Turk interviewed on strange selloff; new Grandich Letter

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11a ET Wednesday, October 4, 2006

Dear Friend of GATA and Gold:

GoldMoney's James Turk, editor of the Freemarket Gold and Money Report and consultant to GATA, is interviewed by Resource Investor's Jon A. Nones about gold's strange selloff on news of North Korea's plan to begin nuclear testing. You can find the interview here:

http://www.resourceinvestor.com/pebble.asp?relid=24412

And in his latest letter, Peter Grandich argues that nothing about the fundamentals of the precious metals has changed, even as there is likely to be a lot of tax-loss selling of mining shares. You can find the new issue of the Grandich Letter here:

Michael Nystrom: The Dow's phony new high

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11:57p ET Tuesday, October 3, 2006

Dear Friend of GATA and Gold:

In a new essay market analyst Michael Nystrom elaborates wonderfully on a point made earlier today on ROB-TV by Jeffrey Saut of Raymond James Associates. Nystrom shows how the new high recorded today by the Dow Jones Industrial Average is more than misleading; it is active disinformation. Nystrom's essay is headlined "The Dow's Phony New High" and you can find it at Nystrom's Internet site, BullNotBull.com, here:

Despite blue-chip gains, hedge funds are faltering and closing

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As Jim Sinclair was saying....

* * *

Despite Blue-Chip Gains, Hedge Funds
Increasingly Are Faltering and Closing

By Anita Raghavan,
Ianthe Jeanne Dugan,
and Gregory Zuckerman
The Wall Street Journal
Wednesday, October 4, 2006

As the Dow Jones Industrial Average climbs to record heights, many hedge funds are stumbling and more than ever are closing shop.

The latest to falter: Vega Asset Management. One of the world's largest hedge funds a few years ago, Vega has suffered losses from a bad bet against U.S. bonds, and is now down roughly 75% from its peak two years ago to about $3 billion in assets. The firm says it has no plans to cease operations.

More notice for U.S. government's political intervention in markets

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9:47p ET Tuesday, October 3, 2006

Dear Friend of GATA and Gold:

More financial market participants are sensing or even recognizing the increasing intervention in the markets by the U.S. government and its agents. Today's most telling observations on this score may have come from Jeffrey Saut, chief investment strategist for Raymond James Associates in St. Petersburg, Florida, as he was interviewed by (who else?) Jim O'Connell on the "Market Wrap" program on ROB-TV in Canada.

Ted Butler: Extreme liquidation

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8:27p ET Tuesday, October 3, 2006

Dear Friend of GATA and Gold:

Silver market analyst and GATA consultant Ted Butler argues in his new commentary that there never really was a "bubble" in commodities and there sure isn't one after the market action of the last few days, now that most speculative positions have been wiped out and the prospects for long positions are excellent. Butler's commentary is headlined "Extreme Liquidation" and you can find it at GoldSeek's companion site, SilverSeek, here:

Jim Sinclair: Politically inspired market intervention may break the bank

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Black Boxes and Dead Hedge Funds

By Jim Sinclair
www.JSMineSet.com
Tuesday, October 3, 2006

The action in the marketplace speaks to bankruptcies among hedge funds that are not evident to the public or even to those professional traders I know.

Sure, those in gold and energy on margin beyond their capacity are being liquidated into the marketplace. But it is the hedge fund managers with their damn algorithms who have hit the fan hard -- and you can guess what is flying all over the place.

Asian Development Bank economist urges big exchange rate deal

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By Shamim Adam
Bloomberg News Service
Tuesday, October 3, 2006

http://www.bloomberg.com/apps/news?pid=20601086&sid=aOgjMkgYz91w

SINGAPORE -- Global leaders must find a way to unravel lopsided trade and investment flows or risk a slump in the U.S. dollar that would create havoc for the world economy, Asian Development Bank Chief Economist Ifzal Ali said.

An international agreement along the lines of the 1985 Plaza Accord "on a bigger scale" is needed to unwind the imbalances that have resulted in the U.S. current account deficit swelling to a record $805 billion and surpluses in China, the rest of Asia, and Europe, Ali said in an interview in Tokyo.

Silver ETF share registration increase doesn't require metal purchases

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Barclays Files to Add Shares to Silver ETF

From Reuters
Monday, October 2, 2006

http://today.reuters.com/news/articleinvesting.aspx?type=fundsNews2&stor...

NEW YORK -- Barclays Global Investors on Monday said it had filed with the Securities and Exchange Commission to register 15.2 million new shares of the iShares Silver Trust (SLV), which has proven popular with investors as a silver play this year.

Hedge funds are short copper, not long; Barclays says metal stocks low

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By Ambrose Evans-Pritchard
The Telegraph, London
Monday, October 2, 2006

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/02/ccview...

Arrayed on one side of the commodity debate are the ivory-tower economists and perma-bears, all warning that the four-year boom is over -- with worse to come. On the other are the traders and specialists who live and breathe the stuff every day, convinced that the market is tighter across the spectrum of metals and energy than outsiders realise.

China's central bank chief reaffirms growing 'flexibility' for yuan

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From The Associated Press
via Yahoo News
Sunday, October 1, 2006

http://news.yahoo.com/s/ap/20061001/ap_on_bi_ge/china_currency_1

The flexibility of China's currency is gradually being expanded as the influence of market forces grows stronger, the nation's central bank chief said.

In an interview to be published in Monday's edition of the Chinese-language Caijing magazine, People's Bank of China Governor Zhou Xiaochuan reaffirmed China's principle of carrying out gradual foreign exchange reform, and said the importance of the basket of currencies to which the yuan is referenced will diminish.