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-- Posted Tuesday, 18 November 2003 | Digg This Article
November 17 - Gold $390.80 down $6.50 - Silver $5.22 down 17 cents Samuel Adams advised: "It does not take a majority to prevail .... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."
If there ever was a day for gold to explode, it was today. Which is, of course, the very reason The Gold Cartel smashed it lower. The Nikkei astonished by dropping 380 lower to 9786. It is the second 300+ point break in two weeks. The situation in Iraq is a disaster with more soldiers killed this past Saturday than on any other day in the war. The euro was higher this morning and European stocks were all under pressure. If gold were freely traded, this would be a scenario that would have sent gold scurrying above $400. However with The Gold Cartel and friends short massive amounts of December options above $400, the crooks decided there was no way they were going to allow the longs to make money fairly on their reasonable speculations. The tone for today’s Comex annihilation was set last evening. Two Café members saw the early action this way: Gold touched 399.90 and the Euro was bid sharply higher.
Euro sinks, yen gets clobbered by BOJ, Aussie drops hard, and Cando down. Euro still up slightly - gold bopped back down to steady. this is going to be the big one this week and these guys know it Bill. We are taking out $400 within the next couple of days.
Dan Bill,
Last night I was watching the Comex Access price action. After the market hit a high of $399.9 in the 1st minutes of trading, the Cabal went into action. There were over 1,000 contracts sold in blocks of 100 or more in the 1st half-hour of trading. The selling appeared to put a cap on the market as it was obvious they are defending a break above the $400 level.
JC After all these years, it is sickening to watch these bums take gold down like this in a concerted fashion. What an outrage it is for Treasury Secretary Snow to go around the world and berate the Chinese for "manipulating" their currency. At the same time the US is "rigging" the gold price to suit its own needs, to the detriment of all the poor sub-Saharan gold producing countries, much less law abiding world gold investors. The average American has no clue why we are hated around the world. This is why: we speak with forked tongue. We preach one thing and do another. This hypocrisy is noted by citizens all over the globe. Americans don’t hear about it much because the US press won’t report it. What is important to note is that it is not the average American these people hate. It is The Gold Cartel. It is Wall Street, the bullion banks and the US Government. Americans are at least getting a whiff of what really goes on in Wall Street and Washington with the mutual fund and brokerage house scandals. We are talking about one big sewer. From Enron to Putnam, has the situation improved over the past two years? Heck no, it seems to be getting worse - from the obscene $188 million the NYSE chairman Dick Grasso made to the slap on the wrist Putnam just received from the wimpish SEC. New York Attorney General Elliott Spitzer is outraged as all US citizens should be. America has lost its way. We are fighting a war with brave soldiers dying for reasons that were proved invalid. When you discuss markets, you have to deal with Iraq these days because it is blowing up. It is going to have a profoundly negative effect on US financial markets in the months ahead. We asked other nations to help fund the war and send in troops. They answer back by asking if we are nuts. Now we are instructing the Iraqis to get their new government cooking by summer when they can’t even get council members to attend meetings. It reminds me of the Arab gatherings in Lawrence of Arabia. We are now supposedly fighting for democracy in the Middle East. Does that mean the Shia’s rule because they are the majority? Are we for another Muslim-run state? What about democracy in Egypt, Pakistan, Jordon, Syria, Iran, and Saudi Arabia? The average American is not without blame, however. There isn’t a CEO in the world who would have been allowed to retain his job if he were caught doing what Bill Clinton did in the oval office with Ms. Lewinsky. Not one! Yet, he was allowed to stay in office because the economy and stock market were rolling along – even if it were a contrived bubble which would not last. Americans didn’t want to "rock their financial boat." There has been only a modicum of outrage about the Wall Street financial market scandals these past MANY months. That’s because the stock market has been roaring ahead. Same reason Clinton was allowed to stay in office. Right or wrong is not the issue the way it used to be. It’s about everyone’s investments. It’s going to take a stock market collapse for serious investor outrage to emerge – a collapse for there to be any serious changes in the way Wall Street conducts its business. Only when the public loses their hard-earned money will they be outraged. Pretty sad. Spitzer will have all sorts of company. By then it will be too late for US investors. Now that I got that off my chest, back to gold. The more bullish the gold scenario is, the greater the effort by the criminals to take gold down. It is always at the point gold is ready to bolt sky high when The Gold Cartel knocks gold lower with a vengeance. Nothing is more important to them now than defending $400 to protect their option positions. Secondly, a $400 close would create worldwide financial market press, press that would bring in more demand for gold, making their desperate dilemma even worse. While there is a $6 rule on the upside, no such thing on the downside. Gold was hit for $12 at one point (although, ironically, gold did close $6+ lower). The gold press will tell you it was enormous fund selling. Sure, after the cabal sold and sold last night and again today to turn the funds sellers. That’s after Thursday and Friday when Goldman Sachs, Deutsche Bank and Morgan Stanley capped gold, waiting for their signal to attack today. It’s always the same modus operandi, over and over. The good news was the way gold stormed back, climbing almost $6 off its lows. That is not a sign of a market in trouble, but a market that was forced lower. Sort of like trying to suppress a beach ball below the water. Time and time again Gold Cartel forces have done all they could the past many months to force gold down and it hasn’t worked. The physical market is just too strong. On that note I was informed this afternoon The Stalker HAS NOT completed his $1.8 billion bullion order yet. Perhaps it was The Stalker who drove gold up sharply off its lows? We should see big open interest liquidation after today’s killing. Friday it rose 5954 contracts to 293,830, almost the same number the last time the cabal took gold sharply lower. Silver was hit for 28 cents at one point. The silver open interest rose 4631 contracts on Friday to 111,762. Of note is the December contract rose a surprising 2993 contracts with only a little more than a week to go before it goes into first notice day. Is someone planning on taking delivery of large amounts of silver? Normally new buyers would go after the March silver contract, especially with such a small contango. The dollar only rose .07 to 91.67, while the euro only dropped .09 to 115.50. ONCE AGAIN we see how the gold market is mostly about a surging physical market versus the corrupt forces of The Gold Cartel. The dollar is a secondary issue. The John Brimelow Report Monday, November 17, 2003 Indian ex-duty premiums AM $2.18, PM $2.79, with world gold at $397.25 and $398.20. Somewhat below legal import point. This is basis Bombay – some of the other cities are a little weaker. Reuters this morning carries a story dead lined Ahmedabad – sometimes the second importing city - , dwelling on the high rate of scrap and old jewellery being recycled, as is to be expected when prices rise so abruptly. After quoting "traders" completely mis-stating the domestic price of gold compared with the prices published today, it concludes: "Indian traders expect the demand for gold to increase when the prices stabilize around $380 to $385."Now that people have seen higher range, I think there will be buying when the prices fall by $10 to 20," a Bombay-based dealer said". The Istanbul Gold Exchange weekly bulletin, appearing today after a week’s absence, reports imports into Turkey last week of 2.1 tonnes, 44% of the year to date average, but rather high considering prices last week. Gold of course launched yet another spirited to clear $400 early this morning in Asia, with spot reaching $399.50. But, UBS notes: "decent offers were noted on Access and this capped any move higher." or, in Mitsui-H.K.’s words: "resting selling orders thwarted further advance just ahead of 400" (Access of course is the Comex after hours conduit.) This activity echoed on TOCOM – volume tripled (+ 194%) to the equivalent of 65,031 Comex lots, but open interest actually slipped by 805 Comex equivalent lots to equal 134,928 contracts. The public apparently liquidated and then bought some back as the yen weakened: the active contract closed up 20 yen to the highest for 7 weeks, and world gold was $396.40 at the end, 85c below NY. Some serious forces were active in gold in Asia this morning; but they did not originate in Japan. (NY on Friday traded 88,468 lots. Open interest rose a significant 6,054 lots to 293,950.) In essence, early today duplicated the experience of Friday, with a powerful effort to break through $400 blocked by immense selling – Comex last week added 13.4% to open interest, equivalent to 3.47Mm ozs! Obviously, no proceeds-maximizing seller would strive so hard to stop a dramatic development which even excited the veteran observer James Turk to suggest a quantum leap in price was imminent. See http://goldmoney.com/en/commentary.php#current Indeed, it is questionable whether the much discussed option position really warrants such a furious defense. Despite the moderately successful counter attack mounted by the Bears today, during the technically-convenient NY trading day, they are still hard-pressed. The Australian Commentator The Privateer (http://www.the-privateer.com/g-charts.html ) updated its impressive $US 5x3 Point and Figure chart this weekend. It focuses on gold’s breakout above the post 1980 down trend line. They comment: "Here are the important technical developments from when we featured this chart only one week ago: - Last week, the chart showed a potential double top. We are NOT going to get that double top now.
- Last week, we merely had a distribution zone ABOVE the most senior downtrend line on the chart. Now, we have a breakout ABOVE that distribution zone
- New 2003 highs are coming much more rapidly and corrections are much shallower.
- It took Gold more than eight months to decisively beat its February 4 high of $US 379.
- Gold hit a new high of $US 387.50 on Sept. 24. It took only a month, until Oct. 24, to beat that one.
- It has taken Gold less than three weeks, until Nov. 12, to beat that Oct. 24 high.
- All that remains is for Gold to take out $US 400 on a spot future closing basis"
From a fundamental point of view, Bridgewater’s Friday "Daily Observations" was memorable: "We are now 21 months and 12% off the peak in the dollar, but we are still probably early in the dollar sell-off. To put the dollar decline in perspective, we have examined 25 major multi-year tops in developed market exchange rates. A typical decline from a multi-year peak in an exchange rate is about 25% and lasts about 48 months…the dollar decline is likely to be at least of average magnitude and potentially much larger. In other words, we think we are at most only half way into the bear market in the dollar." "We still do not think it is likely that the US will be able to attract the funds necessary to finance its record deficit at the current dollar level…only major interventions from Asian central banks are preventing the dollar from collapsing completely…We believe we are close to the precipice." (JB emphasis) JB John noted late the estimated volume was 85,000 - 20,000 in last half hour and 41,000 in last 1 ½ hrs as a staunch rally was underway.
CARTEL CAPITULATION WATCH SICKENING is the only way I can describe the DOW’s late day comeback. It has been this way all year. Always late-day comebacks. After other markets were trounced around the world for 1 to 4% losses, the DOW roared back to close at 9710, down a piddly 58. The DOG sank 21 to 1910, but it closed well above key support at 1900. At one point the DOW was down over 135 and the DOG broke 1895. SICKENING because all the US markets are managed and it is all going to blow up one day and hurt America badly. It will be terrifying. The US stock market is rigged via the repos and S&P futures operations. The US bond market is rigged via giant put operations and other Fed/Treasury shenanigans. And, of course, the gold price is blatantly rigged via coordinated bullion dealer/ESF sales operations. The Japanese openly admit to rigging their stock market and it still gets creamed from time to time. Not the US market anymore. The Working Group on Financial Markets fears if the US investing public flees the stock market, it could impact the US economy very negatively. Thus, they keep bolstering it to avoid any potential panic selling. I have had some fun with the 100 rule in the DOW. Seems to be that way. Once it breaks 100, it steadies and either rallies or doesn’t go down any further. That level might be 120 or 130, but we seem to see the same late trading pattern time and time again. Free trading markets don’t always repeat themselves this way. Sometime ago I noted how poorly GE was acting and it would break down technically if it took out $27.50. It did early today, sinking to $27.37, but roared back to finish at $27.81. How quaint! The largest cap stocks in the US, GE and Microsoft, both still look lousy technically. GE is of special interest because it is laden with derivatives. Keep your eye on that bellwether stock. The Nikkei has been ravaged of late. Will the DOW follow despite the machinations of the price managers? Bill,
I have brought the very close Nikkei N225 and DJIA correlation to your attention before. Attached is the % change of the DJIA and the N225 over 2 years. They follow each other amazingly closely. Most people would think that the Japanese market is behaving totally differently from the American stock market because the Japanese have been in a recession for the best part of 20 years. In the last 2 years the correlation however is astonishing.
This brings up an interesting observation right now because the N225 has dropped almost 10% in the last few weeks and is plunging below 10,000 as I write this. The Dow is topping. Will the correlation hold up and the DJIA plunge also??
Food for thought.
Cheers
Adrian GATA’s Mike Bolser: Hi Bill:
The Fed added a largish $16 Billion against a $7.75 billion expiration. This action raised the pool level to $39.28 Billion. This produced a noticeable spike up in the repo dad-to-day recording but only move the 30-day ma slightly up while still retaining its downward trajectory.
The fed is clever in its open market operations to give the impression of randomness. Only by examining the moving averages can one glean the Fed's true intentions. The trading programs needed to implement this false open market randomness are complex and need to be adjusted as conditions change.
Gold market "randomness"
Evidence of the same kind of false randomness can been seen in the odd trading behavior of the daily COMEX gold patterns. During the late 1990s preemptive selling was the mother of all false trading schemes and now it appears that set gold price closing levels are again being established, not necessarily linked to speculator stop positions....all for the purpose of appearing random. (Note: Once the pattern of preemptive selling was detected and published in 2000 by the writer, the person responsible for its implementation [Dinsa Mehta, JP Morgan Chase] mysteriously retired).
I attach a long-term chart of the DIVG with 200-day and 100-day moving averages to illustrate the smooth moving average results. It seems as if the Fed may be controlling these moving averages just as it controls the moving averages of the DOW by adjusting the MA of the repo pool. The vertical axis of the lower chart has been exaggerated to better reveal the moving averages of the DIVG and EVIG.
While this view of DIVG moving averages is preliminary, we see that the recent down pressure from the Fed was more quickly applied and showed up as a wrinkle in the 100-day ma (red). This wrinkle may tell us that the Fed has been forced to bring up unexpected reserves in the gold war.
Mike 
Mike predicted the DOW would BE TAKEN DOWN to 2650. It hit 2640 this afternoon. Nice call, Mike. More on the repo action from Jesse:
http://www.ny.frb.org/markets/omo/dmm/temp.cfm The Fed added 4 Billion in a 52-day repo already this morning. That's an odd length of time. I imagine its because it takes the expiration date to January 8th.
Also notable was that the bidders had asked for over 57 Billion! The Fed used a stop out rate of 1 percent, but they were bidding all the way down to .95%. Looks like the kiddies have an ambitious list of toys they want from Santa Greenie this year. Cheap money, and lots of it.
Jesse Chuck checks in: Just a few reflections about today's markets. Coming on the heels of some pretty steep sell offs, the stock market moved down accordingly to a drop of over 140 points at one juncture. But what Bill and others have persistently pointed out, the "invisible hand" magically appeared and like Superman in the movies saved the day right at the bottom. I think that these folks see themselves as "superheroes" also, so that the poor investors never have to worry about their holdings. We can all sleep knowing that markets no longer can go against us. This is the ultimate comfort. In the other side of town, gold run into the same crowd or perhaps, their international cousins who bought the dollar forcefully, thereby saying by-bye to the hope that we might see $400 today. I can just hear them crowing, "take that!" At one time we were down around $11 but then perhaps they got tired or ran out of ammo, and the metal and the stocks started to also recover. I see this no differently that the countless other times when gold was punished in a selling and capping frenzy. The shares continue to show resiliency and high volume. Today what was different was that some of the smaller companies actually had good days. This was different and shows that the trend is firmly up notwithstanding the emotional tone that accompanies the gold market. It is a hated enemy of the political, banking and paper crowd, for it says that you can't play your filthy and corrupt games forever. Expect to see some unreal scandals soon. The top of Pandora's box is off, and there are going to be a lot of angry investors and some muckraking journalists who want to get to the bottom of why these elite can get away with this illegal stuff and then pay a parking meter fine to get off the hook. There are going to be some very ugly days in court coming up soon. Chuck On the gold leasing issue:
Hi guys: I think the fractional reserve leasing scam is just about at an end. Look at one month gold LRs. .02% may be as close to zero as one can get. In a very real sense, you can borrow gold for free. Mind you, gold has risen 21% since the beginning of the year, so the real cost of borrowing (assuming the present rise in gold prices continues) is 21% PLUS .02%. Would you borrow anything at 21.02% rates? This may explain the extremely low LRs for gold. The only people foolish enough to borrow metal at these rates would be jewelry fabricators who routinely mark up their product 100% before passing it on to retailers. In western jewelry markets, the retail price of gold is 800 to 1200% the metal content. With mark ups like this, the trade may still be leasing. This most recent decline in one month leases may mean that the investment banking speculator (CABAL) member may have chickened out of leasing as a source of metal. For you silver bugs, the silver LRs are also very low, indicating severe risk in borrowing that metal as well, but is this also a measure of the relative supply fundamentals? Silver lease rates are 13.5 times higher than gold. Does this suggest that silver is 13.5 times more scarce? Actually, if one takes Ted Butlers' estimate of total world silver stockpiles of 150 Moz and compare that with world gold stockpiles of 2 billion oz, then we have exactly 13.3 times more gold than silver. This is about the same as the lease rate ratio of silver to gold. Coincidence? In any case, my world view has been shaken to its foundation. I always thought that a gold or silver bull would be characterized by lease rates that went through the roof. The opposite has happened. Does this mean that we are NOT in a gold/silver bull, or does it mean that my understanding of the way the leasing market and the gold market interact has been incorrect? Or is it all too early in the bull for my to start throwing out bath water with or without baby? Here goes: Leasing is a mechanism to control spot prices, meaning hold them down. If that is true, then while leasing was doing the job, LRs would spike at times that the PTB were having difficulty controlling the price. We saw this with the Buffett spike of 1998-99. But what if the PTB recognize that they have lost control? Wouldn't the minions of the Monetary Interests curtail their leasing activities if the metal prices were about to explode????? This lack of demand for leased metal would cause the rates to implode. Just like now. Now we get to the part I don't understand. What has happened to the lease overhang????? If there exists a 1 billion ounce silver lease overhang how do the shorts who have borrowed this mass of silver roll over their leases now that silver stocks are almost dry without blowing up lease rates???? Have these guys managed to buy one billion ounces of silver unnoticed, and covered their shorts by returning their leased metal? Or, have these guys had their leases forgiven, or a cash settlement taken in lieu of metal. (not that I care as the metal is still gone forever). Could it be that the reason lease rates have imploded for both gold and silver is because low roll-over rates are NECESSARY to finance this volume of metal debt lest defaults begin. After all this is what is happening right now in the paper financial sector of the US, with Prime lending rates at 1%, and consumer debt at all time highs. As you can see, I have ten questions forevery answer, and even the answers may be wrong.
Regards, Rhody. Wall Street needs 50 Elliot Spitzers: November 16, 2003 He's the Go-To Guy for Fund InvestigatorsBy DIANA B. HENRIQUES A day in late July, the telephone rang in the office of Eric Zitzewitz, a 32-year-old assistant professor of strategic management at the Stanford Graduate School of Business. He was busy. A bit distracted, he picked up the phone. The caller was David D. Brown IV, a former lawyer at Goldman Sachs who had just started working for Eliot Spitzer, the New York attorney general. Mr. Brown was investigating improper trading practices in the mutual fund industry and had come across a provocative two-year-old paper by Professor Zitzewitz. It quantified the financial damage that some of these trading practices were inflicting on long-term fund investors - damages that he estimated at almost $5 billion a year. That short conversation was the prologue to what is turning out to be the most extraordinary year of Professor Zitzewitz's career. The investigation has ripened into a harvest of shame for the mutual fund industry. After his research was cited on Sept. 3 at Mr. Spitzer's first news conference on the mutual fund investigation, Professor Zitzewitz was thrust into the spotlight. He has been summoned for Congressional testimony, quizzed by reporters, consulted by regulators and investigators, and attacked by industry economists who say he is overstating the damages and understating the difficulties of preventing the abuses…. -END- Only $5 billion a year in this scandalous mutual fund practice alone! Houston’s Dan Norcini comments on the bond market and responds to colleague Mike Bolser about long-term US interest rates: Bill:
Looks like open interest increased on both the 10 year and the long bond. If there was any short covering, it was replaced by new buying that originated from somewhere. I find it difficult to believe that bond traders are not seeing what we are seeing. I still think we are seeing a foray into the bond pit by the ESF. Seems like it has been the Fed's St. Louis Governor, Poole, who has been doing the jawboning this time around. Now he claims the Fed can keep short term rates low "well beyond March." What people need to keep in mind is that the Fed has control over the short end of the yield curve only - it is the market that sets the longer term rates. All the Fed can do to affect the long end is to huff and puff and threaten to blow the house down. More empty braggadocio. Remember the so-called "Greenspan put" that fell apart when the bond traders discovered that the Fed's empty bluster behind their claim to buy as much as was needed to prevent long term rates from rising was nothing but hot air? What the Fed is trying to do is to play this same cat and mouse game again and scare the bond traders on the longer end into buying and covering their short positions. All this is to keep those rates low and not derail the home buying market and the re-fi business. It is all a game that is going to end very badly. Fool me once, shame on you - fool me twice, shame on me! Rising gold prices and CRB index and a sinking dollar , a widening trade deficit and out of control federal spending and budget deficits is not going unnoticed by foreign bond holders. Note carefully Mike the two sections underlined in red. I maintain and still do that the price action in the bond pit is a result of ESF intervention. There is no other way to explain it. But I also used the word "SET" in regards to long term interest rates. The Fed cannot "SET" those any more than the Bank of Japan can "SET" the value of the yen against the dollar. That does not mean that the Bank of Japan is not going to intervene in the forex market and attempt to stem the yen's rise. It also does not mean that the monetary authorities in Japan will not attempt to jawbone the yen or huff and puff so as to intimidate yen buyers. They can affect , they can influence, but they cannot set that value - only the market can do that. That is exactly the same principle with the long bond. The Fed, via the ESF can affect and attempt to influence, but cannot "SET" long term rates. Do you think that the Fed is big enough to take on the supply of offerings that would hit the market should Japan, China and Saudi Arabia dump U.S. Bonds in favor of Euro bonds or gold? We are talking about sums of money that are almost inconceivable. Think back to the blood bath in the bond pit earlier this year when mortgage hedgers realized that they had been tricked by the Fed and were forced to unload their long hedges. The resulting carnage is stil being felt out in bond land. Where was the Fed then? I will tell you where they were - they were completely overrun by the sheer size and scope of the offerings. The bond market is not the tiny playground that the stock indexes comprise. Just imagine the size of the domestic mortage industry and try to contemplate the dollar value of those hedgers. I cannot without smoke coming out of my brain as my memory circuits overload! No government entity will win the war against the collective market -- skirmishes, yes - battles, yes, - war, no. If you believe the Fed is invincible then why has the price of gold been rising in spite of all efforts to stop it. That is the point I am making Mike.
Best regards,
DanGreetings Dan, Mike and Bill, I have no idea if I’ve found the SIX-dollar per day rule that has been in force and amply made aware to us laymen retired traders by your team. Ever since I saw Mike’s DIVG charts I have been intrigue by them. In no way am I putting our many competent federal employees down, however that said all my experience and dealing with them from the professional engineering and general contractor positions has been if they could not get a job any where else so they end up rotting away holding civil hard if not impossible to do away with much less do anything with them positions. GATA has been waging a war of finance engineering with them experience has been. I came to a conclusion that they cannot reason or employ common sense on how to make things work efficiently. Using that template of reason with their financial pot of stew it had to be a number they considered and no problem to use as long as it stayed with in that channel – your 6-dollar rule, but what were they using as input data? In working over the DIVG chart and mulling over each days action and reaction I have done the following massaging using percentages between the DIVG input data with a little twist. Referring to the data column headings I did the percentages between 1) DIVG and LdnC 2) MCDI and DIVG 3) DIVG and MCDI And found that 3) eventually came up with and interesting end result. Each column had the following 3 actions performed, BINGO a 6.6% range channel in the 3) action. 1) Total average 2) Low – high range 3) Range percentage It has got to be a simple and closely held by a few that could be used in as a quick reaction function for the Cartel to operate. (SEE HYPERLINK BELOW) Mike/Dan I’ve had thoughts about overlaying these in a chart fashion and fun out T/A but heck I aint what I once was.
To you ‘alls efforts – So Be It
And,
Season Greeting's – LK DIVG.xls Richard Russell on gold over the weekend: November 15, 2003 -- There are a few times in an investor's life when the opportunity for huge profits lies ahead. Such periods in the stock market occurred in 1932, 1942, 1949, 1974 and 1980-82. People who loaded up with common stocks at those times and held those stocks made fortunes.
I believe another such a time is now. And I'm referring to the current young bull market in gold. Subscribers who have been with me during recent years were urged to buy gold stocks back in 1999. Those who did buy the suggested gold stocks and held those stocks now have substantial profits.
I believe that fortunes will be made in the years ahead by those who are now establishing major positions in gold and gold shares. I've said this a number times before, but I want to repeat it --
These primary moves last longer than anyone believe possible -- and they take the items higher than anyone thinks possible. We're now in a primary bull market in gold.
I believe gold (and very probably silver) will make fortunes for those who now take major positions in the precious metals.
I want to repeat something that a prominent Wall Street millionaire told me half a century ago -- tough words that I never forgot. "Russell, my boy" this gentleman offered, "Do you know why stock brokers never make big money in a bull market?"
I confessed that I didn't know."
He answered, "They don't make big money in a bull market, because they never believe their own bull shit."
In other words, the brokers tell their clients "what a great market this is," but they're just blabbing. If they really believed that it was a great market they'd be loading up on stocks themselves, which if course, they never do.
So this is my position -- I believe gold below and even somewhat above 400 dollars an ounce is dirt cheap. In view of the amount of Fed-generated fiat paper that will have to be churned out in coming years (it will be in the multi-trillions of dollars), gold is the cheapest thing around. The US government, states, cities, corporations and individuals are currently loaded with $32 trillion in debt. On top of that, the US government has additional unfunded liabilities of around $44 trillion, all of which will have to financed.
For these reasons, it's my thesis that gold at $400 an ounce is ridiculously cheap. As a comparison, gold today is less than half the price it was at its 1980 high.
I believe three or four or five years from now we'll look back at today's price of $400 dollar gold and ask ourselves, "Where the devil were we? What were we thinking about? Gold at $400 was cheaper than dirt. What didn't we recognize this back in the year 2003?"
As I see it, this is one of those rare times in an investor's life when he can buy an undervalued asset at a bargain price. This is a time when you can buy real money with fiat paper. At this time you can buy real money, gold, with "junk" fiat paper which is created "out of thin air" by the Federal Reserve.
Big profits have already been made by those who bought gold and gold shares two or three years ago. But that is nothing compared with what I see ahead -- as the bull market in gold moves on. We are now in the accumulation phase of the gold bull market, This is the phase where seasoned, knowledgeable investors build their positions -- even while the public and most neophyte "investors" are either ignorant of what's happening or at a time when the public actually dislikes the very product which could make them a future fortune.
But the secret to all this is the necessity to ACT. Knowledge is wonderful, but in this business, knowledge isn't worth a damn unless you have the courage to "pull the trigger" -- to ACT.
I've listed gold stocks and gold and gold funds until I'm dizzy, until some subscribers have written to tell me that I should "get off gold," that they're tired of hearing about it. So, dear subscribers, it's now up to you. Bull markets are great, knowledge is great -- but there's no substitute for acting. Act, act, act. -END- What is the US up to in China? Just Back from Hong Kong Hi Bill, Was in Hong Kong with my designer for a product development trip and some 'face time' with our key vendors, which is important in the fashion world...anyway of course the conversation turned to issues such as 'what will happen with the elimination of quota at the end of 2004' and 'How is China going to deal with the pressure to float their currency'. Perhaps I didn't read the news reports thoroughly during Sec. Snow's trip to China, but my HK colleague pointed out that the USA was asking China not only to float their currency, but also for access to the China market. 'What type of access' I queried..."to the emerging markets of BANKING AND INSURANCE" was the reply. Again, maybe I missed this before but I was amazed...just think, JPM et. al. rigging China's currency...
Regards,
Herb Mahendra’s thoughts this morning: Dear Members,
Last week I found it was very interesting because world financial market were completely in grip of planet, I have also felt that other external effects are over, means key planets will play their own role freely. So lets see how is this week will be.
Gold:
Ready to cross $400 mark any time today and it will do but may again close down below $400, if its does I will be very happy because I would like tomorrow to have bull run in gold. Why I said tomorrow because I would like Mars to join Jupiter in this rally. So lets wait until tomorrow to see mood of Mars because Mars can force gold to rise 8% continuous.
Silver:
Last week silver prices moved up quite strongly as I was expecting. Just I am waiting prices to cross 5.45 for major bull-run in silver prices. I will send another emails soon on silver because still $7.90 is not impossible target according to my calculations.
Platinum and Palladium:
Both looks very strong in week or next because of Venus. Soon platinum will trade above $800 and palladium above $250.
Stock Market:
Still I hold my prediction for major crash in stock market and I am sure before end of year it will touch 8800 or even below.
Currencies:
I hold same predictions of last week of strong Euro, Pound, Ausi Dollar and Swiss Franc. Japanese Yen trading around 1.09 is a great opportunity to buy it. I still hold my same predictions for Yen to go below 100 against US dollar.
World events:
Current week looks bad but this weekend will bring major worst news for world, that can also put stock market and Bush administrators under great pressure.
Thanks and God Bless
Mahendra The gold shares held up fairly well with the HUI dropping 4.08 to 221.86. Golden Star Resources, my largest holding, was the top performer, gaining 7 cents to $5.97. The XAU fell 2.18 to 100.02. My second largest holding, Samex Mining, jumped 12 cents (15%) to 93 cents on heavy volume. Other smaller junior/exploration golds were steady also. Their shenanigans and those of the Working Group on Financial Markets are a recipe for financial market disaster. The GATA camp can’t be the only ones out there who understand what is going on. The US financial markets are a short-term illusion. Maybe that is why so many corporate executive insiders are selling their own stocks? As all this market managing plays itself out, the one sure fire investment will be GOLD! GATA BE IN IT TO WIN IT! MIDAS Next Tuesday morning I am off to Vancouver to attend a very special evening affair. For Café members who live in Vancouver, or are close by, it may be of interest. From there I head out the next day to see my family in San Diego for Thanksgiving. First Associates Investments Limited J- PACIFIC GOLD INC. SAMEX MINING CORP. Present an Evening Discussion Featuring Ferdinand LipsRenowned Author of The Gold Wars
"The Battle Against Sound Money As Seen From A Swiss Perspective" Tuesday, November 25th, 2003
6:00pm - 8:00pm
Sheraton Vancouver Wall Centre Hotel
1088 Burrard Street
Vancouver, BC Please RSVP to Sean Kelly, at 604-640-0400Reserve your seat and receive a complimentary
copy of The Gold Wars by Ferdinand Lips Ferdinand Lips has accumulated a wealth of knowledge and experience that allows him to provide valuable insight into why the time has come, for Gold in the 21st Century. Mr. Lips article in AMBIANCE magazine in the fall of 2001 titled "The State of Affairs in the Gold Market" encouraged investors to look at gold and gold shares. Again, in the fall of 2002, Mr. Lips gave a speech titled "Why Gold Backed Currencies Prevent Wars". Mr. Lips speech tonight titled "The Triumph of Gold" reviews the positive scenarios for the price of gold, supply and demand relationships, and outlines the reasons why gold and gold shares should be considered as an asset class in our investment portfolios. We will all benefit by listening to his logic and understanding of the gold and financial markets.About The SpeakerFerdinand Lips, has over 50 years experience in the banking industry. In 1968, he was a co- founding Managing Director of the Rothschild Bank AG, Zurich, serving an important international clientele. From 1987 until his retirement in July 1998, Mr. Lips founded and was Chief Executive of Bank Lips AG, Zurich, a portfolio management bank and GlobeTrust AG. In 1993, he was No. 2 worldwide with his in- house Precious Metals Fund (up 121%). In 1998, he sold his equity interest to Graubündner Kantonalbank, Chur.In 1994, he participated in the takeover battle of the Rand Mines Group and the "Rand gold- Revolution" which changed the face of the South- African Gold mining industry. He is a member of the board of Randgold Resources Limited, Jersey, C. I. and the Afrikander Lease Limited, Johannesburg. For many years, he also was a member of the board of Randgold & Exploration Limited, Johannesburg, and Durban Roodeport Deep Limited, Johannesburg. He is Chairman of the Italian finance company Interfin SIM SpA, Milan. He is the author of several texts on investment management and has written three books: "Das Buch der Geldanlage" in 1981 - with the translation into Spanish "Las Inversiones", "Geld, Gold und die Wahrheit", in 1991. In spring 2002 his third book "The Gold Wars" was published in the U. S. The German translation "Die Gold- Verschwörung" was published in September 2003. Mr. Lips was co- founder and first deputy chairman of the Swiss Association of Security Analysts. He has widely lectured on currency history, currency matters and the stock market. He is a member of the Board of Trustees of FAME, Foundation for the Advancement of Monetary Education, New York. John C. Newell - Investment Advisor First Associates Investments Limited
Bentall V, 5th Floor, 550 Burrard St.
Vancouver, BC. V6C-2B5
T:604-640-0318
F:604-609-7419 TF: 1-866-640-0400http: www. firstassociates.com
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-- Posted Tuesday, 18 November 2003 | Digg This Article
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