Found this at goldminingoutlook.com

A NEW MEANS OF RAISING ELECTION FUNDS? Vice President Al Gore said Friday at the World Economic
Forum in Davos, Switzerland that the International Monetary Fund should sell a "small proportion" of its
gold reserves and use the proceeds to provide debt relief to poor nations. Presumably the Vice President,
not having enough funerals to attend in recent weeks, has decided to fill up his spare time by speculating
in the commodities markets, no doubt in order to provide needed campaign financing for Tipper Gore.
(Remember you heard it here first.)

in overnight trading for April future contracts in overnight trading in London and elsewhere (pheww!)

HIT exactly 290 at 8:30 NY time, then fell back!
That was GREAT Steve, your crystal ball is in fine shape.
<;-)

At 1:10 NY time APR Au broke though 291 !
SPOT the dog has taken a jump in NY also.
<;-)

At 2:00 NY time the XAU broke 65 and is headed up!
The LONG bond is in a DIVE mode.
Disparity shows within the DOW and S&P.
Dipsters pushing the NAS to new highs.
THINGS are looking good !
<;-)

We are very close to a confirmation of a new up trend in gold ...a close above 292.50 on april comex gold and a close
above 66.00 on the [xau] gold index should technically be the break out...This could be the start of a long term bull
market...

I am told we are fixed.

I could only manage to "drop by" here for a brief moment. I must be off (late already) to meet with a friend. Nonetheless, I had a chance to review the archives of the past days. (What, no "Bronco's comment" from USAGOLD?? I'm sure the people in your fair city are nearly as pleased as a year ago, yet the first taste is always the sweetest.)
I'm sure your Msg #2141 will not immediately sit well with the thoughts of many conspiracy minded goldhearts, yet it is a good outline of the truth of the matter as I can see it to be. Time will show this to be well, indeed. I congratulate you on the finest of posts. (I think you have been holding back for some time?) More on this another time.

Some excerpts from Bloomberg provide some key elements for healthy thought. I hope they are self evident...
-----------------------------
New York, Feb. 1 (Bloomberg) -- The dollar suffered its
worst loss against the yen in three weeks as Japanese exporters
sold the U.S. currency to bring home profits before the end of
their fiscal year in March.
"Japanese exporters are selling dollars constantly," said
Mitsuaki Kataoka, vice president of foreign exchange at Bank of
Tokyo-Mitsubishi Ltd. These firms have been placing orders to
sell dollars from 114 yen to 120 yen, he said.

The dollar dropped to 115.05 yen from 116.33 Friday.
Earlier, it sank as low as 114.79 yen.

At the same time, the U.S. currency rose to its highest
level against the euro since the single currency's inception a
month ago on expectations that U.S. growth will outstrip that of
Europe. The dollar's gain pushed the euro down as low as $1.1286
from $1.1362 Friday. The euro recently traded at $1.1299.

Many Japanese companies forecast their earnings based on an
internally projected dollar-yen exchange rate. That rate is
currently between 115 and 120 yen per dollar, Kataoka said, so
when the dollar trades in that range, exporters rush to sell.

U.S. sales by several Japanese automakers gained last year.
Honda Motor Co. posted a 7.4 percent increase in vehicle sales
from the year earlier, and Toyota Motor Corp.'s U.S. sales rose
10.6 percent.

The dollar gained against the euro after evidence that the
U.S. economy remains robust, while growth in Europe slows. U.S.
gross domestic product grew at a faster-than-expected 5.6 percent
annual rate in the final three months of 1998, suggesting the
Federal Reserve is unlikely to reduce interest rates and dull the
allure of the dollar.
---------------------------------
Chicago, Feb. 1 (Bloomberg) -- European Central Bank
President Wim Duisenberg said the ECB won't hesitate to act if
foreign exchange rates for the euro threatens price stability in
the 11-nation single currency region.

Duisenberg said he isn't worried about the drop in the value
of the European currency today, telling reporters after a speech
to that the slide merely reflects the string of indicators in
recent days pointing to a robust U.S. economy. He also signaled
that European rates won't be cut anytime soon, echoing remarks he
made on the weekend.
"The remarkable positive developments in the United States
economy certainly has impressed markets," he told when asked if
he was concerned about the euro's fall today. "The reverse of
that is some downturn in the exchange rate of the euro."

Duisenberg reiterated earlier comments that the 11
participating national banks deliberately didn't set a target for
the euro against other major currencies and said the value would
be based upon economic and market fundamentals. [This is an important and fundamental element of the newly evolved European monetary system of exchange rates. I will treat this later as time allows (as requested in USAGOLD's Msg #2122). --A III]

Duisenberg also said the lack of a target didn't mean
exchange rates between the major international currencies would
necessarily become more unsteady. He said pursuing stability-
oriented monetary and fiscal policy was the best basis for
fostering a less volatile exchange rate environment.
"I am for reasonably stable exchange rates. Who is not?"
Duisenberg asked.

Last week, Duisenberg said ECB monetary policy stance on
foreign exchange rates "was not one of benign neglect," adding
a "strong and abrupt" appreciation of the euro against the
dollar would be "a stronger reason" for lowering ECB rates.

Turning to interest rates, Duisenberg told reporters as he
left the Council of Foreign Relations that a rate cut isn't in
the cards soon. Asked if he is leaning toward easing credit, he
said: "Not for the time being."

Duisenberg's remarks struck the same note as those he made
yesterday, when he told the British Broadcasting Corp. that he
won't bow to political pressure to cut interest rates.

A cut would fuel expectations of a rise in inflation "and
that's what we want to avoid at all costs. We don't see signs of
a real recession. From that background there's no reason to lower
interest rates. I'm used to pressure from politicians and I'm
also used to withstanding that pressure," he said in the BBC
interview.

I liked your synopsis of the gold-carry. Since I must have a conspiracy to go with it, may I posit one? Thank you.

My suspicions go to the world of Rothschild, LBMA and Soros - and others on that strata. Buffett is no fool, but he is much more conservative than the likes of Soros and company. Maybe silver is all he's comfortable with.

I think these people are taking a huge, long-term, defacto short position against all major currencies. If I had $50Billion to spare, I believe that I could corner the gold market for awhile. The other buyers of the yellow - ECBs, Asians, jewellers, and gold bugs - wouldn't stand in their way.

These guys saw the gold-carry for what it is, a bomb with a hair trigger. If I talked gold down, bought it with fiat (even borrowed fiat)as the CBs released it and then waited/aided the price to rise to that trigger point, I would have a huge stash to slowly sell into the panic and I would pay off those pesky loans and watch as the financial world crumbles. Then use my barbarous relic to buy up the worlds' means of production and the resources to feed the factories at deflationary prices. Boy, would I be king-of-the-hill or what??? Comments, por favor.?

Since you brought up the subject, my friend, I must say that we spend much time discussing Y2K, the euro, the Asian contagion and the overvalued stock market. All of these pale however to the real question: Will John Elway will return for the three peat. Dare I make this question a posting contest?? The offensive line made their statement yesterday and it's "John, we've got you covered." They didn't lay a hand on him yesterday. My high school-cool daughter went to the parade and said it was great except everybody was mad because it took the Broncos so long to get there. I watched the Thunderbird flyover from my office window -- always a thrill. Go Broncos. Go Gold.

"They" may ALREADY be buying up the means of production!

Ever since the "failed crash" the day after the October '97 500+ drop, I have harbored a hunch that "They' are the true "dipsters." The observation that feeds this supposition is that several inverted V's have occurred just when sentiment would have indicated a substantial tumble. Purely wild theory, but???

Who do you think it is that has this huge stash of cheap gold? The most likely candidate based on your analysis would have to be the United States government! I wish it were the case. The bullion banks don't owe the gold -- they are just the brokers. It is the mining companies and hedge funds that are in gold-debt. The people -- world-wide -- are the ones who ended up with this cheap gold -- and, by the way, continue to buy this cheap gold. They are the ultimate beneficiaries of this fiasco. By the way, buying up assets with gold at deflated prices is precisely to goal of some gold investors long term. Who knows, that could even be what Warren Buffet has in mind. By the way silver lease rates bolted upward today. We haven't seen this since Buffet was in the silver market last year this time. Perhaps, today's gold and silver market action is what that blue moon is all about.

As I have read several places, existing world gold stocks are guessed to be 3Billion oz. Of that, 1/3 is accounted for by world CBs. 2Billion oz. in someone elses pockets. If one took the pro-rata share that the US population should hold, that means 500Million oz. owned by the sheep. If I was FDR and I had that number, sure, I'd take it too. "flick of the pen, law of the land; pretty cool." With all the gold-bashing for the last 20 years, I can't imagine that each household in the US (100Million) would have 5 gold eagles stashed away. Aside from us bugs, who else would really know the true value of the yellow?? Smart folks with deep pockets, I reckon'.

That's enough for a conspiracy isn't??? Please???

You put a smile on my face and warm a wintered heart....

You are right, governments historically have a tendency to view the gold holdings of their people as their own and they do use whatever propaganda devices they can get away with to pry it loose. Korea is a good recent example. U.S. 1933 is another. Taylor Caldwell posits the question to one of her heroes, "Do you believe in the conspiracy view of history?" The hero answers "Only a fool would believe otherwise." Are you happy now, Mr. Jinx-meister? I simply do not believe that the conspiracy exists at the level of the central banks. I will leave the rest open to discussion. Oh boy....Here we go....

...(he he he) now $290.40. Yahoooo!(.com not!) But let's not stop here.

A snippet from www.goldminingoutlook.com (Kaplan). You have got to love this man's work:

"SUMMARY:

My current outlook is VERY STRONGLY BULLISH. It is clear that commercials are very eager to accumulate gold at any
price below $300 spot, but have also been eager in the recent past to sell forward at any price above $300 spot. This activity
has been accompanied by strong worldwide physical buying. Gold has recently made a serious attempt to decline but has run
into significant resistance, indicating waning downside momentum, while seasonal factors support the case for a rebound. Once
investors are convinced that gold has a powerful base of support at or modestly below $300, the yellow metal is likely to once
again attempt to test the upside. Since the chance for a sudden sharp selloff in gold always exists, pullbacks should be used as
an opportunity to purchase undervalued gold mining shares as well as gold coins and other collectibles. Do not buy options or
on margin, so that the magnitude of the increase, rather than its precise timing, is of primary importance. Current valuations
represent a strongly favorable time to buy, especially with the volatility and pending collapse in U.S. equities and the plunge in
the U.S. dollar spurring a small but critical and growing mass of investors to search for viable alternatives. The announced failure
of an increasing number of hedge funds is the bold writing on the wall; only a fool would ignore its implications. As gold mining
shares become "trendy" (with the baby boomers around, you can count on it happening eventually), their prices could increase
rapidly. Keep an eye on the JOC commodity index as a trend setter; recently it has been recovering from historic lows. Take
advantage of the usual delay between the early stages of a stock market collapse and the beginning of a gold rally by buying
now. Carpe deum! (And also caveat emptor. Be discriminating, not speculating.)

Remember that buying gold mining stocks at current levels is like buying common stocks during the Great Depression: everyone
will say that you are crazy, there will be a lot of short-term volatility, and anything that you know to be logically true will seem to
be the inverse of actual market behavior."

-end-

I agree with Kaplan. Stick with gold and shares paid for in full. Leave futures and options for the pros or for that aspect of your portfolio you are willing to risk (and potentially lose). Futures and options have been fodder for the shorts and fuel their game. Step aside go for the physical... and watch them wave their arms in futility. Go for what you can hold in your hand. It is the most effective and expedient means to the defeating those who have attempted to keep their foot on gold's neck. In essence, if this rally holds, it will be because of physical demand.

After looking over the actions of the DOW, S&P500, and the NAS, it appears that the final closing numbers gave ominous signals. Note that the change for the day on the DOW was a bearish reversal ending down 13.13 points. IS THAT not a double unlucky signal ? AND to top that, the S&P500 also did a bearish reversal and ended down a total of 6.60 points. WOW -- was that close to the DEVIL's number !!!
<;-) (got to have fun when you can in this market !)

show gold at $291.50...hold the presses...it's now $291.80...no wait...$291.90...ah shucks...$291.70.

Yup, volume is good...lots of momentum.

Euro opened on 1-1-99 @ $1.17. Now one month later Euro is
@ $1.13. This represents a drop of over 3%. Why? What does this mean? Anyone have any thoughts on this. It seems that this is the opposite of what many were expecting.

Speculative thoughts would be welcome since there has been so much silence on this subject. Gold dies with this
senario, does it not?

Help!

Here, she captures a snapshot of 'lightning in the night' during the recent storm in Brazil...
'The decision to release the real was reportedly taken during a
late-night phone call from Finance Minister Pedro Malan to Cardoso on
Jan. 14 after $1.79 billion in foreign reserves had flowed out of the
country on that single day. Cordoso was vacationing at his family farm,
although his stay had already been seriously interrupted. Confronted
with the news that interest rates would have to be massively increased
to retain investment capital, Cordoso made his fateful choice. Central
bank spokeswoman Silvia Fria said, "The president decided the best way
out would be to let the exchange rate float." '

I hope to have more time tomorrow to post some thoughts on developments of recent times.

minutes of trading per lemetropolecafe. How drole.

April future contract for gold in overseas trading is now...

$291.10.


From kitco:


Date: Tue Feb 02 1999 15:30
sam (@FOXMAN - Hammered on the close) ID#29068:

Here is what happened -- Goldman came in at 2:00 and sold 1000 down to 290.8 ( on the April ) . Deutche &
Chase then did likewise ( w/ a 1000 each. ) Imagine that! The trader was instructed to sell _down_ to a price ( !?
) This was an obvious attempt to paint the tape on the close. Taken in conjunction with Clinton's comments, these
guys are nervous.

Anyway, Sam_A is back back!

Cheers all,

Sam_A.

from you know where...(kitco)...

Spindoctoring: releasing negative gold articles during a rise in gold prices. And the beat goes on.


Date: Tue Feb 02 1999 06:43
Speed (WSJ - On gold.....(is somebody getting worried?)) ID#29048:
Copyright � 1999 Speed/Kitco Inc. All rights reserved
Increasingly, Gold Is Just Another Asset

By MICHAEL M. PHILLIPS and TERZAH EWING
Staff Reporters of THE WALL STREET JOURNAL

Good as gold isn't as good as it used to be. Once the bedrock of the global financial system, gold is increasingly
just another asset in a world full of commodities, currencies and securities. President Clinton reminded the world of
that fact Monday when he submitted his fiscal year-2000 budget request to Congress. He told lawmakers he will
ask them to allow the International Monetary Fund to sell $1.4 billion of its gold stash to finance debt relief for
poor countries.

A few years ago that might have seemed careless. After all, the IMF is a financial backstop for 182 member
nations, and its huge gold reserve-103 million troy ounces -- is convincing evidence of its solidity.

But in today's low-inflation environment, the IMF's stock of dollars, euros, yen and other hard currencies seems
convincing enough. The administration calculates that a small risk -- selling five million troy ounces -- is justified by
the potential benefit from helping the world's poorest countries escape crushing debts.

Gold's crumbling popularity led to a sharp price decline between 1996 and 1998, from which the yellow metal still
hasn't recovered. The front-month February futures contract trading on the New York Mercantile Exchange's
Comex unit settled Monday at $289.20 a troy ounce. That was up $2.90 from Friday's close but still in the
doldrums long term: In March of 1996, the front-month contract's price was more than $400.

"The original argument that central banks, governments and multilateral institutions like the IMF should hold gold as
a way of being prudent no longer holds much water," said Barry Eichengreen, an economist at the University of
California at Berkeley.

Gold's decline in importance to international monetary policy began in 1971, when the U.S. abandoned its long
policy of buying or selling gold to approved central banks at a fixed price of $35 an ounce, and thereby killed the
last vestige of the gold standard.

"I think it's wrong to regard gold as being totally demonetized," said Philip Klapwijk, managing director at Gold
Fields Mineral Services Ltd., a London firm that tracks the gold market. "But I think that's the direction it's headed
in."

Critical has been the Federal Reserve's success in conquering inflation, which is running about 2% a year. Gold's
appeal to investors long has been as a hedge against inflation. "If the U.S. were to engage in a period of poor and
erratic economic policies, people would say they need
an alternative," said Morris Goldstein, senior fellow at the Institute for International Economics, a Washington think
tank. "But people now are happy to hold dollars." That's true of central banks and governments, too. Granted, the
U.S. hasn't seriously considered selling its ample gold reserve -- 262 million troy ounces -- and Fed Chairman
Alan Greenspan is known to oppose such a move. European Central Bank President Wim Duisenberg, eager to
win a reputation for prudence,
hinted just last week the ECB would hang on to its gold reserves.

But other countries -- including Australia and ECB member Belgium -- have liquidated some gold holdings. For
the past 10 years, central banks have sold an average of 9.3 million troy ounces of gold a year, according to Gold
Fields Mineral Services.

For now, the sale by the IMF as proposed by Mr. Clinton isn't likely to rattle markets because the idea has been
bandied about by government officials in several countries for some time. "To a large extent, the market has
discounted IMF sales, and the quantity isn't that significant," Mr. Klapwijk said.

But gold's decline as a reserve asset has made it a tempting target for politicians looking for resources. "People
look for pockets of finance that haven't been tapped yet and don't involve going directly to Congress
to ask for money," Mr. Goldstein said.


Government Gold Holdings in million Troy Ounces ( October 1998 )

country.............gold

US...............262
Germany...........95
Switzerland.......83
France............82
Italy.............67
Netherlands.......27
Japan.............24
United Kingdom....18
IMF..............103

Which of the following would manipulative, secretive, MOU types likely be up to?

A. Announce their intention to sell a bunch of gold so the price will be lower when they do.

B. Announce a false intention to buy a bunch of gold so shorts can cover their positions at better prices.

I've always wanted to do this -- sentence by sentence. Tonight I decided to take the time to do it.

My comments (in paranthesis) follow each point in the article.
__________________________


Article: Good as gold isn't as good as it used to be.

USAGOLD Comment: (Except to the millions who are buying it as a hedge against Y2K and dollar debasement.)

Once the bedrock of the global financial system, gold is increasingly just another asset in a world full of commodities, currencies and securities.

(Except to the largest central banks operating in the world's strongest economies who have not sold an ounce of gold in decades despite stories like this one.)

President Clinton reminded the world of that fact Monday when he submitted his fiscal year-2000 budget request to Congress. He told lawmakers he will ask them to allow the International Monetary Fund to sell $1.4 billion of its gold stash to finance debt relief for poor countries.

(Think about that for a moment. Why not just distribute the gold to these poor countries so that they can use it as a reserve against their own currency. Why a sale? Just pass it out. In fact let's pass it all out an get it over with.)

A few years ago that might have seemed careless. After all, the IMF is a financial backstop for 182 member nations, and its huge gold reserve-103 million troy ounces -- is convincing evidence of its solidity.

(Isn't this the same IMF that just crawled on its hands and knees to the U.S. Congress for a handout which they immediately dumped into the black hole of Brazil never to be seen again. Solidity? You've got to be kidding me. Who do they think reads these articles? Morons?)

But in today's low-inflation environment, the IMF's stock of dollars, euros, yen and other hard currencies seems convincing enough.

(Who is this convincing? Where were these dollars, euros, yen and other hard currencies when Brazil was tanking? What was the IMF doing at the U.S. Congress looking for a handout if it had all these "hard currencies?")

The administration calculates that a small risk -- selling five million troy ounces -- is justified by the potential benefit from helping the world's poorest countries escape crushing debts.

(What is the risk they are talking about? It's not Clinton's gold -- it belongs to all the contributors. No takers? Give me a break. The last time they tried this in the 1970s the market anticipated the sales and the big players waited to do their gold buying at the IMF auction where they knew they would get it cheap. The price rose throughout the sales.)

Gold's crumbling popularity led to a sharp price decline between 1996 and 1998, from which the yellow metal still hasn't recovered. The front-month February futures contract trading on the New York Mercantile Exchange's Comex unit settled Monday at $289.20 a troy ounce. That was up $2.90 from Friday's close but still in the doldrums long term: In March of 1996, the front-month contract's price was more than $400.

(Gold demand has steadily increased from 1996 -1998. We would like to know why the price hasn't responded.)

"The original argument that central banks, governments and multilateral institutions like the IMF should hold gold as a way of being prudent no longer holds much water," said Barry Eichengreen, an economist at the University of California at Berkeley.

(University of California at Berkley. That says it all. Tell the BIS this and the European Monetary Institute. While you're at tell China, which intends to add at least 1000 tons to its reserves. As a matter of fact, I would suggest that Mr. Clinton contact the premier of China with his 145 ton gold sale. It would save him the cost of arranging for and publicizing the sale. The would like write a check for the tranch in its entirety. In fact why was this dog and pony show necessary, I could have sold with a single phone call. I hate to throw water on the president's plans, but his is small potatoes.)

Gold's decline in importance to international monetary policy began in 1971, when the U.S. abandoned its long policy of buying or selling gold to approved central banks at a fixed price of $35 an ounce, and thereby killed the last vestige of the gold standard.

(Isn't that the period gold went from $35 to $800? Does this prove that nations do not need to be on the gold standard to stand behind the value of their currency or the point the article tries to make? And why did the new European Central Bank put a 30% gold component in its reserves anyway? Because its a barbarous relic?)

"I think it's wrong to regard gold as being totally demonetized," said Philip Klapwijk, managing director at Gold Fields Mineral Services Ltd., a London firm that tracks the gold market. "But I think that's the direction it's headed in."

(I thought GFMS was supposed to be on our side. Think European Central Bank.)

Critical has been the Federal Reserve's success in conquering inflation, which is running about 2% a year. Gold's appeal to investors long has been as a hedge against inflation. "If the U.S. were to engage in a period of poor and erratic economic policies, people would say they need an alternative," said Morris Goldstein, senior fellow at the Institute for International Economics, a Washington think tank. "But people now are happy to hold dollars." That's true of central banks and governments, too.

(The 1970 dollar is now worth about 25�; the 1980 dollar, during this supposed period of disinflation is worth about 50�. The only victory's against inflation have been of the rhetorical variety propounded by "fellows" at think tanks who advocate the views of those who fund them.)

Granted, the U.S. hasn't seriously considered selling its ample gold reserve -- 262 million troy ounces -- and Fed Chairman Alan Greenspan is known to oppose such a move. European Central Bank President Wim Duisenberg, eager to win a reputation for prudence, hinted just last week the ECB would hang on to its gold reserves.

(Thank you for granting this seemingly insignificant point. Unfortunately it undermines the rest of the article. Why do Greenspan and Duisenberg oppose selling this gold? Is this why we trotted out the good ole IMF gold sale propaganda pieces again? )

But other countries -- including Australia and ECB member Belgium -- have liquidated some gold holdings. For the past 10 years, central banks have sold an average of 9.3 million troy ounces of gold a year, according to Gold Fields Mineral Services.

(And their currencies went immediately into the tank. 9.3 million ounces amounts to 286 tons a year against a demand of nearly 3000 tons. Official gold sellers almost always do so because they "have to" not because they "want to." Most central bankers adhere to the Greenspan-Duisenberg position.)

For now, the sale by the IMF as proposed by Mr. Clinton isn't likely to rattle markets because the idle has been bandied about by government officials in several countries for some time. "To a large extent, the market has discounted IMF sales, and the quantity isn't that significant," Mr. Klapwijk said.

(I don't think Clinton will get to first base on this unless the Asian and European central bankers see it as a way to rid themselves of the base dollar reserves which very likely make them very nervous at the moment. I will direct you to my post of a few days ago when I wondered if the demand for the euro in exchange for dollar reserves would cause ECB to step up to the Treasury gold window. Perhaps at the root, this is the reason for the discussion of IMF sales. Stick the IMF with the dollars. By the way, why do they always save the nitty-gritty in these anti-gold tirades for the end of the article? )

But gold's decline as a reserve asset has made it a tempting target for politicians looking for resources. "People look for pockets of finance that haven't been tapped yet and don't involve going directly to Congress to ask for money," Mr. Goldstein said.

(I wonder why. I knew the truth would eventually come out. As I say let's give it all the IMF gold to the third world countries and get it over with. One point, could you provide me with some hard numbers proving this claim that gold has declined as a reserve asset. To the contrary, it is growing in stature worldwide.)

$290.50...

Good job on that USAGOLD.

Just past midnight NY time the afterhours APR Au was at 291.0 which was the ask side, BUT the ASK size was a WHOPPING 104 contracts ! SOMEONE does not want APR Au to go above 291.0 !!!! Pecking away, one at a time.
<;-)

Looks like a battle line has been drawn from $289 through $293.00. Set up the barb wire to corral the enemy into the crossing lines of fire. Dig in, the battle in gold has begun.

April gold futures contract in overseas trading is now $290.80.

Commodity prices may not fully recover-World Bank

WASHINGTON, Feb 3 (Reuters) - Prices for oil, wheat, cotton, aluminum
and other commodities which have fallen sharply since the Asian
financial crisis may never fully recover, the World Bank said on
Wednesday in a new report.

"If we are experiencing a structural break in commodity prices" due to
advances in technology and freer trade, "we would not expect prices to
fully recover from current low levels," the World Bank said.
"Commodity prices may have taken another step down in the long history
of declining prices relative to those of manufactured goods."
----------------------------
Apparently, the largest population the world has ever known has come to an unprecedented development such that the value of raw materials has been lost. Do not believe it! A shift is occurring that is decoupling the link between price (dollars) and value. Contrast the prices and values of stocks and 'Beanie Baby' toys on one hand with gold, oil, and agricultural products on the other. This is an unsustainable disparity between price and value if indeed price is to remain a measure of value (as it has in the past). If the decoupling continues, in an open battle of price vs. value, value has an ally that will crush the consept of price (dollars) as meaningless. That ally is man's basic requirements for existence. As the sun sets, and you face the next uncertain new day, would you prefer to command a warehouse full of 'prices', or a warehouse full of 'value'.
If you have a dollar to spend, choose wisely.

Because of numerous requests and for archival purposes, I will begin posting this report at the FORUM daily.

MARKET UPDATE (2/3/99): Gold began its descent late yesterday afternoon when major Wall Street financial institutions sold large futures' lots short toward the end of the session. The sell-off coincided with a plea by Bill Clinton to IMF member nations to sell off a small portion -- about 145 tons -- of the International Monetary Fund's gold holdings to "finance debt relief" for poor, third wold nations. In other words, Clinton views the sales as a means to repaying international banks on the hook for massive bad loans in the third world. To give you some background on how this proposed gold sale would measure up against international needs consider that the 145 tons equal less than $1.5 billion at current gold prices. Brazil just received a $41 billion loan from the IMF and that disappeared like so much water down the proverbial drain. They either need to raise the price by about three or
four times or find substantially more gold for this purpose.

FWN reported the following about yesterday's end of session activity: "But then around $290 in the spot market, a large producer sell order was executed, he said. 'It took the weight out of the market,' he said. 'Plus, it was toward the close, so there was a bit of long liquidation by some of the locals who had gone long during the day. It hit a wall. But it was also at a time of day when nobody wanted to stay long.'

The following was posted at the Kitco site: "Here is what happened -- Goldman came in at 2:00 and sold 1000 down to 290.8 ( on the April ) . Deutche & Chase then did likewise (w/ a 1000 each. ) Imagine that! The trader was instructed to sell _down_ to a price ( !?) This was an obvious attempt to paint the tape on the close. Taken in conjunction with Clinton's comments, these guys are nervous." Though this appears to be information from someone present on the floor of the COMEX, we have no way of verifying its accuracy. We offer it as an interesting foot note to yesterday's strange goings-on. The 24 hour graph on gold certainly reflects the presence of the parties mentioned. Gold seems to suddenly plummet inexplicably at the end of the session - -inexplicably unless you have the above information.

Today gold continued the trend begun late yesterday. There is little in the way of additional news. I must confess it is odd that these producers show up at the most inconvenient times and kill rallies. It is also odd that this event would coincide with a speech by the president of the United States advocating IMF gold sales.

That's it for today. We will update if anything develops. Have a good day, fellow goldmeisters.

From review of the data on Quote.com for the APR Au futures contract, it appears that "dumping" about 1,000 contracts will move down the contract price a little over $3. This shall be of note in the future when the shorts must run to cover. How many shorts are there on the APR Au ? On Wednesday, 2/3, just before noon the APR Au price is holding just about 289. and pecking away at the large overhead Ask size. Peck Peck Peck
<;-)

WOWERS ! As soon as I had posted the last discussion of the APR Au contract, "someones" DUMPED over 100 contracts and sent the price down $1. to the $288. level. MANNA from Heaven ! (AND mo data for da future)
<;-)

LOVE IT ! It only took less than 15 minutes and less than 75 contract purchases to bring the APR Au contract price back above the $289. price ! PECK PECK PECK
<;-)

Copyied below is a post from another discussion list that falls in line with what's been discussed here recently. I intentionally edited out any reference to names due to possible privacy concerns. Perhaps the person who wrote it lurks here and will join in our ongoing discussions. For your consideration:

>Cleared Funds Availability Act is designed to protect the banks from being discovered from the fraud they wreck under the guise of fractional reserve banking. This legislation provides that in the event of a run on the banks, the banks need only distribute limited amounts of currency. The benchmark is $100.00 U.S. per check regardless of the face value on the check. The fractional reserve system says that if you have $1.00 in deposits you can make "loans" of $100. You need only have a "fraction" of actual cash reserves on hand. The banks are not loaning money, they are loaning credit created out of thin air when they write the amount of the loan on the promissory note signed by the "borrower". The fraud here is obvious. How can you lend 10 apples when you only have one in hand? The Cleared Funds Availability Act is there to protect the banks from exposure. The way to discover this and challenge your local banker is to ask to see the Cash Reserve Position of the bank and then compare it to the Checkable Balance. How is it possible to be able to write checks against a checkable balance that exceeds the cash reserves available to cover those checks? I believe that in opposition to the Know Your Customer rules coming down from OECD, the good people of the world should institute a Know Your Bank program and explain this fraud to everyone within e-mail and shouting distance.

Senate bill 8125 (I'm relatively certain this is the number; I'm absolutely certain of its effect) created the provision of two-tiered U.S. currency. The U.S. economy will probably be collapsed by devaluing the U.S. dollar within the next 8-18 months. This is due to the enormous amount of U.S. debt. The U.S. dollar is not actually a dollar, it is a promise to pay a dollar in the future. However, this note is non-interest bearing and non-redeemable. It has no maturity date. It is called a Federal Reserve Note. A note is evidence of debt, not value. There are so many in circulation that their value is being artificially propped up by the IMF. Well, times are gonna change. After the U.S. economy is sacked, the U.S. dollar will be converted to an internal dollar for the American people and an external dollar to compete on the world market. The U.S. will require full currency reporting when the changeover is made. The theory being that those who have gained their "wealth" (no matter how many worthless notes you have, it is not wealth) outside of the permitted channels or not reported will be unwilling to report or exchange. The value of these dollars not reported and not exchanged, and from that point forward worthless, represents the reduction of the U.S. debt accomplished by this scheme. The two new currencies will be entirely different from what you see on the streets today. The U.S. "phonies" will be much more in line with many of the European style currencies with multi-colored schemes. Soon, the ECU will replace the U.S. dollar as the reserve currency.

It's the time honored tradition called debasement of the currency. Whenever the king changes the value of the money, the amount of the change is the amount stolen from the people.

Thanks for the repost of the article, Turbo. BUT I detect a few errors of fact in the flow. First, the "Know Your Customer" proposed legislation is NOT pushed by the OECD !
As a former US representative to the OECD, I can confirm that this is not of interest to the member nations. Second, I do not believe that the US$ is "being artificially propped up by the IMF" !!! Someone is great at spinning from a few truths into something that is "FAR OUT" and intended to only cause concern and worry. These items are hard to sort between the wheat and chaff to obtain the real truth. Discussion is the key to obtaining the truth ! Thanks again for the discussion item.
<;-)

Gandalf -Steve- T.Remital. Note that yesterdays "dump & smear show" was EXACTLY at the point where the close of the April contract above $292.50 was immanent. Nevertheless, whereas last week the trading zone was capped By the $286.-7. band (Spot), that is now the bottom, (at the moment), with continued trading above $290. needed to establish a higher range level.

Gandalf, your observation of up and down quantities per dollar is quite useful. Where is that data available, and does anyone have a web address for better charts then on Kitco?

Gandalf's source of data on the APR Au contract is not his usual Crystal Ball but the hangout of both Steve and me at Quote.com chart ! These can be reached at http//fast.quote.com/fq/quotecom/livechart?mode=livechart&symbols=
this service is available in both delayed 20 minute at the price of FREE and realtime by subscription. The charts are able to be read in "all sessions" (after hours trading) and in various minutes to days sortings. ALL one must do is sit and watch the boobtube thingie all the time. It used to be VERY boring, (like watching grass grow in the winter) BUT as of late it is better that winning at hearts all the time on the Yahoo and MSN game zones.
<;-)

True, the KYC regs are being pushed by FinCEN and the FDIC. The US is, however, using the IMF, along with other means, to prop up the international banking system and it's dollar-based credit system.

That aside, one should be wary of the existence of 2 bills ... the govt now has an expanded ability to manipulate the system by, say, devaluing one of them if hoarding were to become a problem. Furthermore, it is my understanding that the new bills have technology implanted in them to make them easily detectable, even from a distance, ostensibly to discourage counterfeiting.

Owning gold would allow one to acquire other currencies should the need arise due to a worthless or devalued dollar.

Thanks for the followup. NOW, I can agree with all three of your paragraphs, especially the latter one !
<;-)

The last 30 minutes of the APR Au contract was also interesting. At about 2:10 NY time (with twenty minutes to go) the price had risen back to 289.8 on about thirty contract upticks, when SURPRISE, "someones" dumped another 100 contracts on the sell side and drove the price down to 289.0 before the last minute action brought the settle price to 289.30. Love these opportunities to get these gifts from the future bigtime losers !!
<;-)

the red again with current trades at $288.90. Rally squelched? I guess we will find out. Awfully curious, eh?

celui-ci, c'est le meilleure. Any translators out there care to tell us what this means in great detail. Merci.

from this site: www.scdut.com/ave/aad.html

L'or a entam� un redressement assez spectaculaire depuis la fin de la semaine derni�re en
repassant au dessus de 285$ et en s'approchant de sa r�sistance baissi�re de long terme (mardi
02/02) qui passe maintenant � 290$. Si l'or arrive � passer au dessus de 290$ et r�ussi � s'y
maintenir quelques jours alors il y de fortes chances pour que l'or reparte dans une tendance
haussi�re de plusieurs mois. Sur le premier graphique vous pouvez voir que l'or est quasiment
sur son point de retournement haussier � 290$. Vous remarquerez que le RSI � 14 jours vient de
casser sa r�sistance baissi�re en bleu (cf. fl�che rose) ce qui est tr�s bon signe et qui risque de
pousser l'or � faire de m�me en passant au dessus de 290$. En chandeliers japonais
hebdomadaires il faut noter une tr�s belle configuration de retournement �tablie depuis trois
semaines au jolie nom d'�toile du matin en doji, cette configuration marque souvent le point
d'arr�t d'une tendance baissi�re et le point de d�part d'une remont�e des cours de plusieurs
semaines. Le indicateurs hebdomadaires (2�me graphique) macd et stochastiques donnent un
signal d'achat simultan�ment ce qui laisse entrevoir d'ici peu une rupture de 290$. Les
indicateurs macd et stochastiques mensuels restent eux toujours tr�s positifs. En r�sume
l'environnement technique de l'or c'est encore am�lior� depuis quelques jours. Une derni�re
petite consolidation de quelques dollar n'est pas � exclure avant que l'or arrive � passer au
dessus de 290$. L'or reste toujours en phase avec sa d�composition elliotiste avanc�e la
semaine derni�re nous devrions avoir fini une vague 2 de baisse et r�aliser une vague 3 de
hausse avec des objectifs compris entre 315$ pour l'hypoth�se basse et 360$ pour l'hypoth�se
haute. Je serais � la place de tous les intervenants qui ont vendu � d�couvert du m�tal jaune, je
commencerais � me faire un peu de soucis car la probabilit� de gain diminue un peu plus tous les
jours. Le jour o� ils vont �tre obliger de racheter leur position sera probablement m�morable. A
suivre...

L'OR A PLUS LONG TERME

J'attire votre attention sur l'environnement technique du m�tal � long terme. Vous pouvez vous
rentre compte sur le dernier graphique. Vous pouvez voir sur le graphique hebdomadaire
l'apparition d'une divergence positive entre les cours et l'indicateur MACD. Vous retrouvez
�galement une divergence sur le graphique mensuel entre les cours et l'indicateur Stochastique,
celle-ci est �galement accompagn� d'un double signal d'achat en septembre sur le MACD et le
Stochastique (cf. fl�ches du deuxi�me graphique ). Comment faut-il interpr�ter cela? Eh bien je
crois que le march� de l'or est en train de se construire des fondations solides entre
280-300/315$. Mais souvent comme toutes fondations, celles-ci prennent du temps et se font
dans une fourchette �troite entra"nant de faibles variations, et ne rendent gu�re facile
l'investissement dans ce secteur. Mais je crois que l'�dification de ces fondations touchent � leur
fin et qu'une hausse d'envergure de plusieurs mois voire ann�es n'est pas � exclure. Quel timing
peut-on esp�rer? Une hausse jusqu'� la partie extr�me de cette zone de support c'est � dire 315$
reste le premier objectif. Un franchissement par le haut de cette zone sonnerait l'inversion
compl�te de tendance du march� de l'or, celui-ci repasserait dans une configuration haussi�re de
long terme avec objectif � 350,370,400$. Il faut savoir que techniquement le march� ne c'est
trouv� dans aussi bonne configuration pour inverser sa tendance baissi�re de fond. On peut
constater le m�me ph�nom�ne sur l'ensemble des mines d'or qui forment des fondations d�j�
depuis plus d'un an. Si l'or arrive � passer au dessus de 315$ dans l'ann�e 1999 alors les mines
r�aliseront des scores certainement plus importants qu'en 1993 o� les mines avaient gagn�s
entre 300 et 500%. En effet celles-ci ont baiss� consid�rablement leurs co�ts d'extraction et il
ne faudra pas attendre une once � 350$ pour que ces mines passent d'une situation de rentabilit�
n�gative � une situation d'hyper rentabilit�.

My dear friends,

In passing, I came across this private mail from Another that I do not believe was ever published. I went back to the archives and did not find it. If I am wrong in this please let me know. The circumstances under which these "Thoughts" were received are evident in the exchange. What strikes me again, as so many time in the past, is the total and complete prescience of Another. I thought to go back and find this entry after reading Andrew Rothovius� important newsletter received just a few days ago wherein he talks of a clear cut swath between Hong Kong and the Netherlands through which will run a railroad, highway and communications wire connecting Europe and the Orient -- Marco Polo's dream and the dream of the New Europe. How often have the short-sighted among us pressed Another on unimportant price predictions (quite often taken out of context) while ignoring the fundamentally important societal developments in which he himself was so interested? Societal developments that make the price predictions insignificant in comparison. It was Another, in my early questioning of him, who laid out the important development of links between China and Europe as an important development in the real new world order. It was new to me, as you can tell if you go back through the archives and check, but unbelievable with respect to how close they landed to reality. Tomorrow, given the time, I hope to provide a glimpse of Rothvius� important thinking not just on the China-Europe connection, but his advanced analysis on the Gulf region as well. You will come away from this much less innocent than you are now.

Below Another predicts the very situation in which we find ourselves today with respect to the euro. It was posted to me July 9, 1998.
_________________________________


MIchael,

This is the copy of a question from you. I believe you lost your file of it:

" I have a question to go with the one's below:

I have been criticized for tying gold reserves to future gold backing for the euro overall money supply. I do not see how you can increase the overall money supply without increasing gold reserves. Why? Because the currency will then come under attack by speculators, investors, etc. exchanging it for gold in the open market. Am I right
on this, or am I missing something. I was critized privately for this by a professor at Princeton University who probably would rather stick with fiat money. (Could I ask you to reply to this privately as I am developing my own thinking on this?) "

This was the reply I sent you:

" Re: A FEW MORE QUESTIONS........ To: cpm@usagold.com

Mr. Michael Kosares,
Your professor at Princeton University could be right and wrong concerning gold reserves for Euro. The 40 to 50 billion "exchange reserves" in the ECB are to be as the total amount for the Euro! This amount is to back / defend entire Euro currency. There be no "set percentage". What is missed by many is this: In beginning there will be much "selling" of Euros for dollars to keep the Euro from rising much to fast. This inflow of dollars into reserves will create a very large "dollar / gold cross" buying of gold! No Euro group banker, in good mind, will be selling gold for dollars! The gold portion of Exchange reserves will increase "very much" as dollar price rises. Please note: As the all other currencies will still peg to dollar for reserve, in
beginning, gold will rise in all currencies, except Euros!
The new Euro is not true gold backed or gold reserve currency! This was roll of old US dollar. The dollar did never hold gold as "exchange reserve asset", which is many times much more powerful financial tool! Few understand this! Gold exchange reserves for the Euro was pushed thru
by Euro Group / BIS at request of oil!

Another

Michael,
I hope this answers your question. thanks FOA "
___________________

And so we beat on boats against the current borne back ceaselessly into the past...........G'night...all.

Question for Michael or any one.
When some government or some foreign group has a large position (100 billion for this scenario) in US Dollars (bonds notes or bills) and it reaches maturity, and they decide not to roll it over or they choose not to except the going rate at the next auction. How is this settled? Does the US Treas. keep a fixed percentage of outstanding debt in Foreign currency reserves? If they pay out $100 billion, how do the rebalance their reserves? (Print more money)? At what point do they have to raise rates to slow down the return of all that $paper$ ?

back to $289.30.

Here is a good one:

Date: Thu Feb 04 1999 03:22
Cage Rattler (Central Banks told to sell gold) ID#33184:
Copyright � 1999 Cage Rattler/Kitco Inc. All rights reserved
Head of global mining research at French Bank Paribas S.A.; Michael Coulson, said that Central Banks should
dispose of three quarters of their gold reserves in an orderly fashion in an effort to stabilize price, as unenthusiastic
holders of gold, their lending and selling has led to its poor behaviour since its peak. It would be a shake up to the
market. Gold is being used in the derivatives market which, as the price falls producers rush to buy gold
deriavatives to hedge their production, pushing down its value further. Central banks should sell - for market to
return to normal health.

Source: Dow Jones

MARKET UPDATE (2/4/99): Gold began to recover from the downtrend of the past two days in the early going today. The dollar is up against most currencies including the euro --which achieved a new low against the dollar since its January inception. Signs continued to point toward an overheating economy and inflation's return. Long term bond rates pushed to higher ground and retail sales data came in unexpectedly strong. According to Reuters this morning, Morgan Stanley is advising its clients to trim stock positions and begin raising cash.

Following our treatment of the possibility of IMF gold sales yesterday, we find an article published by Reuters late yesterday saying that unidentified "monetary" souces at the Davos conference as saying that "no gold sales are likely in the near term." To sell any of gold, 85% of the votes would have to be in favor. The U.S. Congress would also have to approve the sale. The last time the subject of IMF sales came up, the idea received the support of the United States and Great Britain but was stiffly opposed by Germany, Japan and France. The leftist German government has shifted on the issue in recent months though it is unclear if support for the sales stretches beyond the office of Gerhard Schroeder, the new German chancellor.

Beyond that there's not much in the way of gold news today.

FWN forecasts the following floors and ceilings on gold: "Support for April gold was put at $288, then $287 and $286 ahead of last week's $284 low. Resistance was pegged from
$291 to Tuesday's $292.60 high, followed by $293.80 and $296.50."

That's it for today. We will update if anything develops. Have a good day, fellow goldmeisters.

gud morning.. WE are fast approaching the break out points [292.50 april au and 66.00 xau closes only]...it wouldent
suprise me to see a volume increase on all fronts in gold bullion and stocks, as the financial world recognizes that
inflation will return with avengance, devaluation of currencies world wide, interest rates rising, stocks plunging and
all the tools such as the IMF fail to stem the tide. with money supplies all over the world rising its only a matter of
time before the Group of seven will look to gold to rescue the system....

more later...

"It looks to us like silver is going to run," said
Leonard Kaplan, chief bullion dealer with LFG Bullion
Services. "All of the market internals have been very
bullish. The lease rates and forward rates in silver are
indicating to us that we're going to go a lot higher."

In one week, he related, lease rates in silver have
doubled. The one-year rate is currently around 5%, versus
approximately 2.5% seven to 10 days ago, he continued. The
one-month rate is currently around 3.25%, versus 1% a month
ago.

"This is almost a replay of what happened a year ago
when silver went to almost $8 on the Warren Buffett news,"
said Kaplan. He was referring to the accumulation of 129.7
million ounces of the metal announced last February by
Buffett's Berkshire Hathaway.

Kaplan noted commodity funds "have piled in on the long
side" of the market.

"There is really no fundamental change this week from
last. But silver has a tendency to just sit and sit and sit
at an undervalued price, and then explode," he said.

But while he characterized the indicators as bullish
for silver in the longer term, he noted that the metal might
be overbought in the short term, as it trades in the $5.60
area for the March futures.

"We believe that a 30-cent drop could occur and the
market would still be good," Kaplan continued. "It's going
to be vicious and it's going to be volatile, but we do see
it going higher."

Later, he added, "What's going on is obviously being
done predominantly in London and in cash and is being very
well hidden. No one really knows what's going on or who is
doing it. But they seem to be doing all the right things to
propel prices higher."

Support for March silver was put around $5.45 to $5.48.
Initial resistance was put around $5.65 to $5.66, although
it was termed "not that serious," with the next major level
not seen until $5.78 to $5.80.

Gold futures are up modestly so far this morning.

"I believe the move higher is partially in sympathy
with silver, and the fact that over the last couple of days,
they have hammered it (gold) pretty good," said Kaplan.

As have others this week, Kaplan noted that the
"massively" short net position of the funds could make this
market prone to a large short-covering rally.

In the cash market, he related, excellent support for
gold is seen around $285, which would translate to around
$286.80 in the April futures.

Initial resistance is seen around $290 to $291 in the
cash market, with a break of this making a move to $294.50
to $295 possible. For the April futures, resistance would be
seen around $291.80 to $292.80, with penetration of this
making $296.30 to $296.80 possible.

Reprinted by USAGOLD with permission. Further reproduction prohibited.
For detailed information, please go to : http://www.futuresource.com/internet.shtml

Gary North's REALITY CHECK
Issue 35
February 3, 1999

SIMULTANEOUS FORECASTING ERRORS

To understand why the capital markets are not reacting
to the threat of Y2K, we must understand Ludwig von Mises'
theory of simultaneous forecasting failures. It applies to
the fractional reserve banking system's expansion of
credit.

In 1912, Mises's classic book appeared, THE THEORY OF
MONEY AND CREDIT. In it, he argued for a theory of the
business cycle -- booms and busts -- based on the effect of
fiat money -- credit money or fiduciary media -- on the
interest rate. He offered a short version of his trade
cycle theory in 1949 in Chapter 20 of HUMAN ACTION. (You
can order a reprint of this book from http://www.mises.org)
His theory was presented to a wider academic audience in
the 1930's by his disciple, F. A. Hayek. Almost no
economist has ever believed it.

Mises asked this: How is it that, in a free market, so
many businessmen make the same mistake of expanding
business in a boom, which leads to a contraction (bust)?
Why shouldn't the errors of groups of entrepreneurs offset
each other? In short, why the simultaneous forecasting
errors?

To answer this, he argued, we must look at the common
element in the market: money. Fractional reserve banks
increase the money supply by lending it into circulation.
With a 10% reserve ratio, a $100 initial deposit becomes
$900 of money.

The increased supply of money initially lowers
interest rates: more money + stable demand = lower price.
The price of money drops. But if the process of money
expansion continues, the new money will be used by buyers
to bid up prices. This will raise long-term rates, for
lenders will tack on an inflation premium to their loans,
to compensate them for the expected loss of purchasing
power.

The boom is created by the low initial interest rates,
which lead entrepreneurs to conclude that the savings rate
has increased. It hasn't. Instead, it was the fiat money
has lowered the price of loans. There has been no increase
in thrift. So, when consumers get their hands on the new
money, they will bid up prices of consumer goods, and even
go into debt to buy them. Interest rates climb. The
public did not want to save more. So, those businessmen
who started projects find that they cannot complete them
when the interest rate rises. The bust phase replaces the
boom phase.


NO OFFSETTING PLANS

Today, investors do not recognize the threat of Y2K.
Neither do consumers. Everyone is enjoying low price
inflation. The FED has lowered interest rates by
increasing the money supply mildly. But foreign
competition keeps prices low. It's the best of worlds in
1999.

We do not see entrepreneurs selling off stocks and
bonds and moving into CD's or other short-term instruments.
They are expanding their businesses. They are running full
steam ahead. Why? Don't they see the threat?

No, they don't. Men want to believe that good times
are normal and bad times are the exception. They think the
world owes them good times. They are not amazed by years
of prosperity. They expect more of the same.

This computerized economy has rewarded the innovative
entrepreneurs who cut costs by moving their information
systems to digital form. It has led to the destruction of
old ways of managing, production, and distribution. The
old ways persist in some peripheral industries, but these
are not significant in the economy any longer. I call them
the cottage industries. They are the ones that will find
it impossible to respond to large increases in demand.

The survivors of the computer wars believe in
computers. After all, computers gave them their
competitive edge. Those who built fortunes with computers
cannot accept the fact that these computers were programmed
wrong from the beginning. The computers giveth, and
computers taketh away.

It is too late to revert to pen-and-paper management
systems in any but the smallest production units. But if
computers start spewing out inaccurate data, the existing
systems will shut down, either through digital command -- a
modern paper mill, for example -- or through bankruptcy.

We are dealing with religious faith. Men do not
abandon the religions that they held when they became
successful. The religion of just-in-time production rests
on digital coordination. To lose faith in computers is to
lose faith in men's ability to structure complex systems
through digital simulations and record-keeping.

Our production systems are too complex for mere
mortals to manage apart from computers. Yet we must learn
how to manage them. So, there must be a great
simplification of production and distribution in 2000.
This is what I mean when I speak of the collapse of the
division of labor. Men who have achieved success in niche
markets will find that these markets no longer have any
demand in 2000. They will see their lifestyles fall as
never before in recent memory -- and possibly in recorded
history.

Think of those beggars' signs: "Will Work for Food."
Think of the businessmen in the 1930's who sold apples on
sidewalk stands. That's what is coming. But almost no one
sees this. They all admit that ours is a knowledge
economy, but they do not admit that Alzheimer's threatens
the world's electronic brains.

This is why we do not see entrepreneurs selling off
assets that depend on computers. The stock market has not
collapsed. We do not see urban streets filled with For
Sale signs. We see commercial construction. We are still
adding to our stock of capital, which means capital that is
dependent on future consumer demand. But future consumer
demand rests on future productivity by consumers. That is
what y2k calls into question.


INVENTORIES

The production revolution created by computers is a
revolution in inventories. They have been cut to the bone.
Just-in-time production and distribution have reduced them,
thereby cutting carrying costs for sellers. But this has
been accomplished at a tremendous cost: capital costs of
these new systems of production. Free market entrepreneurs
have invested trillions of dollars in these new systems of
production. If these systems go blind, these investments
will fall to close to zero value. The stock markets of the
world will collapse.

To cut the size of inventories, entrepreneurs have
place us all in great peril: the possibility of a break in
the supply chain. If the supply chain breaks, then we as
individuals are without reserves. A break in the means of
payment is one such break. So is a break in electrical
circuits. If the grid goes down, this civilization goes
down.

It is not possible to add to an inventory of
electricity. You can buy a battery, but not to run a
chemical plant. The inventory of power stored in fuels
must be transported and converted into electricity. If
that supply chain breaks, we're dead. Millions of us will
die. Hundreds of millions of us if the grid stays down.

Why? Because we have no inventories. We are not
farmers who refused to sell their crops until they had a
year's supply in storage. They saved food and simple
tools, not money. They let the city slickers save money.

We save electronic digits. If the computers that give
these digits value -- i.e., a future stream of real income
-- should die, then all our paper print-outs will mean
nothing. They will mean less than a bank passbook meant to
a depositors in an uninsured rural bank in 1932.

Digits are promises. They are electronic testaments
to our faith in unbroken supply lines. They may become
last words and testaments in 2000.

People refuse to admit to themselves that this threat
exists. It exists nonetheless. The code is objectively
broken.

Inventories of basic goods are not that expensive to
assemble. They may not be cheap to store. If you don't
have a basement or underground storage area, it will cost
you a lot of money to store a year's supply of food, liquid
soap, detergent, toilet paper, etc. Here is my point: you
have only a few months to assemble the inventories you need
for basic survival. The entrepreneurs have substituted
sophisticated supply lines for inventories.

Last weekend, I was involved in a church project. Ten
men came to a warehouse and poured sacks of pinto beans and
rice into buckets. It took some coordination. What made
it possible was one member of the congregation who had a
lot of spare space in a warehouse.

On each pallet, there are 36 buckets of grain, each
weighing 35 lbs. The average adult will consume a bucket
of grain a month, plus some vegetables, which he had better
get planted. Each pallet can feed three adults for a year.
I think there were five pallets. That will not feed many
people.

You don't know how much you eat until you see it in
pallets. That's what going to the supermarket week after
week adds up to.

To store enough food to feed a family for a year takes
a lot of space. It cannot be stored in warehouses. Only
families can afford to devote the space, such as in a hot
garage. But few families will do this. So, we are at
great risk. If the supply line for food breaks, millions
of people will starve. They will not starve quietly and
peacefully. If you are known to have food, you will be a
target. Count on it. Prepare for it.

Can your local church store enough food to feed its
members for a year? Obviously not. The deacons wouldn't
if there were enough space. Their priorities are affected
by their faith in the supply lines. They babble on and on
about how God will protect them, but they really mean that
the computerized distribution systems will protect them.

I met a pastor at a community meeting called by a
local mayor. I spoke at the meeting. He came up afterward
and told me that his deacons had forbidden him to preach on
y2k. They would not hear it. I told him I would preach on
nothing else, morning and evening, until (1) they fired me;
(2) they changed their minds; or (3) they quit.

His deacons believe in God the buttercup. They
believe in computers. They will tolerate no other god.

In a year, they will probably be dead. At least, they
will be unemployed, bankrupt, and living in terror. They
will not know where their next meal is coming from. They
will have a lesson on practical theology that they will not
soon forget.


SOLVING A PROBLEM WITH FEW RESERVES

If the banks close their doors, how will you eat? How
will you pay for what you need to sustain you?

If you have no answer, buy what you think you will
need in 2000 in the way of reserves. Buy the things you
will need in 2000 to rebuild in 2001.

The free market assigns the task of making these
estimates to entrepreneurs. They look at large markets and
decide what the mass of consumers will buy. Consumers
defer to these specialists. Consumers trust these
forecasters with their lives.

The problem is, these entrepreneurs are blind to y2k.
They will not consider it in their forecasts except as a
blip: a reduction of 0.1 or 0.2 in economic growth. "We're
an information society," they love to say, but they refuse
to consider what universally erroneous information will do
to this information society.

There is no institution that has reserves sufficient
to sustain a society for several months. In the past, one
institution did this: the family. But families have
deferred their decisions to entrepreneurs, who have in turn
deferred their decisions to digital idiot savants that have
been programmed incorrectly.

This is why we are at risk as a society. Surely, we
are at risk of a huge economic setback. The capital
markets do not discount this risk because this risk calls
into question the wisdom of the free market, which
voluntarily paid for the computerization of the supply
lines. So, those to whom we have deferred the
responsibility of planning for the future are blind to the
risk of blind computers.

Their blindness is what gives you a bit more time to
maneuver. But you have dawdled. Already, you have missed
the chance to buy U.S. silver coins at anything like
bullion value. The premium is 50%, and there are almost no
coins to buy. Coin companies are rationing them to their
best customers, one or two bags per client. Too many of my
readers failed to listen to me when I told them that time
is running out. But they will listen when it has run out.
I have just told you that you can no longer buy bags of
silver coins. You're interested now, aren't you?

That's human nature. You must learn to deal with it.
You don't have much time to learn.
___________________________________

USAGOLD Comment: You do not have to buy high premium silver bags to protect yourself against Y2K...Small denomination bullion coins, like the Philharmonic and Maple Leaf (the US Eagles are in short supply), will get the job done, or you can go with the small-sized, pre-1933 European gold coins -- our biggest volume item. Gary North is right though in encouraging action. Silver bag premiums have skyrocketed in the last 60 days; small U.S. Eagle gold coins have all but disappeared from the scene as have U.S. silver eagles. Premiums have begun to climb again in the pre-1933 European gold coin sector. Shortages in the precious metals are becoming commonplace.

Michael,

A translation of St�phane CEAUX-DUTHEIL-http://www.scdut.com/ (see SteveH post
at Forum! is now available at:
http://www.users.dircon.co.uk/~netking/finan.htm

"Gold has started a rather spectacular reversal since the end of last
week, bottoming at 285$ and advancing on its long-term resistance
(Tuesday 02/02) which is now at 290$..."

Regards

Colin Seymour

Upon maturity, as you've specified the Treasuries-holder's desired option, the US Treasury is obligated to pay in cash (digital or paper) the maturity value of the Treasury notes. Either the presses roll, or else a computer entry is made for a wire transfer of the funds. From your question, it is clear that you have seen to the spoilt core of this debt-based fiat money system. Of essential importance is this paraphrase of your multiple questions..."How does the US Treasury balance their books upon redemption of mature treasuries?"
When you understand that the reserves/'collateral' that 'backs' the Federal Reserve Note dollar is interest-owed debt (in the form of 'consumer loans' or else Federal issue of Treasuries), you see that payment of previous obligations require additional borrowing. If the open market fails to produce adequate purchases of new issues of treasuries, the Federal Reserve System is obligated to be the lender of last resort. They must purchase them at whatever price they feel is adequate to maintain a reasonable interest rate/yield. Over the long term, the national debt can therefore move in one net direction only...ever larger, deeper into the red. Sorta makes one want to flee the system, does it not?

got gold?

How well I remember the early eighties. Paul Volker was busy killing inflation by choking off the growth of money. Thirty-year govies were paying double digit yields because so few people were willing to buy them. They thought inflation was inevitable. They were wrong.

Today, things are precisely the opposite. Now we have Alan Greenspan choking off deflation with double-digit money growth. Yet, amazingly, there is talk of a SHORTAGE of government bonds. Now it is deflation that is supposed to be inevitable. Wrong again!

More dollars will continue to mean cheaper dollars. Cheaper dollars will mean cheaper bonds. Cheaper bonds will shut down the gold carry trades. I think we are all about to get a lesson in the effects of rapid money creation and I cannot conceal my glee!

So it would seem.
So many machinations...so much manipulation to 'engineer' the desired outcome. The effects of the medicine is worse than suffering through the course of the disease. "We are pleased to report that your loved-one will NOT succumb to the illness...we've just killed him with our cure."

Gold is nature's remedy, a cure you can live with. Fortunately this is not lost on many in positions to make a difference. Perhaps harsher times will enbolden them to step forward with the solution? I think so.

Aragorn III, I and Shadowfax have been out surveying the results of todays battles. I am happy to report that today demonstrated the start of the longterm movement toward the return of the King. (and goldhearts know whom that is, Au) The Orcs are begining to breakdown and the continuation of the press of the Ents against the walls of the old monies have opened the first major cracks. Notice the final periods of the DOW and S&P trading today. The PPT pushed the DOW 30 hard all day, while the NAS, Long bonds, and S&P500 and 100 were in heavy neg territory most all the day. The PPT actually got the DOW to show a great reversal to the upside, but all the Dipsters and Sheeple did not buy the con today, and the first crack opened in the walls. XAU demonstrated the power of the few and made a statement that the big bad houses and shortsters could not possible misunderstand! Now is the time of the GREAT BATTLE. Beware the power of the Nazguls and keep your faith goldhearts as the wraith of the evil ones is great. BUY GOLD!
<;-)

I have decided on this thread. I ask this with hope it finds its home. If anybody can help me find answers, I'm listening. thank you.

We have watched the following events in the gold market:
1. 520,000 oz. or 5200 contracts of gold delivered in Dec 1998 while COMEX warehouse stokcs stood at 820,000 oz. This must have been an off-the-market exchange delivery. Where are they getting this quantity??
2. Recently, 8000 short contracts were covered and the gold price barely moved. How is this done?? By offsetting options?
3. How can there be around 460,000 call options open but 60,000 put options? Aren't these offset one for one?

I am MarkeTalk. Has it been fixed?

Shadowfax sure was excited when he saw your first post. BUT is now just looking at the moon with your correction.
<;-)

At 18:45 NY time in afterhours trading the APR Au contract on a small surge of less than 10 contracts broke 292 and hit 292.1 before being driven back to the mid 291 area. Get out and PUSH, Steve!
<;-)

Your question reminded of a movie I saw years and years ago, It was called Rollover, and it starred Jane Fonda and Kris Kristofferson. A major note coming due, to a very very very rich Arab (if I remember correctly), was assumed to be rolled over as per usual. This time it wasn't. The whole monetary system crashed, as the stampede for cash at banks, once people realized that they didn't have the cash, drained the system. Hmmmmmm........

the analysis was on the mark. Bollinger and my personal 6-day posit system tells me one to three more up days for gold before a even or down day. (anything else must surely be manipulation).

Gandalf,

I am pushing but I like the one on kitco that goes and does the lever thing. Pull those levers some more. DOW 30 is looking shaky or a the top (isn't this the third try for a high). VSE was up today while all others were down. Juniors are looking stronger but golds still look week. Silver is looking best of all and is probably a leading indicator with a strong correlation this time around instead of its normal "doing of it own thing" attitude.

The gold and silver rally feel different this time, I think. Lots of noise but many more positive correlations in place this go around. Anybody else sense the same thing?

$291.50, asking $291.70.

Date: Thu Feb 04 1999 21:56
D.A. (a.bit.of.musing) ID#7568:
Copyright � 1999 D.A./Kitco Inc. All rights reserved
All:

A week or two ago ( seems like only yesterday ) I opined that the devaluation in Brazil was unlikely to yield the
same kind of results that the devaluations of Asia had, a year and a half back. Indeed, the reflex rally in the US
bond market has been extinguished along with the sharp reactions in the commodity currencies of Canada and
Australia. With the resurgence of both the Canadian and Aussie bucks the price of metal in US dollar terms has
marched onward an upward. The rally in metals is not confined to the precious, as we have seen outsized positive
moves in nickel, and zinc, and a firming in lead, and tin.

The Brazilian devaluation has given us a valuable insight into what is the real ( small pun intended ) driver in the
commodities markets and in particular the metals markets. With the devaluation of the Real we have seen dramatic
declines in the US dollar price of sugar, soybeans and coffee, three of the biggest ag export crops of Brazil. The
spec idea, is that the currency devaluation is going to make Brazil a more agressive exporter of these items.
Whether this comes true or not, remains to be seen, but its certainty is well reflected in sub 7 cent sugar and near
$5.00 beans.

The bottom of metals markets, in US dollar terms, was reached at the nadir of the Aussie and Canadian dollar
markets. Because the leasing game is alive and well in the metals markets, it made great sense for the producers in
these countries to borrow and sell quantities of metal forward in thier local currencies. Even though the US dollar
price of gold never made it north of $300, in Aussie terms the $500 barrier was breached. This brought on a great
wave of forward selling, ultimately driving the US price down just below 280. The decline of the SA rand to the
6.60 level brought similar spasms of forward selling.

It appears that we are now on the other side of the mirror. The turn in SE Asian economies, major consumers of
metal, may well be in. The rise in the Canadian and Aussie dollars, will keep those countries out of the forward
selling game as long as the currencies are rising as fast or faster than the US dollar price of the metals. With the A$
up nearly 20% from the lows, the metals have a long way to run before any forward selling appears. In fact, if the
A$ keeps on running, the Aussie producers might be lifting hedges.

A little gold/A$ arithmetic is in order. The last major sell point for the Aussie producers was A$ 500 per ounce.
Last I looked the A$ was trading at US $.6500. In order for Aussie producers to be tempted back into the
forward selling market at this exchange rate, we would have to see $US 330 gold. On the other side of the
equation, the multiyear low in A$/gold is around the A$425 mark. One would assume that a move to those levels
might bring about some buybacks. With gold at $290 US, a move to .6825 on the A$ would put A$/gold at about
425. With the A$ having just broken out to multimonth highs in the face of the Brazilian devaluation, it is by no
means out of the question that a stronger A$ price may be on the way. In fact, there is a positive feedback
mechanism which may well be getting in gear. As the A$ rises against the US$, the terms of trade go in favor of
Australia, this in term strengthens their trade balance which feeds back positively to their currency. Just as this
mechanism worked so forcefully on the downside, so can it work on the upside.

The thesis that the central banks are in collusion to control the price of gold may have some truth to it. Greenspan's
statements about CB's standing ready to lease gold in the event of a price rise, and the Fed research paper
concluding that dampening inflation expectations would result in actual inflationary declines, lend credence to this
view. The problem that the CB's have is that they need to get someone else to do their work for them. If they
come right out and start selling gold in the open, they will no longer be able to point to the price of gold as an
'inflation' indicator, because it will be clear to all that its price is solely dependant upon their sales or lack thereof. If
they can find willing proxies to 'borrow' their gold, and sell it, the charade can be kept alive. I believe that one of
the great appeals LTCM had to some the central banks is that they were a conduit by which gold could be sold
without accounting for it as a sale. Remember that the central bank of Italy had a large 'investment' with LTCM.

With the 'natural' forward sellers being put out of the game by dint of currency movements, the pressure on the
spec gold short position could grow very strongly very quickly. If it pops, it will go in great leaps and bounds,
leaving many staring in bewilderment.

The only thing that scares me about the gold and silver markets is the spectre of another domino crashing. If I
wanted to make sure that gold and silver didn't get out of hand, I would blast the Indian Rupee. Maybe its time to
get short some of these puppies as insurance.

Don't know if this has been covered before or not.
While browsing at the official U.S.Mint website came up with the following,what I feel is useful information:
9,700 ounces of platinum coins were minted.
281,000 ounces of Gold coins were minted.
1,145,000 ounces of Silver coins were minted.
All in the month of Jan.1999.At that rate,I only did the figures for Gold,3,372,000 ounces of Gold or about 116 tonnes will be needed for production in 1999'some say the serious buying of Gold coins won't start till late fall 1999.
Other facts on the Mint: They have free daily tours at the Philly and Denver Mints.
In the more than 200 years since congress created the United States Mint on April 2,1792 etc. etc.
And the kicker:MAINTAINING PHYSICAL CUSTODY AND PROTECTION OF THE NATIONS $100 BILLION OF U.S.GOLD & SILVER ASSETS AT FORT KNOX KY. All above information and much more can be found at:
http://www.usmint.gov/facts/facts.cfm

I'm also awaiting a reply on an e-mail question on how the U.S.Mint obtains the bullion used in the production of coins.Will follow up if they answer me.........beesting

Yes, I know the Kitco leverman well, Gollum is his name ! You must remember that I have his precious ! <;-) Sure wish that he would come over to this board sometimes and make his magic. OH, BTW you should check S. J. Kaplan at www.goldmining.com

Steve that is www.goldminingoutlook.com for Kaplan, who says that one should watchout as the silver market is a big balloon like the DOW and ripe for a pop ! DOWN that is !!
He is basing his thought on the dealers and speculators positions, which are way out of standard line. We shall see if he is correct soon. But, like ANOTHER said, "forget silver, buy AU".
<;-)

kitco again:

Date: Thu Feb 04 1999 17:17
sharefin (Stolen from a y2k forum) ID#284255:
-
Subject: Y2k and Gold

this post is to the Gold Monitor thread on Silicon Investor. It is writtien
to Bill Murphy who is initiated a class action suit against the Federal
reserve and Goldman/Sachs et al for gold price manipulation. It is a little
jumpy but worth the read. And may be very relevant. The author's
contention that Y2k panic will come early is of interest. Lawrence

To: Bill Murphy ( 27363 )
C.K. Houston Saturday, Jan 30 1999 10:43PM ET
Reply # of 27420

Bill,

I commend you for what you are doing. Such a logical and thorough
presentation. You spelled it out.

I'm just a lurker on this thread. Though over past few months I have now
accumulated a substantial position of my portfolio in gold stocks. Probably
the craziest thing I've ever done with my investments. I usually do a
helluva LOT of research BEFORE I invest. And I have to know and understand
the company, market and trends before I do invest. I didn't do it this time.
I invested in one of the gold "Blue Chips". Just something I'm sitting on.
Women's intuition. A hedge against this irrational market.

Last week I got a call from someone with a seat on COMEX. He was referred to
me because of my expertise and research in Y2K. He wanted to have me consult
on when panic would set it on this whole Y2K issue, so he could time his
precious-metal trades.

I haven't decided if I will or will not consult. I'm not a rich person, but
I have to LIKE who I do business with. I don't need money that bad.

In any event, he called 4 times. We spent more than 3 hours on the phone.
He's only in NYC about 10 days a month. Only trades his own money. Very
likable person. Doesn't depend on precious-metal trades for income, though
apparently does very well.

I've been following this thread for some time, and feel a loyalty to "the
good guys" and some who are here and who have become my "cyberfriends" over
the past few years.

I'm tired of manipulation and little guys being screwed.

For what it's worth, and it may not be worth much. I thought I'd share what
"guys in the pits" are saying. Apparently they're banking on Y2K panic to
make big bucks:

- China & Russia selling helps depress price now
- Gold will be $600 before the end of the year
- Expect to make a LOT of money because of Y2K
- Think Y2K panic will hit December '99 and January '00
- Planning on shaking out the "little guys" first with a DEEP pull back
- Expect GREAT volatility ( like internet stocks ) later in the year. Then,
lots of churning with BIG money made daily.
- Until then trading, with price increasing around option expiration. ( Hope
I got that right. This is all new to me. )
- Most important ( and unfortunately, remember I don't understand how this
whole option/put thing works ) ... something about when volatility increases
... premium will triple. Little guys will be forced to cover. That's how and
when little guys will be shaken out.

Don't know if I contributed anything meaningful to the discussion on this
thread. Hope I did.

In any event ... He and the guys in the pits are basing strategy on the
theory that "Y2K Panic" will arrive in Dec-Jan. That's a JOKE. Will happen
WELL before the. But, that's currently their time-frame.

With that time-frame in mind ( panic hits in Dec-Jan ) , word "from the pits"
was that deep pullback would occur around August.

However, IMHO, Y2K panic will happen much sooner. General public might not
get it. But required SEC statements are already starting to spell it out ...
and it ain't pretty.

I posted the info re National Guard on this thread for a reason. Obviously
many didn't understand, or only have $$ in their eyes, and don't realize
that some meaningful bit of information might be out there that might flesh
out the whole picture.

I don't know EXACTLY when "Y2K Panic" will initially occur. There are
already so many global "panic" situations out there right now. Y2K just
magnifies what exists. But, that's where the "guys in the pits", trading
gold, are seeing the BIG bucks - "Y2"K.

Personally I hope they're timing is off - and, they get scr*wed. As well as
many Market Makers and BIG name brokerage firms that do Up-Grades &
Down-Grades solely to make a buck. They're all prostitutes IMHO.

I shouldn't complain. I've done well. But, I learned to trade on my own and
not depend upon, nor pay, purveyors of mis-information. I've just seen so
many "little guys" getting screwed, not seeing what goes on. Oh the big
brokerage firms will do fine in the long run in a bull-market. But, they
scr*w the individual, small-retail investor in the short-term. Hate to think
what happens in a bear market.

ENOUGH OF THAT. BACK TO ISSUE AT HAND ...

"Y2K Panic" will DEFINITELY happen well before the Dec-Jan timeframe the
"guys in the pits", trading gold, have been looking at. But, it's hard to
call exactly when. My guess is late summer, early fall.

SO, I GUESS TO SUM IT UP ...

A "shake-out" is planned. I have NO idea if it's at this level, OR after an
artificial run-up. My guess is after a brief run-up. ( Gold's already pretty
low, so I'm just sitting on what I have. ) And then eventually, they plan a
BIG, BIG run by year-end.

NOTHING MAKE SENSE ANYMORE. PAST HISTORY AND LOGIC?
NO CORRELATION TO THIS CURRENT MARKET.
I feel like Alice, in "Alice in Wonderland" ... Fell down a
hole and everything is upside down.

Some of you who like to talk theory, from IMHO can talk theory till your
blue in the face. It's a new ballgame. Maybe it's an old ballgame, just
different players and different rules.

But, when push comes to shove ... whoever has the biggest bucks and biggest
position ... or knows others that do ... they call the shots.

Last conversation I had with the guy with seat on COMEX was, if you're in
NYC, I can get you on the floor and you can see how this works.

Good luck to us all,

USAGOLD - I saw your earlier post from Gary North. Although I believe much of what North writes is accurate, particularly his comments from von Mises, I believe it is important to put Mr. North himself into perspective if we are to rely upon his predictions.

Another forum, 'Gary North Is A Big Fat Idiot', (you can imagine some of the content), has several interesting writers of which one in particular is a Mr. Decker. He posted an article, 2/2, that is something of a rejoinder to North. Everyone trying to determine what might happen towards the end of the year should read this article. It's titled 'Greatest Hits, Vol 1'. Mr. Decker, from his writings, appears to be a very conservative entrepreuner, and rejects many of North's ideas of what will come. If anyone wants some reasonable thought it is indeed contained in this article.

I queried Mr. Decker to find out if I could post his article to this forum but I haven't heard back from him. Consequently, I will give the link instead.

http://www.smu.edu/cgi-bin/Nova/get/gn/632.html

I hope everyone gets a chance to review this article. The ideas are in contrast but both predict economic problems.

ET

http://members.home.net/rjgold/0204991.html

SteveH - I saw your post from the other forum. I would contend that y2k panic has already started in the metals markets. We have evidence of shortages in physical supplies. I believe that these shortages will only become worse as the months go by regardless of any manipulations the paper traders may have in mind. I don't believe these traders have a clue about human nature. It's hard for me to believe that 'everyone' has forgotten what money is.

ET

292.1 @ 22:03pac, DOW & S&P starting down, Asia down. GCJ9 chart looks ready to cross M.A. (Watch those Ruppees)

All -- I must <;-) give equal time to the "day trading dipsters" No SMILES allowed !

Welcome to Raging Bull
Selling Intensifies Into Rout On Nasdaq
Technology stocks with the largest market capitalizations--often referred to as the Big Five--faced some heavy selling pressure today. Their loses helped wipe out the 30-point gain yesterday in the Nasdaq Composite Index, which swooned 82.87 today to 2410.54 on volume of 1.1 billion.

Among that high tech group, Microsoft (msft) fell 7 3/4 to 159 11/16.
MCIWorldcom (wcom) ended down 1 15/16 to 76 1/8.
Intel (intc) was clipped 8 9/16 to 130 1/8.
Dell Computer (dell) slumped to 5 1/2 to 102 3/8.
And Cisco Systems (csco) which had enjoyed a tremendous run up prior to its earnings release, declined 5 7/8 to 105 1/4 on turnover of 23 million. Raging Bull member polonius expressed a resolve to ignore the daily ups and downs in the world's largest provider of computer network servers.
"Day traders...no..This isn't a day traders stock. It's an investment in a new technology in which Cisco is at the cutting edge and under control. Don't lose sleep over this one. A weakness in the bond market has caused a slight retreat in the stock market. Naturally, since the NASDAQ and techs have the greatest increase they will retreat the most. This is only temporary..."

More
Although continued good economic news, such as the 2.3 percent rise in December factory orders, should have bolstered stock prices on the Big Board, the S&P 500 sank 23.58 to 1248.49. The Dow 30 was down more than 80 points in the morning and crawled back to a gain of over 25 shortly before 3 p.m. But profit takers took the bell-weather index to a final bell decline of 63.21 to 9304.50
Online brokerage stocks rocketed in the morning on heavy volume for the second straight day, but eventually came back to earth this afternoon. E*Trade (EGRP), which again experienced glitches in its software upgrades, moved down 1 3/4 to 53 1/2. "Growing pains like AOL, " was how ffurter put it to Catchdog in note #488 on the EGRP thread.
He added: "About 1.5 years ago, I thought AOL had too many busy signals and bad service. I quit AOL and sold short. Biggest investment mistake I ever made! E*Trade's current problems are a GOOD sign of increasing demand. Stay with it, you won't be sorry."

Saltynomas is one RB fan who has stayed the course with fiber optics equipment maker Ciena (CIENA), whose share price broke through a trading channel to close up 2 3/16 to 25 5/16 on 13 million traded. "I have been long on CIENA since $8.00," said Salty , "and have been through many false rumors. This one feels right. Ciena by DenseWDM "I agree, Stockup - Bandwidth IS king!"

(disclaimer) <;-) The Raging Bull aims to provide a forum for investment ideas. Our articles and columns should not be construed as investment advice, nor does their appearance imply an endorsement by Raging Bull, Inc. of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances. This material is for personal use only.
****and I believe every word of it. <;-)

Hit 292.1 before the sizing on the ask side jumped to over 50 --- I'll sleep on it tonight. Good night all
<;-)

I think Kaplan is right, silver is getting over extended. It has been up 6 of last 7 trading days, and the last three are really too far too fast. I will be considering puts if it drops below Thursdays low.

pass throughs:


Thursday February 4, 8:28 pm Eastern Time

Newmont Q4 loss reflects charge for gold price drop

NEW YORK, Feb 4 (Reuters) - Newmont Mining Corp. (NYSE:NEM - news), the largest
U.S. gold mining company, said Thursday it lost $421 million in the fourth quarter, partly as a
result of a one-time charge related to the low price of gold.

Newmont said the result meant a loss of $2.53 a share and came on a 15 percent decline in sales. A year earlier, the company
earned $39 million, or 25 cents a share. Sales declined to $352 million from $412 million.

Newmont, based in Denver, said the results included a one-time charge of $425 million, or $2.55 a share, to account for a
reduction in the value of its assets, principally gold mining operations in Nevada. The year-earlier period included a charge of $3
million, or 2 cents a share, related to Newmont's acquisition of Santa Fe Pacific Gold Corporation.

Excluding the charge, the company earned $5.8 million, or 3 cents a share, in the most recent period. The profit per share
matched the average estimate of 18 Wall Street analysts surveyed by First Call Corp. and Newmont's stock was up $1.31 at
$19.25 on the New York Stock Exchange.

The company said it produced 996,000 ounces of gold in the quarter, down 11 percent from a year earlier, and the average
price it received fell to $300 an ounce, down from $330 an ounce in the fourth quarter of 1997.

For the year, Newmont lost $393 million, or $2.47 a share, on sales of $1.45 billion. In 1997, the company earned $68 million,
or 44 cents a share, on sales of $1.57 billion.

Newmont said its production for the year was up 3 percent at 4.1 million ounces of gold, the most ever produced in a year by a
North American company. The average price it received for gold over the year fell $44 to $310 an ounce, the company said.

-end-

February 5, 1999
Commodities

Silver Futures Prices Rise For Fourth Straight Day

By TERZAH EWING
Staff Reporter of THE WALL STREET JOURNAL

They may not be keeping pace with Internet stocks, but silver prices are enjoying a bull run. The trouble is, like
some Internet stocks, momentum has as much to do with the move as fundamentals.

Silver futures turned in their fourth-consecutive day of gains at the New York Mercantile Exchange's Comex
division Thursday, rocketing up nearly 22 cents to levels the nearest-month contract hasn't seen since July 23.
Dince the beginning of January, silver has gained more than 80
cents.

What gives? The rally began with heavy demand for the metal in London last week as a rush of silver borrowing
drove lease rates up. Traders said the rally is a spectacular example of what happens when short, or bearish,
positions get squeezed. As prices rise, traders with short positions are forced to buy the metal to cover their bets.
That, in turn, sends prices even higher.

Then, as prices climbed, technical traders, or traders who buy and sell a commodity based on historical price
trends rather than supply and demand figures, began buying silver, too. "There's tremendous technical buying,
primarily by [hedge and commodity] funds," said Scott Meyers, senior analyst at New York-based Pioneer
Futures. "Everybody's buying. They're afraid to sell into this."

Dinsa Mehta, managing director of global commodities at Chase Manhattan, said, "For silver, people no longer
need to know why. They just need to know something's happening and they hop on."

The March silver contract rose 21.7 cents to settle at $5.76 a troy ounce. May futures also rose but not as
sharply, indicating traders want the metal as soon as possible. The May contract ended the day up 21.4 cents at
$5.768 an ounce.

Technical traders and momentum-following speculators also were peculating about who or what was behind the
initial borrowing and buying in London. Some said the London Metal Exchange's plans to launch a silver contract
by the middle of this year already could be causing a movement of the metal from New York to London. Certainly
Comex silver stockpiles have fallen throughout the rally and stand at about 74.4 million troy ounces.

But though rumors about the LME and about various hedge funds and European trading houses were bandied
about in the market, no one could confirm the original source of all the bullishness.

"Somebody's been buying London physical [silver] for two weeks, and there's a good premium for [immediate]
delivery," said George Gero'senior vice president of investments at Prudential Securities in New York.
"Somebody's been saying this is a bullish market."

Mr. Mehta noted that the bullish mood, which infected other precious-metals markets Thursday, seems credible.
"The stories that talk about a rebound in Asian demand are more credible. The rallies across base metals are more
credible," he said. "This is providing a good undertone for whoever is making the run in silver to be joined by the
usual groupies."

Some traders said the rally could stall a bit today because of unwillingness to carry large bullish bets over the
weekend. But most analysts said they see no end in sight to the rally. Mr. Meyers of Pioneer said the market could
well head as high as $6 an ounce before the rally peters out. London-based analysts at Macquarie Equities Ltd.
cited a more modest short-term target of $5.80.

-end-

MARKET UPDATE (2/5/99): The metals were catching their breath this morning after yesterday's solid run-up. Gold traders point to technical factors fueling its recent strength. Those technical factors are the likely result of strong physical demand developing internationally from private investors concerned with Y2K's inevitable visitation and the recently subdued but ever-present worldwide monetary crisis. With respect to the contagion, Brazilian shares were down 3% so far today as the crisis there appeared that it might move off slow boil. The Brazilian real was also getting hammered. Seems the markets have not had a positive reaction to the IMF's friendly little visit this week. The dollar was higher this morning on news that U.S. payroll figures rose stronger than analysts anticipated raising
concerns that the Fed might have to reconsider its hold-the-line interest rate strategy.

In gold news Reuters reports one trader in London as saying "We are close to levels at which there will be significant short-covering," he said, adding that Australian dollar
strength was lending further support to the gold price. "If gold can get through $291.50/$292.00 then the jump to the high $290s could be pretty rapid. There will be selling
on the way up and when it gets there, there will be more selling," the dealer added. (Ed. Note: He might have added that there will also be buying.)

As for silver (also from Reuters) after yesterday's big 21� uptick, "Brokers GNI said silver's move, despite market talk of physical squeezes and the presence or otherwise of
U.S. investor Warren Buffett in the market, was not such a surprise. This rally is not occurring in isolation - the base metals are rallying as well and that tells you that funds are buying the industrial metals." Bridge News adds this to the silver news: "The word is a few big players out there are doing a lot of buying," a trader said. "There's genuine demand out there, and there's a lot of borrowing going on."

So far today the metals have been characterized by profit taking which could end as the day wears on.

That's it for today. We will update if anything develops. Have a good day, fellow goldmeisters.

I believe the following is true: The U.S. Mint is required by law to buy any and all gold offered to it by U.S. mines. Because that source is, at present, insufficient, the Mint is falling back on their own existing supplies to make gold coins.

How often have you heard the [hot shot] money managers speak of hedging against inflation? probably not at all..
beware/ as i feel this is about to change. The huge amt. of US.$ that have been created by Greenspan & company are
going to come home to haunt us. You wont be hearing about deflation any more. Metals..offer one of the best inflation
hedges..all coming off their lows...What a great oppertunity!! April gold breakes out on a close above 292.50 not far away.

Ahhhh....yes, Gandalf the WHITE. You WOULD have Shadowfax. Old friend, I am comforted that your position is a good one for these times ahead. And thank you for the steady news from afar. We will see this through in good measure.

The APR Au just broke through 292 and the NAS is in the dumpster! Big disparity tween the DOW and the S&P500 too. The PPT is holding up the DOW by the TIKI so that it is near even on the day, SO FAR. Keep PUSHING, Steve! SPOT the dog has regained the 290 area, after being hit at the NY open. "Looking Good"
<;-)

T. Remital...Everywhere I look I see America's Great Problem as Dollar Repatriation....Investors need learn to swim or build an ark...The Flood is nigh.

ET...I have not read enough of Gary North's Y2K material to form an opinion. Therefore, that posting should not be viewed as an endorsement but just information for the FORUM. I do however appreciate your keeping a lid on that steaming kettle.

Beesting....I think the way that reads is that all the gold the U.S. Mint buys for the U.S. Eagle must be sought at the mining companies first; then it can go to open market. In practice, I know that they buy from both the refiners like Johnson Matthey and the big marketmakers in New York and Boston. Their problem at present is getting blanks to strike in both gold and silver. The jobbers that make them cannot keep up with demand. We had warnings again this morning from our marketmakers again that all small U.S. gold coins' and silver coins' supply is strained to the max. New silver eagle coins to fill new orders will not be delivered until the end of February at the earliest.

MarkeTalk...You ask some good questions. Perhaps we can get T.Remital to take a crack at it? Please educate us, maestro...

The Buffett silver story is the big one among gold professionals this morning. Surprised to see gold pressing forward today. I expected a retracement.

Time allowing I will try to post something probably tonight about Andrew Rothovius' extraordinary political advisory (USA Washington/Global Letter) for February.

Sample:

"If Communists try to partially restore the Soviet Union, resource-rich Siberia could break off and seek an alliance with America."

I had quite a few faxes from lurkers this morning when I arrived at the office. Please get on and post. It really does not cause any pain. What you have to say is important to the general discussion. If not, I will try to summarize your points and put them up as anonymous offerings at some point in the future.

We see things with a similar eye.
I might recommend that you and I and all others who grace this site on occasion, agree to this simple proposal...

Because 'inflation' and 'deflation' mean different things to different people (some see 'cause' (money supply) and others see 'effect' (prices)), let us try to avoid use of those terms altogether. Instead, we should state the phenomenon to which we are referring-- increasing (or decreasing) money supply OR prices. This will greatly facilitate future discussions. Agreed?

While the world may be amidst a contraction of the money supply (as the rate of new loan creation falls off), repatriation would result in a local (U.S.) increase of the dollar supply. This would tend to blow the lid off of prices into the future, despite the current current state of affairs. Now, if you replace all that text using only terms of inflation and deflation, everyone can agree, or everyone can disagree, but no-one acctually communicates their message due to misinterpretation.

got clarity?

My point being that USAGOLD delivered a clear message because the equivocal term inflation (or deflation) was not used. Well done!

New York-Feb. 5-FWN--Silver futures ended a tumultous
week on a softer note, with market watchers citing profit
taking and trade selling.

Gold futures ended slightly softer, with one contact
relating that the market drifted downward as the session
wore on as fresh buying dried up.

Palladium ended sharply lower, with contacts citing
profit taking and some effect from dollar/yen movement. The
decline in platinum was also blamed on profit taking, the
stronger dollar and the sharp decline in palladium.

March silver futures lost 11.8 cents to settle at $5.6420. It had risen from a low of $5.08 on Jan. 28 to an overnight ACCESS high of $5.81.

"It can't go up forever without making a little bit of a retracement," said one floor source.

A couple of contacts linked the move largely to end-of-
week profit taking.

Reprinted with permission.
http://www.futuresource.com/internet.shtml

_______________________

GOLD/SILVER - Bridge News
Mar silver also saw profit-taking today as the longs began liquidating after the market saw continuous run-ups this week and surged to a fresh 6- month high of $5.81 early this morning. "The funds are just taking their profits," one
analyst said.
One trader noted that it is very typical on Friday for the funds to take their profits after seeing significant increases. "No one wants to go into the weekend long," he said, noting that "there's really nothing specific going on."

"The market really digested a lot of buying over the past several days," another trader said. "It deserves a break now." He said back selling might be needed.

One trader predicted silver should inch back up to $5.80 over the long term.

"Silver had been grossly overbought this week," the trader said. "It's definitely the market of interest now. We should call it silver.com."

Another agreed that strong fundamentals have the potential to push the market back up. "There's a good base here...The market could go higher next week."

Some said they thought the tightness in silver had lessened a bit "as there's more lending in the market...We're not seeing the supply squeeze that there was last year." Another noted that the silver stock building programs are still occurring with fabricators and end-users.

"There's a good deal of strength in both (silver and palladium) markets," an analyst said. "They both have strong fundamentals and physical market deficits."

Reprinted with permission.
http://www.crbindex.com/reviews/index.htm

An excerpt of testimony of Chairman Alan Greenspan on the regulation of OTC derivatives, before the Committee on Banking and Financial Services, U.S. House of Representatives, July 24, 1998

The Commodity Exchange Act of 1936 and its predecessor the Grain Futures
Act of 1922 were a response to the perceived problems of manipulation of
grain markets that were particularly evident in the latter part of the
nineteenth and early part of the twentieth centuries. For example,
endeavors to corner markets in wheat, while rarely successful, often led
to temporary, but sharp, increases in prices that engendered very large
losses to those short sellers of futures contracts who had no
alternative but to buy and deliver grain under their contractual
obligations. Because quantities of grain following a harvest are
generally known and limited, it is possible, at least in principle, to
corner a market.

It is not possible to corner a market for financial futures where the
underlying asset or its equivalent is in essentially unlimited supply.
Financial derivative contracts are fundamentally different from
agricultural futures owing to the nature of the underlying asset from
which the derivative contract is "derived." Supplies of foreign
exchange, government securities, and certain other financial instruments
are being continuously replenished, and large inventories held
throughout the world are immediately available to be offered in markets
if traders endeavor to create an artificial shortage. Thus, unlike
commodities whose supply is limited to a particular growing season and
finite carryover, the markets for financial instruments and their
derivatives are deep and, as a consequence, are extremely difficult to
manipulate. The type of regulation that is applied to crop futures
appears wholly out of place and inappropriate for financial futures,
whether traded on organized exchanges or over-the-counter, and
accordingly, the Federal Reserve Board sees no need for it.

The early legislation on the trading of commodity futures was primarily
designed to discourage forms of speculation that were seen as
exacerbating price volatility and hurting farmers....

However, it [CFTC Act of 1974] expanded the scope of the CEA quite significantly. In
addition to creating the CFTC as an independent agency and giving the
CFTC exclusive jurisdiction over commodity futures and options, the 1974
Act expanded the CEA's definition of a "commodity" beyond a specific
list of agricultural commodities to include "all other goods and
articles, except onions,...and all services, rights, and interests in
which contracts for future delivery are presently or in the future dealt
in."

Given this broadened definition of a commodity and an equally broad
interpretation of what constitutes a futures contract, a wide range of
off-exchange transactions would have been brought potentially within the
scope of the CEA....
What the Treasury did not envision, and the Treasury Amendment did not
protect, was the subsequent development and spectacular growth of a much
wider range of OTC derivative contracts--swaps on interest rates,
exchange rates, and prices of commodities and securities.

The vast majority of privately negotiated OTC contracts are settled in
cash rather than through delivery. Cash settlement typically is based on
a rate or price in a highly liquid market with a very large or virtually
unlimited deliverable supply... But unlike farm crops, especially near the end
of a crop season, private counterparties in oil contracts have virtually no ability to
restrict the worldwide supply of this commodity. (Even OPEC has been
less than successful over the years.) Nor can private counterparties
restrict supplies of gold, another commodity whose derivatives are often
traded over-the-counter, where central banks stand ready to lease gold
in increasing quantities should the price rise.
---------------------------------------------
I think the focal point should not be so much upon "central banks stand ready to lease gold" as his example was demonstrating virtually no ability for private counterparties to restrict supplies of gold...one of gold's strong points, I might add.

On that same front, of far more unsettling consequences is his comment, "Supplies of foreign exchange, government securities, and certain other financial instruments are being continuously replenished, and large inventories held throughout the world are immediately available to be offered in markets if traders endeavor to create an artificial shortage."

So think about it...despite much talk of a central bank gold 'overhang', there is indeed a limit to gold. Yet directly from Mr. Greenspan, "supplies of foreign exchange, government securities, and certain other financial instruments are being continuously replenished, and large inventories held throughout the world are immediately available" without limit. Want control?

got gold?

Thank you, thank you, thank you ! !

The multiple "understandings" of the definitions of inflation and deflation make it almost impossible for us beginners to grasp what many of the knowledgeable ones' messages mean. It is now clear that they mean different things to different people. Boy does that help.

However, now I really don't know what some of the posts meant. By the way, would it be possible to add stagflation and reflation to that list of words that confuse the message?

Thanks again from many (I suspect) of us beginner lurkers.

backlash

it seems that Greenspan was trying to state a larger principle.....that derivatives are not, like some think, a tool that could be used to drive a commodity higher in price because other market forces with conflicting aspirations would act to mitigate the process. For example, let's stick with something we all know and understand -- gold. If I understand Greenspan's point what he is saying is that if you were a big player and you wanted to corner the gold market through derivatives and drive the market higher, you would be offset by the central banks which might have an interest in leasing their gold thus balancing your intentions. After all, he was arguing against regulation of derivatives and he was attempting, although I think even he would admit now not as clearly as he would have liked, to make something of a libertarian/free market appeal that there are always counterbalancing forces in the market. He did not attempt to argue what would happen if somebody was trying to manipulate the gold market down, however, if he were, I think he would end up near my position on this matter -- that the free market will take care of itself. This is why I am not head over heels enthusiastic about the legal approach to gold's problem. For one thing, my view after reading through the passage you were so kind to post several times now, I interpret it as stated. Secondly, I think that too much of the GATA case rests on a mis-interpretation of that statement ( I am sorry to say.) at least with respect to the central bank's role in the collusion. I do not think a good lawyer would have a great deal of trouble arguing that point. Thirdly, I agree with Greenspan that countervailing forces in the market are right now working against the massive short position in gold. The free market always works. It may not work always in an acceptable time frame, but it always works. At the same I do not want to at all discourage the GATA group. I think the greatest contribution they are making through this effort is adding to the growing public awareness of the situation in the gold market. That awareness creates demand among a large group of people who understand that if gold is being held down, it must be because its natural inclination is to go up. Debate and discussion on this matter is our greatest weapon. It creates physical demand; the nightmare that pops the short siders eyes wide open at 3 in the morning.

Well, Aragorn, I was about to post something on the Rothovius advisory, and you diverted me. Perhaps later. This subject seemed more timely.

There were a couple writing errors in my last post. First I was not trying to say that Aragorn posted the Greenspan comments several times. I was trying to say that I have read it several times. Second, I wasn't trying to say that Greenspan had commented on the short position in gold. I was trying to say that I can envision Greenspan arguing the situation with the gold shorts the same way he argued it for the gold longs simply as his understanding of a market principle.

Sorry about the misplace modifiers and lack of clarity.

Gary North's REALITY CHECK
Issue No. 36
February 5, 1999



THE RATIONING OF U.S. GOLD COINS

This week, the U.S. Mint stopped selling gold coins
for a day. Then it announced an allocation system. This
means rationing if demand continues to accelerate. It
means standing in line and not being able to buy all you
want at the official price.

This demand is Y2K-driven. Gold bullion has gone
down. But the coins are going out the door. More tenth-
ounce gold eagles were sold last month than in the first
seven months of 1998.

In the first six months of 1998, the Mint sold 96,000
ounces a month of all gold coins. In the second six
months, it sold 210,000 ounces a month. In January, it
sold 268,000 ounces.

There is greater demand than supply at the Mint's
prices. Instead of raising their prices to reduce demand,
The Mint will begin allocating coins. Dealers will not be
able to buy all of the coins that they have orders for
unless they raise their prices (the premium over gold).
Some of them already have done this.

Within a month, wholesalers' existing inventories (if
any) of the smaller coins will be depleted. At that point,
prices will rise or else you will be put on a waiting list.
My point is this: the supply of U.S. gold coins, especially
the smaller ones, will begin to get very tight very soon.


SMALLER IS BETTER

As you may know, I have been recommending the purchase
of tenth-ounce American eagles. My main reason for
recommending smaller coins is liquidity in a social
breakdown: more transactions per ounce. The one-ounce
coins are best for buying to sell later for electronic
money, but for those who are trying to get out of
electronic money and into a marketable commodity during a
banking crisis, the tenth-ounce coins are better.

These coins command a higher premium over bullion
value than the one-ounce coins. You don't get something
for nothing. Ten tenth-ounce coins this week cost about
$335. A one-ounce coin was around $300. To compare
prices, click through:

http://www.msnbc.com/modules/commerce/gold2.asp

Until this year, the Mint's percentage of one-ounce
gold coins was over 70% of total gold coin production.
These are the preferred coins for conventional investors
who hope to sell these coins later for money. These are
people who evaluate the success of an investment in terms
of how much electronic money they receive when they sell.

The tenth-ounce buyer thinks differently. He is
thinking of permanently transferring his wealth out of
electronic money and into purchasing power. The rise in
the sale of tenth-ounce coins is an aspect of the re-
monetization of gold. We are seeing a great reversal.
Since 1933, and really since the turn of the century,
people have not used gold coins in the United States. This
is going to change in the next decade.

This means that the Mint bet on the wrong horse for
1999. It geared up for one-ounce sales, but buyers are now
after the smaller coins. This is because Y2K is changing
the reasons for buying gold.

It is happening in the silver coin field, too. Consider
silver bullion, which was $7.00 an ounce on Feb.4, 1998:
a nine-year high. A bag of 90% U.S. silver coins sold
for about $5,100. There was no premium over bullion
value, or very little. Silver fell to $5.00 an ounce by
January, 1999, and a bag of coins (715 fine ounces) sold
for over $5,400. This is a premium of 50% over bullion
value. This is the re-monetization process in action. We
are at the beginning of this process. Y2K will accelerate
it next year on a scale not yet understood even by Y2K
pessimists.

Re-monetization will happen to gold coins, especially
the smaller ones. This will push up their premium above
the bullion price. Why? Because the coins cannot be
produced fast enough at bullion's price to meet demand
today, let alone in late 1999, when the Y2K panic will
appear.

You are not going to order a 100-oz. bar of silver,
are you? Not at $29,000 today, and more if gold's price
rises. You will surely not buy a 400-oz. bar that central
banks use to settle with each other. What could you do
with it in a breakdown? And who would give you change?

That's why tenth-ounce coins are good: you don't have
to get change when you buy an inexpensive item. There are
more of these items to buy. What can you buy with a 100-
oz. bar? Buy a house in 2002?

Until I started recommending tenth-ounce coins last
year, demand was pretty low. I told people to buy them
irrespective of the price of bullion. Bullion is for
speculators and very rich people who are moving large
amounts of electronic money into gold. The small investor
who worries about Y2K should be buying tenth-ounce coins.

That's why they are disappearing. They are being sold
out of inventories. They will be in short supply because
the Mint is not set up to produce them: "no blanks."
Meanwhile, demand is rising.


CONCLUSION

I will say it one more time: you had better act when
you can. Buy when an item is available. Buy the "cottage
industry" items now. You can buy mass-produced items later
in the year.

Think "Aladdin lamps." You didn't buy enough of them,
did you? Now you can't buy them.

Think "silver coin bags." They are being rationed by
dealers to their best customers, one bag at a time, and
they command a 50% premium above bullion value. You cannot
get delivery of ten bags today.

Talk it over this weekend. Then on Monday, make your
decision.

I would have saved this recommendation for REMNANT
REVIEW, but it was mailed today. The shortage will have
become visible by March. My advice: don't dawdle. Make up
your mind. (And expect busy signals for a few days.)

Aragorn....thanks for posting Greenspan's remarks. I presume you did so because, like Michael, you felt he was being misinterpreted. My problem with Greenspan's alleged conspiracy involvement was that it didn't appear to reconcile with his efforts to engineer a lower dollar. How can you have a lower dollar policy and a lower gold policy? It didn't make sense to me. Anyway, thanks for helping to clear it up.

Michael.... I, for one, would be very interested to hear what Rothovius is saying these days. Meanwhile, thanks a bunch for providing this forum. You are obviously a very bright guy, and I can no longer get through the day, it seems, without checking out USAGOLD. Bravo!

The recent upsurge in silver prices is being explained by Ted Butler as a direct consequence of a similar rise almost exactly one year ago. Many will recall the rise to over $7.00 that was inspired by the Warren Buffet announcement that he was takeing delivery of 130 million ounces of silver because of his reading of "supply fundamentals". The shortness of supply was only eased as the exchange relaxed delivery requirements. At the same time, Buffet announced that the delivery of his purchases could be delayed upon payment of a "suitable remuneration". Lease rates, which had briefly touched 30% for nearby months, eased, and the short squeeze faded away, with silver prices falling as low as $4.64 later in the year. Buffet's "suitable remuneration" was widely interpretted to mean "leasing" of his silver back into the market.

Now, almost a year to the day later, a notable rise in lease rates has heralded a significant rise in silver to a high of �$5.75 before a bit of profit taking took over today. Ted Butler thinks that 1-year leases from last year have come due and the owners of silver (including Warren Buffet) have become measurably reluctant to continue leasing by rolling over their 1-year leases of a year ago. According to this story, it is becoming clear to many that there is no way that the short overhang in the silver market can ever be covered in an orderly manner. Default appears to be the only option available to the short sellers. Lessors of silver are beginning to face the reality that their metal may never be returned, and reacting by restricting their leases and raising rates.

The whole story was told to me by my broker as according to a research paper that came accross his desk this morning. The whole report will probably be posted somewhere on the internet soon. Perhaps at Gold-Eagle. Those interested should be on the lookout. Of course, Ted Butler's point of view has been around for some time. I believe he has a prominent section at Gold-Eagle. It should be noted that there are many with reservations about Butler's premises. One notable one is a poster at Kitco, currently using the moniker Raul Duke, who posted his reservations in very general terms this evening. Duke would seem, at first glance, to be easily confused with the well-known "poster formerly known as RJ", whose views can now be read at his own website.

That was a very interesting post. My advice to all holders of silver would be to hold on for dear life and don't let the pleas of the silver buyers result in your letting go of your holdings. It is critical to hold on here and do not succumb to the rhetoric of the shorts, i.e. sell now before premiums drop (to silver bag holders) or sell now before the spot price drops. Force the issue! There is one big difference between 1997 and 1999.... and it begins with Y and it ends with K. That means demand is unlikely to dissipate. Any drop in the premiums on bags or one ounce coins is an invitation to buy.

By the way, PH. Welcome back. We missed you.

Thank you for your kind words, my new found friend. If I haven't said it before, welcome to this round table of yore where we sit as equals in the pursuit of knowledge. You are welcome here. And yes, I too appreciate the set up Aragorn provided, perhaps I can return the favor someday soon.

THE STRANGER and USAGOLD thank you for your quick response to the question I asked in an e-mail to the U.S.Mint.See Feb.4 2100 post.As of right now I have no response from the U.S.Mint.I do know that many small mines do not have refining capabilities and have to truck or ship high grade ore to refineries,adding to their expenses,and in some cases making the mining operation unprofitable.
If anyone is interested,I drove to the Klondike region of the Yukon,where the last great Gold rush in North America happened around 1898 to a town called Dawson.
When I was there to encourage tourists,free Gold panning was allowed just south of town,and you could keep all the Gold you found,got about 20th of an ounce in 1 hour of hard work Gold panning.Only panning is allowed in the extraction of Gold.Met 2 college students from Switzerland who had tents set up and stated they were paying there way thru college with only the proceeds from their panning operation.
Little clearification I was there in the early 1970s not 1898............beesting

Sure liked your comments of the actual obsevations of your travels in the 1970's to Dawson, and the presentday small miner's operations. Looks to thisone, as if you live in an area of the world which may become the part of the "new gold rush" WHEN the "worm turns". I would surely enjoy hearing more of your stories, and stories from any other of the "Goldhearts" of their adventures while under the influence of "goldfever". Someday, when I find "mo time" I shall tell "youall" my unbelievable story, so "youall" can have a "good laugh" and "cry a little too" like me.
<;-)

King Hussein's passing will mark a watershed moment in the volatile Middle East. Hussein was the reliable voice of reason in a harsh political environment. What now for the confused politics of the Middle East? Andrew Rothovius offers a glimpse of that future in his latest advisory, the February Van Eck-Tillman USA/Washington-Global Letter -- one of my favorite political/strategic newsletters. Rothovius was among the first to predict what subsequently became known as the Asian contagion -- long before most analysts recognized the fragility of the so-called Asian Tigers. He was also among the first to identify China's role in what future historians are likely to identify as the most far reaching economic events of the latter part of the 20th century.

Now Rothovius concerns himself with two major themes in his latest letter:
1. The Middle East, Saddam Hussein, and oil
2. East Asia and Japan's new found role in rebuilding the economically ravaged region

He starts out by saying that "we are entering a year of vast uncertainties in the economic and political fields around the globe," and at the top of this list is "the unsettling uncertainty about the price of oil." I have learned to listen carefully to what Mr. Rothovius is saying because quite often he is so far ahead of the rest of the field, that his fellow analysts cover the same terrain months afterwards. He talks first of oil's problems -- a price drop of 60% from September of 1997 to December, 1998. He then says some of the oil states were dumping at $5 to $10 below their cost of production "simply to get some money to keep their state-subsidized economies functioning."
He says that demand is now recovering and the price has gotten back to the $13/bbl level, but he does not see a quick recovery unless the oil producers stop cheating on their agreed upon export levels or another shutdown in production surfaces like what occurred in the 1974 oil embargo. He also sees one other possibility and this is where it gets interesting.
"The oil exporting nations," he says, "...are being driven, with very few exceptions, to the brink of economic disaster. It is in the premier oil exporting giant, Saudi Arabia, that the grimmest effects of the collapse of oil prices and the $50 billion fall in OPEC revenues last year are being felt." (If you recall, I have written passingly about the situation in Saudi Arabia with respect to the potential for a devaluation of their ryal.) Says Rothovius, "The authoritative Center for Global Energy Studies in London says that Saudi national debt has climbed to $160 billion, or 111% of GDP."
Saudi Arabia exports "nothing but oil." It has become weak and vulnerable. This is where Saddam Hussein enters the picture. Rothovius puts its succinctly: "It has been his prime ambition from the beginning of his (S. Hussein's) rise to power to control the production and sale of Middle East oil and thereby force the industrialized countries to pay him the money he needs to develop the mass destruction weapons he dreams of dominating the world with. (Now you know why the United States continues its holding action in the Gulf even as you read this article.) In Iraq he already possesses oil reserves probably equal to, or close to equal to, all the rest of the Middle East, but they are still largely undeveloped." Most of his Russian made pumping equipment was destroyed in Desert Storm but he still owes Russia for it. That is why Russia is such a thorn in the side of the United States when it comes to sanctions and controlling Hussein's appetite for aggression. Another interesting piece of the international political puzzle falls into place on Rothovius' assertion that France controls the oil concessions in the oil rich region of southern Iraq and that is why they have a more dovish view of the Iraqi dictator.
But "developing his own oil is not however in the forefront of Saddam's strategy." He is after the oil of his neighbors and there is little in the way of adversaries in the Gulf to stop him. Iran is economically weakened and beholden to the "European and Japanese banks it borrowed from," and President Khatami spends his time trying to control the radical mullahs who have dominated Iran since the Shah was overthrown.
Saddam Hussein, according to Rothovius, achieved his objectives in the latest Four Day War by breaking loose "from the restraints that had been imposed on him by the sanctions and the UNSCOM weapons inspections." I might add that Hussein also drove a wedge through the old UN alliance Bush put together for Desert Storm revealing its weaknesses. The propaganda value of standing up to the United States is not lost on others in the Gulf.
Saddam "is counting on the escalating internal discontent in Saudi Arabia and Kuwait to do the major part of the work for him (in pursuing his dream) of "putting him in control of their oil resources, and shutting off from the industrial nations enough oil to drive the price up by 200% or 300% or even more. He says the "bloated monarchies" of Kuwait and Saudi Arabia are ripe for a fall. A recent attempt by Saudi Arabia to borrow from Abu Dhabi and Dubai, "the world's two richest states per capita for their size," was rebuffed. Dubai has also become the gold capital of that part of the world.
I will let Rothovius himself finish the analysis:
"The Persian Gulf States altogether hold about $800 billion of liquid assets abroad. of which Saudi Arabia alone holds about $500 billion, mostly...in stocks and bonds of G7 industrialized nations. The bulk of this is placed in the banks and other financial institutions of London's financial heart, "The City," which holds the world's greatest concentration of liquid capital. Should the Saudis be compelled by their falling revenue of by internal turmoil, or a combination of both, to cash in their holdings of G-7 paper -- an action that most if not all the other Persian Gulf state would then also have to take -- it could trigger a large scale meltdown not only in "The City" but in most other financial markets as well."
"Saddam is playing on the fears of such an eventuality as he issues hs newly strident calls for the Saudi and Kuwaiti peoples to rise and overthrow the monarchies that he says misgovern them. His own subservient parliament passed a resolution declaring it would be justified in rescinding the recognition of Kuwait's independence that it had voted inn 1993, in the vain hope then that this would lead to the easing of U.N. sanctions. They did not however -- contrary to some news reports -- actually revoke the recognition of Kuwait, where the frightened Emir ordered his army put on a war alert, and the visiting British prime minister Tony Blair promised 'instant retaliation' by British forces stationed on Kuwaiti soil."
Rothovius goes on to say that Saddam Hussein has no intention of invading either country. He is relying instead on fomenting revolution in those countries through his "agents" to topple the monarchies in both countries and "halt oil deliveries to America, Japan and Europe."
What of the American attempt to undermine the Iraqi regime? "It is far too early to see in that," says Rothovius, " -- if its true -- any sort of a military rising or coup to oust Saddam from power. That could come if his gambit to cash in on the oil price crisis fails. Right now we think it's far more likely it may succeed."
As you can see, while we at this FORUM and observers elsewhere, have focused our attention on Asia, Brazil and Europe ominous clouds are gathering in the Middle East. The United States now imports about 25% of its oil from the Middle East. For Japan the figure approaches totality. Europe also imports most of its oil from that region. The United States now imports three times the amount of oil from the Gulf region now that it did in the 1970s when the embargo almost shut down this country and sent prices skyrocketing.
More on East Asia from Rothovius at a later time.
______________
To subscribe to this important strategic newsletter:
The Washington/Global Letter/P.O. Box 1697/Naples, ME 04055/800-219-1333
Reproduced with permission. USAGOLD/Denver, Colorado
Further reproduciton prohibited.
�

Michael....thanks for taking the time to share Rothovius' ideas. It doesn't sound as though he sees immediate relief for oil prices. Too bad. I do look forward to hearing his views on Japan, however, and I hope you manage to post them as well. It seems to me that Japan is the one major economic power, except for Hong Kong perhaps, that really is experiencing quantifiable overall deflation. It makes sense to me to believe that that long proud nation (Japan) will manage, in the months ahead, to begin the process by which it will recover its economic leadership of East Asia. Wouldn't a successful attempt at reflation in that part of the world have important implications for the price of gold? I think so. Anyway, thanks.

FOA -- Please comment on the following:
Andrew Rothovius has in his latest advisory discribed "The Volatile Gulf Region". He believes that Jordan's King Hussein's passing will mark a watershed moment in the volatile Middle East. Jordan's King Hussein was the reliable voice of reason in a harsh political environment. What now for the confused politics of the Middle East and the aims of Iraq's Saddam Hussein.

Mr. Rothovius talks first of oil's problems -- a price drop of 60% from September of 1997 to December, 1998. He then says some of the oil states were dumping at $5 to $10 below their cost of production "simply to get some money to keep their state-subsidized economies functioning." "The oil exporting nations," he says, "...are being driven, with very few exceptions, to the brink of economic disaster. It is in the premier oil exporting giant, Saudi Arabia, that the grimmest effects of the collapse of oil prices and the $50 billion fall in OPEC revenues last year are being felt." Says Rothovius, "The authoritative Center for Global Energy Studies in London says that Saudi national debt has climbed to $160 billion, or 111% of GDP." Saudi Arabia exports "nothing but oil." It has become weak and vulnerable. A recent attempt by Saudi Arabia to borrow from Abu Dhabi and Dubai, "the world's two richest states per capita for their size," was rebuffed. "The Persian Gulf States altogether hold about $800 billion of liquid assets abroad. of which Saudi Arabia alone holds about $500 billion, mostly...in stocks and bonds of G7 industrialized nations. The bulk of this is placed in the banks and other financial institutions of London's financial heart, "The City," which holds the world's greatest concentration of liquid capital. Should the Saudis be compelled by their falling revenue of by internal turmoil, or a combination of both, to cash in their holdings of G-7 paper -- an action that most if not all the other Persian Gulf state would then also have to take -- it could trigger a large scale meltdown in most financial markets."

As you can see, while we at this FORUM and observers elsewhere, have focused our attention on Asia, Brazil and Europe ominous clouds are gathering in the Middle East.
---
WE await you reply.
Thank you !
Gandalf
<;-)

Reuters reports that this past week Myron Scholes retired from LTCM and that one or two firms involved in the $3.6 billion bailout want out now. Several others want out as soon as possible which probably will not be until autumn, 1999. Scholes was a partner in the firm. Several other partners want out according to sources close to the firm. My interpretation is that Merrill Lynch and Goldman Sachs are scrambling to keep the fund and the bailout from collapsing.

For details:
http://www.marketwatch.newsalert.com/bin/story?StoryId=CnRP60b8ZtJa1mJe0nJGW&FQ=v%25reuter&Title=Headlines%20for%3A%20v%25reuter%0A

Another hedge fund, Convergence Asset Management, has suffered major losses and could be going under, according to a Financial Times report. Investors (un-named) want their money back. Convergence's net asset value has shrunk from $440 million to $150 million. It's leverage is ten times capital. It's manager, Andrew Fisher formerly of Salomon Brothers, is seeking capital and is said to be seeking capital for an un-named "strategic investor."

Wasn't John Merriweather from Salomon, also?? Are we witnessing capital flight from the darling of the GoGo 90s -- the immortal hedge fund? What else is going on out there not we are not hearing about?

Date: Sat Feb 06 1999 21:07
crazytimes (@ Goldteck and low cholesterol....) ID#344326:
Low cholesterol has also been found to correlate with severe depression and risk of suicide. No kidding either.

Got butter?

-end-
That is because the persons upon who the experiments were done were not paid sufficiently to buy higher fat content food, e.g. beef and also were know to squirrel their money on gold and silver and not food. (food for thought, hah!).

TEST

Something I have observed recently...a poster in c.s.y2k reported that she saw on the news in california that a couple pulled $20,000 out of the bank and buried it under their dog house (presumably to protect the money from Y2K.) The money was, alas, stolen, and the story ended with "Next time, we'll leave our money safe in the bank!"

Later on, another poster reported the same story, only in Cleveland! $20K, doghouse, stolen, next time we'll leave our money in the bank.

Now I was just reading on Gold Eagle, and a poster reports that IN FLORIDA, a local story was on TV where a couple pulled $20,000 out of the bank and hid it in a bucket, under their dog house. Alas, the money was stolen. The TV showed pictures of the moved doghouse, cops, etc, and the couple said, "Next time, we'll leave our money safe in the bank."!!!!!!!

Is it just me or is this starting to sound a little suspicious, like perhaps something you might expect from a Ministry of Truth? Has anyone else seen a story like this on TV? Perhaps it IS the same occurance, but the posters seemed insistent that each instance was a local one.

Speaking of which, although you all must know this already, if the banking system DID collapse, paper cash would be a rather worthless thing to have anyway, wouldn't it? The cash only retains value as long as the system is working.

Personally, I think we should all pull out of the banking system and use e-gold. I'm switching today. Y2K or no Y2K, I'm fed up with the banking system. It's possible to break its back without simultaneously destroying our own system of value and payments. Let's make a movement out of it!

Washington-Feb. 5.-FWN--December U.S. consumer installment credit rose $7.3 billion to $1,308.4 trillion, led by an increase in auto loans, the Federal Reserve reported today. November consumer credit still showed a $3.9 billion increase as reported last month. November consumer credit totaled $1,301.1 trillion. Analysts surveyed by FWN were looking for average increase of $6.9 billion. Consumer credit grew at a 6.7% annual rate in December, up from 3.7% annual rate in November.
Auto loans rose $5.9 billion to $447.2 billion, a 15.9% annual rate. Revolving credit rose $2.2 billion to $558.6 billion, which was a 4.7% annual increase, said the Fed. Other loans declined by $800 million to $302.6 billion, a 3.1% annual decrease. This category includes loans for mobile homes, education and recreational activities, which may be secured or unsecured.
<;-)

Steve -- A while back you setforth your reasoning that the XAU would bottomout at the lower B line, go sideways and then up! Well it did! AND now that the XAU has reached the upper B line, the Stochastic, and Momentum look good, and the close is now above the 50 day moving average. Sooo, I am now asking you to tell us what your crystal ball shows NOW. Can you see two GREAT weeks in a row ? OR should we just be happy for a while and buy more of this cheap AU ?
<;-)

Good question. No crystal ball here. Just many hours of studying and totally misinterpreting charts. One thing and only one thing I know for certain is that fundamentals build charts, not chart fundamentals.

Also, for the record, I said gold futures (or meant gold futures) not the XAU would bounce from its then current level based on an lb-bd measurement that I developed for my TA Stuff I do for Leroy Stockman. I find that measurement to be the greatest indicator of a bounce condition that I have seen: a falling lower bollinger with a leveling price action with part of the price breaching through and below the lower bollinger. It is a signal to start watching for a leveling action then a bounce. Just a signal, not a certainty. Well, daily gold did just that three to four trading days ago. Low and behold, boom.

Next, the weekly trading chart did the same but not as dramatically.

The nature of bollinger band indicators is that they basically show a 2-standard deviation band around a changing price chart. Its history, as are many other technical indicators, came from scientists, statistiicians who tried to apply mathemtical predictive technology to stock trading. I had a PH.D buddy who help me develop a diamond price model out of non-linear regression mathematics. It actually worked (most of the time).

Now for your question, what now? Well, who knows for sure but I can offer this. It seems gold likes a four-day up pattern during rising periods of price. Study the chart and you will see this. Take that information and apply the bollinger pattern to the chart and you get the idea that Monday will show gold up before a leveling action or a down action. You see gold is tracking up the daily gold chart upper bollinger but it is showing a sign of weakness. Weekly gold is about to hit its upper bollinger band, but it shows a POSIT 2 or a two-week out of a potential four (if you hold the same standard of four up weeks before a leveling or downward trend. So the score is daily gold, one more up day, weekly gold two more weeks of upward trending prices.

Back to the bollinger theory. Standard theory says that the price will travel between the upper and lower band. But the follower of the bands will tell you that the bands move too. They have to in order to maintain the two-standard deviation track: price goes up bands follow. Greater the price change, the wider the bands, the less volatile the price, the narrower the bands. Wider bands tend to narrow. Narrow bands tend to widen.

So, look for an indication that daily gold might track up the upper bollinger. If it does this generally indicates that the item under study is finding a new price level. If it flattens (not tracking up anymore) then look for a turn in price as it will try to find the lower bollinger, which will also try to find the price by eventual moving up to meet a falling price.

Summary: Upper bollinger band for daily and weekly gold are in the 291-295 range and gold is currently there. The lower bollinger is in the 286-288 range. That is your bollinger trading range. Expect gold to play there unless it continues to track up the upper bollinger. Look for one more day of up tracking for daily gold and two more weeks of uptrending for weekly gold. That is all I can offer. Thanks for asking.

Steve, the Hobbits have your theories under study, BUT this will take a while to gain the same level of understanding ! OK, we all shall watch after SPOT the dog jumps UP on Monday. That will take the "sister" XAU above the 69 level and break the upper double top resistance line which if the weekly SPOT trends up for two weeks means that the "sister" XAU could challange the next resistance level of 75 ! IF SO, the Hobbits will have a party in your name. We shall see. Thanks from an ol'e chart lover since the days of Worden and Worden.
<;-)

Though I do not always agree with Gary North, I agree with him on the following assessment of the gold coin market. It reflects a developing reality.

The situation he describes is not happening in a vacuum; it is occurring for good reason, and though Y2K concerns are immediate for many gold buyers, it is not the only reason.

I especially agree with the assessment that the people themselves might be moving the monetary system back toward a gold based money. Most of the people I talk to are saying that the immediate impetus for buying gold is Y2K, but that they had been thinking about gold ownership for a long time due to concerns about the future value of the dollar and potential destruction of assets in a stock/bond market meltdown or an American version of the monetary contagion.

They buy now because of the growing perception that Y2K demand might drive prices higher and pressure already short supply. Most say they see Y2K as a bump in the road that needs to be dealt with but will likely go away. The other problems are seen as more pervasive, fundamental and lingering. The sum of their fears is that they won't be able to get gold down the road when they will need it so they are acting now. Recent blips in the supply situation on certain items issue fair warning. If you want to own gold, I wouldn't put off a purchase. As I say, none of this is happening in a vacuum, but for good reason.

____________________________________

Gary North's REALITY CHECK
Issue No. 36
February 5, 1999

THE RATIONING OF U.S. GOLD COINS

This week, the U.S. Mint stopped selling gold coins
for a day. Then it announced an allocation system. This
means rationing if demand continues to accelerate. It
means standing in line and not being able to buy all you
want at the official price.

This demand is Y2K-driven. Gold bullion has gone
down. But the coins are going out the door. More tenth-
ounce gold eagles were sold last month than in the first
seven months of 1998.

In the first six months of 1998, the Mint sold 96,000
ounces a month of all gold coins. In the second six
months, it sold 210,000 ounces a month. In January, it
sold 268,000 ounces.

There is greater demand than supply at the Mint's
prices. Instead of raising their prices to reduce demand,
The Mint will begin allocating coins. Dealers will not be
able to buy all of the coins that they have orders for
unless they raise their prices (the premium over gold).
Some of them already have done this.

Within a month, wholesalers' existing inventories (if
any) of the smaller coins will be depleted. At that point,
prices will rise or else you will be put on a waiting list.
My point is this: the supply of U.S. gold coins, especially
the smaller ones, will begin to get very tight very soon.


SMALLER IS BETTER

As you may know, I have been recommending the purchase
of tenth-ounce American eagles. My main reason for
recommending smaller coins is liquidity in a social
breakdown: more transactions per ounce. The one-ounce
coins are best for buying to sell later for electronic
money, but for those who are trying to get out of
electronic money and into a marketable commodity during a
banking crisis, the tenth-ounce coins are better.

These coins command a higher premium over bullion
value than the one-ounce coins. You don't get something
for nothing. Ten tenth-ounce coins this week cost about
$335. A one-ounce coin was around $300. To compare
prices, click through:

http://www.msnbc.com/modules/commerce/gold2.asp

Until this year, the Mint's percentage of one-ounce
gold coins was over 70% of total gold coin production.
These are the preferred coins for conventional investors
who hope to sell these coins later for money. These are
people who evaluate the success of an investment in terms
of how much electronic money they receive when they sell.

The tenth-ounce buyer thinks differently. He is
thinking of permanently transferring his wealth out of
electronic money and into purchasing power. The rise in
the sale of tenth-ounce coins is an aspect of the re-
monetization of gold. We are seeing a great reversal.
Since 1933, and really since the turn of the century,
people have not used gold coins in the United States. This
is going to change in the next decade.

This means that the Mint bet on the wrong horse for
1999. It geared up for one-ounce sales, but buyers are now
after the smaller coins. This is because Y2K is changing
the reasons for buying gold.

It is happening in the silver coin field, too. Consider
silver bullion, which was $7.00 an ounce on Feb.4, 1998:
a nine-year high. A bag of 90% U.S. silver coins sold
for about $5,100. There was no premium over bullion
value, or very little. Silver fell to $5.00 an ounce by
January, 1999, and a bag of coins (715 fine ounces) sold
for over $5,400. This is a premium of 50% over bullion
value. This is the re-monetization process in action. We
are at the beginning of this process. Y2K will accelerate
it next year on a scale not yet understood even by Y2K
pessimists.

Re-monetization will happen to gold coins, especially
the smaller ones. This will push up their premium above
the bullion price. Why? Because the coins cannot be
produced fast enough at bullion's price to meet demand
today, let alone in late 1999, when the Y2K panic will
appear.

You are not going to order a 100-oz. bar of silver,
are you? Not at $29,000 today, and more if gold's price
rises. You will surely not buy a 400-oz. bar that central
banks use to settle with each other. What could you do
with it in a breakdown? And who would give you change?

That's why tenth-ounce coins are good: you don't have
to get change when you buy an inexpensive item. There are
more of these items to buy. What can you buy with a 100-
oz. bar? Buy a house in 2002?

Until I started recommending tenth-ounce coins last
year, demand was pretty low. I told people to buy them
irrespective of the price of bullion. Bullion is for
speculators and very rich people who are moving large
amounts of electronic money into gold. The small investor
who worries about Y2K should be buying tenth-ounce coins.

That's why they are disappearing. They are being sold
out of inventories. They will be in short supply because
the Mint is not set up to produce them: "no blanks."
Meanwhile, demand is rising.


CONCLUSION

I will say it one more time: you had better act when
you can. Buy when an item is available. Buy the "cottage
industry" items now. You can buy mass-produced items later
in the year.

Think "Aladdin lamps." You didn't buy enough of them,
did you? Now you can't buy them.

Think "silver coin bags." They are being rationed by
dealers to their best customers, one bag at a time, and
they command a 50% premium above bullion value. You cannot
get delivery of ten bags today.

Talk it over this weekend. Then on Monday, make your
decision.

I would have saved this recommendation for REMNANT
REVIEW, but it was mailed today. The shortage will have
become visible by March. My advice: don't dawdle. Make up
your mind. (And expect busy signals for a few days.)

Picture this now on the boobtube !
<;-)

(The Nightly Business News)
PAUL KANGAS: My guest market monitor this week in Mark Leibovit, editor and publisher of "The Volume Reversal Survey Market Letter" based in Sedona, Arizona, but we're pleased to have him in our studio tonight. And welcome back, Mark.
MARK LEIBOVIT, EDITOR & PUBLISHER, VRSURVEY.COM: Always a
pleasure being here.
KANGAS: I understand you've gotten really modern and changed the name of your letter a little bit. What is it now?
LEIBOVIT: We are vrsurvey.com.
KANGAS: .com. I knew it.
LEIBOVIT: We're doing Internet services and hotlines. We got to reflect the times.
KANGAS: Understood and a probably a very wise move.
KANGAS: But you had a pretty wise annual forecast model last year. We have a graphic of what you were predicting last year right from the beginning of the year. And we can see that the pattern followed pretty much what happened, especially the year-end rally.
LEIBOVIT: Spectacular call at the end of the year. We were calling for a low on October 2 and the actual low was October 8. We were six days off. Early part of the year, what actually happened was the indexes went higher but the broad market, the advance/declines turned down. So actually the model was correct in reflecting the overall market.
KANGAS: Well, a lot of people are saying that the Super Bowl predictor was wrong last year because Denver won the Super Bowl last year, just like they did this year And the market was supposed to go down. You say the predictor was correct. Is that right?
LEIBOVIT: I believe so and it may be again right again this year. Now an interesting statistic last year. On the New York Stock Exchange, 57 percent of all stocks were down and on NASDAQ, two-thirds were down. Now if that's not a bear market, I don't know what is.
KANGAS: So the averages might have been up but most stocks were down, therefore the Super Bowl predictor was correct.
LEIBOVIT: I think it was correct. And my model was correct, too.
KANGAS: Are you predicting that it's going to be correct this year, too?
LEIBOVIT: Well, I have a feeling there's a chance it could be.
KANGAS: Well, I've seen a, I've had a look at your first quarter forecaster. Let's have a look at that on the graphic.
LEIBOVIT: OK. OK.
KANGAS: And we can see it's very bullish looking.
LEIBOVIT: Well, now right now we are experiencing a correction and when volume changes to the upside and breadth improves, then this model kicks in. Until that time this is a theoretical projection. I have a feeling it still could be right and we could have a heck of a run into April. After that point though, the model says we can come off sharply.
KANGAS: That looks like 10,000 Dow, the way you've got this one.
LEIBOVIT: It might be. But again, let's wait for volume to come. This correction we're experiencing now could be over in a day or two but we'll know it. Volume reversal to the upside, positive breadth and we jump in.
KANGAS: OK. Now we are seeing a selloff, especially in the high-tech stocks. Can this affect the whole market?
LEIBOVIT: No question. Technology has led the whole mood for a couple three years now. If this doesn't clean up and if we continue to see poor breadth and technology weak, IBM continues to look bad just as one stock and we've been short for the last couple days, that's a bad sign.
KANGAS: Well, not only, we've got the combination of a selloff in the high-tech stocks and a lot of buying going on in natural resource stocks. The metals and oils are doing well. What does that mean?
LEIBOVIT: Well, it's a little early to get bullish on the oils. The oil service stocks are looking a little bit better. The golds are looking good. We are long some gold shares here. I have a long-standing projection on the XAU Index, the gold and silver index, up to the high '90s and I think we're in the high 60's now.
KANGAS: So despite your bullish prediction for the first quarter as we just saw on the chart, after that you're looking for more damage?
LEIBOVIT: Well, the model is still being constructed but it looks like a zig- zag very choppy year and you're going to get a series of panics, I think, during the year. Maybe it's Y2K- related.
KANGAS: All right. Now the last time you were with us, August 14 of '98 you gave us some great stocks. Power Integration at 11. It's now 30. Acorn, 5 1/2 and still about the same. Fore Systems is down, 24, down to 16 now. That was the only real clinker you had. Rambus at 61; it's now 75. You gave us Intel at 86. It's 127. Global Telesys at 48. It's 60. And what is it, Net Bank at 22. It's now 50. Are you out of all these or are you still with them?
LEIBOVIT: Out of them but I like the Internet banking stocks and on a pullback, I'm still looking at Net Bank. and another Internet banking stock called TeleBanc. There is still a lot of growth in that area.
KANGAS: OK, we've got another 35, 40 seconds for some suggestions as to what to buy despite the selloff going on.
LEIBOVIT: OK. Buy the golds. Newmont, American Barrack,
Placer Dome, if nothing else as a hedge because there's
some buying coming into them. I like gold stock Emisphere on the NASDAQ. It's around 17. I think it's going into the mid '20s.
KANGAS: Symbol.
LEIBOVIT: EMIS.
KANGAS: OK.
LEIBOVIT: Qualcomm. I think that's going up 10 or 20 points. Great stock. It was up today in fact. TWA. It's
around $6 under accumulation.
KANGAS: It was up today, 7/8 I believe...
LEIBOVIT: We bought it a couple days ago. Looked like a turnaround. Boeing looks higher.
KANGAS: OK.
LEIBOVIT: Under a bit of accumulation. I like Electronics for Imaging.
KANGAS: So selective but not super bullish.
LEIBOVIT: Not super bullish but if I get a volume reversal, I'm buying the Dow because if that model's right, I want to catch 10,000.
KANGAS: Mark, thanks very much.
LEIBOVIT: My pleasure.
KANGAS: My guest Mark Leibovit, editor and publisher of the
vrsurvey.com.
LEIBOVIT: You got it. Thank you.
=====

First,Gandalf thanks for the encouragement on sharing hands on goldfever experiences,I do have some more to share and will post when I get a chance.You are right I do live in an area where active Gold mining is still being done.In fact my next post,if I can ever get to it is going to be titled:THERE IS STILL PLENTY OF GOLD IN THEM THAR HILLS!!!

Second,this is to USAGOLD and may seem like a doumb question but concerning Y2K,and I've really enjoyed all your informitive posts on the subject,the question is:If many of us rely on our Gold holdings to trade for necessities of life during the actual crisis caused by Y2K,with little or no electronic communications,no coin book publications available,etc.how do we as semi isolated segments of the population,reach a fair value for our bullion in everyday trade???? In the old days when value was stamped on a coin it was easy,but now we have a Bullion value far exceeding face value of coins,already in existence and currently being minted,and most of us feel that value may skyrocket when Y2K happens.Hope the question was clear enough.Comments by everyone appreciated..........beesting

Test

If the economy becomes completely disrupted local gold exchanges will proliferate in nearly every city or town simply because it will be a good business. Even though theoretically there should be no problem bartering directly with gold, most people will visit the exchange first. The bullion coins are all marked as to weight so deriving the price using London or some other spot price should not be a problem -- any more than it is now. As for the pre-1933 European gold coins most gold dealers know the weight off the top of their heads or can easily consult a reference. In a crisis situation, people are not going to be concerned about the exact gold price at any given moment, and they aren't going to be as much a stickler as they would be under ordinary circumstances. The comfort of owning gold will be sufficient for most.

Having said all that, I have read and/or been told several stories about gold brokers in remote locations coming within a dollar or two of the gold price despite being isolated from the world's money centers. An ex-Green Beret told me a story one time about being dropped deep in the Viet Namese jungle far from civilization on a mission. They got to a Viet Namese village and he decided just as a matter of interest to visit a "gold dealer" in this far off location. He asked the value of a British sovereign in Viet Namese currency and was surprised to find out when he returned to Saigon that this dealer in the middle of nowhere was very close to the actual price. He always remembered that experience and was anxious to tell me the story the first time we talked on the phone. He ended purchasing a respectable stash of British sovereigns.

We will be going into uncharted territory if Y2K reduces the United States to a barter economy. These are just my best guesses based on observations as to what has occurred in the Asian contagion countries.

If we are unfortunate enough to be visited with Y2K and hyperinflation simultaneously, gold will be a substantially better money solution for you and me than paper currency or any other paper asset. In an imperfect world, the small problems we might encounter as gold owners will pale in comparison to those we would encounter having not properly diversified.

This message pertains to gold. Since gold is a political metal, I have consistently held that there is NO real chance for any real appreciation in the metal until its collusive enemies are removed from political office. The Gold Bull will remain a mere imaginary scenario in the minds of gold investors until the corrupt status quo is broken.

Ironically, this decade, the Gold Bull has become a metaphor for the rebirth of justice, honesty, and integrity in government and the free market. Without a gold bull, the deterioration of America's free market system, not to mention the entire global economic system, will continue apace. There will be more and more LTCM's every day...and increasing moral hazard introduced into the formerly free American financial markets.

The current "debate" occuring in the Senate will most likely be determined upon partisan lines. As such, Clinton will receive a mere oral rebuke and will be able to continue his egregious corrupt ways, along with his partners in crime, Fed Reserve Chair Greenspan and Treasury Secretary Rubin.

What I fear most is the non-reaction of angry Americans who will simply accept the verdict in the most cynical fashion. They will know it is wrong...and yet will do NOTHING about it, resigning themselves to the old catch phrase, "Well, I guess you just can't fight City Hall!"

Living in Los Angeles, I have seen numerous Clinton supporters massed in front of the Federal Building over the past month. They wave and exhort passing motorists to honk their horns and indicate their support of the presidential miscreant. Ironically, I have driven past these Democrat protestors numerous times...and rarely hear any car horns blowing.

Do the polls suggesting Clinton's popularity mislead?

In any case, the point I am making is this...those who disagree with the mere slap on the hand awaiting Clinton MUST adopt the same methodologies of protest that served the anti-Nixon crowd so well during Vietnam.

Thousands of people should storm the Federal Buildings across the nation. Protesters MUST break down the process of government if that process is wrong. Nothing less than outrage should meet a verdict that exonerates a criminal President and his partners in crime.

It is imperative to send a clearcut message to both Democrats and Republicans that there are a large number of Americans who will NOT sit idly upon their hands and pardon this President...who will NOT accept a return to the crooked status quo he represents...who WILL fight a government controlled solely for the benefit of Wall Street interests to the exclusion of fairness and justice.

Essentially, it boils down to one issue...and it's not about sex...it is about this: why should the average American be held to a higher standard than their President or the Establishment interests he serves? It should be the other way around...it MUST be the other way around. Otherwise, the moral rot already existent in this country will multiply exponentially until there is NO respect left for anything that truly matters.

Although it may be hard for people to muster up passion for a protest against a President that does not involve saving lives (as in ending the Vietnam war), nevertheless, it is important that those who head for the streets in protest understand that it is about saving something just as important as life itself...it is about saving Justice in America.

BE MAD AS HELL...AND DO NOT TAKE IT ANYMORE!!

http://home.earthlink.net/~ewag618/index.html

If anybody remembers (was it Asimov or Heinlein) in the trilogy novel that discussed Psychohistory. The details didn't count only the statistics. I can't remember the name but I know some of you will help me out here. Anyway, this PDF document is a 29 page discussion on the technical nature of gold, commodities, the markets. When I finished reading I wished the summury would have spelled out more clearly what I thought I had read. I know I should read it once or twice more but ... ah... the time is short. So I will hopefully hear from others as to their conclusion. My take was that the long term economic cycle shows gold in a bottom situation along with commodities such as oil, wheat, and so on. The markets he says will do good after some heafty corrections until the year 2008, which is when the baby boomers will start retirement, at least the first of them. But like psychohistory in that it didn't deal in depth with any of the variables or details, rather the cycle. So I have , believe it or not, wrestled with this all day. You see what struck my chord in this document was that the stock market won't crash -- it will correct -- until 2008. The market will NOT crash per se as there is too much money out there, too much earning power to keep it going strong for a while yet.

In most discussions here and on kitco, the theme seems to be the following:

stock market bubble bursts.
gold rises.


After I read this compelling argument about long term cycles I came away sratching my head. Is it possible that the market and gold will rise together. He certainly made the point that inflation and higher interest rates are what kill markets, not lack of profits.

Well I hope that I have wet the appetite of those frequenting this page to go through the trouble of downloading this pdf file to digest it and post their thoughts regarding it here. Remember it requires the Adobe Acrobat reader that can be downloaded from www.adobe.com for free. Let me know what you think.

Steve

$290.50 (about time).

Good joke from kitco:


Date: Sun Feb 07 1999 18:41
Greenstone Gold (One from Gaza.........) ID#428218:
Copyright � 1999 Greenstone Gold/Kitco Inc. All rights reserved

A hot air balloonist is sailing across the countryside and is utterly lost. He spies a man walking
below and decides it would be a good idea to let some air out, float down and ask for
directions.

As he subsequently hovers about 30 feet above the other man, the balloonist leans out of the
basket and says: "Excuse me can you tell me where I am please?"

The man on the ground looks up and replies: "You are in a hot air balloon hovering about 30
feet in the air over a field."

The balloonist says: "You must be a broker?"

To which the man on the ground replies: "Yes I am actually, but how did you know?"

"Well," says the balloonist, "Everything that you said is technically correct, but it is of no use
to anyone."

The man below says: "Then you must be a trader?"

"Indeed I am," replies the balloonist, "But how could you tell."

"Well," says the man on the ground, "You don't know what you are doing, where you are or
where you are going, but you expect me to be able to help. In fact, you are in the same
position as you were before we met, but now it's my fault."

A strong welcome to F......the unpronounceable I personally have enjoyed most of your posts at Kitco for the last year and a half.

USAGOLD,thanks again for the quick replies to my posts,you've cleared up quite a lot for me. One other question,that has bothered me,you can see from my last post that I do indeed live in a gold bearing area,because of environmental restrictions,as far as I know,most current Gold production is at a very low level,with much of the gold found being placer Gold.(For new Gold Bugs placer gold is Gold found in it's natural state but not pure Gold,usually alloyed with silver or some other element,the actual Gold content can't be determined until the Gold is refined.)
My question is,how was the value on placer Gold determined in the past,before FDRs $35.00 to the ounce official U.S. price of Gold was established,and how will the small coin and Gold shops handle this type of Gold in the future???
As a very very(no typo)small merchant I am going to look into purchasing an accurate inexpensive non-electronic gram scale.........beesting

A formidable first post. Please take your seat at this table round, my friend... We are honored by your presence.

Asimov's "Foundation Trilogy" was about a Psychiatrist predicting the distant future to such an accurate degree tha periodic "time capsule" releases told everyone exactly what had transpired to date. The whole concept was based on the Psychiatric fallacy that man evolves from mud and is merely a higher form of predictable animal.

The basic nature of man being however spiritual, future events will be a result of the actions and decisions of free thinking individuals, (despite the fact of all the sheep out there). The rebuttle to Gary North's Doomsday scenario posted a few days ago elaborated on this quite well.

This post is again about gold...a metal that stands for financial integrity, yet under attack by those who would undermine the eco-socio-politco integrity of an entire nation.
-----------------------------------------------------------

Although there are many skeptics who express doubts about any real negative ramifications resulting from the Y2K bug, nevertheless, there is ample evidence to suggest that there will be difficulties experienced in the national infrastructure, most notably the power utitlities and banking system.

If notable problems are to occur in the future, it is truly imperative that the country be led by a man that commands respect and admiration for his truth and integrity, or at the very least, a man that most people do NOT perceive as being a chronic, incorrigible liar.

If Clinton is exonerated by the Senate as most expect, then he will NOT be that man. The sad reality is that a minimum 30% of the population will NOT accept the validity of the verdict. In fact, those 30% of the public will certainly be outraged, if not vocally then in the form of resigned silence. Polls suggest that a much higher percentage of the population believe he is lying but feel the entire matter should be overlooked, primarily on the basis of the current "peace and prosperity" in America.

So what happens if genuine problems arise owing to the Y2K bug requiring sacrifice and hardship on the part of Americans? When the going gets tough, how will Americans react?

If President Clinton goes before the nation to outline major problems requiring emergency measures, will anybody out there believe him? Will anybody be willing to suffer one scintilla of pain on behalf of somebody who commands ZERO respect or credibility?

I certainly would be skeptical. I would NOT afford the man the benefit of the doubt, simply because he is the President. Why would anybody be so foolish or naive? Who would want to be "suckered" by this guy again?

For example, if a petroleum shortage were to arise suddenly and he were to declare it necessary for Americans to give up driving their cars at least one day a week, why would anybody respect his edict? Even if the entire Washington Establishment got behind him in this edict, why would anyone respect its opinion, given how little respect it will command once it forgives his crimes? With Clinton's exoneration, the contagion of disrespect will infiltrate every Establishment institution in America.

It all boils down to this: Clinton has not treated Americans with any semblance of respect so why should Americans respect him any longer?

He stared into the TV cameras and lied unabashedly to an entire nation without so much as a flicker of an eye. Those who say it is merely a lie about sex do NOT get it. His lie is a shameful breach of trust between the nation and him...there is no reparing it after the fact through casual attendance at Church or other patently insincere tokens of contrition. Even if 70% of the population believes Clinton in the future, one can be assured that at least 30% will NEVER trust him again! They will never be willing to follow him into Hell and back...but will seek to follow their own self-interest in the face of any future adversity.

That is why it becomes so much more urgent to remove this man from office ASAP...because when the Chief Executive commands no respect, then inevitably, during any time of national crisis requiring huge sacrifice on the part of Americans, the likelihood that the country will pull together behind a scoundrel is slim to none.

Farel, its good to see you posting here after the abuse you have take on Kitco. I read both sites pretty faithfully. It looks like gold is taking a healthy turn north this evening. One can only hope the trend will continue toward Polaris. We goldbugs need to have our day in the sun. Methinks that day may be soon.

April gold futures now at $290.90...

Now hear this, hear ye, hear ye, now hear this:

Le Metropole members,

SHAKA ... ZULU


I just received this email from an out-of-work
Australian miner:

"Why does the Reserve Bank of Australia always sell
when the gold price approaches $300?

"Australian mining companies (directors on Board of
Reserve) have forward sales until 2002 with a low
price, and with a low Australian dollar/U.S. dollar
rate. They must be making a fortune. So much so that
they can buy to fill contracts rather than mine gold.

"When gold was floated, didn't the reserve banks pledge
not to sell reserve gold onto the commercial market?

"Something must be done. I and 20,000 other Australians
have been out of work for nearly two years."

I have promised the Australian miner that something
WILL be done.

For the Gold Anti-Trust Action Committee has devised a
strategy to take on and defeat those who are colluding
to suppress the price of gold -- including gold-mining
companies that are helping to devastate their own
industry in the hope of picking up the pieces when
their competitors have been ruined.

GATA's strategy is patterned after the strategy of the
great South African Zulu warrior, Shaka. As a youth he
was shunned by his own people and went into exile. But
he returned to become a leader of the Zulus and devised
a plan to conquer their adversaries. Previously wars
between tribes were more for show; there was no real
fight. It reminds us of what is going on in the gold
industry today. There is a lot of complaining but no
one is acting against those in the industry who are
helping to ruin it.

We are going to change that.

Shaka devised the strategy of the enveloping horn. His
attacking Zulu warriors massed in a diamond-like
formation. The piercing point of the diamond struck
first. While the enemy engaged in battling the Zulu
warriors at the point of the diamond, the diamond's
left and right flanks bolted out to the sides and
enveloped the enemy in the shape of a horn. Before the
enemy knew it, he was flanked, surrounded, confused,
and beaten.

GATA is now selecting a law firm to challenge gold's
enemies in federal court. That will be the point of our
diamond. Those who are colluding to keep the price of
gold down will have a fierce battle on their hands in
court. And while we confront them there, we will
envelop them on both flanks.

On the left flank we will publicize to the news media,
financial authorities, and the public how short the
colluders are, what they have done to the gold
industry, and how their reckless conduct is threatening
markets throughout the world.

Gold mine production in 1998 was about 2,529 tons. Gold
demand was about 4,130 tons. That left a production
deficit of about 1,600 tons. Gold Fields Mineral
Service estimates that central banks sold about 450
tons last year. So 1,150 tons reaching the market had
to come from other sources. Much of that supply is the
"leased" (borrowed) gold that the colluding shorts have
plopped into the physical market, confident that they
could keep depressing the price and buy the borrowed
gold back cheaper.

The problem for the shorts now is that the price of
gold has gotten too low and physical demand is
exploding. The shorts are running into a brick wall of
demand. On top of that, we believe that the gold market
short position now may have reached 3,000 tons, a
quantity that simply cannot be covered in any
reasonable time.

GATA believes that there was collusion in letting the
Long-Term Capital Management hedge fund out of a 300-
ton short position in an off-market transaction. For
if, as it began to go bankrupt, LTCM had gone into the
open market to buy 300 tons of gold, the price of gold
would have soared.

WHAT IF THE SHORTS HAD TO COVER NOT JUST 300 TONS BUT
3,000 TONS?

GATA will direct media attention at this situation and
turn up the heat on the shorts.

We believe that total gold loans may be as high as
8,000 tons. For there has been a deficit between
production and use for years.

That brings us to the right flank of our battle.

We will confront the gold-mining companies that are
excessively hedged, and will call for a shareholder
revolt against them. (See press release below.) On the
GATA web site now under construction we will document
excessive hedging by particular companies and urge
their shareholders to sell their shares and purchase
shares of the gold producers that are not excessively
hedged or barely hedged at all.

We will applaud the companies that buy back their
hedges and post that information on the GATA web site
so it may be circulated around the world.

Here is an example of the kind of issue we feel must be
addressed.

Anglogold of South Africa claims to be the world's
biggest gold producer. In the fouth quarter last year,
though the price of gold was below $300 and at rock-
bottom levels, Anglogold raised its hedge position to
11.8 million ounces from 8.1 million ounces. That is a
dramatic increase, and it means that Anglogold flooded
the market with gold in the fourth quarter.

The press release circulated by Anglogold in North
America made no mention of this extraordinary selling
of gold. It was mentioned only in South Africa, where
Anglogold is required by law to disclose such sales.
Even there Anglogold did not make its extra selling
clear; analysts had to review the company's information
carefully to figure it out.

Anglogold's recent commentary about the gold market
failed to highlight the company's own flooding of gold
to a depressed market as a big factor behind the
stagnation of the price of gold.

To top it off, some major contributors to the World
Gold Council met last November, supposedly to discuss
the problem of gold leasing. Anglogold took the subject
off the agenda.

Meanwhile, 20,000 Australian miners are out of work.

This is an outrage. With your help, we will turn rage
on the likes of Anglogold.

GATA believes that all of us together can make a
difference and get action, largely because of the power
of the Internet. We are mobilizing our "diamond"
formation and about to attack with our "horn." We ask
you to post this mobilization alert everywhere you can
and send it to all the gold-mining companies that come
to mind. We are mad as hell and are not going to take
it anymore.

"Shaka" ... "Zulu" -- so be it!

Bill Murphy
www.lemetropolecafe.com

The GATA web site is under construction. For
information on how GATA came into being, go to the Kiki
Table at http://www.lemetropolecafe.com.





GOLD ANTI-TRUST ACTION COMMITTEE TAKES DONATIONS,
PREPARES LAWSUIT AND "SHAREHOLDER REVOLT"

Contact: Bill Murphy, GATA Chairman
603-433-9389



RYE, NEW HAMPSHIRE, U.S.A., Monday, Feb. 8, 1998 --
The Gold Anti-Trust Action Committee has formally
incorporated itself in Delaware and has begun
negotiating with law firms interested in undertaking
its lawsuit against the Wall Street investment houses
it accuses of illegal collusion to control the price
and supply of gold, other commodities, and certain
related financial securities.

To finance its lawsuit, the committee also has begun to
accept contributions from gold-mining companies, their
shareholders, and people who want to defend gold's
traditional monetary function.

The announcements were made here today by GATA
Committee Chairman Bill Murphy.

Murphy, a financial commentator based in Rye who
operates an international financial web site,
www.lemetropolecafe.com, said response to the
committee's formation has been "overwhelming."

"The committee is only 2 weeks old," Murphy said, "but
we already have received substantial pledges from
mining companies and individuals alike and are certain
to retain a law firm. So we are notifying people who
have made pledges that we are prepared to accept their
contributions now."

Murphy said contributions should be mailed to Gold
Anti-Trust Action Committee Inc., in care of John D.
Meyer, Treasurer, Box 885, Great Barrington, Mass.
01230.

"We believe that our cause is a noble one -- the
creation of a free and transparent market in gold --
and that all who assist it will be rewarded in some way
if price fixing is defeated," Murphy continued. "If
they work in the gold-mining industry or own gold
shares or physical metal, they may be rewarded
tangibly. And even if they have no special connection
to gold, they will be rewarded by the restoration of
the crucial restraint gold always has applied against
irresponsible currency policies throughout the world.

"We believe that transparency in the gold market can be
increased by publicizing the dangerous growth in
speculative short positions taken by the Wall Street
investment houses with borrowed or 'leased' gold. We
believe that this speculative short position now
exceeds 3,000 tons, about 500 tons more than the yearly
gold mine production of 2,529 tons. We believe that the
investment houses are colluding to suppress the price
of gold because their speculative short postions cannot
be closed without causing a gold-buying panic.

"We are also going to call the gold-mining industry to
task and urge a 'shareholder revolt' against the senior
companies that are excessively hedged and themselves
helping to suppress the price of gold. Some of these
mining companies have unrealized profits of hundreds of
millions of dollars in positions that could be closed
by buying back their forward gold sales. Those profits
could be distributed to shareholders or used to acquire
more gold resources.

"We will ask investors to own only the shares of gold
producers that have modest hedge positions or no
forward sales at all. We will urge investors to sell
their shares in the producers that are helping to
devastate the gold industry.

"As the collusive shorts are exposed, they will be
forced to cover, the price of gold will rise, and
mining shareholders will be rewarded for buying the
shares of unhedged and less-hedged companies."

Murphy also announced that the GATA committee is
developing an internet site to publicize excessive
hedging by gold producers. "We want gold fund mangers
as well as shareholders to know about excessive
hedging," Murphy said.

"Now that we are negotiating with law firms to bring a
lawsuit against collusion to suppress the price of
gold, no contribution to the GATA committee is too
large or too small," Murphy said. "All contributors
will receive a written acknowledgement and be placed on
the committee's mailing or emailing lists, as they
prefer, and be sent progress reports about the
committee's work.

"As collateral we can offer only our sincerity and the
rightness of our cause. But we believe that this is
still America and that one man with the law is a
majority. If we can continue to mobilize the gold
community, we can change the world."

-END-

All the best,

Bill Murphy
Le Patron

Steve...I like the Shaka Strategy. Mr. Murphy makes a good general. I will be curious to see where the law firm decides to point its artillery after hearing this complicated tale, don't you think?

Beesting...Placer has two components to be considered upon sale -- melt weight and assay. Quite often, a gold buyer will pay the operator an advance based upon his experience with the placer in question. Placer quite often runs within a consistent purity parameter. The amount of advance usually increases with the gold buyer's experience with your placer. Then the gold is sent to the refiner for final melt and assay (if there is enough to make for a lot at the refiner.) At first keep your sale amount just within the buyer's parameters and then increase it with good experience. The operator is paid a final settlement upon final melt and assay from the refiner the papers for which the buyer should be happy to share with you. If not, find another buyer. Good luck in your ventures and keep us informed.

Farfel...On the Clinton adminsitration control of the gold market, do you think that another administration would be different or is this penchant for control exclusive to Clinton/Rubin/Greenspan (your triumvirate)? I agree with you on Clinton & impeachment. In fact I don't have a clue where Sen. Byrd is coming from. The crimes rise to the level of impeachment, in his opinion, but he doesn't want to hurt the country by voting his conscience? Unbelievable. He doesn't have to worry about making the next edition of Profiles in Courage. But is this gold policy one that resides in the presidency or elsewhere? Also, is your current thinking affected by Gary North's assertion that the American people are buying gold as a semi-conscious, de facto return to hard money?

Silver Tongue...Gold is Polaris.

Your balloonist story?

The unvarnished truth!

There seem to be a zillion reasons offered for buying gold, nowadays, although, if it does go up, it won't matter to me why it did anyway. But I think the stock market is at astronomical levels because we are in a sea of liquidity. And, if I am right, the coming cycle will look a lot like this:
1.The very liquidity driving equities higher begins to push up prices in the general economy.
2. Higher prices in the general economy send bond rates climbing.
3. The Fed reverts to its customary role of inflation-fighter by SLOWLY raising short-term interest rates and draining reserves from the banking system.
4.The stock market "deflates", perhaps like a whoopie cushion.

It seems obvious to my tiny brain that we are still looking for the first signs of step 1. A dynamic rise in gold should be a feature of both steps 1 and 2. Any serious cataclysm in the stock market, step 4, ought to occur well AFTER a rise in gold has begun, not before (that is, if it is going to happen at all). N'cest pas?

But, it seems to me that the really GOOD NEWS is that none of the dire economic predictions we often read about are even necessary to achieve MUCH HIGHER GOLD PRICES over the next year or two. Yes, Y2K may be a good catalyst and probably is responsible for its share of physical demand nowadays. But, after next January, Y2K may be about as big a threat as Halley's Comet. And, as for predictions of crisis at the bank, they are scary alright, but they are as old as the banks themselves. I sometimes wonder if most gold bugs have waited to be right for so long that they think it will take an Armageddon before they will ever make a buck again.
No, I submit that the rationale for BUYING GOLD NOW is as painfully simple as it is demonstrably solid. We all know, that precious metals are today priced for disinflation at best, deflation at worst. But, as sure as I am sitting here, the times they are a changin'. Almost every major central bank in the world is growing money at rates not seen in decades. To any casual visitor who may be reading these lines: BUY GOLD NOW, not because the world is coming to an end but because inflation is right around the corner! You won't be sorry.

you wrote:
"If many of us rely on our Gold holdings to trade for necessities of life during the actual crisis caused by Y2K,with little or no
electronic communications,no coin book publications available,etc.how do we as semi isolated segments of the population,reach a fair value for our bullion in everyday trade?"

You SHOULD NOT trade gold for trivial stuff like groceries, etc.,
in the midst of a crisis and/or a breakdown in the division of labor.
Gold is your long-term wealth-preserver (or perhaps -appreciator),
but this takes functioning markets and infrastructure and communications, for reasons that you point out. You should have
PLENTY of groceries and other sundry necessities so that the occasion
to trade away your gold will not come up, at least not for a very long time. You should have also have other forms of money on hand -- FRNs, small-denomination silver, extra sundries for barter, etc. The gold is the long-term hold stuff. See my own contributions on this subject:

http://www.provide.net/~aelewis/gold/realchek.htm

http://www.provide.net/~aelewis/gold/realcomm.htm

http://www.provide.net/~aelewis/gold/y2kstock.htm

http://www.provide.net/~aelewis/gold/crisisv1.htm

http://www.provide.net/~aelewis/gold/crisisv2.htm

Sadus is fed up with the banks (funny... so am I!), and is
switching to E-gold. Perhaps not a bad idea.

HOwever, check this out on why e-gold might NOT be a good alternative:

http://www.thebullandbear.com/resource/RI-archive/pmetals.html

I would appreciate comments from others on this...

I'm with you, buddy.

I agree with your posts and will go a step further.

Given Klinton's dogmatic worship of big govt, his track record of crime and association with criminal figures, and his callous disregard for the lives of others, not to mention his narcissistic arrogance, would there be any constraints on him in his final 2 years if our meek Senate effectively exonerates him ?? Consider the temptation he would surely have to command a major federal power grab, which he could orchestrate by way of executive order, under the guise of an economic crisis (or other national emergency). A Congress that had already been rolled would likely not have the backbone to challenge his authority. Should one sit around and wait for the herd to catch on ??

We here have considered the possibility of gold being confiscated again. But Klinton's background suggests other threats are possible under certain circumstances. Who might be targets ?? Certainly the wealthy (anyone who earns their own way) and probably gun owners and participants of political opposition groups.

Some may consider my suppositions out there (a doctor called me paranoid the other day when I had a problem with my health records being less than private... "I can find out anything on you now ... what problem has it caused you?". But I'm not one to get put in the box car before I ask where we're going. My own opinion is that one needs to consider investing in more than just financial forms of self defense.

For further context, I'll post this recent well written, if not complete, article.

Deception in Clinton's State of the Union Speech

February 3, 1999 by: Phyllis Schlafly

"There's one more right you should have. As more of our medical records are stored electronically, the threats to our privacy increase. . . . We will protect the privacy of medical records this year."

Bill Clinton received big applause for that line in his State of the Union speech. Although it hasn't yet made headlines in the media, his private polls and focus groups have alerted him that this is a hot and growing issue at the grassroots.

Assuring Americans that he is going to be our savior about medical privacy is just one of the many false promises Clinton made in that speech. The record is clear that he doesn't believe in the privacy of medical records (except, of course, for his own).

A major feature of Bill and Hillary Clinton's nationalized health plan, which the public rejected in 1994, was to allow the Federal Government to build a database containing every American's medical records. We all remember Clinton's 1993 television speech when he displayed his "Health Security Card" that was to contain our personal identifying number and assure our access to health care.

Control of that massive government database, with every American's medical records identified by a number, would have enabled the Clinton Administration to achieve its proclaimed goal of "global budgeting," i.e., government control of both public and private health care spending by allowing or rationing payments. The American people rejected Clinton's takeover of health care, but he has been
incrementally working toward the same goal ever since.

The 1996 Kennedy-Kassebaum law gave the Department of Health
and Human Services the power to create "unique health care
identifiers" so government can electronically track and monitor every citizen's personal medical records. Fortunately, Congress last year put this authority on hold, pending further Congressional action.

We should never forget (even if Ken Starr forgot) that the Clinton White House demanded and illegally got nearly a thousand FBI files on individuals. That cache of personal information could be the source of some of the damaging private information about Republicans that has been leaked to the press.

It's so phony for the Clintonites to complain about the "poisonous politics" of spying on public officials' misbehavior when this Administration has a comprehensive plan to spy on private citizens' money and whereabouts. The Administration is already far down the road of putting us all on databases in order to monitor not only our
medical records, but also our bank accounts and daily activities.

The Federal Deposit Insurance Corporation's new "Know Your
Customer" regulation has stirred up a hornet's nest of adverse public comments. And no wonder; it requires your bank to notify a government database in Detroit called the Suspicious Activity Reporting System about any inconsistent" deposits in or withdrawals from your personal bank account.

The Federal Communications Commission's regulation to monitor the location of all wireless phones will enable the government to know where you are when you make every call. New federal regulations of state driver's licenses are designed to turn them into de facto national I.D. cards so the government can track everyone's movements about the country.

The welfare reform act allows the Clinton Administration to put all workers on a federal database called the Directory of New Hires, which will ultimately allow a comprehensive monitoring of nearly all employed Americans. The government is using the "instant background check" required by the 1993 Brady Act to set up a database of lawful gun buyers.

Putting all this personal information on a government database means giving government the power to control our very life, our health care, our access to a job, and our financial transactions. It's the power to destroy individuals who get in Clinton's way; look at all the
people who crossed Clinton and are now dead, in jail, in debt, a fugitive, or discredited.

Clinton is using terrorists, drug kingpins, criminals, illegal aliens, welfare cheats, and deadbeat dads as phony excuses to impose progressive government surveillance over our private lives. His plan is to monitor law-abiding citizens rather than punish law-violators.

In addition, the Clinton Administration has been demanding a power that no free society has ever given its rulers: the power to read our mail. Vice President Al Gore, Attorney General Janet Reno, and FBI Director Louis Freeh are all aggressive advocates of the effort to enable the government to get access to our e-mail and computer files without our knowledge or consent.

Their cover phrase for this totalitarian plan is "key recovery." Fortunately, their plan did not pass in the last Congress and, if we value our freedom, it should remain permanently buried.

Contrary to Clinton's boast in his State of the Union speech, he will not protect our medical records or any other private information; he is steadily gathering power into his own hands to bring about the end of privacy as we know it.

Phyllis Schlafly column 2-03-99

I to am interested in a troy weight scales, electronic solar powered would be my preference. A place to start looking; www.balances.com I bid on one at E-Bay but someone out bid me.
Good hunting el

I took some time to extract and pass along some key elements from his 29 page document. Before I begin I might add that April gold future is now at $290.80.

Here is some extracts:

Here are the key element from the Tenorio Research Letter. The
conclusions that he derives from following the Kondratieff Cycle
combined with Elliott Wave Theory in the stricter sense led Tenorio to
conclude the following:

Gold and the CRB are likely at the end of a six-year down cycle and the
longer Kondratieff cycle. My take from his thought are that even though
there is a chance that we have not seen the low for commodities there is
a greater chance that we have. As such we will never be lower again as
historically as he pointed out that commodities do tend to rise over
longer periods of time. He says that the 184 CRB is a critical number to
watch. There is a possibility that commodities could fall another six
years.

He says, "...That 1977 fourth wave terminus at 184.90 is one key
element. The other is a seasonal factor. There is a tendency for many
commodities to bottom late in the year and to rally into late January or
early February. At that point there is often a drop, known as the
February break, which can take back some or all or more of the rally
from November or December. A break of 184.90 and/or a failure to rally
strongly into February would call into question the viability of the six
year event cycle this time around. The cycle is due, and the gold,
dollar, and interest rate positions are compatible with the cycle
bottoming now. But will it? If the CRB Index doesn't bottom quite soon,
it shows that the deflationary pressure is so strong as to overcome the
extremely reliable 6 year event cycle, and that prices will likely
remain under that pressure for another six years...."

He says that lower short term interest rates and strong dollar are the
cause of the stock market bull and the low commodity prices and that to
see commodity prices to rise the short term interest rate must rise and
the dollar must grow weaker. But regarding the stock market boom he says
that stocks lost 91% of their value up to 1981 and that the market still
has a way to go to recover that large loss before the next bust. Here
are his words, "...If one looks back to the corn chart, which I am using
as a proxy for commodity prices generally, and to the interest rate
chart, you see that 1949 to 1966 was a boon time for stocks: low
inflation and low interest rates. Stocks responded with a great bull
market. But even though commodity prices remained relatively quiescent,
interest rates had begun to impact the corporate future. Corporate A
rates had bottomed under 3% in 1946 and almost exactly at 3% in 1949,
but by 1966 they were hitting 5.5%, a rate which had turned back a
nascent recovery in 1937 and in 1916. Stocks then entered a dreadful
period of loss which ran to nearly 90% in inflation-adjusted terms and
which lasted until the after interest spike in late 1981. All the while,
from 1966 to 1980-81, commodity and wholesale prices as well as labor
rates and interest rates climbed dramatically. Thus the tie-in of stock
prices to the Kondratieff wave is that stocks do well as soon as the
interest rate spike is done, which itself is during the commodity crash
phase, and they continue to do well until mild inflation passes over
into worse inflation. (This point of crossover will vary from one
Kondratieff cycle to another.) Those perennial bears are still looking
for a crash missed the fact that the "crash" was from 1966-1982! The Dow
Jones Industrial Average went up more than 2400% from the end of the
rate spike in 1932 to the inflation crossover in 1966. From the end of
the rate spike in 1981-82, the Dow has "only" gone up 1200%, so there is
quite a bit of room to advance before the next crash begins...."

He further goes on to give a theory of why the market may continue to
suprise for a while even though he admits that the market will likely
have a rentrencment before it becomes a screaming buy again. He says
this, "...This has led me to formulate Tuchman's Law, as follows: the
fact of being reported multiplies the apparent extent of any deplorable
development by five- to ten-fold�" What I believe he is referring to is
that bears think the market is going to crash because it always has
before when it becomes so overvalued but his logic is that since it lost
so much 18 years ago, it has a lot more to go but not before some
correction. Then he gives an example using Patton too.

"...The second is from George C. Scott's "Patton" as Patton ponders what
the retreating and seemingly demoralized German Army is likely to do in
the winter of 1945. "It's clear they won't or can't mount a counter
attack. It's the dead of winter, and no German has mounted a winter
attack since Frederick the Great. Therefore I believe that's exactly
what they will do." They did. The first is why successful traders and
investors ignore the news or read it with a jaundiced eye. The second is
why those same successful people expect and prepare for the
unexpected...."

Tenorio further expounds further supports his position that the market
has a way to go by the following, "...So Where Are We? If you're still
with me, you know that we are late in the Kondratieff down cycle from
1974, at one of the six year subcycle lows, in fact the next to last one
before the orthodox low in 2003-2004. In terms of the analysis so far,
it is easier at this time to predict the intermediate term stock market
direction over the next few years than that for physical assets and
interest rates. While it is possible that interest rates and commodity
prices may not make their final lows at this point, we know that stock
prices cannot make their final highs in this phase of the cycle. This is
not to say that bear markets such as we have seen in 1998 cannot occur
due to overvaluation, but those still looking for a giant crash will
continue to be disappointed as they have since the 1980's. Where can we
look for some help in deciding whether commodities and gold and long
rates have bottomed? Some positives are that gold actually closed 1998
higher (by $1.70!) than 1997, the US dollar is lower, and we are getting
farther away from the short term interest rate bottom of 1992. The major
negative is that the CRB Index is still in a down trend. Let's look at
each. Given the big story of deflation in 1988 which was highlighted in
last year's Year End Review, many who do not follow gold closely will be
surprised to see the flat range of gold this past year. And given the
tendency of gold to bottom before commodity and crude goods prices at
important bottoms, gold's action is supportive of the six year "event
cycle" being in place...."

His thoughts appear to support the GATA group who believe that the
Central Banks have colluded with major commodity brokers to manipulate
the gold market in order to make gold look week. Here are his thoughts
on this.

"...Central banks have been the primary lessor to this market. This
enabled them to earn a return for their governments and also assisted
their desire to see gold remain low or go lower. Then too, many central
banks who have traditionally held a large percentage of their reserves
in gold have diversified by outright sales of gold, moving into larger
allocations in foreign currency short and long term bills, notes, and
bonds. This also increased rates of return. Of course some of the buyers
of this loaned and sold gold were other central banks. Hedge funds and
others, knowing of this on-going tendency, piled on and did the same as
it was also cheaper for them to borrow gold to raise funds for other
purposes. This "gold carry" along with the "yen carry" trade has been a
major factor in gold's bear market and in the bull markets in US
financial assets. Borrowing a falling asset at reduced interest rates to
buy appreciating financial assets became an article of faith...."

Here are his final thoughts. In all his analysis as it is from "the big
picture" longer Kondratieff wave theory are compelling and well thought
through and seem to touch upon in depth those issue we have discussed
daily on this board. He says,

"...But leaving aside news, politics, millennial madness, and valuation
models, the Kondratieff wave informs us that with no credit crunch
interest rate spike in sight and with disinflation firmly ensconced�even
if commodities make a rebound�the path of least resistance for the
intermediate term is upwards. At some point rising rates and rising
inflation will make a crucial difference, but not anytime soon...."

"...My own view is that the market will accomplish the same things which
Grauer thinks the Fed should wish for, or at least will force the Fed to
act. Lower short rates and higher long rates will induce lenders to do
what they do best, namely to lend. But in reality both short and long
rates will be going up anyway, slowly at first, for many years. As this
happens the yield curve will indeed steepen as long term bond holders
demand a premium for staying aboard. It's all in the long wave...."

"...For gold and the CRB Index and many commodities both a seasonal low
and a sixyear event sub cycle of the Kondratieff wave are due now.
184.70 is a key price point for the CRB Index. Stocks and indexes will
remain volatile at or near new highs near term. A drop to under 1200 or
possibly even 1100 (doubtful) in the S&P 500 Index may take the form of
a straightforward five waste move or a five wave contracting triangle.
This will be a major buy point and should complete sometime before
summer. Bonds will likely fall (long rates rise). This will be
insufficient to cause problems for the economy, and in fact will
represent confirmation of the Kondratieff wave event sub cycle bottom,
especially if accompanied by continued Fed easing...."

... from today's Houston Chronicle. On the back page of the business section is an article on a guy who calls himself the Meteorite Man. He travels the world to buy meteorites.

The article quotes Bob Haag as saying, "I've traded meteorites for gold, cars, guns, smiles, you name it." Further along comes this :

"This month he'll go prospecting somewhere in Africa -- he won't reveal the location because he doesn't want the competition -- where he thinks there are some rocks that may have gone unnoticed. He'll go back to Africa with pleny of hidden cash -- the people he deals with accept no traveler's checks, credit cards or even OLDER $100 BILLS." [emphasis added]

Innersting, as Ross Perot would say.

MARKET UPDATE (2/8/99): Gold was up marginally to start the week with the dollar strengthening overseas. The overall tone in financial markets this morning is subdued. An interesting development in the gold market that may go along with central bank reluctance to sell gold, and questions hanging over the gold trade with respect to the volume of gold leasing, is reflected in the following quote picked up from today's Reuters London report: "So far this year London seems to be going home very square on Friday afternoons." It
follows that Monday mornings will start slow as traders, particularly London traders, look to COMEX for direction. So far today, the indication is "up" but on the margin.

Some interesting news surfaced over the weekend on hedge fund activity. Most prominently, Reuters reports that this past week Nobel price winner, Myron Scholes retired from Long Term Credit Management, the hedge that went bust this past summer and almost took Wall Street with it. Also, one or two firms involved in the Fed engineered $3.6 billion bailout want out now. Several others want out as soon as possible which probably will not be until autumn, 1999. Scholes was a partner in the firm. Several other partners want out according to sources close to the firm. My interpretation reading between the lines in the Reuters' article is that Merrill Lynch and Goldman Sachs are scrambling to keep the fund and the bailout from collapsing.

Another hedge fund, Convergence Asset Management, has suffered major losses and could be going under, according to a Financial Times report. Investors (un-named) want their
money back. Convergence's net asset value has shrunk from $440 million to $150 million.It's leverage is ten times capital. It's manager, Andrew Fisher formerly of Salomon
Brothers, is seeking capital and is said to be seeking capital for an un-named "strategic investor."

A number of hedge funds have gone to the ropes in recent weeks having been battered by disagreeable, headstrong markets. With the obvious reluctance of international bankers to put good money after bad in these gambling institutions we call "hedge funds", the question arises what will happen if LTCM actually does go over the cliff (this time without a bungee chord), or what if several of these wastrel "funds" are in need of a bailout. After a few $300 million losses, it soon starts to look like real money even against the sea of cash pouring into Wall Street from the beguiled public. Then what? As I say, it looks like they go over the cliff sans bungee/sans safety net. Welcome to the real world, boys. (Unless of course the benevolent Fed moves in with plenty of printing press money.) As it turns out, I would also like to be among the first to question the 1984ish representation of these refugees from Las Vegas as "hedge funds." This labeling is an attempt to legitimize little more than a numbers operation as a prudent financial firm. What are they hedging? And why are all the players
galloping out of town breakneck toward that hideout in the hills?

That's it for today, fellow goldmeisters. We'll update if this initially slow day gains some momentum.

... thanks for passing that link along on the Tenoria research. I hope to give it more than a cursory review when I get more time. Cycle analysis helps to get one's arms around the big picture. It's too bad these cycle 'experts' can't agree where in the cycles that we are ... it would make it easier for me to get in to Stranger's income group.

A book I recently polished off that deals with cycle analysis is The Fourth Turning. They conclude that we're approaching a Great Devaluation and serious turmoil (2005 give or take a few years). They arrive at their conclusion not by analysis of economic cycles but generational cycles. Very interesting premise. The problem I had with the book is that it's a 50 page book written in 300 pages.

Some friends who had previously been concerned about Y2k have of late become less concerned. They cite the growing aware-ness concerning the problem and the steadily increasing percentage of remediated systems of our Federal government as evidence that the fallout from Y2k will be minimal.

As for awareness, it is true that people are now more aware,
but awareness does not imply action. It is sad that in our
media-driven society we forget this all too easily. We tend to believe that once an issue reaches the media saturation
point it can no longer have any impact upon us. We believe
that it will just fade away into the history books prior to
it even coming to pass.

As for the percentage of remediated systems in the Federal
government, I am appalled that many believe them. I work in
an IT department. I know how those numbers are generated.
If our President can question the meaning of the words "is"
and "alone" then we should not find it hard to believe that
IT managers around the country can play loose and fast with
the meaning of the words "remediated" and "tested".

But to my point. The article below must be read and reflected upon. We live in a tightly "integrated" world. Our way of life is dependent upon global transportation, communication, manufacturing and financial systems. These many systems interconnect the people, governments and businesses of our globe like the many systems of our body connect our organs and limbs.

That incredible degree of "integration" will soon undergo a
radical "dis-integration" process. This dis-integration will effect every human on this planet. Many of the people of this nation might not personally go without electricity or fresh water, but many, many other people of the world will.

This issue will effect us mightily.

Rod.


---------------------------------------


Testimony of Lawrence K. Gershwin, National Intelligence Officer for Science and Technology, National Intelligence Council Government Management, Information and Technology Subcommittee of the House Government Reform and Oversight Committee

January 20, 1999

Good morning, Mr. Chairman. I am pleased to be able to
discuss with you today the understanding that the Intelligence Community has about foreign efforts to deal with the Y2K problem. I will give you our current assessment of where we see problems as most likely to occur, but we are not yet in a position to make a confident assessment of the global impacts of the likely Y2K failures, or the implications for US interests. The Y2K situation is very fluid, and our assessments could change significantly over the next several months as more information becomes available, as countries become more aware of and deal with Y2K issues, and as incidents of Y2K failure increase. I will highlight for you today those problem areas that I think have a significant chance of affecting US interests.

Fixing the Y2K problem is labor and time intensive, and
challenging with respect to project management. Current Gartner Group estimates of global expenditures to fix the problem are on the order of one to two trillion dollars, which is about 3-5 percent on average of every country's annual gross domestic product. A wide range of modern information technology is potentially affected including operating systems or applications software that use dates or date-related transactions, and embedded microprocessors in such applications as energy, transportation, telecommunications, and manufacturing systems.

All countries will be affected--to one degree or another--by
Y2K-related failures. Problems in one country or sector can
have widespread consequences because of interdependence
between sectors worldwide. The consequences of Y2K failures
abroad will range from the relatively benign, such as a localized inability to process credit card purchases, to problems within systems across sectors that will have humanitarian implications such as power loss in mid-winter. We have few indications that countries are undertaking contingency planning for recovery from Y2K failures.

Foreign countries trail the United States in addressing Y2K
problems by at least several months, and in many cases much
longer. Y2K remediation is underfunded in most countries:

- Time and resource constraints will limit the ability of most countries to respond adequately by 2000.

- Governments in many countries have begun to plan seriously for Y2K remediation only within the last year, some only in the last few months, and some continue to significantly underestimate the cost and time requirements
for remediation and, importantly, testing. Because many
countries are way behind, testing of fixes will come late,
and unanticipated problems typically arise in this phase.

- The largest institutions, particularly those in the financial sectors, are the most advanced in Y2K remediation.
Small and medium-size entities trail in every sector worldwide.

- Most countries have failed to address aggressively the
issue of embedded processors. While recent understanding
is that failures here will be less than previously
estimated, it is nevertheless the case that failure to
address this issue will still cause some highly dependent
sectors with complex sensor and processing systems to
have problems, centered right on the January 1 date.

- The lowest level of Y2K preparedness is evident in
Eastern Europe, Russia, Latin America, the Middle East, Africa, and several Asian countries, including China.

Global linkages in telecommunications, financial systems, air transportation, the manufacturing supply chain, oil supplies, and trade mean that Y2K problems will not be isolated to individual countries, and no country will be immune from failures in these sectors.

The coincidence of widespread Y2K-related failures in the
winter of 1999-2000 in Russia and Ukraine, with continuing
economic problems, food shortages, and already difficult
conditions for the population could have major humanitarian
consequences for these countries. While the Russian government initiated centralized guidance to ministries and agencies in May of 1998, the State Committee responsible for initiating overall guidance has stated that there is not enough time or money to resolve the Y2K problem. We think they're right. Russian estimates of the cost of remediation of their government systems seem considerably less than Western estimates for comparable systems in other countries. Thus far both Russia and the Ukraine have exhibited a low level of Y2K awareness and remediation activity. While Russia possesses a talented pool of programmers, they seem to lack the time, organization, and funding to adequately confront the Y2K problem. Concerns include problems with computer-controlled systems and subsystems within power distribution systems and nuclear power generating stations leading to reactor shutdowns, or improper power distribution resulting in loss of heat for indeterminate periods in the dead of winter in Russia. Indications point towards a slow, reactive mode of operations on the part of the Russian Atomic Energy Ministry.

Although Western Europe is in relatively better shape than some of the regions I have cited earlier, European awareness of and concern about the Y2K problem is uneven, and they do lag the United States in fixing their problems. European attention was focused on modifying computer systems for the European Monetary Union conversion, which was implemented
successfully on 1 January, but this was done by, in many cases, postponing coming to grips with Y2K problems. For example, the Netherlands has expressed concern that the EU members are not working together to solve Y2K problems, and has threatened to cut off its power grid from the rest of Europe in order to protect domestic power distribution from external problems.

The Asian economic crisis has hampered the Y2K remediation
efforts of all of the Asia-Pacific countries except Australia. While the lines of authority for China's Y2K effort have been established, its late start in addressing Y2K issues suggests Beijing will fail to solve many of its Y2K problems in the limited time remaining, and will probably experience failures in key sectors such as telecommunications, electric power, and banking.

We are focusing increasingly in our study of foreign Y2K
problems on those critical sectors that directly affect US
interests. These include, among others, foreign military systems, trade, and oil production and distribution, all of which I will elaborate on.

Military systems and their command and control are particularly information-technology dependent, and thus potentially vulnerable to disruption if Y2K problems are not adequately addressed. We have been especially attentive to the issue of foreign strategic missile systems, in particular those in Russia and China, to experience Y2K-related problems. US and Russian officials have been discussing these issues for some time now, and we do not see a problem in terms of Russian or Chinese missiles automatically being launched, or nuclear weapons going
off, because of computer problems arising from Y2K failures.

The problem we are more focused on is whether the Russians
will manage to locate and fix problems in their early warning systems that they use to monitor foreign missile launches, and how their leadership is preparing to deal either with the prospect of incorrect information being provided by such systems, or with system outages. The level of concern in Russia is growing as awareness of the nature of the Y2K problem grows.

Regarding world trade and oil: some of our most important
trading partners have been documented by, among others, the
Gartner Group, as behind the US in fixing their Y2K problems
(China and Japan, for example). Significant oil exporters to the United States and the global market include a number of
countries�Venezuela, Saudi Arabia, Mexico, Nigeria, Angola,
and Gabon�that are lagging in their Y2K remediation efforts.
Oil production is largely in the hands of multi-national
corporations in the oil-producing countries, but this sector is highly intensive in the use of information technology and complex systems using embedded processors, and is highly dependent on ports, ocean shipping, and domestic infrastructures.

The industry is fraught with potential Y2K problems. Embedded microprocessors are found throughout in the oil industry in drilling, pumping, transportation, processing, and refining operations. A typical offshore platform or onshore gas plant reportedly uses 50-100 embedded systems, each containing up to 10,000 individual microchips. While the industry has been actively involved in remediation, planning for remediation of a single offshore platform can reportedly involve up to 60 different vendors. We are concerned about the shipping of oil products, because ocean shipping and foreign ports have both been flagged as among the least prepared sectors.

One additional issue I want to raise is that many foreign
officials and companies who are aware of Y2K problems are looking to the West, and particularly the United States, for help, and to Western suppliers for technical solutions. In some cases, foreign companies or governments may blame the United States and other foreign vendors for problems in equipment and thus seek legal redress for their failures. Worldwide litigation issues are quickly becoming a part of the Y2K scene.

In closing, let me note that today we can list all the issues that concern us worldwide, in terms of the impact of Y2K failures on infrastructures, economies, countries and regions, national security, trade, and so on. But today we cannot yet provide good answers or predictions that would be meaningful on the consequences. We have cast a wide net for information on Y2K developments and are working very closely, through the President's Council on Year 2000 Conversion, with the rest of the federal government. As the time for greater likelihood of failures comes nearer, awareness of, and reporting on Y2K problems abroad should increase dramatically, and we thus expect to have a better handle on the type and extent of failures we are likely to see around the world.

But the incredible complexity of global interconnectivity and interdependence, and the effects when some parts of the
information technology baseline start to fail, is a daunting
challenge to interpret and analyze.

There will be many analysts, in public and private sectors, here and abroad, trying to make reasonable judgments about the consequences and implications. The problem is formidable, but we will do our best to support the US government in assessing these consequences.

Examine these thoughts as conveyed within a larger Bloomberg report from Brussels today...
------------------------------------
"European Union finance ministers have warned Italy it may need to make more cuts in
government spending to keep its budget deficit under control ..."

"...concerns the country will slip back into a pattern of
deficit spending that could undermine the euro."

"... the EU welcomed Italy's commitment to take 'corrective measures�."

"The countries using the new European currency are required
to keep annual borrowing below 3 percent of GDP or face fines."
----------------------------------------------
This points up the fundamental difference between the euro and the dollar. As silly as it may sound in America, in Europe they actually harbor a concerned notion about "deficit spending that could undermine the [currency]". Excessive deficit spending will not be tolerated among member state, under penalty of fines. These fines, I might add, are typically to be paid in a gold equivalent, with such loans to be 'collateralized' under similar terms.

See the difference? In America, paper (Treasuries) begets new money (dollars); whereas in Europe, gold begets new money (euros).

Which system do you feel is the more stable toward maintaining long-term currency integrity?

got gold?

Rather than take off the gloves now, after urging voluntary restraint on the impeachment theme, I am going to leave Farfel's Clinton post unremarked for now. After all, Farfel and I have found ourselves on opposite sides often enough. However, along the lines of USAGold's query "would another administration be more likely to handle the current gold market situation any differently?" I ask only one rhetorical question: "Is this the first president to lie to the American people?" In other words: When Ronald Reagan told a grand jury on video-taped testimony concerning Iran-Contra that he "couldn't remember", (was it dozens, or hundreds of times?), was he telling the truth? Was George Bush truthful when he, as a sitting vice-president and former head of the CIA, told the American people that he had been "out of the loop" during the whole Iran Contra affair? That, even after sitting through George Schultz's warnings during cabinet meetings while the "Arms for Hostages" deals were being engineered by Oliver North, and even though the United States Congress had expressly passed the Boland Ammendment (which had been vetoed by Reagan and subsequently overridden by Congress to make it part of the law of the land) which made it illegal for the United States to offer aid to the Contras in Central America, that he "never knew anything about it"?

Without directly addressing the substance of Farfel's denunciation of Clinton, may I ask him (and other pollitically correct Clinton-detractors) if they have read accounts of how those "freedom-fighting" Contras carried out their war with the help of the CIA, "Out-of-the-loop" Bush and "I-can't-remember" Reagan? Have they read how the inhabitants of whole villages were lined up in the streets, including women and children, and shot down with machine guns? With the same guns provided to them by the CIA? Have they read the account of the mother who, finding herself hiding on the outskirts of town when the Contras came, listened to her own gunned-down children crying for their mother before they were shot again by those "freedom-fighters" who were killing off survivors?

If they have read these accounts, how can they now come whining about a "deceitful president" who lied to them about sex? Or making an issue about how 30% of the American people would be reluctant to follow a president who would lie about sex? Did those 30% have any problem following leaders who broke United States law (the Boland Ammendment; by offering military aid to the Contras) thereby making possible massacres in Central America which are correctly understood by many to be crimes against humanity?

Well, on second thought, maybe it's not so hard to understand, after all. Wasn't it just last week that we had a leading member of the US Senate introduce a resolution to dismiss the charges against the President? Over the weekend, wasn't it this same snivilling, intellectually weak-minded national leader (Senator Byrd-brain) who now says he finds it difficult to vote against impeachment, after all? Last week he thought the case abainst the President was without merit. This week he thinks he should be thrown out of office. Which 30% does he belong to, anyway?

$290.40 in overseas trading.

eom

test

A new administration would likely change the Au market. I've heard Forbes say that gold should be at $325. I've heard Kemp say Gold at $350. You gotta believe somewhat that Republicans favour a higher POG. I'm sure they can manipulate it there quite easily.

The following memo was received at a Fortune 500 company:
�����
To: VP, Corporate Administration
�

I hope I haven't misunderstood your instructions, because this Y to K problem makes no sense to me.
�����
Be that as it may, I have completed the conversion of the corporate calendar for the year 2000, per my understanding of the instructions.
�����
The months now read as follows:
�����
Januark
Februark
March
April
Mak
June
Julk
(The rest of the months appear to be okay)
�����
�����
Please let me know if there is anything else that needs to be done in preparation for the year 2000.

Russia's Uneximbank Defaults on Eurobond Obligations

Moscow-Feb. 8-FWN/UPI--Russia's Uneximbank announced
today it has defaulted on its huge eurobond obligations,
admitting it is unable to meet interest payments because of
Russia's financial crisis. The bank has informed creditors its eurobonds, worth $250 million in debt, must be restructured.

USAGOLD COMMENT: Don't forget it was Russian defaults that precipitated the LTCM debacle.

Thanks for restoring my faith in Bill Clinton. I knew there was a reason why his felonies, which I saw with my own eyes, constituted acceptable presidential behavior. I just couldn't think of what it was. By the way, I find your efforts to sully his predecessors most refreshing. How about a little more substantiation?

Steve, It appears that SPOT the dog has had an accident "downunder" ! May have been hit by a boomerang, as is down more than US$1.50 APR Au looking like it is following !
Another buying opportunity !
<;-)

Mon., Feb. 08, 1999 at: NY 6:14 a.m. Lon 11:14 a.m. Pra 12:14 p.m. Mos 2:14 p.m.
Economist Sachs Tells Russia: Don't Pay Debts
MOSCOW, Feb. 08, 1999 -- (Reuters) Creditors should give Russia two years to build a democracy by not demanding repayment of debt and Russia should not pay, Harvard professor and former economic adviser to the government Jeffrey Sachs was quoted as saying on Friday. "I would counsel foreign circles to delay Russian debt payments by a couple of years, to not debilitate the country. Give Russians the possibility to carry out truly democratic elections," he told Segodnya newspaper in an interview.
"To the Russians I say: Do not pay the debts." Russia's foreign debt is some $145 billion, of which $17.5 billion is due this year. It wants to ease its debt burden by rescheduling and has budgeted to repay only $9.5 billion in 1999. Sachs, a critic of the International Monetary Fund (IMF), said Fund help to Russia in the early 1990s came too late, undermining reforms by acting prime minister Yegor Gaidar, whom Sachs had advised. Sachs said the Russian government subsequently become fouled by corruption and reforms were carried out ineptly. He also said that last year the Fund had mistakenly advised Russia not to devalue the ruble. He said President Boris Yeltsin was too weak physically and politically to carry out reforms and lacked a mandate to do so. False reformers needed to be thrown out, he said. "When Russia gains political legitimacy, help them reform the country," he advised the foreign community. "Just don't send the IMF there." Russia has parliamentary elections scheduled for December and a presidential vote in June 2000.
<;-)

It was interesting this evening as I was preparing a tax return that all of the lights in the northeast heights of Albuquerque suddenly went off. About that time my daughter called to pick her up from work because her car had died and she couldn't get it started. It was an earie feeling to drive in a major city with all of the traffic lights off. The citizens were remarkable civil given the chaos which could have resulted. We were able to make it home without dented fenders or worse. This made me think that this may be a shadow of things to come in less than 11 months. I don't know if the power will shut down or other utilites because of Y2K but I was a little unnerved about being without power for about an hour. What if it were out for several days? Now that would try a mans soul. Its interesting that all Clinton's defenders can do in his defense is to point fingers are everyone else who might have had a problem with telling the truth. I'll add that a person can never elevate himself by bringing another down. That seems ot be the tack of Clinton's friends and associates. I feel a profound sense of sadness that the Senate is going to let him get away with felonies blaming it on the Republicans and not on Clinton's lack of core values and amoral behavior. This is indeed a sad day. Nearly as sad as gold dropping nearly $2.00 this evening. Just when it looked like it might do something to make us smile.

Not to worry anyone, BUT something is gotten my Crystal Ball all "fogged-up". A MAJOR disturbance is forthcoming within the next few days ! Should be good for the "precious" is all I can see. BUY Au now.
<;-)

So, let's wake up. Gandalf, you've been hangin around with Gollum too much (a consipiracy behind every island rock).

MARKET UPDATE (2/9/99): Gold trudged downward this morning its upward move thwarted by producer and fund selling according to this morning's Reuter's report. Though remarks by leftist German Finance Minister Oskar Lafontaine that the country would end opposition to selling a small portion of IMF gold added to the down move, traders were also looking toward recent German elections that showed the Schroeder center-left coalition was beginning to fall into disfavor with the German people. There could very well be some
backtracking on this idea in Germany in the coming weeks. As it is, Europe's central bankers by and large are opposed to IMF gold sales. It is the political sector, particularly the Shroeder government in Germany and the Clinton government in the United States that keeps raising the spectre of sales -- all in all, apparently much ado about nothing.

Just for fun we will depart from our usual format to take a look at something I find fascinating. The first clip is from FWN last night and the second from Reuters this morning:

New York-Feb. 8-FWN--The precious metals complex ended the session slightly mixed here today, with gold getting a modest lift from concern about potential short covering and decreased worries about central bank sales, sources said.

LONDON, Feb 9 (Reuters) Yen weakness, coupled with German and Swiss remarks reiterating the likelihood of future official sector gold sales, helped knock gold towards $287.00 during Asian business hours.

So which is the truth and which imagination?

That's it for today, fellow goldmeisters. We'll update if this initially slow day gains some momentum.

Recently, I was apprised that the US Mint would begin an allocation procedure to various gold coin wholesalers across the nation. For gold coins that are falling into shortage, apparently, the US Mint plans to "ration" their distribution rather than ramp up the production capacity of the Mint.

In effect, what this means is that the US Mint is placing a ceiling upon total gold consumption for the purposes of Eagle manufacture this year.

What is the effect of such a ceiling?

It means that, no matter how great the American public's aggregate demand for gold coinage this year, the MINT will ignore any increased demand and NOT exceed its ceiling of gold consumption for purposes of manufacturing Eagles. It means that the Wall Street cartel of gold shorting institutions and hedge funds are, in effect, being protected by the government since it will not move into the market and buy extra amounts of gold, thereby driving up the price of gold and forcing gold shorts to cover their positions.

As such, the failure of the US Mint to respond to greater than anticipated domestic consumer demand for gold coins is nothing short of criminal and the most solid evidence of the Clinton government's unyielding anti-gold bias.

What is a smart gold investor to do?

The answer is simple....Americans who wish to protect themselves from any potential fiat currency crisis MUST buy foreign gold coins, particularly those coins minted by countries that do NOT follow the anti-gold biases of the Clinton regime and that march to the tune of their own drummer.

In particular, I would suggest the Chinese Pandas...because I would imagine that any heightened consumer demand for Pandas will be met by the Chinese government. As far as I know, there is NO ceiling established by the Chinese government with respect to Panda production. What that means is that, with any increased Panda demand, the Chinese government MUST move into the open market and buy whatever gold necessary to fulfill the new demand.

Essentially, if the US government refuses to respond to the demands of the gold investing public (preferring instead to satisfy the wishes of the gold short cartel), then it is time for gold investors to look to other governments to fill their demands!

Good to hear again from PH in LA....

PH asks...

"Is this the first president to lie to the American people?"
------------------------
Farfel says...

Obviously not...however, to my recollection this is the first President to lie directly into the cameras about a topic followed by the majority of Americans. Again, what is most scary about that is there may come a day soon where he must face the TV cameras again...where he must gather mass support on a very vital issue of security or whatever....and the only memory for many Americans will be the insincere, finger wagging president, lying about his relationship with an intern. He has LOST all credibility and has become a laughing stock. He should leave.

On the other hand, Iran-Contra was probably followed by 5% of all Americans, by comparison. I know this for a fact since my own Ivy-League educated aquaintances (comprising less than 1% of the entire American population) often seemed totally uninformed or uninterested in the entire issue. It simply bored them. So, neither Reagan nor Bush lost credibility over the issue because, frankly, the issue never was of notable concern to Joe Q. Public. It simply did NOT exist in their minds.

When PH says it is simply a lie about sex, again, it is a sad appeal to the mass cynicism and amorality of this nation. The President must be a paradigm and an exemplar. He cannot be "one of us." This is NOT a politically correct analysis of the matter; rather, today, given the fact that most Americans and major media icons support the pro-Clinton perspective, it is quite obvious that is is politically INcorrect to oppose him.
----------------------

PH says....

Without directly addressing the substance of Farfel's denunciation of Clinton, may I ask him (and other
pollitically correct Clinton-detractors) if they have read accounts of how those "freedom-fighting" Contras
carried out their war with the help of the CIA, "Out-of-the-loop" Bush and "I-can't-remember" Reagan?
Have they read how the inhabitants of whole villages were lined up in the streets, including women and
children, and shot down with machine guns? With the same guns provided to them by the CIA? Have they
read the account of the mother who, finding herself hiding on the outskirts of town when the Contras came,
listened to her own gunned-down children crying for their mother before they were shot again by those
"freedom-fighters" who were killing off survivors?

If they have read these accounts, how can they now come whining about a "deceitful president" who lied to
them about sex?

------------------

Farfel Says...

Under the Clinton Administration, while America has pigged out at the economic trough (speaking metaphorically), the rest of the world has gone to hell in a handbasket. Asia collasping, Russia collapsing, Latin & South America collapsing...all with much the same awful results that PH decries, as people die daily in the streets. Maybe not by bullets but rather via the hegemony of the US Dollar and the Clinton-promoted wave of Dollar imperialism. Yes, all thanks to the Clinton regime whose foreign economic policy has been an unmitigated disaster. All thanks to the Clinton regime, bought for, paid for, and owned by special self-serving Wall Street interests.

PH, it's NOT about sex, it's about respect, and a President that does not respect the American people. It's about economic corruption, and a President that answers solely to domestic interests rather than acting his proper role as LEADER OF THE ENTIRE FREE WORLD, not simply America.

On Friday, my fantasy is that they bring out the handcuffs and take the guy away. He is a disgrace and the most rotten public figure in America (with Rubin and Greenspan tied for second place!).

----------------------------------------

Good to hear again from PH in LA....

PH asks...

"Is this the first president to lie to the American people?"
------------------------
Farfel says...

Obviously not...however, to my recollection this is the first President to lie directly into the cameras about a topic followed by the majority of Americans. Again, what is most scary about that is there may come a day soon where he must face the TV cameras again...where he must gather mass support on a very vital issue of security or whatever....and the only memory for many Americans will be the insincere, finger wagging president, lying about his relationship with an intern. He has LOST all credibility and has become a laughing stock. He should leave.

On the other hand, Iran-Contra was probably followed by 5% of all Americans, by comparison. I know this for a fact since my own Ivy-League educated aquaintances (comprising less than 1% of the entire American population) often seemed totally uninformed or uninterested in the entire issue. It simply bored them. So, neither Reagan nor Bush lost credibility over the issue because, frankly, the issue never was of notable concern to Joe Q. Public. It simply did NOT exist in their minds.

When PH says it is simply a lie about sex, again, it is a sad appeal to the mass cynicism and amorality of this nation. The President must be a paradigm and an exemplar. He cannot be "one of us." This is NOT a politically correct analysis of the matter; rather, today, given the fact that most Americans and major media icons support the pro-Clinton perspective, it is quite obvious that is is politically INcorrect to oppose him.
----------------------

PH says....

Without directly addressing the substance of Farfel's denunciation of Clinton, may I ask him (and other
pollitically correct Clinton-detractors) if they have read accounts of how those "freedom-fighting" Contras
carried out their war with the help of the CIA, "Out-of-the-loop" Bush and "I-can't-remember" Reagan?
Have they read how the inhabitants of whole villages were lined up in the streets, including women and
children, and shot down with machine guns? With the same guns provided to them by the CIA? Have they
read the account of the mother who, finding herself hiding on the outskirts of town when the Contras came,
listened to her own gunned-down children crying for their mother before they were shot again by those
"freedom-fighters" who were killing off survivors?

If they have read these accounts, how can they now come whining about a "deceitful president" who lied to
them about sex?

------------------

Farfel Says...

Under the Clinton Administration, while America has pigged out at the economic trough (speaking metaphorically), the rest of the world has gone to hell in a handbasket. Asia collasping, Russia collapsing, Latin & South America collapsing...all with much the same awful results that PH decries, as people die daily in the streets. Maybe not by bullets but rather via the hegemony of the US Dollar and the Clinton-promoted wave of Dollar imperialism. Yes, all thanks to the Clinton regime whose foreign economic policy has been an unmitigated disaster. All thanks to the Clinton regime, bought for, paid for, and owned by special self-serving Wall Street interests.

PH, it's NOT about sex, it's about respect, and a President that does not respect the American people. It's about economic corruption, and a President that answers solely to domestic interests rather than acting his proper role as LEADER OF THE ENTIRE FREE WORLD, not simply America.

On Friday, my fantasy is that they bring out the handcuffs and take the guy away. He is a disgrace and the most rotten public figure in America (with Rubin and Greenspan tied for second place!).

----------------------------------------

While you were bring up Presidents and there on camera, telling lies to the people, why did you not tell us about JFK lying to the people about Bay of Pigs invasion, or LBJ lying about the torpedo boat attack on a US ship in the Gulf of Tomkin. I will not start on FDR and the events leading to WWII. You forgot Eisenhower, no U2 flights over Russia.
I am only guessing, but it looks like FDR, Ike, JFK, LBJ, Nixon, Reagan all had consulted with there advisors before facing the cameras. Also I am sure none of them were under sworen oath, other the the oath of the office.

WOWERS ! That was a neat DOW close today ! Lots of volume at the end and down 158 to break the 9193 support level with an exclamation of emphatic emphasis !!!!! Am truely sorry that I could not read through the mist in the Crystal Ball last night to give you a exact reading, BUT I have to make some "bread" myself, fore I start telling all the others that lurk about this board. YES, Au did take a hit, BUT watch it rebound while the dipsters get those MARGIN CALLS.
<;-)

It became very busy today as word travelled that the stock market had sold off and gold was down a bit. Y2K continues to be the primary incentive for purchasing gold. Any down tick in gold seems to bring out the buyers.

Keep an eye on the Japanese yen. Financial Times ran an article this morning saying that internal interest rates in Japan could be headed for 5%. The recent low in Japanese rates was .7% and are now at 2.00% after briefly hitting the 2.25% mark. A strong yen could spell major trouble for the yen carry trade and the hedge funds.

Don't discount the yen activity or the actual eurobond default ($250 million) in Russia overnight. It is surprising that this story disappeared from view today. It is the first default by a private Russian bank and surely not the last. I also advise putting the following quote posted by Gandalf the White last night into the permanent memory bank:

"Harvard professor and former economic adviser to the government Jeffrey Sachs was quoted as saying on Friday. 'I would counsel foreign circles to delay Russian debt payments by a couple of years, to not debilitate the country. Give Russians the possibility to carry out truly democratic elections.'"

Also announcing eurobond default ($108 million) today is the Brazilian state Minas Gerais.

You will see more and more debt repudiated in contagion countries with a claim/threat of political instability the instigator. Keep Sachs comment in mind, as you may see U.S. debt put on hold and/or repudiated for the same reasons in future years. I predict the process we are about to enter will be a long and grinding one in which the events of one day will be washed over by even more disturbing news the next. It is not difficult for me to imagine one country or another repudiating its debt and using Y2K as a cover -- a potentiality sometimes overlooked by Y2K analysts. The grinding process has already begun, as Farfel alluded to recently in his post on the Clinton administration. We just haven't, as yet, fully felt the effects in the United States. We will though and the most highly leveraged entities and overblown will be the first to fail. That process has already begun as well.

According to Weiss Research's Year 2000 Alert--News Bulletin, on January 26, 1999, Reuters reported: "The World Bank said only 15 percent of the 139 developing countries surveyed by its experts had taken concrete steps to fix the Y2K problem."

Puh-lease! It may be reasonable to argue that no president should ever lie at all. It is not reasonable to argue that the lies of Eisenhower, Kennedy, etal. are in any way comparable to those committed under oath by a man whose motive was to protect himself from having to pay for his sexual harassment crimes. Misguided or not, every one of the previous lies cited (though some are certainly debatable) were done out of concern for the lives of others. Clinton deliberately lied even when he knew it might DESTROY others.

Michael- When you say that today was a busy day for gold buying I presume you mean in your business specifically. That kind of anecdotal evidence sure is reassuring. Maybe tomorrow will be a better day. I hope so.

I want to make a brief comment on Farfel's important post with respect to the developing gold coin shortage. I must admit that I did not think about the shortage as you analyzed it until I read your post. There is no excuse/explanation for the way the U.S. Mint is handling this problem except in the way that you suggest -- aiding and abetting the gold shorts. The big market-makers are incensed with the way the situation is being handled. Their language when describing Mint operations is shall we say..... "salty". We, in the industry, deal with these problems on a day to day level of simply scrambling to meet demand. We tend to overlook the political/economic prime mover. Thank you for taking the discussion to the next level. Meanwhile the demand for gold builds like a tidle wave no matter what the Mint does. The public will buy the alternatives. In fact, they already are. Gold is gold. In this New World Order, it matters not whose stamp is on the coin you put in your personal storage. It only matters that it remain negotiable.

My compliments on an important observation that benefits all who read it.

Strong physical gold demand is the slave to no paper market. When firms like mine experience strong demand, it is only a matter of time until that bridges over to the paper market, and the benefits filter to all holders of hard, yellow metal. For years the tail has wagged the dog in this thin market. The dog is now trying to regain control as the market gains hard-won breadth. God did not create the dog with the tail in mind; He created the tail with the dog in mind. Tomorrow will be a better day when all things are as they should be.

Thank you for your comment and question, Stranger.

I ask all long time poster and lurkers. Could my friend, Another, have said it better? Where is that guy, anyway? He's missing all the fun. I say for him: "We watch this new gold market together, yes?"

One aspect of Y2K I don't see mentioned is PARTS! For instance I dropped of the tractor the other day for routine service and some odds and ends like headlights not working. So, two days is turning into a long week 'cause they're "waiting on" a rubber thingamajig and a light connector. This is without any computer, or order clerk, breakdown. In general, our construction business is disrupted by supply glitches more than any other problem, mainly because of the combination of computerization and the resultant hiring of near idiots to administrate orders. I get someone telling me that I don't have the wrong item in my hand, because the "number" in the computer say's its the right one.

What will happen when Y2K creates vehicle and equipment failure beyond the everyday norm, while simultaneously devastating supply lines for needed parts?

I've come to the conclusion that you cannot be fully prepared for Y2K. All you can do is the best you can do and hope for the best. This after much consideration....

Of course; you can't cover all bases. Nevertheless, it would be prudent to take care of any pending 100 hour of 30,000 mile or whatever services before hand. I personally am hoping not to have any vehicles past warranty on 1 Jan.

So much negative press on gold. Germany says it approves of IMF sales. Swiss talk of sales. Oh my.

I remember reading somewhere that the biggest overriding fuel to a gold rally fire was consumer demand as their was nothing greater. Why would anyone want to buy gold when so may bad things are said about it?

Try standing in a coin shop when customer after customer walks in and say, "I want to buy some gold or silver. Y2K is coming and I want to have some." And this is but February.

MS65 Morgan US Silver dollars from the late 1800's are going up 5-10% per week last couple of weeks. Can't buy one for under $100. Of the 106 varieties listed in the Coin Dealer Newsletter, only 12 varieties of those 106 sell for $100. All the rest are much higher. Incredible.

I might make an addition to my post about the gold coin shortage. When the mint rations gold, all it is doing is creating more incipient demand as the word makes the rounds that these coins are going to be increasingly more difficult to obtain. That's human nature. I might add that this type of demand phenomena might spill over to cash, food and spare parts, Peter, as the year goes on. Gold might simply be the first Y2K-sensitive item to experience the problem.

Each time the Mint gold window is reopened the big market-makers purchase not just for existing demand but anticipated demand and in multiples of their usual needs thus exacerbating the problem. (This might be adding to that large commercial long position building at the COMEX.) Right now the shortage is in the smaller gold coins. In my view, it won't be long until it affects the one ounce coins as well. There is simply no way that the gold industry will be able to handle the demand when the general public decides it's time to dive in the way it has in the stock market. The largest gold brokerages in American are probably not half as large as the Denver Merrill Lynch office. So even if the Mint can make the coins fast enough, we might not be able to distribute them. I bought US gold Eagles for clients today and paid a premium -- albeit small. It is a sign of the times.

$289.40...

Rumor: London Silver market delivering or about to deliver or will have to deliver 400 contracts.

Gold selling rumors rampant: how drole.

MARKET UPDATE (2/10/99): Gold stayed in a range right around yesterday's close in the early going today with worries over the Russian Uneximbank and Brazilian eurobond defaults hanging like a pall over all markets. There was little mention of these events in press reports yesterday, but that does not subdue the impact of these defaults as they roll through the world economy. In Russia, for example, Norilisk, a major palladium and platinum producer might have problems financing its operations because of the Uneximbank problems. Russia is also a major gold producer.

The dollar was up against the Asian currencies this morning and down against the European. Wim Duisenberg commented that European rates are fine where they are and talk of easing
rates from Japanese and U.S. officials overnight gave the appearance of action to be taken to drive the yen lower -- today's dollar/yen and dollar/euro sentiments appear to be the exact opposite of yesterday's. Let's just call the currency situation fluid and sit back and watch. Anything could happen.

It's a light news day. We will update if anything interesting develops. Have a good day, fellow goldmeisters.

Just when things were looking better someone at 10:30 NY time dropped a BUNCH on SPOT the dog and drove the POG down over $1.30 an oz. This caused a increase in the number of APR contracts and equaled the price reduction with about 300 contracts before the price stablized at 288.7 after about 15 minutes and began a low reversal upward. Poor SPOT
<;-)

Compare and contrast this small view with the situation in the U.S. (as paraphrased from an economic news report):
------------------
Japan has a few monetary policy options with which to cap interest rates and keep recovery on track. The option of underwriting bonds is the least likely solution, according to analysts. This practice obliges the BOJ to buy bonds not sold at the time of issue, but it was banned in 1947 because it had led to hyperinflation. The central bank may, however, buy bonds in the secondary market; yet Bank of Japan Governor Masaru Hayami has resisted pressure to do so, saying it would hurt the bank's fiscal health.
----------------
Consider this together with recent archive: "Aragorn III (2/8/99; 15:53:30MDT - Msg ID:2277) The fundamental difference..."

The U.S. dollar remains as strong as much inertia allows. The side view reveals the thinness of the ice. As odd as this mixed metaphor may sound, the collapse will surely take down all birds of a feather, yet gold will "float your boat"--not mattering what flag you fly from your mast. Governments live or die by their currency, whereas People live by their choice for gold.

"ALL ABOARD FOR THE TITANIC!"
by AIDA PARKER

MAN proposes, God disposes. For years and years the Globalist decision makers - the Insiders, the One Worlders, the Rothschilds, the Rockefellers, the international bankers and finance houses, the giant multinational corporations - have sought to re-arrange all our lives, this in their modest aim to create a New World Order. We have seen the es-tablishment of the UN, the IMF and World
Bank, the World Court, the World Economic Forum, The World Council of Churches and so many more: all leading, we were told, to a planetary regime, with a single global economy. And what, at the end of it, have we got?
The New Age of Chaos: an age with a global monetary and banking system so unstable and so fragile that the miracle is that it lasted as long as it has. Very few, it seems, even now fully understand the full dimensions of the
avalanche that has over-taken the global economy, which threatens to sink us all. But I can assure you that the millennium meltdown is shaping up very nicely indeed.
Of course, that's not the way the Insiders, their politicians and their controlled press tell it. For them, talk of such calamities, such wipe-outs, are taboo. These are, they tell us, only marginal prob-lems, nothing really for us to worry about. On all sides, the seriousness of the global financial break-down is trivialised; as evidenced by Bill Clinton's exuberant State of the Union address, public opinion is bombarded with glowing images of global growth and prosperity.
The truth is that the world economy has been deliberately betrayed by the NWO/IMF Insiders, men totally divorced from the most elementary sense of decency and willing to do anything it takes to achieve their world domination goals.
In this decade we have seen billions of dollars of official reserves plundered by men such as the Rothschild puppet, George Soros, triggering a ruin-ous chain of currency devaluations. Billions of lives have been blighted and destroyed, entire nations are now broken and ruined, the latest caught in this seismic shock, Brazil, which could conceivably take all Latin America with it.
In 1992 Jean-Claude Trichet, governor of the Banque of France, suggested (only half in jest) that Soros & Co should all be guillotined. A splendid idea. Instead, he is lionised as the "philanthropist of the age." But more of Soros and the Rothschilds later in this issue.
Jean-Michel Severino, Vice President of the World Bank (East Asia and Pacific) warned a full year ago that the world was in danger of sinking into a long, deep
depression. A few weeks ago, the IMF pre-dicted that growth in world trade this year could slump by two-thirds. The London Financial Times forecast in one of its New Year issues that the world economy could be in full recession by July. The Japanese, Russians, Chinese, most Asian coun-tries, Latin America and Eastern Europe are al-ready there.
From Tokyo to Sao Paolo, entire industries are shutting down and, in the process the world finan-cial system is dangerously close to destruction. In many cases, economic statistics and social disinte-gration are worse than anything seen in the Great Depression. Russia being the outstanding example. Another parallel with the previous great crash: the lack of leadership. There is not a
true leader any-where in the world. And not one of them has any real road map to guide us out of this mess.
Nor is that the end of this drama. Lurking in the wings is the dread Y2K, the computer millennium bug, threatening to take us into dark and unknown territory. And, as if that is not enough, we also have the economic fallout from El Nino, the great weather disturbance that has been creating freak conditions in the global economy over some years. Thanks to El Nino, 37 countries now face critical food emergencies.
One wonders: just how much more complicated can it get? All the way round, this is a time of blackest pessimism. The bloodletting has begun with a vengeance. Now let's look at some of the most critical flashpoints.

AMERICA. The day of reckoning for the US is just round the corner. While the rest of the world has been crashing, the US has enjoyed a weird, a totally unreal, prosperity. Judging by the New York Stock Exchange, and Presidential
assurances that the economy is prospering as never before (shades of 1929!) most Americans seem to remain blissfully unaware that they are about to be flat-tened by a tidal wave: that they are living in a time of false hope and great deception.
Anyone who still believes the US can be an island of prosperity and stability in a global depression is kidding himself. The US is the biggest debtor nation on earth. The US needs US$50 billion a month in foreign bailouts just to keep going: some $2 bil-lion a day. This is a very high risk market indeed, threatened by a deadly combination of loose credit and a wildly overvalued stock market. Looming events will soon turn the US upside down. Wall Street is a
ticking time bomb, not least because of the derivatives bubble. Some estimates put the value of derivatives as close to US$70 trillion, many times more than brokers and banks can cover.
The New York Exchange is the world's largest gambling casino. Compared with a mere 5% in the Sixties, nearly half of all US households are now involved in the stock market, either through direct ownership of stock, or indirectly through mutual funds, pension plans and the like. Because of the stock market frenzy, more than 40% of personal net worth is tied up in a dangerously over-valued market. Never before in history have any people been so dependent on the stock market.
Because of the stock market hysteria, the American personal savings rate has gone negative for the first time since the Depression. If Wall Street should fall as much as Tokyo, it would wipe out $6 trillion of wealth or more than $60,000 per family. But the median family has only a net worth of $53,000. Yet they still party on. Suckers still get suckered into the mutual fund slaughterhouse.
The structural causes of the stock market crisis are seldom mentioned: one of them being heavy-handed rigging by the Clinton administration. Though this is adamantly denied, there is little doubt that Clinton's people, using dummy names and various brokerages around the world, are manipulating the US stock exchange, using taxpayer money to massage the market and keeping it from adjusting downward, so taking some of the heat off Slick Willy and allowing him
to continue crowing about his fictitious achievements.
US industrial output has already slumped to re-cession level as world demand weakens. Reportedly 30% of all US merchandise exports and 40% of all agricultural exports previously went to Asia. These markets (in direct result of
America's own financial chicanery) are now fast drying up. The US trade deficit, the worlds biggest, must inevitably get worse. Asian products will get cheaper and cheaper for US consumers. That will still further devastate US
manufacturers, already deep in trouble.
Unemployment in the US is said to be falling; yet the number of people in low wage, part-time jobs has spiralled. Latest bad news on this front; Boeing Aircraft is presently laying off 48,000 workers be-cause of cancelled or too few
orders. The $ is under increasing pressure. People are growing increasingly afraid to invest in $-denominated assets and are looking for alternatives: the most publicised the euro. Money is fleeing the US to neutral nations such as Switzerland and New Zealand.
Most alarming: big foreign $ investors are repatriating their holdings. At the end of 1997, Japan was the world's largest single holder of US Treasuries, supposedly the safest investment of all. The Bank of Japan alone held more than US$300 billion; China $100 billion (or so they claimed); Germany and England $400 billion. These holdings kept the US interest rates artificially low: and
sent the Dow into the stratosphere. Now these countries want their money back: and America is going to suffer a really ugly dose of economic reality.
The respected US publication, Economic and Portfolio Strategy, writes: "The international risk revolves around the $. The dollar is the most over-valued currency in the world. The volume of our $-dominated liabilities grows every single day. If ever there was an accident waiting to happen, this is it.
"We are not predicting this unhappy outcome, but those bloated international liabilities are there for all to see. Consider this: The 11 euronations have a net positive trade balance of US$140 billion a year. The US has a gaping
external deficit of $300 billion. Against that, how can the $ hold up?"
To top this, America's leadership upheaval has further damaged confidence at a very bad time. Just as US President Herbert Hoover was paralysed into inaction by the Great Crash of 1929, and its consequences, so Clinton, beset by personal problems, is poorly placed. Prediction: At some time in 1999, either the US stock market or the US$ - or both - will break, with a speed that will stun the
world.

JAPAN. Just a few years ago the Japanese were the wealthiest people on earth. Today Japan is suffering the biggest wipe-out the world has ever known. Only one wipe-out will be bigger: the US. In recent weeks the media made a great to-do about the yen strengthening against the $. The Japanese currency may be strengthening, but the Japanese economy is still ailing, plagued by continuing
recession, falling prices, a crippled banking system and political paralysis. The Japanese economy is not on the verge of recovery.
The Japanese banks still have about US$1,2 trillion in bad debts on their books. Japan's jobless rate has hit a record all-time high. Profits from Japan's 2,439 publicly listed companies have plunged almost 45%. The yen rising
against the $ makes life even tougher for Japanese exporters, as its locally produced goods become more costly on world markets. At a time when Japan is counting on exports to help lift the economy, the best thing for Japanese multinationals is a weaker yen, not a weaker $.

MELTDOWN IN MOSCOW. Everything in Russia is going from bad to worse. Boris Yeltsin is dying. Russia is in a hyperinflationary depression, historically a trigger to revolution. Russia's so-called capitalist experiment has failed. The economy is catastrophic: and getting worse. Like some broken-backed old bus, there is no power left to save the economy, which has shrunk 56% in the past year. Indicative of the industrial collapse: lorry production has fallen by 80% in the last six months, the manufacture of fridges and freezers by 73%.
According to official sources, some 300 of the 1,500 Russian banks are to be closed early this year. There is unimaginable devastation and poverty. People's meagre life savings have been wiped out. Population figures are below zero growth because women are afraid to have children. There is a sharp drop in life expectancy, particularly among males: reason, poverty, poor and inadequate diet,
violent crime and a massive alcohol problem.
Disaster piles on disaster. Russia this winter is suffering its worst food shortages since the Ukrainian famine of the 1930s. The total 1998 grain harvest
of 49.7 million tons was only half that of the 1997 harvest. Russian agriculture, in bad shape under the collective system, has grown progressively worse under the failed privatisation and free market reforms. Livestock has been slaughtered and people have fled the collective farms, where machinery and land alike are played out.
In short, Russia faces dramatic shortfalls of food, medicines, coal and oil: of everything except crime, corruption and confusion. Even large companies have
reverted to the barter system. In short, Russia has returned to a Third World basket economy, the first major industrial country in the world to revert to a preindustrial economy.
The Russian people, unpaid, impoverished, deeply humiliated as their country falls to rack and ruin, are full of fear, xenophobia and hatred, deeply anti-Western and alarmingly anti-Semitic, blaming the US and "the Jews" for having thrown them on the rubbish heap of history.
In November the Duma (Parliament) blocked a censure motion against a retired general, senior member of the Central Committee of the Communist Party and lawmaker, Albert Makashov. Holding "the Jews" accountable for Russia's woes, he publicly called for their "extermination."
A motion to censure Makashov for his "harsh, abusive statements" and for inciting racial hatred failed by a vote of 121 to 107. Not a single Communist lawmaker voted for the censure: nor has he desisted from his campaign. In a
recent broadcast, carried on a New York-based Russian language station, he rallied his supporters with the cry: "To the grave with the Yids."
Nor is he alone. The Governor of Russia's southern Krasnoday region has called for the "drawing up of lists for the deportation of breeds like the Armenians, Turks, Jews and other undesirable breeds." It seems that many
Russians blame "the Jews" for the fall of communism, for the murder of the Tsar and his family and for introducing homo-sexuality into Russia (!). This is a dangerous departure and one bound to be of considerable concern to Israel.
What's next in Russia? Both the US and the UN seem to underestimate Russia's threat to world peace. Almost all seem to see Russia as a hopelessly crippled bear which poses problems to itself alone. They forget this is the world's second largest nuclear power. In the old days of communism, the joke was that the USSR was "Burkino Faso with rockets." Now its called "Indonesia with nukes."
This bankrupt, shambolic nation still holds some 10,000 to 15,000 nuclear warheads. No proper inventory of nuclear weapons exists. Because wage arrears for nuclear technicians go back for almost a year, the weapons are at risk of illegal sale. Everyone is afraid that by going down, Russia might become both suicidal and homicidal, and downright nasty to boot, raising anew the spectre of
nuclear holocaust.
The First Deputy Prime Minister of Economic Affairs says that but for Russia's nuclear deterrent, it would be treated as unceremoniously as Yugoslavia. Last year General Vladimir Belous published a piece in Moscow in which he openly said that there are only 25 US cities with a population of 500,000 or more: and that, by targeting them with nuclear-tipped warheads, Russia could "very easily keep its potential enemy at bay." Generally, Russia
continues to upgrade its military hardware in terms of nuclear weapons, missiles and submarines.
Like the Roman Empire, the old Soviet empire is splintering and Russia will eventually disintegrate into a long series of mini-states. Whatever, there is in present circumstances good reason to fear events in this "Indonesia with nukes."

CHINA. So recently hailed as "the world's fastest growing economy," analysts now fear this Communist giant is toppling into severe deflationary col-lapse. Officially, the Chinese economy grew by 8% in real terms last year. In fact, Chinese growth is largely fictitious and it looks as if the Politburo is girding itself for an economic trial by fire.
Under US pressure, Beijing swore it would not devalue the Renminbi. Now the betting is that it will soon follow the Brazilian example. Foreign investors can't get their money out and can no longer repatriate profits. Though Beijing
reputedly holds US$100 million in its foreign reserves, there is a growing suspicion that such hard currency reserves have been stolen by the leadership. Major economic worries? A huge accumulation of unsaleable goods produced by loss-making state companies; vast over-building of office space and factory capacity; huge over-capacity in the money-losing steel plants.
The Chinese government is trying to avoid the Asian catastrophe by replaying Franklin Roosevelt's New Deal. It is printing money at full belt and, in a massive spending spree, hiring the unemployed to build roads, dams, bridges,
power plants, subways, airports and other "public works." What they do not appear to understand is that Roosevelt's New Deal didn't work.
US government statistics show that more people were jobless in 1940 than in 1931. But there was a remedy. On December 7, 1941, the Japanese attacked Pearl Harbour. The depression ended and unemployment quickly vanished. Maybe its China's turn to attack Pearl Harbour.
But free markets in China? I am afraid that has become a sick, costly joke.

EUROLAND: Downplaying Europe's vaunted stability, The Wall Street Journal says growth pros-pects for this
11-nation region are "on a knife edge." Maybe. The euro, once dismissed as a bu-reaucratic pipe dream, has become reality, enjoying a reasonably problem-free global introduction. While European banks have been hard hit by the global financial crisis, most economists and analysts
still expect the region to fare better than the US. The statistics favour such optimism.
Euroland GDP could prove less prone to slowdown than other economies because of its large single internal market. The European Union's population is 370
million; share of world trade, 20.9%; foreign exchange reserves, US$385 billion. America's population is 263 million; share of world trade, 19.6%; foreign exchange reserves, $64.6 billion.

BRITAIN. Confidence in the Blair government is evaporating as the country faces threatened business collapse. Commercial confidence is nose-diving at its
fastest rate in nearly 20 years. Factory slow-downs and closures, with sharply rising job losses, could soon wipe that smile off Tony's face. The European commission placed Britain bottom of the league for 15 European member states in its fore-cast for economic growth in 1999.
Britain has suffered a punishing knock from the world wide slump in demand. UK exports to Indonesia and Malaysia are down 55%; to South Korea, 58%; to Thailand and the Philippines, 63%. North Sea oil could become unprofitable if prices remain low too long - say a year. Wages and company profits are falling rapidly, expected to slash tax revenues, leaving Chancellor Gordon Brown short of cash to fund his ambitious three-year planning programme, designed to pump an extra �56 billion into the public sector. How Tony Blair and Brown will cope, with all their spending plans thrown into disarray, is anyone's guess.
Both Blair and Brown have been urging British citizens not to panic and to keep spending - "failure to do so could sink the economy once and for all." Others are more forthright. The influential UK Institute of Directors has
warned that "business is bleeding to death because confidence has virtually collapsed, while engineering union boss Ken Jackson says: "We are in danger of seeing the death of British industry."

BRAZIL: With this Latin American colossus the new epicentre of the global economic earthquake, a huge problem is exploding in America's backyard: with nobody doing very much about it. Brazil is a key nation to watch right now. It is a crucial mar-ket for US exports and investments, and where the US stake is far higher than in Russia. Brazil absorbs 2% of US exports and depends on the US for about 20% of its imports. What happens in Brazil will radically impact on the American economy.
And that's not all. With bad times closing in on Latin America's stirring giant, its strong trade ties with Argentina are likely to pull that nation down also. The collapse of the continent's two leading economies could then have a domino effect, and this in a very vulnerable region. The entire trade area is ravaged by weak commodity prices.
Latin America as a unit needs US$1 trillion just to stay afloat. Mexico, Argentina, Colombia, Peru and Central America are collapsing under the weight of too much debt, the slowing global econ-omy, bad investments and corruption. Poverty and civil unrest are beginning to cast their menacing shadow over every country in the area.
Piling agony on agony, recently Hurricane Mitch, one of the worst weather disasters in history, devastated much of Central America, with more than 10,000 people killed. In Honduras and Nicaragua, 3 million people - one third of their population - have been left homeless. Due to Hurricane Mitch, Honduras and Nicaragua have lost 70% of their total GDP. To be broken and wiped out right ahead of a major global downturn is total tragedy. Latin America could become Communist America if the West is not careful.
And all that, really, is just scraping the surface of the devastation and disasters now overwhelming the world and which, together with Y2K, the oil crisis and growing conflict situations, could thrust much of the globe back to
the Dark Ages.

I have been criticised for detailing the growing tragedy, but I feel responsible people want to know the truth, these days a scarce commodity. And this time I present it as a possible warning to those now thinking of leaving this country. Life is by no means ideal here: but in present circumstances, it might well prove much worse elsewhere.
++++++++
Has anyone got any good news ?
<;-)

Gandalf the White, I think perhaps my Msg 2310 could be viewed as the Executive Summary for your Msg 2311. Your timing, as ever, is flawless.

Like minds !
<;-)

I read your post "ALL ABOARD FOR THE TITANIC!"
by AIDA PARKER with great interest. Quite a writeup. Thanks!
Do you have a URL? Who is AIda Parker? Source?

Usually I am not letting it be known that I surf the far right pages, but some of the Hobbits like to see what the fringe is like at www.eaglesup.com --- have fun !
<;-)

Michael

Congratulations, you have succeeded in attracting a fair number of good people to this site with discerning minds. These are people who see the world as it really is as opposed to the pictures that earthly powers continually paint for us.

Grandalf and Aragorn

Thanks for todays posts.

Some thoughts on conspiracy that I read some years ago from a pamphlet written by R. Gary Shapiro. The first job of any conspiracy, whether it be in politics, crime or within a business office, is to convince everyone else that no conspiracy exists. The conspirators success will be determined largely by their ability to do this. The elite of the academic world and mass communications media will often pooh-pooh the existence of the insiders in an effort to camouflage their operations.

Because the establishment controls the media, anyone exposing the insiders will be the recipient of a continuous fusillade of invective from newspapers, magazines, and TV. In this manner one is threatened with loss of social respectability if he dares broach the idea that there is organization behind any of the problems currently wracking the world

One thing which makes it so hard for some socially minded people to assess the conspiratorial evidence objectively is that the conspirators come from the very highest social strata. They are immensely wealthy, highly educated and extremely cultured. Many of them have lifelong reputations for philanthropy. Nobody enjoys being put in the position of accusing prominent people of conspiring to enslave their fellowman

We know that Adolph Hitler existed. The terror and destruction the he inflicted on the world are well recognized. He came from a poor family which had no social position. He was a high school dropout and was not considered to be cultured. Yet this man tried to Conquer the world. During his early career he sat in cold garret and poured onto paper his ambitions to rule the world.

We also know that a man named Vladimir Lenin also existed. Like Hitler, Lenin did not spring from a family of social lions. The son on a petty bureaucrat, Lenin, who spent most of his adult life in poverty, has been responsible for the deaths of tens of millions of his fellow human beings and the enslavement of nearly a billion more. Like Hitler, Lenin sat up nights in a dank garret scheming how he could conquer the world.

Is it not theoretically possible that a billionaire could be sitting, not in a garret, but in a penthouse, in Manhattan, London or Paris and dream the same dream as Lenin and Hitler? Julius Caesar a wealthy aristocrat, did. And such a man might form an alliance or association with other like-minded men, might he not? Caesar did. These men would be superbly educated, command immense social prestige and be able to pool astonishing amounts of money to carry out their purposes.

It is difficult for the average individual to fathom such a perverted lust for power because he does not share the same extreme lust for power.

However we know that down through the annals of history small groups of men have existed who have conspired to bring the reins of power into their hands. History books are full of their schemes�like the Cosa Nostra where men conspire to make money through crime. The question is which is the more lethal form of conspiracy�criminal or political? We all know that corrupt governments have throughout history caused the greatest inhumanity towards humanity. The more centralized the government and its power the greater the potential for misuse of power.

And a little substance called gold gets caught up and impacted by this quest for power because power is purchased with money and gold is money. When the conspiracy comes up with a fiat money system then gold must be manipulated at all costs.

$288.70.

Might find this interesting:

Date: Thu Feb 11 1999 00:07
JP (The Transportation index and the a/d line on the NYSE leading the market down) ID#197181:
Copyright � 1999 JP/Kitco Inc. All rights reserved
Regardless of the critics, the a/d line on the NYSE is about to retest the Oct 98 low's. What does it mean? It
means that most stock prices on the NYSE are as low as they were in Oct 98. The big rally we had for the last 4
months was concentrated primarily in Dow stocks,internet issues and a few selected stocks on OTC. Many
people are seeing losses in their portfolio's and are getting nervous. Majority of investors will be wiped out before
this bear market is over. The bear specializes in keeping people fully invested all the way to a future bottom and
seperating people from their assets. As the Transport index and a/d line record new low's the Dow stocks will
follow. On Aug 4,98 I reported that we had a primary bear market confirmation and nothing has changed since
that time.
Bull markets rise to extremes where most stocks are overvalued and bear markets decline to extremes where most
stocks are undervalued regardless of any governmental interventions or private injection of money. No one has
ever been able to stop a bull or a bear market.

Who is in the Hen House ?
Professor von Braun
The Rocket School of Economics

Feb. 7th, 1999

It is a fact that we are living in very interesting times. The antics of such entities as the IMF, the�
Federal Reserve and various European Government leaders as they come to grips with what their
predecessors created, the new European Central Bank, only serve to confirm that this fact is indeed
true. Japan also helps to confirm this as it tries� to legislate it's way out of a recession.

�Politics and banking are bedfellows and sometimes its difficult to determine which is which and who
assumes what gender role. Often the participants get confused themselves and politicians try to behave
like bankers and bankers try to behave like politicians. When this happens trouble has either occurred or
it is about to. In fact when politicians start behaving like bankers it is almost guaranteed that trouble
has already set in. The clues often come from what they say, whom they say it to and where they say it.

A recent example of this is Vice President Gore, a past master of getting the delivery wrong (his speech
in Malaysia late last year comes to mind) and his speeches at Davos. His "plea" to Japan� to hurry� up
and get its act together and help save the entire world from economic disaster, had a funny ring to it.
After all the US� should be deeply indebted to Japan for it's assistance in being a purchaser of US debt
all these years and allowing the US to maintain its annual deficit. And Japan is still running a trade
surplus. So why pick on Japan in such an environment as the conference at Davos ?

Then a few days later, in conjunction no less with another speech by the US President himself, there is
a statement from Gore that the IMF should do its part as well and sell some of it's gold reserves to help
poorer nations. Given the events of the last two years one could be forgiven for thinking that IMF help
would be the last thing a "poor" country would want since making poor countries poorer seems to be an
IMF specialty.

�Getting approval for this event requires a certain vote of� the members (yes there are other members
apart from the US) of the IMF and it is not just a "slam dunk", as they say in Washington these days. It
would� require the assistance, by way of the necessary� vote, at the very least of the Germans (who
have of course just changed to a trendy, lefty, greenish tinged, form of leadership).

After being reminded of this it seems that Vice President Gore had the answer. What he was really
saying� was that the IMF should sell its gold and buy US treasuries and use the interest received from
this investment to help the poorer countries. This of course gives the appearance of there being no
actual reduction of IMF reserves, just a slight rearrangement.

As most of us know new trendy, lefty, greenish tinged political leaders are not too bright when it comes
to basic economics and the sell gold/buy US treasuries ploy should assist in obtaining the required
votes.

Well have I got a deal for you. Lets swap gold reserves for paper, not just any paper but "our" paper and
then we can receive interest on it and help the poor. Why not buy Japanese paper, or heaven forbid ECB
paper or perhaps a combination thereof. What about Brazilian paper with its high interest rates ? Really
!

Could it not be that perhaps there may be, from a freemarket perspective, a surplus of US paper, the
result of relying on debt funding for too long. Perhaps the White House economic dream team has figured
this out and now wants the IMF� (its partner in crime it seems) to take up this surplus.

Annoying Japan one day and talking about IMF gold sales coupled with purchasing US Treasuries the next,
may well be coincidental. But couple this with loud noises about Social Security reform,� after all
where does the Social Security "surplus" go ? You have guessed it - US Treasuries. Something is perhaps
just a little bit "fishy" here.

After all who is the second largest holder of US Treasuries after the Caribbean ? Why Japan of course.
And should the Japanese decide to sell who is there left to buy them ?

Perhaps somebody has figured this out and that somebody is part of the White House economic dream
team, the same dream team that created the budget surplus that does not exist, but that's okay, we will
spend it anyway.

It needs to be remembered that the Peanut under the Shell game does require a peanut for it to be at
least what it is supposed to be, a genuine guessing game. Perhaps the peanut did leave the White House
(wasn't that back in 1974?). Who knows.

Or perhaps Vice President Gore was right in his noble intention to help the poor. But somebody should
have asked him whom was he referring to ?

Professor von Braun is a guest commentator at the www.lemetroplecafe.com website and can be
contacted via email at profvonb@aol.com.

Good post.

April gold just bounced big. Now $289, asking $289.10.

Yours was an interesting post, and I thank you for providing this 'food for thought�. It gently prods me to reconsider possibilities that I would otherwise dismiss upon the presence of a fatal flaw where gold is concerned.
I am working through a changeover of computer systems, so I must elaborate when time allows. I anticipate much more posting flexibility by next week. In the meantime, I would encourage everyone to offer their gold-related conspiracy views for general discussion and consideration. Together, we may put some to rest, and bravely face those that remain.

MARKET UPDATE (2/11/99): Gold posted a moderate gain in the early going today with all markets running seemingly at a low hum for the moment. Reports from Europe that no
interest rate cut was in the offing subdued dollar gains against the European group currencies. Likewise, the Japanese finance ministry's public discounting of Robert Rubin's Keynesian medicine for their economy and the national holiday there seemed to keep the dollar/yen rate range bound. All eyes will be on Congress and Alan Greenspan this morning watching every small smile, every twitch of the eyebrow, every voice inflection for signs of interest rate policies to come. We will stick with our forecast of everything remaining on hold. The Fed has been adding to reserves on almost a daily basis -- no reason to think that
that will change in the near future (not with the Asian contagion foremost on the Fed chairman's mind).

As for gold, there was little in the way of news. I would discount remarks in the mainstream press about central bank and producer selling. The central banks are not likely to sell (and if they do it will be in a manner so as to upset the market) but the rhetoric is sure to continue. Producer selling is a constant, anticipated factor in the market and I don't see it accelerating to a level high enough to drive prices any lower. The cost of production at a very high percentage of gold producers hovers around the $275 mark establishing a floor near the current price. Depreciation of the Australian currency has encouraged some producer selling there but not enough to cause anything beyond a slight ripple. It all makes for good press though -- especially when the same old sources keep feeding you the same old story and the only time you get the other side is when some frustrated and bedraggled gold bull contacts you and forces you to acknowledge that there are two views of the market which should be acknowledged. Of course there's always the prospect of digging below the propaganda to find out what's really going on, but few in the press do that anymore unless it serves their socio-political agenda. So it goes..........

That's it for today, fellow goldmeisters. We will update if anything disturbs the quiet revelry that has settled over the markets the past two days.

(RED BARON) FRB & GOLDMAN SACHS VS. GOLD
(JCTex) Feb 11, 10:50

It depends on what "is" is.

I cannot imagine why ANY of us would be surprised at this bunch doing ANYTHING immoral, illegal, or ill-anything else.

They are masters of each of those words you used to describe them....because the press has sold-out to them.

The future history books will probably have little interest in Bill, Monica, or gold; the main subject will be "how the press sold out the American people" [in every way].

Thank you for your recent post. I read it with great interest. I am now reading (in small doses) Mccullough's book on Caesar. If you think these times are full of intrigue, conspiracy and the excesses of power, go back to those for a visit! Clinton's response (now that he will be let off the hook) that he is going to "get the Republicans" is very reminiscent of Roman power politics. If you won a political victory, you got to move up to the next level and your enemies paid the price. There was no such thing as "healing" and "reconciliation." Only rolling heads. Then you, as the man in power, could try for something still higher; if you lost, it was either exile, jail, or you were sripped of your wealth. Only the cunning survived Roman politics. I put a Taylor Caldwell quote (one of my favorite writers) in my book from her book on Paul of Tarsus. What do you think of when you read this?

"Rome's constitution was inevitably eroded by ambitious and wicked and lustful men, in whom patriotism had long died, and who saw their nation not as a Colossus of freedom in the world and a light to nations, but an arena in which they could gain prizes and enventually crown themselves."

Thank you, JA, for your kind comment. I too am happy with the kind of poster we have attracted here and I count you solidly amoung this group of "seekers of wisdom." I hope for many, many more.

GOLD MARKET TRIVIA BOGGLES THE MIND
(Gold1500) Feb 11, 10:22

Today there are $5 trillion in US mutual funds. Taken into perspective with the value of all precious metals companies worldwide describes an interesting potential for gold and silver shares.

Any stock market student worth his salt well knows market investment fads rotate. That is to say what is in vogue today (ie in high investment demand), is dumped for the "new" promising sectors tomorrow. It has always been that way - and will always be that way.

Today the market value of all publicly traded gold and silver stocks is about $100 billion. This is to say gold and silver stocks represent only 2% of total mutual fund assets. Furthermore, the market caps are are record lows.

When (not if) the bear stock market begins in earnest (most probably this year) - especially in view of the looking Y2K menace, much money will flee the crumbling mutual funds. Without a doubt some of the monies fleeing falling stock prices will find their way into gold and silver stocks - like they did in the aftermath of 1929 and during the other great market crash of 1973-1974 (when the DOW lost more than 50% of its value).

It behooves each investor to estimate how much gold and silver stocks will appreciate when faced with a draconian flood of money fleeing 'paper' stocks and seeking the refuge of gold and silver - which by the way are presently at multi-year lows.

No one can hope to precisely estimate how much the XAU will appreciate in such a scenario. However, here are a few factors which will help one make an educated guess of where the XAU is going (the XAU, of course representing all gold and silver stocks worldwide).

1. The XAU old high was about 155, hit twice before in 1987 and 1996.

2. There is now a reservoir of funds of $5 trillion from which to bid up the XAU.

3. Historically, for every 10% rise in the price of gold, the XAU rose 3 to 5 TIMES MORE (30% to 50%).

4. The price of gold has been held down artificially for about the last 4-5 years. This represnts pent-up demand.

5. Many major Currencies worldwide have been trashed (Brazilian real the latest, now off 37% in only weeks)

6. All the world's Central Banks possess only about 35,000 tonnes of gold. If we establish a value of $290/oz, CB gold reserves are only $320 billion.

6. $320 billion is mere pittance versus investment reservoirs of US mutual funds and Japanese savings:
- US mutual funds: $5 TRILLION (US)
- Japanese Savings: $12 TRILLION (US)

7. When gold prices begin to rise, do you think Central Banks will sell off their gold reserves? Not on your life! Whereas some CBs will be forced to sell their gold reserves to stave off national insolvency, many CBs will more closely clutch their reserves for monetary survival - therfore, exacerbating the supply/demand dynamics, causing gold to soar to unprecedented hights. Then about 8,000 tonnes of leased gold (SHORT) must frantically cover.

And so shall the XAU and all gold and silver mining stocks br bid up as demand explodes upward.

No one, but no one will pick the bottom for gold and the XAU. In fact we may well have already seen it. The best strategy is to keep building one's bullion and gold and silver stocks positions... dollar cost averaging if you will.

Sooner or later the CB strangle hold on gold prices will be busted - via burgeoning demand and/or the GATA class-action lawsuit. The ensuing price surge of gold and the XAU may be dramatic ans sudden.

Would any one out there care to estimate the price high for gold and the XAU during the next 2 years - based upon the trivia presented above?

Newmont has no plans to hedge its gold

DENVER, Feb 4 (Reuters) - Newmont Mining Corp. Chief Executive Officer Ron Cambre said on Thursday the company has no plan to hedge its gold production at current low prices.

"We don't think it's in the best interest of our shareholders," Cambre told a teleconference call after the
company released its fourth quarter results.

It would appear that the cavalry is coming over the hill at a rapid rate. These are 800-pound gorilla types.

Put this in your magic machine, and make a chart out of it. I would post the chart, but I am a lot better at lurking, than posting.

Commercial Net Postion:
11/10/98--(2710)
11/17/98--(14,673)
11/24/98--(17,660)
12/1/98--1,105
12/8/98--(824)
12/15/98--14,227
12/22/98--28,998
12/29/98--37,206
1/5/99--46,620
1/12/99--40,600
1/19/99--55,319
1/26/99--64,786

JC, if you are better at lurking than posting then I'm a potted plant sitting quietly in the corner of the room.

Exponential growth? In gold's favor? Why isn't the financial press talking about that??

By the way, I'm at home today trying to catch up on some personal things, so I will be back and forth at the FORUM today.

Is gold up 70� or am I misinterpreting MRCI? Silver also up 8�? I need to stay home more often.

Steve, Is it that my eyes going bad, or has the volume dried-up on the APR Au futures contract. This may be just another opportunity to stockup on Maple Leaves and Pandas as one sure can not find those Au Eagles easily any more.
<;-)

TIME magazine provided a cover story this week heralding the
efforts and accomplishments of Fed Reserve Chair Greenspan and Treasury Dept. associates Rubin and Summers. This letter constitutes not only a rebuttal but also a wake-up call to all American investors. For gold investors, it represents a protest against the uneven playing field in economic markets that has diminished the inherent value of the world's most precious asset to the detriment of sound global monetary policy .

-----------------------------------

Dear Editor:


Your recent article, "The Committee to Save the World," is the most egregious example of mainstream propaganda on behalf of Wall Street interests to the exclusion of reality. As such, I have sent it to various friends with the admonition to cancel subscriptions to your magazine immediately rather than suffer the tendentious idiocy you
disseminate to the American public in such a bold fashion.

Firstly, the title is inappropriate. It should read, "The Committee to Save Wall Street Institutions Through the Subversion of the Free Market Process." After all, the last time I looked, Wall Street was doing fine, the rest of the world STILL going to hell in a handbasket.

There is nothing more disturbing, if not sickening, than sifting through an article devoted to a trio of men who hypocritically preach the merits of free markets and the evils of crony capitalism, yet have done more to
subvert the American free market and uphold cronyism than any other American economic navigators to date.

In the Fall of '97, after the stock market fell some 500 points, did these men simply "let the market work" and find its proper equilibrium point? No, rather, there is evidence of Treasury intervention in a massive purchase of S & P futures the next day that sent the market roaring back, thereby erasing the entire day's previous drop. In doing
so, TIME's vaunted trio introduced the first major moral hazard into the market, suggesting that, despite any economic problems, the average American investor could always count on his government to intervene and preclude investor losses. Emboldened by the government intervention,
American investors proceeded to pour billions of dollars more into the stock market, despite their already extremely high levels of stock exposure and relatively low cash levels.

Then, in the Fall of '98, with the LTCM hedge fund crisis unfolding in the marketplace, did TIME's three saviors of the world once again "let the market work" and find its natural equilibrium point? No, this time, Greenspan specially arranged for all his "friends" in various
Wall Street institutions to bail out LTCM and preclude the hedge fund from realizing its well-deserved losses. The public was told this intervention (along with several subsequent interest rate cuts) was necessary to prevent financial systemic breakdown...yet there is NO evidence to suggest any potential losses suffered by the affected Wall
Street institutions would have resulted in any notable
catastrophe...EXCEPT, that is, for the Wall Street creditors of LTCM and their respective shareholders.

As a result of Greenspan's LTCM shenanigans, he turned a stock market bubble into a SUPER-bubble, as now investors are fully convinced that the government will ALWAYS intervene to preclude financial loss. What is the net result? The highest per capita debt levels coupled with the
lowest per capita savings rate in American history! Record amounts of home equity loans....billions of dollars of credit card debt...much of the monies now funneled into the stock market by a public categorically certain that it is impossible to lose money there because the Fed and the Treasury will never allow it!

No, Greenspan, Rubin, and Summers are anything but saviors of the world...not even saviors of America. By undermining the free markets on behalf of Wall Street special interests, they have destroyed the once level playing field and removed the essential element of risk necessary to keep markets rational. Even worse, they have exacerbated the cynicism of those Americans who have NOT benefited from this past decade's Bull market on Wall Street. For example, long suffering domestic commodities producers have experienced huge losses this past decade owing to collapsing prices. Many have gone bankrupt. Why has The Mighty Trio failed to intervene on their behalf and preclude their losses? Why do the Fed and Treasury's salvation efforts only apply to
the paper pushers on Wall Street? Why should afflicted commodities producers play by the rules if the government will not? At some point in time, market forces must surely overwhelm the concerted interventionist efforts of these Three Musketeers. If so, America will likely experience a most disastrous deflationary/stagflationary debacle with horrible consequences to all those overexuberant Americans seduced into placing their entire life savings into the bubble stock market.

I only hope that Messrs. Greenspan, Rubin, and Summers are still around to accept the blame they will most certainly deserve!

If TIME is still in business then, I trust they will provide a NEW, more appropriate cover story: "The Committee That SCREWED the World."

Would I be correct in assuming that you are a little p***ed?

If I were a farmer, I would deliver my crop to the nearest harbor, and let folks "eat" their coveted paper for the next year, and buy their bread from far-off places with their held-high dollars.

This then is my first post under my own handle.
I posted Msg ID 1897 on 01/18/99 under my sister's handle, as I had forgotten my password.
MK attempted to draw me out with Msg ID 1903.

And now Gandalf is to be the one who finally draws me out, via Msg ID 2311 and Gandalf's
subsequent indication Msg ID 2315 that he( or she ) 'surfs the far right ... fringe'.

I believe I saw a post on this forum about the Committee of 300, however I may have seen it
somewhere else.
.....................................................
"Taken from the gold-eagle forum"
.....................................................
(goldbull) Feb 10, 21:03
Well its well to think there is a balance of power but try reading
http://www.biblebelievers.org.au/300dx.htm its long and takes quite a lot to accept but if you think it through print off the index first and then take it section by section.
and for further reading ( like one big bookmark)
http://www.cairns.net.au/~sharefin/Markets/Misc1.htm this page will also lead you to sharefin's master page gold etc.
happy reading
......................................................

The 1-st link above is to Coleman's book, if you have not read it, it is interesting.
The 2-nd link, appears( I have not gone into more than the 1-st page) to have much much
more on the topics of the book of the 1-st link.

Read the book, then go and read the 20+ Protocols of Zion,
http://www.pixi.com/~bewise/protocol.html
agreed to by the Elders of Zion 1897, and you will discover that Coleman's book is
describing how THEY have and how THEY
are manipulating everything, world wide.

THEY are the Masonry, and THEY represent TOTAL EVIL.

Look further, and find the knights of the crusades (KNIGHTS OF TEMPLAR) joined up with
the masonry around 1300A.D.( I may be off on the date here ). It is widely believed that the
TEMPLARs came back to Europe having found the treasure of King Soloman's mines, and
ALL of this wealth was hidden before these TEMPLARs were purged.

Now one of the Protocols of the Elders of Zion indicates, that THEY can bring as much GOLD
to bear as is needed within 2 days. So, do they have access to the TEMPLAR treasure,
ESTIMATED to be 1 MILLION TONS OF SOLID GOLD.
Certainly, that amount of gold makes CB holdings and current world wide mine production
look like chicken feed, and if indeed they do have access to it, then they could care less about
what the price of gold is AT ANY TIME !

I invite you to do a web search on 'OAK ISLAND' and see what you find.

The back of the US 1 $ bill has the Symbol of the Masonry on it.

13 of the 39 people who signed the US declaration of independence were masons !

Clinton was/is DeMolay. DeMolay was the last of the KNIGHTS OF TEMPLAR.
Ronald Reagan a 33-rd Degree mason.

How is it that some people get to live above the law ?

I only have a problem with people who want to take away my breathing rights !

Is it possible that WE THE PEOPLE are being de-sensitized to the Y2K problem,
and that this problem has been engineered ?? The ramifications could be quite
horrific.

I very much enjoy reading the posts on this site.
You all seem to know a lot more than me about the workings of the markets.

Also, it appears to me that some of you are orders of magnitude better off than
I, with my small 30 Oz of Au.

Remember, for it is written that
It is easier to pass a camel through to eye of a needle Than for a rich man
to enter the Gates of Heaven.

Time to go now I have to clean-up my soul.
Steven Stuart

We will update if anything disturbs the quiet revelry that has settled over the markets the past two days. I think the author meant to use the word reverie . revelry is the exact opposite of reverie.

A beautiful piece of writing...Anytime a writer sends me reaching for a dictionary to look up a word, he should know I am truly interested in what is being said. "Tendentious" for those who want to know means "biased." Now....how anybody (ahem) could accuse Time magazine (cough) of being (clear throat) "biased" is beyond me.

So that you know that, though I admire style, I do not put it above substance, let me say this: These policies that have run rampant in the United States that favor consumers over producers, middlemen over manufacturers, debt over savings and imports over exports are the very same that stripped Britain of its place in the world and now threaten to do the same to the United States. Their effects translated to the world at large are, as you point out, a type of late Twentieth Century colonialism. Yesterday, I read a piece somewhere (and now I can't remember where) which lamented that industry before too long will be non-existent in Britain (perhaps somebody posted it here). How long before we are forced to deal with the same situation in this country? If Britain by World War II had become a nation of shopkeepers selling each other their wares, the United States by 2010, if things continue on this track, will have become a nation of fast food franchises where the citizens are occupied with the industry selling each other hamburgers and chicken sandwiches. It is interesting along these lines to note that British and American official views of gold co-incide now and have co-incided since World War II. They are both opposed to gold based money.

You are developing an interesting body of work here, Farfel.

You are right. So when does reverie become revelry? Not my first or last writing error. Thanks for the heads up.

Commentary written by Cleveland Fed Director of Research Mark Sniderman in the February issue of the bank's Economic Trends: "True, equity price movements can be explained through adjustments to standard equity-valuation models. Capital gains taxes have been lowered over time, and people accept risk more readily...but these adjustments are merely rationalizations after the fact. The reality is that the old norms no longer provide sufficient guidance." Further, "Recent statistical reports [of the economy] present an enviable picture. What's wrong with this picture? Everything. It's not undesirable, it's unjustifiable."

He sounds concerned...
and rightly so.

The stock market is a bee upon your face. (But the bond market is a rhino charging at your back!)

One may sting. The other will change your life.

got perspective?

This week we have seen a half dozen proposals proferred as to how the Japanese economy will be fixed including some from our very Secretary of the Treasury. Why is is that every alternative to bolster the Japanese economy is proferred publicly from all sides but the selling of U.S. Treasuries? Is this the rhino of which you speak.

This is excellent.

Date: Thu Feb 11 1999 17:12
Gold Dancer (Stock Market/ Gold) ID#430221:
Copyright � 1999 Gold Dancer/Kitco Inc. All rights reserved
The stock market refuses to go down. The 4 year cycle low has passed.
What does this all mean? What does it mean for gold?

Hell if I know but I will give it a shot. The stock market has not
peaked because the economy has not peaked. The economy has not peaked
because we have not seen the higher interests rates and inflation rates
that preceed a top. Prolonging the cycle has been the aim of Greenspan
and company and so far this is what has happened. Aside from the rich
there is a lot of pent up demand for goods in this country. But most of all
there is a large pent up demand for good and services from foreign dollar
holders. We have exported our inflation and this is in the process of
turning around.

So I could see the following. The stock market continues to rise but
the leadership changes. The tech and internet area goes down but other
areas go up. Smaller companies come into vogue as they are more able to
deal with a fast changing environment and inflation ( dollar depreciation ) .

Gold will rise for the next 12 to 18 months along with the gold stocks. Looking at the SA gold charts it is plain to
see that they
are forming big bases. A rise for 12 to 18 months is a possibility.

The stock market and gold could peak together in early to mid 2000.
Gold stocks will give the best performance simply because they have
been so beat up. The bears have been so wrong for so long that we seem
unwilling to admit that these are different times.

Looking for a market crash for gold to go up is wrong thinking. What we should be praying for is for the bailouts
to work and for the world
economy to recover. This will cause a higher demand for raw materials,
higher prices and recovering resource stock prices.

A crash in the US stock market will not help gold per se.

Since I think the economies of the world will recover and that the US
has not hit its economic peak yet I am no longer looking for a crash.
In 12 to 18 months when there are no bears around at all will be the
time to head for the hills. There is just too much money around.

Lets get a recovering world ecomony to get some of that internet money
into the gold stocks!!!

The reason for my recent thoughts is because of the year 2000. I just
think that people are going to be partying from here to at least mid 2000. It is in our nature to welcome in the new
milenium with a smile and
a drink in our hand. People don't want to hear anything else. That is
why Clinton is still here. People don't give a s#### either way. Let the
good times roll and lets have a party. They hangover is a long way off.

Just some of my recent thoughts.

Thanks, GDfont size="3">How about re-posting your previous post,on another web site,of your sightings of bumper stickers during the Arab Oil Embargo?

This is excellent.

Date: Thu Feb 11 1999 17:12
Gold Dancer (Stock Market/ Gold) ID#430221:
Copyright � 1999 Gold Dancer/Kitco Inc. All rights reserved
The stock market refuses to go down. The 4 year cycle low has passed.
What does this all mean? What does it mean for gold?

Hell if I know but I will give it a shot. The stock market has not
peaked because the economy has not peaked. The economy has not peaked
because we have not seen the higher interests rates and inflation rates
that preceed a top. Prolonging the cycle has been the aim of Greenspan
and company and so far this is what has happened. Aside from the rich
there is a lot of pent up demand for goods in this country. But most of all
there is a large pent up demand for good and services from foreign dollar
holders. We have exported our inflation and this is in the process of
turning around.

So I could see the following. The stock market continues to rise but
the leadership changes. The tech and internet area goes down but other
areas go up. Smaller companies come into vogue as they are more able to
deal with a fast changing environment and inflation ( dollar depreciation ) .

Gold will rise for the next 12 to 18 months along with the gold stocks. Looking at the SA gold charts it is plain to
see that they
are forming big bases. A rise for 12 to 18 months is a possibility.

The stock market and gold could peak together in early to mid 2000.
Gold stocks will give the best performance simply because they have
been so beat up. The bears have been so wrong for so long that we seem
unwilling to admit that these are different times.

Looking for a market crash for gold to go up is wrong thinking. What we should be praying for is for the bailouts
to work and for the world
economy to recover. This will cause a higher demand for raw materials,
higher prices and recovering resource stock prices.

A crash in the US stock market will not help gold per se.

Since I think the economies of the world will recover and that the US
has not hit its economic peak yet I am no longer looking for a crash.
In 12 to 18 months when there are no bears around at all will be the
time to head for the hills. There is just too much money around.

Lets get a recovering world ecomony to get some of that internet money
into the gold stocks!!!

The reason for my recent thoughts is because of the year 2000. I just
think that people are going to be partying from here to at least mid 2000. It is in our nature to welcome in the new
milenium with a smile and
a drink in our hand. People don't want to hear anything else. That is
why Clinton is still here. People don't give a s#### either way. Let the
good times roll and lets have a party. They hangover is a long way off.

Just some of my recent thoughts.

Thanks, GD

Welcome ! Please come out from behind the Trees and join us more often. That is a lot of reading material that you have given to me. I am sort of busy right now battling the Orcs and Nazguls (though I know you know not of what I speak). I should like to recommend to you that you sometime read the "Trilogy of the Ring" by JRRTolkien. Lots of subversion there too. RIGHT Aragorn III ? I do promise to surf those directions that you have laid out for me soon however. BUT, let us hear your thoughts on the matters. The Hobbits are "all ears".
<;-)

Michael

Interesting you should mention the book you are currently reading. Sounds interesting. I may be thinking along the same lines, last week I pulled "The Decline and Fall of the Roman Empire" off the shelf thinking I should review looking for parallels to our day.

Farfel

Excellent letter to the Editor of Time. But we have come to expect such propaganda from the News magazines, they were all compromised years ago. The other less obvious part of the agenda seems to be promoting Summers so he will be perceived as the logical replacement for Rubin.

Gandalf and Aragorn

I enjoy your incite, it must be the handles as they are symbolic of goodness and greatness and perseverance against all odds. I read the Trilogy and the Hobbit in college and they are still some of my all time favorite books. Tolkien may have written of middle earth but sometimes I think he saw a little of our day.

Which brings me to my thoughts of late. I am very concerned about the state of affairs in our country. We seem to be nearing that time in history prophesied of when good would be called evil and evil good. How can we have a man in the highest office in the land make such a mockery of the office and then go on public TV and Lie to the American people and then his ratings go up? As William J. Bennett say's in yesterday's Wall Street Journal editorial say's Bill Clinton is an incorrigible liar and betrayer of his wife, willing to employ character assassination against those who tell the truth and willing to commit multiple felonies to cover up his infidelity- and the public says, " Yes, but what is the problem?"


The French historian Alexis de Tocqueville defined the problem in 1831 when he said, "America is great because she is good, and if America ever ceases to be good, America will cease to be great "

Ancient inhabitants on this continent wrote.
"Inasmuch as they shall keep my commandments, they shall prosper in the land of promise."

"Wo unto them that turn aside the just for a thing of naught and revile against that which is good, and say that it is of no worth! For the day shall come that the Lord God will speedily visit the inhabitants of the earth; and in that day that they are fully ripe in iniquity they shall perish."

I don't know if as a nation we are fully ripe in iniquity but we seem to have traveling in that general direction.

What does this have to do with gold? nothing other than gold may provide some security in times of difficulty.

Did I forget ? I thought the ENTS were the talking trees ?
But indeed I do not know to who/what you refer with
your criptic use of Orcs and Nazguls. And I wonder why
you have not used Wraith to symbolize some other entity.
Its been more than 20 years since I read those books.

Now, It is MY point of view that the US Stock markets will
remain propped up until the THEY, of my last post, want it
too CRASH. As per the masonic symbol on the back of the US 1 $ note, IMHO THEY will cause ALL other markets and currencies to be trashed first, and only once
all assets, world wide, have fled to seek haven in the US
will they allow/precipitate the US CRASH, thus wiping out everyone who is not pating attention. Just imagine how rapidly the market would drop, if the largest share holder of ROYAL DUTCH SHELL was to put all that stock up for sale 'at the market', and what would that share holder care ?

Please see the gold-eagle forums postings,
(CHRIS) Feb11; 23:46 and
(BARFLY) Feb 11; 19:25.

(BARFLY) references Illummini now
Illummini = Illuminatti = The Enlightened Ones = Osiris and
all these and many more( I have found about 30 ) names
are just various ways to say FREEMASON.
At the highest level, 33-rd Deree Scotish Rite FreeMasonry
initiation the person, for the first time?, learns that he will
subsequently pledge his soul to SATAN.

S.Stuart

It will only be a short time before the train leaves the station going in the other direction.
Buying AU under $ 300! will be in the past, as the first breath of air is blown into this bubble
that will last for many years.....Can you imagine what will happen when the trillions of $s try
to find there way into this emerging mkt. To be short, is to be commiting suicide.
...more later

YES, ss -- JRRT LIVES !
JA -- We hope to see more of the teachings of ANOTHER demonstrated in the NEAR future. The world is watching!
Much more later, but now I must try to find FOA at the battlefront.
<;-)

Yesterday Greenspan commented that the US economy was the "envy of the world", = PRIDE!
Today the American people will acquit thier leader,= PRIDE!
PRIDE + PRIDE= destruction.
Sorry guys but there is a law in effect that is more powerful that gravity. "Its called reaping what you sow".
In the game of LIFE we have just begun overtime (harvest time). Like oil & water, milk & cream, Light & Darkness are about to separate. This is actually a gesture of mercy & grace which is being extended to the world! Reach for it.
JESUS IS LORD!

OK ! We now have volatility in SPADES ! Is the goal to tire the dipsters by giving them lots of book fait monies, and then quickly take it back away from them ? This may work, but the sales of asprin should be increasing rapidly. SPOT Au has taken a nice jump into a upper range this morn and APR Au has bounced to the 292 roof and is preparing for another attempt to break through that magic barrier. Nice PUSH Steve !!! The markets are now out to reverse yesterday's farse and correct the euphoria created by the last gasp of the PPT. GOT GOLD ?
<;-)

MARKET UPDATE (2/12/99): Gold jumped sharply this morning as the bond market cratered and hedge funds came into the market as buyers. Gold bumped up against the resistance level of $292 at one point today. Technical traders have said that if gold breaks through that barrier it could have a open field to the $298-300 mark. According to FWN, the rally began overseas with silver leading the way in Asian trading. Lawrence Eagles of GNI commented that "It's (Silver is) still reasonably firm. There's a lot of talk there are some longs in the options on COMEX who are going to declare their options and take futures positions from that. I think people are a little bit concerned the market will get squeezed up because of that." The action in the silver market could be a portent of what will happen with gold as the recent flurry of Y2K/Asian contagion related physical buying wends its way through the market.

Gold got a boost late yesterday when Belgian central bank governor, Alfonse Verplaetse stated categorically that "Belgium will not sell another 'pound' of gold." Belgium has disposed of a large portion of its central bank gold in recent years. Verplaetse comment echoes similar statements of other European central bankers who see gold as a strong component of the European Central Bank's reserve system. USAGOLD has staunchly maintained that European gold reserves are sacrosanct in the new euro economic system and that claims to the contrary are overstated and self-serving to a certain segment of the gold market that maintains large short gold positions. Verplaetse' strong, unequivocal statement leaves nothing to the imagination and would be difficult to spin in the opposite direction. Coming from a country previously dovish on gold and coupled with the pro-gold sentiments stated by central bankers in both France and Germany late last year, it hints at an underlying pan-European policy favorable to gold and potentially a dagger in the heart of the gold shorts who have dominated the gold trade in recent years and kept prices from rising.

That's it for today, fellow goldmeisters. We will update if anything interesting develops. It looks like it is going to be a very active day in the gold market.

MK - I know some time ago you posted what you are doing for a Y2K interruption of services, should it occur in your area. Would you post it again or post the number so I may refer to it?? (Your list of 'stuff' and what you obtained items.)

Everyone else, are you doing anything and are you willing to admit/share your list of supplies? (Your list of 'stuff' and what you obtained items.)

I believe we may have an interruption of some services in many areas and one should have some supplies. Since many of you may have already researched this and found what and where to obtain the supplies, that would save me a lot of time. (Maybe even some other here!)

If you're willing to share, please post. Thanks . . . Richard

[From the New York Fed report on 'Domestic Open Market Operations
during 1998.�]
The New York Fed said in its report on 'Domestic Open Market Operations
during 1998� it only bought coupon-bearing Treasuries in
1998 to avoid reducing liquidity in a Treasury bill sector affected by
scant issuance.

"The Desk refrained from making direct purchases of bills out of
concern that any reduction in the supply of bills available to the
public might diminish bill market liquidity further," the report said.

However, the Fed bought $3.6 billion in Treasury bills directly from
foreign central banks' accounts.
--------------------------------------------------------
[edited from London, Feb. 12 (Bloomberg)] -- A
cut in benchmark Japanese interest rates to a record low may not
be enough to reverse the rise in bond yields that threatens to
drag the economy deeper into recession, analysts said.

BOJ Governor Masaru Hayami said all of the bank's board
members oppose buying Japanese government bonds to bring yields
lower, a plan endorsed by some Japanese politicians. If yields
go unchecked, Japanese companies may bring home more of their
overseas earnings. Higher yields on domestic bonds coax Japanese
investors back into yen-denominated bonds.

Hayami also said he thinks long-term interest rates will
decline, but not necessarily because of the bank's action.

Hayami said before today's meeting that buying bonds in the
secondary market would hurt the central bank's fiscal health and
erode trust. The bank did say it will increase the amount of
government bonds it buys with its repurchase agreement.
"While this new initiative may suffice as a short-term
smoothing mechanism, it still fails to address the fundamental
problem which continues to beset the JGB market, namely far too
much supply and a lack of real buyers," said Michael Derks, the
chief bond strategist at Nomura International.

Silver lease rates skyrocket, now 7%?? I take it that means silver is going boinggg!

Gold now a whopping $291.60 on a Friday afternoon (do my eyes deceive me?)

Vote in Senate:

Art. 1 45 for, 55 against.
Art. 2 50 for, 50 against.

Acquitted.

Motion to Censure made now being discussed.

NASDAQ now -61, down over 3%.

Things are getting interesting.

The Message I posted, Msg ID:2331, 11/2/99 11:49:28MDT CONTAINS AN ERROR
for which I am extremely sorry.

I apologize to all family and friends of Ronald Reagan,

I should have specified George Bush
NOT Ronald Reagan, as the 33-rd Degree Mason.

My soul now has yet another BLACK spot on it
Steven Stuart

P.S. I also apologize to the Forum

Test

Amidst a busy day, I take pause to congratulate you on spotting that bond market "rhino"...Realization only one day after bringing it to our attention. Did Gandalf lend you his crystal ball, or were you relying on more earthly indicators? Good call!!

It is certain, that by the simple act of pointing this out, you have changed the course of the short-term future, and the bond market will firm. Maybe, maybe not. The destination remains the same however, whatever the actual path may be.

As for predictive powers--
"I predict you will announce a contest..."

In regard to Aragorns latest prediction, I would like to see contests limited to orginal creations of the posters, and possibly even a refrain from general forwarding during the period involved. The quantity of content is getting quite massive on those weekends.

I know I am only expressing the obvious, which is all I understand anyway, but here goes. Today, the long bond broke 5.4, the area where it stalled last fall. If all this talk of gold carry trades (borrow gold, sell gold, buy bonds)were true, then a break like this should have exposed some cards. Anybody caught using that strategy would likely want to close some of his position on a day like this, and BINGO, that appears to be exactly what happened. Is it possible that gold coming to life just as bond prices broke support is a coincidence? Maybe. But I think we are seeing the beginning of the end for these guys. If the rumored 3000 tons are anything like what really is at stake, we may be about to see some major capitulation in the days ahead. Lower bond prices and higher gold prices will hurt from both ends.
Before I started coming to USA Gold I had a strong conviction that reinflation was coming, but I had no idea what a gold carry trade was or that such significant short positions even existed. God Bless all of you guys and especially Michael K.

My Fellow Goldmeisters from far and wide.........

The financial winds blow from the four corners of earth, collide in a swirl at a single point and place in time, and settle to an eerie calm at the center of the storm -- this place we call the gold market; this place in which we find ourselves. There is nothing here but clear thought and a vision for the future. Let us make our amends and find solace in our golden thoughts, and exchange our courtly niceties now while we can.... for the contest is about to begin in earnest. Welcome all to this table round where we sit as equals in the pursuit of knowledge and elusive wisdom for it is here we hope to find truth. These are not the simplest of times; nor are they without danger for those who witness and understand the nature of the disturbances rotating around us..................

Consider this, my friends: Today the bond market signalled impending evil........and the mighty NASDAQ quaked....The news was of capital flight from the United States to the Land of the Rising Sun as bond investments are repatriated.. .....Meanwhile gold and silver lease rates have begun to rise and the commercial long postition in gold has grown exponentially in recent weeks both reflecting the strong physical demand we've discussed here before......The glittering yellow metal finished a promising $1.90 higher today amidst much optimism.....Even perrennial gold bear, William O�Neil of Merrill Lynch, said today "If it could move a little bit higher, you could get into an area where you'd see some of these heavy fund shorts start to cover. While it's hard to pinpoint just where this might happen, $293 might be a possibility. The higher it goes, the more vulnerable it is (to short covering)," the Merrill Lynch official said."

Is it my imagination or has the feel for things drastically changed in just the last few days?

So the contest is this:

To answer in a comely way (after all this is Valentine's Day) the following questions:

Have we reached the major turning point in gold we have waited for.... or this another false start?

Secondly, based on your analysis where will the price of gold end by Friday's close on the April Comex , February 19th, 1999?

Predicting the price alone is not enough. One must tell why in thirty words or more.

Whoever lands the closest gets the gold -- a handsome one-tenth ounce Austrian Philharmonic for the treasure chest. The best post in terms of style and substance gets three Silver Eagles. There will three runner's up who will get a single Silver Eagle -- seven coins in all, a lucky number indeed.

'Tis the sort of thing that would warm the good St. Valentine's noble heart. So who will be the Cupid that pierces the heart of this matter with his or her well aimed arrow?

Let the contest begin. The first to post a price claims it as his/her own. Please post your price somewhere in the title surrounded by ******'s, so all can see.

All first time posters will receive their choice of one of two books, either the ABCs of Gold Investing or In the Footsteps of Giants, free of charge. Just post and e mail us your choice and its out the door to you.

We will be monitoring the e mail for new registrants and will get an entry code to you as soon as we can.

Have fun, my fellow goldmeisters and may the best poster win.

Let me end with a piece of writing that somehow seems appropriate. Perhaps it is the day we celebrate. Perhaps its something else.....It comes from Mary Stewart's First Book in the Merlin Trilogy which is also the story of Arthur. It is one of my favorite passages in literature for what it portends:

"Throughout Arthur's long reign Merlin advised and helped him. When Merlin was an old man he fell dotingly in love with a young girl, Vivian, who persuaded him, as the price of her love, to teach her all his magic arts. When he had done so she cast a spell on him which left him bound and sleeping; some say in a cave near a grove of whitethorn trees, some say in tower of crystal, some say hidden only by the glory of the air around him. He will awake when King Arthur wakes, and come back in the hour of the country's need."

Happy Valentine's Day to This Table Round for Not All That Glitters Is Gold

Comments on the passage above will be considered toward the contest as well...

I posted then saw your concern. What do you mean by forwarding? And I agree it should a new thought created by the poster. Also, if the poster wishes to support his thesis with (short) documentation should that not only be allowed but encouraged? Please...more information... as I greatly respect your thinking in these and all matters.

Also, you can make as many entries as you wish for the silver prize but only one for the gold.

My wife and I were in a 13 car pile up on a nearby highway today. We were in my 83' 911SC Porsche -- before anybody thinks well "isn't he the well-to-do fellow, it cost well less then a 1996 SUV). We were getting close to our exit but just before gettiing there a white out caused a dump truck to go sideways. All we saw were lots of cars hittiing each other and blocking the road. I put my porsche breaks on full force but still headed right for the pile up. I took time to asses my options, removed my foot from the break and turned the wheel hard-over right. It took a long second for the tires to bite. I sighed relief. The car shot up the high embankment to the right and speed bled off rapidly. I caught site of a white car landing right next to my left rear fendor, but missed me. We heard bang--bang-bangbang-bang bang bang and bang. In total four injuries, two mild that were taken away in an ambulence.

We cleared traffic, directed traffic, I used my cell phone, loaning it out to fellow accident victims to call loved ones and companies. I used the ham radio to make calls too. I called the accident in and had someone find out where the police were. A sherrif on his way to an accident further south saw us and stopped but that wasn't for a half-hour after the accident. The ambulance came an hour later. I check the injured child. I saw it was cognizant and pupils small and responsive.

By the time the police, fire trucks, and ambulence came we had one-lane of traffic moving.

I asked some guys to help push my Porsche off the hill. I backed off to the shoulder. The car's right fog lamp is gone and there is a dent in the spoiler below it. The dash board in front of me seems slight upjarred but that is all I can see without somebody looking at my undercarriage. I have to file a report with PD tomorrow.

My wife is ok. She had to go during this whole time so when we finally drove off, I took her to a local car dealer. She made me look at a Beatle because she said is was safer. I said, "Yeah, but we maneuvered out of harms' way. And because we were so low to the ground we didn't turn over on the side of the hill."

In all a quiet day.

Steve


PS. While we were doing this Gold finished strong, silver is up and next week promises great things.

Glad you and yours are OK, Steve (including the Porsche). Never been in one of those. Don't want to be.

By forwarding, I meant passing on posts from other sites. I agree that ouside commentary can be germane to someone's thesis, but there have occasionaly been some monster size pass-throughs during the contest period when the volume of posts itself has been extensive.

Throughout most of history, Gold reigned supreme as the medium of exchange. Kings and ministers advised the wisdom of this policy which kept trade between men and nations to have true value. But as time wore on and monetary concepts aged, the men who controlled the finances of nations became enamored with a younger form of money. Receipts for storage of gold could themselves be traded for goods and services, and therefore paper alone could be used as a medium of exchange. Men came to believe this to be a form of financial magic where value could be created out of nothing and cast a spell upon the land by bringing forth this false wealth.

Gold was left bound and sleeping in the vaults of many nations' banks. Some said that loans of Gold were mere paper transactions and the metal itself remained in the vaulted caverns. Others claimed that the gold was in the possession of those who practiced their craft in the highest towers of the land, looking down upon their brethren through vast crystal portals. Still others held that most gold was created out of thin air and hidden by great secrecy, facilitated by the glory granted to these men by their peers.

Now, this false magic has failed and all the nations are approaching the hour of their greatest need. King Gold will now awaken and the prophecy will be fulfilled.

2nd paragraph, last line should read "and what remained, hidden by great secrecy"

****$303.50***

Steve, You need the thirty golden words !
<;-)

Hey guys, congratulate me, I passed my first Microsoft certification test. (Been in class all week and studying has been eating my time.) When I was driving to class this morning a song started brewing in my head. I don't know if I'll have time since I'll be studying to take some more tests tomorrow, but if I can piece it together I'll post it.

Definitely appropriate. A love song. An against the odds love song.

Speaking of contests, (What a segue, huh?) Michael, is there a time limit? Assumption is the lowest form of knowledge, but I assume that the contest will run till midnight Monday. (As *some people* get that day off- after New Year's I don't get a day off till MAY!!)

SteveH!!! Great to be alive, huh? That's how you know you are, when you're heart jumps out of your chest and starts pounding your ears. Don't forget to thank your guardian angel.

Gandalf! Cut the man some slack, he's still catching his breath!

GF

Volatility. That's the password. Gold needs to shake loose from the range it has been bound to. It's going to be awhile yet.

When things started happening in the PM's a couple of weeks ago, I didn't think much of it. The commodities were not keeping pace. After a couple of days EVERYTHING was going up. I began to pay attention. Then the late day dip on -what Wednesday...Thursday? It was obvious. I KNEW what was happening and why! The Nazguls�.uh�. I mean the Shorts were launching an attack!

Gold languished for a day or so but has been doing fairly well since. But look for more attacks. Gandalf has been giving a blow by blow description of the enemy's moves. (Come on Gandalf, do your best Howard Cosell!) Gold is not going to take off until it's well above 300. Say around 305. That's not going to be for weeks (months maybe). Gold may reach a local peak this week but profit taking and vertically-challenged sellers will drive it back down. Hence April gold at 294.90 on Friday, February 19.

Of course, ANYBODY, that uses my ideas as investment advice is absolutely INSANE.


(I know. Nobody would, but I was scaring myself.)

GF

Gandalf and Goldfly. Thanks.

Technically, look at www.the-privateer.com gold pages. See his gold commentary, look at the daily and weekly charts. See the lower and upper bollingers. Daily is Posit 2 with a GAP -- I say..I say a..gain -- A GAP. Try finding A GAP anywhere else on that miserable chart...not there, eh? Remember I opined before that gold travels in burst of four. Four up-days, four down days and so on. Four up weeks, four down weeks. You see it? Next, gold is tracking (trending up with, forcing the upper bollinger up at a healthy (30%) up angle) the upper bollinger. Given a four-day pattern with two down, gives two to go. Add a dash of volume, a dash of volatility, a dash of short covering, a strong burst likely in silver, mix it all up ... boooom -- $303.50. The weekly chart supports this because POSIT is 2 (should get 2 more weeks of upward piercing prices). Now if weekly gaps, which it should under this scenario ... boom -- $303.50.

Add this to the mix: long bonds rising $5.42. Bill Buckler tells us, "...Suffice it to say that every basis point rise in Treasury
bonds puts more pressure under the Gold price. We are getting close to a break in the
doldrums that Gold has suffered through for so long now. Unless there is a very
concerted effort to push Gold down, that break will be UP. Silver, and to a lesser extent
Platinum, have already shown the way."

So, all you below-three-hundress guessers, standby to eat your shorts (no pun intended -- not!).

If it was to be a normal five day week my guess as to price of gold would be higher but my pick
is....297.50 on close fri. 19 this is strictly a tech. guess as i feel we may see 310 by the
end of feb. The chart indicates a break out very soon. The question is can price advance
through the overhead resistance in four trading days.? I will stick to my guess at this point
but wont be surprised if higher levels are reached..

My Fellow Goldmeisters from far and wide.........

The financial winds blow from the four corners of earth, collide in a swirl at a single point and place in time, and settle to an
eerie calm at the center of the storm -- this place we call the gold market; this place in which we find ourselves. There is
nothing here but clear thought and a vision for the future. Let us make our amends and find solace in our golden thoughts, and
exchange our courtly niceties now while we can.... for the contest is about to begin in earnest. Welcome all to this table round
where we sit as equals in the pursuit of knowledge and elusive wisdom for it is here we hope to find truth. These are not the
simplest of times; nor are they without danger for those who witness and understand the nature of the disturbances rotating
around us..................

Consider this, my friends: Today the bond market signalled impending evil........and the mighty NASDAQ quaked....The
news was of capital flight from the United States to the Land of the Rising Sun as bond investments are repatriated..
.....Meanwhile gold and silver lease rates have begun to rise and the commercial long postition in gold has grown
exponentially in recent weeks both reflecting the strong physical demand we've discussed here before......The glittering
yellow metal finished a promising $1.90 higher today amidst much optimism.....Even perrennial gold bear, William O�Neil of
Merrill Lynch, said today "If it could move a little bit higher, you could get into an area where you'd see some of these heavy
fund shorts start to cover. While it's hard to pinpoint just where this might happen, $293 might be a possibility. The higher it
goes, the more vulnerable it is (to short covering)," the Merrill Lynch official said."

Is it my imagination or has the feel for things drastically changed in just the last few days?

So the contest is this:

To answer in a comely way (after all this is Valentine's Day) the following questions:

Have we reached the major turning point in gold we have waited for.... or this another false start?

Secondly, based on your analysis where will the price of gold end by Friday's close on the April Comex , February 19th,
1999?

Predicting the price alone is not enough. One must tell why in thirty words or more.

Whoever lands the closest gets the gold -- a handsome one-tenth ounce Austrian Philharmonic for the treasure chest. The best
post in terms of style and substance gets three Silver Eagles. There will three runner's up who will get a single Silver Eagle --
seven coins in all, a lucky number indeed.

'Tis the sort of thing that would warm the good St. Valentine's noble heart. So who will be the Cupid that pierces the heart of
this matter with his or her well aimed arrow?

Let the contest begin. The first to post a price claims it as his/her own. Please post your price somewhere in the title
surrounded by ******'s, so all can see.

All first time posters will receive their choice of one of two books, either the ABCs of Gold Investing or In the Footsteps of
Giants, free of charge. Just post and e mail us your choice and its out the door to you.

We will be monitoring the e mail for new registrants and will get an entry code to you as soon as we can.

Have fun, my fellow goldmeisters and may the best poster win.

Let me end with a piece of writing that somehow seems appropriate. Perhaps it is the day we celebrate. Perhaps its something
else.....It comes from Mary Stewart's First Book in the Merlin Trilogy which is also the story of Arthur. It is one of my
favorite passages in literature for what it portends:

"Throughout Arthur's long reign Merlin advised and helped him. When Merlin was an old man he fell dotingly in love with a
young girl, Vivian, who persuaded him, as the price of her love, to teach her all his magic arts. When he had done so she cast
a spell on him which left him bound and sleeping; some say in a cave near a grove of whitethorn trees, some say in tower of
crystal, some say hidden only by the glory of the air around him. He will awake when King Arthur wakes, and come back in
the hour of the country's need."

Happy Valentine's Day to This Table Round for Not All That Glitters Is Gold

Comments on the passage above will be considered toward the contest as well...

Because of the breakout in bonds yesterday, I think all of you guys are too low. It is only in the last 24 hours that the prevailing investment theme of 1998 (deflation) has been utterly discredited. In just 4 months the long bond has gained over sixty basis points in yield, yet, until yesterday, the crowd thought we were in a trading range. Until now, the popular misconception was that inflation had died and that, because of budget surpluses, we were about to experience, if anything, a shortage of bonds.

Why on earth would long rates be trekking higher when commodity prices are making record lows and much of the world is in recession? Because, in finance, money is everything, and we're creating tons of it.

It is precisely when the most firmly held beliefs of the majority are invalidated that contrarians make their money. Ladies and gentlemen, I submit: our time has come!

STEVE- I'd like to think I would be as good in a crisis as you are. Man, you just never know when you are about to be tested. I presume the injured child is okay and that everyone else is, too.

APR Au Futures contract (GC9J) Friday 2/19/99 Settlement
This procrastinated prognostication is based on the thoughts and hopes of the Hobbits. Some of them, (Hobbits) have been surfing the web and sneeking peaks at my crystal ball. Some of the younger Hobbits watch the web at WWW.securitytrader.com which is they say, one of those daytrading yuppie go-go technical services sites that promotes "hot stocks" and has "made a bundle of (paper) bucks" in the internet stocks bubble. They tell me that this candlestick chartist is finally been converted to a "Goldheart" within the last two weeks because of the actions shown in both the high flyers and the XAU charts. Whereas "he" still calls Gold "YELLOW JUNK" (all caps), "his" daily comments on Gold are now 100% BULLISH ! The Hobbits say that my crystal ball is now through the cloudy stage, [ as it has now seen Steve's 30 Golden Words, plus Goldfly's and T.R's comments ] and shows that by midweek the XAU chart action will penitrate through the intersection of the intersection of the former double top trigger line and the upper downtrending pennant line at XAU 68 and then move upward to intersect the 200 day moving average line at about XAU 70. This is where ALL the Orcs and Nazguls are massed to do major battle. This forthcoming battleground action shall be looked back upon as "the turning point" of the evil empire's bondage of KING Au! BUT as Goldfly pontificates, this battle may be of great duration, extended by the "big bucks" hedgers and "friends", whom have not yet seen the light forthcoming from the reflections of change of the guard and the rise of the Euro and the power oasis of the land of "sand and camels". THEREFORE $300 -----OK !!! STOP -- yell the Hobbits in unison. "That is far more than thirty words, and we want to hear the song from Goldfly !"
<;-)

Richard, Oregon: I have gone the canned food route myself because I'm preparing for a relatively short term disruption with intermittent blackouts and off and on glitches in goods and services distribution. My view is that the dried food route serves well for those envisioning a darker and more prolonged picture. Later today, since I have received reproduction permission from Richard Maybury of Early Warning and Chaostan fame, I will reprint at this FORUM his preparedness list. I will also reproduce part of the attendant article itself -- "Dealing with Y2K" -- which I consider to be an excellent call to action. The piece in its entirety will appear in the upcoming February issue of News & Views which promises to be another blockbuster.

Goldfly: Good to see you back. Congrats on the certification. Contest expires Monday, 2/15/99 at midnight --straight up.

Peter: Let's leave things the way they are for now. Something might come up that would benefit all and need posting. If we run into downloading problems, we will change the rules during contests.

The Stranger: Thank you for your kind words about this august FORUM. I awake each day with the hope of God's blessing and surely appreciate your request for the same.

Aragorn: You have amazing predictive powers, I see, even beyond the financial.

Y2K Stockpile Rationale and Table/List:
http://www.provide.net/~aelewis/gold/y2kstock.htm

you might also enjoy:
The Golden Bear (Investments):
http://www.provide.net/~aelewis/gold/goldbear.htm

As reported in London's "Evening Standard" the Bank of Japan (BoJ) has lowered the overnight call rate from 0.25% to 0.15% !!!! However, the BoJ's benchmark discount rate of 0.5% remains at the same level it has since 1995. The reduction in the overnight rate will encounage commercial banks to buy the Gov. Bonds that the BoJ steadfastly refuses to buy. Reaction in Britian was that the yield on the 10 year "Glit" jumped from 4.4% to 4.55% on Friday.
----
Anyone have the ability to open a commercial bank in Japan and get ready to borrow when the overnight discount rate reaches 0.00% (or less, like if BoJ pays you to borrow).
<;-)

Dear Richard,
When I first began learning about Y2K, approximately a year ago when most still knew nothing, I was so disturbed about it that I purchased a Beretta 9mm and learned how to use it (I come from a non-gun family). Doing this began to give me a sense of security in that I was preparing for, instead of ignoring, what MIGHT come down the road.

Likewise, I was very concerned about what might happen should there be a run on the banks the second half of 99, as people might begin to take the attitude of, "better safe than sorry" and replace the risk of losing their funds due to computer / utility break down with the risk of having to defend it from being forcibly taken by others. There was a sad article, recently, about a couple in Florida who took $20,000 (or $30,000 - can't remember the specific number) out of the bank and burried it in their back yard because they didn't want any one to break into their home and steal it. When they went back to their stash, someone else had already dug it up. Their life savings - gone. Very sad, but it demonstrates that other "ordinary citizens" are already thinking along these lines and acting on them.

Due to the education gained from this USA Gold site I have purchased "emergency currency / wealth insurance" in the form of junk silver coins and pre-1933 Gold coins. However, this is more a result of seeing 4 major problem areas, and attempting to prepare for them, not just Y2K.

Regarding freeze dried foods, my understanding is that there is currently a 3 to 6 month wait from manufacturers experiencing unprecedented demand. I have yet to put my own food / water supply in place, but I will. Considering that there might not be running water or much heat, I'll probably go with lots of ready to eat canned foods which are currently reedily available at grocery stores, as opposed to anything requiring heat or water to cook.

I've moved from a point in which I felt Y2K doom was inevitable to a point where I feel it is still possible but not likely (in the gravest, worse case scenerio sense). Regardless, I owe it to my family to prepare in the event that this man made disaster does wash across the US like that giant tidal wave in Deep Impact. I also intend to storehouse many, many gallons of gasoline since the test in Lubbok(sp), TX, identified their gas pumps ceased to work. Since each gas station is independently owned and operated, it's very possible that most gas stations could suffer the same symptoms for a period of time, before being corrected. I haven't heard anything about Mobil, Shell, etc. implementing Y2K testing / correcting throughout their franchises -- so I see this as a potentially VERY serious problem area.

I read in one post that some banks might cease cash withdrawls in April. Who really knows if this will come to pass. It makes sense, though, as it would prevent a major run on the banks from destroying the banking industry and consumer confidence. Whereas this could be seen as a move toward "the cashless society," it could also be viewed as a temporary solution with a reversal to cash after the crisis passes. The problem, of course, is -- what if there IS a problem with the banks computers or the utilities that power them, causing inaccessibility (or even elimination) of ones bank account due to Y2K? If the banks DO cease to allow cash withdrawls (instead, issuing everyone debit cards or making everyone write checks) one might be able to sell, say, $1,000 cash for $2,000 electronic cash, before Y2K comes to pass (and then use the electronic cash to pay off mortgages, credit cards, car loans, etc. OR to buy more food -- after all, you can't eat money OR precious metals, you can only TRADE with them, IF you can find someone to trade with).

With the record high levels of the stock market, the lack of consumer savings and the incredibly high rate of consumer debt, it's difficult not to conclude trouble is brewing (on WallStreetWeek Louis Rukeyser's guest speaker, a tech stock expert, was still telling investors it's a good time to buy on the dips). Likewise, the currency problems from around the globe, from Asia to Russia to Brazil, seem destined to shake up our US economy at some point (and infact, there have been over 300,000 layoffs anounced as a result of these problems). I expected more of a dramitic shot across the bow from the introduction of the Euro which, surprisingly, is still trying to assert its strength against the dollar. It could be that so many countries are "beholden" to the success of the US economy, they may be hesitent to make any moves that could cause us (and them) serious currency consequences. Y2K -- time will tell, but we better not party in 1999 -- we'd best all prepare since no one has a crystal ball.

To me, regardless of the above, precious metals is a great contrarian play. It's never been cheaper (especially factoring in inflation) and everyone (outside of us "gold bugs")loaths the idea of buying hard assets. A small shift in this opinion could cause a major shift in the financial tetonic plates.

Sincerely,
Critical Mass

I, too, was shocked to read those overnight rates! 0.15%?!! And this is for UNSECURED loans! It also illustrates that the Federal Reserve has room to lower interest rates here (should they deem it necessary to manipulate US prosperity) to levels we NEVER would have imagined possible.
--CM

"Food & Water"
"Gasoline"
"Firewood or campstove fuel"
"Non-electric blankets"
"Medications & first aid items"
"Cash (small bills) to cover all living expenses
for 3 to 6 months"
"Books, games, other non-electric entertainment"
"Candles, lantern, fuel, flashlight batteries"
"Soap, toilet paper, Kleenex, detergent, toothpaste"
"If you have pets, food"
"Good walking shoes"
"Radio and radio batteries"
"Warm clothing"
"Paper and Pencils to keep diary of you adventures, which we hope you have few"

Encourage friends to prepare. By 12/31 have all your clothing washed and dried, your vehicles filled with gas and your bathtub full of water.

Extended Precautions
Electric generator & large fuel tank; Water purification device; Shotgun and ammunition; Small gold and silver coins; Cash, food and medications for a year; Large tank of gasoline; armored vehicle with rocket launcher.

USAGOLD: I realize that in some cases these are broad categories. They are offered as a starting point. Perhaps other here can comment and help fill in the blanks.

Y2K is only 12 months away and no one knows what it will bring. This is the only problem I have even seen that does not clear up with research. For reasons explained in the previous Early Warning Report, people who have their Y2K problems fixed are unlikely to say so, unless they have a financial death wish, so reliable evidence of Y2K repairs is scarce. Sometimes I feel I know less about Y2K now than when I first began studying it years ago.

I am sure it will not be the end of civilization. My best guess is that the first month or two of next year will be packed with surprise disruptions of food supplies, water, power, telephones, you name it. The disruptions will taper off as the year progresses, and will be mostly gone by summer, but these first months could be troublesome, especially if you have the bad luck to live in an area with harsh weather and frequent disruptions of services.

Difficulties will not be uniform across the country. Some areas will get off scot-free, others will have many disruptions but tapering off rapidly, and others people will think the problems will never end. So it is wise to be ready to rough it for a minimum of three months, maybe more. In November, when Chase Manhat-tan boosted its estimate of its Y2K repair expenses, it set them at $363 million over three years. Yes, three years. This is not to say we will be in turmoil for three years, but occasional random breakdowns are likely fro a long time.

Also highly likely is an oil war. Y2K disruptions in the US armed forces will give Iraq and Iran a golden opportunity to take back the Persian Gulf. Most of these regimes� weapons were acquired in the 1970s and 1990s, they were either too old to have computerization or too new to have the Y2K problem. Most of America's were acquired in the 1980s during the Reagan buildup when computerization became prolific but no one was paying attention to Y2K. If I am right, the war will be great for oil investors.

The forecast I am most confident about is a recession and stock market crash this year, because I think every prudent manager will shut down his operation on or before December 31, then gradually restart and reconnect on January 1, testing each link as he goes. This process of restarting, reconnecting and testing will take weeks and will cut production, sales and profits -- a recession.

Financial markets look to the future, so I think they will factor this coming Y2K recession into prices of stocks, and the market will plunge sometime this year. The leading optimist about Y2K is Harry Browne, who says Y2K will not cause much of anything. I hope he is right. As explained last month, the prudent approach is to hope for the best and prepare for the worst that has a reasonable chance of happening, meaning at least three months of unpredictable blunders and breakdowns.

Reprinted with permission. Further reproduction expressly forbidden.

USAGOLD: This is part of more complete article published in News & Views: Forecasts, Commentary & Analysis on the Economy and Precious Metals

Our thanks to
Richard Maybury's U.S. and World Early Warning Report/P.O. Box 84908/Phoenix, AZ 85701/800-509-5400/ $149/year.

One of the better strategic newsletters particularly for concerned with problems in the Gulf region, the Balkans, etc.

Gary North's Y2K Links and Forums

Summary and Comments
(feel free to mail this page)

------------------------------------------------------------------------
Category:� Banking
Date:� 1999-02-12 18:05:11
Subject:� Art Bell and the Gold Rush of '99
Comment:� Because of the significance of this posting, I will not be posting anything else until Monday afternoon. I do not want any visitor to skip over this posting. I do not want anyone writing me some version of this letter: "Why didn't you warn us? We have been followers of this site for two years. Etc."
Art Bell has 8 million listeners. I have been on his show three times in the last seven months. I will be on again on Friday/Saturday, Feb. 19/20.
Let's go through some statistics. In fiscal 1998 (ended Sept. 30), the U.S. Mint sold just over one million ounces of gold coins. There was a y2k-driven escalation in 1998, as I have reported before. In January, 1999, the Mint sold 268,000 ounces.
About 83% of these were one-ounce American eagles. Americans are allowed to put American gold eagles in their retirement programs, and the one-ounce coin has the lowest commission. That's the coin of choice for retirement programs.
The tenth-ounce coins are best for survival conditions: more transactions per ounce. The Mint's output of these coins was in the 8% range.
Maxed out, the Mint can produce a less than 4 million ounces of gold coins a year -- more like 3.2 million. This assumes that the Mint can do 12 consecutive runs as large as January's, which may be too optimistic. The Mint started rationing coins on February 3.
Art Bell has 8 million listeners. If 40% of them were to buy a single one-ounce coin, that would absorb the entire year's output of all U.S. gold coins. If 20% of them bought two coins, the same thing would happen. But they can't. The Mint is already maxed out. It's rationing coins. It could not absorb another 3 million buyers. (This is hypothetical; the 100 or fewer coins stores could not absorb 3 million additional orders of one ounce each.)
But what about the tenth-ounce coins? They are sold in units of 50 coins: 5 ounces each. If 8% of the coins produced by the Mint are tenth-ounce coins, then there will be 260,000 ounces minted in 1999. That would be fewer than 55,000 5-ounce tubes. Therefore, if 1% of Art Bell's audience were to buy just one tube, they would absorb far more than the entire year's output. But they can't do this; the Mint is already maxed out.
Today, if you want small coins, and you don't want to wait several weeks for eagles, try the tenth-ounce Canadian maple leaf. It may be available for another week. Maybe two. But these coins are pure gold. They are soft, as gold is. They aren't ideal for use as an actual currency unit. The American coins are, being 90% gold, with 10% copper for hardness.
Next Saturday morning -- early -- I will tell 8 million people to buy tenth-ounce gold coins as soon as they can. I will tell them it's first come-first served. I will tell them if they continue to sit around talking about what they will do next December, they will be out of the competition by April. They cannot buy the coins right now, let alone next December. They must get on a waiting list today. That's what rationing means.
Will 1% of them believe me?
Next Saturday morning.
A word to the wise is sufficient.
Will 1% of you believe me?
(I can hear it now. "Gee, Mabel, what do you suppose Dr. North means? I wish he weren't so subtle.")

------------------------------------------------------------------------
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Everytime Gary North goes on Art Bell the phone's start ringing with requests for one-tenth ounce gold coins. As it is now, our top clearing house will take orders for one-tenth ounce US Eagles at a reasonable price but delivery is over two months out. We can get the Austrian Philharmonics and Maple Leafs in one tenth oz. with no problem and the price is still under $35 per coin. The quarter ounce USE are not a problem...as of Friday.

I heard from a good source that one major clearinghouse is attempting to "corner the market" on one tenth USE and driving the premiums through the roof. That is why the price is going up. Be careful. You do not have to buy US Eagles to hedge Y2K. I will explain later when I have time. I want to cover the major points in this post.

Availability for the small denomination pre-1933 European gold coins (which are a favorite among investors expecting not just to use their small gold coins for Y2K but other potential disruptions down the road associated with dollar debasement, the euro, Asian contagion in America, etc. AND hedge the possibility of a future confiscation) is hit and miss depending on the day you are in the market. I am concerned about availability in the future because of the obvious problem: They are not making any more of them. The demand for these items remains consistent and strong no matter what the gold price is doing!

Gary North is correct that as time goes by people could panic in their search for gold. Right now the typical Y2K hedger is buying enough to be used in "barter" situations. Wait until later in the year when people start thinking about using gold to hedge substantial assets against potential bank computer lock-up. Then it will be a madhouse.

High net worth individuals who have already converted substantial assets to gold or are preparing to are way ahead of the curve. These people are particularly concerned about problems down the road getting reasonably priced pre-1933 gold coins in the wake of Y2K so they are acting now. I expect premiums to bolt higher soon without warning.

All incentives are to act now while you can and this is not hyperbole. Most people do not understand how thin and small the gold market really is.

More on this later. I have to go to a fund raiser tonight, so I'll be out of touch until later.

Thanks to AEL for the 'Stockpiling' web connection. While I haven't devoured it yet, there's lots to glean and it looks like a starting point.

Critical Mass - Thanks for your insite. I'm with you . . this is certainly a place to learn and I too believe some measure of preparation for my family is necessary. I hear here in Oregon many reports of readiness are under way. A friend has a family member who owns acreage in the forest. There's not a week that goes by that they don't get a request from someone wishing to squat on it this coming winter. Another report I heard was from an outfit that sells manufactured homes. They're selling 3 a week now to people that want to locate them in the forest to hind from the would be robbers, etc.

I believe some for of preparation is necessary for everyone. I believe there will be an interruption of services in most areas of the country/world. I believe setting up a stockpile of what you would 'normally buy anyhow' is wise. For myself that means a calf grazing/growing in the pasture and extra gas for the 3500w generator I already have for my business. Extra can goods on the shelf and the freezer topped off. Extra ammo for that pistol I bought years ago to carry and maybe a hunting shotgun/rifle. Most often nothing really new, just a little extra supply, just in case. We already have a stonemill and a water distiller, so what's to buy other than supplies we'd use anyhow. I still need to research the site AEL gave me but most is commond sense and not new. Your thoughts!!

Please excuse the few typo's in my last post. You read and read, again and again, and after you hit that POST button and see it on the screen, all the typo's jump at you and smack you in the face.

Anyhow, I wanted to relate my pocket change experience this week. I own my own business and for the last 4 1/2 years when a customer paid with Susan B's($1.00 coins) I'd buy them from my till and deposit them in a little Mexican piggie bank I bought in July '94. I've been forcing them in for sometime so this week I decided to smack the pig and count my blessings. Well, $312 and when I emptied my "dialy use" pocket change jar, I had more than enough to buy 4 1/4oz double eagles with a good start the my next ounce. An extra ounce a year fends off the fear. . . . of being broke and having to do with out. Excuse my terrible lack of poetic wit.

Another Thought. . .
I really enjoy the wisdom and knowledge MK has encouraged at this post. There's a verse, I haven't been able to find it, that says something like 'the people perished for lack of knowledge'. That's why I'm here. . to learn and increase my knowledge. Thank you MK and everyone who participates with sharing thoughts from their area of expertise/interest/knowledge. We ALL benefit!

I found some 'Sterling Silver Proofs' of US presidents that I purchased back in 1970. Don't ask me why, it must of seemed like a good idea at the time. Well, it says they are 39mm standard "400-grain sterling silver proofs". What does this mean? Ounces? Are they of any value beyond their silver content? Does anyone know how you would sell something like these proofs? Just thought someone out there would know more about this topic than myself.

An Insurance Broker/Consultant that I associate with in my work shared a recent experience he had trying to get cash out of a bank. This is someone who is fairly well to do financially and someone I would suspect a Bank would deem a valued customer. He also had no clue regarding banking regulations and rules in terms of taking out cash.

He was negotiating to buy an acre of land and the owner of the land said he would give him a better price if he could get $10,000 of the amount in cash. My friend goes to the bank and asks to withdraw $10,000. He said he had more than that in the account and didn't think it would be any problem getting it out. He said the reaction was about the same as if he had a gun. Several people from the bank immediately came over and started asking him questions. What do you want it for? Why don't you write a check? I thought you wife did the banking, why isn't she here? And many others. He said they made him feel like a criminal being cross examined. In the end he said the paperwork was more than he wanted to deal with and ended up getting a cashiers check.

I told him he was fortunate one of the tellers didn't turn him in for suspicion as a drug dealer hoping to get a reward. The whole experience alarmed him to the extent that he said he was going to start keeping some cash on hand and begin taking out a little at a time so as not to draw attention to himself. I suggested to him that he acquire a few gold and silver coins to keep on hand as well.

Martin Armstrong continues to post urgent warnings against the ownership of precious metals. As usual, his arguments are filled with illogic and incorrect analysis, if not simple outright lies. Whenever I read this intellectual poseur, then as a proud Ivy League graduate, I feel he is demeaning the name of "Princeton." In fact, I intend to mail a copy of his latest analysis to Princeton University and get it to initiate legal proceedings that will result in a "cease and desist" order precluding Martin from using its illustrious name. I have no doubt the school would be embarassed having its name attached to his semi-literate newsletter that utilizes such elementary school level logic and incessant venom.
------------------------------------------

Martin says...

While there are a lot of people running around with tinfoil on their heads yelling about how society will crumble and the human race will be forced back into the stone age of barter, there remains one glaring issue that is seriously overlooked. No matter what you have read about the Y2K bug, the US remains the most compliant of any nation on earth. Canada and UK are right at the top of the list as well, while Japan is perhaps far ahead of Europe. Nonetheless, when it comes to the question of banking, no one even comes close to the preparedness of the US banking system.
----------

Farfel Says...

Very interesting, Martin.

Why is it that people that warn against the perils of the Y2K bug are described by you as "people with tinfoil upon their heads." You decry the hate mail people send you, yet you describe Y2K pragmatists in hateful, slanderous terms.

Why the double standard? Why not describe all the Wall Street Bull analysts in such derogatory terms? After all, they are forever running around like lunatics, warning of the dangers of NOT being invested in the stock market, suggesting that any failure to do so will lead to impoverishment. Why are they NOT the "people with tinfoil on their heads?"

Furthermore, are we really to presume that, America, one of the few First World nations that has FAILED to adopt the METRIC SYSTEM, is somehow far ahead of the rest of the world in the area of Y2K preparation? Martin, if America is still unable to convert the English Measuring System to the Metric System many decades after announcing future plans to do so, then it takes a HUGE leap of logic to assume that the American infrastructure is now Y2K compliant. Just to get some perspective on this issue...Canada has now been on the Metric system for over 20 years!!! WHy has the USA failed to convert? I'll provide you the answer: because the US government feels the task is too costly and too overwhelming for a nation this size possessing such an enormous maleducated populace. By extrapolation, one can only presume that the USA is no better able to handle the enormous Y2K debugging task in time for 2000 than to convert to Metric.
---------------------------------------
Martin says...

Both the Fedwire and CHIPS systems that are critical to the central clearing between banks in the United States have been tested and are ready to meet Y2K. Some people have been trying to twist these words by emphasizing that the Federal Reserve has warned that it cannot guarantee that international clearing systems outside the United States are in fact prepared. Such distortions of testimony on this issue concerning the banking system has been relentless. The
fact remains that there may indeed be isolated disruptions among some small banks with antiquated ATM machines, but any serious disruption in banking will take place on an international level rather than domestically from the United States perspective. After reviewing this issue carefully, the evidence is clear that the safest place for capital will be within the US banking and market systems compared to those outside the United States. It would be advisable to hold off on any wire transfers at yearend that are destined for overseas markets. This means that as this issue is discussed in more detail internationally, the safe haven for capital would appear to be the same net reaction that occurs during periods of war - a flight of capital to the US dollar.
------------

Farfel Says...

Martin, the main reason Americans should hold precious metals has to do with the fact that foreigners, who supply the majority of American import needs today, may decide to reject the US Dollar as a form of payment for their imports during some kind of world crisis during which the US Dollar falls into disrepute. So long as precious metals retain importance to America's various vital trading partners, then it is imperative AMerica and its citizens hold them.

For example, in the event of a resurgence of Cold War, then the US DOllar may be repudiated by the country in conflict with AMerica. If said country insists upon a "neutral currency" for handling commerce, then precious metals likely will serve as a de facto neutral currency during such crisis.

Even if the AMerican government attempts to compel domestic Dollar usage during such a crisis, it goes without saying that any smart AMerican will keep a store of precious metals which might prove to be the real value items...should vital foreigners reject Dollar usage. Yes, it's true that the US government can compel dollar usage in daily activity, but it cannot necessarily compel "dollar value." That value may be determined someday soley by the value ascribed to it by vital foreign trading partners.

Finally, since we live in such an interdependent world, it goes without saying that, if non-American international banking wire systems are Y2K faulty, then this a bad thing for America. Martin seems to think that AMerica is a self-sufficient island unto itself...but America, being the huge debtor nation it is, counts upon orderly wire inflows of funds to service its astronomical debt. If foreign countries are NOT Y2K compliant, then these foreign inflows will be endangered and America will surely be in trouble.
-----------------------------------------
Martin Says...

While there are many who have been attempting to scare people into buying gold, hoarding silver bars or buying a log cabin far from the bands of lawless subhuman thugs, it is complete nonsense to purport that civilization will end come January 1st, 2000. Hoarding gold or silver coin will not help when it comes to paying your mortgage. Neither gold nor silver will be acceptable among the normal
business participants within the economy - including the taxman. There would be no way a supermarket would accept gold coins without having any knowledge as to their authenticity. After all, they have special pens to test $50 bills. People over 45 might remember a silver coin but you need to be over 80 to recall the last time a gold coin was in circulation. General commerce would not have a clue if they were receiving the real thing or a counterfeit. And as for platinum, well the average person can't distinguish this metals from polished nickel.
--------------------

Farfel Says....

At times, Martin sounds like the ultimate Luddite he so fondly disparages. He constantly expresses denigration of precious metals in categorical terms, attaching a simple-minded linearity of logic in his analyses. He does not allow for the notion that the current form of societal commerce could change overnight during a crisis. He thinks that only village idiots who wish to live in "log cabins" fear the bug...yet polls indicate a large number of Yuppie computer programmers as the source of much societal anxiety about Y2K. He seems to feel that US DOllar usage MUST continue domestically because "they have special pens to test $50 bills at supermarkets" --- as though those pens could not be thrown out overnight, replaced by a new appropriate testing mechanism for precious metals?? He notes further that only older generations are familiar with PM coinage and not the more relevant younger people -- as though somehow it would be impossible to educate younger generations in the usage of such coinage. If the young generation can learn how to use the Internet overnight, it would not be a great leap for them to figure out how to use metal coinage.
-------------------

Martin Says...

We must understand the Y2K issue from a practical perspective not merely for surviving the worst case scenario, but how to profit from it on an investment perspective. The vast majority of society will not have a problem with Y2K since they are using Y2K compliant PC based systems. The majority of any problems will be restricted to government and manufacture that makes significant use of
embedded chip technology. This means that if there are disruptions, they should occur on the supply-side of the economy. Shortages in goods typically do not produce recessions, but rather sustained periods of inflation. The oil shortage due to OPEC embargoes of the 1970s resulted in a lot of inconveniences. When gasoline was rationed at $2 per day in purchases, I personally could get to work, but I would never have made it home. I was forced to dash out and buy a Ford Pinto station wagon with a 4-cylinder engine, 4 speed and there wasn't even a radio. The price I had to pay was 10% over the sticker price and I actually got the last one only because I knew someone in the business. Prices soared and people began to hoard all sorts of commodities including toilet paper because of false rumors of shortages. I lived through the 1970s and heard the same nonsense about the world coming to an end. Guess what, gold fell from $200 to $100 between 1974 and 1976. The second oil shock had little or no impact upon gold going into 1980. Gold rallied because the huge price increases of the previous cycle set off a supply/demand led style inflation that was quickly followed by a demand/supply led inflation. In other words, there was a hoarding panic and people lost confidence in the purchasing power of the dollar, mark, yen, franc and sterling - just to mention a few. Gold then rallied into 1980 reaching $450 by December 1979 finally almost doubling during the final 6 weeks into January 1st, 1980. After reaching $875 on Monday morning of the 21st, by Friday January 25th, 1980, gold had fallen to close at $630.
---------------------

Farfel says...

Precious metals advocates are NOT saying the world is coming to an end. They are simply predicting a chaos in the global economy and commerce. During such chaos (hopefully short-lived), precious metals will likely be repositories of value, UNTIL A NEW VIABLE RECONSTRUCTED COMMERCIAL SYSTEM IS RE-ESTABLISHED. It may be a matter of months, it may be a couple of years. However, most PM advocates are NOT suggesting any end of the world scenarios. Instead, PM haters such as Armstrong are the ones spreading such malicious defamation in attempts to portray hard money advocates as a bunch of doomsaying psychotics, rather than the level-headed pragmatists they really are.
-----------------
Martin Says...

By now, our usual hard metals critics are rushing off to send us the usual hate mail whenever we speak ill of silver in particular. Nevertheless, while the metals guys are trying to scare the hell out of everyone in hopes of creating a bull market again, they had better think of the consequences of their actions. If everyone panics and buys metals in fear of a total banking collapse and it doesn't happen, will they then create a new overhang of sellers that will perpetuate the bear market into 2002 or beyond?
-------------------

Farfel Says...

Martin accuses PM advocates of scare tactics and hatemongering. Yet, he is the ULTIMATE purveyor of such negative methods. He drips hate in every description he writes of PM Bulls (as I have described earlier)...and he constantly warns people considering PM investment that PM's could collapse at any moment (as they did back in 1980). Forget the fact that for many months back then, PM's soared in value and good investment timers were able to make a huge fortune. He warns investors that if they are not ensconced in US Dollar investments, essentially, they will lose their shirts. So, tell me, who uses the scare tactics?

Reading Martin, there is little doubt that his malice toward PM's probably stems from past losses he must have suffered...probably one of the poor dimbulbs who bought gold at $800 back in the Eighties. No doubt he and his clients hold tremendous short positions in PM's and they will utilize every strategy to try and "talk" PM's down in value...or otherwise face disastrous losses in their portfolios, if not outright bankruptcy. Unfortunately, all the jawboning in the world may prove ineffective in the GRAND PM BULL YEAR of '99!
-------------
(I hope to continue exposing Martin's incessant lies and illogic sometime tomorrow, IF time permits, after I return from Dinner with the wife)

Dear Richard,
One suggestion regarding liquidating your Presidential Medalions is that you first get an idea of what your medalions are worth -- then sign up with the computer aution company, eBay. If you have a scanner you can scan images of the coins and post an auction (images are very helpful so people who want to participate in your auction fully understand what you're offering; if you don't have a scanner, you should get one -- they're very cheap right now; ie: $49 - $149 for a decent machine (thank you deflationary pressures from Asia - for now)).

MK: Thanks for posting the general categories for Y2K preparedness. It's nice to have something so well organized -- essentially a shopping list. I printed it out and will use it as a check list as time progresses.

RE:Art Bell -- I have to admit I am one of the few people who has not heard his show, but I WILL tune in next Friday and Saturday. Thanks for the heads up. This interview could certainly start the running of the gold bulls. MK, you had a little Nostradomis (sp) article in one of your newsletters suggesting March / April could be when gold begins to skyrocket. While this prediction was presented with lots of trepidation and read with a grain of salt (or two) it's always fun to read predictions, especially when one can see "parallels" in ones own. If nothing else, seeing what does or doesn't happen in the near future will certainly break up the monotiny (sp) between now and Jan 1, 2000.

MK: How about a spell checker on this site? And the ability to copy and paste? It would sure make me look a lot smarter! :)

To "Lurkers": Please be encouraged to leave a post. Those posting on this site have a history of being both polite and helpful. It's always nice to hear from new people. Plus you'll be able to resign your "lurker" status which has a certain, unpleasant ring to it, doesn't it? We all look forward to hearing from you soon.

Sincerely,
Critical Mass

Scarry. I had my savings account with a credit union for a while, which would only allow cash withdrawls of up to $1,000 directly from their branch. To withdraw more than that, one had to take a cashiers check to a bank that performed this function for them.

I would expect one should have no problems withdrawing their money provided they give the bank enough advance notice to assemble it (and you go armed or with a body guard in the event a preditor gets wind of your intentions). Those of us who are not drug dealers have nothing to worry about. It's our money and we have a right to it.

-- CM

Many of those who believe "nothing bad COULD EVER happen" to the US economy seem to have gone through numerous "doomsday scares" before. This includes my father who used to own a rare coins/ precious metals company. He absolutely refuses to purchase ANY hard assets but is respectful of my personal decisions. They remember the panic with none of the negative consequences they prepared for ever happening. They seem to think that "because nothing happened before, nothing can happen now." They are almost as trained to believe that nothing bad can happen within the US economy as mom and pop investors have been trained to buy on the dips. Who knows. Maybe they are right and in 10 months we'll all be wishing we had put our money in mutual funds!But we see a different scenerio unfolding.

Most of us probably haven't lost money in precious metals before (and certainly none of us have short positions to protect by spreading anti precious metals propaganda). We may well represent outsiders who are able to look beyond the paradigm that "precious metals can't increase in dollar price" to see a serious paradigm shift in precious metals about to occur, for numerous reasons touched on in many of todays posts. We all have to make the decions in life that we are comfortable with and then live with them. If precious metals go lower, and premiums don't increase on the pre-1933 gold coins, I'll probably buy more. I personally believe prices will probably never be this low again.

It's good that you pointed out why Martin's arguements are ill founded as many newer "Lurkers" (the ones we're still waiting to hear from :) will benefit from your post and posters like myself will remember to take our tin hats off when we go into public. :)

Sorry I've been such a presence today -- I have the flu and sitting in front of the computer is one of the few non-energetic, interesting things I can do this weekend.

Sincerely,
:) Critical Mass

Indications of a bottom for gold.

1. Three declines to a triple bottom, the last lacking momentum. (October, 1997; April, 1998; October, 1998). To confirm, a rise above the April high.

2. 30-yr Treasuries and the Dollar indicated tops in August, 1998, and have been trending down since. The downward trend of 30-yr Treasuries was confirmed (or close to it) last week. This correlates with the upward trend in gold.

3. The majority of common stocks have been falling since April, 1998. This decline has continued in 1999, supported by decreasing profits, suggesting more to come. This should support the demand for gold as a store of value.

Prediction for February 19th: 293.6.

I chose this, because I think if gold crosses 293.7, it may go to 310-320, quickly; and come back down to test 293, before continuing to rise. This might occur in March.

. Folly, Frenzy and Fear, those Careless are
The fates that mould our destinies, and shape
The grave dishonesties, deceits, that mar
Our work, our very loves, our art
Stir the dark anxieties, the mortal pains
The dark and deadly pride that stains
The living dying heart.

Only that man,
Who steadfast stands apart
And cries his manhood, cries aloud - I AM
Will be free of such dire fates
Only thus be saved,
Be his own man.

USAGOLD (2/13/99; 09:36:30MDT - Msg ID:2373)
Hear Ye...Hear Ye....A Contest is called.............
My Fellow Goldmeisters from far and wide.........

The financial winds blow from the four corners of earth, collide in a swirl at a single point and place in time, and settle to an
eerie calm at the center of the storm -- this place we call the gold market; this place in which we find ourselves. There is
nothing here but clear thought and a vision for the future. Let us make our amends and find solace in our golden thoughts,
and
exchange our courtly niceties now while we can.... for the contest is about to begin in earnest. Welcome all to this table
round
where we sit as equals in the pursuit of knowledge and elusive wisdom for it is here we hope to find truth. These are not the
simplest of times; nor are they without danger for those who witness and understand the nature of the disturbances rotating
around us..................

Consider this, my friends: Today the bond market signalled impending evil........and the mighty NASDAQ quaked....The
news was of capital flight from the United States to the Land of the Rising Sun as bond investments are repatriated..
.....Meanwhile gold and silver lease rates have begun to rise and the commercial long postition in gold has grown
exponentially in recent weeks both reflecting the strong physical demand we've discussed here before......The glittering
yellow metal finished a promising $1.90 higher today amidst much optimism.....Even perrennial gold bear, William O�Neil
of
Merrill Lynch, said today "If it could move a little bit higher, you could get into an area where you'd see some of these heavy
fund shorts start to cover. While it's hard to pinpoint just where this might happen, $293 might be a possibility. The higher it
goes, the more vulnerable it is (to short covering)," the Merrill Lynch official said."

Is it my imagination or has the feel for things drastically changed in just the last few days?

So the contest is this:

To answer in a comely way (after all this is Valentine's Day) the following questions:

Have we reached the major turning point in gold we have waited for.... or this another false start?

Secondly, based on your analysis where will the price of gold end by Friday's close on the April Comex , February 19th,
1999?

Predicting the price alone is not enough. One must tell why in thirty words or more.

Whoever lands the closest gets the gold -- a handsome one-tenth ounce Austrian Philharmonic for the treasure chest. The best
post in terms of style and substance gets three Silver Eagles. There will three runner's up who will get a single Silver Eagle
--
seven coins in all, a lucky number indeed.

'Tis the sort of thing that would warm the good St. Valentine's noble heart. So who will be the Cupid that pierces the heart
of
this matter with his or her well aimed arrow?

Let the contest begin. The first to post a price claims it as his/her own. Please post your price somewhere in the title
surrounded by ******'s, so all can see.

All first time posters will receive their choice of one of two books, either the ABCs of Gold Investing or In the Footsteps of
Giants, free of charge. Just post and e mail us your choice and its out the door to you.

We will be monitoring the e mail for new registrants and will get an entry code to you as soon as we can.

Have fun, my fellow goldmeisters and may the best poster win.

Let me end with a piece of writing that somehow seems appropriate. Perhaps it is the day we celebrate. Perhaps its
something
else.....It comes from Mary Stewart's First Book in the Merlin Trilogy which is also the story of Arthur. It is one of my
favorite passages in literature for what it portends:

"Throughout Arthur's long reign Merlin advised and helped him. When Merlin was an old man he fell dotingly in love with a
young girl, Vivian, who persuaded him, as the price of her love, to teach her all his magic arts. When he had done so she
cast
a spell on him which left him bound and sleeping; some say in a cave near a grove of whitethorn trees, some say in tower of
crystal, some say hidden only by the glory of the air around him. He will awake when King Arthur wakes, and come back in
the hour of the country's need."

Happy Valentine's Day to This Table Round for Not All That Glitters Is Gold

Comments on the passage above will be considered toward the contest as well...

You can make as many entries as you want for the silver but only for the gold.

Contest ends Monday, February 15 at Midnight.

I don't know if you are aware of this but Armstrong was written up by one of the wire services -- I believe it was Reuters -- as one of the hedge funds having LTCM syle problems related to its silver position. Armstrong, if the article was correct, is short the silver market and, judging from his rhetoric, probably gold too. As we all know silver has been on a steep incline of late and physical gold demand is skyrocketing. Armstrong in response takes the tone of a desperate fund manager to the public venue. Perhaps he should under the circumstances.

Knowing the facts behind the Armstrong rhetoric explains the urgency of his tone and why he has resorted to personal attacks on gold advocates and owners. In the past he has been a good indicator as to the level of pain being shouldered by the shorts. The shrillness of this latest outburst signals pain deeper still.

What Armstrong is beginning to understand is that 99 out of 100 people who buy gold these days are more interested in it as currency insurance than a profit generator (as Alan Abelson of Barron's pointed out in his column this weekend). That's a frightening thought to somebody like Armstrong because it implies a strong foundation to the market built on fundamentals not a trading mind set vulnerable to his brand of persuasion. In other words, the yellow is going into strong hands, not weak hands, where it will not be easily pried loose. The realization that he has been barking up the wrong tree these past six months has reduced Armstrong, as we see, to a frustrated rhetorician who can't get the market to do what he wants it to do. If I remember right, in some of his writings, he has even tried to paint Warren Buffett as a shaky silver trader who is likely to unload on a moments notice when anybody who knows anything about Buffett's investing style knows that nothing could be further from the truth. (Warren Buffett's father was an advocate of the gold standard and a Congressman from Nebraska.) As a result of this discomfiture, he has resorted to the oldest of polemic tricks: When you can't attack the argument, attack its advocate.

Bravo, Farfel. I look forward to your next installment. I offer this though it appears to me you do not need much help.

Like minds think alike again. From my "to be posted" notes earlier this week. "Gold will be in demand when people buy it to prevent loss rather than to acquire gain. But when that occurs, the gain will be there anyhow, due to the magnitude of the occasion precipitating that trend.

Right on...What people do about Y2K is their own business. Who would want to be responsible for telling someone not to prepare, especially when the cost of doing so is not burdensome, and then have to answer to those people if there actually was a problem? The awesome silence from Washington with respect to Y2K is telling in that regard.

Indications of a bottom for gold.

1. Three declines to a triple bottom, the last lacking momentum. (October, 1997; April, 1998; October, 1998). To confirm the uptrend, a rise above the April high would be definitive.

2. 30-yr Treasuries and the Dollar indicated tops in August, 1998, and have been trending down since. The downward trend of 30-yr Treasuries was confirmed (or close to it) last week. This correlates with the upward trend in gold.

3. The majority of common stocks have been falling since April, 1998. This decline has continued in 1999, enhanced by decreasing profits, suggesting more to come. This should support the demand for gold as a store of value.

Prediction for February 19th: 293.6.

I chose this, because I think if gold crosses 293.7, it may go to 310-320, quickly; and come back down to test 293, before continuing to rise. This might occur in March.

Folly, Frenzy and Fear, those Careless are
The fates that mould our destinies, and shape
The grave dishonesties, deceits, that mar
Our work, our very loves, our art
Stir the dark anxieties, the mortal pains
The dark and deadly pride that stains
The living dying heart.

Only that man,
Who steadfast stands apart
And cries his manhood, cries aloud - I AM
Will be free of such dire fates
Only thus be saved,
Be his own man.

Friday's one day wonder of bonds down and gold up may well be a harbinger of things to come. But the forces of the status quo, I suspect, are not going to pack up and go to the seashore leaving us with a New Gold Order next week. However, there could be enough traders scared "shortless" to push GCJ9 up to $295.80.

When I step back from the closeup view of gold charts, Dow S&Ps, LTCM, Greenspan et al; I see two basic opposing forces at work. 1) The massive shift in the global economic picture, which consists of a vast consolidation of major corporations simultaneously with an explosion of individual enterprise via the WWW; and 2) the incredible volume of nonproductive profiteering in the various currency and carry trades. The threat of the latter is, of course, the reason for the ownership of gold; and it also would be the cause for a substantial, or even dramatic, rise in the price of all precious metals.

I see three separate aspects to the reasons for owning gold. First is to hold value when other forms of equity collapse. Second, for the potential of profit from the return of the price of gold to higher values and beyond. Third is to have money when all other forms cease to be valid. Any or all of these reasons need to be motivating more people in order for there to be a substantial rise in the POG.

What I find helpful in understanding the current antics of gold fluctuations is the realization that in addition to supply and demand, the factor of paper trade and manipulation creates a triangulation of forces in which gold doesn't necessarily behave as we believe it should. This third factor is why we often see the opposite of what we expected from the supply and demand of the moment. The trade-manipulation factor creates ARTIFICIAL supply/demand ratios, skewing the technical numerology and confounding chartists and related theorists. Therefore, a trend reversal requires a greater magnitude in events than might have been necessary before the age of "Electronic Alchemy"

For example, The Mint statistics posted recently pencil out to an additional 21 tons for the second half of 1998 and a projected 66 additional tons in 1999. As to why the price of bullion is not responding to this, maybe the quantity is not great enough to reverse the tide of the other factors. To get a further perspective on this, imagine Oil. Suppose, say, 50% of the refineries in the USA where knocked out by terrorists. The price of crude would drop while the price of diesel and gasoline would skyrocket. Likewise, if there is a limit on how much stock can be produced for stamping blanks, or if the mint simply decides to hold down production, coins will continue to escalate in price while the cost of bullion will languish. [This plan of the Mint to ration coins is incomprehensible, since the aftermarket will skyrocket and they lose out on a huge profit potential.]

This explosion in coin prices is only one piece of the overall situation with gold. More significant is the secretive goings-on with the CBs and the gold carry trade. To attempt to analyze and predict the future of gold, it behooves one to really look at Gold's function as money. Money appears to break down into three categories: coin, earned credit and created credit. The latter two are both, by definition, fiat money. However the difference between those two is important in understanding the chaos of monetary economics.

If the government records the delivery of goods and services by issuing money to the account of the provider, that is fiat money, but it represents real product. When it is exchanged for the product of others, all is well. However, when government issues money to be loaned into existence, that is the fiat money (or more accurately fake money) that we see devastating economies throughout history. The basic concept is workable; issuing credit for the purpose of purchasing before the fact of production. A monetarist would argue that an economic system works that way no matter how vast, national or global, but history tells us otherwise. There must first be enough affluence to afford to lend (advance) products, and secondly there must be a direct response in the form of valid production which will repay that advance.

This is why precious metal is the primary form of money. Regardless of the dilution of value resulting from monetaristic folly, asset-based money retains wealth. Gold functions as money because it is the most redeemable commodity. Value in = Value out. Nevertheless, gold is an intermediary asset when it is functioning as money. Theoretically, in a sound fiat money system (credit money, not created money), gold would not be needed.

Unfortunately, even gold as money can be turned into the other forms. Receipts for gold can be used as paper money. Then, by considering that all gold owners will not all draw out their inventory at any one moment, the keepers of the gold can write more receipts than they have gold on hand, thereby inflating the money supply despite a Gold Standard.

So here we are with Central Banks holding gold reserves and an old refrain from a song of the 40's is running through my mind. "Money burns a hole in my pocket." Maybe that gold is burning a hole in all those C.B. pockets, and that's the supply part of what's holding the POG down. Even so, its just a matter of time. All of the world's C.B. gold inventory is not really that big a chunk of the gross global product. Furthermore, as more wealth is created, more value will be stored in gold. Gold WILL move from weak hands to strong. Gold is as inexpensive in real terms as it will ever be.

Y2K has caused a runup in the price of coins but that has not caused a runup in the price of bullion. And, Y2K may cause a collapse in economic activity but that may not cause a collapse in the global economy. The question is, will it tip the scales the other way by being the weight in the pan that reverses the balance? As Michael says about Y2K itself, all you can do is prepare for it.

I am in awe. Your post inspires.

Two points. Gold, in my opinion, isn't like oil with only 50% of the refineries working because the wealthier gold-bug-to-be can buy the 100 ounce bar instead of the coin. In your oil analogy, a person could not make use of crude, not so with gold. So when all the coins get bought then COMEX reserves will get squeezed, deliveries will pressure prices higher. Y2K will actually stress the future-trading system such that gold will rise because of it and inspite of it.

As you said, "...This is why precious metal is the primary form of money. Regardless of the dilution of value resulting from monetaristic folly, asset-based money retains wealth. Gold functions as money because it is the most redeemable commodity. Value in = Value out. Nevertheless, gold is an intermediary asset when it is functioning as money."

Inspite of it because of your first argument that stated gold is a form of indirect monetary unit. How insightful. Gold is an intermediate. It can easily be changed. It is recognized like any currency with a daily-quoted value by which any properly setup exchange can convert it at a recognized value.

I can't remember the source of this information, but I remember that public demand for gold is the number one pressure on gold's reason for hitting $800 per ounce in the early eighties. Y2K will give us this. Add the uncertainty of fiat money with the dominoe recession country by country we are compounding uncertainty, compounding reasons for gold to rise again and maybe never to return to these low altitudes.

I propose that even without Y2K, gold would rise to new highs. Y2K is a random event that might move the Kondratieff 54 year cycle from 2008 to 1999, creating a hybrid stagflation in which commodities will or have bottomed and then rise to new highs. In this information age, computers have introduced a technological variable of high speed information and communication that Kondtratieff could not have known about in Russia in the 20's and 30's. Y2K has turned the clock ahead and actually created a spur in an otherwise steady course of events. This is why so many pundits have not been able to predict the effects of this event on all events around it.

From Friend of Another -- perhaps you will remember this? He said, "As gold is allowed to drift upward to the $320/$360 area, the real gold wars will begin where they left off in the early 80s. The paper gold market is still controlled by London, and we will see tremendous paper spikes up and down as this monster is killed! That's why Warren brought silver for BH, it won't move anything like gold percentage wise, but it's the best they could do in a
public company. The poor traders don't think physical can move much, so they trade for a few dollars up and down. Michael, We are looking at a sea change of biblical proportions, that, if it can take down London, it will most certainly eat any and all traders. CPMs included! Not a good thought, yes?"

You see the prophetic knowledge (or insider knowledge) of such thoughts. Your triad factor of paper traders are holding gold back at all costs to prevent these thoughts turning into reality.

I note with distinction the use of the word "allowed." This denotes manipulation or control by a party or parties. I presume he refers to the Bank of International Settlements as to the allowee. Or does he? Frankly I don't know. To much smoke and mirrors. The only thing for certain that you and I can put our fingers on are all the indicators that keep cropping up. Some of those are gold has been moving sideways. Jims from kitco puts it best, "Even an untrained eye can see that gold stopped falling 14 months ago and has been going sideways ever since."

The question, is gold done moving down and ready for a permanent move up? Jims again says, "The telltale signs are there of a market reversal of the 4+ month decline off the Oct high. There have been three declines into this triple bottom. The first began oct 97, thesecond apr 98, and the third oct[sic]98. the last one was at less of an angle (less momentum/conviction ) than the previous, which was less than the first. Each of these has lasted about the same -- 4 months. If we get as much of a pop off this third decline it will carry us above the apr98 [sic] high and clearly signal that a bottom is in even to untrained eyes, who will then buy at the high and get blown out by the retest of the bottom."

You see even Jims senses that gold is in a technical bounce scenario trading in a tight range. He mentions that those buying at the high of this next bounce will loose some money as it, he infers, will retest previous lows. We all know that to be $274-$282. So is this expected bounce caused by a rising long bond yield, Y2K coin squeeze, falling domino economies ending what will likely be the US and Europe, going to be permanent or as Jims said, "...a retest"?

Bill Fleckenstein discussed bonds recently. He said, "Trouble ahead for U.S. bonds... Looking at the bond market and the news out of Japan, I would say that we're definitely seeing some repatriation back to Japan. And if that's the case our bond market is in big, big trouble."

His words drawn to their natural conclusion would mean a flight away from the dollar to Japanese bonds. He sees this starting right now. Others have spoken of the Euro as competition for the dollar as the reserve currency. Be it the Yen, the Euro, or the dollar. The dollar is coming under pressure as Mr. Fleckenstein pointed out. Oil is priced in dollars, gold is priced in dollars, silver is priced in dollars. Dollars, dollars, dollars.

The indicators of gold rising in value increase every day. We see the indicators previously mentioned, others that you know that aren't mentioned and we see counter indicators spun by the information meisters painting a bleak picture for gold, 'gold is dead.' These indicators in the intelligence parlance of Operational Security are stronger than ever. The stronger they become the closer we arrive at the juncture that Michael asked about: is this the one, the final move from these levels?

I propose that the answer will only be known, in fact, after the fact. Jims thinks it but a triple bottom bounce with a potential for a retest. Others believe that the long bond rising yield is the portender of bad news for the strength of the dollar. We all know that as the dollar grows weaker so gold grows stronger.

Yet, the traditional time for gold to rise has been reported to be the time when inflation is rampant and the money supply loose. I suggest that, as some have said, the stock market is our inflation. As it falls monies will seek safety not in bonds, but in gold, gold related investments, and the Euro and maybe even Japanese bonds as Mr. Fleckenstein pointed out.

This brings up some of the thoughts of Another when he said, "Few do grasp what is happening and why! They think the holding of gold reserves by the Euro is of a little point, as to what good are gold reserves? One cannot use gold as Marks or Yen to intervene in currency market to support the Euro. My friend, the BIS has played the, as you say, "big poker hand"! The holding of large reserves by the ECB and the withholding of sales from the market will not only bring the end of the London paper gold market, it will, thru a high USD gold price, "make the dollar weak in gold"! From this position, the dollar will lose the "oil backing" from the Middle East! At first, all oil for Europe will be in Euro's, then all producers want "strong currency"!

So Mr. ANOTHER says that the Euro is strategically positioned to be the benefactor of a week dollar and that the Euro will become the reserve currency of choice for the oil countries. He further says that the BIS is somehow at the center of this big "poker hand."

Kodratieff and his followers would surmise that we are the end of a six-year down cycle in commodities. They support the thought the commodities are testing their lows now. Further, Y2k is stressing the system. World economies are faltering; printing presses are running full bore to inflate out of depression. Stagflation, where we have low commodity prices and high grocery prices and medical costs is amongst us. Gold isn't reacting to its normal stimulii because inflation, the standard gold-buying trigger is masked by the inflated stock market bubble, and hidden by low oil costs. Risk is being factored into the long term bond prices. GATA is accusing the Feds and Goldman Sachs of running a PPT or plunge protection team to extend the boom cycle of the last several years. The temperature gauge of gold popularity is rising. Peter Asher covered it well when he said gold is a a monetary unit in an intermediate way. So is gold going to bounce now?

Technically, it is bouncing. It gapped on Friday in the daily gold chart. In my opinion it all depends on how big the short counter attack is and how much ammunition they have left. Since gold has been moving sideways for a while, shorts can't continue to prosper from an ever declining gold market. I believe that we are winding down the gold carry trade. Silver is the leading indicator (there is that word again) for gold. Silver lease rates are at a recent high, almost 8%. Gold lease rates haven't risen the likes of silver's. I believe that this would seem an appropriate indicator to gold's rocket rise, if it is here. But it is not reflected in the rates. Silver is.

So, jims may be right. We are getting close and this is the one before the final one. Silver's turn is now. Gold is next.

Finally, I leave you these prophetic words of Another (who by the way has not graced these pages recently): There is more: Many say, how to defend Euro without much currency reserves? If gold go to many thousands US, what will be
used to bid for Euro as defense? I say, these persons will find a problem on their computer screens! You see, the Euro will start as "nothing", no holdings of size, anywhere! The dollar is held as reserves as "the stars in heaven"! It is to say, "the dollar will bid for the Euro", not "the Euro will bid for the dollar"! All currencies will "flow into the Euro for trade". But, if the Euro becomes so strong, how to compete in world trade? It will be the price of oil that will make the "trading field" level! The soaring US$ price of gold will make even a 10% Euro reserve be as 100% today, in USD! Oil will become, very, very cheap in Euros and allow that economy to do well! Many other countries will see this and also want to join the new "world reserve currency" that has become"the new world oil currency"!

The key for this "new gold market" is found not in the process of gold loans and sales, but in the "who is the new owner of this metal"? Noone did see clearly, "the other side of this". Always the view was, "see how the fools sell the gold and drive price low", not "who is buying all of this new supply at such cheap prices and giving up interest on currency also"? One should consider, "how much currency has flowed thru gold" over these past years! It is a great deal of wealth! Can not one see the clear view, "has not gold made the dollar strong as world reserve currency"? This happens in a time that all say the dollar would fail! Perhaps, "this new gold supply", it was for the purchase of "time".

Some say, "gold fall because noone was buying it". I say, "gold fall because many were buying it"! They buy as the "trading market" was made "much fat" with added paper! Understand this: The US$ price of gold could only fall if a market existed for paper gold priced lower each time of offer! If the price did not fall, this paper market "could not function" as "it would not be profitable to the writer"! It was, for many years, in the good interest of all, for the dollar to find a gold price close to production cost. That time has now much passed!

April gold not trading yet on my chart... so while we wait.

This from Kaplan on the 5th. Note he was one week ahead of indirectly predicting a fall in the bond market. Keep that in mind and be sure to read him when he gets back on the 19th (www.goldminingoutlook.com):

The enormous rise in Japanese long rates will continue to undermine the world financial markets by pressuring long-term interest
rates worldwide to rise in tandem to prevent an outflow of funds into Japanese bonds. Higher long-term rates means increased
borrowing costs, eroding corporate profits and inevitably a corresponding decline in the stock market.

ONE CANNOT REPEAL THE LAWS OF PHYSICS: It should be remembered that Isaac Newton bought stocks during the
previous equity euphoria (in London in 1720) and lost most of his savings thereby. According to records of the time, he knew
the market was overvalued but figured there was nowhere else to put his money.

THE MOST DANGEROUS GAME: The average American mutual fund investor was stunned late last summer when the
market suddenly declined. Not knowing what to do, most became nervous, fretted, did nothing, and survived. In other words,
when confronted with a minefield just ahead, John and Jane Doe closed their eyes and kept walking, and lived to tell about it.
The next time they are confronted with another minefield, they will no doubt do exactly the same, confident that doing nothing
and hoping is the best solution. Should the market not rebound so fantastically the next time around, or decline further, John and
Jane Doe will close their eyes even more tightly and keep on walking. Tick, tick, tick . . . .

THE LEMMINGS ARE APPROACHING THE CLIFF: Investors' Intelligence most recent poll shows 60.7% of respondents
bullish on the stock market.

-end-

A local friend and coin dealer told me last Friday, after my accident, that this stock market downturn was going to wipe out the US middle class. He was a coin dealer during the 1979-1981 gold and silver surge. He sees the same signs of a catapulting gold and silver prices that he saw back then. I asked him what was causing the silver lease rates to go through the roof. He said, "I presume it is because of the one million ounces that Merrill Lynch is looking to fill when they closed down their bullion department. There ain't no silver out there."

I asked him, "That would be the cause of the silver rates going up?" He said, "I told you, there isn't any silver."

Steve

I truly appreciate the praise. Your counterpoint is true IF the demand for gold is mainly protection of value. if however the coin boom is Y2K "trading vehicle" driven, (which was an assumption in my analogy) then I don't know what effect a coin shortage will have on bulk gold. At this moment, I don't see much demand building for ownership at 30k per. I was mainly addressing the existing discrepancy between coin and bullion activity.

Just got back...I want to contratulate both of you on two outstanding posts. I would encourage all lurkers to spend some time with both. They are storehouses of accumulated knowledge and important interpretations of the gold scene.

Spots down and up 20 cents on kitco.

As to Newton, remember he didn't ponder gravity till an apple wopped him on the head while he was napping.

(To the tune- "I got you babe")

HER: They say we're dumb and we don't know
....The NASDAQ is the only way wealth grows
HIM: Maybe that's so, but I tell you what
....When it comes to Gold- I'll take a pot.

HIM: Gold
BOTH: I got Gold babe
.....I got Gold babe

HER: They say our Gold won't pay the rent
....That barbarous relic, it ain't worth a cent
HIM: Well I don't know if all that's true
....'Cause they don't know what Y2K can do

HIM: Gold
BOTH: I got Gold babe
.....I got Gold babe

HIM: Those short-sales are hasslin' me
....Makes me wonder what the future will be
HER: When the dollar's flat and the market's down
....Then they'll get scared and come around

HER: Don't listen to their Siren song,
....'Cause I don't care, with Gold I can't go wrong
HIM: Then I'll stake a claim- we'll make a find!
....There ain't no hill or mountain that we can't mine

HIM: Gold
BOTH: I got Gold babe
.....I got Gold babe

HIM: I got Gold that's fine for me
HER: I got Gold to shine for me
HIM: Gold in my hand- that really counts
HER: Financial security by the ounce
....I got Gold- I won't let go
....I got Gold and it's yellow glow
....I got Gold- I'll hold it tight
....I got Gold- I sleep at night

BOTH: I Go-o-o-o-o-t A-U babe
.....Got A-U babe
.....Got A-U babe
.....Got A-U babe

GF

You left me speechless for awhile. Your comments are so much appreciated and encouraging. Thoughts and concepts do not take place in a vacuum. So much of what I write comes from the interchange and debate with all the others on this forum. This experience could not take place without the unique website that you have created.

The Hobbits are all singing your new "hit" song, Goldfly, while I attempt to study the essays of both Steve and Peter AND hope to hear from Aragorn III and the PhD of LA soon. Then hope to hear from more of the "Lurkers" before the holiday ends and the markets beckon like the sirens of yore. The Hobbits send a golden Valentine to all aboard the USAGOLD FORUM.
<;-)

Does anyone know how to access the world gold price when the US markets aren't working? It appears that gold was up
another 10 cents per ounce last evening but I don't know if my source was right or not and it certainly is not current now.
Kitco is not current last time I checked. I need to leave town more frequently. Gold and silver seem to do pretty well when
I am on the road.

Had not been watching this, but observed Friday that premium now exceeds 30 percent over melt! Has it EVER been this large before?Does anyone know what gives?Y2k purchases?
Also,at this level might junk silver bags qualify as "numismatic" for reporting purposes?

Try the following http://www.quoteline.com.astmete.asp

Correction, sorry http://www.quoteline.com/astmete.asp

Thanks for the tip Basil. It works great. Hopefully gold will remain afloat and begin takeoff.

MARKET UPDATE (2/15/99): The COMEX is closed today and the quotes above are relative to early European trade today. The silver story continues to dominate the precious metals sector. In Europe overnight, silver lease rates spiked into the lower teens with much pressure on the forward market spilling over to prices on the physical metal. Lease rates
stood at 7% on Friday. These are the classic indicators of a short squeeze in process. With no metal available in the market to lend so that dealers can make their forward sale
commitments, shorts are being forced into the market to buy up whatever physical metal they can find. This is precisely what we have predicted will happen eventually in the gold market -- on a massive scale. We can watch the silver market now as a possible template for gold in the future. According to the London Reuters report this morning one trader was quoted as saying: "Further borrowing of silver this morning has taken lease rates and the spot price even higher. Silver will remain volatile, and with New York out on holiday today the thin markets will only serve to aggravate the tightness." With the commercial gold long position growing on the COMEX as well, a similar situation could be developing with the yellow metal. Shortages and premium pressure could develop overnight. A London trader was quoted by Reuters this morning as saying: "Are we going to see prices in the mid to high $290s by the end of the week? Possibly, but I think this is all technically driven."

That's it for today, fellow goldmeisters. We will update if anything interesting develops.

The contest ends tonight at midnight. Last chance for all prognosticators to get your best guess before this esteemed FORUM.....to win a gleaming one-tenth ounce Austrian Philharmonic.

Rules can be found in the morning archives for the past two days.

Canadian gold miner Royal
Oak seeks court protection
(Last updated 12:33 PM ET February 15)


Eacott said the company would release further details
about the court action later Monday.

Hard hit by falling gold prices, Royal Oak stopped
paying interest on more than $320 million in debt in
late December and told creditors they had until
February 15 to restructure the payments.

Was that a gold loan default?

The item is now gone from the menu but my sense of it was that, due to the low POG, they ran in the red until the money ran out.

This makes me wonder a bit more about that Australian miner's statement last week. About the big mines willingly operating at a loss, hoping to ride out the storm until the little guys fold and can be bought up for peanuts. To me the biggest mystery of the continued low POG has been the fact that the mines seem to accept it and sell forward at the slightest pop in the POG.

***291.10*** April Gold close on Friday February 19th


I hate to be a little bit of a pessimist here but I think this gold market needs a little more time before it breaks out to the upside. I actually hope I am wrong but will attempt to make my case for the above posted price. On Friday gold touched the bollinger top and then backed off a little bit. If gold can close above 293.50 by the end of this week then based on my commodity charts it has broken a fairly significant trend-line and could be off to the races. That's also why I think the manipulators have to establish their next line of defense at the 293.50 level.

I would agree with others that Friday's bonds will cause a shock to the system and should be causing significant alarm. The march futures contract gapped down and then closed near the low for the day. I would suspect as others have suggested that there is some repatriation going on. Again I think the insiders will be called in to prop up bonds for a little bit longer and Japan may be asked to wait before their next round of repatriation.

The US dollar index hit a short term double top and also a bollinger band top and then closed near the low of the day. This may be a key reversal sign, again I think this all points to the necessity for some type of major intervention either by a major news release or some central bank action. I think of last fall and the obvious interventions with LTCM problems and I ask myself, do the powers that be have some dry powder left, I have to answer that I think they do. I believe one of their objectives has been accomplished, that of propping up the market until the end of the Clinton impeachment trial. Now they will try to continue to buy time.

The insiders are bright men and have to know that we are sitting on the biggest stock market bubble in history. While the masses may not know it these people do. So the end is only a matter of time and they know that but I think they would like to pick the time-frame in which the end of the bubble is to occur. If the end can be delayed until Y2K then that event can take the blame rather than our misguided monetary policy. Using this approach they figure they can stay in power to sell the people on a new misguided fiat approach. Like others have suggested I believe that we have had major inflation and it is being masked because it is all in this equities market. We also have this huge balance of payments issue with Japan and China and Europe holding US dollars that will eventually come home, particularly when the dollar begins to drop. We may have seen some of that on Friday as others have suggested. If I were Greenspan and Company I would try to keep it all propped up until Y2K issues occur thus providing release and something to blame the whole fiasco on.

I don't necessarily believe we need to reach the year 2000 for the issue to get the blame but we need to get further into this year to make it all believable. Unfortunately I suspect the Insiders will not come up with a solution that has the United States best interests in mind. Their policies have falsely enriched us more than is warranted, the next phase I suspect will be much more harmful than is warranted. Gold should provide some protection.

All of this to project that Gold will trade in a narrow range this week and close at 291.10 on Friday

Thanks for your understandings and thoughts ! My eyes see what my brain was trying to tell me, but could not get through my thick skull. Come on you other Lurkers, let us hear your thoughts. Knowledge is to be shared, or only stagnation results.
<;-)

I think the problem in the mining companies is the same that permeates the investment business as a whole -- the live-for-today-I-want-instant-gratification "mind set" that infects the psychology of our times and by extension all the markets. Many of these gold mining executives don't give a hoot about gold or the gold mining business -- it is simply fertile ground for their brand of pillage and burn corporate finance ala the gold carry trade. For these people, the gold mining business simply acts as cover for financial gambling -- a more genteel and socially acceptable version of LTCM. They hope and pray everyday I am sure that the sham of the gold carry trade doesn't blow up in their hands before they find another industry to pillage. This reminds me of an across the fence discussion I had with a neighbor whose family has been in the oil business for at least three generations. Her brother now in his fifties started out his career in the same oil company that his grandfather and father worked for. He was sent packing after the third or fourth merger and he could no longer hold onto his position. By the time he left, the oil business had very little effect on the company's bottom line. Their money was made in the "financial business" as she tells it and this process of evolution occurred over the last ten years of this on-going financial mania. He told his sister, my neighbor, that most of the people in the corporation do not even know what business the company's really in. They just push paper all day and hope they keep their jobs -- an absurdity right out of one of Tom Wolfe's novels. I asked her -- not a financial type -- what she thought the end result of all this will be. She said "We are going to have a major crash. The whole economy's phoney and everybody knows it." I agree this debt-fueled-live-for-today-I-want-gratification-now-mania cannot have a happy ending.

I came to lurk these sites because of my Y2k concerns and a simplistic belief that in times of crisis the POG goes up. If we are to see a such a big move then it really should get started soo; the fireworks can come later, but it needs to start building soon. POG has laid some foundations, is it time to raise it's head above the parapet?

Gold is still inside it's bear channel and the chances are she stays there.
However, though I wouldn't buy it till she breaks; the charts with their nice pert triple bottoms/head and shoulders/stochastics etc say to me;
If there is a good time to breakout it is now; lets piggyback Silvers ride up.
So what the hell, the hobgoblin says subtract Feb high from the 99 low and add to 291.50 to give the total of $300.20
HaHa!

$301.10 is my entry price. Like JA I see the year 2000 as a significant influence but from a different angle. A few bright men decided how to have a party about 5 years ago and began the gold carry trade where by they managed to take
a low interest gold loan, sell it into the market, and leverage that money up to 100 times in value in the derivitive markets and the bond markets. It worked. But it worked better than they thought. The public bought it hook line and sinker! Yes, a few men control things or so they thought until the public with its billions and billions and billions piled into the stock markets driving them so high
as to do two things. First they have convinced even the few
bright men as to the "realness" of what is happening. These
few bright men now really believe that there is a new era.
How else can you explain LTCM getting caught? Second, it has
become clear to the powers in charge (Clinton, Greenspan, Rubin) that they GET their power from the bull market. The
markets are so much bigger than they are that they are merely trying to keep their power alive. At all costs!!!

Now take the year 2000. The people sense a big party is
going on. They can sense what will happen afterwards. But for a party to end the last of the quests have to leave. And most of them are still at the party. There is no reason to
expect the party to end before the change of the millenium and probably not until well into the first quarter of the year 2000.

Gold stocks and gold have never done well during a crash in the markets. They never will. They do very well at the tail end of a party. So from here on out they are going to be the big winners going into the year 2000. The internet
players are going to come to the gold party. This is the best hope and the best senario for profits. Huge profits.
They are slowly on their way and hence I will add $10 to JA
price. The party is not over for another year and we gold
bugs are just arriving. Let's enjoy our selves and stop thinking in terms of a crash in the Dow as a necessary condition. It is not. Next week begins the visable bull in gold and $301.10 is on its way.

Thanks, GD

Obviously, short term predictions are a challenge, but in the spirit of the game, I have my posted my guess for the Friday close.

All in all, we appear overdue for a test of the upper parts of this narrow range. I await, with my "brothers and sisters" for a true bull leg in the gold market and trust that we don't have long to wait.

I would add that while I have the greatest respect for Another, I do not share his opinion on the prospects for gold shares.

In our lifetime, we have never had a bull market in gold in this type of financial climate -- one in which zillions of independent investors manage their IRA rollover dollars, etc., while glued to CNBC.

IMHO (and based upon my observations of clients during the past eight years as a stockbroker), when gold finally moves to the upside it will result in a bull market in the mining shares which rivals the internet mania which recently transpired.

As most of you know, all of the mining stocks together, hardly have the market capitalization of a one big banking or drug stock on the NYSE. When money... real money...decides that it needs to own gold now... it is going to chase the mining sector.

Many of my friends and acquaintances could not even tell you how to go about buying a gold or silver coin or ingot. But they do know how to get on the internet and put in a market buy order for a gold mutual fund or ABX. And that is exactly what they will do. In numbers that you can not possibly dream of.

Go gold...go farmland...go anything real.

Hi guys. I'm new. First posting. Tough one. I'm going for resistance at 293.50 The shorts/manipulators/goon squad will have to let it look natural. They still have a lot of stuff going for them in the short-term. They HAVE to keep a lid on this thing for now. However, the weekly chart is making a VERY interesting falling wedge formation. Pretty bullish, but the trigger and breakout is yet to be seen. We are near, though. Every time we have tested the upper side of the wedge, since Sep98, the following decline has been with low volume on COMEX. Same thing with gold shares, and the volume patterns are even clearer there.

How intriguing that I came across this note last night, and I just now read your post #2422. Some of this content has been in other posts of mine, but this in particular seems to fit right in with what you just said.

Economic Notes, Fall 1994 (updated for today)

The driving force behind society is economics, which, when truly defined, is the system by which who gets what. It is not supply or demand that ultimately determines the workings of an economic system. It is allocation!!

People deliver resources, produce goods and perform services, in return for which they receive certificates (i.e. money) with which to acquire the same from others. Therefore, it can be seen that money may be most accurately defined as a form of bookkeeping.

Unfortunately, as this form of credit exists in the framework of a commodity, it becomes a product unto itself, and much endeavor goes on in society solely for the purpose of transferring these credits from the possession of one person to that of another, even though no tangible product has been created.

We have, in the last two or three centuries, increased our productivity, in terms of man hours, perhaps twenty to fifty fold. Still, as a people, we have a substantial amount of those living-in- squalor that existed before the advent of the industrial age.

It seems that, as fast as the cost of products (in terms of man-hours) is reduced, the percentage of the population which profits by the holding of capital increases accordingly. Production of real resources, goods, and services is done by a smaller and smaller percentage of the people. Therefore, the obstacle to affluence and economic comfort for all productive peoples is that greater and greater portions of the population are engaged in activities which are legal, but invalid in terms of any useful product.

There is of course the factor of illegal predatory activity regarding drugs which is hopefully has past it's zenith of toleration. However, this kind of drain on mankind's work has existed throughout history in the form of war, etc. What is being discussed here are the factors that can be altered by agreement rather than by force.

The status quo is has been tolerated because people have seen themselves as living better than their ancestors. This permits the wealthy and the governments to maintain the inequities that persist in our society.

I don't have a solution to this dilemma, but it brings to mind some words sung by blues singer Amanda Ambrose, "If you don't want me stepping on you, then you get off the floor!"

Somebodies gotta get a little "wild and crazy" around here.
If you think that I have had to much to drink just read 2nd Kings 7:1-20 (who would you rather be a leper or a royal officer?)

Just returned from Lurking the world over, sure seems to be a lot of fear brewin amongst the treasury departments of the G7+++. Seems they have lots of new bond suppy that needs to be absorbed, but the competition for buyers is getting a little heated. Rising rates are Gold's best friend for now!

AWH, its just a guess. Keep Well Everyone!

**** $287.60 **** Friday February 19th

As a first time poster I would like to say hello to all and thank Michael for his most excellent site and also the opportunity to enter the current contest.

As I stare at my crystal ball this fine Monday afternoon I observe a number of circumstances that at the present time would appear to offer us suffering Goldbugs at least some measure of hope. To name just a few.

1) Rising U.S. and Japanese bond yields.
2) The recent spike in silver and silver lease rates.
3) U.S. coin sales going ballistic of late.
4) The degree of volatility of U.S. stock markets.
5) Ever increasing coverage of potential Y2K problems.
6) An increasing number of U.S. analyst's turning if not
negative, at least cautious.

However, my crystal ball also reveals a number of factors
that I interpret as being negative for the price of Gold in
respect to this week in particular.

1) Clinton and Gore's recent comments in respect to selling some IMF Gold. I personally can not believe for one minute that the purpose in so doing is to "HELP" some of the poorer nations on earth. No, the sole purpose of this rhetoric is the same old, same old, in order to suppress the POG. I believe there is a fifty-fifty chance we will hear more of this nonsense again this week, quite possibly Thursday afternoon or Friday morning.
2) The powers that be might well be even more opposed
to "ANY" increase in the POG this week should silver
continue it's advance. Can't have them both
moving upwards at the same time, might cause
some investors to think about PM's as an alternative.
3) Last Friday's weakness in the U.S. markets. Whether
it be manipulation (PPT) or simply those that now
believe in buying the dips, it's possible the U.S.
markets will have two or three good days this week.
If so, we all know only too well what that most often
means for Gold.
4) A number of other markets are closed for two or more
days this week. Could be the shorts will stage an attack.

In conclusion, sorry to be so pessimistic the first time posting but that's the way I see it. Lets all hope my crystal ball is as inaccurate as usual and the POG ends the week well over $300.00.

BEST WISHSES TO ALL

It is propably clear, but just in case, my jibes are not directed towards anyone here at the forum (I lurk here often to maintain sanity) but since Friday's HaHa.. breakout in ...HeeHee.... rates HooooooHo... I keep hav.. HeeeeeHe.. having these fits o.. hooohoo.. of, well you all know what I mean! Haaaah Haaah
Is there a Doctor at the Forum!

Hopeing II......Welcome to this table round. Pull up your chair. We hope to hear more from you. Strong first post.

Buena Fe.....Belly up to this er....table round. If we awarded the silver for courage, you'd have it.

Tico...Welcome...The stuff about volumes? I know its true. Just hoping to gain a little mo..............

Hobgoblin: Are hobgoblins related to hobbits? Now that you've broken the ice, we expect much more in the future.

Arizona Hiker....Thanks for joining the party. I agree with you on gold stocks, but in my view you have to separate the 'mine and sell' wheat from the 'hedge and forward' chaf (as you know)....the need for a knowledgeable gold stock broker is acute if you are an investor looking to play the mine stock game. I made the decision a couple years ago not to buy companies who played a big hedge book on principle alone -- a personal thing. My broker gave me the proper direction.

JA....I thought this to be an important statement so I cut it out of the remuda so everybody could get a good look at it:

"So the end is only a matter of time and they know that but I think they would like to pick the time-frame in which the end of the bubble is to occur. If the end can be delayed until Y2K then that event can take the blame rather than our
misguided monetary policy. Using this approach they figure they can stay in power to sell the people on a new misguided fiat approach. Like others have suggested I believe that we have had major inflation and it is being masked because it is all in this equities market."

Several CPM clients have voiced the same sentiment to me -- especially about waiting for Y2K as a cover for a financial crash. Then it's nobody's fault. "It's the machine's fault," as one client put it.

To All: I want to once again compliment all participants for the camaraderie, collegiality and cordiality that adorn this august FORUM. We watch this gold market together -- as friends and associates -- yes!

Read this about silver lease rates. Holy silver batman! (Oh by the way April gold just opened overseas -- volitile with good volume, now $290, opened at $291 (shorts are making there move before New York open -- and the rest of the world see what silver is going to do):

from kitco.com

Date: Mon Feb 15 1999 19:18
rhody (silver lease rates: One month lease rates were 11% to) ID#411440:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
as high as 17% today in London. That's 4 to 9% higher than last
Friday. This is a new all time record for a one day spike in
silver leases. In fact 17% is an all time high for a one month
silver lease rate. It would appear that there was heavy demand
for borrowed silver, but few lenders. This weekend I searched
around in Mitsui, and came up with an article by Andy Smith
( not a fan of pms ) who states that gold in unsqueezable, as
all the gold ever produced is still above ground yada yada yada...

Yet another analyst ( writing for a period in January, just as
leases began to rise ) suggested that leases be rolled over for
longer terms, and that this silver rally would be weaker than
the Buffett spike of a year ago, and not as long lived. I wonder
what this guy is thinking now with lease rates of 17%!
Today we had the first wiff of a shortage of silver lenders.
If this is true, and not a product of the American holiday and
the Asian festivities, then Ted Butler's silver bull may finally
be awake.

Top Financial News
Mon, 15 Feb 1999, 7:48pm EST

Bonds, Futures Fall After BOJ Leaves Buying Policy Unchanged, Cuts
Rates

Japan Bonds Fall; BOJ Leaves Buying Policy Unchanged (Update1)
(Includes volume, section on spreads)

Tokyo, Feb. 15 (Bloomberg) -- Japanese bonds fell for a
second day after the central bank left its bond-buying policy
unchanged at a board meeting Friday, choosing instead to cut
overnight lending rates to spur the economy.

Bonds fell as the reduction in the Bank of Japan's target
rate for overnight lending between banks, to 0.15 percent from
0.25 percent, may not be enough to make bond yields more
attractive, traders said. Some investors also hoped the BOJ would
step up buying in the secondary market to absorb a flood of new
bond sales to fund economic stimulus packages.
"It looks like people are depressed because the BOJ didn't
meet some expectations" that it would buy more government bonds,
said Keiichi Tsukuda, a trader at Taiheiyo Securities Co.
"People could continue to expect the bank to buy government
bonds because that's the only way to have a direct impact on long-
term yields."

The benchmark No. 203 bond maturing in 2008 fell 0.42, or
209 yen per 50,000 yen bond, to 97.392. The yield rose 6 basis
points to 2.135 percent, below the bond's record high of 2.44
percent on Feb. 3. Bond futures for March delivery fell 0.35 to
128.70. About 38,133 contracts for March delivery traded, below
the 20-day average of 43,703 contracts.

Long-term rates have been on the rise ever since December
when the government announced its plans to sell 71.1 trillion yen
($629 billion) in bonds during the new fiscal year, which starts
in April. That's up 23 percent from this year.

Concern about a glut in the market has tripled the yield on
the benchmark government bond since Oct. 7, when it hit an
intraday low of 0.695 percent.
"A rate cut doesn't address the supply issue and therefore
doesn't help bonds," said Akitsugu Bando, a manager at Okasan
Capital Management. "Unless the supply issue is effectively
addressed, we could see rates rise to 2.4 percent during the next
three months.

Since the rate cut is widely seen as insufficient to lower
interest rates, the only way the market can absorb increased bond
sales without a jump in long-term rates is for the central bank
to increase "rinban" operations, or bond purchases in the
secondary market, said traders and analysts. The BOJ currently
buys 400 billion yen of government bonds on the secondary market.
"The expectation for a rinban increase wasn't high (last
week), but if the BOJ does eventually buy more bonds, it will
help the market," said Xinyi Lu, a chief strategist at Paribas
Capital Markets Ltd. "The market still hopes for an increase."

BOJ Governor Masaru Hayami said Friday all board members
opposed increasing the amount of government bonds purchased
through rinban operations. The central bank is under political
pressure to buy more government bonds to stem the surge in long-
term interest rates.

Steeper Curve

Investors are still reluctant to buys and take advantage of
the widening difference between short-term and long-term interest
rates. Today the "spread" or gap between the generic two-year
and 10-year government bond yields widened to 166 basis points,
approaching this year's record width of 186 reached on Feb. 5.
"We are seeing bond spreads widen further, but who wants to
take on the risk before the fiscal year end," said Bando.

Banks often take advantage of large differences between
short and long-term rates by borrowing with short-term securities
while making loans with a longer maturity.

Spreads

In other government bond trading, the price of the No. 209 10-
year bond fell 0.53, or 263 yen per 50,000 yen bond, to 98.026,
pushing its yield up 9 basis points to 2.240 percent.

Japanese bond yields don't reflect compound interest, which
is included in calculating yields on other countries' bonds.

At today's compound yield of 2.219 percent, the No. 209 bond
yields 284 basis points less than the 5.061 percent yield on the
benchmark U.S. 10-year note. That's 8 basis points wider than a
week ago.

The Japanese bond also yields 167 basis points less than the
3.884 percent on 10-year German bonds, assuming the latter paid
interest twice a year. That's 12 basis points wider than a week
ago.

The spread between the two-year and 10-year yen swap rates
widened 0.18 to 1.84. The two-year/10-year swap spread is one of
the indicators used by traders to gauge changes in the difference
between short-term and long-term rates.

Today's posts have said a lot about the impending day of reckoning coming to the over-extended profiteers of the financial world. I have been toying with an analogy based on chemical explosions. We know (hopefully only via cinematic special effects) what a tank full of gasoline will do if converted into energy instantaneously. Yet, that same energy pushing a few tons of vehicle 300 miles is quite benign.

Likewise with the current markets. While I agree that the "Gang" will try to blame it all on Y2K if it does blow, I think they'll TRY to spread it out so that the excess gets bled off over time. The big question is how low can interest rates go before "killing the goose"? How much does the system need new capital, vis a vis how much does it need to reduce the cost of existing debt?

Given that "They" can take rates lower, the stock market bubble may be able to float along without bursting. I pleaded a case last month for a PE ratio of 30:1 being viable. Then, two weeks ago, a major analyst came out with a strong defense for 26/29:1 for stocks. (He may be a shill for the bad guys, but bear with me a bit here).

IBM came out with earnings of $2.44 for the quarter which was 20X annual. Then it sold off on the news that, even though earnings were up, gross revenues were down. This is bad?? Making more money on less sales? Now it's trading at 17X. What can you get at the bank � four to five percent? That's only 20-25X with no growth potential. Also, rates could go lower. (IMHO they will go lower or it won't matter what you're in, unless it's Gold!)

What I'm suggesting is that the "Gang" will try to nurse the game along while gently reducing the EXPECTANCY of the investing masses. Remember, the paradox of the stock market is that while higher earnings make stock more desirable, people choose stocks over interest-bearing instruments because of the appreciation potential versus fixed income, not because of any particular PE ratio. So. When interest rates get lower and lower, "high" PE ratios appear to be valid. It's the ALTERNATIVES that determine the desirability of stocks, rather than intrinsic value.

Therefore if "They" can pull off the lower rates, the investing public will still see stocks as preferable even though prices increase at a smaller and smaller rate. Then, if earnings increase sufficiently, PE ratios will decline, and the excess energy in the "bubble" will be let out gradually along the highway of time.

I'm not saying they can pull this off, but I do believe they intend to try, not from any benevolent intentions, but for the survival of their own wealth.

Globex S&P +5.70, Spot and GCJ9 down 1.70 !! Is this technical or are we missing some news item??

Just when you think it can't get worse!! --- Hillary's going to run for Senator from N.Y.

To paraphrase Peter O,Tooles major line as Henry the 8th in Beckett, Will no voters rid us of these meddlesome Priests

Peter -- The Kitco Spot Au chart (which is SOMETIMES correct) shows that SPOT the dog was dumped one twice Downunder in "Ausieland" at just after 1900 NY time which just happened to be the time that the APR Futures opened for trading !!! Strange timing isn't that ? However, the GC9J APR Au contract that we are all guessing the next Friday's close was not overly active and fell the same $1.70 that SPOT the dog fell and then has corrected back up $0.50 while SPOT the dog is just laidout and resting. Not to worry Goldhearts, the same old tricks again. Just some more opportunities for us to gain in the longer run.
Steve -- please see my old posting of the impact of the BoJ's lowering of the discount rate to 0.15% to assist the commercial banks to purchase the flood of long Japanese Bonds that the BoJ has precluded itself from purchasing. This is the easy way to get the job done and save face !
How does one spell "Herrikarri" ?
<;-)

Hey!! What happened to A3? He predicted a rhino, then a contest, then....... Nada!

Come on Aragorn, get your two grains worth in there! Tell us what the April contract will be on Friday!

Peter, can you imagine what direction Hills' scandals are going to go...... and how much bolder that gang will be if she has any success? (Does she live in NY?)

You know what I would like to see? Let's have Elizabeth Dole line up against the Iron Maiden in the race for the White House and see who comes out ahead. Do you suppose Mizz Rodham really thinks she can re-occupy the Big-O (Oval, that is) office?

GF

About living in N.Y. I don't know if there is a time requirment, but a remember when Bobby K. did the same thing he just got an apartment in the city and there he was. Senator from N.Y.

Looks like a direct response to a sharp rise in Dollar/Yen.
Same old tune.

Peter -- at about the same 19:00 NY time, about 200 contracts moved the MAR S&P futures up over five points ! That is the vast majority of the volume on these contracts. SURE --- just coincidental.
<;-)

****$293.00****
Welll ,posting problems a night. Quickly I believe it will take more the bonds to stop this Happy Days Train engineered by the powers to be to make this the turing point. Sorry this is short, my first got lost.

Must have been the gremlins stopping my internet provider from working for 3 hours or so and eating that last piece of wisdon I sent about the turning point. Too late! Thanks anyway!

I hear the fine print in the pending budget has a clause that will authorise the IMF to sell 3 million oz of Gold, if enough other nations vote for a sale.
Looks like the impeached one is still a puppet to some very big strings. I will not even guess where the strings lead, probably better off not knowing.

$290.00 then fought to stay at $289.70 most of the night. Current ask is $289.70.

Shorts=1
Longs=0

Taken from the gold-eagle forum,

Conspiracy and the Choice of Ideologies - Feb 17 - Kutyn�
(vronsky)Feb 16, 07:26 http://www.gold-eagle.com/gold_digest_99/kutyn021699.html

www.cnnfn.com/markets/9902/16/bonds9a/ says it all.
Gold and commodities et al, are a small but important side-play to the all encompassing effort/need to keep currencies & bonds/rates within contained parimeters. In my judgement these latest actions continue the trend of escalating desparation by the PAWNS to keep the jenie in the bottle. "Be Strong and of good Courage" it will soon burst, and our world will change overnight.
(I hope its by Friday or I won't win the contest!)

The "jenie in the bottle" represents the Central Banks/Treasury Departments abilities to issue paper IOU's and call it money(a store of wealth).
Keep Well

WOWERS, looks like the "same ol'e - same ol'e" games ! Dump on SPOT the dog in NY is the only way that THEY can play the game. Note that the PPT started the PREM on the S&P out at above 15 this morning. YES, 15 !!! and after moving the DOW up over 100 points the PREM has settled into the normal range of around 5. Sure looks to the Hobbits as if THEY are really getting worried. My question is: which will be depleted first -- their determination or their money ? Looks as if it would be best to go back to the drawing board and await the rising of tomorrow's sun. The Nazguls are flying high today. Anyone got some GOOD news?
<;-)

Another vital step in the worldwide reinflation process appears to be falling into place this morning as Japan finally accepts the inevitable. Swallowing their fear of the inflationary consequences, Japan has announced they will monetize debt by buying in more of their own bonds. This is an absolutely necessary act by a country which has tried and failed repeatedly, by relying on fiscal stimulus and mercantilist trade policy, to raise their economy. Boy, what a dead end that has been.
In the VERY short run, more bond buying means higher bond prices, not a welcome prospect for precious metals enthusiasts. But, beyond the kneejerk reaction of today, this is a welcome and totally necessary step in reinflating the world economy. Hang in there, boys. This is what we have been waiting for.

The Hobbits after searching have found one other bright and shining item, -- the APR Au contract held at the old support level -- 285 (off 6.2 points) and has now worked its way back to the 287 area (only off 4.2 points).
<;-)

MARKET UPDATE (2/16/99): Confusion and conflicting opinion reigned in the gold and silver market as commentators, analysts and traders searched for solid reasons for the big
drop in prices this morning.

Silver, which had led the rally in precious metals last week, dropped by as much as 32� while inexplicably the silver lease which had been the engine for silver's rise stayed over the 10% mark. "I think it was the yen, " one trader told FWN. "Heavy fund selling," said another. "There's not anything to go after on the upside," offered another trader. "So we're seeing the market do some consolidation now."

In other words nobody has a viable explanation. The London market experienced something of a selloff with gold down $1.50 and silver down 5�, but the real drama unfolded in New York at the opening gun.

The following appeared at Bridge News:

"London--Feb 16--The London Bullion Market revealed in a notice today that its Management Committee held a meeting at which conditions in the silver market were reviewed. "While conditions have recently been more active, it is clear that the market continues to trade in an orderly manner. The Management Committee will continue to monitor the situation," the notice said."

Is it a coincidence that the market cratered right after that meeting? What was its purpose other than reflecting a not so quiet desperation? There is little doubt that the silver shorts were feeling some pain up until this morning's dramatic drop. With the lease rates skyrocketing, it has become increasingly difficult for those with forward contracts to fulfill their silver obligations. The fact that the lease rates have stayed high today even though the price has dropped dramatically might indicate that there could have been more said at that meeting than the press has been able to learn. There has been some conjecture that because the latest silver spike occurred almost a year to the day after Warren Buffett completed the bulk of his silver purchase in 1998 and the subsequent rumors about his leasing it, that Buffett could have pulled his silver out of the lease market. Hence the spike in lease rates. Perhaps hopes are rising that Buffett can be persuaded to lease his silver again. Perhaps the spike in rates has to do with silver Buffett wants back that the lessees are having a hard time finding. If so, much rides on what Mr. Buffett wants out of the deal. There are many unanswered questions and much still in the air. It will be interesting to see what happens next.

This could be the silver market's version of the latest U.S. attack on Iraq -- a lot of sound and fury signifying nothing. I would view the drops in both metals as a buying opportunity. Because of the lack of fundamentals supporting the drop and the apparent lack of good reason for it, I am going to go out on the limb and say that it's not for real. Somebody has to buy silver and they are trying desperately to smoke out some metal. Any weak hands out there?

Gold played along with silver today. Both metals have rallied off their lows. March silver opened at $5.73, plummeted to $5.32 and is now trading at $5.43 -- up 11� from its low. February gold similarly opened at $291, dropped to $285 and is now trading at $287.20 -- up $2.20 from its lows. We'll update if anything interesting develops.

Peter, I should have gone back and read last nights postings before belching out "Giggles". Your analogy really nails it to the door. (aka Luther) The Golden Questions;
"When, How, What & Where ("If"? oooh.. shudder) will the anticipated capitulation take place?
The collective rambling of all here at USAGOLD will provide, over time, the necessary insights to the "Golden Answers". God Bless MK!

This action today is typical of what markets do just prior to taking off in the other direction-
i would not be surprised to see a big move upwards starting tomorrow--Watch out for mkts.
to go in reverse on wed. Bonds filled part of a gap, gold hit support, dow has low volume on
this rise, japan is being manipulated again...all this is part of the game , GOLD will be the big
winner stay put.....

There must be a mathematical equation somewhere that expresses what I am about to state.
When enough souls are able to predict/see a certain reactionary behavior by other souls, it seams that the predictable ones have, or are about, to loose their powers over the "souls who see".

Lose not Loose!

In kind've a sideways sort've-ah-way they booth make sense.
lose their powers...
loose their powers...
Or should I keep that appointment with the Forum's Doctor?

That was just the poet in you ! I personnally like the "loose" better. BUT either is the same end.
<;-)

Wednesday, February 17, 1999
Regulators To Lower Bank-Brokerage Firewalls

TOKYO (Nikkei)--The Ministry of Finance and the Financial Supervisory Agency plan to lower the firewalls between banks and their securities subsidiaries from April 1, government sources said Tuesday. Under a draft plan to be disclosed next month, the MOF and the FSA will propose abolishing a rule that broadly bars banks' securities units from managing bond offerings from companies whose main bank is the parent. With banks still reluctant to expand lending, the government wants to give them more latitude to propose financing arrangements through their brokerage units, hoping to create a regulatory environment that encourages a shift away from bank borrowing and a move toward capital markets. As part of the deregulation, the MOF and the FSA also plan to drop restrictions that keep banks and their securities subsidiaries from making joint sales calls on client companies. Banks and their securities units would be allowed to set up joint branches offering both banking and brokerage services. The plan also aims to make it easier for a bank and its securities subsidiary to share client-firm information not disclosed to the public, requiring only that a client company consent to such exchanges of information. But the financial regulators will leave in place rules prohibiting tie-in sales, in which a bank might require a potential borrower to do business with its securities unit as a condition on a loan. A ban will also remain on the parent bank extending loans to finance the purchase of securities through its brokerage subsidiary.
(The Nihon Keizai Shimbun Wednesday morning edition)
*****
ALL this after the BoJ flip-flops on the purchase of residual long term gov bonds. This is like the old Coke -- new Coke switch -- everything stays the same but changes !
<;-)

New York-Feb. 16-FWN--An overnight collapse in the
Japanese yen precipitated a steep fall-off in the
precious metals complex today, sources here said.

Stop-loss selling was reported in the gold and silver
futures. And fund selling was reported in these metals,
along with platinum.

"Silver and gold were down mostly on the strength of
the dollar against the yen," one trader said. "But obviously
a lot of sell stops were hit."

He added that one fund reportedly sold some 6,000 lots
of gold in the first half hour to hour of trade.

"The dollar strengthened to 118 yen, and that put some
pressure on the gold," another gold dealer said.

The U.S. dollar is up 3.17 yen for the day at Y118.77.
The greenback surged after overnight comments from Eisuke
Sakakibara, Japanese vice finance minister, who said the
government would accept a weakening yen as a natural
consequence of Friday's credit easing by the Bank of Japan
(BOJ).

The BOJ on Friday lowered its overnight call rate to
0.15% from 0.25%, although it left the official discount
rate at 0.5%.

Also early today, Bank of Japan Governor Masaru Hayami
commented that under current economic conditions, a softer
yen "is a good phenomenon that will revitalize the domestic
economy."

April gold settled $3.80 lower at $287.40. The market
fell as far as $285, with one floor contact reporting that
stops were triggered as prices fell through $288.

March silver lost 21.7 cents to $5.4450.

As was the case in gold, a silver floor trader linked
some of the early weakness to the decline in the yen.

"Then some good trade selling pushed it down," he said.
"There were some stops triggered, and basically a vacuum
occurred. There was very little buying underneath.

"The stops were up around $5.45 to $5.46 this morning.
They just pounded it right down to (a session low of)
$5.31."

Several traders also reported that fund selling
occurred, although one added that he anticipates the funds
to remain heavily long in silver.

Reprinted with permission. http://www.futuresource.com

The direct cause of this morning's decline in gold price was a sudden imbalance of supply and demand...the sell orders outweighing the buying.

OK. Now, "what was the direct cause of THAT?" we must ask. Could the recent announcement of potentially massive volcanic gold deposits a mile under the sea off of Japan have been a springboard for shortsellers to generate some momentum? That may be likely.

I'm not aware of the national or international jurisdiction of the location of these deposits. If Japan has the claim, you can be sure that they are wringing their hands at this MONETARY DEVELOPMENT.

Any other thoughts out there?

I tried to post this at noon but got called away. I see USAGOLD has posted some related news since. See? Lots of sellers...(lots of fools(?!))

"A very strong U.S. dollar. A very, very strong U.S. dollar," said David Jarvis, liability trader at Levesque Beaubien Geoffrion.
*************
Brilliant! It would appear that the news puts focus not upon things that are profound, but rather upon the obvious. Keep it simple. That's good!
Here is an equally obvious notion--"If your dollar is strong, spend it!" Otherwise, you miss out upon the benefit of a strong dollar. No rocket science is needed here, folks. Gold is nearly as cheap as its ever been. Such a time to be a free thinker and to live a sovereign life...on your personal gold standard! Live YOUR life--not the one someone tries to arrange for you to live. Where's the enjoyment in that??

"Goldfly (2/15/99; 20:43:07MDT - Msg ID:2438)
Has anybody here seen my friend Aragorn......?
Hey!! What happened to A3? He predicted a rhino, then a contest,
then....... Nada!
Come on Aragorn, get your two grains worth in there! Tell us what the
April contract will be on Friday!"
-----------------------------------------
As enjoyable as visiting the FORUM would have been, this weekend, alas, I must be content with reveiwing the archives this afternoon. Commitment to a project left me precious little time for anything else...and as you know, a prediction may require much time and thought--else it remains a useless guess.

I predict that you will not be satisfied with my prediction. I further predict that at end-of-day Friday, the COMEX contract for delivery of gold in April will BE (as it ever has) the "betting slip" between counterparties that may or may not have any connection with the metal, but have nonetheless come together at COMEX to wager each on their side of the speculation. And as this speculation walks tall among those few hunching and scrambling quietly for the scraps upon the floor, there can be little doubt as to what activity influences the price. They might just as well be betting upon the weather. And if enough people told you it was dark and stormy, would you cancel the picnic when your own eyes reveal the sun to be shining brightly? Grab your basket and special person; all tables and swings in the park are yours as many people are indeed influenced by the "bad weather on paper".

I predict that on Friday gold will be as it ever has been. Gold. Shining brightly. Who will join with me in trusting their own eyes?

This opportunity is lost when the paper guidance becomes discredited from a growing general sense of departure from reality. The day will arrive when the sunny park is full of visitors, no matter what the "storm on paper" says about the weather. Aristotle had it right. Take this picnic and walk in the park on your own terms.

In response to your request for thoughts on Japan's potential windfall subsea volcanic gold deposits, as
a professional rockhound, I've never seen it happen. Diamonds, possibly, due to high heat-pressure conditions.
Alchemy, however, just isn't part of the equation.
No49

I caught a brief blurb on CNN...never enough info to form an independant conclusion without further investigation. My own guess from the hazy footage shown as gathered by (an unmanned(?)) exploration submarine was that the gold formations or deposits were the result of some gold-bearing geothermal fluids piping out from vents upon the ocean floor...not unlike similar such deposits of other minerals.
Among the sketchy details given, mining would be very cost intensive, as the depth would require robotic extraction of the ore.

If this deposit is verified (AND nearly pure), cost of recovery may not be a determining factor in such an endeavor. Much like reaching the moon or climbing Everest. Someone/many will be ill-content to leave it sit neglected on the ocean floor. That is simply the way man has been wired. Now, would we spend a thousand dollars to pluck a wallet containing $200 from the bed of a lake? Nope.

Although it makes little economic sense, I have been envolved in a few "trophy hunts" that had no hope of profiting from the outset. As a matter of fact, I am up to my ears in such a project on Sakhalin Island, Russia, right now. The project I am consulting on has little or no hope of attaining a profitable operation, but---the technology that is being uncovered may well be "guilded" itself. That may be where the money is in the Japan subsea play. The value of the comodity recovered (if indeed there is any) may pale in comparison to the technology developed in accomplishing the project.

No49

TEST!

Just a note from a small guy who relates to your views on the "Gang". I can see how stalling an economic crash till years-end would provide the sacrificial lamb (Y2K) for the altar on Wall Street. It's always somebody elses fault, isn't it? (Even though you've had your had in the cookie jar more than once.)

I liken our current situation to an old steam engine barreling down the track. The engineers (our "Gang") are greed and envy. As of late, some of the logs used to fired the old engine are wet, many are very wet. And she's a slowin' down. (Russia, Brazil, LTCM, bonds, etc., etc.) Passengers on this train are those thinking this "Happy-Days" train will never stop, therefore they keep buying. Inertia makes a quick stop (turn) impossible but soon it will. There are signs, it seems we're seeing new ones every day now. Are you ready! By the way, I believe if there is too much time between those very wet logs it will take that much longer to turn or crash! Just my two cents!

See...if you wait long enough it goes back up.

Opinion. So much negative world financial news. Also just got word from highly respect junior-type person who got word from some TA guy, NASDAQ going down big tomorrow. DOW too, maybe. Dell reports worse than expectations (if that is possible).

Here comes another one of those "analogies". There's an old definition of a split second being the time between the light turning green and the guy behind you blowing his horn. This seems to be the case when there is a sudden reversal in Dollar/Yen. Late last year when Spot gold was climbing through $306. @ 5:15 A:M:, the same thing happened. The yen had been climbing for weeks, the gold chart was gorgeous, and The yen opened sharply lower and there was in immediate sell off . There appears be a "knee-jerk" reaction with the funds when this occurs and they all head for the fire exit at once.

So, maybe we're oversold here and we had a minor selling climax ??

Excellent!
It is precisely these "trophy hunt" operations that help to reveal man at his very best, pursuing something with a passion that cannot be explained away otherwise as necessary for survival. It is living life for life's sake. To explore that fully would take us quite off topic and beyond the interests that brought us to this site, so I'll put on the table some thoughts in this area as they relate to gold.

Here's a bold beginning..."All men are created equal." If you don't want to take my word for it, I refer you to the U.S. Declaration of Independence. Sure, someone (Socrates?) might play devil's advocate for awhile, but we would only be led to reinforce the original premise. The key word allowing us to agree is "created", because following birth an individual's particular course of development soon reveals little that approaches "equality" among men. Some are faster, some smarter, some artful, some skilful, etc. In no way should this be interpreted as a judgement on what qualities may be good or bad. This statement should help make my point: Civilization is not inherited; it must be relearned by each new generation. We start with equal footing as infants, and as we grow as individuals our concepts of civilization and our rightful place in the world ultimately define our lives. Some among each generation attain a calm, satisfied view of the world--the smallest fraction. Others are constantly beating their heads upon walls. The satisfied fraction are more often than not viewed by others as individuals who march to the beat of their own drummer. There is an easy explanation for this phenomenon.

In a modern society such as we now have, there is a wide margin of safety against anyone's unmitigated demise. As a result, many people are content to simply get by, look for the occasional free lunch, and never really reach for the zest that life has to offer. The nature of our money can be cited as the single largest contributing factor to man's unenlightened malaise. During the developing years for each individual, there are no doubt countless challenges; and the victories, when aptly recognized or rewarded, become infectious. Now, imagine that every single victorious grasping of the brass ring actually leaves you cluching not the prize that you sought, but instead, a wreath of withering leaves or maybe just a ring of smoke. Such is the paycheck at the end of every job, no matter how well done. Sure, you can try to convince yourself that the reward has value, as many people do, and you therefore continue to strive for more. But...you see your savings lose value over time. And...

Under a government that practices wealth redistribution, to see someone receive a form of public charity has an undeniable unsettling effect. The money you strive for is given away such that the reward for nothing is the same as your reward for something...and it was quite painless for the government to do under a fiat system of currency. So painless in fact, that it becomes the easy solution to many of societies problems. Over time, more and more come to expect the free lunch, while those that do continue to work might begin to wonder what is the point of it all...why can't the government simply issue EVERYONE checks so we could all have time to be philosophers, artists and dreamers in a perfect world. (Ok, so you've identified one flaw...the incentive to work remains because the working checks tend to be larger than the charity checks.) Money from thin air, paid in charity, has a twofold debilitating effect over the long term. First, it destroys morale as I've mentioned. It also results in an inflationary increase of the money supply that erodes the purchasing power of the worker's savings over time, leaving him with limited means during retirement, reinforcing his lowering morale, and perhaps requiring him to also join the ranks of the charity seekers.

Don't mistake my words as a identifying charity as a fundamental problem. It is not. As a productive person witnesses public or private charity to a person PAID IN GOLD, the productive person knows that this money was originally hard-won by somebody, and the government is not so apt to wantonly tax hard-won earnings of individuals--they would revolt! Instead, the government would rather have a hidden tax through the inflationary effects of deficit spending in a fiat money scheme. What they fail to realize is the dire effect this has on morale, and on the evolution of civilization over the long term.

Anyone visiting these gold forum pages is surely doing so because as an individual they have independently managed to learn elements of civilization that are not handed out to the rank and file. Despite its shotfalls, America remains a country (as do many others) where you can live under your terms. We ARE on a gold standard. I think I recall an old post by the venerable Aragorn III that suggested we might as easily be on a pizza standard...its all contingent upon what YOU do with your extra earnings. I am happy to step to the lectern and declare that I am living on a gold standard. I never see my salary. It is directly deposited into my checking account. I pay for nearly EVERYTHING with a plastic card, and I write a check to pay that off at the end of the month. Oh, sure, I carry some dollars for the petty expenses in life like taxi fare or a trip to the deli. But what happens with the balance of my account when bills are paid off? Well, I could invest some of it if the risk/reward looked favorable for any particular venture. But here is what I've done for the "enlightened" period of my life...a check is written to someone (such USAGOLD) who can generally be expected to handle the transaction with nary a complaint, and feed this personal gold standard with an assortment of new and old gold coins from across the planet. Amazing isn't it?

You've been created equal...what you do after that is in YOUR hands. Live well my friends. ---Aristotle

I also meant to encourage you, No49, to share more of your stories. You seem to be the Indiana Jones of the Forum, and the air I breathe is crisper with each new awareness of the richness of a fellow's life. "Inspiration" should be added to the daily list of required food groups! Thanks!

Keep on "coming out" and letting loose with the knowledge you "Lurkers" !!! Now we are going to get places much faster. WELCOME "Newbies"
<;-)

there is light.

Do YOU see the light?

Here is a thought for you to help as you guide that burdened Fellowship.
When you look at what the Web has to offer by way of gold info, you invariably encounter a lot of New World Order dialog. Ok, this isn't directed AT you, it's just that you happened to be standing nearby as I began to compose these words. (So treat me with the same mercy shown to ol' Barliman Butterbur, ok?)

These thoughts are in the spirit of my rather lengthy post a while ago...about being your own person, etc. Such a person is not likely to be a victim of any "system" in this day and age. Here is a quote I am fond of--"Have a nice day...unless you have other plans." Accordingly, I would expect that any evil that is afoot will only succeed in processing those through their evil systems who willingly get into the cue and patiently wait their turn. Who has such time? Not me!

I recently had a conversation with my dear Mother who has somehow recently come to harbor some frightful notions of a New World Order. So I told her this story, and you know, she's made a complete recovery after much laughter was shared.

None other than Ghandi was once asked his opinion regarding Western Civilization. He responded by saying that he thought "it would be a pretty good idea." And so the chuckles began.

In that vein, I asked my dear Mother what she thought about the CURRENT world order. I recall that her impression was not a favorable one, but that things were certainly better now than during the recent Cold War, or most any other time in the history of the world--Stone Age (no, she wasn't there!), Dark Ages, The Inquisition, etc. So I said, "So basically, you're telling me that you are coping with the current world order, but aren't necessarily a satisfied customer." Further, "Things seem to generally be getting better all along. Suppose we COULD fix what was plaguing this world order of ours. What, then, would we call this new world order?"

Moral of the story...live a good life and fear no capital letters. Also, don't take candy from strangers. Oh yeah, most importantly...Life is too short to monkey around with some regime's paper money. Be a sovereign individual, baby! Live well my friends. ---Aristotle

see what a few good snores will do for gold.

MARKET UPDATE (2/17/99): Gold attempted a recovery from yesterday's onslaught in the early going at one point showing a 50� gain on the day, then sold off some despite a World Gold Council report that gold demand reached the highest level ever recorded for any three month period in the fourth quarter of 1998. Strong demand in the United States, Europe and Brazil (!) carried the day. (Ed. Note: The report on Brazil contradicts the assertions by gold critics at some of the major Wall Street houses who proclaimed that the currency problems in Brazil would cause investors there to unload gold. At USAGOLD we took exception to that saying we thought it would increase demand in that beleaguered country. Apparently, it has. World Gold Council also reports demand picking up in the Middle East. With the potential for a devaluation in Saudi Arabia, we are not surprised that interest in gold would be rising there.)

Commenting on the report was the Council's George Milling Stanley: "The story of 1998 was of a growing appreciation of the role of gold as a monetary asset. There were continue strong gains in the demand for gold as an investment. In the USA, Y2K fears and concern about a possible correction in the stock market drove coin purchases to an all-time record; in Japan, the 'Big Bang' financial reforms triggered a renewed interest in gold's value in portfolio diversification; while in the countries worst hit by the Asian crisis, investment demand in the fourth quarter was already back up to pre-crisis levels. All over the world, investors are looking for ways to preserve their wealth, and increasingly those investors are starting to turn to gold. This growth in investment demand became increasingly apparent throughout the year."

In other gold news, German Deputy Finance Minister Flassbeck says Germany "remains open-minded on the question of introducing a euro gold coin" according to a Reuters report, and is looking into possibility of introducing it. According to Reuters, European Parliament "has consistently called for a gold coin with legal tender value, but the idea was rejected by finance ministers last year. That would make Flassbeck's support an important development. Bridge News reports that the State Bank of India will offer 3.00-3.50% on gold deposits -- double the going rate elsewhere -- reflecting the growing gold shortage globally.

An interesting article published by the BBC on the surprise announcement by Japan that it would be effectively monetizing its debt in a move to inflate its beleaguered economy also advises that the move might be enough to force China to devalue its currency in the near future. This could move the contagion to a fever pitch elsewhere in the world and infect the U.S. and European economies, according to the article.

That's it for today, fellow goldmeisters. Today could be a turnaround day. More later if warranted. Have a good day.

German Undersecretary of Finance Heiner Flassbeck said in a speech to the European Parliament's monetary affairs subcommittee that U.S. economic growth in the recent six months was due primarily to people drawing on their savings and as result of the booming stock market. "It's another question whether it's sustainable," he said--also expressing the concern "it would be fatal for Europe if that American bubble burst now."

It is certainly something to ponder when officials speak openly of the market as being a bubble, rather than reserving judgement--"It looks like a bubble, feels like a bubble, but I don't know...could be a new paradigm"!

You may recall that EU finance ministers voted last year not to mint gold circulation coins, authorizing instead the production of commemorative coins. Mr. Flassbeck said EU finance ministers haven't ruled out minting a 100 euro gold coin to enter circulation in 2002. In response to a question on whether EU countries plan to mint gold euro coins, Mr. Flassbeck said, "We'll check and see whether there might be a possibility after all."

I see that there is no beating USAGOLD to report the good gold news. I must learn to type faster!

Today we announce the winners of the great jousting (verbal) contest over the last weekend. And what a contest it was....For posters and lurkers alike it was a marvel to behold. As I must choose, it was again a difficult task and I could not clearly establish a winner as it came down to two extraordinary posts that came back to back. So the three silver coins go to two different posters:

Peter Asher....Msg #2400...Electronic Alchemy. Who thereby stimulated another great post. Peter your consistent contribution is worth its weight in gold. Three beautiful silvers for you, my friend.:

SteveH...Msg #2401 for his stellar response. I think I speak for all, Steve, when I say we greatly appreciate your daily presence at USAGOLD FORUM.

Both inspired. Both get the three silvers.

The runners up are:

Goldfly...Returns to the winners' circle with Msg #2406 because he had not only the hobbits at large but the FOURM hobbits all humming that tune --- We've got gold Babe!

Farfel....For an strong dissection of an opposing argument. Off subject but worthy of the sivler nonetheless. Simply can't let it go unrecognized, Farfel.

HopeingII..For an excellent first post and recapitulation of the issues before us. Will he get the gold too??

Here's the predictions on the gold price 2/19/99. Read 'em and weep:

287.60 HopeingII
291.10 JA
293.00 Tico
293.60 Pa kua
294.90 Goldfly
295.80 Peter Asher
296.50 Arizona Hiker
297.50 T. Remital
300.00 Gandalf the White
300.20 Hobgoblin
301.10 Gold Dancer
303.50 Steve H.
307.00 The Stranger
320.50 Buena Fe

Just for fun...

The average price predicted: 298.70
The mean price predicted: 297.00 (between Arizona and T Remital)

If I left anybody's prediction out, please let me know. Richard, Oregon: I was going to include your prediction but Tico had already taken the 293 price. I think I did the "mean" right. If I didn't I'm sure one of our engineers will let me know. The winner will be announced after the close on Friday.

Thanks, all. That was fun. We'll do it again soon. MK

Summoned by USAGOLD, 'I think I did the "mean" right. If I didn't I'm sure one of our engineers will let me know.'

"It all depends upon what the meaning of "mean" means." (Thank you, Mr. President!)
The mean and average are two terms for the same concept. What you have called the mean is properly called the median.

Your calculations are quite correct, though.

Your summary of this weekend reminded me to comment to Goldfly. As I am fond of a particular 'sign off', the song struck me as quite delightful.

got gold? (babe)

I would guess that you're acquainted with a man named John Galt ... hell of a guy.

Until tonight I have only lurked these pages sifting through the rhetoric looking for guidance. I have gained much insight concerning the forces that drive markets. I have also seen events micro analyzed beyond what may be relevant.

Some basic facts that some may be overlooking:

a) People are like sheep, when the leader turns most of the rest mindlessly turn to follow.

b) The type of individuals that post here probably scored in the top 10% of their class. which leaves the other 90% with their nose up another sheep's butt.( not pleasant, but at least warm and secure)

c) It only takes an old man and a couple of dogs to control a lot of sheep.

Heaven forbid, but I believe the gold price can be held in check for a long time. News of massive gold deposits off Japan! Just the kind of spin that smashes rallies! My solution: forget bullion, it may not rise for a long time, as the manipulators jockey to hold gold low. They can devalue gold the same way a government can devalue currency, just print more paper. Buy something they can't produce, something that will rise in value in spite of the manipulation: Pre-'33 MS-60 or better. They won't find any of those a mile deep off Japan! Old coinage will hold collector value even if they do find King Solomon's mines.(humor)

By the way, speaking of sheep, when they announced 18" of snow here six weeks ago people cleared the grocery store shelves like a payday in Moscow. I can't imagine the havoc that years end will bring. Got provisions?

Heh, heh. But seriously, I've never read Ayn Rand, but from what I've been told by friends who have I would surely discover that the tales would reverberate with the ringing peal of truth. Some day I'll find the time. Y2K by lamplight?? Is Galt in "Fountainhead" or "Atlas Shrugged"?

Here's an odd fact for you. I've read stacks and stacks of books, new and old, good and bad, fiction and nonfiction...pretty-much covering the spectrum. Tolstoy, Dostoyevski, Dickens, Maugham Clancy, Wilde, Bronte, Hawking, Clarke, Hesse, Dumas, Dante, Eco, et cetera. And would you believe that it was Tolkien, of all, that first really clinched the whole "free will" thing for me. (It is great to see the likes of Gandalf and Aragorn here!) LotR can be appreciated on many levels--which likely explains its wide and timeless appeal.
Life IS what you make of it...so live it on your own terms. There is no easier reflection of this than choosing gold as your means of "cash savings." But then, I'm open to suggestions/debate on that account. That's why I read. To find the plum in the pudding. ---Aristotle

I would totally agree that the posters and lurkers here are in an elite group. Why must they seek the loving approval of the rank and file to feel validated, i.e. through a sudden shift in public opinion that favors gold? That day will come, my friend. The internet is sparking a renaissance of free thought...people daring to learn and think for themselves.
You are right...we shouldn't sweat the details. Our validation is a feeling of contentment, knowing that we are the lucky ones to be ahead of our time. I'd say in that regard that bullion is grand. And as you point out, those old coins aren't exactly growing on trees. I have some of each, and I must say the historic circulation coins give you a profound sense of the past...AND the future! ---Aristotle

First, welcome to the forum. It took me a couple of months before I worked up enough nerve to test the waters also. I agree with you. I can only imagine that 90% of the posters finished in the top of there class, however, there is always me. I subscribed to the old Beachboys song--"it was fun, fun, fun, until Daddy took the T-bird (in my case, Camaro) away. Those were the good ole days--don't regret a moment of the extra year I had to put in finishing my degree!!

No49

Yes, I agree that myself sometimes does micromanage far to much, but I love to feel the pulse of the beast and await to see the fear enter his eye. Like today and the APR Au contract action reminded me of a conversation (email) that I had with a person that I respect much for his work. That is S. Jon Kaplan and his "goldminingoutlook" comments and reviews. One day Jon stated that a dramatic event would happen to SPOT the dog at exactly 11:30 NY time. To my surprise, it did happen the next day and at exactly 11:30 NY time ! I could not pass up the opportunity to ask of him "WHY at exactly 11:30 NY time ?" He replied that 11:30, which is the end of the overlap of SPOT trading in London and NY, the traders in NY can make an impact of major proportions with a smaller amount of capital. SO, I see today that at exactly 11:30, THEY dumped a bunch of APR Au contracts on the sell side. Over 120 sales volume dropped the price $1.5 in less than ten minutes. An example of your "Shortsiders" in action.
BTW, I shall have to download and study all the GREAT posts in the last few days, when I find more time. Right now a number of Orcs are pounding on the door.
<;-)

Modern natural philosophy wrestles with "causality",

http://chaos.fullerton.edu/~jimw/kill-time/

and the twinkle is aglow.

If that is what modern philosophy has become, they can't pass me the hemlock fast enough. Socrates, step aside!
Tough stuff to plough through; I haven't looked (even accidentally!) at a differential equation in years. The odd thing is that a friend and I were discussing very nearly this same material (sans equations and physicist references), free will and "killing" time. It's odd how well things come together at times.

So basically, the thesis you've referenced is proposing that I actually have little choice in the matter...I am predestined to live on my gold standard. Here is my answer to that notion of no free will: the next time I make a routine money exchange of gold for dollars, at the very last second I'll say, "No, wait! Toss in an EXTRA coin." So, Phoenix, how do you like THEM apples?! Having made such a vow to prove my free will, now I'll have to plan this month's expenses carefully, cutting back on pints at the pub, skipping lunches on Tuesdays and Fridays, staying home evenings. Man...it's like my whole month has been suddenly cast into place... :-) ---Aristotle

Thank you again for the recognition of the content of that post. It is exhilarating to win something for the fourth time, although I must admit I didn't have to go up against Aragorn, PH, AEL, Or Turbohawg this time around. Now if Gold will get back up to 295.80 for Friday's close, does 5 wins make an Ace?? Seriously though, the best part of all of this is the interchange of ideas with all the others.

Less then two years ago, all I knew about gold was that it was a soft yellow metal that we were, for awhile, forbidden to own; and that at times it was a hot trading item. I had played with stock options a lot but had never touched commodities.

Then in June of '97 Robin became convinced of Nick Guardio's viewpoints, bought some Eagles, and we discovered your site as a source of commentary. You were my first professor on the subject of gold, and then when you created the Forum, I sat at the feet of the other instructors and began to understand. I had been trying to write about economics for two decades, but couldn't get past the confusions of monetarism until your site came along. When you announced the first contest, I took the plunge and here we are.

It is heartening to see the flood of new posters generated by this latest event. The Forum is becoming a very profound think tank.

Long Live The Host!!.

With all the theory and advice bandied about these days about the stock market, gold,
bonds, indexes and options we can't lose sight of the fact that we buy, with one thing in
mind, hopfully some one will take it out of our hands at a higher price...for those who have
sold short, in hopes that some one will supply them at a lower price. For those who are
short gold, must be a little nervous when there are daily reports of tight supplies of
bullion, plus the lack of gold for lease and slow producer selling.There Is going to be a
explosion one of these days when the shorts all try to capture the limited supply of gold
at the same time.....they wont be able to ask Greenspan to bail them out...when they lose
there shirt.

I just exercised some free will by scrolling through that piece of sophistry as fast as my mouse could carry me. I once tried to engage a physicist in a discussion about gravity being the summation of the forces that hold electrons in orbit around nucleuses and if we knew what that was and could reverse it, we would have anti-gravity but everything would fly apart. He responded with a long winded lecture on the fact that space is curved.

An early Beetle Baily cartoon had him and a beatnik character goofing off under a tree and the guy is explaining that beatniks are people who sit around all day and search for truth. So. Sarge comes along and tells them "Get to work or you'll pull KP for a month" and Beetle says "I guess that's some of that truth right now".

I could go on but I just decided not to.

aragorn wrote:
"It is certainly something to ponder when officials speak openly of the market as being a bubble, rather than reserving judgement--"It looks like a bubble, feels like a bubble, but I don't know...could be a new paradigm"!"

... yes, as in "Hey, buddy, can you para-digm?" :)

onlychild wrote:
"b) The type of individuals that post here probably scored in the top 10% of their class."

not me! high school dropout... and should have dropped out earlier.

"The only time my education was interrupted was
when I was in school." --George Bernard Shaw

A tall but solidly built figure robed in white, stands amongst a group of short and wiry characters whom are all begging him to perform some sort of a trick or act of enjoyment for them. He finally relents and as he prepares, mumbles to himself, "I'll bet that HopeingII will not be fond of this !" He takes a very, small satchel from within his white robe, selects only a pinch, and sprinkles it into the air while chanting, "APR Au rise from the depths". The assembled "halflings" cheer and runoff to see the results of the spell.
<;-)

Wednesday, February 17, 1999
Short-Term Interest Rates Drop Sharply

TOKYO (Nikkei)--Short-term interest rates dropped sharply in Tokyo Wednesday as the Bank of Japan showed it intends to guide short-term rates to a near-zero level. The average rate on unsecured overnight call loans, considered by the BOJ the benchmark for its market operations, declined to a record low 0.08% on Wednesday, below 0.1% for the first time. Interest rates on contracts with trading periods of about three months dropped across-the-board to record lows. Rates on certificates of deposit also sank Wednesday. City banks offered three-month CDs at 0.3-0.33%, down 2 to 5 basis points. The three-month yen TIBOR (Tokyo Interbank Offered Rate) stood at 0.53077%, down about 2 basis points. At such low rates, commissions make trading overnight uncollateralized call loans unprofitable. Call loans form the core market where financial institution adjust their daily fund procurement. But life insurance companies and other institutional investors have begun pulling out of call loans, and some analysts fear the call market may fail to function.
(The Nihon Keizai Shimbun Thursday morning edition)
*****
AND the NIKKEI which closed down 74 on Wed. opened Thurs. down 74 at 10:00 am.
<;-)

Peter...your 2491 had me rolling throughout! I'm glad you found the freedom to use that scroll bar! I'm STILL having flashbacks.

AEL..."'top 10% of their class.' not me! high school dropout... and should have dropped out earlier."
See? You just PROVED that you were the top. GPA only means what the student wants it to mean. Good Shaw quote. Education never ends. And on that note, did you see my related post--was it last night? My how time flies!

"Time flies like the wind. Fruit flies like peaches." ---?

Is it too late to change my contest entry to $317/oz.?

Speaking of GBS {Shaw) My favorite quote of all time was one used by Robert Kennedy often but which supposedly came from a character in a Shaw novel. "Most people look at things as they are and say 'why'. I dream of things that never were and say 'why not'."

Regarding the "top of the class" consideration, I suspect several more of the rugged individualist Forum Folk will be posting they're denials on that. I'll be back later with " dropping out, the earlier decades" meanwhile check out post #1836 Jan. 15 '99.

I am flattered by your reference, however, most of the--ah, shall we say "incidents" that have befallen me through the course of my career, were self inflicted.

For instance, I can remember, as a young graduate, jumping at the chance to journey to Thailand on a research project back in the very early 70's. I think that the most valuable knowledge I attained there, was that if you get your Landcruiser stuck in quicksand while fording a jungle stream, a fullgrown two (maybe three) ton bull elephant can't pull it out. He can pull out one half at a time, but not all at once. My God there was hell to pay over that!!

No49

Okay, so we're not all valedictorians. My point was that everyone at this site is of above average intellect, and not subject to becoming the "sheep" I mentioned. I didn't do so well in High school myself, but since then I've tried to excell in my endeavors. The thing that alarms me about the public in general isthe complacency, apathy, and acceptance of the status quo.Or worse yet, if they don't accept the status quo, then many look to the government for laws or give-away programs to raise their standard of living rather than get off the couch. those are the same individuals that we should fear in the approaching crisis. They will attempt to have our wealth legislated away once their fiat currency has been reduced to bird cage liner. Has anyone rea Dr. Zhivago? I teach at a vocational school, and most of my students are twentyish. There seems to be a general belief that if they don't have it and you do, then you owe them some or all of it. I can just picture some of my students, as children, kicking and screaming "no fair" because the kid next door got money for the ice cream truck and they didn't....Shut up! When I was a kid the prescribed treatment for misbehavior was 32" of genuine cowhide, now it's 10mg of Ritalin. Be afraid my freinds, tell no one of your hoarding, lest you become a target when the poo-poo hits the fan. On an unrelated note a major power plant was leveled by an explosion here last night, now I'm really worried about Jan. 1. It probably won't be back on line by then.

$286.30...no now $286.70...talk of sleep awakens the slumbering giant. Wake up...wake...up; now go back to sleep...nyuk, nyuk, nyuck.

You know, today's readings impress me that most of us feel that something big is about to happen. You know that feeling of angst (Sartre would be proud) or impending 'something' that you know is or about to happen and you can't ... quite...put your thumb on it. Anybody else feeling this way about the markets, gold, silver, stuff?

SteveH, I have exactly that feeling. My guess is that the event itself is not what will surprise most people, but rather the magnitude.

onlychild, a silver lining in this economic decline that many of us think is coming may be that all those people you refer to are going to have to learn to earn. With the debt load, at some point the govt will be threatened with bankruptcy, spending will have to slow dramatically, and there will be nowhere for the parasites to turn. Of course, chaos may ensue for awhile ... those with something better be prepared to protect it. But in the end, we'll have the opportunity to win back our freedom.

NORTH of 49, I can relate, dude ... can I ever !!!
>I subscribed to the old Beachboys song--"it was fun, fun, fun, until Daddy took the T-bird (in my case, Camaro) away. Those were the good ole days--don't regret a moment of the extra year I had to put in finishing my degree!! <

I spent most of my "go do your homework" time building speedboats in the garage and neglecting studies. I managed to get into a major university by virtue of good College Boards ( early form of SATs) and a good senior year even though I was at about the lower 80% of the class. Next, I discovered chair lifts ,real mountains and real girl; and college crashed and burned also. Then at age 27 I encountered Ayn Rand and "never looked back" as they say.

To me the basic premise of "Atlas Shrugged" was summed up by Francisco's statement "An honest man is one who knows that he cannot consume more than he produces". This was the original trigger to my interest in economics, and is the foundation for all of my own theories.

After Atlas I read "The Fountainhead", which led to me chucking the suit, tie, attache' case and the family business and running of to Europe were I bluffed my way into Architectural positions In Berlin and Florence, after a semester of night school in that work.

When I returned to N.Y., The "East Village" was happening. My boat building had led me to a hand crafted furniture hobby and I found myself making things for others. I had been raised to believe that success in life came from getting a degree, a good position and "going up the ladder" etc. But when someone came in and bought my first showpiece it was "the discovery of The Holy Grail ". I was not an employee nor an employer (yet), and the underlying principles of economics were quite visible.

At that time the big hangout was "Max's Kansas City"; artists, writers, musicians, and craftspeople; sounds of John Denver, Jim Morrison, and Neil Young on the Juke Box. One night a college student and a friend were playing a game of trying to find Kipling's three monkeys and he decided I was #3. So, this 19 year old girl comes up to me and says " Your the third monkey, the one that speaks no evil". This was the opening line of a dialogue that is now in its 33rd year.

Well everyone we knew was into Tolkien's work, and we became Middle Earth Inc. with two white siamese cats named Gimli and Arwyn . (Even now, Robin has a little candy machine route called Pippen Vending). One day a girl came into the showroom and flipped out over the furniture saying it was exactly like that in the "hobbit holes". I pointed out to her that there were no illustrations in the Trilogy and she said "but I saw it there!" --- So, all of you Middle Earthers, maybe once upon a time it was, and we were ??

Well enough of reminiscing, I was going to ponder the printing of paper gold by writing naked options, but as Scarlet says, "Tomorrow is another day."

Maybe we shouldn't declare how smart we all are until gold crosses, say $400. If anybody is interested, you can take the absolutely free I.Q. test at www.iqtest.com . It takes 13 minutes. I got a 155, which just thrills me to death, but, although the test appears to be legitimate, I have no idea how accurate it is. I'd be interested to see how somebody else does. Anybody?

The second part of your post leaves me shivering with the chills of truth. If you havn'nt been with us for very long you might take a look at Msg.# i863 17 Jan PM. I've been hoping for some dialogue on the subject you just brought up.
But, it is a sensitive area to some people.

APR Au now heading up --- just hit 287.4
<;-)

This is a follow-up to what I pointed out earlier today--German Undersecretary of Finance Heiner Flassbeck expressed concern of the booming stock market, "it would be fatal for Europe if that American bubble burst now."

You should appreciate that Japan holds nearly this same thought, but upon a variation of the theme.

Europe wants a strong consuming American economy to fuel European economic growth. A brisk export demand helps as they push for full employment. Where goes the DOW, so goes consumer spending. The concern is a macroeconomic one, not a monetary one--the euro structure is their shield against a collapse in US Treasuries (and dollar decline). The barb is that despite the direct insulation against this, the eventual falling bond market likely would drag stocks down and consumer confidence with them. The "man on the street" has come to associate prosperity with stocks, and holds little knowlege of Treasuries. Woe is he that does not understand the dollar stands upon bonds alone.

Japan also wants a strong consuming American economy as the flow of fuel to the sputtering economic conditions. They are caught upon the fence in the worst of positions; having adopted a national fiat monetary system, yet retaining the honorable management style of a gold standard. Unlike the U.S., they opt to earn their monetary credits through trade exports to others, while the U.S. does not hesitate to generate monetary credits through bond issuance. Under the fiat system, in the normal course of the "business cycle" the contraction of the money supply is a consequence of the money cancellation phenomenon upon debt repayment. There is a relative shortage of Yen, and "honor" will not allow simple U.S.-style money creation. Woe is he that does not understand the Yen stands upon the dollar alone (very nearly so).

Japan cannot easily liquidate the vast monetary reserves for conversion to Yen. First they must sell the U.S. bonds for dollars, and this they ARE doing--carefully! Selling was curtailed during the uncertainties of the impeachment proceedings...the effect would have been amplified. That is why Friday, upon the announcement for acquittal, the Bond was sold with vigor. Now you see the timing in some degree. As bonds are sold, supply and demand gives an ever lower price for the progression of sales. Next, these ever shrinking dollar payments must purchase Yen on the foreign exchange market. Again, each successive wave of dollars seeking what Yen may be available for the desired repatriation to Japan will result in ever less-favorable exchange rates. Many bonds will ultimately yield few Yen.

For now, the Yen is as strong as the dollar it stands upon, but the position is precarious. Selling dollars to buy Yen is to erode the pillars of the Yen's foundation, yet the Yen grows stronger in the dollar/Yen exchange rate?! But look further! As all bonds are sold, and all Yen are bought, and the dollar goes to zero as the Yen goes to the sky...you are laughing as you see that this new strong Yen now stands on NO foundation! To save the economy, Japan must indeed sell bonds cautiously, but to save the Yen these dollars must bid for gold directly as the replacement foundation of monetary reserves. To maintain honorable Yen management, they might with great honor peg the Yen value to the obvious new value of gold...it would be priced at thousands of dollars for each small ounce. Not that gold itself has changed...only the great recognition. And the small value of the dollar!

got gold?

Well, if there's no Wall Street Bear to run gold up the tree, we'll just have to settle for the Russian one.

Spot up 1.50 & GCJ9 up 1.1 (delayed)

going to try for a few more winks. Let's see how the price handles that.

Hey, found this most contrarian paradigm buster at the bottom of Kitco. Had to read the whole thing to find it. Most interesting:

Date: Thu Feb 18 1999 00:10
aurator (The Golden Constant------reprise------) ID#257148:
Copyright � 1999 aurator/Kitco Inc. All rights reserved
Bill2j your Wed Feb 17 1999 20:01

With all due respect you have further confused me. You
stated that gold is NOT a hedge against inflation. I assume
that means you agree that it loses value and purchasing
power over time due to the ravages of inflation. If it loses
value and purchasing power over time why would I want to
invest in it.

----
I apologise for confusing you, Bill2j, personally I find life very confusing, especially that part of it in which one is
endeavouring to pursue facts, if one cannot truly pursue "truth" one would have thought that pursuing 'facts' should
be easier, eh?

Anyway, I am grateful to you for your question, it gives me the opportunity to post once more, almost my first post
to this site almost 2 years ago. My first posts merely asserted that gold was no hedge against inflation, they
garnered no responses. So I had to dig up the notes I made when I first read Jastrams' book about 10 years ago,
when my goldbuggery drove me to many public libraries in New Zealand to read what I could about GOLD.
Fortunately I made good notes, especially on some of the tables in his book.

I would dearly love a copy of this book, but don't feel like paying an ounce of gold for the privelege of owning an
autographed copy, the only ones apparently available.

So, forgive me for my windy introduction, and for discombulating your belief in gold as a hedge against inflation,
here is the original post, now with a couple of extra footnotes.

------------------------------



Date: Wed Apr 30 1997 23:34 aurator ( jesthefaxmon ) :
Mad dog: your 02:53 on deflation, this is a table reproduced from Dr Roy Jastram's *The Golden Constant*.
Apologies if this look wierd, I've tried before to get tables here but am defeated by Macintosh to Windows
translators. The table should be in 7 columns but technical gremlins...
Purchasing Power of Silver & Gold in Inflationary cf Deflationary Times. The table shows the change in General
Commodity Price Index cf the change in the Price of Silver and Gold

INFLATIONARY

Years | CMdty Price% | Silver% | Gold%
1623-1658 | 51 | -34 | -34
1675-1695 | 27 | -13 | -21
1702-1723 | 25 | -18 | -22
1752-1776 | 27 | -22 | -21
1792-1813 | 92 | -33 | -27
1897-1920 | 305 | -61 | -67
1933-1979 | 2149 | 241 | 27


DEFLATIONARY [General Commodity Price decline]
Years Price% |Silver%|Gold %
1658-1669 | -21 | 27 | 42
1813-1851 | -51 | 69 | 70
1873-1896 | -45 | -6 | 82
1920-1933 | -69 | 32 | 251

While the study [1979 from memory] is not without limitations, it does show that you're crazy to hold gold during
inflation, and crazy not to hold it during deflation.
�Avoid experts who say gold is a good hedge against inflation.�

Auroelf; Your 22:39 of april 29 "Trouble with charts is we see what we believe" is the most honest recognition I've
yet seen on kitco on the limitations of any kind of TA.
How about: I wouldn't have seen it if I hadn't believed it.
Or :
How do you know that what you know is not what you believe?
Anyone care to guess on which side of his tunic the village idiot will dribble tomorrow??
Great Site, highly addictive, despite my antipodean contrariness.
Thank you all for your generous input.


-----------------
Jastram's Conclusions, in his own words:
INFLATION:
"Gold is no hedge against inflation of a prolonged character.
Even worse, it lost purchasing power consistently and seriously in each inflationary episode"
DEFLATION:
"In all four delations purchasing power of gold appreciated handsomely" - " The Golden Constant: The English and
American Experience 1560-1976, Roy Jastram

--------------------

Here, in Jastram's words, is a summary of his findings:

" The evidence drawn from the English experience for 400 years is clear. Gold is no hedge against inflation of a
prolonged character. Even worse, operational wealth ( purchasing power ) consistently and seriously in each
inflationary episode.... From 1897-1920, a person would have lost two-thirds of his operational wealth just by
holding gold in bars from the beginning to end. And this was in the golden age of the gold standard."

What about deflation? Jastram continues: "Four pronounced price deflations took place in the four centuries
recorded, with the three most severe occurring since 1800. In all four price recessions operational wealth in the
form of gold appreciated handsomely. When one sees that just by holding gold for 13 years from 1920 to 1933,
operational wealth would have increased 2 1/2 times, one realizes that gold can be a valuable hedge in deflation,
however poor in inflation."


----------------------


Nevertheless, gold does maintain its purchasing power over long periods of time. The intriguing aspect of this
conclusion is that it is not because gold eventually moves toward commodity prices, but because commodity prices
return to gold [the retrieval phenomenon].
Roy Jastram The Golden Constant. p. 175

--------------

I hope this answers your question:

"Why would I want to invest in it"


We in NZ are dependent on primary produce for most of our revenue and export. Primary Commodity prices
have been in a decline for the past 2 years, and, dollar adjusted for a lot longer..

I hope this helps.

Congrats Peter!

Steve

Well, producer prices rose .5% this month. Last month they were up 1.1%. Last month it was mostly tobacco. This month it is food and energy. We've had a steady parade of analysts telling us that there is no inflation. Ha ha ha. When are people going to wake up? Compare these numbers with what we were seeing one year ago. RAPID MONEY CREATION ALWAYS MEANS INFLATION. This is not rocket science.

MARKET UPDATE (2/18/99): Gold recovered somewhat this morning from its early week battering still basking in the glow of the spectacular demand numbers released yesterday by the World Gold Council and ignoring the dollar's strength against the yen. Yesterday's WGC Demand Trends report put gold demand in the fourth quarter 1998 at a record. Japan's government is committing patricide against the yen as the world's top finance ministers prepare to go toe to toe at a G-7 conclave this weekend in Bonn. Public attention is being directed toward discussion on currency target zones (Please list under the "Never Will Happen" column) while the finance ministers privately will be discussing ways to keep the world economy glued together with the money printing presses rolling in Japan and China casting nervous glances across the East China Sea wondering if yen patricide is an invitatition for it to devalue its already wobbly yuan. (Please list under the "Likely Soon" column). Meanwhile, our own Mr. Ruben, not given to suicidal impulses with respect to the U.S. economy and the dollar, politely put down the prospects of currency target zones for the obvious reason: It would take U.S. monetary policy out of American hands and put it directly in the hands of the European Union. One would hope that such enlightenment would not be a passing phenomena. It is comforting to hear Americans defending American interests even if it is in the arcane world of currency values. We hear so much these days about consolidating worldwide financial interests and not enough about what certain economic policies might mean to the people living in the countries under consideration beyond the effects on the sacrosanct financial sector.

As for gold, London traders were calling the market "a bit short" after Tuesday's nuking of gold at the open with one "fund" selling 6000 gold lots -- that's a lot of gold. It has taken most of the first part of this week to recover from that single sale. Meanwhile, producer prices leaped .5% with energy and food leading the way in double digit fashion. Food was up 1.6% and energy -- 1.8%. The last time we saw numbers like that people were lining up at the gas pump, gold was soaring and the president lusted in his heart not in the Oval Office. My, how times change. ..

And so it goes, my friends. We will update if the producer price news translates to anything worth talking about in terms of the price of gold. Have a good day, my fellow goldmeisters.

Not to worry, the Hobbits are still singing "I've got aUUUU Babe!!!"
<;-)

darn fingers
<;-)

What are you, an insomniac? You post at some pretty odd hours.

I read about Dr. Jastram's findings with some interest. As usual, I don't know enough about a subject to put up much of a challenge. I do know about the behavior of gold vis a vis inflation/deflation in my lifetime however, and I think the experience contrasts diametrically with Jastram.

I remember when me father retired in the late Sixties thinking he would get by on his stock market gains (funny - a lot of people are apparently doing that now). When the great inflation arrived in the Seventies, he wound up dumping his stocks and buying an apartment building. As it turned out, he did quite well. He would have done even better, perhaps, had he bought gold.
I retired two years ago, thinking, like my father twenty-five years ago, that I would get by on MY stock market gains. Last year, I became convinced that the Fed was reversing course and had adopted a pro-inflation strategy. I decided to do the same. Only, like many of my generation, I have my money in IRAs, so, instead of buying an apartment building, perhaps, I bought gold mining shares. I might have bought oil stocks or REITs. I might have bought gold coins. But, an apartment building, per se, won't go into an IRA. Neither, obviously, will antiques, persian rugs or any other collectibles. It seems to me that this distinction alone will make gold even more popular than it was last time.

Illustrates the lengths to which the power structure of govts are willing to go to maintain their chokehold during this turning in man's history. They're not going down without taking everyone else with them. A scene similar to this one is likely to be played thoughout the world in the not-too-distant future.

http://biz.yahoo.com/rf/990216/brp.html

Tuesday February 16, 11:04 pm Eastern Time

Japan on the road to ruin, say Warburg analysts
By Jim Parker
SYDNEY, Feb 17 (Reuters) - Japan is on the road to ruin, which no amount of pump priming or monetary easings can avoid, senior Japanese analysts from broker Warburg Dillon Read said here on Wednesday.

The policy shift towards a weaker yen announced this week would only postpone the eventual day of reckoning, they said.

"The Japanese government is stumbling on the road to ruin. It's too late, there's no way out," Warburg's Japanese political analyst Shigenori Okazaki told a media briefing.

The consequence for financial markets was a "sell Japan" scenario, starting with equities, then bonds and finally the Japanese yen.

"The hole is so deep right now that it's becoming very difficult to think of a positive risk case for Japan," Warburg's senior forex/interest rates strategist Cameron Umetsu said.

'Monetisation', the process of printing money to cover the flood of government bond issuance, was now inevitable, although would be introduced gradually, Umetsu said.
"It's a question of when, not if," he said. "They are heading towards a major shift in the policy regime which is essntially yen negative."

The yen went into reverse on Tuesday after Japan policymakers publicly encouraged a weaker currency and acted to ease a glut in the government bond market.

The dollar stood at 118.10/20 yen by 0400 GMT on Wednesday, compared with 118.65/70 yen in New York late on Tuesday. The dollar surged more than three yen in New York overnight, its biggest one-day gain in a month, to reach 118.90 yen, its highest point since December 9, when it traded at 119.45 yen.

In an interview with Reuters Television on Tuesday, Ministry of Finance official Eisuke Sakakibara said the G7 would also accept a weaker yen as a result of the BOJ's credit easing last Friday.

"Sakakibara's comments yesterday certainly suggest that reality is biting," Umetsu said.

However, the policy change carried major dangers in raising the risk of capital flight, a sovereign debt downgrading and stagflation.

"The whole idea of a 110-120 comfort zone for dollar-yen has gone out the window," Umetsu said. "It's very dangerous to assume that the yen in a monetisation scenario will weaken gradually. This will reinforce the perception that dollar-yen is a one-way bet north."

Depreciation of the yen would also take the pressure off policymakers to restructure the Japanese economy to stimulate consumer demand.

"The whole question of structural reform is off the table again," Umetsu said.

Okazaki said monetisation offered the easy way out for the Japanese government, whose economic stimulus measures, concentrated on wasteful public works spending, had backfired.

He predicted the government would resort to massive tax hikes after the next general election, sending the economy into a long and deep recession.

"The current policies are not going to lead to an autonomous recovery," Okazaki said. "Japan is like the Titanic. You can keep pouring in fuel, but the boat is still going to sink."

Between 1933 and 1979 -- and inflationary period according to Jastrum -- gold appreciated 2500% from $35 to $875 in dollar terms. So unless, I am missing something, the argument is flawed. In my view, gold protects against inflation or deflation and it makes no difference in what order they arrive. I think a better way to interpret Jastrum's numbers is to say that gold appreciates in deflations as long as the government mandates and maintains a price while all other commodities plummet. I do agree however with the idea of Jastrum's Golden Constant. In the long run, gold reflects fully the value of a currency. I keep going back to the dictum about a quality new suit -- that one ounce of gold will always buy a quality new suit. When an ounce of gold exceeds in currency terms a new suit, it is overvalued. In 1979, when a quality suit ran in the $300-400 range, gold was overvalued. Today with a quality suit running in the $600 to $700 range, gold is undervalued -- a state of affairs worth noting. Where Jastrum's Constant has application is in understanding that no matter what political pressure is brought to bear on the yellow metal, it will eventually find its true value. You can count on it.

"Do you own the dollar that is in your wallet?"

I don't recall any past discussion occuring on this most important of topics. I'd sure like to get the general impression of everyone. Although I'm not claiming to *know* which is the *right* answer, consider this question also:

"Do you own the gold in your pocket?"

Just so that we all start at the same place on this road to learning, I setforth the WEBSTER'S definition of the word "own" as you have used it. This is as a VERB and as such means, "to have or hold as property" ! See, right there we have a conundrum ! -- have and hold are two very different items and would fit either of your posed questions. This may be the major problem as one must use different terms to define who has full rights of "ownership". BUT, if you wish to trade me your Au for my dead presidents, right now, we can discuss this in length and then when you wish to have me sell you back the same Au, we can barter for the trade. Have you a firstborn ?
<;-)

Nothing is ever quite as simple as one would think! You raise a valid point that we must address right away or else we'd be shooting at different targets.

By use of the word "own" in my question i intended the meaning "retain the ultimate claim", that is, no entity can demonstrate a superior claim of 'ownership' or 'right' to the property in question.

My, I think this question might be beginning to answer itself... Here's something to get the thoughts started...think about where dollars and gold each spring into existence.

I think that Jastrum may have a phase problem in his analysis. Gold market movements tend to anticipate future inflation trends and deflationary events. This movement tends to come in bursts well before the trends play out. So a lack of performance during an inflationary trend may just be that gold has already reacted. Similiarly, for deflationary environments gold leads the trend. This is consistent with the "sensitive" nature/attribute of the gold markets. JOPO.

OK, now you have done it! When the Hobbits read the last words of your post, a thought picture entered their collective minds at once! "--gold spring into existance." They pulled out the calendar, determined that, in this part of Middle Earth, Spring was just around the corner, and all the Hobbits immediately went out to condition the suction dredges and diving equipment as they all know that placer gold comes from the spring runoffs moving the sandbars and opening Mother Nature's treasure house. BUT, I do not think of this as being exactly that of what you ask.
<;-)

I heard Ron Insana refer to the producer price numbers on CNBC today as "shocking". I often listen to his "Ticker Talk" editorials, though I didn't today. He is one very smart cookie, as far as I am concerned.

Then, all day long, I listened as a steady stream of analysts went on air to declare that the price increases were basically "just" food and energy and not to worry. (Last month it was "just" tobacco).

Recently, I wrote here that I sometimes think that most gold bugs feel so defeated that they no longer even expect inflation. Nowadays we are all supposed to pin our hopes on some approaching cataclysm, if not the outright collapse of civilization. WE hear that Japan is going down the drain, or Y2K is going to bring back the stone age. Okay, so as long as gold heads for the stratosphere, making us all rich in the process, does it matter what made it happen? Well, maybe, maybe not.

But we have had three interest rate cuts from the Fed in the last six months. Each one was followed by HIGHER bond yields. Last week the yield even broke an important resistance area when it pierced 5.4%. Why would that happen if the world economy were headed for deflation?

The point is, all of these "experts" that keep telling you not to worry about inflation are WRONG. They say what they do primarily because predicting more of the same is comfortable to them. It seems safer. Our job, as investors, is to see the future, and, gentlemen, I say we got a glimpse of it today. Deflation, we hardly knew ye.

Just a test...Testing system

I can almost picture your hobbits panning for gold in the Baranduin (Brandywine) River. Silly hobbits. EVERYONE knows the River Isen is the place to be...but who wants to pass thru Tharbad to get there? Yikes! Actually, it would be the RETURN trip that would be of concern. As Aragorn would likely say...

Got portable property?

Hey, Usul...this baby is built for speed--how 'bout taking her for a REAL test drive? Zooooooooom!

Well, after looking at the post from The Stranger, it looks like I'm the one with the problem. Why is gold lagging these inflationary signs? Is it just that there has been so much forward selling that demand can't keep up with the supply? We have had record consumption for the last quarter of '98 and are seeing record bullion coin sales. It seems like the demand side is picking up steam, and with the miners losing money at these hedged delivery prices...... maybe that supply is going to dwindle off and prices will then recover.....it seems like the paper gold/futures market might also be a cushion to the anticipated reaction of a small physical market with a larger cash/paper market.....many traders don't want the metal, just the profits........JOPO.

Although I may lose tomorrows price prediction by the widest margin (Hee Hee(A guys gotta be able to laugh at himself)), I can't get rid of the notion that when this baby uncorks' $292 or there abouts, its gonna be a straight line (5-10 trading days) to $317-325 before she even stops to catch her breath. Maybe if I wish hard enough?

The action in the CRB index this week smells of a classic spike bottom. I can't seem to be able to put it all into an eloquent essay, but the picture in my minds eye (bonds/rates, commodities, currency volatility, CB's/Fed/Treasury disaray etc.) and the sense in my gut says that we a very close to the completion of a significant shift in sentiment and perception of the financial world around us.
Maybe this next G7 meeting will unveil some kind of "random event" that will trigger the last phase....
Awh forget it I'm just rambling!
Keep Well!

Friday, February 19, 1999
Banks To Eliminate 20,000 Jobs In 4 Years

TOKYO (Nikkei)--Japan's 15 major banks plan to reduce their combined work forces by 13.8% over the next four years, the institutions informed the Financial Reconstruction Commission on Thursday. The cuts were outlined in reports submitted in conjunction with the banks' applications for infusions of public funds. According to the reports, the banks aim to cut 19,631 employees from their combined staffs, estimated at 142,651 as of the end of March. The reductions are expected to shrink their payroll by almost 6% from this fiscal year's projected level of 1.47 trillion yen. Sakura Bank (8314) will carry out the largest cuts, reducing its payroll by 3,500 employees. The 15 banks are expected to request a combined 7.45 trillion yen in public funds, 73.1% of which, or 5.45 trillion yen, will be received by issuing preferred shares convertible to common stock.
(The Nihon Keizai Shimbun Friday morning edition)
******Can you see the Yen hitting the Geisha's fan ?

Fuji Bank To Securitize 30 Bln Yen
Worth Of Credit Card Loans
TOKYO (Nikkei)--Fuji Bank (8317) will securitize 30 billion yen worth of credit card loans as euro-denominated bonds for sale to overseas institutional investors and others, bank sources said Wednesday. This will be the first such move by a Japanese bank. Tokyo-based Fuji has an outstanding balance of 300 billion yen in credit card loans to individual customers, the largest among Japan's city banks. It hopes to expand credit card lending, a key retail banking function, by boosting loan capability through the securitization. Fuji Bank has set a coupon rate on the 2-year bonds at 50 basis points above the London Interbank offered rate. Its London securities subsidiary and Banque Paribas will lead-manage the issuance. The bonds have already obtained a AAA rating from U.S. and U.K. ratings agencies, the sources added. Recent deregulation moves have simplified procedures for the sale of credits; banks can now not only consolidate small-lot credits but also securitize the resulting credit. Fuji's 30 billion yen securitization will consolidate 130,000 credit card loans.
(The Nihon Keizai Shimbun Thursday morning edition)
*****Is this not placing another layer of paper on paper ?
<;-)

Received this today by way of a Congressional staffer ... I believe it speaks for itself.

Al Gore to World Economic Forum
Davos, Switzerland
2/18/99

"Laissez Faire has caused so many of the world's problems."

"Forget the Gold Standard, we now operate on the information standard"

"The private sector needs to bear more of the burden"

"The problem is that so many investors are unwilling to invest in places where they have previously suffered losses."

"The enterprenuerial spirit is essential to economic growth."

Hoooooooo Boy

This weeks Comex Spot chart on Kitco seems to be inordinatly choppy. A very unusual pattern of constant spike squiggles on all three days. Any signifigance ???

Why hasn't gold responded yet is the same question I keep asking, and I have been helplessly waiting for months for an answer. If reinflation is what's coming, shouldn't gold haved begun PREDICTING it by now?

Part of the reason it hasn't, I think, is human nature. I remember the early Eighties. Volker tightened the money screws so hard that inflation was doomed. Yet it took people YEARS to believe that disinflation was for real. Some guy named Howard Ruff had a book out which I think was called "How to Survive and Win in the Inflationary Eighties". He had his own TV show, and people used to crowd into his seminars. Even after the recession in '82, there was widespread expectation that inflation was coming back. For some reason that you can probably explain better than I, the masses always seem to discern what's coming by extrapolating what has already happened. When it comes to major shifts in the economy, people just don't seem to want to believe until they have no other choice.

Another reason, I suspect, is that, darn it, reinflation of an economy that has been disinflating for eighteen years just ain't gonna happen overnight.

And finally, I believe that the gold carry trading is for real. I certainly hope it is at any rate, because, if it is, the rally, when it comes, will be all the more powerful.

That dollar (FRN) isn't a thing to be owned. It's a claim check. You can claim something with it in the USA, at what ever value it will be recieved at, that day. In other words to own it you have to convert it to somthing that is ownable.

I think golds still stagnant for the same reason wheat is down, probably getting below domestic crop value. Also why many countries are having to sell their wares cheap and import dear. There is an identity in the behavior of gold and that of international commerce in general. The mechanisms of paper gold are identical to those of paper trade (currency). Trading for profit in the rights to things rather than things themselves has become the controlling factor of price asked and obtained, and therefore value. It is apt that Ayn Rands "Atlas Shrugged came up last night as that story as I recall dealt with this kind of situation only being halted by the producers saying "I quit". Did you see my Msg#2427 on Feb 15 PM ?

"Forget the Gold Standard, we now operate on the information standard"
--Al Gore to World Economic Forum;Davos, Switzerland 2/18/99

Forget the Gold Standard?? Why would he say such a thing??

For all practical purposes, the gold standard ended in 1933 with an unconstitutional act by FDR. Oh sure, the standard endured on the international scene until 1971 when an alarmed President Nixon closed the Treasury's dollar/gold redemption window. Americans were consuming a greater share than they were producing--as measured by the trans-border flux, and gold settled the account. Naturally, if/when the gold ran out, the international parties would say, "Hey, we can't sell you anything else...your money's no good anymore." Nixon anticipated the event by saying, "Boys, you're just gonna hafta take our paper for what it's worth. You be the judge." Bam! The fiat money creation kicked into high gear, and the presses have been smokin' for 30 years now. Which brings me back to my point...

Thirty years. And Al Gore dares to mention something as illrelavent as the gold standard in that context?? Hmmmmmmmmmmmmmmm...makes you wonder. And this talk of IMF gold sales? They don't want to sell it to raise money. Heck, that's just a rouse. SOMEBODY wants or needs that gold, and brother, there's no other source of gold to be had.

Unless you check my pockets, that is.

I'm sorry to say, but happy to be, gone from the Land inside the Beltway for many many years. Having seen the reports on the speech algore gave in Southeast Asia to the gathered head of states, where he lectured them on "how to" -- does he have control of his discussion matter and is really that dumb, or is he just a figurehead and reads the script given to him ? Sure would like to know.

I'm hoping to generate a lot more response on this topic, even if it is just to echo what someone else has said.

I like your idea that it is parallel to a claim check...in and of itself it is not worth owning, but you had darn-well hang onto to the thing if you want to get your coat back after the party. And it gets worse! If you stay at the party for a long time, when you eventually turn in your coat-check claim ticket, you might not get the same good-quality coat as if you had redeemed the claim check shortly after arriving.
Does anyone care to suggest that you do, in fact, OWN the claim check? It's still open to debate.

But to risk skipping ahead, IF there were to be printed on the dollar "PROPERTY OF:_________________", what would it say on the blank space? The bearer's name?

1546: Heywood, Proverbs:- For alwaie owne is owne, at the recknynges eend. That which is not held close, is it truly owned? Time has a way of separating goods from their owners, in the past this was through pillage and destruction, with just a crock of gold in the ground to
testify to an unfortunate's (unsuccessful) attempt to preserve their fortune. When goldsmiths became bankers,
at first the gold they held safe for their clients was truly owned, but later through the invention of fractional reserve claims on the gold, (paper money) the clients' gold was stolen by stealth. "To offer much to him that asketh
but a little, is a kinde of deniall" [1631, Mabbe, Celestina]- to offer much paper instead of that which has
intrinsic value; gold; or to offer much gold in the form of
leasing, short selling, or forward selling, this does
deny the true value.

Happy to see someone else as old as I. Thou speakith my old tongue !
<;-)

The base of the pillar?

You own that claim check like any other; because you have it in your fist or your pocket. If you want it to say property of, well thats probably a certified check. (The kind that if its stolen, you don't lose the money)

Peter, that works until that hat-check girl says:

"But sir, we don't honor *those* claimchecks any longer."

Then who owns what?

GF

But can anybody here relate to me what an ounce of information is quoted for....

I got plenty to sell if'n your willin to pay. Though there's some who'd call it somethin else.

Seems, Mr. Gore's been spending way too much time hanging out in Aspen waitin for his crystal to vibrate.

Thanks. I reread 2427, per your suggestion. I believe I understand you to say that gold, as well as other commodities, might perform better were it not for the tendency of so many to trade in paper surrogates rather than the tangibles themselves. Would the depletion of central bank gold reserves and the recent acceleration in paper money creation around the world qualify as at least an ancillary example? If so, why wouldn't higher prices for just about anything tangible inevitably result, anyway? Perhaps that is your point.

Peter, please forgive me if I am butchering your ideas. I have a pretty keen grasp of the obvious. The inobvious takes me a while.

By the way, do you ever hear from Gordon?

Just as Gandalf did when he demanded a clarification of the meaning of "own".
Initially, the line of questioning was intended (and still is(!)) to compare and contrast the qualities of a dollar and gold. Yet, as you rightly remind us, not all gold is created equal! Your post clearly reminds me that if you don't *have* the gold (as in "in your pocket"), then you really can't be sure what you have, exactly.

Peter--Goldfly makes an excellent point. I think what we're eventually working toward here will be a startling discovery for many...

Now let's have some of your good info...enough to tip the scales. I like your delivery!

Stranger (or Peter): When you're refering to an old post Msg ID: #, would it be too much trouble to give the day of posting also? Rooting around in these infernal archives can be a bear without that info. For example, I recall a time that Aragorn (I think(?)) tried to request our use of terms OTHER THAN "inflation" and "deflation". I recall that Gandalf chimed in (or was it Goldfly?) that that was good advice. ANYWAY, I tried to find that post to repeat it. Because as worthwhile as Stranger's recent post was, I still don't know what to make of it because I don't know if his terms refer to money supply or prices. HELP!!!

Aragorn III--if you save your posts, or know where it is...how 'bout a little help here? ---Aristotle

I believe that when I own something, I can hold it and do with it as "I" please. Paper greenbacks - I can cut them, burn them, or trade them for something else. The same holds for Oz's of Au. Both are ONLY worth 'what someone else is willing to give me for them'. Generally, the more of it (Au or greenbacks or, for that matter, whatever!) in existence, the lesser the value becomes (to someone else). Is there any doubt that the more paper money printed the lesser the true value becomes? Can you own paper money? Sure! If I convince you that 100 Geo. Washington's is worth a trade for your 1967 Camero, we have a deal and we both switch ownership of said property. Then. . . .what each (100 GeoW's or the Camero) is worth to somebody else is another story.

At 1:00 am. Friday morn in NY the afterhours trading on the APR Au contract is at 287.60 ! This is exactly the prognostication of one HopeingII who has been "sitting on the pot" for what seems as ever. HopeingII, both the Hobbits and I are impressed. Even with everyone pushing for higher levels, the price is frozen at your number.
Chok dee (good luck).
<;-)

You are absolute right--no doubt about it--on your statements about supply and value, etc. That is how I see it too. But in regard to *ownership*... let's take a closer look.

You said, "I believe that when I own something, I can hold it and do with it as 'I' please."
Bingo. Right you are. Your next statement lays bare the truth of the matter.
"Paper greenbacks - I can cut them, burn them, or trade them for something else."
Not so fast, you Hacker and Slasher! Drop that match, Sancho Panza! All that glitters isn't gold, and all that burns isn't yours!
True, you are free to destroy (or cherish!) everything you own. You are not free, under penalty of law, to destroy money of the United States of America, Inc.

Think of dollars as something that you may make use of, but cannot lay a claim of ownership on.

Richard, we've made good progress here. Well done! ---Aristotle

That's the other Peter Asher, He and Gordon were a British rock group before Peter became James Taylor's Manager. In 1965 I was in the Manhattan book listed as a designer and I got all sorts of phone calls from "teeny boppers" who couldn't differentiate such complicated language.

My point about paper trade in msg 2427 was that the quantity of this activity keeps growing as our true productivity increase, sucking out the affluence by distribution of the work of the producers to producers and non producers alike. By true productivity I mean the useful value of a man's labor hour increases dramatically with technological advances (while the standard of living of society expands at a lesser rate. That is the summation of the paper trading effects on value. However within the totality of the global trade event there are pluses and minuses. Selling paper gold lowers the price of the physical. If one bought up the paper futures, the metal would trade higher until they were executed. When the buying and selling of Bonds and currency makes Brazilian wheat cheaper world wide than our wheat sells for less also.

It's the tail wagging the dog again. Prices are not determined by the true value of the product but by the alterations of prices through the supply and demand quantities in the paper trade. There's more on this in the fourth paragraph of #2400 on 2/14 PM.

If the hat check girl did that you'd call the cops or use the the courts to reclaim your hat.

Dictionary definition of "Own". "To have or possess. Watch the sohistry here, guu's

That's Sophistry guy's.

No spell or typo check when using the posting box directly

But you must remember that we are REALLY talking about an instrument created by governments. In regard to the hat/coat check claim ticket, well...sometimes the analogy breaks down.

See my post not long ago to Richard. ---Aristotle

Junior (Liar Liar "White House Said Clinton & Yeltsin Have Not Spoken")
http://www.russiatoday.com/
Interesting situation now evolves on the World Stage.
It is reported that at times Yeltsin is a drunken buffoon; as Churchill said "But maddam I shall be sober in the morning" or words to that effect. Clinton on the other hand is a proven liar, at the start of every morning.
Who does one believe? Why, I ask myself, am I inwardly compelled to prefer Yelstins version of the truth? I think that the Nations of Islam. Russia, Eastern Europe and China will make much more of this than we have ever thought possible. Pity, Clinton the liar should have gone. He now speaks for all Americans most of whom are not liars, cheats, scoundrels, skullduggers, or womenizers, most of whom have not committed perjury, obstructed justice or tampered with witnesses. Pity such a man can be called President of the United States of America. He must make all desent folk and your military leaders chringe with rage and anger.
Pity, just a pity.
Good night all. I have not posted in a while. Been away. Good night from the wonderful land of OZ, and the little bit of it that faces the Great Southern Ocean. Ahh wish you good folks could share it with me. Cheers Jr.

for Stranger: getting old.

for Peter: Weekly chart shows gold in lb-bd of 4 (see www.stockman-forum.com/ta.htm for definition). This tells me gold should see a break out towards $301.00 in next four weeks. Daily chart shows lb-bd of 3 and sometime in next five days will likely hit $293.50.

Today's price of April futures shows $288.60 currently. Posit is either a 2 or 3, meaning (gold has tendency for posit 4) today and maybe monday will end higher then last two days. I suspect April gold will close at $290.50 today and $293.50 on Monday or Tuesday.

Platinum lease rates up 2%. Silver's still over 8% for one-month too. Gold to follow??

Milk industry being sued by man for clogged arteries because there were no warning labels on his milk cartons.

Fifty-four million awarded to woman against Daimler-Benz for air-bag bruise injury.

Gun-industry under attack for mis-use of guns.

Legislation now in session to allow attorney involved in tobacco-industry suits for fees up to $4,000 per hour.

Drudge with very negative report on "guess who?"

Other than that, not a bad day.

The analogy doesn't break down at all- The girl is a bank teller and the USG has just cancelled your 'claim'.

Who owns the paper?

GF

I have read your exceptional post #2506 (2-18 a.m.) three times with great interest. I find your ideas to be profound, even though I struggle a little bit to understand the implications. I would like to hear more from you on this subject. Particularly, the following questions come to mind:
1.) Can you explain how the Euro structure is a shield against a collapse in U.S treasuries?
2.) Do you, in fact, expect a "collapse" in U.S. treasuries?
3.) Who in Japan is actually doing the repatriating? I think I understand why the Japanese central bank would like to repatriate, but why would the citizenry?
4.) Is this week's decline in the yen temporary?
5.) You conclude that, a weak dollar/yen ultimately being as bad for the yen as for the dollar, some t-bond proceeds will be invested in gold rather than yen. Is this inevitable? Why not just not sell the bonds in the first place?
Please trust that I do not ask you these questions to bate you in any way. Your post is fascinating to me, and I wish to learn more. I hope you have the time and inclination to respond. Thanks.

In light of the recent negative comments on gold and the gold standard coming out of this administration, it occurs that perhaps their objective is not so much to specifically keep down the price of gold as it is to squelch any momentum that may be growing in certain corners of the globe for a return to the gold standard as a result of widespread currency destruction.

Which would be more threatening to our ruling class, a spike in the price of gold or a return to the gold standard ?? Certainly, a sharp rise in the price of gold would cause problems for the dollar, the financial system, and the economy. Incumbent politicians might find it harder to stay in office in that kind of environment, but the power structure wouldn't necessarily change that much.

But what about a return to the gold standard ?? That would DESTROY much of their power.

Plank 5 of the Communist Manifesto:
Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.

A return to the gold standard would mean that our rulers would no longer have a central bank to rely on to create money. No longer would they be able to spend money they don't have to fund their socialist/fascist agenda. Revenues would have to come directly from taxes. Would people allow the massive new taxation that would be required to finance the wealth redistribution state ?? I think not.

The gold standard would effectively tie the hands of the powerbrokers and put power back into the hands of the people ... maybe that's why gold talk is anathema ... like throwing holy water on a blood sucking vampire.

Maybe these thoughts are a bit harsh. Don't they REALLY have OUR best interests at heart ??

Two are in the center of the PIT, HopeingII has a hold on the horns of the beast and is holding it in place, while JA is pushing from the rear. On the sidelines are Tico, Pa kua, and Goldfly, cheering for the beast to RUN! The chart master, Peter has indicated that the beast is prone to break loose and make a dash for the lofty reaches of the PIT, but there are dark shadows lurking in the background, hissing disapprovals, and wishing the beast to drop dead! What will happen before the close and settlement today is the main attraction of the day. We watch this together, Yes?
<;-)

MARKET UPDATE (2/19/99): Gold tracked sideways this morning not knowing exactly how to react to a mixed bag of news this morning. The trade deficit came in at a record for 1998 at $168.59 billion but December's numbers improved slightly over November's. Despite the trade numbers, the dollar was strong overseas against both the euro and yen helped by fears of a recession in Europe and the continuing deflationary crisis in Japan. Consumer prices also came in weak led by a drop in apparel.

Any strength in gold seemed to be a related to strength in the silver market where rising lease rates and a 1,073,751 ounce draw down of COMEX warehouse stocks indicated tight physical supplies. FWN reports Goldman Sachs as a buyer in both gold and silver which cold be an indication of short covering. Though the big seller of 6000 gold lots on Tuesday was not revealed in any reports I have seen, I wouldn't be surprised to find out it was Goldman Sachs. If they are covering those trades here, they are trading in a tight range.

Bridge News called the major feature in today's market "the absence of sellers." In an interview in South Africa's Money Web George Milling Stanley of the World Gold Council was quoted as saying that

"I think we saw very, very good gold demand last year. The fourth quarter of last year was the highest figure for any three month period we have ever recorded....As far as the supply side is concerned, nothing unusual on the mine production front, one or two per cent growth last year, most analysts looking for a similar annual average rate of growth for the next five or even ten years. The problem with Central Bank gold, last year not outright sales by central banks. They were something of a force in the market in previous years, but not last year as far as anybody has been able to confirm. The problem was gold that the central banks lend and that speculators can use to sell short. That's what has been putting pressure on the price for the last couple of years in fact..,"

When asked about "conspiracy in the United States to keep the gold price down so that they can bail out companies like the hedge fund LTCM," and the possible class action suit being brought against "some of the big firms on Wall Street" Millings Stanley responded:

"I think its probably going a little too far to say that its a conspiracy...I think its unlikely that they're ever going to get any money out of the firms on Wall Street, or out of the central banks that they claim are conspiring to keep the gold price down, but its fascinating and of course the discovery process may allow somebody in to look at some of the books. That would be interesting."

Milling Stanley then made one more very interesting observation worth passing along: "...the central banks are now very aware that the gold they lend to the market doesn't just go to help out producers who want to hedge their production. It actually goes to people who want to borrow gold because it's very cheap to do so and use the funds that they generate in other speculative activities. Look at Long Term Capital Management for example. That's precisely what they were doing, and I think some of the central banks are getting a little concerned as to who the ultimate beneficiaries of the gold they lent the market are."

Seems we've come a long ways from the days when we and a handful of others were lonely voices cut from the mainstream. We never used the word "conspiracy" here but we did use the word "manipulation" on occasion -- and we still do. We do not know ultimately who is responsible for holding the lid on gold. We can, however, see the footprints in the sand -- and the trail leads unmistakenly toward the bullion banks and the central banks. The only question is if the central banks were fully aware of what they were encouraging by offering up their metal for lease. In terms of what leasing gold to LTCM means to the central banker, look at it this way. When you lend money to a nation-state, you depend upon the taxing capability of that entity to repay the loan. When you loan gold to Long Term Capital Management which does not have a productive role in the economy -- in other words it does not manufacture or distribute a useful product but exists only to gamble with other peoples' money -- then where do you look to be repaid if the gambling operation sours as it did in the case of this wastrel hedge fund? The answer is "you have no recourse!" Your loan has turned into a sale the day the hedge fund files its bankruptcy papers. And that's what the central banks who lent their gold to LTCM are facing -- bankruptcy and loss of the gold.

That is why Mr. Milling Stanley's remarks yesterday were so compelling.

That's it for today, my fellow goldmeisters. More later if anything interesting develops.

Aristotle - You're right. $'s are only notes that promise to the bearer the notes denomination value in some type of goods or services (perceived, of course). Because of inflation or cost of production or availability, etc., the value (in $s) of the goods/services may increase or decrease. But that's off the point.

Isn't it said 'possession is 9/10's of the law (of ownership)' or something like that. No one will prosecute you for burning your paper $'s even though it may be a crime. (We don't even prosecute Slick Willy for dropping his pants in the oval office or lieing to a GrandJ.) Burning money, you've got to be kidding!

With Au, the value is in your pocket, you possess it so you own it, "the value (commodity) that it could be exchange for". (Look up possess.) With $'s, I own it because I possess it, but it's just a note and has no true (commodity) value, it's a promise note of value for exchange. The promise by the issuer, US Trea., could be withdrawn a any time. It's only a note (promise). Au's value is in your hand, no one is promising it to be of value, it IS value. Both Au's and the $'s value can change at a monents notice but one is certainly more volatile and is shrinking every (day) year. I get it! Got VALUE (Au)!

Even though the POG has started to get restless, inspiring enormous interest and expectations, I can't get over that '67 Camaro that Richard in Oregon is trying to scoop for "one hundred Geo Washingtons".
Richard--if you can pull it off, maybe we can cut a deal. As you know, from my post of a couple of days ago, Daddy took mine away!

No49

I don't know why I mentioned the 1967 Camero. It just came to mind because I own one, a '67 SS350, 4spd, posi tract, 2drHT. Nearly original condition but needs body & paint now with minor fixes to put it in purrrrrfect condition. What a blast. Movin'!! Trade for $'s, no way. Trade for Au, well. . . . .. Have a great day!

SPOT on analogy, Holy water on a Vampire, Perfect

Maybe you overlooked my first response, or else felt a reply was not necessary. No problem. But I WOULD like to have you answer the question "Which Rand book?" and if you've read them both (that I mentioned), which do you recommend, "F." or "A.S."? Thanks! ---Aristotle

Took a walk through the archives with a brighter torch!
* * * * * * * * *
Aragorn III (2/5/99; 10:29:16MDT - Msg ID:2224)
T.Remital...
We see things with a similar eye.
I might recommend that you and I and all others who grace this site on
occasion, agree to this simple proposal...
Because 'inflation' and 'deflation' mean different things to different
people (some see 'cause' (money supply) and others see 'effect'
(prices)), let us try to avoid use of those terms altogether. Instead,
we should state the phenomenon to which we are referring-- increasing
(or decreasing) money supply OR prices. This will greatly facilitate
future discussions. Agreed?

Aragorn III (2/5/99; 10:38:00MDT - Msg ID:2225)
USAGOLD demonstrates my point...
While the world may be amidst a contraction of the money supply (as the
rate of new loan creation falls off), repatriation would result in a
local (U.S.) increase of the dollar supply. This would tend to blow the
lid off of prices into the future, despite the current current state of
affairs. Now, if you replace all that text using only terms of inflation
and deflation, everyone can agree, or everyone can disagree, but no-one
acctually communicates their message due to misinterpretation.
got clarity?

backlash (2/5/99; 16:58:51MDT - Msg ID:2229)
Aragorn III, Definitions re: Your Posts # 2225 & 6
Thank you, thank you, thank you ! !
The multiple "understandings" of the definitions of inflation and
deflation make it almost impossible for us beginners to grasp what many
of the knowledgeable ones' messages mean. It is now clear that they mean
different things to different people. Boy does that help.
However, now I really don't know what some of the posts meant. By the
way, would it be possible to add stagflation and reflation to that list
of words that confuse the message?
Thanks again from many (I suspect) of us beginner lurkers.
backlash
* * * * * * * *
OK, so it turns out it was backlash, not Gandalf or Goldfly who chimed in with support. We've really got to try to speak a common language!

In the running for the glittering one-tenth ounce golden Philharmonic, JA comes on strong at the finish to take HopeingII by a nose. It was a battle down the homestretch with both contestants battling for dominance. Gold started the day closer to HopeingII's figure of 287.60 then gathered momentum as the day progressed to finish at 289.50 -- just a scant 60� from JA's prediction. Most of the week it looked like HopeingII was going to take the gold, but JA won it with the late surge. It's out the door to you, JA.

I want to thank all for a wonderful and memorable event. We'll do it again sometime soon.

We got gold, Babe!

In your 10:18 (Msg: 2559) reply, you introduced a notion that I hadn't fully considered because I was too focused in another direction. If I may take some liberties with your thoughts (or better still, tell you how I interpreted them!)---
You are holding to the idea that, Yes, you DO own the dollar in your wallet (even though the laws won't allow you to harm it with blade or fire). And though you own the paper dollar, you really own nothing at all until you spend the dollar.

See, that element escaped me, because I am intent upon the FACT (to be proven in time) that we really do NOT own the dollars in our wallets. You make the good case that it is academic what we may feel about the ownership issue...there is nothing of substance really owned anyway--until spent.

The quest, and lesson, continues...

WOW -- what a pushing contest tween HopeingII and JA! Right up to going either way and settles at 289.5 so that the mathematicians will have to get out the slide rules and determine the WINNER. Love to watch the games being played on Wall Street at the end of the day on a week closing. VOLATILITY anyone ?
<:-)

Aristotle, sorry ... the book is Atlas Shrugged, incidentally, the only Rand fiction that I've read ... have been most influenced by her non-fiction. Saw recently where AS is the second most widely read book of all time, behind only the bible ... that came as a surprise to me ... don't hear it mentioned that often.

Peter, thanks ... I always enjoy reading what you have to say. By the way, weren't there to be more installments about your daughter's solo trek across China, in true individualist fashion ?? (hope I've remembered that correctly)

Peter calls them "Production Chits."

Michael

Thanks for sponsoring these contests. I think It adds some excitement and interest to this site. It looks to me like you are adding new posters to this site on a daily basis. The number of posts that get logged is increasing and yet the quality of the information that is being shared continues to be very thought provoking, helpful and instructive.

I feel a little sheepish accepting the winning prize, because I believe I gain much more from the other contributors to this site than I an able to contribute because of time constraints. Having said that, I will go ahead and accept your prize because I do place great value on gold and silver coins. It will be kept in a safe place.

As a side note I find that gold and silver coins are great savings vehicles, I tend to hang on to them as a store of long term increasing value. The very thing that scares the banks, the thought that people may take out cash and just store it. That causes havoc with the fractional banking system.

As I suggested in my post the gold trend line has not yet been broken, some technicians would suggest the longer it goes without being broken, the stronger the movement up once it is broken. I guess we should thank those who are actively manipulating the price of gold for buying us more time.

I have some responsibility for the 401K plan of the company I work for. The common phrase we all hear is put your money in equities for the long haul, they will out perform everything else because they have done so in the past. (I don't necessarily even agree with that statement by the way) But I also think we are at a different time and place in history. What was true in the past may not hold true in the future. I am much more comfortable, saying put your money in gold for the long haul.

I am headed out of town for a little retreat with my lovely wife. I will check in with you all tomorrow evening.

Thanks again for making this space available to us and for offering the occasional monetary rewards to make it interesting. Thanks also to the posters for the information you so willing share.

JA

Peter is spot on with a great deal, but I'd have to come down on the other side of this issue. My problem rests with the notion of prescribing some semblance of value to the prodution that has been acheived, independent of the free market performing that task with their available wealth (money). What was Aragorn's example...wooden clothes? Face to face we could definately work it out over a few beers. ---Aristotle

"The very thing that scares the banks, the thought that people may
take out cash and just store it. That causes havoc with the fractional
banking system."

This is a good chance for the people to get even, as it is their fractional reserve banking system that causes havoc with our money's value!

And the beauty is...it's gonna happen. Y2K precautions will ensure that it does. First the cash goes, then when you can only access your accounts via check...Ohhhhhhh boy! are the bullion dealers ever going to be busy. I hope USAGOLD has installed extra phone lines. Hey Michael, when push comes to shove (shortages), will you give Forum posters preferential treatment?

I seem to recall hearing that Gary North will be on the Art Bell show this evening. I'm sure he will have some interesting things to say about gold's role in Y2K.
Rule #1 in survival: Stay calm. Don't panic at the last minute.
Rule #2: Panic now and avoid the rush!

I don't know if I can catch the show. I hope somebody out there will, and then will report the gist of it. ---Aristotle

While my last post technically answered your question I think, I feel that it was incomplete ... hopefully you'll allow me to revisit it. First of all, Atlas Shrugged is an AWESOME book ... a highly recommended read, and that's coming from a person whose reading tends more to be objective-driven than entertainment-driven.

Ayn Rand belongs on an intellectual pedestal in my opinion. Reading her works resulted in an epiphany of sorts for me. She not only validated my thinking, which I had discovered often didn't conform with the actions of others despite what I considered to be rational, but she took what were individual thoughts in parallel and closed them into a loop. Other authors I've since read have broken no new ground. She very well might not have the same effect on someone like you who is more well read than me. It would be interesting to hear others opinions .... Peter ?? Aristotle, any suggestions on an author you feel similarly about ?? Tolkien I presume ??

Rand was, of course, the matriarch of the libertarian movement (a movement that she disassociated herself from) ... a passionate defender of freedom. My own desire for freedom can not possibly equal my contempt for those who would deny it. Likewise, my acquisition of gold is less about the drive to get rich than protection from what I've concluded is a sure path toward (towards ?) economic destruction this country has been set on by its 'leaders'.

Shozbot, nanoo nanoo

Turbohawg - if you enjoy Rand you should read some of the stuff her work is based on. The classic liberals, particularly Ludwig von Mises and F.A. Hayek offer much of the same. Mises' 'Human Action' is the definitive economic treatise of all time. Everyone should start with this work. You'll never be confused about what you see around you after you've read this. Other notables would be 'The Theory of Money and Credit' and 'Socialism'. Mises was the only economist to ever offer a point by point refutation of Marx and his ideology. Hayek's 'The Road to Serfdom', and 'The Fatal Conceit' are classics.

Although I'm a big fan of Rand, I found 'The Fountainhead' to be her best work along with 'We The Living'. 'Atlas Shrugged', although known as her best work is quite difficult to get through at times. It was originally to be titled 'The Strike' but somehow was changed.

As far as more contemporary stuff, you might enjoy James Davidson and Lord Rees-Mogg's books. 'Blood in the Streets', 'The Great Reckoning', and 'The Sovereign Individual' are all quite good. They also publish a newsletter titled 'Strategic Investment'.

Check out this website;

www.mises.org

You will not be disappointed. Happy reading.

ET