Beiträge von Schwabenpfeil

Interesting input on ECU Silver:

Hi Bill:
I just checked ECU's short position as shown at stockwatch.com. Downloading all Venture Exchange companies' short position one gets 27 pages ordered by short position size. ECU is easy to find: it is on page 1 and is the 14th largest short position on the whole exchange. On October 15th, when ECU began its current private placement (PP) rounds, ECU had no shorts, zero, zip none. By the end of October the short position had gone to 227,500. By November 15th the short position had increased to 643,700, by far the largest short position for ECU since forever (2001).

Really looks stinky to me as it must have something to do with the Investment Bank (IB) arranging the PPs. I made an apology for the IB's the other day in a note to you but take it back. The three largest players in the stock have been TD Suckurities, Ntl. Bonk Fin. and WD LaLatimer. Often TD and NBF trade between themselves or cross with themselves. Refco came in this morning buying 60,000 right on the opening and pushing ECU to 34.5, mostly stopped by TD, if I recall correctly. At 11:51 Refco bought another 23,000 shares...from TD again and another 2,000 shares from...WD LaLatimer.

I do not pretend to know exactly what is going on, but it sure looks as though some IB's shorted the stock to squeeze ECU on its most recent attempt to deploy up to 12 million units. Selling shares into the market in order to participate in a private placement is one thing, but shorting them to record historical levels in order to squeeze a client (ECU) in need, certainly cannot be very kosher.

The flip side is when someone comes in to buy 200,000 shares at the market and catches the shorts off guard (the maximum offer on the books I have seen showing is 195,000 or so recently), the stock will catch fire.

Grrrrr.
All the best,
David.

My prediction is ECU Silver (34.5 cents Cdn) is a TEN BAGGER next year. That’s right. I predict it will up ten times by December 2005.

Turning to the San Fran gold show:

Bill,
I just left the IIC show in San Fran. I know these guys are your buds. (ha ha)

I took the opportunity to not only use our time there as a sponsor and speaker to educate Crowne Golds wares but also to try and educate the shareholders of the mines, and want to be mines, to STOP trading their dollars for shares of mine stocks, when the miners wont take the risk of holding some of their cash reserves in gold. Only fiat currencies are used for these mine company reserves. This does not support the gold industry nor does it support the shareholders and their hard earned investments.

I thought I would go "Murphy" on the management of Strat gold when they tried the bullcrap line on me that their investors did NOT want them to hold gold as a portion of their reserves. Huh? They were to ignorant to just say they did not know why they did not do this. I truly believe today’s gold miner is nothing more than a wall street paper whore who does not know how to mine for gold. They mine for paper in the form of debt instrument notes, notes with the faces of Presidents who would have shot the central bank establishment for treason against our once great land.

Shareholders should demand that the mines they are invested in hold gold instead of currencies no matter what currency. Shareholders should also demand that mines look seriously at using GOLD as a currency instead of politically issued fiat currency. This mentality of miners would be like an automakers executive management BOYCOTTING driving cars because the risk is to great for
After my speaking slot, many people visited our booth, looking to be proactive to diversify their money into Crowne Gold which can be used as money. The ignorance level of the American people is profound. The quote from Hitler stands true, "Leaders are fortunate the masses don’t think."

Keep up the good work. We will have our day to say I told you so. It will be gleefully enjoyable. Until then we must keep planting the seeds so we can sow the harvest.

Sean Trainor
Crowne Gold, the worlds
Easiest way to buy, sell,
store,and exchange gold and silver
http://www.crowne-gold.com
centcom@crowne-gold.com
0115076752730

Some thoughts from Kangaroo country:

G'day Bill,
Yesterdays Market action was really odd.

Gold survived yet another "assignation job", to live another day. I do believe, however, that the "game" is not yet over.

The Markets are "running on empty", with only the Aussie one showing signs of life, but even that had a sell off yesterday and continues today.

The Gold price is now consolidating above US$450. The US$ Index is, however,
showing signs of real stress, and is trying to stay above the 80/81 level, trying to stay off an execution.

What I really astounding is that there is absolutely no sense of reality; what has value?

A couple of my Scots Mate who work in the Financial Markets are expecting a substantial rally in the US$ Index.

The US economy is riddled with credit and debt, and the longer this system tries to ward off real issues, the deeper it digs a hole for itself.

One must remember that China has mined Gold for at least 3,000 years, and currently produces the order of 3,000,000 million ounces per annum. They do not "export" Gold, so the simple question is - "Who has the Gold", and I would humbly suggest China!!!

In the recent Asean Conference in Chile, the Americans were reported to have
requested China to revalue their currency. The Chinese response was a polite but firm "No", and the Chinese were reported to have suggested that the Americans "sort out their mess".

The Americans do, however, continue to beieve that the world owes them a living?!

So where to from here?

Well, the article written by Ron Griess "Presenting a Positive Case for the Stock Market in 2005" at Goold Eagle:

http://www.gold-eagle.com/editorials_04/griess111004.html

And,

"Schwarzenegger Savages California, Aims at Presidency", at:

http://larouchepub.com/other/2004/3147arnie_for_pres.html

In 1980, when Reagan became President, and the Financial Markets were deregulated with the "Big Bang", this started 24 years of "you have never had it so good", the problem being that Credit and Debt were slowly but surely expanded, resulting the current mess.

Will 2005 to 2008, and beyond, be a mirror image of the Reagan years, with Schwarzenegger installed as President? Only time will tell.

This may be the shape of things to come. Where, but only in America, can "paper Dollars" be currency and an Austrian bid to become President???!!!

A sense of reality has surely become lost.

Yep, the "Loonies" are certainly running the Asylum. Talking about Loonies, I quote:

"I admired Hitler ... because he came from being a little man with almost no formal education, up to power. And I admire him for being such a good public speaker and for his way of getting to the people and so on...."—Arnold Schwarzenegger, in a 1977 interview with George Butler.

Perhaps Bill, you could compile all the GATA information, write a Screen Play, and get "old" Arnie to act in this movie, which would become a best seller, as it would have everything, including Arnie acting as "himself"!!!!

Hitler and Schwarzenegger do have one trait in common, they were/are both "Exterminators"; we certainly live in very strange times!!!???

Och aye,
Haggis

The Wall Street crowd continues to serve me softballs to hit out of the park with their continuing, pathetic commentary on the gold market. Why are the gold shares doing so poorly? Here is one reason: Investors go to Citibank, Morgan Stanley and SocGen for advice like they do on GOOOOgle. This is another example of what the US investing public receives for feedback from a marcher in THE SENILE WALL STREET GOLD PARADE:

Gold to Average $410/oz This Year, $450 in 2005, SocGen Says

Nov. 30 (Bloomberg) -- Gold prices will average $410 an ounce this year, 13 percent higher than last year, and $450 in 2005, driven up by a weaker dollar, Societe Generale SA forecast.

A weakening dollar boosts the allure of dollar-denominated gold for investors looking to hedge against declines in U.S. assets and making gold cheaper to buy with other currencies. The metal has gained 12 percent over the past year as the euro has advanced 11 percent against the dollar.

``We expect the market to continue to be driven largely by non-physical investment demand, which may in turn continue to be dictated mainly by external factors, above all the direction of the U.S. dollar,'' the research unit of France's third-largest bank said in an e-mailed report.

The report also said silver will rise to average $6.70 an ounce this year, up from $4.89 in 2003, and $6.75 in 2005.

-END-

More DISINFORMATION. These people are an insult to real morons they are so inept!!!! The SocGen dunces ought to bring in John Brimelow as a consultant to prevent them from publishing this kind of garbage.

On the lease rates:

Hi Bill:
There was a surge in silver lease rates of 20% in the near terms (from .20 to .25% in the near terms). Despite this, gold rates remain relatively high at only half of silver rates in the one and two month terms. Silver rates remain in incipient backwardation. Lease rates are still very low, as central banks attempt to encourage lease related selling but there are few takers, except those who wish to cap the price for monetary purposes and in silver, perhaps to use leased silver to satisfy delivery requirements on COMEX. With over 1000 contracts stopped, as much as 5 Moz is needed. I wish I could update this lease rate data more frequently, but Kitco source can go three or four days without updating their data.

Regards, Rhody.

NEW YORK, N.Y., November 30, 2004 — The New York Mercantile Exchange, Inc., will begin holding an additional electronic trading session for gold, silver, copper, and aluminum futures on Fridays from 2 PM to 4:30 PM on December 3.

The current trading schedule is as follows:

Open outcry trading:
Gold futures: 8:20 AM to 1:30 PM
Silver futures: 8:25 AM to 1:25 PM
Copper futures: 8:10 AM to 1:00 PM
Aluminum futures: 7:50 AM to 1:15 PM

Electronic trading:
Gold, Silver, and Copper:
Sunday 7 PM to 8 AM
Monday through Thursday 2 PM to 8 AM
Aluminum:
Sunday 7 PM to 7:40 AM
Monday through Thursday 2 PM to 7:40 AM

-END-

A currency heads-up from Down Under:

Hi Bill,
An interesting snippet out of Copenhagen and Saxo bank. Word is that the small FX traders are shorting the Euro but the big boys are looking at 1.40 SHORT TERM. How well does that correlate with the COT data showing the small specs are short gold?
Best,
Malcolm

Bergsten is no dummy:

Economists say dollar only halfway through its decline

By Corbett B. Daly, CBS MarketWatch
Last Update: 6:43 PM ET Nov 30, 2004

WASHINGTON (CBS.MW) -- Despite the steady decline in the U.S. dollar, the greenback is still only halfway through its adjustment to the level where it belongs to avoid a global economic crisis, a group of leading economists said in a new book released Tuesday.

"The exchange rate of the dollar is going to fall, that's what we have been seeing over the last three years, that's what we are arguing here will continue and the only issue is the extent to which and the mode to which it happens," said C. Fred Bergsten, a former Treasury official and co-editor of "Dollar Adjustment: How Far? Against What?"

Bergsten and his colleagues at the Institute for International Economics, a leading Washington think tank on currency matters, argue that the dollar should continue its fall in an orderly fashion, particularly against Asian currencies that have not appreciated against the dollar as dramatically as the euro and other western currencies.

The dollar's dramatic decline against the euro has been "extremely lopsided," holding its value more than it should have against Asian currencies, according to the book.

The dollar probed a low against the euro before rebounding Tuesday, in the wake of interest-rate comments from a top European official and release of a U.S. report that showed American consumer sentiment soured.

The euro was worth as much as $1.3331, its richest dollar value ever, before falling back slightly. Late in U.S. trade Tuesday, the euro was quoted at $1.3291, a gain of 0.2 percent against its U.S. counterpart compared with late U.S. trading on Monday.

The dollar hit fresh lows against the euro for four consecutive days last week after Federal Reserve Board Chairman Alan Greenspan said foreigners might lose their appetite for dollar assets given the size of the U.S. current account deficit. Read more.

In the book, Bergsten and John Williamson argue that China, Japan and other Asian nations should stop intervening in exchange markets, limiting their participation in the adjustment process. Read more.

"East Asia must play a much bigger role, indeed we would say a dominant role, in the remaining second leg of the international adjustment of the dollar and the correction of the international imbalances," Bergsten said. The dollar hit its high against the euro in the summer of 2001.

The Bush administration has been publicly urging the Chinese government to move to a more flexible exchange rate regime. China has fixed its currency at roughly 8.3 yuan to the dollar since 1994. American manufacturers complain that the fixed Chinese exchange rate provides an unfair cost advantage to China's exports and is costing thousands of U.S. jobs.

The economists said the U.S. should drop its public insistence that the Chinese allow their currency to move toward a floating exchange rate and, instead, argue for a stronger, fixed yuan.

"Clearly we are not indifferent. We want it to go up," said Morris Goldstein, author of a chapter on China.

The Chinese should revalue their currency and institute a new peg at a higher value before moving to limited flexibility and then allowing the yuan to float freely on the currency markets.

"That's how most countries that have gone from a peg to a float without having a crisis as a part of the process have gone," Williamson said, adding that Colombia, Chile, Israel and Poland followed that pattern.

The problem, of course, is that a stronger yuan contradicts the so-called "strong dollar policy" espoused by Treasury Secretary John Snow and his spokesmen.

Jawboning the markets "is going to get a bad name and it may become ineffective in the future if the secretary of the Treasury continues to declare his support for a strong dollar, irrespective of the circumstances," Williamson said, adding "this is an instrument that also needs to be wielded with a certain amount of responsibility."

Michael Mussa, a former chief economist at the International Monetary Fund, said there had already been "enough" adjustment against the euro in the near-term.

"It would be useful as a matter of some urgency to get some movement in Asian exchange rates," Mussa said, adding that his former employer needs "to be substantially more active" in its oversight of exchange rate manipulation by member nations.

-END-

The King Report
M. Ramsey King Securities, Inc.
Wednesday Dec. 1, 2004 – Issue 3048 "Independent View of the News"

Fortune Magazine, like many other pundits and fin media types, avers that the declining dollar is good for US exporters. As we stated in yesterday’s missive, this nonsense has been spewed for over three decades. The dollar was worth 357 yen at the end of 1971. The decline to the current Y102.77, let alone the drop to 80 in 1995, did little to rectify the US trade problem. We distinctly recall Lee Iacocca, then Ford’s CEO, screaming in the mid-‘80s, ‘Give me a 150 yen and I can compete with the Japanese automakers.’ Not too long after Lee’s bluster the dollar fell to 120. And how did that work out for Ford?

The three decade plus dollar decline versus Japan and other first world currencies has been accompanied by steady erosion in the US trade position. You’d think that three decades of data would be enough to dispel the conventional wisdom that the US, or any nation, can devaluate its way to prosperity.

When the dollar hits the alarm phase of a decline, which is usually about two-three years into a pronounced decline, there are always those that try to mitigate the extent of the dollar’s decline by comparing the dollar’s plight to some other country’s plight and declining currency. Sure, versus the peso, the dollar looks great. So what?

Prior to the open, more negative Wal-Mart news chilled the markets and thwarted the expected rally for month end. The China Business Weekly’s Jiang Jingjing reports, "Wal-Mart’s China inventory to hit US$18B this year - The world's largest retailer, Wal-Mart Stores Inc, says its inventory of stock produced in China is expected to hit US$18 billion this year, keeping the annual growth rate of over 20 per cent consistent over two years." http://www.chinadaily.com.cn/e…-11/29/content_395728.htm

Yesterday Merrill said people are too optimistic about Intel’s prospects. Intel’s mid-quarter update is due after today’s close, so operators and investors figure Merrill knows something. We mentioned last week that DRAM prices had declined below their August low. Spot DRAM prices fell 16% in November. But as we keep harping, investors and operators have been eschewing fundamentals and adhering to technical/seasonal trading…PS – Several brokers and pundits promoted Intel before Merrill’s warning, saying they expect Intel to raise their estimates in the update. What are these people looking at?

All one needs to know about yesterday’s GDP figure is that according to US government economic statisticians, the US in Q3 had the lowest core inflation since the ‘60s. Core personal consumption expenditures are listed at +0.7%. This is so absurd, it defies comment. Yet many on The Street will not only swallow this pap, they will make decisions and invest clients’ money on this and similar bogus data.

Just last week, we saw a disturbing chart in Jim Bianco’s research that shows intermediate producer prices, ex-food and energy, at almost +8% y/y are near the all-time high annual ROC (+8.2%)……….

-END-

Economic news from Economic news from Aussie Land:

Dec. 1 (Bloomberg) -- Australia's economic growth rate more than halved in the third quarter to its slowest pace in almost four years as exports, home building and company inventories declined.

Gross domestic product, a measure of all goods and services produced, rose 0.3 percent in the three months ended Sept. 30 from the previous quarter, the Australian Bureau of Statistics said in Sydney today. Growth was less than economists expected and slowed from a revised 0.8 percent in the second quarter.

A slowdown in Asia's fifth-largest economy, which has been expanding for 13 years, supports the central bank's statement last month that there is ``no pressing need'' to raise interest rates. Reports yesterday showed retail sales fell 0.7 percent in October and approvals for housing dropped to the lowest in 3 1/2 years.

-END-

The US economic news of the day:

08:30 October Personal Spending reported 0.7% vs. consensus 0.4%; Income 0.6% vs. consensus 0.5%
Prior Spending unrevised 0.2%; Income unrevised at 0.6%. Deflator reported 2.4% vs. consensus 2.4%.
* * * * *

10:00 Nov. Prices Paid reported 74 vs. consensus 75.3
Prior reading was 78.5.
* * * * *

10:00 Nov. ISM Manufacturing reported 57.8 vs. consensus 57
Prior reading 56.8.
* * * * *

10:00 Oct. Construction Spending reported 0.0% vs. consensus 0.7%
Prior reading revised to 0.1% from 0.0%.
* * * * *

10:31 DOE reports crude oil inventories +900K barrels vs. expectations (200K) barrels
Gasoline inventories reported +3M barrels vs. consensus +1.1M barrels. Distillate inventories reported +2.3M barrels vs. consensus +1.5M barrels. January crude is trading lower in initial reaction to the data.
* * * * *

10:32 API reports crude oil inventories +1.3M barrels
Distillate inventories +4.4M barrels, while gasoline inventories +512K barrels. In reaction to data, Jan. crude currently trading lowr to $48.30 from $48.70 prior.
* * * * *

Oil collapsed, falling $3.64 per barrel to $45.49, a level thought unacceptable less than a year ago.

14:03 Fed says almost all districts report improved economic growth
Data shows manufacturing increased across U.S., noting that some industries are able to pass through price increases. Fed saw numerous reports of hiring during mid-October to mid-November. Survey indicates little wage pressures and higher benefit costs. The data, provided by the Dallas Fed, indicates consumer spending was "uneven." Dow +1.17% to 10550.39; S&P 500 +1.13% to 1187.13; Nasdaq Composite +1.55% to 2129.4.
* * * * *

14:09 San Francisco Fed President Janet Yellen says real GDP is growing modestly above trend
Yellen says oil prices, business investment and the trade deficit are all negative for the economy. Yellen says Oct. payroll data was very good, though notes little change in inflation expectations, noting that inflation remains well contained. Bonds remain lower. 10-yr. (6/32) to 4.37%.

Even my friend Mahendra, who has nailed so many markets of late is frustrated with the US stock market, sending out this missive today:

Dear Members,
I know I have off-track on stock market prediction but my study shows today will be final day of upward trend and market will not hold here. This may be went up because of oil correction which I predicted in this week newsletter.

If with in 48 hours market doesn't fall than I may stop predicting on USA market for some time.

48 HOURS WILL ANSWER.

Metals are approaching toward new high - Don't sell or short.

Corn is now on my top list of investment.

Thanks & God Bless
Mahendra
http://www.mahendraprophecy.com/

Mahendra called today after sending out this email, suggesting I get out my "Ten Horns" hat. Going to need it soon according to this seer. While he is having trouble calling the US stock market, he nailed the move down in oil. Still knocking em dead with gold and silver too.

CARTEL CAPITULATION WATCH

Hello, this is Murphy on Mars to Earth. With what is going on in the world and in the US economy, the roaring US stock market makes no sense. What the heck is going on down there? The DOG rocketed up 162 to 10,590 as did the DOG which jumped 41 to 2138 jumped 41 to 2138.

I’m glad I’m not writing stock market commentary. I’d be going broke. The soaring stock market seems to be nothing more than a money game. De Nial is winning the day. Seems the momentum traders are too. Funds are pouring in from those who don’t want to miss the big money to be made. Meanwhile, investors can’t wait to chuck their gold shares. This is all ludicrous. Gold (and silver) is THE investment opportunity of a lifetime and the US stock market is a disaster waiting to happen. Keep this and bring it to my attention 6 months or a year from now.

The 30-year bond is breaking down and has completed a massive top, while the dollar continues its Niagara Falls act:

30-year T Bond
http://futures.tradingcharts.com/chart/TR/C4

All MIDAS readers are aware that knowing what the Indian premiums have been the past many months has been a KEY factor in understanding this gold bull market. John Brimelow’s work has been brilliant. He has gone out of his way to explain to Café members what this is all about:

Indian Premiums.

For centuries, India has been a massive importer of both gold and silver. For the Hindu majority in particular, gold jewelry and silver ornaments have deep appeal rooted in culture and tradition. Local mine supplies are limited.

A popular estimate is that some 15,000 tonnes of gold is in private hands in India. That is some 10% of the total world gold stock. By contrast, Central Banks claim to have a total of just over 31,000 tonnes, but an unknown quantity has been lent ("leased") out. Actual gold holdings of the Central Banks and the Indian public may in fact be quite similar.

Indians are constantly buying and selling gold to one another. Prices for the various grades and sizes popularly traded are collected by merchant associations and reported for many cities by the Indian press, usually on a twice daily basis. These could be thought of as the "small wholesale" or "large retail" prices. It is reasonable to assume that public interest and competitive pressure between the news vendors keeps them realistic.

For over 30 years, the import of gold into India was illegal, which lead to heavy smuggling. Starting in the mid 1990s more enlightened policies were progressively adopted such that gold (and silver) can now be imported freely on payment of a moderate duty.

What is of interest to outsiders is, are prices in India high enough to pay the costs of importing? Essentially, this means buying the gold in the world market by converting rupees into dollars, shipping it, paying the import duty (currently10.2 Rupees per gram), the sales tax of the local state (supposed to be harmonized at 1%, but there are a few deviants) any other local taxes, and leaving a profit margin.

The two big items are the import duty and the sales tax. I focus on what I call the "ex-duty premium" because it is a clear starting point. So, for instance, in the afternoon of November 30, 2004, in the usually leading import city, Bombay .999 gold was 670.5 rupees per gram. The exchange rate was $1 =R44.6375. This meant that Bombay gold was $467.21 per oz. World gold was $451.85. Import duty came to $7.11 per oz, leaving $8.25 as the "ex-duty" premium. Out of this sales tax would have to be paid, say $4.52, leaving $3.73 for other costs and profit. Gold will be transported immense distances for profits of less than $1 per oz, so it is safe to say that Bombay was a buyer from the world that afternoon.

Modern communications have revolutionized the relationship between the Indian gold trade and the world. Using telephone and the internet, Indian arbitrage dealers/importers trade to the end of the NY day. There have been estimates that laying off their business sometimes accounts for as much as a fifth of Comex volume.

Secondly, and greatly to the irritation of these Indians, it is possible, with some effort, to identify quite precisely gold and exchange rates at the key times of the day and perform these calculations. This would have been impossible only a very few years ago. So it possible to settle quantitatively the question of whether India is or is not an importer at any point.

India is by far the biggest importer in the world. One of the largest participants in the business has estimated the country might import 880 tonnes this year. This would be a third of global mine production.

Indian demand is price sensitive (in rupees). High premiums have been a fairly good indicator of lows in the world gold price. Sometimes, world gold rises high enough that imports are not possible. Very rarely, world prices get so high that the premium is not enough to cover the import duty, which creates a negative "ex duty premium". I have never seen Indian prices anywhere near being actually below world prices. Exports sourced in India have therefore never been practical, although it is said this did occur in early 1981.

JB
November 30, 2004

John Brimelow Report

Indian and Middle East buying Rules

Wednesday, December 01, 2004

Indian ex-duty premiums: AM $8.27, PM $7.79, with world gold at $451.45 and $451.10. High: ample for legal imports. The rupee firmed again to another 7 month high of $1 = R44.45, where it ran into some opposition by the Reserve Bank. Indian demand is solidly supporting world gold at these level. To add perspective, the only time premiums were distinctly higher this year was at the end of the gold slump in late April/early May, when world gold bottomed around $380.

Another area providing solid support is the Middle East. Turkish gold import data for November, posted on the Istanbul Gold Exchange website today, reveal Turkey imported 13.34 tonnes of gold last month, 196% more than November last year, despite the weighted average price of gold (according to the Exchange) being 10.2% higher in Turkish currency terms and 14.9% higher in US dollars. Y-t-D imports are 11.5% above 2003, and in fact have already exceeded the total for last year, itself easily a record. Much of this metal is thought to be transshipped South and East: this data provides further evidence that the demand schedule for gold in the region has shifted.

(Imports were 10% down from October: November is usually a weak month. Silver imports Y-t-D are up a remarkable 33%. Maybe silver’s strength today is not irrational.)

TOCOM saw gold volume halve, down 52% to equal only 14,730 Comex lots. The active contract slipped 4 yen, but world gold gained $1.25 over the NY close. Open interest rose: up 999 Comex lots. The abruptness of the change implies that yesterday’s flurry might have been a Fund. There is some talk of appreciable Australian selling, supposedly miners stimulated by the weak $A induced local gold price. One doubts there is much flexibility amongst Australian miners: perhaps this is more evidence of Fund activity in Asia.

NY yesterday traded 83,939 lots, with open interest falling 9,921 contracts to 345,646. Following the 10 AM economic data, the market was hit by a fierce bout of selling. ScotiaMocatta says

"Gold…found sellers after the release of better than expected US economic data…from both funds and New York dealers, bottoming out at 448.00/448.50. Gold did not remain below 450.00 for very long as physical traders turned out to be keen buyers…The metal soon traded back above 450.00 where local short covering appeared"

Standard London amplifies:

"…with steady investment bank selling in the market, gold declined. Stops around $452 on Comex seemed to assist the downward move…"

In essence, an opportunistic raid alarmed weak longs, but was stopped in its tracks by the physical market. This support did not apparently include ETF buying: the bullion holdings of which were virtually unchanged.

A similar if less dramatic pattern was seen just before the NY opening today. Gold has of course underperformed the major currencies since early last week for the usual reason – the heavy selling just below $450 last week has only retreated to just under $455. But on the basis of today’s information data from the key physical buying regions, it will soon have to retreat some more.

JB

A question from Down Under:

G'day Bill,
I note Midas said: "Gold has risen mostly in dollar terms, especially this last part of the run, because The Gold Cartel has engineered it this way to dampen gold investment excitement in the rest of the world." In Australia, the gold price has hardly moved in years. Could you explain how the cartel manipulates the $Aus (or currencies in general, whichever is easiest)?
Regards, Sid

Don’t know what they do in the currencies Sid. All I know is that it is clear they are holding gold down enough so that there are no gold bull markets other than in dollars. It could not be more obvious. When gold breaks out in foreign currency terms, it will be a signal The Gold Cartel has had it.

Gold in euros is only around 340.

Gold, which came in lower, followed silver higher. Got my juices going when it took out its double top at $455. That was too much for The Gold Cartel to live with so they beat it right back down. By day’s end we only made up for what we lost yesterday. Still, for The Gold Cartel to be going all out to batter bullion and to have gold make new highs for the move is good news for our team.

The dollar closed down .27 to 81.55, making new lows on the close. The euro lifted .28 to 133.20 and the pound shot up .0225 to 1.9315.

The gold open interest fell 9921 contracts to 345,646. This is good news for it has now contracted by 30,000 contracts with gold on its highs. When the specs pitch their longs, the commercial shorts have begun to run for the hills.

Spoke with Michael Kosares of USAGold today. He totally debunks what Gavin Maguire reported yesterday for Dow Jones. He says his gold business is booming. What is most impressive is the size of the orders, according to Mike. At times some of his staff are even having trouble keeping up with what has to be done it is so busy. Mike can’t figure out what Maguire is talking about. Concern over the dollar fall is spurring demand in a major league way according to this Colorado gold pro.

This is good news. With gold demand surging like this in the US there is no way The Gold Cartel is going to keep the price of gold from soaring in the months to come. They just don’t have enough physical to satisfy the growing world-wide demand.

December 1 – Gold $453.40 up $2.40 – Silver $8.01 up 31 cents

It Appears Our Guy Is Winning The Shootout At The Silver OK Corral!

If we value independence, if we are disturbed by the growing conformity of knowledge, of values, of attitudes, which our present system induces, then we may wish to set up conditions of learning which make for uniqueness, for self-direction, and for self-initiated learning...Karl Rogers (Psychologist 1902-1987)

As a result of silver’s substantial move up today, I have been besieged about this comment in the Monday MIDAS:

"Special note: Something is in the works for silver which should give the shorts a real jolt. Should know before the end of the year if it will come to pass. Am unable to elaborate any further except to say it will make those who refuse to understand gold and silver are money to take notice. Will be wake-up call time, a significant one!"

Unfortunately, I am not at liberty to elaborate at the moment. However, I CAN SAY that yesterday afternoon was the Shootout at OK Corral. With silver doing what it is today, one can surmise our guy was quicker on the draw than their guy.

As soon as I am able I will explain this intrigue, and it will be my pleasure to do so. To give you some idea of the sensitivity of what is going on, my source is filling me in by overnight express mail – won’t even send me what might be up by email. Stay tuned!!!!!

March silver
http://futures.tradingcharts.com/chart/SV/35

Funds were substantial buyers of silver today with Morgan Stanley doing a bit of short-covering. Our floor source noted how few of the usual silver bulls have been long on this move up. Funds were buyers and the volume was not heavy. What was noticeable was the LACK of trade selling. It disappeared. Perhaps what is going on at the Silver OK Corral is the reason?

Silver guru David Morgan called last night all excited about silver, citing how DEC made it through the rollover period so easily. He had it nailed.

The silver open interest fell 549 contracts to 116,958.

http://www.investors.com/break…?journalid=24169752&brk=1

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

Nov 29, 2004 (financialwire.net via COMTEX) -- (FinancialWire) The recent Securities Industry of America symposium on Regulation SHO, which was supposed to curtail illegal naked short selling, only further deepened the U.S. Securities and Exchange Commission divide as a dramatic ' some say startling ' new 22-page working paper, "Strategic Delivery Failures in U.S. Equity Markets," was published.

Moderators at the symposium included Steven Kessler, Associate General Counsel for Goldman Sachs & Co. (GS), and Deborah Mittelman, Deputy Director of Global Compliance for Reuters' (RTRSY) Instinet. Panelists included Jeffrey Bernstein, Senior Managing Director of Bear Stearns (BSC), and Robert O'Connor, Executive Director of the Law Department for Morgan Stanley (MWD).

The referenced working paper by University of New Mexico Professor Leslie Boni was initiated while the author was visiting financial economist at the SEC.

She termed the "failures to deliver," which litigants have called "counterfeiting," as being "pervasive."

The full report is published at http://www.investrendinformation.com

Dave Patch, editor of "Stockgate Today," credited the SEC with "putting members on notice that the settlement failure issues presently floating in the markets must be changed."

Patch quoted Boni as noting that "strategic failures" occur "when the short sellers choose not to deliver shares that would be too expensive to borrow". Her analysis of Regulation SHO was that, "pre-Regulation SHO, equity and options market makers strategically failed to deliver shares that were expensive to borrow or impossible to borrow".

Boni said "strategic fails (i.e. naked short sales) likely accounted for a higher percentage of short interest pre-Regulation SHO than previously understood".

The professor said that a whopping 42% of listed stocks at the New York Stock Exchange, NASDAQ and AMEX, and 47% of unlisted stocks in the OTCBB and Pink Sheets had persistent fails of 5 days or more with 4% being above the SEC's threshold limits for failures.

The standard for settlement is presently 3 days with a concept proposal by the SEC in comment to reduce 3 day settlement to 1 day, noted Patch.

The economist pointed to a study conducted by Evans, Geczy, Musto, and Reed in 2003 that provided evidence that while the SRO's have buy-in requirements, such buy-ins almost never occur. She noted that an audit of one market maker showed that all or a portion of shares in 69,063 transactions during 1998-1999 were "fails to deliver."

"The market maker was bought-in on only 86 of these positions," she stated.

Patch said that his own review of the Securities Acts of 1933 and 1934 finds no reference to "strategic failures." In fact, he said, Section 17a of the 1934 act "mandates prompt and accurate clearance and settlement of trades, and the admission of Strategic Failures is also in direct violation of Rule 15c6-1."

Rule 15c6-1 defines the settlement cycle for trades executed and states that no Broker Dealer may enter into a contract for the sale of a security whereby the payment for that security and the delivery of that security is greater than 3 business days. For market making activities there is a slight exemption from the delivery in a Bona Fide Market Making activity but as the SEC and SRO's have repeatedly stated, Bona Fide Market making is not simply supporting the best offer in a naked short sale without also representing the best bid or near best bid in a long trade. They must be actively making a market on both sides of trading to use the exemption, noted Patch.

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.

Delegates to the September 20 annual SEC Forum on Small Business passed several resolutions on the issue to be submitted to the SEC. Among them were:

1. Extend Reg. SHO to apply to all publicly traded companies including non-reporting companies.

2. Recommend that the SEC Commissioners reinstate the proposed provision in Regulation SHO that prohibited a selling shareholder from withdrawing his/her profits from the trade until after delivery of the underlying sold shares.

3. SEC should require all SROs, and any clearinghouse for an SRO that receives securities into accounts for security holders to disclose the fact of the ability to loan the securities in the accounts and allow security holders to opt out of allowing the securities to be loaned.

Robert Shapiro, chair of Sonecon LLC, an economic advisory firm and former Under Secretary of Commerce from 1998 to 2001 and principal economic advisor to President William Clinton in his 1992 campaign, has expressed "serious concerns about the impact of the final version of Regulation SHO regarding short sales on the equity and transparency of our equity markets."

Shapiro holds a Ph.D. from Harvard University and has been a Fellow of the National Bureau of Economic Research, the Brookings Institution, and Harvard University.

Shapiro said the SEC is correct to broaden the terms of regulation of short sales, and applauded the section directing broker dealers to mark all equity orders as "long," "short" or "short exempt." More important, he said, the new "locate and delivery" requirements could substantially reduce stock manipulation carried out through naked short sales -- but only if those requirements are widely applied and strictly enforced.

"Unfortunately, Regulation SHO does not meet either of these two standards. The troubling result is that the Regulation, in effect, establishes an official level of tolerance for unsettled or naked short sales," Shapiro charged.

Shapiro said he strongly concurs with the comments of the North American Securities Administrators Association (NASAA) on the draft rule, which said NASAA was "unable to determine why the Commission proposes to permit significant settlement failures at all. While there are instances when settlement may be legitimately delayed, existing regulations provide for extensions for settlement. If the Commission continues to allow settlement failures, it may well facilitate the harm that the proposal is designed to remedy."

"Until Regulation SHO, this economic counterfeiting has been facilitated by electronic record keeping and the apparent practice of the DTCC and its subsidiary National Securities Clearing Corporation (NSCC) of often disregarding persistent unsettled short positions. With Regulation SHO, the SEC has provided its implicit imprimatur for the same practice in cases covering the vast majority of public companies and billions of dollars."

Shapiro urged the SEC to "reconsider the provisions of Regulations SHO and, at a minimum, apply the 'locate and delivery' requirements for threshold securities to all short sale transactions, and adopt a zero-tolerance policy for significant settlement failures. American investors should feel confident that the SEC will ensure the integrity of every equity transaction they undertake and fully protect their right to receive what they have paid for."

While the battle is still waged in the U.S., some of the threats to small investors' investments are being exacted overseas. Despite some 250 companies winning their exit pass, the FaulkingTruth.com website reported that dozens of companies are still being refused delistings from the Berlin-Bremin Exchange, including ImageWare Systems (IW) and Action Products International (APII). FinancialWire also reported that Sontra Medical Corp. (SONT) is among those whose shares Berlin has resisted delisting.

In all, Faulk said Berliner Freiverkehr CEO Holger Timm reported he has been asked by 386 firms to cease their trading. He is said to have balked at the term delisting, noting that "Trading foreign shares on the third-tier market segment at the Berlin or any other German exchange is not being regarded as a 'listing', therefore it is incorrect to use the term 'delisting' if a company wants to cease trading."……..

***

A related note about short-selling

Bill,
The importance of this article in monumental. What it means that short-sellers never have to worry about getting real stock to deliver because, for a fee, the DTC will create counterfeit stock for them. No company is safe from them, and even if you put your stock in a cash account where they supposed can't hypothecate it, it doesn't matter. This is a scandal of mind boggling implications. All those gold stocks that have been heavily shorted were bombed probably without the use of real stock. You don't have to worry about being forced to cover if you can answer any price rise by bombing unlimited additional shorts thanks to the DTC.
C.Harris

***

The gold shares continue to trade as if gold is headed back to $350. It is more than pitiful and frustrating. However, c’est la vie. That’s the way it is for now. The XAU lost 3.28 to 106.75. Sure enough the HUI is in heaven again as it took out 240 with ease to close at 236.94, down 5.99.

This could be a major part of the problem. Word to me today is that one of the hot trades among the hedge funds is to buy bullion and short the HUI and other gold stocks against it. This certainly can account for some of the incredibly poor action in the gold shares.

This is producing intense short-term pain for us gold shareholders. However, it will lead to an unbelievable gold share price explosion in the weeks and months to come. It will be breathtaking!

GATA BE IN IT TO WIN IT!

MIDAS