Beiträge von Schwabenpfeil

    CARTEL CAPITULATION WATCH


    The DOW (10,494 up 54) and DOG (2126, up 11) returned to their merry ways.


    Something is very wrong out there in US financial land. Look at the DEC bond, up 1 12/32 to 114 1/32.


    DEC Bond
    http://futures.tradingcharts.com/chart/TR/C4


    The dollar has barely corrected. The stock market is near its highs, as are the bonds, even though the dollar has been trashed??? Only gold, used as a barometer of financial stress by many, was decimated. The rigging of the US financial markets is going to end very badly and financially brutalize the average American.


    US economic news and input:


    10:32 API reports crude oil inventories +583K barrels
    Gasoline inventories +2.6M barrels, while distillate inventories (1.2M) barrels. After initial downtick, Jan. WTI crude is currently trading higher to $41.30, post data, ostensibly on the API distillate number.
    * * * * *


    10:30 DOE reports crude oil inventories +600K barrels vs. expectations (750K) barrels
    Gasoline inventories reported +2.4M barrels vs. consensus +1.875M barrels. Distillate inventories reported +1.4M barrels vs. consensus +1.5M barrels. January crude is trading lower in initial reaction to the data.

    The John Brimelow Report


    Happy Indians; Unhappy ETF observers


    Wednesday, December 08, 2004


    Indian ex-duty premiums (for an explanation go to http://www.lemetropolecafe.com/img2004/IndianPremiums.htm:(


    AM $9.63, PM $8.68, with world gold at $448.75 and $446.55. High: lavish for legal imports – despite an appreciable weakening of the rupee along with the other Asian currencies. With world gold now another $10 weaker, Indian importing will surge. It may be recalled that the Reuters article on India yesterday quoted a dealer saying:


    "…everyone is waiting for prices to soften around $440-445 an ounce to boost their stocks"and another:


    "Buyers are waiting on the sidelines for prices to come down. Right now, inventory is at zero levels," (JB emphasis)


    So activity should respond immediately.


    The gold price weakness gained momentum today during TOCOM hours. There was some Japanese liquidation. Volume rose 69% to the equivalent of 22,361 Comex, and open interest fell the equivalent of 1,313 Comex (having risen 313 Comex the day before). Mitsubishi implies the public reduced its long 7.1 tonnes (equal to 2,283 Comex contracts) World gold was $3.80 below NY at the close; the active contract was off only 4 yen, being cushioned somewhat by the decline of the yen. (In NY yesterday open interest actually rose 899 lots on 35,508 contracts; the previous day it had fallen 3,764 lots on volume of 40,367.)


    Following a day of quiet but relentless selling pressure on Comex yesterday, there was a notable intensification of selling activity on ACCESS last night. Total volume for the session of over 12,000 contracts must be close to a record, and more significantly an unusually high proportion of the previous day’s volume.


    Yesterday’s open interest behavior on a $2.20 down day suggests some short selling was involved: the enormous volume today (90,000 estimated by 1PM with very few switches) suggests a wash out.


    In the meantime the gold world is being enlivened by huge rows on the ETF, much exacerbated by the foolish attempt by the instrument’s sponsors to dodge debate - quite impossible in the era of the internet. While the custodial arrangements and the strange story of the duplicated gold bar serial numbers are important questions which need to be addressed, more significant from the standpoint of short run gold market analysis is the is the very odd behavior of the reported outstandings. As Barclays puts it this morning:


    "…the much awaited US gold ETF, StreetTRACKS, has reported a fall of 15.6 tonnes down to 88.0 tonnes - this followed a surprising week of no changes in the gold held in the trust despite large trading volumes being recorded."


    15.6 tonnes is 500,000 ozs, a very nice round number. The ETF is not at all showing the pattern of the Comex gold contract, where open interest should surely be analogous. Andy Smith has put out a weekly for Mitsui suggesting that market maker manipulation is the cause:


    "It doesn’t take even a cynical judge to suspect that this is not a miracle, but the market maker absorbing genuine mismatches in buy-sell orders and maintaining a still life picture of gold held for the public gallery."



    Further suspicions as to the integrity of the gold market are most unwelcome.


    JB

    The following email was sent to us by Australia’s Nick Laird last evening. He saw this coming:


    Hi Bill
    I take about 10 snapshots of gold & silver charts twice a day & have done so for a year now.


    It's quite a handy archive of price action on a minute scale as I save tick charts (which like the one below show each price change as a tick) 5 min, 15 min, 1 hour & daily charts



    [Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas1208A.gif]



    [Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas1208B.gif]



    The action visible in these tick charts shows clear capping of the price. It doesn't happen often but that makes it all the more noticeable when they do do it. This action has been visible the last few days & generally you will only see this at market tops or important junctures when they want to effect the price & direction.


    It seems to me that they don't want this rally to have any more legs.


    This action is also visible in silver.


    Anyway here's a few charts from yesterday & today.
    Cheers Nick

    To get a handle on the big picture and to pick your spirits up as to why The Gold Cartel’s demise is not far off, please read Reg Howe’s brilliant new piece at:


    Déjà Vu: Central Banks at the Abyss


    http://www.goldensextant.com/S…emselves.html#anchor57474


    ***


    While the specs were massive sellers today, the trade was a massive buyer. Not a sell ticket out there from the cartel and dealer camp. For example, JP Morgan Chase bought 3,000 lots in the early going. The gold open interest must have shrunk dramatically.


    Recently, I suggested that if The Gold Cartel did attack, $430 should hold, since gold broke out from that level. As it was a top for so long, this level now becomes an obvious support and buy point. Today’s low was $432.80. World buyers should be loading the boat anytime gold approaches anywhere near $430 in the days to come.


    The dollar finished at 81.93, up only .67. The euro only dropped .99 to 133.32. The pound only dropped 1.27 to 193.30. Gold’s move down was all out of proportion to the dollar’s minor correction. This is what happens when a bunch of crooks are running a market.


    Get this: Gold in euros fell to 326 today before closing around 328.


    Newer Café members might now get some idea where some of my rage comes from. Having traded commodities for some time, I know market action. It could not be more obvious how the cabal caps price advances and then, when they are ready, sets up the specs to be flushed out. This is not the way a free market works; it is the way a managed market works. The good news for us is they are running out of bullets to keep up this farce. It is ending even as they win the battle for $450. They are LOSING the war.


    Kudos to GATA’s Mike Bolser who has insisted this is what The Gold Cartel is up to. Now what? Mike, to his own admission, has been calling for this cabal onslaught since $419. Do those calling for a correction buy ahead of $430, or wait for gold to be trounced back to the $400 level? If gold takes out $430 for more than a day or two, I will have to run up my flag. Gold should not stay even at these levels for too much longer. Once the margin call selling is out of the way, we should fly to the upside. This is the shot The Gold Cartel has been waiting for to cover their latest short positions. They sure did enough of it today.

    A fellow Café member puts all of this in perspective:


    Bill:
    My understanding is that the GLD fund lost 15 tons of gold yesterday. It is looking more and more like GLD was created to further help in the management of the gold price. If the fund lost 15 tons of gold yesterday, it means that the stock was trading at a discount to the NAV of the fund. The fund was then forced to buyback the stock and sell the same amount of gold at the market. What we have here is an instrument that owns gold that can be forced to sell gold at the market anytime somebody (the powers that be) shorts or sells enough paper certificates to drive the stock price below the value of the gold in the fund. If the SEC is allowing naked shorting in this security, it makes it even easier to drive the value of the stock down to force the sale of the physical gold anytime they want. What a wonderful world. Jeff


    By the way, I urge as much commentary to TheBullionDesk, financial press and authorities as possible. Please do so without using profanity. No reason for us to stoop to the level of the cabal and their allies.


    Regarding the day’s gold action: Gold began to sink AS SOON AS Comex closed yesterday, quickly dropping to $450. By the time I went to sleep gold was down $3/$4 dollar even though the dollar was up only slightly. The Gold Cartel’s orchestrated/blitzkrieg counter-attack had begun. When I woke up this morning, gold was already down $11. No $6 Rule on the downside.


    The Gold Cartel has been setting up this assault for weeks and now appears to have used the new Gold ETF as a tool for their planned mugging, as a way to flush out the specs. Heretofore the cash market was too strong and the dollar too weak to get the job done. One technical system after another is feeding on itself during this bloodbath, forcing longs to exit the market, for their money management rules if nothing else.


    With the gold open interest so high, moves like this can get very ugly in the short-term. The goal of The Gold Cartel is always to demoralize gold investors. This flagrant bombing could go a long way to accomplishing their goals, especially after brutalizing the gold shares the past month in anticipation of what was to come in the cash market.


    As far as I am concerned, I knew what The Gold Cartel wanted to do – no change in modus operandi was in evidence anywhere. However, I DID NOT think they were going to be able to pull off these sorts of shenanigans because the cash market has been so strong and everyone and their mother were short-term bearish. Just goes to show you how really difficult it is to fight the US Government and powerful Wall Street interests. However, it is critical to remind ourselves how far gold has come and where it is going. AND to keep in mind the bums are running out of physical to keep this up, which is why the price has risen $200 an ounce over a three year period.

    You be the judge of what has occurred!


    Talk about an outrage! Thebulliondesk.com does not allow commentary by GATA and James Turk on its website, yet goes all out to attack us and then allows us to be criticized by detractors for what we have to say (which is not allowed to be aired to TheBullionDesk.com’s readership):


    http://www.thebulliondesk.com/…mp/AnOpenLettertoGATA.pdf


    In the meantime I don’t think I have seen TheBullionDesk’s Ross Norman editorialize more than a few times over the past years. Yet, he has done so twice in two days, both related to this WGC fund, James Turk and GATA. This is his latest:


    http://www.thebulliondesk.com/ReportItem.aspx?Code=collywog


    Clearly, he must have realized what a BOMBSHELL this 15 tonnes of selling by the WGC fund prior to the gold collapse is and how shady it appears to be. Was the gold even there in the first place? Did James Turk’s or GATA’s public queries panic the World Gold Council into making an adjustment of phantom inventory? This editorial by Norman is a preemptive effort to defuse the obvious and then blame the GATA camp for causing the selling.


    This guy must truly be a banana head as to his assertions the GATA camp caused the major selling. Ah, to have such power! I am long the market as are most of the GATA camp. It would be one thing if I was publicly predicting a massive correction (like almost everyone else). However, this is not the case. I have remained a lonely steadfast bull above $450. James Turk has been in the short-term bullish camp too. What TheBullionDesk has done here is both dishonorable and a disgrace. It is also another example of our lack of freedom of the press when it comes to gold and how corrupt the gold market really is.

    A review of all of this ETF commotion:


    *The WGC ETF buys 100 tonnes of gold, yet it barely moves the market.


    *The gold price advances are capped each day to $2 and $3 at a pop for the most part.


    *During this time and especially this past week, gold in foreign currency terms loses ground with gold in euros falling from 344 to 335 and change.


    *This new buying seems to have little effect on the price of gold even though the international gold market is firm as can be to start with.


    *For many weeks GATA and the GATA ARMY raised concerns the new ETF entity has set itself up to be a tool for The Gold Cartel, or worse, an active ally of cabal forces.


    *Fervent supporters of the new entity are vociferous about it being one of the most important positive gold events in 30 years.


    *GATA says it would love that to be the case; however, the way the World Gold Council structured the entity left too many questions unanswered, exposing vulnerability it could be used to hurt the gold price at strategic moments, not help it.


    *James Turk has queried publicly why the SEC approved this vehicle when it did without demanding the same safeguards it has required from other entities in the past. As Café members and the GATA camp know, James, a former Chase banker, is extremely thorough in his work. James’ suspicions have raised a brouhaha as a result of him publicly airing his valid concerns.


    *Now, last night we find out the WGC ETF dumps 15 tonnes of gold in a quiet market and then gold is slaughtered the next day.


    *This peculiar 15 tonne drop in the ETF’s TNAVT (Total Net Asset Value Tonnes) validates James Turk’s basic assertion that the WGC’s ETF assets have to be audited to have any credibility.

    DJ Fall In StreetTRACKS' Stock Encouraged Gold Slide - Trade




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



    Wed Dec 08 12:39:57 2004 EST


    LONDON (Dow Jones)--The 3.5% fall in the price of spot gold Wednesday may have been encouraged by the sale of 15% of the gold held by the StreetTRACKS exchange-traded fund, or ETF, analysts in London said.
    The total net asset value of gold in the trust stood at 88.02 metric tons Wednesday against 103.56 tons Tuesday.


    Gold fell to $436.90 a troy ounce at the London fix Wednesday afternoon against $451.80/oz Tuesday afternoon.


    While most participants agree the market was primed for a slide - in light of an overbought technical picture and a bounce for the dollar - they also believe the fall in tonnage in the StreetTRACKS trust was responsible for some of the selling.


    The fall in the StreetTRACKS tonnage highlights the expectation by holders of the shares that the share price and price of gold is set to fall, said an analyst.


    "It hasn't helped sentiment," said Kamal Naqvi, precious metals analyst at Barclays Capital.


    StreetTRACK gold shares were launched Nov. 18 on the New York Stock Exchange to track the price of gold. Each share represents one-tenth an ounce of gold.


    In the first week of trade to Nov. 26 the trust built up a total net asset value of just over 100 tons, but since then this remained virtually unchanged until the decline Tuesday.


    Over the same period the share price for the fund has also remained steady, closing Tuesday at $45.11 compared with the close on the first day of trade at $44.38. At 1626 GMT Wednesday the shares were trading at $43.62.


    "Gold was primed for a correction but it seems to me an interesting correlation that the StreetTRACKS tonnage fell at the same time," said Philip Klapwijk, managing director of GFMS Ltd.


    The StreetTRACKS Web site says the tonnage in the trust for Wednesday will be updated between 1615 and 1630 EST.


    -By David Elliott; Dow Jones Newswires; (4420) 7842 9411; david.elliott@dowjones.com -END-

    Further details surfaced from a fellow Café member:


    Bill, Thought you out to know that StreetTracks is showing re GLD a decrease of 15 tonnes in the Total Net Asset value tonnes in the Trust from Dec 6 to Dec 7 as of 4:15 P.M. Have no idea what it means, but thought you should know.


    http://streettracksgoldshares.…/value/gb_value_usa.php#2


    Total Net Asset Value Tonnes in the Trust as at 4.15 p.m. NYT


    Dec 6, 103.56 Dec 7, 88.02


    -END-



    From the World Gold Council’s own propaganda, this fund is supposed to "track" the gold price." So why did they sell 15% of their bullion in a quiet market? Another gold market coincidence? Whether a fluke or not, this screaming red flag re the WGC ETF corroborates GATA’s worst fears about this clandestine entity and more than fully validates our public airing of the subject.

    December 8 – Gold $436.80 down $14.70 – Silver $7.08 down 74 cents


    BOMBSHELL! World Gold Council’s ETF Dumps 15 Tonnes Of Bullion Right BEFORE Price Collapse


    "Oh, what a tangled web we weave/when first we practice to deceive." – Sir Walter Scott


    GO GATA!



    If there ever was a sequence of events to prove GATA’s importance, it is what we are witnessing at the moment. Let’s get right to it! This email from a Café member corporate executive came to me early last evening:


    This smells to high heaven!


    StreetTRACKS inventory went down by 15 tons in a fairly even gold market. I would guess they used it to slow the gold rise!


    Lassonde sold almost all of his NEM shares JUST BEFORE the downward gold share push. He is also on Bush's economic advisory board, so he is in the know about the gold cartel timing. Shouldn't he be visiting with Martha Stewart for this move?


    I'd move to Canada if I didn't hate the cold!
    Bix


    Bells, whistles, and alarms went off when I received that email. Not quite understanding exactly how this ETF works and where the ETF report came from, I circulated the email to colleagues to verify its veracity. Before I received responses, this Reuters gold report surfaced this morning:


    LONDON, Dec 8 ( Reuters ) - Gold slid sharply in Europe on Wednesday, losing more than $7 at one point, as investors bought the dollar and sold commodities into the year-end.


    Traders also noted a hefty drop overnight in the quantity of gold held in trust on the new U.S.-listed gold exchange-traded fund (ETF), which did nothing to help sentiment.


    The U.S. ETF jumped from 103 to 88 tonnes overnight so somebody dumped a whole load yesterday and rather set the tone for today.


    -END-

    This is going to have to be reckoned with. No way gold won’t fly as the options for the US to extricate itself from this mess gradually worsen:


    Rense.com



    7 Retired Top US Military:
    Bush Screwed Up In Iraq
    "It's a huge strategic disaster, and it will only get worse."
    By Naomi Klein
    The Guardian - UK
    12-6-4
    The Guardian (UK) talked to seven top retired U.S. military leaders and they all agree: Bush's war in Iraq is a total unmitigated disaster! Says reporter Naomi Klein "We spoke with a group of generals and admirals that included a former supreme Allied commander and a former chairman of the Joint Chiefs, and they all agreed on one thing: Bush screwed up."
    It seems unprecedented to me that so many top military people would come out so strongly in criticism of a current commander in chief.
    Here is what they said:
    Adm. Stansfield Turner NATO Allied commander for Southern Europe, 1975-77 CIA Director, 1977-81
    We are in a real mess. There are eighty-seven attacks on Americans every day, and our people in Baghdad can't even leave the International Zone without being heavily armored. I think we are in trouble because we were so slow in terms of reconstruction and reconstituting the military and police forces. We have lost the support of the Iraqi people who were glad to see Saddam go. But they are not glad to see an outside force come in and replace him without demonstrating we are going to provide them with security and rebuild their economy. I am very frustrated. Having a convincing rationale for going in gives our troops a sense of purpose. Whatever you call it, this is now an insurgency using the techniques of terrorism. With the borders poorly guarded, the terrorists come in. All in all, Iraq is a failure of monumental proportions.


    Lt. Gen. William Odom Director of the National Security Agency, 1985-88
    It's a huge strategic disaster, and it will only get worse. The sooner we leave, the less the damage. In the months since the invasion, the U.S. forces have become involved in trying to repress a number of insurgency movements. This is the way we were fighting in Vietnam, and if we keep on fighting this way, this one is going to go on a long time too. The idea of creating a constitutional state in a short amount of time is a joke. It will take ten to fifteen years, and that is if we want to kill ten percent of the population.
    Gen. Merrill 'Tony' McPeak Air Force Chief of Staff, 1990-94
    We have a force in Iraq that's much too small to stabilize the situation. It's about half the size, or maybe even a third, of what we need. As a consequence, the insurgency seems to be gathering momentum. We are losing people at a fairly steady rate of about two a day; wounded, about four or five times that, and perhaps half of these wounds are very serious. And we are also sustaining gunshot wounds, when, before, we'd mostly been seeing massive trauma from remotely detonated charges. This means the other side is standing and fighting in a way that describes a more dangerous phase of the conflict.
    The people in control in the Pentagon and the White House live in a fantasy world. They actually thought everyone would just line up and vote for a new democracy and you would have a sort of Denmark with oil. I blame Defense Secretary Donald Rumsfeld and the people behind him -- Deputy Defense Secretary Paul Wolfowitz and Undersecretary Douglas Feith. The vice president himself should probably be included; certainly his wife. These so-called neocons: These people have no real experience in life. They are utopian thinkers, idealists, very smart, and they have the courage of their convictions, so it makes them doubly dangerous.


    Gen. Anthony Zinni Commander in chief of the United States Central Command, 1997-2000
    The first phase of the war in Iraq, the conventional phase, the major combat phase, was brilliantly done. Tommy Franks' approach to methodically move up and attack quickly probably saved a great humanitarian disaster. But the military was unprepared for the aftermath. Rumsfeld and others thought we would be greeted with roses and flowers.
    When I left in 2000, General Franks took over. Franks was my ground-component commander, so he was well aware of the plan. He had participated in it; those were the numbers he wanted. So what happened between him and Rumsfeld and why those numbers got altered, I don't know, because when we went in we used only 140,000 troops, even though General Eric Shinseki, the army commander, asked for the original number.
    Did we have to do this? I saw the intelligence right up to the day of the war, and I did not see any imminent threat there. If anything, Saddam was coming apart. The sanctions were working. The containment was working. He had a hollow military, as we saw. If he had weapons of mass destruction, it was leftover stuff -- artillery shells and rocket rounds. He didn't have the delivery systems. We controlled the skies and seaports. We bombed him at will. All of this happened under U.N. authority. I mean, we had him by the throat. But the president was being convinced by the neocons that down the road we would regret not taking him out.


    Lt. Gen. Claudia Kennedy Army Deputy Chief of Staff for Intelligence, 1997-2000
    From the beginning, i was asked which side I took, Shinseki's or Rumsfeld's. And I said Shinseki. I mean, Rumsfeld proudly announced that he had told General Franks to fight this war with different tactics in which they would bypass enemy strongholds and enemy resistance and keep on moving. But it was shocking to me that the secretary of defense would tell the Army how to fight. He doesn't know how to fight; he has no business telling them. It's completely within civilian authority to tell you where to fight, what our major objective is, but it is absolutely no one's business but uniformed military to tell you how to do the job. To me, it was astonishing that Rumsfeld would presume to tell four-star generals, in the Army thirty-five years, how to do their jobs.
    Now here's another thing that Rumsfeld did. As he was being briefed on the war plan, he was cherry-picking the units to go. In other words, he didn't just approve the deployment list, he went down the list and skipped certain units that were at a higher degree of readiness to go and picked units that were lower on the list -- for reasons we don't know. But here's the impact: Recently, at an event, a mother told me how her son had been recruited and trained as a cook. Three weeks before he deployed to Iraq, he was told he was now a gunner. And they gave him training for three weeks, and then off he went.
    Rumsfeld was profoundly in the dark. I think he really didn't understand what he was doing. He miscalculated the kind of war it was and he miscalculated the interpretation of U.S. behavior by the Iraqi people. They felt they had been invaded. They did not see this as a liberation.
    As for the recent news about the 380 tons of explosives that disappeared, it's irrelevant when they disappeared. This was known by the International Atomic Energy Agency as a site to be watched. Here is the issue: Bush tried to turn this into a political matter instead of answering questions about why he didn't follow the warnings of the IAEA. It was another example of Bush being a cheerleader instead of a leader. Nothing in Iraq was guarded except for the oil fields, which tells you why we were there. There are any number of indications that with a larger troop strength we would have been able to deal with such sites. Here is my other concern: The IAEA gave us a list of sites to be watched, so there may have been other dumps that were looted. After all, you don't just put one item on a list.
    So what do we do? I think it would be very irresponsible for us to simply pull out. It sounds like a very simple solution, but it would have some complexity and danger attached. Still, Iraq is a blood bath, and we need to be dealing with this in a much more sophisticated way than the cowboy named Bush.
    Gen. Wesley Clark NATO supreme Allied commander for Europe, 1997-2000
    Troop strength was not the only problem. We got into this mess because the Bush administration decided what they really wanted to do was to invade Iraq, and then the only question was, for what reason? They developed two or three different reasons. It wasn't until the last minute that they came up and said, "Hey, by the way, we are going to create a wave of democracy across the Middle East."
    That was February of 2003, and by that time they hadn't planned anything. In October of 2003, Donald Rumsfeld wrote a memo asking questions that should have been asked in 2001: Do we have an overall strategy to win the war on terror? Do we have the right organization to win the war on terror? How are we going to know if we are not winning the war on terror? As it has turned out, the guys on the ground are doing what they are told to do. But let's ask this question: Have you seen an American strategic blunder this large? The answer is: not in fifty years. I can't imagine when the last one was. And it's not just about troop strength. I mean, you will fail if you don't have enough troops, but simply adding troops won't make you succeed.


    Adm. William Crowe Chairman of the Joint Chiefs of Staff, 1985-89
    We screwed up. We were intent on a quick victory with smaller forces, and we felt if we had a military victory everything else would fall in place. We would be viewed not as occupiers but as victors. We would draw down to 30,000 people within the first sixty days.
    All of this was sheer nonsense.They thought that once Iraq fell we'd have a similar effect throughout the Middle East and terrorism would evaporate, blah, blah, blah. All of these were terrible assumptions. A State Department study advising otherwise was sent to Rumsfeld, but he threw it in the wastebasket. He overrode the military and was just plain stubborn on numbers. Finally the military said OK, and they totally underestimated the impact the desert had on our equipment and the kind of troops we would need for peacekeeping. They ignored Shinseki. The Marines were advising the same way. But the military can only go so far. Once the civilian leadership decides otherwise, the military is obliged.
    There is not a very good answer for what to do next. We've pulled out of several places without achieving our objectives, and every time we predicted the end of Western civilization, which it was not. We left Korea after not achieving anything we wanted to do, and it didn't hurt us very much. We left Vietnam -- took us ten years to come around to doing it -- but we didn't achieve what we wanted. Everyone said it would set back our foreign policy in East Asia for ten years. It set it back about two months. Our allies thought we were crazy to be in Vietnam.
    We could have the same thing happen this time in Iraq. If we walk away, we are still the number-one superpower in the world. There will be turmoil in Iraq, and how that will affect our oil supply, I don't know. But the question to ask is: Is what we are achieving in Iraq worth what we're paying? Weighing the good against the bad, we have got to get out.

    The gold shares continue to trade as if gold is headed for $350. The XAU dropped 2.50 to 100.25 and the HUI lost another 6 to 218.62 and broke significant support at 220.


    For a while now I have been looking for US financial markets to become roiled. The economic good news is behind us, as are the benefits from low interest rates, tax cuts and other government stimulus. On top of that the Iraq War is a nightmare. Hard for me to imagine a scenario in which the US stock market doesn’t fall in a major league way, the dollar fails to continue its downward move, and gold doesn’t take off as more and more investors want IN for a myriad of reasons.


    GATA BE IN IT TO WIN IT!


    MIDAS

    Then again:


    Hi Bill,
    All week long the price of Gold have been dancing around the $450 mark. The failure to break this important $450 mark and its overbought condition proves to many Gold advisors that a top must be here. What also strikes me is that so many Gold advisors are referring to April of this year. A reference to April doesn’t pass the test imo (technical picture is totally different). When you really want to make a reference then the situation of December 2002 will qualify much better. December 2002 is showing stunning parallels with today’s situation , see chart below :


    (To be placed here in a bit:)


    So let’s compare December 2002 with December 2004 :


    December 2002 : price of Gold just broke out of a powerful Teacup formation at $325
    December 2004 : price of Gold just broke out of a powerful Teacup formation at $430
    December 2002 : Gold struggled for weeks in order to slash $350
    December 2004 : Gold IS struggling in order to slash $450
    December 2002 : So many Gold analysts were predicting a top in Gold at $350 due to its overbought condtion
    December 2004 : So many Gold analysts ARE predicting a top in Gold at $450 due to its overbought condition.


    Last but not least :


    During the entire bull market in Gold, the most powerful rallies started when the 50 dma started its ascend at or near the 200 dma. This was the case in Jan 02, Dec 02, Sep 03 and guess what ? It just happened again in Oct 04. Can’t help but to think that a powerful blow off towards $480 is eminent. Would be fun to see the Dennis Gartman type of guys explaining their clients that they were right but the markets are wrong !
    Best, Eric

    Are we at the Café the only ones screaming about such investment opportunities ?


    Well, it seems that the awareness is growing among Gold analysts regarding such opportunities. The Wall Street Journal (Dec 02) quoted JohnBridges, a senior gold analyst at J.P. Morgan Chase& Co who said :


    "Ifyou are lucky enough to buy into an explorationcompany that makes a discovery, you can effectivelybuy your own auto teller machine. Some of these thingsare just phenomenally profitable." END.


    Your own auto teller machine, isn’t that what we all dream of ?


    Just buy the next Arequipa and enjoy your own auto teller machine by the end of 2005 !


    The message should be clear : Just stick to your favorite junior shares, don’t sell them at rock-bottom price levels, their time will come !


    ehommelberg@planet.nl
    Best, Eric

    Eric Hommelberg is on top of his game:


    Hi Bill,
    Yesterday I send out some notes regarding the extreme undervaluation of the PM shares. I really do think that a good BUY opportunity is upon us. As we’ve all noticed the Junior shares were hit terrible lately due to correction fears preached by so many Gold advisors. But if the price of Gold won’t correct the PM shares will have to catch up and the junior shares could ignite a spectacular launch. Again I want to stress that investors should buy the Junior shares with good discovery potential. Why ? because the senior producers are desperate in order to replace their dwindling Gold reserves. Only a very few world class gold deposits have been found since 1999 (according to Alex Davidson, VP Exploration Barrick). Since the majors are facing a decline in gold production coming years they are going after the juniors in order to replace their dwindling Gold reserves. Barrick Gold is going after the Juniors just as AngloGold, Goldfields, Newmont etc..(see details in my article ‘Juniors in denial’). What happens when a junior finds a major Gold deposit is best illustrated with the example of Arequipa Resources in 1996. Arequipa shares were trading at 1 CAD$ just before they found 7 million ounces of Gold. Within 6 month they were taken out by Barrick Gold at a share price of +30 CAD$ , see chart below :




    [Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas1207B.gif]

    Congressman Ron Paul tells it like it is:


    Gold Exposes the Dollar


    Ron Paul, December 6, 2004


    The existence of gold in the economy is a constant reminder of the poor quality of the government paper, and it always poses a threat to replace the paper as the country's money. - Economist Murray Rothbard


    One year ago I wrote about the precipitous decline in the value of the U.S. dollar against other world currencies, a decline that continues unabated today. A Euro note worth only 89 cents shortly after its introduction was worth about $1.16 at the end of 2003. Today it’s worth $1.33. In fact, the dollar has fallen to an all-time low against the Euro, and a 12-year low against the British pound. Since 2000, the dollar has lost 30% of its value.


    Gold, by contrast, has surged 70% in the same period. The New York Times last week acknowledged that gold "was now a more favored currency than the U.S. dollar." As analyst Harry Schultz points out, when gold prices are low the financial press calls gold a commodity. When prices are high, they call it a currency. Investors cannot afford to sit idly by while their dollar accounts lose another 30% in value, so the rise in demand for gold is hardly surprising.


    The world financial markets are betting against the dollar. Our creditors, particularly Asian central banks, are losing their appetite for U.S. Treasuries. Our federal government’s huge debt and voracious appetite for deficit spending make our economy dependent on the actions of foreign governments and central bankers. Yet few Americans realize the extent to which their own government has sold out American sovereignty by borrowing money overseas.


    Washington seems oblivious to the problem. Our current account deficit is roughly 6% of GDP, and our total foreign indebtedness is over $3 trillion. We borrow $1.8 billion every day! Unfortunately, our politicians and the public will ignore the problem until the combination of dollar inflation, price inflation, and higher interest rates brings the borrowing frenzy to an end. Americans, like their government, seem to have lost the ability to live within their means. When their standard of living falls, however, they will look for someone to blame in Washington.


    The consequences of a rapidly declining dollar are not yet obvious to the American public. A trip to Europe costs more than it did a few years ago, but most Americans still don’t sense they are becoming poorer as the dollar falls. The long-term significance has not yet begun to sink in. However, our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. Federal Reserve chairman Alan Greenspan has relentlessly increased the money supply throughout his tenure, ostensibly to keep the economy expanding. But this artificial stimulation through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years.


    Congressman Ron Paul, a Republican, represents the 14th Congressional District of Texas, which encompasses the Gulf Coast region south and west of Houston.

    Hi Bill,
    This on DTC from http://www.marketforum.com/?id=781355
    (at the bottom of the page).
    Where’s Spitzer on DTC?
    Sincerely,
    Dave.


    " NBC's "Dateline" recently confirmed to FinancialWire that it is preparing a comprehensive expose of the "naked short selling" controversy.


    The reportage is said to focus on allegations that "brokers, through their wholly owned clearing house system, the Depository Trust Corporation (DTCC), have effectively been creating counterfeit shares of stock through their 'Stock Borrow Program', which allows brokers to 'borrow' the same shares over and over again, artificially inflating the share count and driving the price of the stock down.


    Stockgate, a growing global malady, is being contested on multiple levels, including judicial, legislative and political. "


    -END-

    More and more savvy Café members believe the gold shares are abnormally suffering due to hanky-panky:


    Good Evening Bill,
    It was good to see Rick Ackermans piece about an explosive rally. Could definitely use some hope at this stage of a years worth of share bashing. My own piece in tonight's Midas about cartel intervention against the shares was a bit of a rant, lacking on fact, and filled with gut instinct feeling. But, through my life's eyes which have much experience monitoring powerful political men, I have come to understand their ego and how they exercise their power. I remain firm in my position that the cartel has a two prong attack. One against the bullion and one for the shares. It fits their M.O. Tom K's contribution about the Depository Trust Corporation creating counterfeit shares that can be borrowed by broker over and over again artificially inflating the share count and driving the stocks value down is incredible. It certainly explains the means for these hot shot boy wonders to trash shares through naked shorting. It is implausible that they are not doing every conceivable thing possible to accomplish their mission. There are many issues of impropriety, so it shouldn't take long to expose something significant. GATA should get a line in on this Dateline production and reveal the other fraud that regularly occurs with the bullion and leasing. This could get some real mileage, national coverage and the groundwork for some over do reform. Gonna watch this closely. All the best Bill. Thanks for being there in these trying times. It is greatly appreciated.
    Rich

    Sound analysis from the Lasco report:


    Gold - The FEB GOLD fell 1.90 to end the session at 455.90 and above support levels at 454.89, 453.70 and 452.52. We do have some minor resistance at 456.20 and then not much until we reach 461.70.


    I see absolutely nothing wrong with gold here. We are simply consolidating previous gains and I wouldn't dream of liquidating here. WE ARE GOING TO 475.00 AND MAYBE AS HIGH AS 525.00 ON THIS MOVE.


    Silver - Likewise, MAR SILVER is consolidating previous gains. We fell 8.00 to end the day at 796.30. We have resistance at 797.25, 802.97, 803.50 and 810.38 while support can be found at 792.07 and 782.25. I would be a buyer at 782.25.


    Gold Stocks - I am sitting tight with BVN, GG, GLG, HL, NEM and RGLD. No Juniors for me.


    US$ - After the big fall on Friday we rallied .34 to end the session at 81.32 and I was not impressed. We have minor support at 81.27 while resistance is at 81.44, 81.60 and 81.75. I now suspect that 80.00 may not hold and we could fall to 77.00 before we see a significant rally.


    Bonds - The MAR BOND rallied .12 to close at 111.16 and below the 111.22 resistance level that is key. Bonds should have topped today or will top tomorrow and I am looking for a move back below the neckline by the weekend.


    I am short and will stay that way.


    DJIA - The DEC DJIA fell 38 to close the day at 10543 and just above support at 10542. We have further support at 10515, 10509 and 10475. A close below 10509 would indicate a test of 10366 and would be bearish. Resistance is at 10568 and 10597.


    I am short a small position from 10610 and will sell again with a close below 10475. I believe a top is forming here.


    Cotton - I forgot to mention that I was stopped out last week at 43.20 in the MAR COTTON. I am obviously too early but will keep a close eye and wait for another signal.


    ebo@lascoreport.com


    ***