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

March 2 – Gold $432.30 down 10 cents – Silver $7.29 up 10 cents

CRB Continues To Roar Higher, Led By Oil and Soybeans

This quote for Chairman Greenspan?

"We cannot afford to differ on the question of honesty if we expect our republic permanently to endure. Honesty is not so much a credit as an absolute prerequisite to efficient service to the public. Unless a man is honest, we have no right to keep him in public life; it matters not how brilliant his capacity." --Theodore Roosevelt

It’s about time. Much to The Gold Cartel’s chagrin, gold and silver finally traded like they used to before the rigging scam. Well, for a awhile anyway. As expected, gold and silver were trounced this morning as the underwater specs who bought all of last week panicked and puked out their positions early on. Gold took out key support at $4.30 and silver stared at $7. This had the cabal forces gleeful.

The trade, bolstered with cash bids in their pockets, then stepped up to the plate and began to buy aggressively. Why not? Oil took out $52 a barrel again, then barreled ahead to take out $53 per barrel, closing at $53.05, up $1.07. The CRB, led by soaring oil and soybeans, continues to make high after new high. Gold and silver are so undervalued it is absurd.

The best news is gold and silver were able to rally back from deep holes even though the dollar held its early gains. This is good. Very good. The euro gold price rose to 329.72 by the end of the day, a new high for gold’s recovery move back up.

There is no reason gold should not rally $100 per ounce and the dollar do nothing. I have been harping on that theme for some time. The ONLY reason gold has not traded like that is because of The Gold Cartel. They are using the dollar to suppress the price and to keep gold excitement to a minimum by only allowing it to rise gradually in dollar terms. However, because the physical market is now so powerful, it is causing them fits. With commodity prices on the rise and staunchly so, demand for cheap gold continues to build and build. It won’t be long before the bums can’t handle their pitiful program any longer.

The name of the real gold game is The Gold Cartel versus the physical market, not what the dollar does. We will know when the cabal is losing it when gold takes off in all currencies. It will mean they cannot rig the price anymore with their dollar/gold trading scheme.

Still, by day’s end it was a typical gold trading performance. Other markets coming back like gold did from a $4+ hole, and then going positive, would have closed up $3 for the trading session in a stunning reversal. Not gold. Not this capped market. That would have created way too much excitement. The Gold Cartel made sure gold closed lower. After all, Greenspan was testifying before Congress. It wouldn’t look right for gold to move up sharply the same day.

The fast funds were buyers as the day wore on.

The gold open interest fell 40 contracts to 287,761. The sell-off yesterday was not due to specs running for the hills, but due to Gold Cartel pounding.

Silver was the star of the session. What a comeback after being down 14 cents in the morning. Morgan Stanley was on the buy side again. In addition, they were selling silver puts. The silver open interest sank 2297 contracts as a number of specs did head for the showers.

Nothing wrong with this gold chart:

April gold
http://futures.tradingcharts.com/chart/GD/45

Support at the $430 level is solid. Once spot takes out $437, gold ought to head for $455 in quick fire fashion.

The spot CRB continues its powerful move up. This time it gained 1.39 to 306.65.

April CRB
http://futures.tradingcharts.com/chart/RB/45

The dollar rose .34 to 83.10 and the euro gave up .58 to 132.35.

The John Brimelow Report

Premium watching vindicated

Wednesday, March 02, 2005

Indian ex-duty premiums: AM $6.44, PM $7.97 with world gold at $431.30 and $428.55. Very ample and hugely excessive for legal imports. Anyone wishing to push gold below $430 had better to ready to ship a lot of physical to India.

Other markets may be interested too. Reuters this morning reported from Singapore:

"Gold dipped to a low of $430.75 an ounce in Asia -- a level that triggered fresh physical demand in Singapore. "I am not sure about other places, but demand is very good in Singapore," said one local dealer."

A bar chart of recent Turkish gold imports, acquired from Refco Research.

[Blockierte Grafik: http://www.lemetropolecafe.com…Midas/TurkishGold0302.gif]

They attribute the recent import surge to Oil prices, which is clearly wrong – oil was not particularly strong in November & December. The driving force in Middle Eastern gold demand is obviously geopolitical. Anyone who is feeling cheerful about matters in this area should read http://www.antiwar.com/lind/?articleid=5021.

One should remember that the issue here is not whether one thinks that America is likely to further embroil itself in the affairs of this benighted region, but whether the locals think that likely.

TOCOM today traded the equivalent of 21,879 Comex lots: open interest rose 823 Comex lot equivalent. The active contract was down 4 yen; world gold was down 90c. (NY yesterday traded 58,956 lots: open interest was down 40 lots.)

Mitsui-NY said frankly today:

"A weaker than expected Gold and Silver price has left many scratching their heads. After making a significant technical move by climbing above $430, and $7.50 respectively, both metals have failed…"

Various parties suggested long liquidation yesterday: ScotiaMocatta:

"…a weaker EURO convinced locals to sell out their long positions. The metal slipped to the 433.00 level ..."

Barclays:

"Gold prices are under pressure again as the dollar strengthens against the euro, persuading investment funds to liquidate long positions and cause gold prices to break through the bottom of their recent $430-438/oz trading range to a low of $428.5- this morning.

The Comex data, of course, entirely refutes this view: net, there was no liquidation at all.

Yesterday gold withstood a serious Bear raid. There was fresh shorting; but because of the physical market, gold under reacted. Indian premiums today indicate the Bears have seriously over reached. It remains to be seen how much the ever-present overhead seller will help.

JB

CARTEL CAPITULATION WATCH

The US stock market was all over the place. By the close it gave up all its mid-day gains. The DOW lost 18 to 10,811 and the DOG fell 4 to 2068. Bonds sank another 5/32 to 112 ¾.

The US stock market is set up for a substantial plunge.

Here is a real shocker:

March 2 (Bloomberg) -- Current federal budget policy is ``unsustainable'' and Congress must cut the deficit and shore up funding for Social Security and other benefit programs, Federal Reserve Chairman Alan Greenspan said.

``I feel that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver,'' Greenspan said in the text of prepared remarks to the House Budget Committee. ``If existing promises need to be changed, those changes should be made sooner rather than later.''..

-END-

Talk about mundane commentary. That takes the cake. A well read 6th grader could say the same. Wall Street loved it. The DOW and DOG, lower before these inane comments, roared back, before selling off when oil took out $53 per barrel.

US economic news:

DOE reports crude oil inventories +2.4M barrels vs. consensus +1M barrels
Gasoline inventories reported +1M barrels vs. consensus +1.05M. Distillate inventories (1.8M) barrels vs. consensus (1.225M) barrels.
* * * * *

1:22 API reports crude oil inventories +3.3M barrels
Gasoline inventories (3.9M) barrels, while distillate inventories (1.4M) barrels. April WTI crude is trading at $52.10, up $0.42 on the NYsession.
* * * * *

Those numbers weren’t bullish. This was though:

March 2 (Bloomberg) -- Crude oil rose above $52 a barrel in New York after a government report showed that U.S. refineries operated at the lowest rate since October.

Refineries used 89.3 percent of their capacity in the week ended Feb. 25, the lowest since October when companies were performing repairs after a hurricane hit the Gulf of Mexico, the Energy Department report showed. Supplies gained 2.4 million barrels to 299.4 million, the highest since July. The median forecast of 12 analysts was for a rise of 1 million barrels.

``The refineries have been going at high rates all winter in order to make heating oil,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. ``They have to perform maintenance that has been put off and we can expect to see more of this in coming weeks.'' –END-

Have to chuckle at this one:

Alert Name: Acts of terror

Canada minister barred from flight
03/02/05 12:15 PM, EST
Canadian Defense Minister Bill Graham had trouble boarding a plane to the United States in January because his name was on a U.S. no-fly list designed to deter terrorists, the Globe and Mail said Wednesday.
FULL STORY

http://www.cnn.com/2005/WORLD/….minister.reut/index.html

Important commentary from Richard Russell a couple of days ago:

President Bush wants an "Ownership Society." Well, I've got news for him -- we already have an ownership society. Americans borrow and the banks own them. Today everybody (except a small segment of the very rich) is in debt. I've heard it said that the typical American family couldn't raise three thousand in cash if their life depended on it. Sounds about right to me.

So let's call it what it is. We live in the debt-society, and our current "prosperity" is based on debt, debt and more debt. Is it a plot? Is it some kind of diabolic "foreign" scheme? Not at all. It's part of the law of unintended consequences. You see, following the bull market top of 2000, instead of allowing the US economy to correct, the Greenspan Fed decided to fight the bear "tooth and nail" (doesn't that sound familiar to veteran subscribers?). It was a case of "Inflate or Die."

How do you fight deflation and a potential economic collapse? You do it with negative interest rates (rates below the inflation rate) plus easy, very easy, credit. How is credit created? It's created through borrowing. So the Fed and the Administration made it really sexy to borrow. The "carry trade" went into high gear, borrowing at low rates short term, while buying longer-term bonds paying higher yields. At the same time, US consumers plunged into the housing market. Instead of "a chicken in every pot," the modern slogan was "a mortgaged home for every family." And if you can't pay for the home, well get with it dummy, the government will even lend you the money for your down-payment.

So that's where we are today in the "ownership" society. Last Friday (taking in all three exchanges), 55 Finance stocks hit new highs, 25 building stocks hit new highs, and 13 banks hit new highs. Which can't be much of a surprise. Of course, with crude now just below 52 dollars a barrel, energy is the latest "hot area." Last Friday 141 assorted Energy stocks hit new highs. At this rate, it won't be long before the oil companies will own us here in the new "ownership society."

I've described how Alan Greenspan studied the 15-year deflationary Japanese bear market. That was the bear market where some Tokyo real estate dropped up to 90 percent from its 1989-peak. In Japan more than 80 percent of bank loans were tied to real estate, so the banks took huge losses and guess what -- the banks stopped lending. And today the Japanese are still trying to recover. After all, Japan's bull market high in 1990 was 40,000 and today the Nikkei is trading just over 11,000.

How about a bit of history? Greenspan made a careful study of the Japanese deflationary bear market, and he must have said to himself, "I failed to recognize the bubble, and that was (gulp) my fault. Now the stock market's caved in, and the US could be another Japan in the making. Well, damn it -- it isn't going to happen on my shift." Greenspan may also have read Richard Koo's informative book, "The Balance Sheet Recession." At any rate, Greenspan decided that it was time to fight the bear "tooth and nail." Next step, Greenspan drove short rates down to 1% and at the same time he flooded the system with liquidity. Meanwhile, the Bushies instituted two tax cuts. I mean, was this goosing the economy or what!

At around the same time, China and other Asian nations decided that they must keep the dollar strong versus their own currencies -- all in their intense battle to be able to export on advantageous terms. The result is described in this week's Economist magazine. In the meantime, with the dollar sliding (oil is traded in dollars) and with China and India becoming major oil competitors, the price of oil was heading north.

Here are some quotes from the article in this week's Economist --

"Saturated. The world's giant money printing machine. How loose is the world's monetary policy? One gauge is that real interest in America and other countries are still negative. Another is that global liquidity has been expanding at its fastest pace for at least 30 years. This deluge largely reflects the combined effect of American and Asian monetary policies.

"One measure of 'global liquidity' consists of the sum of America's monetary base (notes and coins plus bank's reserves held at the Federal Reserve) and foreign-exchange reserves held by the central banks around the world. In both 2003 and 2004 this rose at annual rates of more than 20 percent. In no other two-year period since 1975 has liquidity increased so much.

"America's easy money policy of recent years has spilled abroad. Low American interest rates have encourage large inflows of capital into emerging economies, especially those of Asia, as investors have sought higher returns.

"Central banks are supposedly the guardians of money. Yet between them they have created the biggest liquidity bubble in history."

Russell Comment -- So you want to know what's really going on? This is it -- we're currently living through the greatest and most fantastic liquidity bubble in history.

As inflation heats up even further, the world's central banks (maybe out of embarrassment or fear) will be forced to raise rates. Or somewhere ahead, the so-called "bond vigilantes will do the central banks' work for them. Somewhere ahead (nobody knows the exact timing) rising interest rates will run headlong into the world of leveraged and overvalued investments (think real estate). By that time Alan Greenspan hopes he will be safely out of office -- and hopefully out of sight.

-END-

He is so right about liquidity fueling the US stock and real estate markets – now helping to fuel the commodity market surge.

He is also right about Greenspan’s approach to the markets. One more time for this Oldie But Goodie:

January 7, 1999 - Spot Gold $291.40 up $3.90 - Spot Silver $5.23 up 8 cents

Yesterday, I had a wonderful conversation with internationally renowned and London based, Teddy Butler Henderson. "Teddy", one of England's respected elder statesmen, has a very highly regarded investment service and is very well plugged in with the investment community in Europe.

You will get a kick out of this story. I sure did. "Teddy" had lunch in London with Alan Greenspan in 1971. Greenspan had his own consulting firm at the time. Both "Teddy" and Greenspan" were believers in the Kondratieff wave (cycle) theory. Greenspan told Henderson that his ambition was to become the top man at the Federal Reserve.

Knowing the Kondratieff cycle would be predicting a crash or depression of sorts about the time he would become head of the Federal Reserve, Greenspan told Henderson he could stave it off by various means (injecting money into the system, supporting the dollar, etc) and he intended to do just that if his career ambition came true. And you wonder if the gold market has been controlled!!!!!

Teddy (TBH) has been a believer that the dollar is in deep doo doo and, that while it has been weak recently, it has more downside to go - about 5% more against the Euro. Guess who wants it that way? Contrary to what you might think, it is Alan Greenspan, according to TBH. Teddy says that Greenspan knows that he had to take certain steps to keep the bubble going (a la the conversation he had with him 28 years ago).

Greenspan knows that our trade deficit is a problem and that our manufacturing sector and real world export sector of our economy needed help. Thus, he made the decision some time ago to work on getting the dollar down. To keep our bubble going, he needed to have this sector of our economy become more competitive. Solution - lower dollar.

Now, this does not make the euro crowd very happy according to TBH. Their reserves are in dollars and with the new start in EMU, they do not want economic problems for themselves. Today, for example, there were reports of a French, German clash over farm policies. A lower dollar can only exacerbate that clash.

At the same time, the EMU wants a strong euro in general. But they want it that way because of a strong economy, not a weak one. In that light, TBH feels that they will up the gold backing of the euro as a reserve at some point in the future. Interestingly, we reported talk of this to you some time ago and today's ECB comments are very encouraging. Teddy feels that the ECB will break ranks from Greenspan in his efforts to keep the price of gold down, referring to Greenspan's comment last July to a congressional committee, " Nor can private counter parties restrict supplies of gold, another commodity whose derivatives are often traded over the counter where central banks stand ready to lease gold in increasing quantities should the price rise". It is this breaking of the ranks that will spur the price of gold to much higher levels according to TBH.

TBH has been a big fan of the US stock market and has his followers heavily invested here (while hedging the currency risk). His reasoning is the strong U.S. economy and he knew what Greenspan was up to. He invested in the US equity market with conviction ( and with the help of his 28 year old information ) knowing that Greenspan would lower interest rates sharply in a pinch. For the future, he sees inflation in the US as workers demand much greater compensation for their efforts, especially as they see this incredible stock market rally. TBH thinks Greenspan will be very slow to hike interest rates in response to this inflationary threat, citing previous false alarms of inflation.

However, that growing U.S. inflation is the other reason TBH is bullish on gold. His long term U.S. equity outlook is not a rosy one, however. TBH sees the Greenspan induced bubble blowing up by August. Sometime before then, he plans to advise his clients to bid sayonara to Uncle Sam and our stock market.

-END-

The latest on GLD:

From the astute Chris Harris of http://www.harriscapitalmanagement.com

spent a good part of the day today doing research and haven't spent a lot of time writing. I was watching the new ETF gold fund trade next to the new ECBT gold futures contract to see how closely it was being arbed. It wasn't being arbed that closely, which was a little surprising to me since markets like the DOW diamonds move in locked step with the Dow futures, never more than a tick or at most two apart...indicating that there are autonomous arb robots in use between the two DOW markets but not in the gold markets. There may be an opportunity to exploit that.

-END-

Rhody on lease rates:

Hi Bill:
As you can see from the included graphs, gold lease rates were in massive backwardation in early 2001 and since then rates have declined consistently since then. By 2002, the spread between one month and one year rates had become a more normal .5% and since that time these spreads have shrunk to the present miniscule .1%. At times these spreads have been as low as .07%. One could say that the rate curve has tended toward zero and towards incipient backwardation at very low levels. These two trends seem contradictory. I see a deflation in lease rates that parallels a deflationary spiral overall.

So far this year and for most of last year, the once month term has had a tendency to rise, while the one year rate has continued to fall. Any trend that continues this long and marks a change in a previous pattern begs analysis.

Could we have a gold carry trade here? I am not talking about the traditional gold carry of lease gold, sell it and buy US dollar bonds of higher yield. I am talking about borrowing gold at low short term lease rates, and leasing out the gold again at one, two or even 5 year terms at higher rates. This captures the spread in metal interest and explains the fall in long term rates and the recent rise in short terms.

As leasing short term increases, the demand would raise rates. This gold is then leased out for one year, and the added liquidity would drop rates at the far end of the curve. The spread that is captured by this carry would be in the form of gold ounces, and these could be sold on the spot market. This too would depress spot gold. What I am describing here is gold carry piled on gold carry and all of it would be negative to the gold price. No wonder the bullion banks are confidant in piling on the futures trade shorts!

With this sort of pressure, I am amazed gold has risen at all. Only the physical demand has kept gold from total collapse. If true, what will end this carry trade? One possibility is a default or two on the long term lease end of the carry.. The other is a complete elimination of the spread over time. That trend is well established. Short term backwardation events will not interrupt this carry as it is the long term lease that is defining the profit, and these contracts are immune to short term events. I should mention that the increased supply of one year leases in gold facilitates mine hedging which is also a negative to the gold spot price as it encourages new mine gold production.

Here are today's lease comments. Gold was mixed, with the spread between one month and one year a low .1% or thereabouts.

Silver leases gained back about half of what is lost in the near terms.

Silver is beginning to display the same narrowing spread pattern between one month and one year rates as gold. It is now at .87% (.85% yesterday) Could this indicate a silver carry as well? We have a financial system based on debt, so why not? Does such a system imply that not having debt means one is poor? I better sign off before my mind explodes.
Rhody.
http://www.kitco.com/market/lfrate.html

Rhody on gold:
My two cents: Gold is a reserve asset for central banks because they list it as such on their books. So despite "going off the gold standard" in 1971, gold is still held as money along side all the paper stuff like T-Bills and currency in the vault. Gold is money because that is how it is being treated. Having said this, gold is detested by the present fiat financial system.

Gold is the antithesis of fiat. So, gold is held as part of the reserves, not because they like gold as an asset, but because they need the stuff as ammunition to throw at the gold marekt should the price of fiat fall. (Falling fiat values cause gold prices to rise.) Since central banks are in the business of creating fiat, and conning their respective people into working all their lives for pieces of paper, it is critical that gold never becomes perceived as a superior money and currency. When gold rises, central banks dishoard their gold reserves to attempt to suppress the price. That gets us to the present mess. Gold is rising and fiat is falling as central banks print banknotes by the truckload to stimulate their economies.

So inflation is becoming a problem. At the same time gold is thrown at the gold market to suppress its price. Look where that puts gold mines! The price of their product is suppressed while their costs inflate because of central bank stimulation.

This is why I have stopped investing in gold shares. Buy the metal, not the paper. "You will be at the end of a long line of people selling gold shares." (ANOTHER, 1997) I didn't understand this at the time, but I sure do now.
Regards, Rhody.

Good stuff from Rhody. I differ on one main point, however. My BET is what he is referring to re the shares is what we just went through. It has been a long line of sellers for a year now. That should be over. One reason is the public still can’t spell gold shares yet. When the US stock market and real estate head south, massive numbers of new investors will turn gold’s way. The tiny gold share market will not be able to handle all the buying. The gold shares will go ballistic.

Food for thought:

Hi Bill-
Our days are getting closer. As always, thank you for your courage and persistence.

Frank Veneroso presented the following, as I'm sure you are aware during March of 2003:

Gold:

The Investment Case, the Commodity Case

By Frank Veneroso

Dolder Grand Hotel

Zurich, Switzerland

March 21, 2003

http://www.canarc.net/venerosos_corner.asp

At that time, approximately two years ago a paragraph of his report stated on page 5 the following:

On the internet there is still much discussion of the gold loan position. Many gold bulls are eagerly awaiting the inevitable short covering explosion in gold. Well, it’s time has passed. What we have instead is simply a gold market under management by an official sector that has far less ammunition to enforce its management than most people realize. For this reason we believe that the official sector will lose control within perhaps 3 to 5 years. If investment demand materializes in the global gold market, that day will come earlier. There is mounting evidence that investment demand may now be entering the gold market and that such demands will increase. So let us turn to the prospect for investment demand for gold.

"official sector will lose control within perhaps 3 to 5 years. If investment demand materializes in the global gold market, that day will come earlier."

Today, March 2005, if Mr. Veneroso still believes this to be the case, then the above is now saying official sector will lose control within perhaps 1 to 3 years. If investment demand materializes in the global gold market, that day will come earlier."

Ok, now for my quick question(s). The next time you have the opportunity to speak with Mr. Veneroso, could you ask if he still believes the above to be the case and what is his current take on the subject "investment demand for Gold" since his presentation during March of 2003.

I believe all Le Metropole Members would enjoy, if possible, hearing of Mr. Veneroso's latest view. Thanks.

Go Gold Rush 21
Respectfully,
Bernie

Good news for these GATA supporters and for those Café members who own their shares:

Sur American
http://home.businesswire.com/p…0050301005953&newsLang=en

Klondike Star
http://home.businesswire.com/p…0050301005915&newsLang=en

Been a rough haul for my stocks this year. This one is bucking the tide. Remember when AfLease CEO Neal Froneman came to visit Charles Pace and me in Dallas last fall and was featured in the MIDAS? It has more than doubled since then. Neal is coming to Gold Rush 21 as are a number of other notable gold/silver company CEO’s.

AfLease closed in the U.S. at $8.15 today, up 15 cents. In the last 12 trading days it has gone up 35 percent and has gone up every day except one:

http://finance.yahoo.com/q/hp?s=AFLUY.PK

Long-suffering Golden Share Resources shareholders, like me, finally had a decent day. Been some rotten 14 months. Call me Downhill Bill on this one - $8.64 all the way down to $2.67. From a technical perspective we had an outside day key reversal to the upside as it made a new low for move and closed higher than yesterday’s high. I still have a great deal of confidence in their management to turn this bugger around. They should get their production up to 300,000 ounces this year and cut costs which skyrocketed. It finished the day at $2.98, up 23 cents. No reason Golden Star shouldn't reach $21 per share within two years.

Golden Star Resources
http://new.stockwatch.com/swne…utilit_snapsh_result.aspx

The gold shares caught a few bids, yet remain lackluster. The XAU rose 1.27 to 98.12 and the HUI gained 2.79 to 213.31. On a positive note the HUI took out 210 support, falling to 208.58 and then reversed course. Like that action. Once it takes out 220, look out above. Rocket ride time.

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

The leap in US commodity prices is no fluke. They are rising across the board and are likely to go MUCH higher as the year wears on. As mentioned above, gold and silver are ridiculously undervalued thanks to the price suppression scheme of The Gold Cartel. With the physical gold market so firm, it is only a matter of time, and I think not too much time, before gold and silver explode. More and more investors around the world want in on the commodities play. Gold and silver will be the grandest of them all.

GATA BE IN IT TO WIN IT!

MIDAS

The Deep Dark
By David Bond
Editor, http://www.silverminers.com/

Wallace, Idaho – "Hearses were in short supply in Kellogg, Idaho, in May 1972. A pickup hauled a dead miner to a hillside cemetery slashed with freshly turned earth. Another arrived in a station wagon."

Thus begins "The Deep Dark: Disaster and Redemption in America’s Richest Silver Mine," a riveting, page-turning and gut-wrenching account of the May 2, 1972 Sunshine Mine Disaster by New York Times best-seller Gregg Olsen (Abandoned Prayers, Starvation Heights, Cruel Deception, Bitter Almonds). The Deep Dark is due for release by Crown Publishers on March 1st.

From the very first of his 319 pages Olsen wraps you around his finger at the Jewell Shaft portal that fateful morning and doesn’t let go until the last of the 91 men who lost their lives in the sudden and impossible hell that enveloped them at the lunch hour a mile deep inside is laid to rest. You can read Clancy or Higgins for great fiction, John McPhee or Jack Olsen (no relation, but a friend and mentor to Gregg’s nevertheless) for non-fiction, and you will find none better.

I read the rave reviews of The Deep Dark from Publisher’s Weekly and the like and wonder if they read the same book I did. They talk of the bravado and macho of mining men like this was something different out here in the Old West. Oh, one supposes there is some truth to the notion that western hard-rock miners are a breed apart. Indeed, hard-rock mining is part balls, but it is also part intellect, part luck, part skill, part determination, part creativity – and it is surely no part dumb labor, at least not in the sense that the practice of law or banking or accounting are dumb labor. There’s nothing rote about hard-rock mining.

Nor is hard-rock mining, by the standards of this day, exceedingly dangerous. Truckers, power company linemen, loggers, pay a far higher workers’ compensation premium than do miners. This will come as a shock to most miners. (Review the stats further and you will discover that for municipal employees, it is far more dangerous to be a sewer worker than it is to be a cop.) Bring up either of these well-documented comparisons in the wrong bar, however, and your jaw will be merged with your lower stern bearings.

It is the suddenness, the strangeness, the swiftness and the violence that injures or kills a hard-rock miner that gives us our death-fix with these people. And the fact that mining camps are small places. If your partner gets "slabbed," (crushed to death in a sudden fall of rock from the back of a stope) there is a good chance he was on the school board, or an uncle to your neighbor’s kids, or coached little league, or taught debate.

No, what strikes this western reader is Olsen’s brilliance in bringing out the ordinariness of the men of the Sunshine Mine, then and now, the ordinariness of hard-rock miners and their human dignity. The kiss from a young wife. The plans to wash and wax the vintage Ford at shift’s end. The car-pool to work and its conversation about dumping shift that day to celebrate a friend’s birthday. And underground, even as death enveloped them, the passion of a man to save his friend’s life, to not get on the life-saving mile-long cage-ride to the surface until he was sure his partner was all right and already aboard.

It’s about guys who wouldn’t leave their jobs underground, at the controls of the hoists and aboard the cages, miners who having escaped death went back into the gas-choked mine to join a rescue team because there were men alive still underground, and gave up their own lives in so doing. Because they were miners. It is about the guilt of the survivors – a story as common and strange as war.

On another level, The Deep Dark is an indictment of Nixon’s mid-1970s corporate America, the age of the leveraged buyout, where accountant- and law-degreed middle-managers dithered while a mile beneath them, men’s lives hung on every second of indecision. And the fury of real mining men against this corporate Pablum, the fury of young men who would become decades later captains of this industry. Harry Cougher. Art Brown. Among the first of the "helmet team" rescue guys who understood the gravity of the situation a mile beneath them while men without chests awaited orders from higher up and sussed-out their financial projections.

The horrors of the Sunshine Mine Disaster I will leave to the reader of The Deep Dark to unearth. They are plentiful and graphic to a fault. But they are not told in a "he said-she said" vein. You see first-hand the Sunshine Mine Disaster from the eyes of the men who were there. It is their tale. It’s a narrative style you will find refreshing – told by a journalist who has the dignity and the decency to be invisible. Gregg Olsen makes you the lens of the camera. He is not in the scene.

The Deep Dark will open old wounds in my mining camp. Huge wounds, ripped apart by a UPI reporter who posed as a Red Cross candy-striper in order to infiltrate the rain-besotted camps of soon-to-be widows and orphans until he was called out by a miner for the fraud that he was. (Trust me: 30 years later they still hate journalists here because of his hi-jinks.)

Huge wounds, ripped apart by network television crews who hijacked Big Creek homes and power lines to file the latest sensationalistic lede. Huge wounds, ripped apart by Nixon’s Secretary of the Interior, Rogers Morton, who parachuted in to the mining camp to assure all of us that the mining company was doing all that it could even as Cougher and Brown chafed.

Huge wounds, ripped apart by "Jerusalem Slim" – Sunshine CEO Irwin P. Underweiser – who flew out from New York to set jittery shareholders to right by announcing, before the first corpse came out, that Sunshine Mining Company had production interruption insurance, and that a cessation of operations would improve the silver price – even as men still breathing that cruel air screamed from below in vain to be hoisted out, that from the company’s perspective, the Sunshine Mine Disaster was a good thing.

Huge wounds, ripped apart by a tragedy that killed every seventh father and uncle in this mining camp.

Yes, Gregg, you stepped into my mining camp and you reopened huge wounds. But I think in a way I would have wished I’d done, you also healed them.

One of the protagonists of your book, Ken "Ace" Riley, was my next-door neighbour on Wallace’s South Hill. He woke us up on occasion in the 1980s, screaming the black-and-white replays of his nightmare underground, of losing his partner Joe Armijo, in the deep and the dark. Ken’s kids, Greg and Randy, taught me how to chop wood. And next-door neighbour Ken, when my pipes froze up, was first in the attic of my log cabin to show me how to cheat a copper fitting and make it work. He gave me a stolen Hecla axe, and took up where his kids left off, and within a week I could make toothpicks out of logs.

Ken Riley was just one of 200 men living an uncommon life, with a common story. When we met I was a journalist and he was a miner, working, after the fire, in Sunshine’s lamp room. But we shared an affinity for Heidelberg beer and good conversation. We almost never talked about the fire. But it hung upon our shoulders like St. Elmo. He talked obliquely about how the union and the company had screwed the men, but I never knew his real story until I read Olsen’s book. Ken’s kids tell me now that, yeah, I never really knew the Old Man. He didn’t want to unload, back then.

But Gregg, he talked to you.

I was shooting stick at the Long Shot Saloon (formerly the Tip-Top) in Kellogg one Saturday morning four years ago when Gregg Olsen wandered in, looking for me, wanted to know what I knew about the Sunshine Mine Disaster, said he was writing a book. Well, I’d heard that happy horseshit before, besides I was always going to be the guy who wrote that book and who was he? Then he started shooting out names like Dionne and Beehner and Kitchen and Bush, the real guys. Told me more about those guys than I knew myself – and they were my neighbours. I told him about Ace’s nightmares; he’d already heard, they’d already talked.

Then Gregg went away, to work over every Sunshine Mine Disaster survivor and widow still living for their recollection. This part of research preparatory to writing is – trust me – the most difficult. And my friends reported back to me: "I think this guy gets it."

The pre-publication copies of The Deep Dark are in circulation this month up here, prior to its release to the New York snobs. (CBS News, by the way, does not want to touch this story because it is such ancient history. Apparently, so is the Hard Rock West. Hurricane Dan as dinosaur slayer. The story wasn’t good enough for them then: Why would it be now?)

Here is one widow’s reaction:

"You have written such a powerful book. It took me back to those horrible days when the entire valley waited for words of hope. My father-in-law was Bob Bush, he was one of three men in his family who died in the mines. My ex-husband got out of the Shine in the early 80's, and we moved to Alaska. We are so much a product of that environment. So many memories, so many names. Buz and Jenny remain dear friends. Thank-you for writing it, for giving them dignity. Thank-you also for clearing up the mystery of why it was so lethal. My husband may have known, but he never told me. My thanks are so pathetic an expression of what I feel for the miracle of this book you have written. I had wondered for years why no one had taken on the task. You have struck the right note.

"I must tell you also, I consumed this book. Obviously so painful a subject would not be savored, but I couldn't stop. I missed my yoga class and read for 6 seemingly short hours."

It was signed by a Sunshine widow, just a few days ago.

Hey, you with the cute charts: Men die for you. Hey you with the pump-and-dump scam. Men die for you. Ninety at a time, in the exploration camps, in the hard-rock mines. Does that make you, Mr. Normal with your accounting degree, feel superior?

Men die. It’s a fact of life for all of us. What Gregg does is dignify, for the first time in American literature, the hard-rock miner that walks amongst you. He is not macho. He is simply an American man. This is the stick-man miner of Hart, Twain and Solomon, suddenly flesh and bone.

The men who make lousy charts and stock scams are different from the men who actually bring you silver. Miners are living, breathing sentient human beings who occasionally die for you.

Gregg has breathed life back into the inert bodies of the 91 dead of May 2, 1972. That the Sunshine Mine is now in the hands of a man who lost uncles, grandfathers and friends in the Newcastle coal fields is of no small consolation to me. To understand mining at that visceral level – that mines are holes in the ground that occasionally do nasty things, especially if management is not looking – is not something your average MBA can suss.

Mines kill while you play with your chart toys in your air-conditioned condo in Florida. The beauty of the miners’ dignity is that they know this and go to work anyway. The least of the day’s pay hands has a triple-nine silver round on his mantle. He believes in what he’s doing.

Thank-you, Gregg. You’ve reminded the miner of the dignity he always had, a dignity that the poofters in their Park Avenue lofts will never know.

Gregg has healed us, vindicated our labours. Before you buy an ounce of silver stock, read this book. And give Gregg Olsen a Pulitzer. The American West has always had a friend in the hard-rock miner. Now the miner has a friend.

March 3 – Gold $429.60 down $2.70 – Silver $7.19 down 10 cents

GATA Sends Press Release on Stunning GCC Gold Report To Middle East Business Editors in Both English and Arabic

Perhaps that's all any of us can do. Choose one small piece of turf, be honest with ourselves, choose our approaches, stay in touch, remain constantly open to new ideas and new approaches, shut up, go to work, and hope for the best... Eliot Wigginton

GO GATA!!!

It was the usual Gold Cartel Comex drill this morning. Gold was due 70 cents higher based on the activity in London with the AM Fix at $ 433.25. However, just as gold was bopped for $1 near the close by the crooks on Wednesday, gold was immediately dropped $2 from its opening expectations. The dollar was doing little and commodity prices remained firm. An angry word must have gone out from cabal headquarters last night about letting gold rise in euro terms.

One possible reason for gold’s softness could be the latest from the moron the South Africans have in charge of keeping The Gold Cartel afloat. South African Finance Minister Trevor Manuel is nothing less than a traitor to his people. Either that or he is one of the dumbest finance ministers in history:

SAfrica backs IMF gold sales for debt relief-finmin

CAPE TOWN, March 3 (Reuters) - South Africa's Treasury supports the proposed use of IMF gold sales to finance debt relief for poor countries -- a process which need not disrupt the market, Finance Minister Trevor Manuel said on Thursday.

In a written reply to a question from parliament, Manuel said he favoured including 5-year quotas for gold sales allocated to central banks in 2004 for the process.

"The National Treasury supports the use of IMF gold sales to finance debt relief for poor countries," he said.

"The sale of IMF gold when done in a managed manner that is transparent, clearly communicated to the market and ideally along the central bank gold agreement, will mean that the market can price in the IMF gold sales and thus cause no disruptions to the market price of gold," he said.
((Reporting by Gordon Bell, via Johannesburg newsroom, +27

-END-

Listen, you dimwit Manuel. Just your comments like this send the price of gold lower. Meanwhile, production costs keep going up in your country and your mining companies have to lay off workers. $430 gold does not cut it anymore for a number of your gold producers. You should be talking of ceasing all central bank gold sales, so the price will rise enough to put miners back to work, which will stimulate your economy and help the poor. Need I say any more:

S.African DRDGOLD says may mothball North West mines

JOHANNESBURG, March 3 (Reuters) - South African gold miner DRDGOLD may have to mothball its entire loss-making North West mine operations if they fail to meet certain financial targets, the firm said on Thursday.

The company has been hit hard by a buoyant rand currency which cuts export income, since it has the most low-grade mines of South Africa's major gold producers.
"We are acutely aware that, in the event of failure to achieve these targets, placing the entire North West Operations on care and maintenance becomes an option we must consider," a statement said.

DRDGOLD shares, which have shed 35 percent this year, fell 5.45 percent to 5.23 rand by 1329 GMT.

Under "care and maintenance", production would be halted but infrastructure would continue to be maintained so that the mines could be reopened if the local gold price rises.

To keep the North West Operations open, productivity would have to increase by 35 percent and current working costs of 71 million rand a month would have to be slashed to 40 million rand, Chief Executive Mark Wellesley Wood said in the statement. The firm also said it had filed legal notices with trade unions about restructuring the mines.

In the six months to end December, DRDGOLD posted a net loss of 370.1 million rand, of which 75 percent was incurred by the North West operations.

"Currently, the North West Operations are losing some 20 million rand a month," DRDGOLD said.

Last week when interim results were released, DRDGOLD's auditor, KPMG, drew attention to the miner's weak financial condition, noting in its financial statements that current liabilities exceeded current assets at the end of last year. The company said last week the restructuring at the North West mines, which employs 5,613 miners, might take six months to a year and cost in the region of 30 million to 100 million rand. North West operations, consisting of the Hartebeestfontein and Buffelsfontein mines, accounted for 54 percent of the firm's South African output and 34 percent of total production.

-END-

Yep, Mr. Manuel, you are either a traitor or a dimwit. Most likely both.

Speaking of dimwits. Anyone left in the mainstream gold world that still doesn’t get it there is a Gold Cartel out there holding down the price ought to check himself, or herself, into the loony bin for a checkup.

The CRB rose again today. This time to 307.52, up another .87. Crude oil led the way, reaching $55 at one point before settling at $53.57, up another 50 cents per barrel. Pretty soon US commodity prices will make all-time highs with the gold price at HALF of its all-time high and THAT is with the central banks holding around 50% of the amount of gold they probably had when gold made that high in 1980.

Why gold HAD to be taken down today:

Fannie Mae faces up to $2.8 bln in new losses-WSJ
Thu Mar 3, 2005 01:17 AM ET
NEW YORK, March 3 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research) may have to recognize as much as $2.8 billion in additional derivative losses because of new accounting concerns raised by its federal regulator, The Wall Street Journal reported in its online edition on Thursday, citing sources familiar with the matter.

The losses would be in addition to the estimated $9 billion in losses related to derivatives that the mortgage giant already has said it will recognize as it prepares to restate its financial results. –END-

Another reason why gold was not allowed to rise today:

WSJ's Heard on the Street: Tony hedge fund runs aground
Thursday, March 03, 2005
By Robert Frank, Wall Street Journal

PALM BEACH, Fla. -- A hedge fund that counted some of Palm Beach's richest residents as investors has shut down amid an investigation by the Securities and Exchange Commission and the Justice Department.

The hedge fund, called KL Financial Group, had assets of more than $200 million. It has told investors that it ran out of funds because of heavy trading losses, according to attorneys and clients involved in the fund. The SEC plans to file a temporary restraining order this week to freeze any assets left in the fund, according to people familiar with the investigation.

Officials from the Federal Bureau of Investigation started combing the company's West Palm Beach, Fla., headquarters this week to investigate whether any of the funds were improperly siphoned from the fund for personal gain.

-END-