Beiträge von Schwabenpfeil

A plug for Prudent Bear’s Doug Noland, a sharp guy with a great mind:

Bill;
I have been a subscriber, GATA member, and admirer for a few years and the following market notice compelled me to write. Recently Ralph Goodale, our Minister of Finance, fought off enormous pressure to apply the Canadian Federal Government surplus to social programs, and instead used it to reduce Federal Debt. At the time I thought aha! this is meaningful. And then this from Doug Noland's excellent Credit Bubble Bulletin on Friday at http://www.prudentbear.com/ : November 26- Market News International (Courtney Tower): "Bank of Canada Governor David Dodge said late Wednesday the huge accumulation of United States debt and massive buildup of Asian reserves from financing that debt is a problem that could lead to 'a big crash.' Dodge, appearing before the Banking Committee of the Canadian Senate, drew a picture of a looming crisis in what he called the 'international monetary order' The United States has been 'relatively slow in moving to correct its fiscal deficit' and has a 'very weak' savings record---Americans 'continue to consume more than they produce' Dodge said."

At the moment I'm somewhat proud (and relieved) to be a Canadian, and strongly recommend reading the last part of Noland's article entitled 'A Letter To The Dollar'. Is this the beginning of Richard Duncan's 'Dollar Crisis' scenario? Please keep up the Good Fight for truth and transparency. Yourself, and GATA, are contemporary heros. I wonder what Lemetropolecafe's membership will be a year from now? Thanks!
Bill Woodland, Owen Sound, Ontario, Canada.

QUESTION
---------------------------------------------------------
Submitted: 2004-11-23

INVESTOR INFORMATION
Name: Mr. Herbert M Yussim

QUESTION

There is a new ETF with the symbol GLD. I am very confused about whether I would be investing directly in real gold or some other form of 'paper gold' if I bought it. I have read various opinions on a few different gold investment web sites.

My question is whether the SEC would authorize such an issue if it was not what it appeared or was purported to be. My assumption is that GLD has gold in their own vault under guard. If that is not the case, if it is anything different then that, please clarify.

Thanks.

-END-

----- Original Message -----

From: "SEC Help" <help@sec.gov>

To: "Yussim, Herbert" <herb@cityproduction.com>
Sent: Wednesday, November 24, 2004 7:45 AM
Subject: SEC Response - File # HO1034465

Dear Mr. Yussim:

The SEC does not technically "authorize" a registration statement so that the securities can trade. Instead, the SEC reviews registration statements and ensures the issuer has made full disclosure. This is done by the SEC making comments and the issuer filing amendments to the registration statement.

The issuer of GLD is street TRACKS GOLD TRUST (formerly EQUITY GOLD TRUST). The company's filings can be located on our EDGAR database at http://www.sec.gov/cgi-bin/bro…0001222333&owner=include.

According to the S-1, the Trust is an investment trust whose purpose is to hold gold bullion. Each share represents a proportional interest, based on the total number of shares outstanding, in the gold and any cash held by the Trust, less the Trust's liabilities.

For more information, you may want to contact the issuer at (212) 317-3800. You also can speak to our experts in the Divison of Investment Management at (202) 942-0659 or imocc@sec.gov.

Sincerely,

ROBERT T GREENE
U.S. Securities and Exchange Commission
(202)942-7221

----- Original Message -----

From: Herb Yussim
To: SEC Help
Sent: Wednesday, November 24, 2004 11:44 AM
Subject: Re: SEC Response - File # HO1034465

Dear Mr. ROBERT T GREENE,
U.S. Securities and Exchange Commission
(202)942-7221

My question was "My question is whether the SEC would authorize such an issue if it was not what it appeared or was purported to be. My assumption is that GLD has gold in their own vault under guard. If that is not the case, if it is anything different then that, please clarify."

You responded to my question with "The SEC does not technically "authorize" a registration statement so that the securities can trade. Instead, the SEC reviews registration statements and ensures the issuer has made full disclosure."

Perhaps we can eliminate the hair splitting by rephrasing my question:

My refined question: Has the SEC reviewed the registration statements and ensured that the issuer has made full disclosure? Does the issue in question hold gold bullion under its own absolute control; yes or no?

The issuer of GLD is street TRACKS GOLD TRUST (formerly EQUITY GOLD TRUST). The company's filings can be located on our EDGAR database at http://www.sec.gov/cgi-bin/bro…0001222333&owner=include.

If it is the job of the SEC is to promote transparency, and trust by the small retail investor, giving a hair splitting non answer to a simple question is unsatisfactory. By reading the company's filings and footnotes, I am not able to discern a clear answer; can you? The SEC has failed to do its job in this instance, to insure that the issuer has made full disclosure if you cannot answer a simple yes or no question. Why, what is the reason for non disclosure?

Herb Yussim
President
City Production, Ltd.
http://www.cityproduction.com

What I still can’t get anyone to explain is if this ETF is responsible for so much buying why is gold trading NO DIFFERENTLY than it has for the past three months? That is a fact.

The GATA ARMY at work – some feed back from the SEC on this same gold ETF:

Hi Bill,
I got a phone call this morning from Mr. ROBERT T GREENE from the SEC in response to my continued email questioning of 'full disclosure' (see below). He admits that the perception of the financial press that this ETF 'GLD' could be misleading. However; he further acknowledges that he HAS NOT READ THE FILING HIMSELF! He suggested that I refine my request for information and he will pass it up the line to the appropriate party. He was curious why I felt there was not full disclosure. I explained that the entire basis of this fund was the physical holding of gold in a secure unhypothicated condition and any action by this fund which in any way differed from that concept needs to be listed in bold print on the cover page in order for the SEC to claim that they have fulfilled their 'full disclosure' obligation.
Herb

The latest on the World Gold Council’s EFT:

Hi Bill,
This was written by a message board correspondent, "llccman" ... I am forwarding it with his permission.

(From yesterday)

The new gold ETF, (NYSE: GLD) has published its list of gold bars on account.

http://www.streettracksgoldshares.com/inc/Barlist.pdf

6981 400-ounce bars totaling 2,799,570 ounces, or about 87 tonnes of gold is now held by the custodians of the fund and accounted for by make, weight, fineness and serial number on that list.

$1.45 billion has flowed into the fund since last Thursday, or 5 1/2 trading days.

The bar figures released Friday are evidently from data on Wednesday. There are now 32,300,000 shares of the ETF, so that means that the trust will have added earlier today at least an additional 430,000 ounces (13 tonnes or 1,075 more bars) to bring the fund in line with its 1/10 ounce per share mandate. According to the figures posted Friday, 11/26, the trust now holds 3,299,932 ounces or about 100 tonnes.

100 tonnes of the available stocks have been moved into this new trading vehicle in a very, very short time. Charles Biderman, who publishes Trim Tabs and follows flows into mutual funds and Exchange Traded Funds, said that he has never seen anything like the rapid pace of funds flowing into the new gold exchange traded fund. He suspects that a new wave of commodity based ETF's will be spawned by the success of GLD.

To give this amount of gold some perspective:

For those who follow Crystallex, after one week the new ETF now holds about 1/4 of the known amount of p/p reserves that Crystallex plans to mine over 20 years at Las Cristinas.

In that short time, the fund has put away gold amounting to about 3% of total global production including scrap.

100 tonnes is equal to about 8.9% of all the 362,336 open interest contracts on the COMEX, both long and short, as of November 16.

-END-

*Gold won’t see $400 again for 49 years.
*The US stock market could gap open lower one day, like 600 points, and then go down from there.
*Corn will be a great spec play in the next 3 to 6 months.

Speaking of astrology, I had dinner a few years ago with the highly regarded Arch Crawford, oft-seen on CNBC. He sent the following note about a Cafe member's comment in a past MIDAS, which is my pleasure to bring to your attention:

Bill,
I am writing you in answer to a piece sent out under your heading, comparing a Bearish opinion on GOLD by me to a Bullish one of Mahendra. I DO NOT want your clientele laboring under that Mis-Information!

This Consulting bulletin was sent to my Consulting clients on September 30 as shown below.

When I was interviewed on CNBC with Ron Insana, (On my website) he reminded me I said in previous letter dated Oct. 4 I wrote:

"OCT 22-28 = We expect an extreme run Up and TOP in Gold/Oil/CRB Index. Be LONG going IN & SHORT going OUT this period! My best guess for the TOP is Monday, the 25th."

GOLD and OIL both topped on October 25, OIL at 55.67 and GOLD at 432.00

These are SHORT-Term projections given by dates on the back of my newsletter.

Subsequently, GOLD pulled back and bottomed at 418.00 on November 2.

OIL pulled back to a 45.25 low on November 15. It broke out to the upside again on November 19.

I was considering getting out of some intermediate/longer term Gold positions for newsletter subscribers, but completing my technical and astro-analyses for my Oct. 4 CP newsletter, decided that GOLD was beginning a New Leg to 470+ immediately and put a chart with that notation on it on PAGE ONE of the 4 Oct letter.

In our CRAWFORD PERSPECTIVES newsletter, we have been LONG GOLD/OIL & CRB Index since April 4, 2001 at GOLD Price $258 and warning against US $ whose Index was 115 at that time.

We instituted a trade in the newsletter on the US$ Index to go SHORT in our May 3, 2004 letter at 91.02 (closed Fri 81.81).

I will bet that you do not have any clients or friends who took GOLD positions at a more opportune time, very close to the intermediate pullback low at 258 on 4 April 2001.

I apologize that I thought you were on our lists for the CP newsletter, and possibly for the consulting briefs.

Attached please find our October & November letters, as you can see that all I have said is true!

Hope you will correct any opinions to the contrary that were sent out under Metropole auspices.

Most Sincerely,
Arch Crawford
PS: Keep up the damn good work!!

I have had the pleasure of dining with Jim Rogers twice over the past five years – obviously a very interesting man. However, his knowledge about gold is remarkably bereft. Both of us have presented at the NO conference for five years. He has pooh-poohed gold each time, extolling attendees to be long lead not gold. Gold is up $200 off its lows. To Jim’s credit, lead has been a winner, doubling in price over the last 3 years. However, gold has almost doubled too. The point is how many listeners to his talks went out and bought lead? Maybe 5, at best. Yet, his talking down the possibilities for the price of gold has probably kept thousands from being long all these years and doing well financially.

Spoke with my friend Mahendra this afternoon. He gets congrats again for nailing the coffee market. It took off today, rising 6 cents, and reached his 98 cent target.

He still is very bullish on gold and silver with $478 is near term target. Yes, somewhere in here we will get some corrections, but they will be short-lived. He sees much volatility next year. Two years ago he told me gold would be trading in $20 clips. That time is not far off according to this seer. Longer term he sees gold hitting $1600 and then being FIXED at $1,000 per ounce.

The title of this Reuters article is a misnomer as far as gold is concerned.

Investor Rogers says commodities best bet

Mon Nov 29, 2004 02:47 AM ET TOKYO, Nov 29 (Reuters) - Coffee, sugar and other commodities, which are enjoying a prolonged bull run, offer the best potential for big returns, well-known investor Jim Rogers said on Monday. So much so that even his baby daughter owns some

http://yahoo.reuters.com/finan…9_07-47-03_t137971_newsml

-END-

Harmony’s bid to take over Gold Fields has created quite a flap. Whether you are for the deal or against it, there is one guaranteed positive should the deal go through. Bernard Swanepoel, the CEO of Harmony, will end the relationship with The World Gold Council, an organization which has done less than nothing to expose the manipulation of the gold price and gone out of its way to hinder GATA’s efforts.

Harmony victory could harm promotion
By Kevin Morrison in London
Published: November 26 2004 02:00 | Last updated: November 26 2004 02:00

If Harmony's takeover bid for rival South African gold miner Gold Fields succeeds, it could affect future promotion efforts by the World Gold Council.

Bernard Swanepoel, Harmony chief executive, has said he would end Gold Fields' membership of the WGC, saving about $7m a year or about 11 per cent of the council's annual budget, which is mainly spent on the promotion of gold.

The threat to the council's budget comes after a round of belt-tightening early this year when the council cut staff numbers at its international offices, and moved its London headquarters from its premium Pall Mall address in London's West End to a cheaper office in the City of London.

Harmony is not a member of the council, nor are the bulk of gold miners. The miners that contribute account for only 30 per cent of global production. They pay $1.75 on each ounce of gold they produce to the council, giving it an annual income of $60m.

The issue of paying council duties has split the gold sector, with the contributors AngloGold Ashanti, Newmont, Placer Dome, Barrick and Gold Fields complaining that the non-paying members are benefiting from the promotional efforts of the council….

-END-

From the Telegraph in London. Full story emailed out over the weekend:

Brown's gold sale 'cost the UK £1.5bn'
By Tony Freinberg
(Filed: 28/11/2004)

Gordon Brown has cost the British taxpayer almost £1.5 billion by selling off half of Britain's bullion reserves just before the gold price soared.

-END-

It was the contrived British sale of gold in May of 1999 which converted many to the GATA camp, even our stalwarts like Reg Howe and Frank Veneroso. The announcement came with gold finally beginning to surge and an attempt to get the IMF to sell gold having failed miserably. There were all kinds of mutterings in England after the announcement, which raised a stink behind the scenes, in front of the scene too like in the British Parliament.

There was an uproar because it could not have been more obvious the announcement was made to squash the price rise. No one would announce a 400 tonne sale of gold in advance in auction form, with the winners of the auctions going to the lowest bidders, unless there was a different agenda other than obtaining the highest price for the citizens of England’s gold.

The "poodle-like" nature of the Blair Government towards the US is costing Britain dearly. First, it was the ignominious sale of more than half of their gold stock at the bottom of the market, one made to facilitate the gold fraud. Then, it was Britain’s support of the US’s ill-planned venture into Iraq.

As far as rebuke is concerned when it comes to dumping cheap central bank gold, wait until the gold scandal breaks. Whether the 16,000 tonnes of gold loans have to be paid back or not, the central bank gold IS GONE! One of these days the banks will have to reveal this to the citizens. Who knows how much gold the US really has left? Wait until the Fed and Treasury are FORCED to allow an independent audit to come in and find out what is there. About time. Has not been one since the Eisenhower Administration.

Chuck checked in this morning:

I can't believe how many more gold "experts" are still calling for a correction and caution here. I noticed Schultz, Adens and Hulbert with no new ones added this weekend. Good to see relative strength with the dollar rebounding today. Keep your eye on GSS here. It might be ready.

Here's another observation. In almost every instance, the metal has been moving ahead of the shares. It's happening again. Chuck

Same theme in a different story:

Gold frenzy set to hit again 29/11/2004 7:53

Shanghai Daily news

China's heaviest gold coins are due to go on sale on December 6 and the issuer is confident the Chinese passion for the metal will ensure the 27 pieces worth more than 1.8 million yuan (US$216,867) each will be sold, especially after 1.985 tons of gold bullion were sold out within a week.
"We will hold a press conference in Beijing to unveil our heavy 10-kilogram gold coins on December 6," Chen Kui, general manager of Shanghai Gold Coin Investment Co Ltd, told Shanghai Daily. "Investors have already booked 16 coins and we are confident of selling the remaining 11 since we received numerous inquiries for them."
The company sold out the gold bullions that were issued to mark the coming 'Year of Rooster' which falls on February 9, 2005.
The 10-kg coins, which are 99.99 percent pure, have a diameter of 18 centimeters. The dragon, a traditional Chinese symbol that represents power and royalty in the country, are the main pattern on the coins.
The high gold prices seem not to have dampened investors' or collectors' enthusiasm for the coins as an initial batch of 300 kilograms of the 'Year of Rooster' bullion, which started selling in Beijing first on November 19, were sold out on its debut, earlier media reports said.
The reaction in Shanghai among buyers was just as warm when 100 kilograms of the bullion earmarked for the city were sold out after they were released to the market last Monday.
"Most of the bullions were reserved before the official sale," Chen said. "As the issuer, we sold out all the 2 tons of the bullions in the country up to November 25 and I am not worried about the retailers' sales performance."
The bullions, each of which has a mark of the rooster to indicate the coming animal year according to the Chinese lunar calendar, were sold in 50, 100, 200 and 500 gram pieces, and 100 pieces of 1 kilogram bars.
The bullions, which can be sold back to the issuer, were seen as an investment alternative on account of the bearish stock market, high property prices, and low bank deposit rates.
Gold prices have gained by 9 percent so far this year to hit 120.75 yuan a gram on Shanghai Gold Exchange, the country's sole gold bourse, on Friday.
Buyers of the bullions may cash them in at any time they want. The buy-back prices of the bullions will be based on the gold prices in local and international markets with a 2 percent commission added.
"The Chinese have a passion for gold and the current high property prices and bearish stock market will help gold glimmer even more as a safe haven to hedge against inflation," said Sun Changyan, a trader with Shanghai Lao Miao Jewelry Co Ltd.
The government will also allow individuals to trade the metal on the Shanghai Gold Exchange, Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said earlier this year in Shanghai.

-END-

James DiGeorgia does "get it." Good for him.

Meanwhile, on the other side of the world, demand for gold is surging:

Gold Bars Welcomed by Chinese consumers

China Daily, Beijing
Saturday, November 27, 2004

http://www.chinadaily.com.cn/e…-11/27/content_395351.htm

With more cash in their wallets, many Chinese are looking for ways to diversify their investments to guarantee the security of assets and to even seek a profit.

For many, gold seems to be the favored choice. The second batch of 2005 New Years Celebration Gold Bars have just gone on sale in Beijing and being warmly received by potential consumers.

Ranging from 50 to 1,000 grams, the gold bars are selling at 128 Yuan per gram, an increase of 3 Yuan compared with the first batch of bars that sold out quickly just a week ago.

Wang Chunli, general manager of Beijing Caibai Department Store, said, "The main reason for the increase in price is because the international gold price rose. Our price will move closely with the Chinese benchmark."

The international gold price has been on a up-trend recently. On November 25, the international gold price hit almost a 16-year high of 452.75 US dollars per ounce. But this small increase has not frightened consumers away.

Wang said, "The first 300 kilograms of gold bars sold out very quickly. The second batch is only 200 kilograms, but we've received orders of more than 1,000 kilograms. If it is possible, we will try every means to provide a big enough third batch to meet the demand, maybe another 300 kilograms."

The bullish price reflects a strong market demand. The enthusiastic public response is obviously very good news for gold producers. One industry organization profits for the year.

According to statistics of the China Gold Association, in the first three quarters of 2004, profits from its 300 member gold producers totaled more than 2 billion Yuan, or US$245 million, a jump of 35 percent year on year.

Gold output amounted to some 149 tons during this period, an increase of 7 percent. Total gold demand in 2004 is expected to rise to 220 tons from 207 last years.

-END-

More evidence of the lack of understanding what gold is all about as far as the US investing public is concerned. This is no accident. It is Gold Cartel related and leads credence to the notion of how little understanding there is.

Gold is on a tear, but where are investors?

Fri Nov 26, 7:14 AM ET

By John Waggoner, USA TODAY

Gold is having a party, but investors aren't coming.

Gold closed at $449 an ounce Wednesday, up 76% from its February 2001 low of $255. The yellow metal has gained 8% this year, vs. 6.3% for the Standard & Poor's 500-stock index. And gold funds, which invest mainly in gold-mining stocks, have been the top-performing mutual fund category the past five years, jumping 154%, vs. 11% for the average stock fund.

But investors have yawned.

• The U.S. Mint has sold 465,500 ounces of gold Eagle bullion coins this year, vs. 484,500 ounces last year.

• Investors have put just $396 million into gold mutual funds this year, less than 1% of the $139 billion that has poured into stock funds. New money into U.S. Global World Precious Metals, the top-performing stock mutual fund the past three years, has been "modest," says Frank Holmes, the fund's manager.

• Subscriptions to Gold Newsletter, among the oldest gold advisory publications, are about where they've been for 10 years, editor Brien Lundin says.

Gold prices have been pushed up by the dramatic fall in the dollar. Investors often view gold as a currency of last resort, a commodity that retains its worth even when paper money falls in value. The dollar hit a new low against the euro Wednesday, trading at $1.32 per euro.

But investors have been more interested in buying foreign currencies than gold. International income funds, which invest in foreign bonds, have raked in an estimated $2.4 billion this year. "We haven't seen broad public interest in gold yet," Lundin says.

Why not? Gold bullion can be cumbersome to store, and it pays no dividends or interest, as stocks and bonds do. Few corporate retirement plans offer gold funds, whose year-to-date returns are unimpressive: The average gold fund has lost about 2%.

Most important, many investors remember the last big increase in gold prices. Gold peaked at $850 an ounce in 1980 and is still well below those levels now. Anyone who bought gold as an inflation hedge in the 1980s is sitting on losses.

The past 15 years, gold funds have averaged just 2.7%, vs. 2.8% for inflation, according to Morningstar.

Such muted enthusiasm could mean that the bull market in gold is in its early stages, says James DiGeorgia, editor of Gold & Energy Advisor.

DiGeorgia thinks the weak dollar and soaring deficits could drive gold to $1,000 an ounce. "We're at the fulcrum of very interesting times," he says.

-END-

The commentary coming out on the dollar from all over the world is astoundingly ugly as far as the prospects for the dollar are concerned. You have to wonder what the surprise is? What could have been more obvious for so long than where the dollar was headed? The reason for articles such as these is simple:

PRICE ACTION MAKES MARKET COMMENTARY!

Greenback slide a 'time bomb'
November 28, 2004

Asian banks have racked up huge debt propping the $US, writes Richard Webb.

The plunging US dollar is potentially the most explosive situation seen on world financial markets since the technology bubble at the turn of the decade, economists have warned. It is developing into a $US1 trillion ($A1.3 trillion) time bomb.

That's the value of US debt Asian central banks hold after propping the greenback over the past two years. They have accumulated the debt by effectively lending money to the US to enable it to buy Asian imports and in doing so have funded more than 90 per cent of the US's ballooning trade deficit.

ANZ chief economist Saul Eslake says they have been running "the greatest vendor financing scheme the world has seen".

The problem is that the Bush Administration now appears intent on letting the greenback fall to solve the US's trade and budget deficit problems, as this is a far easier solution than the alternative of reducing budgets and lifting tax rates. The US wants Asia and Europe to take on the economic burden of its budget and trade problems through a higher euro and yen. But as the $US falls, the capital losses on this $US1 trillion of US debt held by the Asian central banks mount and at some stage these banks are likely to stop buying US debt and start selling. And none of them will want to be the last one out.

"At some point, the Asian central banks, who have almost single-handedly financed the massive US external deficit and propped up the $US, will get tired of doing so," Mr Eslake said. "The risk is that they are holding over $US1 trillion, and if the $US starts to fall they will suffer capital losses."

There were signs of this on Friday night when the euro hit a record high against the $US on a report that a Chinese central bank official had said his country had trimmed its holdings of US treasuries. This report was later denied but the $US finished 2.1 per cent lower for the week against the euro and 0.5 per cent down against the yen.

Bank of England chief economist Charles Bean warned on Friday night that international investors were unlikely to keep buying US assets indefinitely, resulting in a "possible substantial" drop in the $US, echoing similar comments from Federal Reserve chairman Alan Greenspan a week earlier. Currency traders predicted the $US selling will accelerate this week.

"What we are seeing now is far more than just speculation - these are real fundamental shifts in portfolio allocations from official and private entities, and that could continue and see the dollar selling accelerate," said Derek Halpenny, a currency strategist at the Bank of Tokyo-Mitsubishi in London.

-END-

US shopping news reports were mixed. Wal-Mart jolted Wall Street bulls, yet other reports were more positive:

Wal-Mart Sales Stoke Recovery Fears

By James Politi in New York
and Chris Giles in London
Financial Times, London
Sunday, November 28, 2004

http://news.ft.com/cms/s/40804…d9-9dd8-00000e2511c8.html

Worries about the sustainability of the US economic recovery were stoked on Sunday after the stores group Wal-Mart, seen as a bellwether for the country's retail sector, announced that sales had grown by only 0.7 percent in the year to November -- a much lower rate than the 2-4 percent increase Wal-Mart had estimated just 10 days ago.

The world's largest retailer revised its estimates down on Saturday evening after disappointing sales on "Black Friday," the day after Thanksgiving and traditionally one of the biggest shopping days in the US.

The retailer reported that sales had fallen "below plan" in the last week of November and sales growth was down on the 2.8 percent annual rate it had reported for October.

The weakness suffered by Wal-Mart, if reflected elsewhere, would add to concerns about the durability of the economic upturn. Any widespread reluctance by consumers to maintain their free and easy spending habits would slow the economy sharply…..

-END-

A break of 111 would case some serious technical deterioration in the US bond market:

December bonds
http://futures.tradingcharts.com/chart/TR/C4

Speaking of bonds, for the latest Bill Gross market comment, go to:

Click here: PIMCO Bonds - IO December 2004

CARTEL CAPITULATION WATCH

The DOW swooned early, but came back to close off only 45 to 10,476. The DOG rose again – this time to 2107, up 5.

Bonds hit a vacuum this morning and tanked. However, as has been the case for so long when it comes to the US financial markets, they hit a brick wall of buying and held their ground for the rest of the day. The 30-year finished at 111 ½, down 1 5/32.

What is going on here with the bonds, which have paid little attention to the sinking dollar to-date? My bet is the answer lies in is this comment from a recently circulated article by GATA’s Chris Powell:

"That remains to be seen. According to the most recent Treasury data, the biggest source of growth in securities came not from China, Japan or Europe but from Caribbean banking centers."

Caribbean banking centers? How about the Fed pulling a coy fast-one and propping up the bonds and doing what they can to make it look like the propping isn’t coming from our own US printing press?

John Brimelow Report

JB: India buying; US small specs shorting: Hmmmm

Monday, November 29, 2004

Contrary to conventional wisdom (but as anticipated here),World gold without Comex was buoyant on Thursday and Friday. The heavily-defended $450 level was overcome in early European trading on Thursday, running to $452; $455 was seen during the European morning on Friday and an attempt to close gold below $450 defeated.

Indian buying did not falter. Thursday ex-duty premiums: AM $7.01, PM $6.90, with world gold at $449.15 and $451.65. Ample for legal imports. Bombay bullion and FX markets were closed on Friday, but Monday’s ex-duty premiums are: AM $8.22, PM $8.46, with world gold at $450.25 and $450.65. Lavish for legal imports.

India’s ability to bid for world gold began to receive some help on Monday from the rupee. The Reserve Bank stood back and allowed the currency to breach $1 = R45 this afternoon: it closed at a 7 month high of 44.835 today and has subsequently firmed further. From a purely mechanical point of view, it is difficult to see world gold selling off, except fleetingly, with the world’s largest buyer, India, in the market right now and certain to step up purchases on any weakness.

MarketVane’s Bullish Consensus attained 80% on Wednesday, a level not seen since November 1. High – but it spent virtually all October in the 80s, cresting at 85% on October 25. Similarly Mark Hulbert’s Gold Newsletter Sentiment Indicator has reached a new recent high of 78.57, which however is well below historic peaks. See

http://cbs.marketwatch.com/new…E884%7D&siteid=mktw&dist=

TOCOM continues apparently very quiet and non-committal. Today volume was only equal to 14,067 Comex lots (down 23% from Friday). Open interest did rise the equivalent of 527 Comex contracts, and according to Mitsubishi the public added 4 ¼ tonnes to its long, bringing it to the equivalent of 28,213 Comex lots. The active contract slipped 1 yen and world gold stood at $451 at the close. (NY traded 210,108 lots on Wednesday, or about 50,000 lots net of switches. Open interest slipped 217 lots to 352,421, having plummeted a startling 18,148 on Tuesday.)

Somewhat disappointing to gold’s friends were the Japanese October gold import data: only 4.26 tonnes, down 31% from September and 28% from the year before. This suggests the divergence between physical buying and futures liquidation in Japan remains quite modest. More encouragingly, a series of stories from China indicate that a small offering of bullion coins (priced at an unkindly $30 premium above spot) have sold out quickly. The most encouraging aspect of these stories is their underlining how difficult it still is for the Chinese public to access reasonably priced bullion. This may possibly be a part of the reason for the sluggish growth in gold consumption there over the past decade. See

http://www.chinadaily.com.cn/e…-11/27/content_395351.htm

Far from being a respite, the last few days have been tough for the Bears: macro economic tides seem set against them, and the main physical buyer appears to be receiving special help. They have some discouraging company too: according to this afternoon’s CFTC data small specs increased their net short position for the 4th straight week, by 1,912 lots to 38,198 (118.8 tonnes).

JB