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From: IngotWeTrust2/18/2007 12:26:43 AM
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update with Feb 2007 cls dataset
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From: IngotWeTrust2/18/2007 1:00:07 AM
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Metals from purchasers "timing" perspective

base, precious, exotics...rotating commentary.

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From: IngotWeTrust4/20/2007 3:08:35 PM
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The PGM devil’s in the smelter

The key to unlocking value in the ballooning junior platinum sector lies in solving the ore-processing conundrum.
Author: Barry Sergeant
Posted: Friday , 20 Apr 2007


In a major new report on global platinum stocks, Mark Smith of RBC Capital Markets has addressed the investor-critical issue of bottlenecking smelter and refining capacity in the global platinum group metals (PGMs) sector.

Global platinum output is anticipated to increase from 8.3m ounces this year to 9.8m ounces in 2017. The vast majority of the increment is to come out of South Africa, supplemented by an increase in scrap supplies from about 900,000 ounces this year to 1.4m ounces in 2017.

In South Africa, existing processing plants are found only at the historic players,
Anglo Platinum,
Impala Platinum,
Lonmin and

Junior producers have to live with onerous terms and punitive conditions typically levied by third-party toll treatment providers. The conundrum deepens when considering that if all possible new South African PGM mines come on stream, global platinum output could rise from 8.3m ounces this year to as much as 15m ounces in 2017.

PGM smelters and refineries are incredibly expensive.
RBCCM states that as a rule of thumb, production in the order of 250,000-300,000 ounces of platinum a year is required to justify the capital cost
--smelter: $150-$250m;
---refining facilities: $500-$700m), and
----operational costs of a smelter.

If this was not all, such is the complexity of processing PGM ores that "lock-up" (the value of PGMs effectively locked up inside a processing plant) can exceed plant capital cost.

The future of PGM smelters in South Africa also hinges on evolution in the mining of three distinctive horizons in South Africa's Bushveld igneous complex:
--the Merensky reef,
---UG2 reef and
----the Platreef.

In the Merensky reef, virtually all PGM content is associated with base metal (nickel and copper) sulphides.

In the UG2 reef, only 70%--80% of PGMs are sulphide-associated. These ores are rich in rhodium and chromite, but relatively light in base metal sulphides.

The Platreef is similar to Merensky reef ore, but higher in copper and nickel content.

While Merensky stands as the historical mainstay of the sector, UG2 is coming into its own, and, so far, only Anglo Platinum has mined the Platreef.

RBCCM states that Anglo Platinum has no known processing expansion plans beyond 3.5m ounces total capacity. As such, Anglo Platinum will have to run its Polokwane smelter at full capacity to process the 0.5m ounces of mainly UG2 ounces expected to come on stream over the next few years from in-house and joint venture projects in the Eastern Bushveld.

Impala Platinum is targeting the internal production of 2.3m ounces of platinum a year by 2010, which would require short-term expansion of smelting capacity from 2.0m ounces to 2.3m ounces. Even then, its smelters would be running at capacity. Impala has long-term capacity expansion goals of 2.5m ounces and then 2.8m ounces.

Lonmin intends to expand smelter capacity to 1.5m ounces of platinum by 2010. To this end, its Merensky furnace will be upgraded from 8MW to 20MW. Lonmin is also considering a third 20MW furnace to replace its Pyromet furnaces around 2010, which would lift smelting capacity to 2m ounces. However, refining capacity will need to be upgraded.

Northam appears to possess the ability to double processing capacity (to 0.4m ounces of platinum a year) by running its smelter at 15MW instead of the current 8MW, potentially allowing Northam to play an important role in the processing of expansionary ounces.

RBCCM reckons that South Africa presently operates sufficient capacity to accommodate new PGM projects in the short term - to 2010 - but argues that expansions are needed to meet market needs in the long term.

There are many questions; for example, will Lonmin and Impala require a mixed ore feed for their expansions? More than half of new potential supply will be from the UG2 reef, "which poses technical challenges", says RBCCM.

As such, RBCCM believes there is a strategic opportunity for the establishment of an independent UG2-targeted PGM smelter in South Africa, to cater for the new supply; in addition, greater base metal refining capacity will be required to enable efficient processing of Platreef ore.

From RBCCM's analysis, "there appears to be just enough unallocated platinum supply from the juniors to justify an independent smelter; however, the majors' stranglehold on the juniors is getting tighter".

Given known capacity constraints, RBCCM has attempted to model four scenarios:

• Scenario 1: If there are no smelter expansions, the South African PGM sector would require additional smelter capacity in 2011.

• Scenario 2: If Impala and Lonmin continue with smelter expansions, the South African PGM sector could accommodate all new supply (potential and possible) that has been signed up for toll treatment.

• Scenario 3: If additional (unallocated) new supply comes on stream with no smelter expansions, the South African PGM sector would require new smelter capacity in 2009.

• Scenario 4: Where new supply comes on stream, and Impala and Lonmin expand their smelters, the South African PGM sector would require additional smelter capacity in 2012.

However, RBCCM describes two possible routes where the shortage of PGM smelting capacity in South Africa could be resolved independently of existing smelter operators.

construction of shared UG2-targeted smelter/refining facilities as a joint venture by a consortium of junior platinum producers.

establishment of a UG2-targeted processing facility by a "new entrant" to the PGM industry.

There is a further opportunity in new processing facilities, and new technologies.

Conventional PGM matte smelter technology is some 30-40 years old, and was designed primarily with low-chromite Merensky ore in mind.


Interesting peek into the future 10 years for the supply side of the S&D dynamic at work in the Pt industry, ETFs offtake not withstanding.


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From: IngotWeTrust5/9/2007 1:52:15 AM
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37yr chart US$

Message 23526773

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From: IngotWeTrust10/21/2007 5:26:57 PM
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33 year chart USDX Tipping Point "caption" Posted 10/21/07

Message 23986325

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From: IngotWeTrust11/12/2007 5:29:34 PM
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XRF post Ashgrove sample scan.
Message 24025576

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From: IngotWeTrust11/24/2007 3:29:07 PM
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FWIW: Who issues OTC Trillions Derivs totals?

It appears that it is the Bank of International Settlements, aka BIS, aka Rothschilds'

Bloomberg issued a byte Friday 11/23 by Kabir Chidder stating this as fact. Also stated, BIS was "BIS, which was formed in 1930 to monitor financial markets and regulate banks.

Guess that means all of them.


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From: IngotWeTrust12/18/2007 12:37:16 AM
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HOLY WHEAT KERNELS: USDA's shock & awe 2007/8 ending wheat stocks report Dec 11, combined with Australia's second year of drought, continue to impact global supplies, and prices...

Wheat Returns to All-Time Highs on Supply Shortfall

By Jon A. Nones
11 Dec 2007 at 02:37 PM GMT-05:00

St. LOUIS ( -- Wheat prices have gained 20% in just three weeks, returning to highs hit in late October. The rally has been fuelled largely by trade expectations of a drop in 2007/08 U.S. wheat ending stocks. On Tuesday, the U.S. Department of Agriculture (USDA) did not disappoint wheat bulls with its supply/demand report for grains.

The USDA lowered its estimate for 2007-08 U.S. ending stocks by 32 million bushels to 280 million bushels, a 10% drop, which would be the lowest level in 60 years. Inventories in storage will fall 32% from a year ago to 8.49 million tonnes by May 31. U.S. wheat exports are now expected to total 1,175 million bussels, but the U.S. has already sold at least 88% of that figure.

In a market report today, Elaine Kub of DTN said these adjustments came after 26 fiery weeks of wheat exports, when over 90% of USDA's previous export sales projection was sold.

“Volatile conditions have set up the markets for quick movement, so be prepared for large initial gains followed by dynamic action throughout the day,” she noted.

In mid-October, the USDA reported that 2007-08 U.S. wheat ending stocks would fall to 307 million bushels, reflecting lower production and a sharp rise in exports this year.

Today’s report puts U.S. ending stocks below 300 million bushels for the first time since the 1947-48 crop year.

I was a wheat and cattle farm business manager in the late
60s until early 1980s...

Now, I live where sugar beets and yellow/red onions are grown, primarily, with some SRWinter wheat tossed into the planting mix.

Onions and Sugar Beets produce more income per acre than any irrigated wheat field can dream of producing per wonder wheat stalks/stocks are low...(pun intended...)


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From: IngotWeTrust1/13/2008 5:29:59 PM
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BoA F/R endorsed Mtg model benefits revealed.

BofA's awesome Countrywide tax break
Brace yourselves, taxpayers of America. You're going to help Bank of America finance its $4 billion buyout of Countrywide.
By Allan Sloan, senior editor at large

Bank of America purchases Countrywide Financial, one of the companies hardest hit by the subprime mortgage meltdown.

NEW YORK (Fortune) -- Guess who's helping Bank of America pay for its $4.1 billion purchase of Countrywide Financial? Answer: The taxpayers of the United States.

That's because Bank of America (BAC, Fortune 500), which is solidly profitable, will be able to use some of Countrywide's losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week. The losses could be worth considerably more to Bank of America starting in the sixth year, depending on how big Countrywide's losses are when Bank of America formally acquires it.

At this point, of course, no one knows how much in losses Countrywide has run up since the junk mortgage market began souring and defaults accelerated. Countrywide (CFC, Fortune 500) itself probably doesn't know. But it seems almost certain to ultimately be in the billions.

In tax circles, Bank of America is famous for its 1988 purchase of the failed FirstRepublic Bank of Dallas, which was being auctioned off by federal regulators. Bank of America, then known as NCNB Corp., the parent of North Carolina National Bank, discovered a way to structure the deal to save $1 billion of taxes, using a convoluted strategy that none of the other bidders knew about. That allowed NCNB to outbid its rivals for the bank, and still come out way ahead.

The Countrywide tax break isn't in that league, but it would still be worth a lot of money. Willens estimates that Bank of America will be able to deduct $270 million of Countrywide's losses annually for the first five years it owns the firm.

That's based on a $6 billion purchase price - $4 billion to Countrywide's common stockholders, plus the $2 billion of preferred stock that Countrywide sold to Bank of America in August. Willens says that you multiply that $6 billion by 4.49 percent - the so-called "long-term tax-exempt rate" - to calculate how much of Countrywide's losses Bank of America can deduct annually for five years after the purchase.

A $270 million annual deduction would save Bank of America something more than $100 million a year in federal and state income taxes. The long-term tax-exempt rate, which is based on Treasury rates and other things so complicated that they make my teeth hurt. The rate changes each year, Willens says, but not by much. When I asked how it's calculated, Willens, a master of tax arcana, threw up his hands. (Metaphorically, of course.) "It's like the formula for Coca-Cola," he said, "no one outside the circle knows it" and it's so complicated that, "no one else wants to find out."

So over the first five years, Bank of America can use a total of $1.35 billion of Countrywide's losses to shelter its income. (That's five years of $270 million annual losses.) If Countrywide's embedded losses when Bank of America buys it exceed $1.35 billion, Willens says, the bank will be able to deduct the rest of the losses, without limit, starting in the sixth year.

Isn't life fun?

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From: IngotWeTrust1/13/2008 5:53:44 PM
   of 348
Anna Schwartz blames Fed for sub-prime crisis

Last Updated: 3:53pm GMT 13/01/2008

Anna Schwartz, the revered economist, shares her views on the credit bubble with Ambrose Evans-Pritchard She wrote a seminal text on the causes of the Great Depression

As rebukes go in the close-knit world of central banking, few hurt as much as the scathing indictment of US Federal Reserve policy by Professor Anna Schwartz.

The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.

"They need to speak frankly to the market and acknowledge how bad the problems are, and acknowledge their own failures in letting this happen. This is what is needed to restore confidence," she told The Sunday Telegraph. "There never would have been a sub-prime mortgage crisis if the Fed had been alert. This is something Alan Greenspan must answer for," she says.

Schwartz remains defiantly lucid at 92. She still works every day at the National Bureau of Economic Research in New York, where she has toiled since 1941.

Her fame comes from a joint opus with Nobel laureate Milton Friedman: A Monetary History of the United States. It revolutionised thinking on the causes of the Great Depression when published in 1965. The book blamed the Fed for causing the slump. The bank failed to use its full bag of tricks to stop the implosion of the money stock, and turned a bust into calamity by raising rates.

"The book was a bombshell," says British monetarist Tim Congdon. "Until then almost everybody thought the free-market system itself had failed in the 1930s. What Friedman-Schwartz say was that incompetent government bureaucrats at the Fed had caused the Depression."

"It had an enormous impact in revitalising free-market conservatism, and it broke the Keynesian stranglehold over policy," he says. Keynes himself was a formidable monetarist. He became a "Keynesian" big spender only once all else seemed to fail.

The tale of the early 1930s is intricate, but worth rehearsing in the climate of today's credit crunch.

The October 1929 crash did not cause the slump, it was merely a vivid detail. The US economy muddled through for another year, seemingly sound. Then it buckled as rising defaults in the farm belt set off a run on local banks.

It was at this juncture that critics claim the Fed lost the plot. Washington prohibited the pros at the New York Fed from injecting sufficient stimulus through open market operations [buying bonds].

Contagion spread. The Jewish-owned Bank of the United States was allowed to collapse by fellow clearing banks, for reasons of snobbery and malice.

The Chicago Fed insisted into the depths of the deflation that inflation still lurked, that there was an "abundance of funds", that speculators had to be punished, and that bad banks should fail. The staggering blindness of Fed backwoodsmen from 1930-1933 is hard to exaggerate.

In hindsight, it seems astonishing that the Fed raised the discount rate twice in late 1931 to 3.5 per cent even as global finance was disintegrating. It did so to halt bullion flight and defend the Gold Standard, but it failed to offset the effects with bond purchases. Britain was forced off the Gold Standard in September 1931 after the Atlantic Fleet "mutinied" at Invergordon over 10 per cent pay cuts. That proved a providential crisis - the pound fell. The Bank of England was soon able to slash rates. The slump proved less serious than in the US, and not a single bank collapsed in the British Empire.

Schwartz warns against facile comparisons between today's world and the Gold Standard era. "This is nothing like the Depression. I don't really believe the economy as a whole is going to fall apart. Northern Rock has been the only episode of a bank failure so far," she says.

Over 4,000 US banks - a fifth - collapsed in the 1930s. There was no deposit insurance. Real economic output fell by a third, prices by a quarter, and unemployment reached a third. Real income fell by 11 per cent, 9 per cent, 18 per cent, and 3 per cent in the years to 1933.

According to Schwartz the original sin of the Bernanke-Greenspan Fed was to hold rates at 1 per cent from 2003 to June 2004, long after the dotcom bubble was over. "It is clear that monetary policy was too accommodative. Rates of 1 per cent were bound to encourage all kinds of risky behaviour," says Schwartz.

She is scornful of Greenspan's campaign to clear his name by blaming the bubble on an Asian saving glut, which purportedly created stimulus beyond the control of the Fed by driving down global bond rates. "This attempt to exculpate himself is not convincing. The Fed failed to confront something that was evident. It can't be blamed on global events," she says.

That mistake is behind us now. The lesson of the 1930s is that swift action is needed once the credit system starts to implode: when banks hoard money, refusing to pass on funds. The Fed must tear up the rule-book. Yet it has been hesitant for three months, relying on lubricants - not shock therapy.

"Liquidity doesn't do anything in this situation. It cannot deal with the underlying fear that lots of firms are going bankrupt," she says. Her view is fast spreading. Goldman Sachs issued a full-recession alert on Wednesday, predicting rates of 2.5 per cent by the third quarter. "Ben Bernanke should be making stronger statements and then backing them up with decisive easing," says Jan Hatzius, the bank's US economist.

Bernanke did indeed switch tack on Thursday. "We stand ready to take substantive additional action as needed," he says, warning of a "fragile situation". It follows a surge in December unemployment from 4.7 per cent to 5 per cent, the sharpest spike in a quarter century. Inflation fears are subsiding fast.

Bernanke insists that the Fed has leant the lesson from the catastrophic errors of the 1930s. At the late Milton Friedman's 90th birthday party, he apologised for the sins of his institutional forefathers. "Yes, we did it, we're very sorry, we won't do it again."

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