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And how did gold do for the week? If you study the Kitco gold graph daily you will notice that every time the gold price comes down there is a sharp spike back up. This is additional evidence that confirms a strengthening & developing gold bull market as there continues to be increasing support for gold as the price dips. And as we keep saying repeatedly 400 is slowly becoming a FLOOR price for gold & not a ceiling. Very important to absorb this price action as these facts help us to portend the longer term trend for a higher & stronger gold price. Well, a few folks reaped a golden pot for the week. Anyway, for those lucky souls fortunate enough to have appeared on the Oprah Winfrey Show last week. "Talk show host Oprah Winfrey celebrated the premiere of her 19th season Monday by surprising each of her 276 audience members with a new car." AP, Fox News, 9-13-2004 And I know there are those who would quickly write this off as a PR stunt & say "so what?" "Winfrey said the audience members were chosen because their friends or family had written to the show about their need for a new car." AP, Fox News, 9-13-2004 We talk repeatedly about how it is always important to remember that there are more important things than gold & making money. "In other segments on the show, Winfrey surprised a 20-year-old girl who had spent years in foster care & homeless shelters with a four-year college scholarship, a makeover & $10,000 in clothes. And a family with eight foster children who were going to be kicked out of the house they were renting were given $130,000 to buy & repair the home." I think Oprah sets a good example of where our priorities should always reside. And there is nothing wrong with that. But let's get back to gold. Are you worried about the gold price & its future direction? Then continue to keep your attention focused on China & Asia. A lot continuing to happen over there though you will never hear about it via most western news sources. "…China will further open up the market & quicken its steps toward getting integrated into the international market. China should actively create conditions so that its gold market becomes (an) important component of international gold market." People's Daily Online, 9-7-2004 You'll notice the English is a little rough as I am pulling text from Internet Chinese news sites. "The establishment of China's gold market signifies the completion of constructing a market for major financial products in China…" People's Daily Online, 9-7-2004 It's really funny. The Chinese news services generally write positive & objective news reports about gold, but as you read Western news sources then the gold news becomes slanted & biased. Just a while back Mineweb.com had an article lambasting & slamming the growing Chinese gold market as just an ill conceived illusion & myth. The western establishment finds it generally easy to put a negative slant on gold news. But the Chinese always write objectively & honestly about gold. And since we mention Mineweb.com are you aware that our good friend & buddy Tim Wood just quit there? Always felt a little sorrow for Tim. Tim always wanted to play "the devils advocate" with gold but the strategy often backfired & just confused his readers causing them to go to other more objective & unbiased websites. Right after reading about Tim Wood's leaving the
Mineweb.com in "a possible snit" I ran across the following
article about Hurricane Ivan. "I ain't going nowhere cause I ain't scared," Charles "Smitty" Smith, 60, said as he sipped a morning beer at the Double Play bar in the French Quarter." Associated Press, Mary Foster, 9-15-2004
"…Teresa Heinz Kerry, encouraging volunteers as they busily packed supplies Wednesday for hurricane relief efforts in the Caribbean, said she was concerned the effort was too focused on sending clothes instead of essentials like water and electric generators."
Tons of US dollars continue to head to Asia & the Chinese are quickly using these sums to build up & to develop their country's wealth in a way the Arabs just never knew how. Not too long ago China was just an economic backwater, but no longer. And more? Remember, their English is a little coarse. "Gold demand in China has huge growth potential with the opening of individual gold investment business…" "Some Chinese commercial banks & gold companies recently opened the gold investment business for individuals." "China Merchants Bank started to sell gold bullions to individuals as an agent of gold producers in June." Yu Qiao, China Daily, 8-12-2004 I am finding that there is so much positive gold news coming out of China that it would be easy to write an article every week just about the growing Asian gold industry. "Zhongjin Gold Co Ltd, a Shanghai-listed gold producer, launched the individual gold investment business last month in Dalian in Northeast China's Lianing Province in collaboration with a local partner." "China Banking Regulatory Commission is expected to approve the nations "big four" State-owned commercial banks - Industrial & Commercial Bank of China, Agricultural Bank of China, Bank of China & China Construction Bank - to directly conduct the (gold) business this year, industry sources said." Yu Qiao, China Daily, 8-12-2004 And let no one kid you that growing Chinese gold consumption is for real. "Gold demand in the mainland grew by 6 percent year-on-year…" "The gold exchange, launched in late 2002, now has 108 members - including commercial banks & gold producers & processors…" Yu Qiao, China Daily, 8-12-2004 And as the sun continues to rise on Chinas' golden shores the sun continues to set here in the West. Due to rising western debt our future financial & economic problems will only grow & become more severe. But this problem of too much national debt taken on by countries is not new & has repeated itself many, many times over the centuries. "By the year 1700, the Dutch were by far the world's wealthiest people, with a per capita GDP that was almost twice that of the nearest competitor, the English. In addition, the Dutch possessed an unrivaled system of finance, transport, & urban infrastructure. Holland's cityscapes were the most lovely in Europe" William J. Bernstein, The Birth of Plenty, 2004 Even Adam Smith (The Wealth of Nations) recognized the wealth of Holland in 1700. "…Adam Smith, the founding father of economics, like most Englishmen of his time, had good reason to envy Holland's wealth: The province of Holland … in proportion to the extent of its territory & the number of its people, is a richer country than England." William J. Bernstein, The Birth of Plenty, 2004 But there was trouble in paradise. "…Dutch finance was a little too successful. The government could easily borrow so easily & at such low rates that by the eighteenth century Holland had buried itself in debt." William J. Bernstein, The Birth of Plenty, 2004 Yes, the Dutch got themselves over extended which eventually lead to the wealth flow heading to England. And then England saw wealth leave its island & head to the U.S. And now that wealth flow is traveling west again by going to Asia & China. "Even as Holland's economic & political beacon was beginning to dim, however, some of its best & brightest minds were already crossing the North Sea (to England) to help ignite a far greater explosion of wealth." William J. Bernstein, The Birth of Plenty, 2004 There is really nothing new in these shifting wealth patterns & "trends." Everyone always believes that the sun will never set on their party, but it eventually always does. That is the way of history & "trends." And especially with wealth. Wealth is never static but is always constantly looking for new owners. "Prosperous foreign trade breeds jealousy, distrust, & finally attack from poorer neighbors. For Holland, the seventeenth century's wealthiest nation, that was not long in coming. At mid-century, while Dutch power was at its peak, the British were barely emerging from the chaos of civil war. Their envy of Holland's prosperity was palpable, and they seized upon even the slightest pretext to disrupt Dutch trade." William J. Bernstein, The Birth of Plenty, 2004 Now listen to the following bit of trivia about Holland as she was at the pinnacle of her financial greatness. "An increasingly narrow segment of the population subsisted mainly on investment income & produced little." William J. Bernstein, The Birth of Plenty, 2004 What we just read explains the U.S. perfectly. Today it is said repeatedly that we really do not need factories. It really is no longer important that we do not produce anything anymore. After all, we can all just live off of our growing investment portfolios, right? "A nation's wealth can be traced to its propensity to save & invest, to build engines of wealth in the form of manufacturing plants, mines, drill rigs, farms, service centers." Jim Willie, A Week With Richebacher in Cannes, 9-12-2003 And what else does the very respected & venerable Dr. Karl Richebacher have to say of America? "American economists have absolutely no concept of macro-economics. The US is attempting to re-invent macro-economics, instead of applying it from proven history. In time, results will prove to be absolutely disastrous because of the accumulated debts involved," Kurt Richebacher." Jim Willie, A Week With Richebacher in Cannes, 9-12-2003 The following is more interesting news from China. "China executed four people, including employees of two of its Big Four state banks, for fraud totaling the equivalent of about $15 million, the Xinhua state news agency said Tuesday, amid the country's high-profile campaign against financial crime." "China, which executes more criminals than the rest of the world combined…" Interesting news I think. I'll bet you will not find anyone manipulating the price of gold in China for sure. And this is what frustrates the gold cartel. They have no control over China or the future of the Asian gold market. Now are you coming to a better understanding of why the financial direction of China & Asia & the gold market there is so important & becoming increasingly more so? "The Chinese are the real capitalists now, not the Americans." Jim Willie, A Week With Richebacher in Cannes, 9-12-2003 Bashing Bush doesn't seem to be too good an idea these days. Especially when the information used is not very credible. Dan Rather seems to be finding this out the hard way. "CBS executives on both coasts have become
concerned in recent days that Dan Rather's EVENING NEWS broadcast
has plunged in the ratings since the anchor presented questionable
documents about Bush's National Guard service." But let's get back to Oprah briefly. "Oprah Winfrey could just sit back. Relax. Count her millions. Jet between her many fabulous homes. Go yachting whenever she feels like it (or attend tax deductible gold shows every month.)" Ann Oldenburg, USA Today, 9-14-2004 And, yes, as many will remind me much of her actions are PR stunts, but does the fact that it is "PR" diminish its effectiveness? "Who I am is a person who understands what it means to give back." Ann Oldenburg, USA Today, 9-14-2004 Well, maybe the free car stunt did generate good PR & it definitely was positive for her shows ratings. But what is wrong with that? Maybe the gold industry could learn something by observing & studying Oprah Winfreys marketing practices. "But I'm in awe because I keep thinking 1954 Mississippi…" Ann Oldenburg, USA Today, 9-14-2004 Yes, it never hurts for all of us to remember our humble roots & if Oprah's message does no more than that for the rest of us that is a good thing. "How on earth can a nation expect or realize an economic recovery when $500 billion is sent abroad (to Asia) to pay its trade bills?" Jim Willie, A Week With Richebacher in Cannes, 9-12-2003
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