Beiträge von Schwabenpfeil

Considering the battering gold and silver took on the Comex, the action in the shares was constructive. More and more it appears they are sold out. The XAU only lost .43 to 98.93 and the HUI only gave up 1.81 to 215.81. Whenever the HUI smells the 213 level, it tends to turn up its nose and reverse course.
Of course, with gold at $435, many of these shares are ridiculously cheap. A number are selling at half the price they were with gold at $424 a little over a year ago. Time to be running for the buying hills, not from them.

GATA BE IN IT TO WIN IT!

MIDAS

John Embry’s latest is another outstanding effort:

http://www.sprottassetmanageme…nvestorsdigestjan0105.pdf

***

Bill,
Happy New Year! I feel like a Timex watch after checking Au's price this morning — still ticking in spite of it all. I get the feeling the HUI must be awfully sold out to not budge more than it did.

I wonder how Asian demand held up today after the disaster. I read that Madras was hard hit and Asian commerce must have been generally disrupted. I hope that those of us on this side of the world reflect on our good fortune to have been spared. The San Andreas holds the same kind of power and there is geological evidence that the region where Seattle now sits has been hit by similar Tsunamis in the last few centuries.

Anyway, keep up the great coverage and the criticism of the Vichy's of the gold world — the WGC, GLD and most resource company management.

I will remember 2004 as a see-saw year in which the Cartel huffed and puffed but was ultimately limited by how much physical gold they could put on the table. 2005 will hopefully see the noose drawn much tighter on their scam.

best wishes for a great '05,
Peter R.

Treasuries lower as auction fails to cheer:

NEW YORK, Dec 29 (Reuters) - U.S. Treasury debt prices were modestly lower on Wednesday after an auction of $24 billion in new two-year notes drew only scant demand in a holiday-thinned market.

Particularly troubling was the lack of interest from indirect bidders, which include foreign central banks.

The $24 billion in new two-year Treasury notes went at a high yield of 3.12 percent, the highest at such a sale since May 2002. The auction drew bids for 2.20 times the amount on offer, well short of November's lofty 2.61 and the 2.25 year-to-date average.

Indirect bidders, including customers of primary dealers and offshore central banks, picked up just $7.90 billion, or 33 percent, of the whole issue, down from the 42.0 percent taken in the November auction.

That was lowest showing for a two-year auction this year, saddling primary dealers with a bulky $15.23 billion worth of short-term debt. ..

-END-

CARTEL CAPITULATION WATCH

US economic news:

Nov. Existing Home Sales reported 6.94M vs. consensus 6.75M
Prior reading revised to 6.76M from 6.75M.

0:31 API reports crude oil inventories (197K) barrels
Gasoline inventories reported (2.7M) barrels, while distillate inventories +525Kbarrels.
* * * *

0:38 DOE reports crude oil inventories (800K) barrels vs. expectations +200K barrels
Gasolineinventories reported barrels +900K vs. consensus +1.0M barrels. Distillate inventories reported (800K) barrels vs. consensus (500K)barrels.
* * * *

John B is on holiday, yet took the time to send a short update:

The John Brimelow Report

NY defies India- at least until Year end

Wednesday, December 29

Indian ex-duty premiums: AM $8.15, PM $8.62, with world gold at $443.30 and $ $443.20. Lavish for legal imports. In this context, world gold’s subsequent foray below $435 in NY can only be seen as biziarre. The Bears had better be ready to supply very large amounts of physical to the world market.

Japan was closed. Shanghai continues to show moderate ( $0.55 - $1.04 ) premiums to world gold at $443.80.

Open interest rose 6 tonnes yesterday (1,927 Comex lots) on volume of 21,357 contracts.

The active contract fell 90c.

A seller has been prepared to supply over 35 tonnes to the Comex market in the past two days to stop gold rising above $445. Today he was willing to try the downside: by Noon estimated volume was 40,000 – double yesterday’s total. This may well work for the year end: not for January.

JB

Routine observations:

*The AM Fix was $443.50 with the dollar slightly stronger, a continued indication of firm physical market demand. Enter the goon squad.

*The euro gold price fell all the way to 320.64 and continues its collapse.

*Gold bottomed at $433 before rebounding modestly. This area held three times in the past and should hold again.

*The gold open interest rose another 1927 contracts yesterday as The Gold Cartel prepared for their onslaught today by adding to their shorts.

*Silver fell in sympathy with gold.

*The silver open interest lost 107 contracts to 99,266.

*The dollar rose a whopping .30 to 81.10, while the euro was trashed by a staggering .21 to 136.03. The euro is less than half a point from MAKING A NEW HIGH!

*The DOG was unchanged, while the DOW lost only 25, despite China saying it would buy no planes from Boeing in 2005. US Treasury bonds only fell a ¼ of a point.

*The markets were all very subdued in holiday trading, all EXCEPT gold which was buried for no apparent reason. Nick Ferris of J-Pacific Gold suggested it may have to do with the year-end positions of The Gold Cartel – that they are so offside they needed to take the price down to reduce the losses on their books.

Makes sense. Still, this is a blatant violation of US anti-trust laws. These significant financial market players banded together, in restraint of free trade, to collectively bury the gold price for no apparent reason except for their own greed. Where is the outrage of the gold world and the authorities? Why do we bother to have anti-trust laws on our books when the CFTC and Justice Department allow this sort of corruption to continue over and over again? What a farce!

One more thing. As to the reason for the timing of this attack on gold by Goldman Sachs and friends in the cabal, the consequences of the Iraq war fiasco will be center stage next week with supposed elections coming at the end of January. The extent of the US blunder will become apparent to its most ardent supports, as well as to the rest of the world, sometime next month. The financial market ramifications, and loss of US prestige as a result of this blunder, will be undeniable. The bottom line is the US financial bottom line is going to soar beyond all expectations in the years to come. So will the cost in human terms. There is no way the US can get its financial house in order under these circumstances, save draconian measures which will send us into a deep recession. Those measures will be political suicide for incumbents, thus they won’t be put into play.

As a result, the US dollar has no way to go but a lot lower in 2005. January could be a particularly difficult month in this regard. Therefore, the Orwellians are taking gold down now with the notion the dollar may really tank in during the first month of next year. Should gold rally $20 in sync with the coming dollar debacle, the move up from here will only take it back to its highs of early December.

It would be one thing if these devious folks were buying time to correct some serious problems. That is not the case. The problems such as Iraq, deficits, etc., are worsening for the US with no solutions in sight. Thus by rigging the price of gold, these Orwellians are setting up a far more devastating financial market tsunami down the road than need be. This means there will be that many more Americans, financially in over their heads, who will not be able to cope with simultaneous US real estate and stock market drubbings. More damaging will be the fact that so few average Americans will see the US financial market tsunami coming, just as so few in Asia saw the crushing wave force which was so devastating. Most Americans won’t know what hit them.

The outrage is the US media forbids the likes of GATA and our findings to be presented to the American public. Not even our name is allowed to be mentioned. It’s a complete disgrace, one which makes a mockery of the notion we have a free press in America. Yes, we will be heard one day – AFTER the financial market tsunami hits in the US – AFTER there is fervent outrage as to how something like it could have happened.

What a shame! What an unnecessary tragedy it will be for so many!

Tragically, this is leading to a US financial market tsunami, as the underlying faults in the US system are growing. The warning system that would show something is not right (as indicated by a sharply rising, free market gold price) has been taken away from the average investor. Spin and propaganda is ruling the day. It is incredibly perverse as the big money powers in the US know the real story – and what they are doing and why.

The world is rightfully focusing on the unspeakable devastation in South Asia resulting from the tsunami which struck that part of the world. What strikes me is to hear of the politicos now talking about a warning system, one which has been ignored. Politically, it is now the thing to do to show concern. Practically, for that part of the world, it is too late. A tsunami close to this one hits in that region only once every several hundred years.

However, this analogy of what happened can be directly related to what the sinister Gold Cartel is doing to the investing world. By capping the price of gold, the bums are stripping the warning system away which could warn investors of a coming US financial market tsunami, one which many of us see coming with far more certainty than the Asian calamity. The cabal forces have created a surreal and unnaturally secure market setting when great danger is lurking. By definition this is so for all practical purposes. Otherwise, The Gold Cartel and US financial market power structure could care less what the price of gold did. After all, it is one of their assets.

Richard Benson, SFGroup, is a widely published author on securitization and specialty finance, and a sought after speaker at financing conferences on raising equity for mid-market companies.

Prior to founding the Specialty Finance Group in 1989, Mr. Benson acted as a trading desk economist for Chase Manhattan Bank in the early 1980's and started in the securitization business in 1983 at Bear Stearns, and helped build the early securitization businesses at Citibank and E.F. Hutton.

Mr. Benson graduated from the University of Wisconsin in 1970 in the Honors Program in Math, and did his doctoral work in Economics at Harvard University. Mr. Benson is a member of the Harvard Club of New York and Palm Beach.

The Specialty Finance Group, LLC is a Florida Limited Liability Company and is registered with the NASD/SIPC as a Broker/Dealer.
***

*The second aspect of The Gold Cartel’s motive is expressed brilliantly in a piece by Robert Benson titled:

Inflation Disinformation

And posted at:

http://news.goldseek.com/SFG/1104335062.php

Benson hits the nail on the head regarding the US and its disinformation plan. While he does not mention gold itself, the mauling of the gold price vis-à-vis the sinking of the dollar, is to send a message to the financial markets how inconsequential the collapse of the dollar really is and how it is nothing to be concerned about. What the US is doing by manipulating the price of gold is nothing but pure "propaganda."

To put this in perspective, one only needs focus on what the commentary is whenever the gold price rises steeply. It is ALWAYS the same from the pundits. There is talk of:

*Inflation
*Rising commodity prices
*Safe haven buying
*Crisis buying

That sort of commentary is ALWAYS regarded as negative, if sustained, for the US financial markets. Gold is the average man’s (Wall Street’s too) barometer of the health of our markets. By taking gold down, The Gold Cartel is sending out its propaganda that all is just fine. The bang they get for their gold buck is enormous and effective, yet it represents DISINFORMATION as Benson expresses so eloquently in his essay. An excerpt:

"….In looking at these numerical facts and the actual world around us, we can truly appreciate the magnitude of disinformation on the inflation front. The Fed needs inflation, wants inflation, and is getting inflation. Without inflation to inflate away a massive amount of personal, corporate, and government debt, our financial system could collapse. A lower dollar and higher inflation will ease the federal deficit while the foreign central banks, that have purchased U.S. Treasuries, will end up paying for the war in the Mid East as America’s debt is inflated away. To make the disinformation plan work, it is critical that even if inflation is not contained, the knowledge and perception that inflation is kicking up, is contained.

"Unfortunately for savers, they are being slaughtered by inflation very silently but at least they are alive to work like a wage slave for another day. The average American is so busy trying to make ends meet that when it comes to inflation, they don’t even know what’s happening. We can only hope that the Pentagon will learn from the masters at the Fed how to have that soft touch when it comes to propaganda……"

***

-- Posted Wednesday, December 29 2004

The most important gold fact of life to explain is the gold market is being managed in duplicitous fashion by a Gold Cartel. Lately, the price manipulation has become more aggressive, as evidenced by gold’s collapse against the euro rise. Those out there who believe gold’s rise is the mirror image of the dollar’s fall aren’t dealing with the facts. While the falling dollar has been a significant factor the past few years in the rise of the dollar gold price, it is not the key to the gold market, as gold has gone nowhere in many foreign currency terms. The Gold Cartel is USING the dollar action to achieve its own agenda.

To understand the gold market it is essential to recognize The Gold Cartel for what it is and then appreciate the physical market is so strong it’s keeping the cabal from crushing gold even as the dollar falls. If they could do it, they would have, and will should the physical market suddenly fall apart.

The motives of The Gold Cartel are as plain as day:

*The Gold Cartel and US financial market power structure know the dollar must fall. However, they are concerned a dollar rout could cause some sort of financial market instability or panic. To prevent such an occurrence, they are following Paul Volker’s insight and what he had to say regarding the rise in the gold price in 1980:

"…..Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.

"Through March, the price of gold rose rapidly, and that knocked the psychological props out from under the dollar."

Could it be any clearer what is going on here?

December 29 – Gold $435.50 down $8.60 – Silver $6.77 down 23 cents

Goldman, JP Morgan, Deutsche B Bomb Gold - Setting Stage For Financial Market Tsunami

The way I see it, if you want the rainbow, you gotta put up with the rain..Dolly Parton

GO GATA!!!

One need go no further than Goldman Sachs, JP Morgan and Deutsche Bank to find the ringleaders of The Gold Cartel and the ones most responsible for making a mockery of the naïve notion that the gold market is not vigorously managed. As reported here since the fall of 1998, Goldman "Hannibal Lecter" Sachs and cohorts Morgan and DB are almost always the ones capping the gold price on rallies and then the ones instigating major attacks. Year, after year, after year I have reported the same. Year, after year, after year, the gold industry says nothing. Today was a day like so many others.

There is no point in me registering further emotive indignation at The Gold Cartel and the gold industry. Seems this is all I do lately. However, if you are as disgusted as I am, I strongly suggest you register your fury with the gold company CEO’s where you have parked your money. Ask them to explain why gold is falling further and further behind the sinking of the dollar. Why gold in euros has fallen recently from 344 to nearly 320 in a matter of weeks. Perhaps you can explain the gold facts of life to these men/women and then ask if they have supported GATA. If not, why not?

While the US stock market rockets up with little care in the world, the gold shares continue to struggle. The XAU lost .77 to 99.35. The HUI gave up 2.10 to 216.96.

This too shall end.

Here’s to UCONN, which won its first Bowl game by defeating Toledo. No bigger UCONN sports fan out there than my good friend and colleague Chris Powell. He will have to savor this win to make up for UCONN’s mighty women’s basketball team, which dropped out of the Top Ten for the first time in a decade.

Enjoy the holidays, family and friends. It’s only a matter of a bit of time before all our markets go our way.

GATA BE IN IT TO WIN IT!

MIDAS

Now when we zoom in on the last year of the Gold/HUI chart you should notice that PM shares are a BUY indeed :

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas122804B.gif]

So what to do now when the PM shares are so dirt cheap ?

Well, load the boat with your favorite junior gold mining shares. Why ?

Because they are trading at fire sale prices now and will be rewarded soon. Remember that 75% of all discoveries are made by juniors and that the major producers are facing a decline in gold reserves so they’ll have to go after the juniors. As an investor you should do the same.

I know the sentiment is terrible these days regarding juniors, but that makes them dirt cheap. Same sentiment we witnessed in Dec 2002. In my piece ‘2003 - Year of the juniors’ I wrote :

Profits of 100 – 1000 % are in the pipeline next year if invested in high quality junior mining companies. END

Well, that’s exactly what happened. Now, two years later I would say the same for the year of 2005. But remember, in order to enjoy a multiple 100% profit next year you’ll have to buy low, and that’s NOW !

Readers interested in the gold drivers 2005 PDF (finished chapters) can still drop a mail.
Best, Eric
ehommelberg@planet.nl

Eric Hommelberg sends us some plums from the Netherlands:

Hi Bill,
Lots of Gold letter writers are calling for another leg down in Gold shares. I simply can’t disagree more. The Gold/HUI ratio indicates that the weakness in Gold shares is over and in fact the Gold/ HUI ratio issues a BUY for Gold shares right now. On Dec 8 I send a Gold/HUI chart suggesting that the HUI bottom would be very near based on historical data suggesting that extreme weakness in PM shares reflected by RSI tops in the Gold/HUI charts exceeding 70 won’t stay there for a long period of time. Now let’s have a look at an updated Gold/HUI chart :

[Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas122804A.gif]

So based on its own history we could suggest :

PM shares do bottom at RSI tops > 70 of the Gold/HUI ratio.
RSI tops > 70 mark the beginning of an uptrend in PM shares lasting 2 to 9 month.
Each rally in PM shares which started from a RSI top >70 gained 50 to 130%.
RSI tops > 70 have a very short life span (less than two weeks)
Right now RSI crossed the 70 mark again, so PM shares bottoming within two weeks ?
Expected minimum gain of HUI is 50% within three month, so HUI >300 before end of Q1 2005

This oil news went under the radar screen for most:

Hugo Chavez has been in China this week and it appears that, like the Chinese oil deal with Iran, China has agreed to terms to take all the oil Venezuela can produce...actually all the oil CHINA can produce there. The Chinese will be running the oil fields. This is a stroke of pure strategic brilliance on Chavez's part. He doesn't have to put up with the thieves from Houston and he doesn't have to make expenditures for production infrastructure ...plus he just picked up some serious muscle. If the US wants to continue attempting to overthrow his government and assassinate him, they will now have to deal with China. I can hear the teeth grinding in Washington all the way over here.

The US is blowing all of its strategic oil alliances because it got greedy. "Ya say you need some oil, George? Sorry, we're sold out for the next 50 years." Gasoline is going to be getting very expensive in the states.

Don Duca
Moissac, France

Venezuela Widens Its Importers List
27.12.2004 6:01

Venezuela’s president Hugo Chavez has offered China a full access to the country's oil reserves. His offer was made in the network of a trade deal between the two countries.

The offer will allow China to operate oil fields in Venezuela and invest in new refineries. Venezuela has also offered to supply 120,000 barrels of fuel oil a month to China.

Venezuela, which sells 60 percent of its oil to the US, and has a strained relationship with the US ay the same time, now tries to diversify its export partners range to reduce its dependence on its largest export market.

[Neftegaz.ru]

http://www.neftegaz.ru/english/lenta/show.php?id=53108

-END-

The Washington Post’s Walter Pincus: "While insurgents in Iraq have placed informants inside the Iraqi government, the U.S. and Iraqi militaries, coalition contractors, and international news organizations, the United States is having serious intelligence problems in Iraq, according to sources inside and outside the U.S. government." http://www.washingtonpost.com/…Dec23.html?referrer=email

"Energy shortages of every stripe bedevil this country, which sits atop the world's second-largest petroleum reserves. Electricity shuts off for whole days. Prices of scarce cooking fuel have risen nine-fold. And gas lines this month reached new lengths, creating yet another venue for violence. At least two men have been killed in Baghdad over places in line or allegations of watering down the goods."
http://www.washingtonpost.com/…Dec23.html?referrer=email

Tom Ricks: "The U.S. military invaded Iraq without a formal plan for occupying and stabilizing the country and this high-level failure continues to undercut what has been a "mediocre" Army effort there, an Army historian and strategist has concluded." http://www.washingtonpost.com/…Dec24.html?referrer=email

The Washington Post’s Steve Wiesman: "The Bush administration is talking to Iraqi leaders about guaranteeing Sunni Arabs a certain number of ministries or high-level jobs in the future Iraqi government if, as is widely predicted, Sunni candidates fail to do well in Iraq's elections." http://www.nytimes.com/2004/12…iddleeast/26diplo.html?th

"Rumsfeld says 9-11 plane 'shot down' in Pennsylvania - During surprise Christmas Eve trip, defense secretary contradicts official story" http://www.wnd.com/news/article.asp?ARTICLE_ID=42112

-END-

As we mentioned last week, because most everyone knows that stocks will rally into yearend and into at least early January. Wall Street and the fin media have already commenced grandiose stock market projections for 2005. Ergo, bullish sentiment is so endemic that the day trading lemmings and wise guys have been pouring into stocks on the open the past few weeks. This manic action often produces the daily high within the first 45 minutes of trading…Monday’s high occurred 6 minutes after the open. Yesterday, those traders, plus those inculcated with bullish Monday modeling, were surprised that fundamentals and events could actually usurp alchemy.

Washington Post Christmas Eve editorial: "The Holiday Season has suffused the stock market, which has bubbled exuberantly to its highest level in 3 1/2 years. Americans who own stocks can count themselves a bit richer, which means they can spend a bit more freely, which means that corporate profits will brighten -- which means that the stock market might just keep heading up. But this perpetual motion machine has a flaw in its engine. The more it accelerates, the nastier the potential consequences if it seizes up. The flaw is that American consumption is based on borrowing: People are spending money that they don't actually have. The nation's net borrowing from foreigners has risen to a massive 6 percent or so of gross domestic product, up from 4 percent in 2000, a level that was then considered dangerously high." http://www.washingtonpost.com/…Dec23.html?referrer=email

As we have been warning, the situation in Iraq is worsening and should continue to deteriorate as the 1/30 elections near. Two important articles concerning Iraq appeared over the Christmas break. Bob Novak writes that Bill Kristol and other ‘neocons’ are trying to pin the mess in Iraq on Rumsfeld. The neocons are reputedly the impetus that cajoled Bush into invading Iraq. Now, Kristol writes that the Iraq attack was the right thing to do but Rumsfeld is mismanaging the situation. This transparent attempt to salvage reputations and place blame by leading advocates of the Iraq operation strongly suggests that neocons are deeply concerned that Iraq problems could worsen significantly.

To bolster our deduction is a second report; this one in the Washington Post. Thomas E. Ricks and Robin Wright write, "Secretary of State Colin L. Powell told President Bush and British Prime Minister Tony Blair last month that there were too few troops in Iraq, according to people familiar with official records of the meeting." As we often mention, Powell is a copious leaker who tends to be very active just ahead of situations that he deems could tarnish his reputation. So he gets on the record in a manner that inoculates him. http://www.washingtonpost.com/…l?referrer%3Demail&sub=AR

A bunch of goodies:

The King Report
M. Ramsey King Securities, Inc.
Tuesday Dec. 28, 2004 – Issue 3065 "Independent View of the News"

A confluence of events, technical developments and seasonal pressures produced significant moves in various markets on Monday. The biblical-like disaster in Sumatra fostered concern that Asian capital would stay in Asia instead of flowing to support Americans’ conspicuous consumption.

This excited the big macro funds because it encouraged them to further bash the dollar. Because the short-dollar position is the grandest in the entire known universe, the big hedgies strongly desire to push it as low as possible for yearend. With the Dollar Index (80.72) within striking distance of the immensely critical 80 support, the big macro boys & girls are growing incontinent about pushing the buck lower.

The Dollar Index is now near the 1991, 1992 and 1995 lows. The dollar commenced a six-year rally in April 1995 when the BoJ instituted its zero-interest rate policy. When viewed over the last 18+ years, the current dollar collapse, which began in early 2002, is abjectly disturbing.

The latest available data shows that foreigners are no longer investing/recycling enough money in the US to cover the trade deficit…The NY Post’s John Crudele, in his column today, writes that the US Treasury released it report on US finances on 12/15. The report shows that the US budget on an accrual basis is well north of $600B, while debt and future obligation are up a few trillion. http://www.nypost.com/

Now that a historic winter storm that engulfed much of the US has passed and weather reports show unseasonably warm weather will hit much of the US in midweek, spasmodic traders rabidly sold energy products, felling oil by more than $3. Ain’t high finance grand?