|
March 25 – Gold $425.90 up $1.90 – Silver $6.92 up 2 cents "There are a thousand hacking at the branches of evil to one who is striking at the root." --Henry David Thoreau With The Gold Cartel off for Good Friday, gold came right back in overseas trading. While these rallies often are rebuked when the cabal checks back in for work, this modest, quick recovery is another indication the worst is over. The incredible pace of the liquidation suggests the cabal does not want to be too short at these levels. Most likely the black box/hedge fund dumping of longs was also fueled by the commodity price plunge in general. The CRB fell around 16 points in only a week: April CRB
http://futures.tradingcharts.com/chart/CR/X Haven’t mentioned The Café Sentiment Indicator in a while. It has been a bit strange. Paying full menberships have been OK with veteran members renewing at a reasonably good pace. New memberships are as low as any time since the Café opened. The general public could care less about gold. Trials are minimal and hits on the site are as low as they have been in many years. Have to give the number a 3 or 4. I have been harping on a derivatives blowup theme of late, one which, when it hits, is liable to rattle The Gold Cartel in a way never seen before. My smeller tells me we have one in the works, even if it is months away. The US economy marched on these past years due to tax cuts, government stimulus, low interest rates, etc. The effects of that stimulus are on the wane. In addition, the US has severely underreported the true inflation figures in this country and overstated employment. And, of course, they have hidden the true US inflation scenario by rigging the gold price, the indicator many pundits use as a barometer to gauge our inflation picture. As interest rates go up, it will rattle consumer consumption, halt the real estate boom and lessen corporate profits. The US stock market is in the process of breaking down after forming a massive top: June S&P
http://futures.tradingcharts.com/chart/SW/X As a result of managing markets over the years, market complacency has crept into the US investment psyche. Few on Wall Street, and among the investing public, can conceive of a stock market debacle and a real estate price plunge. As many of us veteran markets guys and gals know, this is when they are most likely to materialize. The chart patterns of key US financial stocks such as JPM, AIG, Fannie Mae, Citigroup, etc., are very heavy ones. The way I see it the odds are very high the coming volatility in the derivatives on the books of these firms is going to shoot up. As it does, an interest rate derivatives neutron bomb is likely to go off when one of them goes too far offside to be smoothed over. This will set off a chain reaction in some of the other major firms. One more thing. AIG, Fannie Mae and Citigroup, three very significant US firms, all are involved in major scandals. The AIG guys are hiding behind a 5th Amendment routine, Fannie Mae fired its top guys and can’t come out with an honest financial report on time and the Fed is all over Citi. The corruption at these firms, as it is with others in The Gold Cartel, is rampant. Attorney General Spitzer has done little to stop the Wall Street scourge, protecting The Home Boys along the way. The likelihood of some kind of financial market brouhaha to emanate from one of these outfits grows by the week. March 25 (Bloomberg) -- American International Group Inc.'s board is prepared to remove Maurice ``Hank'' Greenberg as chairman should he fail to cooperate with investigations of reinsurance transactions that may have manipulated earnings, a person familiar with the matter said. Greenberg, who stepped down as chief executive officer of the world's largest insurer last week, would be forced to resign from the board if he refuses to testify at a deposition before New York Attorney General Eliot Spitzer, said the person, who declined to be identified. AIG fired Chief Financial Officer Howard Smith this week for invoking his Fifth Amendment right against self-incrimination, two people familiar said… -END- CARTEL CAPITULATION WATCH From a fellow Cafe member on the US stock market score: Hi Bill-
I think you are on the right track with the stock market. Just thought I would share an observation I made this (Friday) morning. If you look at the 15 most active stocks on the NYSE in Investors Business Daily reflecting Friday's activity and look to the left of each stock at the accumulation vs. distribution rating on each stock ( with an 'A' being the best and an 'E' as the worst) it will knock your socks off. To wit: GM rated E
Ford.. E
GE.. E
Elan.. D minus
Pfizer.. C plus
Citi.. E
Delphi.. E
Genworth Finl.. E
Lucent.. E
WMT.. D minus
JPM.. E
Nortel.. D plus
Time War.. B
XON.. B minus
AIG.. E ( what else!) That about says it all. Stocks are under MAJOR distribution. Wonder why?? Have a great weekend.
Buzz Some goodies in these news stories. Intervention everywhere, except in the gold market of course: Maybe there will be some "words" uttered over the weekend:
March 25 (Bloomberg) -- Japan's Ministry of Finance expressed concern over the sharp drop in U.S. Treasuries last week. A spokesman was quoted as saying that several MOF officials were considering "concerted intervention", citing the need for "price stability". Many Japanese banks, the largest holders of U.S. Treasuries, close their fiscal year on March 31.
March 26 (Bloomberg) -- Ottmar Issing, ECB chief economist, dismissed Mr. Schroeder’s challenge to abandon the EU Growth and Stability Pact. On Sunday, Mr. Issing again warned that the ECB was "concerned about following Mr. Greenspan's bubble policies" and that expanding deficit spending was "taking the EU in the wrong direction," he added. He also noted that Euro strength was paramount to the region's ability to secure discounted prices for key commodities, such as crude oil, which is trading at record highs in U.S. dollar terms, but remains historically inexpensive in Euro terms.
March 26 (Bloomberg) -- The U.S. next week is forecast to say the economy added less than 200,000 non-farm jobs for a second straight month in March, according to a Bloomberg survey of economists. In contrast, German joblessness probably rose 75,000 in March, a Bloomberg survey of economist showed. The statistics are released on March 31. "Recent data indicate the economic outlook is less bullish'' in the U.S., said Kevin Jamdis, manager of the FirstOneOut HedgeFund, with $3.2 billion under management. "The Fed may have to cut rates at the next meeting in May", he said. "The amount of short positions in U.S. Treasuries is near a record". Jamdis recommends semiconductor and Internet stocks in order to participate in the "inevitable meltup".
Jesse with some bullish long term gold charts: Long Term Gold Chart
http://jessel.100megsfree3.com/GoldLT.png Now Playing at Jesse's Charts
http://www.geocities.com/arthurcutten/jesse.html -END-
GATA antagonist Tim Wood came out with another diatribe against us, "Laying to Rest GATA’s CRB Index – Gold Kerfuffle." It can be found at: http://www.resourceinvestor.com/pebble.asp?relid=8831
I had intended to ignore the essay because it is so trivial. Yet, this response below to his piece hits the nail on the head so perfectly, I felt it important to bring the response to your attention. It applies to all of GATA’s naysayers and critics: TOTALITY OF EVIDENCE Posted by Jim on 25 March 2005 @ 12:15 PM I've been a lawyer for close to 40 years and if I ever got a chance to argue the case for gold manipulation in a "fair and balanced" justice system the TOTALITY of evidence is overwhelming! There is no one piece of the puzzle that can stand alone as rock solid proof (yet). That is usually the case in any trial. But having lived in the gold/silver markets for the past 5 years I can tell you the evidence of official and unofficial intervention in "TOTAL" is undeniable.
Tim, I've read your articles since the early Mineweb days and I usually take the other side of your arguments...not because you don't make good points, but because you fail to take into account the totality of evidence. Everything is relevant in this discussion from supply/demand realities to the JPM/Barrick ownership structure to the central bank reporting leased gold as part of their gold reserves to the GATA BIS evidence.
As far as "intent" you cannot argue that the powers to be don't have a reason to "manage" the price of gold. I believe it is a very good reason as a runaway gold market would pretty much end the fiat money system that we have so much fun with today. But intent is present. Tim, I assume you are not ignorant of monetary history and theory. I have not made any judgements on your motivation although your past work history suggests you are part of the overall "manipulation machine"(media control is a large part of the gold suppression tool). I do applaud the your willingness to let the public respond to your articles, but I fear that you only allow this to try to bolster some credibility claiming "free press".
I take solace in the fact that when the physical gold is gone and the western world tries to explain to their people why all the gold ended up in Asia, all these stories, facts and figures will be laid on the table and the TRUTH will finally be told. -END- Back to the gold derivatives numbers compared to the total amount of commodities derivatives: Hi Bill,
Ref. http://www.financialpolicy.org/fpfspr8.pdf This paper is an interesting analysis of the risk posed to the financial system by the unregulated derivatives market. The risk seems substantial which makes you wonder why Greenspan is so adamant that the derivatives market is not regulated. On gold derivatives vs. other commodities, Table 1 in the report shows that gold has fluctuated between approximately 45% and 25% of all commodity derivatives. Gold represents approximately 1% of physical Commodity trading volume according to one of your previous contributors. Stated another way, there are 25 to 45 times as many derivatives against gold as against other commodities given its portion of the commodities market. Which makes you wonder why it would dominate to such an outsize the portion of derivatives against it compared to derivatives of other commodities. What is there about gold that results in such massive derivatives being structured in its market especially given the well contained volatility in its price, that you have so often noted, which would seem to militate against arbitrage opportunity? Or is the contained volatility in price a result of the large derivatives positions in its market?
Best Regards,
Dick I am sure years ago Reg Howe, or someone in our camp, touched on the disparity between the total number of gold derivatives compared to total commodity derivatives over the years. However, when presented again it hits me over the head for a few reasons: *Years ago the WGC and GFMS all said the huge gold derivatives numbers were due to the gold producer hedgers. Yet the hedgers have reduced their positions by close to 60%, or some number like that. Meanwhile, the total gold derivatives numbers have not come down. This blows WGC/GFMS out of the water, just as Frank Veneroso blew them out of the water with his presentation of their LUDICROUS gold demand numbers – which now have zero credibility: A Monthly Review Of Gold From Frank Veneroso *The comparison between gold and the rest of the commodities is staggering and highlights how gold is controlled. As oft-noted in this column, gold does not trade like other commodities in that its upside price movement is always capped ($6 Rule). This is how The Gold Cartel has prevented the Gold Derivatives Neutron Bomb from going off. It will remain that way until they are carried out on GATA’s stretchers, which they will be. *What Jeff Christian of the CPM group, ex-Goldman Sachs, highlights re the huge amount of gold derivatives helps to prove GATA’s case. A good number of these derivatives are tied to the staggering amount of surreptitious central bank gold leased/swapped into the market. This is a major reason why the gold derivatives numbers dwarf those of other commodities. *Yet, when a Jessica Cross, consultant to the WGC, and Jeff Christian of the CPM Group are confronted with GATA’s claims they go off the deep end about us. Neither will refute what we have to say, or if they do, they come up with complete garbage which makes no sense. We have gone through that drill for years. Reg Howe effectively blew Jessica Cross out of the water years ago (see www.GoldenSextant.com). GATA has taken on the richest and most powerful people in the world. Most of the mainstream gold world cannot handle such audacity. "They can’t handle the truth" either. Several years ago Jay Taylor interviewed GATA’s Chris Powell. An excerpt which is very apropos for this MIDAS: Taylor: And if I'm not wrong, both bankers and politicians hate to raise interest rates. Politicians hate it because their voters don't like it. And, bankers hate it because to raise interest rates, lending (debt) must be restricted, which means they earn less profits. So it would seem to be in the interest of both bankers and politicians to see the price of gold decline. I know you are well aware that some time in 1998 Federal Reserve Chairman Alan Greenspan made the following statement on Capitol Hill. "Central banks stand ready to lease gold in increasing quantities should the price rise." When I interviewed Jeff Christian and again when I interviewed Jim Rogers, both men saw nothing abnormal about that statement. In fact, they opined that it was perfectly normal to start leasing gold in a rising price environment. I believe Jeff said something to the effect that lending gold when it rose was a normal and good thing because it would stabilize the markets. Do you recall the context within which Greenspan made that statement and, if so, was it perhaps taken out of context by GATA to support your conspiracy theory?
Powell: Greenspan made that comment as part of a statement in which he was opposing federal regulation of derivatives. He was arguing that regulation of derivatives in commodities wasn't necessary, because there were protections against cornering a market. In regard to gold particularly, Greenspan was telling Congress not to worry about a corner in the gold market, because the central banks would bust any corner by increasing their lending of gold. The wonderful irony was that this lending itself was ALREADY part of the CENTRAL BANKS' OWN scheme to corner the gold market. As for your friends Christian and Rogers, it might be good to ask them why central banks should want a "stable" market in gold more than a "stable" market in soybeans or orange juice. Of course the central banks would have no reason for wanting a "stable" market in gold unless gold has great bearing on the value of national currencies and interest rates. Is a "stable" market a free market? And if government policy is to regulate the gold price, should not that policy be clearly articulated in a democracy so that everyone understands it and can enter the financial markets on equal terms? -END- Chris Powell laid it out perfectly why the gold derivatives are so massive compared to other commodities markets. It’s called GOLD CARTEL, price-rigging, clandestine fraud, violation of US anti-trust laws. Speaking of Chris, this letter is going out to those coming to GR 21: GOLD ANTI-TRUST ACTION COMMITTEE INC.
7 Villa Louisa Road, Manchester, Connecticut 06043-7541 U.S.A.TELEPHONE: 860-646-7383
FAX: 860-649-8878
E-MAIL: GATAComm@aol.com March __ 2005
Dear
This acknowledges your registration for the Gold Anti-Trust Action Committee's Gold Rush 21 conference from Sunday, August 7, through Tuesday, August 9, 2005, in Dawson City, Yukon, Canada. Please confirm your registration by sending us a check for US$2,950. Upon your request, we'll send an invoice.
At Gold Rush 21 we hope to start an important dialogue on GATA's future and, indeed, the future of the world financial system. We believe that gold continues to have a central role in that system but that it must be rediscovered. Gold Rush 21 has been called to begin that rediscovery and devise a plan for advocacy and action on behalf of the precious metals.
Gold Rush 21 will provide a unique opportunity to meet leading thinkers about the precious metals and currency markets. We want to show the financial world and the mining industry that the precious metals markets are neither free nor fair, that the suppression of precious metals prices has terrible consequences for all markets, and that something must be done about it.
Our speakers will include:
John Embry of Toronto, chief investment strategist for Sprott Asset Management and formerly of Royal Bank's gold fund, author of the Sprott report on manipulation of the gold price.
Ferdinand Lips of Switzerland, chairman of Top-Gold Fund in Liechtenstein, former chief executive of Bank Lips, former managing director of Rothschild Bank AG in Zurich, and author of "Gold Wars."
Hugo Salinas Price of Mexico City, founder and honorary president of Grupo Elektra, author of the seminal essay "Silver's Three Flags," and leader of the campaign to remonetize silver in Mexico.
Reginald Howe of Massachusetts, proprietor of Golden Sextant Advisors LLC, Harvard-trained lawyer, and plaintiff in the groundbreaking antitrust case of Howe vs. Bank for International Settlements et al. in U.S. District Court in Boston.
James Turk of New Hampshire, founder of GoldMoney, editor of the Freemarket Gold & Money Report, and author of "The Coming Collapse of the Dollar."
Peter George of South Africa, a veteran mining company executive and perhaps his country's foremost advocate of gold as money.
Dr. J.K. Mortensen of Vancouver, professor of earth and ocean sciences at the University of British Columbia.
Hans Boge of Winnipeg, president of Klondike Star Mineral Corp., which holds mining rights to the territory at the center of the great Yukon Gold Rush.
Bill Murphy, GATA's chairman and proprietor of LeMetropoleCafe.com, the leading Internet site of commentary on the gold market.
Your conference registration fee will include round-trip charter air transportation from Whitehorse, Yukon, to Dawson City, plus all accommodations, transportation, and meals in Dawson City. All you have to do is get to Whitehorse on Sunday, August 7, and our reception personnel will take care of the rest.
We want to assist you in making your travel arrangements as seamless as possible.
Dawson City is located in the Yukon Territory, Canada's last frontier, in the northwest part of the country. The Yukon is about the size of California with a population of approximately 30,000. August is summer in the Yukon with temperatures from 15-25 degrees Celsius, 59-77 Fahrenheit. We recommend packing casual clothing for a range of temperatures. The Yukon is the land of the midnight sun, so expect to see daylight even as you emerge from evening functions at the oldest gambling hall in Canada.
Dawson City is home of the greatest gold discovery in history, the Klondike Gold Rush of 1896, and thus is a community that thrives on tourism and placer mining. It is located north of Whitehorse and offers historic buildings, friendly service, and comfortable accommodations.
You won't find cell phone service in Dawson (try to enjoy the break) but high-speed Internet access is standard throughout the community. Myths about the mosquitoes in northern Canada are bigger than the bugs themselves. There are few annoyances in Dawson City or Whitehorse in August. More information about the Yukon and answers to frequently asked questions are available at our Internet site, Gold Rush 21.
We will have an exciting agenda and special programs waiting for you when you arrive. Formal presentations and small discussion groups with GATA's experts will be held around our welcoming reception, dinners, and special excursions. For delegates traveling with family members, we also will be providing a spousal program and children's and youth program.
Travel to the Yukon is available via Air Canada, Air North (Yukon's Airline), and Condor. Vancouver, British Columbia, is the hub for most air travel, but Air North also connects from Calgary and Edmonton, Alberta, and Condor flights come direct from Frankfurt, Germany. Depending on the point of origin of your flight to Dawson City, you may expect to stay overnight in either Vancouver, Edmonton, Calgary, or Whitehorse, the Yukon's capital. Our Internet site suggests accommodations in Vancouver and Whitehorse, and our event coordinator, Janet Lee, is available to assist with your travel inquiries. You can reach her by e-mail at janet@klondiker.com.
Please take a look at Gold Rush 21 for general information on the Yukon, traveling there, and our agenda and special programs. As the conference draws closer you will see more information posted there.
Of course you may contact me as well for information about the conference.
I look forward to meeting you in Dawson City.
With good wishes.
CHRIS POWELL Secretary/Treasurer I have had some well meaning emails lately about me throwing up my hands to The Gold Cartel. Nothing could be further from the truth. Au contraire, GATA is going all out to take on these bums. We are working furiously behind the scenes to win the day. Our "Enveloping Horn" is quietly on the march. Frank Veneroso blew the gold establishment organizations (WGC and GFMS) out of the water earlier this week with his debunking their gold demand numbers. This may seem dry and esoteric, however, it lies at the heart of the GATA argument that the crooks have been secretly flooding the market with central bank gold to manipulate the price. Since this has been done deceptively, it has to be hidden. Thus, WGC and GFMS fraudulently lowered their demand numbers. Frank buried them. Not one retort from these useless organizations. What else is new? In the weeks to come, more will surface from the GATA camp which will highlight the gold fraud and the lack of integrity in the mainstream gold world. However, today is about upbeat news. GR 21 is going gangbusters. We have 20 written acceptances and around 20 other verbal "yes" commitments. We are waiting for them to officially sign up before we send out the above letter. This means we are half sold out with 4 ½ months to go. Most importantly, the acceptances thus far have come from some of the most notable figures in the gold industry from all over the world: Hong Kong, the Philippines, South Africa, London, Switzerland, Mexico, Canada, Japan, etc. We even have one highly regarded individual coming who works for a major bullion dealer. I can honestly say by the time we do sell out, which we will, GATA will have assembled a group the likes of which has never congregated at one gold venue before. It will be a historic gold conference and one in which we hope will better position GATA to take on the powerful Gold Cartel. Taking nothing for granted, we wanted to press on until we have to say, "Please don’t send out any more invites as we cannot accept them." There are only so many hotel rooms in tiny Dawson City. If you have not done anything for GR 21 yet, please step up to the plate and contribute. GATA’s Ed Steer has done most of the work for you in his Call To Arms: A Call To Arms All you have to do is get the message to as many gold companies as you can. Some fun little ditties from our super capable event coordinator Janet Lee: So everyone knows, people in Dawson are excited about the conference. I am not over-hyping it and they are looking forward to more information as we get closer. I was offered everything from slide shows to site visits. John Gould is even sending out the conference notice to people he knows in Alaska. He will be following up with me with some contacts, which I will pass on. Except for the fact it was minus 30, it was a good trip to Dawson. I even checked out the sour toe cocktail - a Dawson tradition (like getting screeched in Newfoundland)...and yes...it is a real toe.
Janet Not only do we expect the GATA conference to be a historic event as far as gold is concerned, we hope it be a memorable, fun time for the attendees. The GATA crew is going all out to make it that way for them. GATA BE IN IT TO WIN IT! MIDAS Appendix One of the classiest and brightest men in the GATA ARMY is the Netherland’s Eric Hommelberg. He sent me the following on his new site, which I suggest you put among your web site favorites: Hi Bill,
Hereby I want to give you an update regarding my site www.golddrivers.comI’ve built this site in order to serve as a reference for the Gold Drivers Report (GDR). Let me explain first what the Gold Drivers Report is all about : The Gold Drivers Report provides a comprehensive overview of several critical drivers all pointing towards higher Gold prices the years ahead. Readers will be stunned that not one critical driver goes against Gold. When investors find out that half of all Central Bank Gold is gone in the face of those critical drivers pointing towards higher Gold prices a rush on Gold could very well emerge which could sky-rocket the price of Gold into new all-time highs. As Professor Fekete warns, "Zero supply, infinite demand". We must heed his warning. People will find out that Gold is precious indeed and hard to find. Mine supply is going down coming years no matter what the Gold price does while demand is on the rise. On top of that we're witnessing a decline of the dollar which will prop up the price of Gold even further. We're witnessing sky-rocketing Oil prices which will be permanent due to rising demand and flattening production curves. This should translate into much higher Gold prices according to the historical average of the Gold/Oil ratio. We're witnessing rising interest rates as a result of a dropping dollar which is very Gold friendly. At least but not last, maybe we're witnessing an orderly retreat from the official sector which would be EXTREMELY bullish for Gold. The Gold Anti Trust Action Committee (GATA) is all over it and is gaining credibility FAST ! You can hear their story from themselves and other esteemed experts (eg John Embry, Ferdinand Lips, James Turk, Hugo Salinas Price, Peter George, Reg Howe .....) at the Gold Rush 21 conference to be held at Dawson City in Yukon Canada on August 8 and 9. Again, not ONE critical driver goes against Gold, so investors be aware. A once in a lifetime opportunity could be upon us when it comes to Gold and Gold Mining Equities. The GDR will have a strong focus on the junior gold sector since it could provide the greatest leverage to rising gold prices. Right now they are ridiculous cheap and undervalued. As Frank Veneroso recently said : The deep undervaluation of the juniors, for all their problems, provide us with a huge opportunity for gains in the upcoming bull market in gold which we foresee. END. Mr. Gold himself (Jim Sinclair) put it a little more bluntly, he recently said : Investors stand pat because gold is going to over $1000. Gold shares will whip the behind off the legal and illegal shorts. Like Sutton in the 90s, some shares will go from C$0.16 to $57 and like Durban Deep in the 70s some will go from USD$0.36 to $36. END. Check out the details in the GDR. What else can you expect from this site ? As said before this site serves as a reference for the Gold Drivers Report (GDR). The approach is to keep readers updated on all critical drivers for Gold by means of a periodic GDR update. Coming weeks each GDR chapter will be updated. This week I’ll kick of with chapter II Gold & US$. Readers can download a ‘glossy’ PDF version of the published chapters for printing purposes. Relevant News items for the GDR will be published on the News Pages section. Readers who want to get notified on all future GDR Updates can drop a mail. Feedback and suggestions for future enhancements are welcome. Hope you'll enjoy the reading. You can go to the GDR Index page by clicking HERE.All the Best,
Eric Hommelberg
ehommelberg@golddrivers.com
-- Posted Sunday, March 27 2005
Previous Articles by Bill Murphy, Le Metropole Cafe
|
