| October 31 – Gold $464.30
down $8 - Silver $7.52 down 25 cents
Nightmare On Halloween/What’s
Behind The Barrick Bid For Placer Doom
He that wrestles with us strengthens
our nerves, and sharpens our skill. Our antagonist
is our helper...Edmund Burke
GO GATA!!!
Even though the dollar was firmer across
the board, the London AM Fix came in at $472.65 and
only slightly below the Friday close in New York.
Time and time again we see cash market pricing which
confirms considerable demand for gold above the $470
price level.
Like a broken record, The Gold Cartel
wasted little time going after gold and silver following
the Fix. Called lower, both gold and silver were hit
early with gold falling more than $2 and silver 7
cents. There are major holidays for both the Indians
and Muslims early this week. If The Gold Cartel is
going to make a move, it should come soon.
One of the lead stories of all on Planet
Wall Street was the hostile bid by Barrick Gold of
Placer Doom:
07:38 PDG
Follow-up: ABX offers $9.2B in hostile bid for PDG;
$9.5B fully diluted; signs agreement with GG for certain
PDG assets (16.56)
The stock/cash bid of $20.50, represents
a 23.8% premium to prior close for PDG. Deal is expected
to be accretive to ABX's NAV, earnings and cashflow.
ABX says the bid is $9.5B on a fully diluted basis.
PDG shareholders will have right to elect to receive
$20.50/share in cash or 0.7518 ABX stock plus $0.05
in cash for each PDG share, subject to proration.
The maximum amount of cash to be paid by ABX will
be$1.224B and the maximum number of shares to be issued
by ABX will be 303M, including the conversion of PDG's
outstanding convertible debt and options.
Assuming full pro ration of these amounts
would result in $2.65 in cash and 0.6562 of ABX stock
for each PDG. Separately, ABX and GG have entered
into an agreement where GG will purchase certain PDG
subsidiaries and an interest in a development project
which GG will pay ABX $1.35B in cash. The total synergies
from ABX's purchase of PDG and the ABX/GG agreement
are estimated to be $240M annually. GG expects that
if the deal goes through, GG's annual gold production
would increase by approx. 50% to more than 2M ounces
ata total cash cost of $150/oz. RBC Capital and Merrill
advised ABX. ABX is hosting a conference call at 9
ET. Dial-in: 800.215.1640 or 415.904.7360. GG is hosting
a conference call at 10 ET. Dial-in: 877.888.4210
or 416.695.5259. Note that PDG has not yet commented
on the hostile bid.
* * * * *
08:29 ABX
ABX CEO Greg Wilkins discusses hostile bid for PDG
(27.20)
Wilkins says the timing for the hostile offer is "perfect"
for ABX, noting that PDG assets are a good fit and
the companies operate in many of the same countries.
When asked about the regulatory environment in Canada,
Wilkins says that the Securities Commission will give
PDG time to search for an alternative, but after that
expires, the Commission has shown in the past that
it can push for PDG to eliminate the shareholder rights
plan. Wilkins says he was not aware of any other suitor
for PDG.
* * * * *
What do these proposed dealings
mean?
1. The first thing to do is discount
much of the pundit analysis of what is going on here.
The mainstream gold analysts will come up with their
standard pabulum. If they are going to let Barrick
get away with saying their hedge book is down to 6.6
million ounces if you don’t count their Pascua-Lama
mine in South America, Barrick must realize they can
say anything and get away with it from the lightweight
mainstream gold pundits. These obsequious folks refuse
to challenge anything really worth getting into. I
say that because Barrick’s hedge book is actually
around 13 million ounces, not the 6.6 million ounces
CEO Wilkins says it is. When Barrick blows up some
day, this disinformation should be used against them
in another lawsuit.
2. No matter what the spin, it is
bullish for the gold price. The proposed merger tells
us The Gold Cartel (Barrick) believes the price of
gold is going much higher and is scrambling to secure
more supply.
3. Many of us on Planet GATA will
spin the takeover as a desperate move by Barrick to
secure more gold supply to balance out its hedgebook
which is going further and further underwater as the
price of gold readies to take out $500 per ounce.
The general commentary from the mainstream gold pundit
should spin this announcement as a bullish development
for the gold market, but will not delve into the hedge
book issue.
4. What doesn’t quite fit
is Placer’s hedge book is very large, not in
great shape, and probably toxic. This bid is in contrast
with Barrick taking over Homestake years ago with
all its unhedged ounces.
5. Goldcorp’s interplay in
this takeover bid explains why their CEO Ian Telfer
won’t give GATA the time of day. His interplay
is with The Gold Cartel’s Barrick Gold….
6. Ah Ha! I think I’ve got
it. Been scratching my head here to figure out what
is actually developing behind the scenes. The light
bulb just went off.
Barrick is in bed with JP Morgan
Chase which is the US Government’s/Fed’s
principal bank. Barrick’s hedge book has been
structured so that it can be rolled over ad infinitum.
Barrick delights in this fact and doesn’t mention
its growing hedgebook liability in its public commentaries
about the firm.
As we all know, Barrick is politically
connected at the highest levels of government. Former
President Bush, former Clinton power broker Vernon
Jordon, former Canadian Prime Minister Brian Mulroney,
Germany’s former President Helmut Kohl, etc.,
have all been on one of its Board of Directors at
various times ... and some of them still are. When
you mention Barrick Gold, you can include the US Government
policy towards gold and those assigned to carry out
that policy, such as JP Morgan Chase. It is one vast,
insidious money/power/political club.
The Gold Cartel knows their ill-conceived
scheme to manipulate and suppress the price of gold
is going down. The price of gold is going to take
off in the months and years ahead. While Barrick’s
hedge book may have been given immunity from blowing
up and causing gold derivatives problems, other large
hedgers have not been accorded this luxury. Placer
Doom’s significant hedge book is potentially
one of the most problematic in that sense. By bringing
Placer under the auspices of the protection of The
Gold Cartel (Barrick), they are reducing the coming
derivatives problems associated with toxic hedges.
It also will give Barrick more maneuverability and
clout as time goes on.
This is just a guesstimate on my
part. However, it all makes sense to me now.
The PM London Fix just came in at
$470.75. This is impressive as gold is under fire…
Not so fast. Right on cue, The Gold
Cartel has made its move minutes after the PM Fix.
Gold was just nailed for another $7 to the downside.
Once again The Gold Cartel pulls off a blatant raid
on the price after the physical market pricing was
concluded for the day. Perhaps newer Café members
will understand why I have such contempt for the mainstream
gold world pundits who are so negligent about reporting
what is actually going on and when.
The Barrick/Placer Dome news can
only be analyzed as bullish for the gold price. MIDAS
recently reported how even a former Gold Cartel bullion
dealer has admitted the bullion banks will go all
out to diminish excitement over the gold price and
the shares … and do so all the time. Despite
gold being $2 lower this morning, the shares were
mostly higher as a result of the Barrick announcement.
Not for long. They were just knocked for a loop when
gold was sent to the dumpster. This is beyond sickening.
The intrigue grows that all is not
kosher regarding this Barrick/Placer/Goldcorp deal:
NEW YORK, Oct 31 (Reuters) - Goldcorp
Inc. on Monday said Robert McEwen resigned as chairman
and a director, effective Saturday, and named director
Doug Holtby as its new chairman.
Holtby has been a director of miner
Goldcorp and predecessor company Wheaton River since
June 2003, and has served as the chair of the audit
committee of Goldcorp and Wheaton River.
Holtby is president and chief executive
of two private investment companies, Arbutus Road
and MKC Capital.
McEwen said in a statement that
since giving up the chief executive officer role in
February 2005 following Goldcorp's merger with Wheaton
River, he has been seeking new business endeavours.
McEwen said he has assumed the role
of chairman and CEO of two junior energy exploration
companies.
-END-
As CEO of Goldcorp, McEwen actually
was a financial supporter of GATA, and wished us well.
Rob McEwen attended our cocktail party at Hy’s
Steak House in Toronto a year ago.
This is all very fishy. Can’t
see any way all of this proposed deal will not be
approved and go though, not with the Canadian and
US money and political power behind the proposed merger.
JUST IN – 10:30 AM EST
The Comex floor reported they have
rarely ever seen anything like it. GOLDMAN SACHS has
been bombing every bid in sight and burying the price.
It is not the rest of the "trade" doing
the damage. They are actually sitting on the bids.
It is almost exclusively GOLDMAN SACHS doing the major
selling. Never received such a definitive, exclamatory
report like this from the Comex floor before re a
lone seller ... not one other time as emphatic as
this in the last 7 years.
Our veteran floor source relayed
that the GOLDMAN SACHS bombing of the gold price was
related to the Barrick/Placer announcement. The nefarious
side to this besides my earlier MIDAS thoughts is
that The Gold Cartel wants to keep the price as low
as they can to demoralize the gold players/industry
to make it easier for this deal to go through. This
line of thinking (from another Café source)
fits in perfectly with the rest of the thinking of
many of us on Planet GATA.
Not only was it unusual for Goldman
Sachs to stand out SO MUCH as the noted single-handed
bomber of the gold price today, it was accompanied
by the change of the trading pattern mentioned to
you in this column these past many weeks. It was like
the old days going into the close. No late rallies
at all. The Goldman Sachs induced price butchering
was followed by selling into the closes.
From a fellow Café member:
Well now didn't I say this to you
last year ? :-) .........
"In that regard you have to
wonder if The Gold Cartel and PPT read the MIDAS commentary
for their clues when to attack?"
Well of course they read you! The
PPT guys are cheaters and you are right at the front
of the Gold crowd so what else would the PPT do?......in
fact your site is probably one of the best indicators
for them!
Paul
Perhaps so Paul.
The gold open interest fell 433
contracts to 346,308, while the silver open interest
rose 1088 contracts to 142,778. The dichotomy of the
two OI patterns continues.
Hudson River and Saban went after
silver when gold was attacked. There were no bids.
Morgan Stanley, a huge silver bull, was nowhere to
be found.
** Keep an eye out for some possible
significant management changes this week at a well
known international bank, one which is also a bullion
dealer.
The John Brimelow
Report
Happy Diwali, &
Eid - Happier TOCOM?
Monday, October 31,
2005
Indian ex-duty premiums: AM $2.72,
PM $2.16, with world gold at $471.95 and $472.40.
Adequate, and slightly too low, for legal imports.
The rupee softened in the afternoon, counter-intuitively
in view of a 2.69% rally in the Bombay Stock Exchange
and softer Oil prices.
Tomorrow is Diwali, the most important
Hindu festival of the year, and one which in my experience
is the most scrupulously observed. No doubt today’s
late trading was effected too. The Muslim world will
be closed for the latter part of the week celebrating
the end of Ramadan.
The Bears, in other words, have
a pretty free paw this week, with the key physical
markets out. The relative importance of the Islamic
and Hindu markets to gold has, of course never been
greater.
But of course any price set –
or engineered – while such crucial buyers are
unsighted is not likely to have lasting significance.
TOCOM, which missed Friday’s
Western Hemisphere gyrations, was unimpressed this
morning. Volume was static, equaling 19,357 Comex
(+1.4%): the active contract rose 1 yen and world
gold dipped $1.10 from the NY close. Open interest
rose 1,008 NY contracts – according to Mitsubishi’s
data the public added 1.1 tonne to its long.
Tomorrow could be a different story.
With the yen down 70 bps from the Tokyo close –
a new 25-month low - and world gold down some $6,
the stage is set for some classical Japanese bottom-fishing.
As noted on Friday, gold ran into
a classic post-Europe selling raid, which however
was defeated apparently by the physical market. ScotiaMocatta
observed:
"The price started to fall
encouraging locals to go short as well which helped
force a session low of 469.20/469.70. However, physical
buyers soon came into the market taking the price
back to the 471.00 area …until New York dealers
entered the market on the buy side. The dealer buying
caused an end of the week scramble to cover short
positions and in turn took gold to the session high
of 473.40/473.90"
On volume of 44,450 open interest,
open interest edged down 433 contracts: not much in
the way of long term shorts appeared to be covered.
Monday of course has seen an even
more abrupt and more successful post-PM fix raid.
Neither of the reasons advanced for it withstand analysis.
The CFTC data in fact revealed a distinct moderation
in the spec long. Barclays commented:
"In the week ending Tuesday
25 October, CFTC data revealed that the rising trend
in gold’s speculative net long position was
reversed with a reduction of 17.1K contracts resulting
from long liquidation (17.6K contracts), and modest
short covering (-0.5K contracts)."
The most insightful analyst on CFTC
data felt moved to put out a piece this morning pointing
out the large spec net position had fallen below 500
tonnes for the first time since mid September, and
suggesting that liquidation might be almost over.
While the dollar did continue to participate in the
extraordinary outburst of Wall Street triumphalism
of the past two sessions, the acute drop after 10
am NY time was actually in Euro/gold, suggesting a
non – currency driven seller.
So the Bears have learned about
Hindu and Muslim festivals. Have they grasped the
propensities of TOCOM futures traders?
JB
CARTEL CAPITULATION WATCH
Here is a perfect example of why
the mainstream gold world deserves such contempt.
Their reporting on what actually is transpiring in
the gold pits is nothing more than blatant disinformation:
DJ MARKET TALK: Fund Liquidation,
Strong USD Pressure Gold Dn
1541 GMT [Dow Jones] - Comex gold
is trading near its lowest level in a week at $468.30
an ounce, down $6.40 on the day, basis the Dec contract.
Leonard Kaplan of Prospector Asset Management says
funds are aggressively liquidating long positions
ahead of the Federal Reserve meeting Tuesday where
interest...
-END-
Kaplan is such a Planet Wall Street
stooge, the same guy who said for years gold could
only go up because of a weakening dollar. Sure the
funds sold late. However, that is not why the price
was mauled.
The DOW rose early and then refused
to advance further, closing at 10,440, up 37. The
DOG soared 30 to 2120. After the close, Dell disappointed,
like most of the big DOG names have recently.
Jesse notes:
Mutual funds close their fiscal
year today. I believe that the close this afternoon
will determine many of the mutual funds' metrics,
most likely including bonuses.
***
This column makes mention of Dennis
Gartman from time to time because he has a vast following
and is extensively covered by the media. He is short
the stock market and very long gold. He also publicly
mocks Planet GATA for our views on the PPT and the
manipulation of the gold price by the cabal. A few
more days like today and he will be forced to become
a vociferous advocate of the Planet GATA line of thinking
on the markets. From his commentary this morning:
"We know not what to make of
this abjectly random violence in the markets, for
we cannot recall a period when prices moved this swiftly,
this markedly and this randomly. ...we find this randomness
disconcerting ... and rather embarrassing given that
we were short of US shares on Thursday and looked
rather prescient, only to appear rather badly out-of-step
by mid-morning Friday."
-END-
You are even more badly out of step
this afternoon Dennis G. Rational analysis of the
US stock market and gold market is useless in the
short-term. It hasn’t done me any more good
lately than it has done you. The difference is I know
why my short-term market thinking is not panning out.
You, on the other hand, refuse to deal with the obvious.
One plus for the market bulls today
was a sharp drop in crude oil and a close below $60
at $59.76 per barrel.
The dollar jumped to 89.97, up .47
with spot yen making new lows for its move at 116.39,
down .73. The spot euro dropped .80 to 119.87.
US economic statistics:
08:30 Personal Income 1.7% vs. consensus
0.3%; Spending 0.5% vs. consensus 0.5%
Prior income revised to (0.9%) from (0.1%); no revision
to Spending (0.5%). PCE m/o/m was 0.2% vs. consensus
0.1%. Prior PCE revised to 0.1% from0.2%.
* * * * *
WASHINGTON (Reuters) - Consumer
spending rose 0.5 percent last month as post-hurricane
insurance payments led to the biggest jump in income
in 10 months, a government report showed on Monday.
Personal income jumped 1.7 percent,
the biggest rise since December 2004, as insurance
payments in the wake of hurricanes Katrina and Rita
rose at a $120 billion annual rate, the Commerce Department
said.
The gain in spending matched expectations
on Wall Street, but the increase in income handily
outstripped forecasts for a 0.3 percent rise.
The income gain, however, followed
a downwardly revised 0.9 percent drop in August that
reflected plummeting rental and personal business
income after the storms. Rental and proprietors' income
declined again last month, but not as steeply.
While spending rose last month,
the increase was more than accounted for by surging
energy prices. Adjusted for inflation, spending fell
0.4 percent after a 1 percent August drop.
The department's inflation measure
- closely watched by policy-makers at the Federal
Reserve - shot up 0.9 percent, the biggest rise since
February 1981.
But excluding food and energy, the
so-called PCE price index advanced just 0.2 percent.
Over the past year, this core price index has risen
2 percent, a level considered to be at the upper end
of the Fed's comfort zone.
The data released on Monday was
incorporated in a report on third-quarter economic
growth released on Friday, which could lessen its
value to financial markets trying to determine the
direction of the economy and interest rates.
The saving rate - the percentage
of after-tax income Americans sock away - remained
in negative territory in September for a fourth straight
month.
The department said the saving rate
percentage was minus 0.4 last month, after bottoming
out at a minus 1.8 in August.
-END-
9:58 Chicago Purchasing Manager's
reported 62.9 vs. consensus 57.4
Prior reading was 60.5.
* * * * *
The latest input on the Chinese
economy:
BEIJING, Oct 31 (Reuters) - China's
current account surplus for the first half of the
year rose ninefold, topping 8 percent of gross domestic
product as booming merchandise exports swamped a deficit
in services trade, official figures showed on Monday.
The data underscored the battle
Beijing faces to cut the country's billowing balance-of-payments
surplus, which is putting persistent upward pressure
on the yuan despite July's 2.1 percent revaluation
and fuelling trade friction with the United States,
analysts said.
The State Administration of Foreign
Exchange said China's current account surplus swelled
to $67.26 billion, up from $7.47 billion a year earlier
and almost as great as the $68.7 billion surplus for
all of 2004.
"The message is already pretty
clear: the current account surplus will rise significantly
this year," said Yiping Huang, an economist at
Citigroup in Hong Kong.
The first-half surplus was equivalent
to 8.1 percent of China's first-half GDP, which totalled
$832.37 billion.
China is under strong pressure from
the United States to reduce the surplus by letting
the yuan rise faster…
-END-
From Jesse:
The LBO of Main Street, USA
Leveraged Buy Out: a financial strategy
involving the acquisitions of an asset or business,
utilizing a significant amount of debt, and little
or no equity.
Now Playing at Jesse's Charts:
http://www.geocities.com/arthurcutten/jesse.html
-END-
From www.urbansurvival.com(George
Ure):
Cheney to Court?
As we reported last week, only Scooter
Libby was indicted by the Grand Jury which has been
looking at the PlameGate case. Now,
there's a report from the Drudge Report that Dick
Cheney will be called in open court to testify
- a move which sets up a major showdown on "executive
privilege" and which may undermine Cheney's ability
to lead the neocon agenda in DC (and the Middle East).
Meantime, as we have speculated
in the past, there is growing speculation that the
Fitzgerald Grand Jury is only foreplay to the McNulty
Grand Jury which looks
to be investigating the forged Niger uranium documents
- documents that were key in getting the U.S. to march
into Iraq.
All of which boils down to a confounding
legal stew as we read it: Consider for a moment that
the Fitzgerald Grand Jury may have merely found basic
information which then opens up the wider probe of
who told what lies to rope us into war. The report
that Cheney may be called - and the resulting fight
over executive powers - all leads us to the conclusion
that "Official A" referred to in the indictment
might be you-know-who.
Here's something to seriously ponder:
If it was shown conclusively that forged documents
and "doctored intelligence" was used to
"sell" the Iraq war to the American public,
would that constitute treason, breach of the public
trust, or what....and would it be actionable against
all those involved?
We have heard of foreign speculation
that Presidential
Succession might have to go all the way to Secretary
of Agriculture Mike Johanns to find someone untainted
by the smell that's beginning to emerge. Of course,
the workout of this is now looking like many months,
and perhaps a year or longer. Johanns
sounds like our kind of folk: Works hard during the
week, "relaxes poorly" according to his
wife, and on weekends makes a serious contribution
to housekeeping. Yup, interesting that news of
him is percolating up around the fringes of mainstream
media
-END-
Oct.
Is Deadliest Month in Iraq Since Jan.
AP - 50 minutes ago
BAGHDAD, Iraq - Six American soldiers
were killed in separate attacks Monday and a Marine
died in action the day before, making October the
deadliest month for U.S. troops in Iraq since January.
U.S. jets struck insurgent targets near the Syrian
border and at least six people were killed. Four soldiers
from the Army's Task Force Baghdad soldiers died Monday
when their patrol struck a roadside bomb in Youssifiyah,
12 miles south of Baghdad in an area known as the
"triangle of death."
-END-
How can anyone say the situation
in Iraq is improving, with the war supposedly over
for more than 2 ½ years? One point I would
like to make clear, especially to newer Café
members. I am not a Democrat, nor a liberal (not that
there is anything wrong with being either). My delving
into the war subject is because some day it is going
to have a monumental impact on US financial markets.
Before the war started, I ranted
against it because it seemed to me the trumpeting
up of the reasons to go to war in Iraq were eerily
like what was behind the manipulation of the price
of gold … that both were bogus and un-American.
As time goes by, it looks more and more like this
is, and was, the case. The gold fraud has been apparent
for a long time now. The Iraq one is just beginning
to unfold and gain momentum.
What Goldman Sachs did to the price
of gold today is essentially an effort to crush dissent
for those who believe in free markets. The message
is if you oppose them they will make you pay for it.
It is very similar to what the Bush Administration
did to those who challenged them on the reasons for
going to war. If this doesn’t scare you to some
degree about where America is headed, then I don’t
know what will. It is nightmare time on Halloween
day for all Americans!
When we review what occurred the
past two business days in all the US financial markets,
we can view the extent of the market engineering,
which is phenomenal (not an exaggeration):
*The stock market went into a rocket
ship mode rally.
*The dollar was sent back to the
upside near its highs.
*The rise in intermediate/long-term
interest rates was checked.
*Gold and silver were battered.
The Bush Administration and honchos
are going all out to turn the opinion polls around
and to build political momentum again. If the US stock
and real estate markets go against them in a significant
way, they know they are done for. Thus, they exploited
the news the past two days to go all out and bulk
up their standing with the American public. This included
sending Goldman "Hannibal Lecter" Sachs
to bury the gold price all by themselves on a day
in which the featured buyers, the Indians and Arabs,
were tending to festival and religious matters.
This will end very badly some day
for the Orwellians and us Americans.
October could be worst for hedge
funds since 2000
LONDON, Oct 31 (Reuters) - Tumbling
stock prices and a high-profile bankruptcy in the
United States mean October is likely to be the worst
month for hedge funds since the 2000 equities crash,
industry participants say.
However, they do not expect any
losses this month to trigger a mass investor exodus
from hedge funds, the investment vehicles which some
see as risky because they can use derivatives, short
sell and borrow or leverage to take bigger positions.
Expectations are that average losses
will be between 2 and 3 percent, which would be the
highest since March and April 2000 when the technology
bubble burst and hedge funds were left nursing losses
of 2.1 and 4.6 percent respectively, according to
Credit Suisse First Boston Tremont Index…
-END-
This development is HUGE for us
gold bulls as this new market will affect The Gold
Cartel’s ability to maneuver as freely as they
have in years past:
Dubai still enhancing its gold market
position
Posted: '31-OCT-05 09:13' GMT © Mineweb 1997-2004
The gold futures contract will go
live on November 21. When we last wrote on this subject,
the Exchange was reporting considerable interest from
a wide range of market members. The exchange will
trade from 10:00am to 11:00pm local time Monday to
Friday, thus overlapping with the Far East and North
American markets. And a new development is that the
Exchange will also open on Saturdays and Sundays as
of early 2006 (although with shorter trading hours),
thus giving traders access to a week-end market.
http://www.mineweb.net/sections/gold_silver/511515.htm-END-
Rhody on the lease rates:
Hi Bill:
Lease rates have changed little from last week. Only
gold is in incipient backwardation, with the one month
to one year spread easing to .08% Knowing what we
do about the massive deliveries taking place on COMEX
in gold and silver (35 Moz of silver have changed
ownership and 1.1 Moz of gold, about one third of
COMEX stockpiles were delivered this month or last),
the lease rates patterns are just too benign to be
true. It is my belief that lease rates are as managed
as any other financial instrument in the western world,
and the management has become more intense over the
past 5 years. Lease rates in precious metals are pivotal
in maintaining the illusion that everything is just
fine in financial land. The lease rate curves are
completely normal and benign, except in gold, but
we know that the entire system is stressed to the
limit.
The problem here is that in contrast
to ten years ago, the lease rates give no warning
of commercial shorting blitzes, and I fear will give
no warning when the CABAL begins to lose control.
We shall see.
Regards, Rhody.
http://www.kitco.com/market/lfrate.html
Hi Bill:
I just sent in my comment on lease
rates, and then had another look at gold and silver.
There was no advance warning in silver lease rates
of this pending bear attack, so either this was accomplished
entirely with futures or silver was leased at rates
that were completely artificial and sold into the
spot market.
Regards, Rhody.
http://www.kitco.com/charts/livesilver.html
In case you missed it:
Click
here: Mexico Mulls Silver Lining Against Currency
Crash
***
A number of Café members
have inquired about the Blanchard suit against Barrick
Gold in New Orleans Federal Court:
By MATT SEDENSKY and RUSS BYNUM,
Associated Press Writers Sat Oct 29, 5:57 PM ET
NEW ORLEANS - In his third day back
on the bench since Hurricane Katrina struck two months
ago, Criminal District Judge Benedict Willard opens
court by entering a plea of his own — for patience.
"We're going to do as much
as we can, with the limited resources," Willard
says of this battered city's struggle to resuscitate
a justice system crippled by the monster storm.
-END-
Hard for anything to happen in that
environment.
Kudos to GATA’s Chris Powell
for his retort to the NY Times assault on the gold
mining industry in this email sent to the Café
membership:
[GATA] The gold issue is a lot more
complicated than The New York Times lets on
***
Numerous well deserved complements
were sent Chris's way:
"VERY WELL SAID AND WELL WRITTEN
-- You should send this to the NYTimes."
"Powell should write an op
ed piece for the NYT on this topic. BTW, he writes
eloquently."
Chris did send it to the NY Times.
We shall see.
John Brimelow called this afternoon
to say the gold volume on the Comex surged in the
last hour to 19,000 contracts. The Gold Cartel made
sure gold closed on its lows.
From Eric Hommelberg:
Hi Bill,
The HUI held up quite well today in the face of a
$8 drop in Gold.
In my article HUI – Not Dead
Yet ! I said there’s no rush to sell gold stocks.
I still stick to that!
Why ? The Gold/HUI chart tells me.
Its one of my favorite indicators. Already since May
this year the Gold/HUI ratio in trending down. This
means that the gold shares are outperforming Gold…
The month of October however showed an inversed picture
which is a rally of the Gold/HUI ratio instead of
the desired drop.. But it seems that the October rally
is on its last legs and if the Gold/HUI ratio fails
to breach its 200 dma to the upside it will continue
its down-trend which started mid-May. The HUI performance
of today is pointing towards a further decline of
the Gold/HUI ratio indeed.
Below are the Gold/HUI ratio and
HUI charts.. Notice the HUI chart, this formation
should solve itself one way or the other within a
week. My guess is to the upside for reasons mentioned
above..
Furthermore I would like to let
you know that we’ve just published our first
monthly issue of ‘The Gold Discovery Letter’
which covers Gold/HUI analysis in depth and current
exciting discovery cases.
Readers interested can download
a free copy at :
http://www.golddrivers.com/GDRUpdates/gdrupdates.htm
All the best,
Eric
It was a nightmare Halloween for
our camp with the trick on us, courtesy of Goldman
Sachs and The Gold Cartel. It is an outrage on a day
which the surprise Barrick news will be interpreted
bullishly. No other Wall Street sector would ever
trade like this. Unfortunately only the GATA ARMY
will express outrage at what is going on and articulate
why. While those of us who are infuriated have every
right to feel this way at the moment, gold and silver
should not stay down very long. The gold/silver fundamentals
are too compellingly bullish. The assault on contract
highs for gold and silver will resume shortly. Our
treats are still to come and they will be bonanza
ones.
Nightmare Halloween for my thoughts
on the markets too. Bullish on oil, gold and silver.
Bearish on the US stock market. Bad Day At Black Rock.
Bowed, yet not broken. Big picture, nothing has not
changed one bit. At least for gold, silver and the
future direction of the stock market.
There is good reason to believe
The Gold Cartel manages the gold shares as part of
their manipulation of the gold price. The gold shares
have acted unreasonably weak of late vis-à-vis
the price. Now we know why. The Gold Cartel had planned
to bury the prices of gold and silver today and sent
in Goldman Sachs as their hatchet man to get the job
done this morning.
Considering how gold and silver
were brutalized, the shares held their own. Most likely
due to the Barrick/Placer news and to covering of
shorts by those manipulating the shares as part of
The Gold Cartel's drill. The XAU rose 1.04 to 107.84,
mainly due to the strength of Placer and the HUI only
lost 1.36 to 222.84. Support at 220 held nicely.
HUI
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hui&sid=0&o_symb=hui&freq=1&time=8
The bid by Barrick for Place is
likely to inject some excitement in the gold share
sector and even in the moribund explorations. This
is a time to focus on the gold and silver shares,
not run from them.
GATA BE IN IT TO WIN IT!
MIDAS
Appendix
Hi Bill,
Hope you are holding up well during this most recent
assault upon gold and silver. I am going to hazard
a wild guess that today's $8.00 takedown in gold ($00.25
in silver) is connected to tomorrow's Fed meeting...
Duh, can the timing of these interventions be any
more obvious? These guys are broadcasting their power
and control over perceived inflation and setting up
their justification for no increase to the Fed rate.
The energy villain has been mostly contained, so now
the standard inflation benchmark, gold, must also
be defeated. This will enable Wall Street to achieve
their lustfully craved Santa Clause rally and improve
the perception of the U.S. economy. It's a win-win
situation for the establishment and the President's
falling popularity. Economic fundamentals, a.k.a.
reality, will just have to be put on hold till after
the holidays. The script for this fairy tale world
in which we live has been written to satisfy a naive
populous, which has the mind set of a ten year old
spoiled child. There is no accountability, no limit
to deficit spending, no cause and relation, just fun,
fun, and more fun for the children. Who needs hard
assets and a hedge against inflation when the stock
indices and government statistics are screaming prosperity?
Everything is fine, matter of fact; it's wonderful!
Makes me wonder what is really known about the ensuing
Avian flu pandemic and other potential geopolitical,
world changing events. It is all obfuscation and diversion,
which supercharges my usually low paranoia. We sure
do live in interesting times.
Rich C.
Good evening Bill,
Found some data on the U.S. Mint’s 2003 and
2004 annual report that you and fellow readers might
find interesting. The following information was copied
from the report:
------------------------------------------------------------------------------------------------------------
UNIT COST OF PRODUCING AND DISTRIBUTING
COINS
FOR THE YEAR ENDED SEPTEMBER 30,
2004
Penny Nickel Dime Quarter Half Dollar
Cost of Goods Sold $0.0090 $0.0446
$0.0212 $0.0466 $0.1101 $0.0984
General & Administrative 0.0001
0.0006 0.0100 0.0257 0.0569 0.1114
Distribution to FRB 0.0002 0.0004
0.0002 0.0010 0.0027 0.0016
Total Cost per Unit $0.0093 $0.0456
$0.0314 $0.0733 $0.1697 $0.2114
DEPARTMENT OF THE TREASURY
UNITED STATES MINT
NOTES TO THE SCHEDULE OF CUSTODIAL
GOLD AND SILVER RESERVES
AS OF SEPTEMBER 30, 2004 AND 2003
Note 2. Gold and Silver Reserves
The gold and silver reserves reported
in this Schedule are exclusive of the gold and silver
reserves considered to tie operating inventory in
the United States Mint's financial records and of
the Treasury gold held by the FRI. The custodial gold
and silver reserves included in this Schedule are
primarily in bar form, but may occasionally be in
coin or other form. The custodial reserves also include
foreign gold coins that have been held by Treasury
for many years.
The gold and silver reserves are
reported in this Schedule at the lower of cost or
market value. Absent historical records to determine
the acquisition cost of the gold and silver over the
decades, the reserves are valued at the rates stated
in U.S. Code Title 31, Sections 5116 and 5117 (statutory
rates) which are $42.2222 per Fine Troy Ounce (FTO)
of gold and $1.292929292 per FTO of silver. An offsetting
liability is also reported for these assets.
At September 30, 2004 and 2003,
the market value of gold was $415.65 per FTO and $388.00
per FTO respectively. Gold inventories consisted of
the following at September 30:
FTO Statutory Value Market Value
2004 245,262,897.04 $10,355,539,091
$101,943,523,155
2003 245,262,897.04 $10,355,539,091
$ 95,162,004,052
At September 30, 2004 and 2003,
the market value of silver was $6.6650 per FTO and
$5.1150 per FTO respectively. Silver inventories consisted
of the following at September 30:
FTO Statutory Value Market Value
2004 7,075,171.14 $9,147,696 $47,156,016
2003 7,075,171.14 $9,147,696 $36,189,500
The combined gold and silver custodial
reserves consisted of the following at September 30:
Statutory Value Market Value
2004 $10,364,686,787 $101,990,679,171
2003 $10,364,686,787 $ 95,198,193,552
In prior years, custodial gold and
silver FTOs were transferred to the PEF for numismatic
operations. The PEF is responsible for either replenishing
the custodial reserves with newly mined gold or paying
the Treasury General Fund for the custodial reserves
transferred to the PEF for numismatic operations.
There were no such transfers during FY 2004 and 2003.
Supplemental Information per Public
Law 107-201
Public Law 107-201 (July 23, 2002)
authorized the United States Mint to purchase silver
on the open market to mint coins when the Strategic
Stockpile of silver was depleted. The law requires
annual reporting of the amount of silver purchased
on the open market by fiscal year. The following are
purchases for FY 2003 and FY 2004:
Quantity (FTO) Market Value
FY 2003 9,709,426.5470 $ 45,663,721.33
FY 2004 12,968,078.1850 $ 81,939,233.25
----------------------------------------------------------------------------------------------------------------------------------------------------
The complete report can be viewed
at http://www.usmint.gov/downloads/about/annual_report/2004AnnualReport.pdf
The above PDF file is more readable. My cut and paste
imported some mistakes which I have hopefully corrected.
A couple of interesting points about
this report. The cost of minting a penny is 0.93 cents
and the cost of minting a nickel is 4.56 cents. The
government will soon be minting these at a loss if
they aren’t already. The paragraph which begins
"in prior years" states that the Mint’s
Public Enterprise Fund (PEF) used to get its gold
from the treasury. They conveniently leave out where
the have got the gold for the last 2 years. Either
the Mint is drawing down their stocks or they are
buying on the open market. Why the switch in procedure?
In recent years they have used about ½ million
ounces per annum (17 Tons). The last point is that
they bought 12.9 million ounces of silver from the
open market in 2004. This is more than the annual
mintage of silver eagles for any year through 2003.
It would be interesting to know how the CPM and Silver
Institutes surveys compare to this quantity.
I have always enjoyed the daily
Midas, but even more so recently. I think a storm
is brewing in the west.
-Bryant
***
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