that they may stop manufacturing the Hummer.  How will the continent ever survive without Hummers on the road? Or how will the continent survive without outlandish and idiotically huge recreational vehicles? [g].   I hope I live to see the day when some of the people who have more money than they know what to do with will devote some of their spare cash into  some physical silver and gold that they take into their personal possession instead of buying unnecessarily large, heavy vehicles to drive around solely for “pleasure” purposes.  But idiocy dies slowly.  Equiz.

Goldman Sachs..thats who…I see they weathered the storm admirably..they are not on your list

Kisha Samuels can handle just about any other natural disaster that comes her way in Belize. But soaring energy costs are another matter.

“We can cope with floods to some extent,” Ms. Samuels said yesterday from the Bird’s Eye View Lodge, about 60 kilometres north of Belize City, where she was busy evacuating the front office as a storm raged outside. “But rising prices are making it very difficult for us.”

They are also making life difficult for Fortis Inc., which controls Belize Electricity Ltd., or BEL. The company, based in St. John’s, is running into fierce opposition from authorities in Belize as it seeks to raise electricity rates to compensate for the soaring cost of oil.

With food, gasoline and oil prices already soaring, electricity rates have become a new burden for people in Belize and elsewhere in Central America and the Caribbean.

Most countries in the region rely on diesel-fuelled power stations to produce electricity and the cost of generating that power has skyrocketed with the price of oil. Electricity rates have jumped by as much as 30 per cent in some countries this year and blackouts of up to 14 hours are commonplace. Protests over power costs have broken out in Honduras, El Salvador and Nicaragua, where electricity rates have been increased five times in the last few months.

The situation in Belize has reached crisis proportions, said Stan Marshall, president and chief executive officer of Fortis. In a blunt speech to BEL shareholders last month, Mr. Marshall said the company needs to raise rates by 25 per cent immediately or the country will face blackouts.

Belize is wedged between Mexico and Guatemala and it buys about half its power from Mexico, which relies largely on natural gas and oil to fuel its power plants. Mr. Marshall said the price charged by Mexico tracks the world price of oil.

“I can’t understate the seriousness of the situation,” Mr. Marshall told the meeting after pointing out that oil is well above $120 a barrel.

He also took a shot at the local government, and recently elected Prime Minister Dean Barrow, for refusing to allow an increase in rates. “Belize has been the most frustrating jurisdiction I have ever experienced in my 30 years in the business,” he said.

His comments drew sharp attacks from many local groups who accused Mr. Marshall of issuing threats. Several organizations have criticized BEL for seeking what they called “unconscionable” rate hikes while turning a profit of roughly $15-million (U.S.) last year.

Mr. Barrow, who came to power in February promising to lower prices for electricity and food, said he was “displeased” with Mr. Marshall’s comments and promised to call an emergency meeting of his cabinet.

In an interview yesterday, Mr. Marshall stood by his comments and said he was not making threats. “It was simply a statement,” he said, adding that an arbitrator has been appointed to review BEL’s rate request.

Mr. Marshall said that when Fortis bought control of BEL in 1999 he was assured the company would be able to pass on price hikes charged by Mexico. But in recent months Belize authorities have prevented any pass-through, causing BEL to absorb roughly $15-million in extra charges this year.

“If this carries on and we can’t pass through the price of oil, Mexico won’t get paid. If Mexico doesn’t get paid then it will result in blackouts,” he said.

He also expressed some sympathy for Mr. Barrow and his election promise to cut electricity rates. “With oil prices going up there is no way that can happen.”

Mr. Marshall said Belize is actually better off than many other countries in the area because about 40 per cent of its power comes from hydroelectric sources. He noted that Fortis also operates in Turks and Caicos and Cayman Islands, which are completely reliant on diesel-powered facilities, and electricity rates there have increased by 30 per cent over the past year.

“There’s no question that these rapidly rising oil prices and hence electricity prices causes hardship, there’s no question about that at all,” he said.

This is some chart…

Bill,
It was great to talk with you, thanks again.

stockcharts.com/h-sc/ui?s=&p=W&b=4&g=0&id=p26862815391&a=119297801

Is my long term chart (which you posted on Midas) which I made back in 10/1/2007 which has been “balls on” thus far and has helped me hold tight to my position. Notice the similarities between this runup and the prior on thru may of 06. The duration is almost exact as well. Note also how the bottom support line for this run has held rock steady. This chart has netted me a sizable (collected!!) profit of around 50% thus far. All my other signals are also indicating this move will be (1) soon (next 3-4 months) (2) increasingly violent to the upside (3) the best thus far. After reviewing some of my hui ratio charts it also appears the general PM indicies will flourish along with physical. The last ball should be exited at a price of around $1150-$1300. If the pattern continues, the next ball will be enormous in size, about 3.5 years duration, with a best guess of $2500.

After digesting our discussion, I agree with your assessment that we will see incredible profits, hopefully we will be able to attach good value to them! (collect). I realized that my issues and concerns are akin to yelling in a snake pit that someone will get bit!!. I personally believe that the “play” on now is Money flow out of Crude and into PM sector and general commodities. As you know, I am not an invest advisor and this is just a successful amateurs guess.

God bless and good luck!
John

Gold industry ‘not in good shape’ despite high price, says Randgold’s Bristow

By: Martin Creamer

Published on 7th May 2008

The gold industry is “not in good shape”, despite the gold price being at record levels, says Randgold Resources CEO Dr Mark Bristow.Bristow also finds that bankers are encouraging dubious gold listings, under the guise of entrepreneurship.

He says that, while many investors are decrying the failure of ‘gold counters’ to perform as traditional leveraged investments, many of those ‘gold counters’ are not gold counters at all.

This, he says, is because many have gone into other metals along with gold, and are driven by offsetting other metal credits against gold costs.

This, he says, is confusing investors, who are turning to exchange-traded funds (ETFs), rather than equities, in order to gain exposure to the high gold price.

But the $875 an investor may pay for an ETF ounce, can buy two ounces of gold in Randgold Resources, along with two options - in the form of two reserve ounces and two resource ounces - as well as stand to be paid out a dividend.

What’s more, the company’s reserves are growing, making the first two ounces more than two ounces.

“But what you have to take a view on when you buy equities is management, operational and political risk, and that is the difference between an ETF and Randgold Resources. Equity is perhaps riskier, but it’s got a lot more leverage,” Bristow reiterates to Mining Weekly.

A pure gold play Randgold Resources this week posted another set of solid quarterly results, with profit up materially despite industry cost pressures.

Randgold achieved a net profit of $18,2-million for the March quarter, up 25% on the previous quarter and 42% on the corresponding quarter in 2007.

“I always point out that out of the IT [information technology] boom grew some very significant businesses, but nine out of ten failed, and the same with gold,” he says, his company being one of a few start-ups to weather the austere period when gold dropped to $250/oz.

“Going from junior to big producer is not easy, and when you get on the treadmill, you have to keep replacing ounces.

“All the big boys, bar Barrick, have been caught in the trap of going long on promise and short on delivery,” Bristow harangues.

“The gold industry is not in good shape”, and is bereft of the big dividend payouts of the base-metals industry, despite the high gold price. Many mines are still marginal even at the higher gold price, causing one leading fund manager to lament that some gold miners are paying more in fees than in dividends.

If non-gold metal credits are subtracted from some margins, there is no margin increase at all.

On top of that, there has been a decrease in the gold supply and, if the lower volume is multiplied by the margin, there is no real logic to support the significant growth in market capitalisation of the gold industry on world stock exchanges.

By: Liezel Hill

Published on 3rd June 2008

Updated 5 hours ago

On average, gold producers will need the price of gold to stay north of $700/oz if they are to turn a profit in the current environment of rising costs, Barrick Gold CFO Jamie Sokalsky said on Tuesday.

Industry cash costs are currently around $450/oz to $500/oz and, taking into account the cost of bringing on new production, depreciation, development costs, exploration, administrative expenses and so on, “that’s easily $700/oz to $800/oz”, Sokalsky said in webcast presentation.

“To us that’s the long-term break-even cost to the industry…below $700/oz to $800/oz long term, the industry doesn’t make money,” he said.

Gold prices were pushed skywards in the fourth quarter of 2007 and the first few months of this year, largely by investment demand, as a weakening dollar, the US credit crisis, inflation concerns and geopolicital tensions and uncertainty raised the metal’s attractiveness as a safe haven, or wealth-preservation investment.

The price of gold set a new high of $1 033,70/oz on March 17, but has since corrected and was trading at around $879/oz on Tuesday afternoon.

Barrick expects that the bullion prices have further to go this year, however, as dwindling mine supply and higher prices for fuel, labour and other costs would provide a “strong floor” for the gold price, Sokalsky said.

“It is also going to make some new projects that the industry has difficult to bring in and that’s going to be very bullish for the gold price.

Barrick reported cash costs of $393/oz for the first three months of this year, which, after realising an average gold price of $925/oz, resulted in a margin of $532/oz.

SUPPLY

Sokalsky said the Barrick, the world’s biggest gold miner, expects mine supply of the yellow metal to continue to decline.

“I think we’ve seen the peak in mine supply a couple of years ago,” he said.

Total global gold production contracted 0,4% in 2007, to an eleven-year low, according to metals consultancy GFMS.

“We feel very strongly, and we’ve done a lot of analysis on this, that gold supply could drop 10% to 15% more than what forecasters are thinking in the next five to seven years,” Sokalsky commented.

Barrick chairperson and acting CEO Peter Munk said at the group’s AGM last month that the failure of the gold-mining industry to find and exploit large new deposits of the yellow metal was “tragic”.

Opposition from nongovernmental organisations, as well as increasing, “yet understandable” demands from host countries that they receive a bigger share of profits from mines, was making it difficult to develop successful new operations, Munk said at the time.

You must take some time to read this story.

Inside the LC:  The strange but mostly true story of Laurel Canyon and the birth of the hippie generation.

“There is something here.  What it is ain’t exactly clear.”

http://www.davesweb.cnchost.com

Geez, another surprise this morning. After yesterday’s unexplained late DOW rally, the DOW is called higher. While gold, which hit a brick wall as soon as the news on the downgrade of US financial firms hit the tape mid-day yesterday, is lower, despite the euro being up .50.

That was the good news.

As far as bringing financial market, and related, news to your attention, the least enlightening, in my book, is what emanates from Fed officials. It is almost always self serving pabulum offered to cater to what Planet Wall Street wants to hear. Goes back to the Washington propaganda stuff again. You can almost write the script ahead of time, based on the key financial issues of the moment.

This morning was a classic. CNBC touted time and time again, starting yesterday, that Fed chairman Bernanke would be speaking overseas and that his text would be released at 9….

Bernanke at International Monetary Conference

WASHINGTON, June 3 (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday spoke via satellite to an economic conference of the International Monetary Conference in Barcelona, Spain.

Following are highlights from his speech:

ON RATE OUTLOOK AND THE DOLLAR (from prepared remarks)

“For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate.

In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation.

We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer-term inflation expectations.

Over time, the Federal Reserve’s commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy — including flexible markets and robust innovation and productivity — will be key factors ensuring that the dollar remains a strong and stable currency.”

-END-

The euro then fell 1 ½ basis points against the dollar and gold was punished nearly $20 at one point … and in minutes. Yet the DOW barely budged.

But WHY? There was nothing to what Bernanke said. Surely if the Fed was really going to take on growing inflation in the US in a serious way, interest rates would have risen sharply and the DOW would have been slaughtered. But no, the only moves of significance came in the dollar and gold.

This is ludicrous. All it tells us is the market managers in the United States had their intervention ducks in order, most likely coordinated with some other central banks and hatchet men in the Counterparty Risk Management Group.

It’s SO CLEAR. Then I go back and listen to the CNBC pundits rationalize Bernanke’s comments to the market action and it seems like I am listening to children … or worse, the Muppet Brigade. It is as if they never graduated from grade school and they sound so amateurishly silly. Sometime in the future, maybe a decade or two from now, even the Planet Wall Street crowd will look back in astonishment that they listened and believed the analysis nonsense.

I am not alone in this line of thinking…

Bill,
Normally, I don’t read anything that comes out economically, etc. But in light of the dollar exploding and gold plummeting the second that the comment “Bernanke believes in a stronger dollar” (or something of the like) came out at 9 am EST, I decided to read his official comments to see what he really said.

www.federalreserve.gov/newsevents/speech/bernanke20080603a.htm

I found absolutely no references to a strong dollar other than the following, lame statement:

“Over time, the Federal Reserve’s commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy–including flexible markets and robust innovation and productivity–will be key factors ensuring that the dollar remains a strong and stable currency.

And, of course, the next line paragraph discusses the “ample liquidity” the Fed is putting into the market, which of course is negative for the dollar.

Well, I guess that’s why the market is up, the dollar spiked upward, and gold is $20 lower. My god.
A

One more…

There are no markets anymore, just interventions. We are to believe that traders sold gold because the FED is hawkish now and will support the dollar? What? The FED will raise rates and send borrowing costs higher right?

No trader with a brain that controls money sold gold on that release. That was intervention and some say that the investment banks will be the group to take gold to new highs. Wait, Santa’s at the door.
Sabre

As to specific motivation for the blatant dollar/gold intervention…

Jesse:

Lehman is Still in Trouble Despite All the Calming Words to the Market

Hint to our overseas readers. In the United States it has become culturally acceptable to publicly lie through your teeth if you are covered by the “Safe Harbor” Statement rule under the Private Securities Litigation Reform Act of 1995, or if you are an elected official or a government functionary and are ’shaping perception’ for the good of the public.

This morning’s speech by Fed Chairman Bernanke to the conference on monetary policy in Barcelona was a fine example of shaping perception or ’spin.’ Ben was obviously answering some concerns raised by your own government leaders who have heavily invested your nation’s saving in the US dollar and US financial assets.

They pretend to tell the truth and we pretend to believe them.

jessescrossroadscafe.blogspot.com/2008/06/lehman-is-still-in-trouble-despite-all.html

***

Lehman May Need to Raise Capital as Analysts See Loss

June 3 (Bloomberg) — Lehman Brothers Holdings Inc. may seek more capital to allay investor concerns as the securities firm prepares to report its first quarterly loss since going public in 1994, according to analysts.

The fourth-biggest U.S. securities firm probably will post a second-quarter loss of 50 cents to 75 cents a share, analysts at Oppenheimer & Co. and Bank of America Corp. have said. New York-based Lehman holds “very large, illiquid’ assets and “we can’t rule out equity issuance’ to replenish the balance sheet, Merrill Lynch & Co. said in a report yesterday…

-END-

As mentioned a couple of weeks ago, my smeller has been telling me something is up, or very wrong out there still in US financial market land. Perhaps we are close to finding out what it is and what the ramifications might be.

Lehman Brothers continues to make public statements they are just fine; but so did Bear Stearns, two days before they went tapioca. And today’s blatant market intervention in the dollar and gold suggests the Fed is still in panic mode and in need of shoring up any confidence they can in the dollar … which also means nailing gold.

Meanwhile, the dust has cleared and what do you know? … the yield on the 10 yr T note FELL to 3.94%. So much for Fed hawkishness being the reason the dollar rose and gold fell. What malarkey.

The only positive on the day for gold was that it closed well off its low of $874.50.

Weirdo silver traded in more off the wall fashion. Even when gold was up on the day, it was under severe pressure, as if the insiders knew just what was coming. When gold was trounced, it fell to $16.43. However, it climbed back to close only with modest losses and at the same level as when gold was positive.

This tells me the silver price managers, active in The Gold Cartel, salivated early and couldn’t wait to press the price ahead of time, just waiting to take easy money from spooked specs who dumped their positions way in the hole. Naturally the insider crooks then covered their shorts as the specs puked. Love our free markets. Love our vigilant CFTC.

Do I see an inverse head & shoulder forming?  Or… am I just dreaming it?

“Take my hand, I’ll take your hand…….this  much madness is too much sorrow”

Down by the River………..  Classic CSNY

http://www.youtube.com/watch?v=-QsSc95pPPY

Winedoc

How did u do down in Belize with the storm . Augirl gave us a small update. How bad is it ? Were there big waves and erosion to the beaches , how about the coral reef damage ? Any lobsters wash up on the beach ? When u can , give us an update. Hope all is well with u and mrs. CT

“The average man does not want to be free. He simply wants to be safe” … H.L. Mencken

Nice to see you post and hope all is well.  Rumors everywhere about Lehman going the way of Bear Stearns - there are certainly tons of very low puts that someone has bought - much like they bought before Bear went down the tubes.  Time will tell!