Beiträge von Schwabenpfeil

On Barrick:

Bill,
The headlines today reads, " Barrick Gold fourth-quarter earns jump" and "Barrick Earns $156 Million-$0.29 per Share-in Fourth Quarter." If you read the fine print, that $156 Million includes a $141-million tax credit and a $15-million after-tax reversal, $48 million in other deferred tax credits, a $24-million after-tax gain on asset sales and a $6-million after-tax non-hedge derivative gain. These were partly offset by $110 Million in write-offs. After canceling all these gains and losses out, I count $32 Million in operating earnings - a bit less than the headline. It is also interesting that there were no charges for covering hedges. They did, however, raise $750 million dollars that can be used for "general corporate purposes" — whatever that is.
Best wishes,
Peter R.

Regarding Barrick’s hedge book from a Reuters release:

Barrick, which has promised to whittle down its hedge book to zero over time, trimmed contracts by 200,000 ounces in the December quarter, beating its 2004 full year target of a 1.5 million ounce reduction by 500,000 ounces.

But the Toronto-based firm refused to give a reduction target for 2005, although Sokalsky said it was still committed to working down the position, which stood at 13.5 million ounces at year-end, or 15 percent of reserves…

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The $6 Rule really came into play once the gold bull move began in earnest. Back when GATA was formed a little more than 6 years ago, it was more like a $2 rule. All they needed then.

The reason for bringing this idea to your attention is to find out if there is some member of the GATA Army who might like to do some preliminary numbers work here. The thinking would be to demonstrate how gold has traded on a daily basis the past three years versus a number of other markets, how it trades compared to yesteryear, and to come up with other factual data which proves from a numerical sense gold is not trading as a free market should.

Please contact me if you have any interest in helping with this.

An idea for GOLD RUSH 21:

Dear Bill,
I have been meaning to congratulate you on your efforts to convene at Gold Rush 21 the most influential analysts on the gold market. I would love to attend but my work load and my responsibility towards my young daughter, who has numerous major health problems, prevent me from travelling unless absolutely necessary, but I will be with you in spirit all the way.

I think this could be a seminal event for the future of the gold market and may well cause the market to trade " differently ", i.e. with less obvious manipulation, leading up to your convention. I would like to make one suggestion: The most obvious factor pointing to manipulation is what you discovered a long time ago - the "$6 Max up rule on any day."

In all my 24 years of investing and trading, I have never seen anything like it and I suggest to prove that this is indicative of concerted and illegal manipulation, that you hire 2 independent and well recognized statisticians (professors at well known universities?) to show what that probability is of happening on a recurring basis the way it has. It would involve going back to the beginning of the bull move and each day identifying when the rule took effect and then doing the statistical analysis to show that it would be as probable as my being beamed up to a spaceship.

I'm sure that is what the results would show and it would lend enormous credence to your/our thesis of manipulation and then would garner the attention (I hope) of the financial media, attorney generals, CFTC, etc. It is always very hard to prove manipulation but this would do it in spades and I think would force some authorities to look into it seriously and, at the same time, raise alarm bells for the general public. I admire your perseverance, tenacity, will to fight for a cause no matter how popular it is or isn't and I wish you continued success.
All the Best,
Michel de Chabert-Ostland

DOLLAR COLLAPSE AND THE SILVER INVESTOR
by Jennifer Barry
http://www.discountsilverclub.com

America has prospered since the Bretton Woods agreement enshrined the US Dollar as the world's reserve currency. Today, over 60% of currencies held by central banks are dollars. Half of world exports are priced in dollars, as well as all IMF loans, and OIL. In order to get dollars essential for trade, foreign banks have to buy Treasury bills, or sell goods and services to American consumers. We no longer have a gold standard to restrain the printing of dollars. They cost almost nothing to produce, so we get to buy foreign products very cheaply. Since we run a trade deficit, where we import much more than we export, America has in effect a 0% loan from the world. This is sustainable only as long as other countries consider us a good credit risk.

For many years, the dollar was strengthened by this built-in foreign demand. However, this strength caused our exports to be very expensive, and forced many US manufacturers to outsource or go bankrupt. In November, we hit a record trade deficit of $60.3 billion. The only way to narrow this gap is to print money, that is, pay for foreign products with dollars that are less valuable. Federal Reserve Chairman Alan Greenspan has obliged, but the trade deficit continues to widen. It's now topped 5% of GDP, a level which usually causes a currency crisis.

The value of the US Dollar is based on supply and demand, and right now the supply is too high for the world's needs. Since 1999, countries have a new choice: the Euro. Russia, China, the Philippines, and Japan are currently considering holding more euros in their currency reserves. Until the US invaded, Iraq was selling its oil in euros, not dollars. In 2003, Malaysia proposed that Islamic countries use the Gold Dinar for foreign trade amongst themselves. If this happened, the demand for dollars would drop further.

In the last 2 years, the dollar has weakened significantly against the Euro and other world currencies. Japan and China were buying dollars to bolster our economy, and ensure that Americans keep importing goods at a blistering pace. However, in March, the Japanese changed tactics. They stopped buying US Treasuries, and decided to sell more products to other Asian nations. They've even been talking about establishing the yen as an Asian reserve currency. If China stops propping up the dollar too, its value will fall even further.

So, how can silver investors benefit from this potential currency crisis? First, printing money causes commodity inflation, and silver is not immune. It may be manipulated right now, but eventually, the supply deficit will cause the price to skyrocket. Since the dollar will be losing value at the same time, the price will rise even higher versus the dollar. Silver's artificially low cost is actually a gift, because it lets you stock up before the investing world discovers precious metals.

Second, silver is a real asset, and it serves as a safety net for your retirement savings. Paper investments are a promise to pay, a debt obligation of someone else. What happens if they default? Social Security has $7 trillion in unfunded liabilities, and will eventually go bankrupt, so you can't depend on it long term. Stocks could crash again, and bonds are destined to lose value as interest rates rise. Silver, however, has intrinsic value, and it can never be worthless.

Third, as people watch the dollar decline, inflation heat up, and imports become more expensive, they will start to lose faith in the dollar. Faith is important, since the dollar is a fiat currency, with no intrinsic value to support it. People will dump paper promises, and flee to hard assets like silver. It happened in the 1970's, and the commodity boom didn't end until interest rates passed 20%. Silver might become popular as money again, like it was for most of American history. In fact, it's already started. You can spend precious metals for goods and services, using GoldMoney, the Liberty Dollar, and the Gold Dinar, for example. Monetary demand will make you glad you bought silver when it was cheap!

jennifer@discountsilverclub.com

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Worth a note:

08:48 RIGS Washington Post reports liberal use of RIGS corporate jet
According to the Post, records show that RIGS frequently made its Gulfstream available to friends of former CEO Joe Albritton at the expense of RIGS. One of the beneficiaries was NBC's Andrea Mitchell, wife of Alan Greenspan and Chairman of the Fed, which regulates RIGS.
Reference Link
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This struck me also. Heard Congressman Ron Paul, whom I have had the pleasure of meeting in Washington, was speaking about gold on CBNC and went in to watch him. It took me five seconds to return to my computer when the CNBC economist had to suddenly interject his opinion of what Greenspan had to say about Social Security. Paul and his gold commentary was taken off the air….

Bill
Don't you love it. No sooner does Ron Paul come on who I was looking forward to hearing and CNBC cuts in the top corner of the screen and totally obliterates most of his statements and questions that began about a gold standard. Should I have expected any less? What a crock!
Peter Hill

Since silver has been center stage of late, I thought this overview might be helpful to newer Café members. I met Jennifer, the author, at my reception for Mahendra in Dallas last May.

From The King Report:

Merrill’s latest survey of global fund managers shows they expect deteriorating earnings, higher inflation and interest rates but they have gotten more bullish on stocks. Merrill’s David Bowles opines, "The bull case for stocks is now more about balance sheets than earnings." That’s called rationalization. The Merrill survey of 320 global managers shows the average balance fund is 55% equities, but 25% of funds are 65% or more in equities. The FT notes, "The average cash balance of funds in the groups surveyed had declined from 4.8% in August to 3.6%." Equity investors are at their most bullish reading since April. The FT also notes that a rival State Street survey shows Investor Confidence declined to 88 in February from 89.8 in January…3.6% cash is a new record low. Bear markets have invariably commenced when cash levels have gotten near 4%.

The BBC reports, "China has overtaken the United States in the consumption of basic agricultural and industrial goods, a new survey says. It is now the world's biggest consumer of grain, meat, coal and steel. Only in oil does the US consume more." And guess what happens to the price of oil when China starts consuming as much or more oil than the US consumes. China per capita consumption is far below US per capita consumption – Thank God! http://news.bbc.co.uk/2/hi/asia-pacific/4272577.stm

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DJ Greenspan: `No Reasonable Basis' For Large GSE Portfolios

By Elizabeth Price and Dawn Kopecki

WASHINGTON (Dow Jones)--Federal Reserve Chairman Alan Greenspan said he sees "no reasonable basis" for Fannie Mae (FNM) and Freddie Mac (FRE) to hold vast mortgage portfolios and told House lawmakers that Congress should consider gradually limiting their portfolio holdings to fend off "the problems that are almost inevitable."

"We have found no reasonable basis for that portfolio," Greenspan told the House Financial Services Committee, referring to the roughly $900 billion mortgage portfolios Fannie and Freddie both currently maintain. Greenspan said Congress should consider limiting their portfolio holdings over time, "because these institutions continue to grow and have the low capital they have and continue the hedging they need to do ... they potentially create ever-growing potential for systemic risk down the road."

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In very late, bearish news for the tech sector:
17:59 Semi equipment book/bill reported at 0.80 in January vs consensus 0.92
The December reading was revised to 0.94 from 0.95. Bookings were (18.2%) vs a StreetAccount consensus of (11.0%); billings were (3.8%) vs consensus (8.2%).

NEW YORK, Feb. 17 /PRNewswire/ -- The Conference Board reports today that the Composite Index of Leading Economic Indicators declined 0.3% in January, following a 0.3% increase in December, and a 0.3% increase in November.
Says Conference Board Economist Ken Goldstein: "The picture at the start of 2005 is positive, but more spotty than robust. The leading economic indicators dipped in January, following two straight months of improvement. Prior to that, the series had turned down for five straight months, but the declines collectively have been relatively modest. Over the same period, the coincident index has remained positive. The spike in energy prices and the lower dollar took some steam out of the economy. But the larger concern remains cautious attitudes. Business concerns about the direction of cash flow could lead to cautious decisions about hiring and rebuilding inventory."
The Conference Board also reports that the Coincident Index was unchanged in January, following a 1.1% increase in December, and a 0.1% increase in November. The Lagging Index increased 0.3% in January, following a 0.7% decline in December, and a 0.2% decline in November..

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12:00 Feb. Philadelphia Fed index reported 23.9 vs. consensus 17
Prior reading 13.2.
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12:01 Follow-up: Philadelphia Fed prices paid 43.5 vs. 66.1New Orders 11.7 vs. Jan 9.8.
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Here is a real potential trouble spot, one highlighted in MIDAS for some time. Fannie Mae made a 52-week low today, closing at $60.61, down $1.41.
http://new.stockwatch.com/swne…utilit_snapsh_result.aspx

One can see why The Gold Cartel/Working Group on Financial Markets is so concerned about capping the gold and silver prices. What do you think the mainstream world pundits would be clamoring about if gold rallied $20 this week? Bonds are sinking fast as is. How much faster would they be sinking with gold soaring and commodity prices making multi-decade highs? Those who still need a motive for The Gold Cartel doing what it does, you have one.

During a choppy volatile trading session, the dollar fell .24 to 83.48 and the euro rose .23 to 130.78.

US economic news:

08:30 Jobless claims for week ended 2/12 reported 302K vs. consensus 315K
Prior week revised to 304K from 303K.
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08:30 Jan. Import/Export Prices expected 0.9% vs. consensus 0.6%
Prior reading revised to (1.4%) from (1.3%).
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(That import number is fairly inflationary.)

10:00 Jan. LEI reported (0.3%) vs. consensus (0.2%)
Prior reading revised to 0.3% from 0.2%.
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CARTEL CAPITULATION WATCH

Is reality finally coming home to roost on Wall Street and to stock investors? Too early to tell, however today might be the start of something very disturbing to Joe and Jane out their in America. The bottom line is after Greenspan’s testimony was concluded, the US market headed south with some conviction. The DOW fell 80 to 10,754 and the DOG sank 26 to 2061.

While the US market has been firm of late, all attempts to take the majority of the major averages to new highs have been continually rebuffed. My take is the same. The good news is well behind this market. The mess in the Middle East and the US refusal to deal with our fiscal problems are going to go center stage and the market is likely to be pummeled for most of the rest of this year. I suspect the PTT is going to be overwhelmed at some point, like The Gold Cartel, and we are likely to experience some serious down moves, ones like we have not seen in years.

The bonds have reversed to the downside with a vengeance. There are all kinds of ramifications for the US economy if this keeps up.

March bonds (114 14/32, down 14/32)
http://futures.tradingcharts.com/chart/TR/35

The John Brimelow Report

Thursday? Must be Syria

Thursday, February 17, 2005

Indian ex-duty premiums: AM $6.00 PM $4.01, with world gold at $424.60 and $426.45. Adequate, and slightly below legal import point. World gold rose almost $2 quite abruptly just before the Indian close, and also the rupee dropped over 1% on a bout of Reserve Bank intervention, which arguably distorted the afternoon reading. However, the impression remains that forces other than India are predominant in gold right now.

These forces are not Japanese . TOCOM volume was virtually unchanged at the equivalent of 17,046 Comex lots as was the active contract (up 1 yen), but this meant world gold was down$1 from the NY close. Open interest slipped the equivalent of 534 Comex contracts. (In NY on Wednesday volume was 48,601: open interest rose 790 contracts.)

In a crucially revealing passage, UBS says of the Iran explosion scare yesterday:

"…there was no sign of any panicky short covering on Comex, which is a clear indication that there are few vulnerable shorts in the gold market at the moment. Considering the large build in gross short positions to 8 February and the subsequent rally in gold it is clear that short covering was behind (or at least heavily involved in) the rally in gold and that this is now largely over."

Of course, the open interest data shows no sign of any short covering since the last CFTC cut off – open interest is up 7,995 lots or 24.4 tonnes. Short covering must have taken place, given the violence of the price rally: clearly there has been substantial fresh selling.

UBS says as much in its further comments on Wednesday’s trading:

"Although the metal rallied in line with the move in the euro, there was no sign of any panicky buying and two US banks were noted sellers into any signs of strength."

Or as Mitsui-London says of the rally in gold:

"It feels at the moment as if the selling might be a little too much…"

Since the chasm between mainstream U.S. media coverage of the Middle East and that of the rest of the world is wider than ever, it might be easy to overlook the widespread expectation that America is about to conquer another country. A good antidote is
http://antiwar.com/justin/?articleid=4861

Regardless of the merits of this policy, it must inevitably affect gold demand.

JB

One more plus for silver. When a dramatic play on a market, like after what the cabal did to silver, fails, it emboldens other specs to enter the fray to take them on. Whether you believe it to be a cabal raid or not, the pros know someone is TRAPPED here BIG TIME. Even better if they don’t know it is the cabal. The pro specs will be emboldened to go long at this price level, knowing a big short is sucking wind.

More good news. JUST IN. After doing nothing for weeks, the Comex silver warehouse stocks fell a sizeable 806,116 ounces to 101,223,894, a new LOW. Now we have the intriguing possibility this recent silver price run-up has been one in advance of someone going after the available silver supply on the Comex ahead of March delivery notice time. Stay tuned.

The gold open interest rose 790 contracts to 263,279. Same comment from me...room for 100,000+ new spec longs to enter the fray and take gold to new highs. Same drill with silver.

The CRB, led by surging copper, rose to 290, up 1.43, within striking distance of two decade plus highs. It did so even though oil sank 80 cents to $47.53 per barrel. The April contract made another contract high and is following through on its recent key reversal.

Commodity markets are on the move. It won’t be long before the CRB has a 300 handle.

We mentioned the 4,000 contracts traded. This OI number increase is close to that amount.

*On the alarming and sudden price contraction it has to be assumed some longs were scared out, which would mean a contraction of the open interest. With some normal spec liquidation, it gets us back to the 4,000 number of new shorts.

*If the weird and dramatic price drop were a huge spec liquidating, the open interest should have dropped by 3,000 contracts, not risen almost that much.

*What crazy person would go berserk shorting silver like that in such a thin market other than to influence markets? No person in their right mind would trade such heavy volume to bury a market like that unless there was some hidden agenda. Hidden from the average bloke and the dummies in the gold/silver world who, "See No Evil, Hear No Evil, Speak No Evil," yet certainly not from the GATA ARMY camp.

The Gold Cartel is now underwater on all their silver sales in the Access market, undertaken to influence the gold price. If silver goes like I have been pounding the table on, they will have to cover with huge losses at some point. The difference between them and a normal account is these losses are meaningless compared to the kind of money they have to throw around, and in the scheme of what they are doing to keep long-term interest rates down. What do tens of millions in silver trading losses mean versus keeping the mortgage/real estate market percolating along?

March silver, gearing up to challenge $8
http://futures.tradingcharts.com/chart/YI/35

One fine looking April gold chart
http://futures.tradingcharts.com/chart/GD/25

March copper – no signs of deflation here
http://futures.tradingcharts.com/chart/CP/35

Middle East concerns continue to loom:

10:15 Bush calls for Syria to remove troops from Lebanon -- Reuters
The President says he will withhold judgement on whether Syria is responsible for the killing of Premier Rafik Hariri.
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Well, we pretty much received our proof the silver raid in the Access market on Tuesday evening was a blatant attempt by The Gold Cartel to influence the gold market and (as previously mentioned) to keep the prices of gold and silver contained while Greenspan was preaching to the Senate and House banking committees inflation was of no major concern.

The silver open interest announced today, which included that Access trading, rose 2758 contracts on the bizarre downdraft move. How we know what transpired Tuesday night was Gold Cartel inspired:

An unexpected fly in the cabal’s ointment surprised them late however and almost upset the apple cart….almost throwing their "best laid plans" out the window. March copper was firm all day and then EXPLODED near the close to finish at $1.4935, up 4.55 cents, a contract high and a new 16-year high. This spooked the gold and silver market, touching off buy stops. Gold shot up to $428.10 and silver rose to $7.40.

Frantic calls must have gone out from Gold Cartel headquarters to save the day and to carry out the day’s instructions from The Working Group on Financial Markets at all costs. Those calls did not go unanswered. The cabal forces (led by Deutsche Bank) made sure gold closed below $427 and silver was beaten back 7 cents going into the close in another disgusting display of how free markets in the US continue to go the way of the dinosaur.

The good news is the bad guys held the fort, but they are surrounded by would-be gold investors. Forces are building everywhere which are going to make The Gold Cartel’s assigned task of holding the price of gold and silver down near impossible. Our fun days are not far off.

Gold has gone sideways now for 4 four Comex trading sessions with an upward sloping bias. Some day soon we will get a gap opening and blow through $430. Maybe even gap open above that level.

Gold rallied to $427 overnight (The AM FIX was $426.60) and then was beaten back going into the Comex opening. For three days we have seen The Gold Cartel bullion dealers beat gold back at the $426/$427 level. Would today be any different? In the end, not really, only slightly. However, one can feel the tension building in gold, like sensing it is becoming more and more a coiled spring.

Gold spent much of the day tracking the euro once the New York/Chicago trading period got underway. The dollar weakened and gold rallied. However, each time it came close to $427, or took that price point out, a bullion dealer would whack the price back below $427. In addition, early on Morgan Stanley turned a major buyer (taking some profits late) while The Gold Cartel and various bullion dealers sold every dime up.

It was back and forth in choppy action all session long with gold capped by the cabal to make sure no inflation signals might crop up to embarrass Chairman Greenspan while he was assuring Congress, Wall Street and America all was under control. It was what MIDAS suggested would happen gold market-wise at the beginning of this week and it has.

February 17 – Gold $426.90 up $1.70 – Silver $7.33 up 11 cents

Gold Like A Coiled Spring, Poised To Take Off Following Silver / Copper Explodes

Another quote dedicated to Chairman Greenspan for his testimony before Congress:

Political language is designed to make lies sound truthful and murder respectable, and to give the appearance of solidity to pure wind...George Orwell

GO GATA!!!
GO GOLD RUSH 21!!!

The desperado Gold Cartel and allies continue to show their colors. Their price-rigging is as obvious as can be, so obvious that their slip is showing. So blatant as to set up a situation in which investors all over the world will soon be willing to take them on.

Much to cover today with many reasons to believe gold and silver are gearing up to explode.

The gold shares were very weak early in response to the gold and silver weakness and spent the day rallying from lower levels before fading late. The XAU closed up .09 to 93.95, while the HUI lost .39 to 207.75. The HUI fell all the way to 204.14, then went up .60 on the day before it gave up its gains near the close.

The Gold Cartel has huffed and puffed and has little to show for it. With tensions in the Middle East building, and the US doing nothing to seriously solve its fiscal problems, the odds of silver and gold taking off soon are quite high and probable in my book.

GATA BE IN IT TO WIN IT!

MIDAS

Rhody on leasing:

Good morning Bill:
Gold lease rates remain mixed, flattened and elevated, while silver lease rates continue to decline across the board. Now the near term silver rates are falling as well as the long term rates, although long term rates are falling faster. All of this suggests that there is a general withdrawal from the lease silver market, or there is a sudden surge in supply of available silver. I think the former is more likely. Entities might hesitate to borrow silver if they thought that the price of returning it was going to be excessive.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

From Jesse on the dollar:

Bill,
I could not remember if I had sent this to you. Its been on my web site since February 4th.

Bottom line is that as the Fed and Treasury play out their money game, the pressure point is the value of the dollar. The foreign central banks are straining to keep buying enough bonds to cover the trade deficit. The Fed and Treasury will have to start monetizing debt (I believe we're already there as of November and its starting to show now). They can play all the hedonic games they wish with prices, and gimmick interest rates as they can, but the dollar is the pressure point, the 'tell' as they say in poker.

65 is not the endgame for the dollar, and at some point if things hold together we might be a little shocked at how low it can and will go, and what we might become 'used to.'

Maybe I'm wrong. But no matter how I work the numbers it always comes out that the dollar is heading to 65 this year The stock market may do surprisingly well, because inflation is not necessarily a negative until people realize that price inflation exists and interest rates must increase.

Further, in a different chart on my site, I show pretty conclusively that as credit expands the stock market bubble can absorb a great deal of the 'money' that is created, but does not show up in M3! Its a classic Ponzi scheme. Nothing comes out in big way until the bubble starts to burst.

I can see a day in the not too distant future when a tsunami of dollars come back to us from overseas, and come pouring out of financial assets until the money supply seems to explode. In a situation like this gold will shine, and the dollar is further devalued most likely to something around .35.

Web Site http://www.geocities.com/arthurcutten/jesse

Dollar Chart: Three Ways to 65 http://jessel.100megsfree3.com/DollarVLT.gif

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