Foundational Gold Trail Commentary

The Inside Story on the Gold-for-Oil Deal that could Rock the World's Financial Centers

(Sat Nov 01 1997 21:35 - ID#60253)

Do you think that value has been lost by holding physical gold all these years?

If the answer is yes, you are wrong! I tell you now, it's all in your perception of what is value and what is real. Gold has been increasing in value since the early 90s and doing it at a rate much higher than any other investment. Cannot see this? Hear me now, what the wealthy and powerful know: "real value does not have to always be stated or converted thruout time. It need only be priced once during the experience of life, that will be much more than enough!" Worldwide the oil business is still conducted in dollars. But, an interesting side show is now taking place that will change the way we think about gold and oil! If you wanted to devalue the US$ against other currencies what would be the best way to do it without LOWERING interest rates in the USA? Perhaps you want to cool off an over active stock market without raising rates ? Could a smart CB Chairman kill two birds with one stone ?

The US$ could be effectively lowered against most of the leading currencies by slowly taking it off the oil standard! This could be done by introducing a new concept to the world: "create a mechanism whereby a form of CB paper gold could be traded for oil as a side premium. So, instead of them taking physical gold off the market at it's now MAINTAINED commodity price, let them take "gray paper CB gold" priced at it's true value in US$ for oil." You see, this could solve the "problem of supply" that is also the problem for LBMA! We now have a "parallel market" with gold trading at it's commodity value on the physical market while being held for it's oil value by major players.

You don't think this is true? Think now, as the answer becomes clear:

Who is on the other side of the long gold deals that contango the metal far above it's current commodity price while freezing out most small private buyers? Why is gold being slowly transformed into a new kind of hybrid asset, off traded an for oil value of many thousands of dollars per oz.?

One more thing, Big trader left HK some time ago and is now in a waiting game.

No posts are from him. The post was not me on this date:

Date: Fri Oct 31 1997 16:09
ANOTHER ( thoughts ) ID#256321:

(Sat Nov 01 1997 22:43 - ID#60253)

Asia put an end to a sweet deal for the West! From the early 90s it was working very well. But now:

The problem with gold physical supply is very real indeed! But, there is no way that the CBs will continue to sell off an asset for it's commodity price that has many times more value as money! The talk of sales will continue for years but the real act may come to a close very soon as they try to take the LBMA off the supply hook by offering "gray paper" deals.

If they are not buying it, then: The falling markets worldwide are an early warning that the gold for oil deals are coming undone! As the big players are now heading for the exits in anticipation of exploding oil prices, the selling pressure from the CBs will quickly come off gold. The end of a parallel gold market pricing structure will leave many, many players holding nothing at all! The third world markets are the first to go as their currencies are crushed time and time again. Europe will be next, closely followed by the USA!

As for the US$ and T- bills held overseas, "they don't really exist"!

(Sat Nov 01 1997 23:55 - ID#60253)

The act being played out now is much larger than the business of "find the gold in the ground"! In the world today there are only three assets, gold, oil and currencies. The paper currencies, so long admired and accepted are now in a war of self destruction. They will consume each other in an end battle of "I'm the last man standing but have lost all use as a unit of value". Each nation state is trying to add a "kicker" or "premium" to it's trading paper as a means of buying oil. This does not mean any country will go without oil, they will have to work with "oil priced at a value rendering them uncompetitive". National stock and bond markets do not like this kind of news!

Inflation? We are not speaking of currency price inflation here. This is currency "destruction" because my national IOUs are being devalued by cheap oil supply problems!

As was said before, the real gold market that most people invest in is gone! Any gold trading paper will evaporate in the heat of fire now starting to burn. I tell you now, when the currencies are at nuclear war, GOLD WILL NOT TRADE

(Sun Nov 02 1997 11:38 - ID#60253)

Check the "gold eagle site" under Red Barron ( LBMA ) .

Read everything and rethink your thoughts.


Mr. Cole:
Knowing the future direction and price of gold will be useless for anyone who invests in paper gold! In the near future "timing" will be nothing. What you are holding will be everything!

(Sun Nov 02 1997 11:46 - ID#60253)

I hope to post an answer to your thoughts in the form of a "US$ and T-Bill" post tonight. It should give you more direction.

(Sun Nov 02 1997 21:52 - ID#60253)

Western thought is still linked to gold as a commodity. That thinking is going to change! The world will witness an almost instantaneous run into this commodity the likes of we have never seen before! It will not be "a trading rally" or "a two way street". Bullion will have become a holding for "the lifetime" never to be sold. "Sell and spend everything but not gold"!

Do you think in these terms: "if gold goes up $100+ next week I'll sell my futures, gold stocks and 10 K-rands for a fat profit and laugh all the way to the bank" If the gold market was the same as in the 70s and 80s, that might be a good move. But this market is not the same. The world has changed and left most goldbugs fighting the last war! Only this time they are much smarter and have many more tools to work with. But, what if you do battle with your modern missiles pointing the wrong direction?

For us to understand what is about to happen we must pull our minds out of the paper trading world. Instead enter the world of real things! Here we will see concepts more clearly.

All currencies and most treasury debt are little more than digital units of perceived value. You don't own them, your account is "credited" with this value. Foreign governments, such as Japan are no better off than American citizens, they don't own anything either! What is really owned is "the right to offer what is credited to you, to a bidder in exchange for real things or other credits". It is a strange way to hold wealth. One might say "my net worth is the intention of others to pay me a credit from someone else". This thinking has worked well until the late 80s. It was at this time that a few wealthy and very smart people started to see the end of this. They understood that the US$ was not going to crash, it already had. It, along with all major currencies would lose all sense of value and become only trading digits of account. The treasury debts were little more than the same thing.

You see, all currencies now compete with each other, not for value of wealth but for "USAGE". The game has now become "whose currency gets used the most for trading" not for value against goods! It was easy to know the currency that got used for oil would win this game. Today, all currencies are traded against the dollar for it's usage as a medium of oil exchange! Take away that link and the entire currency/ debt exchange system, as we know it will collapse! The US$ must be maintained as the "most used" if the other currencies are to have a chance to survive.

Will Japan sell US treasury debt and risk taking dollars out of "usage"? Not in your life! Nor will any other CB! They will talk about it. They will sell a little. But sell a lot? It will not happen. You see oil is the key and that connection to the dollar is changing. Foreign CBs will even sell some gold to try and keep the US$ in play ( see my other posts ) . Ever wonder why the US treasury has not sold gold, it would have the opposite effect! The oil that sense the early 70s, held together the world monetary system is now causing it to slide apart! We are not going to see inflation or deflation again. What we are now seeing is the "destruction" of our paper monetary system.

Someone once asked "if the currency/ banking system breaks down, how will we know what gold is worth?". My answer, gold above ground will be worth a lot more than gold below ground, a lot MORE!

(Wed Nov 05 1997 20:33 - ID#60253)

In my last post ( "Date: Sun Nov 02 1997 21:52 ANOTHER ( THOUGHTS! ) ID#60253:" )

"I said that some thing was going to change". It is changing now!

But first, some replies:

JD ( @home ) ID#253201:
I don't get it. Also if the Saudis have been trading oil for gold they lost money over 17 years.
Period. 2 and 2 is 4 not 20."

They have also held a few billion in underground oil that went from $30+ in the early 90s to the $20 range today. Would we say they lost money in oil? Yes, they owe money. Yes, they play the paper game. They also would make good poker players as they hold an ACE where noone can see! They are not like you or I, for them 2 and 2 is 40!


Date: Sun Nov 02 1997 23:06
JTF ( @Home- ANOTHER's Comments ) ID#57232:
"I think a period of inflation followed by sudden deflation would be far more likely for certain of the world's currencies. This is already happening in SE Asia. I cannot believe there will be no inflation or deflation. "

At this moment in time and space, the price of oil in US$ terms is about to roar! It will crush the Pacific Rim and South America. It will drive the US$ sky high in terms of other major currencies but the dollar will collapse in terms of gold! Short term interest rates in the USA will be driven thru the floor much the way they have been in Japan from the early 90s. This will be done to combat a imploding equity market. Long government bonds will almost stop trading as their yield soars from the oil price fears of "inflation"! Because of todays "new digital paper markets" this entire act will be played out in 30 days or less. Yes, you are right! During that time we will have inflation and deflation.


Date: Mon Nov 03 1997 07:31
Reify ( @ANOTHER ) ID#413109:
Soooo, I'm wondering, over what period of time are your predictions?
Where do you get information on about, Big Trader?

The actual buying of gold ( no other metals ) by huge players is not a prediction, it is ongoing. In 1997 it exploded! The price of the metal in currency terms will be made for all to see as it moves quickly upward for a very short period of time ( 30 days ) . After that only black market traders and third world noones will understand it's price! When is this going to happen? I have no idea. Is there anything to look for that will tell us when the problems have started? At first the US$ and gold will go up together against all other assets!

Big Trader is ( was ) from HK and is in the business.


Date: Sun Nov 02 1997 11:51
Shek ( home ) ID#287279:
Some months ago another poster ( Simple Man ) gave the same advice. Get rid of all paper assets, only physical possession will do. Gold stock certificates will be useless. Are you Simple Man or connected to him?

I do not know him, but have seen the posts.


Date: Sat Nov 01 1997 22:54
fjklaj ( jfdkla; ) ID#338126:
Another, I always like reading your posts BUT they have always been followed by a sharp drop in gold

There is no end to the amount of paper contracts that can be written and sold to drop the price of gold. The large players that I know have no problem with this. They are not traders.

"Gold will only have to be repriced once, that will be more than enough"!


To close:
The oil and gold connection looks to be changing now! After all these years we hear of an end to foolish thought. This should get very interesting.

" Knowing the future direction and price of gold will be useless for anyone who invests in paper gold! In the near future "timing" will be nothing. What you are holding will be everything!"

(Fri Nov 07 1997 21:59 - ID#60253)

Some replies:

Date: Wed Nov 05 1997 20:33
Reify ( ) ID#413109:
To sell what I own would mean losses, and what investment at this point
Oil Stocks? Bullion? What?

It is a hard game we play, yes? Many have used the paper game to make great returns and have much to show for it. But, make no mistake, if you try to use the solid reasons for holding bullion as a purpose to trade paper gold you will not keep what is earned! I know those who have traded with the sun and gold bullion will not be sold at a loss by them. Indeed, these gains will view all forms of paper as sad returns. Divide your thoughts, give some to bullion as your will can allow. Resolve yourself to let the others go if your loses come back. Much luck to you.


Date: Wed Nov 05 1997 22:06
All paper gold will be worthless just like stocks and bonds! Am I right? If not please correct!

Mr. GCH,
You may be more right than wanted to be. For some it is a long torturous wait to go without paper gains. For ones outside the west, it is not hard. Days pass easily as a thousand years of history give backing to our investment. "For what I hold is not an empty promise. Nor is it a major thought of debt. I am now today, paid in full!"

Turn slowly now and view all directions. The wealth that was had was not real. The Pacific Rim started, now South America. Next will be Europe closely followed by the US. Remember, all currencies are the same now as they are "digital paper"! Nations will defend the system at all cost They will never sell US$ treasury debt as that debt is their currency! The dollar will soar as a final defense! As part of this defense they will allow oil to rise as oil is priced in dollars. How do you get oil to rise? Today, we stop our CBs from selling gold!

(Fri Nov 07 1997 22:37 - ID#60253)

1 ) Why then did Hashimoto threaten to sell US SECURITIES and buy gold?

He will do both, but not in order or in amounts supposed. The BOJ is buying gold now , much more than assumed. They will sell US debt but only after a rising oil price runs the US$ thru the roof. Even then it will be as minor currency management!

2 ) What will be the new world reserve currency once the dollar is hyper-inflated to zero or devalued? E-gold, gold itself or nuclear weapons?

I don't know, but we will all find out!

(Sun Nov 09 1997 20:53 - ID#60253)

Some reply:

Date: Sat Nov 08 1997 17:14
jfklajf ( fjka;j ) ID#251213:
We are at a loss, however, to understand the relative tightness of supply. Whatever may be the explanation, the market may be heavily oversold at these levels. If this technical condition persists, we can envision a substantial rally triggered perhaps by further stock market declines.

STRATEGY: Stand aside"

ANOTHER I guess you have an "explanation?" Hmmmm?

If the BIS group has decided to back away from supporting London then " the relative tightness of supply" will be the least of the problems! I repost your other note as part of answer.

Date: Sat Nov 08 1997 17:20
jfkdasljf ( jfkla;j ) ID#251213:
How can things get worse for a large bank in a deflation? Ans. Have an inflation hedge, gold, go up. The banks are the ones who have been shorting gold, if they have to liquidate positions to raise cash; uh oh.


Date: Sat Nov 08 1997 18:24
A.Goose ( @pondCentral ) ID#20135:
I have often wondered, over the past 4 years, why people or institutions would buy yet to be mined gold at such heavy premiums over spot prices. It always seemed that it would be more logical, and better business to boot, to buy at spot. Well, with John K.'s and ANOTHER's posts, it makes sense. If you want to take over MAJOR positions in bullion without spooking the market and driving prices up, creating the business of forward sales would certainly do the trick. You get the bonus of not only harvesting bullion in the present at firesale prices, but also you lock in future "fire sale" prices. This mechanism also avoids upsetting countries, populations and most of all A.G. I have to say that I am definitely buying into the program. Gold can rally to new highs with no "official" sales because pricing can initially be evolved from the forward sales contracts. I do believe however that not all gold stocks will suffer. I believe that companies that have no or little forward hedges will soar as well as those that have new discoveries. Holding bullion will be very positive.

Mr. A. Goose,
You think well, sir! But also, gold stocks would do well if the world would stay the same. It will not! Question, How can you dig for gold if no official exchange will quote you a price? What is in the ground may need to rest a while.


Date: Sat Nov 08 1997 18:24
Cmax ( @ANOTHER ) ID#339320:
This seems to be a very Saudi point of view.....which brings to mind an image of a housepet that feels that HE is the owner of the house, and the lowly HUMANS exist only to clean, house and feed the pet.

If their is something I'm still missing on this gold/oil scenario, please correct me.

A good view from you, sir! A fine Arabian horse is much the same.

The battle is not over the supply of oil, the commodity but the value of oil in what terms. Oil will flow, but on what terms? I ask you, what currency will be allowed to keep this fine "pet"?


Date: Sat Nov 08 1997 19:47
MoreGold ( @ANOTHER 16:27 ) ID#348286:
How the hell will the shorts deliver the Gold if their game is finally called ?? One question, if as you contend, oil will be driven up to support the non US currencies, is it a good time to go long on ( paper ) oil?

They cannot. Paper oil? No other asset ever to exist will match the coming increase in the value of gold bullion, none.


Date: Sun Nov 09 1997 19:22
JTF ( @Home ) ID#57232:
: If gold bullion liquidity were, say, vanish tomorrow, and there was a run on gold, how high would it go up before non-central bank sources opened up? I can't imagine it will go up without limit, and gold will cease to trade. Unless there is a financial/derivatives crisis at the same time. Thanks in advance.

Mr. JTF,
You have answered your question. I add this picture:

If a bank that uses Yen has lost 90% of it's loans and holds gold and bullion has risen 500% in yen in a week, to use a western way " would it cut it's winners and let the losers run"?

(Wed Nov 12 1997 14:08 - ID#60253)

Some replies:

Date: Sun Nov 09 1997 21:49
Cmax ( @ANOTHER ) ID#339320:
Thanks for the reply. Due do the new "sectioning" of time intervals on Kitco, I think most people missed it. What do you think is a tentative timeframe for serious upward movement in gold ( above 450 )

A simple move above 450 is not even a thought. The billions that have found gold these few years see metal in the thousands! Someday the CBs will say, "we stop now, as value has all". In that day we will all understand "what is real and who is real"!


Date: Sun Nov 09 1997 21:58
Shek ( home ) ID#287279:
Another, 6-7 months ago, a poster ( BigTrader ) made similar predictions to yours. He even gave timeframes. His final and boldest prediction coincided with a big drop in gold prices. BigTrader vanished from this site.

Big Trader has vanished from view, but he and his gold still exist. At the time of their accumulation traders did not understand the nature of "Low gold for oil" and what would happen. Many traders have lost much in paper gold but the large physical buyers know that it's value in terms of oil has risen. Time will prove all things.


Date: Sun Nov 09 1997 22:09
KahunnaGrande ( PermainBasin,Texas ) ID#27454:
Saudi's Gold and Oil. Whatta combination. I do not see how until there is a unified european currency that the saudi's and the other oil producing countries can price their commodity in anything other than dollars.

Mr. KG,
The House of Saud will not have to reprice it's oil in dollars, the rest of the world will do it for them!


To close:
I have reply for others but time will not wait.

A person thinking of purchasing physical gold should see the Bundesbank statement as fact. They openly admit to lending in the past and no chance of selling real gold in the future. This is a clear indication that a solid decision was made at the BIS meeting ( see my post ) ! All CBs will now slowly stop all leasing operations and allow the market to size itself. The important players, the oil states, will have their paper covered without question! But, for all others, the great scramble is about to begin!

Oil now must rise if the US$ and the currency system is to survive. Japan has reached the end. They must do their best to help the dollar rise against the yen. To this end they will maintain all US bonds and use all new capital to buy gold and oil!

Any country without gold will be found in a disadvantaged state!

(Wed Nov 12 1997 20:41 - ID#60253)

" a mind that can think, it is worth life itself"

Markus has given a great thought! If it could happen the world would gain much. But it will not.

Date: Wed Nov 12 1997 14:26
Markus ( BIS Decisions ) ID#283277:
ANOTHER: Could you please enlighten us as to the Bank of International Settlement decision you allude to in your recent post?

A BIS meeting was held and from those doors the world did change. The Bundesbank has now made clear to all what will now be policy for CBs. A crisis is at hand! All physical gold sales will stop. All gold lending will wind down. We will see the results of this as a massive scramble to cover open positions slowly unfolds. All of us will see the destruction of the gold market as we know it, LBMA will be no more!


Date: Wed Nov 12 1997 22:00
Shek ( home ) ID#287279:
Global Gold Market Deficit Is 700 Tonnes Larger Than Consensus Estimates - Aggregate Short Position Too Large To Be Covered Noted international gold market analyst Frank Veneroso said today that Bundesbank disclosure of massive gold loans ``confirms our view that the global gold market deficit is 700 tonnes larger than consensus estimates and that the aggregate short position in the gold market is too large to be covered... This is the beginning of a reappraisal of the gold market that will slowly unfold...''
Wednesday November 12, 9:37 pm Eastern Time

Date: Wed Nov 12 1997 22:38
Shek ( home ) ID#287279:
223, This goes well with what ANOTHER has been saying on this site for 4 weeks now. My guess is as good as yours. I think it has started and will come to a climax within 3 months.

I do not know Mr. Veneroso. His thinking is very close.


Date: Thu Nov 13 1997 00:19
Earl ( ) ID#227238:
HighRise: IF I understand you correctly, the threat to the monetary system ( vis a vis Another's comment ) is more a function of oil/middle east instability and oil pricing, than to a factor intrinsic to the system itself. ..... I was focussing on the system alone without regard to the aforementioned forces.

The world currency system has, for years been little more than digital credits backed by "usage demand". In the long run it was oil backing the US$ that kept it all together! It truly is strange, that in the end it was gold that backed oil! In a even more strange twist, the loss of the LBMA gold market will bring the system down!

(Thu Nov 13 1997 09:34 - ID#60253)

It was never the intent of the CBs to sell their countries gold in massive amounts. The "understanding" that was worked out years ago was good for the economies and the world. In return for the US$ remaining the "oil reserve" currency, ( oil would be not just supplied but supplied in dollars ) large amounts of gold would be supplied far into the future. The gold, while indirectly backed by the CBs would actually come from the mines of the future. With the oil money making a ready market for gold priced at a premium ( contangoed out many years ) , the mines could make a fair profit even with spot gold priced below production. All would win! And for some time, we did! I am able to know some CBs, they are not evil, their minds are for the best that can occur. But, I THINK the world ran away from them. The paper world of gold is now a mess with no resolve! They will not sell all gold. Some that have actually have paper for future return. But, as they know now it will not, it can not work! Too many people made to much of a good thing. A sad thing, this LBMA, as it winds down with it the dollar reserve and cheap oil will also go.

some replies,

Date: Thu Nov 13 1997 06:26
Cmax ( @Playing the Contrarian's Contrarian ) ID#339320:
Let's play the contrarian to the contrarian for the moment: IF there is a gold conspiracy by the CB's to keep gold low for oil, then WHY ( HOW ) would ( could ) it be beneficial to keep driving it thru the floor?? If the price was stable at around $400, I would understand.....but it just doesn't make any sense to push it to these lows. Something just doesn't add up.

When the entire paper gold market started to be at risk, they tried to save it. Unfortunately, many large buyers saw what was happening and have brought all the physical offered as prices dropped. This gold will

never come back, nor will the market ever be the same

(Thu Nov 13 1997 10:08 - ID#60253)

Mr. BillD,
Who can know the thoughts of the "Big Traders" of the world? If they press the physical market, it will end tomorrow. They are by no means dumb as they sometimes show! Most would like to keep their gold at todays price and allow the economies to continue in prosperity! In time and with luck it could all be worked out. But, it is the equity/debt/currency markets in general that are a problem! If only a small, very small very few " western people" begin to buy?? Remember, the other world no ones have gold in their hand. They care not about YOUR debts, these small people have won a great deal and know it not.

(Thu Nov 13 1997 11:59 - ID#60253)

an answer:

Date: Thu Nov 13 1997 11:30
JTF ( @Gold loans ) ID#57232:
Can you tell me if the following scenario may be some of what they are doing:

Only the small traders do what you suggest. To date they are successful. In reality they make a market as they banter about. This side show helps to hide the major long term buys. But, they will become food for lions in the future! The big players would not even talk to these people. You see, the paper traders are making "small change" and think others are fools! But such is life, as they are truly performing a roll that was written by the others!

(Sun Nov 16 1997 10:20 - ID#60253)

It is not only important to understand this question, but also to ask it in context!

Date: Sat Nov 15 1997 20:14
Crunch ( Question for Another ) ID#344290:
Another, a question, please: When gold is borrowed from CBs, what collateral is required by the CB to be assured the loan will be repaid in full?

If you will allow, I will add to your thinking. In todays time the CBs do not sell physical gold with a purpose to drive the price down. They sell to cover open orders to buy what cannot be filled from existing stocks. Look to the US treasury sales in the late 70s. They sold 1 million a month using open bid proposals with much fanfare. If the CBs wanted physical sales to drive the price they would sell in the same way.

The sales today are done quietly with purpose. The gold must go to the correct location. That is why these sales do not impact price as they occur, there is a waiting buyer on the other side. As all of these transactions are done thru certain merchant banks, not direct CB contact, the buy side does hold hedges.

When actual delivery takes place, months later ( and usually at the same time as the CB sale statement ) these hedges come off and affect the market price.

It is important to understand that none of these CB sales of physical need to go to the open market at all! The BIS could take it all. You see, for them to take all of Canada's gold would have been as "cool water on a hot day". That small amount of currency was nothing to them.

All currencies, today, are locked to the US$ for value. In a very real sense, no country can own it's gold as the BIS has ties to all of it. Canada, Australia and others say openly "what is the use"? The BIS, instead of taking it outright, places it where it's needed!

As long as there is an open market for gold, it will not be allowed to trade above it's commodity price! It has far to much value for that to happen. You see, in much the same way that a zero coupon bond trades at a discount to face, gold is traded for it's discount of " money value to commodity price! Think that I a fool, because I trade gold for thousands US an oz.? You will think much on this in the future.

Banks do lend gold with a reason to control price. If gold rises above it's commodity price it loses value in discount trade. They admit now to lending much where they would admit nothing before! They do this now because of the trouble ahead. Does a CB have collateral to lend it's gold? Understand, they only lend their good name on paper, not the gold itself. The gold that is put on the market in these deals belongs to someone else! The question is not "Are the CBs worried for the return of gold?" but, "Has our paper been lent to the wrong people?".

The BIS will not allow the distribution of all gold to settle claims. The mines of the world will be forced to sell to the BIS at the "locked" existing commodity price of gold. This will happen over many, many years as no other "official" market outside the BIS will exist.

"You see, oil will flow but oil and gold will never flow in the same direction!"

(Fri Nov 21 1997 16:44 - ID#60253)

I will write here. Our Thoughts belong to the world.

(Sat Nov 22 1997 23:13 - ID#60253)

This was written: "To find the answer to the LBMA , "Follow the connection from London, to South Africa, to the Middle East, and on to Asia"

Mr. Markus Angelicus,
I read the gold-eagle write. You have made the link between London ( LBMA ) and South Africa .

Many look to the middle east and say "they control the oil market no more". I say "you see not what is in front of your eyes"! They do not have to keep oil up in price to control it. One can gain more wealth by keeping oil down than by driving it up, much more! And what is the value of this type of manipulation?

it is measured in gold! Tell me now, what gain is there to destroy the world economy with high cost oil when they will provide you gold instead?

But what value gold? All say "it is only a commodity subject to supply and demand"! Understand me, Demand and supply is written by BIS and $15 oil can cost $250 gold or $10,000 gold, whatever is required! $250 gold and LBMA will live! $10,000 gold and LBMA is sacrificed!

But, it will never come to this. The oil "understanding" was broken by the Asians. More gold has been sold than can ever be covered! This market is not the same as the past. One day gold will start up and BIS will deal with it the only way possible!

(Sat Nov 22 1997 23:32 - ID#60253)

One new day gold will begin a rise that will end it's use as a trading medium. This reevaluation will end a tradition in London. No gold house will make a market that has no sellers, official world gold trade will end for many years! And with it will go the last true value to trade for oil. Oil will skyrocket in all currencies. Those who have metal will learn it's value in oil. All things in life change, the world will not be the same.

(Sun Nov 23 1997 09:18 - ID#60253)

Many wait for the next great bull market in gold to begin before they buy. Why buy now and lose interest or stock market gains? They will miss the greatest investment ever to come in ones lifetime! The powers of this world have already begun this motion. People of simple thought have but to buy physical gold and make low as the financial wars begin! You see, gold was cornered this year. It is done. No Central Bank will sell it's 50, 100, 200 million ozs gold when 600 million is needed! I ask you, how can currency price gold? Indeed, no price will work! You think any form of "paper gold" will stand this fire? Can we do battle with lions? When oil will not take currency without gold the havenots will not sit still!

"When a thousand hungry lions fight over one scrap of food, small dogs should hide with whats in their belly".

A world waits for something to happen that is done.

Read my

Date: Sat Nov 22 1997 23:13


Date: Sat Nov 22 1997 23:32

then be very sure to read Mr. Mr. Markus Angelicus, on Gold Eagle! Then you will know!

(Sun Nov 23 1997 09:40 - ID#60253)

A reply to:

Date: Wed Nov 19 1997 19:23
Qestor@Observations>Qestor@Observations ( Qestor@Observations ) ID#223146:
Tolerant1,ROR & All-The continued draw down of gold stocks at the comex are contrary to pssible expectations of those "powers that be", who may be trying to drive the gold price down. The Comex is the most visible market where one can see changes in physical stocks. Based on all the analysis that has surfaced regarding the selling of gold stocks from CBs--- Where is it? I believe that the sales have been derivitive in nature and unless we start seeing a rise in deliverable gold at the Comex the nature and reality of gold may precipitate the derivative players worst nightmare. If Another is correct in that the CBs never release their gold but only the right the write paper based on it's value then we may have the mother of all short squeezes if the longs hold the December contracts past notice day. Comments please.

Mr. Questor,
We are well past this stage now. Join me and other big traders as we watch


(Sun Nov 23 1997 10:51 - ID#60253)

In this age of "digital currencies" it is impossible to see how fast the thoughts of people are shown as actions! Many will wait for markets to do what they have done in the past, "looking backward to see forward". Be known that most of the actions by the ultra large players is complete. When the change in direction of gold starts, it will be hyper fast! A good many will run to the US$ first, making that currency rise with gold and misleading much people. Before Christmas? I do not know.

The Pacific Rim has begun a process that will not end. Much paper value will burn before this fire is done!

Many gold stocks will rise with gold and most people will hold for gains. But they will never see then converted to value. If the gold markets lock before they reach $1,000 , all mining stocks will be consumed in the paper fire. A sad day for many.

(Sun Nov 23 1997 11:21 - ID#60253)

A reply,

Date: Sun Nov 23 1997 10:59
Crystal Ball ( @Another ) ID#287367:
Surely the dollar will find some price at which an ounce of gold can be pried out from the woodwork.
If not, G-d help us all!

Mr. C.B.,
The future will look back at us with respect, as we knew not what was happening! A day will come, sir, when no paper dollar will pry gold from your hands! In that day, you will be too smart for such foolishnes

(Sun Nov 23 1997 11:35 - ID#60253)

a reply,

Date: Sun Nov 23 1997 11:18
Carl ( Another, Please explain ) ID#333131:

The world has changed and the gold market has changed with it. We are going back in time much further than many will accept. A time when men, such as I, will take what is yours! If you hold your value in a public way, it will be taxed or taken for the good of all. Such are the ways of extream times!

(Tue Nov 25 1997 08:24 - ID#60253)

Mr. Vronsky,
thank you for posting the article by Markus. I, in much the same way must have "ANOTHER" post my thoughts as position will not allow open expression.

Mr. Markus Angelicus,
Checkmate is the end of a game, but in life checkmate is the beginning of freedom! I submit that all of history is full of war. From nations to single persons we all do battle over ownership of things. Some support not war but would kill to keep what is theirs! It would seem that from the day of birth our financial chaos begins. The end of our struggle is reached but for a moment in time as "checkmate" becomes "stalemate" and fortunate and free are the few who find this time in life!

Am I misleading? I submit to you that all of creation is misleading. It is only in the pages of history that we find those who thought the truth! The "facts" of the present are but a wonder to all. Only time will prove all things.

Sir, you write, "Your gold coins in your pocket will become the target of persecution and arrests and you will be forced to accept the world's standard currency. There will be no will be unable to trade with your gold because they will have long outlawed both gold and old paper currency...."

In the past many world governments and leaders, far greater than those today have embraced these thoughts. I and my fathers have done battle with such evil and won! For we have 6,000 years of history as our armor!

For those who say gold is not an asset and is dead! I offer you a fact: "Today, as you read this more gold is traded and purchased than at any time in the history of the world." This ancient, world class money from the distant past is now to be the most fought over asset of the future. In war and life, gold will be your "CHECKMATE"!

(Tue Nov 25 1997 10:06 - ID#60253)

a reply,

Date: Mon Nov 24 1997 21:08
Allen ( USA ) ( @Another ( Thoughts! ) and all RE: Mercantilism ) ID#255190:

The US$ is today, backed by oil. As all other currencies are but "digital units" tied directly to the dollar, they are indirectly on the oil standard also. This world currency position is supported thru the BIS. In CB circles, it is well known that the world debt markets as we know them, can only be maintained with cheap and cheaper oil! Without cheap oil the entire system fails and reverts back to pay as you go economies. This is the central reason for "two price gold".

With gold discounted to it's production cost and below, those that have it can trade it for it's monetary value. Make no mistake, the BIS knows gold in the many thousands. The future "reset value" of gold is the key. "support the dollar with oil and the currency system works" "fail the currencies and the dollar will come off the oil standard and the BIS will reset gold to $10,000+ with many conditions"

That is why they continue to accept the dollar as a reserve. If Japan or any other COUNTRY sells US treasury debt it's all over!

(Tue Nov 25 1997 13:38 - ID#60253)

a reply,

Date: Tue Nov 25 1997 13:04

Mr. GP,
It is as you say. However, I do not feel that the reprise of gold to lower the cost of oil was a bad thing. In reality the governments were only using real money, gold, to supplement our cost of oil. The world economy has a great benefit from this! We all have gained. The world mining industry gained much from the forward sales. The great increase in gold produced was used for our purpose. For a time the mines made profits. The great mistake by the BIS was in underestimating the Asians. Some big traders said they would buy it all below $365+/- and they did. That's what forced LBMA to go on a spree of paper selling! Now, it's a mess.

At some point the fire in Asia will drive all of them into gold. It will end at that time.

ALL: I do not offer to prove my thoughts. If what is written was easy for all to find, the information would be of no use to you. Many will take no motions to change their ways and protect worth. Such is life.

Each will chose his way and as always the future will teach the truth.

(Fri Nov 28 1997 08:34 - ID#60253)


Date: Thu Nov 27 1997 09:02
Leland ( What "Another" has been speak-plain-talk ) ID#316193:

Leland, this report is very good! I will add to it tonight and add some replys.

(Fri Nov 28 1997 19:45 - ID#60253)

After a proof read by one from the west this is a start and should help you understand.

For a number of years many persons have tried to invest in gold using the tools of past gold encounters. Even thought the last several upswings in bullion always took the gold stocks along for a ride, this time it will be different!

Ever ask someone if they owned gold. They might say " yes, but only 5% of my capitol is in it for insurance" Was it bullion? "No, my broker is to smart for that, he put me into a good gold mutual fund." "He says, if it really looks like it's going to go up I'll also have you in some comex futures or options "

During the first bull market of the seventies we saw few mining stocks outside South Africa worth owning .

Because they were relativity new to the game most people stayed with bullion. There certainly were no mass gold options and there were even fewer gold coins around. Most just brought whatever bullion bars they could find and as their past European counterparts did, they just waited it out.

Today, the public went "whole hog" for paper gold and has paid a great price. Wall street invented this game from the previous war as a way of keeping customer "gold money " in house! The shame of it is that these tools not only would not work in this new market, but they also gave the street a way to short gold

even more effectively. In many cases the public brought little more than "long paper" from the street, with no gold at all on the other side! No one will ever have the truth on this as the falling price made most people close out without ever calling for the goods! A good deal of the numerous mining paper capitol was used to enrich the sellers while the buyers actually had no chance of seeing a profit. That's because the commodity these securities were based on was all but guaranteed to go down as forward sellers

were given a green light to sell paper gold to the limit of their financial resources.

To make a long story short, many people who would have purchased bullion years ago have now squandered much of their "safe insurance money" on wall street. It is no wonder that many WESTERN gold investors have now turned bitter on gold. If they knew the truth about this new market they would have turned their bitterness on wall street instead.


(Fri Nov 28 1997 23:29 - ID#60253)

If you had oil in the ground, that over time could be worth over one trillion US$, would you buy gold for all to see? No. If you had this much wealth, would you want others to see you as getting "rich" from oil sales? No. How could you hold and build your massive wealth over many years, but still have everyone view this people as "in debt and just making it"?

The answer comes from the distant past. Take in gold as the CBs force it to fall against all other forms of value.

But, how can 100million + ozs of gold be equal to all the oil in Arabia? It all depends on how it's valued, simple yes?

If a CB says gold is $300oz, we say he is nuts! But, if $300 or $250 gold buy $19 oil, perhaps the CB is smart! It is far better if $19/oil buys $300 gold than $100/oil buy $5,000 gold!

What if the oil states offered to buy gold with oil, OUTRIGHT? No currencies involved. " We will produce flat out, all the oil you want. And, we offer this oil as payment, per barrel, to buy ( say? ) 25US dollars or gold priced by us, at ( say? ) $10,000oz.!"

The answer is very simple, the world would sell them gold for oil. I tell you now, this almost happened!

You think long and hard on this as the outcome would have been far different from what all think.

Instead, the BIS set up a plan where gold would be slowly brought down to production price. To do this required some oil states to take the long side of much leased/forward gold deals even as they "bid for physical under a falling market". Using a small amount of in ground oil as backing they could hold huge positions without being visible. For a long time they were the only ones holding much of this paper. Then, the Asians began to compete on the physical side.

How will this all end? As the CBs never sold much of their gold, they are still locked to the deals thru the BIS. In the real world it was stocks of gold outside the governments that got traded. And that trading multiplied many times. Today, more gold is traded than exists! This paper today, has become the "gold pricing standard" without backing. There is no way out! As we have now reached production cost, we have reached, "THE END"! Without real physical to supply the oil states, they WILL bid for gold with oil! The BIS will do the only thing they can, halt all trading and declare gold a "world oil currency"! To that end, all forms of paper gold will burn. How long till this starts? I understand that the CBs are slowly winding down lending, then sales. This will, no doubt start a paper panic at some time. It could take weeks or a year, I do not know.

As for the old agreement of oil/gold ratio, it went out the window after the gulf war.

More later.

(Sat Nov 29 1997 15:53 - ID#60253)

I have heard of this?

Something interesting happened just ago that will, in time impact the price of gold in US$. A proposal was offered to borrow in broken lots, 3.5 and 5.5 million ozs for resale. It was turned down. The owner offered to sell only, no lease. What turned heads was that someone else stepped in and took it all, at a premium!

Some say "the winds blow stronger on still nights". This gold market has yet to weather strong winds, I think we have seen the end to smooth water. Be thoughtful not to fight the last war!

I will be done for a time.

( See my last two posts )

(Sun Nov 30 1997 20:03 - ID#60253)

We read and hear only one side of the story. It comes from those who can write and talk the loudest!

"They have sold massive amounts of gold for several years now." "It can only go lower and lower."

I offer another side from another place. I ask not that you believe but only that you consider, and follow this voice for a later time.

The news writers speak of great loses and missed investment opportunity by these holders of gold. I ask you, have the loses been that great? The largest buyers of the true physical sales are not traders, as the amount they gather is small by their ways. This gold they buy will outlive them and no doubt be passed on to others, be they family or country. As oil has fallen, so has gold! All is fair, all is as it should be.

But, the traders, these paper traders who have taken much of the London side, they hold nothing! Who will provide gold for them to keep? Of the many markets, more gold now trades than exists!

To close,
A choice must be made now and it is for a simple mind. Of the CBs that have a purpose to sell gold, do they sell to cover LBMA and other traders? Or do they let the paper gold market implode? Of those CBs that lend and sell, they hold only 500m+/- ozs. If they sell all they have it will not cover all and the other CBs may buy more. To date the oil states have not voiced a problem as the gold appears not to leave the CB valts! But, if they start to cover the gold debt, the accounts will show, even before additional open sales appear on the market. Now you know why I do not predict a price. For ones of simple thought, such as I " gold will be repriced once in life, and that will be much more than enough".

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