Beiträge von Schwabenpfeil

The way it is as a pro sees it:

Bill,
Writing you for the first time since I've been reading your column in over a year now. I feel obliged to you for the torch you carry. Being a commodity trader for these past 10 years of my life has been an eye opening experience. You write every day of the manipulation in the Gold and Silver futures market on the Comex. I see with my own eyes the large New York banks try and manipulate other commodity markets (Oil, Gas, Copper etc.). I find there actions reprehensible. Anyone with half a brain can see what is going on. They are using derivatives and leverage to smash markets that are vulnerable. But I believe that in these markets the keener traders are catching on. I even listened in on an analyst conference where the attendees complained that the rumor of a China slowdown kept slamming the price of copper. Even when this rumor has turned out to be false several times in a row. Notice how commodities always take the brunt of any "liquidity driven crisis."

However I digress. What I am writing to say is that I support the efforts of Gata and believe that we as Americans must work to set the truth free. If Gold falls on its face so be it. If paper falls on it's face then the chips fall where they do. You do an amazing job of keeping me informed but more importantly keeping me motivated. I have 70% of my investments in Mining stocks and 30% in energy. I do not intend to cash out of this bull market for many years. Tangibles of which Gold is king are complety undervalued these days. Till then thank you for your efforts and those of Gata in setting free the truth in regards to Gold and the CB's manipulations. May our side and real money win.
MB

Some input on the real economy:

Comex Silver stocks down 606,321
Must be why silver dropped 12 cents.
Appreciate all your work and daily commentary.
Keep up the good work and remember there are many behind you that you don't hear from on a daily basis.
As for electrical construction work in Chicago here is a link to follow.
http://www.local134.com/pages/areferral.html
There are 1592 electricians out of work. Its taking 8 to 10 months to get a long call. This is not even counting all those working part time. I have only worked 17 days since Nov 10. I personally know of two electrical contractors which have half their crews just sitting home (about 30 men each company sitting home). They do not show up in gov. statistics or union stats. They are just sitting... waiting and hoping for a project to start.
On the bright side there are still over 10,000 electricians still working.
Have a good weekend watching football.
Harry

From the King Report last evening:

Bruce Bartlett, a Bush supporter, is despondent over Bush’s Tax Commission. Bush has allocated little time to do serious reformation; the commission members aren’t known for advocating real reform and Bush wants any reform to be ‘revenue neutral’. http://www.townhall.com/column…bartlett/bb20050112.shtml

Anyone that is bullish on the belief that Bush would provide an economic spark is chagrined. W has no real tax reform policy and by extrapolation no real economic policy for the necessary fundamental change. It appears that all Bush intended to do he did in the way of quick economic fixes in order to get re-elected. And as we have written, those quick fixes were crony capitalism in which corporations got an influx of cash, insiders sold record amounts of shares and the US government, taxpayers and consumers added significantly to their already record debt loads…Perhaps this another aggravation for Mr. Market.,,

-END-

Bill,
The PPI stunt today smacks of desperation. The drop in oil prices in December could not produce such a rapid affect on PPI. First of all it takes 6 weeks to transport oil from the Middle East. Second a large part of imports are made on long term contracts with suppliers, not purchased ad-hoc on the Spot market price.
This is manipulation that is as subtle as a sledge-hammer. If the level of blatant manipulation is a good indicator of the proximity of the day of reckoning we should be pretty damn close.
Cheers
Adrian

CARTEL CAPITULATION WATCH

US economic news:

08:30 Nov. Business Inventories reported 1% vs. consensus 0.6%
Prior reading revised to 0.4% from 0.2%.
* * * * *

08:30 Dec. PPI reported (0.7%) vs. consensus (0.1%); ex-Food & Energy reported 0.1% vs. consensus 0.2%
Prior total PPI unrevised at 0.5%; ex-Food & Energy unrevised at 0.2%.

The John Brimelow Report

India positive; Gartman - e.g. Hedge funds - negative

Friday, January 14, 2005

Indian ex-duty premiums: AM $7.74, PM $8.08, with world gold at $423.10 and $421.80. High: ample for legal imports.

Reuters reports that Indian auto sales in December were 20.6% above ’03, "utility vehicles" (underpowered autos) were up 40.7% and motor cycles up 51.62%. This bias towards down market growth probably explains the relative dynamism of the domestic silver market, which as noted yesterday, justified air shipments of silver imports last week for the first time in many years.

According to Mitsubishi, the Japanese public increased their long today by another 3 tonnes - 964 Comex lots. This may be related to TOCOM gold making a 4 month low today, the Japanese being notable bottom fishers. Volume jumped 103% to the equivalent of 28,537 Comex lots and open interest rose by 606 Comex lot equivalent. (NY yesterday traded 42,197 lots; open interest rose another 394 lots.)

The Gartman Letter, having muttered yesterday about going long at $410 (e.g. appreciably higher than the previous target) has been refreshed in its bearishness:

"What is interesting is that even as the commodity prices are up materially, precious metals are not…GATA will blame that failure upon collusion amongst the bullion banks and the governments; we'll blame upon a lack of buyers and a stronger US dollar."

Asserting that there are a lack of gold buyers, of course, is simply wrong – Turkey’s December imports, before the latest decline, being the most recent official quantification – but taken as an insight into the sentiment (and hopes) of certain US Hedge funds, this remark probably explains much of recent behavior in gold, especially in NY hours.

JB

Not MIDAS talking here, but a fellow Café member:

Bill,
This action today is so typical – I’ve seen this umpteen times – all in the last 30 minutes of COMEX. And particularly when there are looming holidays and thin market conditions. They use Loonie (USDCAD) as the ring in the nose of the bull in an attempt to move all the USD pairs along with it and take the metals down for the close. Then after Comex closes Loonie collapses – all designed to get margin selling in the next time zone.
Today the Loonie action was timed to perfection to halt also an upward break in the EURO from 1.3130 that would have taken us up significantly for sure.There is no doubt that this currency action along with similar manipulation in gold is Snow’s so called "strong dollar policy".
Regds
Dave

*So if fear of escalating interest rates spooked dollar shorts, why did it encourage stock investors? The DOW rose 52 to 10,558 and the DOG leaped 17 to 2087. Going on for years now, each time the US stock market is about to cave to the downside, it rallies back for one reason or another.

While the price-capping activity of The Gold Cartel has been a bit of a bummer, it is no time to go in the tank and walk away from our precious metals investments. After the kind of recent orchestrated drubbing gold took from the cabal, the gold market historically takes WEEKS to recover. Thus what we are seeing now is normal, frustrating market action. Pile on top of that the huge amount of specs who were flushed out and the composure period could be prolonged even further than normal.

The COT report was a beauty and right in line with my high expectations. The large specs reduced their longs by 30,974 and increased their shorts by 5,482, while the commercials increased their longs by 5,132 and reduced their shorts by 30,263. This means the commercials have reduced their net short position by around 70,000 contracts in two weeks. The orchestrated raid by The Gold Cartel to allow the crooks to dramatically reduce their shorts has worked to perfection.

The silver stocks fell 606,321 ounces to 102,658,698. Good news. Getting below 100 million ounces not far off.

La La Land rules the day again. Or more specifically, jawboning does the trick. Yesterday the stock market acted as if it was about to really break down. The next thing you know a Fed Governor is out talking up the economy and the dollar. Earlier in the week another Fed Governor said the same thing and it had no effect on the markets. The difference was The Working Group on Financial Markets was on the sidelines during the earlier comments.

There is no other logical explanation for how the markets traded today:

*The euro fell 1.07 to 131.03, yet the yen rose 1/2% to 102.01. The dollar gained .56 to 83.13.

*If the comments were so bullish for the economy and dollar, why did the bonds only fall 1/8 to 113 14/32? They are not far off from making new highs, not lows. This does not jibe with what Poole says. (Yes the PPI was lower than expected, however that is "old" news, besides being very suspect.)

*The $60 billion dollar trade deficit has now been thrown out the window and deemed irrelevant by the market or the PPT. What mattered in the end was rhetoric and market manipulation.

*But, there is no inflation! Tell that to the oil buyers. Feb WTI closed at $48.38, up 34 cents. Only 18 months ago $43 oil was thought to be disastrous for the US economy. Then again, so what? In 1998, the trade deficit was $12 billion. Goldman Sachs projected the budget deficit would soar to $19 billion. The reaction back then to that prediction was one of disbelief – a number that high was thought to be very negative for our financial markets. Now $60 billion elicits yawns. PRICE ACTION MAKES MARKET COMMENTARY and the PPT knows it.

Dollar Rises as Fed's Poole Suggests Accelerated Rate Increases
Jan. 14 (Bloomberg) --

The dollar rose almost a cent against the euro, the most in a week, after a Federal Reserve official suggested U.S. policy makers may accelerate the pace of interest-rate increases, widening a gap with the euro region.

The Fed may drop its plan to lift rates at a ``measured' pace, language used through five quarter-point increases last year, St. Louis Fed bank President William Poole said late yesterday. The dollar extended gains after European Central Bank council member Axel Weber said higher U.S. rates and faster U.S. growth compared with the euro region may support the currency…..

The dollar also rose after President George W. Bush said inan interview with USA Today the U.S. has a ``strong dollarpolicy'' and will act to reduce its budget and trade deficits.

``The world is watching this administration to see whether or not we're willing to take on the deficits and we'll show that willingness,'' Bush said, according to a transcript of the interview posted on the newspaper's Web site late yesterday....

-END-

January 14 – Gold $422 down $2.20 – Silver $6.56 down 14 cents

A Very Fishy Day

Men go fishing all of their lives without knowing that it is not fish they are after...Henry David Thoreau

GO GATA!

Early last evening I was minding my own business at my desk/computer when I noticed the dollar starting to rally sharply and gold starting to descend. I wondered what was happening. Answer:

@ midas, pauli, ageka: Schön, dass Ihr auch die Texte aus dem Le Metropole schätzt und sie auch Euch Nutzen bringen ...

Heute geht es nach einem verlängerten Wochenende frisch gestärkt weiter !

Gruß
Schwabenpfeil

Interest in the gold shares remains abysmal. The XAU gave up .90 to 94.52 and the HUI lost 1.52 to 204.25.

When it comes to gold, the most anyone can ever talk about is the price rising because the dollar is going to weaken. Not only is this simplistic, it misses the heart of the matter. The Gold Cartel has used the dollar's weakness to control the gold price advance. This became clear when they bombed bullion in December, even as the dollar barely budged on the upside.

At some point this year, gold is going to take off in all currencies as it becomes the go-to investment of choice around the world. The gold price will rise sharply as The Gold Cartel loses control of their heinous rigging scam. That time might not be far off.

In December, during the price decline debacle, I posited the cabal forces were bombing gold in outrageously blatant fashion because they fear what lied ahead in January. Well, we are here. Yesterday, the news for the dollar ($60+ billion trade deficit) was beyond terrible. Today the stock market broke down. Meanwhile, if the news in Iraq has not been bad enough, one of the directors of the Baghdad Election Center was killed today.

The US Government has little wiggle room anywhere. We have promised to get our financial house in order and said we would do so. But how? As little room as the Bush Administration has, the US consumer might have less as they are strapped to the hilt with debt and latest reports suggest they may becoming tentative on further spending. Their spending fuels 75% of the US economy. If they slow down, the economy slows down.

What no one outside the GATA camp deals with is half the central bank gold is not there any more. It is gone. Never in history has there been anything like the gold short position which is in play at the moment. If our financial markets become a bit unglued, or the dollar craters due to it becoming apparent the US is in a bind, there is no telling what could kick in on the gold derivatives front. I have been looking for a gold derivatives neutron bomb to go off for some time. The Gold Cartel prevented this from happening to-date, continuing to take pre-emptive measures in this regard. There is nothing in the near term which suggests we are close to that bomb going off. However, recent developments put this possibility back on the burner.

The gold price should reflect increasing geopolitical/financial market concerns VERY soon.

GATA BE IN IT TO WIN IT!

MIDAS

Then there was this MIDAS commentary re Aflease last October for your review:

Last night I had a lovely dinner at the Petroleum Club here in Dallas with my friends Charles Pace, his pretty and brainy girl friend Kate, Ray Foster, and Neal Foneman, CEO of Aflease in South Africa. Neal was impressive and seems like the right man to turn this beleaguered company around. It has been beset with investor/management turmoil, skyrocketing energy costs, and much higher rand affiliated costs. Recently, they shut down some gold operations which were causing a cash flow drain and have restructured the company to concentrate on their strengths:

*A world class Uranium resource.

*Expediting production from their high margin gold properties and going into production in Q2 2005.

Other South African gold producers have been beset with similar problems. Durban Deep is an obvious one. When gold takes off, the South African gold producers that have been beaten up are likely to roar. Few in the gold world envision bullion trading at $500. It will. As gold takes off for that kind of price level, the cost problems besetting these companies will fade in the background and their share prices will explode.

To read more on Aflease (35 cents on the Nasdaq pink sheets), go to http://www.aflease.com.

There is another enormous positive about this company. It is surrounded with some of the brightest and most able people in the gold industry. They are also some of my favorite people anywhere:

*Brett Kebble, GATA’s hero, who rescued Aflease via a bailout through Randgold Resources.

*Peter George, the Mr. Gold of South Africa, and a veteran, staunch GATA supporter. Peter is a substantial investor in the company.

*Ferdi Lips, ex-Swiss banker of note, who wrote Gold Wars, and has had an exemplary career in and around the gold industry from his native Zurich. Ferdi is a Director.

I own Aflease and will be buying more in the near future.

One of the most enjoyable aspects of my tenure as GATA chairman the past 6 years has been the people I’ve met and how many are intertwined. Neal met with J-Pacific CEO Nick Ferris in Vancouver before coming to Dallas and also with one of my heroes, the ubiquitous John Anderson. Japan’s legendary Tammy Matsufugi (who has one of the only gold funds in Japan and is another GATA supporter) is a significant investor in both J-Pacific and Aflease. Then there is GATA favorite Adam Fleming, former Harmony chairman, whom Neal worked with years ago at Harmony. All in all, a wonderful group of people.

-END-

Business Day

P.S. In November Peter George published a report to his subscribers at http://www.investmentindicators.com/ valuing Aflease presently at 90c, but looking for $2.30 by the end of 2005. Anyone who took his advice then (with AFKDY at 32c) would already have a big smile.

Kind regards
Chris

GATA supporter, Peter George of Cape Town, South Africa wrote two pieces, one mentioned by Chris Hall, which can be found in the Café Library:

6/27/04
Energy Unlimited - Aflease and Uranium

http://www.lemetropolecafe.com…=3997&SearchParam=Aflease

11/01/04
Nuclear Revolution -in the making

http://www.lemetropolecafe.com…=4192&SearchParam=Aflease

Below is an article from South African daily, Business Day (today, 13 Jan).

Aflease up on foreign interest in uranium

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

Chief Reporter

AS EXPERTS warned yesterday of a global shortage of uranium, South African uranium producer Afrikander Lease (Aflease) closed 17,4% higher on the JSE Securities Exchange SA thanks to Canada's Sprott Asset Management snapping up 10% of the company.

Last year, Aflease said it was sitting on 5% of the world's uranium assets, which it intended to mine, prompting foreigners to buy up its stock. The share is now three-quarters held by overseas investors.

Speaking from London, Aflease CEO Neal Froneman said the company planned to split its gold and uranium assets, forming a new and separate entity that would list on the JSE within a year.

The spike in Aflease's share price — up 42% since Monday — came as consultancy International Nuclear warned that uranium demand could outstrip supply from next year as China, India and Russia built reactors. Uranium prices have vaulted 74% in the past two years as stockpiles dwindled. About 16% of the world's electricity is generated using uranium.

Froneman said Aflease planned to start mining uranium at the end of next year, at a break-even cost of $14/lb. At its current boom price, uranium for long-term contracts is selling at about $25/lb.

The Sprott deal underlined "phenomenal interest in the stock" from foreigners, Froneman said. "A number of the larger funds in London have requested big blocks of shares of Aflease," he said.

But there are obstacles, as Aflease needs to raise $50m-$100m to get its first-phase uranium operation off the ground by December next year. Froneman said "raising this money won't be a problem" in light of the possible separate listing and support from foreign investors.

Rarely does a day or week go by without reports of some kind of economically related conspiracy or another surfacing.

The performance of so many gold and silver shares has been so lousy for so long it is nice to be able to report some constructive news. Staunch GATA supporter Aflease (50 cents) has been on a roll of late. It went through some tough times; yet, under the stewardship of its new CEO it has turned around. This was sent to us this morning by Chris Hall of Trinity Holdings (Pty) Ltd in South Africa:

Hi Bill,
South African Gold and Uranium junior, Aflease (AFKDY) has jumped 57% from (32c – about 50c) since Monday. Randgold had previously been heavy sellers, effectively capping the price since September, due their internal liquidity requirements. They finally offloaded the last of their stake in Aflease to Sprott Asset Management and Eastbourne Capital, both of whom were already significant shareholders.

More anecdotal proof of the foolishness of GATA critic Dennis Gartman’s comment:

"Conspiracies rarely exist"....Dennis Gartman, September 2004

Nine Ahold Vendors Charged With Conspiracy, U.S. Says

Jan. 13 (Bloomberg) -- Nine vendors for a U.S. unit of Royal Ahold NV, the world's fourth-largest retailer, were charged in connection with a scheme that allowed company executives to inflate earnings by more than $800 million, federal prosecutors said.

The vendors conspired to create false accounting records for the unit, U.S. Foodservice, U.S. Attorney David Kelley in Manhattan said in a statement today. The false records enabled the executives to conceal their scheme to inflate company earnings, he said.

-END-

Then why is the World Gold Council spending millions of dollar promoting high fashion gold jewelry? The focus ought to be on promoting investment demand and pounding away at the myriads of reasons to buy gold at present price levels. Just more evidence of how useless the World Gold Council is. It ought to be disbanded for incompetence and gross neglect of the industry’s needs - except the jewelers of course, which want lower gold prices.

Gold Field Mineral Services, the gold industry consultancy, released a great deal of information today from their perspective. While some of their information is useful and helpful, they refuse to deal with the true gold loan swap numbers which results in their basic market analysis being very suspect in many regards. It skews their gold demand numbers among others.

However, they made one point which we are in total agreement and it has to do with investment demand:

Gold price seen to average $447 in 2005

Johannesburg, South Africa
January 13

Despite the modest correction in the gold price, the first half of 2005 is expected to see renewed interest in the precious metal. Gold is forecast to average $447 a troy ounce in the six-month period, United Kingdom-based consultancy GFMS said in a report released on Thursday.

However, GFMS said it isn't expecting gold to break through the 1988 high of $483,90/oz during the first half of 2005.

GFMS said it sees investment demand as the prime driver of the expected renewed rally in gold, with the focus within this category continuing to shift to the longer-term, more fundamentally driven players.

"Their rationale for interest in gold was ascribed to such economic factors as ongoing dollar weakness, the United States fiscal and current account deficits and low real interest rates," the GFMS report said.

"We only need a small shift in the allocation of institutional funds to bring about a quite hefty rally in the price," GFMS analyst Bruce Alway stated…

-END-