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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (5489)	8/30/2002 12:05:17 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Gold Glitters, but Petrodollars the Hub by Gene Inger [expect Arab Oil money to become a weapon against USA] gold-eagle.com an excerpt: There is also the topic we've broached; petrodollars and political blackmail attempts using it. If anyone thinks there's not a connection between the (earlier this Summer) hints at funds being repatriated by 'certain Middle Eastern countries' and pressure on the U.S., they may be naïve. If one doesn't believe that there's been a connection in years past, between those funds recycling (because they originated here) into stock markets, finance deficits, and indirectly a type of 'demand' for their products (oil), they probably are missing part of the picture.

To: stockman_scott who wrote (5489)	8/30/2002 12:07:42 PM
From: Jim Willie CB	Respond to of 89467

Japanese fears still key for gold by Stewart Bailey Posted: 2002/08/29 \| © Miningweb 1997-2002 JOHANNESBURG – Japanese investors have begun flocking back to the sanctuary of gold as signals of a much-vaunted economic recovery continue to fade. But despite impressive demand figures for July, offtake by skittish investors has been insufficient to give bullion the impetus it needs to break out of its current low-teen trading range. According to a note published earlier today by UBS Warburg gold analyst John Reade, Japanese gold imports in July came in at 6.7 tons, an increase of 50 percent on the previous month and more than double the figure of July last year. Year on year the figures are even more impressive, with imports of 60.5t more than three times higher than in the first seven months of 2001, notwithstanding the fact that appetite for bullion among Japanese investors has tailed off appreciably from its peak in the first quarter. It is hardly surprising that bullion sales are picking up again. Exports, the only growth point in an otherwise woeful Japanese economy, are beginning to look vulnerable again as US consumer spending starts showing signs of drying up and gross domestic product growth falters. The US is the biggest market for Japanese goods. "Japan's recovery as a whole has petered out," Frank Packer, an economist at Nikko Salomon Smith Barney told Bloomberg News. "Exports will slow and the economy will revert back to contraction in the fourth and first quarters," he said. While the rising Japanese bullion demand should provide a solid underpin for the gold market, bullion's failure to react strongly to the never-ending stream bad news whichcontinues to hammer equities is puzzling. The Dow Jones has fallen for four days in a row, Nortel issued a worryingly bearish outlook for the year ahead and US economic data is almost exclusively bearish, a fact borne out by the performance of global mining groups whose fortunes remain linked to the prospect of a recovery in the US. All in all the prospect of a double-dip recession looms large and yet gold remains trapped in a tight range between $308/oz and $313/oz. One Johannesburg bullion trader says that while he remains negative on equities (the Dow Jones has lost 14 percent this year and Nasdaq 33 percent), he is not looking for a major break-out in the gold price. "Talk about war in Iraq is giving gold a firmer tone, but I'm not looking for it to run away. The fact is that the market is already long volatility," said one Johannesburg-based bullion trader. "If it goes to $320/oz I'd be a seller," he said. But there are those who are more optimistic about the prospects for the metal and on the balance of it, the absence of significant levels of producer hedging continues to indicate the long term fundamentals remain in place for the secular run in gold. One gold analyst at a major international bank in Johannesburg said the onset of new-year celebrations in Asia would be positive for the gold market, as would a shake-out of long positions on COMEX. According to today's note from UBS Warburg, the market is only 740,000 ounces net long. The Johannesburg analyst said that given the uncertainty on world equity markets and a definite resurgence in US-led aggression in the Middle East, there was room for the long position to grow. In the short term at least Standard Bank London appears to share the view. In a report published today by the bank, analysts said: "The yellow metal continues to consolidate, but with mixed views in the market place and the holiday season still upon us, gold appears to be struggling to find a clear direction. Gold should gain a level of support over the next couple of days as the long weekend approaches, with many dealers being uncomfortable going home short the yellow metal. Resistance is located around $313.25 where the 100-day moving average is located, with light support noted at $308.75."

To: stockman_scott who wrote (5489)	8/30/2002 12:09:20 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Rick Ackerman and his bearish views an excellent read 321gold.com / jim

To: stockman_scott who wrote (5489)	8/30/2002 12:10:54 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Boost in Export of Gold, Silver Jewelry TEHRAN (August 29, 2002) -- As soon as the facilities for the export of gold and silver jewelry through Mehrabad Customs were provided, the exported jewelry showed a 120 fold increase in terms of value a six fold increase in terms of weight. Director General of Mehrabad Customs Mahdi Amrollahi told IRNA here on Wednesday that once export of gold and silver jewelry were facilitated as of March 21 1999, besides the remarkable boost in their export a considerable drop in smuggled jewelry was observed. Amrollahi added, "The export of jewelry made of gold, silver and precious stones amounted to 20,000 dollars in 1997-8, which climbed to 2.3 million dollars in 2001." According to him, as of March 21 1999, concurrent with the extension of some facilities such as leaving collaterals on property and IOUs instead of cash deposits, simplifying the assessment process and goods delivery while boarding the plane, a boost was observed in the provisional import of gold and silver in compliance with the policy aimed at simplifying laws, reported IRNA. Pointing to a 77 percent drop in the smuggled gold and silver, he said, "The confiscated precious metals smuggled via Mehrabad Customs declined from 100kg in 1997 to 23kg in 2001, while a drop of 58 percent in their value from 3.065 trillion rials down to 1.3 trillion rials was observed." He referred to 20 new jobs created as a consequence of varnishing each kg of gold and converting it into jewelry and said that the increase in the export of the said jewelry over recent years has resulted in creation of at least 64,000 employment opportunities. According to him, the added the value of gold and silver ranges between 20 to 25 percent and if the industry is sponsored, its revenue over the coming 10 years will exceed that of oil.

To: stockman_scott who wrote (5489)	8/30/2002 12:27:44 PM
From: Jim Willie CB	Respond to of 89467

Gold in Transition to Currency Reapplying The Gold Cover Clause Q & A with Jim Sinclair August 26, 2002 Dear Mr. Sinclair: You said in one of your reports that gold was presently in a transition from a commodity back to its traditional role as a currency. I think that is impossible in the modern world of instant global trading and finance. It is my opinion that gold is anachronism that today is only a play toy of speculators, miners and derivative dealers as a commodity and destined to remain a commodity of specialized interest only. Jim Sinclair answers: Your opinion is what has been TAUGHT in business schools for the past three generations, so I am not surprised at all to your reaction. Yes, it is my opinion that gold bullion is in transition back to its traditional role as a currency. I will not glibly answer your position by saying that this transition is taking place as the "People's Choice" even though that is one of the important reasons why. You have witnessed the US dollar decline on the USDX from a high of almost 122 to an intraday low of almost 104 with a recovery today to 108.22. The currency of all countries functions in the market place as "The Common Share" of the country it represents. To understand what makes the dollar fluctuate consider the following: 1. Reputation of Management: is a very important criterion for common shares. Look at Martha Stewart's share price as a result of reputation challenges and the effect on a company whose fundamental factors have been strong up to the point of her challenge. The world's opinion on the capacity and intentions of the US administration as it changes during that administration will effect the international value of the dollar. 2. Competitive Yield: Just as between comparative securities, the dividend policy is a criterion for investment judgment, so it is true between currencies and their valuation. The US discount rate can be viewed as the dividend policy for the US dollar as compared to the interest rates existing for competitive currencies such as the Pound, Gold Dinar, Mark, Euro, etc., This is straightforward and easy to understand. 3. Earnings: Just as when selecting a company to invest in, earnings are a criterion versus price, so is it true for currencies. The earning of the US dollar is a combination of the condition of the "Trade Balance" and the "Current Account Balance". These are the means by which the US gains positive currency flows and builds up investment in its currency unit, the dollar. When the Trade Balance and current Account Balance are negative and growing, one considers the company, USA INC. to be showing losses on an increasing basis 4. Transparency & Ethics: This is a new point of valuation in a world almost devoid of this criterion. It, like all criteria, is relative. However, the German Chancellor recently made a statement about the business ethics of the US which did not help the dollar's valuation. With the above factors presently negative to the dollar and apparently continuing in that trend, I conclude that the technical position indicative of a rally period -- but not a reversal of the negative trend -- is correct. I therefore believe that a new low in the dollar is a reasonable expectation within the next 90 days to 180 days within a bear market that could possibly last for another 21 months. We have all seen that bear market when the starts usually do not end pleasantly. Assuming, and I do, that we are in a long-term bear market in the dollar, I conclude that there is a reasonable possibility that before this dollar bear market is over, we may well experience a most unpleasant price for the dollar. Add that the mountain of derivative sewage created by the young Turks of the geek traders association may well come under test, I can reasonably assume that the dollar may well also find itself out of fashion. We know that US equities have taken a terrible beating as a result of the outrageous greed-driven, amoral misuse of accounting regulation. In order to regain the lost psychological belief in the paper of companies run by less than desirable individuals, it was necessary to do something. That something then was primarily the demand that the CEO of the company CERTIFY the accounting audit of the company under potential civil and criminal liability. A currency is no different. It is a paper asset that MUST HAVE PSYCHOLOGY SUPPORTING IT. If the dollar in this dollar bear market takes a terrible beating sometime between now and June of 2004, there is something that can be done to help psychology to back it again. No one will deny that from the abrogation of the percentage requirement of the gold cover clause in the Nixon Administration, there has been NO control over the creation of paper money. It has been a quasi-governmental, political, industrial/defense industry decision made by those whose background is out of these occupations, The Federal Reserve System. Assuming that the dollar goes into free fall sometime in the next 21 months, an effective attempt to stave off further dollar decline would be to control the creation of money which without the Gold Cover Clause active is totally uncontrolled. The action, to expect, would be to reapply the Gold Cover Clause at say a 5% cover. That would mean that the US would have to have in the US Treasury gold whose value was equal to 5% of the total amount of paper currency outstanding (monetary aggregates) before it could expand them. If 5% gold cover of money outstanding did not steady the currency, then step to 6% or 7% or whatever was required to reverse the downtrend. Gold can reenter the system because it is already there, but at 0%. The Gold Cover Clause is still law, but only adjusted to 0% sterility. The move to steady the equities markets was to require the CEOs to lay their personal freedom and total personal assets on the line of good auditing. In a similar sense of CONTROL, the Gold Cover Clause will be used to control the uncontrolled creation of paper money at the whim of quasi economic political elite. Assuming, and I do, that the US dollar will go into free fall at some time in the next 21 months, the only method of stopping the problem will be to contain by law the amount of dollars outstanding. You reverse a situation of oversupply by limiting the supply. Dollar weakness stems from too many dollars outstanding (supply) and a loss of psychological (loss of demand) commitment to those dollars. Reapplication of the Gold Cover Clause will limit dollar supply and therefore resuscitate dollar psychology.