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Bill - Can I call you that? - your latest post had a lot of 'I figures' in it. The comments in brackets are mine. "...I can see ( I figure ) the Dow going to 15-20,000 over the next 10 years
before it slacks off. ( Really - You, and how many other millions of Yuppies think this is an original thought of their own? )
All this while gold will
be in bear market. ( The Present does not equal the Future. )
I figure the Dow bull to
run strong till 2008-2010. ( The Past does not equal the Future. ) I figure 15,000 on the Dow, maybe 20,000 before the
bear sets in. ( Veerrry Inntereeeesssting but...?
I figure gold will be in a bear till then with 100-140 ( the Almighty American Buck - what a bunch of hooey ) as the low. At that point in time the pendulum will turn and
the Dow will go into a 20 year decline. In
the meantime the money pours in daily in
a never ending river of funds that must go
somewhere and stocks is where it is going.
Tell me what will stop that river of money
from pouring in every month and I might
believe differently but all I can see ( I figure ) is the
river getting stronger monthly."
First of all I will answer your question. What will stop this flows of monthly money? Fear, Panic, Change of trend, followed by change of pysche ie. A return of common sense once enough of the unthinking sheep are fleeced. A severe downturn will halt the flows, possibly a recession ( Long or short ) which brings the haughty 'cannot lose crowd' down a couple of notches, down to where they actually have to start thinking on their own again.
Your comment that, "...I figure the Dow bull to
run strong till 2008-2010... ( and ) I figure gold will be in a bear till then with 100-140 as the low." is similar to other predictions I have seen printed here and there. Who feeds you this crap? Gold hasn't been below $200 since the '70's. Do you know how much fiat money has eroded in purchasing power since the '70's? Do you know how much value ( purchasing power ) a 2010 American Dollar will have compared to a 1976 American Dollar? Do you have any idea of the nonsense you are spewing? I tell the following story to try and give you some food for thought concerning the past and future value of the American fiat dollar. Remember when reading this that a dollar at this point in time was still valuable as it was still in the shadows of the Gold Standard, having JUST been decoupled from same but the devasting effects of that action had not yet hit in full force. Here's the story.
In 1973 I took my young bride and myself to Europe on a whirwind tour ( 12 days ) of Southern Europe. Listen to what we did and how much it cost. We flew ( two fares ) Toronto to Marseilles return ( roughly Chicago/Marseilles ) . With a short stop over in Paris I had a taxi driver take us from the Paris airport, drive us into town to drive past as many famous places as possible in three hours and then back to the airport for our plane. We never left the cab and he drove steady for the three hours. I gave him a 33% tip. We then stayed in Marseilles at a hotel near the Mediteranean for five days. We ate at different restaurants for breakfast, lunch and dinner and enjoyed bottles of wine about twice a day and drinks at lunch and dinner when we felt like it. We went sightseeing and spent money doing it. After five days we had a rental car waiting for a 7 day rental. We headed over to Monte Carlo and spent two nights at a hotel kitty corner to the famous Casino ( at which I played roulette for two nights neither winning nor losing ) . Fabulous restaurants in Monte Carlo. Next we headed north through the S. Alps for a pleasant day stopping at a couple of Inns on the way to sample the local specialties. We ended up the day near the border with Switzerland, spent a pleasant evening in a country inn and crossed the border into Geneva the next day. Oh BTW - Bought souveniers to bring home in all cities we visited, carvings, blankets, silk scarves etc. That night headed back through France, south to Barcelona, Spain, more hotels, ( one on the sea and one modern downtown Barcelona ) , dinners, and wine for a couple more days. ( Forgot to mention. I noticed, with all this driving, that gasoline was 3 to 4 times as expensive as back home. ) Back through Perpignan, France and then back to Marseilles and Aix en Provence for more wining and dining before flying back to North America. How much would this cost today? How much will this cost in 2010.? You state silly nonsense that the American Dollar is so powerful that it will buy an ounze of Gold for $100-140 even ten years from now. I believe that Gold in 1973 was about $100-140. Will you also be able to duplicate the above trip in 2010 for the $1300. I paid? I think not. P.S. I still have the cravings and blankets. Goodnight and Good Luck.
Bill2j can no more tell the fate of the markets/ gold etc than any of us can.
However I have heard nearly two years worth of excellent arguments from wise analytical heads on this forum as to why the markets SHOULD drop and why gold SHOULD go up.
Meanwhile they AND I have missed out on 50% return and sufferred a 50% loss on our PM!!
I have reached the stage when I would no more own an overpriced share of Yahoo than a decimated share of a Gold Mine.
As to the metal itself- we shall have to see whether we have really crossed the rubicon into the de-monetisation and devaluation of gold or whether it's day will come again.
Talking of the indices crashing upwards where's Jiel hiding ?
This may seem self serving but I recently bought a rather large position in a company on the VSE. Yesterday the company announced the sizeable investment of 4.2 Millon Canadian into a mine in Bakersfield,Califonia. This firm has previously announced the investment of 2.0 million Canadian into a Canadian mine called Blackdome. Both mines will be in production by Dec 1998. The investment has been totally Japanese. Jupango Inc. now owes 51% of the corporate ID. This stock is trading at 30 cents Canadian. The company has a property in Nevada called Golden Trend and it sits in the Battle Mountain reserves. This property consists of 1600 acres of prime realty. The stock has done nothing on these announcements and continues to trade at values that existed prior to the announcements. Can someone with some expertise tell me why. Is the VSE that slow or undervalued to ignore the value in this company.
Meridian,second quarter,results El Penon is not yet producing.
Their present gold production is coming from other mines Jerritt Canyon, Beartrack El Penon is not yet producing.
The company had expected El Penon mine would produce 130,000 ounces of gold and 1.9 million ounces of silver annually during the mine's eight-year life, with a cash cost of $180 per ounce of gold. Tuesday July 14, 6:05 am Eastern Time
Company Press Release
Meridian Gold Reports Second Quarter 1998 Results
RENO, Nev.-- ( BUSINESS WIRE ) --July 14, 1998-- Meridian Gold Inc. ( TSE:MNG - news; NYSE:MDG - news ) today reported second quarter gold production of 52,177 ounces at a cash cost of $201 per ounce ( all dollar amounts in U.S. currency ) .
Gold production increased 18 percent versus the previous second quarter mainly as a result of improved performance at Jerritt Canyon. The second quarter cash costs of $176 per ounce at Jerritt Canyon versus $245 per ounce for the same period in 1997, highlight the significant strides the mine has made to improve its profitability. The underground Murray mine has reached its full production rate of 1,200 tons per day with an average head grade exceeding 13.5 g/tonne. Underground mining costs have improved measurably reflecting significant improvements in mine productivity and the use of a hybrid bulk mining method.
For the second quarter, the company realized a loss of $5.5 million, or $0.07 per share. This compares to a loss of $7.8 million, or $0.11 per share in the second quarter of 1997. Significantly lower exploration costs in 1998 contributed to the improvement, but were largely offset by lower realized gold prices.
Meridian's net cash flow was positive for the quarter, resulting in a quarter over quarter increase in the company's cash balances to $51.5 million. During the quarter the company liquidated put option contracts, exercisable at $400 per ounce in December 1998, covering 16,500 ounces of gold and representing one-half of the 1998 hedge position. A gain of $1.4 million realized on the liquidation has been deferred and will be recognized as revenue in the fourth quarter as the hedged production is sold.
Second Quarter Results
Sales for the quarter were $15.9 million, versus $16.9 million in the second quarter of 1997, despite an increase in production to 52,177 ounces of gold from 44,203 ounces. This was a reflection of lower realized gold prices, which averaged $301 per ounce versus $376 per ounce in the prior year's quarter. Cash production costs improved in the second quarter to $201 per ounce from $211 per ounce in 1997.
At Beartrack, gold production in the second quarter was 23,680 ounces, with cash costs of $234 per ounce. This compares to second quarter 1997 production of 24,836 ounces at a cash cost of $185 per ounce. The higher cash costs reflect the expected decline in grades in the North Pit for 1998. The remaining ore grade in the North Pit is significantly lower than the average reserve grade. In the future as mining shifts to the higher grade South Pit, the cash costs at Beartrack will decline significantly. Beartrack is expected, as stated in the company's 1997 annual report, to produce 100,000 ounces of gold at an average cash cost of $230 per ounce during 1998.
At Jerritt Canyon, production increased 47 percent from the second quarter of 1997, with cash costs declining by 28 percent. The company's share of gold production in the second quarter of 1998 was 28,497 ounces at an average cash cost of $176 per ounce, versus second quarter 1997 production of 19,367 ounces at $254 per ounce. To date, Jerritt Canyon is performing better than expected, due to higher than budgeted underground grades and higher productivities.
Exploration spending in the second quarter, primarily at El Penon, was $3.0 million, compared to $8.6 million in the second quarter of 1997. As released on July 6, 1998, exploration drilling at El Penon has uncovered a new, high-grade zone of mineralization. This zone, named Quebrada Colorada, will be a major focus for exploration work during the remainder of 1998. Meridian is currently conducting step-out drilling to determine the strike length of the zone. This information will help determine the amount of drilling that will be required to further define the zone.
At the end of the second quarter, Meridian Gold's balance sheet remained strong, with cash resources of $51.5 million to support the development of El Penon and the company's other growth plans.
First Half Results
For the first half of 1998, the company recorded a loss of $10.5 million, or $0.14 per share, compared to a loss of $13.8 million or $0.19 per share for the first half of 1997.
Sales for the first half were $30.2 million, versus $30.9 million in the same period last year. Gold production was higher, at 103,154 ounces versus 85,807 ounces, while the average realized price of gold fell to $298 per ounce from $363. Exploration spending for the first six months, primarily at El Penon, was $5.3 million, significantly lower than the $13.2 million spent in the same period last year.
Outlook for 1998
Gold production for the first half was 103,154 ounces at a cash cost of $205 per ounce. Based on these results, Meridian is on target to achieving its forecast of 200,000 ounces of gold in 1998 at a cash cost of $225 per ounce. In fact, based on the sustainability of improved productivities at Jerritt Canyon, the company is lowering its cash cost target for the mine from $220 per ounce to about $200 per ounce. This will, in turn, lower the overall Meridian Gold cash cost for the year from $225 per ounce to about $215 per ounce.
The fourth quarter will be slightly better than the third quarter as the Jerritt Canyon mill will be shutting down for a week in July to change-out liners.
With the earlier announced new high-grade Quebrada Colorada discovery at El Penon in Chile, the company expects higher exploration spending during the second half of the year.
A big problem would be that the date validation routines in the old code must be modified to allow for month greater than 12. Also, these strange-looking dates could not be passed to another application unless that software functioned in exactly the same way.
Since the old code must be modified in any case probably the best way to go is with windowing of some kind; e.g., if year between 00 and 25 then year_prefix=20 else year_prefix=19.
This example is for old COBOL code. Many newer software products have date formats which already use a 4-digit year. Applications using those should be compliant, but then again programming still allows the freedom to write non-compliant code.
Fixing the date arithmetic is relatively simple. But locating and patching all of the date fields and routines is time-consuming and error-prone. That's why testing is required.
As if the legacy systems weren't enough of a problem, we have the embedded chips.
Like many others, I'm reading this site because of Y2K.
Precious Metals & Select Gold scored the biggest percentage
gains of ALL sectors today! They are presently bouncing up
and down in a 6% channel. The bottom of this channel has
HELD over and over again and is the same LOW put in 5 years ago.
As Kaplan on his page has often pointed out, this is the best buying
opportunity in 5 years for GOLD.
Here's my two cents worth ( just over one cent US ) :
The VSE is like a moribund animal at the present time.There is very little milage being got out of announcements which used to be a gaurentee of at least a ten- twenty per cent rise.
It's to do with the POG, Bre-X , local factors etc.
The announcement of possible production in 6 months still leaves the possibility it won't. How many delayed production newsreleases have there been. Lots.
There is still environmental concerns, etc etc
How many shares outstanding and how many held by insiders and what was the average volume compared with the volume after the announcement?
This sucker rally will kill gold and everything else that is a stock. Asia is not over. Getting caught up in the stock market frenzy will lose you your money.
Earl, hopefully my chart will be displayed. Like you stated last week, candles are good for turning points. Without a good solid pattern to identify a change, the last direction is still in effect. I'm still looking for the gap 372-375 to be filled which would also complete a 50% retracement of the first leg ( 1 of a 123 pattern ) . Today's close is still well above the 18 day MA ( bottom right chart ) . If we can close the zap and stay above the 18 day MA I would look for 40 point move to start thereafter ( the 3 of the 123 pattern )
Earl, I wouldn't think of going to bed at night owning any of this paper, I do SOES trade the stuff though. I'm looking for an automated early warning system to scan 20-30 stocks in real-time for me. My trading decisioning are mainly based on channels or 123 patterns ( which occur daily in each stock ) . Tradestation works great for this.
you bizzy skimming rockets through outer-space?.................How do you have time for kitco ;- )
away...to watch for falling debri in the sky ( yuk-yuk )
Sunday, my day off, I put together a box to run the tradestation on for the SOES office. Pretty nice system, M-Tech board at 83MHZ, DIMM RAM, ULtra DMA HD, 4 PCI slots for the monitors, I choose the new Cyrix 300 MHZ chip. $900 for the works. Windows 98 drives the 4 monitors - really cool!
Hello chasAbar_A:
You will find All options from the Chicago board of options Exchange at
CBOE.Com Good Luck, I have not yet succeeded in S+P PUts yet, Try also
Sears, Cocacola, Wells Fargo, GM, IBM NETScape, But really look before you "leap". Puts are hungry succers and like to be fed.
Nicodemus
While everyone is in a buying mood, that a crash is imminent next week unless we go to 10,000, which I doubt. The big boys will rake in the late comers chips.
PCI? I'ts all about the Universal Bus. C'mon kuston.......... ;- ) Sounds like a good system.........did you go to Fry's? I need a few more monitors too............and a little fridge and a camode.......I'll never leave the 'com-room'.
five over after fifteen?? And then the last three were triple triple triple?? har-har.
You should include Disney in those stox you watch. It will be a mover................eh? How 'bout that Dell......... ( whoa ) .... ( ! )
Hey, as I remember your score was lower then mine at the end. Love that Fry's for last minute stuff. You can have that UBS stuff, I'll stick with my quad Millinum IIs.
Thru European fund, so when our rally fails, I can be out by 4 without sufferin ( as europe closes by 11 AM or so ) . Transport non confirm. Oil up 64. cents today. Don't look good for transports. People are buying stocks when they have a bad profit reports. 23 July is the date, give or take 2 days.Will sell into strength soon. I love this stuff.
Does anyone have any insight as to why this stock
continues to decline when the P.o.G has gone sideways.
Their key asset is 25% of apparently 19 million oz.s
of gold and 5 billion lbs of copper in Chile.BGO holds
24% and PDG has an option for the remaining 51%.Is this
just another mining stock on the V.S.E taking a pounding?
INTERNATIONAL MOTHER .................................S
IMF WARNS THE US MAY HAVE TO
LIFT INTEREST RATES
Wednesday 15 July, 1998 ( 2:31pm AEST )
The International Monetary Fund says the United States Federal
Reserve may have to raise interest rates in the next six months if the
Asian financial crisis does not curb U-S economic growth.
An I-M-F report, released in Washington, says in the absence of
deflationary shocks from abroad, U-S monetary policy is likely to
need tightening within the next three to six months.
However, it warns that tightening credit too quickly until there is clear
evidence that consumer prices are rising would jeopardize the battle
against inflation.
The I-M-F said that given the recent inflation performance and
prospects for a moderation in growth during 1998, the current state of
U-S monetary policy is "appropriate for the time being".
You got to have a confirmation of some kind of a bottom. We have seen no bottom yet. I did this same thing with oil drillers. We gotta be close.... You can buy a few more shares if they go down. I am going to try to be a little late on gold. Too many knives have I caught already.
No one can second guess the bottom, one can only wait till a stock starts to "show" a "trend" upwards. Perhaps set a moving average of your own choosing and buy in when you feel comfortable that the stock has turned around and begins an upward trend. I know what you mean, I look at it this way... It more than likely WILL equal or exceed my purchase price sooner or later. I can only hope that it is sooner.
I just checked in and read all the depressing posts about falling
gold stocks. I own a lot of them and no longer know what to do. If I
sell I get nothing. I would have thought that in this age of information
that prices would be closer to their real value and instead prices have
been pushed to extremes. I don't think I will ever trust the stockmarket
again. Not until regular stocks get hit as hard as the golds have been
hit. That means another 1929 to 1932 market or worse. I mean, how will
one ever know where the bottom is, one won't so I plan to stay out for
a long time if I ever get my money back from the golds. It is looking
like that is going to be a very long time indeed.
To All
1. If you recall, maybe one or two months ago,
my genetic connection had forecast 1180-1200 on the
S&P at which point he planned to take puts. Havent
checked lately if he still feels this way but we are
nearly there..
2. Rand at 5.95 this morning .. Tito rules supreme ..
3 .. The Disney equation .. pog = 41250/yen is still
operative .. pog = 41250/140.75 = 293 ( close enough ) .
for Cheesehead .. checked with Zulus .. They dont
eat cheese for breakfast ..
My first instinct was to immediately buy more at this absurd price. I had to sit on my hands to stop myself from picking up the phone. Now I've got rigor mortis of the wrists as well as a shirthouse position.
Any of you read the book "Been Down So Long, It Looks Like Up To Me"??
Are any of you holding shares that are lower than the price you paid for them??? Stop losses don't always work. You gotta have buyers. A rare breed in the gold market. Smells like a bottom. But then, I've been smellin' it since Jan. Time to have my nose checked.
Hello... My post last hour reflects the S&P puts thinking. My source
suggested that I look into Dec 99 puts with strikes of 1400 ( SXG XA )
1300, 1200, 1100. I checked the referrals from other posters, and I
don't know whether I am only dense, or whether I have a compound problem.
I still cannot locate a site which lists these. Any advice on where I
could look? Does your kin feel a kinship toward any one of the above
figures? Thanks.
a few hours back posted on a weekly basis. If I didn't have a little SWC and was therefore an impartial observer I would point out that the rally to 390 is a fifty percent retracement of the 440 to 340 move down.
We're at 380 basis spot now and I hope we stay there. Further deflation and depression could see us looking that 340 level in the face again. But then it doesn't take a genius to figure that out; what takes smarts wading through all the opinion and news that's out there to base a stance. What makes it most difficult is the total irrationality of the US stock market - but agin maybe its not so irrational - money comes in prices go up, until that ends go with the trend.....
Good answer Wizened. I have read there are stocks with more cash than their capitalization. Just afraid to put the money to work for reasons you stated. POG and Bre-x big part of explanation. Some may well be a screeming buy now but who is willing to take the risk. Lack of buyers in other words explains codeman's stock price action. As they say, patience will produce the answers, good or bad.
Good to see your comments again. Shorting silver at 5.40 with a 5.50 stop looking for 4.80 in August. I won't ask you why. I guess we might see $5.40 if the silver stocks drop another 5 million oz. Silver stocks down 2.5 million today to a new all time low of 85 million.
Lets see if silver rises 10 cents on a five million oz decline in stocks we'll be out of silver by the time it reaches $7.00.
I like your target of 1250 on the S&P. A little more irrational exhuberance and we'll likely make it.
As with Silver at $5.40 the S&P at 1250, fundlementals are what you make of them, they are only irrational in respect to price levels long after the fact..
Donald, Namaste' Did you catch the stunning Sun rising over the Island that is Long?
Now, onto gold and silver mining shares...color me stupid but I have been inhaling shares of various stocks which I feel are at prices that warrant their purchase. I like OROP, TNX, CFB, FSR...and others...and today I am set to purchase more...
The accumulation of these shares is being done at ridiculous prices and I feel when the move in metals comes it will be swift and surprise everyone...
I love the bearish sentiment at Kitco and on the rest of the planet...as it pertains to the metals...I do read and respect the various thoughts and positions presented here...but my street wise gut tells me that buying now is the right thing to do...
For those that say the shares of the mining stocks will take a drubbing in a down turn, well, I say who owns them...not equity holders, metal believers hold them and they will not sell...the downturn is already in...in mining shares...they go up from here...uh huh...
Will the chips be Y2K compliant?
Will they give me access to the Internet & Kitco
- the "Stream" as they say in the new Outer Limits?
Family worriers - it is a lonely job but somebody must do it.
Read FARNHAM'S FREEHOLD by Robert Heinlein.
{pardon if I'm in error here since I loaned the book out and thus don't have access to doublecheck the story}
The main character lives near Colorado Springs {as RH did} and has a steel reinforced concrete bunker stocked with food, water, compressed air, dozens of SILVER dollars, radiation monitors and supplies for when the big ones clobber the Springs military complex {like the Chinese may with their new US MIRV technology}. 24 hours a day he listens to the news - either TV, radio or the latter plugged into his ear while playing cards during a family weekend. His wife & son think he has gone over the edge. Son is sure dad's behavior is why mom is an alcoholic. They are always berating him about being so paranoid, esp. the son - he is a lawyer and thinks he knows better. At least daughter is on dad's side as is the son's fianc and the live in houseman/college student.
They are playing cards one night and dad hears the "this is not a test" from his earplug. He tunes in the TV - the announcer is trying to be calm while telling people to dive for cover. Into the bomb shelter they go - carrying stupefied mom. Even after the first impact, son is still not grateful and tries a powerplay to take command. Dad, with the backup of the houseman with an AR15, threatens to kick his son out the door if he doesn't cooperate. Family or not - there will only be one boss! {They live to regret giving son a second chance}
The moral of the story...
Even after the firestorm - we lonely pessimistic, paranoid, worriers may still find ourselves criticized - for not preparing well enough! And the heads-in-the-sand bunch will want to take over and throw YOU out the door. Best we watch our back - regardless of blood ties or "friends".
Good morning John. If I recall correctly your genetic connection had some mystical ability to divine the direction of gold also. What does he say about the direction the Great Golden?
July 15, 1998
S. Africa's Harmony Fiscal 4Q Pft ZAR45.1M Vs 3Q ZAR33.1M
Dow Jones Newswires
Harmony Gold Mining Co. - Johannesburg
Fiscal 4Q To June 30 Vs 3Q Ended March
All figures are in rand and cents.
........................4Q 1998......3Q 1998
Pretax Profit.........41.1 mln.....33.1 mln
Net Profit............45.1 mln.....33.1 mln
Sales................289.1 mln....283.9 mln
( Dollar@ ZAR6.0850 rand at 0932 GMT )
JOHANNESBURG -- Harmony Gold Mining Co. ( HGMCY ) of South Africa reported Wednesday that profit after tax climbed 36% to 45.1 million rand ( ZAR ) in the fiscal fourth quarter ended June 30 from ZAR33.1 million in the previous quarter to March 31.
Harmony said in a statement gold production from its various mines eased 1.0% to 5,655 metric tons in the latest quarter from 5,713 tons a year earlier.
The fall in production reflected a lower grade of gold mined at Harmony's Free State operations and a fall-off in ore processed at the East Rand division.
Bernard Swanepoel, Harmony's managing director, expects mining rates to improve in the current quarter to Sept. 30 at the Free State operations, offset to some degree by continuing declines in ore processing on the East Rand.
However, the rand's weakness this year - the currency has lost almost 22% against the dollar since the start of 1998 - is expected to boost sales and earnings in the September quarter, Swanepoel said.
Around 0945 GMT Wednesday, Harmony's shares were quoted unchanged at ZAR26.90 each at the Johannesburg Stock Exchange.
The Wall Street Journal Briefing Book on Randgold ( RANGY ) is very negative. They state that RANGY will be delisted from the JSE by year-end 1998. Any truth to that?
Thanks for your thoughtful response. You wrote, "Ted - The crucial difference is that the gold producer borrows the metal for an absurdly low rate, sells it, and banks the cash." Your summary says it all, and says it well. ( no sarcasim intended ) .
Forward sales/metal loans are not about hedging the price, they are about cash. This 15 year epic short-selling campaign revolves around cash flow. The problem lies with the unintended consequences ( let's leave conspiracy out ) . Massive short sales of borrowed metal have depressed the price and left impossible to satisfy obligations to repay metal. While I don't follow mining shares closely, their collective earnings appear to stink because of the low price ( due to the leasing sales ) , in spite of all the forward sales. What happens in a bull market? A mine sold ten years forward will be dead meat, either because it can't deliver or cover, or because lease rates rocket.
To all anounced on BBC2 CEEFAX Uk asset managers fear EMU
collapse within 5 years and less than 50% have risk assement plans should this occur .....IMHO Y2K will put paid to UMU
just thought i would pass this on
Mooney & Bill2J re soothsaying and crap hitting the fan
Bill2J said {among other things}:
"I figure gold will be in a bear till then with 100-140 as the low."
To which Mooney responded with {among other things}:
"is similar to other predictions I have seen printed here and there. Who feeds you this crap?"
Mooney - that last comment is uncalled for!
All the technical analysis and fingers in the wind these last several months calling for imminent and great rise in Gold have had their prognostications turn out just as crappy as those who have been predicting a fall.
The POG has failed to respond to all the assorted reasons why it should rise - too often when it should have gone up it has gone DOWN! Those who have lost money by being faithful have reason to repeat your last statement - to the bulls -who keep calling for better weather.
I agree with many here that it seems only a worldwide financial meltdown and chaos equivalent to the GREAT DEPRESSION AND WWII COMBINED could kick Gold free of the restraints it is under.
The next year may see Gold stay down or sink even lower as Slick Willy finds more ways to keep the economy looking chipper. The question as to where the money will come from to keep the stock market cooking is answered by the continued efforts to pour social security deductions into the market and other similar tricks. Slick Willy is determined to keep this thing going until he is out of office. That conniving crook has an incredible number of dirty traitorous tricks up his sleeve - and what is amazing is that they have worked! We can think of lots of reasons why he should be tarred and feathered and run out of town on a rail - but he goes on in spite of it all! We rail at the results but the reality is the POG isn't going anywhere - up or down - yet!
It is said by many here that only fools are buying stocks now.
It is also said by many that only fools gamble on Gold now.
Both sides have evidence: charts, graphs & fingers in the wind.
For now I am staying out of both.
I can make more money tending to my daily business. But -
I will buy Silver and MAYBE an ounce of Gold {just in case}.
In the meantime I will keep my ears and eyes open
to hopefully detect that runaway freight in time to react.
Long-time veteran market analyst, James Dines, dissects the Asian Crisis into its integral parts. It's a grim prognosis indeed.
He has been on record since 1989 that there would be a major banking
crisis in Japan that would challenge the world to its roots. Dines also
predicted that Asia's currency crisis would spread to Canada, America's
largest trading partner - so that as the Canadian dollar crashes it is not difficult for him to imagine that the United States cannot avoid the suffering of what he calls "The Coming Father of All Bear Markets." Mr. Dines also foresees the Mexican peso as a candidate for yet another currency crash.
What do we envision ahead? There will be a shift, a flight to safety,
sooner or later, out of dollar-denominated assets and into the
traditional and even historic safety of gold and silver, as money
managers seek to transform their paper money into hard assets.
A recession would not be a surprise. But the depth of the downturn, the
difficulty of a recovery and the gloom that suffuses the region have
surprised even the pessimists. The culprit in this latest bout of Asian
contraction and gloom is the Japanese yen, which has plummeted. The
fear among investors is that a chronically ill Asia will infect the robust American and European economies.
Dines insightful and incisive report - albeit grim - may be seen in its entirety at following URL - it will be necessary to delete the extra letters "en" in the word "golden" before pasting the URL to your Internet locator:
You hit the nail right on the head. The thing that stands out about gold the last 20 years in general and the last few years in particular is the fact that it constantly refuses to behave the way the experts say it should. What is even more amazing is that these experts never seem to change their thinking. Currency troubles in Asia. The experts say gold should go up. Gold goes down. Recession in Japan. The experts say gold should go up. Gold goes down. The Euro coming on line. The experts say gold should go up. Gold goes down. You get the picture. The point is at some point in time you have to either accept the facts of what is happening or find a rational explanation of why things are happening that way. I don't fine either. Y2k? Gold should go up. I doubt it will. Stocl market crash? I don't think it will and even if it does I have a feeling gold shares will suffer right along with Intel. In order for gold to go up there must be more demand than there is supply. Everyone keeps talking about the coming recession. Ok, what do you think happens to the demand for jewellry and gold for industrial applications in a recession. The demand drys up like a raisin in the sun because jewellry is a luxury.In any event it is good spirited discussion and a discussion that does not have opposing points of view is not a discussion. I enjoy the give and take and hope I contribute something to the informaion pool.
@ Ted Butler & RJ: re Ted Butler's 6:57 post. I follow lease
rates closely, and your statement that gold mines that have
sold massive amounts of their production 10 years forward
face ruin especially if lease rates explode strikes a cord.
The Kitco Forum has all the earmarks of a gold investment club,
and with this point in mind, it would be highly valuable to compile
a list of companies with significant forward sales so that
members could be warned off these companies prior to a gold bull.
The company that should go at the top of this list is
BARRICK GOLD MINES but the amount of the forward sales
exposure should also be listed.
Re lease rates, the one month lease rates are at 1% and
on the threshold of less than 1% as they decline from
about 1.5% one month ago. I have records for only 1997,
but one month lease rates of under 1% occurred only
three times in 1997, and all during the bear that lead
to the bottom in early 1998. The dates were:
Mar. 14-17 1997, low of .91% for 1 month leased gold
Apr. 25-28 1997, low of .94% "
May 1-June 2 1997, low of .79% "
In the steep decline from the 1997 high of over $400, all
of the above low lease rate periods were characterized by
pauses in the steep decline ( perfect correlations ) , and
periods of no significant price changes ( plateauing )
This is additional evidence that our present gold bear
is lease rate/short sell driven. ( unusually low lease
rates are an indication of low demand by speculative
shorts on the gold lease market. )
The above three periods of low lease rates were ended by
renewed shorting and precipitous declines in the POG, and
a rise of lease rates back up to a more normal 1-2%.
The interesting question is why the pause in short selling
now? Without the short selling, the POG is firming.
Do the shorts interpred $285 as the bottom, and $290 gold
as too close to the bottom to be worth shorting?
If the above is true, the short pressure will be off until
the POG rises to say 295 to 300 and then the short attack
will be renewed. If this subsequently proves to be true,
then this gold market is a total aberration, and should be
rightly shunned by every rational investor.
The irony is, it's CBs and gold mines with lease rates and
forward selling who have manipulated their own demise.
But to get back to my original question, which
gold mining companies will be destroyed by the
next gold bull market? I can think of two, Barrick
and perhaps Echo Bay Mines. Comments?
rhody, all: I have a question. ABX is well connected with the establishment, and I find it incomprehensible they would leave themselves open to the assumption that gold would not rise for ten years ( ie,by selling production forward ten years ) . My guess is the following: That ABX as a major gold producer is following the orders of the FED. There are several possibilities: 1 ) That the FED has assured gold producers that gold lease rates will stay low for years, 2 ) That the FED has promised to bail them out, 3 ) That ABX has some sort of mechanism to back out of the forward sales if they go sour.
On the last item, I don't know how they can come up with 10 years of gold production at the drop of a hat, although their gold reserves in the ground would all of a sudden be worth alot more. The problem would probably be more of a cash flow problem than actual bankruptcy if gold skyrocketed. If they needed to borrow money, investors would be eagerly waiting at the door, given ABX's published reserves, and their record for sniffing out good deals ( Bre-x excepted ) .
4 ) The last possibility is the one you have stated, that ABX would be wiped out. The promises of the FED could be empty ones if the gold markets got away from them. The federal government ( and Central banks ) have promised things on numerous occasions that they could not deliver. For example, if gold skyrockets out of control, the last thing the FED will worry about will be ABX or other gold producers. They will have much worse problems, like a dollar crisis to worry about. I don't know what the truth is about this, but I do think we are missing something. Regardless, I agree that when gold finally does go, the unhedged producers will do much better, profitwise.
rhody, all: I have a question. ABX is well connected with the establishment, and I find it incomprehensible they would leave themselves open to the assumption that gold would not rise for ten years ( ie,by selling production forward ten years ) . My guess is the following: That ABX as a major gold producer is following the orders of the FED. There are several possibilities: 1 ) That the FED has assured gold producers that gold lease rates will stay low for years, 2 ) That the FED has promised to bail them out, 3 ) That ABX has some sort of mechanism to back out of the forward sales if they go sour.
On the last item, I don't know how they can come up with 10 years of gold production at the drop of a hat, although their gold reserves in the ground would all of a sudden be worth alot more. The problem would probably be more of a cash flow problem than actual bankruptcy if gold skyrocketed. If they needed to borrow money, investors would be eagerly waiting at the door, given ABX's published reserves, and their record for sniffing out good deals ( Bre-x excepted ) .
4 ) The last possibility is the one you have stated, that ABX would be wiped out. The promises of the FED could be empty ones if the gold markets got away from them. The federal government ( and Central banks ) have promised things on numerous occasions that they could not deliver. For example, if gold skyrockets out of control, the last thing the FED will worry about will be ABX or other gold producers. They will have much worse problems, like a dollar crisis to worry about. I don't know what the truth is about this, but I do think we are missing something. Regardless, I agree that when gold finally does go, the unhedged producers will do much better, profitwise.
ALL - When Kitco is slow responding - DON'T hit the submit button twice.
It may take several minutes to respond. Be patient. I have been impatient and clicked the button again - nada - again - nada. Only to find three duplicates when I finally get back to K1.
Mtn Bear re Bill Gates -
Perhaps a millenium Gold coin with Gate's face on one side and the Microsoft logo on the other. It could be the new coin of the realm.
Render unto Caesar...
All: What's up? Precious metal selling or buying turmoil? I'm curious. Saw nothing on a scan of the news or review of gold price.
By the way -- sorry for the multiple posts. Waited over 1/2 hour -- was using another Netscape window while waiting for post to clear.
Ted Butler's 6:57 post this morning presents the single most important concept that must be understood in forecasting the POG, i.e, the economic rationale behind CB gold leases and producer forward sales.
Any fundamental analysis that does not consider this is worthless.
Any technical analysis that does not consider this is worthless.
To predict the POG will go to $100 to $150 area, one must assume that all of the gold producers will continue the practice of forward sales until they are all bankrupt and out of business.
To predict the POG will go to $100 to $150 area, one must assume that the CB's will supply 100% of all future gold demand through sales and leases of gold until they completely run out.
IMHO, CBs and producers have acted with arrogance and foolishness over the past few years. The world is now reaping the rewards of this in part in the form of the worldwide currency crisis. When will they all come to their senses. My belief ( and hope for the world's sake ) is that we are there now. Irrepairable harm has already been done!
for Speed ..
It is possible that Rangold will be
broken up .. Since NAV is roughly
twice the share price I would look
forward to that .. I think the Wall
Street whatsis is typical of what
US analysts come up with ..
For Bill2j
Genetic connection forecast for
gold is a shot at $282 with about
a 50 % chance of an extension to
around $255.
For speed again
Harmony results equated to Rd 0.68/share
plus I had a note that shares were
increased to 53 odd million. That's
good earnings for a company with so
much resources per share. They will be
much better this coming quarter when
effect of rand slide kicks in.
for Speed ..
It is possible that Rangold will be
broken up .. Since NAV is roughly
twice the share price I would look
forward to that .. I think the Wall
Street whatsis is typical of what
US analysts come up with ..
For Bill2j
Genetic connection forecast for
gold is a shot at $282 with about
a 50 % chance of an extension to
around $255.
For speed again
Harmony results equated to Rd 0.68/share
plus I had a note that shares were
increased to 53 odd million. That's
good earnings for a company with so
much resources per share. They will be
much better this coming quarter when
effect of rand slide kicks in.
THE COMING CURRENCY CRISIS by James Dines - July 15
Long-time veteran market analyst, James Dines, dissects the Asian Crisis into its integral parts. It's a grim prognosis indeed.
He has been on record since 1989 that there would be a major banking
crisis in Japan that would challenge the world to its roots. Dines also
predicted that Asia's currency crisis would spread to Canada, America's
largest trading partner - so that as the Canadian dollar crashes it is not difficult for him to imagine that the United States cannot avoid the suffering of what he calls "The Coming Father of All Bear Markets." Mr. Dines also foresees the Mexican peso as a candidate for yet another currency crash.
What do we envision ahead? There will be a shift, a flight to safety,
sooner or later, out of dollar-denominated assets and into the
traditional and even historic safety of gold and silver, as money
managers seek to transform their paper money into hard assets.
A recession would not be a surprise. But the depth of the downturn, the
difficulty of a recovery and the gloom that suffuses the region have
surprised even the pessimists. The culprit in this latest bout of Asian
contraction and gloom is the Japanese yen, which has plummeted. The
fear among investors is that a chronically ill Asia will infect the robust American and European economies.
Dines insightful and incisive report - albeit grim - may be seen in its entirety at following URL - it will be necessary to delete the extra letters "en" in the word "golden" before pasting the URL to your Internet locator:
Gold Watch
Veneroso Associates
July 15, 1998 Issue 07.04
John Brimelow William J. Murphy III Frank Veneroso
The Gold Market
More Moves Towards Reflation in Asia
The gold price moves in lock step with the yen and base metal prices. A bet by market participants on global deflation emanating from Asia has depressed the yen and commodity prices, including the price of gold. We have discussed this deflation bet in gold repeatedly in recent weeks. In our view, short of a sudden bursting of the US stock market bubble, the Asian economies will stabilize and recover, the global deflation bet will be disappointed, and there will be reversals in all the markets dominated by this theme.
The recent Japanese election is yet another step towards reflation in Asia. We see more and more signs of coordinated policy moves across Asia away from the deflationary policies of the IMF toward policies of monetary and fiscal stimulus. There are also growing signs of a move by the Asians to establish a regional balance of payments finance fund. This should encourage Asian recovery in a myriad of ways. There are rumors such a facility might have a gold capital endowment like the IMF. These are only rumors, but such a development would obviously be positive for gold. We include our most recent macroeconomic piece on these issues for gold clients.
I don't know about expertise, but I have been checking on several "little" gold mines like this. There are some worse off and several languishing. No merchandising and the money is looking else where. I think CLN is ok and as soon as the money turns their heads, it should go like a cat with kerosene on his butt. I tried to get samples from them and others so I could relate to the ore. Only one sent a little piece. They don't know how to sell themselves or can't come up with the results. Some are solid enough to make it and some will go down because they can't stand the time stretch. They are abet, better than Vegas, but still a bet. Hope this helps??? Charlie
Silverfox: I would add one very important comment to your excellent post about forward sales, etc. -- the economic rationale behind the price of gold. And that is -- the gold producers and the Central Banks have worked secretly together to keep the price of gold down, aided recently by worldwide deflation. What I find frustrating after lurking and contributing to this site for more than a year -- we still do not know exactly how the price of gold is manipulated -- what sort of options/derivatives are traded at the secretive LBMA -- what are the volumes of the respective gold derivatives -- and who are the players? The only conclusion I can come to is that the CB's and the BIS know what is happening, as well as the major gold producers such as ABX. Some of the CB's became greedy, and have broken off from the main group, and pushed the price of gold down more than intended due to the profit motive from the dollar/gold trade. Traders also learned about the secret game, and profited as well. Fortunately this excess seems to be waning, but it is likely to wane as it does with any part of the economic fabric that 'overproduces' -- it overshoots before it comes back to equilibrium. Just like an overproducing chip company or oil producer, some of the CB's will fall by the wayside during their excess. I'm still waiting for some official announcement of a failed CB.
I realize that the gold market has been active for centuries, and always has been secretive. But -- one of the good things about government regulation is that it has made the markets more transparent. Unfortunately the tradings of central banks is anything but transparent, and it may be our collective ( worldwide ) downfall when we suddenly realize which Central banks have 'sold' all their gold, despite official statements to the contrary. Unfortunately our western obsession with debt and credit has infected the Central Banks as well as the average westerner. Only transparency will change this, as only transparency in Japanese business will allow them to identify the 'dead' corporations from the 'live' ones. Too bad even AG is against disclosure of CB derivatives trading. Too much dirty laundry I would guess. It is unfortunate that so much derivative trading worldwide is unregulated -- close to 100 trillion ( per day? ) I think it was at last review. One trillion/day ( ? ) just in US dollar derivatives trades. Big numbers regardless, and increasing exponentially. Thousands of tonnes of paper gold traded per day. My guess is that it will be like the streetlight at the intersection -- world transparency in derivatives trading will only occur after the crash. My guess is that will come first with Central banks, as they should be held to a higher level of honesty than the equities/commodity markets. The CB's are supposed to be models for the banking practices in their respective countries -- banking practice is supposed to be conservative for a good reason -- they are the repository for our precious savings. Unfortunately, it seems that only the BIS has actually remembered what banking is all about.
I apologize for the lengthy post. Hope others are stimulated by it. I certainly would like to know more about that mysterious gold derivatives market.
I don't know, but I think the CB,s already know the jig is up. They and their cohorts are swilling paper trades to hold out to see who goes first. It seems impossible that the CB,s can't know, so it looks to me like a last ditch stand. How long can they hold the line???
Not long, it seems.....inspection of a logarithmic chart of POG from mid-96 to now indicates a downward trend bounded by the Nov 96 and Apr 98 highs on the top, and a ( shorter-term ) upward trend bounded by the Jan 98 and Jun 98 lows. These two lines converge at about the $290/oz level in 2 1/2 months or so. A break thru either line should give us an idea which way the POG will move.
Miro, Tol1, PH, and all you other sailors out there...
Beware the ``security zone!!''
MIAMI ( AP ) -- The U.S. government plans to declare most of the Florida coast a ``security zone'' to restrict exiles planning to enter Cuban territory illegally, The Miami Herald reported today.
Federal officials said they will authorize the Coast Guard to ask boaters in all Florida ports except those in the Panhandle if they plan to go to Cuba, the Herald said. Boaters will be detained or they will lose their craft if they plan to do travel to Cuba in violation of U.S. or Cuban law.
First you need to buy a bank ( or at least own a major interest in it ) .
Of course, your bank needs to be regulated by your national bank or
equivalent governmental agency. Ingratiate yourself with the
national agency, and from there via membership of the
BIS is a short step to mastery of the arcana.
I have to agree. I can visualize the lines and it fits what I am thinking, but I would like to see that chart. Something has to give and I don't believe the charts lie all the time, thanx Charlie
chas: What worries me is that the CB's still have alot of gold. Gold is thus in oversupply right now, just like oil. The problem is that the CB's can agree not to push the price of gold down anymore ( just like the oil cartels ) , but there is always that rogue group that fails to go along. Also, if a real threat to the world's fiat currency system materializes, any verbal agreement by the CB's not to sell or loan gold would immediately go by the wayside, as they desperately try to keep the sinking currency ship afloat -- unless the CB's involved already spent their gold. That is one problem with gold derivatives -- it gives the CB's a tremendous leverage they did not have in the 60's and 70's.
The price of gold will not be free to rise until the CB's have no incentive to sell it. I know that is not an adequate answer -- it just shows what gold bugs are up against.
Things will look better when commodity prices start to rise, or when the CB's actually start buying gold in earnest. We just ended a two year gold bear, and it will take time for it to rally in any meaningful manner. Wish I had figured this out years ago. I do give credit for my fellow Kitcoites at this site in opening my eyes to the truth -- more than at any other site on the web.
Silverbaron, Aragorn III, Spud Meister, Tantalus, Earl
Thanks for the feedback from yesterday afternoon's posts. One thing I hadn't thought about very much was the size of the 'digital economy' vs the 'cash economy'. There is a TREMENDOUS disparity between the two, at least in $US commitments and paper currency.
Our material economy is like a type of mouse I once read about. This poor creature has a life span of 30 days. Its metabolism is so fast that it must constantly eat or face starvation. Because of this ultra-fast metabolism its lifespan is like that of a match: burns brightly for a short time and then 'out' it goes.
Our economy is all pipelines and wires. It has literally become a 'consuming' machine. There are no reserves. Everything must flow. This is different than two generations ago when people saved, conserved, planned ahead, and produced for themselves. The ratio of cash&savings ( approximately $US 1.2 Trillion ) to debt based consumption ( approximately $US 27.5 Trillion ) about says it all.
The only problem with this way of doing things is that there is literally no practical way for the economy to transition from its present means of to that of the past without a cataclismic, lurching failure. That this necessarily means the death of large numbers of people here is of no doubt to me. Again, the hyper-mouse must eat continually or die. Unfortunately, I see this happening as people, particularly in dense urban areas, can't find food. They were depending on the pipeline and it failed them.
I wish to express that this causes me the greatest level of grief. I in no way wish this upon even those who have treated me poorly. Though we stand fully condemned I ask for mercy for us all. Please join with me in this prayer.
Buy a (Central?) bank, wait a few years, and join the BIS
Trinovant: I like your sense of humor. That approach toward unraveling the mystery of the LBMA might be easier than arranging to be born into the Rothschild family. During one of my wild moments I was thinking of learning Turkish and masquerading as a prospective gold Trader in the Istanbul gold market. Might be easier to break into than the LBMA -- even if security is tighter than the US military ( complements of WJC ) . It is our bad luck that WJC does not work for the LBMA.
I see this a bit differently. It is pretty clear that these CB's do not dump gold on the open market, they just shift it around amongst themselves. A few tonnes make it out to saticfy the demand for increased amounts of paper gold trading.
The idea that a CB would sell gold into the open market seems like throwing the life preservers overboard as the ship is sinking. The last thing they will sell, particularly in a time of ruinous worldwide currency volatility, would be the one hard asset they have other than fiat paper.
I think the only time a CB uses gold is to settle some kind of inter-CB deficiency.
OK, J. Aron is taking delivery of 26 million ozers. The word today is another 22 million oz will be delivered by the end of the month. The 3 million oz draw down in COMEX yesterday was a transfer from Wilmington to Republic. So, the question is: Are COMEX stocks going to drop by 50 million oz? Not a chance.
Not all who have accepted delivery notices will actually take delivery, some will through London, and producers could deliver from production, but I see the possibility of another 10 - 15 million ozer drop in COMEX if some of these deliveries come through, which one of my sources assured me would be the case. Some metal will leave COMEX by the EOM.
The whole thing smells like a bookkeeping dodge and it dont smell purty. Funds are buying below 5.20, so I think 5.00 may not happen. The only bearish news I see is demand from India is way off, but Taiwanese buying is good, which is usually a good indicator for mainland China.
I too have seen 4.80 on the charts and the daily stohs are toppy here, but a few more days of consolidation and the charts will look friendly again. Im not buying here. I will buy the move. A sweet little pennant is developing in silver. The last couple of times it broke down, Im thinking there will be a breakout this go around. A failure at 5.50 with confirmation of warehouse stocks remaining steady, and Ill jump on APHs wagon. Until then I wont sell it here either.
I wanted to get some chicken livers for lunch Sunday, hoping to predict the short term POG movement by their form, consistancy, flavor, oiliness, tenderness, et cetera. Unfortunately my usual source was out so I was forced to make do with some cheese stuffed jalpenos instead. Now anyone who knows anything about modern divination methods knows that predictions using chicken livers usually are completed within a couple of hours but jalapeno predictions take several days. Well, today was the day! According to the jalapenos, gold will be $320 by the 30th. IMVVVHO ( Notice the 3 v's as jalpenos make a man very very very humble ) Usual disclaimers apply. If this is wrong blame the peppers not me!
Does anyone know very much about Farallon? It hit 2.05 today
closed at 2.20. I know they have a very good property in Mexico
and it is a Hunter/Dickinsen company who have had many successes
in the past.
Allen ( USA ) : Let me add my Kudos to your supporters. Your points are well taken. We have several levels of 'fiat' currency -- 'real' paper money and 'virtual -- electronic' money. If the computers lock up ( ie, ATM's ) , even physical paper US dollars will be worth alot, and they will be easier to use than physical gold. I have been thinking for some time about stashing about a month's worth of cash for a rainy day, as y2k or its ilk is much more likely to occur without a massive gold rally. Physical paper dollars will be scarce, too!
We don't need y2k to have our electronic money melt down. Just think about that great North East power blackout -- no lights, no gas, no cash. Great baby boom in those elevators. All due supposedly to a fried squirrel at Niagara Falls. Can't even buy food without a computer for the bill calculation. The latter just happened to me during a thunderstorm. Had to walk out of the store and find one with electricity. A nice big solar flare could make electronic dollars disappear as well, without y2k. Could knock out power for 100 million people.
Have you got Gold? Oops -- ( physical paper ) dollars too?
Again, I am mostly in agreement with you. It is about cash and cash flow and if a producer has not the $ to buy back some of their forward sales, they will get killed in a price hike or by exploding lease rates.
My take on this, is that if a producer operates in this manner, they should go belly up. Forward sales are reckless without the means to hedge these sales. Under the scenario you suggest, we are in entire agreement.
Your post was cut off at the end. You said something like, "Im sorry if." And then just empty space. You also made mention of no sarcasm intended. Please believe that I have never read sarcasm into you posts and I can fathom no reason why you should offer any apologies. Your posts are informative and factual. You concerns are rooted in what is rather than what you would wish it to be. I respect your opinion and look forward to more from you in the future.
RJ; Thanks for the comments....I noticed there was about 1.2 million oz's
added to Silver warehouse totals today. I also noticed, like you
mentioned, that the large withdraw of Silver yesterday was from
Wilmington Trust. Isn't that the warehouse ( that we talked about
some time ago ) , that was closing out completely? It appears they're
down to roughly 8.5 million oz's now. Should we expect to see these
stocks disappear this month? Thanks, Fox-Man
What we must ask is "What would a prudent man do given this information?". If you hold cash you can always return it to the 'system'. No loss there. If you have cash and inflation breaks out you can always buy something real. No loss there. If you hold cash and deflation strikes then you are in like Flint, baby!
The only question we must answer ourselves is "How prudent do I want to be now?" The rest is a matter of execution of plan.
Hope you're plans are finding their fulfillment soon.
In September the panics will start. Subtlely at first, but they will grow. Avoid the 'rush'.
Allen ( USA ) : I agree that is one method the CB's use. All they need to do is state whether a CB bought or sold gold, and the market moves accordingly. However, one of our fellow Kitcoites made a convincing argument that the CB gold loans actually can involve the gold physically leaving the CB to a bullion bank or to a gold producer, based on some information from an ABX financial report.
So -- we do know that much physical gold was transferred, either from gold sales or loans.
There is a theory that says if ever the arcane secrets of the LBMA,
BIS and CBs were discovered by common folk, the whole shebang
would collapse and be replaced by another infinitely more
obscure and complex system.
There is another theory which says that this has already happened.
I spent some time on the phone today with my stock broker at
Morgan Stanley/ Dean Witter and he confirms the reason gold has gone
down is because of two things: Hedge funds taking the deflationary
bet ( and so far being right ) on the price of gold and gold stock owners
selling their gold funds. He has had most of his people finally get
sick and tired of seeing their gold funds go lower. This forces the funds
to continually liquidate the stocks.
Central banks would never sell their gold at this point since what
would they have left but declining currencies.
So all in all, he sees things the way Veneroso does. And he thinks
the situation will change soon but declined to say HOW soon.
I read the article on Windows 98 with some interest. The URL was posted here earlier. I immediately ran the Version Conflict Monitor and found I had zero files that were changed. Does this mean that Bill Gates is not out to control me? I was sure he was..
One intriguing thingie about Win 98 is the 32 bit FAT. This vastly more efficient FAT will run dives up to two terabytes with no partitions with only a 4K cluster size. I like this.
The problem is: Windows warns that files from 16 bit FATs can not be read on the new 32 bit FAT. Windows warns of this during installation and offers the option of converting to the newer FAT anytime in the future. I am afraid to do so until I understand the compatibility of this FAT will older files. And do they mean older files or programs?
Oh, and another thingie, once you convert, there is no way to go back.
The operative word here is "back", as in Back Up. Not just your critical files but an image of the disk would be the only way to fully restore your old FAT should you encounter probs with the new.
Yes MS is trying to run the world.
Who would act differently with the same power?
Business is in the business of business.
Whatever makes business bigger is generally viewed by stockholders as neato.
RJ: Do you really think ABX would really get caught with its pants down if the price of gold skyrockets? I could see a small gold producer doing this, but I find it hard to believe that ABX would go bankrupt. Short term cash flow problems, perhaps -- weak earnings for a time, perhaps.
I still maintain that ABX has direct connections with the CB's. Perhaps this means that ABX had been told that the price of gold is not going up very much.
I think the only situation where ABX could really be hurting would be if there was a bigtime unforseen crisis of some kind, and the price of gold got away from the CB control. Relatively unlikely.
Comments?
By the way -- appreciate your comments on silver. Still have my holdings in PAASF, on the assumption that the silver bull will eventually resume.
@ JTF: Barrick is certainly connected, with the former Prime Minister
of Canada on the Board of Directors and Geo. Bush as a consultant.
I always wondered why these two figures would take a job with a gold
outfit when a position with GM or Microsoft would seem more appropriate.
The powers that be tell us gold is unimportant; that it will
be demonetized, but watch what they do, not what they say!
Sorry about the late answer to your morning post, but Kitco was
off line, and I got so frsutrated I went out to a show!
It seems to me the casino is an appropriate metaphor for the stock market. Certainly this is not the first use of this metaphor.
In today's casino, there are no chips or even paper slips. Just digital credit and debit. The "change cages" on the perimeter of the casino are the banks. One can move from the slot machines to the table games, but when it's time to cash out, is there enough money in the cages for everyone's winnings in the casino ? Since stocks are NOT a zero-sum game, there may be more digital credits than money in the cages. Then again the cages can credit your account a digital amount.
Most folks never ( never? ) withdraw most of their money out of the banks anyhow. When money is earned or spent, digital credit is simply transferred to or from your bank or another bank. Same when you are deceased. Banks are truly money changers.
Moral of the story: Banks and stock markets are the Hotel California ... you can check out anytime, but you can never leave!
JTF -
No. I think any responsible producer will have the necessary cash reserves to hedge, or buy back a significant portion of their forward sales outright. To act otherwise is grossly irresponsible and, quite probably, suicidal.
Gagnrad -
May I borrow your method? I have been looking for something to blame my wrong calls on and I think this fits the bill. I like it: "Not me, its the peppers what did it". Royalty checks will commence once I see the clients are buying this dodge. I might have trouble getting this approved by legal though. Ill keep you posted, but I think you are on to something. To hell with the livers, stay with the peppers.
Fox Fellow -
I am not sure when Wilmington will transfer the rest. I thought I heard a July date some time back. The 3 million that left Wilmington, was offset by just 1.2 today, eh? This would suggest that more silver has left the warehouse to who knows where? Goldman Sachs, Berkshire? I dont know but it smells funny. I prefer to sit it out and buy once the pennant breaks. Until this I am way cautious.
AZS, BGO and other Vancouver stocks are following their usual trends of driving the prices sky high and then pulling the plug. You will know when the bottom has been reached when you feel that you had wished you had never bought the stock and you feel it has gone down lower than it could be possible. At this point you are ready to give up but there is no volume in which to sell your shares, it now goes lower. Example a .30cent stock that has been driven up to to $3.00 and then in addition appears on Nasdaq ( entry into Nasdaq means the end is near as Canadian buying has dried up ) now drops to .30cents again, you feel this is it, that is when they drive it down to .10 cents and you give up and sell. Repeat the above for the next thrilling sheep shearing. A good book on the subject is THE GOLD BOOK The Complete Investment Guide to Precious Metals by Pierre Lassonde. He his the head of FRANCO NEVADA one of the most successful gold companies.
XAU/Spot Ratio = .232. The 50 day moving average is .252. My database contains 24 occasions where the XAU closed in the 67.XX range. Ranked according to the gold price, today is #18. Ranking #1 was on August 18, 1986, with a gold price of $376.40, an XAU of 67.55, producing an XAU/AU ratio of .179
IMF has shortage in cash now. You know the story - South Korea, Indonesia, last Russian deal, etc. There is no money left for emergency cases. Thats a news item. What if something is going to happened somewhere in South America? No money for help At the same time they have a gold reserve, and not a small one I do not want to say that they are going to sell now, or soon, but, IMHO, we have to consider this as a possibility, just a real situation I think, we shall see some more messages about this subject here soon
Kitco is slow today
EB seems to have some strong feelings about tossing the chicken bones. I also trust this method, but the bones are too greasy.
PS
I now am the proud papa of one blue Mockingbird egg with brown spots all over it. How many more will she lay? The nest is nestled in the fronds of my Sago palm. The mother bird still looks at me with a wary eye, but I think she is warming up to me. Maybe some birdseed near the nest? Yes, this will gain her confidence. Food always does that. Works well on me.......
While I am very skeptical of the Vancouver Stock Exchange in my opion these two companies are among the better Vancouver stocks and will make you a lot of money if you buy at the right time.
clone, Namaste' I do thank you for the concern...I say this...the Jack's Ass that
occupies the house of the American people is a pathetic little street criminal, his wifea nothingno more no lessthe scum that pretend to know but speak not for justiceJanet and Louiehow sad, We the People put our faith in such undeserving vessels of worthless flesh
I fear nottheir files and the rest of the hidden are open to allI especially want a grievance filed with Jacks ass of a judge in CanadaTRULY I WANT THISanonymitymy American ASS
Kevan S. Khanamirian
291 West Shore Drive
Huntington, NY 11743
Its enough already
And this Jacks ass wants to subvert States RightsCoward Erect...what a pissant...nuff said...uh huh....
A gulp to all...of Cuervo...between now and dinner I shall read more from:
For those reasons u elaborated upon today re fwd selling, I refer to one
one of ur previous posts whereby basically u stated-in ur opinion of
course - to get the hell out of stocks as I recall around when gold
reaches 400/oz & subsequently into physical. Ur shortened version wud
be appreciated. Thanking u in advance.
All: Have a look. This is not going away.
http://www.drudgereport.com/gertz.htm Also: Looks like the White House is pulling out all the legal stops to prevent the Secret Service personnel from testifying, even after the legal decision in favor of Kenneth Starr. Didn't know you could squelch a subpoena from KS. Just how many lawyers does WJC have, and how many of them are on the Federal Payroll? I'll bet that WJC's legal bill is comparable to that of Kenneth Starr, and I'll also bet that we are indirectly paying for all of it.
Come on, Delpi-baby, THERE IS NO *MONEY* anymore. The IMF can pres a button and create as many electronic slave-debt dollars they need.
We ALL need to disassociate honest money from the magic numbers that the banks use.
What the IMF really fears is either the BIS or the FedReserve shaking their finger at them for instantly expanding the supply of magic number "money" or pushing the world that much closer to the repudiation of the US Emperor's New Dollars when all those magic number dollars pour into the debt holes of Southeast Asia. God forbid: THEY might start buying tangible things instead of shoveling their life's labour into worthless dollar accounts or the American stock market. Then we'd see some real fun hyperinflation in tangibles.
http://www.imf.org/external/np/exr/facts/gold.htm If I scrape all the veneer off this golden warchest, does this tell me that
the IMF is the only global gold-backed currency standard in existence, and
that a collective IMF decision has the effect of revaluing gold at its
convenience?
Bufford, Namaste' Amigo...Silver Standard is having what seems to be problems,
they are an excellent buy...I must tell you as I have mentioned to Lock&Lode...CLIFTON MINING...uh huh and FIRST SILVER RESERVE...UH HUH... these then are where the peasant from Cuervo Central of the Island that is Long is planting hugemungous amounts of his share buying capabilities...
Gold dancer@Farallon is another of Bob Bishop's recos that turned out badly
I followed it up until around 1 yr ago. They were involved in litigation & I don't know if that was ever resolved. The problem with FAR,BGO/AZS
CTQ & all his other recos is that they were recommended when POG was well over 360. There is no way IMO that any of them could ever be profitable with current POG. If I remember correctly FAR has fairly ggod grades of copper that they were counting on to reduce their costs. As you know the price of copper has dropped precipitiously.
I was lucky with Bishop because he was on a lucky streak in 96 & I cashed in with BGO/AZS, Diamondfields & even Bre-x. In 97 his luck ran out with the jrs & so did mine. He recommended CTQ all the way down from 19 to 4. That was when he blew all his credibility.
I would only consider the jrs as short term trades because the vast majority won't even be around for even the medium term.
@ Caper: In reference to selling out of stocks when/if gold reaches
$400 per oz, this is my exit strategy. We all expected gold to be
moving up by now. Most of my positions were taken back in Dec-Jan
when gold was 285-295. Well here we are again! The idea was to
use the extra leverage afforded by stocks to provide the cash to
buy even more physical ( which lags behind the price appreciation of
equities ) and thereby have a good physical nest egg to weather
the Y2K/depression/stagflation thingie, whichever.
The most interesting aspect of physical gold is it's the ultimate
hedge.
If we go into deflation/depression, gold is best.
If we go into hyperinflation, gold is best.
If we go into stagflation, gold is best.
If we really are in a new equity paradigm, and the DOW is headed
to 30 000, we shall all eat our pm investments and die of heavy
metal poisoning. But I don't think so IMHO.
The trouble is, the DOW is not tanking, and time is growing short
to squeeze in a decent gold bull between now and the millenium.
At the moment, I am thinking of liquidating only part of the
pm stock portfolio, and hoping my broker is Y2K compliant.
( I will freeze my account and get a print out in Dec. 1999. )
@ ALL re GOLD LEASE RATES: as you know I have a special interest
in lease rates, and I continue to learn what I can about them and
pass the info on to the group. I have a question about how the
rate is calculated. Most of us appreciate how critical leasing is
in the patterns of the POG, but how is the actual lease rate fixed?
About 70% of all CBs are in the leasing business, but how do such
a scattered, diverse menage of institutions ever arrive at a
consensus about how much they should charge for lending out their
gold and other pms? Anybody know?
The FAT ( file allocation table ) keeps track of where on your disk all the various pieces of a file are loacated so as to make up the whole thing. The 32 bit FAT system allows files to be broken up into smaller pieces even on a big disk than the 16 bit system. Files can be transferred from a 32 bit FAT disk or partition to a 16 bit FAT disk or partition any number of ways.
The problems that occur happen because some older programs which did their own disk access assume that the system is a 16 bit system and run
into problems when trying to read from or run from a 32 bit file system.
The 16 bit FAT gives faster performance but wastes disk space.
RJ - re your 16:49 on 32 bit FATs
Macs have had 32-bit drive addressing {HFS+} for several months with OS 8.1. The allocation block size ( or cluster if you will ) is 2K on several gigabytes. New versions of driver software should take it down to 512 bytes per block. We have NO PROBLEM reading older "16-bit" files or zip, floppy or hard disks formatted with 16-bit addressing. Drives formatted with the 32-bit HFS+ can not be read with older Mac operating system versions {which are 32-bit except for the hard drive formatting}. Thus the new Mac OS8.1 is backward compatible - unlike, it seems, Windows 98's 32-bit FAT. Off topic - but I couldn't resist the comparison.
BACK TO SILVER - from earlier posts by RJ, FOX-MAN, et al
Is there ANY precious metal that is NOT be manipulated!
From the Platinum Group:
How about Iridium, Osmium, Ruthenium, Rhodium, or Rhenium?
I think we are seeing a gold bottom of Biblical proportions due to
top in US economy/power of same proportions. It is always darkest
before the dawn but this time it became pitch black at midnight!!!!
I'm pretty tough but this gold market has gotten me down and beat up.
I think Farallon is a survivor and legal matters about over. Own
some at $4.50 and plan to buy more tomorrow.
Allen, Well, you guys looked like you needed cheering up today! As for silver I will buy some if it goes to $4.65-$4.80 range. And I won't sell until I retire and make it into trinkets, baubles and bowls. No pepper divination here, just my long term plan, like W. Buffet's but on a much smaller scale. ( He's so rich he can hire a guy to eat peppers for him. )
R.J. IMHO a foot or two of sheet metal flashing wrapped around the tree trunk may reduce the cat hazard. Been there, done that. Never tried divining with chicken bones, but this may be a West coast variant. Do they eat chicken livers there? IMHO
On another note, I saw my oncologist today. He told me all is o.k. for another 3 months or 30,000 smiles whichever comes first. ( 8-^ ) )
Rhody -
Lease rates are a function of supply and demand. There is no set formula. Whenever the market perceives physical inventories getting tight, lease rates rise. If liquidity continues and the market will bear higher rates, they will rise again. Witness the 200% + lease rates in palladium a few months ago. Lease rates hit 30% for platinum in last years squeeze. I dont ever recall even double digit rates for gold, too much of it about.
There is no cabal setting rates. Like interest rates, each bank raises or lowers their own rate, which may be a unilateral move or following a competitors lead.
Allen ( USA ) -
SLF sell at about 60 cents over spot. Bid is about 30 cents over spot.
Here I am running Windows 95 and Netscape..right..works great.
Now I decide to install MS Visual C++ ( Prof Ed..ver 5 ) ..cause I teach this stuff...REMEMBER...Install MS Visual C++..
well...the installation cd notes that I do not have explorer installed and "it needs some of its components" and wants to install it for me first...well ok...I won't use it...I use netscape...so it puts Explorer on and then installs visual c++ ... sounds good until...
When I click on Netscape to check Kitco...a message comes up that says NETSCAPE IS NO LONGER YOUR DEFAULT BROWSER...huh?? and asks me if I want it to be my default browser ( thanks Bill ) ...I say yes and away I go. End of story....every wonder how Bill made his Billions?? Yeah.. the old fashioned way..NOT..
As stated the other nite, it appears to me that the negative comments re POG on Kitco are the most bullish thing to come along since Christmas, I will be acting on that tip by covering half of my short positions on opening tomorrow considering the past two days action on Comex, with orders to cover the other half at 301.40 or better close only. Not prepared to go long until 318.60 on clear breakaway and only with short stop. I have put my gut feelings on the line as usual, recognizing that the little man is always wrong, and am certainly not recommending that you do what I do..
But that's not really what' on my mind tonite. For starters, I am not political -- I profess no party nor individual preference. I can only state that I wouldn't want Clinton for a son-in-law, which is a personal preference not a political statement. However, I have not seen any reference on this site about what replacement person might be good for POG...Our current Texas Governor, the honorable George Bush, Jr., seems to be leading the pack on GOP rosters, and Demos seem to have a duke's mixture to choose from. Any comments re Bush, Jr., for Pres cause it looks like he could be frontrunner? Any predictions for POG under that scenario from the politicos on the site?
Use to live with a Chinese girl way back when I was in the army. She could cook like no woman I have met since. Chinese food the way Chinese cook it. I even picked up some wok skills myself along the way ( I have a chicken broccoli thingie that is way good ) . She would cook things that I could not recognize but I would eat them all the same and would very rarely be horrified when I later found out what it was I et - except once..
There is a dish, consumed in many parts of the world, made up entirely of chicken hearts and livers. Thats it. No vegies, no watercress, no almonds, nada. Just this big bowl of hearts and livers all jumbled up and jiggling slightly.
Not wishing to offend, I ate one heart and one liver. Each took several minutes to chew and all that mastication was to little avail, so I ended up just swallowing the semi chewed hunks of organs whole. These were the last hearts and livers I have consumed. This record has stood for more than 15 years, and I intend to make this a lifetime goal.
Regarding a metal that is not manipulated, I had a Silver Maple Leaf in my pocket today but I got an itch in the nether regions which had to be accessed via the front pocket. The same pocket the silver coin was in. Does that count as manipulation?
The source of my statements and beliefs per the direction of the Dow and Gold stem from 40 years of observing the baby boom phenomena. Back in the 50's the great hue and cry was elementary schools. They couldn't build em fast enough and every local paper was filled with doom and gloom about the crisis in elementary education because of the lack of class rooms. They built elementary schools at a feverish pace trying to keep up with the baby boom. I can take you in a 100 mile circle of where I currently reside and show you 20 or 30 abandoned elementary schools. They have been converted to box factories, hay storage or otherwise abandoned. In the early 60's the great crisis was in high schools. I remember being on a committee to oversee a new multi million dollar super high school in the midwest. I accidentally came across some demographic reports that showed the new school would be 50% empty in a matter of a few years as the pig passed though the snake. No one would listen. High school class rooms would be needed in ever growing numbers forever. There are a lot of half empty high schools in existence from those days. By the late 60's and early 70's the crisis had passed through to college. Every paper and magazine in the country was full of articles about the shortage of college class rooms and teachers. Kids would be denied a college education because they would turning them away in droves. Now the colleges are fighting tooth and nail trying to keep enrollments up. By the late 70's the great shortage was housing. Couldn't build houses fast enough. Real estate went up and up and up and up. Everyone either has done or knows someone who bought a house for 9000, sold it for 28,000, bought another and sold it for 50,000 and so on. My wife bought a house for 56,000 and sold it for 112,000. This too would go on forever. Or so they said. It didn't. Real estate has been pretty dead since 1986 and a lot of people were underwater for years after the bubble burst. What does that have to do with the price of the Dow and Gold? Well, it's the same thing all over again. The baby boomers are distorting our finacial markets exactly like they did everything else for the last 40 years. Right now they are in their peak earning and saving years. Every pay day the 401-k money is funneled into the mutual funds. Every week the fund managers scratch their head and decide what to do with the billions. With everything so over valued they do the easiest thing. They plop the billions in index funds and go play golf. The thing has taken on a life of it's own. No matter what the news the market goes up. No matter what the valuations the market goes up. Nothing matters just the countless billions pouring in weekly. Add to that the fact the tax laws favor stock buy backs instead of dividends and you have more and more money chasing fewer and fewer stocks. I hear all this talk on Kitco about the Plunge Protection Team. The PPT. Hell, there ain't no PPT. Every time the market drops a few hundred points the fund managers stop their golf game long enough to call in a buy order and the market goes back up. Up until very recently the stock market was controlled by a few thousand investors, maybe a few hundred thousand. When they got panicky and sold off the market went down. When they got depressed and sold off the market went down. When they didn't like the foreign outlook they sold off and the market went down. Now every time they do that the 800 lb gorilla mutual funds plop a few billion in buy orders and the market goes back up. I daresay every individual owner of common shares in america could sell out and the market would still go up because the mutual funds are so big and powerful. If you believe any of what I have just said then you must also assume this will last until the boomers have passed through the pig. That brings us to 2008 when the first of them turns 62. That will be the day the tide starts going out. Ok, that's my theory on the stock market. The record since 1982 bears it out. Now we get to gold. The US went off the gold standard back around 1971 if my memory is correct. We had one last run up in the price of gold that followed the raging inflation that took place in the late 70's early 80's. I was a Firestone store manager back then. We used to get annual price updates for the master book. Then it got to be twice a year. Then it went to quarterly. At the end we were getting montly updates telling us to use the current price list and add so many per cent because of price increases. Everyone was sure it would go on forever. It didn't. Gold has been going down every since and will continue to go down until something changes. That something is inflation. I don't believe we will have large scale inflation in the forseeable future for two reasons. The boomers are pouring all their extra money into the stock market which will hold down consumption and cheap imports will do the rest. Didn't have much in the way of cheap imports back in the 70's. Ok, if we agree we are going to have low iflation because of limited consumption of goods and high savings rates then I see no real meaningful rise in the price of gold. Factor in the complete demonitization of gold as money and you have a commodity in great abundance with no innate industrial usage that will be a glut on the market for years to come. Or at least until the next pig enters the snake. In any event that is just one mans take of the situation.
Your 18:02......I have made great offerings to the god Peyoteous so that he may bless you...and I know he will.
( gulp&puff ) to YA! ;^ ) ~ ( cough ) ( COUGH ) .....whooooooaaaa.
Oh, how is "owning gold" and "having third-stage syphilis" the same? Let me ponder the ways. ohmy. hmmmm. what a way to go.
JOHN CUNNIFF: Is stock market disconnected from reality?
Copyright 1998 Nando.net
Copyright 1998 The Associated Press
NEW YORK ( July 14, 1998 7:39 p.m. EDT
http://www.nandotimes.com ) -- It's a strange feeling for analysts, newsletter writers and others who claim to know where the stock market is headed. An odd feeling, because people are paying so little attention to them.
Not to be listened to and cited in the media is an insult to members of the forecasting fraternity, whose persona serves to personalize their otherwise bland institutional employers.
It's because, they say, the marketplace has decoupled or disconnected from the hard realities in which they deal, such as corporate profits, pricing ratios, interest rates and the overall economic environment.
While forecasters might never say so, their subtle suggestion is that the marketplace has gone mad, ignoring the weakening in profits growth that underlies prices and which must eventually make an impact.
But, except for an increase in volatility, the market has so far resisted any pronounced or sustained impact. In fact, what weaknesses occur seem more often than not to be viewed as buying opportunities.
On the surface, at least, the decoupling is a consequence of the huge growth of mutual and pension funds, the rising level of affluence, the fear of being left without retirement funds and, as usual, a bit of greed.
Whereas once upon a time the marketplace was made up of random trades, a conduit of 401 ( k ) s funnels money directly and regularly from paychecks to stocks, and mutual funds gather in cash that once went into banks.
The conduit is as real as the Colorado River aqueduct, moving funds from the source among individual investors to the stock market.
Call these funds middlemen or packagers if you like, because that is what they are; and in that sense they are a buffer between individual investors and stocks, an intermediary to do the choosing and worrying.
All this departs from the strict meaning of "decouple," which originates in railroading and refers to the separation of cars from each other or from the engine hauling or pushing them. So back to decoupling.
Unless braked, a decoupled car rolls on, free from restrictions and order that control towers seek to impose on it. Who knows where it chooses to go or how its journey might end?
Freed from the chores and worries of analyzing individual stocks by the funds that make decisions for them, investors needn't study balance sheets and anticipate profits or worry about Asian economics.
They just send their money through the conduit and let someone else do the worrying for them. It's a departure from the way markets used to be, but so far it has worked, attested to by the high stock market numbers.
Billions upon billions of dollars are added each month to the more than $5 trillion total of all mutual ( stock, bond and money market ) funds, and the market defies the old price ratios.
Some people say it is a new era. And some say the market is decoupled from reality.
Have just read USAgold's Daily Quaotes and Market Report. It appears they have become a little sensitive about a few posting on here in the last 24 - 36 hours.
I am not a politico on this site but I am from Texas and I offer you
the following comments on George W. Bush for president.
He may be the frontrunner for the GOP for good reason. They need
another mealy mouth status quo puppet for furthering thier agenda.
He fits the bill just like his dad. Gingrich and company need him
or someone they can twist around thier finger. As far as the POG
goes,dont look for any drastic changes under a new GOP administration.
Remember, the powers that be at the Fed are all status quo market
freaks and dont want to upset the apple cart. By the way,I am not
a democrat.
The Nasdaq closed up 26 points today and the Dow, S&P and the Transports closed lower. The Dow confirmed the highs in the other indexes, but the Transports and the A.D. line failed terribly. When the market Dropped 36% in 1987, the A.D. line did not confirm the highs in the Dow. Now you have the same thing, only the Transports didn't confirm the Dow's high either. ..... GEE.......... I think I'll go buy some over the counter stocks right now.
If you look at the Decision Point chart at AOL, of the XAU index, it has broken the down trend line and is holding above it. Gold and Silver should begin to move up very shortly. If it has a last sharp decline from here that should be about it. The bulls will most likely throw in the towel. Our front page today declared that inflation is OVER. Is that a bell I hear ringing?
I must offer that Mr. Mike Kosares, owner of USAgold, is a good and fair man. I have enjoyed my "considerable" business dealings with him. I trust his word, his intent and his action.
I keep thinking that Fred Thompson, politico/actor/
commitee chairman seems a straight shooter, and would
be a good pick as Pres. or VP.
As WJC & HRC & Gore have shown, image is everything.
Straight shooter image might be good for POG.
Trinovant: Your humor about how to decipher the mysteries of the Gold markets and Central banks reminds me of a book series, and a great series on BBC. Do you have any relation with the author of the above? I loved his convoluted logic.
MOSCOW -- ( Reuters ) Russia has worked out a procedure for using its reserves of the precious metal palladium as collateral for raising money quickly in an emergency, central bank chairman Sergei Dubinin said on Tuesday.
"We have taken certain measures, worked out a mechanism and agreement on activating our metal reserves, not only of gold, which is easy to do, but also collateralizing other metals, in particular palladium and silver," Dubinin told a news briefing.
"All this has been done in agreement with the government and the president, and clear limits have been laid down -- how much we can use palladium, for example, as collateral, and for what period," he added.
Dubinin said using the metal as collateral would enable the bank to top up its hard currency reserves quickly in an emergency, although he said the bank was now selling rubles and buying hard currency from commercial banks, which he expected to continue.
Palladium reserves are not included when assessing the value of Russia's gold and currency reserves. Dubinin emphasized that the collateral strategy had been carefully worked out so as not to destabilize the palladium market.
Palladium production and exports in Russia are a closely guarded state secret.
But a senior manager at the industrial group which controls Norilsk Nickel told Reuters recently that world palladium demand was around 450 tons a year, against supply of 225 tons.
Palladium prices reached record highs of $417.00 an ounce earlier this year as Russia, which accounts for some two-thirds of total supply, has kept the metal off the market.
On Tuesday it was fixed in London at $295 an ounce at 1400 GMT.
Some palladium sponge has been sold, but contracts for palladium ingot sales have apparently not yet been signed. Persistent bureaucratic confusion has been blamed for Russia's failure to deliver stocks to markets.
The metal is used in car exhaust catalysts and by the electronics industry. ( ( c ) 1998 Reuters )
@ RJ: Thank you. It's nice to know that lease rates are arrived
in a fashion similar to the fixing of gas prices at the local
service station.
Lease rates are now 1.01% ( up .01% ) for 1 month gold and have dropped to
1.81% from 1.91% for 1 year gold since this morning. Forward rates
for 1 year gold is up to 4.00% from 3.90% These rates are not
unusually high as forward rates were over 6% back in 1988, with
gold at $400. But this may have been before the gold carry trade
was firmly established, and inflation was much higher.
Bufford's Penoles post; You might find it bundled as an ADR ,however a severely undervalued play
majority owned by Mexicans is RDMMF on the NASDQ, formerly KNVCF:Consolidated Nevada Gold Fields now,the majority stake, owned by their former partners ( and mine owners ) ,Mexicans National all.Like all other juniors, very undervalued even at book. I've owned them several years off and on and things couldn't look better ( save number of shares ) for the company: stock is in strong hands save a few traders and they are solving their problems casually. Current new company name is Rio del Monte Mining and if silver moves, it'll take'em along for a ride. As for Penoles; I havent followed them for a while however I entreat you to have a close look at the two;realize that rdmmf is currently an extreme dark horse and a bargain if ere one shone, I personally own 1500 shares: before the reverse split,15000 @ about.87 cents US.,no ego here but I'm still holding.......
I accept Mr. Kosares intentions, however I thought the threat of legal action was a bit over the top.
I too have become a bit disillousioned with USAGOLD's rumours. In their defence, they always did say that they were just 'rumours'. However when you get ANOTHER 'rumour' every other day and the vast majority are false you tend to turn off. It is 'the boy who cried wolf' syndrome.
I will however continue to read their Daily Quotes page.
The decline in the Gold price since late 1996 was related DIRECTLY to the announced sales/buys of Central Banks.On each announcement,the funds and the traders and god knows who else whacked gold bigtime and used the press to bring on the " Gold Is Dead " theme.That continued throughout 1997 forcing many miners to add to the downward " pressure " till we find ourselves where we are today.The inflation/deflation...Asian..Japanese..strong dollar..babby boomer..stock market..everything is beautifull in America...mantra.... touted by the shorts...is nothing more than an illusion set up keep Gold at it's current level.Actually...the traders are quite a humourous in their attempts to justify these trading ranges,and very predictable,I might add.As a matter of fact..it appears they have even suceeded in convincing the hard core goldbugs that such is the truth.Very well archestrated.
What brought the gold market down,will have to bring it back up.Doesn't anyone else find it odd that the market commentary shifts it's position at will on any given day from supply and demand..to cost in certain currencies...to.....whatever is the mantra of the day..... to justify a gold price at all time lows...for a record period of time?Unprecidented scenarios seldom exist for very long unless there are alterior motives involved by very powerfull entities.Those entities are the Central Banks.I suggest...unless you are trading these narrow ranges that appear to be between 290 and 300,you may as well just... " go for soda ".Gold will rise when the Central Banks decide it will and not before.Till we get complete clarifiaction from the ECB on their Gold holdings and future sales or loans...were are stuck right in here.PERIOD.
That's all she wrote.I did like your post though.Thanks
Squirrel: No offense! I thought of you when I posted the great NorthEast Blackout bit. Didn't see that culprit in your Squirrel mug shot photo library! Wouldn't have made much of a photo anyway by the time he ( she? ) was discovered. By the way, I never did believe that story, anyway. I really don't know if the cause was ever resolved. Perhaps it was a bad rap, and he/she was innocent. Got the chair ( electric ) anyway. No trial.
I do know at least one blackout in the last 20 years was solar flare related. And -- guess what? Our solar flares will probably peak close to or just after y2k. And -- electrical surges are especially bad news for sensitive silicon chips, either in orbit or on the ground. We sure have alot more of them since the last session of major solar flares. So, we could have an electronic dollar wipeout even without y2k. I'll bet that with the deregulation of utilities, and the sale of nonlocal electricity over the power lines, that our electrical utility grid is even more vulnerable to collapse that it was in the fall of 1967 ( approximate date of great NE blackout ) .
I read the USA gold thingie and can find nothing with which to disagree regarding reporting rumors. If they are mad at me for my post of Monday which reads:
"Regarding USA Gold always being wrong
This is not true
I just visited their site
The date is correct
As are the prices
The daily comments
Are a never ending sales pitch, yes?
Not very skillfully done
In any case
Is speculating that the ECB will "issue Euros to buy District CB gold"
In this it appears he is trying to insist that gold will not be sold for dollars.
For a friend of such a highly placed messiah, his facts are a bit muddy.
All gold is sold or bought in dollars. Everywhere and always.
Period.
Then an exchange is made into whichever currency you choose.
When a commodity is universally traded in one currency
It will forever be inexorably tied to that currency's fortune."
Well..
Than I wish to apologize for hurting their feelings. Perhaps some confusion is raised do to an omission on my part. Paragraph two should start, "The Friend of ANOTHER is speculating that the" Although this is implied in the balance of the paragraph, it is not clear because of that omission. I did however report this as a "speculation" which should satisfy USA golds attorneys.
Regardless of whether this was reported as a rumor or speculation or whatever, gold is traded universally in US dollars. Reporting this speculation was disingenuous when it would require a worldwide change in the way gold is traded. Since no mention was made of this enormous undertaking, I assumed the FOA did not know that Euros will buy no gold until they buy dollars first. In fact the slant to the passage implied that this could be done. I felt it prudent to point that out that it could not
As most here know, I write the weekly PM review for the Monex web site. This stuff has to be approved before it is published. Rumors are sometimes the only hint you have about what is going on in the market, and all are reported as such. Factual errors or a particular bias have no place in "reporting". Further, I have read their daily reports off and on for months. While not as enthusiastic as golden eagle, the gold bias seems to overwhelm market realities quite frequently.
This said, their advice concerning risk is sound. Their advise to buy and hold long term is sound, provided it is a reasonable percentage of ones portfolio. Their prices are good, and they perform a good service on the Internet. I Guess I just have a yearn for more balance.
The origin of the "defensive" posture that Mike has assumed traces back to remarks posted by LGB some time back. This dispute escalated to an uncomfortable level. However, it was kept invisible to Kitco posters.
I am sure his current remarks are made to "nip in the bud" any present or future disparaging statements that he may view as negatively affecting his business.
Could be the heat will upstage the market? We gots world-wide record heat for the past six months. What then is it?
The whole earth we are talking, not just Texas.
Spock: I'd love to have one in the back yard -- just in case. Or, perhaps the Bistromath drive would be a better one. Y2k or general disaster insurance. I'd also like the luck of the characters, such as Harry Dent, or Ford Prefect, who had the uncanny ability of constantly being saved from certain death.
There is a lot of similarity between these characters, and the feeling of helplessness in our current world, that we are being swept along by natural events beyond our control.
The nice thing about those books is that the hapless ( and helpless ) hero ( Harry Dent ) always seems to do ok anyway.
I must admit that one of the best stories was when Harry Dent met God face-to-face in a shack on a deserted planet, and found that God could not remember anything he did. And that was fortunate, because then no one could ask God what he planned to do, or accuse him of favoritism.
Between the article posted by 3-cubed and the commentary by Bill2j I have plenty to think about in the next week. I think the two posts are very related.
Bill2j - Your insight into the baby boomer generation is very thought provoking, but I remain convinced that we will be seeing major inflation in the US well before your 2008 senario. US debt levels are too high. The US can only print its way out of these careless obligations. However, I also see continued deflation for the short term. Perhaps the net effect will pan out to prove us both correct.
3-cubed - Did you also read the no-brainer at the same site?
George_A: The sun is hypped up, but it is the normal sunspot cycle. The solar constant rises and subsides in direct proportion to the number of sunspots. The heat we are experiencing is probably from the ElNino, however, about to be replaced by its cold counterpart, La Nina. As far as I can tell, however, there is no clearcut evidence that the LaNina will give us cold winters this year or cool weather next year, except possibly in the Northwest. Also, apparently the Calif coast can have floods with the LaNina and with the ElNino.
However, SEAsia will soon be cooling from the La Nina -- already started, as I recall.
It is interesting that the forrest fires first began in SEAsia, and have moved to South America, then Florida and now Georgia. There may be more significance to this than what what is stated on the official websites. For example --economic activity may be linked to the ElNino/LaNina cycles.
November Decision of Surplus European Gold Reserves.
Strasbourg--Jly 15--European Central Bank President Wim Duisenberg said
today he expected a decision by the ECB's policymaking council on
guidelines for member central banks' gold reserve policies by November.
"The ECB will have an important say on European Monetary Union central bank gold policies," Duisenberg told Bridge after giving testimony to the EU parliament here. By Lita Olbrich, Bridge News, Story .13807
The author is Douglas Adams. He has two very funny, and very profound recent books about Dirk Gently who runs a Holistic Detective Agency. I have seen Cherokee quote from these books. The Hitchhiker trilogy was delivered in five installments so there is nothing preventing a sixth.
Adams has also written a book with Terry Jones from Monty Python called "Starship Titanic" that takes a small piece from the Hitchhiker series and told us the rest of the story. Remember the starship filled with hair dressers, insurance salesmen, and telephone sanitizers who crash landed on ancient Earth with Arthur ( its Arthur Dent, by the way ) and Ford? Ever wonder what became of them?
Spock: Thank you. I was thinking of the economist, Harry Dent. I try always to be truthful -- part of my training as a physicist. Live long and prosper -- the words uttered by a character more logical and analytical than I. Better actor than William Shatner, and a better producer, too!
Harvard studies show from ice cores & tree rings that the energy output of the sun fluctuates by 15% over the course of 300 year intervals. In fact the dates of these cycles correspond real close to Armstrong's Economic Confidence Model or 309.6 years. The 1700s were extremely cold. Washing crossed the delaware river when it was frozen over. That hasn'y happened since mid 1800s. We are most likely moving into a major high in sun energy output leading many to misread it as man created global warming when in fact its been going on for millions of years. The Delaware River will most like freeze again between 2200-2300. Thank God I won't be here. I hate cold weather.
Bill2j: Great post! (But I beg to differ on the outcome)
I wholehearted agree with your analysis up to the current time... Billions of $ pouring into mutual funds via 401k, IRA, and even savings. And I don't believe that will change quickly, BUT.
Here is where I differ from your 2008 date:
I think the folks who own those 401ks, IRAs, etc. are mostly white-collar. They watch the stock market and gleefully read their quarterly reports from their brokerage firms showing 10% returns. Along comes the fear of Y2K. These folks are computer literate; they know it's possible it could be as bad as some say. Then the media gets really involved, you know, the typical worst-case news that the media loves because it makes people listen? So now it's Q2 1999, the media is howling about Y2K, and these investors are saying, gosh, I'll just pull my money out now, and be safe. Besides, my 10% returns haven't materialized for the past 4 quarters. One quarter of a sharp drop in the DOW, coupled with the media-induced Y2K panic ( the media LOVES panic ) , and everyone wants out. But as we all know, everyone CAN'T leave at once. There's your crash. At first it'll be slow, and I maintain it's already beginning to happen, but as the average investor sees red in his quarterly portfolio report, more will follow. It'll become a flood. And I'm guessing it'll happen by early next year. Late Q1, maybe Q2.
FWIW, IMHO, and all that jazz
Regards,
MG ( Go Gold! ) ( So long, and thanks for all the fish )
RJ: As I recall, the 'B' Ark was conveniently lost from the main fleet of space ships escaping some natural disaster. The 'B' Ark denizens were the telephone sanitizers, and the hairdressors, and were hoodwinked onto a wild goose chase all over the galaxy. They crashlanded purely by accident on 'Deep Thought', our planet earth/supercomputer about 2million years or so ago. Alas, they are our ancestors. No wonder our planet is in such a mess.
As I recall, the other spaceships continued to their planned destination, containing all of the smart members of that race -- engineers, scientists, etc. Unfortunately they all died from a virulent infection picked up on a dirty phone. Poetic justice, I guess.
I really liked the bit about the multidimensional white mice that let humans experment with them, so they could study us. I think they were the custodians of Deep Thought.
Gold--More Rather Than Less, Sooner Rather Than Later
I read the threads at Free Republic. There are some parallels with Kitco. The stated goals of Free Republic are to expose the corruption and criminality of the Clinton Presidency, and to restore Constitutional government. The goals of most on Kitco seem to be to expose of the corruption and criminality of paper money, and to restore a sound monetary system based in some way on Gold. The emotions at FR on Clinton's ups and downs are similar to Kitco when Gold threatens to make a big move. My own theory is that the POG is inversely proportional to Clinton's strength. When Clinton tumbles, Gold will surge.
Your post at 20:00 was pure and simple logic at it's very best. The
argument that you made seems impossible to refute.
It would be interesting if you would also take into consideration what
the effects of a serious Y2K problem will have on your scenario.
Also it would be of interest to know what you think about the Euro
and the competition that it will bring to bear on the US $ as the
World currency.
Then if you could put your very excellent logic to work regarding
what can be done to stop the rest of the World that has devalued
their currencies from importing cheap goods into the USA while
being totally unable to buy anything from the US at current prices.
Russia, Asia and China are in a very serious economic situation. How
is that going to factor in with your theory of a continued market boom
for US securities. These countries will no longer be able to afford
our goods.
If profits drop, for US Corporations, due to the inability to compete
with overseas wages, how will the US stock market continue to move
ahead. If profits drop there will be retrenchments. The US citizen will
be buying goods from overseas Supporting the workers there while at
the same time suffering from unemployment. It seems to me a cycle
of diminishing stock market investments would be the outcome as
workers here are laid off. Wouldn't that cut the flow of 401K invest-
ments? Is it possible that water will find it's level?
With no other factors involved, the scenario that you paint may very
well be the outcome.
Your post was excellent. I salute you for your straight forward logic.
Please consider these other things and give us your input.
jefsilver_7: Have a url for that reference? I think you are referring to the Sunspot minima -- such as the Maunder and Sporer minima when sunspot activity was unusually low or absent.
I am very interested, because I have not been able to decipher the longer than 22 year cycles -- for example, there is much disagreement about whether we are entering a long term warming or cooling period, just based on solar activity. These longer cycles may be relevant in our lifetimes, if their unraveling allows prediction of the level of future sunspot activity, which is fairly variable for unknown reasons from cycle to cycle. You may be interested to know that the Farmer's almanac has been fairly successfully using these cycles long before it became a popular topic of discussion in scientific circles, but they will not tell you the secret of their model. It is probably based in some manner on the Wolfe sunspot data, which goes back to about 1750.
but the Baby Boom was basically a North American phenomenon. The Europeans had a Mini-Baby Boom, but nothing like the North American one. The Baby Boomers piling into equities via their mutual funds has worked for them because they've been in sync with trends in the world economy- so far.
I'm not sure the Baby Boomers are a big enough force to overwhelm the influence of the rest of the world, though. If the tide turns and trends to competitive currency devaluations and deflation overwhelm the US economy, I don't think the Boomers could pour in enough capital to keep the economy afloat. If earnings forcasts for US companies go negative and the Boomers start to loose money- look out! A stampede of frightened Boomers all trying to get their money back from their mutual funds could turn into one of the defining moments of the century- on a par with the 1929 crash! Fortunately the SEC has provided an escape mechanism for the mutual funds that will inflict a fitting reward on the lemming-like Boomers. During a "market crisis" the funds are permitted to reimburse unitholders requesting redemption with shares rather than cash. Heh, heh- Mr. Joe Boomer calls up his fund frantically trying to cash in his units as quickly as possible, before all his friends do, and then gets a notice in the mail that he is the proud owner of 10,000 shares of IBM- or whatever other portfolio dog the fund is unloading, and then he gets to take them to a broker to try and liquidate them- before all his friends do.
I am not knowledgeable about central banks and how they operate but I have one whale of a hard time seeing how they profit by it if they are in fact doing what everyone says they are doing. I don't have a calculator handy but If I understand the story correctly it goes something like this. I am a central bank president and I have umpteen ounces of gold in my vaults worth $400 and ounce. I start lending it out at dirt cheap lease rates so that I can drive the price down to $300 an ounce and hold it there. I have just reduced the value of my stockpile of assets by 25%. The mining companies I have no problem understanding. They make a future sale now which gives them current cash flow. They must assume the price of gold will be cheaper in the future or they wouldn't do it. On the other hand they may just simply need the cash now. In any event a bird in the hand is worth two in the bush. The shorts are just doing their job as an investor. Had I been as knowledgeable about gold a couple of years back as I am now I would have shorted it too. In fact if we get a little summer rally before October I will be tempted to go short myself. At this point in time I just can't bring myself to believe the central banks are deliberately reducing the value of their own reserves. The mining companies and the shorts are just doing what they think best.
3-5 eggs is typical. If it stays at one it probably means that more were laid, incubation started and all but one were scarfed, by a rat perhaps. Notice that Momma sneaks into the nest, and stays very quiet. If you keep peeking and poke around the nest, you gonna bring it to the attention of squirrels, crows, ravens etc. Then you will have zero eggs. Momma will re-nest, but probably somewhere else. One more thing, don't put bird seed near the nest. Mockers don't eat it. You just gonna attract finches and sparrows which is gonna drive both Momma and Poppa nutz.
Auric: Agreed. We seek to shatter the lies/myths about 'paper' money credit and debt, by comparing them with gold. The gold standard. Unfortunately there is no gold standard for politics, but certain beliefs come fairly close -- the concept of telling the truth, the concept of not deceiving or stealing from others. If the general public wakes up to the lies about our currency, they may also wake up and see the political lies perpetrated by our leaders at the same time. The same propaganda machine is used for the promotion of fiat currency and political agendas.
I saw an interesting web site some time ago about sunspot activity and human activity. It seems that increased sunspot activity tends historically to correlate with times of increased human activity, and enhanced questioning of authority. I do not know what the mechanism is, but the observation is interesting nonetheless. We are in a period of increasing solar activity, which is likely to peak in the next 12-18 months. About the right time for WJC to have his crisis - pretty close to y2k.
Re mutual funds redeeming in shares, rather than cash-- Reminds me of Groucho Marx, another great economist, in Duck Soup. As president of Freedonia, he tells a guy, "Lend me ten million dollars and I'll give you this note promising to pay you back in 6 months. If I can't pay you back, you can keep the note."
most assuredly does exist! During the Oct. '97 market crisis they bought about $1B underlying worth of S & P index contracts in one morning! The premium shot up to 3,500 because of the lag between arbitrageurs noticing the purchases and placing their orders.
The PPT was proposed in 1989 by Robert Heller, who was a Federal Reserve governor at the time. He wrote about his idea in the Wall Street Journal in that year, but had probably circulated the idea within the Fed system, and to the Treasury Dept. long before that. You can read his article in the Oct. 27, 1989 issue of the WSJ.
The first time the PPT was used was during the 1992 election when George Bush used the Currency Stabilization Fund to buy S & P contracts to boost the markets, when recession was threatening. The Currency Stabilization Fund is essentially an Administration slush fund- the same one Bill Clinton used to do an end run around congress when he wanted to bail out Mexico in 1994. Clinton also used the fund to buy S&P contracts in 1996.
I SAW THE PRESENTATION BY A SALLY BALBINUS AT A CYCLES FOUNDATION CONFERENCE ABOUT 5 YEARS AGO. I DON'Y KNOW IF THERE IS A URL. PERHAPS WORTH A SEARCH OF HARVARD SITE. SHE COULD HAVE BEEN AT MIT, I DON'T REMEMBER.
Gold always purchased in US$s? I assume you mean as of late. Things can not change? Ask the British about the pound sterling. If memory serves me, gold was only purchased in sterling but a few years ago. The US$ will be replaced...the only questions are when and by what.
USA whatever didnt misstate it just disagrees with your mindset.
Actually I kind of suspect you may be right on the Plunge Protection Team. I read a synopsis of the events of the October 97 mini crash and there are enough strange things about the timing of events of that morning for me to be suspicious. But then on the other hand I have read enough things about how explosives work to make me question the Oklahoma bombing thing.
Germany is not going to accept taxes in Euro because of computer problems similar to Y2k. All EMU currencies are becoming fractions of Euros and the computer systems within Europe cannot deal with fractions of currencies. This is why the Euro is going through a transition period for 4 years. It will not even exist in coin or note form, only in electronic form until 2002. Also German government is being criticized for refusing to issue its government bonds in Euros until 2002. I think optimisim over Euro is not well thought out. Even if Euro replaced dollar, what make anyone think that gold would then rise in Euros? Maybe what a lot of people are praying for is a currency devaluation in US like what happened in SEAsia. Gold went up but at what cost to everone's standard of living?
Gotta sign off for now and hit the hay but tomorrow evening will expound my theories regarding the Euro, the yen and china. You gotta learn to never ask my opinion on anything as I have opinions on everything. I have a line on the bottom of my letterhead that states " When In Doubt Ask Crazy Bill, He'll Tell You Something".
Well, of course there are natural cycles that explain weather and climate much better than we puny humans and our global warming fiasco. Events of major importance ( volcanoes, meteorites, etc. ) are the only things that can shock us back to reality, with our smug egocentric view of the universe. The global warming is either ignorance driven, or by design, neither of which appeal to intellect and reason. Which begs the question, who is kidding whom?
Central banks don't really care what gold leasing does . . .
to the price of gold, because they have no intention of selling their gold. A few CBs have liquidated their gold ( eg. Canada, Argentina, Australia ) - but those banks haven't leased.
The CBs that have no intention of selling gold lease their stockpiles to get current income from it. As far as they're concerned it's an easy way to rake in 1% - 3% on an ongoing basis from something that would otherwise just sit there doing nothing other than eat up storage and security expenses.
Gold leasing is especially attractive to them because the gold remains on their books as an asset- even though some of it may have physically left the vault. Most central banks have to get permission from their respective governments to liquidate gold, but since leased gold stays on their books, they don't have to go pleading for the indulgence of their masters- in fact the government is pleased that the CB has earned a better profit.
There ain't no free lunch, though, and where Murphy's Law may get the CBs is in the form of defaults. Most leased gold stays in the vaults and is represented by pieces of paper purchased by shorts, but many commercial lessors take physical delivery, and are expected to repay in metal. If this gold leaves the vaults and the lessor then goes bankrupt, the nation's gold reserves have declined by the amount that left the vault. If economic crisis should precipitate the bankrupcy of a lot of commercials, there might have to be embarrassing writedowns by the central banks.
Thanks for the info on sunspots. I worked as a programmer for a very successful commodities trading group about 20 years ago. The guy who does the predictions for F.A. had an office with us and did consulting for the traders. Whatever his methods, he must have been accurate enough to gain the respect of the traders. I did some software consulting for him around 1982-83, and I seem to remember he told me the data was on sunspots.
Bear Sign: Gillette tells analysts that they expect their first down quarter
after 18 consecutive quarters of growth. Gillette stock gains 7 1/2.
Why is this bearish?
Fund managers continue to receive more money from 401K plans to invest and are faced with a shrinking number of stocks that they feel represent a promise of growth. Gillette will not grow in Q3 over Q2, unlike the past 18 quarters where each quarter has been better than the previous quarter. Analysts have been warning that Gillette cannot continue its pace for over six months, and is likely to head into a period of lower earnings. Today's announcement portends a significant turn in Gillette's fortunes that has been anticipated. Even so, to fund managers Gillette still represents a better bet than other stocks of the same class that they can invest in. This means that are almost no stocks left of this class that fund managers feel good about.
Other currencies besides the $US, from my understanding, can also be converted into gold ( and vice versa ) . The London fix is given in both BP's and USD's. Therefore you can exchange as much gold as you want at the fix for British Pounds, the USD/BP crossrate be damned. As well, I think Zurich will take your gold and give you SF's, if you like.
This is not to say that the gold/USD rate is not the determining factor in pricing gold in other currencies - it is. But to say that you can't buy gold in other currencies is not technically correct, insofar as I know.
The likelihood that man alone can alter the course of nature is unlikely. We most certainly can accelerate a cycle, but not reverse it. When Krakatoa when off, it showed in NY. There was a book written on the subject "The Year Without A Summer." When volcanos go off, they are often measured in 100's of units of atomic bomb power. A 10 mile wide chunck of rock hitting the Earth packs more damage than all our neuks put together. The evidence that weather moves in a cyclical pattern for thousands of years is undeniable. Its call the laws of physics. We may be able to affect the amplitudes, but we cannot create one on a global level.
YES, if but to only choose that last great "hope stock" that will remain after all others have fallen; we shall all be wealthy. If there are fewer as the bear progresses, we should be able to make reasonable predictions about the ultimate survivors; lead on, let us make those choices. But this also implies that a climax will occur. And I should add that Rothschild, when asked about his greatest error, was that he "sold to soon". An obvious irony to the fact that he got out in time.
So how long can it go?
China, tThe current uenvironmental brouhaha is yet another shakedown project. Tobacco, MSFT, and now, why not energy companies? Pay your respects and we'll write an exception for you. As PJ O'Rourke said, when you legislate what can be bought and sold, the first things to be bought and sold are the legislators.
Aye, there is no more powerful force than nature.
This year, to reiterate a previous post, is reminiscent of the summer of
1980, when Mt. St. Helens occurred. There is some sickly undercurrent of human thought that believes that by dusting the furniture, we can extinguish the fire engulfing the building. How pathetic and egocentric.
It is much like buying gold or a stock and expecting the market to follow, even though we only bought 100 shares. HA!
I propose a new scientific field that consists of economics and geology, to meld these two egocentric thinking processes. I think I will call it, let's see, now, ecology. WOW!
AZAU: Indeed locating the life raft stock and getting oDid ut at the right
time can make you big bucks. Yahoo is the best of its class, although wildly overpriced. Did you catch that one on the way up? Conversely, shorting the mad darling stock can make you even richer. Netscape was at 140 before dropping down to 20. It dropped like a stone when everyone suddenly realized that Microsoft was going to kill them, even though this was apparent for a time before that. Yahoo is in Microsoft's crosshairs as well. When will Yahoo investors see the threat and run? Call that one too and you have a big round-trip ticket.
-EJ
In 1987 gold rallied $20 with crash & then crash itself from $502 and hasn't look back since. Between 1978 and 1980, the Dow went up along with gold from 786 to test 1,000. Gold will rally only when the rest of commodities start to show signs of sustainability. If stocks crash, gold may rally, but so far there is no evidence that it will be sustainable on a long-term basis. When stocks crash, bonds rally. That's about the only thing I found look at all the charts for the past 150 years. Gold goes up when people fear the value of their currency will decline. Maybe the bull markt in gold comes with the collapse of the Euro - not its success. If Europeans see that the Euor fails, they will turn back to gold. Right now, they are bullish on their own stocks and the coming Euro. They are not interested in gold and that's the whole problem from what I see.
@ Bill2j: That is a nice analysis of how demographics drives markets
and other trends. You should be aware that it applies only to
North America, as the rest of the world did not have a post
war baby boom. In fact most of the world was not involved in
WW2. The United States and Canada ( which do have boomers )
constitute only about 5% of the world's population and
considerably less than 5% of the world's gold consumption.
IMHO, the world gold market can not be interpreted from a
demographic standpoint. Now north american real estate.......
@Ted Butler & RJ -- Mines sold forward may not suffer on price hike
It was stated earlier that mines that sold forward "will get killed in a price hike or by exploding lease rates." This is not necessarily true. I sell forward to a dealer, he gives me the cash up front and now I owe him 50,000 oz a year for the next five years. But I have a shaft and a mill and reserves that can meet these liabilities. My balance sheet is flat. The price then goes to $1000 and lease rates go to 26%. I am under no obligation to renew my loans at this new rate ( i.e. I have locked in at 3% ) and my balance sheet is still flat. What's the problem?
I _can_ see one problem -- while my assets have tripled, so have my liabilities. Banks don't like to see liabilities triple, especially if the collateral ( a mining operation + reserves ) is pretty shaky to start with ( strikes, ground trouble, reserve "re-estimations", etc. ) I'll bet the contracts are loaded with clauses that could make the mining co.'s life miserable in the event of a serious price hike. And of course if the operation does choke and they do have to go to market to cover, then, yes, they are dead.
Good post. A small rejoinder may be your contention that ( most of ) the leased physical remains in the vaults. The sole reason anybody borrows gold is to sell it spot and bank the proceeds. To sell in the spot market requires that the gold be "on hand"; a little piece of paper saying you've got rights to gold in Lisbon won't satisfy the London dealers - it has to be there. So, certainly in the case of Portugal ( an admitted CB leaser ) and other small countries, the gold has left the country ( or wasn't being kept there in the first place. ) The Swiss and Germans might be able to get away with keeping the physical in their vaults; but even then, once it has been sold spot, the metal is in play and if somebody wants to put their hot little paws on it, they have every right to do so.
This is in fact a good question for the various CBs: How much gold have you left in your vaults?
Steve in To_A: Appreciate your comments about CB gold sales gold leasing. I had suspected that some ( but not all ) the leased gold left the premises. I am still waiting for the report of a failed CB, or one that has inadvertently been forced to 'sell' the gold that it loaned. Once the gold permanently leaves the bank, there will be some explaining to do. Do you have any idea when their reports go out? Quarterly, or annually?
Unfortunately, we will not learn about gold loans, or gold derivatives trades by reading the CB reports. The world's Central banks should be kept to a higher standard even than corporations that go public in the equities markets, since they set the tone for all banks in that country. As I said before, it seems that only the BIS seems to have remembered what a bank is supposed to be. I guess that shows how far we have gone in our addiction to credit and debt if some CB's are playing around in the derivatives markets. Yes -- it is true that derivatives offer a powerful way to control the price of gold -- but -- that knowledge comes with a terrible price. The temptation to speculate in the derivatives markets. That is fine with your own money. But it is not fine with someone elses, unless they know the risks, and have asked you to do so.
I just got back from the Orange County Fair where Joan Jet and the Blackhearts played an hour of the most Eighties rock and roll Ive heard since. welllllll. The Eighties. I think Ill go back for the 9pm show.
Is it not true that in the US the US Treasury owns the gold which
is separate from the Federal Reserve System. What is it in other
Countries like France. Does the government own the gold and their
Central Bank only suggest what to do with it?
Is this why there is only 15% backing for the Euro? The governments
won't give the bankers the gold. I would suggest that in EVERY
country it is the military who says "you can't sell our gold!"
I was told this years ( 25 ) ago by a very smart broker. It's the
military who controls the gold not the F*****bankers!!!!
jefsilver7_A: If the US stock market crashes, there will be a credit crunch, and there will be a mass exodus from all types of equities -- gold stocks included. The fall of gold stocks will probably not be as much as they did in 1987 ( nearly 50% ) , but it will not be pleasant. If you reveal the deflationary period near the great stock market crash in 1929, you will see that the gold stock price did not rise substantially until after the crash. Other Kitcoites have stated that the information revolution changes everything -- at least the temporal sequence, if not the order of events. Even then, I would not expect gold equities to go up until some time after a market crash.
If the markets crash due to a run on the US dollar, I would expect that gold equities would recover more quickly, due to the rising price of gold, and imminent inflation due to rising exchange rates. That is exactly what happened in Indonesia, and to a lessor degree in South Africa.
Either way, you would do best to keep most of your powder dry, and wait till after the event.
There is an old saying that one should not watch the obvious. The
obvious is in the current headlines. The EURO. Gold reserves as a
percentage but this still makes it a fiat currency. PERIOD. Therefore
it is a smoke screen all this talk about the EURO. For what purpose?
I will be the first to say I'm just guessing. OK? But here goes.
The Central Bankers know the game is about up and soon, say 2 to 5
years, and they are history. The governments need to buy more gold
so they can start another system and are using gold manipulation to
purchase more gold. Govts meaning the Treasury.
The Central Bank System only deals in fiat currencies and we see what
is happening. They see this too. The game is over. New currency
plans are in the making using Treasury Gold not Federal Reserve Notes.
