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CARTEL CAPITULATION WATCH
The US stock market opened higher, failed, rallied again back to its highs and then flopped very late in the day. Terrible market action. An oversold DOW closed at 10,063, down 1 and the yelping DOG sank 8 to 1901.
This is not good:
Report Says Medicare to Go Broke by 2019
Mar 23, 1:03 PM (ET)
By MARK SHERMAN and LEIGH STROPE
WASHINGTON (AP) - Medicare will have to begin dipping into its trust fund this year to keep up with expenditures and will go broke by 2019 without changes in a program that is swelling because of rising health costs, trustees reported Tuesday.
Social Security's finances showed little change, and its projected insolvency date remained 2042.
The deteriorating financial picture for the health care program for older and disabled Americans is a result, in part, of the new Medicare prescription drug law that will swell costs by more than $500 billion over 10 years, according to the annual report by government trustees.
Provisions of the law that President Bush signed into law in December "raise serious doubt about the sustainability of Medicare under current financing arrangements," the trustees said.
The 2019 go-broke date for the Medicare trust fund, which is devoted primarily to paying beneficiaries' hospital bills, is seven years sooner than what the trustees projected last year.
-END-
But, there is no inflation:
Kleenex Maker to Raise Prices in U.S.
DALLAS - Kimberly-Clark Corp., the maker of Kleenex tissues and Scott paper towels, Tuesday said it plans to raise consumer prices of tissue products in the United States by an average of about 6 percent during the third quarter. br> The company said prices for bathroom tissue, paper towels and napkins will be increased effective July 11. Facial tissue prices will rise beginning Aug. 29.
The Dallas-based company said the increases are necessary to offset inflated raw-material costs, particularly for fiber, as well as higher energy costs.
-END-
GATA’s Mike Bolser:
Hi Bill:
The Fed added $5.25 Billion in repos today March 23rd 2004 and this moved the repo pool a bit up to $27.83 Billion. The Fed continues to gradually turn up the support throttle but seems in no great hurry to turn things up again.
The DOWs tiny dip has scared more than a few investors hoping for financial utopia but they shouldn't worry too much. I say this because the DOW's 30-day moving average has just about re intercepted its former linear growth trend line (around 10,500). I expect the ma to slowly turn back up as the DOW begins to respond upward. I think the Fed is a bit worried, not that the DOW could fall but that it might rise too fast again under their repo whip. Their intervention is a high octane boost to the periods of main market buying and a soft cushion to the selling episodes like we just experienced.
Red Silver
A persistent story from the rumor mills is something called red mercury. The stories emanate from Russia and tell of magical powers for this rare substance...the source of which has never been found. High explosives, trans-mutated gold, radioactive pre-curser to uranium...all these wonderful properties are hawked on the black market by certain Russian hucksters to gullible buyers. It's a clever scheme to bilk the unsuspecting investor but has it reappeared in another form today?
Silver volume reports from the LBMA are conspicuously late for the February data:
http://www.lbma.org.uk/clearing_table.htm
Unlike the Russian red mercury scam, the LBMA silver reporting situation raises a real and conspicuous RED flag because it coincides with other, credible reports to GATA of a large delivery deficit (10s of millions of ounces) for silver at the LBMA. If true, silver could deliver explosive returns unlike the mythical red mercury. Combined with a rapidly rising silver price and a painfully obvious divergence from gold, the above facts are rapidly converging to a market climax.
Why are they late?
The LBMA may be late because they are reformulating their reporting methodology (emulating the BLS and PPI fiasco) but they haven't suggested this in prior communications as the BLS did. Indeed, the LBMA normally reports on the 12th to 15th of each month. Perhaps the delay is because there has been a massive upward spike in silver volume from last month's spike to 143.3 Million ounces per day from 101.1 in December 2003. If so, there would be no possible doubt left that Professor Obstfelt's T* date had arrived for silver.
"The date T*...is the date on which the price-fixing scheme collapses; it does so after a speculative attack in which private market participants acquire all of the remaining official gold (in today's case, silver) at price p (the prevailing market price)." The Logic of Currency Crises 1994 page 192, Banque de France cashiers economiques et monitaires.
The markedly rising volume in silver after a long period of reduction is a classical example of the end of a price-fixing scheme and we may be there at this moment. A big jump in February LBMA volume (when and if it is released) will be a telling blow to silver bears and catch them off guard. I can only wonder, this morning, if the cartel has made sufficient LBMA default plans to avoid the likely market chaos...or if that is even possible.
Mike
JP Morgan Chase and their derivatives action:
Bill;
This one flew in under the radar. From gold swaps to the inevitable......................... oil swaps. Sound familiar?
Story at: http://www.warprofiteers.com/article.php?id=9848
Banking on Empire
Mitch Jeserich
February 4th, 2004
Iraqi ministries will now be able to borrow billions of dollars to buy much-needed equipment from overseas suppliers, but only by mortgaging the national oil revenues through a bank managed by JP Morgan Chase.
If I know these clowns the way I think I know them - they're gonna sell all that oil forward on NYMEX, force delivery to suppress the price while collecting the premiums from future sales and investing them. Looks like the derivatives book at JPM just got a new lease on life. Go ahead....call me a skeptic.
best
Rob
Input on silver:
Bill, g'day.
Just had a day of negotiating an OTC silver options position. Very interesting.
Firstly the spread is way out there - to be expected I suppose given the volatility. But the interesting thing is there's no more 'little guy' positions on offer. A month back one could take up a 30,000 position quite readily, and while always having a small premium over Comex, I understand quite a few used be written at this quantity or multiples thereof. No more.The buy-in now is for a 250,000 oz minimum. Now that needs a fair bit of bondoola to put on the table to get set and it's certainly out of the little league, but it also does something else. It makes it much less likely that the OTC position won't get called for delivery. 30,000 oz is one ton. Handleable with some logistical difficulty. 250,000 oz is around 9 ton. Some task. And even for a manufacturer, who needs 9 ton at one time? Obviously too many pesky little fish sniffing around the paper game looking for delivery.
Regards,
Ian
An alert from a Café member:
"We have in the USA a Foreign Sales Corp. law that allows exporters to subtract a part of their profits from taxation. A couple of years ago, a world trade court ruled this to be an illegal subsidy of U.S. business. We did nothing and the legislation is still in force. Three weeks ago, EU ministers threatened action. Now they have taken it retroactively. Included in the retaliation are Bullion Bars of gold going into London from the U.S. If the gold goes through a central bank or a member of the exchange as "monetary gold" it will not have a tariff. The current rate is 5% and it will increase by 1% every month. Switzerland is not a member, but companies that normally ship physical to London are "screwed" unless they can find a way to show their exports as "monetary gold". If this isn't straightened out quickly we expect London gold to go to a premium over New York and for NYMEX deliveries to increase for April and especially for June. Spreads between futures contracts will be strange as traders try and figure out ways to deal with the tariff."
This recent development most likely affects silver also and could cause even more dramatic tightness in the London market.
Asia Gold-High prices scare off buyers, India may emerge
By Lewa Pardomuan and Atul Prakash
SINGAPORE/BOMBAY, March 23 (Reuters) - Asia's physical gold market has slowed this week to a trickle after prices rose to two-month highs but top buyer India is likely to resume buying soon because of the wedding season, dealers said on Tuesday.
Zitat"I think April and May will be good months for gold demand as we have many marriages, and summer harvests are also likely to be good,"
said Kamal Gupta, chairman of New Delhi-based P P Jewellers, a leading jeweller…..
…..other traders said consumers in India would become less price sensitive because of good oilseeds and grains harvests and the ongoing Hindu marriage season, during which parents give gold to their daughters for financial security.
Zitat"You can't avoid compulsory buying in India. People have to buy gold for marriages despite high prices,"
said Harmesh Arora, vice president of the Bombay Bullion Association.
Harvesting of summer crops, sown in October and November, has begun in some parts of India. The country is expected to reap a bumper crop of grains and oilseeds this year after good monsoon rains in 2003.
About 65 percent of India's population depends on agriculture.
-END-
GATA supporter and ably run Seabridge Gold just turned in some nice exploration results:
http://web1.kitco.com/pr/1140/article_03232004135249.pdf
On the pitiful gold share action:
Bill,
This market kind of feels like the "Night of the Living Dead". Gold is up $28 from the lows, but the gold shares have not budged. Indeed, trading volumes are almost non-existent for some stocks.
It seems, the higher the gold price, the more bearish the sentiment. Very strange!
Nick Ferris
J-Pacific Gold Inc.
nferris@jpgold.com
http://www.jpgold.com
It sure is strange, Nick. The gold shares seem to be paying more attention to the euro/dollar than gold. Silver keeps making 15-year highs, gold just rallied $24.50 in 7days, and all it produces is a big yawn from would-be gold/silver share investors. It’s as if they are saying we don’t believe the gold and silver move is for real.
One of these days the for real light bulb is going to go off and most of the investment world will all want in at the same time. It will be some kind of gold share rush.
The XAU finished the day at 101.40, up .71 and the HUI gained 3.20 to 229.87. It did manage to close on its highs.
For all the reasons discussed in yesterday’s MIDAS, it seems tension in the financial markets is really picking up steam. You can almost feel the fragility. The extraordinary gold action these past 7 days may be telling us something, that something big is about to rock the markets. Gold could blow through $430 before you know it. Meanwhile, much of the world has run out of silver. The jig is up for the price managers. Don’t be surprised if silver doesn’t rocket through $8 on its way to $10 per ounce for a first stop. Much fun and money to be made in the days, weeks and months ahead.
GATA BE IN IT TO WIN IT!