Peter Brimelow: M3 mutterers refuse to give thanks


4:53p ET Thursday, November 24, 2005

Dear Friend of GATA and Gold:

When Russian President Vladimir Putin this week attended a mineral
resources exhibition in the Russian Far East, endorsed the plan of
the Bank of Russia to double its gold reserves, and expressed
support for increasing his country's gold production, many assumed
that Russian gold purchases would come from domestic production and
thus not disturb international markets.

But today's RIA Novosti report, dispatched to you earlier today,
quoting the Bank of Russia's first deputy chairman, Alexei
Ulyukayev, suggests otherwise. It suggests that Russia is ready to
enter the physical gold market everywhere. This would be
revolutionary, as noted by Michael Kosares, proprietor of Centennial
Precious Metals in Denver, whose analysis at his firm's Internet
site,, is appended here.

Indeed, the unusual resilience of the gold price in recent months --
particularly since GATA's Gold Rush 21 conference in Dawson City,
Yukon, Canada, which was attended by one of President Putin's
economic advisers, Andrey Bykov -- hints that a central bank has
been a buyer for some time now.

Of course Russia's central bank took official note of GATA in June
2004, when another of its deputy chairmen, Oleg Mozhaiskov, told a
meeting of the London Bullion Market Association in Moscow about
GATA's contention that Western central banks had been rigging the
gold market to the detriment of the developing world:

While GATA, given the Russians' interest, has been trying to convey
much to them, we have no inside information here. The Russians may
be good listeners but they have yet to prove themselves
conversationalists. But if YOU had a load of paper and electronic
currency whose proliferation was unlimited and if you were
disadvantaged by the imperial schemes of the issuer of that
currency, what would YOU do to protect your wealth and your national

Centennial Precious Metals' Kosares argues that if the Russians are
serious about buying gold, their announcement is the equivalent of
the Washington Agreement of 1999, which put a ceiling on central
bank gold lending and touched off gold's bull market.

Kosares' analysis is below.

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

* * *

By Michael Kosares
Centennial Precious Metals, Denver

Thursday, November 24, 2005

"First Deputy Chairman of the Central Bank Alexei Ulyukayev said the
bank would be purchasing gold 'on all markets on which it is
available,' meaning both domestic and foreign markets."

A few observations:

1. We should not forget that it was central bank buying tha broke
the back of the anti-gold cartel in the late 1960s early 1970s. This
paved the way for the massive bull market of the 1970s.

2. Ulyukayev is not talking about paper trading for speculative
purposes. He's talking about buying physical gold and storing it in
reserve as a long-term asset.

3. This policy is a major, decisive departure for the G-8 in that
one of its members will be exchanging currency reserves for gold --
and after a public disclosure. Russia now is receiving a large
amount of foreign exchange for its oil and gas (this will not change
for quite some time), probably in the form of dollars and euros.
This looks like the first step in a long-term program.

4. Russian gold buying will become a new element in the physical
gold market, and likely will put even more pressure on those short
the metal to cover now while it is still cheap -- of course, that
Russia follows through. But I can't see why they would announce such
a plan without meaning it.

5. I rate this announcement by the Russian central bank as the
equivalent of the Washington Agreement in 1999, which kick-started
the current gold bull market. It amounts to a de-jure action that
could have a major impact on the gold market and comprise the
primary driving force for the second leg of this bull market.


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Blanchard & Co. Inc.
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Centennial Precious Metals
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Michael Kosares, Proprietor

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Dr. Fred I. Goldstein, Senior Broker

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Franklin Sanders
1-888-218-9226, 931-766-6066



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