The World Gold Council''s next opportunity for jewelry promotion

Section:

9:04p ET Thursday, November 25, 2004

Dear Friend of GATA and Gold:

While you may be getting tired of news reports
about dollar exchange rates, all those dispatched
to you in recent days have included comments
by market analysts or government officials that
might have added important perspective. The
Bloomberg story below is notable for quoting
the European Central Bank's chief economist,
Otmar Issing, as saying that central bankers
shouldn't talk publicly about intervention in
the currency markets.

That is, the value of all the world's labor,
capital, property, and savings should be
determined not by any objective standard or by
free markets but rather by a few unelected
government officials meeting in secret and
trying to accomplish their goals in ways that
prevent people from understanding what is
being done and why.

So much for the most important "public"
policy of all.

These news stories about exchange rates also
may be notable for establishing that central
bank intervention against markets is the
very premise of the world financial system, even
as those in charge of the system preach markets
to the proletariat.

Though the financial press looks the other way
rather than draw the most obvious conclusions,
the central bankers are admitting that they rig
or may try to rig the currency markets. Contrary
to the World Gold Council's ineffectual promotion
of gold as jewelry, gold is overwhelmingly a
currency, and the most dangerous one, for it is
(or easily could be) independent of governments,
the worldwide standard with the potential to
liberate individuals from expropriation by
government. And if governments rig currency
markets and gold is a currency, why should it
be so hard to believe that governments also
try to rig the gold market, openly or
surreptitiously?

Indeed, they've already admitted that too:

"Central banks stand ready to lease gold in
increasing quantities should the price rise."

-- Federal Reserve Chairman Alan Greenspan
to the House Banking Committee, July 24, 1998.

But the central banks have been leasing gold
in increasing quantities and the price has been
rising anyway. So hold on to your metal, get
some more, and join the struggle for a free
market.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Dollar Heads for Longest Losing Streak vs. Yen in 9 Years

By John Brinsley
Bloomberg News Service
Friday, November 26, 2004

http://quote.bloomberg.com/apps/news?
pid=10000006&sid=a2alpqDCc7Fw&refer=home

TOKYO -- The dollar traded at its weakest in more
than four years against the yen and headed for its
ninth week of declines, the longest losing streak
since April 1995.

The U.S. currency also traded near an all-time low
against the euro as banks cut their forecasts for the
U.S. currency due to the record current account
gap and in the absence of action by policy makers
to stop its decline.

"The dollar is falling and will continue to do so," said
Toru Umemoto, a market analyst in Tokyo at Keio
University's Global Security Research Center, headed
by former Japanese vice finance minister Eisuke
Sakakibara. "America continues to favor a weaker
dollar and Europe isn't doing anything about it. Japan
may intervene but it won't stop the trend."

The dollar was at 102.52 yen at 8:50 a.m. in Tokyo,
having reached 102.38, the lowest since March 2000,
from 102.46 late yesterday. It was also at $1.3261
per euro having yesterday reached an all-time low of
$1.3284, according to electronic currency-dealing
system EBS. The U.S. currency may fall to 100 yen
next week, Umemoto said.

ECB chief economist Otmar Issing yesterday said in
a speech in Berlin that "central bankers shouldn't talk
in public about the topic of intervention." The ECB
hasn't bought or sold its currency since 2000.

Sweden's Finance Minister Paer Nuder yesterday
said he has information that no action will be taken
to buttress the value of the dollar against the euro.

"I judge there isn't going to be any intervention," Nuder
said. "I have information, indications that this is the
case."

Nuder didn't say where he got the information, in
remarks confirmed by his press spokesman Dan
Svanell. The comments were previously reported by
Swedish news service Direkt.

JPMorgan Chase & Co., Merrill Lynch & Co.,
Deutsche Bank AG, and UBS AG this week reduced
their dollar forecasts. All four banks, which account
for 34 percent of the $1.9 trillion-a- day currency
market, according to Euromoney magazine, predict
the record U.S. current account deficit will undermine
the dollar. A wider gap means more dollars need to
be converted to other currencies to pay for imports.

"We are increasingly dependent upon an inflow of
foreign capital," said Paul Volcker, a former chairman
of the Federal Reserve, in an interview with PBS
television on Nov. 24. "The problem is how long can
this go on," he said. "When something happens it
tends to go further than you imagined and that's the
history of financial crises."

The yen's advance may stall on speculation the
Bank of Japan will use the reduced trading after the
U.S. Thanksgiving holidays to sell its currency for
the first time in more than eight months. The central
bank sold a record 32.9 trillion yen ($320 billion) in
the year through March and hasn't sold since,
according to Ministry of Finance data through
October.

"It's certainly possible over the next couple of days
that they do something," said Craig Ferguson,
currency strategist in Melbourne at Australia and
New England Banking Group Ltd. "We think they'll
intervene above 100 yen. They can't afford to let it
go through there."

UBS, the world's largest currency trader, lowered
its three- month dollar projections to 103 yen from
107, and to $1.36 per euro from $1.30. Deutsche
Bank expects the dollar to weaken to $1.43 per
euro and to 93 yen by the end of 2005, from
previous forecasts of $1.37 and 99 respectively.

Merrill cut its March forecasts for the dollar to 96
yen and $1.39 from 100 and $1.33. JPMorgan cut
its estimates to 96 yen and $1.37 per euro in
March, from 100 and $1.30 before.

Foreigners are unlikely to go on buying dollar
assets indefinitely and the value of the currency
will have to fall to avert a sharp slowdown in the
U.S. economy, Bank of England Chief Economist
Charlie Bean said yesterday.

"At some stage action will have to be taken to
close the U.S. fiscal deficit and, when that
happens, the real value of the dollar will have to
fall if a sharp slowdown is to be avoided," Bean
yesterday told an audience of business leaders
in Colchester, England.

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----------------------------------------------------

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----------------------------------------------------

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