Gold, silver plunge has begun

Why do you think?

You might be right in the long run but I believe that there will be a short term run on the money metals. As countries dump dollars in earnest, they will buy gold and silver to replace the dollar as the world currency. This will be the final bubble before the collapse of the dollar. Hyper-inflation will ensue perhaps only for a couple months. We'll see the blow off decades of dollar creation. Even though gold may go down in dollar value its purchasing power will remain the same or increase.

Insiders know this kind of stuff that the average person never hears about.

why not go buy into Euro's?

heard it's the new and up-coming thing.

course, it didn't do too well for Saddam, did it?

who do you think creates the cycle in which you put your money?

The best investment would be dried foods and grains and organic seeds. As much as you can afford and the means to protect and keep it.

Oil/Gold linkage is solid. One is Wiley Coyote; the other, the anvil.

They are going to do EVERYTHING they can to revive the dead horse... the USD. Lower the gas prices, stave off inflation, try to boost consumer confidence to spend, spend, spend at the holidays for this last quarter.

However, commodities are going to be realized by everyone who has used their home as an ATM machine and with that, have interest only mortgages and ARMS, who have lost their jobs, who have watched 401k's dry up as well as another expensive war on the horizon.

If you are in it for a longer position (more than 6 months), I'd sit back, watch the show and wait to unload.

I shudder and await April 2007. Limited nuclear exchange. China or North Korea a BIG part of it. I hope I am wrong.

lead... the other precious metal

I believe your friend is right on the button.....
Get out of oil stocks....
Yep, its all coming down.

It's bubble busting time.

If Gold plunges, the US dollar should rise strongly.

The US Dollar index is around $86. The dollar index refuses to stay under $85.

he's probably right. I wouldn't be buying silver here before the collapse of the bretton woods system, but my average buy price in silver is 6ish, so I'm not gonna sell.

Buy silver using cash during the deflation/liquidation period of the collapse. Or real estate... it will be selling for about a third of what it is now, or less.

Prediction: silver will not go below
$9, gold not below $500. Recommendation:
hold both metals, but if they go down
15%, buy!

a metals collapsing scenario does not line up very well with a US dollar collapsing scenario.

You are.

An insider? You mean someone inside an insane asylum?

It's called "Supply & Demand," look into it.

Unless the Saudis or someone else builds 50,000 oil wells and 12 new refineries within the next 6 months, oil will not be at $40/barrel.

Here's a tip:

Never pet a cat backwards against the grain of its fur, or its eyes will fall out.

We can all check here for current values.

[link to www.kitco.com]

I hope you are wrong......if gold went down I would buy everything....I would sell the 401K's.....and buy....

An insider told me to never trust an insider.

Insider tip here...

If your smart once you "sell it all" you shoud buy stock in Mortons Salt.. I heard that after the crash we're going to be going back to using salt as currency.

maybe the metals will be free, just a bunch of rocks anyways.

I'm buying old pocket watches for no good reason at all.

And WINS???

The US hasn't won any war it entered into in the past 60 years.

you are wrong again

the last war the USA was in was WW2..

and they won it..

everything sence then has been action...

is this what you are thinking of???


[link to www.safehaven.com]



I posted this on BMG's housing thread..


you need to think again...

here ....look at the bottom of the page..

[link to godlikeproductions.com]

Trinity do you really think we could lose? I mean in an all out war that are lives and existence depended on?

you know if you invest in gold/silver.......you will do your home work..

and now back to gold...


you all need to understand the crap that is going down...

read this...

paladin




All bets are off: Barrick may be new company to deal with in Rock Creek development
By Diana Haecker


As Nomeites are in the process of gathering information on the pros and cons of what the proposed Rock Creek mine development could mean for Nome, a different dimension entered the story with a planned hostile takeover of NovaGold by another Canadian company, Barrick Gold Corporation. Barrick nowadays that it is the largest gold production company worldwide with over 27 mines operating on five continents.


NovaGold and Barrick were in business via Barrick´s takeover of Placer Dome, yet another gold company, bought by Barrick earlier this year. Barrick inherited an option to earn an extra 40 percent (in addition to existing 30 percent) rights at a proposed mine at Donlin Creek. As permits for Rock Creek are pending, the question why Barrick has made this unsolicited bid for NovaGold now begs to be asked. In a solicitation and recommendation statement by NovaGold to the United States Securities and Exchange Commission, NovaGold management wrote that it believes that Barrick will not meet its timeline to earn the extra 40 percent at Donlin Creek; that Barrick wants to acquire NovaGold before the company revalues with permits in place and production coming on stream; that Barrick needs new large deposits to maintain future production levels and that Barrick wants to improve its political risk profile with North American based assets.


This needs explanation to the uninitiated in the gold business. Dietmar Siebholz, the German representative for GATA, the Gold Anti-Trust Action Committee, gold investment analyst and current shareholder of NovaGold shares, explained in an exclusive interview with The Nome Nugget the business of gold.



Missing gold


A few years back, experts and gold analysts asked themselves, how it could be that there was a 1,000 ton deficit between annual worldwide gold production and actual gold sales. Between 1994 and 1999, 1,000 tons of gold were missing, a sure sign of higher demand than supply, yet at the same time and against all market logic, the gold price fell by half.


This could only be explained that there must be additional offering of gold from somewhere, which caused the gold price to decline, and there must have been more than 1,000 tons. But from where? There were no private companies owning that kind of gold, and central banks worldwide were in possession of 33,000 tons of gold.


"We had to investigate if the central banks sold some of their gold," said Siebholz. "Investigations revealed that the IMF International Monetary Fund in 1998 told the central banks that gold and gold forward sales should be declared as one, which means that gold lent to somebody else could be left in the books as actually still be in the bank´s possession," explained Siebholz.


This meant that gold could be sold or lent to some other entity and the money received could be invested in bonds. Banks therefore made huge amounts of money. Interest rates to borrow gold are at one percent per year, whereas the money invested in bonds made a profit of four to five percent. This is called derivative gold trading, or gold carry trade.



The players


"You borrow gold when you want to sell it; otherwise it is of no use," said Siebholz. "You borrow a ton of gold for $11 million, you sell the gold at market value for $11 million and then invest the money in bonds at four to five percent, pay one percent interest for borrowing the gold. So you pay one percent and earn four percent. Sounds good, doesn't it?" Big investment banks like Goldman Sachs, JP Morgan Chase, Deutsche Bank, and other investment banks were in that kind of business. Between 1994 and 1999 the gold price went down and the banks made a huge profit. But European banks then secretly decided to change the lending and selling policy and declared that they would reduce the amount of gold for sale or lend up to 500 tons. Suddenly the gold price rose from $251 to $325, and suddenly the old principle of supply and demand applied again, but what happened to the gold owed?


Barrick had a contract with JP Morgan Chase and other investment banks which allowed gold forward sales — selling gold that wasn't even physically produced yet— and in a 15-year-time span, the gold had to be paid back. Barrick made huge amounts of money with these deferred gold forward sales as long as the gold price was low. They sold the gold, invested in bonds, made money and when it was time to pay back the gold, they just bought the gold back and delivered it back to the bank. Cheap.


"That's how Barrick destroyed many companies because those who didn't participate in the gold forward sales and kept on producing gold, didn't make any money since the gold price was so low," explained Siebholz. Barrick´s growing capital then allowed them to buy those mines that were not able to produce at cost anymore. The industry never fought back because Barrick was just plain growing too big and too mighty," said Siebholz.


Barrick swallowed mine after mine that were close to going bankrupt. All this went according to plan until 1999. Ever since 2000 and 2001, Barrick is suddenly on the wrong side of the story. Gold prices rose and now it became prohibitively expensive to buy gold at market price.


Barrick and Placer Dome have a hedge book in forward sales of 16 million oz of gold. At a current gold price of approximately $650/oz — while gold was borrowed at a price of $350/oz — Barrick is now in the position to have to pay an additional $300/oz if buying gold at market price to pay the owed gold back or to deliver the gold from the actual production into their gold hedge book. If Barrick had to buy gold at market price, Barrick would have to book a loss of $5 billion. Not exactly small change. Thus Barrick's buying frenzy, swallowing not only Placer Dome, but also trying to buy NovaGold with both Donlin Creek and Galore Creek — both very promising projects with large amounts of gold.


Once JP Morgan Chase demands the fulfillment of the contract, namely that Barrick returns the borrowed gold Barrick needs to be in a position to show that it is able to produce the gold owed.


So Barrick has a problem. In a contract seen by Siebholz, Barrick's bank JP Morgan Chase can demand its gold back, when Barrick's net assets are less than $2 billion. This magic number appeared quite recently in a press release by Barrick announcing the intent to make a bid for all common shares of NovaGold. Barrick´s CEO and President Greg Wilkins said in the press release, "While we are intent on acquiring all of the outstanding shares of NovaGold, Barrick is content to take up a controlling position in the company and proceeding with the development of the projects. Having a consolidated land position around the Galore Creek district through our agreement with Pioneer, and being the operators at Donlin Creek with our right to earn up to 70 per cent, we believe that Barrick is the logical buyer for NovaGold. We have the track record and credentials to develop large-scale projects such as Donlin Creek and Galore Creek which are estimated to have a combined capital cost of over US$2 billion"


Voila, $2 billion to pacify the bank.

Too big to fall


"Placer and Barrick now are a political power, banking on the assumption that they are too big to fall," said Siebholz. "If the banks now want their gold back and Barrick is forced to produce and if the gold price is rising, which I expect, because states are investing more in gold again with the depreciation of the US dollar, then gold prices are rising."


After Barrick made millions with gold forward sales, dominated the gold market price, drove the competition into the ground and bought them up with money earned through the interest profits, one wonders if Anti-Trust laws are applicable. Is Barrick too big to fall?


"Well," says Siebholz, "I forgot to mention that George Bush senior was an adviser at Barrick." GATA, the gold anti-trust action committee, documented Barrick's practices and tried to sue Barrick twice. The first lawsuit was dismissed because of a formality, stating that certain members of the political arena cannot be sued because of their immunity, and the second lawsuit is held up in the courts and is de facto stalled." Barrick's and JP Morgan's motion to dismiss the two lawsuits was founded on the allegation by Barrick's lawyers that involved parties are simply too powerful to sue.


"Just how positively dumb and blatantly arrogant can you get?" said Siebholz. According to Siebholz, Barrick needs to produce those 16 million ounces of gold and with current and planned projects in Barrick's pipeline, this is not doable.


With Placer and Barrick's gold mines alone, there is no way they can produce 16 million ounces of gold in the short foreseeable future. Placer Dome's option at Donlin Creek now belongs to Barrick, and Barrick most likely will see to it that it will fulfil all obligations to get to the 70 percent ownership at Donlin Creek. And they have to. If you look at Barrick's engagements in the rest of the world, there are problems to keep production up. Pascua Lama, one mine in developmental stage, is located between Argentina and Chile and to get to the gold, Barrick needs to blast glaciers.


The fact that a glacier needs to be destroyed is not mentioned at Barrick's Website, and neither are the environmental concerns of the local population that have caused the mine development to be delayed.


While it is clear from Barrick's writings, their interests are not specifically directed to Rock Creek, but to consolidate Barrick's interests in the Donlin Creek project and add the Galore Creek project to Barrick's pipeline of projects.


Yet, seen in the bigger context of needing to produce gold in what investors call a "stable environment" it is safe to assume that Rock Creek (if permitted) will serve to pay off Barrick's debt to its bank.


For more information on Barrick's hedge book see "Barrick: A Recipe for Disaster" posted at www.gold-eagle.com


[link to www.nomenugget.net]




link from..

[link to www.lemetropolecafe.com]

the futures price is for a contract of paper gold.
most gold in hand , other than the lowliest forms of bullion, is stubbornly clinging to around 675-700/ oz. refusing to follow the dips.
if paper gold does go that low, i really doubt you'll be able to buy any quantity of physical for that price except for the occasional beat up krugerrand of dubious authenticity, sold on ebay from grandmas attic

I hate to sound trite, but I just can't see anyway possible that any war, protracted or quick and definitive, could trigger oil commodities prices to drop. Hasn't hostile occupation of foreign soil produced the same result, time and time again?
I would suspect that any attempts to access or profit from natural resources following an armed conflict will be met with the same results that we've witnessed in Iraq.

To efficiently exploit foreign resources, scenarios like we have with Saudi or arrangements like we had with Saddam and the Shaw of Iran seem much more likely to work