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

CARTEL CAPITULATION WATCH

Oh boy is the US stock market looking putrid! Another early rally failed. The DOW even closed below psychologically key 10,400 support at 10,392, down 78. The DOG can’t sink fast enough. It barked its way down another 12 to 2034. What lies ahead is ominous:

Dow set for worst new-year losing streak since '82

NEW YORK (Reuters) - The Dow Jones was looking set to close lower for the week Friday -- marking the first time in more than 20 years it has fallen for the first three weeks of the start of a year.

Dow Jones Indexes said the last time the Dow had fallen for the first three weeks of a year was 1982.

A weak January could set the tone for the months ahead, said Robert Drust, managing director of listed trading at regional investment bank Wedbush Morgan.

"It seems to me that it sets the tone for how people will position themselves for the coming months," he said. "I think traders have been disappointed with what's going on in January and will be more cautious going forward and less likely to buy on the dips."

Heading into the final hour of trading, the Dow on track to end the week 1.2 percent lower, its fourth consecutive week of losses.

-END-

18:01 Semi equipment book/bill ratio 0.95 in December vs consensus 0.97
* * * * *

18:05 Follow-up: Semi equipment book/bill ratio 0.95 in December
Bookings fell (7.1%) to $1.235B vs a consensus of (10.1%). Billings fell (2.6%)vs consensus (7.3%). November was revised to 0.99 from 1.00.
* * * * *

09:49 Univ. of Michigan Confidence 95.8 vs. consensus 97.5 Prior reading 97.1.
* * * * *

Talk about confusion at the Fed:

Greenspan against faster rate hikes - BusinessWeek

NEW YORK, Jan 21 (Reuters) - Federal Reserve Chairman Alan Greenspan is comfortable with the current measured pace of U.S. interest rate hikes and does not favor a more aggressive policy, a report in the online version of BusinessWeek magazine said on Friday.

The report noted that with the Fed's Feb 1-2 policy meeting fast approaching, investors were fretting that Greenspan and his central bank colleagues might want to junk their go-slow strategy of bite-size interest rate hikes in favor of something more aggressive.

"But those concerns don't seem to have fazed the man atop the Fed," said the report, written by Fed watcher Rich Miller. "Associates say the chairman has shown no signs of panic and appears content with the strategy of small, slow rate hikes -- one-quarter of a percentage point at each meeting."

"Indeed, with another quarter-point hike expected at the Feb. 1-2 meeting, short-term rates will be inching closer to levels where some Fed officials might even consider taking a break from their rate-hiking campaign," the BusinesWeek report said.

Minutes of the last Fed policy meeting in December showed some board members were growing concerned about inflation and some fretted about excessive risk-taking in financial markets, leading analysts to wonder if the Fed as a whole might decide to speed up its rate hikes.

However, recent comments from members have been more balanced, with many playing down the reaction to the minutes while expressing confidence that inflation will stay contained.

-END-

Rhody on the lease rates:

Good morning Bill:
As you can see from the imbedded chart, gold lease rates are rising, particularly in the 1 to 6 month terms. This implies leasing to control spot prices. Your theory that this is designed to hold gold down during the inauguration of Shrub is a possibility. So is holding gold down prior to the G7 meeting next month as the US likely faces an ultimatum from its trading partners: fix the dollar or fix the deficits or the dollar will be allowed to free-float. There is a third possibility. The present price of gold at $422 is equal to $35 per ounce in 1960 dollars. Capping the price at this level means the value of gold has gone nowhere for 65 years. This is a message that I'm sure the Fed wants to broadcast. (Mind you if you adjust the DOW for inflation, it reduces to under 1000 too in 1960 terms) The point I am trying to make is that $422 gold is a price level that the Fed may be inclined to defend.

Silver is still more expensive to lease than gold, but lease rates are stable here to slightly weaker. You can still lease gold for one year for the cost of leasing silver for one month. Despite this implied tightness in the silver supply, silver is far cheaper proportionately than gold. If the present price of gold is $35 in 1960 dollars, the present price of silver is 55 cents in 1960 terms. Gold was actually $35 in 1960, but silver was going through a weak patch then, averaging 93 cents. That makes silver at least 40% under-valued right now relative to gold.
Regards, Rhody.

1. Nanik checks in from the Canary Islands:

1. XAU and the HUI gold mining indices have a bullish falling wedge on their charts. That bodes well for a strengthening market.

2. Both the XAU and HUI have an inverted head and shoulders pattern. The last time, I saw this inverted head and shoulders was when crude oil was around 36.- dlrs, and you saw where crude went: to 55 dlrs. But this inverted head and shoulders pattern is valid so long as the XAU and HUI remain above 93.- and 190 respectively. So far, this seems to be the case. In fact, the two indices are holding up pretty well.

3. You will see the same inverted head and shoulders pattern in NEM-Newmont Mining, which is the bellwether stock of the gold share market.

4. Silver is holding at its 200 day moving average. Every time, it holds this level, it rallies about 60 to 80 cents.

5. If this pattern continues for another two weeks, we could have a positive market in February.

Right now, there is a boxing contest going on between up pretty well. This reminds me of Sylvester Stallone in Rocky Three, when he faced a formidable opponent, took several blows and won in the last round.

I feel gold will win this boxing contest in February.

Best regards,
Nanik

The gold/silver shares woke up. About time. The XAU gained 1.94 to 95.06 and the HUI rose 5.45 to 209.90, right below 210 resistance.

As you have heard from me for a couple of weeks, the gold shares are set up to fly as there are so few investors still on board, except us ole-timers. Many of the disgruntled have run for the hills. At the same time most of the gold pundits are neutral to bearish and the Wall Street crowd still can’t spell gold and silver yet. All of those not in at the present, will want in soon. As this occurs, and if it happens simultaneously, the gold and silver shares could go ballistic.

GATA BE IN IT TO WIN IT!

MIDAS

positive Goldanalyse von David Chapman:

http://www.321gold.com/editori…n_d/chapman_d_012405.html

Le Metropole Members,

DALLAS--(BUSINESS WIRE)--Jan. 24, 2005--The Gold Anti-Trust Action Committee will host an international conference Aug. 8 and 9 in Dawson City in Canada's Yukon, the center of the Klondike Gold Rush at the turn of the 19th century, to discuss the suppression of the prices of gold and silver and the need for new representation of precious metals investors and the mining industry.

The announcement was made by GATA Chairman Bill Murphy at the Vancouver Resources Investment Conference in Vancouver, British Columbia.

"Since Dawson City represents the golden excitement of the past, this historic location is just the place for our conference as we enter a new time of excitement for gold," Murphy said. "We will call our gathering Gold Rush 21."

Murphy listed these goals for the conference:

- Expand GATA's role as an advocate for the precious metals industry.

- Offer the mining industry and precious metals investors an alternative to the World Gold Council, which represents no more than 20 gold companies and has done little for those it purports to represent. GATA will seek to include more of the industry and will not align itself with the bullion banks and jewelry interests, which want precious metals prices suppressed. More than 40 mining and precious metals-related companies have supported GATA in recent years, and GATA believes that it can raise that total to 200.

- Spread GATA's message that the gold and silver markets are not free and not fair, and develop ways to change that. Renowned gold experts from five continents will come to the conference and explain and discuss the price manipulation committed by the gold and silver cartels. The conference will show who has done it, why they did it, and what can be done about it.

- Give conference participants a memorable trip to Klondike Gold Rush country so they can see what a gold rush was and what one might be again. GATA expects that conference participants will forge memorable relationships.

- Receive suggestions from conference participants about how GATA can best build long-term support from the precious metals industry.

The speakers at Gold Rush 21 will include:

- Ferdinand Lips of Zurich, Switzerland. He has been managing director of Rothschild Bank AG in Zurich, CEO of his own private bank (Bank Lips), and a director of Randgold Resources, Durban Roodeport Deep, and Afrikander Lease. Now he is chairman and manager of the Top-Gold Fund, based in Liechtenstein. He has written four books on the gold market, his latest being "Gold Wars."

- Peter George of Cape Town, South Africa. A graduate of Oxford University in England and the University of Cape Town, where he received his MBA, George was a member of the Johannesburg Stock Exchange from 1969-1981 and was senior partner of the Johannesburg stockbrokerage Saunders & Taylor. He became known as South Africa's "Mister Gold," during that period. Peter helped organize the GATA African Gold Summit in Durban, South Africa, in May 2001. Five sub-Saharan African nations attended that conference, along with representatives of major South African gold producers and the South African mine workers union. The summit was heavily reported by the South African Broadcasting Co.

- John Embry of Toronto. Just as George is known as "Mister Gold" in South Africa, Embry is becoming known as "Mister Gold" in Canada. After an illustrious career at the Royal Bank of Canada, where he oversaw $5 billion in mutual fund assets and recorded an astounding return of 153 percent in 2002, in 2003 Embry became chief investment strategist at Sprott Asset Management. He was co-author of Sprott's important research study, "Not Free, Not Fair: The Long-Term Manipulation of the Gold Price," which validated GATA's work. There is no more admired figure in the mining industry.

- Hugo Salinas Price, who may be regarded as Mexico's "Mister Silver." Salinas Price is leading the campaign to remonetize silver in his country, the world's foremost producer of silver. Last November governors of all 31 Mexican states sent a letter to the Ways and Means Committee of the Mexican House of Representatives to urge approval of legislation to remonetize silver. Nearly 200 Mexican journalists signed a declaration in support of the legislation. A poll by the Mexican television network TV Azteca found that 96 percent of viewers approved the remonetization of silver. It seems that the only major opponent of the silver legislation in Mexico is Mexico's central bank.

- Reginald H. Howe of Massachusetts. A successful trial lawyer in Boston and proprietor of the GoldenSextant.com Internet site, Howe took on the entire Gold Cartel in U.S. District Court in Boston in 2001 by suing the Bank for International Settlements, the U.S. Federal Reserve Board, the U.S. Treasury Department, J.P. Morgan Chase, Citigroup, Goldman Sachs Group, and Deutsche Bank AG. Howe stood against more than a dozen of the highest-powered lawyers in the world. His lawsuit has been renewed by Blanchard Coin & Bullion's suit against J.P. Morgan Chase and Barrick Gold in U.S. District Court in New Orleans.

- James Turk of New Hampshire. Turk, a former banker and manager of the commodity department of the Abu Dhabi Investment Authority, is editor of the Freemarket Gold & Money Report and founder of GoldMoney.com. He is also the co-author of "The Coming Collapse of the Dollar," just published by Doubleday.

These men fight every day on behalf of gold and silver investors and mining companies.

Facilities in Dawson City are very limited, so GATA will have to restrict invitations to mining company executives and investment fund managers, the people who are in the best position to help us push the industry forward. Mining company executives and fund managers who would like to attend Gold Rush 21 should write to GATA by e-mail at Registrar@GoldRush21.com and confirmations will be sent soon after that. More information about the conference can be found at its Internet site: http://www.goldrush21.com.

GATA extends its profound gratitude to Samex Mining and Klondike Star for their exceptional efforts behind the scenes to make this international conference a huge success.

CONTACT: Gold Anti-Trust Action Committee Inc., Manchester
Chris Powell, 860-646-7383/860-305-4013

GATA beginnt mehr Schlagkraft zu entwickeln und organisiert sich.

Analyse von Clive Roffey:

http://www.gold-eagle.com/editorials_05/roffey012405.html

Er ist bullisch für Gold und insb. für Durban Deep.

Roffey ist immer bullish

Durban Deep wochenchart sagt weiter hinunter RSI nog nicht am 25%

JP Morgan sieht den Silberkurs 2005 in einer Range zwischen 6,5 $ und 7,8 $:

http://www.mineweb.net/sections/whats_new/405932.htm

JP Morgan wird sich über die Kursentwicklung noch wundern, wenn der Silberkurs ausbricht !

January 24 - Gold $426.60 up 10 cents - Silver $6.83 up 4 cents

GATA And The North Country

The man who views the world at 50 the same as he did at 20 has wasted 30 years of his life...Muhammed Ali

A clarification is not to make oneself clear. It is to put oneself in the clear...Sir Humphrey Appleby

GO GATA!!!

This will be my shortest MIDAS ever. Just no time. Been running around attending to matters related to our Klondike gold conference in Dawson City in early August. Off to a reception for the Premier of the Yukon in 15 minutes.

The gold conference has been a huge success. Over 1000 people showed up at 11 this morning to listen to John Embry speak. More later on this conference and about our own in the North Country. Who can forget the movie "The North Country" with Jimmy Stewart. Dawson City was featured.

Was out of the loop today, yet could help but note how the stock market fell apart again. The DOG (2009, down 9) barked all day, while the DOW sank late to 10,368, down 24. Technically, both of these markets are in deep trouble.

Gold ought to be flying and should be by the end of the week. Silver too.

The dollar fell .07 to 83.27.

The John Brimelow Report

Good & Bad news. Gartman wavering.

Monday, January 24 2005

Indian ex-duty premiums: AM $4.59, PM $8.30, with world gold at $427.05 and $427.60 (corrected from earlier today). Slightly below, and ample, for legal imports. This is basis Bombay: the other Indian reporting points were narrowly viable for legal imports this morning. India returned from a three day weekend to find world gold abruptly $7 higher; but by the afternoon had clearly returned to import mode. UBS directly refers to

“decent physical demand from India and other Asian countries”

being seen in London this morning.

On the face of matters, TOCOM stepped aside: on volume equal to 19,440 Comex (+18.7%) the active contract rose 8 yen – world gold went out 80c above the NY close. But open interest managed to rise the equivalent of 630 Comex lots (to the equivalent of 109,834 Comex) and according to Mitsubishi the public increased its long by 1.4 tonnes. This is slightly surprising considering the steady rise in yen gold over the past week: normally one would expect to see liquidation. Perhaps the rumored accumulation of physical by the public ahead of the elimination of deposit insurance is the cause. NY on Friday traded 75,769 contracts (c. 53,000 net of switches). Open interest ominously rose 821 lots to 273,533.

This open interest rise is ominous because the CFTC data turned out to be the most dramatically gold-friendly in many months. Contrary to the expectations of UBS (which has a good eye in this area), the spec net long fell some 600,000 ozs to 10.21 Mm, rather than rising by 1Mm or so. This puts it at a level not seen since June last year, when gold was completing its last excursion into the $380s.

An authority not well liked by most of gold’s friends refers to this measure being down to a “must buy” point.

Perhaps most important of all, the reason for the decline in the net spec long was some aggressive large spec short selling. This short rose 5,549 lots (17.25 tonnes) in the week to January 19, much of it presumably in the drop from $425 to $422 early on. What is left of this is now of course under water. HSBC notes the arresting fact that the aggregate short is almost an all-time record. The previous occasions, Q2 ’99 (BoE sales panic) and late ’97 (break down from ’93-6 range) were phases of the spec community actually being net short.

Several observers attribute Friday’s powerful rally to short covering, which seem subjectively reasonable. Unfortunately, the lack of open interest decline suggests that the shorts – the most aggressive in several months – are being let out by a seller. So does today’s sideways crawl, in moderate volume (39,000 net of switches).

Speculator misjudgment of the physical market has been the hallmark of 2005 so far. But interestingly, even the Gartman letter is wavering in its negativism:

“We've not traded gold since we exited our long position so fortuitously back in December…We shall admit, however, that our interest again is being piqued...”

JB

CARTEL CAPITULATION WATCH

Financial Times

Central banks shift reserves away from US
By Chris Giles
Published: January 24 2005 00:03 | Last updated: January 24 2005 00:03
Central banks are shifting reserves away from the US and towards the eurozone in a move that looks set to deepen the Bush administration's difficulties in financing its ballooning current account deficit.

In actions likely to undermine the dollar's value on currency markets, 70 per cent of central bank reserve managers said they had increased their exposure to the euro over the past two years. The majority thought eurozone money and debt markets were as attractive a destination for investment as the US.

The findings emerge from a survey of central bank reserve managers published today and conducted between September and December of last year. About 65 central banks, controlling assets worth $1,700bn, took part and the results showed a marked change in attitude over the past two years.

Any rebalancing of central bank reserve portfolios has serious implications for the global financial system as the US has become increasingly dependent on official flows of funds to finance its current account deficit, estimated at $650bn in 2004.

At the end of 2003,central banks held 70 per cent of their official reserves in dollar-denominated assets and central bank purchases of US securities had financed more than 80 per cent of the US current account deficit in 2003.

Any reluctance to increase exposure to dollar assets further could cause the greenback to plunge on currency markets.

"The US cannot take support for the dollar for granted," said Nick Carver, one of the authors of the study conducted by Central Banking Publications, a company that specialises in reporting on

"Central banks' enthusiasm for the dollar seem to be cooling off."

In a further worrying sign for the greenback, 47 per cent of reserve managers surveyed said they expected the growth of official reserves to slow to less than 20 per cent over the next four years. Between the end of 2000 and mid-2004, official reserves had increased by 66 per cent.

Slower reserve accumulation growth implies the supply of official finance is likely to become more limited but few expect the demand from the US for finance to slow. The consensus among economists is that the US current account deficit will increase to $694bn in 2005.

More than 90p er cent of central bank reserve managers said that the income from reserve management was "important" or "very important".

In the two years since a similar survey was conducted, reserve managers had begun to seek higher returns for the money under management.

-END-

14:31 Treasury Secretary Snow says he is not losing confidence in 3% growth expectations for economy -- CNBC
Snow says that he believes the market will have "good" job creation, noting the domestic economy's basic fundamentals are "excellent." Faster overseas growth by U.S. trading partners is needed to reduce the current account deficit. As usual, Snow skirted the dollar issue when asked by CNBC's Ron Insana on an appropriate value for the currency.
* * * * *

Snow says US 'deeply committed' to cutting deficit

WASHINGTON, Jan 24 (Reuters) - U.S. Treasury Secretary John Snow said on Monday the Bush administration was committed to cutting huge U.S. budget and trade deficits, and said there should be no delay in overhauling Social Security.

However Snow, appearing on CNBC television, declined to say whether Federal Reserve Chairman Alan Greenspan is pressing the Bush administration for swifter action to ratchet down deficits.

"I won't get into our discussions with Chairman Greenspan, that wouldn't be appropriate," Snow said. "But I will say that this administration is deeply committed to fiscal responsibility, to controlling spending and to bringing the deficit down."

He said it was necessary to introduce changes to the Social Security reform system without delay, adding that failing to do so would mean "either huge tax increases or major benefit changes".

-END-

From Richard Russell this evening:

STOCKS -- My Most Active Stocks Index was down 5 to 395, and this Index is breaking down.

The five most active stocks on the NYSE today were -- LU down .06, PFE down .19, NT down .05, GE up .13, and MOT down.36. And Delta Air down 11.8% to 4.41.

VIX creeping up now -- up .29 to 14.17. The first inkling of concern among investors.

McClellan Oscillator was down 27 to minus 138 -- market staying oversold.

CONCLUSION -- I like this market action less and less. From its December 28 high of 10854.54, the Dow has now lost 486 points, and I don't hear any alarm bells ringing. For that matter, I don't sense any great concern. "Aw, it's just a correction; the market just got a bit overbought."

But I most definitely do not like this market action. I've seen markets like this dribble away and when investors finally become concerned the market finally falls apart (I believe they call that type of action "a crash").

My advice -- Be mostly in cash and golds, and for gold, mostly the actual metal. Hold stocks (such as utilities) that pay good dividends, but have stop losses under all your stocks. There appears to be a secret frenzy to buy income, as seen in the new highs in the long bond.

Frankly, it would not bother me to have almost all my liquid assets in cash and actual gold.

THERE'S SOMETHING VERY WEIRD ABOUT THIS MARKET. IT'S POSITIVELY CREEPY THE WAY THEY DIDDLE AROUND WITH IT ALL DAY -- AND THEN UNLOAD STOCKS AT THE CLOSE.

And every night, almost without fail, the S&P is higher. Who's trying to keep this market afloat? And why? And who's kidding who?

As I write this, half an hour after the close, the S&P is up 70 points. "Gosh, Mr. S&P, I feel so much better when I see that you're higher! Guess I'll hold my stocks for a little while longer."

And so we say good bye to Morbid Monday. Maybe Tuesday will look better.

-END-

Samex’s Los Zorros is heating up!

EXPLORATION DRILLING UPDATE – EXPLORATION AREA II - LOS ZORROS PROPERTY, CHILE

Follow the link for the full text; http://www.samex.com/news/aa-news-2005/NR1-January21-05.html

***.

The gold shares followed the general market lower with the XAU dropping .78 to 94.28. The HUI lost 2.02 to 207.88.

Short-term the gold/silver shares could do anything. However, what great buys out there. The risk/reward ratio is superb.

GATA BE IN IT TO WIN IT!

MIDAS

January 25 - Gold $421.90 down $4.70 - Silver $6.79 down 16 cents

A Disgusting Day

The really tough thing about humility is you can't brag about it... Gene Brown

GO GATA!!!!

After a day like today, it becomes so apparent why what GATA is doing is so important. As January fades into the history books, the PPT comes to the rescue to salvage what they can during the last week of the month. Yes, the stock market was due for a bounce. However, to see it soar on news the budget deficit is worsening, even as Treasury Secretary Snow continues to pontificate how the US is serious about reducing it, is a bit hard to take. Especially, since The Gold Cartel seemed determined to clobber gold.

What is particularly galling was to see gold trashed after the gold shares were hit hard yesterday for no apparent reason. We had many conversations in Vancouver the past several days on this sort of thing. The Gold Cartel plays the gold market like a fiddle. They know where they are going to take the market and when, cleaning up in the process. No wonder Goldman Sachs reports such wonderful profits. Not that hard to do when you know what kind of cards will be played and what sort of hand you are going to deal others in the game. Over the years the gold share action has telegraphed the action the next day in the bullion market time and time again.

Spent the last few days on our GOLD RUSH 21 conference, thus am still out of the loop as far as my normal gold due diligence routine. Out of here in an hour to head back to Dallas.

The AM Fix was $426.20. As happens so often, the damage to the gold price kicked in during the Comex trading hours.

The dollar was last at a tad over 84. Makes no sense for it to rally on this budget news.

Oil is over $49 and headed for $50. Who knows, maybe $60?

The John Brimelow Report

Blocked! A rescue from China?

Tuesday, January 25, 2005

Indian ex-duty premiums: AM $6.65, PM $$7.84, with world gold at $427.30 and $426.05. Adequate and ample for legal imports. The rupee was soft today.

TOCOM continued non-committal, and was clearly not the cause of gold’s slight firming in early Asian hours. Volume fell 19% to equal 15,705 Comex lots, the active contract closed down 1 yen, and world gold went out down 10c from the end in NY. Open interest inched up (by the equivalent of 323 Comex lots). Mitsubishi data implies that the public added 3.4 tonnes (1,093 Comex lots) to its long. (Gold in NY yesterday traded 81,706 lots -12% more than estimated – or about 48,000 net of switches. Open interest declined a modest 2,764 lots.)

Two ECB captive Central Banks sold 61Mm euros of gold last week, about 5.9 tonnes. This represents a slight acceleration. Yesterday, of course, the German Finance Minister made a point of not wishing to pressure the Bundesbank on the question of gold sales, but in the prevailing diplomatic/cultural climate, sale of the full WA quota from some source or other is to be expected.

Yesterday, with the startling news that speculators were much shorter than expected, and the physical market was tolerating Friday’s sharp rise in world gold, all the ingredients for a short squeeze were present. It did not happen, in Scotia Mocatta’s words:

“Dealers were happy to sell into the rally keeping the price from taking off to the upside.”

Effectively, a successful defense of the 100 day Feb gold MA was mounted. This resulted in the curious outcome, that, as Standard London put it,

“Gold had its narrowest trading range of the year to date with just 80 cents between the best bid of $427.80 and lowest offer of $427.00”

Very odd, given the news mix.

Today, China’s refusal to get off the Yuan undervaluation gravy train has triggered a $US/Financial Asset euphoria, not irrationally in view of the clear corollary benefit to the Bond market. Interestingly, this was presaged not only by a series of articles from the servants and groupies of benefiting financial institutions – HSBC, the “Economist” Bloomberg’s Caroline Baum, the Gartman letter – but also by the Shanghai Gold Exchange. There, gold traded at a discount to world gold from August to November, but then, with world gold moving to a 16 year high, started trading at a premium, which it retains. Clearly the local gold market knew that no local-gold price damaging revaluation would occur.

How severe the distortion caused by Washington’s connivance at this arrangement is appears from a remark in a column today by the FT’s Lex;

“China's reserves increased by 50 per cent in 2004 to reach $610bn and Beijing overtook Japan as last year's biggest buyer [of $US –JB]. This reserve accumulation, the vast bulk of which is held in dollars, equated to almost a third of the US current account deficit.”

When China fixed against the dollar, in 1993, it had reserves of some $50 billion.

This rate of change, and aggregate magnitude, means China’s apologists are essentially arguing that a Dow Jones constituent earning 200% on its equity is running a normal business.

Comforting to gold’s friends is that distortions of this type invariably end in shattering financial disruptions and confidence loss. My CBSMarketWatch discussion of the China problem is in the Appendix.

JB

CARTEL CAPITULATION WATCH

US economic news:

09:08 CBO sees f05 budget gap at $368B vs. prior forecast of $348B -- Reuters
* * * *

10:00 Dec. Existing Home Sales reported 6.69M vs. consensus 6.8M
Prior reading revised to 6.92M from 6.94M.
* * * * *

10:00 Jan. Consumer Confidence reported 103.4vs. consensus 101
Prior reading revised to 102.7 from 102.3.
* * * * *

WASHINGTON, Jan 25 (Reuters) - Factory activity in the U.S. Central Atlantic region edged higher in January as new orders saw a healthy gain, a survey showed on Tuesday.

The Richmond Federal Reserve Bank said its composite manufacturing index rose to 2 in January from 1 in December. This new index draws from the shipments, new orders and employment indices long published by the regional Fed bank.

The Richmond Fed said its shipment index came in at -7 for January after a flat reading in December, but its reading on its employment index gained to 4 from December's 2 and new orders rose to 7 from zero. It was the fastest pace of new orders growth since last September.

In addition, the survey found the backlog of orders at factories continued to shrink while the workweek lengthened, and the amount of manufacturing capacity being used increased for the first time in months….

-END-