If one can redeem a baggage claim check for luggage what can
a Federal Reserve Note be redeemed for?

RJ -- If I may comment! You have been looking only at the time of the 'abberation' of paper. Do you see not further out, or before? How long do you really expect this debt based paper currency system to reign? Perhaps it'll continue forever? RIGHT! The metals have been the ONLY historically correct currency. SO WHAT if the debt based system we have today has distorted that 'equation'. You, apparently, do not see the frailties existent in this system. I will not ask why that should be the case. I will however ask of you what you DO see in the system that might keep it going! IF/when this paper house conmes down, do you not see a value in an easily tradeable commodity? Not everyone is going to want a loaf of bread! Let me place the emphasis on EASILY! And I might add that 'easily' comes from being 'known-as-tradable' Metals are nice in that. They don't require care and they don't require much room. Can you say the same about a cow, or a silo of grain? And everyone won't need your caliber of bullet. The metals are the ONLY logical currency when all else ( paper ) has been found faultful! Without them, society will have a VERY hard time picking its ass off the ground! I'm not saying that should that day come, that having food, guns, ammo, etc won't be most important%2

RJ -- If I may comment! You have been looking only at the time of the 'abberation' of paper. Do you see not further out, or before? How long do you really expect this debt based paper currency system to reign? Perhaps it'll continue forever? RIGHT! The metals have been the ONLY historically correct currency. SO WHAT if the debt based system we have today has distorted that 'equation'. You, apparently, do not see the frailties existent in this system. I will not ask why that should be the case. I will however ask of you what you DO see in the system that might keep it going! IF/when this paper house conmes down, do you not see a value in an easily tradeable commodity? Not everyone is going to want a loaf of bread! Let me place the emphasis on EASILY! And I might add that 'easily' comes from being 'known-as-tradable' Metals are nice in that. They don't require care and they don't require much room. Can you say the same about a cow, or a silo of grain? And everyone won't need your caliber of bullet. The metals are the ONLY logical currency when all else ( paper ) has been found faultful! Without them, society will have a VERY hard time picking its ass off the ground! I'm not saying that should that day come, that having food, guns, ammo, etc won't be most important%2

If one can redeem a baggage claim check for luggage what can
a Federal Reserve Note be redeemed for?

If gourmet meals, whale-watching, dog walkin', star gazing, boating on the Ocean, boozin', snoozin' and gardening ain't the life of Reilly, ( with occasional letter wriing to friends ) , I don't know what is!

Steve Puetz - Please quote me accurately. I said that "Inflation is essentially a twentieth century phenomenon", not "just". Comparing todays global economy with that of China in a bygone era is a non-sequitur. In fact, at no time in history has there been anything remotely resembling the global economy of the 1990s. As for store of value, please refer to my essay or do the math yourself. If your numbers add up differently, please present them. As for independence from monetary promise, you are absolutely correct. Gold definitely has a minor place in ones portfolio. However, for most people, the thinking stops there. Conceding your points of perishability, gold is still only worth what someone will give you for it. Is it not then held hostage to exchange having no fundamental uses of its own? Can you dig with it? Can you chop with it? Can you bring down a Wildebeest? All the gold in the would wont buy you glass of water in the Kalahari. The inherent fallacy in gold protecting you in times of economic collapse is plain. As the US economy goes, so goes the world. Who would you have step forth to trade needed commodities for one that has no fundamental use? As for rot, some say that is what has happened to my brain.

big trader???

not to worry--his hide hangs quite un-ceremoniously next
to those of the skunk and muskrat genre.
the scalp was of the bald variety, and made an arm-pit
warmer for one of earls' squaws!

cherokee!; ) hanger-of-worthless-hides!

big trader???

not to worry--his hide hangs quite un-ceremoniously next
to those of the skunk and muskrat genre.
the scalp was of the bald variety, and made an arm-pit
warmer for one of earls' squaws!

cherokee!; ) hanger-of-worthless-hides!

Steve Puetz - Please quote me accurately. I said that "Inflation is essentially a twentieth century phenomenon", not "just". Comparing todays global economy with that of China in a bygone era is a non-sequitur. In fact, at no time in history has there been anything remotely resembling the global economy of the 1990s. As for store of value, please refer to my essay or do the math yourself. If your numbers add up differently, please present them. As for independence from monetary promise, you are absolutely correct. Gold definitely has a minor place in ones portfolio. However, for most people, the thinking stops there. Conceding your points of perishability, gold is still only worth what someone will give you for it. Is it not then held hostage to exchange having no fundamental uses of its own? Can you dig with it? Can you chop with it? Can you bring down a Wildebeest? All the gold in the would wont buy you glass of water in the Kalahari. The inherent fallacy in gold protecting you in times of economic collapse is plain. As the US economy goes, so goes the world. Who would you have step forth to trade needed commodities for one that has no fundamental use? As for rot, some say that is what has happened to my brain.

If gourmet meals, whale-watching, dog walkin', star gazing, boating on the Ocean, boozin', snoozin' and gardening ain't the life of Reilly, ( with occasional letter wriing to friends ) , I don't know what is!

FYI,
just created these charts of the S&P500/Gold ratio and S&P500/Platinum ratio. Now I'm no guru here but the S&P500/pt looks way past it's top. Since the precious metals group seems to move as a 'pack' gold can't be very far behind. In terms of gold the S&P tide seems to be turning.

Any comments??

FYI,
just created these charts of the S&P500/Gold ratio and S&P500/Platinum ratio. Now I'm no guru here but the S&P500/pt looks way past it's top. Since the precious metals group seems to move as a 'pack' gold can't be very far behind. In terms of gold the S&P tide seems to be turning.

Any comments??

After reading RJ's articulate and very insightful remarks I find myself speechless for the time being.

After reading RJ's articulate and very insightful remarks I find myself speechless for the time being.

RJ -- Your argument has some merit, but is inherently full of holes! Do you not know that the metals ARE the historical currencies? Do you not know that this debt based pyramid is VERY top heavy? Do you not know that this paper BS is but an aberation? Perhaps you should tell us what you DO know! I know that the metals WILL BE THE common tradeable commodity. Everyone won't need a particular caliber of bullet, a loaf of bread, a cow, or a silo or grain! But THE METALs will BE the common currency to acquire that which one needs. They'll be the way society picks its' ass odd the ground! I'm all for having the other basics on hand, but I also call the metals ONE of THOSE BASICS!

RJ -- Your argument has some merit, but is inherently full of holes! Do you not know that the metals ARE the historical currencies? Do you not know that this debt based pyramid is VERY top heavy? Do you not know that this paper BS is but an aberation? Perhaps you should tell us what you DO know! I know that the metals WILL BE THE common tradeable commodity. Everyone won't need a particular caliber of bullet, a loaf of bread, a cow, or a silo or grain! But THE METALs will BE the common currency to acquire that which one needs. They'll be the way society picks its' ass odd the ground! I'm all for having the other basics on hand, but I also call the metals ONE of THOSE BASICS!

Eldorado - It's a pleasure to have well thought and succinct arguments put forth. So now the time has come to drop the other shoe. I do not believe that the Fat Cats, Industrialists, and bankers will bring a fall. I know this will not sit well with this august group but it needed to be said. It is precisely the mentioned chubby felines that have the most to loose! Will it last forever? The longest culture in history was the Egyptians and they lasted a mere 2000 years. All societies will pass. I do agree that the world today is a house of cards, but it is a house that is in every mans best interest to stand, and no mans to fall. I am however protected against unexpected gusts or the mysterious sirocco that takes our tents before we wake. In the meantime, I will accumulate lots-o-these paper instruments of debt. Amazing as it seems, it was these very same pieces of paper that bought my lunch today, and paid for this computer, and pays the mortgage, and the car, and the gas, and. Well, you get the idea. Accumulation of paper today to trade for the commodities of the day and the invest for the future is the wisest way to protect oneself. But accepting you argument, arent there many other commodities in which more uses could be made? Before I am hammered by the rest ( I knew this would elevate some dander ) , I love gold, I own gold, and as the atheist once said, "I dont believe in God, but Im not going to tell Him that."

Eldorado - It's a pleasure to have well thought and succinct arguments put forth. So now the time has come to drop the other shoe. I do not believe that the Fat Cats, Industrialists, and bankers will bring a fall. I know this will not sit well with this august group but it needed to be said. It is precisely the mentioned chubby felines that have the most to loose! Will it last forever? The longest culture in history was the Egyptians and they lasted a mere 2000 years. All societies will pass. I do agree that the world today is a house of cards, but it is a house that is in every mans best interest to stand, and no mans to fall. I am however protected against unexpected gusts or the mysterious sirocco that takes our tents before we wake. In the meantime, I will accumulate lots-o-these paper instruments of debt. Amazing as it seems, it was these very same pieces of paper that bought my lunch today, and paid for this computer, and pays the mortgage, and the car, and the gas, and. Well, you get the idea. Accumulation of paper today to trade for the commodities of the day and the invest for the future is the wisest way to protect oneself. But accepting you argument, arent there many other commodities in which more uses could be made? Before I am hammered by the rest ( I knew this would elevate some dander ) , I love gold, I own gold, and as the atheist once said, "I dont believe in God, but Im not going to tell Him that."

MR BEAR -- I WOULDN'T BE A BIT SURPRISED!!!!!!!!!!!!!!!!!

MR BEAR -- I WOULDN'T BE A BIT SURPRISED!!!!!!!!!!!!!!!!!

For those of you that haven't figured it out yet, I trade metals for a living. I sell a lot of gold for delivery, but it is those who yearn for profits that receive a majority of my attention.

For those of you that haven't figured it out yet, I trade metals for a living. I sell a lot of gold for delivery, but it is those who yearn for profits that receive a majority of my attention.

A final thought for the evening, As no man is an island, no commodity exists in isolation.

A final thought for the evening, As no man is an island, no commodity exists in isolation.

RJ: Even though I do not adhere to your viewpoints, nonetheless, I still enjoy reading your posts.

RJ: Even though I do not adhere to your viewpoints, nonetheless, I still enjoy reading your posts.

RJ.. you mention that you like paper! Well the Germans liked the MARK
post WW-I,they needed millions of marks to buy a loaf of
bread. Also, the Russians and other East European countries who relied
on the Ruble will certainly say different today. The point I want to make, is that the paper currency of a country is only as good as the government printing it. If the government is corrupt and society at large
is defunct, the paper will be worthless and history repeats itself
again and again. Whereas, gold and other commodities have always
carried value, even for Germans and Russians. If you don't believe that
you can always ask them!! Besides,paper can always be called in by
a government and say tomorrow your 100 dollar bill will be a brand new
yellow 1 dollar bill.

RJ.. you mention that you like paper! Well the Germans liked the MARK
post WW-I,they needed millions of marks to buy a loaf of
bread. Also, the Russians and other East European countries who relied
on the Ruble will certainly say different today. The point I want to make, is that the paper currency of a country is only as good as the government printing it. If the government is corrupt and society at large
is defunct, the paper will be worthless and history repeats itself
again and again. Whereas, gold and other commodities have always
carried value, even for Germans and Russians. If you don't believe that
you can always ask them!! Besides,paper can always be called in by
a government and say tomorrow your 100 dollar bill will be a brand new
yellow 1 dollar bill.

CREDIT FUELS BANKRUPTCIES:
http://cnnfn.com/hotstories/economy/9706/09/bankruptcies/
Note: most bankrupts are very satisfied with the bankruptcy laws

CREDIT FUELS BANKRUPTCIES:
http://cnnfn.com/hotstories/economy/9706/09/bankruptcies/
Note: most bankrupts are very satisfied with the bankruptcy laws

YO Slick - yours in not a new augment. For those with a post apocalypse, down in the bomb shelter, procreating with your cousin mentality, I have no more reply. Can anyone put forth a compelling reason to treat gold for anything other than what it is? I tell you what, if it all fails and you are right, when you hear me pounding at your shelter door, dont let me in......................agggghhhhghghghghhg.......

YO Slick - yours in not a new augment. For those with a post apocalypse, down in the bomb shelter, procreating with your cousin mentality, I have no more reply. Can anyone put forth a compelling reason to treat gold for anything other than what it is? I tell you what, if it all fails and you are right, when you hear me pounding at your shelter door, dont let me in......................agggghhhhghghghghhg.......

Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )
http://www.geocities.com/WallStreet/5969/agpm70hr.gif

Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )
http://www.geocities.com/WallStreet/5969/agpm70hr.gif

ET: Assuming the metals do move in a 'pack' - I would reach the same
conclusion. But, I'm not willing to assume that yet.

RJ: non-sequitur? I found sequitur after looking in 4 online dictionaries. Is this the definition you wanted?

Main Entry: sequitur
Pronunciation: 'se-kw&-t&r, -"tur
Function: noun
Etymology: Latin, it follows, 3d person singular present indicative of sequi to follow --
more
at SUE
Date: 1836
: the conclusion of an inference

If so, what are you saying?

I just wasted 15 minutes writting a response to RJ's posts - then I
deleted it.

The PL/PA market responsed very well to the increase in margin
requirements today - IMHO. I'm still of the belief that the Russians or
the Tiger fund are not going to sell any white metals at discounts to
today's price. Which means the Dec contracts are really cheap.

ET: Assuming the metals do move in a 'pack' - I would reach the same
conclusion. But, I'm not willing to assume that yet.

RJ: non-sequitur? I found sequitur after looking in 4 online dictionaries. Is this the definition you wanted?

Main Entry: sequitur
Pronunciation: 'se-kw&-t&r, -"tur
Function: noun
Etymology: Latin, it follows, 3d person singular present indicative of sequi to follow --
more
at SUE
Date: 1836
: the conclusion of an inference

If so, what are you saying?

I just wasted 15 minutes writting a response to RJ's posts - then I
deleted it.

The PL/PA market responsed very well to the increase in margin
requirements today - IMHO. I'm still of the belief that the Russians or
the Tiger fund are not going to sell any white metals at discounts to
today's price. Which means the Dec contracts are really cheap.

RJ -- Whatever a 'Chubby Feline' might be! Man, I HATE metaphorical BS that isn't fairly/universally understandable! And, so what that you've gained some 'property' in paper. Does that answer the questions I've asked? NOT! And you have explained exactly 0% rational in your postings of gold being dead for the rest of the year! Why would one speak thus! Rational is all we ask! Don't mind me if I'm seeming to be a BIT sceptical of your more pronounced announcements of golds 'movements'! Besides, I trade my OWN rules any way. Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

RJ -- Whatever a 'Chubby Feline' might be! Man, I HATE metaphorical BS that isn't fairly/universally understandable! And, so what that you've gained some 'property' in paper. Does that answer the questions I've asked? NOT! And you have explained exactly 0% rational in your postings of gold being dead for the rest of the year! Why would one speak thus! Rational is all we ask! Don't mind me if I'm seeming to be a BIT sceptical of your more pronounced announcements of golds 'movements'! Besides, I trade my OWN rules any way. Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

Mooney ie COT #'s - They are from Steven Kaplans "Gold Mining Outlook" page at http://www.geocities.com/WallStreet/4915/index.html

Mooney ie COT #'s - They are from Steven Kaplans "Gold Mining Outlook" page at http://www.geocities.com/WallStreet/4915/index.html

RUSSIAN STOCKPILES: Why would the Russians leave us in the dark if their Pa/pt stockpiles are drawing down to zero? So the price stays low and they can sell even the last ounces cheaply? This is not logical. We should be hearing about the depletion very long in advance to manipulate the price upward.

The only reason I can think of keeping the depletion secret is the desire to borrow against nonexisting stockpiles. Does anyone have any thoughts on this?

RUSSIAN STOCKPILES: Why would the Russians leave us in the dark if their Pa/pt stockpiles are drawing down to zero? So the price stays low and they can sell even the last ounces cheaply? This is not logical. We should be hearing about the depletion very long in advance to manipulate the price upward.

The only reason I can think of keeping the depletion secret is the desire to borrow against nonexisting stockpiles. Does anyone have any thoughts on this?

Has anyone heard of our now infamous Yellowknife -

'Bre-x Salting Crew' cap?

check it out at: http://www.arcticspirit.com/bre-x.html

and let us know what you think.

Has anyone heard of our now infamous Yellowknife -

'Bre-x Salting Crew' cap?

check it out at: http://www.arcticspirit.com/bre-x.html

and let us know what you think.

RJ: Your essay was topnotch and covered things that needed to be said. Perhaps I missed it but I think you inadvertantly overlooked one important and fundamental element of gold's allure. That is its historical capacity to carry wealth through time.

All of the points you made regarding gold and its relationship to these modern times are true. The evidence is before us and is inescapable. And yet this era of diminished function for the role of gold is still only trading inside the span of one lifetime. As you pointed out, the Egyptians carried on for some 2000 years. We, by contrast, ain't even out of the starting blocks.

Granted, the case for edible commodities and the physical capacity to protect them. Unfortunately, current events speak grimly to the need.

That you would earn your bread and beans via modern instruments of exchange is not unlike those who have only their personal time to offer in exchange. You will share a common problem. That is, how do we lay by our excess now, for a time when we no longer have the capacity for everyday commerce. Just as farmer is unable to rely on his excess production for latter day sustenance, a trader of paper would be equally disadvantaged when considering that longer term imponderable. Obviously, if we are unable to continue to keep the mice out of the grain and inflation out our paper, what is to be done about it?

While your assets are perhaps more manageable than the unconverted assets of a farmer, the end result is still the same. Each left to their own devices would lose value very quickly. At the same time, the skill set required to manage paper assets in the current world and that of tomorrow is probably beyond the capacity of most individuals. If that is a valid assumption; what safeguards would people likely choose as simple, historically effective stores of value. It seems to me that gold and other precious metals are the solution. By so saying, I am not attempting any silly argument that gold is the perfect store. As you have said, the last 20 years would give lie to it.

In order to avoid belaboring the point, gold it seems to me will always fill the need for transporting wealth through time. Given its physical size/unit of value and its universal appeal and acceptance, it has additional appeal as a vehicle for transporting value through distance as well. Refugees are seldom found to be carrying potatoes or dried fish as there primary store of value. Much of it resides in mom's gold jewelry.

RJ: Your essay was topnotch and covered things that needed to be said. Perhaps I missed it but I think you inadvertantly overlooked one important and fundamental element of gold's allure. That is its historical capacity to carry wealth through time.

All of the points you made regarding gold and its relationship to these modern times are true. The evidence is before us and is inescapable. And yet this era of diminished function for the role of gold is still only trading inside the span of one lifetime. As you pointed out, the Egyptians carried on for some 2000 years. We, by contrast, ain't even out of the starting blocks.

Granted, the case for edible commodities and the physical capacity to protect them. Unfortunately, current events speak grimly to the need.

That you would earn your bread and beans via modern instruments of exchange is not unlike those who have only their personal time to offer in exchange. You will share a common problem. That is, how do we lay by our excess now, for a time when we no longer have the capacity for everyday commerce. Just as farmer is unable to rely on his excess production for latter day sustenance, a trader of paper would be equally disadvantaged when considering that longer term imponderable. Obviously, if we are unable to continue to keep the mice out of the grain and inflation out our paper, what is to be done about it?

While your assets are perhaps more manageable than the unconverted assets of a farmer, the end result is still the same. Each left to their own devices would lose value very quickly. At the same time, the skill set required to manage paper assets in the current world and that of tomorrow is probably beyond the capacity of most individuals. If that is a valid assumption; what safeguards would people likely choose as simple, historically effective stores of value. It seems to me that gold and other precious metals are the solution. By so saying, I am not attempting any silly argument that gold is the perfect store. As you have said, the last 20 years would give lie to it.

In order to avoid belaboring the point, gold it seems to me will always fill the need for transporting wealth through time. Given its physical size/unit of value and its universal appeal and acceptance, it has additional appeal as a vehicle for transporting value through distance as well. Refugees are seldom found to be carrying potatoes or dried fish as there primary store of value. Much of it resides in mom's gold jewelry.

Mike: I agree - it doesn't add up. One alternative explaination to the
loan is the Debeer's example. Russia has alot of dealing with Debeer's -
I think they just signed a diamond contract, late '96 or a couple of
months before they stopped shipping PA. I see alot of simularities
between diamonds and Palladium. Who knows - there is something bigger
going on here. Maybe someone from Debeer's introduced two friends to
each other at one of these meetings. These are really really small
circles of friends. I'll bet the S. African mining crowd it isn't to
different from the texas oil crowd.

Mike: I agree - it doesn't add up. One alternative explaination to the
loan is the Debeer's example. Russia has alot of dealing with Debeer's -
I think they just signed a diamond contract, late '96 or a couple of
months before they stopped shipping PA. I see alot of simularities
between diamonds and Palladium. Who knows - there is something bigger
going on here. Maybe someone from Debeer's introduced two friends to
each other at one of these meetings. These are really really small
circles of friends. I'll bet the S. African mining crowd it isn't to
different from the texas oil crowd.

Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

Mike, interesting point about the Russians, yeltsin did attempt
to co-opt the stock pile a while back as security for an IMF
loan, which made me think there must be something there, but
now am not so sure, curious lack of public hard info
on level of russian stockpile.

RJ: You're the best thing to happen to this site since I started reading it. You have a reasoned and rational approach and an obvious store of
experience. Please continue your postings. ( I have only one small criticism: your use of "it's" in place of "its." "Its" is analagous to "his" and "her" ( the possessive ) whereas "it's" means "it is." The misuse of "it's" and "its" is my pet peeve. )

RJ: You're the best thing to happen to this site since I started reading it. You have a reasoned and rational approach and an obvious store of
experience. Please continue your postings. ( I have only one small criticism: your use of "it's" in place of "its." "Its" is analagous to "his" and "her" ( the possessive ) whereas "it's" means "it is." The misuse of "it's" and "its" is my pet peeve. )

EBN Gold up a nickle and Silver UNCH...Mornin Tort!

EBN Gold up a nickle and Silver UNCH...Mornin Tort!

RJ: You are right. And so is everyone else. In that seeming disparity lies the lure of gold. Human activity leaves much room for gaps and blunders. Your observation "no commodity exists in isolation" is the key. Gold is thus a primo financial and emotional vehicle for the expression of many factors that, when they converge just so, can offer stupendous profits and enjoyable entertainment. It is not so much the plaything of the stupid and greedy as it is the gamepiece of the intelligent and adventurous of spirit. Hence the dialogue at Kitco, where adventurous, intelligent, spirited people gather 'round the campfire and spin yarns about their gold campaigns, hopes, and dreams. We are all looking for THE moment. We are all aware of the pitfalls, most having been stung heavily by the yellow bees, but back to try again. It is the timing and the observation that makes gold more valuable at times than others. Therein lies the key. I have been in a part of the world where even though bullets were, for a time, king, an ounce of gold could have bought enough stuff based in local debased currency to feed a small village for a week. It has its uses now and then. I know you know this. We enjoy our debates here, but somehow I think we all know that we do this to pass the time. Waiting for the BIG ONE. That's the REAL game. Yes, gold is a beautiful, magical, but sometimes impractical substance. But we find ways to give it a lustre of its own. Besides, a potato would look ludicrous stamped .999 Fine.

RJ: You are right. And so is everyone else. In that seeming disparity lies the lure of gold. Human activity leaves much room for gaps and blunders. Your observation "no commodity exists in isolation" is the key. Gold is thus a primo financial and emotional vehicle for the expression of many factors that, when they converge just so, can offer stupendous profits and enjoyable entertainment. It is not so much the plaything of the stupid and greedy as it is the gamepiece of the intelligent and adventurous of spirit. Hence the dialogue at Kitco, where adventurous, intelligent, spirited people gather 'round the campfire and spin yarns about their gold campaigns, hopes, and dreams. We are all looking for THE moment. We are all aware of the pitfalls, most having been stung heavily by the yellow bees, but back to try again. It is the timing and the observation that makes gold more valuable at times than others. Therein lies the key. I have been in a part of the world where even though bullets were, for a time, king, an ounce of gold could have bought enough stuff based in local debased currency to feed a small village for a week. It has its uses now and then. I know you know this. We enjoy our debates here, but somehow I think we all know that we do this to pass the time. Waiting for the BIG ONE. That's the REAL game. Yes, gold is a beautiful, magical, but sometimes impractical substance. But we find ways to give it a lustre of its own. Besides, a potato would look ludicrous stamped .999 Fine.

Morning Ted, and Waite! Just a darn minute now, Waite. What about the fact that so many here freely exchange there for their and vice-versa. Can't stand that and yet I've even caught myself doing it from time to time! :- )

Morning Ted, and Waite! Just a darn minute now, Waite. What about the fact that so many here freely exchange there for their and vice-versa. Can't stand that and yet I've even caught myself doing it from time to time! :- )

Mooney ( 00:10 ) To your list add re-building a house ( improving the real estate value ) ;makin money in that hated stock market and compoundind me money through D.R.I.P'S and yer right on the money...and throw in chainsawin all my heat source every year...Life of Reilly would kill you in two-three days...hahahaha

Mooney ( 00:10 ) To your list add re-building a house ( improving the real estate value ) ;makin money in that hated stock market and compoundind me money through D.R.I.P'S and yer right on the money...and throw in chainsawin all my heat source every year...Life of Reilly would kill you in two-three days...hahahaha

Mooney:

"Life of Reilly" eh!

Hey guy, I had to put up with the blazing 30 degree sunshine yesterday on the Seadoo! That was tough ! I had to lock the cat upstairs before she nearly made out with my slippers which were on my feet at the time! That was tough ! I had to go and take a baby catfish off my fishing hook since it had to go back in the river ! That was tough ! I had to eat 3 times ( twice with desert ) and absorb a $502 dollar loss yesterday ! That was tough ! So what did you do .... besides drive around the city in your air-conditioned car and visit people for tea in their air-conditioned homes and then come home and have a "cool" one because you worked sooooo hard? I tell you, I think the pots calling the kettle black a bit too much today !!! ( :- ) )

TED : send me an air-mail ..... OK above...

Mooney:

"Life of Reilly" eh!

Hey guy, I had to put up with the blazing 30 degree sunshine yesterday on the Seadoo! That was tough ! I had to lock the cat upstairs before she nearly made out with my slippers which were on my feet at the time! That was tough ! I had to go and take a baby catfish off my fishing hook since it had to go back in the river ! That was tough ! I had to eat 3 times ( twice with desert ) and absorb a $502 dollar loss yesterday ! That was tough ! So what did you do .... besides drive around the city in your air-conditioned car and visit people for tea in their air-conditioned homes and then come home and have a "cool" one because you worked sooooo hard? I tell you, I think the pots calling the kettle black a bit too much today !!! ( :- ) )

TED : send me an air-mail ..... OK above...

Good one Waite - your'e gonna have a field day at this site!

Good one Waite - your'e gonna have a field day at this site!

RJ: Your discourse on why gold is generally NG for much of anything is interesting. But the dollars I saved in 1933 ( I was 7 and caught nightcrawlers and sold them to fishermen 20 for a nickel ) now have less than 10 cents in comparitive purchasing power. The Double Eagle my Dad gave me that year rather than turn it in ( yes that made him a criminal! ) has in fact more purchasing power now than it did then. You may say this is a short term phenom. Perhaps. But I still like to have a few gold coins and some gold stocks in my pantry. And while I have not made a fortune in gold stocks since I started buying them in 1959 I have held my own in the purchasing power arena with them. Short term thinking you may say? Perhaps. But then aren't we all short term in the total scheme of things?

RJ: Your discourse on why gold is generally NG for much of anything is interesting. But the dollars I saved in 1933 ( I was 7 and caught nightcrawlers and sold them to fishermen 20 for a nickel ) now have less than 10 cents in comparitive purchasing power. The Double Eagle my Dad gave me that year rather than turn it in ( yes that made him a criminal! ) has in fact more purchasing power now than it did then. You may say this is a short term phenom. Perhaps. But I still like to have a few gold coins and some gold stocks in my pantry. And while I have not made a fortune in gold stocks since I started buying them in 1959 I have held my own in the purchasing power arena with them. Short term thinking you may say? Perhaps. But then aren't we all short term in the total scheme of things?

RJ: It is true economies change and the "global economy" of the 1990s may have some unique characteristics. Nevertheless, it is human psychology which ultimately drives markets. Currently, the expectation for metals is extremely low and for financials it is nirvana. I would posit it is these extremes in sentiment which give rise to reversal. Everyone is in financials and thus are potential sellers when there is disappointment conversely, everyone is negative and short metals thus giving great upward potential. When the horse gets out of the barn on either of these perceptions ,headlines and conventional wisdom will quickly change. This is the reason for the manipulation as the big financial people who have an interest in the current ponzi scheme know all too well that news follows price thus they try to keep the horse in the barn ie suppress gold rescue S&P when necessary. Their efforts will make the natural forces much more ferocious once they take over. Once it does you will soon here comments like "risky overvalued blue chips" risky junk bonds" and "liquid and safe metals". Once these headlines start pouring forth it will be very difficult for the "boys" to reverse the capital flow given the extreme situation that has been created. Platinum may be a warning sign.
The current arguments against gold are merely the product of its poor and contrived price performance and the negative sentiment trying to make sense of that which does not really make sense.

RJ: It is true economies change and the "global economy" of the 1990s may have some unique characteristics. Nevertheless, it is human psychology which ultimately drives markets. Currently, the expectation for metals is extremely low and for financials it is nirvana. I would posit it is these extremes in sentiment which give rise to reversal. Everyone is in financials and thus are potential sellers when there is disappointment conversely, everyone is negative and short metals thus giving great upward potential. When the horse gets out of the barn on either of these perceptions ,headlines and conventional wisdom will quickly change. This is the reason for the manipulation as the big financial people who have an interest in the current ponzi scheme know all too well that news follows price thus they try to keep the horse in the barn ie suppress gold rescue S&P when necessary. Their efforts will make the natural forces much more ferocious once they take over. Once it does you will soon here comments like "risky overvalued blue chips" risky junk bonds" and "liquid and safe metals". Once these headlines start pouring forth it will be very difficult for the "boys" to reverse the capital flow given the extreme situation that has been created. Platinum may be a warning sign.
The current arguments against gold are merely the product of its poor and contrived price performance and the negative sentiment trying to make sense of that which does not really make sense.

Front: Ya got a missile coomin yer way!...Mooney: We're on to yer games and why don't you get a real JOB and stop this charade that you actually WORK...How would you cope if you had to sit on the deck lookin at the ocean???...Could you deal with that Mooney??? I don't think so as it's very high-stress and I'm beginning to think I need a VACATION!

Front: Ya got a missile coomin yer way!...Mooney: We're on to yer games and why don't you get a real JOB and stop this charade that you actually WORK...How would you cope if you had to sit on the deck lookin at the ocean???...Could you deal with that Mooney??? I don't think so as it's very high-stress and I'm beginning to think I need a VACATION!

Rhodium story;
http://biz.yahoo.com/finance/97/06/10/strategic_1.html

Russian gold story;
http://biz.yahoo.com/finance/97/06/10/y0023_z00_10.html

PGM story;
http://biz.yahoo.com/finance/97/06/10/z0009_37.html

Rhodium story;
http://biz.yahoo.com/finance/97/06/10/strategic_1.html

Russian gold story;
http://biz.yahoo.com/finance/97/06/10/y0023_z00_10.html

PGM story;
http://biz.yahoo.com/finance/97/06/10/z0009_37.html

Tort: Where the hell is our mornin joke??...EBN Gold up a dime...

Tort: Where the hell is our mornin joke??...EBN Gold up a dime...

Waite - Re: your comment to RJ that, " You have a reasoned and rational approach and an obvious store of experience."
I would agree that RJ makes a valuable contribution to the site and that he ( for the most part ) tries to have a reasoned and rational approach and that, as many others also, he more than likely has a valuable store of experience. Where your statement ( and his reasoning ) falls apart though, is that I don't see any evidence that he has either first-hand knowledge ( read- experience ) or any historical knowledge of the final phase of the degrading of fiat currencies. His sharp retort to slick's 1:11 which he posted @ 1:21 seems to imply that the only way the economy can break down is through nuclear war or some such war-like 'apocalypse'. This 'reasoned' approach is not taking into account that economies can 'melt-down' for many other man-made reasons besides the advent of world war or environmental disaster. Modern ( post-1900 ) history is rife with examples of hyper-inflation. The last massive increase in the price of Gold and Silver ( 1980 ) was not due to physical shortage but due to the fact that a financial panic hit the Western world and the masses started to worry about the actual future value of the 'greenback'. For a brief period, people were glued to their T.V.'s watching the nightly news showing line-ups of people, at banks around the world, tring desperately to get Gold for their paper 'money'. Yes, kiddies, we did almost have a total financial melt-down in our lifetime and it may happen again. I'm not saying that this is a scenario that is to be fervently prayed for, but it is historical fact and to discount it offhand by degrading the messanger of such truths is not an entirely 'reasoned' and 'well-balanced' ( read- experienced ) approach.

Waite - Re: your comment to RJ that, " You have a reasoned and rational approach and an obvious store of experience."
I would agree that RJ makes a valuable contribution to the site and that he ( for the most part ) tries to have a reasoned and rational approach and that, as many others also, he more than likely has a valuable store of experience. Where your statement ( and his reasoning ) falls apart though, is that I don't see any evidence that he has either first-hand knowledge ( read- experience ) or any historical knowledge of the final phase of the degrading of fiat currencies. His sharp retort to slick's 1:11 which he posted @ 1:21 seems to imply that the only way the economy can break down is through nuclear war or some such war-like 'apocalypse'. This 'reasoned' approach is not taking into account that economies can 'melt-down' for many other man-made reasons besides the advent of world war or environmental disaster. Modern ( post-1900 ) history is rife with examples of hyper-inflation. The last massive increase in the price of Gold and Silver ( 1980 ) was not due to physical shortage but due to the fact that a financial panic hit the Western world and the masses started to worry about the actual future value of the 'greenback'. For a brief period, people were glued to their T.V.'s watching the nightly news showing line-ups of people, at banks around the world, tring desperately to get Gold for their paper 'money'. Yes, kiddies, we did almost have a total financial melt-down in our lifetime and it may happen again. I'm not saying that this is a scenario that is to be fervently prayed for, but it is historical fact and to discount it offhand by degrading the messanger of such truths is not an entirely 'reasoned' and 'well-balanced' ( read- experienced ) approach.

Latest issue of Nat. Review has an article by J. Dizard. He likes Plat and Pall, says SWC is in process of management change. Probably why SWC has had such a poor response to recent plat./pall rise. PDG is now being touted by another mkt. letter writer, prior to this he was neg. on gold.

Latest issue of Nat. Review has an article by J. Dizard. He likes Plat and Pall, says SWC is in process of management change. Probably why SWC has had such a poor response to recent plat./pall rise. PDG is now being touted by another mkt. letter writer, prior to this he was neg. on gold.

That IS the morning joke, Ted - Gold up a Dime!

That IS the morning joke, Ted - Gold up a Dime!

Morning Ted and all. The market appear rather lackluster this morning. It might be a good time to short platinum before it retrenches after its heavy gains. Russia is going to come out and sell when the price is right and the price will go down big time. Now for the joke of the morning.


Four international businessmen are on the golf course, and there is a
ringing sound. The Canadian guy goes to his golf bag, pulls out his cellular phone and talks for a minute with his office. "Very important to be in touch these days," he says. "Yes," his golfing partners agree.

A little bit later another, a different ring is heard, and the
American golfer holds his hand up to his head ( as if to imitate talking
on the phone ) and starts talking in what is clearly a real conversation.

After the call he explains to his friends, "It's the very latest in
cellular technology--a speaker is attached to my thumb, and a microphone to my pinky. You can't even tell I have it on."

A couple of holes later, a different, muted, ringing sound is
heard, and the German businessman in the foursome stands erect and begins
talking, again an obviously real conversation. When finished he explains,
"This really is the latest in cellular technology. A speaker is implanted in my ear, and a microphone in the backside of a front tooth. I just stand at attention to talk."

Suitably impressed, the foursome continues their game. Suddenly, the
Japanese golfer excuses himself and ducks behind a bush. After he doesn't re-appear for several minutes, the American golfer goes to make sure he is okay. He finds him behind the bushes squatting down with his pants around his ankles.

"Is everything okay?" asks the American.

"Yes," replies the Japanese golfer, "If you could just give me a
minute here, I'm expecting a fax..."

Morning Ted and all. The market appear rather lackluster this morning. It might be a good time to short platinum before it retrenches after its heavy gains. Russia is going to come out and sell when the price is right and the price will go down big time. Now for the joke of the morning.


Four international businessmen are on the golf course, and there is a
ringing sound. The Canadian guy goes to his golf bag, pulls out his cellular phone and talks for a minute with his office. "Very important to be in touch these days," he says. "Yes," his golfing partners agree.

A little bit later another, a different ring is heard, and the
American golfer holds his hand up to his head ( as if to imitate talking
on the phone ) and starts talking in what is clearly a real conversation.

After the call he explains to his friends, "It's the very latest in
cellular technology--a speaker is attached to my thumb, and a microphone to my pinky. You can't even tell I have it on."

A couple of holes later, a different, muted, ringing sound is
heard, and the German businessman in the foursome stands erect and begins
talking, again an obviously real conversation. When finished he explains,
"This really is the latest in cellular technology. A speaker is implanted in my ear, and a microphone in the backside of a front tooth. I just stand at attention to talk."

Suitably impressed, the foursome continues their game. Suddenly, the
Japanese golfer excuses himself and ducks behind a bush. After he doesn't re-appear for several minutes, the American golfer goes to make sure he is okay. He finds him behind the bushes squatting down with his pants around his ankles.

"Is everything okay?" asks the American.

"Yes," replies the Japanese golfer, "If you could just give me a
minute here, I'm expecting a fax..."

Economies just dont collapse and when they do, normally few see it coming. Collapses by definition arise from excesses in which most are participating stk mkt/excess credit etc.. Ergo few see the collapse or want to see the collapse coming. To illustrate how twisted the excesses can become I saw the comment today that excessive bankruptcies ( admittedly caused for the most part by job loss or pay cuts ) are a sign of a strong economy. With stks rising and the happy talk on TV what other explanation could there be. NEWS follows price. We will see what they say when the stk mkt falls. I bet the view will be different.

Ted@7:48 - Been There, Done That. Lived on Vancouver Island for seven years! Can't wait to go back.

Ted@7:48 - Been There, Done That. Lived on Vancouver Island for seven years! Can't wait to go back.

Economies just dont collapse and when they do, normally few see it coming. Collapses by definition arise from excesses in which most are participating stk mkt/excess credit etc.. Ergo few see the collapse or want to see the collapse coming. To illustrate how twisted the excesses can become I saw the comment today that excessive bankruptcies ( admittedly caused for the most part by job loss or pay cuts ) are a sign of a strong economy. With stks rising and the happy talk on TV what other explanation could there be. NEWS follows price. We will see what they say when the stk mkt falls. I bet the view will be different.

Mooney:

Hi again... Forgot to mention that today is going to be very stressful. I have to drive my 4x4 motorcycle through the bushes today. It's tough ducking all those branches and stopping to watch the deer play. Then it's off shopping with my wife. NOW THAT"S TOUGH ! Then I have to pick up my kid from baseball practice and inbetween all those stresses, watch the market to decide if RJ may be right or not !!! Tough day ahead lad !!!

RJ: Just a short note saying thanks for the topic. My problem is where you asked if I'd rather have the money or the gold at $430~. You went on to say that the value of the money had dropped to half. But the Gold had only dropped to $340. Doesn't that make gold a better holder of value as Earl mentionned? Just a thought ....

Off to the wars ....

TTFN

Mooney:

Hi again... Forgot to mention that today is going to be very stressful. I have to drive my 4x4 motorcycle through the bushes today. It's tough ducking all those branches and stopping to watch the deer play. Then it's off shopping with my wife. NOW THAT"S TOUGH ! Then I have to pick up my kid from baseball practice and inbetween all those stresses, watch the market to decide if RJ may be right or not !!! Tough day ahead lad !!!

RJ: Just a short note saying thanks for the topic. My problem is where you asked if I'd rather have the money or the gold at $430~. You went on to say that the value of the money had dropped to half. But the Gold had only dropped to $340. Doesn't that make gold a better holder of value as Earl mentionned? Just a thought ....

Off to the wars ....

TTFN

An article I read on Saturday in the IBD stated that the rise in the long bonds may be a sign of 'cognitive dissonance'. A psychological term. I prefer the word 'absurd', it has the same meaning. In other words, 'acting contrary to your belief', and knowing better.....

An article I read on Saturday in the IBD stated that the rise in the long bonds may be a sign of 'cognitive dissonance'. A psychological term. I prefer the word 'absurd', it has the same meaning. In other words, 'acting contrary to your belief', and knowing better.....

Front: ya gotta slow down and relax....cut back on the schedule a bit! Did ya get me e-mail....Tort:Will be checkin the headlines fer murdered commodities brokers...gotta run and return roto-tiller and then maybe stop at the CASINO fer some real gambling...and Mooney doesn't think this is WORK! Grow up Mooney and get TO WORK!

Front: ya gotta slow down and relax....cut back on the schedule a bit! Did ya get me e-mail....Tort:Will be checkin the headlines fer murdered commodities brokers...gotta run and return roto-tiller and then maybe stop at the CASINO fer some real gambling...and Mooney doesn't think this is WORK! Grow up Mooney and get TO WORK!

Thanks for your post. Since the "y2k" problem is imminent, immediate and serious, I am surprised at the lack of concern.

Front - Watch you don't hit no moose or flag-bearers as you whiz through the muskeg!
WW - I really can't tell you how much better I like your posts lately!
Ted - Walk-in, place $100 on number 23 immediately. When you collect the $3,500.00, go to the travel agency and buy a round ticket Toronto/ Sidney. Go to post office and mail it to me. I'll bring my metal detector and swimming trunks and we'll find that damn gold on Scaterie!

Front - Watch you don't hit no moose or flag-bearers as you whiz through the muskeg!
WW - I really can't tell you how much better I like your posts lately!
Ted - Walk-in, place $100 on number 23 immediately. When you collect the $3,500.00, go to the travel agency and buy a round ticket Toronto/ Sidney. Go to post office and mail it to me. I'll bring my metal detector and swimming trunks and we'll find that damn gold on Scaterie!

Thanks for your post. Since the "y2k" problem is imminent, immediate and serious, I am surprised at the lack of concern.

Dollar moving up slightly, a flight to quality? Fund managers selling european funds because of English and French election results. Meanwhile the Russians are doing their impersonation of the Three Stooges regarding the PGMs, "Now everybody point to their left! Not that left, your other left! ( slap! ) "

Now for our Three Stooges, wonder how the May jobs number will be revised? By a factor of 2+, again? Don't worry, be happy! Buy tech stocks! ;- ) )

Dollar moving up slightly, a flight to quality? Fund managers selling european funds because of English and French election results. Meanwhile the Russians are doing their impersonation of the Three Stooges regarding the PGMs, "Now everybody point to their left! Not that left, your other left! ( slap! ) "

Now for our Three Stooges, wonder how the May jobs number will be revised? By a factor of 2+, again? Don't worry, be happy! Buy tech stocks! ;- ) )

Tortfeasor, maybe you should find a blonde commodity broker! Just a thought. As your blonde friend, I think I suggested cash some time ago.

Tortfeasor, maybe you should find a blonde commodity broker! Just a thought. As your blonde friend, I think I suggested cash some time ago.

RJ: You made the point I have been trying to make and you did it in one post. How about a couple of hundred words on the cause of the German inflation of the '20s. The famous wheel barrel of money for a loaf of bread.

RJ: You made the point I have been trying to make and you did it in one post. How about a couple of hundred words on the cause of the German inflation of the '20s. The famous wheel barrel of money for a loaf of bread.

Platinum weakening today?
"Never make forecasts, especially about the future." ---Samuel Goldwyn
Oh-Oh! Time to buy some puts and calls? - Alan Greenspan is giving a speech tonight!
After reading Oracle of Alberta's 'threads' yesterday at Gold Eagle, I had a thought that I should share. It was about two weeks ago that someone here had a message from their large overseas dealer friend that there would be a lot of selling of gold at $355. Yesterday my Friedberg's broker suggested that that company ( large commodity broker ) would not be reversing their short position unless Aug. Gold broke $355. Also remember Glenn's sea of hands at certain price points? Gold barely budged ( even in a small show of sympathy ) with the massive Platinum move. That seemed strange to me. Has someone a stranglehold on the market? Where's that damned Shadow when you need him most?

Platinum weakening today?
"Never make forecasts, especially about the future." ---Samuel Goldwyn
Oh-Oh! Time to buy some puts and calls? - Alan Greenspan is giving a speech tonight!
After reading Oracle of Alberta's 'threads' yesterday at Gold Eagle, I had a thought that I should share. It was about two weeks ago that someone here had a message from their large overseas dealer friend that there would be a lot of selling of gold at $355. Yesterday my Friedberg's broker suggested that that company ( large commodity broker ) would not be reversing their short position unless Aug. Gold broke $355. Also remember Glenn's sea of hands at certain price points? Gold barely budged ( even in a small show of sympathy ) with the massive Platinum move. That seemed strange to me. Has someone a stranglehold on the market? Where's that damned Shadow when you need him most?

Vronsky: The discussion was about the US gov holding the price of gold at $20 during the 1929-1935 depression and thereby hold up the gold mining shares as well. Now Speed wants some proof that this actually happened.

Vronsky: The discussion was about the US gov holding the price of gold at $20 during the 1929-1935 depression and thereby hold up the gold mining shares as well. Now Speed wants some proof that this actually happened.

To D.A. or anyone else keeping a close eye on Gold Forwards,

I picked up the following comment on a Friday Gold market summary and wondered if you or other learned contributors' might know what this Macquarie Bank commentator is alluding to:
"Yesterday's huge borrowing in the gold forwards was believed to have been on behalf of a U.S. based house who was defensively covering gold forward positions as a result of difficulties stemming
from its palladium trading."
It is taken from http://www.macquarie.com.au/menu/mnu32.htm

Perhaps this might be a sign that metal loan problems in PL and PA are starting to filter over into Gold as Ted Butler is expecting.

I would welcome any info on Gold forwards starting to be covered.
Happy Trading JC

To D.A. or anyone else keeping a close eye on Gold Forwards,

I picked up the following comment on a Friday Gold market summary and wondered if you or other learned contributors' might know what this Macquarie Bank commentator is alluding to:
"Yesterday's huge borrowing in the gold forwards was believed to have been on behalf of a U.S. based house who was defensively covering gold forward positions as a result of difficulties stemming
from its palladium trading."
It is taken from http://www.macquarie.com.au/menu/mnu32.htm

Perhaps this might be a sign that metal loan problems in PL and PA are starting to filter over into Gold as Ted Butler is expecting.

I would welcome any info on Gold forwards starting to be covered.
Happy Trading JC

Fundy -- Didn't they ( government ) devalue to $35/oz in 1933???

Fundy -- Didn't they ( government ) devalue to $35/oz in 1933???

fyi -interesting artical
http://www.ms.com/GEFdata/digests/latest-digest.htm#xtocid157695

fyi -interesting artical
http://www.ms.com/GEFdata/digests/latest-digest.htm#xtocid157695

apologies try http://www.ms.com/GEFdata/digests/latest.htm
it is the artical on China & Oil

apologies try http://www.ms.com/GEFdata/digests/latest.htm
it is the artical on China & Oil

http://www.ms.com/GEFdata/digests/latest.html

http://www.ms.com/GEFdata/digests/latest.html

Blonde, good to see you back. I thought maybe you had washed out in the tide. Tell me more about the advantages of a blonde broker. Its a given that I can't do much worse than I have been doing lately. Just as I thought platinum and paladium regrouping at a lower price. Do you see these metal continuing an upward spiral after this retrenchment?

Blonde, good to see you back. I thought maybe you had washed out in the tide. Tell me more about the advantages of a blonde broker. Its a given that I can't do much worse than I have been doing lately. Just as I thought platinum and paladium regrouping at a lower price. Do you see these metal continuing an upward spiral after this retrenchment?

FUNDY & SPEED: I think you will find most of your answers by clicking the black banner with gold mask entitled: HISTORY OF GOLD on the Gold Digest page:
http://www.gold-eagle.com/gold_digest.html

FUNDY & SPEED: I think you will find most of your answers by clicking the black banner with gold mask entitled: HISTORY OF GOLD on the Gold Digest page:
http://www.gold-eagle.com/gold_digest.html

Gold stocks not doing well this morning; skepticism over yesterday's rally was justified.

WW: Amen! The current huge overvaluation in financial assets and undervaluation of the metals virtually guarantee that the inevitable reversals will be much stronger than most anticipate.

Gold stocks not doing well this morning; skepticism over yesterday's rally was justified.

WW: Amen! The current huge overvaluation in financial assets and undervaluation of the metals virtually guarantee that the inevitable reversals will be much stronger than most anticipate.

Eldorado - NO NEED TO SHOUT! WE ARE ALL GENTLEMEN HERE. In reply to your response to my recent treatise on gold:

The issue of trust has been raised. Since nothing I say or do can possibly affect you, nor do I wish to change your mind, nor are you a client of mine, I fail to see how trust is an issue. My usual response to paranoia is to stand on your left, reach around your back, and tap your right shoulder. As for "chubby feline", please read the sentence regarding "fat cats" just prior to the offending reference. I recognize that there is an entire sentence between these two references. Is short term memory a problem here? I do admit the second reference was a bit lame, but I like to play with words and sometimes ignore my better instincts. As for not yet responding to your request for explanation of my reasons to expect lackluster performance for gold this year, did you not read my 23:23? I apologize for not adhering to your timetable, but the year is less than half over, is a few days too long? You are nothing if not passionate.

Eldorado - NO NEED TO SHOUT! WE ARE ALL GENTLEMEN HERE. In reply to your response to my recent treatise on gold:

The issue of trust has been raised. Since nothing I say or do can possibly affect you, nor do I wish to change your mind, nor are you a client of mine, I fail to see how trust is an issue. My usual response to paranoia is to stand on your left, reach around your back, and tap your right shoulder. As for "chubby feline", please read the sentence regarding "fat cats" just prior to the offending reference. I recognize that there is an entire sentence between these two references. Is short term memory a problem here? I do admit the second reference was a bit lame, but I like to play with words and sometimes ignore my better instincts. As for not yet responding to your request for explanation of my reasons to expect lackluster performance for gold this year, did you not read my 23:23? I apologize for not adhering to your timetable, but the year is less than half over, is a few days too long? You are nothing if not passionate.

I'll respond to other comments later, I've got metals to trade.

I'll respond to other comments later, I've got metals to trade.

Waite - Its a wonderful day in the neighborhood. Its nice to be appreciated. OH, my! Im going to be late! Its time to go!

Waite - Its a wonderful day in the neighborhood. Its nice to be appreciated. OH, my! Im going to be late! Its time to go!

Platinum getting knocked out of bed this morning. Maybe gold can move in an take its place on the next move up.

Platinum getting knocked out of bed this morning. Maybe gold can move in an take its place on the next move up.

Steve: Yes the cost will be tremendous for both - correcting the problem
and conducting the business and fight legal battles in the post
year 2000 market.

In early July 1996 the standards-and-practices-setting Financial
Accounting Standards Board ( FASB ) ruled that companies cannot amortize
Yr2k work as an extraordinary capital expense but must deduct from
earnings on a quarterly basis as the work is done. Other financial and
accounting associations have agreed with the FASB, and the Federal
Financial Institutions Examination Council ( FFIEC ) has issued its own
set of directives.

Reasoning is ( and I believe rightly so ) that the Y2K correction does not
add any new functionality or value to company books - you get the same
system ( except that it may work past year 2000 ) .
Whats even more depressing is that many companies do not even know about
it and are early in a process of estimating how much it will cost to
correct the problem. This means they will hand a very unpleasant
surprise package to board of directors and company shareholders when they
have all numbers in place.

Steve: Yes the cost will be tremendous for both - correcting the problem
and conducting the business and fight legal battles in the post
year 2000 market.

In early July 1996 the standards-and-practices-setting Financial
Accounting Standards Board ( FASB ) ruled that companies cannot amortize
Yr2k work as an extraordinary capital expense but must deduct from
earnings on a quarterly basis as the work is done. Other financial and
accounting associations have agreed with the FASB, and the Federal
Financial Institutions Examination Council ( FFIEC ) has issued its own
set of directives.

Reasoning is ( and I believe rightly so ) that the Y2K correction does not
add any new functionality or value to company books - you get the same
system ( except that it may work past year 2000 ) .
Whats even more depressing is that many companies do not even know about
it and are early in a process of estimating how much it will cost to
correct the problem. This means they will hand a very unpleasant
surprise package to board of directors and company shareholders when they
have all numbers in place.

Have just been watching a PBS ( US ) TV show here in Australia on the US Stock Market. After realising that some of the US stock/mutual fund holders have got virtually ALL of their funds invested in shares, for the "long term", a great chilling fear has crept over me. One lady who was interviewed didn't even know what stocks she was in! ( not to mention she was a very DUMB blonde ) . The dumb husband has just let her do it, because they "need to make some fast money". God help us!!!! The fever is nowhere as great here as in the US. Time to watch out!!!!

Have just been watching a PBS ( US ) TV show here in Australia on the US Stock Market. After realising that some of the US stock/mutual fund holders have got virtually ALL of their funds invested in shares, for the "long term", a great chilling fear has crept over me. One lady who was interviewed didn't even know what stocks she was in! ( not to mention she was a very DUMB blonde ) . The dumb husband has just let her do it, because they "need to make some fast money". God help us!!!! The fever is nowhere as great here as in the US. Time to watch out!!!!

JohnC:

That lease rates have jumped for gold and silver based upon the action in Pa and Pl is not that surprising. I think that a lot of people are squaring up positions so as not to be caught by any big moves. This may involve getting the herd back inside the barn and thus the physical tightness in the markets.

On the topic of Pa and Pl. I am more familiar with the action in the Pa market because I have been intimately involved with it over the last several nights. The current selling in both metals is coming out of one of the big US trade houses. This selling was advertised up front, so my belief is that it is a play to shake some longs. I don't think anything at all has changed on the fundamental field and that is what is driving these markets. I have heard some rumors to the effect that Tiger doesn't control nearly as much physical metal as was thought but that they still have substantial paper positions that will come rolling in. If this is true then the situation may actually be more precarious then had been previously thought.

My base assumption with regards to at least the Pa market is that price is going to have to ration supply. We must reach a price that effectively terminates some segment of market demand. I don't know the number but still suspect it is much, much higher. We have sold almost 80% of our long position but that is only because the value of the position grew to such an enormous size relative to the funds that we manage that prudence required its disposal. I would not be surprised if this effect accounted for similar long liquidation.

As I have pointed out before, the pattern in the squeeze markets over the last few years has been and initial spike, followed by a lull, and then a more massive squeeze in the next delivery period. All the signs point to a similar outcome in the Pa market. This would make Sept Pa very attractive.

JohnC:

That lease rates have jumped for gold and silver based upon the action in Pa and Pl is not that surprising. I think that a lot of people are squaring up positions so as not to be caught by any big moves. This may involve getting the herd back inside the barn and thus the physical tightness in the markets.

On the topic of Pa and Pl. I am more familiar with the action in the Pa market because I have been intimately involved with it over the last several nights. The current selling in both metals is coming out of one of the big US trade houses. This selling was advertised up front, so my belief is that it is a play to shake some longs. I don't think anything at all has changed on the fundamental field and that is what is driving these markets. I have heard some rumors to the effect that Tiger doesn't control nearly as much physical metal as was thought but that they still have substantial paper positions that will come rolling in. If this is true then the situation may actually be more precarious then had been previously thought.

My base assumption with regards to at least the Pa market is that price is going to have to ration supply. We must reach a price that effectively terminates some segment of market demand. I don't know the number but still suspect it is much, much higher. We have sold almost 80% of our long position but that is only because the value of the position grew to such an enormous size relative to the funds that we manage that prudence required its disposal. I would not be surprised if this effect accounted for similar long liquidation.

As I have pointed out before, the pattern in the squeeze markets over the last few years has been and initial spike, followed by a lull, and then a more massive squeeze in the next delivery period. All the signs point to a similar outcome in the Pa market. This would make Sept Pa very attractive.

http://www.latimes.com/HOME/NEWS/NATION/topstory.html

Bart, I'm going to start posting here if you don't soon administer my
previous e-mails to post on channel 2. Please.

http://www.latimes.com/HOME/NEWS/NATION/topstory.html

Bart, I'm going to start posting here if you don't soon administer my
previous e-mails to post on channel 2. Please.

Hmm...Dow Industrials rocketing up tp 7555 ( approx ) , while Dow Utilities down to 219...this continual divergence probably will not hold up. As Richard Russell of CA says, this is a good sign of a bear onset.
In the real world, plenty of rain here tonight, but the farmers here feel there may be a drought in Australia this year. ( El Nino effect again )

Hmm...Dow Industrials rocketing up tp 7555 ( approx ) , while Dow Utilities down to 219...this continual divergence probably will not hold up. As Richard Russell of CA says, this is a good sign of a bear onset.
In the real world, plenty of rain here tonight, but the farmers here feel there may be a drought in Australia this year. ( El Nino effect again )

RJ: in your post of 23:23 you stated that "Gold is the IDEA of wealth". I quite agree. What you fail to realize is that the only place that this idea has been abandoned is in the western world where people believe that little pieces of paper with pictures of dead guys on them are wealth. The rest of the world ( a few billion people give or take ) still consider gold to be a store of wealth and therefore it is.

You pointed out that gold is at an 18 year low in US$. I say "What a deal!". Should I be able to profit short term from that I will. But I will also accumulate that shiny stuff. It is foolish to think that western economic power and values will continue ad infinitum and quite frankly the "West" has seen its zenith. In twenty years none of the worlds 20 largest cities will be in North America or Europe. So who then will set the standard of what is valuable?

As for me, I will keep my gold, my grain and my gun all close at hand in the coming decade.

RJ: in your post of 23:23 you stated that "Gold is the IDEA of wealth". I quite agree. What you fail to realize is that the only place that this idea has been abandoned is in the western world where people believe that little pieces of paper with pictures of dead guys on them are wealth. The rest of the world ( a few billion people give or take ) still consider gold to be a store of wealth and therefore it is.

You pointed out that gold is at an 18 year low in US$. I say "What a deal!". Should I be able to profit short term from that I will. But I will also accumulate that shiny stuff. It is foolish to think that western economic power and values will continue ad infinitum and quite frankly the "West" has seen its zenith. In twenty years none of the worlds 20 largest cities will be in North America or Europe. So who then will set the standard of what is valuable?

As for me, I will keep my gold, my grain and my gun all close at hand in the coming decade.

Waite: It's clear and I also plead, mea culpa. Improving communition skills requires conscious effort. Correction with elaboration will be gratefully accepted. Whether on line or off.

Mooney: Misuse of "There" and "their" is not the result of ignorance so much as inadvertance IMO.

Waite: It's clear and I also plead, mea culpa. Improving communition skills requires conscious effort. Correction with elaboration will be gratefully accepted. Whether on line or off.

Mooney: Misuse of "There" and "their" is not the result of ignorance so much as inadvertance IMO.

More news about the Russian supply situation at http://www.kitco.com/news.platinum.html.

Father's Day is coming up ...

http://ww.arcticspirit.com/bre-x.html

Father's Day is coming up ...

http://ww.arcticspirit.com/bre-x.html

More news about the Russian supply situation at http://www.kitco.com/news.platinum.html.

What do Floor Exchange Specialists do to unload their stock inventory?: RAISE PRICES to stimulate demand. What do they do to accumulate and replenish their inventory: DROP PRICES to encourage public selling.

Only in an investment world would we see prices going up to get rid of inventory rather than the other way around.

What do Floor Exchange Specialists do to unload their stock inventory?: RAISE PRICES to stimulate demand. What do they do to accumulate and replenish their inventory: DROP PRICES to encourage public selling.

Only in an investment world would we see prices going up to get rid of inventory rather than the other way around.

Hello I need assistance! Can any one give me a site where I can get the chart for the Dow for a past period of 10 yrs + ???

Hello I need assistance! Can any one give me a site where I can get the chart for the Dow for a past period of 10 yrs + ???

Arden, thank you for continuing to post the wharehouse numbers - do you expect they are being "cooked" yet? Might there be little or no metal there? What do the Pt and Pd wharehouse numbers look like?

Spud

Arden, thank you for continuing to post the wharehouse numbers - do you expect they are being "cooked" yet? Might there be little or no metal there? What do the Pt and Pd wharehouse numbers look like?

Spud

To all. Last week I had to visit a fund managers meeting in Vienna/Austria. I got the opportunity to talk to Trevor Steel. He is the manager of the Mercury Gold and Miningn Fund. As goldfund-manager he's bullish for the goldmarkets ( he was already 12 months ago, when I met him the first time ) , but he did some interesting analysing work:
He compared the performance of gold stocks during the big crash-periods in this century:
In august 1929 Homestake Mining was at 80 USD in June 1932 it was uo 50% and in January 1936 it was up 556 % at 525 USD. In the same Periode the S&P Composite went down 81 % in the first step and 7 years after the crash it still was down 55%.
During the oil crisis in the 70s Homestake made 60 % between January 73 and October 74. The S&P lost 36 %.
After the October-Crash 1987 the gold stocks suffered much more ( -40% ) than the broad market, but they did much better than the S&P about one year before the crash - the went up aprox. 50 % from march to april 87, sthe S&P did almost nothing at the same time. After the crash the bullion price about 10 percent.
At the moment Trevor Steel believes that about 50 % of the world goldmines work without profit. During the first quarter 97 there was the highest demand for gold ever recorded. Total demand in monitored markets was uo 17 % to 770.6 tonnes.
To get a feeling how financials are valued Mercury compared the annual returns of gold, bonds and stocks:
1926 - 1997
Stocks 10,7 % p.a.
Bonds 5,1% p.a.
Gold Bullion 4,2 % p.a.

1980 - 1997
Stocks 17,3 % p.a.
Bonds 12,3 % p.a.
Gold Bullion -2,1 % p.a.

If the world wishes to invest in gold, we'll see a nice squeeze:
The capitalisation of the WORLD Gold Mining-Industrie is around 78 Bio. US$ - IBMs is 80 Bio. US$, Intels 130 Bio. US$.

No chance to be wrong investing in gold.

Regards

To all. Last week I had to visit a fund managers meeting in Vienna/Austria. I got the opportunity to talk to Trevor Steel. He is the manager of the Mercury Gold and Miningn Fund. As goldfund-manager he's bullish for the goldmarkets ( he was already 12 months ago, when I met him the first time ) , but he did some interesting analysing work:
He compared the performance of gold stocks during the big crash-periods in this century:
In august 1929 Homestake Mining was at 80 USD in June 1932 it was uo 50% and in January 1936 it was up 556 % at 525 USD. In the same Periode the S&P Composite went down 81 % in the first step and 7 years after the crash it still was down 55%.
During the oil crisis in the 70s Homestake made 60 % between January 73 and October 74. The S&P lost 36 %.
After the October-Crash 1987 the gold stocks suffered much more ( -40% ) than the broad market, but they did much better than the S&P about one year before the crash - the went up aprox. 50 % from march to april 87, sthe S&P did almost nothing at the same time. After the crash the bullion price about 10 percent.
At the moment Trevor Steel believes that about 50 % of the world goldmines work without profit. During the first quarter 97 there was the highest demand for gold ever recorded. Total demand in monitored markets was uo 17 % to 770.6 tonnes.
To get a feeling how financials are valued Mercury compared the annual returns of gold, bonds and stocks:
1926 - 1997
Stocks 10,7 % p.a.
Bonds 5,1% p.a.
Gold Bullion 4,2 % p.a.

1980 - 1997
Stocks 17,3 % p.a.
Bonds 12,3 % p.a.
Gold Bullion -2,1 % p.a.

If the world wishes to invest in gold, we'll see a nice squeeze:
The capitalisation of the WORLD Gold Mining-Industrie is around 78 Bio. US$ - IBMs is 80 Bio. US$, Intels 130 Bio. US$.

No chance to be wrong investing in gold.

Regards

According to Vronsky's History of Gold the US price was $20.67 until 1934 when it was raised to $35. Interesting the price had been $20.67 for a 100 years. I think this limits the notion that gold holds its value through a depression. It does as long as the US Gov intervenes.

According to Vronsky's History of Gold the US price was $20.67 until 1934 when it was raised to $35. Interesting the price had been $20.67 for a 100 years. I think this limits the notion that gold holds its value through a depression. It does as long as the US Gov intervenes.

Bart: Once again, thanks for providing us with updates on the PGMs... Please keep 'em coming. Bet D.A. is BUSY!!

Bart: Once again, thanks for providing us with updates on the PGMs... Please keep 'em coming. Bet D.A. is BUSY!!

GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may see entire study at:
http://www.gold-eagle.com/editorials/great_crash.html

GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may see entire study at:
http://www.gold-eagle.com/editorials/great_crash.html

GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may entire study at:
http://www.gold-eagle.com/editorials/great_crash.html

GERY: An interesting post. I think perhaps Trevor Steel 'borrowed' the gold stocks 1929-1935 data from a sutdy I did THREE YEARS AGO. You may entire study at:
http://www.gold-eagle.com/editorials/great_crash.html

Noticed CRUDE OIL & NAT GAS puts running ahead of calls on futures options. This is usually a warm clue to impending price rally. Especially the gas. Just thought the energy traders would be interested. Also, intermediate term price pattern is at support ( give or take a dime or two ) in crude oil on the weekly chart. And last but not least, Mars trines ( 120 degree angle ) NYSE Neptune Thursday & Friday of this week. Could be a minor lift to oil there, but I'm not talking betting the farm.

Noticed CRUDE OIL & NAT GAS puts running ahead of calls on futures options. This is usually a warm clue to impending price rally. Especially the gas. Just thought the energy traders would be interested. Also, intermediate term price pattern is at support ( give or take a dime or two ) in crude oil on the weekly chart. And last but not least, Mars trines ( 120 degree angle ) NYSE Neptune Thursday & Friday of this week. Could be a minor lift to oil there, but I'm not talking betting the farm.

Sorry, computer has hiccups.

Sorry, computer has hiccups.

vronsky: No inadvertant slip. Just defending your intellectual property. A cyber-freudian slip if you ask me. You are THE gold historian!!! ALL: August gold still needs to break out of short term downtrend to get going. At this point in time & space, the magic number to pass is $348.

vronsky: No inadvertant slip. Just defending your intellectual property. A cyber-freudian slip if you ask me. You are THE gold historian!!! ALL: August gold still needs to break out of short term downtrend to get going. At this point in time & space, the magic number to pass is $348.

Mike Sheller: Astute and timely comment about CRUDE OIL & NATURAL GAS. The Oil & Gas Index ( XOI ) broke out on friday - suppoting your post. See:
http://www.gold-eagle.com/crude_oil/xoi_chart.html

Mike Sheller: Astute and timely comment about CRUDE OIL & NATURAL GAS. The Oil & Gas Index ( XOI ) broke out on friday - suppoting your post. See:
http://www.gold-eagle.com/crude_oil/xoi_chart.html

Mooney: I'm in great shape for a low tide. If the recent call for 20,000 an oz comes true I'll be a multimillionaire--like most here. I expect it will be a long time acoming. What is the story with you and the Hepcat? He is blasting you on about 4 different sites.

Mooney: I'm in great shape for a low tide. If the recent call for 20,000 an oz comes true I'll be a multimillionaire--like most here. I expect it will be a long time acoming. What is the story with you and the Hepcat? He is blasting you on about 4 different sites.

How many think Friday's metals' option expiration will be anything but dull?

How many think Friday's metals' option expiration will be anything but dull?

All the elements are in place for an explosive up move in the other white precious metal. It sounds trite, but this could be our last chance below 5.00.

o Bullish consensus at 31% up from 25% several weeks ago. This months worth of consensus is the lowest in many years.

o Commericals covering shorts for the last two months. They now hold one of their smallest short positions in many years. The silver commercials are rarely wrong, sometimes but rarely.

o Open interest low and falling. Watch this one. One day with a 3,000 - 5,000 or so contract drop on rising prices and we are off to the races.

o Other metals heating up. They do often travel in packs.

o DA says dont be short.

o Sentiment so rotten you feel like giving away all metals. Dont even bother selling it. Give it away.

o Paper is where its at. Stocks gain 120 billion on a fair day. Everyone is buying paper, nobody buys metals.

o My wife said I could buy some more if I get her a gold bracelet. You can always use more gold.

All the elements are in place for an explosive up move in the other white precious metal. It sounds trite, but this could be our last chance below 5.00.

o Bullish consensus at 31% up from 25% several weeks ago. This months worth of consensus is the lowest in many years.

o Commericals covering shorts for the last two months. They now hold one of their smallest short positions in many years. The silver commercials are rarely wrong, sometimes but rarely.

o Open interest low and falling. Watch this one. One day with a 3,000 - 5,000 or so contract drop on rising prices and we are off to the races.

o Other metals heating up. They do often travel in packs.

o DA says dont be short.

o Sentiment so rotten you feel like giving away all metals. Dont even bother selling it. Give it away.

o Paper is where its at. Stocks gain 120 billion on a fair day. Everyone is buying paper, nobody buys metals.

o My wife said I could buy some more if I get her a gold bracelet. You can always use more gold.

Another PL/PA story...
http://biz.yahoo.com/finance/97/06/10/y0023_z00_19.html

Another PL/PA story...
http://biz.yahoo.com/finance/97/06/10/y0023_z00_19.html

Just as a voice of warning---don't buy platinum future options. Friday I bought 440 put options when platinum was at 470 an ounce. I just sold the option today when platinum was at 436. Because of the spread and the thin market I managed to lose money on what seemed like a sweet deal and a big profit. Ladies and genetlement beware and learn from the screwee on that deal.

Just as a voice of warning---don't buy platinum future options. Friday I bought 440 put options when platinum was at 470 an ounce. I just sold the option today when platinum was at 436. Because of the spread and the thin market I managed to lose money on what seemed like a sweet deal and a big profit. Ladies and genetlement beware and learn from the screwee on that deal.

Tortfeasor -- Read my 13:54...

Tortfeasor -- Read my 13:54...

Panda: Thank you for high-lighting the yahoo stories each morning.

Regarding the last one: ~"Anglo American Platinum Corp Ltd saw the
Russian stockpiles have been depleted". I wonder if they know this
or they think it?

Panda: Thank you for high-lighting the yahoo stories each morning.

Regarding the last one: ~"Anglo American Platinum Corp Ltd saw the
Russian stockpiles have been depleted". I wonder if they know this
or they think it?

Tortfeasor -- Don't misunderstand.... The PA/PL situation is far from 'done'. IMO, it would be 'nice' if it looked that way. Too many people with 'exposed' posteriors. Anything can and will happen, especially in markets as 'thin' as these are! Rhodium is hopping to!

kuton -- Your welcome!

Tortfeasor -- Don't misunderstand.... The PA/PL situation is far from 'done'. IMO, it would be 'nice' if it looked that way. Too many people with 'exposed' posteriors. Anything can and will happen, especially in markets as 'thin' as these are! Rhodium is hopping to!

kuton -- Your welcome!

Earl@21:49, Eldorado@22:07 - I suspect the real significance of Big Trader and Ted Butler's obervations is that the true supply/demand picture is very clouded with all this paper flying around. There is no way of knowing where everyone is exactly becase of all this forward selling and gold leasing.

While a lot of gold mines would be loosing money at these price levels they all seem to be living off of forward sales in any case. Mining is becoming a means of fulfilling ones contractual obligations. It would appear that mines make their money ( like everyone else ) on the trading desk. Actually hauling rock out of the ground and extracting gold seems to be something one does to keep the lawyers happy.

The issue here is how does one price gold mining companies and the underlying metal. Should one analyse ABX like Goldman Sachs? If so where are the relevant numbers? What is ABX's portfolio risk? Is gold simply now a financial construct like a repo or a spread??

Perhaps it is old fashioned to look a mining companies cost of recovery but rather look at it's cost of meeting obligations. Why should it mine when it can borrow more cheaply?? Why should it borrow when it can cover it's forward sales with an option - matching paper with paper??

Bullion market?? Isn't that next door to the buggy whip museum??

Earl@21:49, Eldorado@22:07 - I suspect the real significance of Big Trader and Ted Butler's obervations is that the true supply/demand picture is very clouded with all this paper flying around. There is no way of knowing where everyone is exactly becase of all this forward selling and gold leasing.

While a lot of gold mines would be loosing money at these price levels they all seem to be living off of forward sales in any case. Mining is becoming a means of fulfilling ones contractual obligations. It would appear that mines make their money ( like everyone else ) on the trading desk. Actually hauling rock out of the ground and extracting gold seems to be something one does to keep the lawyers happy.

The issue here is how does one price gold mining companies and the underlying metal. Should one analyse ABX like Goldman Sachs? If so where are the relevant numbers? What is ABX's portfolio risk? Is gold simply now a financial construct like a repo or a spread??

Perhaps it is old fashioned to look a mining companies cost of recovery but rather look at it's cost of meeting obligations. Why should it mine when it can borrow more cheaply?? Why should it borrow when it can cover it's forward sales with an option - matching paper with paper??

Bullion market?? Isn't that next door to the buggy whip museum??

To Kitco Teckies:

Deaner's Prudent Trader page with its analysis of the XAU and Gold has some interesting WEEKLY charts and commentary on the XAU and gold. Take a look: http://www.geocities.com/WallStreet/8139

To Kitco Teckies:

Deaner's Prudent Trader page with its analysis of the XAU and Gold has some interesting WEEKLY charts and commentary on the XAU and gold. Take a look: http://www.geocities.com/WallStreet/8139

RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as "the" reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been uni

RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as "the" reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been uni

RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as "the" reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been universally accepted as such due to its singular unique suitability as a medium of exchange. No other commodity, or arguably "money", comes close to equaling its cumulative desirable characteristics of ease of transport, divisibility, esthetic appeal, indestructibility, global distribution, value retention, multiple of existing stock to new supply, and excellent marginal utility. It is for this reason that gold is still highly prized and almost all gold that has been mined has been retained. Rather than being a barbaric relic of the past, evidence, such as the LBMA turnover and its continued use as a reserve base, suggests that gold does and will continue to serve its role as money for the foreseeable future.

And it is in this more important capacity as money that gold will be sought after or abandoned ( including being added to or subtracted from reserves ) in consideration of actual or perceived economic and political conditions and gold's relative value to other monetary alternatives. And as gold is sought or abandoned, its relative value as money will rise and fall accordingly. And how one perceives the direction of gold value in such a monetary capacity should be the main determinate for one's investment in gold.

RJ's recent thought-provoking posts have indeed reached their stated goal of inviting discourse, and I would like to add my comments in continuation of that theme.

What is gold. If it is merely a commodity, then it should only react to supply and demand for jewelery and industrial use. And it should be traded accordingly. And, as available supply far exceeds demand for that purpose, it is axiomatically a poor investment as RJ has stated. The supply/demand characterists for the use of gold as a commodity is also the reason in my view that gold has never responded well in price rising from jewelery demand, as evidenced by the present price. Gold's price is more responsive to its value as money, as discussed below. Indeed, if gold's price were predicated on jewelery demand, it would not serve well as an economic indicator, which is still being relied on today by some economists. This is why I believe those who rely on present jewelery demand as "the" reason for gold to rise are wide of the mark, and because they cannot otherwise explain the failure of gold to rise because of such usage, look for bank conspiracies, government intervention, producer hedging, gold carry trade and other such illusory scapegoats for the failure.

But imporantly, gold is just not a commodity, it is also money. Gold is money not because of government edict, but because it has been universally accepted as such due to its singular unique suitability as a medium of exchange. No other commodity, or arguably "money", comes close to equaling its cumulative desirable characteristics of ease of transport, divisibility, esthetic appeal, indestructibility, global distribution, value retention, multiple of existing stock to new supply, and excellent marginal utility. It is for this reason that gold is still highly prized and almost all gold that has been mined has been retained. Rather than being a barbaric relic of the past, evidence, such as the LBMA turnover and its continued use as a reserve base, suggests that gold does and will continue to serve its role as money for the foreseeable future.

And it is in this more important capacity as money that gold will be sought after or abandoned ( including being added to or subtracted from reserves ) in consideration of actual or perceived economic and political conditions and gold's relative value to other monetary alternatives. And as gold is sought or abandoned, its relative value as money will rise and fall accordingly. And how one perceives the direction of gold value in such a monetary capacity should be the main determinate for one's investment in gold.

RJ, you are undoubtedly a genius. However, gold does have an intrinsic value. I quote from "Gem Elixirs and Vibrational Healing, Vol. I" by Gurudas:

"Heindel said gold symbolizes the universal spirit in its perfect purity. Thus it purifies the dense physical body. Bailey said gold symbolizes our desires in various fields. Cayce said gold rebuilds the nervous system and is good for multiple sclerosis. Steiner said all gold was once part of the sun ether. Gold is extensively used in anthroposophical medicine. It improves circulation and breathing and increases our warmth.... With gold a sense of responsibility and a conscience may develop. There may be a need for gold where there is ego conflict, frustration in life, and one may be overburdened with responsibility. This is also good for the depressed person with much self-reproach and thoughts of suicide. It may also be good for the manic person with megalomaniac tendencies as well as excitation or rage."

What further proof could you want?

RJ, you are undoubtedly a genius. However, gold does have an intrinsic value. I quote from "Gem Elixirs and Vibrational Healing, Vol. I" by Gurudas:

"Heindel said gold symbolizes the universal spirit in its perfect purity. Thus it purifies the dense physical body. Bailey said gold symbolizes our desires in various fields. Cayce said gold rebuilds the nervous system and is good for multiple sclerosis. Steiner said all gold was once part of the sun ether. Gold is extensively used in anthroposophical medicine. It improves circulation and breathing and increases our warmth.... With gold a sense of responsibility and a conscience may develop. There may be a need for gold where there is ego conflict, frustration in life, and one may be overburdened with responsibility. This is also good for the depressed person with much self-reproach and thoughts of suicide. It may also be good for the manic person with megalomaniac tendencies as well as excitation or rage."

What further proof could you want?

Man, did the gold traders take a day off today or
what?

Man, did the gold traders take a day off today or
what?

Vieserre, RJ, PB et al: Gold has worked down from Alexanders time... When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory. - Bernard Baruch, a 1929 and aftermath winner

Vieserre, RJ, PB et al: Gold has worked down from Alexanders time... When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory. - Bernard Baruch, a 1929 and aftermath winner

Artic Spirit: How about considering a Bre-X commemorative
coins struck in silver, gold, bronze and pressed wood.
The numbers bought in each of the materials may give an
idea of the Public's sentiment toward precious metals,
mining companies.
A Bre-X salt shaker with the caps of various metals may
also sell well.

Artic Spirit: How about considering a Bre-X commemorative
coins struck in silver, gold, bronze and pressed wood.
The numbers bought in each of the materials may give an
idea of the Public's sentiment toward precious metals,
mining companies.
A Bre-X salt shaker with the caps of various metals may
also sell well.

Re: PBR - As a matter of fact, YES. I was in copper for most of the day. Copper seems to be breaking out to the up side. I did very well today.

Panda, thanks for the post. That was pretty brutal today. Never have I thought I was doing so well and have been getting hurt so badly. Is it normal to have a mutual type spread ( bid and ask ) on all the commodities or is it just a platinum thing? Maybe there isn't that much of a spread on the other commodities.

Panda, thanks for the post. That was pretty brutal today. Never have I thought I was doing so well and have been getting hurt so badly. Is it normal to have a mutual type spread ( bid and ask ) on all the commodities or is it just a platinum thing? Maybe there isn't that much of a spread on the other commodities.

Re: PBR - As a matter of fact, YES. I was in copper for most of the day. Copper seems to be breaking out to the up side. I did very well today.

RJ's challenging essay is just what we gold lemmings need to keep us from going over the edge of our hopes and commitment to gold.Permit me to add some thoughts.
Let's call paper money by it's real handle,CREDIT. As I undeerstand it Money ( which facilitates an otherwise unwieldy barter system ) to fulfill it's role as a medium of exchange and value standard must have some LASTING intrinsic value..a criteria Gold has successfully met for centuries.And the paper issued in it's name brought confidence and DISCIPLINE to the financial system.With the advent of Lord Keynes Deficit spending idea and the severing of the gold standard which followed,that discipline ( if not confidence ) soon began to evaporate in the wake of irresponsible management,Greed, and the usual other human failings.So what started out as a good idea to help solve the problems of the time has now become a bigger problem with the cost of serving mountains of debt ( both public and private ) eating away at the system which immutable laws suggest must eventually crack. The point is that we don't deal in MONEY any more but CREDIT. Money implies value and discipline...Credit has brought abuse, financial game-playing, greed and COMPLACENCY...a malaisive mixture which appears to be spreading to all facets of society. Worse, we have all become slaves to this evil Genie EASY CREDIT..willing or not. And THEY won't fix the system till it breaks...and that it seems will be in the not too distant future. But fix it they will when the time comes and it will have to be done quickly! With a return to value and discipline..a financial system's mainstays. The question is will GOLD have a role?

RJ's challenging essay is just what we gold lemmings need to keep us from going over the edge of our hopes and commitment to gold.Permit me to add some thoughts.
Let's call paper money by it's real handle,CREDIT. As I undeerstand it Money ( which facilitates an otherwise unwieldy barter system ) to fulfill it's role as a medium of exchange and value standard must have some LASTING intrinsic value..a criteria Gold has successfully met for centuries.And the paper issued in it's name brought confidence and DISCIPLINE to the financial system.With the advent of Lord Keynes Deficit spending idea and the severing of the gold standard which followed,that discipline ( if not confidence ) soon began to evaporate in the wake of irresponsible management,Greed, and the usual other human failings.So what started out as a good idea to help solve the problems of the time has now become a bigger problem with the cost of serving mountains of debt ( both public and private ) eating away at the system which immutable laws suggest must eventually crack. The point is that we don't deal in MONEY any more but CREDIT. Money implies value and discipline...Credit has brought abuse, financial game-playing, greed and COMPLACENCY...a malaisive mixture which appears to be spreading to all facets of society. Worse, we have all become slaves to this evil Genie EASY CREDIT..willing or not. And THEY won't fix the system till it breaks...and that it seems will be in the not too distant future. But fix it they will when the time comes and it will have to be done quickly! With a return to value and discipline..a financial system's mainstays. The question is will GOLD have a role?

Pedro: Well thought out piece of work. If they let gold
seek its own level as a commodity, that only their lip
service indicates and ban currency derivatives, the pain
caused by a major credit problem would probably be
bearable.
Such an approach may allow for gold backed currencies in
final case. This would be better than having to protect
ourselves with deadly weapons, or worst, living under
some despotic government.

Pedro: Well thought out piece of work. If they let gold
seek its own level as a commodity, that only their lip
service indicates and ban currency derivatives, the pain
caused by a major credit problem would probably be
bearable.
Such an approach may allow for gold backed currencies in
final case. This would be better than having to protect
ourselves with deadly weapons, or worst, living under
some despotic government.

Fundy @12:17: Equally important as the govt controlled price of gold during the period in question, is its effect on general prices. Following the post civil war inflation, the US experienced an unprecendented period of price stability. This period of price stability ended with the advent of central banking. In fact, during the last decades of the 19th century, prices even declined.

Getting down to basic cases, we goldbugs hope to get rich somehow, when all we will be doing, if successful, is to counteract the pernicious effects of government. ..... and taking a helluva beating for our trouble.

Fundy @12:17: Equally important as the govt controlled price of gold during the period in question, is its effect on general prices. Following the post civil war inflation, the US experienced an unprecendented period of price stability. This period of price stability ended with the advent of central banking. In fact, during the last decades of the 19th century, prices even declined.

Getting down to basic cases, we goldbugs hope to get rich somehow, when all we will be doing, if successful, is to counteract the pernicious effects of government. ..... and taking a helluva beating for our trouble.

Tort, Pd and Pt are thinly traded markets that are likely very difficult for individual investors to participate in. If you're infected with the metal madness so prevalent here at KITCO, consider stocks. It may be that "buy the dips" will begin to work for metals. If you're a long term investor, accumulating stocks of companies with good reserves makes sense. Pd and Pt are not well represented in the stock market--Stillwater is probably the only serious one. I'm interested in Phoenix Gold as a result of a recent post here by RSA. It seems likely that Pd and Pt will do well in the next few years,but if you want excitement, go to Las Vegas. If you want to make money, buy the DOW or sell gold calls. That's where the serious money has been made up until now. BTW enough DB jokes already. You're setting a bad example for the kids here.

Tort, Pd and Pt are thinly traded markets that are likely very difficult for individual investors to participate in. If you're infected with the metal madness so prevalent here at KITCO, consider stocks. It may be that "buy the dips" will begin to work for metals. If you're a long term investor, accumulating stocks of companies with good reserves makes sense. Pd and Pt are not well represented in the stock market--Stillwater is probably the only serious one. I'm interested in Phoenix Gold as a result of a recent post here by RSA. It seems likely that Pd and Pt will do well in the next few years,but if you want excitement, go to Las Vegas. If you want to make money, buy the DOW or sell gold calls. That's where the serious money has been made up until now. BTW enough DB jokes already. You're setting a bad example for the kids here.

GFD @14:26: Good stuff! ..... We really have reached the point of cyber gold. ..... I wonder if cyber PL/PA will produce an equally fine catalytic device. And the roommate will certainly look elegant in a cyber gold bracelet. ...... How 'bout that bw? The perfect inducement for your wife.

GFD @14:26: Good stuff! ..... We really have reached the point of cyber gold. ..... I wonder if cyber PL/PA will produce an equally fine catalytic device. And the roommate will certainly look elegant in a cyber gold bracelet. ...... How 'bout that bw? The perfect inducement for your wife.

Blonde:

I would advise extreme caution with respect to any recomendations by RSA. The person behind this letter has in the past recommended stocks which in my opinion were pure hype plays. I know absolutely zero about the company that is being recommended and do not mean to cast aspersions upon them. For all I know they may be the best thing since sliced bread. If you are going to take a position in the company do your homework well and see if RSA has been paid for promotion either in cash, stock or options.

If you are looking for investment ideas in the PGM's besides Stillwater, there is North American Palladium, a small Canadian Pa producer. Some of the South African co's ( Rustplats, Impala ) also have PGM exposure. John Disney probably can get you started in the regard as he follows the SA mining industry.

Best of Luck.
D.A.

Blonde:

I would advise extreme caution with respect to any recomendations by RSA. The person behind this letter has in the past recommended stocks which in my opinion were pure hype plays. I know absolutely zero about the company that is being recommended and do not mean to cast aspersions upon them. For all I know they may be the best thing since sliced bread. If you are going to take a position in the company do your homework well and see if RSA has been paid for promotion either in cash, stock or options.

If you are looking for investment ideas in the PGM's besides Stillwater, there is North American Palladium, a small Canadian Pa producer. Some of the South African co's ( Rustplats, Impala ) also have PGM exposure. John Disney probably can get you started in the regard as he follows the SA mining industry.

Best of Luck.
D.A.

Jack: Bre-x salt shaker???? What a hoot! Great idea.

Jack: Bre-x salt shaker???? What a hoot! Great idea.

Did anyone notice that DKT traded over 200k shares today. By comparison, ABX traded only ~300K shares. .... Is that flea bitten mutt, DKT, rising for real or only looking for a suitable place to expire?

Did anyone notice that DKT traded over 200k shares today. By comparison, ABX traded only ~300K shares. .... Is that flea bitten mutt, DKT, rising for real or only looking for a suitable place to expire?

Glenn @16:37 - Since you are now our BMOC on the floor, please don't forget to let us know when the big day comes when you decide to cover your Gold short position!

Glenn @16:37 - Since you are now our BMOC on the floor, please don't forget to let us know when the big day comes when you decide to cover your Gold short position!

Vieserre: If you are right in your 15:25 post that for gold to move it must be seen to be a superior monetary investment then expect flat to down gold for an extended period. The CB's have been very active in ensuring that gold looks unattractive in that respect.

Vieserre: If you are right in your 15:25 post that for gold to move it must be seen to be a superior monetary investment then expect flat to down gold for an extended period. The CB's have been very active in ensuring that gold looks unattractive in that respect.

Hey Glenn - what are the limitations ( if any ) imposed by the exchange on a local moving from one pit to another ( like on a slooooow day such as today ) ?

Hey Glenn - what are the limitations ( if any ) imposed by the exchange on a local moving from one pit to another ( like on a slooooow day such as today ) ?

Fundy @ 13:30 - The 'hepcat' as you call him, managed to almost destroy the chat here at Kitco for a two week period near last Christmas by insulting everybody in sight and using about 15 different handles to do so; eventually Bart and others were debating how to end the insanity by instituting Handle change mechanisms etc. ( all because of one disturbed individual ) . He calmed down for a while but came back in full dementia on kitco 2. Since I was one of his prime targets, ( and sick of his nonsense from previous ) , I tried to tell him to grow up, along with similar comments from others. He has seemed to calm down in the last few days and I hope he stays that way. I did not even want to mention the idiocy any more as he seemed to stop in last few days but your question begged to be answered.

Fundy @ 13:30 - The 'hepcat' as you call him, managed to almost destroy the chat here at Kitco for a two week period near last Christmas by insulting everybody in sight and using about 15 different handles to do so; eventually Bart and others were debating how to end the insanity by instituting Handle change mechanisms etc. ( all because of one disturbed individual ) . He calmed down for a while but came back in full dementia on kitco 2. Since I was one of his prime targets, ( and sick of his nonsense from previous ) , I tried to tell him to grow up, along with similar comments from others. He has seemed to calm down in the last few days and I hope he stays that way. I did not even want to mention the idiocy any more as he seemed to stop in last few days but your question begged to be answered.

Tortfeasor -- Platinum and palladium are very thin markets compared to most other commodities. When things get 'tense', Bid/Ask tends to get very wide because the people who 'want' the stuff, REALLY want it [look at stocks! :- ) ]. Also, transactions tend to be few because the 'stuff' is unavailable. Thus, rationing by price takes place, and, the brokers, making money on the spread with fewer transactions to be had..... The stuff of thin markets.

Tortfeasor -- Platinum and palladium are very thin markets compared to most other commodities. When things get 'tense', Bid/Ask tends to get very wide because the people who 'want' the stuff, REALLY want it [look at stocks! :- ) ]. Also, transactions tend to be few because the 'stuff' is unavailable. Thus, rationing by price takes place, and, the brokers, making money on the spread with fewer transactions to be had..... The stuff of thin markets.

The quiet firmness and basing action in the metals is constructive. I am encouraged by failure to break this week even with Friday's weak and thus, normally ominous close. This is a distinct variation from the norm. Failures on fridays are almost always followed by severe pressure through tuesday. That this has not occured, even with weakening platinum, is probably the best signal in a long time.

Further, I sense a belief among the kitcoists to look at and appreciate the gold bear argument ala RJ and the Bear. This is truly a sign of crumbling sentiment.

In April, 1996, in Barron's "Commodities Corner" Jeff Christian of CPM predicted 8-10 silver by Fall of 1997 based on supply demand. We will see. Though interestingly enough the silver calls are holding up well given the market's current lackluster performance. Could be shorts buying back the calls in anticipation of a rally. FYI The calls holding up well vis a vis market action has been accurate in the past.

The quiet firmness and basing action in the metals is constructive. I am encouraged by failure to break this week even with Friday's weak and thus, normally ominous close. This is a distinct variation from the norm. Failures on fridays are almost always followed by severe pressure through tuesday. That this has not occured, even with weakening platinum, is probably the best signal in a long time.

Further, I sense a belief among the kitcoists to look at and appreciate the gold bear argument ala RJ and the Bear. This is truly a sign of crumbling sentiment.

In April, 1996, in Barron's "Commodities Corner" Jeff Christian of CPM predicted 8-10 silver by Fall of 1997 based on supply demand. We will see. Though interestingly enough the silver calls are holding up well given the market's current lackluster performance. Could be shorts buying back the calls in anticipation of a rally. FYI The calls holding up well vis a vis market action has been accurate in the past.

To: eirc - I can trade Gold, Silver and Copper. If I trade any other market I have to hand my order to another broker.

S&P cash - Today may have been a wave 3 top in SPC. Assumming 1982 started off this Bull market at 88 ( this is an approximation, I don't have the actual low but it's close ) wave I ended in 1987 at 337.90, wave II ended at 216.50 in Oct 1987. Wave III is extended. A common relationship of wave III to wave I when Wave III is extended is I x 2.618 added to the wave II low. That projects a high of 870.70 todays high was 870.05. I bought S&P puts today looking for a wave IV correction to begin.

S&P cash - Today may have been a wave 3 top in SPC. Assumming 1982 started off this Bull market at 88 ( this is an approximation, I don't have the actual low but it's close ) wave I ended in 1987 at 337.90, wave II ended at 216.50 in Oct 1987. Wave III is extended. A common relationship of wave III to wave I when Wave III is extended is I x 2.618 added to the wave II low. That projects a high of 870.70 todays high was 870.05. I bought S&P puts today looking for a wave IV correction to begin.

To: eirc - I can trade Gold, Silver and Copper. If I trade any other market I have to hand my order to another broker.

Mooney: I suppose you think returning the roto-tiller, stopping in at the Casino and planting more of the crops is not work....I am beat and really need a vacation from this rat-race as you can only do so much...and by the way Mooney, the Hamilton Bulldogs made a third period comeback against the Hershey Bears last night to pull out a thrilling 2-1 victory and now trail Hershey 2-1 in games but the next game is in Hamilton...This is for the CALDER CUP ...Mooney!

Ww - Re: Call prices - Call prices have NOTHING to do with whether traders are bullish or bearish. They have everything to do with: The price of the underling contract ( In this case the price of silver ) , the current volitility levels ( Which affects call and put prices equally ) , and the amount of time until expiration. Stock options also take into account interest rates and dividend payments. For the record I should also mention that option prices can be different if you have an american style option or an european option. An american style option can be exerciased at any time before expiration and an european option can only be exercised on the day of expiration. All options traded in the US that I know of are American style.

Ww - Re: Call prices - Call prices have NOTHING to do with whether traders are bullish or bearish. They have everything to do with: The price of the underling contract ( In this case the price of silver ) , the current volitility levels ( Which affects call and put prices equally ) , and the amount of time until expiration. Stock options also take into account interest rates and dividend payments. For the record I should also mention that option prices can be different if you have an american style option or an european option. An american style option can be exerciased at any time before expiration and an european option can only be exercised on the day of expiration. All options traded in the US that I know of are American style.

Mooney: I suppose you think returning the roto-tiller, stopping in at the Casino and planting more of the crops is not work....I am beat and really need a vacation from this rat-race as you can only do so much...and by the way Mooney, the Hamilton Bulldogs made a third period comeback against the Hershey Bears last night to pull out a thrilling 2-1 victory and now trail Hershey 2-1 in games but the next game is in Hamilton...This is for the CALDER CUP ...Mooney!

APH: How do you see wave 4 in terms of time and price. Even more important, how do you view the final leg up to the mother of all tops? Feel comfortable projecting time and price to the top?

APH: How do you see wave 4 in terms of time and price. Even more important, how do you view the final leg up to the mother of all tops? Feel comfortable projecting time and price to the top?

Globally acclaimed Analyst sees Gold skyrocketing when leveraged players are forced to buy back their forward sales. Margin calls will cause price to feed on itself higher. See Editorials:
http://www.gold-eagle.com/editorials.html

Globally acclaimed Analyst sees Gold skyrocketing when leveraged players are forced to buy back their forward sales. Margin calls will cause price to feed on itself higher. See Editorials:
http://www.gold-eagle.com/editorials.html

EBN Gold down .45 and Silver down 1 cent...Front:Ya got yer answer in the mail box...Novice: Great e-mail and thanks...am tired from doin nothin today and will be back at ya tomorrow Maritimer....Mooney: Get to work!

EBN Gold down .45 and Silver down 1 cent...Front:Ya got yer answer in the mail box...Novice: Great e-mail and thanks...am tired from doin nothin today and will be back at ya tomorrow Maritimer....Mooney: Get to work!

Eldont: Why don't you cut back on the toilet paper and buy some IBM!HI to the Duke of Earl!hahaha

Eldont: Why don't you cut back on the toilet paper and buy some IBM!HI to the Duke of Earl!hahaha

WW: Good comment @ 8:00 a.m.

Eldont: What in the world are you talking about??? IMHO this is crazy!

Eldont: What in the world are you talking about??? IMHO this is crazy!

WW: Good comment @ 8:00 a.m.

Aurator: You ask: Why no dry powder? I recommended 60% silver, 36% gold, and 4% S&P puts. That IS 96% dry powder!! Gold and silver are the ultimate liquidity -- cold, hard cash. In the old days, investors went to goldsmiths, banks, etc. to convert their paper to gold -- that was an act of getting liquid. Today, in the era of fiat currencies, the act of moving from paper to precious metals is the same process of getting liquid. I'm recommending investors get highly liquid. That's why I recommend 96% of invesment funds be held in gold and silver coins.

Aurator: You ask: Why no dry powder? I recommended 60% silver, 36% gold, and 4% S&P puts. That IS 96% dry powder!! Gold and silver are the ultimate liquidity -- cold, hard cash. In the old days, investors went to goldsmiths, banks, etc. to convert their paper to gold -- that was an act of getting liquid. Today, in the era of fiat currencies, the act of moving from paper to precious metals is the same process of getting liquid. I'm recommending investors get highly liquid. That's why I recommend 96% of invesment funds be held in gold and silver coins.

Vieserre: WELCOME BACK!....again...

Vieserre: WELCOME BACK!....again...

Steve Puetz - Along with gold and silver coin. What else should
we stock up on for the coming crash?

What will happen to real estate prices durng this period?

Steve Puetz - Along with gold and silver coin. What else should
we stock up on for the coming crash?

What will happen to real estate prices durng this period?

Glenn:

Volatility need not effect puts and calls symetrically. There are always volatility skews across the spectrum of strikes. If you look at silver for instance you will find that the far out of the money calls have a higher implied vol than the equidistant out of the money puts. I have looked to see if volatility skews can be used to predict action in the underlying but so far have not found anything too exciting.

Glenn:

Volatility need not effect puts and calls symetrically. There are always volatility skews across the spectrum of strikes. If you look at silver for instance you will find that the far out of the money calls have a higher implied vol than the equidistant out of the money puts. I have looked to see if volatility skews can be used to predict action in the underlying but so far have not found anything too exciting.

RJ: You seemed to have caused a stir. I agree, logic and reason are the only tools available to improve one's condition. However, you then imply that investors heavily into gold are paronoid. You use what Ayn Rand called the "Argument from Intimidation". Read chapter 19 of "The Virtue of Selfiness" by Ayn Rand. Rand states,"There is a certain type of argument which, in fact, is not an argument at all, but a means of forestalling debate and extorting an opponent's agreement with one's undiscussed notions. It is a method od bypassing logic by means of psychological pressure..." She goes on to state that people who use name-calling in an arguement usually do so because they are losing the arguement. They resort to name-calling in a last-ditch attempt to psycholigically break their opponent. I have learned to recognize this technique, and don't fall for it.

The true point of the debate in paper is TRUST. You may have faith and trust in paper, but I don't. My question to you is: Why do you trust paper so much? The history of monetary-receipts, credit-paper, and fiat currency is one of flaggart broken promises. This is where the debate must be centered. I for one recommend investors get liquid. Get virtually all of your assets into gold and silver coins.

RJ: You seemed to have caused a stir. I agree, logic and reason are the only tools available to improve one's condition. However, you then imply that investors heavily into gold are paronoid. You use what Ayn Rand called the "Argument from Intimidation". Read chapter 19 of "The Virtue of Selfiness" by Ayn Rand. Rand states,"There is a certain type of argument which, in fact, is not an argument at all, but a means of forestalling debate and extorting an opponent's agreement with one's undiscussed notions. It is a method od bypassing logic by means of psychological pressure..." She goes on to state that people who use name-calling in an arguement usually do so because they are losing the arguement. They resort to name-calling in a last-ditch attempt to psycholigically break their opponent. I have learned to recognize this technique, and don't fall for it.

The true point of the debate in paper is TRUST. You may have faith and trust in paper, but I don't. My question to you is: Why do you trust paper so much? The history of monetary-receipts, credit-paper, and fiat currency is one of flaggart broken promises. This is where the debate must be centered. I for one recommend investors get liquid. Get virtually all of your assets into gold and silver coins.

Earle re: 17:36. I think you have summed it up. In the end it will be a precious few who beat the system.

Earle re: 17:36. I think you have summed it up. In the end it will be a precious few who beat the system.

I love the comment about not being short platinum. :- ) )

http://biz.yahoo.com/finance/97/06/10/y0023_6.html

I love the comment about not being short platinum. :- ) )

http://biz.yahoo.com/finance/97/06/10/y0023_6.html

Vieserre: Good comment @ 15:23

Pedro: Excellent prose @ 16:57

Vieserre: Good comment @ 15:23

Pedro: Excellent prose @ 16:57

Panda: Liked the quote. "It is dangerous to be
short the PGM's without the metal". A lesson the
gold market may learn as well.

Panda: Liked the quote. "It is dangerous to be
short the PGM's without the metal". A lesson the
gold market may learn as well.

Kid Silver: Real Estate is leveraged -- just like financial assets. Residential mortgage debt is at a record high of 40% of the market-value of all homes in the U.S. That's nearly 3 times as high as 1929.

Kid Silver: Real Estate is leveraged -- just like financial assets. Residential mortgage debt is at a record high of 40% of the market-value of all homes in the U.S. That's nearly 3 times as high as 1929.

Earl - This is pure guess work at this time, but here goes. If 870.05 turns out to be the Wave III top, Wave IV would have a target of 480 near the end of 1998 or early 1999. This would be a 50% correction of the entire move and put it in contact with the upward 2x1 Gann line from the 1982 low on a monthly cash chart. This same line held the 1987 and 1991 corrections. Late 1998 would coincide with the very realible 4 year cycle lows in the stock market. Of course the correction won't go straight down but will be filled with powerful rallies. If Wave IV ends at 480 Wave V will have a wide target range between 970 and 1250. A 1250 S&P would equal a Dow of 11,000.

Earl - This is pure guess work at this time, but here goes. If 870.05 turns out to be the Wave III top, Wave IV would have a target of 480 near the end of 1998 or early 1999. This would be a 50% correction of the entire move and put it in contact with the upward 2x1 Gann line from the 1982 low on a monthly cash chart. This same line held the 1987 and 1991 corrections. Late 1998 would coincide with the very realible 4 year cycle lows in the stock market. Of course the correction won't go straight down but will be filled with powerful rallies. If Wave IV ends at 480 Wave V will have a wide target range between 970 and 1250. A 1250 S&P would equal a Dow of 11,000.

Steve Puetz -- I read a story on Yahoo! today on the INCREASING bankruptcy rate. If you think 1996 was high, 1997 should top it easily. The average chapter 7 filer earned $20,000/year and carried $17,000 debit on their credit card when filing for bankruptcy. What's wrong with this picture? Who was dumber, debtor or lender? After some cogitating, perhaps the question should be, "Who is smarter?" :- ) )

Steve Puetz -- I read a story on Yahoo! today on the INCREASING bankruptcy rate. If you think 1996 was high, 1997 should top it easily. The average chapter 7 filer earned $20,000/year and carried $17,000 debit on their credit card when filing for bankruptcy. What's wrong with this picture? Who was dumber, debtor or lender? After some cogitating, perhaps the question should be, "Who is smarter?" :- ) )

APH -- The Dow is going to infinity, I know. My Index fund investing co-workers tell me this all the time, and they know! :- ) )

APH -- The Dow is going to infinity, I know. My Index fund investing co-workers tell me this all the time, and they know! :- ) )

New Fifty Dollar bills to be unveiled AG and RR on Thursday. :- )

New Fifty Dollar bills to be unveiled AG and RR on Thursday. :- )

Hmmm, I think I'll buy some Japanese Yen with my new fifties.. :- ) )

Hmmm, I think I'll buy some Japanese Yen with my new fifties.. :- ) )

PB & THE REST - I had no idea! I think I may finally be seeing the light about gold....... Sun ether you say?? Most enjoyable of all is that apparently some have not lost their sense of humor. For those that have taken offense at my occasional sardonic tone, please remember, the sport is in the debate. I do have a nasty habit of indulging in a bit of poking and prodding to provoke response, but I dont take myself as seriously as some others do. It also seems that some read my words though the tint of their own belief systems. My words mean what they say. There have been responses that speak of my implications. I think you all will agree that I tend not to imply when I can just as easily be bold and direct. All said and done, can we share opinions and still have fun?

PB & THE REST - I had no idea! I think I may finally be seeing the light about gold....... Sun ether you say?? Most enjoyable of all is that apparently some have not lost their sense of humor. For those that have taken offense at my occasional sardonic tone, please remember, the sport is in the debate. I do have a nasty habit of indulging in a bit of poking and prodding to provoke response, but I dont take myself as seriously as some others do. It also seems that some read my words though the tint of their own belief systems. My words mean what they say. There have been responses that speak of my implications. I think you all will agree that I tend not to imply when I can just as easily be bold and direct. All said and done, can we share opinions and still have fun?

Ted: Thanks GOOD TO SEE YOUR POSTS

Ted: Thanks GOOD TO SEE YOUR POSTS

Steve: Glad to see you have joined the forum. Your erudite posts are intellectually stiumulating and educationally beneficial. I look forward to discourse with you on them from time to time.

Steve: Glad to see you have joined the forum. Your erudite posts are intellectually stiumulating and educationally beneficial. I look forward to discourse with you on them from time to time.

APH: If you're referring to gold's 1979/80 prior peak, that was the end of Wave 1 of a 5 wave monster bull begun in 1934. Gold is in a 150 or more year bull market. The action since '80 has been wave 2, and is a correction. March '85 saw the bottom at 285, and unless gold breaks that low, we are basing for the next leg up. That will begin at the end of '97/turn of '98. In the next century, gold will be in the thousands of dollars per ounce.

APH: If you're referring to gold's 1979/80 prior peak, that was the end of Wave 1 of a 5 wave monster bull begun in 1934. Gold is in a 150 or more year bull market. The action since '80 has been wave 2, and is a correction. March '85 saw the bottom at 285, and unless gold breaks that low, we are basing for the next leg up. That will begin at the end of '97/turn of '98. In the next century, gold will be in the thousands of dollars per ounce.

PB: Were you quoting ( or should I say paraphrasing ) Alice Bailey? AWWRRIIIIGGHHHTTT! You speak my language, sir ( or Madam, as the case may be ) . RJ: Sharing opinions is exactly HOW we have fun! Gracias.

PB: Were you quoting ( or should I say paraphrasing ) Alice Bailey? AWWRRIIIIGGHHHTTT! You speak my language, sir ( or Madam, as the case may be ) . RJ: Sharing opinions is exactly HOW we have fun! Gracias.

Dropping again http://www.abn.com.sg/feeds/currency.html

Dropping again http://www.abn.com.sg/feeds/currency.html

Mark Sheller - We were talking about cash S&P.

Mark Sheller - We were talking about cash S&P.

For those that have misunderstood or misapplied my use of "trust" and "paranoia", These were used in direct response to:

Date: Tue Jun 10 1997 01:43
Eldorado ( @the scene ) :
.....Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

Does anyone else smell a bit of paranoia here? Besides I thought the procreating line was kinda funny myself. Slick - didnt mean to offend.

Eldorado - they really are watching you........

For those that have misunderstood or misapplied my use of "trust" and "paranoia", These were used in direct response to:

Date: Tue Jun 10 1997 01:43
Eldorado ( @the scene ) :
.....Also, I find the 'pro-creating with your own cousin' mentality type of comment to be more of a 'governmental' type of response than a 'real' trader! Pardon ME if I DON'T TRUST YOU!!!!!

Does anyone else smell a bit of paranoia here? Besides I thought the procreating line was kinda funny myself. Slick - didnt mean to offend.

Eldorado - they really are watching you........

Panda: Great comment @ 21:40. I had to laugh. But,I really do think it's the debtors that are smarter. My daughter says her college-age friends know of lots of students who get as many credit cards as they can , max-out on them, knowing all along they will declare bankruptcy when they have no credit left.

Panda: Great comment @ 21:40. I had to laugh. But,I really do think it's the debtors that are smarter. My daughter says her college-age friends know of lots of students who get as many credit cards as they can , max-out on them, knowing all along they will declare bankruptcy when they have no credit left.

NJ: Ebn site also show $$ getting pounded ( or should I say yen-ded ) .

NJ: Ebn site also show $$ getting pounded ( or should I say yen-ded ) .

RJ: No need to explain any more. I misunderstood what you were referring to when you were talking about trust. I assumed you were talking about TRUST you had in financial-paper. It appears you weren't.

I would like to see a real debate about this whole
gold question. Perhaps Ted Butler and RJ could have
an exchange of views either here or some other forum
such as at Vronsky's site. I think it would be
interesting and educational.

I would like to see a real debate about this whole
gold question. Perhaps Ted Butler and RJ could have
an exchange of views either here or some other forum
such as at Vronsky's site. I think it would be
interesting and educational.

RJ: No need to explain any more. I misunderstood what you were referring to when you were talking about trust. I assumed you were talking about TRUST you had in financial-paper. It appears you weren't.

Spud Master - thanks for your provocation. Apparantly Nymex does not give out numbers for warehouse stocks for platinum or palladium. At least I could not find them.

Comex eligible gold stocks were unchanged today at 277,416 oz. against a total of 160,319 contracts as of yesterday, leaving a very comfortable ratio of 1.73 oz available against each 100 oz contract. Seems like everyone seems comfortable here, Comex volume is so low that our good friend Glenn is pitching copper pennies to keep awake!! BUT JUST REMEMBER THAT EACH DAY OF SUCH BOREDOM, MORE THAN 100,000 OUNCES OF GOLD IS PURCHASED THAN IS PRODUCED FROM GOLD MINES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Spud Master - thanks for your provocation. Apparantly Nymex does not give out numbers for warehouse stocks for platinum or palladium. At least I could not find them.

Comex eligible gold stocks were unchanged today at 277,416 oz. against a total of 160,319 contracts as of yesterday, leaving a very comfortable ratio of 1.73 oz available against each 100 oz contract. Seems like everyone seems comfortable here, Comex volume is so low that our good friend Glenn is pitching copper pennies to keep awake!! BUT JUST REMEMBER THAT EACH DAY OF SUCH BOREDOM, MORE THAN 100,000 OUNCES OF GOLD IS PURCHASED THAN IS PRODUCED FROM GOLD MINES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

EBN Gold down .55 and Silver down 1 cent despite Dollar/Yen @ 111.14 down 1.23 ( 1.09% ) tonight...

EBN Gold down .55 and Silver down 1 cent despite Dollar/Yen @ 111.14 down 1.23 ( 1.09% ) tonight...

NJ: Yes, the Dollar is breaking into new low territory against the Yen tonight -- new lows for the past few months, that is. The rumor is that all the banks and hedge-funds that have borrowed Yen to buy US Treasury Bonds ( the Yen carry-trade ) , are starting to lose on the currency exchange rate of the Yen. To liquidate, they must sell US Bonds to pay of the Yen-loan. Watch out for the Dollar, watch out below on Bonds as more of these banks and hedge-funds get into trouble. Hundreds of billions of Dollars are reported to be in the carry-trade. Smaller amounts of the trade are versus the Swiss Franc.

When I said "real debate", I meant a formal,
structured debate. I did not intend to imply that
we don't have good debates here.

When I said "real debate", I meant a formal,
structured debate. I did not intend to imply that
we don't have good debates here.

NJ: Yes, the Dollar is breaking into new low territory against the Yen tonight -- new lows for the past few months, that is. The rumor is that all the banks and hedge-funds that have borrowed Yen to buy US Treasury Bonds ( the Yen carry-trade ) , are starting to lose on the currency exchange rate of the Yen. To liquidate, they must sell US Bonds to pay of the Yen-loan. Watch out for the Dollar, watch out below on Bonds as more of these banks and hedge-funds get into trouble. Hundreds of billions of Dollars are reported to be in the carry-trade. Smaller amounts of the trade are versus the Swiss Franc.

Goodnight everyone....you too Tarnished!

Goodnight everyone....you too Tarnished!

That's it Steve! I'll max out all of my plastic, buy as much gold and platinum as I can on the cards, and then declare bankruptcy! Yes! The 'system' can be beaten! All that I have to do, is make sure that there is no reference to what I bought on the receipts. Yes, I have literally turned plastic in to gold! The old alchemists had it wrong! It's not lead, but plastic! How could they have known, there was no plastic back then. :- ) ) :- ) ) :- ) ) Maybe that's why they call them 'gold' cards, eh!

On that note, ( gave my great investment idea away! ) , I'll say goodnight before they come to take me away! BTW, Dollar sinking good tonight, 111.22 last I looked. AG, RR, hurry up with those new fangled fifties, I want to buy some Yen before it's too late! ;- ) )

That's it Steve! I'll max out all of my plastic, buy as much gold and platinum as I can on the cards, and then declare bankruptcy! Yes! The 'system' can be beaten! All that I have to do, is make sure that there is no reference to what I bought on the receipts. Yes, I have literally turned plastic in to gold! The old alchemists had it wrong! It's not lead, but plastic! How could they have known, there was no plastic back then. :- ) ) :- ) ) :- ) ) Maybe that's why they call them 'gold' cards, eh!

On that note, ( gave my great investment idea away! ) , I'll say goodnight before they come to take me away! BTW, Dollar sinking good tonight, 111.22 last I looked. AG, RR, hurry up with those new fangled fifties, I want to buy some Yen before it's too late! ;- ) )

APH: Since I'm not an ewaver, I guess I'm a little surprised by your numbers. SP @ 480 would seem imply a Dow at about 4200? Eh? .... 80% of all the mutual fund money ever, since beginning of time, is in the market above Dow 4500. That should serve some to pause and reflect. ....The final top around '03? If there is enough cash about, to start over from the 4000 area.

APH: Since I'm not an ewaver, I guess I'm a little surprised by your numbers. SP @ 480 would seem imply a Dow at about 4200? Eh? .... 80% of all the mutual fund money ever, since beginning of time, is in the market above Dow 4500. That should serve some to pause and reflect. ....The final top around '03? If there is enough cash about, to start over from the 4000 area.

JR no offense taken since, I expected such a response from you.

JR no offense taken since, I expected such a response from you.

APH: Sorry about that...didn't catch the thread.

APH: Sorry about that...didn't catch the thread.

Mike Sheller: Hey, Amigo. I don't know about you but I ain't got no 80 years left to hang around waitin' for that peak. Would it be too much trouble for you, to practice a little astrological legerdemain and revise ( as in speed up ) that forecast just a skoshi bit? .... I'm sure we'd all 'preciate it. ........ ( :- ) )

Mike Sheller: Hey, Amigo. I don't know about you but I ain't got no 80 years left to hang around waitin' for that peak. Would it be too much trouble for you, to practice a little astrological legerdemain and revise ( as in speed up ) that forecast just a skoshi bit? .... I'm sure we'd all 'preciate it. ........ ( :- ) )

Ted Butler's well-written article suggests that by leasing metal, a lessor is deceived or harmed, the practice is detrimental, and it is a primary cause for the sharp increase in the price of the PGMS. This view apprears to be universally accepted in this forum. However, I fail to see the logic. Therefore, I wish to state my reasons for your consideration in the hope that if I am wrong I may be enlightened by a corrective response.

THE LESSOR IS CERTINLY NOT DECEIVED: The Lessor, usually a dealer in the metals, should know market conditions and risks as well if not better than the Lessee. The lessor knows or should know that the lessee has obtained the lease for the purpose of selling the metal and investing the proceeds for a period of the lease. And, as the lease is a legal transfer of a property right subject to restrictive conditions, if the lessor does not want the lessee to sell the metal, he could be so specify in the Lease. Thus there is no deception and the lessor is in control of the consequences of the lease as well as the sale of the metal.

THE LESSOR BENEFITS BY THE LEASE AND HAS LIMITED RISK. The lessor enters into the lease presumably to gain income on a commodity held for investment or inventory. If the metal is not returned he has the choice of buying the metal himself or, if he prefers, obtaining equivalent damages, and charging the lessee for the cost plus the lease rate. His risk may be minimized by assuring that at the time the lease is entered into, the lessee has the financial wherewithal to pay damages if the metal is not returned. The above assumes that the lessor has not entered into a naked lease where he merely transfers a right under the lease rather than the metal itself. In such a case, when he leases out more metal than he has in possession, he acts as a speculator and assumes major risk as well as allegations of fraud.

THE LESSEE ASSUMES THE MAJOR RISK. He benefits if he can reinvest the proceeds of the sale of the leased metal at a higher rate of return than the lease rate, prior to the termination of the lease or any extension thereof. He assumes the risk of repurchase and any change in metal price between the buy and sell dates.

THE LEASE DOES NOT CHANGE NET SUPPLY/DEMAND RATIO FOR THE METAL. Since the lease is merely a transfer of possession, it is only when the metal is sold by the lessee that supply is affected but this does not in anyway affect net supply and demand as once the metal is sold there is an immediate offsetting latent demand for repurchase.

THE LEASE WILL AFFECT PRICE ONLY ON A TEMPORARY BASIS. If net supply and demand is not affected, then the only effect a lease has on the price of the metal is at the time the metal is offered for sale, which will temporarily increase supply and reduce demand, and subsequently when it is bid for repurchase by the lessee at the term of the lease, which will increase demand and reduce supply. Moreover, once a number of such lease arrangements have been in the marketplace for a period of time, the effect on price of any lease transactions will be dependent on whether the amount of such leases are increasing in number, thus adding to supply, or decreasing in number, thus increasing demand. But in a period allowed for any particular lease transaction ( s ) to net out, the should not materially affect price since they have not altered net supply or demand over this period.

THE LEASE PRACTICE IS NOT NECESSARILY DETRIMENTAL TO THE MARKET. The lease promotes investment in above ground inventory by a lessor dealer, which may act as a cushion for vagaries in producer supply and industry demand, by enabling the dealer to obtain income on the inventory. The advantages of having this inventory available is borne out by the current large demand for it in the marketplace.

THE PRIMARY REASON FOR THE INCREASE IN THE PRICE OF PLATINUM IS DUE TO SHORTAGE RESULTING FROM REDUCTION OF PRODUCER SUPPLY AND FUND HOARDING, NOT LEASE TRANSACTIONS. There is much made of the
repurchase of metal under the leases as being the cause for the sharp increase in price.
However, there is no assurance that the high lease rates currently in force are solely or
primarily due to settling out of prior leases. A fortiori, even if this is true, it is arguable
that any outstanding leases have helped reduce the price rather than adding to it since
theses leases have added to supply rather than withdrawing from it.

Ted Butler's well-written article suggests that by leasing metal, a lessor is deceived or harmed, the practice is detrimental, and it is a primary cause for the sharp increase in the price of the PGMS. This view apprears to be universally accepted in this forum. However, I fail to see the logic. Therefore, I wish to state my reasons for your consideration in the hope that if I am wrong I may be enlightened by a corrective response.

THE LESSOR IS CERTINLY NOT DECEIVED: The Lessor, usually a dealer in the metals, should know market conditions and risks as well if not better than the Lessee. The lessor knows or should know that the lessee has obtained the lease for the purpose of selling the metal and investing the proceeds for a period of the lease. And, as the lease is a legal transfer of a property right subject to restrictive conditions, if the lessor does not want the lessee to sell the metal, he could be so specify in the Lease. Thus there is no deception and the lessor is in control of the consequences of the lease as well as the sale of the metal.

THE LESSOR BENEFITS BY THE LEASE AND HAS LIMITED RISK. The lessor enters into the lease presumably to gain income on a commodity held for investment or inventory. If the metal is not returned he has the choice of buying the metal himself or, if he prefers, obtaining equivalent damages, and charging the lessee for the cost plus the lease rate. His risk may be minimized by assuring that at the time the lease is entered into, the lessee has the financial wherewithal to pay damages if the metal is not returned. The above assumes that the lessor has not entered into a naked lease where he merely transfers a right under the lease rather than the metal itself. In such a case, when he leases out more metal than he has in possession, he acts as a speculator and assumes major risk as well as allegations of fraud.

THE LESSEE ASSUMES THE MAJOR RISK. He benefits if he can reinvest the proceeds of the sale of the leased metal at a higher rate of return than the lease rate, prior to the termination of the lease or any extension thereof. He assumes the risk of repurchase and any change in metal price between the buy and sell dates.

THE LEASE DOES NOT CHANGE NET SUPPLY/DEMAND RATIO FOR THE METAL. Since the lease is merely a transfer of possession, it is only when the metal is sold by the lessee that supply is affected but this does not in anyway affect net supply and demand as once the metal is sold there is an immediate offsetting latent demand for repurchase.

THE LEASE WILL AFFECT PRICE ONLY ON A TEMPORARY BASIS. If net supply and demand is not affected, then the only effect a lease has on the price of the metal is at the time the metal is offered for sale, which will temporarily increase supply and reduce demand, and subsequently when it is bid for repurchase by the lessee at the term of the lease, which will increase demand and reduce supply. Moreover, once a number of such lease arrangements have been in the marketplace for a period of time, the effect on price of any lease transactions will be dependent on whether the amount of such leases are increasing in number, thus adding to supply, or decreasing in number, thus increasing demand. But in a period allowed for any particular lease transaction ( s ) to net out, the should not materially affect price since they have not altered net supply or demand over this period.

THE LEASE PRACTICE IS NOT NECESSARILY DETRIMENTAL TO THE MARKET. The lease promotes investment in above ground inventory by a lessor dealer, which may act as a cushion for vagaries in producer supply and industry demand, by enabling the dealer to obtain income on the inventory. The advantages of having this inventory available is borne out by the current large demand for it in the marketplace.

THE PRIMARY REASON FOR THE INCREASE IN THE PRICE OF PLATINUM IS DUE TO SHORTAGE RESULTING FROM REDUCTION OF PRODUCER SUPPLY AND FUND HOARDING, NOT LEASE TRANSACTIONS. There is much made of the
repurchase of metal under the leases as being the cause for the sharp increase in price.
However, there is no assurance that the high lease rates currently in force are solely or
primarily due to settling out of prior leases. A fortiori, even if this is true, it is arguable
that any outstanding leases have helped reduce the price rather than adding to it since
theses leases have added to supply rather than withdrawing from it.

RJ - your comments on gold have forced me to respond. As a geologist, let me assure you that gold is not easily attainable, nor found, nor evenly distribruted. You sound as if you are speaking for Alan G. and the Central Banks to convince us that gold has no value! I would like to point out two personal experiences from people who left different countries. I had friends who left both Viet Nam and Mozambique, both took only GOLD with them, as their 'store of value'. What you fail to factor into your thinking is that the world population is increasing much faster than the available gold supplies, thus on a personal basis each individual on this planet has less gold available to them. Is gold worth anything? Some people seem to think so. Inflation is a new idea? Would you like to buy some tulip bulbs?

RJ - your comments on gold have forced me to respond. As a geologist, let me assure you that gold is not easily attainable, nor found, nor evenly distribruted. You sound as if you are speaking for Alan G. and the Central Banks to convince us that gold has no value! I would like to point out two personal experiences from people who left different countries. I had friends who left both Viet Nam and Mozambique, both took only GOLD with them, as their 'store of value'. What you fail to factor into your thinking is that the world population is increasing much faster than the available gold supplies, thus on a personal basis each individual on this planet has less gold available to them. Is gold worth anything? Some people seem to think so. Inflation is a new idea? Would you like to buy some tulip bulbs?

Byron : a curency crisis is on the short list of triggers that can spark a rally in gold. us economy gained handsomely on the devaluation of the dollar. with others now emulating, one wonders what are rubinspan's contingency plans to stay ahead of the pack. i am sure they have a trick or two up their sleeves.

Byron : a curency crisis is on the short list of triggers that can spark a rally in gold. us economy gained handsomely on the devaluation of the dollar. with others now emulating, one wonders what are rubinspan's contingency plans to stay ahead of the pack. i am sure they have a trick or two up their sleeves.

Panda: Hell. Just hold off payments on them credit
cards until January, 2000. The Y2K bug will erase
it!

Panda: Hell. Just hold off payments on them credit
cards until January, 2000. The Y2K bug will erase
it!

Preacher - Those guys are dead? As for your astute comment about the 20th largest cities in twenty years, I agree with you entirely. I will address this in more depth in my upcoming treatment on gold for the rest of 1997..............

Preacher - Those guys are dead? As for your astute comment about the 20th largest cities in twenty years, I agree with you entirely. I will address this in more depth in my upcoming treatment on gold for the rest of 1997..............

NJ Don't have my charts in front of me here at the library but if I remember correctly, the last bounce by the XAU up to 108 from 91? was during the time the dollar sold off against the yen. Remember the yen was at 127? and fell sharply to 112? had a bounce and now appears to again be strengthening against the dollar. Seems that as goes the $ so goes Gold. ( at least recently ) .

NJ Don't have my charts in front of me here at the library but if I remember correctly, the last bounce by the XAU up to 108 from 91? was during the time the dollar sold off against the yen. Remember the yen was at 127? and fell sharply to 112? had a bounce and now appears to again be strengthening against the dollar. Seems that as goes the $ so goes Gold. ( at least recently ) .

Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )
http://www.geocities.com/WallStreet/5969/agpm70hr.gif

Fidelity Select American Gold & Precious metals Chart.
Ten market days ( seven hours / prices per day )
http://www.geocities.com/WallStreet/5969/agpm70hr.gif

Good-night Panda -- The credit-card alchemist!!

Auric: With reference to your debate comment; I don't think there is a basis for debate between those two points of view. RJ, is a trader and drawing conclusions from the here and now. Trading the right hand edge of the chart as Oldman once phrased it. Ain't nothin' wrong with it.

Ted Butler, on the other hand has wondered why that chart has looked so crummy for so long. Especially in light of elementary things like supply and demand which should be at least mildly positive for gold. He has continued from there and found evidence that, yes indeed, whether by the hand of dark mysterious forces or the simple overextension of a paper cycle gone mad, the newly minted mechanisms of leasing, forward sales, derivative instruments and host of other scams, have produced serious distortions in the markets for these commodities. The essential function of a market is to produce signals related to supply and demand. His contention is that non market elements are hampering the ability of the PM markets to perform their primary function. He also believes, if the present situation is allowed to persist, these markets will rapidly reach total disfunction. As pointed out in his latest at Gold Eagle, PL/PA are almost there and gold and silver will likely follow. .... Sorry for the verbosity.

Auric: With reference to your debate comment; I don't think there is a basis for debate between those two points of view. RJ, is a trader and drawing conclusions from the here and now. Trading the right hand edge of the chart as Oldman once phrased it. Ain't nothin' wrong with it.

Ted Butler, on the other hand has wondered why that chart has looked so crummy for so long. Especially in light of elementary things like supply and demand which should be at least mildly positive for gold. He has continued from there and found evidence that, yes indeed, whether by the hand of dark mysterious forces or the simple overextension of a paper cycle gone mad, the newly minted mechanisms of leasing, forward sales, derivative instruments and host of other scams, have produced serious distortions in the markets for these commodities. The essential function of a market is to produce signals related to supply and demand. His contention is that non market elements are hampering the ability of the PM markets to perform their primary function. He also believes, if the present situation is allowed to persist, these markets will rapidly reach total disfunction. As pointed out in his latest at Gold Eagle, PL/PA are almost there and gold and silver will likely follow. .... Sorry for the verbosity.

Good-night Panda -- The credit-card alchemist!!

Just ran across this URL on the web. Titled Mining Scams. Have not read it all. Don't know if it has been posted here before. http://www.state.nv.us/busi_industry/mineral/fraud.htm

Just ran across this URL on the web. Titled Mining Scams. Have not read it all. Don't know if it has been posted here before. http://www.state.nv.us/busi_industry/mineral/fraud.htm

Earl @ 23:36- Ted Butler and RJ cannot both be
right. The facts will prove one to be correct.
Personally, I go with the Butler scenario. I say
that by the year 2000, and very likely sooner, we
will find out.

Earl @ 23:36- Ted Butler and RJ cannot both be
right. The facts will prove one to be correct.
Personally, I go with the Butler scenario. I say
that by the year 2000, and very likely sooner, we
will find out.