JULY 2006

 

Money-tracking leak angers Cheney
WASHINGTON, June 23 — Vice President Dick Cheney on Friday vigorously defended a secret program that examines banking records of Americans and others in a vast international database, and harshly criticized the news media for disclosing an operation he said was legal and "absolutely essential" to fighting terrorism.The financial tracking program was disclosed Thursday by The New York Times and other news organizations. American officials had expressed concerns that the Brussels banking consortium that provides access to the database might withdraw from the program if its role were disclosed, particularly in light of anti-American sentiment in some parts of
Europe.NYTimes.

US Vice-President Dick Cheney has condemned as "offensive" US media disclosures of a secret programme that probes global financial transactions. Mr Cheney said leaking the programme played into the enemy's hands.

The government has covertly tracked thousands of international money transactions for nearly five years as part of its so-called war on terror. Speaking in Chicago, Mr Cheney said the disclosures, which went ahead despite appeals from the White House, would make it more difficult for the administration to prevent future attacks. Mr Cheney said: "These are good, solid sound programmes. They are conducted in accordance with the laws of the land." He added: "What I find most disturbing is the fact that some in the media take it upon themselves to disclose vital national security programmes, thereby making it more difficult for us to prevent future attacks against the American people."

The operation uses a huge financial database in Belgium, known as Swift, to track private money transfers around the world.

But civil liberty groups have raised concerns that the programme, which began soon after the 9/11 attacks in the US, may infringe individual rights to privacy.

The government had compelled Swift, the Society for Worldwide Interbank Financial Telecommunication, which links about 7,800 financial institutions around the world, to open its records, using subpoenas.

The New York Times, which revealed the programme, defended its coverage. Executive editor Bill Keller said: "We remain convinced that the administration's extraordinary access to this vast repository of international financial data, however carefully targeted use of it may be, is a matter of public interest."

Belgian police officers standing guard Friday outside the Society for Worldwide Interbank Financial Telecommunication, or Swift, in Brussels.

The program, run out of the Central Intelligence Agency and overseen by the Treasury Department, has allowed counterterrorism authorities to gain access to millions of records of transactions routed through Swift from individual banks and financial institutions around the world. The data is obtained using broad administrative subpoenas, not court warrants.

Investigators have used the data to do "at least tens of thousands, maybe hundreds of thousands of searches" of people and institutions suspected of having ties to terrorists, Stuart Levey, an under secretary at the Treasury Department, told reporters at a briefing on Friday. Officials say the program has proven valuable in a number of foreign and domestic terrorism investigations, and led to the 2003 capture of the most wanted Qaeda fugitive in Southeast Asia, known as Hambali.

"Our data has been effectively hijacked by the U.S. under cover of secret agreements and entirely undisclosed terms," said the civil liberties advocate, Simon Davies, the director of Privacy International, a London-based organization focused on the intrusion on privacy by governments and businesses. "There will be a snapping point, and this may be it."Initial reaction from global banks was muted, with one executive saying that while the privacy of information was a contentious issue within the industry, the Swift operation had so far generated few complaints.

Senator Arlen Specter:

Senator Arlen Specter, Republican of Pennsylvania and chairman of the Senate Judiciary Committee, said he had sent letters on Friday to both Treasury Secretary John W.Snpw and Attorney General A.R.Gonzalez on the issue. While he declined to release the letters, he said he was concerned about the legal authority for the operation.Mr. Specter has been at odds with the administration over another previously secret counterterrorism operation, the Nat.Security Agency's domestic eavesdropping program. The senator said he was particularly troubled that the administration had expanded its Congressional briefings on the financial tracking program in recent weeks after having learned that The New York Times was making inquiries.

"Why does it take a newspaper investigation to get them to comply with the law?" the senator asked. "That's a big, important point." In explaining the program, Mr. Levey, the Treasury under secretary who oversees the program, said in an interview earlier in the week that "people do not have a privacy interest in their international wire transactions." But Mr. Specter was skeptical."I'm not surprised that a Treasury official would take that position, but I'm not so sure he's right," the senator said. "I don't think it's an open-and-shut question."

Stephen Crowley/The New York Times
Treasury Secretary John W. Snow, left,
with Under Secretary Stuart Levey Friday.
The Treasury secretary called the program "an effective weapon, an effective weapon in the larger war on terror."

AME info Middle East Finance and Economy Journal

Why Arabian investors should buy and hold gold!

A concerted intervention by central banks has temporarily depressed the gold market providing an excellent buying opportunity for those who missed the recent gold rally. But this savage price fluctuation has highlighted the volatility of gold and its dangers for traders who decide to do more than buy and hold.

Wednesday, June 14 - 2006 at 09:40

Arabian investors should be piling into gold at these price levels. For the recent rout of gold prices is entirely down to a concerted attack on gold by the central banks, and the fundamental factors supporting the gold price have got stronger and not weaker.

First, the US dollar is weakening against most currencies. This is supportive of gold which is priced in US dollars. Most currency analysts now believe the dollar is heading lower, and that will keep the gold price rising at least in dollar terms.

Secondly, inflation is now re-appearing all over the world as a menace to economic growth and capital market stability. Gold is the classic 'safe haven' investment and a hedge against inflation.

Safe haven status

Therefore, Arabian investors who want to preserve their wealth in this environment should buy gold and not equities or bonds whose future is much more open to doubt. Indeed, the weakness seen on global capital markets in the past month may be just a sign of days to come, perhaps this autumn, with a full scale financial crisis.

Gold will definitely be the place to have some money in such an environment, and precious metals will likely outperform all other financial assets.

In truth the central banks that manipulate currency markets, and gold is a quasi-currency, have deliberately attacked the gold market, according to traders who follow these matters day-to-day.

They hope by attacking a symptom of inflation that they may find a cure, but this is a hopeless task, and with the inflation genie out of the bottle any suppression of symptoms will not last for very long. And once investors really 'discover' gold the fireworks in the gold market are going to be spectacular.

Gold is cheap

For the entire stock market capitalization of gold stocks is less than half the value of Microsoft, reflecting the extreme undervaluation of gold which has lagged behind other commodities in the recent commodities boom. Once global investment interest is really focused on gold the flow of money will produce amazing gains in this sector.

Indeed, another very clear reason to believe that the gold rally has corrected and not gone into a bear market is that the obvious signs of a runaway bull market are not yet in evidence. This is a market traded by central banks and a few professional investors, and has yet to attract a rush of mass rush of investors.

Gold supporters argue that such are the fundamentals of global finance today that an increase in the gold price is inevitable. Buying now while prices have been temporarily depressed is thus a great opportunity. But gold prices are volatile and trading is only for the true experts, and that should be the real message to learn from the past few weeks.

Gold A Threat?

Don Stott Is gold a threat? You bet, but not to you or I. Gold is a dire threat to the 'establishment' of any nation on earth, because every one of them is printing their 'monies' as fast as their presses can run, and this does include the euro, although their presses aren't on full speed as of yet. Gold has been true money for over two thousand years in all nations which have ever existed. Silver has the same properties too, and as a matter of fact, the first coins were made of silver, not gold. Gold is the scarcer though, except some say that currently there is more gold around than silver. I don't know, but it doesn't matter.

Since gold and silver are true money everywhere, and have always been considered so, it is logical that all nations on earth which have ever existed, eventually found gold and silver to be a threat to their very existence. Why? Because throughout history, all governments have proliferated, spent more than they took in, and eventually collapsed from fiscal irresponsibility. Before the collapse…they printed. They all thought they could create wealth by printing it. Silly? Of course, but politicians throughout history have been pretty stupid now, haven't they? Has there been a better way to maintain one's position as a Senator or Congressman than to bring home the bacon and pretend that one's constituents were all important? In reality, the main concern of a politician, is staying in office, regardless of level. This is why there are term limits in some places. To stop this nonsense.

Gold is also the enemy not only of governments but central banks as well, which can and do create 'money' out of thin air, which they then loan to customers (government) and collect interest. Neat trick, huh? Create something out of thin air, and then make a continuous profit from loaning it? That gold is an enemy of the "establishment" might be a better, more inclusive term. Most of us hate the "establishment," as it reeks of corruption, free lunches, bribes, and SFN. which means to me, "Something for nothing." "We've got to keep that damned gold price down, as it makes us look silly, and demeans our dollars," might be a quote from a central banker or politician. Understandably, because they are really threatened by gold's going up in their funny money. It is to the "establishment's" benefit to keep gold and silver's price as low as possible through any devious means at their disposal.

Governments used to own gold, and some still do, but it is doubtful that the U.S. government does any longer. Supposedly the Federal Reserve has gold, but I also think that is doubtful. Does the World Bank or some other nefarious outfit own any gold? The IMF? I don't know. They say they do.

Let's take the U.S. government, Treasury and Federal Reserve for examples of what's going on around the world. Obviously, the buck is going down far too fast for the comfort of everyone involved. Let us look at the insurance industry as well, because when those salesmen knock on your door and talk about "whole life" or "annuity" policies, surely at least the more sensible potential customers will realize that set incomes and savings plans in dollars are futile. At least we can hope a few of them will realize that, and say NO to a sales pitch. It is therefore in the insurance industry's interest to keep the dollar high and gold low. How can the dollar be propped up and gold kept down? There are several ways.

First, governments can sell their gold, flood the markets with it, or as they put it, "lease it," even though they might as well say "sell," because they will never see it again. That worked for a little while, and indeed did keep the price of gold below $300 per ounce, and silver which follows it at times, under $5 or $6. It placed millions of ounces of gold in private hands and out of government vaults. When prices began to rise, they'd just sell off some of their supply and drive it down again. When that ceased to work, and gold went over $300, the cries of anguish were heard all over the world. They were selling the one thing they had of value, and just to keep their funny money alive, they were selling the one thing they had which was tangible and of historic worth. Not a good idea Senator. So that generally stopped. In other words, after the horse had departed, the wise sages decided to shut the barn door. Ah! The intelligencia at work.

Then there are the futures traders, which still operate full blast. When one bets that the price of gold will be "X" dollars in December, they will buy a 'dec' contract and hope it will rise to that level. Or they may bet that it will go the other way. The spot price of gold is based on the futures contracts nearest the current date, less so much per day, etc. My supplier's web site (amark.com) is the best way to access the true spot price. If a whole bunch of futures traders bet the wrong way, and gold starts shooting up when they had bet that it would go down (shorted the market), they stand to lose their shirts. What to do? They get together and sell huge numbers of contracts, which floods the market with gold contracts and the prices go down, thereby covering their shorts. Simple? Sure. Is it legal? Doubtful. Will the exchanges stop that practice? Doubtful. The rules say that there must be sufficient gold and silver as well as other commodities before a futures contract can be let. Is there enough silver to cover the futures contracts at the COMEX, as an example? Hell no! Barely a third of the required amount, it appears. This does not thwart the traders however, so they go merely on their way.

Does this affect the prices of gold and silver when the traders bet the wrong way and cover their shorts? Yes. And now look at the poor government who watches its dollar wither like a flower in July with no water. Everyone knows there is a division of the government which props up the stock market when it should fall, and that is commonly called the 'plunge prevention team,' which uses dollars created out of nothing to buy stocks and keep prices up. They also do the same with dollars and gold, to keep one as high as possible and the other as low as possible. Does it work? To a degree, yes. Gold went from $718-$730, down as low as $560 I believe, and maybe lower for a brief stint. Silver from $14.80 to $9.70, and possibly even below that briefly. Both are on their way back up now, and the stock market sits at exactly the same place it was six years ago, and the DOW should be perhaps 3000. Gold and silver are no where near where they were six years ago. Try more than double.

Fixing markets and influencing them is one of the oldest tricks in the books. It is called "inside trading" in the stock market, and stopping that is like trying to keep the sun from rising. Anyone who has information not readily available to the public…say corporate employees by the thousands…can take advantage of this information and reap the rewards. Just don't do it too brazenly, or the SEC might slap your wrists, or make an example of you like they did to poor Martha. The question then is, can the price of gold and silver be kept under control forever? Can those who are harmed by gold and silver's rising prices in funny money, stop their rise…in funny money? The answer just has to be a sound, firm, resoundingly shouted, NO. Can they keep the prices of anything from going up in their funny money? Of course not, because as Stott's Law states, "The more of anything there is, the less they will be worth," and this includes dollars. The dollar flood continues and has to do so, because they have no other alternative.

They have to increase the supply of dollars, because they have no choice. They foolishly do the "earmarks," perpetual handouts, and never give a second thought to how much is collected in taxes. The debt of the U.S. government in unfunded promises and actual debts is over $40 TRILLION paper dollar funny money. Less that a twentieth of that comes in per year in income taxes, and 100% of that is used to merely pay part of the interest. (When "From Freedom to Fascism" is released July 28th in theatres, I have no idea what the public's reaction will be. Will people continue paying taxes? Go to the web site - freedomtofascism.com - for dates etc.) Do they have a choice? No, so the prices of EVERYTHING will continue to rise in funny money, and this includes gold and silver. There is no possible way to stop this eventual process, which will bring America to its knees, surrounded by trillions of worthless paper dollars.

June 29, 2006

Don Stott has been a precious metals dealer since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com