Beiträge von Schwabenpfeil

    Hi Bill-
    I think I missed something here regarding the above subject.


    I understand what Mike Bolser frequently mentions regarding when it takes both the Treasury Secretary and the President to run the ESF. What I don't understand is, hasn't the current President already taken part in the gold scandal for the last four years minus the time period between the O'Neill departure and Snow taking office? And as such, how does the President, pardon the expression, get the soil off his hands?
    Thanks,
    Bernie


    Hello Bernie,
    Yes, exactly, but the way these bums work, the President would deny knowing what the Treasury Secretary was doing. While everyone would not that to be preposterous, no one could prove it to impeach him.
    Best,
    Bill

    Bill,
    Tonight I received your request for contributions.
    Since joining Lemetropole Cafe earlier this year,
    A. I bought Gold and Silver coins that immediately lost value.
    B. I bought Gold and Silver bullion bars that also lost value.
    C. I bought Gold and Silver options that expired worthless.
    I hold you personally responsible for:
    A. Providing some of the best information available on the
    behind the scenes manipulation of the precious metals market.
    B. Recruiting , or providing a forum for, an extremely experienced and
    knowledgeable group of individuals who share their insights.
    C. Never letting your emotions and opinions cloud your intellectual,
    cold-as-steel advice on the gold market. (Well... maybe... ;)
    Consequently, I have sent a large (for me) contribution to Gata via Chris.
    Of course I have recovered my initial investment. And because most of us
    agree on the fundamentals, investment timing has become the key to my success.



    (Though, initially it was a rather costly investment lesson - maybe I should have read a book, or something!)


    I look forward to the continued success of Gata and it's contributors - both intellectually and financially!


    Keep up the good work, Tin Horn!
    Chip
    Los Gatos, California
    PS. I may have spelled the above differently than Mahendra. (Smile.)

    Rhody with some more input on the lease rates:


    Hi Bill:
    Lease rates continue to rise for both gold and silver, particularly in the near terms. Gold's rates are still in backwardation and borrowing silver for one month is still cheaper than borrowing gold for one year, as silver's rates have risen to keep pace with gold's. I think the monetary interests or the CABAL or CARTEL of common interests, however you want to call them, are using lease metal to stem the rise and perhaps to initiate a liquidation in the paper gold market.
    Regards, Rhody.
    http://www.kitco.com/market/lfrate.html

    Chuck checked in last night:


    I saw again that the put call ratio in both silver and gold remain very bullish in both the XAU and in the future options. This has not wavered for the longest time that I can remember. Also, the weak opening and closing of the shares are still holding. This again is the longest time they have done so that I can remember. I still believe this portends a very unusual move. At this point there still might be some tax loss selling in the juniors since most of them are down this year. This is what happened in 1974 for the stock market when it was making its bottom. Chuck


    And then again this afternoon:


    The miniscule put-call ratio on the stock market and the break by oil under the moving average obviously signals a new phase in the markets. My guess is that we we'll see a sharp break in stocks and perhaps, commodities here. Let's see if gold will start to outperform everything in a relative manner. Nothing would surprise me even though logic dictates that the markets should hold up until the end of the year.

    CARTEL CAPITULATION WATCH


    Players in the US stock market finally woke up. They are realizing the economic news in this country isn’t hardy at all, and that the Iraq War is going as badly as the critics said it would a couple of years ago. The DOW got clobbered late, falling 106 points to 10,440, while the DOG finally retreated, dropping 37 to 2114. One of the catalysts for the fall, according to traders, was the failure of the market to rally on another sharp drop in oil, which tanked $1.52 to $41.46. What a shellacking oil bulls are taking here.


    The US economic news is abysmal everywhere you look.


    08:30 Q3 Nonfarm productivity reported 1.8% vs. consensus 2%; Unit labor cost reported 1.8% vs. consensus 1.6%
    Prior readings were 1.9% and 1.6%, respectively.
    * * * * *


    Redbook chain store sales index (0.8%) in Dec.-to-date vs. Nov.
    Index deteriorated from last week's reading of (0.5%) and the +0.1% in the week prior to that.
    * * * * *


    Dec. 7 (Bloomberg) -- Colgate-Palmolive Co. will cut about 4,440 jobs, or 12 percent of its workforce, and close a third of its factories worldwide to reduce costs amid rising competition with Procter & Gamble Co. Shares of the company had their biggest gain in more than four years.


    Colgate, the largest toothpaste maker, expects to take charges of about $45 million in the fourth quarter, the New York- based company said today. Colgate said it will meet analysts' estimates for fourth-quarter earnings, excluding the restructuring costs. –END-


    10:00am 12/07/04


    U.S. Nov. layoffs up 2.6% to 104,530: Challenger By Rex Nutting
    WASHINGTON (CBS.MW) - U.S. corporations announced plans to eliminate 104,530 jobs in November, the third month in a row that planned layoffs exceeded 100,000, according to a tally kept by outplacement firm Challenger, Gray & Christmas. Announced jobs cuts increased 2.6 percent in November from October's 101,840, and were up 5.1 percent from November 2003's 99,452, the firm said Tuesday. It's the first time since early 2002 that layoffs were above 100,000 for three months in a row. The 12-month average of announced job cuts rose to 85,309 from 84,886 in October. –END-


    06:55 Women's Wear Daily reports that luxury sales soaring, mass market struggling
    WWD reports that there has been a great divide in holiday sales, with luxury stores such as SKS and NMG.A doing very well this Christmas, while mass market retailers such as WMT are caught between department stores offering aggressive price promotions on one end and dollar stores on the other end.
    * * * * *


    US food prices set for biggest rise since '90-USDA
    Mon Dec 6, 2004 05:51 PM ET WASHINGTON, Dec 6 (Reuters) - U.S. food prices will rise by as much as 4 percent this year, the biggest increase in 14 years, due to more costly beef, milk and fresh vegetables, the U.S. Agriculture Department said on Monday.


    "It looks like we're going to end up between 3.5 and 4 percent higher," Ephraim Leibtag, an economist with the USDA's Economic Research Service, said about food prices in 2004.


    By comparison, food price inflation was 2.2 percent in 2003 and 1.8 percent in 2002.


    -END-


    15:00 Oct. Consumer Credit reported $7.7B to $2.1T vs. consensus $6B
    Prior reading revised to $13.6B from $9.8B.
    * * * * *

    India Gold-Buying seen steady on strong rupee, weddings


    By Hari Ramachandran


    NEW DELHI, Dec 7 (Reuters) - Physical demand for gold in India, the world's largest buyer, is likely to be steady in the near term despite high global prices due to the wedding season and the firming of the rupee against the dollar, dealers said on Tuesday. They said gold prices, which have softened after scaling 16-year high levels last week, could ease further with a fall in crude oil prices and buyers in Europe wrapping up jewellery purchases for Christmas.


    Domestic purchases could go up once prices stablise at slightly lower levels over the next two weeks, dealers said.


    "Wedding season demand is steady and continuing but everyone is waiting for prices to soften around $440-445 an ounce to boost their stocks," said Girish Choksi, an importer from Ahmedabad, the main city in industrially-rich Gujarat state.


    Indian imports are currently confined to meet immediate needs for jewellery but volumes would go up once global prices stabilise and dealers replenish stocks, he said.


    Gold jewellery forms an important part of Hindu marriages, as parents gift their daughters the metal for financial security.


    Gold slipped in Asia early on Tuesday with spot gold <XAU=> quoted at $452.20/452.70 per ounce versus $453.50/4.25 late in New York.


    "Buyers are waiting on the sidelines for prices to come down. Right now, inventory is at zero levels," said Dinesh Bhat, a gold importer from Bombay, the country's commercial capital. Gold's three-year bull run gathered pace this year, mainly due to the weak dollar. Geopolitical tension such as violence in Iraq and rising crude oil prices, which have rekindled fears of inflation, also played an important role.


    Gold hit its highest in more than 16 years last Thursday. The metal rose to a new high of $456.75 per ounce but has softened a bit since then.


    Dealers said the appreciation of the rupee against the dollar had served as a cushion against the high gold prices, making imports still viable.


    The Indian rupee was quoted at 43.67 per dollar on Tuesday, the highest in the last eight months. The rupee has gained about 4.5 percent in 2004 following strong trade and foreign inflows. "About $7 to 8 per ounce in gold prices is getting neutralised with the rupee revalued against the dollar," said Choksi.


    He said gold demand was also steady because of a ready market for jewellery for weddings at this time of the year by non-resident Indians. Jewellery accounts for 85 percent of Indian gold demand. The wedding season will last until the end of February.


    Choksi said daily gold imports in Ahmedabad were in the range of 400-500 kg and this could grow by about 20 percent if prices slipped to around $440 an ounce.


    Indian gold prices follow global trends because the country imports on average more than a tonne of gold a day to meet nearly two-thirds of its annual gold needs of about 600 tonnes. ((Reporting by Hari Ramachandran, editing by Sugita Katyal; Reuters Messaging: hari.ramachandran.reuters.com@reuters.net; +91-11 5178-1017)) . .

    The John Brimelow Report


    India buying: Can NY shorts spell I-N-D-I-A?


    Tuesday, December 07, 2004


    Indian ex-duty premiums: AM $8.11, PM $7.72, with world gold at $452.65 and $453.55. High; very ample for legal imports. Reuters has a story today supporting the view that Indian demand remains strong, citing imports to the second import point Ahmedabad, which do seem high. See attachment.


    In my deplorably late daily commentary yesterday I reviewed the evidence that short selling has become an important factor: subsequent price behaviour reinforces this view. Gold dropped $2 immediately after the NY close, before Japan’s 7PM NY open. (Funny time for a proceeds maximizing seller to sell) Then it rallied $2 to the NY open, before collapsing again.


    Against Indian buying, this is not going to be an importantly profitable short. It could be disastrous.


    JB

    Just in, GATA's Chris Powell sees it this way:
    5:15p ET Tuesday, December 7, 2004


    Dear Friend of GATA and Gold:


    TheBullionDesk.com today posted an unsigned editorial defending the World Gold Council's exchange-traded bullion fund against criticism and questions from GATA and its consultant, James Turk, editor of the Freemarket Gold & Money Report and founder of GoldMoney.


    The Bullion Desk's commentary, headlined "Allegations About Gold ETF by James Turk Unfounded," is as sweeping as it is brief and unsupported.


    "Suggestions by James Turk that the World Gold Council's recently launched ETF appears to be double-counting bars are flawed," the Bullion Desk says. "The number and chop form only part of the identification of a particular gold bar and need to be read in conjunction with the mark denoting the year. It's like saying 'there is only one December 7' when of course there are many."


    At this hour you can find the editorial on the Bullion Desk's home page here:


    http://www.thebulliondesk.com/


    But you won't find the authority for the editorial's assertion about the gold bars the fund says it owns. Is the Bullion Desk making this statement on its own authority, or at the behest of the fund's sponsor, the gold council? It's not clear.


    And surely if there are gold bars with duplicate or similar registration numbers, the fund might know better than to list them as duplicates without explanation and assurance to investors that they are not.


    Maybe there is a good explanation for the fund's listing seemingly duplicate bars. But from the start the need for explanations from the fund has has been the point of Turk's and GATA's criticism. This criticism goes far beyond the gold bar registration numbers.


    The issue illuminated by the duplicate registration numbers is the issue of the security of the bullion fund's assets generally.


    If the fund has incompletely reported the registration of its gold bars, it would be good to get clarification from the fund directly rather than to assume that the Bullion Desk speaks for the fund. (Of course as a matter of journalism, it would be good for the Bullion Desk to establish this as a matter of ordinary reporting before opining about it.) Then the fund and the Bullion Desk could address the other questions Turk and GATA have raised, questions the Bullion Desk and its editorial have failed even to acknowledge, much less provide answers to:


    * Why have all the custodians and potential custodians of the fund's gold not been identified?


    * Why is the fund refusing to let its gold holdings be fully and publicly audited?


    * Is any of the fund's gold being leased, made available for leasing, or encumbered in any way?


    * Exactly what is the fund's relationship with the Bank of England, a major lessor of gold?


    Turk and GATA endorse the concept of an exchange-traded bullion fund. But since the suppression of the gold price and the manipulation of the gold market have been made possible by the mystery that has been carefully woven around gold possession and leasing, Turk and GATA would like to be sure that any bullion fund really has, secure in vaults, without encumbrances, the gold it claims to have.


    Of course we have found that central banks deliberately confuse unencumbered gold in the vault with leased gold long dissolved in the market and unrecoverable by any practical means. We would like assurance that the bullion fund's accounting and security standards are better than those of a central bank.


    When the exchange-traded fund reports gold bars with duplicate serial numbers (even if there really are separate bars somewhere), when the fund happily declares that it may not even know the identity of the custodians of its gold, when the fund has a relationship with the biggest and perhaps most nefarious gold-leasing and gold-selling financial institution in the world, and when the fund does not forswear leasing its gold and thereby assisting the suppression of the gold price, investors generally and gold's partisans particularly should be skeptical.


    As for the Bullion Desk, it has done no more than sneer at questions it has not even yet dared to report.


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

    Why the turkeys are Ross Norman and his colleagues at http://www.thebulliondesk.com:


    *He refused to publish GATA’s press release.
    *He refused to publish James Turk's commentary on the ETF.
    *He took up GATA’s time in a phone call yesterday and didn’t bother to mention our points of contention.
    *......"most effective force for the democratization of the gold market" You mean like the market is rigged and the ETF will help balance things out? If that is so, then why hasn’t he ever given GATA the time of day?
    *He didn’t bother to address any of the critical audit points Chris Powell brought up in the GATA press release.
    *He didn’t, or couldn’t, get any official WGC response to Turk’s commentary.
    *And this is the real kicker...... James Turk contacted two vaulting experts about the duplicate bar issue. BOTH told him what Ross Norman is referring to about the different years is true – FOR SILVER, not gold! Perhaps there is a reasonable explanation. However, that should be disclosed before discrepancies like this even arise.


    Yes Norman, YOU and your bulliondesk colleagues are the turkeys; turkeys that are pandering to the gold establishment at that!

    OK, some more focus on the World Gold Council’s ETF. What a bizarre outfit:


    Hi Bill,
    Further to your Midas comments tonight regarding GLD, I neglected to e-mail you last week on the following. Executives of GLD rang the ceremonial opening bell at the NYSE last week. I happened to catch Bob Pisani of CNBC doing the opening report from the floor, who said that he tried to get the GLD executives on camera for an interview but they refused, indicating that they were still under the SEC mandated "Quiet Period." Pisani stated that this was the first time he'd ever heard of such a thing, couldn't figure it out, and used words to the effect of it being very strange.
    Jeff


    Then Ross Norman at the bullion desk has the audacity to come out with one of the least professional commentaries imaginable, one which shows his prejudice and lack of journalistic integrity:


    December 7, 2004 Editorial


    Allegations about Gold ETF by James Turk - ill-founded


    Suggestions by James Turk that the recently launched World Gold Council's new ETF appears to be double-counting bars is flawed. The number and chop form only part of the identification of a particular gold bar and needs to be read in conjunction with the mark denoting the year - it's like saying "there is only one December 7th" when of course there are many ...


    Ironically Turk has garnered support from market conspiracy theorists at GATA who have rushed to his support. Perhaps more perplexing is why GATA - who have for long asserted that the gold price has been artificially suppressed - should actively undermine arguably the biggest single vehicle to bring about further gold price rallies - and that is new gold ETF.


    TheBullionDesk.com has remained steadfastly neutral on the wider issues that GATA raises ; however we feel compelled to comment on the remarks by Mr Turk as they threaten to undermine possibly the most effective force for the democratization of the gold market, a cause supposedly espoused by GATA.


    A case of shooting themselves in the foot perhaps or rather turkeys voting for Christmas !


    -END-

    December 7 – Gold $451.50 down $2 – Silver $7.81 down 8 cents


    Ross Norman And TheBullionDesk.Com Are The Turkeys


    Last, but by no means least, courage-moral courage, the courage of one's convictions, the courage to see things through. The world is in a constant conspiracy against the brave. It's the age-old struggle-the roar of the crowd on one side and the voice of your conscience on the other...Douglas MacArthur


    GO GATA!!!


    What an aggravating day! Among other things, the gold market being leaned on is very tedious. The dollar fell .06 to 81.26. The pound rose .44 to 194.48. The euro gained .09 to 134.29.


    Gold in euros sank once more – this time to 335.20.


    The London AM Fix was $453.75 with physical gold demand in good shape around the world. However, The Gold Cartel is on their case to take gold down regardless of market factors. The good news is I don’t think it is going to work, just like it hasn’t worked for months. Gold is rinky-dinking around right above the psychologically important $450 level, yet is not taking it out to the downside, and it is diddling around here on very light volume. Often when a market flutters like this on the downside, it explodes to the upside if key support holds. Should know what’s up, or down, by tomorrow’s close.


    The gold open interest rose 2117 contracts to 356,109. The silver open interest gained 271 contracts to 125,375.


    Not much new for me to cover on gold and silver. Said all I have to offer on Sunday and Monday.

    It is only a matter of time before Iraq is a front and center issue for US financial markets to deal with.


    SUNDAY HERALD
    December 5, 2004


    US admits the war for ‘hearts and minds’ in Iraq is now lost


    Pentagon report reveals catalogue of failure
    By Neil Mackay, Investigations Editor




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



    THE Pentagon has admitted that the war on terror and the invasion and occupation of Iraq have increased support for al-Qaeda, made ordinary Muslims hate the US and caused a global backlash against America because of the "self-serving hypocrisy" of George W Bush’s administration over the Middle East.


    The mea culpa is contained in a shockingly frank "strategic communications" report, written this autumn by the Defence Science Board for Pentagon supremo Donald Rumsfeld.


    On "the war of ideas or the struggle for hearts and minds", the report says, "American efforts have not only failed, they may also have achieved the opposite of what they intended".


    "American direct intervention in the Muslim world has paradoxically elevated the stature of, and support for, radical Islamists, while diminishing support for the United States to single digits in some Arab societies."


    Referring to the repeated mantra from the White House that those who oppose the US in the Middle East "hate our freedoms", the report says: "Muslims do not ‘hate our freedoms’, but rather, they hate our policies. The overwhelming majority voice their objections to what they see as one-sided support in favour of Israel and against Palestinian rights, and the long-standing, even increasing support, for what Muslims collectively see as tyrannies, most notably Egypt, Saudi Arabia, Jordan, Pakistan and the Gulf states.


    "Thus when American public diplomacy talks about bringing democracy to Islamic societies, this is seen as no more than self-serving hypocrisy. Moreover, saying that ‘freedom is the future of the Middle East’ is seen as patronising … in the eyes of Muslims, the American occupation of Afghanistan and Iraq has not led to democracy there, but only more chaos and suffering. US actions appear in contrast to be motivated by ulterior motives, and deliberately controlled in order to best serve American national interests at the expense of truly Muslim self-determination."


    The way America has handled itself since September 11 has played straight into the hands of al-Qaeda, the report adds. "American actions have elevated the authority of the jihadi insurgents and tended to ratify their legitimacy among Muslims." The result is that al-Qaeda has gone from being a marginal movement to having support across the entire Muslim world.


    "Muslims see Americans as strangely narcissistic," the report goes on, adding that to the Arab world the war is "no more than an extension of American domestic politics". The US has zero credibility among Muslims which means that "whatever Americans do and say only serves … the enemy".


    The report says that the US is now engaged in a "global and generational struggle of ideas" which it is rapidly losing. In order to reverse the trend, the US must make "strategic communication" – which includes the dissemination of propaganda and the running of military psychological operations – an integral part of national security. The document says that "Presidential leadership" is needed in this "ideas war" and warns against "arrogance, opportunism and double standards".


    "We face a war on terrorism," the report says, "intensified conflict with Islam, and insurgency in Iraq. Worldwide anger and discontent are directed at America’s tarnished credibility and ways the US pursues its goals. There is a consensus that America’s power to persuade is in a state of crisis." More than 90% of the populations of some Muslims countries, such as Saudi Arabia, are opposed to US policies.


    "The war has increased mistrust of America in Europe," the report adds, "weakened support for the war on terrorism and undermined US credibility worldwide." This, in turn, poses an increased threat to US national security.


    America’s "image problem", the report authors suggest, is "linked to perceptions of the US as arrogant, hypocritical and self-indulgent". The White House "has paid little attention" to the problems.


    The report calls for a huge boost in spending on propaganda efforts as war policies "will not succeed unless they are communicated to global domestic audiences in ways that are credible".


    American rhetoric which equates the war on terror as a cold-war-style battle against "totalitarian evil" is also slapped down by the report. Muslims see what is happening as a "history-shaking movement of Islamic restoration … a renewal of the Muslim world …(which) has taken form through many variant movements, both moderate and militant, with many millions of adherents – of which radical fighters are only a small part".


    Rather than supporting tyranny, most Muslim want to overthrow tyrannical regimes like Saudi Arabia. "The US finds itself in the strategically awkward – and potentially dangerous – situation of being the long-standing prop and alliance partner of these authoritarian regimes. Without the US, these regimes could not survive," the report says.


    "Thus the US has strongly taken sides in a desperate struggle … US policies and actions are increasingly seen by the overwhelming majority of Muslims as a threat to the survival of Islam itself … Americans have inserted themselves into this intra-Islamic struggle in ways that have made us an enemy to most Muslims.


    "There is no yearning-to- be-liberated-by-the-US groundswell among Muslim societies … The perception of intimate US support of tyr-annies in the Muslim world is perhaps the critical vulnerability in American strategy. It strongly undercuts our message, while strongly promoting that of the enemy."


    The report says that, in terms of the "information war", "at this moment it is the enemy that has the advantage". The US propaganda drive has to focus on "separating the vast majority of non-violent Muslims from the radical- militant Islamist-Jihadist".


    According to the report, "the official take on the target audience [the Muslim world] has been gloriously simple" and divided the Middle East into "good" and "bad Muslims".


    "Americans are convinced that the US is a benevolent ‘superpower’ that elevates values emphasising freedom … deep down we assume that everyone should naturally support our policies. Yet the world of Islam – by overwhelming majorities at this time – sees things differently. Muslims see American policies as inimical to their values, American rhetoric about freedom and democracy as hypocritical and American actions as deeply threatening.


    "In two years the jihadi message – that strongly attacks American values – is being accepted by more moderate and non-violent Muslims. This in turn implies that negative opinion of the US has not yet bottomed out.


    Equally important, the report says, is "to renew European attitudes towards America" which have also been severely damaged since September 11, 2001. As "al-Qaeda constantly outflanks the US in the war of information", American has to adopt more sophisticated propaganda techniques, such as targeting secularists in the Muslim world – including writers, artists and singers – and getting US private sector media and marketing professionals involved in disseminating messages to Muslims with a pro-US "brand".


    The Pentagon report also calls for the establishment of a national security adviser for strategic communications, and a massive boost in funding for the "information war" to boost US government TV and radio stations broadcasting in the Middle East.


    The importance of the need to quickly establish a propaganda advantage is underscored by a document attached to the Pentagon report from Paul Wolfowitz, the deputy defence secretary, dated May.


    It says: "Our military expeditions to Afghanistan and Iraq are unlikely to be the last such excursion in the global war on terrorism."

    Eric Hommelberg with some valuable input on the HUI and the gold shares:


    Hi Bill,
    The disconnection between the PM shares and Gold is reaching an extreme again just as it did in March 2003 and May 2004. The chart which visualizes this is the Gold/HUI ratio. During a Gold Bull market the PM shares tend to rise faster than bullion itself. While Gold rose 80% over the last three years the HUI rose more than 600%. There it is. HUI rises faster than Gold in a Gold bull market. Sometimes Gold outperforms the HUI and vice versa but overall the HUI rises faster than Gold itself. Sometimes the temporary undervaluation of the PM shares goes to such extremes that it provides a perfect BUY opportunity. These BUY opportunities occurred over the last three years when the RSI of the Gold/HUI ratio crossed the 70 mark. (see chart below).



    [Blockierte Grafik: http://www.lemetropolecafe.com/img2004/Midas1206A.gif]




    In March of 2003 when the HUI hit a low of 112, it rallied all the way up to its peak of 252 in December of that year , an increase of more than 100%. In May of this year the HUI bottomed at 163 and rallied all the way up to 240 by the end of September, an increase of more than 50%. Since beginning of October the PM shares are anticipating an inevitable correction pushing themselves into an extreme undervaluation compared to Gold (pushing the Gold/HUI RSI into overbought area. But what happens if Gold does not correct from here but marches further towards the $480 area ? Well, the PM shares will have to catch up. We saw that PM shares could easily appreciate 50-100% from previous RSI tops. That would translate into a HUI exceeding the 300 mark easily.
    Best, Eric


    The gold shares continue act horribly with the XAU losing 1.40 to 102.40 and the HUI dropping 2.67 to 224.62. The only positive for the HUI was it bounced off 220 by support, making a low of 220.90 early on.


    Many of the gold shares are trading at 50% of what they were a year ago with gold $30 lower. What a marvelous time to be stepping up to the plate on some of the quality golds which have been beaten up for no reason other than technical considerations.


    GATA BE IN IT TO WIN IT!


    MIDAS

    Some thoughts on the gold shares:


    Hey Bill,
    Seems today we have another case of self-fulfilling prophecy, or is it propaganda? The shill pundits continually predict that the shares will correct, and then they do!


    Hmmmm? On the surface this seems to be that old axiom of the shares leading the markets, knowing where the commodity is heading that they represent. But, the commodity is not yielding to this prognostication. Neither gold or silver bullion are indicating any weakness that would warrant these sell offs of the shares. As a good contrarian, and proud conspiracy theorist, I have a different interpretation of what is occurring. My analogy is based on the premise that equity investors couldn't predict what was going to happen in the next ten minutes, never mind what might occur in an international bullion market. I know this because I am an equity investor, who has read dozens of books about predicting price movement based upon the examination of historic price data displayed upon a chart, and it can not be done with any consistency. Predicting prices based upon historic data is at best a fifty-fifty proposition. Especially in managed markets.


    On the other hand, trend and price channel analysis are valuable tools, combined with an in-depth knowledge of the dynamics of the economic fundamentals at play; but, there is no reliable soothsaying outside of fundamentals. Accordingly, what we have going on here is the work of propagandists. Cartel shills disguised as market analysts coordinating their bearish prognostications in order to influence the market. It is a well established fact that the Central Banks use the tactic of "talking" to influence a market, while manipulating the hell out of it behind the scenes. That strategy has a basis in science, which has to do with overcoming inertia to start movement, because a body in motion will tend to stay in motion. The manipulators know that once they initiate movement in a certain direction, as the herd accepts their message, it will continue in motion. This common practice of theirs fits the present share situation perfectly.


    For several weeks I have been reading about one pundit or another predicting that gold was overbought and in need of a serious correction. Gold wouldn't listen. The pundits plugged in a message variation about how fund managers would be taking profits from gold's significant run up for their year end gains. Still, gold would not fall. On or about November 18th, the shares did start to fall, even though there was no appreciable correction in bullion. The media propagandists continued proclaiming that the shares are leading the market, that they are predicting the immediate future of the bullion. The shares have corrected from 7.5% to 15%, although bullion has only corrected 1% to 1.5%.


    This disconnect is not normal market behavior, in my opinion. Disconnects are almost always accompanied by intervention, or other fraud. A comparison to the bond and currency disconnect proves the point. The evidence that there is manipulation in the bond markets is overwhelming, regardless of it being Japan's buying or the Fed's own monetizing through off shore accounts. The manipulation, or more politically correct "management" is causing the disconnect between the US Dollar action and bond rates. In the case of the shares and bullion, the disconnect is equally evident. Moreover, the correction to the shares is disproportionate to any run up the shares have had with bullion.


    The HUI responds less and less to the upward movement of the price of gold. Yet, it plummets violently to the downside with a miniscule loss in the bullion price. This price action in the shares is screaming MANIPULATION to me, because whenever there is a disconnect between the fundamentals and actuality, there is always intervention causing it. Accordingly, if they are known to manipulate the bond market, bullion market, and equity market, why wouldn't they are also manipulate the mining shares index? For me this is a no brainer. In closing Bill, I believe you will be completely vindicated, because bullion will indeed continue to rise, which shows that they have lost their grip and are relegated to expending their power in the miniscule share market. Their last hurrah? Go GATA!
    Rich

    A gold shares heads-up:


    Bill,
    I just received a phone call from my Broker's office at 9:30am this Monday the 6th.


    I often take delivery of certificates, so they cannot be shorted by the bad guys, and to date the cost has been minimal to zero; to have the certs sent to me. The word from my Southwest Securities and First Financial Broker is:


    D.T.C. ( DEPOSITORY TRUST CORP ) has notified my Broker that all delivery of certificates to shareholders after 1 Jan 2005 will cost the shareholder $75.00 per equity.


    I guess; if the CARTEL cannot control the price of gold, then they'll make delivery of certificates expensive to hold for the owners of equities, and possibly enabling their CARTEL friends in crime--to short and naked short shares to further manipulate market activity.


    This is not the (Free America) and (Free Markets) that I fought for in Vietnam in the 60's.


    What goes around, comes around. The manipulators and crooks in high places will get what they have bestowed on the people and deceived the people with.


    I am still adding to my shares on the dips. CDE, GSS, & ECU SILVER are screaming buys at bargain basement prices. Taking delivery of certificates make take on a new twist for me, but I'll hang in for OUR glorious payoff. Your brother (TIM) has some good physical prices in Phoenix.


    For every $3,000 I invest in shares, I purchase $1,000 in PHYSICAL SILVER from Pat Gorman at RESOURCE CONSOULTANTS or http://www.buysilvernow.com/, in TEMPE, AZ.


    The day the CARTEL gets their just deserts is not that far off! They will still try every trick in, or out, of the book to take money from honest people/investors.


    Thanks to GATA and the contributors to the cafe, I AM STAYING OPTIMISTIC for the future of Gold, AND INVESTED; with adding of shares on the dips.


    THANKS, BILL & CHRIS, for all of your hard work !!!!! And thank goodness we have the GATA Army that can see through the Camouflage of the BAD GUYS !!!!!
    DOUG
    Scottsdale, AZ

    Food for thought:


    Bill:
    Absolutely ambush in the pm shares this morning, especially silver, with the metals themselves showing good resilience so far. Hmmmmm?


    I strongly suspect naked shorting of this sector facilitated by issuance of counterfeit paper shares by the now infamous Depository Trust Corporation branch of the Federal Reserve. I refer to the following excerpt from this article:


    StockGate: SEC Paper Presented at SIA Symposium Calls Counterfeiting 'Pervasive'


    ". . . 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."


    "http://www.investors.com/breakingnews.asp?journalid=24169752&brk=1
    Tom K

    Word passed our way is that a number of hedge funds are long bullion and short the gold shares. When the shares start their move back up, a move which is coming sure as shootin’, hedge fund covering could send them up quite quickly. While this NY Post article doesn’t get into the gold shares, it offers some insight into what is going on out there in that world:


    NEW YORK POST


    HEDGE FUNDS COULD BE NEW BUBBLE


    By TERRY KEENAN


    December 5, 2004 -- ON Wall Street, almost every year has its moniker: 1987 was the "Year of the Crash"; 1999, the "Year of the Dot-Com Bubble"; and 2002: the "Year of the Corporate Scandal."


    And 2004? It undoubtedly will go down as the "Year of the Hedge Fund." Yes, these once "oh-so-exclusive" investment vehicles have sprouted like weeds of late, to the point where there are now twice as many hedge funds as there are stock mutual funds.


    It's been a boffo time for the now $1 trillion dollar hedge fund industry, which typically charges a 2 percent management fee and gets at least 20 percent of the upside returns. With that kind of deal, it's generally all return and no risk for the hedgies.


    But for market historians, the investor mania for hedge funds also raises a lot of red flags. Whether it was the frenzy for the investment pools of the 1920s, or the mutual fund mania of the late '90s, when the crowd piles into a hot "new" investment vehicle, the train has probably already left the station.


    That's one reason why some savvy investors are warning investors to proceed with caution. One of those is Jim Rogers, a regular on the Fox News Channel's "Cavuto on Business," and the man who helped found the Quantum hedge fund.


    In a speech in Japan this week, Rogers noted that the sheer number of new hedge funds that have proliferated in recent months should be enough to raise eyebrows. "With overcrowding, there will be some charlatans and incompetence. You can't have that many smart 29-year-olds around."


    Meanwhile, performance at the average hedge fund has been slipping in an inverse proportion to their popularity — with returns falling behind many of the average benchmarks. Through October, the S&P Hedge Fund index was up 1.15 percent versus a more than 2 percent gain for the plain vanilla S&P 500. As the numbers suggest, you'd have been a lot better off starting a hedge fund in 2004 than investing in one.


    TERRY KEENAN is anchor of Cashin' In on Fox News Channel, Saturday mornings at 11:30. E-mail terry.keenan@foxnews.com

    Toronto, Ontario and Vancouver, British Columbia – December 6, 2004 – Goldcorp Inc. (TSX:G; NYSE: GG) and Wheaton River Minerals Ltd. (TSX: WRM; AMEX: WHT) announce that they have reached an agreement in principle to combine to create the world’s lowest cost, million ounce gold producer. The combination would be effected through a share exchange take-over bid where Goldcorp would offer 1 common share of Goldcorp for every 4 common shares of Wheaton River. –END-

    A lot of coverage on different aspects of gold companies and their shares:


    Canada’s Sprott to buy Aflease
    David McKay
    Posted: Sun, 05 Dec 2004


    [miningmx.com] -- CANADIAN fund manager, Sprott Asset Management, is set to buy a stake in Afrikander Leases (Aflease), the South African gold and uranium company. The new investment is a vote of confidence in Aflease’s plans to start mining uranium, possibly in about two years. Sprott has about $1.9bn under management.


    Neal Froneman, Aflease CEO, has said in the past that his company could provide roughly 6% of world uranium supply from its South African resources. This is also a far cry from events almost a year ago when Aflease closed its underground gold mine under pressure from the stronger rand/dollar exchange rate. As a result, Aflease’s share price ended 49% lower year-on-year.


    Aflease will issue about 12 million new shares to Sprott raising up to R40m, funds that will be used to expedite Aflease’s uranium ambitions. Froneman declined to comment on the investment, but it’s expected an announcement will be issued to the Johannesburg Stock Exchange this week….


    -END-

    Talk about doing research:


    Hi Bill,
    I obtained some information on Canadian domestic banks by way of a Freedom of Information request. The way I read the data as at July 31, 1999 the Canadian domestic banks over sold gold/silver certificates by $633,344,000! They have since acquired much more physical and now they have more coin and bullion on hand than certificates sold and outstanding.


    If you or anyone else (such as Blanchard & Co.) wants the FOI documents I will be happy to mail them.
    Ron Lutka


    Canadian Banks - Gold & Silver positions.xls


    More from Ron:


    Hi Bill,


    The individual Canadian banks knew they were net short and they knew the Canadian banking industry overall was net short so that must have been okay with them, until GATA showed up and spooked them and they ran for cover. Good work!


    To answer your question "What do you make of that?" I think this is very good evidence of a sea change in the bullion banking industry. Some of the smaller banks are breaking from the herd and covering then going long because they know where the POG is headed. However, the much larger banks like JPM, GS, HSBC, Deutches Bank, UBS and Morgan Stanley are in so deep they are having trouble getting out from under their shorts. It was easy for the small Canadian banks to cover because that would not run the POG up significantly by itself. On the other hand, JPM covering might run the POG up $500 or more by itself. That is my guess.
    Ron