perhaps not that very far off. Chuck

Houston’s Dan Norcini:

Hey Bill:

I was just going over the FOMC's statement released today and couldn't resist giving a translation of this latest swill they issued. Watching the bond market rally and the stock market rally while the dollars get blasted and crude defies gravity is simply surreal. This coming on top of the many earning warnings we have been receiving of late. What a la-la land these guys live in. Anyway, I put my interpretation in blue for what it is worth- Consider Alan Greenspan the speaker!
Best,
Dan

WASHINGTON, Sept 21 - The following is the text of the Federal Open Market Committee's statement on interest rate policy issued at the close of its meeting on Tuesday:

"The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1-3/4 percent. The Committee believes that, even after this action, the stance of monetary policy remains accommodative (Consumers repeat after me - SPEND, SPEND, SPEND, PLEASEEEEE SPEND; failure to do so will summon the avenging ghost of Keynes who will haunt your nights and torment your days)

and, coupled with robust underlying growth in productivity (Productivity means business dumps workers here at home and hires them cheaper abroad. Those poor chumps that are left get the privilege of doing twice the work for the same pay. And those are the lucky ones - the really unfortunate ones get to do twice the work for less pay! Isn't America a great country or what?),

is providing ongoing support to economic activity. (If that's not enough, we have lots of repo money to play with. Bernanke and I are going to buy Boardwalk and Park Place and put up some hotels for kicks. We already own all the railroads and utilities.)

After moderating earlier this year partly in response to the substantial rise in energy prices (DON'T WORRY - BE HAPPY; Crude prices will soon be back down at $30.00 bbl. Hey, wait a minute - someone tell Mushinksi to change the quote board at NYMEX - the damn idiot put a "4" in front of the crude price on the same day we issue our report. How many times did you tell him that was supposed to read "37/bbl"; not $47.)

output growth appears to have regained some traction,(One of you guys had better get out and lock in the wheel hubs; I think we are going to need 4 wheel drive on this one. I think the real wheels are slipping. Hey Ben, maybe you should call that buddy of yours, you know, the one that flies that chopper. Ask him if he has a good tow chain.)

and labor market conditions have improved modestly. (Well what did you expect? I promised Davenport in accounting a first rate steak dinner if he could get those job numbers looking good - Is that guy good or what? I once saw him take a piece of chewing gum and divide it up for a dozen people. Each one of them swore he had the bigger piece. The guy is amazing.)

Despite the rise in energy prices, inflation and inflation expectations have eased in recent months. (All of us are proud to say that we have been on the Adkins diet and watching our carbs very closely - we have lost an average of 2 inches in our waist lines. What other kind of inflation are you talking about?)

The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters to be roughly equal. (We ain't got the foggiest idea of what the hell is going on out there but damned if we are gonna let on about it!)

With underlying inflation expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. (My boss told me if I raised any more and tanked the stock market that all of our names would be included in next week's unemployment report. I told him that I put my foot in my mouth and got everyone to lookin' for a rate hike and that if I didn't do it, my name would be mud. He didn't say anything. He just went over to the shed and fired up that new John Deere down at the ranch in Crawford and showed me how it could sling mud all the way across the pasture when he stuck it high gear. Point made.)

Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.(It all depends on the meaning of the word, "stability". Shucks - I figured that housing prices doubling in 2-3 years is pretty stable. After all, those houses are sitting on a concrete slab. That's about as "stable" as anyone can really expect, isn't it? You gotta admit, gasoline prices have "stabilized" up near $2.00 gallon. And look at the price of copper - it's "stabilized" near $1.32/pound. Geesh - what do you want from us already?)

-END-

Gold Cartel apologist Jessica Cross is at it again:

21 Sep 2004 15:02

ANALYSIS-Europe's central banks seen ready to offload gold

By Veronica Brown

LONDON, Sept 21 (Reuters) - Europe's central banks are set to dispose of every ounce of gold they can under a new five-year sales pact, even though some of their plans have yet to be declared, analysts say.
The European Central Bank Gold Sales Agreement, which comes officially into being next week, raises the limit on gold sales by its 15 signatories over the next five years to 2,500 tonnes from 2,000 in 1999-2004 previously.

"We know that there's been quite a lot of comment saying that the quota won't be filled. We feel that it will be filled," Jessica Cross, chief executive of the Virtual Metals consultancy, said.

"Why would they have increased the sales unless they were intending to fill them?" she added.

The new pact negotiated earlier this year replaces one struck in 1999 to help stabilise prices when gold was languishing below $300 because of the stronger attraction of other investments at the time.

The new, higher limit on central bank sales was seen undermining gold's role as a financial instrument, but the price was currently buoyant above $400 an ounce, near 15-year peaks reached earlier this year on dollar weakness.

CONFUSION

Some 1,700 tonnes of the planned sales have come to light so far, but much confusion surrounds how and when some major sellers will act.
Germany, the world's second biggest holder of gold with reserves in excess of 3,000 tonnes, has yet to say whether it will sell.
The Bundesbank said earlier this year it had secured an option to sell 600 tonnes under the agreement, but its president Axel Weber said earlier this year it would leave a decision until September.
France, just behind Germany with bullion reserves of more than 3,000 tonnes, said it planned to sell some 500 to 600 tonnes, with proceeds to be invested in interest-bearing instruments.
The profits from those investments would then be used for the state budget.

The German central bank had similarly proposed that its gold sales be put into an interest-bearing account.

Bank of France governor Christian Noyer was quoted as saying in July that the bank was not ready to sell some of its gold to finance outright the French national budget.

Another major potential seller, Italy, said last week it had no plans to sell its gold reserves.

HSBC metals analyst Alan Williamson said he doubted the full 2,500 tonnes of gold would be sold.

"Part of it is flexibility -- things do change. Maybe one of the problems with the first accord was that a lot of people got their sales in very quickly. Maybe one or two central banks out there would prefer a bit more flexibility," he said.

WILLING SELLERS

Frederic Panizzutti of MKS Finance said willingness to sell was taken into account when the agreement was thrashed out.
"Unless there has been a big change I would expect that there would be enough supply into the agreement," he said, adding that more details might emerge at the International Monetary Fund meetings next month.
Barclays Capital analyst Kamal Naqvi said: "We only have 1,700 tonnes or so accounted for thus far -- but that doesn't mean the 1,700 tonnes has to be spaced out fully over the five years."

-END-

More and more gold press is surfacing which is neutral to bearish for the gold price in the years to come. None of the continuous lame commentary deals with the real gold market:

Elko Daily Free Press

Expert: Gold to stay near $400 mark

By ADELLA HARDING, Staff Writer

INCLINE VILLAGE - Gold prices should remain in the high $300s to the low $400s for the near future, mining industry expert John Dobra said Saturday.

"I think they will mirror oil prices for a while," the director of the University of Nevada, Reno, Natural Resource Industry Institute said in an interview at the Nevada Mining Association convention…. – END-

For those of you who missed last evening’s GATA dispatch from Chris Powell, this is big news:

Blanchard & Co., the New Orleans coin and bullion dealer, says it will file tomorrow another anti-trust lawsuit against Barrick Gold and J.P. Morgan Chase over their alleged manipulation of the gold market.

The new lawsuit will be a federal class action that intends to build on the first Blanchard suit so that all gold investors in the United States since 1998 might recover losses caused by the Barrick-Morgan Chase conspiracy.

Blanchard CEO Donald W. Doyle Jr. made the announcement today in an interview with GATA.

Blanchard's first lawsuit, which has entered the evidence-gathering "discovery" phase in U.S. District Court in New Orleans, is expected to go to trial in April 2005, Doyle said. He added that Barrick and Morgan Chase are not being forthcoming in discovery and that Blanchard has filed a motion asking the court to compel them to produce certain evidence. Still, Doyle said, he is confident that evidence already obtained has given Blanchard a
strong case……

***

Reading between the lines, this new law suit is extremely significant because it tells us the material Blanchard has been able to review during the discovery process is powerful enough to give them enough confidence to launch a second suit. The costs involved in launching this second suit, as well as in the first one, are enormous. They would not be going ahead with another one if they didn’t believe what they have already found in the discovery process wasn’t sufficient to merit these extensive new expenditures. This spells big trouble down the road for The Gold Cartel.

I can tell you what this means from experience and knowing of others who looked into this exact kind of lawsuit. The lawyers all ran to the hills, fearing they couldn’t overcome the powerful forces against them. They all refused to work on this case on a contingency basis. CEO Don Doyle and Blanchard are to be congratulated for their tenacity and effort to put the bad guys in their place and win back ill-gotten money for the little guy – money which was stolen from them by The Gold Cartel.

It is time again to go back in time and focus on Barrick and JP Morgan Chase. One, because of the new court case and two, as a reminder of what the GATA camp did 4 years ago which helped bring Blanchard to where they are now. The snooty mainstreamers in the gold world, who could care less about what GATA and Sprott Asset Management have done, makes me want to puke all over them. The gold establishment world is mostly on the side of the price manipulators, are a part of the anti-gold forces, and are beyond hope when it comes to dealing with facts. Truth means nothing to these deadbeats. Only kissing the butts of the other dullards in the gold establishment world and being invited to the right parties matters to the lightweight bums. Yes, we all know that by this time.

However, the response by many of the smaller gold companies is particularly galling. They forget what it was like years ago when their share prices were trading at bankruptcy levels. Many were trading at less than 5-10 cents US. It was back then that the GATA ARMY was busting its tails to take on Barrick, the other big hedgers and the likes of JP Morgan Chase. Gold was trading between $252 and $300 in those days. How much effect GATA and its ARMY had on what has transpired with the big hedgers, the cabal, and the price of gold since then will always be a matter of conjecture.

Yet, the MIDAS diary tells it like it was. As a reminder to Vet Café members and to bring new Café members up to speed on this subject matter, I did a Café Search using "Oliphant" for the year 2000. Oliphant was Barrick’s arrogant CEO at the time. The Search results follow below and shine a light on "what a difference a day makes," or almost a half a decade in this case.

To point out what was going on then compared to what is going on today should bring tremendous satisfaction to us all. We are slowly whipping the cabal’s butts. During the last four plus years:

[B]*Oliphant was fired.
*Barrick has foresworn hedging and did so in abrupt manner last fall when their new CEO left London unexpectedly for New Orleans.
*The company now has two major suits against them for manipulation of the gold price.
*JP Morgan Chase, representing some other bullion banks in the cabal, has its hands full in New Orleans Federal Court.[/B]

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CARTEL CAPITULTATION WATCH II

First a little background:

In the early fall of 1999 GATA led a campaign against the big hedgers, focusing on Barrick gold. It began at the Denver Gold Group Conference where we bombed the attending CEO’s with faxes decrying what irresponsible hedging, at the instigation of The Gold Cartel, was doing to the gold price and gold industry. Prohibited from personally attending the conference itself, I crashed the affair, went to various events associated with the conference, and popped up wherever I could. GATA supporters bombed the CEO’s with faxes at the hotel where they were staying, which annoyed most of them as they had to pick these faxes up and read part of them all. The most inspiring was by famed novelist Arthur Hailey, who announced he sold all his Barrick shares to buy those in an unhedged gold company. GATA announced its plans at the last moment, surprising the attendees. We called it "TORA TORA TORA!"

*On to the following year. I have edited these down as best I could and still bring the important aspects of what was occurring at the time to your attention:

February 10, 2000 - Spot Gold $316.50 up $10.10 - Spot Silver - $5.35 unchanged

Newmont Mining gained 3/4 of a point, but Barrick Gold could not even close above unchanged and finished at 18 7/16. During the summer, Newmont and Barrick were trading at the same price.

I was informed today that Randall Oliphant, Barrick CEO, blamed GATA for his companies poor stock performance. From the podium at a New York presentation today, he cited the "conspiracy forces" as the main reason that Barrick stock is performing so poorly.

February 14, 2000 - Spot Gold $308 down $2.60 - Spot Silver $5.22 down 8 cents

This past week Barrick Gold CEO, Randall Oliphant, and other Barrick executives did their dog and pony show in New York trying to pump up analysts and investors about how brilliant they are. Their Chairman, Peter Munk, even took the time to do an interview with Janet Whitman for Dow Jones.

Barrick Gold is making the rounds for a reason. Their share price is stinking up the place.

New York Times - February 13, 2000

"This investor preference is seen in a comparison of the recent performance of Newmont Mining, which is not a hedger, and Barrick. Since the gold rally began in August, Newmont stock is up 24.4 percent. Barrick, which had a guaranteed price of $370 an ounce this year, is down 1.7 percent."

Café members know that Midas and GATA have urged investors for 8 months now to dump Barrick stock as a protest to their EXCESSIVE hedging strategies that were hurting so many in the gold industry. We hoped that their stock would underperform so other big hedgers would notice and do something about their own hedging to prevent their stock price from suffering the same fate. It was even hoped by us that Barrick would finally get its act together and buy back their forwards.

Whether we had anything to do with what has gone on in the gold industry about reducing forward selling is anyone's guess. We would like to think we did make some kind of difference, of course. What I do know is that that the publicity generated by Café member, Arthur Hailey (the great prolific novelist who wrote such blockbusters as Hotel and Airport) did cause many investors to unload Barrick shares - we know one who sold 3 million shares. This all occurred because Arthur responded to a GATA plea to protest Barrick's hedging policy by faxing Barrick's executives at the Denver Gold Conference in October. He did just that we had hoped for by telling them in a letter that he had sold all his Barrick Gold stock that he had held for many years. We put up his letter in the Café.

Word got out and the press was all over it.

In the spring of 1999, Barrick CEO, Randall Oliphant, told a popular New York journalist that the GATA folk were a "bunch of nuts." This past Thursday at a presentation to loyal Barrick shareholders, press and analysts, he told everyone from the podium that "the only problem with Barrick's stock was the conspiracy crowd."

I guess he could not say those "nuts" in public.

Now, I have a question for Mr. Oliphant. What exactly did you mean by that statement?

Are you inferring that investors have analyzed the gold market and have come to the conclusion that GATA is right about the manipulation of the gold market, thereby staying away from buying the shares of your company?

A bunch of "nuts" could do that?

Well, maybe they can! Financial Times columnist, Barry Riley, may be most widely read and respected financial journalist in the United Kingdom. That is what London's Marshall Auerback tells me.

The most respected financial journalist, who writes for the most respected financial newspaper in the world. That is what we have here, Mr. Oliphant.

While many of you read the FT article, I wanted to highlight some of what Barry Riley (not related to the "Hannibal Lecter" Goldman Sachs commodity honcho, Riley) said in the article as it relates to Barrick Gold and the manipulation of the gold market.

Financial Times - London - February 12

The long view - The battle over bullion

Conspiracy theorists have a field day as gold edges higher again, writes Barry Riley

"All the attempts over the years to downgrade gold to the status of a routine commodity such as, say, zinc or aluminum have failed. This week, the gold price has again looked quite frisky at above $300 an ounce. The sector was also enlivened by Barrick's refusal to abandon its hedging programme and by the sad plight of Ashanti Goldfields, which is teetering on the edge of collapse after losing a court action in Ghana…. "$400 in 1996 to $250 last summer, has encouraged elaborate conspiracy theories. Now, though, the gold bugs are getting excited. The bullion price, they claim, could be on the edge of a break-out; many years of oppression by the central banks and their collaborators might be about to end. Gold, say the conspiracy theorists, could be about to reclaim its leading position among precious metals. There is, after all, plenty of action in platinum and palladium, which have both risen in price by about two-thirds since last summer…..

"The gold bugs of GATA (it stands for Gold Anti-Trust Action) have an entertaining web site where the conspiracy theory is debated endlessly. GATA blames the US government: it has more or less accepted the Federal Reserve's pleas of innocence but thinks the Treasury has been operating heavily through the Exchange Stabilisation Fund, aided by big bullion traders such as Goldman Sachs….

"When mining companies behave more like hedge funds than metal producers, they actually can be bankrupted by a rising price. But, allegedly, the US Treasury then intervened on a bigger scale to limit the damage. The bullion price hovered around $280 an ounce for several months but recently has pushed higher again….

"The reasons, as always, are obscure. But some of the mines are changing or abandoning their hedging strategies and one or two might even collapse, while bullion banks are running some very dangerous positions. The market could be vulnerable to a speculative attack……

"The gold manipulation might well have started as a minor smoothing operation that got out of control. For central banks to lend out their gold reserves has seemed a promising way to earn modest revenues from an otherwise unrewarding asset. But the speculative institutions that borrowed it realised that, if they could drive down the bullion price, they could make useful profits from short sales…..

"The miners, meanwhile, decided they could protect their profits by selling forward for future delivery at roughly today's price - although now they are starting to realise that a long-term downtrend in the price cannot possibly be in their interests, quite apart from the dangers of an incompetently-run hedge book vulnerable to enormous margin calls if the gold price takes an unscheduled upturn…..

"That the US Treasury apparently has helped to mess up the gold market is perhaps not very surprising when it has plunged even its own domestic bond market into near chaos. Last week, Larry Summers, the Treasury Secretary, effectively lowered long term bond yields at the same time that the Fed was raising short term rates. He did this by announcing he would focus buy-back activities on the 30-year bond….." End.

Would you not say that he has listened to what GATA has to say and that he tends to agree with us. His commentary was almost a casual, factual tone. This is a stunning development. How can Randall Oliphant and their PR crew go around denigrating GATA without denigrating this most highly regarded of financial journalists?…

Oh yes, after all Barrick's rah rah of last week, their share price closed today at 17 1/2 down 13/16.

May 23, 2000

Tomorrow, I am also to have lunch with this New York GATA supporter who is in town with a Board of Governor of the New York Stock Exchange. They both want to hear first hand of GATA's latest findings.

Today, I met with a friend of Congressman Dick Armey of Texas, the House Majority Leader. This came about as a result of another GATA supporter. This well heeled Texan, who also has contributed to GATA, was fascinated, took the "Gold Derivative Banking Document" and the Roll Call open letter and said he was going to bring it to the attention of Congressman Armey immediately.

Meanwhile, back at the ranch I received the following email over the weekend from yet another GATA supporter. (During a subsequent phone call, I learned that CEO Randall Oliphant was at the head table with Barrick Board Members, Howard Baker (former Senate Minority Leader), Brian Mulroney (former Canadian Prime Minister), etc):

"Dear Bill:

On Tuesday at 9:50 am about 10 minutes prior to the shareholders meetings of Barrick, Randy Oliphant who had already taken his seat at the head table, got up and proceeded down the isle and he stopped in front of me. He replied "Hi, I'm Randy Oliphant." I replied that yes I know who he is. I then said my name is H. O. He then replied Oh….have been trying to meet with you. You are part of the GATA organization, are you not? I said yes.

He replied that Barrick would like to meet GATA to hear their views. I responded that I would contact you (Bill Murphy) and they said that would be great. After the meeting, I was introduced to the director of Investor Relations, a Mr. Richard S. Young, and we then had quite a conversation about hedging. It was there that I learned that Barrick not only hedged gold, but also hedged lease rates and the USA for 2 years hence. They have covered their position mathematically such that they would never suffer if gold skyrocketed. Then, I mentioned about their 6.8 million call option and that I told him I knew who is counterparty was--it was Morgan. He didn't even blink a eyelash. He wanted to know how we knew. I told him Morgan had derivatives outstanding of 38 billion and were the only bank with great exposure beyond 1 year. He was quite surprised that we knew. He asked me my feeling as to why the price of gold is down. He thought that I was going to say central bank sales but no-I told him that it was the derivative market that is drowning gold. He then invited me and our group (GATA) to discuss the above with them.

That is the sequence of events." End.

This is getting stranger and stranger. Why did CEO Oliphant track H.O. down? H.O. told me that the room was set up for 2,000 people and he was halfway back in this big room. I have sent Randall Oliphant material over time and he has never responded. How hard would it be to get a hold of me?

July 23, 2000 - Spot Gold $279.80 up 40 cents - Spot Silver $4.93 down 7 cents

Gold companies have historically been pricey P/E wise compared to other corporations in other industries. The reason that has been so was because the shares of the gold companies were proxy like call options to many investors on the price of gold or very leveraged plays on bullion. When the price of gold shot up, the shares of the gold producers advanced at much greater percentages than bullion itself. In the past, investors were willing to pay a P/E premium for the opportunity and expectations of making extraordinary gains during a gold bull market.

Just 6 months ago, Newmont Mining was trading around 7 points premium to Barrick as Barrick Gold was being pummeled with negative stories about their hedging policies. Newmont was the main beneficiary of institutional investors not really knowing what Barrick's hedge exposure was a la Ashanti and Cambior. Institutional gold money flowed their way.

It was a perfect time for the likes of Newmont and Homestake to take leadership roles in the gold industry and get the truth out there of why the price of gold was not allowed to rise for so long and when it did, subsequent to the Washington Agreement announcement, why it was beaten right back down again. They chose not to do so and their shareholders are paying the price today. Unfortunately, I have received many emails from those shareholders over the past 6 months expressing disappointment over their lack of enthusiasm of the executives of these firms to review GATA's evidence of gold price suppression and to discuss what can be done about it.

While practically no one came out with a bearish gold story at the recent FT Gold Conference in Paris, almost no one came out with a bullish gold story either. The theme was that gold is stuck at these prices. It has been very clear why that is so for well over a year now. The gold pool cabal cannot let gold rise because their gold loans go under water above $290 (gold borrowed at $290 and paid back at $350 is an expensive loan). This same crowd does not want the price of gold too much lower either as it brings howls of pain from market participants. The manipulation of the gold market is tolerated, but only to a point. $250 gold is beyond that point.

One could make the argument that Homestake and Newmont won't take on the real gold issues because of fear of U.S. government retaliation down the road; ie, mining permits canceled, negative court rulings regarding environmentalist concerns and so on. For a time I thought that was understandable to some degree. No more! By not getting into the real gold issues of the day, their stock prices are slowly drifting into oblivion. The "bad guys" can only be defeated if the truth becomes more visible to investors, regulators and the big gold shorts themselves. What would $400 gold do to the share prices of Homestake and Newmont? So what if they had an environmentalist hiccup due to their taking a leadership role about these "real gold issues?" What would the share price of Homestake do then - drop from $19 to $15?

There is always hope that the US gold producers will wake up and take some sort of assertive action.

Darrel Royal, famed Texas football coach, once said of Ed Marinaro, my old roommate, former Minnesota Viking Super Bowl halfback and Hollywood actor (Sisters, Hill Street Blues, among others) that a "gem is where you find it." He was referring to Ed being a really good player even though he played his college football in the Ivy League at Cornell University.

A gem to GATA would be if Barrick Gold had its own epiphany regarding their hedging policies as it makes so much sense for them to sharply reduce their forward sales. They recently announced their second quarter results with CEO Randall Oliphant crowing (Reuters) that Barrick's "hedging performance would still allow it to have record results in the second half of the year."

"Barrick said the hedging program helped it achieve an average price of $360 an ounce on gold sales the first six months, $75 above the six-month spot price of $285."

Barrick expects to mine 3.7 million ounces of gold this year, with additional production coming on stream down the road. They have proven themselves to be outstanding gold miners.

Great news for Barrick shareholders, right? Unfortunately, not the case! The share price of Barrick closed Friday as previously mentioned at 16 1/2, down 9/16, with spot gold a tad higher on the day. While investors in companies in other industries wonder how they will handle their capital gains, Barrick shareholders wonder whether they should take a tax loss at the end of the year because this stock does not react to good news.

The executives of Barrick, while extremely competent in many regards, keep shooting themselves, as well as the rest of the industry, in the foot. They keep making the same mistake and that is to crow about their hedging. All that does is focus investors on the fact that they do not believe the price of gold is going higher. Under that scenario, it is better to invest in shares of companies in other sectors.

Ironically, these same executives are in a catbird seat as Barrick has the influence and power to change the gold scene overnight. Here is the deal the way I see it.

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

http://www.lemetropolecafe.com

CARTEL CAPITULTATION WATCH III

They have 13.6 million ounces of forward sale hedge coverage through 2006. Against that, they purchased 6.8 million ounces of calls of which 1.2 million ounces have expired worthless, with little fanfare. Then, with less fanfare of disclosed information to the gold community, they wrote 200,000 ounces of $300 calls during the first quarter of this year and 200,000 ounces of $300 calls during the second quarter. Put all that together and it leaves Barrick with 8.4 million ounces of exposure plus another 2.7 million ounces of calls written at strike prices between $320 and $360 for a total of 11.1 million ounces.

It is a bit "of note" that their calls are expiring worthless. Had they covered some forward gold sales, it would have reduced gold supply, helping the gold price - not only with the supply reduction, but because just an announcement of that fact would have helped to change market perceptions. Psychology is one of the most important factors when it comes to pricing of commodities. If Barrick were to cover forward sales, or at least choose to not roll over their forward sales, it would effect the thinking of the other hedged producers. That, you can be sure of.

There was that big flap about Barrick last year when Placer Dome and Normandy announced that they would be delivering into their forwards. Barrick trumpeted the fact of their call buying as a counterattack to widespread criticism of their company policies. And since then and as a follow up to all the abuse they took?

They respond to all of the resulting heat sent their way by writing calls; which, to my knowledge, few investors are aware of. The writing of those calls has helped to suppress the gold price further than need be. Is it any wonder why Barrick is despised by so many in the gold industry? Do you realize that many thousands of miners and geologists are out of work today, in part, because of the hedge strategies of Barrick Gold?

From what I can tell, Barrick has $4.1 billion dollars invested in interest bearing vehicles from the proceeds of their forward sale programs. That is how they come up with such high gold prices on their forward sales - the future interest income is factored in. They also have about $500 million in the bank with little debt. From what I can ascertain, they are also able to ask for delivery of gold on their call positions and not just settle for cash if those calls go in the money.

Why does Barrick not close out its forward sales positions at this point in time? They are in a perfect position to do so. That would negate all the European central bank selling for one year and make it impossible for the 1200 per year supply/demand deficit to be met without an extraordinary rise in the price of gold. My guess is that the price would shoot up $120 to $400 per ounce if they pulled the hedge trigger, as other gold producers would surely follow in panic pursuit. The share price of Barrick would probably go to $50, or higher. As it stands NOW, where would the share price of Barrick be without the recent Fidelity buying? In new low ground?

Perhaps it is not only the forward sale positions that bother potential Barrick investors. Nobody knows what the gold lease rates might do in the future. The lease rates on platinum and palladium have gone to 30%, 40%, 50% and higher as the prices of those metals have shot up to the high $500's and $700's respectively.

Reports suggest that Barrick has fixed its lease rates through next year, but only partially so through 2003 and not at all after that. Sophisticated gold traders know there is very little liquidity when it comes to anything related to the far out months. That goes for option volatility numbers, lease rates, etc. On the $84 run up in September, 1999 the option volatilities went off the charts. Such increases were not factored into most hedge programs. Panic ensued at certain bullion houses and at the corporate offices of certain gold producers. That was at $325 gold. How about $425 or $525?

It makes little sense for Barrick to continue to play such a negative gold game at this time in history. That is, unless THEY HAVE TO. There has long been a suspicion in our camp that Barrick is in bed with certain bullion dealers and part of the gold collusion. After all, their headquarters in Toronto is located one floor above that of JP Morgan. According to the OCC, the notional value of the derivatives on the books of JP Morgan has ballooned to $36.5 billion from $18.4 billion in only one year. It is widely reported that Morgan sold many of the calls that Barrick purchased. Could it be that as part of this deal, and others, that Barrick is prohibited from covering its forward sales? Could it be that there is a quid pro quo among Barrick and certain bullion dealers; ie, the bullion dealers supply Barrick the inside gold information on what is going down, while Barrick keeps the gold flow coming to assist the gold market manipulation?

October 5 - Spot Gold $270.30 down 10 cents - Spot Silver $4.85 up 1 cent

The XAU Gold and Copper Index is on its way to oblivion at 47.08, another 52 week low. Where would this Index be if the price of copper (91+ cents ) was not so strong?

Barrick Gold Randall Oliphant is mouthing off again. From Elko, Nevada Oliphant said "disciplined hedging doesn't impact the price of gold." He then went on to say that while Barrick Gold may have been a convenient target for criticism over its hedging, "criticism should be leveled instead against companies that keep producing gold without earning a profit, rather than closing unprofitable mines."

Oliphant: if hedging doesn't impact the price of gold, why does the gold press report every other day that the reason the price of gold going down is due to Aussie producer selling?

No matter, Barrick's share price is stinking up the place anyway, closing today at 14 7/16, also a new 52 week low. Hoorah for Barrick and their investor friendly hedging strategies that are helping to ruin an entire industry.

Keep this in mind for future reference: JP Morgan and Barrick, JP Morgan and Barrick!!!

October 22 - Spot Gold $270.80 up 90 cents - Spot Silver $4.81 unchanged

Speaking of pathetic stock price action, Barrick Gold is really poor as it closed at 13 1/8 on Friday - right above its 52 week low of 12 7/8. Why any gold investor would plunk down hard earned money on Barrick is beyond me. There is absolutely no doubt in my mind that they are in bed with the gold cartel, have the inside scoop, and have been counted on by the gold cabal to supply gold to help make the gold fraud work.

First the demoralizing and downbeat Placer story, then this beauty:

Barrick scores golden hit with a Barbadian tax shelter

Allan Robinson 03:19 EDT Friday, October 20, 2000

……"These are difficult times for all of us in the gold industry," said Randall Oliphant, president and chief executive officer. "It's a misery all of us share."

Mr. Oliphant stressed that Barrick's hedging strategy allowed it to realize an average price of $360 (U.S.) an ounce for its gold sales, a premium of $78 above the average spot price of $282 an ounce. Barrick said that, beginning in 2002, it will realize at least $350 an ounce on its gold sales as a result of its hedging activities. END.

This story does not even mention the fact that Barrick has increased its hedging activity and increased its gold short positions. More on that later.

Barrick CEO Oliphant speaks of "misery." Randall O, you are a misery creator, not a misery sufferer. When the gold scandal breaks and the rats start deserting the ship and open up how the gold collusion worked, the GATA camp will do whatever we can to expose your involvement.

If you are aware of what is really going on via the likes of your bankers (JP Morgan, etc), as we strongly suspect, and have not disclosed it to your shareholders, I think you will have some unhappy camper shareholders down the road that might take exception to all your denials about any gold market collusion.

No need to go any further on that line right now. You get the picture Randall O. You are on notice. Misery might take on an entirely new meaning for you and your fellow Barrick Gold executives sometime in the future.

-END-

Let’s hear it for MISERY headed Barrick’s way. May they be buried as representatives of those in and around the gold industry who have caused so much harm to so many. Barrick and JP Morgan Chase have acted in the most unethical of manners and cost all of us fortunes and super aggravation. What goes around comes around!!!

After all these years, Barrick Gold is all the way up to $19.88. Can you imagine where their share price would be today if there shareholders had insisted they listen to GATA and cover their hedges way back then?

By the by, when gold makes its move towards $500, Barrick shareholders might really know BIG TIME misery as far as the firm’s derivatives positions are concerned. From someone who knows:

Dear Andrew, Stephanie & Al:

You might remember when Pompous Arse Dudas would not speak to me regarding ABX, thinking it totally ludicrous to question ABX's financial capacity.

Here is Moody's potential downgrading of ABX's unsecured debt. Now go to their annual statement and read the footnoted fine print on the true existence of what they say are margin-free derivatives revealing margin calls on their derivative position which are tied to the quick ratio, liquidity and DEBT RATING. The potential margin calls are larger than their treasury.

The trigger is the balance sheet position, liquidity and bond rating which then activates the margin calls in the normal manner as compared to sell price versus gold price on the catango going out many years.

Take that Dudas
Regards,
Jesse James

Follow up from Jesse James:

From ABX's statement if ABX closed all their derivatives their loss would be $1,250 Billion. That exceeds their cash by a good margin.

I queried about Barrick’s hedge book at $500 gold and received this reponse:

Answer is easy: 2 billion, and according to their statement break even is $298. Don't kid yourself. These guys are skating on bankruptcy. They cannot cover their derivatives even if they want to without renegotiating most all of their development debt because for the most part they are imbedded in their nonrecourse bank loans.

The derivative is how the loans became non recourse. Further every junior on a percentage JV with Barrick has a derivative attached to their property therefore they are in clear and present danger of losing their properties. The reason for this is that the percentage JV juniors must and have collateralized their properties to the development loan because no lender lends on less then the whole property package.

***

Sons (Daughters) of Gwalia has now blown up. Will Barrick follow suit down the road?

On another very positive GATA note, we have received confirmation that GATA’s assessment of the BIS gold derivatives situation is the correct one and the one of the World Gold Council, Jessica Cross and GFMS is flat out wrong. Unfortunately, I am not at liberty to reveal the source for now, however, we are working on how to do so. What I can say is that it came from an "official" source. Stay tuned!

For the first time since April 19 the HUI closed above its 200-day moving average. The HUI gapped up on the open, coming in above 210 resistance. It also convincingly took out its substantial downtrend:

HUI

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

Some headliners during the day:

Dorsey Wright PnF Breakout Alert.
CBOE Gold Index (GOX) Buy Signal at 86.00. Currently $85.75

Dorsey Wright PnF Breakout Alert.

Amex Gold Bugs Index (HUI) Buy Signal at 212.00. Currently $212.07.

Derek Van Artsdalen from San Antonio on the HUI:

Good afternoon, Bill:

Here we are on the doorstep of the autumnal equinox, when the days begin growing shorter. Something must be shifting, as the "strong dollar" contingent didn't show too much enthusiasm for Easy Al's interest rate increase this p.m.

Since time is precious before "Midas" comes out, I'll include just one chart, simply because it shows that today is the day we hardened gold bugs have been waiting more than half a year for: the big HUI breakout.

Here's the chart:

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas0921B.jpg]

The green circle says it all. We finally broke out (convincingly) of the 8-month downtrend!

The measured move is a big one and would, if it pans out, take us way beyond the previous double-top resistance around 259 or so. Internals looking good, too (red circles).

As we move into fall and winter, is it possible that the cabal's days are growing short as well?

Only time will tell...

Derek

It was quite the technical day by the close for the senior gold shares. The HUI leaped 8.19 to 214.36 and the XAU rose 3.24 to 96.37. Bells and whistles have to be going off everywhere. The HUI took out staunch resistance built between February and April. The smaller golds still have to receive their wake-up call. Not there yet. It’s coming and the moves could be spectacular at some point with suddenly no offers in sight to hit.

Tomorrow is key. Will the gold goon squad show up as expected, as they almost always do, and begin another round of gold price-capping? Or, will they be overwhelmed in the short-term and forced to retreat? For some time MIDAS has been pointing to the incredibly strong fundamentals and technicals in both gold and silver. They are even better today from almost every viewpoint.

Regardless of the very short-term, not a week goes by that our camp doesn’t receive some sort of indication we are winning the battle against the devious Gold Cartel and their cohorts. The progress has been tedious, yet definitive. These bums are on their own short leash. They might win a few more battles, but they will lose the war and it won’t be that far off. The heinous Gold Cartel is in serious trouble!

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

A reminder:

NEW READING AT ANGLO FAR-EAST RESEARCH

"THE TRUTH AND THE FRAUD"

Full article : http://www.anglofareast.com/040904.html

Zitat

"It is rare today to meet someone that has any idea of the fraud that exists in the modern monetary, economic and financial world. It is even rarer still to meet someone that, once knowing this truth, goes boldly into the streets proclaiming what they have learned."

Best Regards
Philip Judge

pjudge@anglofareast.com

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THIS MONTHS TELECONFERENCE
With BILL MURPHY of Gold Anti Trust Action Committee

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Saturday Morning 25th September
11.00PM Aust Eastern Std Time

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Introduction (5 mins)

More information and registration
http://www.anglofareast.com/teleconference.html

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

THE TRUTH AND THE FRAUD

Follow the link for the COMPLETE article :

http://www.anglofareast.com/040904.html

We are living in an age where most often truth and reality is masked by confusion, mis-information and frequently, outright lies and deceit.

Our modern global economic and financial infrastructure has been built on the defective foundation of an inflationary, usurious, debt-based monetary system.

It is a flawed and unsustainable system where wealth and labour are continually depleted by debt.

The change to our present fiat monetary era was gradual over many decades, brought about by stealth, deception and lies. Due to its fragility, this is a system that continually requires further lies, deception and even treachery to maintain it.

In the present era of deficits, mal-investment and debt, there continues a monumental struggle with natural market forces. The greater the artificial forces of market manipulation, the more the power of the free market grows.

It is rare today to meet someone that has any idea of the fraud that exists in the modern monetary, economic and financial world. It is even rarer still to meet someone that, once knowing this truth, goes boldly into the streets proclaiming what they have learned.

Bill Murphy from the Gold Anti-Trust Action committee is one such person. For more than 6 years now, Bill has desperately tried to raise awareness, pointing to the fraud and dishonesty of the "bullion carry trade".

Bill has maintained that the gold price suppression scheme has negatively affected the portfolio of hundreds of thousand of investors, the balance sheet of hundreds of mining companies, and aided the impoverishment of literally millions of people living
and working in gold producing countries such as South Africa. Yes, Bill is one of a rare breed indeed.

THIS MONTHS TELECONFERENCE
With BILL MURPHY of Gold Anti Trust Action Committee

"THE PRESENT AND FUTURE GOLD MARKET"

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Zuerst gross ankündigen statt 400 Tonnen Gold pro Jahr, wie bisher, nun sogar 500 Tonnen Gold pro Jahr verkaufen zu wollen, und damit den Goldpreisanstieg abwürgen, um Monate später bekanntzugeben, dass sie gar keine 500 Tonnen verkaufen wollen.

Die europäischen Zentralbanken haben gar keine 500 Tonnen Gold pro Jahr zum Verkaufen verfügbar, und schon gar nicht 5 Jahre lang jedes Jahr 500 Tonnen, das ist wohl der Punkt !!!

Eine weitere Gold Preis Manipulation wird offensichtlich!

Selbst Gold Skeptiker, und Leute die bisher eine Gold Preis Manipulation rundweg verneinten, dürften vielleicht langsam etwas unsicherer in ihrer Ueberzeugung werden, dass wirklich noch so viel Gold zum Verkaufen vorhanden ist wie die Zentralbanken uns alle glauben lassen möchten.

Wer noch kein physisches Gold besitzt, sollte sich eigentlich etwas beeilen. Es könnte sonst sein, dass der Gold Zug bereits abgefahren ist, wenn man aufspringen möchte.

Gruss

ThaiGuru

[Blockierte Grafik: http://gfx.finanztreff.de/vwd_…l/kopfleiste/vwd_logo.jpg]

http://www.vwd.de/vwd/news.htm…sektion=wirtschaftpolitik

Umfrage: Notenbanken wollen weniger Gold verkaufen!

DÜSSELDORF (Dow Jones-VWD)

Die europäischen Notenbanken werden ihre Goldreserven voraussichtlich in geringerem Umfang auflösen, als Marktteilnehmer erwartet haben. Das ergab eine Umfrage des "Handelsblatts" (Donnerstagausgabe) unter den 15 europäischen Zentralbanken, die das neue Goldabkommen unterschrieben haben. Danach werden die Notenbanken auch auf der am 28. September beginnenden Herbsttagung des Internationalen Währungsfonds (IWF) wahrscheinlich keine Einzelheiten des angekündigten Verkaufsprogramms nennen.

Die Rohstoffmärkte hatten sich von der IWF-Tagung detaillierte Aussagen erhofft. Experten rechneten jetzt mit steigenden Goldpreisen, schreibt die Zeitung. Zehn der fünfzehn Unterzeichner des neuen Goldabkommens wollten laut Umfrage nicht einmal angeben, ob sie überhaupt Gold verkaufen. Damit sei zweifelhaft, ob die Notenbanken in den nächsten fünf Jahren die nach dem neuen Goldabkommen mögliche Menge von 500 Tonnen jährlich an den Markt bringen werden, heißt es.

Das neue Abkommen tritt am kommenden Montag in Kraft. Nach Einschätzung des Goldexperten der Investmentbank UBS, John Reade, könnten die Notenbanken nur 250 Tonnen des Edelmetalls im Jahr verkaufen. Allerdings sei im aktuellen Goldpreis eine Verkaufsmenge von 500 Tonnen eingepreist. Eine Verknappung des Angebots triebe den Goldpreis nach oben, sagte Reade.

Zitat

"Sobald der Markt realisiert, dass unter dem neuen Abkommen weniger verkauft wird, steigt der Goldpreis."

(ENDE) Dow Jones Newswires/22.9.2004/11/apo

22.09.2004, 19:18

[Blockierte Grafik: http://ad22.vhb.de/hbi/images/logo.gif]

http://www.handelsblatt.com

Experten rechnen jetzt mit steigenden Goldpreisen

Notenbanken wollen weniger Gold verkaufen

Von Marietta Kurm-Engels, Handelsblatt

Wenige Tage vor Inkrafttreten des neuen Goldabkommens wächst am Goldmarkt die Spannung. Der Handel wartet darauf, dass die 15 europäischen Notenbanken, die es unterzeichnet haben, Einzelheiten zu dem angekündigten „konzertierten Verkaufsprogramm für die nächsten fünf Jahre“ bekannt geben, das am 27. September anlaufen soll.

FRANKFURT/M. „Die Marktteilnehmer rechnen damit, dass im Rahmen der Herbsttagung des Internationalen Währungsfonds (IWF) klar gestellt wird, wann die Notenbanken wie viel Gold auf welche Art und Weise verkaufen wollen“, sagte Wolfgang Wrzesniok-Roßbach, Goldexperte bei Dresdner Kleinwort Wasserstein, dem Handelsblatt. Die IWF-Tagung findet vom 28. September bis zum 3. Oktober in Washington statt.

Die Hoffnung des Marktes könnte freilich trügen. Denn sein Interesse an einem ungestörten Marktverlauf kollidiert mit dem Interesse der Notenbanken, sich einen attraktiven Preis zu sichern. Die Banque de France hat bereits erklärt, dass sie im Vorfeld möglicher Verkäufe keinerlei Angaben zu machen gedenkt. Zehn der fünfzehn Unterzeichner machen sogar ein Geheimnis daraus, ob sie unter dem neuen Abkommen überhaupt Gold verkaufen wollen. Es ist nicht einmal sicher, ob die Notenbanken über die nächsten fünf Jahre die angekündigte Menge von 500 Tonnen jährlich an den Markt bringen werden.

John Reade, Goldexperte bei UBS, schließt nicht aus, dass nur die Hälfte davon angeboten wird. Im aktuellen Goldpreis seien die angekündigten 2500 Tonnen voll eingerechnet. Bei einer Verknappung des Angebots steige der Goldpreis.

Zwischen dem ersten und dem zweiten Goldabkommen besteht ein wichtiger Unterschied. Das erste Abkommen wurde am 26. September 1999 unterzeichnet, um den Markt zu beruhigen. Die Schweiz, Großbritannien und die Niederlande hatten große Verkaufsprogramme angekündigt. Es wurde befürchtet, dass der Markt bei weiteren Verkäufen von Zentralbanken zusammenbrechen würde. Das Abkommen begrenzte die Verkäufe über fünf Jahre auf 400 Tonnen jährlich. Die 2000 Tonnen gingen nur unwesentlich über das hinaus, was von den Notenbanken ohnehin schon beschlossen war

Im Gegensatz dazu gibt es bei dem neuen Goldabkommen bisher keine Verkaufsankündigungen. Die Notenbanken haben sich nur die Möglichkeit einräumen lassen, Gold abzustoßen. Das zweite Abkommen datiert vom am 8. März 2004.

Die Bundesbank hatte sich unter ihrem früheren Präsidenten Ernst Welteke für eine Verkaufsoption von 600 Tonnen stark gemacht. Sein Vorschlag, mit dem Erlös aus den Goldverkäufen eine Stiftung „Forschung und Bildung“ zu gründen, war in der Politik aber auf Widerstand gestoßen. Weltekes Nachfolger, Axel Weber, sagte im Juni: „Wir diskutieren im Eurosystem, welche Reserven die Zentralbanken insgesamt halten sollen. Vom Ergebnis wird es abhängen, ob wir Gold verkaufen.“ Die Entscheidung falle im September. Bei der Bundesbank hieß es jedoch auf Nachfrage: „Es gibt noch nichts Neues.“

In der Londoner City wird spekuliert, ob Weber möglicherweise gar kein Interesse daran hat, Gold zu verkaufen, um dann entsprechend der deutschen Gesetzeslage vier Fünftel des Erlöses an den Finanzminister abführen zu müssen. Hinter die deutsche Quote wird jedenfalls ein großes Fragezeichen gesetzt.

Die Banque de France kann unter dem neuen Abkommen 500 bis 600 Tonnen verkaufen. Weltekes Vorstoß hatte zunächst auch in Frankreich Begehrlichkeiten der Politik geweckt. Notenbankgouverneur Christian Noyer hat aber klar gestellt, dass er nicht bereit ist, mit den Golderlösen Staatsausgaben zu finanzieren. Noyer will abhängig von der Marktlage über einen möglichen Goldverkauf entscheiden und sich „erst bei der Veröffentlichung der Bilanz“ dazu äußern.

Bekannt ist außerdem, dass die Niederlande 165 Tonnen verkaufen wollen, wovon 65 Tonnen ein Überhang aus dem alten Abkommen sind. Dasselbe gilt für die 130 Tonnen, die die Schweiz auf den Markt bringen wird. Sie hatte 1999 beschlossen, 1 300 Tonnen zu verkaufen und seit Mai 2000 pro Arbeitstag rund eine Tonne abgesetzt. Die Österreichische Nationalbank hat nach eigenen Angaben jetzt eine „etwas kleinere Quote“, nach 90 Tonnen unter dem ersten Abkommen.

Die übrigen zehn Notenbanken hüllen sich in Schweigen. Die Banco de Portugal hat zumindest mitgeteilt, dass „sie die Möglichkeit hat, einen Teil ihrer Goldreserven zu verkaufen“. Den anderen Zentralbanken war nicht einmal das zu entlocken. Die Banca d’Italia hat Verkaufsgerüchte am 13. September eilig dementiert: „Über dieses Thema ist nie gesprochen worden, noch gibt dazu irgendwelche Pläne.“ Notenbankchef Antonio Fazio gilt nicht als Freund von Goldverkäufen.

In den Rechnungen, die Goldexperten aufmachen, hat Italien aber die gleiche Quote wie Frankreich und Deutschland. Ohne diese Annahme sei es nicht möglich, auf die Gesamtsumme von 2 500 Tonnen zu kommen. Man erreicht sie aber auch dann nur knapp, wenn alle angekündigten Quoten voll ausgeschöpft würden und man zusätzlich Fazios Empfehlung zugrunde legt, dass Gold bis zu 30 Prozent der Währungsreserven abdecken sollte. Um dieses Verhältnis herzustellen, könnte Portugal noch gut 200 Tonnen, Spanien rund 50 und Griechenland 10 Tonnen verkaufen.

HANDELSBLATT, Mittwoch, 22. September 2004, 19:18 Uhr

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US-Börsen durch hohen Ölpreis auf Talfahrt

Mittwoch 22 September, 2004 19:39 CET

http://www.reuters.de/newsPack…oryID=588855&section=news

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Class Action Complaint

https://www.savegold.com/classaction.html#

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September 22 - Gold $407 down $1.30 – Silver $6.34 unchanged

US Financial Markets Showing Stress / Newmont’s Turn

Zitat

The hottest places in hell are reserved for those who remain neutral in time of great moral crisis.-- Dante Alighieri (1265-1321)

Yesterday afternoon one of my colleagues called in a very upbeat mood about the gold share action. He was disappointed in that all I could ramble on was about what was to come today. His call was not a fun one for him after having seen his vast number of senior gold shares pop so nicely after months of treading water. My downbeat attitude was directed at The Gold Cartel, of course, whose modus operandi has been to keep gold from taking out $410/$412 resistance and to do all they can to dampen public excitement regarding gold/gold shares as a go-to investment whenever it commences to kick in.

Right on cue the bad guys showed up this morning to prop up the dollar and take gold down. It took the carte less than 20 minutes after the Comex opening to fill yesterday’s gap. They wasted no time in asserting their bullying ways.

My guess is the Working Group on Financial Markets was surprised by the market action following the Fed announcement. As the Fed reaffirmed how well all was going in the US economy (not even touching on all the recent disappointing economic reports), the PPT operators had to expect the dollar to rally and bonds to sell-off. Nope! The dollar was trounced and bond continued their move higher. Clearly the vigilantes out there doubted the veracity of the Fedspeak.

This had to really tick off these arrogant PPT jerks. How dare the free market challenge their Orwellian ways and expectations? As we have seen so often, however, the PPT regrouped and calls went out about what had to be done today. The dollar must go back up and gold must be sent right back down. We have seen this pattern all summer long. Whenever the dollar is breaking down, it rallies. Whenever gold is set to break out, it is crushed. Here is what Sarge sent me yesterday morning with gold on the upswing and dollar swooning:

Remember what gold did the day after the rate hike on 10 AUG?? Gold and the currencies (and the DOW) are all doing the same thing they did on 10 AUG. Gold went up (they let people get long) and the DX went down (they let specs get short) on the 10th. Then on the 11th, gold got murdered and the dollar rallied. Gold was down $8 at one point on the 11th; DX hit a high of 89.29 if I remember correctly. Now, what are the chances of a DX rally, and gold being put in the toilet tomorrow??
It’s Groundhog Day all over again boss

In essence, Sarge nailed it. Gold was closed before the Fed announcement. It rallied $1.70 in the Access market early yesterday afternoon. However, by evening The Gold Cartel took the price back to unchanged. Soon after the Comex open it dropped $4.30, or $6 off its Access high. While the dollar gave up some of its gains, it still closed at 88.68, up .37, while the euro finished at 122.60, down .52.

The PPT wants gold reduced to a non-event and they want the dollar to remain steady over the next month. When it comes to bonds, it suits their purpose to have rates come down ahead of the Presidential election. Thus, while the likes of bond gurus such as the legendary Bill Gross of Pimco are proved embarrassingly wrong (months now), bonds keep making new highs with yields making new lows. When it comes to the stock market, the powers in Washington and Wall Street want it moving up going into the election and are doing all they can to prop it up, however, the stiff head winds of reality are proving to be very formidable obstacles.

Anyway, today was a far better one for our camp than yesterday the way MIDAS sees it. Gold bucked the dollar rally quite well, filled its gap on the downside, rejected the $400+ level, and closed on its highs (unlike yesterday when it closed on its lows). The technicals actually improved today.

The gold open interest rose 3844 contracts to 256,086. Not bad. The floor was looking for a 7 to 8 thousand increase. Morgan Stanley was an aggressive buyer for most of the trading session.

Silver was bagged for a dime early, yet crept steadily back up, briefly going positive. It is ludicrous for silver to creeping above $6 with crude oil eyeing $50 per barrel. It should pop 50 cents in a single trading session within the next couple of weeks.

The silver open interest rose 208 contracts to 82,327.

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The John Brimelow Report

Japan almost sold out: what then?

Wednesday, September 22, 2004

Indian ex-duty premiums: AM $6.66, PM $6.87, with world gold at $407.80 and $406.80. Ample for legal imports, despite the rise of yesterday. Reuters today carries a story quoting Indian bullion dealers expressing enthusiasm about customer demand, an astonishing sight: unwavering pessimism is more the norm from this source. Although the rupee did nothing the stock market edged to a new 20 week high.

TOCOM sold. Volume leapt 87% to the equivalent of 19,405 Comex lots, with the active contract up 6 yen, but world gold down $1.35 on the NY close by the end. Open interest only declined the equivalent of 236 Comex lots to equal 85,743 Comex, but according to Mitsubishi the Trade House long dropped steeply, by 9.9 tonnes (the equivalent of 3,182 Comex lots) to only 21.5 tonnes, which is very low. (TOCOM will publish this data tomorrow.)

Why this selling should be so pronounced of something of a puzzle. Admittedly, yen gold is approaching levels rarely seen in the past few years (taking into account the softening of the yen this year, it is as if $US gold were in the $420s). But the liquidation has been extreme: these are very low levels both for open interest and the inferred "General Public" long. An obvious thought is that quite soon this Asian barrier to price advance will be eroded away.

Gold imports into Japan, at 6.19 tonnes down 29% from July - but up for the 5th straight month and more than double last year - are quite firm. Why this is so is also a puzzle. Some speak of fabrication demand for industrial components, others of the beginning of investment demand because of the termination of the State guarantee on bank deposits in March 2005. If the latter is true, it could be important, bearing in mind the serious buying done in early 2002 the last time the Government tried to abolish their guarantee.

Yesterday in NY gold traded 43,157 contracts (triple Monday) and open interest jumped 3,844 contracts to 256,086. ScotiaMocatta notes:

"Gold gapped higher on the New York open, after trading 407.00 in London it began 408.50/409.00, as funds were aggressive buyers. The metal shot to a high of 409.50/410.00 in hectic trading conditions before…Consistent dealer selling emerged as the day went on, however, funds were happy to take it all in. The net result was a narrow $1.70 trading range."

Another attempt to run gold up in early ACCESS trading (after the Fed decision) was squashed by the arrival of Japanese selling.

As noted above, the TOCOM public has little left to sell. Furthermore, the Bears must be concerned about rotation into gold by Western speculator pools, elated by their success in other commodities such as oil and copper this week. And gold has not run up enough to chill the Eastern physical buyers. If there is a manager in the gold market, he must be frowning.

JB

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CARTEL CAPITULTATION WATCH

The DOW took a dive, dropping 135 to 10,109, while the DOG sank 35 to 1886.

Something is very wrong out there and it is GLARING for all to see. Stress seems to rearing its ugly head in the US financial system:

*Bonds are looked at as reliable bellwether by many about what is to come for the US economy. They are dive bombing, in contrast from the bombast from Washington, Wall Street and the Fed.

30-yr Treasury Bond
http://futures.tradingcharts.com/chart/TR/C4

*The CRB is on a roll, defying what the bond market is supposed to be telling us.

November CRB chart (spot CRB closed at 279.49, up 1.56)
http://futures.tradingcharts.com/chart/RB/B4

* Bellwether crude oil and copper closed in new contract high ground, also defying what the bond market is telling us

November crude oil ($48.35, up $1.59 per barrel)
http://futures.tradingcharts.com/chart/CO/B4

December copper ($1.3765 cents per pound)
http://futures.tradingcharts.com/chart/CP/C4

My two cents on all of this (which is only a continuation of my rant the past many months):

SPIN is catching up to Washington and Wall Street. In effect they have been lying to the American public. The economy is far weaker than they are letting on. The effects of the lower short-term rates, tax cuts and government stimulus have run their course. At the same time, they have been low-balling the real inflation numbers in the US by a substantial degree. This is squeezing the over indebted consumer and senior citizens who have to deal with rising costs and lower income (due to the low-balled CPI and resulting lowered government payments).

The Fed is raising rates to save face and maintaining its newfound hubris how its statements affect the economy and investment decisions. Meanwhile, commodity prices are on the move to foreign demand and low supply. Commodity costs have gone up and are likely to continue to do so. Wait until gold and silver genies break out of their manipulated bottle.

The Orwellians experiment in economic fascism is showing severe signs of wear and tear. In the not too distant future the experiment is likely to fall apart, just as Iraq is the process of doing. Denial is fine for the very short-term. After that, it is usually brings on devastation of some sort. I believe that devastation is going to be a housing and stock market bust next year and this is what the bond market is telling us.

Meanwhile, sharply rising commodity prices combined with sharply falling long-term interest rates is the perfect storm recipe for soaring gold and silver prices!

Some of the economic news begins with an EEGADS for crude oil:

10:30 API reports crude oil inventories (12.9M) barrels
Gasoline inventories (3.3M) barrels, while distillate inventories (2.4M) barrels. Nov. WTI crude currently quoted at $47.10/barrel.
* * * * *

10:31 DOE reports crude oil inventories (9.1M) barrels vs. expectations (7M) barrels
Gasoline inventories reported (2.8M) barrels vs. consensus (2.5M) barrels. Distillate inventories reported (1.5M) barrels vs. consensus (1.5M) barrels. November crude is trading to $47/barrel in reaction to the data.
* * * * *

This caught a great deal of attention:

13:15 10-yr. Treasury yield briefly breaks through 4% level
Currently up 9/32 to a yield of 4%. The level is seen as psychological resistance for the 10yr. bond.
* * * * *

This caused a great deal of consternation:

08:11 MWD reports Q3 EPS of $0.76 vs. I/B/E/S consensus $0.95 (552.38)
Revenue for the quarter was $5.4B vs. I/B/E/S consensus $5.779B.
* * * * *

Morgan Stanley Quarterly Earnings Fall

NEW YORK (Reuters) - U.S. investment bank Morgan Stanley on Wednesday said quarterly profit fell amid reduced trading revenue, reflecting the impact of sluggish markets this summer.

New York-based Morgan Stanley said net income fell to $837 million, or 76 cents a share, in the fiscal third quarter ended Aug. 31, down from $1.27 billion, or $1.15 per share, in the year-earlier period. –END-

Oil and copper are going to China. MIDAS reported the copper part many months ago.

China's crude oil imports jump more than 37 percent
SHANGHAI, China (AP) -- China's crude oil imports jumped 37.4 percent in August to 70 million barrels, the government reported Tuesday.
The increase, equivalent to an average of 2.21 million barrels a day, brought the country's crude imports for the first eight months of this year to nearly 600 million barrels -- a 39.2 percent jump from the same period last year, the General Administration of Customs said.
China, Asia's largest oil consumer, is the world's fastest growing energy market.
Imports aren't expected to slow despite a decision by Russian oil giant Yukos to halt some exports to state-run China National Petroleum Co., cutting off 60 percent of its crude supply to China.
Despite its voracious appetite, China's crude oil exports rose in August by 19.7 percent to about 97,600 barrels a day.

-END-

Pot Pourri:

Douglas Kass, Seabreeze Partners Management, said the following on CNBC:

"I believe the government releases on inflation are a fiction."
"Eventually, the condition of the economy will trump the lower interest rates as it relates to equities, obviously, impacting corporate profits. We're seeing all these misses and people are ignoring it. Look, I was bullish, as you know, six or seven weeks ago and I turned negative over the last two weeks. I think we're just in a trading range, at the top end of the range." ***

This morning’s Wall Street Journal Editorial on page A28 "How are We to Pay for All This?"

The author doesn’t realize that this problem is a result of the government’s changes to the CPI over the last 10 years. The result is a 17.5% increase in medicare premiums and 2.4% increase in social security COLA; therefore, senior citizens Social Security Checks could actually fall in a rising cost environment. The senior citizen squeeze continues. They will either have to take on more debt or cut spending. Senior citizens should consider a class action suit against the BLS.
Garic

How sad to see such a successful businessman like John Snow reduced to Edgar Bergen’s puppet, Charlie McCarthy, who only shows up from time to time to spew forth Wall Street/Bush Administration propaganda:

MECHANICSBURG, Pa., Sept 22 (Reuters) - High energy prices are an obstacle to the world economy and will be discussed at the upcoming Group of Seven meeting, U.S. Treasury Secretary John Snow said on Wednesday.

"I fully anticipate that in the briefing on the global economy (during the G7 meeting), energy will feature," Snow told reporters following a round-table discussion with businessmen here.

Snow said the cost of crude oil was being artificially inflated by speculation and by geopolitical tensions and should fall in the period ahead.

"My expectation is that prices will moderate and go back toward fundamentals," he said.

The G7, which is made up of the United States, Japan, Italy, Germany, France, Canada and the United Kingdom, meets in Washington on Friday, Oct. 1. to review the outlook for global growth.

"I think these prices are artificially high. I think they are not justified by market fundamentals, which means there is an uncertainty premium, a speculative premium in these prices," Snow told the businessmen after they voiced concerns about high energy prices, which they said made it hard to price future business projects.

-END-

More than meets the eye?

Sept. 22 (Bloomberg) -- Fannie Mae, the largest U.S. mortgage finance company, said its federal regulator uncovered practices that don't comply with generally accepted accounting principles, raising ``doubts'' about the validity of earnings. The shares fell the most since 1998.
The Office of Federal Housing Enterprise Oversight also told Fannie Mae's board it found at least one instance where the company deferred expenses to meet executive bonus targets, and used improper ``cookie jar'' reserves. Fannie Mae spokeswoman Janice Daue said the Washington-based company had no comment on the statement released by the board of directors. –END-

How really bad off is Fannie Mae? This email came from a fellow Café member concerning Catherine Austin Fitts’ company Hamilton Securities may give us a clue:

Bill:
Quote from Washington Post -- "Fannie Mae recently hired Stanley Sporkin, former head of enforcement at the SEC, who declined to comment yesterday on the review." See below.

Sporkin was the judge that "fixed" Cahterine’s company....he is as dirty as it gets. He left the bench to go to Weil Gotshal. Their specialty is bankruptcy. They were Enron's bankruptcy counsel.

Here is Sporkin's background:

http://www.solari.com/media/SporkinBio.html

Not sure what is up...most logical scenarios will all be good for precious metal prices.
Janet

[B]Fannie Mae's Board Briefed on Troubles

By David S. Hilzenrath
Washington Post Staff Writer
Tuesday, September 21, 2004; Page E01

Fannie Mae's board of directors met yesterday to hear details about accounting problems its regulators have uncovered during a long-running review, according to a source familiar with the matter.
It was not clear if the problems were extensive enough to lead to a restatement of Fannie's past earnings, said a government official who had been briefed on the findings but spoke on condition of anonymity because the report had not been released to the public. –END-

Catherine Austin Fitts, the former managing director at Dillon Read and the number two at HUD in the first Bush Administration, is one of GATA’s Board of Directors.

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GATA’s Mike Bolser:

Hi Bill:

The Federal Reserve added $4.5 Billion in temporary repurchase agreements today September 22nd 2004, an action that caused the pool of un-expired repos to rise to $62.114 Billion a very high value. The DOW remains unresponsive and is down 100 at this hour (10:20AM), although its 30-day moving average is still in a mini up turn. The Fed has its hands full with an oil demand shock as the next two pieces reveal:

This official government energy website reports that things aren't getting back to normal as quickly as hoped for after Ivan roared through:

MMS: 39.2% Oil, 22.7% Gas Production Shut In US Gulf
http://www.gomr.mms.gov/homepg…ewsreal/2004/040921s.html

NEW YORK (Dow Jones)--The U.S. Minerals Management Service reported Tuesday
that 39.2% of daily oil production and 22.7% of daily natural gas production remain shut-in in the U.S. Gulf of Mexico five and a half days after Hurricane Ivan made landfall.

This is only a small improvement from Monday's reported oil and gas shut-ins covering 41.6% of oil and 23.5% of gas production, respectively. The much slower-than-expected pace of recovery has worried traders and analysts who had been confident that the situation would be mostly back to normal by the end of this past weekend. END
++++++++++++++++++++++++++++++++++++++++++
Absorb the following statistic from Sven Lorenz for The Daily Reckoning
http://www.dailyreckoning.com

"The following is hardly known by the public...but this agreement means that 13% of the world's tanker fleet will have to be scrapped by April 2005. By 2010, a staggering 40% of the world's oil tanker fleet needs to be replaced." (As a result of double hull tanker requirements).

Mike: What this means is that 13% of sea-born oil deliveries will cease next April. Herein lies an unavoidable Fed disaster as oil prices will make $50/bbl look cheap. 80% of all oil consumption is delivered by sea.

There is no escaping the fact that hyperinflation triggered by an oil demand shock will blossom in 2005. Continued denial of this reality only makes it worse and gold is one of the few escape routes.
+++++++++++++++++++++++++++++

The Georgian turmoil continues as Russia's Foreign Minister, Sergei Lavrov and Georgia President Saakashvili traded barbs over disputed autonomy for two regions in Georgia, Abkhazia (In the far West) and South Ossetia. In my opinion, Russia will soon attack bases in Georgia on the assertion that they are being used to train and house Chechen terrorists.
++++++++++++++++++++++++++++++++++++++++

Ten-Year Treasury Note Melt-up?

Elsewhere at the Café, Steve Saville correctly reports that bonds are no longer indicators of what they once were. This is because important treasury notes like the Ten-Year are manipulated by the Federal Reserve.

Yesterday's bond run caught traders off guard and the Fed again demonstrated its ability to play traders and their computer black boxes like a violin, effectively funding primary dealer's operating costs with their ill-gotten manipulation profits.

Just when everybody thought long rates were going higher, the Fed engineered an ambush. It is their MO to do this sort of thing. My expert bond colleague called yesterday in a depressive state about predicting higher yields a week or so ago. He needn't have been too worried about yesterday. It was an aberration.

Examine the Ten-Year Yield chart nearby. The flat part of the pma is REALLY flat and the hairpin turn part is REALLY sharp. Indeed, going back to 2000 (in unpublished work) there are two other major hairpin turns and flat parts even flatter and at least as sharp as the latest interval (Shown in the chart's box). I look carefully at these phases with unique analytical tools. What does all it mean?

"Flat" doesn't happen in random markets. It happens as a result of computer controlled daily movements designed to steer certain moving averages. Hairpin turns don't happen either. They are designed by the Fed to throw traders off the wagon and they do a good job of it because the majority of trading houses utilize complex TA "black box" algorithms and these gizmos get hosed every time.

It is very difficult to allow one's self to accept that the wild swings in yield above and below the target are purposely put there in order to construct the ma flat line but that is exactly what the lines and turns are telling us. "Teaching" was the word a physicist colleague of mine used to say.

So the recent period of rising ten-year yields has been a Fed target that they stayed close to while making everybody think the market was jumping all around. IF they fell behind on their targets during their daily progress, they had time to make it back up and produce the nice, flat phase we see ("1" is a perfect R squared regression value).

Long rates are not going to stay flat (Or deliver another hairpin turn down). This is logically because $47/bbl oil is wrecking the Fed's inflation world and it will get unbearably worse next year. We know this because they have sent out their "Communications policy" teams to report that rising energy costs "Don't filter into the rest of the price world". One reads the Fed by reading their Tokyo Rose propaganda by-lines. This Wall Street clap-trap is actually fooling some otherwise smart people.

So the Ten Year yield will keep going up along the Fed's target regression pathway (Unless they are forced to move into a higher slope) and yesterday's raid is a major short signal against this yield. Expect 5.30%, just as my expert bond friend said several weeks ago.
Mike

More hints of market manipulation coming from the widely followed Bernie Schaeffer. From Café member RL:

Bernie Schaeffer is a chartist and he can see what is happening but chartist never really get the big picture or motivations from their charts. GATA fills in all the blanks nicely.

I will never forget what the ex-Fed governor Wayne Angell said on television in 2001: "The Fed will lower rates until the money hoarders are forced out of their passbook accounts and into equities." Wayne Angell in an interview on CNBC

Remember how the Fed was considering ways to provoke a negative savings rate on passbook accounts in the event they needed it to 'stimulate demand?'

They did a good job enough. People have been fleeing 'cash' or "safe" investments like gold and passbook accounts and have been embracing higher risk and with abandon. Thus are the seeds of hyperinflation bubbles sown in higher risk assets including heavily leveraged homes, conceptual economy stocks, and artificially priced bonds. ***

From Mr. Schaeffer:

http://www.schaeffersresearch.…bservations.aspx?ID=11180

Frequent readers of this page know that I'm of the opinion that gold has a lot of rally potential before it peters out. Its relative strength, as compared to the broader market, has just begun to recover after nearly two decades in the rough. Meanwhile, some sentiment factors continue to suggest that there is plenty of room aboard the bullish gold bandwagon. Throughout the latest rally in gold, put players have been predominant, especially during the past several months. Since late June, the put/call open interest ratio on gold futures has advanced sharply, constructing an impressive "wall of worry" for the metal to scale

Unfortunately, there's a faction out there that prefers to disagree with me. Looking at today's intraday chart of gold futures for December delivery (GC/Z4), it looks as though someone is trying very hard to keep gold below the $411-$412 region

Perhaps this is the work of call sellers, who have a vested interest in keeping gold below their sold strike. If their written positions expire worthless, they retain the original premium collected. Then again, it could be overeager traders on commodities exchanges working to their own advantage. Whatever the cause, it is a region to be reckoned with for gold bulls.
Bernie Schaeffer

Jesse chimes in:

None so blind as they who will not see

Central banks leasing their gold to be selectively dumped, central banks buying enormous sums of treasuries and agencies to move prices and rates, the Fed applying enormous batches of liquidity to the primary dealers and loaning them securities in high numbers: what more is it going to take for people to wake up and smell the coffee?

Gold is being manipulated along with the longer interest rates and the dollar. The case is quite compelling, and Bernanke has laid almost the entire game plan out there for us.

When that manipulation finally cracks, all hell is going to break loose. There might be an 'event' to try and cover it, but in time all the sordid details will come to the light of day, and I only hope I am here to see it.

***

An insider’s heads up:

Hi Bill,

I was struck by one of the comments in Monday’s Midas about Goldman Sachs. As a headhunter in specialising in fx and commodities it is abundantly clear that investment banks are there for two things only. Firstly to generate flow (and therefore commission) secondly to trade their balance sheets. Investment banks are hype machines, by their nature they are structured to sell, like any other business and whatever the new rule governing conflict of interest they are unlikely to recommend buying an asset in public without being long the market. Investors who believe banks are there to publish objective analysis should be careful, remember these people are out to take as much money from you as they can.

The only way to tell what the banks really think is to watch where they are building sales and proprietary trading teams. In commodities the hot area is energy, from oil through to power. The process has reached the stage now where banks are becoming meaningful players in the physical market, owning the underlying generating assets and storing the physical inputs such as crude and coal. MSDW is now buying crude direct from north sea producers (36m barrels co-owned with Deutsche Bank) and Goldman who recently bought 10m barrels and owns a large physical portfolio of power generating assets. Morgan Stanley has even become a preferred supplier to the SPR in the US.

What effect will this have on gold. My reasoning is as follows. Banks understand the that the weakness in the commodities complex is not the quantity of known commodities themselves but rather the infrastructure to supply them to the market. It is the infrastructure that has suffered form chronic underinvestment for the past 20years and it is these assets they are now buying. By controlling these assets they will be able to exert even more control on prices than they already do and ultimately will pump and dump as they always do. Between them Morgan and Goldman will book profits near $3bn for this year from businesses that employ only 700-800 people between them (including back office) and they don't want anyone spoiling the party.

Therefore with these giants going so long in physical assets (not to mention the growth of their client businesses in this area) it would be reasonable to say this move has some way to go. The only place they seem to be short is gold, but in time they will cover (force the central banks onto settling for cash) and that too will then get the same treatment as the rest.

If the banks are long infrastructure you can be sure their client base will be seen as the ultimate targets when it is time to book profits and retreat. We are a long way from that point so the market has legs for some time to come. I am confident gold will ultimately benefit as the banks find ever more creative ways of pushing commodity based products to their clientbase.

I will leave you with this thought. I know a number of very establishment money mangers in London looking to use commodities as a diversification tool in conservative money management. They see it as sensible and necessary. However these people do not view futures and options as particularly suitable due to the exchange risk and volatility of the paper market. They want physical, longer term exposure. It is not easy to gain this exposure in a compliant way and they are looking here at energy, bulk and PM's. These people work in companies controlling hundreds of billions of £'s but are ahead of the senior management in seeing this need. It will not long before the mainstream are demanding this exposure and the banks will be looking for ways to give it to them. It is happening now but will take some time.

"Veteran Café member"

Silver input:

Hi Bill:

I thought that you should be advised that silver lease rates more than doubled yesterday, and despite this large volume of borrowed selling, silver advanced all day in London and New York. Silver's rates are now a more normal three to four times the lease rates for gold. The borrowing was spread over all terms, at an even .20% rise. Who ever did this took some pains to spread the metal debt out, and even borrowed metal at the one year term, which is the usual preserve of mine hedgers. I think they did this to avoid backwardation in the yield curve, and to reduce costs. I suspect that if they had front loaded the borrowing, we could have had a ten fold increase in the one month rates and broadcast the tightness in the physical market.

Can't have that.
Regards, Rhody

Enjoyed the usual fun conversation with Mahendra this morning. He remains resolutely bullish on gold and silver, looking for the price of gold to soar the next two weeks. Many of his subscribers are happy campers so far, loading up below $400. As far as the stock market goes, he is sticking to his guns that from here on in, the market begins a downtrend which will last years.

From Mahendra’s newsletter last week:

STOCK MARKET

Monday will be the best day to go short all around the world stock markets because they will come into bear grips. THE BEAR TREND IS FINALLY ENTERING THE WALL STREET (DOW JONES) AND ALL BLUE-CHIP STOCKS WILL SHOW WEAKNESS. MONDAY’S LAST HOUR TRADING SESSION OR TUESDAY COULD BE THE DAY and bears will make the complete a unbreakable circle by 21st September. Though between 13 and 21, the USA market will try to fool everyone by a false rising one or two time in intraday trading or in opening or closing time. Finally the rising history of the DOW will end on 21 September. Indeed, we will not see the current index in the next 7 years. Other world financial markets like Europe and India will also start falling from this week. My advice is start selling market in small lot from money and sell every after two day till 21 September.

-END-

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

http://www.lemetropolecafe.com

CARTEL CAPITULTATION WATCH

Yesterday the MIDAS focus was Barrick. What fun it was to spot this in the October 5, 2000 MIDAS:

"Keep this in mind for future reference: JP Morgan and Barrick, JP Morgan and Barrick!!!"

Here we are four years later and yep, GATA called it, Morgan and Barrick are in New Orleans Federal Court defending themselves against Blanchard Coin for manipulation of the gold price.

Sadly, almost embarrassingly for them, it is time Newmont get their just due. Take a gander at what Newmont sent to St. Louis’ savvy Wistar Holt

From: Jennifer.VanDinter@Newmont.com
Sent: Tuesday, September 21, 2004 5:18 PM
To: wholt@holtshapard.com
Subject: Wistar Holt @ Holt & Shapard Capital Management

Mr. Holt,

We apologize for the delay in responding to your request for information. We are aware of the report issued by Sprott Asset Management earlier this year. It is Newmont’s policy not to comment on the viewpoints of any individual firms, including Sprott. If you are seeking an objective analysis of the report from a respected market commentator, we would suggest the September 14, 2004 issue of The Gartman Letter.

For further clarification, Newmont’s core business is gold mining. As you are probably aware, Newmont has steadfastly maintained a non-hedging philosophy with respect to gold because we believe that investors want maximum exposure to the gold price. We are not affiliated with, and have no control over, the bullion or central banks. Ultimately, we do not believe that any market can be controlled over an extended period of time. Finally, we do not intend to discuss this report with our shareholders, although any matters that would require shareholder approval will be included in the next proxy statement, which will be filed with the SEC and mailed to shareholders in spring 2005.

If you have any additional questions, please send us an e-mail or call us at 1-800-810-6463. Thank you for your interest in Newmont.

Sincerely,
Newmont Investor Relations

Objective analysis of respected commentator GARTMAN, whose acknowledged clients are Barrick Gold and the bullion banks in The Gold Gartel????!!!!????!!!! That is like asking a Republican campaign strategist what he thinks of the Democrats views.

Wistar responds:

From: Wistar Holt [mailto:wholt@holtshapard.com]
Sent: Wednesday, September 22, 2004 9:55 AM
To: 'Jennifer.VanDinter@Newmont.com'
Subject: RE: Wistar Holt @ Holt & Shapard Capital Management

Well Ms. VanDinter,
You certainly "tipped your hand" by suggesting I review the Gartman Letter, referring to it as "objective." To put it mildly, you are out to lunch! That report like a few other rebuttals is weak, unsubstantiated, and very biased. Now, let me tell you how I really feel about this manipulation issue.

It is frustrating to my clients and me to witness such blatant suppression of gold and silver. Ultimately, I would like to see the mining industry uniformly pursue legal actions against the bullion banks, minimizing the time and expense by utilizing much of the documentation provided by GATA, Sprott, Blanchard, and others. Perhaps the mere filing of a collective class action suit would be enough to force them to back away from their secretive, manipulative acts. According to the S.E.C., manipulation of markets is clearly illegal. Lately, the price action of gold and silver leads me to believe (after 25 years of market experience) that J.P. Morgan, Goldman Sachs, et al are committing acts of crime in the market on a daily basis. Whether it be the "capping" of gold at benchmark levels like $410, or the sudden sharp, inexplicable $7 decline following hours or days of price stability whereby the seller ironically shows no interest in maximizing the selling price, or the sudden sharp multi-point decline in the HUI index in the last few minutes of trading suspiciously vindicated by a sharp decline in the gold price overnight or the next morning, or the almost "automatic" sharp decline at the opening of COMEX trading, or the limited $6-8 upside "rule" on the most bullish of days far exceeded by the downside on declining days; this doesn’t add up amidst the extremely bullish fundamentals like rising deficits, soaring oil, escalating debt, depleting savings, unlimited fiat paper/money supply, and a weak dollar.

Ms. VanDinter, as mentioned above, I happen to strongly disagree with your point that, "we (Newmont) have no control over the bullion or central banks. Personally, I believe you have more control than Blanchard and Company, Inc. Take a look at what they are doing about it; a fresh class-action lawsuit which may ultimately contain many of YOUR shareholders! You don’t think, "…any market can be controlled over an extended period of time." Well GATA has documentation that gold has been manipulated since the mid ‘90’s! What is your definition of "extended period of time?" Guess what, some of us Newmont shareholders would like to see it all settled WITHIN OUR LIFETIME!

Frustratingly, after reading your response, I’m still not sure whether you (Newmont) believe that gold is manipulated but "have no control over the bullion or central banks." Or, you don’t believe it exists at all. Which is it? Is there a risk or consequence to an acknowledgment? I would like to know.

Respectfully,
Wistar Holt

Houston’s Dan Norcini back to Wistar Holt:

Hello Wistar:

Thanks for the email and the exchange between you and that nitwit in Investor Relations that Newmont must have found at the local charity house.

The major mining companies are totally and completely useless and a bunch of gutless wonders. Imagine the holy hell we would be hearing from the techies or dot coms if it was found out that the feds had been surreptitiously manipulating the price of computer chips on the basis of some contrived nonsense such as "national security". Do you think for one moment that chipmakers would stand mutely by and allow it happen? Yet here we have a case where the profitability of these damn fools are directly affected and we hear such drivel as "we have no control over the bullion banks". We are not talking about "CONTROL OVER", we are talking about fighting them. Hell, why not just lay down in front of them and say" "Here I am, come and do with me anything you want".

I would think that these people would show a bit more frustration and righteous indignation. Instead they are as passionless as a corpse. A pox on the whole lot of them.

About New Orleans. - I will be there. Look forward to meeting you buddy.
best,
Dan

Perhaps no company has been more disappointing to GATA over the last half decade than Newmont Mining. With their clout in the state of Colorado and Nevada, and potential political influence with the US Congress, it is my opinion they could have put an end to the manipulation of the gold price years ago. Instead, they have chosen to remain silent and not to act in the best interest of their shareholders. Some of the bummers:

*When we met with Congress in 2001, they told us if the gold price was suppressed why was Newmont silent?
*I have met President Wayne Murdy twice, once at a private dinner during the Denver Gold Group Conference when GATA conducted its fax bombing attack at the attending CEO’s. Wayne is a very nice fellow, but a mainstream powderpuff.
*Newmont has not had the courtesy to respond to GATA’s phone calls or emails.
*Newmont actually returned an email to their CEO saying they never received it. Huh??? That is a first.
*Chairman Pierre Lassonde, the one man who could do so much for the gold industry, has chosen to cop out and do nothing. A HUGE disappointment in my book.

Retro time again. Back to some excerpts from the MIDAS of:

July 31, 2000 - Spot Gold $277 down $1 - Spot Silver $4.99 up 4 cents

So now what? I can't tell you how buoyed up I am from the feedback about how GATA is gaining ground behind the scenes. All of us ARE being heard and more than I can let on at the moment. There is only one place that we are not being heard, to the best of my knowledge: by the gold producers in the United States.

It is a shame that GATA's biggest obstacle to helping gold investors, gold company shareholders and gold miners, geologists, etc, are the people that should be our biggest supporters. It is the big U.S. gold producers that have hindered Congress' investigation of the gold market as they go "duh" when staff members of US Senators and Congressman contact them as to GATA's claims. They could urge Congress on instead of responding, "what manipulation, what sizable gold loans, what gold derivatives problem??????????"

Time to take the gloves off.

To Newmont Mining shareholders:

The Gold Anti-Trust Action Committee has courted Newmont's financial support and moral support for well over a year now. One year ago, Larry Kurlander, one of their senior executives, came to Dallas to pick my brain and we spoke for over 3 hours. Then, he met with Frank Veneroso of Veneroso Associates in Newark, New Jersey for about the same amount of time. My meeting with Larry, a nice enough fellow, who rides a Harley over the countryside for recreation and fun, was very business-like, and could not have been more cordial. While he has a nice salary, it was my time on my dime.

Since then, he refuses to take my phone calls and will not correspond at all. Worse, I called Chairman Ron Cambre's office to get his email address to send him some information. In the strangest return email in history, his office sent my email back saying that was not Ron Cambre's email address (after they gave it to me), thus "suggesting" that he could not have received an email from me in the first place. Good Lord. What did Larry Kurlander, a former District Attorney with extensive Washington contacts tell Cambre? Does Newmont know about the ESF, the Fed, and the rest of the mob and is so afraid that GATA is right that they have to send back emails? - that they won't even accept phone calls when we are trying to help their own shareholders?

Why do I go into this now? Because in ONE week, one of their popular Colorado Senators has immediately gone to bat for one of this Colorado constituents regarding the ESF and this July 23 Midas commentary:

"The Gold Anti-Trust Action Committee believes that Congress and US citizens have a right to know if they have been involved in the gold market in any way over the past couple of years. Chris Powell, GATA Treasurer/Secretary, has taken action in this arena and forwarded this sample letter to the Café in case you wish to take some action yourself:

"U.S. Sen. / U.S. Rep. ----------
U.S. Senate / U.S. House of Representatives
Washington, D.C. 20510 / 20515
"Dear Senator / Representative --------:

I write to you with concerns about questionable activities in the gold market, in the hope that you might be able to get answers for me.

"First, I am concerned that the Commodities Futures Trading Commission seems to be indifferent to the manipulation of the gold price in the Comex gold market by the strangely disproportionate and seemingly coordinated sale of futures contacts and options by J.P. Morgan & Co., Goldman Sachs & Co., and Deutsche Bank. I would be grateful if you could bring this to the attention of the commission's chairman, William Rainer, and ask him if the commission lately has reviewed the gold market generally and the role of Morgan, Goldman Sachs, and Deutsche Bank particularly.

"Second, I am concerned about the profits and losses recently reported by the U.S. Treasury Department's Exchange Stabilization Fund. According to a gold market analyst, Reginald H. Howe, the profits and losses recently reported by the ESF correspond very closely with changes in the price of gold, the ESF showing profits when gold's price falls and losses when it rises. The implication is that the ESF is selling futures, options, or other financial instruments related to gold to keep the price down.

"As you may know, the ESF is under the direct control of the President and the Treasury Secretary, and it seems to me that only they can speak authoritatively about the ESF's activities. So would you consider asking the Treasury Secretary to explain exactly how the ESF's profits and losses have been generated in the last two years and whether those "profits and losses have involved gold in any way? I very much would like to know. I suspect that the financial world would be interested in the answer too.

Thanks for whatever you can do."

End.

I urge every Newmont shareholder to ask Newmont Mining Chairman Ron Cambre, and President Wayne Murdy, if they have requested the same? If not, why not?

When I spoke with John Mielke of the CFTC today, I told him when the gold price explodes and creates financial problems the most asked question will be, "how could that have happened?" If he does not look into the obvious, then he might be held accountable some day. The same is true of Cambre and Murdy. Put them on notice, Newmont shareholders! It will all come out in the eventual gold market scandal investigation of who did what when notified. Just the way it is!

The Republican Party Convention in the US is in high glory now with many people with diverse views (pro-life/pro-choice) coming to together to root on their party and their man for President, George W. Bush. Newmont need not agree with all that GATA has to say, or even be associated with us, but can't they at least do what one American Indian has already done; what one proud American Senator of their own State is doing! Ben Nighthorse Campbell is known for being a stand up guy. How about you - Ron Cambre and Wayne Murdy?

I encourage every Café member who has some time to call or email Wayne Murdy or Pierre Lassonde at Newmont if you are as disgusted with them as I am.

MIDAS

I urge the GATA ARMY to go into action again. Contact Wayne Murdy and Pierre Lassonde by phone or email and register your own thoughts with them. It takes so little time. Yet, if thousands contact them, it will at least get their attention.

To RAP up, the gold shares held very well today with the silver shares the strongest. The XAU gave up .56 of yesterday’s advance to 95.81, while the HUI lost 1.12 to 213.24.

Only a matter to time before gold busts through $412. Gold, silver and the shares remain THE historic investment opportunity of a lifetime.

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

FYI on the preparation of the MIDAS:

As soon as one MIDAS is done, information for the next one is collected. I present to you what is of most interest to me as a precious metals investor, using my many years of experience in this arena. Naturally, I cull it out to what I believe will be most beneficial for you. This goes on until the MIDAS goes up.

There is no way I can do all of this and have it perfect edited and corrected by 5:30 to 6:00 (approx) East Coast time. Therefore, I do the best I can and get it out there for readers on the East Coast US, figuring the timeliness is more important to most than the cleanest copy possible. I am fortunate to have a fantastic editor named Sarge who gets on the case as soon as it is up, or as soon as he returns from other duties. He then does the final edit and corrects any factual mistakes I might have made. With his "Mensa" mind, he doesn’t miss much. If anyone out there is looking for a superb find in this area, you may reach Michael at unclemikey@citlink.net

This is why the MIDAS copies are so much cleaner later in the evening. Some of you might have seen a bunch of mistakes, or writing of a lesser quality, in last evening’s MIDAS 2000 Barrick re-run commentaries. That was before Sarge showed up.