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Mar 2, 2009

GATA Dispatches: Emerging economies may seek gold as dollar fears rise

Emerging economies may seek gold as dollar fears rise

Submitted by cpowell on 01:06PM ET Monday, March 2, 2009. Section: Daily Dispatches By John Irish and Luke PachymuthuReutersMonday, March 2, 2009http://www.reuters.com/article/companyNews/idUSL219529320090302DUBAI -- Major emerging economies are seeking to raise their central banks' gold reserve holdings as fears of a sharp depreciation in the U.S. dollar mount, senior industry officials said on Monday.Investors have been piling into gold as a safe haven as the the world's worst financial crisis since the 1930s depression sent global stock markets crashing."In this recession it is India and China that are going to grow at a slow rate, but they are growing," said Aram Shishmanian, chief executive officer of the World Gold Council."And they will naturally be looking to gold as part of their reserve asset management strategy, and I see them buying."China, the biggest foreign holder of dollar-denominated treasury securities with some $681.9 billion or about 12 percent of treasury papers outstanding, could reverse that by paring its dollar holdings."China has $2 trillion of reserves, and only 1 percent in gold and nearly all of the rest is in U.S. dollars," said Marcus Grubb, managing-director of investment research and marketing at the industry-sponsored World Gold Council."What we are seeing is a reassessment of the risk associated with the high exposure to the dollar. Obviously at the moment you see the dollar appreciating 25 to 30 percent against most currencies around the world, but a lot of that is obviously driven by liquidity."European central banks, which hold about half of global gold reserves, saw gold sales fall to their lowest levels since 1999, according to Grubb as governments store the precious metal as a buffer against worsening markets."Sales were underneath the Central Bank Gold Agreement cap. ... The cap was about 400 metric tonnes and I think they sold 356 tonnes. ... Something is going on."Under the terms of the agreement, signed in 1999 by key European institutions including Germany's Bundesbank and the European Central Bank and renewed in 2004, members can sell up to 500 tonnes of gold a year.The dollar hit a three-year high against a basket of six major currencies on Monday, with news that the U.S. government would pour a further $30 billion into troubled insurer AIG hastening risk-averse flows. The dollar index hit 88.822 -- its highest since April 2006.But Grubb said the strength of the U.S. dollar is likely to be short-lived."That is a temporary phenomenon. If you look at the size of the bailout packages in North America the fact that the U.S. economy may well enter a depression ... there is a real fear of that," he said. "In that scenario I wonder what will happen to the U.S. dollar."Such a decline would apply pressure on Gulf Arab states, which have faced popular pressure to ditch their currencies link to the greenback and switch to fight imported inflation when the dollar was weak."It would certainly be (a concern) to all regions pegged on the dollar. ... Because they have run surpluses, and the Western countries have been in deficits, they have huge accumulation of dollar reserves," Grubb said."In that scenario you could see an increased demand for gold then."
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at
http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org

Forbes.com Alerts- Final Glance Finance Companies

Final Glance: Finance companies

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http://www.forbes.com/feeds/ap/2009/03/02/ap6115655.html?partner=alerts

GATA Dispatches "Mine Reports from convention in Toronto"

MineWeb reports from PDAC convention in Toronto

Submitted by cpowell on 08:47AM ET Monday, March 2, 2009. Section: Daily Dispatches 11:47a ET Monday, March 2, 2009Dear Friend of GATA and Gold:MineWeb's Lawrence Williams reports from Toronto on the annual convention of the Prospectors and Developers Association of Canada and finds it a little less glum than might have been expected. Williams' report is headlined "PDAC Upbeat, but Speakers Have Gloomy Outlook" and you can find it at MineWeb here:http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=79444&sn=Detai...CHRIS POWELL, Secretary/TreasurerGold Anti-Trust Action Committee Inc.
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
http://www.gata.org/

GATA Dispatches "Another market analyst says gold is manipulated"

Another market analyst says gold is manipulated

Submitted by cpowell on 08:40AM ET Monday, March 2, 2009. Section: Daily Dispatches 11:40a ET Monday, March 2, 2009Dear Friend of GATA and Gold:MineWeb has reprinted from The Gold Report an interview with German market analyst Sascha Opel, who remarks, in part, that gold's rise will be limited by manipulation by the financial establishment. You can find the interview at MineWeb here:http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79363&sn=Detai...CHRIS POWELL, Secretary/TreasurerGold Anti-Trust Action Committee Inc.
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA

Forbes.com Alerts

World stocks fall on US economic slump, bank woes

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GATA Dispatches "Being limited in supply, gold appeals to The Economist

Being limited in supply, gold appeals to The Economist

Submitted by cpowell on 10:45PM ET Sunday, March 1, 2009. Section: Daily Dispatches Burnished by Bad News, Gold Looks Like a Good Each-Way BetFrom The Economist, LondonThursday, February 26, 2009http://www.economist.com/finance/displayStory.cfm?story_id=13185396&sour...It is 1979 and Harry "Rabbit" Angstrom, the hero of John Updike’s series of novels, is explaining to his wife why he has just spent more than $11,000 on 30 gold krugerrands. "The beauty of gold is, it loves bad news," he says. Three decades later, gold is once again thriving on despair. Before Christmas, a troy ounce could be bought for around $800. By the third week in February, gold was trading at close to $1,000 an ounce. A surge in demand for gold as an investment lies behind the jump in prices. Flows into exchange-traded funds, which buy and store gold for their shareholders, rose from 105 tonnes in January to 208 tonnes in the first three weeks of February, according to Suki Cooper at Barclays Capital. At that rate, inflows will soon surpass the total of 322 tonnes for the whole of 2008. Buying by investors has more than made up for a slump in gold-jewellery purchases in key markets, such as India and Turkey, where higher prices and wilting exchange rates have crushed demand.People have long viewed gold, rightly or wrongly, as a hedge against high inflation and a weak dollar. So when the gold price briefly broke through the $1,000 mark in March last year, it was easily explained by fears that rising commodity prices (and, in America, a weak dollar) would feed inflation. An earlier run-up in gold prices, between 2002 and 2005, coincided with a sustained fall in the dollar. But now gold is strong even as the dollar thrives and economies face deflation.Gold's recent progress seems to be a response to generalised fears of economic turmoil. When supposedly safe savings vehicles, such as bank deposits, look shaky and offer scant returns, gold has greater appeal as an alternative store of wealth. It also looks like an attractive each-way bet. If drastic cuts in interest rates work too well, that will fuel inflation. If they do not work, prices of assets, such as stocks and houses, will sink further.Like Updike's protagonist in "Rabbit is Rich," the new wave of gold investors typically have wealth to preserve, according to Adrian Ash at BullionVault, an online service for gold investors. "Gold is something you buy if you have something to lose," he says. What links today's gold fever with the 1970s rush is negative real deposit rates. Many savers now prefer a claim on gold in a vault to one on cash in the bank. There is less risk that a counterparty blows up, and the "carrying cost" of gold in terms of lost interest is, in any case, vanishing.How high might the gold price go? Gold bugs talk excitedly about it reaching $2,300, which would match the January 1980 peak in real terms. Already the gold price is above its average since 1972 when calculated in today's money. There is a limited supply of gold and lots of potential buyers -- ideal conditions for a bubble, says Stephen Jen at Morgan Stanley. If gold is burnished by grim news, it seems likely to become still more alluring.
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at
http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org

Forbes.com Alerts

Barclays Leads The British Banks

British banks are stronger than most Americans know. Barclays, under the leadership of Bob Diamond, is chief among them.
Click the link below to read the full story:
http://www.forbes.com/2009/02/27/barclays-british-banks-intelligent-investing_barclays.html?partner=alerts

Forbes.com Alerts

Japan stocks fall sharply on financial fears

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World stock markets tumble on US slump, banks woes

World stock markets tumble on US slump, bank woes

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Forbes.com Alerts

Asian stock markets tumble on US slump, bank woes

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http://www.forbes.com/feeds/ap/2009/03/02/ap6111600.html?partner=alerts

GATA Dispatches " Mine waste trips up Alaska gold rush"

Mine waste trips up Alaska gold rush

Submitted by cpowell on 10:59PM ET Sunday, March 1, 2009. Section: Daily Dispatches By Kim MurphyLos Angeles TimesMonday, March 2, 2009http://www.latimes.com/news/nationworld/nation/la-na-alaska-gold-mining2...BERNERS BAY, Alaska -- Sitting like a turquoise gem in a bowl of hemlock, Sitka spruce, and ice, Berners Bay has long been a jewel of Alaska's Tongass National Forest.In the spring, swarms of tiny eulachon rush in to spawn, and the bay floods with hundreds of killer whales, humpback whales and sea lions in hot pursuit, along with eagles and seabirds by the thousands. Fishermen flock to its herring, salmon and Dungeness crab. Its chilly, tranquil waters are a favorite destination for kayakers.Berners Bay also has become one of the epicenters of a new Alaska gold rush. High in the snowy peaks at the top of the bay, miners struck an estimated 1.4 million ounces of gold -- a prize that is looking better every day as investors flee the stock market. An Idaho-based mining company has pledged to rescue southeast Alaska's crippled timber and fishing economy by opening an industrial-scale mine above the bay. The problem is how to do it.The company had planned to pile its leftover debris on a wetlands on the other side of the mountain from Berners Bay -- a solution embraced by environmentalists -- but has shifted to a cheaper alternative. Taking advantage of a little-publicized regulatory change adopted under the Bush administration in 2004, Coeur d'Alene Mines has obtained a federal permit to dump 4.5 million tons of tailings directly into a small sub-alpine lake near the mine, just above Berners Bay.Conservationists say the plan is unprecedented in 30 years of mining under the federal Clean Water Act.Lower Slate Lake, whose deep indigo waters are home to about 1,000 Dolly Varden char and a small species of fish known as stickleback, will become a repository for 210,000 gallons a day of thick slurry, laced with aluminum, copper, lead and mercury -- enough to kill all the fish and raise the lake's bottom by 50 feet.The waste would be prevented from seeping down the adjacent creek into Berners Bay by construction of a large dam that, environmental groups warn, would have to last for eternity.The mine tailings on the lake bottom eventually would be sealed and fish would be restocked, the Environmental Protection Agency says. That, state and federal officials say, means the lake would become a prime recreational resource for fishermen and boaters.The nearby city of Juneau, Native Alaskan leaders, and Gov. Sarah Palin have hailed the project as a godsend for a region desperate for jobs amid logging cutbacks, the closure of two big pulp mills and dwindling fishing opportunities.But a coalition of environmental groups fears the permit for the Kensington mine, as the project is known, could gut the Clean Water Act and turn lakes and streams across the country into dump sites for polluted mine waste. They have made that argument before the Supreme Court, which is expected to rule this spring."The agencies' decision to allow the disposal of millions of tons of chemically processed mine waste into a pristine alpine lake sets a horrible precedent," the Sierra Club, which joined the Southeast Alaska Conservation Council in fighting the permit, said in a statement. "If Coeur d'Alene mines can do it in the heart of the Tongass, mining companies can do it in almost any lake, river or stream."Yet industry officials say the project reflects a long-standing practice of setting up settling ponds for mine waste -- often in wetlands or small streams.More important, they say, the plan to dump mine tailings into the remote, 23-acre Lower Slate Lake has been hailed by Alaska, the U.S. Army Corps of Engineers and many residents as less environmentally damaging than the plan favored by conservation groups: reducing the tailings to a paste and piling them on 100 acres of wetlands near Lynn Canal. A dry tailings disposal plan, then-Solicitor General Gregory Garre told the Supreme Court in January, would create "enormous stacks of tailings, 100 to 200 feet high, thousands of feet wide, that would actually dwarf the Pentagon."At issue before the high court is whether the mine tailings should be regulated by the EPA as pollutant discharges -- meaning they would have to be fully treated before being released into lakes and streams -- or by the U.S. Army Corps of Engineers as "fill," which would allow untreated pollutants to be discharged into the lake as long as any water that flows out of the lake and down toward Berners Bay is clean.Environmental groups argue that by ceding most of its jurisdiction over mining waste to the Army Corps, the EPA is shirking its responsibilities under the 1972 Clean Water Act and its own regulations -- which since 1982 have said that new gold mines of Kensington's type must have "no discharge of process wastewater to navigable waters.""There has not been a single permit like this ever issued before," said Tom Waldo, who argued the case before the Supreme Court for the environmental law organization Earthjustice.But Steve Borell, executive director of the Alaska Miners Association, said mines across the state -- which is dotted with wetlands -- couldn't operate if they couldn't impound tailings in waterways. "The issue isn't Lower Slate Lake. The issue is whether or not we are going to shut off putting waste rock anywhere." Alaska has seen a boom in gold discoveries recently.International Tower Hills Mines Ltd. announced last month that it had discovered 6.8 million ounces of gold, one of the world's biggest deposits, north of Fairbanks. The proposed Pebble Mine at the headwaters of Bristol Bay, one of the West's great salmon fisheries, is the site of another newly discovered deposit of at least $80 billion in gold -- and, even more important, copper."It is a new gold rush," said Rich Hughes of Alaska's Office of Minerals Development. The state, he said, is the second biggest gold producer in the world, behind Nevada, and gaining rapidly.Mineral production was worth $4 billion to the Alaska economy in 2007, generating 5,500 direct jobs. Revenue has sunk slightly due to falling metals prices, but strong gold prices and the huge new discoveries are helping maintain an industry that might otherwise be in decline. On Friday, gold was selling for more than $940 per ounce.Conservation groups fear that a Supreme Court decision restoring the Kensington mine permit -- which the U.S. 9th Circuit Court of Appeals revoked last year -- would set a precedent that could allow the Pebble Mine, for example, to deposit massive waste into a nearby lake as well. On a recent overflight, Berners Bay stretched dappled and gray under luminous clouds of mist. A writhing brown mass of Steller sea lions stretched along a beach, while Lower Slate Lake was an innocuous bowl of snow at the top of an icy ridge. To the south were folds of emerald forest."What they concluded was it's cheaper to dump your waste into a lake than do it the way it's been done for the last 30 years, since the Clean Water Act," said Rod Cadmus, an activist with the Southeast Alaska Conservation Council who helped negotiate the abandoned compromise for depositing the mine tailings on land. "And if they do it here, they'll do it at other mines."But spokesman Tony Ebersole of Coeur d'Alene Mines said the lake disposal plan had been rigorously studied and deemed the best for the environment by state agencies and the Corps of Engineers."There were 50-some permits issued for this mine. The environmental studies alone cost $20 million, and this was permitted according to the way the process is supposed to work," Ebersole said.Many residents of Juneau, about 45 miles south of the mine, see the legal fight as a needless delay of a project that could mean the difference between over 200 long-range, well-paying jobs and having to rely on trickle-down revenue from the cruise ship industry.Randy Wanamaker, a member of the Juneau borough assembly and of the Tlingit and Haida central tribal council, said Native Alaskans had been guaranteed jobs at the mine and already had an important contract to help develop it."We are a tribe of 27,000 people, and we have 82% unemployment among our adults. It's that bad. In the capital city of the state, we have within the urban population something like 27% of our people who are unemployed -- that's why the Kensington project is so important to us," Wanamaker said.He said city and tribal officials were confident that Lower Slate Lake would be restored and would provide better habitat for fish once the mine's operations were complete."We are not trading environment for jobs," Wanamaker said. "These are my ancestral homelands. These fishing waters that are around it are important to us. We as a tribal group studied this, we worked with Coeur d'Alene Mines to put into it our concerns about our subsistence lifestyle, and they worked with us."
* * * Help keep GATA goingGATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at http://www.gata.org/.Contact GATAinfo@gata.orgGold Anti-Trust Action Committee7 Villa Louisa RoadManchester, Connecticut06043-7541 USA
www.gata.org

Justice Litle: Official sales won't hurt gold anymore

Below please find GATA daily dispatches:

Submitted by cpowell on 05:12PM ET Sunday, March 1, 2009. Section: Daily Dispatches 8:11p ET Sunday, March 1, 2009Dear Friend of GATA and Gold:Justice Litle, editorial director for the Taipan Publishing Group newsletters, argues in his latest essay that neither threats by the International Monetary Fund and U.S. government to sell gold nor actual sales of such gold are likely to suppress the gold price much, insofar as too many governments with huge and depreciating dollar surpluses probably would scoop up any and all gold made available that way. Litle's essay, "Why the IMF and Fort Knox Won't Put the Hurt on Gold," can be found at the Taipan Publishing site here:http://www.taipanpublishinggroup.com/taipan-daily-022409.html

Russian Prime Minister Putin thinks gold is going up

Gata brings us an interesting comments of Prime Minester of Russia Putin, about the future price of Gold.

To read full story click HERE

Forbes.com Alerts

Survey: Credit card holders inattentive to changes.

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Forbes.com Alerts

Asian stock markets tumble on worsening US slump.

For Full Coverage , clicK HERE