Iran & Gold

Gold continues to de-link from the U.S. dollar & follow its own path & that path is higher. Read very carefully the following text below as Peter Schiff does a most excellent job relating the significant & historical events happening in the gold market today. And don’t go to sleep reading this either as there might be a test on this later to see if you get it.

“After years of trading in the euro's shadow, this week gold finally reclaimed its role as the safe haven of choice. In the last three weeks, Gold has risen against all three of the world's major currencies, reaching a new all-time high of 360 per ounce against the euro, and 47,800 per ounce against the yen, a fourteen-year high.” “The fact that gold's strength comes not as a result of weakness in the dollar, but of weakness in the euro, suggests that in the minds of many, the euro has already replaced the dollar as the reserve currency of choice.” “During the past several years, gold's price only rose relative to the weakening dollar. However, it did not rise against most other currencies. That is because money fleeing the risky dollar sought safety in the euro. As a result, gold never actually rallied, even though from a U.S. dollar perspective it appeared as if it had.” “However, now that fears have emerged with regard to the euro, safe haven money is going into gold. That is why over the past several weeks, the price of gold has risen sharply in terms of all currencies. In other words, this is a legitimate gold rally, not simply a dollar decline.” “…if the ECB, like the Fed, pulls its punches, nothing will stop gold's rise, and both the dollar and the euro will likely go down for the count.” Peter D. Schiff, President/Chief Global Strategist, Euro Pacific Capital, Inc, 6-17-2005

"Words are like seeds. They have creative power. When we speak something out we give life to what we're saying." Joel Osteen, 5-2-2004

The following below are more interesting observations from a reader on the gold/euro relationship.

“There are also interesting ramifications for the EuroZone developing. The decline in the Euro has caused the price of oil to jump dramatically over the past two months as well as the price of commodities sought by them. What does this all mean that no one is paying attention to? For the first time in several years the EuroZone will now be experiencing INFLATION! They, like us, will now have to look at raising rates to combat inflation even though their economy isn't faring well. These higher rates only portend lower equity and bond prices looking forward. This time the declines will be seen globally. The Fed will have to induce more and more liquidity to keep prices from collapsing only fueling inflation and deflating the dollar.” “You've probably read that the price of gold has risen this week to all-time highs against the Euro to $357 today. This is very significant for gold. It's the first time that gold is attracting investment demand in Europe. This hasn't been the case over the last three years. The whole scheme of things is changing for gold.”

And not everyone is buying the illusion that this housing bubble is simply a normal result of naturally rising housing costs. The following email is from Roger Mason. Roger is a nationally known author & lecturer. He’s heard on 1,400 radio stations & appears on TV advocating natural cures for illness. Roger may not be an expert on the housing market, but he knows his prostate.

“Almost no one listens to me when I tell them we're in a housing bubble or they think they can merely sell out "if" the prices ever start to fall. This is just the same old crap that went on five years ago with the stock market. You tried to tell your friends they were in a bubble and they all thought you were the fool for not being in it with them. We are 100% (and I mean 100%) invested in gold and silver in some form.” “…we'll pick up any real estate we want at a quarter on the dollar in a few years…”

Jim Sinclair also believes the real estate bubble has reached its apex & is soon to pop.

“What party ever went on forever? This one ends as soon as zero down payments and appraisers over valuation of property values come to an end. I suggest that will happen this year not next. It does not have as much to do with the interest rate existing right now. The

home consumer only cares about upgrading, without paying for the pleasure. As long as the

consumer can get bigger and better without actually writing a check, the debt burden is something to worry about tomorrow. Tomorrow will come and it will likely be this year!” Jim Sinclair, 6-17-2005

“This year, only about $80 billion, or 1 percent, of mortgage debt will switch to an adjustable rate based largely on prevailing interest rates, according to an analysis by Deutsche Bank in New York. Next year (2006), some $300 billion of mortgage debt will be similarly adjusted.” “But in 2007, the portion will soar, with $1 trillion of the nation's mortgage debt - or about 12 percent of it - switching to adjustable payments, according to the analysis. The 2007 adjustments will almost certainly be the largest such turnover that has ever occurred.” By David Leonhardt & Motoko Rich, The Trillion-Dollar Bet, 6-16-2005

“During the first quarter of 2005, 40% of mortgages over $360,000 issued to people with good credit were option ARM's.” “Very few borrowers used option ARM's before 2003.” David Liu, mortgage strategy analyst w/ UBS New York

Last Saturday we had a sod laying party at our church. What is sod? Knew you would ask. Sod is simply grass turf & the part of the soil beneath it held together by the roots & cut in blocks for ease of installation. Our church had cut a new road & entrance into the church grounds & to cover the new barren ground 5 tractor trailer truck loads of sod was brought in.

The church made the sod laying a church work day & volunteers came out on Saturday to lay the grass down. Over 200 folks of all ages & backgrounds showed up - literally a cross section of the entire church. Senior citizens close to 80, little kids 10 years old, mothers & their daughters. With the number of folks that came it only took maybe an hour to lay down the 5 truck loads of grass.

Anyway, long story made short, before I bore you to death, I always take these opportunities to talk to folks to get their personal picture of today’s economy & particularly their thoughts of the real estate bubble. What real estate bubble I am told? It really amazes me that, for the most part, the average middle class Joe & Jane doesn’t even comprehend that a housing “bubble” is in progress. In their humble & uninformed opinions higher real estate prices are just a reflection of a growing population or the desire for Californians to begin moving east.

But the point is that most middle class folks today are totally convinced that we have entered a new economic era where we are going to continue to see exorbitantly higher real estate prices for years to come.

And if so who needs to save money or be involved in any kind of investment plan anymore since all you have to do is just sit back & watch the price of your home climb to a fortune by the time you retire. Then simply tap into that line of equity credit & sit on easy street. And by the time that line of equity credit is spent your house will have appreciated again. Yes, people really believe this today. They believe that they now have a money tree in the form of their home.

And I personally give this real estate bubble less than one more year to finally break. What do I base this prediction on? Gut instinct primarily but knowledge also that all those new condos being built today are going to really start flooding & saturating the market in another six months or so. For all the speculative condos & developments being built across the nation today there just are not going to be enough buyers to absorb the buying.

Well, are you ready to pack your sons & daughters bags to travel overseas to fight in

Iran

“WASHINGTON (Reuters) - President Bush on Thursday challenged the legitimacy of

Iran

's presidential election on the eve of the vote, accusing the country's leaders of extending their "oppressive record" by blocking reformists from running and jailing dissenters.” “The statement amounted to a preemptive

U.S.

challenge to the legitimacy of Friday's vote and appeared designed to encourage internal dissent and increase international pressure.” “…Bush said "

America

believes in the right of the Iranian people to make their own decisions and determine their own future," he added: "To the Iranian people, I say: 'As you stand for your own liberty, the people of

America

stand with you."' By Adam Entous, Washington Post, Reuters, 6-16-2005

"As a tide of freedom sweeps this region, it will also come eventually to

Iran

." “Though Bush has not ruled out taking military action…” "

America

believes in the independence and territorial integrity of

Iran

." By Adam Entous, Washington Post, Reuters, 6-16-2005

Let’s never forget that the primary reason President Bush has sent US forces into Iraq & the Middle East in general is to CONTROL the flow of oil. And because of that real & important reason you will never see US military forces departing from that region. You don’t believe me? Listen to what George said just this last week.

“No

U.S.

Troop Withdrawal Date Is Set” “…Bush said it is premature to judge how many

U.S.

men and women will be needed to defeat the insurgency and plant a new and sustainable government. He also declined to pledge to significantly reduce

U.S.

troop levels before the end of his second term in January 2009.” By Jim VandeHei and Michael A. Fletcher, Washington Post Staff Writers, 6-16-2005

And what, perhaps, is behind this present smoke screen that could be the real reasons for a U.S. lead invasion against Iran?

“One of the Federal Reserve’s nightmares may begin to unfold in 2005 or 2006, when it appears international buyers will have a choice of buying a barrel of oil for $50 dollars on the NYMEX and IPE - or purchase a barrel of oil for €37 - €40 euros via the Iranian Bourse.” By William Clark, globalresearch.ca, 10-27-2004

“Bush has said that

Iran

is part of an "axis of evil," and it seems unlikely that he will do nothing during his last four years in office while insisting the nation is at war. Presidential approval ratings rise whenever the

USA

attacks another nation. Combat video can fill television screens and distract the American people from a dying economy and the problems in

Iraq

. Congressmen can excitedly plan another massive supplemental spending bill, and drop the issue of fiscal discipline and pending national bankruptcy.” The Magazine of Future Warfare, 2005

Already there is speculation that some of the key players on the world stage – Brazil, France, Germany, Russia & Venezuela - are working on a contingency plan should Iran be bombed in an unprovoked act of aggression & even China has recently gotten in on the controversy & established closer political ties with Iran.

China

Rocks the Geopolitical Boat with

Iran

Oil Deal" Asia Times 12-2-2004

But now let’s get to what really is important & has an affect on world economics, & most importantly –

U.S.

policy. If the world’s major oil producers convert from the dollar to the euro then the American economy will suffer immediately. And it looks as if

Iran

is soon to switch to the Euro for international oil transactions.

“The Iranians are about to commit an "offence" far greater than Saddam Hussein's conversion to the euro of Iraq’s oil exports in the fall of 2000. Numerous articles have revealed Pentagon planning for operations against

Iran

as early as 2005. While the publicly stated reasons will be over Iran's nuclear ambitions, there are unspoken macroeconomic drivers explaining the Real Reasons regarding the 2nd stage of petrodollar warfare - Iran's upcoming euro-based oil Bourse.” By William Clark, globalresearch.ca, 10-27-2004

And when oil is traded primarily in euros then central banks around the world would be forced to follow and America will be expected to pay off its enormous $8 trillion dollar debt. Recently, a report indicates that two-thirds of the world's 65 central banks have already begun to recommend moving from dollars to euros.

“Iran's proposal to receive payments for crude oil sales to Europe in euros instead of U.S. dollars is based primarily on economics, Iranian and industry sources said. But politics are still likely to be a factor in any decision, they said, as

Iran

uses the opportunity to hit back at the

U.S.

government, which recently labeled it part of an "axis of evil." The proposal, which is now being reviewed by the Central Bank of

Iran

, is likely to be approved…” “Iranian sources say the Bank of

Iran

has been putting increasing pressure on

Iran

's oil ministry during recent weeks to implement the currency change so as to avoid losses as the value of the dollar declines.”

Iran

Expert.com, Dow Jones, 8-23-2004

Iran

made an announcement tomorrow that it was going to begin trading oil for Euros then a possibility of an attack increases a hundred fold. There's only one thing that the present administration can do to ensure that the world continues to trade U.S. dollars for oil & that is to control the flow of oil. And that perhaps is the reason an attack on

Iran

is a very strong possibility.

“Investigative journalist Seymour Hersh reported in The New Yorker magazine this week that the Pentagon has already secretly sent in forces to

Iran

to identify possible future military targets. In the article, titled “The Coming Wars: What the Pentagon Can Now Do in Secret,” Hersh wrote that he had been repeatedly told by intelligence and military officials, on condition of anonymity that "the next strategic target was

Iran

." “…President Bush, when asked by NBC’s David Gregory whether he would rule out military action against

Iran

, said: “I hope we can solve it diplomatically, but I will never take any option off the table.” By Amy Goodman, Democracy Now!, 1-19-2005, alternet.org

Can you even begin to imagine the repercussions should Iran begin to trade their oil in Euros? Let’s listen to what else William Clark has to report.

“In 2005-2006, The Tehran government has developed a plan to begin competing with New York's NYMEX & London's IPE with respect to international oil trades - using a euro-denominated international oil-trading mechanism. This means that without some form of

intervention, the euro is going to establish a firm foothold in the international oil trade. Given

U.S.

debt levels and the stated neoconservative project for

U.S.

global domination, Tehran's objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market.” By William Clark, globalresearch.ca, 10-27-2004

“A successful Iranian bourse would solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency.” By William Clark, globalresearch.ca, 10-27-2004

The U.S. dollar's status as the world's reserve currency is coming to a close. What will this mean? After a nation is successfully driven to bankruptcy public policy decisions are then made by creditors & foreign bankers. Do Americans really not see this coming?

"NEWSWEEK has learned that the CIA and DIA have war-gamed the likely consequences of a

U.S.

pre-emptive strike on

Iran

's nuclear facilities. No one liked the outcome. As an Air Force source tells it, "The war games were unsuccessful at preventing the conflict from escalating." By William Clark, globalresearch.ca, 10-27-2004

Now honestly tell me that after reading this news & its implications concerning Middle East volatility you still do not believe in gold’s growing importance & role as an international currency? Is the gold bull really at present picking up steam?

“The move toward gold by the big guns has started. The shorts are cunningly trying to cover. It is only six short months until 2006 is upon us. In my opinion, 2006 to 2008 will be our best years ever. Wait until 1/1/06 and you will find you are much too late.” “The establishment interest has started.” Jim Sinclair, 6-17-2005

"The fact that this is the first major commodities conference in Asia (Commodity Investment World Asia 2005) means the public is just beginning to look at this asset class and it still has a long way to go." "Share prices of oil, copper and gold are likely to remain strong for a long time…” Jim Rogers

Gold Letter is a review of gold & silver companies. Our goal is to provide a brief review of those gold & silver companies considered to represent respectable & excellent speculations.

June 24, 2005

BIO: What sector of the market does well when everything else is crashing? When markets begin to implode investors eventually trust only in - GOLD! Through the darkest days of gold's demise during the latter 1990's I simply refused to give up on gold & throw in the towel. THE RACE OF LIFE IS NOT WON BY THE SWIFTEST RUNNER, BUT IS WON BY THE INDIVIDUAL WHO PERSEVERES. When I first began following this sector I quickly observed that the gold market had come to represent primarily a very tight small click of well healed insiders & financial professionals. And in my opinion hardly anyone was taking the message of gold to the average investor on the street. It is my continuing goal to see gold’s message brought before the masses & to help provide a conduit for that voice. And what is more important than gold? Our families should always remain a greater priority than gold or any measure of wealth.

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