Beiträge von Schwabenpfeil

CARTEL CAPITULATION WATCH

The US stock market wasted little time resuming its upward advance. The DOW gained 78 to 10,854, while the DOG jumped 23 to 2177. Both indices went into new high ground.

Not much confidence emanating here:

Number of Firms Expecting Future Employment Increases is Lowest in 11 Months

ALEXANDRIA, Va., Dec. 28 /PRNewswire/ -- December numbers from the Leading Indicator of National Employment (LINE) indicate that new job growth in the manufacturing sector continued to slow over the last month, and is expected to stall further in January. LINE is a project between the Society for Human Resource Management (SHRM) and Rutgers University.
Overall December LINE data indicates that while job growth continues, it has substantially slowed since last July. And while manufacturers continue to recruit for open positions, skill shortages have not been severe enough to cause them to increase overall new-hire compensation.
Concerns about the fragility of the economic recovery may be causing firms to delay the creation of new positions. In addition, recruiting workers with the appropriate skills may be slowing the pace at which firms are able to fill the vacancies that currently exist. More than a third of the responding firms reported increases between November and December in the number of job vacancies that they are actively recruiting to fill….

-END-

The John Brimelow Report

Continued substantial NY (year-end?) selling

Tuesday, December 28

Indian ex-duty premiums: AM $7.57, PM $6.82, with world gold at $444.70 and $445. Ample for legal imports. (The PM premium is from Madras, normally a little lower than Bombay, which was not provided by Reuters)

The Bombay Stock Exchange scored yet another record high, and the rupee firmed once again to $1 = R43.705. It is now virtually back at the early December high of R43.65, after which it will be tackling 8 month highs. The locals are very pleased with declining oil prices; once again, lower oil nowadays translates immediately into a firmer bid for bullion by the world’s largest importer.

TOCOM had a very quiet half day, only trading the equivalent of 9,932 Comex lots

(-34%); the active contract edged up 3 yen and world gold was 40c above the NY close; open interest slipped the equivalent of 138 Comex to equal 110,627 Comex. Japan is now closed until next Tuesday.

Yesterday’s modest Comex trading statistics were nevertheless startling: 23,787 lots traded, double the estimate, and open interest leapt an astonishing 9,508 contracts to 329,038, an increase of 29.6 tonnes. Even if one imagines some of this may somehow have been unrecorded activity from the 23rd (which is reported to have traded 23,644 lots, but with an open increase of only 74 lots) the fact appears to be that quite serious fresh selling was met by resolute new buying. (The sequence is expressed this way because on both days Asian firmness was reversed during NY hours.)

This is of course consistent with the view expressed here that gold is being capped by a determined seller below $445, who is however, being repeatedly challenged by buying emanating from the key physical markets.

The ECB reported today an E17Mm sale by a captive Central bank last week, which implies only a couple of tonnes.

Gold, of course is trading divergently to the Euro, and the base metals, but it is taking quite some effort to achieve this. With the Indian market so steadily a buyer, it seems plausible that this capping effort is related to the year end, and that gold will resume its upward trudge next week.

JB

Oh well, that’s not the way it is, which is a significant reason to be so gold bullish for 2005. Markets don’t crap out when sentiment is so abysmal. Besides, the major factors which will affect the gold price next year are all becoming more prominent:

*The financial condition of the US Government, as evidenced by our worsening deficits, is becoming more troublesome.

*The US dollar is headed further south.

*Iraq is slowly developing into a full-blown fiasco.

*The Gold Cartel is gradually running out of available gold supply to meet the monthly supply/demand deficit. A concrete example of this is Germany’s recent decision not to sell their gold.

This is a recipe for a gold price explosion, not a gold price collapse. The gold price is headed MUCH higher, be it next month or four months from now. Time to keep loading the boat.

Many of us are disgusted with our share price performances this year. With good reason. Yet, gold coin/bullion owners in the US are smiling and ought to be pleased with their gains. YTD advances:

*Bullion – 8%
*DOW – 3+%
*S&P – 9%

How ironic. The US stock market manages to recover this year and move up modestly. As a result, bulls are everywhere on Wall Street and Main Street. Complacency about the future of our stock market is astoundingly high. Yet, gold is putting in its third impressive up year in a row and almost no one is bullish for the short-term.

How strange it is that so many investors are in love with this:

DOW monthly
http://futures.tradingcharts.com/chart/DJ/M

And, at the same time most could care less about this:

Gold monthly
http://futures.tradingcharts.com/chart/GD/M

If the gold chart represented the DOW, can you imagine how giddy Wall Street and the US investing public would be? They would be having parades.

Without question this is the most important factor in the gold market these days and yet the dingbats in the mainstream gold world refuse to discuss it. What good is any sort of analysis when one leaves out the most important factor of the analysis? We’re back to The Stepford Wives/Matrix sort of syndrome again. The gold people are in their own La-La Land world. The massive rigging of the price of gold doesn’t exist because they don’t want it to. They only see what they want to see. Reality is their own set of facts which keeps them from confronting the truth. What a bunch of horses’ butts.

Silver was firm the entire trading session. We are getting to guts ball time here. Veteran Café members will recall last spring one of our best sources reported that China tied up 75% of the 2005 silver supply via various derivatives maneuvers. If that information was correct, then the price of silver MUST begin to take off sometime in January. There will be nothing The Gold Cartel and silver price managers will be able to do to stop a price explosion. During the next few weeks, I will see if I can get our source to follow up on this old input to determine if the information is still valid. Nothing to bet the ranch on yet, unless it is confirmed.

The silver open interest put on 1349 contracts to 99,373.

December 28 – Gold $444.10 down 90 cents – Silver $7 up 5 cents

Silver Pops/Cartel Capping Remains Relentless

"If you can't convince them, confuse them."
Harry S. Truman

Not too much to bring your way today. What stuck out the most was the failure of the disappearing dollar to recover on a very positive US Consumer Confidence number:

10:00 Dec. Consumer Confidence reported 102.3 vs. consensus 94
Prior reading 90.5.
* * * * *

The staunch, renewed confidence of the US consumer did not extend to foreigners' confidence in the value of the US dollar. After recent sharp setbacks, the rally in the greenback on good news was anemic. Closes:

*Dollar – 80.80, up .02
*Euro – 136.22, down .06
*Pound – 191.98 down .43
*Yen – rose to 103.05

Meanwhile, the euro gold price closed in new low ground for the move at 325.89.

What also stuck out was the degree to which The Gold Cartel went after gold yesterday to keep it from doing what it normally would have if allowed to trade freely – without the 500 pound Gorilla sitting on it all session long on the Comex. The gold open interest rose sharply in holiday market conditions by 9501 contracts to 329,038. This is how much firepower the bums had to throw at gold to keep it from soaring above $445. It is also the reason the gold euro price went down yesterday, as well as today.

Bottom line, any stock falling under the protection umbrella of Regulation Sho will automatically begin trading under a short squeeze scenario due to its supply of shares immediately being zero. How huge the short squeeze materializes is predicated upon how soon or how long the MM that is guilty of naked shorting decides to take for covering. Whenever the "demand for buying" exceeds the "demand for selling" within that naked shorted security, the MM will have a very difficult time in covering by the mandated time frames allocated. Added buying pressure will only compound the dilemma for the MM.

I am expecting Jan 05 to be the best month in the history of the market for opportunities for prosperity because of Regulation Sho. We are about to be part of a positive piece of history. I hope the above info have helped many to see what is the importance of making sure you are positioned and well planned for strategic moves to be made in the market to capture the opportunity for prosperity. We all must prepare and plan now if we can afford to do so. People don’t plan on failing, they fail to plan. May we all become prosperous!

http://www.investorshub.com/bo…sg.asp?message_id=4916651

Thank You
Irish good luck to us all............................................

http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm

The Shorting
The shorting of stocks are referring to the Pilot Program that was delayed to begin on 2 May 05 and will last for one year through 2 May 06. This is where they will be selecting 1,000 stocks to use for an SEC experiment that they call the "Tick Test."

Example: Imagine stock ABCD trading at $10.00 per share. Let’s say you now decide to short stock ABCD at $10.00 per share by buying through shorting 1,000 shares. You really just borrowed $10,000 to short stock ABCD to buy 1,000 shares. Two days later, let’s say stock ABCD drops to trade at $8.00 per share. You now decide to cover your short in stock ABCD and sell your 1,000 shares back to the market to have them delivered at $8.00 per share for a total of $8,000. You cover by paying back the 1,000 shares you borrowed, but since the price dropped down to $8.00 per share, your cost for paying back the 1,000 shares of stock ABCD will be $8,000. Since it’s mostly all about the share amount and not the dollar amount for covering in the eyes of the MM, you would profit the $2,000 difference from using the proper timing for delivery of the 1,000 shares.

The SEC will be doing a study on 1,000 stocks while examining these stocks to see how and why certain problems have existed throughout the market with the delivery of the shorted positions. What they have come to find out is that there is a problem that exists with somebody shorting a stock as reflected above and never delivering the funds to cover the shorted position whether the stock goes up or down. They have come to find out that somewhere and somehow the intentions to later deliver never existed. The Pilot program is being designed to get to the bottom of this.

The opportunity that we have here with the rectification of the naked shorting and shorting of stocks is something that will go down in history for the better in fixing something that was broke for a long time. The primary objective is to have an orderly and fair market for those stocks that are legitimate and trying to actually grow to trade fairly on its own merit of supply and demand principles and not on manipulation of choice.

What I anticipate happening, and the SEC, is that in the above example with stock ABCD, the MMs will need to get the 1,000,000 naked shorted shares out of circulation by increasing the bid to entice shareholders to sell. The problem comes when they allow for the buying to outweigh the selling due to increased demand for the stock. As orders are placed to buy shares, they must be filled by the MMs. This will worsen their problem when nobody is selling. As the MMs make the mistake and allow for any stock to be placed on the Threshold Security List, it will publicly reveal where the MMs are already having a problem in covering. Us as shareholders will see this list and contribute with forcing the short squeezes for every stock on the list.

If they raised stock ABCD to .50 cents and there was more buying than selling than no ground would have been gained by the MMs. They only gain ground when there is more selling than buying that exists.

IMPORTANT: So where is the "Threshold Security List" that we all will be looking for? This is how we all get a chance to help the MMs reap what they sowed. Go to…

http://www.nasdaq.com

… to see the Threshold Security list beginning on 10 Jan 05 and review it daily. Any stock that you see on that list "should" immediately present a wonderful buying opportunity by being in an instant short squeeze scenario. The MM guilty of the naked shorting will have a hard time from not generating enough selling by enticing the bid high enough for shareholders to sell to out weigh the buying to allow for a covering to transpire.

Again, I do not believe that all MMs are bad and I am not posting this to lead some type of crusade against the MMs. Remember, all we ever wanted was for the MMs to trade the stocks we invest into fairly as investor/traders in the market. Without the MMs, there would not be a market and all the SEC is doing is making sure the MMs create and maintain an orderly market, fairly. This Regulation Sho is something that is long over due.

All of this brings us back to something I discussed earlier. When the supply of shares of a stock is zero, the supply is zero. It doesn’t matter how you get there, be it by a naked short position or by the float being absorbed. This is where it all starts as a short squeeze will now be formed and grows as demand to purchase shares increase. This is where the misperception exists with Regulation Sho. People think that a new naked short position has to be created as of 3 Jan 05 in order for a stock to be eligible for protection and rectification under Regulation Sho. This is not true. It’s even better. All naked short positions of the past will not go away and must be dealt with. The clock begins ticking for covering on 3 Jan 05 for fully reporting companies. PERIOD!!! This means that any stock that has been naked shorted will automatically start out in a forced short squeeze mode that will only escalate the longer the MMs wait to cover.

Any buying pressure will cause the increase of the naked shorted position to grow to begin approaching the 5 day consecutive window of not getting covered by the MMs. After the 5 days transpire where the MMs have failed to deliver and close the open naked shorted position, that stock in which they failed to deliver will be placed on a Threshold Security List for the public to view. This is where it starts to get awesome.

Example: Let’s say stock ABCD, a fully reporting company, was trading at .01 cent and had an OS of 1,000,000 shares. Let’s say that stock ABCD have been naked shorted by 1,000,000 shares over the OS/float of 1,000,000 shares. Come 3 Jan 05 the MMs will not be forced to "possibly" immediately cover the 1,000,000 naked shorted shares. Here’s the beauty of this and where the MMs are currently mad at everyone about. Don’t worry, they will make money, but in a different way as we might talk about later.

With no buying pressure, they won’t have to cover as soon as one might have hoped as shares are sold exceeding the amount of shares being bought for stock ABCD. Still, if they don’t cover the "entire" 1,000,000 naked short position for 5 consecutive days, stock ABCD will show up on the Threshold Security List for the public to view on 10 Jan 05. After such, the MMs have 13 days to close out the "entire" naked shorted position or face being suspended and/or shut down from that security and other penalties to possibly put that MM out of business. The end result will still be the supply being zero and the stock would be forced to be traded correctly based on supply and demand with an already dried up supply. This means the creation of an instant short squeeze!

Bill
The SEC effective date is January 3, The naked short list of all companies comes out January 10 per the SEC for the world to see. bob

http://www.investorshub.com/bo…sg.asp?message_id=4916651

***

Got this off another Board SEC INFO

OT: On January 5th , 2005 the SEC is implementing a revised Regulation Sho / Affirmative Determination with strict rules for Market Makers to CLOSE OUT all naked short positions on all stocks . Beginning January 10th , 2005 the SEC will DAILY PUBLICIZE ALL stocks where the MM's have not complied , where traded shares have not been accounted for , which will force the MM's to buy shares of the aggrieved company's equity .

Public investors will recognize this MANDATORY REQUIREMENT and will refuse to SELL for give-away prices which will FORCE the MM's to raise their bids .

This will cause SHORT SQUEEZES on the Market Makers because it will be THEY who are forced to pay higher and higher prices in order to be compliant .

As the public becomes fully aware of this enforcement by the SEC, investors will be inclined to hold onto their shares until they can either capitalize on a short squeeze or until a FAIR market of true supply and demand is established for their chosen equity investment .

The Market Makers' reign of MANIPULATION through the illegal action of trading non-existent shares at the extreme consequence to public companies and investors will soon be over ************************************************************

FWIW
The following is from another board, where a person spoke to someone from the SEC in regard to the blatant MM shorting of some OTC stocks, and the proposed regulation SHO that is supposed to start on Jan.3rd, 2005
enjoy...

The SEC Market Reformation…

The Securities and Exchange Commission (SEC) really has been on our TEAM all along. For years we thought as investors that we were out there all alone in the market because of years and years of many people being on the losing end from stocks being manipulated.

I received a very important phone call from the SEC that was very powerful. The info is so powerful that I deemed it would be selfish for me to not share such with those in here since our goals have always been to help each other as much as possible. What I am about to share might be known by some, but I am sure that it is not understood by most. This is concerning the true power and intentions behind Regulation Sho. There is more that I have not heard discussed by people and I think there are some things we are not seeing correctly by normally seeing the SEC unsuccessful attempts so often in the past.

What you are about to read are not my opinions. It is what I was told by the SEC and was given permission to share this information with you for a better understanding. I was told that they want our feedback so they will want to know if it worked or not in fixing what they knew was broke for years, but just recently discovered how to resolve.

The pressure is on the Market Makers (MMs) to do what is right because all eyes will be placed on them. There will be many key Federal Authorities, Economists, Mathematicians, etc. that are already lined up to be performing certain studies for historical purposes. All the MMs have to do to not make matters worse is to do what is right and fix what they had broken for years with any fully reporting company that’s a threshold security as soon as possible. Let me explain a bit further to show you how this will work.

First understand that the SEC always wanted to help us shareholders, but never knew how to do so. They had always received many complaints, but never knew how they could trap the MMs to simply do what was right. The shorting and naked shorting had gotten out of hand as I will explain both.

The Naked Shorting
With the implementation of Regulation Sho, the MMs will be forced to close out their open naked short position on all stocks that meet the Regulation Sho requirements for coverage. They will have to do this everyday by midnight beginning on 3 Jan 05.

This leads us to talk about the requirements as some are already familiar. A stock must be fully reporting and considered a threshold security. A threshold security is one where .5% of its outstanding shares (OS) have been proven to have been naked shorted for 5 consecutive trading days and where the MMs have failed to close out those positions for five consecutive trading days.

Example: If stock ABCD had 2,000,000 shares outstanding and was a fully reporting company as of 3 Jan 05, the MMs would need to fail to close out the open naked shorted position of .5% of 2,000,000 shares which would equate to 10,000 shares not being "completely" covered for 5 consecutive trading days. This means that the MMs would need to make sure they don’t allow 5 consecutive days to happen where they leave any balance remaining of the 10,000 naked shorted shares as an open account of stock ABCD. They must "completely" close all open accounts of naked shorted positions.

For proper accountability of all of this to work, the SEC will have to have a coordinated TEAM effort from key entities within the market as authorities. The SEC, Depository Trust Company (DTC), brokerage companies, all market exchanges, the fully reporting companies, and their transfer agents will all be working together to make sure all the proper coordination take place for Regulation Sho to work.

Coordination will take place with the fully reporting company (and their transfer agent if they have one) to make sure there is a full accountability of what’s their OS. The facts will be reflected in the company’s SEC filing which is why it is essential for them to be a fully reporting company.

The DTC will be responsible for informing the SEC where the open sales exist as in the amount of shares existing that have transacted through them that they placed into our brokerage accounts. This was a problem before because many relied on the DTC to give them more than this information to help resolve this issue sooner.

This is where the brokerage companies come in along with the help from the exchanges. The SEC will be further detailing and defining their information of transacted shares from the DTC by having revealed to them the guilty MM that have transacted the naked short position from information received from the brokerage companies and all of the market exchanges. This is proving to be something bigger than what many of us had realized. Let me explain why.

There has been a great deal of speculation from the gold camp re the relative weakness of the price of gold vis-à-vis the shares in 2004, one which worsened as the year went on. Some reasons cited:

*Gold is topping out and won’t be able to hold its breakout gains above $430.
*A price correction to $400 and below is in the cards.
*Naked shorting of stocks.
*Price manipulation of the gold shares by The Gold Cartel and others using naked shorting to enhance their positions and create a negative technical scenario – one which induces further selling by the general investing public.
*Tax loss selling.

Whatever the real reasons are, they should ALL be coming to an end in the weeks to come. Perhaps of extra significance will be new regulations regarding naked shorting which come into play right after the first of the year (see Appendix for details).

The gold shares continue to flutter. The XAU rose .82 to 100.12, while the HUI gained 2.97 to 219.06. The HUI is still struggling with 220, making a high of 219.37. Technically, the HUI chart is firming up, curling higher after its spike topping over a week ago.

HUI
http://bigcharts.marketwatch.c…&o_symb=hui&freq=1&time=8

The tale of the two planets is on route to a collision course:
*The Wall Street planet people continue to cite one micro statistic after another why the US stock market is going to go up 10 to 15% next year and why the US economy is going to sail along in 2005. These people see US deficits as minor annoyances to their continued prosperity. Iraq? Democracy right around the corner! Most remain neutral to bearish on the gold price and regard gold as a non-event for the coming year (what else is new). They refuse to acknowledge a Gold Cartel even exists much less to what their scam is leading too.

*The GATA-like planet camp sees the US economy and market hitting a speed-bump due to macro issues such as Iraq, the tanking dollar and horrific, entrenched US deficits – ones which are worsening. We see gold soaring in response to all these problems, which appear unsolvable in the short-term. We also see the price of gold exploding because we know there is a Gold Cartel. We also know they are running out of available gold to continue their fraud for too much longer.
In a way this will be a mini War of the Worlds which is about to unfold – a war in which our planet comes out on top as far as market understanding and analysis is concerned. Ironically, even few in the gold camp are prepared for what is to come as almost all are still looking for a major correction and have their followers out of the market.

MIDAS has pounded the table since the New Orleans Investment Conference that there is NO WAY we will get a major correction with so many gold bulls neutral to bearish and after taking out extremely significant support at $430. It took five attempts over a 15-month period to successfully clear that formidable level – a level which now acts as support. Gold has rallied $10+ since the New Orleans conference.
We are in holiday trading mode so anything could happen on a day to day basis here. Yet, the time is NOW for investors to do their homework and understand why our planet/world is going to prevail in 2005. By prevailing, I mean it will be those in our camp who are going to be the ones who make the fortunes next year. Just remember, you:

GATA BE IN IT TO WIN IT!

MIDAS

Looking forward to saying hello to Café members/GATA supporters in Vancouver:

12:09a ET Monday, December 27, 2004

Dear Friend of GATA and Gold:

Here's a reminder that GATA Chairman Bill Murphy will be a speaker and GATA will have a booth at the 2005 Vancouver Resource Investment Conference, to be held at the Vancouver Convention and Exhibition Centre on Sunday and Monday, January 23 and 24, and that we'll be joined by some of the gold and silver world's favorite experts, including:

* Bob Bishop of Gold Mining Stock Report.

* John Embry of Sprott Asset Management.

* Frank Holmes of U.S. Global Investors.

* Brien Lundin of Gold Newsletter.

* David Morgan of Silver-Investor.com.

* Jay Taylor of J. Taylor's Gold and Technology
Stock Report.

* James Turk, editor of the Freemarket Gold
& Money Report and proprietor of GoldMoney.

* And Frank Veneroso of Veneroso Associates.

Dozens of mining companies will be exhibiting as well.

It's always a great conference in an eclectic, beautiful, and comfortable city -- and admission is free to those who register in advance. You just have to find a place to stay, and the conference has arranged a discounted rate at the beautiful Pan Pacific hotel adjacent to the convention hall.

You can learn all about it here:

http://www.goldshow.ca/vancouver/jan2005.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

What caught my attention was the mention of Larry Kurlander. From an old MIDAS:

July 31, 2000 - Spot Gold $277 down $1 - Spot Silver $4.99 up 4 cents

http://www.lemetropolecafe.com…090&SearchParam=Kurlander

…The Gold Anti-Trust Action Committee has courted Newmont's financial support and moral support for well over a year now. One year ago, Larry Kurlander, one of their senior executives, came to Dallas to pick my brain and we spoke for over 3 hours. Then, he met with Frank Veneroso of Veneroso Associates in Newark, New Jersey for about the same amount of time. My meeting with Larry, a nice enough fellow, who rides a Harley over the countryside for recreation and fun, was very business like, and could not have been more cordial. While he has a nice salary, it was my time on my dime.

Since then, he refuses to take my phone calls and will not correspond at all. Worse, I called Chairman Ron Cambre's office to get his email address to send him some information. In the strangest return email in history, his office sent my email back saying that was not Ron Cambre's email address (after they gave it to me), thus "suggesting" that he could not have received an email from me in the first place. Good Lord. What did Larry Kurlander, a former District Attorney with extensive Washington contacts tell Cambre? Does Newmont know about the ESF, the Fed, and the rest of the mob and is so afraid that GATA is right that they have to send back emails? - that they won't even accept phone calls when we are trying to help their own shareholders?

-END-

Based on this Newmont/Indonesia article, who knows what Larry Kurlander was told by the Newmont brass after his visit to see me and then Frank. What I do know is that Kurlander is right. Newmont does not live up to its advertised standards. There are many ways Newmont could have dealt with GATA in a professional manner – an organization out to help their own shareholders. Instead, they chose to heap insults and rebukes on us.

Newmont, the flagship company in the gold industry….what a sorry state of affairs.

Newmont Mining has received a good deal of unwanted press lately for its mining activities in Indonesia. The following article was in the New York Times last week and leads to an Oldie But Goodie MIDAS entry of many years ago – one which has left a foul GATA taste re Newmont ever since……

Mining Giant Was Warned
About Pollution in Indonesia

By Jane Perlez
The New York Times
Wednesday, December 22, 2004

http://www.nytimes.com/2004/12…ional/asia/22newmont.html

JAKARTA, Indonesia -- An internal company report warned top executives at the Newmont Mining Corp., the world's largest gold producer, in 2001 that the company was putting tons of toxic mercury vapors into the air in Indonesia.

The document, shown to The New York Times by a person close to Newmont, sheds new light on operations at one of the most troubled mines of a Fortune 500 company based in Denver that has drawn the rising ire of environmental groups and local communities over the impact of its operations….

But in a 2001 company memorandum, also seen by The Times, Lawrence T. Kurlander, then a senior vice president and chief administrative officer, admonished his senior colleagues that Newmont had "told the world" it upheld American environmental rules abroad, when in fact it did not.

He suggested that because of the failure to live up to Newmont's advertised standards, he and his colleagues should forfeit their annual bonuses. The concern, he said, extended to operations in Peru and Uzbekistan, as well as Indonesia….

Villagers at Buyat Bay, near the Newmont mine on the northern island of Sulawesi, sued the company for $543 million in August after complaining about dizziness, difficult breathing, tumors and skin diseases, which they say began soon after Newmont started mining in 1996.

The audit of the Peru mine, Yanacocha, also criticized a range of operations and cited violations that were subject to substantial fines, two former employees familiar with the audits said. The company was forced to call off plans to expand operations in Peru in
November after local people angrily protested.

In his memorandum dated Jan. 18, 2001, to Wayne W. Murdy, who had just been appointed Newmont's chief executive, Mr. Kurlander wrote of the Peru mine that in December 2000 "we, the senior management team, learned for the first time we do not operate environmentally by U.S. standards."

"Our environment teams are not the ministers of good news," the letter scolded, "they are the guardians of our most treasured asset: our reputation." Mr. Kurlander, who left the company in 2002, continued, "Moreover, there is concern we are not operating at U.S. standards" in Uzbekistan and Indonesia.

Mr. Murdy said in an e-mail to The Times that he did "not have a specific recollection" of the memo, but that the issues described were being discussed by senior management at the time. Bonuses, he said, saw a "significant deduction" after the Peru spill.

-END-

Typical gold related commentary:

December 26
It's a good time to sell gold
BY PORUS P. COOPER

PHILADELPHIA - Those who beat a path to Howard Steinberg's precious-metals refinery in Philadelphia with old gold jewelry have done far better lately than those who went to their broker to buy stocks of gold-mining companies.

That's because the price of gold has jumped since May -- but the stock prices of many of the precious-metals mining companies are far below their 52-week highs, and nearly every mutual fund in the sector is down for the year.

The situation is a classic warning to investors who might tend to mix up the two: The price of gold alone does not determine the price of gold-mine stocks, said Lynn Russell, precious-metals analyst at the Morningstar investment research group.

Shares of some companies, such as Barrick Gold Corp., of Toronto, languished because the companies locked in future prices for their gold at levels that were overtaken as the market price rose, she said. Meanwhile, South African companies were hurt by a stronger domestic currency.

But if you own the metal, this is a good time to sell that old jewelry and lock in some profits, said Steinberg, proprietor of Abington Metals Refining & Manufacturing Inc. "I can't predict that gold will go up much further," he said.

The run-up in gold also indicates spreading concern that the United States is living beyond its means, with hefty budget and trade deficits, and that inflation may be returning, said Jack Worrall, who heads the department of economics at the Camden, N.J., campus of Rutgers University. Traditionally, gold has been a hedge against inflation.

"Gold right now is a stronger currency" than the dollar, Worrall said. But that can change if people perceive that U.S. policy-makers are taking steps to shore up the dollar, including reducing the deficits, he warned.

To capitalize on such bullishness about gold, a new exchange-traded fund began trading in November. StreetTracks Gold Trust is backed by gold bars stored in a warehouse. Shareholders own the bullion without having to take it home.

Investors tempted by this new fund should ask themselves the same questions they would before buying any stock or mutual fund, Russell said. Will it help them diversify? How does it fit into their long-term investment strategy?

Two rules of thumb are that precious metals should not be more than 5 percent of an investment portfolio and, because their prices tend to be volatile, they should be considered long-term investments, she said.

Russell suggests investors look for mutual funds with low costs that are diversified across several precious metals, not just gold. Don't buy just "because it is the hottest sector with great recent returns," Russell said.

-END-

Here is a keeper for later on next year:

"Gold will be a horribly boring instrument next year," said Dennis Gartman, editor of the Gartman Letter newsletter in Suffolk, Virginia.

Rhody on GLD:

When is investing in gold, not investing in gold? The answer to this question is investing in the new gold ETF: GLD. You cannot get gold out of an investment in GLD. That means it's a derivative. Worse, it's listed only in the NYSE. That means you have to buy US dollars in order to acquire it. That means you sell your CAD for USD and that boosts the USD. But a rising USD means a falling gold price. So the very act of buying GLD, lowers its value! I might remind you that this USD denominated fund is in a currency that has already fallen 33% since 2000, and has a long way to fall yet.

So an investment in GLD is actually a bet on a RISE or stable USD. That is unlikely. Finally, the custodian of GLD gold are all members of financial entities proven hostile to gold. This includes JPM and HSBC. These entities actively trade against gold's rise. So buying GLD is putting gold into the hands of the enemies of gold who can then use your investment against your long term interests. In the late December sell off of gold, this ETF dumped 15 tons of gold the day before gold broke down. This makes sense as the custodians were the entities that arranged the sell off. So GLD had prior knowledge of the coming attack, and sold early, but in doing so, probably helped to initiate the breakdown. So buying GLD is handing ammunition to the enemies of real money. As is usual with most derivatives, they are perverse. Please avoid this derivative called GLD.
May you all have a safe and happy New Year. Rhody.

The understanding of what the gold market is really all about is Neanderthal. No market in history has been more misread and so egregiously reported on. The people who write about it know almost nothing. What can we expect? Those who know among the least are the pundits in the gold industry itself, who are clearly the most clueless group of analysts ever produced on this earth.

CHINA AND GOLD

In 1994, Gold production from China was 3.5 million ounces, and in 1994, ten years ago, China was ranked sixth in world gold production. (Minobras 1996). Today , China is ranked fourth in World production, and has recently deregularised their Gold market.

Gold in China is produced from a number of sources about 550 mining operations, including 300 primary small gold lode mines, 160 dredges and about 85 alluvial operations. About 25% of the total production came from mines in the Shandong Province of Northwestern China. Other significant gold production came from Northeast China located in the Provinces of Herbei, Heilongjiang and Shaanxi. Major goldmines in Southeastern China are located in the Henan, Guizhou and Huei Provinces. In west in central China, gold is produced from mines in the Gansu and Sichuan Provinces.

Now, assuming that Gold has been produced in China based on the annual, rate of 3.5 million ounces per year, and that gold has been produced at this rate for some 3,000 years, and that the Chinese do not openly export Gold. Who has the Gold, China.!

It would suggest that the Chinese have an awful lot of Gold, "under their beds". I realize that this is a gross assumption, but "official" figures do not really exist.

Now assume that the US$ Index is headed way down, toward 60 on the index. It would be very unlikely that the Chinese would accept a depreciation in their currency to the same extent, because, quite simply, they do not have to accept this, by virtue of having all that historically mined Gold.

Supposition, maybe, but one must remember that the Chinese think very long term!!

One must also remember that the Chinese own the order of 20 to 25% of the US Bond Market, which in essence is Government debt.

Also, the short selling of Gold was initiated around 1996, which corresponded to the start of the asset bubbles in the US Markets, particularly in the US$ Index. In other words, one could suggest that the short selling of Gold underwrote the US Market Bubbles, as it still does, by virtue of the Gold short position still existing.

And so, what is this Gold Market really about?

One can only use one’s imagination!

Och aye
Haggis

Of the estimated 145,200 tons of all gold ever mined, about 15% is thought to have been lost, used in dissipative industrial uses, or otherwise unrecoverable or unaccounted for. Of the remaining 123,000 tons, central banks hold an estimated 32,000 tons as official stocks, and about 91,000 tons is privately held as coin, bullion, and jewelry. (USGS).

GATA have suggested that 17,000 tonnes of the Central Banks stocks have been either sold or swapped.

World Resources: Total world resources of gold are estimated at 100,000 tons, of which 15% to 20% is a byproduct resource. South Africa has about one-half of all world gold resources, and Brazil and the United States have about 9% each. Some of the 9,000-ton U.S. resource would be recovered as byproduct gold.

The following input from a fellow Café member relates to the rigging of the price of gold from a big picture geopolitical standpoint. It also relates to how the short-sighted strong dollar policy of the US (with the rigging of the gold price as its main feature) has played right into the hands of the Chinese – Russians too for that matter.

G’day Bill,
Compliments of the Season to you.

Something is afoot????

I have just read an article by Don Stott, entitled "Over":

http://www.gold-eagle.com/gold_digest_04/stott122304.html

In his article Don outlines that the Chinese currency is currently "pegged" to the US$, and he further outlines that with the demise of the US$ the Chinese currency will also lose in value.

The US Geological Web site gives current Gold Resources and Reserves"

Figures are in Tonnes

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