Big Head Press

L. Neil Smith's
Number 544, November 15, 2009

Life goes on.

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"The Emperor has no clothes and he's a complete rube too"
by David Earnest

Attribute to The Libertarian Enterprise

Greetings Fellow Prisoners! Shotgun wedding returns with this bit of Why? To wit:

What's up with American Presidents giving obeisance to foreign heads of state?

Barry O'Bummer did it before the Emperor of Japan:

GW did it to the King of Saudi Arabia:

Then I read this little Bombshell.
In case the link is dead "Bombshell":

Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.

The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India's central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.

China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.

Gold exchange-traded funds (ETFs)—dubbed the "People's Central Bank"—have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.

Ross Norman, director of, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.

Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper—at greater cost—to replace depleted reserves, not helped by "social uplift" rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.

Mr Norman said the "false mine of central banks" had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.

Barrick is moving fast to wind down the remaining 3m ounces of its infamous hedge book over the next twelve months, an implicit bet on rising gold prices over time.

Mr Regent said the company had waited too long to ditch the policy, which has made the company enemy number one among 'gold bug' enthusiasts. The hedges oblige Barrick to deliver part of its gold into futures contracts set long ago at levels far below today's spot prices.

The strategy worked well in the falling market of the 1990s, but has cost the company dear in lost profits this decade. "Hindsight is always 20/20," said Mr Regent, who was appointed from the outside earlier this year.

Barrick bit the bullet in the third quarter, taking a $5.7bn charge against earnings on hedge contracts. Liberation is at last in sight. In 2001 the hedge book topped 20m ounces.

Mr Regent said the hedge policy has weighed badly on the share price and irked investors, becoming a bone of contention at every meeting. The financial crisis brought matters to a head as markets fretted about counterparty risk. "It was clear to me that there were a significant number of institutions who wouldn't invest in Barrick because of the hedge book," he said.

Barrick produced 1.9m ounces of gold last quarter, down from 1.95m a year earlier. Costs have been "trending down" to $456 an ounce, though rising energy prices pose a fresh threat. Total reserves are 139m ounces, far ahead of rival Newmont Mining at 86m.

The hedge book venture has not been a happy one, but those who predicted that Barrick would eventually "blow up" on its contracts may owe the company an apology.


(Shotguns' Meanderings continue.........)

Exactly why is this so important you ask? When was the last time the American people had a full accounting of both precious commodities on inventory by our "Representative" government, as well as the items stored in strategic reserve? I didn't know the answer to that yet. I'd bet it's been awhile! (1970's ?) How much IS in the vaults of the New York Fed? How much gold is in Fort Knox? These all happen to be

CLASSIFIED questions with likewise CLASSIFIED answers. That led me to This: [link]

In case link is dead:

Sunday, March 29, 2009
AIG's collateral damage stokes Fort Knox questions

From TimesOnline:

It is said to be the most impregnable vault on Earth: built out of granite, sealed behind a 22-tonne door, located on a US military base and watched over day and night by army units with tanks, heavy artillery and Apache helicopter gunships at their disposal.

Since its construction in 1937 the treasures locked inside Fort Knox have included the US Declaration of Independence, the Gettysburg Address, three volumes of the Gutenberg Bible and Magna Carta.

For several prominent investors and at least one senior US congressman it is not the security of the facility in Kentucky that is a cause of concern: it is the matter of how much gold remains stored there—and who owns it.

They are worried that no independent auditors appear to have had access to the reported $137 billion (£96 billion) stockpile of brick-shaped gold bars in Fort Knox since the era of President Eisenhower. After the risky trading activities at supposedly safe institutions such as AIG they want to be reassured that the gold reserves are still the exclusive property of the US and have not been used to fund risky transactions.

In other words, they want to be certain that the bullion has not been rendered as valueless as if a real-life Goldfinger had stolen it.

It has been several decades since the gold in Fort Knox was independently audited or properly accounted for," said Ron Paul, the Texas Congressman and former Republican presidential candidate, in an e-mail interview with The Times. "The American people deserve to know the truth."

Mr Paul has so far attracted 21 co-sponsors for a Bill to conduct an independent audit of the Federal Reserve System—including its claims to Fort Knox gold—but an organisation named the Gold Anti-Trust Action Committee (GATA) is taking a different approach.

It has hired the Virginia law firm William J.Olson, PC, to test President Obama's promise to bring "an unprecedented level of openness" to the Government and next month it will file several Freedom of Information requests for a full disclosure of US gold ownership and trading activities.

"We're taking the President at his word," said Chris Powell, of GATA. "If you go online you can find out how to build a nuclear weapon but you won't find any detailed records on central gold reserves."

All the gold in Fort Knox is worth $137 billion dollars, and the taxpayer gave more of that out with AIG.

So maybe, some of the people don't take the Government at their word, when the say "Trust us."

But an open audit on Fort Knox?

It will never happen.

That you can "trust us" on!

And stories like this, are just being used to make anyone that wants transparency in the financial dealings done on behalf of the taxpayer, to appear to be in bed with Oliver Stone!

But somebody wants to know these answers, and they want the Government to give a real audit.

Heck, we know what the Gold ETF has in it's vaults. They have 36,248,334 ounces worth $33.5 billion dollars.

That can be audited but Fort Knox can't?



Damn Good question!

I think a good old fashioned snail mail, email, Drudge Report full court press on the PTB to fess up to how bad they've FUCKED UP!

The feet don't know the head is dead folks! We've been sold into debt peonage to China, Saudi Arabia, Japan, South Korea the list goes on! If you aren't scared you're already dead.

Nuff said.

Shotgun Wedding at large in the 'verse.


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