[Blockierte Grafik: http://www.goldseek.com/news/LemetropoleCafe/lmpc.jpg]
http://www.lemetropolecafe.com
CARTEL CAPITULATION WATCH
Another quiet trading session for the US stock market. The DOW lost 6 to 10,310, while the DOG gained 7 to 1957.
Wall Street likes this:
May 5 (Bloomberg) -- An index of U.S. service industries unexpectedly rose to a record in April and more companies were hiring than at any time since November 2000, a private survey showed.
The Institute for Supply Management's index of financial services, construction, retail and other non-manufacturing enterprises that make up the largest share of the economy climbed to 68.4 in April from the previous high of 65.8 in March. Readings greater than 50 indicate expansion.
–END
The oil good news:
OPEC Overproducing, Cartel President Says
Tuesday May 4, 11:06 pm ET
JAKARTA (Reuters) - OPEC (News - Websites) President Purnomo Yusgiantoro said on Wednesday the oil producers' cartel was currently producing 1.5 million barrels per day (bpd) more than its official output limit and there was enough fuel in the market. –END-
The oil bad news is the overproduction isn’t stopping the price from moving higher.
If the heinous terrorists ever are successful in taking out a Saudi oil refinery for any length of time, we are going to come in one morning with oil at $50 per barrel. The Gold Cartel will be sucking wind big time if that ever occurs.
GATA’s Mike Bolser:
Hi Bill:
The Fed added $4 Billion in repos and this action rose the repo pool to $23.17 Billion. The continues to keep thew pool's moving average rising and the DOW's moving average continues to smoothly follow the gentle support.
Those that doubt the reality of the Fed's plan to intervene in the DOW and especially the other key commodities such as petroleum and precious metals are simply following their ingrained belief mechanisms, placed and reinforced by experience and the daily flow of government propaganda.
Attempting to sway them at this point is a waste of time and energy our task is to communicate with those whose perceptions have not been frozen in prehistoric amber. We in the gold bug community should not allow the soldiers of the cartel to sap our strength by reacting to their pejorative labels of "conspiracy theorists". The body of evidence is too high for us to bother. If an interested party hasn't got it by now they aren't going to ever get it.
The issue today regarding government intervention is one of apathy. Almost everyone accepts manipulation and even supports it because THEIR paper stock portfolios are "rising", "don't rock the boat", they seem to be saying. Well there ARE a few folks who haven't heard about the truth so we will keep appealing to them to place a reasonable fraction of their wealth in physical precious metal, which is my current recommendation. COMEX traders are playing with fire due to the rising probability of a default at which point the supply will be zero and the demand, infinite, as Professor Antal Fekete has just reminded us
http://www.financialsense.com/…als/fekete/2004/0503.html
In any interventional scheme, the future is known by the interventionists thus they have the prerogative to act based on the known future thus we witnessed Gold Corp down graded just before a downdraft in gold. The smaller gold equities are relatively safe and hold proportionately greater gain potential as gold grinds higher. Goldmoney.com is another wonderful way to participate in physical metal at a ridiculously low "commission" rates.
Even with the knowledge that gold is going higher, there are nevertheless setbacks so gold bugs need to trade a portion of their positions at highs and lows.
Mike
GATA’s Ed Steer, who has a sizeable mailing list, received the following commentary from Ross Beaty, the CEO of Pan American Silver:
Please delete me from receiving your weekly commentary. I get too many unsolicited emails already. Butler's personal criticism of the silver CEOs is quite extraordinary and utterly misguided. But he has a thick skin he says, and so he should not complain when I suggest he is simply nuts. Anyway, I don't want to read any more of this conspiracy-theory drivel. Believe it if you want, it's a free world. I don't.
Ross Beaty
In other words, this Beaty is saying the following are also conspiracy-theory drivelists:
Ferdinand Lips, author of Gold Wars
John Embry, President of Sprott Asset Management
Frank Veneroso, author of The Gold Book
Jim Sinclair, "Mr. Gold"
Don Doyle, President of Blanchard Coin
GATA
The GATA ARMY
I read Beaty’s comment to a very bright Café member who immediately sold his Pan American shares in grave concern for the man’s sanity. Mr. Beaty may be reached at:
This one is a HOOT! JP Morgan is surely qualified to fix the gold price every day in London. They have had years worth of practice:
Barclays and JP Morgan front runners for gold seat
By Katherine Griffiths, Banking Correspondent
04 May 2004
Barclays Capital and JP Morgan are the two front runners in the battle to replace NM Rothschild as one of a handful of financial institutions that fix the gold price every day.........
-END-
On the Buffett-like investment approach:
Bill,
Great commentary, as usual, these last couple of hectic days. Your explanation of the fundamental factors influencing gold's price should be required reading for every PM investor. Sometimes I wonder if all the guys who call themselves advisors ignore GATA's evidence because of the "not invented here" syndrome. They didn't figure the manipulation out themselves, so rather than give somebody else a plug, they just pretend the information isn't important.
I like your recommendation to follow a Buffett-like approach to gold and be patient enough for the fundamentals to overwhelm short-term influences. That also means investors should think hard before buying stocks on margin. How many margin accounts could have survived the mini-crash in shares we just had? I'm guessing that forced sales from margin accounts made the latest plunge a whole lot steeper than it would have been otherwise.
Last night I came across a column by Captain Hook that announced that gold is on its way down to $292. The column includes lots of colorful charts to prove the point. For me, this is an example of how chartists can go off the deep end. Has the Captain never heard of John Brimelow and his research into Asian demand for gold? How can gold reach $292 when there is likely enough demand out there to BUY OUT the Central Banks if they were foolish enough to dump all their holdings at once?
Besides, when will people realize that the gold cartel, as well as the floor specialists, can read, too? These guys must understand charts as well as anyone and use both inside knowledge and manipulation to clean out the accounts of anyone who relies on charts to make decisions. It's not much different than the way insiders back in the 20's used "pools" to fleece the public. That's what the SEC was created to fix. I guess it doesn't count if the government itself IS the pool.
Best wishes,
Peter R.
Derek Van Artsdalen from San Antonio:
Hi again, Bill:
I've been keeping an eye on the S. African Rand for your readers, and I wanted to send along this quick update. It appears we've got a technical breakdown, as I've been expecting for some time now. Have a look at the chart:
[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/DVA050504A.jpg]
This is the 3-year chart for the Rand, and you can see clearly that the price action has definitely droppedbelow the long-term support line of the uptrend (blue line) as
highlighted by the green arrow. Also, both the Relative Strength and the Moving Average Convergence/Divergence (MACD) indicators are weak and heading down right now (red circles).
I don't know if this is the beginning of a serious weakening of the Rand. This particular breakdown can no doubt be attributed to the recently strong U.S. dollar, but perhaps it's indicative of the beginning phases of general weakening among all the world's fiat currencies. We already know what the price of gold, the world's only real money, has been doing against the greenback, but let's see what's happening to the price of gold in Rands:
[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/DVA050504B.jpg]
As you can see, the recent 4-month downtrend in the price of gold in Rands (downsloping purple line) has come to an end, at least for now. The trendline was violated to the upside (green arrow) just over the past few days, exactly as I had predicted last week in "Midas." (Ouch! Sorry—I just threw my shoulder out of joint patting myself on the back).
The only resistance left now is the major downtrend ceiling (red line). I don't pretend to know if it will be broken, but it certainly looks like a real possibility now. If gold continues to get more expensive in terms of Rand, it should really begin to show up in the prices of the S. African mining stocks such as DROOY and GFI, both of which had strong closes Monday and Tuesday.
I'll keep watching this for your subscribers and will let you know as soon as there's any substantial change in the situation.
Thanks much,
Derek
The gold shares were creamed in the last half hour. The XAU fell 1.92 to 84.56 and the HUI lost 4.70 to 184.74. Sarge notes:
What a SUPERB job they did (starting at EXACTLY 3:30) of crushing all out gains for the day in the HUI. Relentless non-stop programmed selling. A full 4 points down in 25 minutes. Just wonderful.
So what happened at 3:30?? Why the move back to EXACTLY 185?? Why it busts the bullish technicals from yesterday, that’s why.
The Gold Cartel forces do it again. What a coming mess these scoundrels have created. The good news is we are getting more inklings the physical gold market is drying up. This is their weak link. There will come a time when playing these derivatives paper games to rig the price just won’t work any more. Keep that in mind as we slog along here.
GATA BE IN IT TO WIN IT!
MIDAS
Appendix
From Down Under
As more cases of torture and abuse of Iraqi prisoners by US and UK forces come to light, those that might be held responsible are ducking for cover. The Brigadier in charge of Abu Ghraib prison says she didn't know what was going on; neither did anyone else it seems, at least anyone who could have done anything about it, despite being told about these abuses by US Major-General Antonio Taguba back in February. As usual, those really responsible will probably get away scot-free, while the dispensables, like the halfwits who were only following orders will be left to carry the can. That process has already started - 6 squaddies have been charged, while a handful of officers have been 'reprimanded'. As I write, news is being released of an investigation into 25 deaths of prisoners in custody in Iraq and Afghanistan. What a crock. Ranking officers must have known these people died (or as seems likely, were beaten to death under interrogation) so why weren't all their deaths investigated at the time?
The abuses were carried out by military intelligence (such an apt oxymoron that phrase - goons who beat and torture people to death defy the term 'intelligence') and probably the CIA. The CIA won't even cop a slap on the wrist because they're answerable to no one, not even GWB. They have always operated outside the legal parameters that restrict everyone else's activities and will probably continue to do so.
The outrage in the Arab world is huge, far beyond anything that westerners can comprehend. Even Saddam wouldn't have stooped to the use of sexual humiliation as a means of torture. Dhia al-Shweiri, who was beaten and tortured by the Americans at Abu Ghraib, said he was electrocuted, beaten and suspended from the ceiling with his hands tied behind his back, "but that's better than the humiliation of being stripped naked." "Shoot me here," he added, pointing between his eyes," but don't do this to us."
Something else that Americans and the West don't understand is the Muslim and Arab concept of payback. Debts will always be repaid, and wrongs will always be revenged, however long it takes. Many may wonder why Al Qaeda has taken so long to follow up on the 9/11 attacks. Some might be lulled into a false sense of security by believing that defence measures are so efficient that any plots on mainland USA have either been deterred or disrupted. But for Bin Laden and his increasingly huge band of devotees, time is not an issue. The wrongs will be avenged at a time of their choosing, and probably when least expected. And the vengeance will almost certainly make 9/11 look like a picnic - Al Qaeda loves a spectacle.
Easy Al Greenspan was running for cover last night too. His statement on interest rates was just what the market wanted - Al makes sure he never upsets the screen jockeys and the trading banks. Yes, interest rates would eventually have to rise, but not now, and when rises come they will be 'measured' - whatever that means. As usual, nobody can readily decipher the gibberish that Greenspan continually spouts, and no one's any the wiser as to when the first hike will come. But by saying that inflationary pressures are 'contained' Big Al took a humungous sidestep away from reality. Anyone who has to buy just about anything knows that such a statement is pure garbage, especially when they're filling their petrol tank or buying heating oil etc. But Greenspan had no choice other than to talk such drivel because he simply cannot raise rates, either now or in the foreseeable future. He knows, and even the dummies on CNBC are becoming aware, that debt levels of consumers are so high that even a 25bp point hike will do serious damage. That corner that Al and the Fed have painted themselves into by encouraging every man and his dog to borrow and spend is getting smaller by the day.
Greenspan's only hope is that business expenditure picks up and takes the heat off the exhausted, bloated consumer. He also has to hope that some full time jobs appear in the stats on Friday - if they don't we might see a 1% discount rate until well after the November election - or until the whole house of cards comes crashing down, when that 1% is likely to go to zero.
As for George Bush, well he hasn't any hope at all. The world is thoroughly pissed off with Dubya - over Iraq and prisoner torture, and even more over Sharon's now ex-policy on Gaza and the West Bank. Sharon looks like a fool after his own party resoundingly defeated his proposition, and because Bush was so quick to endorse it, he looks pretty damn silly too. Over 50 US ex-diplomats are convinced that George is a prat, so much so that they wrote him a letter and told him.
The damage done to Muslim/US relations is probably irreversible. But George might just mollify some of the more moderate leaders if he were take full responsibilty for the Iraqi debacle, get down on his knees to Kofi Annan and apologise to him for pilloring the UN, beg him to take over peacekeeping duties, apologise to the American people and the families of hundreds of dead US servicemen and women, apologise to the Iraqi people for killing thousands of innocent civilians, apologise to the prisoners his clowns have beaten and tortured, and who have acted as badly if not worse than the dictator and his henchmen Bush removed form power. He should then fire everyone in his administration in any way connected with the plan to invade Iraq, including Powell, Wolfowitz, Armitage and the rest of the neocon nincompoops. He should fire George Tenet and his CIA goons who supplied hopeless information about WMD's. He should then fall on his sword and resign. And oh yes, before doing that he should kick Alan Greenspan out of office for manoeuvering the American economy into a black hole from which it may take years to emerge.
Do all that George, and you might just avert a catastrophe. Fat chance.
The Idle Fellow