A hard beginning maketh a good ending... John Heywood "The Proverbs of John Heywood" (1546)

In the last couple of MIDAS commentaries I have done what I could to insult the mainstream gold world as much as possible for their ineptness and cowardly approach to dealing with the blatant manipulation of the gold price. Might as well make it a Trifecta and up the ante at the same time.

What is so grating is that the mainstream gold world dolts refuse to acknowledge the obvious modus operandi of The Gold Cartel. The cabal bums are so organized they repeat their manipulation techniques over and over again, like the $6 Rule – like taking gold down in the Access Market IMMEDIATELY after a concerted price-capping effort during the day.

Last evening Dallas time was a perfect example. Gold was shoved 80 cents to a buck lower not long after gold closed on Comex. The dollar then strengthened a tad later on. When I woke up this morning, the dollar was slightly lower, yet gold had weakened further, called down $1.40 going into the Comex open.

Contrarily, the S&P futures contract almost ALWAYS opens higher after a decent sell-off. Even Richard Russell has noted how the S&P’s are almost always called higher these days and have been for years now. The Gold Cartel is the one at work suppressing the price of gold. It is The Working Group on Financial Markets (PPT) who is propping up the US stock market and influencing its price action.

On that note Goldman Sachs and JP Morgan Chase pressed bullion right off the bat this morning, however, sizeable orders from physical market buyers showed up as the price took out $433. After a brief rally, The Gold Cartel attacked again, following up on their price-capping selling of the past week, even though both the pound and yen were modestly higher. Today’s battering had nothing to do with the dollar. It was all about The Gold Cartel forcing the gold price lower because the euro gave back a piddling of its recent gains.

Today’s outrageous manipulation is a classic example of what I have conveyed to Café members for years. The key to the gold price action is how The Gold Cartel uses the action of the dollar to rig the price. They go into capping mode on various gold up days in an organized un-American fashion, and in violation of all the US anti-trust laws. Then, they simultaneously strike to take the price lower when the word goes out from cabal headquarters to do so. Gold has traded this way for years. Can it be any more obvious? If you can’t see what is going on here, you couldn’t have the brainpower of a gnat or a "grapefruit." Perhaps I am being too kind? Meanwhile, the fact that commodity prices have gone berserk is completely ignored by the dullards in the mainstream gold world. PRICE ACTION MAKES MARKET COMMENTARY. Seems not much matters anymore to US financial markets. US deficits, crummy dollar, soaring real inflation, etc. What does matter is spin and market manipulation.

Gold and silver traded like heavy stones sinking in water the entire trading session. Rallies were non-existent. Only cash market pricing, as gold sank towards $430, saved the day. The gold open interest rose, as fully expected, to 287,801, up a sizeable 4271 lots. This reflects spec buying and Gold Cartel selling to cap the price, as brought to your attention by MIDAS yesterday. Spec longs who bought after Tuesday morning’s limit up day gold pop are now all losers.

The silver open interest fell by 3584 contracts to 101,630 as specs ran for the hills, as did mega long Morgan Stanley. No surprise there either.

The CRB rose once again, this time a mere .26 to 305.26, even though crude oil, beans, gold, and silver were lower. Once upon a time, pre-Gold Cartel and its price manipulation scheme, this chart would have had gold and silver rocketing:

April CRB
http://futures.tradingcharts.com/chart/RB/45The bonds continued their dipsy-doodle, falling another 6/32 to 112 29/32.

The dollar recouped modestly, rising .29 to 82.80 and the euro fell .57 to 131.16. The yen bucked the trend for the day and rose to 104.32.

Indian ex-duty premiums : $6.18, PM $6.03, with world gold at $434.50 both times. Comfortable for legal imports. The Reserve Bank has been actively repressing the rupee, regrettably, from the point of view of gold’s friends.

Turkish imports for February, posted this morning on the Istanbul Gold Exchange’s website, were huge. At 29.411 tonnes, they were the third highest in the 9 2/3 years the Exchange records, despite $US weighted average prices, according the Exchange, being the 4^th highest. February imports were 11.7% up on January and 35% above Feb ’04: $US gold was down 0.3% and up 4.7% respectively. Turkish Lira prices were -3.2% and +2%.

No doubt this quantity reflects a powerful response to the effort to break gold down in the first week of the month: but overall it is clear that the propensity of the Middle East to import gold has shifted. No wonder gold refused to break $400.

The ECB reported today that two subordinate Central Banks sold gold last week (a third bought coin); the net proceeds were E99Mm. This suggests about 9.4 tonnes, the highest this year. At an estimated 31.7 tonnes, the ECB zone sales in February are about equal to Turkey’s imports.

With world gold showing no resilience this morning, ("…spot gold was well offered by dealers" – Mitsubishi) TOCOM essentially stepped out of the market. On volume only equal to 13,014 Comex (-57%) open interest was static (up 338 Comex); the active contract was down 11 yen and world gold went out $1.60 below NY. (Yesterday NY traded 47,718 lots; open interest jumped another 4,271 lots – 13.28 tonnes.)

Yesterday, according to ScotiaMocatta, gold

"436.10/436.60 in New York and made a steady climb...A new high for 2005 (437.90/438.40) was posted before drifting back off on local selling. Selling from overseas sources then started to weigh on the market causing a sell off…"

The net effect of this was that it took over 13 tonnes of net buying to raise the gold price $1.50. In the past four business days, Comex has added 15,570 contracts of open interest (48.7 tonnes) to add $3.10 to the April contract... Plainly, there is a large seller about.

The Gartman Letter has noticed this:

"…there was selling yesterday at $437-438 which proved quite formidable; however, rather than direct gold selling we suspect this was simply profit taking correlative with the strength in the US dollar…. We look for short term support at the $431.50-433.00 level today and we doubt that that support shall be broken."

Profit taking, of course, would reduce, not increase, open interest. As Mitsui-Sydney ingenuously remarked this morning:

"…offshore buying meant gold was firm all day, pressuring resistance & some good size traded. Overnight it was pretty similar, however the flows were lighter. The question now is, with so much pressure being applied to the topside, what is holding gold back?"

Gold seems to be back in the 2001-2004 mode, with successive levels being ferociously defended, but eventually being overcome by rising physical offtake. That is what the Turkish data implies. From that perspective, the key development in gold this year has been the loss of downward momentum developed by the Great Liquidation of January.

The noted gold bear joins with a number of commentators – Gartman, Don Hays, various Neoconservative political writers, to proclaim peace is breaking out in the Middle East. This observation seems fashionable – or popular - at present. I doubt he is naive enough to believe it.

JB

CARTEL CAPITULATION WATCH

As usual the US stock market rebounded after a spanking. The DOW recouped most of yesterday’s losses, gaining 64 to 10,830. The DOG did better, jumping 19 to 2071. Liquidity is the name of the game. At some point reality is going to set in and this market is going to come hurtling down. Hard to know what will be the catalyst and when, however, it is coming. Denial and spin only goes so far. With inflation and interest rates on the rise, corporate profits are going to be squeezed. The rigging of the gold price to mask the true inflation barometer in the US will only go so far in this environment.

Platts:

New York (Platts)--1Mar2005/351 pm EST/2051 GMT
Analysts were at a loss to explain the decline in gold, even as Iraqui violence escalated… –END-

These analysts need to sign up for a www.LeMetropoleCafe.com membership. It would prevent them from remaining clueless.

US economic news:

09:59 Jan. Construction Spending reported 0.7% vs. consensus 0.4%
Prior reading revised to 1.2% from 1.1%.
* * * * *

10:00 Feb. ISM Prices Paid reported 65.5 vs. consensus 67.5
Prior reading 69.
* * * * *

Feb. ISM Manufacturing reported 55.3 vs. consensus 56.9
Prior reading was 56.4.
* * * * *

Marsh Has $676 Mln Loss, Cuts Dividend and 2,500 Jobs - March 1 (Bloomberg) -- Marsh & McLennan Cos., the world's largest insurance broker, slashed its dividend and planned 2,500jobs cuts after reporting a $676 million loss from settling NewYork Attorney General Eliot Spitzer's bid-rigging accusations. -END-

March 1 (Bloomberg) -- Japanese household spending had the biggest increase in nine months in January and the world's second- largest economy created the most jobs since 1992, adding to evidence a recession is ending.

Spending by households headed by a salaried worker rose 8.2 percent from December, seasonally adjusted, the statistics bureau said today in Tokyo. The economy added 470,000 jobs, helping the unemployment rate hold at a six-year low of 4.5 percent.

An improving job market and higher year-end bonuses boosted confidence among consumers, prompting them to spend more at Takashimaya Co.'s department stores and Skylark Co.'s restaurants. Japan needs a rebound in consumer demand, which makes up half the economy, to wean it from dependence on exports and corporate investment for growth.

-END-

A Tale of Two CPI Cities:

First, the US spin version:

U.S. economy still has output gap-Fed's Moskow

WASHINGTON, March 1 (Reuters) - The U.S. economy still has excess labor and production capacity, Chicago Federal Reserve Bank President Michael Moskow said on Tuesday, adding that oil price rises have yet to spill into underlying inflation.

"My own judgment is there still are excess resources in the economy, both certainly on the labor market side and in facilities, plants and equipment," Moskow told reporters after a speech to a National Association of State Workforce Agencies forum in Washington.

"So I personally think there still is an output gap. I think it is closing and that we are growing at about potential growth, but I don't think it has closed at this point. But it is something we have to keep monitoring on a regular basis."

Earlier, he told the audience oil prices have not yet pushed up prices excluding food and energy.

"If you look at that core rate, you have not seen a significant increase in that core rate over this period when oil prices have gone up," Moskow said. "Now if it gets to the point where people believe that inflation overall and core inflation will be higher because of that higher price of oil then that's a very important consideration for us as monetary policy-makers."…

-END-

Then, the real version via a fellow Café member professor:

The big-brained guys at Contrary Investor, authors of some of my most treasured Off-Wall-Street reading, have taken on the veracity of the CPI and concluded the numbers are boiled beyond recognition (go figure)...

http://www.safehaven.com/article-2672.htm

What is curious about this article is they also take on the question that I have found perplexing for years: Are people who cite the CPI numbers as accurate simply morons? Do they think we are morons? The Contrary Investors conclude that the answer is no, but rather some (the Feds at least) are using a "Don't ask don't tell" policy for convenience. A couple of you prominent folks are forced to cite bogus numbers: Is there no alternative?

Seems to me that investors will eventually demand transparency above all else or they will take their capital and go home (or back to Asia).

Just trying to share good stuff culled from obscure places with folks who might care (and maybe make a difference)...

Best regards
Dave

BTW-The smartest guy I ever met was a bean picker with a third grade education, and some of the biggest nimrods had PhD's in chemistry. With that said, these Contrary Investor folks do appear to have strong credentials. (Check out the blurb at the bottom of the article. It's kind of inspiring.)David B. Collum
Professor of Chemistry and Chemical Biology
Cornell University

Which takes us to the latest development on this CPI controversy:

Bill:
I figure I can do Moskow one better! If they can spin, so can we....

News Alert
February 28, 2005
AP NEWS (Houston)

Renowned commodity trader Dan Norcini stunned the investing world today when he asserted that elephants roost in trees. Norcini, famed for his sometimes bewildering comments, confidently claimed that he had seen a dozen elephants sitting in the tops of the water oak trees surrounding his estate. So assured was he, that investors all around the world are now questioning whether he might be true.

"Norcini is one strange bird," quipped a pit trader in the S&P, "but he is a smart guy and anything he says has to be given thoughtful consideration."

News Alert
March 1, 2005
AP NEWS (Houston)- UPDATE

There has been a rash of sightings of elephants roosting in trees that has left authorities shaken and dazed.

"Calls are coming out of the woodwork," commented a deputy sheriff who is a member of a special task force created to handle the sightings.

The unusual development began after a famous commodity trader, Dan Norcini, announced that he has seen the elephants with his own eyes. While Norcini was not available for further comment, his attorney, Talkem N. TU. Anything, with the law firm of Doowey, Cheatum and Howe, stated that his client is completely convinced of the matter and has no reason to fabricate such a story.

End

More from Houston's Dan Norcini:

Bill;
We keep getting more and more of these reports detailing the squeeze that manufacturers are under as a result of rising input costs.

Here's another one, this time its Caterpillar. You had to wonder when they would finally cry, "Uncle," and hike costs. This is precisely the kind of thing one should expect to see accompany a rising CRB index and why I believe the deflation proponents will be proven wrong. Anyone who deals in steel knows all too well what I am talking about. It is a component in so many different manufactured goods that it is almost pointless to even attempt to list them - automobiles, heavy equipment, construction products, military equipment and armament, etc...

All one has to do is to simply think about the rising costs associated with soaring base metal prices and plastics which have their source in crude oil to realize that Caterpillar is not the exception; they are the rule and a sign of things to come.

It is also the very reason why the deliberately deceitful comments made by Greenspan, Bernanke and other various Fed governors such as the one I sent you earlier from Moskow are so patently absurd.

To assert, as they have so brazenly done, in the face of a rising CRB index and a soaring PPI (even in spite of its inadequacy) that inflation is "well anchored" or "contained" and that the CPI is not reflecting any pass through to end users by manufactures should strain the credulity of even the most ignorant of analysts. Yet, that is exactly what we do not see - on the contrary, we see the stupid lemmings swallowing the the purple Kool-Aid and parroting the official sector line that inflation is simply not a threat. "How do we know that?", they confidently assert. "Why just look at the price of gold. If it were a serious threat, gold would be reacting violently upward." Meanwhile they shovel the yellow stuff into the market as fast as they can find it in an attempt to meet the voracious demand and try to keep it from exploding upward to reflect reality.

Maybe we should pass on some advice to our friend Dennis Gartman and ask him to do himself and his hedge fund clients a favor by putting down the Kool-Aid long enough to let the cobwebs clear from his mind. That and some fresh air might bring him to his senses.
Dan

CHICAGO, March 1 (Reuters) - Heavy equipment maker Caterpillar Inc. said on Tuesday it will increase machinery and engine prices by 1 percent to 5 percent effective in late spring due to rising costs of steel and other raw materials.

"This price action, first announced to dealers worldwide this morning, is in line with general economic conditions and industry factors," the company said in an 8-K form filed with federal regulators. Caterpillar shares rose 1 percent in morning trading.

Caterpillar Chief Executive Jim Owens had told Reuters Friday in an interview that the company might raise product prices again to cover escalating prices for steel and other raw materials.

The world's largest maker of construction and mining equipment had raised prices by about 3 percent in July and another 3 percent in January to offset rising costs.

Caterpillar, based in Peoria, Illinois, has been deluged with orders in the past year due to the economic recovery, rising commodity prices and accelerated federal tax breaks. It has come under fire from investors, however, because it hasn't been able to translate those sales into profits as quickly as expected due to production bottlenecks and higher raw material costs…

-END-

The REALLY big news of the day came out of Dubai – not only for GATA but the entire gold world. Read on and and I will comment why below:

Hello Bill,
we had the chance for a short shake hands at the New Orleans Investment conference 2 years ago. Attached is a study about the planned unified GCC currency and gold, which I wrote for the Gulf Research Council, in case it is interesting for you.

All the best from Dubai, Eckart

Dr. Eckart Woertz
Vice President Fixed Income and
Structured Products
CFC Securities Limited
P.O. Box 2260
4/F Al Attar Business Tower
Sheikh Zayed Road
Dubai, UAE

Various studies have come to the conclusion that gold is severely underpriced. They expect a gold price of at least USD 700; some estimates even reach USD 1500 and more. The chosen approaches are manifold and include comparisons between the gold price and money supply (M3), long term ratios of the gold price with oil and stock markets, supply and demand figures in the gold market or the

39- See Al-Alkim, op.cit., chapter 3-6.

40- Ugo Fasano and Zubair Iqbal, "Common Currency. GCC Countries Face Fundamental Choices as they head for Monetary Union," Finance and Development 39, no. 4 (December 2002), available under www.imf.org/ external/pubs/ft/fandd/2002/12/fasano.htm, p. 2.

______________

hypothetical amount of gold needed for a reintroduction of a gold cover clause. 41 Although the liquidity driven stock market frenzy and serious currency crisis in some emerging markets (Mexico, Asia, Russia) supported the US dollar in the 1990s and thus reduced the attractiveness of gold, the sell off in gold between 1996 and 2001 that propelled it below USD 260 is highly suspicious, as it happened during a time of increasing supply deficits in the gold market. This has led a number of distinguished experts who are affiliated with the Gold Antitrust Action Committee (GATA) 42 to assume that Western central and commercial banks have manipulated the gold market since the middle of the 1990s in order to defend the paper dollar standard. Such interference is quite reminiscent of the gold market interventions in the sixties during the establishment of the Gold Pool. The evidence collected encompasses comparisons between different kind of statistics and issuers, historical probabilities and standard deviations as well as anecdotal material about more or less obvious efforts to suppress the gold price. While this is not the place to discuss the material in great detail,43 it is important to be aware of the basic argument and its implications for the future gold price, should the paper dollar standard deteriorate further.

Based on 2000 figures, Frank Venoroso challenges the official statistics of Gold Fields Mineral Services (GFMS) and the World Gold Council (WGC) and assumes that annual mine

______________________

41- Van Eeden, op. cit.; Tim Wood, "Gold-oil link all but dead in 2004," (August 10, 2004): www.mineweb.net /sections/energy/oilgold.htm; H. Reginald Howe, "Dow/Gold Ratio=1 at 3000$: Don’t Laugh!," under www.goldensextant.com/ commentary5.html; Frank Veneroso, "Facts, Evidents and Logical Inference. A Presentation on Gold/ Supply/ Demand, Gold Derivatives and Gold Loans," (May 2001): www.gata.org/fv.pdf; Bill Fox, op. cit., p. 18.

42- GATA was founded in 1999, see. www.gata.org.

43- Frank Veneroso, Reginald H. Howe, Mike Bolser and James Turk have conducted the most important studies so far. For a thorough compilation, see John Embry and Andrew Hepburn, "Not Free and Not Fair. The Long-Term Manipulation of the Gold Price," Sprott Asset Management Special Report, August 2004 under: www.sprott.com.

production (2,568 t), scrap supply (602 t) and official central bank sales under the Washington Agreement of 1999 (400 t) are only partly covering an estimated world wide demand of 4,844t. Venoroso thinks that the supply gap of about 1,274 t and the supply gaps of preceding years have been closed by leased central bank gold. That leads him to the breathtaking thesis that instead of the officially acknowledged 5,000 t on lease and swap arrangements, up to 16,000 t of a total of 28,000 t may have actually left the vaults of central banks. Venoroso points out that the gold carry trade that started in the 1980s gradually went out of hand. Thereby, central banks are leasing gold to the commercial banks for a low leasing rate of about 1%. The commercial banks sell the gold in the market and invest the proceeds in higher yielding assets like treasuries, thereby earning a nice spread. As the commercial banks now have a delivery risk of physical gold to the central bank, they can hedge themselves against a gold price rise by going long on the derivative markets. Mining companies, proprietaries trading desks and hedge funds have taken the short side of these trades. Thus, on a limited base of physical gold, a gargantuan mountain of derivatives has developed. And this mountain continues to grow, although mining companies have reduced their hedges dramatically in recent years.44 To put it in a nutshell, the gold still exists in the books of central banks as receivables, and on the books of hedge funds and commercial banks as liabilities. But the actual physical gold itself has long left the vaults and now hangs around the necks of the women of the world. These women are the "ultimate longs" in the market while the banking system stays out in the rain with a gigantic derivative short position of up to 16,000 t.

___________________________

44- It is estimated that the notional value of derivative "paper gold" is 10 times higher than yearly physical production and nearly as high as all official sector gold. H. Reginald Howe, "Gold or Dross? Political Derivatives in Campaign 2000," August 2000, www.goldensextant.com/campaign 2000.html#anchor48727 and Howe, "Hitting the Iceberg," December 20, 2003, www.goldensextant.com/ commentary 26.html#anchor25233.

At current prices, it is inconceivable that this short position could be covered. A much higher gold price would be needed. This, in turn, would not only seriously hurt the profits of the banking system but would also endanger the already ailing paper dollar whose liquidity is fuelling the US and world economy alike. This is why Veneroso, Embry and others assume that an official sector of central and commercial banks has started to manage the gold price at least since the plight of the LTCM hedge fund in 1998, which purportedly held a huge short-position in gold. Occurring trading patterns suggest that apart from lending physical gold into the market, the gold price is suppressed by derivative short selling and spread trading. Similar accusations exist in the case of silver.45

This management will ultimately fail, as the supply gap will increase rather than decrease.46 Gold production is expected to decline significantly in coming years as mining companies reduced their investments in new projects during the last decade of suppressed prices. As a mining project needs 5-8 years to mature to production, this will not change anytime soon. Groundbreaking new technologies that could raise the output drastically like the discovery of cyanidation in 1887 are not likely. And epochal new discoveries like those in USA, Australia and South Africa in the 19th century47 can also not be expected, as nowadays such terra

______________________

45- The case for silver is even more compelling, as there exists a supply gap since the beginning of the eighties and there are no central bank reserves. Silver the "poor man’s gold", played a role in monetary systems until the 19th century and is also an important raw material in the electronic industry. Its long-term historic ratio to gold is 1:15, which is way above the current 1:60 and could even lead to steeper rises in price than gold. It remains to be seen if it could regain monetary importance during the unfolding crisis of the paper dollar standard, but as its use is not exclusively monetary we leave it aside here. For the manipulation story of silver, see the various articles of Ted Butler on www.investmentrarities.com/tbarchives. html. For silver as an investment case, see Marion Butler, "The Case for Silver," October 19, 1999: www.goldeagle.com/editorials_99/mbutler101899.html and various articles on www.silver-investor.com .

46- Rhona O’Connell, "Gold demand growth outstrips production," November 25, 2004, www.mineweb.net/ sections/gold_silver/393445.htm .

47- See Peter L. Bernstein, The Power of Gold…, op.cit., pp. 219-238.

incognita of mining does not longer exist. On the demand side, Western investment demand has not even kicked in yet like it did in the 1970s, while retail demand in important markets like India, Arabia and Asia remains stable or is even rising despite augmented gold prices. Additionally, other central banks than the Western ones are actually buyers (e.g. China, Russia, Argentina), as they need to diversify their dangerously one-sided currency reserves.48 That is especially true for China, which is sitting on a huge pile of USD 500 billion in currency reserves, while officially having gold reserves of only 1.6% of that amount (Table 3). Actually there are repeated rumours that in recent years China may have bought more than the 200 t that it officially acknowledges, and the reopening of the Shanghai gold market in 2001 after over fifty years of closure may not be accidental. Finally, Japan has announced that it may purchase gold as well, in order to diversify its similarly one-sided currency reserves (USD 800 BN).

The likely outcome is the current manipulation scheme of the gold price will fail like the Gold Pool in the sixties. Once it fails, it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the GCC countries.

To read this special gold report in its entirety, go to:

The Role of Gold Digital.pdf

-END-

Why is this SUCH A BIG DEAL?

*The last market manipulation paragraph says it all.

*This report is now circulating all over the Arab world to the right people, including the Middle East Arab central bankers, the sheiks, the money manager advisors, etc.

*The report acknowledges GATA is correct in our basic assertions.

*This report enhances GATA’s credibility enormously and ranks right up there with the Sprott Report (http://www.gata.org/SprottPressRelease.html) and the Russian central bank paper (http://www.gata.org/RCBTakesNote.html) read at the LBMA conference last June.

*The report is also a HOME RUN for GATA as far as Gold Rush 21 (www.GoldRush21.com) is concerned. One of the goals of GR 21 is to get the word out to the investment world re GATA’s assertions, especially that half the central bank gold is no longer there. Once the investment world understands GATA is RIGHT and we know what we are talking about, there will be a rush for gold like never seen before. This distinguished paper will go a long way to assist GATA achieving this objective, which in turn, will help make YOU a fortune.

*Most importantly, this revealing document by Dr. Woertz details reasons for the wealthy Arabs and their institutions to load their gold boat NOW. This WILL have a major impact as far as the gold price is concerned in the weeks and months to come. John Brimelow reports above on the "huge" gold demand emanating out of Turkey, which represents Arab gold demand. Wait until they read this report. With $50 to $60 oil, they have money to burn.

OK, are you happy with what happened to gold and silver today? Are you happy with what your gold shares are doing? Are you happy you are being fleeced day after day by a bunch of crooks? If not, DO SOMETHING ABOUT IT. Shame on you if you have not called up the gold company CEO’s to urge them to attend Gold Rush 21 – especially the majors. The more shareholders these CEOs hear from, the more likely it is they will consider attending. This paper ought to make it a lot easier for you to persuade them why they should be there. Please send them all a copy, even if by email. This is a MUST read for every gold company CEO. Make sure to call them back in a week and ask them their opinion of what is offered regarding the gold price manipulation in the paper and to back up their own opinions should they differ.

You might also let them know that Tami Matsufuji, President of Jipangu and Japan's "Mr.Gold," is coming all the way from Tokyo to Dawson City in the Yukon to attend Gold Rush 21. What could be their excuse for not coming?

You can sit there and moan and groan about what The Gold Cartel elitists are doing to you, or effect a CHANGE. Up to you.Not only is the gold demand news positive coming from the Arab world, it continues to build in India also:

Yellow Metal to be Traded in Paper Form

Business Standard, Mumbai
Tuesday, March 01, 2005

http://www.business-standard.com/smartinvestor/storypage.php?
chklogin=N&autono=182101&lselect=1&leftnm=lmnu6&leftindx=6

The Union finance minister today announced that the Securities Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) would work out the modalities for mutual funds to float gold-backed units which would be traded on exchanges.

These Gold Exchange Traded Funds (GETFs) will enable households to buy and sell gold in units for as little as Rs 100.

In fact, it was Benchmark Mutual Fund which first mooted a scheme of this sort around three years back but the idea did not find favour with RBI, as it felt that the prices of gold could be manipulated and it would destabilise the market. Sebi, incidentally, did not have any problems with the scheme.

Exchange-traded gold funds are a step in the direction of real estate funds and other commodity-backed funds.

Ashutosh Bishnoi, chief marketing officer at UTI Mutual Fund, said, "The necessary mechanism for this has to be put in place. The first step in this direction should be to securitise gold as an asset since the funds cannot hold them in physical form."..

-END-

Rhody on leasing:

Hi Bill,
Gold lease rates are still in backwardation, but only in the very near term. The rate curve is still relatively elevated and flat suggesting continued leasing activity at above average levels.

Silver near term rates dropped by 25% from .20% to .15%, as did two and three month terms by .04%. Leased silver is not the source of spot silver price weakness today.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html

This next report on gold is one of the most worthless I have ever read. Most of the commentary is bullish, yet concludes gold is heading back to $350. What garbage. I only bring it to your attention because it is circulating all over and I was asked to comment.

World economy: Commodities - Our forecast for gold

COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT

..In 2005 the gold price will on average rise by 6% along with a continuing weakening of the US dollar against the euro. Although much of these gains will be reversed in 2006, gold will maintain a US$400/oz plus price range. Over the medium to longer term, the gold price is expected to fall back to trade around US$350/oz, just below its long-run average price…

Full report
http://www.viewswire.com/index.asp?layout=display_article&doc_id=1348077934

Compare that piece of junk to that of the paper by Dr. Eckart Woertz in Dubai.

Anecdotal input on gold demand coming from Joe and Jane in Canada:

HUI
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hui&sid=0&o_symb=hui&freq=1&time=8

MIDAS

Mover Mike long term subscriber of LeMetropoleCafe.Com posted this critique of Lawrence Kudlow today.

And here's the dumbest quote of the day, courtesy of Lawrence Kudlow of Kudlow's Money Politic$ Noting that the Commodity Research Bureau index of raw material futures has not been at these levels since 1981 and then we had 10% inflation and 2% today

Yes, sometimes commodities flash inflation-warning signals. But other times commodities are better used as indicators of the global economy. Today it is the world economy that is placing higher raw material demands on commodity prices, not inflation.

www.kereport.com

Bob Dickinson, introduced to us by Shaun and Scott Gibson of Gibson and Company – a Vancouver based marketing firm, is one of the most interesting and respected folks in our industry. It was a pleasure to visit with him and learn not only about his organization, but also about his background and his passion for the resource industry. Click on www.kereport.com and see if you don’t share our enthusiasm.

In each of our next two segments we featured new guests. We believe that you will find both of these individuals to be valuable additions to our program.

Joe Martin of Cambridge House introduced us to Jim Willie, editor of The Hat Trick Letter. In the third segment Jim gave listeners a brief tutorial on Petrodollars and explained why talk by OPEC governments of switching to Euros as a base currency gives US politicians the jitters.

Jeff Ferguson, a private economist from Gig Harbor, Washington, made a strong case in the fourth segment for his assertion that the manipulation of interest rates is the most damaging form of government market intervention, and the major underlying cause of business cycles. He went on to discuss the reasoning for his belief that the economic conditions prior to the Great Depression of 1929 are here again today. He also discussed why he feels gold stocks provide safety for investors in the current financial environment. To read an excellent commentary by Jeff, simply click on "complete commentary" found on the Korelin Economics Report website.

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