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

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Rand to kill South Africa's oldest gold mine

By: Stewart Bailey
Posted: '23-APR-04 15:32' GMT © Mineweb 1997-2004

http://www.mineweb.net/sections/gold_silver/318121.htm

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Union threatens strike at Gold Fields, Angloplat

By: Stewart Bailey
Posted: '23-APR-04 15:27' GMT © Mineweb 1997-2004

http://www.mineweb.net/sections/gold_silver/318117.htm

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http://www.mineweb.net/sections/gold_silver/318112.htm

Nevada gold, silver output in decline

By: Dorothy Kosich

Posted: '23-APR-04 15:18' GMT © Mineweb 1997-2004

The Nevada Division of Minerals reported this week that Nevada mines produced 7.318 million ounces of gold in 2003, a 5% production drop from 2002.

The value of last year’s gold production is $2.66 billion, an increase over the $2.4 billion produced in 2002. Nevada is the top U.S. gold producer and is the world’s third largest gold producer behind South Africa and Australia.

The Silver State also led the United States in silver production with 10.246 million ounces in 2003, a 24% decrease from the previous year. Based on an average 2003 silver price of $4.88 per ounce, the calculated value of the 2003 silver production was $50, a decline from $62 million in 2002.

Industrial mineral production remained relatively steady in 2003. The total value of the state’s industrial minerals, including aggregates, barite, clays, diatomite, dolomite, gypsum, lime and limestone, lithium compounds, magnesium compounds, opals, perlite, potassium sulphate, salt, and silicate sand was about $300 million. The total value of all mined commodities in 2003 in Nevada was about $3 billion, up from $2.8 billion in 2002.

In a news release, Alan Coyner, the Administrator of the Nevada Division of Minerals, said, “Although precious metal production declined in 2003, Nevada’s mining companies continue to make a substantial contribution to the state’s economy. Exploration activity remained strong in 2003, which should lead to additional discoveries and production in the future.”

Der neue GATA Beitrag ist noch nicht verfügbar, darum noch der gestrige Beitrag von J.B.

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The John Brimelow Report

West v. East

Thursday, April 22, 2004

Indian ex-duty premiums: AM $11.51, PM $10.54, with world gold at $391.50 and $391.60. Far above legal import level. Reuters carries a story from Singapore entitled

"UPDATE 1-Asia gold ignores firm dollar,kilobars in demand"

"Gold defied a surging dollar and gained more than $1 an ounce in Asia on Thursday, aided by fresh physical demand, dealers said. In Hong Kong, renewed buying interest pushed up gold bars to a premium of 20 U.S. cents an ounce to London physical prices…Gold bars were at a discount of around 15 U.S. cents an ounce two weeks ago, said dealers. Gold bars were also at a premium of 20 U.S. cents an ounce in Singapore, the entry point for much of bullion trading in Southeast Asia, due to steady buying interest from neighbouring Malaysia. "My customers are covering their short positions. I heard the market is short of kilo bars," said Maggie Loh, a dealer at United Overseas Bank in Singapore." Shanghai Gold Exchange premiums remain high, although the volumes are low. At present, the lack of evidence of serious Chinese involvement in gold is a positive, given the widespread fears of a Chinese slowdown. Japan was not impressed to find world gold down once again on the open. Volume fell 62% to the equivalent of 21,302 Comex lots, but the active contract only slipped 3 yen and open interest only fell the equivalent of 327 Comex. World gold was up $1 over NY at the close. With Platinum and Silver both down the limit on TOCOM again, gold did well to escape correlated selling from those trapped in the white metals, a phenomenon which has been seen in the past. Doubts held by a reasonable observer that there is a substantial spec short position on ought to have been dispelled by the action in the last half hour of Comex yesterday. Gold was smashed down $3.50 from virtually the high to the low on a blizzard of trading. Estimated volume jumped 40% - in the last tenth of the trading day. These were not intraday positions being unwound. (NY yesterday traded 85,384 lots: open interest rose 285 contracts.)
Norway’s "sale" of the 17.5 tonne balance of its gold in the first Quarter brings to mind the discovery by an enterprising LeMetropoleCafe member that the first sale appeared to be actually the gold being called away – as very likely was this tranche."

Very likely, much of the behavior of gold in recent years has stemmed from Central Banks writing, and then trying to avoid the consequences of, massive, poorly judged call positions.

While waiting for the Indians to cook and eat their Bear Curry, it is refreshing to turn to Bianco Research. Displaying an ominous chart showing the steep rise of implied inflation expectations as expressed by the TIPS spread, (second attachment), they observe:

"Even if we accept Greenspan's claim that TIPS overstate inflation, they are still in an uptrend (in the past Greenspan argued TIPS were a valuable tool in setting monetary policy). The uptrend is telling the Fed the market currently fears more inflation than a few months ago, and a year ago. An uptrend in TIPS sends the same message whether they overstate inflation or not. The fact that Greenspan now wants to dismiss TIPS since they are at odds with his view is telling - he starts with a conclusion and searches for facts to support it while dismissing facts that do not."

All good for confidence in Central Banks!

MarketVane’s Bullish Consensus for gold slipped into the 60s last night (to 67%). In the past couple of years, excursions into the 60s have marked short term lows. Nevertheless, the Bears are feeling confident. The JP Morgan "Metals and Energy Technical Strategist" exults:

"We are…hoping to see a rebound develop giving us a better selling opportunity before the markets heads towards 360/350."

This will need the delivery of staggering amounts of physical gold to India and the Middle East.

JB

Das ist ja eine schöne Bescherung!

Da wollen uns die Zentralbanken doch weissmachen, es handle sich bei ihren geplanten Goldverkäufen von 2500 Tonnen, um eine Beschränkung von Goldverkäufen, die einer angeblichen Goldverkaufsflut, und einem Preisverfall beim Gold entgegenwirken sollen, und dann lese ich hier, dass es die Zentralbanken nicht einmal sicher schaffen werden die 500 Tonnen Gold pro Jahr, oder gesammthaft 2500 Tonnen über 5 Jahre, für den bereits beschlossenen Verkauf bei den Zentralbanken zusammentrommeln zu können.

Das wird bestimmt noch sehr lustig !

Wie wollen die Zentralbanken ein Produktionsdefizit beim Gold von pro Jahr mehr als 1500 Tonnen Gold ausgleichen, wenn sie nicht einmal sicher 2500 Tonnen physisches Gold auf 5 Jahre verteilt für den Verkauf aufzubringen in der Lage zu sein scheinen?

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GFMS reaction to new Gold Agreement

http://www.gfms.co.uk/Market%20Commentary/newcbga.pdf

Since September 1999 gold has risen by a massive 50% in US dollar terms and, perhaps more significantly, is no less than 25% higher in euros. It is probable that policymakers would have drawn the conclusion – correctly in our view – that the market could absorb an additional quantity of central bank gold. The relative lack of price response to news of the CBGA’s renewal and its terms would also seem to confirm this supposition.

What is a good deal less clear, is precisely which countries will dispose of sufficient gold in order for 2,500 tonnes to be sold by the signatories over the five year period from September 2004. Prior to the first CBGA, Switzerland and the United Kingdom had already announced their intentions to sell large shares of their respective gold reserves. This time round, the Swiss will have a residual 130 tonnes to sell and the United Kingdom is out of the picture altogether (indeed the UK Treasury in not signing up to the second CBGA has explicitly ruled out any further sales). Germany is Europe’s largest single holder of gold reserves and the Bundesbank has announced its intention to sell 600 tonnes over the life of the new agreement – a relatively small quantity in the light of its more than 3,400 tonnes of reserves. According to a statement made by the Netherlands central bank in February, it will have 65 tonnes left over to sell from September 2004 onwards from its original 300 tonne target announced in December 1999. At this point, the Netherlands would still hold around 712 tonnes and we suspect that some of this could be released for sale under the second CBGA. Similarly, Austria, which sold 90 tonnes over the first three years of the current CBGA, indicated on 20th February this year that they would consider further reducing their gold holdings, which currently stand at 318 tonnes.

The total level of sales by Germany, Switzerland and, probably Austria and the Netherlands, are however, not going to be sufficient to reach the 2,500 tonne five-year limit that has just been established under the second CBGA. It would seem for that to occur France (3,025 tonnes) and/or Italy (2,452 tonnes) would have to change policy and initiate gold sales programmes.

This is because excluding these two countries’ holdings and those of Germany, Switzerland and the ECB itself, the other ten signatories’ aggregate gold reserves amount to only some 2,800 tonnes. Although arithmetically possible, it is highly improbable that, in practice, close to two-thirds of this quantity would be mobilised for sale in the five years from September 2004.

Of course, the other intriguing and alternative possibility is that sales will fall short of the 2,500 tonnes limit. This would seem to us an unlikely but not impossible outcome given prevailing attitudes in Paris and Rome.

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http://biz.yahoo.com/rm/040422/markets_gold_forecast_1.html

Reuters

Gold to climb on renewed dollar weakness -economist

Thursday April 22, 4:53 pm ET
By Clare Black

ZURICH, April 22 (Reuters) - Gold prices may rise again in 2004 as the dollar will not be able to sustain recent gains due to the large current account deficit in the United States, international economist Martin Murenbeeld said on Thursday.

Speaking at a European gold forum in Zurich, he said the dollar's recent strength was not a change in trend.

Zitat

"I argue that this is more of a correction than a fundamental change," Murenbeeld said.

Spot gold (XAU=) fell to its lowest in nearly two months on Wednesday under $390 an ounce during European trading hours as fears of an interest-rate rise boosted the dollar and made the precious metal relatively more expensive for holders of other currencies.

Murenbeeld said the last time the U.S. dollar had seen a significant decline -- from 1984 to 1988 -- the Federal Reserve started raising interest rates until the stock market crashed in October 1987. It subsequently bottomed in 1988.

Meanwhile, gold took off when the Fed started to hike interest rates -- due to inflationary fears -- and peaked during the stock market crash.

"The lesson is that rising U.S. interest rates is a warning for gold, but gold does not change direction as a result of higher interest rates," he said. "Almost every time in recent history when gold changed direction, it came together with a change in direction for the dollar."

Murenbeeld said he was "not at all convinced" a fundamental swing in policy, which could result in several years of rising interest rates, was under way.

He also noted that total U.S. debt (government, corporate and household) had risen to nearly 200 percent of gross domestic product in recent quarters.

Murenbeeld forecast an average gold price of $429 an ounce in 2004, based on a probability of 50 percent, which assumed the euro would move back to around $1.30 at year end.

That compared with his average for last year (probability of 55 percent) of $352, which at the time of forecast (March 2003) was above spot prices and thus bullish, but was lower than the actual average price of $363.

His alternative scenario for 2004, to which he attributed a 35 percent probability, was more bullish at $453 and assumed massive further decline in the dollar and increased geopolitical risk.

He gave a 15 percent probability that gold would weaken to an average of $372, assuming higher U.S. interest rates, a stronger dollar and tighter monetary policies around the world.

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April 23 - Gold $395 up $1.70 - Silver $6.14 up 13 cents

The Big Picture From Calgary

Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all...
Dale Carnegie

GO GATA!!!

Reporting in from Calgary which is the reason for the MIDAS delay. Been on the road all afternoon. Surprisingly warm up here - 65 degrees. It’s like this every time I come up to Canada. Great place to get a sun tan!
It was a little warmer in the gold and silver pits too. Gold bucked a stronger dollar to close somewhat higher, although off its early AM Fix of $396.25 due to increasing physical market demand. Efforts to take gold down during the Comex session due to the weak euro (which threatened to really break down technically) were thwarted because of that enormous bullion demand which John Brimelow diligently continues to bring to our attention.

The gold open interest fell 6261 contracts to 249,419. This means The Gold Cartel raid has flushed out about 57,000 spec longs so far as a result of their raid.

Silver firmed up right after the Comex close last evening and stayed that way for another 24 hours. The market is SOLD OUT! The reasons why:

*Today’s price action
*The silver open interest increased to 111,039, up 136 contracts. The market was bombed for $2.50 in two weeks. Anyone who is still long after this debacle is not going to exit on this run down. That is what the increase in open interest is telling us.
*The silver open interest only decreased 10% versus a 20% decrease in gold. Yet, silver was the market which was really mauled. This tells me the smart money knows this was a Gold Cartel manipulation for option expiry purposes and when that expiry is over, silver is headed right back up.
*Silver is about as oversold technically as it ever gets. The stochastics are off the charts on the downside. John Brimelow sends us this note from his friend Mr. Pring:

“The silver price is even more depressed than gold… The 10-day ROC is at a multi-year oversold condition. Going back to the late 1970’s we see that such readings are unusual, and typically generate nice rallies.”

The dollar closed at 91.36, up .25.

What strikes me the most these days is how bearish most of the commentary is on gold and silver. It brings me back to one of my favorite lines, Price Action Makes Market Commentary. In tandem it also brings me back to what I think is the essence of what the gold market is all about and why the price is going to go bonkers in the months to come.

The gold market is an illusion from a technical standpoint. For years the most powerful and richest people in the world have been shoving the gold price around to suit their own needs and agendas. They also have one of the shrewdest trading operations ever assembled. They read what most of the bigger gold market names put out, they know all the moving averages, they know where the stops are, they control the financial market press (a la the unpenned FT piece), they influence margin requirements at the Comex, etc., etc.

They utilize all their considerable resources and selling power to create a technical picture. They know a deteriorating technical structure in the gold and silver markets will engender even more selling and further negative market commentary, which is just what we encountered this past week. Stories are surfacing about gold and silver’s doom all over the place.

What everyone seems to forget is this is exactly the same nonsense these white collar thugs gave us below $300. The result: gold has rallied $100. Yet, every time the bad guys do their thing and engineer a rout, like we have experienced the past two weeks, the same downbeat commentary surfaces.

The problem for these bums is the physical market is eating their lunch. John Brimelow and Mike Bolser continually bring these facts to your attention. Yet, where else do you read anything on this? Years go by and there is only Brimelow and Bolser!

While The Gold Cartel fosters Western bullion and central bank selling anywhere they can, the Japanese, Chinese, Arabs, Turks, Russians, et al, are soaking it up. In effect these sheeple central bankers are selling the West out for short-term political and financial market purposes. This will all come to light in the years to come. That I promise.

I cold go on and one, but have to get this MIDAS out. The important consideration is for us to keep our eye on the donut and not on the hole. The Gold Cartel is gradually running out of physical gold and silver they need to suppress prices for any length of time. Yes, they can still win battles as we have just seen, but they are losing the war. The cabal forces just mobilized every trick in their play book to bury gold and silver and what has happened? The physical market in both gold and silver is on fire. Meanwhile, smart money specs want in now that the puking is ending. What do the crooks do for an encore at these levels with their firepower extended to the max?

One thing for sure, if they ever are going to try and cover even a portion of their short positions, it will have to be in a scenario like we have now when the specs have been flushed out and are going bearish. Once The Gold Cartel has got to where it wants to be regarding gold and silver, it will have to cover VERY quickly and buy everything they can before the specs realize what is happening.

Will they do it this time around? Don’t know, but it’s coming.

To know what GATA knows is a key to making a fortune on the big gold and silver moves still to come. The bad guys have surreptitiously lent out more than half the central bank gold, or 16,000 tonnes +. Gold mine supply is only around 2500 tonnes and is headed lower in the years to come regardless of what the gold price does. Gold demand exceeds mine and scrap supply by 1700 tonnes per year and that deficit will grow as Chinese gold demand kicks in. The Gold Cartel arrogants are facing a squeeze play in the years to come. It is their gold which is being dumped on the market to keep the price from going berserk. Only so much of that 16,000 minus tonnes will be available in the years to come. The cabal and friends are on a short lease.

I suggest you keep that in mind when you come across a bunch of negative gold and silver market commentary this weekend.

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The John Brimelow Report

Physical market present: will gold

Friday, April 23, 2004

Indian ex-duty premiums: AM $10.37, PM $9.14, with world gold at $393.55 and $396. Far above legal import level. Yesterday was a festival called Akshaya Tritiya, deemed a very auspicious day for financial transactions The invaluable gold news-gathering site http://www.thebulliondesk.com carries a number of Indian newspaper stories about bullion retailers staying open immense hours and doing huge business. However, these are really just coincidental to the physical market resurgence caused by the recent price slump. Standard London's commentator, speaking of yesterday, is quite lyrical (if ungrammatical):

"good physical demand kept continued to underpin the market and supported at 390. Throughout Asia, the same words in different languages were heard, "No more physical, next batch premiums higher", as consumers "rushed" to their bullion bankers trying to grab some gold while stocks lasted. Asian physical buying brought to its session's high." .

Japan was not particularly impressed. On quiet volume equal to only 19,761 Comex lots (-7%) open interest fell the equivalent of 1,828 Comex; the active contract was up 10 yen and world gold went out $1.15 above the NY close, as gold firmed up during the Asian day. The white metals have made this a rugged week for Japanese precious metals futures operators. The Shanghai Gold Exchange premiums remain very high, but with indifferent volume. (NY traded 44,189 lots on Thursday: open interest fell 6,261 contracts to 249,419, within striking range of the low range of 230-240,000 seen in February.

Gold resisted several attempts to break it down during NY hours yesterday. As ScotiaMocatta puts it:

".good interest was seen from a number of sources. Commission house buying took gold from an open of 391.70/392.20 to the 393.00 level where overseas sellers capped the price rise. The offering continued, forcing gold to the session low of 390.10/390.60 where physical buyers appeared.."

Refco Research (still hanging on to an immensely profitable silver short) felt sufficiently encouraged to call a bottom - as distinct from a rally- by selling puts:

"Sell 4 $375 June gold puts at market. Risk futures close under $380. Expect premium"

and they raise an interesting point:

"The COMEX reports small gains in open interest in gold and silver with respect to Wednesday's debacle. This would argue for a good amount of fresh shorting and the possibility of a short covering rally at some point. We're a bit skeptical of this data as it does not jibe with floor conversations"

In fact, the market action of the past few days - especially the ACCESS trading on Tuesday night - argues strongly for a significant short being in place. It is likely to be powerfully defended, but in view of the Indian premiums - not a generally considered factor - it seems likely to be ill judged.

JB

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CARTEL CAPITULATION WATCH

The US stock market keeps going on its merry way. The DOW gained 12, rallying late once again, to close at 10,472, up 12, while the DOG leaped 17 to 2050.

The good news:

April 23 (Bloomberg) -- U.S. orders for durable goods rose 3.4 percent in March, almost five times economists' forecast, led by bookings for autos, metals and business equipment, a government report showed.
Orders for items made to last at least three years increased to $192.7 billion after rising 3.8 percent in February, the Commerce Department said in Washington. Excluding transportation equipment, orders increased 3.3 percent, the biggest rise since April 2002, following a 1.1 percent gain. The government revised both of the February figures higher.

The bad news:

Gateway to cut jobs to achieve profits

Houston Chronicle - Consumer electronics and personal computer maker Gateway is considering a plan to cut its work force in half as it tries to return to profitability, a source said Wednesday.
The source said one possibility being studied involves eliminating 2,000 jobs, or about half the company's work force. Others include consolidating some facilities, changing product lineups and altering the management structure, the source said.

CHICAGO (Reuters) - Healthcare products maker Baxter International Inc. said Thursday it will cut up to 4,000 jobs to control costs as it reported a first-quarter profit that fell 13 percent from a year earlier.
The Deerfield, Ill.-based company, which named a new chief executive officer earlier this week, also said it plans to cut production of its plasma products in a bid to shore up earnings growth, despite stabilizing prices in that key market.

GATA’s Mike Bolser:

Hi Bill:

The Fed added $8 Billion in temporary repurchase agreements today April 23rd 2004, an action that moved the repo pool up to $34.58 Billion. They also issued a notice that there will be a permanent open market operation delivered on Monday. More support for the DOW is on the way.

We can now see that the DOW 30-day ma (green line) has leveled off as the repo pool's ma (red line) is still slanting upwards. This pattern will provide the necessary support to keep the DOW moving back up from its recent dip. As we move through May the DOW will regain 10,600 and possibly 10,800. This will continue to confound the TA adherents who imagine the index will fall. But the rising DOW is false wealth.

There are two bull markets, one in the DOW and one in commodities. One artificial and one real. The temptation is to ride the artificial DOW and then switch to say, precious metals in the real bull market. This thinking only adds to the risk. Pick the real investment and get on at an opportune moment.

If one were thinking of such a switch, now would be the time due mainly to the clear, unambiguous signal from the DIVG 200-day moving average:

http://www.pbase.com/gmbolser/interventional_analysis

That tells us the gold cartel's retreat is in full flower. They move the daily price of the MCDI and gold in order to produce the yellow trace.

Today's huge discount in gold is but a temporary illusion. The solid linear yellow line of the DIVG 200-day ma is no illusion. It is the ledger sheet of a defeated opponent who has decided he can no longer fight and is withdrawing, throwing tantrums and hurling threats of massive gold sales.

Don't be distracted by the many smoke screen tactics thrown up by the cartel. There is much going on behind the scenes and the gold buyers of the world are on the move.

Gold is headed higher.

Mike

Chuck checked in last evening:

Bill:

I have been pondering the sell off in the gold and silver markets over the past couple of weeks and have come up with some thoughts. First, since I am not in the inflationary camp, it didn't surprise me to see some breaks in the exponential moves in many of the commodities, silver included. The weakness in the gold shares especially the smaller ones have surprised me in their intensity. I didn't expect it because of the dumping day in and out of the shares. It has been a rare day when the XAU didn't decline either on the opening or intraday at least 1%, but sometimes more than 3%. Contrast that to the miniscule volatility in the stock market and the recurring pattern of gap ups and not ever being filled and you have an entirely different feel to these markets.

Then I looked at the early summer break in the gold complex back in 2002. If you look at the HUI chart you will find a very similar pattern. There was the top and then a failure to exceed it bringing a selling avalanche to the gold shares. In fact, the HUI, by my count sold off over 33% in 2002. If we had a similar decline now it would put this current bottom at about 175. Also, during that period gold, itself, only sold off by about $20 or so. Also, the stock market had a severe decline along with the gold shares.

What I am saying is that this decline differs so far because the gold shares have gone down independent of the stock market. I think that what we are seeing is a technical flushing out of the shares as we did back then. This time the owners of the small companies that will be the biggest winners in the gold bull have suffered the most. When I read that Andy Smith and Morgan are throwing on the dirt on the dead bull and the FT planted that story, I am certain that this sell off will not last much longer. If we repeat the last flushing out, we had a very good bounce followed by a test a few months later and then an excellent run to 250 on the HUI.

Unless there is an overwhelming deflationary disaster that will usher in a financial panic soon, there is no reason why this is just another flush out. I would imagine that your sentiment indicator must be almost negative. We are certainly in the most extraordinary of times. Your friend, Chuck

Richard Russell has this one nailed:

“Gold's erratic action is understandable when you consider that the world "central bank establishment" will always do all it can to discourage people from buying and holding gold.”

Dave Lewis with some words on The Chairman:

Bill,

The following is from yesterday's publication:

Yesterday, after reading the Chairman's expressed sense of the economic state of the nation and his admission that inflation just might be a concern it struck me that he, once again, is betting on symbolism rather than a holistic cure. As an aside, I wonder if he thinks just how silly he would sound to the average American if they cared and were willing to wend their way through the jargon: "what are you stupid, boy, prices have been rising for a while now."

What I mean by betting on symbolism rather than a holistic cure is that taken together, the notion that the Fed will eventually have to tighten and that the banks profitability won't be hurt because they will raise lending rates but keep deposit rates low is that the Fed isn't planning to truly cure the inflation problem, but they do plan to make a show of it. That is, the Fed may tighten but they won't invert the curve, i.e. raise short rates like the 3M rate above long rates, like the 10Y rate. In the past, curing inflation required just such a yield curve (link to graph)as that configuration hurts the banks profitability, reduces incentives to "grow out" of their problems and makes them clean out their bad debts. Given that the current spread is roughly a positive 340 basis points (3.4%) short rates would have to move up dramatically to invert the curve. Unless easy Al is prepared to take on the banking sector, rather than make token gestures, inflation, now, in my view, reasonably well entrenched will only continue to grow.

In other words, tightening per se won't stop this runaway train.

Regards

Dave Lewis
http://www.chaos-onomics.com

Sounds like the nails story of last evening:

Hi Bill,

The company I work for is in the process of building a 23,000 sq. ft. building to move into by August. Last week, the contractor informed my employer that he couldn't obtain trusses for the roof, and completion of the building would be postponed for 4-6 weeks. It's not a question of price; there are simply no trusses available. Even if we throw in a little incompetence factor on the contractor's part for not sourcing what he needed, that is one big delay.
–Ray

Some feedback to ponder:

Excellent write-up last nite!

Two comments based on last night's update:

1) as per the DC-based homebuilder. I've been spending a lot of time in DC the last 3 months and the market is indeed on fire. I will say, however, I believe it is the result of the Fed/Congress wanting to keep things exuberant in their own backyard. It is a fact in the Denver area, where I live, and in other regions west of the Mississippi River, that there is a growing glut of new middle income homes. So the DC example is certainly not anecdotal of the the whole country.

2) Regarding the Nasdog analogy to the metals market, I have been making that analogy for 2 years now. and the person is absolutely correct. Having actively day-traded the techies back then, the stocks went thru several severe pullbacks on the way to naz 5000. I would expect the mining stocks to be even MORE volatile because they are much less liquid than the tech stocks are.
Dave Kranzler

And:

Hi Again Bill,

Sorry to bug you at your busy time, but I wanted to say this. I started in the brokerage business in March of 1980, I was looking for some older broker to help me learn the ropes, a mentor. They were not very helpful. So I started reading the great books on the markets, that Richard Russell and others recommended going back to the 1920's.

But what really stuck me was after gold went from $35 to $800 and oil from $3 a barrel to plus $35, how few people made any money in the previous years. No one talked about the great wins in the commodity boom of the 70's. I guess most people bought at a top and sold at the bottom, or traded for $1 moves on the way up, only to continue to make a $1on up days and lose $3 on the corrections, until they finally buy and hold at the top.

I think it may be the same again this time, as you have stated many times, only the real precious metals bulls will win the day.
Best regards
John C. Newell

Some notes on Barrick and their hedge book:

Hedge book change costs Barrick US$32.4M br> Chopped 800,000 ounces

Drew Hasselback
Financial Post
Friday, April 23, 2004

…Barrick left US$32.4-million in potential revenue on the table when it chopped its hedge book by 5% or 800,000 ounces.

By the end of the March 31 quarter, Barrick's hedge book stood at 14.7 million ounces. That means Barrick has locked in a price for 17% of the gold reserves it has yet to mine.

According to notes in the company's quarterly report, in most cases the hedging contracts give Barrick until 2013 to sell gold at a fixed price. That fixed price averages US$397 an ounce, giving Barrick a significant degree of theoretical exposure.

On March 31, for example, the spot price of gold was US$427 an ounce. The mark-to-market loss of the contracts -- that is, the theoretical loss Barrick would incur if it had to close its gold hedgebook on that day -- would have been a stunning US$1.8-billion.

Assuming all other variables would remain constant, Barrick's says the spot price would have to drop to US$303 for the company to break even. Given the prevailing view that gold prices are in a new bull phase, that should provide cause for concern.

Yet the size of the potential liability doesn't phase Mr. Wilkins. He figures Barrick will have ample opportunity to close out its hedge positions over the next nine years. By the end of the year, for example, Barrick expects to chop yet another 700,000 ounces from the hedgebook, cutting its exposure to 16% of current stated reserves....

-END-

The gold shares continue to stink up the place. The XAU sank 1.42 to 88.12 and the HUI fell 2.15 to 195.05. The Gold Cartel’s antics have more and more investors running from the gold and silver shares. I wouldn’t put it past the cretins that they have orchestrated this too. AND, are waiting in the wings to load the boat themselves once they have most investors convinced there is little reason to be long the gold and silver shares.

We shall see. You know where I stand!

GATA BE IN IT TO WIN IT!

MIDAS

Appendix

From Robert G:

Hi Bill - I assumed you'd be getting some flak over the recent drop in PMs. As GATA grows and more people become aware of the gold manipulation, you have to expect more and more subscribers looking for a 'quick fix'. They probably still have that 'turkey looking into a bottle' stare from watching CNBC for years.

Well, I want you to know that I've been relaxed as can be over this. I've been following you for 4.5 years now. I know what to expect, though not when to expect it. I'm up so much (on your advice) that this pull-back doesn't bother me. I used it to dump more money into my ROTH. Thanks for your good work. Many, many people are behind you and realize what you do - interpret current conditions and try to explain them to the best of your ability.

Here's something that goes along with Ken Knight's letter. I got this on the back of a ticket for the Flying W Ranch near Colorado Springs CO. A friend was entering the AF Academy in 1969. I drove him out there from Wisconsin. We went to the ranch for dinner one night. I have carried it on my person for 35 years now. This is why I can bite Cartel in the ankle and hang on for as long as it takes for some of the heavy hitters to bring them down - it's in my blood as an American...

MY CREED By Dean Alfange

"I do not choose to be a common man. It is my right to be uncommon. I seek opportunity to develop whatever talents God gave me -- not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I want to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole. I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence nor my dignity for a handout. I will never cower before any earthly master nor bend to any threat. It is my heritage to stand erect, proud and unafraid; to think and act myself, enjoy the benefit of my creations and to face the world boldly and say -- 'This, with God's help I have done.' all this is what it means to be an American."

***

Hi Bill - Someone sent this to me and I thought I would pass it on to you. Regards, Mark.

This poem, written by Joe Bryant, an Australian can be likewise applied to the US and other western nations.

THE GHOST FROM FLANDERS FIELD by Joe Bryant

(Adapted from a poem by Douglas Walker)

I had a dream the other night, I'd like you to underst and,
A figure walking through the mist, with 30-03 in hand.

His clothes were torn and dirty, as he stood there by my bed,
He took off his slouch hat, and speaking low he said:

We fought at Gallipoli, and other horrific places to secure liberty,
We valued our Federation, as a shield from tyranny.

For future generations, this legacy we gave,
To this Australia, the land of the free and home of the brave.

The freedom we secured for you, we hoped you'd always keep,
But tyrants laboured endlessly while your parents were asleep.

Your freedom gone -your courage lost -you're no more than a slave,
In this Australia, the land of the free and the home of the brave.

You buy permits for everything, permits to own a gun,
Permits to start a business, or to build a place for one.

On land that you believe you own, you pay a yearly rent,
Although you have no voice in choosing how the money's spent.

Your children must attend a school that doesn't educate,
Your moral values can't be taught, according to the state.

You read about the current news, in a very biased press,
You pay a tax you do not owe, to please the parliament.

Your money is no longer made, of silver or of gold,
You trade your wealth for paper, so your life can be controlled.

You pay for crimes that make our Nation turn from God to shame,
You've taken Satan's number, as you've traded in your name.

You've given total control, to those who do you harm,
So they can destroy your place of work, and steal the family farm.

And keep our country deep in debt, and put good men in jail,
Harass your fellow countryman, while corrupted courts prevail.

Your public servants don't uphold the solemn oath they're sworn,
Your daughters visit doctors so children won't be born.

Your leaders ship men and guns to foreign shores,
and send your sons to slaughter, fighting other people's wars.

Can you regain your Freedom, for which we fought and died?
Or don't you have the courage, or the faith to stand with pride?

Are there no real values for which you'll fight to save?
Or do you wish your children, live in fear and be as slaves?

Sons and daughters of Australia, arise and take a stand!
Demand a fresh constitution, as the Supreme Law of the Land!

Preserve our Federation, and each God-given right!
And pray to God to keep the torch of freedom burning bright!

As I awoke he vanished, in the mist from whence he came,
His words were true, we are not free, and we have ourselves to blame.

For even now as tyrants trample on each God-given right,
We only watch and tremble -- too afraid to stand and fight.

If this Aussie stood by your bedside, in a dream while you're asleep,
And wondered, what remained of your rights, he fought to keep.

What would your answer be, if he called you from the grave?
asking, is this still the land of the free and home of the brave?

Lest we forget. Joe Bryant