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

Es werden immer wieder Derivate und Zertifikate empfohlen, glaube aber keiner ist sich dessen Risiko bewust.In Wirklichkeit werden keine Vermögensgegenstände erworben, sondern es werden Kredite vergeben! Das sind Weten auf alles, fallende , steigende Kurse von Aktien, Rohstoffen ect. lohnen tut sich das meistens nur für die Emittenten, denn als Provatanleger gewährt man der emittierenden Bank beim Kauf von Zertifikaten praktisch einen zinslosen Kredit ohne jede Sicherheit.Wenn dei Bank Pleite macht ist man séin Geld los, denn hier gibt es keine Einlagensicherung, noch gilt ein Zertifikat als Sonmdervermögen, das - wie bei Fonds- noch den Anlegern gehöhrt.Bei Gold - Silber und anderen Edelmetallzertifikaten kann das ganz schnell passieren. Hier spielt offt die Gier und die Angst eine große Rolle.Da ist mir pysische Ware alle mal lieber. Gold und Silber haben kein Bonitätsrisiko und es ist Schuldenfrei im Gegensatz zu jeder Anleihe, hier ist immer ein Schuldverhältnis vorhanden.
gruß hpoth

hpopth,

ich glaube,Du hast hier etwas völlig falsch verstanden,wenn ich hier was puschen wollte,hätte ich hier auch den entsprechenden O-S eines Emitenten gepostet.Seit der letzten Aktienblase zählen für mich nur noch reale Werte.Wollte eigentlich,nur einen Hinweis geben,dass das Gold zur Zeit in Börsenbriefen empfohlen wird.Ich persönlich halte Axel Retz für einen der besseren Analysten,Du hast sicherlich auch schon einiges von ihm gelesen,und hast Dir Dein Bild über ihn gemacht.

Wenn Gold empfohlen wird,ist das doch nicht schlecht für uns,oder?und dann kommt eben ein Hinweis von mir.

schönes Wochenende

kalle

The James Joyce Table


Midas du Metropole

Topic du Jour

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July 16 - Gold $406.20 up $2.60 – Silver $6.69 up 6 cents

Oil, Copper, Silver, Bonds, Lumber, Euro RUN – Gold Capping Continues

Do not go where the path may lead, go instead where there is no path and leave a trail...Ralph Waldo Emerson

GO GATA!!!

I’m on my way to San Diego for my nephew’s wedding, so this MIDAS has been put out earlier than usual and might miss a few usual Friday afternoon goodies. Be back Monday night.

While waiting for the greatly waited for CPI report this morning, gold was due a $1 higher with the euro due close to unchanged. The report came out as follows:

08:30 June CPI reported 0.3% vs. consensus 0.2%; ex-Food & Energy reported 0.1% vs. consensus 0.2%
May CPI unrevised at 0.6%; ex-Food & Energy unrevised at 0.2%. –END-

The "streetaccounts" slant on the numbers:

08:32 CPI core rate tame again
Though the total CPI was a tenth higher than consensus at +0.3%, the more important core rate provided relief with a 0.1% increase. After some disconcerting readings earlier this year, the 0.2% increase in the May core rate and 0.1% increase in June provide welcome evidence that the earlier uptick was probably energy-related (as energy price hikes bled through to non-energy prices). –END-

Once again the CNBC crowd, their pundits and comments like the above continue to dismiss energy and food as less relative than other CPI components. What is so strange is the food and energy increases have been going on for some time and have not been a blip due a drought or temporary refinery closures. The reality of longer term rising food and energy prices and the corresponding implications are dismissed by Wall Street.

Year over year CPI is running something like 3.3%. The Fed Funds rate at 1 ¼% means the real interest rate picture in the US is very negative and very gold supportive. The Fed is way behind the interest rate curve from a real and historic perspective.

Why is the Fed so recalcitrant to keep pace with the real inflation rate in the US? Because the US economy is far weaker than Wall Street and Washington are letting on. As a result, the seniors and middle class are being squeezed. They are not making any money from savings accounts and other interest income (because of the incredibly low US interest rates), yet are being squeezed on the cost side. In addition, because the economy is weaker than reported, wages have been kept at bay. The average income is not keeping pace with the true inflation either.

The Fed is in a box. If they raise rates in the months to come, it will have an adverse affect on the US economy. If they don’t, then inflation will get further out of control. I’m no economist, however, this clearly seems to be the way it is based on all the numbers. Yet, we hear so little of this sort of commentary from the propaganda crowd in New York and Washington. Instead, they dismiss what they don’t like and focus on what best fits into the spin they want out there for the investing public.

Meanwhile, The Gold Cartel caps gold, for it is their Achilles Heel. Gold is the average man’s and Wall Street’s simplistic barometer of inflation. If bullion were to soar, US policies would be declared inflationary. Since it does not, the pundits all point to a subdued gold price as an indication all is well.

The bottom line is the Working Group on Financial Markets is being disingenuous with the average American and hiding the truth from them in the most perverse of ways. Perverse because this will all blow up some day and probably sooner rather than later. The average American investor won’t know what hit him or her. The Gold Cartel and friends are going to lose control of their market manipulation schemes and it is going to be ugly, real ugly. Stocks will be hit hard and the price of gold is going to rocket. Those not prepared for what is coming will be left behind when it comes to maintaining current living standards.

BOOM! This news just hit the tape:

09:02 US reports May net capital inflows of $56.4B after inflows of $76.0B in April
This was the lowest capital inflows total since October 2003, though these flows tend to be quite volatile from month to month. Dollar declines are being extended on this report: $1.2404, +$0.0049 against the euro, and Y108.91 -0.88 against the yen.
* * * * *
And gold took off.

So did the euro.

10:01 Euro/dollar rises to highest level since 3/2
Euro/dollar has risen in reaction to the CPI and the capital inflow numbers. Euro/dolar +$0.0098 to $1.2453

The implication of the capital flow numbers is obvious. Foreigners are less and less inclined to finance the enormous US deficits which are spinning out of control. This news is bearish for the dollar and not constructive for the US interest rate picture.

It’s now late morning and what do we see:

*The dollar has been bombed, down .84.

*The bonds are up almost 1 ½ points, which seems nuts based on the dollar’s tanking, the negative US inflation picture, latest capital flow news, and soaring oil prices. The reason I am told the bonds are soaring is that the yen is down .94 and the feeling is the Japanese are going to intervene in their currency market and will buy bonds with the proceeds. This sort of action spurred the bonds last big rally. I find that very convoluted with what else is going on in the world financial arena.

No matter, the bonds taking off like this should be gold friendly as it debunks the notion US interest rates are going to go sharply higher – the so-called reason for gold’s collapse from $430. Another way of looking at what is going on in financial land is the carry trades are going back on all over the place.

*Oil is $41.40 up 63 cents.

*July copper is trading at $1.31, up 2 cents. Copper was about 8 to 10 cents per pound lower when MIDAS reported the copper inventory shortages and Comex delivery problems to you. This kind of price action (along with surging oil) is in complete contrast to the bond action. Two of the most important economic commodities are stout as can be.

Mike Bolser talks of a Comex default. One has to wonder if there is going to be one, will not copper be the most likely one to go first. If certain buyers can’t get their delivery from Comex warehouses for another 4 months, that suggests a DEFAULT already of some sort! The copper price action suggests there is some potential here for serious problems ahead in this market.

*Silver is up 8 cents and continues its relentless move higher.

*But, gold??? The ususal. It can’t take out the $408 to $410 area because the heinous Gold Cartel is capping the price for the reasons cited above. What is going on here is grotesque! Meanwhile, the pathetic commentary from most gold commentators today is, "Gee, I thought gold would be doing better." These people have become worse than moronic in their market assessments. The Fed could come and say, "look twits, we are rigging the price," and you know what? They still wouldn’t deal with the truth and wouldn’t tell the public the gold price is capped, rigged, manipulated, messed with by the major banking powers in the US.

Then again, Greenspan already told the twits what was really going on six years ago in his Congressional testimony," Central banks stand ready to lease gold in increasing quantities should the price rise."

No wonder The Gold Cartel has been able to get away with this rigging for so long. They have the dimwits in the senior gold producer world who refuse to deal with the most important aspect of their market; they have the gold market commentators that are brain dead, ill informed, and somewhat retarded in their analysis; and, they have a clueless public that listens to fudged propaganda from Washington and Wall Street.

The funds continue to pour into gold and The Gold Cartel continues to put out their DO NOT PASS GO signs. The Comex open interest rose another 2022 contracts to 256,235.

For those out there who still believe the key to the gold price is what the dollar does, look again. These charts will be updated after the Midas comes out. For reference, the dollar closed at 87.30, down .90 and the euro finished at 124.37, up 1.11. The dollar made new lows for this part of their move and the euro made new highs. Yet, gold is $26 off its early spring highs. And this is with oil continuing to elevate!!! AND, with bonds taking off.

September US dollar
http://futures.tradingcharts.com/chart/US/94

September euro
http://futures.tradingcharts.com/chart/EC/94

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

Look at where gold was at the end of last March and then compare it to the euro. This is only one measure of how gold is being held back. Throw in our continued low interest rates, the Iraq mess, continually high price of oil, and it reveals how desperate the bad guys are to keep the price of gold from doing what it should.

Good news in from my STALKER source:

*Somebody is storing gold in size in the vaults in Hong Kong. This is relatively new from this CHINESE buying source.
*There is sustained buying below the market from large physical buyers. They are buying the dips and not ready to goose the market yet.
*The STALKER source expects buying to accelerate in August and September.
*He expects the increased late summer buying to overpower The Gold Cartel.

Lumber closed limit up ($10) at $401.40 per board foot. But, there is no serious inflation!

Silver started off a tad soft and then firmed right up, continuing its winning streak for the week.

The silver open interest is beginning to gain some steam, rising 2402 contracts to 91,212.

The silver floor remains very bullish on this market.

CARTEL CAPITULATION WATCH

As we go into the stock market close the DOW has faded way off its highs and is down 17. The DOG is barking up a storm and fading into oblivion once again. Down 27 at this point.
The US stock market is in deep trouble as oft-advertised by MIDAS and contributors to this column. The effects of the stimulus over the past years are over.

Sep bonds ended the day at 109 11/32, up 1 15/32. August crude oil closed at $41.25 per barrel, up 48 cents. July copper finished up $2.40 at $1.3140.

GATA’s Mike Bolser:

Hi Bill:
The Fed added $3.25B in temporary repos today July 16th 2004, an action that dropped the repo pool a bit to $42.373. This data point kept the repo pool's 30-day ma in an increasing up trend but he DOW remains very sluggish and unresponsive to the Fed's support. The PM Fix was $406.30 with silver at $6.62.

Richard Russell also agrees with the view that the Fed is in deep trouble. His last commentary:

"As far as the Bush administration is concerned, we're at the "beginning of
World War III".

The Fed is ratcheting up the repo funding engine because fundamentals are so bad and normal buyers aren't buying, so the elastic link between the repo pool and the DOW is stretched. We now see the Fed adding an unusual amount of permanent open market operations which carry far more market-moving inertia than the temps and still the DOW lags. Since April 26th the permanent open market operations total $11.97 Billion and if you look at the Repos image http://www.pbase.com/image/31412709

you will see that there is no corresponding period last year with nearly that amount of permanent operations, so this move isn't seasonal.

$400 gold

I'm always nervous when gold sits near a cardinal dollar level with other indicators seemingly flat. A trusted source with access and analysis of ALL COMEX positions thinks this is a prelude to a break one way or the other but his bias is up as is mine...at least for world gold prices. If the riggers get desperate and try to fix US, UK and Japanese gold at today's level, it will only mean a steeper up spike outside. Prediction is always risky because we are dealing with men who choose where they want gold to be based on their gold loss rate and that metric is something few people have. For now we are flat with reasonable pressure building in gold open interest and call options rising against put options. This situation is good but beware
of a counter attack.

Silver however, trades more like a commodity in short supply, complete with parabolic moves followed by vertical drops. Even so, silver easily tripled the recent gold rise. It's on the way back and metal in hand is metal in hand.
Mike

Houston’s Dan Norcini:

Hey Bill:
It is ironic that on the day in which the official CPI numbers pulled out of the government's bag of tricks reveal tame inflationary data, crude oil pushes closer to $42 barrel, the Euro makes a 4 month high, the Dollar closes in on a three month low. Meanwhile gold struggles to even poke its head above $410 while the poor bond pitsters are forced to once again reverse all their positions for the umpteenth time these last two years.

Hmmm.... seems to me that the Maestro of Mishap (that would be Al) owes the managers of the mega-hedge funds at the very least a free dinner seeing that they have paid a small fortune to the lucky brokers who now have the privilege of reinstituting the very same carry trades they took off three months ago. Maybe this is Greenspan's latest secret ploy to boost the economy - generate enough trading activity from all the Fed flip flops to churn all those commissions and run up the profits in the brokerage industry so that sector can now lead the rest of the nation out of the economic doldrums. And who said Sir Alan isn't simply brilliant? We should have known all along that he wouldn't disappoint.

How else to explain the situation we now find ourselves in? All of the price action we have seen the last three to four months in the above mentioned markets has been completely negated leaving us right back where we were in April with the exception of gold which obviously has incurred the wrath of the financial elites once again. It is almost as if nothing the Fed has said for a quarter of the year has meant a single thing. All the speeches, all the conferences, could have been ignored while traders and investors either went into hibernation or took extended vacations in the South Pacific. Even the stock market has gone no where. Yet for gold to even attempt to climb back to $430 has the king's horses and the king's men in a dither.

Oh, I almost forgot - there is no official government manipulation of the gold price - after all, the really SMART gold experts tell us it doesn't exist. No doubt these guys are relatives to those who think that if a man jumps off a tall enough building and flaps his arms fast enough, he can land safely on the ground. Come to think of it, some of these same guys may seriously think about finding a tall building when gold breaks out and launches the next leg upward...
Dan

Sure enough Dan, the CFTC numbers just came in as I am out the door. They are just what we thought and prove the extent of the recent price capping: The big specs increased their longs by 30,030 and reduced shorts by 9,001. The commercials decreased their longs by 9,316 and increased shorts by 33,760. The small specs increased longs by 1362 contracts and decreased shorts by 2683. AND THIS DOES NOT INCLUDE the last 3 days in which the gold price manipulation was even worse.
The gold disgrace could not be more blatant for all to see. All this while the dollar is hit hard!

The economic news out of China today was highly anticipated:

Chinese economy grows 9.7 percent in first half year

China's gross domestic product (GDP) reached 5,877.3 billion yuan (710.7 billion US dollars) in the first six months of 2004, up 9.7 percent over the same period of last year.

Zheng Jingping, spokesman of National Bureau of Statistics, made the remarks Friday at a press conference.

According to the statistics, primary industry grew 4.9 percent to account for 617.7 billion yuan (70 billion US dollars); secondary industry, up 11.5 percent, for 3382.2 billion yuan (400 billion US dollars); and tertiary industry, up 8.0 percent, for 1,877.4 billion yuan (200 billion US dollars). The growth rates for the first and second quarter were 9.8 and 9.6 percent respectively, with no obvious fluctuations.

The statistics show a steady and fast growth in China's industrial production, which had an added value of 2,982.2 billion yuan (340 billion US dollars), up 11.9 percent.

Agriculture production is also positive. The total area under grain crops increased after five years of decline. The area sown to grain crops is predicted to expand one percent over last year.

China's Consumer Price Index (CPI) rose 3.6 percent year-on-year in the first half of this year, said the NBS spokesman. The consumer prices in China's urban areas increased 3 percent and in rural areas, 4.6 percent.

In the half-year period, prices for food went up 9.5 percent; for medical and health care products and personal goods, up 0.3 percent; for education, recreation and cultural goods as well as services, up 0.9 percent; for housing, up 3.7 percent. But the prices for clothes, household appliances, transportation and telecommunication dropped by 1.4 percent, 1.6 percent and 1.7 percent respectively.

In the same period, the retail price increased 2.4 percent, factory price of industrial products rose 4.7 percent, raw material and fuel prices rose 9.8 percent.

The NBS also reported that the consumption price fell 0.1 percent in May and 0.7 percent in June month-on-month.

The average cash income of China's rural residents reached 1,345 yuan (162.6 US dollars) in the first half of 2004, up 16.1 percent, or 10.9 percent accounting for inflation, over the same period of last year. The growth rate was 8.4 percentage points higher than last year, the fastest growth since 1997.

From January to June, the disposable income of urban residents reached 4,815 yuan, up 11.9 percent, or 8.7 percent accounting for inflation, over the same period of last year, Zheng said. The urban growth rate was up 0.3 percentage point.

Zheng said that the economy was performing well, creating stable growth conditions for the next phase. Some problems have not been settled, he acknowledged, such as energy and transportation restrictions, fixed assets investment speed and unreasonable credit structure.

In the second half of this year, more emphasis will be put on restructuring and transforming economic growth in order to ensure sustained, fast and coordinated development of the national economy, he said.

By People's Daily Online

-END-

Gold share activity Down Under from The Australian:

Global gold rush ups prices

By Robin Bromby
July 16, 2004
FOREIGN money is flooding into Australian gold stocks that are considered underpriced, generating speculation that some global players could be positioning themselves for another rally in the metal's price.

A second fund has moved - within the space of three days - into Bendigo Mining, outlaying $28.8 million for a 17 per cent stake in a company that is heading back into production. And market watchers have been astounded at the huge volumes of Lihir Gold going through the market every day since late June: about 40 million shares one day, and another 20 million yesterday. Meanwhile, mystery continues to swirl around the identity of the buyer of 8.8 per cent of Emperor Mines, a move that looks like derailing the takeover bid for that company by Durban Roodepoort Deep. While even Emperor staff have no inkling of who the buyer is, there are pointers that Swiss interests are behind the clearly well-timed and well-financed strike.

The substantial shareholder notice issued yesterday on behalf of Arduina Holdings, registered in Amsterdam, was signed by Michael Wilson and Robert C. Nicholls, representing the law firm Michael Wilson & Partners. The bizarre twist is that this law firm is based in Almaty, the capital of Kazakhstan. But it does have business connections with Swiss interests. Local brokers are coming around to the conclusion that the new buyer is someone in Europe. But broker Austock is not giving any indication to analysts as to who is laying out the money on Emperor. Investment adviser Fat Prophets told its clients yesterday to hold their Emperor shares and not accept the paper offer from DRD. "The battle is heating up for Emperor Mines," it said. DRD by Tuesday had managed to get to only 44.4 per cent. Fat Prophets is advising that a rival takeover could be about to be launched at a higher price - and that DRD has been locked in by declaring its offer final and unconditional and so cannot raise its own bid. There is growing speculation that a bid at 95c a share, against yesterday's close of 86c, would knock DRD out of the water - and trigger the sale of the South African's shares to the new bidder. Fat Prophets director Angus Geddes said he believed DRD was getting Emperor shares cheaply, with some estimates as high as $1.20 as to the worth of the stock. Following the purchase of 9.6 per cent by Merrill Lynch Investment Managers earlier this week, another foreign manager has moved on to Bendigo Mining's register. APS Asset Management, which gives both Helsinki and Singapore addresses, bought 40 million shares - or 17.2 per cent of the company - on behalf of itself and clients, including US financial houses JP Morgan Chase, the Northern Trust and State Street. This spate of activity coincides with gold's regaining $US400/oz after two months of weakness. Commonwealth Bank commodities strategist David Thurtell said he expected terrorism fears to underpin gold until the US presidential election in November.

-END-

A question on silver from Aussie Land:

Bill, g'day.
Was talking to my bullion broker today about rolling over a silver OTC call from September to December. He gave me the price (which is high) then said he'd recently been in a Mitsui metals conference call and they'd said that
many of the silver miners were disappointed that they had missed the last run up, so they have in place a lot of offers above the market, so a lot of resistance before $8. While Mitsui I take with a good grain of salt, the
"Silver Wheaton" deal gives me pause. I read that as them selling forward a heap of production. Am I correct? And what is your view of all the possible resistance offers the producers are alleged to be putting up?
Hope you can help my ruminations, Regards,
Ian

It would not surprise me if the trade does not sell silver heavily as we approach and rise above $8. In retrospect, that was just what to do on the LAST run-up. This would be par for the course and what could give us the real price surge expected by MIDAS and colleagues as this year plays out.

There is one guarantee about the precious metals markets. At some point we will get our long awaited Commercial Signal Failure, which will occur when The Gold Cartel gets blown out of the water. More than likely, it will happen in silver first. Thus as silver rises to the $8 mark, the specs will build their long positions and the trade (and cabal) will get more short. What should be different this time is the shorts won’t have the silver to meet the long’s requests from a delivery standpoint. When some of the shorts fail to come up with the goods, they will have to cover, sending silver blasting off above $10 per ounce.

More on that down the road.

Additional anecdotal input on the increasing tightness in the silver market from Switzerland:

Hi Bill,
I went to pick up another standard delivery bar at credit suisse zurich today. Very interesting I got a 2004 bar, newly minted with a strange logo etc. on it. Had the following text in an oval circle "POCC??" (incase email doesn't like cyrillc it was POCCNR with the NR being backwards russian characters). The logo was three ingots forming a triangle. Also strange is that while usually delivery bars are 1000 ouncers , this one was 901 only.. maybe this ties in with anything else your getting - although seems strange to me that we'd be getting Russian Silver bars in Switzerland where there should supposedly be enough local refining to take care of local demand - maybe they are feeling the pinch too?
Regards,
Nick Kohl

The Café Sentiment Indicator remains abysmal. Never seen anything like this in six years, considering the relative price action of gold and silver. As we are coming in to one of the most explosive periods in gold and silver market history, the investing public can’t run away from the precious metals sector fast enough.

The gold share action is wretched. Near the close the XAU was unchanged and the pitiful HUI down 1.81.

Seems to me The Gold Cartel is sitting on your shares like they are the gold price. Remember, one of their key maxims is to minimize the interest in the gold and silver markets in the public sector. By keeping the shares subdued, they subdue interest.

There is another reason the shares stink. With the price of gold lagging the rises in the loonie and rand, the Canadian and South African gold producers are not making any money. Making no money is not conducive to higher share prices. By keeping the gold price suppressed as compared to what it ought to be, the insidious cabal is dampening gold fever excitement all around.

This is very frustrating. However, more and more it seems like we are coming closer to the day when gold and silver explode, probably out of nowhere. These markets won’t look good and move up gradually. They will just TAKE OFF! Both precious metals will blow the gold and silver shorts out of the water. Those players not staying with their positions will find it very hard to get on board THE historic investment opportunity of a lifetime.

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

From Peter Spina at http://www.goldseek.com who has been very GATA supportive over the years. We wish him well with his new web site.

Dear Chris and Bill,

On Monday afternoon, we launched a new gold and silver site – dedicated to gold and silver equities (Gold Stock Review - GoldReview.com). The site has some unique features including "Meet the CEO", which we hope will create a better interaction between the community and the companies they entrust their investment dollars with. Readers may submit questions to the featured gold/silver company CEO, currently it is Bradford Cooke of Canarc Resources. The site is updated several times daily with the latest hand-picked news from the gold & silver mining sector.

der Wöchentliche COT Report Gold ist da....

...und hier noch der Silberne....

The James Joyce Table


Midas du Metropole

Topic du Jour

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July 19 - Gold $405.30 down 90 cents - Silver $6.59 down 10 cents

The Charade Encore!

The greatest discovery of my generation is that a human being can alter his life by altering his attitudes of mind...William James (1842-1910)

GO GATA!!!

The last time I used my laptop during my mid-June trip to Vancouver the title of the MIDAS was “The Charade.” It was still at the top of the working document used for the commentary. After viewing the gold action the past few days, I decided to use it again for this heading.

What a joke this gold market is! The open interest went up another 7,339 contracts Friday to 263,564 as the specs pile in and The Gold Cartel blocks the gold price from moving up at all. The crooks are making it crystal clear they are going to do all they can to keep bullion from showing any kind of stress in the system.

With this kind of intervention, the technical picture gets more bearish by the day. Talk about fighting City Hall. The bad guys are capping gold and waiting to pounce on the longs when outside market events go their way. Once again they plan to fleece the specs who are buying gold for the right fundamental reasons.

The odds are 95% the specs will be flushed on this go around (as usual) and bullion will tank from here. So why bother with gold and hang in there? Because at some point the anti-trust violating price fixers are going to hit the wall and run out of enough physical gold to carry out their corrupt scheme. Or, they are going to lose control of their scam due to outside market forces. When that happens gold is going to go nuts to the upside.

More than likely when gold does explode the technical scenario will look similar to what we have now. Many investors will exit the market, looking for gold to be belted as it always does when the specs get super long. However the day is coming when, instead of crashing, gold will keep on going and break through the massive resistance at $430. That’s when we get our Commercial Signal Failure. Those not on board will find it difficult to get back in position and many will miss the move of a lifetime.

Another reason to stay long in this very vulnerable point in time is because of the risk/reward ratio. While the probability of gold being trounced from here is very high, the downside price potential seems limited to me, while the upside is staggering. Unless you are a nimble trader, the best course of action is to stay the course – the way I see it anyway.

The technical picture in silver is nowhere near as dreadful as that of gold. The silver open interest rose 1025 contracts to 92,237 and is around 30,000 contracts off its early spring high. That doesn’t mean silver won’t fall along with gold. It just suggests the bums are not sitting on silver like the are gold. Probably because they don’t have enough silver to do the dirty at these price levels.

The silver trade today was extremely thin. Our floor sources told us a 150 lot order would move silver 6 cents.

The dollar was firmer earlier, yet weakened as the day wore on and finished at 87.35, up .05. The euro closed down 14 to 124.22, but the yen closed up half a point.

YES, Just in! Big draw in the silver warehouse stocks. Down 1,184,877 ounces to 114,777,538 ounces.

Crude oil closed up .14 to $41.44 per barrel.

The John Brimelow Report
This Seller is HUGE (so is buyer)

Monday, July 19, 2004

(I did not publish on Friday due to mundane domestic reasons. Sorry.)

Indian ex-duty premiums:

Friday AM $4.94, PM $ 6.77, with world gold at $403.85 and $403.30. Dubious, and ample for legal imports. The Reserve Bank intervened aggressively to halt the slide in the Rupee on Friday afternoon.

Monday AM $6.23, PM $5.31, with world gold at $407.10 and $406.60. Ample, and adequate, for legal imports. A respectable performance considering the jump in world gold after Indian hours on Friday.

There is a considerable amount of noise confusing the situation of the world's largest gold buyer at present. The Monsoon appears likely to be disappointing in some regions, although how this effect aggregate farm incomes - which, of course, are a different thing to aggregate crop size - is not clear. The Reserve Bank has tightened up on the ability of gold importers to make a little interest income with the float from overseas trade credit. This has greatly annoyed them, and encouraged some Northern Hemisphere Bears, but in reality is quite marginal. More importantly, the State Government of Rajasthan, in the north, has effectively abolished sales tax on gold imports, a matter of some 1%. This will likely provoke a competitive response from other centres, and slightly help imports.

Often it is argued that gold consumption in India is rural and unsophisticated. Actually, urban and wealthier Indians have an astonishing propensity to buy gold. This is true even of Indians resident in America, a particularly self selected and, one might have thought, westernized community. A valuable demonstration of this, courtesy http://www.thebulliondesk.com , appeared in a New Jersey newspaper recently, and is strongly commended:

"With more than 30 jewelry shops clustered in a one-mile radius, the "Little India" in the Iselin section of the township has become a top destination for immigrants seeking the heavy 22-karat gold they favor. On a typical Saturday, parking lots off Oak Tree Road are filled with cars from Virginia, Maryland, Pennsylvania, North Carolina, even Ontario, Canada. The first Indian jewelry shop opened in 1989 on Oak Tree Road...The Kaur sisters watched as their mother hurried from one Oak Tree Road jeweler to the next. Their own explanation of why Indians love and buy gold was that it was all about keeping up with the Patels next door. But they understood it was part of their identity as Indians. "Gold will always be with us," Kamal Kaur said. "

Japan was closed today.

On Friday morning in NY, the dollar slumped following the CPI data. Gold buyers advanced, to meet a familiar situation: in UBS' words:

"Good professional selling around the $406 level initially capped the move higher but once this was done gold managed to grind higher on further strength in the euro before again running into good selling at $408 (Aug Future). Gold spent the rest of the session trading quietly near the highs and closed just above $406."

Comex traded 43,758 lots on Friday, with open interest leaping 7,339 contracts to 263,574. It has now risen 29,595 contracts since Thursday week's close: and gold has not advanced at all. Almost 3 million ozs of paper gold! 92 tonnes! Dow Jones reported on Friday that

"Some players were bemused by gold's lack of lift given the degree to which the US dollar sank and the levels of fund buying interest seen during the morning"

That any professional should be bemused is bemusing. As Refco Research comments dryly:

"The question is whether the August contract can breach 410 resistance before recently acquired specs tire of butting their heads against the determined selling below that mark"

The CFTC data, reported as of last Tuesday, are now somewhat out of date, but of course do show a steep build up. UBS says:

"Comex trading speculators cut their short gold positions by 1.5 million ounces and added 3.5 million ounces to their gross long positions. Overall the net long position increased by 5.0m ounce to 13.87Moz, more than we would have expected. While the net long position is still a long way short of its recent highs (22.5 Moz) there is clearly less buying room than there was before this recent move."

Actually the situation is slightly better than this because TOCOM liquidated some 60 tonnes (c. 2mm ozs) at the same time. The seller is not off the hook yet.

The noted gold bear points out that the large spec net change was the 5th biggest in history. This was certainly not true of the gold price increase.

JB

CARTEL CAPITULATION WATCH

Another Hail Mary late rally in the US stock market, led by S&P futures buying. The DOG bounced off its yearly low and the S&P rebounded off its 200-day moving average. Even so, the DOW lost 47 as the goose failed and the DOG finished around unchanged.

GATA’s Mike Bolser:

Hi Bill:
The Fed took no action today July 19th 2004. The repo pool stays at $43.373B and this is still very high. Indeed the repo pool's 30-day ma is the highest its been since I began this series in late November 2002. At this hour 10:30AM, the DOW tracks weakly at 10,140 with the 30-year bond yield at 5.12% almost exactly where it has been for months. No need to thrash the point on a rigged bond market by the Fed's use of their "policy puts."

In such an interventional stock and bond market, whose controllers want the DOW to rise but it resists against ever more repo pressure, it may be useful not to attempt to short the DOW in spite of all the classical shorting indicators. A major CNBC celebrity fund manager finally heeded this advise after having his short funds savaged for years.

There are may other popular contrarians who loudly preach that a crash is coming and believers should prepare by method of the short position taken against major indexes. At this moment I think this is a very bad idea because we see the Fed adding to the upward repo trend line. They are doing this for a reason and will keep doing it until they get what they want.

Guessing the Fed's intentions is part of what we all do in the sphere of speculation. In interventional analysis, I just use a different basis of knowledge and methods that are alien to everybody else. I have chosen 11,750 on Labor Day 2004 and this wouldn't be a bad option play for the DOW 'Diamonds". I've done this partly due to the coming election antics of the current administration in concert with the Fed's deteriorating economic fundamentals. The "diamond" premiums are fairly low low and you will likely be riding in the Fed's wake. The problem is one of contrarian philosophy.

However, we should always remember that the objective is to thrive in whatever situation presents and we see the Fed wanting a higher DOW at the moment and there IS a discount to taking a long option position. Moreover IF there is to be some sort of election "surprise" the Fed already knows about it and is preparing their support mechanism.

I also avoid the largest cap gold firms as they can be shorted by the fed and their primary dealers and the leverage is therefore suspect. The smaller exploration firms in precious metals that are debt-free are very good hedges instead as they contain both leverage to the gold price and discovery leverage as well. The big boys can't short them as easily since there is so little liquidity. In judging these small companies, personnel is almost always the key factor, especially professional exploration experience with a record of success. There is a substantial risk that no viable, mineable resource will be found, so one needs to learn as much as possible before committing to this path.

The Fed appears still to be in its transition phase for gold and we may see some additional weakness as they keep the pressure on for the moment.

With rumors of Russian support for Iraq in the form of 40,000 troupes, one can wonder what Vladimir was given in return and what the whole package contained. I was particularly interested in Friday's café report of Russian gold bars showing up on the European market. It may be nothing, or....
Mike

The road ahead for US stock market looks like a rocky one. The stimulus measures employed to jolt the economy the past couple of years are coming to an end. The following news items give more credence to the notion the average American is being squeezed as income is not keeping up with the real inflation. Meanwhile, the Fed is behind the curve as far as fighting inflation is concerned, yet if they raise rates too much it could cause an economic fiasco:

July 18, 2004
Hourly Pay in U.S. Not Keeping Pace With Price Rises

By EDUARDO PORTER
NY Times

The amount of money workers receive in their paychecks is failing to keep up with inflation. Though wages should recover if businesses continue to hire, three years of job losses have left a large worker surplus.

"There's too much slack in the labor market to generate any pressure on wage growth,'' said Jared Bernstein, an economist at the Economic Policy Institute, a liberal research institution based in Washington. "We are going to need a much lower unemployment rate.'' He noted that at 5.6 percent, the national unemployment rate is still back at the same level as at the end of the recession in November 2001.

Even though the economy has been adding hundreds of thousands of jobs almost every month this year, stagnant wages could put a dent in the prospects for economic growth, some economists say. If incomes continue to lag behind the increase in prices, it may hinder the ability of ordinary workers to spend money at a healthy clip, undermining one of the pillars of the expansion so far….

-END-

Fed needs to raise rates more quickly, opines Barron's

Joseph Carson's "Economic Beat" column believes the Fed could be overstating capacity and understating the potential inflation risk, which could force the Fed to increase rates more precipitously in the future. Carson says data indicates capacity seems to have contracted in 2002 and 2003, and believes the Fed should seek to better align nominal spending with inflation trends. –END-

RATE RISE COULD BANKRUPT DEBTORS
By DIANE HESS
NY Post

July 18, 2004 -- Four years of rock-bottom interest rates may have stimulated the economy, but now they threaten to drive millions of Americans into bankruptcy.

Since 2000, a series of Federal Reserve rate cuts has made borrowing dangerously easy. Low-rate mortgages, credit cards and auto loans have allowed the average American to live above his or her means.

Now that rates are rising again, it's going to become that much more difficult to fix the mess.

"Many families are just a few paychecks away about three to six months from having severe problems," said Sam Gerdano, executive director of the American Bankruptcy Institute.

In 2003, a record one-in-73 U.S. households declared themselves illiquid, ABI data show. That's more than 1.6 million new bankruptcy cases in 2003 alone, and nearly double the number from a decade ago. ABI predicts that 2004 will be another record year for personal bankruptcy.

Madeline Rodriguez, of Richmond Hills, Queens, knows the story all too well. The 49-year-old mother of one filed for bankruptcy recently.

"For the past few years, it was so easy to get credit cards," she said. "I got them in the mail or at department stores, and I went shopping. It's not something that I'm proud of."

U.S. households, on average, have more than $6,000 in credit card debt, according to BankRate.com's calculations of first-quarter census figures and the Federal Reserve's debt statistics.

As rates go up over the course of the next few years, the cost of borrowing and size of payments on those loans will only move higher.

Homeowners with adjustable-rate mortgages which vary according to interest rates at specified intervals could be among the hardest hit.

Spending on adjustable rate mortgages totaled approximately $300 billion, or 35 percent, of the nearly $850 billion spent on mortgages both purchases and refinancings from April through June, according to data released by the Mortgage Bankers Association this week.

"Significant rate adjustments could lead to greater instances of delinquency and default on other debts," said Greg McBride, an analyst with BankRate.com.

-END-

A heads-up:

And So It Goes..The Idle Thoughts of an Idle Fellow

A few months ago I wrote a piece suggesting that a new strong man would emerge in Iraq and would use tactics similar to Saddam's to keep the warring tribes under control (An Exit Strategy - April 1 2004).

In today's Sydney Morning Herald Paul McGeough has written that the new Iraqi Premier Iyad Allawi, personally shot dead 6 suspected Iraqi suspects detained in an Iraqi jail in front of as many as 23 eye witnesses including plain-clothes US security personnel. He apparently did this in cold blood and without a trace of emotion, commenting only that "they deserved worse than death." Victims of Saddam must be getting a hint of deja vu.

You can read the full account here :- http://www.smh.com.au/

It makes chilling reading - the more things change, the more they stay the same.
The Idle Fellow

Will be heading back to Dallas shortly from my trip out here to San Diego for my nephew’s wedding. Need the rest at this point. What a great time, but am worn out due to all the action from all the kids. Ran on the Delmar beach one day, which was fine and normal for me. However, my nieces asked if I wanted to got to their turbo kickboxing class at Rancho Bernardo’s 24 hour fitness gym. What a mistake! Never tried that stuff before. Ten minutes into it, I thought they were trying to kill me and there was still 35 minutes still to go. I was better off playing bocce ball the night before in my brother Mike’s back yard.

The wedding was absolutely a stunner and the most fun. It was held at La Jolla Presbyterian overlooking the Pacific Ocean. Magnificent!

One of the attendees and a friend of my family was a fellow named Jeremy P. McGhee who is confined to a wheel chair due to a spinal cord injury. He will be competing in a ski competition in Aspen this winter. Remarkable guy. I mentioned that I met Christopher Reeves (who went to Cornell) in New York before his spinal cord injury and know Marc Buoniconti who is in a wheel chair also due to a spinal injury suffered in a college football game. Marc’s Dad Nick was my teammate on the Patriots a long time ago. Pretty scary stuff, what could happen to any of us. Three years after my stint with the Pats, the guy who played my same wide receiver position, Darryl Stingley, broke his neck after a vicious hit by Jack Tatum of Oakland.

Anyone wishing to learn more about Jeremy McGhee’s Fight 2 Walk Foundation can do so at http://www.fight2walk.org.

It will put everything in perspective as we moan about the crummy gold share action. It stinks because the bums capping gold think they know what is coming for the gold price and are dumping the shares. So are other players who can see the blatant capping of the gold price and want out before bullion dumps once again.

The HUI lost around 3.76 and the XAU fell about 1.50.

While the odds are with the crooks, maybe they will be surprised! I’m hanging in there.

GATA BE IN IT TO WIN IT!

Appendix

A note from Jessie on this important Stephen Roach piece below:

The primary point in all this is the last paragraph: that the Fed should not be allowed to use the Ken Lay defense when things go wrong, and simply say "We didn't know." The Fed, according to Roach, has abandoned its role as objective regulator, and has become a fully culpable accomplice, perhaps even a primary actor, in what looks like one of the greatest frauds in all financial history. Roach is writing this with an eye to history, and perhaps the formation of a new financial system in the future.

The World's Biggest Hedge Fund
Stephen Roach (New York)

The title belongs to America's Federal Reserve. Not only is the Fed the unquestioned leader in world central banking circles, but the US monetary authority has led the way in setting up the biggest macro trades of modern times. Highlights include Carry Trade I of 1993, the equity bubble of the late 1990s, and now Carry Trade II -- all direct outgrowths of trading strategies implicitly recommended by Greenspan & Co. So far, the world is no worse for the wear. But it's a world that now lives from trade to trade. And with that precarious existence comes the ever-present risk of breakage -- the aftershocks that follow the unwinding of every trade. We have the Federal Reserve to thank for that.

This transformation began in earnest in 1987. As the US equity market surged toward excess that summer, there was deep conviction that downside risks were not to be feared -- that they would be protected by the options strategies of the perfect hedge, "portfolio insurance." The Crash in October unmasked the flaws in that supposition. The Fed responded to this crisis by offering up the unconditional palliative of an open-ended liquidity backstop. Out of that chaos nearly 17 years ago, the dip-buying mindset of a generation of equity investors was borne. In retrospect, the buying opportunity created by the Crash of 1987 was a bargain that no serious investor -- especially the levered hedge fund community -- could afford to miss.

Five years later, financial markets were offered another learning experience. In response to what Fed Chairman Alan Greenspan dubbed "financial headwinds," the Fed slashed its policy rate to 3% in September 1992 and held it there until February 1994. The Fed believed that an unusually steep yield curve was the appropriate antidote for the credit crunch it thought was hobbling economic activity -- an outcome brought about by America's saving and loan crisis and widespread loan losses in the commercial banking system. With the federal funds rate pushed down to the inflation rate, overnight money was essentially "free" in real terms. For a troubled banking system, this was a great opportunity to re-liquefy balance sheets. For the levered hedge fund community, this was another no-brainer -- the only question was where to play the spread. The origins of the modern-day "carry trade" are traceable to this period.

Fast-forward to 2004, and it's déjà vu -- but with several important new twists. First, the financing of the current carry trade is now occurring on much more generous terms; the federal funds rate of 1.25% is fully 200 basis points below the headline CPI inflation rate (3.3% Y-o-Y as of June 2004) -- offering a negative cost of overnight money. The real federal funds rate hasn't been this low for this long since the late 1970s. In effect, levered investors are now being paid to play the yield curve.

Second, suffering from a shortfall of income generation in a uniquely jobless recovery, American consumers have turned into the functional equivalent of heavily levered hedge funds -- going deeply into debt to extract purchasing power from their homes (see my 4 June dispatch, "The Mother of All Carry Trades"). Third, the carry trade has now become central to America's twin-deficit financing imperatives; record budget deficits and current account gaps have been funded "painlessly" -- in large part though purchases of dollar-denominated assets by Asian monetary authorities. The yield curve play has turned foreign central banks into hedge funds as well.

The Fed obviously sees its role quite differently. Fixated on inflation control -- yesterday's battle, I must add -- the US central bank pays little heed to excesses that emerge in financial markets. Favoring a reactive over a pro-active approach, the Fed believes it has both the skills and the tools to respond to problems in asset markets as they unfold. In the words of Chairman Greenspan in describing the Fed's conduct as the equity bubble expanded in the late 1990s, "...we chose...to mitigate the fallout when it occurs" (see his January 3, 2004 speech at the Meetings of the American Economics Association, "Risk and Uncertainty in Monetary Policy"). The Fed believes that this approach has been vindicated by the subsequent course of events. In light of America's surprisingly mild post-bubble recession, Greenspan argued (in this same speech) that it is reasonable "...to conclude that our strategy of addressing the bubble's consequences rather than the bubble itself has been successful."

Success at what cost? That is really the ultimate question in all this. To the extent that the Federal Reserve continues to set the stage for one risky macro trade after another, I believe there is great peril in its strategy. Last year's deflation scare was a case in point. As disinflation approached the hallowed ground of price stability, nominal interest rates moved down to rock-bottom levels. But as the risk of "unwelcome disinflation" stoked fears of a Japanese-style deflation, the Fed went into a fire drill that pushed its policy rate perilously close to the zero boundary. Yet another carry trade became a sure thing in this climate. As the risk of deflation receded, the debate turned to the Fed's exit strategy -- the so-called normalization of an extraordinary monetary accommodation. By telegraphing that the ensuing shift in policy would be "measured," the US central bank put financial markets on notice that it will be taking its time in raising interest rates. For those playing the carry trade, time is money.

To date, of course, the Fed has taken but one small step in returning its policy rate toward a more neutral setting. This has done next to nothing to discourage the vast array of carry trades that are still on the books in financial markets. Amy Falls, our global fixed income strategist, argues that most of these levered bets are now almost back to positions prevailing before the Fed's late June move. That's especially the case, in the view of our fixed income team, insofar as most spread products are concerned -- namely mortgage-backed securities, high-yield bonds, emerging market debt, and even investment grade paper. Our European equity strategists, Teun Draaisma and Ben Funnell, make a similar point -- that with sharply negative real short-term interest rates, it takes a lot more than 25 bp of monetary tightening to unwind the carry trade (see their July 13 essay, "The Crowded Carry"). They underscore the weakest link in this daisy chain -- that the risks to the levered community are likely to fall most acutely on banks and consumers, where the need for carry-trade-induced income generation is most acute. That pretty much fits with my own concerns, especially with respect to the over-extended American consumer.

What worries me the most in all this are the mounting systemic risks toward carry trades and the asset bubbles they spawn. To the extent that such trading strategies create artificial demand for assets, a seemingly unending string of bubbles is a distinct possibility. That's precisely what's occurred in recent years -- from equities in the late 1990s, to sovereign bonds, a host of spread products, and now possibly to a global housing bubble (see my 15 July dispatch, "Global Property Bubble?" and the accompanying round-up of worldwide housing market conditions conducted by our global economics team). This profusion of carry trades would not have occurred were it not for the Fed's extraordinary degree of monetary accommodation and the steep yield curve it fostered.

It doesn't have to be this way. Both the Bank of England and the Reserve Bank of Australia have adjusted their policies to take property bubbles into explicit consideration. Moreover, Ottmar Issing of the ECB has publicly stressed the need for central banks to do a much better job in grappling with the linkage between monetary policy and asset markets (see his February 18, 2004, editorial feature in the Wall Street Journal, "Money and Credit"). The Fed, by contrast, remains in denial on this key issue -- refusing to concede that monetary policy must take asset inflation into account.

Unfortunately, the role of the US central bank goes beyond benign neglect. Over the past several years, the Fed actually has been quite aggressive in arguing why excesses are not bad. That was the case when it repeatedly justified the equity bubble on the basis of the so-called productivity renaissance of the New Economy. It has also been the case when the Fed has argued that America is not suffering from a debt problem, nor a twin deficit financing constraint. By serving as a cheerleader when financial markets are going to excess, the Fed is losing its credibility as an objective observer. It is no longer the tough guy that relishes the role of "taking away the punchbowl just when the party gets going" -- to paraphrase the legendary mantra of former Fed Chairman William McChesney Martin. By condoning excesses, the Fed, in effect, has become a stakeholder in the carry trades it spawns. Investors, speculators, income-short consumers, and financial intermediaries couldn't ask for more. It's the ultimate moral hazard play that that has turned the world into one gigantic hedge fund.

The James Joyce Table


Midas du Metropole

Topic du Jour

--------------------------------------------------------------------------------

July 20 - Gold $401.40 down $3.90 – Silver $6.60 up 1 cent

Silver Storms Back After Cabal Assault

As my colleague Chris Powell said this morning, "The Gold Cartel has become laughable in their predictable ways of manipulating the gold market."

Their recent price suppression tactic of halting the gold price rise via massive selling ahead of Greenspan’s testimony before Congress today could not have been more blatant. The London AM Gold Fix this morning was $405.50, the same as the New York close last evening. That was as good as it was going to get for gold from there on in. As we came into our opening, the cabal began their selling avalanche. One could blame it on a weaker euro, but that is horse manure as gold was only allowed to rise a few dollars when the euro rose 1.10. Today with gold down $6 at one point, the euro was off only .70.

Worse, the economic news this morning was unexpectedly bearish for the dollar and gold friendly:

08:30 June Housing Starts reported 1.802M vs. consensus 1.99M; Building Permits 1.924M vs. consensus 2M
Prior housing data revised to 1.97M from 1.967M; permits revised to 2.097M from 2.077M. –END-

So what yawned the markets? Greenspan was speaking this afternoon; The Working Group on Financial Markets was not about to let gold have its day, let the dollar get hit hard, or let the stock market swoon, not when Greenspan was going to come out with the scripted spin Wall Street they expected from him. Greenspan is nothing more than a market lackey these days. He is praised for not surprising the markets like the Fed used to do from time to time. What the pundits don’t realize is the entire financial market game has changed over the years. We don’t have free markets like we used to. We have orchestrated markets – Economic Fascism is the name of the game in America at the moment. What Wall Street and the markets want to hear is what Greenspan gives them.

A veteran Café member nailed it with her comments this morning:

Hi Bill:
Gheesh these guys are getting so blatant it’s unbelievable; of course you (of all people) know that. Yesterday gold and silver stocks were whacked for no apparent reason; today gold gets whacked. Obviously someone knew this was coming today. Maybe we need to develop a new type of investment software called "blatant manipulation tracking". It could track and predict the next manipulation, generating advice based on the MI, "Manipulation Index". Something that accurate would probably blow EW out of the water; LOL.
Meg

The pleasant surprise of the day was silver’s stunning late day comeback. At one point early on, it was down 18 cents and following gold into the toilet. However, the shorts such as Republic Bank did not like what they saw and began to cover. Morgan Stanley was a good buyer and Refco bought late. For silver to close up on the day, after such a planned cabal attack, is very encouraging.

The silver open interest still is relatively low. It fell 176 contracts to 92,061. The silver warehouse stocks dropped another 221,802 ounces.

The gold open interest fell 1522 contracts to 262,052. Referring to Dan Norcini’s fine piece at The Hemingway Table, after today’s close gold has now only rallied $8.40 on a 37,801 Comex open interest increase (not including today’s number). It will be interesting to see if we had a good deal of liquidation, or whether the cabal continued to pour it on.

According to the floor, there was some gold decent short-covering late, most likely in sympathy with silver.

For gold to break loose from the shackles of the price manipulators something external, or new, is going to have to occur. Been saying that for years and it is just as true today as way back when. Fortunately, the odds of a Gold Cartel blow-up are increasing substantially. What could do it?

*The silver cabal runs out of enough silver to carry out their scam. They hit the wall and the price of silver explodes. Gold will inevitably follow.

*Gold demand surges around the world and substantially eats into the available gold supply The Gold Cartel has left to keep suppressing the price at these low levels.

*Oil soars towards $50 per barrel.

*The US stock market sinks under its own weight as the economic recovery runs out of steam.

*Iraq continues to disintegrate and a worst, or bad case, ending scenario becomes apparent and eventually inevitable.

*The dollar goes into a serious dive which shakes the financial markets.

The John Brimelow Report

A Greenspan day for gold? + survey

Tuesday, July 20, 2004

Indian ex-duty premiums: AM $5.02, PM $6.40, with world gold at $$405.80 and $404.60. Dubious, and adequate, for legal imports. Since the end of normal business hours in India, of course, world gold has fallen considerably. One notes the respected American service Cropcast , which uses satellite images, offering Indian farmers in the drier districts some comfort:

"Rains are likely to remain limited in northwestern areas through the weekend, but the six to ten day outlook today does suggest a notable return of rainfall to the drier areas."

Japan reopened today, but interest in precious metals was limited to pushing up platinum. TOCOM only traded the equivalent of 10,062 Comex lots (- 61% from Friday). The active contract was down 3 yen but world gold was actually 30c higher than yesterday’s NY close. Open interest edged up the equivalent of 336 Comex lots to equal 100,591 Comex. The TOCOM Members position report, lagged a day, indicates the public continued moderate liquidation on Friday. (Gold traded 31,225 lots in NY yesterday; open interest finally slipped a little, by 1,522 lots to 262,052.) Yesterday in NY, according to ScotiaMocatta,

"Selling…appeared from overseas sources, pressuring the price back down" from the morning high. Dealer commentators indicated (wisely) concern about what sort of price action might be seen on a Greenspan testimony day like today, but beyond that it is clear that many were taken aback by the magnitude of the selling which has blocked gold from exceeding the high seen ten days ago. UBS remarks

"Comex-trading speculators bought more than 5 million ounces of gold in the week to 13 July and subsequent changes in Comex open interest indicate that another 2-3 million ounces of additional buying has taken place since then, taking the net long position to around 16-17Moz by our estimates. While this is less than the April 2004 all-time high position of 22.5Moz… this position may be getting a little extended."

Standard London says the unsayable:

"the latest CFTC Commitment of Traders report showed that the net fund long gold exposure on the COMEX factor rose to 70,434 lots, up from 31,409 lots, the largest weekly gain for almost four months, explaining gold’s recent strength, although some might argue that the move in the gold price, given the return of large scale Fund interest, is disappointing and suggests significant producer and/or official selling into the rally." (JB emphasis.)

(Of course, unless a mine is increasing a hedge book, it has little flexibility to opportunistically accelerate selling – and who could do so in this kind of size? Unless the CFTC data is misreporting some hero hedge fund, most of the selling has to have been official.)

Establishment of a barrier of this type invariably draws in speculative shorts, besides wearying the longs. Consequently, it was little surprise today in NY to find gold falling by more than double what the concomitant dollar rally implied on markedly heavier volume. The question is how aggressive the shorting will become. News from the physical front would counsel it should be cautious. Reuters today carries a Singapore story partially reversing their previous item on Far Eastern activity:

"Asia Gold-Chinese selling over, demand still limited ."

"SINGAPORE, July 20 (Reuters) - Chinese investors have stopped selling gold bars and demand in Asia remains limited because of volatile prices, dealers said on Tuesday."

"In Hong Kong, gold bars were at a discount of between 10 to 20 U.S. cents an ounce below London spot prices <GOLD/ASIA1>, compared with 30 U.S. cents last week…"I think people are happy to buy at around $400 and $402," said Ronald Leung, director of Lee Cheong Gold Dealers Ltd in Hong Kong, a key bullion trading city in East Asia."

"The physical market in Asia saw active buying from China, the world's third-largest gold buyer, and other Asian countries when spot prices fell to this year's lows of $371 an ounce in May…In Singapore, the entry point for much of the bullion trading in Southeast Asia, gold bars were quoted at a premium of up to 30 U.S. cents an ounce, unchanged from last week."

This story was of course written with gold above $405. Interestingly, the discounts on world gold displayed by the Shanghai Gold Exchange virtually disappeared today.

JB

CARTEL CAPITULATION WATCH

The script The Working Group on Financial Markets planned for today came out almost perfectly. The DOW closed up 55 to 10,149, while the DOG gained 33 to 1917. The dollar rose late in the afternoon to finish up .61 to 87.96, while the euro lost 1.04 to 123.19, 1/3 of that loss coming after gold closed. The dollar gained ground against every major currency. Crude oil dropped $1.08 per barrel to $40.36. Now that Greenspan has assured everyone that all is well, we should rejoice.

What a surprise:

REUTERS Greenspan Expected to Say All's Well

By Glenn Somerville

WASHINGTON (Reuters) - U.S. lawmakers get a chance on Tuesday to grill Alan Greenspan on the significance of a June slowdown, but economists expect the Federal Reserve chief to pin it on a summer lull and stress that all's well with the
economy.

Greenspan will deliver the first leg of his two-day semiannual monetary policy testimony to the Senate Banking Committee at 2:30 p.m. EDT, where he is expected to say the recovery is solid and that gradual interest-rate hikes will keep the expansion healthy and lasting. –END-

Which is just what he said:

REUTERS Greenspan: U.S. Economic Growth Solid

WASHINGTON (Reuters) - The U.S. economy has entered a sustainable expansion that is generating some increase in prices, but inflation does not now appear a major threat, Federal Reserve Chairman Alan Greenspan told Congress on
Tuesday.

In remarks prepared for delivery to the Senate Banking Committee, Greenspan noted that Fed policy-makers said last month that interest rates likely will rise at a "measured" pace but that the U.S. central bank will respond as needed to keep
inflation in check.

"Not only has economic activity quickened, but the expansion has become more broad-based and has produced notable gains in employment," the Fed chief said as he presented his semiannual review of monetary policy.

Turning to a softening in some economic data from June, Greenspan said an apparent slip in consumer spending stems from higher prices and will likely prove short-lived…

-END-

GATA’s Chris Powell dispatch last evening was way ahead of the game:

9p ET Monday, July 19, 2004

Dear Friend of GATA and Gold:

Appended are a couple of today's precious metals market commentaries that may be of interest, particularly the first, from CBSMarketWatch, which finds a market analyst talking openly about central bank manipulation of the gold price.

We probably should expect gold and silver to be hit hard Tuesday and Wednesday as Federal Reserve Chairman Alan Greenspan testifies to Congress -- the usual drill. But maybe, as that analyst quoted by CBSMarketWatch suggests, people are beginning to figure this out and aren't panicking as much anymore.

In any case, with central bank manipulation of the gold price increasingly being taken for granted, we can take some satisfaction no matter what happens with the price in the short term.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Gold Futures Fall But Hold Above $400;
Traders Watch Dollar Ahead of Greenspan Comments

By Myra P. Saefong
CBS.MarketWatch.com
Monday, July 19, 2004

SAN FRANCISCO -- Gold futures lost ground Monday but closed above the key $400-an-ounce level for a seventh-straight trading session as investors kept an eye on moves in the U.S. dollar ahead of comments from Alan Greenspan this week.

Gold for August delivery closed at $405.80 an ounce on the New York Mercantile Exchange, down $1 for the session. The contract hasn't fallen below the $400 level
since July 7.

"Despite the lack of U.S. data out this week, the currencies are still set to have a heavy influence over the course of the week with Alan Greenspan set to address the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday with his semi-annual monetary policy testimony," said James Moore, an analyst at TheBullionDesk.com in London, in a note to clients.

Ahead of Greenspan's remarks the dollar was mixed, gaining ground against the euro, but weakening against the Japanese yen. That provided little near-term direction for gold.

"The gold is usually weak going into Greenspan's testimony," said John Stafford, editor of Stafford's Investment Strategy Letter.

But "since we all 'know' that Greenie must reflate, and now actually has a vested interest in reflating, [gold has] recently been stronger than normal after he finishes speaking," Stafford said, adding "there is a lesser fear of central bank manipulation of gold to keep a 'lid' on it -- whether warranted or not."…

-END-

GATA’s Mike Bolser:

Hi Bill:
The Fed added $5 Billion in tomos yesterday after their normal 9:30AM issuance (Kudos to a sharp eyed follower for this) and $4.25B this morning to raise the repo pool to $46.623B. The 30-day ma up trend for the repo tool stay intact and continues to signal the Fed's determination to support their national security interests (The DOW, bonds and the dollar).

It is difficult to determine, intra-day, which of the indexes are receiving the collateralized repo funding amounts, especially in the currency area. However we can see a general pattern of increasing Fed concern for a waning DOW and the dollar.

Of late, the MCDI has tracked flat as a pancake. Today it popped up about .45% and gold was disproportionately hammered down 1.4%. This was not unexpected as one of my metrics shows additional down pressure at least until Friday and perhaps into next week. Thereafter, things should look up.

I read Richard Russell last night with interest. His newsletter is the most successful of them all and even he at times admits government intervention in precious metals. He also is noticing virtually all of his DOW and other index ratios are turning down. What observers like Russell and others miss in their analysis is the pervasive power and determination of the government to change the tide of the major indexes to suite their government needs. The Fed has an unlimited sea of paper with which to work. The DOW is effectively tracking sideways, as if in "wait" mode.

Unlike the financiers of the 1924 Weimar Republic, the Fed has sophisticated pools of hidden money to flood the markets with. The paper Reichmark was all the German bureaucrats knew. The Fed's repo pool is only one of the pools available to the Fed. The GSEs, Fannie Mae and Freddie Mac, are another massive pool of sequestered, inflationary money created by simple fiat mortgage operations. The biggest pool of all is of course the derivatives monster with over $100 trillion in "notional" value. $29 Trillion at JP Morgan Chase's interest rate derivatives desk
http://www.pbase.com/image/31272753.

The attack on gold today tells us that there are real problems in the interest rate area as the Fed wants to reassure the bond guys that inflation isn't here... "Just look at sluggish gold" is their mantra.

In geopolitics, the Russian Federation is making noise these days with their perennial desire for WTO entry. We hear talk of a big 40,000 troupe support move for Iraq, apparent concessions by them in Georgia and mysterious Russian gold bars (Do they meet "good delivery" fineness?) showing up in Switzerland. The Chinese and Americans are outwardly adding pressure to the Russians on frivolous issues such as pork and grain exports. I suspect that these faux frictions are just for show and that the real deal is to get Russians to sell gold and pump more oil (If only they could). At the end of the day if a really big trade WTO moment happens, we can be sure that selling gold was there somewhere behind the scenes. Will they sell all their gold? Half? ....They are Russians...Russians never do what you expect.

One shouldn't forget that speaking about interest rates is speaking about gold so I get a kick when the CNBC bozos ask this or that self-appointed expert what their prognostication is for interest rates is to be. If gold were allowed to float, rates would necessarily rise in order to entice back former dollar holders so when the gold runs dry, as it must, there will be no limit up for interest rates, and no measuring the ensuing financial, social and institutional destruction.

The Iraq War dominates the headlines today. The hidden, desperate gold war is the one that counts.
Mike

A heads-up – an excerpt from Gary North's REALITY CHECK:

Issue 362 July 20, 2004

IS $30 OIL HISTORY?

Yes, according to T. Boone Pickens, the legendary Texas investor, who specialized in oil plays. He was interviewed on "The CBS Evening News" (July 18).

He was careful not to say that he had special information. He was making a "gut" prediction. The Saudis, he said, are not in a position to increase their oil output significantly. They are straining to produce today's output.

He said that he thinks oil is headed to $50/barrel. Thirty dollar oil is history. Gasoline could hit $3 a gallon before the end of the year…

-END-

Swiss legendary Ferdi Lips, a veteran GATA supporter, has sent us his wonderful speech presented at the University of St. Gallen (Allow for a decent amount of loading time):
Vortrag_UNISG_E_240604.pdf

The gold shares continue to fade away. The XAU lost .48 to 87.78 and the HUI fell 1.16 to 189.20.

As a result of what we have learned about gold through GATA, and about what is really going on behind the scenes in other financial markets, it feels like we live on a different planet. It is very difficult to view the markets like most others do because our prism is vastly different. The day is coming when many will finally "get it" and want to live on our planet too. By then it will be a very expensive place to live.

GATA BE IN IT TO WIN IT!

MIDAS

Hier mal der aktuelle Godmode-chart:

[Blockierte Grafik: http://www.godmode-charts.de/chart/charts2003/subcortical/O2/ugo358.gif]

... ziemlich schöne Punktlandung auf der Unterstützung bis jetzt...
Mal schauen, wie es weitergeht, jetzt wird es dann spannend...

Mit knapp 8,5 Dollar kostete eine Feinunze Silber (31,1 Gramm) im April dieses Jahres fast doppelt so viel wie nur 10 Monate zuvor. Seitdem sich die Kurzfrist-Anleger zurückgezogen hatten, sank der Kurs jedoch wieder auf 6,64 Dollar.

Auf mittlere Sicht sind die Experten aber weiter optimistisch. BW-Bank-Analyst Markus Mezger sieht die Unze bei 15 bis 20 Dollar - vor allem wegen des knappen Angebots und der eingeschränkten Kapazitäten der Förderer. Risikobewußte Anleger setzen auf Western Silver (ISIN CA9595311049, Kurs 5,8 Euro) und Pan American Silver (ISIN CA6979001089, 11,6 Euro).

Quelle: Focus, Nr. 30 v. 19.7., S.151

Das Spiel geht weiter - seit ich die Gold-Verschwörung von Ferdinand Lips gelesen habe, stehe ich Meldungen wie dieser äußerst skeptisch gegenüber. Vor kurzem habe ich noch gelesen, daß die nachfrage nach Gold höher als das Angebot sein - wer hat jetzt Recht ? Er oder ich

Graham French mag Rohstoffe, aber kein Gold

Auch Graham French, Manager des M&G Global Basics (ISIN GB 003 093 267 6) , ist für Rohstoffe positiv gestimmt. Mit Ausnahme der Goldaktien. Hier hält er die Fundamentaldaten für zu schlecht.

"Viele Aktien sind viel zu hoch bewertet und auch das Goldangebot übersteigt die Nachfrage", begründet der Brite. Daher hat er inzwischen auch keine Goldwerte mehr in seinem Fonds. Vor zwei Jahren hatte er noch zehn Prozent gehalten.

Fazit: Der Boom bei Rohstoffen dürfte weiter gehen. Allerdings werden nicht alle Rohstoffe unisono im Preis zulegen. Hier empfiehlt sich ein gut diversifizierter Rohstoff-Fonds. Und auch den sollten Anleger ihrem Portfolio nur beimischen

Markus Metzger schätze ich sehr, habe Ihn schon auf Seminar kennengelernt,aber Silber auf 15-20$ finde ich übertrieben.Wann soll den dieser Kurs reicht sein? 1Jahr, 10 Jahre ? keiner kann dass genau sagen, eigentlich sollte man skeptisch sein wenn ein Banker so optimistisch ist.Metzger ist vieleicht eine Ausnahme.
gruß hpoth

Ulf Moritzen von Nordinvest war gerade bei einem n-tv - Interview positiv für Rohstoffe eingestellt.

Seine Empfehlungen:

• BHP Billiton
• Rio Tinto
• Phelps Dodge

Ausführlichere Informationen gibt es im Premiumbereich von n-tv http://www.n-tv.de/premium (kostenpflichtig)

Hallo hpopth,

Du hast recht. In der Focus-Meldung gab es keine Zeitnennung.

Mir liegt allerdings die BW-Studie "Silbermarkt 2004: ein Update" vor (kann man hier bei den Goldseiten downloaden, siehe bei Ansichten + Kolumnen v. 21.6.). Wenn man sich die Studie durchliest, ist die Prognose eher ernüchternd vorsichtig.

Das Kursziel für 2006 liegt bei Gold bei ca. 600-800 US-Dollar. Bei einem Silber-Gold-Ratio von 40:1 leitet er ein langfristiges Kursziel von 15 bis 20 US-Dollar je Unze ab.

Angesichts der anstehenden finanziellen Verwerfungen und dem Geschehen am Silbermarkt ist diese Prognose eher harmlos und bei weitem zu gering angesetzt.

Zu dieser Studie habe ich am 21.6. ein Thema eingerichtet "Studie BW-Bank: Silbermarkt 2004: Ein Update" und diese Studie auch kommentiert.

Gruß

Silbertaler

Ein recht lesenswerter Artikel zum Silbermarkt:

SILVER Update - An Economic Geologist's Perspective
von Nigel Maund

http://www.clivemaund.com/article.php?art_id=402